Corporate governance

Declaration on the application of corporate governance principles in 2018

Board of VRG S.A. with its registered office in Cracow (hereinafter referred to as the "Company") presents a statement on the application of corporate governance principles prepared in accordance with the Regulation of the Minister of Finance of March 29, 2018 regarding current and periodic information provided by issuers of securities and terms of recognition as equivalent information required by the law of a non-member state (Journal of Laws of 2018, item 757).

This statement constitutes a separate part of the report of the Management Board on the operations of the Company which is part of the annual report of the Company for the financial year 2018.

Information on the dividend

In the last five financial years, VRG S.A. in Cracow (the "Company") did not pay dividends. At present, there are no decisions of the Company's authorities regarding the planned dividend.

The rules regarding changing the entity authorized to audit financial statements

In accordance with existing practice resulting from the provisions of § 21 item 2 point 8 of the Statute of VRG S.A. in Cracow (the "Company"), the Supervisory Board, on the basis of offers received by the Company from entities authorized to audit financial statements, selects annually an auditor to audit the Company's financial statements. The Supervisory Board's resolution on the appointment of an auditor to audit the Company's financial statements in a given financial year is made taking into account the recommendation submitted by the Audit Committee operating within the Supervisory Board.

Diversity Policy

The Company informs that it has no regulations including a description of the diversity policy applied by the Company with respect to the Company's governing bodies and its key managers, taking into account such elements of diversity policy as gender, education, age, and professional experience. In accordance with the principle of equality before the law in force in Poland, the Company recognizes that everyone has the right to equal treatment and that nobody can be discriminated against in any political, social or economic life for any reason, including employment. The company follows this principle in its recruitment processes. At the same time, in relation to members of the Company's governing bodies, the election of persons holding the functions of members of the management board and the supervisory board is made by the general meeting of shareholders and the supervisory board, guided by ownership decisions, corporate decisions and professional principles. In relation to key managers, the Company makes decisions on establishing cooperation with candidates assessing their professional experience, seniority, and education in accordance with the scope of tasks for a given position. The Company employs both women and men in various age groups, having regard to the substantive criteria and fully observing the principle that restricting freedom and human and civil rights solely on the basis of race, sex, language, religion or lack thereof, social origin, ancestry and property is unacceptable.

The organizational structure of the Company