Corporate Governance Statement

General

Corporate Governance refers to a set of principles on the basis of which the proper organization, operation, management and control of a company is evaluated with the aim of maximizing value and safeguarding the legitimate interests of all stakeholders.

In Greece, the Corporate Governance framework has been developed mainly through the adaptation of mandatory rules, such as Law 3016/2002. This law imposes the participation of non-executive and independent non-executive members on the Boards of Directors of Greek listed companies, the establishment and operation of internal audit units and the adoption of an Internal Procedures Manual. Moreover, a significant number of other legislative acts incorporated EU corporate law directives in the Greek legal framework, thus creating a new set of rules regarding corporate governance. Those include Law 3693/2008, requiring the creation of audit committees and incorporating significant disclosure obligations, concerning the ownership as well as the governance of a company, Law 3884/2010, dealing with the rights of shareholders and additional corporate disclosure obligations in the context of preparation of the General Meeting of shareholders and Law 3873/2010, incorporating in the Greek legal framework the Directive 2006/46/EC of the European Union, concerning the annual and consolidated accounts of companies of a certain legal form; also L.4403/2016 that incorporated Directive 2013/34/EU and Directive 2014/95/EU into the Greek legal framework, regarding the disclosure of non-financial and diversity information by certain large undertakings and groups. Finally, in Greece, as well as in most countries, the Company Law (codified law 2190/1920, which is modified by numerous guidelines derived from many of the aforementioned EU Directives) includes the basic legal framework of company governance. The above Law was replaced by Law 4548/2018 to the provisions of which the Company must adapt its Articles of Association in 2019.

Corporate Governance Code

The Company has voluntarily decided to adopt the Corporate Governance Code for listed companies of the Hellenic Corporate Governance Council (HCGC) (hereinafter referred as the “Code”). The Code is accessible at the Hellenic Corporate Governance Council (HCGC), at the following address: http://www.helex.gr/el/esed

Apart from HCGC’s website, the Code is also available to all employees through the intranet as well as in hard copy at Group Finance and Human Resources.

During 2018, the Company complied with the provisions of the above Code with the deviations mentioned below and intends to adopt appropriate policies and proposals to minimize existing deviations from the provisions of the Code.

In 2018, in addition to the provisions of the Code, the Company complied with all the relevant provisions of the Greek Legislation (Law 2190/1920 as currently in force and Law 3016/2002.

Deviations from the Corporate Governance Code

In some instances, the Company deviates or does not apply certain provisions of the Code in their entirety:

• With regard to the size and composition of the Board of Directors (or “BoD”)
• With regard to the role and attributes of the Chairman of the BoD
• With regard to BoD members nomination
• With regard to the functioning and evaluation of the BoD
• With regard to the level and structure of compensation
• With regard to the General Meeting of shareholders.

Corporate Governance Practices Exceeding Legal Requirements

The Company, within the framework of implementing a satisfactory and well-structured system of corporate governance, has applied specific practices of good corporate governance, some of which exceed relevant current legal requirements.

More specifically, the Company has adopted the following additional corporate governance practices, all of which relate to the size, composition, responsibilities and overall operation of the BoD:

• Due to the nature and purpose of the Company, the complexity of matters and the necessary legal support of the Group, which includes a number of operations and subsidiaries in Greece and abroad, the BoD – numbering thirteen members, which is ten more than the minimum required by law – has established committees that consist of its members, with advisory, supervisory and authorizing responsibilities, aiming to support the BoD. These committees are briefly stated below:

1. Audit Committee
2. Crude oil and Products Supply Committee
3. Finance & Financial Planning Committee
4. Labour Issues Committee
5. Remuneration & Succession Planning Committee

• In addition to the above committees of the BoD, executive and non-executive committees have been established in the Company, mainly with an advisory and coordinating role. They comprise senior executives of the Company and their goal is to support the work of Management. The most important committees are:

1. Group Executive Committee
2. Group Manufacturing Activities Committee
3. Domestic & International Fuels Marketing Committee
4. Oil Supply and Sales Committee
5. Group Credit Committee
6. Investment Evaluation Committee
7. Electricity, Natural Gas & Renewable Energy Sources Committee
8. Exploration and Production Committee

• The BoD has included specific provisions in the Company’s Internal Procedures Manual, banning transactions of shares for the Chairman of the BoD, the CEO and for other members of the BoD, as long as they serve as either Chairman of the BoD or CEO of a related company. The BoD has also implemented a Procedure of Monitoring and Disclosure of Significant Participations and Transactions on the Company’s shares, as well as a procedure of Disclosing and Monitoring Transactions and Financial Activity with the Company’s major clients and suppliers.

Since 2011, the company has adopted a Code of Conduct in accordance with the 1175/24.11.2011 BoD decision and created a Regulatory Compliance Unit which has the responsibility of implementing the Code.

During 2018,

• a Competition Policy & Compliance Program has been adopted which is an important complement to the Group's regulatory self-compliance framework; and
• the Group's Privacy Policy was approved in compliance with the applicable national and European regulatory framework and in particular the European General Data Protection Regulation (GDPR).

Within 2019, the Company intends to adopt a conflict of interests’ prevention policy that will be part of the Code of Conduct. An evaluation and review process of the Code of Conduct is also in progress.

General Meeting of Shareholders and Shareholders’ Rights

The roles, responsibilities, participation, the ordinary or extraordinary quorum of participants, the Chairmanship, Agenda and the conduct of procedures of the General Meeting of the Company’s Shareholders are described in its Articles of Association, as updated on the basis of the provisions of Codified Law 2190/1920 (following integration of Law 3884/2010 on minority voting rights). Shareholders are required to prove their shareholder status and the number of shares they own at the exercise of their rights as shareholders. Usual forms of proof are custodian or Central Depository certificates or electronic communication though specialised secured electronic platforms.

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