In 2014, the Issuer did not comply with three of the rules defined in the Code of Best Practice:
Grounds for the non-compliance with these rules are presented below.
“At least two members of the supervisory board should meet the criteria of being independent from the company and from entities having material links with the company. With respect to the independence criteria for supervisory board members, Annex II to the Commission Recommendation of February 15th 2005 on the role of non-executive or supervisory directors of listed companies and on the committees of the (supervisory) board should apply. Irrespective of the provisions of point (b) of the said Annex, a person who is an employee of the company or its subsidiary or associate cannot be deemed to meet the independence criteria described in the Annex. Furthermore, an actual and material link with a shareholder having the right to exercise 5% or more of the total vote at the general meeting is deemed to preclude independence of a supervisory board member as defined in this rule.”
In the reporting period, there was only one independent member on the Issuer’s Supervisory Board – Mr Andrzej Janiak, appointed on March 26th 2014.
Pursuant to Par. 36.1 of the Issuer’s Articles of Association (the “Articles of Association”), one of the members of the Supervisory Board appointed by the General Meeting should meet all of the following requirements:
Given the fact that, in accordance with Art. 12 of the Act on Commercialisation and Privatisation of August 30th 1996 (consolidated text in Dz.U. of 2002, No. 171, item 1397, as amended), some of the Company’s Supervisory Board members are elected by employees, the Issuer cannot ensure that the number of independent members on its Supervisory Board is as required by the Code of Best Practice. This would lead to a situation where the State Treasury (the Issuer’s majority shareholder) would be unable to appoint the majority of the Supervisory Board members. This in turn would violate the rule stipulating that a shareholder’s influence on a company’s business should be proportionate to the share capital held by such shareholder.
“With respect to the tasks and the operation of the supervisory board committees, Annex I to Commission Recommendation of February 15th 2005 on the role of non-executive or supervisory directors (...) should be applied”
An Audit Committee operates within the Issuer’s Supervisory Board as a standing committee, advising the Supervisory Board on matters within the Committee’s remit.
For a detailed description of the Audit Committee’s rules of operation, see Section 11.3 hereof.
Pursuant to the Code of Best Practice, with respect to the tasks and the operation of its Supervisory Board committees, the Issuer should apply the rules laid down in Annex I to Commission Recommendation of February 15th 2005 on the role of non-executive or supervisory directors of listed companies and on the committees of the (supervisory) board. In the case of the Audit Committee, the primary purpose of the rules is to ensure that the Audit Committee performs its role correctly. The Issuer has complied with all the requirements which guarantee the Audit Committee’s involvement in the supervision of the Issuer’s business. However, the Issuer did not comply with all the detailed requirements for the operation of the Committee. The requirements which the Issuer did not comply with include:
Given the way the Audit Committee currently operates, the Issuer does not consider it necessary to introduce very detailed rules to regulate its operation. The Issuer will take appropriate steps in the future, if justified by the actual manner of operation of the Audit Committee.
“A company should enable its shareholders to participate in a General Meeting using electronic communication means through:
1) Real-life broadcast of General Meetings,
2) Real-time bilateral communication where shareholders may take the floor during a General Meeting from a location other than the General Meeting.”
In accordance with the Commercial Companies Code, bringing into effect the above corporate governance rule would require a relevant amendment to the Company’s Articles of Association. The Company’s Articles of Association do not provide for such possibility, thus the General Meetings are not broadcast in real time.
The Company may begin to broadcast its General Meetings via electronic means in the future, when the available technical solutions and practice, including relevant judicial practice, make the application of such a procedure safe.