Waberer International : Corporate Governance Report

- Unofficial English translation -

WABERER'S INTERNATIONAL NYILVÁNOSAN MŰKÖDŐ RÉSZVÉNYTÁRSASÁG

CORPORATE GOVERNANCE REPORT

FOR THE PERIOD OF 1 JANUARY 2023 TO 31 DECEMBER 2023

The Board of Directors of WABERER'S INTERNATIONAL Nyilvánosan Működő Részvénytársaság (hereinafter the Company or Waberer's) submits for approval the Corporate Governance Report to the annual General Meeting with the following content based on the Corporate Governance Recommendations (CGR) of the presently effective Budapest Stock Exchange (BSE) and the respective regulations of Act V of 2013 on the Civil Code (Civil Code):

1. Brief introduction of the operations of the Board of Directors, and of the responsibilities and competences between the Board of Directors and the management

The management body of the Company is the Board of Directors, who manages the issues of the Company and the Group, represents the Company vis-à-vis third parties and before courts and other authorities. The Board of Directors is entitled to acquire rights and undertake obligations on behalf of the Company and to determine the business activities of the Company. Members of the Board of Directors shall conduct their activity with due care and diligence as generally expected from persons in such positions, and give priority to the interests of the Company.

The Board of Directors shall consist of at least 3 (three) and maximum 7 (seven) members. The members of Board of Directors shall be elected by the General Meeting for a three years term. The assignment of the members of the Board of Directors, unless otherwise provided by the General Meeting, lasts for a term of three years until 31 May of the third year subsequent to the date of the said General Meeting with the exception, that if the General Meeting in the third year is held prior to 31 May than their assignment lasts until the date thereof. The members of the Board of Directors shall elect a chairman from among themselves. The division of responsibilities and competences among the members of the Board of Directors is specified in detail in the Bylaws of the Board of Directors: (www.waberers.com/en/investors/policies). The Board of Directors establishes its own rules of procedure itself. The presently effective By-laws of the Board of Directors (20 March 2024) can be found on the website of the Company: https://www.waberers.com/file/documents/1/1961/waberers_by_laws_of_the_board_of_directors _2024_03_20.pdf

The Board of Directors may make decisions on all issues and matters concerning the Company and the Group which do not fall within the exclusive competence of the General Meeting. In matters which fall within the exclusive competence of the General Meeting by virtue of law the Board of Directors shall make resolution proposals for the General Meeting.

The responsibilities of the Board of Directors include primarily, but not exclusively, the following:

• supervision of the individual and the consolidated business and financial plans, significant capital investments, acquisitions and divestments of the Company or any Group member;
• submission to the General Meeting for approval the proposal of the Company's annual financial statement and the proposal of the utilization of after tax profits;
• submission to the Annual General Meeting for decision the Company's Corporate Governance Report, continuous observation of the efficiency and effectiveness of the practice of corporate governance;

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- Unofficial English translation -

• report on the management, the financial situation, the business policy and financial and investment plans of the Company, at least once a year to the General Meeting and quarterly to the Supervisory Board;
• arrangements for keeping the books of the Company in accordance with the rules;
• participating in the determination of strategic guidelines and the formation of the corresponding strategy and participation in all kind of strategic cooperation agreements, associations, joint ventures on behalf of the Company or any member of the Group, approval of significant agreements of value over the limit and launching legal cases;
• exercise the shareholder rights with regard to the Material Subsidiaries;
• after discussion with the Supervisory Board, setting corporate objectives and continuous monitoring of company performance, informing the Supervisory Board about the achievement of these objectives;
• ensuring the integrity of financial and accounting reports;
• electing the CEO, the chief officers currently the Chief Financial and Strategic Officer and the Chief Corporate Officer of the Company (together hereinafter: persons holding Key
  Positions), setting targets for them, exercising employer's right over employees holding key positions, developing principles applicable to the remuneration of the management, supervision of the activity of the management and if necessary, taking appropriate steps in line with the Remuneration Policy adopted by the General Meeting;
• management of conflicts of interest issues, approval of related party transactions and adoption of guidelines strengthening the principle of application of standard terms and conditions between independent parties, monitoring the Company's practice in this regard, accepting the Code of Conduct;
• establishment of risk management guidelines and policies, to ensure the continuous assessment of all risk factors, the obtainability of internal control mechanisms and the legal compliance;
• approve sustainable development goals, strategies, objectives, reports and policies to ensure that long-term economic, environmental and social considerations are integrated into the day-to-day operations of the Company and the Group, and establish an ESG Committee to review and update them as necessary, to provide monitoring and support; define a mechanism for nominating members of the Board of Directors;
• determination of a mechanism for the selection of the members of the Board of Directors;
• determination of the principles and basic procedure of the succession of the Company's key management;
• defining guidelines and policies - and monitoring the compliance therewith - for transparency of corporate operations and for disclosure of information on the Company;
• keeping the book of shares of the Company (or authorising a third party service provider to keep the register of shareholders);
• ensuring the communication on an appropriate level and frequency with the shareholders;
• approving the Insider Trading Policy and decide in matters under the Insider Trading Policy.

The Board of Directors shall have a quorum, if more than half of the Members of the Board are present at the meeting. The Board of Directors shall adopt its resolutions by open vote and a simple majority of the present Board members, who are participating in the vote, except when the By-laws impose otherwise. Further rules of the conduct of meetings, powers and adoption of resolutions of the Board of Directors and the procedure of resolving Deadlock Situations are set out in the By-laws of the Board of Directors.

2. Introduction of the members of the Board of Directors and of the structure of the Board

According to the presently effective Articles of Association of the Company and the By-laws of the Board of Directors the conflict of interest rules of the Civil Code has been extended, thus

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- Unofficial English translation -

besides road transport, as the main activity of the Company, the freight forwarding, warehouse logistics and non-life insurance activities are treated as conflict of interest issues as well. In case of main activity conflict of interest the General Meeting, in other conflict of interest situations the Board of Directors is authorized to exempt executive officers.

Considering that there is a two-tier governance system at the Company, the independence of the members of the Board of Directors is not required to be examined.

Members of the Board of Directors in 2023, their independency status and the date of their appointment (the present members' professional CV is available on the website of the Company (https://waberers.com/en/investors/corporate-governance-information/corporate-governance):

On 31 December 2023, the members of the Board of Directors held no shares in the Company.

In 2023 the Board of Directors held 9(nine) ordinary meetings and had no extraordinary meeting. The participation rate detailed below:

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- Unofficial English translation -

The main topics of the meetings of the Board of Directors held in 2023 included the acceptance and quarterly review of the standalone and the consolidated business plan, review of the monthly and other periodical performance and KPI indicators of the Group, building the short- and long term strategies of the Group, action plans pursuant to the business environment changes, decision on the asset management, discussion and approval of trailer acquisition, supervision of the key legal cases, amendment of the financing agreement, supervision on high priority law- cases, acting relating to the issuance of the corporate bond in its place, redefining investment policy, monitoring and managing of the ongoing warehouse development and decision on starting new warehouse investment, acceptance of the Strategic Plan, decision-making on the potential acquisition, decision-making on concluding cooperation agreements with Hungarian market leader companies in case of the relevant Waberer's Group members. The Board of Directors renewed the Employee Ownership Programme for the remuneration and incentives of key employees and adopted the Group's ESG strategy, continuing to prioritise sustainability efforts.

The Board of Directors of the Company may adopt written resolutions between the meetings of the Board of Directors. In 2023 there were 15 (fifteen) resolutions adopted in writing by the Board in the above listed issues.

3. Chief Executive Officer

The work of the Company is organised, led, directed and supervised by the CEO subject to the relevant legislation and the Articles of Association as well as in accordance with the decisions of the General Meeting and the Board of Directors. His scope of authority includes making decisions on all cases that are not referred to the exclusive competence of the General Meeting, the Board of Directors or the Supervisory Board. The CEO establishes the work organisation of the Company, exercises the employer's rights over the employees of the Company, but may delegate this power to the employees of the Company provided by CEO directives.

Conclusion, amendment and termination of the employment of the CEO of the Company falls within the scope of the Board of Directors. The Board of Directors appointed Mr. Zsolt Barna former Head of the Regional Business Unit, as CEO as of 1 September 2021, to this date he holds this position.

Introduction of the management

The following persons belong to the Key Management of the Company and the Group in the business year of 2022:

Zsolt Barna CEO from 1 September 2021 and member of the Board of Directors from 18 April 2023 and from 28 April 2023 chairman of the Board of Directors, (President and CEO). From 2008 to 01 October 2023 Mr. Zsolt Barna was managing director of WSZL Kft. (before 12. 01. 2023: Waberer's-Szemerey Kft.) and head of the regional contract logistics business line.

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- Unofficial English translation -

Barna Erdélyi operational member of the Board of Directors of the Company, from 1 September 2021 Chief Corporate Officer, in the Group, he also holds the positions of Chairman of the Board of Directors of Gránit Biztosító Zrt. (before 15 February 2024: Wáberer Hungária Zrt.) and LINK sp.z.o.o., and other management positions within the Group.

Szabolcs Gábor Tóth Chief Financial and Strategic Officer from 23 June 2020. Within the Group, he was the co-managing director of WSZL Kft, and presently he is a member of the Board of Directors of the affiliates Gránit Biztosító Zrt. (before 15 February 2024: Wáberer Hungária Zrt.) and LINK sp.z.o.o., and other management positions within the Group.;

The curricula vitae of the members of the management employed by the Company are available on the Company website (https://waberers.com/en/investors/corporate-governance-information/corporate-governance).

Relationship between the Board of Directors and the Management:

The members of the Company's Key Management Personnel and the Heads of the Business Unit are permanently invited to attend ordinary and extraordinary meetings of the Board of Directors. The Management reports to the members of the Board of Directors on a monthly basis within the framework of the Meetings of the Board of Directors on the effectiveness of the activities of the Company and the Group, and prepares and forwards other, prompt financial reports to the Board of Directors on a weekly basis. The monthly management report provides information about the monthly and periodic cumulative development of the business operations of the Company and the Group in a uniform, standard structure, presenting primarily the deviation of the effectiveness and key performance indicators from the values for the baseline period and the budget. Main business and other data presented in the monthly management report:

• development of the consolidated profit/loss of the Company and the Group;
• development of the EBITDA and EBIT of the Company and the Group by main business functions and detailed variance analysis of deviations;
• development of the consolidated sales of the Company and the Group;
• the development of the results, key performance and quality indicators of the business lines (mainly the international transportation business and regional contract logistics segment, and the insurance company) and the business units in the newly introduced trade lane business model;
• development of the asset and financial situation and indebtedness of the Company and the Group;
• development of trailer procurement and sale process, and the reasons behind the differences;
• working capital management;
• monitoring work force, headcount shortage in hard-to-fill vacant positions;
• status of business relationships with the most important customers and suppliers;
• current status of priority corporate projects;
• status of the real estate investments and developments;
• presentation of the actions on the potential acquisitions;
• other strategic decisions, action plans.

In the event of significant changes affecting the business operations of the Company and the Group and in the case of projects deviating from the budget Management prepares ad hoc analyses for the Board of Directors.

4. Supervisory Board

The Supervisory Board consist of at least 5 (five) members and its members shall be elected by the General Meeting for a term of 3 (three) years. The Supervisory Board consists of 6 (six)

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- Unofficial English translation -

members until this report from the Annual General Meeting held on 18 April 2023. The members of the Supervisory Board are elected by the General Meeting for a 3 (three) years term. The assignment of the members of the Supervisory Board, unless otherwise provided by the General Meeting, lasts for a term of three years until 31 May of the third year subsequent to the date of the said General Meeting with the exception, that if the Annual General Meeting in the third year is held prior to 31 May than their assignment lasts until the date thereof.

One third of the Supervisory Board shall be delegated by the employees. Employee delegates are nominated by the Works Council from among the employees, taking into account the opinion of the trade unions operating at the Company. Employees of the Company may not become members of the Supervisory Board, unless they are employee delegates. Once elected, the Supervisory Board elects a Chairman from among its members for the period of the Chairman's mandate as a member.

The majority of the members of the Supervisory Board must be independent. A member of the Supervisory Board is considered independent if he or she does not have any legal relationship with the Company other than his or her Supervisory Board membership and the relationship falling within the usual activities of the Company and operations meeting the needs of the member of the Supervisory Board. The majority of the members of the Supervisory Board have no relationship with the Company, its management and its significant shareholders. The Supervisory Board requests that its members confirm their independence annually, prior to the Corporate Governance Report.

The members of the Supervisory Board are obliged to participate in the work of the Supervisory Board in person. The members of the Supervisory Board are independent of the management of the Company and may not be instructed during their activities. The Supervisory Board establishes its rules of procedure itself, which is approved by the General Meeting.

A member of the Supervisory Board may not hold executive position and acquire shareholdings in business associations - other than business shares in public companies limited by shares - which has identical business activity as its main activity as the Company's main activity, unless they have been granted authorization by the General Meeting of the Company. A member and a relative of the member of the Supervisory Board may not enter into any agreement that falls within the scope of the Company's core business under his own name or for his own benefit, save as for usual deeds occurring in the ordinary course of everyday life. The member and the relative of the member of the Board of Directors of the Company may not be elected as member of the Supervisory Board. In case of accepting an executive officer position, the Member shall inform the Supervisory Board within 15 (fifteen) days from the acceptance.

The Supervisory Board supervises the management of the Company in order to protect the interests of the Company. In order to perform this activity, it may have access to the documents, accounting records and books of the Company, may request information from the Board of Directors and the employees of the Company, may inspect the payment account, cash in hand, portfolio of securities, goods in stock and contracts and agreements of the Company, or may have them inspected by an expert. The Supervisory Board is obliged to examine the proposals to the General Meeting and to present its position on such proposals at the General Meeting. The submission to the General Meeting in subject of the Remuneration Policy shall be reviewed by the Supervisory Board in advance. The General Meeting may adopt resolutions on the Financial Statements and on the appropriation of profits after tax only in possession of the written report of the Supervisory Board.

If, according to the Supervisory Board, the activities of the management violate the relevant legislation or the Articles of Association, or are contrary to the resolutions of the General Meeting

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or otherwise infringe the interests of the Company, the Supervisory Board is entitled to convene the General Meeting in order to discuss this issue and to adopt the required resolutions.

The Supervisory Board adopts its resolutions by a simple majority of votes. The detailed rules for the operation of the Supervisory Board are set out in the Rules of Procedure of the Supervisory Board (https://waberers.com/files/document/document/1511/WABERERS_RoP_Supervisory%20Board_ EN_20220408.pdf).

Professional curricula vitae of the present members of the Supervisory Board are available on the

Company website (https://waberers.com/en/investors/corporate-governance-information/corporate-governance):

Present members of the Supervisory Board, their independency status, the dates of their appointment:

As of 31 December 2023, the members of the Supervisory Board held no shares in the Company.

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- Unofficial English translation -

The topics of the Supervisory Board meetings held in 2023 included the approval of the individual and consolidated financial statements for the previous financial year, the approval of the internal control plan and the review of the reports, the review of the quarterly management reports of the Board of Directors, the discussion of certain risk factors, the opinion on the resolutions of the Annual General Meeting and the review of the quarterly financial results.

In the 2023 financial year, the Supervisory Board held 4 (four) meetings with the below detailed participation rate and adopted all resolutions with 100% support. The Supervisory Board has adopted 1 (one) resolution without holding a meeting in 2023 on the approval of the Invitation to the Annual General Meeting held on 18 April 2023.

The General Meeting elects an Audit Committee with 3 (three) members from the members of the Supervisory Board qualifying as independent for the same period as that of the Supervisory Board membership of the individual members.

The Audit Committee assists the Supervisory Board in the control of the financial reporting system, in the election of the Auditor and in co-operation with the auditor. The Audit Committee is entitled to use external adviser(s), as required, for performing its tasks. The Audit Committee supervises the efficiency of risk management, the operation of the system of internal controls, the election of the Auditor and ensure its independence.

The members of the Audit Committee, their status and their appointment date:

- Unofficial English translation -

The professional curriculum vitae of the current members are available on the Company website: The professional curriculum vitae of the current members are available on the Company website: https://waberers.com/en/investors/corporate-governance-information/corporate-governance

The main topics of the committee meetings held in 2023 included the discussion of the quarterly and annual financial report for year 2022, cooperation with the Auditor, review of independency and the other advisory activities of the Auditor besides its audit activity, monitoring risk factors, discussion of certain outstanding risk factors, monitoring the compliance program, discussion and review of certain outstanding risk factors. In the operation of the Audit Committee there has not been any case when the Board of Directors would have decided contrary to the proposal of the Audit Committee in an issue in the financial year of 2023.

In the 2023 financial year, the Audit Committee held 4 (four) meetings - occasionally as a joint meeting with the Supervisory Board - with the below detailed participation rate and adopted all resolutions with 100% support.

6. Nomination and Remuneration Committee

The Nomination and Remuneration Committee shall consist of at least two (2) members each appointed by the Board of Directors, according to the entitle of the 6.11 Section of the Company's Articles of Association, from among the independent members of the Board of Directors and of the Supervisory Board. The definite time of the mandate of the members of the Committee is equivalent with the membership of the incorporate bodies concerned. The Rules of Procedure of

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the Nomination and Remuneration Committee shall be approved by the Board of Directors of the Company.

After a temporary break, the Nomination and Remuneration Committee was re-established, which is an advisory body of the Company's Board of Directors. The purpose of the operation of the Committee is assistance for the Board of Directors with its recommendations on the nomination of the key employees of the Company and the formulation of the Company's remuneration policies. The Committee participates in the evaluation on the performance of the Key Executive Management and the preparation of the Waberer's Group's Remuneration Policy, and Committee present its opinion on the Company's Remuneration Report.

Presently this body consists with 2 (two) members and these members was elected by the Board of Directors with its Resolution No. 7/2023.(05.23.).

The professional curriculum vitae of the current members are available on the Company website: https://waberers.com/en/investors/corporate-governance-information/corporate-governance)

The members of the Nomination and Remuneration Committee, their status and their appointment date:

In 2023 from the re-establishment of the Nomination and Remuneration Committee, its member took their decisions without holding a meeting. Thus, the Nomination and Remuneration Committee did not hold a meeting with personal appearance of the members.

The Nomination and Remuneration Committee without holding a meeting unanimously adopted the resolution on the proposal to the Board of Directors on the approval of the bonus policy for the key employees of the Group for the business year 2023 by and unanimously adopted the resolution on the proposal to the Board of Directors on the approval the remuneration policy in respect of the key employees of the Group prepared in the framework of the Employee Share Ownership Program for the business year 2024-2025.

7. Criteria considered when evaluating the work of the Board of Directors, the Supervisory Board, the management and the individual members thereof

Members of the Board of Directors and the Supervisory Board evaluate their work every year by completing a self-assessment form. The Board of Directors shall evaluate the performance of the individual members of the committees primary on the basis of the answers given in the self- assessment forms, the evaluation of competences of each member and assessment of how well the respective corporate body have fulfilled their task.

The person holding Key Positions set out in the By-Laws of the Board of Directors are evaluated and the principles of their remuneration are defined by the Board of Directors of the Company.

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