Ad-hoc | 29 June 2012 07:34
DGAP-Geoinfo Ad-hoc-Service: Zwack Unicum Nyrt. Miscellaneous/Miscellaneous 29 Jun 2012 Ad-hoc announcement according to Tpt. 55.§ of the Hungarian Capital market Act., transmitted by DGAP-Geoinfo. The issuer is solely responsible for the content of this announcement. REPORT RELATING TO THE CORPORATE GOVERNANCE ON THE BASIS OF THE CORPORATE GOVERNANCE RECOMMENDATIONS (THE 'RECOMMENDATIONS') PUBLISHED BY THE BUDAPEST STOCK EXCHANGE The Supervisory Board of Zwack Unicum Nyrt. (the 'Company') by its resolution dated June 28, 2012 approved the following report made by the Board of Directors in the name of the Company. The Annual General Meeting of the Company held on June 28, 2012 by its resolution no. 5/28.06.2012 also approved the following report. DISCLOSURE ON CORPORATE GOVERNANCE 1. The Board of Directors of the Company The Board of Directors of the Company actually consists of seven (7) members. The Chairman of the Board of Directors is Mr. Sándor Zwack, the Deputy Chairman is Dr. Rudolf Kobatsch. The list of the members of the Board of Directors, their presentation and the data related to their independency status are available at the homepage of the Company (www.zwack.hu). The members of the Board of Directors shall be elected by the Shareholders Meeting in accordance with the proposal of the Shareholders for a period of maximum four years. The Chairman and the Vice-Chairman of the Board of Directors are elected by and from among the members of the Board of Directors for a period of four (4) years. If the Chairman of the Board of Directors would be unable to execute his function, the responsibility to act as the Chairman of the Board of Directors shall be automatically transferred to the Vice-Chairman of the Board of Directors. The Chairman of the Board of Directors is obliged to call the meetings of the Board of Directors and to organize and direct the continuous activities of the work organization of the Company. The Board of Directors shall hold ordinary meetings at least once every quarter. The meeting of the Board of Directors is convoked by the Chairman of the Board of Directors and in case of unavailability, by the Vice-Chairman of the Board of Directors. The Chairman of the Board of Directors is also obliged to convoke the meeting of the Board of Directors if so required by two (2) members jointly with a statement regarding the reason and purpose of said request. With the exception of a closed meeting, the members of the Supervisory Board and also the persons invited by the Board of Directors may take part in the meeting of the Board of Directors as consultants. Upon the request of any director, the meeting shall be a closed meeting. The Board of Directors has a quorum if the majority of the board members are present. The propositions and resolutions of the Board of Directors shall be brought with a simple majority of the votes of the board members present. In case of a tied-vote, the vote of the Chairman of the meeting shall be the deciding vote. Minutes have to be kept regarding the meeting of the Board of Directors, which shall contain a list of those present, the deliberations regarding the issues of the agenda, the results of the votes and the decisions. The tasks and competences of the Board of Directors are defined by the applicable legal regulations, the Statutes of the Company (available at www.zwack.hu) and its Rules of Operation, accepted by itself. The Board of Directors, during the past 2011-2012 business year, had eight (8) meetings, with an average attendance of 91%. Taking into consideration that the two main shareholders of the Company having 76%+1 vote have the right to nominate the members of the Board of Directors pursuant to their Shareholder's Agreement, the Company have not elaborated any evaluation system so far. Description of the division of responsibility and duties between the Managing Body and the executive management, the management of the Company The Board of Directors shall appoint a General Manager from among the directors or the employees, for such period of time and under such terms as it deems fit. The Board of Directors may revoke such appointment at any time. The General Manager, within his scope of employment, shall be responsible for the administration of the Work Organization of the Company, and shall exercise the employer's rights in respect of the employees of the Company. The General Manager shall be entitled to delegate his power to exercise the employer's rights in respect of employees of a given department to the employee in charge of that department, except for the employer's rights in respect of employees in executive positions. Employees in executive positions are those who are designated as such on the basis of the Company's Rules of Organization and Operation or by the General Manager at the time of concluding the employment contract. The General Manager shall have the powers to decide in matters relating to the day-to-day operations of the Company. The competence of the General Manager shall be determined by the Rules of Operation of the Company approved by the Board of Directors. The list of the members of the management and their presentation are available at the homepage of the Company (www.zwack.hu). Evaluation of the work of the management, remuneration (Remuneration statement) The Board of Directors continuously appraises the work of the management and prepares an general appraisal on a yearly basis. The scope of the remuneration of the General Manager (CEO) falls within the competence of the Board of Directors and the scope of the remuneration of the top managers (i.e. members of the management) is within the competence of the General Manager. However, the following principles apply universally: Elements of the remuneration system: * Basic salary: The basic salary essentially depends on the importance of the position fulfilled - established on the basis of an analysis of the related tasks and obligations - and may be influenced by the market. * Bonus: The bonus is defined as a part of the annual basic salary established as a percentage thereof. The amount of the bonus is maximized and the condition of its payment is the realization of defined objectives. The most important part of the bonus depends on the realization of the planned results; the remaining part thereof depends on the realization of the 2 or 3 objectives relating to the managed field. * Benefits provided in the cafeteria system, equaling to one month's basic salary. The basic salary must represent at least 75% of the overall monetary salary package. * Other benefits: use of car including full personal use; life insurance; mobile phone including full personal use; medical and sport services. Furthermore, during year 2007, the Company elaborated a share incentive system for three key managers of the Company (Mr. Frank Odzuck, General Manager; Mr. Tibor Dörnyei, CFO and Deputy General Manager and Mr. Csaba Belovai, Commercial Director) replacing the former bonus system. In the framework of the share incentive system, the involved managers acquired 35.000 registered redeemable liquidation preference shares, each having a nominal value of HUF 1,000, without voting rights, but entitling the respective shareholders to dividend. According to the Company's long established practice, the members of the Board of Directors receive an annual consideration (honoraria) in consideration of their performance, the amount of which is defined in a separate resolution of the General Meeting each year. The Supervisory Board The Supervisory Board of the Company actually consists of six (6) members. The Chairman of the Supervisory Board is Dr. Hubertine Underberg-Ruder, its Deputy Chairman is Mr. Gerd Peskes. The list of the members of the Supervisory Board, their presentation and the data related to their independency status are available at the homepage of the Company (www.zwack.hu). Pursuant to the Statutes, the Company shall establish a Supervisory Board consisting of at least six (6) members and at the most twelve (12) members. The management of the Company entered into an agreement with the workers' council pursuant to which the employees waived their right to participate in the operation of the Supervisory Board. The members of the Supervisory Board shall be elected by the Shareholders Meeting for a period of maximum four (4) years. The Supervisory Board shall hold a meeting at least once every six months, but at any time upon the request of the Shareholders Meeting. The meeting of the Supervisory Board shall be convoked by its Chairman, who shall also chair the meeting. The Chairman of the Supervisory Board shall be obliged to also call the meeting of the Supervisory Board, if so requested in writing by a member of the Supervisory Board who provides the reason and objective of the meeting. If the Chairman fails to comply with such request, the member shall have the right to convene the meeting himself. At the meeting of the Supervisory Board the Auditor may also take part with a right of consultation. The Supervisory Board shall have a quorum if two thirds, but at least three , of the members of the Supervisory Board are present. The decisions of the Supervisory Board are brought with a simple majority of the members of the Supervisory Board present. Minutes have to be kept regarding the meeting of the Supervisory Board, which shall contain the list of those present, the results of the votes and the decisions. The Supervisory Board, during the past 2011-2012 business year, had three (3) meetings, with an average attendance of 78%. Taking into consideration that the two main shareholders of the Company having 76%+1 vote have the right to nominate the members of the Supervisory Board pursuant to their Shareholder's Agreement, the Company has not elaborated any evaluation system so far. The tasks and competences of the Supervisory Board are defined by the applicable legal regulations, the Statutes of the Company (available at www.zwack.hu) and its Rules of Operation, accepted by the General Meeting. The Audit Board The Company established an Audit Board consisting of three (3) members, elected by the Shareholder's Meeting from the independent members of the Supervisory Board. The Chairman of the Audit Board is Mr. Gerd Peskes. The list of the members of the Audit Board and their presentation and the data related to their independency status are available at the homepage of the Company (www.zwack.hu). The Audit Board, during the past 2011-2012 business year, had three (3) meetings, with an average attendance of 100%. The tasks and competences of the Audit Board are defined by the applicable legal regulations, the Statutes of the Company (available at www.zwack.hu). Taking into consideration (i) the shareholding structure of the Company, (ii) the system of the nomination of titleholders; the facts that (iii) the Board of Directors prepared the guidelines for the remuneration and evaluation of the management; and (iv) the members of the Board of Directors receive an annual honoraria for the performance of their obligation to be approved by the AGM, there is neither nomination, nor remuneration committee at the Company. The tasks of the nomination and the remuneration committee are performed by the Board of Directors. The Auditor The Shareholders Meeting shall appoint a statutory Auditor for a period of one (1) year, who must be a registered auditor employed or recommended by an internationally recognized auditing firm. The tasks and competences of the statutory Auditor are defined by the applicable legal regulations, the Statutes of the Company (available at www.zwack.hu). The Auditor of the Company did not receive other assignment than the audit of the annual report of the Company. The internal control system As of the 2008/2009 business year, the Company established a position of internal controller. However, the size of the Company does not justify the operation of a separate internal control department, thus the position is held by an internal controller who is already an employee of the Company and who directly reports to the General Manager. The Audit Committee reviewed the result of the different administrative supervisions held at the Company and analyzed - together with the management - the risks related to Zwack Unicum Nyrt. as well as the study prepared by an independent advisor. Presentation of the company's disclosure policy, and its policy on trading by insiders The Company Documents are in compliance with the provisions of the Companies Act, Act CXX of 2001 on the capital market (the 'Capital Market Act'), the Budapest Stock Exchange and the Central Depository and Clearing House respectively, and the Company is disclosing information pursuant to the above acts and regulations. Consequently, the Company publishes quarterly quick reports, annual reports following the closing of the financial year and provides extraordinary reporting if the Company becomes aware of any information on any past or ongoing change that could directly or indirectly affect the value of or the yield on the securities, or could be significant for the market players in making their investment decisions. Furthermore, the Shareholders Bureau of the Company keeps continuous contact with the investors. The Company publishes its notifications on its own homepage (www.zwack.hu), on the homepage of the Budapest Stock Exchange (www.bet.hu) and on the homepage www.kozzetetelek.hu. The Company - in the General Manager's Instruction no. 7/2008 - established its policy on insider tradings, pursuant to the applicable rules of the Capital Market Act. According to the instruction, the Company considers as insider - beside the persons defined as insiders by the Capital Market Act - any and all leaders (higherly ranked than a head of department) and any and all employees of the accounting and controlling departments. The insiders cannot sell and/or buy Zwack shares from the turning date of the balance (March 31) and to the date of the publication of the annual report, and during the 15 days periods preceding the publication of the quarterly flash reports and/or within a three-day period preceding the publication of contracting subject to the obligation of extraordinary disclosure of information, as the case may be. If the insider purchases/sells Zwack shares outside of the above period, the Company informs PSZÁF and publishes such information as prescribed by the Act within two days as of the transaction. The information shall contain the nomination of the shares, its rate, the nature of the transaction (purchase or sale), the place and date of the transaction and the name of the investment service provider. The Company holds a register about the insiders, as prescribed by the Act. A brief presentation of rules on exercising shareholder's rights and on the conducting of the general meeting Every registered common share having a nominal value of 1,000 HUF (one thousand Hungarian Forint) shall entitle its holder to one vote at the General Meeting. Shareholders may exercise their rights at the General Meeting either in person or through an authorized representative pursuant to a voting card or an equivalent official certification confirming the right to vote (hereinafter together: 'Voting Card') to be issued by the Board of Directors. In accordance with Section 221 of the Companies Act, the proxy empowering its holder to representation shall be incorporated into a public legal document or a fully evidencing private deed (as described in Section 196 of the Civil Procedure Code), and shall be submitted prior to obtaining the certification entitling the certificate holder to the receipt of the Voting Card. Participating and voting at the AGM shall be reserved to the shareholders duly entered into the Company's Share Register the latest 2 (two) working day before the AGM. Certification of ownership is not required for the exercise of shareholders' rights; the entitlement is verified by way of the identification procedure prescribed in the act on securities and in rules of procedures of the central depository (KELER Zrt.) (Section 297.§ (2) of the Company Act). The registration of the shareholder into the Share Register is the obligation of investment service firms. The registration of the ownership can be initiated through the respective investment service firm within the deadline set forth therefore. Shareholders' rights at the General Meeting may be exercised by the person whose name is contained in the Share Register at 6 PM (Budapest time) on the second business day before the first day of the Shareholders' Meeting. (Section 304(3) of the Company Act). In lack of a quorum, the reconvened General Meeting shall have a quorum irrespective of the actual number of shareholders present. The detailed rules on exercising shareholder's rights and on the conducting of the General Meeting are set forth by the Statutes of the Company available at the homepage of the Company (www.zwack.hu). __________________________________ CORPORATE GOVERNANCE DECLARATION ON COMPLIANCE WITH THE CORPORATE GOVERNANCE RECOMMENDATIONS A 1.1.1 The Managing Body ensured that shareholders received access to information in time to enable them to exercise their rights. Yes (Complies) A 1.1.2 The company applies the 'one share - one vote' principle. No The Company has 35.000 registered redeemable liquidation preference shares, each having a nominal value of HUF 1,000, without voting rights. With respect to its common shares, the Company applies the 'one share - one vote' principle. A 1.2.8 The company ensures that shareholders must meet the same requirements in order to attend at the general meeting. Yes (Complies) A 1.2.9 Items on the general meeting agenda only include subjects which are correctly detailed and summarized clearly and unambiguously. Yes (Complies) The proposals included the suggestions of the Supervisory Board and a detailed explanation of the effects of the decision. Yes (Complies) A 1.2.10 Shareholders' comments on and supplements to the items on the agenda were published at least two days prior to the general meeting. No No such comments or supplements were made so far. A 1.3.8 Comments on the items of the agenda were made available to shareholders simultaneously with registration at the latest. No No such comments or supplements were made so far. Written comments made on the items on the agenda were published two working days prior to the general meeting. No No such comments or supplements were made so far. A 1.3.10 The election and dismissal of executives took place individually and by separate resolutions. Yes (Complies) A 2.1.1 The responsibilities of the Managing Body include those laid out in 2.1.1. Yes (Complies) A 2.3.1 The Managing Body held meetings regularly, at times designated in advance. Yes (Complies) The Supervisory Board held meetings regularly, at times designated in advance. Yes (Complies) The rules of procedure of the Managing Body provide for unscheduled meetings and decision-making through electronic communications channels. No The rules of procedure of the Board of Directors provide for unscheduled meetings, but does not actually enable decision-making through electronic communications channels The rules of procedure of the Supervisory Board provide for unscheduled meetings and decision-making through electronic communications channels. No The rules of procedure of the Supervisory Board provide for unscheduled meetings, but does not actually enable and decision-making through electronic communications channels. Section 14.5 of the Statutes of the Company provides the possibility that these rules enable decision-making through electronic communications channels. A 2.5.1 The Management Board of the company has a sufficient number of independent members to ensure the impartiality of the board. Yes (Complies) A 2.5.4 At regular intervals (in connection with the CG Report) the Managing Body requested a confirmation of their independent status from those members considered independent. Yes (Complies) A 2.5.5 At regular intervals (in connection with the CG Report) the Supervisory Board requested a confirmation of their independent status from those members considered independent. Yes (Complies) A 2.5.7 The company disclosed on its website the guidelines on the independence of the Managing Body and the Supervisory Board, as well as the criteria applied for assessing independence. No Taking into consideration its shareholding structure, the Company considers the fulfillment of the independence criteria set forth in the Company Act as satisfying. A 2.6.1 Members of the Managing Body informed the Managing Body (Supervisory Board/Audit Committee) if they (or any other person in a close relationship to them) had a significant personal stake in a transaction of the company (or the company's subsidiary). No No such transactions were made. A 2.6.2 Transactions between board and executive management members (and persons in close relationship to them) and the company (or its subsidiary) were conducted according to general rules of practice of the company, but with stricter transparency rules in place. No Such transactions were concluded according to general rules of practice of the company, with the general transparency rules. Transactions which according to 2.6.2, fall outside the normal course of the company's business, and their terms and conditions were approved by the Supervisory Board (Audit Committee). No No such transactions were made. A 2.6.3 Board members informed the Supervisory Board/Audit Committee if they received an offer of Board membership or an offer of an executive management position in a company which is not part of the company group. Yes (Complies) A 2.6.4 The Managing Body established its guidelines on information flow within the company and the handling of insider information, and monitored compliance with those guidelines. Yes (Complies) The Managing Body established its guidelines regarding insiders' trading in securities and monitored compliance with those guidelines. Yes (Complies) A 2.7.1 The Managing Body formulated remuneration guidelines regarding the evaluation and remuneration of the work of the Managing Body, the Supervisory Board and the executive management. Yes (Complies) The Supervisory Board formed an opinion on the remuneration guidelines. Yes (Complies) The guidelines regarding the remuneration for the Managing Body and the Supervisory Board and the changes in those guidelines were approved by the general meeting, as a separate item on the agenda. Yes (Complies) A 2.7.2. The Managing Body prepared an evaluation of the work it carried out in the given business year. The Supervisory Board prepared an evaluation of the work it carried out in the given business year. Yes (Complies) A 2.7.3 It is the responsibility of the Managing Body to monitor the performance of and determine the remuneration for the executive management. Yes (Complies) The frameworks of benefits due to members of the executive management that do not represent normal practice, and the changes in those benefits were approved by the general meeting as a separate agenda item. No No such benefits were accorded. A 2.7.4 The structure of share-incentive schemes were approved by the general meeting. Yes (Complies) Prior to the decision by the general meeting on share-incentive schemes, shareholders received detailed information (at least according to those contained in 2.7.4). Yes (Complies) A 2.7.7 The Remuneration Statement was prepared by the company and submitted to the general meeting. Yes (Complies) The Remuneration Statement includes information about the remuneration of individual members of the Managing Body, the Supervisory Board, and the executive management. No The remuneration of the members of the Board of Directors and the Supervisory Board is decided by the General Meeting of the Company and is included in the Remuneration Statement (See also section A 2.7). The consolidated amount of the remuneration of the management is included in the annual report and information concerning other benefits of the management can be found on the homepage of the Company (www.zwack.hu). A 2.8.1 The Managing Body or the committee operated by it is responsible for monitoring and controlling the company's entire risk management. Yes (Complies) The Managing Body requests information on the efficiency of risk management procedures at regular intervals. Yes (Complies) The Managing Body took the necessary steps to identify the major risk areas. Yes (Complies) A 2.8.3 The Managing Body formulated the principles regarding the system of internal controls. No The Board of Directors delegated this task to the Audit Committee. Furthermore, the Board of Directors continuously deals with the issue of risk management but, the disclosure of detailed information would cause business disadvantages to the Company. In the annual report, the Board of Directors advises the shareholders in connection with the important risk factors influencing the operation of the Company. The system of internal controls established by the executive management guarantees the management of risks affecting the activities of the company, and the achievement of the company's performance and profit targets. Yes (Complies) A 2.8.4 When developing the system of internal controls, the Managing Body took into consideration the viewpoints included in 2.8.4 Yes (Complies) A 2.8.5 It is the duty and responsibility of the executive management to develop and maintain the system of internal controls. Yes (Complies) A 2.8.6 The company created an independent Internal Audit function which reports to the Audit Committee. Yes The audit committee reviewed the result of the different administrative supervisions held at the Company and analyzed - together with the management - the risks related to Zwack Unicum Nyrt. During the past years, the Board of Directors have prepared, by independent advisors, studies evaluating the operational risks of the Company and risks relating to its information systems. Furthermore, as of the 2008/2009 business year, the CEO established a function of internal controller. Although the size of the Company does not justify the operation of a separate internal control department, the position is held by an internal controller who is already an employee of the Company and who also reports to the CEO. The audit committee approved the internal audit plan and the internal controller reports about the outcome of the controls to the audit committee. The Internal Audit reported at least once to the Audit Committee on the operation of risk management, internal control mechanisms and corporate governance functions. Yes (Complies) A 2.8.7 The internal audit activity is carried out by the Internal Audit function based on authorisation from the Audit Committee. Yes (Complies) As an organisation, the Internal Audit function is independent from the executive management. No Please see section A 2.8.6 above. A 2.8.8 The Internal Audit schedule was approved by the Managing Body (Supervisory Board) based on the recommendation of the Audit Committee. Yes (Complies) A 2.8.9 The Managing Body prepared its report for shareholders on the operation of internal controls. Yes (Complies) A 2.8.10 The Managing Body developed its procedures regarding the receipt, processing of reports on the operation of internal controls, and the preparation of its own report. No Please see section A 2.8.6 above. A 2.8.11 The Managing Body identified the most important deficiencies or flow in the system of internal controls, and reviewed and re-evaluated the relevant activities. Yes (Complies) A 2.9.2 The Managing Body, the Supervisory Board and the Audit Committee were notified in all cases when an assignment given to the auditor may have resulted in significant additional expense, caused a conflict of interest, or affected normal business practices significantly in any other way. No With the exception of the one time IFRS education, the business entity performing the statutory audit of the Company did not receive other assignment than the audit of the annual report of the Company pursuant to Hungarian accounting standards and the international accounting standards (IFRS). A 2.9.3 The Managing Body informed the Supervisory Board of any assignment given to the external auditor or an external advisor in connection with any event which held significant bearing on the operations of the company. No Please see section A 2.9.2 above. The Managing Body pre-determined in a resolution what circumstances constitute 'significant bearing'. No Please see section A 2.9.2 above. A 3.1.6 On its website, the company disclosed duties delegated to the Audit Committee, the Nomination Committee and the Remuneration Committee, as well as the committees' targets, rules of procedure, composition (indicating the name, brief biography and the date of appointment of members). No The Company published on June 2, 2008 on its website, duties delegated to the Audit Committee, as well as the committees' targets, rules of procedure, composition (indicating the name, brief biography and the date of appointment of members). No other committees are operating at the Company. The tasks of the nomination and the remuneration committee are performed by the Board of Directors. A 3.2.1 The Audit Committee monitored the efficiency of risk management, the operation of internal controls, and the activity of the Internal Audit. Yes (Complies) A 3.2.3 The Audit Committee received accurate and detailed information on the work schedule of the Internal Auditor and the independent auditor, and received the auditor's report on problems discovered during the audit. Yes (Complies) A 3.2.4 The Audit Committee requested the new candidate for the position of auditor to submit the disclosure statement according to 3.2.4. No The same entity performs auditing activities for long time which has no other relationship with the Company, the Board of Directors, the Supervisory Board and the management. A 3.3.1 There is a Nomination Committee operating at the company. No The two main shareholders of the Company having 76% + 1 votes concluded a shareholders agreement regulating the nomination of titleholders, thus such committee is not necessary. The tasks of the nomination and the remuneration committee are performed by the Board of Directors. A 3.3.2 The Nomination Committee provided for the preparation of personnel changes. No Please see section A 3.3.1 above. The Nomination Committee reviewed the procedures regarding the election and appointment of members of the executive management. No Please see section A 3.3.1 above. The Nomination Committee evaluated the activity of board and executive management members. No Please see section A 3.3.1 above. The Nomination Committee examined all the proposals regarding the nomination of board members which were submitted by shareholders or the Managing Body. No Please see section A 3.3.1 above. A 3.4.1 There is a Remuneration Committee operating at the company. No The tasks of the nomination and the remuneration committee are performed by the Board of Directors (please see in the Remuneration statement, included in the first part of this Report). A 3.4.2 The Remuneration Committee made a proposal for the system of remuneration for the boards and the executive management (individual levels and the structure of remuneration), and carries out its monitoring No Please see section 3.4.1 above. A 3.4.3 The remuneration of the executive management was approved by the Managing Body based on the recommendation of the Remuneration Committee. No Please see section 3.4.1 above. The remuneration of the Managing Body was approved by the general meeting based on the recommendation of the Remuneration Committee No Please see section 3.4.1 above. The Remuneration Committee also monitored the share option, cost reimbursement and other benefits in the remuneration system. No Please see section 3.4.1 above. A 3.4.4 The Remuneration Committee made proposals regarding remuneration guidelines and the remuneration of individual persons. No Please see section 3.4.1 above. The Remuneration Committee reviewed the terms and conditions of contracts concluded with the members of the executive management. No Please see section 3.4.1 above. The Remuneration Committee ascertained whether the company fulfilled its disclosure obligations regarding remuneration issues. No Please see section 3.4.1 above. A 3.4.7 The majority of the members of the Remuneration Committee are independent. No Please see section 3.4.1 above. A 3.5.1 The Managing Body disclosed its reasons for combining the Remuneration and Nomination Committees. No Please see sections 3.3.1 and 3.4.1 above. A 3.5.2 The Managing Body carried out the duties of the Remuneration and Nomination Committees and disclosed its reasons for doing so. No Please see sections 3.3.1 and 3.4.1 above. A 4.1.1 In its disclosure guidelines, the Managing Body established those principles and procedures which ensure that all relevant information about the operations of the company and circumstances influencing its share price are disclosed and made available accurately, in a timely fashion and in full. Yes (Complies) A 4.1.2 The company ensured in its disclosure activities that all shareholders and market participants were treated equally. Yes (Complies) A 4.1.3 The company's disclosure guidelines include the procedures governing electronic, on-line disclosure. Yes (Complies) The company develops its website taking into consideration disclosure guidelines and the provision of information to investors. Yes (Complies) A 4.1.4 The Managing Body assessed the efficiency of disclosure processes. Yes (Complies) A 4.1.5 The company published its corporate events calendar on its website. Yes (Complies) A 4.1.6 In the annual report and on the website of the company, the public was informed about the company's corporate strategy, its main business activities, business ethics and its policies regarding other stakeholders. Yes (Complies) A 4.1.8 In the annual report the Managing Body disclosed the character and size of any other assignments given by the company or its subsidiaries to the auditing firm responsible for auditing the financial statements. Yes (Complies) A 4.1.9 In the annual report and on the website the company discloses information on the professional career of the members of the Managing Body, the Supervisory Board and the executive management. No The above information is only disclosed on the website of the Company. A 4.1.10 The company provided information on the internal organisation and operation of the Managing Body and the Supervisory Board and on the criteria considered when evaluating the work of the Managing Body, the executive management and the individual members thereof. Yes (Complies) A 4.1.11 In the annual report and in the Remuneration Statement on the company's website, the company informed the public about the applied remuneration guidelines, including the remuneration and fees provided for members of the Managing Body, the Supervisory Board and the executive management. No The above information is only disclosed on the website of the Company. Please also see sections A 2.7 and A 3.4 above. A 4.1.12 The Managing Body disclosed its risk management guidelines, including the system of internal controls, the applied risk management principles and basic rules, as well as information about major risks. No Please see section A 2.8.3 above. A 4.1.13 In order to provide market participants with information, the company publishes its report on corporate governance at the same time that it publishes its annual report. Yes (Complies) A 4.1.14 The company discloses its guidelines governing insiders' trading in the company's securities on its website. Yes (Complies) The company published in the annual report and on its website ownership in the company's securities held by the members of the Managing Body, the Supervisory Board and the executive management, as well as any interests held in share-incentive schemes. Yes (Complies) A 4.1.15 In the annual report and on its website, the company disclosed any relationship between members of the Managing Body and the executive management with a third party, which might have an influence on the operations of the company. No One part of the related information are included into the annual report (e.g. transactions with affiliates), the another part is disclosed at the homepage of the Company (other positions of board members). Level of compliance with the Suggestions J 1.1.3 The company has an investor relations department. Yes J 1.2.1 The company published on its website the summary document regarding the conducting of the general meeting and the exercise of shareholders' rights to vote (including voting via proxy) Yes J 1.2.2 The company's articles of association are available on the company's website. Yes J 1.2.3 The company disclosed on its website information according to 1.2.3 (on the record date of corporate events). Yes J 1.2.4 Information and documents according to 1.2.4 regarding general meetings (invitations, proposals, draft resolutions, resolutions, minutes) were published on the company's website. Yes J 1.2.5 The general meeting of the company was held in a way that ensured the greatest possible shareholder participation. Yes J 1.2.6 Additions to the agenda were published within 5 days of receipt, in the same manner as the publication of the original invitation for the general meeting. Yes J 1.2.7 The voting procedure applied by the company ensured unambiguous, clear and fast decision-making by shareholders. Yes J 1.2.11 At the shareholders' request, the company also provided information on the general meeting electronically. Yes J 1.3.1 The identity of the chairman of the general meeting was approved by the company's general meeting prior to the discussion of the items on the agenda. Yes J 1.3.2 The Managing Body and the Supervisory Board were represented at the general meeting. Yes J 1.3.3 The company's articles of association render possible that at the initiation of the chairman of the Managing Body or the shareholders of the company, a third party be invited to the company's general meeting and be granted the right of participation in the discussion of the relevant items on the agenda. No J 1.3.4 The company did not prevent shareholders attending the general meeting from exercising their rights to request information, make comments and proposals, and did not set any pre-requisites to do so. Yes J 1.3.5 The company published on its website within three days its answers to those questions which it was unable to answer satisfactorily at the general meeting. Where the company declined to give an answer it published its reasons for doing so. Yes J 1.3.6 The chairman of the general meeting and the company ensured that in answering the questions raised at the general meeting, national laws and regulations of the Stock Exchange pertaining to disclosure were complied with. Yes J 1.3.7 The company published a press release and held a press conference on the decisions passed at the general meeting Yes J 1.3.11 The company's general meeting decided on the different amendments of the articles of association in separate resolutions No J 1.3.12 The minutes of the general meeting containing the resolutions, the presentation of draft resolutions, as well as the most important questions and answers regarding the draft resolutions were published by the company within 30 days of the general meeting. Yes J 1.4.1 The dividend was paid within 10 days to those shareholders who had provided all the necessary information and documentation. Yes J 1.4.2 The company disclosed its policy regarding anti-takeover devices. No J 2.1.2 The rules of procedure define the composition of the Managing Body and all procedures and protocols for the preparation and holding of meetings, the drafting of resolutions and other related matters. Yes J 2.2.1 The rules of procedure and the work schedule of the Supervisory Board gives a detailed description of its operation and duties, as well as procedures and processes which the Supervisory Board followed. Yes J 2.3.2 Board members had access to the proposals of a given meeting at least five days prior to the board meeting. Yes J 2.3.3 The rules of procedure regulate the regular or occasional participation at board meetings of persons who are not members of the boards. Yes J 2.4.1 The election of the members of the Managing Body took place in a transparent way, information on candidates was made public at least five days prior to the general meeting. Yes J 2.4.2 The composition of boards and the number of members complies with the principles specified in 2.4.2 Yes J 2.4.3 Newly elected, non-executive board members were able to familiarize themselves with the structure and operations of the company, as well as their duties as board members through a tailored induction programme. Yes J 2.5.2 The separation of the responsibilities of the Chairman of the Managing Body from those of the Chief Executive Officer has been outlined in the basic documents of the company. Yes J 2.5.3 The company has published a statement about the means it uses to ensure that the Managing Body gives an objective assessment of the executive management's work where the functions of Chairman and CEO are combined. No J 2.5.6 The company's Supervisory Board has no member who held a position in the Managing Body or the executive management of the company in the three years prior to his nomination. No J 2.7.5 The development of the remuneration system of the Managing Body, the Supervisory Board and the executive management serves the strategic interests of the company and thereby those of the shareholders. Yes J 2.7.6 In the case of members of the Supervisory Board, the company applies a fixed amount of remuneration and does not apply a remuneration component related to the share price. Yes J 2.8.2 The Managing Body developed its risk management policy and regulations with the cooperation of those executives who are responsible for the design, maintenance and control of risk management procedures and their integration into the company's daily operations. No J 2.8.10 When evaluating the system of internal controls, the Managing Body took into consideration the aspects mentioned in 2.8.10. No J 2.8.12 The company's auditor assessed and evaluated the company's risk management systems and the risk management activity of the executive management, and submitted its report on the matter to the Audit Committee. Yes J 2.9.1 The rules of procedure of the Managing Body, the Supervisory Board and the committees cover the procedure to be followed when employing an external advisor. No J 2.9.4 The Managing Body may invite the company's auditor to participate in those meetings where it debates general meeting agenda items. Yes J 2.9.5 The company's Internal Audit function co-operated with the auditor in order to help it successfully carry out the audit. Yes J 3.1.2 The chairmen of the Audit Committee, Nomination Committee, Remuneration Committee (and any other committees operating at the company) regularly inform the Managing Body about the meetings of the committee, and the committees prepared at least one report for the Managing Body and the Supervisory Board in the given business year. Yes J 3.1.4 The company's committees are made up of members who have the capabilities, professional expertise and experience required to perform their duties. Yes J 3.1.5 The rules of procedure of committees operating at the company include those aspects detailed in 3.1.5 Yes J 3.2.2 The members of the Audit Committee were fully informed about the accounting, financial and operational peculiarities of the company. Yes J 3.3.3 The Nomination Committee prepared at least one evaluation for the chairman of the Managing Body on the operation of the Managing Body and the work and suitability of the members of the Managing Body. No J 3.3.4 The majority of the members of the Nomination Committee are independent. No J 3.3.5 The rules of procedure of the Nomination Committee includes those details contained in 3.3.5 No J 3.4.5 The Remuneration Committee prepared the Remuneration Statement. No J 3.4.6 The Remuneration Committee exclusively consists of non-executive members of the Managing Body. No J 4.1.4 The disclosure guidelines of the company at least extend to those details contained in 4.1.4 No The Managing Body informed shareholders in the annual report on the findings of the investigation into the efficiency of disclosure procedures. No J 4.1.7 The company's financial reports followed IFRS guidelines. Yes J 4.1.16 The company also prepares and releases its disclosures in English. Yes Budapest, June 28, 2012 Zwack Unicum Nyrt. by ____________________________ Mr. Sándor Zwack, Chairman ______________________________ Mr. Frank Odzuck, General Manager on behalf of the Board of Directors Contact: Guttengéber György guttengeber@zwackunicum.hu ---------------------------------------------------------------------------