Registration Form • May 24, 2022
Registration Form
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The name of the company shall be AB "Ignitis grupė" (hereinafter referred to as the Company).
The legal form of the Company shall be a public limited liability company.
The Company shall be an autonomous private legal entity with limited civil liability established for an unlimited period of time and operating under the laws of the Republic of Lithuania. The authorised capital of the Company is divided into parts called shares.
In carrying out its activities, the Company shall observe the Civil Code of the Republic of Lithuania, the Law on Companies of the Republic of Lithuania and other legislation regulating the activities of public limited companies, as well as these Articles of Association.
The Company, together with the legal entities which are either directly or indirectly controlled by it, shall constitute the Company's group of companies. The Company is the parent company of the Company's group of companies. The Company shall not be liable for the obligations of the Company's group of companies, and the Company's group of companies shall not be liable for the obligations of the Company.
The financial year of the Company shall correspond to the calendar year.
The bodies of the Company shall be the General Meeting of Shareholders (hereinafter referred to as the General Meeting), the head of the Company – the Chief Executive Officer of the Company (hereinafter referred to as the Chief Executive Officer), a collegial supervisory body of the Company – the Supervisory Board (hereinafter referred to as the Supervisory Board) and a collegial management body of the Company – the Management Board (hereinafter referred to asthe Management Board).
The objectives of the Company's activities shall be as follows: to carry out the functions of patronage of the Company's group of companies and pursue the objectives of the Company's group of companies as set out in the National Energy Independence Strategy, approved by the 26 June 2012 Resolution of the Seimas of the Republic of Lithuania No. XI-2133 "On the Approval of the National Energy Independence Strategy", and in legal acts regulating the Company's activities, ensuring socially responsible enhancement of the long-term value of the Company's group of companies.
The objects of the Company's activities shall be as follows:
9.1. performance analysis of the companies of the Company's group of companies, exercise of shareholder rights and obligations, setting of operational guidelines and operational rules, coordination of activities;
9.2. provision of services to the companies of the Company's group of companies and financing of the companies of the Company's group of companies;
9.3. representation of the Company's group of companies.
The Company shall have the right to engage in activities which do not contradict the objectives of its activities and the laws of the Republic of Lithuania.
The bodies of the Company, in compliance with the provisions of laws, other legislation, these Articles of Association and the internal documents of the Company, must pursue the objectives of the Company's activities and act for the benefit of the Company and all shareholders of the Company. In carrying out its activities, the Company shall also seek an appropriate return on the capital invested by a shareholder.
The Company may be a participant in other legal entities (except for associations) only if approved by the General Meeting. When managing the companies of the Company's group of companies, the Company shall determine the following of the companies of the Company's group of companies:
12.1. operational guidelines and operational rules;
12.2. annual financial plans;
12.3. annual rate of return on assets;
12.4. maximum amounts of debt obligations;
12.5. other activity parameters;
and addresses other issues of the management of the Company's group of companies, insofar as this is not contrary to law.
The authorised capital of the Company is EUR 1,658,756,293.81 (one billion six hundred and fifty-eight million seven hundred and fifty-six thousand two hundred and ninety-three euros and eighty-one cents), divided into 74 283 757 (seventy-four million two hundred eighty-three thousand seven hundred fifty-seven) ordinary registered shares with the nominal value of EUR 22.33 (twentytwo euros and thirty-three cents) per share.
The Company shall issue one class of shares – ordinary registered shares. All shares of the Company shall be uncertificated shares. The shares shall be recorded by entries in the personal securities accounts of the shareholders which shall be opened and maintained by the Company in accordance with the procedure established by the legal acts regulating the management of the securities accounts of shareholders. At the request of a shareholder, the Company must issue a statement from the securities account of the shareholder stating the number of shares and other information as precribed by the legal acts regulating the activities of public limited companies.
The shareholders of the Company shall have property and non-property rights as laid down in law, other legislation and these Articles of Association.
The management bodies of the Company shall create appropriate conditions for the exercise of the rights of the shareholders of the Company.
The procedure for convening the General Meeting is prescribed by the Law on Companies and these Articles of Association.
The competence of the General Meeting shall be:
18.1. to change the registered office of the Company;
18.2. to amend the Articles of Association of the Company, except for the cases provided for in the Law on Companies;
18.3. to elect and remove individual members of the Supervisory Board or the Supervisory Board;
18.4. to elect and remove an auditor or an audit firm for carrying out an audit of the financial statements of the Company and of the consolidated financial statements of the Company's group of companies, to set the terms and conditions of payment for audit services;
18.5. to determine the class, number, nominal value and minimum issue price of the shares issued by the Company;
18.6. to make decisions to convert the Company's shares from one class to another, to establish the share conversion procedure;
18.7. to approve the sets of annual financial statements of the Company and of annual consolidated financial statements of the Company's group of companies;
18.8. to approve a set of interim financial statements prepared for the purpose of adopting a decision on the allocation of dividends for a period shorter than the financial year;
18.9. to make decisions on the distribution of profit (loss);
18.10. to make decisions on the allocation of dividends for a period shorter than the financial year;
18.11. to make decisions on the formation, use, reduction and liquidation of reserves;
18.12. to make decisions to issue convertible bonds;
18.13. to make decisions to revoke the pre-emption right for all shareholders to acquire the Company's shares or convertible bonds of a specific issue;
18.14. to make decisions to increase the authorised capital;
18.15. to make decisions to reduce the authorised capital, except for the cases provided for in the Law on Companies;
18.16. to make decisions for the Company to acquire its own shares;
18.17. to make decisions on the reorganisation or separation of the Company and approve the terms and conditions of the reorganisation or separation, except for the cases provided for in the Law on Companies;
18.18. to make decisions to reorganise the Company;
18.19. to make decisions on the restructuring of the Company;
18.20. to make decisions to liquidate the Company, to cancel the liquidation of the Company, except for the cases provided for in the Law on Companies;
18.21. to elect and remove the liquidator of the Company, except for the cases provided for by law;
18.22. to make decisions on setting the terms and conditions of the contracts referred to in Articles 26 and 33 of these Articles of Association with the members of the Supervisory Board and the Chair of the Supervisory Board regarding activities in the Supervisory Board and regarding confidential information and its protection, as well as on the appointment of a person authorised to sign these contracts on behalf of the Company;
18.23. to make decisions on the payment of remuneration to independent members of the Supervisory Board and on the amount to be paid;
18.24. to approve or disapprove the annual report of the Company and the consolidated annual report of the Company's group of companies;
18.25. to approve or disapprove the decisions of the Management Board referred to in Articles 54.1 (except for decisions on becoming a founder or participant of associations) and 54.5 of these Articles of Association;
18.26. to elect and remove the members of the Company's Audit Committee (hereinafter referred to as the Audit Committee) or the Audit Committee, ensuring that the majority of the members of the Audit Committee are independent members;
18.27. to make decisions on setting the terms and conditions of the contracts with the members and Chair of the Audit Committee regarding their activities in the Audit Committee and regarding the protection of confidential information, as well as on the appointment of a person authorised to sign these contracts on behalf of the Company;
18.28. to approve the regulations of the Audit Committee;
18.29. to address other issues assigned to the competence of the General Meeting by the Law on Companies, its implementing legislation or the Articles of Association.
The General Meeting may pass resolutions and shall be deemed to have taken place if it is attended by the shareholders who hold shares carrying more than 1/2 (half) of all the votes.
The resolution of the General Meeting shall be deemed to have been passed when the number of votes cast by the shareholders in favour of the resolution exceeds the number of votes cast against it, except for the cases provided for in this Article. The decisions referred to in Articles 18.2, 18.5, 18.6, 18.9 – 18.12, 18.14, 18.15, 18.17 – 18.20 of these Articles of Association shall be made by passing resolutions by the majority vote of 2/3 (two thirds) of the voting rights carried by the shares of the shareholders who are participating in the General Meeting. The decision referred to in Article 18.13 of these Articles of Association shall be made by passing a resolution by the majority vote of ¾ (three quarters) of the voting rights carried by the shares of the shareholders who are participating in the General Meeting.
The Supervisory Board is a collegial body of the Company supervising the activities of the Company.
The Supervisory Board shall consist of 7 (seven) members – natural persons. At least 1/2 (half) of the members of the Supervisory Board must be independent members. The Supervisory Board shall be elected by the General Meeting for a term of 4 (four) years. The Supervisory Board or its members shall begin and end their activities in accordance with the procedure and time limits established by the Law on Companies and its implementing legislation.
Supervisory Board members must comply with the requirements set forth in Article 25 of these Articles of Association.
Each candidate to the position of a member of the Supervisory Board must provide the General Meeting with written consent to stand as a candidate for the position of a member of the Supervisory Board and the declaration of interests of the candidate, indicating therein all circumstances which may give rise to a conflict of interest between the candidate and the Company. In the event of any new circumstances that may result in a conflict of interest between the member of the Supervisory Board and the Company, the member of the Supervisory Board must immediately notify the Supervisory Board and the shareholders in writing of such new circumstances.
The following cannot be a member of the Supervisory Board:
25.1. the Chief Executive Officer;
25.2. a member of the Management Board;
25.3. a member of the Management Board, the head or an administrative employee of a company of the Company's group of companies;
25.4. a member of the supervisory body, management body or an employee of the administration of a legal entity carrying out electricity or gas transmission activities;
25.5. an auditor or an employee of an audit firm who participates and/or has participated in the audit of a set of the Company's financial statements where less than 2 (two) years have elapsed since the audit was carried out;
25.6. a person who is not legally entitled to hold this office.
Contracts for activities in the Supervisory Board shall be entered into with the members of the Supervisory Board, setting out their rights, duties and liability. By the decision of the General Meeting, independent members of the Supervisory Board shall be paid remuneration for activities in the Supervisory Board. The terms and conditions of the contracts of the members of the Supervisory Board for activities in the Supervisory Board shall be set by the General Meeting.
A member of the Supervisory Board may resign from office prior to the expiration of his/her term of office by giving not less than 14 (fourteen) days' written notice to the Company.
If a member of the Supervisory Board is removed from office, resigns or for any other reason ceases to hold office and the shareholders of the Company who hold shares carrying at least 1/10 (one tenth) of all votes oppose the election of individual members of the Supervisory Board, the Supervisory Board is deprived of its powers and the entire Supervisory Board shall be elected. If individual members of the Supervisory Board are elected, they shall be elected only until the end of the term of office of the existing Supervisory Board.
The Supervisory Board shall be chaired by its Chair whom the Supervisory Board shall elect from among its members. The Chair of the Supervisory Board shall convene and chair the meetings of the Supervisory Board. If the Chair of the Supervisory Board is absent or cannot hold office, the meetings of the Supervisory Board shall be convened and chaired by the oldest member of the Supervisory Board.
The Supervisory Board shall have the following competence:
30.1. to consider and approve the operational strategy, annual budget and investment policy of the Company and of the Company's group of companies, to analyse and assess information on the implementation of the operational strategy of the Company, to provide this information to the Ordinary General Meeting;
30.2. to elect and remove the members of the Management Board;
30.3. to supervise the activities of the Management Board and the Chief Executive Officer;
30.4. to submit comments and proposals to the General Meeting regarding the operational strategy of the Company and of the Company's group of companies, regarding a set of annual financial statements of the Company and a set of annual consolidated financial statements of the Company's group of companies, regarding the draft distribution of the Company's profit (loss), the annual report of the Company and the consolidated annual report of the Company's group of companies, as well as regarding the activities of the Management Board and the Chief Executive Officer;
30.5. to submit comments and proposals to the General Meeting regarding a draft decision on the allocation of dividends for a period shorter than the financial year, a set of interim financial statements prepared for the purpose of adopting the said decision, and the prepared interim report;
30.6. to submit proposals to the Management Board and the Chief Executive Officer to revoke their decisions which are in conflict with laws and other legislation, these Articles of Association or the decisions of the General Meeting;
30.7. to adopt decisions on setting the terms and conditions of the contracts referred to in Article 44 of these Articles of Association with the members of the Management Board regarding activities in the Management Board, including remuneration for work in the Management Board, and on appointing a person authorised to sign these contracts on behalf of the Company;
30.8. to make proposals and recommendations regarding the organisation of the activities and the financial situation of the Company's group of companies as well as regarding the decisions of the supervisory or management bodies of the Company's group of companies;
30.9. to submit comments and proposals to the Management Board regarding the Company's operational plan;
30.10. upon the proposal of the Management Board and/or the Chief Executive Officer, to make decisions on the appointment and dismissal of the head of the structural unit performing the internal audit functions of the Company, the approval of his/her job description, the provision of incentives for and the imposition of penalties on him/her;
30.11. to submit an opinion to the Management Board on the nominations of the Chief Executive Officer and of the members of the management and/or supervisory bodies of AB "Energijos skirstymo operatorius", AB "Ignitis gamyba", UAB "Ignitis" and UAB "Ignitis renewables";
30.12. at the request of the Management Board and/or the Chief Executive Officer, to submit comments and proposals regarding the decisions adopted or planned to be adopted by the Management Board and/or by the Chief Executive Officer;
30.13. to consider and submit proposals regarding the auditor or audit firm elected by the General Meeting and regarding the terms and conditions of payment for audit services;
30.14 taking into consideration the conclusion of the Company's Audit Committee, to make a decision regarding the Company's transactions planned to be entered into with a related party, as it is understood in accordance with International Financial Reporting Standards, if the said transactions:
30.14.1 are entered into under unusual market conditions and/or;
30.14.2 are not part of the Company's usual economic activities and/or;
30.14.3 have a material impact on the Company, its finances, assets and liabilities, i.e. the value of the transaction exceeds 1/50 of the Company's authorised capital, except for
30.14.3.1. transactions which are necessary to ensure the Company's main activities;
30.14.3.2. transactions which must be entered into according to the requirements of legislation;
30.14.3.3. short-term lending transactions entered into between the companies of the Company's group of companies by using the Intragroup borrowing platform as well as lending, collateral obligation and collateral obligation service transactions entered into between the parent company and a subsidiary of the Company's group of companies (including lower-tier subsidiaries) if within a financial year the value of the transaction referred to in this Article does not exceed 1/10 of the value of the assets indicated in the latest published audited balance sheet of the parent Company.
30.15 to provide comments and proposals to the General Meeting of Shareholders and the Management Board on the Company's draft remuneration policy and draft remuneration report;
30.16. to deal with other issues relating to the supervision of the activities of the management bodies of the Company and of the companies of the Company's group of companies which are within the competence of the Supervisory Board as stipulated in the Law on Companies, these Articles of Association and the decisions of the General Meeting.
The Supervisory Board shall not be entitled to delegate or transfer the functions which fall within its competence, as stipulated by law and in these Articles of Association, to other bodies of the Company.
The Supervisory Board has the right to request the Management Board and the Chief Executive Officer to submit documents and information related to the activities of the Company and of the Company's group of companies while the Management Board and the Chief Executive Officer must ensure that such documents and information are submitted to the Supervisory Board within a reasonable time limit.
The members of the Supervisory Board must maintain confidentiality of any commercial (industrial) secrets and confidential information of the Company and of the Company's group of companies which become known to them when they are members of the Supervisory Board. Contracts for the protection of confidential information shall be entered into with the members of the Supervisory Board, the terms and conditions of which shall be approved by the General Meeting.
The adoption of the decisions of the Supervisory Board shall be as follows:
34.1. The rules of procedure of the Supervisory Board shall be laid down by the Rules of Procedure of the Supervisory Board adopted by the Supervisory Board.
34.2. The Supervisory Board shall adopt decisions at the meetings of the Supervisory Board. Minutes shall be taken of the meetings of the Supervisory Board.
34.3. The meetings of the Supervisory Board shall take place at least quarterly. The meetings of the Supervisory Board shall be convened by the Chair of the Supervisory Board. The meetings of the Supervisory Board may also be convened by the decision of at least 1/3 (one third) of the members of the Supervisory Board. The Supervisory Board must enable the members of the Management Board, the Chief Executive Officer, the heads of the structural units of the Company and/or the members of the supervisory or management bodies of the companies of the Company's group of companies to attend its meetings and must provide explanations to them when addressing the issues related to their activities.
34.4. In the event of the resignation or removal of one or more members of the Management Board, the Chair of the Management Board or the entire Management Board, a meeting of the Supervisory Board shall be convened at which new members of the Management Board or the entire Management Board shall be elected respectively.
34.5. The Supervisory Board may adopt decisions and its meeting shall be deemed to have been held when more than 1/2 (half) of the members of the Supervisory Board attend the meeting.
34.6. The decision of the Supervisory Board shall be deemed to have been adopted if the majority of the members of the Supervisory Board attending the meeting vote in its favour. In the event of a tie, the Chair of the Supervisory Board shall have the casting vote. The decision to remove a member of the Management Board may be adopted if at least 2/3 (two thirds) of the members of the Supervisory Board attending the meeting vote in its favour.
34.7. The members of the Supervisory Board must attend the meetings of the Supervisory Board and vote in favour of or against each issue considered. A member of the Supervisory Board shall not be entitled to refuse to vote or abstain from voting, unless there is a potential conflict of interest between the member of the Supervisory Board and the Company or on any other grounds provided by legal acts or these Articles of Association. A member of the Supervisory Board has the right to give a written power of attorney to another member of the Supervisory Board to represent him/her in voting at the meeting of the Supervisory Board.
34.8. The members of the Supervisory Board who are unable to attend the meeting of the Supervisory Board directly must vote in advance in writing or by electronic means provided that the security of information transmitted is ensured and the person who voted can be identified. The members of the Supervisory Board who voted in advance shall be deemed to have participated at the meeting of the Supervisory Board.
The Company must ensure appropriate working conditions for the Supervisory Board and the members thereof in the Supervisory Board and must provide technical and organisational means necessary for the work. The functions of servicing the meetings of the Supervisory Board shall be performed by the Company's employees responsible for organising the decision-making of the management and supervisory bodies, or other employees appointed by the Chief Executive Officer.
The committees of the Supervisory Board:
36.1. The nomination and remuneration committee and the committee for supervision of risk management (hereinafter referred to as the Committees) shall be formed and operate in accordance with the regulations of the Committees as approved by the Supervisory Board. Other committees may be set up if necessary. The functions and operational guidelines of the Committees shall be established and approved by the Supervisory Board.
36.2. The Committees shall examine the issues assigned to their competence in the regulations of the Committees and the issues referred to the relevant Committee by the Supervisory Board and shall submit proposals to the Supervisory Board on these issues. The Supervisory Board, taking into account the proposals of the Committees, shall adopt decisions within its competence and shall be responsible for these decisions.
36.3. The Committees shall be set up by the decision of the Supervisory Board for a term of 4 (four) years of at least 3 (three) members. Where individual members of the Committee are elected, they shall be elected only until the end of the term of office of the existing Committee. The members of the Committees shall be subject to the restrictions set out in Article 25 of these Articles of Association. At least 1/3 (one third) of the members of the relevant Committee must be independent, unless legal acts provide for a higher number of independent members. A member of the Supervisory Board shall be appointed to hold the office of the Chair of the Committee. If a member of the Supervisory Board is removed from office, resigns or for any other reason ceases to be a member of the Supervisory Board, he/she shall be deprived of his/her office in the Committee.
36.4. The Committees shall draw up and submit a report on their activities to the Supervisory Board at least every 6 (six) months.
36.5. Contracts for activities in the relevant Committee which, inter alia, set out the rights, duties and liability of the members of the Committee may be entered into with the members of the Committees. By the decision of the Supervisory Board, independent members of the Committees may be paid remuneration for their activities in the Supervisory Board which cannot exceed the amount of remuneration for an independent member of the Supervisory Board as set by the General Meeting. The Supervisory Board shall set the terms and conditions of the contracts for activities in the Committee for the members of the Committees.
The Management Board is a collegial management body of the Company.
The Management Board shall be elected and removed by the Supervisory Board in accordance with the procedure set forth in these Articles of Association and legal acts. The Management Board shall be accountable to the Supervisory Board and the General Meeting.
The Management Board shall consist of 5 (five) members elected for a term of 4 (four) years. The Management Board and its members shall commence and terminate their activities in accordance with the procedure and within the time limits established by the Law on Companies and other legal acts.
The members of the Management Board must comply with the requirements set forth in Article 42 of these Articles of Association.
Each candidate for the position of a member of the Management Board must provide the Supervisory Board with written consent to stand as a candidate for the position of a member of the Management Board and the declaration of interests of the candidate, indicating therein all circumstances which may give rise to a conflict of interest between the candidate and the Company. In the event of any new circumstances that may result in a conflict of interest between the member of the Management Board and the Company, the member of the Management Board must immediately notify the Management Board and the Supervisory Board in writing of such new circumstances.
The following cannot be a member of the Management Board:
42.1. a person referred to in Articles 25.4 and 25.5 of these Articles of Association;
42.2. a member of the Supervisory Board;
42.3. a member of the Committee;
42.4. a person who is not legally entitled to hold such office.
The members of the Board cannot do any other work or hold any other positions which are incompatible with their activities in the Management Board, including executive positions in other legal entities (except for positions within the Company and the Company's group of companies), work in civil service or statutory service. The members of the Management Board may hold other office or do other work, except for positions within the Company and other legal entities of which the Company is a member, and may carry out pedagogical, creative or authorship activities only with the prior consent of the Supervisory Board.
Contracts for activities in the Management Board shall be entered into with the members of the Management Board before they take office, setting out their rights (including the right to remuneration for activities in the Management Board if the decision to pay such remuneration is adopted), duties and liability. The Supervisory Board shall be responsible for setting the terms and conditions of the contracts for activities in the Management Board.
The Management Board shall elect the Chair of the Management Board from its members.
If the Management Board is removed from office, resigns or for any other reason ceases to hold office before the expiry of the term of office, a new Management Board shall be elected for a new term of office of the Management Board. Individual members of the Management Board shall only be elected until the end of the term of office of the existing Management Board.
A member of the Management Board may resign from office before the end of his/her term of office by giving 14 (fourteen) days' written notice to the Company in accordance with the procedure laid down by law.
The competence of the Management Board, the procedure for decision-making and the procedure for the election and removal of the members of the Management Board are established by the Law on Companies, its implementing legal acts, these Articles of Association and the Rules of Procedure of the Management Board.
The Management Board shall consider and approve:
49.1. the operational plan of the Company;
49.2. the remuneration report of the Company;
49.3. the management (organisational) structure of the Company, the list of positions and the maximum number of posts;
49.4. positions to which employees are recruited on a competition basis;
49.5. the regulations of the Company's branches and representative offices;
49.6. the list of confidential information and commercial (industrial) secrets.
50.1. the draft operational strategy of the Company and of the Company's group of companies submitted by the Chief Executive Officer, and information about the implementation of the operational strategy of the Company and of the Company's group of companies;
50.2. the organisation of the activities of the Company and of the Company's group of companies;
50.3. the financial situation of the Company and of the Company's group of companies;
50.4. the results of the economic activities of the Company, its income and expenditure estimates, inventory data and other accounting data on changes in assets;
50.5 draft remuneration policy submitted by the Chief Executive Officer;
50.6 the annual budgets of the Company and of the Company's group of companies and shall submit them to the Company's Supervisory Board for approval.
The Management Board shall consider and approve the annual report of the Company, the consolidated annual report of the Company's group of companies, the interim report and shall also analyse and assess a set of annual financial statements of the Company, a set of consolidated annual financial statements of the Company's group of companies, a set of interim financial statements of the Company prepared for the purpose of adopting a decision on the allocation of dividends for a period shorter than the financial year, the draft distribution of the Company's profit (loss) and a draft decision regarding dividends for a period shorter than the financial year and shall submit these documents to the Supervisory Board and the General Meeting.
The Management Board shall adopt decisions on the conclusion of the following transactions (except for cases where transactions meeting the criteria set out below are provided for in the operational budget of the Company):
52.1. investment, transfer, lease of non-current assets with a book value equal to or exceeding EUR 3,000,000 (three million) (calculated separately for each type of transaction);
52.2. acquisition of non-current assets at a price equal to or higher than EUR 3,000,000 (three million);
52.3. pledge or mortgage of non-current assets with a book value equal to or exceeding EUR 3,000,000 (three million) (calculated for the total amount of transactions);
52.4. surety or guarantee of the fulfilment of obligations of other entities in the amount equal to or exceeding EUR 3,000,000 (three million);
52.5. lending (except for investing the Company's funds in accordance with the procedure for investing the Company's funds as set by the Management Board) or borrowing of money, including, but not limited to, decisions to enter into any credit (loan) agreements and/or modify the terms and conditions of the existing credit (loan) agreements;
52.6. conclusion of other transactions with the value equal to or exceeding 3,000,000 (three million) euros.
When adopting the decisions referred to in Article 52 of these Articles of Association, the Management Board shall approve the material terms and conditions of these transactions.
The Management Board shall adopt decisions regarding:
54.1. the Company becoming a founder or participant of other legal entities;
54.2. the establishment of branches and representative offices of the Company;
54.3. the approval of the nominations of the members of the supervisory and/or management bodies of the companies of the Company's group of companies and of the Company's branches and representative offices having regard to the opinion submitted by the Supervisory Board when it is provided in accordance with Article 30.11 of these Articles of Association;
54.4. the approval of the Articles of Association of companies in which the Company is a shareholder;
54.5. the following of the companies of the Company's group of companies with strategic and significant importance for national security which engage in generation, distribution and supply activities in the energy sector as well as of companies directly managed by the Company which engage in activities in the energy generation sector:
54.5.1. transfer, pledge, other restriction or disposal of shares or rights attached thereto;
54.5.2. increase or reduction of the authorised capital or other actions that may alter the structure of the authorised capital (e.g. issue of convertible bonds);
54.5.3. reorganisation, split-off, restructuring, liquidation, transformation or other actions changing the status of these companies;
54.5.4. transfer of business or a substantial part of it.
54.6. setting and managing the operational guidelines and rules of the companies of the Company's group of companies, common policies, annual financial plans, annual rate of return on assets and maximum amounts of debt obligations of the Company's group of companies as well as other operational parameters of the companies of the Company's group of companies;
54.7. participation and voting in the General Meetings of Shareholders of the companies of which the Company is a shareholder. The Management Board shall appoint a person who will implement the decision of the Management Board at a General Meeting of Shareholders.
55.1. to issue the Company's bonds (except for convertible bonds);
55.2. to establish the procedure for granting the support of the Company;
55.3 regarding other issues which fall within the competence of the Management Board as well as issues (including issues concerning the conclusion of transactions) which are referred to the Management Board by the Chief Executive Officer.
Decisions of the Management Board referred to in Articles 54.1 (except for decisions on becoming a founder or participant of associations) and 54.5 (except for decisions on the increase or reduction of the authorised capital of companies directly managed by the Company with no strategic and important significance for national security which engage in activities in the energy generation sector) of these Articles of Association shall require the approval of the General Meeting.
Where the approval of the General Meeting is required for the decision of the Management Board under these Articles of Association, the Law on Companies or other legal acts, decisions of the Management Board can be implemented only upon obtaining the approval of the General Meeting. The approval of the General Meeting shall not exclude the liability of the Management Board for the decisions adopted.
The Management Board shall be responsible for convening and organising the General Meetings in a timely manner.
The Management Board, taking into consideration the opinion of the Supervisory Board, shall elect and remove the Chair of the Management Board and the Chief Executive Officer, shall determine the Chief Executive Officer's salary, other terms and conditions of his/her employment contract, approve his/her job description, provide incentives for and impose penalties on him/her in accordance with the procedure laid down by the Law on Companies, its implementing legal acts and these Articles of Association.
The Chair of the Management Board elected by the Management Board shall also be appointed as the Chief Executive Officer. If the Chief Executive Officer is removed from office, he/she shall also be removed from the office of the Chair of the Management Board.
All members of the Management Board shall have equal rights and obligations.
The Management Board shall act in accordance with the legal acts regulating the activities of companies, these Articles of Association, the decisions of the General Meeting and the Supervisory Board as well as the Rules of Procedure of the Management Board.
The members of the Management Board must maintain confidentiality of any commercial (industrial) secrets and confidential information of the Company and the Company's group of companies which become known to them when they are members of the Management Board.
The adoption of the Management Board decisions and the rules of procedure shall be as follows:
64.1. The rules of procedure of the Management Board shall be laid down by the Rules of Procedure of the Management Board adopted by the Management Board.
64.2. Each member of the Management Board shall be responsible for the analysis of issues assigned to his/her scope of competence – area of supervision directly related to the work in the Management Board – in respect of which a decision has to be adopted and for the provision of all necessary information to other members of the Management Board in order for the necessary decisions of the Management Board to be adopted in a timely manner. The specific areas of supervision of the members of the Management Board shall be defined in the Rules of Procedure of the Management Board.
64.3. The Management Board shall adopt its decisions in the Management Board meetings. Minutes of the Management Board meetings must be taken. The Management Board shall organise its activities in accordance with the procedure laid down in the Rules of Procedure of the Management Board.
64.4. Meetings of the Management Board must be held at least once every 2 (two) weeks if the Rules of Procedure of the Management Board do not establish otherwise.
64.5. If the Chief Executive Officer resigns or is removed, the Management Board shall immediately decide on the removal of the Chair of the Management Board.
64.6. Meetings of the Management Board shall be convened and chaired by the Chair of the Management Board. In the absence of the Chair of the Management Board, the oldest member of the Management Board shall convene and chair the meetings of the Management Board.
64.7. The Management Board may adopt decisions and its meeting shall be deemed to have been held when at least 4 (four) members of the Management Board attend the meeting. The members of the Management Board who voted in advance shall be deemed to be present at the meeting.
64.8. A decision of the Management Board shall be deemed to have been adopted if the majority of the members of the Management Board attending the meeting vote for this decision. In the event of a tie, the Chair of the Management Board shall have the casting vote.
64.9. The members of the Management Board must attend the meetings of the Management Board and vote for or against each issue considered. A member of the Management Board shall not be entitled to refuse to vote or abstain from voting unless there is a potential conflict of interest between the member of the Management Board and the Company. A member of the Management Board has the right to grant a written power of attorney to another member of the Management Board to represent him/her in voting at the meeting of the Management Board.
64.10. The members of the Management Board who are unable to attend a meeting of the Management Board directly must give prior written notice thereof or vote in advance in writing or by electronic means of communication if the security of information transmitted is ensured and the person who voted can be identified.
The Chief Executive Officer is a sole management body of the Company.
The Chief Executive Officer shall act on behalf of the Company and enter into transactions at his/her own discretion, except for the cases provided for in the Law on Companies, its implementing legislation and these Articles of Association.
The competence of the Chief Executive Officer, the procedure for election and removal and the terms of office shall be laid down in the Law on Companies, its implementing legislation and these Articles of Association.
The Chief Executive Officer shall take office from the date of his/her election unless provided otherwise in the employment contract entered into with the Chief Executive Officer. The employment contract with the Chief Executive Officer shall be signed by a member of the Management Board authorised by the Management Board.
The Chief Executive Officer shall have the right to resign from office by informing the Management Board and the Supervisory Board in writing.
The Chief Executive Officer shall act in accordance with laws, other legal acts, these Articles of Association, the decisions of the General Meeting, the decisions of the Supervisory Board and the Management Board as well as his/her job description.
The Chief Executive Officer must maintain confidentiality of any commercial (industrial) secrets and confidential information of the Company which become known to him/her in the performance of his/her duties in the Company.
The Chief Executive Officer shall:
73.1. manage the Company;
73.2. organise day-to-day activities of the Company;
73.3. ensure the implementation of the Company's operational strategy;
73.4. implement the decisions of the Management Board;
73.5. make decisions regulating the activities of the Company;
73.6. recruit and dismiss employees, enter into and terminate employment contracts with them, incentivise them and impose penalties on them;
73.7. open and close accounts in banks or other institutions of payment service providers and dispose of the Company's funds therein;
73.8. issue authorisations and procurations;
73.9. ensure the protection of the Company's assets, the creation of appropriate working conditions for the Company's employees, the protection of the Company's commercial secrets and confidential information;
73.10. submit proposals to the Management Board regarding the annual budgets of the Company and of the Company's group of companies;
73.11. enter into a service provision contract with an auditor or an audit firm and ensure that all the Company's documents required for the audit are made available;
73.12. be responsible for:
73.12.1. preparation of the annual financial statements of the Company and the sets of annual consolidated financial statements of the Company's group of companies, preparation of the annual report of the Company and the consolidated annual report of the Company's group of companies;
73.12.2. drafting a decision on the allocation of dividends for a period shorter than the financial year, preparation of a set of interim financial statements and preparation of the interim report for the purpose of adopting a decision on the allocation of dividends for a period shorter than the financial year;
73.12.3. management of shareholders' personal securities accounts and registration of the owners of certificated shares in the Company, except where accounting for uncertificated shares is delegated to account managers;
73.12.4. submitting information and documents to the General Meeting, the Supervisory Board and the Management Board in cases stipulated by the Law on Companies or at their request;
73.12.5. submitting the Company's documents and data to the manager of the Register of Legal Entities;
73.12.6. submitting the documents of the Company to the Bank of Lithuania and the Central Securities Depository;
73.12.7. public disclosure of information prescribed by the Law on Companies in the source specified in these Articles of Association;
73.12.8. submitting information to shareholders;
73.12.9. preparation of the draft annual budgets of the Company and the Company's group of cmpanies;
73.12.10 drafting remuneration policy and a remuneration report and making a public announcement of the approved remuneration policy and remuneration report on the Company's website;
73.13. perform other functions set forth in laws, these Articles of Association, the decisions of the General Meeting, the decisions of the Supervisory Board and the Management Board as well as the job description of the Chief Executive Officer and address other issues relating to the activities of the Company which do not fall within the competence of other bodies of the Company under law and these Articles of Association.
The Chief Executive Officer shall participate and vote in the General Meetings of Shareholders of the companies of which the Company is a shareholder unless the Management Board delegates the implementation of the decisions of the Management Board regarding participation and voting in the General Meetings of Shareholders to another person.
Where, under law or these Articles of Association, the decision and/or approval of the General Meeting and/or the Management Board is required for the conclusion of the Company's transactions or for the adoption of other decisions, the Chief Executive Officer may enter into the Company's transactions or adopt other decisions when such a decision and/or approval of the General Meeting and/or the Management Board has been adopted.
The Audit Committee shall consist of 5 (five) members appointed by the General Meeting for a maximum period of 4 (four) years, ensuring that the majority of the members of the Audit Committee are independent members. Two candidates for the Audit Committee shall be nominated by the Supervisory Board.
The Audit Committee shall elect the Chair of the Audit Committee from among its independent members.
The members of the Audit Committee must comply with independence, qualification and other requirements as specified in Resolution No. 03-14 of the Board of the Bank of Lithuania "On the Approval of the Description of Requirements for Audit Committees" of 24 January 2017.
The Audit Committee shall be responsible for the preparation and submission of objective conclusions or proposals to the Company on the operation of the audit and internal control system in the Company's group of companies.
The competence of the Audit Committee shall include, but shall not be limited to:
80.1. monitoring the financial reporting and auditing processes of the companies of the Company's group of companies;
80.2. monitoring compliance with the principle of independence of auditors and audit firms of the companies of the Company's group of companies;
80.3. monitoring the effectiveness of the internal control, risk management and internal audit systems and processes of the companies of the Company's group of companies;
80.4. preparation and submission of recommendations to the Company regarding the selection, appointment, re-appointment and removal of an external audit company and the terms and conditions of a contract with the external audit company;
80.5. ensuring the effectiveness of the internal audit function in the Company's group of Companies;
80.6. providing an opinion to the Company on transactions with related parties as stipulated in Article 372 of the Law on Companies.
The Audit Committee shall act as the audit committee of the Company's group of companies as a whole.
The regulations of the Audit Committee shall be approved by the General Meeting.
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The activity of the Company and the Company's group of companies shall be planned through the preparation of the annual budgets of the Company and the Company's group of companies, which shall be approved by the Supervisory Board. The Chief Executive Officer shall be responsible for drafting the annual budgets the Company and the Company's group of companies.
A set of financial statements of the Company and a set of consolidated financial statements of the Company's group of companies must be prepared in accordance with International Financial Reporting Standards. The General Meeting shall have the exclusive right to select and remove an auditor or an audit firm and to set the terms and conditions of payment for audit services.
The structural unit performing the internal audit functions of the Company shall be accountable to the Supervisory Board.
The Company's notices on convening the General Meeting and regulated information as defined in the Law on Securities of the Republic of Lithuania, which the Company is required to disclose under the Law on Securities, shall be published in the Central Base of Regulated Information and on the Company's website in accordance with the procedure laid down in this Law.
Other information and notices not specified in Article 86 of the Articles of Association, which the Company must make public, shall be published in the electronic publication for public notices issued by the manager of the Register of Legal Entities in accordance with the procedure laid down by the Government.
At the written request of a shareholder, the Company must, not later than within 7 (seven) days from the date of receipt of the request, make the following documents available to the shareholder: these Articles of Association, a set of annual financial statements of the Company and a set of annual and interim consolidated financial statements of the Company's group of companies, annual and interim reports of the Company and consolidated annual reports of the Company's group of companies, the auditor's conclusions, audit reports on financial statements, minutes of the General Meetings and of the meetings of the Supervisory Board and the Management Board or other documents which formalise the decisions of the bodies of the Company, the Supervisory Board's proposals or comments to the General Meeting, lists of shareholders, lists of members of the Supervisory Board and the Management Board as well as other documents of the Company which are required to be made public by law unless such documents contain any commercial (industrial) secret or confidential information, and/or must provide the shareholder with copies of the above-mentioned documents.
The Company must provide a shareholder with access to all other information of the Company that is not specified in Article 88 of these Articles of Association, which, upon the request of the shareholder, must be systematised according to the reasonable criteria specified by the shareholder and/or must provide copies of documents if such information and documents, including information and documents relating to the Company's commercial (industrial) secret and confidential information, are necessary for the shareholder to meet the requirements set out in other legal acts and the shareholder maintains confidentiality of such information and documents. The Company shall refuse to provide copies of documents to the shareholder if the identity of the shareholder who requested the documents cannot be identified. The refusal to give the shareholder access to and/or provide copies of documents shall be documented by the Company in writing if the shareholder so requests.
Any member of the Supervisory Board or the Management Board shall be entitled to have access to all documents of the Company and of the companies of the Company's group of companies as well as to all information of the Company and of the companies of the Company's group of companies (including information on the draft decisions of the management bodies that have not been adopted yet and information on the planned transactions and investments), which, upon the request of the person receiving the information, must be systematised according to the reasonable criteria specified by such person. If the Company does not have the documents or information on the companies of the Company's group of companies requested by the members of the Supervisory Board or the Management Board, the Chief Executive Officer must take immediate action in order for the Company to obtain such documents or information. Information and documents provided in accordance with this Article must be submitted immediately, but not later than within 5 (five) working days from the date of the receipt of the respective request. The entities referred to in this Article shall have the right to demand and the Company shall have the duty to ensure that certain specific information and documents are provided periodically without a separate request from the relevant entity.
All information and documents referred to in Articles 88–90 of these Articles of Association shall be provided to the shareholders, the members of the Supervisory Board and the Management Board free of charge.
The branches and/or representative offices of the Company shall be established and their activities shall be terminated by decision of the Management Board. The number of the branches and/or representative offices of the Company shall be unlimited.
The branches and/or representative offices of the Company shall operate according to the regulations of the branches and/or representative offices as approved by the Management Board.
The heads of the branches and/or representative offices of the Company shall be appointed and removed in accordance with Article 54.3 of these Articles of Association and the regulations of the branches and/or representative offices as approved by the Management Board.
These Articles of Association of the Company shall be amended in accordance with the procedure laid down in the Law on Companies.
When the General Meeting makes a decision to amend these Articles of Association of the Company, the full text of the amended Articles of Association shall be drawn up and signed by a person authorised by the General Meeting of Shareholders.
These Articles of Association shall become effective as of the date of their registration in the Register of Legal Entities.
In the event of any change in the provisions of laws and any conflict between the provisions of these Articles of Association and the changed laws, the laws must be followed until the Articles of Association of the Company are amended.
The Articles of Association were signed
The person authorised by the General Meeting:
Chief Executive Officer Darius Maikštėnas
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