Supplemental Information on the Financial Situation and Information for Investors

Listed Security Issuer Information

Shareholder Structure

Since 2006, the Company’s sole shareholder has been CZI Holdings N.V. Česká pojišťovna’s ultimate controlling entity is Assicurazioni Generali S.p.A.

Controlling entities wield control based on the weight of their votes alone. Information on mutual relations with Group companies is presented in the notes to the financial statements and in the notes to the consolidated financial statements, as well as in the related-party transactions, which are included in this Annual Report. Česká pojišťovna is not dependent on any other entity in the Group.

Securities Issued by Česká pojišťovna

Shares

As at 31 December 2014, the approved share capital consisted of 40,000 dematerialised, registered ordinary shares totalling CZK 4,000 million.

Bonds

On 13 December 2012, as part of its bond programme, Česká pojišťovna issued 500,000,000 bonds with a total nominal value of CZK 500 million. The bonds bear interest at a fixed rate of 1.83% p.a.

The lead manager of the bond issue is Raiffeisenbank a.s.

Principal Business according to the Current Articles of Association and Types of Insurance Written

Česká pojišťovna is a composite insurer offering a wide range of life and non-life insurance classes.

Under Decision of the Ministry of Finance of the Czech Republic Ref. No 322/26694/2002, dated 11 April 2002, which entered into force on 30 April 2002 and which grants the Company a licence to engage in insurance, reinsurance and related activities, under Decision of the Ministry of Finance of the Czech Republic Ref. No 32/133245/2004-322, dated 10 January 2005, which entered into force on 14 January 2005 and which expands the Company’s licence to engage in insurance- and reinsurance-related activities, and under Decision of the Czech National Bank Ref. No 2012/11101/570, amending the scope of licensed activities, the Company’s principal business objects are as follows:

1. Insurance activities pursuant to Act No 277/2009 on insurance, comprising

• the life insurance classes referred to in Annex 1 to the Insurance Act, Part A, I, II, III, VI, VII and IX;
• the non-life insurance classes referred to in Annex 1 to the Insurance Act, Part B, 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17 and 18.

2. Reinsurance activities, comprising all types of reinsurance activities under the Insurance Act.

3. Insurance- and reinsurance-related activities:

• intermediary services related to insurance and reinsurance activities under the Insurance Act;
• consultancy services related to the insurance of natural and legal persons under the Insurance Act;
• investigations into insurance claims pursuant to an agreement with an insurer under the Insurance Act;
• the exercise of rights and fulfilment of obligations for and on behalf of the Czech Insurers Bureau pursuant to Act No 168/1999, as amended;
• the intermediation of financial services referred to in a) to j) below:

a) intermediation of the acceptance of deposits and other funds due from the public, including intermediation in building savings schemes and supplemental pension insurance;

b) intermediation of loans of all types, including, without limitation, consumer loans, mortgage loans, factoring and the financing of commercial transactions;

c) intermediation of finance leases;

d) intermediation of all payments and money transfers, including credit and debit cards, travellers’ cheques and bank drafts;

e) intermediation of guarantees and promissory notes;

f) intermediation of customer trading on individual customer accounts on the stock exchange or other markets, for cash or otherwise, concerning negotiable instruments and financial assets;

g) intermediation of the management of assets, such as cash or portfolios, all forms of collective investment management, pension fund management, escrow accounts and custodianships;

h) intermediation of payment and clearing services relating to financial assets, including securities, derivatives and other negotiable instruments;

i) advisory-based intermediation and other ancillary financial services relating to all activities listed in a) to h), including references to loans and analysis thereof, research and consultancy in the field of investments and portfolios, consultancy in the field of acquisitions and restructuring, and corporate strategy;

j) intermediation of the provision and transmission of financial information, financial data processing, and relevant software from providers of other financial services.

4. Training activities for insurance intermediaries and independent loss adjusters.

The Company also engages in all activities related to its ownership interests in other legal entities.

Shareholder Rights and Obligations

Holders of the Company’s ordinary shares are entitled to receive dividends approved in individual time periods, and are entitled to exercise one vote per share held at General Meetings.

The rights and obligations of the Company’s shareholders are set forth in Act No 90/2012 on companies and cooperatives, as amended, and Česká pojišťovna’s Articles of Association, which are available in the Collection of Documents of the Commercial Register. These rights include, most importantly:

• the right to a share in the Company’s earnings;
• the right to attend General Meetings, vote, demand explanations and raise motions at General Meetings;
• the right to subscribe for a part of new Company shares, in a subscription to increase the share capital, to the extent of that shareholder’s stake in the Company’s share capital in cases where the shares are subscribed by means of contributions in cash; the pre-emptive right to subscribe for new shares if the share capital is increased, in proportion to the shareholder’s stake in the Company’s existing share capital. Conditions applicable to changes in the share capital are set out in the Company’s Articles of Association;
• the right to share in the liquidation surplus remaining upon dissolution of the Company.

Capital gains and other income from shares are taxed in accordance with Czech legislation, i.e. Act No 586/1992 on income tax, as amended. Profit-sharing is taxed at a special tax rate of 15%. Exceptions to this are possible under international double taxation treaties.

Articles of Association

Česká pojišťovna’s Articles of Association valid in 2014 were approved by the Company’s sole shareholder on 3 November 2006 and further amended in 2009, 2010, 2011 and 2013.

On 17 June 2014, further to a decision by the Company’s sole shareholder, new Articles of Association were adopted and the Company was subjected to Act No 90/2012 on companies and cooperatives (the Business Corporations Act) as a whole.

Those Articles of Association were subsequently revised on 30 October 2014.

Fees Paid to the Audit Firm in 2014

The audit firm’s fees for audit services provided to the Česká pojišťovna Group in 2014 totalled CZK 21.97 million.

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The audit firm provided no other services to Česká pojišťovna or Group companies.

Solvency of Česká pojišťovna

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Remuneration Principles

Remuneration Principles – Members of the Board of Directors and Supervisory Board

In general, the compensation model applied to the Company’s governing bodies and executives reflects the long-term strategy of simplicity and transparency in the motivation and remuneration of all employees of Česká pojišťovna.

The terms of remuneration for members of the Board of Directors and the Supervisory Board are stipulated in a “Board Membership Contract”. Certain other benefits beyond those laid down in this Contract are granted by the Company’s internal rules governing further benefits of members of the Board of Directors. On 1 July 2014, there was a paradigm shift in that members of the Board of Directors can no longer simultaneously be Company employees. Their only remuneration from the Company therefore stems from the Board Membership Contract approved by the Company’s sole shareholder. The remuneration of members of the Board of Directors comprises the following components:

• base monthly remuneration derived from an individual agreement between the member of the Board of Directors and the Company
• variable remuneration components typically range from 50% to 100% of the total annual remuneration; specific conditions and amounts are set individually in the Board Membership Contracts approved by the sole shareholder; conditions for the award of a variable component stem from criteria established by the Company’s sole shareholder in cooperation with the Company’s Supervisory Board; specific payments hinge on compliance with set targets and the fulfilment of the Company’s economic results.

Other benefits of members of the Board of Directors are regulated either directly in the Board Membership Contract (e.g. compensation for non-use of company cars) or by an internal Company regulation granting members of the Board of Directors generally the same scope of benefits as Company employees.

Members of the Supervisory Board are entitled to regular fixed monthly remuneration derived from their Board Membership Contract approved in advance by the sole shareholder (the General Meeting). The amount is paid monthly, by the 15th day of the calendar month following the month in which the board member’s claim arose.

Should a member of one of the Company’s governing bodies hold office only for part of the calendar month (e.g. in cases where he ceases to be a member of a Company body), he is entitled to remuneration on a pro rata basis.

Members of governing bodies who are concurrently employees of the Company receive remuneration pursuant to principles stipulated universally for the entire Company in the form of the Pay Rules and the Social Programme, which is an integral part of the Collective Agreement.

In total, members of the Board of Directors drew healthcare contributions in an aggregate amount of CZK 48,000; members of the Supervisory Board did not draw on these contributions.

None of the members of the Board of Directors or the Supervisory Board used an executive car.

Remuneration Principles for Other Employees

Base Pay
Employees’ base pay is governed by the Pay Rules and rules defined by the Collective Agreement. The specific base pay amount for executive positions is stipulated individually in each executive’s contract, or by a pay assessment, and is in line with standard practice in the Czech market.

Bonus and Other Variable Pay Components
Variable remuneration at Česká pojišťovna follows the guidelines on remuneration for individual departments. The rules in those guidelines are updated regularly. Employees who have not been set a variable component of remuneration may be granted a special bonus under the Collective Agreement. All employees are set targets in financial, business/functional and development areas.

Where employees have a bonus component incorporated into their pay, rules for the granting of the bonus are approved by the Company management in the directive entitled “Pay Regulation for the Payment of Bonuses to Česká pojišťovna Employees”. The bonus base for employees depends on the importance of their job and its impact on the Company’s earnings (the base pay multiple varies from a multiple of three to twelve).

The final evaluation of targets and the subsequent payment of bonuses take place in accordance with the process described in the above directive at the end of the year. An employee’s specific bonus amount is subject to approval by the member of the Board of Directors responsible for the area concerned. The payment of senior employees’ bonuses is conditional on the resulting performance of selected economic indicators.

Other Benefits
All Company employees, including executives, are entitled to a CZK 333 per month life insurance contribution under the Social Programme, as provided for in the Collective Agreement. At the same time, they have the option to receive a pension plan contribution of CZK 300–1,500 per month, according to rules stipulated in the Collective Agreement. Employees may also take part in health-focused activities under the WE FIT programme, including vaccinations, health days, medical examinations, training and sports events.

Persons with Executive Authority

In 2014, the Company recorded no loans or advances extended to members of the Board of Directors or the Supervisory Board.

No member of the Company’s Board of Directors or Supervisory Board is in a conflict of interest due to membership of another company’s governing bodies.

In 2014, the following changes were made to the Company’s bodies:

Board of Directors

• Jaroslav Mlynář ceased to be a member and ceased to hold office within the Board of Directors on 30 September 2014;
• Petr Bohumský, a member of the Board of Directors, was appointed as the Vice-Chairman of the Board of Directors on 1 October 2014.

Supervisory Board

• Irena Špatenková ceased to be a member of the Supervisory Board on 30 June 2014;
• Marco Maffioli ceased to be a member of the Supervisory Board on 31 July 2014;
• Gianluca Colocci was appointed as a member of the Supervisory Board on 1 August 2014;
• Gregor Pilgram was appointed as a member of the Supervisory Board on 1 October 2014.

Principal activities of members of the Board of Directors and Supervisory Board in other companies, to the extent they are material for the Company, in 2014:

• Luciano Cirinà: member of the governing body of Generali PPF Holding B.V., Netherlands, head of the organisational unit Generali PPF Holding, B.V, organizační složka, having its registered office in Prague, Chairman of the Supervisory Board of Generali Bulgaria Holding EAD, Bulgaria, member of the Supervisory Board of Generali Insurance AD and Generali Life Insurance AD, Bulgaria, Chairman of the Supervisory Board of Generali Towarzystwo Ubezpieczeń S.A. and Generali Życie Towarzystwo Ubezpieczeń S.A., Poland, Chairman of the Supervisory Board of Generali Poisťovňa, a.s., Slovakia, member of the Supervisory Board of Generali-Providencia Biztosító Zrt., Hungary, member of the Supervisory Board of SC GENERALI ROMANIA ASIGURARE REASIGURARE SA, Romania, member of the Supervisory Board of Generali Pojišťovna a.s., head of the organisational unit Generali Infrastructure Services Czech Branch, organizační složka, having its registered office in Prague, from 4 December 2014 a member of the Management Board of the Czech Insurers’ Bureau and from 9 October 2014 a member of the Presidium of the Czech Insurance Association;
• Jaroslav Mlynář: Managing Director of Pankrác Services s.r.o. until 30 October 2014, member of the Supervisory Board of Penzijní společnost České pojišťovny, a.s. until 30 October 2014, member of the Supervisory Board of Generali Pojišťovna a.s. until 30 October 2014, Chairman of the Supervisory Board of ČP DIRECT, a.s. until 30 October 2014 and of Generali PPF Services a.s. until 31 October 2014, member of the Management Board of the Czech Insurers’ Bureau, member of the Presidium of the Czech Insurance Association;
• Marie Kovářová: member of the governing body of Generali Development s.r.o., Chairwoman of the Board of Directors of Generali PPF Services a.s. member of the Board of Directors of Generali Pojišťovna a.s.;
• Petr Bohumský: member of the governing body of ČP ASISTENCE s.r.o., Vice-Chairman of the Board of Directors of Generali Pojišťovna a.s., member of the Supervisory Board of Generali PPF Services a.s. and of the Supervisory Board of Česká pojišťovna ZDRAVÍ a.s., member of the Board of Directors of ČP INVEST Realitní uzavřený investiční fond a.s. until 30 September 2014, member of the Supervisory Board of Generali Zavarovalnica d.d. Ljubljana, Slovenia, until 6 March 2014;
• Štefan Tillinger: member of the Supervisory Board of the Generali Insurance Company Foundation, Penzijní společnost České pojišťovny, a.s., Chairman of the Board of Directors of Generali Pojišťovna a.s., member of the Supervisory Board of ČP DIRECT, a.s., member of the Board of Directors of Česká pojišťovna ZDRAVÍ a.s., member of the Presidium of the Czech Insurance Association;
• Marco Maffioli: member of the Supervisory Board of Penzijní společnost České pojišťovny, a.s. until 30 June 2014, Generali Pojišťovna a.s. until 31 July 2014, Generali PPF Asset Management a.s. until 31 May 2014, member of the Supervisory Board of Generali osiguranje dioničko društvo, Croatia, until 31 March 2014, Chairman of the Supervisory Board of Generali Zavarovalnica d.d. Ljubljana, Slovenia, until 6 March 2014, member of the Board of Directors of Akcionarsko društvo za osiguranje GENERALI OSIGURANJE, Serbia, until 16 September 2014;
• Jiří Fialka: member of the Board of Directors of Generali Pojišťovna a.s., Česká pojišťovna ZDRAVÍ a.s. and Penzijní společnost České pojišťovny, a.s.;
• Martin Sturzlbaum: member of the governing body of EUROPAISCHE Reiseversicherung AG and Europe Assistance GmbH, Austria;
• Gianluca Colocci: member of the Supervisory Board of Generali Pojišťovna a.s., Generali PPF Asset Management a.s. untill 31 December 2014 and Penzijní společnost České pojišťovny, a.s., Vice-Chairman of the Supervisory Board of Generali Towarzystwo Ubezpieczeń S.A. and Generali Życie Towarzystwo Ubezpieczeń S.A., Poland, and member of the Supervisory Board of Generali Powszechne Towarzystwo Emerytalne S.A., Poland, Chairman of the Supervisory Board of Generali Finance Sp. Z o.o., Poland;
• Gregor Pilgram: member of the governing body of Generali PPF Holding B.V., Netherlands, member of the Supervisory Board of ČP INVEST investiční společnost a.s. and Chairman of the Supervisory Board of Generali PPF Asset Management a.s., the Supervisory Board of Generali Poisťovňa, a.s., Slovakia, the Supervisory Board of Generali Towarzystwo Ubezpieczeń S.A. and Generali Życie Towarzystwo Ubezpieczeń S.A., Poland, member of the Supervisory Board of Generali-Providencia Biztosító Zrt. and Genertel Biztosító Zrt., Hungary, member of the Board of Directors of Akcionarsko društvo za osiguranje GENERALI OSIGURANJE SRBIJA, Serbia, member of the Supervisory Board of Generali osiguranje dioničko društvo, Croatia, and member of the Supervisory Board of Generali Zavarovalnica d.d., Ljubljana, Slovenia.

No member of the Board of Directors or Supervisory Board has been convicted of any fraud-related crime.

Cash Income of Persons with Executive Authority in 2014

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The Company’s management comprises only the members of the Board of Directors.

Cash income is defined as the sum of all cash income received by the board member for the 2014 accounting period (in particular, board membership remuneration, executive pay, wages, bonuses, income under other contracts and collective endowment life insurance on death or survival).

Cash income received by members of the Company’s governing bodies directly from the Company totalled CZK 74 million. This includes income both from acting as members of the governing body and from acting as Company executives.

In-kind income is defined as the sum of the values of all non-cash (in-kind) income items that the board member received (in particular executive cars, managerial healthcare programme, and benefits under the Collective Agreement).

Entities in which Česká pojišťovna Holds a Participating Interest Exceeding 10% of its Own Net Current Period Earnings

As at 31 December 2014, based on figures available to Česká pojišťovna as at the compilation date of this Annual Report:

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Standalone Report on Company Management

I. Internal Process of Control over Compilation of the Financial Statements

The information set forth below concerns internal control principles and procedures and rules governing the Company’s and the Group’s approach to risks to which the Company and the Česká pojišťovna Group are exposed in relation to the financial reporting process.

Česká pojišťovna has implemented an internal control and management system that minimises the risk of incorrect reporting, which relates to the ability of the internal information system to provide timely and accurate information for purposes of internal decision-making and for the purposes of external reporting.

The basic elements of this system are as follows:

• delegation of authority and responsibility
• internal policies defining terms and procedures for the processing of information
• internal procedures defining checks to verify the accuracy of information
• IT governance system
• accounting manual defining unified information content
• internal audit competence
• external audit of the financial statements by a reputable audit firm

At Group level, responsibility for implementing a commensurate system of internal controls is delegated to individual Group companies. Thus, each company is directly responsible for managing this risk.

A unified accounting manual is used by all Group companies to compile the consolidated financial statements. All material Group companies are audited by the same audit firm as Česká pojišťovna.

Česká pojišťovna systematically works to improve its internal control system in the field of financial reporting; this process has accelerated since the Company and its subsidiaries became part of Generali Group.

II. Compliance with the Code of Corporate Governance

The Code of Corporate Governance is not legally binding on Česká pojišťovna a.s. However, Česká pojišťovna a.s. voluntarily complies with the Czech Insurance Association’s Code of Ethics in Insurance, and the Generali Group Code of Conduct.

The Czech Insurance Association’s Code of Ethics in Insurance can be viewed at www.cap.cz.

The Generali Group Code of Conduct can be viewed at www.ceskapojistovna.cz/eticky-kodex.

III. Description of the Principles and Functioning of Company Bodies

Board of Directors of Česká pojišťovna
The Board of Directors is the governing body responsible for managing the Company’s activities and acting in the Company’s name. The Board of Directors takes decisions on all Company matters that are not reserved by law or the Articles of Association for the General Meeting or the Supervisory Board. Its authority ensues from Czech legislation and the Company’s Articles of Association.

The Board of Directors has six members; as at 31 December 2014, one place was unoccupied. Members of the Board of Directors serve for four-year terms. From among its members, the Board of Directors elects and removes from office one Chairman and up to two Vice-Chairmen.

The Board of Directors’ activities are governed by the activity plan, which the Board of Directors approves for each calendar year in advance. The draft plan, including, in particular, the meetings schedule, is submitted to the Board of Directors by the Chairman, and is prepared by the Company Secretary based on the Chairman’s instructions. The Board of Directors meets as needed, but not less than once every two months. The Board of Directors’ activity plan is amended and clarified as necessary on an on-going basis during the year. If necessary, the Chairman of the Board of Directors can call a meeting of the Board of Directors not specified in the activity plan in order to discuss urgent matters relating to the Company.

The Board of Directors also exercises its authority outside of meetings, in the course of the Company’s day-to-day operations.

The composition of the Board of Directors as at the date the Annual Report was published is set forth on page 17 of this Annual Report.

Proceedings and Methodological Procedure:

1. The Company’s Board of Directors takes decisions as a group in accordance with rules established by legislation and the Articles of Association.
2. In accordance with Section 156 of the Civil Code, the competence of the individual members of the Board of Directors is broken down, by a decision of the Board of Directors, into designated fields. A member of the Board of Directors has the authority to take decisions on behalf of the Board within the scope of the field assigned to him. In negotiations within the bounds of his defined field, he may also use the designation of the office specified in paragraph 4 of this Article together with the designation of his membership of the Board of Directors in internal relations. However, in external relations, he only presents himself as a member of the Board of Directors.
3. The breakdown of the competence of individual members of the Board of Directors into different fields does not absolve other members of the obligation to oversee how the affairs of the legal entity are being managed, nor does it absolve them of the obligation to legally act and sign on behalf of the Company in the manner laid down in the Articles of Association as reflected in the entry in the Commercial Register.
4. The breakdown into fields is as follows:

• Financial management – placed in the competence of the member of the Board of Directors, within the scope of the defined field, who is entitled to use the title of Chief Financial Officer.
•  Life insurance – placed in the competence of the member of the Board of Directors, within the scope of the defined field, who is entitled to use the title of Chief Life Insurance Officer.
•  Operations management – placed in the competence of the member of the Board of Directors, within the scope of the defined field, who is entitled to use the title of Chief Operations and IT Officer.
•  Sales management – placed in the competence of the member of the Board of Directors, within the scope of the defined field, who is entitled to use the title of Chief Sales Officer.

The content of the designated fields is defined by the tasks of employees in the direct line of management of the executive assigned, within the Company’s organisational chart, to the specific field of a member of the Board of Directors.

Česká pojišťovna Supervisory Board
The Supervisory Board of Česká pojišťovna is the Company’s oversight body, which oversees the exercise of the Board of Directors’ authority and the performance of the Company’s business activities. Its authority ensues from Czech legislation and the Company’s Articles of Association. In particular, the Supervisory Board oversees the functionality and effectiveness of the Company’s management and control system, as well as matters related to its strategic direction.

The Supervisory Board of Česká pojišťovna has three members, two of whom are elected and removed from office by the Company’s General Meeting and one of whom is elected by Company employees. Members of the Supervisory Board serve for terms of four years.

The Supervisory Board’s activities are governed by the activity plan, which the Supervisory Board approves for each half-year in advance. Outside of the activity plan, the Supervisory Board discusses such matters as may arise between its meetings, provided that the nature of such issues so requires. Meetings of the Supervisory Board are held as needed, but not fewer than four times per year.

Individual checks, investigations, examinations, and inspections of Company materials, etc., are conducted by members of the Supervisory Board either individually or in groups authorised by the Supervisory Board in a resolution adopted at a Supervisory Board meeting or as separately authorised by the Chairman outside of a Supervisory Board meeting. Afterwards, at the immediately following Supervisory Board meeting, the Supervisory Board is informed of the activities conducted by individual members or groups authorised by the Supervisory Board and of the results thereof. Should any serious findings or circumstances arise from the supervisory activities, the Chairman of the Supervisory Board is informed of such on an on-going basis, even between Supervisory Board meetings.

The composition of the Supervisory Board as at the date the Annual Report was published is set forth on page 19 of this Annual Report.

Management Committee
The Management Committee is an advisory body to the Board of Directors. Its members are members of the Board of Directors and other persons appointed by the Chairman of the Board of Directors. Management Committee members are appointed and removed by the Chairman of the Board of Directors. The rules on the convening and meetings of the Board of Directors apply mutatis mutandis to the convening and meetings of the Management Committee. The Management Committee may, on the instructions of the Board of Directors, coordinate the Company and the companies it manages in the Czech Republic in accordance with the Generali Group’s holding policy.

Česká pojišťovna Audit Committee
The Česká pojišťovna Audit Committee is a Company body that, in particular, supervises, monitors, and reports on the quality, integrity, efficiency, and effectiveness of existing processes and tools of internal control, financial reporting, and risk management, as well as on the compliance of the Company’s operations with the laws and other binding regulations of the Czech Republic. The Česká pojišťovna Audit Committee also influences the appointment/removal, appraisal and remuneration of the Director of the Internal Audit Department.

The Audit Committee consists of three members appointed by the General Meeting based on their expertise and qualifications for carrying out their responsibilities of office.

The authority of the Audit Committee ensues from the laws of the Czech Republic and the internal directives of Česká pojišťovna. The Committee reports to the General Meeting and, in certain areas, also operates as an advisory body to the Board of Directors. Its decisions constitute recommendations to the Board of Directors, which bears final responsibility for the Company’s system of internal controls, the proper conducting of internal checks, and the risk management system. The Audit Committee also regularly informs the Supervisory Board of the results of its activities.

The Audit Committee meets at least twice per year, and the Chairman of the Česká pojišťovna Board of Directors, the Česká pojišťovna Chief Executive Officer, the Česká pojišťovna Internal Audit Director, and where appropriate the external auditor have standing invitations to attend the meetings as guests. In addition, line managers and other Company employees may be invited to meetings as necessary to provide the Committee with information. Their participation, however, is limited only to the relevant agenda item(s).

General Meeting
The following matters are in the competence of the General Meeting:

• decisions on an amendment to the Articles of Association, except where an amendment is made as a result of an increase in the share capital by the authorised Board of Directors or where an amendment is made pursuant to other legal circumstances;
• the issuance of instructions to the Board of Directors and the approval of principles relating to the activities of the Board of Directors, if not in conflict with legislation;
• decisions on the leasing of a Company establishment or any part thereof;
• discussions on the report on the Company’s business activities and assets;
• decisions on an amendment to the amount of share capital and on the authorisation of the Board of Directors to increase the share capital;
• decisions on the possibility of setting off a financial receivable from the Company against a receivable in respect of the payment of the issue price;
• decisions on the issue of convertible or preference bonds;
• the election and removal of members of the Board of Directors or the statutory director;
• the election and removal of members of the Supervisory Board and other bodies appointed by the Articles of Association, except for members of the Supervisory Board not elected by the General Meeting;
• approval of the ordinary, extraordinary, consolidated and, where other legislation so provides, interim financial statements;
• decisions on the distribution of profit or other own resources or on loss coverage;
• decisions on applications for the admission of the Company’s participating securities to trading on a European regulated market or on their removal from trading on a European regulated market;
• decisions on the dissolution of the Company with liquidation of assets;
• approval of the proposal for the distribution of the liquidation surplus;
• approval of the transfer or mortgaging of an establishment or part thereof entailing a significant change in the existing structure of the establishment or a significant change in the objects of business or activity of the Company;
• decisions to accept the effects of actions taken on behalf of the Company prior to the incorporation thereof;
• the approval of a silent partnership agreement, including approval of amendments thereto or the cancellation thereof;
• other decisions included in the competence of the General Meeting by the Business Corporations Act or the Articles of Association.

The Company’s Annual General Meeting is held at least once per year, no later than six months from the last day of the accounting period. The Board of Directors is entitled to convene an Extraordinary General Meeting at any time. The Supervisory Board convenes the General Meeting whenever it is in the Company’s interests to do so.

The General Meeting has a quorum if shareholders are present, the aggregate nominal value of whose shares is at least fifty per cent (50%) of the Company’s share capital.

After verifying the quorum, the General Meeting elects its chairman, clerk, two verifiers of the minutes, and persons authorised to count votes. The persons elected by the General Meeting to these offices may or may not be shareholders. Until the chairman is elected, the General Meeting is chaired by a member of the Board of Directors authorised to do so by the Board of Directors. If the General Meeting has been convened by the Supervisory Board, until election of the chairman it is chaired by a person authorised to do so by the Supervisory Board. If the General Meeting has been convened on the basis of a court order and the court has not designated a General Meeting chairman, it may be chaired by any shareholder until such time as the General Meeting elects a chairman.

Should a shareholder at the General Meeting make a motion in a matter that is to be discussed in the agenda set for the General Meeting in question (an “original motion”), an entirely new motion of the shareholder’s own (a “new motion”) or a motion revising or otherwise amending an original motion (a “countermotion”), he is required – in the case of countermotions to motions the content of which is set forth in the invitation to the General Meeting or in the General Meeting announcement, or in the event that a notarial record must be made of the General Meeting’s decision – to deliver his motion or countermotion in writing to the Company at least five working days prior to the date of the General Meeting. This rule does not apply to motions for election of specific persons to Company bodies.

The Board of Directors is required to publish its countermotion along with its opinion, if possible, at least three days prior to the date announced for the General Meeting.

Should a shareholder wish to make a new motion or countermotion during the General Meeting, he must submit it to the General Meeting chairman.

The chairman of the General Meeting:

1. examines new motions and countermotions submitted (shareholder countermotions submitted to the Company prior to the General Meeting are also deemed to be new motions and countermotions) without unnecessary delay;
2. acquaints the General Meeting with their contents;
3. notifies the General Meeting of the General Meeting agenda item under which a vote will be taken on the new motion or countermotion submitted, or that the new motion or countermotion submitted has been rejected because it does not relate to any item on the General Meeting agenda and for this reason no vote can be held on it, unless all shareholders are present and all shareholders agree with the decision on the submitted new motion or countermotion;
4. enables shareholders and members of the Company’s Board of Directors and Supervisory Board to acquaint themselves with such new motion or countermotion and express opinions thereon prior to a vote;
5. should the new motion or countermotion not be rejected on the grounds that it does not relate to any item on the General Meeting agenda, holds a vote on the motion – in all cases, the General Meeting shall vote in the following order:

a. first on the original motion;

b. if the original motion is not passed, then on countermotions, if any, in the order in which said countermotions were submitted to the General Meeting chairman, and then on the original motion as a whole, as amended by the approved countermotions;

c. if the original motion is not passed even after being amended by approved countermotions, then and only then on any new motions (in the order in which they were submitted to the General Meeting chairman).

Voting at the General Meeting takes place by ballot.

Should a quorum not be present at the General Meeting within one (1) hour of the time set forth in the invitation as the beginning of the General Meeting, the convener shall convene a substitute General Meeting under the conditions and in the manner set forth in the Business Corporations Act.

Česká pojišťovna currently has a sole shareholder, who wields the authority of the General Meeting in accordance with the Business Corporations Act and the relevant procedures above.