Avoidance of conflicts of interest


{GRI 4.2., 4.6.}

Under Art. 387 of the Commercial Companies Code, which aims to prevent the combination of management and supervisory roles, particularly with respect to supervisory boards, a current member of the management board of a company, its commercial proxy, liquidator, head of a division or production facility, or internal chief accountant, legal counsel or lawyer may not sit on the company’s supervisory board. Article 387 also prohibits combining management and supervisory functions at an incorporated company in accordance with the principle that the supervised may not exercise supervision.

In addition to the requirements imposed by law, pursuant to Rules 2 and 4 in Section III of the Code, a member of the supervisory board should submit to the company’s management board information on any relationship with a shareholder who holds shares representing 5% or more of all votes at the general meeting. This obligation concerns financial, family, and other relationships which may affect the position of the member of the supervisory board on issues decided by the supervisory board. Additionally, a member of the supervisory board should notify the supervisory board of any actual or potential conflicts of interest and should refrain from taking part in the discussion and from voting on the adoption of a resolution on the issue which gives rise to such a conflict of interest. These are the obligations of supervisory board members of listed companies.

Members of the Supervisory Board of Grupa LOTOS make IFRS-compliant disclosures on related-party transactions in accordance with IAS 24 Related Party Disclosures for the purposes of the Company’s financial statements. According to disclosures made in 2013, two members of the Supervisory Board of Grupa LOTOS are employed by the Ministry of State Treasury, which both claim has no influence on their duties on the Supervisory Board of Grupa LOTOS. The remaining Supervisory Board members declare that they do not have any economic links, family ties or other relations with a shareholder holding 5% or more of total votes at the General Meeting of Grupa LOTOS and which might sway their position on matters decided by the Supervisory Board.

The Company is not aware of any conflicts of interest that arose or could have arisen in 2013, which the member concerned should have notified the Supervisory Board about, and as a result of which the member should refrain from taking the floor and voting on resolutions pertaining to the matter giving rise to such conflict of interest.

In addition to the above requirements, upon appointment, members of the Company’s Supervisory Board are required to make a representation to the effect that they are not engaged in any activities competing with the Company’s business, and that they are not partners in any competing partnership under civil law or another type of partnership, nor members of a governing body of an incorporated company or of any other competing legal entity.