Application of Good Practices of Companies Listed on WSE

The Best Practices of WSE Listed Companies have been in force since 1 January 2013 as accepted by a WSE Supervisory Board resolution regarding amendments thereto of 21 November 2012.

In 2013, PZU complied with the principles included in Best Practices of WSE Listed Companies except from the one referred to in Section IV.10, regarding enabling shareholder participation in shareholder meetings using IT tools to allow reciprocal real-time communication and participation in discussions during the meeting by shareholders who are physically absent. Further, PZU does not comply with the recommendations of Section I.5, I.9 and I.12.

With regard to the principle referred to in Section IV.10, regarding enabling shareholder participation in shareholder meetings using IT tools to allow reciprocal real-time communication and participating in discussions during the meeting for shareholders who are physically absent, please note that in our opinion, there are a number of technical and legal factors that may affect the course of a general meeting, and therefore the appropriate application of the above rule. Moreover, in our view, principles concerning participation in shareholder meetings applicable in PZU allow for exercising rights from shares and protect all shareholders’ interests. The communication regarding non-compliance with the principle included in Section VI.10 was submitted by the Company on 29 January 2013.

The following issues mentioned in section I of Best Practices of WSE Listed Companies defining Recommendations concerning good practices of companies listed on WSE should be emphasized:

  • as for the recommendation included in Section 1.5 concerning the policy of remunerating members of management and supervisory bodies, remunerations of members of the Supervisory Board are determined by the General Shareholder Meeting and those of the Management Board are set based on a resolution of the Supervisory Board;
  • the policy of remunerating members of the management and supervisory bodies of PZU does not include all elements indicated in the recommendation of the European Commission of 14 December 2004 fostering an appropriate regime for the remuneration of directors of listed companies (2004/913/EC), supplemented by recommendation of EC of 30 April 2009 (2009/385/EC). Moreover, PZU did not present a declaration presenting remuneration policy on its corporate website. The decision concerning future compliance with the said rule will be taken by the Supervisory Board and the General Shareholder Meeting;
  • at the same time, please note that implementing the Ordinance on current and periodic[1] information, the Company discloses information regarding remuneration, awards or bonuses for each member of the managing and supervisory bodies in PZU on the annual basis;
  • as for the recommendation specified in Section I.9 concerning gender parity principle to be followed in the Company's management and supervisory bodies, PZU has always pursued the policy of appointing competent, creative, experienced and educated people to the Company's bodies. The composition of the Management and Supervisory Board is determined based on a decision of the Supervisory Board or a General Shareholder Meeting, respectively and other factors, such as sex, are not taken into account;
  • with regard to the recommendation referred to in Section IV.12, regarding enabling shareholders’ participation in general meetings using IT tools to allow mutual real-time communication and participating in discussions during the meeting for shareholders who are physically absent at the meeting venue, please note that in our opinion, there are a number of technical and legal factors that may affect the course of a general meeting, and therefore the appropriate application of the above rule. Moreover, in our view, principles concerning participation in shareholders’ meetings applicable in PZU allow for exercising rights from shares and protect interests of all shareholders.

The announcement on non-compliance with these recommendations was not issued in line with the waiver of the obligation to publish issuers’ reports referred to in Article 29.3 of the Regulations of WSE with respect to corporate governance principles set forth in Section I of Best practices of WSE Listed Companies, in accordance with resolution 1014/2007 adopted by the Management Board of WSE on 11 December 2007 regarding partial waiver of the obligation to publish reports on corporate governance adopted on the WSE Main Market.

[1] Ordinance of the Minister of Finance of 19 February 2009 on current and periodic information submitted by issuers of securities and conditions for recognizing as equivalent information required by the laws of a non-member state.