1. Corporate Governance Rules Applicable to Impel S.A. and Places Where the Said Rules are Available to the Public.
Impel S.A., as a listed company, conforms to the corporate governance rules, published in the document entitled "The Code of Best Practice for WSE Listed Companies", adopted by the Supervisory Board of the WSE on 19 May 2010 and to be found at: www.corp-gov.gpw.pl.
This statement meets the requirements of the report on the application of "The Code of Best Practice for WSE Listed Companies" specified in §1 of the Resolution No 1013/2007 of the WSE Management Board dated 11 December 2007 and in accordance with §2 of the Resolution No 718/2009 of the WSE Management Board dated 16 December 2009, the Company is not required to submit the report referred to in Art. 29.5 of the Rules of the Warsaw Stock Exchange.
2. Non-observance of Some Corporate Governance Rules.
The Management Board of Impel S.A. declares that in 2011 the Company complied with corporate governance principles included in "Best Practices for WSE Listed Companies", except for those presented below:
Rules II.3. and III.9 "The Management Board, before concluding a significant agreement with a related entity shall require approval of the transaction/agreement from the Supervisory Board. This obligation shall not apply to typical transactions, concluded at arms' length. "Conclusion of a significant agreement/transaction between a company and its related entity, which meets the conditions referred to in section II.3, shall require approval of the Supervisory Board".
Due to the scale of business and organisational links among the Impel Group companies, implementation of this rule would considerable hinder daily operations. The Issuer gives great attention to ensure that the transactions made between the Company and its related entities are concluded at arm's length. In addition, Impel S.A. reports on all transactions with its related entities, and stores their documentation in compliance with the provisions of Art. 9a of the Corporate Income Tax Act (Dz.U. of 2000 No. 54 item 654 as amended).
Rule II.1.14 "The Company maintains a corporate website and places on it, apart from the information required by the provision of law:
14) information about the content of the rule, binding in the Company, regarding a change of an entity qualified for auditing financial statements or about the lack of such rule"
At present the Issuer does not have on its website any information about the rule binding in the Company (or its lack) regarding a change of an entity qualified for auditing financial statements.
All information regarding the application of the corporate governance rules binding upon the Company is available on the website of Impel S.A., in the Investor Relations section - Good Practices.
3. Description of the Basic Characteristics of the Internal Audit and Risk Management Systems Adopted in the Impel Group With Regard to the Drawing up Consolidated Financial
The Corporate Management Board of the Impel Group is responsible for the internal audit system in the Group and its effectiveness in the process of drawing up financial statements and periodical reports prepared and published pursuant to the provisions of the Regulation of the Council of Ministers of 19 February 2010 on current and periodical information provided by issuers of securities and conditions for recognising as equivalent information required under the law of a non-member state. Reporting is based on the International Accounting Standards (IAS).
In the process of financial reporting the Company's effective internal audit and risk management systems operate by way of:
The accounting function, managed by the Financial Director - Vice President of the Management Board of Impel S.A., is responsible for drawing up the financial statements and periodical reports.
Books of accounts of the Group's respective undertakings are kept by the Accounting Centre operating within Impel Accounting sp. z o.o., which renders accounting and bookkeeping services for Impel S.A. and other Group's undertakings. The books of accounts are kept in accordance with uniform rules and the Holding Chart of Accounts binding in the Group. As part of the Centre there operate respective accounting departments responsible for making settlements for the companies belonging to respective Business Units. The rule of double checking of posted business transactions and the uniform accounting procedures used for posting of identical business transactions were also introduced.
Financial statements of the Group's companies are approved by their respective chief accountants and the consolidated financial statements by the Director of the Accounting Centre.
For drawing up financial statements a uniform tool format is binding, applicable also for tax calculations (corporate income tax and VAT).
Pursuant to the binding provisions of law the Company's financial statements are subject to review or audit, respectively, conducted by an independent registered auditor. Reviews focus in particular on adequacy of financial data and the scope of necessary disclosures. The results of such review or audit are presented by the auditor to the Financial Director - Vice President of the Management Board of Impel S.A. and the Supervisory Board.
Following a review or audit conducted by a registered auditor financial statements and periodic reports are submitted to the Management Board of Impel S.A. for approval. The approved documents are published in accordance with their schedule annually approved by the Management Board.
Accounting Audyt Partner sp. z o.o. S.K., operating within the Impel Group, is responsible for supervising the implementation of the Group's tax strategy and its modification to adapt it to the current needs, performing tax audits to verify the Group's tax risks, supervising the implementation of the Group's transfer prices policy and performing other activities resulting from the above-mentioned strategy.
In the Impel Group strategies and long-term business plans are reviewed annually. The annual budget prepared for the following year is accepted by the Management Board of the Impel Group and presented to the Company's Supervisory Board. In the course of the year the Management Board analyses current financial results comparing them against the accepted budget by means of management accounting applied in the Group.
Every calendar month, upon closing of the books, the middle and senior level management staff in the accounting function, supervised by the Financial Director - Vice President of the Management Board of Impel S.A., analyse together the Company's financial results against the budget assumptions.
4. Shareholders of Impel S.A. Holding Directly or Indirectly Significant Blocks of Shares; Numbers of Shares Held by These Entities, Their Holding in the Share Capital, Votes Carried by Such Shares and Their Share in the Total Vote at the General Meeting
The information was presented in Section VII p. 5 of this report.
5. Holders of any Securities Carrying Special Controlling Powers and Description Thereof
None of the holders of the securities issued by Impel S.A. has any special controlling entitlements towards the Company.
Each share of the Company confers the right to one vote, with the reservation that 5,000,000 shares of C series of Impel S.A. are registered preference shares, whereby each share confers the right to two votes at the General Shareholders Meeting of the Company. Furthermore, in the case where the General Shareholders Meeting determines an odd number of members of the Supervisory Board, 3, 4 or 5 members of the Supervisory Board (respectively, should the General Shareholders Meeting determine the number of Board Members as 5, 7 or 9) including Chairman, are appointed and dismissed by the shareholders who own registered preference shares Series C, whereas in the case where the General Shareholder Meeting determines an even number of members of the Supervisory Board, a half of the members of the Supervisory Board, including Chairman, are appointed and dismissed, by way of voting during the General Shareholders Meeting, by an absolute majority vote resulting from registered preference shares Series C, by the shareholders who own registered preference shares Series C. Other members of the Supervisory Board are appointed and dismissed by the General Shareholders Meeting.
As at the date of this report the preference shares represent 41.15% of the Company's total share capital and 58.30% of the total number of votes at its General Shareholders Meeting. The above-mentioned shares are held by Mr Grzegorz Dzik and Mr Józef Biegaj. The rules of their disposal are governed by the Articles of Association of Impel S.A.
6. Restrictions on Exercising the Voting Rights, Such As Restriction on Exercising the Voting Rights by Entities Holding a Specific Part or Number of Votes, Restrictions on Exercising the Voting Rights Within a Certain Timeframe or Provisions Pursuant to Which, with the Company's Cooperation, the Capital Rights Related to Securities are Separated from the Ownership of Such Securities
There are no restrictions with regard to exercising the voting rights attached to Impel S.A.'s shares.
7. Restrictions Concerning the Transfer of Ownership Rights to Impel S.A. Securities
As at 31 December 2011 and as at the date of this report the share capital of Impel S.A. was divided into 12,151,462 shares with a par value of PLN 5.00 each, of which 5,000,000 Series C Shares are registered preference shares, whereby each share confers the right to two votes at a General Shareholders Meeting of the Company.
Disposal of the Series C registered preference shares is restricted. The rules for their disposal are set out in the Articles of Association of Impel S.A. Pursuant to their provisions the shareholder of preference shares is obliged to notify the Management Board of the Company about intended disposal of the shares. The remaining holders of the preference shares have pre-emptive rights to acquire the above-mentioned shares.
The shareholders can exercise their pre-emptive right by submitting to the Management Board a written statement of their intention to acquire the shares. Should several holders of the registered preference shares submit the statements, these shareholders are entitled to the pre-emptive right in proportion to the number of the Series C registered preference shares they already hold.
In case the above-mentioned shares are not acquired by the eligible shareholders, after the procedure has been carried out, the Management Board shall be entitled to designate a person from among the remaining shareholders of the Company which will pay the established price for the shares. If a buyer is not designated or if the buyer designated by the Management Board does not pay the established share acquisition price, the shareholder may freely dispose of Series C registered preference shares.
8. Rules Concerning Appointment and Dismissal of the Management Staff; Powers of the Management Staff, Specifically the Right to Decide on Issue or Purchase of Own Shares
Members of the Management Board of Impel S.A. are appointed and dismissed in accordance with the regulations of the Code of Commercial Companies and the provisions of the Company's Articles of Association. The Management Board of Impel S.A. comprises three to seven members, including the President. The number of members of the Management Board and their positions are established by the Supervisory Board. The Management Board is appointed for three successive years. The Supervisory Board appoints and dismisses the President and the remaining members of the Management Board.
The Management Board may grant power of proxy; its establishment is subject to approval by all members of the Board. The power of proxy may be withdrawn by any Member of the Management Board acting individually.
The Management Board powers include managing all Company's activities except for the issues which, pursuant to the provisions of the Code of Commercial Companies or the Company's Articles of Association, fall within the exclusive competence of the General Shareholders Meeting or the Supervisory Board. Individual Members of the Management Board manage respective areas of the Company's business entrusted to them, and their work is coordinated by the President of the Management Board.
Individual members of the Management Board are authorized and required to act independently on matters concerning their field of activity, which were described in detail in the Rules of Procedure for the Management Board of Impel S.A. In matters assigned to them, Members of the Management Board are accountable to the Company as well as third parties, unless stated otherwise by the strictly applicable rules of law.
9. Rules for Amending the Articles of Association of Impel S.A.
Amending of the Articles of Association of Impel S.A., pursuant to Art. 27.1.5 of the Company's Articles of Association, falls within the competence of the General Shareholders Meeting of Impel S.A. Amendments to the Articles of Association may be adopted by the General Shareholders Meeting by three-quarters majority vote. If there are plans to amend the Articles of Association, in the announcement on convening the General Shareholders Meeting the existing provisions and the designed changes should be quoted. If justified by the considerable extent of amendments, the announcement should include a draft of the new consolidated Articles of Association with a specification of new or amended provisions.
In the resolution amending the Articles of Association, the General Shareholders Meeting may authorise the Supervisory Board to provide a consolidated text of the amended Articles of Association or to enter other editorial changes.
Amendments to the Articles of Association become effective upon their entry to the National Court Register. The obligation to report amendments to the Articles of Association rests with the Management Board, which has to fulfil this obligation within three months as of adopting the relevant resolution. If an amendment to the Articles of Association consists in increasing the share capital of a joint stock company it may be reported within six months as of adopting the relevant resolution, and if it includes consent to the introduction of a new issue of shares to public trading - as of the date of granting such consent, provided that an application for granting consent or notification of the issue were submitted within four months as of the date of adopting the resolution on increasing the share capital. The resolution on decreasing the share capital has to be entered to the National Court Register within six months as of the date of adopting it.
In 2011 the Company's Articles of Association was changed under Resolution No 4 of the Extraordinary General Shareholders Meeting of Impel S.A. of 10 March 2011. The change concerned the Company's capital structure in connection with the conversion of third issue Series C ordinary registered shares into third issue Series C bearer shares.
10. Description of the General Shareholders Meeting's Operation and Fundamental Powers, and Shareholders' Rights and the Manner of Exercising Them, in Particular the Rules Based on the Rules of Procedure for the General Shareholders Meeting, if Such Rules Have Been Established, Unless the Relevant Information is Based Directly on the Provisions of Law.
The General Shareholders Meeting of Impel S.A. operates pursuant to the provisions of the Code of Commercial Companies, the Company's Articles of Association, and the Rules of Procedure for the General Shareholders Meeting of Impel S.A.
The General Shareholders Meeting shall be convened by way of an announcement on the Company's website and in the way specified for submitting current reports in accordance with the Public Offer of Financial Instruments Act (The Act on Public Offer and the Conditions for Introducing Financial Instruments to the Organised Trading System, and on Public Companies). The announcement shall be made at the latest twenty six days before the date of the General Shareholders Meeting.
An Extraordinary Shareholders Meeting shall be convened by the Company's Management Board on its own initiative, or at a written request of the Supervisory Board, or of the Shareholder(s) representing one-twentieth of the Company's share capital. Convening of the Extraordinary Shareholders Meeting at a request of the Supervisory Board or of the Shareholders representing one-twentieth of the Company's share capital should occur within two weeks as of the date of submitting the request.
The Supervisory Board may convene a General Shareholders Meeting, in the event the Management Board has not convened it within the timeframe set in the Articles of Association, and an Extraordinary Shareholders Meeting, if it finds convening such meeting advisable. The Shareholder(s) representing one-fifth of the Company's share capital shall also have the right to convene a General Shareholders Meeting in the event the Management Board has not convened it within the timeframe set in the Articles of Association.
The Shareholders representing at least one half of the share capital or at least one half of the total vote in the Company may convene an Extraordinary Shareholders Meeting and appoint the Chairman of such meeting.
The Company's Shareholder having bearer shares shall have the right to participate in the General Shareholders Meeting if sixteen days before the date of the General Shareholders Meeting (date of registration of participation in the general shareholders meeting) such person is the Company's Shareholder, i.e. the Company's shares are held on the person's securities account, and not before the general shareholders meeting was announced and not later than on the first business day after the registration date, a request for issuing a named certificate entitling to participate in the General Shareholders Meeting is submitted by such person to the entity keeping the securities account on which the Company's shares are held.
The Company's Shareholder having registered shares shall have the right to participate in the General Shareholders Meeting if sixteen days before the date of the General Shareholders Meeting (date of registration of participation in the general shareholders meeting) such person is the Company's Shareholder, i.e. the Company's shares are held on the person's securities account and not before the general shareholders meeting was announced and not later than on the last business day before the registration date, a request to issue a deposit certificate confirming the shareholding at the date of registration is submitted by such person to the entity keeping the securities account on which the Company's shares are held, and the certificate is delivered to the Company seven days before the date of the General Shareholders Meeting at the latest.
Members of the Management Board and Supervisory Board or other persons have the right to participate in the General Shareholders Meeting, if their presence results from the provisions of law. Furthermore, the Management Board may invite guests and experts, in the capacity of observers.
The Shareholder(s) representing at least one-twentieth of the share capital shall have the right to request putting specific issues on the agenda for the General Shareholders Meeting. Such request should be submitted to the Company's Management Board not later than 21 days before the date of the General Shareholders Meeting. The request should be accompanied by the relevant justification or a draft resolution regarding the proposed item on the agenda.
The General Shareholders Meeting may only adopt resolutions concerning matters put on the agenda, unless the total share capital is represented at the Meeting and none of those present objected to the adoption of a given resolution.
A shareholder or shareholders representing at least 1/20 of the share capital may, prior to the date of the General Shareholders Meeting, submit to the Company, in writing or by electronic means of communication, draft resolutions on issues included, or a planned to be included, in the agenda of the General Shareholders Meeting. The Company shall promptly announce the draft resolutions on its website.
During the General Shareholders Meeting each GM Participant may submit draft resolutions on the issues included in the agenda as well as propose changes and supplements to the draft resolutions included in the agenda for a given General Shareholders Meeting before the closing of the discussion on the item of the agenda containing the draft resolution which the proposed change concerns. Proposals accompanied by a brief justification should be submitted to the Chairman in writing, separately for each draft resolution, and specifying the name of the person putting forward the proposal.
Resolutions shall be adopted by an absolute majority of the votes cast, unless the Articles of Association or the absolutely binding legal regulations provide for more strict criteria for the adoption of a given resolution. The resolutions adopted at the General Shareholders Meeting shall be valid if the attending shareholders represent no less than 30% of the share capital. Voting shall be open except for circumstances stipulated in Art. 420 of the Code of Commercial Companies, i.e. during elections and when voting over motions regarding dismissal of members of the Company‘s bodies or liquidators, over motions regarding holding members of the Company's bodies or liquidators liable as well as when voting over personnel issues, and at a request of even one of the shareholders, present or represented at the General Meeting of Shareholders. Resolutions regarding a material change in the scope of the Company's business are always adopted by open voting by roll call.
The GM Participants shall have the right to object to the Chairman's decision concerning procedural issues. If an objection is raised, the General Shareholders Meeting shall resolve whether to uphold or overturn the Chairman's decision.
With respect to any item on the agenda or any procedural issue, each Participant of the General Shareholders Meeting shall have the right to make one speech and one reply. The Chairman may set a time limit of 5 minutes for the speeches and 3 minutes for the replies.
In 2011 there were three sessions of the General Shareholders Meeting of Impel S.A., on 10 March, 18 May and 6 September held at the Company's registered office. The General Shareholders Meetings were convened by the Company's Management Board on its own initiative. The sessions of the General Shareholders Meetings were not cancelled or interrupted. The Members of the Company's Management Board and Supervisory Board were present at the sessions.
All resolutions passed by the General Shareholders Meeting of Impel S.A. in 2011 are available on the Company's website in the Investor Relations Tab - General Meeting.
11. Changes in the Make-up of the Management and Supervisory Staff of the Issuer During the Last Financial Year; Description of the Operation of Impel S.A.'s Management and Supervisory Bodies
Supervisory Board
During the reporting period, Impel S.A.'s operations were supervised by the Supervisory Board, which in 2011 was composed of:
On 18 May 2011 the Ordinary General Shareholders Meeting of Impel S.A. approved the performance of duties by all Members of the Supervisory Board.
The Supervisory Board of Impel S.A. operates pursuant to the provisions of the Code of Commercial Companies, the Company's Articles of Association, and the Rules of Procedure for the Supervisory Board of Impel S.A. Pursuant to the Articles of Association the Supervisory Board consists of at least five and not more than nine members, including Chairman, Deputy Chairman, and Secretary. The number of members of the Supervisory Board is determined by the General Shareholders Meeting. Members of the Supervisory Board are appointed and dismissed in the following manner:
1. if the General Shareholders Meeting sets an odd number of members of the Supervisory Board:
c) 3, 4 or 5 members of the Supervisory Board, respectively, if the General Shareholders Meeting sets the number of the Supervisory Board at 5, 7 or 9 members, including the Chairman, shall be appointed and dismissed by the holders of series C registered preference shares, by voting during the General Shareholders Meeting, by absolute majority of votes conferred by Series C preference registered shares;
d) the remaining members of the Supervisory Board, in the number set by the General Shareholders Meeting, shall be appointed and dismissed by the General Shareholders Meeting.
2. if the General Shareholders Meeting sets an even number of members of the Supervisory Board:
c) half the members of the Supervisory Board, including the Chairman, shall be appointed and dismissed by the holders of series C registered preference shares, by voting during the General Shareholders Meeting, by absolute majority of votes conferred by Series C preference registered shares;
d) the remaining members of the Supervisory Board, in the number set by the General Shareholders Meeting, shall be appointed and dismissed by the General Shareholders Meeting.
The Supervisory Board exercises permanent supervision over the Company's operations in all their areas.
Members of the Supervisory Board are appointed for the common term lasting three subsequent years. The mandate of a Supervisory Board Member, appointed before the end of a given term of the Supervisory Board expires upon expiry of mandates of the other Members of the Supervisory Board.
The Supervisory Board adopts resolutions if at least a half of its members are present at the meeting and all members have been invited. Resolutions of the Supervisory Board are passed by an absolute majority vote. In the case of a deadlock, the Chairman of the Supervisory Board has the casting vote.
Voting is open, except for voting on appointment, dismissal or suspension of a Member of the Management Board.
The meetings of the Supervisory Board shall be convened on an ad hoc basis, however no less frequently than once a quarter.
The Rules of Procedure for the Supervisory Board of Impel S.A. do not provide for the functioning of a remuneration committee. The Supervisory Board is obliged to appoint an audit committee if it is composed of more than five members, otherwise the whole Supervisory Board has to fulfil the tasks of such committee.
Information on Members of the Supervisory Board is available on the Company's website in the Investor Relations Tab - Governing Bodies.
The scope of operation of the Supervisory Board of Impel S.A. in 2011
The Company's Supervisory Board operated pursuant to the provisions of the Code of Commercial Companies, the Articles of Association, the Rules of Procedure for the Supervisory Board of Impel S.A. and in compliance with the rules of "The Code of Best Practice for WSE Listed Companies", except for the rules referred to in item IX.2.
The meetings of the Supervisory Board took place on a regular basis, and the selected members of the Management Board participated in them. In 2011 the Supervisory Board held 5 meetings. The Management Board provided the Supervisory Board with sufficient information about all important issues regarding the Company's operations. At the Supervisory Board's meetings resolutions were adopted regarding the issues put on the agenda sent to Members of the Supervisory Board in the notification of the meeting.
The Supervisory Board focused on the issues of crucial importance for the operation of Impel S.A.
Having got acquainted with the financial statements of Impel S.A. and the Impel Group the Supervisory Board expressed its favourable opinion on them, and adopted, by way of resolutions, a brief assessment of the Company's situation, including internal audit and risk management systems, and an assessment of the Supervisory Board's operation for the year 2010. Members of the Supervisory Board expressed their favourable opinion also on a draft resolution regarding the distribution of the profit for 2010.
Remunerations for the Supervisory Board Members did not represent a material cost item in the Company's operations, and they did not affect significantly its financial results. The total amount of all remunerations, and individual amounts for each Member of the Supervisory Board were disclosed in the annual report of Impel S.A.
Management Board
In 2011 the composition of the Management Board of Impel S.A. was as follows:
On 18 May 2011 the Ordinary General Shareholders Meeting of Impel S.A. approved the performance of duties by all Members of the Management Board.
The Management Board of Impel S.A. operates pursuant to the provisions of the Code of Commercial Companies, the Company's Articles of Association, and the Rules of Procedure for the Management Board of Impel S.A. In accordance with the Articles of Association the Management Board is composed of three to seven members. The number of the Management Board Members and their positions are determined by the Supervisory Board. The term of office of the Management Board lasts for three subsequent years.
The Management Board powers include managing all Company's activities except for the issues which, pursuant to the provisions of the Code of Commercial Companies or the Company's Articles of Association, fall within the exclusive competence of the General Shareholders Meeting or the Supervisory Board. Individual Members of the Management Board manage respective areas of the Company's business entrusted to them, and their work is coordinated by the President of the Management Board.
Resolutions of the Management Board are passed by a simple majority vote. Each Member of the Management Board is individually authorised to make declarations on behalf of the Company.
Information on Members of the Management Board is available on the Company's website in the Investor Relations Tab - Governing Bodies.
Scope of operation of the Management Board of Impel S.A. in 2011
The Company's Management Board operated pursuant to the provisions of the Code of Commercial Companies, the Articles of Association, and the Rules of Procedure for the Management Board of Impel S.A., and in compliance with the rules of "The Code of Best Practice for WSE Listed Companies", except for the rules referred to in item IX.2.
When taking decisions on issues regarding the Company, the Members of the Management Board acted within the limits of justified economic risk, i.e. having considered all information, analyses, and opinions which in the Management Board's reasonable judgement should have been taken into account in a given case with respect to the Company's interest. Upon determination of the Company's interest they took into account the interests, justified in a long term perspective, of its shareholders, creditors, employees, and other entities and persons cooperating with the Company in the scope of its business operations as well as the interest of local communities.
The Management Board acted with extreme care to have transactions with shareholders and other persons whose interests affected the Company's interest concluded at arm's length.
On 29 July 2011 Ms Elżbieta Piechota was appointed the proxy of Impel S.A., authorized to act individually. On 9 November 2011 the power of proxy of Mr Bogusław Szyszka was withdrawn.
Remunerations for Members of the Management Board were determined on the basis of transparent procedures and rules, taking into consideration their motivational nature and assurance of effective and smooth management of the Company. Remunerations met the criteria for the scope of accountability resulting from the fulfilled function, remaining in a reasonable relation to the level of remuneration of management board members in similar companies on a comparable market. The total amount of all remunerations as well as individual amounts of remuneration of each Member of the Management Board were disclosed the Notes to the Financial Statements of Impel S.A.
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Impel Group
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