Latvijas Gaze                                                03.12.2004.



Draft decisions of  Repeated EGM of Shareholders of JSC “Latvijas Gaze”  

to be held on December 15, 2004

Agenda: 

1.About conversion of shares of JSC “Latvijas Gaze”.

2.About amendments to the Articles of Association of JSC “Latvijas Gaze”.

3.About composition of Management Board of JSC “Latvijas Gaze”.

4.Other questions related to registration of JSC “Latvijas Gaze” in the 

Commercial Register.



Hem No. 1 of agenda

About conversion of shares of JSC “Latvijas Gaze”.

To convert 2 500 (two thousand five hundred) common shares without voting 

rights, which are reserved to the Management Board into dematerialised bearer 

shares, giving the owner voting rights at the meetings of shareholders and 

the right to receive dividends and liquidation quota. 

To put 2 500 (two thousand five hundred) bearer shares converted into 

circulation on the regulated market.

To convert 25 326 020 (twenty five million three hundred twenty six thousand 

twenty) common registered shares with voting rights, which are put into 

circulation on the regulated market, into 25 326 020 (twenty five million three 

hundred twenty six thousand twenty) dematerialised bearer shares, giving the 

owner voting rights at the meetings of shareholders and the right to receive

 dividends and liquidation quota.

To authorize Management Board of JSC “Latvijas Gaze” to take all the required 

actions to effect the share conversion and to put the shares into circulation 

on the regulated market.

 

Hem No. 2 of agenda

About amendments to the Articles of Association of JSC “Latvijas Gaze”.

To approve "Amendments to the Articles of Association of JSC “Latvijas Gaze”" 

on 9 pages.

To prescribe that amendments to the Articles of Association of JSC “Latvijas Gaze” 

shall become effective from the moment of registration in the Register of 

Enterprises of the Republic of Latvia (an administrative institution of the 

Commercial Register).

If state notary of the Register of Enterprises of the Republic of Latvia 

(an administrative institution of the Commercial Register) has made the 

decision to suspend or refuse the registration of JSC “Latvijas Gaze” in the 

Commercial Register and if such suspension or refusal is related to unconformity 

of amendments to the Articles of Association of JSC “Latvijas Gaze” to 

legislative acts of Republic of Latvia or other imperfections and, if elimination 

of the imperfections do not change the scope of rights and liabilities of 

shareholders, authorise Management Board of JSC “Latvijas Gaze” with its 

decision to eliminate reasons of the suspension or refusal of the registration, 

which are mentioned in the decision of the state notary of the Register of 

Enterprises of the Republic of Latvia (an administrative institution of the 

Commercial Register), approving respective amendments to the Articles of 

Association of JSC “Latvijas Gaze”.

Draft, 03 December 2004

Amendments to the Articles of Association of JSC “Latvijas Gāze”

1.	Replace in the name of Section I the word “Company” with the word 

“Firm”.

2.	Replace in 1.1 the words “joint stock company “Latvijas Gaze” 

(hereinafter referred to as “Company”) is a company “with the words “The firm 

of the company is the joint stock company “Latvijas Gaze” (hereinafter 

referred to as “Company”), which is a capital company,”.

3.	Delete 1.2, accordingly change the numeric sequence of clauses.

4.	In the whole text of the Charter change the words “The Meeting”

(in respective case), “General Meeting” (in respective case) and the words 

“General Meeting of Shareholders” (in respective case) with words “Meeting 

of Shareholders” (in respective case).

5.	In 2.1 delete the words «under the laws of the Republic of Latvia 

“On Entrepreneurial Activities”, “On Joint Stock Companies”, “On Energy”

and other».

6.	Delete 2.2, accordingly change the numeric sequence of clauses.

7.	Delete 2.11, accordingly change the numeric sequence of clauses.

8.	Delete clause 2.13.

9.	Word the name of Section III as: «TYPES OF COMMERCIAL ACTIVITIES».

10.	Change in 3.1 the words “natural gas and liquefied gas to consumers

 and” to words “gas and energy to consumers, as well as”.

11.	Word 3.2 as follows:

“3.2. The main types of activities of the Company according to the General

 Classification of Economic Activities (NACE) are as follows:

1)	production of gas and distribution of gas along gas mains (40.20),

 including acquire, transportation of all types, distribution and sale of

 natural gas; (wholesale and retail sale);

2)	other retail sale in specialized shops (52.48), other retail sale

 outside shops (52.63), including supply of liquefied gas, retail sale, 

transportation of all types, import, export, transit and distribution of gas;

3)	retail sale of car petrol (50.5), including gas retail sale of 

natural gas and liquefied gas as car petrol;

4)	wholesaling of solid, liquefied and gaseous petrol and similar 

products (51.51), including wholesale of natural gas and liquefied gas and

 wholesaling of natural gas and liquefied gas as car petrol;

5)	pipe transmission transportation (60.3), including transportation 

of natural gas along gas mains, import of natural gas, export and transit

 of natural gas;

6)	storage and warehouse management (63.12), including storage of natural 

and liquefied gas;

7)	services and advice in the area of architecture and projecting (74.2), 

including projecting, construction supervision and management of all external 

and internal systems of gas mains and systems of gas transmission and distribution;

8)	general construction of buildings and engineering-technical works (45.21), 

including construction and assembly works on all external and internal systems 

of gas mains and systems of gas transportation;

9)	plumbing and technical works (45.33), including transportation, processing,

 storage, distribution of natural and liquefied gas, installation, regulation

 and operation of equipment and control mechanisms for quantity and quality of

 natural gas;

10)	 other works for assembly of engineering systems (45.34);

11)	 production, distribution and sale of electricity (40.1);

12)	 other activities in the area of health protection of humans (85.14);

13)	 transportation by trucks (60.24), including commercial conveyances by 

truck and international commercial conveyances by truck;

14)	 other road passenger transportation (60.23), including passenger 

commercial conveyances.”

12.	To word clause 4.1. as follows:

„4.1. The share capital of the Company is LVL 39,900,000 (thirty nine million 

nine hundred thousand lats). The share capital of the Company is formed by 

39,900,000 (thirty nine million nine hundred thousand) shares. The nominal 

value per one share is LVL 1.00 (one lat).”

13. To add new clause 4.2. and to word as follows:

“4.2. All 39,900,000 (thirty nine million nine hundred thousand) shares of the

 Company give their shareholders equal rights, particularly rights to receive

 dividends and liquidation quotas, as well as voting rights at the Meeting of

 Shareholders.”

14.	To word clause 4.3 as follows:

“4.3. 14,573,980 (fourteen million five hundred and seventy-three thousand 

nine hundred and eighty) shares of the Company are registered shares. 

25,326,020 (twenty-five million three hundred and twenty-six thousand and 

twenty) shares of the Company are bearer shares which are publicly traded.”

15.	To word 4.4 as follows:

	«4.4. All shares of the Company are dematerialized shares.»

16.	To word 4.5. as follows:

“4.5. The share capital of the Company may be increased or reduced on the 

basis of a decision of the Meeting of Shareholders, in which regulations 

for an increase or reduction of the share capital shall be approved, and 

amendments to the Charter of the Company made.”

17.	Delete clause 4.7.

18.	To word 5.1 as follows:

5.1. The Company may issue shares and convertible bonds.»

19.	Delete 5.2, accordingly change the numeric sequence of clauses.

20.	To word 5.3 as follows:

«.5.2. The Meeting of Shareholders determines the volume, timing, conditions

 and other issues related to the emission of the Company’s shares and 

approves the rules and prospectus of the emission. The emission and 

distribution of the shares is carried out by the Board of Directors in 

accordance with the procedures set forth by the Meeting of Shareholders.

	In respect of the securities of the Company being on public sale, 

the Board of Directors has to comply with the obligations prescribed in the 

Law On the Market of Financial Instruments and the obligations of an issuer, 

except for the duties and obligations, which are in the competence of the 

Meeting of Shareholders or the Supervisory Board.”

21.	Delete 5.4., accordingly change the numeric sequence of clauses.

22.	To word 5.5 as follows:

«5.3. Information on the owners of registered shares, as well as transfers of

 the registered shares shall be recorded in the shareholders’ register of the 

Company. The holders of the registered shares obtain the rights of the 

shareholder only upon registration with the shareholders’ register. 



The rights arising from the bearer shares belong to the person who holds these 

bearer shares.»

23.	Delete 5.6, accordingly change the numeric sequence of clauses.

24.	Delete 5.7, accordingly change the numeric sequence of clauses.

25.	To word 5.8 as follows:

«5.5. The acquirer of a registered share shall notify the Company about the 

acquisition of shares in the form of a common application, which is prepared 

by the person alienating his shares and the person buying the shares, or by 

means of an act evidencing the transaction. The record in the shareholders’ 

register of the Company shall be made no later than on the next day after 

the Board receives the data on changes in the records of the shareholders’ 

register of the Company.»

26.	Delete 5.9, 5.10 and 5.11.

27.	In the Latvian and Russian version the word “auditor” is changed 

terminologically as provided for by the Law.

28.	To add in 6.3. before the words “not later than within 2 (two) months”

 with words “immediately, but” and replace the words «an internationally 

recognized auditing company being registered in the Republic of Latvia» with 

the words «a sworn (certified) internationally recognized auditor or an 

internationally recognized commercial company of sworn (certified) auditors

 registered in the Republic of Latvia (hereinafter “the Auditor”).

29.	Delete in 6.5 the words “and in accordance with the procedures set

 forth by the Meeting of Shareholders“.

30.	In 7.2 delete the word «General» (hereinafter - Meeting).

31.	To word clause 7.3. as follows:

“7.3. The following issues are in exclusive competence of the Meeting of

 Shareholders:

(1) the annual report of the Company;

(2) distribution of the profit of the previous operating year;

(3) appointment and dismissal of the members of the Supervisory Board, 

auditors, Company controllers and liquidators;

(4) making decisions on bringing claims against members of the Board of 

Directors and the Supervisory Board and the auditor, or dismissal of 

claims against them, as well as appointment of a representative of the 

Company for upholding the claim against the members of the Supervisory 

Board;



(5) making amendments to the Charter of the Company;

(6) increase or decrease of the share capital of the Company;

(7) termination or continuation of the activities of the Company or 

on reorganization of the Company;

(8) emission or conversion of the securities of the Company;

(9) determination of remuneration for the members of the Supervisory 

Board and the auditor;

(10) other issues if they are directly provided for by  the Law.”

32.	Delete 7.4 and 7.5, accordingly change the numeric sequence of

 clauses.

33.	To express 7.6. as two clauses and word as follows:

«7.4. The ordinary Meeting of Shareholders is every year called by the

 Board of Directors. When calling an ordinary Meeting of Shareholders,

 the Board of Directors shall take into account the period provided for

 by  the Law for approval of annual reports.



7.5. The Board of Directors notifies shareholders on the summoning of 

the Meeting at least 30 (thirty) days ahead of the planned Meeting of 

Shareholders through publishing the relevant announcement in newspaper 

“Latvijas Vestnesis” and at least in one more newspaper. The announcement 

shall specify place, date and time, and agenda of the Meeting of Shareholders, 

type of the Meeting o Shareholders (ordinary or extraordinary), institution 

which calls the Meeting of Shareholders, actions to be taken by the 

shareholders so that they could participate and vote, provisions of the 

Charter on participation of representatives of the shareholders at the 

Meeting, agenda, as well as provide information on where and when shareholders 

may familiarise themselves with the draft resolutions on the issues on agenda 

of the Meeting of Shareholders and other issues to be considered by the 

Meeting of Shareholders. 

The Board of Directors shall notify the owners of the registered shares on 

the Meeting of Shareholders at least 30 (thirty) days ahead of the Meeting 

of Shareholders by personal notice or notice mail accompanied by facsimile 

to be sent to the addresses of the owners of the registered shares 

indicated in the shareholders register. The notice shall be considered to 

be received as of the date when the facsimile message is received. Such a 

notice shall specify the firm name and registered address of the Company, 

date, time and place of the Meeting of Shareholders, type of the Meeting of 

Shareholders(ordinary or extraordinary), institution which calls the Meeting 

of Shareholders, actions to be taken by the shareholders so that they could 

participate and vote, provisions of the Charter on participation of 

representatives of the shareholders at the Meeting of Shareholders, agenda, 

and shall be attached with the draft resolutions on the amendments to the 

Charter of the Company, if any.”

34.	To word 7.7 as follows:

«7.6. Extraordinary Meeting of Shareholders shall be called by the Board of 

Directors at its own initiative or if requested by the Supervisory Board, 

auditor or Shareholders representing together at least 5% of the share capital 

of the Company, by indicating the reasons for calling the Meeting of 

Shareholders and the agenda of the extraordinary Meeting of Shareholders. 

The Board of Directors shall call the extraordinary Meeting of Shareholders 

no later than within 2 (two) weeks after receipt of the respective request.»

35.	To supplement clause 7.8 with new paragraph and to word it as follows:

“The Meeting of Shareholders, where the items listed under clause 7.9. are 

considered, as well as repeated Meetings of Shareholders, where the items 

listed under the clause 7.9. are considered, is entitled to adopt the decisions 

if not less than 85% (eighty five percent) of the equity capital is present.”

36.	To word 7.10 as follows: 

“7.9. The following issues may be decided by the Meeting of Shareholders if at 

least 85% (eighty five percent) of the paid-up equity capital of the Company 

are represented and the decisions of the Meeting of Shareholders on those 

issues are adopted if voted for by 3/4 (three quarters) of the shareholders 

represented:

1)	amendments to the Charter of the Company;

2)	increase of the share capital of the Company;

3)	decrease of the share capital of the Company;

4)	reorganization of the Company and termination or continuation of 

operations of the Company ;

5)	emission of convertible bonds  of the Company;

6)	closing, changes or termination of the group agreement;

7)	merger or agreement to merge with another company;”



37.	In 7.12 replace the word «management» with the word « supervisory», 

the word « controls» with the words «performs supervision» and the words 

«approved by the General Meeting» with the words “confirmed by the Supervisory 

Board”.

38.	Delete the 5th paragraph in 7.14 and to word Paragraph 6 as follows:

“In case if a Supervisory Board member retires or is discharged from his 

office before expiry of the term of the Supervisory Board mandate, then 

new elections are held during which the whole composition of the Supervisory

 Board is reelected.”

39.	To word 7.16 as follows:

“7.15. The Supervisory Board has the following tasks:

1) appointment and dismissal of the members of the Board of Directors, 

regular control over the activities of the Board of Directors, fixing of 

remuneration for the members of the Board of Directors;

2) conducting of regular control to ensure that the operations of the 

Company are performed in accordance with the Laws, the Charter and 

resolutions of the Meeting of Shareholders of the Company;

3) review of the annual report of the Company and recommendations to 

the Board of Directors on distribution of the profit and preparation 

of its statement;

4) representation of the Company’s interests in the court regarding all 

claims brought by the Company against the members of the Board of 

Directors, including all claims brought by the members of the Board of 

Directors against the Company and representation of the Company in other 

court relationship with the members of the Board of Directors; 

5) approval of deals to be closed between the Company and a member of 

the Board of Directors or the auditor; 

6) preliminary review of all issues included in the agenda and being 

the competence of the Meeting of Shareholders or proposed for discussion 

in the Meeting of Shareholders at the request of the members of the 

Board of Directors or the Supervisory Board and submission of conclusions 

on these issues. »

40.	Add new clause 7.16 following wording:

«7.16. Supervisory Board has the right to elect permanent or interim 

commissions to review and report on specific issues. »

41.	Delete 7.20, accordingly change the numeric sequence of clauses.

42.	To word clause 7.21 as follows:

«7.20. Meetings of the Supervisory Board are entitled to decide on issues 

if more than a half of the members of the Supervisory Board are present. 

Absent members of the Supervisory Board shall have the right to vote on 

any resolution of the Supervisory Board by submitting the vote in writing 

to another member of the Supervisory Board, and in such a case they will 

be considered as being present in solution of such issue. Voting on 

telephone or any other way is allowed only in those cases if the means 

of communication permit the members of the Supervisory Board simultaneously 

participate in discussion of the issue and in making a resolution, and 

provided that this action is properly fixed in documents.»

43.	Delete the second sentence in 7.22.

44.	Replace in 7.24 the figure and the word «6 (six)» with the 

figure and the word «5 (five)» and words “General Meeting” with the 

words “Supervisory Board”.

45.	To word 7.26 as follows:

«7.25. The Supervisory Board is entitled to withdraw any member of the 

Board of Directors if there is a serious reason for it. A serious reason 

in any case shall deem to be a gross violation of authority, 

non-fulfillment or improper fulfillment of obligations, failure to lead 

the Company, causing harm to the Company’s interests, as well as 

disloyalty manifested by the Meeting of Shareholders.»

46.	To word 7.27. as follows:

“7.26 The Board of Directors supervises and manages all the activities 

of the Company. The Board of Directors represents the Company and 

manages property of the Company in accordance with the Law, this Charter 

and decisions of the Meeting of Shareholders. The Board of Directors 

decides on all the issues, which are not in the competence of the 

Supervisory Board or the Meeting of Shareholders.

The Board of Directors may decide on the following issues only with 

the approval of the Supervisory Board:

1)acquiring of the shareholding in other companies, its increase or decrease;

2)foundation of the subsidiaries of the Company;

3)purchase and sale of the assets substantial for the operation of the 

Company;

4)foundation or termination of activities of the enterprises, branches 

and representative offices, as well as approval of their statutes 

(charters); purchase, sale, lease or suspension of activities of enterprises;

5)purchase of real estate at a value exceeding LVL 50,000 (fifty 

thousand lats) for each object or in excess of a purchase value for real 

estate of LVL 250,000 (two hundred fifty thousands lats) per year; sale of

real estate at a value in excess of LVL 100,000 (one hundred thousand lats) 

for each object; lease of real estate at an accumulated rent above 

LVL 50,000 (fifty thousand lats) per year, as well as its encumbrance;

6)providing warranties and guaranties with the exception of measures 

necessary for the fulfilment of the business plan or the budget approved by 

the Supervisory Board;

7)transactions with affiliates or affiliated parties (including 

shareholders, members of the Supervisory Board, the Board of Directors, etc.);

8)transactions which exceed LVL 200,000 (two hundred thousand lats)  

or where term exceed 1 (one) year and which are not provided for in the 

business plan of the Company;

9)entering strategically important agreements on co-operation, as well 

as entering agreements on co-operation, where financing by the Company 

is required which exceeds the sum determined in Article 7.26 (8).

10)hiring legal advisors, brokerage companies, banks, investment 

advisors or audit companies to prepare prospect of the public emission 

of the securities of the Company;

11)taking  and granting of loans;

12)full or partial  waiver of exclusive licenses; 

13)preliminary review of purposeful merger with another company 

or take-over by another company;

14)adoption of the Company’s business plan;

15)adoption of the annual budget of the Company;

16)establishment and use of the Company’s reserves;

17)adoption of regulations of the Board of Directors;

18)matters of material importance.”

47.Change in 7.28. the wording “procedural rules and guidelines 

approved by the Supervisory Board” with “regulations of the Board 

of Directors adopted by the Board of Directors with approval of the 

Supervisory Board”.

48.To word in 7.30:

to word the third sentence as follows:

« The Board of Directors is entitled to decide on issues if at 

least 3 (three) members of the Board of Directors are present.”;

Delete the fourth sentence;

Add new sentence in following wording:

“The procedure of meetings of the Board of Directors are established 

by the Regulations.”;

49.Delete the second sentence in 7.31.

50.To word 7.34 as follows:

“7.33. The Chairman of the Board of Directors manages activities 

of the Board of Directors and organizes day-to-day management of 

the Company, including:

1)provides information for the Supervisory Board on all important 

aspects of the activities of the Company;

2)submits for approval of the Board of Directors structure of the 

Company;

3)decides on all the issues of the operation of the Company within 

his/her competence;

4)organizes fulfilment of the decisions of the General Meeting;

perform other functions provided in the regulations of the Board of 

Directors;

5)reports to the Supervisory Board on transactions with shareholders 

and related parties;

6)organizes elaboration of regulations of the Board of Directors and 

approval with the Supervisory Board.”

Delete 7.35., accordingly changing the sequence of clauses.

51.Add new clause 7.34. and word as follows:

“7.34. The Chairman of the Board of the Directors represent the Company 

solely, any other member of the Board of Directors represents the Company 

jointly with another member or the Board of Directors.”	

52.	To add in 9.4. before the words “not later than within 2 (two) 

months” with words “immediately, but”.

53.	Change wording of clause 9.6. “internal auditing commission or 

auditor” to “one or more Company controllers”.

54.	Delete second and third sentences of clause 10.1.

55.	To word the title of Section XI as follows: “TERMINATION OF THE 

COMPANY’S ACTIVITIES AND LIQUIDATION”.

56.	To word 11.1 as follows:

“11.1. The company ceases its activities:

1)	in accordance with a resolution of the Meeting of Shareholders;

2)	according to a court judgment;

3)	upon commencement of the bankruptcy proceedings;

4)	in other cases stipulated in the Law.”

57.	To word 11.2 as follows:

“11.2. The liquidation of the Company according to the Law shall be performed 

by liquidators elected by the Meeting of Shareholders which shall set forth

 the procedure and terms of liquidation, as well as amount and procedure of

 paying the fee to the liquidator.”

58.	To word 11.3 as follows:

«11.3. The resolution on termination of the Company’s operation shall be 

registered by the Board of Directors in the Commercial Register within 3 

(three) days from making of this resolution.»

59.	To word 11.4 as follows:

«11.4. After satisfying of the creditors’ claims or disbursement of money 

amounts allocated to them and covering of expenses connected with 

liquidation, the liquidator shall prepare the final liquidation financial

 statements and a plan for distribution of the remaining Company’s property

 for which liquidation quota is prescribed.»

60.	To word 11.5 as follows:

«11.5. The remaining property of the Company shall be distributed among the 

Shareholders according to the plan of property distribution prepared by the 

liquidator in proportion to the shares of each Shareholder. The property is 

allowed to be distributed no earlier than in six months’ time after publication 

of the announcement on termination of the Company’s activities and 2 (two) 

months after sending to the Shareholders the final liquidation financial 

statements and a plan for distribution of the remaining Company’s property, or 

publication of the announcement on the possibility to get acquainted with 

these documents.»

61.	Delete clause 11.7.

Hem No. 3 of agenda

About composition of Management Board of JSC “Latvijas Gaze”.

Due to registration of JSC “Latvijas Gaze” in the Commercial Register and 

approval of amendments to the Articles of Association of JSC “Latvijas Gaze”,

 to recall from duties of Member of the Management Board Uldis Aunins.

To consider question about releasing of Uldis Aunins from responsibility for

 activities from January 1, 2004 till December 15, 2004 after approval of

 Annual Report of 2004 of JSC “Lavijas Gaze”.



Hem No. 4 of agenda

Other questions related to registration of JSC “Latvijas Gaze” in the 

Commercial Register.

To authorize the chairman of Management Board of JSC “Latvijas Gaze” Adrians

 Davis to sign an Application to the Register of Enterprises of the Republic

 of Latvia (an administrative institution of the Commercial Register) to 

register the resolutions passed by Extraordinary General Meeting of 

Shareholders of JSC “Latvijas Gaze”; to attest the correctness of the Excerpt

 from the Minutes of this Extraordinary General Meeting of Shareholders; 

should the registration be suspended or refused, to sign the repeated 

application and/or appeal to the Register of Enterprises of the Republic of 

Latvia (an administrative institution of the Commercial Register), if needed.

To authorize Inese Melke  to submit all the required documentation to the 

Register of Enterprises of the Republic of Latvia (an administrative institution 

of the Commercial Register) to register the resolutions passed by Extraordinary

 General Meeting of Shareholders, as well as supply the required explanations, 

if demanded, and to receive the documents from the Register of Enterprises of 

the Republic of Latvia (an administrative institution of the Commercial 

Register).