Annual Report for the year ended
31 December 2024
This version of the Annual Report is a translation from the original, which was prepared in the Croatian language. All possible
care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of
interpretation of information, views or opinions, the original language version takes precedence over translation.
Granolio d.d., Zagreb
Contents
Annual report of the Management Board on the operations and state of the Company for the year 2024 ............... 1
Statement on the application of the Corporate Governance Code…….....................................................................7
Responsibility for the annual financial statements .................................................................................................. 12
Independent Auditor's Report ................................................................................................................................. 13
Unconsolidated Statement of Comprehensive Income ........................................................................................... 21
Unconsolidated Statement of Financial Position ..................................................................................................... 22
Unconsolidated statement of Changes in Equity .................................................................................................... 24
Unconsolidated Statement of Cash Flows .............................................................................................................. 25
Notes to the unconsolidated annual financial statements……………………………………..………………..............26
Granolio d.d., Zagreb
1
Management Report
General information
registration number (MBS) is 080111595. The name of the company has not been changed .
The registered seat of the Company is in Zagreb, Budmanijeva 5 .
The Company has a General Assembly, a Supervisory Board, and a Management Board.
Members of the Management Board:
Hrvoje Filipović, President
Vladimir Kalčić, Member
Davor Mitrović, Member
Members of the Supervisory Board:
Franjo Filipović, President
Jurij Detiček, Deputy President
Davor Štefan, Member
Tihomir Osmak, Member
The total amount of the Company's share capital as of 31 December 2024 is EUR 2,523,914 and is
divided into 1,901,643 ordinary shares with a nominal value of EUR 1.327. The shares are listed under
the symbol GRNL and have been listed on the official market of the Zagreb Stock Exchange since 23
March 2015.
The majority shareholder of the Company is Mr Hrvoje Filipović, who held 58.11% of the ownership
capital on 31 December 2024. On the same day, the ten largest shareholders of Granolio held 95.77%
of the capital
The Company's primary activity is the production and trade of agricultural products and livestock. As
part of its business system, on 31 December 2024, the Company had six active business units, three of
which were production centres: the Farina, Kopanica and Tena mills, for the production, packaging,
Business unit Bjeliš is a silo used for drying and storing grain.
The business unit in Osijek is responsible for storing, selling and shipping raw materials for sowing,
selling grains and oilseeds, and managing sales runways.
The Granolio business unit, located in Zagreb, provides logistical, management, accounting and IT
support to the Company's operations.
In addition to ISO and HACCP standards, the Farina mill is subject to IFS standards, which gives the
Company the ability to export flour to European Union countries, while the Kopanica mill, and the Tena
mill are subject to ISO and HACCP standards.
The company markets eight brands of flour: Farina, Farina Speciale, Mlin Kopanica, Ekoklas, Mlineta,
No No gluten-free flour and Belje flour and Tena flour
Due to the focus on product quality and delivery and building long-term relationships with customers,
Granolio produces private labels for most of the leading retail chains in the Republic of Croatia. The
Company currently produces flour for 15 private brands.
Granolio d.d., Zagreb
2
Management Report (continued)
General information (continued)
Group’s mills production capacities as of 31 December 2024 are shown in the following table:
Mills production capacity as of 31 December 2024:
Mill
ton/24 hours
Farina
320
Kopanica
230
Tena
180
730
Subsidiaries
On 31 December 2024, the Company held 100% of the shares in the company Zdenačka farma d.o.o.
The dominant influence in decision-making was exerted in the company Zdenka - mliječni proizvodi
d.o.o. which has been consolidated into the Granolio Group since 2011.
The Company has a minority share in the company Žitozajednica d.o.o.
Granolio's ownership shares in these subsidiaries on 31 December 2024 are shown in the following
organizational chart:
The organizational structure of the Granolio Group on 31 December 2024
Significant business events in the current accounting period
2024 was marked by the successful acquisition of additional milling operations, the continuation of the
war in Israel and Ukraine, which continued to increase the cost of raw materials and production costs.
The conflicts of war contributed to negative consequences for the entire global economy. Despite very
unfavourable circumstances and the impact of the crisis on global and local flows of goods, long-term
and strong relationships with suppliers contributed to stable business. The company managed to avoid
interruptions or significant delays in production and ensured an uninterrupted supply of the market with
demanded products.
According to the CNB, core inflation in Croatia is expected to slow down from 4.0%. to 3.5% in 2025.
Granolio d.d.
Zdenačka farma
d.o.o.
100%
Zdenka mliječni
proizvodi d.o.o.
50%
Granolio d.d., Zagreb
3
Management Report (continued)
Significant business events in the current accounting period (continued)
The Company will continue to be focused on achieving business goals, but also on creating a foundation
that will bring good results in the coming years, i.e. long-term successful operations and growth.
The Company regularly settles its liabilities to financial institutions and continues to repay liabilities in
accordance with the pre-bankruptcy settlement.
Analysis of the 2024 business performance
in EUR ‘000
Granolio d.d.
1-12 2024
1-12 2023
change
Operating income
61.794
54.065
7.730
14%
Operating expenses
58.148
51.845
6.304
12%
EBIT
3.646
2.220
1.426
64%
margin %
6%
4%
EBITDA
4.723
3.269
1.459
45%
margin %
8%
6%
Net financial result
(314)
224
(537)
240%
Net result for the period
2.820
1.970
850
43%
in EUR ‘000
Granolio d.d.
31.12.2024
31.12.2023
change
Net assets (capital and reserves)
24,205
21,209
2,816
13%
Total debt
23,172
10,726
12,446
115%
Cash and cash equivalents
276
955
(679)
(71%)
Loans given, deposits and similar*
2,942
2,271
671
30%
Net debt
19,954
7,501
12,445
165%
Net debt/ EBITDA
4,22
2,29
EBITDA for the last 12 months
4,723
3,269
1,459
45%
* Financial loans, securities and deposits provided.
Total debt reported on 31 December 2024 includes all financial liabilities to financial institutions and non-
financial entities.
The Company's total debt increased due to new long-term debt for the purpose of acquiring additional
milling operations. The Company regularly settles existing liabilities under credits and loans.
Granolio d.d., Zagreb
5
Management Report (continued)
Analysis of the 2024 business performance (continued)
Employee expenses are 30% higher than in the previous year as a result of the acquisition of additional
milling operations.
Total capital investments in tangible assets in 2024 amounted to EUR 13,558 thousand (2023: EUR
2,072 thousand). Acquisitions relate mainly to the acquisition of additional milling operations (EUR
12,910 thousand).
Net financial result in 2024 amounted to EUR 314 thousand (2023: EUR 224 thousand).
Significant business events after the accounting period and the Company's strategic objectives
The Company's Management Board undertakes all necessary actions in order to minimize the newly
created risks.
The completed investment in the construction of solar power plants at all major consumers of electricity
in the Granolio Group will enable a reduction in consumption by about 30 percent and reduce the impact
of a possible further increase in electricity prices on the Company's operations.
The required amount of raw material is secured until the new harvest, and the packaging until the end
of the year, which reduces the risk of shortages and eventual procurement at high prices.
The Company will respond to the overall increase in operating costs by increasing the prices of its
products.
As far as capital investments are concerned, all plants are technologically advanced to the maximum
and there is currently no need for capital investments.
The Company expects to continue to operate successfully in 2025 and beyond.
Employees
In 2024, the Company had 177 employees based on working hours (2024: 163 employees). The
structure of employees as of 31 December 2024, according to the criteria of professional qualifications
and gender, is shown in the following graphs:
Skilled
workers
4%
Unskilled
workers
11%
High school
degree
61%
Unversit
y degree
20%
College
degree
4%
Employee structure by
professional qualification
Male
73%
Female
27%
Employee structure by gender
Granolio d.d., Zagreb
6
Management Report (continued)
Research and Development
In the observed period, the Company had no research and development projects.
Purchase of own shares
Until the date of issuance of this Management Report, as of 30 September 2024, the Company acquired
500 of its own shares in total amount of 3.500 euros for the purpose of rewarding employees.
Environmental Protection
In the area of environmental protection, the Company implements complete and systematic solutions
and establishes environmentally friendly production processes.
Risks
The risks faced by the Company are explained in detail in the Notes to the annual financial statements.
Granolio d.d., Zagreb
7
Statement on the application of the Corporate Governance Code
The statement on the application of the Corporate Governance Code was drawn up based on the
provisions of Article 272.p of the Companies Act.
As a company whose shares are listed on the Official Market of the Zagreb Stock Exchange, Granolio
d.d. (hereinafter referred to as "the Company") in 2024 applied the recommendations of the Corporate
Governance Code, prepared by the Croatian Financial Services Supervisory Agency (HANFA) and the
Zagreb Stock Exchange d.d., in force from 1 January 2020, with deviations from some recommendations
and guideline of the Code.
Deviations from the recommendations of the Code are limited to the provisions of the application of
which is not practical or enforceable at a given moment given the circumstances of the business or is
not foreseen given the legal framework in which the Company operates.
Related to the recommendations contained in Chapter 1 of the Code, during 2024 the Company
published the Statute and part of the internal acts prescribed by the Code on its website and plans to
take actions to expand the number of acts published on its website.
Related to the recommendations contained in Chapter 2 of the Code, the Company plans to make
available the Policy for managing conflicts of interest on the Company's website during 2025. The
Company has not adopted special procedures for approving and publishing transactions between
members of the Management Board or the Supervisory Board and the Company, but it plans to adopt
them during 2025 and currently applies the current regulations and policies for the management of
conflicts of interest governing that area.
Related to the recommendations contained in Chapters 3 and 4 of the Code, the Supervisory Board has
not adopted a formal procedure for appointment to the Company's Management Board but plans to
adopt it during 2025. The Supervisory Board, which consists of male members, in the term that began
before 2020, set as a goal the percentage of female members of the Supervisory Board and the
Management Board, which must be achieved in the next five years, but the detailed plan is still being
developed, and the set goal that in in the five-year period until 2025, at least one member of the
Supervisory Board will be a woman, in 2024 was not achieved. In this regard, given that all members of
the Supervisory Board who were elected to the Company's Supervisory Board in 2022 were also
members of the previous Supervisory Board. Data from Art. 16 of the Code were not made available
among the materials for the General Assembly and were not published on the Company's website, and
also no act was adopted that determined the expected minimum time load of each member of the
Supervisory Board at the time of his appointment. The Supervisory Board of the Company has four
members, two of whom are independent. The Supervisory Board of the Company did not establish a
nomination committee and a remuneration committee for the reason that, according to the provisions of
the Statute, the Supervisory Board of the Company has from three to five members and performs tasks
within the competence of the aforementioned committees. The function of the audit committee, in
accordance with the Audit Act, is performed by the established Audit Committee composed of three
members, who are also members of the Company's Supervisory Board, of which one member is
independent, and the description of the tasks of the established Supervisory Board (Audit Committee)
is planned to be published by the Company on websites during 2025. The Supervisory Board did not
evaluate its effectiveness and the individual results of its members, as well as the established
committees (Audit Committee) in accordance with the Code, but it is preparing to do the same for 2025.
In relation to the recommendations contained in Chapter 5 of the Code, the Statute and/or internal acts
of the Company do not contain formal rules governing responsibilities and reporting procedures at the
level of the leading company and subsidiary companies, but the financial managers of the subsidiary
companies are responsible for reporting. No formal act was adopted on the profile of the administration
for the effective execution of the administration's responsibilities, given that the administration has been
operating effectively in the majority of its current composition for many years. The Management did not
evaluate its own effectiveness and the effectiveness of individual members in 2024, but it is preparing
to do the same in relation to its work in 2025.
Granolio d.d., Zagreb
8
Statement on the application of the Corporate Governance Code (continued)
In relation to Chapter 6 of the Code, as stated above, the remuneration committee was not established,
and the remuneration policy for the members of the Management Board was adopted in 2020 and was
approved at the General Assembly of the Company. The policy of receipts for members of the
Company's Management Board stipulates that a member of the Management Board has no right to
payment of receipts in shares, nor does it provide for delayed payment of part of the receipts or
circumstances in which part of the receipts of a member of the Management Board would be withheld
or their return would be requested. The remunerations of the president and members of the Supervisory
Board of the Company do not provide for special remuneration for membership in the established
committees of the Supervisory Board. The Decision on the remuneration of the Supervisory Board has
been made available on the Company's website, while the Decision on the remuneration of the
Management Board members is planned to be made available in 2025.
Related to the recommendations from Chapter 7 of the Code, internal business control and risk
management is partly performed through the activities of the Controlling business function, and partly
through the activities of the Company's management body and external auditors and certification
companies. Also, not all formal policies and procedures from this chapter of the Code were adopted in
2024, but the Company plans to adopt them in 2025.
The Company applies the recommendations from Chapter 8 of the Code, except in terms of Art. 72, as
already mentioned, and the information from Art. 74 of the Code were partially published.
Regarding the recommendations from Chapter 9 of the Code, asking questions directly to the President
of the Management Board and the President of the Supervisory Board is possible through the
Company's contact email, which is published on the Company's website, while the Company's Statute
provides for voting at the Company's Assembly by picking up ballots or submitting ballots. Due to
personal justified reasons, the Deputy Chairman of the Supervisory Board was not present at the
General Assembly of the Company in 2023.
With regard to the recommendations from Chapter 10 of the Code, in 2025 the Company plans to carry
out the activities defined by the adopted policies and carry out the identification of key stakeholders.
Detailed explanations related to the non-application or deviation from certain recommendations of the
Code in 2024 were presented by the Company in the annual questionnaire, which is an integral part of
the Code, and which is submitted to the Zagreb Stock Exchange d.d. together with the annual financial
statements due to public disclosure.
Internal audit and risk management
Although the Company does not have an organized internal audit function, internal business supervision
and risk management are partly performed through the activities of the business function of Controlling.
Also, the main responsibilities of the Audit Committee of the Supervisory Board include monitoring the
financial reporting process and submitting recommendations or proposals to ensure its integrity
regarding financial reporting, as well as monitoring the effectiveness of the internal quality control system
and risk management system.
In addition to the recommendations of the Code, the Management and the Supervisory Board of the
Company increased efforts in order to establish adequate corporate governance and transparent
information, respecting the structure and organization of the Company, its strategy and business goals,
the distribution of powers and responsibilities with special emphasis on effective procedures for
determining, measuring and monitoring and reporting about risks in business, as well as the
establishment of appropriate internal control mechanisms.
The Company has prepared separate and consolidated financial statements for the Granolio Group,
which consists of Granolio d.d. and the subsidiary Zdenačka farma d.o.o. which is fully owned by
Granolio d.d. and for the subsidiary Zdenka - mliječni proizvodi d.o.o., where the Company is a co-
owner.
Granolio d.d., Zagreb
9
Statement on the application of the Corporate Governance Code (continued)
Si g n i f i c a n t s h a r e h o l d e r s a n d l i m i t e d s h a r eh o l d e r s ’ ri g h t s
In the ownership structure of the Company, the majority shareholder with 1,105,000 shares and
58.10765% of the share capital and voting rights at the general assembly is Hrvoje Filipović.
Member of the Management Board Davor Mitrović is the owner of 3,676 shares, which is 0.19% of the
share capital and voting rights, member of the Management Board Vladimir Kalčić is the owner of 3,000
shares, which is 0.15776% of the share capital and voting rights, and the member of the Supervisory
Board, Mr. Tihomir Osmak, the holder is 3,000 shares, which constitutes 0.15776% of the share capital
and voting rights. Other members of the Supervisory Board and the Management Board are not holders
of Company shares.
All the shares have been fully paid in, and there are no restrictions to the rights arising from the shares.
Rules for the appointment and revocation of the Supervisory Board
The Supervisory Board of the Company consists of three or five members. The exact number of the
Supervisory Board members is determined by the decision of the Company’s shareholders at their
General Assembly.
As long as there is a prescribed obligation, one member of the Supervisory Board is a representative of
employees, who is appointed and revoked as specified in the Labour Act. One member of the
Supervisory Board is appointed and revoked directly by Hrvoje Filipović, as long as he holds at least
25% of the total number of issued ordinary shares of the Company.
Other Supervisory Board members are elected and revoked by the Company’s General Assembly,
based on the proposals of shareholders who individually or collectively represent at least one twentieth
of the share capital of the Company at the time of the election.
Rules for the appointment and revocation of the Management Board,
amendments to the Statute and special powers of the Management Board
Pursuant to the Statute of Granolio d.d., the Management Board consists of three to seven members,
depending on the decision adopted by the Supervisory Board. The members and President of the
Management Board are appointed by a decision of the Supervisory Board for a mandate up to five years,
with the possibility of re-appointment. The Supervisory Board may issue a decision revoking a member
or the President of the Supervisory Board for a relevant reason. The Statute can be amended only by a
decision adopted in the General Assembly by majority vote as defined for in the applicable legislation or
the Statute.
The affairs and operations of the Company are managed by the President and members of the
Management Board based on the principle of segregation of duties and responsibilities for individual
areas of operations or scope of responsibilities. The work and segregation of duties and responsibilities
are regulated by the Rules of Procedure for the Management Board, adopted by the Management Board
with the consent of the Company’s Supervisory Board. The President of the Management Board
represents the Company solely, and the Management Board members represent the Company jointly
with the President of the Management Board or another Management Board Member. The Company’s
Management Board must receive a consent from the Supervisory Board for, inter alia, deciding about
the overall maximum indebtedness of the Company for a particular business year, maximum exposure
on loans granted to related companies, maximum exposure of the Company with respect of guarantees,
sureties and other security instruments issued to third legal and natural persons, about establishing
and/or discontinuing any directly related companies, branch offices and business units, about
purchasing or selling the shares in other companies in Croatia and abroad, about any fixed asset
investments in excess of EUR 1,990,842.13, acquisition and sale of property with a net carrying value
higher than EUR 663,614.02 ; establishing a lien on the property for purposes other than disposal in
the ordinary course of business and conclusion of contracts worth in excess of EUR 663,614.02, with
the exception of product, goods, energy, short-term debt and service sales contracts as part of the
Company’s ordinary business; decisions that affect the reputation of the Company and in all other cases
determined by the Supervisory Board or the General Assembly.
Granolio d.d., Zagreb
10
Statement on the application of the Corporate Governance Code (continued)
Composition and operation of the Supervisory Board
Pursuant to the Companies Act and the Company’s Statute, the principal responsibilities of the
Supervisory Board comprise permanent supervision of the Company’s operations and appointing and
revoking the President and members of the Management Board. The composition of the Supervisory
Board and changes of its members are presented in the accompanying financial statements.
In 2024, the Supervisory Board held 6 sessions, which were attended by all members of the Supervisory
Board. In 2024, the Audit Committee held one session attended by all committee members.
The Supervisory Board received reports on the Company's operations and organizational and other
changes related to the Company's operations on a regular and timely basis, according to the established
standard form and content, from the Company's Management Board. The Supervisory Board assessed
the cooperation between the Supervisory Board and the Management Board, as well as the adequacy
of the support and information it received from the Management Board during 2024, as satisfactory.
Composition and operation of the Management Board
Pursuant to the Companies Act, the Company’s Statute and the Rules of Procedure for the Management
Board, the principal power of the Management Board comprises managing the operations and affairs of
the Company and representing the Company before third parties. In addition, the Management Board
is charged with the responsibility to undertake, autonomously or with a prior consent of the Supervisory
Board, any actions and adopt any decisions it considers necessary for effective management and control
of the Company’s operations. This, inter alia, implies adopting Company by-laws, decisions on the
business and development plans of the Company, reporting to the Supervisory Board about the
business performance and position of the Company, establishing bodies or boards of the Company, as
well as deciding on all other issues for which the Management Board is responsible according to the
Statute or another by-law, and those issues that, under the positive law or Statute, do not fall within the
area of responsibilities of another corporate body of the Company.
Description of the work of the General Assembly
At the General Assembly, the Company shareholders may participate and vote themselves or through
their proxies, which applies to the shareholders registered at the Central Depositary and Clearing
Company 21 days before the Assembly. Each ordinary share entitles to one vote at the General
Assembly. The Company shareholders may participate in a General Assembly in person or through their
representatives, i.e. proxies. A General Assembly is convened in cases specified by law and the
Company’s Statute. The Assembly is convened by the Company’s Management or Supervisory Board
when it is necessary for the benefit of the Company. The invitation and the agenda are published at
least one month before the date of the General Assembly. Any propositions of the shareholders which
counter those of the Management Board and/or Supervisory Board, containing the full name of the
proposing shareholder and his or her explanation, or propositions of the shareholders regarding the
appointment of the Company’s auditor must be received by the Company at least 14 days prior to the
General Assembly, excluding the date of receipt of the counterproposition. Shareholders representing
at least one twentieth of the share capital of the Company may require an issue to be included in the
General Assembly agenda, by providing an explanation and the decision proposal. The request must
be received by the Company at least 30 days in advance of the General Assembly, excluding the day
of the request receipt.
The Company's General Assembly may validly work and make decisions if at least 50% of the shares
with voting rights are represented at the meeting, and all decisions on proposed agenda items are made
by a simple majority of the votes cast, except for decisions made by a qualified majority, i.e. votes
representing three quarters of the share capital represented at the General Assembly. Each share gives
the right to one vote at the General Assembly.
Granolio d.d., Zagreb
11
Statement on the application of the Corporate Governance Code (continued)
The General Assembly is chaired by the President or Deputy president in case of the President’s
absence. The Chairperson and the Deputy President are elected by the General Assembly for a term of
4 (four) years based on the proposal of the Supervisory Board. The President chairs the Assembly and,
before opening the discussion on the agenda items, determines the validity of proxies and the quorum.
The President determines the sequence of the individual agenda item discussions, the sequence and
manner of voting on the individual proposals, as well as on all procedural matters not regulated by law
or the Statute. In addition, the President signs decisions adopted at the Assembly, the list of the present
shareholders, the manner of voting and the voting results, makes other required notes, communicates
on behalf of the Assembly with other bodies of the Company and third parties in cases stipulated by law
and the Statute and performs other tasks, duties and responsibilities specified by law and the Statute.
The Members of the Management Board of Granolio d.d. in 2024 were the following:
President of the Management Board: Hrvoje Filipović (reappointed on 24 February 2021)
Members of the Management Board: Vladimir Kalčić (reappointed on 24 February 2021)
Davor Mitrović (appointed for the first time on 28 April 2022)
The Supervisory Board of Granolio d.d. in 2024 comprised:
President of the Supervisory Board: Franjo Filipović (reappointed on 6 June 2022)
Deputy President of the Supervisory Board: Jurij Detiček (reappointed on 6 June 2022)
Members of the Supervisory Board: Davor Štefan (reappointed on 6 June 2022)
Tihomir Osmak (appointed for the first time on 6 June 2022)
This Statement on the Application of the Corporate Governance Code is an integral part of the Annual
Report on the Company's status for 2024.
Tel: +385 1 2395 741
Fax: +385 1 2303 691
E-mail: bdo-croatia@bdo.hr
BDO Croatia d.o.o.
10000 Zagreb
Radnička cesta 180
Registrirano kod Trgovačkog suda u Zagrebu pod brojem 080044149
OIB 76394522236
13
INDEPENDENT AUDITOR'S REPORT
To the shareholders of Granolio d.d., Zagreb:
Report on the audit of the unconsolidated annual financial statements
Opinion
We performed an audit of the annual unconsolidated financial statements of Granolio d.d., Zagreb,
Budmanijeva 5 (''the Company''), which include the Unconsolidated Statement of financial position as
at 31 December 2024, Unconsolidated Statement of comprehensive income, the Unconsolidated
Statement of cash flows and the Unconsolidated Statement of changes in equity for the year then
ended, as well as the accompanying Notes to the unconsolidated financial statements, including the
information on significant accounting policies.
In our opinion, the accompanying annual unconsolidated financial statements present a true and fair
view of the Company's financial position as of 31 December 2024 and its financial performance and
cash flows for the year then ended, in accordance with the International Financial Reporting Standards
adopted by the European Union (“IFRS”).
Basis for Opinion
We conducted our audit in accordance with the International Auditing Standards (ISAs). Our
responsibilities under those standards are further described in our Independent Auditors' report under
section Auditors' responsibilities for the audit of the unconsolidated annual financial statements. We
are independent of the Company in accordance with the Code of Ethics for Professional Accountants
(IESBA Code), as well as in accordance with the ethical requirements relevant to our audit of the
financial statements, and we have fulfilled our other ethical responsibilities in accordance with the
IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 3.2. “Basis of preparation” to the unconsolidated financial statements,
which indicates that, based on the submitted request for pre-bankruptcy proceedings of the Company,
the Commercial Court in Zagreb on 28 December 2018 adopted the final Decision on the Company’s
pre-bankruptcy settlement with its creditors. The Company continues to carry out measures included
in the restructuring programme of the Company. The Management Board of the Company believes that
the Company can continue its operations assuming a going concern principle. Our opinion is not
modified in respect of this matter.
Emphasis of Matter
The Company has prepared the annual consolidated financial statements of the Company, and in order
to better understand the operations of the Company as whole, users should read the annual
consolidated financial statements of the Company related to these annual unconsolidated financial
statements.
Key audit matters
Key audit matters are those matters that, in our professional judgment, are of most significance in
our audit of the unconsolidated annual financial statements for the current period. These matters
were addressed in the context of our audit of the unconsolidated annual financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
BDO Croatia d.o.o.
14
INDEPENDENT AUDITOR'S REPORT (continued)
Report on the audit of the unconsolidated annual financial statements (continued)
Key audit matter
We have determined the matter described below as the key audit matter to be communicated in our
Independent Auditor’s report:
Key audit matter
How we addressed the key audit matter
Revenue recognition
In 2023, the Company has stated sales revenues in the
amount of EUR 52,517 thousand (for the year ended 31
December 2022, EUR 62,404) in its unconsolidated
Statement of comprehensive income.
Sales revenue includes:
• Sales revenue – domestic
• Sales revenue – foreign
• Revenue from services
Revenue comprises the fair value of the consideration
received or receivable for the sale of goods or services
in the ordinary course of the Company's activities.
Revenues are stated in amounts less value added tax,
quantity rebates and sales discounts.
In accordance with International Financial Reporting
Standard 15, Sales Revenue is recognized when the
Company delivers goods to a customer, when it no
longer has the influence on the management of the
goods and when there is no outstanding liability that
could affect the acceptance of the product by the
customer.
Delivery is made when the products are shipped to a
specific location; the risks of loss are transferred to the
customer and when one of the following is determined:
the wholesaler accepts the products in accordance with
the contract, or the deadline for acceptance of products
has expired or the Company has objective evidence that
all acceptance criteria are met.
Considering the significance of revenues presented in
the Statement of Comprehensive Income and the risk of
recognizing them, we concluded that the occurrence,
accuracy and completeness of revenues and their
distribution in the correct reporting period is a key audit
matter.
See notes 3.8 “Revenue Recognition” and 6 “Sales
revenue” in the accompanying annual unconsolidated
financial statements.
Our audit procedures related to this matter
included, but were not limited to:
- Gaining an understanding of the sales process
by interviewing key sales personnel;
- Gaining an understanding of key controls
related to the recognition of sales revenue;
- Examining the design and effectiveness of key
controls related to occurrence and accuracy of
the revenue recognition;
- Performing substantive testing to verify the
consistency, accuracy, completeness and
timeliness of revenue recognition;
- Comparing the external confirmations
received of the amounts of outstanding trade
receivables at the reporting date with the
balances shown in the Company's books of
accounts at the same date;
- Assessing the compliance of the policy for
recognizing revenue from sales with
International Financial Reporting Standard 15
– Revenue from Contracts with Customers;
- Assessing the adequacy of the disclosures
related to the recognition of revenue from
sales in accordance with International
Financial Reporting Standard 15 – Revenue
from Contracts with Customers.
BDO Croatia d.o.o.
15
INDEPENDENT AUDITOR'S REPORT (continued)
Report on the audit of the unconsolidated annual financial statements (continued)
Other information
Management Board is responsible for other information. Other information includes the Management
Report and the Statement of Application of the Corporate Governance Code but does not include the
annual unconsolidated financial statements and our Independent Auditor's Report thereon. Our
opinion on the annual unconsolidated financial statements does not include other information.
In relation to our audit of the annual unconsolidated financial statements, it is our responsibility to
read other information and consider whether the other information is materially inconsistent with the
annual unconsolidated financial statements or our audit findings or otherwise appear to be materially
misstated.
Regarding the Management Report and the Statement on the Application of the Corporate Governance
Code, we also carried out the procedures required by the Croatian Accounting Act. These procedures
include considering whether the Company’s Management Report has been prepared in accordance
with Article 21 of the Accounting Act and whether the Statement on the Application of the Corporate
Governance Code has been prepared in accordance with Article 22 of the Accounting Act.
Based on the procedures performed, to the extent we are able to assess, we report that:
1. The information in the attached Management Report and Statement on the Application of the
Corporate Governance Code is harmonized, in all significant respects, with the attached
unconsolidated annual financial statements;
2. The attached Management Report is compiled in accordance with Article 21 of the Accounting Act;
and
3. The attached Statement on the Application of the Corporate Governance Code includes the
information defined in Article 22 of the Accounting Act.
Based on our knowledge and understanding of the Company's operations and the environment in which
it operates, which we acquired during our audit, we are required to report whether we have identified
material misstatements in the Management Report and Corporate Governance Statement received up
to the date of this Independent Auditor's Report. In that sense, we have nothing to report
Responsibilities of the Management Board and those charged with governance for the
unconsolidated annual financial statements
Management Board is responsible for the preparation of unconsolidated annual financial statements
that give a true and fair view in accordance with IFRSs, and for those internal controls that the
Management Board determines are necessary to enable the preparation of unconsolidated annual
financial statements that are free from material misstatement due to fraud or error.
In preparing the unconsolidated annual financial statements, Management Board is responsible for
evaluation of the Company's ability to continue operations assuming going concern principle,
disclosure, if applicable, of issues related to going concern, and using accounting based on going
concern principle, unless the Management Board intends to liquidate the Company or discontinue its
business or there is no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the financial reporting process
established by the Company.
BDO Croatia d.o.o.
16
INDEPENDENT AUDITOR'S REPORT (continued)
Report on the audit of the unconsolidated annual financial statements (continued)
Auditor’s Responsibility for the audit of unconsolidated annual financial statements
Our goals are to obtain reasonable assurance about whether the unconsolidated annual financial
statements, as a whole, are free from material misstatement as a result of fraud or error, and to issue
an Independent Auditors’ Report that includes our opinion. Reasonable assurance is a higher level of
assurance, but this is no guarantee that an audit performed in accordance with IAS will always detect
a material misstatement when it exists. Misstatements may result from fraud or error and are
considered as important, if it can reasonably be expected that, individually or in aggregate, they
affect the economic decisions of users made based on these unconsolidated annual financial
statements.
As an integral part of the audit report in accordance with ISA, we make professional judgments and
maintain professional scepticism throughout the audit process. We also:
• identify and assess the risks of material misstatement of the annual unconsolidated financial
statements due to fraud or error, design and perform audit procedures in response to those
risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of non-detecting a material misstatement of fraud is greater than the risk
of error, as fraud may involve collusion, forgery, intentional omission, misrepresentation or
circumvention of internal controls.
• acquire an understanding of internal controls relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Company's internal controls.
• assess the appropriateness of the accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
• conclude on the appropriateness of the accounting basis used based on the going concern
principle used by the Management Board and based on the obtained audit evidence, we
conclude on whether there is significant uncertainty regarding events or circumstances that
may create significant doubts about the ability to continue operating for an indefinite period
of time. If we conclude that there is significant uncertainty, in our independent auditors’
report we are required to call our attention to related disclosures in the unconsolidated
annual financial statements or, if these are inappropriate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our independent
auditors’ report. However, future events or conditions may cause the Company to discontinue
its operations on a going concern basis.
• evaluate the overall presentation, structure and content of the unconsolidated annual
consolidated financial statements, including disclosures, as well as whether the annual
unconsolidated financial statements reflect the transactions and events which they are based
on in a way that achieves a fair presentation.
BDO Croatia d.o.o.
17
INDEPENDENT AUDITOR'S REPORT (continued)
Report on the audit of the unconsolidated annual financial statements (continued)
Auditor’s Responsibility for the audit of unconsolidated annual financial statements (continued)
We communicate with those charged with governance, among other issues, the intended scope and
timing of audit and important audit findings, including any significant deficiencies in internal controls
identified during our audit.
We also make a statement to those charged with governance that we have complied with the relevant
ethical requirements regarding independence and that we will communicate with them any
relationship and other matters that may reasonably be considered to affect our independence as well
as, where applicable, on related safeguards.
Among the issues communicated to those charged with governance, we identify those issues that are
the most important in auditing the annual unconsolidated financial statements of the current period
and therefore present the key audit matters.
We describe these matters in our Independent Auditor's Report, unless the law or regulation prevents
the matters from being publicly disclosed, or when we decide, in extremely rare circumstances, that
the matter should not be reported in our Independent Auditors’ Report because the negative
consequences of the disclosure could reasonably be expected to outweigh the benefits of public
interest from such communication.
Statement on other legal requirements
On 13 June 2023, the General Assembly of the Company appointed us to audit the annual
unconsolidated financial statements of the Company for the year 2023.
As of the date of this report, we are continuously engaged in performing statutory audits of the
Company from the audit of the annual unconsolidated financial statements for the year 2019 to the
audit of the annual unconsolidated financial statements of the Company for the year 2023, which is
a total of five years.
In the audit of the Company's annual unconsolidated financial statements for the year 2023, we
determined the material significance for the annual unconsolidated financial statements as a whole
in the amount of EUR 788 thousand, which represents approximately 1.5% of the realized sales revenue
for the year 2023.
We have chosen sales revenue as a measure of materiality because we believe it is the most
appropriate measure given the significant fluctuations in profit before tax in the current and prior
periods.
Our audit opinion is consistent with the supplementary report for the Audit committee of the Company
prepared in accordance with the provisions of Article 11 of Regulation (EU) no. 537/2014.
During the period between the starting date of the audited annual consolidated financial statements
of the Company for 2023 and the date of this Independent Auditor’s Report, we did not provide
prohibited non-audit services to the Company and did not provide services for the design and
implementation of internal control procedures or risk management related to preparation and/or
control of financial information or the design and implementation of technological systems for
financial information, and we have maintained independence in relation to the Company.
BDO Croatia d.o.o.
18
INDEPENDENT AUDITOR'S REPORT (continued)
Report on the audit of the unconsolidated annual financial statements (continued)
Report based on the requirements of Delegated Regulation (EU) 2018/815 amending Directive
2004/109/EC of the European Parliament and the Council regarding regulatory technical
standards for the specification of the European Single Electronic Format
Auditor's assurance report on the compliance of annual unconsolidated financial statements
(hereinafter: financial statements), prepared pursuant to the provision of Article 462, paragraph 5 of
the Capital Market Act (Official Gazette, nos. 65/18, 17/2, 83/21 and 151/22) by applying the
Delegated Regulation (EU) 2018/815 establishing a single electronic reporting format for issuers
(hereinafter: the ESEF Regulation).
We conducted the engagement with expressing reasonable assurance as to whether the financial
statements prepared for the purposes of public disclosure pursuant to Article 462, paragraph 5 of the
Capital Market Act, which are contained in the electronic file granoliodd-2024-12-31-hr, in all
material aspects prepared in accordance with the requirements of the ESEF Regulation
Responsibilities of Management and those charged with governance
The Management of the Company is responsible for the preparation and content of the financial
statements in accordance with the ESEF Regulation.
In addition, the Management is responsible for maintaining a system of internal controls that
reasonably assures the preparation of financial statements without material non-compliance with the
reporting requirements of the ESEF Regulation, whether due to fraud or error.
The Management is also responsible for:
- public disclosure of the financial statements contained in the annual report in a valid XBRL
format, and
- selection and use of XBRL codes in accordance with the requirements of the ESEF Regulation.
Those charged with governance are responsible for overseeing the preparation of financial statements
in the ESEF format as part of the financial reporting process.
Auditor's responsibilities
It is our responsibility to express a conclusion, based on the audit evidence gathered, as to whether
the financial statements are free from material non-compliance with the requirements of the ESEF
Regulation. We conducted this reasonable assurance engagement in accordance with International
Standard on Assurance Engagements (ISAE) 3000 (revised) - Assurance engagements other than audits
or reviews of historical financial information.
BDO Croatia d.o.o.
19
INDEPENDENT AUDITOR'S REPORT (continued)
Report on the audit of the unconsolidated annual financial statements (continued)
Report based on the requirements of the ESEF Regulation (continued)
Procedures performed
The nature, timing and extent of the procedures selected depend on the auditor's judgment.
Reasonable assurance is a high level of assurance. However, it does not assure that the scope of
testing will reveal all significant (material) non-compliance with the ESEF Regulation.
As part of the selected procedures, we have performed the following activities:
- we have read the requirements of the ESEF Regulation,
- we have gained an understanding of the Bank's internal controls relevant to the application of
the requirements of the ESEF Regulation,
- we have identified and assessed the risks of material non-compliance with the ESEF Regulation
due to fraud or errors; and
- based on that, we have planned and designed procedures for responding to assessed risks and for
obtaining reasonable assurance for the purpose of expressing our conclusion.
The aim of our procedures was to assess whether:
- the financial statements, which are included in the unconsolidated annual report, are prepared
in the valid XHTML format,
- the information contained in the unconsolidated financial statements required by ESEF
Regulation, are labelled and all labels meet the following requirements:
- XBRL mark-up language was used,
- the elements of the basic taxonomy listed in the ESEF Regulation with the closest accounting
meaning were used, unless an additional element of taxonomy has been created in accordance
with Annex IV ESEF Regulations,
- the labels comply with the common labelling rules under the ESEF Regulation.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our conclusion.
Granolio d.d., Zagreb
21
Unconsolidated Statement of Comprehensive Income
for the year ended 31 December 2024
| in EUR ‘000 | |||
| Note | 2024 | 2023 | |
| Income | |||
| Sales revenue | 5 | ||
| Other operating income | 6 | ||
| Total operating income | |||
| Change in inventory value | 17 | ( | |
| Material expenses | 7 | ( | ( |
| Employee expenses | 8 | ( | ( |
| Depreciation and amortisation | 13, 14,15 | ( | ( |
| Other expenses | 9 | ( | ( |
| Value adjustment expenses | ( | ||
| Other operating expenses | 10 | ( | ( |
| Total operating expenses | ( | ( | |
| Operating profit | |||
| Financial income | 11 | ||
| Financial expenses | 11 | ( | ( |
| Net financial result | ( | ||
| Profit before tax | |||
| Profit tax | 12 | ( | ( |
| Profit after tax | |||
| Other comprehensive income | |||
| Total comprehensive income | |||
| Earnings per share | |||
| Basic and diluted earnings per share (in euros and cents) | 29 |
* The accompanying notes are an integral part of these financial statements.
Granolio d.d., Zagreb
22
Unconsolidated Statement of Financial Position
as of 31 December 2024
in EUR ‘000
| in EUR ‘000 | |||
| Note | 31 December 2024 | 31 December 2023 | |
| FIXED ASSETS | |||
| Intangible asset | 13 | ||
| Right-of-use assets | 14 | ||
| Property, plant and equipment | |||
| Land | |||
| Buildings | |||
| Plants, equipment and tools | |||
| Other tangible assets | |||
| Advances for tangible assets | |||
| Investment property | |||
| Tangible assets under construction | |||
| 15 | |||
| Financial assets measured at amortized | |||
| cost | |||
| Loans, deposits and similar | 16c | ||
| Investments in subsidiaries | 16a | ||
| Long-term receivables | 16b | ||
| CURRENT ASSETS | |||
| Inventories | 17 | ||
| Receivables | |||
| Receivables from related parties | 28 | ||
| Receivables from customers | 18a | ||
| Receivables from the state and other institutions | 18b | ||
| Other receivables | 18c | ||
| Financial assets measured at amortized cost | |||
| Loans to related parties | 19, 28 | ||
| Loans, deposits and similar granted | 19b | ||
| Investment in securities | 19a | ||
| Cash and cash equivalents | 20 | ||
| Prepaid expenses and accrued income | 21 | ||
| TOTAL ASSETS |
Granolio d.d., Zagreb
23
Unconsolidated Statement of Financial Position (continued)
as of 31 December 2024
in EUR ‘000
| in EUR ‘000 | |||
| Note | 31 December 2024 | 31 December 2023 | |
| CAPITAL AND RESERVES | |||
| Registered capital | |||
| Capital reserves | |||
| Revaluation reserves | |||
| Legal reserves | |||
| Reserves for own shares | |||
| Retained earnings/ (Loss carried forward) | ( | ||
| Profit of the current year | |||
| 22 | |||
| LONG-TERM LIABILITIES | |||
| Deferred tax liability | 12 | ||
| Liabilities to banks and other financial institutions | 23 | ||
| Loan liabilities | 24 | ||
| Lease obligations | 14 | ||
| Liabilities to suppliers | |||
| Liabilities for securities | 25 | ||
| SHORT-TERM LIABILITIES | |||
| Liabilities for loans from affiliated companies | 28 | ||
| Liabilities to affiliated companies | 28 | ||
| Liabilities to banks and other financial institutions | 23 | ||
| Loan liabilities | 24 | ||
| Lease obligations | 14 | ||
| Liabilities for securities | 25 | ||
| Liabilities for advances | 26a | ||
| Liabilities to suppliers | 26b | ||
| Liabilities for taxes, contributions and similar benefits | 26c | ||
| Accrued expenses and deferred income | 26d | ||
| Other short-term liabilities | 26e | ||
| TOTAL EQUITY AND LIABILITIES |
* The accompanying notes are an integral part of these financial statements.
Granolio d.d., Zagreb
24
Unconsolidated Statement of Changes in Equity
for the year ended 31 December 2024
| in EUR ‘000 | ||||||||
| Share capital | Capital reserves | Legal reserves | Reserves for own shares | Revaluation reserves | (Loss carried forward/Retained earnings) | Profit for the current year | Total | |
| Balance as of 1 January 2023 | ( | |||||||
| Schedule of results for 2023 | ( | |||||||
| Release of revaluation reserve | ( | |||||||
| Total transactions with owners | ( | ( | ||||||
| Profit for the current year | ||||||||
| Total comprehensive income for the year | ||||||||
| Balance as of 31 December 2023 | ( | |||||||
| Schedule of results for 2023 | ( | |||||||
| Release of revaluation reserve | - | ( | ||||||
| Acquisition of treasury shares | ( | ( | ( | |||||
| Total transactions with owners | ( | ( | ( | |||||
| Profit for the current year | ||||||||
| Total comprehensive income for the year | ||||||||
| Balance as of 31 December 2024 |
* The accompanying notes are an integral part of these financial statements.
Granolio d.d., Zagreb
25
Unconsolidated Statement of Cash Flows
For the year ended 31 December 2024
in EUR ‘000
| in EUR ‘000 | in EUR ‘000 | ||
| Notes | 2024 | 2023 | |
| Result before tax | |||
| Reconciliation of results: | |||
| Depreciation | 13,14,15 | ||
| (Gain)/Loss on sale and disposal of fixed assets, net | ( | ||
| Value adjustment of inventories | |||
| Dividend income | 11 | ( | ( |
| Write-off of receivables | |||
| Inventory surplus | 6 | ( | ( |
| Gains from other financial activities | 11 | ( | ( |
| Net interest expense | 11 | ||
| Operating result before changes in working capital | |||
| (Increase)/Decrease in inventories | ( | ||
| (Increase)/Decrease) in receivables | ( | ||
| Increase/(Decrease) in liabilities | ( | ||
| Advances preceived | ( | ||
| Operating result after changes in working capital | |||
| Profit tax paid | ( | ( | |
| Interest paid | ( | ( | |
| Cash flow from operating activities | |||
| Interest collected | |||
| Cash expenditure for acquisition of property, plant, equipment and intangible assets | ( | ( | |
| Cash expenditure for acquired shares | ( | ||
| Cash expenditure for loans granted | ( | ( | |
| Cash receipts from collection of loans granted | |||
| Cash receipts from sale of shares | |||
| Cash receipts from dividends received | |||
| Cash flow from investing activities | ( | ( | |
| Cash expenditure for repayment of loans and borrowings | ( | ( | |
| Cash receipts for loans received | |||
| Net expenditure on securities | 25 | ( | ( |
| Cash expenditure for repayment of leases | 29 | ( | ( |
| Cash expenditure for acquiring own shares | ( | - | |
| Cash flow from financing activities | ( | ||
| Net changes in cash and cash equivalents | ( | ||
| Cash at the beginning of the period | |||
| Cash at the end of the period |
in EUR ‘000
* The accompanying notes are an integral part of these financial statements.
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024.
26
1. GENERAL INFORMATION
Granolio d.d. was incorporated as a Croatian joint stock company in December 1996. The registered seat of the
Company is in Zagreb and its business units are located in Gornji Draganac, Slavonski Brod, Velika Kopanica and
Osijek.
Based on Decision No. 48. St-2021/2017 dated 27 July 2017; Commercial Court in Zagreb has opened a pre-
bankruptcy procedure against Granolio d.d. and nominated Nada Reljić for the commissioner. On 6 December
2018, at the hearing for the amended restructuring plan vote at the Commercial Court in Zagreb, the restructuring
plan was approved. The Court’s Decision confirming the pre-bankruptcy agreement entered into force on 28
December 2018.
The following subsidiaries made up the Granolio Group as of 31 December 2024:
Zdenka - mliječni proizvodi d.o.o., Veliki Zdenci,
Zdenačka farma d.o.o., Veliki Zdenci.
The core activities of the company Granolio d.d. and its subsidiaries comprise the production of food, agricultural
production, warehousing of agricultural products and trade in bakery industry products, agricultural products and
raw materials for agricultural production.
In mid-2007, the Company acquired the entire share in Zdenačka farma d.o.o., Veliki Zdenci, for 374 thousand EUR 374 thousand EUR
thousand. The subsidiary produces high-quality milk produced by dairy cows of high genetic potential.
Pursuant to the decision of the Company's General Assembly dated 16 March 2015, the share capital of Zdenačka
farma was increased from EUR 1,794 thousand to EUR 3,198 thousand by issuing a new business share in the
amount of EUR 2,124 thousand.
Around the middle of 2008 the Company acquired the entire equity share in Prerada žitarica d.o.o., Grubišno Polje,
for HRK 5,206 thousand. The subsidiary's activities include grains warehousing and drying. As of 27 November
2017, the share capital of Prerada Žitarica was increased from EUR 3,691 thousand to EUR 8,470 thousand by
issuing a new business share in the amount of EUR 5,401 thousand. On 30 April 2018, the Commercial Court in
Zagreb adopted the Decision on the merger, formally ceasing the operations of the company Prerada žitarica.
In 2011, Granolio d.d. acquired a controlling interest in the subsidiary, enabling it to exercise power in making
operational decisions of its subsidiaries, as well as to govern the financial and business policies, the appointment
of the members of the Management Board or the majority of vote at Zdenka mliječni proizvodi d.o.o. and Žitar d.o.o.
On 4 March 2019, the Company sold its shares in the company Žitar d.o.o. The transaction was entered into the
court registry on 14 March 2019.
Management Board of Granolio d.d. on 31 December 2024 consisted of:
Hrvoje Filipović - President (since 23 February 2011),
Vladimir Kalčić - Member (since 23 February 2011), and
Davor Mitrović - Member (from 28 April 2022).
Supervisory Board of Granolio d.d. on 31 December 2024, consisted of:
Franjo Filipović – President (since 23 February 2011),
Jurij Detiček – member (since 23 February 2011),
Tihomir Osmak - member (from 13 June 2019), and
Davor Štefan – member (since 16 January 2015)
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024.
27
2. ADOPTION OF NEW AND AMENDED INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”)
AND INTERPRETATIONS
First application of new amendments to existing standards in force for the current reporting period
The following amendments to the existing standards issued by the International Accounting Standards Board
(IASB) and adopted by the EU are effective for the period beginning 1 January 2024:
• Supplier Finance Arrangements (Amendments to IAS 7 “Statement of Cash Flows” & IFRS 7
“Financial Instruments: Disclosures”);
• Lease Liability in a Sale and Leaseback (Amendments to IFRS 16 “Leases”);
• Classification of Liabilities as Current or Non-Current (Amendments to IAS 1 “Presentation of
Financial Statements”); and
• Non-current Liabilities with Covenants (Amendments to IAS 1 “Presentation of Financial
Statements”)
The adoption of these amendments to existing standards did not lead to significant changes in the Company's
financial statements.
Standards, amendments to existing standards and interpretations issued by the IASB and adopted
in the European Union, but not yet effective
The following amendments are effective for the annual reporting period beginning 1 January 2025:
• Lack of Exchangeability (Amendment to IAS 21 “The Effects of Changes in Foreign
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024.
28
2. ADOPTION OF NEW AND AMENDED INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”)
AND INTERPRETATIONS (CONTINUED)
Standards and amendments to the existing standards issued by IASB and not yet adopted by the
EU
IFRS currently adopted in the European Union do not differ significantly from the regulations adopted by the
International Accounting Standards Board (IASB), except for the following new standards and amendments
to existing standards, the adoption of which the European Union has not yet decided on (date of entry into
force set out below relate to IFRSs issued by the IASB):
The following amendments are effective for the annual reporting period beginning 1 January 2026:
• Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS
9 “Financial Instruments” and IFRS 7 “Financial Instruments: Disclosures”)
• Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 “Financial Instruments”
and IFRS 7 “Financial Instruments: Disclosures”)
The following standards are effective for the annual reporting period beginning 1 January 2027:
• IFRS 18 Presentation and Disclosure in Financial Statements
• IFRS 19 Subsidiaries without Public Accountability: Disclosures.
The Company is currently assessing the effect of these new accounting standards and amendments.
IFRS 18 Presentation and Disclosure in Financial Statements, which was issued by the IASB in April 2024
supersedes IAS 1 and will result in major consequential amendments to IFRS Accounting Standards including
IAS 8 Basis of Preparation of Financial Statements (renamed from Accounting Policies, Changes in
Accounting Estimates and Errors). Even though IFRS 18 will not have any effect on the recognition and
measurement of items in the separate financial statements, it is expected to have a significant effect on the
presentation and disclosure of certain items. These changes include categorisation and sub-totals in the
statement of profit or loss, aggregation/disaggregation and labelling of information, and disclosure of
management-defined performance measures.
The Company does not expect to be eligible to apply IFRS 19.
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024.
29
3. SIGNIFICANT ACCOUNTING POLICIES
3.1 Compliance statement
These unconsolidated financial statements are prepared in accordance with the Accounting Act and the
3.2 Basis of preparation
The financial statements of the Company have been prepared on the historical cost basis, except for certain
properties and financial instruments that are measured at revalued amounts or fair values at the end of each
reporting period, as explained in the accounting policies below, and in line with the International Financial Reporting
Standards (“the IFRSs”) as adopted by the European Union, and Croatian laws. Historical cost is generally based
on the fair value of the consideration given in exchange for assets.
The Company maintains its accounting records in the Croatian language, in Euro and in accordance with Croatian
laws and the accounting principles and practices observed by enterprises in Croatia.
On 6 December 2018, at the hearing for the amended restructuring plan vote at the Commercial Court in Zagreb,
the restructuring plan was approved. The Court’s Decision confirming the pre-bankruptcy agreement entered into
force on 28 December 2018.
The Company expects to continue its operations as a going concern and to settle all liabilities determined in the
pre-bankruptcy settlement procedure. The Company has a sufficient level of liquidity to ensure the fulfilment of
obligations to creditors and, in accordance with the business plan, estimates that a positive cash flow will be
generated from the core business in future periods.
Throughout 2024, a stable cash flow and funds were provided to meet due liabilities to suppliers, employees, and
the state, which was achieved through careful planning and liquidity management. So far, the Company has
regularly repaid its liabilities in accordance with the pre-bankruptcy settlement, and it is expected that it will continue
to operate smoothly and repay its liabilities in accordance with the final settlement in the future. The further
investment and business plan will depend on the restructuring plan adopted as part of the pre-bankruptcy
settlement.
The Management Board of the Company continues intensively with activities for achieving capital adequacy as an
essential condition for ensuring the long-term survival of the Company.
3.3 Interests in associates and joint ventures
An associate is an entity over which the Company has significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of the investee but is not control or joint control over those
policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to
the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement,
which exists only when decisions about the relevant activities require unanimous consent of the parties sharing
control.
The results, assets and liabilities of associates or joint ventures are reported in these unconsolidated financial
statements at cost, except when the investment, or a portion thereof, is classified as held for sale, in which case it
is accounted for in accordance with IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations”.
The requirements of IAS 9 are applied to determine whether it is necessary to recognise any impairment loss with
respect to the Company’s investment in an associate or a joint venture. When necessary, the entire carrying amount
of the investment (including goodwill) is tested for impairment in accordance with IAS 36 “Impairment of Assets” as
a single asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal)
with its carrying amount. Any impairment loss recognised forms part of the carrying amount of the investment. Any
reversal of that impairment loss is recognised in accordance with IAS 36 to the extent that the recoverable amount
of the investment subsequently increases.
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024.
30
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.4 Interests in joint operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the
assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of
control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of
the parties sharing control.
When a Company entity undertakes its activities under joint operations, the Company as a joint operator recognises in
relation to its interest in a joint operation:
• its assets, including its share of any assets held jointly;
• its liabilities, including its share of any liabilities incurred jointly;
• its revenue from the sale of its share of the output arising from the joint operation;
• its share of the revenue from the sale of the output by the joint operation; and
• its expenses, including its share of any expenses incurred jointly.
The Company accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint operation
in accordance with the IFRSs applicable to the particular assets, liabilities, revenues and expenses.
When a Company entity transacts with a joint operation in which a group entity is a joint operator (such as a
purchase of assets), the Company does not recognise its share of the gains and losses until it resells those assets
to a third party.
3.5 Interests in subsidiaries
Subsidiary is an entity in which the Company has significant influence in making financial and business policy decisions
and controlling such policies. The assumption is that control exists when a parent owns, directly or indirectly through a
subsidiary, more than half of the voting power of the entity, unless in exceptional cases when can be clearly proven that
such ownership is not control. Control also exists when the parent company has half or less than half the voting power
of the entity when there is:
a) the power over more than half of the voting rights under agreements with other investors
b) the power to manage the financial and business policies of the entity based on a statute or agreement
c) the power to appoint or dismiss most of the members of the management or equivalent administrative body or
d) the power to give a decisive vote at the meetings of the management or the equivalent administrative body.
Investments in companies over which the Company has control and significant impact in these financial statements are
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024.
31
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.6 Functional and reporting currency
The items included in the Company's financial statement are expressed in the currency of the primary economic
environment in which the Company operates (functional currency). Considering that the Republic of Croatia
introduced the euro as the official currency as of 1 January 2023, according to the Law on the introduction of the
euro as the official currency in the Republic of Croatia, the Company prepared financial statements for the year
ended 31 December 2023, and the financial statements for the year ended 31 December 2024 in EUR. From 1
January 2023, the euro is also the functional currency of the Company (until 1 January 2023, it was HRK). Although
the change in the presentation currency in the financial statements represents a change in accounting policy that
requires retroactive application, the Company did not publish the third balance sheet in the financial statements for
the year ended 31 December 2023 in accordance with International Accounting Standard 8 (IAS) Accounting
Policies, Changes in Accounting Estimates and Errors, given that it determined that the change in the presentation
currency has no significant impact on the Company's financial statements, due to the stable HRK/EUR exchange
rate over the past few years.
The financial statements for the year 2022 have been compiled in HRK as the functional and reporting currency,
which was valid until 31 December 2022.
3.7 Using assumptions and estimates
The preparation of financial statements in conformity with IFRS requires from management to make judgments,
estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities,
income and expenses. These estimates and the underlying assumptions are based on past experience and various
other pertinent factors and are believed to be reasonable under given circumstances and constitute a reliable basis
for developing estimates of the carrying amounts of assets and liabilities that are not readily available from other
sources. Actual results may differ from those estimates.
The estimates and underlying assumptions are regularly reviewed. Revisions to accounting estimates are
recognized in the period in which the estimate is revised if the revision affects only that period or in the period of
revision and future periods if the revision affects both current and future periods.
Judgements made by the Management Board in applying IFRS that have a significant impact on the financial
statements and areas of judgement involving a risk of material adjustment in the following year are presented in
Note 4.
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024.
32
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.8 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable for products, goods or services
sold in the regular course of the Company’s operations. Revenues are stated net of value added tax, quantity and
sales discounts.
The Company recognises revenue when the amount of the revenue can be measured reliably, when future
economic benefits will flow into the Company and when the specific criteria for the entire Company’s activities
described below are met.
(i) Income from the wholesale of products and trade goods
The Company produces and distributes its own products as well as third-party merchandise (wholesale operations).
Wholesale revenue is recognised when the Company has delivered the goods to the wholesaler, when it no longer
controls the management of the goods and when there is no outstanding liability that could affect the acceptance
of the products by the wholesaler.
A delivery is completed when the products are dispatched to a specific location, the risk of loss is transferred to the
wholesaler and one of the following is met: the wholesaler has accepted the goods in accordance with the underlying
contract; or the acceptance deadline has passed; or the Company has objective evidence that all the acceptance
criteria are met.
Products are sold at the agreed volume discounts, with the right of the customers to return faulty goods. Sales
revenue is recognised based on the price from the underlying sales contract, less any estimated volume and sales
discounts, and returns. The discounts and returns are assessed based on past experience. Volume discounts are
assessed based on anticipated annual sales. When sales are made under terms and conditions that involve
financing elements, i.e. where the collection period is longer than 60 days, the receivables are classified as short-
term financial assets.
(ii) Income from the retail sale of products and merchandise
Retail product and merchandise sales are recognised upon the sale to the customer. Retail sales are generated in
cash. The Company does not have specific customer award schemes.
(iii) Sale of services
Service sales are recognised in the accounting period in which the services are rendered, by reference to
completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the
total services to be provided.
(iv) Financial income
Financial income consists of interest earned on investments and foreign exchange gains. Interest income is
recognised as it accrues, using the effective interest method. Dividend income is recognised when the right to
receive payment has been established.
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
33
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.9 Foreign currencies
Foreign-currency transactions and balances
Transactions in foreign currencies are translated into the functional currency using the exchange rates prevailing at
the dates of the transactions. Monetary assets and liabilities denominated in foreign currency at the balance sheet
date are translated into the functional currency at the foreign exchange rate ruling at the reporting date. Foreign
exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary
assets and liabilities denominated in foreign currencies are recognised in profit or loss.
Non-monetary assets and items denominated in foreign currencies that are measured at historical cost are not re-
translated.
Foreign currency denominated non-monetary assets and liabilities measured at historical cost currencies are
3.10 Borrowing costs
Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset, which is a time-
consuming asset that is required to be ready for its intended use or sale, are charged to the cost of the asset until
it is largely ready for intended use or sale.
Investment income earned on the temporary investment of earmarked loan funds until the beginning of their
spending on a qualifying asset is deducted from borrowing costs whose capitalization is acceptable.
3.11 Employee benefits
(i) Pensions and other post-employment benefits
In the normal course of business the Company makes payments, through salary deductions, to mandatory pension
funds on behalf of its employees, as required by law. All contributions paid to the mandatory pension funds are
recognised as salary expense when accrued. The Company is not obliged to provide any other post-employment
benefits.
(ii) Long-term employee benefits
The Company does not recognise liability for long-term employee benefits (jubilee awards), as they are not included
in the employment contracts or defined by other legal acts.
(iii) Short-term employee benefits
The Company recognises a provision for bonuses to employees when there is a contractual obligation or a past
practice giving rise to a constructive obligation.
(iv) Share-based payments
The Company makes no share-based payments to its employees.
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
34
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.12 Dividend
Dividends payable to shareholders are recognized as a liability in the financial statements in the period in which
they are approved by the Company's General Assembly..
3.13 Operating segment reporting
A segment is a distinguishable component of the Company that is engaged either in providing related products or
services (business segment), or in providing products or services within a particular economic environment
(geographical segment), which is subject to risks and rewards that are different from those of other segments.
Based on the internal reporting structure, the Company monitors the performance of the following segments:
- Milling
- Wholesale
- Other (services, livestock, other activities)
The Company identifies operating segments on the basis of internal reports about components of the Company
that are regularly reviewed by the chief operating decision maker (the Management Board) in order to allocate
resources to the segments and to assess their performance. Details about the operating segments are disclosed in
Note 5 to the unconsolidated financial statements. Comparative information has been presented on the principle of
comparability.
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
35
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.14 Taxation
(i) Profit tax
Profit tax expense comprises current and deferred taxes. Profit tax expense is recognised in profit or loss to the
extent of the tax relating to items within equity when the expense is also recognised through other comprehensive
income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the date of the financial statements, and any adjustment to tax payable in respect of previous years.
(ii) Deferred tax assets and liabilities
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is not recognised for the following temporary differences: initial recognition of goodwill, initial
recognition of assets or liabilities in a transaction that is not a business combination and that affects neither
accounting nor taxable profit, as well as differences which refer to investing into subsidiaries and joint undertakings
when it is probable that the relevant situation will not change in the near future. Deferred tax is measured at the tax
rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have
been enacted or substantively enacted by the reporting date.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against
which temporary difference can be utilised. Deferred tax assets are recognised only to the extent that it is probable
that they could be utilised as a tax benefit.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and
assets, and if they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax
entities, but they intend to settle current tax liabilities and assets on a net basis or realise them simultaneously.
(iii) Tax exposure
In determining the amount of current and deferred tax, the Company considers the impact of uncertain tax positions
and whether additional taxes and interest may be due. This assessment relies on estimates and assumptions and
may involve a series of judgements about future events. New information may become available that causes the
Company to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities
will impact tax expense in the period that such a determination is made.
(iv) Value added tax (VAT)
The Tax Administration require that VAT is settled on a net basis. VAT on sale and purchase transactions is
recognised in the unconsolidated statement of financial position on a net basis. Where an amount receivable is
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
36
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.15 Property, plant and equipment
Property, plant and equipment are initially stated at cost, which includes the purchase price, including import duties
and non-refundable taxes after deduction of trade discounts and rebates, as well as all costs directly attributable to
bringing the property to its location and working condition for its intended use. Property, plant and equipment are
recognized if it is probable that future economic benefits attributable to the asset will flow to the Company; if the
cost of the asset can be reliably determined, and if the individual purchase value of the asset is greater than EUR
665 (in 2023: EUR 464,53).
After initial recognition, land and buildings that are used in the production or delivery of goods or services, or for
administrative purposes are shown in the statement of financial position in revalued amounts, which represent their
fair value on the revaluation date less value correction (accumulated depreciation) and accumulated impairment
losses. Revaluation is carried out regularly so that the carrying amounts do not differ materially from the amounts
that would be determined using fair value at the end of the reporting period
Every increase resulting from land and building revaluation is reported in the statement of comprehensive income,
except if it cancels the decrease resulting from the revaluation of the same asset which has been previously
recognised in the statement of profit or loss, and in that case the increase is recorded in the statement of profit or
loss up to the amount of the previously stated decrease. A decrease in the carrying amount arising on the
revaluation of such land and buildings is recognised in profit or loss to the extent that it exceeds the balance, if any,
held in the properties revaluation reserve relating to a previous revaluation of that asset.
Properties under construction for production, supply or administrative purposes are carried at cost, less any
recognised impairment loss. The purchase cost entails the professional services fee cost, and in case of qualifying
assets, borrowing costs capitalised pursuant to the Company’s accountancy policy. Fixed tangible assets under
construction are classified to the appropriate categories of property, plant and equipment when completed and
ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences
when the assets are ready for their intended use.
Depreciation on revalued buildings is recognised in profit or loss. On the subsequent sale or retirement of a revalued
property, the attributable revaluation surplus remaining in the property’s revaluation reserve is transferred directly
to retained earnings.
Freehold land is not depreciated.
Fixtures and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets (other than freehold land and properties
under construction) less their residual values over their useful lives, using the straight-line method. The estimated
useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the
effect of any changes in estimate accounted for on a prospective basis.
The following useful lives are used in the calculation of depreciation:
| 2024 | 2023 | |
| Buildings | 40 years | 40 years |
| Plants and equipment | 10 years | 10 years |
| Office equipment | 4 years | 4 years |
| Telecommunications equipment | 2 years | 2 years |
| Personal vehicles | 2.5 years | 2.5 years |
| Delivery vehicles | 4 years | 4 years |
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an
item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying
amount of the asset and is recognised in profit or loss.
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
37
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.16. Investment property
Investment property refers to property held for the purpose of lease income or increase in property value or both.
After initial recognition, the Company chose for its subsequent measurement accounting policy a purchase cost
model and applies its policy to all of its investment property.
3.17. Intangible assets
Intangible assets may be acquired in exchange for a non-cash asset or for cash, or a combination of both, where
the cost of such an asset is determined at the fair value unless the exchange lacks commercial substance or the
fair value of the asset received or disposed of cannot be determined reliably, in which case the cost is determined
as the carrying amount of the asset disposed of.
Computer software
Software licences are capitalised based on the cost, which includes the cost of purchase and costs incurred in bringing
software into a working condition for its intended use. The cost is amortised over the useful life of software, which has
been estimated at 5 years.
Trademarks
Acquired trademark rights are capitalised based on the cost and are amortized over their estimated useful life, which
has been estimated at 20 years.
3.18 Impairment of property, plant, equipment and intangible assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to
determine whether there is any indication that those assets have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the
recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of
allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they
are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can
be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at
least annually, and whenever there is an indication that the asset may be impaired.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is
recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case
the impairment loss is treated as a revaluation decrease, in line with the applicable Standard stipulating the
requirements concerning the relevant asset revaluation.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is
increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not
exceed the carrying amount that would have been determined had no impairment loss been recognised for the
asset (or cash-generating unit) in prior years. Impairment loss reversal is immediately recognised as income, unless
the relevant asset is not stated as a revalued amount, in which case the reversed impairment loss is stated as an
increase due to revaluation in line with the applicable Standard stipulating the requirements concerning the relevant
asset revaluation.
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
38
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.19 Leases
All leases are calculated by recognizing the right-of-use asset and the lease liabilities except for:
• Low value leases; and
• Leases whose lease term ends in a period of 12 months from the date of first application or less.
The lease liability is calculated at the present value of the contractual future payments to the lessor over the term
of the lease, less the discount rate determined in relation to the rate inherent in the lease, unless it is (as is usually
the case) not easy to determine, in which case the Company's incremental borrowing rate at the inception of the
lease is used. Variable lease payments are included in the calculation of lease liabilities only if they depend on an
index or rate. In this case, the initial calculation of the lease liability assumes that the variable element will remain
unchanged for the duration of the lease. Other variable lease payments represent an expense in the period to which
they relate.
At the date of initial recognition, the carrying amount of the lease liability includes:
• amounts expected to be paid by the lessee under residual value guarantees;
• the cost of executing the purchase option if it is certain that the lessee will use that option; and
• payment of fines for termination of the lease if the lease period reflects that the lessee will take the
opportunity to terminate the lease
Right-of-use assets are initially measured at the amount of the lease liability, less all lease incentives received and
increased by:
• all lease payments made on or before the start date of the lease;
• all initial direct costs; and
• the amount of the provision recognized in the event that the Company contractually bears the costs of
dismantling, removing or rebuilding the location of the property.
Right-of-use assets are reduced by the accumulated depreciation calculated on a straight-line basis over the term
of the lease, or the remaining economic life of the asset, if it is considered to be shorter than the lease term.
The useful life of the right-of-use assets is shown as follows:
| 2024 | ||
| Vehicles | 5 years | 5 years |
| Equipment | 10 years | 10 years |
After the initial measurement, the lease liability increases to reflect interest on lease liabilities and decreases to
reflect lease payments made.
The lease liability is subsequently measured when there is a change in future lease payments resulting from a
change in the index or rate, or when there is a change in the estimate of the term of any lease.
For financial leases, the Company recognizes right-of- use assets and the lease liability.
3.20 Inventories
Inventories of raw materials and spare parts are stated at the lower of cost and net realizable value, determined
using the weighted average cost method. Net realisable value represents the estimated selling price in the ordinary
course of business less all variable selling costs.
The cost of work in progress and finished goods comprises raw materials, direct labour, other direct costs and
related production overheads (based on normal operating capacity).
Trade goods are carried at the lower of purchase cost and selling price (less applicable taxes and margins).
Small inventory and tools are expensed when put into use.
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
39
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.21 Cash and cash equivalents
Cash and cash equivalents consist of balances on accounts with banks and cash in hand. For the purposes of the
unconsolidated statement of financial position, bank overdrafts are included in current liabilities.
3.22 Share capital
The share capital consists of ordinary shares. Amounts recognised in equity as a result of issuing new shares or
options are presented net of the related transaction costs and profit tax. Any fair value of the consideration received
in excess of the nominal value of issued shares is recognised as capital gains.
3.23. State grants
Government grants are not recognized until there is a reasonable belief that the Company will fulfil all the conditions
defined in the grant agreement and that the grant will be received. Government grants whose primary condition is
that the Company purchases, builds or otherwise acquires fixed assets are recognized as deferred income in the
statement of financial position and are recognized systematically and reasonably during the useful life of the asset
in the statement of profit and loss. Government grants are recognized as income over the period in accordance with
the related costs (which are intended to be reimbursed) on a systematic basis. Government grants received as
compensation for already incurred costs or for the purpose of providing direct financial support to the Company
without further related costs are recognized in the statement of profit and loss in the period in which they were
received.
3.24 Financial instruments
Financial assets and financial liabilities are recognised when a Company entity becomes a party to the contractual
provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable
to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at
fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities,
as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or
financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
40
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.25 Financial assets
Financial assets and financial liabilities are recognised in the statement of financial position of the Company when
the Company becomes a party to the contractual provision of the instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs which may be directly
attributed to the acquisition or issuing the financial assets and financial liabilities (other than financial assets and
financial liabilities measured at fair value through profit or loss) are added to or deducted from the fair value of
financial assets and financial liabilities at initial recognition, where appropriate. Transaction costs which may be
directly attributed to the acquisition of financial assets or financial liabilities at fair value through profit and loss are
recognised immediately in profit and loss. All regular way purchases or sales of financial assets are recognised and
derecognised on a trade date basis.
All regular purchases or sales represent purchases or sales of financial assets which require delivery in the
framework established in regulations or market practice. All recognised financial assets are subsequently entirely
measured at depreciated cost, fair value through other comprehensive income or fair value through profit or loss,
depending on the business model and characteristics of contracted cash flows of financial assets.
Classification of financial assets
Debt instruments that meet the following conditions are measured subsequently at amortised cost:
• the financial asset is held within a business model whose objective is achieved by collecting contractual cash
flows; and
• contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding.
(i) Depreciated cost and effective interest method
The effective interest method is a method of calculating the depreciated cost of a debt instrument and of allocating
interest income over the relevant period. For financial assets, aside from purchased or incurred credit-impaired financial
assets (i.e. assets which were credit-impaired during the initial recognition), the effective interest rate is a rate that
accurately discounts the estimated future cash inflow (including all fees and points paid or received, which constitute an
integral part of the effective interest rate, transaction costs and other premiums or discounts), excluding the expected
credit losses, during the expected life of a debt instrument or, where appropriate, during a shorter period, to gross
carrying amounts of the debt instrument at initial recognition. For purchased or incurred credit-impaired financial assets,
the effective interest rate adjusted to the loan is calculated by discounting estimated future cash flows, including
expected credit losses, to the depreciated cost of the debt instrument at initial measurement.
The depreciated cost of financial assets is the amount at which the financial instrument is measured at initial recognition,
less of payments of principal and plus accumulated depreciation, using the effective interest rate method for any
difference between the opening amount and amount at maturity, adjusted for any loss. Gross carrying amount of
financial assets is the depreciated cost of financial assets before adjustments for any loss.
Interest income is recognised by applying the effective interest rate for debt instruments, which are subsequently
measured at depreciated cost and FVTOCI.
For financial assets, other than purchased or incurred credit-impaired financial assets, interest income is calculated by
applying the effective interest rate to the gross carrying amount of financial assets, aside for the financial assets which
subsequently became credit-impaired.
For financial assets which subsequently became credit-impaired, interest income is recognised by applying the effective
interest rate to the depreciated cost of financial assets. If, in the following reporting periods, the credit risk for the credit-
impaired financial instrument improves in the way that the financial instrument is no longer credit-impaired, the interest
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
41
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.25 Financial assets (continued)
(i) Depreciated cost and effective interest method (continued)
For the purchased or incurred credit-impaired financial assets, the Company recognises interest income by using the
effective interest rate adjusted by the credit risk to the depreciated cost of financial assets at initial recognition. The
calculation is not returned to a gross basis, even if the credit risk of the financial assets subsequently improves so that
the financial assets are no longer credit impaired.
Interest income is recognised in profit or loss.
(ii) Impairment of financial assets
The Company recognises the provisions for expected credit losses from debt instruments measured at amortized
cost and for trade receivables. The amount of expected credit losses is calculated at every reporting date in order
to reflect the changes in the credit risk since the initial recognition of an individual financial instrument. The Company
always recognises life-long expected credit losses (ECL) for trade receivables based on a selected simplified
approach. The expected credit losses on these financial assets are estimated using a provision matrix based on
the Company’s historical credit loss experience, adjusted for debtor-specific factors. The Company currently does
not adjust the loss rate for future macroeconomic conditions, since it has not performed an analysis of the impact
of macroeconomic factors on historical loss rates, including the time value of money, where appropriate.
For all other financial instruments, the Company recognises the lifelong ECL in case of a significant increase in
credit risk since initial recognition. However, if the credit risk for the financial instrument has not significantly
increased since the initial recognition, the Company measures the loss for this financial instrument in the amount
equal to a 12-month ECL. Life-long ECL represents expected credit losses resulting from all potential cases of
default during the expected lifetime of the financial instrument.
By contrast, a 12-month ECL represents a part of the life-long ECL, on account of the probability of a default status
in the 12 months following the reporting date.
Significant increase in credit risk
When assessing whether the credit risk for the financial instrument significantly increased since the initial
recognition, the Company compares the risk of default on the reporting date to the risk of default of the financial
instrument on the date of initial recognition. During the assessment, the Company considers both quantitative and
qualitative information which are reasonable and available, including the historical experience, which can be
accessed without unnecessary costs or engagements.
In particular, the Company relies on days of default when assessing significant credit risk deterioration. If the debtor
is in default more than 360 days, then the Company assumes that there is a significant increase in credit risk.
Despite the aforementioned, we assume that the credit risk for the financial instrument has not significantly
increased since the initial recognition if we determine that the financial instrument has a low credit risk at the
reporting date. We conclude that the financial instrument has a low credit risk if:
• The financial instrument has a low risk of default;
• The debtor has a strong ability to settle its contractual obligations in the short term; and
• Adverse changes in economic and business conditions in the long term may, but do not necessarily have
to, decrease the lessee’s ability to meet his/her contractual cash flow obligations.
However, the Company does not currently use the simplification of a low credit risk when assessing the significant
increase in credit risk. The Company regularly monitors the efficiency of criteria used to determine whether there
has been a significant increase in credit risk and reviews them so that the criteria may identify a significant increase
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
42
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.25 Financial assets (continued)
(iii) Definition of default status
The following facts, which represent a case of default for internal credit risk management purposes are considered
by the Company as a historical experience which proves that financial assets meeting any of the following criteria
are in general not recoverable:
• if the debtor breached the financial clauses; or
• data developed internally or obtained from external sources point to the fact that it is highly unlikely that
the debtor will pay its creditors, including the Company, in full (without considering any collateral held by
the Company).
Notwithstanding the above analysis, the Company considers that there was a default when the financial assets
matured more than 360 days and the liabilities were not paid, unless the Company has reasonable and
substantiated information to show a more appropriate delay criterion.
(iv) Credit-impaired financial assets
Financial assets are credit-impaired when one or more events with an adverse effect on estimated future cash flows
and financial assets occurred. Proof of credit impairment of the financial asset includes data available on the
following events:
• significant financial difficulties of the issuer or debtor;
• breach of contract, such as a default (defined above);
• when the issuer, due to the debtor’s financial difficulties, grants the debtor a concession, which it would
otherwise not consider;
• it becomes probable that the debtor will go into bankruptcy or undertake another type of financial
restructuring;
• the disappearance of an active market for a specific financial asset because of financial difficulties.
(v) Write-off policy
The Company writes off financial assets when there is information pointing to the fact that the debtor is in serious
financial difficulties and that there is no real chances of return, for example when the debtor has gone into liquidation
or bankruptcy or when trade receivables are due more than 3 years, whatever happens first. Written-off financial
assets can still be subject to enforcement activities within the Company recovery procedures, with regard to the
relevant legal advice, where appropriate. As previously described, revenue from the collection of financial assets is
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
43
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.25 Financial assets (continued)
(vi) Measurement and recognition of expected credit losses
Measurement of expected credit losses is the function of Probability of Default (PD), Loss Given Default (LGD), i.e.
size of loss in case of default, and Exposure at Default (EAD). Assessment of Probability of Default and Loss Given
Default is based on historical data and information provided in previous paragraphs. In terms of exposure in the
moment of default, for the financial assets it represents a gross carrying amount of the assets at the reporting date.
As for the exposure at the time of default, for financial assets it represents the gross carrying amount of the asset
at the reporting date.
When assessing the PD and LGD parameters, the Company relies on external investment rating agencies’
publications.
For the financial assets, the expected credit loss is assessed as the difference between all contractual cash flows
maturing in line with the contract and all expected cash flows, discounted at the original effective interest rate. If the
Company measured provisions for expected loan losses for financial instruments in the amount equal to life-long
ECL in the previous reporting period, but at the current reporting date it determined that the life-long ECL conditions
are no longer met, the Company measures the loss in the amount equal to a 12-month ECL at the current reporting
date, except for the assets for which a simplified approach was used (trade receivables). The Company recognises
impairment gains and losses in the statement of profit and loss for all financial instruments with the appropriate
adjustment of the carrying amount through the loss provisions account.
If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to
control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for
amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a
transferred financial asset, the Group continues to recognize the financial asset and also recognizes a collateralised
borrowing for the asset received.
In case of derecognition of financial asset recognition measured at amortized cost, the difference between the
asset's carrying amount and the amount of the consideration received, and receivable is recognised in profit or loss.
furthermore, in the event that recognition of debt investment measured at FVTOCI ceases, cumulative profit or loss
previously accumulated in the investment revaluation reserve is reclassified to profit or loss, except in case of equity
instruments for which the FVTOCI option has been selected.
(vii) Derecognition of financial assets
The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset
expire; or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset
to another entity.
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
44
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.25 Financial assets (continued)
Loans and receivables
The Company always reports the provisions for losses of trade receivables in the amount equal to the life-long ECL.
The expected credit losses on trade receivables are estimated using a provision matrix by reference to past default
experience of the debtor and an analysis of the debtor’s current financial position. The Company recognised a loss
in the amount of 100% of all receivables over 360 days past due as past experience shows that the relevant
receivables can usually not be recovered.
There were no changes in the assessment techniques or material assumptions during the current reporting period.
The Company writes off trade receivables when there are data pointing to the fact that the debtor is in serious
financial difficulties and that there is no real chances of return, for example when the debtor has gone into liquidation
or bankruptcy or when trade receivables are due more than 2 years, whatever happens first. None of the trade
receivables are subject to enforcement activities. The following table details the risk profile of trade receivables
based on the Company’s provision matrix. As the Company’s historical credit loss experience does not show
significantly different loss patterns for different customer segments, the provisions for loss allowance based on past
due status is not further distinguished between the Company’s different customer bases.
3.26 Financial liabilities and equity instruments
All financial liabilities are measured subsequently at amortized cost by using the effective interest rate method or at
fair value through profit or loss.
The Company measures all financial liabilities at amortized cost.
However, for financial liabilities which arise when the transfer of financial assets does not meet the derecognition
criteria or when the continued participation approach is applied, and for contracts on financial guarantees issued by
the Company, subsequent measurement takes place in line with specific accounting policies provided below.
Financial liabilities subsequently measured at amortised cost
Financial liabilities which are not (i) contingent consideration recognised by an acquirer in a business combination;
(ii) held for trading; (iii) measured at fair value through profit or loss; are subsequently measured at amortized cost,
using the effective interest rate method.
The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating
interest cost over the relevant period. The effective interest rate is a rate that accurately discounts the estimated
future cash inflow (including all fees and points paid or received, which constitute an integral part of the effective
interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability,
or (where appropriate) a shorter period, to the amortized cost of financial liability
Classification as debt or equity
Debt and equity instruments are classified as financial liabilities or as equity pursuant to the essence of the
agreement.
Financial liabilities
Other financial liabilities, including borrowings and loans, as well as bonds, are initially measured at fair value less
transaction costs. Other financial liabilities are later measured at amortized cost by applying the effective interest
rate method, and the interest expenses are recognised based on the effective yield.
The effective interest rate method represents a method used for calculating the amortized cost of the financial
liability and distributing the interest expenses throughout the relevant period. The effective interest rate is the rate
pursuant to which the estimated future cash flows are discounted during the expected lifetime of the financial liability
or, where applicable, during a shorter period.
Derecognition of financial liabilities
The Company derecognises financial liabilities when, and only when, the Company's liabilities are paid, cancelled
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
45
4. KEY ACCOUNTING ASSUMPTIONS AND ESTIMATES
In the application of the Company's accounting policies, which are described in Note 3, the Company’s Management
Board is required to make judgements, estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based
on historical experience and other factors that are considered to be relevant. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised if the revision affects only that period or in the period
of the revision and future periods if the revision affects both current and future periods.
Critical judgements in the application of accounting policies
The following are the critical judgements, apart from those involving estimations, that the Management Board has
made in the process of applying the Company's accounting policies and that have the most significant effect on the
amounts recognised in the unconsolidated financial statements.
(i) . Revenue recognition
In making their judgement, the Management Board considered the individual criteria for the recognition of revenue
from the sale of goods set out in IFRS 15 “Revenue from Contracts with Customers”. Specifically, whether the
Company has transferred to the customer a significant portion of the risks and rewards associated with ownership
of the products and goods and whether the Company has recognized revenue from services in accordance with the
stage of completion based on the proportion of services actually performed in relation to the total services to be
performed.
(ii) Consequences of certain legal disputes
There are a number of legal actions which have arisen from the regular course of operations of individual companies
within the Company. The Management Board makes estimates of probable outcomes of these legal actions and
recognises provisions for the Company’s liabilities that may arise from these legal actions on a consistent basis.
(iii) Recoverable amount of trade and other receivables
The recoverable amount of trade and other receivables is determined as the present value of future cash flows,
discounted using the market interest rate in effect at the measurement date. Current receivables without the interest
rate are measured at the originally invoiced amounts if the discounting effect is not material.
(iv) Useful life of property, plant and equipment
As described in Note 3.15 above, the Company reviews the estimated useful lives of property, plant and equipment
at the end of each reporting period.
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
46
5. SALES REVENUE
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Sales revenue – domestic | 47,659 | 45,245 |
| Sales revenue – foreign | 10,226 | 6,297 |
| Revenue from services | 821 | 975 |
| 58,706 | 52,517 |
The reporting segments form a part of the internal financial reporting. the internal reports are reviewed regularly by
the Company's Management Board, as the chief decision-maker, which uses them as a basis for assessing the
performance of the segments and making operating decisions.
The Company monitors its performance through the following operating segments:
- Milling
- Wholesale
- Other (services, livestock)
Segment information – industry analysis:
The operating income of the Company, analysed by reporting segments presented in accordance with IFRS 8, and
the reconciliation of the segment performance with the profit or loss on taxation as reported in the unconsolidated
statement of comprehensive income.
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Milling | 45.450 | 43.182 |
| Wholesale | 12.429 | 8.627 |
| Other | 827 | 708 |
| 58.706 | 52.517 |
Geographical analysis of sales revenue
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Croatia | 48,480 | 46,219 |
| Serbia | 3,515 | 717 |
| Italy | 2,490 | 1,298 |
| Slovenia | 1,204 | 1,860 |
| Bosnia and Herzegovina | 1,994 | 1,404 |
| Hungary | 579 | 1,018 |
| Kosovo | 420 | - |
| Austria | 20 | - |
| Germany | 4 | - |
| 58,706 | 52,517 |
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
47
6. OTHER OPERATING INCOME
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Inventory surpluses | 307 | 368 |
| Income from subsidies | 183 | 649 |
| Subsequent approvals from suppliers | 18 | 17 |
| Subsequently determined income | 2,388 | - |
| Other operating income | 193 | 514 |
| 3,089 | 1,548 |
Other operating income consists of income from rents, claims collection, income from the sale of fixed assets,
subsequent approvals of suppliers and others. Income from subsidies refer to the measure of the Government of
the Republic of Croatia related to subsidizing the cost of electricity in the amount of EUR 100 thousand for 2024
(2023: EUR 252 thousand) and subsidies from the Agency for Payments in Agriculture and Fisheries in the amount
of EUR 83 thousand.
7. MATERIAL EXPENSES
The structure of material costs is as follows:
in EUR ‘000
| n EUR ‘000 | ||
| 2024 | 2023 | |
| Raw materials and supplies | 33,397 | 30,802 |
| Energy consumed | 1,385 | 2,062 |
| Waste, breakage and damage to inventory | 388 | 1,250 |
| Small inventory expenses | 47 | 36 |
| Cost of inventory sold | - | - |
| Other material expenses | 15 | 26 |
| Cost of raw materials and supplies | 35,232 | 34,175 |
| Cost of goods sold | 11,345 | 8,740 |
| Telephone, mail and transport services | 2,277 | 1,813 |
| Maintenance and security services | 492 | 419 |
| Intellectual services | 352 | 388 |
| Leasing services | 882 | 377 |
| Promotional, sponsorship services | 363 | 179 |
| Quality control services | 227 | 162 |
| Sales expenses (freight forwarders, goods handling, etc.) | 215 | - |
| Other external expenses | 196 | 346 |
| Other external expenses | 5,004 | 3,684 |
| 51,581 | 46,600 |
The cost of scrap, waste, breakage and damage relates mainly to the standard scrap in production of EUR 388
thousand (2023: EUR 1,250 thousand).
The total auditors' fees for 2024 amount to EUR 18 thousand (2023: EUR 16 thousand).
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
48
8. EMPLOYEE EXPENSES
in EUR ‘000
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Net salaries | 2,768 | 2,134 |
| Taxes and contributions from salaries | 985 | 767 |
| Contributions on salaries | 540 | 412 |
| 4,292 | 3,313 |
As of 31 December 2024, the Company had 188 employees (31 December 2023: 163).
9. OTHER EXPENSES
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Reimbursement of employee expenses | 221 | 166 |
| Insurance premiums | 101 | 92 |
| Contributions, membership fees and other benefits | 62 | 61 |
| Banking services and payment transaction costs | 95 | 31 |
| Taxes that do not depend on the result | 21 | 21 |
| Official travel expenses | 21 | 9 |
| Other expenses | 72 | 76 |
| 593 | 456 |
Reimbursement of employee expenses mostly relates to compensation for travel expenses to and from work of
EUR 96 thousand (2023: EUR 92 thousand) and Christmas bonuses, severance pay and other benefits in the
amount of EUR 125 thousand (2023: EUR 74 thousand).
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
49
10. OTHER OPERATING EXPENSES
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Entertainment expenses | 166 | 108 |
| Donations and sponsorships | 36 | 36 |
| Loss on sale of intangible assets | 2 | 31 |
| Fines, penalties, compensation for damages | 389 | 28 |
| Waste, breakage and damage to goods | 23 | 17 |
| Subsequently approved cassa sconto | 19 | 13 |
| Other operating expenses | 2 | 39 |
| 637 | 272 |
11. FINANCIAL INCOME AND EXPENSES
Financial income
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Dividend income | 500 | 800 |
| Penalty interest | 414 | 37 |
| Interest on loans | 24 | 20 |
| Profits from stock market transactions | 57 | - |
| 995 | 857 |
Income from shares within the Group refers to income from dividends of the company Zdenka - mliječni proizvodi
d.o.o. in the amount of EUR 500 thousand for 2024.
Financial expenses
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Interest on loans and borrowings | 1,284 | 602 |
| Penalty interest | 18 | 25 |
| Discount interest on bills of exchange | - | - |
| Other financial expenses | 6 | 6 |
| 1,308 | 633 |
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
50
12. PROFIT TAX
Profit tax comprises:
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Current profit tax | 600 | 561 |
| Deferred tax liability | (87) | (87) |
| Total profit tax liability | 513 | 474 |
Effective tax rate reconciliation
A reconciliation of tax expense per the statement of comprehensive income and taxation at the statutory rate is
detailed in the table below::
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Profit before taxation | 3.333 | 2.444 |
| Profit tax at a rate of 18% | 600 | 440 |
| Effect of non-taxable income | (280) | (144) |
| Effect of non-deductible expenses | 281 | 265 |
| -Profit tax | 600 | 561 |
| Effective tax rate | 18% | 23% |
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
51
12. PROFIT TAX (CONTINUED)
Unused tax losses
In accordance with tax regulations, as of 31 December 2024, the Company has tax losses carried forward in the
amount of zero EUR (as of 31 December 2023, zero EUR).
Deferred tax assets have not been recognized in the Company's books due to the uncertainty of realizing sufficient
future tax gains that would be reduced by tax losses carried forward.
Deferred tax liabilities arise from the following
| in EUR ‘000 | ||||
| Opening | Through profit | Merger of | Closing | |
| 2024 | balance | or loss | subsidiary | balance |
| Revaluation depreciation | 1,243 | (87) | - | 1,156 |
| Deferred tax liability | 1,243 | (87) | - | 1,156 |
| in EUR ‘000 | ||||
| Opening | Through profit | Merger of | Closing | |
| 2023 | balance | or loss | subsidiary | balance |
| Revaluation depreciation | 1,331 | (87) | - | 1,243 |
| Deferred tax liability | 1,331 | (87) | - | 1,243 |
Movement of deferred tax liability:
| in EUR ‘000 | ||
| 31 December | 31 December | |
| 2024 | 2023 | |
| Balance as of 1 January | 1,243 | 1,331 |
| Decrease | (87) | (87) |
| 1,156 | 1,243 |
In accordance with the regulations of the Republic of Croatia, the Tax Administration may at any time inspect the
books and records of companies in Croatia for a period of three years after the end of the year in which the tax
liability was declared and may impose additional tax levies and fines. The Company's Management Board is not
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
52
13. INTANGIBLE ASSETS
During 2024, by purchasing a milling facility, the company acquired the trademark "Tena".
Movement of intangible assets in 2024
in EUR ‘000
| in EUR ‘000 | |||||
| Trademarks | Customer Softlist | ware | Other intangible assets | TOTAL | |
| Purchase value | |||||
| Balance as of 1 January 2024 | - | 1,327 | 401 | - | 1,729 |
| Increase | 930 | - | - | 50 | 980 |
| Balance as of 31 December 2024 | 930 | 1,327 | 401 | 50 | 2,709 |
| Impairment | |||||
| Balance as of 1 January 2024 | - | 1,327 | 370 | - | 1,697 |
| Depreciation | - | - | 14 | - | 14 |
| Balance as of 31 December 2024 | 1,327 | 384 | - | 1,711 | |
| Present value as of 1 January 2024 | - | - | 32 | - | 32 |
| Present value as of 31 December 2024 | 930 | - | 17 | 50 | 998 |
| Movement of intangible assets in 2023 | in EUR ‘000 | ||
| Customer list | Software | TOTAL | |
| Purchase value | |||
| Balance as of 1 January 2023 | 1,327 | 401 | 1,729 |
| Balance as of 31 December 2023 | 1,327 | 401 | 1,729 |
| Impairment | |||
| Balance as of 1 January 2023 | 1,327 | 356 | 1,683 |
| Depreciation | - | 14 | 14 |
| Balance as of 31 December 2023 | 1,327 | 370 | 1,697 |
| Present value as of 1 January 2023 | - | 46 | 46 |
| Present value as of 31 December 2023 | - | 32 | 32 |
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
53
14. RIGHT-OF USE ASSETS AND LEASE LIABILITIES
(a) Right-of-use assets
| in EUR ‘000 | |||
| Vehicles | Equipment | TOTAL | |
| Balance as of 1 January 2023 | - | 112 | 112 |
| Increase | - | - | - |
| Depreciation | - | (41) | (41) |
| Balance as of 31 December 2023 | - | 71 | 71 |
| Increase | 59 | - | 59 |
| Depreciation | - | (41) | (41) |
| Balance as of 31 December 2024 | 59 | 30 | 89 |
(b) Lease liabilities
| in EUR ‘000 | |||
| Vehicles | Equipment | TOTAL | |
| Balance as of 1 January 2023 | - | 86 | 86 |
| Lease payment | - | (30) | (30) |
| Interest expense | - | (3) | (3) |
| Balance as of 31 December 2023 | - | 53 | 53 |
| Increase during the year | 59 | - | 59 |
| Lease payment | - | (34) | (34) |
| Interest expense | - | (1) | (1) |
| Balance as of 31 December 2024 | 59 | 18 | 77 |
(c) Maturity of liabilities
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Lease liability | 77 | 53 |
| (Current maturity) | (30) | (35) |
| Long-term lease liability | 47 | 18 |
Maturity of lease liabilities is as follows:
| in EUR ‘000 | |||||
| 31 December 2024 balance | 2025 | 2026 | 2027 | 2028 | |
| Operating lease | 77 | 30 | 11 | 7 | 28 |
Interest on operating lease ranges from 4% to 5%.
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
54
15. PROPERTY, PLANT AND EQUIPMENT
Movements in property, plant and equipment in 2024:
in EUR
‘000
| ‘000 | ||||||||
| Land | Buildings | Plant, equipment, and tools | Other tangible assets | Investment property | Property under construction | Advances for tangible assets | TOTAL | |
| Purchase value | ||||||||
| Balance as of 1 January 2024 | 1,219 | 24,472 | 14,624 | 26 | 613 | 1,240 | 186 | 42,380 |
| Increases | 55 | 5,784 | 2,626 | 6 | 157 | 3,950 | - | 12,578 |
| Transfers | 44 | 142 | - | - | - | - | (186) | - |
| Sales and write-offs | - | - | (16) | (3) | - | - | - | (19) |
| Balance as of 31 December 2024 | 1,318 | 30,398 | 17,234 | 29 | 770 | 5,190 | - | 54,939 |
| Impairment | ||||||||
| Balance as of 1 January 2024 | - | 11,393 | 12,280 | 16 | - | - | - | 23,689 |
| Revaluation depreciation | - | 291 | 195 | 1 | - | - | - | 486 |
| Depreciation | - | 304 | 232 | - | - | - | - | 536 |
| Sales and write-offs | - | (14) | (3) | - | - | - | (17) | |
| Balance as of 31 December 2024 | - | 11,987 | 12,693 | 14 | - | - | - | 24,694 |
| Present value as of 1 January 2024 | 1,219 | 13,079 | 2,344 | 10 | 613 | 1,239 | 186 | 18,690 |
| Present value as of 31 December 2024 | 1,318 | 18,411 | 4,541 | 15 | 770 | 5,190 | - | 30,245 |
Tangible assets worth EUR 27,269 thousand (2023: EUR 12,040 thousand) are pledged as collateral for the Company's loan liabilities (Note 24 and Note 23).
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
55
15. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Movements in property, plant and equipment in 2023:
in EUR
‘000
| Land | Buildings | Plant, equipment, and tools | Other tangible assets | Investment property | Property under construction | Advances for tangible assets | TOTAL | |
| Purchase value | ||||||||
| Balance 1 January 2023 | 1,219 | 24,420 | 12,931 | 26 | 613 | 1,248 | - | 40,457 |
| Increase | - | 52 | 1,833 | - | - | 1 | 186 | 2,071 |
| Transfer | - | - | 9 | - | - | (9) | - | - |
| Sale and disposal | - | - | (149) | - | - | - | - | (149) |
| Balance 31 December 2023 | 1,219 | 24,472 | 14,624 | 26 | 613 | 1,240 | 186 | 42,380 |
| Value adjustment | ||||||||
| Balance 1 January 2023 | - | 10,802 | 11,996 | 16 | - | - | - | 22,814 |
| Revaluation depreciation | - | 291 | 195 | - | - | - | - | 486 |
| Depreciation | - | 300 | 207 | - | - | - | - | 507 |
| Sale and disposal | - | (118) | - | - | - | - | (118) | |
| Balance 31 December 2023 | - | 11,393 | 12,280 | 16 | - | - | - | 23,689 |
| Present value as of 1 January 2023 | 1,219 | 13,618 | 935 | 10 | 613 | 1,248 | - | 17,642 |
| Present value as of 31 December 2023 | 1,219 | 13,079 | 2,344 | 10 | 613 | 1,240 | 185 | 18,690 |
Tangible assets worth EUR 12,040 thousand in 2023 were pledged as collateral for the Company's loan liabilities (Note 23).
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
56
16. FIXED FINANCIAL ASSETS
(a) Investments in subsidiaries
in EUR ‘000
| 31 December 2024 | 31 December 2023 | |
| Zdenka mliječni proizvodi d.o.o., Veliki Zdenci | 5,676 | 5,676 |
| Zdenačka farma d.o.o., Veliki Zdenci | 3,671 | 3,671 |
| 9,347 | 9,347 |
Shares in Zdenka – mliječni proizvodi d.o.o. in the amount of EUR 5,676 thousand (31 December 2023: EUR
5,676 thousand) are pledged as collateral for the Company's loan liabilities (Note 23 and Note 24).
| Interest in ownership structure | ||
| 31 December 2024 | 31 December 2023 | |
| Zdenačka farma d.o.o., Veliki Zdenci | 100.00% | 100.00% |
| Zdenka mliječni proizvodi d.o.o., Veliki Zdenci | 50.00% | 50.00% |
| Žitozajednica d.o.o., Zagreb | 1.28% | 1.28% |
(b) Long-term receivables
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Receivables under securities | 375 | 225 |
| 375 | 225 |
Voting rights are equal to the ownership rights.
(c) Long-term loans, deposits and similar granted
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Loans to natural persons | 7 | 21 |
Movements in non-current loans for the year are provided in Note 19.
17. INVENTORIES
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Raw materials and supplies | 6,827 | 1,046 |
| Trade goods | 1,348 | 1,052 |
| Finished products | 305 | 278 |
| 8,480 | 2,376 |
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
57
18. RECEIVABLES FROM CUSTOMERS, STATE AND OTHER INSTITUTIONS AND OTHER RECEIVABLES
a) Receivables from customers
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Domestic sales | 10.973 | 10,157 |
| Subcontractor receivables | 679 | 733 |
| Foreign sales | 759 | 640 |
| Expected credit losses | (2.338) | (3,738) |
| 10,073 | 7,793 |
Subcontractor receivables refer to commodity loans for intermediate products required for sowing given to farmers
who simultaneously supply raw materials for production and trade goods
Expected credit losses from customer receivables
| R ‘000 | ||
| 2024 | 2023 | |
| Balance as of 1 January | 3,738 | 4,263 |
| Impaired receivables write-off | (1,404) | (266) |
| Reversal of impaired receivables | -) | (258) |
| Balance as of 31 December | 2,3381 | 3,738 |
The ageing analysis of outstanding receivables from customers where no impairment has been made is shown in
the following table:
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Not yet due | 7,625 | 5,378 |
| 0-90 days past due | 2,046 | 2,060 |
| 91-180 days past due | 169 | 259 |
| 181-360 days past due | 59 | 62 |
| > 360 days past due | 174 | 34 |
| 10,073 | 7,793 |
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
58
18. RECEIVABLES FROM CUSTOMERS, STATE AND OTHER INSTITUTIONS AND OTHER RECEIVABLES
(CONTINUED)
b) Receivables from state and other institutions
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| VAT receivables | 1,736 | - |
| Profit tax advance payments | 8 | 168 |
| Other receivables from the State and other institutions | 19 | 21 |
| 1,763 | 189 |
c) Other receivables
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Prepayments made | 1,804 | 266 |
| Interest receivables | 132 | 131 |
| Other receivables | 14 | 14 |
| 1,951 | 411 |
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
59
19. CURRENT FINANCIAL ASSETS
a) Investment in securities
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Investments in bills of exchange | 20 | 20 |
| 20 | 20 |
b) Loans, deposits and similar granted
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Loans to legal entities | 1,417 | 1,117 |
| Short-term loans to natural persons | 16 | 16 |
| 1,433 | 1,133 |
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
60
19. CURRENT FINANCIAL ASSETS (CONTINUED)
Movements of given loans and deposits in 2024
| in EUR ‘000 | |||||
| Transfer from non- | |||||
| 1 January 2024 | Increase in loans given | Collection of given loans/deposits | current to current loans and vice | 31 December 2024 | |
| versa | |||||
| Given long-term loans | |||||
| Given loans to natural persons | 21 | - | - | (14) | 7 |
| Total long-term loans | 21 | - | - | (14) | 7 |
| Short-term loans | |||||
| Given loans to natural persons | 16 | 3 | (17) | 14 | 17 |
| Given loans to related parties | 1,096 | 1,660 | (1,650) | - | 1,106 |
| Given loans to companies | 1,117 | 300 | - | - | 1,417 |
| Total short-term loans | 2,229 | 1,963 | (1,667) | 14 | 2,540 |
| TOTAL | 2,250 | 1,963 | (1,667) | - | 2,547 |
Movements of given loans and deposits in 2023
| in EUR ‘000 | |||||
| Transfer from non- | |||||
| 1 January 2023 | Increase in loans given | Collection of given loans/deposits | current to current loans and vice | 31 December 2023 | |
| versa | |||||
| Given long-term loans | |||||
| Given loans to natural persons | 15 | 22 | - | (16) | 21 |
| Total long-term loans | 15 | 22 | - | (16) | 21 |
| Short-term loans | |||||
| Given loans to natural persons | 4 | 8 | (12) | 16 | 16 |
| Given loans to related parties | 822 | 1,310 | (1,036) | - | 1,096 |
| Given loans to companies | 1,117 | - | - | - | 1,117 |
| Total short-term loans | 1,943 | 1,318 | (1,048) | 16 | 2,229 |
| TOTAL | 1,958 | 1,340 | (1,048) | - | 2,250 |
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
61
20. CASH AND CASH EQUIVALENTS
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Bank accounts | 276 | 955 |
| Bank accounts – foreign currency | - | - |
| 276 | 955 |
21. PREPAID EXPENSES AND ACCRUED INCOME
| 31 December | 31 December | |
| 2024 | 2023 | |
| Prepaid expenses | 66 | 83 |
| 66 | 83 |
Movements in prepaid expenses during the year were as follows:
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Balance as of 1 January | 83 | 51 |
| Increase in prepaid expenses | 1,147 | 612 |
| Decrease in prepaid expenses | (1,164) | (580) |
| Balance as of 31 December | 66 | 83 |
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
62
22. CAPITAL AND RESERVES
Equity represents own permanent sources of funding the operations of the Company. It consists of the share capital,
legal reserves, revaluation reserves, retained earnings and the result for the year.
By decision of the Assembly of the Company in 2012 Granolio d.o.o. was transformed into a joint stock company
by issuing ordinary shares. The share capital of the Company in the amount of EUR 664 thousand has been divided
into 500,000 ordinary shares of the "A" series, each with a nominal amount of EUR 1.33.
The new legal form of the Group was registered at the Commercial Court in Zagreb on 21 February 2012.
Pursuant to the decision of the Assembly, the share capital of the Company was increased from EUR 664 thousand
to EUR 1,593 thousand by transferring retained earnings in the amount of EUR 929 thousand. The share capital
was increased through an issue of ordinary shares with a nominal value of EUR 1.33 per share, subscribed by the
shareholders in proportion to their respective shares in the Company's capital as of that date. The share capital
increase was registered at the Commercial Court in Zagreb on 28 September 2011.
Pursuant to the decision of the Assembly dated 2 September 2014, the share capital was increased by an additional
contribution of EUR 931,240.30 from EUR 1,593 thousand to EUR 2,523,914.00. Based on a public invitation to the
subscription of the new shares, the share capital was increased by cash contributions made based on an issue of
701,643 new non-materialised shares in the nominal amount of EUR 1.33 per share at a single final issue price per
share of EUR 17.79. The Company made a public invitation to subscribe minimum 671,642 up to maximum 789,157
new shares. The share subscription took place in the period from 25 to 27 November 2014.
As of 31 December 2017, the Company's subscribed capital, as registered in the court registry, amounts to EUR
2,523,914.00. The total number of shares is 1,901,643, and the nominal value per share amounts to EUR 1.33. The
result of the sale of shares through the public offering is also capital gain amounting to EUR 11,547 thousand, which
in the period from 1 January 2014 to 31 December 2015 had been decreased by recapitalization costs incurred in
that period of total value of EUR 374 thousand
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
63
22. CAPITAL AND RESERVES (CONTINUED)
The ownership structure of the share capital on 31 December 2024 is presented below, with the largest 10
shareholders holding 95.89% of the shares at that date::
31 December 2024
| 31 December 2024 | 31 December 2023 | |||
| Number of shares in thousands | % of ownership | Number of shares in thousands | % of ownership | |
| Filipović Hrvoje | 1,105 | 58.11% | 1,105 | 58.11% |
| Interkapital vrijednosni papiri d.o.o. | 379 | 19.90% | 379 | 19.90% |
| OTP banka d.d. | 149 | 7.83% | 149 | 7.83% |
| C.I.M Banque | 105 | 5.52% | 105 | 5.52% |
| Auctus j.d.o.o. | 38 | 2.00% | 38 | 2.00% |
| Agram banka d.d. | 21 | 1.11% | 26 | 1.11% |
| OTP banka d.d./1MO | 14 | 0.74% | 14 | 0.74% |
| OTP banka d.d./ SZAIF d.d. | - | - | 6 | 0.30% |
| Katranček Marko | 4 | 0.19% | 4 | 0.19% |
| Mitrović Davor | 4 | 0.19% | 4 | 0.19% |
| Lončarić Davor | 3 | 0.17% | 3 | 0.17% |
| Other | 80 | 4.24% | 69 | 3.96% |
| 1,902 | 100.00% | 1,902 | 100.00% |
31 December 2023
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
64
23. LIABILITIES TO BANKS AND OTHER FINANCIAL INSTITUTIONS
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Non-current liabilities | ||
| Bank loans | 16,354 | 6,133 |
| 16,354 | 6,133 | |
| Current liabilities | ||
| Bank loans | 1,261 | 1,254 |
| 1,261 | 1,254 | |
| 17,615 | 7,387 |
A brief overview of loan conditions
The increase in long-term liabilities relates to the debt due to the acquisition of additional milling operations, EUR 2.6
million of long-term liabilities under bank loans relate to loans obtained before the opening of pre-bankruptcy
proceedings. The repayment dynamics are shown below in the Note (23) through an overview of the maturity of
liabilities.
The value of long-term assets encumbered by mortgages for bank loans as of 31 December 2024 amounts to EUR
25,913 thousand.
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
65
23. LIABILITIES TO BANKS AND OTHER FINANCIAL INSTITUTIONS (CONTINUED)
Movement in liabilities to banks and other financial institutions for 2024
Increase in loan
liabilities
Payment of
loan
principal
Transfer from non-
current to current
and vice versa
| Opening balance 1 January 2024 | Increase in loan liabilities | Payment of loan principal | Transfer from non-current to current and vice versa | Closing balance 31 December | |
| 2024 | |||||
| Long-term loans | |||||
| Long-term bank loans | 6,133 | 11,475 | - | (1,254) | 16,354 |
| Short-term loans | |||||
| Short-term bank loans | 1,254 | 3,906 | (5,153) | 1,254 | 1,261 |
| TOTAL | 7,387 | 15,381 | (5,153) | - | 17,615 |
Movement in liabilities to banks and other financial institutions for 2023
Increase in loan
liabilities
| IncOpening balance 1 January 2023 | rease in loan liabilities | Payment of loan principal | Transfer from non-current to current and vice versa | Closing balance 31 December | |
| 2023 | |||||
| Long-term loans | |||||
| Long-term bank loans | 7,386 | - | - | (1,254) | 6,133 |
| Short-term loans | |||||
| Short-term bank loans | 1,134 | 3,298 | (4,432) | 1,254 | 1,254 |
| TOTAL | 8,520 | 3,298 | (4,432) | - | 7,387 |
Payment of
loan
principal
Transfer from non-
current to current
and vice versa
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
66
23. LIABILITIES TO BANKS AND OTHER FINANCIAL INSTITUTIONS (CONTINUED)
The maturity of bank loans is shown as follows:
| in EUR ‘000 | ||||||
| Balance 31 December 2024 | 2025 | 2026 | 2027 | 2028 | From 2029 | |
| Liabilities to banks | 17,615 | 1,261 | 1,254 | 1,874 | 2,197 | 11,029 |
| 17,615 | 1,261 | 1,254 | 1,874 | 2,197 | 11,029 |
24. LOAN LIABILITIES
Opening
balance
| Opening balance 1 January 2024 | Increase in loan liabilities | Repayment of loan principle | Transfer from current to non-current and vice versa | Closing balance 31 December 2024 | |
| Long-term liabilities | |||||
| Long-term liabilities for loans of natural persons | 265 | - | - | 265 | 531 |
| Total long - term loans | 265 | - | - | 265 | 531 |
| Short-term liabilities | |||||
| Short-term liabilities for corporate loans | 1,394 | 4,376 | (1,301) | - | 4,469 |
| Short-term liabilities for loans of natural persons | 1,015 | - | (750) | (265) | - |
| Total short - term loans | 2,409 | 4,376 | (2,051) | (265) | 4,469 |
| TOTAL | 2,674 | 4,376 | (2,051) | - | 5,000 |
Increase
in loan
liabilities
Repayment
of loan
principle
Transfer
from
current to
non-
current
and vice
versa
Closing
balance
31
December
2024
The value of fixed assets encumbered by mortgages for loans from non-financial entities as of 31 December 2024
amounted to EUR 1,356 thousand (31 December 2023: EUR 1,286 thousand).
Long-term liability for loans from individuals matures by the end of 2027.
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
67
24. LOAN LIABILITIES (CONTINUED)
Opening
balance
| balance 1 January 2023 | Increase in loan liabilities | Repayment of loan principle | Transfer from current to non-current and vice versa | Closing balance 31 December 2023. | |
| Long-term liabilities | |||||
| Long-term liabilities for loans of natural persons | 265 | - | - | 265 | |
| Total long - term loans | 265 | - | - | - | 265 |
| Short-term liabilities | |||||
| Short-term liabilities for corporate loans | 1,394 | - | - | - | 1,394 |
| Short-term liabilities for loans of natural persons | 265 | 750 | - | - | 1,015 |
| Total short - term loans | 1,659 | 750 | - | - | 2,409 |
| Long-term liabilities | 1,924 | 750 | - | - | 2,674 |
Increase in loan
liabilities
Repayment
of loan
principle
Transfer from
current to non-
current and vice
versa
Closing balance
31 December
2023.
The value of fixed assets encumbered by mortgages for loans from non-financial entities as of 31 December 2023 amounted to EUR 1,286 thousand (31 December 2022: EUR
1,427 thousand). The mortgage is based on the assets under a new loan agreement concluded during 2021.
Long-term liability for loans from individuals matures by the end of 2025.
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
68
25. LIABILITIES FOR SECURITIES
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Long-term liabilities under securities | 333 | 499 |
| Short term liabilities under securities | 166 | 166 |
| 499 | 665 |
Liabilities for securities relate to liabilities for bills of exchange to CIM Banka companies EUR 499 thousand (31 December 2023: EUR 665 thousand).
Movement of liabilities from securities in 2024:
Opening balance
| Opening balance | Increase in liabilities | Transfer from long- | Closing balance 31 | ||
| 1 January 2024 | from securities | Repayment | term to short-term | December 2024 | |
| Long-term liabilities | |||||
| Liabilities under securities | 499 | - | - | (166) | 333 |
| Short-term liabilities | |||||
| Liabilities under securities | 166 | - | (166) | 166 | 166 |
| TOTAL | 665 | - | (166) | - | 499 |
Increase in liabilities
from securities
Repayment
Transfer from long-
term to short-term
Closing balance 31
December 2024
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
69
25. LIABILITIES FOR SECURITIES (CONTINUED)
Movement of liabilities from securities in 2023:
Opening balance
| Opening balance | Increase in liabilities | Transfer from long- | Closing balance 31 | ||
| 1 January 2023 | from securities | Repayment | term to short-term | December 2023 | |
| Long-term liabilities | |||||
| Liabilities under securities | 665 | - | - | (166) | 499 |
| Short-term liabilities | |||||
| Liabilities under securities | 246 | - | (246) | 166 | 166 |
| TOTAL | 911 | - | (246) | - | 665 |
Increase in liabilities
from securities
Repayment
Transfer from long-
term to short-term
Closing balance 31
December 2023
The maturity of the securities is shown as follows:
| in EUR ‘000 | ||||||
| Balance 31 December 2024 | 2025 | 2026 | 2027 | 2028 | From 2029 | |
| Long-term liabilities under securities | 499 | 166 | 166 | 166 | - | - |
| 499 | 166 | 166 | 166 | - | - |
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
70
26. SHORT-TERM LIABILITIES
(a) Liabilities for received advances
| 31 December 2024 | 31 December 2023 | |
| Liabilities for received advances | 1,002 | 1,096 |
Advances received on 31 December 2024 refer to advances related to field crops.
(b) Liabilities to suppliers
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Suppliers in the country | 15.481 | 6.049 |
| Suppliers abroad | 792 | 334 |
| 16.273 | 6.383 |
Ageing structure of trade payables on 31 December 2024:
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Not yet due | 11,419 | 4,631 |
| 0 - 90 days | 4,542 | 1,494 |
| 91 - 180 days | 237 | 159 |
| 181 - 360 days | 70 | 25 |
| > 360 days | 23 | 74 |
| 16,291 | 6,383 |
(c) Liabilities for taxes, contributions and similar benefits
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Taxes and contributions from and on salaries | 146 | 96 |
| VAT liabilities | - | 447 |
| Other liabilities for taxes and contributions | 44 | 33 |
| 190 | 576 |
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
71
26. SHORT-TERM LIABILITIES (CONTINUED)
(d) Accrued expenses and deferred income
| 31 December 2024 | 31 December 2023 | |
| Accrued expenses | 20 | |
| Deferred income | 683 | 766 |
| 683 | 786 |
Deferred income refers to grants in 2024 related to the construction of solar photo panels.
(e) Other short-term liabilities
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Liabilities to employees | 276 | 197 |
| Liabilities for interests to financial institutions | 487 | 48 |
| 763 | 245 |
27. CONTINGENT LIABILITIES
As of 31 December 2024, the Company has liabilities under lease agreements totalling EUR 148 thousand that
do not meet the recognition criteria in accordance with IFRS 16 and have not yet been realized or reported in the
statement of financial position.
The contracted lease payment for the premises is presented as follows:
in EUR ‘000
| in EUR ‘000 | ||||||
| 31 | ||||||
| December | From | |||||
| 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | |
| Leases | 148 | 148 | - | - | - | - |
| 148 | 148 | - | - | - | - |
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
72
28. RELATED PARTY TRANSACTIONS
| in EUR ‘000 | ||||
| 31 December 2024 | ||||
| Assets | Liabilities | |||
| Trade and other receivables | Loans and deposits granted | Loans received | Trade and other payables | |
| Zdenačka farma d.o.o., Veliki Zdenci | 530 | 113 | - | - |
| Zdenka- mliječni proizvodi d.o.o., Veliki Zdenci | - | - | - | 21 |
| Stan arka d.o.o., Zagreb | - | 31 | - | - |
| Pet na treću d.o.o. | 490 | 60 | - | 107 |
| SP ONE d.o.o. | - | 138 | - | - |
| Key management | 159 | 765 | - | - |
| 1,179 | 1,107 | - | 128 |
in EUR ‘000
| in EUR ‘000 | ||||
| 31 December 2023 | ||||
| Assets | Liabilities | |||
| Loans and deposits granted | Loans received | Loans received | Trade and other payables | |
| Zdenačka farma d.o.o., Veliki Zdenci | 554 | 241 | - | - |
| Zdenka- mliječni proizvodi d.o.o., Veliki Zdenci | 1 | - | - | 11 |
| Stan arka d.o.o., Zagreb | - | 31 | - | - |
| Pet na treću d.o.o. | 489 | 60 | - | 32 |
| SP ONE d.o.o. | - | - | - | 1,099 |
| Key management | 144 | 765 | - | - |
| 1,188 | 1,097 | - | 1,142 |
Income and expenses for the years 2024 and 2023, resulting from transactions with related parties, are as follows:
| in EUR ‘000 | ||||
| 2024 | 2023 | |||
| Income | Expenses | Income | Expenses | |
| Zdenačka farma d.o.o., Veliki Zdenci | 859 | 126 | 883 | 126 |
| Zdenka- mliječni proizvodi d.o.o., Veliki Zdenci | 6 | 18 | 806 | 1 |
| SP ONE d.o.o. | - | - | - | - |
| Pet na treću d.o.o. | 2 | 412 | 1 | 290 |
| Key management | 16 | - | 16 | - |
| 883 | 556 | 1,706 | 417 |
The Company's key management consists of members of the Management Board and Supervisory Board of
Granolio d.d.
Remuneration paid to key management during 2024 amounted to EUR 349 thousand (in 2023: EUR 270
thousand).
During 2024, EUR 24 thousand were paid to the members of the Supervisory Board in the form of remuneration
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
73
29. EARNING PER SHARE
| in EUR ‘000 | ||
| 31 December | 31 December | |
| 2023 | 2022 | |
| Profit | 2,820 | 1,970 |
| Profit attributable to the shareholders | 2,820 | 1,970 |
| Weighted average number of ordinary shares used in the calculation of the basic earnings per share | 1,901,643 | 1,901,643 |
| Earnings per share (in EUR and cent) | 1.48 | 1.04 |
30. RISK MANAGEMENT
30.1. Financial risks
Equity risk management
Net debt-to-equity (Gearing ratio)
The Company reviews the capital structure annually. As part of this review, the cost of capital and the risks
associated with each class of capital are presented.
The gearing ratio at the date of the statement of financial position was as follows
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Debt (long-term and short-term loans and liabilities for securities) | 18,113 | 8,052 |
| Lease liabilities (non-current and current) | 76 | 55 |
| Loan liabilities (non-current and current) | 5,000 | 2,674 |
| Cash and cash equivalents | (276) | (955) |
| Net debt | 22,913 | 9,826 |
| Equity | 24,025 | 21,209 |
| Debt to equity ratio | 0.95 | 0.46 |
Debt is defined as long-term and short-term loans, liabilities under securities and lease and loan liabilities. Equity
represents the value of capital and reserves.
The Company's capital consists of a debt, which includes received loans and leases, cash and cash equivalents
and of the equity attributable to the shareholders comprising share capital, reserves, retained earnings and profit
for the year.
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
74
30. RISK MANAGEMENT (CONTINUED)
30.1. Financial risks (continued)
Categories of financial instruments
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Financial assets | ||
| Cash | 276 | 955 |
| Loans and receivables | 15,835 | 11,745 |
| Financial liabilities at amortised cost | ||
| Liabilities under loans and securities | 18,113 | 8,052 |
| Trade payables | 16,381 | 7,525 |
| Loan liabilities | 5,000 | 2,674 |
| Lease liabilities | 76 | 53 |
| Other liabilities | 1,765 | 2,126 |
Financial risk management objectives
The Company is partially financed through loans. As a result, the Company is subject to the influence of interest
rate changes. The Company is also exposed to credit risk which arises from the sales it has made with deferred
payment.
The Company seeks to reduce the effects of these risks to the lowest possible level.
Price risk management
The largest market on which the Company provides its services is the market of the Republic of Croatia. The
Company's Management Board determines the prices of the services based on market prices. The purchase
function is centralised, which provides the Company an image of a respectable customer with a good starting
negotiating position.
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
75
30. RISK MANAGEMENT (CONTINUED)
30.1. Financial risks (continued)
Credit risk
The Company is exposed to the risk of default of a portion of its trade receivables. The Company transacts
generally with retail chains with which it has a long history of cooperation. As a result, the Company's presents
mainly to the extent it reflects potential issues in the retail industry. The Company seeks to minimise its credit risk
exposure by monitoring the financial position of its customers, applying strict collection measures and obtaining
various instruments of collateral such as promissory notes and bills of exchange.
In addition to credit risk arising from trade debtors, the Company is also exposed to credit risk from dealing with
subcontractors in the production of grains and oleaginous plants, as it extends credit to them for required seeds
and intermediary products during the sowing season. The subcontractors generally settle the liabilities for the
intermediary products and seeds by delivering oleaginous plants and crops if the parties agree on the product
price during the harvest season. It is possible and it happens that, in practice, some cooperative farmers fail to
produce crops and oleaginous plans in quantities sufficient to settle the commodity loans for a variety of reasons.
The Company protects itself from such situations by obtaining additional collateral, such as personal guarantees
of the agricultural farm owners, their family members, establishing pledge on the agricultural equipment and
facilities, fiduciary title to harvested crops or grains on stock, co-ownership of the crops, and similar. The
instruments to secure the settlement are negotiated separately with each individual farmer, depending on the
relationship history.
Where an individual subcontractor cannot repay a commodity loan due to unfavourable weather conditions and/or
market prices of crops/oleaginous plants, the Company enters into a deferred payment arrangement with such
subcontractors at a certain interest rate, a settlement arrangement involving the next season's harvest or
settlement in another crop not affected by poor weather conditions (e.g. rain during wheat harvest may reduce
the wheat quality, but at the same time improve the quality of crops harvested in the autumn). It is common for
subcontractors to sow several different types of crops/plants to reduce the risk of poor weather conditions
adversely affecting a particular crop/plant, but also as a safeguard against unfavourable movements in the prices
of a particular crop, i.e. to disperse the risk.
Interest rate risk
Given the level of debt owed to financial institutions, which mostly bears interest at a variable rate based on
benchmark interest rates (EURIBOR, LIBOR, ZIBOR and interest rates on the treasury bills of the Croatian
Ministry of Finance), the Company is exposed to the risk of growth in interest rates. At the reporting date, the
Company did not use any financial instruments to hedge its position from unfavourable interest rate movements.
As the Company borrows both at fixed and variable rates, it is exposed to the interest rate risk. A vast majority of
the loans bear interest at variable rates.
The sensitivity analysis below is based on the risk of changes in interest rates at the date of the statement of
financial position. For variable-rate debt, the analysis is prepared assuming the amount of the liability outstanding
at the date of the statement of financial position was outstanding for the whole year. If the interest rates would
change by 0.5 percent, and all other variables remained constant, there would be a change in the interest expense
of the Company in the amount of HRK 0 on 31 December 2024 (2023: HRK 0).
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
76
30. RISK MANAGEMENT (CONTINUED)
30.1. Financial risks (continued)
Liquidity risk
There is a risk that the Company will not be able to fulfil all its obligations in accordance with their maturity, which
may be caused by inadequate collection of receivables from customers, an unfavourable time structure of debt
maturity or the inability to secure credit financing from financial institutions. To reduce the liquidity, the Company
continuously implements measures of active collection of receivables from customers and monitoring of their
liquidity status, tries to optimize the debt maturity structure and secure free lines of credit with credit institutions
so that it can continue servicing its obligations even in unforeseen situations.
However, the Company cannot provide any guarantees that liquidity risk management will be effective, and that
any liquidity risk will not significantly affect the Company's operations and financial condition
The following tables detail the remaining contractual maturities of the Company's non-derivative financial liabilities.
The tables have been drawn up based on the undiscounted cash flows of financial liabilities by reference to the
earliest date on which the Company can be required to pay. The tables include both principal and interest cash
outflows. The non-discounted amount of interest payments has been derived from interest rate curves at the end
of the reporting period. The contractual maturity is defined as the earliest date on which the Company can be
required to make the payment
| Weighted averageeffective interest rate % | Up to 1 month | 1 to 3 months | 3 months to 1 year | 1 to 5 years | Over 5 years | Total | |
| 31 Dec 2024 | |||||||
| Non- | |||||||
| interest- | |||||||
| bearing | 5.409 | 4.279 | 8.477 | - | - | 18.165 | |
| Interest | |||||||
| bearing | 125 | 252 | 5.529 | 8.036 | 9.299 | 23.241 | |
| 5.534 | 4.531 | 14.006 | 8.036 | 9.299 | 41.406 | ||
| 31 Dec 2023 | |||||||
| Non- | |||||||
| interest- | |||||||
| bearing | 3,711 | 2,063 | 4,061 | - | - | 9,835 | |
| Interest | |||||||
| bearing | 188 | 1,069 | 2,424 | 5,967 | 1,119 | 10,767 | |
| 3,899 | 3,132 | 6,485 | 5,967 | 1,119 | 20,602 |
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
77
30. RISK MANAGEMENT (CONTINUED)
30.1. Financial risks (continued)
Liquidity risk (continued)
The following table details the Company’s remaining contractual maturity for its non-derivative financial assets.
The table has been drawn up based on the undiscounted contractual maturities of the financial assets including
interest that will be earned on those assets. The inclusion of information on non-derivative financial assets is
necessary to understand the Company's liquidity risk management as the liquidity is managed on a net asset and
liability basis.
| Weighted averageeffective interest rate % | Up to 1 month | 1 to 3 months | 3 months to 1 year | 1 to 5 years | Over 5 years | Total | |
| 31 Dec 2024 | |||||||
| Non-interest- | |||||||
| bearing | 3.882 | 981 | 7.738 | 489 | - | 13.090 | |
| Interest | |||||||
| bearing | 147 | 132 | 546 | 1.914 | 5 | 2.745 | |
| 4.029 | 1.113 | 8.284 | 2.403 | 5 | 15.835 | ||
| 31 Dec 2023 | |||||||
| Non-interest- | |||||||
| bearing | 3,653 | 3,207 | 2,015 | 489 | - | 9,364 | |
| Interest | |||||||
| bearing | 243 | 3 | 1,259 | 871 | 5 | 2,381 | |
| 3,896 | 3,210 | 3,274 | 1,361 | 5 | 11,745 |
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
78
30. RISK MANAGEMENT (CONTINUED)
30.1. Financial risks (continued)
Fair value measurement
Fair value is the amount for which an asset could be exchanged or a liability settled between informed and willing
parties under normal market conditions. The Management's position is that the fair value of cash and cash
equivalents, placements with banks and other receivables, does not differ significantly from their carrying value
due to the short-term nature of these financial instruments.
Most interest-bearing loans have a variable interest rate which is also the market rate, so there is not a significant
difference between their carrying and fair value.
The Company measures fair value using a division that reflects the importance of the inputs used in making the
measurement:
Level 1: quoted prices in active markets for assets and liabilities;
Level 2: application of valuation techniques, comparison of the fair value of another instrument that is substantially
the same, discounted cash flows or other valuation techniques;
Level 3: application of valuation techniques where data affecting the determined fair value of financial instruments
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
79
30. RISK MANAGEMENT (CONTINUED)
30.2. Industry risks
One of the food industry risks arises from the fact that eating and diet habits of consumers as well as consumer
awareness of the impact of the diet on their health have significantly evolved over the past two decades. Such
trends pose an imperative for the producers in terms of seeking to expand the existing line of products and
further improve the quality of the current products.
Flour production
Flour production could be adversely affected by extraordinary events such as fire, explosions, failure of production
equipment, prolonged or unplanned maintenance, construction of roads or closing of main transport routes,
flooding, storms, or other extreme weather conditions. Although the Company has arranged an insurance
coverage for its facilities, the insurance coverage is inherently limited by caps on insured sums and may not be
sufficient to cover all the costs. In addition, the Company may be exposed to costs not covered by insurance.
30.3. Regular operational risks
Market risk
The food product demand is relatively steady in relation to product prices. Factors impacting the demand are of
the following nature: demographic (increase of population), economic (increase in the number of tourists and food
consumption at hospitality facilities; higher production volumes in the confectionery and baking industries),
political (EU membership that enables seamless export to both EU Member States, but also a higher competition
on domestic markets on the part of producers coming from other Member States).
Input commodity and product delivery risks
Wheat, being the key flour production input, has a significant influence on the flour production and prices, both in
terms of wheat production and price levels. A key domestic source of the input is represented by a broad base of
farmers with whom the Company cooperates by making deliveries of seeds and other intermediate products
required for sowing and accepting settlement using mostly offsetting arrangements involving produced
wheat/crops at a pre-defined purchase price.
The input commodity purchase risk is mitigated, as the Company has established a sales division that is present
on international commodity markets and is currently able to purchase, at a time, sufficient quantities of wheat at
the current market price. Croatia's accession to the European Union has lifted all administrative barriers to input
commodity purchases from the territory of the European union.
The product delivery risk arises from a potential discontinued production as a result of fault of the milling plant or
cancellation of existing contract with the flour transporter.
The Company seeks to mitigate the production downtime risk by hiring staff resident in the vicinity of the mill plants
who possess adequate skills to eliminate fault within a reasonable time. As the expansion of the milling operations
is expected to bring a higher level of finished product orders, the warehousing capacities are being expanded to
accommodate sufficient stock required to make timely deliveries.
The Company seeks to mitigate the product delivery risk arising from the potential cancellation of the contract
with the flour transporter by relying on a broad base of transporters without being concentrated to either
transporter by the scope of the services used.
Competition risk
The Company sells its products and goods mainly on the domestic market. As a result of Croatia's accession to
the European Union, the administrative burden to entering the markets of other Member States has become
smaller, which also applies to competitors entering the Croatian market.
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
80
30. RISK MANAGEMENT (CONTINUED)
30.3. Regular operational risks (continued)
The flour market strives for increasing concentration, i.e. reducing the total number of flour producers (by enlarging
or shutting down small mills) to achieve economies of scale to lower production costs per unit of product and thus
strengthen the competitive position in the market. To this end, in May 2014, the Company acquired the milling
business of the companies Belje d.d. Darda and PIK Vinkovci d.d. from the Agrokor concern. With Croatia's
accession to the European Union, the Company is no longer faced only with domestic competition, which is why
the need to strengthen competitiveness is even more pronounced.
Key supplier and key customer concentration risk
The Company's major suppliers are those supplying the raw material and seeds for sowing. The Company seeks
to cooperate with as many suppliers as possible to mitigate the risk of discontinued cooperation with a key
supplier. Despite this, the Company cannot provide any assurance that a potential termination of cooperation with
a key supplier will not have a significant impact on the Company's performance and financial position.
The risk of change in ownership
The majority shareholder of the Company is Mr Hrvoje Filipović, who holds an ownership interest of 58.11%. As
the majority shareholder, Mr Hrvoje Filipović has the controlling influence over the shareholders of the Company,
by means of the rights and powers pertaining to him as a Company shareholder. The majority share in the
Company enables Mr Filipović to exercise his influence in all decisions made in a General Shareholders'
Assembly. No assurance can be provided that the influence of Mr Filipović, as the majority shareholder, will not
have a significant effect on the performance and financial condition of the Company.
Working capital risk
Managing working capital successfully is a key area of the Company's operations. The Company may become
exposed to a pressure both by competitors and key suppliers to reduce the settlement period for purchases, while
simultaneously being under pressure from customers to extend the payment periods on sales.
The Company has made significant investments in improving its logistics to improve the inventory turnover ratio
and the operational efficiency ratio. Although the Company has been managing its working capital successfully,
no assurance can be given that this will continue in the future, and the Company's performance and financial
position may become affected.
Input commodity price risk
The operating results are largely influenced by the price of wheat as the key input commodity for the Company's
production. Poor weather conditions, diseases and pests, political instability and other external factors may cause
the volatility of the wheat prices. Overall economic conditions, unforeseeable demand and problems occurring in
the production and distribution, along with potential diseases and pests, as well as weather conditions at the time
of harvest may have a negative impact on the wheat prices. Regardless of the Company's ability to satisfy the
wheat demand on the domestic market, movements in wheat prices on the domestic market are affected by
fluctuations in the wheat prices on global commodity exchanges. The Company's past performance is conclusive
of the past wheat purchase price fluctuations positively correlating with historic flour price fluctuations. However,
a certain period is required for the flour price to become aligned with the wheat price fluctuations, as a result of
which there is a short time frame in which the Company's margin becomes negatively impacted where the wheat
prices increase. Regardless of the past indications of the correlation between the flour and wheat prices, the
Company cannot warrant that a potential future increase in wheat prices will be fully offset with higher flour prices
and that the historic margin levels will be preserved.
The Company seeks to mitigate the risk of changes in wheat prices by participating actively on futures markets.
Granolio has been managing the risks and input commodity purchase prices actively, by using various future
trading techniques on global commodity markets, and without any pronounced open positions.
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
81
30. RISK MANAGEMENT (CONTINUED)
30.3. Regular operational risks (continued)
Dependence on the management and key personnel
The Company relies heavily on its staff as one of its key competitive advantages. This means that the Company
should exercise great efforts in an attempt to retain top personnel at all levels in order to preserve its leading
position on the market. The Company cannot warrant that it will be able to retain its current management and
other leading employees or to attract new top personnel in the future. The potential loss of the current and the
inability to attract new key personnel could have a significant impact on the Company's operations.
IT risks
The Company relies on a number of IT systems in support of the efficient management of the distribution
capacities, for the purpose of communication with its customers and suppliers, human resource management and
performance evaluation and to collect all information for management decision-making purposes. The Company's
operations are becoming increasingly dependent on the use of such systems, and any system downtime or failure
resulting from malicious codes, hacking attacks, hardware or software issues or otherwise could have a significant
impact on the Company's operations and financial position.
Antitrust and competition law non-compliance risk
It is a part of the overall strategy of the Company to become the leading flour producer on the Croatian market
and flour supplier in the region, which may render the Company non-compliant with the market competition rules.
The Croatian legislation governing market competition, which is aligned with the EU rules, forbids any form of
abuse of the dominant position, especially any direct or indirect imposition of purchase or selling prices or other
unfair commercial terms and conditions, limiting production, markets or technological progress to the
disadvantage of customers, or imposing any unequal conditions for the same type of deals with other enterprises
that may bring them in a disadvantaged competitive position, or additional obligations to counterparties as a
prerequisite for entering contracts with them that are in their nature and according to the customary commercial
practice not directly related to the subject matter of such contracts.
In addition, the legislation forbids any agreements, decisions, associations or joint actions on the part of
enterprises aimed at, or resulting in infringing the competition rules on a given market.
Although the Company is not aware of any infringement of competition rules and has never been a respondent in
proceedings initiated before the Competition Agency, it cannot warrant that no such proceedings will ever be
initiated. Any infringement of the competition rules is subject to significant administrative sanctions. For instance,
a fine of up to 10% of the total annual revenue generated in the most recent year for which final financial
statements are available may be imposed for entering into non-permissible deals or abuse of the dominant
position. Therefore, any administrative sanction could have an adverse impact on the financial position and
performance of the Company.
To mitigate this risk, the Company intends to arrange additional education for its employees in the area of market
competition rules and implement procedures to be followed in concluding contracts and undertaking other actions
that may result in a breach of competition rules and make sure that the procedures are consistently followed.
Furthermore, before undertaking any future acquisition, the Company may have to ask from the Competition
Agency to assess the eligibility of the intended concentration. The Company cannot warrant that a concentration
will be assessed as permissible or permissible under conditions precedent, such as the disposal of certain assets
or certain other steps that might affect the revenue, profit or cash flows of the Company. The concentration
eligibility assessment itself could affect the timing of the acquisition.
Litigation risk
As any business entity, so is also the Company exposed to the risk of becoming a counterparty in legal actions
initiated before courts, regulatory or other competent authorities that may arise from its ordinary course of
business. These include mainly claims involving the Company's debtors or suppliers. The risk of potential future
claims raised by customers on the grounds of losses or injuries caused by the consumption of products cannot
be excluded. The Company cannot provide any assurance that the outcome of potential future legal and regulatory
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
82
30. RISK MANAGEMENT (CONTINUED)
30.3. Regular operational risks (continued)
The risk of obligations or losses not covered by insurance
The level of insurance coverage is common for the industry in which the Company operates. The insurance
policies of the Company include mainly those providing coverage for occupational injuries, machinery faults,
property damage, as well as crop insurance. Still, not all contingent liabilities and losses can be covered by
insurance, and the Company cannot warrant that it will not be exposed to situations in which no insurance
coverage will be available or that such situations would not have a material impact on the Company's operations
and financial condition.
30.4. General risks
Business environment risk
The business environment risk includes political, legal and macroeconomic risks prevailing in the business
environment of the Company, which is primarily the Croatian market on which the Company generates almost
87% of its total revenue (data for 2020), followed by the markets of Serbia, Italy, Bosnia and Herzegovina,
Slovenia, Hungary and Romania.
The governments in power so far have introduced economic reforms to develop and stabilise free market economy
by privatising state-owned companies, attracting foreign direct investments, and implemented reforms required in
the pre-accession stage. Despite the significant progress towards establishing a full market economy, reaching
the level of infrastructure of West European countries will take several more years and additional investments.
The Company cannot warrant that Croatia will fully implement the intended reforms or that the political
environment will favour their implementation. In addition, the Company cannot warrant that the Government in
power will not introduce new regulations, fiscal or monetary policies, including taxation, environmental and public
procurement policy, an indemnity policy for nationalised property or a new foreign exchange policy.
The legal framework of the Republic of Croatia is still evolving, which may give rise to a certain level of legal
uncertainty. As a result, the Company may come into a position of not being able to succeed in exercising or
protecting some of its rights.
The Company's operations are subject to the impact of the macroeconomic environment, economic conditions
and economic activity developments. In the periods of disadvantaged economic conditions, the Company could
have problems in expanding its business or meeting its financial obligations. Under such circumstances, the
Company's access to financial markets could become more difficult, and its borrowing costs could increase, which
would affect the performance and financial position of the Company. If the current economic situation would
persist, the Company, its customers and suppliers could face difficulties in accessing capital markets, which could
have an adverse impact on the current revenue and profit levels.
The Company is also under the influence of international trends, as wheat, being the Company's key input
commodity, is an exchange traded commodity and hence subject to potential political instability in the major wheat
producing countries (China, Russia, the USA). Still, as already mentioned above, the Company is able to meet its
core input commodity needs entirely from domestic sources, while seeking to neutralise any fluctuations in the
commodity price with an active access to futures markets.
Granolio d.d., Zagreb
Notes to the unconsolidated financial statements (continued)
for the year ended 31 December 2024
83
30. RISK MANAGEMENT (CONTINUED)
30.4. General risks (continued)
Risk of changes in legal framework
As a food producer, the Company is exposed to strict regulatory requirements applicable to human foods, product
safety, occupational health and safety, security and environmental protection (including those applicable to waste
waters, sewage, clean air, noise, waste disposal, environmental cleaning and similar), as well as product
ingredients and contents, packaging, designation, advertising and market competition. Food production generates
waste, emission of hazardous agents into the atmosphere and waters, which is why the Company has the
obligation to obtain various licences and adhere to a variety of regulation. Health, safety and environmental
regulations in Europe and other developed countries are becoming increasingly stringent, and their
implementation is increasingly gaining on importance. The Company seeks to keep pace and anticipate any such
changes, as any non-compliance could result in various sanctions. The Company considers being currently
compliant with all the applicable regulations and rules as well as deadlines set by different regulators. However,
it cannot warrant that it will not incur significant costs to eliminate any potential instances of non-compliance or
the resulting negative publicity, or to adapt to amended regulations, as well as that the resulting impact on its
operations and financial condition would not be significant. For instance, the Company is the current owner or
lessee of a number of properties and facilities, including production plants and distribution centres some of which
were previously used for other commercial or industrial purposes. Although the Company is currently not aware
of any facts that would give rise to additional obligations regarding the environmental status of the properties and
facilities, any contamination identified as a result of current or previous operations and the resulting obligation to
eliminate it could cause significant costs to the Company. Additional regulations, or interpretations of current
regulations, could be introduced in the future, which may affect the Company's business and products. The
Company cannot provide any warranty that any costs of complying with any such future initiatives will not have a
