For shareholders

Rights of Shareholders

Under the provisions of the Commercial Code (CC) and the special provisions of the Public Offering of Securities Act (POSA)

Property rights of the shareholder

Dividend Right - The right to dividend is a basic property right of the shareholder, translating into the right to receive a share of the net profit of the Company in proportion to its equity participation, subject to conditions specified in the law - adopted by the General Meeting of Shareholders, audited annual financial statements and specific decision of the General Meeting for the distribution of profits. Entitled to receive shareholders who have registered with the Central Depository as shareholders of the Company on the 14th day after the date of the General Assembly, which adopted the annual financial statements and the decision on profit distribution. The Central Depository shall provide the Company with a list of the shareholders at that date.  The shareholder's presence on this list is sufficient to receive a dividend, after due identification.  The company is obliged to ensure payment of the dividend voted by the general meeting within 3 months from the General Meeting of Shareholders. All costs are paid for by the Company. Persons entitled to a dividend may exercise this right within the overall 5-year period, after which right becomes extinguished and unclaimed dividends remain with the Company as they relate to the "Reserve” fund. Right to dividend is subject to the following restrictions:

  • dividends are only paid if according to the audited and approved annual financial statements, the net value of assets minus the dividends and interest to be paid is not less than the sum of the capital, the "Reserve" fund and the other funds the Company is required to maintain by law or statute;
  • a dividend cannot be distributed if its amount exceeds the limits of the profit for the relevant year, the retained earnings from previous years, the share of the "Reserve" fund and other funds of the Company in excess of the minimum required by law or the statute, reduced by the retained losses from previous years and deductions for the "Reserve" fund and other funds of the Company;
  • advance payment of the dividend before the adoption of the annual financial statements is not permitted;
  • at least 1/10 of the profits of the joint-stock company must be paid, until the "Reserve" fund reaches at least 1/10 of the capital of the Company;
  •  the right to a dividend has a 5-year time-barring period.

Liquidating dividend – Each shareholder of "Trace Group Hold" JSC is entitled to a liquidating dividend upon termination of the Company in proportion to his or her participation in the capital.  The exercise of the liquidating dividend  suggests terminated Company. This is a conditional right - it arises and may be exercised only if (and to the extent) upon liquidation of the Company, after satisfying the claims of all creditors, there are assets left to be distributed among the shareholders and up to the size of these assets.

Only shareholders of the Company at the time of its termination are entitled to a liquidating dividend.

Trace Group Hold PLC has not issued any preferred shares entitled to extra liquidating dividend.

The right to subscribe for new shares in case of capital increase, in proportion to the shares until the increase. An increase in the capital of a public company entitles each shareholder to acquire shares corresponding to his or her share in the capital before the increase.  This property right of shareholders of public companies can not be waived or limited by the general meeting of shareholders, neither it can be excluded or limited by resolution of the governing body of the company.

An increase in the capital of a public company by issuing new shares requires the issuing of ordinary securities,  giving the right to subscribe for a certain number of shares in connection with the decision to increase the capital of a public company.  For each share one right shall be issued, and the value of the right is not necessarily equal to the nominal or emission value of one share. The issuance and disposition of rights shall be effective after registration with the Central Depository - Art. 112b., para. 2 of the Public Offering of Securities Act.

The transfer of rights shall be performed on a regulated market.  The regulated market, that has admitted to trading the shares of the public company, must admit to trading the rights issued by the company.  The time limit for transferring the rights may not be shorter that 14 days, and longer than 30 days, while the time limit for subscription of shares from the new emission shall be at least 30 days, as the beginning of time limit for subscription coincides with the beginning of the time limit for transferring the rights, and expires at least 15 working days after expiration of the time limit for transferring the rights.

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.

Non-property rights of the shareholder

Management rights

The right to vote – it allows shareholders to adopt decisions at the General meeting regarding all issues, included in the agenda.  Voting power in the General Meeting of any public company shall arise upon full payment of the issue price of each share  and upon recording of the company or of the increase of capital thereof, as the case may be, in the Commercial Register.

            Every share is entitled to one vote. A public company may not issue preference shares entitling the holder to more than one vote - Art. 111, para. 1. Where a stock belongs to several persons they shall exercise their rights in it jointly by designating a proxy. 177, para. 3 of the Commerce Act.

The right to vote shall be exercised by persons who were entered as shareholders in the Central Depository’s register 14 days prior to the date of the General Meeting. The person's entering as a shareholder and his or her legitimation are enough conditions to exercise the right to vote. Shareholders participate in the General Meeting personally or by proxy, based on a notirized power of attorney, under Art. 116, para. 1 of the Public Offering of Securities Act.

The right to participate in the management of the company and the right to elect and be elected as a member of the management bodies of the company.

Powers:

-             free access to information related to convening a General Meeting of Shareholders and participating therein;

-             raise questions, make proposals before the General Meeting of Shareholders.

This right may be exercised personally or by proxy, based on a power of attorney, applicable for a particular general meeting, which needs to be notary certified, and with the minimum contents, specified by respective ordinance. Re-authorization with rights, as well as a power of attorney, given in contravention of the above stated rules, shall be void.

This power of attorney shall be published for each Meeting of Shareholders.

Control rights

The right to public information is personal and irrevocable controlling right of every shareholder which cannot be limited by a regulation or statute or by decision of a managing body or the General Meeting. The general rule is formulated in Art. 224 of the Commerce Act: Every shareholder is entitled to information; entitled to review all written materials relative to the agenda of a General Meeting and receive such materials upon request and free of charge. Written materials shall be presented to the shareholders no later than the date of promulgation or of sending the invitation for convening a General Meeting.

  One more possibility is included in this right: shareholders are entitled to receiving the minutes from previous general meetings and all annexes thereto, which the Company is obliged to keep - Art. 232, para. 4 of the Commerce Act.

  Shareholders of a public company have additional rights:

-  right to access all information from the book of shareholders – Art.133, para.1 of the Public Offering of Securities Act;

- the members of the management and supervisory bodies and the procurator of the company are obliged to answer correctly, comprehensively and essentially to the questions of shareholders, asked at the general meeting regarding the economic and financial status and the commercial activities of the company, except for issues, considered to be insider information;

-  any shareholder is entitled to require from the Financial Supervision Commission the Minutes from a general meeting and to receive a copy thereof - Art. 117, para. 2 of the Public Offering of Securities Act;

- public companies shall submit to the Financial Supervision Commission and the Bulgarian Stock Exchange annual and quarterly financial statements and publish respective announcements in a central daily newspaper specifying the place, time and the possibilities for reviewing the statements within a 7-day period following their submission to the commission;

-  public companies shall inform the Financial Supervision Commission on other circumstances, specified under Art. 98 of the Public Offering of Securities Act;

-  when shares in a public company are traded on a regulated market, then the public company shall notify the regulated market and present it with all the information it provides to the Financial Supervision Commission, within the same periods.

The right to request assignment of certified auditors  by court, in the event that no such experts have been appointed by the general meeting of shareholders - Art. 249 of the Commerce Act. Rights of minority (rights of shareholders owning at least 5/100 of the Company's capital):

  • convene a General Meeting of Shareholders;
  • request appointing a supervisor;
  • include additional questions in the agenda of a general meeting convened as provided for in Art.  223a of the Commerce Act.

Defence of the Membership is provided for in Art. 71 of the Commerce Act. Any member of a company, respectively, any shareholder) may bring an action to the district court at the company's seat to protect their membership right and their individual rights as a member, when violated by the company's bodies. There is no term provided by law to bring an action.

Repeal of a Resolution of the Company's Bodies

  •  Every stockholder may bring an action before the district court at the company's seat for the repeal of a resolution of the general meeting when such resolution is inconsistent with a mandatory provision of the law or with the constituent contract or, respectively, the statutes of the company. The action shall be brought against the company (Art. 74 of the Commerce Act);
  • Any shareholder of a company may bring an action to the district court at the company's seat to protect their membership right and their individual rights as a member, when violated by the company's bodies. 71 of the Commerce Act);