Corporate Governance Statement

Corporate Governance Statement
I. Principles of Corporate Governance
The company has adopted the Principles of Corporate Governance, in accordance with applicable law and applicable international practices, with the aim of functionality and efficiency, transparency to the investing public and safeguarding the interests of the company's shareholders and all those associated with in any way with its operation.
II. Corporate Governance Code
The company follows the Greek Code of Corporate Governance (EKED) for Listed Companies (hereinafter for the sake of brevity "Code"), with some discrepancies that are consistent with its particular characteristics and make its management more flexible and functional as the company is listed in Annex 1 - EXCEPTIONS for listed companies of smaller size. These discrepancies are listed below.
The adopted Code can be found on the website of the Athens Stock Exchange, e-mail address: http://www.helex.gr/el/web/guest/esed-hellenic-cgc. The company may make changes to the Code and the Corporate Governance Principles it applies, in order to serve their principles in the best possible way.
III. Special practices.
Role and responsibilities of the Board of Directors
The Board of Directors has set up a Remuneration and Nominations Committee for the election and remuneration of the members of the Board of Directors and key senior executives as well as an Audit Committee. The Company follows a remuneration policy that is adapted to the current conditions, both of itself and of the market in general, and the remuneration of the members of the Board of Directors approved by the General Assembly.
Size and composition of the Board of Directors
The Board consists, according to the articles of association of 5 to 7 members. The current BoD consists of seven (7) members. Of its members, 3 members are executive and 4 members are non-executive. This scheme has proven in practice sufficient, flexible and efficient in its operation.
The composition of the Board of Directors is as follows:
1. Konstantinos Nakas of Filippos President & CEO, executive member
2. Stelios Vasilakis of Dimitriou Vice President, non-executive member
3. George Nakas of Filippos, Managing Director, executive member
4. Maria Chatzigeorgiou of Panagiotis executive member
5. Angeliki Tsagaraki of Apostolos Independent non-executive member
6. Miltiadis Barnabas, son of George Independent non-executive member
7. George Vergos of Panagiotis Independent non-executive member




Konstantinos F. Nakas: President & CEO
He was born in 1955 in Athens and is a graduate of the Department of Economics of the University of Athens. He has been involved in the trade of musical instruments since 1975 in the group of sole proprietorships of Filippos Nakas and took over the management of the Company in 1988.
George F. Nakas: Managing Director, executive member
He was born in 1958 in Athens and is a graduate of the Industrial School of the University of Piraeus. He has been involved in the trade of musical instruments since 1978 in the group of sole proprietorships of Filippos Nakas and took over the management of the Company in 1988.
Maria P. Chatzigeorgiou: Chief Financial Officer. executive member
She was born in 1960 in Lesvos and is a graduate of the School of Economics & Business (ASOEE). He has many years of experience and knowledge of the object and activities of the company and has taken over the Financial Management of the company since 2011.
Stylianos Dimitriou Vasilakis: Vice President, non-executive member
He was born in 1954 in Athens and is a graduate of the School of Economics & Business (ASOEE). He has many years of experience in the financial sector and served as Chief Financial Officer of the company from 1990 to 2010.
Angeliki Tsagaraki, Independent non-executive member
She was born in Athens in 1964 and is a graduate of the Law School of the University of Athens. She was the legal advisor of the company until her retirement.
Miltiadis Barnabas, Independent non-executive member
He was born in Athens in 1955 and is an Engineer, graduate of the Ecole des Beaux-Arts in Paris.
George P. Vergos. Independent non-executive member
He was born in 1947 in Lesvos. He has marketing studies and sales seminars for musical instruments at YAMAHA CORPORATION in Japan. He worked for the company from 1974 to 2009 as Piano Sales Manager.

Role and required qualities of the Chairman of the Board
The Chairman of the Board also exercises the duties of Managing Director and the Board of Directors has appointed an independent Vice President, coming from its non-executive members.

Duties and behavior of the members of the Board of Directors
There is no limit to the number of Boards of Directors of listed companies in which the members of the Board of Directors can participate, since the members can dedicate the necessary and sufficient time to their participation in the Board of Directors informing them about issues that concern the company and relate to their duties.
The approval of the Board of Directors is not required for the appointment of its executive member as a non-executive member in a company that is not a subsidiary or affiliate, because it is not considered critical to the interests of the company.

Functioning of the Board of Directors
The Board of Directors does not adopt a meeting calendar and a 12-month action plan, as the convening and meeting of the Board of Directors takes place, whenever required, quickly and without any malfunctions.
The Board of Directors is not supported by an executive as a Corporate Secretary. Both the Chairman and all members of the Board of Directors are provided with full secretarial and any other supportive coverage, by the experienced secretarial staff of the company, with the assistance of other executives on a case-by-case basis, whenever deemed necessary. In this way, the Board of Directors and the shareholders have at their disposal all the necessary services.
The President does not have regular meetings with the non-executive members, without the presence of the executive members, to discuss the performance and remuneration of the latter, and other related issues. All relevant issues are discussed in the presence of all members.
There are no introductory information programs for the new members of the Board of Directors, nor continuous vocational training for the other members. This is because the candidate members of the Board are always people with specific and targeted skills and experience, so that they can assist everyone based on the qualities that characterize them in the success of the company's goals.
The required sufficient resources for the recruitment of consultants (independent, external), if and when they are required, are approved by the Board of Directors.

Evaluation of the Board
There is no specific procedure for evaluating the effectiveness of the Board of Directors and its committees every two years. Also the Board of Directors does not evaluate the performance of the Chairman during a procedure chaired by the Vice Chairman or another non-executive member of the Board of Directors in the absence of a Vice Chairman. The relevant provision is deemed unnecessary, given that the Board of Directors, including its Chairman, are constantly evaluated in practice and take every care to eliminate the identified weaknesses.
The regular and non-executive members do not meet without the presence of executive members, in order to evaluate the performance of the executive members and to determine their remuneration.
Given the above, the Board does not include in the annual corporate governance statement a brief description of the evaluation process of himself and his committees.

INTERNAL CONTROL SYSTEM
1. Main features of the internal control system
The internal audit of the Company is carried out by the Internal Audit Service and is carried out in accordance with the audit program contained in the Internal Rules of Operation of the Company.
It is noted that the audit on the basis of which the relevant Report is prepared and carried out within the regulatory framework of Law 4706/2020, as in force today, and in particular in accordance with Articles 15 & 16 of this law, as well as on the basis of the provisions in Decision 5/204/2000 of the BoD of the Hellenic Capital Market Commission with number 3/348 / 19.7.2005.
During the audit, the Internal Audit Service becomes aware of all the necessary books, documents, records, bank accounts and portfolios of the Company and requests the absolute and continuous cooperation of the Management in order to provide it with all the requested information and data in order to obtain part of the reasonable assurance for the preparation of a Report which will be free from material misstatement of the information and conclusions contained therein. The audit does not include any assessment of the adequacy of the accounting policies applied as well as the reasonableness of the estimates made by the Management, as they are subject to audit by the statutory auditor of the Company.
The internal control unit has and implements internal operating regulations, which are approved by the Board of Directors, following a proposal of the audit committee.
Monitors, controls and evaluates:
aa) the implementation of the operating regulations and the Internal Control System, in particular as to the adequacy and correctness of the financial and non-financial information provided, risk management, regulatory compliance and the corporate governance code adopted by the Company:
ab) quality assurance mechanisms,
(ac) corporate governance mechanisms and
ad) compliance with the commitments contained in prospectuses and the Company's business plans regarding the use of funds raised from the regulated market.
b) Prepares reports to the audited units with findings regarding item a), the risks arising from them and the proposals for improvement, if any. The reports herein, after incorporating the relevant views of the audited entities, the agreed actions, if any, or the acceptance of the risk of non-action by them, the limitations on its scope of control, if any, the final internal proposals audit results and the results of the response of the audited units of the Company to its proposals, are submitted quarterly to the audit committee.
c) Submits at least every three (3) months to the audit committee reports, including its most important issues and proposals, regarding the tasks of cases a) and b) hereof, which the audit committee presents and submits together with its remarks to the Board of Directors.
2. The head of the internal control unit attends the general meetings of the shareholders.
3. The head of the internal control unit shall provide in writing any information requested by the Hellenic Capital Market Commission, cooperate with it and facilitate in every possible way the task of monitoring, controlling and supervising by it.

2. Audit Committee of the Company
The company, fully complying with the requirements of article 37 of Law 3693/2008 and in accordance with Law 4706/2020, elected at the meeting of the Board of Directors of July 28, 2021 an Audit Committee consisting of the following non-executive members of the Board of Directors of the company:
- Chairman: Angeliki Tsagaraki, independent non-executive member of the BoD
- Member: Stelios Vasilakis, non-executive member of the BoD
- Member: George Vergos, independent non-executive member of the BoD

Without changing or reducing the obligations of the members of the management bodies appointed by the General Meeting of shareholders or partners, the audit committee has the following obligations:

1. Monitoring the financial information process.
2. The monitoring of the effective operation of the internal control system and the risk management system as well as the monitoring of the proper operation of the internal auditors of the company.
3. Monitoring the progress of the mandatory audit of financial statements. In particular, to examine the interim and final financial statements and to certify the correct application of the accounting principles as well as the compliance of the company with the laws and regulations of the ATHEX and the Hellenic Capital Market Commission, before their approval by the Board.
4. To certify the independence and objectivity of the company's auditors.
5. The company's compliance with the code of conduct.
6. Recommendation to the general assembly for the election of the statutory auditor.
7. Informing the statutory auditor of any issues related to the course and results of the statutory audit to provide a special report on the weaknesses of the internal control system, in particular the weaknesses of the procedures related to financial information and preparation of financial statements.
The members of the audit committee report to the BoD of the company, quarterly. The chairman of the committee informs the BoD for the important issues that arise and submits to it an annual official report, while attending the Ordinary General Assembly and answering questions concerning the work of the committee. Accordingly, the audit committee is informed, quarterly by the internal auditor.
To date, there has been no need to provide non-audit services by external auditors and in this context the responsibilities of the audit committee have not been included in the development and implementation of a policy for the recruitment of external auditors regarding the provision of non-audit services and its supervision. its implementation.
IV. Remuneration and Nominations Committee
The company, fully complying with articles 11 & 12 of L4706 / 2020, elected at the meeting of the BoD of 28 July 2021 a Remuneration and Nominations Committee consisting of the following non-executive members of the BoD of the company:
- Chairman: Miltiadis Varnavas, independent non-executive member of the BoD
- Member: Stelios Vasilakis, non-executive member of the BoD
- Member: George Vergos, independent non-executive member of the BoD
The remuneration of all members of the BoD, executive and non-executive, and their form, are approved by the Annual General Meeting upon a proposal of the BoD according to the company's articles of association and article 110 of Law 4548/2018. The method of calculation and the amount of fees are adapted to the prevailing economic conditions, both of the company itself and the general, domestic and international.
The duties of the Remuneration and Nominations Committee are:
• Submitting proposals to the BoD regarding the remuneration of each of its executive members, including bonuses and remuneration based on incentives related to the distribution of shares.
• The examination and submission of proposals to the BoD and through it to the General Meeting of shareholders, when required, regarding programs for the granting of stock options or the granting of shares.
• The regular review of the salary of the executive members of the BoD and other terms of their contracts with the Company, including the compensations, in case of retirement, and the pension arrangements.
• Submitting proposals to the BoD for any remuneration-related business policy.
• The examination of the annual remuneration report of the members of the BoD.
• Defining selection criteria and appointment procedures for BoD members.
• The periodic evaluation of the size and composition of the BoD, as well as the submission to it of proposals for consideration regarding its desired profile.
• Carrying out the process of determining and selecting candidates for members of the BoD, and
• The submission of proposals to the BoD for the nomination of its candidate members.

General Assembly

Within 15 days from the General Meeting, a summary of the minutes of the General Meeting of Shareholders is posted on the company's website and the relevant announcement is published in the ATHEX Bulletin, with all the critical information about the decisions taken. The above information is considered sufficient for the purpose of informing the shareholders and the investing public.
Description of the main features of the company's internal control and risk management systems regarding the process of preparation of financial statements Internal Audit.
Internal control system is defined as the set of procedures implemented by the BoD, the Management and the rest of the company, in order to ensure the efficiency and effectiveness of corporate operations, the reliability of financial information and compliance with them applicable laws and regulations. His responsibilities include monitoring financial information, evaluating and improving risk management and internal control systems, as well as verifying compliance with established policies and procedures as defined in the Company's Rules of Procedure and applicable law.
Regarding the management of specific risks, it is mentioned above, in Chapter 3 of this report of the BoD
Information on the operation of the General Meeting of Shareholders and its basic powers as well as a description of the rights of shareholders and how to exercise them.

Mode of operation of the General Assembly
The BoD ensures the careful preparation and smooth conduct of the General Meeting of Shareholders. In this context, it facilitates the effective exercise of the rights of shareholders, who can be easily informed about the issues related to their participation in the General Meeting, including the issues of the agenda and their rights.
The General Meeting of Shareholders is the step where all the provided information and clarification is provided, in the context of a substantive dialogue between the Management and the shareholders. The company posts on its website at least twenty (20) days before the General Meeting, information on:
· The date, time and place of the convening of the General Meeting of Shareholders,
· The basic rules and practices of participation, including the right to put items on the agenda and to ask questions, as well as the time limits within which these rights can be exercised,
· Voting procedures, conditions of representation by proxy and the forms used for proxy voting,
· The proposed agenda of the meeting, including draft decisions for discussion and voting, as well as any accompanying documents,
· The proposed list of candidate members of the BoD and their CVs (if there is a question of election of members) and
· The total number of shares and voting rights at the date of convening.
At least the Chairman of the BoD of the company, the Vice President, the Chief Executive Officer, the internal auditor and the regular auditor are present at the General Meeting of Shareholders, in order to provide information and briefing on matters of their competence, which are put up for discussion and questions or clarifications requested by shareholders. The Chairman of the General Meeting will have sufficient time to ask questions from the shareholders and to answer them as completely as possible.
Basic powers of the General Assembly
The General Meeting of the company's shareholders is the supreme body of the company and is responsible for deciding on all the affairs of the company. The decisions of the General Meeting bind all shareholders and absent or dissenting.
The General Meeting of the company's shareholders is exclusively competent to decide on all matters provided in paragraph 1 of article 117 of Law 4548/2018, subject to the exceptions listed in paragraph 2 of the same article.
Shareholders' rights and ways of exercising them
In the General Assembly of the company is entitled to participate and to vote every shareholder that appears in this capacity in the files of the body in which the securities of the company are kept. The exercise of these rights does not presuppose the freezing of the beneficiary's shares or the observance of a similar procedure. The shareholders who have the right to participate in the General Meeting can be represented in it by a person who has been legally authorized. Each share provides all the rights provided by Law 4548/2018 as in force, as well as the company's articles of association.
Information on the composition and mode of operation of the BoD.
Composition of the BoD
The BoD exercises the management and management of corporate affairs for the benefit of the company and all its shareholders, ensuring the implementation of the corporate strategy and the fair and equal treatment of all shareholders, including those of the minority and foreigners. It is competent to decide on any issue that concerns the Company, except those for which by the Law or the Articles of Association, the General Meeting of Shareholders is responsible.
The company is managed by a BoD, which consists of at least five (5) to a maximum of seven (7) members. Member of the BoD a legal entity may also be appointed, which is obliged to appoint a natural person for the exercise of its powers, as a member of the BoD. The members of the BoD are elected by the General Meeting of the company's shareholders for a term of five (5) years.
The current BoD consists of 3 executive and 4 non-executive members fulfilling the conditions set by Law 4706/2020 for Corporate Governance.
The following is a list of the members of the BoD:

1. Konstantinos Nakas of Filippos President & CEO, executive member
2. Stelios Vasilakis of Dimitrios Vice President, non-executive member
3. George Nakas of Filippos, Managing Director, executive member
4. Maria Chatzigeorgiou of Panagiotis, executive member
5. Angeliki Tsagaraki of Apostolos, independent non-executive member
6. Miltiadis Barnabas, of George, independent non-executive member
7. George Vergos of Panagiotis, independent non-executive member
The term of the above BoD, which began on July 14, 2021, ends on July 13, 2026.
The following is a description of the main responsibilities of the Chairman of the BoD and CEO:
· Determines the issues of the agenda and convenes the BoD, ensures the good organization of its work and directs its Meetings.
· Represents the Company in court and out of court.
· Exercises all the powers that belong to the BoD by the statute and the Law, capable of delegating responsibilities to another member with a power of attorney.
As Chief Executive Officer, he monitors the implementation of the objectives and manages the daily affairs of the Company, always in accordance with the decisions of the General Meeting and the BoD, ensuring the smooth and efficient operation of the Company.

Mode of operation of the BoD
The BoD meets at the Company's headquarters. It is convened by the President or his deputy, or whenever requested by at least two (2) of the advisors. The BoD may meet by teleconference in accordance with article 90 par. 4 of Law 4548/2018 and the more specific minimum technical safety specifications provided by current legislation for the validity of the meeting.
The Chairman of the BoD of the company determines the issues of the agenda, convenes a meeting of the members of the BoD and chairs its Meetings. The BoD may, by a decision taken by a simple majority of its Members present and / or represented, delegate all or part of its powers, including the power of representation and commitment of the company, with the exception of those exercised collectively, to one or more persons, members or not of the BoD or third parties, determining at the same time in the above decision the extent of the above assignment.
The BoD is in quorum and meets validly if half (1/2) plus one Directors are present or represented in it, but in no case the number of Directors present in person can be less than three (3). To find the quorum number, the resulting fraction can be omitted. The BoD decides validly by an absolute majority of the Directors who are present in person or represented, except for the cases for which an increased majority is provided in the Articles of Association or in the Law.
A Director who is absent for any reason from a meeting is entitled to be represented by another Director, but in no case may a member of the BoD represent more than one Directors.
According to article 5 par. 3 of Law 4706/2020 in the meetings of the BoD which have as their subject the preparation of the financial statements of the Company, or whose agenda includes issues for the approval of which a decision is foreseen by the general meeting with increased quorum and majority, according to law 4548/2018, the Administrative BoD is quorum when at least two (2) independent non-executive members are present. In case of unjustified absence of an independent member in at least two (2) consecutive meetings of the BoD, this member is considered resigned. This resignation is established by a decision of the BoD, which replaces the member, in accordance with the procedure of par. 4 of article 9.