In 2010, PKN ORLEN complied with the “Best Practice for Companies Listed on the Stock Exchange” (further the “Best Practice for WSE Listed Companies”) valid for the Warsaw Stock Exchange. The Code of Best Practice for WSE Listed Companies can be found on the website dedicated to the corporate governance at the Warsaw Stock Exchange: www.corp-gov.gpw.pl and on the corporate website: www.orlen.pl in the “Investor Relations” section dedicated to the Company’s shareholders under “Shareholder services & tools” in the “WSE Best Practice” tab. In mid-2010 the Warsaw Stock Exchange (WSE) reviewed the Code of Best Practice for WSE Listed Companies and adjusted it to make it compliant with the amendments introduced to the provisions of law, international guidelines and stakeholders’ expectations.
In 2010 PKN ORLEN applied all the corporate governance rules set out in both: the formerly applicable and updated Code of Best Practice for WSE Listed Companies.
The Company follows also those recommendations provided for in the “Code of Best Practice for WSE Listed Companies”, which are not mandatory. Thus, it undertakes a number of activities with a view to improve communication with its environment. In order to reach a wide range of recipients it applies both traditional and modern tools of communication with the capital market representatives. It organizes direct internet transmissions with simultaneous translation into English from media conferences following each significant event in the Company’s life, such as quarterly results publication, announcement of strategies, as well as from the PKN ORLEN General Meeting. Video records from the conference are stored on the Company’s website, thus, it is possible to view a selected past event.
PKN ORLEN has its corporate website, which is a reliable and useful source of information about the Company for the capital market representatives. The internet service contents are prepared in a transparent, fair and complete way so as to enable the investors and analysts to take decisions based on the information presented by the Company. The Company provides all the interested parties with equal access to the information published on the website. The investor relations section is maintained both in Polish and in English.
The PKN ORLEN website in its present form was launched at the turn of 2009/2010 under the current address: www.orlen.pl. The portal was developed with the use of new technology and contains also a new service for the Company’s shareholders and for the stock exchange investors and analysts. It contains a lot of modern tools and information on the Company, in line with the latest market standards.
One can find there, among others:
The investor relations section on the corporate website is divided into a few tabs to find all the current and periodical reports published by the Company as well as presentations prepared for material events in the Company with audio and video recording of such events.
There is also the WSE best practice tab on the website, in the investor relations section. One can find there the Company’s annual reports on complying with best practice rules and the “Code of Best Practice for WSE Listed Companies” as well as brief information on best practice applied by the Company and the rules for selecting an entity authorized to audit the financial statements.
Via the corporate website the dates of general meetings, draft resolutions and the whole set of documents presented to the shareholders at general meetings are all provided. The Company also ensures communication with its shareholders via a special Internet contact form related to general meetings.
On a regular basis the Company actively participates in the meetings with investors and analysts both in Poland and abroad. Conferences, individual and group meetings, and teleconferences are organized with stakeholders on the capital market. The Company’s representatives regularly go for the so-called roadshows – series of meetings with investors at their work place. For the capital market stakeholders interested in the Company’s operations, the so-called site visits are organized, i.e. visits of shareholders or analysts in the production plant, which allow them to get to know the Company specifics.
During the meetings with the capital market representatives, the representatives of PKN ORLEN provide information about the Parent Company, however, it is also possible to get feedback for the Company from the shareholders, investors or stock exchange analysts. Thanks to this feedback the Company, being aware of the information needs of its stakeholders, can develop and improve its relations with the capital market.
The Company is striving to broaden and diversify its investor base. Thus, it undertakes activities aimed to actively promote its business activity amongst prospective shareholders, also in new financial centres worldwide.
With a view to develop the forms and quality of communication with the capital market, the Company publishes on a quarterly basis the so-called “trading statement”, i.e. operational and financial estimates and expectations of operating profit (EBIT) trends, taking into account the impact of macroeconomic factors and significant one-offs on the operating profit (EBIT). These estimates are published a few weeks prior to the date of publication of the quarterly report. “Trading statements” allow for a fair building of consensus in respect of the Company’s forecasted financial results on the capital market prior to their publication. This report creates new standards in the area of investor relations. Its favourable reception confirms how important for PKN ORLEN an appropriate and timely communication with the market on the key topics for the investors is.
The care for communication with the capital market players was appreciated also in 2010 and reflected through the awards granted to the Company in the area of investor relations:
The Company’s system of internal control and risk management in the process of drawing up financial statements is implemented through:
In order to ensure that unified accounting standards are applied, the ORLEN Group companies have to follow, for the purpose of preparing the consolidated financial statements, the accounting policy adopted by PKN ORLEN, periodically updated to ensure that it complies with the applicable laws, specifically with the IFRS, the Accounting Act dated 29 September 1994 and the Ordinance of the Ministry of Finance dated 19 February 2009 on current and periodic information provided by issuers of securities. The Corporate Accounting Office monitors whether this obligation is fulfilled and conducts comprehensive analytical procedures supplemented with control activities, as well as develops instructions and guidelines on identified issues, requiring detailed explanations to ensure proper and uniform financial reporting principles.
The consolidated financial statements are drawn up based on reporting packages provided by the ORLEN Group companies which are reviewed in terms of their cohesion, completeness and continuity. Data required for the standalone financial statements is derived from accounting records kept in accordance with the PKN ORLEN procedures. The disclosures also cover additional information provided by individual organisational units of PKN ORLEN, which is also checked by the Corporate Accounting Office.
In order to reduce the risks relating to the process of drawing up financial statements on a current basis, they are quarterly checked by an auditor, i.e. more often than required under the applicable law. The financial statements for the 1st quarter, the half-year and the 3rd quarter of the year are reviewed, whereas the annual financial statement is subject to audit. The auditor presents the results of the reviews and audits to the Management Board and the Audit Committee of the Supervisory Board.
The Company has certain procedures to authorise the financial statements under which the periodical reports are submitted to the Management Board and, subsequently, forwarded to the Audit Committee of the Supervisory Board for their opinion. Once the opinion has been obtained from the Audit Committee and once the auditor has ended its review, the financial statements are approved by the Management Board for publication and subsequently forwarded by the Investor Relations Office to the appropriate capital market institutions and made public. Before the publication, the financial statements are treated as confidential by the Company and provided solely to persons involved in the preparation, control and approval process.
The Company has an Audit Department which has to ensure an independent and objective evaluation of the risk management and internal audit systems, and analyse business processes. The Department operates based on the annual audit plans approved by the Management Board and accepted by the Audit Committee of the Supervisory Board and the Supervisory Board itself. The Audit Department can also carry out ad hoc audits as ordered by the Company’s Supervisory Board or the Management Board.
In pursuit of the tasks and objectives set, the Audit Department provides recommendations as to the implementation of solutions and standards designed to mitigate the risk of PKN ORLEN not meeting the targets set, to improve the effectiveness of the internal control system and to increase the efficiency of business processes. Additionally, the Audit Department monitors the follow-up on its own recommendations as well as those given by the auditor as to the Company’s financial statements.
Twice a year the Audit Department draws up a report for the Management Board and the Audit Committee of the Supervisory Board on monitoring the recommendations, summarising the conclusions regarding the audit tasks performed, identified risks and information about the implementation status of the recommendations given.
PKN ORLEN shares are listed on the Warsaw Stock Exchange Main List in the continuous trading system and in WIG20, the biggest companies index, WIG index as well as the industry index – WIG fuels. Since 19 November 2009 PKN ORLEN shares have been listed in the index of companies involved in corporate social responsibility – Respect Index.
PKN ORLEN shares are listed also in the form of Global Depositary Receipts (GDR) on the London Stock Exchange. Depositary receipts are also traded in the USA on the OTC market.
The share capital of PKN ORLEN is divided into 427,709,061 ordinary bearer shares with a par value of PLN 1.25 each.
PKN ORLEN depositary receipts are lodged with The Bank of New York Mellon. The transaction unit on the London Stock Exchange is 1 GDR which accounts for two PKN ORLEN shares.
The ownership rights relating to PKN ORLEN shares are fully transferable.
Below is a list of PKN ORLEN’s shareholders holding a significant stake is presented, specifying the number of shares held, the percentage of their share in the Company’s share capital, the number of votes conferred by the shares held and their percentage share in the total number of votes at PKN ORLEN’s General Meeting.
The year 2010 saw two changes in the structure of shareholders with more than 5% in the Company’s share capital. The first one occurred on 5 February 2010 when Aviva Otwarty Fundusz Emerytalny Aviva BZ WBK acquired the Company’s shares representing 5.08% of the PKN ORLEN’ s share capital. Then, at the end of the year, on 23 November 2010, the Company was notified by ING Otwarty Fundusz Emerytalny (ING Open Pension Fund) that the fund reduced its share in the overall number of votes at the General Meeting of PKN ORLEN below 5%. ING Otwarty Fundusz Emerytalny maintained its over 5% shareholding in the Company’s share capital from 18 February 2009.
Shareholding structure in PKN ORLEN as at 1 January 2010
| Shareholders | Number of shares | Number of votes at General Meeting of PKN ORLEN | Share in total number of votes at General Meeting of PKN ORLEN | Percent of share capital of PKN ORLEN |
|---|---|---|---|---|
| State Treasury | 117.710.196 | 117.710.196 | 27,52% | 27,52% |
| ING Otwarty Fundusz Emerytalny* | 22.118.813 | 22.118.813 | 5,17% | 5,17% |
| Others | 287.880.052 | 287.880.052 | 67,31% | 67,31% |
| Total | 427.709.061 | 427.709.061 | 100,00% | 100,00% |
* in accordance with information received by the Company on 20 February 2009.
Shareholding structure in PKN ORLEN as at 31 December 2010
| Shareholders | Number of shares | Number of votes at General Meeting of PKN ORLEN | Share in total number of votes at General Meeting of PKN ORLEN | Percent of share capital of PKN ORLEN |
|---|---|---|---|---|
| State Treasury | 117.710.196 | 117.710.196 | 27,52% | 27,52% |
| Aviva Otwarty Fundusz Emerytalny Aviva BZ WBK** | 21.744.036 | 21.744.036 | 5,08% | 5,08% |
| Others | 288.254.829 | 288.254.829 | 67,40% | 67,40% |
| Total | 427.709.061 | 427.709.061 | 100,00% | 100,00% |
** in accordance with information received by the Company on 9 February 2010.
One PKN ORLEN share confers the right to one vote at the Company’s General Meeting.
As regards the voting right of particular shareholders, the Articles of Association state as follows:
The power referred to above includes also the right to request the disclosure of the number of votes held by the Company’s shareholder individually or together with other Company shareholders. The person that failed to perform or performed unduly the obligation to provide information referred to in this point, may exercise the voting right from one share exclusively until the breach of such obligation has been remedied and exercising the voting right by such person from other shares is ineffective,
The State Treasury is authorised to appoint and revoke one of the Supervisory Board members. Moreover, one of the PKN ORLEN Management Board members is appointed and revoked by the Supervisory Board at request of the minister in charge of State Treasury. In accordance with the applicable provisions of the Company’s Articles of Association, until the minister in charge of State Treasury or another minister exercises the rights from PKN ORLEN shares owned by the State Treasury under the generally applicable law, the appropriate minister can appoint one or two Observers for the Company, who will be authorised to monitor the Company’s activities, participate in the meetings of the Company’s authorities, review the Company’s documents, request reports and explanations, inspect the Company’s assets. Detailed rules regulating the Observers’ activity and their powers are set out in the General Meeting, Supervisory Board and Management Board Regulations. In accordance with the Act of 18 March 2010 on Specific Rights Vested in the Minister in Charge of State Treasury and The Exercise of Such Powers In Certain Capital Companies or Capital Groups Conducting Business Activities in the Electricity, Crude Oil and Gas Fuel Sectors (the “18 March 2010 Act on Specific Rights Vested In the Minister in Charge of State Treasury”), the Act of 3 June 2005 on Specific Powers Vested in the Minister in Charge of State Treasury and
Their Exercise in Capital Companies Significant for Public Order and Safety, which Act introduced the institution of the Observer in the Company, has expired. Thus, the Company’s Management Board proposed to the General Meeting that the provisions concerning the Observer be removed from the Company’s Articles of Association. The Annual General Meeting, on 25 June 2010, did not however express the consent to such change in the Company’s Articles of Association. While the above act was in force, nobody was appointed to perform the function of the Observer in the Company.
Additionally, specific rights vested in the State Treasury shareholders may also arise out of the commonly applicable provisions of law, especially the 18 March 2010 Act on Specific Rights Vested In the Minister In Charge of State Treasury. Pursuant to the above act, the Minister in charge of State Treasury may object against the resolution passed by the Company’s Management Board or any other legal action undertaken by the Company’s Management Board regarding the disposal of assets disclosed in the uniform list of facilities, installations, appliances and services comprised in the critical infrastructure, referred to in article 5b section 7 item 1 of the Act of 26 April 2007 on Crisis Management, which pose a real threat to the functioning, business continuity and integrity of the critical infrastructure. The Minister In Charge of State Treasury may also object to the Company’s body passing resolution on:
In accordance with the 18 March 2010 Act on Specific Rights Vested In the Minister In Charge of State Treasury , the Company’s Management Board, in agreement with the Minister in charge of State Treasury and the Director of the Government Centre for Security is authorized to appoint and revoke a plenipotentiary in charge of the protection of critical infrastructure in the Company. The scope of the plenipotentiary’s tasks includes providing the Minister in charge of State Treasury with information on the Company’s authorities having undertaken the above specified legal actions, providing the information on the critical infrastructure to the Director of the Government Centre for Security on request, transferring and collecting information on any threats to the critical infrastructure in cooperation with the Director of the Government Centre for Security.
Any amendment to PKN ORLEN’s Articles of Association requires a resolution of the General Meeting of Shareholders and has to be entered in the companies register. The resolution of the General Meeting of Shareholders to amend the Company’s Articles of Association is adopted by three quarters of votes. The General Meeting may authorise the Supervisory Board to formulate the uniform text of the Articles of Association or make other editorial changes as set out in the resolution passed by the General Meeting.
Once the amendments to the Articles of Association are entered in the companies register, PKN ORLEN publishes a relevant current report.
Proceedings and powers of PKN ORLEN’s General Meeting of Shareholders are regulated in the Articles of Association and the Regulations of PKN ORLEN’s General Meeting. The documents can be found on the PKN ORLEN’s website: www.orlen.pl in the “Company” and “Investor relations” sections in the “General Meeting” tab.
The rules for convening and organising the General Meetings of Shareholders were materially amended by the General Meeting of Shareholders of PKN ORLEN on 15 July 2009. The provisions of corporate documents were then adjusted to comply with the provisions of law commonly applicable in this respect.
The General Meeting is to be convened in the manner and under the rules stipulated in the generally applicable provisions of law. The General Meeting is convened through placing an announcement on the Company’s website and by delivering a current report to the capital market institutions and making it public. The announcement should be placed at least 26 days before the scheduled date of the General Meeting.
The Ordinary General Meeting of Shareholders should be held no later than within six months from the end of every financial year.
The Extraordinary General Meeting of Shareholders is convened by the Management Board on its own initiative, on the motion of the Supervisory Board or on the motion of a shareholder or shareholders representing no less than one twentieth of the Company’s share capital, within fourteen days from filing the motion. The motion for the General Meeting to be held should specify the issues for the agenda or include draft resolution on the proposed agenda. The Supervisory Board may convene the Extraordinary General Meeting if the Supervisory Board recognises that it is advisable to do so. The Supervisory Board may also convene the Extraordinary General Meeting if the Management Board fails to do so within two weeks following the submission of the relevant request by the Supervisory Board. The Extraordinary General Meeting may also be convened by the shareholders representing at least one half of the share capital or at least one half of the overall number of votes in the Company.
The shareholder or shareholders representing no less than one twentieth of the Company’s share capital may request that specific issues be placed on the agenda of the nearest General Meeting under the rules stipulated in the generally applicable provisions of law.
All the materials to be presented to the shareholders at the General Meeting, specifically draft resolutions to be adopted by the General Meeting and other important materials are made available by the Company following the day when the General Meeting has been convened in the Company’s seat in Płock and in the Warsaw office, as well as on the corporate website www.orlen.pl.
Regardless the requirements set out in the generally applicable law on publishing draft resolutions to be presented at the General Meeting on the Company’s website as soon as from the day when the General Meeting has been convened, the Company is obliged to provide draft resolutions in the form of a current report at least 26 days before the date the General Meeting is to be held in order to enable the shareholders to review and assess them.
The General Meetings of PKN ORLEN are held in the Company’s seat in Plock, however, they can also be held in Warsaw.
For the shareholders who cannot participate in the General Meeting in person, the Company arranges for an internet broadcast of the Meeting and offers simultaneous translation into English.
In accordance with the General Meeting Regulations the cancellation and the change in the date of the General Meeting should be effected forthwith once the requirement for the cancellation and the change in the date has occurred but no later than seven days prior to the day when the General Meeting is to be held. If the cancellation and change in the date of the General Meeting cannot be effected within the deadline specified above, such a General Meeting should be held unless it is impossible or excessively hindered due to the circumstances. In such case, the cancellation and change in the date of the General Meeting may be effected at any time prior to the day when the General Meeting is to be held. The cancellation and the change in the date of the General Meeting is effected by announcement placed on the Company’s website together with the reasons and complying with other legal requirements. Only the body or the person to have convened the General Meeting is competent to cancel the same. The General Meeting with the agenda containing specific issues put therein at the request of eligible entities, or which was convened at such a request, may be cancelled only with consent of such requesting entities.
The General Meeting of Shareholders is especially authorised to:
Purchase of real estate, perpetual usufruct or interest in real estate, regardless of its value, as well as disposal of real estate, perpetual usufruct or interest in real estate where net book value does not exceed one twentieth of the Company’s share capital does not require a consent resolution of the General Meeting of Shareholders.
Unless stated otherwise in the Commercial Code and the Articles of Association, resolutions of the General Meeting of Shareholders are passed with an absolute majority of votes cast, while votes cast mean votes “for”, “against” and “abstain.”
Resolutions of the General Meeting of Shareholders regarding preferred shares and the Company’s merger as a result of all the Company’s assets being transferred to another company, winding-up of the Company (including winding-up as a result of the Company’s seat or business operations center being transferred abroad), liquidation of the Company, its restructuring and decrease in the share capital by redemption of some shares without the capital being simultaneously increased are passed with a majority of 90% of votes cast.
The General Meeting’s resolution to renounce the examination of an issue placed on the agenda may be adopted only in case when there are substantial reasons to do so. The resolutions to remove or not to consider an item placed on the agenda on the motion of the shareholders require the majority of 75% of votes cast provided that the shareholders present at the General Meeting who requested this issue be placed on the agenda previously agreed to the issue being removed from the agenda or not considered at all.
One PKN ORLEN share confers the right to one vote at the Company’s General Meeting. The voting right of the Company’s shareholders is restricted to the extent that at the General Meeting of Shareholders none of them (but for those specified in the Company’s Articles of Association) can exercise more than 10% of the total votes existing in the Company as at the date the General Meeting of Shareholders is held. The detailed rules for exercising the voting right have been described in chapter IV of this report.
The shareholders can participate in the General Meeting and exercise their voting rights in person or by proxy.
In accordance with Article 406(1) § 1 of the Polish Commercial Code, the right to participate in the Company’s General Meeting is vested only in the persons that are the Company’s shareholders sixteen days before the date of the General Meeting (date of registration in the General Meeting).
At the request of the shareholder, filed no earlier than the announcement of convening the General Meeting has been published and no later than on the working day following the day when the participation in the General Meeting has been registered, the entity where the securities account is kept issues a personal certificate of entitlement to attend the General Meeting. This certificate includes:
At the request of the shareholder, the certificate should specify part or all of shares registered in his/her securities account.
The list of shareholders eligible to participate in the General Meeting is compiled by the Company on the basis of a specification prepared by the entity maintaining the securities deposit in accordance with the provisions of the Act on Trading in Financial Instruments dated 29 July 2005 (at present The National Depository for Securities, KDPW). KDPW prepares the list of entities entitled to participate in the General Meeting on the basis of specifications provided no later than twelve days prior to the date of the General Meeting date by the eligible entities. The lists submitted to KDPW are compiled on the basis of issued certificates of entitlement to participate in the General Meeting. KDPW provides such a list for the company’s review no later than a week prior to the date of the General Meeting.
The General Meeting may be attended by the members of the Management Board and the Supervisory Board, who can take the floor, even if they are not shareholders, without any invitations being sent. An Ordinary General Meeting of Shareholders can be attended by the members of the Management Board and the Supervisory Board whose mandates have expired before the date of the General Meeting and who exercised their functions in the financial year for which the Management Board report and the financial statements are to be approved by the Ordinary General Meeting of Shareholders.
General Meetings of Shareholders can also be attended by other persons invited by an authority convening the General Meeting or allowed to enter the meeting room by the Chairman, specifically, certified auditors, legal and financial advisers or the Company’s employees. PKN ORLEN, as far as admissible under the applicable law and with due consideration of the Company’s interests, allows media representatives to attend the General Meetings. The Management Board ensures that each General Meeting is attended by an independent expert specialised in commercial law.
Members of the Management Board and the Supervisory Board and the Company’s certified auditor provide the Meeting participants with explanations and information about the Company, within the scope of their authorisation and to the extent required for the issues discussed by the General Meeting to be resolved. Questions posed by the General Meeting participants are answered in view of the fact that PKN ORLEN, as a public company, fulfills its reporting obligations in a manner specified in the applicable capital market regulations and the information cannot be provided otherwise than in conformity with these regulations.
General Meetings can be attended by an Observer appointed by the minister in charge of State Treasury affairs. Until the publication of this report, the minister in charge of State Treasury affairs has not appointed any Observer for PKN ORLEN and, as stated in chapter IV of this report, the Act of 3 June 2005 on Specific Powers Vested in the State Treasury and Their Exercise in Jointstock and limited-liability Companies of Material Significance for Public Order or Public Security, which established the institution of Observer in the Company, has expired.
In accordance with the Act of 18 March 2010 on Specific Powers Vested in the Minister in Charge of State Treasury, the right to request from the Company’s authorities, including the General Meeting, any documents, information and explanations relating to the issues listed in the Act (i.e. concerning the Company’s property disclosed in a uniform list of facilities, installations, devices and services comprised by the critical infrastructure referred to in the Act of 26 April 2007 on Crisis Management) is vested in charge of critical infrastructure protection.
PKN ORLEN pays special attention to activities facilitating the Company’s communication with the external environment. For shareholders who cannot participate in the General Meeting in person, the Company arranges for an internet broadcast of the Meeting and offers simultaneous translation into English.
A special section dedicated to the Company’s General Meetings is included on the corporate PKN ORLEN website where information about the planned shareholders’ meetings is provided along with material relating to such meetings, archive materials from the meetings held, including texts of resolutions adopted and video files with internet broadcasts of the General Meetings.
The General Meeting of the Company was held, on 25 June 2010. This was the Ordinary General Meeting of PKN ORLEN.
During the debates of the Ordinary General Meeting the shareholders approved the annual reports on the operations of the Company and the ORLEN Capital Group as well as the financial statements for 2009. They also resolved on confirming the performance of duties by all the Supervisory and Management Board members.
The General Meeting resolved also to allocate the Company’s entire profit generated in 2009 to the Company’s reserve capital.
The debates concerned included amendments to the PKN ORLEN’s Articles of Association relating, among others, to the adjustment of current provisions of PKN ORLEN’s Articles of Association to commonly applicable provisions of law. Moreover, the provisions of the Articles of Association relating to the Company’s objects were extended to include two new areas, i.e. retail sales of alcoholic and non-alcoholic beverages carried on in specialised stores and the publishing of newspapers.
The General Meeting also consented to the disposal, lease or encumbrance with any other third party rights, of a few fuel stations as organized parts of the Company.
At the meeting last year, the Supervisory Board members for the new term of office were appointed. Mr Maciej Mataczyński was appointed to perform the function of Chairman, and Ms Angelina Sarota, Mr Grzegorz Borowiec, Mr Artur Gabor, Mr Marek Karabuła, Mr Krzysztof Kołach, Mr Leszek Jerzy Pawłowicz and Mr Piotr Wielowieyski – to the function of Supervisory Board Members. On the same day the State Treasury appointed also Mr Janusz Zieliński to the PKN ORLEN Supervisory Board.
In 2010 the following persons were acting as Members of the Management Board in PKN ORLEN:
| Name and surname | Position held in PKN ORLEN’s Management Board |
|---|---|
| Dariusz Jacek Krawiec | President of the Management Board, Chief Executive Officer as of 18 September 2008 Vice-President of the Management Board in charge of Crude Oil and Capital Group as of 17 June 2008. Vice- President of the Management Board as of 7 June 2008 |
| Sławomir Jędrzejczyk | Vice-President of the Management Board, Chief Financial Officer as of 23 September 2008 Vice-President of the Management Board as of 18 September 2008 Member of the Management Board, Chief Financial Officer as of 17 June 2008 Member of the Management Board as of 7 June 2008 |
| Wojciech Kotlarek | Member of the Management Board in charge of Sales as of 17 June 2008 Member of the Management Board as of 7 June 2008 |
| Krystian Pater | Member of the Management Board in charge of Refinery as of 17 June 2008 Member of the Management Board as of 7 June 2008 Member of the Management Board in charge of Production from 20 March 2007 to 6 June 2008 |
| Marek Serafin | Member of the Management Board in charge of Petrochemistry as of 17 June 2008 Member of the Management Board as of 7 June 2008 |
In 2010 the company’s business was monitored by the Supervisory Board in the following composition:
| Name and surname | Position held in PKN ORLEN’s Supervisory Board |
|---|---|
| Maciej Mataczyński | Chairman of the Supervisory Board as of 7 February 2008 |
| Marek Karabuła | Vice-Chairman of the Supervisory Board from 15 February 2008 to 26 June 2010 and as of 20 July 2010 Member of the Supervisory Board as of 7 February 2008 |
| Grzegorz Borowiec | Member of the Supervisory Board as of 7 February 2008 |
| Krzysztof Kołach | Member of the Supervisory Board as of 7 February 2008 |
| Jarosław Rocławski | Member of the Supervisory Board from 13 June 2008 to 25 June 2010 |
| Piotr Wielowieyski | Member of the Supervisory Board as of 7 February 2008 |
| Angelina Sarota | Secretary of the Supervisory Board from 13 June 2008 to 25 June 2010 and as of 20 July 2010 Member of the Supervisory Board as of 13 June 2008 |
| Janusz Zieliński | Member of the Supervisory Board as of 6 July 2007 |
| Artur Gabor | Member of the Supervisory Board as of 25 June 2010 |
| Leszek Jerzy Pawłowicz | Member of the Supervisory Board as of 25 June 2010 |
| Name and surname | osition held in PKN ORLEN’s Supervisory Board Committee |
|---|---|
| Audit Committee | |
| from 20 July 2010 to 31 December 2010 | |
| Artur Gabor | Committee Chairman, Independent Member of the Supervisory Board |
| Marek Karabuła | Committee Member |
| Leszek Jerzy Pawłowicz | Committee Member, Independent Member of the Supervisory Board |
| Piotr Wielowieyski | Committee Member, Independent Member of the Supervisory Board |
| Janusz Zieliński | Committee Member, Independent Member of the Supervisory Board |
| from 1 January 2010 to 25 June 2010 | |
| Piotr Wielowieyski | Committee Chairman, Independent Member of the Supervisory Board |
| Leszek Marek Karabuła | Committee Member |
| Janusz Zieliński | Committee Member, Independent Member of the Supervisory Board |
| Corporate Governance Committee | |
| from 20 July 2010 to 31 December 2010 | |
| Angelina Sarota | Committee Chairman |
| Grzegorz Borowiec | Committee Member |
| Maciej Mataczyński | Committee Member |
| from 1 January 2010 to 25 June 2010 | |
| Grzegorz Borowiec | Committee Chairman |
| Maciej Mataczyński | Committee Member |
| Angelina Sarota | Committee Member |
| Strategy and Development Committee | |
| from 20 July 2010 to 31 December 2010 | |
| Marek Karabuła | Committee Chairman |
| Krzysztof Kołach | Committee Member, Independent Member of the Supervisory Board |
| Leszek Jerzy Pawłowicz | Committee Member, Independent Member of the Supervisory Board |
| Piotr Wielowieyski | Committee Member, Independent Member of the Supervisory Board |
| Janusz Zieliński | Committee Member, Independent Member of the Supervisory Board |
| from 1 January 2010 to 25 June 2010 | |
| Marek Karabuła | Committee Chairman |
| Krzysztof Kołach | Committee Member, Independent Member of the Supervisory Board |
| Piotr Wielowieyski | Committee Member, Independent Member of the Supervisory Board |
| Janusz Zieliński | Committee Member, Independent Member of the Supervisory Board |
| Nomination and Remuneration Committee | |
| from 20 July 2010 to 31 December 2010 | |
| Maciej Mataczyński | Committee Chairman |
| Grzegorz Borowiec | Committee Member |
| Artur Gabor | Committee Member, Independent Member of the Supervisory Board |
| Krzysztof Kołach | Committee Member, Independent Member of the Supervisory Board |
| from 1 January 2010 to 25 June 2010 | |
| Maciej Mataczyński | Committee Chairman |
| Grzegorz Borowiec | Committee Member |
| Krzysztof Kołach | Committee Member, Independent Member of the Supervisory Board |
| Piotr Wielowieyski | Committee Member, Independent Member of the Supervisory Board |
| Jarosław Rocławski | Committee Member |
Apart from generally applicable laws, the rules of conduct for PKN ORLEN’s Supervisory Board, its Committees and the Management Board are regulated in PKN ORLEN’s Articles of Association and the Supervisory Board and the Management Board Regulations, respectively. The proceedings of the management and supervisory authorities in PKN ORLEN are also subject to the corporate governance principles set out by the Warsaw Stock Exchange.
Appointing and recalling members of PKN ORLEN’s Supervisory Board
Members of PKN ORLEN’s Supervisory Board are appointed for a common term of office, ending on the day when the Ordinary General Meeting has been held, approving the financial statements for the whole second financial year of such term of office. Individual members of the Supervisory Board and the entire Supervisory Board can be recalled at any time before the end of the term of office. The General Meeting of PKN ORLEN appoints the Chairman of the Supervisory Board, whereas the vicechairman and the secretary are appointed by the Supervisory Board from amongst the other members of the Board.
PKN ORLEN’s Supervisory Board is composed of six to nine members. The State Treasury is authorised to appoint and recall one member of the Supervisory Board, other members of the Supervisory Board are appointed and recalled by the General Meeting of Shareholders. On 25 June 2010 the Annual General Meeting of PKN ORLEN appointed Supervisory Board Members to a new term of office.
Pursuant to the Articles of Association of PKN ORLEN, at least two members of the Supervisory Board have to comply with the following independency provisions (the so-called independent members of the Supervisory Board):
Independent members of the Supervisory Board, before being appointed to the Supervisory Board, should submit to the Company a written statement confirming that they comply with the above mentioned provisions. If the said provisions are not met, a member of the Supervisory Board is obliged to immediately notify the Company thereof. The Company informs the shareholders about the current number of independent members of the Supervisory Board.
If the number of independent members of the Supervisory Board is less than two, the Company’s Management Board is obliged to immediately convene a General Meeting of Shareholders and put an issue concerning changes in the composition of the Supervisory Board on the agenda of the General Meeting. The Supervisory Board acts in its current composition until the changes in the composition of the Supervisory Board are made, i.e. the number of independent members is adjusted to the statutory requirements set in the Articles of Association whereas the provisions of § 8 item 9 point a of the Articles of Association (containing a list of resolutions which must be passed with consent of at least one half of independent Supervisory Board members) do not apply.
Organisation of PKN ORLEN’s Supervisory Board’s operations
Sessions of the Supervisory Board are held when necessary, however, not less frequently than once every two months. Moreover, as stated in the Company’s Articles of Association, a Supervisory Board session should be convened following a written request of a shareholder or shareholders representing at least one tenth of the share capital, the Management Board or a member of the Supervisory Board. In such cases the session should be convened within two weeks from the receipt of such request and should be held no later than within three weeks of such request being received. If a Supervisory Board session is not convened within two weeks of the request being filed, the requestor can call the session by himself through a written notice specifying the time, venue and the proposed agenda sent to the members of the Supervisory Board, at least seven days before the date of the session.
Sessions of the Supervisory Board can only take place when all its members have been properly invited. Sessions can also be held without the meeting being formally convened if all the Supervisory Board members are present and grant their consent to the session being held and certain issues being put on the agenda.
The Supervisory Board can pass resolutions if at least half of its members participate in the session. Subject to the provisions of the Commercial Code, a resolution of the Supervisory Board can be passed in writing or with the use of direct means of remote communication. Resolutions of the Supervisory Board are passed with an absolute majority of the votes cast, in the presence of at least half of the members of the Supervisory Board, while the votes cast mean votes “for”, “against” and “abstain.” This does not apply to any members of the Management Board or the entire Management Board being recalled or suspended during the term of their office when at least two thirds of all the Supervisory Board members have to vote in favour of the resolution.
Passing resolutions on the following matters:
With a view to fulfilling its duties, the Supervisory Board can review all the Company documents, demand reports and explanations from the Management Board and the employees, and inspect the Company’s assets.
Competence of PKN ORLEN’s Supervisory Board
The Supervisory Board of PKN ORLEN exercises permanent supervision over the Company’s operations, in all fields of its activity, specifically, the Supervisory Board is authorised to act as set out in the Commercial Code and the Company’s Articles of Association. The Supervisory Board takes relevant steps required to regularly obtain exhaustive information from the Management Board about all the material issues relating to of PKN ORLEN’s operations and the risk related to the business operations and risk management methods applied.
Pursuant to the Articles of Association, the Supervisory Board is also authorised to:
The Articles of Association also stipulate that the consent of PKN ORLEN’s Supervisory Board is required to:
If the Supervisory Board withholds its consent to any of the above activities being taken, the Management Board can address the General Meeting of Shareholders to adopt a resolution to approve the relevant activity. Additionally, following a request of at least two members, the Supervisory Board is obliged to consider undertaking supervisory actions specified in such request.
Given the best practice standards and in order to enable the shareholders to make a true and fair view of the Company, the Supervisory Board of PKN ORLEN is in charge of the additional duty to submit to the General Meeting of the Company a concise assessment of PKN ORLEN’s standing. The assessment is submitted annually, before the date of the Company’s General Meeting to allow time for PKN ORLEN shareholders to get acquainted with it.
Committees of PKN ORLEN’s Supervisory Board
The Supervisory Board of PKN ORLEN may elect permanent or ad hoc committees which act as its collective advisory and opinion making bodies. The following permanent Committees operate within the Supervisory Board of PKN ORLEN: Audit Committee, Strategy & Development Committee, Nomination & Remuneration Committee and Corporate Governance Committee. The said Committees report annually to the Supervisory Board on its activities.
The members of all Committees are appointed by the Supervisory Board from amongst its members and the Committee itself chooses its Chairman. The Committees consist of between 3 to 5 members. At least two members of Audit Committee are independent members and at least one has skills and expertise in the field of accounting or finance.
The Committee meetings are convened by the Committee chairman and, if he/she is either absent or unable to perform his/her duties, by the chairman of the Supervisory Board or another member of the Supervisory Board indicated by the chairman, who invites all the Committee Members to the meeting and notifies all the other Supervisory Board members of the meeting. All the members of the Supervisory Board can participate in the Committee meetings. The Committee chairman can invite to the Committee meetings members of the Management Board, the Company’s employees and other persons whose participation in the meeting is expedient to carry out the Committee tasks.
The Committee resolutions are passed with a simple majority of the votes cast. In the event of a tie, the Committee chairman has the casting vote.
Audit Committee
The task of the Audit Committee is to advise the Supervisory Board of PKN ORLEN on the issues related to the proper implementation of budget and financial reporting rules and internal control within the Company and the ORLEN Group, as well as cooperation with the Company’s certified auditors. In particular, the tasks of the Committee are: to monitor the work of the Company’s certified auditors and submit recommendations to the Supervisory Board as to the selection and fee of the Company’s certified auditors, to discuss with the Company’s certified auditors, prior to commencement of audit of each annual financial statements, the nature and scope of the audit, and to monitor co-ordination of work between the Company’s certified auditors, to review interim and annual financial statements of the Company (consolidated and unconsolidated), with particular focus on:
Furthermore, the tasks of the Audit Committee include:
The Audit Committee meetings are held at least once per quarter, each time prior to the publication of the financial statements by the Company.
Corporate Governance Committee
The task of the Corporate Governance Committee is to evaluate the implementation of the corporate governance principles, to submit recommendations to the Supervisory Board as to the implementation of the corporate governance principles, issue opinions on normative corporate governance documents, evaluate reports concerning compliance with the corporate governance principles prepared for the Warsaw Stock Exchange, issue opinions on the draft amendments of the Company’s corporate documents and to develop such drafts in case of own documents of the Supervisory Board, to monitor the management of the Company in terms of legal and regulatory compliance, including the compliance with the PKN ORLEN’s Code of Ethics and the corporate governance principles.
Strategy and Development Committee
The task of the Strategy and Development Committee is to issue opinions and submit recommendations to the Supervisory Board on planned investments and divestments which exert a material impact on the Company’s assets. In particular, the Committee assesses the effect of planned and conducted already implemented investments and divestments on the form of the Company’s assets, evaluates the activities, contracts, letters of intent and other documents relating to the actions aimed at acquisition, sale, encumbrance or any other disposal of the Company’s material assets, issues opinions on any strategic documents which the Management Board submits to the Supervisory Board, issues opinions on the Company’s development strategy, including long-term financial plans.
Nomination and Remuneration Committee
The task of the Nomination and Remuneration Committee is to help to attain the strategic goals of the Company by providing the Supervisory Board with opinions and motions on how to shape the management structure, with regard to organisational solutions, remuneration schemes and selection of the staff with the skills required to ensure the Company’s success. In particular, the tasks of the Committee include: to initiate and issue opinions on the solutions in the area of Management Board members nomination system, to issue opinions on the solutions proposed by the Management Board in the area of the Company’s management system, aimed at ensuring efficiency, integrity and safety of the Company’s management, to periodically review and recommend the rules for determining incentive schemes to the Management Board members and top executives, with a view to the Company’s interest, to periodically review the remuneration system applicable to Management Board members and managerial staff directly reporting to the Management Board members, including managerial contracts and incentive schemes and to submit to the Supervisory Board the proposals how to shape them in the context of the Company’s strategic goal attainment, to submit to the Supervisory Board opinions on the rationale behind performance-driven remuneration,in the context of evaluating the degree to which the Company’s specified tasks and goals are met, to assess the Company’s human resources management system.
The PKN ORLEN Management Board’s principal objective is to realise the Company’s interest, which is understood as building the value of its assets entrusted by its shareholders, with due respect for the rights and interests of the parties other than the shareholders, involved in the Company operations, especially creditors and employees.
The Management Board of PKN ORLEN ensures transparency and efficiency of the Company’s management system, and guarantees that the Company’s affairs will be handled in accordance with applicable law and good business practice.
Appointing and recalling PKN ORLEN’s Management Board
The Management Board of PKN ORLEN consists of five to nine members, including the President, Vice-Presidents and others members of the Management Board. Members of the Management Board are appointed and recalled by the Supervisory Board. One member of the Management Board is appointed and recalled by the Supervisory Board upon the request of the minister in charge of State Treasury.
The term of office of the Management Board members is a joint term of office, ending on the day when the Annual General Meeting has been held, approving the financial statements for the whole second financial year of such term of office. So determined joint term of office is assumed to commence on 7 June 2008.
The President, Vice-Presidents, and other members of the Management Board may be suspended from duty for significant reasons by the Supervisory Board.
Should the Management Board President be suspended from duty or his/her mandate expires before the end of the term of office, all his/her powers, except for the right to the casting vote referred to in § 9 sec. 5 item 2 of the Articles of Association, are to be executed by the person appointed by the resolution of the Supervisory Board acting as President of the Management Board until the new Management Board President is appointed or the current one is restored to his/her position.
Organisation of PKN ORLEN’s Management Board activity
Meetings of the Management Board are held when necessary, however, not less frequently than once every two weeks. Each member of the Management Board may request in writing for a Management Board meeting to be convened or certain issues to be placed on the agenda. The request should contain the proposed agenda and the justification for the request. The meeting should be held within seven days of the request being filed.
The meeting of the Management Board is convened by the President who manages the activity of the Management Board and has to fix the date, venue and the agenda of the meeting. In exceptional cases the meeting of the Management Board may be convened by the Vice-President or two members of the Management Board. The meeting can also be held without being formally convened if all the Management Board members are present and none of them has objected to the meeting being held or any proposed issues being put on the agenda.
Invited Company employees, advisers and other persons can attend the meeting with the consent of the person chairing the meeting of the Management Board.
Meetings of the Management Board are held in the Company’s seat in Płock or in the Company’s Headquarters in Warsaw. The person convening the meeting may, however, determine another venue for the meeting to be held.
The Management Board adopts resolutions at the meeting. For a resolution to be effective the scheduled meeting has to be notified to all the members of the Management Board and at least one half of the Management Board members have to be present at the meeting. The Management Board resolutions are passed with a simple majority of votes (in the event of a voting deadlock, the President of the Management Board has the casting vote) provided that for resolutions to grant a procuration, unanimity of all members of the Management Board is required. A Management Board member who voted against a resolution that was adopted may communicate its dissenting opinion, however, such communication has to be provided with the reasoning.
Resolutions are adopted in an open vote. A secret ballot may be ordered at request of each member of the Management Board. Resolutions are signed by all members of the Management Board who were present at the Management Board meeting on which the resolution was adopted. The resolution is also signed by the member of the Management Board who filed a dissenting opinion, with a note: “dissenting opinion” or “votum separatum”.
Competences of PKN ORLEN’s Management Board
The Management Board has to handle all the affairs of PKN ORLEN which are not reserved to be considered by other authorities of the Company under the provisions of the Commercial Code or the Articles of Association. All the members of the Management Board are obliged and authorised to handle the affairs of PKN ORLEN.
All the maters going beyond the ordinary course of business are subject to resolutions of the Management Board, however, the consent of the Management Board is not required to carry out an activity being an integral part of another activity which has already been approved by the Management Board unless the resolution of the Management Board provides otherwise. Activities falling within the scope of the ordinary course of business are activities related to fuels trading within the meaning of the Company’s Articles of Association (i.e. crude oil, petroleum products, biocomponents, biofuels and other fuels, including natural gas, industrial gas and fuel gas), and any other activities not specified in the Management Board Regulations. A resolution of the Management Board is required, among others to:
The Management Board has to regularly provide the Supervisory Board with exhaustive information on all aspects of PKN ORLEN’s business operations and the risks related to such operations as well as the methods of managing such risks. Additionally, the Management Board has to draw up and adopt annual and long-term financial plans and the Company development strategy in the form, to the extent and by the deadlines set by the Supervisory Board. The Management Board of PKN ORLEN has also to draw up and submit to the Supervisory Board the annual financial statements of PKN ORLEN and the annual financial statements of the ORLEN Group for the previous financial year.
The remuneration for the Supervisory Board Members is determined by the Company’s General Meeting.
The remuneration for the Management Board Members is determined by the Supervisory Board. As part of the Supervisory Board, the Nomination & Remuneration Committee operates whose tasks, among others, include:
The main components of the Management Board Members remuneration system include:
Additional benefits for the Management Board Members:
In 2010 the ORLEN Group’s key executive personnel was subject to the annual MBO bonus system. The regulations applicable to PKN ORLEN Management Board, executive directors of PKN ORLEN, management boards of the PKN ORLEN Group and other key positions in the Group have certain common features. The persons subject to the above mentioned systems are remunerated for the accomplishment of individual targets set at the beginning of the bonus period by the Supervisory Board for the Management Board Members and by the Management Board Members for the key executive personnel. The targets set are qualitative or quantitative (measurable) and are accounted for following the end of the year for which they were set, based on the rules adopted in the applicable Bonus System Regulations. The bonus systems are structured in a way so as to promote the cooperation between individual employees in view to achieve the best possible results at PKN ORLEN and ORLEN Group level.
In 2010 new MBO bonus standards were developed and approved for the senior managerial personnel in the ORLEN Group to be in force as of 2011. The main goal for implementation of the changes is to match the bonus system with PKN ORLEN Management Board’s goals and to increase top management responsibility for ORLEN Group results.
ORLEN Group's brands
