PODRAVKA GROUP ANNUAL REPORT FOR 2020 CONTENTS INTRODUCTORY WORD .......................................................................................................................................................7 PODRAVKA GROUP PROFILE ........................................................................................................................................... 9 COMPANY NAME AND HEADQUARTER LOCATION .........................................................................................................................9 ORGANIZATIONAL STRUCTURE........................................................................................................................................................................9 ABOUT BRANDS AND PRODUCTS .................................................................................................................................................................12 PODRAVKA .........................................................................................................................................................................................................................13 ŽITO AND LAGRIS .........................................................................................................................................................................................................16 BELUPO .................................................................................................................................................................................................................................17 LOCATION OF BUSINESS ACTIVITIES .........................................................................................................................................................19 MARKETS IN WHICH THE COMPANY OPERATES ..........................................................................................................................20 OWNERSHIP AND LEGAL FORM .................................................................................................................................................................... 22 SUPPLY CHAIN ............................................................................................................................................................................................................... 23 PRECAUTIONARY APPROACH ..........................................................................................................................................................................24 EXTERNAL INITIATIVES OF THE PODRAVKA GROUP ................................................................................................................. 26 CORPORATE GOVERNANCE ...........................................................................................................................................27 GENERAL ASSEMBLY .............................................................................................................................................................................................. 28 SUPERVISORY BOARD ........................................................................................................................................................................................... 29 REPORT ON THE WORK OF THE SUPERVISORY BOARD OF PODRAVKA INC. AND ITS COMMITTEES IN 2020.................................................................................................................. 32 BIOGRAPHIES OF THE MEMBERS OF THE SUPERVISORY BOARD ...............................................................................34 MANAGEMENT BOARD ..........................................................................................................................................................................................40 BIOGRAPHIES OF THE MEMBERS OF THE MANAGEMENT BOARD ................................................................................41 EXPECTED DEVELOPMENT ............................................................................................................................................46 ACHIEVING GROWTH ...............................................................................................................................................................................................47 GENERAL STRATEGIC GOALS .........................................................................................................................................................................47 KEY FACTORS OF SUCCESS ............................................................................................................................................................................48 RISK ...........................................................................................................................................................................................................................................51 MANAGEMENT SYSTEMS .................................................................................................................................................................................... 55 NON – FINANCIAL REPORT ..............................................................................................................................................57 BUSINESS MODEL AND CREATING VALUE ..............................................................................................................58 BUSINESS MODEL .....................................................................................................................................................................................................58 CREATING VALUE ....................................................................................................................................................................................................... 59 CONNECTION BETWEEN VALUE CREATION AND IMPACT ON NON – FINANCIAL / SOCIALLY RESPONSIBLE BUSINESS ......................................................................................................60 IMPACT OF THE PANDEMIC CAUSED BY THE COVID – 19 DISEASE ON BUSINESS ACTIVITIES ....... 61 THE IMPACT OF THE PANDEMIC AND THE COMPANY’S RESPONSE ............................................................................61 THE IMPACT OF THE PANDEMIC ON BUSINESS MODEL CHANGES ............................................................................ 62 PODRAVKA .......................................................................................................................................................................................................................63 ŽITO .........................................................................................................................................................................................................................................66 LAGRIS .................................................................................................................................................................................................................................66 BELUPO ................................................................................................................................................................................................................................67 SIGNIFICANT PROMOTIONAL ACTIVITIES ................................................................................................................71 PODRAVKA .........................................................................................................................................................................................................................71 EXHIBITION "VEGETA 60 – A LITTLE PACKAGE FULL OF HISTORY" ................................................................................71 PODRAVKA AWARDED THE BEST SHORT FILM OF THE 26TH SARAJEVO FILM FESTIVAL ........................72 PODRAVKA FOR THE FOURTH YEAR IN A ROW AT GULFOOD IN DUBAI ...................................................................72 PODRAVKA INC. WAS GRANTED MORE THAN THREE MILLION HRK FOR THE EU CO – FUNDED RESEARCH AND DEVELOPMENT PROJECT "DEVELOPMENT OF INNOVATIVE PRODUCTS FROM SIDE – PRODUCTS DURING THE PROCESSING OF VEGETABLES". ................................................................72 "PROJECT SLICE" – A LARGE INVESTMENT AT PRODUCTION, DANICA ......................................................................75 THE CZECH TEAM PATENTED A METHOD AND A DEVICE FOR DETECTING THE PRESENCE OF INSECTS WHEN RECEIVING BATCHES OF GRAIN AS RAW MATERIAL .....................75 PODRAVKA'S NATIONAL RESTAURANT AT THE GREEN WEEK 2020 FAIR IN BERLIN ....................................76 PODRAVKA AT THE DAYS OF CROATIAN TOURISM IN RUSSIA ..........................................................................................76 PODRAVKA REPRESENTED AT THE LARGEST CHINESE FAIR OF IMPORTED PRODUCTS ......................76 NEW PODRAVKA BRAND AMBASSADORS ...........................................................................................................................................77 PODRAVKA, TRADITIONALLY FAITHFUL PROMOTER OF FILM CULTURE IN B&H AND SPONSOR OF THE "BEST SHORT" AWARD OF THE MEDITERRANEAN FILM FESTIVAL ..............................77 RENOVATION OF PODRAVKA'S RECREATION CENTRE ............................................................................................................77