Non-compliance with some of the Best Practices for WSE-Listed Companies

Best Practice - Disclosure Policy, Investor Communications - rule no. I.Z.1.15

Full text of Code of Best Practice:

A company should operate a corporate website and publish on it, in a legible form and in a separate section, in addition to information required under the legislation, information about the company’s diversity policy applicable to the company’s governing bodies and key managers; the description should cover the following elements of the diversity policy: gender, education, age, professional experience, and specify the goals of the diversity policy and its implementation in the reporting period; where the company has not drafted and implemented a diversity policy, it should publish the explanation of its decision on its website.

Grounds:

Decisions to select members of the Company’s governing bodies are made by the owner, taking into consideration the Ministry of Energy’s ‘Standards of the owner’s supervision at state-owned companies in which rights attached to shares are exercised by the Minister of Energy’ and ‘Rules and procedure for selecting candidates for members of the supervisory bodies of state-owned companies in which rights attached to the State Treasury’s shares are exercised by the Minister of the Energy’ - Regulation of the Minister of Energy of August 4th 2016.

The Company believes there is no need to define a diversity policy for its key managers. Even though no such policy has been implemented at PGNiG, all the managers that currently hold the positions of directors or deputy directors at the Company have university degree. Women represent 26% of the managers and the shares of individual age groups are as follows:
 − up to 30 years old − 4%,
 − 31−40 years old − 35%,
 − 41−50 years old − 31%,
 − 51−60 years old − 24%,
 − 61+ years old − 7%.

Best Practice - Management Board and Supervisory Board - rule no. II.Z.3

Full text of Code of Best Practice:

At least two members of the supervisory board should meet the criteria of being independent referred to in principle II.Z.4.

Ground:

In the reporting period, there was only one independent member on the Issuer’s Supervisory Board – Mr Mateusz Boznański, appointed on December 29th 2015. Pursuant to Art. 36.1 of the Issuer’s Articles of Association, one of the members of the Supervisory Board appointed by the General Meeting should meet all of the following requirements:

1. He or she must be appointed in accordance with the special procedure set forth in the Articles of Association;
2. He or she may not be a related party or a subsidiary of the Issuer;
3. He or she may not be a related party of the Issuer’s parent or of another subsidiary of such parent; and
4. He or she may not have any connections with the Issuer or with any of the entities referred to in items 2 and 3 which could
materially affect his or her ability to make impartial decisions as a member of the Supervisory Board.

Given the fact that, in accordance with Art. 12 of the Act on Commercialisation and Privatisation of August 30th 1996 (consolidated text in Dz.U. of 2002, No. 171, item 1397, as amended), some of the Company’s Supervisory Board members are elected by employees, the Issuer cannot ensure that there are more independent members on its Supervisory Board. Increasing the number of independent members on the Company’s Supervisory Board relative to the number currently set out in the Company’s Articles of Association would lead to a situation where the State Treasury (the Issuer’s majority shareholder) would be unable to appoint the majority of the Supervisory Board members. This in turn would violate the rule stipulating that a shareholder’s influence on a company’s business should be proportionate to the share capital held by such shareholder.

Best Practice - Management Board and Supervisory Board - rule no. II.Z.7

Full text of Code of Best Practice :

Annex I to the Commission Recommendation referred to in principle II.Z.4 applies to the tasks and the operation of the committees of the Supervisory Board. Where the functions of the audit committee are performed by the supervisory board, the foregoing should apply accordingly.

Grounds:  

An Audit Committee operates within the Issuer’s Supervisory Board as a standing committee, advising the Supervisory Board on matters within the Committee’s remit.

Pursuant to the Best Practice for WSE Listed Companies, with respect to the tasks and the operation of its Supervisory Board committees, the Issuer should apply the rules laid down in Annex I to Commission Recommendation of February 15th 2005 on the role of non-executive or supervisory directors of listed companies and on the committees of the (supervisory) board. In the case of the Audit Committee, the primary purpose of the rules is to ensure that the Audit Committee performs its role correctly.

The Issuer has complied with all the requirements which guarantee the Audit Committee’s involvement in the supervision of the Issuer’s business. However, the Issuer did not comply with all the detailed requirements for the operation of the Committee. The requirements which the Issuer did not comply with include:
1. the rule laid down in Section 4.3.2 of Annex I, pursuant to which the management should inform the audit committee of the
methods used to account for significant and unusual transactions where the accounting treatment may be open to different
approaches;
2. the rule laid down in Section 4.3.8 of Annex I, pursuant to which the audit committee should review the process whereby
the company complies with the existing regulations regarding the possibility for employees to report alleged significant
irregularities in the company, by way of complaints or through anonymous submissions, normally to an independent
director, and should ensure that arrangements are in place for the proportionate and independent investigation of such
matters and for appropriate follow-up action.

Given the way the Audit Committee currently operates, the Issuer does not consider it necessary to introduce very detailed rules to regulate its operation. The Issuer will take appropriate steps in the future, if justified by the actual manner of operation of the Audit Committee

Best Practice - Management Board and Supervisory Board - rule no. II.Z.8

Full text of Code of Best Practice :

The chair of the audit committee should meet the independence criteria referred to in principle II.Z.4.

Grounds:  

In accordance with the Rules of Procedure for the Audit Committee of the PGNiG Supervisory Board, the Audit Committee is composed of at least three Supervisory Board members, of whom at least one is independent from the Company and entities materially related to the Company. The independent member is appointed by the General Meeting under Art. 36.1 of the Articles of Association and is qualified in accounting and finance. Pursuant to Section 3.2 of the Rules of Procedure for the Audit Committee, the Audit Committee elects the Chairperson and Deputy Chairperson from mong all of its members. Election of the Chairperson is a discretionary decision of the Audit Committee. The Chairperson may, but does not have to, be a person meeting the independence criteria referred to in principle II.Z.4. Furthermore, the Rules of Procedure do not give the Chairperson of the Audit Committee any additional rights, other than the right to manage the work of the Committee and convene its meetings. In the absence of the Chairperson, these functions are performed by the Deputy.

Currently, no amendments in this respect are planned to be made to the Rules of Procedure for the Audit Committee. In the Company’s opinion, the regulations currently in force are sufficient to ensure proper operation of that Committee.

 

A statement on the PGNiG SA's compliance with the corporate governance recommendations and principles contained in Best Practice for GPW Listed Companies 2016

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  • A statement on the PGNiG SA's compliance with the corporate governance recommendations and principles contained in Best Practice for GPW Listed Companies 2016 pdf 100.08 kB