Podravka d.d. — Interim / Quarterly Report 2012

May 31, 2012

MANAGEMENT BOARD

Koprivnica, 24, April 2012

PODRAVKA GROUP

$1 - 3.2012$ .

QUARTERLY FINANCIAL REPORT

PODRAVKA d.d., Koprivnica, Ante Starčevića 32, Commercial Court of Varaždin, Company no. MBS 010006549, PIN 18928523252 Privredna banka Zagreb d.d., Zagreb, Račkoga 6, Giro account no. 2340009-1100098526, share capital 1,626,000,900.00 HRK paid in full,
number of shares: 5,420,003, nominal share value: 300.00 HRK, President of the Superviso

Appendix 1 Reporting period:		1.1.2012 to	31.03.2012.
		Quarterly financial report of entrepreneur - TFI-POD
	Registration number (MB) 03454088
Identification number of subject (MBS)	010006549
Personal identification number (OIB)	18928523252
	Issueer company: PODRAVKA prehrambena industrija d.d., KOPRIVNICA
	Postal code and place 48000	KOPRIVNICA
	Street and number ANTE STARCEVICA 32
	E-mail address: podravka@podravka.hr
	Internet adress: www.podravka.com
Code and name of comune/town	KOPRIVNICA 201
	KOPRIVNIČKO-KRIŽEVAČKA Code and county name 6		Number of employees 6.446
	Consolidated statement YES		(at quarter end) NKD/NWC code: 1039
	Subsidiaries subject to consolidation (according to IFRS):	Headquarters:	Registration number:
	BELUPO d.d.	Koprivnica	3805140
	DANICA d.o.o.	Koprivnica	0991279
	ITAL-ICE d.o.o.	Poreč	3746011
	PODRAVKA POLSKA SP z.o.o.	Kostrzyn, Polska	5981449907
	PODRAVKA LAGRIS a.s.	Dolni Lhota u Luhačovic, Češka	3042510487
	PODRAVKA SARAJEVO d.o.o.	Sarajevo, BiH	20188537
	Book keeping service:
	Contact person: Celiščak Draga
	(authorised person for representation) Phone number: 048 651 200	Fascimile: 048 651 805

E-mail address: draga.celiscak@podravka.hr

Surname and name Mršić Zvonimir
(authorised person for representation)

Disclosure documents:

1. Financial statements (balance sheet, profit and loss account, cash flow statement, statement of changes in

shareholders' equity and notes to the financial statements

1. Interim management Report

2. Statement of responsible persons for preparation of financial statements

(signed by authorised person for representation)

BALANCE SHEET as at 31.03.2012.

Obligator: PODRAVKA prehrambena industrija d.d., KOPRIVNICA
Item		Last year (net)	Current year (net)
đ.	$\overline{2}$	3	$\overline{4}$
ASSETS
A) RECEIVABLES FOR SUBSCRIBED BUT NOT PAID-IN CAPITAL B) LONG-TERM ASSETS (003+010+020+029+033)	001
I. INTANGIBLE ASSETS (004 to 009)	002 003	1.891.921.160 311.927.331	1.879.248.935 306.181.217
1. Assets development	004	5.647.170	6.396.762
2. Concessions, patents, licences fees, trade and service marks, software and other rights	005	244.280.446	238.132.897
3. Goodwill	006	41.129.000	41.129.000
4. Prepayments for purchase of intangible assets	007	$\Omega$	356.460
5. Intangible assets in preparation	008	20.870.715	20.166.098
6. Other intangible assets	009	$\Omega$
II. TANGIBLE ASSETS (011 to 019)	010	1.519.648.607	1.512.313.735
1. Land	011	145.730.441	145.976.216
2. Buildings	012	877.174.067	865.479.288
3. Plant and equipment	013	416.715.386	405.165.231
4. Tools, facility inventory and transport assets	014	21.306.708	20.649.008
5. Biological assets	015	0
6. Prepayments for tangible assets	016	13.219.507 41.662.125	13.996.313
7. Tangible assets in progress 8. Other tangible assets	017 018	3.840.373	57.210.399 3.837.280
9. Investments in buildings	019
III. LONG-TERM FINANCIAL ASSETS (021 to 028)	020	4.323.161	2.840.822
1. Investments (shares) with related parties	021	0
2. Loans given to related parties	022	0	0
3. Participating interest (shares)	023	330,000	330.000
4. Loans to entrepreneurs in whom the entity holds participating interests	024	0
5. Investments in securities	025	180.351	179.830
6. Loans, deposits and similar assets	026	3.812.810	2.330.992
7. Other long - term financial assets	027	0
8. Investments accounted by equity method	028	0	$\mathbf 0$
IV. RECEIVABLES (030 to 032)	029	0	$\mathbf{0}$
1. Receivables from related parties	030	$\Omega$	0
2. Receivables from based on trade loans	031	0	0
3. Other receivables	032	0
V. DEFERRED TAX ASSETS	033	56.022.061	57.913.161
C) SHORT TERM ASSETS (035+043+050+058) I. INVENTORIES (036 to 042)	034	1.939.271.583	1.920.852.693
1. Raw-material and supplies	035 036	758.240.952 213.149.271	761.129.869 196.661.169
2. Work in progress	037	50.870.289	43.787.894
3. Finished goods	038	255.608.587	283.974.499
4. Merchandise	039	180.954.554	178.899.238
5. Prepayments for inventories	040	$\Omega$	$\circ$
6. Long - term assets held for sales	041	57.658.251	57.807.069
7. Biological assets	042
II. RECEIVABLES (044 to 049)	043	1.021.565.728	1.022.813.401
1. Receivables from related parties	044
2. Accounts receivable	045	973.000.722	969.626.879
3. Receivables from participating parties	046
4. Receivables from employees and members of related parties	047	2.699.198	2.034.203
5. Receivables from government and other institutions	048	41.429.788	44.102.457
6. Other receivables	049	4.436.020	7.049.862
III. SHORT TERM FINANCIAL ASSETS (051 to 057)	050	13.505.061	14.355.838
1. Shares (stocks) in related parties	051	0
2. Loans given to related parties	052	0	$\circ$
3. Participating interests (shares)	053	0	$\circ$
4. Loans to entrepreneurs in whom the entity holds participating interests	054	$\mathbf{0}$
5. Investments in securities	055	12.721.331	13.543.949
6. Loans, deposits, etc. 7. Other financial assets	056 057	143.902 639.828	174.955
IV. CASH AT BANK AND IN CASHIER	058	145.959.842	636.934 122.553.585
D) PREPAID EXPENSES AND ACCRUED REVENUE	059	23.527.372	19.170.885
E) TOTAL ASSETS (001+002+034+059)	060	3.854.720.115	3.819.272.513
F) OFF-BALANCE RECORDS	061	714.445.958	718.859.475

	AOP		Current year
Item	code	Last year (net)	(net)
1	$\overline{2}$	$\overline{\mathbf{3}}$	$\overline{4}$
LIABILITIES AND CAPITAL
A) CAPITAL AND RESERVES (063+064+065+071+072+075+078)	062	1.695.787.380	1.723.649.480
I. SUBSCRIBED CAPITAL	063	1.626.000.900	1.626.000.900
II. CAPITAL RESERVES	064	24.569.630	24.569.630
III.RESERVES FROM PROFIT (066+067-068+069+070)	065	52.039.980	61.923.873
1. Reserves prescribed by low	066	20.808.012	20.808.012
2. Reserves for treasury shares	067	35.344.592	35.344.592
3. Treasury stocks and shares (deduction)	068	67.604.502	67.604.502
4. Statutory reserves	069	30.705.853	30.705.853
5. Other reserves	070	32.786.025	42.669.918
IV. REVALUATION RESERVES	071
V. RETAINED EARNINGS OR ACCUMULATED LOSS (073-074)	072	$-110.891.556$	$-41.610.494$
1. Retained earnings	073
2. Accumulated loss	074	110.891.556	41.610.494
VI. PROFIT/LOSS FOR THE CURRENT YEAR (076-077)	075	69.281.062	18.739.989
1. Profit for the current year	076	69.281.062	18.739.989
2. Loss for the current year	077	0
IX. MINORITY INTERESTS	078	34.787.364	34.025.582
B) PROVISIONS (080 to 082)	079	34.326.066	35.092.464
1. Provisions for pensions, severance pay, and similar liabilities	080	23.334.629	23.284.612
2. Reserves for tax liabilities	081	$\Omega$
3. Other reserves	082	10.991.437	11.807.852
C) LONG - TERM LIABILITIES (084 to 092)	083	904.612.677	857.794.120
1. Liabilities to related parties	084	$\circ$
2. Liabilities for loans, deposits etc.	085	$\Omega$
3. Liabilities to banks and other financial institutions	086	897.615.677	850.942.120
4. Liabilities for received prepayments	087	$\Omega$
5. Accounts payable	088	$\Omega$
6. Liabilities arising from debt securities	089	$\mathbf 0$
7. Liabilities to entrepreneurs in whom the entity holds participating interests	090	$\Omega$
8. Other long-term liabilities	091	$\Omega$
9. Deferred tax liability	092	6.997.000	6.852.000
D) SHORT - TERM LIABILITIES (094 to 105)	093	1.125.366.071	1.078.872.679
1. Liabilities to related parties	094	$\Omega$
2. Liabilities for loans, deposits etc.	095	$\mathbf{O}$
3. Liabilities to banks and other financial institutions	096	496.251.565	492.414.789
4. Liabilities for received prepayments	097	2.508.612	53.553
5. Accounts payable	098	533.328.778	494.818.226
6. Liabilities arising from debt securities	099	2.400.000	3.441.082
7. Liabilities to entrepreneurs in whom the entity holds participating interests	100	$\Omega$
8. Liabilities to employees	101	59.022.620	$\circ$ 60.598.283
9. Liabilities for taxes, contributions and similar fees	102	18.697.962	22.024.327
10. Liabilities to share - holders	103	684.698	683.878
	104	$\mathbf{0}$
	105	12.471.836	4.838.541
11. Liabilities for long-term assets held for sale			123.863.770
12. Other short - term liabilities
	106	94.627.921
E) DEFFERED SETTLEMENTS OF CHARGES AND INCOME DEFERRED TO FUTURE F) TOTAL - CAPITAL AND LIABILITIES (062+079+083+093+106)	107	3.854.720.115
G) OFF-BALANCE RECORDS	108	714.445.958	3.819.272.513 718.859.475
APPENDIX to balance sheet(to be filled in by entrepreneur that prepares consolidated annual financial report)
CAPITAL AND RESERVES 1. Attributed to equity holders of parent company	109	1.661.000.016	1.689.623.898

$\langle \bullet \rangle$

$\mathcal{R}^{\pm}$

PROFIT AND LOSS ACCOUNT

for the period 01.01.2012. to 31.03.2012.

Obligator: PODRAVKA prehrambena industrija d.d., KOPRIVNICA Item		Last Year		Current year
	code
		Comulative	Quartely	Comulative	Quartely
	$\overline{2}$	$\overline{3}$	$\overline{4}$	$5\overline{)}$	$6\overline{6}$
I. OPERATING REVENUE (112+113)	111	811.867.658	811.867.658	831.041.215	831.041.215
1. Sales revenue 2. Other operating revenues	112	797.065.639	797.065.639	815.191.188	815.191.188
II. OPERATING EXPENSES (115+116+120+124+125+126+129+130)	113 114	14.802.019	14.802.019	15.850.027	15.850.027
1. Changes in value of work in progress and finished products	115	768.453.650	768.453.650	793.931.657	793.931.657
2. Material costs (117 to 119)	116	$-27.419.232$	$-27.419.232$	$-20.237.936$	$-20.237.936$
a) Raw material and material costs	117	527.153.472	527.153.472	530.298.140 309.729.800	530.298.140
b) Costs of goods sold	118	294.491.949 118.643.025	294.491.949 118.643.025	111.482.751	309.729.800 111.482.751
c) Other external costs	119	114.018.498	114.018.498	109.085.589	109.085.589
3. Staff costs (121 to 123)	120	172.129.630	172.129.630	182.743.187	182.743.187
a) Net salaries and wages	121	126.760.747	126.760.747	131.615.733	131.615.733
b) Cost for taxes and contributions from salaries	122	28.858.503	28.858.503	33.056.288	33.056.288
c) Contributions on gross salaries	123	16.510.380	16.510.380	18.071.166	18.071.166
4. Depreciation	124	39.775.103	39.775.103	38.323.658	38.323.658
5. Other costs	125
6. Impairment (127+128)	126	41.151.154 1.640.800	41.151.154	40.883.139	40.883.139
a) Impairment of long-term assets (financial assets excluded)			1.640.800	5.030.849	5.030.849
	127 128	$\Omega$	$\circ$	$\circ$	$\circ$
b) Impairment of short - term assets (financial assets excluded) 7. Provisions		1.640.800	1.640.800	5.030.849	5.030.849
8. Other operating costs	129	2.110	2.110	1.783.585	1.783.585
	130	14.020.613	14.020.613	15.107.035	15.107.035
III. FINANCIAL INCOME (132 to 136)	131	12.747.124	12.747.124	19.237.848	19.237.848
1. Interest income, foreign exchange gains, dividends and similar income from related parties 2. Interest income, foreign exchange gains, dividends and similar income from non - related	132	$\Omega$	$\Omega$	$\mathbf 0$	$\circ$
	133	9.661.143	9.661.143	19.226.018	19.226.018
3. Share in income from affiliated entrepreneurs and participating interests	134			0	$\Omega$
4. Unrealized gains (income) from financial assets 5. Other financial income	135	3.085.981	3.085.981	11.830	11.830
	136	$\Omega$	$\Omega$	$\Omega$	$\Omega$
IV. FINANCIAL EXPENSES (138 do 141)	137	29.509.930	29.509.930	34.022.840	34.022.840
1. Interest expenses, foreign exchange losses, dividends and similar expenses from related 2. Interest expenses, foreign exchange losses, dividends and similar expenses from non -	138	$\mathbf{0}$	$\Omega$	$\mathbf{0}$	$\Omega$
3. Unrealized losses (expenses) on financial assets	139 140	25.688.466	25.688.466	33.811.335	33.811.335
4. Other financial expenses	141	3.821.464	3.821.464	211.505	211.505
V. INCOME FROM INVESTMENT - SHARE IN PROFIT OF ASSOCIATED ENTREPRENEURS		$\mathbf 0$ $\mathbf{0}$	$\circ$ $\Omega$	$\circ$ $\Omega$	$\circ$ $\circ$
VI. LOSS FROM INVESTMENT - SHARE IN LOSS OF ASSOCIATED ENTREPRENEURS	142 143	$\Omega$	$\Omega$		$\circ$
VII. EXTRAORDINARY - OTHER INCOME	144	$\mathbf 0$
VIII. EXTRAORDINARY - OTHER EXPENSES	145		$\circ$	$\mathbf 0$	$\circ$
IX. TOTAL INCOME (111+131+142 + 144)	146	824.614.782	824.614.782	850.279.063	850.279.063
X. TOTAL EXPENSES (114+137+143 + 145)	147	797.963.580	797.963.580	827.954.497	827.954.497
XI. PROFIT OR LOSS BEFORE TAXATION (146-147)	148	26.651.202	26.651.202	22.324.566	22.324.566
1. Profit before taxation (146-147)	149	26.651.202	26.651.202
2. Loss before taxation (147-146)	150		$\Omega$	22.324.566	22.324.566
XII. PROFIT TAX	151	806.967	806.967	4.295.577	4.295.577
XIII. PROFIT OR LOSS FOR THE PERIOD (148-151)	152	25.844.235	25.844.235	18.028.989	18.028.989
1. Profit for the period (149-151)
2. Loss for the period (151-148)	153 154	25.844.235 $\mathbf{0}$	25.844.235 $\Omega$	18.028.989 $\overline{0}$	18.028.989 $\circ$
APPENDIX to P&L account (to be filled in by entrepreneur that prepares consolidated financial report)
XIV. PROFIT OR LOSS FOR THE PERIOD
1. Attributed to equity holders of parent company	155	25.817.218	25.817.218	18.739.989	18.739.989
2. Attributed to minority interest	156	27.017	27.017	$-711.000$	$-711.000$
STATEMENT OF OTHER COMPREHENSIVE INCOME (IFRS)
I. PROFIT OR LOSS FOR THE PERIOD (= 152)	157	25.844.235	25.844.235	18.028.989	18.028.989
II. OTHER COMPREHENSIVE INCOME / LOSS BEFORE TAX (159 do 165)	158	$-185.100$	$-185.100$	9.833.111	9.833.111
1. Exchange differences on translation of foreign operations	159	$-185.100$	$-185.100$	9.833.111	9.833.111
2. Movements in revaluation reserves of long - term tangible and intangible assets	160
3. Profit or loss from reevaluation of financial assets available for sale	161
4. Gains or losses on efficient cash flow hedging	162
5. Gains or losses on efficient hedge of a net investment in foreign countries	163
6. Share in other comprehensive income / loss of associated companies
	164
7. Actuarial gains / losses on defined benefit plans III. TAX ON OTHER COMPREHENSIVE INCOME FOR THE PERIOD	165
	166
IV. NET OTHER COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD (158-166)	167	$-185.100$	$-185.100$	9.833.111	9.833.111
V. COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD (157+167) APPENDIX to Statement of other comprenhensive income (to be filled in by entrepreneur that prepares consolidated financial report)	168	25.659.135	25.659.135	27.862.100	27.862.100
VI. COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD
1. Attributed to equity holders of parent company	169				28.623.882
2. Attributed to minority interest	170	25.637.598 21.537	25.637.598 21.537	28.623.882	$-761.782$
				$-761.782$

STATEMENT OF CASH FLOWS - INDIRECT METHOD

For the period 01.01.2012. to 31.03.2012.

Obligator: PODRAVKA prehrambena industriia d.d., KOPRIVNICA

Item	AOP code	Last year	Current year
$\overline{\mathbf{1}}$	$\overline{2}$	$\overline{\mathbf{3}}$	4
CASH FLOW FROM OPERATING ACTIVITIES
1. Profit before tax	001	26.651.202	22.324.566
2. Depreciation	002	39.775.103	38.323.658
3. Increase in short term liabilities	003
4. Decrease in short term receivables	004		60.270
5. Decrease in inventories	005
6. Other increase in cash flow	006	5.611.000	6.109.227
I. Total increase in cash flow from operating activities (001 to 006)	007	72.037.305	66.817.721
1. Decrease in short term liabilities	008	35.448.278	10.810.150
2. Increase in short term receivables	009	18.872.625
3. Increase in inventories	010	11.102.808	4.554.099
4. Other decrease in cash flow	011	12.840.662	9.628.000
II. Total decrease in cash flow from operating activities (008 to 011)	012	78.264.373	24.992.249
A1) NET INCREASE IN CASH FLOW FROM OPERATING ACTIVITIES (007-012)	013	O	41.825.472
A2) NET DECREASE IN IN CASH FLOW FROM OPERATING ACTIVITIES (012-	014	6.227.068
CASH FLOW FROM INVESTING ACTIVITIES
1. Cash inflows from sales of long-term tangible and intangible assets	015	214.000	498.000
2. Cash inflows from sales of equity and debt instruments	016	10.554.000	61.000
3. Interests receipts	017	2.137.000	2.237.000
4. Dividend receipts	018
5. Other cash inflows from investing activities	019	2.072.000	1.543.400
III. Total cash inflows from investing activities (015 to 019)	020	14.977.000	4.339.400
1. Cash outflow for purchase of long-term tangible and intangible assets	021	14.912.000	21.638.129
2. Cash outflow for acquisition of equity and debt financial instruments	022	501.000	102.000
3. Other cash outflow for investing activities	023	171.000	37.500
IV. Total cash outflow for investing activities (021 do 023)	024	15.584.000	21.777.629
B1) NET INCREASE IN CASH FLOW FROM INVESTING ACTIVITIES (020-024)	025	0
B2) NET DECREASE IN CASH FLOW FROM INVESTING ACTIVITIES (024-020)	026	607.000	17.438.229
CASH FLOW FROM FINANCIAL ACTIVITIES
1. Cash inflow from issuing property and debt financial instruments	027
2. Proceeds from the credit principal, promissory notes, borrowings and other	028	157.232.000	62.364.500
3. Other proceeds from financial activities	029
V. Total cash inflows from financial activities (027 to 029)	030	157.232.000	62.364.500
1. Cash outflow for repayment of credit principal and bonds	031	204.390.000	109.165.000
2. Cash outflow for dividends paid	032
3. Cash outflow for financial lease	033	1.096.000	993.000
4. Cash outflow for purchase of treasury shares	034
5. Other cash outflow for financial activities	035
VI. Total cash outflow for financial activities (031 to 035)	036	205.486.000	110.158.000
C1) NET INCREASE IN CASH FLOW FROM FINANCIAL ACTIVITIES (030-036)	037	0
C2) NET DECREASE IN CASH FLOW FROM FINANCIAL ACTIVITIES (036-030)	038	48.254.000	47.793.500
Total increase in cash flow (013 - 014 + 025 - 026 + 037 - 038)
Total decrease in cash flow $(014 - 013 + 026 - 025 + 038 - 037)$	039	0
Cash and cash equivalents at the beginning of the period	040	55.088.068	23.406.257
Increase of cash and cash equivalents	041	152.362.675	145.959.842
Decrease of cash and cash equivalents	042
	043	55.088.068	23.406.257
Cash and cash equivalents at the end of the period	044	97.274.607	122.553.585

STATEMENT OF CHANGES IN EQUITY
for the period 1.1.2012 to 31.3.2012

Obligator: Podravka, prehrambena industrija d.d., Koprivnica
Item		Last year	Current year
п	2	$\mathbf{3}$	4
1. Subscribed capital	001	1.626.000.900	1.626.000.900
2. Capital reserves	002	24.569.630	24.569.630
3. Reserves from profit	003	52.039.980	61.923.873
4. Retained earnings or accumulated loss	004	$-110.891.556$	$-41.610.494$
5. Profit or loss for the current year	005	69.281.062	18.739.989
6. Revaluation of long - term tangible assets	006
7. Revaluation of intangible assets	007
8. Revaluation of financial assets available for sale	008
9. Other revaluation	009	34.787.364	34.025.582
10. Total capital and reserves (AOP 001 do 009)	010	1.695.787.380	1.723.649.480
11. Currency gains and losses arising from net investement in foreign operations	011	$-10.692.000$	9.833.111
12. Current and deferred taxes (part)	012
13. Cash flow hedging	013
14. Changes in accounting policy	014
15. Correction of significant errors in prior period	015
16. Other changes of capital	016	71.661.674	18.028.989
17. Total increase or decrease in capital (AOP 011 do 016)	017	60.969.674	27.862.100
17 a. Attributed to equity holders of parent company	018	60.529.460	28.623.882
17 b. Attributed to minority interest	019	440.214	$-761.782$

Main business characteristics and significant events in the first quarter

$1¹$ The total sales of the Podravka Group in the first quarter of 2012 amounted to 815.2 million HRK, which represents a sales growth of 2% compared to the same period of the year 2011. Sales of the Strategic Business Area (SBA) Food and Beverages totalled 635.0 million HRK, and remains almost at the same level as the year before, while the sales of the SBA Pharmaceuticals was 180.2 million HRK, which is a 12% sales increase.

$2.$ The realised EBITDA is 78.6 million HRK, which represents a drop of 5%, while the operating profit (EBIT) of the Podravka Group is 40.3 million HRK, which represents a drop of 6%, while the operating margin (EBIT margin) is 4.9%.

The realised net profit of the Podravka Group is 27% less than for the same period of the year before and amounts to $\mathcal{E}$ 18.7 million HRK

$4.$ The total value of capital investments in the observed period was 21.6 million HRK.

1. On its session held on 24 February 2012, the Supervisory Board of Podravka d.d. reached a resolution on appointing Dubravko Štimac President and Prof.Dr.Sc. Mato Cirkvenac, who is the newly appointed member of the Supervisory Board of Podravka d.d. on behalf of the Government Asset Management Agency (AUDIO) and has replaced Prof.Dr.Sc. Ljubo Jurčić, Deputy President of the Supervisory Board of Podravka d.d.

Apart from Prof.Dr.Sc. Mato Crkvenac, the Government Asset Management Agency appointed Prof.Dr.Sc. Ivo Družić member of the Supervisory Board of Podravka d.d. as a replacement of its current member. Miljenko Javorović.

Changes within the Management Board of Podravka d.d. followed after the above stated appointments within the Supervisory Board. Zvonimir Mršić was appointed the new President of the Management Board of Podravka d.d. and Dr.Sc. Jadranka Ivanković, Olivija Jakupec, Jorn Pedersen and Miroslav Klepač were appointed members of the Management Board.

The accounting policy in 2012 year did not change.

Koprivnica, 24 April 2012

INTERIM MANAGEMENT REPORT ON THE ACHIEVED BUSINESS RESULTS OF THE PODRAVKA GROUP FOR THE PERIOD JANUARY - MARCH 2012

The Podravka Group achieved operating income in the amount of 831.0 million HRK in the period January - March 2012, which is a 2% increase compared to the same period of the year before. Sales revenue was realized in the amount of 815.2 million HRK and is 2% higher compared to the same period of the year 2011.

Sales of the SBA Food and Beverages totalled 635.0 million HRK, and remains almost at the same level as the first quarter of the year 2011, taken that a 1% drop of sales was recorded in Croatia, while foreign markets recorded somewhat higher sales compared to the same period of the year before. The highest contribution to the aforementioned sales growth comes from the market of South-East Europe (7%), where the most prominent markets are Bosnia and Herzegovina, Macedonia, Kosovo and Serbia.

The SBA Pharmaceuticals achieved sales in the amount of 180.2 million HRK, which is a sales growth of 12% compared to the first quarter of the year 2011. The sales growth of the SBA Pharmaceuticals was contributed mostly by foreign markets, which recorded a 23% growth with the highest contribution coming from the markets of Russia, Bosnia and Herzegovina and the Czech Republic. The market of Croatia is also increasing (3%) based on a higher level of sales of prescription drugs (2%). According to the ATC classification, the product groups that have achieved the most significant increase are dermatic drugs and drugs that affect heart and blood vessels.

The total operating expenses amounted to 793.9 million HRK, and have increased by 3.3%. Materials costs cover 67% of operating expenses and have increased 0.6% compared to the same period of last year. Increased costs of raw material and material due to higher input prices had the greatest impact on the increase of materials costs.

A significant share in the structure of operating expenses belongs to staff costs (23.0%), which have recorded a 6% increase, or 10.6 million HRK, of which a large part refers to the contracted severance payments to former members of the Management Board.

The realized net profit is 18.7 million HRK and is 27% less than the realized net profit in the same period of the year before.

The total value of assets of the Podravka Group as of 31 March 2012 is 3.819 billion HRK and compared to the year end of 2011 is 35.4 million HRK less, taken that the value of long-term assets has been reduced by 12.7 million HRK and the value of current assets by 22.7 million HRK.

In the period January – March 2012, the indebtedness of the Podravka Group has been reduced by 49.6 million HRK (from 1.383 billion HRK as of 31 December 2011 to 1.334 billion HRK as of 31 March 2012) The net debt is 1.211 billion HRK.

President of the Management Board: Zvonimir Mršič

PODRAVKA d.d., Koprivnica, Ante Starčevića 32, Commercial Court of Varaždin, Company no. MBS 010006549, PIN 18928523252 r Correction banks Zagreb d.d., Zagreb, Račkoga 6, Giro account no. 2340009-1100098526, share capital 1,626,000,900.00 HRK paid in full,
Privredna banks Zagreb d.d., Zagreb, Račkoga 6, Giro account no. 2340009-1100098526, Management Board: Z. Mršić, Board members: J. Ivanković, O. Jakupec, M. Klepač, J. Pedersen

Koprivnica, 24, April 2012

STATEMENT FROM EXECUTIVES RESPONSIBLE FOR PREPARING FINANCIAL STATEMENTS

Consolidated and unaudited financial statements of the Podravka Group for the period January -March 2012 have been prepared in compliance with the Accounting Act of the Republic of Croatia and International Financial Reporting Standards (IFRS) and provide an overall and true presentation of assets, liabilities, profit and loss, financial position and business operations of the Group and all related companies involved in the consolidation.

During the observed period, there were no changes in accounting policies of the Podravka Group.

Director of Finance: Draga Celiščak

Board Member for Finance: Miroslav Klepač

PODRAVKA d.d., Koprivnica, Ante Starčevića 32, Commercial Court of Varaždin, Company no. MBS 010006549, PIN 18928523252 Privredna banka Zagreb d.d., Zagreb, Račkoga 6, Giro account no. 2340009-1100098526, share capital 1,626,000,900.00 HRK paid in full, number of shares: 5,420,003, nominal share value: 300.00 HRK, President of the Supervisory Board: D. Stimac, President of the Management Board: Z. Mršić, Board members: J. Ivanković, O. Jakupec, M. Klepač, J. Pedersen