Hrvatska postanska banka d d : Invitation to the XLIX General Assembly with proposals for decisions and explanatory notes

	LEI	529900D5G4V6THXC5P79
	Home Member	Republic of Croatia
	State of Issuer
HRVATSKA POŠTANSKA BANKA d.d.
ISIN	HRHPB0RA0002
Management Board	Stock Exchange	HPB-R-A
Jurišićeva ulica 4, HR-10000 Zagreb	Identifier
Phone: [phone]	Regulated Market/	Zagreb Stock Exchange Inc.
Segment	Official Market
Fax: [phone]

Zagreb, 22 July 2022.

Ref. No: F00-90/22-SS

Zagreb Stock Exchange Inc.

Croatian Financial Services Supervisory Agency (HANFA)

Croatian News Agency OTS HINA

Subject: HRVATSKA POŠTANSKA BANKA, p.l.c.

• Notice of the convocation of the General Assembly - Invitation to the Shareholders
• Category: General Assembly - agenda, proposals, resolutions

The Management Board of Hrvatska poštanska banka, p.l.c., Zagreb, Jurišićeva ulica 4 (hereinafter: the Bank), pursuant to the provisions of the Companies Act, made the Decision on 21 July 2022 to convene the General Assembly of the Bank, to be held on 29 August 2022 at

Hotel Academia (Gloria hall, 1st floor), Zagreb, Tkalčićeva 88, at 12:00 noon.

Pursuant to the provisions of the Capital Market Act and Zagreb Stock Exchange Rules, the Management Board hereby submits for publication the Invitation to the Shareholders of the Bank in the legally defined form, containing Proposals of the Resolutions.

We hereby declare that the full, legally defined form of the Invitation to the Shareholders, including the documents for the General Assembly, will also be published on the Bank's website www.hpb.hr, pursuant to the applicable regulations.

The Invitation to the Shareholders is attached to the Notice.

Hrvatska poštanska banka, p.l.c.

Hrvatska poštanska banka, p.l.c. ⋅ Jurišićeva ulica 4, 10000 Zagreb, Croatia ⋅ phone: [phone] ⋅ [e-mail] ⋅ www.hpb.hr Management Board ⋅Marko Badurina, President ⋅⋅ Anto Mihaljević, Member ⋅ Ivan Soldo, Member ⋅ Marijana Miličević, President of the Supervisory Board ⋅ IBAN: ⋅HR46 2390 0011 0700 0002 9 ⋅⋅ SWIFT: ⋅HPBZHR2X ⋅⋅ OIB: ⋅87939104217 ⋅⋅ Registered with the Commercial Court in Zagreb under company registration number MBS ⋅080010698 ⋅⋅Share capital of HRK 1,214,775,000.00 divided into 2,024,625 ordinary shares in the nominal value of HRK 600.00 (paid in full)

The Management Board of Hrvatska poštanska banka p.l.c. (hereinafter the Bank), Zagreb, Jurišićeva ulica 4, by virtue of the authority vested in it under Article 277 of the Companies Act (Official Gazette Nos. 111/1993, 34/1999, 121/1999, 52/2000, 118/2003, 107/2007, 146/2008, 137/2009, 111/2012, 125/2011, 68/2013, 110/2015, 40/2019, 34/2022) and Article 24 of the Articles of Association of the Bank, made on 21 July 2022 the decision on the convocation of the General Assembly of the Bank, and hereby invites the Shareholders of the Bank to attend the

XLIX GENERAL ASSEMBLY

of Hrvatska poštanska bakna p.l.c., Zagreb, to be held on 29 August 2022 at Hotel Academia (Gloria hall, 1st floor), Zagreb, Tkalčićeva 88, at 12:00 noon.

XLIX General Assembly

Agenda:

1. Opening of the General Assembly and establishment of a quorum of the present Shareholders or their proxies
2. Annual Financial Statements of Hrvatska poštanska banka p.l.c. and Consolidated Annual Financial Statements of Hrvatska poštanska banka Group for 2021, approved by the Management Board and the Supervisory Board of the Bank, and the Annual Management Report of Hrvatska poštanska banka p.l.c. and its subsidiaries for 2021
3. Report of the Supervisory Board on the supervision exercised over the conduct of business affairs in the Bank in 2021
4. Resolution on the allocation of the profit realised in 2021
5. Resolution on the approval of the Management Board Members' actions
6. Resolution on the approval of the Supervisory Board Members' actions
7. Resolution on the determination of remuneration for the Members of the Supervisory Board;
8. Resolution on the determination of remuneration for the Members of the Audit Committee, the Risk Management Committee, the Remuneration Committee and the Appointments Committee
9. Resolution on the appointment of the auditor of Hrvatska poštanska banka p.l.c. for the year 2022
10. Resolution on the suitability of the Members of the Supervisory Board of Hrvatska poštanska banka p.l.c. based on the regular annual suitability assessment procedure
11. Resolution on the approval of the Remuneration Report for the Members of the Management Board and Supervisory Board for 2021
12. Adoption of the Diversity Policy for the Members of the Management Board and the Supervisory Board of Hrvatska poštanska banka, p.l.c.
13. Adoption of the Policy on the target structure and the assessment of the suitability of the Members of the Supervisory Board of the Bank
14. Resolution on the approval of the process of the legal and business merger by acquisition of Nova
    Hrvatska banka p.l.c. with Hrvatska poštanska banka, p.l.c.
15. Adoption of the Rules of Procedure of the General Assembly of Hrvatska poštanska banka, p.l.c.

The Shareholders are hereby invited to participate in the General Assembly.

PROPOSED RESOLUTIONS AND EXPLANATORY NOTES

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Under Agenda Item 2 the General Assembly shall not pass resolutions.

Pursuant to the provision of Article 280.a of the Companies Act, the Shareholders are advised that the Supervisory Board of the Bank gave its consent to the Annual Financial Statements of Hrvatska poštanska banka p.l.c. and Consolidated Financial Statements of Hrvatska poštanska banka Group for 2021, submitted to the Supervisory Board by the Management Board of the Bank, and that as per the provision of Article 300.d of the Companies Act these statements were thereby adopted.

The Supervisory Board gave its consent to the Annual Management Report of Hrvatska poštanska banka p.l.c. and its subsidiaries for 2021, submitted to the Supervisory Board by the Management Board of the Bank.

The above Annual Financial Statements and the Annual Management Report of the Bank and its subsidiaries, together with the report of the Supervisory Board are submitted to the General Assembly.

With reference to the Resolution of the Bank's General Assembly on granting authorization to the Bank's Management Board to acquire and dispose of its own shares from 10 May 2021, the General Assembly is

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informed that the Bank initiated a Share Buy-Back commencing on 19 January 2022 and with the duration until the following regular General Assembly of the Bank in 2022, with the intention of acquiring up to a maximum of 341 own shares and with the allocated cash consideration of HRK 350,000.00, for the purpose of payment of variable remuneration scheme as defined by the Bank's and HPB Group's Remuneration Policy.

Pursuant to the Share Buy-Back, the Bank repurchased a total of 341 own shares on the Regulated Market of Zagreb Stock Exchange in the period from 19 to 26 January 2022. On 18 January 2022 and prior to the repurchase, the Bank held 795 own non-voting ordinary shares which represented 0.039266% of the Bank's share capital, and on 27 January 2022 upon the repurchase completion the Bank held a total of 1,136 own non-voting ordinary shares which represented 0.056109% of the Bank's share capital. The Bank provided consideration in the amount of HRK 277,600.00 for the purpose of the share repurchase.

On 23 February 2022, the Bank released all 1,136 of its own shares from the Regulated Market of Zagreb Stock Exchange.

HPB Annual Report for 2021

Report available from the link

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Item 3 The Report submitted by the Supervisory Board to the General Assembly

REPORT

on the supervision exercised over the conduct of business affairs in the Bank in 2021

I

In compliance with the provisions of the Articles of Association and the resolutions passed at the General Assembly of the Bank in 2021, the Supervisory Board was active in two compositions comprising three members.

The composition of the Supervisory Board in the period from 1 January to 12 August 2021 was as follows: Marijana Miličević as President, Željko Lovrinčević as Deputy President and Marijana Vuraić Kudeljan as Member.

As a consequence of the expiry of term of office of the aforementioned Members of the Supervisory Board and in compliance with the resolutions passed at the General Assembly of the Bank held on 10 May 2021 and with the consent of the Croatian National Bank, Marijana Miličević, Marijana Vuraić Kudeljan and an independent member Mislav Ante Omazić, were appointed for the new four-year term of office. The composition of the Supervisory Board in the period from 13 August to 31 December 2021 was as follows: Marijana Miličević as President, Mislav Ante Omazić as Deputy President and Marijana Vuraić Kudeljan as Member.

Pursuant to the provisions of the Credit Institutions Act, the Decision of the Croatian National Bank on governance arrangements, the Decision on the assessment of the suitability of the chairperson of the management board, members of the management board, members of the supervisory board and key function holders in a credit institution, and Corporate Governance Code adopted by Croatian Financial Services Supervisory Agency and Zagreb Stock Exchange, it has been determined that in both compositions of the Supervisory Board during 2021, the criteria for the Independence of mind of a member of the Supervisory Board has been fully met, thus ensuring the functioning of the Supervisory Board and its committees in accordance with the provisions of applicable regulations. Based on the regular annual assessment of the suitability of the Members of the Supervisory Board of the Bank, and the assessment of the suitability of the candidates for membership in the Supervisory Board, it has been determined that during the course of 2021 the composition of the Supervisory Board reflected a broad set of knowledge, and diversity in respect of professional experience, gender and age, taking into account required knowledge, skills and experience. This is supported by the fact that the Croatian National Bank gave prior consent upon having confirmed individual and collective suitability of the candidates for membership in the Supervisory Board.

The DiversityPolicy for Members of the Management Board and Supervisory Board of Hrvatska poštanska banka, p.l.c. adopted by the General Assembly establishes the basic goals and principles of promoting diversity and representation of both genders in the management body of the Bank and the supervisory function. During the reporting period there were two female members and one male member in each composition of the Supervisory Board which accounts for 66.7% of female representation which is far above the target level of representation set at a minimum of 30%. In that respect, the diversity objectives in relation to the supervisory function have been fully met.

II

In 2021, the Supervisory Board held eleven sessions where issues pertaining to the Bank's operations were discussed. All members of the Supervisory Board regularly attended sessions, either onsite in person or online via appropriate audio /video communication platforms. The Supervisory Board, in addition to regular sessions, passed resolutions 108 times via electronic mail in situations when urgent and individual resolutions which required prompt decisions. The majority of these pertained to the consents of the Supervisory Board with reference to the Bank's exposure to individual customers, in accordance with the

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legislation in force, as well to other resolutions pertaining to legislation which requires the consent of the Supervisory Board.

When necessary, sessions of the Supervisory Board were attended also by individual executive directors of divisions and directors of departments who provided all required supplementary explanations that contributed to the Supervisory Board's in-depth understanding of the relevant matters. As required by the law, sessions were also attended by persons responsible for the operation of individual control functions.

III

The Management Board and the Supervisory Board acted in line with valid legal regulations governing their competence and roles and in line with the Articles of Association of the Bank.

Acting in conformity with the law, the Articles of Association of the Bank, the Supervisory Board of the Bank supervised the conduct of the Bank's affairs, established the guidelines for the Bank's business policy, and actively contributed to its implementation, all on the basis of the reports of the Management Board on issues of importance for the conduct of business affairs and the condition of the Bank.

The Management Board provided the Supervisory Board with duly prepared, true, and timely reports on business policy and on other general issues related to the future conduct of business, financial plans, risk management strategies and policies, operational profitability, workflow, as well as income and the condition of the Bank, and other important issues, whereby the Members of the Management Board, each within their competence, provided additional explanations and clarifications, thus ensuring effective decision-making process.

The Management Board of the Bank submitted financial reports on a quarterly, semi-annual, and annual basis and regularly discussed their implementation with the Supervisory Board.

In accordance with the law, and within its competence, the Supervisory Board gave consent to basic business documents the adoption of which falls within the competence of the Management Board of the Bank: Business and financial plan for 2021, Business goals and key performance indicators (KPI) of the Bank for 2021, Risk Appetite Policy, Recovery Plan and other internal acts in the field of management and risk appetite, updated Policy on the target structure of the Management Board and the assessment of the suitability of the president and the members of the Management Board of the Bank including decisions of the Credit Committee of the Bank regarding the Bank's exposure to customers / groups of associated customers.

The Supervisory Board supervised adequacy and efficiency of the system of internal controls, which relies on three mutually independent control functions - Risk Management, Internal Audit, and Compliance - and, within its competence, gave consent to Plans on the work of the control functions, their goals and performance indicators and examined Reports on the work of the risk control functions which were submitted and considered semi-annually. In line with the procedure set forth by the law, the Supervisory Board annually assessed the suitability of the persons responsible for the operation of control functions in the Bank and based on the regular suitability assessment the Supervisory Board found them suitable to perform control functions.

Continuous and constructive cooperation of the Management Board and the Supervisory Board and exchange of relevant information necessary to complete relevant tasks also contributed to the fulfilment of the supervisory function. The Supervisory Board had at all times the possibility to request and to obtain from the Management Board of the Bank information on any issue related to the operations of the Bank which significantly affected or could have affected its position. The Management Board ensured, among other things, that Members of the Supervisory Board had appropriate access to information on risk profile. During the course of 2021, good and transparent cooperation manifested itself in the open discussion between the Management Board and the Supervisory Board of the Bank. The Members of the Management Board of the Bank regularly attended the sessions of the Supervisory Board, within the scope of their competences reported on, and explained individual topics so that the Supervisory Board could have taken its position and made required resolutions. In that regard, the Supervisory Board is of the opinion that the cooperation with the Management Board was very successful.

In the light of the foregoing and the achieved financial results, the Supervisory Board finds that in 2021 the Management Board of the Bank was good and successful in managing the Company's affairs in the best interest of all the Shareholders and in line with its competence, as established by legal regulations and the Bank's Articles of Association. The Management Board also established clear internal relations in connection with risk-taking and risk management, including segregation of duties and responsibilities between the Supervisory Board, the Management Board, the appointed committees and the senior management.

IV

Furthermore, in 2021 the Supervisory Board continued taking charge of the implementation of the long- term succession plan in connection with the composition of the Management Board of the Bank.

In line with the procedure set forth by the law, it annually assessed the suitability of the Members of the Management Board of the Bank. Based on the outcome of the suitability assessment conducted by the Suitability Assessment Committee of the Bank, and upon obtaining a positive opinion of the Nomination Committee, the Supervisory Board established that the President and all Members of the Management Board of the Bank were individually suitable to perform their respective functions and that the Management

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Board collectively had sufficient knowledge, skills and experience to perform its duties independently and without undue influence from other persons, and in particular to understand the Bank's activities and the main risks.

In addition, as a consequence of the expiry of the term of office of the current Members of the Management Board, in June 2021 the Supervisory Board timely ensured the continuity and efficiency of the Management Board and its supervisory and management functions by reappointing the Members for a new two-year term of office upon completion of the assessment of the suitability, individual and collective, of the President and the Members of the Management Board of the Bank and upon having been granted prior approval of the Croatian National Bank.

V

The Supervisory Board has established the following committees: the Audit Committee, the Remuneration Committee, the Risk Management Committee and the Appointments Committee, established with the aim of discussing matters falling within the scope of their competences and respective responsibilities. The Bank's Management Board ensured access to all information and data for the purpose of efficient work of these committees, as well as the availability of Bank's expert services, control functions, and relevant external experts when necessary.

In 2021, the Audit Committee held eleven regular sessions where it discussed and decided on the matters that fall within its competence and responsibility, as regulated by the Resolution on the establishment of the Audit Committee and its Rules of Procedure. In addition to regular sessions, the Audit Committee decided outside the sessions 5 more times via electronic mail, in situations when it was necessary to promptly make certain decisions/conclusions within its competence.

In the period from 1 January to 12 August 2021, Željko Lovrinčević was the Chairperson of the Audit Committee, who was appointed to the Audit Committee from the Supervisory Board as an independent member, and Ivana Radeljak Novaković and Zlatko Benčić, were appointed as external experts. Zlatko Benčić met the required conditions for independence in line with applicable regulations and performed the role of Deputy Chairperson.

The expiry of term of office of the members of the Supervisory Board affected the composition of the Audit Committee, and the resolutions passed at the General Assembly of the Bank held on 10 May 2021 included appointment of external experts Ivana Radeljak Novaković and Željko Lovrinčević to the Audit Committee. Željko Lovrinčević met the required conditions for independence in line with applicable regulations. From among its members, the Supervisory Board of the Bank, passed the Resolution on 13 August 2021 to appoint Mislav Ante Omazić, the current independent member of the Supervisory Board, to the Bank's Audit Committee. In the period from 13 August to 31 December 2021, the composition of the Audit Committee was as follows: Željko Lovrinčević, Chairperson, Ivana Radeljak Novaković, Deputy Chairperson and Mislav Ante Omazić, Member.

The Audit Committee assisted the Supervisory Board in performing its duties related to overseeing the financial reporting process, the audit process (including the recommendation to the General Assembly for the selection of the external auditor), the effectiveness of the internal audit system, discussing annual work plans and internal audit related to this area. The Supervisory Board supervised, with the assistance of the Audit Committee, adequacy and efficiency of the system of internal controls with the aim of maintaining and improving a system of internal controls that enables the Bank to monitor and detect in a timely manner all risks to which the Bank may be exposed in its operation.

The Risk Management Committee, the Remuneration Committee and the Appointments Committee have three members each, elected from amongst the Members of the Supervisory Board with one of them acting as the chairperson of the respective committee.

In 2021, the Risk Management Committee held six regular sessions and passed 7 decisions via electronic mail, the Remuneration Committee held three sessions and passed three decisions via electronic mail and the Appointments Committee held two sessions and passed eight decisions via electronic mail. All members of respective committees regularly attended all sessions. Matters falling within the scope of competences and responsibilities of these committees were discussed and commented at the sessions. When necessary, over the course of the year, all committees decided via electronic mail in situations when individual decisions and conclusions had to be made promptly.

The Supervisory Board assesses that all committees had successfully performed their function in compliance with applicable regulations and thus contributed to the effective work of the Supervisory Board.

Bearing in mind the assessment of the suitability of the members of the Supervisory Board of the Bank conducted by the Suitability Assessment Committee within the scope of its regular annual assessment, including the active participation in the sessions of the Supervisory Board and its committees, the Supervisory Board establishes that all of its members contributed significantly to its work, both individually and collectively, with their competences, experience, and dedication, thus enabling adequate and full supervision of the conduct of the Bank's affairs and complete performance of the Supervisory Board's function. In the course of the last financial year, no case of conflict of interest of Management Board or Supervisory Board Members was determined.

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