Resolutions by the Annual General Meeting of Municipality Finance Plc held on 28 March 2023

Municipality Finance Plc
Stock exchange release
28 March 2023 at 3.00 p.m. (EEST)

Resolutions by the Annual General Meeting of Municipality Finance Plc held on 28 March 2023

The Annual General Meeting (hereinafter the AGM) of Municipality Finance Plc (MuniFin) held on 28 March 2023 adopted the company’s financial statements and discharged the members of the Board of Directors (the Board), the CEO, and the Deputy to the CEO from liability for the financial year 2022.

Use of Profit Shown on the Balance Sheet and the Distribution of Dividend
The Annual General Meeting decided that a dividend of EUR 1.73 per share, totalling 67,580,370.54 EUR shall be paid out. Dividends will be paid on 13 April 2023 to each shareholder recorded in the company’s list of shareholders on 4 April 2023.

Remuneration and Composition of the Board
The AGM decided on the remuneration for the members of the Board for the term from the closing of the 2023 AGM, to the closing of the next AGM (the Term 2023–2024) as follows:

• annual fixed remuneration of a Board member EUR 24,000;
• annual fixed remuneration of the Vice Chair of the Board EUR 27,500;
• annual fixed remuneration of the Chair of the Risk or Audit Committee EUR 29,500;
• annual fixed remuneration of the Chair of the Board EUR 42,000; and
• for each Board and committee meeting as well as for each meeting required by the authorities, to the members, a fee of EUR 600 per meeting attended and to the chairs, EUR 950 per meeting attended.

The annual remuneration of the Chair of the Board was increased by EUR 2.000, the annual remuneration of the Vice Chair of the Board and the Chairs of the Risk and Audit Committees was increased by EUR 1.500 and the annual remuneration of a Board members was increased by EUR 1.000. The meeting fees were increased by EUR 150 per meeting for the chairs of the Board and the committees and by EUR 100 per meeting for other positions.

The AGM decided to elect eight members to the Board for the Term 2023–2024 and to re-elect the following current members: Ms. Maaria Eriksson, Mr. Markku Koponen, Mr. Kari Laukkanen, Mr. Tuomo Mäkinen, Ms. Minna Smedsten, Mr. Denis Strandell and Ms. Leena Vainiomäki. In addition, the AGM decided to elect Mr. Arto Vuojolainen as a new board member.

The CEO’s Review
Esa Kallio, the President and CEO of MuniFin, discussed the development of the company in 2022. The CEO emphasized in his review MuniFin’s recently established ability to finance municipal energy companies due to the energy crisis. The CEO also noted that from MuniFin’s perspective it would be important for the wellbeing services counties to become members of the Municipal Guarantee Board and to share the guarantor liability of the funding that is used to finance the wellbeing services counties. In addition, the CEO discussed the current market environment and noted that despite the market turbulence, MuniFin has a good access to the funding market and the company’s liquidity buffers are significant and therefore the company is able to operate normally even under difficult market conditions.

Election and Remuneration of the Auditor
KPMG Oy Ab was elected as the company’s auditor with Tiia Kataja, Authorized Public Accountant, as the principal auditor. The auditor’s fees will be paid against the invoices approved by the company.

Election of the Auditor for the Term Commencing in 2024

The AGM noted the Audit Committee’s recommendation concerning the election of the auditor for the term commencing in 2024 and the Board’s proposal, which was made based on the recommendation, on the election of the auditor to the AGM to be held next year, i.e. in 2024. The Board will propose to the AGM 2024 based on the Audit Committee’s recommendation that PricewaterhouseCoopers Oy will be elected as the Auditor for the term beginning from the election and ending to the closing of the next AGM, i.e., the AGM 2025.

Dividend Policy

The AGM adopted a dividend policy to the company, according to which in the coming years MuniFin aims to pay 30-60% of the Group’s financial year’s profit in dividends. However, dividend distribution must not jeopardize MuniFin’s solvency, liquidity or its ability to meet the commitments.

Incorporation of MuniFin’s Shares in a Book-Entry System and Amendments to the Articles of Association

A)   Incorporation of MuniFin’s shares in a book-entry system and the required amendments to the articles of association

The AGM decided to incorporate the shares of MuniFin in the book-entry system maintained by Euroclear Finland Oy as well to amend MuniFin’s articles of association as required by the incorporation. In addition, the AGM authorized the Board to decide on the registration period, after which the shares of the company will be in the book-entry system.

The AGM decided to make the following amendments to the articles of association in order to incorporate the shares to the book-entry system:

• A reference of the shares of the company being incorporated into a book-entry system after the end of a registration period defined by the Board will be added to the article three.
• The sentence “The consent clause must be noted on the share certificates and in the register of shareholders, as well as on any temporary certificates and subscription right certificates” will be deleted from the consent clause in article four.
• The sentence “The redemption clause must be noted on the share certificates and in the register of shareholders, as well as on any temporary certificates and subscription right certificates” will be deleted from the redemption clause in article five.
• The article 13 concerning the summons to general meeting will be reworded as follows “The summons to a General Meeting shall be delivered in writing by publishing it on the company’s website, by sending it to the e-mail addresses as notified by each shareholder to the company, by sending it by post to the address entered to the shareholder register or by publishing it in a publication specified by the Board of Directors. The summons to a General Meeting must be delivered at the earliest three months before the General Meeting and at the latest one week before the record date of the General meeting. The last date for advance notices of participation shall be mentioned in the summons of a General Meeting.”

B)   Other amendments to the articles of association

The AGM also decided to make the following amendments to the articles of association:

• The article two of the articles of association concerning the company’s line of business states that “the company serves the whole Finnish municipal sector, and particularly the corporations as referred to in Section 1 of the Act on the Municipal Guarantee Board.” The section will be amended to “the company serves the corporations as referred to in Section 1 of the Act on the Municipal Guarantee Board”.
• The article eight of the articles of association states that “the Managing Director, the Deputy Managing Director and company officers may only belong to another company’s management with permission from the Board of Directors of Kuntarahoitus Oyj”. The reference to “company officers” will be replaced by the words “persons reporting directly to the Managing Director”.

In addition, the AGM decided that small technical amendments will be made to the articles of association.

Constitutive Meeting of the Board
At its constitutive meeting, the Board appointed Kari Laukkanen as the Chair and Maaria Eriksson as the Vice Chair of the Board. The following persons were appointed to the Remuneration Committee: Kari Laukkanen as the Chair, and Leena Vainiomäki and Maaria Eriksson as members. The following persons were appointed to the Audit Committee: Markku Koponen as the Chair, and Tuomo Mäkinen, Minna Smedsten and Denis Strandell as members. The following persons were appointed to the Risk Committee: Leena Vainiomäki as the Chair, and Maaria Eriksson, Kari Laukkanen and Arto Vuojolainen as members.

Additional information on the company’s operations in 2022 is available in the company’s Annual Report, which is available for downloading in PDF format at the company website www.munifin.fi.

MUNICIPALITY FINANCE PLC

Esa Kallio
President and CEO
tel. +358 50 337 7953

MuniFin (Municipality Finance Plc) is one of Finland’s largest credit institutions. The company is owned by Finnish municipalities, the public sector pension fund Keva and the Republic of Finland. MuniFin Group also includes the subsidiary company, Financial Advisory Services Inspira Ltd. The Group’s balance sheet totals close to EUR 48 billion.

MuniFin builds a better and more sustainable future with its customers. MuniFin’s customers include municipalities, joint municipal authorities, wellbeing services counties, corporate entities under their control, and non-profit organisations nominated by the Housing Finance and Development Centre of Finland (ARA). Lending is used for environmentally and socially responsible investment targets such as public transportation, sustainable buildings, hospitals and healthcare centres, schools and day care centres, and homes for people with special needs.

MuniFin’s customers are domestic but the company operates in a completely global business environment. The company is an active Finnish bond issuer in international capital markets and the first Finnish green and social bond issuer. The funding is exclusively guaranteed by the Municipal Guarantee Board.

Read more: www.munifin.fi