As at 31 December 2018, the Group was composed of KGHM Polska Miedź S.A. – the Parent Entity – and 75 subsidiaries (including five closed-end, non-public investment funds), located on four continents: Europe, North America, South America and Asia. Some of these subsidiaries form their own groups. The largest of these, in terms both of the number of entities as well as the value of equity, was the KGHM INTERNATIONAL LTD. Group, whose main assets are located in Canada, the USA and Chile. It was comprised of 25 subsidiaries. As at the end of the reporting period the KGHM Polska Miedź S.A. Group owned shares in two joint ventures - Sierra Gorda S.C.M. and NANO CARBON Sp. z o.o.
The Group’s main entities, which are engaged in the mining sector, comprise three primary reporting segments which are independently evaluated by management bodies. These are: KGHM Polska Miedź S.A., KGHM INTERNATIONAL LTD. and Sierra Gorda S.C.M. Other companies, excluding Future 1 Sp. z o.o., Future 2 Sp. z o.o., Future 3 Sp. z o.o., Future 4 Sp. z o.o., Future 5 Sp. z o.o., Future 6 Sp. z o.o. and Future 7 Sp. z o.o., are part of the segment called Other segments.
Structure of the KGHM Polska Miedź S.A.
1 - joint venture valued using the equity method
2 - non-consolidated subsidiary
Structure of the KGHM INTERNATIONAL LTD.
1 - joint venture valued using the equity method
2 - actual share of the Group 80%
Main reporting segments of the KGHM Polska Miedź S.A. Group
|KGHM Polska Miedź S.A.||KGHM INTERNATIONAL LTD.||Sierra Gorda S.C.M.|
Joint venture of KGHM INTERNATIONAL LTD. and Sumitomo Group companies
|Activities||mined and metallurgical production of metals – Cu, Ag, Au||mined production of metals - Cu, Ni, Au, Pt, Pd||mined production of metals - Cu, Mo, Au, Ag||This item includes other Group companies (each company represents a separate operating segment).|
|Main production assets||underground mines:|
- Lubin mine
- Polkowice-Sieroszowice mine
- Rudna mine
- Legnica Copper Smelter and Refinery
- Głogów I Copper Smelter and Refinery and Głogów II Copper Smelter and Refinery
- Cedynia Wire Rod Plant
|Robinson mine in the USA (open pit)||Sierra Gorda mine in Chile (open pit)|
|Głogów Głęboki-Przemysłowy (Deep Głogów)|
pre-production projects and exploration projects in south-west Poland
|Victoria project in the Sudbury Basin in Canada - construction of an underground copper and nickel mine|
Sierra Gorda Oxide project in Chile
In the remaining segments of the KGHM Polska Miedź S.A. Group several sub-groups may be distinguished:
- companies supporting the core business of KGHM Polska Miedź S.A.,
- closed-end investment funds and portfolio companies,
- companies serving an important role in CSR policy,
- special purpose companies in the holding structure, and
- companies targeted for restructuring or divestment.
Organisational structure of KGHM Polska Miedź S.A.
In 2018, the multi-divisional organisational structure of the Company, acting under the name KGHM Polska Miedź S.A., comprised the Head Office of the Company and 10 Divisions.
Organisational structure of the Company as at 31 December 2018
Ownership structure and share price of the Company KGHM Polska Miedź S.A. on the Stock Exchange
KGHM Polska Miedź S.A. debuted on the Warsaw Stock Exchange (WSE) in July 1997. The Company’s shares are traded on the primary market of the WSE in the continuous trading system and are a component of the WIG, WIG20 and WIG30 indices, the sector index WIG-GÓRNICTWO and – until 10 July 2018 – the WIGdiv index. Continuously since 19 November 2009, the Company has participated in the RESPECT Index, which confirms its conformance with the highest standards of social responsibility. The RESPECT Index highlights those companies which are managed in a sustainable and responsible manner, and also highlights their investment attractiveness.
Pursuant to an announcement by FTSE Russell, on 24 September 2018 Poland’s status was amended from that of an emerging market to a developed market. Consequently, since September 2018, KGHM Polska Miedź S.A. has been a component company of the FTSE4Good Index Series. The FTSE4Good Index Series is part of the group of ethical investment indicators, reflecting criteria of corporate social responsibility and ESG risk management.
The year 2018 was unsuccessful for the stock market. The main indices of the WSE dropped: WIG by 9%, WIG20 by 7% and WIG30 by 9%. The FTSE 350 Mining index – an index comprised of companies from the mining sector, listed on the London Stock Exchange – also fell, by nearly 9%. The share price of KGHM Polska Miedź S.A. on the WSE fell during 2018 by 20%, from PLN 111.20 recorded on 29 December 2017 to PLN 88.88 at the end of 2018. During the same period the price of copper – the Company’s main product – recorded a drop of 17%, alongside an increase in the average USD/PLN exchange rate by 8%.
On 15 January 2018 the Company’s shares reached their maximum closing price for the year of PLN 115.00. The minimum closing price of PLN 82.56 was recorded on 11 September 2018.
Share price of KGHM Polska Miedź S.A. versus the WIG index and FTSE 350 mining index
Key share price data of KGHM Polska Miedź S.A. on the Warsaw Stock Exchange in the years 2017-2018 are presented in the following table:
|Symbol: KGH, ISIN: PLKGHM000017||Unit||2018||2017|
|Number of shares issued||million||200||200|
|Market capitalisation of the Company at year’s end||PLN billion||17.8||22.2|
|Average trading volume per session||000’ shares||601||790|
|Turnover value||PLN million||13 890||23 251|
|Change in share price from the end of the prior year||%||-20.1||+20.2|
|Highest closing price during the year||PLN||115.00||135.50|
|Lowest closing price during the year||PLN||82.56||92.17|
|Closing price from the last day of trading in the year||PLN||88.88||111.20|
The dialogue with stakeholders, among whom shareholders are of particular significance, is for us a key aspect of the Company’s operations. For KGHM Polska Miedź S.A., as a global company operating on three continents, it is a priority to ensure equal access to information to all members of the global capital markets. KGHM Polska Miedź S.A.’s actions are aimed at maintaining regular communication and transparent dialogue with investors and analysts as well as at ensuring conformance with our regulatory legal obligations.
The Company fulfils its disclosure obligations by publishing regulatory filings and periodic reports via the official reporting system (ESPI). The Company’s representatives communicate with investors by regular participation in investor conferences and meetings with investors and analysts both in Poland and abroad. Another form of communication by the Company with the market are conference calls and video conferences organised in response to stakeholder needs.
Publication of the Company’s financial results is accompanied by a conference open to all stakeholders, which is webcast live in Polish and English, and includes the possibility of sending questions via e-mail as well as listening-in by phone. Playbacks of conferences are available on the Company’s website at www.kghm.com in the Investors section. The Investors section is continuously updated with the latest information and documents. This section also includes regulatory filings and periodic reports, information on the shareholder structure, documents related to general meetings and corporate governance, as well as presentations and videos for investors.
Sell-side reports on KGHM Polska Miedź S.A. were published by 11 analysts based in Poland and 9 based abroad.
In accordance with the Resolution No. 10/2018 of the Ordinary General Meeting of KGHM Polska Miedź S.A. dated 6 July 2018 regarding the allocation of profit from financial year 2017, all of the profit was transferred to the Company’s share capital.
|Dividend paid in the financial year from prior years’ profit||PLN million||200||-|
1dividend per share paid in the given financial year divided by the closing price in the last trading day in the given financial year
Ownership structure and the Company’s outstanding shares
As at 31 December 2018, the share capital of the Company, in accordance with the entry in the National Court Register, amounted to PLN 2 000 million and was divided into 200 million shares, series A, fully paid, having a face value of PLN 10 each. All shares are bearer shares. Each share grants the right to one vote at the General Meeting. The Company has not issued preference shares.
In 2018, there was no change in either registered share capital or in the number of outstanding shares issued.
During this time there was a change in the ownership structure of significant blocks of shares of KGHM Polska Miedź S.A. In 2018, the Company was informed of increases in the total number of votes at the General Meeting of KGHM Polska Miedź S.A. above 5% by two pension funds: Aviva Otwarty Fundusz Emerytalny Aviva BZ WBK (in an announcement dated 17 July 2018) and Otwarty Fundusz Emerytalny PZU „Złota Jesień” (in an announcement dated 16 October 2018).
The Company’s shareholder structure as at 31 December 2018 was as follows
|Shareholder||Number of shares/votes||% of share capital|
/total number of votes
|State Treasury1||63 589 900||31.79%|
|Nationale-Nederlanden Otwarty Fundusz Emerytalny2||10 104 354||5.05%|
|Otwarty Fundusz Emerytalny PZU „Złota Jesień”3||10 099 003||5.05%|
|Aviva Otwarty Fundusz Emerytalny Aviva BZ WBK4||10 039 684||5.02%|
|Other shareholders||106 167 059||53.09%|
|Total||200 000 000||100.00%|
1based on a notification received by the Company dated 12 January 2010
2based on a notification received by the Company dated 18 August 2016
3based on a notification received by the Company dated 16 October 2018
4based on a notification received by the Company dated 17 July 2018
On 18 February 2019, the Company was informed of a decrease in the total number of votes at the General Meeting of KGHM Polska Miedź S.A. below 5% by the pension fund Otwarty Fundusz Emerytalny PZU „Złota Jesień”. The Company’s shareholder structure as at the date this report was signed was as follows:
Shareholder structure as at the date this report was signed
|Shareholder||Number of shares/votes||% of share capital|
/total number of votes
|State Treasury||63 589 900||31.79%|
|Nationale-Nederlanden Otwarty Fundusz Emerytalny||10 104 354||5.05%|
|Aviva Otwarty Fundusz Emerytalny Aviva BZ WBK||10 039 684||5.02%|
|Other shareholders||116 266 062||58.14%|
|Total||200 000 000||100.00%|
Other shareholders, whose total ownership of the share capital and share in the total number of votes amounts to 58.14%, are mainly institutional investors, both international and domestic.
Geographic shareholder structure of KGHM Polska Miedź S.A. (%)
Following is the geographic distribution of the shareholder structure of KGHM Polska Miedź S.A. The data is based on research into the Company’s shareholder structure performed in October 2018.
Source: CMi2i, October 2018
The Company does not hold any treasury shares. The Management Board of the Company is unaware of any agreements which could result in changes in the proportion of the Company’s shares held by present shareholders in the future. Based on information held by KGHM Polska Miedź S.A., as at 31 December 2018 and at the date this report was signed, no Member of the Management Board of the Company held shares of KGHM Polska Miedź S.A. or rights to them.
Amongst the Members of the Company’s Supervisory Board, as at 31 December 2018 and at the date this report was signed, only Józef Czyczerski held 10 shares of KGHM Polska Miedź S.A. with a total nominal value of PLN 100. Based on information held by the Company, the remaining Members of the Company’s Supervisory Board did not hold shares of KGHM Polska Miedź S.A. or rights to them.
As far as the Company is aware, Members of the Management Board and Supervisory Board did not hold shares of the related entities of KGHM Polska Miedź S.A. as at 31 December 2018 and at the date this report was signed. The Company did not have an employee share incentive program in 2018.
Corporate Governance Statement
KGHM Polska Miedź S.A., whose shares are listed on the Warsaw Stock Exchange, in 2018 was subject to the corporate governance principles described in the document „Code of Best Practice for WSE Listed Companies 2016” which was adopted by Resolution No. 26/1413/2015 of the Warsaw Stock Exchange Supervisory Board on 13 October 2015. These principles are available at the official website of the Warsaw Stock Exchange devoted to this subject (https://www.gpw.pl/best-practice) as well as at the website of KGHM Polska Miedź S.A. under the section devoted to corporate governance https://kghm.com/en/investors/corporate-governance/governance-compliance
KGHM Polska Miedź S.A. has endeavoured at every stage of its operations to carry out the recommendations and principles respecting “Best Practice” for listed companies. In 2018, KGHM Polska Miedź S.A. did not comply with recommendation IV.R.2 from „Best Practice…”, according to which, if justified, a company should enable its shareholders to participate in general meetings using electronic means of communication, in particular through the real–time broadcast of general meetings, real-time bilateral communication whereby shareholders may take the floor during a general meeting from a location other than the general meeting, and also exercise the right to vote during a general meeting either in person or through a proxy.
In the Company's opinion, introduction of the possibility of participation in General Meetings using electronic means of communication may carry risk factors of a legal and technical nature leading to interference with the efficient conduct of General Meetings, and as a result to the possible questioning of any resolutions adopted. In the Company’s opinion, current principles of participation in the General Meetings of KGHM Polska Miedź S.A. enable all shareholders to exercise the rights attached to owning the shares and protect the interests of all shareholders. The Company is considering introducing the aforementioned recommendation in situations when their technical and legal aspect no longer raises any doubts, and when such introduction will be justified by a real need for this form of communication with shareholders. Since 2016 KGHM Polska Miedź S.A. has been providing real-time streaming webcasts of its General Meetings.
Corporate governance structure in KGHM Polska Miedź S.A.
The General Meeting (GM) of KGHM Polska Miedź S.A. is the Company’s highest authority. It meets in either Ordinary or Extraordinary form, based on generally prevailing law, the Statutes of the Company and the “Bylaws of the General Meeting of KGHM Polska Miedź S.A. with its registered head office in Lubin”. GMs are convened by the Company’s Management Board. In situations defined by the Commercial Partnerships and Companies Code, General Meetings may be convened by the Supervisory Board or by shareholders. The Statutes of KGHM Polska Miedź S.A. also authorise the Polish State Treasury to convene a General Meeting. The General Meeting of the Company is convened by an announcement published on the Company website and in the manner set forth in the Act dated 29 July 2005 on public offerings and conditions governing the introduction of financial instruments to organised trading, and on public companies. A General Meeting may adopt resolutions if at least one-fourth of the share capital is represented. Resolutions are adopted by a simple majority of votes cast, unless the law or the Company’s Statutes state otherwise. The principles for conducting a General Meeting are set forth by the Commercial Partnerships and Companies Code and the Company’s Statutes. Additional issues related to the functioning of the General Meeting are regulated by the “Bylaws of the General Meeting of KGHM Polska Miedź S.A. with its registered head office in Lubin” adopted by the GM on 17 May 2010, which are available on the Company’s website www.kghm.com.
The schedule of work on organising the General Meetings of the Company is planned in such a way as to ensure that the obligations towards shareholders are properly met and to enable them to exercise their rights.
Shareholders and their rights
Shareholders of the Company exercise their rights in a manner and within the limits prescribed by prevailing law, the Statutes of the Company and the Bylaws of the General Meeting of KGHM Polska Miedź S.A. Shareholders are entitled to exercise their voting rights either personally or through a proxy. The authority to participate in a General Meeting and to exercise voting rights should be granted in writing or in electronic form. All of the shares are bearer shares. Each share represents one vote.
There is no limitation to the transfer of ownership rights to the shares of the Company or with respect to the execution of voting rights on the shares of the Company, other than those generally prescribed by laws in force.
The Company has not issued securities which would grant special control rights in respect of the Company.
A shareholder is entitled in particular to the following:
- to convene an Extraordinary General Meeting if the said shareholder represents at least half of the share capital or has been authorised by a court of registration and represents at least one-twentieth of the share capital,
- to announce draft resolutions during a General Meeting which are in regard to matters introduced to the agenda,
- in accordance with the Statutes, the Polish State Treasury as a shareholder may convene an Ordinary General Meeting if the Management Board does not do so in the statutory timeframe as well as an Extraordinary General Meeting if it considers its convening as warranted,
- to request that a matter included in the agenda be removed or not considered,
- to order the convening of an Extraordinary General Meeting and to include specified matters on the agenda of this General Meeting, if the shareholder or shareholders represent at least one-twentieth of the share capital, and
- to order the inclusion of specified matters on the agenda of the next General Meeting, if the shareholder or shareholders represent at least one-twentieth of the share capital.
The Supervisory Board of KGHM Polska Miedź S.A. is the permanent supervisory authority of KGHM Polska Miedź S.A., in all of the Company’s functional areas. According to the Statutes of the Company, the Supervisory Board is composed of 7 to 10 members appointed by the General Meeting, 3 of whom are elected by the Company’s employees. The Members of the Supervisory Board are appointed for a mutual term in the office, which lasts three years. The Supervisory Board selects from among its members a Chairman of the Supervisory Board, his Deputy and, if needed, a Secretary. The Supervisory Board should meet at least once a quarter. For resolutions of the Supervisory Board to be valid all of the members of the Supervisory Board must be invited to attend and resolutions must be adopted by an absolute majority of votes in the presence of at least one-half of the members.
The Supervisory Board operates on the basis of generally prevailing law, the Statutes of the Company and the Bylaws of the Supervisory Board. The Bylaws and Statutes of the Company are available on the Company’s website, www.kghm.com.
The composition of the Supervisory Board and its changes in 2018 are presented in the Section 17.3 of this report.
The following members of the Supervisory Board of KGHM Polska Miedź S.A submitted declarations on meeting independence criteria, specified in principle no. II.Z.4. of “Best Practice of GPW Listed Companies 2016”: Andrzej Kisielewicz, Jarosław Janas, Janusz Kowalski, Bartosz Piechota, Marek Pietrzak, Agnieszka Winnik – Kalemba.
Supervisory Board Committees
Within the structure of the Supervisory Board are three committees which serve in an auxiliary role to the Supervisory Board in the preparation of assessments, opinions and other actions aimed at reaching decisions which must be made by the Supervisory Board.
The Audit Committee is responsible for supervision in the areas of financial reporting, the internal control system, risk management and internal and external audits.
|The composition of the Audit Committee in 2018:|
|1 January – 5 July||23 July - 31 December|
The Remuneration Committee is responsible for supervising the performance of the duties set forth in the contracts signed with the Management Board, the remuneration system and benefits paid out in KGHM Polska Miedź S.A. and the Group, training and other benefits provided by the Company, as well as audits performed by the Supervisory Board in this regard.
|The composition of the Remuneration Committee in 2018:|
|1 January – 5 July||23 July - 31 December|
The Strategy Committee supervises the realisation of Company strategy, the Company's annual and multi-year operating plans, supervising the coherence of these documents, and also provides its opinion to the Supervisory Board on the strategic projects presented by the Management Board of the Company and any changes thereto, as well as on the Company's annual and multi-year operating plans.
|The composition of the Strategy Committee in 2018:|
|1 January – 5 July||23 July - 31 December|
The detailed rights, scope of activities and manner of work of these Committees are described by bylaws approved by the Supervisory Board. After the end of the year the Audit, Remuneration and Strategy Committees submit reports on their activities to the Supervisory Board.
The duties of the Management Board include all matters pertaining to the functioning of the Company which have not been reserved by the Commercial Partnerships and Companies Code and the Statutes of the Company to the duties of the General Meeting and the Supervisory Board. A detailed description of the Management Board’s scope of duties and obligations and the manner in which it functions may be found in the Bylaws of the Management Board.
According to the Statutes of KGHM Polska Miedź S.A., the Company’s Management Board may be composed of 1 to 7 persons, appointed for a mutual term of office. The term of office of the Management Board lasts three consecutive years. The number of members of the Management Board is set by the Supervisory Board, which appoints and dismisses the President of the Management Board and the Vice Presidents. The Supervisory Board appoints the members of the Management Board following the conduct of qualification proceedings, the goal of which is to review and evaluate the qualifications of candidates and to select the best candidate for Member of the Management Board, with due regard being given to sec. 5 and sections 7 to 12 concerning the appointment or recall of an employee-elected member of the Management Board. The members of the Management Board, including any such chosen by the employees, may be recalled by the Supervisory Board prior to the expiration of their term, which in no way shall interfere with their rights arising from their employment contract or other legal relationship relating to their functioning as a member of the Management Board. The result of elections of an employee-elected member of the Management Board, or the result of voting for their recalling, shall be binding upon the Supervisory Board, as long as in the said voting for either their appointment or recalling at least 50% of the Company’s employees have participated. The election and recall of an employee-elected member of the Management Board requires an absolute majority of the votes cast.
The Management Board operates based on generally prevailing law, the Statutes of the Company and the Bylaws of the Management Board of KGHM Polska Miedź S.A. For resolutions of the Management Board to be valid at least two-thirds of the members of the Management Board must be present. Resolutions of the Management Board are approved by a simple majority of the votes cast. In the case of a tie vote being cast either for or against a given resolution, the President of the Management Board casts the deciding vote.
A detailed list of the matters requiring a resolution of the Management Board is included in the Bylaws of the Management Board of KGHM Polska Miedź S.A. approved by the Supervisory Board.
The authority of the Management Board to pass decisions on the issuance or redemption of shares is statutorily limited. The shares of the Company may be redeemed given shareholder consent through their acquisition by the Company. A resolution of the General Meeting on the redemption of shares may be preceded by an agreement entered into with a shareholder. In accordance with §29 sec. 1 point 6 of the Statutes of the Company, any increase in share capital or issuance of shares requires the approval of the General Meeting. The same holds true for the issuance of bonds (§29 sec. 1 point 10 of the Statutes of the Company). The Management Board of the Company does not have the authority to increase the share capital or issue the shares of the Company under conditions specified in art. 444-446 of the Commercial Partnerships and Companies Code.
The Management Board
President of the Management Board
Graduate of the Institute of Social Policy and the European Institute of Regional and Local Development at the University of Warsaw. He finished his MBA at the Institute of Economics, Polish Academy of Sciences. He has experience in the management of commercial law companies, restructuring projects and corporate supervision.
President of the Management Board of KGHM Polska Miedź S.A and chairman of the Employers’ Organization of Polish Copper. Previously president of the management board of Agencja Rozwoju Przemysłu S.A., where he successfully restructured the following companies: Przewozy Regionalne, H. Cegielski – Fabryka Pojazdów Szynowych, Świętokrzyskie Kopalnie Surowców Mineralnych. Since January 2016 a Member of the Supervisory Board of PZU S.A. Co-founder and president of the management board of Invent Grupa Doradztwa i Treningu Sp. o.o. in the years 2006 – 2015. President of the economic think tank Fundacja Republikańska in the years 2011 – 2015.
Member of Narodowa Rada Rozwoju (the National Development Council), an advisory body to the President of the Republic of Poland, and of the Jury of the Economic Awards of the President of Poland.
The President of the Management Board is responsible for:
- activities related to overall risk management at the corporate level as well as internal auditing and controlling within the Group,
- the preparation, implementation and execution of the Company’s Strategy and Policy of Sustainable Development,
- activities related to comprehensive management of security and preventing losses in the Group,
- corporate supervision standards and compliance with the corporate governance standards adopted by the Company,
- overall corporate oversight over the Group’s subsidiaries in Poland and abroad,
- compliance with formal reporting and publishing obligations within the scope required by law,
- activities related to creating, updating and maintaining the uniformity of the organisation’s internal regulations to maintain consistent operating principles,
- providing organisational and legal services to the Company’s bodies,
- providing legal services to the Company,
- activities related to communications and corporate image-building within the Group,
- the shaping of relations with the Company’s external business environment,
- on the Founder’s behalf – supervision of the functioning of the KGHM Polish Copper Foundation as well as other organisations serving the public, which support achievement of the Group’s business goals,
- internal control,
- the activities of the Data Center (COPI) with respect to:
- supplying and developing information and communication services required for the proper functioning of the Head Office,
- the rational utilisation by management of ordered and contracted goods and services, and
- activities related to human resources management.
Vice President of the Management Board (Development)
Graduate of the Wrocław University of Economics, Faculty of Economics, Management and Tourism.
Involved with PKO Bank Polski S.A. from January 2011, where he served as a manager and director. Among others, he was responsible for supervision over the implementation of investment projects and optimisation of business processes, as well the preparation of development plans and improvements in areas under his supervision. Co-responsible for execution of cost optimisation under the bank’s business strategy. Supported the process of business expansion of PKO Bank Polski S.A. Responsible for the implementation of procurement policy in the Group’s companies.
He was employed from 2002 to 2010 in the company Bank Zachodni WBK S.A., where he cooperated in the implementation of investment projects. He was also responsible for the optimisation and supervision over the realisation of network contracts.
He has an extensive experience in the areas of standardisation and normalisation of business processes.
The Vice President of the Management Board (Development) is responsible for:
- advancement of the Company’s R&D policy,
- advancement of the Company’s innovation and intellectual property protection policy,
- coordination of the Company’s investments and development projects,
- the development, updating and monitoring of execution of the Group’s equity investments plan,
- shaping of the Company’s products portfolio,
- initiation, development and implementation of management standards in the process of managing projects and programs,
- acquisition and development of the mining resources base in Poland,
- management of real estate,
- overseeing the Company’s administrative services,
- the work of the Central Procurement Office.
Vice President of the Management Board (International Assets)
Graduate of the Warsaw University, Faculty of Law and Administration.
An Undersecretary of State in the Ministry of Finance from November 2016 to September 2018. Co-author of the tax reform. As a representative of the minister responsible for financial institutions he was also a member of the Polish Financial Supervision Authority.
An Undersecretary of State in the Ministry of the State Treasury from April to November 2016. He managed a portfolio of companies with State Treasury ownership and state legal entities. He worked on reforming supervision over State Treasury companies. An expert and a management board member of Fundacja Republikańska (Republican Foundation) from 2007 to 2016. He was a partner and a management board member of MMR Consulting sp. z o.o., as well as a partner in the tax consultant office GWW Tax from 2007 to 2016. He worked in the Artur Andersen and Ernst & Young consultancy companies from 2000 to 2006. He managed interdisciplinary consultant projects for Polish and international companies from the industrial and financial sector.
Author and co-author of numerous publications on taxes and social security.
Vice President of the Management Board (International Assets) is responsible for:
- the preparation and implementation of strategy for international assets,
- activities related to acquiring and developing the International resource base,
- analysis, assessment and preparation of new international exploration projects,
- preparation of studies and expert opinions concerning international resource base projects,
- coordination of tasks with respect to the plan of the Company’s equity investments in international subsidiaries,
- substantive oversight over the Group’s international production entities, including the creation and execution of their production plans,
- the shaping of the Company’s commercial and logistics policies.
Vice President of the Management Board (Finance)
Graduate of the Warsaw School of Economics. She completed her doctoral studies at the Collegium of Management and Finance of the Warsaw School of Economics, where she obtained the degree of doctor of economic studies and the degree of doctor habilitatus of economics in the field of finance.
Long-time employee in the banking sector. Researcher at the Warsaw School of Economics since 2007. Associate Professor in the Department of Corporate Finance, Institute of Finance, the Collegium of Management and Finance of the Warsaw School of Economics. Head of the postgraduate studies course „Windykacja należności” (“Debt collection”) and „Bezpieczeństwo finansowe w obrocie gospodarczym” (“Financial security for business”) at the Warsaw School of Economics. In the years 2016-2018 involved with Poczta Polska S.A., in which she performed the duties of executive director of the Finance Section and director of the Treasury Office.
She has experience in finance, planning, budgeting, credit management and financial reporting. An expert in financial liquidity, sources of financing, factoring and collection of debt.
Author and co-author of numerous publications in finance, among others: „Finanse spółki akcyjnej” (“Finances of a joint-stock company”), „Podstawy finansowania spółki akcyjnej” (“Basics of financing a joint-stock company”), „Aktywne zarządzanie płynnością finansową przedsiębiorstwa” (“Active management of a company’s financial liquidity”), „Płynność finansowa. Istota, pomiar, zarządzanie” (“Financial liquidity. Essence, measurement, management”), „Windykacja należności – ujęcie interdyscyplinarne” (“Collection of debt – the interdisciplinary approach”), „Windykacja polubowna i przymusowa. Proces, rynek, wycena wierzytelności” (“Amicable and compulsory collection of debt. The process, market and debt valuation”), „Faktoring w prawie cywilnym, podatkowym i bilansowym” (“Factoring in civil, tax and balance sheet law”) and „Skarbnik korporacyjny” (“Corporate Treasurer”).
Vice President of the Management Board (Finance) is responsible for:
- the shaping of the Group’s financial policy;
- review of the Main Strategy’s projects in terms of their financial feasibility;
- finances in all of the Group’s operations and activities;
- the creation of Group tax policy; and
- the Company’s accounting services.
Vice President of the Management Board (Production)
Graduate of the AGH University of Science and Technology in Kraków, Department of Mining and Geology – underground mining. He finished his MBA at the Wielkopolska Business School of the Poznań University of Economics and Business as well as the KGHM Executive Academy, managed jointly with IMD Business School in Switzerland. He finished the prestigious managers’ program “Personal Leadership Academy program” at the ICAN Institute.
Involved with the KGHM Polska Miedź S.A. Group since the beginning of his professional career. He was gradually promoted at the Polkowice-Sieroszowice mine: from intern, to senior miner, shift foreman, section foreman, manager of mining operations unit, chief mining engineer/ deputy manager of mining plant operation. He served in the function of vice president (operation development) in the company KGHM INTERNATIONAL in Canada, and was responsible for the portfolio of international assets in North and South America in the years 2015 - 2016. Subsequently, he was an executive director in the Polkowice-Sieroszowice mine. Since 2017, he has also served as a vice president of the management board of MBA CLUB of the Wielkopolska Business School of the Poznań University of Economics and Business.
An active member of KGHM’s rescue team since 2000. He achieved third place in team competition in the International Mines Rescue Competition which took place in the USA (2008). As a captain, he led his team to victory in the competition called “Virtual Comory” in the International Mines Rescue Competition in Australia (2010).
Co-author of the following publications: „Wdrożenie zarządzania procesowego w KGHM Polska Miedź S.A.” (“Implementation of process management in KGHM Polska Miedź S.A.”) and „Koncepcje biznesowe branży wydobywczej. Studium KGHM Polska Miedź S.A.” (“Business concepts of the mining industry. Study of KGHM Polska Miedź S.A.”).
The Vice President of the Management Board (Production) is responsible for:
- the integrated planning and optimisation of the Company’s production;
- occupational health and safety and control of environmental risks;
- activities with respect to maintaining readiness of the production and non-production assets and achievement of the main goals of the Energy Strategy;
- activities with respect to manufacturing products and development of the primary mine and metallurgical production,
- overseeing activities connected with the implementation, maintenance and improvement of management systems in the Company.
Chairman of the Supervisory Board
A graduate of the Faculty of Mathematics and Computer Science of Wrocław University. Obtained a doctorate degree in mathematics at the Polish Academy of Sciences in Warsaw. He obtained his title of doctor habilitatus from Wrocław University, and he obtained the title of professor in mathematics in 2001. Currently, he is a professor at Wrocław University, and has worked there since 1993.
He gained professional experience in international science facilities: the University of Manitoba (Winnipeg, Canada,1989-1990), Technische Hochschule Darmstadt (Germany, 1990-1992) and Vanderbilt University (Nashville, USA, 2001-2002). In addition, he has had many short-term International internships, among others in France, Italy, Austria and Israel. He obtained two of the most prestigious science scholarships in the world: the Alexander von Humboldt scholarship and the Fulbright scholarship.
He also has many years of experience in working on supervisory boards. Among others, he has been a member and chairman of the supervisory boards of companies such as „Spedtrans” sp. z o.o., „Teta” S.A. and PKO BP S.A.
He is an author of over seventy scientific publications in mathematics, logic and computer sciences in international publications, as well as an author of three books in Polish („Logika i argumentacja” (“Logic and argument”), ”Sztuczna inteligencja i logika” (”Artificial intelligence and logic”), „Wprowadzenie do informatyki” (”Introduction to computer science”)).
Deputy Chairman of the Supervisory Board
Leszek Banaszak is a graduate of the University of Warsaw, with a Master’s Degree in Political Science.
For the past 30 years he has been continuously associated with government administration (including nine years in the diplomatic service). Among others he has worked in the Governmental Press Office, the Ministry of Environmental Protection, Natural Resources and Forestry, the Ministry of International Economic Cooperation, the Ministry of the Economy and the Ministry of Energy. He has been responsible among others for bi-lateral coordination of Poland in the area of environmental protection, coordination of activities by the Polish administration arising from the cooperation of Poland with international institutions and organisations in the area of environmental protection, among others for cooperation under the Organisation of Baltic Sea States (HELCOM), coordination of activities by Poland under the Pan-European Conference of Ministers of Environmental Protection, coordination of activities with respect to international cooperation in meeting the stipulations of the United Nation’s framework convention on climate change. Also cooperated under the European Economic Commission (EEC UN) in Geneva and the UN Commission on Sustainable Development (CSD UN) in New York. He was the chief negotiator in the area „Environment” during the negotiations regarding Poland’s membership in the Organisation of Economic Cooperation and Development (OECD) in Paris. He was also responsible for coordination of cooperation between the Republic of Poland and the OECD, the Republic of Poland and the WTO (World Trade Organisation) and oversaw cooperation with the World Bank and the European Bank for Reconstruction and Development. Also connected with the Department of Energy of the Ministry of the Economy, responsible for international cooperation and European integration (was the chief negotiator in the negotiating area „Energy” during the negotiations regarding Poland’s membership in the European Union), also coordinated legislative work arising from the adaptation of Polish laws to those of the EU. Was also responsible for cooperation with international organisations and institutions, acting in the area of energy, among others the Organisation of Economic Cooperation and Development (OECD), the International Energy Agency (IEA), the European Economic Commission of the United Nation (UN ECE), the UN Commission on Sustainable Development (CSD UN), the Secretariat of the Energy Card Treaty (ECT), the Council of Baltic Sea States and the World Energy Council (WEC). In the years 2004-2009 and 2012-2016 worked in the diplomatic service in sections of the Polish Embassy in London. Since 2016 associated with the Department of Renewable Energy in the Ministry of Energy.
Has many years of experience working on supervisory boards. Among others he has been chairman of the supervisory board of Krajowa Agencja Poszanowania Energii (The Polish National Energy Conservation Agency), currently he also serves in the function of chairman of the supervisory board of HUTMAR S.A.
Secretary of the Supervisory Board
An attorney with a doctorate in law from Wrocław. From 2009 to 2010 he researched British public healthcare at the University of Exeter School of Law (UK), resulting in a doctorate “Prywatyzacja brytyjskiego sektora publicznego na przykładzie National Health Service” (“Privatisation of the British public sector, illustrated by the National Health Service”). An entrepreneur continuously from 1999, an academic teacher, member of the management board of Fundacja Sancta Familia (Sancta Familia Foundation) in Wrocław since 2005, Chairman of the Estate Council of Biskupin-Sępolno-Bartoszowice-Dąbie in the years 2009-2013, a volunteer in Ilford Park Polish Home (UK) 2009-2010, member of the Wrocławska Rada ds. Budżetu Obywatelskiego (Wrocław Citizen’s Budget Council) in the years 2015-2017, member of the Supervisory Board of Polska Agencja Inwestycji i Handlu S.A. (State Treasury) in the years 2016-2018, and an expert in healthcare reform (2018). In the years 2011 – 2018, he was an author of research papers on British law, privatisation of the public sector, judicial control of public administration and healthcare law. He has nearly twenty years of experience in management.
Secondary technical education. Since 1979 employed in the Rudna mine of KGHM Polska Miedź S.A., an underground electromechanic. Chairman of the trade union Krajowa Sekcja Górnictwa Rud Miedzi NSZZ Solidarność. Employee-elected member of the Supervisory Board of KGHM Polska Miedź S.A. in the years 1999-2011, and then from 2014.
Master’s degree in Law, Master’s degree in Administration.
Currently a member of the Management Board of Polska Wytwórnia Papierów Wartościowych S.A. In 2016 Vice President of the Management Board (Corporate Affairs)/(Operations) of the company Polskie Górnictwo Naftowe i Gazownictwo S.A., responsible for coordination of corporate supervision of the PGNiG S.A. Group and of the security and communications department. In 2016 he was a member of the board of directors of PGNiG Upstream International AS, Stavanger, Norway. In the years 2014- 2015 Vice president of Opole city supervising the departments of sport, social policy, security and local affairs as well as supervision over OTBS sp. z o.o. In 2014 he served as Advisor to the Management Board of Proton Relations sp. z o.o., Warsaw; in the years 2009-2013 was a member of the management board of this company. In 2008 he was a chief specialist in the Team for Energy Security in the National Security Bureau. In the years 2018-2010 he was a Member of the team for Energy Security in the Chancellery of Lech Kaczyński – the late President of the Republic of Poland. In the years 2006-2008 he worked in the team of Vice Minister Piotr Naimski in the Ministry of Economy.
Currently a Member of the Council of the PWPW Foundation. In addition, he has been a member of the following supervisory boards: Poczta Polska S.A., Gas – Trading S.A., System Gazociągów Tranzytowych EuRoPol Gaz S.A., Energetyka Cieplna Opolszczyzny S.A., Opole; Investgas S.A. (PGNiG S.A. Group), Operator Logistyczny Paliw Płynnych sp. z o.o., Płock.
Secondary technical education. Since 1988 a mining machinery operator in Przedsiębiorstwo Budowy Kopalń „PeBeKa” S.A. in Lubin (formerly called Zakład Robót Górniczych w Lubinie). Since 2012 Chairman of the Plant Committee of the trade union NSZZ „Solidarność” in PeBeKa S.A.; and since 2015 Secretary of the Employee Council in PeBeKa S.A. Since 2014 has served as Deputy Chairman of the trade union Krajowa Sekcja Górnictwa Rud Miedzi NSZZ „Solidarność”. Previously, in the years 2011 – 2015 was Chairman of the Employee Council in PeBeKa S.A.
Bartosz Piechota is a lawyer, a graduate of the Faculty of Law and Administration of the University of Warsaw and also of Cardiff University Law School (Diploma in Legal Studies). Also completed the School of American Law conducted by the University of Florida Levin College of Law and the University of Warsaw. Has many years of experience in providing legal services to the largest Polish and foreign companies, in particular with respect to resolving disputes and restructurisation as well as with respect to corporate law. In recent years he has acted as a consultant, among others, in the realisation of a variety of key infrastructural investments. Since 2010 he has been a founding partner of a leading law firm in Poland involved in resolving disputes and restructurisation. Previously he worked in international and Polish law firms, among others Allen & Overy and Wardyński i Wspólnicy. In the period from 2014 to 2016 he served as Liaison Officer for the International Bar Association in the restructurisation and bankruptcy section responsible for Central and Eastern Europe. He is a member of the International Bar Association and is also the author of publications, as well as a lecturer at international and Polish conferences. Since December 2016 he has been a member of the Supervisory Board of PLL Lot S.A. For many years he has cooperated in the role of expert with Fundacja Republikańska (Republican Foundation).
Legal Adviser. A graduate of the Department of Law and Administration of Łazarski University in Warsaw and the Private Higher School of Business and Administration in Warsaw. In 2013, he finished his legal adviser apprenticeship in the District Chamber of Legal Advisers in Warsaw and was licensed to perform the profession. He also finished management and business studies (MBA) at the Warsaw Management University, accredited by the Apsley Business School of London and was granted the title of Executive Master of Business Administration.
He has professional experience in public administration and practical experience in supervision and management of commercial law companies, including those where the State Treasury is one of the shareholders. In his professional practice he concentrates on providing legal services to corporate entities. His chief specialisations are civil and economic law, in particular corporate law, as well as labour law.
Currently, Marek Pietrzak serves as President of the Management Board of Orlen Asfalt Sp. z o.o. and as Chairman of the Supervisory Board of Polskie Radio Regionalna Rozgłośnia w Warszawie Radio dla Ciebie S.A.
Secondary technical education. Since 1982 employed at the Sieroszowice Mine of KGHM Polska Miedź S.A. in the position: mining machinery and tools mechanic. Since 1992 Chairman of the Plant Committee of the trade union NSZZ „Solidarność” in the Sieroszowice Mine, and following the merger of the Sieroszowice and Polkowice mines, since 1996 Chairman of the Plant Committee of the trade union NSZZ „Solidarność” in the Polkowice-Sieroszowice mine. Since 2012 an employee-elected Member of the Supervisory Board of KGHM Polska Miedź S.A. Deputy Chairman of the Board of the trade union Sekcja Górnictwa Rud Miedzi NSZZ „Solidarność”. Treasurer of the Board of the Secretariat for Mining and Energy of the trade union NSZZ „Solidarność”. Member of the National Committee of the trade union NSZZ „Solidarność”.
Attorney, graduate of the Department of Law of Wrocław University. Also a graduate of the faculty of Public Administration at Georgetown University in Washington D.C.; and of the faculty of Public Administration and Business Law at the University of Kentucky.
She passed her bar exam in 2003 under the District Bar Council in Wrocław and was certified to practice the profession.
Since 2003 owner of a Law Office. In the years 2006 - 2010 served as an advisor and regular associate of the late Member of Parliament Aleksandra Natalii – Świat. In the years 1999 - 2003 gained experience as an apprentice attorney-at-law at Kazimierz Cyrklewicz’s Law Office in Wrocław. In addition, was previously Manager of the Legal Services Office of the Lower Silesia Marshal’s Office in Wrocław and was Legal Assistant to the Chairman of the Chamber of Regions of the European Council in Strasbourg, Parliament of the Voivodeship of Wrocław. Also gained experience as Legal Assistant in the Law Offices of Bowles, Keating, Matuszewich & Fiordalisi Chicago – Milan – Rome, a Partnership of Professional Corporation, Chicago USA.
Was Deputy Chairwoman and member of the Supervisory Board of PKO BP S.A. Currently she is also the Chairwoman of the Audit Committee of the Supervisory Board of KGHM Polska Miedź S.A.
Changes in the Parent Entity’s bodies
Management Board of the Company
In accordance with the Statutes of KGHM Polska Miedź S.A. the members of the Management Board are appointed and dismissed by the Supervisory Board. As at 1 January 2018, the composition of the 9th-term Management Board of KGHM Polska Miedź S.A. was as follows:
|First name and last name||Position|
|Radosław Domagalski-Łabędzki||President of the Management Board|
|Ryszard Jaśkowski||Vice President of the Management Board (Production),|
|Michał Jezioro||Vice President of the Management Board (International Assets),|
|Rafał Pawełczak||Vice President of the Management Board (Development),|
|Stefan Świątkowski||Vice President of the Management Board (Finance).|
Changes in the composition and division of duties of the Management Board in 2018:
|Date||Description of changes:|
|10 March 2018||The Supervisory Board:|
|22 June 2018|
The Supervisory Board adopted resolutions on the appointment (as at the date of conclusion of the Ordinary General Meeting of KGHM Polska Miedź S.A. approving the financial statements for the financial year ending 31 December 2017) to the composition of the 10th term Management Board of Marcin Chludziński, Katarzyna Kreczmańska-Gigol and Radosław Stach.
|6 July 2018|
In accordance with the aforementioned resolutions, as at the date of conclusion of the General Meeting of KGHM Polska Miedź S.A. Marcin Chludziński assumed the position of President of the Management Board, Katarzyna Kreczmańska-Gigol – the position of Vice President of the Management Board (Finance), and Radosław Stach – the position of Vice President of the Management Board (Production).
|23 July 2018||The Supervisory Board assigned, until the date of appointment of Members of the Management Board of KGHM Polska Miedź S.A. selected under qualification proceedings:|
|24 August 2018|
The Supervisory Board appointed Adam Bugajczuk and Paweł Gruza to the composition of the Management Board, and at the same time the Supervisory Board set the number of Members of the 10th term Management Board at five Members of the Management Board.
Finally, from 24 August 2018 to 31 December 2018 the composition of the Management Board was as follows:
|First name and last name||Position|
|Marcin Chludziński||President of the Management Board|
|Adam Bugajczuk||Vice President of the Management Board (Development)|
|Paweł Gruza||Vice President of the Management Board (International Assets)|
|Katarzyna Kreczmańska-Gigol||Vice President of the Management Board (Finance)|
|Radosław Stach||Vice President of the Management Board (Production)|
On 25 September 2018, there was a change in the Organisational Regulations of KGHM Polska Miedź S.A., as a result of which there were changes in the areas supervised by individual members of the Management Board. The main changes in the areas supervised by the members of the Management Board were as follows:
|Position||Description of changes:|
|President of the Management Board|
|Vice President of the Management Board (International Assets)|
|Vice President of the Management Board (Development)|
|Vice President of the Management Board (Production)|
Supervisory Board of the Company
In accordance with the Statutes of the Company the members of the Supervisory Board are appointed and dismissed by the General Meeting. As at 1 January 2018, the composition of the 9th-term Supervisory Board of KGHM Polska Miedź S.A. was as follows:
|First name and last name||Position|
|Michał Czarnik||Deputy Chairman|
|Janusz Marcin Kowalski|
|Wojciech Andrzej Myślecki|
|elected by employees:|
On 3 April 2018, Wojciech Andrzej Myślecki submitted his resignation from serving as a Member of the Supervisory Board. On 6 July 2018, the Ordinary General Meeting of KGHM Polska Miedź S.A. appointed the 10th-term Supervisory Board od the Company.
The composition of the Supervisory Board from 6 July 2018 to 31 December 2018 was as follows:
|First name and last name||Position|
|Leszek Banaszak||Deputy Chairman|
|Janusz Marcin Kowalski|
|elected by employees:|
Remuneration of the Parent Entity’s bodies and of other key managers of the Group
As a result of the coming into force of the Act dated 9 June 2016 on the terms of setting the remuneration of individuals managing certain companies, the Supervisory Board – acting under the authority granted by the Extraordinary General Meeting of the Company KGHM Polska Miedź S.A., setting the principles of employment and remuneration of Management Board Members – established templates for the management services contracts for the Company’s Management Board. Based on the aforementioned contract templates, management services contracts were signed with individual members of the Management Board for the time in which they served in management functions, based on a mandate lasting one term until its expiry. This means that the termination of a Contract will occur on the final day on which the function is served, with no notice period and without the need to take additional actions.
The total remuneration received on the basis of these contracts is comprised of a fixed part, representing basic monthly remuneration, and a variable part, representing supplementary remuneration for the Company’s financial year.
Pursuant to a decision of the EGM, the amount of fixed monthly remuneration for individual members of the Company’s Management Board is within a range of seven- to fifteen times the average monthly remuneration in the corporate sector, exclusive of the annual bonus paid in the fourth quarter of 2016, announced by the President of the Central Statistical Office.
Variable remuneration depends on the level of achievement of the management goals set by the Supervisory Board and may not exceed 100% of the fixed remuneration for the time during which the subject of a given contract is performed (with the proviso that it is longer than three months).
Based on the Statutes of KGHM Polska Miedź S.A., the Bylaws of the Supervisory Board, the management services contracts and resolutions of the Ordinary and Extraordinary General Meetings, the Supervisory Board confirmed the Management Goals (key performance indicators – KPI) for the Management Board of KGHM Polska Miedź S.A. for 2018.
The Management Goals to be achieved, stipulating the conditions under which variable remuneration for the Company’s financial year may be received, are as follows:
- application of the principles of remunerating members of management and supervisory bodies, pursuant to the act dated 9 June 2016 on the terms of setting the remuneration of individuals managing certain companies, in all of the Group’s companies;
- execution of the duties described in art. 17-20, art. 22 and art. 23 of the act dated 16 December 2016 on the principles of state assets management.
The Supervisory Board also set additional management goals: collective KPIs (obligatory for all of the Management Board’s Members) and individual KPIs/goals.
The collective KPIs comprise:
- adjusted EBITDA for the KGHM Polska Miedź S.A. Group,
- EBITDA margin for the KGHM Polska Miedź S.A. Group
- the pre-precious metals credit unit cost of copper production from own concentrate (excluding the minerals extraction tax), and
- the volume of electrolytic copper production from own concentrate.
The KPIs/goals assigned to individual members of the Management Board according to their duties arise from the Company adopted Strategy of KGHM for the years 2017-2021 with an outlook to 2040 and are of key importance for the organisation. During the year, as a result of appointing the 10th-term Management Board, the Supervisory Board established new management goals. For all of the members of the Management Board the same set of goals (collective goals) were set. The management goals tied to the possibility of receiving variable remuneration for the Company’s financial year were not changed. The remaining management goals comprise 6 tasks in various aspects of management. Three of these (Group EBITDA, unit copper production cost and the volume of electrolytic copper production) were previously adopted by the Supervisory Board. Execution of these indicators ensured achievement of the main budget targets for 2018. The additional proposed Management Goals help to ensure the achievement of key tasks currently underway in the Company with regard to: Company strategy, review of the international assets, development of key strategic directions for the Company and realisation of a key investment concerning development of the Żelazny Most tailings Storage Facility.
Payment of variable remuneration is made if a Management Board Member’s management goals are achieved, the Management Board’s Report on the activities of the Company and the Company’s financial statements for the prior year are approved, the Management Board Member’s performance of duties is approved by the General Meeting, and the Management Board presents the Supervisory Board with a report on the achievement of the management goals. The Supervisory Board evaluates the execution of the aforementioned goals and sets the amount of the variable remuneration due. Management Board members may join the Employee Pension Program under the principles set forth in the current Collective Agreement, with the proviso that the amount of the monthly basic contribution under the Program depends on the amount of the monthly fixed remuneration for the given period. Total annual remuneration for a given Management Board Member, as described above, may not exceed a multiple of the amount of PLN 100 000 and the number of calendar months during which the Member served in the function.
|First, last name||Position||Potentially-due variable remuneration|
for 2018 based on management
services contract (PLN)
|Marcin Chludziński||Member of the Management Board - President of the Management Board||195 467.36|
|Katarzyna Kreczmańska-Gigol||Member of the Management Board - Vice President of the Management Board||221 302.87|
|Radosław Stach||Member of the Management Board - Vice President of the Management Board||221 302.87|
|Adam Bugajczuk||Member of the Management Board - Vice President of the Management Board||161 947.54|
|Paweł Gruza||Member of the Management Board - Vice President of the Management Board||141 884.20|
|Radosław Domagalski-Łabędzki||Member of the Management Board - President of the Management Board||72 318.38|
|Stefan Świątkowski||Member of the Management Board - Vice President of the Management Board||178 225.57|
|Rafał Pawełczak||Member of the Management Board - Vice President of the Management Board||178 225.57|
|Michał Jezioro||Member of the Management Board - Vice President of the Management Board||66 117.15|
|Ryszard Jaśkowski||Member of the Management Board - Vice President of the Management Board||202 410.35|
|Total:||1 639 201.86|
The aforementioned contract also regulates issues involving the application (utilisation) of all of the Company’s resources (tools) required to carry out the contractual duties and to maintain the requirements of security in terms of collecting and transmitting data, including in particular:
- office space together with technical equipment and infrastructure, including a personal computer with wireless Internet access and other necessary equipment, means of communication, including a mobile phone,
- local housing appropriate to the function served (in respect of which the Company covers the cost of such housing to the net amount of PLN 2 500),
- participation in conferences, seminaries or business meetings related to the Company’s operations and, if necessary to carry out these obligations, business trips in Poland and abroad,
- the incurring by the Company of costs related to services performed outside of the Head Office which must be incurred to properly perform the services, in particular such as travel costs and quartering in a standard appropriate to the function performed,
- use of a company car for business purposes,
- civil liability insurance related to serving in the function, and
- incurring or refinancing costs of individual training for the Management Board Member related to the Contract in question and contractual obligations up to the net amount of PLN 15 000 within a calendar year (if the Supervisory Board expresses consent).
The Contracts also provide that if the Management Board Member serves as a member of a body in a subsidiary of the Company within the Group, the Management Board Member will not receive additional remuneration for this function, apart from the remuneration provided for in the management services contract. In addition, the Management Board Member is obligated to inform the Supervisory Board of the possession of shares in publically-listed companies and to gain the consent of the Supervisory Board for accepting a position or serving in a function in the body of another commercial law company – excluding companies of the Group, the acquisition or possession of shares in another commercial law company, as well as performing work or services on behalf of other entities based on a labour contract, mandate contract or based on any other legal relationship.
The contracts signed with the Members of the Management Board regulate the question of compensation in the case of termination, with or without notice, of the management services contract for reasons other than breach of the contract’s basic obligations. The contracts foresee that the Company will pay severance pay of three times the amount of the fixed part of remuneration (if employed in the position for at least 12 months).
The contracts with the Members of the Management Board – both during the period of employment as well as following the period of employment – deal with the question of forbidding any activities which would represent a conflict of interest. In particular, they establish that for a period of six months from the date when employment in the function ceases, the Management Board Member is not allowed to engage in any activities which would represent a conflict of interest. For adherence to the clause on forbidding competitive activities, KGHM pays the Management Board Member compensation in a total amount calculated as a multiple the monthly fixed remuneration and the 6-month period of the forbidding of competitive activities. The payment of compensation is conditional on the Management Board Member’s having served in the function for at least 3 months. If a Member of the Management Board breaches this clause in the contract, he or she will be required to pay a contractual penalty in the entire amount of the compensation received. Payment of the contractual penalty does not deprive the Company of the right to seek compensation in an amount exceeding that amount under general rules.
Information on remuneration of Supervisory Board Members
The remuneration of members of supervisory boards was set on 21 June 2017 by the General Meeting based on the Act dated 9 June 2016 on the terms of setting the remuneration of individuals managing certain companies. The amount of monthly remuneration of individual members of the Supervisory Board depends on the function served and is set as 2.2x or twice the average monthly remuneration in the corporate sector excluding payments from profit in the fourth quarter of the previous year, announced by the President of the Central Statistical Office. Members of the Supervisory Board are not remunerated for any month in which they did not attend any of the formally convened meetings for unjustified reasons, which are assessed and qualified by the Supervisory Board.
The Company also covers or reimburses costs related to participation in the work of the Supervisory Board.
Detailed information on the amount of remuneration, bonuses or benefits for Supervisory Board or Management Board members may be found in note 12.10 of the separate and consolidated financial statements.
Information on the adopted and applied remuneration system for key managers
Key managers receive remuneration based on employment contracts. During the lives of these contracts employees receive:
- basic monthly remuneration, which amounts – depending on the function served – from 6- to 11-times the average monthly remuneration in the corporate sector, excluding payments from profit, in the fourth quarter of the previous year, announced by the President of the Central Statistical Office.
- an annual bonus, paid in accordance with the principles for bonuses set by the Management Board, based on a system of business measures (KPIs) and individual goals (MBO). Principles for setting and granting annual bonuses (STIP - Short-Term Incentive Plan) in KGHM Polska Miedź S.A. functioning since 2013. This system is based on collective, individual and task-related KPIs which were derived from the key performance indicators for the Management Board as well as on goals arising from the Company’s strategy. Presently the STIP system comprises a group of 156 managers in the Company.
- additional benefits, such as life insurance, the Employee Pension Program, Health Care Package, and
- a company car.
Code of the KGHM Polska Miedź S.A. Group
In order to ensure the optimal model for managing and supervising the business processes of the KGHM Polska Miedź S.A. Group, particularly in the context of its rapid development in recent years, the process of establishing a new corporate governance system relying on systemic legal and corporate solutions was carried out. The project was founded on the KGHM Group’s values and the need for having in place a set of formal and legal regulations governing the principles of cooperation within the KGHM Polska Miedź S.A. Group. On this basis, the Code of the KGHM Polska Miedź S.A. Group was adopted.
Following are some of the benefits arising from having the Code in place:
- Outlining the legal basis for a joint strategy of all members of the KGHM Group, making it possible to rest the strategy of each subsidiary on the Strategy of KGHM Polska Miedź S.A. and forcing the requirement to maintain consistency.
- Harmonizing the interests of each company with that of the KGHM Group as a whole.
- Streamlining management in various areas of business.
- Integrating the KGHM Group’s operating rules, e.g. in terms of information transfer, reporting, etc.
- Ensuring effective monitoring of key business decisions made by each company.
- Ensuring the implementation of unified standards in the companies.
- Elevating the level of security of the activities carried out by corporate authorities.
The code of ethics
The Code of Ethics of the KGHM Group
The primary document of the Security and Loss Prevention System of the KGHM Group is the KGHM Polska Miedź S.A. Group Code of Ethics, updated in June 2018. Hence the frequent reference to the Code in this statement.
The KGHM Group Code of Ethics is based on the aforementioned values and constitutes a guidepost for all the decisions and actions taken in the Parent Company and the KGHM Group. There are supporting acts regulating the areas of: prevention of corruption, prevention of conflict of interests, security and transparency of procurement processes, verification of external contractors, prevention of employee rights violations, including discrimination and abuse. The KGHM Group’s Code of Ethics is a collection of rules applicable to the employees of the Parent Company, the KGHM Group and cooperating entities. It is one of the pillars of KGHM’s organizational culture, which is deeply rooted in the mining and metallurgical traditions. They constitute the genetic code of our community, building its professional identity.
The KGHM Group’s Code of Ethics aims to ensure that the employees’ follow the highest standards based on accepted values. The status of a global leader and international corporation obligates us to keep the highest standards of business ethics. It is also related to the challenges resulting from the richness of the national cultures within which we operate.
KGHM Polska Miedź S.A. Code of Condouct
In keeping with current corporate practice, including in the mineral resource industry, our business partners, suppliers, customers and stakeholders expect companies to have clearly declared ethical regulations.
In June 2018, the Management Board of KGHM Polska Miedź S.A. adopted the KGHM Polska Miedź S.A. Code of Conduct. By this token, the Company has declared its orientation towards sustainable development, based on respect for ethical principles, transparency and good industry practice, and commitment to being a socially and environmentally responsible enterprise. The Code of Conduct is based on the KGHM Group Code of Ethics. Both documents regulate behavior standards that the Company is guided by. The Codes are an integral, mutually interconnected whole, based on consistent assumptions and values, followed by the Company.
The Code of Conduct is a powerfully practical document. Its purpose is to be a guide and support for the employees, showing where to look for answers and who to approach if in doubt about decisions taken in everyday situations. The Code of Conduct provides an easy to understand presentation of the Company’s values to all the employees, regardless of their position.
The adoption and functioning of the Code of Conduct and the Code of Ethics was presented to KGHM POLSKA MIEDŹ S.A.’s employees both via the internal portal (intranet: “KGHM to My” at extranet.kghm.com), as well as distributed with monthly payment slips. The Codes are distributed in the printed version during training sessions held by the Ethics and Anti-corruption Representatives in all Divisions and Companies of the Group.
The Code of Ethics is published for the general public on www.kghm.com, in the Investors/Corporate Governance/Code of Ethics tab, https://kghm.com/en/investors/corporate-governance/code-ethics.
Ethics commission in the KGHM Polska Miedź S.A. Group
Every KGHM Group Entity establishes an Ethics Committee. The primary task of the Committee is to conduct investigations in response to irregularities reports, dealing with breaches of the ethical standards defined in the Code of Ethics, and recommend corrective and disciplinary actions to the plant Manager.
A report can be filed by:
- Every employee who has been harmed by actions described in the list of issues reportable to the Ethics Committee;
- Every person who has witnessed actions described in the list of issues reportable to the Ethics Committee.
The investigation conducted by the Committee covers issues that require determination of the actual facts of the matter, in other words disputable or having unclear causes. The investigation is not in conflict, nor does it replace, the right to seek claims pursuant to the generally applicable laws. Members of the Committee are obliged to resolve the breaches of ethical principles given in the KGHM Group Code of Ethics in an impartial and efficient manner, giving equal treatment to all parties to the proceedings. The Committee operates pursuant to its Regulations, and observing the generally applicable laws and internal regulations of a given KGHM Group Entity.
The list of issues reportable to the Committee is as follows:
- Actions displaying features of abuse, discrimination, harassment or other type of unequal treatment of the Company’s employee or a group of employees;
- Breaches of employee duties arising from the Labor Code as well as internal regulations of a given KGHM Group Entity, regardless of the position held;
- Breaches of the rules of community life;
- Improper performance of professional duties.
- Unethical behavior towards other employees and third persons in the work place and outside of the working hours;
- Exposing the good name of the Company to harm.
Verification procedure of compliance with THE ethical principles of KGHM Polska Miedź S.A.
As a socially responsible Company, KGHM Polska Miedź S.A. applies due diligence procedures. In doing so, it attaches importance not only to respect for human rights, lawful terms of employment, environmental norms, freedom of establishing trade unions, compliance of operations with generally applicable laws, no child labor and no acquisition of production commodities from conflict sources (so-called “conflict minerals”), but also seeks cooperation with business partners who share the same values. For this reason, KGHM’s customers and suppliers are obligated to declare in writing their compliance with the aforementioned principles, by signing the so-called Customer Card and Supplier Card, which is an important factor in business decisions related to opening or decling to open a business relationship with a given partner.
Internal audit regulations (for ethics) in KGHM Polska Miedź S.A.
The Internal Audit Department follows international internal audit standards. The standards cover 14 areas, with ethics being one of them. When performing internal audit tasks, the risk is analyzed of potential fraud, conflicts of interest or other activities which are not compliant with the Code of Ethics and other internal regulations. Any areas with increased risk of unethical behavior are consistently identified and taken into account in the development of the annual audit plan.
The procedure of disclosing irregularities and protection of whistle-blowers
In order to allow for effective detection of breaches, confidential channels for reporting of irregularities by the so called Whistle Blowers have been created, both within the company, as well as from outside of its organization. Persons who report irregularities, and who do so in good faith and non-anonymously (Whistle Blowers) are protected under the KGHM Group Procedure of Disclosing Irregularities and Protection of Whistle Blowers. Anonymous reports are also accepted and followed up. The channels allow reporting without disclosing one’s personal details.
Actions taken in the case of ethical principles breach in the KGHM Group
The anti-corruption policy
The anti-corruption policy of the KGHM Polska Miedź S.A. Group defines detailed standards of conduct in corruption-prone situations and identifies the liability for malpractice.
The KGHM Polska Miedź S.A. Group underscores its commitment to fighting corruption in business, by the way of adopting and uncompromising observance of the “zero tolerance for corruption and bribery” rule. Employees are prohibited to offer or accept any material benefits in relation to the performance of professional duties.
The only exception is giving and accepting business gifts, in line with local norms and cultural customs, provided that the giving and accepting of gifts cannot lead to a situation in which such behavior could be considered as an attempt to exert pressure or persuade the recipient to act against their duties. Detailed rules pertaining to giving and accepting of customary business gifts have been defined as an instruction under the Corruption Threat Prevention Procedure. Employees are required to avoid any actions or decisions in a situation of a conflict of interests.
Particular control under the Policy is over business procurement transactions, including the option of a third party audit, in order to ensure that such transactions meet the highest standards of ethical and transparent business operations.
The Group’s Entities and their employees may be held accountable for actions of persons or entities acting on their behalf or for them.
The Policy also states that the Group’s Entities and their representatives are obliged to observe all statutory provisions, guidelines of administration bodies and other state authorities, as well as domestic and international legal acts designed to fight corruption. The Policy also states that KGHM Polska Miedź S.A. and the Group’s Entities and cooperating entities are obliged to follow international legal acts designed to fight corruption, e.g. the U.K. Bribery Act of 2010, the U.S. Foreign Corrupt Practices Act, Canadian Corruption of Foreign Public Officials Act of 1999 and guidelines contained in international agreements, e.g. the OECD Convention or the guidelines of UN Global Compact as regards responsible business and fighting corruption.
The document stipulates that employees of the Group and external partners are obliged to report any suspicion of breaches to the Policy and the Corruption Threat Prevention Procedure, directly to the Security Department of KGHM Polska Miedź S.A. or via the dedicated channels of malpractice reporting. Every report is confidential and is followed up with due diligence.
The KGHM Group uses a range of tools to effectively implement the Policy’s objectives, including first of all procedures, instructions, remedies and control mechanisms, which specify in detail the standards of conduct in corruption-prone situations and situations in which accountability for malpractice may be involved.
The Group’s employees and its representatives are obliged to follow and apply both the Anti-Corruption Policy as well as the accompanying documents referred to above, in particular the “Corruption Threat Prevention Procedure”.
The algorithm for reporting conflicts of interests, including a list of situations that may lead to a conflict of interests in the KGHM Group
An annex to the Corruption Threat Prevention Procedure is the Business Gifts Instruction adopted in 2018, which augments and details the principles introduced in other internal rules of KGHM Polska Miedź S.A. (e.g. the Procurement Policy of the KGHM Polska Miedź S.A. Group).
We are guided by high ethical standards across our procurement process. The Code’s main message is to warrant the professionalism and honesty of the persons responsible for the procurement processes. The document also contemplates issues such as preventing conflicts of interest as well as equal treatment of suppliers to ensure compliance with the principles of fair competition.
The procurement procedures in effect in KGHM are precisely defined in the Procurement Policy and business partners are selected in accordance with the principle of equal treatment.
The company audits its suppliers, from the standpoint of compliance with human rights and regulations governing the hiring of minors. External entities are also checked in order to secure the interests of KGHM, in the context of money laundering, breaches of fair competition rules, prevention of conflict of interests, etc.
Currently, KGHM is drafting a separate code of conduct for suppliers, which will regulate all the key issues associated with collaboration, including the issues related to corporate social responsibility.
The procedure of counteracting money laundering and prevention of fraud
KGHM uses a diverse range of external counterparty verification in the procurement, sales and investment processes, which are regulated by a number of consistent and uniform internal policies and procedures. This procedure covers verification methods used for the purposes of trading transactions.
In the context of protecting its image and care for the Company’s security, KGHM takes measures to prevent the Company from being used by third parties for unlawful purposes they pursue, such as money laundering, financing of terrorism, VAT extortion.
The objective of the procedure is to prevent abuse at work, by the way of implementation of a prevention system and definition of a procedure to be followed if abuse does occur. The procedure is designed to build and enhance an organizational culture based on good interpersonal relations between and among employees.
The procedure describes a catalogue of actions designed to prevent abuse, actions to be taken if abuse does occur, and defines obligations of the employer and employees in this respect. The Procedure applies to all employees of the KGHM Group, regardless of the type of contract or position held. Every employee who believes they have experienced abuse or have witnessed behavior displaying features of abuse, has the right to lodge an Abuse Report. An Abuse Report is lodged under the process defined in the Procedure of Disclosing Irregularities and Protection of Whistle-Blowers, using dedicated channels, provided that, however, in this case the personal details of the reporting employee, the employee/employees who may have been subjected to abuse and the employee/employees who have committed actions or behavior displaying the features of abuse, must be disclosed. The case is examined by the Ethics Committee.
Personal Data Protection Policy
In 2018, the Management Board of KGHM Polska Miedź S.A. adopted the Personal Data Protection Policy. The Policy lays down the rules of processing and securing personal data in KGHM Polska Miedź S.A., pursuant to Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation, “GDPR”).
The Policy has been adopted to ensure that data processing in KGHM proceeds in compliance with the GDPR and other personal data protection regulations, and to be able to demonstrate this compliance. The Policy is subject to reviews and updates, in keeping with the rules laid down therein. Under the Policy, the object of protection is personal data, processed in IT systems, as well as recorded otherwise on media, including paper form and electronic media. The places where personal data is so processed must be secured in a manner defined by the Policy. The Policy applies to all the personal data processed in KGHM for the purposes of the Company’s activities. The duty to protect personal data processed by KGHM and to apply the Policy covers all persons with access to personal data, regardless of their position, place of work and type of employment relationship. Every person about to have access to personal data may process the data exclusively based on an authorization (delegation). All persons having access to personal data are obliged to familiarize themselves with the Policy and other related documents, and to apply the provisions thereof.
The Policy is consistent with other internal regulations regarding security of information and IT systems applicable in KGHM. Updates to the Policy are supervised by the Personal Data Protection Inspector ofKGHM Polska Miedź S.A.