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Representation on observing the principles of corporate governance
Current report no. 5/2008
(Issuer: PAP; Friday, 25 January 20:16 p.m.)
Legal basis: Other regulations
The Management Board of Polskie Przedsiębiorstwa Wydawnictw Kartograficznych im. Eugeniusza Romera Spółka Akcyjna represents that it applies the majority of the principles of corporate governance specified in the document entitled “Good Practice of Companies Quoted at the Warsaw Stock Exchange”, with the exception of the following:
Part I – Recommendations on good practice of stock exchange companies
1. The Company shall conduct transparent and effective information policy, both with the use of traditional methods and modern technologies ensuring speed, security and wide access to information. Upon suing these methods of communication to the widest extent possible, the Company shall ensure due communication with investors and analysts, enable broadcasting the sessions of the general stockholders meeting with the use of the internet, register the course of sessions and publish it on its website.
Justification
The Company policy is to protect the rights of all stockholders and their equal access to information relating to the Company; due to the above, granting detailed information to stockholders directly or through press or other media takes place in conformity with the provisions of the Code of Commercial Companies and Partnerships as well as the provisions relating to the obligation to prepare current and periodic reports. For these purposes it is possible that stockholders demanding explanations which may collide with the abovementioned provisions will not receive them in the form and scope expected. Transmissions of the sessions of the General Stockholders Meeting with the use of the internet as well as the registration of the course of sessions and their publication will be carried out depending on the technical potential at the location where the General Stockholders Meetings are held and subject to the provisions of the Act on personal data protection and the regulations aimed at protecting personal rights and image. In view of the above, the publication of the course of discussions shall depend on the amendment of the Regulations of the General Stockholders Meeting and no objections voiced by any interested parties.
5. The remunerations of the members of company bodies ought to be related to the scope of duties and responsibilities ensuing from the function held, they ought to reflect the size of the company and remain in reasonable proportion to its economic results.
Justification
The Management Board of the Company is of the opinion that due to the lack of precision characterising the phrase “size of the company” and “remain in reasonable proportion to its economic result” it is possible that the remuneration received by the Company bodies may be assessed differently by the company stockholders. Furthermore, the amount of the remuneration is related not only to the results achieved by the Company as such but by its whole capital group and the increase in its value assessed on the basis of the stock price. The policy of supervising subsidiary entities may also take into consideration receiving benefits from subsidiary entities by the members of the company bodies, which is in conformity with the provisions of the Code of Commercial Companies and Partnerships, e.g. for the participation in supervising bodies or participation in the development strategy of a given subsidiary.
Part II – Good practice applied by the management boards of stock exchange companies
2. A company shall ensure the functioning of its website in the English language, at least in the scope indicated in Part II pt. 1. This principle shall be applied at the latest from 1 January 2009.
Justification
The company is conducting works on implementing the abovementioned principle; however, it is not possible for the Company to indicate a definite date of ensuring the current nature of the information in English published on its website. At the same time the Company would like to represent that it shall undertake all efforts in order to ensure that current and periodic reports as well as basic documents and information are posted on the websites in English without undue delay.
Part III. Good practice applied by the members of supervisory boards
2. A member of the supervisory board shall relay to the company management board the information on his/her relations with the stockholder having at their disposal stock representing no less than 5% of the total number of votes at the general stockholders meeting. The aforementioned obligation refers to relations of economic, family or other nature which might influence the standpoint of the member of the supervisory board in any issue reviewed by the supervisory board.
Justification
Due to the fact that the term „relations of family or other nature which might influence the standpoint of the member of the supervisory board in any issue reviewed by the supervisory board” is not unambiguous in the opinion of the Company, the said principle cannot be carried out even under the application of due diligence on the part of the Company.
6. At least two members of the supervisory board shall meet the criteria of independence from the company and entities remaining in a significant relation with the company. With regard to the independence criteria relating to the members of the supervisory board, the principle to be applied shall be Appendix II to the European 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. Irrespective of the provisions of point b) of the abovementioned Appendix, a person who is an employee of the company, a subsidiary entity or an associated entity of the company may not be deemed to meet the criteria of independence stipulated in the abovementioned Appendix. Furthermore, a relation with the stockholder which excludes the feature of independence of a member of the supervisory board in the meaning of the present principle is understood as real and significant relation with the stockholder with the right to exercise 5% or more of the total number of votes at the general stockholder meeting.
Justification
The opinion of the Company is that it is necessary to ensure the participation of independent members in the Supervisory Board (relevant provisions relating hereto are contained in the Company’s Statutes). The Code of Commercial Companies and Partnerships stipulates the principles for appointing the members of the corporate supervisory body, indicating the special authorizations of stockholders in that respect. Furthermore, members of the supervisory body are limited by other absolutely binding provisions of law. Therefore, the Act indicates what rights of stockholders enable the execution of supervisory tasks, hence additional requirements may limit the basic ownership rights which are correlated with the capital shares of respective stockholders in the Company.
7. The frames of the supervisory board should include at least the audit committee. The composition of the said committee ought to be include at least one member independent from the company and entities remaining in a significant relation with the company, competent in the field of accounting and finance. In the companies where the supervisory board is composed of the minimum number of members permitted by law, the tasks of the committee may be carried out by the supervisory board.
Justification
Pursuant to the absolutely binding provisions of law, the Supervisory Board ought to conduct permanent supervision of the company activity in all its respects. The division of tasks suggested by the commented principle might in the opinion of the Company result in the limitation of the scope of supervision in relation to respective Supervisory Board members who do not become members of one of the suggested committees. Therefore, the Company is not planning to organise the works of the Supervisory Board in the form of separate committees.
9. A conclusion of an agreement/ transaction by the company with an associated entity which meets the terms stipulated under Part II pt. 3 shall require the approval of the supervisory board.
Justification
The Company is of the opinion that the provisions of the Statutes as well as the Code of Commercial Companies and Partnerships takes priority over the provisions of the said regulation. Therefore, it is possible that a conclusion of agreements with an associated entity, despite notifying the Supervisory Board thereof, shall not be connected with obtaining a separate permit of the Supervisory Board expressed in the form of a resolution.
Part IV – Good practice applied by stockholders
2. The regulations of the general stockholders meeting may not make it harder for stockholders to participate in the general stockholders meeting or to exercise their rights. Any amendments in the regulations shall be binding solely as of the following general stockholders meeting.
Justification
The Company is of the opinion that exercising the rights by stockholders at the General Stockholders Meeting may not lead to paralysing or hampering the course of the session by Stockholders. Therefore, it is possible that the principles introduced to the Regulations of the General Stockholders Meeting and relating to the form of exercising rights by stockholders at the General Stockholder Meeting, limiting the time assigned for discussion and speeches may be deemed by some of stockholders as a violation of the abovementioned provision.
Legal basis: § 29 sec. 3 of the Warsaw Stock Exchange Regulations
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