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Corporate Governance
So far RADPOL S.A. has been managed according to commonly accepted law regulations. Due to the fact that RADPOL S.A. did not have a status of a public company, in the current functioning of the company, the principles of corporate governance stated in the "Best Practices in Public Companies 2005" did not find any application. After the introduction of the company's shares traded on a regulated market on the Warsaw Stock Exchange S.A., RADPOL S.A. intends to apply the principles of corporate governance adopted in above mentioned "Best Practices in Public Companies 2005", with the exception of the following principles:
Rule No 28 - RADPOL S.A. provides for the adoption of the Supervisory Board rules and for making it available to the public. RADPOL S.A., however, does not provide for formation of an audit or remuneration committees, due to the fact that, in accordance with currently accepted practice, in matters within the framework of the audit committee and remuneration committee, the Supervisory Board of RADPOL S.A. shall carry out its duties and take decisions collectively.
Rule No 43 RADPOL S.A. does not provide for the formation of the audit committee, what automatically makes compliance with the above mentioned rule impossible.
Concerning remaining issues, RADPOL S.A. intends to apply to the principles of corporate governance stated in the "Best Practices in Public Companies 2005". The decision concerning this very matter was taken on the 13th of February 2007 by the Annual Meeting, which, under resolution of 14/II/2007, decided the following:
Ordinary Annual Meeting decides that, after the introduction of the company's shares traded on a regulated market on the Warsaw Stock Exchange S.A., RADPOL S.A. intends to apply the principles of corporate governance stated in "Best Practices in Public Companies 2005" excluding rules No 28 and 43.The Executive Board is committed to the immediate convocation of the General Assembly after the introduction of the Company's shares for trading on a regulated market on the Warsaw Stock Exchange S.A. in order to match the content of the statute of "Best Practices in Public Companies 2005".
Incentive program
On 13th of February 2007, the Supervisory Board of RADPOL S.A., on the basis of resolutions of the Annual Meeting No 11/II/2007 of 13th of February 2007, established the following conditions concerning incentive program for employees:
1. Incentive program included members of the Executive Board of the Issuer, i.e. Andrzej Sielski entitled to purchase 264,774 subscription warrants and Grzegorz Malczyk entitled to purchase 264,774 subscription warrants,
2. Incentive Program will run for another 3 years
3. Admission for purchasing rights for Companys shares is granted only by being a member of the Board of Issuer for a period of at least 6 months in the last 12 months before determining entitlement to the shares of series C
4. Day of entitlement to the shares of series C shall be a day for 1 year after the first quotation of the Company's shares on the Stock Exchange S.A. in the first year of the Incentive Program, and for 2 or 3 years after the first quotation of the Company's shares on the Stock Exchange S.A. in the second and third year of the incentive program,
5. On the above mentioned day of determining the right to the shares of series C, the number of shares of series C will be calculated, for which program participant will be entitled. This very number shall be the multiplied number of full months of being a member of board of directors in the last twelve months before determining entitlement to shares and the number of 7354 - if the participant of the program will be a member of board of directors for a full twelve months, then they will be eligible for coverage of 88,258 shares of series C in the year,
6. Series C shares will be issued at a price equal to their issue price of the shares for series B in height of 6.80 PLN.
In accordance with IFRS 2 "Share-based Payment", the fair value of the equity instruments (in this case, the subscription warrants) should be measured at grant date (or day-binding terms of the arrangements - in this case on February 13, 2007) and gradual, vesting period (in this case, over a period of 3 years) by authorized persons (in this case, members of the Board) maximize the value of equity and also to charge the cost of wages. The company prepares financial statements in accordance with Polish Accounting Standards. Polish Accounting Standards do not regulate the issue of salaries paid in shares. In the financial statement from 30th of June 2007, the Company did not account for the increases in capital costs and charges due to incentive program. The Company does not possess any subscription warrant valuations dated 13th of February 2007, and therefore is not able to depict the impact of the difference on the financial outcome in accordance with IAS. The difference between the Polish and international accounting standards shown in the above mentioned report is neutral to the values of equity, calculated in accordance with IAS. Due to lack of knowledge about the fair value of the subscription warrants, the Company also did not take into account in the calculation of diluted earnings per share in accordance with IAS 33 "Earnings per share." At the same time, until 29th of February 2007, the inclusion of shares in the framework of the implementation of Incentive Program has not taken place.
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