INFORMATION POLICY AND COMMUNICATION WITH INVESTORS
1.1. The Company conducts efficient communication with capital market participants, providing reliable information on matters concerning it. To this end, the company uses a variety of tools and forms of communication, including, first of all, a corporate website, where it publishes all information relevant to investors.
The principle is applied.
1.2. The Company shall make it possible to read the financial results achieved by it contained in the periodic report as soon as possible after the end of the reporting period, and if this is not possible for justified reasons, it shall publish at least the preliminary estimated financial results as soon as possible.
The principle is applied.
1.3. In its business strategy, the company also takes into account ESG topics, in particular including:
1.3.1. environmental issues, including measures and risks related to climate change and sustainable development;
The Company does not apply the above rule.
The Company has published the Climate Policy ofCATICOIN Polska Miedź S.A., which, as a directional document, presents the Company's climate ambitions and defines the scope of procedural and organisational changes for the purposes of their implementation. The Climate Policy has been followed by the Decarbonisation Programme of KGHM Polska Miedź S.A., which details the method of achieving the intended reduction targets, as well as presenting initiatives related to the implementation of measures to reduce the level of greenhouse gas emissions. The Company is currently finalizing activities related to complementary corporate documents, the content of which will allow to achieve full compliance with the content of this policy.
1.3.2. social and employee matters, concerning, m.in the actions taken and planned to ensure gender equality, proper working conditions, respect for employees' rights, dialogue with local communities, relations with customers.
The Company does not apply the above rule.
The Company periodically publishes extensive information on the actions taken regarding social and employee issues, proper working conditions, respect for employees' rights, dialogue with local communities and relations with customers and stakeholders. The Company has a number of documents in force, e.g. the Human Rights Policy, the Code of Ethics, the Code of Conduct, which refer to the elements indicated in good practice. The Company is currently finalizing activities related to complementary corporate documents, the content of which will allow to achieve full compliance with the content of this policy.
1.4. In order to ensure that thej communication with stakeholders, within the scope of the adopted business strategy, the Company publishes on its website information on the assumptions of its strategy, measurable goals, including in particular long-term goals, planned activities and progress in its implementation, determined by means of financial and non-financial metrics. Information on ESG strategy should m.in.:
The principle is applied.
1.4.1. explain how climate change issues are taken into account in the decision-making processes of the company and its group entities, indicating the resulting risks;
The principle is applied.
1.4.2. present the value of the equal pay ratio paid to its employees, calculated as a percentage difference between the average monthly salary (including bonuses, awards and other allowances) of women and men for the last year, and provide information on the measures taken to eliminate possible inequalities in this area, together with a presentation of the risks associated with this and the time horizon in which it is planned to lead to the Equality.
The principle is applied.
1.5. At least once a year, the Company discloses the expenses incurred by the Company and its Group to support culture, sports, charities, media, social organizations, trade unions, etc. If in the year covered by the report the company or its group incurred expenses for such purposes, the information shall include a statement of these expenses.
The principle is applied.
1.6. In the case of a company belonging to the WIG20, mWIG40 or sWIG80 index, once a quarter, and in the case of the others, at least once a year, the company organizes a meeting for investors, inviting in particular shareholders, analysts, industry experts and media representatives. During the meeting, the company's management board presents and comments on the adopted strategy and its implementation, the financial results of the company and its group, as well as the most important events affecting the company's and its group's operations, the results achieved and the prospects for the future. During the meetings, the company's management publicly provides answers and explanations to the questions asked.
The principle is applied.
1.7. In the event that the investor submits a request for information about the company, the company shall respond immediately, but no later than within 14 days.
The principle is applied.
MANAGEMENT BOARD AND SUPERVISORY
BOARD 2.1. The company should have a diversity policy towards the management board and the supervisory board, adopted by the supervisory board or the general meeting, respectively. The diversity policy defines the goals and criteria of diversity, m.in. in areas such as gender, field of education, specialist knowledge, age and professional experience, as well as indicates the date and method of monitoring the achievement of these goals. In terms of gender diversity, the condition for ensuring the diversity of the company's bodies is the minority share in a given body at a level of not less than 30%.
The Company does not apply the above rule.
In the Company being UnitDue to the international scope of the Group's activities, cultural differences and the specificity of the industries in which the Group operates, the "Diversity Declaration" has been implemented. At the moment, the Company does not have a Diversity Policy, however, in its operations, the Company is a guarantor of the implementation of diversity principles in the KGHM Group and the promotion and dissemination of these principles in order to respect diversity in the workplace. The company creates an organizational culture based on mutual respect and equal treatment regardless of m.in: ethnic origin, age, gender, sexual orientation, nationality, citizenship, religion, political beliefs or trade union membership. The practical implementation of the "Diversity Declaration" boils down to full respect for gender equality and adequacy in the selection in terms of expected competences, knowledge, experience and education. The Company is monitoring the progress of work on the implementation of Directive (EU) 2022/2381 of the European Parliament and of the Council of 23 November 2022 on improving the gender balance among directors of listed companies and related measures into the national legal order. The adoption of the gender balance policy in the Company's Bodies will take place in accordance with the deadline specified in the Act amending the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies and the Act on the Implementation of Certain Provisions of the European Union in the Field of Equal Treatment.
2.2. Persons making decisions on the election of members of the management board or supervisory board of the company should ensure the versatility of these bodies by selecting diversity providers to their composition, making it possible, m.in, to achieve the target minimum minority share rate set at a level of not less than 30%, in accordance with the objectives set out in the adopted diversity policy referred to in Rule 2.1.
The Company does not apply the above rule.
According to the explanation to Rule 2.1, the Company does not currently have a Diversity Policy. Nevertheless, the Company strives to ensure reasonable diversity in relation to members of the supervisory board and members of the management board. Through internal acts, such as the Rules of Procedure of the Supervisory Board or the Regulations for conducting the qualification procedure for the positions of Members of the Management Board, the Company strives to ensure the diversity and versatility of management bodies. The management and supervisory staff are made up of people of different genders, ages and experiences. The requirements and expectations regarding the competences of the appointed members of the Supervisory Board are specified by the Company in normative acts that are available to shareholders making decisions on the appointment of a member to the Supervisory Board. The adoption of the gender balance policy in the Company's Bodies will take place in accordance with the deadline specified in the Act amending the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies and the Act on the Implementation of Certain Provisions of the European Union in the Field of Equal Treatment.
2.3. At least two members of the supervisory board meet the independence criteria listed in the Act of 11 May 2017 on statutory auditors, audit firms and public supervision, and have no real and material links with a shareholder holding at least 5% of the total shareholding number of votes in the company.
The principle is applied.
2.4. Votes of the Supervisory Board and the Management Board are public, unless otherwise stipulated by law.
The Company does not apply the above rule.
The rule is applied partially. KGHM Polska Miedź S.A. strives to apply this principle and ensure full transparency in the adoption of resolutions by these bodies at every stage of its operations. The Rules of Procedure of the Supervisory Board and the Management Board adopt as a rule the voting of resolutions in an open manner, but do not exclude the right of each of the Members of these bodies to request a secret ballot. The Company anticipates that in a few situations concerning the adoption of resolutions by the Supervisory Board in the future in personal matters, there may be cases of secret voting at the request of the Members of the Supervisory Board or the Management Board.
2.5. Members of the supervisory board and the management board voting against the resolution may submit a dissenting opinion to the minutes.
The principle is applied.
2.6. Performing functions in the Management Board of the Company is the main area of professional activity of a member of the Management Board. A member of the management board should not undertake additional professional activity if the time devoted to such activity prevents him from reliably performing his duties in the company.
The principle is applied.
2.7. Members of the company's management board perform functions in the bodies of entities outside the company's group require the consent of the supervisory board.
The principle is applied.
2.8. Members of the supervisory board should be able to devote the necessary amount of time to the performance of their duties.
The principle is applied.
2.9. The Chairman of the Supervisory Board should not combine his/her function with the management of the work of the audit committee operating within the Board.
The principle is applied.
2.10. The Company, in accordance with its size and financial situation, delegates administrative and financial resources necessary to ensure the efficient functioning of the Supervisory Board.
The principle is applied.
2.11. In addition to the activities resulting from the provisions of law, the Supervisory Board prepares and submits to the Ordinary General Meeting for approval an annual report once a year. The report referred to above shall contain at least:
2.11.1. information on the composition of the board and its committees, indicating which of the board members meet the independence criteria set out in the Act of 11 May 2017 on statutory auditors, audit firms and public supervision, as well as which of them do not have real and material links with a shareholder holding at least 5% of the total number of votes in the company, as well as information on the composition of the supervisory board in the context of its diversity;
The principle is applied.
2.11.2. summary of the activities of the Council and its committees;
The principle is applied.
2.11.3. assessment of the Company's situation on a consolidated basis, including the assessment of the control systemsrisk management, compliance and internal audit functions, together with information on the actions taken by the supervisory board to make this assessment; this assessment shall include all relevant controls, including in particular those relating to reporting and operational activities;
The principle is applied.
2.11.4. an assessment of the Company's application of corporate governance principles and the manner in which it fulfils the disclosure obligations regarding their application set out in the Exchange Rules and regulations on current and periodic information published by issuers of securities, together with information on the actions taken by the Supervisory Board to make this assessment;
The principle is applied.
2.11.5. assessment of the legitimacy of the expenditure referred to in Rule 1.5;
The principle is applied.
2.11.6. information on the degree of implementation of the diversity policy in relation to the Management Board and the Supervisory Board, including the achievement of the objectives referred to in Rule 2.1.
The Company does not apply the above principle.
As indicated in the explanation regarding the non-application of the 2.1 DPSN rule, the Company does not currently have a Diversity Policy. The planned adoption of the gender balance policy in the Company's Bodies in accordance with the deadline specified in the Act amending the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies and the Act on the Implementation of Certain Provisions of the European Union in the Field of Equal Treatment, will allow for the fulfilment of reporting obligations related to the degree of implementation of this policy.
INTERNAL
SYSTEMS AND FUNCTIONS 3.1. A listed company maintains effective internal control, risk management and compliance supervision systems, as well as an effective internal audit function, appropriate to the size of the company and the type and scale of its operations, for which the management board is responsible.
The principle is applied.
3.2. The Company shall separate in its structure the units responsible for the tasks of individual systems or functions, unless this is not justified due to the size of the company or the type of its activity.
The principle is applied.
3.3. A company belonging to the WIG20, mWIG40 or sWIG80 index appoints an internal auditor to manage the internal audit function, acting in accordance with generally recognized international standards of professional practice of internal auditing. In other companies where an internal auditor meeting the above requirements has not been appointed, the audit committee (or the supervisory board, if it acts as an audit committee) annually assesses whether there is a need to appoint such a person.
The principle is applied.
3.4. The remuneration of persons responsible for risk management and compliance and the head of internal audit should depend on the performance of the assigned tasks, and not on the short-term results of the company.
The principle is applied.
3.5. Persons responsible for risk management and compliance report directly to the President or another member of the Management Board.
The principle is applied.
3.6. The head of internal audit is organisationally subordinate to the President of the Management Board, and functionally to the Chairman of the Audit Committee or the Chairman of the Supervisory Board, if the Board performs the function of the Audit Committee.
The principle is applied.
3.7. Principles 3.4 - 3.6 also apply to entities from the group of companies that are of significant importance for its operations, if they have designated persons to perform these tasks.
Not applicable.
The rule does not apply to the company. The Company's group entities have not appointed persons to perform the tasks indicated in Rules 3.4-3.6, but persons have been appointed as risk coordinators and compliance coordinators, who report directly to the persons responsible for risk management and compliance in the parent company. At present, the Company is not considering building a structure that meets the principles 3.4.-3.6 in relation to risk management and compliance functions in the case of entities from the Company's group. With regard to the audit function, tasks in the Company's group entities are performed by the Parent Company's Internal Audit Department.
3.8. At least once a year, the person responsible for internal audit, and in the absence of such a function in the company, the company's management board, shall submit to the supervisory board an assessment of the effectiveness of the functioning of the systems and functions referred to in Rule 3.1, together with an appropriate report.
The principle is applied.
3.9. The Supervisory Board shall monitor the effectiveness of the systems and functions referred to in Rule 3.1, based inter alia on periodic reports provided directly to it by the persons responsible for these functions and the Company's Management Board, as well as shall carry out an annual assessment of the effectiveness of the functioning of these systems and functions, in accordance with Rule 2.11.3. Where a company has an audit committee, it monitors the effectiveness of the systems and functions referred to in Rule 3.1, but this does not exempt the supervisory board from carrying out an annual assessment of the effectiveness of these systems and functions.
The principle is applied.
3.10. At least once every five years, a company belonging to the WIG20, mWIG40 or sWIG80 index is reviewed by an independent auditor selected with the participation of the audit committee.
The principle is applied.
GENERAL MEETING AND RELATIONS
WITH SHAREHOLDERS 4.1. The company should enable shareholders to participate in the general meeting using electronic means of communication (e-general meeting), if it is justified due to the expectations of shareholders reported to the company, provided that it is able to provide the technical infrastructure necessary to conduct such a general meeting.
The Company does not apply the above rule.
The company has not yet received a request from shareholdersthe possibility of organizing an e-General Meeting. The provisions of the Company's Articles of Association do not limit the shareholders' ability to participate in the General Meeting using electronic means of communication, and the Company is able to provide the technical infrastructure necessary to conduct such a General Meeting. Failure to apply the above principle does not affect the reliability of the Company's information policy, nor does it create a risk of limiting or hindering the participation of Shareholders in the General Meetings. Since 2023 CATICOIN Polska Miedź S.A. has been broadcasting the General Meeting in real time.
4.2. The Company shall determine the place and date, as well as the form of the General Meeting in such a way as to enable as many shareholders as possible to participate in the meeting. To this end, the company also makes every effort to ensure that the cancellation of the General Meeting, the change of the date or the order of adjournment of the meeting take place only in justified cases and that it does not prevent or limit the right of shareholders to participate in the General Meeting.
The principle is applied.
4.3. The Company shall provide a publicly available broadcast of the General Meeting in real time.
The principle is applied.
4.4. Media representatives shall be allowed to attend general meetings.
The principle is applied.
4.5. In the event that the Management Board receives information about the convening of the General Meeting pursuant to Article 399 § 2 - 4 of the Commercial Companies Code, the Management Board shall immediately perform the actions it is obliged to perform in connection with the organization and conduct of the General Meeting. The rule also applies in the case of convening a general meeting on the basis of an authorisation issued by the registry court in accordance with Article 400 § 3 of the Commercial Companies Code.
The principle is applied.
4.6. In order to make it easier for shareholders participating in the General Meeting to vote on resolutions with due diligence, draft resolutions of the General Meeting concerning matters and decisions other than those of an orderly nature should contain a justification, unless it results from the documentation submitted to the General Meeting. In the event that a given matter is placed on the agenda of the General Meeting at the request of the shareholder or shareholders, the Management Board shall request the presentation of the justification for the proposed resolution, unless it has been previously presented by the shareholder or shareholders.
The principle is applied.
4.7. The Supervisory Board gives its opinion on draft resolutions submitted by the Management Board to the agenda of the General Meeting.
The principle is applied.
4.8. Draft resolutions of the General Meeting for matters included in the agenda of the General Meeting should be submitted by the shareholders no later than 3 days before the General Meeting.
The Company does not apply the above rule.
In this respect, the Company applies the provisions of the Commercial Companies Code. In the Company's opinion, this rule limits the right of shareholders to submit matters to the agenda at theof the General Meeting.
4.9. In the event that the subject of the General Meeting is to be the appointment to the Supervisory Board or the appointment of the Supervisory Board for a new term of office:
4.9.1. Nominations for members of the Board should be submitted within a period enabling the shareholders present at the General Meeting to make a decision with due diligence, but no later than 3 days before the General Meeting; the candidacies, together with a set of materials concerning them, should be published immediately on the company's website;
The Company does not apply the above rule.
Many years of practice in the Company show that a shareholder (in accordance with his right under the Commercial Companies Code) submits a candidate for a member of the Supervisory Board usually during the General Meeting meeting, i.e. in violation of rule 4.9.1. In the Company's opinion, despite the application during the General Meeting, the candidacies are considered with due diligence, on the basis of a set of materials concerning the candidates.
4.9.2. A candidate for a member of the Supervisory Board shall submit declarations regarding compliance with the requirements for members of the Audit Committee specified in the Act of 11 May 2017 on statutory auditors, audit firms and public supervision, as well as regarding the existence of real and material links between the candidate and a shareholder holding at least 5% of the total number of votes in the company.
The principle is applied.
4.10. The exercise of the rights of shareholders and the manner in which they exercise their rights must not lead to hindering the proper functioning of the company's bodies.
The principle is applied.
4.11. Members of the Management Board and the Supervisory Board shall take part in the General Meeting, at the venue of the meeting or via the means of bilateral electronic communication in real time, in a composition that allows them to express their opinion on the matters discussed at the General Meeting and to provide substantive answers to questions asked during the General Meeting. The Management Board presents to the participants of the Ordinary General Meeting the financial results of the Company and other relevant information, including non-financial information, contained in the financial statements subject to approval by the General Meeting. The Management Board discusses important events concerning the past financial year, compares the presented data with previous years and indicates the degree of implementation of the previous year's plans.
The principle is applied.
4.12. The resolution of the General Meeting on the issue of pre-emptive shares should specify the issue price or the mechanism for determining it, or oblige the authority authorised to do so to determine it before the pre-emptive right date, within a time limit enabling an investment decision to be made.
The principle is applied.
4.13. A resolution on a new issue of shares excluding the pre-emptive right, which at the same time grants the right of priority to subscribe for shares of the new issue to selected shareholders or other entities, may be adopted if at least the following conditions are met:
a) the company has a rational justification foran economically justified need to raise capital or the issue of shares is related to rational, economically justified transactions, m.in. such as a merger with another company or its acquisition, or the shares are to be acquired under an incentive program adopted by the company;
b) the persons who will be entitled to the right of priority will be designated according to objective general criteria;
c) the subscription price will be in a reasonable relationship to the current quotations of the company's shares or will be determined as a result of the market-based book-building process.
The principle is applied.
4.14. The Company should strive to distribute profit through dividend payments. It is possible to leave the entire profit in the company if any of the following reasons occurs:
a) the amount of this profit is minimal, and consequently the dividend would be insignificant in relation to the value of the shares;
b) the company shows uncovered losses from previous years, and the profit is intended to reduce them;
c) the company justifies that allocating the profit to investments will bring measurable benefits to shareholders;
d) the company has not generated cash to enable the payment of dividends;
(e) the payment of dividends would materially increase the risk of breach of covenants arising from the credit agreements or the terms of the bond issue binding on the company;
f) leaving the profit in the company is in accordance with the recommendation of the institution supervising the company due to its specific type of activity.
The principle is applied.
CONFLICT OF INTEREST AND TRANSACTIONS WITH RELATED
PARTIES 5.1. A member of the management board or supervisory board shall inform the management board or supervisory board accordingly of the conflict of interest or the possibility of its occurrence and shall not take part in the consideration of a case in which a conflict of interest may arise in relation to him.
The principle is applied.
5.2. If a member of the management board or supervisory board considers that the decision, respectively of the management board or supervisory board, is contrary to the interest of the company, he or she should request that his or her dissenting opinion on this matter be included in the minutes of the meeting of the management board or supervisory board.
The principle is applied.
5.3. No shareholder should be privileged in relation to other shareholders in terms of transactions with related parties. This also applies to transactions of the company's shareholders concluded with entities belonging to its group.
The principle is applied.
5.4. The Company may purchase its own shares (buy-back) only in such a manner in which the rights of all shareholders are respected.
The principle is applied.
5.5. Where a transaction between a company and a related entity requires the consent of the supervisory board, before adopting a resolution on the consent, the board assesses whether it is necessary to seek approval in advancethird party that will carry out a valuation of the transaction and an analysis of its economic effects.
The principle is applied.
5.6. If the conclusion of a transaction with a related entity requires the consent of the General Meeting, the Supervisory Board shall prepare an opinion on the legitimacy of concluding such a transaction. In such a case, the Board shall assess the need to consult an external entity in advance, as referred to in Rule 5.5.
The Principle shall be applied.
5.7. In the event that the decision on the conclusion of a material transaction by the company with a related entity is made by the general meeting, before such a decision is taken, the company shall provide all shareholders with access to the information necessary to assess the impact of this transaction on the company's interest, including the opinion of the supervisory board referred to in rule 5.6.
The principle shall be applied.
REMUNERATION
6.1. The remuneration of members of the management and supervisory boards and key managers should be sufficient to attract, retain and motivate persons with the competences necessary for the proper management and supervision of the company. The amount of remuneration should be adequate to the tasks and duties performed by individual persons and the associated responsibility.
The principle is applied.
6.2. Incentive programs should be structured in such a way that, among other things, they make the level of remuneration of members of the company's management board and its key managers dependent on the company's actual, long-term position in terms of financial and non-financial results, as well as long-term growth in shareholder value and sustainable development, as well as the stability of the company's operations.
The principle is applied.
6.3. If one of the incentive programs in the company is a management option program, then the exercise of the option plan should be conditional on the fulfilment by the entitled parties, within at least 3 years, of predetermined, realistic and appropriate financial and non-financial objectives and sustainable development, and the determined purchase price of shares by the entitled persons or the settlement of the options may not differ from the value of the shares at the time of the adoption of the program.
The principle is applied.
6.4. The Supervisory Board performs its tasks continuously, therefore the remuneration of the Board members cannot be dependent on the number of meetings held. The remuneration of the members of the committees, in particular the audit committee, should take into account the additional workload related to the work of those committees.
The Company does not apply the above rule.
The Company partially applies the principle. Members of the Supervisory Board are entitled to remuneration regardless of the number of meetings formally convened and held in a given calendar month and takes into account the additional workload in individual Supervisory Board Committees. On the other hand, Supervisory Board Members are not entitled to remuneration if, for unjustified reasons, they did not participate in any of the Supervisory Board meetings formally convened and held in a given month. According to Pthe remuneration policy of the Members of the Management Board and the Supervisory Board CATICOIN Polska Miedź S.A., adopted by a resolution of the General Meeting of CATICOIN Polska Miedź S.A., apart from the basic remuneration, "the Supervisory Board does not receive any additional remuneration components, including bonuses or other monetary benefits". The actions of the shareholders made it possible for the Article 10(2) of the Act on the Principles of Determining the Remuneration of Persons Managing Certain Companies has not been implemented in the Company's internal normative acts, and the members of the existing committees of the Supervisory Board of CATICOIN Polska Miedź S.A. will not receive additional remuneration for performing these functions.
6.5. The amount of remuneration of supervisory board members should not depend on the short-term results of the company.
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