Site Language:

Newsletter Subscription

Διοίκηση της Εταιρείας
Description of the shareholders' rights

Shareholders rights are generally regulated by the Commercial Law (CL) and in particular - by the Law on Public Offering of Securities (LPOS), which provides specific issues related to the rights of the public companies' shareholders.

Each ordinary share from the capital of EUROTERRA BULGARIA Plc gives the right of one vote in the General Meeting of the Shareholders, the right to receive a dividend and the right of a liquidation share, proportionate to the nominal value of the share.

1. THE RIGHT TO RECEIVE A DIVIDEND
The right to receive a dividend, proportionate to the nominal value of the share is one of the most important material rights of the shareholder, expressed in the right to receive a share of the balance profit of the company, corresponding to his/her share participation in the capital. The particular preconditions, established by law, in order to receive dividends are: expiration of the financial year; positive financial result (profit) of the company; approved annual financial statement of the company by the General Meeting of the Shareholders; according to the verified and approved annual financial statement, the net value of the property, reduced by the dividends and interests, subject to payment, is not less than the sum of the company's capital, the "Reserve" fund and the other funds compulsory by law or the Articles of Association for the company to set up; decision of the General Meeting of the shareholders to distribute the profit through distribution of dividends.
Entitled to receive dividends shall be only persons, entered as shareholders in the Central Depositary's registers on the 14th day following the date of the General Meeting of Shareholders where the annual financial statement was approved and the decision to distribute the profit was taken. The registration of the person/legal entity in the shareholders' list as of the date stated above, which is to be provided to the company by Central Depository JSC, is a sufficient condition for the shareholder to receive dividends after his/her due legitimating. The public company shall be obliged to ensure payment of the dividends, voted by the General Meeting within a 3-month period after the date of the General Meeting, and all expenses related to the distribution of dividends shall be covered by the company. The right to receive a dividend on the part of the entitled shareholders is under 5-year legal prescription as after expiration of this period the right shall be barred by statute of limitations and the non-received dividends shall remain in the "Reserve" fund of the company. The right to receive a dividend can not be cancelled or restricted by any provision of the Articles of Association, Decision of the General meeting or Decision of a management body of the company, but exercising this right is liable to restrictions in the following directions:

1. It shall not be allowed to be distributed dividends exceeding the amount of the net profit for the respective year, the undistributed profit from previous years, the respective share of the "Reserve" fund and the other funds of the company, exceeding the minimum specified by law or the Articles of Association, and which minimum is reduced with the amount of the accumulated losses from previous years and with the deductions for the "Reserve" fund and the other funds of the company;
2. Advanced payment of dividends prior to the approval of the annual financial statement shall be unallowable;
3. At least 1/10 part of the profit of the public company shall be allocated until the resources in the "Reserve" fund reach minimum 1/10 part of the company's capital;

2. THE RIGHT OF A LIQUIDATION SHARE
The right to obtain a liquidation share, proportionate to the nominal value of the share is one of the basic material rights of the shareholder, included in the membership legal relations. Exercising of this right presupposes a liquidated company. This right is conditional and it may be exercised only in the event that (and as far as) upon liquidation of the company and after the creditors have been satisfied, there is remaining property to be distributed among the shareholders and to the amount of this property.
Rights to obtain a liquidation share have only shareholders of the company as of the date of its liquidation.

3. THE RIGHT TO VOTE
The right to vote is one of the most important non-material rights of the shareholders, through which they participate in the management of the company. This right is exercised when the shareholder adopt decisions at the General meeting regarding all issues, included in the agenda. Each share is entitled to one vote. The company is not allowed to issue shares entitled to more than one vote. In event that the owners of the share/shares are more than one person, they exercise the right to vote together through an authorized representative.
The right to vote at a public company's General meeting shall arise for the respective shareholder at the moment of paying up the full emission value of the share/s and after the entry of the company or respectively the capital increase, in the commercial register.

The right to vote shall be exercised by persons who were entered as shareholders in the shareholders' list, kept by Central Depository JSC 14 days prior to the date of the General Meeting. Registration of the person/legal entity in the shareholders' list as of the date stated above, is a sufficient condition for the person/legal entity to become a shareholder and respectively - to take part in the General Meeting of Shareholders and exercise the right to vote, after respective due legitimating. According to an explicit provision of the Law on Public Offering of Securities, the regulated market where the shares of the company are traded shall immediately announce, upon receipt of the invitation for convocation of a General Meeting, the final date for concluding share transactions, enabling the purchaser to exercise the voting right of the shares at the respective General Meeting - Art. 115b, para. 3 from the Law on Public Offering of Securities. Shareholders with voting rights shall participate in the General Meeting of Shareholders personally or through a representative, authorized with a written and explicit proxy, certified by notary, in accordance with the requirements of Art. 116, para.1 from the Law on Public Offering of Securities.

4. ADDITIONAL RIGTHS

Each share from the capital of EUROTERRA BULGARIA Plc gives also additional rights, resulting from the main rights:
• Right to subscribe a part of the new shares in the event of company's capital increase, which part is proportionate to the shares held before the increase. On the grougs of Art. 112 and following form the Law on Public Offering of Securities, in the event of capital increase in accordance with the procedures, prescribed by law, the present shareholders shall have the right of preferential acquisition of the new shares, proportionate to their participation in the capital prior to the capital increase. Right to participate in the capital increase, shall have persons who have acquired shares not later than 14 days after the date of the Decision for capital increase of the General meeting, or if this decision is taken by the management body -the persons who have acquired shares not later than 7 days after the date of publication of the announcement for public offering and its promulgation in the State Gazette. This right can not be cancelled or restricted by any provision of the Articles of Association, Decision of the General meeting or Decision of a management body of the company.
• The right to participate in the management of the company, including the right to elect and be elected in the management bodies of the company;
• The right to receive information is the ability of the shareholders to review all written materials related to the agenda of the General Meeting, to receive these materials upon request and free of charge, as well as to receive the protocols and the respective attachments to them from previous session of the General Meeting, which the company is obliged to keep.
The right to receive information also includes the right to receive true, comprehensive and substantial answers from the members of the Board of Directors and the procurator of the company to all questions of shareholders, asked at the General Meeting in relation to the economic and financial standing and the commercial activity of the company, except for circumstances which represent inside information.
All shareholders shall have the right to ask such questions whether they are related to the agenda or not.
At any time the shareholders of the company shall have the right to request and receive information on the financial and economic standing of the company from the Investor Relations Director.
• The right to request assignment of certified public accountants from the court, in the event that no such experts have not been elected by the General Meeting of Shareholders;
• The right to cancel decisions of the General Meeting of the company gives the possibility to each shareholder to set up a claim against the company in the District Court under the company's registration, in order to cancel a decision of the General Meeting, whenever such a decision contradicts imperative regulations of law or the Articles of Association.
• The right to defend the membership gives each shareholder of the company the possibility, without any time restrictions, to set up a claim in the District court under the company's registration, in order to defend his/her membership right of membership and the separate membership rights when they are violated by the company's bodies.
• The right to convene a General Meeting of Shareholders, in the event that the shareholder/s hold at least 5 % of the shares with the right to vote for a period of more than 3 months;
• The right to request assignment of a controller, in the event that the shareholder/s hold at least 5 % of the shares with the right to vote;
• The right to additionally include issues in the agenda for a General Meeting of Shareholders which has already been convened, in the event that the shareholder/s hold at least 5 % of the shares with the right to vote for a period of more than 3 months.


The Corporate Governance framework in Bulgaria, as in many other European countries, is based on the relations among the different agents or market participants that affect the governance of the firm as well as on the effect and impact that these relations have on the firm's accountability, effectiveness, efficiency and performance. Basically, most of the issues concerning these relations arise from the agency problems, which is associated with the separation of ownership and control. The local and EU Corporate Governance propositions, following the OECD model, focus on the following areas:
1) Rights and obligations of shareholders
2) Equal treatment of shareholders
3) Role of the company' business associates and of the agencies with legitimate interests in the company
4) Transparent disclosure of information and audit
5) The Board of Directors
6) The non - Executive Members of the Board of Directors and
7) The Executive Management.

Euroterra operating in the European Union environment since the 80s, by producing, operating and selling mainly to American, British, German, etc clients, moved quickly to embrace corporate governance principles. The company has adopted more recent Corporate Governance EU directives, which are dealt with the special and significant subject of transparency and which are obliged the listed companies to disclose info on:
• Takeovers and buyouts
• Expansion plans
• Inside information
• Trading by the top management
• Trading by auditors
• Internal auditing departments
• Shareholder registry
• The composition and obligations of the Board of Directors
• The internal audit
• The terms of increase of the share capital.

The company is also applying, the three directives, already approved by the European Parliament, in the European Union, covering subjects such as:
• The avoidance of market abuse
• The content and the procedure of approval of the Prospectus on the listing and marketing of securities in the stock exchange
• The review of the framework of investment services provision, and
• The implementation of the IFRS in the EU.
Finally, Euroterra Bulgaria is also fully compliant with the criteria laid by the BSE.