Statement by the Podravka d.d. Management Board on the alleged options of changes in ownership structure

Relating to the recent information in the media about changes in the Podravka ownership structure, we would like to stress that neither the Supervisory Board nor the Management Board have recently considered the options of changing the management structure, except for a possible increase in the employees’ stock ownership plan (ESOP).

Due to the fact that Podravka d.d. shares are listed in the 1st quotation of the Zagreb Stock Exchange, and to the overall significance of Podravka for the country’s economy, we have no doubts that the Government of the Republic of Croatia, in deciding about initiating the process of reducing the stake in our ownership structure, will do so in cooperation with the company’s management, including the Supervisory Board and Management Board of Podravka.

In the first quarter of 2004, and also continuously during the last nine months, the Podravka Group has been operating very successfully, and the results exceed the planned amounts. We expect a continuation of this positive trend in the second quarter, since the Group’s primary task is to meet the goals set out in the business plan.