Current Report No. 20/2020: Management Board’s resolution to recommend allocation of 2019 profit

The Management Board of KRUK S.A. (the “Company”) announces that on July 27th 2020 it passed a resolution 
on its proposal for the Supervisory Board regarding allocation of the Company’s net profit for 2019 and on its recommendation for the General Meeting to allocate a portion of the Company’s net profit earned in 2019 either to buyback of shares or to dividend distribution, and to statutory reserve funds.

The Management Board recommends that the General Meeting should allocate the Company’s profit for 2019, of PLN 386,517,227.92, and resolve to distribute the funds among the Company’s shareholders in either of the following two ways:
1)    by passing a resolution to distribute the Company’s profit for 2019 and authorise the Management Board to buy back Company shares for cancellation and to set up a capital reserve earmarked for such buyback, and in consequence allocating the profit as follows:
a)    PLN 95,050,000 – to the capital reserve earmarked for buyback of Company shares. This amount includes PLN 200,000 to cover the costs of acquisition of the Company's own shares, 
b)    PLN 291,467,227.92 – to statutory reserve funds.
or
2) passing a resolution to distribute the Company’s profit for 2019 and pay dividend to the Company’s shareholders, and in consequence allocating the profit as follows: 
a)    PLN 94,859,055.00 – to payment of dividend of PLN 5.00 per share to the Company’s shareholders, 
b)    PLN 291,658,172.92, i.e. the balance of the Company’s profit for 2019 – to statutory reserve funds. 

With respect to the distribution of the Company’s profit as specified in Section 1.1) above, i.e. through the buyback of Company shares, the Management Board recommends that shares should be bought back at a price of PLN 350 per share. Invitations to sell shares should be extended to all the Company shareholders. The buyback should commence immediately after the General Meeting passes a resolution authorising the Company to buy back its own shares, and should be closed by November 30th 2020. Detailed terms and conditions of the buyback would be defined in a resolution of the Annual General Meeting, to be convened by the Management Board.
With respect to the distribution of the Company’s profit as specified to in Section 1.2) above, i.e. through the payment of PLN 94,859,055.00 in dividend of PLN 5.00 per share, the Management Board recommends that the Annual General Meeting should set September 7th 2020 as the dividend record date and September 14th 2020 as the dividend payment date.
In recommending the distribution of the Company’s net profit for 2019, the Management Board took into account especially the following considerations: the Company’s current financial and liquidity position, its lower investment activity during 2020, its strategic objectives, as well as the situation prevailing in Poland and globally in the wake of the Covid-19 epidemic.