ARTICLES OF ASSOCIATION
The name of the Partnership is Centralkommunernes Transmissionsselskab I/S (CTR) (Metropolitan Copenhagen Heating Transmission Company), abbreviated CTR I/S.
The registered offices of the Partnership are in Frederiksberg.
Paragraph 1. The objects for which the Partnership is established are to transport and supply, via the Partnership's own pipe-line network, the heat generated by combined heat and power plants to individual recipient municipalities or to regional heat supply plants - for the benefit of individual customers of central heating within the supply area as well as in society as a whole.
Paragraph 2. It is assumed that the heat will be supplied by combined heat and power plants, heat generating plants, waste combustion plants, major industrial companies and private local heat generating plants, as well as geothermal facilities, etc.
As part of the objects of the Partnership, the Partnership shall undertake the planning, construction, operating, financing and further development of the transmission system and its own heat generating plants.
Paragraph 1. The municipal partners are: the municipalities of Frederiksberg, Gentofte, Gladsaxe, Copenhagen and Tårnby.
Paragraph 2. Other partners may be admitted to the Partnership in compliance with Article 14 of these Articles of Association.
Liability and responsibility
Paragraph 1. The municipal partners shall be held liable directly, jointly and severally and with their entire property, in respect to the Partnership's obligations towards any third party.
Paragraph 2. However, the Board may decide that loans shall be arranged partly or completely without joint liability.
Paragraph 3. In the mutual relationship among the municipal partners, the partners shall be liable as follows:
Paragraph 4. The above distribution of liability corresponds to the expected annual net heat consumption in the year 2002.
Paragraph 5. In the event that the municipal partners' relative annual net heat consumption deviates substantially from what is expected according to the above distribution key, a municipal partner may request a corresponding adjustment of the distribution key outlined under Paragraph 3. Any adjustments of the distribution key shall be effective from the beginning of the financial year following the adjustment.
Paragraph 6. The question of any adjustments of the distribution key as a result of substantial deviation from the expected annual net heat consumption shall be discussed by the municipal partners at five year intervals. The first revision shall take place in 1989.
Paragraph 7. The municipal partners are owners of the Partnership pro rata to their liability according to Paragraphs 3-6.
Paragraph 1. The Partnership's contributed capital totals DKK 15,000,000. This capital shall be provided by contributions from the municipal partners at the formation of the company according to their relative share of liability in Article 6, Paragraph 3.
Paragraph 2. The operation of the Partnership shall be financed through provisions and the taking up of loans.
Paragraph 3. The municipal partners shall be obliged to make capital contributions should the Board of Directors deem such a step necessary, cf. Article 14.
Board of Directors
Paragraph 1. The Board of Directors shall be the supreme authority of the Partnership.
Paragraph 2. The Board of Directors shall consist of 8 members. Members shall be appointed by the municipal partners, as follows:
|Frederiksberg Kommune||1 member|
|Gentofte Kommune||1 member|
|Gladsaxe Kommune||1 member|
|Københavns Kommune||4 members|
|Tårnby Kommune||1 member|
Paragraph 3. Members of the Board of Directors shall hold office for periods of 4 years following local council elections. The term of office of the Board of Directors shall, however, continue until a new Board of Directors have elected its officers.
In the same way, each municipal partner shall appoint one deputy member for each member of the Board.
The Board shall appoint from among its members a Chairman and a Vice-Chairmen. The Chairman and Vice-Chairman shall not be appointed by the same municipal partner. In the Chairman's absence the Vice-Chairman shall take his place.
Paragraph 1. Board meetings shall be convened when a municipal partner, the Chairman of the Board or the management of the company wish for a meeting to be held, and the agenda shall be stated.
Paragraph 2. Board meetings shall be convened by the Chairman who shall also chair the meetings, subject to at least seven days' notice, unless, in the opinion of the Chairman, pressing matters necessitate shorter notice. The notification shall be accompanied by the agenda and all necessary materials.
Paragraph 3. The Board of Directors shall constitute a quorum when a majority of the members, or deputy members in their absence, are present.
Paragraph 4. The Board shall establish a number of committees. These committees are to cooperate with the management on questions relating to the financial standing, plant and operation of the Partnership, including the preparation of cases to be presented to the Board. The Board shall decide the composition of the committees and shall stipulate the rules governing their activities.
Paragraph 5. The Board shall determine detailed rules governing its activities, including amounts of compensation, per diem and remuneration payable to the members of the Board.
Paragraph 1. Each member of the Board of Directors shall have one vote.
Paragraph 2. Matters dealt with by the Board shall be decided by simple majority, unless otherwise stated in these Articles.
Paragraph 3. Directives issued by a county council to its representatives on the Board with regard to the casting of votes in connection with specific cases shall be binding.
Paragraph 1. The following decisions require agreement by at least six members of the Board:
a) Acquisition, sale or mortgaging of real property.
b) Arrangement of loans and the undertaking of guarantee commitments.
c) Establishment of joint ventures with other companies within the energy sector.
Paragraph 2. All questions mentioned under Paragraph 1 shall be considered twice by the Board - the second time at least six weeks after the first.
Paragraph 1. The following decisions require agreement by at least seven members of the Board:
a) Increase in, reduction or postponement of the Partnership's activities in relation to agreed development plans.
b) Changes of internal principles of payment, including the pool principle.
c) Contribution of additional capital.
d) Part-ownership of a demonstration plant for the generation of geothermal energy
e) Admission of new partners and conditions governing this aspect.
f) Resignation of members at the request of the resigning member, with the exception of resignation following termination in accordance with Article 23.
g) Amendments to Articles.
Paragraph 2. All questions mentioned under Paragraph 1 shall be considered twice by the Board - the second time at least six weeks after the first.
Paragraph 1. The Board shall employ a management consisting of one or more managers to deal with the day-to-day running of the Partnership.
Paragraph 2. The managers' contracts shall stipulate the scope of the management's competence and the relationship between the Board of Directors and the Management.
Powers of Authority
The Partnership shall be bound by the signatures of the Chairman of the Board, or the Vice-Chairman of the Board, jointly with one of the daily managers, or on their own jointly with two members of the Board.
Paragraph 1. The management of the Partnership shall be obliged to respect the decisions made by supervisory authorities in accordance with the Municipal Administration Act, the act governing the administration of the municipality of Copenhagen and the act governing the supply of heating.
Paragraph 2. The Board of Directors shall seek approval as necessary, including approval of amounts of compensation, per diem and renumeration, cf. paragraph 5 of article 11, and approval of the Partnership’s foundation of or participation in companies.
Paragraph 1. Not later than 1st April, the Management shall present the budget proposal for the following year to the Board of Directors together with the estimated budgets for the following three years. The budget shall be adopted not later than 1st June.
Paragraph 2. The approved budget shall be sent to the municipal partners, the supervisory authorities and the Partnership's auditors.
Paragraph 1. The financial year of the Partnership shall be the calendar year.
Paragraph 2. The management of the Partnership shall prepare the financial statement. The audited version of the statement shall be presented to the Board of Directors for approval not later than 1st June following the end of the financial year.
Paragraph 3. The financial statement shall be prepared and presented in accordance with the accounting system used by the municipalities.
Paragraph 4. The financial statement shall the prepared in accordance with generally accepted accounting principles - ensuring that the necessary depreciation and provisions are made - and in accordance with the requirements of the supervisory authorities.
Paragraph 5. The audited and approved financial statement shall be submitted to the participating municipalities. The financial statement shall be published as part of the accounts of the municipality of Copenhagen. These accounts and the financial statement shall be sent to the supervisory authorities.
Paragraph 1. The price of heat delivered shall be determined in accordance with legislation governing the fixing of the price of heat, including depreciation, provisions, and return on the invested capital.
Paragraph 2. The prices are calculated so that the municipal partners contribute to a common payment pool, irrespective of where in the transmission network heating is used.
Paragraph 3. In special cases the Partnership may – while complying with the provision in item b of Paragraph 1 of Article 14 – fix prices that deviate from the pool price.
Paragraph 1. Dividend can be declared only to the extent Energitilsynet (the Danish Energy Regulatory Authority) has allowed for return on the capital investment.
Paragraph 2. Complete or part dividend can be declared for that part of the capital paid up which has been paid up in accordance with Paragraph 3 of Article 7.
Paragraph 1. The accounting principles and annual accounts of the Partnership shall be audited by two auditors appointed by the Board of Directors. At least one of the auditors shall be a state-authorized accountant, and at least one shall be from the auditing department of one of the participating municipalities. The audit shall be undertaken in accordance with generally accepted public auditing principles.
Paragraph 2. The auditors' letter shall be presented to the Board of Directors for approval.
Paragraph 1. Participation in the Partnership cannot be terminated before 31st December 2020. A municipal partner can withdraw from the Partnership on 31st December 2020 or by any subsequent 31st December subject to three years' notice in writing.
Paragraph 2. A withdrawing partner shall not be entitled to a share of the property of the Partnership in excess of that partner's own contribution, cf Article 7, paragraphs 1 and 3. Additional conditions, including refunding of capital contribution, shall be decided by mutual consent between the withdrawing municipal partner and the remaining Board of Directors. In the event of dispute, the conditions shall be determined by the court of arbitration described below.
Paragraph 3. Agreements or fixed conditions shall be submitted to the Ministry of the Interior for approval jointly by the municipal partners.
Paragraph 4. A withdrawing municipal partner shall continue to be liable to third parties with respect to the fulfilment of liabilities incumbent on the Partnership at the time of withdrawal. Liability shall continue until such liabilities have been fulfilled.
Dissolution of the Partnership
Paragraph 1. The Partnership can be dissolved or merged with another company subject to agreement by seven members of the Board of Directors at two consecutive Board meetings. The meetings shall be held at least six weeks apart.
Paragraph 2. In connection with dissolution of the Partnership, the Board of Directors shall appoint one or more liquidators to wind up the Partnership.
Paragraph 3. In the event that dissolution is decided upon within the notice period mentioned in Article 23, paragraph 1, the withdrawing municipal partner shall take part in the liquidation of the Partnership as if no application for withdrawal had been made.
Paragraph 1. The municipal partners agree that any disputes shall be settled amicably as far as possible.
Paragraph 2. Any disputes which may arise - and which cannot be settled amicably - among the individual municipal partners concerning the standing of the Partnership or the rights and obligations of the parties - including the interpretation of the provisions of these Articles of Association or any other agreements concluded between the parties - shall be finally settled by arbitration, cf. Article 23, paragraph 3, however.
Paragraph 1. The court of arbitration shall consist of three members. The members of the court of arbitration shall be Supreme Court judges and shall be appointed by the president of the Danish Supreme Court. The president of the Supreme Court shall also decide whom of the three judges shall be the umpire of the court of arbitration.
Paragraph 2. The court of arbitration can be supplemented by an additional two members who shall also be appointed by the president of the Danish Supreme Court, if the appointed judges of the Supreme Court find that the nature of the case necessitates the participation of expert arbitration judges.
Paragraph 3. The court of arbitration shall consist of only one Supreme Court judge who shall be appointed by the president of the Danish Supreme Court if all parties concerned find that the nature and scope of the dispute makes it reasonable. The arbitration judge in question shall have the same power as mentioned above in paragraph 2 to let the court of arbitration be supplemented by two expert arbitration judges.
Paragraph 1. The court of arbitration shall lay down its own rules of procedure and make decisions about finalisation and allocation of the costs of the arbitration case.
Paragraph 2. Furthermore, the Danish Arbitration Act shall apply.
Coming into operation
Paragraph 1. These Articles of Association shall take effect when signed.
Application shall be made for approval of these Articles of Association by the supervisory authorities.
Copenhagen, 13th February 1984
Signed by the five municipal partners' members of the Board of Directors.
Copenhagen, 11th December 1986
Amendments to Article 19, paragraph 5, and Article 22, paragraph 2 approved unanimously by the Board of Directors.
Copenhagen, 8th December 1988
Amendments to Article 18, paragraph 1, and Article 19, paragraph 4 approved by seven members of the Board of Directors (1 member absent).
Copenhagen, 1st June 1993
Amendments to Articles 1, 2, Article 3, paragraph 2, Articles 4, 5, Article 8, paragraph 3, Article 11, paragraph 2, Article 13, paragraph 1, Article 14, paragraph 1, Article 18, paragraph 1, Article 19, Article 20, paragraph 1 and Article 24, paragraph 1 as well as deletions of Article 28, paragraph 2 and Article 30 approved unanimously by the Board of Directors.
Copenhagen, 14th December 1994
Ammendments to Article 17, paragraph 2 approved by seven members of the Board of Directors (1 member absent).
Copenhagen, 11th December 2002
Ammendments to Article 3, paragraph 2, Article 14, paragraph 1, Article 20, paragraph 3 and Article 21, paragraph 1 approved by seven members of the Board of Directors. 1 member of the Board of Directors could not endorse the Ammendments.