STATEMENT ON THE APPLICATION OF CORPORATE GOVERNANCE RULES BY ULMA CONSTRUCCION POLSKA S.A. IN 2011

Transcription

1 STATEMENT ON THE APPLICATION OF CORPORATE GOVERNANCE RULES BY ULMA CONSTRUCCION POLSKA S.A. IN 2011 According to 29 item 5 of the Regulations of the Warsaw Stock Exchange S.A. adopted by resolution No. 12/1170/2007 of the Supervisory Board of the Warsaw Stock Exchange of 04 July 2007, the Management Board of ULMA Construccion Polska S.A. (hereinafter referred to as "Company"), acting in accordance with the provisions of the resolution No. 1013/2007 of the Stock Exchange Management of 11 December 2007 and Resolution of the Stock Exchange Council No. 20/1287/2011 of 19 October 2011, hereby provides the report concerning the application of corporate governance rules provided for in the document "Code of Best Practice for WSE Listed Companies" by the Company in A) INDICATION OF THE CORPORATE GOVERNANCE RULES, WHICH WERE NOT APPLIED BY THE ISSUER, ALONG WITH INDICATION OF THE CIRCUMSTANCES AND REASONS FOR NOT APPLYING THE GIVEN RULE, AS WELL AS THE WAY THE COMPANY INTENDS TO REMOVE THE EVENTUAL RESULTS OF THE FAILURE TO APPLY THE GIVEN RULE OR WHAT ARE THE STEPS THE COMPANY INTENDS TO TAKE, IN ORDER TO DECREASE THE RISK THAT THE GIVEN RULE IS NOT APPLIED IN THE FUTURE. In 2011 the Company applied corporate governance excluding the rules listed below: I. Recommendations for Best Practice for Listed Companies Rule I.1. A company should enable on-line broadcasts of General Meetings over the Internet, record General Meetings, and publish the recordings on the company website. Explanation: This rule was not applied due to the current shareholder structure and the fact that until now the Company has not received even one notice that someone is interested of such method of accessing the General Meetings proceedings. In the future the Company does not exclude organizing General Meetings using modern multimedia techniques. The Company will start adhering to that rule when the costs incurred for this purpose will be justified by a large interest in such form of communication among the Company's Shareholders. Rule I.5. A company should have a remuneration policy and rules of defining the policy. The remuneration policy should in particular determine the form, structure, and level of remuneration of members of supervisory and management bodies. Commission Recommendation of 14 December 2004 fostering an appropriate regime for the remuneration of directors of listed companies (2004/913/EC) and Commission Recommendation of 30 April 2009 complementing that Page 1/16

2 Recommendation (2009/385/EC) should apply in defining the remuneration policy for members of supervisory and management bodies of the company. Explanation: Defining the remuneration of the Management and Supervisory Board belongs to the autonomous decision of the Supervisory Board and General Meeting accordingly. The Company's Management does not have any influence on the regulations in this respect. Remuneration of the members of the Company's bodies are determined on the basis of the duties and responsibilities arising from the fulfilled position and arise from the economic results achieved by that person. Rule I.9. The WSE recommends to public companies and their shareholders that they ensure a balanced proportion of women and men in management and supervisory functions in companies, thus reinforcing the creativity and innovation of the companies economic business. Explanation: During the current term of office of the Management and the Supervisory Board, the Company does not plan any changes, in order to meet the recommendations as regards ensuring the balanced proportion of women and men in management and supervisory functions in the Company, and the priority when selecting the Company's authorities includes: the professionalism, experience and skills of the candidates. However, it is worth emphasizing that the Deputy Chairperson of the Supervisory Board function in the Supervisory Board is fulfilled by a woman, and the positions of both Proxies in the Companies are also in the hands of women. Rule I.10. If a company supports different forms or artistic and cultural expression, sport activities, educational or scientific activities, and considers its activity in this area to be a part of its business mission and development strategy, impacting the innovativeness and competitiveness of the enterprise, it is good practice to publish, in a mode adopted by the company, the rules of its activity in this area. Explanation: The Company incidentally supports activity within the aforementioned scope, yet it does not recognize it at the moment as an element of its business mission and development strategy, which would have an impact on innovativeness and competitiveness of the enterprise. Rule I.12. A company should enable its shareholders to participate in a General Meeting using electronic communication means through: 1) real-time broadcast of General Meetings, 2) real-time bilateral communication where shareholders may take the floor during a General Meeting from a location other than the General Meeting, 3) exercise their right to vote during a General Meeting either in person or through a plenipotentiary. Explanation: This rule was not applied in its part concerning real-time transmission of General Meetings and the real-time bilateral communication, as the provisions of the Articles of Association of Page 2/16

3 the Company, the corporate documents of the Company do not provide for the possibility of taking part in the General Meeting and speaking during the General Meeting using electronic means of communications, nor for the possibility of voting by means of correspondence or using electronic communication means. In the opinion of the Management the current course of General Meetings at ULMA Construccion Polska S.A. does not indicate any need to implement the aforementioned possibilities. II. Best Practice for Management Boards of Listed Companies Rule II.1. A company should operate a corporate website and publish on it, in addition to information required by legal regulations: 2a) on an annual basis, in the fourth quarter information about the participation of women and men respectively in the Management Board and in the Supervisory Board of the company in the last two years, Explanation: The make-up of the Company is updated on a current basis through the current reporting and the website Information concerning the past make-up of the managing and supervising bodies are available in the periodic reports. Rule II.1. A company should operate a corporate website and publish on it, in addition to information required by legal regulations: 14) information about the content of the company s internal rule of changing the company authorised to audit financial statements or information about the absence of such rule. Explanation: Selection of the entity authorized to audit financial statements as well as changing such entity constitutes an autonomous decision of the Supervisory Board. The Company does not publish only information about the content of the Company s internal rule of changing the company authorised to audit financial statement or information about the absence of such rule on its website. III. Best Practice for Supervisory Board Members Rule III.6. At least two members of the Supervisory Board should meet the criteria of being independent from the company and entities with significant connections with the company. The independence criteria should be applied under 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) board. Irrespective of the provisions of point (b) of the said Annex, a person who is an employee of the company or an associated company cannot be deemed to meet the independence criteria described in the Annex. In addition, a relationship with a shareholder precluding Page 3/16

4 the independence of a member of the Supervisory Board as understood in this rule is an actual and significant relationship with any shareholder who has the right to exercise at least 5% of all votes at the General Meeting. Explanation: Within the Supervisory Board, there is one member meeting the criteria of being independent appointed. The remaining members of the Supervisory Board are appointed autonomously by the General Meeting. IV. Best Practices of Shareholders Rule IV.10. A company should enable its shareholders to participate in a General Meeting using electronic communication means through: 1) real-life broadcast of General Meetings; 2) real-time bilateral communication where shareholders may take the floor during a General Meeting from a location other than the General Meeting; 3) exercise their right to vote during a General Meeting either in person or through a plenipotentiary. Explanation: This rule was not applied due to the current shareholder structure and the fact that until now the Company has not received even one notice that someone is interested of such method of accessing the General Meetings proceedings. In the future the Company does not exclude organizing General Meetings using modern multimedia techniques. The Company will start adhering to that rule when the costs incurred for this purpose will be justified by an interest in such form of communication among the Company's Shareholders. The company does not exclude that this rule will be adhered to from 01 January 2013 on. The contents of this report shall also be published on the website of the Issuer in the section dedicated to investor's relations. B) DESCRIPTION OF THE ACTING METHOD OF THE GENERAL MEETING OF SHAREHOLDERS, ITS FUNDAMENTAL AUTHORISATIONS AND THE RIGHTS OF SHAREHOLDERS AND THEIR EXECUTION METHOD The shareholder structure at ULMA Construccion Polska S.A. as of 31 December 2011: ULMA C y E, S. Coop. - 3,967,290 shares % of share capital - 3,967,290 votes in GMS % votes in GMS AVIVA Powszechne Towarzystwo Emerytalne BZ WBK S.A ,739 shares % of share capital - 516,739 votes in GMS % votes in GMS Other - 771,603 shares % of share capital - 771,603 votes in GMS % votes in GMS Page 4/16

5 The company does not issue securities which would give special audit authorizations to their holders against ULMA Construccion Polska S.A. The shares of the Company are not associated with any limitations as to exercising the right to vote nor any limitations concerning the transfer of ownership rights. General Meeting of Shareholders of ULMA Construccion Polska S.A. ("GMS") acts in accordance with the provisions of the Code of Commercial Companies, Articles of Association of the Company and the Regulations of the General Meeting of Shareholders of ULMA Construccion Polska S.A. The General Meeting is called by announcement made at the Company's website and in the way determined for providing current information by public companies in accordance with the binding provisions, which should be made at least 26 (twenty-six) days before the date of the General Meeting. The General Meeting is attended by the shareholders of the Company as of 16 (sixteen) days before the date of the General Meeting ("Registration Date for Participation in the General Meeting"), the authorized persons due to nominative shares and temporary statements as well as pledgees and users, who are entitled to the voting right, if they are entered in the share book on the Registration Date for Participation in the General Meeting, members of the Management Board and the Supervisory Board of the Company, persons invited to the General Meeting by the Management of the Company. Bearer's shares taking the form of a document give the right to participate in the General Meeting if the share documents are submitted to the Company no later than on the Registration Date for Participation in the General Meeting and they will not be collected before the end of that day. The statement issued to prove the submission of the shares to a notary, bank or investment company with its registered office or branch within the territory of the European Union or the country being a party to the Agreement on the European Economic Area, indicated in the announcement about calling the General Meeting, may be submitted to the Company. The Company determines the list of the persons authorized to participate in the General Meeting due to bearer's shares on the basis of the share documents, statements submitted to the Company and the list of the holders of dematerialized shares, authorized to take part in the General Meeting, made by the entity running a deposit of securities. The shareholder is entitled to participate in the General Meeting in person or through a plenipotentiary. The shareholder may participate in the General Meeting in person, through appearing at the General Meeting. Page 5/16

6 The power of attorney to the plenipotentiary is granted in writing or in electronic form (the electronic form means a text document submitted by electronic forms of communication, safe e-signature is not required). Providing the power of attorney to the Company takes place in the following manner: The shareholder should, no later than two days prior the date of General Meeting indicated in the announcement, submit an information on the power of attorney to the Company, provided that the power of attorney has the electronic form. The information should be signed by the principal or person authorized to represent them (in case of a principal who is a legal entity) and then sent in the form of a scan by to the address given in the announcement about the General Meeting or by fax to the number given in the announcement about the General Meeting. The shareholder having subscribed shares at more than one stock account, may establish separate plenipotentiaries to execute the rights on the shares subscribed on each of the accounts. The members of the Company's bodies and Company's employees may serve the role of shareholder's plenipotentiaries during the General Meeting. In such situation, as well as when the plenipotentiary is the Company's public receiver or a member of the Company's bodies or an employee of the Company or a cooperative dependant on the Company: the plenipotentiary may represent more than one shareholder. The plenipotentiary exercises all the rights of the shareholder at the General Meeting, unless the contents of the power of attorney states otherwise. The plenipotentiary may grant further power of attorneys, if it arises from the contents of the power of attorney. The shareholder may not, neither personally or through the plenipotentiary, vote on issuing resolutions concerning his liability towards the Company due to any title, including vote of approval, dismissal from his obligations to the Company and a dispute between him and the Company. The shareholder may vote as a plenipotentiary of another shareholder in case of issuing resolutions concerning him, mentioned in item 4.12 of the Regulations, only if all the following items take place: the power of attorney grants the representation right at only one General Meeting; the plenipotentiary disclosed the circumstances indicating that there is, or there may be, a conflict interest to the shareholder; granting further power of attorney is excluded; the shareholder acting as the plenipotentiary votes in accordance with the instructions given by the shareholder who is his principal. The shareholder is entitled to vote at the General Meeting in person or through a plenipotentiary. The shareholder may vote differently from each of the shares in his possession. Page 6/16

7 If a plenipotentiary represents more than one shareholder, he may vote differently from the shares of each shareholder. Registration of shareholders entitled to participate in the General Meeting begins one hour before the opening time of the General Meeting. The General Meeting is started by the Chairperson of the Company's Supervisory Board, and if he is absent - the Deputy Chairperson of the Supervisory Board. If they are not present, the General Meeting is started by the President of the Management Board or a person appointed by the Management. The person opening the General Meeting calls for selecting the Chairperson of the GM among the persons authorized to participate in the General Meeting. If the General Meeting is called under article of the Code of Commercial Companies, selection of the Chairperson does not take place. The candidates for the Chairperson may be submitted by the shareholders or their plenipotentiaries participating in the General Meeting, members of the Supervisory Board and the Management of the Company. The person opening the General Meeting calls the vote on selecting the Chairperson of GM. The GM Chairperson is usually selected by the simple majority of the votes cast. Voting on particular candidates takes place in the order they were submitted. The person opening the GM, having signed the voting protocol for the selection of the GM Chairperson, gives the running of the Meeting to him. The GM Chairperson determines that the General Meeting was called properly and that it is capable of making resolutions. The GM Chairperson calls the vote on establishing the scrutinizing committee and other committees, if it is necessary for the proper holding of the General Meeting. In particular, if the Company enables electronic counting of votes, the GM Chairperson may resign from establishing the scrutinizing committee. If the committee is established, it shall involve no less than three and not more than five members, selected from among the shareholders and other persons by the simple majority of the votes cast. The GM Chairperson supervises the efficient course of the General Meeting, calls for breaks in the Meeting's agenda, settles the disputes between the shareholders, supervises the workings of the committees established by the General Meeting, signs the protocols of the resolutions issued by the General Meeting. The Chairperson's decisions may be revoked by the General Meeting by a simple majority of the votes cast. The GM Chairperson does not have the right to remove any cases from the agenda of the Meeting nor change the agenda in any way. Page 7/16

8 Each shareholder is entitled to take part in the discussion, to ask questions and to demand clarifications from the Company's authorities as to each and every item on the agenda. The Chairperson is entitled to take the floor away from a shareholder or his plenipotentiary if their speech is not connected to the agenda or the duration of the speech exceeds 15 minutes. The requests of formal character may be submitted by the shareholders before the General Meeting starts considering the items on the agenda. The Chairperson decides about adopting or rejecting the formal request. Item 7.2 of the Rules is applied accordingly. The request for calling the Extraordinary General Meeting may be submitted by a shareholder after the agenda of the General Meeting is discussed completely. On request of the shareholders representing at least one fifth of the share capital, selection of the Supervisory Board should be conducted by the next General Meeting by means of voting on separate groups, even if the Articles of Association provide for another method of appointing the Supervisory Board. The persons representing that portion of shares during the GM, which results from the division of the general number of the represented shares by the number of the Board members, may create a separate group in order to select one Board members, yet they do not take part in selecting other members. Such a group reports its establishment to the Chairperson of the General Meeting. The GM Chairperson confirms the establishment of the group and notes the make-up of the group and the number of shares represented by the group in the GM protocol. The group selects its representative to the Supervisory Board and reports him to the Chairperson. The mandates in the Supervisory Board that are not taken by a relevant group of shareholders, established in accordance with item 7.9 of the Rules, are filled by means of voting, attended by all shareholders, whose votes were not cast when selecting the Supervisory Board members selected in group voting. If the General Meeting fails to establish at least one group capable of selecting a Supervisory Board member, the selection does not take place. The Company may broadcast the General Meeting using the Internet, register the General Meeting on electronic data carriers and to publish it at the Company's website. In the cases not regulated in these regulations, the relevant provisions of the Code of Commercial Companies and the provisions of the Articles of Association apply. The competences of the General Meeting include: a) considering and approving the Management Board's reports on the activities of the Company and financial statement for the previous financial year, b) passing the resolution on division of profits or covering the losses, Page 8/16

9 c) granting vote of approval to the members of the Company's bodies concerning their obligations, d) amending the Articles of Association, e) merging with another Company and transforming the Company, f) winding-up and liquidating the Company, g) issuing bonds, h) selling and leasing the enterprise and establishing the usufruct right on it, i) all and any decisions concerning the claims to repair a loss incurred on establishing the Company or exercising administration or supervision, j) passing a resolution on compulsory share buyback under art. 418 of Code of Commercial Companies. If the General Meeting passes a resolution on devoting a part or the whole profit for a payment to the shareholders, determining the day according to which the list of shareholders entitled to the dividend for the given financial year is determined (the dividend day) as well as the dividend payment day is indicated. Apart from the issues listed above, the General Meeting passes resolution on increasing or decreasing the share capital, including: increasing the share capital from the Company's funds, authorizing the Management to introduce one or a few subsequent increases in the share capital, in accordance with the conditions determined in the resolutions passed by the General Management (target capital), conditional increasing the share capital in order to grant the rights to underwrite the shares by the holders of convertible bonds or pre-emptive right bonds, or granting the right to shares to the employees, members of Management Board or Supervisory Board, in exchange for non-monetary contributions constituting the receivables for the purchased entitlements to the share in the profits of the Company or an affiliated company. C) DESCRIPTION OF THE RULES OF CHANGING THE ARTICLES OF ASSOCIATION OR THE MEMORANDUM OF THE ISSUER Amending the Articles of Association lies exclusively within the competences of the General Meeting. GMS may authorize the Supervisory Board to determine the uniform text of the Articles of Association or to introduce other changes of editorial nature determined in the resolution passed by the Meeting. In case of changes to the Articles of Association the provisions of article 430 of Code of Commercial Companies apply. D) MAKE-UP AND THE ACTIVITY CONDITIONS OF THE MANAGING AND SUPERVISING BODIES IN THE COMPANY AND THEIR COMMITTEES. Page 9/16

10 The Management of "ULMA Construccion Polska S.A.", hereinafter referred to as "Company", acts by virtue of the Code of Commercial Companies, Articles of Association, resolutions of the General Management and the Management's Regulations. The Management consists of from 1 (one) to 5 (five) members. The members of the Management Board are appointed and dismissed by the Supervisory Board. The duration of the term of office of a Management Board member (term of office) is determined by the Supervisory Board, yet that period cannot exceed three years. The Supervisory Board determines the number of the Management Board members and selects the President out of them. The Management Board, lead by the President, manages the Company and represents it externally. All and any issues connected with running the Company that are not reserved in the Act or in the Articles of Association as the competences of the General Meeting or Supervisory Body, belong to the activity scope of the Management. The detailed mode of Management's activities is determined in the Management's Regulations passed by the Management Board and confirmed by the Supervisory Board. The statements of will may be issued and signatures may be placed on behalf of the Company by: President of the Management Board individually or two members of the Management acting jointly, a member of the Management acting jointly with a proxy or two proxies jointly. The Management passes resolutions in the cases provided for in the provisions of Law and the Articles of Association, with the reservation that when the passing of such resolution requires the consent of the General Meeting or Supervisory Board of the Company, the resolution may be passed after receiving such consent. The Management passes resolutions in particular in the cases concerning: 1. calling the General Meeting of Shareholders, 2. determining the detailed organisational structure of the Company and internal regulations, 3. granting and revoking proxy and powers of attorney, 4. taking out credits, 5. making investments, 6. determining the remuneration principles for Company's employees, 7. determining the principles and the methods of book-keeping, 8. determining detailed principles of the financial economy in the Company, 9. preparing annual business plans for the Company, 10. preparing multi-annual development strategies for the Company, Page 10/16

11 11. determining and announcing the date the dividend dedicated to payment by the General Meeting is paid, 12. each issue submitted by a member of the Management Board at the Management's meeting. A Management Board member may simultaneously fulfil the function of a director or another employee of the Company. The Management may entrust a member of the Management Board with the realization or supervision over the issues within the competences of the Management - within a strictly determined scope. The Management Board member responsible for the entrusted tasks - files a report on their realization to the Management. The Management Board members exercise the supervision and are responsible for the workings of the departments (in accordance with the determined allocation of work within the Management) and the organisational units in the Company as well as coordinate the works of these units with the comprehensive works in the Company. The Management meetings are called by the President, and if he is not present - another Management Board member. The issues no on the agenda will not be the subject of voting or passed resolutions without the consent of all Management Board members. The person calling the Management's meeting determines the agenda and conducts the meeting. The issues on the agenda are referred by the Management Board members or the persons invited in order to discuss the given topics. The Management Board members take part in its meetings in person only. The Management Board member or members may take part in the Management's meeting using a telephone intended for such conferences, video or another system, which enables each member to speak to all other members, to hear them and be heard by them. Such participation in the meeting is recognized as participation in person. Persons from outside the Management Board may take part in the Management's meetings with a counselling voice, if the person calling the meeting deems their presence necessary. The participation of the Management Board members in the Management's meeting is obligatory. The Management Board may, for important reasons, accept the absence of the Management Board member at the Management's meeting. The Management's meetings shall take place at least once a month. All the meetings shall take place in the registered office of the Company or in another place indicated by the person calling the meeting. Page 11/16

12 The Management's meeting is valid regardless of the number of Management Board members present, if all Management Board members were properly informed about it. The resolutions in any cases shall be passed by the Management during the meetings with a simple majority of the votes cast. Each member of the Management Board has one vote. The President of the Management Board is entitled to the second or deciding vote. All votes of the Management are open votes. Without breaching any decisions to the contrary, a written resolution signed by all Management Board members is valid and effective, as if it was passed at a properly called and held Management's meeting. Such a resolution may comprise of a few documents of identical contents and similar form, where each of them is signed by one or more Management Board members. Make-up of Management of ULMA Construccion Polska S.A. in Andrzej Kozłowski President of the Management Board 2. Krzysztof Orzełowski Member of the Management Board 3. Jose Irizar Lasa Member of the Management Board 4. Jose Ramon Anduaga Member of the Management Board 5. Andrzej Sterczyński Member of the Management Board The Supervisory Board of "Ulma Construccion Polska S.A", hereinafter referred to as "Company", acts by virtue of the Code of Commercial Companies, Articles of Association and the Regulations of the Supervisory Board. The Supervisory Board consists of from 5 (five) to 9 (nine) members appointed by the General Meeting. The term of office of the Supervisory Board lasts three years. The Supervisory Board holds its meetings at least once every three months. The Chairperson of the Supervisory Board or its Deputy is obliged to call a meeting of the Supervisory Board also on request of a Supervisory Board or Management Board member. The meeting should take place within 2 (two) weeks from receiving the request. A Supervisory Board member may cast his vote in writing through another Supervisory Board member. The Supervisory Board may pass resolutions in written mode or using direct long-distance communication means. The principles of passing resolutions in the mode determined in items 3 and 4 hereof are determined in the Regulations of the Supervisory Board. Page 12/16

13 In order for the resolutions of the Supervisory Board to be valid, it is necessary that all Board members are invited to the meeting and at least half of its members is present at the meeting. The resolutions of the Supervisory Board are passed with the absolute majority of the votes cast. If the voting remains undecided, the vote of the Board's Chairperson decides. The Supervisory Board adopts, by means of a resolution, its internal regulations, which contains i.e. the following provision: "Each Supervisory Board member may submit a request for passing a resolution in any case". The Supervisory Board exercises constant supervision over the Company's activity. Apart from other cases reserved in the provisions hereof, the particular competences of the Board include: a) analysing the balance sheet, b) analysing the report of the Management Board and the conclusions of the Management Board concerning the allocation of profits or covering losses, c) submitting a written Report on the results of the activities mentioned in items "a and "b to the General Meeting, d) suspending a Management Board member or the whole Management Board in its activities for important reasons, e) delegating a member or members for temporary realization of the activities of the Management if the whole Management Board is suspended or dismissed, or if the Management cannot act for other reasons, f) confirming the regulations of the Management Board, g) determining the remuneration principles for Management Board members, h) granting the permit for investments and purchases exceeding 4/5 (four fifths) of the nominal value of the share capital as well as taking out loans exceeding that value, i) selecting certified auditor, j) granting consent to purchasing or selling the real estate or share in real estate by the Management. The Supervisory Board exercises these supervisory activities towards the Company collectively, yet it may delegate members to individual realization of particular supervisory activities. The Board members may realize their obligations in person or they may authorize another Board member to cast a vote on their behalf. The Board realises its activities through issuing resolutions. The quorum at the meetings of the Supervisory Board shall be at least the half of the Supervisory Board members, including the Chairperson or Deputy Chairperson, provided that all the Board members were properly informed about the meeting. Member or members of the Supervisory Board Page 13/16

14 may participate in a meeting through a phone used for conferences, video, or other means, through which a member may speak to the remaining members, hear them and be heard by them, and such participation shall constitute a presence on the Supervisory Board meeting. The voting of the Supervisory Board shall be open ballot and require a simple majority of votes to make any resolution. Secret ballot shall be administered in personal cases or on request of at least one Supervisory Board member. Each member of the Supervisory Board has one vote. The Chairman of the Supervisory Board shall have the right to a second vote, in case of an even distribution of votes. The Supervisory Board's meetings shall take place at least once a quarter. All the meetings shall take place in the registered office of the Company or in another place indicated by the person calling the meeting. The right to call the meeting of the Supervisory Board is awarded to the Chairperson in his discretion, on request of the Management or any of the other Board members. If the Chairperson or Deputy Chairperson fails to call a meeting within seven days from submitting such a request by a member, that member shall be entitled to call a meeting of the Supervisory Board. The notifications about all Supervisory Board meetings shall be sent to each Supervisory Board members no later than seven days before the date of the meeting determined in the notification. Each notification about the meeting shall indicate the time and place of the meeting as well as the agenda, covering all the issues to be raised during the meeting. The issues no on the agenda will not be the subject of voting or passed resolutions without the consent of all Supervisory Board members. The Chairperson of the Supervisory Board calls the Board's meetings with a prior notification dispatched no later than 3 business days before the date of the meeting and does so on request of any of the Board members in order to discuss any issues subject to quick consideration. Without breach of any other provisions, a written resolution signed by all members of the Supervisory Board shall be valid and effective, as if it was made during a properly called and held meeting of the Supervisory Board; such resolution may consist of multiple documents of identical contents and similar form, provided that each is signed by one or more members of the Supervisory Board (circulating mode). Page 14/16

15 All and any changes to the Regulations of the Supervisory Board shall be made in the mode of resolutions of the General Meeting of Shareholders passed in accordance with the provisions of the Articles of Association. The make-up of the Supervisory Board in 2011: 1. Aitor Ayastuy Ayastuy Chairperson of the Supervisory Board 2. Lourdes Urzelai Ugarte Deputy Chairperson of the Supervisory Board 3. Ernesto Julian Maestre Escudero Member of the Supervisory Board 4. Ander Ollo Odriozola - Member of the Supervisory Board 5. Felix Esperesate Gutierrez - Member of the Supervisory Board 6. Rafał Alwasiak - Member of the Supervisory Board The Supervisory Board separated an Audit Committee out of its structures, with the following make-up: 1. Mr. Rafał Alwasiak - Chairperson of the Audit Committee, who meets the independence criteria 2. Mr. Aitor Ayastuy Ayastuy Member of the Audit Committee 3. Mr. Lourdes Urzelai Member of the Audit Committee. E) DESCRIPTION OF BASIC CHARACTERISTICS OF THE SYSTEMS OF INTERNAL CONTROL AND RISK MANAGEMENT IN THE COMPANY AS REGARDS THE MAKING OF FINANCIAL STATEMENTS. The Management Board shall be responsible for the internal control system in the Company and its functioning efficiency in the process of making financial statements. The substantive supervision over the process of preparing financial statements and interim reports of the Company shall be exercised by the Financial Director - Management Board member. The organization of the works connected with preparing annual and mid-year financial statements shall lie within the responsibilities of the Chief Accountant in the Accounting Section in the financial department. The Company follows the changes required by the provisions and external regulations referring to the stock exchange reporting requirements on a current basis and prepares to their introduction in significant advance. Page 15/16

16 Every month, after closing the books, the Management Board members and the managerial personnel receive the reports containing managing information, analysing key financial data and operational indicators. Every quarter there are meetings of the Management with the managerial personnel organized in order to discuss the Company's result divided into particular activity areas. The financial statements are submitted to the Supervisory Board members, who discuss the key data and indicators at their periodic meetings with the Company's Management. The financial data constituting the basis for the financial statements and interim reports come from the accounting-financial system, which registers transactions in accordance with the accounting policy of the Company based on the International Accounting Standards. The prepared financial statement is then submitted to the Financial Director for preliminary verification and then to the Management for final verification. The annual and mid-year financial statements are subject to independent audit and a review by the Company's auditor. The results of the audit are presented by the auditor to the management of the financial department and at the briefings with the Management of the Company. Management of ULMA Construccion Polska S.A. Andrzej Kozłowski President of the Management Board Jose Irizar Lasa Member of the Management Board Jose Ramon Anduaga Member of the Management Board Krzysztof Orzełowski Member of the Management Board Andrzej Sterczyński Member of the Management Board Page 16/16