Corporate Governance

Interim report 1/2016
Report on the application of the Best Practices
Informacja na temat stanu stosowania przez Spółkę rekomendacji i zasad zawartych w Zbiorze Dobre Praktyki Spółek Notowanych na GPW 2016.pdf_-_Adobe_Reader
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On the basis of par. 29.3 of the Rules of the Warsaw Stock Exchange Stalprofil SA submits a report on non-application of the principles of the particulars contained in "Good Practices of WSE Listed Companies 2016"

Information policy and communication with investors

IZ1.10. financial projections - when the company decided to publish them - published for at least the past 5 years, with information on the degree of implementation
Not applicable.
The Company over the last five years did not publish financial forecasts.

IZ1.20. record of the proceedings of the general meeting, in the form of audio or video.
The Company does not apply this rule.
In the Company's past practice of documenting the conduct of general meetings of the Company presents the actual course of the general meeting of the Company and ensures transparency and protects the rights of all shareholders. Information regarding the contents of adopted resolutions, including the results of voting on resolutions, as well as information on withdrawing from consideration any of the items on the agenda and information on the reported objections to the protocol, the Company publishes in the form of current and publishes on its website. In addition, multimedia presentations presented during the general meeting are published on the Company's website. The Company believes that investors have therefore opportunity to familiarize themselves with all the relevant issues raised at the meeting. The Company does not preclude application of the aforementioned. rule in the future.

The Management Board and Supervisory Board

II.Z.3. At least two members of the supervisory board meets the independence criteria referred to in Rule II.Z.4.
The Company does not apply this rule,
STALPROFIL SA Supervisory Board has one member meeting the independence criteria. That member is the Chairman of the Supervisory Board. Statements about fulfilling the criteria of independence, in accordance with the principle of II.Z.5 were made ​​by the members of the Supervisory Board of STALPROFIL SA, the other members of the Supervisory Board and Management Board show that other members of the Council do not meet the criteria of independence. The Company has three major shareholders, which include 77% of votes at the General Meeting. The other members of the Supervisory Board are related to these shareholders. According to the Company Authorities it does not affect negatively the effective supervision of the Company's activities, and even allows a proper and effective implementation of the Company's development strategy, which takes into account the interests of all groups of shareholders and other stakeholders related to the Company's business. The Issuer does not preclude compliance with this rule in the future and start applying this principle after receiving information on the appointment of Board members meet the independence criteria.

II.Z.8. The Chairman of the Audit Committee meets the independence criteria specified in principle II.Z.4.
The Company does not apply this rule.
The Supervisory Board of STALPROFIL SA has a three-person Audit Committee, selected by the Supervisory Board from among its members. The basic criterion, which is guided by the Supervisory Board during the selection are the qualifications necessary to serve as a member of the Audit Committee. The Chairman and the other members of the Audit Committee meet the independence criteria described in Article. 56 sec. 3 points 1, 3 and 5 of the Act dated 7 May 2009 on auditors and their self-government, entities authorized to audit financial statements and public supervision. The Chairman of the Audit Committee, however, does not meet the independence criteria defined in the Annex II to the Commission Recommendation of 15 February 2005 on the role of non-executive or supervisory directors of listed companies and on the committees of the (supervisory). According to the Company Authorities it does not affect negatively the effectiveness of monitoring by the Audit Committee carried out within the Company's internal audit function, risk management, compliance, internal audit and issue by its members unbiased opinions and judgments.

Internal systems and functions

III.Z.2. Subject to the principle III.Z.3, those responsible for risk management, internal audit and compliance report directly to the president or another member of the board and also have the opportunity of reporting directly to the Supervisory Board or the audit committee.
The Company does not apply this rule.
Given the specificity its activities and flat organizational structure, the Company did not separate in their structure the unit responsible for risk management, internal audit and compliance. Supervision over the whole process of internal control is exercised by the Supervisory Board. Company management process is highly centralized (low degree of delegation), and the members of the Board as directors of the various organizational departments take operational decisions. The Management Board presents the Audit Committee and the Supervisory Board own assessment of the effective functioning of the systems and functions referred to above. An important role in the Company's existing continuous multi-stage process for monitoring the internal audit process by the Supervisory Board and entering in the composition of the Audit Committee. The tasks of the Audit Committee include, among others, to monitor the financial reporting process and monitoring the effectiveness of internal control systems, as well as risk management process relevant to the Company. The Audit Committee through close contact with an external auditor conducting the financial audit activities monitors the process of preparing financial statements and the quality of cooperation of the Board with the auditor. In the process of control over the Company's Management Board is also supported by advisors and external auditors.

The General Meeting and relations with shareholders

IV.Z.2. If it is justified due to the shareholding structure of the company, the company provides publicly available meeting broadcast in real time.
The Company does not apply this rule.
The Company determines the place and date of the general meeting so as to enable the participation of the greatest number of shareholders. The company also makes it possible to attend general meetings of media representatives. All information provided by law for the general meeting and the resolutions taken shall be provided in relevant current reports and on the Company's website. The Company also publishes on its website multimedia presentations presented during general meetings. In view of this, there is no serious justification for incurring at the moment the additional costs in order to enable transmission of the proceedings of the general meeting in real time. In the case of interest on the part of shareholders, the Company does not exclude the application of these rules in the future.


VI.Z.2. To link the remuneration of the Board Members and key managers with long-term business objectives and financial resources of the company, the period between the award under the incentive program options or other instruments linked to shares of the company, and the possibility of their implementation should be at least 2 years.
Not applicable.
The Company has not launched the program based incentive options or other instruments linked to shares of the company.