General Meeting of the Bank

Rules of operation of the General Meeting.

The activities of the General Meeting, its principal rights, the rights of shareholders, and how these rights are exercised are defined in: Rules of Procedure adopted by the resolution of the Annual General Meeting on 19 June 2013, as amended by resolution 29/2017 of the Annual General Meeting of the Bank of 29 June 2017, Articles of the Bank, and the applicable legislation, including the Code of Commercial Partnerships and Companies, and the Banking Law.

General Meeting of the bank is convened by a notice on the Bank’s website and in a way defined for the communication of current information as per mandatory legislation. The notice should be given at least 26 days in advance of the date of the General Meeting. Since the date of convening the General Meeting, the Bank posts on its website https://www.aliorbank.pl/en/investorrelations/ general-meetings.html information required by provisions of the Code of Commercial Partnerships and Companies.

Only the Bank’s shareholders registered as such 16 days prior to the General Meeting (registration date) are eligible to participate in the General Meeting of the Bank.

Shareholder(s) representing at least one-twentieth of the share capital may request that certain business be put on the agenda of the next General Meeting and submit draft resolutions on the business put on the agenda.

General Meetings of the Bank in 2019

In 2019, one General Meeting of the Bank was held. In addition to housekeeping resolutions, the Annual General Meeting of the Bank held on 28 June 2019 adopted resolutions on matters related to the closing of the financial year 2018, concerning:

• approval of the Bank’s Supervisory Board report,
• approval of the financial statements of the Bank and of the Bank’s Group,
• approval of the Bank’s Group Management Board Report, including the Bank Management Board Report,
• examination of Management Board report on representation expenses as well as on legal services, marketing services, public relations and social communication services and management consultancy services spending for 2018,
• distribution of profit,
• discharge of all Members of the Management Board and Supervisory Board of the Bank.

In addition, the General Meeting of the Bank adopted resolutions on:

• amendments to the Articles of Alior Bank Spółka Akcyjna,
• amendment of Resolution 5/2017 of the Extraordinary General Meeting of Alior Bank Spółka Akcyjna of 5 December 2017 laying down the rules of pay of Members of the Supervisory Board of Alior Bank Spółka Akcyjna,
• amendment of Resolution 6/2017 of the Extraordinary General Meeting of Alior Bank Spółka Akcyjna of 5 December 2017 laying down the rules of pay of Members of the Management Board of Alior Bank Spółka Akcyjna.

Amendments to the Articles

Under Article 415 of the “Code of Commercial Partnerships and Companies” Act of 15 September 2000 (Journal of Laws of 2019, item 2217) an amendment to the Articles of Alior Bank S.A. requires the Bank’s General Meeting to adopt a special resolution by qualified majority of three-fourths of the votes, obtain the approval of the Polish Financial Supervision Authority and registration of the adopted amendment in the Register of Entrepreneurs of the National Court Register.

On 14 January 2019, amendments to the Articles of Alior Bank S.A. were registered in the Register of Entrepreneurs of the National Court Register, concerning:

• organisation of the Supervisory Board (§ 20(2) and (3) of the Articles);
• duty of the Supervisory Board to approve the Pay Policy and to supervise its delivery and operation (§ 23(2)(28) of the Articles);
• risk management system and internal control system (§ 31(5), § 31a and § 32 of the Articles);
• own funds of Alior Bank S.A. (§ 34, § 35, § 38, § 40(1)(3) of the Articles), adopted by resolution 3/2018 of the Extraordinary General Meeting of the Bank of 26 November 2018.

On 1 August 2019, amendments to the Articles of Alior Bank S.A. were entered to the Register of Entrepreneurs of the National Court Register, consisting in adding Bank’s new objects, being activities of the provision of services of initiation of payment transactions from the user’s payment account kept by another provider, and the service of access to information on payment accounts of the user kept by another provider or providers (§ 7(2)(17)-(18) of the Articles of Alior Bank S.A., adopted by resolution 35/2019 of the Annual General Meeting of 28 June 2019.

On 18 October 2019, amendments to the Articles of Alior Bank S.A. were registered in the Register of Entrepreneurs of the National Court Register, concerning::

• requirements mentioned in Article 19(1)-(3) and (5) of the Act on the rules of management of State-owned assets with regard to Members of the Supervisory Board (§ 18(5)-(7) of the Articles),
• duty of the Supervisory Board to examine a report on best practice mentioned in Article 7(3) of the Act on the rules of management of State-owned assets (§ 23(2)(3b) of the Articles),
• duty of the Management Board to prepare and submit to the Supervisory Board a report on best practice mentioned in Article 7(3) of the Act on the rules of management of Stateowned assets (§ 26(1b) of the Articles).

Adopted by resolutions 33/2019 and 34/2019 of the Annual General Meeting of the Bank of 28 June 2019.

Alior Bank S.A. obtained the approval from the Polish Financial Supervision Authority for all of the above-mentioned amendments.

Supervisory Board of the Bank

The Supervisory Board of the Bank operates in particular under the “Banking Law” Act of 29 August 1997, “Code of Commercial Partnerships and Companies” Act of 15 September 2000, as well as the Articles, and Rules of Procedure of the Supervisory Board of the Bank, whose content is available on the company’s website. The Supervisory Board exercises continuous oversight of the Bank’s activities in all its aspects.

In accordance with the Articles, responsibilities of the Supervisory Board, in addition to other rights and responsibilities provided for by mandatory legislation, include, among others:  

• providing an opinion on the report of the Management Board on representation expenses as well as legal services, marketing services, public relations and social communication services and management consultancy services spending; 
• assessing periodic information on internal control; 
• examining the report on best practice mentioned in Article 7(3) of the Act on the rules of management of State-owned assets; 
• applying to the Polish Financial Supervision Authority for acceptance of the appointment of two members of the Management Board of the Bank, including the President of the Management Board; 
• adopting the Rules of Procedure of the Supervisory Board and approving the Rules of Procedure of the Management Board established by the Management Board of the Bank, 
• determining the pay of Members of the Management Board employed under the Labour-Code contract or other contract; 
• representing the Bank on any matters between members of the Management Board and the Bank; 
• suspending the activity, for major reasons, of particular or all members of the Management Board of the Bank; 
• providing opinions on requests of the Management Board for the establishment and for the Bank’s accession as member or shareholder to companies and to dispose of shares where such investments are long-term and strategic; 
• providing opinions on multi-annual Bank development programmes and Bank’s annual financial plans; 
• resolving, at the request of the Management Board, on rules and regulations for the establishment and use of the funds provided for in the Bank’s Articles; 
• approving requests of the Management Board of the Bank for acquisition, charge or disposal of real property or interest in real property, or perpetual usufruct, if its value is more than PLN 5,000,000. In other cases, the decision is taken by the Management Board of the Bank without the need to obtain the authorisation from the Supervisory Board, subject to the matters decided by the General Meeting under § 17a of the Bank’s Articles; 
• approving the requests of the Bank’s Management Board for incurring a commitment or disposal of assets whose value with regard to a single entity exceeds 5% of the Bank’s own funds; 
• exercising oversight of the introduction and monitoring of the management system in the Bank, including, in particular, overseeing the compliance risk management, and carrying out, at least once a year, the assessment of adequacy and effectiveness of that system; 
• approving the rules of conducting internal control and procedures related to the estimation of internal capital, capital management, and capital planning; 
• approving the Bank’s business strategy, and the rules of prudent and stable management of the Bank; 
• accepting the overall level of risk taken by the Bank; 
• approving the Organisational Rules of the Bank and the overall organisational structure of the Bank established by the Management Board of the Bank, adapted to the size and profile of risks taken; 
• approving the assumptions of the Bank’s policy for compliance risk; 
• approving the Bank’s information policy; 
• selecting the independent auditor; 
• approving the pay policy developed by the Management Board and overseeing its introduction and operation. 

The following requires the approval of the Supervisory Board: 

• entering into a contract for legal services, marketing services, public relations and social communication services and management consultancy services, if the amount of overall compensation for the services provided exceeds PLN 500,000 pre-VAT, per annum, 
• amending a contract for legal services, marketing services, public relations and social communication services and management consultancy services if it increases the compensation above the amount mentioned in Paragraph 1, 
• entering into a contract for legal services, marketing services, public relations and social communication services and management consultancy services for which the maximum compensation amount is not provided, 
• entering into contract for: 

• donation or other contract with a similar effect, with the value exceeding PLN 20,000 or 0.1% of total assets within the meaning of the Accounting Act of 29 September 1994 determined based on the last approved financial statements,  
• waiver of debt or other contract with a similar effect, with the value exceeding PLN 50,000 or 0.1% of total assets within the meaning of the Accounting Act of 29 September 1994 determined based on the last approved financial statements. 

In addition, under Resolution 4/2018 of the Extraordinary General Meeting of Alior Bank Spółka Akcyjna of 26 November 2018, disposal of and acquisition by the Bank of financial assets included in fixed assets, and taking up, acquiring and disposing of shares in connection with the Bank’s operations mentioned in § 1 and § 2 of that Resolution, requires an approval of the Supervisory Board of the Bank. 

The Supervisory Board appoints from among its Members the Audit Committee, Risk Committee and other committees required by law, it may also appoint standing or ad hoc committees to perform specific activities 

Committees of the Supervisory Board

Audit Committee 

Activities of the Audit Committee

Under the Rules of the Audit Committee adopted by resolution of the Supervisory Board of the Bank, the Committee provides advice and opinions to the Supervisory Board.

In the reporting period, 14 meetings of the Audit Committee were held, which discussed topics such as: financial reporting process, internal control system, risk management systems, internal audit, performing the activities of financial audit. The Audit Committee was kept informed on material topics concerning accounting and financial reporting, controlled and monitored the independence of the statutory auditor and the entity authorised to audit financial statements. As regards monitoring of the effectiveness of the internal control system and risk management systems as well as internal audit, the Audit Committee was receiving reports from the Audit Department, including information on the results of the conducted audits, progress in the implementation of recommendations, reports on the execution of the control plan, including the report on the activities of the Audit Department as well as adequacy and effectiveness of the internal control system and risk management system. Based on reports of the Regulatory Compliance Department, he monitored the compliance risk management system and the control function.

Nomination and Pay Committee

The Nomination and Pay Committee was established by resolution of the Supervisory Board of the Bank on 7 December 2011.

Committee’s responsibilities:

• providing opinions on the Pay Policy in order to ensure compliance of the terms and conditions of pay with regulations, in particular with the Regulation of the Minister of Development and Finance of 6 March 2017 on risk management system and internal control system, pay policy and detailed method of estimating internal capital at banks, in accordance with the principles of stable and prudent management of risk, capital and liquidity, as well as with special consideration of long-term interests of the Bank and interests of its shareholders,  
• providing opinions on the classification of jobs, which is governed by the pay policy with regard to individuals having material impact on the risk profile of the Bank (MRT), providing opinions on annual objectives; providing opinions and monitoring variable pay of the MRT, 
• preparing opinions, assessments or recommendations on candidates to the Management Board of the Bank, on entering into, amending or termination of contracts with members of the Management Board, on matters of structure, size, and effectiveness of the Management Board as a body, and the expertise, skills and experience of particular members of the Management Board, 
• preparing opinions, assessments or recommendations on other personnel matters for which the Supervisory Board or the Committee are competent as per the applicable in-house regulations and mandatory legislation. 

Under § 27(1) of Alior Bank S.A.’s Articles, the Management Board represents the Bank vis-á-vis third parties and deals with all matters not reserved by legislation or the Articles to other authorities of the Bank. In particular, the Management Board prepares Alior Bank S.A.’s development strategy and annual budgets.

The Management Board of Alior Bank S.A. acts pursuant to the Rules of Procedure of the Management Board of Alior Bank S.A. which defines the Management Board’s organisation of work and detailed responsibilities of the President of the Management Board. Under § 8(1) of the Rules of Procedure of Alior Bank S.A., the Management Board, by resolution:

• determines long-term activity plans and strategic goals of the Bank, 
• determines short-term and long-term budgets of the Bank and monitors their execution;  
• monitors the Bank’s management system, including the management reporting system used for current control of the Bank’s activity, 
• accepts the rules, policies and regulations for the Bank’s activity, and, in particular, for prudent and stable management of the Bank, risk management, credit activity, investing activity, Bank’s management system, assets and liabilities management, accounting, Bank’s funds, personnel management and rules for conducting internal control, 
• determines the amount of the bonus pool for the Bank’s employees, and its overall distribution;  
• appoints commercial representatives of the Company, 
• takes decisions as to the issuing by the Bank of bonds, except for convertible bonds or bonds with pre-emptive rights;  
• accepts the take-up, acquisition and disposal by the Bank of shares of companies, 
• takes decisions on assuming obligations, disposal of assets, charges and leases of assets whose combined value towards a single entity exceeds one-hundredth of the share capital of the Bank, subject to Article 8(2) of the Rules of Procedure of the Management Board, 
• approves the investment plan and accepts each own investment of the Bank (acquisition or disposal of fixed assets or proprietary rights) in the amount exceeding one-hundredth of the share capital of the Bank, subject to Article 8(2) of the Rules of Procedure of the Management Board, 
• accepts matters related to the organisation structure of the Bank’s Headquarters, including the establishment and liquidation of organisational units of the Bank and of organisational units of the Bank’s Headquarters, 
• takes decisions on the establishment and liquidation of Bank’s branches, 
• takes decisions as to payment to shareholders of dividend advances, upon acceptance of the Supervisory Board, 
• accepts all documents presented to the Supervisory Board or to the General Meeting, 
• examines other matters submitted for examination by the Supervisory Board, General Meeting, Members of the Management Board, organisational units of the Bank, or any committees or teams established under the Bank’s internal regulations, 
• takes decisions on all other matters within the scope of activity of the Bank, if required by specific legislation or if such decisions can have major effect on the financial situation or reputation of the Bank, 
• exercises corporate governance over the group companies. 

Under § 3(3) of the Rules of Procedure of the Management Board of Alior Bank S.A., in all other matters each Member of the Management Board takes independent decisions concerning the Division reporting to him or her.

Under § 17(2)(5) and (7) of the Rules of Procedure of Alior Bank S.A., any increase or decrease of share capital, as well as redemption of shares and definition of detailed terms and conditions of such redemption require a resolution of the General Meeting.

By resolution 28/2012 of 19 October 2012 on conditional increase in share capital of the Bank and the issuance of subscription warrants, the General Meeting of Alior Bank S.A. vested to the Management Board of Alior Bank S.A. the right to:

• offer and issue subscription warrants to the participants of the Incentive Programme other than members of the Management Board of the Bank (for Members of the Management Board, these rights are vested in the Supervisory Board), 
• register in the National Depository of Securities any newly issued shares and do anything related to their dematerialisation, 
• take all necessary measures related to the admission and introduction to trading in the regulated market operated by Warsaw Stock Exchange of shares of new issues immediately after the issue. 

The activities carried out by the Management Board for the purpose of issuance of shares under the Incentive Programme are described in detail in the Rules of the Incentive Programme approved by the Supervisory Board, subject to the provisions of the Articles of Alior Bank S.A. Based on a resolution, the Management Board may authorise standing committees or appropriate employees of the Bank to take decisions related to the assumptions of obligations or disposal of assets, as part of daily activities of the Bank, whose total amount towards a single entity does not exceed 5% of the Bank’s own funds.