Corporate governance

Sadovaya Group conducts its activity in compliance with the rules of the Grand Duchy of Luxembourg. As the shares of Sadovaya Group S.A, are listed on the Warsaw Stock Exchange, it also complies rules and majority of WSE corporate governance laws. Certain principles apply to the Company only to the extent allowed by Luxembourg corporate law and corporate structure of the Group, especially the single board structure as opposed to the two-tier system that the WSE Corporate Governance Rules assume. The Company does not have two separate governing bodies (supervisory board and management board) which are obligatory in Polish joint stock companies. Instead, its Board of Directors performs both the management and supervisory functions. As a result, the Company applies those principles of the WSE Corporate Governance Rules which refer to relations between supervisory board and management board not directly, but accordingly.

Board of Directors

The Board of directors currently is composed of two A directors and two B directors appointed by General meeting of Shareholders. The term of the office of the directors may not exceed six years and any director shall hold office until his successor is elected. Annually they are discharged from their responsibilities for the year past. Any director may be removed at any time, without notice or without cause by General meeting of Shareholders or be re-elected for successive terms. The board of directors is vested with the broadest powers to take any actions necessary or useful to fulfill the Company’s corporate object, with the exception of the actions reserved by law or these articles of incorporation to the general meeting of shareholders. It is the highest decision making authority in the Company’s governance hierarchy.

General meetings of the shareholders

The annual general meeting of the shareholders is held in Luxembourg in its registered address on the third Wednesday of June. Other meetings of shareholders may be held at such place, time and frequency as it is necessary for the effective operation of Sadovaya Group. The notice of the general meeting is published not latter than 30 days prior to meeting date. The Shareholders may take part in the meeting either in person or via a proxy.

Annual audit

The company arranges for annual audits by an Independent auditors appointed by General meeting of shareholders. Statutory annual accounts is drawn up according to generally accepted accounting principles in Luxembourg and the consolidated financial statements is drawn up in accordance with International Financial Reporting Standards as adopted in the European Union. Financial reports are approved by the Board of Directors.