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Governance Information • Apr 30, 2024

COMPLIANCE QUESTIONAIRE FOR ISSUERS OF SHARES

All questions contained in this questionnaire relate to the period of one calendar year.

The Corporate Governance Code is intended for companies with two-tier governance structure considering that such a governance structure is most common in companies whose shares are listed on the Zagreb Stock Exchange. If the issuer has a one-tier structure, the questionnaire on management practices is answered in accordance with Appendix B of the Code of Corporate Governance

Companies respond to questions from the compliance questionnaire with YES, NO or Partially by selecting answers from a drop-down menu for each question. For questions where company has responded with YES column Explanation is not filled.

• For questions where company has responded with NO or PARTIALLY in the column Explanation it should explain why this is so, that is:
• explain in which part it does not comply with the provisions of the Code and for what reason,
• describe the measures taken in the place of compliance with provisions of the Code in order to fulfill the objectives set out in the relevant principles of the Code - if the company intends to comply with the provisions of the Code in the future, indicate when it will start to act accordingly.

Instructions for generating XML Schema from XLS files are published on Hanfa's website under Technical instructions and forms in section Transparency of the issuer.

	Institution
Year	code
2023	90298
Instructions:	* Year is entered without period (eg. 2019)
		* Enter the year for which data are entered in the questionnaire

Instructions:

• * Year is entered without period (eg. 2019)
• * Enter the year for which data are entered in the questionnaire

				ANSWER
CHAPTER	PROVISION	ARTICLE	QUESTION	(Each question is answered by chosing the answer from the drop-down menu)	EXPLANATION (fulfill only for questions that were answered with "NO" or "PARTIALLY")
1	Cooperation	1	The articles of association and/or other internal acts clearly define the powers of the supervisory board and management board.	YES
1	Cooperation	1	The articles of associationand/or other internal acts are available free of charge on the website of	YES
1	Cooperation	2	the company. The supervisory board has adopted a decision in which it stated categories of decisions and legal transactions that require prior approval by the supervisory board and those decisions about which management board must consult with the supervisory board before making a decision, and a summary thereof is available free of charge on the website of the company.	YES
1	Cooperation	2	The articles of association and/or internal company acts provide for prior consent of the supervisory board for making important decisions that affect the strategy of the company, expenses, risk exposure and reputation.	YES
1	Cooperation	3	The articles of association and/or internal company acts stipulate that the supervisory board and its committees have timely access to documents, premises and employees when necessary for the performance of their duties.	YES
1	Cooperation	4	The articles of association and/or other internal company acts stipulate that the management board must report to the supervisory board at regular intervals on the operating results of the company, financial situation, substantial financial and non-financial risks and results of interaction with shareholders and other stakeholders.	YES
1	Cooperation	5	Statutes and/or internal company documents stipulate that the president of the management board shall immediately notify the supervisory board if there is or is likely for an event to arise that has the potential to significantly affect the results, financial position or reputation of the company.	YES
1	Rules of conduct	6	The supervisory board approved the code of conduct (or other internal act), which establishes rules of conduct to be followed by members of the management and supervisory board members, employees and others acting on behalf of the company, which also contains rules and measures to be taken in case of its violations.	YES
1	Rules of conduct	6	Code of Conduct (or other internal act) is available free of charge on the website of the company.	YES
2	Conflict of interest	7	For members of the management board and the supervisory board the prohibition of participation in decision-making in relation to which there are conflicts of interest is stipulated.	YES
2	Conflict of interest	7	The supervisory board has given prior consent to the policy for managing conflicts of interest.	YES
2	Conflict of interest	7	The policy for managing conflicts of interest is available free of charge on the website of the company.	YES
2	Conflict of interest	8	Members of the supervisory board are obliged to inform the entire supervisory board that they are in an actual or potential conflict of interest.	YES
2	Conflict of interest	8	Management board members have a duty to inform the president of the supervisory board and other members of the management board of an actual or potential conflict of interest.	YES
2	Conflict of interest	8	The supervisory board keeps records of all notices pertaining to conflict of interest.	YES
2	Conflict of interest	9	Member of the management board or the supervisory board has an obligation to inform the President and/or Vice-President of that board if it considers that another member of management or supervisory board is in an actual or potential conflict of interest.	YES
2	Competition ban	10	Members of the supervisory board and management do not perform activities that compete with the business of the company, are not members of the management or supervisory boards of the companies that carry out such activities nor hold more than 5% stake in such companies.	YES
2	Competition ban	10	Members of the management board and the supervisory board who hold shares in the companies with which the company is in the competition, informed the secretary of the company of all the shares in such companies and the details of these shares are available free of charge on the website of the company.	NO	Members of the Management Board and the Supervisory Board do not own shares in the companies which are in the competition with the Company.
2	Related party transactions	11	No transactions between members of the management or supervisory board and the company (or a person affiliated with any party) can not be concluded without the prior consent of the supervisory board.	YES

		The fair value of each material transaction must be confirmed by an independent expert prior to
Related party transactions	11	any such transaction, and his or her report has to be available free of charge on the website of	YES
		the company. The company has adopted procedures for the approval and disclosure of transactions between
Related party	12	members of the management or supervisory board and the company (or a person affiliated with	YES
transactions		any party).
Related party	12	The audit committee annually assesses the effectiveness of these procedures.	YES
transactions		The supervisory board is responsible for appointing and dismissing members of the management
The role of the	13	board and making recommendations for candidates for members of the supervisory board to the	YES
supervisory board		general meeting.
The role of the	13	The supervisory board has approved formal and transparent procedure for the appointment to	YES
supervisory board		both management and supervisory boards. The supervisory board has set as a target percentage of female members of the supervisory
The role of the	14	board and the management board, which must be achieved in the next five years and adopted a	PARTIALLY	The target percentage of female members was achieved in 2023, and the Supervisory Board has 60% female members. The implementation plan is being
supervisory board		plan for the implementation of this goal. Percentage on target and plan were published in the		prepared.
The role of the		annual report.
supervisory board	14	A report explaining progress on the plan has been published in the annual report.	YES	Please see answer on the previous question
The role of the
nomination	15	The nomination committee has all the tasks listed in Article 15 of the Code.	YES
committee Election of
supervisory board		When nominating candidates for the supervisory bord to the general meeting for election the
members by the	16	company provides information within the general meetin materials on the items requested by Article 16. of the Code.	PARTIALLY	Only information on the candidate's independence is not listed.
general meeting
Election of supervisory board
members by the	16	Informations provided by Article 16 of the Code are freely available on the company`s website.	YES
general meeting
Election of
supervisory board members by the	17	Materials for the general meeting contain all the information listed in Article 17 of the Code.	NO	No current members of the supervisory board were elected
general meeting
Election of		The information referred to in Article 17 of the Code is available free of charge on the website of
supervisory board	18	the company also in cases where workers' representative or another member of the supervisory	NO	The workers' representative is elected for the first time.
members by the general meeting		board which is not elected by the shareholders at the general meeting is apointed.
Responsibilities of		The terms od reference of the supervisory bord include all the responibilities set in Article 19. of
the supervisory	19	the Code.	YES
board		The supervisory board has developed a supervisory board profile which specifes the minimum
Composition	20	number of members and combination od skills, knowledge and education, as well as	YES
		professionaln and practical experience that required in the supervisory board.
Composition	21	The supervisory board includes members of different gender, age, profile and experience to	YES
		ensure a diversity perspective when making decisions. Majority of the members of the supervisory board are independent in accordance with the
Composition	22	definition set out in Appendix A of the Code.	YES
Composition	22	The President or deputy president of the supervisory board are independent.	YES
President	23	The president of the supervisory bord is responible for the activities listed in Article 23. of the	YES
Board committees	24	Code. Supervisory board established the nomination committee.	YES
Board committees	24	Supervisory board established the renumeration committee.	YES
Board committees	24	Supervisory board established the audit committee.	YES
Board committees	24	The supervisory board stipulated the manadate and activities of each committee.	YES
		Each committee of the supervisory board consists of members who have the necessary skills,
Board committees	26	knowledge and education, as well as professional and practical experience to carry out the committee responsibilities effectively.	YES

4	Board committees	27	Each committee of the supervisory board has at least three members.	YES
4	Board committees	27	Majority of the members of each committee of the supervisory board are independent (as defined in Appendix A of the Code).	YES
4	Board committees	27	Board members are prohibited to be members of the committee of the supervisory board.	YES
4	Board committees	28	The terms of reference of each committee is made freely available on the company's website	YES
4	Board committees	28	The Company's annual report includes a report on the work of each committee of the supervisory board as well as information on the number of meetings held and the members of the committee.	YES
4	Time commitment	29	The minimun expected time commitmnet of each supervisory board member is specified on their	YES
4	Time commitment	29	appointment. The annual report includes record of attendance at the meetings for each member of the supervisory board and its committees.	PARTIALLY
4	Time commitment	30	The articles of association and/or internal company acts stipulate the obligation of the supervisory board member to inform the secretary of the company about their membership in the supervisory board or the management board of other companies.	YES
4	Frequency and format of meetings	31	The supervisory board meets at least every three months.	YES
4	Frequency and format of meetings	31	The supervisory board has adopted a workplan that includes time and agenda of future meetings.	YES
4	Frequency and format of meetings	31	Committees of the supervisory board shall meet as often as necessary for the effective discharge of their duties, and regularly report to the supervisory board on its activities.	YES
4	Frequency and format of meetings	32	The supervisory board can meet without the participation of the management board where it considers it appropriate.	YES
4	Frequency and	32	Non-Board committee memebers can participate in committee meeting only at the invitation of	YES
4	format of meetings Support	33	the committee. The company has designated an individual to carry out the duties of a company secretary.	YES
4	Support	33	secretary is responsible for ensuring that supervisory board procedures are complied with, advising the supervisory board on governance matters, supporting the president of the	YES
4	Quality and timeliness of	34	supervisory board and helping the supervisory board and committees to function efficiently. The board terms of reference and/or internal acts require the materials for supervisory board meetings to be provided to all its members at least one week before the meeting.	YES
4	information Quality and timeliness of	34	The bord committee terms of reference and/or internal acts require the materials for board committee meetings to be provided to all its members at least one week before the meeting.	YES
4	information Quality and timeliness of	35	The articles of association and/or internal company acts anticipate that the minutes of the meeting of the supervisory board must be available to all members of the supervisory board.	YES
4	information Quality and timeliness of	35	Supervisory Board meeting minutes provide data on voting results including details of how individual members voted.	YES
4	information Quality and timeliness of information	36	The supervisory board has the right to receive information and advice from people outside the company at the expense of the company if it considers it necessary to successfully carry out its duties, provided that the procedure for it is specified in the internal documents of the company issued by the management board with the consent of the supervisory board.	YES
4	Training and development	37	All members of the supervisory board at the time of appointment received introduction training for their role.	PARTIALLY	Individual members of the Supervisory Board have many years of experience in managing and supervising companies
4	Training and development	37	All supervisory bord members receive ongoing training and education to improve their sills and knowledge.	YES
4	Training and development	38	The supervisory board members receive regular updates and briefings from the management board and experts on matters relevant to the company and to their duties.	YES
4	Supervisory board evaluation	39	The supervisory board evaluated its effectiveness in the past 12 months.	YES
4	Supervisory board evaluation	39	The supervisory board assessed the individual results of its members in the last 12 months.	YES
	Supervisory board		The evaluation of the supervisory board was led by the president or deputy president.	YES

4	Supervisory board evaluation	40	The evaluation of the supervisory board included an assessment of all the matters specified in Article 40 of the Code	YES
4	Supervisory board evaluation	41	The annual report includes the assessment report of the supervisory board and its committees in which they assessed all the circumstances set out in Article 41 of the Code.	YES
	Responsibilities of
5	the management bord	42	The duties of management board include all the activities listed in Article 42 of the Code.	YES
5	Responsibilities of the management	43	The supervisory board has approved internal rules of procedure adopted by the management	YES
	bord		board that define the matters specified in Article 43. of the Code.
5	Responsibilities of the management	44	In the case of groups, the management board of the parent company is obliged to ensure effective oversight over the activities of other companies in the group.	YES
	bord Responsibilities of
5	the management bord	44	The articles of association and/or internal company acts contain rules governing responsibilities and reporting procedures at the level of the parent company and subsidiaries.	YES
			The supervisory board ensures that management maintains a profile of the management board
5	Composition	45	which determines the minimum number of members and a combination of members who possess the skills, knowledge and education, as well as professional and practical experience that are	YES
			required for management board. The president of the management board is formally responsible for the activities listed in Article
5	The president	46	46. of the Code.	YES
5	Limits on other appointments	47	Internal company documents provide that the members of the management board must obtain the prior consent of the supervisory board before accepting appointment to the management	YES
	Limits on other		board or supervisory board which is not part of the same group. Internal documents of the company provide that board members are prohibited from holding more
5	appointments	47	than two positions in the management or supervisory board of other such companies. The supervisory board in the last 12 months, evaluated the effectiveness of arrangements for	YES
5	Board evaluation	48	cooperation between the supervisory board and the management board, as well as the adequacy	YES
5	Board evaluation	48	of support and information received from the management board. Results of the evaluation of arrangements for cooperation between the supervisory board and	YES
			management are included in the annual report. The management board has evaluated its own effectiveness and that of its individual members in
5	Board evaluation	49	the last 12 months.	YES
5	Board evaluation	49	The management board has reported the conclusions of the evaluations of its members to the supervisory board.	YES
6	Role of remuneration	50	The duties of the remuneration board include all the activities listed in Article 50 of the Code.	YES
	committee Remuneration of		The supervisory board determines the annual remuneration of of each member of the
6	management board	51	management board, based on recommendations of the remuneration committee and in	YES
	members Remuneration of		accordance with the approved remuneration policy. The level of receipts of members of the management board takes into account the agreed
6	management board members	52	strategy, risk appetite, the economic environment in which the company operates as well as wages and conditions of workers within companies.	YES
	Remuneration of		Remuneration policy provides that a management board member may not dispose of the shares
6	management board members	53	assigned to it as part of the remuneration at least two years from the date on which the shares were assigned to him or her.	NO
6	Remuneration of management board	53	Remuneration policy provides that a management board member may not make use of stock options assigned to him or her as part of the remuneration for at least two years from the date on	NO
	members		which stock options were assigned to him or her.
6	Remuneration of management board	53	Remuneration policy includes provisions that closely define the circumstances in which a portion of the remuneration of management board member was put on hold or to was asked to be	YES
	members Remuneration of		returned. Remuneration level for the president of the supervisory board and of other members of the
6	supervisory board members	54	supervisory board reflects the time commitment and responsibilities, including the time commitment and responsibilities in the committees of the supervisory board.	YES

6	Remuneration of supervisory board members	55	Remuneration policy and/or internal company documents prohibit the inclusion of variable elements or other elements related to performance in the remuneration of the supervisory board.	YES
6	Reporting on remuneration	56	Remuneration policy of the company was approved by shareholders at a general meeting.	YES
6	Reporting on remuneration	56	The company has made freely available on its website its remuneration policy, as approved by the shareholders.	YES
6	Reporting on remuneration	57	Annual report on remuneration includes data on remuneration of each individual member of the supervisory board as well as other information contained in Article 57 of the Code.	YES
7	Roles of the supervisory and management boards	58	Management board, with the prior approval of the supervisory board, adopted a policy that determines the nature and extent of risk that company needs and that is willing to take in order to achieve all the long-term strategic objectives ( "risk appetite").	YES
7	Roles of the supervisory and management boards	59	The management board is formally responsible for the activities listed in Article 59 of the Code.	YES
7	Role of the audit committee	60	Terms of reference of the audit committee includes all activities listed in Article 60 of the Code.	YES
7	Role of the audit committee	61	The audit committee, the supervisory board or one of its committees, undertook the activities referred to in Article 61 of the Code.	YES
7	Relations with the external auditor	62	The audit committee oversees the process of selection and appointment of external auditors in accordance with the legal requirements and makes recommendations to the supervisory board for the selection of the external auditor and conditions for their appointment.	YES
7	Relations with the external auditor	63	The audit committee in the last 12 months approved the work plan of the external auditors, which includes the scope and content of the activities to be audited.	YES
7	Relations with the external auditor	63	The audit committee shall meet as necessary with the external auditors to discuss the issues that have been identified during the audit and to oversee the quality of services provided.	YES
7	Relations with the external auditor	64	The audit committee if responsible for monitoring the independence and objective of external auditor.	YES
7	Relations with the external auditor	64	The audit committee approved a policy on permitted non-audit services provided by the external auditor.	YES
7	Risk management and internal control	65	The audit committee evaluated the effectiveness of risk management and internal control system as a whole at least once a year.	YES
7	Risk management and internal control	65	The audit committee, where appropriate, makes recommendations to the supervisory board and management board regarding the effectiveness of risk management and internal control systems.	YES
7	Risk management and internal control	66	The company maintains an effective risk management system that provides reliable identification of risk measurement, answers, reporting and supervision.	YES
7	Risk management and internal control	66	The company has determined clear internal responsibilities for the maintenance of the risk management system and a clear procedure for maintaining contact between persons responsible and the audit committee.	YES
7	Risk management and internal control	67	The company has established an internal audit function responsible for monitoring the effectiveness of internal control systems, including risk management.	YES
7	Risk management and internal control	67	The audit committee approved the internal audit plan in the last 12 months.	YES
7	Risk management and internal control	67	The audit committee receives reports of internal auditors and monitors the implementation of its recommendations.	YES
7	Risk management and internal control	68	The audit committee shall recommend to the supervisory board the appointment or dismissal of the heads of the internal audit function.	YES
7	Risk management and internal control	68	If the company des not have internal audit function, the audit committee has once in the last 12 months evaluated the need for this function as part of its assessment of internal control systems.	NO	There is an internal audit function in the Company.
7	Whistle-blowing	68	Management board, with the prior approval of the supervisory board, adopted a procedure for reporting violations of laws or internal rules of the company, actual or in the case of suspected violation.	YES
7	Whistle-blowing	69	The procedure ensures that workers and external stakeholders do not suffer negative consequences if they report suspicious behavior.	YES

7	Whistle-blowing	69	Details of the procedure for registration are available free of charge on the website of the company.	YES
7	Whistle-blowing	70	Statute and/or internal company documents stipulate the duty of the management board to inform the supervisory board of any irregularities and and to agree on measures that must be	YES
7	Whistle-blowing	70	implemented. The audit committee evaluated the effectiveness of the procedure and its application in the last	YES
8	Use of the company website	71	12 months. All information that the company is required to disclose in accordance with the law, rules on the listing, the Code and its own Articles of Association are available free of charge on the website of	YES
8	Use of the company	72	the company. The company makes freely available and easily accessible on the website all the information	YES
	website Use of the company		requested by Article 72 of the Code. The company ensures that the information on the website is kept up to date and published in
8	website Use of the company	73	accordance with time limits prescribed in law and regulations.	YES
8	website	73	All data on the website are freely available in both Croatian and English.	YES
8	Annual report	74	The annual report contains all the information referred to in Article 74 of the Code. The Company ensured that all shareholders, regardless of the number or type of shares they	YES
9	Relations with shareholders	75	hold, have equal access to information about the company and about the way they can carry and protect their rights.	YES
9	Relations with shareholders	76	The Company has established an effective formal mechanisms to ensure minority shareholders the possibility of asking questions directly to president of the management board and president of the supervisory board, and the details of the functioning of these mechanisms are available free of charge on the website of the company.	PARTIALLY	Asking questions is possible through the person in charge of investor relations, whose contact information is listed on the Company's website. Direct questions can be asked at the General Assembly of the Company.
9	Relations with shareholders	77	The Company has selected a person that will for all shareholders be the person to contact in relations with investors, and contact of this person is available free of charge on the website of	YES
9	General meeting	78	the company. The articles of associationand/or internal rules of the company do not in any way limit the ability	YES
		79	of shareholders to call a general meeting, to participate in it or to add items to the agenda. The articles of association and/or internal company documents allow shareholders the	YES
9	General meeting		opportunity to exercise their right to vote by proxy without restriction.		The Company's Article of Association authorizes the Management Board to enable
9	General meeting	79	The articles of associationand/or internal company documents allow shareholders the opportunity to exercise their right to vote electronically without restrictions.	PARTIALLY	shareholders of the Company to exercise all their rights in full, by certain conditions, via video conference.
9	General meeting	79	Explanation of other ways in which shareholders can exercise its right to vote are set out in the documents for the general meeting.	YES
9	General meeting	80	Notice of the general meeting is published no later than 30 days before it is held. The agenda, decisions and all other materials required for the general meeting are available free	YES
9	General meeting	80	of charge on the website of the company.	YES
9 9	General meeting General meeting	80 81	All documents are available in English and Croatian language. All persons referred to in Article 81 of the Code were present at the general meeting in the past	YES YES
9	General meeting	81	12 months. The external auditor was present at the general meeting where financial statements are	YES
9	General meeting	82	presented. The company has made the desicions of a general meeting freely available on its website without	YES
9	General meeting	82	delay. Within 30 days from the date of the general meeting the company has made available on its	NO	No questions were asked at the General Assembly.
	Corporate social		website free of charge answers to questions raised at the general meeting. The supervisory and managent boards have agreed and adopted policies listed in Article 83 of
10	responsibility Corporate social	83	the Code.	YES
10	responsibility	83	These policies are available free of charge on the company's website.	YES
10	Corporate social responsibility	84	When the management board asks prior consent from the supervisory board for the decisions, accompanying documents explain how the recommended measure is in line with the policies associated with the impact assesment of company's activities on the environment and the community, with the policies associated with the preservation of human rights and workers' rights		Not applicable to all decisions
			and the measures associated with prevention and sanctioning of corruption and bribery. The supervisory board and management board jointly identified which are considered key	YES

10	Stakeholder engagement	85	Management board has ensured the existence of effective mechanisms for regular interaction with key stakeholders, as well as to inform the supervisory board about the results of these communications.	YES
10	Stakeholder engagement	86	The supervisory board is authorized, subject to prior notification to the president of the management board, to organize meetings with external stakeholders when it deems it necessary.	YES
10	Stakeholder engagement	87	In the mandate of every committee of the supervisory board it is provided for what purpose president of the committe may communicate directly with stakeholders and what procedure to follow.	PARTIALLY	Communication with stakeholders is part of the process of creating the Sustainability Report, which is systematically improved every year. Stakeholders are included in Focus Groups dealing with sustainability topics.