Magyar Telekom Távközlesi Nyilvánosan Müködö Reszvenytársaság : Corporate Governance and Management Report of Magyar Telekom Plc. for the business year 2021

CORPORATE GOVERNANCE AND MANAGEMENT REPORT OF MAGYAR TELEKOM PLC.

FOR THE 2021 BUSINESS YEAR

Approved by the Board of Directors of Magyar Telekom Plc. on February 23, 2022 with Resolution No. 1/14 (02.23.2022) and the Supervisory Board on March 8, 2022 with Resolution No. 1/6 (03.08.2022).

The Corporate Governance and Management Report was approved with Resolution No. 12/2022 (IV.12.) by the Annual General Meeting of the Company held on April 12, 2022.

INTRODUCTION

The Board of Directors of Magyar Telekom Telecommunications Public Limited Company (hereinafter "Magyar Telekom" or "Company") based on the Corporate Governance Recommendations of the Budapest Stock Exchange Zrt. ("BSE"), and the provisions of Act V of 2013 on the Civil Code ("Civil Code"), approves and submits to the Annual General Meeting with the approval of the Supervisory Board the below Corporate Governance and Management Report for the 2021 business year.

1. A BRIEF PRESENTATION OF THE OPERATION OF THE BOARD OF DIRECTORS, AND A DESCRIPTION OF THE DIVISION OF RESPONSIBILITY AND DUTIES BETWEEN THE BOARD OF DIRECTORS AND THE EXECUTIVE MANAGEMENT

Magyar Telekom's Board of Directors ("Board" or "Board of Directors") shall be the management body of the Company and shall represent the Company with regard to third parties, in court and before other authorities. The Board of Directors exercises its rights and performs its obligations as an independent body.

The members of the Board of Directors shall conduct the management of the Company by giving primacy of the interests of the Company. The members of the Board of Directors shall be held liable for damages caused to the Company resulting from their management activities in accordance with the rules pertaining to damages for loss caused by breach of contract. The Company shall be held liable for damages caused to a third party by the members of the Board of Directors in connection with their conduct in such capacity. The Board of Directors and the Company shall be held jointly and severally liable, if the damage was caused intentionally by the members of the Board of Directors.

The Board of Directors is not an operative management body, in other words, the Board of Directors is not involved in the Company's daily business. The Board of Directors is responsible for all matters relating to the Company's management and course of business not otherwise reserved to the General Meeting ("General Meeting") or to other corporate bodies by the Articles of Association of the Company ("Articles of Association") or by the law. Among other responsibilities, it approves the Company's strategy, business plan, major organizational changes and key transactions, concludes employment agreements with and removes the Chief Executive Officer ("CEO") and the Chief Officers.

2. THE INTRODUCTION OF THE MEMBERS OF THE BOARD OF DIRECTORS, THE SUPERVISORY BOARD AND THE EXECUTIVE MANAGEMENT (IN THE CASE OF BOARD MEMBERS, INCLUDING THE STATUS OF INDEPENDENCE OF THE DIFFERENT MEMBERS), A DESCRIPTION OF THE STRUCTURE OF COMMITTEES

Introduction of the members of the Board of Directors, the Supervisory Board of Magyar Telekom ("Supervisory Board") and the management is available at the website of Magyar Telekom:http://www.telekom.hu/about_us/investor_relations/corporate_governance/board_of_directorshttp://www.telekom.hu/about_us/investor_relations/corporate_governance/supervisory_boardhttps://www.telekom.hu/about_us/investor_relations/corporate_governance/management

The Board of Directors shall be comprised of a minimum of five (5), and a maximum of eleven (11) members. The members of the Board of Directors shall be elected by the General Meeting. On December 31, 2021, the Board of Directors had eight (8) members. The assignment of the members of the Board of Directors, unless otherwise provided by the General Meeting, lasts for a term of three years until May, 31 of the third year subsequent to the date of the said General Meeting with the exception, that if the General Meeting in the third year is held prior to May 31 than their assignment lasts until the date thereof. The members of the Board of Directors can be removed or re-elected at any time by the General Meeting. Unless otherwise provided by a separate arrangement, the removal of, or failure to re-elect, a member of the Board of Directors shall not affect the employment rights of such person in respect of the Company where such member of the Board of Directors is also an employee of the Company.

The Board of Directors operates based on its Rules of Procedure.

The Civil Code does not include requirements with regard to the independency of the members of the Board of Directors if besides the Board of Directors there is also a supervisory board operating at the company. Independent members of the Board of Directors: Gábor Fekete, Frank Odzuck and Péter Ratatics.

According to the Articles of Association the Supervisory Board shall be comprised of five (5) members. The members shall be elected by the General Meeting. The assignment of the members of the Supervisory Board, unless otherwise provided by the General Meeting, lasts for a term of three years until May, 31 of the third year subsequent to the date of the said General Meeting with the exception, that if the General Meeting in the third year is held prior to May 31 then their assignment lasts until the date thereof. Three members of the Supervisory Board must be independent from time to time in accordance with the applicable provisions of the Civil Code and two members of the Supervisory Board must be employees of the Company. The Supervisory Board carries out its activities based on its Rules of Procedure that is established by the Supervisory Board.

Independent members of the Supervisory Board according to the Civil Code: Prof. dr. Attila Borbély, Krisztina Dorogházi and András Szakonyi.

The detailed rules on the tasks, competences and operation of the Board of Directors and the Supervisory Board are contained in their Rules of Procedures:https://www.telekom.hu/static-tr/sw/file/20200922_MT_BoD_RoP_ENG.pdfhttps://www.telekom.hu/static-tr/sw/file/20210608_MT_SB_RoP.pdf

3. THE NUMBER OF MEETINGS HELD IN THE RELEVANT PERIOD BY THE BOARD OF DIRECTORS, SUPERVISORY BOARD AND COMMITTEES, INCLUDING THE NUMBER OF MEMBERS ATTENDING

Section 5 discusses the work of the individual committees in detail, therefore, we analyzed here the above parameters with regard to the Board of Directors and the Supervisory Board.

In business year 2021 the Board of Directors held four (4) meetings in accordance with its Preliminary Meeting Schedule and held one (1) extraordinary meeting at which the overall rate of attendance of the members (either personally or by means of any electronic communication) was 95%. The Board of Directors adopted resolutions without holding a meeting in writing in two (2) cases.

The most important issues discussed by the Board of Directors in year 2021 were as follows:

• ▪ Magyar Telekom Group strategy, Objectives and Key results of the Company;

• ▪ business planning for years 2022-2025;

• ▪ monitoring financial performance;

• ▪ decision in the matters set on the published agenda of the Annual General Meeting, including the proposal to the General Meeting on the approval of the year 2020 financial statements, the use of the profit for the year earned in 2020 and the dividend1;

• ▪ cooperation with Deutsche Telekom AG;

• ▪ M&A decisions;

• ▪ risk management of Magyar Telekom Group;

• ▪ review of the Compliance program;

• ▪ review of the activities of the Company's Internal Audit organization.

The Supervisory Board held four (4) meetings in business year 2021 at which the average rate of participation was 95%.

The most important issues discussed by the Supervisory Board in 2021 were as follows:

• ▪ submissions on the agenda of the General Meeting;

• ▪ Magyar Telekom Group strategy, Objectives and Key results of the Company

• ▪ Business Plan of the Magyar Telekom Group 2021-2024;

• ▪ report of the Board of Directors on the management, financial status and the business policy of the Company;

• ▪ Magyar Telekom Group's Financial Reports;

• ▪ reports on the activity of the Company's Internal Audit organization;

• ▪ Annual Audit Plan of the Company's Internal Audit organization;

• ▪ review of the Compliance program;

• ▪ report on the activities performed by the Audit Committee in 2020;

• ▪ report on the audit tendering process of Magyar Telekom Nyrt.

1 Based on Government Decree no. 502/2020. (XI.16.) the Board of Directors of the Company decided in the matters set on the published agenda of the Annual General Meeting.

4. THE PRESENTATION OF VIEWPOINTS CONSIDERED WHEN EVALUATING THE WORK OF THE BOARD OF DIRECTORS, THE SUPERVISORY BOARD, THE EXECUTIVE MANAGEMENT, AS WELL AS OF THE DIFFERENT MEMBERS. REFERENCE TO WHETHER EVALUATION CARRIED OUT IN THE RELEVANT PERIOD HAS RESULTED IN ANY CHANGES

The year 2021 self assessment of the Board of Directors is published on the web site of the Company. The self assessment primarily focused on:

• ▪ the performance of tasks belonging to the scope of authority according to the Articles of Association and the Rules of Procedure of the Board of Directors;

• ▪ the shareholder relations;

• ▪ the enforcement of the strategic and business plans of the Company;

• ▪ compliance; and

• ▪ the assessment of the legal and ethical requirements.

The following aspects were considered in assessing the Board of Directors members:

• ▪ Dr. Robert Hauber: Master and doctoral degree in business administration. Over 20 years of experience as a senior finance executive. Chairperson of the Board of Directors.

• ▪ Daria Dodonova: Master degree in International Finance. Over 15 years of experience in various management positions. Chief Financial Officer of the Company.

• ▪ Gábor Fekete: Holds a Mechanical Engineer degree. Thorough his career, he has gained experience in several managerial positions. Independent member of the Board of the Directors.

• ▪ Ralf Nejedl: University degree in business administration. Over 15 years of experience in telecommunications in various management positions.

• ▪ Frank Odzuck: Degree in economics. Many years of professional experience in the position of managing director of the Hungarian subsidiaries of international corporations. Independent member of the Board of Directors.

• ▪ Péter Ratatics: Graduated in economics. Over 10 years of management experience in various positions. Independent member of the Board of Directors.

• ▪ Tibor Rékasi: Graduated from the Budapest Foreign Trade College. Over 20 years of experience in various managerial positions. Directed Magyar Telekom's Enterprise (T-Systems Magyarország Zrt.) and Residential businesses as a Chief Officer. Chief Executive Officer of the Company.

• ▪ Éva Somorjai-Tamássy: Completed her studies at the College for Commerce and Catering. Over 15 years of experience in the telecommunications industry in various management positions.

Within the framework of the year 2021 performance evaluation of the Supervisory Board the following viewpoints - among others - were taken into account:

• ▪ whether the organization and members of the Supervisory Board, the operation of the Supervisory Board was ensured in business year 2021 as prescribed in the Rules of Procedure of the Supervisory Board;

• ▪ whether the Supervisory Board, based on its legal status, scope of authorities and responsibilities as included in its Rules of Procedure, properly fulfilled its tasks in business year 2021;

• ▪ whether the Supervisory Board deems it necessary to take further actions or follow-up steps in the individually assessed cases.

Within the framework of the evaluation of the year 2021 performance of the Supervisory Board the following viewpoints were taken into account at the assessment of the individual members and also whether based on these viewpoints their relevant competence was ensured:

• ▪ Prof. dr. Attila Borbély: Expertise in finance, experience in sales and marketing field, as well as in higher education. Over 20 years of experience in various management positions and as chairman and member of Supervisory Board of many companies. Independent member and chairperson of the Supervisory Board.

• ▪ Krisztina Dorogházi: Expertise in finance, experience as audit manager. In her current position at a global company, listed on the New York Stock Exchange, she is responsible for SOX compliance and compiling financial statements prepared according to USGAAP and IFRS. Over 15 years of experience in various management positions. Independent member of the Supervisory Board.

• ▪ Tamás Lichnovszky: Expertise in technical and legal field, experience in customer care area, as representative in Workers' Council, as member and chairman of the Central Workers' Council.

• ▪ András Szakonyi: Expertise in corporate finance, experience as CFO and financial management positions. Over 15 years of experience in various senior management positions. Independent member of the Supervisory Board.

• ▪ Zsoltné Varga: Expertise in technical field, experience in sales and customer care, as employees' representative, as official of the Workers' Council, as member of the Central Workers' Council, as Deputy Chairwoman of European Workers'

  Council of Deutsche Telekom and as Chairwoman of the Central Functions Workers Council.

5. REPORT ON THE OPERATION OF DIFFERENT COMMITTEES, INCLUDING THE INTRODUCTION OF THE MEMBERS OF THE COMMITTEES (PROFESSIONAL BACKGROUND), THE NUMBER OF MEETINGS HELD, THE NUMBER OF MEMBERS ATTENDING THE MEETINGS, AS WELL AS THE MOST IMPORTANT ISSUES DISCUSSED AT THE MEETINGS AND THE GENERAL OPERATION OF THE COMMITTEE. IF THE BOARD OF DIRECTORS HAS PASSED A RESOLUTION ON AN ISSUE CONTRARY TO THE RECOMMENDATIONS OF THE AUDIT COMMITTEE, THE PRESENTATION OF THE OPERATIONS OF THE AUDIT COMMITTEE SHALL INCLUDE THAT FACT (AS WELL AS THE REASONS OF THE BOARD OF DIRECTORS FOR DOING SO). IT IS RECOMMENDED THAT REFERENCE BE MADE TO THE COMPANY'S WEBSITE, WHERE THE TASKS DELEGATED TO THE COMMITTEES, THE RULES OF PROCEDURE OF THE COMMITTEES AND THE DATE OF APPOINTING THE MEMBERS SHOULD BE DISCLOSED.

Audit Committee of Magyar Telekom ("Audit Committee")

Members of the Audit Committee:

• ▪ Prof. dr. Attila Borbély

• ▪ Krisztina Dorogházi

• ▪ András Szakonyi

Introduction of the members of the Audit Committee is available at the web site of Magyar Telekom:http://www.telekom.hu/about_us/investor_relations/corporate_governance/audit_committee

The General Meeting elects a 3-member Audit Committee from the independent members of the Supervisory Board for the same period as the membership of the relevant members in the Supervisory Board.

The purpose of the Audit Committee is to support the Supervisory Board in supervising the financial reporting system, in selecting the statutory Auditor and in cooperating with the statutory Auditor.

The Audit Committee operates based on its Rules of Procedure. The Audit Committee establishes its own Rules of Procedure which is approved by the Supervisory Board.

The Audit Committee held four (4) meetings in accordance with its Preliminary Meeting Schedule and three (3) extraordinary meetings in the previous business year of 2021, with 100% average participation rate. The Audit Committee made further written resolutions without holding a meeting on four (4) occasions.

The Chief Financial Officer, the chief legal counsel of the Company, the head of the Company's Internal Audit organization, the head of the Company's Compliance organization and the representatives of the statutory Auditor, PricewaterhouseCoopers Könyvvizsgáló Kft. ("PwC") participated at the meetings of the Audit Committee - except for the discussion of agenda items discussed within the framework of closed meetings by the decision of the Audit Committee.

The Audit Committee, during the cooperation with the statutory Auditor - inter alia - discussed the below subject matters with the statutory Auditor:

• ▪ formal written statement of PwC specifying its relationship with the Company in accordance with the respective law;

• ▪ Y2020 financial statements audit;