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Information on the Company’s Non-Compliance with Certain Corporate Governance Standards
Report no. 96/20052008-01-01

In connection with the coming into effect of corporate governance standards – Best Practices of the Companies Listed on the WSE as of today, the Management Board of Grupa LOTOS S.A. hereby reports that Grupa LOTOS S.A. shall not comply with the following standards: Principle No. 1.11 of Section II “The company shall maintain a corporate website where it shall publish […] information received by the management board, in the form of a statement of a member of the supervisory board, on the member having ties to a shareholder holding shares representing 5% or more of the total vote at the general shareholders meeting of the company.” The principle has not been applied since Grupa LOTOS S.A. has no knowledge of any ties between the supervisory board members and a shareholder holding shares conferring 5% or more of the total vote at the general shareholders meeting. The Company plans to introduce a procedure for sourcing such information, which will enable it to comply with the principle. Principle No. 6 of Section III “At least two members of the supervisory board should be independent of the company and the entities which are closely tied to the company. Annex II to the Commission Recommendation of February 15th 2005 on the role of non-executive or supervisory directors of listed companies and on the committees of the (supervisory) board should be applied as regards the criteria of independence to be satisfied by the supervisory board members. Irrespective of the provisions of clause 1.b) of Annex II, an employee of the company, its subsidiary or associated undertaking cannot be deemed to satisfy the criteria of independence referred to in Annex II. Furthermore, any actual and material ties between a supervisory board member and a shareholder holding rights to exercise 5% or more of the total vote at the general shareholders meeting shall be deemed a relationship which precludes the attribute of the supervisory board member’s independence within the meaning of this principle.” The principle has not been applied since Grupa LOTOS S.A. has no information on independence of the supervisory board members, and because up to this date no independent members have been appointed to the Company’s supervisory board in view of the Company’s shareholder structure and its role in the Polish fuel sector. The Company will apply the principle once it has been notified that at least two independent members were appointed to the supervisory board or acknowledged as independent members in accordance with Annex II to the Commission Recommendation of February 15th 2005 on the role of non-executive or supervisory directors of listed companies and on the committees of the (supervisory) board. Principle No. 7 of Section III “At least an audit committee should be created within the supervisory board. The audit committee should include at least one member independent of the company and the entities which are closely tied to the company, qualified in the field of accounting and finance. At companies where the supervisory board consists of the minimum number of members required by law, the duties of the committee may be fulfilled by the supervisory board.” The principle has not been applied since the Company’s Supervisory Board has no independent members who could be included in the currently functioning audit committee. The Company will apply the principle once it has been notified that a Supervisory Board member who fulfils the criteria of independence in accordance with Annex II to the Commission Recommendation of February 15th 2005 on the role of non-executive or supervisory directors of listed companies and on the committees of the (supervisory) board, has been appointed to the audit committee currently functioning within the Supervisory Board. Principle No. 8 of Section III “Annex I to the Commission Recommendation of February 15th 2005 on the role of non-executive directors (…) should be applied as regards the duties and the functioning of the committees operating within the supervisory board.” The principle has not been applied since the Company’s Supervisory Board has no independent members who should be included, in accordance with Annex I to the Commission Recommendation of February 15th 2005 on the role of non-executive directors (…), in the committees of the Supervisory Board functioning at the Company. The Company will apply the principle once it has been notified that an appropriate number of members who fulfil the criteria of independence have been appointed to the currently functioning committees of the Supervisory Board and that the duties and the functioning of the committees are compliant with Annex I to the Commission Recommendation of February 15th 2005 on the role of non-executive or supervisory directors of listed companies and on the committees of the (supervisory) board. This information is published pursuant to Par. 29.3 of the Rules of the Warsaw Stock Exchange