A new provision in the Act on Public Offers (Ustawy o Ofercie Publicznej) has introduced a new obligation on Polish PIEs to prepare an annual report on the remuneration of the management board and supervisory board and to submit this report to the auditor’s assessment.
Art. 90g of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organized Trading, and Public Companies” introduces the new Remuneration Report. The supervisory board of a public company must prepare a report on the remuneration of the management board and the supervisory board each year. The scope of the report is specified in the provision cited above. The report has to be “assessed” by a statutory auditor to ensure that the information it contains is accurate and complete.
The first such annual Remuneration Report will be prepared jointly for the years 2019-2020 and the audits of them will be carried out for the first time in 2021.
The Remuneration Report will be prepared separately from the financial statements and the company’s annual report, and its “assessment” will be classified technically as “an assurance service, other than an audit of the financial statements”, and considered by the Regulator as part of the auditing business of a licensed firm. Only registered auditors and their companies licensed to audit Public Interest Entities should be engaged to perform these assurance services. The purpose of the auditor’s assessment is to confirm that the remuneration report contains all the elements required by law. Responsibility for the substantive correctness of the information indicated in the remuneration report rests solely with the members of the company’s supervisory board, and the auditor should be independent to the entity. It may indeed be the same auditor which carries out the audit of the Financial Statements, according to Art. 136 paragraph. 1 of the Act on Statutory Auditors, therefore in most cases it will be the same auditor which you already have.
The above has been confirmed by the Financial Market Development Department at the Ministry of Finance in response to a query by the Chamber of Auditors in Poland (PIBR).
Should you be in a situation where your financial statements auditor is reluctant to carry out this review, they are not obliged to as it is separate to the existing contracts in place currently. You may prefer, for the sake of good corporate governance, to engage a smaller Firm which is able to carry out PIE audits for this task. Please contact us and we will assist you to a good offer from a reputable Firm for the audit, or alternatively if you would like help with the report itself, this ca also be done with Quoracy Consulting and our partners.
For further help, please use the contact form below. It emails direct to me at the audit firm Grupa Strategia, which has been developing a competence in this area in anticipation of the changes.
The Ministry of State Assets has prepared a draft amendment to the Code of Commercial Companies. The project is currently at the stage of public consultations, which will last until September 19, 2020. The changes include introducing regulations to the holding law, but also strengthening the role of the Supervisory Board.
The most important changes are:
The Supervisory Board has the right to request from members of the management board, liquidators, proxies, employees of the company (including those employed under civil law contracts) to prepare or submit any information, documents, reports or explanations needed for supervision over the company. The completion date is set at max. 2 weeks with the possibility of its extension by the Supervisory Board.
introduces the obligation to inform the key statutory auditor about the meetings of the Supervisory Board, the subject of which are issues discussed before the AGM and the obligation for the statutory auditor to participate in such meetings.
The Supervisory Board will be able to appoint an advisor to the Supervisory Board to investigate, at the company’s expense, a specific issue related to the company’s operations or its financial standing.
the principle of open voting of the Supervisory Board is introduced, with the possibility of a different regulation in the statute or the SB regulations.
meetings of the Supervisory Board will have to be convened at least once a quarter (currently three times a year).
the draft explicitly provides for the possibility of appointing Supervisory Board committees. Until now, the provisions did not regulate this issue, with the exception of obligatory committees (eg the Audit Committee).
the role of the chairman in organizing the work of the Supervisory Board was underlined. The statutory requirements for convening Supervisory Board meetings were made more precise.
Invitations will need to contain the information we already provide (date, time and place of the meeting and the proposed agenda
the meeting) and the way of using means of distance communication when holding the meeting. The minimum notice period will be specified in the statutes.
it is proposed to clarify the issue of liability of Supervisory Board members. The draft stipulates that a member of the Supervisory Board should, in the performance of his duties, exercise due diligence resulting from the professional nature of his activity and be loyal to the company. The obligation to keep the company’s secrets will also apply after the mandate has expired.
At the same time, it is proposed to add a provision according to which: “A member of the management board, supervisory board, audit committee and liquidator does not violate the obligation to exercise due diligence if acting loyally to the company, he acts within the limits of justified economic risk, including on the basis of information, analyzes and opinions which, in the circumstances, should be taken into account when making a careful assessment. “
Information courtesy of chudzik.pl, in my opinion an excellent law firm, based in Lodz, for corporate legal and CoSec issues in Poland at the highest level.
From myself, I would just add that this is what is already in place in most advanced economies, and that there is nothing unhelpful, for once, in this draft legislation.
For all businesses and also some non-business organisations in Poland now, there is a new obligation, namely to identify the real ultimate beneficial owners (“UBO”s) onto a central public register. In Polish this is called Centralny Rejestr Beneficjentów Rzeczywistych which is easy for them to say, but not so easy for us, so the form CRBR is an acceptable abbreviation. Literally this means “Central Register of Real Beneficiaries” but we would normally say “Beneficial Owners” or “Ultimate Beneficial Owners” or just UBOs which is like a UFO, but more “boring” than “flying”, unless of course you own something quite valuable, in which case it is not boring at all.
This was all enacted last year with an initial deadline of 13th May 2020 which has now, because of the pandemic, been set back to 13th July 2020, and may well need to be set back further, however at the time of writing the deadline is STILL 13th July 2020, which is a Monday.
The initiative became law by way of enacting an EU Directive on combatting money laundering which goes right back to 2015. This however is a text-book example if you need one, for how the international standard or law in organisations like the EU (not only the EU, but here it has tended to show up the most) is set and then member states have a degree of leeway in how they then put this into local law. There is usually a minimalist approach, but Poland somehow usually manages to show that it is well ahead of the curve by enacting something which is at the top end of how rigorous and bureaucratic it can be, with major penalties, with no real guidance as to how those penalties would be scaled and assessed, without making even logical exceptions (for instance, if the details already published in the KRS – Polish Companies House equivalent – are already public, up-to-date and accurate as a reflection of UBO the you’re exempt, but no, they didn’t do that. And they didn’t exempt even quoted companies which even Russia did when they enacted a version of UBO law which was seen as pretty strict back in 2015).
So this is a great example of how the Polish authorities ride roughshod over business people in order to flex the muscles of the public sector and the state over the private sector muggins who pay for them to do it. They know full well that the business world, which remains in fear and thrall as in the days of yore, will do as they are told, and so they don’t worry too much. There is a computer interface, you have to use that, and you must use your company representative who is entitled to represent you as per the KRS (at which point you say, well if you do look in the KRS then you know that the UBOs are there already, but the answer is “we know what is on the KRS but we don’t know if these are not just nominees, and anyway it was the EU who told us to do this so just do it”).
The matter will be a minor chore for the majority of Polish businesses, but not even all of them. The problem they may have is the interface and the fact that when it comes to signing you need and electronic signature in the form of an ePUAP or a qualified signature, and even though official representatives of Companies are supposed to have these already, in fact they have not all done so, and those who have done so are still not very fluent in their use as they need to use them maybe once or twice a year, so this becomes a bit like expecting someone who goes to Church at Passover and Yom Kippur for weddings and funerals only, say the Nicene Creed and the First Surah from memory and in the original languages when very few people even speak Nicene these days.
Then you get people like us auditors who are using these things most weeks now, but we cannot just go in and do it for you, because it’s: a) not allowed and b) rendered impossible anyway by the very nature of electronic signing. Now imagine how more complex this is going to be for a foreign business especially if the Board are all non-Polish speakers and there is no Polish-speaking general proxy on the KRS or nobody on the KRS who can represent the company has an official electronic signature. Moreover the file has to be in a specific XML format, you cannot just hand in paper or even a pdf. The rules about what constitutes beneficial interest and how you measure it for various business cases are in a series of FAQs which are untranslated or badly translated.
And oh, I forgot to mention, the penalty for failure to do this by the deadline is, at least theoretically,PLN 1 million.
So, this means in practice, even though I know that a lot of UK-owned and other foreign-owned companies in Poland will be fretting about this, neither I no any other advisor, can come to you and say “hey that’s fine just hand it all over and we’ll do that for you and here’s my bill which is all you need to handle”. What canbe done then, meaningfully?
Well, folk like me, UK Chartered Accountants in Poland should be able to (and I definitely am able to) provide a CRBR Walk-Through Service with the following elements:
Talk to you beforehand to find out in your own language (I’m happy to do this in English, German, Russian, Polish and French) what your situation is regarding the representation, if the people have their PESEL or not, the ePUAP or qualified signature and make sure you are going to be able to make deadline without additional legal actions such as changes to the KRS. These might take a month or more if needed as there are several steps, and may even involve travel in this tough time, so there is no time to waste for that procedure if it’s needed now. If we identify that that’s needed you can take it to your usual company lawyer or I’ll get my own team on it, your choice. This stage may involve checking that you have a valid sig and remember your password to it. In no case will I ask for or see this password.
Talk through the situation re what the Ultimate Beneficial Owner profile is in your Company and how to apply the rules, again in your language, from the list above. If it’s not a typical situation so that research is needed, again you wouldn’t want to leave that to the last minute. In most cases it isn’t, but if you have situations where there are complex groups and offshore structures it can be difficult. (By the way, don’t trouble me if your purpose is to actually do money laundering and get around the law and keep people secret. I have no interest on helping anyone who does this and will not do so, as stated elsewhere on this site. I don’t like reporting people as I do not like to think of myself as an arm of the state, but please do not even put me into that dilemma, just go and find someone desperate enough to assist you. However, as long as you do want to obey the spirit of this law and play fair, and are simply interested in knowing how to do so in a complex situation, then I am happy to involve myself).
Prep the XML, then enter it with you talking through the process Based on the info in 1 and 2, I can go in and prepare the XML file and send it to you, then we talk again and with share screen I show you how to add the XML file, and then go through the signature process if you have doubts about it. Then I explain about taking and keeping the file which proves you have done this and also check that the register now shows what we think it should given the information gathering in part 2.
Concurrent health-check in KRS
While we are about it we can check that the filings in the KRS look in order and up-to-date and if not what needs to be done.
Depending on complexity, I would expect to be able to help you with that walk-through approach as per the above steps for between £200 and £500, depending on complexity, paid half in advance, half on completion. As I mentioned, you don’t have to be a UK or Irish or other Anglosphere business, but if you need the service and speak English, French, German, or Russian, then I can help make sure this is done and keep you safe from the rather draconian fine they are waving in the faces of decent business people.If you are interested in this walk-through service and would like to know more, please fill in the below form and submit it.
Martin Oxley sent this out for the Foreign and Commonwealth office and we are pleased to assist in its propagation.
Dear Quoracy.com subscribers,
Poland presents an attractive nearshore growth opportunity for Britain Plc. In line with the new UKTI strategy presented to government recently by Lord Green, Minister of State for Trade and Investment we are introducing a step change in the way UKTI supports British business growth.
We are taking a very proactive approach on behalf of government to provide a range of bespoke services to enable British SME’s to significantly enhance exports and also work with large corporations to win major overseas contracts and expedite their growth in market.
With our new Ambassador HMA Robin Barnett and the Embassy team we are engaging to support strong growth oriented business agenda in Poland.
With this in mind I am pleased to attach a brief outline of the services which UKTI has developed to support British business in Poland. I very much look forward to meeting you over the course of the coming weeks to discuss with you how we can assist you with your specific company needs.
I am very happy to visit you or alternatively you would be most welcome to visit us and I will provide you a tour of our excellent event facilities at the Embassy.
Quoracy.com would also like to take this opportunity to congratulate our dear friend Martin Oxley on his recent new appointment to the FCO in Warsaw, and to wish him every success working with Her Majesty’s new Ambassador to Poland, His Excellency Robin Barnett. We wish you and your team many successes and a lot of fun.
The so called large household appliances made this year in Poland will be worth the record amount of PLN 3 billion, the newspaper underlines. A lot of it is owing to Samsung Electronics who purchased a washing machine and refrigerators manufacturing plant in Wronki from Amica and announced that it would invest nearly USD 170 million in the development of this plant. Samsung Electronics is also to transfer its production from other European plants to Wronki. The investments are underway.
“Dziennik Gazeta Prawna” found out that Samsung Electronics says it is possible that production in Poland will be expanded with manufacturing heating equipment like ovens, stoves and plates. There is a large demand for this kind of appliances in the EU. According to analysts, demand for heating equipment will remain at around 30% of total annual production, “Dziennik Gazeta Prawna” notes. (Source: gazeta.pl)
16 June 2011, 8.00am – 11.00am
This event is aimed at introducing Cyprus companies as vehicles for international transactions and investments covering the key requirements applied by the authorities and the banking system in Cyprus and Poland.
Experienced professionals and speakers of Baker Tilly Poland and Baker Tilly Klitou of Cyprus will be presenting a range of topics, suggesting practical solutions and sharing their experience. A Q&A session before the close of the event will give participants the opportunity to talk directly with our speakers in order to raise their queries or obtain additional information.