Corporate Social Responsibility Report AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

Contents

INTRODUCTION CHEMICAL LAND TRANSPORT, INDUSTRY ENGINEERING 03 17 39 AND AGRICULTURAL TECHNOLOGY

AGROFERT AGRICULTURE, MEDIA GROUP PRIMARY PRODUCTION 05 25 AND FORESTRY 45

AGROFERT FOOD ACKNOWLEDGEMENTS 13 FOUNDATION 33 INDUSTRY 51

02 INTRODUCTION

Dear readers,

The year 2018 meant an important jubilee for the AGROFERT Group in the form of the you have just received the fifth celebration of the 25th anniversary of the company's existence. Symbolically, therefore, Report of AGROFERT Group’s virtually the entire period under review was in the spirit of massive investment. The Selected Companies Corporate AGROFERT Group managed to strengthen its position in the market and I am personally Social Responsibility, which pleased to see how great the combination of different professions is. Over the quarter of summarises the year 2018. Despite a century of its existence, AGROFERT has come a long way, and nowadays it is a unique the fact that individual companies group in the Czech environment, ranging from agriculture and the food industry to the had to face various market barriers media, the chemical industry to logistics services, as well as design services and online and a turbulent environment, advertising. The overall success of the AGROFERT Group is based on one key factor: its which was, for example, strongly employees. Thanks to their work and their daily commitment to the activities they do, affected by a prolonged drought AGROFERT is one of the most important business entities not only in the Czech Republic, and issues with commodity prices in but also in the Central Europe region. the agricultural sector, AGROFERT Group’s companies did not forget As we look at the position of the AGROFERT Group in the domestic economy, it is a mat- their corporate social responsibility ter of course to be also interested in the state of the environment and the communities activities and also pursued them at the sites in which individual companies operate. I therefore believe that the publica- continuously last year. The CSR tion you are reading now will give you an overview of the socially beneficial actions we data and details set for the top have carried out. 43 companies of the Group are summarised in the Report you are I think you will like the AGROFERT Group Corporate Social Responsibility Report for 2018 reading now. and that it will bring you more information about our business.

Yours faithfully,

Zbyněk Průša Chair of the Board of Directors of AGROFERT

03 04 AGROFERT Group

05 AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

AGROFERT 32 730 group Employees

Over time, more activities began to be added. A clear When in January 1993 AGROFERT, vision, together with a sophisticated business strategy, spol. s r.o. commenced its business have helped the AGROFERT Group to develop into a 16 230 activity, few people would probably Group of more than two hundred entities in the fields Countries Entities (area) have guessed what a successful entity of chemistry, agriculture and forestry, the food industry, it would develop into over the next ground engineering, technologies and media, with eq- 25 years. At that time, however, there uity exceeding CZK 80 billion. With 32,730 employees, the were only four employees at the birth AGROFERT Group was as usual one of the largest private The business activities of all the AGROFERT companies of the company, who were actively employers in the Czech Republic in 2018. The strengths inherently include consideration for the environment, involved, in particular, in the fertiliser of the Group include a wide range of opportunities to employees, the surrounding communities, animals and business. work in a variety of professions, from graduate positions the landscape. to highly specialised jobs for experienced professionals. This is one of the reasons why AGROFERT ranked third The companies are aware of their full responsibility for their most important in the CZECH TOP 100 ranking for 2018 activities and their impact on the environment and are and was one of the TOP10 most admired companies in actively facing this issue. They strive to continually im- the Czech Republic. prove their production and distribution processes so that they are beneficial for all stakeholders, communities, and In 2018, AGROFERT’s business strategy fully utilised the environments in the locations where they undertake busi- natural verticals of its activities. The farm-to-fork ap- ness. That is why funds are invested annually in greening proach continued to be the main link between the indi- projects across the fields of the AGROFERT Group business. vidual areas of the Group's activities. Thanks to this key Compliance with and observance of quality of manage- approach, AGROFERT remains one of the largest groups ment standards, environmental management systems in the Czech and Slovak agriculture and food industry, the and high-quality human resources policy management leading domestic company in terms of sales, one of the systems contribute to achieving responsible business suc- largest exporters and the second largest chemical con- cess. It is also good practice for individual companies of the cern in the Czech Republic, also maintaining the second AGROFERT Group to help those in need – either through position in the area of nitrogen fertiliser production in the the AGROFERT Foundation or through their own charitable whole of Europe. and sponsorship activities.

06 AGROFERT GROUP

From the Czech Republic to the whole world

AGROFERT massively invests in and employs around two This also applies to the AGROFERT Group's companies that The AGROFERT Group companies thirds of all its workers in the Czech Republic. Many sup- consistently practice good agricultural practice, including are active in terms of business pliers and downstream customers are linked to the Group deep ploughing and multi-crop rotation. Moreover, by in 16 countries on four continents. due to the wide portfolio of business activities. Thus, maintaining livestock production, AGROFERT can continue Although the business may be AGROFERT gives jobs to thousands of other employees at to grow crops that may be used as feed. This contributes described as global, even so, its business partners. to the more varied mix of agricultural production and AGROFERT has Czech roots and helps preserve the traditions of domestic agriculture. the company remains firmly linked All this has a positive impact on the Czech economy. primarily with the Czech Republic. AGROFERT pays taxes into the state budget, helps the The business strategy of all companies within the AGRO- Together with Slovakia, Germany development of the Czech economy, and has established FERT Group is linked by the pursuit of a considerate ap- and Hungary, it is one of the key the activities of a wide range of other businesses and proach to their surroundings. This essentially means sup- markets. small sole traders. porting the development of the regions and the cultural life of individual sites, and supporting local associations It contributes to the positive balance of Czech exports, and sporting events. Individual companies also strive to be gives jobs to 22,000 employees and reinvests profits in good partners of their local government and education the Czech Republic. It is precisely the fact that profit does system institutions. not flow broad that is a crucial part of AGROFERT’s business strategy. Thanks to these resources, it can carry out greening projects in the Czech Republic, invest in the 11 welfare of farmed livestock, gradually improve the working environment of employees and implement charitable billion projects. By reinvesting its profit, AGROFERT aims to con- Replacement and Development Investments tribute to improving the overall environment of the man- (CZK, 2018) ufacturing and processing industry in the Czech Republic. 157.5 Recently, agricultural production and landscape manage- billion ment have also become the focus of attention. AGROFERT Group Turnover (CZK, 2018)

07 AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

A wide range of applications in many fields

Like other entities in the manufacturing and processing The AGROFERT Group strictly adheres to equal opportu- The year 2018 in the Czech industry, the companies of the AGROFERT Group also nities in its human resources policy. Discrimination in any Republic had a spirit of economic faced a lack of employees in selected professions. The form is totally inadmissible. development, which positively decline in the number of technical and craft graduates of influenced the domestic economy, secondary education has been problematic in the long The business of the AGROFERT Group is also linked to but further deepened labour term, which has subsequently escalated the lack of staff- compliance with ethical rules of conduct. These are sum- shortages in the market. The all-time ing capacities in the market – especially in agriculture, the marised in a unified strategy, which includes the Code low unemployment rate meant for the chemical industry, transport, technological fields and the of Ethics, Compliance, regular anti-corruption training of AGROFERT Group an intensification food industry. The AGROFERT Group seeks to address this employees and our own Tell Us ethical line, which allows of human resources work. situation through long-term cooperation with schools the anonymous submission of complaints of suspected and supporting vocational training in secondary schools, breach of the Code of Ethics. or directly through supporting individual fields, such as dairy farmers or butchers. The purpose of these activities is, among other things, to avoid the disappearance of traditional fields that cannot be replaced.

The AGROFERT Group, thanks to its activities in a wide segment of business areas, gives employees the chance to fully utilise their skills and experience. In the Czech Re- public there is virtually no private employer offering such a diverse range of job opportunities as the AGROFERT Group. It is not uncommon for whole families to work in some companies, even down the generations.

08 AGROFERT GROUP

Successful business thanks to employees

Moreover, a very wide range of business activities also Every year, the AGROFERT Foundation awards the volun- The daily work of its employees enables people living with different forms of disability to teer and extra-work community service of its employees is the basis for the successful work. Those companies which, due to their focus or form of with the “Helping by Heart” award. The Foundation also business of the AGROFERT Group. work, are not able to employ persons with disabilities use regularly organises Christmas gift collections among the Thanks to their experience and skills, at least the “substitute performance”, which takes the form AGROFERT Group employees. They buy gifts for the chil- which in many cases are transferred of purchasing products or services provided by sheltered dren of single parents who, due to their economic situa- from generation to generation, workshops. tion, cannot afford to fulfil the wishes of their children. In the AGROFERT companies are 2018, the AGROFERT employees donated 550 Christmas very successful. At the same time, individual companies across the whole gifts through a collection. Group support the individual charity and volunteer actions of employees, whether that be cleaning public In the AGROFERT Group companies, the principle of an spaces or helping in senior homes. In these activities, the equal approach to both sexes applies. Although the aim is companies support their employees through the possibil- to achieve a balanced number of women and men among ity of volunteering during working hours or by material or the employees, this is unfortunately not possible due to the financial means. nature of the business activities in which individual companies operate. The disproportion is particularly evident in the areas of the chemical industry, agriculture and engineering and technologies. These fields have often been very physically demanding and have attracted more male worker. The areas of technical and economic management of the companies, bakery and food production as a whole, 390 livestock care and laboratory activities are the opposite examples with a significantly higher proportion of women. Disabled Employees It is worth mentioning that this division illustrates well the (2018)* freedom of choice of study and future career among the new generation of employees.

* Only in the companies included in the Corporate Social Responsibility Report 2018.

09 AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

Fraud and Corruption Resistance Profile (FCRP) Transparent relations The AGROFERT Group is the first holder of this anti-corruption resistance certificate from the renowned with business partners Det Norske Veritas in the Czech Republic. For instance, the Norwegian government administration is also undergoing an identical certification.

In addition, the AGROFERT Group is fully aware that as Continuous Veterinary Supervision Meat production is associated with The business of all of the over 200 the leader in a number of areas it bears part of the re- continuous veterinary supervision. companies of the AGROFERT Group sponsibility for the state of the business environment in Scanners are also used to detect the is firmly connected with the principle the Czech Republic. Although the public, in particular presence of metal fragments. of adhering to the applicable laws in recent years, has often encountered information that and regulations at all times and under tries to give the impression that AGROFERT is not run- all circumstances. Only adherence to ning its businesses in accordance with the applicable this approach enables the effective rules, this is merely manipulation. A number of the cases management of individual business associated with the AGROFERT Group have resulted in Such business activity is obvious because the individual segments. the clearing of the AGROFERT Group or the persons companies of the AGROFERT Group are under the con- concerned of the issue. The problem, however, is that stant scrutiny of the financial administration, auditors, the media are not interested in informing the public veterinary administration and other bodies. They con- about this result. It is all the more important that all tinuously monitor the management systems, financial employees and companies of the AGROFERT Group transactions, tax compliance, compliance with occupa- comply with the Code of Ethics and, in particular, com- tional safety and quality control of production and its ply with the applicable laws. Obviously, there may be overall environmental impact. In the area of prevention situations where an individual or company commits of risks related to business activities, the individual com- errors, which can never be ruled out 100%. However, panies of the AGROFERT Group use risk and quality man- for these cases, the AGROFERT Group has established a agement systems, as well as internal audit and regular 773 unified procedure for their solution and the adoption of controlling services. The central purchasing system is an such measures that will prevent the repetition of errors important part of a transparent approach to business. Number of government in the future. The aim of the AGROFERT Group is to face This system ensures a level playing field for all suppliers administration inspections possible problems, learn from them and prevent their and at the same time enables reducing the cost of pur- (2018)* occurrence. chasing materials, goods and services for the individual AGROFERT companies. Transparent business is also a necessary prerequisite for good relations with business partners. A fair and equal approach is expected in these mutual relations. * Only in the companies included in the Corporate Social Responsibility Report 2018.

10 AGROFERT GROUP

11 AGROFERT ZPRÁVA O SPOLEČENSKÉ ODPOVĚDNOSTI 2017

12 AGROFERT Foundation

13 AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

Helping by heart where it is most needed

Therefore, the AGROFERT Foundation was established in The AGROFERT Group is one of the 2011. It consolidated partial charitable or publicly ben- largest domestic private business eficial activities of the companies, covered them with a 91 217 entities. All of the companies’ comprehensive approach and gradually defined the main million Organisations supported responsibility to create a business areas of support. Since its foundation, the individual com- Total amount of aid of the by grant procedures environment in the locations in which panies have invested hundreds of millions of crowns in AGROFERT Foundation AGROFERT Foundation they operate is part of the strategic the AGROFERT Foundation. The financial means serve as (CZK, 2018) (2018) approach to business of them all. a source for funds to help single parents, disabled people, This is also linked to the environment, seniors or volunteer and professional fire brigades. In ad- community and the environment, dition, the AGROFERT Foundation also directly supports The AGROFERT Foundation announces the grant proce- which is influenced to different extents organisations that further assist specific individuals. From dures to help the widest possible range of people of all age by the activities of the companies. the grant funds for organisations, the money goes to the categories. From children, adults to seniors or the dying purchase of equipment, assistive products or educational who need hospice care. The AGROFERT Foundation also aids, to support mobile hospice care or, for example, to cooperates with the Czech Philharmonic on the implemen- cover the costs associated with the functioning of the tation of the Music to Schools project. This activity aims to supported entities. This includes the reimbursement of popularise music education in Czech schools. It is also a labour costs, rent payments and energy payments. Such platform for music teachers to meet and inspire each other. a form of assistance is still unusual in Czech conditions. The reason is that it is difficult to present publicly, for Throughout the Czech Republic, AGROFERT Foundation example in photographs. However, it is often a crucial aid sports centres have been in operation for several years: for supported organisations, without which they would there are more than 100, which provide sports facilities for not be able to perform their activities at all. a nominal fee for more than 3,000 children.

14 AGROFERT FOUNDATION

Main areas of aid of the AGROFERT Foundation

Active life of fellow Health citizens who are and health care Applicants to the General Individual Application Fund disadvantaged or live with a disability The AGROFERT Foundation most often need support because of their state of health focuses on a wide range of areas, or disability. Contributions are intended for the purchase but some are central and most used of assistive products or for the reimbursement of neces- by applicants. Among individual sary assistance. Other funds are used to pay for intensive applicants, the funds for general rehabilitation for people with brain disabilities or to pro- individual applications and a fund vide contributions for the purchase of a car. for single parents are the most Single parents Intergenerational highly used. In addition, funds from the Single Parents Fund in Need aid projects help to find solutions to the difficult financial or social situation faced by lone parents. The help from the AGRO- FERT Foundation aims to solve, for example, problems with housing in the form of deposit allowance and first rent or reimbursement of the basic equipment needed for the flat, or helps to pay fees for children's interest groups which otherwise could not be afforded due to Senior care Hospice and palliative care the lack of funds in the family budget. The Fund thus for children, adults addresses the situation of families as a whole. and seniors

Voluntary and professional 11.5 593 fire brigades million Number Amount of aid In the Single of Single Parent in Need Parent in Need Fund Fund Applications (CZK, 2018) (2018)

15 AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

Help of the AGROFERT Foundation is also aimed at organisations

Examples include organisations helping to provide as- ents who cannot afford to pay for expensive sports clubs. The AGROFERT Foundation sistance or relief services for people with disabilities, The course fee is absolutely minimal and after school les- has also been a long-term supporter mobile hospice services for children and adults, organi- sons, children can actively spend their free time exercis- of entities that subsequently take sations supporting people with brain disorders, various ing in a place they know well, without the need to travel care of the assistance of individuals types of day care centres and services for seniors, and anywhere. The equipment and coaches are paid for by in their surroundings. low-threshold youth centres for young people from the AGROFERT Foundation. socially excluded backgrounds. The AGROFERT Founda- tion Fire-fighting Fund, which supports professional and voluntary fire-fighters, is a specific type of aid. The funds are used to acquire the necessary equipment for which fire brigades in smaller settlements often do not have enough money. But the aid from this fund also serves to finance fire-fighting sport and to preserve 165 9.7 fire-fighting traditions. The purpose is to help individual communities through fire-fighters. Especially in smaller Number of supported million settlements in the Czech Republic, fire-fighters are often volunteer and professional Amount of aid granted the last bearers of the federal, cultural and sports life of fire brigades from the Fire-fighting (2018) Fund municipalities. It is therefore important that their activi- (CZK, 2018) ties are supported.

The AGROFERT Foundation also runs its own Sports Centres to help specific locations. These work directly in individual primary schools across the Czech Republic. They allow active use of leisure time for children of par-

16 Chemical Industry

17 AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

The chemical industry in the AGROFERT Group 9 Manufacturing plants

Partial activities carried out by chemical manufactur- The chemical industry has long ing companies in this area are focused primarily on been one of the basic pillars of mitigating the environmental impacts of production, the AGROFERT Group's activities. continuous greening of operations, saving energy and 2 1 Individual chemical manufacturing material resources used, and on continuously improving Research Power plants in their regions are important the working conditions of employees. Recycling and and development plant centres corporate entities and leading low-waste management have also been an important employers. Of course, this status also issue in recent times. Chemical production operations involves their relationship to social also focus on targeted improvement solutions for water responsibility. management in response to climate change.

The situation in the labour market in the Czech Republic in 2018 did not change much compared to previous employees. They continued their further development, years, so the chemical production plants of the AGRO- especially in the area of professional competencies, in FERT Group faced a number of challenges in the field the form of training or courses. In addition, employee of human resources work. In particular, they faced a benefit systems were developed. low number of job seekers and declining numbers of Companies in the Report chemical and technical graduates. Chemical production The Group strategy is also to invest in energy and re- companies tried to face this situation mainly through source savings in the long term. In 2018, this was also DEZA cooperation with schools, in the form of visits, intern- reflected in the business activities of the companies in Ethanol Energy ships and participation in diploma theses, as well as the chemical production segment. These focused mainly Fatra participation in the competition Looking for the Best on the areas of reducing the energy intensity of their Lovochemie Young Chemist in the Czech Republic. business, material savings and waste recovery solutions, PRECHEZA the disposal of historical environmental burdens, improv- PREOL Due to unfavourable labour market developments, ing water management, and technical and technological Synthesia individual companies in 2018 focused on their own innovations.

18 CHEMICAL INDUSTRY

Lovosice Desná

Městec Králové Praha

Rybitví Pardubice

Vrdy

Valašské Přerov Meziříčí Chropyně Otrokovice Napajedla

DEZA Ethanol Energy Manufacturing Research Fatra Chemistry Centre Plant Organisations Lovochemie VUOS Power Trading Org. PRECHEZA Generation and Represent. PREOL Synthesia

* The map displays the AGROFERT Group's companies of the chemical industry in the Czech Republic.

19 AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

The chemical industry 5 626 in the AGROFERT Group Number of employees (2018)

Compared to previous years, the share of turnover de- The chemical industry has long been creased due to market factors and rising input prices. one of the main and core business However, chemistry as such remains a very important link 898 2,89 segments of the AGROFERT Group. in the AGROFERT Group's synergy chain. The companies operating in this field million billion are at the top of domestic chemistry. Chemical companies have a long tradition in the market. Social and health Staff costs insurance payments (CZK, 2018) The significance of chemical produc- Their often more than 100-year history is followed by (CZK, 2018) tion for the whole AGROFERT Group modern production within the AGROFERT Group. The illustrates the share of this business high quality of chemical production depends on the ex- in the total turnover. Chemistry still pertise of workers, investments in modern technologies holds the first ranks with a share of and new procedures, product innovations and ways of 28.8 per cent. handling production resources. It was just these aspects that were addressed by chemical industry companies in 2.47 182 2018. This was also reflected in the amount of investment. billion million Investments Taxes and charges In addition to the development of entrepreneurial ca- (CZK, 2018) (CZK, 2018) pacities, the individual chemical production companies focused on human resources work, especially to maintain and further develop the expertise of the employees, their education, recruitment activities and the popularisation of chemistry among pupils and students of schools. For Products from AGROFERT Group's domestic chemical the Czech Republic, the chemical industry is a traditional plants are exported to many countries around the world branch of the domestic economy. It was built by genera- on four continents. Customers especially value their quality tions of workers, always offering stability and generating and reliability. Chemical production companies achieve all sorts of innovations. The AGROFERT Group companies these attributes of their production precisely thanks to the also strive to maintain this status. above measures.

20 CHEMICAL INDUSTRY

Chemistry with 10.3 9 emphasis on quality million hours Expenditure on training of Expert training (CZK, 2018) (employee/year, 2018)

As a result, they may also boast a number of independent Chemical production plants are awards and certificates. This gives a signal to customers, constantly striving to improve business partners and other industry players that chemi- 113 65 their working procedures, which is cal production also meets the requirements of 21st-cen- firmly stipulated in their business tury industrial production. Employees on maternity Employees strategy. Compliance with production or parental leave with disabilities (2018) (2018) processes, experienced and Businesses approach adherence to professional standards, knowledgeable employees results quality management and strategic environmental man- in quality products. In this way the agement in a similar way. It is always based on the effort production process of the chemical at all times and in all circumstances to comply with stand- companies of the AGROFERT Group ards and directives, subject to subsequent inspection and may be summarised. validation by authorised workers or external supervising entities. The aim of implementing such an approach is to 1,249 42 maintain or progressively improve the level of business Staff trained million in chemistry, to behave in a friendly way to the environ- against corruption Services and products ment, and to treat employees fairly. In addition, individual (2018) purchased from protected companies want to demonstrate to third parties a respon- workshops (CZK, 2018) sible approach to their own business activity.

SAFE ENTERPRISE EXPORTER OF THE YEAR RESPONSIBLE CARE RELIABLE SUPPLIER Fatra, Lovochemie IN THE ZLÍN REGION (responsible business Synthesia DEZA in chemistry) Lovochemie, Synthesia, AWARD OF THE ÚSTÍ A SAFE TOY PRECHEZA GOLDEN SEAL – NAD LABEM REGION FOR Fatra PARTNERSHIP FOR SOCIAL RESPONSIBILITY COMPANY AT HEART OF PRACTICE Lovochemie THE YEAR Lovochemie PREOL 21 AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

FAMI-QS HALAL CERTIFICATION Tradition (feed safety system) PRECHEZA PRECHEZA and future view ITWL CERTIFICATION FSSC 22000 (bio-component quality) (food safety system) Ethanol Energy PRECHEZA KOSHER CERTIFICATION GMP+ B1 PRECHEZA, PREOL When looking at the history of plants, it is often possible (good manufacturing The chemical industry is a traditional to go back to the beginning of the 20th century or the practice for feeds) OHSAS 18001 (manage- branch of the domestic economy. middle of the 19th century. However, the long history Ethanol Energy, PREOL ment of occupational Without exception, this also applies of individual companies does not mean that production health and safety) to the AGROFERT Group. On the one capacities are in any way obsolete. The tradition of chemi- ISO 9001 PRECHEZA, Synthesia hand, chemical plants are one of the cal production is almost holy for the AGROFERT Group, (quality management) pillars of business, and at the same but in order to continue in the coming decades, chemical DEZA, Ethanol Energy, NON-GMO (without time one of the largest domestic production must be competitive. Therefore, individual Fatra, Lovochemie, genetic modification) producers in the area. companies are constantly investing heavily in the techni- PRECHEZA, PREOL, Ethanol Energy, PREOL cal or technological equipment of their plants as well as Synthesia in modern innovations and the further development of ETAD (Ecological employees' competencies. ISO 13485 (medical device and Toxicological quality management) Association of Dyes The chemical industry absolutely cannot do without the Synthesia and Organic Pigments high level of expertise of its workers. Chemical production Manufacturers) is based more on long-term cycles, which means, among ISO 14001 (environmental Synthesia other things, a career perspective for employees with the management) possibility of gradually developing their own skills. There- DEZA, Fatra, SVG/GMP fore, the AGROFERT Group's companies invest not only in Lovochemie, (good manufacturing training, but also in improving the working environment PRECHEZA, PREOL, practice for medicinal and creating the conditions for innovation in production. Synthesia substances) A business strategy based on continuous investment in Synthesia production facilities, improvement of work processes and ISCC EU (sustainability of the development of colleagues working in the chemi- biomass and bioliquids) cal industry is behind the success of the entire chemical Ethanol Energy, PREOL production segment. This is evidenced by the fact that the companies of the AGROFERT Group in this sector are among the leaders of the industry in the Czech Republic.

22 CHEMICAL INDUSTRY

Corporate New-generation fire-fighters chemists help everyone

The AGROFERT Group chemical companies maintain In recent years, vocational secondary schools and tech- their own fire brigades to ensure operational safety nical universities have been struggling with the declin- and the timely resolution of hazardous situations. Of ing numbers of applicants for education and a decrease 274 course, fire-fighters primarily employed for the safety in the number of graduates. This also has a negative im- of the premises of chemical plants, do not only serve pact on the labour market. Chemical production plants million the needs of chemical plants, but also actively assist in from the AGROFERT Group are naturally also affected by Research & development expenses interventions in the surrounding area, in dealing with this situation. But they are approaching the problem ac- (CZK, 2018) traffic accidents or crisis situations caused by natural tively and trying to solve it. Active cooperation directly disasters. Every year they participate in dozens with secondary schools and universities specialising in of events. chemistry and technology is one step. Individual companies work with students during their visits and intern- The fire brigades of the AGROFERT Group also partici- ships, but also participate in long-term cooperation in pate in exercises of the integrated rescue system. It is the form of supervising Bachelor’s or Master’s theses. 66 always true that you can rely on the help of fire-fighters Visits from the AGROFERT Group. In addition, the chemical companies of the AGROFERT (2018) Group are actively involved in the implementation of a competition for talented pupils called “Looking for the Best Young Chemist of the Czech Republic”. This competition has a long tradition. Thanks to it, a number of 160 24 talents have been discovered, forming the future elite of domestic chemistry. Approximately 15,000 pupils 304 Professional fire-fighters Number of collective in the actions of the integrated from all over the Czech Republic take part in the com- Trainees, interns AGROFERT Group rescue system petition every year. and temporary workers (2018) (2018) (2018)

23 AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

Ecology and support 427 10 of local communities million thousand Invested in environmentally Number of visitors to the friendly technologies and AGROFERT Run running improving the working series environment of employees (2018) (CZK, 2018) The strategic steps of responsible behaviour aim, in par- Due to the nature of their production, ticular, at continually improving production processes, it is clear that companies running streamlining production processes, handling materials, % in the field of chemistry significantly finished products and packaging, as well as an effort to influence their surroundings. produce the lowest possible volume of waste, reusing it in 7.16 51 Therefore, each company's mana the production process if technology and quality stand- million Utilisation of own energy gement strategy also includes ards allow. Considerate approaches are also applied in the Total amount of aid from operation production a responsible approach to the area of energy consumption and inputs which are used in (CZK, 2018) (average, 2018) environment and communities the production process, but not always consumed. Such adjacent to each operation. inputs include, for example, water. Water management was also one of the priority issues in 2018 due to the increasing impact of climate change on the Czech Republic. % The pursuit of considerate behaviour by companies not Companies are also aware of their responsibility for the 25 only brings the necessity of a number of measures, but social status of the localities where they operate. There- also brings possibilities of long-term financial savings. fore, they purposefully support local associations, sports Operation recycling Therefore, chemical production plants perceive these clubs, charity organisations and children's clubs and inter- waste ratio activities as an opportunity for further development. est groups. The activities of these entities are beneficial for (2018) the full functioning of human settlements in the vicinity of The production companies in the field of chemistry the chemical plants. In addition to the above-mentioned comply with the principles of environmental production activities, the chemical companies of the AGROFERT management and with the requirements for meeting ISO Group also support the volunteer activities of their em- % standards and are subject to regular inspections by public ployees, who, for example, help in hospices and senior administration institutions. The aim of these elements homes. The interest of the companies in the active life 19.8 is to mitigate the impacts of the plants’ activities on the of their own employees is not put to one side. In 2018, environment, surrounding communities and employees the AGROFERT Run series of running races, support for Share of recycled materials in inputs in Fatra using strategic and managed actions. The plants, among cycling sport and organisation of blood donation contin- (2018) other things, aim to be good neighbours for citizens liv- ued. Many of these and other activities were supported in ing around individual plants. the form of financial or material donations.

24 Agriculture, Primary Production and Forestry

25 AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

Agriculture, primary production and forestry in the AGROFERT Group

With respect to the demands of modern agriculture in by bringing the sites into a condition that will allow the Landscape conservation, care for the 21st century and taking into account the changing growth of new healthy forest. This approach is important agricultural land, livestock and climate, all AGROFERT companies in this segment are in regard to the objective of retaining as much water as domestic forests, these are all bound by a strategy of maintaining appropriate crop possible in the landscape. AGROFERT's core activities. This is rotation, economical management of soil, plants and the business segment with the third animals and a step-by-step strategy to gradually reduce Since the above-mentioned fields are also closely linked to largest share of the Group's total environmental impacts. Such activities include, for exam- people, their experience and specific sites, the companies turnover. The activities in this area ple, “smart” agriculture. This includes accurate fertiliser of the AGROFERT Group strive to preserve these traditional are strategically important due to dosing using advanced information technology and GPS industries. This makes it possible to interconnect the busi- synergies in relation to other business geolocation, making it possible to use both fertiliser and ness activities of individual AGROFERT companies. For ex- activities of AGROFERT Group's plant protection products economically and efficiently. ample, the crop rotation procedure of arable farming com- companies. panies can be implemented precisely because the crop The companies of the AGROFERT Group apply similar will find its customers in animal farming companies. There- considerate care in relation to farmed animals. Gradually, fore, AGROFERT Group's farmers are not only dependent individual farming is being modernised and the wel- on the rotation of two profitable crops for which there is fare of farmed animals improved, in particular through demand in the market, but they may farm like a generation Companies in the Report investments in the reconstruction or building of new of farmers in the past – according to good planting prac- facilities for individual farming, or through the continu- tice and with certainty of sales for their production. AFEED ous improvement of management processes in farming AgroZZN livestock. The strategy of taking a careful approach to daily Agriculture has been, is and must continue to be, per- Cerea activities is also applied in forest management, despite ceived as a field firmly connected not only with agricul- NAVOS the fact that in 2018 there was a bark beetle attack in the ture produce and landscape maintenance but also with OSEVA Czech Republic requiring rapid intervention. The AGRO- its protection. That is why we also support biodiversity Primagra FERT Group companies operating in this area ensure that elements in our sowing sequences within our farming. Uniles forest roads are maintained and logging is carried out with The ecological method of farming and establishing of bio- Wotan Forest the help of modern technologies, so that the forest cover zones providing shelter for wild animals is thus another ZZN Pelhřimov is restored with suitable and especially high-quality seed- step towards the interconnection of agricultural produce ZZN Polabí lings. Care is also taken to clean up areas after logging, and landscape protection.

26 AGRICULTURE, PRIMARY PRODUCTION AND FORESTRY

Rumburk

Chřibská Krásné Pole Rynoltice Česká Kamenice Liberec Mimoň Hodkovice n. Mohelkou Česká Lípa Bozkov Litvínov Provodín Horka Dolní Olešnice Bohušovice n. Ohří Karlovice u Staré Paky Prosmyky Polepy -Sedmihorky Osek u Duchcova Lomnice Trutnov Černovice Kněžmost n. Popelkou Roudnice Dvůr Postoloprty n. Labem Jičín Drmaly Vrbičany Králové Kocbeře Šumná Mělník Ostroměř Dobroměřice Straškov Bezděčín Dobrovice Slatiny Žabokliky Vraňany Libáň Česká Skalice Javorník Louny Hořice -Říkov Radonice Žatec Zlonice Křinec Byšice Chotětov Sadová Smiřice Krásný Dvůr Vrbno n. Lesy Tišice Hukovice Velká Bučina Městec Králové Nový Bydžov Kvasinská-Solnice Podbořany Podlešín Lysá n. Labem Nymburk Kolešovice Nové Strašecí Slaný Kněževes Měšice Vojtanov Buštěhrad Libice n. Dobřenice Jesenice Klučov Cidlinou Borohrádek Hanušovice Rakovník Kamenné Nová Ves II Pečky Řečany n. L. Cheb Nebanice Drahouš Žehrovice Holice Žihle Ovčáry Přelouč Tlesky Pavlíkov Velim Kostelec n. Orlicí Čistá Praha Kolín Pardubice Dašice Kouřim Strančice v Čechách Rýmařov Lanškroun Planá Kuchař Kostelec Oleška Opava Kravaře Výrov n. Č. Lesy Kutná Hora Slatiňany Cerekvece Zábřeh Chodský Újezd Skvrňov Vrdy n. Loučnou Trpísty Babina Třebovice Tachov Benešov Uhlířské Janovice Moravská Třebová Dobříš Hlinsko Svitavy Bor Rybníky Ledeč Chotěboř Mohelnice Butovice-Studénka Staré Kladruby n. Sázavou Městečko Sedliště Příbram Sedlčany Polička Jablonná Zdislavice Trnávka Dzbel Lipná Semněvice Dolní Votice Rožmitál Havlíčkův Brod Nové Město Suchdol n. Odrou Hbity na Moravě Poběžovice p. Tremšínem Milín Skoupý Staňkov Humpolec Mírovka Mutěnín Mirovice Horšovský Mladá Vožice Polná Týn Koloveč Pacov Dobronín Prostějov Přerov Pelhřimov Točník Čimelice Čekanice Domažlice Rantířov Klatovy Milevsko Stará Ves Planá n. Lužnicí Záhoří u Písku Chýnov Kamenice n. Luka n. Jihlavou Všetuly Lipou Čikov Horažďovice Klenovice Dlouhá Brtnice Písek Hodonice Kroměříž Sušice Jarošov Františkova Zdounky Ves Skály Protivín n. Nežárkou Telč Budišov Kardašova u Třebíče Brno-Chrlice Dynín Koryčany Řečice Ivančice Dívčice Český Rudolec Slavkov u Brna Staré Město Třeboň Rakšice Modřice Kyjov České Budějovice Slavonice Dačice Bzenec Rybníky Hustopeče Uherský Brod Suchdol Olbramkostel Vlkoš n. Lužnicí Miroslav Šumná Ratíškovice Borovany Hrušovany Podivín Rohatec Strážnice Mikulovice n. Jevišovkou Trhové Sviny Mikulov Kájov Hodonice 203 Kaplice Number of agricultural company operations Omlenice in the Czech Republic*

6 37 AgroZZN OSEVA ZZN Pelhřimov Number of companies Number AFEED Primagra ZZN Polabí for agricultural supply of branches Cerea Uniles and purchase of forestry companies NAVOS Wotan Forest

* Number of centres of primary, pig, poultry and egg production companies of the AGROFERT Group in the Czech Republic.

27 AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

Modern approaches 3,040 to agriculture and forestry Number of employees (2018)

AGROFERT Group's companies are aware of market and The entire agricultural, forestry individual industry changes. That is why they invest and landscape management industry every year in new engineering, modern technologies 425 1.6 has undergone a rapid transforma- and improvements to management processes and tion in recent decades. The business further developing workers who are engaged in arable million billion structure has changed, the market farming or forest management every day in their profes- Social and health insurance Staff costs payments (CZK, 2018) has been gradually influenced by sion. The goal is to remain a leader in our field in the (CZK, 2018) the Czech Republic's accession to Czech Republic. Therefore, employees regularly attend the EU, and modern engineering and professional training courses. Strong employee compe- technologies have fundamentally tencies maintained at the contemporary level enable transformed farmers' daily work in the AGROFERT Group to act as a leader in the segment. arable and animal farming as well as This business strategy also has a number of side effects, the work of foresters. In spite of this including: 537 195 fact, these fields of activity cannot be million million detached from the regions and tradi- economic benefits of individual companies, internal Investments Taxes and charges tions with which they have been con- economy and the communities of the AGROFERT Group's (CZK, 2018) (CZK, 2018) nected for generations. business sites,

modern, controlled forest cover management, Modern agriculture, primary production and forestry are modern working environment for employees, fields that are indispensable for the Czech Republic. That is why the AGROFERT Group approaches these activi- renewal of domestic landscape, ties in a sensitive way and with the utmost care, among other things, to enable the passing on to future genera- business activity complying with legal regulations, tions of the tradition of arable and animal farming, as well as the tradition of caring for domestic forests. friendly attitude to soil, plants and livestock.

28 AGRICULTURE, PRIMARY PRODUCTION AND FORESTRY

Rožďalovice Vestec Bžany Březina Štěpánovice

Skršín Bechlín Bělá Choustníkovo Hradiště Úlibice Vlčkovice Málkov Šepetely Valovice v Podkrkonoší Nemilkov Hrušovany Vrbka Hasina Lužany Škrle Ředhošť Skuhrov Libichov Lažany Robousy Velká Kraš Všehrdy Zlonice Luštěnice Záhornice Libiš Tišice Starý Libřice Plchov Bydžov Kobylá n. Vidnávkou Plesná Sedčice Křinec Nepolisy Blšany Horňátky Pátek Skorošice Jindřichov Mikov Ostrov Vroutek Kačice Úmyslovice Lužec Lišany Opolany n. Cidlinou Nebanice Kamenné Kněževes Bezděkov Žehrovice Němčice Lipec Kasalice Družec Veltruby Labské Radim Jestřábí Lhota Cheb Býchory Chrčice Plaňany Kočí Kladruby Nabočany Dvořisko Melč Zálabí Opava Vojenice Mlečice Rašovice Křečhoř Dvorce u Bruntálu Zaříčany Radim Hradec n. Moravicí Vejprnice Vojtěchov Žandov Radnice Luže Branka u Opavy Záchlumí Lhotka u Radnic Netvořice Sendražice Kutná Hora Těnovice Všetice Chlístovice Vilémov Litomyšl Planiny Dolní Újezd Dobříš Soběhrdy Kralice Jakubovice Žákava Bílovec Bor Číčov Petroupim Uhelná Příbram Skřipov Velké Albrechtice Poděbaby Příjemky Ždánice Bystřice Ouběnice Zdislavice Milotice Puclice Petrovice Rovné Kunín Louňová Onšovice Krásná Hora Staňkov Ratibořské Zachotín Kundratice Příbor Nezvěstice Hory Henigarov Litohošť Čekanice Rozsochy Nechvalín Vřesce Strměchy Hnačov Vřesce Plevnice Brnířov Lažánky Doubravice Chropyně Sedlice Vyskytná n. Svitavou Chýnov Jevišovice Černín Kladruby Albrechtice Rynárec Žatčany n. Vltavou Křepice Podchříbí Strakonice Skalka Nosislav Kožichovice Napajedla Jinín Strašice Třešovice Slatina Cvrčovice Skoronice Vracov Bzenec Mokřiny Přešovice Velké Nicov Bojanovice Němčice Kyjov Nový Dvůr Vlčnov Střelice Milotice Kojákovice Mikulovice Přibice Rudlice Nová Vacenovice Vevčice Ves Trhové Sviny Křepice Ratíškovice Kaplice Uherčice Mramotice Břežany Citonice Vnorovy Žádovice Rohatec Hevlín Šakvice Záhorkov Krhovice Velký Karlov Hrádek Plaveč Pánov up to 1,000 ha AGRO Mikulovice ČESKÁ VEJCE FARMS RK Náklo ZEOS Brnířov Specialised breeding Chickens Agrobech Doubravická SADY CZ ZEMSPOL Pigs Vodňanské kuře AGRO Plchov M + A + J SCHROM FARMS ZS Třebívlice Výkrm Tagrea AGRO Přešovice Nový Dvůr Kunovice ZEAS Mančice ANIMO Žatec LIPRA PORK Výkrm Třebíč SPV Pelhřimov 1,000-2,000 ha Agrobor PODCHŘÍBÍ JEŽOV Vlčnovská zemědělská ZS Vysočina AGRO Rozsochy PRVNÍ ŽATECKÁ VSV Eggs AGRO Vnorovy 1. Hradecká zemědělská ZERA AGRO Jinín SPV Pelhřimov ZEVA Chlístovice AGROPODNIK Hodonín MAVEX AGRO STATEK BŘEŽANY Zlatý klas ČESKÁ VEJCE CZ ČESKÁ VEJCE FARMS SCHROM FARMS over 2,000 ha AGROCOM HRUŠOVANY ALIMEX NEZVĚSTICE První zemědělská Záhornice ZEMOS AGD Kačice DZV NOVA RYNAGRO ZOD Zálabí AGRO Jevišovice Lužanská zemědělská ZAS Podchotucí Zemědělská společnost Blšany AGROPARKL KLADRUBSKÁ ZD Křečhoř ZS Vilémov AG AGROPRIM Oseva Agri Chrudim ZEAS Puclice *The map displays AGROFERT Group's primary production companies in the AGS AGRO Poděbradská blata ZEM Czech Republic.

29 AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

BEZ GMO (without ISO 14001 (environmental Responsible management genetically modified management) ingredients) UNILES, Wotan Forest, Cerea, Primagra, ZZN Pelhřimov throughout ZZN Pelhřimov ISO 22000 (Food Safety the Czech Republic GMP+ B1 (good Management) manufacturing practice AFEED, ZZN Pelhřimov for feeds) In 2018, these entities and their employees took care of AFEED, Cerea, Primagra, ISCC EU (sustainability of Activities in the area of agricultural 435,000 pigs, nearly 30,000 cattle and nearly 35 million ZZN Pelhřimov biomass and bioliquids) produce, forest management and poultry, but also cared for nearly 115,000 hectares of AgroZZN, Cerea, agricultural land are carried out agricultural land, most of which the companies leased GMP+B3 (good practice in NAVOS, Primagra, ZZN in hundreds of operations of the or rented from private owners. All in all, this means one trading, storage and own Pelhřimov, ZZN Polabí AGROFERT Group's companies, thing: a huge share of responsibility for animals, but also land transport of feed) which are located virtually for specific sites and the life in them. In addition, agricul- AgroZZN, Primagra, ISO 50001 (Energy throughout the Czech Republic. tural produce, primary production and forestry compa- ZZN Polabí Management System) nies bear a significant share of the responsibility towards AgroZZN, NAVOS, their customers or, vice versa, suppliers. PEFC (forest certification Primagra, UNILES, system) Wotan Forest, ZZN In order to maintain the high quality of all activities in UNILES, Wotan Forest Pelhřimov, ZZN Polabí this segment, the legal requirements of the respective type of business as well as standards for partial OHSAS 18001 SQAS (system of quality procedures and whole processes are strictly observed. (management of the and safety assessment This makes AGROFERT Group's business more transpar- occupational health and of agrochemical ent and trustworthy for all stakeholders. In addition, the safety system) distributors) companies operating in agriculture, primary production UNILES, Wotan Forest, ZZN Polabí and forestry are under constant inspection not only from ZZN Pelhřimov the internal auditors of the AGROFERT group, but also the GTP state administration and external audit companies. ISO 9001 (quality (good trading practice) management system) AgroZZN, Cerea, OSEVA, Primagra, NAVOS, ZZN Pelhřimov, UNILES, Wotan Forest, ZZN Polabí ZZN Polabí ISO/IEC 17025 (competen- ce of testing and calibrati- on laboratories) OSEVA

30 AGRICULTURE, PRIMARY PRODUCTION AND FORESTRY

Success based 5.1 15.5 on knowledge million hours Expenditure on training of Professional training and tradition (CZK, 2018) (employee/year, 2018)

This is why the AGROFERT Group companies invest in the Agriculture, primary production and knowledge of their employees. They may draw on the forestry are closely linked to the knowledge maintained in the industry for generations, 61 110 transfer of traditions from generation but on the other hand they keep pace with current indus- to generation, in particular, in the try trends by attending lectures, seminars and training Employees on maternity Disabled employees (2018) field of the transfer of professional sessions. The AGROFERT Group also ensures that employ- or parental leave (2018) skills and knowledge, which we owe ees work with modern equipment, in a suitable working to our ancestors. In addition, however, environment and according to modern procedures. This rapid technical and technological also leads to achieving better results. Of course, such a development is taking place. strategy entails the need to invest in companies' premises, their equipment and know-how, as well as in employee development. 1 661 38 In the segment of agricultural produce, primary produc- Staff trained against Visits tion and forestry, the AGROFERT Group's companies are corruption (2018) important regional employers as well as important busi- (2018) ness partners of the downstream industries. That means 21.4 only one thing: greater responsibility. Therefore, the sub-companies establish long-term relationships with million their employees and all third parties. Social, sporting, Services and products charitable and educational events are also supported purchased from protected workshops at the sites where the individual companies of the 331 0.9 (CZK, 2018) AGROFERT Group operate. Trainees, interns million and temporary workers Total amount of aid (2018) (CZK, 2018)

31 AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

Environmentally Pig Camp, friendly attitude the only course of its kind

Everyday activities in the fields of agricultural produce, The AGROFERT Group created a unique training course primary production and forestry are directly linked to % for future pig breeding managers. Over the course of the management of agricultural land and the landscape 51 12 months, the participants practically prepare 10 repro- as such, and the management of crops and animals, ductive pig breeding programmes directly for operations. and last but not least, these activities largely affect the Share of waste handed Throughout the period, the trainees are provided with over to recycling environment of the communities in the locations where (2018) income, accommodation and travel expenses for work. the respective enterprises are active. All of this places Each participant is attended by experienced mentors demand on the AGROFERT Group's companies in the who help them to master the whole process of acquir- respective segment to adhere to an environmentally ing skills. friendly strategy. Thanks to the fact that the whole programme is car- The effort of individual entities is to gradually continue ried out in several breeding cycles, trainees gain a wide in the greening of business and to improve their rela- 146 awareness of the pig-breeding industry and may subse- tionship with the surroundings. There are many ways million quently transform their good practical experience into to achieve this goal, from the more efficient use of Investments in more their own work in the future profession. Pig Camp is in- resources, energy savings, through the improvement of eco-friendly technologies tended for anyone with a secondary school or university farm animal housing, the use of modern technology to (CZK, 2018) education in the agricultural sector. Participation in the investment in innovation, waste management systems programme may be started at any time – it runs continu- and water management. In addition, individual compa- ously throughout the year. nies invest annually in their own employees, increasing their professional skills and deepening their know-how in their field of activity.

32 Food Industry

33 AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

Food industry in the AGROFERT Group

These companies are of similar importance for the AGRO- based particularly on the skills of workers and traditions The AGROFERT Group's companies FERT Group – both in the “farm-to-fork” strategy, which passed on from generation to generation. This applies to operating in the food industry are combines synergistic links with agricultural produce, but virtually all AGROFERT Group companies in this segment traditional and proven producers the importance of this segment is also evident in its share – from bread production through dairy products to meat of food of domestic origin. They are of the entire Group's turnover. It is the importance and production. Therefore, companies invest in developing not only important because of their market success of the food companies that is one of the the expertise of their employees and in the facilities of market position, but also because reasons why there is continuous innovation of produc- individual operations. of the long history of the many brands tion capacities, work processes and recipes, and plant and traditions they bear. equipment in this segment. The idea is production that meets current customer requirements and standards and a responsible business strategy. Due to this approach, the Companies in the Report AGROFERT Group's food companies boast a broad portfolio of products that will satisfy customers across social 7,807 3.4 Animalco and economic groups. Number billion KMOTR – Masna Kroměříž of employees Staff costs Kostelecké uzeniny In 2018, AGROFERT's food production was also, by its very (2018) (CZK, 2018) Krahulík – MASOZÁVOD Krahulčí nature, under the strict and constant supervision of the Mlékárna Hlinsko inspecting authorities, customers, retail chains and media, OLMA but was also in the spotlight of the jury in a number of PAPEI competitions. Businesses are well aware of this situation. PENAM Their production is therefore firmly connected with ad- Pekárna Zelená louka herence to norms and standards, while working proce- 912 187.5 PMU dures are certified. PREOL FOOD million million Social and health insurance Taxes and charges PROFROST Although modern 21st century technology is widely used payments (CZK, 2018) Vodňanská drůbež in food production, the production of quality food is still (CZK, 2018)

34 FOOD INDUSTRY

Hrádek n. Nisou Česká Kamenice Chrastava Liberec Děčín Cvikov Semily Česká Lípa Ústí n. Labem Mimoň Vrchlabí Trutnov Teplice Litoměřice Jablonec Doksy N. Nisou Červený Kostelec Jirkov Hronov Most Mladá Dvůr Králové Chomutov Náchod Lovosice Boleslav Louny Roudnice Mělník Žatec n. Labem Milovice Slaný Nové Strašecí Brandýs n. Labem Hradec Vrbno Králové Kostelec n. Orlicí p. Pradědem Praha Herink Pardubice Mariánské Lázně Úvaly Skořenice Česká Šumperk Beroun Klimentov Kutná Hora Chrudim Třebová Čestlice Karviná Zábřeh Planá Mníšek p. Brdy Ostrava Třemošná Zruč Uničov Dobříš n. Sázavou Hlinsko Havířov 1.5 Plzeň Rokycany Ledeč n. Mohelnice Šternberk Bílovec Vratimov Benešov Sázavou Příbram billion Žďár Brněnec Kopřivnice n. Sázavou Olomouc Odry Investments Frenštát p. Radhoštěm Mirovice Humpolec (CZK, 2018) Domažlice Pelhřimov Rožnov p. Radhoštěm Jihlava Kuřim Prostějov Kostelec Planá n. Lužnicí Holešov Vsetín Písek Hodice Strakonice Studená Jindřichův Kroměříž Zlín Vodňany Hradec Krahulčí Třebíč Rosice Brno Náměšť Modřice Luhačovice Hluboká n. Vltavou n. Oslavou Vojkovice Prachatice

České Budějovice Znojmo Hodonín

25.2 Břeclav billion Turnover of food companies * (CZK, 2018) Meat processing Egg products plants Bakeries Delicatessens Animalco PENAM CZ15 KMOTR – Masna Kroměříž PMU CZ Kostelecké uzeniny PREOL FOOD Mills Edible oils CZ333 Krahulík – MASOZÁVOD Krahulčí PAPEI Mlékárna Hlinsko PROFROST Dairies Shops Domestic pork and beef Olma Vodňanská drůbež identification

* Only in the companies included in the Corporate Social Responsibility Report 2018.

35 AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

IFS FOOD (food quality and BEZ GMO (without Quality and safe food safety) genetically modified All companies components) produced in the Czech Mlékárna Hlinsko, OLMA, BRC (Food Safety and PREOL FOOD Sanitation Standards) Republic Kostelecké uzeniny Rewards obtained in 2018

KOSHER BREAD OF THE YEAR Regardless of whether these are at a very affordable Mlékárna Hlinsko, OLMA, PENAM, Pekárna Zelená On a European scale, the Czech price or, vice versa, premium products, in all circum- PREOL FOOD louka Republic is one of the countries stances, food must comply with hygiene, guild and where food production is most strictly product standards. Moreover, this is also checked by HALAL DĚTSKÁ CHUŤOVKA supervised in relation to product the government administration bodies and independ- Mlékárna Hlinsko, OLMA CERTIFICATION 2018 quality and safety. This, of course, ent laboratories. Each food company is therefore re- Mlékárna Hlinsko, PENAM, also applies to the AGROFERT sponsible for its own production. HACCP (Hazard Analysis Vodňanská drůbež, OLMA Group companies, which are among and Critical Control Points the most important players in this As in other industries, food produce is constantly evolv- System) KLASA market segment. The aim is to offer ing and changes with changes in customer tastes. Mlékárna Hlinsko, PENAM, Kostelecké uzeniny, customers a wide range of high- AGROFERT Group's businesses in the food industry focus PREOL FOOD PAPEI, Vodňanská drůbež quality and safe food. mainly on large volumes of production with a significant share of mechanisation, which does not mean that BIO FOOD MOST TRUSTWORTHY individual companies are abandoning skills acquired for OLMA BRAND in the MEAT AND generations, handicrafts or perhaps the use of natural SMOKED MEAT category ingredients. On the contrary, the companies try to com- ISO 9001 (Quality Kostelecké uzeniny bine modern technology with the original recipes and Management) skills of workers to create quality products that are avail- Kostelecké uzeniny, ČESKÁ CHUŤOVKA able to a wider number of customers. For this purpose, PREOL FOOD CERTIFICATION 2018 funds are invested every year in plant equipment, recipe Mlékárna Hlinsko, innovations, improvements in company management ISO 22000 (Food Safety Krahulík–MASOZÁVOD processes and production processes themselves. All Management) Krahulčí, Kostelecké these steps led in 2018 to further improvement of the PAPEI uzeniny, PENAM, quality and safety of the AGROFERT Group's food com- Vodňanská drůbež panies' products. ISO 14001 (Environmental Management) DLG (Product Quality OLMA Evaluation – Lidl) Krahulík–MASOZÁVOD Krahulčí

36 FOOD INDUSTRY

There are specific people 6.8 5.4 behind each product million hours Expenditure on training Expert training (CZK, 2018) (employee/year, 2018)

As the individual companies strove to further develop Despite technical and technological their skills, investments in training and courses continued advances, meaning many food in 2018 aimed at shifting the working skills of the par- 390 188 production activities may be ticipants involved, improving their relationship with the fully automated, food production profession and keeping their skills to current standards. Employees on maternity Disabled employees (2018) still cannot be done without the or parental leave (2018) involvement of employees and their Due to its specifics, the food segment is a relatively suit- expertise. People are the bearers able environment for the socially responsible behaviour of traditional practices and the of the companies during their personnel work. Individual relationship to craft production, which working procedures and their continuity also enable food is also receiving attention in modern companies of the AGROFERT Group to offer job oppor- operations of the 21st century. For tunities to people with health or social disabilities. As a this reason, the employees are so result, they often become invaluable helpers in the pro- 963 45 important for AGROFERT Group's duction of baked goods, dairy products and sausages. Staff trained against million food companies. In these work activities, the talent of workers with differ- corruption Research & development ent abilities, such as a sense of accuracy, is fully visible. (2018) expenses (CZK, 2018) In addition, in 2018, a programme allowing job place- ments for persons in prison continued. Working in prison 62 improves prisoners' psychological well-being, but also stabilises their financial situation, which in turn makes it million easier for them to return to normal society after the com- Services and products purchased from protected pletion of their sentence. workshops (CZK, 2018)

37 AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

People 19 468 and an environmentally Visits Trainees, interns (2018) and temporary workers friendly food industry (2018)

With respect to these past facts, the AGROFERT Group The AGROFERT Group's food has adopted a strategy binding on food companies that % processing companies are important requires them to actively implement measures that will 22 2.6 regional business entities, especially lead to a permanent reduction of the environmental im- because of their supplier-customer pact of their production and logistics. The strategy also Share of waste handed million relations. However, their impact on focuses on protecting the lives of communities around over to recycling Total amount of aid (2018) (CZK, 2018) regional employment and the state individual operations, improving the management of of the environment is equally input materials and, on the other hand, waste manage- important. ment, and permanent activities to improve working conditions for employees. As a result, AGROFERT Group's companies can be good neighbours. As such, the individual food producers of the AGROFERT Group take care of supporting local sporting, charitable and social 50 441 activities, especially in the form of material support and million Number of plant financial donations. Investments in more inspections by government eco-friendly technologies administration As important food producers, the food companies of (CZK, 2018) (2018) the AGROFERT Group also cooperated with a number of schools and specific pupils and students in 2018. Busi- nesses are trying to bring food production nearer to the younger generation. It is a very diverse, responsible and promising area – especially with regard to the growing 57 world population. Therefore, in 2018 individual companies arranged visits by pupils directly to production and million internships of students, participated in their diploma Charges for packaging recycling companies theses and, in addition, gave them the possibility of (CZK, 2018) their first job.

38 Land Transport, Engineering and Agricultural Technology

39 AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

Land transport, engineering 1,452 888.7 and agricultural technology Number million of employees Staff costs (2018) (CZK, 2018)

In all these fields, agricultural technology, logistics ser- The companies of the AGROFERT vices and modern engineering are needed for the daily Group which operate in the fields operation of businesses. This is why the land transport, 231.2 85.4 of land transport, technology and engineering and agricultural technology segment is an agricultural technology are essential important link for synergy relations in the AGROFERT million million for the Group’s entire business, Group. Social and health insurance Taxes and charges payments (CZK, 2018) not just in terms of their economic (CZK, 2018) significance, but mainly because of In the area of corporate social responsibility, the compa- the link to the business of agricultural nies operating in these fields focus primarily on increasing companies, primary production the effectiveness of their own activities. The aim of these companies, forestry companies steps is to reduce the environmental impact of individual and food producers. activities, to better manage resources, reduce fuel consumption and improve considerate packaging manage- 250.5 ment and recycling. The focus is also on the management million Companies in the Report systems of all companies in order to achieve economic Investments savings and improve the working environment of em- (CZK, 2018) AGF Food Logistics ployees. Each of the companies approaches this issue AGF Logistics using different strategies, mainly due to the differences AGROTEC between specific business activities. Specifically, it covers AGRI CS a wide range of activities from transporting food in fresh The companies in this segment are specific, but at the FARMTEC and ultra-fresh mode, through transport of wood, trading same time very progressive, which ranks them as the mar- Logistics Solution in modern agricultural and fire-fighting equipment, to ket leaders. This is attractive for collaborating with external CENTROPROJEKT GROUP technology for stable equipment for livestock. partners, including secondary schools and universities.

40 LAND TRANSPORT, ENGINEERING AND AGRICULTURAL TECHNOLOGY

Rumburk

Lovosice Horka Mladé Buky Litvínov u Staré Paky Boleboř Kněžmost Roudnice n. Labem

Dobroměřice Tišice Smiřice

Městec Králové Kněževes Loučná n. Desnou Cheb Praha Bruntál Kutná Hora Zábřeh na Moravě Opava Litomyšl Ostrava Bystřice Uhlířské Rybníky u Benešova Janovice Svitavy Suchdol Horní Suchá Havlíčkův Brod Olomouc Milín Žďár n. Sázavou Pelhřimov Kostelec Jistebnice Domažlice Klatovy Tábor Prostějov- Velký Bor Záhoří u Písku Kralický Háj Kroměříž Strakonice Trnava Janovice Planá n. Lužnicí Zlín n. Úhlavou Brno Krahulčí Sušice Dynín Jindřichův Hradec Uherské Hradiště Miroslav Hustopeče Ratíškovice České Budějovice Hodonín

Břeclav

AGF Food Logistics AGROTECHNIC MORAVIA FARMTEC AGF Logistics AgroZES Logistics Solution AGRI SYSTEM ARBO KVARTO AGROTEC CENTROPROJEKT GROUP NAVOS FARM TECHNIC

* The map displays AGROFERT Group's land transport, engineering and agricultural technology companies in the Czech Republic.

41 AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

IFS LOGISTICS ISO 3834-2 (Production A responsible business (Refrigerated Food of Metal Structures for Handling) Animal Farming) based on standards AGF Food Logistics FARMTEC GMP+B4 (Road Transport ISO 18001 (Occupational and certificates of Feed) Health and Safety AGF Logistics, Logistics Management System) Solution CENTROPROJEKT This is true whether it is the transport of food sensitive GROUP The nature of the activities of the to maintaining a temperature regime that must not be ISO 9001 (Quality AGROFERT Group's companies violated throughout the product management chain, or Management) CONSTRUCTION OF THE operating in the fields of transport, the technologies and equipment for stables, which in AGF Logistics, Logistics YEAR 2018 IN THE ZLÍN engineering and agricultural turn must comply with modern breeding requirements, Solution, FARMTEC, REGION technology requires strict adherence veterinary standards and a welfare improvement strategy CENTROPROJEKT CENTROPROJEKT to standards and certification of those for livestock. The certification of working procedures GROUP GROUP activities where it is essential. There and offered goods and services is the first advert of the are many reasons. The message to company to their business partners, inspection authori- ISO 14001 (Environmental CONSTRUCTION OF THE customers that the services of each ties, public, but also their own employees. This is a clear Management) YEAR 2018 (finalist) company are good and safe is the declaration of responsible business. AGROTEC, AGRI CS, CENTROPROJEKT most important. CENTROPROJEKT GROUP This approach is one of the cornerstones of the strategy GROUP to be trusted partners for other businesses. In addition, GMP+B4 (Rail Transport these activities positively influence the management ISO 50001 (Energy of Feed) of individual companies and all their internal processes, Management System) AGF Logistics, Logistics which are subordinate to achieving and maintaining AGF Logistics, AGF Solution quality and other standards. From the point of view of Food Logistics, the economy of companies in this segment, an active Logistics Solution GMO FREE approach to compliance with standards and certification AGF Logistics of activities and goods is also positively reflected in the economic results. This is due to increased business ef- ficiency and reduced resource consumption, and on the other hand, through the greening of workflows.

42 LAND TRANSPORT, ENGINEERING AND AGRICULTURAL TECHNOLOGY

Good relationships 8 16.5 with employees million hours Expenditure on training Expert training and business partners (CZK, 2018) (employee/year, 2018)

While the low level of unemployment has made it dif- The very good performance of the ficult to fill staffing capacity at times, on the other hand, domestic economy in 2018 was the AGROFERT Group companies from the above seg- 29 20 strongly reflected in human resources ment have further strengthened their relationships with work in virtually all segments of the their employees, for example, by further developing their Employees on maternity Disabled employees (2018) AGROFERT Group, including the professional skills, through incentive programmes, and by or parental leave (2018) fields of transport, engineering and improving the background of the individual companies. agricultural technology. In 2018, employees could also make use of a rich system of benefits. They included:

company catering, contribution to meal vouchers, pension and life insurance, 2.5 10.7 million million refreshments at the workplace, Total amount of aid Services and products (CZK, 2018) purchased from protected contributions at retirement, workshops (2018) employee loans, Transport, engineering and agricultural technology com- cafeteria system, panies are also well aware of their share of responsibility for the state of the environment and communities in their assistance in difficult life situations area of operation. Therefore, every year they support a number of cultural, sporting and charitable events. In 2018, this support was implemented mainly in the form of financial and material donations.

43 AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

Transport and engineering Tech Camp provides attract the incoming experience generation with engineering

At present, the fields of transport, engineering and Tech Camp is the second absolutely unique train- agricultural technology are becoming increasingly im- ing programme of the AGROFERT Group. Unlike Pig portant, especially due to customer demands, the need 15 Camp, it focuses on engineering and technology in to respond quickly to changing market conditions and livestock breeding. The whole programme is managed climate change, all in a situation of very rapid technol- Visits by FARMTEC. It uses it to train and prepare for future ogy development. (2018) employment with traders, product specialists and tech- nologists. The programme focuses on investment in Rapid changes and the influences of modern technol- livestock production or renewable energy sources. ogy are perfect prerequisites for the application of the young, incoming generation. Cooperation directly with The participants are involved in the professional pro- pupils, students and graduates, and cooperation directly gramme for a period of 6 to 12 months based on their with educational institutions then gives the AGROFERT 72 previous experience in the field. The schedule of the Group’s companies the opportunity to combine mod- training is designed so that each participant gains ex- Trainees, interns ern, up-to-date approaches in the respective area of and temporary workers perience in selected cattle or pig farming. Of course, individual fields with their own experience and know- (2018) there is also a theoretical component. Accommodation how, thanks to which they are successful in the market. is provided near individual farms for the duration of It is therefore no exception that the cooperation initi- the Tech Camp course as a benefit for the participants. ated at the time of studies will gradually change into a There is no worry about commuting. Interested persons permanent working relationship. may join Tech Camp at any time: applications are ac- cepted year-round.

COURSE LASTING FROM 6 TO 12 MONTHS

PRACTICE AT 4 TO 8 FARMS

PROSPECTS OF STABLE EMPLOYMENT

44 Media

45 AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

Media 1,182 938.7 in the AGROFERT Group Number million of employees Staff costs (2018) (CZK, 2018)

In particular, this concerns the MAFRA Media House and The media, online communications LIN and LONDA. In 2018, the media division was strength- and mobile operator services seg- ened by acquiring leisure-time titles from Bauer Media in 223.3 2.3 ments forms the last part of the the Czech and Slovak Republics. This appropriately sup- AGROFERT Group's business activi- plemented the portfolio of products already put out by million million ties in this Corporate Social Respon- MAFRA. Social and health insurance Taxes and charges payments (CZK, 2018) sibility Report. The share of this busi- (CZK, 2018) ness segment in AGROFERT Group's AGROFERT Group's media division also includes a number total turnover was rather symbolic in of other business activities – from radio and television 2018, but the media is important as channels, through printers and advertising services to a complement to the entire chain of e-commerce, mobile operator services and ticketing activities of the individual companies, services. as it directly addresses the general 163.8 public. In terms of success, the AGROFERT Group's media was million one of the most successful in the market in 2018. The MA- Investments FRA media group was number one of the printing market (CZK, 2018) in the Czech Republic.* In 2018, Radio Impuls remained the most listened to radio station nationwide. The music Companies in the Report channel Óčko was similarly successful, even reaching a record audience of more than 1 million viewers in 2018.** and schools, in relation to the support of the non-profit ACOMWARE In the long term, it is even the fourth most watched tel- sector and ethical handling of information. Responsibility MAFRA evision channel – just after the national ones. in relation to readers, listeners and viewers is the most LONDA important. LIN All these facts are binding on AGROFERT Group's media Stanice O companies in relation to the activities of socially respon- * Media Project, Union of Publishers, ASMEA, Median, STEM/MARK, Q4 2018 Skupina TICKETPORTAL sible behaviour and cooperation with business partners and Q1 2019 ** November 2018, Mediaresearch Survey for the Association of Television Organisations

46 MEDIA

Liberec

Ústí n. Labem

Hradec Králové Karlovy Vary Praha Pardubice

Ostrava

Olomouc

Jihlava

Zlín Brno

České Budějovice

LIN Periodicals Rádio LONDA MAFRA Web/Multimedia Printing house MAFRAPRINT Stanice O TICKETPORTAL Group TV Tickets

47 AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

Recognised media work

Of course, this situation is also reflected in the environ- The media market has recently ment of AGROFERT Group's companies from the media KŘIŠŤÁLOVÁ LUPA (2018) undergone very rapid development segment. Media workers are subject to higher demands, Third place in News and Current and is strongly influenced by the in particular with regard to the ethical compliance, speed, affairs category (iDNES.cz) advent of modern technology. The accuracy and credibility of provided information, reliable Fourth place in the Interest Sites traditional format of media outputs resource management and the ability to engage target category (Technet.cz) is fundamentally changing, consumer groups in an environment with hundreds of competing habits are evolving, the impact of entities. EUROPEAN NEWSPAPER AWARD (2018) online media and the use of mobile The monthly magazine ESPRIT of the applications are rising, the impact of It is all the more pleasing that the media companies of Lidové noviny won in the category of social networks is interfering with the the AGROFERT Group are keeping their leadership in their Magazine of the Year markets and the volume of shared field, and won various awards in 2018. The victory of the information is increasing. These Lidové noviny ESPRIT supplement in the Magazine of CZECH PRESS PHOTO (2018) phenomena manifested themselves in 2018 category in the European Newspaper Awards may The award for MAFRA photographers 2018 across the whole media market be an example. In 2018, 182 titles from 25 countries joined in the category of Photo of the Month not only in the Czech Republic. the all-European competition, and the stylish ESPRIT magazine won this award for the fifth time.

48 MEDIA

The success of the media is based on ethics and experience

These are indispensable professions that remain hidden In the ever-accelerating environment to the general public, but without which the world of of the media world, the professional- media and e-commerce could not exist at all. In addition ism of the individuals dealing with to journalists, editors and photographers themselves, media content creation, processing, these are for example the printer masters, web develop- and distribution channels plays an ers, graphics and proof-readers. ever-increasing role. In recent years, the importance of adhering to ethical principles and valid legislation and the ability to quickly transmit credible information to viewers, listeners and readers has been growing in particular. To keep pace with the times, the AGROFERT Group's media segment invests annually in training employees and improving their professional skills. In selected professions, space is 6 9,5 also devoted to a responsible approach to employing Disabled employees million fellow citizens with disabilities, who have the opportu- (2018) Services and products nity to develop their talents at work. purchased from protected workshops (CZK, 2018) 2,8 106 7 14 million Employees on maternity Visits Trainees, interns Expenditure on training or parental leave (2018) and temporary workers (CZK, 2018) (2018) (2018)

49 AGROFERT CORPORATE SOCIAL RESPONSIBILITY REPORT 2018

A considerate approach in the media environment

These two areas are therefore the focus of individual At present, the electronic companies' efforts to reduce their consumption. This is % % communication tools are calling also related to the re-use of recyclable materials. 98 97,8 the tune in the media segment of the AGROFERT Group. They use MAFRA has also been involved in a number of charitable Share of waste handed Recycled materials share electricity as their main input source. activities. Their purpose was to help people in difficult over to recycling in manufacturing (2018)* procedures Of course, paper is another important life situations, to improve the lives of people with dis- (2018) output, especially for print media. abilities and to support special projects. The traditional auction of the legendary Pirelli calendar on iDNES.cz in cooperation with the AGROFERT Foundation is one example, which in 2018 raised CZK 111,111 for the Masaryk Memorial Cancer Institute in Brno. 6,9 1,8 Other companies, for example, focus on supporting million million social events that are close to the media world. Radio Proceeds from cooperation Total value of charity Impuls may serve as an example, which was a partner with third parties for advertising in price lists of the traditional Benátská Festival with Impulse 2018. charitable purposes (CZK, 2018) This festival was attended by more than 40,000 people (CZK, 2018)** in 2018.

* Only MAFRA media group included, the rest not included due to insignificance. ** Only MAFRA Media Grou

50 Thanks

Dear readers,

Finally, I would like to thank you at least in this way for the time you have found to study the Report on the Corporate Responsibility of the AGROFERT Group for 2018. The business of all of the more than 200 companies that make up the AGROFERT Group is fairly varied. You will meet our employees virtually in all areas of business throughout the Czech Republic. Therefore, I hope that in the Report you are reading right now, we have given you some insight into the activities that our individual companies in these business segments perform in the field of corporate social responsibility.

In the AGROFERT Group, we understand social responsibility as an integral part of the business strategy and above all as one of the ways to long-term success. We are fully aware that our activities influence the environment in which we all live together, and that we thus bear a share of responsibility for the state of the environment, the environment of our individual companies, and for living in the communities to which our businesses are immediately adjacent. Therefore, I would like to assure you that we will continue to actively take steps to ensure that the AGROFERT Group is also considered a good neighbour in the future.

If you would like to send us a proposal to improve the CSR activities of the AGROFERT Group or one of its companies, or if you have any other suggestion regarding the issue of social responsibility, please address an email to [email protected]. Thank you.

Yours faithfully,

JOSEF MRÁZ Executive Director and Deputy Chair of the Board of Directors of AGROFERT, a.s.

51 Chodov, 149 00 Praha 4 Praha 00 149 Chodov, 2327/2 Pyšelská AGROFERT, a.s.

E: [email protected] 272 192 272 F: +420 111 T: 192 272 +420 www.nadace-agrofert.cz www.famyfakta.cz www.agrofert.cz

22112019PT Photo: AGROFERT, a.s., pixabay.com