Corporate governance
In response to our stakeholders' expectations, we strive for effective and transparent management. We want to maintain a balance between the interests of all entities involved in our Company's activities in a manner that ensures its development and growth in value.
JSW Group consists of 20 companies with capital ties, headed by the parent company, Jastrzębska Spółka Węglowa. The other companies are subsidiaries controlled by JSW.
JSW Group as a structure operates on the basis of the Accounting Act, whereas its companies are based on the Polish Commercial Companies Code.
JSW Group's Code is the key document governing relations between Group companies. Exercising ownership supervision as part of JSW Group's management activities is addressed in JSW Group's Corporate Governance Rules, adopted in 2019 and intended to establish harmonised and transparent operating procedures and standards for the Group's activities. The Corporate Governance Code is intended to increase the effectiveness of Group management and the functioning of its companies and to implement ownership supervision forms and procedures that go beyond what is required by the existing laws. With these corporate governance rules and detailed procedures for their application, it is possible to streamline the process of reaching a shared objective in the form of growing the Group's value for all stakeholders.
Key management rules and changes
JSW is a multi-facility enterprise that encompasses five hard coal mines operating as separate facilities, a production support facility and a management board office. JSW's organs include:
- Management Board,
- Supervisory Board,
- General Meeting.
The competences of JSW's organs are specified in the Polish Commercial Companies Code and other provisions of law as well as the Company's Articles of Association and internal regulations. The internal organisation of specific facilities is governed by separate Organisational Regulations and Organisational Charts.
Organisational chart at 31 December 2019
JSW's structure and the organisational set-up of its internal units are defined by the Management Board. The Company's Organisational Regulations must be opined by the Supervisory Board.
The Management Board manages the Company by adopting resolutions or through other forms of decision-making. To make declarations of intent and to sign on behalf of the Company, two Management Board Members must act jointly or one Management Board Member together with a Proxy. As the parent company's organ, the Management Board coordinates JSW Group's management in cooperation with the relevant offices and the management boards of subsidiaries.
The Management Board Office is headed by the President of the Management Board and Deputy President of the Management Board through Office Directors and Management Board Representatives. The structure of organisational units within the Management Board Office is specified in the Management Board Office Organisational Chart.
Hard coal mines are managed by Mine Directors and Deputy Directors - Industry Directors or Operations Managers. The Mine Director, Deputy Directors and Operations Managers manage the Mine on the basis of, and within the bounds set by, their powers of attorney. Facility Directors report directly to JSW's Management Board.
The Production Support Facility is managed by the Facility Director and Deputy Director. The Director manages the Facility on the basis of, and within the bounds set by, his/her power of attorney and, like Mine Directors, reports directly to JSW's Management Board.
The Company has a set of internal regulations and systems that contribute to an increase in management and operational efficiency at JSW Group's units and entities, ensure transparent relations thanks to outlined communication rules and cooperation between units as well as clearly defined operating procedures and standards.
Key organisational changes at JSW in 2019:
- formation of mining facility KWK Bzie-Dębina under construction,
- update of Framework Mine Organisational Charts, Rules and Organisational Chart for the Management Board Office and Production Support Facility in order to adapt these to changes in law and market conditions.
The following organisational changes took place at JSW after the reporting period:
- Ruch Jastrzębie was separated from KWK Borynia-Zofiówka-Jastrzębie and moved into KWK Bzie-Dębina under construction, which was then re-named as KWK Jastrzębie-Bzie,
- KWK Borynia-Zofiówka-Jastrzębie was re-named as KWK Borynia-Zofiówka.
Quality management system
The Quality Management System that is part of our Integrated Management System provides customers with reasons for trust and belief that we are able to reach quality targets and comply with customer requirements, and it allows us to shape the Company’s image as caring about protecting the environment and ensuring worker safety.
The quality management system is graded on the basis of feedback from customers. Customer satisfaction surveys are carried out, which in practice means that we survey our key customers, giving us input data for product improvements. This is also used as material for analysis in management system reviews.
The aim of our quality policy is to meet our customers' expectations by delivering goods that are in line with what they expect and with requirements stated in contracts with customers. The quality management system especially focuses on optimising processes and improving the organisational culture.
Environmental management system
The environmental management system is also part of the Integrated Management System. As regards environmental management, we are committed to preventing pollution and minimising adverse impact on our surroundings.
Various environmental aspects related to the Company's activities and products have been identified. Information pertaining to environmental aspects is identified and kept up-to-date with the use of an appropriate procedure. A schedule is prepared for each material environmental aspect, which includes the scope and frequency of measurements and/or ways of monitoring.
Taking into account legal and other requirements related to JSW's operations, significant environmental and technological aspects and the expectations of interested parties have been identified in an environmental management programme, which contains objectives and tasks related to environmental aspects, delivery deadlines, people in charge, planned expenditures and the expected outcomes. Environmental targets are set taking into account the management approach that is part of the management system policy, along with significant environmental aspects and legal requirements that are applicable to the environmental aspects of plant operations.
Occupational health and safety management system
The occupational health and safety management system is also part of the Integrated Management System. The objective of the occupational health and safety management system is to create and improve operational mechanisms for managing the facility that lead to reduced threats and exposures. This process is performed in a constantly recurring cycle of planning, organisational and audit activities and decisions. These actions are performed on the basis of procedures, while monitoring is done using an IT system. This makes it possible to deliver improvements in this area, especially by taking actions to ensure the safety of technological processes, striving to prevent accidents, occupational diseases and near-misses, A declaration has been issued on the identification, monitoring and minimisation of threats that can affect workplace safety; further activities intended to promote safe conduct among the crew have also been declared and intensified.
The company's leadership have undertaken to provide essential measures and resources intended to shape safe attitudes among employees and to monitor threats and reduce their impact on the workplace.
Planned and ad-hoc internal audits and annual supervisory audits are performed at JSW's Facilities as part of its certified occupational health and safety management system. This system is being improved in order to raise the employees' awareness of existing threats, their recognition and prevention.
Information security management system
With a view toward reducing business risk, the risk of losing key information, and to ensure that the Integrated Management System policy and targets are implemented, an information security management system has been deployed. As one of the systems comprising the Integrated Management System, it includes: "Classification of Information," "Risk Analysis and Assessment" and "Risk Handling Plan." The system was implemented in order to employ defence mechanisms that are adequate to business needs, define rules for handling various types of information, estimate risk based on existing threats and specify acceptable risk levels.
Internal control system
JSW's internal control system sets out tasks in the areas of internal control, risk management, compliance, internal audit, as well as those having direct or indirect impact on how accurately financial statements are drafted. This system encompasses multiple implemented control mechanisms and internal regulations.
The internal control system is regulated by the Internal Control System Operational Rules - a set of regulations and rules that constitute the basis for developing, operating and using JSW's internal control system. The internal control system is permanently embedded in the management process. At its basis, it identifies and subsequently estimates risk related to processes and activities performed at all organisational units. Based on identified risk, appropriate internal control mechanisms are designed and then deployed. These mechanisms should protect JSW against identified threats to its objectives. The Parent's internal control system covers all organisational regulations, procedures and structures, which together are intended to ensure: compliance with strategy, effectiveness and efficiency of procedures, protection of assets, compliance of transactions and activities with applicable laws, supervisory regulations and internal policies, plans, provisions and procedures as well as support for the decision-making process.
The internal control system aims to support management and the achievement of objectives, including improvements in activities and ensuring safety and stable operations.
Enterprise risk management system
Risks are an inherent element of a business model and its implementation. JSW Group has taken steps to most closely observe the rules contained in Good Practices for WSE-listed Companies, as well as to ensure as much transparency as possible, proper quality of communication with investors and the safeguarding of shareholder rights. The observance of these rules is ensured through a comprehensive enterprise risk management system, which consists of JSW Group's Enterprise Risk Management Policy and Procedure.
Compliance system
Works on developing and implementing a comprehensive compliance system continued in 2019. The adopted rules mean that there is no acceptance for discriminating against, judging and ridiculing other people, especially because of their gender, race, disability, nationality, ethnic origin, sexual orientation, age, creed, political and world-view beliefs, property situation and social status, cultural differences, political association or membership or marital status. This system includes a range of intertwined documents that address specific areas. In comparison to the internal policies and procedures presented and described in the Statement on non-financial information for 2018, the following internal regulations either were adopted in 2019 or are planned to be adopted:
| CODE OF ETHICS |
Contains the most important values and standards respected and applied at the Group. This is the Group's constitution when it comes to ethics and compliance. |
| COMPLIANCE POLICY |
This is the key document addressing the Group’s compliance function. It also contains a division of responsibilities and competences by unit as well as methods and ways of examining submissions and conducting explanatory proceedings. |
| PROCEDURE FOR REPORTING IRREGULARITIES AT JSW GROUP | Introduces consistent rules for reporting potential irregularities at the Group. |
| PROCEDURE FOR CONDUCTING EXPLANATORY PROCEEDINGS (work in progress) | Sets out rules for instigating and conducting explanatory proceedings. The procedure for carrying out explanatory proceedings will be developed individually by each company, taking into account its specific nature, especially with regard to internal organisational structures and the availability of resources. |
| ANTI-CORRUPTION POLICY | Sets out rules and responsibilities for employees related to counteracting corruption. |
| POLICY FOR MANAGING CONFLICTS OF INTEREST | Contains guidelines for resolving conflicts between the company's interests and the personal interests of its employees and other obligated entities. |
| COUNTERPARTY VERIFICATION POLICY | Specifies what steps should be taken prior to a decision on commencing cooperation with a counterparty. It also sets out the basic requirements for companies verifying their counterparties, including the scope of verification and rules for proceeding in the case of justified doubts with regard to a counterparty. |
| POLICY FOR HIRING RELATIVES AND ACQUAINTANCES | Sets out the most important rules for cooperating with relatives and acquaintances. |
| POLICY FOR GIVING AND RECEIVING GIFTS (work in progress) | Contains detailed information on whether and under what circumstances a gift may be accepted or handed in connection with work for the Group. |
| CHARITY AND PROMOTIONAL POLICY (being updated) | Contains information on the terms and rules for promotional and charitable activities by the companies. The policy will point out the rules for avoiding accusations of abuse, corruption or preferential treatment. |
Corporate governance rules
The key value that we are guided by in all of the Company's business activities is a focus on meeting the requirements and expectations of all stakeholders. Taking into account corporate social responsibility standards, JSW's Management Board engages in economic development, social cohesion and environmental protection in all operating areas.
Since 2008, Jastrzębska Spółka Węglowa has had an Integrated Quality Management System, Environment Management System and Occupational Health and Safety Management System. Certified management systems have been deployed at JSW and a number of Group companies. The Integrated Management System's performance is being continuously improved, in line with a declaration contained in the Integrated Management System Policy.
The Company holds a certificate confirming that it has implemented and uses a management system for: quality, environmental protection, occupational health and safety and information security as regards: mining, processing and selling coal.
The system includes quality targets, environmental targets and tasks, general and detailed targets concerning occupational health and safety, as well as targets, plans and precautions concerning information security. Appropriate financial, human and organisational resources have been secured to maintain and continuously improve the integrated management system and achieve the relevant targets.
The key objectives of the integrated management system include:
- documenting compliance with quality requirements pertaining to goods at all stages of processes, alongside compliance with requirements concerning environmental protection and occupational health and safety,
- minimising potential for the occurrence of irregularities in goods,
- detecting and rectifying, as early as possible, the causes of disruptions in processes,
- limiting adverse impact on the environment,
- continually enhancing employee safety,
- acting to ensure the safety of technological processes, striving to prevent accidents, occupational diseases and near-misses,
- identifying, monitoring and minimising threats that can have an impact on work safety,
- protecting information resources and measures for information processing,
- ensuring the security of data and continuity of business processes,
- strengthening JSW's position as a solid partner and building an "eco-friendly" image for the Company.
Management system
Quality management system
The Quality Management System that is part of our Integrated Management System provides customers with reasons for trust and belief that we are able to reach quality targets and comply with customer requirements, and it allows us to shape the Company’s image as caring about protecting the environment and ensuring worker safety.
The quality management system is graded on the basis of feedback from customers. Customer satisfaction surveys are carried out, which in practice means that we survey our key customers, giving us input data for product improvements. This is also used as material for analysis in management system reviews.
The aim of our quality policy is to meet our customers' expectations by delivering goods that are in line with what they expect and with requirements stated in contracts with customers. The quality management system especially focuses on optimising processes and improving the organisational culture.
Environmental management system
The environmental management system is also part of the Integrated Management System. As regards environmental management, we are committed to preventing pollution and minimising adverse impact on our surroundings.
Various environmental aspects related to the Company's activities and products have been identified. Information pertaining to environmental aspects is identified and kept up-to-date with the use of an appropriate procedure. A schedule is prepared for each material environmental aspect, which includes the scope and frequency of measurements and/or ways of monitoring.
Taking into account legal and other requirements related to JSW's operations, significant environmental and technological aspects and the expectations of interested parties have been identified in an environmental management programme, which contains objectives and tasks related to environmental aspects, delivery deadlines, people in charge, planned expenditures and the expected outcomes. Environmental targets are set taking into account the management approach that is part of the management system policy, along with significant environmental aspects and legal requirements that are applicable to the environmental aspects of plant operations.
Occupational health and safety management system
The occupational health and safety management system is also part of the Integrated Management System. The objective of the occupational health and safety management system is to create and improve operational mechanisms for managing the facility that lead to reduced threats and exposures. This process is performed in a constantly recurring cycle of planning, organisational and audit activities and decisions. These actions are performed on the basis of procedures, while monitoring is done using an IT system. This makes it possible to deliver improvements in this area, especially by taking actions to ensure the safety of technological processes, striving to prevent accidents, occupational diseases and near-misses, A declaration has been issued on the identification, monitoring and minimisation of threats that can affect workplace safety; further activities intended to promote safe conduct among the crew have also been declared and intensified.
The company's leadership have undertaken to provide essential measures and resources intended to shape safe attitudes among employees and to monitor threats and reduce their impact on the workplace.
Planned and ad-hoc internal audits and annual supervisory audits are performed at JSW's Facilities as part of its certified occupational health and safety management system. This system is being improved in order to raise the employees' awareness of existing threats, their recognition and prevention.
Information security management system
With a view toward reducing business risk, the risk of losing key information, and to ensure that the Integrated Management System policy and targets are implemented, an information security management system has been deployed. As one of the systems comprising the Integrated Management System, it includes: "Classification of Information," "Risk Analysis and Assessment" and "Risk Handling Plan." The system was implemented in order to employ defence mechanisms that are adequate to business needs, define rules for handling various types of information, estimate risk based on existing threats and specify acceptable risk levels.
Internal control system
JSW's internal control system sets out tasks in the areas of internal control, risk management, compliance, internal audit, as well as those having direct or indirect impact on how accurately financial statements are drafted. This system encompasses multiple implemented control mechanisms and internal regulations.
The internal control system is regulated by the Internal Control System Operational Rules - a set of regulations and rules that constitute the basis for developing, operating and using JSW's internal control system. The internal control system is permanently embedded in the management process. At its basis, it identifies and subsequently estimates risk related to processes and activities performed at all organisational units. Based on identified risk, appropriate internal control mechanisms are designed and then deployed. These mechanisms should protect JSW against identified threats to its objectives. The Parent's internal control system covers all organisational regulations, procedures and structures, which together are intended to ensure: compliance with strategy, effectiveness and efficiency of procedures, protection of assets, compliance of transactions and activities with applicable laws, supervisory regulations and internal policies, plans, provisions and procedures as well as support for the decision-making process.
The internal control system aims to support management and the achievement of objectives, including improvements in activities and ensuring safety and stable operations.
Enterprise risk management system
Risks are an inherent element of a business model and its implementation. JSW Group has taken steps to most closely observe the rules contained in Good Practices for WSE-listed Companies, as well as to ensure as much transparency as possible, proper quality of communication with investors and the safeguarding of shareholder rights. The observance of these rules is ensured through a comprehensive enterprise risk management system, which consists of JSW Group's Enterprise Risk Management Policy and Procedure.
Compliance system
Works on developing and implementing a comprehensive compliance system continued in 2019. The adopted rules mean that there is no acceptance for discriminating against, judging and ridiculing other people, especially because of their gender, race, disability, nationality, ethnic origin, sexual orientation, age, creed, political and world-view beliefs, property situation and social status, cultural differences, political association or membership or marital status. This system includes a range of intertwined documents that address specific areas. In comparison to the internal policies and procedures presented and described in the Statement on non-financial information for 2018, the following internal regulations either were adopted in 2019 or are planned to be adopted:
| CODE OF ETHICS |
Contains the most important values and standards respected and applied at the Group. This is the Group's constitution when it comes to ethics and compliance. |
| COMPLIANCE POLICY |
This is the key document addressing the Group’s compliance function. It also contains a division of responsibilities and competences by unit as well as methods and ways of examining submissions and conducting explanatory proceedings. |
| PROCEDURE FOR REPORTING IRREGULARITIES AT JSW GROUP | Introduces consistent rules for reporting potential irregularities at the Group. |
| PROCEDURE FOR CONDUCTING EXPLANATORY PROCEEDINGS (work in progress) | Sets out rules for instigating and conducting explanatory proceedings. The procedure for carrying out explanatory proceedings will be developed individually by each company, taking into account its specific nature, especially with regard to internal organisational structures and the availability of resources. |
| ANTI-CORRUPTION POLICY | Sets out rules and responsibilities for employees related to counteracting corruption. |
| POLICY FOR MANAGING CONFLICTS OF INTEREST | Contains guidelines for resolving conflicts between the company's interests and the personal interests of its employees and other obligated entities. |
| COUNTERPARTY VERIFICATION POLICY | Specifies what steps should be taken prior to a decision on commencing cooperation with a counterparty. It also sets out the basic requirements for companies verifying their counterparties, including the scope of verification and rules for proceeding in the case of justified doubts with regard to a counterparty. |
| POLICY FOR HIRING RELATIVES AND ACQUAINTANCES | Sets out the most important rules for cooperating with relatives and acquaintances. |
| POLICY FOR GIVING AND RECEIVING GIFTS (work in progress) | Contains detailed information on whether and under what circumstances a gift may be accepted or handed in connection with work for the Group. |
| CHARITY AND PROMOTIONAL POLICY (being updated) | Contains information on the terms and rules for promotional and charitable activities by the companies. The policy will point out the rules for avoiding accusations of abuse, corruption or preferential treatment. |
Application of corporate governance rules in 2019
We apply the highest standards and good practices in transparency and corporate governance. We implement solutions related to ethics management and responsibility in managing the supply chain. This enhances our credibility among business partners and investors. As a company listed on the Warsaw Stock Exchange, we embrace the highest standards in reporting, including financial and non-financial reporting.
Statement on corporate governance
Acting pursuant to § 70 sec. 6 point 5) and § 71 sec. 4 and 5 of the Ordinance of the Minister of Finance dated 29 March 2018 on current and periodic information published by issuers of securities and on conditions for recognising such information as being equivalent to information required by the laws of a non-member state, the Management Board of JSW S.A. publishes a Statement on the application of corporate governance rules in 2019.
Indication of corporate governance rules
In 2019, the Parent applied the corporate governance rules set out in the document "Good Practices for WSE-Listed Companies 2016," adopted on 13 October 2015 by the Council of the Warsaw Stock Exchange through resolution 26/1413/2015. The document Good Practices 2016 is available at the WSE's website: https://www.gpw.pl/dobre-praktyki. Moreover, information on JSW's application of the guidelines and rules indicated in Good Practices 2016 is available at JSW's corporate website: http://www.jsw.pl/relacje-inwestorskie/lad-korporacyjny/dobre-praktyki/.
Indication of corporate governance rules that JSW could apply voluntarily
JSW does not apply corporate governance rules that go beyond the requirements listed in "Good Practices for WSE-Listed Companies 2016."
Indication of corporate governance practices applied by JSW that go beyond requirements arising from domestic law
JSW does not apply corporate governance rules that go beyond the requirements listed in "Good Practices for WSE-Listed Companies 2016."
Indication of corporate governance rules that were not applied
JSW makes every effort to apply the corporate governance rules listed in "Good Practices for WSE-Listed Companies 2016." In 2019, JSW decided not to apply the following rules:
Description of key features of internal control and risk management system in reference to the process of preparing financial statements
In order to ensure the correctness, reliability and compliance of financial statements with the existing laws and to generate high-quality financial data, the Group has an internal control and risk management system. The Parent's Management Board is responsible for the internal control system and its performance in the process of preparing financial statements and periodic reports drafted and published in accordance with the Ordinance.
Internal rules and procedures
The internal control and risk management system for preparing financial statements at the Group includes a range of procedures and internal rules that are aimed at ensuring efficient and effective control as well as the identification and elimination of potential risks. The system is primarily based on:
- JSW Group's Code,
- JSW's Articles of Association,
- JSW's organisational regulations,
- Documentation concerning accounting rules (policy),
- Document workflow instructions,
- Tax procedure,
- Enterprise risk management policy and procedure,
- Rules for JSW's internal control system,
- Internal audit rules,
- Compliance Policy,
- Procedure for reporting irregularities.
This process is also ensured through the application by the Group's companies of consistent templates for financial statements, audit and review of the financial statements of the Group's key companies by the same audit firm and a process of authorisation and providing opinions on financial statements prior to publication.
The preparation of financial statements is supervised by the Deputy President of the Management Board for Economic Matters. The Chief Accountant Office is responsible for preparing separate and consolidated financial statements, while the management boards of consolidated companies are responsible for preparing reporting packages for the Group's consolidated financial statements.
In order to ensure consistent accounting rules, JSW has adopted Documentation concerning accounting rules (policy), based on IFRS, which is in effect at JSW and the Group's entities. Changes in IFRSs are monitored on an on-going basis in order to keep the Documentation concerning accounting rules (policy) and the scope of disclosures in financial statements up to date. The Parent consistently applies IFRS-compliant accounting rules to present financial data in financial statements, periodic reports and other reports for shareholders. The same rules apply to companies within JSW Group.
Data disclosed in financial statements is derived from JSW's book-keeping records and additional information provided by JSW's organisational units. Group companies provide the required data in the form of reporting packages in order to prepare consolidated financial statements.
IT solutions
The credibility of financial statements is backed by data from accounting books that contain records entered on the basis of correct source documentation, using the latest IT technology. The system's modular structure provides a transparent division of areas and competences, consistent records of operations in accounting books and control between the books. Access to data in various ranges and set-ups is available through an extensive reporting system. JSW keeps its IT system up-to-date on changes in accounting rules or other legal norms thanks to flexible functionalities in the system's modules. Consolidated financial statements are prepared using specialised IT tools. The Group's IT solutions secure access to the finance and accounting system and ensure due protection and archiving for accounting books. The IT system's safety is also ensured through a proper structure of authorisations. Access control is effected at every stage of the financial reporting process, starting with source data entry, through data processing, to generating output information. The Group applies hardware-based, systemic and organisational security systems.
Audit Committee's role
The Supervisory Board evaluates the separate and consolidated financial statements. The Audit Committee's main objective is to support the Supervisory Board in exercising financial oversight and providing the Supervisory Board with credible information and opinions that make it possible to make the right decisions with regard to financial reporting, internal control and risk management, as well as the monitoring of the independence of the entity authorised to audit financial statements. In accordance with the existing laws, JSW's financial statements are audited (annual financial statements) and reviewed (semi-annual financial statements) by an independent statutory auditor. The statutory auditor is selected by JSW's Supervisory Board from among renowned audit firms, based on a recommendation from the Audit Committee. In its audit work, the statutory auditor carries out an independent evaluation of the credibility and accuracy of the separate and consolidated financial statements and confirms the validity of the internal control and risk management system.
Risk management
A key element in risk management as it relates to the process of preparing financial statements is an audit of the control mechanisms and risks present at JSW. In performing these tasks, the Audit Committee is supported by Internal Audit, which verifies process control and performance. Internal Audit performs audit tasks in the form of assurance or advisory services.
Internal control system
The internal control system covers JSW Group's entire operations, as specified in its Articles of Association, and all levels of its organisational structure, thus also all processes that take place at JSW, including areas having direct or indirect impact on the validity of financial reporting. The internal control system includes a system for financial and IT control solutions as well as relevant regulations, procedures and organisational structures. The system is intended to ensure the organisation's efficient and effective operations, reliability of financial reporting and compliance with legislation and internal regulations. JSW systematically audits system performance and its control mechanisms, identifying potential risks in these processes.
Description of rules for amending the Company's Articles of Association
The Company's Articles of Association may be amended through a General Meeting resolution, followed by a decision by a competent court on entry of the amendment in the national court register. An amendment of the Articles of Association consisting of a major change in the Company's economic activities (416 §1 Polish Commercial Companies Code) does not require a buy-out of shares from all shareholders not agreeing to the change if the General Meeting resolution is adopted by a two-thirds majority of votes cast, in the presence of shareholders representing at least half of share capital.
Management Board
Management Board competences
The Company's Management Board operates on the basis of the Polish Commercial Companies Code, Articles of Association, the Company's Organisational Regulations, JSW's Management Board Regulations, which are adopted by the Management Board and approved through a Supervisory Board resolution, other internal regulations and the provisions of law. Management Board members perform their duties in accordance with the function specified by the Supervisory Board in a resolution on appointment to the Management Board. In accordance with the Company's Articles of Association, the Management Board consists of three to seven members.
The Management Board consists of:
President of the Management Board - supervises the Company's overall activities, directs the Management Board's work and appoints a Deputy President of the Management Board, who performs these functions in the absence of the President. The President of the Management Board convenes Management Board meetings and chairs them. If no Deputy is appointed in the absence of the President, the President is substituted by the Deputy President of the Management Board for Technical Matters. The scope of responsibilities of the President of the Management Board includes exercising direct supervision over the work of organisational units belonging to the Division of the President of the Management Board, in accordance with the current organisational chart of the Management Board Office. The President also supervises the Occupational Health and Safety Team.
Deputy President of the Management Board for Technical and Operational Matters - supervises the Company's overall activities, particularly the work of subordinate organisational units in the Division of the Deputy President of the Management Board for Technical and Operational Matters. He/she substitutes the President of the Management Board if no Deputy is named in the absence of the President of the Management Board.
Deputy President of the Management Board for Economic Matters - supervises the Company's overall activities, particularly the work of subordinate organisational units in the Division of the Deputy President of the Management Board for Economic Matters in line with the organisational chart of the Management Board Office.
Deputy President of the Management Board for Trade - supervises the Company's overall activities, particularly the work of subordinate organisational units in the Division of the Deputy President of the Management Board for Trade in line with the organisational chart of JSW's Management Board Office.
Deputy President of the Management Board for Development - supervises the Company's overall activities, particularly the work of subordinate organisational units in the Division of the Deputy President of the Management Board for Development in line with the organisational chart of JSW's Management Board Office.
Deputy President of the Management Board for Labour and Social Policy - supervises the Company's overall activities, particularly the work of subordinate organisational units in the Division of the Deputy President of the Management Board for Labour and Social Policy in line with the organisational chart of JSW's Management Board Office. The Management Board handles the Company’s matters and represents it in and out of court of law, sets its strategic directions and determines its targets and objectives as well as makes decisions in all matters not reserved for other Company’s corporate organs.
The Management Board manages the Company directly through resolutions, other forms of decisions, entries to minutes, and indirectly through Office Directors, Management Board Representatives and Directors of Entities through whom it supervises the work of individual Entities. Resolutions, motions or decisions made by the Management Board are provided to the relevant organisational unit for further distribution. The Directors Council, composed of Directors of the Company’s Entities and other invited Directors, is an opinion and advisory body for the Management Board. Management Board meetings take place at the Company's registered office and in justified cases outside the Company's registered office and with the use of teleconferences or video conferences. Resolutions may be adopted if all Management Board members were duly notified of the Management Board meeting.
To make declarations of intent and to sign on behalf of the Company, two Management Board Members must act jointly or one Management Board Member together with a Proxy. Management Board members may not make decisions concerning the issue or buy-back of shares.
Management Board resolutions are adopted by an absolute majority of votes in the presence of at least three Management Board members. The following issues that exceed ordinary management require a Management Board resolution:
- determining the organisational bylaws defining the Company's organisation,
- appointing general proxies,
- purchasing and selling real estate,
- matters in which the Management Board turns to the General Meeting and Supervisory Board,
- issue of promissory notes,
- establishing rules for JSW's internal control system.
Management Board responsibilities
The Management Board's basic responsibilities include:
- preparing the Company's financial statements and report on operations for the financial year, along with the Group's consolidated financial statements and report on operations, within three months from the balance sheet date. These documents should be signed by all Management Board members. The refusal of a Management Board member to sign should be documented;
- preparing recommendations with regard to profit allocation or loss coverage for a given financial year;
- having the Company's financial statements and the Group's consolidated financial statements audited by an entity authorised to audit financial statements;
- submitting the documents specified in points 1) and 2) for assessment by the Supervisory Board together with the statutory auditor's opinion and report;
- convening General Meetings:
- ordinary, which should take place within six months from the end of a financial year,
- extraordinary:
a) within two weeks, at the written request of the Supervisory Board,
b) immediately if the balance sheet shows a loss exceeding the sum of supplementary capital and reserve capital and one-third of share capital, in order to adopt a resolution on the Company's further existence,
c) at its own initiative or at the request of shareholders representing at least one-twentieth of share capital; - providing to the Ordinary General Meeting the documents listed in points 1) and 2) above and the Supervisory Board's reports on their assessment;
- providing to the General Meeting, along with a Supervisory Board opinion, a report on representation expenses, expenses on legal services, marketing services, public relations and social communication services and management advisory services, which is prepared at least once a year;
- preparing at least once a year a supervisory report on investment projects and submitting this to the Supervisory Board for approval;
- introducing the rules specified in the Act on managing state assets at companies in respect of which the Company is the parent entity in the meaning of art. 4 point 3 of the Act on competition and consumer protection of 16 February 2007, in connection with art. 17 sec. 7, art. 18 sec. 2, art. 20 and art. 23 of the Act on rules for managing state assets;
- maintaining records of General Meeting minutes;
- cooperating with trade unions active at the Company in accordance with the Act on trade unions;
- providing exhaustive explanations together with all relevant documents and other materials concerning the Company to entities carrying out inspections, the Supervisory Board and the General Meeting;
- implementing post-inspection recommendations;
- seeking the Supervisory Board's opinion on the following:
a) organisational bylaws defining the Company's organisation,
b) matters to be examined at the General Meeting,
c) the Company's annual plans,
d) changes in rules for selling non-current assets, specified in § 291 of the Company's Articles of Association;
e) rules for sponsoring activities, - submitting the following to the Supervisory Board for approval:
a) regulations for the Company's Management Board;
b) the Company's strategy;
c) regulations for the internal control system;
d) the Group's remuneration policy; - obtaining consent from the Supervisory Board for performing the activities specified in § 20 sec. 3 of the Company's Articles of Association.
Appointing and dismissing
Management Board members are appointed for a joint term of three years. The mandate of a Management Board member appointed before the end of the term of office of the Management Board expires simultaneously with the expiry of the mandates of the remaining Management Board members. Management Board Members are appointed and dismissed by the Supervisory Board following a qualification procedure (except for the Management Board Member appointed by JSW employees). Rules for appointing and dismissing Management Board Members are defined by the Articles of Association and the Act on rules for managing state assets.
The Supervisory Board conducts a recruitment procedure if there is a justified need to appoint a Management Board member. By initiating a recruitment procedure for the position of a Management Board Member, the Supervisory Board defines, by way of a resolution, the detailed rules and the method followed during the procedure, including in particular:
- position subject to the procedure,
- date and place where recruitment submissions are received,
- date and place where interviews are held,
- range of subjects discussed during the interview,
- requirements and the method of evaluating candidates.
A candidate for the position of a member of JSW's Management Board must meet the requirements specified in the Company's Articles of Association.
| A CANDIDATE FOR THE POSITION OF A MEMBER OF JSW’S MANAGEMENT BOARD MUST MEET ALL OF THE FOLLOWING CONDITIONS: | THE FOLLOWING PERSONS MAY NOT BE A CANDIDATE FOR THE POSITION OF A MEMBER OF JSW’S MANAGEMENT BOARD: |
|---|---|
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An announcement about the recruitment procedure is published on JSW’s website and in the Public Information Bulletin of the Ministry of State Assets. The Supervisory Board notifies shareholders about the outcome of the recruitment procedure at the nearest General Meeting and make the recruitment procedure report available to them.
Management Board member selected by JSW employees
If the average annual headcount in the Company exceeds 500 employees, one Management Board member is elected by the Company’s employees, in accordance with the election bylaws adopted by the Supervisory Board. Results of the election are binding for the body authorised to appoint the Management Board, i.e. the Supervisory Board.
Failure to elect an employee representative to the Management Board does not hinder the Management Board from adopting binding resolutions. At the request of at least 15% of all Company employees, a ballot is held to dismiss a Management Board member elected by employees. Such dismissal, death or other important reasons that decrease the number of Management Board Members by the Member elected by the Company’s employees requires supplementary election.
The supplementary election should be held within one month after being called by the Supervisory Board. The Supervisory Board calls an election of the Management Board member to be elected by the employees for the next term within two months from the lapse of the last full year of the Management Board’s term of office. This election should be held within two months after being called by the Supervisory Board. Detailed regulations concerning this matter are included in JSW’s Articles of Association.
A Management Board member submits his/her resignation to another Management Board member or Proxy, with a copy sent to the Supervisory Board and the relevant Minister, as long as the State Treasury remains the Company's shareholder.
Management Board composition
Table. Composition of JSW's Management Board at 31 December 2019 and changes
| FIRST AND LAST NAME | POSITION | TERM OF OFFICE |
|---|---|---|
| COMPOSITION OF JSW'S MANAGEMENT BOARD, 9TH TERM | ||
| Daniel Ozon | President of the Management Board | 01.01.2019 - 11.06.2019 |
| Tomasz Śledź | Deputy President of the Management Board for Technical Matters | 01.01.2019 - 03.07.2019 |
| Artur Dyczko | Deputy President of the Management Board for Strategy and Development | 01.01.2019 - 10.01.2019 |
| Jolanta Gruszka | Deputy President of the Management Board for Trade | 01.01.2019 - 10.01.2019 |
| Robert Ostrowski | Deputy President of the Management Board for Economic Matters | 01.01.2019 - 28.02.2019 |
| Robert Małłek | - Supervisory Board member delegated to temporarily serve as Deputy President of the Management Board for Strategy and Development - Supervisory Board member delegated to temporarily serve as Deputy President of the Management Board for Strategy and Development, appointed as President of the Management Board |
- 27.02.2019 - 26.05.2019 28.05.2019 - 11.06.2019 - 11.06.2019 – 03.07.2019 |
| Artur Wojtków (selected by employees) | Deputy President of the Management Board for Labour and Social Policy | 01.01.2019 - 03.07.2019 |
| COMPOSITION OF JSW'S MANAGEMENT BOARD, 10TH TERM | ||
| Włodzimierz Hereźniak | President of the Management Board | 01.08.2019 - 31.12.2019 |
| Tomasz Śledź | Deputy President of the Management Board for Technical Matters | 04.07.2019 - 18.12.2019 |
| Radosław Załoziński | Deputy President of the Management Board for Economic Matters | 04.07.2019 - 31.12.2019 |
| Rafał Pasieka | - Deputy President of the Management Board for Trade - Deputy President of the Management Board for Trade, appointed as acting President of the Management Board |
- 04.07.2019 - 31.12.2019 - 04.07.2019 - 31.07.2019 |
| Artur Dyczko | - Deputy President of the Management Board for Strategy and Development - Deputy President of the Management Board for Strategy and Development, appointed as acting Deputy President of the Management Board for Technical Matters |
- 04.07.2019 - 18.12.2019 - 18.12.2019 - 31.12.2019 |
| Artur Wojtków (selected by employees) | Deputy President of the Management Board for Labour and Social Policy | 04.07.2019 - 31.12.2019 |
CHANGES IN COMPOSITION OF JSW'S MANAGEMENT BOARD IN 2019
- On 9 January 2019, Mr. Robert Ostrowski resigned as Management Board Member - Deputy President of the Management Board for Economic Matters, effective 28 February 2019. On 6 February 2019, the Supervisory Board agreed to exempt Mr. Robert Ostrowski from providing work as of 12 February 2019.
- On 10 January 2019, JSW's Supervisory Board dismissed:
- Mr. Artur Dyczko as Deputy President of the Management Board for Strategy and Development,
- Mrs. Jolanta Gruszka as Deputy President of the Management Board for Trade. - On 26 February 2019, the Supervisory Board adopted a resolution to delegate Supervisory Board Member Mr. Robert Małłek to temporarily serve as Deputy President of the Management Board for Strategy and Development from 27 February 2019 to 26 May 2019 inclusively, however not later than the date on which a Deputy President of the Management Board for Strategy and Development is appointed.
CHANGES IN COMPOSITION OF JSW'S MANAGEMENT BOARD AFTER THE REPORTING PERIOD
- On 20 January 2020, JSW's Supervisory Board changed Mr. Artur Dyczko's function at JSW's Management Board, appointing him as Deputy President of the Management Board for Technical and Operational Matters, 10th term.
- On 12 February 2020, JSW's Supervisory Board:
- dismissed Mr. Rafał Pasieka as Deputy President of the Management Board for Trade,
- appointed Mr. Włodzimierz Hereźniak as acting Deputy President of the Management Board for Trade from 12 February 2020 until the appointment of a Deputy President of the Management Board for Trade. - On 12 February 2020, JSW's Supervisory Board decided to appoint Mr. Tomasz Duda as Deputy President of the Management Board for Development, 10th term, effective 13 February 2020.
Table. Management Board Composition at publication of this report
| MEMBERS OF JSW'S MANAGEMENT BOARD | |
|---|---|
|
WŁODZIMIERZ HEREŹNIAK President of the Management Board [email protected] acting Deputy President of the Management Board for Trade [email protected] |
Management area: |
|
RADOSŁAW ZAŁOZIŃSKI Deputy President of the Management Board for Economic Matters [email protected] |
Management area: |
|
TOMASZ DUDA Deputy President of the Management Board for Development [email protected] |
Management area: |
|
ARTUR DYCZKO Deputy President of the Management Board for Technical and Operational Matters [email protected] |
Management area: |
|
ARTUR WOJTKÓW Deputy President of the Management Board for Labour and Social Policy [email protected] |
Management area: |
Mr. Włodzimierz Hereźniak is a graduate of the Mining Faculty at the Silesian University of Technology in Gliwice. He began his professional career in 1977 as a technical and scientific worker at the Non-Ferrous Metals Institute in Gliwice. In 1982-1993 he began working in mining, at KWK Knurów, where he progressed from foreman to lead engineer. He subsequently served as President of the Management Board at Węglokop Sp. z o.o. and Deputy Director of Marketing at Gliwicka Spółka Węglowa S.A. He has years of experience in managing companies such as: Węglozbyt S.A. in Katowice, Remkoks Sp. z o.o. in Dąbrowa Górnicza, Jastrzębska Spółka Węglowa S.A. in Jastrzębie-Zdrój, Polski Koks S.A. in Katowice and Przedsiębiorstwo Energetyki Cieplnej S.A. in Jastrzębie-Zdrój. Until July 2019, he served as vice-president of the management board at TAURON Ciepło Sp. z o.o. During his career, he has served on and chaired numerous supervisory boards, including at Haldex S.A., Koksownia Przyjaźń Sp. z o.o., Jastrzębska Spółka Węglowa S.A., C&C GmbH Duisburg. He is the author and co-author of numerous industry papers in the country and abroad.
Mr. Radosław Załoziński is a graduate of the Economics Faculty at the Kraków University of Economics. He also completed post-graduate studies in Foreign Trade at the Wrocław University of Economics. He participated in the Executive Academy program in cooperation with IMD Business School in Lausanne, Colorado School of Mines and KGHM. He is an expert in managing financial risk, organising debt financing, trade and trade finance. He has been involved in the mining industry since the beginning of his professional career. He began working in 1999 at KGHM Polska Miedź S.A., initially as Senior Sales Specialist. Since 2005, he served as Head of the Risk Division, where he was responsible for analysing financial markets, including the local currency market, and for developing a credit risk management process. From 2010 to 2016, he served as Director of the Market and Credit Risk Management Department, where he was responsible for front and middle office and for managing a team involved in hedging a multi-billion exposure related to merchant credit. From mid-2016 to 2018, he worked as General Director for Finance and Risk Management, with responsibility for ensuring financial liquidity for the entire KGHM Group, insurance, market risk management (hedging) and credit risk management. During his work at KGHM, he participated in numerous projects, including the development of Poland's first systemic solution for global market risk management in connection with the acquisition of Canada-based Quadra FNX, as well as providing opinions on and negotiating multiple financing agreements for KGHM Group, negotiating a project finance restructuring for Sierra Gorda SCM with Japanese banks and the joint venture partners (Sumitomo Group). From February 2019 to the beginning of July 2019, he worked as Management Board Representative for Economic Matters at Jastrzębska Spółka Węglowa S.A., where he was responsible for coordinating the work of the economic division. During this time, he was involved in coordinating works to close the process of negotiating a consortium credit agreement with banks financing JSW Group and loans from the European Investment Bank for JSW S.A. and JSW Koks.
Graduate of the Silesian University of Technology in Gliwice, specialising in Deposit Management Techniques. In 2012, he also completed post-graduate studies in mine ventilation at the AGH University of Science and Technology in Kraków. He also graduated from the Mining Managers School organised by the Polish Foundation for Promoting Personnel. He has been involved in the mining industry since the beginning of his career. He began working in 1992 at KWK Anna, which belonged to Rybnicka Spółka Węglowa, where he worked as lower, middle and higher supervisor. He continued his career at various levels in the mines Jankowice and Rydułtowy as well as the central office of Rybnicka Spółka Węglowa S.A. and Kompania Węglowa S.A., where in 2003-2005 he dealt with investments and public procurement. In 2005-2016, he worked at KWK Rydułtowy-Anna, including as Head of Ventilation Division, Deputy Head of Mine Operations. In 2016-2019, he worked at KWK Sośnica in Gliwice, a mine owned by Polska Grupa Górnicza S.A. (PGG), initially as Lead Engineer and later as Director for that mine. In August-October 2019, he served as Vice-President of the Management Board for Technical Matters at Tauron Wydobycie S.A. From October 2019, he was employed at PGG's central office, most recently serving as Management Board Representative for Asset Restructuring at PGG.
Mr. Artur Dyczko has a PhD from the AGH University of Science and Technology in Kraków and is a graduate of the Mining Faculty at the same university, majoring in: Underground Deposit Management Techniques and Management and Marketing. He also completed post-graduate studies in Human Resources Management at the Jagiellonian University and in Mining Geology at the Geophysics Geology and Environmental Protection Faculty at the AGH University of Science and Technology in Kraków. He began his professional career in the mining industry in 1999 at the ZG Rudna branch of KGHM Polska Miedź S.A., where he worked until 2001 in mining operations, progressing through all levels from intern to mid-level supervisor. From 2002, he worked as assistant at the Mineral Commodities and Energy Management Institute at the Polish Academy of Sciences in Kraków. From July 2016, he worked at JSW as Representative for Restructuring and later as Director of Strategy and Development Office and Management Board Representative for Production at JSW. From August 2017 to January 2019 he served at JSW as Deputy President of the Management Board for Strategy and Development, and most recently as Management Board Representative for Strategy and Development. He is the author and co-author of numerous research studies, expert opinions, implementation projects and scientific papers in the area of mining. He has a wealth of experience in developing strategies for mining firms and creating their value. He has experience in managing large project teams, having participated in and shaped complex restructuring and performance processes across dozens of implementation projects in the mining industry, including for LW Bogdanka S.A., KGHM Polska Miedź S.A., KHW S.A., Tauron Wydobycie S.A., Polska Grupa Górnicza S.A. and JSW S.A. He is a co-author of JSW's strategy for exiting from crisis in 2016 and implementing JSW Group's current strategy 2030. He was a consultant in the area of mining, exploitation of mineral resources and use of IT tools in managing deposits for large international corporates such as: Deloitte, KPMG, PwC, McKinsey, IBM, HP, Microsoft, Bentley, Dassault Systèmes (Gemcom), SAP, Deswik and ABB. At the Management Board, he will be responsible for implementing strategy, development, IT expansion, investments and owner's supervision.
A lawyer by education, he is a graduate of the Silesian University in Katowice and has completed post-graduate studies in Social labour dialogue at the Academy of Economics in Katowice and in Managing occupational health and safety in industry at the Silesian University of Technology in Gliwice. He has been with Jastrzębska Spółka Węglowa S.A. since 1995. From 1995, he worked as Head of Organisational and Legal Division and in 1999-2009 as Director for Labour at KWK Borynia. From 2009 he served at JSW S.A. as Deputy President of the Management Board for Labour and Social Policy.Remuneration policy
Rules for remunerating Management Board members are set by the General Meeting and the Supervisory Board in accordance with the Act of 9 June 2016 on rules for remunerating persons managing certain companies, which governs remuneration for members of management and supervisory organs.
Contracts for the provision of management services with the Company are executed for the duration of appointment as Management Board member, effective from their entry into force. If a Management Board member's mandate expires, especially as a result of death, dismissal or resignation, end of term, the contract is terminated on the last day of the appointment, without a notice period and the need to take any additional action. A contract with a Management Board member may be terminated at any time by agreement of the Parties on the rules specified in that contract.
No separate contracts are executed with Management Board members that would grant them compensation in the event of resignation, termination or dismissal. These issues are regulated in the management contracts.
Contracts with Management Board members in effect during the period until 3 July 2019
The amount of monthly Fixed Remuneration for Management Board members is set by the Supervisory Board, subject to the following provisions of the General Meeting:
- Fixed Compensation for the President of the Management Board is set within the range of between 7 and 15 times of the average compensation in the corporate sector without profit-sharing, in the fourth quarter of the previous year, as announced by the President of the Central Statistical Office.
- Fixed Compensation for other Management Board Members is set within the range of between 7 and 12 times of the average compensation in the corporate sector without profit-sharing, in the fourth quarter of the previous year, as announced by the President of the Central Statistical Office.
- monthly (per calendar month) lump-sum base compensation (Fixed Compensation):
- for President of the Management Board - PLN 60 000.00 gross,
- for other members of the Management Board - PLN 50 000.00 gross,
Fixed Compensation also includes compensation for the transfer of copyright and for the performance of other obligations arising from the contract. - supplementary compensation for the relevant financial year (Variable Compensation) contingent on progress in achieving management objectives, which may not exceed 100% of the annual Fixed Compensation.
Fixed Compensation and Variable Compensation are payable after the deduction, by the Parent as payer, of applicable public-law levies subject to payment to relevant authorities in respect of the Manager. If the applicable provisions of law require that, despite the fact that the Manager does not run his/her own business activity, Fixed Compensation, Variable Compensation or benefits payable by virtue of severance pay or non-compete clauses are subject to VAT at the applicable rate, such VAT will be added on top the amount in question. If it becomes mandatory for the Manager to pay VAT for any past periods, the Parent undertakes to pay to the Manager the amount equivalent to such tax arrears with interest.
Fixed Compensation is payable within 7 days of delivery of a properly issued bill to JSW. If the contract is in force for a shorter period than a full calendar month or if the Manager is unable to render his/her services in an uninterrupted manner, as provided for in the contract, Fixed Compensation will be calculated on a pro rata basis.
The Manager will also be entitled to Variable Compensation if he/she performs the contract for a period of less than one full financial year but at least for 3 months in the relevant financial year, in which case Variable Compensation will be calculated on a pro rata basis. The pro rata calculation will depend on the number of days of the Manager’s provision of the services in the relevant financial year. The maximum amount of Variable Compensation for a given financial year, Management Objectives for a given financial year and the method of evaluating their achievement are defined (to the extent consistent with the General Meeting resolution on remuneration) by the Supervisory Board. A general set of Management Objectives is outlined by a resolution adopted by the General Meeting, and the Supervisory Board is authorised by the General Meeting to define them precisely, assign weights to such objectives and define objective and measurable criteria of their achievement and settlement. Variable Compensation will be paid out provided that the Manager achieves his/her Management Objectives, after the Management Board report on JSW's operations and financial statements for the preceding financial year have been approved and the Manager has received a vote of confidence from the General Meeting in accordance with the contract.
Variable Compensation, provided that it is due, will be paid within 7 days from delivery to the Parent of a correctly issued bill by transfer to a bank account indicated by the Manager. In accordance with a decision of the General Meeting, payment of a portion of Variable Compensation may be deferred for a period not to exceed 36 months, depending on the fulfilment of conditions by the specified deadline according to the designated Management Objectives, in which case that portion of Variable Compensation may be paid out in full or partially at the end of the settlement period.
The Parent will be entitled to put forward a claim for reimbursement (in full or in the appropriate part) of Variable Compensation if, following such disbursement, it becomes apparent that Variable Compensation (in whole or in the appropriate part, as the case may be) was granted to the Manager on the basis of data that subsequently turned out to be untrue.
Contracts with Management Board members in effect during the period from 4 July 2019
The amount of monthly Fixed Remuneration for Management Board members is set by the Supervisory Board, subject to the following provisions of the General Meeting resolution:
- Fixed Remuneration for the President of the Management Board is set within the range of between 7 and 15 times of the average compensation referred to in art. 1 sec. 3 point 11 of the Act of 9 June 2016 on rules for remunerating persons managing certain companies,
- Fixed Remuneration for other members of the Management Board is set within the range of between 7 and 12 times of the average compensation referred to in art. 1 sec. 3 point 11 of the aforementioned act.
In accordance with a resolution by the Supervisory Board, for rendering management services and discharging other obligations ensuing from the contract, the Manager is entitled to Total Compensation consisting of the following:
- base remuneration (Fixed Remuneration) for a calendar month:
- for President of the Management Board - PLN 60 000.00,
- for other members of the Management Board - PLN 50 000.00.
Fixed Remuneration also includes remuneration for transferring ownership rights to a copy of a work and economic copyright to a work for uses specified in the contract, granting all permits and authorisations within the scope specified in the contract, and the Company's use of an invention, utility model or industrial design created by the Manager, - supplementary compensation for a given financial year (Variable Compensation) contingent on progress in achieving management objectives, which may not exceed 100% of annual Fixed Compensation in the preceding financial year, for which the amount of Variable Compensation is calculated.
Fixed Remuneration or Variable Remuneration will be paid by the Company in an amount resulting from the withholding of the Manager's public-law receivables, the payer of which is the Company, from Fixed Remuneration or Variable Remuneration. If the existing laws so require, despite the fact that the Manager is not self-employed, Fixed Remuneration and Variable Remuneration or severance or non-compete payments will be supplemented will tax on goods and services at the rate in effect each time. This provision will also be applicable to other considerations from the Company for the Manager based on the contract. If the Manager is required to pay VAT for previous periods (in connection with the cash consideration referred to in this section), the Company undertakes to pay to the Manager an amount equivalent to such tax arrears together with interest and other fees due for relevant authorities in connection with such arrears.
Fixed Remuneration for a given month is paid by the Company within 7 days from delivery to the Company of a correctly issued bill, which will be delivered to the Company by the Manager within 7 days from the end of the calendar month in which services are performed, by bank transfer to an account indicated by the Manager.
Variable Remuneration depends on the achievement of management objectives and may not exceed PLN 480 000.00 per financial year, i.e. no more than PLN 40 000.00 per each month of a financial year. If the Manager performs the contract for a period of less than 1 full financial year but at least for 3 months in the relevant financial year, Variable Compensation will be calculated on a pro rata basis. The pro rata calculation will depend on the number of days of the Manager’s provision of the services in the relevant financial year.
The Manager's total annual remuneration (the sum of Fixed Remuneration and Variable Remuneration for a given financial year) may not exceed the product of PLN 100 000.00 and the number of months in which the Manager performed his/her duties. In the case of calendar months in which the Manager did not perform his/her duties for a full calendar month, the amount of PLN 100 000.00 is adjusted proportionally to the number of days in which the Manager performed his/her functions in that month.
The maximum amount of Variable Compensation for a given financial year, Management Objectives for a given financial year and the method of evaluating their achievement are defined (to the extent consistent with the General Meeting's resolution concerning remuneration) by the Supervisory Board. A general set of Management Objectives is outlined in a resolution adopted by the General Meeting, and the Supervisory Board is authorised by the General Meeting to define them precisely, assign weights to such objectives and define objective and measurable criteria of their achievement and settlement.
Variable Remuneration is paid on the condition that the Manager achieves the Management Objectives in compliance with the relevant Supervisory Board resolution, after approval of the Management Board report on JSW's operations and JSW's financial statements for the previous financial year and a grant of a vote of confidence for the Manager by the General Meeting, on the terms specified in the contract.
Variable Compensation, provided that it is due, is paid within 7 days from delivery to the Parent of a correctly issued bill by transfer to a bank account indicated by the Manager.
The Parent will be entitled to put forward a claim for reimbursement of Variable Compensation if, following such disbursement, it becomes apparent that Variable Compensation was granted to the Manager on the basis of data that subsequently turned out to be untrue.
If the Supervisory Board resolution specifying the Management Objectives for a given year is not adopted, then the Management Objectives for that year are not set and the Manager is not entitled to Variable Remuneration. Moreover, in cases specified in the contract, JSW may impose a contractual penalty on the Manager.
Table. Management Board Remuneration for 2019 (in PLN)
| FIRST AND LAST NAME | PERIOD | REMUNERATION | MANAGEMENT SERVICES* | VARIABLE REMUNERATION FOR 2019** | CONSIDERATIONS, OTHER INCOME*** | INCOME FROM SUBSIDIARIES | TOTAL |
|---|---|---|---|---|---|---|---|
| Włodzimierz Hereźniak | 01.08.-31.12.2019 | - | 300,000.00 | - | - | - | 300,000.00 |
| Artur Dyczko | 01.01.-10.01.2019 04.07.-31.12.2019 | - | 313,333.34 | - | 150,000.00 | - | 463,333.34 |
| Rafał Pasieka | 04.07.-31.12.2019 | - | 296,666.67 | - | - | - | 296,666.67 |
| Radosław Załoziński | 04.07.-31.12.2019 | - | 296,666.67 | - | - | - | 296,666.67 |
| Artur Wojtków | 01.01.-31.12.2019 | - | 601,666.67 | - | - | - | 601,666.67 |
| Tomasz Śledź | 01.01.-18.12.2019 | - | 581,666.67 | - | 175,000.00 | - | 756,666.67 |
| Daniel Ozon | 01.01.-11.06.2019 | - | 322,000.00 | - | 360,000.00 | - | 682,000.00 |
| Robert Ostrowski | 01.01.-28.02.2019 | - | 100,000.00 | - | - | - | 100,000.00 |
| Jolanta Gruszka | 01.01.-10.01.2019 | - | 16,666.67 | - | 300,000.00 | - | 316,666.67 |
| TOTAL | - | 2,828,666.69 | - | 985,000.00 | - | 3,813,666.69 |
**This item includes variable remuneration for 2019, which depends on KPIs, on the condition that the Company generates a profit.
***This item includes considerations after the management contract expires with regard to management (severance, non-compete compensation).
Table. Remuneration for Supervirosry Board Member delegated to temporarily serve as deputy President of the Management Board in 2019 (in PLN)
| FIRST AND LAST NAME | PERIOD | REMUNERATION* | MANAGEMENT SERVICES | VARIABLE REMUNERATION | CONSIDERATIONS, OTHER INCOME | INCOME FROM SUBSIDIARIES | TOTAL |
|---|---|---|---|---|---|---|---|
| Robert Małłek | 27.02.-26.05.2019 28.05.-03.07.2019 | 206,797.23 | - | - | - | - | 206,797.23 |
| TOTAL | 206,797.23 | - | - | - | - | 206,797.23 |
Variable remuneration for 2018 recognised as cost in 2019 was paid in January 2020, in total amounting to PLN 1 209 490.84, for:
- Mr. Robert Ostrowski PLN 302 372.71,
- Mr. Tomasz Śledź PLN 302 372.71,
- Mr. Artur Dyczko PLN 302 372.71,
- Mrs. Jolanta Gruszka PLN 302 372.71.
Variable remuneration for 2018 of PLN 302 372.71 was awarded to Mr. Artur Wojtków through a Supervisory Board decision, however it was not paid because no bank account information was provided to the Company.
Table. Management Board remuneration for 2018 (in PLN)
| FIRST AND LAST NAME | PERIOD | REMUNERATION | MANAGEMENT SERVICES* | VARIABLE REMUNERATION FOR 2018** | CONSIDERATIONS, OTHER INCOME*** | INCOME FROM SUBSIDIARIES | TOTAL |
|---|---|---|---|---|---|---|---|
| Daniel Ozon | 01.01.-31.12.2018 | - | 720,000.00 | - | - | - | 720,000.00 |
| Artur Dyczko | 01.01.-31.12.2018 | - | 600,000.00 | - | - | - | 600,000.00 |
| Tomasz Śledź | 01.01.-31.12.2018 | - | 600,000.00 | - | - | - | 600,000.00 |
| Robert Ostrowski | 01.01.-31.12.2018 | - | 600,000.00 | - | - | - | 600,000.00 |
| Jolanta Gruszka | 01.01.-31.12.2018 | - | 600,000.00 | - | - | - | 600,000.00 |
| Artur Wojtków | 01.01.-31.12.2018 | - | 600,000.00 | - | - | - | 600,000.00 |
| RAZEM | - | 3,720,000.00 | - | - | - | 3,720,000.00 |
**This item includes variable remuneration, which depends on KPIs. Until the date on which the financial statements for 2018 were prepared, the Supervisory Board had not adopted a resolution on the achievement of management objectives and the amount of variable remuneration for 2018.
***This item includes considerations after the management contract expires with regard to management (notice period compensation, severance, non-compete compensation).
In the period until 3 July 2019, in accordance with the contracts signed with Management Board Members, the following regulations concerning compensation for resigning, dismissal or removal were in place:
- Each of the Parties had the right to terminate the contract effective immediately in the event of a material breach by the Other party of contractual provisions, including if the Manager failed to obtain Supervisory Board consent for his/her planned appointment to an organ of another commercial company, for the purchase of shares in another commercial company, performance of work or services for other entities on the basis of an employment contract, contract of mandate or another legal relation, with at least a 14-day notice period prior to the event, including especially when:
a) the Manager commits a crime that is confirmed with a final court ruling, preventing him/her from performing his/her obligations resulting from the contract,
b) the Manager exposes JSW to losses through a documented intentional act, omission or negligence,
c) the Manager loses the ability to serve on the management boards of commercial-law companies as a result of events specified in commonly applicable laws, especially in the Polish Commercial Companies Code and the Act on rules for managing state assets,
d) for no justified reason, JSW was in arrears on payment of remuneration for a period longer than 2 months. - Each of the Parties has the right to terminate the contract for reasons other than those above with:
a) a 1-month notice period if the Manager has been serving for a period shorter than 12 months, effective from the end of the calendar month,
b) a 3-month notice period if the Manager has been serving for a period of at least 12 months, subject to the contract.
The Parties' statements of intent concerning termination of the contract had to be submitted in written form in order to be effective. - In the event of a contract termination, the Manager was required to transfer his/her responsibilities to an authorised person or persons, including in person at the Company's request to provide essential explanations, reliably provide information, documents and subjects related to the performance of agreements, in accordance with the Company's procedures.
- In the event of a change in the Manager's function on the Management Board during the term of his/her contract, the Parties were required to execute an annex in order to adapt the contract to the Manager's new function.
In the case of a contract being terminated by JSW for reasons other than those specified in point 1 above, the Manager was entitled to a severance payment equal to three times the amount of Fixed Remuneration, on the condition that the Manager performed his/her function for a period of at least 12 months prior to contract termination. The severance payment was not due in the following cases:
- termination or amendment of the contract as a result of a change in the Manager's function on the Management Board,
- termination or amendment of the contract as a result of the Manager being appointed for another term of the Management Board,
- being appointed as management board member at a Group company,
- resignation from the function.
The severance payment was to be paid within 7 days from delivery to JSW of a correctly issued bill, to a bank account indicated by the Manager.
In 2019, annexes to contracts with Management Board Members were executed, which:
- introduced a provision stating that if the Manager undertakes, within a year after his/her mandate expired, work based on any legal relation at the Company or at another Group entity, he/she will be required to return the severance payment within 7 days from the beginning of such work,
- established that the Supervisory Board will pass a resolution by 31 December 2019 regarding achievement of the Management Objectives and the amount of Variable Remuneration due for financial year 2017 and 2018..
In the period from 4 July 2019, in accordance with the contracts signed with Management Board Members, the following regulations concerning compensation for resigning, dismissal or removal are in place:
Each of the Parties has the right to terminate the contract effective immediately if the other Party materially breaches the contract, and especially when:
- the Manager commits a crime that is confirmed with a final court ruling, preventing him/her from performing the obligations resulting from the contract,
- the Manager exposes JSW to losses through a documented intentional act, omission or negligence,
- the Manager breaches his/her contractual responsibilities,
- for no justified reason, JSW is in arrears on payment of remuneration for a period longer than 2 months.
Each of the Parties has the right to terminate the contract for reasons other than those above with a 3-month notice period, subject to the provisions of the contract. The Parties' statements of intent concerning termination of the contract must be in written form in order to be effective.
In the event of a contract termination, the Manager is required to transfer his/her responsibilities to an authorised person or persons, including in person at the Company's request, to provide essential explanations, reliably provide information, documents and subjects related to the performance of agreements, in accordance with JSW's procedures.
In the event of a change in the Manager's function on the Management Board during the term of his/her contract or organisational changes resulting in a change in the Manager's remuneration, the Parties undertake to execute an annex in order to adapt the contract to the Manager's new function, unless they agree otherwise.
Terminating a contract does not invalidate any provisions that address the Parties' mutual rights and obligations after the contract is terminated. If the contract is terminated or notice is served by JSW for reasons other than the Manager's breach of the basic contractual obligations, the Manager is entitled to a severance payment amounting to 3 times the Fixed Remuneration, on the condition that the Manager performed his/her function for at least 12 months prior to the contract being terminated. The severance payment referred to above is not available in the following cases:
- termination or amendment of the contract as a result of a change in the Manager's function on the Management Board,
- termination or amendment of the contract as a result of the Manager being appointed for another term of the Management Board,
- being appointed as management board member at a Group company in the meaning of art. 4 point 14 of the Act of 16 February 2007 on competition and consumer protection or the provision - based on an employment contract, contract of mandate, task-specific contract or on another basis - of work or services for such a company,
- resignation from the function.
If the Manager undertakes, within a year after his/her mandate expires, work based on any legal relation at JSW or any other Group entity, he/she is required to return the severance payment within 7 days from the beginning of such work.
Remuneration system for management board members at Group companies
Rules for remunerating members of Group companies' Management Boards are set in resolutions by the General Meeting or Shareholders' Meeting and then in resolutions by the Supervisory Boards in accordance with the Act of 9 June 2016 on rules for remunerating persons managing certain companies. Overall remuneration for Management Board Members consists of a fixed part, constituting a monthly base salary, and a variable part, constituting supplementary remuneration in a given financial year. The variable part is dependent on progress in achieving management objectives. Management contracts have been executed with members of the management boards of JSW's subsidiaries. From 12 August 2019, the Group applies JSW Group's Remuneration Policy, which addresses remuneration for management board members at Group companies, among other things.
Non-compete clause
The following non-compete provisions were in place until 3 July 2019:
Management contracts include a non-compete clause for the contractual term, and the Managers are not entitled to any additional remuneration for refraining from competing activities. Management contracts signed with Management Board Members also include non-compete provisions applicable after the contract is terminated.
The Manager undertakes, after the contract is terminated, if he/she has performed the function for a period of at least 6 months from the date of the Manager’s appointment to JSW's Management Board, not to conduct any competing activity, as defined in the contract, over the period of 6 months from the date he/she ceases to perform his/her function. The Manager is entitled to compensation for complying with the non-compete clause after the function ends, in a total amount equal to 0.5 times the monthly Fixed Compensation x 6. This compensation will be payable in 6 monthly instalments, each by the 10th day of the following month. The compensation payment is conditional upon a written representation of the Manager confirming compliance with the non-compete clause after the function ended, delivered to JSW in writing by the 5th day of the month following the month for which compensation is due.
The non-compete clause after the function ends does not apply if, before the end of the term of the clause, the Manager undertakes a function at JSW or at a subsidiary within the Group. In such a case, the right to compensation expires on the day the Manager takes up the function.
A management contract may be terminated in the part concerning the non-compete clause at any time by virtue of an agreement of the parties or by JSW with a 1-month notice period. The agreement and the termination notice must be in writing in order to be effective. The contract ceases being in force if JSW fails to comply with its duty to pay the compensation, on the date that the payment term for this compensation instalment to which JSW’s delay refers lapses. The contract in the part concerning the non-compete clause may be also terminated with immediate effect at any time upon a written notice submitted by JSW in the event of a gross violation of the non-compete clause by the Manager after his/her function ends. If the non-compete clause ends in the event of contract termination, the compensation is due and payable in appropriate proportion.
If the non-compete clause is breached while still in force but after the function ends, the clause ceases to be in force and JSW has the right to demand the payment of a contractual penalty from the Manager in the amount of 100% of the compensation within 14 days of receipt of JSW’s summons by the Manager. The payment of this contractual penalty does not preclude JSW’s right to seek damages in excess of the contractual penalty on general terms.
The following non-compete provisions are in place from 4 July 2019:
Management contracts include a non-compete clause for the contractual term, and the Managers are not entitled to any additional remuneration for refraining from competing activities during the term of the contract. Management contracts executed with Management Board Members also contain a non-compete clause that applies after they are terminated.
The Manager undertakes, after the contract is terminated, if he/she has performed the function for a period of at least 6 months from the date of the Manager’s appointment to the Company's Management Board, not to conduct any competing activity, as defined in the contract, over the period of 6 months from the date he/she ceases to perform his/her function. The Manager is entitled to compensation for complying with the non-compete clause after the function ends, in a total amount equal to 6 times 50% of monthly Fixed Remuneration. This compensation is payable in 6 equal instalments, by the 10th day of the following month. The compensation payment is conditional upon a written representation of the Manager confirming compliance with the non-compete clause after the function ended, delivered to the Company in writing by the 5th day of the month following the month for which compensation is due.
A management contract may be terminated in the part concerning the non-compete clause at any time by virtue of an agreement between the Parties. This agreement must be in writing in order to be effective and must specify the contract termination deadline, which cannot be longer than 3 months or later than the end of the non-compete period following the end of function. In such a case, the entitlement to compensation expires when the contract is terminated. The part of the contract concerning the non-compete clause may also be terminated with immediate effect at any time upon a written notice submitted by the Company in the event of a gross violation of the non-compete clause by the Manager after his/her function ends. A notice of contract termination must be in writing in order to be valid, and the right to compensation expires on the date the notice of termination of the non-compete clause, after the function ends with immediate effect, is delivered to the Manager.
If the non-compete clause expires after the function ends and if the contract is terminated in accordance with rules specified in the contract, the monthly compensation instalment due for that month is reduced by an amount resulting from dividing the monthly compensation instalment by 30 days and multiplying this by the number of days in which the non-compete clause was in effect during that month.
The non-compete clause after the function ends does not apply if, before the end of the term of the clause, the Manager undertakes a function at the Company referred to in art. 1 sec. 3 point 7 of the Act of 9 June 2016 on rules for remunerating persons managing certain companies, or a subsidiary of the Company within the Group within the meaning of art. 4 point 14 of the Act of 16 February 2007 on competition and consumer protection, or begins providing work or services - on the basis of an employment contract, contract of mandate, task-specific contract or another basis - to such a company. In this case, the right to compensation expires on the day such work or services for that company begin.
If the non-compete clause is breached while it is still in force but after the function ends (taking up work as described above is not considered a breach, provided that the Company is notified beforehand), the clause ceases to be in force and the Company has the right to demand the payment of a contractual penalty from the Manager in the amount of 100% of the compensation within 14 days of receipt of the Company's summons by the Manager, to an account indicated by the Company. The payment of this contractual penalty does not waive the Company's right to seek damages in excess of the contractual penalty on general terms.
NON-COMPETE CLAUSE FOR MANAGEMENT PERSONNEL AT GROUP COMPANIES
The management contracts include a non-compete clause for the period in which the Management Board Member at a Group subsidiary provides management services. The Manager is not entitled to any additional remuneration for refraining from competing activities. The management contracts executed with Management Board Members at companies also contain a non-compete clause that applies after they are terminated. Non-compete provisions in these management contracts are in compliance with the Act of 9 June 2016 on rules for remunerating persons managing certain companies and with resolutions adopted by the General Meetings/Shareholders' Meetings at Group companies concerning remuneration rules for Management Board Members.
INFORMATION ON PENSION AND SIMILAR LIABILITIES CONCERNING FORMER MANAGEMENT AND SUPERVISORY PERSONNEL
The management contracts executed with Members of JSW's Management Board and Members of Group companies' Management Boards do not contain provisions relating to pension and similar liabilities.
Supervisory Board competences
The Supervisory Board works on the basis of legislation, Articles of Association, Polish Commercial Companies Code and Supervisory Board Regulations, which are adopted by the Supervisory Board. The Supervisory Board exercises permanent supervision over the Company’s activity and performs its duties as a collective body, however it may delegate its Members to carry out specific supervisory and controlling activities individually. Supervisory Board members exercise their rights and perform their duties in person.
The competences of the Supervisory Board are set forth in the Company's Articles of Association. In its activities, the Supervisory Board follows the guidelines of the Prime Minister contained in a document entitled Principles of Ownership Supervision over Companies with State Treasury Shareholding, and rules included in Best Practices for WSE-Listed Companies. The powers of the Supervisory Board include giving consent to the Management Board for:
- setting up another company, subscribing for, purchasing or selling shares in other companies, with the stipulation that the Supervisory Board’s consent referred to in this item 1 is not required for the following:
a) taking up and acquiring shares in another company for an amount lower than 1/10 of such company’s share capital,
b) selling shares in another company in which the Company holds less than a 1/10 share in share capital,
c) taking up or acquiring shares in another company in return for the Company's receivables as part of composition or settlement proceedings,
d) selling shares acquired or taken up by the Company in return for the Company's receivables as part of composition or settlement proceedings,
e) subscribing for, purchasing or selling shares in another company listed on a regulated market, unless the value of such shares exceeds PLN 20 million, - establishing foreign branches,
- purchasing and selling tangible assets the value of which exceeds PLN 20 million,
- contracting contingent liabilities, including issue by the Company of financial guarantees and sureties the value of which exceeds PLN 20 million,
- paying interim dividends,
- issuing promissory notes the value of which exceeds PLN 20 million,
- purchasing and selling real estate or rights to perpetual usufruct or a share in real estate or in a right to perpetual usufruct the value of which exceeds PLN 20 million,
- disposing of non-current assets within the meaning of the Accounting Act of 29 September 1994, classified as intangible assets, property, plant and equipment or long-term investments, including contributions made to a company or cooperative, if the market value of such assets exceeds PLN 20 million or 5% of total assets within the meaning of the Accounting Act, determined on the basis of the most recent approved financial statements, and delivery of such assets for use to another entity, for a period longer than 180 days in a calendar year, on the basis of a legal transaction, if the market value of the subject matter of such transaction exceeds PLN 500 000 or 5% of total assets, with delivery for use in the case of:
a) rental, lease and other agreements for the provision of an asset for non-gratuitous use by other entities – the market value of the subject matter of the legal transaction is construed as the value of benefits for:
- one year – if the provision of the asset was effected under an agreement entered into for an indefinite term,
- entire term of the agreement – in the case of agreements entered into for a definite term,
b) loan-for-use and other gratuitous agreements for the provision of an asset for use by other entities –the market value of the subject matter of the legal transaction is construed as the equivalent of benefits that would be due in the event of the execution of a rental or lease agreement for:
- one year – if the delivery of the asset takes place on the basis of an agreement entered into for an indefinite term,
- entire term of the agreement – in the case of agreements entered into for a definite term, - purchasing non-current assets within the meaning of the Accounting Act of 29 September 1994, with value exceeding: a) PLN 20 million, or b) 5% of total assets within the meaning of the Accounting Act of 29 September 1994, determined on the basis of the most recent approved financial statements,
- subscribing for or purchasing shares of another company with value exceeding: a) PLN 20 million, or b) 10% of total assets within the meaning of the Accounting Act of 29 September 1994, determined on the basis of the most recent approved financial statements,
- disposing of shares in another company with value exceeding:
a) PLN 20 million, or
b) 10% of total assets within the meaning of the Accounting Act of 29 September 1994, determined on the basis of the most recent approved financial statements, - voting instructions for the General Meetings or Shareholders' Meetings of companies in which the Company holds at least 50% of all shares, in the following matters:
a) the company setting up another company,
b) amending the company’s articles of association or articles of partnership and the company’s line of business,
c) merger, transformation, demerger, dissolution or liquidation of the company,
d) increase or decrease of the company’s share capital,
e) sale or lease of the company’s business or an organised part thereof or establishment of a limited right in rem thereon,
f) purchase and sale of real estate or right to perpetual usufruct or interest in real estate or in a right to perpetual usufruct, their encumbrance, lease and release for use against payment or free of charge, if their value exceeds 1/10 of that company’s share capital,
g) purchase, sale, encumbrance, lease and release for use against payment or free of charge of non-current assets other than those listed in the previous sub-item, if their value exceeds 1/10 of that company’s share capital, excluding companies in which share capital is lower than PLN 5 million,
h) the company entering into a credit facility, loan agreement, guarantee agreement or some other similar agreement, if its value exceeds 1/10 of the company’s share capital but no less than PLN 5 million,
i) issue of any type of bonds,
j) purchase of treasury shares in the situation set forth in art. 362 § 1 item 2 of the Polish Commercial Companies Code and purchase of shares in the situation defined in art. 200 § 1 of the Polish Commercial Companies Code,
k) compulsory redemption of shares pursuant to art. 418 of the Polish Commercial Companies Code,
l) cancellation of shares,
m) decisions on claims to remedy damages incurred when setting up a company or in its management or oversight, n) contribution of non-current assets by the company as contribution in a company or a cooperative if their value exceeds 1/10 of that company’s share capital,
o) setting the compensation of members of management boards and supervisory boards,
p) in the matters referred to in art 17 sec. 17 of the Act on rules for managing state assets of 16 December 2016 (Polish Journal of Laws of 2016, item 2259), subject to § 30 sec. 6,
r) concerning changes in the supervisory boards of Group companies as regards Company representatives. - concluding agreements on legal services, marketing services, public relations and social communication services and management consulting services, if the total fee envisaged for the services within this contract or other contracts executed with the same entity exceeds PLN 500 000 net per year,
- concluding agreements on legal services, marketing services, public relations and social communication services and management consulting services, increasing the fees referred to in point 13,
- concluding agreements on legal services, marketing services, public relations and social communication services and management consulting services, the value of which is not specified,
- concluding a donation agreement or other agreement with similar effect, with value exceeding PLN 20 000 or 0.1% of total assets within the meaning of the Accounting Act of 29 September 1994, determined on the basis of the most recent approved financial statements,
- releasing debt or other agreement with similar effect, with value exceeding PLN 50 000 or 0.1% of total assets within the meaning of the Accounting Act of 29 September 1994, determined on the basis of the most recent approved financial statements.
Supervisory Board Authorisations
The Supervisory Board's authorisations include in particular:
- approving the Management Board Regulations and issuing an opinion on the Organisational Regulations defining the organisation of the Company’s enterprise,
- appointing and dismissing members of the Company’s Management Board, without prejudice to § 11 sec. 5 of the Articles of Association,
- suspending a Management Board member or the entire Management Board from performing its duties for important reasons by secret ballot,
- delegating any Supervisory Board member or members to temporarily perform the duties of those Management Board members who are unable to perform their functions,
- signing, terminating and amending agreements with Management Board Members, establishing rules for hiring and remunerating them and setting their remuneration, without prejudice to the powers of the Company’s General Meeting arising from the mandatory provisions of law,
- selecting an audit firm to audit the financial statements referred to in points 7 and 8 below,
- evaluating financial statements in terms of their compliance with ledgers and documents and with the facts,
- evaluating the Management Board report on the Company’s activities and the Management Board’s motions on the distribution of profit or coverage of loss,
- submitting written reports on the results of the activities referred to in items 7 and 8 above to the General Meeting,
- submitting to the General Meeting a concise annual evaluation of the Company’s standing, including an assessment of its internal audit system and risk management system, along with an annual report on Supervisory Board’s work;
- providing opinions on matters submitted to the General Meeting,
- approving the Company’s operational strategy,
- providing opinions on the Company's annual plans,
- approving regulations for the internal control system,
- receiving Management Board reports on representation expenses, expenses on legal services, marketing services, public relations and social communication services and management consulting services, and on the application of the good practices referred to in art. 7 sec. 3 of the Act on rules for managing state assets of 16 December 2016,
- providing opinions on changes in rules for selling non-current assets, specified in § 291 of the Articles of Association,
- approving the Group's remuneration policy,
- issuing opinions on rules for sponsoring activity conducted by the Company and evaluating the effectiveness of such sponsoring activity.
The Supervisory Board's authorisations, competences and responsibilities, aside from the matters reserved by law and the Articles of Association, also include the preparation of annual reports submitted to the Ordinary General Meeting in accordance with Good Practices for WSE-Listed Companies 2016.
Rules for appointing and dismissing Supervisory Board Members
In accordance with the Company's Articles of Association, the Supervisory Board consists of at least six members. The General Meeting has set the number of Supervisory Board members at 12 persons. The Chairperson, Deputy Chairperson and Secretary are elected from among Supervisory Board members and are dismissed in a secret ballot.
Supervisory Board members exercise their rights and perform their duties in person. They are appointed for a joint three-year term. If Supervisory Board members are elected by way of separate group voting, the number of Supervisory Board members is set by the General Meeting in gremio; however, in such a situation the Supervisory Board may consist of at least five members. The mandate of a Supervisory Board member appointed before the end of the term of office of the Supervisory Board expires simultaneously with the mandates of the remaining Supervisory Board members.
The State Treasury appoints and dismisses its Supervisory Board members by way of a statement delivered to the Company.
Since the date of introduction of the Company's shares to trade on a regulated market, in a period during which the State Treasury, including subsidiaries of the State Treasury, holds the Company's shares carrying voting rights of at least 34% of the total number of votes in the Company plus one vote, the State Treasury is entitled to appoint and dismiss Supervisory Board Members in a number equal to half of the total number of Supervisory Board members set by the General Meeting (in the event this number is fractional, it is rounded down to a whole number) plus one, with the reservation that the State Treasury is excluded from General Meeting votes on appointing or dismissing the remaining Supervisory Board Members; however, the State Treasury retains the voting right in the event of electing Supervisory Board Members by voting in separate groups and in the event of the votes referred to in art. 385 § 6 of the Polish Commercial Companies Code as well as in the event of votes on appointing or dismissing Supervisory Board Members elected by employees and in the event the Supervisory Board is unable to act because the number of its members is smaller than that required by the Articles of Association and the shareholders present at the General Meeting, other than the State Treasury, fail to supplement the composition of the Supervisory Board in the part which is subject to election by the General Meeting. The State Treasury appoints and dismisses its Supervisory Board members by way of a statement delivered to the Company.
Requirements for candidates for the Company’s Supervisory Board Members are described in the Act on rules for managing state assets.
Supervisory Board Members elected by JSW employees
In accordance with the Articles of Association, the Company's employees and the employees of all of its subsidiaries have the right to elect to the Supervisory Board: two members in a Supervisory Board composed of up to 6 members, three members in a Supervisory Board composed of between 7 and 10 members and four members in a Supervisory Board composed of 11 or more members.
The Supervisory Board calls an election of Supervisory Board members to be elected by the Company's employees and the employees of all of its subsidiaries for the next term within two months from the lapse of the last full year of their term of office.
At the written request of at least 15% of the Company's employees and the employees of all of its subsidiaries, a vote is held in the matter of dismissing a Supervisory Board member elected by the employees. Voting rules are set by regulations adopted by the Supervisory Board. Such dismissal, death or any other important reason that decreases the number of Supervisory Board members elected by employees requires supplementary elections. Except for situations specified in the Articles of Association, Supervisory Board members are appointed and dismissed by the General Meeting. Supervisory Board members submit resignations in writing to the Management Board, addressed to the Company's registered office.
Independence criterion
In a Supervisory Board consisting of up to 12 members - at least one, and in a Supervisory Board consisting of 13 or more members - at least two Supervisory Board members should meet the requirements for an independent supervisory board member in the meaning of Commission Recommendation of 15 February 2005 on the role of non-executive or supervisory directors of listed companies and on the committees of the (supervisory) board (2005/162/EC), taking into account additional requirements stemming from Good Practices for WSE-Listed Companies.
A candidate to be an independent Supervisory Board member submits to the Company, before his/her appointment to the Supervisory Board, a written representation on satisfying the prerequisites for independence. If a situation arises causing failure to satisfy the prerequisites for independence, the relevant Supervisory Board member promptly informs the Company about this fact. Information about the then current number of independent Supervisory Board members is made public by the Company.
In a situation when no Supervisory Board member meets the independence requirement, the Company’s Management Board is obligated to convene a General Meeting immediately and place an item on the agenda concerning changes in the composition of the Supervisory Board. Until changes to the Supervisory Board composition are made, aiming at adjusting the number of independent members of the Supervisory Board to the requirements prescribed in the Articles of Association, the Supervisory Board acts in the previous composition.
No Supervisory Board member may perform any activities contradicting his/her duties or potentially leading to a suspicion of partiality or pursuit of self-interest.
Supervisory Board Composition
Table. During the financial year, the Supervisory Board, 10th term, was composed as follows:
| FIRST AND LAST NAME | POSITION | TERM OF OFFICE |
|---|---|---|
| Halina Buk | Chairperson | 01.01.2019 – 31.12.2019 |
| Tomasz Lis | Member | 01.01.2019 – 20.03.2019 |
| Antoni Malinowski | Member | 01.01.2019 – 04.07.2019 |
| Alojzy Nowak | Member | 01.01.2019 – 31.12.2019 |
| Adam Pawlicki | Member | 01.01.2019 – 04.07.2019 |
| Konrad Balcerski | Member | 01.01.2019 – 31.12.2019 |
| Jolanta Górska | Member | 20.03.2019 – 31.12.2019 |
| Stanisław Prusek | Member | 04.07.2019 – 31.12.2019 |
| Robert Tomanek | Member | 04.07.2019 – 31.12.2019 |
| Izabela Jonek - Kowalska | Member | 10.09.2019 – 31.12.2019 |
| Robert Małłek |
Member |
17.01.2019 – 09.08.2019 |
|
Delegated to temporarily serve as Deputy President of the Management Board for Strategy and Development |
27.02.2019 – 26.05.2019, 28.05.2019 – 11.06.2019 | |
|
Delegated to temporarily serve as Deputy President of the Management Board for Strategy and Development, appointed as President of the Management Board |
11.06.2019 – 03.07.2019 | |
| Supervisory Board members elected by employees | ||
| Robert Kudelski | Secretary | 01.01.2019 – 31.12.2019 |
| Paweł Bieszczad | Member | 01.01.2019 – 31.12.2019 |
| Tadeusz Kubiczek | Member | 01.01.2019 – 31.12.2019 |
| Arkadiusz Wypych | Member | 01.01.2019 – 31.12.2019 |
Changes in JSW's Supervisory Board in 2019
- On 17 January 2019, the Energy Minister appointed Mr. Robert Małłek to the Supervisory Board through a statement submitted to JSW.
- On 26 February 2019, the Supervisory Board adopted a resolution to delegate Mr. Robert Małłek to temporarily serve as Deputy President of the Management Board for Strategy and Development from 27 February 2019 to 26 May 2019 inclusively, however not later than the date on which a Deputy President of the Management Board for Strategy and Development is appointed.
- On 20 March 2019, the Energy Minister, through a statement submitted to JSW:
- dismissed Mr. Tomasz Lis from the Supervisory Board,
- appointed Mrs. Jolanta Górska to the Supervisory Board. - On 27 May 2019, the Supervisory Board adopted a resolution to delegate Mr. Robert Małłek to temporarily serve as Deputy President of the Management Board for Strategy and Development from 28 May 2019 to the date of the Ordinary General Meeting approving JSW's financial statements for 2018, however no later than 31 July 2019.
- On 11 June 2019, JSW's Supervisory Board appointed Supervisory Board Member Robert Małłek, who had been delegated to temporarily serve as Deputy President of the Management Board for Strategy and Development, as President of the Management Board.
- On 4 July 2019, Mr. Adam Pawlicki resigned as Supervisory Board Member.
- On 4 July 2019, the Energy Minister, through a statement submitted to JSW:
- dismissed Mr. Antoni Malinowski from the Supervisory Board,
- appointed Mr. Stanisław Prusek and Mr. Robert Tomanek to the Supervisory Board. - On 9 August 2019, Mr. Robert Małłek resigned as Supervisory Board Member.
- On 10 September 2019, the Energy Minister appointed Mrs. Izabella Jonek-Kowalska to the Supervisory Board through a statement submitted to JSW.
Changes in composition of JSW's Supervisory Board after the reporting period
- On 20 January 2020, Mr. Robert Tomanek resigned as Supervisory Board Member, effective from 21 January 2020.
Table. Composition of 10th term Supervisory Board at publication of this report
| JSW SUPERVISORY BOARD MEMBERS | |
|---|---|
|
HALINA BUK Position: Chairperson of the Supervisory Board Represents: State Treasury |
Economics professor at the University of Economics in Katowice. Specialist, researcher and practitioner in the fields of corporate accounting and finance. She has authored or co-authored more than 200 published monographs, scientific articles and academic handbooks, as well as tens of scientific, research and commissioned papers on economics, corporate organisation, restructuring programs and financial planning. Academic lecturer at the University of Economics in Katowice and the WSB University in Poznań in MBA, graduate, post-graduate and doctoral courses, on subjects such as financial accounting, management accounting, financial analysis, financial reporting, consolidated reporting, controlling. She has experience in educating young scientists, having promoted 24 PhDs in economics from academia and the business sector. Professor Halina Buk has spent numerous years at the corporate organs of energy companies and has been an economic consultant in dozens of projects implemented at Agencja Rynku Energii S.A., Kompania Węglowa S.A., PGG S.A., Koncern Energetyczny "Energa" S.A., Huta Łabędy S.A., KGHM Polska Miedź S.A. and others. She is the recipient of: Golden Cross of Merit, Silver Cross of Merit twice, Medal of the National Education Commission and Commander’s Cross of the Order of Polonia Restituta. She meets the independence criteria referred to in rule II.Z.4. of Good Practices for WSE-Listed Companies 2016. |
|
ROBERT KUDELSKI Position: Secretary of the Supervisory Board Represents: JSW employees |
At JSW since 1993, he currently works as head of the investments and mine overhaul department at KWK Borynia-Zofiówka-Jastrzębie. He completed the mining secondary school in Jastrzębie-Zdrój with the title of underground mining machinery and equipment technician. Graduated from the Catholic University in Lublin, with a MA degree in management and marketing. He also completed postgraduate studies at the Silesian University of Technology in Gliwice (in public procurement law and corporate project management), University of Silesia in Katowice (in human resources management) and University of Economics in Kraków (MBA). Completed a number of development courses and seminars in areas such: quality management system, public procurement law and controller education program. He has served on the supervisory boards of Centralne Zakłady Automatyki Hutnictwa S.A. in Katowice and Towarzystwo Budownictwa Społecznego “Daszek” Sp. z o.o. in Jastrzębie-Zdrój. He has been a member of JSW's Supervisory Board since 2012, representing its employees. Does not meet the independence criteria referred to in rule II.Z.4. of Good Practices for WSE-Listed Companies 2016. |
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KONRAD BALCERSKI Position: Member of the Supervisory Board Represents: State Treasury |
Graduate of the Faculty of Law and Administration at the University of Warsaw. He is an attorney. He also completed post-graduate studies in audit, financial control and accounting and post-graduate studies in taxes at the Warsaw School of Economics. He has participated in many courses and training sessions in accounting and project management (TenStep Project Management and Prince 2). Mr. Konrad Balcerski has many years of experience in corporate governance in companies with a State Treasury shareholding operating chiefly in the oil and gas sector. He is currently an employee of the Department of Oversight and Ownership Policy at the Ministry of State Assets. Does not meet the independence criteria referred to in rule II.Z.4. of Good Practices for WSE-Listed Companies 2016. |
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IZABELA JONEK - KOWALSKA Position: Member of the Supervisory Board Represents: State Treasury |
Doctor Izabela Jonek-Kowalska, professor at Silesian University of Technology. She is a graduate of the Academy of Economics in Katowice (major in finance and investments). She obtained a PhD in economics, focusing on management science, at the Organisation and Management Faculty of the Silesian University of Technology, and a doctoral degree at the AGH University of Science and Technology, focusing on technical science (mining and engineering geology, specialisation: mining economics). She is currently employed as associate professor at the Organisation and Management Faculty of the Silesian University of Technology, where she also serves as Head of the Economics and IT Faculty and Deputy Dean for Cooperation with Social and Business Sectors. She has been dealing with economics in mining for over a dozen years, delivering projects and expert opinions in cooperation with: Kopex S.A., OT Logistics S.A., DB Schenker Poland, TAURON Wydobycie S.A., Energa S.A., Jastrzębska Spółka Węglowa S.A., Energokrak Sp. z o.o. (currently EDF Paliwa), Polska Technika Górnicza S.A., the former Kompania Węglowa S.A. and Katowicki Holding Węglowy S.A., as well as Deloitte Polska and PricewaterhouseCoopers Polska. She is the author of more than 250 papers on management and economics in mining, published in Polish and international scientific journals. She meets the independence criteria referred to in rule II.Z.4. of Good Practices for WSE-Listed Companies 2016. |
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JOLANTA GÓRSKA Position: Member of the Supervisory Board Represents: State Treasury |
Mrs. Jolanta Górska has a PhD from the Finance Institute at the Finance Academy in Warsaw. She is a graduate of the Finance Academy in Warsaw, majoring in Finance and Banking. She also completed post-graduate study at the Finance Academy in Warsaw, focusing on research methodologies in economic sciences, at the Warsaw University of Technology, focusing on real estate valuation, and at SGGW in Warsaw, focusing on finance and banking. She holds the European Foundation Certificate in Banking, EFCB 3E. She is a qualified valuer and is authorised to carry out valuations for securing banking debt and a certificate confirming qualifications in enterprise valuation. She has passed an exam for supervisory board members at State Treasury companies. She has completed numerous workshops, including in enterprise valuation, fair value measurements, real estate and property rights estimates for treasury and tax purposes, valuations for securing banking debt, valuations of properties located on mineral deposits and many other. Mrs. Jolanta Górska has held executive positions at Agencja Nieruchomości Rolnych and Totalizator Sportowy Sp. z o.o. In 2006-2007 she was a lecturer at a master’s programme in public finance, local finance and tax systems. In 2017, she was a member of the Council for matters involving companies with a State Treasury shareholding and state legal entities. |
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TADEUSZ KUBICZEK Position: Member of the Supervisory Board Represents: JSW employees |
A graduate of the Mining Faculty at the Silesian University of Technology in Gliwice. In 1988, he received the title of mining engineer. In 1999, also at the Silesian University of Technology in Gliwice, he completed post-graduate studies in Personnel Management and Career Advisory. He has been involved in the mining industry since 1988. He gained professional experience as an intern at the Mining Division of the Szczygłowice mine, where he later became Chief Mining Engineer. From 2003, he worked in the Ventilation Division. In 2005, he became Chief Ventilation Engineer - Head of Ventilation Division, a title he still retains. In 2015, he was appointed as member of the Mining Aerology Section at the Mining Committee of the Katowice branch of the Polish Academy of Sciences for the term 2015-2018. He has co-authored publications on identifying and combating natural threats in hard coal mining. |
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ALOJZY NOWAK Position: Member of the Supervisory Board Represents: State Treasury |
Economics professor. He obtained a master’s degree from SGPiS in Warsaw (currently Warsaw School of Economics) and completed studies in Economics at University of Illinois at Urbana - Champaign. He is a graduate in banking, finance and capital markets at University of Exeter in Great Britain. In Antwerp at the Free University of Berlin he studied International Economics at RUCA. He is currently Dean of the Management Faculty at the University of Warsaw. In 2012-2016, he was Prorector for scientific research and cooperation at the University of Warsaw. He gained his knowledge and professional experience working as head of International Business Relations Section at Management Faculty, University of Warsaw, head of National Economy Unit at Management Faculty, University of Warsaw, Director of the European Center at University of Warsaw, Deputy Dean in charge of foreign cooperation at Management Faculty, University of Warsaw. He has been a visiting professor at over a dozen universities around the world. He lectures in France, Great Britain, U.S., Russia, China and Korea. External Reviewer for PhDs at University of Cambridge, Postgraduate School of Management, Grenoble, University of Zululand, South Africa. He has served as: adviser to the Prime Minister, adviser to the Minister of Agriculture, member of NewConnect advisory committee for WSE's Management Board, board member at the National Bank of Poland Foundation, chairperson of the Scientific Council at the National Bank of Poland. He has been a supervisory board member at PTE WARTA S.A., PKO BP S.A., Supervisory Board Chairperson and Deputy Chairperson at EUROLOT S.A. He currently is a Supervisory Board member at PZU S.A. and Bank Millennium S.A. Professor Nowak is dedicated to public-interest activities. He is a member of the "Teraz Polska" Committee, the National Development Council for Poland's President, and President of the Management Board at the Main Academic Sports Association. He has received numerous awards and recognitions, including a prize from the Minister of National Education for a book entitled "European integration. An opportunity for Poland?", a book entitled "Banks and households - dynamics of development" and the Dean's Award for scientific achievements (annually since 1997). He has participated in numerous scientific organisations and programme boards for publications, including as editorial team member for "Foundations of Management," editor in chief for "Journal of Interdisciplinary Economics," "Yearbook on Polish European Studies" and "Mazovia Regional Studies;" member of "Gazeta Bankowa" programme board; reviewer at PWE S.A. in Warsaw. He publishes in Polish, English, German and Russian. In December 2018 he became a member of the Scientific Board of the Institute of New Structural Economics at Peking University. This group of 22 outstanding scientists from all over the world includes 4 Nobel Prize winners in economics. He meets the independence criteria referred to in rule II.Z.4. of Good Practices for WSE-Listed Companies 2016. |
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STANISŁAW PRUSEK Position: Member of the Supervisory Board Represents: State Treasury |
Professor of technical science, graduate of the Mining and Geology Faculty at the Silesian University of Technology. Director of the Central Mining Institute (GIG) since 2015. He began working at GIG in 1991, where in 2003-2015 he served as Head of the Extraction and Mine Support System Technologies Division. He is a renowned expert in mining and engineering geology. In his scientific and research activity, he deals with the underground exploitation of hard coal deposits, particularly with selecting and designing mine support systems, forecasting near-wall walkway deformations and the re-consolidation of goaves. He has published the results of his research in several monographies he authored or co-authored and in approx. 200 publications in renowned domestic and foreign journals. He is the co-author of more than 70 patent and utility model applications, which won numerous awards and recognitions in various national and international competitions. Professor Stanisław Prusek managed GIG teams in many national and international projects, cooperating with research entities in Europe and around the world. He has performed a range of research and service engagements for hard coal mines and mining services firms. Professor Prusek received the Witold Budryk scientific award in 2010 from the 7th Division of the Polish Academy of Sciences. In 2013, he received the A.M. Terpigoriew Medal, an accolade from Ukraine's Education and Science Ministry, and a Gold Medal from the National Mining University in Dniepropetrowsk in 2015. He is a member of the Australasian Institute of Mining and Metallurgy, International Organizing Committee of World Mining Congress and the Council of the Mining Committee at the Polish Academy of Sciences. He serves as Deputy Chairperson of the Committee for Threats in Mining Facilities as regards mine support systems and rockfall threats at the State Mining Authority. He is a visiting professor at the Henna Polytechnic University in China. Does not meet the independence criteria referred to in rule II.Z.4. of Good Practices for WSE-Listed Companies 2016. |
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PAWEŁ BIESZCZAD Position: Member of the Supervisory Board Represents: JSW employees |
Graduate of the AGH University of Science and Technology in Kraków. In 2004, he gained the title of mining engineer majoring in Automation and Robotics. Since 2005 he has been associated with JSW, gaining professional experience initially as an intern in the Power Engineering Department, in the ICT Unit at KWK Pniówek. Currently employed as senior foreman for ICT equipment. He has completed numerous specialist courses and passed an exam for supervisory board members in State Treasury companies. He is also a qualified internal auditor. Does not meet the independence criteria referred to in rule II.Z.4. of Good Practices for WSE-Listed Companies 2016. |
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ARKADIUSZ WYPYCH Position: Member of the Supervisory Board Represents: JSW employees |
Graduate of the Construction Faculty and the Mining and Geology Faculty at the Silesian University of Technology in Gliwice. At this university, he obtained the title of construction engineer and a master’s degree in mining and drilling machines and equipment. From 2007, he has been with JSW, working as inspector in the procurement division at the Material Logistics Facility. In 2008, he was transferred to KWK Zofiówka, where he gained experience as: underground specialist, underground mining technology inspector, supervisor for underground shaft and lift equipment branch. He is currently employed at KWK Borynia-Zofiówka Ruch Zofiówka as shift foreman for the underground shaft and lift equipment branch. He has completed a course for members of supervisory boards and management boards. In 2017 he passed an exam for candidates for members of supervisory bodies before an examination commission at the Prime Minister’s Office. Does not meet the independence criteria referred to in rule II.Z.4. of Good Practices for WSE-Listed Companies 2016. |
Information on independence of Supervirosry Board Members
At the date on which this integrated report was published, the independence requirements specified in Good Practices and in Annex II to Commission Recommendation of 15 February 2005 on the role of non-executive or supervisory directors of listed companies and on the committees of the (supervisory) (2005/162/WE) board were met by four out of nine members of the Supervisory Board.
Supervisory Board Committees
Committees operate on the basis of Regulations adopted by the Supervisory Board. The Supervisory Board elects from amongst its members an audit committee and may also elect other committees. A Supervisory Board member may participate in more than one committee. Committees consist of at least three members, while in the audit committee at least one member must be qualified in accounting or financial audit and be a person who:
- does not hold any shares or other ownership titles in the Company or any related party,
- has not participated during the last 3 years in keeping the Company’s accounting ledgers or preparing the Company’s financial statements while performing financial audit activities in the Company,
- is not a spouse, relative or lineal kin up to the second degree, or a person fostered, in the custody of or under the wardship of a Supervisory Board or Management Board Member or a person conducting financial audit activities in the Company, and did not employ such persons for carrying out financial audit activities.
The following committees operated as part of the Supervisory Board of Jastrzębska Spółka Węglowa S.A. in 2019:
Audit Committee
The committee is an advisory and opinion body. It is appointed to support the Supervisory Board in exercising financial oversight and to provide the Board with reliable information and opinions that allow it to efficiently make correct decisions in the area of financial reporting, internal control and risk management.
The Committee's range of activities includes issuing opinions and providing analysis with regard to information provided by the Management Board in order to assist the Supervisory Board in performing its statutory responsibilities concerning financial reporting, internal control and risk management. The Committee also supervises the process of auditing financial statements and provides recommendations to the Supervisory Board regarding the approval of annual financial statements audited by an auditor.
The Audit Committee is composed of at least three members. At least one Audit Committee member holds expertise and skills in accounting or audit of financial statements.
Most of the Audit Committee's members, including the chairperson, are independent of the Company. Audit Committee members possess expertise and skills in the industry in which the Company operates. This condition is considered as met if at least one Audit Committee member has knowledge and skills in the industry or specific members in relevant areas have knowledge and skills in the industry.
Table. Composition of the Audit Committee at the Supervisory Board, 10th term
| FIRST AND LAST NAME | POSITION | TERM OF OFFICE |
|---|---|---|
| Halina Buk | Chairperson | 01.01.2019 – 31.12.2019 |
| Paweł Bieszczad | Member | 01.01.2019 – 31.12.2019 |
| Robert Kudelski | Member | 01.01.2019 – 31.12.2019 |
| Jolanta Górska | Member | 12.08.2019 – 31.12.2019 |
| Stanisław Prusek | Member | 12.08.2019 – 31.12.2019 |
| Tomasz Lis | Member | 01.01.2019 – 20.03.2019 |
| Adam Pawlicki | Member | 02.04.2019 – 04.07.2019 |
| Antoni Malinowski | Member | 01.01.2019 – 04.07.2019 |
The following members of the Supervisory Board Audit Committee at JSW meet the statutory independence criteria: Halina Buk, Paweł Bieszczad, Robert Kudelski, Stanisław Prusek, Jolanta Górska.
The following member of the Supervisory Board Audit Committee at JSW has knowledge and skills in the area of accounting or auditing financial statements:
- Mrs. Halina Buk
The following members of the Supervisory Board Audit Committee at JSW have knowledge and skills in the mining industry:
- Mr. Paweł Bieszczad,
- Mr. Robert Kudelski,
- Mr. Stanisław Prusek.
The main tasks of the Audit Committee include in particular the following:
- monitoring:
- financial reporting process,
- effectiveness of internal control systems, risk management systems and internal audit, including in the area of financial reporting,
- performance of financial audit activities, in particular audits conducted by an audit firm, taking into account all conclusions and findings of the Audit Supervision Commission resulting from inspections performed in the audit firm, - inspecting and monitoring the independence of the statutory auditor and the audit firm, in particular in cases where the audit firm renders non-audit services for the Company,
- providing information to the Company's Supervisory Board or supervisory or control body about the outcome of audit and explanation of how audit contributed to the integrity of the Company’s financial reporting and what the role of the Audit Committee was in that process,
- assessing the independence of the statutory auditor and expressing consent for the auditor’s provision of permitted non-audit services (at the Company's justified request),
- preparing a policy governing the selection of an audit firm to perform audit,
- preparing a policy governing the provision of permitted non-audit services by the audit firm performing audit, by its related parties and by a member of the audit firm’s network,
- developing a procedure for selecting an audit firm by the Company,
- presenting to the Supervisory Board or another supervisory or control body or the body referred to in art. 66 sec. 4 of the Accounting Act of 29 September 1994 of recommendations on the appointment of statutory auditors or audit firms, in accordance with the said policies,
- submitting recommendations intended to ensure the reliability of the Company’s financial reporting process.
In 2019, the Supervisory Board Audit Committee at JSW held 12 meetings, which were devoted to performance of the Committee's responsibilities.
In the analysed reporting period, the audit firm auditing JSW's financial statements did not provide permitted non-audit services.
The committee submits its findings, stances and recommendations worked out in connection with its functions with due notice to enable the Supervisory Board to immediately take pertinent actions. The committee submits annual written reports on its activity to the Supervisory Board.
A detailed description of the Audit Committee's activities in the past financial year is presented in the Supervisory Board report on operations, filed annually with the General Meeting and published on the website.
Policy and procedure for audit firm selection and policy governing the provision of permitted non-audit services by the audit firm, by its related parties and by member of its networkJSW has in place a “Policy and procedure for audit firm selection and policy governing the provision of permitted non-audit services by the audit firm, by its related parties and by members of its network” (“Policy”) established by the Audit Committee for Jastrzębska Spółka Węglowa S.A. In accordance with the aforementioned policy:
- The Supervisory Board is authorised to select the audit firm to audit the Company’s financial statements, having obtained a recommendation from the Audit Committee.
- The Company is obligated to inform the Polish Financial Supervision Authority that the audit firm to audit the financial statements is selected by JSW's Supervisory Board.
- The Supervisory Board selects the audit firm taking into account the principles of impartiality and independence of statutory auditors.
- The Supervisory Board, selecting the audit firm, and the Audit Committee, when preparing proposal requirements and then recommendations, follow the following criteria:
- required workload of the statutory auditor,
- knowledge of the industry and the existing experience of the audit firm in auditing the financial statements of companies with a similar business profile (underground mining and coking industry),
- knowledge of the specificity of State Treasury companies,
- composition of the audit team, in particular in terms of the optimal proportions of statutory auditors and their assistants on the team, taking into account the specificity of the Company,
- professional qualifications and experience of persons directly involved in the audit,
- reputation of the audit firm in financial markets,
- price proposed by the audit firm,
- confirmation of the independence of the audit firm,
- the independent statutory auditor’s mandate quality control policy with regard to auditing statutory entities of public interest. - The audit firm selection procedure should be launched and conducted within time frames allowing the audit firm to participate in an inventory of JSW’s material assets (it is recommended to select the audit firm and enter into a financial statements audit agreement by the end of Q3 of the financial year to be audited).
- The costs of auditing the financial statements are incurred by the audited entity.
- The Supervisory Board recommends to ensure that the financial statements of the Parent and selected key Group companies are audited by the same audit firm.
- If one audit firm is selected to audit the financial statements of several Group companies, the Supervisory Board should recommend to the Management Board undertaking negotiations to optimise the costs of the audit of the Company’s financial statements.
- Before selecting the audit firm the Supervisory Board defines by way of a resolution:
- the statutory auditor selection criteria and the method for assessing proposals regarding the audit of the Company’s financial statements,
- the content of the announcement with the invitation to submit proposals for audit of the Company’s financial statements. - The audit firm is selected following a selection procedure described in the adopted Policy.
- The Company (immediately) informs the KNF about selecting the audit firm.
- Any and all contractual clauses in the agreements entered into by the Company which limit the possibility of selecting the audit firm by the Supervisory Board for the needs of statutory audit of the Company’s financial statements to specific categories or lists of audit firms are deemed invalid by virtue of law.
- Periods of cooperation with the audit firm (rotation):
- in the case of a statutory audit, the first financial statements audit agreement is entered into with the audit firm for a term not shorter than two years, with the possibility of renewing it for further minimum two-year terms,
- the maximum time of uninterrupted duration of the statutory audit mandate for a single audit firm may not exceed 5 years,
- the lead statutory auditor may not carry out the statutory audit at JSW for more than 5 years. They may carry out the statutory audit again after 3 years from the end of the last statutory audit.
The main assumptions of the “Policy governing the provision of permitted non-audit services by the audit firm performing the audit, by its related parties and by members of its network” are as follows:
- The Supervisory Board may use the advisory services of an audit firm during a financial year in a strictly limited scope. The firm may not be the entity auditing the annual financial statements of JSW or its subsidiaries.
- The audit firm auditing the statutory financial statements, the audit firm’s related party and each member of the audit firm’s network may not provide the entity with prohibited non-audit services or financial audit activities. The prohibition covers the audited entity, its parent and subsidiaries in the EU. The services described in item 6 are exempted from this prohibition.
- The statutory auditor or audit firm carrying out the Company’s statutory audit do not provide, directly or indirectly, to the audited entity, its parent or subsidiaries any prohibited non-audit services in the following periods:
a) in the period from the commencement of the audited period to the issuing of the audit report, and
b) in the financial year immediately preceding the aforementioned period with regard to the services listed in item 4 g). - Prohibited non-audit services include:
a) tax services pertaining to: preparation of tax returns, payroll taxes, customs liabilities, identification of public subsidies and tax incentives, unless the support of the statutory auditor with regard to such services is required by law, support pertaining to tax inspections carried out by tax authorities, unless the support of the statutory auditor with regard to such inspections is required by law, calculation of direct and indirect tax and deferred income tax, provision of tax advisory services,
b) services involving any participation in management or the decision-making process of the audited company,
c) maintaining accounts and preparing accounting documentation and financial statements,
d) payroll services,
e) preparing and implementing internal control procedures and risk management procedures associated with preparation or control of financial information or preparation and implementation of technological systems pertaining to financial information,
f) valuation services, including valuation in connection with actuarial services or litigation resolution support services,
g) legal services involving provision of general legal advice, negotiating on behalf of the audited company and appearing in the capacity of an ombudsman as part of dispute resolution,
h) services associated with the audited company’s internal audit function,
i) services associated with financing, capital structure and capital allocation and investment strategy of the client for whom the audit is carried out, except for providing assurance services in connection with financial statements, such as issuing comfort letters in connection with the audited company’s prospectuses,
j) conducting promotional activities and trading in equities of the audited company on its own account or the audited company’s equity issue underwriting,
k) human resources services in respect of: management staff that may exert significant influence on the preparation of accounting documentation or financial statements subject to statutory audit, if they involve searching for and selecting candidates for such positions or verification of the references of candidates for such positions, organisational structure design, cost control. - Other non-audit services are also prohibited.
- The following services are not prohibited:
a) services: performing due diligence procedures as regards the economic and financial standing, issuing comfort letters - in connection with a prospectus of the audited entity, carried out in accordance with the local standard of related services and involving completion of agreed procedures,
b) assurance services regarding pro forma financial information, projections of results or estimate results, published in the audited entity’s prospectus,
c) audit of historical financial information for the prospectus,
d) verification of consolidation packages,
e) confirmation of compliance with conditions of loan agreements based on an analysis of financial information derived from financial statements audited by the audit firm,
f) assurance services regarding reporting on corporate governance, risk management and corporate social responsibility,
g) services involving assessment of the compliance of information disclosed by financial institutions and investment firms with disclosure requirements for capital adequacy and variable compensation components,
h) assurance pertaining to financial statements or other financial information earmarked for supervision authorities, supervisory board or other supervisory body of the company or owners, exceeding the scope of statutory audit and aimed at helping such bodies to fulfil their statutory obligations. - Provision of permitted services (listed in item 6 above) is possible only to the extent not associated with the audited company’s tax policy, after the Audit Committee has assessed the threats and safeguards of the independence of the audit firm.
- Non-audit services, other than prohibited services, can be provided by the audit firm on the condition that they are approved by the Audit Committee.
- The Company prepares a justified motion to the Audit Committee for approval of a mandate for the audit firm auditing the financial statements to perform a specific permitted non-audit service.
- The Audit Committee assesses the independence of the statutory auditor and the audit firm.
- The Audit Committee approves the performance of services other than prohibited non-audit services by the audit firm auditing the financial statements for a given financial year.
PricewaterhouseCoopers Polska Spółka z ograniczoną odpowiedzialnością Audyt sp.k. was the entity authorised to audit JSW's financial statements and JSW Group's consolidated financial statements for 2019. The audit firm was selected by JSW's Supervisory Board on 29 November 2017. The Audit Committee's recommendation regarding the selection of the audit firm was prepared following the completion of a procedure meeting the relevant criteria.
Nomination and Remuneration Committee
It is formed for the purpose of presenting opinions and proposals to the Supervisory Board on how to shape the governance structure of JSW, including issues related to organisational solutions, the remuneration system, the level of remuneration and the selection of managers with the qualifications needed to build the success of the Group. The Committee is an advisory and opinion body for the Supervisory Board. The Committee consists of at least three members appointed and dismissed by the Supervisory Board from among its members for the period of its term of office. The Supervisory Board elects a chairperson to manage the Committee’s work from among the Committee members. At least one Committee member should satisfy the criteria for independent Supervisory Board members referred to in § 16 sec. 2 of the Company's Articles of Association. In selecting Committee members the Supervisory Board takes into account the competences, knowledge and experience of candidates regarding matters within the Committee’s scope of activity.
Table. Composition of the 10th term Supervisory Board's Nomination and Remuneration Committee
| FIRST AND LAST NAME | POSITION | PERIOD IN OFFICE |
|---|---|---|
| Alojzy Nowak | Chairperson | 01.01.2019 – 31.12.2019 |
| Robert Kudelski | Member | 01.01.2019 – 31.12.2019 |
| Arkadiusz Wypych | Member | 01.01.2019 – 31.12.2019 |
| Adam Pawlicki | Member | 01.01.2019 – 04.07.2019 |
| Konrad Balcerski | Member | 02.04.2019 – 31.12.2019 |
| Izabela Jonek –Kowalska | Member | 17.10.2019 – 31.12.2019 |
Nomination and Remuneration Committee tasks and competences
The main tasks of the Nomination and Remuneration Committee include in particular the following:
- recruiting and hiring Management Board members by drafting and preparing draft versions of documents and processes to be submitted to the Supervisory Board for approval,
- preparing draft versions of contracts and other model documents in connection with employing Management Board members and overseeing the performance of the parties’ contractual obligations,
- overseeing the implementation of the Management Board's remuneration system, in particular preparing settlement documents concerning variable and bonus elements of remuneration for the purpose of submitting recommendations to the Supervisory Board,
- monitoring and periodically analysing the remuneration system for the management of JSW and, if necessary, articulating recommendations for the Supervisory Board,
- supervising the performance of additional benefits for the Management Board, resulting from employment contracts, such as: insurance, cars, apartments and other.
Committee members participate in qualification procedures for Management Board member positions and present to the Supervisory Board a detailed opinion on all candidates for the position, subject to § 11 sec. 5 of the Company's Articles of Association.
The Committee presents to the Supervisory Board a proposed position on all matters submitted to the Board that deal with the Company's operations and fall within the scope of the Committee’s competences.
The committee submits its findings, stances and recommendations worked out in connection with its functions with due notice to enable the Supervisory Board to immediately take pertinent actions.
The Committee submits written annual reports on its activity to the Supervisory Board.
Strategy and development committee
It is formed with the purpose of presenting opinions and requests on Company's development and operational strategy to the Supervisory Board.
The committee is an advisory and opinion body for the Supervisory Board. The scope of the Committee's activities also includes issuing opinions on the Company's plans with regard to its operational and development strategy.
Table. Composition of the Strategy and Development Committee at the Supervisory Board, 10th term
| FIRST AND LAST NAME | POSITION | PERIOD IN OFFICE |
|---|---|---|
| Adam Pawlicki | Chairperson | 01.01.2019 – 04.07.2019 |
| Stanisław Prusek | Chairperson | 12.08.2019 –31.12.2019 |
| Konrad Balcerski | Member | 01.01.2019 – 31.12.2019 |
| Jolanta Górska | Member | 02.04.2019 – 31.12.2019 |
| Izabela Jonek-Kowalska | Member | 17.10.2019 – 31.12.2019 |
| Robert Tomanek | Member | 12.08.2019 – 31.12.2019 |
| Tadeusz Kubiczek | Member | 01.01.2019 – 31.12.2019 |
| Tomasz Lis | Member | 01.01.2019 – 20.03.2019 |
| Alojzy Nowak | Member | 01.01.2019 – 31.12.2019 |
| Arkadiusz Wypych | Member | 01.01.2019 – 31.12.2019 |
Composition of the Restructuring and Strategy Committee as at the date on which this integrated report was prepared
Restructuring and Strategy Committee tasks and competences:
- evaluating the Company's strategy and presenting results to the Supervisory Board,
- recommending the scope and dates for the Company's Management Board to submit strategic annual and long-term plans to the Supervisory Board,
- evaluating the impact of strategic investments, planned and undertaken, on the Company’s assets,
- monitoring the fulfilment of strategic investment tasks,
- evaluating actions related to the management of JSW’s material assets,
- issuing opinions on strategic documents submitted to the Supervisory Board by the Company's Management Board.
The Committee is authorised to review all of the Company's activity from the perspective of its duties and demand from the Company's Management Board and employees any and all information, reports and explanations required to perform the Committee’s duties.
The Company's Management Board is obligated to provide information on an ongoing basis about all planned and taken actions and changes in law and regulatory environment within the Committee’s scope of activity.
Remuneration system for Members of JSW's Supervisory Board
Rules for remunerating Supervisory Board Members are set in resolutions by JSW's General Meeting in accordance with the Act on rules for remunerating persons managing certain companies. Until 2 July 2019, monthly remuneration for Supervisory Board Members was set as the product of the average monthly remuneration in the corporate sector without profit sharing in the fourth quarter of the preceding year, as announced by the President of the Main Statistical Office, and the following multiplier: for the Supervisory Board Chairperson - 1.2; for other Supervisory Board Members - 1.
From 3 July 2019, monthly remuneration for Supervisory Board Members is set as the product of the basis of assessment, as referred to in art. 1 sec. 3 point 11 of the Act of 9 June 2016 on rules for remunerating persons managing certain companies, and the following multiplier: for the Supervisory Board Chairperson - 1.7; for other Supervisory Board Members - 1.5.
In 2019, Supervisory Board Members were entitled to remuneration regardless of the number of meetings convened. Remuneration was not due for months in which a Supervisory Board Member was not present at any of the correctly convened meetings and the absence was not justified. The Supervisory Board decided, by way of a resolution, whether or not the absence of a Supervisory Board Member was justified. Supervisory Board Members were entitled to reimbursement for costs related to participating in the Board's work.
Table. Supervisory Board remuneration for 2019 (in PLN)
| FIRST AND LAST NAME | TERM OF OFFICE | REMUNERATION | OTHER INCOME | TOTAL |
|---|---|---|---|---|
| Halina Buk | 01.01.-31.12.2019 | 76 483.76 | - | 76 483.76 |
| Robert Kudelski | 01.01.-31.12.2019 | 65 914.64 | - | 65 914.64 |
| Antoni Malinowski | 01.01.-04.07.2019 | 27 132.97 | - | 27 132.97 |
| Alojzy Zbigniew Nowak | 01.01.-31.12.2019 | 65 914.64 | - | 65 914.64 |
| Adam Pawlicki | 01.01.-04.07.2019 | 27 132.97 | - | 27 132.97 |
| Tomasz Lis | 01.01.-20.03.2019 | 11 506.65 | - | 11 506.65 |
| Konrad Balcerski | 01.01.-31.12.2019 | 65 914.64 | - | 65 914.64 |
| Arkadiusz Wypych | 01.01.-31.12.2019 | 65 914.64 | - | 65 914.64 |
| Paweł Bieszczad | 01.01.-31.12.2019 | 65 914.64 | - | 65 914.64 |
| Tadeusz Kubiczek | 01.01.-31.12.2019 | 65 914.64 | - | 65 914.64 |
| Robert Małłek | 17.01.-26.02.2019 27.05.2019 04.07.-09.08.2019 | 14 246.33 | - | 14 246.33 |
| Jolanta Górska | 20.03.-31.12.2019 | 54 407.99 | - | 54 407.99 |
| Stanisław Prusek | 04.07.-31.12.2019 | 38 994.76 | - | 38 994.76 |
| Robert Tomanek | 04.07.-31.12.2019 | 38 994.76 | - | 38 994.76 |
| Izabela Jonek - Kowalska | 10.09.-31.12.2019 | 24 440.98 | - | 24 440.98 |
| RAZEM | 708 829.01 | - | 708 829.01 |
Table. Supervisory Board remuneration for 2018 (in PLN)
| FIRST AND LAST NAME | TERM OF OFFICE | REMUNERATION | OTHER INCOME | TOTAL |
|---|---|---|---|---|
| Halina Buk | 01.01.-31.12.2018 | 57 391.22 | - | 57 391.22 |
| Eugeniusz Baron | 01.01.-28.06.2018 | 26 129.09 | - | 26 129.09 |
| Tomasz Lis | 01.01.-31.12.2018 | 52 845.36 | - | 52 845.36 |
| Robert Kudelski | 01.01.-31.12.2018 | 52 845.36 | - | 52 845.36 |
| Krzysztof Kwaśniewski | 01.01.-22.10.2018 | 42 617.23 | - | 42 617.23 |
| Antoni Malinowski | 01.01.-31.12.2018 | 52 845.36 | - | 52 845.36 |
| Alojzy Zbigniew Nowak | 01.01.-31.12.2018 | 52 845.36 | - | 52 845.36 |
| Andrzej Palarczyk | 01.01.-28.06.2018 | 26 129.09 | - | 26 129.09 |
| Adam Pawlicki | 01.01.-31.12.2018 | 52 845.36 | - | 52 845.36 |
| Konrad Balcerski | 22.10.-31.12.2018 | 10 228.13 | - | 10 228.13 |
| Arkadiusz Wypych | 18.01.-31.12.2018 | 50 430.38 | - | 50 430.38 |
| Paweł Bieszczad | 28.06.-31.12.2018 | 26 863.06 | - | 26 863.06 |
| Tadeusz Kubiczek | 28.06.-31.12.2018 | 26 863.06 | - | 26 863.06 |
| TOTAL | 530 878.06 | - | 530 878.06 |
Remuneration system for Supervisory Board Members at group companies
Rules for remunerating members of Group companies' Supervisory Boards are set in resolutions by the General Meeting or Shareholders' Meeting of these companies in accordance with the Act of 9 June 2016 on rules for remunerating persons managing certain companies. Moreover, from 12 August 2019, the Group applies JSW Group's Remuneration Policy, which addresses remuneration for Members of the Management Boards of Group companies.
Modus operandi
The manner in which the General Meeting of JSW S.A. operates and its powers are defined in the Company's Articles of Association and General Meeting Regulations (adopted by the General Meeting), available at the website www.jsw.pl.
A General Meeting is convened in accordance with procedures and rules set by law. General Meetings are held in Warsaw, in Katowice or at the Company's registered office. A General Meeting is convened by way of an announcement published on the Company's website and in the form of a current report and by registering it in the system of Krajowy Depozyt Papierów Wartościowych (KDPW). The announcement is posted on the Company's website, the current report is sent and registration in KDPW's system is made no less than 26 days before the General Meeting date. The persons or the body other than the Management Board that individually convenes the General Meeting promptly notifies the Company's Management Board about this fact and delivers in writing or electronically a relevant resolution or statement on convening the General Meeting, the agenda, draft resolutions and justifications. If the General Meeting is convened by Shareholders then they also deliver documents confirming the mandate to convene the General Meeting. The Management Board performs all the activities defined by law in order to hold an effective General Meeting.
Each shareholder who intends to take part in the General Meeting, directly or by proxy, is obligated to notify the Management Board or the General Meeting Chairperson if he/she holds directly or indirectly more than 10% of total votes in the Company.
A decision on holding a General Meeting with the use of means of electronic communication is made by the Supervisory Board. The course of the General Meeting is registered in an audio-visual system and broadcast online and its electronic recording is published on the Company's website. A General Meeting called by authorised Shareholders adopts a resolution on whether the costs of the meeting are covered by the Company.
General Meeting competences
The following matters require a General Meeting resolution:
- examining and approving the Management Board report on the Company’s operations and financial statements for the previous financial year and granting a vote of confidence to members of the Company’s governing bodies on the performance of their duties,
- distributing profits or covering losses,
- changing the Company’s line of business,
- amending the Company’s Articles of Association,
- increasing or decreasing the company’s share capital,
- authorising the Management Board to purchase the Company’s own shares for cancellation and specifying the manner and conditions for cancelling shares,
- merging, de-merging or transforming the Company,
- dissolving or liquidating the Company,
- appointing and dismissing Supervisory Board members,
- setting remuneration for Supervisory Board members,
- allowing the Company to enter into a loan agreement, surety agreement or another similar agreement with a Management Board member, Supervisory Board member, commercial proxy or liquidator or in favour of any such person,
- allowing a subsidiary to enter into a loan agreement, surety agreement or another similar agreement with a Management Board member, Supervisory Board member, commercial proxy or liquidator or in favour of any such person,
- issuing bonds,
- selling or leasing an enterprise or an organised part thereof and establishing a limited right in rem thereon,
- making decisions on claims to remedy damages incurred during the establishment of the Company or in its management or oversight,
- establishing or dissolving the Company’s capitals and funds. The purchase or sale of real estate or a right to perpetual usufruct or a share in real estate or in a right to perpetual usufruct does not require General Meeting consent.
Shareholder Rights
The rights of JSW S.A.'s shareholders are specified in the Company's Articles of Association and the General Meeting Regulations, available at the website www.jsw.pl. Shareholders representing at least half of share capital or at least half of all the votes in the Company have the right to file a request to convene an Extraordinary General Meeting. The Management Board convenes a General Meeting also at the request of Shareholders representing at least one-twentieth of share capital. Requests to convene a General Meeting, place an item on the agenda, draft resolutions concerning items on the agenda of the next General Meeting or items that will be included on the agenda should be submitted to the Management Board in writing or in the electronic form. Authorisation documents of persons authorised to take action should be attached to the request.
A Shareholder has the right to request copies of motions concerning items on the agenda within one week prior to the General Meeting date.
Persons who are Company’s Shareholders sixteen days before the General Meeting date (date of registration of participation in a General Meeting –“record date”) and who satisfy the following conditions have the right to participate in the General Meeting:
a) in the case of persons authorised on the basis of dematerialised bearer shares – they have submitted to the entity keeping the securities account, no earlier than after the announcement on convening the General Meeting and no later than on the first business day after the record date, the request to issue a name-specific certificate on the right to participate in a General Meeting,
b) in the case of persons authorised on the basis of bearer shares in the form of a document – they submitted the share certificates to the Company no later than on the record date and did not collect them before closing of that day. Certificates attesting that shares have been deposited with a notary, a bank or an investment firm having its place of business or branch in the European Union or a state that is a party to the European Economic Area agreement specified in the notice on convening a General Meeting, may be deposited in lieu of shares. Such a certificate should specify the numbers of share certificates and contain a statement that the share certificates will not be released before closing of the record date,
c) in case of persons authorised on the basis of registered shares and interim certificates as well as pledgees and users who have the right to vote – will be entered in the share book on the record date.
Shareholders may review the list of persons authorised to participate in the General Meeting which will be displayed in the Management Board’s office for three business days preceding the date of the General Meeting and may demand a copy of the list against the cost of preparing such a list. Moreover, each Shareholder may request the list of authorised shareholders to be sent to it free of charge by e-mail, specifying the address to which the list should be sent. The General Meeting may appoint an Election Committee consisting of up to three persons.
At the request of Shareholders representing at least one-tenth of share capital represented at the General Meeting, the Attendance List should be checked by a committee elected for this purpose and composed of at least three people. The persons filing such a motion have the right to elect one Member of that committee. Each participant of a General Meeting may submit one candidate to become the General Meeting Chairperson. Election is carried out with the participation of consenting candidates.
A shareholder has the right to vote in a different manner under each share held. Votes are cast in an open ballot. Secret balloting is ordered for elections, dismissals, in personal matters and on motions to hold to account members of governing bodies or liquidators. Secret balloting should be also ordered at the request of at least one Shareholder in attendance.
A shareholder may vote as a proxy when adopting resolutions concerning him/her, as mentioned in art. 413 §1 of the Polish Commercial Companies Code.