Supervisory Board

The Company’s Supervisory Board acts on the basis of the Commercial Company Code (ksh) and other legal regulations, the provisions of the Company’s Articles of Association and the provisions of the By-Laws of the Supervisory Board of TAURON Polska Energia S.A. with its registered office in Katowice. When performing their duties, members of the Supervisory Board act in accordance with the principles included in the Best Practices 2016.

The main form of the Supervisory Board overseeing the Company’s operations are the meetings of the Supervisory Board. The Supervisory Board shall perform its obligations collectively. The meetings of the Company’s Supervisory Board are convened by the Chairperson of the Supervisory Board or the Vice Chairperson of the Supervisory Board by presenting a detailed agenda:

• in accordance with the decisions taken by the Supervisory Board,
• of his/her own initiative,
• at a written request of each Member of the Supervisory Board,
• at a written request of the Management Board.

The meetings of the Supervisory Board are held at the Company’s registered office. In justified cases a meeting may be convened at a different venue. In order to convene a meeting all Members of the Company’s Supervisory Board must be invited in writing at least 7 days before the date of the Supervisory Board’s meeting. For important reasons the Chairperson of the Supervisory Board may shorten this period to 2 days, defining the way the invitations should be distributed. Notifications of the Supervisory Board’s meeting are sent by fax or electronic mail. In the notification of the Supervisory Board’s meeting the Chairperson defines the date of the meeting, venue of the meeting and the detailed draft agenda.

The Supervisory Board of the Company meets on as needed basis, however not less frequently than once every 2 months. The Supervisory Board may hold meetings without convening a formal meeting if all Members of the Supervisory Board are present and nobody objects against the fact of holding the meeting or against the agenda. A change of the proposed agenda may occur when all Members of the Company’s Supervisory Board are present at the meeting and no one raises an objection against the agenda. An issue not included in the agenda should be included in the agenda of the next meeting.

Participation in a meeting of the Supervisory Board is a Supervisory Board Member’s duty. A Member of the Supervisory Board shall provide information on the reason for his/her absence in writing. Excusing an absence of a Member of the Supervisory Board requires a resolution of the Company’s Supervisory Board. Members of the Company’s Management Board may take part in the Supervisory Board’s meetings unless the Supervisory Board raises an objection. Participation of the Company’s Management Board’s members in the Supervisory Board meetings is mandatory if they have been invited by the Chairperson of the Supervisory Board. Other persons may also take part in the meetings if they have been invited in the above-mentioned way.

The Supervisory Board may seek opinions of legal counsels who provide regular legal advice for the Company, as well as, in justified cases, it may appoint and invite to meetings of the Supervisory Board appropriate experts in order to seek their opinion and make the right decision. In the above-mentioned cases the Supervisory Board passes a resolution on commissioning the selected expert to carry out the work, obligating the Company’s Management Board to conclude an applicable agreement.

The meetings of the Supervisory Board are chaired by the Chairperson of the Supervisory Board, and in case of his/her absence by the Vice Chairperson of the Supervisory Board. For important reasons, with the consent of the majority of the Members of the Supervisory Board present at the meeting, the person chairing the meeting is obligated to subject to a vote a motion to interrupt the meeting and set the date of resuming the meeting of the Company’s Supervisory Board. The Supervisory Board makes decisions in the form of resolutions. The Supervisory Board’s resolutions are passed mainly during the meetings thereof. The Supervisory Board passes resolutions if at least half of its members are present at the meeting and all of its members have been invited in the appropriate manner defined in the Regulations of the Supervisory Board. Subject to the mandatory legal regulations in force, including the Code of Commercial Companies (ksh) and the provisions of the Company’s Articles of Association, the Supervisory Board passes resolutions by an absolute majority of votes of the persons present at the meeting where the absolute majority of votes is understood as more votes cast “for” than “against” and “abstain”. Resolutions shall not be passed on matters not included in the agenda unless all Members of the Supervisory Board are present and nobody raises an objection. This applies to the resolutions on excusing a Supervisory Board’s member’s absence at the meeting. Resolutions are voted on in an open ballot. A secret ballot is ordered:

• at the request of at least one member of the Supervisory Board,
• in personnel related matters.

In accordance with the Company’s Articles of Association the Supervisory Board may pass resolutions in writing or using means of direct remote communications. Passing a resolution in such a way shall require a prior notification of all Members of the Supervisory Board of the content of the draft resolution and the participation of at least half of the Members of the Supervisory Board in passing the resolution. The Supervisory Board may pass resolutions this way in the personnel related matters, as well as in other matters the resolution of which requires a secret ballot vote as long as no Member of the Supervisory Board raises an objection. When voting on a resolution in the above-mentioned way a Member of the Supervisory Board indicates his/her vote, i.e. “for”, “against” or “abstain”. A resolution with a note that it has been passed in writing or by voting using the means of direct remote communications is signed by the Chairperson of the Supervisory Board. Resolutions passed this way are presented at the forthcoming meeting of the Supervisory Board along with the result of the voting.

Participation in a meeting of the Company’s Supervisory Board using the means of direct remote communications, i.e. a conference call or a video conference, is allowed. In case the Members of the Company’s Supervisory Board take part in a meeting of the Company’s Supervisory Board using the means of direct remote communications, the resolutions are passed if at least half of the Members of the Company’s Supervisory Board participate in the vote. The Members of the Supervisory Board take part in the meetings and exercise their rights and responsibilities in person, and while performing their duties they are obliged to act with due diligence. The Members of the Supervisory Board are obliged to keep confidential information related to the Company’s activities that they have acquired in connection with holding their seat or on another occasion.

The Supervisory Board may, for important reasons, delegate its individual members to perform certain supervision actions on their own for a defined period of time. The Supervisory Board may delegate its members, for a period not longer than three months, to temporarily perform the duties of the Members of the Management Board who have been dismissed, submitted their resignation or if for other reasons they cannot perform their functions. The above-mentioned delegation shall require obtaining a consent of the Member of the Supervisory Board who is to be delegated.

RULES ON APPOINTING AND DISMISSING THE MEMBERS OF THE SUPERVISORY BOARD

Supervisory Board of the Company is composed of 5 to 9 persons, appointed for a common term of office lasting 3 years, except for the first term that lasted 1 year. In accordance with the Company’s Articles of Association members of the Company’s Supervisory Board are appointed and dismissed by the GM, subject to the following:

1. during the time when the State Treasury, together with the State Treasury controlled entities within the meaning of § 10 clause 5 of Company’s Articles of Association, hold a number of the Company’s shares that entitle them to exercise at least 25% of the total votes in the Company, the State Treasury shall be entitled to appoint and dismiss Members of the Company’s Supervisory Board in the number equal to half of the maximum number of members of the Company’s Supervisory Board defined in the Company’s Articles of Association (in case such number is not integral it shall be rounded down to an integral number, for example 4.5 shall be rounded down to 4) and increased by 1, provided that the State Treasury:
   1. is obliged to vote at the GM on establishing the number of Members of the Company’s Supervisory Board that would correspond to the maximum number of Members of the Company’s Supervisory Board defined in the Company’s Articles of Association in case such a motion is submitted to the Company’s Management Board by a shareholder or shareholders who hold a number of votes that entitle them to exercise at least 5% of the total number of votes in the Company,
   2. is excluded from the voting at the GM on appointing and dismissing other members of the Company’s Supervisory Board, including independent members of the Company’s Supervisory Board; this does not, however, apply to the case when the Company’s Supervisory Board cannot act due to its membership being smaller than required by the Company’s Articles of Association, and the shareholders present at the GM, other than the State Treasury, do not supplement the membership of the Company’s Supervisory Board in accordance with the distribution of seats in the Company’s Supervisory Board defined in this section,
2. during the time when the State Treasury, together with the State Treasury controlled entities within the meaning of § 10 clause 5 of the Company’s Articles of Association, hold a number of the Company’s shares that entitle them to exercise less than 25% of the total number of votes in the Company, the State Treasury, represented by the minister competent to exercise the rights related to the State Treasury’s shares, shall be entitled to appoint and dismiss one member of the Company’s Supervisory Board,
3. appointing and dismissing members of the Company’s Supervisory Board by the State Treasury pursuant to the above-mentioned clause 1) or 2) shall take place by means of a statement submitted to the Company.

In accordance with the Best Practice 2016 at least two members of the Company’s Supervisory Board shall meet the criteria of independence.

Independent Members of the Company’s Supervisory Board shall submit to the Company, prior to their appointment as members of the Company’s Supervisory Board, a written statement on compliance with the independence criteria mentioned in the Best Practice 2016.

COMPETENCE OF THE SUPERVISORY BOARD

Supervisory Board of the Company continuously oversees the Company’s activities in all areas of its operations.

COMPOSITION OF THE SUPERVISORY BOARD

The current, 6th term of office of the Company’s Supervisory Board, began on July 15, 2020, i.e. on the day of holding the Ordinary GM of the Company approving the financial statements for the last full financial year of the tenure of the Members of the Company’s Supervisory Board of the 5th term, i.e. for the financial year 2019.

In accordance with the Company’s Articles of Association, it is a common term of office and it lasts for 3 years.

The composition of the Company’s Supervisory Board, as of December 31, 2020:

1. Andrzej Kania – Chair of the Supervisory Board,
2. Teresa Famulska – Vice Chair of the Supervisory Board,
3. Katarzyna Taczanowska – Secretary of the Supervisory Board,
4. Ryszard Madziar – Member of the Supervisory Board,
5. Grzegorz Peczkis – Member of the Supervisory Board,
6. Barbara Piontek – Member of the Supervisory Board.

The composition of the Company’s Supervisory Board, as of the date of drawing up this report:

INFORMATION ON THE INDEPENDENCE OF THE MEMBERS OF THE SUPERVISORY BOARD

In accordance with the Best Practice 2016 at least two members of the Company’s Supervisory Board shall meet the criteria of independence.

The phrase ”an independent member of the supervisory board” denotes independence of a member of the supervisory board within the meaning of Appendix II to the Recommendation of the European Commission of February 15, 2005, on the role of non-executive or supervisory directors of listed companies and on the committees of the (supervisory) board (2005/162/EC) and the additional criteria indicated in the Best Practice 2016.

Independent Members of the Company’s Supervisory Board shall submit to the Company, prior to their appointment as members of the Company’s Supervisory Board, a written statement on compliance with the independence criteria mentioned in the Best Practice 2016. In case a situation occurs where the independence criteria are not complied with, a Member of the Supervisory Board shall be obligated to inform the Company promptly thereof.

Information on the fulfillment by the Members of the Supervisory Board of the independence criteria is posted on the Company’s website.

COMMITTEES OF THE SUPERVISORY BOARD

The Company’s Supervisory Board may appoint from among its members permanent or temporary (ad hoc) working groups, committees to perform specific actions. The standing committees of the Company’s Supervisory Board are:

1. Audit Committee of the Supervisory Board of TAURON Polska Energia S.A. (Audit Committee),
2. Nominations and Compensation Committee of the Supervisory Board of TAURON Polska Energia S.A. (Nominations and Compensation Committee),
3. Strategy Committee of the Supervisory Board of TAURON Polska Energia S.A. (Strategy Committee).

The composition, tasks and rules (procedures) of operation of the above-mentioned committees shall be defined in the regulations thereof passed by the Supervisory Board.

The Committees of the Supervisory Board are advisory and opinion making bodies acting collectively as a part of the Company’s Supervisory Board structure and perform the support and advisory functions for the Supervisory Board. The tasks of the Committees of the Supervisory Board are carried out by submitting motions, recommendations, opinions and statements related to the scope of their tasks to the Supervisory Board, by way of the resolutions passed.

The Committees of the Supervisory Board are independent of the Management Board of the Company.

The Audit Committee and the Nominations and Compensation Committee of the Supervisory Board are composed of 3 to 5 members, while the Strategy Committee is composed of 3 to 7 members.

The activities of the individual Committees are managed by their Chairpersons (Heads). The meetings of the Committees of the Supervisory Board are convened by the Chairperson (Head) of the specific Committee on his / her own initiative or upon the motion of a member of the Committee or Chairperson of the Supervisory Board and they are held on as needed basis. In case of the Audit Committee the meetings are convened at least on a quarterly basis. The Head of the given Committee may invite the Members of the Company’s Supervisory Board, who are not members of the specific Committee, the members of the Management Board and the employees of the Company as well as other persons working or cooperating with the Company to take part in the meetings of the Committees. The Head of the specific Committee or a person appointed by him/her submits motions, recommendations and reports to the Supervisory Board.

The Committees of the Supervisory Board pass resolutions if at least half of their members are present at the meeting and all of the members have been duly invited. The resolutions of the Committees of the Supervisory Board are adopted by an absolute majority of votes present at the meeting, where the absolute majority of votes is understood as more votes given “for” than “against” and “abstain”. The Committees of the Supervisory Board may pass resolutions in writing or by using the means of direct remote communication. The Members of the Committees of the Supervisory Board may also participate in the meetings of the Committees and vote on the resolutions being passed by using the means of direct remote communication, i.e. tele- or videoconferences.

The Company’s Management Board is informed of the recommendations and assessments submitted to the Supervisory Board by the given Committee of the Supervisory Board. Every year, the Committees of the Supervisory Board provide public record information, via the Company, on their memberships, the number of meetings held and the participation in the meetings during the year, as well as on their main activities.

The Company’s Management Board provides the individual Committees with possibility of using the services of the external advisers to the extent required to perform the obligations of the Committees.

AUDIT COMMITTEE

The members of the Audit Committee were appointed for the current term on August 3, 2020 by the Supervisory Board of the 6th common term of office from among its members.

In 2020 the Audit Committee was composed of 3 to 5 members. Due to the changes to the membership of the Supervisory Board of the Company introduced in 2020, the Company’s Supervisory Board also made changes to the membership of the Audit Committee.

Composition of the Audit Committee as of December 31, 2020 and as of the date of drawing up this report:

1. Teresa Famulska – Head of the Audit Committee,
2. Grzegorz Peczkis – Member of the Audit Committee,
3. Katarzyna Taczanowska – Member of the Audit Committee.

Information on the independence of the members of the Audit Committee

Pursuant to the Act of May 11, 2017, on certified auditors, audit companies and public oversight, the majority the members of the audit committee, including its head, should be independent and at least one member of the audit committee should have knowledge and skills with respect to accounting or auditing financial statements and at least one member of the audit committee should have knowledge and skills in the industry that the company operating in.

In 2020 the membership (composition) of the Audit Committee was in compliance with the requirements defined in the above-mentioned act. The evaluation of the independence and the statutory requirements with respect to the knowledge and skills of the individual members of the Audit Committee was made by the Company’s Supervisory Board based on the relevant statements submitted by the members of the Audit Committee.

Tasks and competences of the Audit Committee

In 2020 the Audit Committee was performing the tasks and competences defined in the currently applicable legal regulations and in the Regulations of the Audit Committee of the Supervisory Board of TAURON Polska Energia S.A. adopted by the Supervisory Board.
The Audit Committee held 9 meetings in total during the period covered by this report.

Competences of the Audit Committee as of December 31, 2020, and as of the date of drawing up this report:

1. monitoring:
   1. Company’s financial reporting process,
   2. effectiveness of the internal control, risk management, compliance and internal audit systems, including with respect to the financial reporting,
   3. performing of financial revisions, in particular performing of an audit by an audit company, taking into account any conclusions (motions) and findings of the Audit Supervision Committee stemming from an audit (inspection) performed at an audit company,
2. controlling and monitoring of the independence and impartiality of the chartered accountant (certified auditor) and the audit company, in particular in case other services than an audit are provided for the benefit of the Company by the audit company,
3. performing the evaluation of the independence of the certified auditor and expressing consent for the performance thereby of the permitted services that do not constitute an audit within the Company,
4. developing the policy for selecting the audit company to perform the audit,
5. developing the policy for performing by the audit company conducting the audit, entities related to such audit company and the members of the audit company’s corporate network, of the permitted services that do not constitute an audit,
6. defining the procedure for selecting the audit company by the Company,
7. presenting to the Supervisory Board, for the purpose of selecting the audit company responsible for performing the statutory audit or review of financial statements, of the recommendation, referred to in Art. 130, clauses 2 and 3 of the Act of May 11, 2017 on certified auditors, auditing companies and public oversight and in Art. 16, clause 2 of the Regulation (EU) No 537/2014 of the European Parliament and of the Council of April 16, 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC, in line with the policies referred to above in items 4 and 5,
8. informing the Supervisory Board of the audit results and explaining how the audit contributed to the accuracy (fairness) of the Company’s financial reporting, and also what the role of the Audit Committee in the audit process was,
9. presenting the recommendations aimed at ensuring accuracy (fairness, reliability) of the Company’s financial reporting process,
10. performing other activities vested with the audit committees pursuant to the Act of May 11, 2017, on certified auditors, auditing companies and public oversight, Regulation (EU) No 537/2014 of the European Parliament and of the Council of April 16, 2014 on specific requirements regarding statutory audit of public-interest entities, repealing the Commission Decision 2005/909/EC and the Act of September 29, 1994, on accounting.

NOMINATIONS AND COMPENSATION COMMITTEE

The members of the Nominations and Compensation Committee were appointed for the current term on August 3, 2020 by the Supervisory Board of the 6th common term of office from among its members.

In 2020 the Nominations and Compensation Committee was composed of 2 to 4 members. Due to the changes to the membership of the Supervisory Board of the Company introduced in 2020, the Company’s Supervisory Board also made changes to the membership of the Nominations and Compensation Committee.

 Composition of the Nominations and Compensation Committee as of December 31, 2020:

1. Andrzej Kania – Head of the Nominations and Compensation Committee,
2. Ryszard Madziar – Member of the Nominations and Compensation Committee,
3. Barbara Piontek – Member of the Nominations and Compensation Committee.

Composition of the Nominations and Compensation Committee as of the date of drawing up this report:

1. Andrzej Kania – Head of the Nominations and Compensation Committee,
2. Ryszard Madziar – Member of the Nominations and Compensation Committee,
3. Grzegorz Peczkis – Member of the Nominations and Compensation Committee.

Tasks and competences of the Nominations and Compensation Committee

The tasks and competences of the Nominations and Compensation Committee did not change in 2020.
Competences of the Nominations and Compensation Committee, as of December 31, 2020 and as of the date of drawing up this report:

1. recommending to the Supervisory Board a recruitment procedure for the positions of the Members of the Company’s Management Board,,
2. evaluating candidates for the Members of the Management Board and providing the Supervisory Board with opinions in this respect,
3. recommending to the Supervisory Board a form and content of the agreements to be concluded with the members of the Management Board,
4. recommending to the Supervisory Board a compensation and bonus system for the members of the Management Board,
5. recommending to the Supervisory Board the need to suspend a member of the Management Board for important reasons,
6. recommending to the Supervisory Board the need to delegate a member of the Supervisory Board to temporarily perform the duties of the Members of the Management Board who cannot perform their duties, along with a compensation proposal.

STRATEGY COMMITTEE

The members of the Strategy Committee were appointed for the current term on August 3, 2020 by the Supervisory Board of the 6th common term of office from among its members.

In 2020 the Strategy Committee was composed of 2 to 5 members. Due to the changes to the membership of the Supervisory Board of the Company, introduced in 2020, the Company’s Supervisory Board also made changes to the membership of the Strategy Committee.

Composition of the Strategy Committee as of December 31, 2020

1. Grzegorz Peczkis – Head of the Strategy Committee,
2. Ryszard Madziar – Member of the Strategy Committee,
3. Barbara Piontek – Member of the Strategy Committee.

Composition of the Strategy Committee as of the date of drawing up this report

1. Grzegorz Peczkis – Head of the Strategy Committee,
2. Andrzej Kania – Member of the Strategy Committee,
3. Ryszard Madziar – Member of the Strategy Committee,
4. Marcin Wawrzyniak – Member of the Strategy Committee.

Tasks and competences of the Strategy Committee

The tasks and competences of the Strategy Committee did not change in 2020.

Competences of the Strategy Committee as of December 31, 2020 and as of the date of drawing up this report:

1. evaluating the Company’s and TAURON Capital Group’s Strategy and presenting the results of such evaluation to the Supervisory Board,
2. recommending to the Supervisory Board the scope and deadlines for submitting the long-term strategic plans by the Management Board,
3. evaluating the impact of the planned and currently undertaken strategic investment projects on the Company’s assets’ position,
4. monitoring the implementation of the strategic investment tasks,
5. evaluating activities related to the use of the Company’s material assets,
6. providing opinions on the strategic documents submitted to the Supervisory Board by the Management Board.

SEE ALSO:

By-Laws of the Supervisory Board of TAURON Polska Energia S.A. 

Responsible Business Code