Masterplast : CG Declaration

CORPORATE GOVERNANCE REPORT

in accordance with the Corporate Governance Recommendations of Budapest Stock Exchange

25 APRIL 2024

MASTERPLAST NYRT.

declaration on corporate governance practices

2023

in accordance with the Corporate Governance Recommendations and Proposals

published by Budapest Stock Exchange Zrt.

25 April 2024

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MASTERPLAST NYILVÁNOSAN MŰKÖDŐ RÉSZVÉNYTÁRSASÁG

Content
Introduction	4
1.1 A brief presentation of the operation of the Board of Directors / Governing Board, and the distribution of
responsibilities and tasks between the Board of Directors / Governing Board and the management	5

1. An introduction of the Board of Directors / Governing Board, Supervisory Board and management members (for board members, also indicating each member's status of independence), a presentation of the boards structures.5
2. Specifying the number of meetings which the Board of Directors / Governing Board, Supervisory Board and

committees held in the given period, completed with attendance rates

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1.4 A presentation of the work done by the Board of Directors / Governing Board, the Supervisory Board and the management as well as the considerations for assessing their individual members. Specifying if the assessment

carried out in the given period resulted in any changes

7

1. A report on the operation of each committee, elaborating on the professional background of committee members, the number of and the attendance rate at the meetings held as well as the major topics discussed at the meetings and a presentation of the general operation of each committee. When presenting the operation of the Audit Committee, any decision by the Board of Directors / Governing Board against the proposal of the committee should be mentioned (also including the explanations offered by the Board of Directors / Governing Board). The
   Company website, where all tasks delegated to the committees and the dates of the members' appointment must be published, should also be mentioned. (If this information is not available on the Company website, it must be included in the Corporate Governance Report.)……………………………………………………………………………………………………….8
2. A description of the system of internal controls, an evaluation of the activities performed in the given period. A report on the efficiency and effectiveness of the risk management procedures. (Information about where

shareholders can access the Board of Directors / Governing Board report on the operation of internal controls.)...9

1.7	Information on whether the auditor performed any activities not related to auditing	10
1.8	An overview of the Company's publication policy and its insider trading policy	10
1.9	An overview of the method of exercising shareholder rights	11
1.10	A brief presentation of the rules for the conduct of the General Meeting	12
1.11	Remuneration Statement	13
1.12	Other information	13
Corporate Governance Report on compliance with the Corporate Governance Recommendations	14
		Level of compliance with the Recommendations	14
		Level of compliance with the Proposals	22

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MASTERPLAST NYILVÁNOSAN MŰKÖDŐ RÉSZVÉNYTÁRSASÁG

The shares of MASTERPLAST Nyilvánosan Működő Részvénytársaság (8143 Sárszentmihály, Árpád utca 1 / A., registered by the Registry Court of Székesfehérvár, Cg. 07-10-001342; later: "Company" "Group", "Masterplast") listed on the Budapest Stock Exchange (BSE), accordingly, the Company keeps in mind the corporate governance partices developed in Hungary and the related mandatory legal regulations.

Masterplast Group is managed by the MASTERPLAST Nyrt. The Group consists of the parent company Masterplast Nyrt., the 17 consolidated companies, four affiliated companies and one indirect relation.

Founded in 1997, the main areas of activity of Masterplast are production and sales of building industry insulation materials. With its headquarters in Hungary, the Central and Eastern European international company group has 10 active subsidiary companies all over the world, operates several production units at 10 sites. The Group has a presence with its main products, thermal insulation system, heat, sound and water insulation, roofing and dry construction on the market. Its international production bases (own and production under license) ensure that group products reach the European markets and the markets outside Europe through its subsidiary companies and partners. In 2020, the company entered the healthcare segment, and its strategic goal is to make the modular business division a success as soon as possible. In view of the growing demand for fibre insulation materials, the company's focus in 2023 was on the establishment of stone wool and glass wool insulation material plants to supply the needs of the Hungarian and Central and Eastern European markets, and its production development plans are now in the implementation phase in both targeted product segments.

The Board of Directors of MASTERPLAST Nyrt. with the approval of 3/2024. (04.25.) resolution of the General Meeting makes the following declaration and gives the following information specified hereunder on the behalf of the Company:

Introduction

The Company places great emphasis on the implementation of corporate governance recommendations and guidelines, taking into account the organization and capabilities of the Company and its subsidiaries. In addition to the guidance of the Board of Directors, the management of the company continuously develops its operational and control practices.

MASTERPLAST Nyrt's corporate governance practices are in line with the requirements of the Budapest Stock Exchange and the current capital market regulation. In addition, the Company regularly reviews its policies to meet the best international practice in this field.

Masterplast considers the aspects of sustainability, energy efficiency and environment protection of high importance in its internal processes as well as in production and innovation.

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MASTERPLAST NYILVÁNOSAN MŰKÖDŐ RÉSZVÉNYTÁRSASÁG

1.1 A brief presentation of the operation of the Board of Directors / Governing Board, and the distribution of responsibilities and tasks between the Board of Directors / Governing Board and the management.

The Bodies of the MASTERPLAST Nyrt.: General Meeting, Board of Directors, Audit Committee, Group Management, Chief Executive Officer (hereinafter referred to as "CEO") and Deputy Chief Executive Officers (hereinafter referred to as "Deputy CEO").

The Supreme Body of the Company is the General Meeting, which contains every Shareholders. The General Meeting, as the main decision-making body of the Company, enables its shareholders to make decisions, decide on corporate governance measures and exercise their control rights in matters of major importance for their operations. The rules of the calling and the procedure of the General Meetings, as well as the conditions of shareholders' rights and obligations, and the method of exercising the shareholders' rights are regulated in detail by the Articles of Association of the Company, which can be read on the webpage of the Company and the webpage of the Budapest Stock Exchange.

The managing body of the Company is the Board of Directors which has 5 members. The responsibilities of the Board of Directors shall include decisions that are related to the governance of a legal person, and are beyond the competence of the General Meeting, and such decisions which are delegated to the power of the Board of Directors by the Articles of Association and the legal rules. The rules of procedure, scope of authority and responsibilities of the Board of Directors are regulated in detail by the Section VIII. of the Articles of Association and the Rules of Procedure of the Board of Directors which can be read on the webpage of the Company. The Company's Board of Directors continuously monitors the company's operations, receives continuous information about the operation of the company from the Management and the CEO.

The operational activity of the Company is led by the Chief Executive Officer who elected by the Board of Directors and works as an employee. Over the CEO the employer's rights are exercised by the Board of Directors. The employers' rights over the Company's employees are exercised by the CEO, with the exception of the President and the Vice-president. Over the President and the Vice-president - with the exception of their election and recall - the employers' rights exercised by the Board of Directors.

1.2 An introduction of the Board of Directors / Governing Board, Supervisory Board and management members (for board members, also indicating each member's status of independence), a presentation of the boards structures.

The 5-member Board of Directors is the executive body of Masterplast Nyrt. Its scope of authority and responsibilities are detailed in the Rules of Procedure of the Board of Directors, which can be read on the Company's website. The independent members of the Board of Directors do not participate in the daily activities of the work organization of the Company. The President and Vice-president of the Board of Directors of MASTERPLAST Nyrt. are elected by the Board of Directors for the same period as the members of the Board of Directors.

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MASTERPLAST NYILVÁNOSAN MŰKÖDŐ RÉSZVÉNYTÁRSASÁG

Members of the Board of Directors till 30 April 2023:

Dávid Tibor President (non-independent)

Balázs Ács Vice-president(non-independent)

Dirk Theuns (independent)

Dezse Margaret Elizabeth (independent)

Bálint Fazekas (independent)

Members of the Board of Directors since 1 May 2023:

Dávid Tibor President (non-independent)

Balázs Ács Vice-president(non-independent)

Dirk Theuns (independent)

Dezse Margaret Elizabeth (independent)

Bálint Fazekas (independent)

Masterplast Nyrt. has a 3-member Audit Committee, the members are elected by the General Meeting from among the independent members of the Board of Directors for the same period as their membership of the Board of Directors. The Audit Committee elects its chairperson from among its members and makes its decisions by simple majority. In the year of 2023 Margaret Elizabeth Dezse held this position.

Members of the Audit Committee till 30 April 2023:

Dezse Margaret Elizabeth President (independent)

Dirk Theuns (independent)

Bálint Fazekas (independent)

Members of the Audit Committee since 1 May 2023:

Dezse Margaret Elizabeth President (independent)

Dirk Theuns (independent)

Bálint Fazekas (independent)

The introduction of the Members of the Board of Directors and the Audit Committee can be read on the webpage of the Company.

The operation of Company is led by the Group management (hereinafter referred as: "management") of Masterplast Nyrt. within the framework of the Articles of Association, resolutions of the General Meeting and the Board of Directors, as well as the Organizational and Operational Regulations of Masterplast Nyrt. The split of tasks and responsibilities of the members related to the areas of corporate governance is detailed in the Organizational and Operational Regulations. The professional careers and introduction of the members of the Management can be read on the Company's webpage.

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MASTERPLAST NYILVÁNOSAN MŰKÖDŐ RÉSZVÉNYTÁRSASÁG

Members of the Management till 27 April 2023:

Dávid Tibor President

Balázs Ács Vice-president

Róbert Nádasi CEO

Members of the Management from 27 April 2023 since 2 October:

Dávid Tibor President, CEO

Balázs Ács Vice-president, Deputy CEO

Róbert Nádasi Deputy CEO

Members of the Group Management from 2 October 2023:

Dávid Tibor President, CEO

Balázs Ács Vice-president, Deputy CEO

Róbert Nádasi Deputy CEO

László Pécsi Member of the Group Management

Illés Jancsó Member of the Group Management

Tivadar Bunford Member of the Group Management

László Flórián Lukács Member of the Group Management

In all matters which are not belong to General Assembly or the Board of Directors, the management shall have the right to decide.

The Chief Executive Officer is managing and controlling the daily work and work organization of the company, and ensures the conditions necessary for the company's activities, within the framework defined by the legislation, resolutions of the General Meeting and the Board of Directors. Róbert Nádasi, Deputy CEO is not a member of the Board of Directors, he attends as a regular invited participant on the Board of Directors' meeting. Employer rights are exercised by the CEO over the Company's employees. His professional career and introduction can be read on the webpage of the Company.

1.3 Specifying the number of meetings which the Board of Directors / Governing Board, Supervisory Board and committees held in the given period, completed with attendance rates.

The Board of Directors held meetings 5 times with a 100% presence in 2023. The presence on the meetings were made in person or by the way of electronic communications.

There is no Supervisory Board at the Company.

The Audit Committee held meetings 2 times with a 100% presence, 1 occasion with 66,66% presence in 2023. The presence on the meetings were made in person or by the way of electronic communications.

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MASTERPLAST NYILVÁNOSAN MŰKÖDŐ RÉSZVÉNYTÁRSASÁG

1.4 A presentation of the work done by the Board of Directors / Governing Board, the Supervisory Board and the management as well as the considerations for assessing their individual members. Specifying if the assessment carried out in the given period resulted in any changes.

The Board of Directors evaluates its work as a body and the work of its members' annually at the Board of Directors meeting held before the Annual General Meeting. At this meeting, the Board of Directors discusses the members' contribution to the board's activities, the personal activities of the members and reports on the activities to the Annual General Meeting based on the evaluation.

The Board of Directors approve strategic plan which is reviewed annually. The Board of Directors evaluates the work of the management through the base year overperformance and the execution of the strategic plan. This evaluation is held at the Board of Directors meeting following the Annual General Meeting.

The remuneration of the members of the Board of Directors is determined by the General Meeting in fix amount yearly.

The remuneration of the President and the Vice-president is fixed, the CEO's remuneration is partly linked to the company's profitability. Remuneration for Group management is determined by the CEO, part of which is linked to the company's profitability.

The evaluation of the members of the Board of Directors' work documented in the minutes of the Board of Directors.

1.5 A report on the operation of each committee, elaborating on the professional background of committee members, the number of and the attendance rate at the meetings held as well as the major topics discussed at the meetings and a presentation of the general operation of each committee. When presenting the operation of the Audit Committee, any decision by the Board of Directors / Governing Board against the proposal of the committee should be mentioned (also including the explanations offered by the Board of Directors / Governing Board). The Company website, where all tasks delegated to the committees and the dates of the members' appointment must be published, should also be mentioned. (If this information is not available on the Company website, it must be included in the Corporate Governance Report.)

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MASTERPLAST NYILVÁNOSAN MŰKÖDŐ RÉSZVÉNYTÁRSASÁG

The Board of Directors acts and makes decisions as a body. Together with the Initial Private Offering of the shares of the Company the Board of Directors set its own rules of procedures which was updated in April 2023 to maintain best practice.

The rules of procedure include:

• the obligations and powers of the Board of Directors,
• rules applicable to the Members of the Board of Directors,
• the main tasks of the President and Vice-President of the Board of Directors,
• the organization and preparation of board meetings, the decision-making system, the monitoring of the implementation of decisions and the rules on conflicts of interest.

In order to increase the operational efficiency the Board of Directors, taking into account the size, structure and efficiency of the Company, as well as the professional basis of the decisions, it does not operate committees, the relevant functions are provided by the members of the Board of Directors without a forming a formal body.

The Board of Directors did not make a decision contrary to the proposal of the Audit Committee in 2023.

The Company does not have a Supervisory Board.

The Audit Committee performed its tasks and powers on the basis of Act V of 2013 on the Civil Code and the Articles of Association of the Company. The rules of procedure of the Audit Committee is available on the Company's website.

The Audit Committee is responsible for assisting the Board of Directors in auditing the financial reporting system, selecting the auditor and cooperating with the auditor.

Members of the Audit Committee shall not receive any additional remuneration in addition to the remuneration of the Board of Directors in year of 2023.

The members of the Board of Directors and the Audit Committee have the expertise necessary to perform the tasks, have background and experience related to the case in point. The introduction of the Members can be read on the webpage of the Company.

1.6 A description of the system of internal controls, an evaluation of the activities performed in the given period. A report on the efficiency and effectiveness of the risk management procedures. (Information about where shareholders can access the Board of Directors / Governing Board report on the operation of internal controls.)

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MASTERPLAST NYILVÁNOSAN MŰKÖDŐ RÉSZVÉNYTÁRSASÁG

The activity of the internal audit started at the Company in 2008. The goal of the internal audit is to assess and supervise the risks about the present and the future business activities and to review the action plans for identified deficiencies.

The main task of the internal audit is the monitoring of the lawful, effective and reliable operation of the parent company and all subsidiaries, the continuous verification and evaluation of the internal control system. The internal audit supports by its suggestions the solution and prevention the deficiencies, malpractices, defects and the improper internal regulation of the Company.

Katalin Csemák is the internal auditor of the Company. She reports about her inspections to the Audit Committee and the Management of the Company.

The audits are carried out on the basis of the internal audit plan for the given year in agreement with the Chief Executive Officer, approved by the Audit Committee.

In 2023 audits were specified in the revised audit plan were carried out.

1.7 Information on whether the auditor performed any activities not related to auditing.

In 2023 the audit was caried out by the auditor of the Company, MAZARS Könyvszakértő és Tanácsadói Korlátolt Felelősségű Társaság (1139 Budapest, Fiastyúk utca 4-8. 2. em., Cg. 01-09-078412, chamber registration number: 000220), personally responsible auditor Andrea Kinga Molnár (mother's name: Mária Ibolya Dr. Kovács, address: 2096 Üröm, Kormorán utca 16/B., chamber registration number: 007145).

The auditor did not perform any activities which are not related to auditing.

1.8 An overview of the Company's publication policy and its insider trading policy.

MASTERPLAST Nyrt. pays special attention to the definition of disclosure rules related to its presence at the stock exchange, through this the compliance with the legislation in force, the expectations of the public regarding information, and compliance with the principle of transparency. The disclosure rules and the operation of the system are defined by internal rules.

The Company as the issuer of shares which are sold at the Budapest Stock Exchange as a regulated market, considered to be an issuer of shares under public interest. The exact contact details of the Company (postal address, telephone number, fax number, e-mail address) are available on the Company's website (www.masterplastgroup.com).

The Company acts in the course of its publication on the basis of the legislation in force and the rules of the stock exchange. The Company shall disclose regulated information. Regulated information: information disclosed in the

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