Powszechna Kasa Oszczednosci Bk Plski : Report No. 45/2017 – Registration of the amendments to the Articles of Association of Powszechna Kasa Oszczędności Bank Polski Spółka Akcyjna

Legal basis:
Paragraph 38.1.2 of the Ordinance of the Minister of Finance of 19 February 2009 on current and periodic information published by issuers of securities and on conditions under which such information may be recognised as being equivalent to information required by the regulations of law of a state which is not a member state.

The report:
The Management Board of PKO Bank Polski S.A. ('Bank') hereby informs that on 15 December 2017 the Bank learnt that the District Court for the Capital City of Warsaw in Warsaw, 13th Commercial Division of the National Court Register registered the amendments to the Bank's Articles of Association, adopted by the Resolution No. 50/2017 of the Bank's Annual General Meeting of 20 July 2017 (submitted by the Bank to the public in the Report No. 31/2017). Bank obtained the consent of the Polish Financial Supervision Authority to these amendments.
The Bank's Articles of Association were amended as follows:
1) § 4.2 item 16 of the Articles of Association received the following wording:

'16) provision of trust services and issuing electronic identification means within the meaning of the laws on trust services,';
previous wording of §4.2 item 16:
'16) provision of certification services as defined in the regulations on electronic signatures, excluding the issue of qualified certificates employed by banks in operations to which they are a party,';

2) § 9 of the Articles of Association received the following wording:

'§ 9
1. The competences of the General Meeting, apart from other matters stipulated in the separate provisions of these Articles of Association, cover adopting resolutions in the matters of:
1) appointing and recalling the members of the Supervisory Board in accordance with § 11,
2) approving the Regulations of the Supervisory Board,
3) acquiring the shares of the Bank in order to redeem them and determining the amount of payment for the redeemed shares,
4) creating and liquidating special funds created of the net profit,
5) selling by the Bank of the real property, an interest in real property or perpetual usufruct, if the value of the real property or the right being the object of such action exceeds 25% of the share capital; such consent shall not be required, if the purchase of the real property sold in this way, interest in real property or perpetual usufruct was made as part of the execution, bankruptcy, restructuring proceedings or another agreement with the Bank's debtor,
6) issuing bonds convertible to shares, bonds with pre-emptive rights or subscription warrants,
7) determining the wage-setting policy for the members of the Management Board,
8) determining the wage-setting policy for the members of the Supervisory Board,
9) approving the reports of the Management Board of the Bank's operations containing also information on representation expenses, legal fees, costs of marketing services, public relations and social communication services and advisory services relating to the management, as well as the report of the Management Board of the operations of the Bank's capital group,
10) approving the report of the Supervisory Board's operations,
11) approving financial statements of the Bank and the consolidated financial statements of the capital group of the Bank,
12) granting a vote of acceptance to the performance by the members of the Management Board and the Supervisory Board,
13) distribution of profits or covering loss,
14) specifying the dividend date and the date of dividend pay-out,
15) disposing or leasing a part of business or its organised part and establishing a limited property right thereon,
16) amendments to the Articles of Association of the Bank,
17) increasing or decreasing the share capital of the Bank,
18) other than indicated above, and resulting from the generally applicable legal provisions.
2. The matters to be addressed at the General Meeting should be, in accordance with the Regulations of the Supervisory Board, subject to the opinion of the Supervisory Board in the time enabling the shareholders to become aware of the opinion of the Supervisory Board.';

previous wording of § 9:
'§ 9
1. Besides the issues stipulated in the generally applicable laws or the provisions of these Articles of Association, the General Meeting shall adopt resolutions in the following matters:
1) appointment and dismissal of the members of the Supervisory Board in accordance with § 11;
2) approval of the Supervisory Board Rules and Regulations;
3) specifying the procedure for redemption of shares and the amount of consideration for the shares to be redeemed;
4) creation and dissolution of special funds created from net profit;
5) approval of the Bank's disposal of real estate or of a perpetual usufruct right, if the value of the real estate or right subject to such action exceeds one-fourth of the Bank's share capital; such an approval shall not be required if the acquisition of the thus disposed of real estate, interest in real estate or perpetual usufruct right is part of enforcement, bankruptcy or arrangement proceedings, or a different settlement with a Bank's debtor;
6) issue of bonds convertible into shares or other instruments entitling to acquisition or taking up of the Bank's shares.
2. The matters put on the agenda of a General Meeting shall, in accordance with the Rules and Regulations referred to in § 14, first be presented by the Management Board to the Supervisory Board for consideration and issuance of an opinion.';

3) §11 section 1 of the Articles of Association received the following wording:
'1. The Supervisory Board shall be composed of 5 (five) to 13 (thirteen) members appointed for the joint three-year term. The number of the members of the Supervisory Board shall be established by the Authorised Shareholder (in accordance with the definition below), including in the case of submission of the application for the election of the Supervisory Board by voting in separate groups.';
previous wording of §11.1:
'1. The Supervisory Board shall be composed of 5 (five) to 13 (thirteen) members appointed for the joint three-year term. The number of the members of the Supervisory Board shall be established by the Authorised Shareholder (in accordance with the definition below), including in the case of submission of the application for the election of the Supervisory Board by voting in separate groups. In the event when a motion for election of the Supervisory Board through voting in separate groups is presented, 5 (five) members of the Supervisory Board shall be elected.';

4) in §11 section 2 first sentence of the Articles of Association received the following wording:

'The members of the Supervisory Board shall be appointed and dismissed by the General Meeting, taking into account the assessment of fulfilment by the candidates of the requirements resulting from Art. 22aa of the Banking Law of 29 August 1997'.;
previous wording of the first sentence of §11.2:
'The members of the Supervisory Board shall be appointed and dismissed by the General Meeting.';

5) §11 section 6 of the Articles of Association received the following wording:

'6. As long as the Supervisory Board is composed of at least 5 (five) members, the Supervisory Board is capable of taking any actions stipulated by law and the Articles of Associations. In the event that the number of the members of the Supervisory Board decreases below 5 (five) members of the Supervisory Board, the Management Board shall convene the General Meeting in order to complete the composition of the Supervisory Board.';
previous wording of §11.6:
'6. If, following the expiration of the mandate of a Supervisory Board member, the number of Supervisory Board members falls below the minimum specified in § 11 section 1, the Management Board shall promptly convene the General Meeting in order to supplement the composition of the Supervisory Board.';

6) § 14a of the Articles of Association was deleted;
previous wording of §14a:
'The Supervisory Board shall supervise the Bank's operations in all the areas of its activity, in particular the risk management system and the internal audit system.';

7) §15 section 1 of the Articles of Association received the following wording:

'1. The Supervisory Board shall exercise constant supervision over the Bank's operations in all areas of its business. The competences of the Supervisory Board, apart from the rights and obligations provided for in other provisions of these Articles of Association, include:
1) approval of the annual financial plan adopted by the Management Board,
2) selection of the audit firm to audit and review financial statements of the Bank and the consolidated financial statements of the capital group of the Bank,
3) adopting the Regulations of the Supervisory Board,
4) adopting the rules of granting loans, cash loans, bank guarantees or sureties to the members of the Management Board, the Supervisory Board, persons holding managerial positions at the Bank and entities linked with it by capital or organisationally, referred to in Art. 79a of the Banking Law of 29 August 1997,
5) appointing and recalling, in a secret ballot, the President of the Management Board, Vice-presidents and members of the Management Board.
6) suspending in duties, due to important reasons, individual or all members of the Management Board and delegating the members the Supervisory Board, for the period no longer than three months, for the temporary performance of duties of the members of the Management Board who have been recalled, resigned or cannot perform their duties for other reasons,
7) conducting qualification procedure for the member of the Management Board and specifying detailed rules and manner of its conducting,
8) setting the remuneration and terms of employment of the members of the Management Board on the basis of wage-setting policy for the members of the Management Board, referred to in § 9 section 1 item 7,
9) granting consent for opening or closing the branch abroad,
10) approving the following strategies, policies and regulations adopted by the Management Board:
a) Bank's Strategy,
b) Risk management strategy,
c) Bank management strategy,
d) Dividend policy,
e) Remuneration policy,
f) Policy on estimating internal capital and capital management and reviewing strategies and procedures of estimating internal capital and capital management,
g) Compliance policy of the Bank,
h) Rules of managing special funds created of the net profit,
i) Organisational Regulations of the Bank,
j) Regulations of the Management Board,
11) granting prior consent to:
a) purchase and disposal of non-current assets of the value exceeding 10% of own funds of the Bank, excluding real property, an interest in real property or perpetual usufruct,
b) excluding the actions, referred to in § 9 section 1 item 5, purchase and sale by the Bank of the real property, an interest in real property or perpetual usufruct or encumbering them with a limited property right or making available to third party, if the value of the real property or the right being the object of such action exceeds 2% of the share capital of the Bank; such consent shall not be required, if the purchase of the real property, an interest in real property or perpetual usufruct is made as part of the execution, bankruptcy, restructuring proceedings or another agreement with the Bank's debtor, as well as in the case of legal actions relating to the real property or rights acquired by the Bank in the above way; in such cases the Management Board is obliged to only inform the Supervisory Board of the actions made,
c) establishment of a company, taking up or purchase of shares, convertible bonds or other instruments vesting rights to take up or purchase shares, if the Bank's financial exposure resulting from such act exceeds 10% of its shareholders' equity,
d) concluding by the Bank of the significant agreement with the shareholder holding at least 5% of the total number of votes at the Bank or with a related entity, typical transactions and transactions concluded at arm's length as part of the Bank's operations shall not be subject to the above obligation, if they are concluded with the entities forming part of the Bank's capital group,
e) concluding by the Bank of the agreement for legal services, marketing services, public relations and social communication services as well as advisory relating to the management services, if the value of the remuneration provided for in total for the rendered services exceeds PLN net 500 000 per annum,
f) amendment to the concluded by the Bank agreement for legal services, marketing services, public relations and social communication services as well as advisory relating to the management services increasing the remuneration above the amount, referred to in letter e),
g) concluding by the Bank of the agreement for legal services, marketing services, public relations and social communication services as well as advisory relating to the management services, in which the maximum amount of remuneration is not provided for,
h) concluding by the Bank of the donation agreement or another agreement with similar effect of the value exceeding PLN 20 000 or 0.1% of total assets,
i) concluding by the Bank of the release of debt agreement or another agreement with similar effect of the value exceeding PLN 50 000 or 0.1% of total assets,
12) filing an application to the Polish Financial Supervision Authority for granting consent to appoint the President of the Management Board and the member of the Management Board supervising management of significant risk in the Bank's operations, as well as entrusting the function of the member of the Management Board supervising management of significant risk in the Bank's operations to the current member of the Management Board who has not supervised the management of this risk,
13) assessing the functioning of the remuneration policy at the Bank and presenting report in this regard to the General Meeting,
14) issuing opinions on application by the Bank of the 'Principles of corporate governance for supervised institutions',
15) presenting to the General Meeting an annual report of the Supervisory Board's operations, including also the assessment of the Management Board's report of the Bank's operations and financial statements of the Bank for the last financial year in terms of their compliance with the books and documents, as well as with the actual state and requests of the Management Board regarding the distribution of profit or covering loss,
16) approving of the acceptable general risk level specified by the Management Board,
17) determining the rules of reporting to the Supervisory Board about the types and size of risk in operations, after prior presenting proposals by the Management Board, in the manner enabling supervising the risk management system at the Bank,
18) analysing reports provided to the Supervisory Board regarding risk management, estimating internal capital and capital management and internal control system,
19) making an annual assessment of the adequacy and effectiveness of the risk management system,
20) making an annual assessment of the adequacy and effectiveness of the internal control system, including the adequacy and effectiveness of the control function, compliance unit and internal audit unit,
21) making an annual assessment of the level of effectiveness of the non-compliance risk management by the Bank,
22) approving of, previously accepted by the Bank, rules of functioning of the compliance unit and internal audit unit,
23) making an annual assessment of the adequacy and effectiveness of the anonymous reporting procedure of breaches by the Bank's employees,
24) taking decisions in other matters subject to the competences of the Supervisory Board on the basis of the generally applicable legal provisions and recommendations issued by the Polish Financial Supervision Authority.';
previous wording of §15.1

'1. Apart from the powers and responsibilities provided for in the generally applicable laws and these Articles of Association, the Supervisory Board has the authority to adopt resolutions regarding:
1) the approval of the strategy of the Bank adopted by the Management Board,
2) the approval of the risk management strategy and the general risk appetite adopted by the Management Board,
3) the approval of the annual financial plan adopted by the Management Board,
4) the nomination of an entity to audit or review the consolidated or separate financial statements of the Bank, the giving of permission for the signing of the engagement letter with such an entity or any of its subsidiaries, affiliates, parent entities or the subsidiaries or affiliates of its parent entities, and for the performance of any other activities which might adversely affect the independence of any such entity in the performance of the audit or review of the Bank's financial statements,
5) the enactment of the Rules and Regulations of the Supervisory Board,
6) the enactment of the Rules specifying the principles of the making of loans, cash advances, issuance of bank guarantees or suretyship to a member of the Management Board or the Supervisory Board or any other executive of the Bank, and to any party related a member of the Management Board or the Supervisory Board or any other executive of the Bank by capital or organization as per Article 79a of the Act of 29 August 1997 'Banking Law',
7) the appointment and recalling, in a secret ballot, of the President, Vice Presidents and members of the Management Board,
8) the suspension of individual or all of the members of the Management Board for important reasons as well as delegating members of the Supervisory Board to temporarily (for a period not exceeding three months) act in the capacity of members of the Management Board who have been dismissed, have resigned or are incapable of performing their duties for any other reason
9) the approval of the opening or closing of a branch abroad,
10) the approval of the following, as adopted by the Management Board:
a) Rules and Regulations:
 the Rules and Regulations of the Management Board,
 the Rules of Appropriation of Special Funds Established From After-Tax Profit,
 the Organizational Rules of the Bank,
b) resolutions concerning:
 the principles of the capital adequacy disclosure policy,
 the guiding principles of the compliance risk management policy,
 the rules of management of capital adequacy and equity, in particular regarding the processes of internal capital assessment, capital management and planning as well as the dividend policy,
 the rules of operation of the internal control framework,
11) the approval of periodic reports on risk management, capital adequacy and internal control framework submitted by the Management Board,
12) the giving of prior consent to:
a) the acquisition or disposal of non-current assets whose value exceeds 1/10 of the Bank's own funds, except for any real property and perpetual usufruct right,
b) with the exclusion of the activities referred to in § 9 section 1 point 5, the acquisition and disposal of real property, an interest in a real property or a perpetual usufruct right, or their encumbrance with a limited property right or the giving of use of the same to a third party if the value of the real property or the right which is the object of such an act exceeds 1/50 of the Bank's share capital; such consent shall not be required if the acquisition of real property, an interest in a real property or a perpetual usufruct right forms a part of enforcement, bankruptcy, arrangement proceedings or any other settlement with a Bank's debtor, as well as in the event of legal transactions concerning real property or rights acquired by the Bank in the manner described above; in such cases the Management Board shall only be required to notify the Supervisory Board about the performed act
c) the establishment of a company, taking up or acquisition of shares, bonds convertible into shares or other instruments entitling the holder to acquire or take up shares if the financial commitment of the Bank resulting from such an act exceeds 1/10 of the Bank's own funds;
d) the Bank entering into a material contract with a shareholder holding at least 5% of the total voting rights in the Bank or with an affiliate; this obligation shall not apply in relation to typical transactions and transactions performed at arm's length as part in the regular course of the Bank's operating activities if such transactions are performed with entities belonging to the Bank's corporate group,
13) applying to the Polish Financial Supervision Authority for permission to appoint the President of the Management Board and the member of the Management Board in charge of the management of a material risk in the operations of the Bank as well as for the assignment of the function of the Member of the Management Board in charge of the management of a material risk in the operations of the Bank to a member of the Management Board who has not overseen the management of such risk,
14) assessment of the remuneration policy followed by the Bank and the presentation of reports in this regard to the General Meeting,
15) opinions on the observance by the Bank of the 'Principles of Corporate Governance for Supervised Institutions',';

8) §15 section 3 of the Articles of Association received the following wording:

'3. The Supervisory Board shall adopt resolutions by an absolute majority of votes in the presence of at least half of the members of the Supervisory Board, including the Chairperson or Vice-chairperson of the Supervisory Board, except for the resolutions on the matters, referred to in section 1 items 1-2, 4-6, 10 letters a-b, 11 letters a-d and 16, for adopting of which apart from the indicated quorum, the qualified majority of two thirds of votes is required.';

previous wording of §15.3:

'3. The Supervisory Board shall adopt resolutions by an absolute majority of votes in the presence of at least half of the members of the Supervisory Board, including the Chairperson or Vice-chairperson of the Supervisory Board, except for the resolutions on the matters, referred to in section 1 items 1-4, 6-8, 12 for adopting of which apart from the indicated quorum, the qualified majority of two thirds of votes is required.';

9) §17 section 4 first sentence of the Articles of Association received the following wording:

'The Supervisory Board may adopt resolutions in writing (by circulation) or by means of direct remote communication facilities, except for resolutions on the matters referred to in § 15 section 1 items 1-2, 4-6, 10 letters a-b and 16 and any resolutions adopted by secret ballot.';

previous wording of the first sentence of §17.4:

'The Supervisory Board may adopt resolutions in writing (by circulation) or by means of direct remote communication facilities, except for resolutions on the matters referred to in § 15 section 1 points 1-4 and 6-8 and any resolutions to be adopted by secret ballot.';

10) §17a section 1 first sentence shall be reworded as follows:

'The Supervisory Board shall appoint its members to the committees, an obligation of appointment of which results from the applicable provisions.';

previous wording of the first sentence of §17a.1:

'The Supervisory Board shall appoint, from among its members, the Audit Committee, the Remuneration Committee and the Risk Committee.';

11) § 19 of the Articles of Association received the following wording:
'§ 19
1. The members of the Management Board shall be appointed by the Supervisory Board for a joint three-year term of office.
2. The members of the Management Board shall be appointed by the Supervisory Board after conducting a qualification procedure which aim is to check and assess the qualifications of candidates and selecting the best candidate for the member of the Management Board.
3. The person who meets jointly the following conditions can be the member of the Management Board:
1) s/he meets the requirements provided for in Art. 22aa of the Banking Law of 29 August 1997,
2) has a higher education or higher education obtained abroad recognised in the Republic of Poland, on the basis of separate provisions,
3) has at least 5-year period of employment under an employment contract, appointment, election, nomination, cooperative employment contract or of providing services under other agreement or conducting business on their own account,
4) has at least 3-year experience on managerial or independent positions or resulting from conducting business on their own account,
5) meets the requirements other than specified in items 1-4 defined in other separate provisions, and in particular does not infringe restrictions or prohibitions of holding a position of the member of governing bodies at commercial companies.
4. The person who meets at least one of the following conditions cannot be a member of the Management Board:
1) a person who works as a social collaborator or is employed in a parliamentary, senatorial, parliamentary and senatorial office or office of a Member of the European Parliament under an employment contract or performs work under a mandate contract or other similar contract,
2) is a member of a political party body representing a political party outside and entitled to incur liabilities,
3) is employed by a political party under an employment contract or performs work under a mandate contract or other similar contract,
4) performs a function by choice at the company's trade union organisation or trade union organisation of the company of the capital group,
5) their social or profit-earning activity creates a conflict of interests towards the activities of the company.'

previous wording of §19:
'§ 19
The members of the Management Board shall be appointed by the Supervisory Board for a join three-year term of office.';

12) § 20 section 1 of the Articles of Association received the following wording:

'1. Any matters related to the transacting of the Bank's business not specifically reserved under the general laws or these Articles of Association for the discretion of the Annual General Meeting or the Supervisory Board shall fall within the powers of the Management Board, including the purchase and sale of real property, an interest in real property or perpetual usufruct, which do not require approval of the General Meeting as per § 9 or the approval of the Supervisory Board as per § 15.'

previous wording of §20.1:

'1. Any matters related to the transacting of the Bank's business not specifically reserved under the general laws or these Articles of Association for the discretion of the Annual General Meeting or the Supervisory Board shall fall within the powers of the Management Board, including the purchase and sale of real property, an interest in real property or perpetual usufruct, which do not require approval of the General Meeting as per § 9 section 1 point 5.';
13) § 22 section 6 of the Articles of Association was deleted:

previous wording of §22.6:

'6. The Management Board shall provide the Supervisory Board with periodical reports on risk management, capital adequacy and the effectiveness of the internal control system.';

14) Following Chapter IV. Governing Bodies of the Bank, a new Chapter IVa. Rules of Disposal of the Bank's Non-Current Assets was added to the Articles of Association , as follows:

'IVa. Rules of Disposal of the Bank's Non-Current Assets
§ 23b
1. Non-current assets with a value exceeding 0.1% of total assets shall be disposed of in a tender procedure, with the reservation of sections 5 and 6.
2. The tender shall be conducted by the Bank or another entity commissioned by the Bank to conduct the tender.
3. Intending to dispose of non-current assets as mentioned in section 1, the Management Board shall set the tender method and procedure, including in particular:
1) how information about the tender is to be made available,
2) how the asking price of the non-current assets to be disposed is to be determined if the tender formula assumes that the Bank should set an asking price,
3) the minimum requirements to be satisfied by a bidder and by a bid,
4) the final date for tendering bids and the end date of the tender,
5) the conditions under which the price may be reduced below the asking price or the conditions of the tender might be changed or the tender might be terminated without selecting a bid,
- taking into account the need to safeguard the interest of the Bank.
4. Where the disposal of non-current assets requires approval of the General Meeting, the Bank may only perform the act in law leading to the disposal of such non-current assets subject to prior approval expressed by the General Meeting.
5. Where non-current assets are to be disposed of by approval of the General Meeting, the obligation to follow the tender procedure shall not apply.
6. Where the disposal of non-current assets does not require approval of the General Meeting, the Management Board may choose not to follow the tender procedure, subject to prior notification to the Supervisory Board of its intention not to follow the tender procedure, if:
1) the non-current assets to be sold were previously purchased by the Bank in execution, bankruptcy or restructuring proceedings or a part of another arrangement with a Bank's debtor, or
2) the necessity to follow the tender procedure might expose the Bank to a loss (in particular by adversely affecting the conditions of the disposal of the non-current assets) or if it might cause the Bank to breach the requirements of the law or regulatory enactments.';

15) § 36 of the Articles of Association received the following wording:
'§ 36
Whenever a reference is made in the Articles of Association to:
1) 'non-current assets' - they shall be understood as the Bank's assets which are non-current assets in the sense of the Act of 29 September 1994 on Accounting,
2) 'affiliated entity' - it shall be understood as an affiliate in the sense of the Act of 29 September 1994 on Accounting,
3) 'dominant entity' and 'subsidiary' - it shall be understood as the entity defined in § 10 section 9,
4) 'related party' - it shall be understood as a related party in the sense of the law on trading in financial instruments,
5) 'total assets' - it shall be understood as total assets in the sense of the Act of 29 September 1994 on Accounting, determined on the basis of the most recent approved financial statements of the Bank.'.

previous wording of §36:

'§ 36
Each reference in the Articles of Association to:
1) 'affiliated entity' - shall mean an affiliated entity as defined in the regulations governing trade in financial instruments;
2) 'dominant entity' and 'subsidiary' - shall mean the person specified in § 10 section 9;
3) 'controlled entity' - shall mean a 'controlled entity' as defined in the Act of 29 September 1994 on Accounting (uniform text Journal of Laws of 2002, No. 76, item 694, as amended).'.