Riga Stock Exchange						07.10.2004



DRAFT OF ARTICLES OF ASSOCIATION (NEW VERSION)



1.Firm



1.1.Company firm is a Joint Stock Company LATVIJAS KUĢNIECĪBA



2.Equity capital and type of shares



2.1.Equity capital of the Company is 200,000,000 LVL (two hundred million lats), 

made up from 200,000,000 (two hundred million) dematerialised bearer shares. 

Nominal value of one share is 1.00 LVL (one lat). All shares are of the same 

category, providing equal voting rights at shareholders general meetings, as 

well as rights to receive dividends and liquidation quotes.



3.Board of Directors



3.1.Board of Directors of the Company is made up from five Members of the Board. 

Chairman of the Board has been assigned full rights and he may represent the 

Company separately, without special authorisation and independently from other 

Board Members. Other Board Members have rights to represent Company only jointly 

with at least one other Board Member.



3.2.Board of Directors acts in accordance with the Rules of the Board of Directors.



4.Council



4.1.Company Council consists of twelve members.



4.2.Councils acts in accordance with the Council Rules.



5.Other Provisions



5.1.Shareholders meeting rights to take decisions:

5.1.1.	Shareholders Meeting has rights to take decisions, if at least half of the 

Company equity capital is represented there. Decisions are passed with majority of 

the represented voting shareholders approval, unless law requires higher share of votes. 

5.1.2.	If the Shareholders Meeting lacks quorum, recurrent Shareholders Meeting 

is to be announced within one month period. In such case Shareholders Meeting has 

rights to take decisions on all the items covered in Agenda regardless of the Company 

Equity capital represented.



5.2.In accordance with the Cabinet of Ministers Decree Nr 642, from 27 December, 2001 

On the Provisions for the Privatisation of the Joint Stock Company in privatisation 

Latvijas Kuģniecība, Articles of Association shall continue to contain the following 

provisions: 

5.2.1.	The Company shall be registered in the Republic of Latvia, and its management 

shall be located in Latvia; 

5.2.2.	Company shall retain the Company’s name LATVIJAS KUĢNIECĪBA;

5.2.3.	Company shall retain jobs at the shore units and on the ships owned by the 

Holding Company and the Holding Company’s enterprises, as well as shall not change the 

crew recruitment policy (crewing mainly by seamen employed at the Holding Company and 

the Holding Company’s enterprises - citizens and residents of Latvia). The Company 

shall ensure financial support to the Latvian Maritime Academy;

5.2.4.	Company shall retain its line of business and maintain its fleet, as well as 

invest funds in fleet renovation in order to maintain its competitiveness, to ensure 

the Company’s growth and increase the Company’s value. The Company’s ships may be 

sold in compliance with the generally accepted practice in the shipping business, as 

well as due to their ageing or in compliance with strategic decisions of the Company

5.2.5.	In accordance with the Cabinet of Ministers Decree, pursuant to the Cabinet 

of Ministers Order No. 394 “On the Debt Obligations of the State Stock Company in 

Privatisation Latvenergo and the State Stock Company in Privatisation Latvian Shipping 

Company, dated on 5th August 1998, neither the Company nor its stockholders, nor any 

other legal successors to the rights and obligations of the Company or its stockholders,

shall have any right to any claims, objections or liabilities against the Stock Company 

in Privatisation Latvenergo, or to any legal successor to its rights and obligations, 

the Government of Latvia or any governmental institution, pursuant to the Council of 

Ministers Decision No. 89 On Debts of Particular State Enterprises, dated on 22nd 

February 1993, the Council of Ministers Decision No. 354 On Payments of the State 

Enterprise Latvenergo to the State Enterprise Latvian Shipping Company, dated on 

6th July 1993, and the Cabinet of Ministers Order No. 568 On Debts of the State Stock 

Company Latvenergo, dated on 11th October 1995



5.3.In accordance with the Regulations Nr. 17/173 Privatisation Regulations of 

the State Share Company for the Privatisation Latvijas Kuģniecība, passed by the 

Board of the Privatisation Agency on January 18, 2002, Articles of Association shall 

continue to contain the following provisions:

5.3.1.	After the privatisation process, the Company shall act in accordance with 

Subsection 14.1 of the Privatisation Regulations;

5.3.2.	8% of shares owned by one shareholder or several shareholders jointly entitle 

to one seat at the Council of the Company.



5.4.Board of Directors requires Council consent  to pass decisions on the following 

issues:

5.4.1.	approval of the annual regular budget, business plan and investment programme;

5.4.2.	approval of the Rules for the Board of Directors;

5.4.3.	acquiring participation in other companies and increasing or decreasing 

such participation;

5.4.4.	acquisition or alienation of undertakings;

5.4.5.	opening or closing of branches and representative offices;

5.4.6.	acquisition of immovable property, alienation or encumbering rights pertaining 

to property;

5.4.7.	concluding of such transactions as exceed the amounts specified in the Rules 

for the Board of Directors;

5.4.8.	issuing of such loans as are not related to the usual commercial activities 

of the company, issuing of sureties, conclusion of assignment agreements;

5.4.9.	issuing loans to employees of the company;

5.4.10.	starting new kinds of activities or ceasing existing activities.

5.5.	Shareholders Meeting can elect 5 (five) controllers to carry out internal 

audit and control for the period not exceeding 3 (three) years, as well as to set 

their remuneration.



Riga,

October 4, 2004

JSC Latvijas Kuģniecība

Chairman of the Board 		______________________     I.Vikmanis