Verica Hadzi Vasileva-Markovska

1. Verica Hadzi Vasileva-Markovska Macedonian Institute of Directors Brussels, 17.12.2013

2. Key provisions of the shareholders Directive 2007/36/EC • Equal treatment of shareholders • Information prior to the general meeting • Minimum notice period of 21 days for most GMs, which can be reduced to 14 days if voted electronically and the if general meeting agrees; • Internet publication of the convocation and documents to be submitted to the GM at least 21 days before the GM; • Right to put items on the agenda of the general meeting and to table draft resolutions • shareholders have right to put items on the agenda of the GM, accompanied by a justification or a draft resolution to be adopted in the GM; • shareholders have right to table draft resolutions for items included or to be included on the agenda of a GM. • minimum stake for filing such rights shall not exceed 5% of the share capital.

3. Key provisions (continued) • Requirements for participation and voting in the general meeting • Abolition of share blocking and introduction of a record date in all Member States which may not be more than 30 days before the GM; • Participation in the general meeting by electronic means • Abolition of obstacles on electronic participation to the GM, including electronic voting • Right to ask questions • and obligation on the part of the company to answer questions

4. Key provisions (continued) • Proxy voting • Abolition of existing constraints on the eligibility of people to act as proxy holder and of excessive formal requirements for the appointment of the proxy holder • Voting by correspondence • Permission to companies to offer their shareholders the possibility to vote by correspondence in advance of the GM • Removal of certain impediments to the effective exercise of voting rights • Voting results • Disclosure of the voting results on the Company's internet site within15 days of the GM.

5. Areas were more should be done • Shareholder engagement • “Long-term” shareholder engagement • Transparency of voting policies and engagement policies • Proxy Advisors • Remuneration • Cross border / Electronic voting • Better oversight of related parties transactions by shareholders

6. Main policy objectives? • To make shareholders more engaged and thus make companies more sustainable from a corporate governance perspective. • Main operational objectives: • Raise awareness of investors’ corporate governance drives • to improve disclosure of voting policies by institutional investors, • to enable ultimate investors to optimise investment decisions, • to facilitate dialogue between investors and companies and • to encourage shareholder engagement. • Better oversight on remuneration policies and remuneration of managers • harmonisationof disclosure requirements • mandatory shareholder vote on the remuneration policy and the remuneration report. • Improving shareholder control over management • enhance the shareholder oversight on related party transactions. • grant shareholders a right of approval for most significant transactions. • Require better transparency by proxy advisors • methodology for the preparation of their advice and • their possible conflicts of interests.

7. Case of Macedonia • Procedure for approval of transaction with related party in a shareholding company listed on an authorised Stock Exchange • Changes in the Trading Companies Law (Official Gazette 26/12/2012) • Procedure for examination / control of the accounting records and company’s activities • Changes in the Trading Companies Law (Official Gazette 16/05/2013)

8. Oversight of related parties transaction by shareholders • For all transactions higher than 10% of the Company’s assets as presented in the Company’s last year audited financial statements, an authorized auditor needs to provide an opinion prior to the transaction. • The opinion needs to examine the following: • whether the transaction has been made in compliance with the Law • whether the transaction is fair and arm’s length, • whether the transactions between the parties are proportionate and not favourable or damaging for some of the parties. • Transactions for which no opinion is needed are: • Payment of dividend, • Issue of shares, • Financial services for companies providing such services that are regulated by regulators. • Annulation of transactions with related parties • A shareholder can initiate a Court procedure to annul a transaction if the shareholder believes that the transaction was damaging to the company. • Within a year of becoming aware of such agreement, but not longer than 3 years of the decision for the transaction. • If the transaction is annulled, the related party needs to indemnify the Company.

9. Possibility of direct control by shareholders • Procedure for examination / control of the accounting records and company’s activities • Shareholder or group of shareholders with more than 10% of the equity can ask to have access to the accounting records and to appoint auditor to check for some irregularities. • Shareholders can ask the Court to appoint an auditor if the shareholders’ assembly was not gathered within 8 days of the request for gathering and if the assembly refuses to appoint an auditor. • The appointed auditor should not have independence issues with the Company or its shareholders and has not provided consultancy services within the tree previous years to the company. • Costs of appointment of new auditors are covered by the shareholders proposing the audit. Costs will be reimbursed by the Company if the irregularities are confirmed. • Request for new audit can be made within a year of becoming aware of irregularities. • The auditor cannot access the information relating to patents, royalties, intellectual rights.