Supervisory Board's Committees

Pursuant to the provisions of the Rules of the Supervisory Board, the following permanent committees operate within the Supervisory Board:

• The Audit Committee
• Nominations and Remuneration Committee

The committee consists of at least three members appointed by the Supervisory Board from among its members for a period corresponding to the length of the Board's term. The members of the committee elect a chairman of the committee from among their number. The chairman of the committee directs and supervises the committee's work, particularly the organisation and procedure of committee meetings.

Committees' personal composition

As at the date of publication of this Report, i.e. 21 March 2016, the Audit Committee and Nominations and Remuneration Committee operate in the following composition:

Audit Committee operations

The detailed description of the Audit Committee's competences is contained in the Act of 7 May 2009 on certified auditors and their self-governing body, entities authorised to audit financial statements and on Enea SA.

The task of the Audit Committee is to advise the Board regarding the internal policy and budget procedures adopted by the Company and inspect them and advise on the Company's contacts with the certified auditor.

Particular aspects of operations of the Audit Committee include, e.g.:

• monitoring the accuracy of the financial information presented by the Company, particularly by reviewing the appropriateness and consistency of the application of the accounting methods adopted by the Company and its Group (including the criteria for consolidating the financial statements of the Companies in the Group)
• monitoring the process of financial reporting
• monitoring the effectiveness of internal control systems, internal audits and risk management
• monitoring the financial audit and presenting recommendations to the Board regarding the selection, appointment, re-appointment and dismissal of the external auditor by the authorised body and regarding the terms and conditions of his engagement
• evaluating and submitting an annual internal audit plan to the Supervisory Board for approval
• evaluating and submitting an annual internal audit unit budget to the Supervisory Board for approval
• review at least annually the internal control and risk management systems, with a view to ensuring that the main risks (including those related to compliance with existing legislation and regulations) are properly identified, managed and disclosed
• reviewing the effectiveness of the external auditing process and monitoring the response of the Management Board to written recommendations presented to it by external auditors

Nominations and Remuneration Committee operations

The Nominations and Remuneration Committee should be composed of at least one independent member in the meaning of the European Commission's recommendation, but in the case of nomination to the Board of more than one person fulfilling the above independence criteria, the committee should be composed of possibly the largest number of independent members.

The task of the Nominations and Remuneration Committee is to promote the achievement of the Company's strategic objectives by presenting opinions and motions to the Board regarding the structure of employment and the remuneration paid to the Company's personnel, particularly management personnel. The description of the Nominations and Remuneration Committee's tasks was specified in the Rules of the Supervisory Board of Enea SA.

Particular aspects of operations of the Nominations and Remuneration Committee include:

• analysing Management Board's policy concerning the nomination, election and appointment of senior managerial personnel
• presenting proposals to the Board relating to the remuneration and forms of employment of members of the Management Board, taking into account their previous achievements
• presenting opinions to the Supervisory Board on the justification for awarding performance-based remuneration and on incentives based on realisation of tasks and goals of the Company and proposals in that respect
• analysing Management Board's policy concerning the nomination, election and appointment of senior managerial personnel
• presenting proposals to the Board relating to the remuneration and forms of employment of members of the Management Board, taking into account their previous achievements
• presenting opinions to the Supervisory Board on the justification for awarding performance-based remuneration and on incentives based on realisation of tasks and goals of the Company and proposals in that respect

The Audit Committee

The Audit Committee held 3 meetings and adopted 7 Resolutions regarding e.g.:

• positive assessment of methods for auditing financial statements of the Company for the financial year 2014
• approval of the report on the performed audit of the assessment report of the internal control system in Enea Group and its submission to the Supervisory Board
• approval of Enea SA’s Supervisory Board’s Audit Committee’s Report on operations in 2014 and its submission to the Supervisory Board
• approval of Enea SA’s Supervisory Board’s Audit Committee’s Report on operations in H1 2015 and its submission to the Supervisory Board
• positive assessment of the Annual Audit Plan for 2016 for Enea Group and Budget of the Audit Management Department for 2015

Nominations and Remuneration Committee

The Nominations and Remuneration Committee held 5 meetings and adopted 31 Resolutions. The subject matter of the meetings of the Committee was e.g. development of a recommendation for the Supervisory Board regarding:

• approval of Enea SA's Members of the Board KPI ratios for 2015 and 2016 and conclusion of annexes to the Service Agreements - managerial contracts with Members of the Board of Enea SA
• confirmation of the realisation of Enea SA's Members of the Board KPI ratios for 2014 financial year.
• granting consent to the Members of Enea SA’s Management Board to hold the position of a Member of the Supervisory Board in Enea Group Companies