10. Manner of operation of the General Meeting, its basic powers and description of the shareholders’ rights along with the procedure for their exercise, in particular the rules stipulated in the rules of procedure for the General Meeting, except where prescribed directly by law
10.1. Description of the manner of operation of the General Meeting
The General Meeting operates in accordance with the provisions of the Commercial Companies Code, the Articles of Association and the Rules of Procedure for the General Meeting. The Rules of Procedure for the General Meeting stipulate, in particular, the rules of conducting meetings and adopting resolutions. The Rules of Procedure for the General Meeting (in polish only) are available on the Issuer’s website at www.pgnig.pl.
The General Meeting may be convened as either ordinary or extraordinary and is held at the Issuer’s registered office. The General Meeting may adopt resolutions only on the matters included in the detailed agenda, unless the entire share capital is represented at the General Meeting and no one present at the meeting objects to adoption of a resolution which has not been included in the agenda. The agenda is proposed by the Management Board or by the party convening the General Meeting.
Pursuant to the provisions of the Commercial Companies Code, a shareholder or shareholders representing at least one twentieth of the share capital may request that certain matters be placed on the agenda of the forthcoming General Meeting. Moreover, the State Treasury, as the company’s shareholder, is entitled to submit such a request, irrespective of its share in the share capital. A General Meeting is convened by the Management Board, which in this respect acts:
- on its own initiative;
- at the request of an entitled shareholder or shareholders, submitted in written or electronic form;
- at a request of a Supervisory Board member appointed pursuant to Par. 36.1 of the Articles of Association (independent member), made in writing or in electronic form,
- at a written request of the Supervisory Board.
If the Management Board does not convene the General Meeting within two weeks from the date of receiving the relevant request, the registry court may authorise shareholders to convene an Extraordinary General Meeting.
- Shareholders representing at least half of the share capital or at least half of the total vote may convene an Extraordinary General Meeting.
- The Supervisory Board may convene an Annual General Meeting if the Management Board fails to do so within the time limit specified in the Commercial Companies Code or the Articles of Association, or an Extraordinary General Meeting, if the Supervisory Board deems it advisable.
- General Meetings shall be convened by publishing a relevant notice on the Company’s website and in any other form prescribed for the purposes of current disclosures under the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies.
- The notice shall be published at least twenty-six days before the date of the General Meeting.
The Annual General Meeting is convened by the Management Board once a year, not later than within six months following the end of the financial year.
At the General Meeting, votes are cast in an open ballot. A secret ballot is ordered in the case of voting on election or removal from office of members of the Issuer’s governing bodies or its liquidator, on bringing them to account and on personnel matters. Furthermore, a secret ballot is ordered if at least one shareholder present or represented at the General Meeting so demands.
The General Meeting adopts resolutions regardless of the number of shares represented at the meeting, unless the provisions of the Commercial Companies Code or the Articles of Association provide otherwise.
Any shareholder is entitled to object to a resolution of the General Meeting, and – in accordance with the Rules of Procedure for the General Meeting – should be given an opportunity to concisely present the reasons for such objection. During the Company’s General Meeting, each shareholder may submit draft resolutions concerning the items on the agenda.
A General Meeting is opened by the Chairperson of the Supervisory Board or the Vice-Chairperson of the Supervisory Board, or – in the event of their absence – by the President of the Management Board or a person appointed by the Management Board. The person opening the General Meeting should procure that the Chairperson of the Meeting is immediately elected and should refrain from any decisions as to substance of matters or as to procedural issues. The Chairperson of the General Meeting is elected by secret ballot. The Chairperson’s role is to ensure that the meeting proceeds smoothly and that the rights and interests of all the shareholders are respected. The Chairperson should not resign from the function without a sound reason and may not unreasonably withhold signing of the minutes of the General Meeting.
Apart from the shareholders, the following persons are entitled to participate in the General Meeting:
- Members of the Management Board and Supervisory Board, as well as candidates to the Supervisory Board (if the General Meeting is to deal with the appointment of a member or members of the Supervisory Board); in the case of candidates to the Supervisory Board, the General Meeting may limit their right to speak to issues related directly to the candidacy;
- Guests invited by the body convening the General Meeting, as well as experts, including auditors of financial statements and members of the Company’s legal service, invited to present their opinions and clarifications concerning the issues included in the agenda, provided that their right to speak may be limited by the General Meeting only to those items on the agenda in connection with which they have been invited;
- Notaries public drawing up the minutes of the General Meeting.
Short breaks in the meeting (technical breaks), which do not constitute its adjournments, may be ordered by the Chairperson, provided that they are not aimed at hindering the exercise of rights by the shareholders.
10.2. Description of key powers of the General Meeting
The General Meeting is the Issuer’s constitutive body. The General Meeting adopts resolutions concerning the following matters:
- Review and approval of the financial statements for the preceding financial year and the Directors’ Report on the Issuer’s operations;
- Granting discharge to the members of the Issuer’s governing bodies in respect of their duties;
- Distribution of profit or coverage of loss;
- Determination of the dividend record date or decision on payment of dividend in instalments;
- Appointment and removal of Supervisory Board members;
- Review and approval of the Group’s consolidated financial statements and the Directors’ Report on the Group’s operations for the preceding financial year;
- Suspension of members of the Management Board from duties or their removal from office;
- Definition of the rules and amounts of remuneration for Management Board members(repealed under the amended Articles of Association of PGNiG S.A. registered in the Register of Entrepreneurs on December 31st 2012);
- Disposal or lease of the Issuer’s business or its organised part, or creation of proprietary interests therein;
- Acquisition of non-current assets, including real estate, perpetual usufruct rights to real estate or interest in real estate, with a value higher than the złoty equivalent of EUR 2,000,000;
- Disposal of non-current assets, including real estate, perpetual usufruct rights to real estate or interest in real estate, with a value higher than the złoty equivalent of EUR 1,000,000;
- Conclusion by the Issuer of loan, borrowing, surety or similar agreements with or for the benefit of a member of the Management or Supervisory Board, a commercial proxy or a liquidator;
- Increase or reduction of the Issuer’s share capital;
- Issue of convertible bonds or bonds with pre-emptive rights, issue of subscription warrants;
- Acquisition of the Issuer own shares for the purpose of offering them to the Issuer’s employees or to persons who were employed by the Issuer or its related entities for at least three years;
- Mandatory buy-back of shares;
- Creation, use and liquidation of capital reserves;
- Use of statutory reserve funds;
- Decisions in relation to claims for redress of any damage caused in connection with the Issuer’s formation or the exercise of management or supervisory duties;
- Granting approval for conclusion of an agreement whereby the Issuer leases out its non-current assets comprising the transmission network to another entity (repealed under the amended Articles of Association of PGNiG S.A. registered in the Register of Entrepreneurs on December 31st 2012);
- Granting approval for the termination, renunciation or material change of the subject matter, term or termination provisions of a lease agreement concluded with the transmission system operator and concerning the Issuer’s assets used for transmission of electricity and gas (repealed under the amended Articles of Association of PGNiG S.A. registered in the Register of Entrepreneurs on December 31st 2012);
- Merger, transformation or demerger of the Issuer;
- Relocation of the Issuer’s registered office abroad;
- Establishing preference on shares;
- Establishing an EU-registered company, transformation into or joining of such a company;
- Formation by the Issuer of another company, with share capital exceeding the złoty equivalent of EUR 1,000,000 (repealed under the amended Articles of Association of PGNiG S.A. registered in the Register of Entrepreneurs on December 31st 2012);
- Amendments to the Issuer’s Articles of Association and changing its business profile;
- Dissolution and liquidation of the Issuer;
- Defining the rules of remuneration for Supervisory Board members.
- Contribution to another company of non-current assets, including real estate, perpetual usufruct rights to real estate or interest in real estate, with a value exceeding the złoty equivalent of EUR 1,000,000 (introduced under the amended Articles of Association of PGNiG S.A. registered in the Register of Entrepreneurs on December 31st 2012).
10.3. Shareholders’ rights at General Meetings and their exercise
Shareholders have the right to participate in the General Meetings and to exercise the voting rights attached to their shares.
Each shareholder of the Issuer has the right to participate in the General Meetings. One share confers the right to one vote at the General Meeting.
Only persons who are the Issuer’s shareholders sixteen days prior to the date of the General Meeting (record date for participation in the General Meeting) are entitled to participate in the General Meeting. The record date for participation in the General Meeting is the same for the holders of rights under bearer and under registered shares.
Holders of rights under registered shares or provisional certificates as well as pledgees and usufructuaries holding voting rights are entitled to participate in the General Meeting provided that they are entered in the share register on the record date for participation in the General Meeting.
Bearer shares in certificated form entitle their holders to participate in the General Meeting if the share certificates are submitted with the Company no later than on the record date for participation in the General Meeting and are not collected prior to the end of that day. Instead of the shares, a shareholder may submit a document confirming that its shares have been deposited with a notary public, a bank or an investment firm having registered office or a branch in the European Union or in a state which is a party to the treaty on the European Economic Area, as indicated in the notice of the General Meeting. Such a document should specify serial numbers of the share certificates and should state that the share certificates will not be released prior to the end of the record date for participation in the General Meeting.
The list of entities entitled to participate in the General Meeting as holders of rights under bearer shares is determined based on the shares submitted with the Company and based on a list prepared by Krajowy Depozyt Papierów Wartościowych S.A. (Polish National Depository for Securities), in accordance with the provisions of the Act on Trading in Financial Instruments.
Shareholders may participate in the General Meetings and exercise their voting rights in person, through representatives or through proxies. Powers of proxy should be granted in writing or in electronic form. A written or electronic document confirming the right to represent a shareholder at the General Meeting is deemed legally valid and needs no other confirmation, unless the Management Board or the Chairperson of the General Meeting prima facie has doubts about its authenticity or validity.
Shareholder(s) representing at least one twentieth of the Issuer’s share capital and the State Treasury (irrespective of its equity interest in the Issuer) may demand that the General Meeting be convened, provided that they submit the request in a written or electronic form. If the Management Board fails to convene the General Meeting at the request of the shareholder(s) within two weeks from the date when the request was submitted, the registry court, after demanding a relevant representation from the Management Board, may authorise the shareholder(s) to convene the meeting. Additionally, shareholders representing at least one twentieth of the Issuer’s share capital may request that certain matters be placed on the agenda of the forthcoming General Meeting. The same right is held by shareholder State Treasury, irrespective of its equity interest in the Issuer. Any such request in the Polish language should be sent to the Issuer in writing or in the electronic form. The request should contain grounds or draft resolutions concerning the proposed agenda items and should be submitted to the Management Board not later than 21 days before the planned date of the General Meeting. A shareholder or shareholders representing at least one twentieth of the Issuer’s share capital may, before a General Meeting, submit to the Company in writing or in the electronic form draft resolutions concerning items which have been or are to be entered on the agenda of the General Meeting. Any item included in the agenda of the General Meeting at the request of the shareholder(s) may only be removed or abandoned if a relevant resolution is passed by the majority of three quarters of the votes and if all the shareholders that made the request and attend the meeting consent to such removal or abandonment.
The Company’s Articles of Association do not provide for the possibility to participate in the General Meeting using means of electronic communication (including speaking at the General Meeting using means of electronic communication) or to exercise the voting rights by postal ballot or using means of electronic communication.
At the request of shareholders representing at least one-fifth of the share capital, the Supervisory Board is elected by way of block voting. The shareholders who at the General Meeting represent such portion of the shares as results from dividing the total number of the represented shares by the number of the Supervisory Board members, may form a block to elect one member of the Supervisory Board, but do not participate in the elections of other members. Shareholders that belong to a block may exercise their voting rights exclusively within the block, which means that the shares held by them cannot be divided. The number of the Supervisory Board members that may be elected within a block is determined by dividing the number of the shares represented by the block by the minimum number of shares necessary to form a block. If a position on the Supervisory Board that should be filled by an appropriate block remains vacant, it is filled by way of voting by all the shareholders who did not participate is the block voting.
At the General Meetings, the Management Board is required to provide shareholders – at their request – with information on the Issuer, if such information is needed to assess a matter on the Meeting’s agenda. The Management Board refuses to provide information if this could adversely affect the Issuer, its affiliate, or its subsidiary company or co-operative, especially through disclosure of any technical, trade or organisational secrets.
A Management Board member may refuse to provide information if this could lead to his/her criminal, civil or administrative liability.
In justified cases, the Management Board may provide the information in writing within two weeks of being requested to do so at the General Meeting.
Answer is deemed to be given if relevant information is available on the Issuer’s website in the section dedicated to shareholder questions and answers to such questions.
The information on the company may also be provided outside the General Meeting. Such information, along with an indication when and to whom it was provided, should be disclosed by the Management Board in writing in the materials to be presented at the next General Meeting. The materials need not include such information which has been made publicly available, including by way of current reports issued pursuant to Par. 38.1.12 of the Regulation, or the information provided at a General Meeting.
A shareholder may require that a list of shareholders be sent to him/her free of charge by e-mail, may inspect the minutes or demand to be given copies of the resolutions of the General Meetings, certified as true copies by the Management Board.
Moreover, a shareholder may request to be provided with certified copies of proposals concerning the issues included in the agenda one week before a General Meeting. Copies of the Directors’ Report on the Company’s operations and of the financial statements, along with copies of the Supervisory Board’s report and the auditor’s opinion are provided to the shareholders at their request, not later than fifteen days before an Annual General Meeting.
At General Meetings, the attending shareholders may propose procedural motions, including motions to change the sequence of matters in the agenda or to order a recess. Each shareholder may also request that a matter be voted on by way of secret ballot.
The Issuer has its own website, where the following information is made available from the date of convening a General Meeting:
- notice of the General Meeting;
- information on the total number of the Company shares and the number of votes attached to such shares as at the notice date and, if there are different types of the shares, on the number of shares of a given type and the number of votes attached to the shares of each type;
- the documentation which is to be presented to the General Meeting;
- draft resolutions or – if no resolutions are planned to be adopted – comments by the PGNiG S.A. Management or Supervisory Board concerning matters which have been or are to be placed on the agenda prior to the General Meeting.
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