2.1 CORPORATE GOVERNANCE REPORT OF THE

POŠTA SLOVENIJE GROUP

2.1.1 Governance of the Pošta Slovenije Group

Pošta Slovenije

In accordance with the Companies Act (ZGD-1I), Pošta Slovenije is governed by its founder, the Republic of Slovenia (hereinafter: the RS), which exercises its founder’s rights via Slovenski državni holding d. d. (hereinafter: SDH). The Company’s decision-making bodies are its Supervisory Board and Executive Management.

In accordance with Pošta Slovenije’s Articles of Association (hereinafter: the Articles of Association), the Supervisory Board comprises six members, four of whom are appointed by the founder, and two of whom are elected by Pošta Slovenije’s works council. Members of the Supervisory Board are elected for a term of four years, and may be re-elected. The Chairman and Deputy Chairman of the Supervisory Board are elected from the Supervisory Board’s members, who are appointed by the founder.

The competences of the Supervisory Board are set out in Article 15 of the Articles of Association. The Supervisory Board adopts decisions at regular and correspondence meetings. The Supervisory Board’s work method is set out in the relevant rules of procedure. The Supervisory Board has appointed audit and human resources committees.

The Supervisory Board comprised the following members in 2020:

Matjaž Šifkovič, Chairman,

Dejan Kastelic, Deputy Chairman,

Matjaž Fortič, and

Zdravko Selič;

and employee representatives:

Božidar Pograjc, and

Aleš Arnejčič, both until 12 January 2020;

from 13 January 2020 as employee representatives:

Dijana Kos and

Saša Gržinić.

Matjaž Šifkovič

Mr Šifkovič was born in Kranj in 1967. He holds a master’s degree in business.

He has been employed at Petrol d. d., Ljubljana since 1988. The first years he worked in the Ljubljana–Kranj Retail Regional Unit. After 1998, he worked as a controller-financial auditor, employed in the trade and retail sector at Petrol d. d., Ljubljana’s headquarters. He has also worked on the markets of Southeast Europe at subsidiaries in Croatia, Bosnia and Herzegovina, Serbia and Kosovo. After 2009 he served as Director of the Maribor-Murska Sobota and Ljubljana-Kranj Retail Regional unit. He has been the Director of Retail Sales for all of Slovenia since 2015. He carries out the following tasks on a daily basis in his position as Director of Point of Sale Organisation and Management: the drafting of strategic guidelines for the continued development of Petrol’s retail network, the optimisation of business processes with a focus on employees and customers, the drafting of high-quality work processes for employees taking into account the principles of simplicity and efficiency, the implementation of project activities and the implementation of digital solutions at points of sale with the aim of introducing new methods of cooperation with the customer in the purchase process, the introduction of new methods for delivering value to the customer, the development and administration of models for managing points of sale, and the transfer of best practices to the markets of Southeast Europe.

Mr Šifkovič began his term of office as a member of Pošta Slovenije d. o. o.’s Supervisory Board in November 2018, and assumed the functions of Chairman of the Supervisory Board and chair of the latter’s human resources committee.

Dejan Kastelic

Mr Kastelic was born in Celje in 1977, and earned a bachelor’s degree in electrical engineering. He began his business career as a system administrator at Amis, the first alternative provider of broadband services, and became technical director of the group in 2004, a function he held until 2009. Over the next three years, he accumulated management knowledge at the global giant IBM, where in his first year he managed integration services for the Slovenian market. During the next two years, he served as head of technical personnel for Central Europe, the Middle East and Africa. In 2012 his business career led him back to the telecommunications sector. He joined the Telekom Austria Group, which today operates under the A1 brand, and for the next five years, until the beginning of 2017, he served as Chief Technology Innovation Officer (CTIO) for Serbia, Slovenia and Bulgaria. In 2017 he joined the Ooredoo Group from Qatar, which sent him to Indonesia, as Chief Technology Innovation Officer (CTIO) for its largest branch, Indosat Ooredoo Tbk. In 2020 he joined the Vodacom Group in South Africa as the group’s Chief Technology Innovation Officer (CTIO). He is also a member of the Supervisory Board of the subsidiaries in Lesotho, Tanzania and Mozambique. In addition to in-depth knowledge and international experience in the areas of technology, IT services, the digitalisation of operations and finance, he has a strong sense for working with people. Mr Kastelic is known in the business world as an agent for change and a solver of problems using agile approaches, with a strong desire for continuous improvement and innovation, and the ability to formulate self-sufficient management teams.

Mr Kastelic began his term of office as a member of Pošta Slovenije d. o. o.’s Supervisory Board in November 2018, and assumed the function of Deputy Chairman of the Supervisory Board. He has been a member of the audit committee of Pošta Slovenije d. o. o.’s Supervisory Board since 12 February 2020.

Matjaž Fortič

Mr Fortič was born in Ljubljana in 1959. He holds a bachelor’s degree in electrical engineering. He began his career in 1984 as a system analyst at Iskra Avtomatika. In 1989 he co-established the company, Xenon forte, which provided information services. He continued his career in Austria in 1991 at Artaker GmbH in Vienna (information and printing solutions), where he was the regional sales manager for the Balkans and served as director of Artaker’s branch office in Slovenia. He returned to Slovenia in 1996 and served as the director of sales and marketing at Iskra Vega. From 2000 to 2004 Mr Fortič served in management positions in the area of IT at RCL and DISS. He served as director of Iskrateling (a member of the Iskratel Group) from 2005 to 2009. After that, he worked on various projects through his own consultancy company, Forta. From 2013 to 2015, Mr Fortič served as the director of Avto Šerbinek in Maribor. In 2015 he returned to Xenon forte, where he assumed the function of executive director, Mr Fortič served as member and Chairman of the Supervisory Board of Datalab d. d. He was awarded certification by the Slovenian Directors’ Association in 2017. He is an expert in the digitalisation of operations, information support, and the management and optimisation of processes and documents. He also has a great deal of experience and references as the head of sales and in the management of relations with partners and customers. He began his term of office as a member of Pošta Slovenije d. o. o.’s Supervisory Board in November 2018, and assumed the function of chair of that body’s audit committee. He is a member of the Slovenian Directors’ Association.

Zdravko Selič

Mr Selič was born in Ljubljana on 25 December 1956 and holds a bachelor’s degree in economics. He began his career at Slovenijales zunanja trgovina, where he was responsible for exports of furniture to the US. He has been employed at Tehnoimpex since 1992 as the head of exports of industrial metal products. Since 2004 Mr Selič has been the director of Tehno Mobil d. o. o., which operates in the mobile telecommunications sector. From November 2019 to November 2020, he performed tasks as president of the Management Board of Delo Prodaja d. d. During his career, he also served as a member of the Supervisory Board of Slovenska odškodninska družba. He has been a member of Pošta Slovenije d. o. o.’s Supervisory Board since 8 November 2018, as well as a member of the aforementioned body’s audit and human resource committees.

Božidar Pograjc

Mr Pograjc was born in 1970 in Zagorje ob Savi. He was employed by PTT following the completion of secondary economic school. After the transformation of PTT in 1995, he continued his work in the same position as postman at the newly established Pošta Slovenije d. o. o., where he is still employed today. He first served as the president of the Trbovlje BU’s trade union, and has always been a passionate advocate of workers’ rights. Currently, he is a member of Pošta Slovenije d. o. o.’s works council, where he commenced his fifth term on 12 January 2020. He also headed the works council as its chair for two of these terms. He was a Pošta Slovenije d.o.o. supervisor for three terms of office, Mr Pograjc is in the process of completing his higher education degree.

Aleš Arnejčič

Mr Arnejčič was born in 1970 in Gorišnica. After graduating from the secondary school of economics in 1991, he began his professional career at PTT as a postman. Following the transformation of the aforementioned company in 1995, he continued his career at the newly established Pošta Slovenije d. o. o., initially as a postman and then as a postal counter worker. He is currently a labour organiser at the Ptuj post office. He was first elected to Pošta Slovenije d. o. o.’s works council in 2011, and was re-elected to a new term of office in January 2016. During his new term of office, he was also elected employee representative on Pošta Slovenije d. o. o.’s Supervisory Board. In 2020, he was a member of the Supervisory Board until 12 January 2020.

Dijana Kos

She was born in 1966. She has been employed at the Company since 1989 as a postal worker. After completing secondary school studying to become a pre-school teacher, she was initially employed at a kindergarten. When her fixed-term employment contract in her profession expired she went on maternity leave. When she returned to work, there were no longer any available positions in her field of expertise. She found employment at the then PTT. She worked in postal operations during that time. From 1997 to 2000 she was the head of a small post office, but otherwise worked at postal counters at multiple post offices. Initially, she was the president of a trade union, and has also been a representative on Pošta Slovenije d. o. o.’s works council for four terms, holding the position of works council vice-president during the previous term. Throughout her period of service, she has been active in protecting the rights of workers and an advocate of active co-participation of employees to ensure the Company’s successful performance and respect for employees..

Saša Gržinić

He was born in 1980 in Izola and completed secondary school of economics in 1999. He started working at Pošta Slovenije in 2003 as a student and in 2004 was employed by the Company as a postman. Due to his health issues he was forced to change his position in 2019 to work as a post office expert. In 2020 he was also elected to the works council of Pošta Slovenije d. o. o. for the first time. He was also elected as an employee representative on Pošta Slovenije d. o. o.’s Supervisory Board. He is a member of the Slovenian Directors’ Association.

Table 1: Composition of the Supervisory Board and its committees in 2020

Table 2: External committee members (e.g. audit, human resource)

The Executive Management comprises from one to three members. Those persons were as follows in 2020: the General Manager and two other members. All members of the Executive Management are appointed to a five-year term of office by the Supervisory Board and may be re-appointed. Whenever the Executive Management comprises more than one member, the Company is represented by two members together. Otherwise it is represented independently by the sole member of the Executive Management.

The Executive Management provides the founder comprehensive reports on the Company’s operations at least four times a year, and is obliged to report to the Supervisory Board at a minimum quarterly on the business policy, the Company’s financial operations, on its profitability and solvency, and on other significant indicators regarding the Company. The Executive Management comprised the following members in 2020:

Boris Novak, MSc, General Manager,

Andrej Rihter, MSc, member, and

Vinko Filipič, member.

The members of Pošta Slovenije’s Executive Management also served as members of the supervisory boards of other companies in 2020, as follows:

Boris Novak, MSc was a member of the Supervisory Board of Športna loterija d. d. until August 2020 and a member of the Supervisory Board of Intereuropa d. d., and a non-executive director of the BAMC’s board of directors;

Andrej Rihter, MSc was a member of the Supervisory Board of Slovenski državni gozdovi d.o.o. and a member of the Supervisory Board of Intereuropa d. d.;

Vinko Filipič was a member of the Supervisory Board of Športna loterija d. d. from August 2020 and a member of the Supervisory Board of Intereuropa d. d.

Boris Novak, MSc, General Manager

Mr Novak was born in 1963. He received his bachelor’s degree from the Faculty of Law at the University of Ljubljana. He completed his master’s studies while working and received a master’s degree in the field of science from the Faculty of Government and European Studies.

His professional career started in 1983, when he began working in different organisational units within the police. In 2004 he became an Undersecretary at the Ministry of the Interior of the Republic of Slovenia, after which he served as Assistant to the Director of the Criminal Police Directorate within the General Police Directorate of the Ministry of the Interior of the Republic of Slovenia. In 2006 he was employed as a consultant to the General Manager of EPPS d. o. o., and later became consultant to Pošta Slovenije’s Executive Management for complex legal issues in the areas of postal regulation, competition protection and safety. In 2008 he established the Corporate Security and Control Sector at Pošta Slovenije and became the aforementioned sector’s Director. At the end of 2011 he continued his work in the position of consultant to Pošta Slovenije’s Executive Management.

He has served as Chairman and member of the Supervisory Board of ČZP Večer d. d., Chairman and member of the Supervisory Board of Dravske elektrarne d. o. o. and Deputy Chairman and member of the Supervisory Board of EPPS d. o. o., and Deputy Chairman and member of the Supervisory Board of PBS d. d. He was also a non-executive director of the BAMC’s board of directors. Currently, he is the Chairman of the Supervisory Board of Intereuropa d. d. He is a member of the Slovenian Directors’ Association via Pošta Slovenije’s corporate membership in the aforementioned body.

On 15 May 2012 the Supervisory Board of Pošta Slovenije d. o. o. appointed him General Manager of Pošta Slovenije for a period of five years. On 15 March 2017 he was appointed to a new term of office for the next five-year period. His new term of office began on 16 May 2017.

Tomaž Kokot, the Chairman of Pošta Slovenije’s Supervisory Board at the time, who the Supervisory Board appointed as General Manager Ad Interim at its meeting of 30 March 2021, took over the management of Pošta Slovenije as of 1 April 2021.

Andrej Rihter, MSc, member of the Executive Management

Mr Rihter was born in 1970. He graduated from the Faculty of Maritime Studies and Transport at the University of Ljubljana, where he then completed his master’s degree while working.

His career began in the wood processing industry, in the development department at Gorenje GLIN. He started working at Pošta Slovenije (or PTT as it was called at the time) in 1993, first as a postman, and later as a counter clerk and a delivery controller. He was a post office manager from 1998 to 2002, and then became the Deputy Director of the Ljubljana Organisational Unit. In 2008 he became a management consultant for logistics, and was soon appointed Director of the Ljubljana Mail Sorting and Logistics Centre. In 2009 he became the Director of the Celje Organisational Unit, and in 2012 the Executive Management’s representative for economic affairs. He remained in this position until his appointment as Deputy General Manager of Pošta Slovenije and later as a member of the Executive Management.

He is a member of the Managers’ Association of Slovenia and the Slovenian Logistics Association. He was appointed as a lecturer at the Faculty of Maritime Studies and Transport at the University of Ljubljana, and a senior lecturer at the Faculty of Logistics at the University of Maribor. He has received professional training at numerous seminars in Slovenia and abroad, where he has also contributed professional papers. He has published several professional articles in the field of logistics. He is a member of the Slovenian Directors’ Association via Pošta Slovenije’s corporate membership in the aforementioned body. Mr Rihter is a member of the Supervisory Board of Slovenski državni gozdovi, d. o. o. and Deputy Chairman of Intereuropa d. d.’s Supervisory Board. He is also a member of the Executive Board of the Chamber of Commerce and Industry of Slovenia (President of the Transport Association) and a member of the general meeting of the Chamber of Commerce and Industry of Slovenia.

His first five-year term of office as Pošta Slovenije’s Deputy General Manager began on 12 August 2015. He has then served as a member of the Executive Management since 16 May 2017. On 10 July 2020 he was appointed to a new term of office for the next five-year period by the Supervisory Board of Pošta Slovenije d. o. o. His new term of office began on 13 August 2020.

Vinko Filipič, member of the Executive Management

Mr Filipič was born in 1971. He received a degree from the Faculty of Economics and Business in Maribor. He began his professional career at Pošta Slovenije in 1996 as a senior postal operations specialist, and continued as Head of the Marketing Department and later as the Director of Marketing.

In addition to his regular work, Mr Filipič has taught marketing at the Post, Economics and Telecommunications Vocational School in Ljubljana for several years, and is a member of the Strategic Council of that school (professional higher education school).

He has received professional training at numerous seminars in Slovenia and abroad, where he has also contributed professional papers. He has published several professional articles in the field of marketing, Mr Filipič served as Chairman of the Supervisory Board of EPPS d. o. o. and as a member of the Supervisory Board of PBS d. d. He is a member of the Supervisory Board of Intereuropa d. d., a member of the Supervisory Board of Športna loterija d. d., a member of the Direct Marketing Association and also a member of the Slovenian Directors’ Association via Pošta Slovenije’s corporate membership in the aforementioned body. He also served as chairman of the committee for the issue of postage stamps and postal indicia, which is appointed by the competent minister. He is an active member of the SLO-CRO Business Club.

His first five-year term of office as a member of Pošta Slovenije’s Executive Management began on 27 March 2007. Mr Filipič is responsible for the area of marketing and was reappointed in 2012. The Supervisory Board appointed him to serve as a member of Pošta Slovenije’s Executive Management for the third time on 15 March 2017. His five-year term of office began on 29 March 2017.

Table 3: Composition of the Executive Management in 2020

*Tomaž Kokot, the Chairman of Pošta Slovenije’s Supervisory Board at the time, who the Supervisory Board appointed as General Manager Ad Interim at its meeting of 30 March 2021, took over the management of Pošta Slovenije as of 1 April 2021.

Subsidiaries

The decision-making bodies of the subsidiary EPPS are its general meeting and Executive Management. The company’s Executive Management comprises Vili Hribernik, MSc.

The decision-making bodies of the subsidiary PS Moj paket are its general meeting and General Manager. The company’s general meeting comprises its sole owner, Pošta Slovenije. The company’s General Manager is Aleksander Majhen.

The decision-making bodies of the subsidiary PS Logistika are its general meeting and Executive Management. Pošta Slovenije’s Executive Management represents the company’s general meeting. The company’s Executive Management comprised General Managers Damijan Vajs and Marko Grden.

The decision-making bodies of the subsidiary APS PLUS are its general meeting and Executive Management. Until April 2020 it comprised two owners – Pošta Slovenije and Mikrografija, but now is only represented by the sole owner, i.e. Pošta Slovenije. Until April 2020 the company also had a Supervisory Board comprised of the following persons:

Iztok Renčelj, Chairman,

Martin Mlakar, MSc, member, and

Boštjan Gaberc, member.

Boštjan Gruden served as the company’s General Manager until 7 August 2020. That position has been held by Iztok Renčelj since 8 August 2020.

The decision-making bodies of the subsidiary IPPS are its general meeting and General Manager. The company’s general meeting comprises its sole owner, Pošta Slovenije. The company’s General Manager is Janez Zidar.

The decision-making bodies of the associate Športna loterija are its general meeting, Supervisory Board and Management Board. The Supervisory Board comprises six members, including a representative of Pošta Slovenije (Boris Novak, MSc until August 2020 and then Vinko Filipič from that point on). The company’s Management Board comprises up to three members.

The decision-making bodies of the subsidiary Intereuropa d. d. are its general meeting. Supervisory Board and Management Board. The company’s Management Board can have no more than four members. The composition and specific number of members of the Management Board shall be determined by the Supervisory Board via a resolution. The Management Board had three members in 2020. The Management Board was comprised of the President of the Management Board Marko Cegnar, while Marko Rems and Matija Vojsk served as members. The Management Board has had two members since 13 November 2020, comprising President of the Management Board Marko Cegnar and member Marko Rems. The Supervisory Board has six members, i.e. its Chairman Boris Novak, MSc. Deputy Chairman Andrej Rihter, MSc and members Vinko Filipič, Milan Perović, Zlatka Čretnik and Tjaša Benčina. The decision-making bodies of subsidiaries within the Intereuropa Group are presented in the annual report of the Intereuropa Group and of Intereuropa d. d. for 2020 (Section 1.2.4 Presentation of Intereuropa Group companies).

The decision-making bodies of AD Intereuropa logističke usluge, Belgrade comprise the general meeting of shareholders and board of directors. The board of directors comprises five members, three of which are non-executive directors and two executive directors. Until 4 August 2020 non-executive directors were Miha Romih, as the chair of the board of directors, and Matjaž Ujčič and Dragana Kačar, as non-executive members of the board of directors. Executive members of the board of directors to that date were Zoran Stolica as General Manager and Robert Šprem as executive director. As of 4 August 2020 non-executive directors included Matija Vojsk as chair of the board of directors and Miha Romih and Miloš Đurković as non-executive members of the board of directors. As of 4 August 2020 Darko Skrnički as General Manager and Dragana Kačar became executive directors. On 1 December 2020, in place of Matija Vojsk and Miha Romih, Marko Rems as the chair of the board of directors and Vesna Kos Tomažič as non-executive director became non-executive members of the board of directors.

The decision-making bodies of Zetatrans A.D. Podgorica are its general meeting of shareholders, board of directors and executive director. The board of directors comprises three members. The executive director is not a member of the board of directors. The following persons were members of the board of directors until 29 June 2020: Matjaž Ujčič as the chairman of the board of directors and Miha Romih and Dalibor Stojanov as members of the board of directors. As of 29 June 2020 Matija Vojsk, who has also been the chairman of the board of directors since 29 June 2020, was appointed to serve as member of the board of directors in place of Dalibor Stojanov, Tomaž Koder was the company’s executive director in 2020.

The decision-making bodies of the associate Športna loterija are its general meeting, Supervisory Board and Management Board. The Supervisory Board comprises six members, including a representative of Pošta Slovenije (Boris Novak, MSc until 24 August 2020 and then Vinko Filipič from 25 August 2020). The company’s Management Board comprises up to three members.

2.1.2 Report on the work of the Internal Audit Department within the Pošta Slovenije Group

Pošta Slovenije’s Internal Audit Department (hereinafter: the IAD) is an independent organisational unit segregated from other organisational units, and is directly accountable to the Executive Management, and functionally to Pošta Slovenije’s Supervisory Board. Such an organisational structure ensures that it is independent from audited sectors and the Company’s other organisational units. It functions on the basis of the rules of procedure of the Internal Audit Department, while work instructions are set out in the internal audit manual.

The planning of work of the IAD is based on the analysis of the risks associated with the functioning and control of key business processes carried out at Pošta Slovenije, and on the basis of risks recognised by expert divisions. The scope and allocation of internal auditing tasks are defined in the IAD’s strategic policies and annual work plan.

IAD auditors performed internal audits and provided consultancy services in the following areas of the Company’s operations in 2020: marketing and sales, purchasing, logistics, information technology and information security, and strategic management and governance. Its work also covered the operations of Pošta Slovenije Group companies, excluding the Intereuropa Group.

When conducting internal audits, the IAD focuses on verifying the existence and functioning of the internal control system in work processes. It also focuses on risk management, and the correctness, timeliness and reliability of information that the Executive Management and others require for making business decisions.

The IAD regularly reports findings and recommendations for improving the efficiency of internal controls for risk management to audited units and the Executive Management of Pošta Slovenije, and to the Supervisory Board’s audit committee on a quarterly basis.

The IAD carried out an internal quality assessment in accordance with the quality assurance and improvement programme. In 2020 an external assessor also conducted an external quality assessment that confirmed that the Pošta Slovenije’s IAD generally complies with the hierarchy of internal auditing rules, meaning that the work of the Pošta Slovenije’s IAD complies with the International Standards for the Professional Practice of Internal Auditing. The IAD reported the results and findings to the Executive Management and the supervisory body.

The IAD employed two internal auditors and one information system auditor in 2020. All three employees hold the requisite professional title. In addition to audits, IAD employees also provided consultancy services in 2020, and worked with the external auditor during the auditing of the annual report of Pošta Slovenije d. o. o. and the Pošta Slovenije Group for the 2019 financial year.

Internal auditors are independent from the activity they audit, which facilitates the professional and impartial performance of their work. They are continuously trained and educated, and monitor the latest developments in the auditing profession.

2.1.3 External auditing of the Pošta Slovenije Group

On 31 May 2018 the Management Board of SDH adopted a resolution approving the appointment of Deloitte revizija d. o. o., Dunajska cesta 165, Ljubljana to audit the annual report of the Pošta Slovenije Group and Pošta Slovenije, and to audit the separate financial statements of the universal postal services provider for 2018. The audit firm was appointed for a period of three years (from 2018 to 2020) and will audit the financial statements for the ninth consecutive year.

An audit of the financial statements and annual report of the subsidiary EPPS for 2019 was performed in April 2020 by the audit firm Deloitte revizija d. o. o., Dunajska cesta 165, Ljubljana.

On 30 May 2018 the general meeting of EPPS appointed Deloitte revizija d. o. o., Dunajska cesta 165, Ljubljana to audit the company’s annual financial statements for the period 2018 to 2020.

The annual audit of the financial statements and annual report of the subsidiary PS Logistika d. o. o. for 2019 was performed in April 2020 by the audit firm Deloitte revizija d. o. o., Dunajska cesta 165, Ljubljana.

On 30 May 2018 at its meeting the general meeting of PS Logistika appointed Deloitte revizija d. o. o., Dunajska cesta 165, Ljubljana to audit the company’s annual financial statements for the period 2018 to 2020.

The annual audit of the financial statements and annual report of the subsidiary IPPS d. o. o. for 2019 was also performed in April 2020 by the audit firm Deloitte revizija d. o. o., Dunajska cesta 165, Ljubljana.

On 30 May 2018 the general meeting of IPPS appointed Deloitte revizija d. o. o., Dunajska cesta 165, Ljubljana to audit the company’s annual financial statements for the period 2018 to 2020.

The general meeting of Intereuropa d. d. appointed the audit firm ERNST & YOUNG Revizija, poslovno svetovanje d. o. o., Dunajska cesta 111, Ljubljana to audit the financial statements of Intereuropa d. d. and the Intereuropa Group for 2019, 2020 and 2021.

According to the criteria under the Companies Act, the other subsidiaries of the Pošta Slovenije Group, excluding the Intereuropa Group, do not meet the criteria as medium-sized and large enterprises. The independent auditing of their financial statements is thus not required according to the law.

The costs of auditing services incurred by the Pošta Slovenije Group are presented in section 4.6 Notes to the financial statements of the Pošta Slovenije Group (Note 32).

2.1.4 Corporate governance statement of the Pošta Slovenije Group and Pošta Slovenije d. o. o.

Pursuant to the provision of the fifth paragraph of Article 70 of the Companies Act, the Corporate Governance Code for State-Owned Enterprises (November 2019; hereinafter also: the Code), the Recommendations and Expectations of Slovenski državni holding (the recommendation were revised in August 2020, the version from March 2018 applied to that point) and Pošta Slovenije’s Articles of Association of 26 August 2019, the Company hereby issues the following corporate governance statement of the Pošta Slovenije Group and Pošta Slovenije d. o. o. as part of its business report:

Reference to the Code

The Pošta Slovenije Group and Pošta Slovenije d. o. o. consistently adhere to the provisions of the Corporate Governance Code for State-Owned Enterprises in their operations and reporting. The code is accessible on SDH d. d.’s website:https://www.sdh.si/Data/Documents/pravni-akti/Kodeks%20korporativnega%20upravljanja_marec%202021%20(1).pdf

Exceptions are as follows:

Points 6.2 to 6.2.6 – compliant in part, in the process of implementation, Pošta Slovenije confirmed the succession policies and development of key personnel project in the scope of which activities are ongoing in accordance with the provisions of the Code as well as in the broader sense, as Pošta Slovenije also carries out the identification of personnel who could be candidates for other key positions at the Company, and not only for the assumption of managerial functions, as ensured by the target-oriented development of employees, the reduction in the risk of departures by employees in key positions, and creates a base of talents that is developed for the assumption of strategic/key positions.

The objectives of the project are as follows:

ensure continuity in the operations of the Company;

identify the personnel who could be suitable candidates to take over executive functions, considering the Company’s strategic objectives;

identify personnel that could be candidates for other key positions at the Company;

target-oriented development of employees (focus on talents – investment in the ‘right’ people);

reduce the risk of departures by employees holding key positions/jobs;

increase employee commitment;

increase the attractiveness of the Company as an employer (simpler recruitment and increased likelihood of employing talented individuals – strategic competitive advantage);

create a base of talents that are developed to take over strategic/key positions;

Pošta Slovenije’s competency model has been put in place for all positions, Group supervision has been conducted for managerial staff and based on the completion thereof an analysis has been drafted and subsequent activities that are in progress have been proposed.

Points 6.8 to 6.9.9 – the appointment of Supervisory Board members and the process of selecting Supervisory Board members is carried out by the general meeting or SDH.

Point 6.11 – the Supervisory Board approved payment for the external member on the Supervisory Board’s audit committee in an amount that complies with the guidelines of the Slovenian Directors’ Association, more precisely with its recommendations for audit committees, 2017, in particular: for the performance of their function a monthly fee and attendance fee for participation at a particular meeting, while also being entitled to reimbursement for travel expenses. By way of a resolution, the Supervisory Board set a lump sum for the external member of the Supervisory Board’s human resource committee (HRC) for their attendance at meetings, taking into account the specific nature of assignments in the scope of Supervisory Board’s HRC and the standard sum that applies for this professional field.

Points 6.13 to 6.13.3 – at the beginning of February 2021, the Supervisory Board began the assessment of the work of the Supervisory Board (self-assessment), which due to the replacements of Supervisory Board members in 2020 was not completed.

Point 6.16.1 – compliant in part, The Chairman of the Supervisory Board is also the chair of the Supervisory Board’s HRC.

Point 8.3 – compliant in part, The variable component of remuneration is not reported separately on the basis of quantitative and qualitative criteria, as it is calculated on the basis of criteria that do not distinguish between the two elements.

Point 11 – compliant in part, Pošta Slovenije does not have a fully established corporate integrity system in accordance with the Slovenian Corporate Integrity Guidelines, but does have in place a system for the anonymous reporting of irregularities and unlawful acts, which it also updated last year (issued new rules, expanding the system to other companies within the Pošta Slovenije Group, excluding Intereuropa). In addition, it also has set up internal investigative measures, including a system for carrying out integrity tests and a system of internal supervision and controls when carrying out postal operation processes. Introduction of the function of a compliance and integrity officer, the drafting of an integrity plan and anti-corruption programme and training covering compliance and integrity are all envisaged in 2021.

Compliance with the document ‘Recommendations and Expectations of Slovenski državni holding’ and other internal acts on corporate governance

In their operations, the Pošta Slovenije Group and Pošta Slovenije d. o. o. take into account the recommendations of SDH (available on its website:https://www.sdh.si/Data/Documents/pravni-akti/Priporo%C4%8Dila%20in%20pri%C4%8Dakovanja%20SDH_avgust%202020.pdf), except the following points:

4.4 and 4.5 – the Company does not publish information on its website regarding employee-related payments, the collective agreement and agreements with employee representatives, but does inform its employees via memos and the intranet.

5 ‘Achieving quality and excellence in the operations of a company/group’ – the Pošta Slovenije Group and Pošta Slovenije d. o. o. do not use the EFQM model of excellence, but rather a BSC (Balanced Scorecard) model;

6 ‘General meeting of companies’ – on behalf of the Company’s sole owner, SDH organises the general meeting on a day that is typically not announced in advance;

8.2 – the Company set about performing activities to draft an action plan for the implementation of the principle of the National Action Plan of the Republic of Slovenia on the Respect of Human Rights in Business, which it plans to adopt in 2021. To that end, it plans to meet the deadlines for the fulfilment of individual commitments.

9 (the remuneration policy and rules on other rights of members of management bodies were adopted separately in 2016 for Pošta Slovenije and separately (as a group) for its subsidiaries). At the beginning of 2020 the Supervisory Board of Intereuropa d. d. (the company joined the Pošta Slovenije Group at the end of 2019) adopted a remuneration policy for Management Board members of Intereuropa d. d., while Interagent d. o. o. and Interzav d. o. o. are smaller companies that comply with the provisions of the ZPPOGD. These documents comply in part with the new recommendations of SDH from August 2020. Amendments to the act governing the remuneration and rights of Pošta Slovenije’s Executive Management members and the act that applies to Pošta Slovenije Group subsidiaries are in the process of being drafted. After alignment, these acts will comply each time with the recommendations on setting out rights in a specific contract with an individual management body member, taking into account the specific operational characteristics and other circumstances relating to a specific company according to the principle of careful assessment and conduct in the interest of a particular company; as well as newly defining the fringe benefits and other benefits and special remuneration, in accordance with the recommendations.

The corporate governance of the Pošta Slovenije Group and Pošta Slovenije d. o. o. in 2020 was in line with the Corporate Governance Policy of Pošta Slovenije d. o. o. from September 2016 (available at the following website: (https://www.posta.si/o-posti-site/Documents/Politika%20upravljanja%20dru%C5%BEbe.pdf), the Rules on the Management and Supervision of Pošta Slovenije Group Companies from February 2016, the Rules on Corporate Risk Management within the Pošta Slovenije Group from October 2016, and the Code of Ethics of Pošta Slovenije d. o. o. and its subsidiaries from October 2016 (available at the following website: https://www.posta.si/o-posti-site/Documents/Eticni-kodeks-Poste-Slovenije.pdf).

In accordance with the Rules on general acts the Company keeps a Register of general acts (and Group acts). The register also lists the administrators of a particular act depending on the particular profession that an act regulates. These rules impose an obligation on employees, with the proposer of the act (administrator) being required to regularly update the act from the date on which the particular act was issued, and is also responsible for:

continuous monitoring of the area or content that is governed by the general act;

proposing and drafting amendments and/or additions, the manner of implementing or enforcing amendments and/or additions to the general act needs to be coordinated with the Legal Affairs Department, examining the rationale behind the drafting and compilation of the final version of the general act, if it was subject to amendments and/or additions;

correction of errors in general acts;

drafting of a proposal for the interpretation of the general act; and

submitting the act for publication.

Code of Ethics of Pošta Slovenije d. o. o. and its subsidiaries

The code of ethics comprises a set of moral and ethical values that include the mission and vision of Pošta Slovenije and its subsidiaries, the general and fundamental guidelines for the ethical behaviour and conduct of employees, on the basis of which the code of ethics defines and sets out employees’ mutual relations and customer relations, the handling of confidential information, conflicts of interest, the responsibility of employees when these values and guidelines are breached, control over the implementation of the code of ethics and sanctions when the code of ethics is breached.

Code of Intereuropa d. d.

In 2020, Intereuropa d. d. applied the Slovenian Corporate Governance Code, which was adopted by the Ljubljana Stock Exchange and the Slovenian Directors’ Association on 27 October 2016, as its reference code.

Diversity policy

The Pošta Slovenije Group is aware of the importance of diversity in the composition of management and supervisory bodies, as diversity contributes to the more comprehensive understanding of the business environment, which in turn ensures the improved efficiency of the functioning of Group companies’ bodies, successful long-term operations and a good business reputation. To that end, the Executive Management and Supervisory Board of Pošta Slovenije together formulated the Diversity Policy of the Governance Bodies of Pošta Slovenije d. o. o. and the Pošta Slovenije Group (hereinafter: the diversity policy). The founder/general meeting and works council were briefed on the content and adoption of the diversity policy, which is published on the Company’s website. The diversity policy is particularly used in the selection of candidates and submission of

consent to management and supervisory body members, in the selection of candidates in the succession process and during the self-assessment of the work of the Supervisory Board, where in defining the optimal composition of management and supervisory bodies the following factors are taken into account to the greatest extent possible: complementarity of education, expert knowledge and competences, appropriate continuity, the balanced representation of both genders, and a balanced age structure. In accordance with the Corporate Governance Code for State-Owned Enterprises, Pošta Slovenije’s Supervisory Board also adopted the document ‘Optimal Size and Competence Profile of Members of Pošta Slovenije’s Supervisory Board’, which covers multiple aspects of diversity in the composition of the supervisory body in terms of heterogeneity of the composition according to criteria such as gender, age and professional competences (required level of professional education – qualifications, desired knowledge and experience), which is likewise published on the Company’s website. The Supervisory Board oversees the implementation of the diversity policy, but lacks any authority regarding the implementation of the diversity policy regarding supervisory body members, as in accordance with Pošta Slovenije d. o. o.’s Articles of Association Supervisory Board members are appointed by the founder.

In terms of the diversity of the Executive Management’s professional competences, the Supervisory Board is responsible for heterogeneity in the composition of the Executive Management by covering all the areas of operation and work of the Pošta Slovenije Group according to the diversity of the Executive Management’s professional competences, as well as providing consent to the distribution of work areas among Executive Management members. Diversity according to gender remains unchanged according to the current composition, as the Company’s Executive Management is only made up of men.

Graph 1: Breakdown of supervisory body members by gender

Internal control and risk management system

The framework of the Pošta Slovenije Group’s internal control and risk management system is in line with the provisions of the ZGD-1I, the provisions of the Corporate Governance Code for with State-Owned Enterprises and the provisions of the Articles of Association of Pošta Slovenije d. o. o. To that end, the following principles of effective governance are followed:

an organisational structure with clearly defined responsibilities;

defined procedures for identifying, assessing, managing and monitoring risks; and

an adequate system of internal controls that includes precisely defined accounting procedures and controls of key business processes.

Pošta Slovenije is organised through processes, and the system of internal controls is spread out across individual processes. B1-level directors are responsible owners of entire processes, meaning that they are required to establish the relevant processes, verify them and arrange the suitable internal acts.

Pošta Slovenije d. o. o. has an Internal Audit Department that also performs internal audit transactions at subsidiaries, as required. The responsibilities and competences of the aforementioned department are set out in the rules of procedure of the Internal Audit Department. For additional details, see section 2.1.2 Report on the work of the Internal Audit Department within the Pošta Slovenije Group.

For more details on risk management see section 2.8 Corporate risk management within the Pošta Slovenije Group.

Financial reporting

A separate organisational unit at Pošta Slovenije is responsible for financial reporting by the Pošta Slovenije Group (excluding Intereuropa) and Pošta Slovenije d. o. o. The work of the finance and accounting organisational unit is governed by the rules and responsibilities set out in accounting rules and accounting policies. Effective controls in the area of accounting ensure support for operations and decision making, correct, complete and timely financial data, and financial and other reports, as well as compliance with the law and other requirements.

The purpose of internal controls is to ensure the reliability of financial reporting and compliance with valid laws, and other external and internal regulations. Accounting controls are employed to manage the risks associated with the following:

the credibility of accounting data: of primary importance are bookkeeping documents, as evidence of the existence of business events, that clearly show the content and value of such business transactions;

the completeness of financial data: this is ensured by the Company through precisely defined record-keeping procedures in internal acts, and through control over the functioning of such procedures;