Activities of the corporate bodies of the Bank

General Shareholders Meeting

Operation of the General Meeting

General Meetings are held in the registered office of the Bank in Bydgoszcz or in Warsaw. Ordinary Shareholders’ Meetings are convened by the Management Board of the Bank.

Extraordinary Shareholders' Meetings may be convened if necessary by the Management Board following its own decision or as requested by shareholders representing at least 1/20 of the share capital. The General Meeting is convened and prepared in accordance with the provisions of the Code of Commercial Companies and the Bank's By-laws.

The Ordinary Shareholders’ Meeting convened by the Management Board in line with the routine procedure is held once a year, within six months of the end of each financial year.

The Supervisory Board may convene an Ordinary Shareholders’ Meeting if the Management Board fails to do so within the statutory deadline, or an Extraordinary Shareholders’ Meeting if necessary.

Further, in specified cases, shareholders are entitled to call or request the calling of the General Meeting. The shareholders may participate in the General Meeting and vote in person or through a plenipotentiary.

Issues to be raised at the General Meeting are presented to the Supervisory Board for consideration and approval.

Resolutions of the General Meeting, except from specific cases, are passed in open voting by an ordinary majority of votes, unless stated otherwise in the Code of Commercial Companies, or in the By-laws. Secret voting takes place when appointing and dismissing members of Bank’s bodies or liquidators, deciding on their prosecution and in personnel related matters. Further, secret voting may take place if at least one shareholder present or represented at the General Meeting requests so.

The By-laws do not allow voting by correspondence or using electronic means of communication.

The Supervisory Board of the Bank is appointed and dismissed by the General Shareholders’ Meeting in secret voting.

The manner of resolving when appointing members of the Supervisory Board is determined by the common law, including Code of Commercial Companies and the By-laws, whose provisions regarding the procedure were modified by resolutions of Extraordinary Shareholders' Meeting of 12 July 2013 and 1 August 2013.

The provisions describe the manner of appointing Supervisory Board members from among shareholders, including representation of individual shareholders in the body and principles of appointing independent members, their number and conditions they should fulfil.

Key powers of the General Meeting
General Shareholders’ Meeting should in particular:

• analyze and approve Management Board’s report on the activities of the Bank and financial statements for the previous financial year;
• decide on profit distribution / loss coverage;
• grant a vote of acceptance to members of the Bank’s bodies.

Further, the powers of the General Meeting includes resolving on:

• appointment and dismissal of Supervisory Board members;
• amending the By-laws;
• increase or decrease of the share capital;
• approving the Supervisory Board operation rules;
• redemption of shares and conditions thereof;
• recognition and derecognition of special funds;
• issues of bonds;
• appointing of liquidators;
• other matters raised by the shareholders and Supervisory Board;
• determining principles of remuneration and employment conditions for the Management Board Chairman.

In 2013, Ordinary Shareholders’ Meeting was held on 15 March.During the meeting, 100 percent of the share capital was represented and resolutions were passed regarding:

• approval of the Management Board’s report on the activities of Bank Pocztowy S.A. in 2012;
• approval of the Management Board’s report on the activities of Bank Pocztowy S.A. in 2012;
• approval of the Management Board’s report on the activities of Bank Pocztowy S.A. Capital Group in 2012;
• approval of the consolidated financial statements of the Bank Pocztowy Capital Group for 2012;
• distribution of profit generated by Bank Pocztowy S.A. in 2012;
• a vote of acceptance for members of the Bank’s Management Board for 2012;
• a vote of acceptance for members of the Bank’s Supervisory Board for 2012.

During 2013, six Extraordinary Meetings were called, during which the following resolutions were passed:

• on the issue of short-term bonds of Bank Pocztowy S.A.;
• on amending the By-laws of Bank Pocztowy S.A.;
• on amending the Supervisory Board’s operating rules;
• on approving the policy of selecting and evaluating the Supervisory Board’s Members.

Supervisory Board

In accordance to the Code of Commercial Companies, the Management Board and Supervisory Board manage and supervise the Bank, respectively.

The Supervisory Board exercises general supervision of the Bank’s operations.

Composition

The Supervisory Board consists of seven members appointed and dismissed by the General Meeting. The members are appointed for a joint office term of three years. The By-laws provide a detailed description of cases when the number of Supervisory Board Members drops below seven.

In each case it happens the Management Board is obliged to promptly, within 14 days at the latest, convene the General Meeting in order to organize a by-election.
The mandates of members of the Supervisory Board expire as of the date of the General Meeting approving the financial statements for the last full financial year during which the members have held their positions. If a new member is elected during the office term, his/her mandate expires along with the mandate of the other members. Further, the mandate expires in the case of death, resignation or dismissal.

The present 9th term of office of the Supervisory Board commenced in June 2011 and will end in 2014 once the financial statements of the Bank for 2013 have been approved.

The Chairman of the Supervisory Board is appointed by Poczta Polska S.A., a shareholder, while the Vice Chairman by PKO Bank Polski S.A., another shareholder, from among appointed members (also if the Supervisory Board is elected in separate groups). The Supervisory Board members may elect a Secretary among themselves.

The By-laws provisions describe the manner of appointing Supervisory Board members from among shareholders, including representation of individual shareholders in the body and principles of appointing independent members, their number and conditions they should fulfil.

Following amendments to the By-laws of Bank Pocztowy S.A. introduced by resolutions of Extraordinary Shareholders’ Meeting of 12 July 2013 and of 1 August 2013, Janusz Wojtas resigned from the position of the Supervisory Board Chairman, remaining its Member.

As at 31 December 2013 the composition of the 9th term of office Supervisory Board was as follows:

• Jerzy Jóźkowiak - Chairman of the Board;
• Jakub Papierski - Vice-Chairman of the Supervisory Board;
• Piotr Michalski - Secretary of the Supervisory Board;
• Paweł Borys - Member of the Supervisory Board;
• Mariusz Czyżak - Member of the Supervisory Board;
• Bogusław Grabowski - Member of the Supervisory Board;
• Janusz Wojtas - Member of the Supervisory Board.

Competencies of the Supervisory Board members have been presented at the Bank's website at:
http://www.pocztowy.pl/pdf/o_banku/Statut_Banku_Pocztowego.pdf.

Operation

The Supervisory Board operates in accordance with the Rules developed by it and approved by the General Meeting. Its meetings are called in the manner determined in the Rules, at least four times in each financial year.
The Supervisory Board may pass resolutions provided that at least half of its members are present at a meeting, including the Chairman or Vice Chairman, if all its members have been invited to the meeting. The members may participate in the passing of resolutions giving their votes in writing through other members of the Supervisory Board.

The Supervisory Board may pass resolutions among its meetings, in writing or using remote communication media (e-mail, fax etc.).On 15 November 2013, Extraordinary Shareholders’ Meeting of Bank Pocztowy S.A. approved amendments to the Supervisory Board's Operating Rules regarding the detailed procedures of passing resolutions in writing and using remote communication media and participation of its members in voting through another member of the Supervisory Board or through remote communication media.

The passing of resolutions pursuant to the above procedures does not include election of the Secretary, appointing, suspending and dismissing of Management Board members.
Resolutions of the Supervisory Board are adopted with an absolute majority of votes cast. In case of a tie, the Chairman has the deciding vote if present at the meeting.

Supervisory Board’s Meetings

The agenda and issues to be discussed during the Supervisory Board’s meetings held in 2013 were determined by the Chairman of the Supervisory Board resulted from the ongoing operations of the Bank, and included issues raised by the Management Board and Supervisory Board Members.

Supervisory Board’s decisions had the form of resolutions, approvals regarding Management Board’s motions and information materials presented by the Bank.

In 2013, the Supervisory Board held six meetings supervising the ongoing operations of the Bank.

Audit Committee

The Audit Committee is a body within the Supervisory Board.

Its members are appointed by the Supervisory Board from among its members. Its operational rules are approved by the Supervisory Board.

The Audit Committee is in particular responsible for:

• monitoring of the financial reporting process;
• monitoring of effectiveness of the internal control mechanisms, internal audit and risk management processes;
• monitoring of financial audit;
• monitoring of the unbiased approach and independence of the certified auditor and the entity authorized to audit financial statements;
• recommending an entity authorized to audit financial statements to the Supervisory Board for the purpose of auditing or reviewing financial statements of the Bank.

According to the Audit Committee Operating Rules approved by the Supervisory Board on 19 May 2011, amended by the Resolution of the Supervisory Board of 16 October 2013, the Audit Committee consists of at least three people, including the Chairman, appointed by the Supervisory Board from among its members. At least one Committee member should be independent and have accounting/auditing qualifications. At present, Bogusław Grabowski, the Audit Committee Chairman, meets these requirements.

The Audit Committee meets at least once a quarter. Its meetings are called by the Chairman upon his own decision or following a motion of its member. Had the Chairman been unable to call a meeting for any reason, it may be called by another Committee member appointed by the Chairman. The Committee meetings may be called following a motion of another Supervisory Board Member, the Management Board, an internal or external auditor of the Bank, in particular if the Internal Audit Head escalates material disputable issues with the Management Board. The Committee may operate if at least half of its members are present. Its resolutions are adopted with an absolute majority of votes cast by the members present at the meeting. In the case of a tie, the person chairing the meeting holds the deciding vote.

If necessary, the Audit Committee, following an initiative of its Chairman or another member appointed by the Chairman, may pass resolutions among the meetings in writing or using remote communication media.

In 2013, no changes in the composition of the Audit Committee occurred.

As at 31 December 2013 the composition of the Audit Committee was as follows

• Bogusław Grabowski - Audit Committee Chairman;
• Piotr Michalski - Audit Committee Member;
• Paweł Borys - Audit Committee Member.

The Audit Committee provides the shareholders with reports of its activities for the previous reporting year. The reports are attached to the set of documents prepared for the General Meeting for information purposes.

No other committees have been appointed by the Supervisory Board.

Management Board

Appointing and dismissing Management Board Members

According to the Bank’s By-laws, the Management Board consists of 3 to 5 members appointed by the Supervisory Board. Composition of the Management Board: Chairman, Vice Chairmen, including First Vice Chairman, Members. The members are appointed for a joint three-year office term.

The mandates of members of the Management Board expire as of the date of the General Meeting approving the financial statements for the last full financial year during which the members have held their positions. Further, the mandate expires in the case of death, resignation or dismissal.

The mandate of a Management Board Member appointed during the term of office expires at the same time as the mandate of the remaining members.

According to the Code of Commercial Companies, the General Meeting can dismiss or suspend a Management Board member.

The Management Board Chairman, Vice Chairmen and other Members are appointed and dismissed by the Supervisory Board, which considers their qualification to hold these positions and acts in accordance with the Banking Law and guidelines regarding evaluation of qualifications of managing body members and holders of key positions issued pursuant to Article 16 of Regulation (EU) no 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority).

Two Management Board Members: the Chairman and Member in charge for risk management are appointed upon an approval of the Polish Financial Supervision Authority.

Composition

As at 31 December 2012 the composition of the 8th term of office Management Board was as follows:

• Tomasz Bogus – Chairman of the Management Board,
• Szymon Midera – Vice Chairman of the Management Board,
• Radosław Sałata – Member of the Management Board,
• Michał Sobiech – Member of the Management Board.

On 28 February 2013 the Supervisory Board elected the Management Board for the 9th term of office. The Supervisory Board’s resolutions appointing the Management Board Members became effective as of 15 March 2013 (the date of the Ordinary Shareholders' Meeting that approved the financial statements of the Bank for 2012 and granted the vote of approval to the Management Board for 2012).

Composition of the 9^th term of office Management Board:

• Tomasz Bogus – Chairman of the Management Board,
• Szymon Midera – Vice Chairman of the Management Board,
• Radosław Sałata – Member of the Management Board,
• Michał Sobiech – Member of the Management Board.

Qualifications and professional experience of the Management Board Members
 

Tomasz Bogus (Chairman of the Board, supervising Strategic Management, Legal Support, Security and IT areas) has held the Chairman position since 7 October 2009.

He commenced his professional career in 1991 in Powszechny Bank Gospodarczy S.A. in Łódź as an inspector in the Legal Office and Management Board’s Secretariat. Then he held the position of a specialist in the Restructuring Department. On 1 August 1997, he was appointed a Deputy Director in Enterprise Banking Department of PBG S.A. From December 1998 to August 2001 he worked in Austria Creditanstalt Poland S.A. Bank as a Branch Director in Łódź.

From September 2001 to March 2006 he worked in BRE Bank S.A. - Multibank, first as Deputy Director of Commercial Management Department, where he was in charge of, among others, development of the network of POS, commercial representatives and remote distribution channels, and then as Director in Retail Banking Sales Department. Among others, he was in charge of managing sales in MultiBank, preparing and performing sales plans, managing business lines and distribution channels. From April 2006 to June 2008 he worked in BRE Bank S.A. as Bank Director in charge of management of corporate branches and was responsible for management of sales and servicing of large, medium and small enterprises and the network of corporate branches. He joined Bank Pocztowy in October 2008, when he was appointed a Management Board Member in charge of cash management and corporate banking.

By education, he is a lawyer. In 1991 he graduated from Law and Administration Faculty of the University of Łódź. In January 2000 he obtained a certificate of a legal counsel. In 2006 he completed the post-graduate BAI school in Madison, U.S., and in 2008, INSEAD in Fontainebleau, France. He is a graduate of Advanced Management Program in Harvard Business School.

Szymon Midera (Vice Chairman of the Board, in charge of Retail Banking, Development of Network and Logistics) has held the position of the Vice Chairman since 15 July 2008.

He commenced his professional career in November 1999 in the Provincial Office in Łódź as Advisor to the First Vice Governor of Łódź. From November 2001 to December 2002 he held the position of Advisor to Chairman of the Management Board in Charge of Communication in Bank Częstochowa S.A.

From November 2001 to March 2005 he worked in BRE Bank S.A. – mBank, as the Spokesman, Head of Press Office and then as the Head of Communication and Brand Management Department. In 2005-2007 in BRE Bank S.A. he held the position of Vice Director of Marketing and Investor Relations Department. From August 2007 to July 2008 he worked in BRE Bank S.A. - mBank as Director of Marketing and Business Development Office.

By education, he is an economist. In 1999 he graduated from Economics and Sociology Faculty of the University of Łódź, specializing in International Business and Political Relations. In 2008, also at Łódź University, but in the Management Faculty, he completed Executive MBA in PAM Center delivered by Towson University and Robert H. Smith School Business with an MBA certificate of Towson University. In November 2013, the completed Advanced Management Programme at INSEAD.

Radosław Sałata (Management Board Member supervising Clearing and Corporate Banking and Treasury Department) has held the position of the Board Member since 1 July 2012.

Prior to becoming the Management Board Member, he worked as an expert in AT Kearney, a strategic advisory firm, where he performed financial sector projects involving among others restructuring of the financial services retail sale network, preparation of banking product implementation for corporate clients or preparing feasibility study regarding market launch of a modern financial institution heavily relying on remote access channels. In 2007-2008, as a co-founder and Vice Chairman of the Management Board of Finamo S.A. he was in charge of developing an independent financial advisory firm for individuals and SME, operating across the country. In 2005-2007 he introduced Eurobank EFG in Poland under the business name of Polbank EFG, where as Director in charge of Partner Networks and Vice Chairman of the Management Board of Polbank Dystrybucja sp. z o.o. was responsible for establishing and managing of a network of franchise branches, mobile and broker sales.

Prior to joining the banking sector, he was in charge of tariff policy in Polkomtel S.A.

He graduated from Accounting and Finance Management (Management Faculty) and International Business and Political Relations (Economics and Sociology Faculty) of the University of Łódź.

Michał Sobiech (Management Board Member supervising Finance, Risk and Client Service) has held the Board Member position since 7 October 2009.

He commenced his professional career in 1998 in Banking Department of KPMG Polska Audyt. He remained with that firm until 2004, the latest position occupied being a Manager. In 2004-2009 he worked for Kredyt Bank S.A., among others as Director of Financial Reporting Department and Director of Risk Management Department.

In 2009, prior to being appointed the Management Board Member in the Bank, he worked in Bank Pocztowy S.A. as Finance Function Managing Director.

By education, he is an economist. In 1999 he graduated from Finance and Banking Faculty of the Warsaw School of Economics. In 2010 he completed Advanced Management Program at IESE Business School. He is a member of ACCA.

Competencies

The Management Board manages the Bank and represents it before third parties in the scope determined by the Code of Commercial Companies, the Bank’s By-laws and Operating Rules of the Management Board.

When performing its tasks, the Board makes decisions in the forms of resolutions; in particular, the Board

• determines the Bank’s strategy;
• determines the pricing policy;
• determines the annual financial plan;
• determines the employment and remuneration policy;
• approves the Management Board’s Operating Rules;
• approves the Organizational Rules of the Bank;
• appoints proxies;
• designs and ensures efficient operation of the management system;
• makes decisions regarding liabilities or assets whose total value related to a single entity exceeds 5 percent of equity or grants the related general or specific authorization regarding cash investments in domestic and foreign securities;
• determines the principles of prudent and stable management of the Bank to include:

– risk management policy;
– internal control principles;
– capital management principles, including internal capital estimation;
– variable salary component policy;

• determines the general level of the risk incurred by the Bank and appropriately adjusted internal limits that reduce the risk specific to individual operation areas;
• determines the Bank’s compliance risk policy;
• approvers internal procedures of the Bank regarding estimation of internal capital, capital management and planning;
• approves the Bank’s information policy.

Operation

The Management Board operates pursuant to the Management Board Operating Rules developed by it and approved by the Supervisory Board. Chairman of the Board manages its operation. Its meeting are called and chaired by the Chairman, and in his absence, the First Vice Chairman. In the absence of the latter, a Board Member appointed pursuant to the order determined in a resolution of the Management Board.

Resolutions of the Management Board are passed with an absolute majority of votes. In case of a tie, the Chairman has the deciding vote if present at the meeting. A resolution may be passed provided all the members of the Management Board have been properly informed about the planned meeting.

In 2013, the Management Board held 52 meetings.

When performing its statutory tasks regarding the Bank’s operation, during the meetings the Board analyzed a variety of issues, in particular regularly focusing on:

• current performance of individual business functions compared to the financial plan and the consolidated performance of the Capital Group;
• reports on management of selected risks, including credit risk, operational risk, market, liquidity, commercial and capital adequacy risk.

Further, the Management Board monitored key strategic projects of the Bank that required its direct support.

Reports presented on a regular basis during the Management Board meetings included:

• compliance, to include key information on material events and changes that occurred in the reporting period in the supervised areas, as well as for compliance of internal regulations and processes of the Bank with the law;
• performance of the Bank strategy and summary of the status of each project, including the strategic ones commenced by the Bank;
• regarding internal audits held in the Bank, as well as implementation of the resulting recommendations and regulatory requirements;
• activities of committees operating in the Bank, including ALCO, Credit Committee, Operational Risk and Donation Committee.

With regard to issues raised in relation to banking operations, the Management Board discussed and decided on approval of directional activities recommended by business areas, to include implementation of conceptual assumptions of product, deposit and capital policy.

Further, the Management Board analyzed issues subsequently raised during Supervisory Board and General Shareholders’ Meetings and those related to amendments in the Bank’s By-laws that necessitated implementation.

Internal regulations to be implemented or amended that necessitated adjustment of internal regulations to the expectations, recommended good practices and other recommendations issued by banking sector supervisors were another important topic discussed by the Board in the scope regarding various aspects of banking operations, e.g. loans, deposits, bancassurance and risk management. Further, the Board discussed changes to regulations arising directly from organizational changes in the Bank, those related to development or ongoing operations.

Bank Pocztowy S.A. has the following committees:

• Assets and Liabilities Committee (ALCO);
• Loan Committee (LC);
• Operational Risk Committee (ORC);
• IT Initiatives Prioritization Committee (ITIPC);
• Loan Appellation Committee (LAP);
• Strategic Prioritization Committee (SPC).

The committees operate based on internal regulations approved by the Management Board of the Bank. In principles, these regulations described tasks and competencies of a given committee.

The Management Board Members are included in the following committees: Loan Committee, Assets and Liabilities Committee, Operational Risk Committee.

Remuneration paid to members of the Management Board and Supervisory Board of the Group Companies

In 2013, the total remuneration (calculated as the sum of remuneration, bonuses, benefits in cash, in kind or in any other form) paid to the Management Board Members of the Group Companies amounted to PLN 2,650 thousand compared to PLN 3,018 thousand in the previous year.

Remuneration paid to members of the Management Board and Supervisory (PLN '000)

	2013	2012
Management Board	2,650	3,018
Short-term employee benefit (payroll, bonuses and payroll charges)	2,556	2,963
Termination benefits	94	55
Supervisory Board	2,138	1,968
Short-term employee benefit (payroll, bonuses and payroll charges)	2,138	1,968

 

Principles of granting the annual bonus to the Management Board Members

The Management Board Members of Bank Pocztowy S.A. may receive annual bonuses pursuant to the Act on remunerating managers of certain entities of 3 March 2000 and Ordinance of the Minister of Administration and Digitalization of 15 October 2013 regarding annual bonuses for managers of certain entities.

The above Ordinance determines detailed principles of granting the annual bonus to the individuals referred to in Article 2.1 to 2.4 of the Act on remunerating of managers of certain entities of 3 March 2000.

According to the executory regulations, in the case of Bank Pocztowy S.A.:

• the Supervisory Board applies for the bonus for the Chairman of the Management Board to the General Meeting;
• the annual bonus for the Vice Chairman and Members of the Management Board is granted by the competent body as determined in labor law regulations, i.e. by the Supervisory Board.

The executive regulations determine general principles of granting bonuses. The annual bonus may be granted to an entitled individual if the entity:

• has generated a financial profit or significantly reduced a net loss;
• has efficiently implemented its tasks and statutory objectives;
• has timely settled its liabilities under public law;
• has obtained approval of its financial statements for the financial year if these financial statements are subject to such approval, or has submitted correctly prepared financial statements for the financial year.

The annual bonus is payable to the entitled individuals only if they held the managerial position for the entire financial year and did not breach their obligations as employees during the period, whose employment or management contracts have not been terminated through their fault, who have not been dismissed from their positions for reasons justifying a contract termination without a notice through an employee’s fault.

The application for the bonus should be submitted within three months of the date of approving the financial statements of the entity for the previous financial year or of submitting its correctly prepared financial statements for the previous financial year if they are not subject to an approval.¹

The annual bonus may be granted within three months of the date of approving the entity’s financial statements for the financial year, if subject to an approval, or of submitting the correctly prepared financial statements for the financial year. The granting of the annual bonus must be justified. The justification must include the proposed amount, reason for its granting and information on the effects of the payment on the financial standing of the entity.²

Securities issued by the Bank, held by the Management Board Members

As at the date of this report, the Management Board Members held no securities issued by the Bank.

Index:
1 In accordance with the Ordinance of the Minister of Administation and Digitalization of 15 October 2013 regarding annual bonus for managers of certain business entities, the application for the 2012 annual bonus should be submitted within 14 days of the effective date of the Ordinance.
2 In accordance with the Ordinance of the Minister of Administation and Digitalization of 15 October 2013 regarding annual bonus for managers of certain business entities, the entitled individuals may be granted with 2012 annual bonus within 14 days of the effective date of the Ordinance.