Corporate governance and corporate governance rules
Addressing the expectations of our stakeholders, we care for effective and transparent management. It is important for us to maintain the balance between the interests of all entities involved in the operations of JSW and the Group in a manner ensuring development and creation of value. The Group observes the highest standards and best practices of transparency and corporate governance. It is aware of the need to implement solutions related to ethics management and responsibility in the supply chain. Implementation of solutions of this type boosts the Group’s credibility among business partners and in the investor community and makes the Group more stable and predictable in terms of management of business risk.
The Group’s functioning and organization is regulated by the JSW Group Code. Corporate governance, exercised as part of the Group management activities, is regulated in the Corporate Governance Principles at the JSW Group, which were implemented to establish uniform and transparent procedures and standards of conduct for the Group’s operations. The Corporate Governance Principles are aimed at increasing the efficiency of the Group’s management and the functioning of its constituent entities and implementing corporate governance forms and procedures that go beyond what is required by the binding provisions of law. In addition, the powers of the corporate bodies of the given Group company follow from the provisions of the Commercial Company Code (“CCC”) and the articles of association/incorporation deeds of the respective company.
Since 12 August 2019 the Group has had in place Compensation Policy for the JSW Group which constitutes the basis for regulating the remuneration of the members of the corporate bodies of JSW’s direct and indirect subsidiaries, Department Directors, Deputy Department Directors, JSW Management Board Representatives in the JSW Management Board Office and Directors in the mines and their deputies.
There were no changes in the Group’s management principles in 2020.
In addition, in 2020, the JSW Extraordinary Shareholder Meeting adopted for application the Compensation Policy for the Management Board and Supervisory Board of Jastrzębska Spółka Węglowa S.A. satisfying the requirements of Article 90d of the Act on Public Offering.
Those documents constitute a set of principles for shaping and complying with corporate governance, implementing an effective management model and, as a consequence, maximizing the value of the Group. Regulations created on the basis of the provisions of the Code and pertaining, among others, to the principles of cooperation in management areas together with specific procedures for their implementation, thanks to increasing the efficiency and effectiveness of the Group’s management, permit the Group to streamline the process of pursuing its shared objective.
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.
As at the date of this report, JSW’s enterprise consisted of five hard coal mines organized into separate Plants, in which coking coal and steam coal is mined, as well as the Production Support Unit and the Management Board Office. The internal organization of the Company’s Plants is defined in separate Organizational Bylaws and Organizational Charts.
JSW organizational chart as at 31 December 2020
In accordance with the JSW Articles of Association, the Parent Company’s governing bodies are the Management Board, the Supervisory Board and the Shareholder Meeting. The powers of JSW’s governing bodies stem from the provisions of the Commercial Company Code and the Articles of Association of JSW. The powers of the Company’s individual governing bodies are defined in:
- Management Board– Management Board Bylaws,
- Supervisory Board – Supervisory Board Bylaws,
- Shareholder Meeting – Shareholder Meeting Bylaws.
Changes to the management principles in the Company in 2020
To improve management in the Company, in 2020 the Management Board adopted a number of resolutions pertaining to changes in the organizational structure of the Company’s Management Board Office and plants. These changes were aimed at improving the efficiency of operation and at adjusting to the changing market conditions.
The key changes in the Company’s organization in 2020:
- amendments to JSW S.A. Management Board Bylaws,
- the name of the Division of the Vice-President of the Management Board for Technical Matters was changed to the Division of the Vice-President of the Management Board for Technical and Operational Matters,
- change of the position of Mr. Artur Dyczko in the Company Management Board by entrusting him with serving in the capacity of Vice-President of the Management Board for Technical and Operational Matters for the 10th term of office starting from 20 January 2020,
- change of the name of the Division of the Vice-President of the Management Board for Strategy and Development to the Division of the Vice-President of the Management Board for Development,
- update of the Framework Mine Organization Charts and the Rules and Regulations and Organization Chart of the Management Board Office and the Production Support Unit, to the extent necessary to adapt them to the changing legal regulations and market conditions,
- change in the organizational structure of KWK Borynia-Zofiówka-Jastrzębie consisting in spinning off the Jastrzębie Section and subordinating it to KWK Bzie-Dębina under development, which was named KWK Jastrzębie-Bzie,
Integrated Management System
JSW has in place the Integrated Management System Policy, which refers directly to corporate social responsibility and commitments made by the Company to the requirements and expectations of its Stakeholders. The JSW Management Board strives to attain the vision and mission, achieve long-term success and increase value of the whole Group. The Group takes measures in the area of economic development, social cohesion and environmental protection, across its operating area. JSW and a number of Group companies have implemented certified management systems. Improving the effectiveness of the integrated management system is a matter of attention and continuous efforts in accordance with the commitment declared in the Policy.
The system encompasses strategic and operational quality objectives, environmental objectives and tasks, general and detailed objectives related to occupational health and safety, and objectives, plans and safeguards in respect of information safety. Appropriate financial, human and organizational resources have been ensured to maintain and continuously improve the effectiveness of the integrated management system and achieve the set objectives.
The primary objectives of the Integrated Management System include:
- ensuring in a documented manner that quality requirements for goods are met at all stages of conducted processes and that requirements concerning occupational health and safety are fulfilled,
- minimizing the potential risk of non-conformity of offered goods,
- identifying and eliminating, as soon as possible, causes and effects that disrupt conducted processes,
- curtailing any adverse impact on the environment,
- continuously improving employee safety,
- taking actions to procure the application of safe technological processes, striving to prevent accidents, occupational disorders and events that may lead to accidents,
- identifying, monitoring and mitigating threats that may affect safety of work,
- protecting the informational resources and means used to process them,
- ensuring data safety and continuous business processes,
- improving the JSW’s position as a reliable partner and building an image of an environmentally friendly enterprise.
Management systems
Quality management system
We give our customers a reason to trust us and be certain that we are capable of reaching our quality targets in order to meet our customers’ requirements. This also lets us build the Company’s image as one having great concern for environmental protection and the safety of our employees. The aim of the quality policy is to meet customer expectations by delivering products in line with their expectations and the requirements stated in contracts with customers.
The quality management system focuses particularly on optimising processes and improving the organisational culture.
Environmental management system
We have a commitment to preventing pollution and minimising our negative impact on the surroundings.
The environmental protection program has been established to take account of legal and other requirements for JSW’s business, significant environmental and technological aspects and the expectations of interested parties.
Occupational health and safety management system
Its aim is to develop and improve mechanisms for conduct in workplace management processes that will make it possible to reduce threats and exposures. We are committed to identifying, monitoring and minimising threats that can have an impact on workplace safety; activities intended to promote safe employee behaviour have been declared and intensified.
The company’s leadership have undertaken to provide essential measures and resources to shape safe employee attitudes as well as to monitor threats and reduce their impact on the workplace.
This lets us ramp up our efforts in these areas, in particular by taking action to ensure the safety of technological processes, striving to prevent accidents, occupational diseases and near misses.
Information security management system
This system has been implemented in order to pursue effective mitigation of business risk, the risk of losing the most important information, and to ensure that the Integrated Management System policy and objectives are implemented. As one of the systems being part of the Integrated Management System, it encompasses: “Classification of Information,” “Analysis and Assessment of Risk” and “Risk Action Plan.” The system has been deployed in order to apply defence mechanisms that are adequate to business needs, define rules for handling information, estimate risk based on existing threats and determine acceptable risk levels.
Risk management system
Risk Management System
The Group has in place a comprehensive enterprise risk management system (ERM), which comprises the JSW Group Enterprise Risk Management Policy and Procedure.
The aim of corporate risk management is to identify potential events and risks which may influence the organization, to keep the risk within the prescribed limits, and to ensure achievement of business objectives.
Further information on risk management is available in section Risk management rules
Internal control system
The internal control system operating in JSW defines activities in the areas of internal control, risk management, compliance, internal audit and others that have direct or indirect influence on correctly compiled financial statements. The system involves numerous implemented control mechanisms and internal regulations. The purpose of the internal control system is to support management, achieve set goals, increase the efficiency of tasks and ensure its safe and stable operation.
The internal control system area is subject to the Internal Control System Operation Bylaws, a set of regulations and principles underlying the construction, operation and usage of the internal control system at JSW. The internal control system is permanently embedded in the management process. It is based on identification and assessment of risk related to processes and activities conducted in all organizationally separate units. Identified risk is used to design and implement respective internal control mechanisms. The mechanisms should protect JSW against the risk that identified threats for achieving JSW’s objectives will materialize. The internal control system comprises all regulations, procedures and organizational structures that act together to ensure: compliance with strategy, efficiency and effectiveness of procedures, protection of assets, compliance of transactions and activities with the mandatory provisions of law, supervisory regulations and internal policies, plans, provisions and procedures, support for the decision-making process.
Compliance system
In the analyzed period, the work on designing and implementing a complex compliance system were continued. The system is comprised of a number of mutually-related documents regulating separate areas, such as:
- Code of ethics
- Compliance policy
- Irregularity reporting procedure
- Jsw internal investigation procedure (in development)
- Anti-corruption policy
- Conflict of interest management policy
- Business partner verification policy
- Employment of family and acquaintances policy
- Gift policy
- Promotional and charitable activity policy
Further information on risk management is available in section Policy.
Corporate governance statement
Pursuant to § 70 section 6 item 5) and § 71 sections 4 and 5 of the Finance Minister’s Regulation of 29 March 2018 on the Current and Periodic Information Transmitted by Securities Issuers and the Conditions for Recognizing the Information Required by the Regulations of a Non-Member State as Equivalent, JSW S.A. Management Board hereby presents its Representation on the Application of Corporate Governance Rules in 2020.
Identification of corporate governance rules being applied
In 2020, the Parent Company applied the corporate governance rules set forth in the document entitled “Code of Best Practice for WSE Listed Companies 2016” adopted by Resolution no. 26/1413/2015 of the Warsaw Stock Exchange Supervisory Board on 13 October 2015. The text of the Code of Best Practice 2016 is published on the website of the Warsaw Stock Exchange at the following address: https://www.gpw.pl/dobre-praktyki.
Identification of the set of corporate governance rules on the applictaion of which JSW could decide voluntarily
JSW does not apply any corporate governance rules going beyond the requirements prescribed by the document entitled “Code of Best Practice for WSE Listed Companies 2016”.
Identification of any information about the corporate governance practices going beyond the requirements provided for by the national law applied by JSW
JSW does not apply any corporate governance rules going beyond the requirements prescribed by the document entitled “Code of Best Practice for WSE Listed Companies 2016”.
Identification of corporate governance rules not applied
JSW does its utmost to apply the corporate governance rules prescribed by the document entitled Code of Best Practice for WSE Listed Companies 2016.
A declaration on the status of the JSW’s observance of recommendations and rules included in the Code of Best Practice 2016 is available on the JSW corporate website at http://www.jsw.pl/relacje-inwestorskie/lad-korporacyjny/dobre-praktyki/.
In 2020, JSW resigned from applying the following rules:
Primary attributes of internal control and risk management systems in reference to the preparation of financial statements and consolidated financial statements
For the purpose of procuring that the financial statements are true and fair and comply with the binding regulations of law and of generating high quality financial data, the Group has in place internal control and risk management systems. The Parent Company’s Management Board is responsible for the internal control system and its effectiveness in the process of preparing the financial statements and the periodic reports prepared and published in accordance with the principles of the Regulation.
Internal regulations and procedures
Under the internal control and risk management system, in the process of preparing financial statements, the Group has adopted a number of organizational solutions, procedures and internal bylaws whose purpose is to procure effective and efficient control as well as identification and elimination of prospective risks pertaining to the process of preparing financial statements. The system is implemented mostly on the basis of:
- GROUP CODE
- JSW’S ARTICLES OF ASSOCIATION
- JSW ORGANIZATIONAL BYLAWS
- DOCUMENTATION CONCERNING THE ADOPTED ACCOUNTING PRINCIPLES (POLICIES)
- INSTRUCTIONS CONCERNING DOCUMENTARY WORKFLOW
- TAX PROCEDURE
- CORPORATE RISK MANAGEMENT POLICY AND PROCEDURES
- BYLAWS GOVERNING THE OPERATION OF THE JSW INTERNAL CONTROL SYSTEM
- INTERNAL AUDIT BYLAWS
- INSTITUTIONAL INTERNAL CONTROL BYLAWS
- POLICY AND PROCEDURE FOR SELECTION OF THE AUDIT FIRM AND POLICY GOVERNING THE PROVISION OF PERMITTED NON-AUDIT SERVICES BY THE AUDIT FIRM, BY ITS RELATED PARTIES AND BY A MEMBER OF THE AUDIT FIRM’S CHAIN
The JSW Group makes every effort to prepare financial statements correctly, that is in compliance with prevailing laws defining reporting principles and procedure, observing the principle of fairness and completeness and also taking into consideration any amendments to the European Union and Polish laws referring to new reporting formats.
The preparation of financial statements is supervised by the Vice-President of the Management Board for Financial Matters. The Chief Accountant of JSW is responsible for preparing the standalone and consolidated financial statements, and the Management Boards of the consolidated companies are responsible for preparing the reporting packages for the Group’s consolidated financial statements.
In order to ensure the application of uniform accounting principles, JSW adopted the IFRS-based Documentation of Accepted Accounting Policies, which is binding on JSW and Group companies. Amendments to IFRS are monitored on an ongoing basis, in order to update the Documentation of Accepted Accounting Policies and the scope of disclosures in the financial statements. The Parent Company continuously employs cohesive IFRS-compliant accounting rules with regard to measurement, recognition and disclosures of financial data in the financial statements, periodic reports and other reports conveyed to shareholders. The same rules are in force in the Group’s member companies in which JSW is the Parent Company. Furthermore, internal control mechanisms are applied, including allocation of powers, a multi-step data authorization, verification of compliance of the presented data, validation mechanisms.
The data disclosed in the financial statements come from JSW’s accounting records and additional information transmitted by JSW’s various organizational cells. However, to prepare consolidated financial statements, the Group companies transfer the required data in the form of reporting packages based on internal guidelines regulating detailed issues connected with principles, scope and deadlines for preparing the packages. The Group applies standardized models of financial statements. Consolidated financial statements are subject to the process of opinion-issuance, authorization and approval by the Management Board prior to their publication. Annual financial statements are presented to the Supervisory Board for assessment. Auditing and revision of the financial statements of the key Group companies are performed by the same audit firm. The principles of selecting the audit firm are found in the prevailing Policy and procedure for selection of the audit firm and policy governing the provision of permitted non-audit services by the audit firm, by its related parties and by a member of the audit firm’s chain.
Financial statements of the other Group companies are audited by an audit firm selected within the joint procedure.
IT solutions
The data from the accounting ledgers ensure the accuracy of the financial statements as they contain evidence entered on the basis of the appropriate source documentation, while using the most modern IT technology. The system’s modular structure provides for a transparent split of areas and competencies, the coherence of the records of operations in the accounting ledgers and control between the ledgers. The finance and accounting system includes instructions and control mechanisms to ensure data consistency and integrity. Access to data in different cross-sections and layouts is achievable through an expanded reporting system. On an ongoing basis, the Group companies update their IT systems to the changing accounting principles or other legal standards. Consolidated financial statements are prepared using specialized IT tools, which makes it possible to streamline the financial consolidation process and shorten the time needed to prepare consolidated financial statements by, among other things, an extensive mechanism for automatically validating the consistency of financial data entered by the companies. The IT solutions used by the Group secure control of access to the finance and accounting system and provide for the appropriate protection and archiving of the accounting ledgers. The security of operating the IT system is assured by the relevant structure of authorization. Control of access is exercised at every stage of preparing the financial statements, starting from entering source data, through data processing to generating output information. The Group uses the security systems on the hardware and system levels.
Audit Committee
The Supervisory Board evaluates the standalone and consolidated financial statements and has appointed an Audit Committee, which is an advisory and opinion-giving body. The primary objective of the Audit Committee’s operation is to support the Supervisory Board in exercising financial supervision and delivering to the Supervisory Board accurate information and opinions, enabling the making of the right decisions on financial reporting, internal control and risk management, as well as to monitor independence of the audit firm auditing the financial statements. According to the binding regulations, JSW submits its financial statements to an audit (annual statements) and a review (interim semi-annual statements) by an independent statutory auditor. The JSW Supervisory Board selects the statutory auditor from among reputable audit firms based on the Audit Committee’s recommendations. Within the framework of its audit work, the statutory auditor makes an independent evaluation of the accuracy and correctness of the standalone and consolidated financial statements and confirms the effectiveness of the internal control and risk management system.
Risk management
The fundamental element of risk management in the process of preparing financial statements is to audit the control mechanisms and the occurrence of risks in JSW’s operations. In performing these duties, the internal audit division assists the Audit Committee by conducting the relevant work to check the effectiveness of control and the efficiency of processes. The Internal Audit division performs audit tasks of an assurance and consulting nature and ad hoc audits.
Internal control system
The internal control system covers all the JSW operations contemplated in the Articles of Association and all the levels of organizational structure, and thereby all the processes in JSW, including areas having a direct or indirect impact on the correctness of preparing the financial statements. The Internal Control System encompasses the system of financial and IT solutions, as well as relevant regulations, procedures and organizational structures. Activities of the system serve the purpose of ensuring the organization’s effective and efficient operations, credibility of financial reporting and compliance of the operations with laws and internal regulations. The Parent Company checks the functioning of the system and its control mechanisms on a regular basis and indicates potential risks in the processes.
Rules for amending the Company’s Articles of Association
The Articles of Association are amended by way of a resolution adopted by the Shareholder Meeting where a subsequent decision of a relevant court must be issued to enter the amendment in the national court register. An amendment to the Articles of Association materially changing the Company’s line of business (Article 416 § 1 of the Commercial Company Code) shall not require a buyout of the shares held by shareholders objecting to such an amendment if the relevant resolution of the Shareholder Meeting is adopted by a majority of two thirds of the votes in the presence of shareholders representing at least one half of the share capital.
Management Board
Competences of the JSW Management Board
The Company’s Management Board operates pursuant to the Commercial Company Code, the Articles of Association, JSW’s Organizational Bylaws, internal regulations and other generally applicable provisions of law.
When fulfilling their duties, Management Board Members are also guided by the principles included in the Code of Best Practice for Warsaw Stock Exchange Listed Companies, Management Board Bylaws and the Articles of Association available on the website www.jsw.pl
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 restricted for other Company’s corporate bodies. The Management Board is also obligated to cooperate with the trade union organizations operating in the Company’s business. The Management Board manages the Company directly through the adopted resolutions, other forms of decisions made, entries to minutes, and indirectly through Office Directors, Management Board Representatives and Directors of Entities and Operation Managers through whom it supervises also the work of individual Entities.
The Directors Council, composed of Directors of the Company’s Entities and other invited Directors, is an opinion-making and advisory body to the Management Board. Meetings of the Directors Council are convened by the President of the Management Board.
Management Board members perform their responsibilities based on service agreements in accordance with the function specified by the Supervisory Board in the Resolution on appointment to the Management Board. The President of the Management Board supervises the overall operation of the Company, manages the work of the Management Board and names the Vice-President to perform these duties in his or her absence. The President of the Management Board convenes the Management Board meetings and chairs them and takes decisions which are not reserved to the powers of the Company’s governing bodies. If no substitute is named for the period of absence of the President of the Management Board, then the substitute is the Vice-President of the Management Board for Technical and Operational Matters.
The scope of responsibilities of the President of the Management Board includes the exercise of direct supervision over the work of reporting organizational units belonging to the Division of the President of the Management Board (including the Data Protection Officer), in accordance with the current organizational chart of the Management Board Office. The President of the Management Board also performs substantial supervision of the OHS Team. The Vice Presidents oversee the overall activity of the Company and take decisions not reserved to the powers of the Company’s governing bodies, and in particular they oversee the operation of the organizational cells which belong to their Divisions in accordance with the Management Board Office’s organizational chart.
The Vice Presidents oversee the overall activity of the Company and take decisions not reserved to the powers of the Company’s governing bodies, and in particular they oversee the operation of the organizational cells which belong to their Divisions in accordance with the Management Board Office’s organizational chart.
The Vice-President of the Management Board for Development also exercises supervision of actions / innovative projects of the JSW Group. In addition, the Vice-President of the Management Board for Technical and Operational Matters exercises substantial supervision of the tender applications of the Production Support Unit submitted to the Management Board’s decision.
Management Board resolutions are adopted by an absolute majority of votes, where at least three Management Board Members attend the meeting and may be adopted if all the Management Board Members have been correctly notified of the date and place of the Management Board meeting. Management Board members may participate in meetings via means of direct remote communication. Management Board resolutions are minuted. The Management Board grants Powers of Attorney to manage the Company’s matters related to the operations of the relevant Plant and specific Powers of Attorney to natural persons.
Description of activities of the JSW Management Borad
The Management Board Members exercise direct supervision over the work of reporting organizational units belonging to the Division of the President of the Management Board, in accordance with the current organizational chart. The Management Board oversees the work of each of the Company’s plants through the Mine Directors, the Director of the Production Support Unit, the Management Board Office and Management Board Representatives.
Two Management Board Members acting jointly or a Management Board Member acting with a proxy are authorized to make statements of will and affix signatures on behalf of JSW.
In agreements between JSW and a Management Board Member, as well as in disputes with a Management Board Member, the Company shall be represented by the Supervisory Board.
The President of the Management Board convenes Management Board meetings on his own initiative or upon request of one of the Management Board members at any time, also upon request of the Supervisory Board Chairperson. During the absence of the President of the Management Board, meetings are convened by the Management Board Member named by the President and if a Vice-President is not named, then the meetings are convened by the Vice-President of the Management Board for Technical and Operational Matters. Each of the Management Board Members should be notified of the date and place of the meeting and the agenda at least one day before the meeting date. Within the same time limit, each of the Management Board members should receive the planned topics for discussion and draft resolutions and decisions. In urgent matters, the Management Board may adopt resolutions without observing the procedure specified above.
Management Board members may participate in meetings via means of direct remote communication. Meetings according to this procedure are held when Management Board Members are not present in one place but may communicate / discuss the presented draft motions / resolutions via means of direct remote communication.
It is permitted to vote, review motions and adopt resolutions according to the following procedures:
a) written ballot, consisting in written casting of the vote by each Management Board Member, including through another Management Board Member, by affixing signature under the draft motion / resolution, specifying a vote “for” the decision, “against” the decision or stating “abstaining” from voting. If this is not specified, the vote shall be deemed not cast,
b) via means of direct remote communication (e.g. using electronic mail, teleconference, videoconference or dedicated IT system), specifying clearly a vote “for” the decision, “against” the decision or stating “abstaining” from voting. If this is not specified, the vote shall be deemed not cast. The decision on ordering a ballot via means of direct remote communication is made by the President of the Management Board and, in his or her absence, by the Management Board Member convening the meeting, specifying the deadline for casting the votes by Management Board Members.
Motions to the Management Board and draft resolutions to be adopted following the procedure specified above are delivered to all Management Board Members in hardcopy and/or by electronic mail and/or using a dedicated IT system.
The date of review of the motion / adoption of the resolution following the procedure specified above is deemed to be the date of casting the last vote by a Management Board Member. If a Management Board Member does not take a stand by the set deadline, he or she shall be deemed not participating in the ballot.
Motions to the Management Board and draft resolutions to be adopted following the procedure specified above are delivered to all Management Board Members in hardcopy and/or by electronic mail and/or using a dedicated IT system. The date of review of the motion / adoption of the resolution following the procedure specified above is deemed to be the date of casting the last vote by a Management Board Member. If a Management Board Member does not take a stand by the set deadline, he or she shall be deemed not participating in the ballotAfter collecting the votes of Management Board Members participating in the ballot following the procedure specified above, the President of the Management Board is informed about the outcome of the ballot and signs the “collective” resolution/ decision or takes a decision on making a note of the casting of votes by Management Board Members on the document by affixing, in the space for signature, an appropriate stamp or note informing about the vote cast, e.g. “cast the vote via teleconference”, “cast the vote via videoconference”, “cast the vote by email” or “cast the vote by telephone”. Management Board members are informed about the outcome of the ballot. It is permissible for Management Board Members to sign documents using a qualified signature. It is permissible for Management Board Members to vote using a dedicated IT system. In the case of loss of the Internet connection / disruption of teleconference or videoconference communication during a Management Board meeting, the decision on continuation of the meeting or announcing a break in the meeting is made by the meeting chairperson.
Participation of a Management Board Member in a meeting via means of direct remote communication is equivalent to the traditional form of participation in the Management Board meeting.
At Management Board meetings held via means of direct remote communication, if submission of documents in writing is envisaged, such documents can be submitted in electronic form.
Meetings of the Management Board are held at the Company’s head office. In justified cases, they may be held outside JSW’s head office.
The Management Board held 67 meetings in 2020 and 13 meetings in the first quarter of 2021.
The Management Board manages the Company through adopted resolutions, other forms of decisions made and entries in the minutes. Management Board resolutions may be adopted if all Management Board Members have been duly notified of the Management Board meeting. Management Board resolutions are adopted by an absolute majority of votes, where at least three Management Board Members attend the meeting.
Issues exceeding ordinary management require a Management Board resolution, in particular:
- determining the organizational bylaws defining the Company’s organization,
- appointment of a commercial proxy,
- disposal or acquisition of real property,
- matters in which the Management Board addresses the Shareholder Meeting and the Supervisory Board,
- issuing promissory notes,
- determining the Bylaws governing the operation of the internal control system.
According to the Management Board Bylaws, the Management Board is required to, without limitation:
- prepare the Company’s financial statements together with the report on the Company’s activity in the financial year and the Group’s consolidated financial statements together with the report on the Group’s activity within three months of the balance sheet date. Such documents should be signed by all Management Board Members. The refusal by a Management Board Member to sign any such documents should be documented,
- prepare a motion on the distribution of profit or coverage of loss for the financial year,
- have the Company’s financial statements and the Group’s consolidated financial statements audited by an entity authorized to audit financial statements,
- submit the documents listed in items 1 and 2 above, together with the auditor’s opinion and report, to the Supervisory Board for evaluation,
- convene a Shareholder Meeting:
- an Ordinary Shareholder Meeting, which should be held within six months of the end of the financial year,
- an Extraordinary Shareholder Meeting:
- within two weeks, at the written request of the Supervisory Board,
- immediately, if the balance sheet shows a loss exceeding the sum of the supplementary capital and additional reserve capital and one-third of the share capital, in order to adopt a resolution on the Company’s further existence,
- at its own initiative or at the request of the Shareholders representing at least one-twentieth of the share capital,
- submit the documents listed in items 1 and 2 above and the Supervisory Board report on their evaluation to the Ordinary Shareholder Meeting,
- submit to the Shareholder Meeting, along with an opinion from the Supervisory Board, a report prepared at least once a year regarding representation expenses, expenses on legal services, marketing services, public relations and social communication services and management consulting services,
- at least once a year, prepare a report on oversight of the execution of investment projects and submit it to the Supervisory Board for approval,
- in companies for which the Company is the parent entity within the meaning of Article 4 Item 3 of the Act on Competition and Consumer Protection of 16 February 2007, in conjunction with Article 17 Section 7, Article 18 Section 2, Article 20 and Article 23 of the Act on Rules for Managing State Property, introduce the rules prescribed by the Act on the Rules for Managing State Property,
- keep the Shareholder Meeting minutes book,
- cooperate with the trade union organizations operating in the Company’s business according to the principles prescribed by the Trade Union Act,
- provide auditors, the Supervisory Board and the Shareholder Meeting with exhaustive clarifications and furnish them with any and all documents and other materials pertaining to the Company,
- implement post-audit recommendations,
- submit to the Supervisory Board for opinion:
- organizational bylaws defining the organization of the Company’s enterprise,
- matters brought before the Shareholder Meeting,
- the Company’s annual plans,
- rules governing the disposal of non-current assets set forth in §291 of the Articles of Association;
- rules governing sponsorship activities,
- submit to the Supervisory Board for approval:
- bylaws of the Company’s Management Board,
- the Company's operational strategy,
- bylaws governing the operation of the internal control system,
- the Group’s compensation policy,
- obtain the Supervisory Board’s consent to perform the activities specified in § 20 section 3 of the Articles of Association.
Appointing and dismissing the JSW’s Management Board Members
The Management Board consists of three to seven Members. 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, the Act on Rules for Managing State Property as well as rules and regulations.
The Supervisory Board conducts a recruitment procedure in the event of occurrence of circumstances justifying appointment of 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: the position subject to the procedure, the date and place where recruitment submissions are received, the date and place where interviews are held, the range of subjects discussed during the interview, the requirements and the method of evaluating the candidate. An announcement about a recruitment procedure is published on the Company’s website and in the Public Information Bulletin of the authority providing services to the competent Minister exercising the rights attached to the State Treasury’s shares. The Supervisory Board shall inform the shareholders about the outcome of the recruitment procedure at the nearest Shareholder Meeting and make the recruitment procedure report available to them.
In accordance with Articles of Association:
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A CANDIDATE FOR THE POSITION OF THE JSW’S MANAGEMENT BOARD MEMBER MUST FULFILL ALL OF THE FOLLOWING CONDITIONS: |
THE FOLLOWING PERSON CANNOT BE A CANDIDATE FOR A MEMBER OF THE JSW’S MANAGEMENT BORAD: |
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A Management Board Member submits his/her resignation to another Management Board Member or a commercial proxy with a copy to the Supervisory Board and the State Treasury – represented by the competent Minister exercising the rights attached to the State Treasury’s shares as long as the State Treasury remains a shareholder of the Company.
Management Board Member selected by JSW employees
If the average annual headcount in the Company exceeds 500 employees one Management Board member shall be elected by the Company employees, in accordance with the election bylaws adopted by the Supervisory Board. Results of the election are binding for the body authorized to appoint the Management Board, i.e. the Supervisory Board. No election of the employees’ representative to the Management Board of the Company does not constitute an obstacle for the Management Board to issue valid resolutions. Upon request of at least 15% of all the Company employees, a ballot shall be held to dismiss the 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 shall require supplementary election. The Supervisory Board shall call supplementary elections within three weeks after it obtains information about the occurrence of a circumstance justifying the holding of supplementary elections. The supplementary election should be held within one month after it is called by the Supervisory Board.
The Supervisory Board shall call an election of the Management Board member to be elected by the employees for the next term within two months from the elapse of the last full year of the Management Board’s term of office. Such election should be held within two months after they are called by the Supervisory Board.
The election referred to above shall be held in a secret ballot as a direct and universal election by the Election Commission appointed by Supervisory Board from among Company employees. The Commission may not comprise a candidate to become a Management Board Member or a previous Management Board Member elected by employees. Detailed regulation of this matter is included in the Articles of Association available on the website: www.jsw.pl.
Composition of the JSW Management Board
Tabela. Composition of the JSW Management Board at 31 December 2020 and changes to it
| FIRST AND LAST NAME | POSITION |
TERM IN POSITION |
|---|---|---|
| SKŁAD OSOBOWY ZARZĄDU JSW IX KADENCJI | ||
| Włodzimierz Hereźniak | President of the Management Board President of the Management Board appointed as acting Vice-President of the Management Board for Sales |
01.01.2020 - 12.02.2020 12.02.2020 - 31.12.2020 |
| Artur Dyczko | Vice-President of the Management Board for Strategy and Development entrusted with serving in the capacity of Vice-President of the Management Board for Technical Matters Vice-President of the Management Board for Technical and Operational Matters |
01.01.2020 - 20.01.2020 20.01.2020 – 31.12.2020 |
| Radosław Załoziński | Vice-President of the Management Board for Financial Matters | 01.01.2020 - 31.12.2020 |
| Rafał Pasieka | Vice-President of the Management Board for Sales | 01.01.2020 - 12.02.2020 |
| Tomasz Duda | Vice-President of the Management Board for Development | 13.02.2020 - 31.12.2020 |
| Artur Wojtków (elected by employees) | Vice-President of the Management Board for Employment and Social Policy | 01.01.2020 - 31.12.2020 |
CHANGES TO THE JSW MANAGEMENT BOARD IN 2020
- As of 20 January 2020, the JSW Supervisory Board changed the position of Mr. Artur Dyczko in the JSW Management Board by entrusting him with serving in the capacity of Vice-President of the Management Board for Technical and Operational Matters for the 10th term of office.
- On 12 February 2020, the JSW Supervisory Board:
- dismissed Mr. Rafał Pasieka, Vice-President of the Management Board for Sales, from the Management Board,
- entrusted Mr. Włodzimierz Hereźniak with the duties of acting Vice-President of the Management Board for Sales in the period from 12 February 2020 to the date of appointment of Vice-President of the Management Board for Sales. In this period, Mr. Włodzimierz Hereźniak continued to serve as the President of the JSW Management Board.
- On 12 February 2020, the JSW Supervisory Board made a decision to appoint Mr. Tomasz Duda as of 13 February 2020 to the position of Vice-President of the Management Board for Development for the 10th term of office.
CHANGES TO THE JSW MANAGEMENT BOARD AFTER 31 DECEMBER 2020
- On 18 January 2021, the JSW Supervisory Board:
- dismissed Mr. Włodzimierz Hereźniak, as of 18 January 2021, from the position of President of the Management Board,
- appointed Mr. Artur Dyczko as acting President of the Management Board from 18 January 2021 until the date of appointment of President of the Management Board,
- entrusted Mr. Radosław Załoziński with the duties of acting Vice-President of the Management Board for Sales from 18 January 2021.
- On 9 February 2021, the JSW Supervisory Board made a decision to appoint Ms. Barbara Piontek as of 1 March 2021 to the position of President of the Management Board for the 10th term of office.
- On 4 May 2021, the JSW Supervisory Board made a decision to appoint:
- Jarosław Jędrysek as the Vice-President of the Management Board for Financial Matters, as of 10 May 2021,
- Włodzimierz Hereźniak as the President of the Management Board for sales, as of 5 May 2021.
Tabela. Management Board Composition at publication of this report
| MEMBERS OF THE JSW MANAGEMENT BOARD | |
|---|---|
|
BARBARA PIONTEK President of the Management Board |
Doctor habilitatus, Associate Professor Barbara Piontek – President of the Supervisory Board of Pomorska Specjalna Strefa Ekonomiczna S.A., economist, Professor of WSB University in Dąbrowa Górnicza. For many years, she has been strategic adviser of companies from the sector of corporations and small and medium-sized enterprises. She is a market analyst and specialist on implementing new technologies, inventions and solutions as well as a valued expert on public management (at the central and local government levels), management and development of strategic industries as well as building business models and innovativeness of the economy. Among other things, she created development strategies, business plans for strategic investment projects, participated in international and Polish research and development projects. Graduate of the University of Economics in Katowice and the John Paul II Catholic University of Lublin, was awarded scientific degrees at the Kraków University of Economics and Wrocław University of Economics. She is a member, among others, of the Social and Economic Council attached to the Silesian Voivode as well as the “Program for Silesia” Steering Committee attached to the Silesian Voivode and the Executive Council for the Program for Silesia at the Prime Minister’s Office. Barbara Piontek is Associate Professor at the Chair of Management of the WSB University in Dąbrowa Górnicza. She has published over 200 works on her own and as a co-author, including research works, practical economic analyses and studies for business and expert opinions for the Sejm of the Republic of Poland and the Silesian Voivodeship. She has worked both in Poland and abroad, among other things, as strategic adviser in the Ministry of Digital Affairs, strategic adviser of research and development companies. She was President of the Supervisory Board of the Polish Mining Group (PGG), Supervisory Board Member of Tauron Polska Energia S.A. and Vice-President of Katowicka Specjalna Strefa Ekonomiczna S.A. She specializes in strategic management, economic policy, methodology of building development strategies, management in a period of transformation, innovativeness of the energy industry, management of sensitive services, processes of restructuring mining and metallurgy, development management and local entrepreneurship. Management area: As President of the Management Board, directs the work of the Management Board, convenes and presides over Management Board meetings. Oversees the Company’s business, particularly in the area of: Organisation and Management, Security, Communication and PR, and Corporate Social Responsibility, Legal, Audit and Control, Quality and Strategic Investments. |
|
JAROSŁAW JĘDRYSEK Vice-President of the Management Board for Financial Matters |
Graduate of the University of Economics in Katowice with a major in economics, organization of construction and investments and the economics of the sales of products and services. He also holds an MBA from the Warsaw University of Administration and Management. In addition, he also completed post-graduate courses of study in the operation of commercial banks at the University of Economics in Katowice and accounting and taxes at the University of Warsaw. He also completed many specialist courses, including courses on business risk management, risk management in the mining industry, financial assessment of investment projects and the principles, standards and methodologies in the corporate risk management system. He also took part in numerous managerial courses on banking. He passed an exam for candidates to be supervisory board members in State Treasury companies. From 1994 to 2005 he was associated with ING Bank Śląski. From 1994 to 2003 he worked in the Bank’s Controlling Department and in the Corporate Client Service Division. From 2004 to 2005 he served in the capacity of Director of the Przemyśl Branch in the ING Bank and later in its Oświęcim Branch. Since 2006 he has been associated with the mining industry. From 2006 to 2008 he served as the Finance Director of KGHM Polska Miedź S.A. – Ore Enrichment Unit Branch. From 2009 to 2016 he worked in Jastrzębska Spółka Węglowa S.A. at the following positions: Finance Director, Chief Accountant in KWK Zofiówka and then Director of the Finance Department in the JSW S.A. Management Board Office and then as the Economic Director of KWK Jas-Mos. From March to July 2016 he worked as the Finance Director in the Rudna Mines Branch at KGHM Polska Miedź S.A. From July 2016 to February 2019 he served in the capacity of Vice-President of the Management Board responsible for finance in Węglokoks S.A. From June 2019 to May 2021 he served as a management board member in Centrum Badania Jakości Sp. z o.o., a part of the KGHM Group. He has also been a supervisory board member: from 2017 to 2019 in Polska Grupa Górnicza and in 2016 to 2017 in Górnośląskie Towarzystwo Lotnicze – Pyrzowice Airport. Management area: He oversees JSW’s entire business, particularly controlling, finance, accounting and stock market relations. |
|
TOMASZ DUDA Vice-President of the Management Board for Development acting Vice-President of the Management Board for Technical and Operational Matters |
Mr. Tomasz Duda graduated from the Silesian University of Technology in Gliwice with his major in Deposit Mining Technique. In 2012, he also completed postgraduate studies in mine air-conditioning at the AGH University of Science and Technology in Kraków. In addition, he completed the Mining Managers School organized by the Polish Foundation for the Promotion of Human Resources.From the outset of his career he has been active in the mining industry. He started work in 1992 in the “Anna” mine owned by Rybnicka Spółka Węglowa, where he was employed on the position of a junior, medium-level and senior supervision officer. In 2003-2005 he continued his professional career working on different levels in the “Jankowice” and “Rydułtowy” mines and the Head Office of Rybnicka Spółka Węglowa S.A. and Kompania Węglowa S.A., where he was responsible for investments and public procurements. In 2005-2016, he worked in the “Rydułtowy-Anna” mine, among others on the position of Ventilation Department Manager and Deputy Head of Mine Operations. In 2016-2019, he was employed in Gliwice’s “Sośnica” mine owned by Polska Grupa Górnicza S.A. (PGG), first on the position of Chief Engineer and then Director of the mine. From August to October 2019, he was Vice-President of the Management Board for Technical Matters in Tauron Wydobycie S.A. Since October 2019 he has been employed in the PGG Head Office, most recently on the position of Management Board Representative for Asset Restructuring in PGG. Management area: He JSW’s entire business, particularly development, corporate governance and compliance. He oversees the Company’s entire business, particularly production, automation, IT, methane drainage, management of energy utilities, strategy and investments. |
|
WŁODZIMIERZ HEREŹNIAK Handluacting Vice-President of the Management Board for Sales [email protected] |
During his professional career he has been a member of numerous Supervisory Boards and was their chairman, among others in Haldex S.A., Koksownia Przyjaźń Sp. z o.o., Jastrzębska Spółka Węglowa S.A. and C&C GmbH Duisburg. He is the author and co-author of numerous industry publications in Poland and abroad. Management area: He oversees JSW’s entire business, particularly trade in coal, coke and carbon-related products, market forecasts and analyses, transport. |
|
ARTUR WOJTKÓW Vice-President of the Management Board for Employment and Social Policy |
Lawyer, graduate of the University of Silesia in Katowice. He also completed post-graduate studies in social labor dialog at the University of Economics in Katowice and in management of industrial occupational health and safety at the Silesian University of Technology in Gliwice.He has been associated with Jastrzębska Spółka Węglowa S.A. since 1995. From 1995 he served as Head of the Organizational and Legal Department and then from 1999 to 2009 as Director for Labor at the Borynia Coal Mine. Since 2009, he has served as Vice-President of the JSW S.A. Management Board for Employment and Social Policy. Management area: He oversees the Company’s entire business, particularly in the area of labour, wages, property management and human resources management, Integrated Management System and Risk Management. |
Graduated from the Mining Faculty at the Silesian University of Technology in Gliwice. He started his professional career in 1977 as a technical and research employee at the Non-Ferrous Metal Institute in Gliwice. In 1982-1993 he commenced his work in mining in KWK Knurów, starting at the position of crew head and ending at the position of chief engineer. He then took the position of President of the Management Board of Węglokop Sp. z o.o. and he was the Deputy Director of the Marketing Department in Gliwicka Spółka Węglowa S.A. He has many years of management experience, among others in such companies 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, Przedsiębiorstwo Energetyki Cieplnej S.A. in Jastrzębie-Zdrój and TAURON Ciepło Sp. z o.o. From July 2019 to January 2021 he served in the capacity of President of the Management Board of Jastrzębska Spółka Węglowa S.A.
Compensation system for Management Board Members
The rules governing the shaping of the compensation of the Parent Company’s Management Board members have been adopted the JSW Extraordinary Shareholder Meeting and Supervisory Board in compliance with the regulations laid down in the Act on the Rules for Shaping the Compensation of Persons Managing Certain Companies. and are consistent with the “Compensation Policy for the Management Board and Supervisory Board of Jastrzębska Spółka Węglowa S.A.” adopted by the Shareholder Meeting on 31 August 2020.
Contracts are concluded for the provision of management services with Management Board Members containing the obligation for Management Board Members to act in person, regardless of whether they act within the framework of their own business activity. With the Management Board Members, no separate agreements were signed that would provide for compensation in the event of expiration of the Manager’s mandate.The total remuneration for the Management Board Member is composed of the fixed part, constituting the monthly base salary– Fixed Compensation and variable part, constituting variable Remuneration for the Company’s financial year – Variable Compensation.The amount of the monthly Fixed Compensation of Management Board Members has been set by the Supervisory Board, subject to the following provisions of the Shareholder Meeting resolution:
a) Fixed Compensation of the President of the Management Board will be set within the range from 7 to 15 times the base amount referred to in Article 1 Section 3 Item 11 of the Act on the Rules for Shaping the Compensation of Persons Managing Certain Companies of 9 June 2016;
b) Fixed Compensation of the remaining Management Board Members will be set within the range from 7 to 12 times the base amount referred to in Article 1 Section 3 Item 11 of the aforementioned Act.
In accordance with the decision made by the Supervisory Board, for rendering management services and discharging other obligations ensuing from the contract, the Manager is entitled to the Total Compensation consisting of the following:
a) monthly base compensation (Fixed Compensation) per calendar month:
- President of the Management Board – PLN 60,000.00,
- every other Management Board Member – PLN 50,000.00.
The Fixed Compensation includes also compensation for the transfer of property rights to the copy or medium of the work and economic copyright to the work in the fields of use specified in the contract, granting all permits and authorizations to the extent stipulated in the contract and use by the Company of an invention, utility model or industrial design created by the Manager,
b) supplementary compensation for the relevant financial year (Variable Compensation) contingent on the degree of achievement of the management objectives, which must not exceed 100% of the annual Fixed Compensation of the Manager in the previous financial year, for which the Variable Compensation is calculated.
The Management Board Member may not receive any remuneration for serving as a member of any corporate body of a subsidiary of the Company which is a member of the same Group within the meaning of Article 4(14) of the Competition and Consumer Protection Act of 16 February 2007.
The Fixed Compensation or Variable Compensation will be paid by the Company after deduction of the Manager’s public dues payable by the Company from the amount of the Fixed or Variable Compensation.
If the applicable provisions of law require that, despite the fact that the Manager does not run his/her own business activity, the Fixed Compensation, the Variable Compensation or benefits payable by virtue of severance pay or non-competition clauses are subject to VAT at the applicable rate, such VAT will be added on top the amount in question. The above will be also applicable with regard to other benefits payable by the Company to the Manager pursuant to the contract. If it becomes mandatory for the Manager to pay VAT for any past periods (in connection with the benefits referred to in this Section), the Company undertakes to pay to the Manager the amount equivalent to such tax arrears with interest as well as other payments due to the relevant bodies in connection with such arrears.
The Fixed Compensation for a given month is paid within 7 days from the date of delivery to the Company of a correctly issued bill to be delivered to JSW by the Manager within 7 days upon end of the calendar month of performance of services, by transfer to a bank account indicated by the Manager.
The Variable Compensation depends on the level of achievement of the management objectives and must not exceed PLN 480,000.00 per financial year, i.e. no more than PLN 40,000.00 in each month of the financial year.
The Manager will also be entitled to the 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.
The total annual Total Compensation of the Manager (i.e. the sum of the annual Fixed Compensation and the Variable Compensation for the given financial year) must not exceed the product of the amount of PLN 100,000.00 for the President of the Management Board and PLN 90,000.00 for Vice-Presidents of the Management Board and the number of calendar months for which the Manager performed his/her duties. In case of calendar months in which the Manager did not perform his/her duties during a full calendar month, the aforementioned amount is adjusted on a pro rata basis to the number of days of performance of duties in the relevant month.
The statutory Management Objectives are laid down in Article 4(7) of the Act on the Rules for Shaping the Compensation of Persons Managing Certain Companies, and their accomplishment is the precondition that must be fulfilled to enable payment of the Variable Compensation for the respective financial year. Other than the statutory Management Objectives, general and additional Management Objectives are established by a resolution of the Shareholder Meeting.
The Company’s Supervisory Board establishes (by way of a resolution) detailed Management Objectives for the respective financial year and defines the weights for such objectives along with objective and measurable criteria of their accomplishment and settlement (KPIs) while giving consideration to the following:
a) Variable Compensation is payable to the respective Management Board Member after the Management Board activity reports and the financial statements for the preceding financial year are approved and the Management Board Member is granted a discharge on the performance of his duties by the Shareholder Meeting.
b) Payment of a portion of the Variable Compensation may be deferred for a period provided for in a resolution of the Shareholder Meeting, depending on the fulfillment of conditions by the specified deadline in accordance with the established Management Objectives. Then such portion of the Variable Compensation may be disbursed in full or in part at the end of the settlement period.
c) The Variable Compensation is calculated on a pro rata basis. Such pro rata calculation depends on the number of days of the provision of services by the Management Board Member in the respective financial year.
d) Satisfaction of the conditions for the Variable Compensation of individual Management Board Members for whom Management Objectives were set for the given financial year and who discharged a function in the financial year being assessed, is ascertained by the Supervisory Board by determining the amount due, on the basis of financial statements reviewed by an audit firm and other documents depending on the Objectives set.
The Supervisory Board each time adopts clear, comprehensive and diversified criteria for the adoption of weights for each of the Management Objectives in the Variable Compensation as well as objective and measurable criteria for their accomplishment and settlement, both in relation of the Company’s financial and non-financial performance. When establishing the detailed Management Objectives for the respective financial year, the Supervisory Board, taking into consideration the Company’s line of business, each time and to the greatest possible extent takes into account the public interest, the Company’s contribution to environmental protection and the taking of actions aimed at preventing and counteracting the adverse social effects of the Company’s business.
The Variable Compensation is paid subject to the accomplishment of the Management Objectives by the respective Manager, which is assessed by the Supervisory Board while giving consideration to the weights of these Objectives and the objective and measurable criteria of their accomplishment and settlement (KPIs).
The Variable Compensation, provided that it is due, will be paid within 7 days from the date of delivery to the Company of a correctly issued bill by transfer to a bank account indicated by the Manager.
The Parent Company will be entitled to put forward a claim for reimbursement of the Variable Compensation paid if, following such disbursement, it becomes apparent that the Variable Compensation was granted to the Manager on the basis of data that subsequently turned out to be untrue.
In the case when the resolution of the Supervisory Board that defines the Management Objectives for the given year is not passed, the Management Objectives for such year are not set, and the Manager is not entitled to any Variable Compensation. Furthermore, in the cases laid down in the contract JSW may charge the Manager with a contractual penalty.
Tabela. Management Board compensation for 2020 (PLN)
| FIRST AND LAST NAME | PERIOD | COMPENSATION – MANAGEMENT SERVICES* | VARIABLE COMPENSATION FOR 2020** | BENEFITS, INCOME FROM OTHER SOURCES*** | TOTAL |
|---|---|---|---|---|---|
| Włodzimierz Hereźniak | 01.01.-31.12.2020 | 720 000,00 | - | - | 720 000,00 |
| Artur Dyczko | 01.01.-31.12.2020 | 600 000,00 | - | - | 600 000,00 |
| Radosław Załoziński | 01.01.-31.12.2020 | 600 000,00 | - | - | 600 000,00 |
| Artur Wojtków | 01.01.-31.12.2020 | 600 000,00 | - | - | 600 000,00 |
| Tomasz Duda | 13.02.-31.12.2020 | 528 333,33 | - | - | 528 333,33 |
| Rafał Pasieka | 01.01.-12.02.2020 | 70 000,00 | - | 150 000,00 | 220 000,00 |
| Tomasz Śledź | - | - | 125 000,00 | 125 000,00 | |
| RAZEM | 3 118 333,3 | - | 275 000,00 | 3 393 333,33 |
**This item comprises the variable compensation for 2020 which will be paid out provided that the Managers fulfill their Management Objectives in accordance with the resolution of the Supervisory Board, after the Company’s Management Board activity report and the Company’s financial statements for 2020 have been approved and the Managers have been granted a discharge on the performance of their duties as Management Board Members by the Shareholder Meeting.
***This item includes benefits payable after the expiration of the management contract (severance pay, compensation for refraining from competitive activity).
In accordance with the Compensation Policy for the Management Board and Supervisory Board of Jastrzębska Spółka Węglowa S.A. prevailing since 31 August 2020 a Management Board Member may not receive any compensation for serving as a member of any corporate body of the Company’s subsidiary within the Group.
|
FIRST AND LAST NAME |
PERIOD | REWARD | COMPENSATION – MANAGEMENT SERVICES* | VARIABLE COMPENSATION FOR 2019** | BENEFITS, INCOME FROM OTHER SOURCES*** | INCOME EARNED IN SUBSIDIARIES | TOTAL |
|---|---|---|---|---|---|---|---|
| Włodzimierz Hereźniak | 01.08.-31.12.2019 | - | 300 000,00 | 145 584,00 | - | - | 300 000,00 |
| Artur Dyczko | 01.01.-10.01.2019 04.07.-31.12.2019 | - | 313 333,34 | 152 054,41 | 150 000,00 | - | 463 333,34 |
| Rafał Pasieka | 04.07.-31.12.2019 | - | 296 666,67 | 143 966,39 | - | - | 296 666,67 |
| Radosław Załoziński | 04.07.-31.12.2019 | - | 296 666,67 | 143 966,39 | - | - | 296 666,67 |
| Artur Wojtków | 01.01.-31.12.2019 | - | 601 666,67 | 291 976,79 | - | - | 601 666,67 |
| Tomasz Śledź | 01.01.-18.12.2019 | - | 581 666,67 | 28 271,19 | 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 | 1 159 819,17 | 985 000,00 | - | 3 813 666,69 |
Table. Compensation of the Supervisory Board Member seconded to temporarily perform the duties of the Vice-President of the
| FIRST AND LAST NAME | PERIOD |
COMPENSATION – MANAGEMENT SERVICES* |
MANAGEMENT SERVICES | VARIABLE COMPENSATION | BENEFITS, INCOME FROM OTHER SOURCES |
tutaj INCOME EARNED IN 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 |
The variable compensation for 2018 (charged to costs of 2018) was paid in 2020 in the total amount of PLN 1,511,863.55 to:
- Mr. Robert Ostrowski: PLN 302,372.71,
- Mr. Tomasz Śledź: PLN 302,372.71,
- Mr. Artur Dyczko: PLN 302,372.71,
- Ms. Jolanta Gruszka: PLN 302,372.71,
- Mr. Artur Wojtków: PLN 302,372.71.
Remunerations of the Management Board Members of the JSW Group
The rules governing the determination of remunerations of the Management Board Members of the Group companies have been adopted by way of resolutions of the General Meeting or Shareholder Meeting of the respective company, and then resolutions of the relevant Supervisory Board in compliance with the regulations laid down in the Act on the Rules for Shaping the Compensation of Persons Managing Certain Companies of 9 June 2016. The total compensation of the Management Board Members consists of a fixed component constituting his or her monthly base salary and a variable component constituting additional compensation for the Company’s financial year. The variable portion depends on the level of achievement of the management objectives. The Management Board Members of the subsidiaries of JSW executed contracts for provision of management services. The JSW Group Compensation Policy which regulates the compensations of, inter alia, the Management Board Members of the Group companies has been in effect since 12 August 2019.
Non-competition obligation with respect to Managers in JSW
The scope of activities competitive to the Company’s activity is defined in the management contract. The non-compete clause during the contract term has been defined in the management contract and the Manager is not entitled to any additional compensation for refraining from competitive activity during the contract term. The management contracts signed with the Management Board Members also include provisions prohibiting competition after the contract termination.
The Manager additionally undertakes, after the contract is terminated, if he has discharged 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 competitive 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 ban after the function ends, in the total amount equal to 6 times 50% of the monthly Fixed Compensation. The compensation will be payable in 6 equal monthly installments, 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 the compensation is due.
A management contract may be terminated, after the function ends, in the part concerning the non-compete clause at any time by virtue of an agreement of the Parties. The agreement must be executed in writing, otherwise being null and void, and must define the notice period which may not be longer than 3 months or be later than the end of the non-compete obligation after the function ends. In such a case, the entitlement to compensation expires on the day the contract is terminated in the relevant scope. The contract may be also terminated in the part concerning the non-compete clause with immediate effect at any time upon the Company’s notice in the event of a documented violation of the no-compete clause by the Manager after his/her function ends. The contract termination notice must be in writing, otherwise being null and void, and the right to receive compensation expires on the date the notice of termination of the non-compete clause after the function ends is delivered to the Manager, with immediate effect.
In the event of expiry of the non-compete clause after expiry of the function and in the event of termination of the contract, on the terms laid down in the contract, the monthly installment of the compensation for such month will be decreased to the amount following from division of the monthly installment amount by 30 days and multiplying it by the number of days on which the non-compete clause applied after expiry of the function in such month.
The non-competition obligation after the function ends does not apply if, before the end of the term of the non-compete ban, the Manager undertakes to perform a function in a company mentioned in Article 1 Section 3 Item 7 of the Act of 9 June 2016 on the Rules for Shaping the Compensation of Persons Managing Certain Companies, or in the Company’s subsidiary in the Group within the meaning of Article 4 Item 14 of the Act of 16 February 2007 on Competition and Consumer Protection, or undertakes to work or provide services to such company pursuant to an employment contract, mandate contract, work product contract or otherwise. In such a case, the entitlement to compensation expires on the day the Manager takes up the function, undertakes to work or provide services for the benefit of such company.
If the non-compete clause is breached after expiry of the function during its term (subject to a reservation that the taking up of a function as referred to above is not considered a breach of the non-compete clause, provided that the Company is informed thereof in advance), the ban ceases to apply and the Company may demand the Manager to pay a contractual penalty in the amount of 100% of the total amount of compensation within 14 days of receipt of the Company’s demand to the bank account specified by the Company. The payment of contractual penalty shall not preclude the Company’s right to pursue damages in excess of the contractual penalty on general terms.
The execution of a non-competition agreement after the termination of the contract for the provision of management services is unacceptable.
Non-competition obligation with respect to Managers in the JSW Group
The non-compete clause applicable during the term of provision of management services by a Management Board Member of a subsidiary of the Group is established in the contract for the provision of management services. The Management Board Members are not entitled to any additional compensation for refraining from competitive activity. The management contracts signed with the Management Board Members also include provisions prohibiting competition after the contract termination. This prohibition prevails under the condition the Management Board Member has discharged the function for a period of at least 6 months from the date of the Management Board Member’s appointment to the Company’s Management Board over the period of 4 months from the date he/she ceases to perform his/her function. The Management Board Member is entitled to compensation for complying with the non-competition ban after the function ends.
Non-financial remuneration components due to JSW’s Management Board Members
The non-financial remuneration components due to Management Board Members comprise:
- providing the Management Board Member, at the Company’s expense, with technical equipment and resources such as:
- office space together with equipment,
- laptop,
- means of communication, including a mobile phone,
- means of communication, including mobile phone, car to be used by the Manager for private purposes on the rules set separately by the Supervisory Board, however if the Manager uses a dwelling on the rules following from the contract, then if, on the days when services are performed in the Company’s seat, the Manager drives to the place of residence and back in a vehicle provided by the Company, then the Manager will be charged a fee of PLN 400 per ride (to the place of residence or back),
- dwelling, provided that the Manager has a place of residence that is more than 100 km away from the Company (in such case the Company will cover the costs associated with the use of the dwelling up to PLN 2,500.00 per calendar month net, i.e. without the VAT,
- covering or reimbursing costs related to the provision of services by Management Board Members, in particular, such as the costs of travel and accommodation,
- covering or reimbursing, with the Supervisory Board’s consent, other costs related to the provision of services to the extent resulting from the contract for the provision of management services,
- covering or reimbursing expenses incurred and necessary for the proper provision of services in accordance with a standard appropriate to the function discharged, after they have been properly documented and their incurrence has been justified, including by demonstrating the connection with and need for the proper provision of services,
- covering or reimbursing costs of the Manager’ individual training associated with the subject matter of the contract and the Manager’s contractual obligations up to PLN 20,000 per calendar year of the term of the contract.
During the term of the management contract the Supervisory Board allowed the possibility of using the assigned company cars for the Managers’ private purposes, both for local and long-distance domestic rides, on the rules laid down in the contract. The use of the company car for private purposes is paid for.
The Supervisory Board granted each Management Board Member the right to be insured against liability for the function discharged and the Management Board Member is entitled to a paid break in the provision of management services.
Information on any liabilities under pensions and similar benefits
By virtue of the discharge of the functions entrusted to them, JSW Management Board Members are not entitled to participate in any retirement and disability or early retirement plans.
Management service contracts entered into with Members of the Group companies’ Management Boards do not contain the provisions concerning liabilities under pensions and similar benefits.
Competences of the JSW Supervisory Board
The Supervisory Board operates in compliance with the applicable provisions of law, the Articles of Association, Commercial Company Code, and the Bylaws of the Supervisory Board which are adopted by it. The powers of the Supervisory Board are set forth in the Company's Articles of Association available on the website: www.jsw.pl. In performance of its duties, the Supervisory Board also follows the guidelines of the Prime Minister contained in the document entitled Principles of Ownership Supervision over Companies with State Treasury shareholding, and the rules included in the Code of Best Practice for WSE Listed Companies.
The powers of the Supervisory Board include in particular:
- approving the Management Board Bylaws and issuing an opinion on the Organizational Bylaws defining the organization of the Company’s enterprise,
- appointing and dismissing the Company’s Management Board members, without prejudice to § 11 section 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 discharge their functions,
- signing, terminating and amending agreements with Management Board Members, establishing the rules for hiring and remunerating them and setting their remuneration, without prejudice to the powers of the Company’s Shareholder Meeting arising from the mandatory provisions of law,
- selection of an audit firm to audit the financial statements referred to in items 7 and 8 below,
- evaluating the financial statements in terms of their compliance with the ledgers and documents and with the facts,
- evaluating the Company’s activity report and the Management Board’s motions on the distribution of profit or the coverage of loss,
- submitting written reports on the results of the activities referred to in items 7 and 8 above to the Shareholder Meeting,
- submitting to the Shareholder Meeting the annual concise evaluation of the Company’s standing, taking into account the evaluation of the internal audit system and the risk management system, as well as the annual report on Supervisory Board’s work,
- giving an opinion on matters submitted to the Shareholder Meeting,
- approving the Company’s operational strategy,
- opining the Company’s annual plans,
- approving the Bylaws governing the operation of the internal control system,
- acceptance by the Management Board of reports on representation expenses, expenses on legal services, marketing services, public relations and social communication services and management consulting services as well as on the application of the best practices referred to in Article 7 Section 3 of the Act on the Rules for Managing State Property of 16 December 2016,
- issuing opinions on the amendments to the rules governing the disposal of non-current assets set forth in §291 of the Articles of Association,
- approving the compensation policy for the Group,
- issuing opinions on the rules for sponsorship activity conducted by the Company and evaluating efficiency of such sponsorship activity.
In addition, the Supervisory Board’s powers shall include giving consent to the Management Board for:
- setting up another company, subscribing for, purchasing or selling shares in other companies, while the Supervisory Board’s consent referred to in this item 1 is not required for the following:
- subscription for or acquisition of shares in another company in an amount lower than 1/10 of the share capital of such company,
- sale of shares in another company in which the Company holds less than a 1/10 share in the share capital,
- subscribing for or acquiring shares in another company in return for the Company's accounts receivable as part of proceedings ended with a composition or settlement with creditors, as part of proceedings ending in an arrangement or settlement with creditors,
- selling shares acquired or subscribed for by the Company in return for the Company's accounts receivable as part of proceedings ended with a composition or settlement with creditors,
- subscription for, acquisition or sale of shares in another company whose shares are listed on a regulated market,unless the value of such shares exceeds PLN 20.0 million;
- establishment of foreign branches,
- purchase and sale of fixed assets whose value exceeds PLN 20.0 million,
- contracting contingent liabilities, including the Company’s granting financial guarantees and sureties whose value exceeds PLN 20.0 million,
- disbursement of interim dividends,
- issuance of promissory notes with the value exceeding PLN 20.0 million,
- purchase or sale of a real property or a perpetual usufruct right or of a share in a real property or in a perpetual usufruct right whose value exceeds PLN 20.0 million,
- disposal of the non-current assets within the meaning of the provisions of the Accounting Act of 29 September 1994, classified as intangible assets, property, plant and equipment or long-term investments, including a contribution made to a company or cooperative, if the market value of such assets exceeds PLN 20.0 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 provision of such assets for use by another entity, for a period longer than 180 days during a calendar year, on the basis of a legal transaction, if the market value of the subject matter of the legal transaction exceeds PLN 500.0 thousand or 5% of total assets, were the provision for use in the case of:
- urental, 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 shall be construed as the value of benefits for:
- one year – if the provision of the asset takes place on the basis of an agreement entered into for an indefinite term;
- the entire term of the agreement – in the case of agreements entered into for a definite term, - 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 shall be 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 provision of the asset takes place on the basis of an agreement entered into for an indefinite term;
- the entire term of the agreement – in the case of agreements concluded for a definite term,
- urental, 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 shall be construed as the value of benefits for:
- acquisition of non-current assets within the meaning of the Accounting Act of 29 September 1994, with a value exceeding:
- PLN 20.0 million,
- 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,
- subscription for or purchase of shares in another company with a value exceeding:
- PLN 20.0 million,
- 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,
- disposal of shares in another company with a market value exceeding:
- PLN 20.0 million,
- 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,
- the voting instructions for the Shareholder Meetings of companies in which the Company holds at least 50% of all shares, in the following matters:
- the company setting up another company,
- amending the company’s articles of association or articles of partnership and the company’s line of business,
- merger, transformation, demerger, dissolution or liquidation of the company,
- increase or decrease of the company’s share capital.
- sale or lease of the company’s business or an organized part thereof or establishment of a limited right in rem thereon,
- purchase and sale of real property or right of perpetual usufruct or interest in real property or in a right of 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,
- 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 paragraph, if their value exceeds 1/10 of that company’s share capital, excluding companies in which the share capital is lower than PLN 5.0 million,
- the company entering into a credit facility, loan agreement, guarantee agreement or some other similar agreement, if their value exceeds 1/10 of the company’s share capital but no less than PLN 5.0 million,
- issue of any type of bonds,
- purchase of treasury shares in the situation set forth in Article 362 § 1 item 2 of the Commercial Company Code and purchase of shares in the situation defined in Article 200 § 1 of the Commercial Company Code,
- compulsory redemption of shares pursuant to Article 418 of the Commercial Company Code,
- retirement of shares,
- decisions on claims to remedy damages incurred when setting up a company or in its management or oversight,
- 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,
- setting the compensation of Members of Management Boards and Supervisory Boards,
- in the matters mentioned in Article 17 Section 1 of the Act on the Rules for Managing State Property of 16 December 2016, subject to § 30 section 6 of the Articles of Association,
- regarding changes in the Supervisory Boards of Group companies in respect of representatives of the Company.
- execution of agreements on legal services, marketing services, public relations and social communication services and management consulting services if the total fee for such services provided under such agreement or other agreements entered into with the same entity exceeds PLN 500.0 thousand net per annum,
- execution of agreements on legal services, marketing services, public relations and social communication services and management consulting services resulting in an increase in the fee above the amount referred to in Item 13,
- conclusion of agreements on legal services, marketing services, public relations and social communication services and management consulting services in which the maximum fee is not defined,
- executing a donation or other agreement having a similar effect, the value of which exceeds PLN 20.0 thousand 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,
- release of a debt or other agreement having a similar effect, the value of which exceeds PLN 50.0 thousand 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.
In addition to the matters set forth by the provisions of law and the Articles of Association, the rights, powers and duties of the Supervisory Board also include preparation of annual reports submitted by the Ordinary Shareholder Meeting in accordance with the Code of Best Practice for WSE Listed Companies 2016.
Description of activities of the JSW Supervisory Borad
In performance of its duties, the Supervisory Board also follows the guidelines of the Prime Minister contained in the document entitled Principles of Ownership Supervision over Companies with State Treasury shareholding, and the rules included in the Code of Best Practice for WSE Listed Companies.
Meetings of the Supervisory Board are held in the Company’s head office or in another place specified in the notice convening the meeting.
The Chairperson may order a break in the meeting of the Supervisory Board. In such a case, the Chairperson man may also change the place of the meeting, in which case the Company will be required to ensure that the meeting may continue in the new place. The notice on convening the Supervisory Board meeting together with the planned agenda and information materials pertaining to matters covered by the agenda are delivered to Supervisory Board Members at least 7 days before the date of the meeting.
In justified cases, documents may continue be sent out gradually later.
The Chairperson may shorten the time limit for the delivery of a notice on convening a Supervisory Board meeting to 2 days, at the same time specifying the acceptable delivery method.
The agenda of a convened meeting may be expanded only with the consent of all Supervisory Board Members.
An item may be removed from the agenda of a convened meeting with the consent of an ordinary majority of Supervisory Board Members. Supervisory Board meetings can be attended by Management Board Members, the company’s employees and other persons whose participation in the meeting is justified, invited by the Chairperson or 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 Supervisory Board Chairperson convenes Supervisory Board meetings and presides over them, and if the Chairperson is unable to convene a meeting, then his/her Deputy Chairperson or the person named by the Chairperson shall do so. The first meeting of a newly elected Supervisory Board shall be convened and opened by the President of the Management Board. The Supervisory Board will hold meetings at least once every two months. The Supervisory Board Chairperson shall be obligated to convene a Supervisory Board meeting at the written request of a Supervisory Board member or at the written request of the Company’s Management Board. The meeting should be held within two weeks after the submission of the request.
The Supervisory Board adopts resolutions by an absolute majority of votes present at the meeting, in the presence of at least half the number of the Supervisory Board members, provided that all Supervisory Board members have been invited to attend the meeting. An absolute majority of votes means more than one half of the votes cast. In the event of a tie vote, the Supervisory Board Chairperson’s vote shall prevail. Supervisory Board members may participate in adopting Supervisory Board resolutions by casting their vote in writing through another Supervisory Board member. Voting in writing cannot apply to matters introduced to the agenda at a Supervisory Board meeting. Supervisory Board members may adopt resolutions by following a written procedure or via remote means of direct communication. A resolution shall be valid if all Supervisory Board Members have been notified of the content of the draft resolution and no Supervisory Board Member has requested that the resolution be adopted at the next meeting of the Supervisory Board. Supervisory Board members may also participate in the meeting via teleconference or videoconference on the rules prescribed in the Supervisory Board Bylaws.
Supervisory Board resolutions are adopted in an open ballot. Secret ballots are ordered in personnel matters or upon request of at least one of the persons eligible to vote. Resolutions adopted by the Supervisory Board are minuted. The Company is required to provide the Supervisory Board with office and administrative support.
At the request of the Management Board, the Supervisory Board shall permit a Management Board Member to hold positions in corporate authorities of companies in which the Company has an ownership interest and to collect remuneration for such work.
The Supervisory Board may use the services of external law firms, advisers, experts or consultants. In such a case, the Chairperson submits a request to the Management Board for the execution of an agreement by the Company with a law firm, adviser, expert or consultant, at the same time specifying the services that should be covered by the agreement. The Company incurs the costs of rendering these services.
The Supervisory Board held 9 meetings in 2020 and 6 meetings in the first quarter of 2021.
Appointing and dismissing the JSW’s Supervisory Board Members
According to the Articles of Association, the Supervisory Board consists of at least six Members. The Shareholder Meeting shall specify the number of Supervisory Board Members. The Shareholder Meeting determined the number of Supervisory Board Members to be 12. If Supervisory Board members are elected by way of separate group voting, the number of Supervisory Board members is set by the Shareholder 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 shall expire simultaneously with the expiration of the mandates of the remaining Supervisory Board Members. The Supervisory Board selects (from among its members) and dismisses in a secret ballot the Chairman, the Deputy Chairman and the Secretary of the Supervisory Board.
In 2020, provisions of the Articles of Association were in force according to which Supervisory Board Members exercise their rights and perform their duties in person, are appointed for a joint term of office, which lasts three years.
On 19 February 2021 the Extraordinary Shareholder Meeting of JSW adopted a Resolution to make changes to the Company’s Articles of Association. The resolution, among other things, extended the period of joint term of office of the Supervisory Board from three to four years, starting from the current 10th term of office of the Supervisory Board. The amendments to the Articles of Association were registered in the National Court Register on 26 February 2021.
The Shareholder Meeting appoints and dismisses Supervisory Board Members, with the exception of the situations described in the Articles of Association. A Supervisory Board Member shall submit a resignation in writing to the Management Board at the Company’s address.
Since the date of introduction of JSW’s shares to trade on a regulated market, in the period during which the State Treasury, including subsidiaries of the State Treasury, holds JSW’s shares carrying voting rights of at least 34% of the total number of votes in the Company plus one vote, the State Treasury has been entitled to appoint and to dismiss Supervisory Board Members of a number equal to half the total number of Supervisory Board members set by the Shareholder Meeting (in the event this number is fractional, it shall be rounded down to a whole number) plus one, with the reservation that the State Treasury is excluded from the vote in the Shareholder Meeting 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 Article 385 § 6 of the Commercial Company Code as well as in the event of votes on appointing or dismissing the 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 Shareholder 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 Shareholder Meeting.
Supervisory Board members are appointed and dismissed by the State Treasury 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 the Rules for Managing State Property.
Supervisory Board Members elected by JSW employees
According to the Articles of Association, JSW employees and the employees of the subsidiaries have the right to elect to the Supervisory Board: two members in a Supervisory Board composed of up to six members, three members in a Supervisory Board composed of between seven and ten members and four members in a Supervisory Board composed of eleven or more members. The results of elections are binding on the Shareholder Meeting. The Supervisory Board shall call an election of Supervisory Board members elected by the Company employees and the employees of all its subsidiaries for the next term of office within two months after the elapse of their last full financial year of office. The Supervisory Board shall adopt election bylaws which shall include a detailed procedure for electing and dismissing Supervisory Board Members elected by employees and for holding the supplementary election. The election shall be held in a secret ballot as a direct and universal election by the Election Commission appointed by the Supervisory Board from among the Company employees and the employees of all its subsidiaries. Supervisory Board members elected by the employees may not be appointed to the Commission.
At the written request of at least 15% of all JSW employees and the employees of all its subsidiaries, a vote shall be held in the matter of dismissing a Supervisory Board member elected by the employees. Such a dismissal, death or any other important reason that decreases the number of Supervisory Board members elected by Employees shall require supplementary elections. The rules of election is determined in the Supervisory Board Bylaws. The Supervisory Board shall call a supplementary election within three weeks after the Supervisory Board is notified of the occurrence of a circumstance justifying the holding of an election.
The election should be held within one month after it is convened by the Supervisory Board. In the event the number of Supervisory Board Members falls below the required minimum specified in § 15 section 4 of the Articles of Association, the Management Board shall call a supplementary election and appoint an Election Commission. Until the composition of the Supervisory Board is supplemented, the Supervisory Board shall act in its then current composition.
Independence criterion
At least one Member of a Supervisory Board consisting of up to twelve Members or at least two Members of a Supervisory Board consisting of thirteen or more Members should satisfy the requirements of independence for a Supervisory Board Member within the meaning of the 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), in consideration of additional requirements arising out of the Code of Best Practice for WSE Listed Companies.
A candidate to be an independent Supervisory Board member shall submit to the Company, before his or 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 shall promptly inform the Company about this fact. Information about the then current number of independent Supervisory Board members shall be made public by the Company.
In a situation of failing to satisfy the requirements referred to in the Articles of Association regarding the independence of the Supervisory Board Members, the Company’s Management Board shall be obligated to convene a Shareholder Meeting immediately and place an item in the Shareholder Meeting agenda concerning changes in the Supervisory Board composition. Until the moment of making changes to the Supervisory Board composition, aiming at adjusting the number of independent members of the Supervisory Board to the requirements prescribed in the articles of association, the Supervisory Board shall act in the previous composition.
No Supervisory Board member may perform any activities contradicting his or her duties or potentially leading to a suspicion of partiality or pursuit of self-interest.
Composition of the JSW Supervisory Board
Tabela. During the financial year, the Supervisory Board, 10th term of office, was composed as follows
|
FIRST AND LAST NAME |
POSITION |
TERM IN POSITION |
|---|---|---|
| Halina Buk | Chairwoman of the Supervisory Board | 01.01.2020 – 31.12.2020 |
| Alojzy Nowak | Member | 01.01.2020 – 31.12.2020 |
| Konrad Balcerski | Member | 01.01.2020 – 29.10.2020 |
| Jolanta Górska | Member | 01.01.2020 – 31.12.2020 |
| Stanisław Prusek | Member | 01.01.2020 – 31.12.2020 |
| Robert Tomanek | Member | 01.01.2020 – 21.01.2020 |
| Izabela Jonek-Kowalska | Member | 20.03.2020 – 31.12.2020 |
| Michał Rospędek | Member | 29.10.2020 – 31.12.2020 |
| Supervisory board members elected by employees: | ||
| Robert Kudelski | Secretary of the Supervisory Board | 01.01.2020 – 31.12.2020 |
| Paweł Bieszczad | Member | 01.01.2020 – 31.12.2020 |
| Tadeucz Kubiczek | Member | 01.01.2020 – 31.12.2020 |
| Arkadiusz Wypych | Member | 01.01.2020 – 31.12.2020 |
Changes in the Supervisory Board in 2020
- On 20 January 2020, Mr. Robert Tomanek tendered his resignation from the function of a JSW Supervisory Board Member, effective as of 21 January 2020,
- On 29 October 2020, the Minister of State Assets, by way of statements submitted to JSW:
- dismissed Mr. Konrad Balcerski from JSW’s Supervisory Board as of 29 October 2020,
- appointed Mr. Michał Rospędek to JSW’s Supervisory Board as of 29 October 2020.
Tabela. Composition of the Supervisory Board of the 10th term of office at the time of preparing this report
| MEMBERS OF JSW’S SUPERVISORY BOARD | |
|---|---|
|
HALINA BUK Position: Supervisory Board Chairperson Represents: State Treasury |
Professor and Ph.D. Hab. of economics, specialist, researcher and practitioner in the fields of corporate accounting and finance. Author or co-author of over 200 published monographs, scientific articles and academic textbooks, tens of scientific, research and commissioned papers on economics, and corporate organization, restructuring programs and financial planning. Academic lecturer at the University of Economics in Katowice and the Poznań School of Banking in MBA, doctoral and postgraduate courses, on subjects such as financial accounting, management accounting, financial analysis, financial reporting, consolidated reporting, controlling. She has extensive experience in educating young academic staff, having served as the promoter of holders of 25 Ph.D. degrees in economics originating from the academic community and economic practice. Prof. Halina Buk has served as a long-term member of corporate bodies in utility companies, an economic consultant in tens of projects implemented in various companies, including: Agencja Rynku Energii S.A., Kompania Węglowa S.A., PGG S.A., Koncern Energetyczny ”Energa” S.A., Huta Łabędy S.A. and KGHM Polska Miedź S.A. She has received numerous distinctions, including: the Golden Cross of Merit, the Silver Cross of Merit twice, Medal of the National Education Commission and the Commander’s Cross of the Order of Polonia Restituta. She meets the criteria of being independent referred to in principle II.Z.4. of the Code of Best Practice for WSE Listed Companies 2016. |
|
ROBERT KUDELSKI Position: Supervisory Board Secretary Represents: JSW employees |
He has been an employee of JSW since 1993, currently working in the position of Manager of the Investments and Mine Overhaul Department at KWK Borynia-Zofiówka. 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, the University of Silesia in Katowice (in human resources management) and the Kraków University of Economics (MBA). Completed a number of development courses and seminars among others in the area of: quality management system, application of the public procurement law and controller education program. He was a Supervisory Board member of Centralne Zakłady Automatyki Hutnictwa S.A. in Katowice and Towarzystwo Budownictwa Społecznego “Daszek” Sp. z o.o. in Jastrzębie-Zdrój. Since 2012, he has been a JSW Supervisory Board Member representing employees. He does not meet the criteria of being independent referred to in principle II.Z.4. of the Code of Best Practice for WSE Listed Companies 2016. |
|
ALOJZY NOWAK Position: Supervisory Board Member Represents: State Treasury |
Professor of economics. Completed MA studies at the Main School of Planning and Statistics in Warsaw (currently Warsaw School of Economics) and economics studies in the United States at the University of Illinois Urbana-Champaign. He also completed studies in banking, finance and capital markets at the University of Exeter in the United Kingdom. In Antwerp, at the Free University of Berlin, he studied International Economics at RUCA. Currently, Rector of the University of Warsaw in the 2020-2024 term of office, in 2016-2020 he was the Dean of the Department of Management of the University of Warsaw. In 2012-2016, Deputy Rector of the University of Warsaw responsible for research and cooperation. 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, Director of the European Center at University of Warsaw, Deputy Dean in charge of foreign cooperation at Management Faculty, University of Warsaw. Visiting professor at over ten international universities. He is a lecturer in France, UK, US, Russia, China and Korea. External Reviewer in registration and conferment procedures at University of Cambridge, Postgraduate School of Management, Grenoble, University of Zululand, RSA. He discharged the functions of: advisor to the Prime Minister, to the Minister of Agriculture, member of the advisory committee NewConnect at Management Board of Warsaw Stock Exchange, member of the NBP Foundation Council, chairman of the NBP Scientific Council. He held positions in supervisory boards of various institutions, including: PTE WARTA S.A., PKO BP S.A., PZU S.A., Bank Millennium S.A., Chairman and Deputy Chairman of the Supervisory Board in EUROLOT S.A. Professor Nowak stands out with his commitment to public activity. He is a committee member of “Teraz Polska” Award and President of the Management Board, National Development Council at the President of Poland, and President of the Management Board of the Main Academic Sports Association. Previously he was a member of the National Development Council at the President of Poland. Mr. Alojzy Nowak has received numerous awards and distinctions, including the Award of the Minister of National Education for his book entitled “Integracja europejska. Szansa dla Polski?” (“European Integration. An Opportunity for Poland?”) and his book entitled “Banki a gospodarstwa domowe – dynamika rozwoju” (“Banks and Households – the Dynamics of Development”) and the Rector’s Award for scientific achievements (every year since 1997). Member of scientific organizations and professional editing boards of periodicals, among others Foundations of Management (member), Journal of Interdisciplinary Economics (editor in chief), Yearbook on Polish European Studies, Mazovia Regional Studies, Gazeta Bankowa and a reviewer at PWE S.A. in Warsaw. He publishes his works in Polish, English, German and Russian. In December 2018, along with 22 outstanding economists from across the world, among which there are 4 Nobel Prize laureates, he became a member of the Scientific Board of the Institute of New Structural Economics at Beijing University. She meets the criteria of being independent referred to in principle II.Z.4. of the Code of Best Practice for WSE Listed Companies 2016. |
|
JOLANTA GÓRSKA Position: Supervisory Board Member Represents: State Treasury |
Ms. Jolanta Górska holds the title of PhD in economic sciences from the Finance Institute of the Finance Academy in Warsaw. She graduated from the Higher School of Insurance and Banking in Warsaw majoring in Finance and Banking. She also completed post-graduate studies at the Finance Academy in Warsaw in the area of research methodology in economic sciences, Warsaw University of Technology in real estate valuation and Warsaw University of Life Sciences in the area of finance and banking. She has obtained the European Foundation Certificate in Banking (EFCB) 3E. She has professional qualifications of a property surveyor and qualifications to prepare valuations for the needs of securing bank receivables and a certificate confirming enterprise valuation qualifications. She passed an exam for candidates for supervisory board members in State Treasury companies. She also completed numerous training courses, among others on valuation of enterprises, valuation of fair value, appraisal of real estate and proprietary rights for revenue and tax purposes, valuation for the needs of securing bank receivables, valuation of real estate located in mineral deposit areas, and many others. Ms. Jolanta Górska has been employed, among others, on managerial positions in the Agricultural Property Agency (ANR) and Totalizator Sportowy Sp. z o.o. In 2006-2007 she conducted lectures for MA studies in the area of public finance, local finance and tax systems. In 2017 she was a member of the Council for State Treasury Companies and State-owned Legal Persons. Since August 2020 she has been a supervisory board member at PKO TFI S.A. (Audit Committee member). She meets the criteria of being independent referred to in principle II.Z.4. of the Code of Best Practice for WSE Listed Companies 2016. |
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STANISŁAW PRUSEK Position: Supervisory Board Member Represents: State Treasury |
Professor of technical sciences and a graduate of the Faculty of Mining and Geology of the Silesian University of Technology. Since 2015, he has served as the Director of the Central Mining Institute. He joined the Central Mining Institute in 1991, where in 2003-2015 he headed the Mining Technology and Roof Support Department. He is a recognized expert in the fields of mining and engineering geology. In his scientific and research work, he deals with issues related to underground mining of hard coal seams, in particular the selection and design of mining roof supports, forecasting of longwall roadway deformations and reconsolidation of goafs. He has authored and co-authored several monographs and approx. 200 publications in renowned national and international journals in which he has published the outcomes of his research. He co-authored more than 70 applications for the recognition of inventions and utility designs, which have won a number of awards and distinctions in various national and international contests. Professor Stanisław Prusek headed various teams appointed under the auspices of the Central Mining Institute in a variety of national and international projects, cooperating with research centers in Europe and across the world. He personally performed a number of research and service assignments commissioned by hard coal mines and mining support companies. In 2010, Professor Prusek received the Witold Budryk Memorial Award for Scientific Achievements granted by the 7th Department of the Polish Academy of Sciences. In 2013, he received the A.M. Terpigorev Memorial Medal granted by the Ministry of Education and Science of Ukraine and, in 2015, the Gold Medal of the National Mining University in Dnipropetrovsk. He is a member of the Australasian Institute of Mining and Metallurgy, the International Organizing Committee of the World Mining Congress and a member of the Presidium of the Mining Committee of the Polish Academy of Sciences. He serves as Vice-Chairman of the Commission on Risks in Mines in the field of excavation roof supports and caving hazards operating at the State Mining Authority (WUG). He is a visiting professor at Henan Polytechnic University in China. He does not meet the criteria of being independent referred to in principle II.Z.4. of the Code of Best Practice for WSE Listed Companies 2016. |
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IZABELA JONEK-KOWALSKA Position: Supervisory Board Member Represents: State Treasury |
Izabela Jonek-Kowalska, PhD hab., Professor at the Silesian University of Technology. She graduated from the University of Economics in Katowice (faculty of finance and investments). She obtained her PhD degree in economic sciences in the area of management science from the Silesian University of Technology’s Faculty of Organization and Management, and her postdoctoral degree (habilitation) from the AGH University of Science and Technology in Kraków in the area of technical sciences (mining and engineering geology, specializing in mining economics). Currently she is employed on the position of associate professor at the Silesian University of Technology’s Faculty of Organization and Management, where she is also the Head of the Economics and IT Department. For 10 years she served as Deputy Dean of the Organization and Management Faculty: for General Matters, for Science and for Cooperation with the Social and Economic Environment, respectively. She received numerous awards for her academic, teaching and organizational activity. For more than ten years she has been dealing with mining economics, executing projects and expert studies in cooperation with, among others: 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., former Kompania Węglowa S.A. and Katowicki Holding Węglowy S.A. as well as Deloitte Polska and PricewaterhouseCoopers Polska. She is the author of over 300 works on management and mining economics, including many works published in renowned global scientific periodicals (TOP 10). She meets the criteria of being independent referred to in principle II.Z.4. of the Code of Best Practice for WSE Listed Companies 2016. |
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MICHAŁ ROSPĘDEK Position: Supervisory Board Member Represents: State Treasury |
Mr. Michał Rospędek is a graduate of the AGH University of Science and Technology in Kraków. In 2009, he earned the M.A. Eng. title, majoring in Mining and Geology at the Faculty of Geology, Geophysics and Environmental Protection. He also completed postgraduate studies: “Drilling technologies in opening of deposits and geoengineering” at the AGH University of Science and Technology and “Executive Master of Business Administration” at Collegium Humanum – Warsaw Management University. In 2008-2012, he was employed in Tauron Wydobycie S.A., ZG Janina, in Libiąż at the position of underground geology specialist. In 2012-2014, he occupied the position of assistant documentation geologist in Linc Energy (Poland) Sp. z o.o. In 2015, he was employed at the Ministry of Energy, Mining Department, at the position of Chief Specialist. Since 2018 he has been the Head of the Hard Coal Mining Division at the Mining Department of the Ministry of State Assets. He has qualifications to perform mining geologist activities, inter alia in underground mines, certified by the President of the State Mining Authority. He does not meet the criteria of being independent referred to in principle II.Z.4. of the Code of Best Practice for WSE Listed Companies 2016. |
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PAWEŁ BIESZCZAD Position: Supervisory Board Member 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 in the position of senior foreman for ICT and automation equipment. Completed numerous specialist courses and, among others, passed an exam for candidates for supervisory board members in State Treasury companies. He also holds the qualifications of an internal auditor. He does not meet the criteria of being independent referred to in principle II.Z.4. of the Code of Best Practice for WSE Listed Companies 2016. |
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TADEUSZ KUBICZEK Position: Supervisory Board Member Represents: JSW employees |
Graduated from the Silesian University of Technology in Gliwice at the Mining Faculty. In 1988, he gained the master’s degree in mining engineering. In 1999, also at the Silesian University of Technology in Gliwice, he completed postgraduate studies in HR management and professional counseling. He has been involved in the mining industry since 1988. He gathered professional experience already as an intern at the Mining Department in the Szczygłowice mine, working on the position of Chief Mining Engineer. Since 2003 he has been employed in the Ventilation Department. In 2005 he took on the position of Chief Ventilation Engineer – Manager of the Ventilation Department, which he still occupies. In 2015, he was appointed a member of the Mining Aerology Section at the Mining Commission of the Polish Academy of Sciences Branch in Katowice for the term of office 2015-2021. Co-author of articles on recognizing and fighting natural hazards in hard coal mining. He does not meet the criteria of being independent referred to in principle II.Z.4. of the Code of Best Practice for WSE Listed Companies 2016. |
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ARKADIUSZ WYPYCH Position: Supervisory Board Member Represents: JSW employees |
Graduated from the Silesian University of Technology, where he earned a civil engineer’s degree and a master’s degree in mining and drilling machinery and equipment. He has been associated with JSW since 2007, working as an inspector at the Material Logistics Unit. In 2008, he was transferred to KWK Zofiówka where he acquired professional experience at the shaft division in the positions of: specialist, mining technology inspector, supervisor and shift foreman. Currently employed in the position of senior foreman for supervision of underground investment projects. Completed numerous training sessions and courses, including a course for candidates for 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. He does not meet the criteria of being independent referred to in principle II.Z.4. of the Code of Best Practice for WSE Listed Companies 2016.Komitety Rady Nadzorczej JSW |
The JSW’s Supervisory Board Committees
The committees operate in accordance with the Bylaws adopted by the Supervisory Board. The Supervisory Board elects from amongst its members the audit committee and may also elect other committees. A Supervisory Board Member may participate in more than one committee. Committees shall 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 an entity affiliated with it,
- 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 the financial audit activities.
The following committees operated as part of the Supervisory Board of JSW in 2020:
Audit Committee
The Committee is an advisory and opinion-making body vis-à-vis the Supervisory Board. 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, audit and selection of the audit firm to carry out the audits.
The committee operates in accordance with the Committee Bylaws, adopted by the Supervisory Board, defining, among others, the Committee appointment methods, working methods and its tasks and scope.
The scope of the Committee’s operation covers opinion-giving and analytical activities with regard to information provided by the Management Board to support the Supervisory Board in the performance of its control and supervisory duties defined by the articles of association in the areas of financial reporting, internal control and risk management. The Committee also oversees the financial statements auditing process and presents to the Supervisory Board its recommendations regarding the approval of the audited annual financial statements.
At least one Audit Committee member has knowledge and skills in accounting or the auditing of financial statements.
Most Audit Committee members, including the chairman, are independent of JSW. Audit Committee members have expertise and skills in the industry in which JSW operates
Committee meetings should be held as needed, but no less frequently than once per quarter, before publication of the Company’s financial statements, on the dates set by the Committee Chairperson.
Tabela. Composition of the Supervisory Board Audit Committee at 31 December 2020
| FIRST AND LAST NAME | POSITION | TERM IN POSITION |
|---|---|---|
| Halina Buk | Chairwoman | 01.01.2020 – 31.12.2020 |
| Paweł Bieszczad | Member | 01.01.2020 – 31.12.2020 |
| Jolanta Górska | Member | 01.01.2020 – 31.12.2020 |
| Robert Kudelski | Member | 01.01.2020 – 31.12.2020 |
| Stanisław Prusek | Member | 01.01.2020 – 20.03.2020 |
In the JSW Supervisory Board Audit Committee, the statutory independence criteria are satisfied by the following Members: Ms. Halina Buk, Mr. Paweł Bieszczad, Mr. Robert Kudelski, Ms. Jolanta Górska.
Ms. Halina Buk is the JSW Supervisory Board Audit Committee member holding expertise and skills in accounting or audit of financial statements.
The JSW Supervisory Board Audit Committee members who hold expertise and skills in the mining industry in which the issuer operates are: Mr. Paweł Bieszczad, Mr. Robert Kudelski and Mr. Stanisław Prusek.
The Audit Committee held 7 meetings in 2020 and 3 meetings in the first quarter of 2021.
Audit Committee tasks and competences
The main tasks of the Audit Committee include in particular the following:
- monitoring:
- process of financial reporting,
- 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 the audit firm, taking into account all conclusions and findings of the Audit Supervision Commission resulting from inspections performed in the audit firm,
- inspection and monitoring of the independence of the statutory auditor and the audit firm, in particular in cases where the audit firm renders other services in favor of JSW than the audit services,
- provision of information to the JSW Supervisory Board or supervisory or control body about the outcome of the audit and explanation of how the audit contributed to the integrity of financial reporting in the Company and what the role of the Audit Committee was in that process,
- assessment of the independence of the statutory auditor and expressing consent to the auditor’s provision of permitted non-audit services (at JSW’s justified request),
- preparation of a policy governing the selection of an audit firm to perform the audit,
- preparation of a policy governing the provision of permitted non-audit services by the audit firm performing the audit, by its related parties and by a member of the audit firm’s chain,
- development of the procedure for selecting an audit firm by JSW,
- presentation to the Supervisory Board or another supervisory or control body or the body referred to in Article 66 Section 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,
- submission of recommendations intended to ensure the reliability of the financial reporting process at JSW.
The committee submits its findings, stances and recommendations worked out in connection with discharging 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.
Policy and procedure for the selection of an audit firm and policy governing the provision of permitted non-audit services by the audit firm, by its related parties and by a member of the audit firm’s chain
JSW has in place a “Policy and procedure for the selection of an audit firm and policy governing the provision of permitted non-audit services by the audit firm, by its related parties and by a member of the audit firm’s network” (“Policy”) established by the Audit Committee for Jastrzębska Spółka Węglowa S.A. In accordance with this policy:
- The Supervisory Board is authorized to select the audit firm to audit the Company’s financial statements, having obtained the recommendation of 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 the JSW 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, at the stage of preparation of 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 optimum proportions of statutory auditors and their assistants in the team, taking into account the specificity of the Company,
- professional qualifications and personal experience of the persons directly involved in the audit,
- reputation of the audit firm in the 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 the timeframes allowing the audit firm to participate in the inventory-taking of JSW’s material assets (it is recommendable 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).
- Koszty przeprowadzenia badania sprawozdania finansowego ponosi badana jednostka.
- The Supervisory Board recommends striving to ensure that the financial statements of the parent company 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 optimize 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 the proposals regarding the audit of the Company’s financial statements,
- the content of the announcement with the invitation to submit proposals for the audit of the Company’s financial statements. - The audit firm is selected following the selection procedure described in the adopted Policy.
- The Company (immediately) informs 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 the 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 10 years,
- the key statutory auditor may not carry out the statutory audit in JSW for more than 5 years. They may carry out the statutory audit again after elapse of 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 a member of the audit firm’s chain” are as follows:
- The Supervisory Board may use the advisory services of an audit firm during the financial year in a strictly limited scope. The firm may not be the entity auditing the annual financial statements in JSW or its subsidiaries.
- The audit firm auditing the statutory financial statements, the audit firm’s related party and by each member of the audit firm’s chain may not provide the entity with prohibited non-audit services or financial audit activities. The prohibition covers the audited entity, its parent company and subsidiaries in the European Union. 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 company or its controlled entities, 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 mean:
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) keeping the accounts and preparing the accounting documentation and financial statements,
d) payroll services,
e) preparation and implementation of 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) usługi związane z finansowaniem, strukturą kapitałową i alokacją kapitału oraz strategią inwestycyjną klienta, na rzecz którego wykonywane jest badanie, z wyjątkiem świadczenia usług atestacyjnych w związku ze sprawozdaniami finansowymi, takich jak wydawanie listów poświadczających w związku z prospektami emisyjnymi badanej jednostki,
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 preparation of the 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 the candidates for such positions, preparation of the organizational structure, cost control. - Prohibited services include also other non-financial-audit services.
- The following services do not constitute prohibited services:
a) executing due diligence procedures as regards the economic and financial standing, issuing comfort letters - performed 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 satisfaction of the conditions of concluded loan agreements based on an analysis of financial information derived from the 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 compliance of the information disclosed by financial institutions and investment firms with the disclosure requirements for capital adequacy and variable compensation components, - Provision of the 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 under the condition that they are approved by the Audit Committee
- The company prepares a justified motion to the Audit Committee for approval of the 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 the given financial year.
PricewaterhouseCoopers Polska Spółka z ograniczoną odpowiedzialnością Audyt Sp. k. is the entity authorized to audit the financial statements of JSW and the consolidated financial statements of the JSW Group for 2020. The audit firm was selected on 29 November 2017 by the JSW Supervisory Board. The recommendation of the Audit Committee regarding the selection of the audit firm has been prepared following the completion of an organized procedure satisfying the prevailing criteria.
Nomination and Compensation Committee
The Committee is an advisory and opinion-making body vis-à-vis the Supervisory Board. It has been 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 organizational solutions, the compensation system, the level of compensation and the selection of managers with the qualifications needed to build the success of the Group. At least one Committee member should satisfy the criteria set for the independent Supervisory Board member referred to in §16 Section 2 of JSW’s Articles of Association. During selection of the Committee members the Supervisory Board takes into account the competences, knowledge and experience of the candidates regarding the matters subject to the Committee’s scope of activity. Committee meetings should be held as needed, at least two times per year, on the dates set by the Committee Chairperson.Table. Composition of the Supervisory Board Nomination and Compensation Committee at 31 December 2020
| FIRST AND LAST NAME | POSITION | TERM IN POSITION |
|---|---|---|
| Alojzy Nowak | Chairman | 01.01.2020 – 31.12.2020 |
| Izabela Jonek-Kowalska | Member | 01.01.2020 – 31.12.2020 |
| Robert Kudelski | Member | 01.01.2020 – 31.12.2020 |
| Arkadiusz Wypych | Member | 01.01.2020 – 04.07.2020 |
| Konrad Balcerski 1) | Member | 01.01.2020 – 29.10.2020 |
| Michał Rospędek 2) | Member | 26.11.2020 – 31.12.2020 |
1) On 29 October 2020, the Minister of State Assets, by way of a statement submitted to JSW, dismissed Mr. Konrad Balcerski from the Supervisory Board,
2) On 26 November 2020 the Supervisory Board appointed Mr. Michał Rospędek to the Committee.
Nomination and Compensation Committee tasks and competences
The following tasks in particular fall among the basic powers and duties of the Nomination and Compensation Committee:- 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 contractual obligations taken by the parties,
- overseeing the implementation of the Management Board's compensation system, in particular preparing settlement documents concerning variable and bonus elements of compensation for the purpose of submitting recommendations to the Supervisory Board,
- monitoring and periodically analyzing the compensation system for the management of JSW and if necessary articulating recommendations for the Supervisory Board,
- overseeing the proper implementation of perquisites for the Management Board stemming from their employment contracts.
Members of the Committee take part in the recruitment procedure for the position of Management Board Member and present to the Supervisory Board a detailed opinion of the Committee on all candidates for a Management Board Member, subject to §11 sec. 5 of the Company’s Articles of Association.
The Committee submits to the Supervisory Board a proposal for a stance on all matters related to the Company’s operations that have been brought to the Supervisory Board’s attention and with respect to which the provision of advice and the performance of consultative activities lie within the powers of the Committee.
The Committee submits to the Supervisory Board the adopted findings, stances and recommendations worked out in connection with discharging 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.Strategy and Development Committee
The Committee is an advisory and opinion-making body for the Supervisory Board. It is formed with the purpose of presenting motions, recommendations, opinions and reports on the scope of the tasks performed to the Supervisory Board. Committee meetings should be held as needed, but no less frequently than two times per year, on the dates set by the Committee Chairperson.
Table. Composition of the Supervisory Board Strategy and Development Committee at 31 December 2020
| FIRST AND LAST NAME | POSITION | TERM IN POSITION |
|---|---|---|
| Stanisław Prusek | Chairman | 01.01.2020 – 31.12.2020 |
| Konrad Balcerski 1) | Member | 01.01.2020 –29.10.2020 |
| Jolanta Górska | Member | 01.01.2020 – 31.12.2020 |
| Izabela Jonek-Kowalska | Member | 01.01.2020 – 31.12.2020 |
| Tadeusz Kubiczek | Member | 01.01.2020 – 31.12.2020 |
| Alojzy Nowak | Member | 01.01.2020 – 31.12.2020 |
| Arkadiusz Wypych | Member | 01.01.2020 – 31.12.2020 |
| Robert Tomanek 2) | Member | 01.01.2020 – 21.01.2020 |
| Michał Rospędek 3) | Member | 26.11.2020 – 31.12.2020 |
1) On 29 October 2020, the Minister of State Assets, by way of a statement submitted to JSW, dismissed Mr. Konrad Balcerski from the Supervisory Board.
2) On 21 January 2020, Mr. Robert Tomanek tendered his resignation from the Supervisory Board.
3) On 26 November 2020 the Supervisory Board appointed Mr. Michał Rospędek to the Committee.
The Audit Committee’s basic tasks include in particular the following:
- evaluation of the Company’s business strategy and presentation of the evaluation results to the Supervisory Board,
- recommendation of the scope and dates for the JSW Management Board to submit technical and economic annual and long-term strategic plans to the Supervisory Board,
- evaluation of the impact of strategic investments, planned and undertaken, on parent company’s assets,
- monitoring of the fulfillment of strategic investment tasks,
- evaluation of actions related to the management of JSW’s material assets,
- issuing opinions on strategic documents submitted to the Supervisory Board by the JSW Management Board.
The Committee is authorized to review all of JSW’s activity from the perspective of the Committee’s duties and demand from the JSW Management Board and employees any and all information, reports and explanations required to perform the Committee’s duties.
The Management Board of the parent company is obligated to provide information on an ongoing basis about all planned and taken actions and changes in the law and regulatory environment pertaining to the Committee’s tasks.
Compensation system for Supervisory Board Members
The rules governing the determination of compensation of the Supervisory Board Members have been adopted by way of a decision made by the JSW Shareholder Meeting, in compliance with the regulations laid down in the Act on the Rules for Shaping the Compensation of Persons Managing Certain Companies and are consistent with the Compensation Policy for the JSW Management Board and Supervisory Board” adopted by the Shareholder Meeting.
The Company does not enter into a separate contract with Supervisory Board Members for discharging the function of a Supervisory Board Member. Supervisory Board Members exercise their rights and perform their duties in person and are appointed for a joint term of office. The legal relationship between Supervisory Board Members and the Company (except for the situations provided for in the Articles of Association) is established by way of an appointment by the Shareholder Meeting (appointment and dismissal of Supervisory Board Members by the State Treasury takes place by way of a notice submitted to the Company). The legal relationship is terminated as a result of the expiration of the mandate (including due to death) or by dismissal or resignation submitted in writing to the Management Board to the address of the Company’s head office.
The monthly compensation of Supervisory Board Members is set as the product of the base amount referred to in Article 1 Section 3 Item 11 of the Act on the Rules for Shaping the Compensation of Persons Managing Certain Companies of 9 June 2016 and the following multiplier: for the Supervisory Board Chairman – 1.7, and for other Supervisory Board Members – 1.5.
In 2020, Supervisory Board Members were entitled to receive compensation regardless of the number of meetings convened. Supervisory Board Members were not entitled to any compensation for the month in which they did not attend any of the correctly convened meetings and their absence was not excused. The Supervisory Board decided by way of a resolution whether the absence of a Supervisory Board Member at a meeting was justified or not. Supervisory Board Members were entitled to reimbursement of expenses incurred in connection with the participation in the works of the Supervisory Board and its committees. In addition to the compensation referred to above, Supervisory Board Members do not receive any additional components of compensation, such as bonuses or other cash benefits. Supervisory Board Members are not entitled to any severance pay when they cease to discharge their functions. The Shareholder Meeting did not grant Supervisory Board Members additional compensation for discharging functions in the Supervisory Board or Committees established by the Supervisory Board.
Tabela. Compensation for the Supervisory Board in 2020 (PLN)
| FIRST AND LAST NAME | PERIOD IN OFFICE | COMPENSATION | OTHER INCOME | TOTAL |
|---|---|---|---|---|
| Halina Buk | 01.01.-31.12.2020 | 93 114,52 | - | 93 114,52 |
| Robert Kudelski | 01.01.-31.12.2020 | 82 159,84 | - | 82 159,84 |
| Alojzy Nowak | 01.01.-04.07.2020 | 82 159,84 | - | 82 159,84 |
| Stanisław Prusek | 01.01.-31.12.2020 | 82 159,84 | - | 82 159,84 |
| Izabela Jonek-Kowalska | 01.01.-31.12.2020 | 82 159,84 | - | 82 159,84 |
| Konrad Balcerski | 01.01.-29.10.2020 | 68 522,33 | - | 68 522,33 |
| Jolanta Górska | 01.01.-31.12.2020 | 82 159,84 | - | 82 159,84 |
| Arkadiusz Wypych | 01.01.-31.12.2020 | 82 159,84 | - | 82 159,84 |
| Paweł Bieszczad | 01.01.-31.12.2020 | 82 159,84 | - | 82 159,84 |
| Tadeusz Kubiczek | 01.01.-31.12.2020 | 82 159,84 | - | 82 159,84 |
| Robert Tomanek | 01.01.-21.01.2020 | 5 454,29 | - | 5 454,29 |
| Michał Rospędek | 29.10.-31.12.2020 | 13 850,6 | - | 13 850,6 |
| TOTAL | 838 220,46 | - | 838 220,46 |
Tabela. Compensation for the Supervisory Board in 2019 (PLN)
| FIRST AND LAST NAME | PERIOD IN OFFICE | COMPENSATION | 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 |
| TOTAL | 708 829,01 | - | 708 829,01 |
Remunerations of the Supervisory Board Members of the JSW Group
The rules governing the determination of compensation of the Supervisory Board Members of the Group companies have been adopted by way of resolutions of the General Meeting or Shareholder Meeting of the respective company in accordance with the regulations laid down in the Act on the Rules for Shaping the Compensation of Persons Managing Certain Companies of 9 June 2016. Moreover, the JSW Group Compensation Policy which regulates the compensations of, inter alia, the Supervisory Board Members of the Group companies has been in effect since 12 August 2019.
Information on any liabilities under pensions and similar benefits
By virtue of the discharge of the functions entrusted to them, JSW Supervisory Board Members are not entitled to participate in any retirement and disability or early retirement plans, except for Supervisory Board Members appointed by employees who are entitled having their contribution resulting from the employment relationship with JSW transferred to the Employee Pension Plan.
Description of activities
The manner of operation of the JSW Shareholder Meeting and its powers are defined in the Articles of Association and in the JSW Shareholder Meeting Bylaws. A Shareholder Meeting is convened in accordance with the procedure and rules set forth in the provisions of law. Shareholder Meetings are held in Warsaw, in Katowice or at the registered office of JSW. A Shareholder Meeting is convened by way of an announcement published on JSW's website, in the form of a current report and registration in the Central Securities Depository (KDPW) system. The posting of the announcement on JSW's website, the sending of the current report and the registration in the KDPW system must be made no less than 26 days before the date of the Shareholder Meeting. The persons or the body other than the Management Board that individually convenes the Shareholder Meeting shall promptly notify JSW’s Management Board about this fact and deliver in writing or electronically a relevant resolution or statement on convening the Shareholder Meeting, the agenda, draft resolutions and justifications. If the Shareholder Meeting is convened by Shareholders, then they shall also deliver documents confirming the mandate to convene the Shareholder Meeting. The Management Board performs all the activities defined by the law in order to hold an effective Shareholder Meeting.
The Shareholder Meeting shall be opened by the Supervisory Board Chairman or, in his/her absence, the following persons shall be authorized to open the Shareholder Meeting in the following order: a person named by the Supervisory Board Chairman, the Supervisory Board Deputy Chairman, the President of the Management Board, a person appointed by the Management Board or the shareholder who has registered shares at the Shareholder Meeting entitling him/her to exercise the largest number of votes. Subsequently, the Chairman of the Shareholder Meeting shall be elected from among the persons authorized to participate in the Shareholder Meeting. Resolutions of the Shareholder Meeting are adopted by an absolute majority of votes, unless the Articles of Association or the Commercial Company Code set forth other conditions for adopting a particular resolution.
A Shareholder Meeting may be held if at least 50% of the share capital is represented at the Shareholder Meeting. Any adjournments in the meeting that go beyond a “short technical break” are ordered by the Shareholder Meeting by way of adopting a resolution by a majority of two thirds of the votes. The total duration of the breaks may not exceed 30 days.
Each shareholder who intends to take part in the Shareholder Meeting, directly or by proxy, is obligated to notify the Management Board or the Shareholder Meeting Chairman that he/she holds directly or indirectly more than 10% of total votes in JSW.
A decision to hold a Shareholder Meeting with the use of means of electronic communication shall be made by the Supervisory Board. The course of the Shareholder Meeting is registered in an audiovisual system and broadcast online on the Internet, and its electronic recording is published on JSW’s website.
A Shareholder Meeting convened by authorized Shareholders adopts a resolution to determine whether the costs of holding the meeting will be covered by JSW.
General Meeting competences
The following matters require a resolution of the Shareholder Meeting:
- examining and approving the Company’s Management Board activity report and the financial statements for the previous financial year and granting a discharge to the 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 share capital,
- authorizing the Management Board to purchase the Company’s treasury stock for retirement and specifying the manner and conditions for retiring stock,
- merging, splitting up or transforming the Company,
- dissolving or liquidating the Company,
- appointing or dismissing Supervisory Board members,
- setting remuneration for Supervisory Board members,
- allowing the Company to enter into a loan agreement, a surety agreement or another similar agreement with a Management Board member, a Supervisory Board member, a commercial proxy or a liquidator or in favor of any such person,
- allowing a subsidiary to enter into a loan agreement, a surety agreement or another similar agreement with a Management Board member, a Supervisory Board member, a commercial proxy or a liquidator or in favor of any such person,
- issuing bonds,
- selling or leasing an enterprise or an organized 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 a real property or a right of perpetual usufruct or of a share in a real property or in a right of perpetual usufruct shall not require consent of the Shareholder Meeting.
Shareholder Rights
The rights of JSW shareholders are laid down in the Articles of Association and the Bylaws of the Shareholder Meeting. Shareholders representing at least half of the share capital or at least half of all the votes in JSW may have the right, among others, to file a request to convene an Extraordinary Shareholder Meeting. The Management Board convenes the Shareholder Meeting also upon request from Shareholders representing at least one-twentieth of the share capital.
The request to convene a Shareholder Meeting, place an item in the agenda of a Shareholder Meeting, draft resolutions concerning the items included in the agenda of the closest Shareholder Meeting or the items which will be included in the agenda should be submitted to the Management Board in writing or in the electronic form. Authorization documents of the persons authorized to take action should be attached to the request.
A Shareholder or Shareholders representing at least one-twentieth of the share capital may request that the specified items be placed in the agenda of the closest Shareholder Meeting. The request should be submitted to the Management Board no later than twenty one days before the set date of a Shareholder Meeting. The request should contain a justification or draft resolution pertaining to the proposed item on the agenda. The Management Board is obligated to announce changes to the agenda made upon request of the Shareholders immediately, but no later than eighteen days before the set date of a Shareholder Meeting. Announcement is done following the same procedure as for convening a Shareholder Meeting. A Shareholder or Shareholders representing at least one-twentieth of the share capital may submit to JSW – before the date of a Shareholder Meeting - the draft resolutions concerning the items included in the agenda of a Shareholder Meeting or the items which will be included in the agenda. JSW will immediately post the draft resolutions on its website.
Every Shareholder may, during a Shareholder Meeting, submit draft resolutions on matters included in the agenda. Draft resolutions and motions submitted during a Shareholder Meeting should be prepared in writing. Draft resolutions and motions resulting in changes in draft resolutions should be justified in a manner enabling the shareholders to make reasonably informed decisions. Technical resolutions which are typical resolutions adopted during a Shareholder Meeting do not require justification. A Shareholder has the right to request copies of motions concerning items included in the agenda within one week prior to the date of holding a Shareholder Meeting.
Persons who are Company’s Shareholders sixteen days before the date of a Shareholder Meeting (date of registration of participation in a Shareholder Meeting – “record date”) and who satisfy the following conditions have the right to participate in the Shareholder Meeting:
- in case of persons authorized on the basis of dematerialized bearer shares – they have submitted to the entity keeping the securities account, no earlier than after the announcement on convening the Shareholder Meeting and no later than on the first business day after “record date”, the request to issue a name-specific certificate on the right to participate in a Shareholder Meeting,
- in case of persons authorized on the basis of bearer shares in the form of a certificate – 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 on the territory of the European Union or the state which is a party to the European Economic Area agreement specified in the notice on convening a Shareholder Meeting, may be deposited in lieu of shares. Such 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”,
- in case of persons authorized 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 view the list of persons authorized to participate in the Shareholder Meeting which will be displayed in the JSW Management Board Office for three business days preceding the date of the Shareholder 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 authorized shareholders to be sent to it free of charge by e-mail, specifying the address to which the list should be sent.
The Shareholder Meeting may appoint the Election Committee consisting of up to three persons.
Upon request of Shareholders representing at least one-tenth of the share capital represented at a Shareholder 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 motion will have the right to elect one Member of that committee. Each participant of a Shareholder Meeting may submit one candidate to become the Shareholder Meeting Chairperson. Election is carried out with participation of the candidates who gave their consent for being candidates.
The 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 the motions to charge the Members of governing bodies or liquidators with accountability. 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 Article 413 §1 of the CCC. Voting on points of order may only concern matters connected with holding the Shareholder Meeting. That voting procedure is not followed in the case of resolutions which may affect the exercise of Shareholders’ rights.