THE ARTICLES OF ASSOCIATION OF KERDOS GROUP SPÓŁKA AKCYJNA, with its registered office in Warsaw, entered into the Register of Companies maintained by the Regional Court in Warsaw, the 12 th Commercial Department of the National Court Register (KRS), under a KRS file number 0000128922 Consolidated text provided for in the Notarial Deed Repertorium (Register of Notarial Deeds) A No 4903/2004 of 5 April 2004, including the amendments introduced by the Resolution No 17 of the Ordinary General Meeting of Shareholders of 29 June 2005 (the Notarial Deed Repertorium (Register of Notarial Deeds) A No 2728/2005), the Resolution No 12 of the Extraordinary General Meeting of Shareholders of 25 April 2006 (the Notarial Deed Repertorium (Register of Notarial Deeds) A No 3102/2006) and the Resolution No 16 of the Extraordinary General Meeting of Shareholders dated 24 April 2007 (the Notarial Deed Repertorium (Register of Notarial Deeds) A No 5407/2007), the Resolution No 22 and the Resolution No 24 of the Ordinary General Meeting of Shareholders of 10 June 2008 (the Notarial Deed Repertorium (Register of Notarial Deeds) A No 8924/2008), the Resolution No 10 of the Extraordinary General Meeting of Shareholders of 23 November 2009 (the Notarial Deed Repertorium (Register of Notarial Deeds) A No 9635/2009), the Resolution No 5 of the Extraordinary General Meeting of Shareholders of 8 April 2010 (the Notarial Deed Repertorium (Register of Notarial Deeds) A No 2946/2010), the Resolution No 24 of the Ordinary General Meeting of Shareholders of 14 June 2010 (the Notarial Deed Repertorium (Register of Notarial Deeds) A No 4701/2010), the Resolution No 6/2012 of the Extraordinary General Meeting of Shareholders of 27 December 2012 (the Notarial Deed Repertorium (Register of Notarial Deeds) A No 10741/2012), the Resolutions Nos 23-35/2013 of the Ordinary General Meeting of Shareholders of 27 May 2013 (the Notarial Deed Repertorium (Register of Notarial Deeds) A No 4543/2013), the Resolutions Nos 8-10/2013 of the Extraordinary General Meeting of Shareholders of 7 November 2013 (the Notarial Deed Repertorium (Register of Notarial Deeds) A No 7871/2013), the Resolution No 19/2014 of the Ordinary General Meeting of Shareholders of 9 June 2014 (the Notarial Deed Repertorium (Register of Notarial Deeds) A No 4051/2014), the Resolution No 6/2014 of the Extraordinary General Meeting of Shareholders of 30 July 2014 (the Notarial Deed Repertorium (Register of Notarial Deeds) A No 5773/2014), the Resolution No 6/2015 of the Extraordinary General Meeting of Shareholders of 5 June 2015 (the Notarial Deed Repertorium (Register of Notarial Deeds) A No 1443/2015). I. General Provisions 1 1. The Company shall operate under a firm: Kerdos Group Spółka Akcyjna. The Company may use its abbreviated firm: Kerdos S.A. 2. The Company s registered office is located in Warsaw. 2 1. The Company shall operate in the Republic of Poland and abroad. 2. The Company may establish and close branches, subsidiaries and representative offices in Poland and abroad, and join other companies. 3. The Company may use a distinguishing graphic mark. 4. The Company is established for indefinite term. 3
The public company Hygienika S.A. was established as a result of the transformation of a limited liability company operating under a firm Euro Cristal Spółka z ograniczoną odpowiedzialnością which was conducted on the basis of Articles 491-497 of the Commercial Code. II. Scope of the Company s Activity 4 1. The scope of the Company s activity includes: [PKD The Polish Classification of Business Activity] 1) Manufacture of paper and paper products (PKD 17), 2) Manufacture of soap and detergents, washing and cleaning preparations (PKD 20.41.Z), 3) Manufacture of cosmetic and toilet products (PKD 20.42.Z), 4) Manufacture of essential oils (PKD 20.53.Z), 5) Manufacture of plastic packaging (PKD 22.22.Z), 6) Wholesale, apart from trade in motor vehicles ( PKD 46), 7) Retail sale, apart from retail sale in motor vehicles (PKD 47), 8) Road transportation of goods (PKD 49.41.Z), 9) Storage and keeping goods (PKD 52.10), 10) Other publishing activity (PKD 58.19.Z), 11) Rental and management of own or leased real properties (PKD 68.20.Z), 12) Management of real properties on demand (PKD 68.32.Z), 13) Other advisory activity in the field of conducting business activity and management (PKD 70.22.Z), 14) Other technical research and analyses (PKD 71.20.B), 15) Scientific research and development works (PKD 72), 16) Advertising, market research and public opinion poll (PKD 73), 1. Storage and keeping goods (PKD 52.1) 2. Commercial activity supporting transport (PKD 52.2) 3. Other commercial financial activity, apart from insurance and pension funds (PKD 64.9) 4. Activity supporting financial services, apart from insurance and pension funds (PKD 66.1) 5. Purchase and sale of real properties on own account (PKD 68.1) 6. Rental and management of own or leased real properties (PKD 68.2) 7. Activity related to real property market conducted on demand (PKD 68.3) 8. Activity related to software and advisory services in the field of IT and related activity (62.0) 9. Rental and lease of motor vehicles, apart from motorcycles (PKD 77.1) 10. Rental and lease of personal use and household products (PKD 77.2) 11. Rental and lease of other machinery, equipment and other assets (PKD 77.3) 12. Lease of intellectual property and similar products, apart from works protected by copyright (PKD 77.4) 13. Activity related to office administration, including supplementary activity (PKD 82.1) 14. Commercial activity, not classified elsewhere (PKD 82.9) 15. Other individual commercial activity (PKD 96.0). 2. If any authorisation, license or permit is required to be obtained in order to conduct business activity referred to hereinabove, the Company shall undertake this activity only upon obtaining a relevant permit, license or authorisation. 3. Pursuant to Article 417 4 of the Code of Commercial Companies, a significant change of the scope of the Company s activity may be effected without repurchase of the shares of the shareholders who do not accept the change of the scope of the Company s activity, if a resolution concerning this change is adopted by a majority of two third of votes cast in the attendance of the persons representing at least a half of the share capital.
III. Share Capital 5 1. The Company s share capital is PLN 58 609 786 (fifty eight million six hundred and nine thousand seven hundred and eighty six) and is divided into 2,138,125 (two million one hundred and thirty eight thousand one hundred and twenty five) series A1 shares, with numbers from 1 to 2,138,125, 1,400,000 series B shares with numbers from 2,138,126 to 3,538,125, 7,076,250 series C shares with numbers from 3,538,126 to 10,614,375, 10,614,375 series D shares with numbers from 10,614,376 to 21,228,750, 2,122,874 series E shares with numbers from 21,228,751 to 23,351,624, 16,000,000 series G shares with numbers from G00 000 001 to G16 000 000, 3 930 000 series H shares with numbers from H 0 000 001 to H 3 930 000 and 10 000 000 series I shares with numbers from I 00 000 001 to I 10 000 000, 5,328,162 series J shares with numbers from J 0 000 001 to J 5 328 162. 2. A nominal value of each share is PLN 1.00 (one). 3. The Company s shares are only bearer shares. 4. The Company may issue bonds convertible into shares and bonds with a right of pre-emption to subscribe the Company s shares. The bonds convertible into shares and bonds with a right of preemption to subscribe the Company s shares are issued on the basis of a resolution of the General Meeting of Shareholders. The Ordinary bonds are issued on the basis of a resolution of the Company s Management Board under the terms and conditions accepted by the Company s Supervisory Board. 5. The profit designated for allocation by the General Meeting of Shareholders for allocation shall be proportionally divided into shares participating in a dividend. 6. The Company s shares may be redeemed through lowering the share capital, upon a consent of the shareholder, through their purchase for a fee (voluntary redemption). The detailed procedure to redeem shares shall be each time determined by a resolution of the General Meeting of Shareholders. 6 Target Share Capital 1. The Management Board of the Company may, by 14 June 2013, increase the share capital under the terms and conditions specified in Chapter 5 of the Code of Commercial Companies, within the target share capital of PLN 17,513,718.00 (seventeen million five hundred and thirteen thousand seven hundred and eighteen zloty), i.e. up to an amount of PLN 40,865,342.00 (forty million eight hundred and sixty five thousand three hundred and forty two ). Within the above specified limits, the Management Board may execute its authority through one or more consecutive increases of the share capital. 2. The resolutions of the Management Board concerning the determination of the share issue price and issue of shares in return for contributions in kind, issued under the target capital require a unanimous consent of the Supervisory Board to be granted in the attendance of all members of the Supervisory Board. 3. Subject to point 2 hereinabove, the Management Board shall decide upon all the matters related to the increase of the share capital within the target share capital, in particular about the issue mode and the dates of payments for shares. 4. The increase of the share capital on the basis of the above specified authority shall not be effected from the Company s equity capital.
5. Under the authority, the Management Board may issue shares for cash contributions and contributions in kind. The Management Board shall not issue preference shares and grant personal shares to the shareholders, referred to in Article 354 of the Code of Commercial Companies. 6. The increase of the share capital within the target share capital shall not require an amendment to the Articles of Association. 7. A resolution of the Management Board adopted within the statutory authority shall replace an a resolution of the General Meeting of Shareholders concerning the increase of the share capital. 7 1. The Company s share capital is conditionally increased by an amount of PLN 181,830.00 (one hundred and eighty one thousand eight hundred and thirty), through authorising the Management Board to issue not more than 181,830.00 (one hundred and eighty one thousand eight hundred and thirty) series C shares in order to fulfil an obligation to issue the shares to the holders of the bonds with a right of pre-emption, issued on the basis of the resolution of the General Meeting of Shareholders of the Company of 10 September 2003 amended on 5 April 2004 ( Bonds ). 2. The holders of the series C shares shall participate in a divided paid by the company if issued on or before the date of acquiring a right to dividend determined by a resolution of the General Meeting of Shareholders. 3. The current shareholders right of pre-emption to the series C shares is hereby excluded. 4. The holders of the Bods shall hold a right to subscribe the series C shares under the following terms and conditions: 1) the share issue price equals its nominal value and is PLN 1.00 (one zloty); 2) subscriptions for the series C shares may be effective until 1 August 2005. 5. The date to execute the right to subscribe the shares expires on 31 December 2006. 7a 1. The Company s share capital is hereby conditionally increased by an amount not to exceed PLN 1,000,000 (in words: one million zloty). 2. The conditional increase of the share capital, referred to in point 1, shall be effected through the issue of not more than 1,000,000 (in words: one million) Series F Shares, with numbers from F0 000 001 to F1 000 000 of a nominal value of PLN 1.00 (in words: one zloty) each and a total nominal value not higher than PLN 1,000,000 (in words: one million zloty). 3. The Series F Shares may be subscribed by the persons holding rights under the Series A Subscription Warrants issued on the basis of the Resolution No 5/2013 of the Extraordinary General Meeting of Shareholders of HYGIENIKA S.A., with its registered office in Lubliniec, dated 7 November 2013, concerning the issue of the Series A Subscription Warrants with a right of pre-emption of the Series F Shares and the exclusion of the current shareholders right to subscribe all the Series A Subscription Warrants, also concerning the approval of the Incentive Scheme for the Company s and its subsidiaries management. 4. The Series F Shares shall participate in dividend, under the following terms and conditions: a) The Series F Shares subscribed on or before the dividend date as specified in the resolution adopted by the General Meeting of Shareholders concerning the allocation of profit shall participate in profit starting from the profit generated for the previous financial year, i.e. for the period from 1 January to 31 December of the financial year directly preceding the year in which the shares are released. b) The Series F Shares subscribed on the date after the dividend date determined by the resolution of the General Meeting of Shareholders concerning the allocation of profit shall participate in profit starting from the profit generated for the financial year during which these shares are released, i.e. for the period from 1 January to 31 December of this financial year. 5. The Series F Shares are subscribed only for cash contributions.
The Series F Shares may be subscribed by warrant holders until 31 December 2015. 8 1. The Company may acquire equity shares only: 1) to prevent from a direct serious threat to the Company; 2) to offer these shares to the Company s or companies employees; 3) as a result of an action effected free of charge or universal succession; 4) to redeem them; 5) in other circumstances permitted by law. 2. From the date on which the Company s shares are permitted to public trading in security, the equity shares may be acquired in compliance with the provisions of points 2) and 4) on the basis of a public invitation or through serial transactions. The Company may acquire equity shares in any other manner, if their purchase price is lower than an average weighted share price for the month preceding the date of transaction, and the number of shares acquired in compliance with this procedure is not higher than 5% of a total number of shares traded on all the markets on which the Company s shares are listed. 9 1. Current shareholders shall have a right of pre-emption to subscribe newly issued shares in the increased share capital proportionally to the number of shares already held thereby. 2. Acting in the Company s interest, the General Meeting of Shareholders may deprive the current shareholders of their right of pre-emption to subscribe newly issued shares. The bodies of the Company are: 1. the General Meeting of Shareholders, 2. the Supervisory Board, 3. the Management Board. IV. Bodies of the Company 10 A. The General Meeting of Shareholders 11 1. The General Meeting of Shareholders shall be convened by the Management Board as ordinary or extraordinary. 2. The Ordinary General Meeting of Shareholders shall be held by the end of June each year at the latest. 3. If the Management Board fails to convene the Ordinary General Meeting of Shareholders within the prescribed timeframe, it may be convened by the Supervisory Board. 12 1. The Extraordinary General Meeting of Shareholders shall be convened by the Management Board on its own initiative, at a request of the Supervisory Board or at a written request of the shareholders representing in total at least one twentieth of the Company s share capital. The Extraordinary General Meeting of Shareholders may be also convened by the Supervisory Board, if it considers it necessary or if the Supervisory Board adopts a resolution concerning the suspension of a member of the Management Board or the entire Management Board in performing the management function in
order to adopt a resolution to dismiss a member of the Management Board or the entire Management Board; in the latter case, a resolution concerning the convening of the General Meeting of Shareholders shall be adopted by members of the Supervisory Board delegated to perform functions of members of the Management Board. The Extraordinary General Meeting of Shareholders may be also convened by the shareholders who represent at least half of the share capital or at least half of the total number of votes. 2. Apart from any other persons specified by the provisions of the Code of Commercial Companies, each Independent Member of the Supervisory Board may request that: - the General Meeting of Shareholders be convened; - specific matters be included into the agenda of the General Meeting of Shareholders. 3. Deletion specific matters included in the agenda at a request of the authorised person or person shall require their consent. 4. Upon the receipt of a relevant request, the Company s Management Board shall promptly, but not later than within 14 days from the date of the request filing, convene the Extraordinary General Meeting of Shareholders. 5. If the Management Board fails to convene, within the set timeframe, the Extraordinary General Meeting of Shareholders, the right to convene the meeting is held by the shareholders that file a request to convene the General Meeting of Shareholders, upon obtaining an authorisation of the Court of Registration, with the Supervisory Board, if it has request the Management Board to convene the Extraordinary General Meeting of Shareholders or jointly with at least two Independent Members of the Supervisory Board. 6. A request to publish an announcement shall be filed with the Court of Registration not later than after two weeks from the date of filing a request to convene the General Meeting of Shareholders. 13 1. The General Meeting of Shareholders shall be convened by an announcement published on the Company s website and in the manner prescribed to provide current and periodical information, in compliance with the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies. If the Company loses a status of a public company, the general meeting of shareholders shall convened in the manner determined in the Code of Commercial Companies. 2. The agenda of the General Meeting of Shareholders shall be published in an announcement. 14 All the matters raised by the Company s Management Board at the General Meeting of Shareholders shall be priorly presented to the Supervisory Board to render its opinion. 15 1. The Shareholders may participate in the General Meeting of Shareholders and execute their right to vote personally or through an attorney. It is forbidden to limit the Shareholder s right to appoint at attorney at the general meeting of shareholders and a number of attorneys. 2. Members of the Company s bodies, as well as the persons indicated by the Management Board to service the General Meeting of Shareholders, may also participate in the General Meeting of Shareholders. 16 1. The General Meeting of Shareholders shall be able to adopt resolutions, if it has been duly convened.
2. The General Meeting of Shareholders shall be commenced by the Chairman of the Supervisory Board or his deputy. In the event of their absence, the General Meeting of Shareholders shall be commenced by the President of the Management Board or a person appointed by the Management Board. If the General Meeting of Shareholders is convened at a request of the Court, the General Meeting of Shareholders shall be commenced by one of the shareholders who have filed a request to convene the General Meeting of Shareholders of a Chairman of the General Meeting of Shareholders appointed by the Court. 3. A person opening the General Meeting of Shareholders shall, in compliance with point 2, appoint the Chairman of the General Meeting of Shareholders. Voting concerning the appointment of the Chairman of the General Meeting of Shareholders is secret. During voting concerning a candidature of the Chairman of the General Meeting of Shareholders, the shareholders and their representatives shall the number of votes as specified in the list prepared by the Management Board, in compliance with Article 407 1 of the Code of Commercial Companies. 4. The organisational resolutions may concern only the review of the matters specified in the agenda, announcing a break in the meeting, appointment the Company s attorney to represent it in the proceedings concerning the confirmation of invalidity or repealing resolutions of the General Meeting of Shareholders, or possibly convening the General Meeting of Shareholders in order to review the matters filed by the shareholders, members of the Management Board or the Supervisory Board, and not included in the agenda of the General Meeting of Shareholders adopted by the Management Board. 5. The resolutions of the General Meeting of Shareholders shall be adopted by an absolute majority of the votes cast, unless absolutely applicable laws and regulations and the provisions of these Articles of Association provide otherwise. 6. Voting is open. A secret voting is ordered for elections and in respect of the requests to remove members of the Company s bodies or liquidators, making them liable and in personal matters, or at a request of even one of the persons authorised to participate in the General Meetings of Shareholders. 7. Personal voting is ordered in the circumstances provided by the Code of Commercial Companies. If the law provides for personal voting, a request for secret voting proves ineffective. 17 1. A subject of the Ordinary General Meeting of Shareholders shall include: 1. reviewing and approving the financial statements and the report of the Management Board concerning the Company s activity, as well as the consolidated financial statements of the capital group where the Company is a parent company and the report of the activity of the group, as well as the report of the Supervisory Board referred to in Article 382 3 of the Code of Commercial Companies, 2. adopting a resolution concerning the allocation of profit or coverage of losses for a previous financial year, 3. adopting a resolution concerning granting a vote of confidence to members of the Company s bodies, 4. appointing new bodies of the Company if they are appointed by the General Meeting of Shareholders and the mandates of their members expire on the date of convening the General Meeting of Shareholders. 2. The exclusive competencies of the General Meeting of Shareholders also include: 1. appointing and dismissing members of the Supervisory Board, subject to 18.5 of the Articles of Association, 2. amending the Company s Articles of Association,
3. issue of bonds convertible into shares or bonds with a right to pre-emption to subscribe the Company s shares, 4. determining the principles of awarding remuneration to members of the Supervisory Board, 5. merger or dissolution of the Company and appointment of liquidators, 6. sale and lease of the Company s business or establishing usufruct right thereon, 7. filing a claim for remedy of damage towards members of the Company s bodies or founders in respect of remedy of damage caused by their illegal actions, 8. repealing the regulations of the General Meeting of Shareholders. 3. The consent of the General Meeting of Shareholders is not required for the Company s purchase and sale of real properties, perpetual usufruct right or a share in a real property or perpetual usufruct right. B. The Supervisory Board 18 1. The Company s Supervisory Board shall compose of from 5 to 7 members, to be appointed by the General Meeting of Shareholders, subject to 18.5 of the Articles of Association. 2. The number of members of the Supervisory Board shall be determined by the General Meeting of Shareholders prior to appointing members of the Supervisory Board. 3. A mandate of a member of the Supervisory Board shall expire: - at the moment of closing the General Meeting of Shareholders approving the financial statements for the last year of tenure of the Supervisory Board, - at the moment of appointing a member of the Supervisory Board to the Company s Management Board; - at the moment of dismissing by the General Meeting of Shareholders; - at the moment of filing a written resignation at the Company s address; - at the moment of his death. 4. The Supervisory Board is appointed for a three-year term of office. If a member of the Supervisory Board is appointed during its tenure, his term of office shall expire at the moment of expiry of a term of office of all other members of the Supervisory Board. 5. If, during the tenure of the Supervisory Board, the number of its members is decreased below a minimum number determined by a resolution referred to in 18.2 of the Articles of Association, the other members of the Supervisory Board may by a resolution appoint a new member. The appointment of a new member of the Supervisory Board in compliance with this procedure shall be approved by the soonest General Meeting of Shareholders. A rejection to approve the appointment by the General Meeting of Shareholders shall not prejudice the activities undertaken by the Supervisory Board with participation of a member appointed in compliance with the procedure referred to in the first sentence. The provisions of this point shall not apply if the number of members of the Supervisory Board decreased below the minimum number determined in the Code of Commercial Companies. 19 1. Subject to the provisions of 21 of the Articles of Association, the Supervisory Board shall be composed of not fewer than two members who shall satisfy the requirements specified in point 2 hereinbelow, hereinafter referred to as the Independent Members of the Supervisory Board. 2. The Independent Member of the Supervisory Board shall satisfy the following requirements: 1) he shall not be the Affiliate or a partner, shareholders, employee, advisor or a member of the bodies of the Company or the Affiliate;
2) he shall not be a relative or a related person up to the second degree of an employee of the Company or the Affiliate; 3) he shall not conduct, directly or indirectly, any business with the Company or the Affiliates; 4) he shall not be an employee, advisor, member of the bodies, owner, partner, member, shareholder of a company or co-operative, or any other entrepreneur that conducts any competitive activity, and a relative of this person. 20 As appointed by groups, the Supervisory Board shall be composed of five members. 21 1. The resolutions of the Supervisory Board may be adopted, if all members have been due invited to participate in the meeting. 2. The resolutions of the Supervisory Board are adopted by an absolute majority of votes cast, unless the provisions of the Articles of Association states otherwise. 3. In the event of equal number of votes, a vote cast by the Chairman of the Supervisory Board shall be considered decisive. 22 1. The works of the Supervisory Board shall be managed by its Chairman, and in the event of his absence, by its Vice-Chairman, to be appointed by the Supervisory Board from among its members at the first meeting of the Supervisory Board in secret voting. 2. The first meeting of the Supervisory Board shall be convened by the Management Board, within 14 (fourteen) days from the date of its appointment. 3. The Management Board shall ensure administration of the Supervisory Boards secretary office. 23 1. Members of the Supervisory Board shall fulfil their obligations only personally. 2. The Supervisory Board may delegate its members to individually perform specific supervision activities. 3. Members of the Management Board, delegated to perform supervision functions individually or delegated by a minority group, are bound by a non-competition undertaking, within the extent which applies to members of the Management Board. 4. The Supervisory Board may suspend individual or all members of the Supervisory Board in their obligations. 5. Members of the Management Board may participate in the meetings of the Supervisory Board as advisors. 6. For the performance of their functions, members of the Supervisory Board shall be paid a remuneration in an amount to be determined by the General Meeting of Shareholders. 7. If a member of the Supervisory Board is delegated to perform management function, his mandate with the Supervisory Board and a right to be paid a remuneration shall be suspended. For the performance of management function, a delegated member of the Supervisory Board shall be paid a separate remuneration as determined in the resolution of the Supervisory Board. 24 1. The meetings of the Supervisory Board are convened at least once a quarter by its Chairman; if he is absent, the meeting is convened by its Vice-President, on own initiative, at a request of the Management Board or a member of the Supervisory Board.
2. The meetings of the Supervisory Board are convened by registered letters or shipments forwarded by a courier, sent at a delivery address indicated by a member of the Supervisory Board. Instead of a registered letter or a shipment forwarded by a courier, a notification may be sent to a member of the Supervisory Board by electronic mail, if he has already agreed thereto in writing, stating an email address at which an invitation is to be sent. An invitation shall be attached with the agenda of the convened meeting of the Supervisory Board. An invitation and the materials shall be sent within at least 5 (five) days prior to the prospected date of the meeting of the Supervisory Board. 3. The meetings of the Supervisory Board may be held also without their formal convening, if all members of the Supervisory Board are present and grant their consent to hold the meeting and include specific matters into the agenda. 4. In the matters which are not included into the agenda, at the meeting of the Supervisory Board, its members may cast their vote in writing, through another member of the Supervisory Board. It shall not apply to the matters specified in Article 388 4 of the Code of Commercial Companies. 5. The Supervisory Board may adopt resolutions in writing or with use of means of direct remote communication, apart from the matters referred to in Articles 388 4 of the Code of Commercial Companies. The date of adopting a written resolution shall mean a date of its signing by the last of members of the Supervisory Board. The resolutions adopted with use of means of direct remote communication are added to the minutes of the soonest meeting of the Supervisory Board. The detailed procedure of the Supervisory Board in writing and with use of means of direct remote communication is determined in the Regulations of the Supervisory Board. 25 The competencies of the Supervisory Board include regular supervision over the Company s activity. Apart from the matters specified in laws and regulations and in other provisions of the Articles of Association, the competencies of the Supervisory Board shall include: 1) appointment of an entity authorised to audit and review the Company s financial statements, 2) appointing and dismissing members of the Management Board, 3) determining an amount and principles to award remuneration and employ members of the Management Board, 4) granting a consent for the Company to make an advance payment against a prospected dividend, 5) representing the Company in respect of agreements and disputes with members of the Management Board, 6) examination of the financial statements and the report of the Management Board concerning the Company s activity, as well as the consolidated financial statements of the capital group where the Company is a parent company and the report of the group s activity in terms of accuracy with books and documents, as well as the facts of the case, and the motions filed by the Management Board concerning the allocation of profit and coverage of losses and filing the annual written report concerning this examination with the General Meeting of Shareholders, 7) suspending, for important reason, in function individual or all members of the Management Board, and delegating a member or members of the Supervisory Board, for the time not to exceed three months, to temporarily perform the obligations of members of the Management Board who have been dismissed, filed their resignations or they are not able to fulfil their obligations for any other reason; 8) approving annual schedule of works and expenditures (budget); 9) granting a consent to sell the Company s fixed assets (tangible fixed assets, intangible assets, shares in any other companies) whose value exceeds 10% (ten per cent) of the Company s equity capital, according to the balance sheet for a previous financial year;
10) subject to the provisions of point 9 hereinabove and point 11 hereinbelow, granting a consent to execute a right or assume an obligation of the value to exceed PLN 1 000 000 (one million), irrespective of whether it concerns one or a few related activities. For assuming regular or periodical obligations, for the purpose of the previous sentence, the value of payments for the entire period of their duration is calculated, and if they are assumed for indefinite time, these payments are calculated for a 12-month period. The provisions of this point shall not apply to the activities which involve sale or purchase of goods for current commercial operations of the Company or purchase of raw materials and half-finished products used by the Company to manufacture goods; 11) granting a consent to execute a credit facility agreement, loan agreement or surety agreement or guarantee agreement, of the value to exceed PLN 2 000 000 (two million); 12) granting a consent to purchase, sell or encumber a real property, a perpetual usufruct right or a share in a real property or perpetual usufruct right, 13) granting a consent for a member of the Management Board to deal with competitive interests; 14) approving the Regulations of the Management Board; 15) providing opinions in respect of the matters raised by the Management Board to be discussed by the General Meeting of Shareholders. 26 The Supervisory Board shall act on the basis of the regulations adopted thereby. C. The Management Board 27 1. The Management Board shall be composed of from one to four members, including the President, appointed and dismissed by the Supervisory Board. 2. Each member of the Management Board acting independent shall be authorised to make statements of intent for and on behalf of the Company. 3. The Company may be also represented by attorney appointed by the Management Board, on the basis of and within the extent of a power of attorney granted thereto. 4. Each member of the Management Board is appointed for a three-year term of office. A mandate of a member of the Management Board shall expire on the date of the Ordinary General Meeting of Shareholders approving the financial statements for the last year of his tenure. 5. The Management Board and its individual members may be dismissed by the General Meeting of Shareholders prior to the expiry date of their tenure. 28 1. The Management Board shall manage the Company s operations, manage and administers its movable and immovable assets and the Company s rights, adopt resolutions and make decisions in all the matters which are not stipulated to the General Meeting of Shareholders or the Supervisory Board. 2. The Management Board shall make unanimous decisions on appointing a proxy. A proxy may be dismissed by each member of the Management Board. 3. The resolutions of the Management Board are adopted by an absolute majority of votes. In the event of equal numbers of votes, a vote cast by the President of the Management Board shall be decisive. The scope of rights and obligations of the Management Board, as well as its procedure, shall
be determined by the regulations of the Management Board to be adopted thereby and approved by the Supervisory Board. 29 1. The Management Board shall prepare annual financial statements and the report of the Company s activity by the end of the third month from the end of the financial year. 2. The statements and report referred to hereinabove, upon rendering a relevant opinion to this extent by independent auditors, along with a draft resolution concerning the allocation of profit and opinion and report of independent auditors, shall be submitted by the Management Board to the Supervisory Board to review it, in compliance with Article 382 2 of the Code of Commercial Companies not later than within 30 days prior to the date of the Ordinary General Meeting of Shareholders. V. Accounting 30 1. The Company s equity capitals include: 1) the share capital, 2) the supplementary capital, 3) the reserve capitals. 2. The Company s financial year covers a calendar year. 31 The reserve capitals may be established or liquidated as needed, on the basis of the resolutions of the General Meeting of Shareholders. 32 The profit after compulsory write-offs shall be used: 1) to cover losses from previous years, 2) for a dividend for shareholders in an amount to be determined on an annual basis by the General Meeting of Shareholders, 3) for any other purposes, as provided for in the resolutions of the General Meeting of Shareholders. 33 1. The Shareholders shall have a right to a share in profit designated for distribution among the shareholders (dividends) by a resolution of the General Meeting of Shareholders. 2. A resolution of the General Meeting of Shareholders concerning the allocation of profit shall specify a date to determine a right to dividend and a dividend date, which will however not exceed six months from the date of resolution. 3. A draft resolution is presented by the Management Board. 4. If any shares of the Company are in public trading, a draft resolution is presented by the Management Board upon consulting these dates with Krajowy Depozyt Papierów Wartościowych. 5. The Company s Management Board may make advance payments to the shareholders against a prospected dividend at the end of the financial year, if the Company possesses sufficient funds to make this payment. Making an advance payment requires a consent of the Supervisory Board. The Company may make an advance payment against a prospected dividend if its financial statements approved for previous financial year indicates profit. This advance payment will constitute not more than half of profit generated from the end of a previous financial year, as indicated in the financial statements, audited by an independent auditor, increased by reserve capitals established from profit
which the Management Board may use to make advance payments and reduced by uncovered losses and equity shares. Deleted. VI. Final Provisions 34 35 In these Articles of Association, the terms written with a capital letter shall be understood as follows: 1. Company Hygienika S.A. 2. General Meeting of Shareholders, Supervisory Board, Management Board relevant bodies of the Company. 3. EBITDA profit from sales generated by the Company according to the profit and loss account for a specific financial year, increased by amortisation write-offs, determined on the basis of the financial statements prepared in compliance with Polish laws and accounting principles. 4. Affiliate controlling entities in respect of the Company, subsidiaries of the parent companies, members of the Company s bodies and these entities and other members, shareholders of these entities. Deleted. 36