Best Practice for GPW 2021

Pursuant to Article 29.3 of the Rules of the Warsaw Stock Exchange, Vivid Games S. A. presents information on Best Practice 2021 compliance.

EBI report was published in Polish version. 

Below is the translation. In case of doubt, the Polish language version is the leading one. 

DISCLOSURE POLICY, INVESTOR COMMUNICATIONS

1.1. Companies maintain efficient communications with capital market participants and provide fair information about matters that concern them. For that purpose, companies use diverse tools and forms of communication, including in particular the corporate website where they publish all information relevant for investors.
The principle is applied.

1.2. Companies make available their financial results compiled in periodic reports as soon as possible after the end of each reporting period; should that not be feasible for substantial reasons, companies publish at least preliminary financial estimates as soon as possible.
The principle is applied.
Comments of the Company on the mode of application of the principle.
In recent years, the company has published periodic reports on the last days of the foreseen deadlines by law. However, meeting the expectations of stakeholders, from 2020 it publishes preliminary estimates financial results for the next months by the middle of the next month.

1.3. Companies integrate ESG factors in their business strategy, including in particular:

1.3.1. environmental factors, including measures and risks relating to climate change and sustainable development;
The Company does not apply this principle.
The currently implemented business strategy does not take into account the ESG areas. When developing a new strategy planned for the turn of 2021 and 2022, the Company will take into account the subject of ESG.

1.3.2. social and employee factors, including among others actions taken and planned to ensure equal treatment of women and men, decent working conditions, respect for employees’ rights, dialogue with local communities, customer relations.
The Company does not apply this principle.
The currently implemented business strategy does not take into account the ESG areas. When developing a new strategy planned for the turn of 2021 and 2022, the Company will take into account the subject of ESG.

1.4. To ensure quality communications with stakeholders, as a part of the business strategy, companies publish on their website information concerning the framework of the strategy, measurable goals, including in particular long-term goals, planned activities and their status, defined by measures, both financial and non-financial. ESG information concerning the strategy should among others:
The Company does not apply this principle.
The currently implemented business strategy does not take into account the ESG areas. When developing a new strategy planned for the turn of 2021 and 2022, the Company will take into account the ESG topic and will place it on its website information on long-term goals, planned activities, and progress in implementing the strategy as well as appropriate financial and non-financial indicators and measures.

1.4.1. explain how the decision-making processes of the company and its group members integrate climate change, including the resulting risks;
The Company does not apply this principle.
The currently implemented business strategy does not take into account the ESG areas. When developing a new strategy planned for the turn of 2021 and 2022, the Company will take into account the issues of ESG, including issues related to climate change.

1.4.2. present the equal pay index for employees, defined as the percentage difference between the average monthly pay (including bonuses, awards and other benefits) of women and men in the last year, and present information about actions taken to eliminate any pay gaps, including a presentation of related risks and the time horizon of the equality target.
The Company does not apply this principle.
The currently implemented business strategy does not take into account the ESG areas. When developing a new strategy planned for the turn of 2021 and 2022, the Company will take into account the issues of ESG, and will focus on the issue of equal remuneration of the Company's employees, and will take steps to eliminate possible inequalities.

1.5. Companies disclose at least on an annual basis the amounts expensed by the company and its group in support of culture, sports, charities, the media, social organisations, trade unions, etc. If the company or its group pay such expenses in the reporting year, the disclosure presents a list of such expenses.
The principle is applied.
Comments of the Company on the mode of application of the principle.
If in the year covered by the report, the company or its group incurs expenses for such purposes, information containing a list of these expenses will be published together with the report for a given financial year

1.6. Companies participating in the WIG20, mWIG40 or sWIG80 index hold on a quarterly basis and other companies hold at least on an annual basis a meeting with investors to which they invite in particular shareholders, analysts, industry experts and the media. At such meetings, the management board of the company presents and comments on the strategy and its implementation, the financial results of the company and its group, and the key events impacting the business of the company and its group, their results and outlook. At such meetings, the management board of the company publicly provides answers and explanations to questions raised.
The principle is applied.

1.7. If an investor requests any information about a company, the company replies immediately and in any case no later than within 14 days.
The principle is applied.

MANAGEMENT BOARD, SUPERVISORY BOARD

2.1. Companies should have in place a diversity policy applicable to the management board and the supervisory board, approved by the supervisory board and the general meeting, respectively. The diversity policy defines diversity goals and criteria, among others including gender, education, expertise, age, professional experience, and specifies the target dates and the monitoring systems for such goals. With regard to gender diversity of corporate bodies, the participation of the minority group in each body should be at least 30%.
The Company does not apply this principle.
The participation of women and men in the performance of management and supervisory functions in the structures of the Company depends on their competencies, skills, and efficiency. Decisions regarding appointment to management or supervisory positions are not dictated by gender. The company, therefore, cannot ensure gender diversity of these bodies and does not have a policy diversity.

2.2. Decisions to elect members of the management board or the supervisory board of companies should ensure that the composition of those bodies is diverse by appointing persons ensuring diversity, among others in order to achieve the target minimum participation of the minority group of at least 30% according to the goals of the established diversity policy referred to in principle 2.1.
The Company does not apply this principle.
The participation of women and men in the performance of management and supervisory functions in the structures of the Company depends on their competencies, skills, and efficiency. Decisions regarding appointment to management or supervisory positions are not dictated by gender. The company, therefore, cannot ensure gender diversity of these bodies and does not have a policy diversity.

2.3. At least two members of the supervisory board meet the criteria of being independent referred to in the Act of 11 May 2017 on Auditors, Audit Firms and Public Supervision, and have no actual and material relations with any shareholder who holds at least 5% of the total vote in the company.
The principle is applied.

2.4. The supervisory board and the management board vote in an open ballot unless otherwise required by law.
The principle is applied.

2.5. Members of the supervisory board and members of the management board who vote against a resolution may have their dissenting vote recorded in the minutes.
The principle is applied.

2.6. Functions on the management board of a company are the main area of the professional activity of management board members. Management board members should not engage in additional professional activities if the time devoted to such activities prevents their proper performance in the company.
The principle is applied.

2.7. A company’s management board members may sit on corporate bodies of companies other than members of its group subject to the approval of the supervisory board.
The Company does not apply this principle.
The Remuneration Policy included the following: "Agreements concluded with members of the Management Board contain provisions prohibiting members of the Management Board, without the prior consent of the Supervisory Board, from undertaking activities outside the Company, if a. the size of such activity will make it impossible to perform the duties of a member of the Management Board; b. such activity is contrary to property interests of the Company; c. such activity raises legitimate concerns about a potential conflict of interest between the obligations towards the Company and the rights and obligations resulting from such activities. ". The company did not introduce the absolute requirement for the Supervisory Board to grant consent to perform functions in bodies of entities outside the group.

2.8. Supervisory board members should be able to devote the time necessary to perform their duties.
The principle is applied.

2.9. The chair of the supervisory board should not combine this function with that of chair of the audit committee of the supervisory board.
The principle is applied.

2.10. Companies allocate administrative and financial resources necessary to ensure efficient functioning of the supervisory board in a manner adequate to their size and financial standing.
The principle is applied.

2.11. In addition to its responsibilities laid down in the legislation, the supervisory board prepares and presents an annual report to the annual general meeting once per year. Such report includes at least the following:

2.11.1. information about the members of the supervisory board and its committees, including indication of those supervisory board members who fulfil the criteria of being independent referred to in the Act of 11 May 2017 on Auditors, Audit Firms and Public Supervision and those supervisory board members who have no actual and material relations with any shareholder who holds at least 5% of the total vote in the company, and information about the members of the supervisory board in the context of diversity;
The Company does not apply this principle.
The Supervisory Board's report for 2020 includes information on the composition of the board and its committees with an indication of which of the board members meet the independence criteria specified in the Act of 11 May 2017 on Auditors, Audit Firms and Public Supervision, as well information on the composition of the supervisory board in terms of its diversity. However, it was not taken into account information which among the members of the Supervisory Board of the Company have no real and significant connections with a shareholder holding at least 5% of the total number of votes in the company. In the report of the Supervisory Board for 2021, all of the above information will be taken into account.

2.11.2. summary of the activity of the supervisory board and its committees;
The principle is applied.

2.11.3. assessment of the company’s standing on a consolidated basis, including assessment of the internal control, risk management and compliance systems and the internal audit function, and information about measures taken by the supervisory board to perform such assessment; such assessment should cover all significant controls, in particular reporting and operational controls;
The principle is applied.

2.11.4. assessment of the company’s compliance with the corporate governance principles and the manner of compliance with the disclosure obligations concerning compliance with the corporate governance principles defined in the Exchange Rules and the regulations on current and periodic reports published by issuers of securities, and information about measures taken by the supervisory board to perform such assessment;
The principle is applied.

2.11.5. assessment of the rationality of expenses referred to in principle 1.5;
The principle is applied.

2.11.6. information regarding the degree of implementation of the diversity policy applicable to the management board and the supervisory board, including the achievement of goals referred to in principle 2.1.
The principle is applied.

INTERNAL SYSTEMS AND FUNCTIONS

3.1. Listed companies maintain efficient internal control, risk management and compliance systems and an efficient internal audit function adequate to the size of the company and the type and scale of its activity; the management board is responsible for their functioning.
The principle is applied.

3.2. Companies’ organisation includes units responsible for the tasks of individual systems and functions unless it is not reasonable due to the size of the company or the type of its activity.
The principle is applied.

3.3. Companies participating in the WIG20, mWIG40 or sWIG80 index appoint an internal auditor to head the internal audit function in compliance with generally accepted international standards for the professional practice of internal auditing. In other companies which do not appoint an internal auditor who meets such requirements, the audit committee (or the supervisory board if it performs the functions of the audit committee) assesses on an annual basis whether such person should be appointed.
The Company does not apply this principle.
In the Audit Committee's report for 2021, the Committee will assess whether there is a need to establish an internal auditor meeting the above-mentioned requirements.

3.4. The remuneration of persons responsible for risk and compliance management and of the head of internal audit should depend on the performance of delegated tasks rather than short-term results of the company.
The principle is applied.

3.5. Persons responsible for risk and compliance management report directly to the president or other member of the management board.
The principle is applied.

3.6. The head of internal audit reports organisationally to the president of the management board and functionally to the chair of the audit committee or the chair of the supervisory board if the supervisory board performs the functions of the audit committee.
The principle is applied.
Comments of the Company on the mode of application of the principle.
Currently, there is no person designated to manage internal audit in the Company, if appointed reporting will be defined as above.

3.7. Principles 3.4 to 3.6 apply also to members of the company’s group which are material to its activity if they appoint persons to perform such tasks.
COM_SDEBI_ZASADA_MNIE_NIE_DOTYCZY.
Apart from the parent company, there is currently one company in the capital group that has not started operating activities and is not significant for the operating activities of the Issuer.

3.8. The person responsible for internal audit or the management board if such function is not performed separately in the company reports to the supervisory board at least once per year with their assessment of the efficiency of the systems and functions referred to in principle 3.1 and tables a relevant report.
The Company does not apply this principle.
So far, such an assessment has not been part of the annual Management Board Report, but starting from Reports for 2021 The Management Board will present the Supervisory Board with an assessment of the effectiveness of the systems and functions, referred to in principle 3.1. Such an assessment will be included in the annual report of the Management Board on the activities of the Company.

3.9. The supervisory board monitors the efficiency of the systems and functions referred to in principle 3.1 among others on the basis of reports provided periodically by the persons responsible for the functions and the company’s management board, and makes annual assessment of the efficiency of such systems and functions according to principle 2.11.3. Where the company has an audit committee, the audit committee monitors the efficiency of the systems and functions referred to in principle 3.1, which however does not release the supervisory board from the annual assessment of the efficiency of such systems and functions.
The principle is applied.

3.10. Companies participating in the WIG20, mWIG40 or sWIG80 index have the internal audit function reviewed at least once every five years by an independent auditor appointed with the participation of the audit committee.
COM_SDEBI_ZASADA_MNIE_NIE_DOTYCZY.
The Company does not participate in the above indexes.

GENERAL MEETING, SHAREHOLDER RELATIONS

4.1. Companies should enable their shareholders to participate in a general meeting by means of electronic communication (e-meeting) if justified by the expectations of shareholders notified to the company, provided that the company is in a position to provide the technical infrastructure necessary for such general meeting to proceed.
The principle is applied.
Comments of the Company on the mode of application of the principle.
So far, the Company has not received any reports from shareholders as to the manner of organizing participation in the General Meeting of Shareholders at the use of electronic means of communication (e-meeting). However, if the shareholders declare such a will, the Company will take its efforts to enable shareholders to participate, starting from the next GSM, by means of communication electronics (e-meeting).

4.2. Companies set the place and date and the form of a general meeting so as to enable the participation of the highest possible number of shareholders. For that purpose, companies strive to ensure that the cancellation of a general meeting, change of its date or break in its proceedings take place only if justified and do not prevent or limit the exercising of the shareholders’ rights to participate in the general meeting.
The principle is applied.

4.3. Companies provide a public real-life broadcast of the general meeting.
The Company does not apply this principle.
So far, the interest of minority shareholders in participation in the General Meeting of Shareholders of the Company has been negligible. Only the main shareholders participated in the last GSM. If the Company receives signals or requests from minority shareholders The Company will take steps to ensure publicly available broadcasts of the General Meeting of Shareholders real-time.

4.4. Presence of representatives of the media is allowed at general meetings.
The principle is applied.

4.5. If the management board becomes aware a general meeting being convened pursuant to Article 399 § 2 – 4 of the Commercial Companies Code, the management board immediately takes steps which it is required to take in order to organise and conduct the general meeting. The foregoing applies also where a general meeting is convened under authority granted by the registration court according to Article 400 § 3 of the Commercial Companies Code.
The principle is applied.

4.6. To help shareholders participating in a general meeting to vote on resolutions with adequate understanding, draft resolutions of the general meeting concerning matters and decisions other than points of order should contain a justification, unless it follows from documentation tabled to the general meeting. If a matter is put on the agenda of the general meeting at the request of a shareholder or shareholders, the management board requests presentation of the justification of the proposed resolution, unless previously presented by such shareholder or shareholders.