Market announcement

Title

AS BALTIKA NOTICE AND AGENDA OF THE ANNUAL GENERAL MEETING

Message

Notice is hereby given that the annual general meeting of shareholders of AS
BALTIKA (registry number 10144415, address Veerenni 24, Tallinn) will be held
at the Moelava Hall of the Baltika Quarter at Veerenni 24, Tallinn, on 20 April
2012, commencing at 1 p.m. Registration for the annual general meeting begins
at 12.30 a.m. in the same location. 

To attend the annual general meeting:
- Shareholders who are individuals have to show a document verifying their
identity; appointed proxies have to show a document verifying their identity
and a letter of authorization; 
- Lawful representatives of shareholders who are legal entities have to show an
extract from the registry where the legal entity is registered and a document
verifying their identity; proxies have to show the above as well as a letter of
authorization. 

A shareholder may notify AS Baltika of the appointment of a proxy or the
withdrawal of authorization before the annual general meeting by sending a
corresponding digitally signed e-mail message to [email protected]  or
by delivering the information in person on workdays between 10 a.m. to 4 p.m.
or by ordinary mail to AS Baltika, Veerenni 24, 10135 Tallinn received by 19
April 2012 by 4 p.m. at the latest. 

Shareholders entitled to participate in the annual general meeting will be
determined as at 8 a.m. at the date of the annual general meeting of AS
Baltika. 

The agenda presented by the Management Board and approved by the Supervisory
Council and the resolutions to be proposed: 

  1. Approval of the Annual report for 2011 
- To approve the Annual report of AS Baltika for 2011 as presented. 
- To approve the losses of 2011 in the amount of 5,863,425 euros and to
     cover the losses in the amount of 89,352 euros from share premium and
     651,062 euros from statutory reserves.
  2. Amendments to the Articles of Association
To amend the Articles of Association due to the reason that the share
     capital of the Company will be changed as follows:
- To amend the first sentence of Section 3.1 of the Articles of Association
     of the Company and approve the first sentence of Section 3.1 in the
     following wording:
The minimum amount of the share capital of the Company shall be EUR five
     million (5 000 000) and the maximum amount of the share capital shall be
     EUR twenty million (20 000 000).
- 
To amend the second sentence of Section 4.1.1 of the Articles of
     Association of the Company and approve the second sentence of Section
     4.1.1. in the following wording: The nominal value of each share is 0.20
     euros.
-  
To approve the new version of the Articles of Association. 
  3. Decrease of the share capital of the Company
In order to cover the losses after the use of all reserves in the amount of
     16,714,976 euros, to decrease the share capital in simplified way as
     follows:
- To reduce the share capital of the Company by seventeen million eight
     hundred ninety seven thousand four hundred and twenty five (17,897,425)
     euros.
     - 
The reduction of the share capital is decided by the way of reduction of
     the nominal value of the share and to decrease the nominal value of each
     share by 0.50 euros.
     - 
The new amount of the share capital of the Company after the reduction of
     share capital and reduction of nominal value of the shares is seven million
     one hundred fifty
eight thousand nine hundred and seventy (7,158,970) euros, which is divided
     into 35,794,850 shares with the nominal value of 0.20 euros.
     - 
The list of shareholders who shall participate in the decrease of the share
     capital shall be fixed on 7 May at 23.59.
  4. Issuance of the convertible bonds and conditional increase of the share
     capital
Taking into consideration the need for additional financing on one hand and
     the motivation scheme for the management of the Company on the other hand;
     - 
To conditionally increase the share capital of the Company and to issue
     five million (5,000,000) convertible bonds (H-Bonds) with the nominal value
     of 0.30 euros on the Terms and Conditions of Convertible Bonds (H-Bonds) as
     enclosed to the present decision to the investor indicated in the Terms and
     Conditions of Convertible bonds (H-Bonds).
     - 
Each H-Bond will give its owner the right to subscribe one (1) share of the
     Company with the subscription price of 0.30 euros. The premium is 0.10
     euros. The subscription for the shares will take place 11 May 2013 until 10
     May 2014.
     - 
To conditionally increase the share capital of the Company and to issue two
     million three hundred and fifty thousand (2,350,000) convertible bonds
     (I-Bonds) with the par value of 0.01 euros on the Terms and Conditions of
     Convertible Bonds (I-Bonds) as enclosed to the present decision to the
     management of the Baltika group of companies.
     - 
Each I-Bond will give its owner the right to subscribe one (1) share of the
     Company. The subscription price of the share will be the average sales
     price of the share for the preceding three months, e.g. from
     19.01.2012–19.04.2012. The difference between the share subscription price
     and nominal value of the share is premium. The subscription for the shares
     will take place 1 July 2015 until 31 December 2015.
     - 
Upon the subscription of the shares, the Management Board of the Company
     has the right to increase the share capital by one million four hundred and
     seventy thousand (1,470,000) euros that means to issue seven million three
     hundred and fifty thousand (7,350,000) shares of the Company. The new share
     capital could be up to 8,628,970 euros.
     - 
The shareholders waive their right to subscribe for the convertible bonds
     issued under the present decision and to subscribe for the shares issued to
     exchange the convertible bonds.
  5. Recall of the members of the supervisory council, determining the number of
     the Supervisory Council members and election of the members to the
     Supervisory Council
Taking into consideration that the term of authority regarding some members
     of the supervisory council shall end on 18 June 2012 and the resignation of
     Edoardo Miroglio:
- To recall the Supervisory Council in the whole composition.
- To elect the Supervisory Council with five (5) members.
- To elect the members of the Supervisory Council amongst the candidates
     proposed to the general meeting.
  6. Nomination of the auditor and the remuneration 
To elect the auditors of the Company for auditing the annual report of 2012
     to be Aktsiaselts PricewaterhouseCoopers and to remunerate the auditors
     pursuant to the agreement entered into respectively.

The annual report of AS Baltika for 2011, the independent auditor’s report, new
version of the Articles of Association and other documents to be presented to
the annual general meeting will be available to shareholders from the date of
release of this notice until the date of the annual general meeting at the
website of AS Baltika on www.baltikagroup.com  and at the website of the NASDAQ
OMX Tallinn Stock Exchange on www.nasdaqomxbaltic.com. Questions regarding the
agenda items can be sent by email to [email protected]. 

At the annual general meeting, a shareholder is entitled to receive from the
company’s management board information about the company’s business and
performance. The management board may decide to withhold certain information if
there is reason to believe that disclosure of the information may cause
significant damage to the company’s interests. If the management board refuses
to disclose some information, a shareholder may demand that the general meeting
adopt a resolution regarding the lawfulness of the information request or file
a petition with a court of law within two weeks requesting that the court
require the management board to disclose the information. 

A shareholder whose shares represent at least one twentieth of the share
capital of AS Baltika may demand that additional matters be included on the
agenda of the annual general meeting if the demand is submitted in writing at
least 15 days before the date of the annual general meeting to AS Baltika,
Veerenni 24, 10135 Tallinn. 

Shareholders whose shares represent at least one twentieth of the share capital
of AS Baltika may submit to the company a draft resolution for any agenda item
by sending the said draft resolution in writing at least three days before the
annual general meeting to AS Baltika, Veerenni 24, 10135 Tallinn. 



Maigi Pärnik
Member of the Management Board

[email protected]