In accordance with the Warsaw Stock Exchange (“WSE”) Rules, companies listed on the primary market of the WSE should observe the principles of corporate governance set out in the “WSE Best Practices”. The „WSE Best Practices” is a set of recommendations and rules of procedure for governing bodies of publicly listed companies and their shareholders. The WSE Rules and resolutions of the WSE’s management board and its council set forth the manner in which publicly listed companies disclose information on their compliance with corporate governance rules and the scope of information to be provided. If a publicly listed company does not comply with any specific rule on a permanent basis or has breached it incidentally, such publicly listed company is required to disclose this fact in the form of a current report. Furthermore, a publicly listed company is required to attach to its annual report information on the scope in which it complied with the „WSE Best Practices” in a given financial year.
Wirtualna Polska Holding S.A. (the “Company”) strives to ensure the maximum transparency of its operations, the best quality of communication with its investors and the protection of its shareholders’ rights, also in areas not governed by law. Accordingly, the Company has taken or will take the necessary actions to observe all the rules comprising the „WSE Best Practices” to the fullest extent possible.
Currently, the Company, as a company listed on the WSE, does observe the corporate governance rules applicable to public companies listed on the WSE. From the moment the Shares to be Admitted to Trading and the Rights to Shares are admitted to trading on the primary market of the WSE, the Management Board comply with all the corporate governance rules in accordance with the WSE Best Practices, subject to the following:
Best Practice I.Z.1.20 –to the extent that it applies to the obligation for the Company to present on its website the recordings of the General Meetings of the Company either in audio or video. The General Meetings of the Company are organized in a transparent and efficient way allowing shareholders to exercise all the rights attached to the shares on the basis of the comprehensive documentation of resolutions and motions of the General Meetings. The Company publishes all documents related to the General Meetings on its website including the announcement of the convening of such meetings, dates and terms of its course and resolutions adopted by each General Meeting. Thus the Company does not provide a direct broadcast of the General Meetings and does not publish the recordings of the meetings, also given certain legal problems arising thereout.
Best Practice II.Z.2. – to the extent where company’s management board members may sit on the management board or supervisory board of companies other than members of its group subject to the approval of the supervisory board. The Company’s Management Board Members are not required to obtain an approval from the Supervisory Board to sit on the management board or supervisory board of companies other than members of its group. Those persons have concluded agreements with the Company with non-compete clauses requiring them to spend sufficient amount of time to pursue their duties.
Recommendation IV.R.2 – to the extent of the obligation to ensure participation in a General Meeting by using means of electronic communication. In accordance with the Articles of Association, the Company will ensure participation in the General Meeting using the means of electronic communication if the announcement of the convocation of the General Meeting contains information about the shareholders having the option to participate in the General Meeting by using the means of electronic communication. Besides the abovementioned circumstances the Company sees no justification for introducing such measures and such a demand has never been expressed by the shareholders of the Company.
Best Practice IV.Z.2. –to the extent that it applies to the obligation of the Company to enable a live broadcast of the general meeting The Company is confident that the form of General Meetings of the Company appropriately secures the interests of all shareholders by ensuring them the possibility of exercising all the rights attached to the shares. The announcement of the General Meeting always contains information about the drafts of the resolutions and all necessary documentation while the adopted resolutions are published on the Company’s website.
Recommendation VI.R.1– to the extent that it applies to the Company’s remuneration policy and the rules of the establishment thereof. The Company does not have a remuneration policy or terms for the establishment thereof with respect to the members of the Supervisory or the Management Board. The Company is considering the possibility of creating such a policy and rules in the future. Remuneration of the Members of the Management Board is related to the scope of duties and responsibilities they are entrusted and the financial standing of the Company. The remuneration of the Members of the Management Board is set out by the Supervisory Board. Remuneration of the members of the Supervisory Board is set out by the General Meeting of the Company. All remunerations of the members of Management and Supervisory Board are disclosed in the yearly financial statement of the Company.
Best Practice VI.Z.2. – to the extent where, to tie the remuneration of members of the management board and key managers to the company’s long-term business and financial goals, the period between the allocation of options or other instruments linked to the company’s shares under the incentive scheme and their exercisability should be no less than two years. The Company has introduce a management motivational scheme and according to its rules and concluded share option agreements the period between the allocation of options and their exercisability is less than two years. However the scheme and the agreements stipulate that allocation of options occurs in certain periods of time (vesting) quarterly during 5-6 years provided that the entitled person continues working for the Company and thus the remuneration of members of the management board and key managers is tied to the company’s long-term business and financial goals.
Best Practice VI.Z.3. – to the extent where the remuneration of members of the supervisory board should not be linked to options or other derivatives or any other variable components, and neither should it be linked to the company’s results. The remuneration of the Chairman of the Supervisory Board is partially dependent on the company’s financial results. This was introduced due to the exceptional engagement of the Chairman in the supervisory actions provided for the Company. Moreover the Chairman has also received financial instruments in the management motivational scheme because of his duties regarding the integration of the Company’s group.
The Rules of the Stock Exchange and the resolutions of the management board and the council of the WSE determine the manner of stock exchange companies’ disclosure of information concerning corporate governance as well as the scope of such information. If any specific practice is not complied with by a stock exchange company on a permanent basis or it has been incidentally breached, the stock exchange company is required to disclose such fact in the form of a current report. Additionally, a stock exchange company is required to attach to its annual report a statement with information about the scope of application of the „WSE Best Practices” thereby in a given financial year.
If the implementation of the corporate governance rules requires any amendments to the Company’s corporate documents (including the By-Laws of the Management Board and the By-Laws of the Supervisory Board) or the adoption of additional corporate documents, the Management Board will initiate the necessary actions. However, it should be emphasised that the decision regarding the observance of some rules set out in the „WSE Best Practices” will be at the discretion of the Company’s shareholders and the Supervisory Board.