Latvijas Gāze                                                30.11.2004.



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



Specified draft



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;

5)performs other functions provided in the regulations of the Board of 

Directors;

6)	reports to the Supervisory Board on transactions with shareholders 

and related parties;

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

approval with the Supervisory Board.”

51.	Delete 7.35., accordingly changing the sequence of clauses.

52.	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.”	

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

months” with words “immediately, but”.

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

auditor” to “one or more Company controllers”.

55.	Delete second and third sentences of clause 10.1.

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

COMPANY’S ACTIVITIES AND LIQUIDATION”.

57.	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.”

58.	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.”

59.	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.»

60.	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.»



61.	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.»

62.	Delete clause 11.7.