Responsibility

As the most significant benefits for Podravka which are made by using the concept of social responsibility  we can mention the better managing of reputation, product brands and risk, competitive advantage, market positioning, attracting the best people, their motivation and stay in the company, savings which are the result of better organization of work, more capital availability, the better investing relations and better economic results. The basis of a quality implemented social responsibility of a company the building of trust and credibility among the employees, consumers and suppliers, investors and financial institutions and the wider social community.

As a part of its social responsibility Podravka founded the "prof. Zlata Bartl" Foundation in 2001 with the basic purpose of promoting and encouraging creative and innovative scientific-research work among young high-educated people, the citizens of the Republic of Croatia. The guiding inspiration of the Foundation is the work of professor Zlata Bartl who is credited for creating Vegeta, the most famous Croatian brand, and who dedicated her entire life to working at Podravka and providing younger generations of Podravka's workers with in-service training. The funds of the Foundation are used for scholarships and support to both undergraduate and postgraduate regular students.

Podravka like other successful and renowned world companies, apart from profit, aims at contributing to improvement of society and the quality of life of citizens, in other words, a socially responsible business managing.  Wherever Podravka works, it has proven to be a desirable social partner  who takes care about the social community.

A portion of their financial and material resources, Podravka has been putting aside for donations and sponsorships. For years now Podravka sets aside part of its financial resources and goods for donations and  sponsorships. . Podravka allocated in 2006 for donations and sponsorships more than hrk 30 mln continuing the growing trend of earmarking for  donations and sponsorship from 2005.

Podravka's funds for donations and sponsorships are focused on
many social areas:

• children and youth,
• aged and feeble,
• health,
• culture,
• science,
• education,
• sports,
• humanitarian activities,
• publishing  activity,
• environment protection,
• economics.

Podravka's investments in the environment protection have been increasing in the last three years, that is to say they were bigger in 2005 by  250% than in 2004, and in  2006 they had risen for 50% in relation to  2005.

The biggest part in the overall investments in the environment protection in 2004 consists of investment in the water purification facility  (33%), and after that, there is taking care of various kinds of waste (26,5%). In 2005 as many as 75% of the overall investments in the environment protection  was intended for taking care of packaging waste, while the second position  was dedicated to the investements in water purification facilities (9,37%). In 2006 half the money of the overall investments in the environment protection was spent for the packaging waste, while the 32,6% of the overall investments in the environment protection was spent on a return packaging in the Studenac Factory because they turned to return packaging of 0,25 l. At the moment, there is a process of investment at the factory Ital Ice where  freezers are being built in which use ecologically friendly freon and this investment is worth 827.000 HRK.

On the principle of efficient waste management all waste produced iat Podravka has been disposed off in a safe and ecologically acceptable way  and processed, and only the community waste is being driven to the waste dump. The separation of waste and its separate collection have reduced  the dumped waste and increased the heat treated waste

The implementation of the new Bill of waste and its acts, Podravka has been taking care of all kinds of waste. The bigger part of waste, through  adequate managing, becomes a secondary raw material, and whose task is to preserve the natural resources

The courses of all waste are constantly monitored and of whidh there are updates and according to them constant improvements and corrections are being made. The waste control updates are regularly being given to the  County authority entities.

Podravka specially takes care of the environment protection and as a result of that Podravka is ahead of the existing Croatian law in this area because of their numerous solutions and it has a long tradition in the field of environment protection. At the beginning of the 1970s, Podravka had already built its first wastewater purifier. Among numerous concrete examples of implementing the guidelines of a socially responsible business managing in the field of environment protection we can name the complete renovation of the waste water purification system facility of Podravka factories in the industrial zone Danica (the results of purification of waste waters are on average 8-9 times better then the law standards for discharge in the system of public sewage), the building of a new collector for waste waters sewage of Podravka factories in the Industrial zone to systematic, to the systematic collection and disposal of all kinds of wate which cannot be considered to be municipal waste (paper, glass, PET, aluminium foil, wood, metal, waste oils, paints and paints packaging, electronic waste, etc.), the problem of the release of wastewaters from the hydrotransport of tomatoes into the coastal sea in the vegetable factory in Umag has been resolved by the construction of a new wastewater collection system which redirects wastewater into the municipal collector and decree has been adopted which prohibits the acquisition of equipment that harms the ozone layer (the purchase of new plants or equipment that contains ozone damaging substances has also been prohibited).

The Podravka Management Board has issued a Charter of rewarding for those who contribute with their ideas to the improvement of processes inside the company. With this act, the Board wants to motivate all the employees and reward them for their ideas and creativity. Any employee can suggest the improvement of business process, and the suggestions of the employees are evaulated by a specially formed professional Board.

Podravka  as a company has been investing in the education which is directliy the result of a mission that points out the employee is its biggest value. In today's hectic business environment knowledge is one of the crucial factors and carrier of survival and development of any company, and Podravka is really aware of that. As a confirmation to this fact there is data  that less than 4000 of employees have been involved in some kind of education or educational programme every year. All the employees have the possibility and an obligation to be involved in various forms of education and a considerable part consists of inner education

There is a possibility of financing further education (postgraduate and undergraduate studies), attending Podravka Managemeng Academy, various internall and external special courses, learning foreign languages and how to use computer. The process of internal transfer of knowledge has been  especially encouraged and that means that anyone who attends some kind of education is obliged to present their knowledge to the colleagues and the team. All the external education programmes we try to reinterpret internally.

The system of rewarding Podravka's employees was enriched in
2005 by introducing the srce (Heart) project. srce is the branded
project of corporate management of human resources and
the abbreviation stands for systemic development, defining goals
and their evaluation. The purpose of the project was to establish a
better system in setting company and individual goals, measuring
their realization and managing business development through defining individual actions. In 2006 the system wa successfully implemented to a majority of positions, while for all of the remaining positions the start of this evaluation process is planned in 2007. This is an individual evaluation of work contribution of employees based on several generic criteria by several evaluators, in order for the evaluation to be more objective. The efficiency
of all the employees is being evaluated and rewarded through the
mentioned processes based on one-year evaluation period.

Podravka accepts basic ethical principles and guidelines of ethical
behaviour of the Ethics Code in business which was determined
and made by the Assembly of Croatian Chamber of Economy since
23 May 2005. Ethics Code compiled in the same year determines
the basic business principles which have a direct influence on sustainable
development. First of all, they include: relation towards environment,
towards social community and toward public. According
to these principles, all employees are obliged to respect ecological
standards and are encouraged to build positive identity of Podravka
in communication with its external surroundings. Podravka and
its employees are also encouraged to participate in all charitable
institutions, sport clubs and similar organizations. With the purpose
of acting according to this Code, the Commission for enforcing
the Code was founded.

 The significance of work ability as an important economic factor in economy is confirmed at Podravka through constant elevation of the level of health and safety protection. Their systematic and constant improvement is a part of Podravka's preventive policy. Occupational safety specialists in collaboration with persons authorized by the employer continuously perform education on occupational safety within Podravka.

According to Article 62 of the Occupational Health and Safety Act, Podravka hires six nurses providing first aid in three dispensaries at different locations. In organizational wholes having up to 20 employees, 1 worker has been educated to provide first aid, and on every other 50 workers another one worker has been educated to provide first aid. Through this program of educating workers for providing first aid, 420 workers have been educated within takethree years.

For many years, Podravka has been successfully and continuously reporting the public and all the interested parties as a member WBCSD and one of the founders and members of  HR PSOR, about the activities and action having been taken and done in the area of socially responsible business managing and sustainable development, be it in annual reports or special reports on sustainable development. Podravka has recognized the importance of reporting on sustainability in order to provide better quality of life to today's and future generations and lowering the inadequate effects on the society.

The first separate Sustainable Development Report the Group Podravka published for the year 2003. The Second Podravka's  Sustainable Development Report was published in 2006 according to the Guidelines  of the Global Initiative for Reporting on Sustainability of 2002 and its content covered the business managing during the year 2005. At the moment we are about to present to the public the new Sustainable Report of the Group Podravka for the year 2006 which has been made in compliance with the latest Guidelines of the Global Initiative for Reporting on Sustainability in 2006. This Podravka''s Sustainable Development Report is the first in Croatia to be based on the B level of the application the GRI Guidelines for reporting on sustainability.

The most important aspects of the sustainable development that Podravka  is facing today:

• The care for healthy alimentation
  Our main stakeholders, customers, suppliers and community,
  are exposed to modern life style which includes fast rhythm of
  living, often accompanied by unhealthy and irregular diet. It is
  our goal as a food company to increase the level of awareness of
  how important healthy diet is as a foundation of healthy living and
  to offer our consumers high value and innovative products.
  Without a good relation and care for the consumers, Podravka surely
  would not be one of the leading companies in making modern
  trends in this region. We feel this is the only way to build trust and
  long term sustainable connection with all stakeholders.
• Optimizing the exploitation of natural resources and environment protection 
  It is Podravka's goal to increase the care for environment by optimizing the use of natural resources and by advancing the technologies and work processes. Care for the environment has the highest effect on the community in which Podravka operates,
  and together with the central and local authorities on individual
  markets on which it operates, it finds new ways for business more
  successful and sustainable for the environment.
• Caring for constant education of  the employees and society
  One of the important aspects contributing to Podravka's
  sustainability is the care for our employees which we encourage to continuously learn and aspire to professional excellence. Investment into education is one of our highest values and ground for differentiation, and it is therefore our goal to constantly improve educational structure of our employees but also of the community in
  which we operate. Here we try to apply active approach by developing our own education programs focused on long term learning and development. Podravka enables its employees to achieve their full potential, both individually and in teams, and the management sees the possibility to achieve business goals of the company in supporting and encouraging such aspirations.
• Caring of the members of the community with decreased working abilites
  Podravka is the company with a heart and as such it cares for its
  employees, especially for those with decreased working abilities.
  That way we show that Podravka is a socially responsible company
  and in cooperation with the community in which it operates,
  the unions and various NGO's, it tries to integrate employees of
  decreased working abilities into its standard operating procedures
  and that way contribute to their social inclusion.

Being an original Croatian company, Podravka has been working from its very beginning in compliance with the codes and principles of a socially responsible business managing, i.e. in compliance with the business principles of a long-term sustainable development. Following these principles, Podravka promotes and supports the appliance of the codes and demands of the socially responsible business managing in its everyday work and through all its activities and also the coordoniation of the economy with the development goals of the community and the environment protection for the generations to come. Podravka's mission is to run business in the best interest of clients and consumers and thus within the Croatian Business Council for Sustainable Development  (HR PSOR) concrete measures of influencing the existing regulations, exchange of experiences and encouriging the members of the HR PSOR are being undertaken in order to improve the social benefits of the community. Besides that, Podravka has been present for a long time on a global level as a full member of the World Business Council for Sustainable Development - WBCSD), the roof world organization which promotes and encourages the implementation of the codes and principles of the sustainable development in the world economy

In Croatia there is still a significant lack of adequate measures for encouriging the socially responsible business managing, and the low level of  the attention is devoted to the policies which should ensure the encouriging area for the development of the social responsiblity of the company. In the beginnings of the 2000-ies the social responsibilty of a company in Croatia has begun the main subject. Thus, although many companies consider the concept and practice of social responsibilty of  a company as a relatively new area in Croatia, the knowledge and implementation of a socially responsible company and environment protection together with the sustainable economic growth and development have been known in the past.

The impact that the companies have on the development of the society as a whole and the environment respectively makes them one of the most responsible participants in creating the future according to men. The primary role of a company is to make profit and wealth through its activities  is being added by new demands for integration of the principles of socially responsible business managing in their strategy. The integration of these principles is voluntary and represents the striving of the company to widen the legal framework through its activities concerning the economic, social and environmental effect. In that way, these companies add more value to their products and services by using less resources, producing less waste and less pollution of the environment

As part of EU, the European Commision defines the social responsibility in its Guidelines for the policy of social repsonsibility of a company as a concept in which a company voluntarily integrate the concern for the social issues and the environment protection into their business acitivities and relationships with owners, shareholders, employees, consumers, suppliers, the Government, the media and the entire community. Being socially responsible means being positive and proactive, to work not only in the frames of legally abiding expectations, but to go further in their endeavours which are regulated by laws.

The significance of social responsibility is indisputable in modern business terms and takes an important place in the management of modern companies, regardless of their size and value. Today, many international and domestic business practices confirm that good engagement in the area of social responsibility can generate many benefits for companies.

Sustainable development is a complex term which includes the environmental protection component, the social component, and the economic component. The idea of sustainable development was created by linking the different impacts of production and development to the inevitable influence on the broader environment and it consists of balancing between the economic growth, the progress of society and the concern for the environment. The goal of sustainable development is "to meet the needs of the present days and not to endanger the ability of future generations to satisfy their own needs."

"Socially responsible business managing" is known in global business sector as "socal responsiblity of a company". The term itself and the practice of the social responsibility of a company in the broadest sense relate to the overall range of the company activities and all the relationships that the company establishes while doing that. The basis of this statement lies in the fact  that the company takes the full responsibility for its activities which  surpass the area of only economic interests. That is to say, what a certain company produces, how it influences the environment while doing that, how it  employs, educates and influences on the development of its own people,  how it invests in the community and respects the human and working rights, how it buys and sells on the market - all of that together defines the overall impact of this company on the society. The essence of social responsibility consists of maintaing good relationship not only with the consumers but also with all the parties interested in business managing of the company.