ANY Biztonsági Nyomda : Report on Corporate Governance 2021 – 29

REPORT ON CORPORATE GOVERNANCE

ANY Security Printing Company Public Limited Company By Shares (the "Company") declares as set forth below and provides the following information regarding corporate governance of the Company:

Description of governing bodies of the Company

Operation of the Board of Directors

The Company is managed by the Board of Directors consisting of 6 members. Members are elected by the Gen-eral Meeting of Shareholders (GM) for a maximum 5 year term. Following the expiration of their mandate mem-bers can be re-elected.

Members of the Board of Directors on 31 December 2021 (names of independent members are underlined and printed in italics):

Name	Mandate
Dr. Ákos Erdős	chairman	30 April 2023
Gábor Zsámboki	vice-chairman	30 April 2023
Tamás Erdős	member	30 April 2023
Erwin Fidelis Reisch	member	30 April 2023
György Gyergyák	member	30 April 2023
Dr. Gábor Kepecs	member	30 April 2023

The Board of Directors elects its chairman from among its members with a simple majority of votes. Those mem-bers who are not employees of the Company decide as a board over the assignment of the Chief Executive

Officer. The President of the Board of Directors exercises the employer's rights over the Chief Executive Officer. The Board of Directors establishes its own Rules of Procedure in which it gives orders on the scope of compe-tence and tasks among themselves.

A meeting of the Board of Directors may be convened by the chairman or a member of the Board of Directors indicating the reason and purpose of the meeting. Minutes are kept of the meetings.

Tasks and competence of the Board of Directors

• (a) Any of issues concerning the management and business operations of the Company, which do not fall within the General Meeting's exclusive competence on the basis of the Statutes or provisions of the Civil

  Code. The Board of Directors is responsible for any of its decisions taken in the frame of the activities of the Company or in the frame of delegated competence and is entitled to place into its competence, deci-sions on issues, which do not fall within the scope of the exclusive competence of the General Meeting.

• (b) The Board of Directors shall present the report of the Company prepared in accordance with the Ac-counting Act and the proposal on the appropriation of after-tax profits and the report on corporate gov-ernance.

• (c) The Board of Directors shall prepare a report on the management, the financial situation and the busi-ness policy of the Company and submit same to the annual ordinary General Meeting at least once eve-ry year, and to the Supervisory Board at least once every three months.

• (d) The members of the Board of Directors shall treat business secrets concerning the Company's issues as confidential. Upon the request of the shareholders, the Board of Directors shall provide information on the affairs of the Company, and allow an inspection of its books and documents provided that business interest and business secret of the Company will not be infringed. In the event that the Board of Directors does not comply with such request, upon the request of the shareholder concerned, the Court of Regis-tration will oblige the Company to provide information or to allow inspection.

• (e) The Board of Directors shall ensure that the books of the company, including accounting books and Register of Shareholders, are kept according to the applicable regulations.

• (f) The Board of Directors shall report to the Court of Registration in accordance with the laws and the Stat-utes and shall take measures on the necessary publications.

• (g) The Board of Directors shall convene the ordinary and the extraordinary General Meeting except the cases set out in the Civil Code.

• (h) The Board of Directors shall prepare and approve the proposals concerning issues in the competence of the General Meeting and present same to the General Meeting.

• (i) The Board of Directors shall decide with respect to the annual and mid-term business plan of the Com-pany, the implementation of which belongs to the scope of competence of the operative management of the Company.

• (j) The Board of Directors shall determine the competence of the General Manager responsible for the operative management. The employer's rights over the General Manager shall be exercised by the

  members of the Board of Directors who are not employed by the Company acting as a body, they shall decide on the appointment, dismissal and remuneration of the General Manager, whilst the Chairman of the Board of Directors shall exercise the employer's rights himself/herself, in case of his/her incapacity,

  his/her deputy or a person appointed by the Board of Directors shall exercise such rights.

• (k) The Board of Directors may confer the right to sign on behalf of the Company to the employees of the Company.

• (l) The Board of Directors shall approve the Company's Organizational and Operational Regulations.

• (m) The Board of Directors shall issue and divide consolidated shares.

• (n) On the basis of the General Meeting's authorization, the Board of Directors shall provide for the pur-chase of treasury shares and shall decide on the sale of treasury shares owned by the Company.

• (o) With the approval of the Supervisory Board granted in advance, the Board of Directors shall approve the interim balance sheet concerning the acquisition of treasury shares, payment of interim dividends and the increase of the share capital by its assets excessing the share capital.

• (p) The Board of Directors shall increase the share capital according to the Section 17.8 of the Statutes.

• (q) The Board of Directors shall decide on the payment of interim dividends with the approval of the Super-visory Board granted in advance.

• (r) The Board of Directors may set up committees, the members of which may be solely the members of the

  Board of Directors, and the Board of Directors can transfer a part of its competence to such committees, and the Board of Directors shall be also entitled to set up committees consisting of both the members of the Board of Directors and persons who are not members of the Board of Directors and provide such committees the appropriate authorization.

• (s) The Board of Directors may undertake financial obligations in the scope of ordinary business operations, the individual value of which exceeds 20% of the share capital (e.g.: guarantee, etc.).

• (t) The Board of Directors may undertake any transaction, financial obligation which are neither included in the annual business plan approved by the Board of Directors nor in the ordinary business operations, value of which exceeds 20% of the share capital of the Company; with respect to the threshold, the amount shall be calculated with the aggregated value of transactions concluded in one year (purchase, rental, leasing, sale, investment, sale of investment of assets, providing services which are outside of or-dinary business operations, crediting, taking loans, etc.).

• (u) Concluding transactions between the Company and:

  (i) one of its shareholders holding at least ten per cent. of the voting rights or his/her close rel-

  ative; or

  • (ii) a person in which a shareholder holding at least ten per cent. of the voting rights or his/her close relative - directly or indirectly or based on an agreement - holds more than fifty per cent. of the voting rights or he/she is entitled to elect or withdraw the majority of its executive officers or its members of the Supervisory Board;

  • (iii) a person which holds more than fifty per cent. of the voting rights - directly or indirectly or based on an agreement - in the shareholder holding at least ten per cent. of the voting rights of the Company or which is entitled to elect or withdraw the majority of the execu-tive officers or members of the Supervisory Board of shareholder holding at least ten per cent. of the voting rights of the Company;

  • (iv) a person in which the person set forth in point (iii) - directly or indirectly or based on an agreement - holds more than fifty per cent. of the voting rights or the majority of whose executive officers or members of the Supervisory Board may be elected or withdrawn by the person set forth in point (iii);

  with the exception of transactions of ordinary value within the activities of the Company. The Board of Di-rectors shall prepare a comprehensive annual report on transactions concluded with the persons men-tioned above which also includes the transactions of ordinary value falling within the activities of the Company and it shall submit same to the Supervisory Board.

• (v) The members of the Board of Directors attend the General Meeting of the Company with a right of con-sultation and to make proposals. The Chairman of the Board of Directors or the appointed member thereof must attend the General Meeting and the meetings of the Supervisory Board to which he/she re-ceives an invitation.

The chairman of the Board of Directors convenes and conducts the meetings, appoints the keeper of the minutes from the meeting of the Board of Directors, orders voting and announces its results.

The Board of Directors passes its resolutions with a simple majority of votes. Under extraordinary circumstances, when it is impossible to call for a meeting of the Board of Directors, the chairman of the Board of Directors shall order a written voting. The Rules of Procedure of the Board of Directors contains the applying rules and regula-tions.

The Board of Directors held 5 meetings in 2021 with 6 persons present as an average.

Division of responsibility and duties between the Board of Directors and the Chief Executive Officer / Management

The operating activities of the Company are directed by the Chief Executive Officer. The Chief Executive Officer is personally liable for performing his/her duties within the framework defined by law, the Statutes, and in ac-cordance with the decisions of the Board of Directors and the General Meeting.

The Chief Executive Officer may delegate his authority to the Company's managers and employees in accord-ance with the Rules of Organization and Operation within the limits of the Company's internal regulations by means of defining job descriptions and with general or limited authorizations, but limitations on his scope of au-thority as a member of the Board of Directors shall have no effect with respect to third parties.

The Chief Executive Officer is entitled to make decisions in all affairs not falling within the scope of authority of the General Meeting or the Board of Directors. The Chief Executive Officer concludes a labour contract with the

Company, signed by the chairman of the Board of Directors.

The Chief Executive Officer exercises employer's rights with respect to employees of the Company.

In order to carry out the business of the Company, the Chief Executive Officer concludes contracts and repre-sents the firm before third parties, authorities and courts.

Competence and tasks of the Chief Executive Officer

(a) The Chief Executive Officer shall decide with respect to all issues which do not fall within the exclusive competence of the General Meeting, the Board of Directors or the Chairman of the Board of Directors.

(b) The Board of Directors may transfer any of its competence regarding the daily management to the Chief Executive Officer under the provisions and conditions established by it and the Board of Directors may withdraw or change the totality or a certain part of such competences from time to time, however, such transfer does not affect the liability of the Board of Directors.

(c) The Chief Executive Officer shall conclude agreements for the purpose of performing the Company's tasks and represent the Company towards third parties, before courts and other authorities.

(d) The Chief Executive Officer shall prepare the agenda of the General Meeting and the Board of Directors and he/she shall submit proposals concerning decisions.

(e) The Chief Executive Officer shall execute passed resolutions and decisions, and he/she shall manage the performance of tasks within the scope of activities of the Company.

(f) The Chief Executive Officer shall exercise employer's rights over other employees of the Company. The

Chief Executive Officer can delegate the exercise of employer's rights over employees in accordance with the Organizational and Operational Regulations of the Company.

(g) The Chief Executive Officer can transfer his/her competence to the executives and employees within the framework of the internal administration of the Company in accordance with the Organizational and Opera-tional Regulations based on a general or an ad-hoc decision, by describing the respective scope of activities, however, the limitation of the competence attached to his/her membership of the Board of Directors shall be null and void against third parties.

The Board of Directors may delegate a portion of its authority, with restrictions and conditions determined at its discretion, to the Chief Executive Officer, and it may withdraw or change all or any portion of such authority from time to time, but such delegation shall not affect the liability of the Board of Directors.

Members of the management on 31 December 2021:

Gábor Zsámboki chief executive officer

Dr. István Ignácz chief security officer

Zoltán Fejes chief sales officer

Tamás Karakó chief financial officer

Gábor Péter chief IT officer

Lajos Székelyhidi chief research and development officer

Zoltán Tóth chief technical and production officer

Evaluation and remuneration of the management

The Board of Directors is making a continuous assessment of the management's activity, and makes an addi-tional extensive performance evaluation once a year. The remuneration of managers (Chief Executive Officer) has an established system at the Company. On top of the base salary, managers are entitled to receive bonus if the development of the Company meets the long term targets and targets of the relevant business year. The bonus is linked to the fulfilment of planned sales revenues and planned earnings per share (EPS) and to the fulfilment of most important specific tasks set in advance for the business year.

The Board of Directors is entitled to work out the detailed guidelines of the Management Share Option Pro-gramme according to the decision of the 2009 Annual General Meeting. The members of the management are entitled to the acquisition of the Company's shares in a preferential way within the framework of this Programme.

The Supervisory Board

The Supervisory Board consists of seven members who are elected by the General Meeting for a maximum five-year term. One third of the members of the Supervisory Board is designated by the Factory Council, following a statement of opinion of the trade unions operating at the Company. The General Meeting is obliged to elect these employee members for the period unless statutory grounds for disqualification exist in respect of the nomi-nees.

The members of the Supervisory Board elect the chairman by a simple majority of votes at their first meeting.

The Chairman convenes and conducts the meetings of the Supervisory Board, appoints the person keeping the minutes, orders the voting and announces its results.

The meeting of the Supervisory Board may be convened by any member indicating the reason and purpose thereof if his/her request for convening the meeting has not been fulfilled by the chairman within 8 days.

Tasks and competence of the Supervisory Board

(a) The Supervisory Board may request information from the executive officers or employees in executive positions of the Company and may inspect the books and documents of the Company.

(b) The Supervisory Board shall inspect all important business reports appearing in the agenda of the Gen-eral Meeting and all other submissions concerning the issues falling within the exclusive competence of the General Meeting.