1. Corporate Governance Rules applicable to Impel SA and places where the said rules are available to the public

Impel SA adopted the corporate governance rules, published in the document entitled “The Code of Best Practice for WSE Listed Companies ”, whose unabbreviated text can be found at www.corp-gov.gpw.pl.

2. Non-observance of some corporate governance rules

On January 3 rd 2008 Impel SA informed in Current Report No 1/2008 that it applies all corporate governance rules gathered in the document entitled “The Code of Best Practice for WSE Listed Companies ” (DPSN), except for:

1. Rule II.1 “The Company operates a corporate website where it publishes: (…)."

The Issuer’s website does not still contain all required information. The Issuer took steps to comply with the rule. The layout of the website and its content will soon be adjusted to the Code’s requirements.

2. 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 (…).” “Conclusion of a significant agreement 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 SA 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).

3. Rule II.4 “A member of the Management Board should notify the Management Board about any conflict of interest or its possible occurrence, and refrain from comments/voting (…)."

Due to the make-up of the Issuer’s Management Board (3 persons) and the voting procedure (resolutions of the Management Board are passed by absolute majority of votes), the implementation of this rule at Impel SA could in specific cases result in the Management Board’s failure to make a decision. The Issuer considers introducing amendments both to its Articles of Association and the Rules of Procedure for the Management Board, which would allow adoption of the rule. The Issuer gives great attention to ensure that the transactions made between the Company and its related entities, especially those which might be affected by a conflict of interest, are concluded at arm’s length. In addition, Impel SA 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).

4. Rule III.2 “ A member of the Supervisory Board should provide the Management Board with information on his or her relations with any shareholder holding not less than 5% of the total number of votes at the General Meeting (…).”

The Management Board of Impel SA has requested the information specified in this rule from Members of the Supervisory Board, which will subsequently be published on the Issuer’s website.

5. Rules III.7 and III.8 “An audit committee should function within the Supervisory Board, at the minimum (…).” “Attachment No. 1 to the Guidelines of the European Union dated February 15 th 2005 on the Role of Non-executive Directors should be applied with respect to the assignments and operation of the committees acting within the Supervisory Board (…). ”

The Supervisory Board of Impel SA does not have an audit committee in place – at its session on December 19 th 2007 the Management Board of Impel SA passed the text of The Code of Best Practice for WSE Listed Companies to Members of the Supervisory Board. The Supervisory Board did not take any decision on establishing the audit committee.

On October 1 st 2008 the Management Board of Impel SA informed that the layout and contents of the Company’s website have been adjusted to comply with requirements of DPSN, and, as a result, Rule II. 1 is and will be observed in the future. Concurrently, the Management Board of Impel SA informed that the corporate website of Impel SA was also provided with the English version, and its Investor Relations section complies with requirements of DPSN.

On March 20 th 2009 the Management Board of Impel SA reported that it came into possession of statements from Members of the Company’s Supervisory Board, on their relations with Impel SA shareholders, and, as a result, Rule III. 2 of DPSN was applied by the Company. The statements from Members of the Company’s Supervisory Board are available on the Impel SA’s corporate website, in the Investor Relations section, devoted to Company’s Governing Bodies.

With regard to the remaining rules, whose non-observance the Company reported, the activities aimed at ensuring their application have not been finalised yet.

All information regarding the application of the corporate governance rules binding upon the Company is available on the website of Impel SA, in the Investor Relations section – Corporate Governance.

3. Description of the basic characteristics of the internal audit and risk management systems adopted in the Company with regard to the drawing up consolidated financial statements

The Management Board of Impel SA is responsible for the internal audit system in the Company and its effectiveness in the process of drawing up financial statements and periodic reports prepared and published pursuant to the provisions of the Regulation of the Council of Ministers of February 19 th 2009 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.

In the process of financial reporting the Company’s effective internal audit and risk management systems operate by way of:

- rules set down in the Impel Group’s internal procedures and the scope of reporting and accountability in respect of drawing up periodical reports and financial statements, including assurance of their quality and correctness, approval and publication;

- regular reviews of the Impel Group’s published financial statements by a registered auditor.

The accounting function, managed by the Accounting Director of the Impel Group, reporting directly to the Financial Director – Vice-President of the Management Board of Impel SA, 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 the benefit of Impel SA 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 uniform transactions: GK1-asset accounting and employee-related settlements, GK2-purchase and sale accounting, and GK3-bank accounting and other. Such division ensures consistency of solutions applied in the Group. The rule of double checking of posted business transactions and the uniform accounting procedures used for posting of identical business transactions were also introduced.

For drawing up financial statements a uniform tool format is binding, applicable also for tax calculations (corporate income tax and VAT).

The structure of Impel Accounting sp. z o.o. includes a tax department which exercises supervision over the implementation of the Impel Group’s tax strategy and its adjustment to the Group’s current needs. As part of this task it organises the Group’s tax advice, carries out tax audits to verify the Group’s tax risks, supervises the observance of the policy regarding transfer prices in the Group and takes other actions resulting from the above strategy.

In Impel SA 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 Company 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 Company.

Every calendar month, upon closing of the books, the middle and senior level management staff in the accounting function, supervised by the Accounting Director of the Impel Group, analyse together the Company’s financial results against the budget assumptions.

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 Accounting Director of the Impel Group and to the Financial Director – Vice-President of the Management Board.

Following a review or audit conducted by a registered auditor financial statements and periodical reports are submitted to the Management Board of Impel SA for approval.

Approval of periodical financial reporting for publication takes place after its acceptance by the Financial Director – Vice-President of the Management Board.

4. Shareholders of Impel SA 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

On February 26 th 2009 the Management Board of Impel SA received a notification from BlackRock Investment Management (UK) Limited (formerly Merill Lynch Investment Managers Limited), whereby the investor informed that together with its subsidiary undertakings it had not had any shares of Impel SA since January 2006, and, therefore, as at December 31 st 2008 the following shareholders held at least 5% of the total vote at the Company’s General Meeting:

1) according to the notification received by the Company on November 17 th 2008

The shareholders holding at least 5% of the total vote at the GM of Impel SA as at the date of this report, i.e. as at December 31 st 2008:

1) as a result of settling the transaction of the Company’s buyback of own shares for the purpose of redeeming them on February 3 rd 2009

2) according to the notification received by the Company on February 10 th 2009

The above change resulted from Impel SA’s tender offer for the sale of the Company shares, valid from January 15 th to January 28 th 2009, and the transaction of buyback of 3,000,000 own shares by Impel SA on February 2 nd 2009.

5. Holders of any Securities Carrying Special Controlling Powers with Respect to Impel SA and a Description Thereof

None of the holders of the securities issued by Impel SA 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 SA are registered preference shares, whereby each share confers the right to two votes at the General Shareholders Meeting of the Company. As at the date of this report the preference shares represent 33.00% of the Company’s total share capital and 49.62% of the total number of votes at its General Shareholders Meeting. The abovementioned 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 SA.

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 the Impel SA’s shares.

In connection with the buyback of own shares for the purpose of redeeming them, ended on February 3 rd 2009, as at the date of this report the Company holds 3,000,000 treasury shares, whose voting rights are not exercised, pursuant to Art. 364.2 of the Code of Commercial Companies.

7. Restrictions Concerning the Transfer of Ownership Rights to the Issuer’s Securities

As at December 31 st 2008 and as at the date of this report the share capital of Impel SA is divided into 15,151,462 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 of their disposal are governed by the Articles of Association of Impel SA. 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 abovementioned 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 abovementioned 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 sell series C registered preference shares.

In connection with the buyback of own shares for the purpose of redeeming them, ended on February 3 rd 2009, as at the date of this report the Company holds 3,000,000 treasury shares, which may not be disposed of as they were acquired for the purpose of redeeming them.

8. Rules concerning appointment and dismissal of the management staff; authorizations of the management staff, specifically the right to decide on issuing or purchase of own shares

Members of the Management Board of Impel SA 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 SA 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 the President of the Management Board and the remaining members.

Resolutions of the Management Board are required for the issues referred to in the Code of Commercial Companies, the Company’s Articles of Association, and the Rules of Procedure for the Management Board of Impel SA, including: the determination of strategic targets, adoption of financial plans, incurring obligations on or management of the rights whose gross value exceeds PLN 500,000, and making decisions on the commencement of activities in new business areas.

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 Procedures for the Management Board of Impel SA In matters assigned to them, members of the Management Board are responsible to the Company as well as third parties, unless stated otherwise by the strictly applicable rules of law.

The Management Board is not authorized to make decisions about issuing or purchasing own shares .

9. Rules for amending the Articles of Association of Impel SA

Amending of the Articles of Association of Impel SA, pursuant to Art. 27.1.5 of the Company’s Articles of Association, falls within the competence of the General Shareholders Meeting of Impel SA. 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 uniform text of the 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 uniform 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.

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 SA operates pursuant to the provisions of the Polish Code of Commercial Companies, the Company’s Articles of Association, and the Rules of Procedure for the General Shareholders Meeting of Impel SA.

The General Shareholders Meeting is convened by way of an announcement in Monitor Sądowy i Gospodarczy.

Shareholders who submitted in the Company registered certificates of deposit, issued by the entity keeping a securities account in accordance with the provisions on public trading in securities, at least one week before the date of the General Shareholders Meeting, and would not collect them before the conclusion of the General Shareholders Meeting have a right to take part in the General Shareholders Meeting, as well as Members of the Management Board and Supervisory Board or other persons, if their presence results from the provisions of law. Furthermore, the Management Board may invite guests and experts, in the capacity of observers.

The General Shareholders Meeting may adopt resolutions only with regard to the issues put on the agenda, unless the whole share capital is represented at the General Shareholders Meeting and none of the attendees objected to passing a resolution.

Resolutions are adopted by an absolute majority vote, unless the Articles of Association or mandatory legal provisions provide for stricter requirements regarding adoption of a given resolution. Voting over resolutions is open, except for the circumstances referred to 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.

Participants of the General Shareholders Meeting have a right to object to the Chairman’s decision regarding disciplinary issues. In the case of objection the General Shareholders Meeting resolves to sustain or revoke the Chairman’s decision.

At each item on the agenda and with regard to each disciplinary issue a participant of the General Shareholders Meeting has a right to one address and one reply. The Chairman may limit the time of address to 5 minutes and the time of reply to 3 minutes.

Participants of the General Shareholders Meeting have a right to propose changes and addenda to draft resolutions put on the agenda of the General Shareholders Meeting – by the time of closing discussion on the item on the agenda including the draft resolution to which such proposal applies. 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.

In 2008 the General Shareholders Meetings of Impel SA were held on May 19 th and October 16 th, at the Company’s registered seat. The General Shareholders Meetings were convened by the Company’s Management Board. The shareholders of Impel SA did not place a request to convene the General Meeting. The sessions of the general Shareholders Meeting were not cancelled or discontinued. 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 SA in 2008 are available on the Company’s website.

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 SA’s management and supervisory bodies

Supervisory Board

During the reporting period, Impel SA’s operations were supervised by the Supervisory Board, which as at December 31 st 2008 and as at the date of this report, was composed of:

On March 20 th 2008 the resignation of Mr Sylwester Cacek from the post of a member of the Supervisory Board was received. The resignation was submitted effective on the date preceding the date of the next General Shareholders Meeting of Impel SA, i.e. May 19 th 2008 . Mr Sylwester Cacek justified his resignation by citing new duties and his permanent residence outside Poland .

On May 19 th 2008 the General Shareholders Meeting appointed Mr Piotr Urbańczyk member of the Impel SA’s Supervisory Board.

The Supervisory Board of Impel SA operates pursuant to the provisions of the Polish Code of Commercial Companies, the Company’s Articles of Association, and the Rules of Procedure for the Supervisory Board of Impel SA. 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. 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 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, in the number determined by the General Shareholders Meeting, are appointed and dismissed by the General Shareholders Meeting.

2. in the case where the General Shareholder Meeting determines an even number of members of the Supervisory Board:

• 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, in the number determined by the General Shareholders Meeting, are 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 Supervisory Board holds its meetings as required, however, at least once a quarter.

The Rules of Procedure for the Supervisory Board of Impel SA do not provide for the functioning of an audit committee or a remuneration committee.

The scope of operation of the Supervisory Board of Impel SA in 2008

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 SA 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 2008 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 SA.

Having got acquainted with the financial statements of Impel SA 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 2007. Concurrently, it stated that the situation of the whole Impel Group, both regarding its market position and achieved financial results, was satisfactory. Members of the Supervisory Board expressed also their opinion on the draft resolution regarding profit distribution for 2007.

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 SA.

Management Board

As at December 31 st 2008 and at the date of drawing up this report the composition of the Management Board of Impel SA was as follows:

During the reporting period no staff changes occurred in the composition of the Management Board of Impel SA.

The Management Board of Impel SA operates pursuant to the provisions of the Polish Code of Commercial Companies, the Company’s Articles of Association, and the Rules of Procedure for the Management Board of Impel SA. In accordance with the Articles of Association the Management Board is composed of three to seven members. The list 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.

Scope of operation of the Management Board of Impel SA in 2008

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 SA, 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 tem 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 conclude transactions with shareholders and other persons whose interests affected the Company’s interest at arm’s length.

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 in the Company’s annual report.