We would like to remind you that the litas-denominated nominal value of share capital, shares and bonds of both public and private limited liability companies must be converted into euro by 31 December 2016. An ordinary (annual) general meeting of shareholders is a good opportunity to address this issue.

Ordinary (annual) general meeting of shareholders

Companies whose shareholders have not yet decided to convert the nominal value of share capital, shares and bonds into euro can do this at their ordinary (annual) general meeting of shareholders. The company board, or the head of the company where the company has no board, must convene an ordinary (annual) general meeting of shareholders to approve a set of annual financial company statements and distribute profits and losses. The meeting must be convened within four months of the end of the company’s financial year. If the company financial year coincides with the calendar year, the ordinary (annual) general meeting of shareholders must be convened by 30 April 2016.

The ordinary (annual) general meeting of shareholders approves the set of annual company financial statements and adopts a shareholder decision on distribution of profits and losses. In addition, the shareholders can also decide to amend the articles of association and convert the nominal value of share capital, shares and bonds into euro. The ordinary (annual) general meeting of shareholders should also re-elect collegial management bodies (for example, the board) if their term of office has expired or will expire this calendar year.

The shareholder decision on distribution of profits and losses need not be filed with the Register of Legal Entities and does not become public. However, if the company decides to include in the same decision a decision on converting the nominal value of share capital, shares and bonds into euros, the decision must be filed with the Register of Legal Entities and will become public. If you would like to avoid publication of the decision on distribution of profits and losses, we recommend signing two separate decisions, one concerning conversion of the nominal value of share capital, shares and bonds into euro and the other on distribution of profits and losses.

Redenomination of share capital

We would like to remind you that for the purpose of converting the nominal value of shares, the litas-denominated nominal value of one share must be divided by 3.45280. The nominal value per share obtained must be rounded to two decimal places according to the mathematical rounding rules. Redenomination of share capital into euro, meanwhile, must be carried out by multiplying the nominal value per share in euro by the total number of shares. Following conversion, the value of the company share capital must also be rounded with euro cent accuracy, ie if the digit after the last digit to be rounded is 5 or higher, 1 must be added to the last digit, but if the digit after the last digit to be rounded is less than 5, the last digit remains unchanged.

A change in the value of share capital resulting from conversion and rounding will not be treated as an increase or decrease in share capital but must be accounted for as income if the change is negative or as an expense if the change is positive.

If amending the articles of association for the sole purpose of converting share capital into euro, the following procedure will apply:

  1. the decision must be adopted by the General Meeting of Shareholders by a simple majority;
  2. the decision and the articles of association containing the redenominated share capital must be notarised;
  3. the decision and the articles of association must be registered with the Register of Legal Entities, accompanied by a completed application form.

After taking these steps, share capital, shares and bonds are considered to have been redenominated into euro under existing regulations.