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.
KEY GROUP MANAGEMENT PRINCIPLES AND THEIR CHANGES
The Group’s functioning and organization is regulated by the JSW Group Code. The provisions of this Code place emphasis on all of the companies cooperating and pursuing the interests of the Group, they make it possible for the JSW Management Board to implement uniform procedures and standards of conduct and control over internal processes in the Group. As at 31 December 2021 the Group had 32 joint procedures in force to ensure consistency and transparency in the operation of the companies and mitigate the Group’s internal business and legal risks.
One of these procedures is embodied by the Corporate Governance Principles in the JSW Group, regulating ownership supervision in governing the Group. The Corporate Governance Principles are supposed to enhance the effectiveness of the Group’s management and the functioning of its constituent entities and implementing corporate governance forms and procedures of ownership supervision that go beyond what is required by the binding provisions of law.
The Compensation Policy for Corporate Bodies of JSW’s Subsidiaries is in force in the Group. The updated document has been in force in Group companies as of 7 December 2021. This update was associated with implementing different regulations pertaining to JSW’s key employees (a distinct Compensation Policy for JSW’s Management has been adopted in this respect) from the regulations pertaining to the compensation of the corporate bodies of JSW’s subsidiaries. The JSW Management Board’s control over the compensation paid to members of the subsidiaries’ corporate bodies has been extended in addition to specifying hitherto solutions in greater detail.
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.
BASIC MANAGEMENT PRINCIPLES IN THE PARENT COMPANY AND THEIR CHANGES
As at the date of this report, JSW’s enterprise consisted of five hard coal mines in which coking coal and steam coal are 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.
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.
The composition and matters within the powers of the Management Board and the Supervisory Board are described in detail here.
The manner of proceeding of the Shareholder Meeting and its powers are presented here.
JSW’s organizational chart as at 31 December 2021
Changes to the Company’s governance rules in 2021
To streamline the Company’s governance, in 2021 the Management Board adopted a number of resolutions pertaining to changes in the organizational structure of the Company’s Management Board Office and its mines. These changes intended to enhance the effectiveness of governance and adapt to the evolving market environment.
The key changes in the Company’s governance in 2021 pertained to the following:
- adopting the JSW Management Board’s Bylaws to adapt them to the amendments made to the Articles of Association and precisely define, among other things, the ability to participate in Management Board meetings by using means of direct remote communication and absolute majority of votes and indicate that the President of the Management Board shall cast the deciding vote in the event of a tie vote.
- updating the Framework Mine Organization Charts and the Rules and Regulations and Organization Chart of the Management Board Office and the Organizational Bylaws of the Production Support Unit to augment the effectiveness of governance and adapt to evolving market and legal conditions,
- giving consent for the gratuitous disposal of an organized part of JSW’s enterprise in the form of a mine operating in the “Jastrzębie-Bzie” Mining Area, which constitutes a designated part of KWK “Jastrzębie-Bzie” to Spółka Restrukturyzacji Kopalń S.A. in Bytom.
- updating JSW’s Organizational Bylaws.
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
The quality management system is intended to meet customers' expectations by delivering products in line with their expectations and requirements declared in contracts. As part of the quality management system, customer perception is monitored on an annual basis. The results make it possible to learn the customers’ opinion on the quality of the services provided by JSW S.A. and eliminate irregularities in the coal and coke sales process. This provides customers with a basis for trust and confidence in our capability to achieve our quality objectives. The quality management system especially focuses on optimising processes and improving the organisational culture.
Environmental management system
The primary objective of the environmental management system is to reduce the harmful effects of operations, prevent pollution and accidents in a way that minimises adverse impact on the environment and strive for continuous improvement of the state of the environment. A range of measures are taken to improve the state of the environment, such as reclamation and greening of degraded areas, protection of water against salination, appropriate and responsible management of mining waste and mine waters, reduction of methane emissions to the atmosphere. The system includes continuous updating and identification of environmental aspects related to the operations. The environmental management system helps build the Company's image as an enterprise that cares about the environment.
Occupational health and safety management system
The aim of the occupational health and safety management system is to ensure that necessary measures and resources are in place to foster safe attitudes among employees and to monitor risks and reduce their impact on the work environment. The system features a range of activities that are intended to ensure the use of safe technological processes, strive to prevent accidents, occupational diseases and near misses and proactively influence employee awareness. A declaration has been adopted on the identification, monitoring and minimisation of hazards that may affect occupational safety; activities intended to promote safe behaviour among the crew have been declared and intensified. Workplace hazards are identified and occupational risks are assessed on the basis of the occupational health and safety management system.
Information security management system
The primary objective of the information security management system is to minimise the risk of losing critical information by applying appropriate safeguards in accordance with the adopted Information Security Policy at JSW Group. The information security management system is created by all employees who are the owners or users of information. Understanding the aforementioned issues makes it possible for us to identify the most appropriate security measures in the context of the specific nature of JSW S.A.'s operations and the market environment. The system was implemented in order to deploy protection mechanisms adequate to business needs, define the rules for handling specific information and assess risk based on existing hazards. The system is designed to ensure confidentiality, integrity and availability of information.
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
For more information, see Compliance and our policies
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 2021.
Identification of corporate governance rules being applied
By Resolution no. 26/1413/2015 of the Warsaw Stock Exchange Supervisory Board on 13 October 2015. On 29 March 2021 the Supervisory Board of the Warsaw Stock Exchange by Resolution no. 13/1834/2021 ratified the new principles of corporate governance for companies listed on WSE’s Main Market – Code of Best Practice for WSE Listed Companies 2021 (“DPSN 2021”), which entered into force on 1 July 2021. In accordance with the time limit specified by the WSE, JSW on 30 July 2021 provided to the public Information on the status of the company’s observance of rules included in the Code of Best Practice for WSE Listed Companies 2021.
The text of the Code of Best Practice 2021 is published on the website of the WSE at the following address: https://www.gpw.pl/dobre-praktyki-2021.
IDENTIFICATION OF THE SET OF CORPORATE GOVERNANCE RULES ON THE APPLICATION OF WHICH JSW COULD DECIDE VOLUNTARILY
JSW does not apply any corporate governance rules going beyond the requirements prescribed by the documents entitled “Code of Best Practice for WSE Listed Companies 2016” and “Code of Best Practice for WSE Listed Companies 2021”.
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 documents entitled “Code of Best Practice for WSE Listed Companies 2016” and “Code of Best Practice for WSE Listed Companies 2021”.
IDENTIFICATION OF CORPORATE GOVERNANCE RULES NOT APPLIED
JSW does its utmost to apply the corporate governance rules prescribed by the documents: DPSN 2016 and DPSN 2021.
A declaration on the status of the JSW’s observance of recommendations and rules included in the DSPN 2016 and DPSN 2021 is available on the JSW corporate website at http://www.jsw.pl/relacje-inwestorskie/lad-korporacyjny/dobre-praktyki/.
In 2021, JSW resigned from applying the following rules:
EXPLANATION OF THE REASONS FOR REFRAINING FROM APPLYING THE RULES AND RECOMMENDATIONS OF THE CODE OF BEST PRACTICE FOR WSE LISTED COMPANIES 2016
Rules: I.Z.1.10., III.Z.6., VI.Z.2. and recommendation: IV.R.3
Content of the rule:
In its internal regulations, the Company should define the criteria and circumstances under which a conflict of interest may arise in the company, as well as the rules of conduct where a conflict of interest has arisen or may arise. The company’s internal regulations should among others provide for ways to prevent, identify and resolve conflicts of interest, as well as rules of excluding members of the management board or the supervisory board from participation in reviewing matters subject to a conflict of interest which has arisen or may arise.
Explanation of the reasons for refraining:
JSW is refraining from using that rule until proper changes are made to corporate documents prevailing in JSW.
EXPLANATION OF THE REASONS FOR REFRAINING FROM APPLYING THE RULES OF THE CODE OF BEST PRACTICE FOR WSE LISTED COMPANIES 2021
Disclosure policy and investor communications
Rule 1.4.1. and 1.4.2.
Content of the rules:
1.4. To ensure quality communications with stakeholders, as a part of the business strategy, companies publish on their website information concerning the framework of the strategy, measurable goals, including in particular long-term goals, planned activities and their status, defined by measures, both financial and non-financial. ESG information concerning the strategy should among others:
1.4.1. explain how the decision-making processes of the company and its group members integrate climate change, including the resulting risks;
1.4.2. present the equal pay index for employees, defined as the percentage difference between the average monthly pay (including bonuses, awards and other benefits) of women and men in the last year, and present information about actions taken to eliminate any pay gaps, including a presentation of related risks and the time horizon of the equality target.
Explanation of the reasons for refraining:
JSW is currently working on the updating of the business strategy and on development of environmental strategy for the Group, whose synergy will enable the Group to be part of the process of transforming the EU economy in line with the EU strategic objectives for achieving climate neutrality by 2050. The documents to be developed will take into account the guidelines resulting from the regulations adopted in the European Union, with particular emphasis on issues related to climate protection and emission reduction.
As at the date of publication of this report JSW is not able to present the equal pay index due to a lack of technical possibilities to calculate it. The principle of proportionality and comparability of remuneration in the case of JSW is difficult to apply due to the specificity of the production process operating in the mining industry, which is mainly based on men.
Management Board and Supervisory Board
Rule 2.1.
Content of the rule:
Companies should have in place a diversity policy applicable to the management board and the supervisory board, approved by the supervisory board and the general meeting, respectively. The diversity policy defines diversity goals and criteria, among others including gender, education, expertise, age, professional experience, and specifies the target dates and the monitoring systems for such goals. With regard to gender diversity of corporate bodies, the participation of the minority group in each body should be at least 30%.
Explanation of the reasons for refraining:
As at the date of publication of this report JSW does not have in place a diversity policy applicable to the Management Board and Supervisory Board which would specify the diversity goals and criteria according to this rule. According to JSW, the failure to adopt such policies does not affect the assurance of the highest standards in the performance and effective discharge of the duties of the Management Board and the Supervisory Board. Due to the fact that JSW is a company with the State Treasury shareholding, the persons who are to perform functions at the company bodies are elected according to the criteria provided for in the provisions of the Act of 16 December 2016 on Rules for Managing State Property. The criteria adopted in the act aim to ensure that persons performing functions in management and supervisory positions in a company with the State Treasury shareholding have the level of education, professional experience and competences adequate for the performance of these functions.
Rule 2.2.
Content of the rule:
Decisions to elect members of the management board or the supervisory board of companies should ensure that the composition of those bodies is diverse by appointing persons ensuring diversity, among others in order to achieve the target minimum participation of the minority group of at least 30% according to the goals of the established diversity policy referred to in principle 2.1.
Explanation of the reasons for refraining:
The Members of the Management Board and Supervisory Board of JSW are elected observing the principle of equal access of women and men to the position at statutory bodies of the company. At the date of publication of this report, the JSW shall be gender differentiated at the level specified in this rule for the Supervisory Board. This ratio is not met for the JSW Management Board.
Rule 2.9.
Content of the rule:
The chair of the supervisory board should not combine this function with that of chair of the audit committee of the supervisory board.
Explanation of the reasons for refraining:
JSW will strive to apply this rule upon the appointment of the JSW Supervisory Board for the next term of office during the upcoming Ordinary Shareholder Meeting of JSW at the latest.
Rule 2.11.6.
Content of the rule:
2.11. In addition to its responsibilities laid down in the legislation, the supervisory board prepares and presents an annual report to the Ordinary Shareholder Meeting once per year. Such report includes at least the following:
2.11.6. information regarding the degree of implementation of the diversity policy applicable to the management board and the supervisory board, including the achievement of goals referred to in principle 2.1.
Explanation of the reasons for refraining:
As at the date of publication of this report JSW does not have in place a diversity policy applicable to the Management Board and Supervisory Board which would specify the diversity goals and criteria, therefore, a failure to apply this rule results from a failure to apply rules 2.1. and 2.2.
Shareholder meeting and investor relations
Rule 4.1.
Content of the rule:
Companies should enable their shareholders to participate in a general meeting by means of electronic communication (e-meeting) if justified by the expectations of shareholders notified to the company, provided that the company is in a position to provide the technical infrastructure necessary for such general meeting to proceed.
Explanation of the reasons for refraining:
JSW is refraining from using that rule because of legal as well as organizational and technical risks which may threaten the correct course of the Shareholder Meeting if shareholders are provided with a possibility of participating in the meeting via remote channels.
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.
CONTROL, RISK MANAGEMENT AND COMPLIANCE SYSTEM
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 and instructions 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 Company’s internal control and risk management systems in the process of preparing financial statements are ensured by:
- the verification of the applicable accounting policies by the Group companies,
- the application of procedures for recording economic events in the financial and accounting system and checking their compliance,
- the continuous application of the 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 use of internal controls, including: division of responsibilities, multi-stage data authorization, validation of data received, independent checks,
- providing subsidiaries with standardized report templates and guidelines for their preparation, including work schedules,
- verification of the correctness of the accounting rules and disclosures included in the companies’ reports.
- verification of the financial statements of the Group companies against the data entered into the integrated IT HFM system, used to prepare the consolidated financial statements of the Group,
- reviews and audits by a statutory auditor of published financial statements,
- independent and objective assessment of risk management and internal control systems.
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.
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. 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
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 of the JSW Supervisory Board by conducting the relevant work to check the effectiveness of control and the efficiency of processes.
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. 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 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.
AUDIT COMMITTEE
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 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.
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 and entry to 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. After the amendments to the Articles of Association are entered to the Register of Commercial Undertakings JSW makes the current report in this regard available to the public. On 25 June 2021 the JSW Ordinary Shareholder Meeting adopted the amendments to the JSW Articles of Association. These amendments were registered in the National Court Register, and the information in this regard was published by the Company in the form of current report no. 33/2021.
Management Board
Powers of the JSW Management Board
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 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/employees. 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 units/employees.
MATTERS REQUIRING RESOLUTIONS BY THE MANAGEMENT BOARD:
- determining the organizational bylaws defining the Company's organization,
- appointing general proxies,
- buying and selling 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.
The Management Board may grant Powers of Attorney to manage the Company’s matters related to the operations of the relevant Plant/Office and specific Powers of Attorney to natural persons.
Two Management Board Members acting jointly or a Management Board member acting with a commercial proxy are authorized to make declarations of will and affix signatures on behalf of the Company..RULES OF PROCEDURE OF THE MANAGEMENT BOARD
The Management Board manages the Company through adopted resolutions, other forms of decisions made and entries in the minutes. 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 Members perform their duties in accordance with the function specified in the resolution on appointment to the Management Board. They supervise the Company’s overall operations and exercise direct supervision over the work of reporting organizational units. The Management Board oversees the work of each of the Company’s plants through the Plant Directors, the Management Board Office and the Management Board Representatives. Two Management Board Members acting jointly or a Management Board Member acting with a commercial proxy are authorized to make declarations of will and affix signatures on behalf of JSW. The Management Board grants Powers of Attorney to manage the Company’s matters related to the operations of the relevant Plant/Office and specific Powers of Attorney to natural persons.
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 President of the Management Board convenes Management Board meetings on their 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.
The Management Board may adopt resolutions if all Management Board Members have been duly notified of the Management Board meeting. In urgent matters, the Management Board may adopt resolutions without observing the procedure specified in the Management Board Bylaws.
Management Board Members may participate in meetings personally and/or via means of direct remote communication, including means of electronic communication, in line with the Management Board Bylaws.
The Management Board may review motions and/or adopt resolutions at meetings and outside of meetings (i.e. by following a written procedure or via means of direct remote communication using telecommunication devices or any other means that allows identification of the Board member).
The Management Board is also permitted to vote, review motions and adopt resolutions according to the following procedures:
- 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,
- via means of direct remote communication (e.g. using electronic mail, teleconference, videoconference or dedicated IT system).
The Management Board reviews motions and adopts resolutions via means of direct remote communication in such a way that each of the Management Board Members participating in the ballot casts his or her vote sending a message by electronic mail / telephone/teleconference/videoconference or via a dedicated IT system, specifying whether he or she votes “for” the decision, “against” the decision or “abstains” from voting. If this is not specified, the vote shall be deemed not cast,
The decision on ordering a ballot following the procedures specified above is made by the President of the Management Board and, in his or her absence, by the Management Board Member convening the meeting, specifying at the same time the deadline for casting the votes. The date of review of a motion/adoption of a resolution following the procedures 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 stance 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 procedures specified above are delivered to all Management Board Members in hardcopy and/or via means of direct remote communication, while specifying the deadline for casting votes.
The Management Board votes in an open ballot, and its resolutions are adopted by an absolute majority of votes, where at least three Management Board Members attend the meeting. In the event of a tie vote, the President of the Management Board shall have the casting vote (except for voting on appointment of a commercial proxy, where unanimity of the Management Board Members is required). Whenever an “against” vote is cast and/or a dissenting opinion is submitted for the minutes by a Management Board Member, the minutes are immediately handed over to the Supervisory Board.
The Management Board Bylaws also allow the Management Board Members to sign documents with a qualified signature and provide for the possibility to vote using a dedicated IT system and define the basic duties of the Management Board.
In 2021, the Management Board held 58 meetings dedicated to the performance of the Board’s duties and adopted 845 resolutions, including via means of direct remote communication. Number of absences of the Management Board Members during the meetings of the Management Board in 2021: Tomasz Cudny – 2, Sebastian Bartos – 5, Robert Ostrowski – 3, Artur Wojtków – 9, Tomasz Duda – 1, Włodzimierz Hereźniak – 1, Barbara Piontek – 3. The Management Board passed no resolution regarding unexcused absences.
Appointing and dismissing the JSW’s Management Board Members
The Management Board consists of three to seven Members who are appointed for a joint term of 3 years by the Supervisory Board following a qualification procedure (except for the Management Board Member appointed by JSW employees). 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. 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. 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:|
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 BOARD: |
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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.
Composition of the JSW Management Board
Table. COMPOSITION OF THE JSW MANAGEMENT BOARD OF THE 10TH TERM OF OFFICE AND CHANGES TO IT
| FIRST AND LAST NAME | POSITION | TERM IN POSITION |
|---|---|---|
| Włodzimierz Hereźniak | President of the Management Board | 1 Jan 2021 - 18 Jan 2021 |
| President of the Management Board appointed as acting Vice-President of the Management Board for Sales | 1 Jan 2021 - 18 Jan 2021 | |
| Vice-President of the Management Board for Sales | 5 May 2021 - 9 Jul 2021 | |
| Artur Dyczko | Vice-President of the Management Board for Technical and Operational Matters | 1 Jan 2021 - 29 Mar 2021 |
| Vice-President of the Management Board appointed as acting Vice-President of the Management Board for Development | 18 Jan 2021 - 28 Feb 2021 | |
| Radosław Załoziński | Vice-President for Financial Matters | 1 Jan 2021 - 29 Mar 2021 |
| Vice-President of the Management Board appointed as acting Vice-President of the Management Board for Sales | 18 Jan 2021 – 29 Mar 2021 | |
| Tomasz Duda | Vice-President for Development | 1 Jan 2021 - 9 Jul 2021 |
| Vice-President of the Management Board appointed as acting Vice-President of the Management Board for Technical and Operational Matters | 29 Mar 2021 - 9 Jul 2021 | |
| Barbara Piontek | President of the Management Board | 1 Mar 2021 – 9 Jul 2021 |
| President of the Management Board appointed as acting Vice-President of the Management Board for Sales | 29 Mar 2021 – 4 May 2021 | |
| President of the Management Board appointed as acting Vice-President of the Management Board for Financial Matters | 29 Mar 2021 – 9 May 2021 | |
| Jarosław Jędrysek | Vice-President for Financial Matters | 10 May 2021 – 9 Jul 2021 |
| Stanisław Prusek | Supervisory Board Member seconded to temporarily perform the duties of the President of the Management Board, entrusted with serving in the capacity of Vice-President of the Management Board for Technical and Operational Matters | 9 Jul 2021 – 30 Jul 2021 30 Jul 2021 – 15 Aug 2021 16 Aug 2021 – 27 Aug 2021 |
| Michał Rospędek | Supervisory Board Member seconded to temporarily perform the duties of the Vice-President of the Management Board for Sales, entrusted with serving in the capacity of Vice-President of the Management Board for Development | 9 Jul 2021 – 30 Jul 2021 |
| Sebastian Bartos | Vice-President of the Management Board for Sales | 30 Jul 2021 - 31 Dec 2021 |
| Robert Ostrowski | Vice-President for Financial Matters | 3 Aug 2021 – 31 Dec 2021 |
| Tomasz Cudny | President of the Management Board | 28 Aug 2021 – 31 Dec 2021 |
| President of the Management Board entrusted with serving in the capacity of the Vice-President of the Management Board for Technical and Operational Matters | 28 Aug 2021 – 31 Aug 2021 | |
| President of the Management Board entrusted with serving in the capacity of the Vice-President of the Management Board for Development | 28 Aug 2021 – 31 Dec 2021 | |
| Edward Paździorko | Vice-President of the Management Board for Technical and Operational Matters | 1 Jan 2021 - 31 Dec 2021 |
| Artur Wojtków (z wyboru pracowników) |
Vice-President for Employment and Social Policy | 1 Jan 2021 - 31 Dec 2021 |
| Vice-President of the Management Board appointed as acting Vice-President of the Management Board for Financial Matters | 9 Jul 2021 – 2 Aug 2021 | |
| Vice-President of the Management Board appointed as acting Vice-President of the Management Board for Development | 30 Jul 2021 - 27 Aug 2021 |
CHANGES TO THE JSW MANAGEMENT BOARD IN 2021
- On 18 January 2021, the JSW Supervisory Board:
- dismissed Mr. Włodzimierz Hereźniak from the function of President of the Management Board, who was also acting Vice-Presidents of the Management Board for Sales,
- 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 appointed Ms. Barbara Piontek to the position of President of the Management Board for the 10th term of office, effective as of 1 March 2021.
- On 29 March 2021, the JSW Supervisory Board:
- dismissed Mr. Artur Dyczko serving in the capacity of Vice-President of the Management Board for Technical and Operational Matters,
- dismissed Mr. Radosław Załoziński serving in the capacity of Vice-President of the Management Board for Financial Matters,
- entrusted Ms. Barbara Piontek with the duties of acting Vice-President of the Management Board for Financial Matters and Vice-President of the Management Board for Sales from 29 March 2021,
- entrusted Mr. Tomasz Duda with the duties of acting Vice-President of the Management Board for Technical and Operational Matters from 29 March 2021.
- On 4 May 2021, the JSW Supervisory Board made a decision to appoint:
- Mr. Włodzimierz Hereźniak as the President of the Management Board for sales, as of 5 May 2021,
- Mr. Jarosław Jędrysek as the Vice-President of the Management Board for Financial Matters, as of 10 May 2021.
- On 9 July 2021, the JSW Supervisory Board:
- dismissed Ms. Barbara Piontek from the position of President of the JSW Management Board for the 10th term of office, effective as of 9 July 2021,
- dismissed Mr. Tomasz Duda from the position of Vice-President of the Management Board for Development who was also Vice-President of the Management Board for Technical and Operational Matters, effective as of 9 July 2021,dismissed Ms. Barbara Piontek from the position of President of the JSW Management Board for the 10th term of office, effective as of 9 July 2021,
- dismissed Mr. Włodzimierz Hereźniak from the position of Vice-President of the Management Board for Sales, effective as of 9 July 2021,
- seconded Mr. Stanisław Prusek, a Supervisory Board Member, to act temporarily in the capacity of President of the JSW Management Board from 9 July 2021 to 8 October 2021, inclusively, though no longer than until the date of appointing the President of the Management Board,
- seconded Mr. Michał Rospędek, a Supervisory Board Member, to act temporarily in the capacity of Vice-Presidents of the Management Board for Sales from 9 July 2021 to 8 October 2021, inclusively, though no longer than until the date of appointing the Vice-President of the Management Board for Sales,
- entrusted Mr. Stanisław Prusek with the duties of Vice-President of the Management Board for Technical and Operational Matters from 9 July 2021 to the date of appointment of the Vice-President of the Management Board for Technical and Operational Matters,
- entrusted Mr. Michał Rospędek with the duties of Vice-President of the Management Board for Development from 9 July 2021 to the date of appointment of the Vice-President of the Management Board for Development,
- entrusted Mr. Artur Wojtków with the duties of Vice-President of the Management Board for Financial Matters from 9 July 2021 to the date of appointment of the Vice-President of the Management Board for Financial Matters.
- On 9 July 2021, Mr. Jarosław Jędrysek submitted his resignation from the function of Vice-President of the Management Board for Financial Matters, effective as of 9 July 2021.
- On 30 July 2021, Mr. Stanisław Prusek and Mr. Michał Rospędek submitted their declarations of resignation from secondment to temporarily perform the duties of JSW Management Board Members.
- On 30 July 2021, the JSW Supervisory Board:
- appointed Mr. Sebastian Bartos to be the Vice-President of the Management Board for Sales at JSW in its 10th term of office as of 30 July 2021,
- appointed Mr. Robert Ostrowski to be the Vice-President of the Management Board for Financial Matters at JSW as of 3 August 2021,
- appointed Mr. Edward Paździorko to be the Vice-President of the Management Board for Technical and Operational Matters at JSW as of 1 September 2021,
- seconded Mr. Stanisław Prusek to perform temporarily the duties of the President of the Management Board, while simultaneously entrusting him with performing the duties of the Vice-President of the Management Board for Technical and Operational Matters. The period of secondment has been set for the time from 30 July 2021 to 15 August 2021 inclusively, though for no longer than until the date when the President of the Management Board is appointed,
- entrusted Mr. Artur Wojtków with the duties of Vice-President of the Management Board for Development from 30 July 2021 to the date of appointment of the Vice-President of the Management Board for Development.
- On 13 August 2021 the JSW Supervisory Board seconded Mr. Stanisław Prusek, a Supervisory Board Member to perform temporarily the duties of the President of the JSW Management Board, while simultaneously entrusting him with performing the duties of the Vice-President of the Management Board for Technical and Operational Matters for the period from 16 August 2021 to 27 August 2021 inclusively.
- On 27 August 2021 the JSW Supervisory Board:
- appointed Mr. Tomasz Cudny as of 28 August 2021 to the position of President of the JSW Management Board for the 10th term of office,
- appointed Mr. Tomasz Cudny to serve as the acting Vice-President of the Management Board for Technical and Operational Matters from 28 August 2021 to 31 August 2021,
- appointed Mr. Tomasz Cudny to serve as the acting Vice-President of the Management Board for Development from 28 August 2021 to the date of appointment of the Vice-President of the Management Board for Development, at the same time rescinding its earlier decision to entrust this function to Mr. Artur Wojtków.
Table. COMPOSITION OF THE JSW MANAGEMENT BOARD AT THE TIME OF PREPARING THIS REPORT
| MEMBERS OF THE JSW MANAGEMENT BOARD | |
|---|---|
|
TOMASZ CUDNY President of the Management Board acting Vice-President of the Management Board for Development |
Graduated from the AGH University of Science and Technology in Kraków, majoring in Underground Deposit Mining Technique at the Mining Department. Completed postgraduate studies in Public Procurement at the Department of Organization and Management at the Silesian University of Technology. He is qualified to sit on supervisory bodies of companies with a State Treasury shareholding. After graduation he worked at the Kazimierz-Juliusz mine in Sosnowiec, where he passed through all the professional career levels, from trainee to Manager of the Mining Works Department and Deputy Head of Mine Operations. He worked in mining development and decommissioning and reinforcement departments. He co-created the mining method for a strongly sloping coal seam and, together with a team, he worked out the possibility of maintaining roadway excavations adjacent to goafs. In 2007-2010, he worked as Chief Specialist in the Production Team, and then in the Logistics and Tender Team in the Office of the Management Board of Katowicki Holding Węglowy S.A. (KHW S.A.). Later on, he held managerial positions in KWK Murcki-Staszic and KWK Wujek mines. In 2016 he became the President of the Management Board of Katowicki Holding Węglowy S.A. and in 2017 the President of the Management Board of Spółka Restrukturyzacji Kopalń S.A. From 2019 to 2021, he served as President of the Management Board of Tauron Wydobycie S.A. Since August 2021, he has served as President of the Management Board of Jastrzębska Spółka Węglowa S.A. Area of management: Hhe oversees all of the Company’s operations, including in particular: Organization and Management, Security, Communications and PR, Legal, Audit and Control, Integrated Management System, Risk Management, Security, Personal Data and Quality Area of management of the Vice-President of the Management Board for Development: He oversees all of the Company’s operations, including in particular: Development, Corporate Governance, Compliance and Innovations. |
|
SEBASTIAN BARTOS Vice-President of the Management Board for Sales |
He started his professional career in 1999 at the editorial office of the stock exchange newspaper “Die Telebörse” of the Handelsblatt Group in Frankfurt am Main. Associated with the Jastrzębska Spółka Węglowa S.A. Group since 2002. In the Sales Department of Polski Koks S.A. and later on in Jastrzębska Spółka Węglowa S.A. he worked his way up the career ladder from Sales Specialist to Director of the Coke and Hydrocarbons Sales Department. Since the beginning of his professional career in the Group, he has been associated with trade, working in managerial positions at various levels responsible for the sale of the Group’s products, i.e. coking coal, coke, hydrocarbons, steam coal, as well as logistics and market analysis. He has 20 years of professional experience and unique knowledge in trading bulk commodities in highly volatile and demanding markets, knowledge of specific customers and the changes currently taking place Participant and speaker of numerous specialist conferences on raw materials in Poland and abroad. He is fluent in German and English. Vice-President of the Management Board for Sales of Jastrzębska Spółka Węglowa S.A. since July 2021. Area of management: He oversees all of the Company’s operations, including in particular: Coal Trading, Coke and Hydrocarbons Trading, Sales Projection and Analyses, and Forwarding. |
|
ROBERT OSTROWSKI Vice-President for Financial Matters |
He has many years of experience in management positions, mainly in finance, among others in the mining, steel and power industry, in companies owned by the State Treasury as well as in private companies. After university, Robert Ostrowski worked for private funds in the mining industry. From 1998 to 2002 he was Finance Director at Huta Katowice S.A., from 2002 to 2006 he was Finance Director and Director of the Financial Projects Department at Mittal Steel Poland S.A. (previously: Huta Katowice S.A., Polskie Huty Stali S.A., now ArcelorMittal), from 2006 to 2008 he was Vice-President of the Management Board for Financial Matters and Finance at Jastrzębska Spółka Węglowa S.A., from 2008 to 2014 he was President of the Management Board of Minerals Mining Group S.A., from 2014 to 2015 he was a Member of the Management Board for Financial Matters at Polskie Koleje Linowe S.A. and Polskie Koleje Górskie S.A. From February 2016, he was a Member of the JSW S.A. Supervisory Board seconded to serve as a Member of the JSW S.A. Management Board and then from June 2016 to February 2019, he served as Vice-President of the Management Board for Financial Matters at JSW. In this period he was responsible for, among other things, developing the assumptions and implementing the financial restructuring plan for JSW and building a long-term financing structure based on the creation of the Closed-End Stabilization Investment Fund, the purpose of which was to support the Company’s current liquidity and reduce the impact of coal and coke price volatility risk on continuity of the Group’s operating and investment activity. He was also responsible for obtaining and finalizing long-term amortized and revolving bank financing. From 2019 to 2020, he served as President of the Management Board of PGE Górnictwo i Energetyka Konwencjonalna S.A. - the largest power producer in Poland covering over 39% of the demand for electricity. Then, from May 2020, he was President of the Management Board of Polskie Elektrownie Jądrowe Sp. z o.o. (previously PGE EJ 1 Sp. z o.o.). Since August 2021 he has been serving as Vice-President of the Management Board for Financial Matters in Jastrzębska Spółka Węglowa S.A. Area of management: He oversees all operations in the Company, including in particular: Finance, Controlling, Accounting and Stock Exchange Relations. |
|
EDWARD PAŹDZIORKO Vice-President of the Management Board for Technical and Operational Matters |
From the outset of his career he has been active in the mining industry. In 1992, he started working in the “Wesoła” coal mine in Mysłowice, initially as an underground trainee, and then he worked his way up the supervisory ladder from the position of overman, through shift foreman, branch manager and mining foreman, to mining works manager and deputy chief mining engineer. While working at the “Wesoła” coal mine until 2007, he was also qualified as Head of Mine Operations. He gained his mining experience in areas of the greatest natural hazards, including methane, crumbling, fire and water hazards, managing large teams of people. He has also proven himself as a mine rescuer and managing direct rescue operations as an Operation Manager. In 2007-2008, he worked in mining supervision at KGHM Polska Miedź S.A.’s “Lubin” Mine. From 2008 to 2016 he worked at the KWK “Murcki-Staszic” mine owned by Katowicki Holding Węglowy S.A. (KHW), where, among other things, he worked as Chief Mining Engineer and, since 2015, as Technical Director of this mine. Since July 2016, working as the Chief Engineer at KHW S.A., he participated in the preparation and transfer of KWK “Śląsk” and KWK “Wieczorek” to Spółka Restrukturyzacji Kopalń, and in the merger of Katowicki Holding Węglowy S.A. with Polska Grupa Górnicza S.A. (PGG S.A.). After the incorporation of KHW S.A. into the PGG S.A. structures, he co-founded the Natural Hazards Department at the PGG S.A.’s Management Board. As of June 2017, he was the Director of the Mining Investment Works Department at Polska Grupa Górnicza S.A. During this time he supervised, among others, the implementation of innovative directional drilling with the use of plunge engines used in the methane drainage from mines, as well as specialized the Department’s activity in a number of mining works required for the Company’s mines. From December 2019 to 31 August 2021, he served as Vice President of the Management Board for Technical Matters at TAURON Wydobycie S.A., where, through his technical and organizational activities, he significantly contributed to stabilizing the company’s performance, especially in terms of production and the prospects for the existence of mines within JSW in accordance with the Social Contract. Since September 2021 he has been serving as Vice-President of the Management Board for Technical and Operational Matters in Jastrzębska Spółka Węglowa S.A. Area of management: He oversees all of the Company’s operations, including in particular: Production, Methane Drainage, Investments, Automation and IT Technology, Strategy and Process Optimization, Coal Preparation, OHS |
|
ARTUR WOJTKÓW Vice-President of the Management Board for Employment and Social Policy |
Area of management: He oversees all of the Company’s operations, including in particular: Labor, Payroll, Property Management and HR Management. |
Graduated from the Faculty of International Economic Relations and Global Problems at the Academy of Economics in Katowice (now the University of Economics in Katowice), a scholarship holder at the Fachhochschule Frankfurt 
Graduate of Executive MBA studies and the Faculty of National Economy at the Wrocław University of Economics. He also completed postgraduate studies in Capital Investments and Company Development Projects and postgraduate studies in International Financial Reporting Standards at the Warsaw School of Economics/Ernst&Young. He also participated in a course for investment advisors and passed an exam for candidates for supervisory board members in State Treasury companies.
Graduated from the AGH University of Science and Technology in Kraków, Faculty of Mining and Geology. He also completed postgraduate MBA studies at the Warsaw School of Economics. In addition he completed postgraduate studies 
A lawyer by education, 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. COMPENSATION SYSTEM FOR MANAGEMENT BOARD MEMBERS IN JSW
The rules governing the shaping of the compensation of Management Board members have been adopted by the JSW Shareholder Meeting and Supervisory Board in compliance with the regulations laid down in the Act of 9 June 2016 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 for the provision of management services were concluded with Management Board Members providing for an obligation to act personally, 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:
- 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;
- 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:
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,
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.
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 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.Table. Management Board compensation for 2021 (PLN)
| FIRST AND LAST NAME | PERIOD | COMPENSATION – MANAGEMENT SERVICES* | VARIABLE COMPENSATION FOR 2021** | BENEFITS, INCOME FROM OTHER SOURCES*** | TOTAL |
|---|---|---|---|---|---|
| Tomasz Cudny | 28 Aug - 31 Dec 2021 | 248 000,00 | - | - | 248 000,00 |
| Sebastian Bartos | 30 Jul - 31 Dec 2021 | 253 333,34 | - | - | 253 333,34 |
| Robert Ostrowski | 03 Aug - 31 Dec 2021 | 246 666,66 | - | 8 473,30 | 255 139,96 |
| Edward Paździorko | 01 Sep - 31 Dec 2021 | 200 000,00 | - | 845,00 | 200 845,00 |
| Artur Wojtków | 01 Jan - 31 Dec 2021 | 600 000,00 | - | - | 600 000,00 |
| Włodzimierz Hereźniak | 01 Jan - 18 Jan 2021 5 May - 9 July 2021 |
146 000,00 | - | 124 000,00 | 270 000,00 |
| Jarosław Jędrysek | 10 May - 9 Jul 2021 | 101 666,67 | - | - | 101 666,67 |
| Barbara Piontek | 1 Mar - 9 Jul 2021 | 258 000,00 | - | 258 000,00 | |
| Tomasz Duda | 1 Jan - 9 Jul 2021 | 315 000,00 | 300 000,00 | 615 000,00 | |
| Artur Dyczko | 1 Jan - 29 Mar 2021 | 148 333,33 | 307 676,80 | 456 010,13 | |
| Radosław Załoziński | 1 Jan - 29 Mar 2021 | 148 333,33 | 300 000,00 | 448 333,33 | |
| TOTAL | 2 665 333,33 | - | 1 040 995,10 | 3 706 328,43 |
* This item includes only the cost of compensation based on management contracts.
** This item comprises the variable compensation for 2021 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 2021 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) and/or other benefits e.g. reimbursement of apartment rental fee.
Table. COMPENSATION OF THE SUPERVISORY BOARD MEMBER SECONDED TO TEMPORARILY PERFORM THE DUTIES OF THE VICE-PRESIDENT OF THE MANAGEMENT BOARD IN 2021 (PLN)
| FIRST AND LAST NAME | PERIOD | COMPENSATION – MANAGEMENT SERVICES* |
VARIABLE COMPENSATION FOR 2021 | BENEFITS, INCOME FROM OTHER SOURCES | TOTAL |
|---|---|---|---|---|---|
| Stanisław Prusek | 9 Jul - 28 Aug 2021 | 96 774,19 | - | - | 96 774,19 |
| Michał Rospędek | 9 Jul - 30 Jul 2021 | 35 483,87 | - | - | 35 483,87 |
| TOTAL | 132 258,06 | - | - | 132 258,06 |
| FIRST AND LAST NAME | PERIOD | COMPENSATION – MANAGEMENT SERVICES* | VARIABLE COMPENSATION FOR 2020** | BENEFITS, INCOME FROM OTHER SOURCES*** | TOTAL |
|---|---|---|---|---|---|
| Włodzimierz Hereźniak | 01 Jan - 31 Dec 2020 | 720 000,00 | 36 000,00 | - | 756 000,00 |
| Artur Dyczko | 01 Jan - 31 Dec 2020 | 600 000,00 | 30 000,00 | 23 494,08 | 653 494,08 |
| Radosław Załoziński | 01 Jan - 31 Dec 2020 | 600 000,00 | 30 000,00 | - | 630 000,00 |
| Artur Wojtków | 01 Jan - 31 Dec 2020 | 600 000,00 | 30 000,00 | - | 630 000,00 |
| Tomasz Duda | 13 Feb - 31 Dec 2020 | 528 333,33 | 26 416,67 | - | 554 750,00 |
| Rafał Pasieka | 01 Jan - 12 Feb 2020 | 70 000,00 | - | 150 000,00 | 220 000,00 |
| Tomasz Śledź | - | - | - | 125 000,00 | 125 000,00 |
| TOTAL | 3 118 333,33 | 152 416,67 | 298 494,08 | 3 569 244,08 |
** This item includes the variable compensation for 2020 paid out in 2021 and 2022.
*** This item includes benefits payable after the expiration of the management contract (severance pay, compensation for refraining from competitive activity, reimbursement of apartment rental costs).
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.
With a statement of expenses being submitted, the variable compensation for 2019 (charged to costs of 2019) granted by the decision of the Supervisory Board to Mr Artur Wojtków was also paid in 2021 in the total amount of PLN 291,976.79.
REMUNERATION OF MANAGEMENT BOARD MEMBERS OF THE GROUP COMPANIES
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. 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.
Since 7 December 2021, the Compensation Policy for Corporate Bodies of JSW’s Subsidiaries has been in force in the Group, which updates prior regulations pertaining to the compensation of the corporate bodies of JSW’s subsidiaries. This update was associated with implementing different regulations pertaining to JSW’s key employees (a distinct Compensation Policy for JSW’s Management has been adopted in this respect) from the regulations pertaining to the compensation of the corporate bodies of JSW’s subsidiaries. The JSW Management Board’s control over the compensation paid to members of the subsidiaries’ corporate bodies has been extended in addition to specifying hitherto solutions in greater detail.
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. The non-compete clauses in the contracts for the provision of management services are compliant with the regulations laid down in the Act on the Rules for Shaping the Compensation of Persons Managing Certain Companies of 9 June 2016 and the resolutions of the General Meetings/Shareholder Meetings of the Group companies on the rules governing the determination of remunerations of the Management Board Members.
NON-FINANCIAL REMUNERATION COMPONENTS DUE TO THE PARENT COMPANY’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 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 allows the possibility of using the assigned company cars for the Managers’ private purposes.
The Supervisory Board granted each Management Board Member the right to be insured against liability for the function discharged. In each financial year, a 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 and 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.
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.
Powers of the JSW Supervisory Board
Powers of the Supervisory Board are set forth in the Articles of Association. 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 2021 Code of Best Practice for WSE Listed Companies.
MATTERS REQUIRING RESOLUTIONS BY THE SUPERVISORY BOARD:
- 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,
- 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 to the Shareholder Meeting a written report on the results of the assessment of the financial statements as to their compliance with the books and with the facts and of the assessment of the reports on the Company’s operations and the Management Board’s motions on the distribution of profit or the coverage of loss,
- 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 JSW and the Management Boards and Supervisory Boards of other companies of the Group,
- issuing opinions on the rules for sponsorship activity conducted by the Company and evaluating efficiency of such sponsorship activity,
- submitting to the Shareholder Meeting for issuing an opinion a report on compensations of JSW’s Management Board and Supervisory Board Members.
RULES OF PROCEDURE OF 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. 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 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. A Supervisory Board Member absent from a meeting may cast his or her vote in writing through another Supervisory Board Member present at the meeting. Voting in writing cannot apply to matters introduced to the agenda during a Supervisory Board meeting.
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 also 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 notice is deemed effective if delivered to the Supervisory Board Member electronically to the e-mail address and the telephone number specified as the correspondence address. The agenda of a convened meeting may be expanded only with the consent of all Supervisory Board Members, and an item may be removed from the agenda of a convened meeting with the consent of an ordinary majority of Supervisory Board Members.
The Chairperson may also order a break in the meeting of the Supervisory Board and 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. 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 may adopt resolutions at meetings and outside of meetings by following a written procedure or via means of direct remote communication.
The Supervisory Board may adopt resolutions by following a written procedure or via means of direct remote communication also in matters for which the Articles of Association of the Company provide for a secret ballot unless any Supervisory Board Member raises an objection. A resolution shall be valid if all Supervisory Board Members have been notified of the content of the draft resolution, at least half of the Supervisory Board members participate in adopting the resolution and no Supervisory Board member has requested that the resolution be adopted at the next meeting of the Supervisory Board. In line with the Supervisory Board Bylaws, the Supervisory Board Members may also participate in the meeting via teleconference or videoconference as provided for in the Supervisory Board Bylaws.
Motions to the Supervisory Board and draft resolutions to be adopted following the written (by circulation) procedure or via means of direct remote communication are delivered to all Supervisory Board Members via means of direct remote communication, specifying the deadline for casting the votes.
Supervisory Board resolutions are adopted in an open ballot and are minuted. Secret ballots are ordered in personnel matters or upon request of at least one of the persons eligible to vote.
Pursuant to § 26 of the Company’s Articles of Association, a Shareholder Meeting resolution is required to determine Supervisory Board's salary.
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.
In 2021, the Supervisory Board held 19 meetings and adopted 189 resolutions (including 39 resolutions via means of direct remote communication).
Information on the attendance of Supervisory Board Members at the meetings and on adopted resolutions on excused absence
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. Presently, the Shareholder Meeting determined the number of Supervisory Board Members to be 12. 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.
Supervisory Board Members exercise their rights and perform their duties in person and are appointed for a joint term of office. 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 Members 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 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.
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. The rules of voting are set forth in the rules adopted by the Supervisory Board. 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 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.
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 changes are made to the Supervisory Board composition, the Supervisory Board shall act in its then current 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
Table. COMPOSITION OF AND CHANGES TO THE JSW SUPERVISORY BOARD OF THE 10TH TERM OF OFFICE
|
FIRST AND LAST NAME |
POSITION |
TERM IN POSITION |
|---|---|---|
| HALINA BUK | Chairwoman of the Supervisory Board | 01.01.2021 - 31.12.2021 |
| JOLANTA GÓRSKA | Member | 01.01.2021 - 31.12.2021 |
| IZABELA JONEK-KOWALSKA | Member | 01.01.2021 - 31.12.2021 |
| ALOJZY NOWAK | Member | 01.01.2021 - 31.12.2021 |
| STANISŁAW PRUSEK | Member | 01.01.2021 - 31.12.2021 |
| MICHAŁ ROSPĘDEK | Member | 01.01.2021 - 31.12.2021 |
| SUPERVISORY BOARD MEMBERS ELECTED BY EMPLOYEES: | ||
| ROBERT KUDELSKI | Secretary of the Supervisory Board | 01.01.2021 - 31.12.2021 |
| PAWEŁ BIESZCZAD | Member | 01.01.2021 - 31.12.2021 |
| TADEUSZ KUBICZEK | Member | 01.01.2021 - 31.12.2021 |
| ARKADIUSZ WYPYCH | Member | 01.01.2021 - 31.12.2021 |
| TADEUSZ KUBICZEK | Member | 01.01.2020 – 31.12.2020 |
| ARKADIUSZ WYPYCH | Member | 01.01.2020 – 31.12.2020 |
No changes were made in the composition of the Supervisory Board in 2021.
Table. 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 supervised 25 Ph.D. students coming from the academic community and economic practice who were awarded degrees in economics. Professor 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 2.3. DPSN 2021. |
|
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 meets the criteria of being independent referred to in principle 2.3 DPSN 2021. |
|
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. He studied International Economics at RUCA at the Free University of Berlin in Antwerp. 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 has gained knowledge and experience working as the head of the International Business Relations Section in the Faculty of Management at the University of Warsaw, the head of the National Economy Unit, Director of the European Center at the University of Warsaw, the Deputy Dean in charge of foreign cooperation in the Faculty of Management at the 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 has served in the following capacities: advisor to the Prime Minister, advisor to the Minister of Agriculture, member of the NewConnect advisory committee working for the Management Board of the Warsaw Stock Exchange, member of the NBP Foundation Council and chairman of the NBP Scientific Council. Over the years he has served as a supervisory board member in the following companies among others: PTE WARTA S.A., PKO BP S.A., PZU S.A., Cyfrowy Polsat S.A., ZE PAK S.A., Bank Millennium S.A., Chairman and Deputy Chairman of the Supervisory Board of EUROLOT S.A. Professor Nowak has distinguished himself through his commitment to public activity. He is a committee member of the “Teraz Polska” Award and President of the Central Management Board of the Academic Sporting Association. Previously, he was a member of the National Development Council working for the President of Poland. He has received many awards and distinctions, including the Minister of National Education’s Award 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 (conferred every year since 1997). He has also participated in many scientific organizations and program boards of periodicals, among others as a member of the editorial board of the Foundations of Management, as the editor-in-chief of the Journal of Interdisciplinary Economics, the Yearbook on Polish European Studies and Mazovia Regional Studies, member of the Program Board of Gazeta Bankowa and a reviewer at PWE S.A. in Warsaw. He publishes 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. DPSN 2016 and principle 2.3. DPSN 2021. |
|
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 Academy of Finance in Warsaw in research methodology in economic sciences, the Warsaw University of Technology in real estate valuation and the Warsaw University of Life Sciences in finance and banking. She has obtained the Triple E European Foundation Certificate in Banking (EFCB 3E). She holds the 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 to become supervisory board members in State Treasury companies. She also completed numerous training courses, among others on the valuation of businesses, the valuation of fair value, appraisal of real estate and property rights for revenue and tax purposes, valuation for the needs of securing bank receivables, appraisal of real estate located in mineral deposit areas, and many others. Ms. Jolanta Górska has been employed, among others, on managerial positions in a governmental agency (ANR) and Totalizator Sportowy Sp. z o.o. In 2006-2007 she was a lecturer in a master’s degree study program in 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 2.3. DPSN 2021. |
|
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 as well as post-graduate management studies (MBA) at Warsaw School of Economics (SGH). 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 has 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. Professor Prusek is a member of the Coal Advisory Group of the European Commission, 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 roof fall 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. DPSN 2016 and principle 2.3. DPSN 2021. |
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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 up deposits and geoengineering” at the AGH University of Science and Technology and an “Executive Master of Business Administration” degree at Collegium Humanum of the 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 activities as a mining geologist, 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 DPSN 2021. |
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PAWEŁ NIERADZIK Position: Supervisory Board Member Represents: JSW employees |
He has been an employee of Jastrzębska Spółka Węglowa since 2007. Currently, he is employed as the Chief Mechanic in the Underground Machinery Department at KWK Budryk. He graduated from the Mechanical Technical High School in Mikołów as a mechanical technician. He continued his education at the Silesian University of Technology in Gliwice (management and production engineering with a specialization in business management) where he obtained a degree as an engineer. Graduate of post-graduate courses of study at the AGH University of Science and Technology in Cracow (in the field of coking coal and coke – modern technological and market-related challenges) and the Warsaw Management University (MBA). He meets the criteria of being independent referred to in principle 2.3 DPSN 2021. |
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ROBERT ŁAZARCZYK Position: Supervisory Board Member Represents: JSW employees |
Graduate of the Silesian University of Technology in Gliwice at the Mining and Geology Faculty. In 1996, he obtained the title of engineer in Mine Deposit Extraction Techniques. He defended his master’s thesis in mine organization and management in 1998. He has been involved in the mining industry since 1991. He gained professional experience when working in the Knurów Mine followed by the Knurów Section of the Knurów-Szczygłowice Mine. He started his work as a physical laborer and in subsequent years he took positions as a senior miner, shift crew leader, branch crew leader, supervisor and department head. In 2018 he took on the position of Chief Mining Engineer – Manager of the Mining Department, which he still holds. A mine rescue worker since 2002, and since 2007 he has served as the Deputy Manager of the Mine Station in the Mining Rescue Service in the Knurów Section.In 2020 he completed his post-graduate course of study with a Master of Business Administration (MBA) at the Executive level at the Collegium Humanum of the Warsaw Management University and he obtained educational qualifications for candidates to become a member of a supervisory body in companies with the State Treasury as a shareholder. He meets the criteria of being independent referred to in principle 2.3 DPSN 2021. |
SUPERVISORY BOARD COMMITTEES
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.
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 holds expertise and skills in accounting or audit 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.
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, also in the area of financial reporting, performance of financial audit activities, in particular audits conducted by an audit firm, taking into account all conclusions and findings of the Audit Supervision Commission resulting from inspections performed in the audit firm,
- 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 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.
Table. Composition of the Supervisory Board Nomination and Compensation Committee at 31 December 2021
| FIRST AND LAST NAME | POSITION | TERM IN POSITION | MEETING THE STATUTORY REQUIREMENTS OF BEING INDEPEDENT | MEETING THE REQUIREMENTS FOR HAVING KNOWLEDGE AND EXPERIENCE |
|---|---|---|---|---|
| Halina Buk | Chairwoman | 01.01.2021– 31.12.2021 | meets the independece criterion | has expertise and skills in accounting or audit of financial statements |
| Paweł Bieszczad | Member | 01.01.2021– 31.12.2021 | meets the independece criterion | has expertise and skills in the industry |
| Jolanta Górska | Member | 01.01.2021– 31.12.2021 | meets the independece criterion | - |
| Robert Kudelski | Member | 01.01.2021– 31.12.2021 | meets the independece criterion | has expertise and skills in the industry |
| Stanisław Prusek | Member | 01.01.2021– 31.12.2021 | does not meet the independence criterion | has expertise and skills from the industry |
In 2021, the JSW Supervisory Board Audit Committee held 8 meetings devoted to discharging its duties and adopted 23 resolutions. In 6 meetings, all the Members of the Audit Committee participated. In the remaining 2 meetings, the following members were absent: Stanisław Prusek (on 26 May 2021) and Paweł Bieszczad (on 1 December 2021). The Committee passed no resolution regarding unexcused absences.
In 2021, the audit firm auditing JSW’s financial statements provided permitted non-audit services to the Parent Company, involving:
- providing the service of conducting agreed procedures to verify that the Financial Ratios defined in the documentation of the Financing Agreements as at 31 December 2020 were calculated correctly,
- providing assurance service of issuing an opinion on a report on compensations of JSW’s Management Board and Supervisory Board Members prepared as at 31 December 2020,
- providing the service of verification of XBRL tags placed on the annual consolidated financial statements of the Jastrzębska Spółka Węglowa S.A. Group for the financial year ended 31 December 2020 and issuing an opinion on compliance with the requirements of Commission Delegated Regulation (EU) 2019/815 of 17 December 2018.
The Audit Committee, having assessed the independence of the audit firm, gave consent to the provision of the above services.
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 CHAINJSW 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, are guided by 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, 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.
- The costs of the audit of the financial statements are incurred by the audited entity.
- 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) services associated with financing, capital structure and capital allocation and investment strategy of the client for whom the audit is carried out, except for providing assurance services in connection with the financial statements, such as issuing comfort letters in connection with the audited company’s prospectuses,
j) conducting promotional activities and trading in equities of the audited company on its own account or the audited company’s equity issue underwriting,
k) human resources services in respect of: management staff that may exert significant influence on 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 or other agreements related to financing based on an analysis of financial information derived from the financial statements or interim 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,
h) assurance pertaining to financial statements or other financial information earmarked for supervision authorities, supervisory board or other supervisory body of the company or owners, exceeding the scope of the statutory audit and aimed at helping such bodies to fulfill their statutory obligations. - 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 2021. The audit firm was selected on 14 May 2021 by the JSW Supervisory Board.
NOMINATION AND COMPENSATION COMMITTEE
The Committee is an advisory and opinion-giving body in respect of the Supervisory Board and 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.
The following tasks in particular fall among the basic powers and duties of the Nomination and Compensation Committee:
- handling matters connected with the appointment procedure for the positions of Management Board Members, including the performance of tasks following from the Regulations for conducting the appointment procedure for the positions of Management Board Members; preparing and presenting to the Supervisory Board draft versions of advertisements in the appointment procedure and questions/problems for candidates during interviews,
- handling matters connected with the appointment and dismissal of a Management Board Member by the employees, including issuing an opinion on the Regulations and presenting the Supervisory Board with relevant recommendations,
- handling matters connected with the appointment and dismissal of Supervisory Board Members by the employees, including issuing an opinion on the Regulations and presenting the Supervisory Board with relevant recommendations,
- preparing draft versions of contracts and other model documents in connection with appointments of Management Board Members for discharging their functions and overseeing the performance of the contractual obligations taken by the parties,
- monitoring and performing periodical analyses of the compensation system, providing an opinion on thee the compensation policy for JSW and the Management Boards and Supervisory Boards of other companies of the Group and presenting recommendations for the Supervisory Board,
- overseeing the implementation of the Management Board’s compensation system, recommending a list of Management Objectives for the Management Board Members (KPI), analyzing the Management Board Report on the performance of Management Objectives and presenting the Supervisory Board with relevant recommendations,
- overseeing the proper implementation of additional benefits for the Management Board stemming from their management contracts.
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.
Table. Composition of the Supervisory Board Nomination and Compensation Committee at 31 December 2021
| FIRST AND LAST NAME | POSITION | TERM IN POSITION |
|---|---|---|
| Alojzy Nowak | Chairman | 01.01.2021 – 31.12.2021 |
| Izabela Jonek-Kowalska | Member | 01.01.2021 – 31.12.2021 |
| Robert Kudelski | Member | 01.01.2021 – 31.12.2021 |
| Michał Rospędek | Member | 01.01.2021 – 31.12.2021 |
| Arkadiusz Wypych | Member | 01.01.2021 – 31.12.2021 |
In 2021, the JSW Supervisory Board Nomination and Compensation Committee held 7 meetings devoted to discharging its duties and adopted 12 resolutions. In five meetings, all the Members of the Nomination and Compensation Committee participated. In the remaining two meetings, the following members did not participate: Izabela Jonek-Kowalska (on 30 July 2021 and 29 November 2021) and Michał Rospędek (on 30 July 2021). The Committee passed no resolution regarding unexcused absences.
Strategy and Development Committee
The Committee is an advisory and opinion-making body for the Supervisory Board and is formed with the purpose of presenting the Supervisory Board with motions, recommendations, opinions and reports on the tasks in the scope of the Committee’s duties.
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 significant 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 inform the Committee on an ongoing basis about all planned and taken actions and changes in the law and regulatory environment pertaining to the Committee’s tasks.
Table. Composition of the Supervisory Board Strategy and Development Committee at 31 December 2021
| FIRST AND LAST NAME | POSITION | TERM IN POSITION |
|---|---|---|
| Stanisław Prusek | Chairman | 01.01.2021 - 31.12.2021 |
| Jolanta Górska | Member | 01.01.2021 - 31.12.2021 |
| Izabela Jonek-Kowalska | Member | 01.01.2021 - 31.12.2021 |
| Tadeusz Kubiczek | Member | 01.01.2021 - 31.12.2021 |
| Alojzy Nowak | Member | 01.01.2021 - 31.12.2021 |
| Michał Rospędek | Member | 01.01.2021 - 31.12.2021 |
| Arkadiusz Wypych | Member | 01.01.2021 - 31.12.2021 |
In 2021, the JSW Supervisory Board strategy and Development Committee held 3 meetings devoted to discharging its duties and adopted 2 resolutions. In two meetings of the Strategy and Development Committee, all the members participated. But the meeting on 22 October 2021 was not attended by Alojzy Nowak. The Committee passed no resolution regarding unexcused absences.
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 of 9 June 2016 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. The legal relationship between Supervisory Board Members and the Company shall be established on the terms set forth in the Articles of Association, including 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 to another Management Board Member or to 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.
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 2021, 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.
Table. Compensation for the Supervisory Board in 2021 (PLN)
| FIRST AND LAST NAME | PERIOD IN OFFICE | COMPENSATION | OTHER INCOME | TOTAL |
|---|---|---|---|---|
| Halina Buk | 01 Jan - 31 Dec 2021 | 89 837,16 | - | 89 837,16 |
| Robert Kudelski | 01 Jan - 31 Dec 2021 | 82 042,44 | - | 82 042,44 |
| Alojzy Zbigniew Nowak | 01 Jan - 31 Dec 2021 | 79 268,04 | - | 79 268,04 |
| Stanisław Prusek | 01 Jan - 31 Dec 2021 | 68 613,78 | - | 68 613,78 |
| Izabela Jonek-Kowalska | 01 Jan - 31 Dec 2021 | 79 268,04 | - | 79 268,04 |
| Jolanta Górska | 01 Jan - 31 Dec 2021 | 79 268,04 | - | 79 268,04 |
| Arkadiusz Wypych | 01 Jan - 31 Dec 2021 | 82 042,44 | - | 82 042,44 |
| Paweł Bieszczad | 01 Jan - 31 Dec 2021 | 82 042,44 | - | 82 042,44 |
| Tadeusz Kubiczek | 01 Jan - 31 Dec 2021 | 82 042,44 | - | 82 042,44 |
| Michał Rospędek | 01 Jan - 31 Dec 2021 | 74 580,18 | - | 74 580,18 |
| TOTAL | 799 005,00 | - | 799 005,00 |
Table. Compensation for the Supervisory Board in 2020 (PLN)
| FIRST AND LAST NAME | PERIOD IN OFFICE | COMPENSATION | OTHER INCOME | TOTAL |
|---|---|---|---|---|
| Halina Buk | 01 Jan - 31 Dec 2020 | 93 114,52 | - | 93 114,52 |
| Robert Kudelski | 01 Jan - 31 Dec 2020 | 85 035,45 | - | 85 035,45 |
| Alojzy Zbigniew Nowak | 01 Jan - 31 Dec 2020 | 82 159,84 | - | 82 159,84 |
| Stanisław Prusek | 01 Jan - 31 Dec 2020 | 82 159,84 | - | 82 159,84 |
| Izabela Jonek - Kowalska | 01 Jan - 31 Dec 2020 | 82 159,84 | - | 82 159,84 |
| Konrad Balcerski | 01 Jan - 29 Oct 2020 | 68 522,33 | - | 68 522,33 |
| Jolanta Górska | 01 Jan - 31 Dec 2020 | 82 159,84 | - | 82 159,84 |
| Arkadiusz Wypych | 01 Jan - 31 Dec 2020 | 85 035,45 | - | 85 035,45 |
| Paweł Bieszczad | 01 Jan - 31 Dec 2020 | 85 035,45 | - | 85 035,45 |
| Tadeusz Kubiczek | 01 Jan - 31 Dec 2020 | 85 035,45 | - | 85 035,45 |
| Robert Tomanek | 01 Jan - 21 Jan 2020 | 5 454,29 | - | 5 454,29 |
| Michał Rospędek | 29 Oct - 31 Dec 2020 | 13 850,60 | - | 13 850,60 |
| TOTAL | 849 722,90 | - | 849 722,90 |
REMUNERATION OF SUPERVISORY BOARD MEMBERS OF THE GROUP COMPANIES
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 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 Compensation Policy for Corporate Bodies of JSW’s Subsidiaries which regulates the compensations of, inter alia, the Supervisory Board Members of the Group companies has been in effect since 7 December 2021.
INFORMATION ON ANY LIABILITIES UNDER PENSIONS AND SIMILAR BENEFITS
By virtue of the discharge of the functions entrusted to them, JSW Management Board Members and 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.
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.
OPERATION OF THE SHAREHOLDER MEETING
The manner of operation of the JSW Shareholder Meeting and its powers are defined in the Commercial Company Code, the Articles of Association and in the JSW Shareholder Meeting Bylaws.
A Shareholder Meeting is convened by way of an announcement published on JSW's website and in the form of a current report on the terms specified in the provisions of law. Shareholder Meetings are held in Warsaw, in Katowice or at the registered office of JSW. Each time the date and place of holding the Shareholder Meeting are determined, JSW takes into account all circumstances enabling as many shareholders as possible to participate in the deliberations. The following persons may also participate in the Shareholder Meeting: Supervisory Board Members, Management Board Members, JSW commercial proxies, persons who are members of JSW bodies whose mandate expired before the date of a Shareholder Meeting. The following persons may be also present during the meeting: experts, advisors, statutory auditors and guests invited by the body or convening persons, media representatives, JSW employees handling the organization of the Shareholder Meeting and persons providing legal and technical services. Supervisory Board Members and Management Board Members participate in the meeting in the composition that enables them to give content-related answers to the questions asked during the meeting.
A decision to hold a Shareholder Meeting with the use of means of electronic communication shall be made by the Supervisory Board. In accordance with its decision, it is not permitted to participate, take the floor and exercise voting rights during and before the Shareholder Meeting using means of electronic communication. The course of the Shareholder Meeting is registered in an audiovisual system and broadcast online and its electronic recording is published on JSW’s website.
The materials submitted to the General Meeting shall be made available to shareholders on a timely basis on the website and the draft resolutions shall include reasons allowing for decisions to be taken with due consideration. In connection with adoption of Rule 4.8 of the Code of Best Practice for WSE Listed Companies 2021, the Management Board of the Company recommends that draft resolutions concerning the items entered in the agenda of the Shareholder Meeting or items to be entered in the agenda be submitted no later than three days before the date of Shareholder Meeting. Within the confines provided for by the law, the shareholders may contact the Company with the use of e-mail address: [email protected].
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 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 on the terms resulting from the Commercial Company Code.
The persons or the body other than the Management Board that individually convenes the Shareholder Meeting shall promptly notify the Company’s Management Board about this fact and deliver to it 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.
A Shareholder Meeting may adopt the proposed agenda without amendments, change the order of the items considered or remove particular items from it. Removal from the agenda or a failure to consider the item included in the agenda at the shareholders’ request shall require the consent of all Shareholders participating on the Shareholder Meeting who submitted such a request.
The Shareholder Meeting may be cancelled if there are objective obstacles to its holding or it is manifestly lacking in purpose. Cancellation or change of the date of the Shareholder Meeting is a special situation and shall be made by the body or person convening the meeting. Cancellation or change of the date of the Shareholder Meeting is done following the same procedure as for convening a Shareholder Meeting. Cancellation of the Shareholder Meeting, in which agenda items were included at the request of authorized persons or which was convened at the request of authorized persons, is possible only with the consent of the requesting persons.
A Shareholder Meeting adopts a resolution to determine whether the costs of holding the meeting will be covered by JSW.
In 2021 there were 3 Shareholder Meetings at JSW convened by the Management Board.
POWERS OF THE SHAREHOLDER MEETING
MATTERS REQUIRING RESOLUTIONS BY 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,
- issuing an opinion on a report on compensations of JSW’s Management Board and Supervisory Board Members.
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 AND HOW THEY ARE EXERCISED
JSW Shareholder rights include:
- Request to convene a 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.
- Request to place specified items on the agenda – a Shareholder or Shareholders representing at least one-twentieth of the share capital may request that the specified items be placed on 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 of changes is done following the same procedure as for convening a Shareholder Meeting.
- Election of the Chairperson – each authorized 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.
- Submission of draft resolutions:
a) before the date of a Shareholder Meeting – a shareholder or shareholders representing at least one-twentieth of the share capital may submit to the Company the draft resolutions concerning the items included in the agenda of a Shareholder Meeting or the items which will be included in the agenda. The Company will immediately post the draft resolutions on the website.
b) during a Shareholder Meeting – every Shareholder may submit draft resolutions on matters included in the agenda.
Draft resolutions and motions submitted to 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. - Request a copy of motions concerning items included in the agenda – 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.
- Participation in a Shareholder Meeting and exercising voting right – a shareholder may participate in the Shareholder Meeting and exercise voting rights in person, through a proxy or through a person authorized to submit representations of will on its behalf. A proxy may represent more than one shareholder. Persons who are JSE shareholders holding the Company’s shares on their securities accounts sixteen days before the date of the Shareholder Meeting are entitled to take part in the Shareholder Meeting. Pledgees and users holding the voting right have the right to participate in the Shareholder Meeting provided that the limited right in rem established in their favor has been registered on the securities account on the date of registering their participation in the Shareholder Meeting.
The persons authorized under shares as well as pledgees and users holding the voting right, in order to participate in the Shareholder Meeting, should request the entity keeping the securities account to issue a name-specific certificate on the right to participate in the Shareholder Meeting within the set time limit.
During a Shareholder Meeting 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 Commercial Company Code. Voting on technical matters may only pertain to the things related to conducting a Shareholder Meeting. Resolutions that may affect how shareholders exercise their rights are not subject to a vote under this procedure. - Viewing the list of shareholders – shareholders may view the list of persons authorized to participate in the Shareholder Meeting which will be displayed in the Company 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.
- Election of the Election Committee – 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. 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, and this committee may have maximum three members.
- Election of Supervisory Board Members – upon a motion of Company shareholders representing at least one-fifth of the Company’s share capital, the Supervisory Board should be elected by the closest Shareholder Meeting by voting in separate groups.