Composition and functioning of the administrative, management and supervisory bodies and their committees

  1. Composition of the members of the Board of Directors:

    The Parent Company is managed and represented by a Board of Directors, which consists of five individuals meeting the requirements of Article 234 of the CA and Article 116a, paragraph 2 of the Law on public offering of securities. The composition of the Board of Directors may be changed by the General Meeting at any time.

    The composition of the Board of Directors is described in item I. General information about "Sopharma" AD in the Management Report.

    According to Article 116a, paragraph 2 of the Law on public offering of securities, at least one third of the members of the Board of Directors must be independent persons. In this case it is:

    • Alexandar Viktorov Tchaoushev

    The members of the Board of Directors are acquainted with the rights and obligations related to their position.

  2. Procedure for work of the Board of Directors

    "Sopharma" AD has developed Rules for the work of the Board of Directors, which comply with and are a continuation of the principles set out in the Good Corporate Governance Program. The Articles of Association of the Company are in accordance with the requirements of the Law on public offering of securities and the shareholders have the right to timely notification on various issues.

    The Board of Directors meets at least once a month.

  3. Minutes of meetings

    Minutes of the decisions of the Board of Directors shall be kept and signed by all members present at the meeting.

    The minutes shall be kept by the Investor Relations Director of the company in a special register according to the provision of art. 116d, para. 3, item 3 of the LPOS.

    The protocols are a trade secret. Facts and circumstances thereof may be published, disclosed or brought to the attention of third parties only by decision of the Board of Directors or when required by law.

  4. Responsibility

    The members of the Board of Directors must provide a monetary guarantee for their management in the amount determined by the General Meeting, but not less than their 3-month gross remuneration.

    The members of the Board of Directors are jointly and severally liable for the damages they have caused to the Company.

    Each member of the Board of Directors may be released from liability if it is established that there is no fault for the damages. The General Meeting may release from liability a member of the Board of Directors of the Regular Annual General Meeting in the presence of certified by a registered auditor Annual Financial Statements for the previous year and interim financial statements for the period from the beginning of the current year to the General Meeting.

    The Board of Directors reports to the General Meeting of Shareholders.

  5. Role of the Board of Directors for the application of the principles of good corporate governance

    The Board of Directors makes decisions on all issues related to the activities of the Parent Company, except for those which, according to the current legislation and the Articles of Association, are within the exclusive competence of the General Meeting. According to the structure and composition of the management bodies of each of the companies in the Group, their functions are distributed according to the departments that exist in them. The way of functioning of the management and control bodies is aimed at bringing the management of each company in line with the set strategic goals, both of the company itself and those of the Group.

    The Board of Directors assigns the implementation of its decisions and the implementation of the operational management functions of the Company to one of its members /executive director/. The Executive Director may be replaced at any time.

    The members of the Board of Directors of the public companies in the Group submit a declaration to the Financial Supervision Commission /FSC/, to "BSE-Sofia" AD and to the Company itself under Art. 114b of LPOS and under Art. 247, item 4 of the Commercial Law. The change in these circumstances shall be declared in the respective terms after its occurrence.

    In carrying out its activities, the Board of Directors complies with the accepted principles of corporate governance of the Company.

    The Board of Directors makes the best efforts to ensure easy and timely access to public information in order to exercise the rights of shareholders in an informed manner, respectively to make an informed investment decision by investors.

  6. Due care. Avoiding conflicts of interest.

    The members of the Board of Directors are obliged:

    • to perform their functions with the care of a good trader, to be loyal to the Company and to act in the best interest of its shareholders;
    • to perform their duties with the skills, diligence and responsibility inherent in the professional and in a way that they reasonably believe is in the interest of all shareholders of the Company, using only information that they reasonably believe to be reliable, complete and timely;
    • to prefer the interest of the Company and the investors in the Company to their own interest and not to use for the benefit of themselves or others at the expense of the Company and the shareholders facts and circumstances that they learned in the performance of their official and professional duties;
    • to avoid direct or indirect conflicts between their interest and the interest of the Company, and if such conflicts arise — to disclose them in a timely and complete manner and not to participate and not to influence other members of the board in making decisions in these cases;
    • not to disseminate information about the discussions and decisions of the meetings of the Board of Directors, as well as other non-public information about the Company, including after they cease to be members of the Board of Directors, until the public announcement of the relevant circumstances by the Company;
    • to provide and disclose information to shareholders and investors in accordance with the requirements of the regulations and internal acts of the Company.

    The Board of Directors is assisted by an Audit Committee, which according to the Independent Financial Audit Act and International Standards on Auditing performs the following functions:

    • monitors the financial reporting processes in the enterprise;
    • monitors the effectiveness of the company’s internal control systems;
    • monitors the effectiveness of risk management systems in the enterprise;
    • oversees the independent financial audit of the enterprise;
    • reviews the independence of the registered auditor of the company in accordance with the requirements of the law and the Code of Ethics for Professional Accountants, including monitors the provision of additional services by the registered auditor of the audited company.

    At the Extraordinary General Meeting of Shareholders of "Sopharma" AD, held on November 20, 2008, an Audit Committee was elected consisting of three people: Tsvetanka Zlateva, Vasil Piralkov and Vasil Naidenov with a 3-year term , who was re-elected 3 consecutive times. With a decision of the GMS from June 2, 2017 Vasil Piralkov was replaced by Kristina Atanasova.