Legislative news digest: LEGAL HOTLINE 26.07.2018

Procedure for Establishing JSCs in the Course of Privatisation of State-Owned Enterprises Determined

The procedure for establishing joint-stock companies in the course of privatisation and transformation of state-owned enterprises, and issue of such companies’ shares is approved by Resolution of the Cabinet of Ministers No. 522 dated 11 July 2018.
Transformation of state-owned enterprises into joint-stock companies provides for the following stages:

• Resolution on transformation and establishment of the committee passed by the government authority;
• Evaluation of the enterprise’s asset package;
• Development of the asset evaluation report, statement of transfer of the property into the joint-stock company’s authorised capital by the transformation committee;
• Approval of the asset evaluation report by the state privatisation authority;
• Resolutions on approval of the articles of association of the joint-stock company, statement of transfer of the property into the joint-stock company’s authorised capital and issue of shares by the privatisation authority;
• State registration of termination of the enterprise, and state registration of the established joint-stock company;
• Registration of issue of shares;
• Approval of the plan for placement of shares.

Only ordinary registered shares may be issued upon establishment of the JSC and transformation of state-owned enterprises into joint-stock companies.
Data on the joint-stock company are entered into the Unified Register of State-Owned Property Items. Following the state registration, the JSC is a legal successor of the assets, rights and obligations of the state-owned enterprise undergoing privatisation.

Before the general meeting of shareholders is convened, the state privatisation authority imposes duties of the head of the executive board of the joint-stock company onto the senior executive of the enterprise.

Increase in the Standard Appraised Monetary Value of Land

Starting from 17 July, the factor of functional use of the lands information on which has not been entered into the State Land Cadastre has been increased from 2.0 to 3.0. If the State Land Cadastre does not contain the code of Classification of Types of Intended Use of Lands for the Land Lot, the factor characterising functional use of the land lot in calculation of its standard appraised monetary value is applied at 3.0 (instead of 2.0).

The amendments are provided for by Order of the Ministry of Agrarian Policy and Food of Ukraine No. 162 dated 27 March 2018 and entered into force on 17 July 2018.

Amendments to the Procedure for Submitting Financial Reports Approved by the Cabinet of Ministers

The Procedure for Submitting Financial Reports was amended by Resolution of the Cabinet of Ministers of Ukraine No. 547 dated 11 July 2018 as follows:

• Update of the list of enterprises submitting financial reports under the international financial reporting standards;
• Submission of financial reports drawn up under the international financial reporting standards, on the basis of taxonomy in the unified electronic format;
• Submission of the management report and report on payments for the benefit of the state by specific categories of enterprises alongside with the financial reports;
• Publication of financial reports in accordance with the requirements established by the Law, and submission of the consolidated financial reports.

Financial reports and consolidated financial reports are drawn up under the international financial reporting standards by public-joint-stock companies, enterprises issuing securities, which are listed on stock exchange or in respect of which a public offer is made by banks, insurers, lending unions, mining enterprises of national significance, enterprises pertaining to large enterprises in accordance with the Law of Ukraine “On Accounting and Financial Reporting in Ukraine” as well as enterprises carrying out business activity of the following types:

• Provision of financial services, except for insurance and retirement insurance (Section 64 of the National Classifier of Types of Economic Activity KVED DK 009:2010);
• Private retirement schemes (Group 65.3 of the Classifier of Types of Economic Activity KVED DK 009:2010);
• Auxiliary activity in the sphere of financial services and insurance (Section 66 of the Classifier of Types of Economic Activity KVED DK 009:2010), except for auxiliary activity in the sphere of insurance and retirement insurance (Group 66.2 of the Classifier of Types of Economic Activity KVED DK 009:2010).

The resolution entered into force on the day of publication thereof, 14 July 2018, except for paragraph 8 of Clause 1 of the amendments approved by this Resolution, which enters into force on 1 January 2019.

Supreme Court Expressed Its Opinion on Debt Recovery in a Foreign Currency

When considering case No. 761/12665/14-ц, in its resolution dated 4 July 2018, the Grand Chamber of the Supreme Court expressed the legal stance regarding debt collection in a foreign currency.

It was stated by the Supreme Court that if the court delivered the judgement on the debt recovery in a foreign currency, the foreign currency established by the court judgement must be transferred to the collector and not its equivalent amount in UAH. Transfer of the amount in the national currency of Ukraine at the official exchange rate of the National Bank of Ukraine is not deemed to be due execution.

According to the new Civil Procedure Code of Ukraine, when selecting and applying the legal rule to the legal relations in dispute, the court takes into consideration the opinions on application of the legal rules expressed in the resolutions of the Supreme Court.