Regulation on Corporate Governance Data Issuers Must Submit to the Croatian Financial Services Supervisory Agency, and on Their Form, Deadlines, and Method of Submission

REGULATION ON CORPORATE GOVERNANCE DATA ISSUERS MUST SUBMIT TO THE CROATIAN FINANCIAL SERVICES SUPERVISORY AGENCY, AND ON THEIR FORM, DEADLINES, AND METHOD OF SUBMISSION (Official Gazette Nos. 59/2020 and 12/2023) Unofficial Consolidated Text

INTRODUCTORY PROVISIONS
General Provisions
Article 1.
This Regulation prescribes the corporate governance data that issuers with headquarters in the Republic of Croatia, whose securities are listed on a regulated market in the Republic of Croatia, must submit to the Croatian Financial Services Supervisory Agency (HANFA), as well as their form, deadlines, and method of submission to HANFA.

Definitions
Article 2.
Certain terms in this Regulation have the following meanings:

1. HANFA is the Croatian Financial Services Supervisory Agency.
2. The Act refers to the Capital Markets Act (Official Gazette Nos. 65/18, 17/20, 83/21, and 151/22).
3. Issuer refers to a securities issuer as defined in Article 455(1)(7) of the Act, with headquarters in the Republic of Croatia.
4. Securities refer to all types of transferable securities under Article 3(1)(96) of the Act, excluding money market instruments with a maturity of less than twelve months.
5. Data refers to the information that issuers are legally required to publish in accordance with the Act, regulations governing the establishment and organization of commercial companies, accounting standards for entrepreneurs, application of financial reporting standards, financial statement audits, and regulations governing corporate governance.
6. Code refers to the Corporate Governance Code adopted by HANFA and the Zagreb Stock Exchange.

Obliged Entities
Article 3.
This Regulation applies to issuers with headquarters in the Republic of Croatia whose securities are listed on a regulated market in the Republic of Croatia as of December 31 of the year for which data is submitted.

DATA AND THEIR FORM, DEADLINE, AND METHOD OF SUBMISSION Compliance Data for Share Issuers
Article 4.
(1) Issuers with shares listed on a regulated market in the Republic of Croatia and required to apply the Code must submit compliance data to HANFA covering the following areas: leadership, duties of management and supervisory board members, appointment of management and supervisory board members, the supervisory board and its committees, management, remuneration of management and supervisory board members, risks, internal control and audit, disclosure and transparency, shareholders and the general meeting, shares, and corporate social responsibility. (2) The set of prescribed data in paragraph 1 constitutes the compliance questionnaire for share issuers and is located in Annex I of this Regulation.

Management Practice Data for Share Issuers
Article 5.
(1) Issuers with shares listed on a regulated market in the Republic of Croatia must submit management practice data to HANFA covering the following areas: basic information, management, supervisory board, supervisory board committees, management and supervisory board meetings, structure of management and supervisory board, remuneration, options, general meeting, treasury shares, control and risks, investor relations, conflict of interest, dividends, and the Code. (2) The set of prescribed data in paragraph 1 constitutes the management practice questionnaire for share issuers and is located in Annex II of this Regulation.

Management Practice Data for Bond Issuers
Article 6.
(1) Issuers with bonds listed on a regulated market in the Republic of Croatia must submit management practice data to HANFA covering the following areas: basic information, management, supervisory board, supervisory board committees, management and supervisory board meetings, structure of management and supervisory board, remuneration, control and risks, investor relations, conflict of interest, and the Code. (2) The set of prescribed data in paragraph 1 constitutes the management practice questionnaire for bond issuers and is located in Annex III of this Regulation. (3) Bond issuers that are already required to submit data under Article 5 of this Regulation as share issuers are not required to submit the data specified in this article.

Deadline for Data Submission
Article 7.
Issuers must submit the data specified in Articles 4, 5, and 6 of this Regulation (questionnaires) for the preceding calendar year to HANFA no later than April 30 of the current calendar year.

Form of Data Submission
Article 8.
(1) Issuers must submit the data specified in Articles 4, 5, and 6 of this Regulation (questionnaires) to HANFA as XML format files.
(2) HANFA publishes the data submission templates for Articles 4, 5, and 6 (questionnaires) in XLS format on its website. Issuers may simultaneously use these XLS templates to create XML files, following the instruction for creating the XML scheme from the XLS file available on HANFA's website.

Method of Data Submission
Article 9.
(1) Issuers must submit the data specified in Articles 4, 5, and 6 of this Regulation (questionnaires) to HANFA's reporting system using the appropriate interface on HANFA's website (https://reports.hanfa.hr/), in accordance with HANFA's regulation governing the content, form, and method of submitting prescribed information to HANFA and the Official Register of Prescribed Information (SRPI), as well as the corresponding technical instruction published by HANFA on its website for obliged entities submitting prescribed information to SRPI and HANFA. (2) For submitting data from Articles 4, 5, and 6 to HANFA's reporting system (https://reports.hanfa.hr/), issuers use the authorizations granted to them for submitting data to SRPI.

TRANSITIONAL AND FINAL PROVISIONS
Repeal
Article 10.
Upon the entry into force of this Regulation, the Regulation on Data Issuers with Securities Listed on a Regulated Market in the Republic of Croatia Must Submit to the Croatian Financial Services Supervisory Agency, and on Their Form, Deadlines, and Method of Submission (Official Gazette No. 66/14) ceases to apply.

Entry into Force
Article 11.
This Regulation enters into force on the eighth day following its publication in the Official Gazette.

PROVISIONS OF THE REGULATION ON AMENDMENTS AND SUPPLEMENTS TO THE REGULATION ON CORPORATE GOVERNANCE DATA ISSUERS MUST SUBMIT TO THE CROATIAN FINANCIAL SERVICES SUPERVISORY AGENCY, AND ON THEIR FORM, DEADLINES, AND METHOD OF SUBMISSION (Official Gazette No. 12/2023, adopted January 25, 2023, entered into force February 9, 2023) remaining after unofficial consolidation TRANSITIONAL AND FINAL PROVISIONS
Article 6.
(1) Issuers must compile and submit the first data in accordance with Article 2 of this Regulation, which amends Article 7 of the Regulation on Data Issuers with Securities Listed on a Regulated Market in the Republic of Croatia Must Submit to the Croatian Financial Services Supervisory Agency, and on Their Form, Deadlines, and Method of Submission (Official Gazette No. 59/20), for the calendar year beginning on January 1, 2022. (2) This Regulation enters into force on the eighth day following its publication in the Official Gazette.

ANNEX I
LIST OF DATA FROM THE COMPLIANCE QUESTIONNAIRE FOR SHARE ISSUERS

1. Cooperation
1. The company's statute and/or other internal acts clearly define the powers of the supervisory board and management.
1. The company's statute and/or other internal acts are freely available on the company's website.
1.2. The supervisory board adopted a decision listing categories of decisions and legal transactions requiring prior supervisory board consent, and those about which management must consult the supervisory board before decision-making; their summary is freely available on the website.
1.2. The statute and/or internal acts provide for prior supervisory board consent for important decisions affecting strategy, expenditures, risk exposure, and reputation.
1.3. The statute and/or internal acts stipulate that the supervisory board and its committees have timely access to documents, premises, and staff when necessary for performing their duties.
1.4. The statute and/or internal acts stipulate that management must regularly report to the supervisory board on operational results, financial situation, significant financial and non-financial risks, and outcomes of interactions with shareholders and other stakeholders.
1.5. The statute and/or internal acts stipulate that the management chairman must immediately notify the supervisory board if an event occurs or is likely to occur that could significantly affect results, financial position, or reputation.

2. Code of Conduct
6. The supervisory board approved a code of conduct (or other internal act) establishing behavioral rules for management, supervisory board members, employees, and others acting on behalf of the company, including rules and measures for breaches.
6. The code of conduct (or other internal act) is freely available on the company's website.

3. Conflict of Interest
7. A prohibition on participation in decision-making applies to management and supervisory board members regarding matters in which they have a conflict of interest.
7. The supervisory board gave prior consent to the conflict of interest management policy.
7. The conflict of interest management policy is freely available on the company's website.
8. Supervisory board members are obliged to inform the entire supervisory board of existing or potential conflicts of interest.
8. Management members are obliged to inform the supervisory board chairman and other management members of existing or potential conflicts of interest.
8. The supervisory board maintains a register of all conflict of interest notifications.
9. A management or supervisory board member is obliged to inform the chairman and/or deputy chairman of their committee if they believe another member has an existing or potential conflict of interest.

4. Non-competition
10. Supervisory board and management members do not engage in activities competing with the company's business, are not management or supervisory board members of companies engaged in such activities, nor hold more than 5% shares in such companies.
10. Management and supervisory board members with shares in competing companies have notified the company secretary of all such shares, and details are freely available on the website.

5. Transactions with Related Parties
11. No transaction between management/supervisory board members and the company (or related persons) may be concluded without prior supervisory board consent.
11. The fair value of each material transaction must be confirmed by an independent expert before the transaction, and their report is freely available on the website.
12. The company adopted procedures for approving and disclosing transactions between management/supervisory board members and the company (or related persons).
12. The audit committee annually assesses the effectiveness of these procedures.

6. Role of Supervisory Board
13. The supervisory board is responsible for appointing and dismissing management members and providing recommendations to the general meeting for supervisory board candidates.
13. The supervisory board ensured formal and transparent procedures for appointments to management and the supervisory board.
14. The supervisory board set as a target the percentage of female members in the supervisory board and management to be achieved within five years, and adopted an implementation plan. The target percentage and plan are published in the annual report.
14. A progress report on the plan is published in the annual report.
15. The appointment committee has all tasks listed in Article 15 of the Code.

7. Selection of Supervisory Board Members at General Meeting
16. When proposing candidates to the general meeting, the company makes available in the materials all information listed in Article 16 of the Code.
16. Information specified in Article 16 of the Code is freely available on the website.
17. General meeting materials contain all information listed in Article 17 of the Code.
18. Information listed in Article 17 of the Code is freely available on the website, and also when a worker representative or other non-shareholder-elected supervisory board member is appointed.

8. Competence of Supervisory Board
19. The supervisory board has all tasks listed in Article 19 of the Code.

9. Composition
20. The supervisory board created a profile specifying the minimum number of members and the required combination of skills, knowledge, education, professional experience, and practical experience.
21. The supervisory board includes members of different genders, ages, profiles, and experiences to ensure diversity of perspectives in decision-making.
22. The majority of supervisory board members are independent according to the definition in Appendix A of the Code.
22. The chairman or deputy chairman of the supervisory board are independent.

10. Chairman
23. The supervisory board chairman has tasks specified in Article 23 of the Code.

11. Committees
24. The supervisory board established an appointment committee, a remuneration committee, and an audit committee.
24. The supervisory board determined the mandate and activities of each of its committees.
26. Each supervisory board committee consists of members with necessary skills, knowledge, education, and professional/practical experience for effective performance.
27. Each supervisory board committee has at least three members.
27. The majority of each supervisory board committee's members are independent (per Appendix A).
27. Management members are prohibited from serving on supervisory board committees.
28. The description of each committee's tasks is freely available on the website.
28. The company includes in its annual report a work report for each supervisory board committee, including information on the number of meetings held and committee members.

12. Time Commitment
29. The expected minimum time commitment for each supervisory board member is determined upon appointment.
29. The company's annual report publishes attendance records for each member at supervisory board and committee meetings.
30. The statute and/or internal acts stipulate that supervisory board members must notify the company secretary of their membership in other companies' supervisory boards or management.

13. Frequency and Manner of Meetings
31. Supervisory board meetings are held at least once every three months.
31. The supervisory board adopted a work plan including meeting schedules and agendas for future meetings.
31. Supervisory board committees meet as often as necessary for effective performance and regularly report to the supervisory board.
32. Supervisory board meetings may be held without management members present when the supervisory board deems it appropriate.
32. Non-committee members may participate in committee meetings only upon invitation.

14. Support
33. The company appointed a person to perform the duties of company secretary.
33. In accordance with statutes/internal acts, the company secretary is responsible for following supervisory board procedures, consulting on management issues, supporting the chairman, and assisting the supervisory board and its committees in functioning effectively.

15. Quality and Timeliness of Information
34. The description of supervisory board members' duties and/or internal acts stipulate that all materials needed for a meeting must be delivered to members at least one week before the meeting.
34. The description of committee duties and/or internal acts stipulate that all materials needed for a committee meeting must be delivered to members at least one week before the meeting.
35. The statute and/or internal acts stipulate that the minutes of a supervisory board meeting must be available to all members.
35. Meeting minutes contain voting results, including details of individual members' votes.
36. The supervisory board has the right to receive information or advice from external persons at the company's expense if deemed necessary for performing duties, with procedures specified in internal acts adopted by management with supervisory board consent.

16. Training and Development
37. All supervisory board members received introductory training upon appointment.
37. All supervisory board members undergo continuous training and education to improve skills and knowledge.
38. Supervisory board members regularly receive updates and summaries from management and experts on matters important to the company and their duties.

17. Evaluation of Supervisory Board
39. The supervisory board evaluated its effectiveness in the last 12 months.
39. The supervisory board evaluated individual performance of its members in the last 12 months.
39. The effectiveness evaluation was led by the chairman or deputy chairman.
40. The supervisory board evaluation included assessment of all circumstances listed in Article 40 of the Code.
41. The annual report includes a supervisory board and committee evaluation report assessing all circumstances listed in Article 41 of the Code.

18. Duties of Management
42. Management duties include all activities listed in Article 42 of the Code.
43. Management adopted, and supervisory board approved, management rules of procedure defining all activities in Article 43 of the Code.
44. In case of a group, management of the parent company is obliged to ensure effective supervision over other companies' activities.
44. The statute and/or internal acts contain rules governing responsibilities and reporting procedures at the level of the parent company and subsidiaries.

19. Composition
45. The supervisory board ensures management maintains a profile specifying the minimum number of members and required combination of skills, knowledge, education, professional/practical experience.

20. Chairman
46. Responsibility of the management chairman for all activities listed in Article 46 of the Code is prescribed.

21. Limitations on Other Appointments
47. Internal acts stipulate that management members must obtain prior supervisory board consent before accepting appointments to management or supervisory boards of companies outside the same group.
47. Internal acts stipulate that management members cannot hold more than two positions in the management or supervisory boards of such other companies.

22. Management Assessment
48. The supervisory board evaluated the effectiveness of cooperation arrangements with management, and adequacy of support/information received from management, in the last 12 months.
48. Evaluation results of cooperation arrangements are included in the annual report.
49. Management evaluated its own effectiveness and the effectiveness of individual members in the last 12 months.
49. Management reported to the supervisory board conclusions regarding its own effectiveness and individual members' effectiveness.

23. Role of Remuneration Committee
50. Duties of the remuneration committee include all activities listed in Article 50 of the Code.

24. Remuneration of Management
51. The supervisory board determines annual remuneration for each management member, based on remuneration committee recommendations and in line with the approved remuneration policy.
52. Management remuneration levels take into account the agreed strategy, risk appetite, economic environment, and employee wages/conditions.
53. The remuneration policy stipulates that a management member cannot dispose of shares allocated as remuneration for at least two years from the allocation date.
53. The remuneration policy stipulates that a management member cannot exercise share options allocated as remuneration for at least two years from the allocation date.
53. The remuneration policy includes provisions specifying circumstances under which part of a management member's remuneration may be withheld or clawed back.
54. Remuneration levels for the supervisory board chairman and other members reflect their time commitment and responsibilities, including those in supervisory board committees.
55. The remuneration policy and/or internal acts prohibit including variable or other performance-related elements in supervisory board remuneration.

25. Remuneration Reporting
56. The company's remuneration policy approved by shareholders at the general meeting.
56. The approved remuneration policy is freely available on the website.
57. The annual remuneration report includes data on each supervisory board member's remuneration and other information contained in Article 57 of the Code.

26. Role of Supervisory Board and Management
58. Management, with prior supervisory board consent, adopted a policy defining the nature and scope of risks the company must take and those it voluntarily takes.