Results of the regular General Meeting
This year's regular General Meeting of the shareholders of Telefónica O2 Czech Republic, a.s. took place on April 21, 2008 in Prague. Shareholders holding some 71% of the company's shares took part; therefore, the General Meeting had a quorum.
The highest corporate body of Telefónica O2 Czech Republic approved the company's unconsolidated and consolidated financial statements for 2007 prepared in accordance to International Financial Reporting Standards (IFRS), recommended for approval by the company's Board of Directors. Both financial statements were audited by Ernst & Young, which expressed unqualified opinion to both financial statements. According to the financial statements for 2007, the company recorded a consolidated profit of CZK 10,386 million and an unconsolidated net profit of CZK 11,894 million.
The General Meeting approved amendment to the Company's Articles of Association,as proposed by the Board of Directors. One of the amendments relates to the creation and use of the Reserve Fund. Following this amendment, the General Meeting approved transfer of CZK 6,441,798 thousand from the Share Premium to the Reserve Fund.
The General Meeting approved the Board of Directors' proposal regarding the dividend payment. This proposal was based on a thorough analysis undertaken by the Board of Directors regarding the past performance of the Company, the current balance sheet position, and the expected future performance. At the same time, it is consistent with the company's investment strategy to focus on the investments into growth areas (broadband, mobile, business services and Slovakia) and is based on the Board's intention not to hold cash balances and distribute the surplus cash to shareholders. Dividend payment is made from the part of 2007 net profit in the amount of CZK 9,662,697 thousand and from the part of reserve fund, which can be used at company's discretion in the amount of CZK 6,441,798 thousand, i.e. a total of CZK 16,104,495 thousand. This represents dividend of CZK 50 per share before tax. September 17, 2008 has been set as the decisive day for the payment of dividends; dividends will be paid on October 8, 2008. The company's Board of Directors expects that continuing strong positive cash flow in 2008 will allow the Company to pay the dividend from accumulated cash.
The General Meeting approved the amendment to the rules for remuneration of the Company Board of Directors and Supervisory Board. The amendment changes the method to determinate remuneration of corporate bodies' members. The new rules approved by the shareholders divide the members into three categories - member, Vice Chairman and Chairman. By approving the amended rules shareholders decided on remuneration for each individual category. The change shall take effect as of the second half of 2008. In respect to the first half of 2008, the General Meeting approved the total amount of remuneration of the Board of Directors and Supervisory Board members corresponding to the half of 2007 total annual remuneration.
The General Meeting confirmed by election Maria Pilar López Álvarez in the office of a Supervisory Board member, the post to which she was co-opted on 26 July 2007 and filled thus the post vacated by Catherine Jane Keers, Vivek Dev in the office of a Supervisory Board member, the post to which he was co-opted on 25 October 2007 and filled thus the post vacated by Sohail Qadri, and Jaime Smith Basterra in the office of a Supervisory Board member, the post to which he was co-opted on 21 February 2008 and filled thus the post vacated by Peter Antony Erskine.
Moreover, the General Meeting elected Antonio Botas Baňuelos as a Supervisory Board member, who filled the post vacated by Julio Esteban Linares, who resigned from his office on the morning Supervisory Board meeting held on 21 April 2008. Brief resumes of Pilar López, Chief Finance Officer of Telefónica O2 Europe plc., Vivek Dev, Chief Operations Officer of Telefónica O2 Europe plc., Jaime Smith Basterra, Chief Executive Officer of O2 Germany GmbH, and Antonio Botas Baňuelos, Executive Officer for Product Development & Brand Management of O2 Germany GmbH & Co. OHG, are attached to this press release.
The General Meeting approved making of the agreement on performance of a member of the Supervisory Board between the Company and all Supervisory Board members - the amendment was induced by the amendment to the rules for remuneration of Supervisory Board members and was a result of a changed structure of the financial compensation provided by the company as a counter-performance compensating for the assumption of non-competition commitment after termination of tenure of the office of a Supervisory Board member and departure outside Telefónica Group.
