Verica Hadzi Vasileva-Markovska Macedonian Institute of Directors Brussels,

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.

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

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 within 15 days of the GM.

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

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 harmonisation of 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.

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)

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.

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.