Jadran d.d. — Governance Information 2020

Jun 30, 2020

GENERAL PARTICULARS OF THE COMPANY: CONTACT PERSON AND PHONE NUMBER: Marija Žarković-Turak,0917940404 QUESTIONNAIRE COMPLETION DATE:

JADRAN D.D., CRIKVENICA, Bana Jelačića 16, OIB:56994999963

All questions contained in this Questionnaire relate to a period of one year coinciding with the year pertinent to the annual financial statements. An answer to a question in this Questionnaire should only be accompanied by an explanation where specifically required.

The answers received in this Questionnaire will be scored based on a specific percentage indicated at the beginning of each section.

COMMITMENT TO THE PRINCIPLES OF CORPORATE GOVERNANCE AND SOCIAL RESPONSIBILITY

The answers to this set of questions account for 20 % of the overall indicator of company's compliance with the Code of Corporate Governance.

No.	Question	Answer YES/NO	Explanation
1	Has the company accepted to implement the Zagreb Stock Exchange's Code of Corporate Governance?	YES
2	Does the company have its own code of corporate governance?	NO
3	Have any Code of Corporate Governance principles been adopted as part of the company's internal policies?	YES
4	Does the company disclose information regarding its compliance with the Code of Corporate Governance as part of its annual financial statements?	YES

SHAREHOLDERS AND THE GENERAL MEETING

The answers to this set of questions account for 30 % of the overall indicator of company's compliance with the Code of Corporate Governance.

No.	Question	Answer YES/NO	Explanation
5	Is the company in a cross-shareholding relationship with another company or companies? (If "YES", please explain)	NO
6	Is each share entitled to one vote? (If "NO", please explain)	YES
7	Are there cases where different shareholders enjoy different treatment? (If "YES", please explain)	NO
8	Has the process of granting proxies for voting at the General Meeting been extremely simplified and free of any strict formal requirements? (If "NOT", please explain)	YES

9	Has the company ensured that company shareholders who are for any reason whatsoever unable to vote at the General Meeting are represented thereat by proxies required to vote as instructed by such shareholders free of charge to them? (If "NOT", please explain)	NO	The General Meeting is attended by a small number of shareholders and no such reqest has been made to date. The company provides a form of proxy to each shareholder to help them empower a person of their choice.
10	At the time of convening the General Meeting, did management or the Management Board set a date based on which the status of the Share Ledger is determined, which is relevant to the exercise of voting rights at the General Meeting, by defining that such date must occur at least six days prior to the General Meeting date? (If "NOT", please explain)	YES
11	Were the agenda of the General Meeting and all relevant information and documents including explanations of the agenda published on the company's website and made available to the shareholders at the company's premises as of the date of the agenda was first published? (If "NOT", please explain)	YES
12	Does the resolution to distribute or prepay dividend include a date on which a shareholder becomes entitled to receive such dividend or a dividend distribution date or period? (If "NOT", please explain)	NO	No dividend has been distributed to date
13	Does the dividend distribution or prepayment date occur no more than 30 days following the resolution date? (If "NOT", please explain)	NO	No dividend has been distributed to date
14	Are there cases where certain shareholders are preferred in the context of dividend distribution or prepayment? (If "YES", please explain)	NO	No dividend has been distributed to date
15	Are shareholders allowed to participate in and to vote at the General Meeting using modern communication technology? (If "NOT", please explain)	NO	There has been no need
16	Have conditions precedent to the participation in and exercising voting rights at the General Meeting (irrespective of whether or not this is permitted under the law or the Articles of Association) been defined, such as the required notification of participation in advance, having the proxy notarized, etc.? (If "YES", please explain)	YES	Considering the large number of small shareholders, we require registration of participation in advance to allow the proceedings of the General Meeting to be effectively organized and to potentially be able to accommodate more participants.
17	Did management publicly disclose the resolutions of the General Meeting?	YES
18	Did management publicly disclose information concerning any legal actions taken to challenge such resolutions? (If "NOT", please explain)	NO	No such legal action has been taken to date

MANAGING AND SUPERVISORY ORGANS

PLEASE SPECIFY THE NAMES OF MANAGEMENT AND THEIR TITLES:

Goran Fabris-Chairman of the Management Board, Karlo Čulo-Management Board Member

Tomislav Kitonić-Chairman of the Supervisory Board,Karlo Došen -Deputy Chairman of the Supervisory Board, Mirko Herceg-Supervisory Board Member, Dragan Magač- Supervisory Board Member, Ivan Blažević-Supervisory Board Member

PLEASE SPECIFY THE NAMES OF THE SUPERVISORY BORD MEMBERS AND THEIR TITLES:

No.	Question	Answer YES/NO	Explanation
19	Did the Supervisory Board or Management Board take a decision concerning a master plan of its activities, including a list of its regular meetings and information to be made available to Supervisory Board members regularly and in a timely manner? (If "NOT", please explain)	YES
20	Did the Supervisory Board or Management Board lay down its internal rules of procedure?	YES
21	Does the Management Board or Supervisory Board include any independent members? (If "NOT", please explain)	YES
22	Is a long-term succession plan in place in the company? (If "NOT", please explain)	NO	No. This is neither defined by the Articles of Association nor was it necessary.
23	Is all or part of the remuneration received by Supervisory Board or Management Board members determined according to their contribution to the company's performance? (If "NOT", please explain)	NO	Such remuneration is a fixed amount determined by General Meeting's resolution.
24	Is the remuneration received by Supervisory Board or Management Board members determined by a resolution of the General Meeting or the Articles of Association? (If "NOT", please explain)	YES
25	Were the details of all remunerations and other benefits received from the company or its related parties by each manager or executive director, including the structure of such remuneration, publicly disclosed (as part of the annual financial report)? (If "NOT", please explain)	YES
26	Were the details of all remunerations and other benefits received from the company or its related parties by each Management Board and Supervisory Board member, including the structure of such remuneration, publicly disclosed (as part of the annual financial report)? (If "NOT", please explain)	YES
27	Does each member of the Supervisory Board and Management Board notify the company of any changes to his/her acquisition or disposal of, or exercise of voting rights arising from company shares immediately, but no later than three business days of the transaction date? (If "NOT", please explain)	YES
28	Were all transactions involving Supervisory Board or Management Board members or their related parties or the company or its related parties clearly specified in the company reports? (If "NOT", please explain)	NO	There were no such activities
29	Are there any contracts or agreements in place between a Supervisory Board or Management Board member and the company?	NO	There were no such contracts
30	Did they receive prior approval from the Supervisory Board or the Management Board? (If "NOT", please explain)	NO	There are no such contracts or agreements.
31	Are the essential components of such contracts or agreements contained in the annual report? (If "NOT", please explain)	NO	There are no such contracts or agreements.
32	Has the Supervisory Board or Management Board organized an appointments committee?	YES
33	Has the Supervisory Board or Management Board organized a remuneration committee?	YES
34	Has the Supervisory Board or Management Board organized an audit committee?	YES

The answers to this set of questions account for 20 % of the overall indicator of company's compliance with the Code of Corporate Governance.

35	Are most members of the audit committee elected among independent Supervisory Board members? (If "NOT", please explain)	NO	Pursuant to Article 65 of the Audit Act, the company chose an alternative solution and the Supervisory Board appointed all three members of the Audit Committee among its own ranks. Of these three Audit Committee members, one is an independent Supervisory Board member and his membership in this Committee reflects the relevant proportion of independent members in the Supervisory Board. All three Audit Committee members are financial experts.
36	Did the audit committee ensure the integrity of company's financial information, in particular the appropriateness and consistency of the accounting methods used by the company and the group it belongs to, including criteria applicable to the consolidation of financial statements of group companies? (If "NOT", please explain)	YES
37	Did the audit committee assess the quality of the internal control and risk management system for the purpose of appropriately identifying and publicly disclosing the primary risks the company is exposed to (including any compliance risks) and ensuring that they are duly managed? (If "NOT", please explain)	YES
38	Did the audit committee work on ensuring the efficiency of the internal audit system, in particular by making recommendations for the selection, appointment, reappointment and dismissal of the internal audit department manager and with regard to funds at placed his/her disposal, and also to the evaluation of the actions taken by management based on such internal audit findings and recommendations? (If "NOT", please explain)	NO	No internal audit function has been established because the company is not legally required to do so.
39	If there is no internal audit function in place in the company, did the audit committee consider the need to establish one? (If "NOT", please explain)	YES
40	Did the audit committee ensure that each external auditor remains independent and objective, especially with regard to the rotation of authorized auditors within the audit company and the fees the company is paying for such external audit services? (If "NOT", please explain)	YES
41	Did the committee monitor the nature and quantity of services other than audit services, received by the company from an audit company or its related parties? (If "NOT", please explain)	YES
42	Did the audit committee develop rules defining which services may not be provided to the company by the external audit company and its related parties, which services they may provide subject to committee's prior consent, and which services they may provide without committee's prior consent? (If "NOT", please explain)	NO	There was no need to develop such rules in 2019.
43	Did the audit committee consider the efficiency of external auditors and actions taken by senior management with regard to the recommendations made by such external auditors? (If "NOT", please explain)	YES
44	Were the documents relevant to the operation of the Supervisory Board and Management Board duly provided to all members? (If "NOT", please explain)	YES
45	Do the minutes of Supervisory Board and Management Board meetings include all decisions accompanied by the voting results? (If "NOT", please explain)	YES

46	Did the Supervisory Board and Management Board make an evaluation of their work in the preceding period, including an evaluation of each member's contribution and competence and of the joint activities of the Board, an evaluation of the work done by the respective committees it established, and an evaluation of the company's objectives achieved against those set?	NO
47	Are details of all remunerations and benefits received by each manager or executive director from the company publicly disclosed in the annual company report? (If "NOT", please explain)	YES
48	Were all forms of remuneration provided to Management Board and Supervisory Board members, including options and other benefits granted to management, publicly listed by item and person as part of the annual company report? (If "NOT", please explain)	YES
49	Are all transactions involving managers or executive directors or their related parties and the company or its related parties clearly presented in the relevant company reports? (If "NOT", please explain)	NO	None were recorded
50	Does the report to be submitted by the Supervisory Board or Management Board to the General Meeting include, other than the legally required particulars, an assessment of the overall performance of the company and its management, as well as a specific review of its cooperation with management? (If "NOT", please explain)	YES

AUDIT AND INTERNAL CONTROL MECHANISMS

The answers provided in this section account for 10 % of the overall indicator of company's compliance with the Code of Corporate Governance.
	No.	Question	Answer YES/NO	Explanation
	51	Does the company have external auditors?	YES
	52	Are such external auditors related to the company through equity or interest?	NO
	53	Do such external auditors provide any other services to the company, directly or through their related parties?	YES
	54	Did the company publicly disclose the fees paid to external auditors for auditing and other services? (If "NOT", please explain)	YES
	55	Does the company have any internal auditors? (If "NOT", please explain)	NO	The company did not find this necessary
	56	Does the company have an internal control system in place? (If "NOT", please explain)	YES

TRANSPARENCY AND PUBLICITY OF BUSINESS

The answers provided in this section account for 20 % of the overall indicator of company's compliance with the Code of Corporate Governance.

No.	Question	Answer YES/NO	Explanation
57	Are the half-year, annual and quarterly reports available to shareholders?	YES
58	Did the company establish a calendar of important events?	NO	The company did not find this necessary
59	Did the company establish mechanisms to ensure that any persons who have access to or hold any inside information understand the nature and importance of such information and the relevant restrictions applicable thereto?	YES
60	Did the company establish mechanisms to ensure that the flow of inside information and its potential abuse are supervised?	YES

61	Has anyone suffered any adverse consequences as a result of notifying the competent authorities or bodies internal or external to the company of any deficiencies in the implementation of regulations or ethical standards within the company? (If "YES", please explain)	NO
62	Did management hold any meetings with interested investors in the past year?	NO
63	Do all managers and Supervisory Board or Management Board agree that the answers provided in this questionnaire are, to the best of their knowledge, entirely true?	YES