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Komercni Banka (KMCA)

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Friday 16 May, 2003

Komercni Banka

Notice of AGM 1/2

Komercni Banka
16 May 2003


Komercni banka, a.s. http://www.kb.cz/en
Prague 1, Na Prikope 33, building identification number 969, Post Code 114 07
Identification No.: 45 31 70 54
incorporated in the Commercial Register maintained with the Municipal Court in
Prague, section B, insert 1360


                      Announcement of the General Meeting

           The Board of Directors of Komercni banka, a. s., convenes

                            REGULAR GENERAL MEETING

                           of Komercni banka, a. s.,

with its registered office at Prague 1, Na Prikope 33, building identification
No. 969, postcode 114 07, identification No. 45317054, incorporated in the
Register of Companies maintained with the Municipal Court of Prague, Section B,
File No. 1360 (hereinafter only the 'Bank')



that will be held on 19 June 2003, from 10.00 o'clock at the Congress Hall of
the Ambassador Hotel, Wenceslas Square 5 - 7, Prague 1.



Agenda:

1. Opening

2. Approval of the rules of procedure and voting rules of the general meeting,
election of the general meeting chairman, minutes clerk, minutes verifiers and
scrutineers

3. Approval of the report prepared by the Board of Directors on business
activities of the Bank and on the state of its assets and liabilities in 2002

4. Discussion of the regular financial statements with the proposal for the
distribution of profit for the year 2002, and of the consolidated financial
statements for the year 2002

5. Position of the Supervisory Board on the regular financial statements, on the
proposal for the distribution of profit for the year 2002, and on the
consolidated financial statements for the year 2002; report by the Supervisory
Board on the results of its supervisory activity; and position of the
Supervisory Board on the report by the Board of Directors on relations between
the supervised and the supervisor in accordance with section 66a subsection 9 of
Commercial Code No. 513/1991 Coll., as amended

6. Approval of the regular financial statements for the year 2002

7. Decision on the distribution of profit for the year 2002

8. Approval of the consolidated financial statements for the year 2002

9. Decision on amendments to the Articles of Association

10. Decision on remuneration of the members of the bodies of the Bank

11. Conclusion



The essence of the proposed amendments to the Articles of Association submitted
to the general meeting consists in the modification that stems particularly from
the new provision of the CNB No. 12 that is dated 11 December 2002 and that
deals with the internal management and control system of the bank, and from a
Regulation of the Securities Commission that is dated 24 October 2002 and that
specifies to a greater detail the organisation rules of the securities dealer's
internal operations. These prescriptions called forth modifications of or
amendments to the provisions of the Articles of Association stated in sections
12, 16, 17, 19, 43, and 44.



Moreover, it is proposed to extend the business activities of the bank performed
for its subsidiaries so as to make the activities carried out within the
framework of the financial group more effective. Section 5 Subsection 4
specifies the cases in which a shareholder cannot attend the general meeting
pursuant to the Banking Act. Section 6 Subsection 6 contains a newly inserted
provision stipulating the necessity of submitting the account statement of a
security's holder upon the dividend payment. The issuance of bonds mentioned in
Section 8 Paragraph g) and in Section 19 Subsection 1 Paragraph m) has become a
part of the powers of the Board of Directors; an exception is the issue of
priority and convertible bonds that is within the range of powers of the general
meeting. The provision of Section 19 Subsection 1 Paragraph d) dealing with the
necessity of submitting to the general meeting special information on the
principles of the annual plan of the bank has been excluded from the range of
powers of the Board of Directors. The change pertaining to the structure and
organisation of the bank mentioned in Section 40 has been made with respect to
the bank's necessity of having a flexible organisational structure. Section 41
redefines the term 'bank executive officers' in accordance with the Banking Act
by specifying its application only to the managers that are subordinated to the
chief executive officer and to his deputy.



Proposed amendments to the Articles of Association will be available for
shareholders' inspection in the head office of Komercni banka, a. s., from 19
May 2003, on business days from 8.00 to 16.00 o'clock, and at the Internet
address www.kb.cz. Every shareholder has the right to ask to be sent a copy of
the draft Articles of Association at his/her cost and danger.



Komercni banka, a. s., hereby informs its shareholders that if they wish to
lodge counterproposals to proposed amendments to the Articles of Association at
the general meeting, they are obligated - subject to Section 180, subsection 5
of the Commercial Code - to deliver their proposals or counterproposals in
writing to the head office of Komercni banka, a. s., no later than 5 business
days prior to the general meeting date.



The regular financial statements, consolidated financial statements, and the
report by the Board of Directors on relations between the supervising and the
supervised in accordance with Section 66a Subsection 9, Commercial Code No. 513/
1991 Coll., unabridged, will be available for inspection in the head office of
Komercni banka, a. s., from 19 May 2003, on business days from 8.00 to 16.00
o'clock.


Decisive day:

The decisive day for the participation at the general meeting is 12 June 2003.



Registration of shareholders:

Shareholders will be registered from 9 o'clock in the place of holding the
general meeting. Upon the registration, shareholders - natural persons shall
prove their identity by a valid proof of identity. In the case of empowerment,
the empowered person shall present a valid proof of identity and the original or
an officially attested copy of the power of attorney.

If a shareholder is a legal person, upon the registration the person acting in
the legal person's name in accordance with the extract from the Register of
Companies or other register shall present a valid proof of identity and the
original or officially attested copy of the valid extract from the Register of
Companies, or from other register stipulated by law, or the original or an
officially attested copy of the shareholder's - legal person's resolution
certifying the authority to act in such person's name. The shareholder's
representative shall also present, jointly with the original or officially
attested copy of the valid extract from the Register of Companies or other
register, the original or officially attested copy of the principal's written
power of attorney or other document certifying his or her right to act for the
company, and he or she shall present a valid proof of identity.



The report on relations between the supervising and the supervised shows that
Komercni banka, a. s., did not suffer any harm in the accounting period between
1 January 2002 and 31 December 2002 in relation with agreements and contracts
made between the supervising and the supervised in 2002. No legal acts in the
interest of or initiated by the two were made between the supervised and the
supervising and no measures in the interest of or initiated by the supervised or
the supervising which would make Komercni banka, a. s., suffer harm, gain profit
or advantage, or be disadvantaged were taken or made by the supervised during
this accounting period.


Main figures of the regular financial statements for the year 2002

CZK million                                                                                IFRS                    CAS

Net profit                                                                                8 763                   9 229

Total assets                                                                            439 753                 445 982

Amounts due from customers                                                              121 154                 163 806

Amounts owed to customers                                                               341 114                 305 788

Share capital                                                                            19 005                  19 005


Main figures of the consolidated financial statements for the year 2002

CZK million                                                                 IFRS

Net profit                                                                 9 026

Total assets                                                             446 092

Loans to customers - net                                                 122 978

Amounts due to customers                                                 341 708

Share capital                                                            19 005



                                     Board of Directors of Komercni banka, a. s.


Enclosure - proposal of the articles of association:

                            Articles of Association

                            OF KOMERCNI BANKA, a. s.

                  for the General Meeting held on 19 June 2003

                                   Article I

                             Fundamental Provisions


                                   Section 1

                        Trade Name and Registered Office


(1) The trade name of the company shall be 'Komercni banka, a. s.' (hereinafter
referred to as 'the Bank').


(2) The trade name of the Bank shall not be translated into foreign languages.


(3) The registered office of the Bank shall be at Prague 1, Na Prikope 33,
building identification number 969, post code 114 07.


(4) The Bank has been incorporated in the Commercial Register maintained with
the Municipal Court in Prague, Section B, Entry 1360.


(5) The Bank has been established for an indefinite period of time.


                                   Article II

                        Business Activities of the Bank

                                   Section 2


(1) The Bank shall carry on business pursuant to Act No. 21/1992 Coll., the
Banking Act, as amended (hereinafter referred to as 'the Banking Act'). The
business activities of the Bank shall include:

a) acceptance of deposits from the public;

b) granting of loans;

c) investing in securities on the Bank's own account;

d) financial leasing;

e) making and receiving payments and administration of clearing system;

f) issue and administration of payment instruments, such as payment cards and
traveller's cheques;

g) provision of guarantees;

h) issue of letters of credit;

i) provision of collection services;

j) provision of investment services

k) dealing on the Bank's own account or on the client's account in:

foreign currencies and gold;

l) financial brokerage;

m) foreign exchange operations (foreign exchange purchase);

n) provision of depository services;

o) provision of banking information;

p) rental of safe-deposit boxes;

q) issue of mortgage bonds,

r) activities directly related to those mentioned in paragraphs a) - q).



(2) The Bank shall further carry on business activities for business enterprises
that provide supporting banking services and for financial institutions that are
controlled by the Bank. The extent of the business activities shall cover:

a) accounting consultants' activities, book-keeping,

b) procurement of deals,

c) road transportation

d) engineering activities in investment production,

e) administration and maintenance of real property,

f) organisation of specialised courses, training, and other educational programs
including teaching,

g) business, financial, organisational, and economic consultants'activity

h) data processing, databank services, web administration.


                                  Article III

                         Registered Capital of the Bank

                                   Section 3

The registered capital of the Bank shall be CZK 19,004,926,000.


                                   Article IV

                                     Shares


                                   Section 4

                             Fundamental Provisions



The Bank's registered capital specified under Section 3 shall be divided into
38,009,852 listed (quoted) ordinary bearer shares, each of a nominal value of
CZK 500. All the Bank's shares shall be uncertificated.


                                   Article V

                     Rights and Obligations of Shareholders

                                   Section 5



(1) Both legal persons (legal entities) and natural persons (individuals) may
become shareholders of the Bank.



(2) Any shareholder is entitled to attend the General Meeting and to vote
thereat, to request and receive explanation regarding matters concerning the
Bank, if such explanation is necessary for the assessment of the subject on the
agenda of the General Meeting, and to file proposals and counter-proposals. A
shareholder present at the General Meeting shall have the right to the aforesaid
explanation also concerning matters regarding entities controlled by the Bank.
Should a shareholder intend to file at the General Meeting counter-proposals
relating to proposals, the contents of which have been specified in the
notification of the General Meeting, or in the case that the resolution of the
General Meeting must be recorded in a notarial record, then the shareholder
shall be obliged to deliver their proposal or counter-proposal in writing to the
Bank at least five working days prior to the date of the General Meeting. The
above shall not apply provided that the proposals regard the election of
specific persons to the bodies of the Company. The Board of Directors shall be
obliged to make public the shareholder's counter-proposal and the Board's
opinion thereon in the same manner as used for convening the General Meeting,
and to do so at least three days prior to the date of the General Meeting, if
possible.



(3) The shareholders shall be entitled to exercise their rights at the General
Meeting either in person or through a natural or legal person (a proxy) under
the terms and conditions specified by law (hereinafter referred to as 'the
Attending Shareholder'). Members of the Bank's Board of Directors or Supervisory
Board may not stand proxy for the shareholders. When being registered as present
at the General Meeting, the shareholders shall provide evidence of their
identity by means of an identity document. When being registered as present at
the General Meeting, a proxy shall provide evidence of their identity by means
of an identity document and shall submit a written power of attorney, unless the
law provides otherwise. In addition, a proxy that is a legal entity shall submit
an updated excerpt from the Commercial Register or another document evidencing
their right to act on behalf of the company concerned. When being registered as
present at the General Meeting, the heir of a shareholder shall submit an
official document confirming their rights.



(4) The General Meeting may be attended by any shareholder registered in the
statutory register of securities as a holder of shares of the Bank as of the
seventh calendar day prior to the date of the General Meeting (i.e. the decisive
date for the right of the shareholder to attend the General Meeting). The Bank's
Board of Directors shall place an application for an excerpt from the statutory
register of securities as of the decisive date. Persons that are designated by
the CNB in the statutory register of securities, persons not mentioned therein,
or persons empowered by these persons may not attend the General Meeting.



(5) The voting right belonging to a shareholder is governed by the nominal value
of their shares; each CZK 500 of the nominal value of the shares shall represent
one vote. The vote shall not be further divisible. The casting of votes shall be
carried out by means of ballot. However, the voting shall be carried out in a
different manner, if the same is requested by the Board of Directors, the
Supervisory Board, the Chairman of the General Meeting or if the same is decided
upon by the General Meeting. The Board of Directors' proposal, if any, shall be
voted upon first. Should the proposal of the Board of Directors be accepted,
other proposals shall not be voted upon. Should the proposal of the Board of
Directors not be accepted, votes are cast on the proposal of the Supervisory
Board, if any. Other proposals shall be voted upon in the sequence in which they
have been filed. If a noarial record is to be drawn up concerning the resolution
of the General Meeting, the Chairman of the General Meeting shall be obliged to
administer the casting of votes in such a manner that a notarial record of the
resolution of the General Meeting containing all statutory requirements may be
drawn up.



(6) Any proposals, counter-proposals and requests for explanation shall be made
by the Attending Shareholder in writing and placed at a designated place. The
Chairman of the General Meeting shall be obliged to ensure that all requests for
explanation of matters be answered, as long as such matters form the subject of
the agenda of the General Meeting and the requests are made in the course of the
General Meeting in accordance with these Articles of Association. The Chairman
of the General Meeting shall be obliged to inform the General Meeting of any
proposal or counter-proposal made by the Shareholder in compliance with Act No.
513/1991 Coll., the Commercial Code, as amended (hereinafter referred to as 'the
Commercial Code') and with the Articles of Association. Such a proposal shall be
discussed provided that it concerns issues that have been included in the agenda
of the General Meeting or provided that all shareholders or their
representatives are present and all agree that the proposal be discussed. The
sequence in which these proposals and counter-proposals are discussed shall be
governed by Section 5, subsection 5 of these Articles of Association. Any
Attending Shareholder shall be entitled to request that the minutes clerk of the
General Meeting include a protest concerning a resolution of the General Meeting
in the minutes of the General Meeting.



(7) The right to receive dividends, the pre-emptive right to subscribe for
shares and convertible and priority bonds and the right to the payment of the
interest in the liquidation balance otherwise associated with a share may be
transferred separately.



(8) The shareholder or shareholders of the Bank holding shares the total nominal
value of which exceeds 3% of the Bank's registered capital may request:

a) that the Board of Directors convene an Extraordinary General Meeting in order
to discuss the matters proposed;

b) that the Board of Directors include issues specified in their request into
the agenda of the General Meeting;

c) that the Supervisory Board examine the discharge of duties by the Board of
Directors with regard to the matters specified in the request;

d) that the Supervisory Board exercise the right to compensation for loss the
Bank might have against a member of the Board of Directors;

e) that a court of justice appoint an expert in order to examine the report on
the relationships between the controlled entities and associated entities as
specified by the Commercial Code, should there be serious reasons therefor,
under the terms and conditions specified by the Commercial Code.



Any request under this subsection shall be in writing and shall be dealt with in
accordance with the generally binding legal regulations and with the Articles of
Association.



Should the requests under this subsection not be submitted to the Bank in
writing, the shareholders concerned shall prove to the Bank, when exercising
their respective rights, that they are the authorised shareholders as specified
by Section 5, subsection 8 of the Articles of Association as of the date of
exercising such right. Should the above-mentioned shareholders fail to evidence
such title, the Bank shall verify such data through an excerpt from the
statutory register of securities, should the registry make such verification
possible. The shareholder shall be obliged to reimburse the Bank for these costs
no later than within thirty days from the receipt of the Bank's request to do
so.



(9) No shareholder shall be entitled to demand that the investments the
shareholder invested in the Bank in order to acquire or increase their holding
in the Bank be returned either in the course of the Bank's existence or upon its
winding up. However, in the event of the Bank's dissolution and subsequent
liquidation, the shareholders shall have the right to an adequate interest in
the liquidation balance of the Bank.



(10) Any shareholder shall be entitled to ask the Board of Directors to produce
a copy of the minutes of any General Meeting or a part thereof throughout the
Bank's existence. Such request shall be in writing. The copy of the minutes or a
part thereof shall be made at the expense of the Bank. The copy of the minutes
or a part thereof shall be available to the shareholder no later than within
sixty days from the date of receipt by the Bank of the shareholder's request,
however, not earlier than on the thirtieth day following the end of the General
Meeting concerned.





                                   Section 6

                                Dividend Payment



(1) The shareholder shall be entitled to a proportion of the Bank's profit
approved for distribution to the Shareholders by the General Meeting (a
dividend) taking into account the Bank's financial results and terms and
conditions specified by the generally binding legal regulations.



(2) The Board of Directors may give an order to the person maintaining the
register of uncertificated securities for registration of separately
transferable rights to a dividend payable.



(3) The right to a dividend shall belong to any shareholder holding shares on
the thirtieth calendar day following the date of the General Meeting at which
the resolution on the dividend payment was adopted. If the Board of Directors
has decided on registration of the right to receive the dividend in the register
of uncertificated securities, the right to receive the dividend shall apply to
such shareholder whose right in this respect is registered with the registry of
uncertificated securities on the thirtieth calendar day following the date of
the General Meeting which resolved on the dividend payment. The dividend shall
become payable upon expiration of thirty days following the date which is
decisive for origination of the shareholder's right hereunder.



(4) The Bank shall pay out the dividends as of the due date of the dividend
either:

a) by sending the Bank's payment document to the address of the shareholder or
the administrator, or

b) by a non-cash transfer from the Bank's account to the account of the
shareholder or the administrator (with legal entities, this is the sole manner
of dividend payment).



(5) Where dividends are paid through the Bank's payment document, they shall be
paid out to the shareholders by any payment point of the Bank.



(6) Where dividends are remitted to legal entities by a non-cash transfer, the
Bank shall remit the dividends no later than within five working days of
receiving the required documents, however, on the dividend due date at the
earliest. The required documents shall be as follows: a request for the dividend
payment containing the relevant banking details and an updated and officially
verified statement from the Commercial Register (or a similar document
evidencing registration with the relevant state authority). The signature of the
shareholder's statutory body (or its representative) subscribed at the request
for the dividend payment must be attested. In addition, if a shareholder is
represented by another legal person or natural person, such representative shall
be obliged to deliver officially verified powers of attorney from all entities
so represented and its updated and officially verified excerpt from the
Commercial Register. If the excerpt from the issuer's register only states the
information about the share's administrator, the shareholder shall be obligated
to submit an updated account statement of the security's holder. The Bank shall
not assume responsibility for the accuracy and completeness of the data stated
by the shareholder.



(7) The Bank's obligation to pay the dividend shall be discharged by sending the
Bank's payment document to the address of the shareholder or the administrator
specified in the register of uncertificated securities or, in the event of a non
cash transfer, upon debiting the dividend from the Bank's account.



(8) The right to claim a dividend shall lapse upon expiration of a four-year
period following the dividend due date.



(9) Upon the resolution of the General Meeting, the Board of Directors shall
announce the date when the dividend is payable, and the place, method, and the
decisive date for the dividend payment as specified in Section 39 of the
Articles of Association.





                                   Article VI

                               Bodies of the Bank



                                   Section 7

                                General Meeting



The General Meeting shall be the supreme body of the Bank.







                                   Section 8

                         Powers of the General Meeting



It is within the powers of the General Meeting to:

a) decide on amendments to and alterations of the Articles of Association, with
the exception of alteration in consequence of an increase in the registered
capital by the Board of Directors or on the basis of other legal facts
determined by law;

b) to decide on the increase in the registered capital, with the exception of
the procedure specified under Section 31 hereof, or on setting off a monetary
claim towards the Bank against a claim to be used for payment of the issue
price.

c) elect and recall members of the Supervisory Board, with the exception of the
election and recall of members elected by the Bank's employees under Section 13
of the Articles of Association;

d) approve the Board of Directors' reports regarding the Bank's business
activities and the Bank's assets, at least once per accounting period;
e) decide on a decrease in the registered capital provided that a prior consent
of the Czech National Bank has been given, unless the decrease to cover a loss
is concerned;

f) decide on a change in the class or type of the shares;

g) decide to issue bonds of the Bank if the law requires so;

h) decide to modify the rights attached to individual classes of the shares;

i) approve the Annual Financial Statements, Extraordinary Financial Statements,
Consolidated Financial Statements and Interim Financial Statements when required
by law;

j) decide on distribution of the profit or coverage of the loss, and to
determine royalties;

k) decide on the financial remuneration of members of the Board of Directors and
the Supervisory Board unless the law provides otherwise;

l) decide on merger of the Bank, provided that a prior consent of the Czech
National Bank has been given;

m) decide to wind up the Bank with the prior consent of the Czech National Bank;

n) approve proposed distribution of the liquidation balance of the Bank's
assets;

o) decide to register participation securities of the Bank in accordance with
special legal regulation and to terminate the registration thereof;

p) decide on concluding a contract the subject matter of which is a transfer of
the entity or a part thereof and the lease thereof by the Bank, provided that
the conclusion of the said contract on sale of an entity or a part thereof shall
be subject to the prior consent of the Czech National Bank, or to decide on
conclusion of such contract by a controlled entity;

q) charge the Board of Directors to decide on increase in the registered capital
under the conditions specified in the Commercial Code and the Articles of
Association (Section 31);

r) decide to acquire the Bank's own shares in accordance with the relevant
provisions of the Commercial Code;

s) decide on elimination or restriction of the pre-emptive right to acquire
convertible or priority bonds, elimination or restriction of the pre-emptive
right to subscribe for new shares in accordance with the Commercial Code;

t) approve a controlling contract, contract on transfer of profits and contract
on silent partnership, and alterations thereof;

u) approve the acquisition or alienation of assets, when the law so requires;

v) decide on other matters which, according to the generally binding legal
regulations or the Articles of Association, are part of the powers of the
General Meeting.





                                   Section 9

                         Convening the General Meeting



(1) The Regular General Meeting is held at least once a year, however no later
than six months from the last day of each accounting period. The General Meeting
shall be convened by the Board of Directors or, as the case may be, by a member
of the Board of Directors if the Board of Directors fails to agree without undue
delay on its convening and the law stipulates a duty to convene the same or if
the Board of Directors lacks a quorum long term, unless the generally binding
legal regulations specify otherwise.



(2) The Extraordinary General Meeting shall be held if so requested by the
shareholders as specified under Section 5, subsection 8. The Extraordinary
General Meeting shall also be held should it be convened by the Board of
Directors when urgent matters falling within the authority of the General
Meeting need to be dealt with.



(3) The Supervisory Board shall convene the General Meeting if it is in the
interest of the Bank. The Supervisory Board shall then submit necessary
proposals to the General Meeting.



(4) The Annual General Meeting shall be convened by means of a public notice
published in Hospodarske noviny and on notice boards in the Bank's registered
office at least thirty days prior to the date of the General Meeting. Such
notice shall contain at least the following:

a) trade name and registered office of the Bank;

b) venue, date and time of the General Meeting;

c) specification as to whether the Annual General Meeting, Extraordinary General
Meeting or Substitute General Meeting will be held;

d) agenda of the General Meeting;

e) decisive date for participation in the General Meeting;

f) other data required by law.



Should any alteration of the Articles of Association be on the agenda of the
General Meeting, the notification on the General Meeting shall either include
the draft amended Articles of Association or outline essential aspects of such
proposed alterations; and the draft amended Articles of Association must be
available to the shareholders in the registered office of the Bank within the
time limit specified for the convening of the General Meeting. The shareholders
shall be entitled to ask that a copy of the draft amended Articles of
Association be sent to them at their own expense and risk. The shareholders must
be advised of these rights in the notification of the holding of the General
Meeting.



(5) When the Board of Directors is requested by the shareholders specified under
Section 5, subsection 8 to convene the Extraordinary General Meeting, such
General Meeting must be convened so that it takes place within forty days of the
date on which the request to such effect is delivered to the Board of Directors.
Should the Board of Directors fail to convene the Extraordinary General Meeting
within such period of time, such shareholders may apply to the relevant court of
justice for an order to authorise the shareholders to convene the Extraordinary
General Meeting and to execute any acts associated therewith. The notices on the
General Meeting shall be made public in the manner specified under Section 9,
subsection 4; care shall be taken to ensure that the shareholders are informed
of the Extraordinary General Meeting at least fifteen days prior to the date of
the Extraordinary General Meeting.



(6) Should a substitute General Meeting be convened due to the failure to
constitute a quorum at the Regular General Meeting, Section 11, subsection 2 of
the Articles of Association shall apply to the process of the convening.



(7) Upon the request of the shareholders specified under Section 5, subsection
8, the Board of Directors shall declare the matter specified by these
shareholders to be the subject of the agenda of the General Meeting. Should such
request be delivered after the convening of the General Meeting has been
announced, the Board of Directors shall publish an amendment to the agenda of
the General Meeting at least ten days prior to the date of the General Meeting
in the manner stipulated for the convening of the General Meeting by the
Commercial Code and the Articles of Association. If such an announcement is no
longer possible, such issue may be included in the agenda of the General Meeting
only as specified in the following subsection.



(8) The Board of Directors shall inform the Supervisory Board about the day of
the general meeting no later than within the period of time specified by the
Commercial Code for a general meeting to be convened.



(9) The proposed agenda of the General Meeting prepared by the Board of
Directors shall be communicated to the Supervisory Board so as to make it
possible for the Supervisory Board to exercise its right to amend the agenda of
the General Meeting.



(10) The General Meeting may be revoked or postponed. The revocation or
postponement of the General Meeting shall be communicated in the manner
stipulated by the Commercial Code and the Articles of Association for the
convening of the General Meeting no later than one week prior to the scheduled
date of the General Meeting; otherwise the Bank shall be obliged to reimburse
all reasonable expenses of the shareholders who arrived in accordance with the
original notice. The General Meeting may only be cancelled by the body of the
Bank that convened the same. The Extraordinary General Meeting convened upon a
request of the shareholders specified under Section 5, subsection 8 may be
revoked or postponed only if the shareholders concerned so request. A new date
for the General Meeting shall be determined in accordance with the period of
time specified hereunder regarding the convening of the Regular or Extraordinary
General Meeting.





                                   Section 10

                       Proceeding at the General Meeting



(1) The Attending Shareholders or their representatives shall sign an attendance
list which shall contain the following details: trade name or name and
registered office if a shareholder is a legal person (legal entity), or name and
residential address if a shareholder is a natural person (an individual) or a
shareholder's proxy on the basis of a power of attorney; nominal value of the
shares that constitute the entitlement to vote and, as the case may be, a
statement that the shares have no voting rights attached thereto. Should the
Bank refuse to enter a certain person in the list of attending shareholders,
this fact shall be noted in the list together with the reasons therefor. The
accuracy of the attendance list shall be certified by the signatures of the
Chairman of the General Meeting and the minutes clerk elected by a majority of
votes of the Attending Shareholders.



(2) Members of the Supervisory Board and members of the Board of Directors shall
attend the General Meeting of the Bank. The General Meeting may be attended by
other persons invited by the convener, unless the General Meeting decides not to
permit such attendance.



(3) The Board of Directors may authorise employees of the Bank or third parties
(hereinafter referred to as 'the Authorised Persons') to attend the General
Meeting in order to ensure the same in terms of organisational and technical
aspects. The Board of Directors shall be obliged to bind such Authorised Persons
to maintain confidentiality concerning confidential facts and information that
might cause loss to the Bank. The Authorised Persons shall be, in particular,
entitled to examine the right of the shareholder or their proxy to attend the
General Meeting as specified by the generally binding legal regulations and the
Articles of Association. Until scrutineers are elected, the Authorised Persons
shall be entitled to perform their duties



(4) The General Meeting shall be opened by a member of the Board of Directors
authorised for this purpose by the Board. The person who opens the General
Meeting shall arrange for the election of the Chairman of the General Meeting,
two verifiers of the minutes, the minutes clerk and the persons to count votes
cast (scrutineers). The election shall be governed by the provisions of Section
5, subsection 5. The Chairman of the General Meeting shall then preside the
General Meeting. Rules concerning the technique of the procedure and voting of
the general meeting as well as other details can be specified by the Rules of
Procedure if such Rules of Procedure are approved by the general meeting.



(5) Should any of the elected officers, in accordance with subsection 4, cease
to hold their office during the General Meeting, the General Meeting shall elect
a new officer. Such election shall be organised by the Chairman of the General
Meeting or a person authorised for this purpose by the Board of Directors or by
the Supervisory Board.



(6) The Board of Directors shall ensure that the minutes of the General Meeting
are produced within a period of thirty days from the date of the conclusion of
the General Meeting. The minutes shall contain:

a) trade name and registered office of the Bank;

b) venue and time of the General Meeting;

c) names of the Chairman of the General Meeting, the minutes clerk, the
verifiers of the minutes, and scrutineers;

d) comments made on individual items on the agenda;

e) resolutions of the General Meeting and results of voting;

f) contents of any objection of a shareholder, a member of the Board of
Directors or the Supervisory Board concerning the resolution of the General
Meeting, if the same is requested by the person raising such objection.



Proposals and statements presented for discussion at the General Meeting along
with the attendance sheet shall be attached to the minutes of the General
Meeting. The minutes shall be signed by the minutes clerk, the Chairman of the
General Meeting and two verifiers.



(7) The minutes of the General Meeting together with the respective notice on
the holding of the General Meeting and the list of the Attending Shareholders
shall be kept in the Bank's archives throughout the Bank's existence. The
liquidator shall arrange that such minutes are archived or kept in custody for a
period of ten years following the winding-up of the Bank.





                                   Section 11

          Constituting Quorum and Casting Votes at the General Meeting



(1) The General Meeting shall constitute a quorum if the Attending Shareholders
hold shares whose total nominal value exceeds 30% of the registered capital of
the Bank, provided that voting rights are attached thereto.



(2) Should the General Meeting fail to constitute a quorum, the Board of
Directors (or the Supervisory Board, should it be the convenor of the General
Meeting, or shareholders authorised by a court of justice to convene an
extraordinary General Meeting in accordance with the Commercial Court) shall
convene a substitute General Meeting. The substitute General Meeting shall be
convened by means of a new notice in the manner set out in Section 9, subsection
4 of the Articles of Association; the time limit so specified shall be shortened
to fifteen days. The substitute General Meeting shall be held within six weeks
of the date on which the originally convened General Meeting should have been
held. The substitute General Meeting so convened shall have the same agenda and
shall constitute a quorum irrespective of the provisions of Section 11,
subsection 1.



(3) The General Meeting shall pass resolutions by majority of votes of the
Attending Shareholders unless legal regulations require a qualified majority of
votes.



(4) When assessing the capacity of the General Meeting to make decisions and at
each particular vote casting at the General Meeting, the shares with no voting
rights or the shares where the voting rights cannot be exercised shall not be
taken into account.





                                   Section 12

                        Powers of the Supervisory Board



(1) The Supervisory Board shall oversee the exercise by the Board of Directors
of their powers and the carrying on of the business activities of the Bank. The
Supervisory Board shall oversee the efficiency and effectivity of the internal
management and control system of the Bank as a whole.



(2) The Supervisory Board shall, in particular:

a) convene an Extraordinary General Meeting when the Bank's interests so require
(Section 9, subsection 3) and propose the General Meeting necessary measures to
be taken;

b) elect and recall members of the Board of Directors;

c) approve contracts on performance of duties of members of the Board of
Directors and consideration provided to members of the Board of Directors,
evaluate fulfilment of contracts on performance of duties concluded with members
of the Board of Directors;

d) examine ordinary, extraordinary, interim, and consolidated Financial
Statements, proposals for the distribution of profit or the coverage of loss,
and submit its opinion to the General Meeting;

e) be entitled to inspect, through one of its members, all documents and records
related to the activity of the Bank;

f) check whether the books and records are maintained properly and in accordance
with the actual state and whether the business activities of the Bank are
carried on in compliance with the generally binding legal regulations, the
Bank's Articles of Association, and resolutions and instructions of the General
Meeting;

g) provide the Board of Directors with its position on the choice of an external
auditor;

h) represent the Bank before court or other authorities in disputes with members
of the Board of Directors;

i) inform the General Meeting of the results of its supervisory activity;

j) be entitled to restrict the right on the part of the Board of Directors to
act on behalf of the Bank, including acting in any single matter; any such
restriction, however, shall not be effective against third parties;

k) provide the Board of Directors with its prior position on status, conception,
and annual plan of activities of the Internal Audit Unit;

l) approve acquisition or alienation of assets in the cases stipulated by law
.examine the report on relations between the supervised and the supervisor as
provided by the Commercial Code and submit the information on the examination of
the report to the general meeting if so required by law;

m) evaluate the effectivity of the internal management and control system of the
Bank as a whole;

n) define the principles of remuneration of the Director of Internal Audit.





                                   Section 13

            Election and Recall of Members of the Supervisory Board



(1) The Supervisory Board shall consist of nine members, natural persons, who
meet the conditions specified by the generally binding legal regulations. The
term of office of a member of the Supervisory Board shall be four years. Two
thirds of the members of the Supervisory Board shall be elected and recalled by
the General Meeting and one third by the Bank' s employees. Any member of the
Supervisory Board shall be entitled to resign, however, he/she shall be obliged
to inform the Supervisory Board thereabout. Such a member shall cease to perform
their duties as from the date on which their resignation was discussed or was to
be discussed by the Supervisory Board. Should a resigning member of the
Supervisory Board announce their resignation at a meeting of the Supervisory
Board, their office shall terminate after expiration of two months following
such notification, unless the Supervisory Board approves, upon request of such a
member, another date of the term of office termination. The Supervisory Board
shall announce the resignation of its member at the forthcoming General Meeting.
Details of the election and recall of the Supervisory Board members elected by
the employees shall be contained in the Election Rules.



(2) If a member of the Supervisory Board dies, abdicates, is recalled or their
term of office terminates otherwise, the Bank's General Meeting shall elect a
new member of the Supervisory Board within a period of three months. Unless the
number of the Supervisory Board members elected by the General Meeting falls
under one half, the Supervisory Board may appoint, upon the proposal of the
Remuneration and Personnel Committee of the Supervisory Board, substitute
members to hold the office until the forthcoming the General Meeting is held.





                                   Section 14

           Rights and Obligations of Members of the Supervisory Board



(1) The Supervisory Board shall exercise its rights either jointly through all
its members or through its individual members. The Supervisory Board may decide
that the exercise of the supervisory duties be divided among its members. The
Supervisory Board shall inform the General Meeting and the Board of Directors
thereabout. The Supervisory Board members shall be entitled to enter the Bank's
premises and to request relevant documents and records for supervisory purposes.
The division of the supervisory duties shall affect neither liability of the
Supervisory Board member nor their right to perform other supervisory
activities.



(2) The Supervisory Board shall be entitled to require that the Board of
Directors members attend a meeting of the Supervisory Board and explain any
matter relating to the Bank or its activities.



(3) The Supervisory Board shall observe all principles and instructions approved
by the General Meeting insofar as they are in accordance with the generally
binding legal regulations and the Articles of Association. Any breach of the
approved principles or instructions shall not impact upon effectiveness of the
Supervisory Board members' acts against third parties.



(4) Members of the Supervisory Board shall be obliged to exercise their range of
powers with due care and diligence and always observe the Bank's best interests.
They shall be obliged to maintain confidentiality regarding confidential
information and facts that are subject to banking secrecy and other facts the
disclosure of which to third parties might result in a loss to the Bank. Those
members of the Supervisory Board who caused damage to the Bank by breaching
their obligations or assumed liabilities while exercising their supervisory
duties shall be liable for such loss jointly and severally. However, the members
of the Supervisory Board shall be liable for damage caused to the Bank by their
execution of a specific instruction given by the General Meeting only provided
that such instruction contravenes legal regulations. Further liability of the
Supervisory Board members shall be specified by the Commercial Code.



(5) Members of the Supervisory Board, who are responsible to the Bank for
damage, shall be liable jointly and severally if the member of the Supervisory
Board concerned failed to settle such damage and creditors cannot satisfy their
claims from the Bank's property due to its insolvency or because the Bank
stopped making payments. The extent of such liability shall be limited by the
extent of the duty of the Supervisory Board members to provide compensation for
damage. Liability of the Supervisory Board members is discharged when they
settle the damage caused.



(6) A member of the Supervisory Board may not carry on a business activity which
is identical with or similar to the business of the Bank or enter into business
relations with the Bank, may not act as an intermediary for other persons in
transactions with the Bank, may not participate in the business activity of
another entity as a partner with unlimited liability or as a person controlling
other persons engaged in business identical with or similar to the business
activities of the Bank, may not act as or be a member of the statutory body or
other body of another legal entity engaged in an identical or similar business
activity as the Bank, unless such legal entity is a holding-type group. Members
of the Supervisory Board may conclude banking deals as individuals (clients)
provided that such banking deals are concluded under the terms and conditions
customary in trade.



(7) The breach of the duties stated above shall entitle the Bank to demand that
the breaching member of the Supervisory Board assign their trade to the Bank or
render the proceeds thereof or, as the case may be, transfer their rights to the
Bank. This shall not affect the Bank's right to damages or other consequences
arising out of or in connection with a breach of these duties. Such entitlement
of the Bank shall cease to exist if the Bank does not exercise the same within a
period of three months of the day on which the Bank was informed of the breach
of the duties, however, not later than one year from the date of its origin. The
provisions contained in the previous sentence shall not apply to the right to
claim damages.



(8) The Bank shall be obliged to reimburse the Supervisory Board members for the
expenses which have been necessary or which have been spent purposefully while
discharging the office of a member of the Supervisory Board.



(9) Should a member of the Supervisory Board cease to meet the terms and
conditions required by the generally binding legal regulations and the Articles
of Association for the holding of the office of the Supervisory Board member,
such member shall be obliged to inform the Bank thereabout without delay.





                                   Section 15

                       Meetings of the Supervisory Board



(1) The Supervisory Board shall elect from among its members a Chairman and
Vice-Chairman of the Supervisory Board. The Chairman and Vice-Chairman of the
Supervisory Board must be elected by an absolute majority of votes of all
members of the Supervisory Board. The Chairman of the Supervisory Board or, in
his absence, the Vice-Chairman shall convene the meetings of the Supervisory
Board. The Chairman may authorise a member of the Supervisory Board to convene
the Supervisory Board meeting. The Supervisory Board must also be convened if
any member thereof so requests.



(2) The Supervisory Board shall constitute a quorum if at least five members of
the Supervisory Board are present at the meeting. Resolutions of the Supervisory
Board are adopted if they are approved by absolute majority of all members of
the Supervisory Board.



(3) Meetings of the Supervisory Board shall be held at least once in three
calendar months and shall be convened in writing. All members must receive an
invitation with documents to be discussed no later than seven calendar days
prior to the scheduled date of the meeting.



(4) A member of the Supervisory Board may not be represented by any other person
in the performance of their office.



(5) Minutes shall be taken of the meetings of the Supervisory Board. The minutes
shall be signed by the Chairman and by the minutes clerk. The minutes shall also
contain opinions of a minority of members, if they so require; a divergent
opinion by the members of the Supervisory Board elected by the employees shall
be always included in the minutes. The minutes must be archived throughout the
existence of the Bank. The minutes shall specify the transactions of the meeting
and all resolutions taken.



(6) The Supervisory Board shall exercise its powers over the bodies of the Bank
by means of its resolutions.



(7) A meeting of the Supervisory Board may be convened by means of communication
media or in another suitable manner. The convening of such a meeting of the
Supervisory Board must be communicated to all members of the Supervisory Board.
In such an event, the seven-day time limit for presentation of the documents
shall not apply and the documents may be submitted at the meeting itself.



(8) The Chairman or, in his absence, the Vice-Chairman of the Supervisory Board,
or a member of the Supervisory Board charged therefor may request that all
members of the Supervisory Board take a per rollam resolution by voting in
writing or by means of communication media, provided that all members of the
Supervisory Board agree with this manner of voting. Such resolution shall be
adopted if at least 5 members of the Supervisory Board voted for. Such a per
rollam resolution must be recorded in the minutes at the forthcoming meeting of
the Supervisory Board.



(9) Details of the conduct of the meetings shall be set forth in the Rules of
Procedure of the Supervisory Board.





                                   Section 16

                      Committees of the Supervisory Board



(1) The Supervisory Board shall set up at least the following two committees
(hereinafter 'Supervisory Board Committees') as advisory and recommending
bodies:

a) Remuneration and Personnel Committee, and

b) Audit Committee;



(2) The Remuneration and Personnel Committee as well as Audit Committee shall
each have three members.



(3) Members of the Supervisory Board Committees shall be members of the
Supervisory Board and shall be elected and recalled by the Supervisory Board.



(4) The Remuneration and Personnel Committee shall:

a) provide recommendations to the Supervisory Board regarding election and
recall of the Board of Directors members,

b) provide the Supervisory Board with its position on the proposal by the Board
of Directors regarding the contracts on the discharge of office made with the
Board of Directors members and the consideration paid to the Board of Directors
members,

c) evaluate the fulfilment of the contracts on the discharge of office made with
the Board of Directors members,

d) provide its position on the proposal for the distribution of royalties
between the members of the Bank bodies,

e) propose motions to the Supervisory Board concerning occupation of offices in
the Supervisory Board Committees.



(5) The Audit Committee shall:

a) inspect accounting documents and records, and monitor whether the books are
kept properly, particularly whether the accounting records fairly reflect actual
state;

b) co-operate with the Internal Audit Unit of the Bank and external auditors of
the Bank, and make use of the facts thereby ascertained for its supervising
activities.





(6) Each of the Committees of the Supervisory Board shall elect its Chairman and
Vice-Chairman, who shall represent the Chairman in case of the Chairman's
absence.



(7) The Supervisory Board Committees shall meet when necessary, however, at
least once in a year.



(8) The meeting of the Supervisory Board Committee shall be convened by the
Chairman of the respective Committee or its Vice-Chairman in the Chairman's
absence, or by an authorised member of the respective Committee.



(9) The Supervisory Board Committees shall constitute a quorum if all members of
the Committee have been duly invited to the meeting of the Committee and if a
simple majority of all members of the Committee is present at the meeting.



(10) Resolutions of any Committee of the Supervisory Board shall be adopted by
an absolute majority of all its members.



(11) Minutes shall be taken of the meetings of the Supervisory Board Committees
signed by the Chairman or Vice-Chairman or another authorised member of the
Committee. The minutes shall also include opinions of a minority of the
Committee members if they so require. The minutes must be archived throughout
the existence of the Bank.



(12) Details concerning the procedure of the Supervisory Board Committee meeting
shall be set forth in the Rules of Procedure of each Supervisory Board
Committees.





                                   Section 17

                               Board of Directors



(1) The Board of Directors is a statutory body which manages the Bank's
activities and acts in its name. The Board of Directors shall ensure business
management, including proper maintenance of the accounting records of the Bank.
The Board of Directors shall further ensure the implementation of the internal
control system, systematically monitor its functionality, and create conditions
for the independent and objective performance of compliance and of the internal
audit.



(2) The Board of Directors shall observe the generally binding legal
regulations, the Articles of Association, and the resolutions and instructions
approved by the General Meeting, provided that these comply with legal
regulations and the Articles of Association. Any breach of the approved
instructions shall not impact upon effectiveness of the acts of the Board of
Directors members against third parties



(3) The manner of acting of the Board of Directors is set forth in Section 38
hereof.



--- end of part 1 of 2


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