Source: http://raportzintegrowany2017.pkpcargo.com/en/our-corporate-governance/corporate-governance-pkp-cargo-group
Timestamp: 2019-04-20 02:57:59
Document Index: 11825970

Matched Legal Cases: ['§ 14', '§ 19', '§ 19', '§ 3', '§ 19', '§ 19', '§ 3', '§ 19', '§ 27', '§ 11', '§ 13', '§ 13', '§ 13']

Corporate Governance in the PKP CARGO Group | PKPCargo
GRI G4-7
PKP CARGO S.A. as a public company wants to build permanent and trust-based relations with the Company’s stakeholders, including investors and financing institutions. Accordingly, the Company has committed to apply transparent corporate governance principles supporting efficient management, professional oversight, respect for shareholder rights and transparent communication with the market. The Company cares for accurate communication with the market in order to guarantee equal access to information that drives its value. PKP CARGO S.A. appreciates the importance of corporate governance principles for building the image of PKP CARGO S.A. as a reliable company that operates effectively and transparently. PKP CARGO S.A. is also aware of the fact that an appropriate design of the system of corporate governance improves the Company’s effectiveness in achieving its strategic objectives and reducing the risk of its operations and increases its market valuation.
The main governing bodies of PKP CARGO S.A. are the Shareholder Meeting, the Supervisory Board and the Management Board. The detailed rules governing the operation of these bodies are included in the Company’s internal documents, such as:
PKP CARGO S.A. Shareholder Meeting Bylaws
PKP CARGO S.A. Supervisory Board Bylaws
PKP CARGO S.A. Management Board Bylaws
Bylaws of appointing members of the PKP CARGO S.A. Management Board
Since PKP CARGO S.A. is listed on a stock exchange, its corporate governance system is significantly influenced by the corporate governance principles developed by the Warsaw Stock Exchange in the document entitled “Best Practice of GPW Listed Companies 2016” which is applied by a large number of companies listed on the Warsaw Stock Exchange. PKP CARGO S.A. has implemented most of the principles set forth in the “Best Practice of GPW Listed Companies 2016”, which is shown among others in appropriate provisions of the Articles of Association and bylaws of the Company’s governing bodies.
The PKP CARGO S.A. Shareholder Meeting is the Company’s top corporate body used to exercise shareholder rights to decide on the key aspects of PKP CARGO S.A.’s activity. The overriding role of the Shareholder Meeting is achieved among others by the exclusive right of the shareholder meeting to decide about the wording of the Company’s Articles of Association. To the extent permitted by the generally applicable law, the Company’s Articles of Association set out the detailed corporate governance framework, among others defining the powers of the Company’s corporate bodies and their mutual relations.
The main powers of the PKP CARGO S.A. Shareholder Meeting include, in addition to the matters specified in the Commercial Company Code or other legal acts, among others: appointing and dismissing Supervisory Board members subject to the personal rights of PKP S.A., adopting the Shareholder Meeting Bylaws and giving consent for the Company to dispose of non-current assets or purchase/sell/subscribe to shares of other companies in amounts exceeding the threshold amount or percentage specified in the Company’s Articles of Association.
Pursuant to the Company’s Articles of Association, voting rights of the shareholders holding more than 10% of all the votes in the Company are restricted in such a manner that no such shareholder may exercise more than 10% of all the votes in the Company existing on the date of the Shareholder Meeting. The limitation of voting rights of shareholders representing more than 10% of the total number of votes in the Company will not cease after a sale of all shares held by PKP S.A. to which the said limitation does not apply. As a consequence, the limitation of voting rights makes it potentially difficult for a single investor to gain control of the Company even if the stake held by PKP S.A. in the Company’s share capital drops to zero.
The Supervisory Board is another important corporate body of PKP CARGO S.A., which exercises permanent supervision over the Company’s operations in all areas of its activity. In order to perform their duties, the Supervisory Board may inspect all documents of the Company, request reports and explanations from the Management Board and employees, and review the assets and liabilities of the Company. If specialist knowledge or certifications are required, the Supervisory Board may obligate the Management Board to employ experts to develop an expertise or an opinion to be used by the Supervisory Board. Important powers of the PKP CARGO S.A. Supervisory Board include the appointment of the President and members of the PKP CARGO S.A. Management Board, subject to the personal rights of PKP S.A.
The Company’s Articles of Association give PKP S.A. personal rights to appoint and dismiss Supervisory Board Members in a number equal to half the composition of the Supervisory Board plus one. Under the Articles of Association, PKP CARGO S.A. employees also have the right to be represented in the Supervisory Board by 3 members. Since according to the Company’s Articles of Association, the PKP CARGO S.A. Supervisory Board is comprised of 11 to 13 members, the remaining 2 to 3 Supervisory Board members, including two independent members, are elected by the Shareholder Meeting. According to the Company’s Articles of Association, the number of Supervisory Board members is set by PKP S.A. The term of office of the PKP CARGO S.A. Supervisory Board members is joint and lasts 3 years.
According to the recommendations included in the “Best Practice of GPW Listed Companies 2016”, two members of the PKP CARGO S.A. Supervisory Board Members satisfy the independence criteria as defined by the European Commission in Annex II to the 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 (EU OJ 05.52.51) and additional requirements specified in the “Best Practice for GPW Listed Companies 2016” constituting an attachment to Resolution No. 26/1413/2015 of the WSE Supervisory Board of 13 October 2015.
Independent Supervisory Board members play an important role in the work of Supervisory Board committees, i.e. Audit Committee, Nomination Committee and Strategic Committee, that the Company’s Supervisory Board appoints as advisory bodies to conduct the work that requires in-depth analysis as part of the individual areas of its activity.
The Company’s Management Board is an executive body, which manages the Company’s day-to-day business, manages its assets and represents the Company in relations with third parties. The responsibilities of the Management Board include any activities that are not reserved for the Shareholder Meeting or the Supervisory Board. The key tasks of the Company’s Management Board include setting the Company’s strategy and implementing it after it is accepted by the Supervisory Board and ensuring efficient mechanisms to mitigate the risk of the Company’s operations, including organization of effective internal control, risk management and internal audit systems.
The Company’s Management Board is appointed by the Supervisory Board after a recruitment procedure is conducted with the participation of an external personnel consulting company. According to the Articles of Association of PKP CARGO S.A., PKP S.A. has the exclusive right to nominate candidates for the position of the President of the Management Board. The Supervisory Board sets the number of Management Board members. The term of office of the PKP CARGO S.A. Management Board members is joint and lasts 3 years.
The Key Management Personnel Compensation Policy is an important element of PKP CARGO S.A.’s corporate governance regime. It contains the summary of general rules for compensating the key management personnel, including members of the Supervisory Board and Management Board, and it constitutes an important factor contributing to the development and safety of PKP CARGO S.A.; its main goal is to support the strategies aimed at accomplishing the Company’s business objective.
For the Management Board and Supervisory Board members, the Company has developed and implemented guidelines on how to proceed in the cases of conflict between the Company’s interests and the personal interests of a Management Board or Supervisory Board member and has defined the methods of preventing the occurrence of such conflicts.
The Key Management Personnel Compensation Policy and the rules for preventing and resolving conflicts of interest have been developed based on the guidelines included in the “Best Practice of GPW Listed Companies 2016”.
Corporate Governance in the PKP CARGO Group S.A.
PKP CARGO S.A. shareholders
On the basis of notifications on disclosure or change of interest in the total number of votes at the PKP CARGO S.A. Shareholder Meeting sent to the Company by its shareholders pursuant to Article 69 of the Act of 29 July 2005 on Public Offering and the Terms and Conditions for Introducing Financial Instruments to an Organized Trading System and on Public Companies (Journal of Laws 2013 Item 1382), as at 31 December 2017 the Company identified five significant shareholders holding more than 5% of the total number of votes at the Company’s Shareholder Meeting, i.e. Polskie Koleje Państwowe S.A. and the following financial investors: Nationale-Nederlanden OFE, MetLife OFE, Aviva OFE and Aegon OFE.
As at 31 December 2017, the total number of the Company’s shares was 44,786,917.
PKP S.A. 14,784,194 33.01% 14,784,194 33.01%
Nationale-Nederlanden OFE 6,854,195 15.30% 6,854,195 15.30%
Aviva OFE 2,338,371 5.22% 2,338,371 5.22%
MetLife OFE 2,494,938 5.57% 2,494,938 5.57%
AEGON PTE (AEGON OFE. NORDEA OFE) 2,499,979 5.58% 2,499,979 5.58%
Other shareholders 15,815,240 35.31% 15,815,240 35.31%
Total 44,786,917 100% 44,786,917 100%
(1) According to a notice sent by the shareholder on 24 June 2014.
(2) According to a notice sent by the shareholder on 18 October 2016.
(3) According to a notice sent by the shareholder on 23 November 2017.
(4) According to a notice sent by the shareholder on 18 August 2016.
(5) According to a notice sent by the shareholder on 13 August 2014.
Detailed information on changes in the PKP CARGO S.A. shareholder structure in 2017 is provided in Chapter 9.4 of the Consolidated Management Board Report on the Activity of the PKP CARGO Group in the financial year 2017.
PKP S.A. – personal rights
In accordance with the provisions of the PKP CARGO S.A. Articles of Association, the company Polskie Koleje Państwowe S.A. and if it is liquidated, the State Treasury, provided that these entities hold shares representing at least 25% of the Company’s share capital, are vested with the following personal rights to appoint and dismiss members of the PKP CARGO S.A. Management Board and Supervisory Board:
In the event that PKP S.A.’s share in the Company’s share capital is 50% or less, PKP S.A. will have the personal power to select candidates for the President of the Management Board on its own. The personal rights referred to in the preceding sentence are exercised by way of delivering a written statement to the Supervisory Board Chairperson (§ 14 sec. 4 of the Company’s Articles of Association);
PKP S.A. is entitled to appoint and dismiss Supervisory Board members in a number equal to half the composition of the Supervisory Board determined in accordance with § 19 sec. 8 of the Company’s Articles of Association (if such number is not an integer, it should be rounded down to the nearest integer) plus one. At least one of the Supervisory Board members appointed by PKP S.A. in the manner set forth in the foregoing sentence should satisfy the conditions of independence within the meaning of Article 86 sec. 5 of the Act on Statutory Auditors and be qualified in accounting or auditing (§ 19 sec. 2 of the Company’s Articles of Association);
PKP S.A. has the personal right to appoint the Supervisory Board Chairperson from among the Supervisory Board members elected by voting in separate groups in accordance with the procedure prescribed in Article 385 § 3-7 of the Commercial Company Code. In the event of PKP S.A.’s failure to appoint the Supervisory Board Chairperson within thirty days of the election of the Supervisory Board in accordance with the procedure referred to in the preceding sentence, the Supervisory Board elects the Chairperson of the Supervisory Board from among its members (§ 19 sec. 5 of the Company’s Articles of Association);
The number of Supervisory Board members is set by PKP S.A. and this provision is also applicable to the election of the Supervisory Board by voting in separate groups in accordance with the procedure prescribed in Article 385 of the Commercial Company Code (in which case the Supervisory Board may be composed of between five and thirteen members). The personal rights referred to in the preceding sentence are performed by way of delivering a written statement to the Company (§ 19 sec. 8 of the Company’s Articles of Association);
In the event of expiration of the mandate of any Supervisory Board member elected by voting in separate groups in accordance with the procedure prescribed in Article 385 § 3-7 of the Commercial Company Code, PKP S.A. will have the personal right to appoint one new Supervisory Board member in his/her place. The other Supervisory Board members is appointed by the Shareholder Meeting (§ 19 sec. 9 of the Company’s Articles of Association);
Pursuant to § 27 sec. 3 of the Company’s Articles of Association, In the event of an expiry or waiver of the personal rights, provisions of the Company’s Articles of Association governing the expired personal rights will be replaced by the relevant provisions of the Commercial Company Code.
Restrictions on the exercise of voting rights at the Shareholder Meeting
Pursuant to § 11 Section 2 of the Articles of Association, each share entitles its holder to one vote at the Shareholder Meeting. Pursuant to § 13 Section 1 of the Company’s Articles of Association, voting rights of the shareholders holding more than 10% of all the votes in the Company are restricted in such a manner that no such shareholder may exercise more than 10% of all the votes in the Company existing on the date of the Shareholder Meeting. This restriction does not apply for the purposes of determining the obligations of buyers of significant blocks of shares, which are prescribed by the Act on Public Offering. The above restriction of the voting rights does not apply to shareholders who, on the date of adoption of the Shareholder Meeting resolution introducing the restriction, were entitled to exercise voting rights, also as users, attached to shares representing more than 10% of the total number of votes existing in the Company or any other entity that acquires the Company’s shares held by the shareholders referred to above in connection with their liquidation.
In accordance with the provisions of the Articles of Association, the limitation of voting rights of shareholders representing more than 10% of the total number of votes in the Company will not cease after a sale of all shares held by PKP S.A. to which the said limitation does not apply. As a consequence, the limitation of voting rights makes it potentially difficult for a single investor to gain control of the Company even if the stake held by PKP S.A. in the Company’s share capital drops to zero.
Moreover, pursuant to § 13 Section 1 of the Company’s Articles of Association, for the purposes of restricting the voting rights, the votes of the shareholders connected by a parent or subsidiary relationship are added up according to the principles described below.
The shareholders whose votes are accumulated and reduced are jointly referred to as a “Grouping”. Vote accumulation involves adding up the votes held by individual shareholders from a Grouping. Reduction of votes involves reduction of the total number of votes in the Company at the Shareholder Meeting vested in the shareholders from a Grouping. Reduction of votes is effected according to the following principles:
for each shareholder associated with a Grouping, a percentage of votes vested in the shareholder in the cumulative number of votes vested in the entire Grouping is calculated;
the number of votes corresponding to 10% of all the votes in the Company is calculated on the date of holding the Shareholder Meeting;
for each shareholder, the product of the percentage mentioned in item 1) above and the number of votes mentioned in item 2) above is calculated;
the number of votes vested in each shareholder forming part of the Grouping after the reduction is the number obtained in item 3) rounded up to a full vote;
Pursuant to § 13 Section 7 of the Company’s Articles of Association, in order to determine the basis for vote accumulation and reduction, each Company shareholder, the Management Board, Supervisory Board and individual members of these bodies, as well as the Chairperson of the Shareholder Meeting may demand that a Company shareholder whose votes are reduced provide information as to whether he/she/it is a person having the status of a controlling entity or subsidiary of another shareholder.
Investor relations and investor communication
PKP CARGO S.A. is committed to providing professional and transparent communication with the capital market stakeholders, including current and prospective shareholders. Investor Relations is the tool used to achieve this objective. A matter of priority in the Company’s communication conducted within framework of its investor relations endeavors is to present to investors a reliable picture of the Company’s operations, including its financial standing, to ensure equal access to information for all market participants.
The primary objective of PKP CARGO S.A. is the correct and timely fulfillment of a listed company’s disclosure duties. In this context, the Company identified a number of events in 2017 that require an immediate public announcement.
In 2017, PKP CARGO S.A. held four conferences for analysts and investors to discuss the Company’s published interim results. During the conference, representatives of the PKP CARGO S.A. Management Board presented the Group’s results and answered the participants’ questions. In order to ensure the broadest possible outreach to the conference, PKP CARGO S.A. provided webcasts of the events through the Company’s website. During the conference, PKP CARGO S.A. provided simultaneous translation into English of each event, both for the attending participants and for Internet viewers or persons participating via teleconference.
On 24-25 April 2017, PKP CARGO S.A. held the third edition of the “Investor Day” targeted at stock exchange analysts and institutional investors. The event was attended by several dozen participants representing various financial institutions. During the “Investor Day”, the participants visited the AWT Group’s key assets located in the Czech Republic, among others the Paskov Terminal.
The high level of PKP CARGO S.A.’s investor relations was confirmed by the awards and recognitions received – for the high quality of communication with the market and fulfillment of information and reporting duties the Company was awarded with the prestigious title “Transparent Company of the Year 2016”.
As part of the Company’s continuous efforts aimed at improving the quality of its investor services, in 2018 PKP CARGO S.A. intends to continue its activities and develop communication tools in the area of investor relations.
The Code of Best Practice for WSE-Listed Companies
In the period from the date of admission of the Company’s shares to public trading, i.e. from 28 October 2013 to 31 December 2016, the Company was subject to the corporate governance rules described in the Code of Best Practice for WSE-Listed Companies (“Code of Best Practice”) forming an attachment to Resolution No. 12/1170/2007 of 4 July 2007 adopted by the Supervisory Board of the Warsaw Stock Exchange, as amended by the following resolutions adopted by the Supervisory Board of the Warsaw Stock Exchange: Resolution No. 17/1249/2010 of 19 May 2010 (effective from 1 July 2010), Resolution No. 15/1282/2011 of 31 August 2011 (effective from 1 January 2012), Resolution No. 20/1287/2011 of 19 October 2011 (effective from 1 January 2012) and Resolution No. 19/1307/2012 of 21 November 2012 (effective from 1 January 2013).
The wording of the Code of Best Practice to which the Company was subject in 2017 is available on the website of the Warsaw Stock Exchange at http://static.gpw.pl/pub/files/PDF/dobre_praktyki/dobre_praktyki_16_11_2012.pdf.
On 13 October 2015, the Supervisory Board of the Warsaw Stock Exchange adopted a resolution on the adoption of a new set of corporate governance rules entitled the “Code of Best Practice for WSE-Listed Companies 2016” (hereinafter referred to as the “Code of Best Practice 2016”) which entered into force on 1 January 2016 and replaced the previous set of corporate governance rules adopted by Resolution of the Warsaw Stock Exchange of 4 July 2007, as amended. The wording of the “Code of Best Practice 2016” to which the Company has been subject since 1 January 2016 is available on the website of the Warsaw Stock Exchange at http://static.gpw.pl/pub/files/PDF/RG/DPSN2016__GPW.pdf.
In connection with the entry into force on 1 January 2016 of the “Code of Best Practice 2016”, on 4 January 2016 the Management Board published a current report in Electronic Information Base format containing “Information on the progress of the Company’s application of recommendations and rules laid down in the Code of Best Practice for WSE-Listed Companies 2016, the wording of which is available on the Company’s website in the section Investor Relations/Corporate Governance/Good Practices
Detailed information on the extent of application of the Best Practice for GPW Listed Companies 2016 by PKP CARGO S.A. in 2017 is provided in Chapters 9.1 and 9.2 of the Consolidated Management Board Report on the Activity of the PKP CARGO Group in the financial year 2017.