Corporate Governance is a code of ethical business conduct, but also a system of regulations designed to ensure a balance between the interests of all capital market participants involved in the governance of companies.

The so-called Best Practice is a set of standards designed to establish good corporate practices and align the prevailing system of corporate governance with the European Union’s standards.

Corporate Governance Rules at Grupa LOTOS S.A.

Grupa LOTOS S.A. seeks to ensure that its investor relations are carried out as between equal partners, in a manner satisfying to both parties. The key objectives of implementing the Corporate Governance Rules at Grupa LOTOS S.A. are to ensure:

From its stock market flotation in June 2005, Grupa LOTOS S.A. complied with most of the recommendations set out in the then effective code of ‘Best Practice at Public Companies’. Then, from the beginning of 2008, it followed the ‘Best Practice for WSE Listed Companies’, as amended by the WSE Supervisory Board’s Resolution of October 19th 2011. On January 1st 2016, the Company adopted the revised ‘Best Practice for WSE Listed Companies 2016’. Since July 1st 2021, Grupa LOTOS S.A. has observed the principles set out in the ‘Best Practice for WSE Listed Companies 2021’ (‘WSE Best Practice 2021’), as reported on July 30th 2021:

Status of compliance with the ‘Best Practice for WSE Listed Companies 2021’.

In accordance with the ‘comply or explain’ principle adopted with respect to the ‘Best Practice for WSE Listed Companies’, the Company reports, via the EIB system, any incidental or permanent non-compliance with the principles of corporate governance, and once a year issues a statement of compliance with the best practice, included in its annual report. Such reports are published in the same way as current reports, in two languages, on the Company’s Investor Relations website.

Corporate Governance reports 

Reports filed pursuant to Section 29.3 of the Rules of the Warsaw Stock Exchange:

EIB Report 1/2012

EIB Report 1/2016

 EIB Report 1/2021

 In addition, in its annual reports, Grupa LOTOS S.A. publishes Statements of compliance with Corporate Governance rules in a given reporting year.

History of Best Practice in Poland

In the late 1990s, similar codes adopted on more mature western capital markets, as well as consultations held with participants of the Polish capital market and with the community of lawyers and economists, provided inspiration to create principles of Corporate Governance that would be applicable in Poland.

To this end, the Warsaw Stock Exchange appointed the ‘Best Practice Committee’ in 2001.

In the autumn of 2002, the first key principles of business ethics were codified in a document entitled ‘Best Practice at Public Companies’, issued by the Warsaw Stock Exchange. The code defined good practices for general meetings, supervisory boards and management boards, as well as good practices to be followed in the company’s relations with external stakeholders.

Subsequently, in 2005−2007, the ‘Best Practice at Public Companies 2005’, as revised in the course of practical application and discussions and reflecting the European Commission’s recommendations, was adopted as the effective Corporate Governance guidance for companies wishing to build solid shareholder relationships.

On July 4th 2007, its revised version entitled ‘Best Practice for WSE Listed Companies’ was adopted, entering into force on January 1st 2008. Another revision was adopted by way of the WSE Supervisory Board’s Resolution of May 19th 2010.

Between 2012 and 2015, another amended version of ‘Best Practice for WSE Listed Companies’ was in effect, replaced by a revision of January 1st 2016, effective until June 30th 2021.

By Resolution No. 13/1834/2021 of March 29th 2021, the WSE Supervisory Board adopted new corporate governance rules for companies listed on the WSE Main Market – ‘Best Practice for WSE Listed Companies 2021’ (‘WSE Best Practice 2021’). This document is the latest version of the corporate governance code to which companies listed on the WSE Main Market have been subject since 2002.