CORPORATE GOVERNANCE

Corporate governance is a set of rules that govern the management and control system within the company, the report between the management, shareholders and other interested persons. In detail, corporate governance refers to the way in which the rights and responsibilities are divided between the categories of participants to the company activity, such as administrators, directors, shareholders and other interest groups, specifying also how decisions regarding the company activity are made, how strategic objectives are defined, which are the means of reaching those and how economic performance are monitored. By implementing and enforcing the principles of corporate governance the companies ensure a real improvement of economic efficiency, implicitly of the company value and of the investment climate, increasing the level of transparency and trust for those.

In the context of the strategic and specific objectives of the Company’s activity, implementation and development of corporate governance principles represent a measure to ensure a rigorous framework for sizing and regulating corporate governance at Company level.

At present, the company administration system is unitary. Company’s activity is managed by a Board of Directors formed of 5 members who guarantees the efficiency of the Company’s supervisory, analysis and activity evaluation capacity, as well as fair treatment of the shareholders, in accordance with statutory provisions.

Members of the Board of Directors are elected by the Ordinary General Meeting of Shareholders, for a four-year term, with the possibility of re-election for one or more 4-year term.

The Board of Directors is responsible for the administration of COMVEX S.A. and will act in the interest of the Company, protecting at the same time the general interests of the shareholders by ensuring a sustainable development of the Company.

The structure of the Board of Directors ensures the balance between executive and non-executive members. Executive and non-executive directors have specific and complementary roles within the Board.

The Directors shall permanently update their skills and shall improve their knowledge about the Company’s activity and best practices of corporate governance, for the purpose of fulfilling their role.

Each member informs the President of the Board of Directors about any other mandate of director, manager or responsibility that he / she holds outside the Company during his / her current term.

Each member of the Board of Directors informs the Board, implicitly its President, regarding an eventual conflict of interest when it occurs, respectively on the evaluation of such concerning a potential conflict which may result from some operations.

Managers are elected by the Board of Directors. Managers may be appointed from the members of the Board of Directors or from outside this statutory body.

The Company Management was delegated to the General Manager.

The General Manager is responsible for taking all the measures related to the Company Management, within the limits of the object of activity and observing the exclusive competencies reserved by law or the Articles of Association for the Board of Directors and the General Meeting of the Shareholders.

The way of organizing the activity of the General Manager is established by decision of the Board of Directors.

The activity of the Company is carried out by applying the internal control rules and procedures, by observing the requirements at all hierarchical and functional levels: approval, authorization, verification, evaluation of operational performances, assets securing, functions separation.

Internal auditors are the ones who evaluate the Company’s internal control system and provide an impartial and professional analysis of the Company’s risks.

The financial statements are reviewed by the financial auditor chosen by the Ordinary General Meeting of Shareholders.

The Board of Directors collaborates closely with internal and external auditors, periodically organizing meeting with them for the purpose of discussing issues related to financial reporting, internal control and risk management.

The Board of Directors regularly reviews the effectiveness of financial reporting, internal control and risk management system adopted by the Company; it ensures that the audit analyses carried out as well as the audit reports prepared as a result of them are in line with the audit plan.

In this manner, the Board of Directors evaluates the degree of efficiency of the risk management system, from the perspective of ensuring that the main risks (including those related to fraud and compliance with relevant legislation and regulations) are correctly identified, managed and reported in accordance with the audit plan.

COMVEX S.A. respects the rights of securities holders and ensures a fair treatment for all securities holders of same type and class, making available to them all relevant information so that they can exercise all their rights in a fair manner.

Through its website, the Company disseminates the most important information, thus enabling investors to have access to real-time information.

Comvex has on its website comvex.ro a special section of Information for investors, as well as a contact form in order to provide appropriate information, upon request.

In order to ensure the rights of the holders of shares issued by the Company, it makes available to the shareholders, by publishing on its own website, detailed information regarding the way in which the works of the general shareholders meetings take place, exercising the right to vote within the meetings, as well as financial information, periodical reports, etc.