Koncar Elektroindustrija d d : KONČAR d.d. - Code of Corporate Governance Questionnaire for 2023

COMPLIANCE QUESTIONAIRE FOR ISSUERS OF SHARES

All questions contained in this questionnaire relate to the period of one calendar year.

The Corporate Governance Code is intended for companies with two-tier governance structure considering that such a governance structure is most common in companies whose shares are listed on the Zagreb Stock Exchange. If the issuer has a one-tier structure, the questionnaire on management practices is answered in accordance with Appendix B of the Code of Corporate Governance

Companies respond to questions from the compliance questionnaire with YES, NO or Partially by selecting answers from a drop-down menu for each question. For questions where company has responded with YES column Explanation is not filled.

For questions where company has responded with NO or PARTIALLY in the column Explanation it should explain why this is so, that is:

• explain in which part it does not comply with the provisions of the Code and for what reason,
• describe the measures taken in the place of compliance with provisions of the Code in order to fulfill the objectives set out in the relevant principles of the Code
• if the company intends to comply with the provisions of the Code in the future, indicate when it will start to act accordingly.

Instructions for generating XML Schema from XLS files are published on Hanfa's website under Technical instructions and forms in section Transparency of the issuer.

Year	Institution
code
2023	501

Instructions:

• Year is entered without period (eg. 2019)
• Enter the year for which data are entered in the questionnaire

				ANSWER
				(Each question is	EXPLANATION
CHAPTER	PROVISION	ARTICLE	QUESTION	answered by chosing
(fulfill only for questions that were answered with "NO" or "PARTIALLY")
				the answer from the
				drop-down menu)
1	Cooperation	1	The articles of association and/or other internal acts clearly define the powers of the supervisory	YES
board and management board.
1	Cooperation	1	The articles of associationand/or other internal acts are available free of charge on the website of	YES
the company.
			The supervisory board has adopted a decision in which it stated categories of decisions and legal
1	Cooperation	2	transactions that require prior approval by the supervisory board and those decisions about which	YES
management board must consult with the supervisory board before making a decision, and a
			summary thereof is available free of charge on the website of the company.
			The articles of association and/or internal company acts provide for prior consent of the
1	Cooperation	2	supervisory board for making important decisions that affect the strategy of the company,	YES
			expenses, risk exposure and reputation.
			The articles of association and/or internal company acts stipulate that the supervisory board and
1	Cooperation	3	its committees have timely access to documents, premises and employees when necessary for	YES
			the performance of their duties.
			The articles of association and/or other internal company acts stipulate that the management
1	Cooperation	4	board must report to the supervisory board at regular intervals on the operating results of the	YES
company, financial situation, substantial financial and non-financial risks and results of interaction
			with shareholders and other stakeholders.
			Statutes and/or internal company documents stipulate that the president of the management
1	Cooperation	5	board shall immediately notify the supervisory board if there is or is likely for an event to arise that	YES
			has the potential to significantly affect the results, financial position or reputation of the company.
			The supervisory board approved the code of conduct (or other internal act), which establishes
1	Rules of conduct	6	rules of conduct to be followed by members of the management and supervisory board members,	YES
			employees and others acting on behalf of the company, which also contains rules and measures
			to be taken in case of its violations.
1	Rules of conduct	6	Code of Conduct (or other internal act) is available free of charge on the website of the company.	YES
2	Conflict of interest	7	For members of the management board and the supervisory board the prohibition of participation	YES
in decision-making in relation to which there are conflicts of interest is stipulated.
2	Conflict of interest	7	The supervisory board has given prior consent to the policy for managing conflicts of interest.	YES
2	Conflict of interest	7	The policy for managing conflicts of interest is available free of charge on the website of the	YES
company.
2	Conflict of interest	8	Members of the supervisory board are obliged to inform the entire supervisory board that they are	YES
in an actual or potential conflict of interest.
2	Conflict of interest	8	Management board members have a duty to inform the president of the supervisory board and	YES
other members of the management board of an actual or potential conflict of interest.
2	Conflict of interest	8	The supervisory board keeps records of all notices pertaining to conflict of interest.	YES
			Member of the management board or the supervisory board has an obligation to inform the
2	Conflict of interest	9	President and/or Vice-President of that board if it considers that another member of management	YES
			or supervisory board is in an actual or potential conflict of interest.
			Members of the supervisory board and management do not perform activities that compete with
2	Competition ban	10	the business of the company, are not members of the management or supervisory boards of the	YES
			companies that carry out such activities nor hold more than 5% stake in such companies.
			Members of the management board and the supervisory board who hold shares in the companies
2	Competition ban	10	with which the company is in the competition, informed the secretary of the company of all the	YES
shares in such companies and the details of these shares are available free of charge on the
			website of the company.
	Related party		No transactions between members of the management or supervisory board and the company (or
2	11	a person affiliated with any party) can not be concluded without the prior consent of the supervisory	YES
transactions
		board.
	Related party		The fair value of each material transaction must be confirmed by an independent expert prior to
2	11	any such transaction, and his or her report has to be available free of charge on the website of the	YES
transactions
		company.
	Related party		The company has adopted procedures for the approval and disclosure of transactions between
2	12	members of the management or supervisory board and the company (or a person affiliated with	YES
transactions
		any party).
2	Related party	12	The audit committee annually assesses the effectiveness of these procedures.	YES
transactions
	The role of the		The supervisory board is responsible for appointing and dismissing members of the management
3	13	board and making recommendations for candidates for members of the supervisory board to the	YES
supervisory board
		general meeting.
3	The role of the	13	The supervisory board has approved formal and transparent procedure for the appointment to	YES
supervisory board	both management and supervisory boards.
			The supervisory board has set as a target percentage of female members of the supervisory		The Supervisory Board has not formally set a target percentage of female members
3	The role of the	14	board and the management board, which must be achieved in the next five years and adopted a	NO	of the Supervisory Board and the Management Board, however, all international and
supervisory board	plan for the implementation of this goal. Percentage on target and plan were published in the	national standards on gender representation and equality are directly implemented.
			annual report.		Currently, women make up 22.2 percent of the Supervisory Board membership.
3	The role of the	14	A report explaining progress on the plan has been published in the annual report.	NO	In the annual report and the report on sustainable development and socially
supervisory board	responsible business, the company publishes a report on diversity policy.
	The role of the
3	nomination	15	The nomination committee has all the tasks listed in Article 15 of the Code.	YES
	committee
	Election of		When nominating candidates for the supervisory bord to the general meeting for election the
	supervisory board
3	16	company provides information within the general meetin materials on the items requested by	YES
members by the
		Article 16. of the Code.
	general meeting
	Election of
3	supervisory board	16	Informations provided by Article 16 of the Code are freely available on the company`s website.	YES
members by the
	general meeting
	Election of
3	supervisory board	17	Materials for the general meeting contain all the information listed in Article 17 of the Code.	NO	In the next elections, the materials for the GA will contain all the information from
members by the	Article 17 of the Code.
	general meeting
	Election of		The information referred to in Article 17 of the Code is available free of charge on the website of
	supervisory board			In the next elections, the information listed in Article 17 of the Code will be available
3	18	the company also in cases where workers' representative or another member of the supervisory	NO
members by the	on the Company's website
		board which is not elected by the shareholders at the general meeting is apointed.
	general meeting
	Responsibilities of		The terms od reference of the supervisory bord include all the responibilities set in Article 19. of the
4	the supervisory	19	YES
	board		Code.
			The supervisory board has developed a supervisory board profile which specifes the minimum
4	Composition	20	number of members and combination od skills, knowledge and education, as well as professionaln	YES
			and practical experience that required in the supervisory board.
4	Composition	21	The supervisory board includes members of different gender, age, profile and experience to	YES
ensure a diversity perspective when making decisions.
4	Composition	22	Majority of the members of the supervisory board are independent in accordance with the	YES
definition set out in Appendix A of the Code.
4	Composition	22	The President or deputy president of the supervisory board are independent.	YES
4	President	23	The president of the supervisory bord is responible for the activities listed in Article 23. of the	YES
Code.
4	Board committees	24	Supervisory board established the nomination committee.	YES
4	Board committees	24	Supervisory board established the renumeration committee.	YES
4	Board committees	24	Supervisory board established the audit committee.	YES
4	Board committees	24	The supervisory board stipulated the manadate and activities of each committee.	YES
			Each committee of the supervisory board consists of members who have the necessary skills,
4	Board committees	26	knowledge and education, as well as professional and practical experience to carry out the	YES
			committee responsibilities effectively.
4	Board committees	27	Each committee of the supervisory board has at least three members.	YES
4	Board committees	27	Majority of the members of each committee of the supervisory board are independent (as defined	YES
in Appendix A of the Code).
4	Board committees	27	Board members are prohibited to be members of the committee of the supervisory board.	YES
4	Board committees	28	The terms of reference of each committee is made freely available on the company's website	YES
4	Board committees	28	The Company's annual report includes a report on the work of each committee of the supervisory	YES
board as well as information on the number of meetings held and the members of the committee.
4	Time commitment	29	The minimun expected time commitmnet of each supervisory board member is specified on their	YES
appointment.

				ANSWER
				(Each question is	EXPLANATION
CHAPTER	PROVISION	ARTICLE	QUESTION	answered by chosing
(fulfill only for questions that were answered with "NO" or "PARTIALLY")
				the answer from the
				drop-down menu)
4	Time commitment	29	The annual report includes record of attendance at the meetings for each member of the	YES
supervisory board and its committees.
			The articles of association and/or internal company acts stipulate the obligation of the supervisory
4	Time commitment	30	board member to inform the secretary of the company about their membership in the supervisory	YES
			board or the management board of other companies.
4	Frequency and	31	The supervisory board meets at least every three months.	YES
format of meetings
4	Frequency and	31	The supervisory board has adopted a workplan that includes time and agenda of future meetings.	YES
format of meetings
4	Frequency and	31	Committees of the supervisory board shall meet as often as necessary for the effective discharge	YES
format of meetings	of their duties, and regularly report to the supervisory board on its activities.
4	Frequency and	32	The supervisory board can meet without the participation of the management board where it	YES
format of meetings	considers it appropriate.
4	Frequency and	32	Non-Board committee memebers can participate in committee meeting only at the invitation of the	YES
	format of meetings		committee.
4	Support	33	The company has designated an individual to carry out the duties of a company secretary.	YES
			According to the company's internal acts, the person carrying out the duties of a company
4	Support	33	secretary is responsible for ensuring that supervisory board procedures are complied with,	YES
advising the supervisory board on governance matters, supporting the president of the supervisory
			board and helping the supervisory board and committees to function efficiently.
	Quality and		The board terms of reference and/or internal acts require the materials for supervisory board		The Rules of Procedure of the Supervisory Board provide for the submission of
4	timeliness of	34	NO
meetings to be provided to all its members at least one week before the meeting.	materials for the session no later than 5 days before the session
	information
	Quality and		The bord committee terms of reference and/or internal acts require the materials for board
4	timeliness of	34	YES
committee meetings to be provided to all its members at least one week before the meeting.
	information
	Quality and		The articles of association and/or internal company acts anticipate that the minutes of the meeting
4	timeliness of	35	YES
	information		of the supervisory board must be available to all members of the supervisory board.
	Quality and		Supervisory Board meeting minutes provide data on voting results including details of how
4	timeliness of	35	YES
individual members voted.
	information
	Quality and		The supervisory board has the right to receive information and advice from people outside the
		company at the expense of the company if it considers it necessary to successfully carry out its
4	timeliness of	36	YES
duties, provided that the procedure for it is specified in the internal documents of the company
	information
		issued by the management board with the consent of the supervisory board.
4	Training and	37	All members of the supervisory board at the time of appointment received introduction training for	YES
development	their role.
4	Training and	37	All supervisory bord members receive ongoing training and education to improve their sills and	YES
development	knowledge.
4	Training and	38	The supervisory board members receive regular updates and briefings from the management	YES
development	board and experts on matters relevant to the company and to their duties.
4	Supervisory board	39	The supervisory board evaluated its effectiveness in the past 12 months.	YES
evaluation
					The President of the Supervisory Board conducted a self-assessment of the profile
4	Supervisory board	39	The supervisory board assessed the individual results of its members in the last 12 months.	PARTIALLY	and competencies of the Supervisory Board and determined that the Supervisory
evaluation	Board and its committees function well, have a balanced composition and the
					necessary expertise that is consistent with the Company's operations.
4	Supervisory board	39	The evaluation of the supervisory board was led by the president or deputy president.	YES
evaluation
4	Supervisory board	40	The evaluation of the supervisory board included an assessment of all the matters specified in	YES
evaluation	Article 40 of the Code
4	Supervisory board	41	The annual report includes the assessment report of the supervisory board and its committees in	YES
evaluation	which they assessed all the circumstances set out in Article 41 of the Code.
	Responsibilities of
5	the management	42	The duties of management board include all the activities listed in Article 42 of the Code.	YES
	bord
	Responsibilities of		The supervisory board has approved internal rules of procedure adopted by the management
5	the management	43	YES
board that define the matters specified in Article 43. of the Code.
	bord
	Responsibilities of		In the case of groups, the management board of the parent company is obliged to ensure effective
5	the management	44	YES
	bord		oversight over the activities of other companies in the group.
	Responsibilities of		The articles of association and/or internal company acts contain rules governing responsibilities
5	the management	44	YES
and reporting procedures at the level of the parent company and subsidiaries.
	bord
			The supervisory board ensures that management maintains a profile of the management board
5	Composition	45	which determines the minimum number of members and a combination of members who possess	YES
			the skills, knowledge and education, as well as professional and practical experience that are
			required for management board.
5	The president	46	The president of the management board is formally responsible for the activities listed in Article 46.	YES
			of the Code.
	Limits on other		Internal company documents provide that the members of the management board must obtain the
5	47	prior consent of the supervisory board before accepting appointment to the management board or	YES
appointments
		supervisory board which is not part of the same group.
5	Limits on other	47	Internal documents of the company provide that board members are prohibited from holding more	YES
	appointments		than two positions in the management or supervisory board of other such companies.
			The supervisory board in the last 12 months, evaluated the effectiveness of arrangements for
5	Board evaluation	48	cooperation between the supervisory board and the management board, as well as the adequacy	YES
			of support and information received from the management board.
5	Board evaluation	48	Results of the evaluation of arrangements for cooperation between the supervisory board and	YES
management are included in the annual report.
5	Board evaluation	49	The management board has evaluated its own effectiveness and that of its individual members in	YES
the last 12 months.
5	Board evaluation	49	The management board has reported the conclusions of the evaluations of its members to the	YES
supervisory board.
	Role of
6	remuneration	50	The duties of the remuneration board include all the activities listed in Article 50 of the Code.	YES
	committee
	Remuneration of		The supervisory board determines the annual remuneration of of each member of the
6	management board	51	management board, based on recommendations of the remuneration committee and in	YES
	members		accordance with the approved remuneration policy.
	Remuneration of		The level of receipts of members of the management board takes into account the agreed
6	management board	52	strategy, risk appetite, the economic environment in which the company operates as well as	YES
	members		wages and conditions of workers within companies.
	Remuneration of		Remuneration policy provides that a management board member may not dispose of the shares
6	management board	53	assigned to it as part of the remuneration at least two years from the date on which the shares	YES
	members		were assigned to him or her.
	Remuneration of		Remuneration policy provides that a management board member may not make use of stock		The remuneration policy does not provide for stock options as part of the
6	management board	53	options assigned to him or her as part of the remuneration for at least two years from the date on	NO
remuneration of members of the Management Board.
	members		which stock options were assigned to him or her.
	Remuneration of		Remuneration policy includes provisions that closely define the circumstances in which a portion of		The remuneration policy stipulates that the Company has no delay or period for
6	management board	53	NO	which the payment of part of the receipts is postponed and the Company has no
	members		the remuneration of management board member was put on hold or to was asked to be returned.		right to demand the return of variable parts of receipts.
	Remuneration of		Remuneration level for the president of the supervisory board and of other members of the
6	supervisory board	54	supervisory board reflects the time commitment and responsibilities, including the time	YES
	members		commitment and responsibilities in the committees of the supervisory board.
	Remuneration of		Remuneration policy and/or internal company documents prohibit the inclusion of variable
6	supervisory board	55	YES
elements or other elements related to performance in the remuneration of the supervisory board.
	members
6	Reporting on	56	Remuneration policy of the company was approved by shareholders at a general meeting.	YES
remuneration
6	Reporting on	56	The company has made freely available on its website its remuneration policy, as approved by the	YES
	remuneration		shareholders.
6	Reporting on	57	Annual report on remuneration includes data on remuneration of each individual member of the	YES
remuneration	supervisory board as well as other information contained in Article 57 of the Code.

				ANSWER
				(Each question is	EXPLANATION
CHAPTER	PROVISION	ARTICLE	QUESTION	answered by chosing
(fulfill only for questions that were answered with "NO" or "PARTIALLY")
				the answer from the
				drop-down menu)
	Roles of the		Management board, with the prior approval of the supervisory board, adopted a policy that
	supervisory and
7	58	determines the nature and extent of risk that company needs and that is willing to take in order to	YES
management
		achieve all the long-term strategic objectives ( "risk appetite").
	boards
	Roles of the
7	supervisory and	59	The management board is formally responsible for the activities listed in Article 59 of the Code.	YES
management
	boards
7	Role of the audit	60	Terms of reference of the audit committee includes all activities listed in Article 60 of the Code.	YES
committee
7	Role of the audit	61	The audit committee, the supervisory board or one of its committees, undertook the activities	YES
committee	referred to in Article 61 of the Code.
	Relations with the		The audit committee oversees the process of selection and appointment of external auditors in
7	62	accordance with the legal requirements and makes recommendations to the supervisory board for	YES
external auditor
		the selection of the external auditor and conditions for their appointment.
7	Relations with the	63	The audit committee in the last 12 months approved the work plan of the external auditors, which	YES
external auditor	includes the scope and content of the activities to be audited.
7	Relations with the	63	The audit committee shall meet as necessary with the external auditors to discuss the issues that	YES
external auditor	have been identified during the audit and to oversee the quality of services provided.
7	Relations with the	64	The audit committee if responsible for monitoring the independence and objective of external	YES
external auditor	auditor.
7	Relations with the	64	The audit committee approved a policy on permitted non-audit services provided by the external	YES
external auditor	auditor.
7	Risk management	65	The audit committee evaluated the effectiveness of risk management and internal control system	YES
and internal control	as a whole at least once a year.
7	Risk management	65	The audit committee, where appropriate, makes recommendations to the supervisory board and	YES
and internal control	management board regarding the effectiveness of risk management and internal control systems.
7	Risk management	66	The company maintains an effective risk management system that provides reliable identification	YES
and internal control	of risk measurement, answers, reporting and supervision.
	Risk management		The company has determined clear internal responsibilities for the maintenance of the risk
7	66	management system and a clear procedure for maintaining contact between persons responsible	YES
and internal control
		and the audit committee.
7	Risk management	67	The company has established an internal audit function responsible for monitoring the	YES
and internal control	effectiveness of internal control systems, including risk management.
7	Risk management	67	The audit committee approved the internal audit plan in the last 12 months.	YES
and internal control
7	Risk management	67	The audit committee receives reports of internal auditors and monitors the implementation of its	YES
and internal control	recommendations.
7	Risk management	68	The audit committee shall recommend to the supervisory board the appointment or dismissal of	YES
and internal control	the heads of the internal audit function.
7	Risk management	68	If the company des not have internal audit function, the audit committee has once in the last 12	NO	There is internal audit function.
and internal control	months evaluated the need for this function as part of its assessment of internal control systems.
			Management board, with the prior approval of the supervisory board, adopted a procedure for
7	Whistle-blowing	68	reporting violations of laws or internal rules of the company, actual or in the case of suspected	YES
			violation.
7	Whistle-blowing	69	The procedure ensures that workers and external stakeholders do not suffer negative	YES
consequences if they report suspicious behavior.
7	Whistle-blowing	69	Details of the procedure for registration are available free of charge on the website of the	YES
company.
			Statute and/or internal company documents stipulate the duty of the management board to inform
7	Whistle-blowing	70	the supervisory board of any irregularities and and to agree on measures that must be	YES
			implemented.
7	Whistle-blowing	70	The audit committee evaluated the effectiveness of the procedure and its application in the last 12	YES
			months.
	Use of the company		All information that the company is required to disclose in accordance with the law, rules on the
8	71	listing, the Code and its own Articles of Association are available free of charge on the website of	YES
website
		the company.
8	Use of the company	72	The company makes freely available and easily accessible on the website all the information	YES
website	requested by Article 72 of the Code.
8	Use of the company	73	The company ensures that the information on the website is kept up to date and published in	YES
website	accordance with time limits prescribed in law and regulations.
8	Use of the company	73	All data on the website are freely available in both Croatian and English.	YES
website
8	Annual report	74	The annual report contains all the information referred to in Article 74 of the Code.	YES
	Relations with		The Company ensured that all shareholders, regardless of the number or type of shares they hold,
9	75	have equal access to information about the company and about the way they can carry and	YES
shareholders
		protect their rights.
			The Company has established an effective formal mechanisms to ensure minority shareholders		The Company provides minority shareholders with the opportunity to ask questions
9	Relations with	76	the possibility of asking questions directly to president of the management board and president of	PARTIALLY	directly to the President of the Management Board and the Supervisory Board at the
shareholders	the supervisory board, and the details of the functioning of these mechanisms are available free of	General Meeting of the Company. The Company has established mechanisms for
			charge on the website of the company.		asking shareholder questions via e-mail address ([e-mail])
	Relations with		The Company has selected a person that will for all shareholders be the person to contact in
9	77	relations with investors, and contact of this person is available free of charge on the website of the	PARTIALLY	On the company's website, an e-mail address: [e-mail]
shareholders
		company.
9	General meeting	78	The articles of associationand/or internal rules of the company do not in any way limit the ability of	YES
shareholders to call a general meeting, to participate in it or to add items to the agenda.
9	General meeting	79	The articles of association and/or internal company documents allow shareholders the opportunity	YES
to exercise their right to vote by proxy without restriction.
9	General meeting	79	The articles of associationand/or internal company documents allow shareholders the opportunity	NO	The arrival of shareholders or assignee to the assembly is mandatory.
to exercise their right to vote electronically without restrictions.
9	General meeting	79	Explanation of other ways in which shareholders can exercise its right to vote are set out in the	YES
documents for the general meeting.
9	General meeting	80	Notice of the general meeting is published no later than 30 days before it is held.	YES
9	General meeting	80	The agenda, decisions and all other materials required for the general meeting are available free	YES
of charge on the website of the company.
9	General meeting	80	All documents are available in English and Croatian language.	YES
9	General meeting	81	All persons referred to in Article 81 of the Code were present at the general meeting in the past 12	YES
			months.
9	General meeting	81	The external auditor was present at the general meeting where financial statements are presented.	YES
9	General meeting	82	The company has made the desicions of a general meeting freely available on its website without	YES
delay.
9	General meeting	82	Within 30 days from the date of the general meeting the company has made available on its	YES
website free of charge answers to questions raised at the general meeting.
10	Corporate social	83	The supervisory and managent boards have agreed and adopted policies listed in Article 83 of the	YES
	responsibility		Code.
10	Corporate social	83	These policies are available free of charge on the company's website.	YES
responsibility
			When the management board asks prior consent from the supervisory board for the decisions,
	Corporate social		accompanying documents explain how the recommended measure is in line with the policies
10	84	associated with the impact assesment of company's activities on the environment and the	YES
responsibility
		community, with the policies associated with the preservation of human rights and workers' rights
			and the measures associated with prevention and sanctioning of corruption and bribery.
10	Stakeholder	85	The supervisory board and management board jointly identified which are considered key	YES
engagement	stakeholders in relation to company.
	Stakeholder		Management board has ensured the existence of effective mechanisms for regular interaction with
10	85	key stakeholders, as well as to inform the supervisory board about the results of these	YES
engagement
		communications.
10	Stakeholder	86	The supervisory board is authorized, subject to prior notification to the president of the	YES
engagement	management board, to organize meetings with external stakeholders when it deems it necessary.

				ANSWER
				(Each question is	EXPLANATION
CHAPTER	PROVISION	ARTICLE	QUESTION	answered by chosing
(fulfill only for questions that were answered with "NO" or "PARTIALLY")
				the answer from the
				drop-down menu)
					Communication of the Chairman of the Board and members of the Board with
			In the mandate of every committee of the supervisory board it is provided for what purpose		stakeholders (suppliers, customers, etc.) is not provided for in the Rules of
	Stakeholder			Procedure, and the purpose of the Board is to make recommendations and
10	87	president of the committe may communicate directly with stakeholders and what procedure to	PARTIALLY
engagement	proposals to the Supervisory Board. The exception to the above is the Audit
		follow.
				Committee, which communicates directly with external and internal auditors (Article
					87 of the Code).