Statement of Compliance with Corporate Government Principles in 2015

Pursuant to § 91 Section 5.4 of the Ordinance of the Polish Minister of Finance on current and periodic information published by issuers of securities and the conditions governing the recognition of information required under the law of a non-member state, adopted on February 19, 2009, the Executive Board of ATM Grupa S.A. presents its 2015 report on the Company’s compliance with the principles of corporate governance set forth in the code of Best Practice for WSE Listed Companies, effective from December 31, 2015, available at http://www.corp-gov.gpw.pl. This report is part of the Company’s annual report and is available on its website (www.atmgrupa.pl).

Principles the Company did not comply with in 2015

Part I. Recommendations on best practices of listed companies

Principle 5

‘A company should have a remuneration policy and rules of defining the policy. The remuneration policy should in particular determine the form, structure, and level of remuneration of members of supervisory and management bodies. Commission Recommendation of 14 December 2004 fostering an appropriate regime for the remuneration of directors of listed companies (2004/913/EC) and Commission Recommendation of 30 April 2009 (2009/385/EC) should apply in defining the remuneration policy for members of supervisory and management bodies of the company.’

The extent of and reasons for non-compliance

The Company has employee compensation rules in place but no formal policy for compensating members of the Company’s executive and supervisory personnel. The manner of compensating members of the Supervisory Board is set forth in a resolution of the General Meeting, and the compensation of Executive Board members is determined by the Supervisory Board, i.e. as required by the Code of Commercial Companies.

Principle 12

‘A company should enable its shareholders to exercise their right to vote during a General Meeting either in person or through a plenipotentiary, from a location other than the General Meeting, using electronic communication means.’

The extent of and reasons for non-compliance

The Company does not offer its shareholders the facility to vote by electronic means. The Company will monitor the market for electronic voting solutions which are safe, reliable and cost-effective. If we find a solution offering a good quality/price ratio, we will consider implementing it.

Part II. Best practices adopted by executive boards of listed companies

Principle 1

‘The Company maintains a company website where, in addition to the information required by law, it publishes:

[…]

9a) the audio or video recordings of each General Meeting […]’

The extent of and reasons for non-compliance

The Company does not make either audio or video recordings of its General Meetings nor does it publish such recordings on its website. The Executive Board is doubtful whether this method of presentation would be fully accepted. In order to offer the public access to a webcast or recording of such proceedings, one needs consent of all attendees to use their image. We are not sure whether all persons concerned would grant their consent, especially those shareholders who remain anonymous. At the same time making General Meetings public may indirectly lead to a decrease in the number of shareholders who want to attend them, which would constitute an infringement of the shareholders’ rights. Therefore, the Company has no plans to change its current practice.

The extent of and reasons for non-compliance

The Company does not offer its shareholders the facility to vote by electronic means. The Company will monitor the market for electronic voting solutions which are safe, reliable and cost-effective. If we find a solution offering a good quality/price ratio, we will consider implementing it.

Part IV. Best practices adopted by shareholders

Principle 10

‘A company should enable its shareholders to participate in a General Meeting using electronic communication means through:

1) real-life broadcast of General Meetings;

2) real-time bilateral communication where shareholders may take the floor during a General Meeting from a location other than the General Meeting’

The extent of and reasons for non-compliance

The Company does not webcast its General Meetings. The Executive Board is doubtful whether this method of presentation would be fully accepted. In order to offer the public access to a webcast or recording of such proceedings, one needs consent of all attendees to use their image. We are not sure whether all persons concerned would grant their consent, especially those shareholders who remain anonymous. At the same time making General Meetings public may indirectly lead to a decrease in the number of shareholders who want to attend them, which would constitute an infringement of the shareholders’ rights. Therefore, the Company has no plans to change its current practice.

Remote two-way electronic communication is not available during General Meetings as the Company has not been requested to implement such a solution and due to the high cost of implementing it. The Company will monitor the market for solutions enabling safe, reliable and cost-effective remote electronic communication. If we find a solution offering a good quality/price ratio, we will consider implementing it.

 

 

 

 

Shareholders with large blocks of shares

Shareholder Number of shares Capital % Number of votes Voting power
Dorota Michalak-Kurzewska and Tomasz Kurzewski

through Kurzewski Investment S.á.r.l

34,420,000 40.83 57,420,000 53.51
Zygmunt Solorz-Żak

through subsidiary Karswell Ltd.

10,157,980 12.05 10,157,980 9.47
ALTUS Towarzystwo Funduszy Inwestycyjnych S.A.    5,808,359       6.89    5,808,359 5.41
MetLife Powszechne Towarzystwo Emerytalne S.A.

(formerly Amplico Powszechne Towarzystwo Emerytalne S.A.)

 

5,616,811 6.66 5,616,811 5.23
Nationale-Nederlanden Powszechne Towarzystwo Emerytalne S.A. 5,560,044 6.6 5,560,044 5.18

To the best of the our knowledge, the following shareholders held more than 5% of its shares at the end of the reporting period.

All of the Company’s series B shares were listed on the balance-sheet date.

Holders of securities with special control rights

Dorota Michalak-Kurzewska and Tomasz Kurzewski own a total of 23,000k privileged series A shares, each carrying two votes at the General Meeting.

Limitations on the exercise of voting rights and transfer of ownership to the Company’s stock

The Company’s Articles of Association do not impose any limitations on the transfer of ownership to the Company’s stock or the exercise of voting rights.

Description of the rules governing changes to the Company’s Articles of Association and the Company Deed

The Articles of Association are subject to change in accordance with the provisions of the Code of Commercial Companies.

The General Meeting, its basic rights, shareholders’ rights and their exercise

General Meetings are held in accordance with the Articles of Association, the Terms of Reference of the General Meeting of ATM Grupa S.A. and the Code of Commercial Companies. General Meetings are either annual or extraordinary. They may be held in the Company’s offices in Bielany Wrocławskie, in the village of Ślęza or in Warsaw.

Shareholders’ right to request items to be added to the agenda of the General Meeting

One or more shareholders holding not less than one-twentieth of the Company’s share capital may request that specific items be added to the General Meeting’s agenda. Requests should be submitted to the Company’s Executive Board no later than 21 days before the scheduled General Meeting date. Each request should include a rationale or a draft resolution relating to the proposed agenda item. Requests should be mailed to the Company’s registered office or e-mailed to wza@atmgrupa.pl with documents confirming the shareholder’s right to submit requests enclosed/attached. The Executive Board shall immediately, but no later than 18 days before the scheduled General Meeting date, announce changes to the agenda made at the request of shareholders. Notice of such changes will be given in a manner corresponding to the notice of the General Meeting.

Shareholders’ right to submit draft resolutions

Prior to the General Meeting, shareholders holding not less than one-twentieth of the Company’s share capital may submit draft resolutions related to items added to the agenda or items to be added to the agenda, by sending them to the Company’s registered office or e-mailing them to wza@atmgrupa.pl. The Company shall immediately publish such draft resolutions on its website (Investor Relations/Company/General Meeting).

Shareholders’ right to submit draft resolutions regarding items added to the agenda during the General Meeting

During the General Meeting each shareholder may submit draft resolutions regarding items added to the agenda. Shareholders may also propose changes and additions to draft resolutions included in the agenda until discussion on the item including the relevant draft resolution is closed. Such proposals should be submitted in writing, along with a brief rationale, to the Chair of the General Meeting separately for each draft resolution, and should include the shareholder’s full name or company name.

Proxy voting

Shareholders who are natural persons may participate in General Meetings and vote in person or by proxy.

Shareholders who are not natural persons may participate in General Meetings and vote through a person authorized to submit declarations of intent or by proxy.

Proxies must be executed in writing and enclosed to General Meeting minutes or submitted in electronic form.

If a proxy is in electronic form, shareholders must communicate this to the Company by sending an e-mail to wza@atmgrupa.pl, making their best effort to enable verification of the proxy. Information on proxies must include details of the proxy holder and shareholder (including full names, addresses, phone numbers and e-mail addresses). It must also include the scope of the proxy, i.e. the number of voting shares and the name of the Company’s General Meeting at which the votes will be cast. The consequences of an incorrect proxy and risks associated with the use of electronic communication in this respect will be borne by the shareholder.

Electronic proxies do not require a safe electronic signature verified by a qualified certificate.

In order to verify electronic proxies, the Company shall take appropriate action to identify the shareholder and proxy holder. Such verification will consist in particular in asking the shareholder or proxy holder, in an e-mail or via telephone, to confirm the proxy and its scope. Failure to answer the questions asked to verify the proxy shall be deemed as an inability to verify the proxy and shall provide the grounds for refusing the proxy holder the right to attend the General Meeting.

The right to represent a shareholder who is not a natural person should arise from the presentation, at the time of preparing the attendance list, of a copy of a relevant register (submitted in original or copy confirmed by the proxy holder or shareholder), or a series of proxies.

Proxies-granting shareholders who are not natural persons should be specified in a valid copy of the entry from a relevant register.

Members of the Company’s Executive Board and Company Employees may act as proxy holders at General Meetings

If the proxy holder appointed to represent a shareholder at the General Meeting is a member of the Company’s Executive Board, member of the Company’s Supervisory Board, liquidator, employee or member of the governing bodies or employee of ATM Grupa S.A.’s subsidiary, the proxy entitles them to represent the shareholder at one General Meeting. A proxy holder must reveal to the shareholder any circumstances indicating the existence or possible existence of conflicts of interests. Proxy holders may not transfer their authorization to other individuals.

Participation in General Meetings via electronic means

The Company does not offer its shareholders the facility to participate in General Meetings by electronic means.

Speaking at General Meetings via electronic means

The company does not offer its shareholders the facility to speak at General Meetings by electronic means.

Voting by mail or electronic means

The company does not offer its shareholders the facility to vote by mail or electronic means.

Record Date

The General Meeting may only be attended by persons who are the Company’s shareholders 16 days prior to the date of the General Meeting (Record Date).

Notice of the right to attend the General Meeting

The General Meeting may only be attended by persons who are shareholders as of the Record Date.

Persons who have voting rights from registered shares or temporary certificates as well as lien holders and users with voting rights are entitled to attend the General Meeting if they appear on register as at the Record Date.

At the request of holders of dematerialized registered shares, submitted not earlier than after the notice of the General Meeting and not later than the first weekday after the Record Date, the securities account operator shall issue a registered certificate of eligibility to attend the General Meeting.

To be eligible to attend the General Meeting one has to meet the following requirements:

  1. be a Company shareholder as at the Record Date, and
  2. submit a request – not earlier than upon notice of the General Meeting and not later than the first weekday after the Record Date – to their securities account operator to be issued a registered certificate of eligibility to attend the General Meeting.

 

A list of shareholders entitled to attend each General Meeting shall be available for inspection in the Company’s offices in Bielany Wrocławskie (55-040 Kobierzyce), ul. Dwa Światy 1, from 9 a.m. to 5 p.m. three weekdays before the General Meeting.

Each shareholder may request to be e-mailed, free of charge, a list of shareholders entitled to attend the General Meeting, to the email address he/she provides.

Persons entitled to attend the General Meeting are requested to register and collect their voting cards outside the meeting room 30 minutes before the meeting.

Access to documents

As per Article 4023 § 1 of the Code of Commercial Companies, the documents that are to be submitted to the General Meeting along with draft resolutions will be posted on the Company’s website, www.atmgrupa.pl, from the date of notice of the General Meeting.

The Executive Board’s or the Supervisory Board’s notes regarding items added to the agenda or items to be added to the agenda prior to the General Meeting will be available on the Company’s website immediately after being drafted.

Information on General Meetings is available on www.atmgrupa.pl in the Investor Relations/Company/General Meeting section.

 

Composition and principles of the Company’s executive and supervisory bodies and their committees

  1. The Executive Board

 

The Company’s Executive Board consists of one to five members, including the President of the Executive Board. Members of the Executive Board may serve as Vice-Presidents of the Executive Board. The President of the Executive Board is elected, appointed and dismissed by the General Meeting. Other Executive Board members are appointed and dismissed by the Supervisory Board at the request of the President of the Executive Board. The Executive Board’s term of office is four years. On the date of this statement, ATM Grupa S.A.’s Executive Board consisted of:

  • Andrzej Muszyński, President of the Executive Board
  • Maciej Grzywaczewski, Vice-President of the Executive Board
  • Grażyna Gołębiowska, Executive Board Member
  • Paweł Tobiasz, Executive Board Member
  • Przemysław Kmiotek, Executive Board Member

 

The remit and principles of the Executive Board of ATM GRUPA S.A are set forth in the following documents:

  • Articles of Association of ATM GRUPA S.A. (available on the Company’s website)
  • Executive Board’s Terms of Reference (available on the Company’s website)
  • Code of Commercial Companies

 

The Executive Board runs the Company’s day-to-day business and represents the Company in dealings with third parties. As at December 31, 2014, the following persons were authorized to represent the Company: two members of the Executive Board acting jointly, or a member of the Executive Board acting jointly with Authorized Signatory (Prokurent).

The Company’s Executive Board managed all affairs related to the Company’s activities, which are not reserved to the remit of the General Meeting or the Supervisory Board through General Meeting resolutions, the Articles of Association or relevant legislation. In particular the Executive Board has no power to authorize the issue or buyback of Company shares.

When taking decisions on the Company’s matters, Executive Board members acted within the limits of reasonable business risk, having taken account of all available information, analyses and opinions, which according to the Executive Board should be taken into account considering the interests of the Company. When determining the Company’s interests, Executive Board members took into consideration the long-term interests of the Company’s shareholders, employees and collaborators as well as those of the Company’s strategic partners and other collaborators, including creditors.

The Executive Board advised the Supervisory Board of all significant circumstances that could affect the Company’s assets position and help the Supervisory Board assess the Company’s activities.

  1. The Supervisory Board

 

The Supervisory Board consists of five members appointed and dismissed by the General Meeting. The members of the Supervisory Board are appointed for five years. The Chair of the Supervisory Board is chosen by the General Meeting from among the members of the Supervisory Board. On the day of this report, the Supervisory Board of ATM Grupa S.A. consisted of:

  • Tomasz Kurzewski, Chairman of the Supervisory Board
  • Marcin Michalak, Chairman of the Supervisory Board
  • Barbara Pietkiewicz, Supervisory Board Member
  • Artur Hoffman, Supervisory Board Member
  • Piotr Stępniak, Supervisory Board Member

 

The remit and principles of ATM Grupa S.A.’s Supervisory Board are set forth in the following documents:

  • Articles of Association of ATM GRUPA S.A. (available on the Company’s website)
  • Supervisory Board’s Terms of Reference (available on the Company’s website)
  • Code of Commercial Companies

 

As per § 13 of the Articles of Association, the core remit of the Supervisory Board is to:

 

  • audit the Company’s financial statements, the Executive Board’s report and its conclusions concerning income distribution and loss coverage as well as submitting annual reports on audit findings to the General Meeting
  • choose a certified accountant to audit the Company’s financial statements
  • appoint and dismiss other members of the Executive Board at the request of the President of the Executive Board
  • enter into agreements with the President of the Executive Board and other members of the Executive Board
  • set a compensation policy for Executive Board members
  • approve the terms of reference of the Executive Board
  • give consent to the execution of contracts between the Company and its associate companies
  • dismiss the President of the Executive Board

 

There are no committees within the Supervisory Board. The tasks of audit and compensation committees are performed by all members of the Supervisory Board.

 

An internal control and risk management system pertaining to the process of preparing financial statements

The responsibility for the operation and efficiency of an internal control system with respect to the preparation of financial statements lies with the Company’s Executive Board.

A review of financial statements by an independent company authorized to audit financial statements is one of the key elements of the process of control of the preparation and accuracy of financial statements. The Company’s Supervisory Board chooses the auditor by resolution.

The external auditor is mainly responsible for reviewing the Company’s and the Group’s separate and consolidated interim financial statements and for auditing the Company’s and the Group’s annual separate and consolidated financial statements.

The auditor prepares a report and opinion on its reviews and audits. The documentation is submitted to the Supervisory Board, which assesses the Company’s and the Group’s financial statements. The Supervisory Board then prepares a report on the assessment and publishes it prior to the annual General Meeting.

Another important element of internal control and risk management is an internal control system that includes a set of procedures. The aim of these procedures, among other things, is to verify whether the cost of productions and other projects in the accounting system are in line with cost estimates and actual costs. These procedures are periodically reviewed and assessed for effectiveness and, if required, modified based on these reviews, assessments and findings/conclusions from the collaboration with the auditor.

Based on the documents submitted by the external auditor and the Executive Board’s assessment, the Executive Board concludes that there were no factors that might have significantly affected the truth and fairness of the financial statements.

Bielany Wrocławskie, March 21, 2016