Articles of Association

non-official translation of the Articles of Association

of MFB Hungarian Development Bank Private Limited Company

July 2016

 

Articles of Association

CONSOLIDATED WITH AMENDMENTS

 

 

1.       Name of the Company

 

1.1 Name of the Company: MFB Magyar Fejlesztési Bank Zártkörűen Működő Részvénytársaság

 

1.2. Name of the Company in foreign languages

 

In English: MFB Hungarian Development Bank Private Limited Company

In German: MFB Ungarische Entwicklungsbank Geschlossene Aktiengesellschaft

In Russian: MFB Vengerszkij Bank Razvitija Zakritoje Akcionyernoje Obshchestvo

In French: MFB Banque Hongroise de Développement Société Anonyme Fermée

 

1.3. Abbreviated corporate name of the Company: MFB Zrt.

 

 2. Registered Seat and Branch Office of the Company:

Registered seat of the Company: 1051 Budapest, V., Nádor u. 31.
Branch of the Company: 1074 Budapest, Dohány utca 12.

3. Duration and General Legal Status of the Company

The Company was established for an indefinite duration. The Company is a specialised credit institution, operating as the general legal successor of Magyar Befektetési és Fejlesztési Bank Rt. (Hungarian Bank for Investment and Development Ltd.). The Company is a public company. For the purposes of the provisions of Act CXXII of 2009 on the Provident Operation of Public Undertakings, the Company shall classify as a business association of major importance to the national economy.

4. Object and Scope of Activities of the Company

4.1 The object of the Company is to secure and participate in securing – within its own scope of activities defined in Article 3 of Act XX of 2001 on the Hungarian Development Bank Ltd (hereinafter referred to as “MFB Act”) and in adherence to the requirements of transparency, expediency, profitability, efficiency and prudency – the development funds necessary to achieve the economic development objectives determined by the medium and long term economic strategy of the Government.

4.2 According to the classification contained in Regulation (EC) No 1893/2006 of the European Parliament and of the Council of 20 December 2006 establishing the statistical classification of economic activities abbreviated as NACE Revision 2 and amending Council Regulation (EEC) No 3037/90 as well as certain EC Regulations on specific statistical domains (TEÁOR ’08) the Company pursues the following activities:

64.19’08 other monetary intermediation - main activity
64.91’08 financial leasing
64.99’08 other financial intermediation not classified elsewhere.

4.3 The Company may only carry out business activities which are directly related to its tasks listed in the MFB Act. In this context, the Company may provide the following financial services:

a) collection of deposits and other repayable funds exclusively from legal entities,
b) providing credits and money loans;
c) financial leasing;
d) directly linked to its tasks included in Articles 2 b) and c) of the MFB Act:
1. providing payment services – with the exception of keeping current accounts – exclusively for legal entities, sole proprietors and private entrepreneurs;
e) granting suretyship, guarantees and other banker’s commitments;
f) providing credit references;
g) custody service, safe deposit service;
h) mediation of financial services.

 5. Share Capital and Shares of the Company

5.1 The Company is a single-member private company limited by shares, wholly owned by the State.
The State as the sole owner is represented in the Company by the Minister responsible for the coordination of government activities (hereinafter referred to as “the party exercising ownership rights”).
The party exercising ownership rights shall enforce the rights of the owner, and – without prejudice to the powers of public monitoring bodies defined by law – monitor the expedience, profitability and proficiency of the Company’s economic management.

5.2 The share capital amounts to HUF 114,500,000,000 i.e. one hundred and fourteen billion five hundred million forints, divided into 114,500 i.e. one hundred and fourteen thousand five hundred pieces of printed form registered ordinary shares with a nominal value of HUF 1,000,000 i.e. one million forints each. The Company’s shares may not be transferred to third parties.

5.3 All shares represent identical rights.

5.4 The Company’s Board of Directors shall keep a share register of the registered shares pursuant to Act CCXXXVII of 2013 on Credit Institutions and Financial Undertakings (hereinafter referred to as “Credit Institutions Act”) and Act V of 2013 on the Civil Code (hereinafter referred to as “Civil Code”). The party exercising the ownership rights may inspect the share register and may request from the Board of Directors a copy of that part of the share register which concerns his/her person. Third parties may inspect the share register.

The Company was founded for an indefinite period of time. The Company is a specialised credit institution, the general legal successor of Magyar Befektetési és Fejlesztési Bank Rt. (Hungarian Bank for Investment and Development Ltd.) The Company is in public ownership. Considering the effectiveness of the provisions of the Act No CXXII of 2009 on the more economical functioning of business associations in public ownership, the Company shall be deemed to be a business association of high importance to the national economy.

 

6. Increasing and Decreasing the Share Capital, Shares of Consolidated Denomination

 

6.1 If the share capital of the Company is increased from the assets exceeding the share capital, the new shares shall be acquired by the State without compensation.

6.2 Pursuant to the resolution of the party exercising ownership rights, the share capital may be decreased by (i) decreasing the number of the shares, or (ii) decreasing the nominal value of the shares, or (iii) the combination of two methods detailed in (i) and (ii) above.

6.3 Only after the registration of the decrease of the share capital into the company register may any payment from the share capital be made to the party exercising ownership rights.

6.4 The Board of Directors is entitled to issue and to divide shares of consolidated denomination.

 

7. Corporate Bodies

 

The governing, decision-making and supervisory bodies of the Company are the following: the party exercising ownership rights, the Board of Directors and the Supervisory Board.

 

8. The Party Exercising Ownership Rights

 

8.1 Concerning the matters falling within the competence of a general meeting, the party exercising ownership rights shall make its resolutions in writing in accordance with the rules and regulations applicable to the Company. The resolution becomes effective when communicated to the senior officers.

8.2 The matters falling within the competence of the party exercising ownership rights:

a) establishing and amending the Articles of Association;
b) deciding on the alteration of the legal form of operation of the Company;
c) deciding on the transformation of the Company, and its termination without legal succession;
d) appointing and removing the members of the Board of Directors, the members of the Supervisory Board and the Chairman of the Supervisory Board, or relieving the same from their duties, determining their remuneration; furthermore, appointing the auditor of the Company for a definite term, determining their remuneration or terminating the appointment of the auditor;
e) approving the accounts defined by the Act on Accounting, including the approval of the consolidated annual accounts prepared in accordance with the International Financial Reporting Standards (IFRS);
f) approving the asset management plan of the assets entrusted to the Company;
g) approving the reports related to the public assets entrusted to the Company, as defined in a separate Government Decree;
h) deciding on the transformation of the printed form shares into dematerialised shares, and the transformation of dematerialised shares into printed form shares;
i) deciding on every issue referred to the competence of the party exercising ownership rights by law or the Articles of Association;
j) appointing and terminating the appointment of the CEO, exercising employer’s rights over the CEO, determining the performance requirements regarding the CEO and the related bonus or other type of remuneration;
k) deciding on the enforcement of compensation claims referred to in Article 3:109 (3) of the Civil Code and on the granting of relief from liability referred to in Articles 3:117 (1) and (2) of the Civil Code;
l) approving the strategy and the medium-term and annual business plans of the Company;
m) deciding on the acquisition of funding in excess of HUF 35 billion or the equivalent thereof in foreign currency, excluding treasury transactions with a maturity of up to one year;
n) deciding on the foundation and termination of an economic organisation, on the acquisition and transfer of shares in an economic organisation, as well as on other investments exceeding 10% of the shareholders’ equity of the Company, as described in Articles 4(5)(a) and 4(5)(b) of the MFB Act;
o) deciding on the write-off of losses exceeding HUF 1 billion and not associated with exposures;
p) in case of customers not qualifying as financial institutions or insurance companies, deciding on all transactions where the combined value of the claims that arise or may arise from the exposure incurred in respect of a single customer or customer group, together with the other exposures incurred in respect of the same customer, exceeds HUF 35 billion, with the exception of the exposures referred to in Article 400 (1) of Regulation 575/2013/EU , as well as investments;
q) deciding on exposures incurred under the limit (not including facility limits and treasury limits) of customers qualifying as financial institutions and insurance companies, where the combined value of the claims that arise or may arise from the exposure incurred or to be incurred in respect of a single customer or customer group, together with the other exposures incurred in respect of the same customer –
 exceeds HUF 35 billion
 exceeds the approved limit (counterparty limit)
with the exception of the exposures referred to in Article 400 (1) of Regulation 575/2013/EU1, as well as investments;
r) preparing the internal regulation on the remuneration of the Company’s senior officers, members of the Supervisory Board and employees in senior positions, and the method, principles and scheme of the remuneration payable in case of the termination of their employment, which regulation shall be deposited together with the Company’s corporate documents within 30 days from its approval;
s) approving the rules of procedure of the Supervisory Board;
t) approving a credit, (shareholder’s) loan, capital increase, subsidy, and the rescheduling of a credit or loan granted by the Company on behalf of the State for economic organisations in respect of which the Company exercises ownership rights, unless the credit or loan is provided by the Company in its own name, or the Company decides to reschedule a credit or loan it had granted in its own name.

 

9. Board of Directors

 

9.1 The Board of Directors acts as the management body of the Company.
The members of the Board of Directors qualify as the senior officers of the Company.
The Board of Directors consists of 5 to 9 members. The members of the Board of Directors shall be appointed (for a period of five years) and recalled by the party exercising ownership rights. The Board of Directors is chaired by the Chairman. The Board of Directors elects its own Chairman from among its members. The Board of Directors shall establish its own rules of procedure.

The party exercising ownership rights may remove the Chairman and the members of the Board of Directors from their office without giving reasons therefor.
There shall be at least two members on the Board of Directors who are employed by the Company (hereinafter referred to as “internal members”).
Concurrently with the termination of the employment of an internal member, his/her membership on the Board of Directors terminates.
Neither any member of the Board of Directors, nor their close relatives (Article 8:1(1)1 of the Civil Code) may be members of the European Parliament, the Hungarian Parliament or local government, or may be a spokesperson for a nationality.
Senior officers or supervisory board members of a legal entity engaged in the same main activity as the Company may be elected as Chairman or member of the Board of Directors. The Chairman and the members of the Board of Directors may be elected as senior officers or supervisory board members of a legal entity engaged in the same business activity as the main activity of the Company.
The Chairman and the members of the Board of Directors shall give a written notification to the party exercising ownership rights in advance of their planned acceptance of an appointment as senior officer or supervisory board member.
A declaration of property shall be submitted by the Chairman and the members of the Board of Directors in accordance with the applicable rules and regulations.

9.2 The Board of Directors shall perform the duties as required by law and the Articles of Association, in particular:

9.2.1 prepares and submits for approval by the party exercising ownership rights the annual accounts of the Company defined by the Act on Accounting and the consolidated annual accounts, not later than by 15 June of the following business year;
9.2.2 approves the unconsolidated financial statements of the Company, prepared in accordance with the international financial reporting standards (IFRS);
9.2.3 it is responsible for the preparation of the reports relating to the assets entrusted to the Company and the Integration Fund of Cooperative Credit Institutions as set out in a separate Government Decree, furthermore it decides on the accounts related to the Integration Fund of Cooperative Credit Institutions
9.2.4 approves all the budgets and plans of the Integration Fund of Cooperative Credit Institutions as set out in Act CXCV of 2011 on the Public Finances and Government Decree No. 368/2011 (31 December) on the Implementation of the Public Finances Act; furthermore decides on transferring any appropriation allocated to the Integration Fund of Cooperative Credit Institutions within the given chapter, or to another chapter, as well as on transfers of line items among the lines of the Appropriation Utilization Plan.
9.2.5 submits for approval by the party exercising ownership rights the plan of the assets entrusted to the Company, or its necessary amendments;
9.2.6 submits for decision by the party exercising ownership rights the strategy and the medium-term business plan of the Company;
9.2.7 prepares reports on the management, financial position and business policy of the Company, once a year for attention of the party exercising ownership rights and once in every three months for the attention of the Supervisory Board;
9.2.8 ensures appropriate bookkeeping by the Company.

9.3 The Board of Directors is entitled to determine the performance requirements for all employees authorised to substitute the CEO with limited or full capacity, as well as the bonus or any other remuneration linked to their performance. The Board of Directors shall exercise the employer’s rights in respect of each employee authorised to substitute the CEO with limited or full capacity.

The Company’s directing, decision-making and controlling organs are the following: the party exercising owner’s rights, the Board of Directors and the Supervisory Board.

 

10. Scope of Competence of the Board of Directors

 

10.1 Authorising the Company’s employees to sign for and on behalf of the Company.

10.2.1 Deciding on the acquisition of funding within the value range of HUF 20–35 billion or the equivalent thereof in foreign currency, excluding treasury transactions with a maturity of up to one year.

10.2.2 In the case of customers not qualifying as financial institutions or insurance companies, adopting a decision – up to the value of HUF 35 billion – on each transaction, where
– the combined value of the claims that arise or may arise from the exposure incurred in respect of a single customer or customer group, together with the other exposures incurred in respect of the same customer exceeds HUF 10 billion, or
– the loan-to-value ratio does not reach
• 50% of the calculation base for the collateral value in the case of a 1st class customer,
• 60% of the calculation base for the collateral value in the case of a 2nd class customer,
• 70% of the calculation base for the collateral value in the case of a 3rd class customer,
• 100% of the calculation base for the collateral value in the case of a 3rd class customer if the transaction qualifies as project financing, and in the cases of 4th - 8th class customers.
with the exception of transactions denominated in the domestic currency and financed from EU sources by the Company acting as the body implementing the fund of funds, the exposures according to Article 400 (1) of Regulation 575/2013/EU , as well as the investments.

10.2.3 In case of customers qualifying as financial institutions or insurance companies, deciding on every exposure to be incurred under their limit other than their approved limit (not including facility limits and treasury limits) up to HUF 35 billion ,where
– the combined value of the claims that arise or may arise from the exposure incurred in respect of a single customer or customer group, together with other exposures incurred in respect of the same customer exceeds HUF 10 billion, or
– the loan-to-value ratio does not reach
• 50% of the calculation base for the collateral value in the case of a 1st class customer,
• 60% of the calculation base for the collateral value in the case of a 2nd class customer,
• 70% of the calculation base for the collateral value in the case of a 3rd class customer,
• 100% of the calculation base for the collateral value in the case of a 3rd class customer if the transaction classifies as project financing, and in the cases of 4th - 8th class customers.
with the exception of transactions denominated in the domestic currency and financed from EU sources by the Company as the body implementing the fund of funds, the exposures according to Article 400 (1) of Regulation 575/2013/EU , as well as the investments.

10.2.4 Deciding on investments specified in Article 4 (5) of the MFB Act with a value exceeding HUF 10 billion, but not exceeding 10% of the shareholders’ equity of the Company.

10.2.5 Deciding on the write-off of such losses which are not associated with exposures, and the amount of which exceeds HUF 50 million, but does not exceed HUF 1 billion.

10.2.6 Unless prohibited by law, the Board of Directors is entitled to delegate, either individually or generally, its decision-making powers listed under clauses 10.2.1. – 10.2.5. to the CEO, the business decision-making body, another decision-maker or to the head of an at least directorate-level organisational unit of the Company.

10.3 Deciding on the establishment of the Organisational and Operational Rules of the Company.

10.4 Approving the internal regulations listed in the rules of procedure of the Company’s Board of Directors.

10.5 Adopting a decision on every issue referred to the exclusive competence of the Board of Directors by law, or on any issue which does not fall within the competence of another decision-making body or person.

10.6 Deciding on any other issue proposed to be discussed by the Board of Directors by any member of the Board of Directors or by the Supervisory Board.

10.7 The party exercising ownership rights may not curtail the powers of the Board of Directors.

 

 

11. Procedures of the Board of Directors

 

11.1 The Board of Directors shall meet as necessary, but in any case at least once in every 3 months. The meetings shall be convened by the Chairman by way of registered letter, electronic mail, or, in case of a member of the Board of Directors living abroad, by registered air-mail or telefax, or by hand delivery, delivered to the members of the Board of Directors at least 8 days prior to the date of the meeting. The invitation shall state the place, time and the agenda of the meeting; and, if possible, the written proposals prepared for the individual agenda items. Off-agenda items may only be discussed by the Board of Directors if two-thirds of its members are present and the attending members agree unanimously to the discussion of that agenda item. The Chairman of the Supervisory Board shall each time be invited to the meetings of the Board of Directors.

11.2 By proposing the agenda to be discussed, any member of the Board of Directors may request the Chairman of the Board of Directors to convene the meeting of the Board of Directors. The Chairman shall, in accordance with clause 11.1. and with special regard to the 8-day period, convene the meeting within 15 days.

11.3 The meeting shall be quorate if attended by the majority of the members of the Board of Directors. The resolutions shall be passed by the simple majority of the votes of those present. More than two thirds of the votes of those present are required for decisions regulated by Article 106 of the Credit Institutions Act (internal credit). The unanimous decision of the Board of Directors is required for decisions regulated by Article 144 (3) of the Credit Institutions Act.

11.4 The Board of Directors may also pass resolutions without holding a meeting i.e. in writing, by mail or telefax communication. The proposal shall be sent by the Chairman of the Board of Directors in writing to the members, and the proposal shall be considered approved, if 50 per cent. plus one member of the members of the Board of Directors send their consent thereto in the form of a private deed with full probative force to the Company’s seat within 3 days of dispatch of the proposal.

11.5 The Chairman of the Board of Directors is entitled to call an urgent meeting of the Board of Directors.

 

12. Supervisory Board and the Works Council

  Supervisory Board

12.1 The Supervisory Board consists of 3 to 6 members. The Chairman and the members of the Supervisory Board shall be appointed (for a definite term not exceeding five years) and recalled by the party exercising ownership rights. At least one of its independent members shall have a qualification in accounting or auditing.
Senior officers or supervisory board members of a legal entity engaged in the same main activity as the Company may be elected as Chairman or members of the Board of Directors. The Chairman and the members of the Supervisory Board may be elected as senior officers or supervisory board members of a legal entity engaged in the same business activity as the main activity as the Company.
The Chairman and the members of the Supervisory Board shall notify the party exercising ownership rights in advance and in writing of their planned acceptance of an appointment as senior officer or supervisory board member.
At least one third of the members of the Supervisory Board shall consist of the representatives of the employees as long as the annual average number of the Company’s full time employees exceeds 200.

12.2 The Supervisory Board shall supervise the management of the Company. In this context, it may inspect any documents, accounting records and books of the Company, it may request information from the senior officers and the employees of the Company, it may examine the payment account, cash register, stock of securities and goods, and the contracts of the Company, and have the same examined by an expert. The individual members of the Supervisory Board are also entitled to inspect, to request information and/or to examine in accordance with the above.

12.3 The Supervisory Board also operates as the Audit Committee of the Company, and in this context it facilitates the supervision of the financial reporting system, the selection of the auditor, and the co-operation with the auditor.

12.4 The Supervisory Board has all the rights and obligations attributed to supervisory boards of credit institutions by the applicable rules and regulations.

12.5 The Supervisory Board shall, without the application of Article 3:123 of the Civil Code, examine each material report on business policy which requires the decision of the party exercising ownership rights, as well as each proposal realting to a matter falling within the scope of competence of the party exercising ownership rights, excluding the proposals relating to the determination of the performance requirements and the related performance wage or other remuneration (bonus proposal) for the CEO. However, the Supervisory Board shall opine on the proposal on the assessment of such bonus. The party exercising ownership rights may only decide on the accounts defined by the Act on Accounting in possession of the written report of the Supervisory Board.

12.6 The Supervisory Board shall perform the professional management and supervision of the internal audit organisation in accordance with the applicable rules and regulations.

12.7 The meetings of the Supervisory Board shall be convened by the Chairman by way of an invitation sent to the members in writing (via registered letter, electronic mail or telefax) specifying a date which allows at least 3 days between the date of delivery of the invitation and the date of the meeting. The invitation shall specify the agenda of the meeting and, if possible, the proposals relating to the individual agenda items.

12.8 By indicating the reasons and purpose, any two members may request the Chairman to convene the meeting of the Supervisory Board. Should the Chairman fail to convene the meeting within 5 days, any initiating member is entitled to convene it.

12.9 The Supervisory Board shall be quorate if two-thirds of its members, but at least three members, are present. The Supervisory Board shall pass its resolutions with the majority of the votes of the attending members.
The Supervisor Board may also pass a resolution without holding a meeting, i.e. in writing, by way of letter or telefax. A resolution may be considered passed if, within twenty-four hours from the date of dispatching the document, at least two-thirds of the members of the Supervisory Board (in case of a Supervisory Board with less than five members, at least three of the members) have sent their vote in the form of a private deed with full probative force to the seat of the Company. It is not required to await for the vote of any member of the Supervisory Board who had previously informed the Chairman of the Supervisory Board that he/she was otherwise engaged and therefore could not participate in the work of the Supervisory Board either personally or by way of a written vote in a specified period. The resolution is the decision corresponding to the majority of the votes of the voting members of the Supervisory Board.
The minutes of the meetings and of the written resolutions of the Supervisory Board shall be sent to the party exercising ownership rights within 15 days from the adoption of the resolution.

12.10 The Supervisory Board establishes its own rules of procedure which is then approved by the party exercising ownership rights.

12.11 A declaration of property shall be submitted by the Chairman and the members of the Supervisory Board in accordance with the applicable rules and regulations.

Works Council

12.12 There is a Works Council operating at the Company. The Works Council is elected for a term of 5 years.

12.13 The number of Works Council members, as long as the average number of employees calculated for the 6-month period preceding the setting up of the election committee does not exceed 500, is 7.

12.14 The Works Council shall elect a Chairman from among its members at its inaugural session. The Works Council shall pass its resolutions by majority vote. The Works Council shall be quorate if at least half of its members are present. The Works Council shall convene as often as deemed necessary. The Works Council’s meeting shall be convened by the Chairman. By stating the purpose, a meeting shall be convened in each case if so requested by any member or the employer.
Members shall attend the Works Council meetings in person.
The Works Council's detailed operation guidelines shall be determined by its rules of procedure.

12.15 Employees’ representatives (delegates) shall be appointed to the Supervisory Board of the Company from among the employees of the Company, who shall take part in the supervision of the Company’s operation through their membership in the Supervisory Board. At least one-third of the members of the Supervisory Board shall consist of representatives of the employees; with their exception, no employee of the Company may become a member of the Supervisory Board.

12.16 The employees' delegates in the Supervisory Board shall be nominated by the Works Council from among the employees.
The party exercising ownership rights is obliged to appoint the persons nominated by the Works Council to the Supervisory Board following such nomination, unless grounds for disqualification apply in respect of the nominees.
Employees' delegates shall have the same rights and same obligations in the Supervisory Board as all other members. If the unanimous opinion of the employees' delegates differs from the position of the majority of the Supervisory Board, the party exercising ownership rights shall be informed of the minority opinion of the employees.

12.17 Employees' delegates participating in the Supervisory Board shall inform the Company's employees about the activities of the Supervisory Board.

12.18 Membership of an employees' delegate in the Supervisory Board shall terminate concurrently with the termination of his/her employment. An employees’ delegate is recalled by the party exercising ownership rights upon the proposal of the Works Council.

 

13. Auditor

 

13.1 The party exercising ownership rights shall elect the auditor of the Company for a definite term. The management of the Company proposes the person of the auditor to the party exercising ownership rights with the consent of the Supervisory Board. A person may be appointed as the auditor of the Company if he/she is listed in the registry of auditors and meets the requirements applicable to auditors of credit institutions set out by law. The party exercising ownership rights shall so determine the length of the auditor’s mandate in a maximum of 5 years, that the mandate shall expire simultaneously with the resolution of the party exercising ownership rights on the closing the Company’s business year.

13.2 The auditor is responsible for performing the audit in accordance with the applicable rules and regulations and, based on such audit, providing an opinion in an independent auditor’s report on whether the accounts of the Company comply with the rules and regulations, and whether they provide a true and fair view of the Company’s assets, liabilities and financial situation and the economic results of its operation. The party exercising ownership rights may also engage the auditor with other tasks.

13.3 If the auditor observes changes in the Company’s assets that may endanger the satisfaction of claims against the Company, or any circumstances that may give rise to the liability of senior officers or members of the Supervisory Board within the scope of their activities performed in such positions, he/she shall forthwith request without delay the senior officers to take the necessary measures required for the decision-making of the party exercising ownership rights.

13.4 Similarly, the auditor shall inform the Supervisory Board and/or the Board of Directors, if he/she establishes as a result of their regular examinations that the Company infringed any rules or regulations, and he/she may request the Supervisory Board and/or the Board of Directors to inform the party exercising ownership rights, if justified by the gravity of the infringement.

13.5 Concurrently with notifying the Company, the auditor shall also file a written report of the result of his/her examination with the National Bank of Hungary (hereinafter referred to as “MNB”) if, based on his/her findings:

a) the auditor’s opinion may become qualified, or its refusal may become necessary,
b) he/she notices circumstances indicating the perpetration of a criminal act or a serious violation of the Company’s internal regulations or the serious danger of the aforesaid,
c) he/she notices circumstances suggesting the serious violation of the Credit Institutions Act or other rules and regulations, or the decrees of the MNB,
d) he/she deems that the performance of the Company’s obligations or the preservation of the value of the assets entrusted to the Company is not ensured, or
e) he/she establishes serious deficiencies in or the insufficiency of the Company’s system of internal audit, or
f) a major difference of opinion arises between him/her and the management of the Company in issues concerning the Company’s solvency, income, data supply, book-keeping or issues affecting considerably the operation of the Company.

 

14. The Chairman of the Board of Directors and
the Chief Executive Officer (CEO)

 

 

The party exercising ownership rights shall exercise the employer’s rights (including the right to appoint and recall) in respect of the CEO.
During the term of his/her office the CEO is a member of the Board of Directors  without a separate relevant resolution of the party exercising ownership rights.
The rule on the term of office of the members of the Board of Directors set out in Article 14 (4) of the MFB Act is not applicable to the CEO.

If the Chairman of the Board of Directors and the CEO is the same person, the CEO is entitled to bear the title of Chairman-CEO.

The CEO and the Chairman of the Board of Directors shall be responsible for the execution of the resolutions of the party exercising ownership rights and the Board of Directors.

The Chairman of the Board of Directors shall exercise the employer’s rights in respect of the employees of the Legal, Human Resources and Program Management Departments. The Chairman of the Board of Directors may delegate such right in whole or in part to another employee of the Company ranking at least as Head of Department.
The CEO of the Company shall exercise the employer’s rights in respect of each employee of the Company, except for employees of the Legal, Human Resources and Program Management Departments. The CEO may delegate such right in whole or in part to another employee of the Company ranking at least as Head of Department.

15. Signatory Rights 

Documents on behalf of the Company shall be executed jointly by two members of the Board of Directors or two Managing Directors signing their names under the pre-written, pre-printed or printed name of the Company.

In accordance with the procedural rules laid down in an internal regulation approved by the Board of Directors, the joint signatory rights may be delegated to the Company’s employees as joint signatory rights.

16. Miscellaneous provisions:

16.1 The Company’s business year coincides with the calendar year.

16.2 In the case of transformation, the Company as successor shall determine its tax base after the transformation taking into consideration the assets and liabilities received from the predecessor (including provisions and accrued expenses and deferred income) – by adjusting the pre-tax profit, if it is permitted by the rules and regulations in force – as if the transformation had not taken place; the Company as successor shall keep separate records on the same assets and liabilities (including provisions and accrued expenses and deferred income) after they are revaluated, indicating their original value and book value recorded by the predecessor for the day of transformation, their adjusted recorded value as well as the sums it has claimed after the transformation to adjust the pre-tax profit on the basis of the assets and liabilities in question.

16.3 The HUF value of the transactions denominated in another currency, relevant for establishing the decision-making powers is determined based on the exchange rate of the National Bank of Hungary effective on the day of the decision.

16.4 Issues not regulated by the current Articles of Association and the interpretation of the terms herein shall primarily be governed by the MFB Act, secondarily by the Credit Institutions Act, the Civil Code and the Labour Code.


Budapest, 4 July 2016

 

 

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