Balti tuul
44.8 MW
Balti bioenergia
1.2 MW

Articles of Association

1. BUSINESS NAME AND SEAT OF THE PUBLIC LIMITED LIABILITY COMPANY

1.1. The business name of the public limited liability company is Nelja Energia AS.

1.2. The seat of the public limited liability company is Tallinn, the Republic of Estonia.

1.3. The public limited liability company takes the obligation to focus their business activity on the production of renewable energy in Estonia, Latvia and Lithuania and to ensure that its subsidiaries do the same.

2. SHARE CAPITAL AND SHARES

2.1. The minimum share capital of the public limited liability company shall be EUR 40,000,000 and the maximum share capital shall be EUR 160,000,000.

2.2. The share capital shall be divided into registered shares with a par value of EUR 10 each. There shall be only one class of shares.

2.3. Shares can be paid for both by monetary and non-monetary contributions. Monetary contributions shall be paid into the bank account of the public limited liability company. Valuation of non-monetary contributions shall be performed by the Management Board or an expert designated by the Management Board and such valuation shall be audited by an auditor.

2.4. In order to cover losses or increase its share capital, the public limited liability company shall form reserve capital whose amount shall be one-tenth of the share capital. In each financial year, one-twentieth of the net profit of the public limited liability company shall be entered in the reserve capital until the reserve capital reaches the prescribed amount.

2.5. The public limited liability company is entitled to issue shares for a price exceeding their nominal value (premium).

2.6. The public limited liability company may issue convertible bonds if so decided by the public limited liability company’s general meeting.

2.7. The majority shareholder is a shareholder who has the biggest holding in the public limited company (hereinafter majority shareholder), but only when the holding of the respective shareholder is over 40%. When there are two shareholders with a holding of 40% or more, then the majority shareholder is the shareholder who owns the biggest number of shares. When their holdings are equal, then the majority shareholder will be the shareholder who has been the majority shareholder until now.

2.8. A minority shareholder is a shareholder or shareholders, who is not Vardar Eurus AS or any other person, to whom Vardar Eurus AS (or the future acquirer of all or part of its shares) has transferred all of their shares or part thereof (hereinafter minority shareholder or shareholders).

3. TRANSFER OF SHARES

3.1. Shareholders are entitled to freely transfer their shares. The shareholders who have concluded a shareholder agreement on 26 November 2014 (hereinafter shareholder agreement) take the obligation to transfer shares in the future only according to the said agreement.

3.2. Upon the death of a shareholder, his or her shares shall be transferred to the shareholder’s successor.

4. MANAGEMENT BOARD

4.1. The public limited liability company shall be directed by its Management Board consisting of 1 to 5 members.

4.2. The members of the Management Board shall be elected and removed by the Supervisory Board. If the Management Board has more than two members, a chairman of the Management Board shall be elected by the Supervisory Board.

4.3. The Management Board shall direct the public limited liability company with due diligence, give a thorough overview of the financial situation of the public limited liability company when presenting annual accounts to shareholders and perform other duties prescribed by Estonian laws.

4.4. Members of the Management Board who cause damage to the public limited liability company by violation of their obligations shall be jointly and severally liable for compensation for the damage caused in accordance with Estonian laws. The limitation period for assertion of a claim against a member of the Management Board is five years.

4.5. The rights and obligations of a member of the Management Board (the director) shall be established in the agreement to be made with him or her. The Supervisory Board shall make, amend and terminate such agreements.

4.6. Every member of the Management Board may represent the public limited company.

5. SUPERVISORY BOARD

5.1. The Supervisory Board consists of 5 to 9 members. The Supervisory Board shall plan the activities of the public limited liability company, organise the management of the public limited liability company and supervise the activities of the Management Board.

5.2. Members of the Supervisory Board shall be elected and removed by the general meeting of shareholders. The shareholdes who are parties to the shareholder agreement are elected by the Supervisory Board according to the shareholder agreement. A member of the Supervisory Board shall be elected or appointed for a term of five years.

5.3. When minority shareholders own more than 5% of the shares, then the minority shareholders who own at least 75% of the votes represented with the shares of minority shareholders shall have the right to appoint one member of the Supervisory Board and the rest of the members of the Supervisory Board are elected according to clause 5.2. When this right is not exercised, the Supervisory Board members are elected according to clause 5.2.

5.4. Members of the Supervisory Board shall elect from among themselves the chairman of the Supervisory Board who shall organise the activities of the Supervisory Board.

6. MEETINGS OF THE SUPERVISORY BOARD

6.1. Meetings of the Supervisory Board shall be held at least four times per year but not less frequently than once every three months. A meeting shall be called by the chairman of the Supervisory Board or by a member of the Supervisory Board substituting for the chairman.

6.2. The Supervisory Board meetings are held at the seat of the public limited liability company, unless two thirds of the Supervisory Board members have agreed upon otherwise. Participation at the meeting is permitted either in person or by phone or using other communication equipment which is permitted according to the provisions of the Commercial Code. When the meeting is held without participating in person, then decisions can be approved in writing, in case of which a decision enters into force when signed and approved by all of the members of the Supervisory Board.

6.3. Advance notice of at least 10 business days shall be given of the holding of a meeting unless the members of the Supervisory Board have revoked the term of notification. The agenda and documents relating to the meeting shall be delivered to the members of the Supervisory Board together with the notice convening the Supervisory Board meeting, if possible, but in any case not later than 5 business days prior to the date of the meeting.

6.4. The Supervisory Board meeting has a quorum when (i) at least more than a half of the Supervisory Board members are present and (ii) at least one of the members appointed by the majority shareholder and at least one member appointed by the minority shareholders is present (given that the minority shareholders have the right to appoint a member). When the Supervisory Board meeting does not have a quorum due to the members appointed by the minority shareholder or elected from among the persons named by the minority shareholder missing, then the chairman of the Supervisory Board shall summon a new meeting with the same agenda and an advance notice provided in Section 6.3, which will have a quorum when more than half of the members are present regardless of the presence of the members appointed by the minority shareholder or elected from the persons named by the minority shareholder.

6.5. A resolution of the Supervisory Board shall be adopted if more than half of the members of the Supervisory Board participating in the meeting vote in favour of the resolution, except in case of adoption of resolutions requiring a larger majority vote under Section 5.9 or applicable laws in which case such greater majority of affirmative votes is necessary for adoption of the resolution by the Supervisory Board. Each member of the Supervisory Board shall have one vote. A member of the Supervisory Board shall not have the right to abstain from voting or to remain undecided. When the votes are divided equally, the vote of the chairman of the Supervisory Board shall be decisive. A member of the Supervisory Board shall not be represented by another member of the Supervisory Board or by a third person at a meeting or in the adoption of a resolution.

6.6. Upon the consent of all the Supervisory Board members in each respective case, the Supervisory Board shall have the right to adopt resolutions without calling a meeting in accordance with Article 323 of the Commercial Code. If a resolution is made pursuant to the procedure provided for in Article 323 of the Commercial Code, the resolution shall be adopted if more than half of the votes of all members of the Supervisory Board are in favour, except in case of adoption of resolutions referred to in Section 6.8, which require at least the amount of affirmative votes provided in Sections 6.8 and 6.9.

6.7. The Supervisory Board shall adopt resolutions pursuant to the procedure and within the authority established by law. The Supervisory Board shall give orders to the Management Board for organisation of the management of the public limited liability company. The consent of the Supervisory Board is required for conclusion of transactions which are beyond the scope of everyday economic activities of the public limited liability company.

6.8. In addition to the matters provided by the law, the following matters are in the competence of the Supervisory Board and shall be considered as decided when at least 75% of the Supervisory Board members participating in the meeting vote in favour of the said decision:

6.8.1. appointing or dismissing the members of the Management Board;

6.8.2. changing the number of members of the Management Board or their remuneration;

6.8.3. providing consent to allocate the proceeds from any sale of public limited liability company’s assets in an amount of two million euros (EUR 2,000,000) or more to any purpose that is not in line with the public limited liability company’s dividend policy and the annual business plan;

6.8.4. providing consent to the creation, issue, redemption or change of the securities related to the equity, incl. shares, options or warrants by the public limited company or changing the employees’ share options or their acquirement, or providing the consent of the public limited liability company for such changes in relation to any of their subsidiaries;

6.8.5. providing consent to the conclusion of any agreement by which the public limited liability company or any of its subsidiaries makes a loan to or guarantees any debt of any other person or agrees (on a contingent basis or otherwise) to purchase or otherwise acquire such debt or assumes or agrees to indemnifying a creditor against loss or to providing any security or furnishing bonds;

6.8.6. providing consent to any change in the accounting policies of the public limited liability company or any of its subsidiaries, provided that any accounting policies used by the public limited liability company will meet the International Financial Reporting Standards (IFRS);

6.8.7. providing consent to the conclusion of contracts, financial commitments or expenditures which are not part of the public limited liability company's budget or annual business plan and which may exceed in the aggregate 5% of the public limited liability company budget or annual business plan, not in the ordinary course of business;

6.8.8. providing consent to any financial commitment or expenses of the public limited liability company or any of its subsidiaries in excess of one hundred thousand euros (EUR 100,000) for any purpose that is not directly related to the activities of the enterprise or subsidiary of the public limited liability company in the production of renewable energy;

6.8.9. providing consent to any debt in excess of five million euros (EUR 5,000,000) to be taken, or pre-payments of loans to be made, by the public limited liability company or any of its subsidiaries, and any agreement to make a loan or guarantee any debt by the public limited liability company or any of its subsidiaries, except the debt from established credit institution to finance project within the scope of the public limited liability company or its subsidiary;

6.8.10. providing consent to any amendment to the articles of association of any of public limited liability company’s subsidiaries, and the approval by the public limited liability company to increase the share capital of any of its subsidiaries (unless only the public limited liability company or its subsidiaries subscribe for new shares in relation to the share capital increase);

6.8.11. providing consent to approve by the public limited liability company to change the type, rights or form or any class of subsidiaries’ shares or create a new class or type of shares of any of its subsidiaries;

6.8.12. providing consent to the sale of all or part of the business of the public limited liability company or any of its subsidiaries or the assets of the public limited company or any of its subsidiaries in excess of EUR 5,000,000. If the matter is to be decided at the general meeting, Section 7.8.9 shall apply;

6.8.13. providing consent to any transaction between (i) the public limited liability company and a subsidiary, or (ii) the public limited liability company and a shareholder or its affiliate, or (iii) a subsidiary and a shareholder or its affiliate, pursuant to which the public limited liability company or a subsidiary would incur a financial commitment or expenditure in excess of EUR 1,000,000 (whereas the respective shareholder or their affiliate are not allowed to participate in the voting) (given that in the sense of Section 6.8.13 a “transaction” is either a single transaction or a series of related transactions;

6.8.14. until the minority shareholders have their representative in the Supervisory Board, the decision to approve any expenses outside the regular business activities of the public limited liability company.

6.9. A resolution in a matter set forth in Sections 6.8.12–6.8.14 is deemed adopted if at least 75% of the Supervisory Board members participating in the meeting vote in favour of such resolution and the affirmative votes include the vote of the representative of the minority shareholders.

6.10. Members of the Supervisory Board who cause damage to the public limited liability company by violation of their obligations shall be jointly and severally liable for compensation for the damage caused in accordance with Estonian laws. The limitation period for assertion of a claim against a member of the Supervisory Board is five years.

7. GENERAL MEETING

7.1. Shareholders shall exercise their rights at the general meeting of shareholders, which is the highest directing body of the public limited liability company. The public limited liability company shall have regular and extraordinary general meetings.

7.2. A regular general meeting of shareholders shall be called at least once a year, not later than within six months from the end of the financial year.

7.3. The Management Board shall call the general meetings of shareholders. Notice of a regular general meeting shall be given at least 3 weeks in advance. The general meeting may only decide on the matters which have been described in the agenda in a manner that the shareholders are able to consider the proposition before the general meeting is held. A general meeting shall be held at the seat of the public limited liability company, unless otherwise agreed by all shareholders.

7.4. It is within the competence of the general meeting of the shareholders to decide on the matters provided with Article 298 (1) of the Commercial Code. In other matters related to the activity of the public limited liability company, the general meeting of the shareholders may make decisions only if required to do so by the Management Board or the Supervisory Board.

7.5. The shareholders have agreed that the general meeting has a quorum only when 75% of the votes represented with shares are present, whereas (i) Vardar Eurus AS, if a shareholder, is present and (ii) if minority shareholders own more than 5% of the votes represented with shares and at least 75% of the votes represented with the shares of minority shareholders are present.

7.6. If the general meeting of the shareholders does not have a quorum, then in the following 3 weeks, but not sooner than in 2 weeks, the Management Board shall summon a new meeting with the same agenda.

7.7. A decision of the general meeting is considered to be adopted when it receives more than a half of the votes represented at the meeting, except in case of the decisions which, according to Sections 7.8–7.10 or the applicable legislation, need a larger majority vote to be adopted.

7.8. In the following matters, a decision shall be considered as adopted when it receives at least 75% of the affirmative votes represented with shares:

7.8.1. the decision to amend the articles of association of the public limited liability company (and change the financial year of the public limited liability company) or to reduce the share capital of the public limited liability company;

7.8.2. the decision to change the type, rights or form or any class of subsidiaries’ shares or create a new class or type of shares;

7.8.3. the decision of the restructuring, merger, division, dissolution or liquidation of the public limited liability company or transformation of the company into another company;

7.8.4. the decision to change the nature of the business activities of the public limited liability company or any of its subsidiaries in relation to the provisions of Section 1.3;

7.8.5. the decision to approve a mechanism for the distribution of profit, including a silent participation or other means of distributing the profit;

7.8.6. the decision to limit or annul pre-emptive rights;

7.8.7. the decision to impose limitations on the disposal of the shares of the private limited company;

7.8.8. if the minority shareholders do not have a representative in the Supervisory Board, the decision to approve any costs not related to the regular business activity of the company;

7.8.9. the decision to approve the public limited liability company or any of its subsidiaries (A) acquiring or selling the shares or securities of another company; (B) selling the shares of any of its subsidiaries or (C) acquiring or selling any company or assets thereof. The said requirement (A, B and C) only applies when the purchase price is over twenty million euros (EUR 20,000,000);

7.8.10. the decision to change the number of members in the Supervisory Board or their remuneration;

7.8.11. the decision to appoint auditors for the private limited company and to approve the audited annual report.

7.9. In order to adopt the decision to increase the share capital of the public limited liability company, it is required that 90% of all the votes represented with shares are in favour of it, unless a larger majority vote is required by the law. The required number of votes in favour provided in Sections 7.8 and 7.9 is calculated on the basis of all the voting shares in circulation at the given moment, not the number of shares represented at the general meeting.

7.10. Minority shareholders, either jointly or separately owning at least 25% of all the votes represented with the shares of the minority shareholders, shall have the right of veto over the special matters provided in Sections 7.8.1–7.8.8 and in order to adopt the said decisions, a majority vote of at least 75% of all the votes represented with shares is necessary, including 75% of the votes represented with the shares of the minority shareholders.

7.11. Each share shall grant to its holder 1 vote at the general meeting.

7.12. Minutes shall be taken at a general meeting. Requisite data prescribed by law shall be entered in the minutes.

8. AUDITOR

8.1. The auditor(s) shall be appointed and the number of auditors shall be determined by a general meeting of the public limited liability company. The auditor(s) shall be appointed to conduct a single audit or for a specific term. The Management Board shall submit a list of the auditors of the public limited liability company to the Commercial Register.

9. REPORTS

9.1. A financial year of the public limited liability company shall begin on 1 January and end on 31 December.

9.2. After the end of each financial year, the Management Board shall prepare the annual accounts and activity report pursuant to the procedure and within the term provided for by law and present the same together with the auditor’s report and profit distribution proposal to the shareholders for approval.

9.3. The Management Board shall submit the approved annual report to the Commercial Register together with the profit distribution proposal and the auditor’s report not later than six months after the end of a financial year. Along with the annual report the list of holders of registered shares who hold more than ten per cent of the votes determined by shares as at the date of the general meeting that approved the annual report shall be submitted.

10. DISTRIBUTION OF PROFIT

10.1. The shareholders shall participate in the distribution of profit in accordance with the nominal value of the shares held by them. The public limited liability company’s own shares shall not be taken into account in the distribution of profit.

10.2. The shareholders are entitled to net profit, unless the distribution of profit is precluded by law or by a resolution adopted by a general meeting of shareholders.

10.3. Within 30 days since the annual report for the previous financial year is approved at the general meeting of shareholders, the public limited liability company shall distribute 100% of the undistributed profit of the previous financial years, if any, between the shareholders of the public limited liability company in the form of dividend payments. The said threshold may be (i) in any financial year to be reduced to 50% if decided by a majority vote of 90% of all the votes represented with shares or (ii) in any financial year to be reduced to 0% upon the unanimous approval of all the shareholders. The public limited liability company does not distribute dividend in a rate not permissible according to the applicable legislation.

10.4. The Management Board makes a proposition which has been approved by the Supervisory Board to the general meeting of shareholders to distribute 100% the undistributed profit of the last financial year, if any, to the shareholders of the public limited liability company in the form of dividend payments, unless it is prohibited by the applicable legislation.

11. FINAL PROVISIONS

11.1. The public limited liability company shall be dissolved, merged, divided or transformed pursuant to the procedure established by law. The members of the Management Board shall act as the liquidators of the public limited liability company. 

The articles of association have been approved with the decision of the shareholders of 05.03.2015.