Granolio Group
Consolidated 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 Group, Zagreb
Contents
Management Report ................................................................................................................................................. 1
Consolidated Statement on the application of the Corporate Governance Code ..................................................... 9
Responsibility of the Management Bord for the consolidated financial statements ................................................ 14
Independent Auditor's Report ................................................................................................................................. 15
Consolidated Statement of Comprehensive Income ............................................................................................... 23
Consolidated Statement of Financial Position ........................................................................................................ 24
Consolidated Statement of Changes in Equity ......................................................... Errorspan>fined.
Consolidated Statement of Cash Flows .................................................................................................................. 27
Notes to the consolidated financial statements……………………………………………………..………………........28
Granolio Group, Zagreb
1
Management Report
General information on Granolio Group
The Company's personal tax identification number (PIN) is 59064993527, and its 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
Tihomir Osmak, Member
Davor Štefan, Member
The total amount of the Company's share capital as of 31 December 2024 is EUR 2,523,914 divided into 1,901,643
ordinary shares with a nominal value of EUR 1.327. Since 23 March 2015, the shares have been listed on the
official market of the Zagreb Stock Exchange under ticker GRNL. The majority shareholder of the company is Mr
Hrvoje Filipović, who held 58.11% of the ownership capital on 31 December 2024.
Consolidated Financial Statements of the Group for the period from 1 January to 31 December 2024 represent the
financial statements for parent company and related parties. Related parties (jointly referred to as “the Group”) own
The consolidated financial statements comprise the financial statements of the following related parties:
1. Granolio d.d . (parent company)
2. Zdenačka farma d.o.o.
3. Zdenka – mliječni proizvodi d.o.o.
The core business of the Granolio Group is the production of wheat flour, production of milk and dairy products,
storage of grains and oilseeds, trading cereals, oilseeds and raw materials for agricultural production, and
organization of agricultural production through subcontracting relationships with producers of agricultural products.
The Group could be classified into the following business segments:
1. Milling
2. Wholesale
3. Dairy and cheese production
4. Other - livestock and service industry (drying and storage of grains and oilseeds, receipt of goods to the
purchase and sales lines, lease income).
Granolio Group, Zagreb
2
Management Report (continued)
General information on Granolio Group (continued)
At the end of reporting period, the Group disposed with:
• 3 active mills to produce wheat flour;
• silos for storage of grains and oilseeds with a total capacity of about 96,500 tons;
• 1 dairy farm with a total capacity of 450 milking cows;
• approximately 170 hectares of agricultural land;
• milk processing production capacities of 11.4 thousand tons of finished products;
Group’s mills production capacity as of 31 December 2024 is shown in the following table.
Mills production capacity as of 31 December 2024:
| Mill | ton/24h |
| Farina | 320 |
| Kopanica | 230 |
| Tena | 180 |
| 730 |
Subsidiaries
Granolio d.d. holds the 100% equity interest in Zdenačka farma d.o.o.
It exercises the controlling influence in the decision-making process at Zdenka - mliječni proizvodi d.o.o. which has
since 2011 been consolidated as part of the Granolio Group.
The owner of minority interest in Zdenka – mliječni proizvodi d.o.o. is Cautio d.o.o. from Našice.
Granolio d.d. has a minority interest in companies Žitozajednica d.o.o.
Granolio Group, Zagreb
3
Management Report (continued)
Significant business events in the current accounting period
Granolio d.d.
The year 2024 was marked by the successful acquisition of an additional milling business. The
acquisition achieved an increase in the utilization of production capacities, which resulted in an increase
in wheat flour sales and market share, as well as an increase in exports. This acquisition represents a
key milestone in the development of the Company and enables us to strengthen our economic strength
and establish a leadership position in the milling industry in Croatia and the surrounding area.
According to the CNB, core inflation is expected to slow down in Croatia from 4.0%to 3.5% in 2025.
The Company's priorities remain maintaining a positive health bulletin for employees, ensuring the
smooth continuation of production and continuous supply of customers and consumers, and social
responsibility in the broadest sense.
The Company will continue to focus on achieving business goals, but also on creating a foundation that
will bring good results in the coming years, i.e. long-term successful business and development t.
in EUR ‘000
| in EUR ‘000 | ||||
| Granolio d.d. | 1-12 2024 | 1-12 2023 | change | |
| Operating income | 61,794 | 54,065 | 7,729 | 14% |
| Operating expenses | 58,148 | 51,845 | 6,303 | 12% |
| EBIT | 3,646 | 2,220 | 1,426 | 64% |
| EBIT margin % | 6% | 4% | ||
| EBITDA | 4,728 | 3,269 | 1,455 | 45% |
| EBITDA margin % | 8% | 6% | ||
| Net financial result | (314) | 224 | (538) | 240% |
| Net result for the period | 2,820 | 1,970 | 850 | 43% |
Granolio Group, Zagreb
4
Management Report (continued)
Significant business events in the current accounting period (continued)
Zdenačka farma d.o.o.
Sales revenue in 2024 is about 4% higher than sales revenue in the previous period. Revenue from milk sales is
9% higher than in the previous year, while revenue from sales of merchandise fell by 6%. In 2024, the total milk
delivery of the company Zdenačka farma amounted to 5.2 million kg (2023: 4.8 million kg). The average selling
price of milk achieved in 2024 is 2% higher than the average selling price achieved in the previous year.
Financial indicators for 2024 for the company Zdenačka farma d.o.o. are presented in the following table.
Zdenačka farma d.o.o.
in EUR ‘000
| 1-12 2024 | 1-12 2023 | change | ||
| Operating income | 5,043 | 4,624 | 419 | 9% |
| Operating expenses | 4,345 | 4,268 | ||
| EBIT | 697 | 356 | 341 | 96% |
| EBIT margin % | 14% | 8% | ||
| EBITDA | 1,183 | 844 | 339 | 40% |
| EBITDA margin % | 23% | 18% | ||
| Net financial result | (134) | (136) | 2 | 1% |
| Profit tax | 103 | 39 | ||
| Net result | 461 | 181 | 279 | 154% |
| margin % | 9% | 4% |
Zdenka – mliječni proizvodi d.o.o.
Zdenka's total production capacity amounts to 11.4 thousand tons of finished products (cheese). Its own brand is
"Zdenka", but the company also produces a significant number of products under brand names. Zdenka's
assortment currently includes 18 private brands. In 2024, the company achieved a more favourable operating result
compared to the previous year.
The company's total debt as of 31 December 2024 amounted to EUR 8 million 31 December 2023: EUR 10 million).
The debt consists of EUR 6.1 million of long-term liabilities to financial institutions (31 December 2023: EUR 7.8
million) and EUR 1.7 million of short-term liabilities to financial institutions maturing in 2024 (31 December 2023:
EUR 2.1 million).
The financial indicators for 2024 for the company Zdenka–mliječni proizvodi d.o.o. are presented in the following
table.
Zdenka - mliječni proizvodi d.o.o.
in EUR ‘000
| 1-12 2024 | 1-12 2023 | change | ||
| Operating income | 37,960 | 35,518 | 2,442 | 7% |
| Operating expenses | 35,098 | 34,233 | ||
| EBIT | 2,862 | 1,285 | 1,577 | 123% |
| EBIT margin % | 8% | 4% | ||
| EBITDA | 4,853 | 3,070 | 1,783 | 58% |
| EBITDA margin % | 13% | 9% | ||
| Net financial result | (45) | (75) | 30 | 40% |
| Profit tax | - | 112 | ||
| Net result | 2,817 | 1,098 | 1,719 | (157%) |
| margin % | 7% | 3% |
Granolio Group, Zagreb
5
Management Report (continued)
Significant business events in the current accounting period (continued)
Granolio Group
Granolio Group's operating income is 11% higher than in the previous year. A more detailed analysis of income is
presented below.
The Group's total debt is higher than in the previous year by EUR 10 million. The parent company's total debt
increased due to new long-term debt for the purpose of acquiring additional milling operations, and the company
Zdenka – mliječni proizvodi d.o.o. recorded an increase in total debt due to financing part of the investment in
production facilities (50% was financed from a bank loan, and the rest from EU fund grant).
The financial indicators for 2024 for the Granolio Group are presented in the following table.
in EUR ‘000
| 31.12.2024 | 31.12.2023 | change | ||
| Net assets (capital and reserves)* | 28,440 | 23,354 | 5,086 | 22% |
| Total debt | 31,307 | 22,057 | 9,250 | 42% |
| Cash and cash equivalents | 505 | 2,541 | (2,036) | (80%) |
| Loans granted, deposits and | ||||
| similar** | 3,149 | 5,523 | (2,374) | (43%) |
| Net debt | 27,652 | 13,993 | 13,659 | 98% |
| Net debt/EBITDA | 2,57 | 1,95 | ||
| EBITDA for the past 12 months | 10,759 | 7,183 |
Total debt as of 31 December 2024 includes financial liabilities of the parent company to financial institutions and
companies amounting to EUR 23 million (31 December 2023: EUR 10.7 million), liabilities of the company Zdenka
– dairy products amounting to EUR 8 million euros (31 December 2023: EUR 10 million) and liabilities of the
company Zdenačka farma amounting to EUR 1.5 million (31 December 2023: EUR 1.6 million).
in EUR ‘000
| 1-12 2024 | 1-12 2023 | change | ||
| Operating income | 101,105 | 90,707 | 10,398 | 11% |
| Operating expenses | 93,900 | 86,846 | 7,054 | (8%) |
| EBIT | 7,205 | 3,861 | 3,344 | 87% |
| EBIT margin | 7% | 4% | ||
| EBITDA | 10,764 | 7,182 | 3,581 | 50% |
| EBITDA margin | 11% | 8% | ||
| Net financial result | (992) | (787) | (205) | (26%) |
| Net result for the period | 5,590 | 2,330 | 3,260 | (140%) |
| Group result | 4,181 | 1,837 | 2,345 | (128%) |
| Minority interest | 1,409 | 494 | 915 | (185%) |
Granolio Group, Zagreb
6
Management Report (continued)
Income analysis – Granolio Group
In 2024, the Granolio Group achieved sales revenue totalling EUR 94 million, which is 9% more than the sales
revenue achieved in the previous year.
Sales revenue achieved within the Group during 2024 amounted to EUR 3.7 million (2023: EUR 4.3 million) and
was eliminated from total consolidated revenues.
In EUR '000
Sales revenues are classified into several business segments: milling, dairy, wholesale and others.
The milling segment includes the sale of flour, realized in the parent company; the dairy segment includes the sale
of milk of the company Zdenačka farma and the sale of dairy products of the company Zdenka.
Wholesale includes trade in cereals, oilseeds and raw materials realized in the companies Granolio and Zdenačka
farma. The segment other includes services for drying and storage of cereals and oilseeds provided by Granolio,
sales of cattle in Granolio and income from own production of agricultural products which is part of Zdenačka farma.
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Milling Trading goods Wholesale Other
Consolidated sales income per business segments (2024 vs
2023)
2024 2023
Granolio Group, Zagreb
7
Management Report (continued)
Significant business events after the accounting period and Group's strategic goals
In 2024, geopolitical turmoil continued, the war between Israel and Palestine, along with the current war in Ukraine,
which marked the growth of raw material costs, i.e. production costs. War conflicts contributed to negative
consequences for the entire global economy
The management of the Group undertakes all necessary actions in order to minimize the newly created risks.
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 Group will respond to the overall increase in operating costs by increasing the prices of its products.
Business and investment development plan
Granolio
The Company expects to continue to operate successfully in 2025 and beyond. It is expected that it will successfully
settle all liabilities, including those determined in the pre-bankruptcy procedure, in the manner agreed upon in the
pre-bankruptcy settlement. As far as capital investments are concerned, all plants are technologically advanced to
the maximum and there is currently no need for capital investments.
Zdenačka farma d.o.o.
1. Reduce its financial liabilities to the parent company.
2. In the next two-year period, maintain milk production of 31 kg / cow per day
3. In the next two years, maintain the intercrowding period at less than 400 days
4. Maintain the age of heifers at calving at 24 months
5. Achieve doubling of birth weight in calves in the first 60 days after calving
6. In order to reduce long-term feeding costs, provide additional arable land, from the existing 170 ha to
300-350 ha over the next few years (mostly through tenders for the lease of state agricultural land)
7. During the next period, provide the mechanization necessary for field production and the most efficient
daily operation of the farm
8. Through measure 4.1.2. Manure disposals ensure more efficient disposal of manure and slurry
(manure trailer, slurry tank with depositors, front loader for tractor, scrapers for all stables, channel
system to connect all manure lagoons)
9. Through measure 4.1.1. Investment in the dairy sector to build a dry and heifer barn and a new milking
parlour, a heifer canopy and outlet, hay and straw storage tunnels
Zdenka - mliječni proizvodi d.o.o.
Since privatization until today, Zdenka has invested significant funds in the modernization of production facilities
and continues to enter new investments in order to be able to follow the needs of consumers and market trends.
One of the plans for next year is the construction of a photovoltaic power plant and the production of electricity for
its own needs in order to reduce the impact of a possible further increase in electricity prices on the company's
operations.
The goal is for investments, as before, to be co-financed with EU subsidies
.
Granolio Group, Zagreb
8
Management Report (continued)
Employees
In 2024, the Group employed 501 workers (2023: 430) based on working hours, while as of 31 December 2024, it
employed 450 workers (31 December 2023: 463). The structure of employees per individual company in the Group
is shown in the following graph.
Research and development
In the reporting period, the Group had no research and development projects.
Purchase of own shares
As of the date of issue of the Annual Report of the Management Board, the Group did not engage in any purchases
of its own shares.
Environmental protection
In the area of environmental protection, the Group applies integrated and systematic solutions and implements
environmentally friendly production processes.
Risks
Details about the risks to which the Group is exposed to are presented in detail in the notes to the annual financial
statements.
Employee structure as of 31 December 2024
Granolio 38%
Zdenačka farma 7%
Zdenka 55%
Granolio Group, Zagreb
9
Consolidated Report on the Application of the Corporate Governance Code
The Statement on the Application of the Corporate Governance Code was prepared 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, developed by the Croatian Financial Services Supervisory Agency (HANFA) and the
Zagreb Stock Exchange d.d., in application from 1 January 2020, with deviations from some
recommendations and guidelines of the Code.
Deviations from the recommendations of the Code are limited to provisions whose application is not
practical or feasible at a given time given the business circumstances or is not foreseen given the legal
framework in which the Company operates.
In relation to the recommendations contained in Chapter 1 of the Code, the Company published the
Statute and part of the internal acts prescribed by the Code on its website during 2024 and plans to take
action to expand the number of acts published on its website.
In relation to the recommendations contained in Chapter 2 of the Code, the Company plans to make the
Conflict of Interest Management Policy available on the Company's website during 2024. The Company
has not adopted specific procedures for approving and disclosing transactions between members of the
Management or Supervisory Board and the Company but plans to adopt them during 20424 and applies
the applicable regulations and Conflict of Interest Management Policies governing this area.
In relation to the recommendations contained in Chapters 3 and 4 of the Code, the Supervisory Board,
which consists of male members, in the mandate that began before 2020 set a target of the percentage
of female members of the Supervisory Board and the Management Board that must be achieved in the
next five years, but the detailed plan is still being developed and has not been published in the Annual
Report, and the target that at least one member of the Supervisory Board should be a woman in the
five-year period until 2025 was not achieved in 2024. In this regard, given that all members of the
Supervisory Board who were elected to the Supervisory Board of the Company in 2022 were also
members of the previous Supervisory Board, the data from Article 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 no act was adopted determining the expected minimum time load of each member of the
Supervisory Board at the time of his or her appointment. The Company's Supervisory Board has four
members, two of whom are independent. The Company's Supervisory Board has not established a
nomination committee and a remuneration committee because the Supervisory Board, according to the
provisions of the Statute, has three to five members and performs the 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 consisting of three members, who are also members
of the Supervisory Board, of which one member is independent, and the Company plans to publish the
job description of the established committee of the Supervisory Board (Audit Committee) on its website
during 2025. The Supervisory Board has not evaluated its effectiveness and individual results of its
members, as well as the established committees (Audit Committee) in accordance with the Code but 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 parent company and subsidiaries, but the financial managers of the subsidiaries are
responsible for reporting. No formal act on the management profile for the effective discharge of
management responsibilities has been adopted, given that the management has been operating
effectively for the most part with its current composition for many years. The Management Board did not
assess its own effectiveness and the effectiveness of individual members in 2024 but is preparing to do
the same in relation to its work in 2025.
In relation to Chapter 6 of the Code, as stated above, a remuneration committee has not been
established, and the remuneration policy for Management Board members was adopted in 2024 and
approved at the Company's General Assembly. The remuneration policy for the Management Board
stipulates that a Management Board member is not entitled to payment of remuneration in shares, nor
does it provide for the deferred payment of part of the remuneration or circumstances in which part of
the remuneration of a Management Board member would be withheld or its return would be requested.
The remuneration of the President and members of the Supervisory Board does not provide for a
separate remuneration for membership in established committees of the Supervisory Board. Both
policies are made available on the Company's website.
Granolio Group, Zagreb
10
Consolidated Report on the Application of the Corporate Governance Code (continued)
Regarding the recommendations from Chapter 7 of the Code, internal business control and risk
management are partly carried out through the activities of the Controlling business function, and
partly through the activities of the Company's management bodies and external auditors and
certification companies. Also, in 2024, not all formal policies and procedures from this chapter of
the Code were adopted, but the Company plans to adopt them during 2025.
The Company applies the recommendations from Chapter 8 of the Code, except for Article 72, as
already mentioned, and in relation to the availability of the Company's policies and internal rules,
and the information from Article 74 of the Code has been 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 via the
Company's contact email, which is published on the Company's website, while the Company's
Articles of Association provide for voting at the Company's General Assembly by picking up voting
cards or submitting ballots. Due to personal justified reasons, the Deputy President of the
Supervisory Board was not present at the General Assembly of the Company in 2024.
With regard to the recommendations from Chapter 10 of the Code, in 2025 the Company plans to
implement the activities defined by the adopted policies and identify key stakeholders.
The Company has provided detailed explanations regarding the non-implementation or deviation
from certain recommendations of the Code in 2024 in the annual questionnaire, which is an integral
part of the Code and is submitted to the Zagreb Stock Exchange d.d. together with the annual
financial statements for public disclosure.
Internal audit and risk management
Although the Company does not have an established internal audit function, internal business oversight
and risk management are partly carried out through the activities of the business controlling function.
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 Board and the Supervisory Board of
the Company are investing increased efforts to establish adequate corporate governance and
transparent information, taking into account the Company's structure and organization, strategy and
business goals, the allocation of authority and responsibilities with special emphasis on effective
procedures for identifying, measuring and monitoring and reporting on business risks, as well as
establishing appropriate internal control mechanisms.
The Company has prepared unconsolidated 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 the company Granolio d.d., and for the subsidiary Zdenka – mliječni proizvodi d.o.o., in which the
Company is a co-owner.
Sig nific ant shareh olders a nd limit ed sh areho lders’ rights
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 holds 3,676 shares, which makes up 0.19% of the
share capital and voting rights, Member of the Management Board Vladimir Kalčić holds 3,000 shares,
which makes up 0.15776% of the share capital and voting rights, and Member of the Supervisory Board,
Mr. Tihomir Osmak, holds 3,000 shares, which makes up 0.15776% of the share capital and voting
rights. Other members of the Supervisory Board and the Management Board do not hold shares in the
Company.
All shares are fully paid and there are no restrictions on the rights arising from them.
Granolio Group, Zagreb
11
Consolidated Report on the Application of the Corporate Governance Code (continued)
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 2,000,000.00, acquisition and sale of property with a net carrying value
higher than EUR 600,000.00 ; 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 600,000.00, 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 Group, Zagreb
12
Consolidated 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 5 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 Group, Zagreb
13
Consolidated Report on the Application of the Corporate Governance Code (continued)
Description of the work of the General Assembly (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
15
Registered with the Commercial Court in Zagreb under number 080044149
PIN 76394522236
INDEPENDENT AUDITOR'S REPORT
To the shareholders of Granolio d.d., Zagreb:
Report on the audit of the annual consolidated financial statements
Opinion
We performed an audit of the annual consolidated financial statements of Granolio d.d., Zagreb,
Budmanijeva 5 (''the Company'') and its subsidiaries (the Group”), which include the Consolidated
Statement of financial position as at 31 December 2024, Consolidated Statement of comprehensive
income, the Consolidated Statement of cash flows and the Consolidated Statement of changes in
equity for the year then ended, as well as the accompanying Notes to the consolidated financial
statements, including the information on significant accounting policies.
In our opinion, the accompanying annual consolidated financial statements present a true and fair
view of the Group'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 consolidated annual financial statements. We
are independent of the Company in accordance with the Code of Ethics for Professional Accountants
(with International Independence Standards), issued by International Ethics Standards Board for
Accountants (IESBA) (IESBA Code), as well as in accordance with the ethical requirements relevant to
our audit of the financial statements in Republic of Croatia, 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 consolidated 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.
Key audit matters
Key audit matters are those matters that, in our professional judgment, are of most significance in
our audit of the consolidated annual financial statements for the current period. These matters were
addressed in the context of our audit of the consolidated 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.
16
INDEPENDENT AUDITOR'S REPORT (continued)
Report on the audit of the annual consolidated 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 2024 the Group has stated sales revenues in the
amount of EUR 94.415 thousand (for the year ended
31 December 2022, EUR 86.733) in its consolidated
Statement of comprehensive income.
Revenue comprises the fair value of the
consideration received or receivable for the sale of
goods or services in the ordinary course of the
Group's activities. Revenues are stated in amounts
less value added tax, quantity rebates and sales
discounts.
The Group recognizes revenue when the amount of
revenue can be measured reliably, when future
economic benefits will flow to the Group and when
specific criteria are met for all of the Group's
activities.
In accordance with International Financial
Reporting Standard 15, Sales Revenue is recognized
when the Group 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
Group 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 3.10 “Revenue Recognition” and 5 “Sales
revenue” in the accompanying annual consolidated
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;
- 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 Group'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.
17
INDEPENDENT AUDITOR'S REPORT (continued)
Report on the audit of the annual consolidated 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 consolidated financial statements and our Independent Auditor's Report thereon. Our opinion
on the annual consolidated financial statements does not include other information.
In relation to our audit of the annual consolidated financial statements, it is our responsibility to
read other information and consider whether the other information is materially inconsistent with
the annual consolidated 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 22 and 24 of the Accounting Act and whether the Statement on the Application of the
Corporate Governance Code has been prepared in accordance with Article 25 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 consolidated
annual financial statements;
2. The attached Management Report is compiled in accordance with Article 22 and 24 of the
Accounting Act; and
3. The attached Statement on the Application of the Corporate Governance Code includes the
information defined in Article 25 of the Accounting Act.
Based on our knowledge and understanding of the Group'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
consolidated annual financial statements
Management Board is responsible for the preparation of consolidated 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 consolidated annual
financial statements that are free from material misstatement due to fraud or error.
In preparing the consolidated annual financial statements, Management Board is responsible for
evaluation of the Group'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 Group 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 Group.
BDO Croatia d.o.o.
18
INDEPENDENT AUDITOR'S REPORT (continued)
Report on the audit of the annual consolidated financial statements (continued)
Auditor’s Responsibility for the audit of consolidated annual financial statements
Our goals are to obtain reasonable assurance about whether the consolidated 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 consolidated 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 Group'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 consolidated 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 Group to discontinue
its operations on a going concern basis.
• evaluate the overall presentation, structure and content of the annual consolidated financial
statements, including disclosures, as well as whether the annual consolidated financial
statements reflect the transactions and events which they are based on in a way that achieves
a fair presentation.
• obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on these consolidated
financial statements. We are responsible for directing, supervising and performing the audit
of the Group. We are solely responsible for our audit opinion.
BDO Croatia d.o.o.
19
Registered with the Commercial Court in Zagreb under number 080044149
PIN 76394522236
INDEPENDENT AUDITOR'S REPORT (continued)
Report on the audit of the annual consolidated financial statements (continued)
Auditor’s Responsibility for the audit of consolidated 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 consolidated 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 12 June 2024, the General Assembly of the Company appointed us to audit the annual consolidated
financial statements of the Group for the year 2024.
As of the date of this report, we are continuously engaged in performing statutory audits of the Group
from the audit of the annual consolidated financial statements for the year 2019 to the audit of the
annual consolidated financial statements of the Group for the year 2024, which is a total of six years.
In our audit of the Group's annual consolidated financial statements for 2024, we determined
materiality for the consolidated financial statements as a whole in the amount of EUR 1,513 thousand,
which represents approximately 1.6% of the sales revenue for 2024.
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 Group
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 Group for 2024 and the date of this Independent Auditor’s Report, we did not provide prohibited
non-audit services to the Group 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.
20
INDEPENDENT AUDITOR'S REPORT (continued)
Report on the audit of the annual consolidated 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 consolidated 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, 151/22 and 85/24) 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 Group 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.
21
INDEPENDENT AUDITOR'S REPORT (continued)
Report on the audit of the annual consolidated 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 Group'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 consolidated annual report, are prepared in
the valid XHTML format,
- the information contained in the consolidated 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 Group, Zagreb
23
Consolidated 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 | ( | ( | |
| Material expenses | 7 | ( | ( |
| Employee benefits | 8 | ( | ( |
| Depreciation | 14,15,16 | ( | ( |
| Other expenses | 10 | ( | ( |
| Value adjustment costs | 9 | ( | ( |
| Other operating expenses | 11 | ( | ( |
| Total operating expenses | ( | ( | |
| Operating profit | |||
| Financial income | 12 | ||
| Financial expenses | 12 | ( | ( |
| Net financial result | ( | ( | |
| Profit before tax | |||
| Profit tax | 13 | ( | ( |
| Profit after tax | |||
| Other comprehensive income | |||
| Items that are subsequently transferred to profit or loss: | |||
| Financial assets held for sale, reclassified to profit or loss | |||
| Total comprehensive income | |||
| Total comprehensive income for the current year for | |||
| distribution: | |||
| To owners of the Company | |||
| To non-controlling interests | 24 | ||
| Earnings per share | |||
| Basic and diluted earnings per share (in euros and cents) | 34 |
* The accompanying notes are an integral part of these annual consolidated financial statements.
Granolio Group, Zagreb
24
Consolidated Statement of Financial Position
as of 31 December 2024
| in EUR ‘000 | |||
| 31 Note 2024 | December | 31 December 2023 | |
| FIXED ASSETS | |||
| Trademarks, concessions, licenses | |||
| Right-of-use assets | |||
| 14,15 | |||
| Property, plant and equipment | |||
| Land | |||
| Buildings | |||
| Plants, equipment, vehicles and tools | |||
| Biological assets | |||
| Other tangible assets | |||
| Advances for tangible assets | |||
| Tangible assets under construction | |||
| Investment property | |||
| 16 | |||
| Financial assets measured at amortized cost | |||
| Loans, deposits and similar | 17b | ||
| Long-term receivables | 17a | ||
| CURRENT ASSETS | |||
| Inventories | 18 | ||
| Receivables | |||
| Receivables from related parties | 32 | ||
| Receivables from customers | 19a | ||
| Receivables from the state and other institutions | 19b | ||
| Other receivables | 19c | ||
| Financial assets measured at amortized cost | |||
| Loans to related parties | 20b,32 | ||
| Investments in securities | 20a | ||
| Loans, deposits and similar | 20b | ||
| Cash and cash equivalents | 21 | ||
| Deferred expenses and accrued income | 22 | ||
| TOTAL ASSETS |
Granolio Group, Zagreb
25
Consolidated Statement of Financial Position (continued)
as of 31 December 2024 (continued)
| in EUR ‘000 | |||
| 31 Note 2024 | December | 31 December 2023 | |
| I CAPITAL AND RESERVES | |||
| Share capital | |||
| Capital reserves | |||
| Revaluation reserves | |||
| Legal reserves | |||
| Reserves for treasury shares | |||
| Loans carried forward | ( | ( | |
| Current year result | |||
| 23 | |||
| Non-controlling interests | 24 | ||
| II LONG-TERM LIABILITIES | |||
| Deferred tax liability | 13 | ||
| Liabilities to related parties | 32 | ||
| Liabilities for loans, deposits and similar | 25 | ||
| Liabilities to banks and other financial institutions | 26 | ||
| Liabilities for leases | 15 | ||
| Liabilities for securities | 27 | ||
| Liabilities to suppliers | 28 | ||
| III SHORT-TERM LIABILITIES | |||
| Liabilities for loans, deposits and similar | 25 | ||
| Liabilities to related parties | 33 | ||
| Liabilities to banks and other financial institutions | 26 | ||
| Liabilities for leases | 15 | ||
| Liabilities for advances | |||
| Liabilities to suppliers | 29a | ||
| Liabilities for securities | 27 | ||
| Liabilities to employees | |||
| Liabilities for taxes, contributions and similar payments | 29b | ||
| Liabilities for interest | |||
| Deferred expenses and deferred income | 30 | ||
| Other short-term liabilities | |||
| TOTAL EQUITY AND LIABILITIES |
* The accompanying notes are an integral part of these annual consolidated financial statements.
Granolio Group, Zagreb
26
Consolidated 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 carriedforward | Profit for the year | Total for the Group | Non-controlling interest | TOTAL | |
| Balance as of 1 January 2023 | ( | |||||||||
| Current year profit | ||||||||||
| Total comprehensive income for the year | ||||||||||
| Transfer of revaluation reserve to retained earnings | ( | |||||||||
| Dividend payment | ( | ( | ||||||||
| Schedule of results for 2022 | ( | |||||||||
| Balance as of 31 December 2023 | ( | |||||||||
| Balance as of 1 January 2024 | ( | |||||||||
| Current year profit | ||||||||||
| Total comprehensive income for the year | ||||||||||
| Transfer of revaluation reserve to retained earnings | - | |||||||||
| Dividend payment | ( | ( | ||||||||
| Acquisition of own shares | ( | ( | ( | ( | ||||||
| Schedule of results for 2023 | ( | |||||||||
| Balance as of 31 December 2024 | ( |
* The accompanying notes are an integral part of these annual consolidated financial statements.
Granolio Group, Zagreb
27
Consolidated Statement of Cash Flows
for the year ended 31 December 2024
| in | EUR ‘000 | ||
| Bilješka | 2024 | 2023 | |
| Result before tax | |||
| Reconciliation of results: | |||
| Depreciation | 14,15,16 | ||
| Natural increase | 16 | ( | ( |
| Loss on sale and disposal of fixed assets, net | |||
| Inventory surplus | 6 | ( | ( |
| Net interest expense | 12 | ||
| Profit from other financial activities | 12 | ( | ( |
| Write-off of inventories | |||
| Operating result before changes in working capital | |||
| (Increase) / decrease in inventories | ( | ||
| (Increase) / decrease in receivables | ( | ||
| Increas / (decrease) in short-term liabilities | ( | ||
| Advances (given)/received net | ( | ||
| Operating result after changes in working capital | |||
| Profit tax paid | ( | ( | |
| Interest paid | ( | ( | |
| Cash flow from operating activities | |||
| Interest collected | |||
| Cash expenditures for the acquisition of tangible and intangible assets | ( | ( | |
| Cash expenditures for loans granted | ( | ( | |
| Cash receipts from the collection of loans granted | |||
| Cash expenditure from the purchase of shares | ( | ||
| Cash flow from investing activities | ( | ( | |
| Cash expenditures for the repayment of loans and advances | ( | ( | |
| Cash receipts from loans and advances | |||
| Net expenditure on securities | ( | ( | |
| Cash expenditures for the payment of dividends | ( | ( | |
| Cash expenditures for the repayment of leases | ( | ||
| Cash receipts from subsidies | ( | ||
| Cash flow from financing activities | |||
| Net changes in cash and cash equivalents | ( | ( | |
| Cash and cash equivalents at the beginning of the period | |||
| Cash and cash equivalents at the end of the period |
* The accompanying notes are an integral part of these annual consolidated financial statements.
Granolio Group, Zagreb
Notes to the consolidated financial statements
for the year ended 31 December 2024
28
1. GENERAL INFORMATION
Granolio d.d. ('the Company') 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, Osijek, Vinkovci and Beli Manastir.
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.
On 31 December 2024 the Management Board of Granolio d.d. consisted of the following members:
Hrvoje Filipović - Chairman (since 23 February 2011),
Vladimir Kalčić - Member (since 23 February 2011),
Davor Mitrović -Member (since 28 April 2022)
On 31 December 2023 the Management Board of Granolio d.d. consisted of the following members
Hrvoje Filipović - Chairman (since 23 February 2011),
Vladimir Kalčić - Member (since 23 February 2011),
Davor Mitrović -Member (since 28 April 2022)
On 31 December 2024 and on 31 December 2023 the Supervisory Board of Granolio d.d. consisted of the following
members:
Franjo Filipović – Chairman (since 23 February 2011),
Jurij Detiček – Member (since 23 February 2011),
Tihomir Osmak – Member (since 13 June 2019),
Davor Štefan – Member (since 16 January 2015).
Subsidiaries
Basic information of the Granolio Group's material subsidiaries at the end of the reporting period are as follows:
| Name of subsidiary | Core activity | Place of incorporation and operation | Proportion of ownership interest and voting rights held by the Group |
| 20242023 | |||
| Zdenka - mliječni proizvodi d.o.o. | Production of dairy, trade and services | Veliki Zdenci | 50%50% |
| Zdenačka farma d.o.o. | Production of milk, cattle breeding and farm production | Veliki Zdenci | 100%100% |
The Company has assessed that it has control over the Company Zdenka mliječni proizvodi d.o.o. in accordance with
International Financial Reporting Standard 10.
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
29
1. GENERAL INFORMATION (CONTINUED)
The core activities of Granolio d.d. and its subsidiaries comprise the production of food, agricultural production,
production of milk and dairy products, 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 EUR 374,278. 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 1,794,412 to EUR 3,917,977.
In mid-2008, the Company acquired the entire equity share in Prerada žitarica d.o.o., Grubišno Polje, for EUR
690,953. The subsidiary's activities include grains warehousing and drying. As of 27 November 2017, the share
capital of Prerada Žitarica was increased from EUR 3,068,631 by issuing a new business share in the amount of
5,401,818 EUR to EUR 8,471,011. The company Prerada žitarica d.o.o. was merged to the parent company on 30
April 2018.
The company Zdenka-mliječni proizvodi d.o.o. registered on 10 April 2002 at the Commercial Court in Bjelovar
pursuant to the Decision number Tt-02 / 396-2 as a limited liability company.
Management Board of the Company consists of Mr Željko Gatjal, dipl.oec., and the Chairman of the Supervisory
Board is Mr Hrvoje Filipović dipl. oec. Granolio d.d. participates in the ownership structure of Zdenka – mliječni
proizvodi d.o.o. with a 50% share.
Company Granolio d.d. acquired business shares in the company Zdenka in 2010.
In 2011, Granolio d.d. has acquired a predominant influence by which it supervises decision-making in the
operations of the subsidiary Zdenka - mliječni proizvodi d.o.o., and decides on financial and business policies, the
appointment of members of the Management Board or ensures a majority vote of the members of the
Management Board.
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
30
2. APPLICATION OF NEW STANDARDS, INTERPRETATIONS AND AMENDED INTERNATIONAL FINANCIAL
REPORTING STANDARDS (IFRSs)
2.1 Initial application of new amendments to the existing standards effective for the current financial 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 Group financial
statements.
2.2 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
Exchange Rates”);
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
29
2. APPLICATION OF NEW STANDARDS, INTERPRETATIONS AND AMENDED INTERNATIONAL FINANCIAL
REPORTING STANDARDS (IFRSs)
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/Group 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 / consolidated 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.
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
33
3. SIGNIFICANT ACCOUNTING POLICIES
The following is a presentation of the Group's significant accounting policies adopted for the preparation of these
consolidated financial statements. These accounting policies have been consistently applied by the Group and all
subsidiaries for all periods included in these consolidated financial statements.
3.1 Statement of compliance
The consolidated financial statements are prepared in accordance with the International Financial Reporting
3.2 Basis of preparation
The consolidated financial statements of the Group 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 Group maintains its accounting records in the Croatian language, in Euro and in accordance with Croatian
laws.
The preparation of financial statements in accordance with International Financial Reporting Standards (IFRS)
requires the use of certain key accounting estimates. The Management Board is also required to use judgment in
the process of applying the Group's accounting policies. Areas involving a higher degree of judgment or complexity,
i.e. areas where assumptions and estimates are significant for the financial statements, are presented in Note 4.
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 continues intensively with activities for achieving capital adequacy as an essential
condition for ensuring the long-term survival of the Company.
3.3 Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities (including
structured entities) controlled by the Company and its subsidiaries. Control is achieved when:
• the Company has power or has the ability to use its power over the investee;
• the Company is exposed to or has rights to variable returns from its involvement with the investee;
• the Company is capable of using its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control listed above.
When the Company has less than a majority of the voting rights of an investee, it has power over the investee when
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
33
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.3. Basis od consolidation (continued)
The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting
rights in an investee are sufficient to give it power, including:
• Share of voting rights in relation to the size and distribution of the voting rights of other persons entitled to
vote;
• Potential voting rights held by the Company, other vote holders or other parties;
• Rights arising from other contractual arrangements.
• Any additional facts and circumstances that indicate that the Company has, or does not have, the current
ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous
shareholders' meetings.
The subsidiary is consolidated or ceases to be consolidated from the moment in which the Company acquires or
loses control over it. Income and expenses of subsidiaries acquired or disposed of during the year are included in
the consolidated statement of profit or loss and other comprehensive income from the date on which the Company
acquires control until the date on which the Company loses control of the subsidiary.
Profit or loss and each component of other comprehensive income are separated on the part of the owners of the
parent (Company) and on the part of the owners of non-controlling interests. Total comprehensive income of
subsidiaries is attributed to the owners of the company and the owners of non-controlling interests, even if this leads
to a negative balance of non-controlling interests.
When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between
i) the total fair value of the fee received and the fair value of eventual retained interest ii) the previous carrying
amount of assets (including goodwill) and liabilities of the subsidiary, and every non-controlling interest. All figures
are based on the subsidiary previously been recognized in other comprehensive income are accounted as if the
Group had directly sold the assets or liabilities of that company, i.e. figures are transferred to profit or loss, or in any
of the components of shareholders' equity in accordance with applicable IFRS. The fair value of the retained interest
in the former subsidiary at the date of loss of control at the subsequent accounting under IAS 39, regarded as the
fair value of initial recognition and, if it is applicable, as a cost during the initial recording of shares in the associate
or joint venture.
3.4 Business combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business
combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets
transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests
issued by the Group in exchange for control of the acquiree. Acquisition-related costs are generally recognised in profit
or loss as incurred.
At the acquisition date, the identifiable assets acquired, and the liabilities assumed are recognised at their fair value,
except :
• deferred tax assets or liabilities, and assets or liabilities related to employee benefit arrangements are
recognised and measured in accordance with IAS 12 “Income Taxes” and IAS 19 “Employee benefits”
respectively;
• liabilities or equity instruments related to share-based payment arrangements of the acquiree, or share-based
payment arrangements of the Group entered into to replace share-based payment arrangements of the
acquiree are measured in accordance with IFRS 2 “Share-based Payment” at the acquisition date; and
• assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 “Non-current
Assets Held for Sale and Discontinued Operations” are measured in accordance with that Standard.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling
interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any)
over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after
reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed
exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and
the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognised immediately
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
35
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.4 Business combinations (continued)
Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the
entity's net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling
interests' proportionate share of the recognised amounts of the acquiree's identifiable net assets. The choice of
measurement basis is made on a transaction-by-transaction basis.
Other types of non-controlling interests are measured at fair value or, when applicable, on the basis specified in
another IFRS.
Measurement period adjustments are adjustments that arise from additional information obtained during the
‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and circumstances that
existed at the acquisition date.
The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as
measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration
that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted
for within equity.
Contingent consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates in
accordance with IAS 39, or IAS 37 “Provisions, Contingent Liabilities and Contingent Assets”, as appropriate, with the
corresponding gain or loss being recognised in profit or loss.
When a business combination is achieved in stages, the Group's previously held equity interest in the acquiree is
remeasured to its acquisition-date fair value and the resulting gain or loss, if any, is recognised in profit or loss. Amounts
arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other
comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were
disposed of.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those
provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are
recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date that,
if known, would have affected the amounts recognised at that date.
3.5 Goodwill
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the
business less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Group's cash-generating units (or groups
of cash-generating units) that is expected to benefit from the synergies of the combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently
when there is indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less
than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in
the unit. Any impairment loss for goodwill is recognised directly in profit or loss. An impairment loss recognised for
goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination
of the profit or loss on disposal.
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
36
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.6 Shares in associates and joint ventures
An associate is an entity over which the Group 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 incorporated in financial statements using the
equity method of accounting, 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. Under the equity method, an investment in an associate or a
joint venture is initially recognised in the consolidated statement of financial position at cost and adjusted thereafter
to recognise the Group’s share of the profit or loss and other comprehensive income of the associate or joint venture.
When the Group’s share of losses of an associate or a joint venture exceeds the Group’s interest in that associate
or joint venture (which includes any long-term interests that, in substance, form part of the Group’s net investment
in the associate or joint venture), the Group discontinues recognising its share of further losses. Additional losses
are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments
on behalf of the associate or joint venture.
An investment in an associate or a joint venture is accounted for using the equity method from the date on which
the investee becomes an associate or a joint venture. On acquisition of the investment in an associate or a joint
venture, any excess of the cost of the investment over the Group's share of the net fair value of the identifiable
assets and liabilities of the investee is recognised as goodwill, which is included within the carrying amount of the
investment. Any excess of the Group's share of the net fair value of the identifiable assets and liabilities over the
cost of the investment, after reassessment, is recognised immediately in profit or loss in the period in which the
investment is acquired.
The requirements of IAS 39 are applied to determine whether it is necessary to recognise any impairment loss with
respect to the Group’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.
The Group discontinues the use of the equity method from the date when the investment ceases to be an associate
or a joint venture, or when the investment is classified as held for sale. When the Group retains an interest in the
former associate or joint venture and the retained interest is a financial asset, the Group measures the retained
interest at fair value at that date and the fair value is regarded as its fair value on initial recognition in accordance
with IAS 39. The difference between the carrying amount of the associate or joint venture at the date the equity
method was discontinued, and the fair value of any retained interest and any proceeds from disposing of a part
interest in the associate or joint venture is included in the determination of the gain or loss on disposal of the
associate or joint venture. In addition, the Group accounts for all amounts previously recognised in other
comprehensive income in relation to that associate or joint venture on the same basis as would be required if that
associate or joint venture had directly disposed of the related assets or liabilities. Therefore, if a gain or loss
previously recognised in other comprehensive income by that associate or joint venture would be reclassified to
profit or loss on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
36
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.7 Shares in associates and joint ventures (continued)
The Group continues to use the equity method when an investment in an associate becomes an investment in a
joint venture or an investment in a joint venture becomes an investment in an associate. There is no remeasurement
to fair value upon such changes in ownership interests.
When the Group reduces its ownership interest in an associate or a joint venture, but the Group continues to use
the equity method, the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been
recognised in other comprehensive income relating to that reduction in ownership interest if that gain or loss would
be reclassified to profit or loss on the disposal of the related assets or liabilities. When a group entity transacts with
an associate or a joint venture of the Group, profits and losses resulting from the transactions with the associate or
joint venture are recognised in the Group's consolidated financial statements only to the extent of interests in the
associate or joint venture that are not related to the Group.
a. Shares in joint ventures
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.
Any goodwill arising from the acquisition of the Group's shares in the common control of a given company is
calculated in accordance with the Group's accounting policy for calculating of goodwill resulting from business
merger.
Unrealized gains and losses from transactions between the Group and the companies over which it has joint control
are eliminated in proportion to the Group's share in the joint venture. Gains and losses from transactions between
the Group and jointly controlled companies in the consolidated financial statements of the Group are recognized
only to the extent of interest in jointly controlled companies that are not related to the Group.
b. Shares in joint management
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 group entity undertakes its activities under joint operations, the Group 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 Group 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 Group entity transacts with a joint operation in which entity from Group is a joint operator (such as a sale
or contribution of assets), the Group is considered to be conducting the transaction with the other parties to the joint
operation, and gains and losses resulting from the transactions are recognised in the Group's consolidated financial
statements only to the extent of other parties' interests in the joint operation.
When a Group entity transacts with a joint operation in which a group entity is a joint operator (such as a purchase
of assets), the Group does not recognise its share of the gains and losses until it resells those assets to a third
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
37
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.8 Functional and reporting currency
The items included in the Group's financial statement are expressed in the currency of the primary economic
environment in which the Group operates (functional currency). In the consolidated financial statements, the
financial results and financial position of the Group are expressed in euros (EUR) as the euro is the functional and
3.9 Using estimates and judgements
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.
Areas of judgement made by the Management Board in applying IFRS that have a significant impact on the financial
statements as well as areas of judgement involving a risk of material adjustment in the following year are presented
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
38
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.10 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 Group’s operations. Revenues are stated net of value added tax, quantity and sales
discounts.
The Group recognises revenue when the amount of the revenue can be measured reliably, when future economic
benefits will flow into the Group and when the specific criteria for all the Group’s activities described below are met.
Revenues are recognized in accordance with International Financial Reporting Standard 15 - Revenue from
Contracts with Customers.
(i) Income from the wholesale of products and trade goods
The Group produces and distributes its own products as well as third-party merchandise. Wholesale revenue is
recognised when the Group has delivered the goods to the customer, 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
customer.
A delivery is completed when the products are dispatched to a specific location, the risk of loss are transferred to
the customer and one of the following is met: the customer has accepted the goods in accordance with the
underlying contract; or the acceptance deadline has passed; or the Group 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 current
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 Group does not have specific customer award schemes.
(iii) Service sales
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 comprises interest income on funds invested, changes in the fair value of financial assets at fair
value through profit or loss and foreign currency gains. Interest income is recognised as it accrues, using the
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
38
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.11 Foreign currencies
(i) 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 are translated to the
functional currency using the exchange rate list in effect at the transaction dates.
(ii) Group members
Items included in the financial statements of each of the Group’s entities are measured using the currency of the
primary economic environment in which the entity operates (“the functional currency”). The consolidated financial
3.12 Borrowing costs
Borrowings are recognized initially at fair value, net of transaction costs incurred. In future periods, borrowings are
stated at amortized cost; all differences between receivables (minus transaction costs) and surrender value are
recognized in the consolidated statement of comprehensive income over the period of the borrowing period using
the effective interest rate method.
Borrowing costs that can be directly linked to the acquisition, construction or production of a qualifying asset, a
means that necessarily requires a considerable amount of time to be ready for intended use or sale, are attributed
to the cost of purchasing that asset until the asset is largely unavailable for Intended use or sale. All other borrowing
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
34
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.13 Government grants and subsidies
Government grants are not recognised until there is reasonable assurance that the Group will comply with the
conditions attaching to them and that the grants will be received. Government grants are recognised in profit or loss
on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the
grants are intended to compensate. Specifically, government grants whose primary condition is that the Group
should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the
consolidated statement of financial position and transferred to profit or loss on a systematic and rational basis over
the useful lives of the related assets. Government grants that are receivable as compensation for expenses or
losses already incurred or for the purpose of giving immediate financial support to the Group with no future related
3.14 Employee benefits
(i) Pension obligations and other post-employment benefits
In the normal course of business the Group 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 Group is not obliged to provide any other post-employment
benefits.
(ii) Long-term employee benefits
The Group does not recognise obligation 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 Group 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 Group makes no share-based payments to its employees.
3.15 Dividend
Dividends payable to the Group’s shareholders are recognised as a liability in the financial statements in the period
in which the dividends are approved in the General Assembly of the Group’s shareholders.
3.16 Reporting on operating segments
A segment is a distinguishable component of the Group 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 Group monitors the performance of the following segments:
- Milling
- Dairy
- Wholesale
- Other
The Group identifies operating segments on the basis of internal reports about components of the Group that are
regularly reviewed by the chief operating decision maker (Management Board) in order to allocate resources to the
segments and to assess their performance. Details about the operating segments are disclosed in Note 6 to the
consolidated financial statements. Comparative information has been presented on the principle of comparability
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
40
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.17 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
(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 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 Group 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
Group 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 Authorities require that VAT is settled on a net basis. VAT on sale and purchase transactions is recognised
in the statement of financial position on a net basis. Where an amount receivable is impaired, the impairment loss
3.18 Property, plant and equipment
Land and buildings used for goods or services production, or delivery or administrative purposes are reported in the
statement of financial position in revalued amounts, which represent their revaluation date fair value less the value
adjustment (accumulated depreciation) and accumulated impairment losses. Revaluations are performed with
sufficient regularity such that the carrying amounts do not differ materially from those that would be determined
using fair values at the end of each 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,
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
41
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.18 Property, plant and equipment (continued)
Property in the course of 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 Group’s accountancy policy. Such properties 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 properties 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
3.19. 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
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
42
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.20 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.
(i) 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.
(ii) 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.
3.21. Impairment of property, plant, equipment and intangible assets
At the end of each reporting period, the Group 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 Group 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
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
43
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.22 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 obligations 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 asset with the right of use is shown as follows:
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.
3.23 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.
| 2024 | 2023 | |
| Land | 50 years | 50 years |
| Vehicles | 5 years | 5 years |
| Equipment | 10 years | 10 years |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
44
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.24 Biological assets
The Group recognizes a biological asset or agricultural products such as livestock and crops, when there is control
over the property as a result of past events, when it is probable that future economic benefits associated with the
asset will inflow to the Group and when the fair value or cost of the item can be measured determine reliably.
Livestock (cows) is kept separately by ID numbers for certain categories of cattle. The categories that make up the
breeding stock are cows, heifers and calves.
Supply of livestock valued at cost less accumulated depreciation and any impairment losses. The present value
approximates the fair value of livestock.
Agricultural products harvested are measured at fair value less estimated costs to sell at the point of harvest.
For biological assets carried at cost, depreciation is recorded as an expense in the period and is calculated on a
3.25 Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, if significant, using
the effective interest method. Otherwise, they are measured at nominal amounts, less an allowance for impairment.
Impairment is made whenever there is objective evidence that the Group will not be able to collect all amounts due
according to the originally agreed terms. Significant financial difficulties of the debtor, the probability of bankruptcy
proceedings at the debtor, or default or delinquency in payment are considered indications of potential impairment. The
amount of impairment loss of an item receivable is measured as the difference between the carrying amount and the
3.26 Cash and cash equivalents
Cash and cash equivalents comprise cash, demand deposits with banks and other short-term highly liquid
instruments with original maturities of up to three months or less. For the purposes of the consolidated statement
of financial position, outstanding bank overdrafts are included in current liabilities.
3.27 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.
3.28 Financial instruments
Financial assets and financial liabilities are recognised in the statement of financial position of the Group when the
Group 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
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
45
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.29 Financial assets
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. All
regular way 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 amortised 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) Amortised cost and effective interest method
The effective interest method is a method of calculating the amortised 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 amortised 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 amortised 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 amortised 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 amortised 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 income is recognised by applying the effective interest rate to the gross carrying amount of
the financial assets.
For the purchased or incurred credit-impaired financial assets, the Group 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.
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
46
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.29 Financial assets (continued)
Impairment of financial assets
The Group recognises the provisions for expected credit losses from debt instruments measured at amortised cost.
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 Group 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 Group’s historical credit loss experience, adjusted for debtor-specific factors. The Group 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 Group recognises the life-long 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 Group 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.
In contrast, the 12-month ECL represents a portion of the lifetime ECL due to the probability of default in the next
12 months after the reporting date.
(i) Significant increase in credit risk
When assessing whether the credit risk for the financial instrument significantly increased since the initial
recognition, the Group 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 Group 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 Group relies on days of default when assessing significant credit risk deterioration. If the debtor is
in default more than 180 days, then the Group 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 his/her 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 Group 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 Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
47
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.29 Financial assets (continued)
(ii) Definition of default status
The following facts, which represent a case of default for internal credit risk management purposes are considered
by the Group 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 his/her creditors, including the Group, in full (without considering any collateral held by
the Group).
Despite the aforementioned analysis, the Group believes that default occurred if the financial assets are due more
than 360 days and the relevant liabilities have not been settled, unless the Group disposes of reasonable and
substantiated information to prove a more appropriate default criterion.
(iii) 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 he 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.
(iv) Write-off policy
The Group writes off financial assets 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 3 years, whatever happens first. Written-off financial assets
can still be subject to enforcement activities within the Group recovery procedures, with regard to the relevant legal
advice, where appropriate. As previously described, revenue from the collection of financial assets is recognised in
profit or loss.
(v) 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.
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
48
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.29 Financial assets (continued)
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
Group 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 Group 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 Group recognises impairment gains and losses in the profit and loss account for all financial instruments with
the appropriate adjustment of the carrying amount through the loss provisions account.
End of financial asset recognition
The Group 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.
If the Group 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 Group 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 financial asset recognition measured at depreciated 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.
Loans and receivables
The Group 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 Group 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 Group 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 Group’s provision matrix. As the Group’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
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
49
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.30 Financial liabilities
All financial liabilities are measured subsequently at amortised cost by using the effective interest rate method or at
fair value through profit or loss.
The Group measures all financial liabilities amortised 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 Group, 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 amortised cost,
using the effective interest rate method.
The effective interest method is a method of calculating the amortised 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 amortised cost of financial liability.
Classification as debt or equity
Debt and equity instruments are classified as financial liabilities or as principal pursuant to the essence of the
agreement.
Equity instruments
An equity instrument is a contract which proves the rest of the share in the entity’s assets after all its liabilities have
deducted. The equity instruments issued by the Group are recorded in the amount of income, less direct issuance
costs.
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 amortised cost by applying the effective interest
rate method, and the interest expenses are recognised based on the effective interest yield.
The effective interest rate method represents a method used for calculating the amortised 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
3.31 Provisions
Provisions are recognised if the Group has a present obligation, legal or constructive, as a result of a past event
and it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate can
be made of the amount of the obligation. Provisions are reviewed at each reporting date and adjusted to reflect the
current best estimate. When the amount of the impairment is significant amount of provision is the present value of
the expenditures expected to be required to settle the obligation, determined using the estimated risk-free interest
rate as the discount rate. When discounting is used, every year the effect of discounting is recorded as a financial
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
50
4. KEY ACCOUNTING JUDGEMENTS AND ESTIMATES
In the application of the Group's accounting policies, which are described in Note 3, the Management are 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 have made
in the process of applying the Group's accounting policies and that have the most significant effect on the amounts
recognised in the consolidated financial statements.
(i) Revenue recognition
In making their judgement, Management considered the individual criteria for the recognition of revenue from the
sale of goods set out in IFRS 15 and, in particular, whether the Group had transferred to the buyer the significant
risks and rewards of ownership of the goods and whether the Company recognized revenue from services in
accordance with the stage of completion based on the share of services actually performed in relation to the total
services to be performed.
(ii) Consequences of certain legal actions
There are a number of legal actions which have arisen from the regular course of operations of individual companies
within the Group. Management makes estimates of probable outcomes of these legal actions and recognises
provisions for the Group’s liabilities that may arise from these legal actions on a consistent basis.
(i) Recoverable amount of trade and other receivables
The Company always shows provisions for losses of receivables from customers in an amount equal to the lifetime
ECL. Expected credit losses on trade receivables are estimated on the basis of a matrix of days past due,
considering the historical experience of the debtor's default status, and an analysis of the debtor's current financial
position.
(ii) Useful life of property, plant and equipment
As described in Note 3.19 above, the Group reviews the estimated useful lives of property, plant and equipment at
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
5
5. SALES REVENUE
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Sales revenue – domestic | 76,329 | 72,276 |
| Sales revenue – foreign | 18,086 | 14,457 |
| 94,415 | 86,733 |
The reporting segments form a part of the internal financial reporting. The internal reports are reviewed regularly by
the Group'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 Group monitors its performance through the following operating segments:
• Milling
• Dairy
• Wholesale
• Other
Segment information – industry analysis:
The operating income of the Group, 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 consolidated
statement of comprehensive income. Revenue consists of sales revenue and other revenue generated by sales to
external customers. Sales between reporting segments are eliminated in the consolidation process
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Milling | 44,585 | 42,594 |
| Dairy | 32,809 | 31,535 |
| Wholesale | 16,092 | 12,176 |
| Other | 929 | 429 |
| 94,415 | 86,733 |
Territorial analysis of sales revenues
| in EUR ‘000 | ||
| Country | 2024 | 2023 |
| Croatia | 77,323 | 72,269 |
| Slovenia | 4,022 | 5,984 |
| Serbia | 3,720 | 988 |
| Bosnia and Herzegovina | 4,209 | 3,743 |
| Italy | 2,490 | 1,298 |
| Austria | 24 | 3 |
| Montenegro | 628 | 637 |
| Macedonia | 360 | 241 |
| Kosovo | 740 | 251 |
| Bulgaria | - | 47 |
| Germany | 219 | 190 |
| Canada | 55 | 28 |
| Hungary | 592 | 1,018 |
| Other countries | 34 | 36 |
| 94,415 | 86,733 |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
53
6. OTHER OPERATING INCOME
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Income from subsidies | 1,672 | 2,000 |
| Inventory surpluses | 307 | 368 |
| Income from collection of damages | 93 | 67 |
| Incomes based on herd growth | 556 | 489 |
| Subsequent approvals from suppliers | 34 | 92 |
| Income from the sale of fixed assets | 41 | 62 |
| Income from collected receivables | 1,153 | - |
| Subsequently determined income | 2,388 | 261 |
| Other operating income | 573 | 635 |
| 6,690 | 3,974 |
Income from collection of damages refers to income from the collection of damages from insurance companies.
Other operating income consists of income from rents, sales of raw materials, from the use of own products and
subsequently collected receivables.
7. MATERIAL EXPENSES
| Material expenses structure is as follows: | in EUR ‘000 | |
| 2024 | 2023 | |
| Raw material and supplies | 52,647 | 50,765 |
| Energy consumed | 2,645 | 3,690 |
| Sludge, waste, breakage and damage to inventory | 388 | 1,250 |
| Other material expenses | 583 | 559 |
| 57,262 | 56,264 | |
| Cost of goods sold | 14,393 | 11,862 |
| Transportation, telephone and postal services | 3,398 | 2,917 |
| Maintenance and security services | 833 | 701 |
| Leasing and rental services | 894 | 534 |
| Intellectual services | 452 | 433 |
| Promotional, sponsorship services | 459 | 291 |
| Quality control services | 264 | 197 |
| Other selling expenses | 220 | 7 |
| Other external expenses | 472 | 524 |
| 6,993 | 5,603 | |
| 78,649 | 73,730 |
The total auditor's fee for 2024 is EUR 28 thousand, of which EUR 28 thousand relates to the Group's audit. The
total auditor's fee for 2023 was EUR 26 thousand, of which EUR 26 thousand relates to the Group's audit. Other
external costs are mostly composed of brokerage services, foreign trade services, other export services, highway
costs, registration services and utility services.
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
54
8. EMPLOYEE EXPENSES
| In EUR ‘000 | ||
| 2024 | 2023 | |
| Net salaries | 5,708 | 4,561 |
| Cost of taxes and contributions from salaries | 1,882 | 1,538 |
| Contributions on salaries | 1,076 | 857 |
| 8,666 | 6,955 |
In 2024, the Group employed 450 workers (2023: 430) based on working hours, while as of 31 December 2024, it
9. VALUE ADJUSTMENT
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Trade receivables (Note 20) | 5 | 3 |
| 5 | 3 |
10. OTHER EXPENSES
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Reimbursement of employee expenses, gifts and assistance | 861 | 718 |
| Insurance premiums | 302 | 205 |
| Contributions, membership fees and other benefits | 96 | 96 |
| Banking services and payment transaction expenses | 120 | 56 |
| Expenses of official trips | 60 | 54 |
| Taxes that do not depend on the result | 21 | 21 |
| Other expenses | 77 | 105 |
| 1,538 | 1,255 |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
55
11. OTHER OPERATING EXPENSES
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Subsequently approved cassa sconto | 551 | 564 |
| Write-offs of unpaid receivables | 20 | - |
| Loss, wastage, breakage and damage to goods | 150 | 144 |
| Entertainment and gift expenses | 40 | 139 |
| Death and write-off expenses | 243 | 67 |
| Fines, penalties, damages | 403 | 31 |
| Donations and sponsorships | 36 | 36 |
| Asset write-off expenses | 2 | - |
| Subsequently determined operating expenses | 3 | 1 |
| Loss from the sale of fixed tangible and intangible assets | 17 | 31 |
| Other operating expenses | 10 | 103 |
| 1,474 | 1,116 |
The category "Other operating expenses" contains losses from the adjusted value of the basic herd, the costs of
permitted shortfalls in production, reductions in receivables under PSN and other operating expenses.
12. FINANCIAL INCOME AND EXPENSES
| Financial income | ||
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Interest on loans granted | 50 | 24 |
| Default interest | 414 | 37 |
| Other financial income | 58 | - |
| 522 | 61 |
| Financial expenses | ||
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Interest on loans, borrowings and leases | 1,489 | 799 |
| Negative exchange rate differences | - | 43 |
| Discount interest on bills of exchange | - | - |
| Default interest | 18 | - |
| Other financial expenses | 7 | 6 |
| 1,514 | 848 |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
56
13. PROFIT TAX
Profit tax recognised in profit or loss
| Tax expense(/income) comprises: | ||
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Current tax expense | 710 | 720 |
| Release of deferred tax assets | (87) | (87) |
| Tax expense | 623 | 633 |
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:
| EUR ‘000 | ||
| 2024 | 2023 | |
| Profit before taxation | 6,215 | 3,074 |
| Profit tax at a rate of 18% | 1,208 | 553 |
| Effect of non-taxable income | (281) | (133) |
| Effect of non-deductible expenses | 301 | 288 |
| Effect of unused tax losses and offsets not recognised as deferred taxassets | - | 11 |
| Effect of tax relief | (518) | - |
| Tax expense from active parts of operations recognized in profit or loss | 710 | 720 |
| Effective tax rate | 11,44% | 23,42% |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
57
13. PROFIT TAX (CONTINUED)
Unused tax losses
In accordance with tax regulations, the Group has no tax losses carried forward as of 31 December 2024.
Deferred tax assets are not recognized in the balance sheet.
Deferred tax liabilities arise from the following:
| In EUR '000 | |||
| 2024 | Opening balance | Profit tax | Closing balance |
| Revaluation depreciation | 1,244 | (87) | 1,157 |
| Deferred tax liability | 1,244 | (87) | 1,157 |
| In EUR '000 | |||
| 2023 | Opening balance | Profit tax | Closing balance |
| Revaluation depreciation | 1,331 | (87) | 1,244 |
| Deferred tax liability | 1,331 | (87) | 1,244 |
Movements in deferred tax assets
| In EUR '000 | ||
| 31 December | 31 December | |
| 2024 | 2023 | |
| Balance as of 1 January | 1,244 | 1,331 |
| Decrease | (87) | (87) |
| 1,157 | 1,244 |
Under Croatian regulations, the Tax Administration may at any time audit the books and records of a Croatian
company in a period of three years following the year in which the tax liability is declared and impose additional
taxes and penalties. Management of the Group is not aware of any circumstances which may give rise to a potential
material liability in this respect.
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
58
14. INTANGIBLE ASSETS
Movement of intangible assets in 2024
in EUR ‘000
| in EUR ‘000 | ||||
| Trademarks, concessions, licenses, goods and services | Software and other rights | Other intangible assets | TOTAL | |
| brands | ||||
| Purchase value | ||||
| Balance as of 31 December 2023 | 5 | 668 | - | 1,995 |
| Increases | 930 | 1 | 50 | 981 |
| Balance as of 31 December 2024 | 935 | 665 | 50 | 1,650 |
| Impairment | ||||
| Balance as of 31 December 2023 | - | 618 | - | 618 |
| Amortisation expense | - | 19 | - | 19 |
| Balance as of 31 December 2024 | - | 637 | - | 637 |
| Present value as of 1 January 2024 | 5 | 46 | - | 51 |
| Present value as of 31 December 2024 | 935 | 28 | 50 | 1,013 |
Movement of intangible assets in 2023
| in EUR ‘000 | |||
| Trademarks, concessions, licenses, goods and services | Software and other rights | TOTAL | |
| brands | |||
| Purchase value | |||
| Balance as of 1 January 2023 | 5 | 661 | 666 |
| Increases | - | 3 | 3 |
| Balance as of 31 December 2023 | 5 | 664 | 669 |
| Impairment | |||
| Balance as of 1 January 2023 | - | 600 | 600 |
| Amortisation expense | - | 18 | 18 |
| Balance as of 31 December 2023 | - | 618 | 618 |
| Present value as of 1 January 2023 | 5 | 61 | 66 |
| Present value as of 31 December 2023 | 5 | 46 | 51 |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
59
15. RIGHT-OF-USE ASSETS
(a) Right-of-use assets
in EUR ‘000
| Land | Vehicles | Equipment | TOTAL | |
| Balance as of 1 January 2023 | 175 | - | 463 | 638 |
| Increase | - | - | - | - |
| Depreciation | (4) | - | (184) | (188) |
| Balance as of 31 December 2023 | 171 | - | 279 | 450 |
| Increase | 59 | 59 | ||
| Depreciation | (4) | (165) | (169) | |
| Balance as of 31 December 2024 | 167 | 59 | 114 | 339 |
(b) Lease liability
| in EUR ‘000 | ||||
| Land | Vehicles | Equipment | TOTAL | |
| Balance as of 1 January 2023 | 185 | - | 446 | 632 |
| Increase | - | - | - | - |
| Transfer of liability | - | - | - | - |
| Lease payment | (4) | - | (132) | (136) |
| Exchange rate difference | - | - | - | - |
| Balance as of 31 December 2023 | 181 | - | 314 | 495 |
| Increase | - | 59 | - | 59 |
| Lease payment | - | - | (209) | (209) |
| Interest expense | - | - | (1) | (1) |
| Balance as of 31 December 2024 | 181 | 59 | 105 | 345 |
| 31 December 2024 | 31 December 2023 | |
| Long term liability | 345 | 495 |
| (Current maturity) | (119) | (163) |
| Lease liability | 226 | 332 |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
60
16. PROPERTY, PLANT AND EQUIPMENT
Movement of property, plant and equipment in 2024
| Land | Buildings | equipment, vehicles and tools | Biological assets | Other tangible assets | assets under construction | Investment property | Advances for tangible assets | TOTAL | |
| Purchase value or | |||||||||
| revaluation | |||||||||
| Balance as of 1 January2024 | 1,908 | 39,168 | 39,179 | 1,367 | 26 | 2,379 | 670 | 185 | 84,882 |
| Acquisitions during the period | 100 | 5,991 | 2,782 | - | 6 | 7,539 | 176 | - | 16,595 |
| Transfer from assets under construction | 44 | 488 | 1,516 | - | - | (1,862) | - | (185) | - |
| Natural increase | - | - | - | 556 | - | - | - | - | 556 |
| Sales | - | - | (33) | (476) | (3) | (72) | - | - | (585) |
| Deaths | - | - | - | (77) | - | - | - | - | (77) |
| Write off | - | (57) | (685) | - | - | - | - | - | (742) |
| Balance as of 31 December 2024 | 2,052 | 45,589 | 42,759 | 1,370 | 29 | 7,983 | 846 | - | 100,629 |
| Impairment | |||||||||
| Balance as of 1 January2024 | - | 21,472 | 28,147 | 368 | 16 | - | - | - | 50,003 |
| Cost for the period | - | 874 | 1,835 | 170 | - | - | - | - | 2,879 |
| Sales | - | - | (30) | (178) | - | - | - | - | (208) |
| Write off | - | (57) | (676) | - | (3) | - | - | - | (736) |
| Depreciation of revaluation (of total cost) | - | 291 | 195 | 1 | - | - | - | - | 487 |
| Balance as of 31 December 2024 | - | 22,580 | 29,471 | 361 | 13 | - | - | - | 52,425 |
| Present value as of 1 January 2024 | 1,908 | 17,696 | 11,032 | 999 | 10 | 2,379 | 670 | 185 | 34,879 |
| Present value as of 31 December 2024 | 2,052 | 23,010 | 13,289 | 1,009 | 16 | 7,984 | 846 | - | 48,206 |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
61
16. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Movement of property, plant and equipment in 2023
| Land | Buildings | equipment, vehicles and tools | Biological assets | Other tangible assets | assets under construction | Investment property | Advances for tangible assets | TOTAL | |
| Purchase value | |||||||||
| Balance as of 1 January 2023 | 1,901 | 39,008 | 33,846 | 1,297 | 26 | 1,894 | 670 | - | 78,643 |
| Acquisitions during the period | 7 | 83 | 2,132 | - | - | 4,006 | - | 185 | 6,413 |
| Transfer from assets under construction | - | 77 | 3,444 | - | - | (3,521) | - | - | - |
| Natural increase | - | - | - | 489 | - | - | - | - | 489 |
| Sales | - | - | (206) | (290) | - | - | - | - | (496) |
| Write-off | - | - | (36) | (129) | - | - | - | - | (165) |
| Balance as of 31 December 2023 | 1,908 | 39,168 | 39,179 | 1,367 | 26 | 2,379 | 670 | 185 | 84,884 |
| Impairment | |||||||||
| Balance as of 1 January 2023 | - | 20,315 | 26,575 | 351 | 16 | - | - | - | 47,257 |
| Cost for the period | - | 857 | 1,588 | 171 | - | - | - | - | 2,616 |
| Sales | - | - | (175) | (55) | - | - | - | - | (230) |
| Write-off | - | - | (36) | (99) | - | - | - | - | (135) |
| Depreciation of revaluation (of total cost) - | 300 | 195 | - | - | - | - | - | 495 | |
| Balance as of 31 December 2023 | - | 21,472 | 28,147 | 368 | 16 | - | - | - | 50,003 |
| Present value as of 1 January 2023 | 1,901 | 18,694 | 7,271 | 946 | 10 | 1,894 | 670 | - | 31,385 |
| Present value as of 31 December 2023 | 1,908 | 17,697 | 11,032 | 999 | 10 | 2,379 | 670 | 185 | 34,879 |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
62
17. FIXED FINANCIAL ASSETS
(a) Long-term receivables
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Long-term receivables | 375 | 225 |
| 375 | 225 |
(b) Given loans, deposits and similar
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Loans to natural persons | 7 | 21 |
| Deposits | 3 | 3 |
| 10 | 24 |
The movement of long - term loans during the year is shown within Note 20.
18. INVENTORIES
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Raw materials | 10,331 | 3,918 |
| Merchandise | 1,764 | 1,401 |
| Finished products | 1,865 | 1,969 |
| Production in progress | 720 | 640 |
| 14,681 | 7,928 |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
63
19. RECEIVABLES
a) Trade receivables and receivables from related parties
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Domestic customers | 15,717 | 15,426 |
| Customers abroad | 1,707 | 1,778 |
| Receivables from subcontractors | 759 | 733 |
| Expected credit losses | (2,338) | (4,970) |
| 15,844 | 12,967 |
Receivables from subcontractors refer to commodity loans in raw materials for sowing given to farmers who are
at the same time suppliers of raw materials for production and trade goods.
Expected credit losses in trade receivables
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Balance as of 1 January | 4,970 | 5,495 |
| Write-off of corrected receivables | (1,594) | (266) |
| Collection of value-adjusted receivables and receivables from subcontractors | (1,043) | (259) |
| Increase in expected credit losses | 4 | - |
| Balance as of 31 December | 2,338 | 4,970 |
The age analysis of overdue receivables from customers for which no impairment was performed is shown in the
following table:
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Not yet due | 12,496 | 9,759 |
| 0-90 days past due | 2,856 | 2,786 |
| 91-180 days past due | 220 | 293 |
| 181-360 days past due | 90 | 84 |
| > 360 days | 182 | 46 |
| 15,844 | 12,968 |
The Group carried out a test of impairment of all receivables from customers and receivables from subcontractors
and estimated that receivables from customers and subcontractors as of 31 December 2024 were reported in the
age of 360 days, are collectible.
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
64
19. RECEIVABLES (CONTINUED)
b) Receivables from the state and other institutions
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Grant and subsidies receivables | 2,100 | 217 |
| VAT receivables | 73 | - |
| Profit tax advances | 134 | 154 |
| Other receivables from the state and other institutions | 40 | 43 |
| 2,347 | 414 |
c) Other receivables
| 31 December 2024 | 31 December 2023 | |
| Interest receivables | 132 | 131 |
| Advances given | 1,816 | 299 |
| Other receivables | 19 | 20 |
| 1,968 | 450 |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
65
21. 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) Given loans, deposits and similar
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Loans to legal entities | 1,417 | 1,117 |
| Short - term loans granted to natural persons | 17 | 16 |
| Deposits | 51 | 3,000 |
| Loans, deposits and similar | 1,485 | 4,133 |
| Loans given to related parties | 1,122 | 1,122 |
| 2,607 | 5,255 |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
66
20. CURRENT FINANCIAL ASSETS (CONTINUED)
| Movements from receivables from granted loans in 2024 | In EUR '000 | |||||
| 1 January 2024 | Increase in givenloans | Collection of given loan | Transfer from long to short term and vice versa | Calculated exchange rate differences | 31 December 2024 | |
| Given long-term loans | ||||||
| Given long-term loans to natural persons | 21 | - | (2) | (12) | - | 7 |
| 21 | - | (2) | (12) | - | 7 | |
| Given short-term loans | ||||||
| Given loans to related parties | 1,122 | 138 | - | - | - | 1,260 |
| Given loans to companies | 1,117 | 300 | - | - | - | 1,417 |
| Given loans to natural persons | 16 | - | (13) | 12 | - | 16 |
| Total short-term loans | 2,255 | 438 | (13) | 12 | - | 2,693 |
| TOTAL | 2,276 | 438 | (15) | - | - | 2,700 |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
67
20. CURRENT FINANCIAL ASSETS (CONTINUED)
| Movements from receivables from granted loans in 2023 | In EUR '000 | |||||
| 1 January 2023 | Increase in given loans | Collection ofgiven loan | Transfer from long to short term and vice versa | Calculated exchange rate differences | 31 December 2023 | |
| Given long-term loans | ||||||
| Given long-term loans to natural persons | 15 | 22 | - | (16) | - | 21 |
| 15 | 22 | - | (16) | - | 21 | |
| Given short-term loans | ||||||
| Given loans to related parties | 862 | 410 | (150) | - | - | 1,122 |
| Given loans to companies | 1,117 | - | - | - | - | 1,117 |
| Given loans to natural persons | 4 | 8 | (12) | 16 | - | 16 |
| Total short-term loans | 1,983 | 418 | (162) | 16 | - | 2,255 |
| TOTAL | 1,998 | 440 | (162) | - | - | 2,276 |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
68
21. CASH AND CASH EQUIVALENTS
| in EUR ‘000 | ||
| 31 December | 31 December | |
| 2024 | 2023 | |
| Bank accounts – domestic currency | 505 | 2,540 |
| 505 | 2,540 |
22. DEFERRED EXPENSES AND ACCRUED INCOME
| in EUR ‘000 | ||
| 31 December | 31 December | |
| 2024 | 2023 | |
| Prepaid expenses | 67 | 84 |
| 67 | 84 |
Movement in prepaid expenses during the year was as follows:
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Balance as of 1 January | 83 | 53 |
| Increase in prepaid expenses | 1,153 | 614 |
| Decrease in prepaid expenses | (1,168) | (583) |
| Balance as of 31 December | 67 | 84 |
23. SHARE CAPITAL
Capital represents the Group's own permanent assets for operations. It includes the original share capital,
together with legal reserves, revaluation reserves, retained earnings and the current year's result.
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 Company's Shareholders, the share capital of the Company was increased from
EUR 664 thousand to EUR 1.593 thousand by 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 Company shareholders dated 2 September 2014, the share capital was increased
by an additional contribution of EUR 931,240.30 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 2024, the 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 a capital gain in the amount of EUR 11,547 thousand, which from 1
January 2014 to 31 December 2015 was reduced by the costs of recapitalization incurred during that period in
the total value of EUR 374 thousand.
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
69
23. SHARE CAPITAL (CONTINUED)
The ownership structure of the share capital as of 31 December 2024 is presented below, with the largest 10
shareholders holding 99.42% of the shares at that date:
| Number of shares (in thousands) | Ownership % | Number of shares (in thousands) | Ownership % | |
| Filipović Hrvoje | 1,105 | 58,11% | 1,105 | 58,11% |
| Interkapotal 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. (2021:Capturis d.o.o.) | 26 | 1,11% | 26 | 1,11% |
| OTP banka d.d./1MO | 14 | 0,74% | 14 | 0,74% |
| Katranček Marko /OTP banka d.d./ SZAIF d.d. | 4 | 0,19% | 6 | 0,30% |
| Mitrović Davor/HITA vrijednosnice d.d./1195 | 4 | 0,19% | 4 | 0,23% |
| Others | 74 | 4,40% | 76 | 4,15% |
| 1,902 | 100,00% | 1,902 | 100,00% |
24. NON-CONTROLLING INTEREST
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Balance as of 1 January | 4,111 | 4,361 |
| Payment of dividends for the year | (500) | (800) |
| Net profit for the year | 1,409 | 550 |
| Balance as of 31 December | 5,020 | 4,111 |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
70
25. LIABILITIES FOR LOANS, DEPOSITS AND SIMILAR
| Opening balance 1 January2024 | Increase in loan liabilities | Repayment of loan principle | Transfer from long to short term and vice versa | Exchange rate differences | Closing balance 31 December 2024 | |
| Non-current liabilities | ||||||
| Liabilities for loans to trading companies | 265 | - | - | 265 | - | 531 |
| Total non-current loans | 265 | - | - | 265 | - | 531 |
| Current liabilities | ||||||
| Current liabilities for corporate loans | 1,394 | 5,681 | (2,606) | - | - | 4,469 |
| Current loan liabilities to individuals | 2,359 | - | (750) | (1,609) | - | - |
| Total current loans and deposits | 3,753 | 5,681 | (3,356) | (1,609) | - | 4,469 |
| TOTAL | 4,018 | 5,681 | (3,356) | (1,344) | - | 5,000 |
| Opening balance 1 January2023 | Increase in loan liabilities | Repayment of loan principle | Transfer from long to short term and vice versa | Exchange rate differences | Closing balance 31 December 2023 | |
| Non-current liabilities | ||||||
| Liabilities for loans to trading companies | 265 | - | - | - | - | 265 |
| Total non-current loans | 265 | - | - | - | - | 265 |
| Current liabilities | ||||||
| Current liabilities for corporate loans | 1,394 | - | - | - | - | 1,394 |
| Current loan liabilities to individuals | 265 | 750 | - | 1,344 | - | 2,359 |
| Total current loans and deposits | 1,659 | 750 | - | 1,344 | - | 3,753 |
| TOTAL | 1,924 | 750 | - | 1,344 | - | 4,018 |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
71
26. LIABILITIES TO BANKS AND OTHER FINANCIAL INSTITUTIONS
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Non-current liabilities to banks | 22,459 | 13,982 |
| Current liabilities to banks | 3,004 | 3,391 |
| 25,463 | 17,373 |
Summary of borrowing arrangements
Long-term liabilities to credit institutions are related to loans from commercial banks and loans from IPARD, SAPA
and IBRD programmes. Interest on received loans ranges from 1% to 9.5%
Long-term loans are granted in euro. Part of these loans relates to the financing of reconstruction and
modernization of production facilities for the production of cheese and for financing permanent working assets.
Current bank loans contain short-term loans intended for financing current liquidity and a part of long-term loans
maturing in the next year.
The value of assets secured by a mortgage to credit borrowings from banks as of 31 December 2024 amounted
to EUR 57,502 thousand (as of 31 December 2023: EUR 19,615 thousand) which refer to:
Mortgages Granolio d.d., Zagreb:
1. Tangible assets: EUR 47,554 thousand (31 December 2023: EUR 12,040 thousand)
2. Shares in Zdenka: EUR 5,676 thousand (31 December 2023: EUR 5,676 thousand)
Total value of mortgaged assets: EUR 53,230 thousand (31 December 2023: EUR 17,716 thousand)
Zdenka - mliječni proizvodi d.o.o., Veliki Zdenci- value of tangible assets encumbered by mortgage: EUR 1,899
thousand (2023: EUR 1,889 thousand)
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
72
26. LIABILITIES TO BANKS AND OTHER FINANCIAL INSTITUTIONS
Movement of liabilities to banks and other financial institutions in 2024:
| in EUR ‘000 | |||||||
| Opening balance 1 January 2024 | Increase in loan liabilities | Repayment of loan principle | Write-off | Transfer from long to short term and vice versa | Exchange rate differences | Closing balance 31 December 2024 | |
| Long-term loans | |||||||
| Long-term bank loans | 13,981 | 11,475 | - | - | (2,997) | - | 22,459 |
| Short-term loans | |||||||
| Short-term bank loans | 3,391 | 3,906 | (7,290) | - | (2,997) | - | 3,004 |
| TOTAL | 17,372 | 15,381 | (7,290) | - | - | - | 25,463 |
| in EUR ‘000 | |||||||
| 31 December 2024 | 2025 | 2026 | 2027 | 2028 | 2029 after | 2029 | |
| Liabilities to banks | 25,463 | 3,004 | 3,261 | 3,882 | 2,965 | 2,152 10,199 | |
| 25,463 | 3,004 | 3,261 | 3,882 | 2,965 | 2,152 10,199 |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
73
26. LIABILITIES TO BANKS AND OTHER FINANCIAL INSTITUTIONS (CONTINUED)
Movement of liabilities to banks and other financial institutions in 2023:
| in EUR ‘000 | |||||||
| Opening balance 1 January 2023 | Increase in loan liabilities | Repayment of loan principle | Write-off | Transfer from long to short term and vice versa | Exchange rate differences | Closing balance 31 December 2023 | |
| Long-term loans | |||||||
| Long-term bank loans | 13,501 | 3,318 | - | - | (2,838) | - | 13,981 |
| Short-term loans | |||||||
| Short-term bank loans | 3,135 | 3,298 | (5,880) | - | 2,838 | - | 3,391 |
| TOTAL | 16,636 | 6,616 | (5,880) | - | - | - | 17,372 |
Maturity of loan liabilities to banks:
| in EUR ‘000 | ||||||
| 31 December 2023 | 2024 | 2025 | 2026 | 2027 | after 2028 | |
| Liabilities to banks | 17,372 | 3,392 | 2,997 | 3,261 | 5,450 | 2,272 |
| 17,372 | 3,392 | 2,997 | 3,261 | 5,450 | 2,272 |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
74
27. LIABILITIES UNDER 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 under securities refer to liabilities for bills of exchange to the companies CIM Bank EUR 499 thousand
(2023: EUR 665 thousand).
Movement of liabilities under securities in 2024
| Opening balance 1 January 2024 | Repayment | Write-off | Transfer from long to short term | Closing balance 31 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 |
The maturity of the securities is shown as follows:
| balance 31 December 2024 | 2025 | 2026 | 2027 | |
| Liabilities under securities | 499 | 166 | 166 | 167 |
| 499 | 166 | 166 | 167 |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
75
27. LIABILITIES UNDER SECURITIES (CONTINUED)
Movement of liabilities under securities in 2023
| Opening balance 1 January 2023 | Repayment | Write-off | Transfer from long to short term | Closing balance 31 December 2023 | |
| Long term liabilities | |||||
| Liabilities under securities | 665 | - | - | (166) | 499 |
| Short term liabilities | |||||
| Liabilities under securities | 246 | (246) | - | 166 | 166 |
| TOTAL | 912 | (246) | - | - | 665 |
The maturity of the securities is shown as follows:
in EUR ‘000
| Balance | |||||
| 31 December | 2024 | 2025 | 2026 | 2027 | |
| 2023 | |||||
| Liabilities under securities | 665 | 166 | 166 | 166 | 167 |
| 665 | 166 | 166 | 166 | 167 |
28. LONG-TERM TRADE PAYABLES
| In EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Domestic suppliers | 254 | 827 |
| Foreign suppliers | - | 0 |
| 254 | 827 |
Liabilities relate to liabilities to suppliers mainly for long-term leases..
29. SHORT-TERM LIABILITIES
(a) Trade payables
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Domestic suppliers | 17,807 | 8,520 |
| Foreign suppliers | 2,347 | 2,165 |
| 20,154 | 10,685 |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
76
29. SHORT TERM LIABILITIES (CONTINUED)
Ageing analysis of trade payables as of 31 December 2024:
in EUR ‘000
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Not yet due | 14,076 | 7,739 |
| 0-90 days past due | 5,361 | 2,204 |
| 91-180 days past due | 341 | 472 |
| 181-360 days past due | 131 | 141 |
| > 360 days | 95 | 128 |
| 20,004 | 10,685 |
(b) Liabilities for taxes, contributions and similar benefits
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| VAT payable | 260 | 673 |
| Taxes and contributions from and on salaries | 80 | 0 |
| Other taxes and contributions payable | 268 | 192 |
| 46 | 37 | |
| 654 | 902 |
30. ACCRUED EXPENSES AND DEFERRED INCOME
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Deferred income | 3,254 | 3,602 |
| Accrued expenses | - | 20 |
| 3,254 | 3,622 |
Movements in deferred income during the year were as follows
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Balance as of 1 January | 3,602 | 2,577 |
| Movements during the year | (369) | 1,045 |
| Balance as of 31 December | 3,233 | 3,622 |
Movements in accrued expenses during the year were as follows:
| in EUR ‘000 | ||
| 2024 | 2023 | |
| Balance as of 1 January | 20 | 110 |
| Movements during the year | (20) | (90) |
| Balance as of 31 December | - | 20 |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
77
31. CONTINGENT LIABILITIES
As of 31 December 2024, the Group has liabilities under lease agreements in the total amount of EUR 251
thousand, which have not yet been realized or disclosed in the statement of financial position.
Contractual payment of obligations under contracted leases is shown as follows
in EUR ‘000
31 December 2024
| 31 December 2024 | 2025 | 2026 | 2027 2028 | |
| Rentals | 251 | 238 | 7 | 4 2 |
2025
2026
2027 2028
32. RELATED PARTY TRANSACTIONS
| in EUR ‘00031 December 2024 Assets Trade and other receivables | Loans given | Liabilities Long-term liabilities | Short-term liabilities | |
| Stan arka d.o.o. | - | 297 | - | - |
| Pet na treću d.o.o. | 489 | 60 | - | 107 |
| SP ONE d.o.o. | - | 138 | - | - |
| Key management | 159 | 765 | 1,345 | 10 |
| Cautio | 4 | - | - | - |
| 651 | 1,260 | 1,345 | 117 |
| in EUR ‘00031 December 2023 Assets Trade and other receivables | Loans given | Liabilities Long-term liabilities | Short-term liabilities | |
| Stan arka d.o.o. | - | 297 | - | - |
| Pet na treću d.o.o. | 489 | 60 | - | 32 |
| SP ONE d.o.o. | - | - | - | 1,099 |
| Key management | 144 | 765 | 1,345 | 10 |
| Cautio | 4 | - | - | - |
| 637 | 1,122 | 1,345 | 1,141 |
The Group's key management consists of the members of the Management Board of Granolio d.d. and the directors
of the subsidiaries.
Remuneration paid to key management during 2024 amounted to EUR 349 thousand (in 2023: EUR 348 thousand).
During 2024, EUR 23 thousand in remuneration was paid to the members of the Supervisory Board (in 2023: EUR
37 thousand).
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
78
32. RELATED PARTY TRANSACTIONS (CONTINUED)
Income and expenses for the years ended 31 December 2024 and 31 December 2023, arising from transactions
with related parties, were as follows:
| in EUR ‘000 | ||||
| 2024 | 2023 | |||
| Income | Expenses | Income | Expenses | |
| Cautio d.o.o. | 5 | - | - | - |
| Pet na treću d.o.o. | 2 | 412 | 1 | 290 |
| Key management | 15 | 213 | 16 | - |
| 22 | 625 | 17 | 290 |
33. EARNING PER SHARE
| 31 December 2024 | 31 December 2023 | |
| Profit attributable to the Group | 4,181 | 1,892 |
| Weighted average number of ordinary shares used in the | 1,901,643 | 1,901,643 |
| calculation of the basic earnings per share | ||
| Earnings per share (in EUR and cent) | 2.19 | 0.99 |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
79
34. RISK MANAGEMENT
34.1. Financial risks
Equity risk management
Net debt-to-equity (Gearing ratio)
The Group 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:
| 31 December 2024 | in EUR ‘00031 December 2023 | |
| Debt (long-term and short-term loans and liabilities for securities) | 30,962 | 22,057 |
| Lease liabilities (long-term and short-term) | 345 | 495 |
| Cash and cash equivalents | (505) | (2,541) |
| Net debt | 30,802 | 20,010 |
| Equity | 28,441 | 23,355 |
| Debt to equity ratio | 92% | 95% |
Debt is defined as long-term and short-term loans, liabilities under securities and lease obligations. Equity
represents the value of capital and reserves and non-controlling interest.
The Group'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 and non-controlling interest.
Categories of financial instruments
| in EUR ‘000 | ||
| 31 December 2024 | 31 December 2023 | |
| Financial assets | ||
| Loans and receivables | 21,305 | 19,434 |
| Cash | 505 | 2,541 |
| Financial liabilities held at amortised cost: | ||
| Liabilities under loans and securities | 25,962 | 18,038 |
| Trade payables | 20,408 | 11,512 |
| Loan liabilities | 5,000 | 4,019 |
| Lease liabilities | 345 | 495 |
| Other liabilities | 6,805 | 6,360 |
Financial risk management objectives
The Group finances a part of its operations using foreign-currency denominated borrowings. Therefore, the Group
is subject to an impact of changes in the applicable foreign exchange and interest rates. The Group is also
exposed to credit risk which arises from the sales it has made with deferred payment and is also exposed to the
risk of non-collectability of receivables
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
80
34. RISK MANAGEMENT (CONTINUED)
34.1. Financial risks (continued)
Price risk management
The largest market on which the Group provides its services is the market of the Republic of Croatia. The Group's
Management Board determines the prices of the services based on market prices. The purchase function is
centralised, which in itself provides the Group an image of a respectable customer with a good negotiation
position.
Currency risk
Since the introduction of the euro, the Group is not exposed to the risk of exchange rate changes.
On the date of the report, the Group did not use financial instruments to hedge against adverse exchange rate
movements.
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
81
34. RISK MANAGEMENT (CONTINUED)
34.1. Financial risks (continued)
Credit risk
The Group is exposed to the risk of default of a portion of its trade receivables. The Group transacts generally
with retail chains with which it has a long history of cooperation. As a result, the Group's credit risk is lower and
present mainly to the extent it reflects potential issues in the retail industry. The Group 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 Group 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 Group 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 Group 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.
The Group cannot provide any guarantees that the monitoring of the financial condition of customers,
measurement of the control of the collection or collateral will be effective and that the eventual possible credit risk
will not affect on operational and financial condition of the Group as neither that the balance of commodity loans
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 Group is exposed to the risk of growth in interest rates. At the reporting date, the Group
did not use any financial instruments to hedge its position from unfavourable interest rate movements.
Due to the fact that the Group uses loans with fixed and variable interest rates, it is exposed to the risk of changes
in interest rates. Most loans are nevertheless contracted with fixed interest rates (as a result of the parent
company's pre-bankruptcy settlement).
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 EUR 670). The increased level
of long-term debt at variable rates increases the impact of a potential change in the interest rates on the profit.
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
82
34. RISK MANAGEMENT (CONTINUED)
34.1. Financial risks (continued)
Liquidity risk
There is a risk that the Group may not be able to meet all of its obligations as they fall due, which may be caused
by inadequate level of recoverability of amounts owed by customers, inappropriately matched maturities of the
debt, or the inability to obtain loans from financial institutions. In order to reduce the liquidity risk, the Group applies
on-going measures to recover its receivables and monitor the liquidity of its customers, seeks to optimise the
maturity structure of the debt and obtain lines of credit available to it at financial institutions to be able to continue
servicing its debt in unforeseen circumstances.
However, the Group cannot provide any assurance that its liquidity management will be efficient, and that the
potential liquidity risk will not have a significant impact on its performance and financial condition.
The following tables detail the remaining contractual maturities of the Group'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 Group 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 Group can be required
to make the payment.
| Weighted | |||||||
| average effective | Up to 1 month | 1 to 3 months | 3 months to 1 year | 1 to 5 years | Over 5 years | Total | |
| interest rate | |||||||
| % | |||||||
| 31 December 2024 | |||||||
| Non-interest bearing | 7,909 | 5,542 | 8,610 | 251 | - | 22,312 | |
| Interest bearing | 268 | 537 | 6,896 | 14,684 | 10,220 | 32,604 | |
| 8,177 | 6,079 | 15,505 | 14,935 | 10,220 | 54,916 | ||
| 31 December 2023 | |||||||
| Non-interest bearing | 7,272 | 5,802 | 5,062 | 183 | 176 | 18,495 | |
| Interest bearing | 362 | 2,067 | 3,309 | 13,469 | 2,722 | 21,929 | |
| 7,634 | 7,869 | 8,371 | 13,652 | 2,898 | 40,424 |
The following table details the Group’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
in order to understand the Group's liquidity risk management as the liquidity is managed on a net asset and liability
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
83
34. RISK MANAGEMENT (CONTINUED)
34.1. Financial risks (continued)
| Weighted average effective interest rate | Up to 1 month | 1 to 3 months | 3 months to 1 year | 1 to 5 years | Over 5 years | Total | |
| % | |||||||
| 31 December 2024 | |||||||
| Non-interest bearing | 9,045 | 1,745 | 7,852 | 498 | - | 19,140 | |
| Interest bearing | 147 | 132 | 813 | 1,916 | 5 | 3,014 | |
| 9,192 | 1,878 | 8,665 | 13,652 | 5 | 22,154 | ||
| 31 December 2023 | |||||||
| Non-interest bearing | 10,897 | 3,353 | 2,044 | 489 | - | 16,783 | |
| Interest bearing | 243 | 3 | 1,525 | 874 | 5 | 2,650 | |
| 11,140 | 3,356 | 3,570 | 1,363 | 5 | 19,434 |
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
84
34. RISK MANAGEMENT (CONTINUED)
34.1. Financial risks (continued)
Fair value measurement
Some of the Group's financial assets and financial liabilities are measured at fair value at the end of each reporting
period. The following table gives information about how the fair values of these financial assets and financial
liabilities are determined (in particular, the valuation techniques and inputs used).
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable,
willing parties under common market conditions.
The Management Board considers that the carrying amounts reported in these financial statements of financial
assets and financial liabilities carried at amortised cost approximate their fair values.
34.2. 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, both in milling and milk processing (Zdenka).
Flour production
Flour production could be adversely affected by extraordinary events such as fire, explosions, failure of production
equipment, prolonged or unplanned maintenance, and construction of roads or closing of main transport routes,
flooding, storms or other extreme weather conditions. Although the Group 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 Group may be exposed to costs not covered by insurance.
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
85
34. RISK MANAGEMENT (CONTINUED)
34.2. Industry risks (continued)
Dairy production
In purchasing raw milk for the purposes of dairy production, Zdenka - mliječni proizvodi relies to a large extent on
a number of cooperative farmers, which exposes it to the risk of the input material not being of sufficient quality
to produce premium-quality products or the risk that milk is not delivered in time or in sufficient quantity. The input
quality risk is sought to be minimised using laboratories to perform microbiological tests of raw milk. In case of a
market disturbance due to the lack of raw material or its increasing prices, the Group is capable to redirect the
milk produced by Zdenačka Farma for Zdenka in a relatively short term and hence partly mitigate the risk. The
lack of milk on the domestic market may also be compensated for by importing milk. However, because of the
fierce competitive environment, Zdenka cannot protect itself from a potential increase in the milk market prices or
provide assurance that any increase in the milk price will be successfully compensated for by higher prices of the
end products.
In addition to raw milk, Zdenka also purchases inputs for processed cheese from several producers in the EU that
meet high quality standards. The risk of the lack of input or cancellation of the contract by a supplier is currently
not significant because the current level of offer exceeds the demand on the part of manufacturers, and Zdenka
itself is able to launch its own production should the market experience a significant disturbance.
The risk of product spoilage is pronounced because dairy products fall within the category of products highly
susceptible to deterioration. Zdenka seeks to minimise the risk by applying strict controls over the input,
processing it in high-tech plants and maintaining high hygiene standards in its plants.
Market risk is a significant risk for Zdenka, as it arises mostly from purchases of cheap cheese from the EU.
Therefore, in order to hedge its own margins, Zdenka focuses on the production and distribution of branded
products which are also a component of Zdenka's value. Maintaining the image and values arising from the brand
is key for a successful performance of Zdenka. Negative publicity, any legal measures or other factors could
significantly impair the value of the brand and result in lower demand on the part of customers, as well as affect
the current and future operations and financial position of Zdenka.
Livestock operations
In the milk production segment (Zdenačka farma) livestock morbidity and mortality are the prevailing risks. In order
to prevent diseases and mortality, veterinary units have been established on the farms that carry out a continuous
care of the livestock health condition. To be able to produce high-quality milk, optimum feeding standards and
hygiene in milking operations and storage of raw milk are being observed. Mortality insurance has been arranged
for all livestock.
There is also a risk that meat and milk produced may not meet the high-quality standards. However, the risk is
significantly reduced by applying high production quality standards, such as ISO and HACCP.
.
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
86
34. RISK MANAGEMENT (CONTINUED)
34.2. Industry risks (continued)
Crop operations
Crop production is exposed to unfavourable weather conditions (draught, floods, hail) which may lower the crop
yield or impair its quality, or both, and in extreme cases result in completely devastated crops. Unfavourable
weather affects cooperative farmers to whom the Group extends credits by offering seeds and intermediary
products, which may ultimately reduce the farmers' ability to settle their commodity loan debt, as described in
more detail in Note 30.1. Credit risk
The weather risk is sought to be mitigated by arranging crop insurance.
The Group also applies geographic diversification to mitigate the weather risk.
As in the case of livestock operations, the risk of crop morbidity may have a significant impact on the expected
yield (which is sometimes higher than 30%). Therefore, according to the common practice, disease prevention
activities are undertaken as the most cost-efficient and effective way of maintaining the expected yield levels.
In addition to diseases, damage caused to crops by a growing population of rodents becomes more difficult to
manage because of the currently effective regulations (with increasing damage expected in the future).
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). The fact that the Hungarian
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 Group 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 Granolio has established a sales division that is present on
international commodity markets and is currently able to purchase, at any 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 risk of production stoppages is minimized by the fact that the Group employs employees at the mill location
who are adequately trained to solve malfunctions within a reasonable time. As more significant orders of finished
products are expected due to the expansion of the milling business, the expansion of storage capacities is
underway, so that it will be possible to create product stocks in order to fulfil orders on time.
The Group 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.
In the dairy product segment, the risk of lack of raw material for the production of hot cheese is reasonable in the
sense that there are enough bidders on the market and, in the case of a supplier's inability to supply, obtain raw
material from another supplier in a relatively short time. Also, Zdenka has its own plant for the production of raw
cheese for melted cheese and, if necessary, can produce the required amount of raw material itself.
The mentioned risks of raw material procurement and product delivery may be affected by the COVID-19 virus
pandemic.
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
87
34. RISK MANAGEMENT (CONTINUED)
34.2. Industry risks (continued)
Competition risk
The Group 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.
The flour market is being increasingly concentrated, i.e. the total number of flour producers is decreasing (by
integration or liquidation of small mills), and with the aim to leverage from the economies of scale in order to
reduce the unit production cost and strengthens the competitive position on the market. To this end, the Group
acquired in 2014 the milling operations of Belje d.d., Darda, and PIK Vinkovci d.d. from the Agrokor Group.
Following the full EU membership of Croatia, the Group is no longer exposed to domestic competitors only, which
is why the need to improve the Group's competitiveness has been gaining on importance.
The Group estimates that the potential entry of new competitors into the domestic market of hot cheeses after the
accession of the Republic of Croatia to the EU membership does not represent a significant risk to the business
results, given the consumer habits and the longstanding presence of Zdenka on the domestic market, where it is
competitive both at cost and quality.
34.3. Operational risks
Key supplier and key customer concentration risk
The Group's largest customers are the leading retail chains on the market of the Republic of Croatia, as well as
foreign companies dealing in grain trade. The contract on business cooperation concluded on 2 May 2014 with
the company Konzum d.d., for a period of six years, includes representation in the supply of Konzum's retail and
wholesale network with flour from the Group's range, in line with its market share. Therefore, the Group expects
that in the future it will be most exposed to Konzum as the largest single customer, and thus to the potential risk
of changing commercial relations after the expiration of the mentioned contract.
The Group's major suppliers are those supplying the raw material and seeds for sowing. The Group seeks to
cooperate with as many suppliers as possible to mitigate the risk of discontinued cooperation with a key supplier.
Despite this, the Group cannot provide any assurance that a potential termination of cooperation with a key
supplier will not have a significant impact on the Group's performance and financial position.
The risk of change in ownership
The majority shareholder of the Group 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 Group,
by means of the rights and powers pertaining to him as a Group shareholder. Mr Filipovic's share of the Group's
ownership at the reporting date is 58.11%.
The majority share 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 Group.
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
88
34. RISK MANAGEMENT (CONTINUED)
34.3. Operational risks (continued)
Acquisition risk
The Group's strategy includes the expansion of operations, both through organic growth and acquisitions. Further
implementation of the strategy will depend, among others, on identifying acquisition opportunities and their
successful implementation. Future acquisitions may be scrutinised by the Competition Agency to identify any
potential market concentration, which means that there is a risk of an acquisition to be found non-permissible or
permissible under certain prerequisites.
The ability of the Group to efficiently integrate and manage the acquiree as well as to address adequately the
future growth would depend on a number of factors, and a potential failure could have an adverse effect on the
Group's performance and financial position. Major acquisitions as well as acquisitions outside the current markets
of the Group are possible in the future. The Group has no experience in acquisitions outside its current markets,
which could impact the success of an acquisition as well as the level of acquisition and integration costs. A large
acquisition could prove to be much more difficult from the integration point of view as well as require significantly
higher funds than any acquisition performed in the past. Acquisitions beyond the Group's current markets could
be a challenge also because of cultural and language barriers as well as from the aspect of integrating and
managing the operations in territories much more remote from the ones on which the Group presently operates.
The Group cannot provide any assurance that it will be able to address properly all the risks of future acquisitions
or integrations. As a result of an acquisition, the Group's debt may increase, both through raising funds to finance
the acquisition and through the assumption of the debt of the acquiree, which could considerably limit the level of
debt the Group would be able to take on in the future. Any considerable increase in the Group's debt in connection
with an acquisition could have a material impact on the Group's performance.
In undertaking any future acquisition and as part of the related acquisition analysis, the Group will have to make
assumptions about expected cost savings and potential synergies to be achieved. Such estimates are uncertain
and subject to a series of significant operational, economic and competition risks that might have a significant
influence, as the actual results could differ from the initial estimates. The Group is faced with a risk of failure to
achieve all or a part of savings and synergies envisaged at the beginning of an acquisition.
In addition, in an acquisition process, the Group usually assumes all the liabilities and acquires all assets of the
acquiree. Although the Group performs acquisition due diligence and seeks to obtain adequate guarantees and
assurance as to the value of assets and liabilities it will acquire, it cannot provide any assurance that it will be able
to identify all actual and contingent liabilities in advance of the actual acquisition implementation. Acquisitions
resulting in the Group assuming contingent liabilities without receiving adequate assurance or warranties could
have a material impact on the performance and financial position of the Group.
Working capital risk
Managing working capital successfully is a key area of the Group's operations. The Group 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 Group has made significant investments in improving its logistics to improve the inventory turnover ratio and
the operational efficiency ratio. Although the Group has been managing its working capital successfully, no
assurance can be given that this will continue in the future, and the Group's performance and financial position
may become affected.
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
89
34. RISK MANAGEMENT (CONTINUED)
34.3. Operational risks (continued)
Input commodity price risk
The operating results are largely influenced by the price of wheat as the key input commodity for the Group'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 Group'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 Group's past performance is conclusive of the past
wheat purchase price fluctuations positively correlating with historic flour price fluctuations. However, a certain
period of time 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 Group'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
Group 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 Group 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.
In the dairy product segment, raw milk prices may have a decisive impact on Zdenka's business result. In the
event of a significant increase in the market prices of raw milk, it is possible to divert the production of the
Zdenačke farme d.o.o. (Zdenačka farm currently does not supply Zdenka milk for commercial reasons only
because it has a better selling price for milk from another customer) on the supply of Zdenka, if it is determined
that it is in the interest of the entire Granolio Group.
Dependence on the management and key personnel
The Group relies heavily on its staff as one of its key competitive advantages. This means that the Group 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 Group 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 Group's operations.
IT risks
The Group 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 Group'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
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
90
34. RISK MANAGEMENT (CONTINUED)
34.3. Operational risks (continued)
Antitrust and competition law non-compliance risk
It is a part of the overall strategy of the Group to become the leading flour producer on the Croatian market and
flour supplier in the region, which may render the Group 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 Group 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 Group.
To mitigate the risk, the Group 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 Group may have to ask from the Competition Agency
to assess the eligibility of the intended concentration. The Group 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 Group. The concentration eligibility
assessment itself could affect the timing of the acquisition.
Litigation risk
As any business entity, so is also the Group 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 Group'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 Group cannot provide any assurance that the outcome of potential future legal and regulatory
proceedings or measures will not have a significant impact on its performance and financial condition.
The risk of liabilities or losses not covered by insurance
The level of insurance coverage is common for the industry in which the Group operates. The insurance policies
of the Group 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 Group 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 Group's operations and financial condition.
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
91
34. RISK MANAGEMENT (CONTINUED)
34.4. General risks
Business environment risk
The business environment risk includes political, legal and macroeconomic risks prevailing in the business
environment of the Group, which is primarily the Croatian market on which the Group generates 82% of its total
revenue (2021: 76%), followed by the markets of Bosnia and Herzegovina, Italy, Serbia, Hungary and Slovenia.
The Group cannot provide any guarantee that the Croatian market where the Group realizes most of its revenues
will continue with the successful implementation of political and economic reforms. Delays or failures in carrying
them out could have an impact on the Group's business. The state budget savings and tax burden currently being
implemented in the Republic of Croatia could result in slowing economic growth or reducing disposable income,
which could affect both revenue and profitability of the Group.
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 Group cannot warrant that Croatia will fully implement the intended reforms or that the political environment
will favour their implementation. In addition, the Group 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 Group may come into a position of not being able to succeed in exercising or protecting
some of its rights.
The open issues Croatia has with its neighbours do not affect the political stability of the state but represent
legitimate representation of the country's strategic and economic interests in international relations, as do all other
developed states. As the Group's business is based on the market of the Republic of Croatia, the danger of the
influence of other states in the environment is minimal.
Granolio Group, Zagreb
Notes to the consolidated financial statements (continued)
for the year ended 31 December 2024
92
34. RISK MANAGEMENT (CONTINUED)
34.4. General risks (continued)
Business environment risk
The Group'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 Group could have
problems in expanding its business or meeting its financial obligations. Under such circumstances, the Group'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 Group. If the current economic situation would persist, the
Group, 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 Group is also under the influence of international trends, as wheat, being the Group'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 Group 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.
Risk of changes in legal framework
As a food producer, the Group 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 Group 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 Group seeks to keep pace and anticipate any such changes, as any non-
compliance could result in various sanctions. The Group 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 Group 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 Group 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 Group. Additional regulations, or interpretations of current regulations, could be introduced
in the future, which may affect the Group's business and products. The Group cannot provide any warranty that
any costs of complying with any such future initiatives will not have a significant impact on the performance and
