2019 Transparency Report Deloitte d.o.o. Date published 30 April 2020 Updated 20 October 2020 00 2019 Transparency Report | Contents Contents Contents 1 Deloitte leadership message 2 Deloitte network 4 What Deloitte Audit & Assurance brings to capital markets 7 External and internal audit quality monitoring 12 Independence, ethics, and additional disclosures 15 Appendices Error! Bookmark not defined. Appendix A | EU EEA audit firms 20 Appendix B | Financial information 22 Appendix C | Public interest entities 23 01 2019 Transparency Report | Deloitte d.o.o. leadership message 1 Deloitte d.o.o. leadership message This report sets out the practices and processes that are currently employed by Deloitte d.o.o., in accordance with the requirements of the Audit Act (Official Gazzete 127/2017) and the European Union’s Regulation 537/2014 on specific requirements regarding statutory audit of public-interest entities. All information provided in this report relates to the situation of Deloitte Croatia on 31 December 2019, except if indicated otherwise. We are witnesses to the conduct of business activities, including the procedures for auditing financial statements and related services at times that are out of the ordinary, but we also remain responsible for meeting our professional obligations to the community, our employees and our clients. As the effects of the coronavirus epidemic become more apparent, Deloitte emphasizes a key responsibility to the capital markets, which is to carry out top quality audits. In today's environment, investors and stakeholders are seeking an impartial opinion on the financial statements of companies more than ever before. The main priority of Deloitte's leadership is the safety and well-being of Deloitte's professionals, as well as the quality of the professional practices performed, which is why major areas of action have been established that are coordinated both globally and locally. Deloitte's leadership focuses on frequent and transparent communication with its customers and employees, and the COVID-19 virus epidemic is a dynamic and rapidly evolving situation. It will no doubt affect Deloitte's worldwide audits. Nevetheless, Deloitte is committed to the consistent execution of high- quality audits, professional excellence and serving the clients with distinction. We recognize the need for us to truly reflect on our public interest role and to acknowledge that there is a great opportunity to further engage with the stakeholders to bring steps that will benefit public interest. As we aspire to the highest standards of audit quality, we are focused on making audits more responsive to rapidly changing market conditions, evolving investor demands, and changing regulatory requirements. We are enhancing our learning and development programs to build the skills and capabilities required of the next-generation auditor in a digitally driven future. We are confident that our ongoing digital transformation, along with the investments we continue to make in our audit processes, policies, and quality controls, are resulting in enhancements to our audit quality that will serve the interests of the investing public and the companies we audit. The firm and the profession as a whole made substantial investments in audit quality. We will continue to evolve and deliver audits of the highest quality and to provide confidence and transparency to all our stakeholders. We publish this report each year to provide disclosure that is responsive to certain categories of information identified in Croatia and the European Union standards directed at corporate governance and 1 Throughout this report, the terms “Deloitte, we, us, and our” refer to one or more of one or more of Deloitte Touche Tohmatsu Limited, its network of member firms, and their related entities. For more information about the Deloitte network, please see p. 3 or https://www2.deloitte.com/global/en/pages/about-deloitte/articles/about-deloitte.html. 2 2019 Transparency Report | Deloitte d.o.o. leadership message transparency. We commit to you that Deloitte will continue to collaborate with regulators and others on issues affecting financial reporting and the audit profession. Within this report, we share more about our commitment to, and continued investments in audit quality. ______________________________ Marina Tonžetić Partner and authorized representative Deloitte d.o.o. 3 2019 Transparency Report | Deloitte network Deloitte network Deloitte Croatia: legal structure and organised under the umbrella of Deloitte Central ownership Europe Holdings Limited. Services are provided by Deloitte d.o.o. is connected to the Deloitte network the subsidiaries and affiliates of, and firms through Deloitte Central Europe Holdings Limited, a associated with Deloitte Central Europe Holdings member firm of Deloitte Touche Tohmatsu Limited. Limited, which are separate and independent legal Deloitte Central Europe, together with Deloitte entities. France, Deloitte Germany, Deloitte Luxembourg and Deloitte Austria is a shareholder in Deloitte DCE Deloitte Croatia operates as a limited liability GmbH (“DCE”), which is as well a member firm of company, established under Croatian law, with Deloitte Touche Tohmatsu Limited. The object of registered office at Radnička 80, Zagreb and DCE is the fostering of the collaboration among its registration number 030022053. shareholders as members of the global Deloitte network. DCE neither provides any professional The share capital of the Company amounts to HRK services nor engages in commercial activities. 44,900.00. Details regarding the ownership Deloitte d.o.o. is referred to throughout this report structure of the Company are available at as “Deloitte Croatia”, and Deloitte Central Europe https://sudreg.pravosudje.hr/registar. Holdings Limited is referred to throughout this report as “Deloitte Central Europe”. Deloitte Central Europe is a regional organisation of entities Network description The Deloitte network The Deloitte network is a globally connected network of member firms and their related entities operating in more than 150 countries and territories across the world. These separate and independent member firms operate under a common brand. Systems of quality Shared values control & risk management Professional Methodologies standards Deloitte Touche Tohmatsu Limited (DTTL or Deloitte Global) Deloitte Touche Tohmatsu Limited is a UK private company limited by guarantee. DTTL serves a coordinating role for its member firms and their related entities by requiring adherence to policies and protocols with the objective of promoting a consistently high level of quality, professional conduct and service across the Deloitte network. DTTL does not provide professional services to clients, or direct, manage, control or own any interest in any member firm or any member firm’s related entities. For more information about the Deloitte network, please see: About Deloitte. 4 2019 Transparency Report | Deloitte network Deloitte Croatia: governance – leadership in In all of their activities, Deloitte Croatia senior action leaders are responsible for the overarching Deloitte Croatia is represented by the management. objective of audit quality, including compliance with In compliance with Deloitte Croatia’s Articles of applicable professional standards and regulatory Association the management is composed of one or requirements. Deloitte Croatia strategy is more members. The management currently has five developed in alignment with the overall strategic members. All members are directors with right to direction established for the Deloitte network. represent Deloitte Croatia solely and without limitations. Details of registered directors of Deloitte Croatia are available at https://sudreg.pravosudje.hr/registar The following are the members of Deloitte Croatia management: Deloitte Croatia– Management Marina Tonžetić, Director Dražen Nimčević, Director 5 Our purpose and commitment: instilling trust and confidence At Deloitte Croatia, our purpose is to make an impact that matters. For Audit & Assurance, this means a focus on delivering independent high quality audits and instilling confidence and trust in the capital markets through our reports. This requires us to continuously build capabilities to support the delivery of high quality audits and make leading contributions to shaping the future of the audit profession. 6 What Deloitte Audit & Assurance brings to capital markets Audit engagement acceptance and Audit & Assurance Transformation continuance Being a relevant profession of the future and a Deloitte Croatia has detailed policies and sustainable practice that evolves with the pace procedures in place for accepting prospective clients of change in technology and society is critical. and engagements and assessing engagement risk. Driving this goal is the Deloitte Audit & These policies and procedures are designed with Assurance Transformation initiative, which is the objective that Deloitte Croatia only accepts currently being developed and deployed by engagements where it: Deloitte Croatia. Is able to perform the engagement and has the Audit & Assurance Transformation is an capabilities, including time and resources, to do important shift across the network in the way so. Deloitte professionals work and includes: Can comply with all relevant ethical requirements and professional standards, including independence and conflicts of interest The Deloitte Way: assessments and considerations. standardization of Considered the integrity