AS MERKO EHITUS                      ANNOUNCEMENT                      30.03.2005  



Amendments in Articles of Association



Company’s management board and supervisory board present Company’s new amended

articles of association for approval to the annual general meeting of

shareholders. The amended articles of association are more concise, portray the

changes in Estonia's commercial law and determine management board’s and 

supervisory board’s competence in greater detail.



Company’s valid articles of association were approved by the resolution of the

annual general meeting held on April 8, 2003.



The principal amendments included in the revised articles of association:



1) the current minimum share capital is EEK 45 million and the current maximum

   share capital is EEK 180 million (Article 4); the altered minimum share

   capital is EEK 85 million and the altered maximum share capital is EEK

   340 million (Article 4);

2) convening of the annual general meeting: if the number of shareholders of the

   Company exceeds the limit established by law, notices need not be sent to the

   shareholders, however a notice of the general meeting shall be published in at

   least one daily national newspaper. (Article 19);

3) list of transactions requiring consent of the supervisory board: the limits of

   transactions requiring consent of the supervisory board have been increased

   and the distribution of such transactions has been specified in greater detail

   (Article 27);

4) the maximum number of members of the supervisory board has been reduced from

   eight to five members (Article 29);

5) the maximum number of members of the management board has been reduced from

   eight to five members (Article 42);

6) competence of the members of the management board is no longer limited by the

   articles of association, and signatures of two members of the management board

   are not required for transactions exceeding EEK 500 000. 





                             AKTSIASELTS MERKO EHITUS

          OUTLINE OF THE ARTICLES OF ASSOCIATION TO BE PRESENTED TO THE

                      ANNUAL GENERAL MEETING OF SHAREHOLDERS



Business Name, Seat and Fields of Activity of Company



1.    The business name of the public limited company (hereinafter the Company) in

      Estonian is Aktsiaselts Merko Ehitus.

2.    The seat of the Company is the City of Tallinn, the Republic of Estonia.

3.    The fields of activity of the Company are: general construction works,

      renovation, sanitary engineering works, power connection works, electrical

      works and automatics; construction supervision; design works; architectural

      design; expert assessment of technical condition of buildings and construc-

      tion designs; general conservation, restoration and renovation of

      architectural memorials and buildings protected as national heritage,

      interior design works, cleaning works and construction of technical systems

      of the same, supervision of the above works; construction of hydrotechnical

      structures, road construction works, railway construction works, supervision

      of the above works; construction of outdoor heating, water supply and

      sewerage networks, supervision of the above works; excavation works,

      supervision of the above works; disposition, use and possession of immovable

      property.



Share capital and shares 



4.    The minimum share capital of the Company is EEK 85,000,000 (eighty five

      million Estonian kroons) and the maximum share capital is EEK 340,000,000

      (three hundred and fourty million Estonian kroons). The alteration of share

      capital shall be pursuant to the procedure provided by law.

5.    The Company has registered shares with the nominal value of EEK 10 (ten

      Estonian kroons).

6.    The holders of registered shares and holders of registered shares that are

      issued as a result of conversion of convertible bonds are not entitled to

      claim issue of share certificates for their shares.

7.    Contributions to the share capital of the Company can be monetary as well

      as non-monetary. Non-monetary contributions shall be valuated by an expert

      appointed by the management board of the Company. The usual value of a thing

      or right being the object of non-monetary contribution shall be taken as the

      basis for the valuation of a non-monetary contribution. Valuation of a non-

      monetary contribution shall be audited by an auditor.

8.    Registered shares may be freely transferred. Upon transfer of shares to

      third persons the other shareholders do not have a pre-emptive right.

9.    Upon increase of share capital the shareholders have a pre-emptive right to

      subscribe for the new shares in proportion to the sum of the nominal values

      of the shareholder’s shares, unless the law provides otherwise.

10.   A registered share may be pledged or commercially leased. A share

      encumbrance transaction shall be in writing.

11.   The Company may issue bonds by a resolution of the general meeting, the

      holders of which have the right to convert their bonds to shares.

12.   Reserve capital shall be formed from annual net profit transfers and other

      transfers entered in the reserve capital pursuant to law or the articles of

      association. The amount of the reserve capital shall be 1/10 of the share

      capital. Each financial year, at least 1/20 of the net profit shall be

      entered in the reserve capital. When the reserve capital reaches the amount

      prescribed in the articles of association, the increase of the reserve

      capital from the net profit shall be terminated.

13.   Upon a resolution of the general meeting, reserve capital may be used to

      cover a loss if it is not possible to cover the loss from available

      shareholders’ equity of the Company or may be used to increase share

      capital. Payments shall not be made to shareholders from reserve capital.



Shareholder and General Meeting



14.   The rights attaching to shares belong to the person who has been entered

      as a shareholder in the share register.

15.   A shareholder has all rights and obligations prescribed by laws, other

      legislation and the articles of association.

16.   The shareholders shall exercise their rights in the Company at the

      general meeting of shareholders. One share of the Company shall provide

      the shareholder with one vote at the general meeting. The general meeting

      of shareholders is the highest directing body of the Company.

17.   The general meeting shall decide on payment of dividends, prescribe the

      amount of profit to be paid out as dividends and the procedure and terms

      for payment of dividends.

18.   The annual general meeting shall be held once a year. The management board

      shall convene the annual general meeting not later than within six months

      after the end of a financial year.

19.   The management board shall send a notice of the general meeting to the

      shareholders who hold registered shares by registered mail. The notice

      shall be sent to the address entered in the share register. If the number

      of shareholders of the Company exceeds the limit established by law,

      notices need not be sent to the shareholders, however a notice of the

      general meeting shall be published in at least one daily national

      newspaper.

20.   Notice of the annual general meeting shall be given at least three weeks

      in advance. Notice of an extraordinary general meeting shall be given at

      least one week in advance.

21.   A general meeting shall be held at the seat of the Company or in a place

      specified by the supervisory board.

22.   The general meeting may pass resolutions if at least more than one-half

      of the votes represented by shares are present.

23.   If the votes specified in the above article are not represented at the

      general meeting, the management board shall convene a new general meeting

      with the same agenda within three weeks but not earlier than after 7 days.

      The new general meeting is competent to pass resolutions irrespective of

      the votes represented at that meeting.

24.   A resolution of a general meeting shall be adopted if over one-half of

      the votes represented at the general meeting are in favour unless the law

      prescribes a greater majority requirement.

25.   A resolution on amendment of the articles of association shall be adopted

      only if at least two-thirds of the votes represented at a general meeting

      are in favour. A resolution on amendment of the articles of association

      shall enter into effect as of making the respective entry in the

      Commercial Register. The resolution of the general meeting on amendment

      of the articles of association, the minutes of the general meeting and

      the new text of the articles of association shall be appended to the

      application submitted to the Commercial Register.



Supervisory Board



26.   The supervisory board shall plan the activities of the Company, organise

      the management of the Company and supervise the activities of the board.

      The supervisory board shall notify the general meeting of the results of

      a review.

27.   The supervisory board shall give orders to the management board for

      organisation of the management of the company. The consent of the

      supervisory board is required by the management board for conclusion of

      transactions that are beyond the scope of everyday economic activities.

      The consent of the supervisory board is required by the management board

      for conclusion of transactions that bring about:

27.1. the entry into a transaction, incl. concluding a contract and submitting

      a tender if the value of the transaction or the sum of the values of the

      transactions entered into simultaneously exceeds ten million

      (10,000,000) EUR, or

27.2. the assumption of a loan or entry into a lease contract in the amount

      exceeding one million (1,000,000) EUR, or 

27.3. granting of loans, guarantee of debt obligations, acquisition of a claim

      or taking over a debt in the amount exceeding two hundred thousand

      (200,000) EUR, or 

27.4. making investments and acquiring or transferring fixed assets exceeding

      the amount  prescribed in the budget of the finanacial year if the value

      of the transaction or the sum of the values of the transactions entered

      into simultaneously exceeds two hundred thousand (200,000) EUR, or 

27.5. the acquisition or transfer of immovables or registered movables if the

      entry into the transaction is not prescribed in the business plan or if

      the transaction value exceeds two hundred thousand (200,000) EUR, or 

27.6. the acquisition or transfer of an enterprise, or termination of its

      activities, or

27.7. the foundation or closure of foreign branches.

28.   The supervisory board shall approve the annual budget of the Company.

29.   The supervisory board of the Company consists of 3 to 5 members.

      A member of the supervisory board shall be a natural person with active

      legal capacity. A member of the supervisory board need not be a

      shareholder.

30.   The members of the supervisory board shall be elected and removed by

      the general meeting. In order to elect a member of the supervisory

      board, his or her written consent is required.

31.   A member of the supervisory board shall be elected for a tenure of

      three years.

32.   Members of the supervisory board shall elect from among themselves

      a chairman who shall organise the activities of the supervisory board.

33.   The supervisory board meetings shall be held when necessary, but not

      less frequently than once in every three months. A meeting shall be

      convened by the chairman of the supervisory board or a member of the

      supervisory board substituting for the chairman. Advance notice of at

      least 1 (one) day shall be given to the members of the supervisory

      board of the holding of the meeting of the supervisory board and of its

      agenda.

34.   A meeting of the supervisory board has a quorum provided that more than

      one-half of the members of the supervisory board attend such meeting.

      A member of the supervisory board shall not be represented by another

      member of the supervisory board or by a third person at a meeting or in

      the adoption of a resolution.

35.   A supervisory board meeting shall be convened if this is required by

      a member of the supervisory board, the management board, the auditor or

      shareholders whose shares represent at least 1/10 of the share capital.

36.   A resolution of the supervisory board shall be passed if more than

      one-half of the members of the supervisory board attending the meeting

      vote in favour. The chairman of the supervisory board shall have the

      deciding vote upon an equal division of votes.

37.   Every member of the supervisory board shall have one vote. A member of

      the supervisory board shall not have the right to abstain from voting

      or to remain undecided.

38.   The supervisory board is entitled to pass resolutions without

      convening a meeting.

39.   The chairman of the supervisory board shall send a draft of said

      resolution in writing to all members of the supervisory board,

      specifying the term within which a member of the supervisory board

      shall present his or her position on it. If a member of the supervisory

      board does not give notice of whether he or she is in favour of or

      opposed to the resolution within said term, it shall be considered that

      he or she votes against the resolution.

40.   Remuneration corresponding to the tasks of a member of the supervisory

      board and to the economic situation of the Company shall be paid to

      a member of the supervisory board, the amount of and procedure for

      payment of which shall be determined by a resolution of the general

      meeting.



Management Board



41.   The management board is a directing body of the Company which

      represents and directs the Company. The management board shall,

      in directing, adhere to the lawful orders of the supervisory board.

      The management board is required to act in the most economically

      purposeful manner.

42.   The management board of the Company shall consist of 3 to 5 members.

      The supervisory board shall appoint a chairman of the management board.

43.   The members of the management board shall be elected and removed by

      the supervisory board. In order to elect a member of the management

      board, his or her consent is required.

44.   A member of the management board shall be elected for a tenure of

      three years. The supervisory board may remove a member of the board

      regardless of the reason, but the rights and obligations deriving from

      a contract concluded with him or her shall terminate pursuant to the

      contract.

45.   Upon election of the members of the management board the supervisory

      board shall specify the areas of work of the members of the management

      board.

46.   The management board shall present an overview of the economic

      activities and economic situation of the Company to the supervisory

      board at least once in every three months and shall immediately give

      notice of any material deterioration of the economic condition of the

      Company or of any other material circumstances related to the economic

      activities of the Company.

47.   The board shall organise the accounting of the Company.

48.   A meeting of the management board shall be convened by the chairman

      of the board. A meeting of the management board shall have a quorum

      if more than one-half of the members of the board are present.

      Resolutions shall be passed by simple majority of votes. The chairman

      of the management board shall have the deciding vote upon an equal

      division of votes. Minutes shall be taken of meetings of the management

      board.

49.   According to a unanimous decision of members of the management board,

      a resolution of the board can be passed without convening a meeting,

      by telephone questionnaire. The chairman of the management board shall

      record such questionnaire in the minutes, which shall be approved at

      the next meeting of the management board.



Reporting and Distribution of Profit 



50.   After the end of the financial year, the management board shall

      prepare the annual accounts and management report pursuant to the

      procedure provided by law.

51.   The supervisory board shall review the annual report and shall prepare

      a written report concerning the annual report, which shall be presented

      to the general meeting. The supervisory board shall indicate in the

      report whether it approves the annual report prepared by the management

      board. In addition, the report shall indicate how the supervisory board

      has organised and directed the activities of the Company.



52.   Based on the approved annual accounts the general meeting shall pass

      a resolution on profit distribution. 



Merger, Division, Transformation or Dissolution



53.  The general meeting shall decide on merger, division or transformation

     of the Company pursuant to law. 

54.  The Company shall be dissolved pursuant to the procedure provided by

     law. The members of the management board shall be liquidators of the

     Company unless the resolution on dissolution prescribes otherwise.



Alar Lagus

Member of the Board

+372 6 805 109