M SAN GRUPA ANNUAL REPORT 2021 M SAN GROUP IN 2021 1
ANNUAL
Report
2021
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OVERVIEW OF KEY INDICATORS IN 2021
A LETTER FROM THE CHAIRMAN OF THE BOARD
ABOUT US
CORPORATE GOVERNANCE
OPERATIVE BUSINESS
PLANS FOR 2022
INDEPENDENT AUDITOR’S REPORT
CONSOLIDATED FINANCIAL STATEMENTS
SEPARATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
CONTENT
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 4 M SAN GROUP IN 2021 5
*The nancial measures used are not dened by International Financial Reporting Standards. For more
details on the Alternative Performance Indicators used, see Table 3. Alternative Performance Measures
*The nancial measures used are not dened by International Financial Reporting Standards. For more
details on the Alternative Performance Indicators used, see Table 3. Alternative Performance Measures
OVERVIEW OF KEY INDICATORS IN 2021
GROUP GROUP IN 2021
2,710.1 million
BUSINESS REVENUE*
(IN HRK)
86.4 million
NORMALISED EBITDA*
(IN HRK)
73.8 million
NORMALISED EBIT*
(IN HRK)
47.1 million
NORMALISED NET PROFIT*
(IN HRK)
+2.1%
GROWTH
(COMPARED WITH 2020)
+34.1%
GROWTH
(COMPARED WITH 2020)
+39.4%
GROWTH
(COMPARED WITH 2020)
+24.3%
GROWTH
(COMPARED WITH 2020)
COMPANY GROUP IN 2021
2,139.5 million
BUSINESS REVENUE*
(IN HRK)
+4.7%
GROWTH
(COMPARED WITH 2020)
36.2 million
NORMALISED EBITDA*
(IN HRK)
+19.9%
GROWTH
(COMPARED WITH 2020)
28.2 million
NORMALISED EBIT*
(IN HRK)
+14.0%
GROWTH
(COMPARED WITH 2020)
11.2 million
NORMALISED NET PROFIT*
(IN HRK)
(54.1%)
GROWTH
(COMPARED WITH 2020)
OVERVIEW OF KEY INDICATORS IN 2021
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COMMENT FROM
MIROSLAV HUZJAK,
Chairman of the Board
The COVID-19 pandemic has been
a marking event for the business of
the Group, significantly affecting the
business for multiple reasons. The
increased volume of work from home
gave rise to the need for products
and additional equipment that make
it possible. At the same time, supply
issues continued for all key principals,
caused by production difficulties, the
lack of essential components, and
insufficient transport capacities.
Despite these challenges, the
Group has generated 2,710 M HRK of
revenue, the most revenue it has ever
generated, along with the growth of
the values of all annual profitability
indicators, thus the normalised EBITDA
has risen by 34.1% when compared
with 2020.
Owing to quality contracts with
leading global principals, the Group
has managed to secure a sufficient
quantity of products for the needs of
its partners and has for the most part
of the year, with occasional shortages,
ensured the timely and continued
delivery of most necessary products.
The Group has also enabled all of its
employees to work from home, where
business conditions allow for such
work.
During the periods with a larger
number of infected people, the Group
retained the minimum number of
employees at the workplace, while
everyone else worked from home and
alternated every few weeks.
We continued developing our
own brand during 2021 and have
strengthened the export to markets
outside the region.
In July 2021, the Group successfully
entered the capital market by issuing
a corporate bond in the amount of
200 million HRK that was met with
enthusiasm by the investors and
demand significantly exceeded the
targeted issue amount.
MIROSLAV HUZJAK,
Chairman of the Board
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 8 M SAN GROUP IN 2021 9
ABOUT US
M SAN Grupa is a limited liability company for the
manufacture of computers, trade, import, and export
with a registered seat at Zagreb, Buzinski prilaz
10, represented by the Chairman of the Board, Mr.
Miroslav Huzjak, Company Registration No. (MBS):
080157581, registered at the Commercial Court in
Zagreb in 1995 under the company name M SAN
d.o.o., while it is given today’s company name in 1997.
M SAN Grupa is the largest privately-owned IT
company in the Republic of Croatia . The M SAN Grupa,
whose primary activity is the distribution of computer
hardware, software, and consumer electronics
includes, among others, the companies doing
business in the region, such as Kim Tec Bosnia and
Herzegovina, Kim Tec Serbia, Kim Tec Montenegro,
and Pakom Kompani Macedonia. In addition, the
Group manufactures IT equipment and consumer
electronics with its own brand, including TVs, air
conditioners, mobile phones, appliances, desktop
computers, and electric mobility products (electric
scooters, electric bicycles) that the company then
distributes through its distribution network.
In its portfolio, the Group also includes the activity of
logistics that primarily includes storage, handling,
and transport of goods (M SAN LOGISTIKA), service
activity for the provision of servicing and repair of
goods within or outside the warranty deadline (MR
Servis d.o.o., KIM TEC-SERVIS d.o.o. Vitez, KIM-TEC
SERVIS doo Beograd), and the activity of electronic
waste collection and disposal (M SAN EKO d.o.o., KIM
TEC EKO d.o.o. Vitez). In addition to primary activities,
EKO Bosanska Posavina d.o.o. does business in the
agriculture sector. The Group has no branch offices.
Since its founding, the Group has implemented a
strategy of strengthening its portfolio with all major
world-renowned IT equipment and consumer
electronics brands. Particular emphasis has been
placed on the manufacture and development of
own brands, whereby the production takes place in
the People’s Republic of China, Republic of Turkey,
Republic of Croatia, and Republic of Serbia. A larger
part of manufacture takes place in facilities of third
persons, while the facilities of the Group, namely, the
company in the Republic of Croatia and the company
KIM-TEC doo Beograd in the Republic of Serbia,
perform the assembly of the personal computers and
TVs of own brands. In parallel, the Group is expanding
its business in the Adria region by establishing
companies and logistics centres while developing
its own logistics, service, and servicing support. The
own logistics network makes up for one of the key
comparative advantages of the Group.
From the entry on the market until today, we have
obtained the trust of our customers, partners, and
suppliers, the number of whom continues to increase.
We are proud that we have become one of the
best distributors on the regional IT and CE markets
since the beginnings of the company. Our market
leading position we attribute to the dedication of our
employees, suppliers, customers, and stakeholders
because we passionately believe that by achieving
common goals, we achieve success and enable the
further expansion and improvement of our business.
The Company does not conduct research and
development activities.
The Company will publish a non-financial report with
all relevant parameters on the website (https://www.
msan.hr/) within the legally prescribed deadline.
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BUSINESS MODEL BUSINESS MODEL
The business model of M SAN Grupa is based on building and maintaining the trust and reliability of the
cooperation with suppliers and customers, the development of the product group portfolio diversity and
the financial stability, while particular care is dedicated to products of own brands. Extreme attention is
dedicated to the optimisation of supplies and rapid capital turnover that has shown to be effective and
affordable in conditions of hindered supply during the COVID-19 pandemic.
M SAN’s portfolio includes products of own brands. We have acquired a large number of satisfied partners
and customers by investing in the manufacture, distribution, marketing, and development. Own brands
that we are proud of are VIVAX in the range of consumer electronics, MS Energy in the range of e-mobility,
MSGW computers, MS in the range of peripherals, cables, drones, computer cases and power supplies,
mobile phone accessories, laptop, and desktop computers, as well as SOLMACHT that covers the area of
solar systems.
The brand VIVAX, as a national product, is present on the Croatian market since 2004 and has
been placed onto a total of 39 markets, i.e., 4 continents. The VIVAX range nowadays offers
more than 250 different products that can be divided into 6 product groups: Imago (TV sets),
Cool (air conditioners), Home (small household appliances and appliances), Vox (audio, Hi-Fi),
Smart (smartphones) and Tablets. The entire range and design of VIVAX products has been
entirely designed in Croatia, while high quality standards were ensured by implementing strict
procedures in production processes with a particular emphasis on quality control processes.
VIVAX is a part of a group of rare European brands of consumer electronics that manufactures
its products in Europe. Additionally, M SAN also has a production line of LED TV devices ranging
from 22” to 65” that takes place in own facilities in Rugvica. This manufacture is intended for the
Croatian and European Union markets.
MS Energy is a brand of electric scooters, bicycles, and all other modern personal electronic
transport systems. It has been present on the Croatian market since 2019 and today’s range of
MS Energy is divided into two categories: electric scooters and electric bicycles. In today’s world,
where mobility and ecology define the new lifestyle, MS Energy offers answers to the customer’s
demands for sustainable, simple, and smart transport solutions, i.e., full e-mobility. One of the
foundations of the MS Energy brand is the trust in the quality of the e-mobility products. The
strategy of creating the product and the entire production process are based on the use of
proven technological solutions, while the idea itself to create the product is based on the desire
to provide the user with a complete, dependable, environmentally friendly and affordable
solution for city mobility issues.
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MS is a private brand of the M SAN Group, which combines the production and sale of computers
peripherals discount headphones, speakers, keyboards and mice, and enclosures, power
supplies and cables.
With a tradition of 18 years, it successfully operates in the Croatian market and the markets of
the region (Serbia, Bosnia and Herzegovina, Macedonia, Montenegro) and expands its business
to other EU markets. Every the production cycle phase is subject to strict quality control thus
ensuring reliability and functionality of each device, and ultimately a quality product at an
affordable price, synonymous with quality and reliability.
SOLMACHT, the youngest own brand in the M SAN Group’s portfolio, was created in response
to market needs for complete solutions in the field of solar power plant construction. Through
Solmacht’s framework, business and private customers are provided with a complete solar
power plant construction service: from the conceptual design and detailed design of the
solar power plant in accordance with customer needs, through professional assistance in
obtaining permits and approvals, supply of all solar power plant components and performance
supervision, all the way to commissioning.
MSGW computers, as M SAN’s own brand, has been on
the Croatian market since 2005. All computers have
been manufactured in M SAN’s automated facility for the
manufacture of IT equipment and have been subjected
to numerous functional tests. MSGW computers meet all
of the necessary demands required by Microsoft for full
compatibility of built-in components with the Windows
operating system.
BUSINESS MODEL BUSINESS MODEL
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82%
24%
95%
(SRB )(SRB )
(B &H: Vitez, Sa.)(B &H: Vitez, Sa.)
(MNE)(MNE)
(MA K)
(C RO)
S erv i s
(SRB )
S erv i s
(SRB )
S erv i s
(B &H)
S erv i s
(B &H)
(C RO)(C RO)
(C RO)(C RO)
(C RO)
M SAN
(B &H)
KimTec
(B &H)
(C RO)(C RO)(C RO)
60%
Nekretnine
(B &H)
Nekretnine
(B &H)
(C RO)(C RO)
Zelena agenda
(C RO)
Zelena agenda
(C RO)
Nekretnine BG
(C RO)
Nekretnine BG
(C RO)
Nekretnine BG
(C RO)
IT&CE
DISTRIBUTION
IT&CE
DISTRIBUTION
IT&CE
DISTRIBUTION
ECOMMERCE
SERVICE
EE WASTE
DISPOSAL
AGRICULTURE
ICTICT
REAL ESTATEREAL ESTATE
IT&CE
DISTRIBUTION
IT&CE
DISTRIBUTION
ECOMMERCE
SERVICE
EE WASTE
DISPOSAL
AGRICULTURE
ICT
REAL ESTATE
(MA K)(MAK)(MA K)
OVERVIEW OF RELATED COMPANIES OF M SAN
GROUP
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M SAN Grupa d.o.o. is a leading distributor of IT products and consumer electronics with more than 60 most
prominent world manufacturers and more than 15,000 products.
Among them stand out: Microsoft, Hewlett Packard, Samsung, Acer, Asus, IBM, LG Electronics Inc, Panasonic,
Lenovo, Toshiba, Transcend, Western Digital...
M SAN Grupa has expanded its range with a full range of quality products from which every user, business
or home, can choose the product according to their wishes and possibilities.
The logistics of the M SAN Grupa are among the most developed in the region, thus ensuring a fast and
accurate delivery.
M SAN Grupa has more than 6,300 partners in and outside Croatia. The sales channels consist of department
stores, IT and CE retail stores and system integrators. Internal M SAN Grupa sales teams were established
in accordance with the sales channels and product groups. Through the “Enterprise” sales segment, the M
SAN Grupa offers high added value through the knowledge and complex partner solutions, such as system
integrators and similar solutions.
The substantial number of partners has enabled the Group to significantly diversify its business, thus the
largest unaffiliated customer makes up for 2.7% of the total annual turnover. The Group has made significant
investments into export sales channels towards third countries (countries where it does not have affiliated
companies) so the total export share toward third countries has risen from 15.3% in 2020 to 16.5% in 2021.
PORTFOLIO, SALES CHANNELS, PARTNERS
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HISTORICAL DEVELOPMENT OF THE GROUP
1995
Company M SAN d,o.o.
founded
1997
Company M SAN Group d.o.o. founded
to which the business of M SAN d.o.o.
was transferred
1999
Company KIM TEC d.o.o.
Vitez, BiH Founded
2006
Acquisition of business
shares in Pakom Company,
Macedonia
2005
Company
KIM-TEC CG d.o.o.
Podgorica, Montenegro
founded
2021
Issuing corporate bonds
Solmacht brand
2008
Acquisition of business shares in
companies, Elektromagic (HR and
BiH), Recos (BiH)
2009
Companies KIM-TEC
Service BG and KIM-TEC
Service Vitez founded
2013
KIM TEC Eko founded
MS brand registrated
2019
Registration of
MS ENERGY brand
2004
Company
KIM-TEC d.o.o. Belgrade,
Republic of Serbia
2004
Registration of Vivax
brand company
M SAN Service
Founded
HISTORICAL DEVELOPMENT
of the Group
By looking into its legal form, M SAN Grupa was registered as a joint-stock company until
28th April 2021.
By virtue of the decision of the extraordinary General Assembly of 28th April 2021, the joint-
stock company was transformed into a limited liability company. The sole owner of the
company is Mr. Stipo Matić who is also the Chairman of the General Assembly. The company
does not own its own shares and does not implement a programme of purchasing them.
The Supervisory Board is comprised of three members, and they are:
Stipo Matić, the Chairman of the Supervisory Board,
Marko Rašić, the Deputy Chairman of the Supervisory Board,
Snježana Matić, a Member of the Supervisory Board.
Members of the Management Board:
Miroslav Huzjak, Chairman of the Management Board,
Irena Langer-Breznik, Member of the Management Board,
Goran Kotlarević, Member of the Management Board,
Žarko Kruljac, Member of the Management Board,
Slaven Stipančić, Member of the Management Board.
The operative business of the Group is organised in four divisions:
• ITCE - distribution of IT equipment and consumer electronics;
• Enterprise – value-added distribution (Value-add distribution) for
adjusted hardware and software solutions;
• Vivax – the manufacture and distribution of own brand, numbering
over 250 items in all categories (TVs, air conditioners, mobile phones,
appliances, small household appliances).
• Green divison – electric mobility products, LED lighting, solar
panels.
The Company division leaders are also responsible for the divisions in regional members
that together make up for four sales channels with the sole motto being: “One company
on multiple diverse markets”.
ORGANISATIONAL STRUCTURE
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ORGANISATIONAL STRUCTURE
In the reporting period concluded on 31st December 2021, 451 employees contributed
to the core business of the parent company M SAN Grupa and affiliated companies
in the Republic of Croatia (M SAN Logistika, MR Servis, and M SAN EKO), while 374
employees contributed in the region (Serbia, Bosnia and Herzegovina, Montenegro, and
Macedonia). The work of a total of 825 employees at 31st December has contributed to
the growth and development of our companies in 2021.
Our main goals and ambitions are:
• to become the most successful ITCE distributor in the Adria region
• to develop our own brand with relevant presence on the EU market
• to achieve market leadership in the area of e-mobility
• to build a logistics infrastructure that reaches end consumers
• lean operations
Key operational indicators of the Group
• 6,300+ partners
• 200,000 products delivered monthly
• 700+ employees
• 5 own brands
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Like many other companies, our business was inevitably affected by the
global COVID-19 pandemic in 2021. The manner in which we, as a Group,
have reacted to newly arisen circumstances was a true test of readiness
for a situation of crisis. Everyday work routine of the employees changed
within 48 hours from the appearance of first information regarding the
pandemic, while the Group was left in a situation where it had to react
preventively to protect the safety of its employees and partners. Aware of
potential risks in which we found ourselves and which persist to this day,
as well as the responsible role that we play, our mandatory instructions
and recommendations were aimed at establishing measures to preserve
the health of our employees and their loved ones, as well as partners,
customers, and users and the reduction of the possibility to spread the
contagion but also the continuity of our own business. It was especially
important to us that our employees were informed in a targeted and timely
manner so they could do the right thing while there was an increased
risk of contagion. The employees were informed of the level of risk and
protection measures via e-mails, and they were also displayed in visible
locations inside the company. The mandatory instructions and displayed
recommendations concerned all of the employees or employees hired
in any way who live, work, or visit the business premises of the Group
in Croatia, Serbia, Bosnia and Herzegovina, Montenegro and Northern
Macedonia.
OUR RESPONSE TO
THE COVID-19
PANDEMIC
HOW THE PANDEMIC AFFECTED THE GROUP
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M SAN Grupa as a public interest entity whose corporate bonds are listed on the
Ofcial Market of the Zagreb Stock Exchange, in accordance with the Accounting
Act, Article 22 is required to include a statement on the application of the corporate
governance code in the annual report.
M SAN Grupa is not obliged to apply the Corporate Governance Code of the
Croatian Financial Services Supervisory Agency and the Zagreb Stock Exchange
d.d. (https://www.hanfa.hr/media/4098/zse_kodeks_hr.pdf), but the Group is
guided in its operations by the highest standards of governance and responsibility
in accordance with good corporate governance practice, and the standards
and practices themselves are included in the Statement of incorporation of the
Company, which is available on the Company’s website (https://www.msan.hr/
wp-content/uploads/2021/05/2021-04-21_M-SAN-Grupa_Izjava-o-osnivanju.
pdf).
The Company is also obliged to provide HANFA with data on corporate governance
practices through the Questionnaire on Management Practices for Bond Issuers
(GIKU-UOP-OBV).
M SAN Grupa is a signatory to the Code of Business Ethics, initiated by the Croatian
Chamber of Commerce. The Code establishes guidelines for the ethical conduct
of business entities, and the signatories, among other things, undertake to respect
human rights, apply provisions on the prevention of corruption, etc.
INTERNAL CONTROLS AND RISK MANAGEMENT IN RELATION TO THE FINANCIAL REPORTING
PROCESS
Internal accounting controls, ie the procedures of competent employees ensure
the accuracy, validity, comprehensiveness of nancial records and reports, which
are the basis for the preparation of annual nancial statements. This control
system also ensures their compliance with International Financial Reporting
Standards.
The Company’s accounting policies represent the rules that the Company applies
when preparing its nancial statements. A summary of signicant accounting
policies is disclosed in the Company’s nancial statements.
CORPORATE
Governance
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COMPANY’S BOARDS
The corporate governance structure of M SAN Grupa is based on a dualistic
system, consisting of the Supervisory Board and the Management Board,
they, together with the General Assembly, in accordance with the Articles
of Association and the Companies Act, represent the three basic bodies of
the Company.
The Supervisory Board has set up an Audit Committee, which in the course
of its tasks assesses the quality of the internal control and risk management
system in order to adequately identify the main risks to which the company
is exposed (including compliance risks).
DESCRIPTION OF DIVERSITY POLICY
Employment policy within the Group respects the personal integrity of each
individual by respecting the principles of diversity and equal opportunities.
Diversity is one of the features of our organizational culture, present since
the founding of the Company, and is reected in the belief that differences
in gender, skin color, political or other beliefs, national or social origin are a
wealth, which within M SAN for more than 20 years transformed into mutual
success.
The Group strictly prohibits and condemns all forms of discrimination
in order to provide and ensure a sustainable work environment free of
discrimination and abuse based on sex, race, religion, ethnicity, sexual
orientation or any other characteristic / status as grounds for discrimination.
The Group is committed to ensuring a non-discriminatory workplace and
we are proud of the absence of reported incidents.
CORPORATE
Governance
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GOVERNANCE
structure
The governance within M SAN is founded on transparency and effectiveness of corporate
governance based on the best international practices, thus ensuring the success and
sustainability of the entire Group. M SAN does business as a two-level board structure, consisting
of the Supervisory Board and the Management Board. Over the course of 2021, the Supervisory
Board consisted of three members, while the Management Board consisted of six members, i.e.,
the Chairman and five members of the Board.
The Supervisory Board and the Management Board ensure that the established strategy,
resources, risk management system, internal control system, and stakeholder relations support
the long-term and sustainable development of the entire Group. Furthermore, stated elements
ensure that the strategy takes into consideration the possible impact on the environment and
community, and that the politics, culture, and values of M SAN promote ethical behaviour, respect
for human rights, and lead to an enticing and comfortable work environment.
The role of the Management Board in managing the business is governed by the Companies
Act, the Statute, and internal rules. The Management Board exercises its function with the due
diligence of a circumspect trader, primarily taking into account the best interests of the Group.
In decision making, personal interests must not lead the Management Board, i.e., use business
opportunities for personal purposes and shall immediately notify the Supervisory Board of any
possible conflict of interests.
The Assembly of the Company is the highest governance body and consists of the member
of the Company as the sole founder. A member of the Association makes decisions for which
he is authorized by law and the Statement of incorporation of the Association. The Assembly
decides on matters that are within the exclusive competence of the Assembly under the current
Companies Act. If it deems that there is a need for that, the Assembly is authorized to send a
mandatory instruction to the Management Board regarding the management of the Company’s
affairs, and the Management Board is obliged to manage the Company’s affairs in accordance
with the mandatory instructions of the Assembly. The Assembly is convened by the Management
Board of the Company in cases prescribed by the Companies Act and whenever required by the
interests of the Company, but may also be convened by the Supervisory Board and a member of
the Company. The assembly is suitable for decision-making if the only member of the Company
is present.
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The Group is managed by the Management Board, consisting of:
MIROSLAV HUZJAK Over the past 23 years,
Miroslav Huzjak has worked on leading functions
within the M SAN Grupa and has led teams of
experts who have positioned the company as
the most significant ICT and CE distributor in
the Adria region. He has worked various jobs
in the company and had a leading role in the
commercial department which, in addition to
the responsibility for organising the commercial
department, its successful business, and
positioning M SAN as the market leader, also
included numerous other responsibilities.
Mr. Huzjak was responsible for leading key
negotiations to conclude a distribution contract
with the largest globally renowned principals,
which made it possible for M SAN to become an
authorised distributor of many a world-renowned
brand for the territory of the Republic of Croatia,
as well as the region. Establishing, organising,
and improving the business of logistics and
servicing, as well as establishing companies in
the region and the development, expansion, and
improvement of regional business all represent
the responsibility of Mr. Huzjak, who has held
the office of the Chairman of the Board of the
company since 2009.
MIROSLAV HUZJAK
CHAIRMAN OF THE BOARD
IRENA LANGER BREZNIK has held a series of
leading offices over the past 15 years in M
SAN Grupa. In her roles, that include a leading
role in the procurement department of M SAN
Grupa, besides the responsibility for the entire
procurement process in the Republic of Croatia
and in the region, obtaining new distributions,
nurturing quality relations with principals,
organising and conducting marketing activities
at the level of M SAN and the companies in the
region, she was responsible for establishing
new business processes, as well as improving
existing ones and has continuously worked on
structural enhancements to business processes
with a particular emphasis on regional
procurement, development, and improvement
of business on foreign markets of the members
of the Group, leading numerous projects aimed
at development and improvement of business
application, the development of electronic trade
between business subjects, and managing the
stocks and digital transformation. Since 2011,
Ms Langer Breznik has been at the head of the
e-commerce development and business of the
company eKupi in Croatia and in the region and
is also a member of the Management Board of
M SAN Grupa.
IRENA LANGER BREZNIK
VICE-CHAIRMAN OF THE BOARD
During his 16 years at M SAN Grupa, SLAVEN
STIPANČIĆ has focused himself on improving
the procurement process and expanding the
distribution portfolio. Mr. Stipančić has, while
leading a team of successful experts, provided
a large contribution and is responsible for the
development of own brand VIVAX, which has
enabled VIVAX to become a recognisable
brand that is sold on almost all of the European
markets, but also on other continents. As the
Director of the consumer electronics sector, he
works on contracting and developing distribution
collaboration with the strongest global CE-A
brands in Croatia and in the region. In parallel,
he is working on the optimisation of connecting
sales processes of international CE-A brands
with the company’s procurement processes.
Since 2009, Mr. Stipančić has held the office of
the member of the company’s Management
Board.
SLAVEN STIPANČIĆ
MEMBER OF THE BOARD
ŽARKO KRULJAC dedicated his first 14 years at
M SAN Grupa to the development of the sales
force and the distribution range of the Group.
At first, he stood out thanks to his successes in
business and the realisation of strategic goals
that he accomplished in leading roles in the
companies in the Republic of Serbia and Bosnia
and Herzegovina, after which, by managing
the commercial business in Croatia and the
region, he focused his work on three key aspects:
continued construction and strengthening
of the partner customer network, raising the
competences of sales operations, and adjusting
the sales processes to market changes. He
obtained a PhD in the field of economic sciences
in 2020. Since 2009, Mr. Kruljac has held the office
of the member of the company’s Management
Board.
ŽARKO KRULJAC
MEMBER OF THE BOARD
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 32 M SAN GROUP IN 2021 33
PAVO LEKO As the member of the Management
Board and the Director of Logistics Operations,
Mr. Leko is using his knowledge and expertise to
work on the expansion of logistics operations,
the optimisation of processes, and raising the
competencies of logistics employees in all
countries where M SAN Grupa has affiliates.
Over the past five years, thanks to Mr. Leko, the
company has expanded the logistics capacities
in Serbia and Bosnia and Herzegovina,
introduced new logistics lines and a system of
delivery within 24 hours, while also expanding its
vehicle fleet. Mr. Leko has held the office of the
member of the company’s Management Board
since 2017. On 31st January 2022 Mr. Leko resigned
as a member of the Management Board and
continued his career outside the Group.
GORAN KOTLAREVIĆ Strengthening sales
operations and expanding the distribution range
in all countries of the region represent the main
field of Mr. Kotlarević’s work. During his 16 years
of work in M SAN Grupa in roles of the Head of
Sales, the Director of Sales, and the Director
of Business Development, Mr. Kotlarević has
directly influenced the construction of a strong
market presence of the company and its today’s
visibility. Since March 2021, Mr. Kotlarević has
held the office of the member of the company’s
Management Board.
PAVO LEKO
MEMBER OF THE BOARD
GORAN KOTLAREVIĆ
MEMBER OF THE BOARD
STIPO MATIĆ founded M SAN in 1995 and is its
sole founder and member. In the period until
2009, Stipo Matić was the CEO of M SAN, after
which he assumed the office of the Chairman
of the M SAN Supervisory Board. Furthermore,
Stipo Matić is the CEO of the companies M SAN
Logistika d.o.o., M SAN Ulaganja d.o.o., and M SAN
EKO d.o.o., a member of the Management Board
in eKupi d.o.o., as well as the Chairman of the
Supervisory Board of the company KING ICT d.o.o.
Nowadays, the portfolio of companies owned
by him includes the companies KING ICT d.o.o.,
eKupi d.o.o., Ured za podršku d.o.o., CORVUS PAY
d.o.o., Agro invest Grupa d.o.o., as well as other
companies.
STIPO MATIĆ
THE CHAIRMAN OF THE SUPERVISORY BOARD
SNJEŽANA MATIĆ has participated in M SAN’s
business since the company was founded. In the
beginnings, she worked in sales and afterwards,
on procurement tasks with a particular focus
on building long-term sustainable business
relationships with suppliers. As a response to the
growth of M SAN’s business activities, she took
over the coordination of accounting and finance
activities, after which she dedicated her time to
the development of system integration business
since 2004, where she works today in the field
of controlling. She has been a member of the M
SAN Supervisory Board since 2004.
SNJEŽANA MATIĆ
A MEMBER OF THE SUPERVISORY BOARD
MARKO RAŠIĆ began his career at M SAN in
2003 as an apprentice in the Department of
Finances and has advanced to the function of
Head of Finance in 2011. During the acquisition
period of the Group in the agricultural sector, he
actively participates in takeover processes and
subsequent financial restructuring of acquired
agricultural companies. In M SAN’s Supervisory
Board, he has held the office of the Deputy
Chairman of the Supervisory Board since 2016. He
has been appointed as the CEO of the company
Ured za podršku d.o.o. in 2017.
MARKO RAŠIĆ
THE DEPUTY CHAIRMAN OF THE SUPERVISORY BOARD
Along with the Supervisory Board and the Management Board, the role of the Audit committee,
consisting of three members, Branislav Vrtačnik, Kristina Alebić, and Branka Gerić, is to provide support
to the Supervisory Board in performing its tasks and conducting other activities in accordance with
applicable laws and other provisions. The Audit committee represents an advisory board to the
Supervisory Board, without executive powers, i.e., acts as a specialised sub-board of the Supervisory
Board and its powers are derived from the Supervisory Board’s powers.
The M SAN Supervisory Board consists of three members:
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 34 M SAN GROUP IN 2021 35
OPERATIVE
Business
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 36 M SAN GROUP IN 2021 37
Distribution of IT
equipment and
consumer electronics
ITCE DIVISION
With its 111 employees, the Division does business
on the territories of the Republic of Croatia,
Serbia, Bosnia and Herzegovina, Macedonia, and
Montenegro.
It encompasses the categories of 19 strategic
product groups that are related to A brands of
global manufacturers within the M SAN Grupa’s
product portfolio. The IT part covers strategic
product groups that cover desktop and laptop
computers and include computer components
and accessories that are closely related to the
computer itself. The most important strategic
groups in the IT part are laptop and desktop
computers, components that are part of the
computer, peripherals, information storage,
consumables, printers, network equipment,
monitors, and gaming range, while the CE range
covers strategic groups of appliances, TVs, air
conditioners, drones, new technologies, small
household appliances, mobile phones, and
consumer electronics.
The primary goal of the business sector of the ITCE
Division is the distribution of all of the suppliers’
strategic groups that are part of the division
portfolio to all territories that it does business
on. The total number of customers has risen on
all markets by 4% in the ITCE business sector in
all distribution channels, when compared to the
previous year.
The ITCE business sector has noted a total revenue
of 1,420 million HRK in 2021, which represents
a small reduction of the result achieved in
the previous year (-0.5%). When compared to
the previous year, a growth was noted on the
markets of Serbia (15.4%), Macedonia (28.2%),
and Montenegro (13.8%).
The geographical structure of revenue still shows
no significant changes, with the Croatian market
continuing to dominate with its value share of
53.2% in total revenue, followed by the markets of
Serbia with 26.6
%, Bosnia and Herzegovina with 11.4%, Macedonia
with 5.1%, and Montenegro with 3.5%.
At the same time, the strategic group of gaming
has achieved the largest growth when compared
to the previous year, in the amount of 31.5%, which
is an indicator that the global gaming market
is developing strongly and taking an ever more
significant influence in the revenue of strategic
groups. Through the growth of revenue, the share
of gaming in the total portfolio of the ITCE Division
has also increased from 7.9% to 10.4%.
The key factors that have impacted sales results
in 2021 are the continuation of the COVID-19
pandemic and continued challenges in the
supply chain. The lack of certain components
in manufacturing processes of our suppliers
and restrictions related to the pandemic have
affected the discontinuous supply chain of goods.
The supply chain itself and the lack of certain
components has caused goods shortages for
certain strategic groups, particularly in the part of
working from home, where there was an increased
demand for laptop and desktop computers,
monitors, and printers.
ITCE DIVISION
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 38 M SAN GROUP IN 2021 39
Simply good
Manufacture and
distribution of own brand
VIVAX
VIVAX
The VIVAX Division covers the business of our own
brand VIVAX in the consumer electronics sector.
The range is made up from products sorted in four
primary strategic groups: TVs, appliances, small
household appliances, and air conditioners, as
well as secondary: consumer electronics, tablet
devices, telephones, and gadgets.
In the first half of 2021, we invested funds into
researching the markets of Croatia and Serbia
that resulted in the current perception of the VIVAX
brand by end users. The research was conducted
in collaboration with an external agency and a
new brand strategy was based on them.
In accordance with the brand strategy, VIVAX has
an extremely strong “initial position” and in order
to raise the business to the next level, focused,
continuous, and consistent investments in
marketing and building the brand are necessary.
Therefore, in the fourth quarter of 2021, we initiated
brand campaigns with the aim of building the
trust of end users.
In 2021, the VIVAX Division has generated a
revenue of 488 million HRK, which represents
a growth of 15.1% when compared to 2020. The
share of primary strategic groups in total revenue
of VIVAX in 2021 amounted to 92.4%.
The market share has changed in such a manner
that the dependence on the domicile Croatian
market has reduced from 31.8% to 27.6%, while the
regional market share has increased from 48.7%
to 49.8% and the export from 19.6% to 22.6%, which
is in line with the business development and
export strengthening strategy in the region.
The revenue growth was achieved in primary
strategic groups: air conditioners 36.7%, small
household appliances 36.8%, and appliances
69.2%, while the strategic group of TVs noted a
drop in revenue in the amount of 6.1%. The main
reason of the drop in revenue of the TV strategic
group was a result of the significant price increase
of LED screens (the purchase price increased by
more than 60%), which has had the most impact
on the revenue from the Croatian and Serbian
markets.
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 40 M SAN GROUP IN 2021 41
GREEN DIVISION
GREEN DIVISION
The focus on sustainable business and the
Group’s desire to incorporate green technologies
into the business model have been set in previous
business periods. Noticing the business and
environmental advantages of modern lighting
technologies in the past five years, we have,
through significant investments, transferred to LED
lighting complete storage and production facilities
in Rugvica near Zagreb and administrative
facilities in Buzin, and we have launched similar
investments in all our companies in the region.
Recognizing the trends that green technologies
bring to everyday life and business, such as the
use of solar technology in electricity generation,
efficiency of LED lighting and new ways of daily
switching and use of free time brought by e-Mobility,
we decided at the end of the business year.
divisions to single out our own brand of e-Mobility
MS Energy, and complete the business of the new
division through the distribution of equipment for
the construction and design of solar power plants
and the production and distribution of LED lighting.
Accordingly, the Green Division covers
the business of three key verticals:
• e-Mobility through the framework of
further development of its own brand
MS Energy - production and sale of
eRomobiles, eBicycles and eMotorcycles
• Solar power plants and green energy -
distribution of solar equipment, design and
construction of solar power plants and production
and distribution of car chargers and batteries
• Professional LED lighting - production and
distribution of professional LED lighting for the
needs of local communities, infrastructure facilities
and commercial facilities such as street lighting,
industrial plants, farms, sports facilities and the like.
At the beginning of 2022, in the part of e-Mobility,
in our area in Rugvica, we established our own
plant for assembling electric bicycles with the
aim of expanding the capacity for the production
of electric scooters and in the foreseeable future
to other light electric vehicles. At the end of the
investment cycle, the planned annual capacity of
the new plant will be 50,000 eBicycles or eRomobiles.
In the distribution of solar equipment, we have
established direct cooperation with renowned
manufacturers of solar panels Longi, Jinko,
Yingli, in the range of inverters with brands such
as Sungrow, SMA, Huawei, Fronius, Fimer and
in the charger segment with manufacturers:
Wallbox, Fimer, SMA and Circontrol.
In the part of production and distribution of LED
lighting, towards the end of 2021, the process of
establishing production within the M SAN Group
was started.
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 42 M SAN GROUP IN 2021 43
Value added IT
distribution
ENTERPRISE
(VALUE ADDED DISTRIBUTION)
ENTERPRISE
The Enterprise Division is value-added IT distribution (VAD distribution) organised in several
departments: InfGROWTHructure Department, Software and Cloud Department, Special Projects
Department, and Sales Department, in order to provide competitive goods and services to ICT business
partners.
This business segment deals in distribution of products and services with a larger share of added
value.
• doing business with more demanding product portfolio - servers, information storages,
networks, software, solutions, video surveillance, industrial specialised products, cloud
computing (cloud)
• doing business with more demanding customers - system integrators (SI), software
developers (ISV), service providers (MSP) - demanding a higher level of knowledge and
complex skills, as well as expert specialisation of employees
• doing business with more demanding suppliers - complex and dynamic, technological,
technical, and operative processes, as well as extreme range and depth of technologies and
product specialisations.
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 44 M SAN GROUP IN 2021 45
Despite complex market circumstances caused by unprecedented unforeseen
circumstances - COVID-19, in 2021, the Enterprise Division has generated a consolidated
revenue of 448.7 million HRK, which is a growth of 5.9% on an annual basis and the
growth of gross margin by 13%, representing the best result of the division ever.
The software segment has generated a consolidated revenue growth of 2.2%, the
infrastructure segment (hardware) a growth of 5%, while the cloud segment generated a
growth of 50%. Individually, all of the markets also generated a revenue growth, with the
exception being Bosnia and Herzegovina that had a significant drop in the infrastructure
segment due to external, but also complex internal factors in the country, such as the
technical budget and suspended and limited projects of large users in the public sector.
Furthermore, the Enterprise Division has continued its investment cycle and increased
the number of its specialists. Investments in the technological eCommerce and modern
marketing platforms have also continued, such as the Cloud (as shown by the growth
of the segment), while trainings, conferences, workshops, certifications, and all other
necessary activities that were suspended due to COVID-19 were successfully substituted
by modern online tools and platforms.
As part of the continuous research and analysis of market trends, Enterprise has won
international competitions in 2021 and expanded its offer with new world-renowned ICT
manufacturers in the rapid-growing domain of cybersecurity solutions and now distributes
Sophos, Acronis, and Immuniweb products to its partner channel in the entire region.
ENTERPRISE
ENTERPRISE
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 46 M SAN GROUP IN 2021 47
SALES REVENUES BY STRATEGIC GROUPS IN 2021
37% Other strategic groups
5% Desktop
Computers
4% Supplies
4% Software
4% Components
15% Notebook
10% Tv
8% Air Conditioning
6% Servers
6% Gaming
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 48 M SAN GROUP IN 2021 49
%TT
SHARES IN REVENUES FROM THE SALE OF BRANDS
IN 2021
33% Others
6% HP Enterprise
3% IBM
3% ASUS
3% LG
2% Microsoft
18% Vivax
16% HP Inc
9% Samsung
7% Lenovo
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 50 M SAN GROUP IN 2021 51
SALES REVENUES BY MARKETS IN 2021
7% Other
1% Netherlands
1% Poland
1% Germany
2% Slovenia
4% Montenegro
21% Serbia
9% Bosnia and Herzegovina
5% North Macedonia
49 % Croatia
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 52 M SAN GROUP IN 2021 53
(In thousands of HRK) 2020. 2021. 2021./2020.
Business revenue* 2,653,590 2,710,063 2.1%
EBITDA* 47,633 85,948 80.4%
EBITDA Normalised* 64,413 86,392 34.1%
EBIT* 36,205 73,398 102.7%
EBIT Normalised* 52,985 73,842 39.4%
Profit for the year* 21,135 46,691 120.9%
Profit for the year Normalised* 37,915 47,135 24.3%
TABLE 1.
Prot and loss account
for 2021
(In thousands of HRK) 31.12.2020. 31.12.2021.
Net debt* 73,696 178,826
Total assets 914,861 1,109,771
Total capital and reserves 331,460 379,444
Current assets and short-term
liabilities relation*
1.4 1.5
Net working capital (given)* 14.9 30.1
Capital share in total equity
and liabilities*
36.2% 34.2%
Net debt / Normalised EBITDA* 1.1 2.1
*In its Annual Report, the Group used financial measures of historic financial
performance, financial position, or cash flows that were not defined or determined
within the relevant financial reporting framework.
The above-mentioned indicators are derived from (or based on) financial reports
prepared in accordance with the relevant framework for financial reporting and have
been obtained by adding or subtracting amounts from numerical values presented in
financial reports, i.e., by placing numerical values in ratios.
TABLE 2.
Financial indicators
in 2021
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 54 M SAN GROUP IN 2021 55
Calculation
Business revenue Sales revenues plus other income
Business expenditures
Subtotal for items cost of goods sold, (decrease) / increase of
the value of work in progress stocks and finished products, raw
material and material costs, cost of services, personnel costs,
depreciation and amortisation, other costs, value adjustments,
risk provisions, and other business costs
EBITDA
Total business revenue minus total business expenditures plus
depreciation and amortisation costs
EBITDA margin EBITDA divided by total business revenue
EBIT
Operating profit, i.e., total business revenue minus total business
expenditures
EBIT margin EBIT divided by total business revenue
Profit for the year Profit for the year is the sum of profit before tax decreased by
income tax
Net debt
It means long-term and current liabilities towards banks and
other financial institutions increased for bond liabilities minus
cash and cash equivalents.
TABLE 3.
Alternative performance
measure
The above-mentioned measures are not financial performance measures in accordance
with the International Financial Reporting Standnards and should not be considered as
alternatives to other operational impact indicators, cash flows, or any other performance
measures derived in accordance with the above-mentioned standards.
The above-mentioned measures have been presented in order to provide useful
information on the financial state and business results of the Group, namely, for the
following reasons:
• they are measures that the Group uses to assess operational
performance.
• they are measures that the managing bodies of the Group use
to make everyday business decisions.
Net debt / Normalised EBITDA Net debt divided by normalised EBITDA
Net working capital (days)
Sum of inventory turnover days increased by receivables
collection days less supplier payment days
Net profit margin
Net profit margin is defined as the profit for the year divided by
the business revenues
Normalisation or normalised
Normalization refers to the adjustment of alternative
performance measures (APM), and includes their adjustment
for one-off transactions of the Group, in order to clearly present
the results that come from usual operations. During the
normalization of the APM, the amounts were increased by the
recognized impairments, and decreased by the realized gains
from the sale of fixed assets.
Current assets and short-term
liabilities relation
Value of Current assets divided by current liabilities
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 56 M SAN GROUP IN 2021 57
Business Risks
CAPITAL RISK.
The Group manages its capital in order to ensure that the entities
within the Group have an unlimited amount of time to continue the
business, while, at the same time, realising the maximum possible
return for stakeholders through the optimisation of the status
between equity and debt.
CURRENCY RISK.
The Group and the company execute certain transaction in
foreign currencies and are, therefore, exposed to risks arising out of
changes in the currency exchange rates.
CREDIT RISK.
The credit risk means the risk from non-payments, i.e., defaults on
contractual obligations by the Group and company’s customers
that impacts the possible nancial loss of the Group and company.
The Group and company have adopted procedures that they
apply in doing business with the customers and collect payment
collaterals wherever possible for the purpose of protecting
from possible nancial risks and losses resulting from defaults of
payments and contractual obligations.
INTEREST RATE RISK.
In July 2021, the Group issued a corporate bond with a xed interest
rate that is related to the majority of the Group’s nancial debt.
Due to the fact that the company and the Group use loans with
xed and oating interest rates, they are exposed to the risk posed
by the change in interest rates. Most of the company and Group’s
loans have been agreed on with a xed interest rate.
LIQUIDITY RISK.
The ultimate responsibility for managing credit risk lies with the
Management Board that has set a quality framework for the
management of liquidity risk of short, medium, and long positions
of the group and dened the requests related to liquidity
management.
MARKET RISK.
The market risk means the risk that the changes to market prices,
currency exchange rates, and interest rates impact the revenues,
investment value, or nancial instruments of the company and
the Group. The goal of market risk management is to control the
exposure to the market risk within acceptable values, while, at the
same time, optimising the results.
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 58 M SAN GROUP IN 2021 59
Plans and Expectations of the
Management for 2022
The company is expected to further grow the business on the domestic and foreign markets in 2022.
Investments into digitalisation that are partially financed by the EU shall contribute to investments into
IT equipment and infGROWTHructure. A large part of these products is placed on the market through
distribution channels in which M SAN Grupa has a significant market share.
At the end of 2021, a new Green division was founded for the development and sale of solutions
for the use of solar energy, the production, and solutions for the use of LED lighting, and the further
development of e-mobility. Special attention shall be given to further development of environment
protection policies through the use of renewable energy sources and waste disposal.
The Group shall continue to invest in the business development, particularly its own brand, logistics,
and solutions for quality business monitoring and planning. Apart from the orientation towards
organic growth, the Group shall continue to monitor market developments and, in accordance with
identified opportunities, participate in acquisitions that it estimates could contribute to the business
development.
In addition, it is extremely important to foresee possible business risks and quickly adapt the business
to market changes. Issues with production and supply of goods, as well as the supply chains affected
by the pandemic are still expected. The contracts with multiple leading manufacturers for essential
groups of products and ensuring sufficient quantities of components for own brands in a timely
manner guarantee the continued delivery to our partners.
Therefore, despite all challenges, we are optimistic about the business development in 2022 and have
reasons to expect that we shall achieve set goals and ensure further growth and development of M
SAN Grupa.
Pursuant to the Accounting Act of the Republic of Croatia, the Management is responsible for
ensuring that consolidated and separate financial statements are prepared for each financial year in
accordance with International Financial Reporting Standards (‘IFRS EU’), as adopted by the European
Union, which provide a true and fair view of the financial position and results of operations of M San
Grupa d.d., Zagreb (“the Company”) and its subsidiaries (“the Group”) for that period.
After making appropriate enquiries, the Management has a reasonable expectation that the Company
and the Group have adequate resources to continue in operational existence for the foreseeable
future. For this reason, the Management continues to prepare the financial statements on a going-
concern basis.
In preparing consolidated and separate financial statements, the responsibilities of the Management
Board include ensuring that:
• suitable accounting policies are selected and then applied consistently;
• judgments and estimates are reasonable and prudent;
• applicable accounting standards are followed; and:
• financial statements are prepared under the going-concern assumption.
The Management is responsible for keeping proper accounting records, which disclose with reasonable
accuracy at any time, the financial position of the Company and the Group and must also ensure that
the financial statements comply with the Croatian Accounting Act. The Management is also responsible
for safeguarding the assets of the Company and of the Group and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
The Management Board of the Company approved the consolidated and separate financial statements
at the meeting held on April 25 2022.
M San Grupa d.o.o.
Buzinski prilaz 10
10000 Zagreb
Republic of Croatia
29 April 2022
Responsibility for consolidated
and separate nancial
statements
Miroslav Huzjak
President of the
Management Board
Irena Langer-Breznik
Member of the
Management Board
Goran Kotlarević
Member of the
Management Board
Žarko Kruljac
Member of the
Management Board
Slaven Stipančić
Member of the
Management Board
A member firm of Ernst & Young Global Limited
Mjerodavan sud: Trgovački sud u Zagrebu; Temeljni kapital: 20.000,00 kuna, uplaćen u cijelosti;
Članovi Uprave: Berislav Horvat, Ivana Krajinović, Zvonimir Madunić
Applicable court: Commercial court in Zagreb; Registered share capital is 20.000,00 HRK, fully paid;
Members of the Board: Berislav Horvat, Ivana Krajinović, Zvonimir Madunić
Ernst & Young d.o.o.
Radnička cesta 50, 10 000 Zagreb
Hrvatska / Croatia
MBS: 080435407
OIB: 58960122779
PDV br. / VAT no.: HR58960122779
Tel: +385 1 5800 800
Fax: +385 1 5800 888
www.ey.com/hr
Banka / Bank:
Erste & Steiermärkische Bank d.d.
Jadranski trg 3A, 51000 Rijeka
Hrvatska / Croatia
IBAN: HR3324020061100280716
SWIFT: ESBCHR22
I
ndependent auditor’s report
To the owner of M SAN GRUPA d.o.o.
Report on the audit of the separate and consolidated financial statements
Opinion
We have audited the separate financial statements of M SAN GRUPA d.o.o. (the Company), and consolidated financial statements of M SAN GRUPA d.o.o. and its
subsidiaries (together- the Group), which comprise the separate and consolidated statement of financial position as at 31 December 2021, the separate and consolidated
statement of comprehensive income, the separate and consolidated statement of changes in equity and the separate and consolidated statement of cash flows for the
year then ended, and notes to the separate and consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying separate and consolidated financial statements give a true and fair view of the separate and consolidated financial position of the
Company and the Group as at 31 December 2021 and of their separate and consolidated financial performance and their separate and consolidated cash flows for the year
then ended in accordance with International Financial Reporting Standards as adopted by the EU (IFRS as adopted by the EU).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the separate and consolidated financial statements section of our report.
We are independent of the Company and the Group in accordance with the International Ethics Standards Board of Accountants’ (IESBA) International Code of Ethics for
Professional Accountants, including International Independence Standards (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the IESBA Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the separate and consolidated financial statements of
the current period. These matters were addressed in the context of our audit of the separate and consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that
context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the separate and consolidated financial statements section of our report,
including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material
misstatement of the separate and consolidated financial statements. The results of our audit procedures, including the procedures performed to address the matters
below, provide the basis for our audit opinion on the accompanying separate and consolidated financial statements.
A member firm of Ernst & Young Global Limited
Mjerodavan sud: Trgovački sud u Zagrebu; Temeljni kapital: 20.000,00 kuna, uplaćen u cijelosti;
Članovi Uprave: Berislav Horvat, Ivana Krajinović, Zvonimir Madunić
Applicable court: Commercial court in Zagreb; Registered share capital is 20.000,00 HRK, fully paid;
Members of the Board: Berislav Horvat, Ivana Krajinović, Zvonimir Madunić
K
ey audit matter How we addressed key audit matter
Recognition of revenue: occurrence and presentation of
customers discounts and rebates
See Note 5 Sales Income
The Company and Group recognizes sales net of volume rebates,
trade discounts, returns, and various promotional and marketing
activities that are integral part of contracts with customers.
Revenue occurrence and presentation therefore involves
estimates related to such agreements or actions.
At the reporting date, amounts of discounts, incentives and
rebates that have been incurred and not yet paid by the
customers are estimated and accrued. Due to the variety of
contractual terms across the markets and existence of various side
agreements, management is required to monitor a large number
of individual customer arrangements in order to estimate the
discounts, incentives and rebates amounts at the reporting date.
This is considered complex and includes risk of incorrect inclusion
or non-inclusion of discounts, incentives and rebates in the
current period and year-end accruals, or incorrect calculation of
these amounts recorded as at the reporting date.
Due to the above mentioned, occurrence and presentation of
these costs is considered a key audit matter.
Our audit procedures included understanding of the revenue recognition process including
discounts and rebates recognition and assessing compliance with the policies in terms of
applicable accounting standards. We walked through and tested the operation effectiveness of
the controls over revenue recognition process.
Based on a sample, we assessed revenue transactions, taking place at either side of the balance
sheet date as well as credit notes issued after the reporting date to evaluate whether that revenue
was recognized in the correct period.
We also developed an expectation of the current year sales revenue balance considering historical
revenue and discounts and rebates information, compared it to the actual sales revenues and
examined unexpected differences.
On a sample of key customers, we inspected respective contractual terms and recalculated the
amounts of discounts and rebates. Where our recalculation based on contractual terms differed
from management records, we obtained support for the differences to vouch their validity.
We obtained customer confirmations of amounts outstanding at the reporting date for a sample
of customers and gained understanding of any significant differences between customer
confirmations received and the Company’s accounting records.
We also assessed on the adequacy of the relevant disclosures in the separate and consolidated
financial statements and if these are in line with the requirements of the IFRS as adopted by the
EU.
A member firm of Ernst & Young Global Limited
Mjerodavan sud: Trgovački sud u Zagrebu; Temeljni kapital: 20.000,00 kuna, uplaćen u cijelosti;
Članovi Uprave: Berislav Horvat, Ivana Krajinović, Zvonimir Madunić
Applicable court: Commercial court in Zagreb; Registered share capital is 20.000,00 HRK, fully paid;
Members of the Board: Berislav Horvat, Ivana Krajinović, Zvonimir Madunić
Ke
y audit matter How we addressed key audit matter
Assessment of impairment of investments in subsidiaries
and associates
See Note 21 Financial assets
The Company has investments in subsidiaries and associates
with carrying amount totaling HRK 170,676 thousand as
of 31 December 2021.
The carrying amount of the investments in subsidiaries and
associates represents 23% of total assets in separate financial
statements and the assessment of the impairment indicators
represents significant area of management’s judgment,
regarding but not limited to, market values, future plans,
changes in the economic environment and interest rate
changes.
Due to the range of judgements and assumptions used in the
models and impairment assessments, as well as the significant
carrying amount of the investments, this is an area considered to
be a key audit matter.
Audit procedures included understanding of the investment’s impairment assessment process.
We performed inquiry of management and examined the methodology used by management to
assess the carrying value of respective investments to evaluate its compliance with IFRS as
adopted by the EU and consistency of application.
We evaluated management assessment of indicators of potential impairments and where
indicators exist, we performed the procedures listed below.
We evaluated the entity’s future cash flow forecasts and the process by which they were
prepared. We also compared the budget inputs in the models to the approved budgets and
forecast inputs in the models to the management plans.
We compared the current year (2021) actual results with the figures included in the prior year
(2020) forecasts to evaluate assumptions used. We also compared management’s key
assumptions for long-term growth rate by comparing it to historical growth results and market
data.
We performed audit procedures on the mathematical integrity of the impairment models,
sensitivity analysis and tested the appropriateness of discount rates used in the calculation with
the assistance of the valuation specialists.
We also assessed adequacy of the disclosures in the separate financial statements and if these are
in line with the requirements of IFRS as adopted by the EU.
A member firm of Ernst & Young Global Limited
Mjerodavan sud: Trgovački sud u Zagrebu; Temeljni kapital: 20.000,00 kuna, uplaćen u cijelosti;
Članovi Uprave: Berislav Horvat, Ivana Krajinović, Zvonimir Madunić
Applicable court: Commercial court in Zagreb; Registered share capital is 20.000,00 HRK, fully paid;
Members of the Board: Berislav Horvat, Ivana Krajinović, Zvonimir Madunić
Ke
y audit matter How we addressed key audit matter
Assessment of impairment of goodwill
See Note 19 Goodwill
The Group has goodwill with carrying amount totaling HRK
44,441 thousand as of 31 December 2021.
The carrying amount of the goodwill represents 4% of total
consolidated assets and the assessment of the “fair value” and
“value in use” of the Group’s cash generating units (“CGU”)
represents significant area of management’s judgement
regarding the future results of the business and the discount rates
applied to future cash flow forecasts.
Due to the range of judgements and assumptions used in the
models and impairment assessments, as well as the significant
carrying amount of the goodwill, this is an area considered to be
a key audit matter.
Audit procedures included understanding of the goodwill impairment assessment process. We
performed inquiry of management and examined the methodology used by management to
assess the carrying value of respective goodwill, to evaluate their compliance with IFRS as
adopted by the EU and consistency of application.
We evaluated the Group’s future cash flow forecasts and the process by which they were
prepared. We compared the budget inputs in the model to the approved budgets and forecast
inputs in the model to management plans.
We compared the current year (2021) actual results with the figures included in the prior year
(2020) forecast to evaluate assumptions used. We also evaluated management’s key
assumptions for long-term growth rate by comparing it to historical growth results.
We performed audit procedures on the mathematical integrity of the impairment models and
sensitivity analysis and tested the appropriateness of discount rates used in the calculation with
the assistance of the valuation specialists.
We also assessed adequacy of the disclosures in the consolidated financial statements and if these
are in line with the requirements of IFRS as adopted by the EU.
Ot
her information included in the Company’s and the Group’s Annual Report for year 2021
Management is responsible for the other information. Other information consists of the information included in the Annual Report which includes the Management report
and Corporate Governance Statement, other than the separate and consolidated financial statements and our auditor’s report thereon. Our opinion on the separate and
consolidated financial statements does not cover the Other information including the Management report and Corporate Governance Statement.
In connection with our audit of the separate and consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the separate and consolidated financial statements or our knowledge obtained in the audit or otherwise appears to
be materially misstated.
With respect to the Management Report and Corporate Governance Statement, we also performed procedures required by the Accounting Act. Those procedures include
considering whether the Management Report includes the disclosures required by Article 21 of the Accounting Act, and whether the Corporate Governance Statement
includes the information specified in Article 22 of the Accounting Act.
A member firm of Ernst & Young Global Limited
Mjerodavan sud: Trgovački sud u Zagrebu; Temeljni kapital: 20.000,00 kuna, uplaćen u cijelosti;
Članovi Uprave: Berislav Horvat, Ivana Krajinović, Zvonimir Madunić
Applicable court: Commercial court in Zagreb; Registered share capital is 20.000,00 HRK, fully paid;
Members of the Board: Berislav Horvat, Ivana Krajinović, Zvonimir Madunić
Based
on the procedures undertaken, to the extent we are able to assess it, we report that:
1. t
he information given in the enclosed Management report for the 2021 financial year are consistent, in all material respects, with the enclosed separate and
consolidated financial statements;
2. the enclosed Management report for 2021 financial year is prepared in accordance with requirements of Article 21 of the Accounting Act;
3.
C
orporate Governance Statement, included in the Company’s and the Group's annual report, includes the information referred to in Article 22., paragraph 1., items
2, 5, 6 and 7 of the Accounting Act; and
4. elements of Corporate Governance Statement containing the information referred to in Article 22, paragraph 1, items 3 and 4 of the Accounting Act, included in the
Group's and the Company’s annual report are prepared in accordance with requirements of the Accounting Act and are consistent, in all material respects, with the
enclosed separate and consolidated financial statements;
In addition, in the light of the knowledge and understanding of the entity and Group and its environment obtained in the course of the audit, we are also required to
report if we have identified material misstatements in the Management Report, Corporate Governance Statement and Annual report. We have nothing to report in this
respect.
Responsibilities of management and Audit Committee for the separate and consolidated financial statements
Management is responsible for the preparation and fair presentation of the separate and consolidated financial statements in accordance with IFRS as adopted by the EU,
and for such internal control as management determines is necessary to enable the preparation of separate and consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the separate and consolidated financial statements, management is responsible for assessing the Company’s and the Group’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the
Company and the Group or to cease operations, or has no realistic alternative but to do so.
Audit Committee is responsible for overseeing the Company’s and the Group’s financial reporting process.
Auditor’s responsibilities for the audit of the separate and consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the separate and consolidated financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an
audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these separate and consolidated
financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the separate and consolidated financial statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or
the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company’s and Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
A member firm of Ernst & Young Global Limited
Mjerodavan sud: Trgovački sud u Zagrebu; Temeljni kapital: 20.000,00 kuna, uplaćen u cijelosti;
Članovi Uprave: Berislav Horvat, Ivana Krajinović, Zvonimir Madunić
Applicable court: Commercial court in Zagreb; Registered share capital is 20.000,00 HRK, fully paid;
Members of the Board: Berislav Horvat, Ivana Krajinović, Zvonimir Madunić
•
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on the Company’s and Group’s ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the separate and consolidated financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Company and the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the separate and consolidated financial statements, including the disclosures, and whether the separate
and consolidated financial statements represent the underlying transactions and events in a manner that achieves 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 the
consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.
We communicate with Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards
applied.
From the matters communicated with Audit Committee, we determine those matters that were of most significance in the audit of the separate and consolidated financial
statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
In compliance with Article 10(2) of Regulation (EU) No. 537/2014 of the European Parliament and the Council, we provide the following information in our independent
auditor’s report, which is required in addition to the requirements of ISAs:
Appointment of Auditor and Period of Engagement
We were initially appointed as auditors of the Company on 16 September 2020. Our appointment has been renewed annually by shareholder resolution, with the most
recent reappointment on 25 August 2021, representing a total period of uninterrupted engagement appointment of 2 years.
Consistence with Additional Report to Audit Committee
We confirm that our audit opinion on the separate and consolidated financial statements expressed herein is consistent with the additional report to the Audit Committee
of the Company, which we issued on 25 April 2022 in accordance with Article 11 of Regulation (EU) No. 537/2014 of the European Parliament and the Council.
Provision of Non-audit Services
We declare that no prohibited non-audit services referred to in Article 5(1) of Regulation (EU) No. 537/2014 of the European Parliament and the Council were provided by
us to the Company and its controlled undertakings within the European Union. In addition, there are no other non-audit services which were provided by us to the Company
and its controlled undertakings and which have not been disclosed in the separate and consolidated financial statements.
Report based on Delegated Regulation (EU) 2018/815 on supplementing Directive 2004/109/EZ of European parliament and Council related to regulatory
technical standard for specification of single electronic reporting format of reporting
Independent report on the compliance of annual separate and consolidated financial statements (further: financial statements) prepared pursuant to Article 462 (5) of the
Capital Market Act (Official Gazette 65/18, 17/20 and 83/21) applying the requirements of the Delegated Regulation (EU) 2018 / 815 on establishing of single electronic
reporting format for issuers (hereinafter: the ESEF Regulation).
A member firm of Ernst & Young Global Limited
Mjerodavan sud: Trgovački sud u Zagrebu; Temeljni kapital: 20.000,00 kuna, uplaćen u cijelosti;
Članovi Uprave: Berislav Horvat, Ivana Krajinović, Zvonimir Madunić
Applicable court: Commercial court in Zagreb; Registered share capital is 20.000,00 HRK, fully paid;
Members of the Board: Berislav Horvat, Ivana Krajinović, Zvonimir Madunić
We h
ave conducted a reasonable assurance engagement on whether the financial statements, as contained in the attached electronic file [FILE NAME], are prepared, for
the purposes of public disclosure pursuant to Article 462, paragraph 5 of the Capital Market Act, in all material respects in accordance with the requirements of the ESEF
Regulation.
Responsibilities of the Management and those charged with governance
Management is responsible for the preparation of the financial statements in accordance with ESEF Regulation.
Furthermore, Management is responsible for maintaining an internal control system that reasonably ensures the preparation of financial statements without material
non-compliances with ESEF Regulation requirements, whether due to fraud or error.
The Management is also responsible for:
• the public disclosure of financial statements in ESEF format
• selecting and using XBLR codes in accordance with ESEF regulation
Those charged with governance are responsible for overseeing the preparation of the financial statements in ESEF format as part of the financial reporting process.
Auditor's responsibilities
Our responsibility is to express a conclusion, based on the audit evidence gathered, as to whether the financial statements are free from material non-compliances with
the requirements of the ESEF Regulation. We conducted our reasonable assurance engagement in accordance with International Standard for Assurance Engagements
ISAE 3000 (revised)- Assurance engagements other than audits or reviews of historical financial information.
Work performed
The nature, timing and extent of the procedures selected depend on the auditor's judgment. Reasonable assurance is a high degree of assurance however it does not
guarantee that the scope of procedures will identify all significant (material) non-compliance with ESEF regulation.
In respect of the subject matter, we have performed the following procedures:
• we read the requirements of the ESEF Regulation,
• we have gained an understanding of the Company'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 error; and
• Based on this, devise and implement procedures to respond to the assessed risks and to obtain 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 annual report, are prepared in the relevant XHTML format,
• the information contained in the financial statements required by the ESEF Regulation is marked and all markings meet the following requirements:
o the XBRL markup language was used,
o the basic taxonomy elements listed in the ESEF Regulation with the closest accounting significance have been used, unless an additional
taxonomy element has been created in accordance with Annex IV. ESEF Regulation,
o the labeled elements comply with the common labeling rules under the ESEF Regulation.
We believe that the audit evidence obtained is sufficient and appropriate to provide a basis for our conclusion.
Conclusion
Based on the procedures performed and evidence gathered, the financial statements presented in ESEF format for the year ended on 31 December 2021, contained in the
aforementioned attached electronic file and prepared pursuant to Article 462 paragraph 5 of the Capital Market Act prepared for public disclosure, are prepared in all
material respects in line with the requirements of Articles 3, 4 and 6 of the ESEF Regulation.
A member firm of Ernst & Young Global Limited
Mjerodavan sud: Trgovački sud u Zagrebu; Temeljni kapital: 20.000,00 kuna, uplaćen u cijelosti;
Članovi Uprave: Berislav Horvat, Ivana Krajinović, Zvonimir Madunić
Applicable court: Commercial court in Zagreb; Registered share capital is 20.000,00 HRK, fully paid;
Members of the Board: Berislav Horvat, Ivana Krajinović, Zvonimir Madunić
F
urther to this conclusion as well as opinion contained in part of this report related to accompanying financial statements and annual report for the year ended 31
December 2021, we do not express any opinion on the information contained in these presentations or on any other information contained in the aforementioned file.
The partner in charge of the audit resulting in this independent auditor’s report is Ivana Krajinović.
Ivana Krajinović
Member of the Board and Certified auditor
29.04.2022
Ernst & Young d.o.o.
Radnička Cesta 50, Zagreb
Republic of Croatia
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 68 M SAN GROUP IN 2021 69
Consolidated
nancial statements
Accounting policies and notes are integral part of these nancial statements
Consolidated statement of comprehensive income, for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes 2021 2020
OPERATING INCOME
Sales 5 2,698,568 2,640,558
Cost of goods sold 8 (2,342,423 ) (2,332,169 )
Gross prot 356,145 308,389
Other operating income 6 11,495 13,032
(Decrease) / Increase in inventories of nished goods and work in progress (399 ) (3,304 )
OPERATING EXPENSES
Cost of raw material and supplies 7 (38,659 ) (42,694 )
Cost of services 9 (117,605 ) (101,214 )
Staff costs 10 (97,183 ) (89,597 )
Depreciation and amortization 11 (12,550 ) (11,428 )
Other expenses 12 (20,480 ) (16,184 )
Impairment allowance 13 (1,360 ) (17,974 )
Provisions for risks 33 (2,168 ) (79 )
Other operating expenses 14 (3,838 ) (2,742 )
Total operating expenses (293,843 ) (281,912 )
Operating prot 73,398 36,205
FINANCIAL INCOME AND EXPENSES
Financial income 15 a 11,029 17,777
Financial expenses 15 b (34,948 ) (29,080 )
Net nancial expense (23,919 ) (11,303 )
Share of net result of associates 16 2,593 2,898
Prot before tax 52,072 27,800
Income tax 17 (5,381 ) (6,665 )
Prot for the year 46,691 21,135
OTHER COMPREHENSIVE INCOME
Translation exchange differences and other (202 ) 1,610
Total comprehensive income for the year 46,489 22,745
Prot attributable to:
Owner of the Company 46,250 21,049
Non-controlling interests 441 86
Total comprehensive income attributable to:
Owner of the Company 46,041 22,656
Non-controlling interests 448 89
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 70 M SAN GROUP IN 2021 71
Accounting policies and notes are integral part of these nancial statements
Consolidated statement of financial position, at 31 December 2021
(all amounts are expressed in thousands of kuna)
Consolidated statement of financial position (continued), at 31 December 2021
(all amounts are expressed in thousands of kuna)
Accounting policies and notes are integral part of these nancial statements
ASSETS Notes
31 December
2021
31 December
2020
NON-CURRENT ASSETS
Intangible assets 18 33,217 22,758
Goodwill 19 44,441 44,441
Property, plant and equipment 20 193,851 135,933
Investment in associates 21 44,355 67,790
Deposits and loans given 26 18,473 18,992
Long-term receivables 127 127
Deferred tax assets 17 188 268
TOTAL NON-CURRENT ASSETS 334,652 290,309
CURRENT ASSETS
Inventories 22 279,414 169,942
Trade receivables 24 327,326 289,644
Prepayments 23 34,691 19,850
Receivables from employees 137 106
Investments in securities 144 -
Receivables from the State and other institutions 25 11,766 4,168
Given loans and deposits 26 7,066 7,843
Prepaid expenses and accrued income 27 7,658 6,604
Other receivables 28 9,237 10,015
Cash and cash equivalents 29 97,680 116,380
TOTAL CURRENT ASSETS 775,119 624,552
TOTAL ASSETS 1,109,771 914,861
EQUITY AND LIABILITIES
Notes
31 December
2021
31 December
2020
EQUITY
Share capital 30 109,198 97,000
Legal reserves 32 16,725 6,779
Reserves from exchange of foreign currencies (5,571 ) (5,360 )
Retained earnings 31 238,207 233,415
EQUITY HOLDERS OF THE PARENT 358,559 331,834
Non-controlling interest 20,885 (374 )
TOTAL EQUITY 379,444 331,460
NON-CURRENT LIABILITIES
Provisions for risks 33 4,456 3,742
Long-term borrowings and nance lease obligations 34 36,639 116,449
Liabilities for bond issued 36 180,000 -
Other long-term liabilities - 1,039
Liabilities for right of use assets 1,146 -
Deffered tax liability 17 139 1
TOTAL NON-CURRENT LIABILITIES 222,380 121,231
CURRENT LIABILITIES
Short-term bank borrowings and nance lease obligations 35 39,867 73,627
Current portion of non-current Bond payables 36 20,000 -
Advances received 37 10,497 5,898
Trade payables 38 365,821 329,488
Liabilities for right of use assets 616 -
Payables towards employees 6,169 5,261
Taxes, contributions and similar payable 39 30,120 35,241
Income tax liability 2,172 1,851
Dovidend liabilities 7 -
Factoring liabilities 40 21,141 5,655
Other current liabilities 41 3,673 401
Accrued expenses and deferred income 42 7,864 4,748
TOTAL CURRENT LIABILITIES 507,947 462,170
TOTAL EQUITY AND LIABILITIES 1,109,771 914,861
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 72 M SAN GROUP IN 2021 73
Consolidated statement of changes in equity
For the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Accounting policies and notes are integral part of these nancial statements
Share
capital
Legal reserves
Foreign
currency
translation
reserves
Retained
earnings
Equity
holders of
the parent
Non-con-
trolling
interest
Total
Balance at 1 January 2020
Transfer of prot - 143 - (143 ) - - -
Decrease of non-controlling interest for additionally
purchased shares
- - - 13 13 (13 )
-
Sale of related Company - - (3 ) (766 ) (769 ) -
(769 )
Prot for the year - - - 21,049 21,049 86
Other comprehensive income - 2 1,605 - 1,607 3
Total comprehensive income for the year - 2 1,605 21,049 22,656 89 22,745
Balance at 31 December 2020 97,000 6,779 (5,360 ) 233,415 331,834 (374 ) 331,460
Merger of a company (note 46) 12,198 9,944
-
(24,828 ) (2,686 )
-
(2,686 )
Separation of an afliated company (note 46) - -
-
(33,540 ) (33,540 )
-
(33,540 )
Acquisition of an afliated company (note 46) -
- -
(1,305 ) (1,305 ) 44,483
Decrease of non-controlling interest for additionally
purchased shares (note 46)
-
- -
(5,457 )
Prot for the year -
- -
Other comprehensive income - 2 (211 ) - (209 ) 7
(202 )
Total comprehensive income for the year - 2 (211 ) 46,250 46,041 448 46,489
Balance at 31 December 2021
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 74 M SAN GROUP IN 2021 75
Consolidated statement of cash flows, for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Accounting policies and notes are integral part of these nancial statements
Separate Financial
Statements
Note 2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Prot for the year 46,691 21,135
Adjusted by:
Income tax 17 5,381 6,665
Depreciation of property, plant and eqipment and amortization of
intangible assets
11 12,550 11,428
Impairment of intangible assets 13 274 233
Impairment allowance of trade receivables 13 756 17,720
Net movement in long-term provisions 33 1,686 (316 )
Net interest expense 15a, 15b 7,897 7,207
Loss from sale of associated company 15b 4,124 -
Other non-monetary transactions (323 ) 885
CHANGES IN WORKING CAPITAL
(Increase) / decrease in inventory (109,472 ) 17,418
(Increase)/ decrease in trade receivables (38,438 ) 10,391
(Increase) / decrease in given advances (14,841 ) 3,289
(Increase)/ decrease in other receivables (4,215 ) 10,169
Increase / (decrease) in received advances 4,598 (2,206 )
Increase in trade payables 36,342 10,578
Increase/ (decrease) in other current liabilities 8,572 (13,410 )
CASH GENERATED FROM OPERATIONS (38,418 ) 101,186
Interests paid (1,498 ) (4,332 )
Income taxes paid (7,328 ) (6,401 )
Net cash generated from operating activities (47,244 ) 90,453
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment and intangible assets 18, 20 (35,422 ) (16,761 )
Interests collected 369 2,803
Cash disbursements for shares in associated companies
(19,268 )
Cash receipts for sale of shares in associated companies 560 14,545
Cash receipts/ (disbursemens) from loans given (9,678 ) 24,937
Net cash used in from investing activities
(44,171 ) 6,256
CASH FLOWS FROM FINANCING ACTIVITIES
Cash receipts from nancial institutions 131,824 398,721
Payments made to nancial institutions (259,109 ) (471,878 )
Cash receipts from bond issuance 200,000 -
Dividend payment - (1,000 )
Net cash used in nancing activities 72,715 (74,157 )
Net decrease in cash and cash equivalents (18,700 ) 22,552
Cash and cash equivalents at the beginning of the year 29 116,380 93,828
Cash and cash equivalents at the end of year 29 97,680 116,380
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 76 M SAN GROUP IN 2021 77
Accounting policies and notes are integral part of these nancial statements
Accounting policies and notes are integral part of these nancial statements
ASSETS Notes
31 December
2021
31 December
2020
NON-CURRENT ASSETS
Intangible assets 18 30,739 22,574
Property, plant and equipment 20 22,242 15,376
Investments in subsidiaries and associates 21 170,676 199,887
Deposits and loans given 26 18,300 18,863
Long-term receivables 127 127
Deferred tax assets 17 135 135
TOTAL NON-CURRENT ASSETS 242,219 256,962
CURRENT ASSETS
Inventories 22 161,316 94,613
Trade receivables 24 228,896 174,127
Prepayments 23 22,715 19,118
Receivables from employees 89 66
Investments in securities 145 -
Receivables from the State and other institutions 25 5,499 2,762
Loans and deposits given 26 8,157 12,733
Prepaid expenses and accrued income 27 1,687 1,783
Receivables based on capital reduction and other receivables 28 6,694 7,879
Cash and cash equivalents 29 65,047 92,672
TOTAL CURRENT ASSETS 500,245 405,753
TOTAL ASSETS 742,464 662,715
Notes 2021 2020
OPERATING INCOME
Sales 5 2,133,956 2,038,618
Cost of goods sold 8 (1,948,839 ) (1,886,814 )
Gross prot 185,117 151,804
Other operating income 6 5,547 5,007
OPERATING EXPENSES
Cost of raw material and supplies 7 (5,804 ) (6,536 )
Other external expenses 9 (98,341 ) (78,332 )
Staff costs 10 (37,238 ) (34,348 )
Depreciation and amortization 11 (7,979 ) (5,426 )
Other expenses 12 (8,694 ) (5,755 )
Impairment allowance 13 (586 ) (16,545 )
Provisions for risks 33 (1,035 ) -
Other operating expenses 14 (2,955 ) (1,607 )
Total operating expenses (162,632 ) (148,549 )
OPERATING PROFIT 28,032 8,262
FINANCIAL INCOME AND EXPENSES
Financial income 15 a 13,050 26,894
Financial expenses 15 b (30,029 ) (24,556 )
Net nancial expense (16,979 ) 2,338
Share of net result of associate 16 - 527
Prot before tax 11,053 11,127
Income tax 17
PROFIT FOR THE YEAR 11,053 7,948
OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 11,053 7,948
Separate statement of comprehensive income, for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Separate statement of financial position, at 31 December 2021
(all amounts are expressed in thousands of kuna)
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 78 M SAN GROUP IN 2021 79
Accounting policies and notes are integral part of these nancial statements
Accounting policies and notes are integral part of these nancial statements
Separate statement of financial position (continued), at 31 December 2021
(all amounts are expressed in thousands of kuna)
Separate statement of changes in equity, For the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
EQUITY AND LIABILITIES Notes
31 December
2021
31 December
2020
EQUITY
Share capital 30 109,198 97,000
Legal reserves 16,147 6,203
Retained earnings 31 49,384 93,092
TOTAL EQUITY 174,729 196,295
NON-CURRENT LIABILITIES
Provisions for risks 33 2,651 2,005
Long-term bond liabilities 36 180,000 -
Long-term borrowings and nance lease liabilities 34 657 89,038
TOTAL NON-CURRENT LIABILITIES 183,308 91,043
CURRENT LIABILITIES
Short-term bank borrowings 35 263 44,329
Current portion of non-current Bond payables 36 20,000 -
Advances received 37 5,858 6,115
Trade payables 38 317,166 291,969
Payables to employees 2,290 1,864
Taxes, contributions and similar payable 39 23,420 28,861
Factoring liabilities 40 8,436 143
Other current liabilities 41 2,968 13
Accrued expenses and deferred income
42 4,026 2,083
TOTAL CURRENT LIABILITIES 384,427 375,377
TOTAL EQUITY AND LIABILITIES
Share capital Legal reserves
Retained
earnings
Total
Balance at 1 January 2020 97,000 6,203 85,144 188,347
Prot for the year - - 7,948 7,948
Total comprehensive income - - 7,948 7,948
Balance at 31 December 2020 97,000 6,203 93,092 196,295
Merger of a company (note 46) 12,198 9,944 (24,828 ) (2,686 )
Separation of an afliated company
(note 46)
- - (29,933 ) (29,933 )
Prot for the year - - 11,053 11,053
Total comprehensive income
- - 11,053 11,053
Balance at 31 December 2021
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 80 M SAN GROUP IN 2021 81
Notes to the consolidated and
separate nancial statements
CASH FLOWS FROM OPERATING ACTIVITIES Notes 2021 2020
Prot for the year 11,053 7,948
Adjusted by:
Income tax 17 - 3,179
Depreciation of property, plant and equipment and amortization of intangible assets 11 7,979 5,426
Impairment of intangible assets 13 274 233
Impairment allowance of trade receivables 13 312 16,312
Loss on sale of associated company 15b 2,046 -
Net movement in long-term provisions 1,035 (132 )
Net interest expense 15a, 15b 6,436 5,008
Other non-monetary transactions 247 (601 )
CHANGES IN WORKING CAPITAL
Decrease/ (increase) in inventory (66,702 ) 5,708
(Increse)/ decrease in trade receivables (55,081 ) (5,291 )
Decrease / (increase) in given advances (3,598 ) 1,363
Decrease / (increase) in other receivables 1,625 52,342
(Decrease) in received advances (257 ) (26 )
Increase/ (decrease) in trade payables 25,197 24,273
(Decrease) / increase in other current liabilities 1,203 (7,498 )
CASH GENERATED FROM OPERATIONS (68,231 ) 108,244
Interests paid (1,112 ) (3,659 )
Income taxes paid (2,538 ) (4,979 )
Net cash generated from operating activities (71,881 ) 99,606
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment and intangible assets 18, 20 (21,498 ) (13,933 )
Interests collected 550 2,698
Cash receipts for sale of shares in associated companies 560 -
Cash receipts/ (disbursements) for loans given (5,138 ) 13,414
Cash disbursements for purchase of shares in subsidiaries and asociates (1,000 ) (29,734 )
Net cash used in investing activities (26,526 ) (27,555 )
CASH FLOWS FROM FINANCING ACTIVITIES
Cash receipts from credit institution 39,179 138,024
Repayments of loans to nancial institutions (168,397 ) (194,032 )
Cash receipts from bond issuance 200,000 -
Dividends received - 9,626
Dividend payment - (1,000 )
Net cash used in nancing activities 70,782 (47,382 )
Net increase / (decrease) in cash and cash equivalents (27,625 ) 24,669
Cash and cash equivalents at the beginning of the year 29 92,672 68,003
Cash and cash equivalents at the end of year 29 65,047 92,672
Separate statement of cash flows, for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 82 M SAN GROUP IN 2021 83
1. GENERAL INFORMATION
sole owner and founder of the Company is Mr. Stipo Matić.
The Company is registered for the manufacture of office machines and computers, software
The Company’s registered seat is in Zagreb, Buzinski prilaz 10, Croatia .
The following organisational functions of the Company and Group were transferred to the company
Ured za podršku d.o.o., fully owned by Stipo Matić: Finances, Accounting, Controlling, Project
management, IT Development and Support and Business Process Support (HR, General Affairs, Legal
Affairs), which the company performs for all entities owned by both the Company and Mr. Stipo
Matić, for which it charges a fee (see Note 9).
Management Board in 2021 and 2020:
Miroslav Huzjak, President of Management Board
Irena Langer-Breznik, Member of Management Board
Slaven Stipančić, Member of Management Board
Žarko Kruljac, Member of Management Board, since March 23, 2021
Pavo Leko, Member of Management Board until January 31, 2022
Supervisory Board in 2021 and 2020:
Stipo Matić, President of Supervisory Board
Marko Rašić, Deputy President of Supervisory Board
Snježana Matić, Member of Supervisory Board
Notes to the consolidated and separate financial statements , for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and
separate financial statements
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 84 M SAN GROUP IN 2021 85
2. ADOPTION OF NEW AND AMENDED INTERNATIONAL FINANCIAL REPORTING STANDARDSA
a) Standards and Interpretations effective in the current period
The following new standards and amendments to the existing standards issued by the International
Accounting Standards Board (IASB) and interpretations issued by the International Financial Reporting
Interpretations Committee and adopted by the EU are effective for the current period:
• Amendment to IFRS 16 Leases Covid 19-Related Rent Concessions, issued on 31 March 2020
(effective date for annual periods beginning on or after 1 April 2021).
• Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform –
Phase 2, issued on 27 August 2020 (effective date for annual periods beginning on or after 1
January 2021).
• Amendments to IFRS 4 Insurance Contracts – deferral of IFRS 9, issued on 25 June 2020
(effective date for annual periods beginning on or after 1 January 2021).
The adoption of these Standards and Interpretations had no significant impact on the financial
statements of the Company and the Group.
b) Standards and Interpretations issued by IASB and endorsed by the EU but not yet effective
• Amendments to IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment; IAS 37
Provisions, Contingent Liabilities and Contingent Assets, all issued on 14 May 2020, (effective
date for annual periods beginning on or after 1 January 2022).
• Amendments to Annual Improvements 2018-2020, issued on 14 May 2020, (effective date for
annual periods beginning on or after 1 January 2022).
• IFRS 17 Insurance contracts, issued on 18 May 2017; including Amendments to IFRS 17 issued
on 25 June 2020, (effective date for annual periods beginning on or after 1 January 2023).
The Company and the Group do not expect that the adoption of these standards and interpretations
will have a material impact on the financial statements of the Company and the Group.
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Afliated companies
The Group consist of the company and the following subsidiaries in witch the company has an ownership
stake of more then 50% and control:
1. GENERAL INFORMATION (CONTINUED)
Name of related party Country Ownership in % Main Activity
2021 2020
KIM TEC D.O.O. VITEZ Bosnia and Herzegovina 100% 100% DISTRIBUTION
• KIM TEC SERVIS D.O.O. VITEZ
Bosnia and Herzegovina 100% 100% MAINTAINANCE
• KIM TEC EKO D.O.O.
Bosnia and Herzegovina 95% 95%
COLLECTION AND
DISTRIBUTION OF
WASTE
• KIM TEC NEKRETNINE D.O.O. VITEZ
Bosnia and Herzegovina 100% - REAL ESTATE
• EKO BOSANSKA POSAVINA D.O.O.
Bosnia and Herzegovina 82% - AGRICULTURE
PD MODRIČA D.O.O. Bosnia and Herzegovina - 100% AGRICULTURE
KIM TEC D.O.O. PODGORICA Montenegro 100% 100% DISTRIBUTION
PAKOM KOMPANI D.O.O.E.L. Macedonia 100% 100% DISTRIBUTION
KIM TEC D.O.O. BEOGRAD Serbia 100% 100% DISTRIBUTION
• KIM TEC SERVIS D.O.O. BEOGRAD
Serbia 100% 100% MAINTAINANCE
• KIM TEC NEKRETNINE D.O.O. BEOGRAD
Serbia 100% - REAL ESTATE
M SAN LOGISTIKA D.O.O. Croatia 100% 100% LOGISTICS
M SAN EKO D.O.O. Croatia 100% 100%
COLLECTION AND
DISTRIBUTION OF
WASTE
MR SERVIS D.O.O. Croatia 60% 60% MAINTAINANCE
ZELENA AGENDA 1.0. D.O.O. Croatia 100% - CONSULTING
CORVUS INFO D.O.O. Croatia 100% - IT
• KORVUS MK D.O.O.E.L
Macedonia 100% - IT
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 86 M SAN GROUP IN 2021 87
c) Standards and Interpretations issued by IASB but not yet adopted by the EU
At the date of authorization of these financial statements the following standards, revisions and
interpretations were in issue by the International Accounting Standards Board but not yet adopted
by the EU. The endorsement might be expected in 2022. The Company and the Group do not expect
the adoption of these standards and interpretations to have a material impact on the Group’s
consolidated financial statements.
• Amendments to IAS 1 Presentation of Financial Statements: Classication of Liabilities as
Current or Non-current and Classication of Liabilities as Current or Non-current - Deferral
of Effective Date, issued on 23 January 2020 and 15 July 2020 respectively (effective date for
annual periods beginning on or after 1 January 2023).
• Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2:
Disclosure of Accounting policies, issued on 12 February 2021 (effective date for annual periods
beginning on or after 1 January 2023).
• Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors:
Definition of Accounting Estimates issued on 12 February 2021 (effective date for annual periods
beginning on or after 1 January 2023).
• Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising
from a Single Transactions, issued on 7 May 2021 (effective date for annual periods beginning
on or after 1 January 2023).
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Statement of Compliance
Consolidated and separate financial statements are prepared in accordance with International
Financial Reporting Standards as adopted by the European Union (IFRS EU).
Basis of preparation
The consolidated and separate financial statements have been prepared on the historical cost
basis except for certain financial instruments that are measured at fair values, as explained in the
accounting policies below. Historical cost is generally based on the fair value of the consideration
given in exchange for assets.
The principal accounting policies are set out below.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and
entities controlled by the Company, i.e. its subsidiaries, including structured entities. Control is
achieved when:
• The Company has power over the investee;
• The Company is exposed, or has rights, to variable returns from its involvement with the
investee; and
• The Company has the ability to use 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 the voting rights are sufficient to give it the practical ability to direct the relevant
activities of the investee unilaterally. The Company considers all relevant facts and circumstances
in assessing whether or not the voting rights in an investee are sufficient to give it power, including:
• the size of the Company’s holding of voting rights relative to the size and dispersion of holdings
of the other vote holders;
• potential voting rights held by the Company, other vote holders or other parties;
• rights arising from other contractual arrangements; and
• 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.
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 88 M SAN GROUP IN 2021 89
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Basis of consolidation (continued)
Consolidation of a subsidiary begins when the Company obtain control over the subsidiary and
ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a
subsidiary acquired or disposed of during the year are included in the consolidated statement of
profit or loss and other comprehensive income from the date the Company gains control until the
date when the Company ceases to control the subsidiary.
Gain or loss and each component of other comprehensive income are attributed to the owners of the
parent (Company) and to the non-controlling interests.
Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the
non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Changes in the Group’s ownership interests in existing subsidiaries
Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing
control over the subsidiaries are accounted for as equity transactions. The carrying amounts of
the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their
relative interests in the subsidiaries. Any difference between the amount by which the non-controlling
interests are adjusted and the fair value of the consideration paid or received is recognised directly
in equity and attributed to owners of the Company.
When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is
calculated as the difference between (i) the aggregate of the fair value of the consideration received
and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including
goodwill), and liabilities of the subsidiary and any non-controlling interests. All amounts previously
recognised in other comprehensive income in relation to that subsidiary are accounted for as if the
Group had directly disposed of the related assets or liabilities of the subsidiary, i.e. reclassified to
profit or loss or transferred to another category of equity as specified/permitted by applicable IFRS.
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 Company, liabilities incurred by the
Company to the former owners of the acquiree and the equity interests issued by the Company in
exchange for control of the acquiree. Acquisition-related costs are generally recognised in profit or
loss as incurred. Business combinations under common control are realized per carrying values of
net asset.
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Basis of consolidation (continued)
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at
their fair value, except that:
• 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 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 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 in
profit or loss as a bargain purchase gain.
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.
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 90 M SAN GROUP IN 2021 91
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Business combinations (continued)
When the consideration transferred by the Group in a business combination includes assets or liabilities
resulting from a contingent consideration arrangement, the contingent consideration is measured
at its acquisition-date fair value and included as part of the consideration transferred in a business
combination. Changes in the fair value of the contingent consideration that qualify as measurement
period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill.
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 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.
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.
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Goodwill (continued)
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or
more frequently when there is an 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. 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.
The Group’s policy for goodwill arising on the acquisition of an associate and a joint venture is
described at note below.
Investments 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 and assets and liabilities of associates or joint ventures are incorporated in these
consolidated 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.
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 92 M SAN GROUP IN 2021 93
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Investments in associates and joint ventures (continued)
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. Where appropriate, the entire carrying amount of an interest, including goodwill, is tested
for impairment in accordance with IAS 36 “Impairment of Assets” as a single asset by comparing
its recoverable amount, which is the higher of its fair value and fair value less costs to sell, with its
book value. Any recognized impairment loss is included in the carrying amount of the interest. An
impairment loss is reversed in accordance with IAS 36 to the extent of a subsequent increase in the
recoverable amount of the interest.
Upon loss of control, the Group derecognises the assets of an associate or joint venture, shares in
non-controlling interests and other elements of equity and reserves relating to the associates or
joint ventures. Any surplus or deficit arising from the cessation of control is recognized in the income
statement. If the Group retains an interest in an associate or joint venture, that interest is stated
at fair value at the date that control ceases. Thereafter, it is accounted for as an investment that
is measured using the equity method or in accordance with the Group’s accounting policy for
financial instruments, depending on the level of retained influence. In addition, the Group recognizes
all amounts previously recognized in other comprehensive income relating to the associate or joint
venture that are no longer accounted for using the equity method on the basis that would have been
true if the associate or joint venture had sold the related assets or related liabilities directly. Therefore,
upon termination of the equity method, the Group transfers the profit or loss that the associate or joint
venture previously reported in other comprehensive income and then transfers to profit or loss after
disposal of the related assets or liabilities from equity (as a reclassification adjustment) to profit and
loss.
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 -
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Investments in associates and joint ventures (continued)
ownership interest if that gain or loss would be reclassified to profit or loss on the disposal of the
related assets or liabilities. Gains and losses from transactions between an entity that is a member of
the Group and an associate or joint venture of the Group in the consolidated financial statements is
recognized only up to the amount of the interest in that associate or joint venture that do not relate
to the Group.
An associate is an entity in which the Company has significant influence, but which is neither a
subsidiary nor a joint venture. Significant influence is the power to make decisions about financial
and operational policies of an investy, but not the control over those policies. In separate financial
statements, investments in associates are presented at cost. The cost is tested for impairment at
each reporting date.
Investments in subsidiaries
Subsidiaries are entities controlled by the Company. Control is achieved when: the Company
has power over the investee, the Company is exposed, or have rights, to variable returns from its
involvement with the investee, and the Company have the ability to use 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:
• the size of the Company’s holding of voting rights relative to the size and dispersion of holdings
of the other vote holders;
• potential voting rights held by the Company, other vote holders or other parties;
• rights arising from other contractual arrangements; and any additional facts and
circumstances that indicate that the Company has, or do not have, the current ability to direct
the relevant activities at the time when is necessary to adopt such a decision.
A subsidiary is an entity in which the Company has control or exercises, directly or indirectly, a
controlling influence. Control is achieved by acquiring more than 50 percent of shares or voting
shares, exercising the right to appoint the majority of the management or supervisory board members,
actual decision-making in a subsidiary through the controlling company having a control over the
majority of vote in the subsidiary.
In separate financial statements, investments in former subsidiaries are presented at cost. The cost
is tested for impairment at each reporting date.
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 94 M SAN GROUP IN 2021 95
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Foreign currencies (continued)
For the purposes of consolidated financial statements, the results and financial position of each
group entity are expressed in thousand of Croatian kuna (THRK), since this is the functional currency
of the parent company and presentation currency of the consolidated financial statements.
In preparing the financial statements of each individual group entity, transactions in currencies other
than the entity’s functional currency (foreign currencies) are recognised at the rates of exchange
prevailing at the dates of the transactions. At the end of each reporting period, monetary items
denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary
items carried at fair value that are denominated in foreign currencies are retranslated at the rates
prevailing at the date when the fair value was determined. Non-monetary items that are measured
in terms of historical cost in a foreign currency are not retranslated.
The exchange rates applied as of 31 December 2021 and 2020 as well as the average rates applied in
the translation of income and expense items are as follows:
Exchange differences are recognised in profit or loss in the period in which they arise, except for:
• exchange differences on foreign currency borrowings relating to assets under construction
for future productive use, which are included in the cost of those assets when they are regarded
as an adjustment to interest costs on those foreign currency borrowings;
• exchange differences on monetary items receivable from or payable to a foreign operation
for which settlement is neither planned nor likely to occur (therefore forming part of the net
investment in the foreign operation), which are recognised initially in other comprehensive
income and reclassified from equity to profit or loss on disposal of the entire or a part of the net
investment.
For the purposes of presenting these consolidated financial statements, the assets and liabilities of
the Group’s foreign operations are translated into HRK using exchange rates prevailing at the end of
each reporting period. Income and expense items are translated using the average exchange rates
based on the closing monthly exchange rates throughout the year, except in the case where there
Currency 31/12/2021
Average
exchange rate
for 2021
31/12/2020
Average
exchange rate
for 2020
RSD 15,64535 15,62818 15,60695 15,60822
KM 0,26018 0,25994 0,25950 0,25958
MKD 8,19732 8,18513 8,23422 8,18151
EUR 7,517174 7,523970 7,536898 7,534530
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue recognition
Revenue is generated from the sale of goods and provision of services.
Revenue is measured at the fair value of the consideration received or receivable less estimated
returns from customers, volume and similar discounts.
i) Sales of services
Revenue from a contract to provide services is recognised by reference to the stage of completion of
the contract. The stage of completion of the contract is determined as follows:
• income from partially performed services (those provided over several accounting periods)
is recognised by reference to the stage of completion (measured based on the proportion of
actual costs incurred relative to the total budgeted costs).
• Revenue from time and material contracts is recognised at the contractual rates as labour
hours and direct expenses are incurred.
ii) Sales of goods
Revenue from the sale of goods is recognised when all the following conditions are satisfied:
• the Group and the Company have transferred to the buyer the significant risks and rewards
of ownership of the goods;
• the Group and the Company retains neither continuing managerial involvement to the degree
usually associated with ownership nor effective control over the goods sold;
• the amount of the revenue can be measured reliably;
• it is probable that the economic benefits associated with the transaction will flow to the
Company; and
• the costs incurred or to be incurred on those transactions can be measured reliably.
Dividend and interest income
Dividend income from investments is recognised when the shareholder’s right to receive payment
has been established, provided that it is probable that the economic benefits will flow to the Group
and Company and the amount of income can be measured reliably.
Interest income from a financial asset is recognised when it is probable that the economic benefits
will flow to the Group and Company and the amount of income can be measured reliably. Interest
income is accrued on a time basis, by reference to the principal outstanding and at the effective
interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through
the expected life of the financial asset to that asset’s net carrying amount on initial recognition.
Foreign currencies
The individual financial statements of each Group entity are presented in the currency of the primary
economic environment in which the entity operates (its functional currency).
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 96 M SAN GROUP IN 2021 97
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Foreign currencies (continued)
is a significant fluctuation of exchange rates, in which case the exchange rates at the dates of the
transactions are used. Exchange differences arising, if any, are recognised in other comprehensive
income and accumulated in equity (and attributed to non-controlling interests as appropriate).
On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign
operation, a disposal involving loss of control over a subsidiary that includes a foreign operation,
or a partial disposal of an interest in a joint arrangement or an associate that includes a foreign
operation of which the retained interest becomes a financial asset), all of the exchange differences
accumulated in equity in respect of that operation attributable to the owners of the Company are
reclassified to profit or loss.
In addition, in relation to a partial disposal of a subsidiary that includes a foreign operation that does
not result in the Group losing control over the subsidiary, the proportionate share of accumulated
exchange differences are re-attributed to non-controlling interests and are not recognised in profit
or loss. For all other partial Disposals (i.e. partial Disposals of associates or joint arrangements that
do not result in the Group losing significant influence or joint control), the proportionate share of the
accumulated exchange differences is reclassified to profit or loss.
Goodwill and fair value adjustments to identifiable assets acquired and liabilities assumed through
acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and
translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences
arising are recognised in other comprehensive income.
Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
i) Current tax
The tax currently payable is based on the taxable profit for the year. Taxable profit differs from the net
profit reported in the statement of comprehensive income because it excludes items of income or
expense that are taxable or deductible in other years and it further excludes items that are not taxable
or deductible. The Group’s and the Group’s and the Company’s liability for current tax is calculated
using tax rates that have been enacted or substantively enacted by the end of the reporting period.
ii) Deferred tax
Deferred tax is recognized on differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in the computation of taxable
profit. Deferred tax liabilities are generally recognized for all taxable temporary differences, and
deferred tax assets are generally recognized for all deductible temporary differences to the extent
that it is probable that taxable profits will be available against which those deductible temporary
differences can be utilized. poslovnog spajanja) u transakciji koja ne utječe ni na oporezivu
niti na računovodstvenu dobit. Such assets and liabilities are not recognised if the temporary
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Foreign currencies (continued)
ii) Deferred tax (continued)
difference arises from goodwill or from the initial recognition (other than in a business combination)
of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting
profit.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments
in subsidiaries and associates, and interests in joint ventures, except where the Group and the
Company is able to control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred tax liabilities are recognised
for taxable temporary differences associated with investments in subsidiaries and associates, and
interests in joint ventures and it is probable that the temporary difference will not reverse in the
foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient taxable profit will be
available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the
period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that
have been enacted or substantively enacted by the end of the reporting period. The measurement of
deferred tax liabilities and assets reflects the tax consequences that would follow from the manner
in which the Group and Company expecte, at the end of the reporting period, to recover or settle the
carrying amount of its assets and liabilities.
iii) Current and deferred tax for the year
Current and deferred tax are recognised in profit or loss, except when they relate to items that are
recognised in other comprehensive income or directly in equity, in which case, the current and
deferred tax are also recognised in other comprehensive income or directly in equity respectively.
Where current tax or deferred tax arises from the initial accounting for a business combination, the
tax effect is included in the accounting for the business combination.
Property, plant and equipment
Land and buildings used in the production or delivery of goods or services or for
administrative purposes are presented in the consolidated and separate statement of
financial position at historical cost, less accumulated depreciation and impairment losses.
Plant and equipment are recognised as tangible fixed assets if their individual useful life exceeds
one year and unit cost is over HRK 3,500. Plant and equipment are carried at cost, which includes
all costs directly attributable to bringing an asset to a working condition for its intended use.
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 98 M SAN GROUP IN 2021 99
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Property, plant and equipment (continued)
Subsequent costs are included in the asset’s carrying amount or as a separate asset, as appropriate,
only if it is probable that future economic benefits associated with the asset will flow to the Group
and the cost of the asset can be measured reliably. All other repairs and maintenance represent an
expense in the income statement in the period in which they are incurred.
Any gain on disposal of an item of tangible assets is credited directly to income.
The estimated useful lives and the applicable annual depreciation/amortisation rates for principal
categories of property and equipment were as follows:
On land owned no depreciation rate is applied.
Intangible assets
Intangible assets acquired separately
Intangible assets with finite useful lives that are acquired separately are carried at cost less
accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a
straight-line basis over their estimated useful lives. The estimated useful life and amortisation method
are reviewed at the end of each reporting period, with the effect of any changes in estimate being
accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired
separately are carried at cost less accumulated impairment losses.
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Intangible assets (continued)
Internally generated intangible assets - research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An internally-generated intangible asset arising from development (or from the development phase
of an internal project) is recognised if, and only if, all of the following have been demonstrated:
• the technical feasibility of completing the intangible asset so that it will be available for use
or sale;
• the intention to complete the intangible asset and use or sell it;
• the ability to use or sell the intangible asset;
• how the intangible asset will generate probable future economic benefits;
• the availability of adequate technical, financial and other resources to complete the
development and to use or sell the intangible asset; and
• the ability to measure reliably the expenditure attributable to the intangible asset during its
development.
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure
incurred from the date when the intangible asset first meets the recognition criteria listed above.
Where no internally-generated intangible asset can be recognised, development expenditure is
recognised in profit or loss in the period in which it is incurred.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less
accumulated amortisation and accumulated impairment losses, on the same basis as intangible
assets that are acquired separately.
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination and recognised separately from goodwill are
initially recognised at their fair value at the acquisition date (which is regarded as their cost).
Subsequent to initial recognition, intangible assets acquired in a business combination are reported
at cost less accumulated amortisation and accumulated impairment losses, on the same basis as
intangible assets that are acquired separately.
Derecognition of intangible assets
An intangible asset is derecognised on disposal, or when no future economic benefits are expected
from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured
as the difference between the net disposal proceeds and the carrying amount of the asset, are
recognised in profit or loss when the asset is derecognised.
Depreciation rates for intangible assets amounted from 20-25%.
Depreciation
rates
Buildings 2.50-3.00%
Electronic equipment and
software
25-50%
Equipment 10-40%
Personal cars 20-40%
Vehicles (other than personal
cars)
25-50%
Furniture and office equipment 20-50%
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 100 M SAN GROUP IN 2021 101
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Impairment of tangible and intangible assets, excluding goodwill
At the end of each reporting period, the Group and the Company review 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). Where it is not possible to
estimate the recoverable amount of an individual asset, the Group and the Company estimate the
recoverable amount of the cash-generating unit to which the asset belongs. Where 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.
Tangible assets recognised at historical cost are depreciated using the straight-line method over the
useful life of an asset. Depreciation commences in the first months following the month in which an
asset is put in use.
Impairment losses are recognised immediately as expenses. Where an impairment loss subsequently
reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised
estimate of its recoverable amount, but only to the extent 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. A reversal of an impairment loss is
recognised immediately in profit or loss.
Inventories
Inventories are stated at the lower of cost and net realisable value.The cost of merchandise includes
purchase price, import duties and other costs directly attributable to acquisition of merchandise.
Merchandise on stock for wholesale purposes is carried at cost. The cost is determined using the FIFO
method. Small inventory includes tools, plant and office fittings and similar items that are expected to
be used for a period of up to one year, as well as assets not considered fixed assets. Small inventory,
tyres and spare parts are fully expenses when put in use. The Company also determines the value of
slow-moving and obsolete inventories, and makes an impairment allowance for such inventories by
reference to their fair value.
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Trade receivables and given advances
Trade receivables are initialy recognised at fair value and subseqently at amortized cost less any
impairment.
The Company writes a trade receivable when there are data indicating that the borrower is in serious
financial difficulties and does not have realistic returns, eg when the debtor has been liquidated or
has entered bankruptcy proceedings or when the receivables from the buyer have exceeded a year,
depending on what happens earlier. None of the written offs is subject to execution activities. Since
the Company’s historical credit loss experience does not show significantly different loss patterns
for different segments of the customer, maturity-based impairment provisions do not differ from
the different customer groups of the Company. The Company uses non-recourse factoring in its
operations when it is opportune to increase operational efficiency, liquidity and/or profitability.
The Company occasionally uses the possibility of selling receivables to factoring company’s which
accelerates liquidity or improves credit limits agreed with customers by selling non-recourse
receivables. Factoring costs are recorded in financial expenses.
Cash and cash equivalents
Cash and cash equivalents comprise of cash in hand and the balance on bank accounts.
Financial instruments
Financial assets and financial liabilities are recognised when the Group and the Company become a
party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value through profit or loss) are added to or deducted
from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at
fair value through profit or loss are recognised immediately in profit or loss.
Financial assets
Classification of financial assets
After initial recognition, financial assets are classified as assets at amortized cost, assets at fair value
through other comprehensive income (FVOCI) and assets at fair value through profit and loss (FVTPL)
depending on the business model and the characteristics of the contracted cash flows from financial
assets.
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 102 M SAN GROUP IN 2021 103
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial assets at amortized cost
Financial assets are measured at amortized cost if they meet both of the following conditions and if
they are not valued at fair value through profit and loss (FVTPL):
• The purpose of a business model is to hold assets in order to collect contractual cash flows;
and the contractual terms of a financial asset represent cash flows that are solely principal and
interest payments (SPPI), at specific dates.
This category includes: given loans and deposits, trade receivables and cash and cash equivalents.
Impairment of nancial assets
The Company and the Group recognise allowances for expected credit losses (ECLs) for trade
receivables. The amount of expected credit losses is calculated at each reporting date to reflect
changes in credit risk since initial recognition of the respective financial instrument. ECLs are based
on the difference between the contractual cash flows due in accordance with the contract and all
the cash flows that the Company and the Group expects to receive.
For credit exposures for which there has not been a significant increase in credit risk since initial
recognition, ECLs are recognized for credit losses that result from default events that are possible within
the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant
increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over
the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Company and the Group applies a simplified approach
in calculating ECLs. Accordingly, the Company and the Group does not track changes in credit risk,
but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The expected
credit losses on these financial assets are estimated using a provision matrix based on the Company’s
and Group’s historical credit loss experience, adjusted for factors specific to the debtors.
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial assets at amortized cost (continued)
Impairment of nancial assets (continued)
For loans given, the Company and the Group measure expected credit losses as a function of the
probability of occurrence of default status (PD), loss in case of occurrence of default status (LGD), ie the
amount of loss if default occurrs and exposure at the time of default (EAD). To assess PD parameters,
the Company and the Group rely on the publications of external investment rating agencies. The LGD
parameter is estimated internally and depends on the collateralisation of the loan, and for unsecured
loans it is 100%. As for the exposure at the time of default, for financial assets it represents the gross
carrying amount of the asset at the reporting date.
(i) Signicant increase in credit risk
When assessing whether the credit risk for the financial instrument significantly increased since the
initial recognition, the Company and 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 Company and 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, for the loans given, the Company
and the Group relies on days of default when assessing significant credit risk deterioration.
Despite the foregoing, the Company assumes that the credit risk on a financial instrument has not
increased significantly since initial recognition if the financial instrument is determined to have low
credit risk at the reporting date.
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 104 M SAN GROUP IN 2021 105
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(i) Signicant increase in credit risk (continued)
A financial instrument is determined to have low credit risk if:
• The financial instrument has a low risk of default,
• The debtor has a strong capacity to meet its contractual cash flow obligations in the near
term, and
• Adverse changes in economic and business conditions in the longer term may, but will not
necessarily, reduce the ability of the borrower to fulfil its contractual cash flow obligations.
However, the Company and the Group does not currently use simplification of low credit risk when
assessing a significant increase in credit risk. The Company and the Group regularly monitors the
effectiveness of the criteria used to identify whether there has been a significant increase in credit
risk and revises them as appropriate to ensure that the criteria are capable of identifying significant
increase in credit risk before the amount becomes past due.
(ii) Denition of default
The Company and the Group considers the following as constituting an event of default for internal
credit risk management purposes as historical experience indicates that financial assets that meet
either of the following criteria are generally not recoverable:
• when there is a breach of financial covenants by the debtor; or
• information developed internally or obtained from external sources indicates that the debtor
is unlikely to pay its creditors, including the Company and the Group, in full
(iii) Credit-impaired nancial assets
A financial asset is credit-impaired when one or more events that have a detrimental impact on the
estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is
credit-impaired includes observable data about the following events:
• significant financial difficulty of the issuer or the borrower;
• a breach of contract, such as a default or past due event (see (ii) above);
• the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s
financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not
otherwise consider;
• it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation;
or
• the disappearance of an active market for that financial asset because of financial difficulties.
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial assets at amortized cost (continued)
(iv) Write-off policy
The Company and the Group writes off a financial asset when there is information indicating that
the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the
debtor has been placed under liquidation or has entered into bankruptcy proceedings, or in the case
of trade receivables, when the amounts are over year past due, whichever occurs sooner.
Financial assets written off may still be subject to enforcement activities under the Company’s and
Group’s recovery procedures, taking into account legal advice where appropriate. Any recoveries
made are recognised in profit or loss.
(v) Derecognition of nancial assets
The Company and 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 Company and the Group neither transfers nor retains substantially all the risks and rewards of
ownership and continues to control the transferred asset, the Company and the Group recognises
its retained interest in the asset and an associated liability for amounts it may have to pay. If the
Company and the Group retains substantially all the risks and rewards of ownership of a transferred
financial asset, the Company and the Group continues to recognise the financial asset and also
recognises a collateralised borrowing for the proceeds received.
On derecognition of a financial asset measured at amortised cost, the difference between the asset’s
carrying amount and the sum of the consideration received and receivable is recognised in profit or
loss.
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 106 M SAN GROUP IN 2021 107
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial liabilities
All financial liabilities are measured subsequently at amortised cost using the effective interest
method or at FVTPL.
The Company and the Group measures all financial liabilities at amortized cost.
However, financial liabilities that arise when a transfer of a financial asset does not qualify for
derecognition or when the continuing involvement approach applies, and financial guarantee
contracts issued by the Company and the Group, are measured in accordance with the specific
accounting policies set out below.
Financial liabilities measured subsequently at amortised cost
Financial liabilities that are not (i) contingent consideration of an acquirer in a business combination,
(ii) held-for-trading, or (iii) designated as at FVTPL, are measured subsequently at amortised cost
using the effective interest method.
The effective interest rate method is the method of calculating the amortized cost of the financial
liability and the allocation of interest expense over the relevant period. The effective interest rate
method is the rate that accurately discounts the estimated future cash payments (including any
fees and points paid or received that form an integral part of the effective interest rate, transaction
costs and other premiums or discounts) over the expected life of the financial obligation or, where
appropriate, a shorter period, to the amortized cost of financial liability.
Classication in liabilities or equity
Debt and equity instruments are classified either as financial liabilities or equity, in accordance with
the substance of the contract.
Equity instruments
The equity instrument is a contract that provides evidence of the remainder of the stake in the
entity’s property after deducting all of its liabilities. The equity instruments issued by the Company
are recorded in the amount of income earned, less direct costs of issuance.
Financial liabilities
Other financial liabilities, including borrowings and loans, and bonds, are initially measured at fair value
less transaction costs. Other financial liabilities are subsequently measured at amortized cost using the
effective interest method, whereby interest expense is recognized on the basis of effective yield.
The effective interest method is a method for calculating the amortized cost of financial liabilities
and interest expense allocations over the relevant period. Effective interest rate is the rate at which
the estimated future cash outflows are discounted over the expected life of the financial liability or a
shorter period if applicable.
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Derecognition of nancial liabilities
The Company and the Group derecognizes financial liabilities when, and only when, the Company’s
and the Group’s obligations are discharged, cancelled or they expire.
Provisions
Provisions are recognised when the Group or the Company have a present obligation (legal
or constructive) as a result of a past event, it is probable that the Group or the Company 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 date and adjusted to reflect the current best estimate.
Where the effect of discounting is material, the amount of the provision is the present value of the
expenditures expected to be required to settle the obligation. Where discounting is used, the reversal
of such discounting in each year is recognized as finance costs.
Provisions for termination benefits are recognised when the Group and the Company have committed
to terminate employment contracts with its employees i.e. when it has a detailed formal plan to
terminate employment agreements that is reasonably unlikely to be abandoned.
apravljen detaljan formalan plan za raskid ugovora o radu koji je bez realne mogućnosti povlačenja.
Warranty provision for own brands
Warranty provisions for own brands, representing provisions for repairs and replacements within a
warranty period, are determined based on the volume and cost of goods complained of as faulty
(goods received for servicing) by groups of products.
Warranty provision for external brands are not recognized since the complete risk is carried by the suppliers.
The amount of provision is determined by applying an annual percentage of individual groups
of faulty products covered by warranty (i.e. received for servicing) as a share in the total annual
quantity of the individual products sold during the year, with the aggregate cost of the product group
concerned taken as the basis.
Provisions are determined by groups of products and duration of the warranty period.
Warranty provisions are reversed upon the expiry of the underlying warranty period and credited to
income for the year in which the warranty expires. They are netted off with correspondin expenses in
the relevant period.
Contingent liabilities
Contingent liabilities are not recognized in the financial statements. They are disclosed in the notes,
unless the possibility of an outflow of resources embodying economic benefits is remote.
No contingent assets is recognised in the financial statements. They are disclosed in the notes when
the inflow of economic benefits becomes probable.
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 108 M SAN GROUP IN 2021 109
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,
which are assets that necessarily take a substantial period of time to get ready for their intended use
or sale, are added to the cost of those assets, until such time as the assets are substantially ready for
their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All
other borrowing costs are recognised in profit or loss in the period in which they are incurred.
Events after the reporting dama
Post-year-end events that provide additional information about the Group’s and the Company’s
position at the financial statements date (adjusting events) are reflected in the financial statements.
Post-year-end events that are not adjusting events are disclosed in the notes when material.
Accounting judgements and estimates
The estimates and associated assumptions are based on past experience and other factors that
are considered to be relevant. Actual results may differ from those estimates. The estimates and
underlying assumptions are continually reviewed.
Changes in 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 revision and future periods if the revision affects
both current and future periods.
The key areas of estimation in applying the Group’s and the Company’s accounting policies that had
a most significant impact on the amounts recognized in the financial statements were as follows:
(a) Useful life of property, plant and equipment and of intangible assets
As described in the accounting policies above, the Group and the Company review the estimated
useful lives of their property, plant and equipment as well as of intangible assets at the each reporting
date. Property, plant and equipment, and intangible assets are recognised initially at cost, less
accumulated depreciation and amortisation, respectively.
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Accounting judgements and estimates(continued)
(b) Impairment allowance on trade receivables
In assessing expected credit losses, the Group considers reasonable and corroborating information
that is relevant and available. This includes quantitative and qualitative information and analysis,
based on the Group’s historical experience and an assessment of creditworthiness, including
information relating to the future. The value adjustment of receivables which are at risk in terms of
collection certainty is debited to the profit and loss in the current year.
(c) Provision for warranty risk
Provisions for estimated costs of guarantee itself recognized as a provision in the period when the
sales made. The assessment reflects historical trends in the costs of warranty.
(d) Assessment of Goodwill impairment
Goodwill is tested annually for impairment in accordance with the accounting policy. The recoverable
amounts of cash generating units are determined based on the calculated value in use. These
calculations require the use of estimates (Note 19).
(e) Recoverability of investments in subsidiaries and associates
The Company annually assesses the recoverability of investments through the test of value of net
assets of subsidiaries, ie the value of the share of associated companies increased by the share in
the result of associated companies calculated according to the equity method.
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 110 M SAN GROUP IN 2021 111
4. SEGMENT INFORMATION (CONTINUED)
As of 31 December 2021, reporting segments of the Group comprise several operating segments:
Croatia, Bosnia and Herzegovina, Serbia, Montenegro, Macedonia and other countries. Business
segments are reported in accordance with internal reporting to the executive decision maker - the
Company’s Management Board, which is responsible for allocating resources and evaluating the
performance of business segments.
Set out below is a breakdown of revenue and results of the Group by its reporting segments. The
presented sales comprise sales to third parties, intra-segment sales and other sales.
Revenues and expenses presented at the level of operating segment represent total revenues
/ expenses generated from relations with third parties, but also subsidiaries from other operating
segments. Such presentation of income and expenses is eliminated in the line “Eliminations and
corrections”.
Group segment revenue and results (continued)
4. SEGMENT INFORMATION (CONTINUED)
Group segment revenue and results (continued)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
2021 Croatia
Bosnia and
Herzegovina
Serbia Montenegro Macedonia Total
Eliminations
/ Corrections Total
Sales less customer
discounts and
allowances
2,249,270 261,967 556,613 84,653 151,456 3,303,959 (605,391) 2,698,568
Cost of goods sold less
supplier discounts and
allowances
(1,983,335) (220,657) (494,871) (73,102) (129,525) (2,901,490) 559,067 (2,342,423)
Changes in inventory
- (399) - - - (399) - (399)
Other operating
income
6,455 3,369 2,644 320 431 13,219 (1,724) 11,495
Other operating
expenses
(243,640) (35,266) (45,137) (6,618) (10,904) (341,565) 47,722 (293,843)
Profit from operations
28,750 9,014 19,249 5,253 11,458 73,724 (326) 73,398
Net finance expenses
(17,084) (1,915) (1,832) (431) (37) (21,299) (27) (21,326)
Prot before taxes
11,666 7,099 17,417 4,822 11,421 52,425 (353) 52,072
2020 Croatia
Bosnia and
Herzegovina
Serbia Montenegro Macedonia Total
Eliminations
/ Corrections Total
Sales less customer
discounts and
allowances
2,141,674 317,884 488,541 66,152 118,040 3,132,291 (491,733) 2,640,558
Cost of goods sold less
supplier discounts and
allowances
(1,918,812) (268,295) (438,342) (57,722) (101,769) (2,784,940) 452,771 (2,332,169)
Changes in inventory - (3,304) - - - (3,304) - (3,304)
Other operating
income
7,035 2,534 2,927 307 103 12,906 126 13,032
Other operating
expenses
(223,354) (41,581) (40,993) (6,772) (9,748) (322,448) 40,536 (281,912)
Profit from operations 6,543 7,238 12,133 1,965 6,626 34,505 1,700 36,205
Net finance expenses 2,392 (1,051) (914) (132) 100 395 (8,800) (8,405)
Profit before taxes 8,935 6,187 11,219 1,833 6,726 34,900 (7,100) 27,800
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 112 M SAN GROUP IN 2021 113
4. SEGMENT INFORMATION (CONTINUED)
Segment assets and liabilities
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
5 . SALES INCOME
The foreign market for the Company includes all markets except the Republic of Croatia, while for the
Group the foreign market includes all markets except the Republic of Croatia, the Republic of Serbia,
Bosnia and Herzegovina, the Republic of Montenegro and the Republic of Northern Macedonia.
Re-export implies direct export of goods to foreign markets in such a way that the goods were not
physically in the warehouse of the Company or the Group.
2020 Croatia
Bosnia and
Herzegovina
Serbia Montenegro Macedonia Total
Eliminations /
Corrections
Total
Tangible and
intangible assets
39,780 92,848 24,741 858 466 158,693 44,439 203,132
Other non-current
assets
219,012 23,304 426 2 129 242,873 (155,696) 87,177
Current assets 416,280 79,539 110,603 22,227 34,395 663,044 (38,492) 624,552
Total assets 675,072 195,691 135,770 23,087 34,990 1,064,610 (149,749) 914,861
Long-term liabilities 91,802 6,290 23,127 - 12 121,231 - 121,231
Short-term liabilities 394,866 59,784 34,539 4,330 4,620 498,139 (35,969) 462,170
Total liabilities 486,668 66,074 57,666 4,330 4,632 619,370 (35,969) 583,401
GROUP COMPANY
2021 2020 2021 2020
Domestic sales of goods 2,250,450 2,228,760 1,281,225 1,310,503
Foreign sales of goods 363,160 312,150 676,448 567,077
Service provision 77,718 75,914 35,941 37,277
Sales of spare parts 46,212 45,558 - -
Re-export sales 21,274 27,275 210,443 180,085
Income from the sale of
licences
6,109 3,520 - -
Other 8,205 10,244 - -
Allowances and discounts
given to customers
(74,560) (62,863) (70,101) (56,324)
Total 2,698,568 2,640,558 2,133,956 2,038,618
2021
Croatia
Bosna and
Herzegovina
Serbia Montenegro Macedonia Total
Eliminations/
Corrections
Total
Tangible and intangible
assets
58,520 145,788 24,459 2,474 385 231,626 39,883 271,509
Other non-current assets 189,319 91,631 389 7 130 281,476 (218,333) 271,509
Current assets 518,014 87,421 166,631 32,514 45,177 849,757 (74,638) 775,119
Total assets 765,853 324,840 191,479 34,995 45,692 1,362,859 (253,088) 1,109,771
Long-term liabilities 184,877 21,815 14,542 1,146 - 222,380 - 222,380
Short-term liabilities 408,095 67,280 84,366 10,806 4,999 575,546 (67,599) 507,947
Total liabilities 592,972 89,095 98,908 11,952 4,999 797,926 (67,599) 730,327
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 114 M SAN GROUP IN 2021 115
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
5 . SALES INCOME (CONTINUED)
Overview of gross sales by countries in which it was realised
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
6. OTHER OPERATING INCOME
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
GROUP COMPANY
2021 2020 2021 2020
Croatia 1,284,174 1,329,012 1,266,936 1,318,563
Serbia 573,207 478,151 301,090 247,004
Bosnia and Herzegovina 241,362 314,468 123,480 107,312
North Macedonia 129,317 101,914 86,285 62,829
Montenegro 86,043 66,648 47,749 33,399
Slovenia 49,168 35,017 48,913 29,055
Kosovo 45,297 33,688 34,893 26,668
Germany 40,044 22,365 39,994 22,292
Poland 38,027 49,114 36,949 48,058
Netherlands 35,956 52,698 34,590 48,359
Cezch Republic 35,218 32,368 33,225 30,445
Finland 31,733 5,811 31,733 5,811
Austria 30,889 25,576 5,275 4,537
Romania 27,778 7,255 27,755 7,255
Singapore 25,317 32,751 2,792 2,196
Hungary 19,119 6,822 19,108 6,821
Slovakia 16,768 14,356 16,763 14,356
Albania 14,866 10,580 657 288
USA 10,981 16,722 10,592 16,224
Italy 10,489 2,593 10,249 2,335
Bulgaria 3,773 3,157 3,773 2,775
Sweden 3,402 5,598 3,369 5,543
Ireland 3,178 2,102 2,223 1,711
Great Britain 2,905 26,548 2,187 25,652
France 2,437 4,097 2,158 3,982
Lithuania 1,711 3,437 1,711 3,437
Denmark 931 1,703 931 1,703
Armenia 595 2,423 595 2,423
Switzerland 300 4,243 - 3,277
United Arab Emirates - 1,149 - 1,149
Other 8,143 11,055 8,081 9,483
Total 2,773,128 2,703,421 2,204,056 2,094,942
GROUP COMPANY
2021 2020 2021 2020
Income from free receipts 3,718 1,415 906
1,083
Income from reinvoicing 1,431 2,716 1,637 1,742
Income from incentives and subsidies 1,510
3,406 419 1,042
Income from own investments 1,032
- - -
Income from sale of xed assets 916 1,194 422 73
Income from long-term provision (note 33) 482
395 - 132
Income from collected bad and
doubtful trade receivables
418 66 187 12
Inventory surpluses 170 169 92 99
Income from state subsidies 82 - - -
Income from collected writen-off trade receivables 48 158 - 150
Income from write-off of trade payables 12 940 - -
Other 1,676 2,573 1,884 674
Total 11,495 13,032 5,547 5,007
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 116 M SAN GROUP IN 2021 117
GROUP COMPANY
2021 2020 2021 2020
Cost of spare parts 17,329
17,389 - -
Servicing, replacement and repair costs under warranty 7,660 9,621 3,498 4,267
Energy and fuels for freight and personal vehicles 5,853 4,519 569 337
Small inventory, packaging and tires 3,699 3,289 1,303 1,330
Basic and auxiliary materials, and ofce supplies 2,603 6,328 434 602
Cost of materials and spare parts for equipment maintenance 1,466 1,513 - -
Inventory shortage 49 22 - -
Other - 13 - -
Total 38,659 42,694 5,804 6,536
GROUP COMPANY
2021 2020 2021 2020
Cost of goods sold 2,446,881 2,438,790 2,031,628 1,968,653
Intellectual property use fee (license) 23,397 15,786 11,477 9,087
Ullage, spillage, breakage 5,198 2,003 4,355 1,215
Warranty extansion costs 938 817 1,192 816
Excessive inventories shortage 195 53 - -
Other cost of goods sold 1,611 430 - 98
Allowances and discounts provided by suppliers (135,797) (125,710) (99,813) (93,055)
Total
2,342,423 2,332,169 1,948,839 1,886,814
7. COST OF RAW MATERIAL AND SUPPLIES
8. COST OF GOODS SOLD
9. OTHER EXTERNAL EXPENSES
GROUP COMPANY
2021 2020 2021 2020
Costs of the Back ofce and bookkeeping services 23,303 23,168 17,931 18,175
Business premise and equipment rental costs 20,370 19,869 5,684 5,255
Telephone, shipping and transportation costs 18,794 14,352 36,355 19,501
Marketing, sponsorships and fairs 17,553 10,158 12,982 6,647
Utilities 8,547 8,443 6,426 6,555
Maintenance and repairs 6,119
5,640 2,460 2,310
Intellectual services 4,015 1,654 2,148 476
Representation 3,602 4,365 1,323 2,555
Students and youth employees service costs 2,519 1,314 4,543 3,821
Other 1,694 2,519 252 479
Total 11,089 9,732 8,237 6,640
Ukupno 117,605 101,214 98,341 78,332
GRUPA DRUŠTVO
2021 2020 2021 2020
Net salaries 61,002 55,422 22,339 20,027
Taxes, surtaxes and contributions from salaries 23,969 22,473 10,285 10,113
Contributions on salaries 12,212 11,702 4,614 4,208
Total 97,183 89,597 37,238 34,348
10. STAFF COSTS
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
The Group has a well-developed logistics network in the Republic of Croatia and the Adria region, with
the aim of ensuring fast and quality delivery of goods to partners. Securing its own regional logistics
network performed by the subsidiary Msan Logistika d.o.o. Zagreb provides the Company and the
Group with one of the key comparative advantages in the distribution of consumer electronics,
computers and computer programs.
The Group had an average of 769 employees in 2021 (2020: 653 employees). The Company had an
average of 170 employees in 2021 (2020: 159 employees).
In addition to the sale of computers and laptops, the Group and the Company also sell licenses -
ready-made office applications or platforms for the development of management and processing
and advanced analytics.
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 118 M SAN GROUP IN 2021 119
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
11. DEPRECIATION AND AMORTIZATION
13. IMPAIRMENT ALLOWANCE
12. OTHER EXPENSES
14. OTHER OPERATING EXPENSES
15.a FINANCIAL INCOME
GROUP COMPANY
2021 2020 2021 2020
Depreciation 7,073
8,451 2,505 2,454
Amortization 5,477
2,977 5,474 2,972
Total 12,550 11,428 7,979 5,426
GROUP COMPANY
2021 2020 2021 2020
Impairment allowance of trade receivables 756 17,720 312 16,312
Impairment allowance of intangible assets 274 233 274 233
Impairment allowance of Inventories 274 21 - -
Other 56 - - -
Total 1,360 17,974 586 16,545
GROUP COMPANY
2021 2020 2021 2020
Insurance premiums for equipment, vehicles and inventories 4,704 3,595 2,430 1,758
Christmas allowance, children's gifts, awards 2,913 2,294 987 823
Travel expenses 2,500 2,366 718 696
Bank and payment operation charges 2,224 1,818 1,116 733
Per diems and other business travel costs 1,369 957 312 109
Forest levies, other contributions and membership fees 1,286 1,318 738 725
License costs 1,007 649 - -
Taxes not dependent on the operating result 904 639 397 5
Professional training and literature 858 382 622 284
Scholarship 235 343 216 324
Administrative fees and court costs 190 164 5 -
Other 2,290 1,659 1,153 298
Total 20,480 16,184 8,694 5,755
GROUP COMPANY
2021 2020 2021 2020
Donations 1,142 857 1,140 846
Receivables written off 1,069 29 1,069 29
subsequent charges 704 683 260 552
Written-off trade receivables 404 597 295 120
Loss on disposal of tangible asset 109 50 - 50
Fines 5 298 - 9
Other 405 228 191 1
Total 3,838 2,742 2,955 1,607
GROUP COMPANY
2021 2020 2021 2020
Foreign exchange gains 9,195 14,180 11,676 15,412
Interest income 1,721 1,962 1,261 1,802
Income from sale of ownerships in afliated companies - 1,580 - -
Dividend income - - - 9,626
Other nancial income 113 55 113 54
Total
11,029 17,777 13,050 26,894
Based on the Decision on the payment of the dividend of Kim Tec d.o.o Vitez from July 6, 2020, the
Company recognized dividend income in the amount of HRK 9,626 thousand. The payment was made
in September 2020 in the equivalent of BAM 2,500 thousand. In December 2020, the Group and the
Company sold the ownership in the subsidiary Poljoprivrednik d.o.o. Derventa (Note 46).
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 120 M SAN GROUP IN 2021 121
Based on the agreement on the transfer and takeover of business shares in the associated company
Ventex d.o.o. Company transferred the business share of the nominal value of HRK 2,016 thousand
to the acquirer Mr. Danko Venturini. The contracted fee amounted to HRK 560 thousand and thus a
loss was recognized in the Company in the amount of HRK 2,046 thousand, and in the Group a loss in
the amount of HRK 4,124 thousand. In the business year 2020, the Group sold its shares in associated
companies in the agricultural segment and thus recognized a loss from sales in the amount of HRK
2,838 thousand (note 46).
The following is a summary of the attribution of results by individual associates
15.B FINANCIAL EXPENSES
16. SHARES IN RESULT OF THE INVESTMENTS ACCOUNTED BY EQUITY METHOD
CURRENT TAX
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
17. INCOME TAX
Corporate income tax in Croatia is determined by applying the rate of 18% (Serbia: 15%, Montenegro:
9%, Bosnia and Herzegovina: 10% and Macedonia: 10%) to taxable profit for the year.
Effective tax rate in 2021 was 13.3% (2020: 15.4%).
As at 31 December 2021, the Group recognized deferred tax assets related to temporary differences
related to trade receivables, depreciation and provisions.
GROUP COMPANY
2021 2020 2021 2020
Foreign exchange losses 16,976 12,920 16,759 14,648
Interest expense 9,618 9,169 7,697 6,810
Loss on sale of associates 4,124 2,838 2,046 -
Bank guarantees fees 1,909 2,307 1,615 1,989
Factoring fees 1,053 993 804 761
Bond issuance fees 900 - 900 -
Loan origination costs 368 763 208 348
Other - 90 - -
Total 34,948 29,080 30,029 24,556
GROUP COMPANY
2021 2020 2021 2020
Income from prot attribution from associates 2,593 3,080 - 527
Expenses from loss attributions from associates - (182) - -
Total 2,593 2,898 - 527
GROUP
2021 2020
E kupi 1,089 1,086
Ventex 293 593
EKO Bosanska Posavina 1,211 864
Agropromet Grahovo - 77
MP Energija Grahovo - 32
Poljoprivrednik Glamoč - -182
Poljoprivrednik Odžak - 428
Total 2,593 2,898
GROUP COMPANY
2021 2020 2021 2020
Current tax 5,163 6,595 - 3,179
Deferred tax 218 70
-
-
Income tax expense 5,381 6,665
-
3,179
GROUP COMPANY
2021 2020 2021 2020
Accounting prot before tax 52,072 27,800 11,053 11,127
Income tax 18% 9,373 5,004 1,990 2,003
Tax effect of lower tax rates (2,199) (755) - -
Tax effect of permanent deductiable expenses 1,287 5,046 728 3,205
Tax effect of premanent deductiable income (3,258) (2,249) (3,148) (2,028)
Income tax expense
5,203 7,046 (431) 3,179
Utilisation of tax loss (40) (451) - -
Net tax expense 5,163 6,595 - 3,179
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 122 M SAN GROUP IN 2021 123
17. INCOME TAX (CONTINUED)
17. INCOME TAX (CONTINUED)
In accordance with local tax regulations, the tax authorities may at any time inspect the Company’s
and the Group’s books and records within the period defined by local tax regulation, and may impose
additional tax assessments and penalties.
A tax audit was performed at the Company in 2013, 2014, 2015 and 2016, which was still pending at
the date of issue of these financial statements.The Company utilised, a beneficiary, tax incentives
provided under the Act on Scientific Activity and Higher Education and the Rules on Government
Grants for Research and Development Projects.
In our opinion, the certificates verifying the eligibility of the project costs issued by the Ministry of
Science, Education and Sports, prepared on request of the Tax Administration and serving to the Tax
Administration as the basis for assessing the grounds for reducing the corporate income tax base
are illegal and as such they are in the process of being challenged before the Administrative Court
in Zagreb. So far, the Administrative Court in Zagreb has annulled seven such certificates from the
Ministry of Science, Education and Sports and ordered the Ministry to issue new certificates. Two more
proceedings are being conducted before the Administrative Court in Zagreb against other certificates
on the justification of project costs of the Ministry of Science, Education and Sports.
Once all the court proceedings are final and new, legal verification certificates are issued by the
Ministry of Science, Education and Sports as final administrative instruments, the Tax Administration
will have legal grounds to bring the tax audit at the Company to the end.
In February 2022, the Company filed a Complaint with the Ministry of Finance, Independent Sector for
Second Instance Administrative Procedure. The Complaint states, inter alia, that in accordance with
the relevant legislation, the statute of limitations for determining the tax liabilities in question has
expired.
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Gross tax losses in the amount of HRK 44,859 thousand are available to reduce the future taxable profits
of the Group at the end of 2021. Tax losses cannot be transferred and used within group members.
The Group has not recognized deferred tax assets on the basis of tax losses carried forward as it is
uncertain when individual companies within the Group will generate sufficient future taxable profit on
the basis of which such tax assets could be used. At the next reporting date, the Group will reassess
the assumptions for recognizing deferred tax assets.
DEFFERED TAX ASSETS
GROUP COMPANY
2021 2020 2021 2020
Balance at 1 January 268 316 135 135
Recognized in prot or loss (80) (48) - -
Balance at 31 December 188 268 135 135
DEFFERED TAX LIABILITIES
GROUP COMPANY
2021 2020 2021 2020
Balance at 1 January 1 325
-
-
Recognized in prot or loss 138 22
-
-
Other
-
(346)
-
-
Balance at 31 December 139 1
-
-
GROUP
2021 2020
Up to 1 year 13,683 5,186
Up to 2 year 8,024 1,658
Up to 3 year 8,669 3,207
Up to 4 year 7,993 6,349
Up to 5 year 6,490 3,495
Total tax loss available for transfer 44,859 19,895
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 124 M SAN GROUP IN 2021 125
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
GROUP Software Concessions Development Trade mark
Intangible
assets in
progress
Total
COST
At 1 January 2020 22,226 111 2,045 286 6,227 30,895
Additions - - - - 11,444 11,444
Transfer from assets under construction 8,771
- - 35 (8,806) -
Impairment of assets under construction - - - - (233) (233)
Sales effect - (51) - - - (51)
Exchange differences - 1 - - - 1
At 31 December 2020 30,997 61 2,045 321 8,632 42,056
Additions - - - - 12,546 12,546
Transfer from assets under construction 9,120 - - 76 (9,196) -
Impairment of assets under construction - - - - (273) (273)
Acquisition of an afliated company (note 46) 6,864 - - - 2,348 9,212
Merger of a company (note 46) 2,301 - - - 403 2,704
Sales effect (61) (61)
Exchange differences 2 - - - - 2
At 31 December 2021 49,284 - 2,045 397 14,460 66,186
ACCUMULATED DEPRECIATION DEPRECIATION
At 1 January 2020 14,011 24 2,045 268 - 16,348
Charge for the year 2,965 3 - 9 - 2,977
Sales effect - (27) - - - (27)
At 31 December 2020 16,976 - 2,045 277 - 19,298
Charge for the year 5,457 - - 20 - 5,477
Acquisition of an afliated company (note 46) 6,858 6,858
Merger of a company (note 46) 1,328 - - - - 1,328
Exchange differences 8 - - - - 8
At 31 December 2021 30,627 - 2,045 297 - 32,969
NET BOOK VALUE
At 31 December 2021 18,657 - - 100 14,460 33,217
At 31 December 2020 14,021 61 - 44 8,632 22,758
18. INTANGIBLE ASSETS (CONTINUED)
COMPANY Software Development Trademark
Intangible assets
in progress
Total
COST
At 1 January 2020 21,276 1,991 287 6,110 29,664
Additions - - - 11,444 11,444
Transfer from assets under construction 8,772 - 35 (8,807) -
Impairment of assets under construction - - - (233) (233)
At 31 December 2020 30,048 1,991 322 8,514 40,875
Additions - - - 12,536 12,536
Transfer from assets under construction 9,110 - 76 (9,186) -
Impairment of assets under construction - - - (273) (273)
Merger of a company (note 46) 2,301 - - 403 2,704
At 31 December 2021 41,459 1,991 398 11,994 55,842
ACCUMULATED DEPRECIATION
DEPRECIATION
At 1 January 2020 13,070 1,991 268 - 15,329
Charge for the year 2,963 - 9 - 2,972
At 31 December 2020 16,033 1,991 277 - 18,301
Charge for the year 5,453 - 21 - 5,474
Merger of a company (note 46) 1,328 - - - 1,328
At 31 December 2021 22,814 1,991 298 - 25,103
NET BOOK VALUE
At 31 December 2021 18,645 - 100 11,994 30,739
At 31 December 2020 14,015 - 45 8,514 22,574
18. INTANGIBLE ASSETS
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 126 M SAN GROUP IN 2021 127
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
19 GOODWILL (CONTINUED)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
The Group performs an impairment test annually to assess whether the recoverable amount of
goodwill shows a potential impairment of the carrying amount. The calculation of the recoverable
amount of goodwill is based on a five-year plan of revenues that the Companies generate in local
and foreign markets developed by the Group, taking into account corporate and marketing strategies,
and relevant market trends.
The calculation of the recoverable amount implies terminal growth rates after a projection
period of five years in range of 2.0% - 3.0% (2020. 3.0% - 3.5%), depending on the industry in which
the Company operates. The cash flows arising from these plans are discounted using a discount
rate that reflects the return on the underlying assets, which is defined for the purposes of the
goodwill impairment test as the weighted average cost of capital for the local market.
Value in use calculations for cash-generating units are most sensitive under the following
assumptions:
Revenues and Gross Margins - Revenues and gross margins are based on average values
achieved in the last few years before the start of the business plan period. The same are increased
during the business plan period for the expected customer retention rate, business expansion,
synergies, and efficiency improvements.
Average revenue growth rates in the business plan period range from 3.5% to 7.6% (2020: 6.0%
to 10.1%).
Discount rates represent the current assessment of market risks specific to cash-generating
units. It is a benchmark used by the Group to assess business performance and to evaluate
future investment proposals.
The sensitivity analysis of the key assumptions used in the goodwill impairment test shows that
an increase in the discount rate by 1 percentage point, with other assumptions unchanged, would
not lead to an impairment of goodwill. Also, the value of goodwill would remain unchanged with a
decrease in the terminal growth rate by 1 percentage point, with other assumptions unchanged, as
well as with a decrease in expected free cash flow by 5 percentage points, with other assumptions
unchanged.
19. GOODWILL
31 December
2021
31 December
2020
Cost
44,441 44,441
44,441 44,441
2021 2020
Cost
Opening balance 44,441 45,903
Sale of afliated company (note 46) - (1,481)
Effect of exchange differences - 19
Closing balance 44,441 44,441
31 December
2021
31 December
2020
KIM TEC BG 29,251 29,251
KIM TEC BIH 8,201 8,201
Pakom Kompani d,o,o, 6,714 6,714
MR SERVIS 275 275
Total 44,441 44,441
Cash generating units 2021 2020
KIM TEC BG 11.9% 11.0%
KIM TEC BIH 13.3% 12.0%
MR SERVIS 8.4% 8.9%
Pakom Kompani d.o.o. 13.0% 10.7%
Kalkulacije vrijednosti u upotrebi za goodwill baziraju se na sljedećim pretpostavkama diskontne
stope nakon poreza:
The recoverable amount of cash-generating units is determined based on a value in use calculation.
These calculations use cash flow projections based on financial plans approved by the Group’s
Management Board and cover a period of five years.
For the purposes of impairment test, goodwill has been allocated to the following cash-generating
units:
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 128 M SAN GROUP IN 2021 129
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
GROUP
Land and
buildings
Plant and
equipment
Vehicles
Ofce and other
equipment
Other
assets
Right of usage assets
Assets under
construction
Total
COST
At 1 January 2020
234,961 68,233 1,137 12,540 3,823 12,348 1,890 334,932
Additions
- - - - 282 - 5,970 6,252
Transfer from assets under construction
617 3,511 269 357 182 1,307 (6,243) -
Transfer from ofce and other equipment to plant and equipment
- 42 (7) (35) - - - -
Sales of afliated company (note 46)
(24,408) (16,615) - - (2,671) - (1,259) (44,953)
Disposals
(1,404) (101) (313) - (543) (2,361)
Exchange differences
2,903 410 27 58 34 - 25 3,457
At 31 December 2020
214,073 54,177 1,325 12,607 1,650 13,112 383 297,327
Additions
- - - - 27 - 22,849 22,876
Transfer from assets under construction
10,253 8,239 434 1,150 10 2,745 (22,831) -
Leases
- - - - - 2,253 - 2,253
Acquisition of an afliated company (note 46)
43,678 31,207 - 212 1,912 9,280 7,005 93,294
Merger of a company (note 46)
- 1,673 - 25 25
- -
1,723
Separation of an afliated company (note 46)
(104,588) (10,445) - (256) - - - (115,289)
Disposals
(56) (1,345) (144) (46) - (811) - (2,402)
Exchange differences
(523) (33) (5) (8) (1) - (8) (578)
At 31 December 2021
162,837 83,473 1,610 13,684 3,623 26,579 7,398 299,204
20. PROPERTY, PLANT AND EQUIPMENT
As at 31 December 2021, the present value of real estate on which the bank’s mortgage was registered
as collateral for loans amounts to HRK 20,047 thousand (2020: HRK 17,208 thousand). The mortgage
on these assets amounts to HRK 42,474 thousand (2020: HRK 42,585 thousand), while the amount of
debt on these mortgages amounts to HRK 23,729 thousand (HRK 30,129 thousand).
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 130 M SAN GROUP IN 2021 131
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
20. PROPERTY, PLANT AND EQUIPMENT (COUNTINUED)
GROUP
Land and
buildings
Plant and
equipment
Vehicles
Ofce
and other
equipment
Other assets
Right of usage
assets
Assets under
construction
Total
ACCUMULATED DEPRECIATION
DEPRECIATION
At 1 January 2020 103,893 51,523 54 11,670 1,776 10,723
-
179,639
Charge for the year 2,107 4,228 129 334 585 892 - 8,275
Sales of afliated company (note 46) (17,070) (7,626) - - (1,329) - - (26,025)
Disposals - (1,327) (102) (308) - (411) - (2,148)
Exchange differences 1,334 237 15 52 15 - - 1,653
At 31 December 2020 90,264 47,035 96 11,748 1,047 11,204 - 161,394
Charge for the year 1,353 3,411 186 357 173 1,593 - 7,073
Disposals - (1,241) (41) (43) - (728) - (2,053)
Acquisition of an afliated company (note 46) 63 20,041 - 212 132 2,018 - 22,466
Merger of a company (note 46)
-
1,489 - 20 18 129
-
1,656
Separation of an afliated company (note 46) (76,687) (7,855) - (364) - - - (84,906)
Exchange differences (237) (30) (3) (7) - - - (277)
At 31 December 2021 14,756 62,850 238 11,923 1,370 14,216 - 105,353
NET BOOK VALUE
At 31 December 2021
148,081 20,623 1,372 1,761 2,253 12,363 7,398 193,851
At 31 December 2020
123,809 7,142 1,229 859 603 1,908 383 135,933
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 132 M SAN GROUP IN 2021 133
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
20. PROPERTY, PLANT AND EQUIPMENT (COUNTINUED)
As of 31 December 2021 the Company has no assets pledged as collateral for bank loans.
COMPANY
Land and buildings Plant and equipment Right of usage assets Ofce and other equipment
Leasehold
improvements
Assets under
construction
Total
COST
At 1 January 2020 11,535 34,273 5,593 6,502 438 91 58,432
Additions - - - - - 2,488 2,488
Transfer from assets under construction - 1,826 590 163 - (2,579) -
Transfer from plant and equipment to vehicles - 7 (7) - - - -
Disposals - (461) (444) (253) - - (1,158)
At 31 December 2020 11,535 35,645 5,732 6,412 438 - 59,762
Additions - - - - - 8,962 8,962
Transfer from assets under construction - 6,875 402 975 10 (8,262) -
Merger of a company (note 46) - 1,673 367 25 25 - 2,090
Disposals - (1,185) (471) (36) - - (1,692)
At 31 December 2021 11,535 43,008 6,030 7,376 473 700 69,122
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 134 M SAN GROUP IN 2021 135
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
20. PROPERTY, PLANT AND EQUIPMENT (COUNTINUED)
COMPANY Land and buildings Plant and equipment Right of usage assets Ofce and other equipment Leasehold improvements
Assets under
construction
Total
ACCUMULATED DEPRECIATION
DEPRECIATION
At 1 January 2020
-
31,680 5,128 6,047 176 - 43,031
Charge for the year - 1,856 345 165 88 - 2,454
Disposals - (461) (389) (249) - - (1,099)
At 31 December 2020
-
33,075 5,084 5,963 264 - 44,386
Charge for the year - 1,923 306 187 89 - 2,505
Disposals
-
(1,160) (471) (36) - - (1,667)
Merger of a company (note 46)
-
1,489 129 20 18 - 1,656
At 31 December 2021 - 35,327 5,048 6,134 371 - 46,880
NET BOOK VALUE
At 31 December 2021 11,535 7,681 982 1,242 102 700 22,242
At 31 December 2020 11,535 2,570 648 449 174 - 15,376
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 136 M SAN GROUP IN 2021 137
21.1 INVESTMENTS IN SUBSIDIARIES
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Set out in the table below are the Company’s subsidiaries, together with the Company’s ownership
interests:
During 2021, the Company and the Group decided to disinvest the real estate segment from their
portfolio. Subsidiary Kim Tec BG d.o.o. on the basis of the division and takeover agreement, separated
out the economic activity of real estate in such a way that part of the assets and capital and liabilities
are transferred to the new company. The division report indicates a part of the assets transferred to
the company Kim Tec Nekretnine BG d.o.o. where the real estate segment separated. The total value
of assets amounted to HRK 23,885 thousand, share capital to HRK 160 thousand, retained earnings to
HRK 16,211 thousand, and liabilities to credit institutions to HRK 7,514 thousand.
As the Company is the only member of the subsidiary Kim Tec BG d.o.o. as a result of the respective
Separation of an affiliated company, there was no change in the ownership structure of Kim Tec
Nekretnine BG.d.o.o.
In November 2021, the company founded the company Green Agenda 1.0 d.o.o. payment in cash, and
thus acquired a share in ownership and voting rights in the amount of 100%.
In the same month, based on the Division and Takeover Agreement, the Company separated the
agricultural segment in MPI Modriča by transferring its assets to Agro Invest Grupa d.o.o. The company
carried out the division with the takeover according to the carrying values and had no effects from
the sale.
In December 2021, based on the Merger Agreement of 28 December 2021 and the Decision of the
General Meeting of the merged company and the acquiring company, the company merged the
related party M San Ulaganja d.o.o. and thus acquired an ownership stake in ownership and voting
rights in the amount of 100% in the subsidiary Corvus Info d.o.o.
All business combinations are described in more detail in Note 46.
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
21 FINANCIAL ASSETS (CONTINUED)
21.1 INVESTMENTS IN SUBSIDIARIES (CONTINUED)
21.2 INVESTMENTS IN ASSOCIATED COMPANIES
21 FINANCIAL ASSETS
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Investments in subsidiaries - - 129,176 155,781
Investments in associates 44,355 67,790 41,500 44,106
44,355 67,790 170,676 199,887
Name of subsidiary Principal activity
Country of
incorporation
and business
Ownership share and share
in the voting power
Amount
31 December
2021
31 December
2020
31 December
2021
31 December
2020
% %
Kim Tec Vitez d.o.o. DISTRIBUTION
Bosnia and
Herzegovina
100 100 6,590 6,590
Kim Tec BG d.o.o. DISTRIBUTION Serbia 100 100 61,556 77,946
Kim Tec CG d.o.o. DISTRIBUTION Montenegro 100 100 11,698 11,698
Pakom Kompani d.o.o. DISTRIBUTION
North
Macedonia
100 100 17,784 17,784
M San Eko d.o.o.
COLLECTION AND
DISTRIBUTION OF
WASTE
Croatia 100 100 500 500
MR SERVIS d.o.o. MAINTAINANCE Croatia 60 60 11,510 11,510
M San Logistika d.o.o. LOGISTICS Croatia 100 100 20 20
MPI Modriča AGRICULTURE
Bosnia and
Herzegovina
- 100 - 29,733
Zelena Agenda 1.0
d.o.o.
CONSULTING Croatia 100 - 1,000 -
Corvus Info d.o.o. IT Croatia 100 - 2,129 -
Kim Tec Nekretnine
Beograd
REAL ESTATE Serbia 100 - 16,389 -
129,176 155,781
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Investment in Ventex - 4,391 - 2,606
Investment in E Kupi 44,355 43,266 41,500 41,500
Investment in EKO Bosanska Posavina - 20,133 - -
44,355 67,790 41,500 44,106
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 138 M SAN GROUP IN 2021 139
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Name of associate Principal activity
Country of incorporation and
business
Ownership and share in the
voting rights
2021 2020
Ventex d.o.o., Rijeka
Mediation in miscellaneous trade
Rijeka - 49%
E Kupi d.o.o. E-commerce Zagreb 24% 24%
EKO Bosanska
Posavina Agriculture Bosia and Herzegovina - 37%
E Kupi Total
Property, plant and equipment 2,120 2,120
Intangible assets 8,593 8,593
Other assets 6,590 6,590
Inventories 61,473 61,473
Trade receivables 17,079 17,079
Cash and cash equivalents 3,279 3,279
Other current assets 3,233 3,233
Long-term liabilities (3,000) (3,000)
Short-term liabilities (87,376) (87,376)
Net assets of associates 11,991 11,991
Group's share in the net assets of the associates
2,878 2,878
Total income 393,051 393,051
Total prot for the current year 4,537 4,537
Group's share in the prot of the associates (notes 16) 1,089 1,089
In April 2021, the company sold its stake in the associated company Ventex d.o.o. A consideration for
the sale of the company in the amount of HRK 560 thousand was received. and a loss was realized in
the amount of HRK 4,124 thousand (Note 15b). The Group attributed the result of the associate until 30
April 2021 in the amount of HRK 293 thousand (Note 16)
Below is information on the Group’s associates:
In November 2021, the Group recapitalised the associated company EKO Bosanska Posavina in the
amount of HRK 56,873 thousand and thus acquired an ownership share in ownership and voting
rights in the amount of 82%, which is described in more detail in Note 46.
The Group concluded that all companies represented or represent associates as the Group has
no control over those companies in which the investment is made. The shares and stakes of these
companies are not listed on active markets.
21.2. INVESTMENT IN ASSOCIATES (CONTINUED) 21. FINANCIAL ASSETS (CONTINUED)
The following is a summary of the financial information relating to the associate
E kupi d.o.o. for 2021
Company E kupi d.o.o. was founded in 2010. The company acquired a 24% stake in this associate in
2016.
21.2 INVESTMENTS IN ASSOCIATED COMPANIES (CONTINUED)
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 140 M SAN GROUP IN 2021 141
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
During 2021, the Company recapitalized the related party Kim Tec inženjering Slovenija in the amount
of HRK 16,106 thousand and thus took control over it. As the stated subsidiary at that time had a debt
to the Company in the amount of HRK 15,960 thousand, it was settled in full. Given that the subsidiary
was without operating operations at that time, the same had an impact on the Group’s operations
in 2021 (during the period when the Company had a control). The mentioned company was sold in
2021 and a loss in the amount of HRK 15,858 thousand was recognized. In the income statement of the
Group and the Company, this amount of loss is netted off with the income from the collection of value
adjusted receivables in the amount of HRK 15,960 thousand and a net effect was recognized for the
Company and the Group in the amount of HRK 102 thousand.
22. INVENTORIES
23. PREPAYMENTS
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Merchandise 178,670 123,017 74,782 53,590
Goods in the customs warehouse 55,856 24,115 53,920 23,371
Goods in transit 33,121 18,144 32,232 17,270
Other 11,767 4,666 382 382
Total 279,414 169,942 161,316 94,613
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Prepayments for services 20,942 1,354 18,656 1,062
Prepayments for goods 13,638 18,496 4,059 18,056
Other 111 - - -
Total 34,691 19,850 22,715 19,118
GROUP COMPANY
31 December 2021 31 December 2020 31 December 2021 31 December 2020
Domestic trade receivables 301,381 267,441 134,490 126,513
Foreign trade receivables 36,085 47,859 96,126 64,974
Impairment allowance on trade receivables (10,140) (25,656) (1,720) (17,360)
Total 327,326 289,644 228,896 174,127
GROUP COMPANY
2021 2020 2021 2020
At 1 January 25,656 8,729 17,360 1,443
Impairment allowance (Note 13) 756 17,445 312 16,287
Reversed on collection (Note 6) (16,298) (66) (16,016) (12)
Derecognition / Exchange rate
difference
26 (452) 64 (358)
At 31 December 10,140 25,656 1,720 17,360
Movement in impairment allowance for doubtful accounts:
24. TRADE RECEIVABLES
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 142 M SAN GROUP IN 2021 143
25. RECEIVABLES FROM THE STATE AND OTHER INSTITUTIONS
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Undue 248,296 243,208 160,902 129,958
Up to 60 days 61,508 23,162 60,537 25,299
61-90 days 6,897 4,709 3,177 9,106
91-120 days 2,925 3,001 1,495 2,144
121-365 days 7,262 14,622 2,515 7,003
More than 365 days 438 942 270 617
Total 327,326 289,644 228,896 174,127
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
VAT prepayments 5,944 979 386 112
Income tax advances 5,134 2,649 4,993 2,456
VAT recivables in Slovenia 83 - 83 -
Customs duty prepayments 53 53 - -
Receivables for other taxes, contributions and
membership fees
48 176 - 175
Other 504 311 37 19
Total 11,766 4,168 5,499 2,762
26. GIVEN LOANS AND DEPOSITS
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Loans to corporates 18,300 18,863 18,300 18,863
Given deposits to unrelated
parties
173 129 - -
Total
18,473 18,992 18,300 18,863
Original
currency
Amount Due date
31 December
2021
31 December
2021
Loans to corporates
M SAN GRUPA D.O.O.
Related parties
Litus projekti d.o.o.
HRK
600
31 December
2021 - 563
Baks grupa d.o.o.
HRK
18,309
31 December
2022 18,300 18,300
Total
18,300 18,863
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Loans to corporate entities 3,195 3,811 4,365 8,810
Loans to individuals 1,537 1,695 1,537 1,662
Given deposits to unrelated parties 2,333 2,337 2,255 2,261
Total
7,065 7,843 8,157 12,733
24. TRADE RECEIVABLES (CONTINUED)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
The average receivables collection period in the Group in 2021 was 43 days (2020: 40 days), while in
the Company it was 37 days (2020: 30 days).
Loan given to Baks grupa d.o.o. is presented within the non-current assets considering the expected
maturity date (above 1 year).
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 144 M SAN GROUP IN 2021 145
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Original
currency
Amount Due date
31 December
2021
31 December
2020
Loans to entities within group
Company
M SAN GRUPA D.D.
M SAN EKO d.o.o. HRK 2,000 31 December 2022 3,226 2,624
MR SERVIS d.o.o. HRK 230 31 December 2022 250 650
M SAN LOGISTIKA d.o.o. HRK 7,500 31 December 2022 - 1,725
Total 3,476 4,999
Other corporates
Related parties
M SAN Ulaganja d.o.o. HRK 5,000 31 December 2021 - 2,477
Third parties
Castalia projekt d.o.o. HRK 3,600 31 December 2022 889 1,334
Total 889 3,811
Total short-term loans to corporate entities - Company 4,365 8,810
Group
M SAN GRUPA D.O.O.
Related parties
M SAN Ulaganja d.o.o. HRK 5,000 31 December 2021 - 2,477
Third parties
Castalia projekt d.o.o. HRK 3,600 31 December 2022 889 1,334
Total 889 3,811
KIM TEC BIH d.o.o.
Ekupi BIH d.o.o. KM 600 31 December 2022 2,306 -
Total 2,306 -
Total short term loans to corporate entities - Group 3,195 3,811
26. GIVEN LOANS AND DEPOSITS (CONTINUED)
26. GIVEN LOANS AND DEPOSITS (CONTINUED)
Original
currency
Amount Due date
31 December
2021
31 December
2020
Loans to individuals
Company
Other individuals HRK 1,678 30 June 2022 1,537 1,662
Total short-term loans to individuals 1,537 1,662
Group
M SAN GRUPA D.O.O.
Other individuals HRK 1,678 30 June 2022 1,537 1,662
Total 1,537 1,662
KIM TEC BG
Other private loans RSD - 29
Total - 29
PAKOM
Other private loans MKD - 4
Total
- 4
Total amount of loans to individuals
- Group
1,537 1,695
Total amount of loans to individuals - Company 2,255 2,261
Total amount of loans to individuals - Group 2,333 2,337
TOTAL AMOUNT OF LOANS - COMPANY 8,157 12,733
TOTAL AMOUNT OF LOANS - GROUP 7,065 7,843
Loans are granted to subsidiaries, the owner of the Company and companies related to the owner
of the Company. Due to the fact that these are related parties, no security instruments have been
requested for these placements, and the Company’s Management Board believes that the collection
of placements is not questionable.
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 146 M SAN GROUP IN 2021 147
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
27. PREPAID EXPENSES AND ACCRUED INCOME
28. OTHER RECEIVABLES
28. OTHER RECEIVABLES (CONTINUED)
30. SHARE CAPITAL
Interests receivable are disclosed as follows:
The share capital consists of 485,000 business shares, each business share in the nominal amount of
HRK 200.00, which are paid in full in cash.
In December 2021, based on the Merger Agreement, the Company merged the related party M San
Ulaganja d.o.o., and thus additionally acquired 1 business share in the nominal amount of HRK 12,198
thousand. which is paid in full in rights (Note 46).
29. CASH AND CASH EQUIVALENTS
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Accrued income for subsequently approved
discounts
4,374 4,775 1,350 1,774
Accrued uninvoiced income 31 - - -
Accured overdue revenues 72 56 - -
Prepaid expenses 3,181 1,773 337 9
Total 7,658 6,604 1,687 1,783
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Interest receivable 5,600 6,488 5,607 6,527
Receivables acquired by debt acquisition 2,228 748 - -
Receivables on acquired cession agreements - 1,144 - -
Receivables from suppliers regarding returns 471 146 378 36
Other 938 1,489 709 1,316
Total 9,237 10,015 6,694 7,879
GROUP COMPANY
2021 2020 2021 2020
At 1 January 6,604 8,265 1,783 569
Cumulated during the year 28,579 21,126 4,429 2,684
Used during the year (27,965) (22,755) (4,525) (1,450)
Unused amounts reversed 440 (32) - (20)
At 31 December 7,658 6,604 1,687 1,783
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Receivables for interests on loans 5,600 6,517 5,607 6,556
Value adjustment of receivables for
interest
- (29) - (29)
Total 5,600 6,488 5,607 6,527
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Cash in banks 97,668 116,378 65,047 92,672
Petty cash 12 2 - -
Total 97,680 116,380 65,047 92,672
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Nominal value 109,198 97,000 109,198 97,000
Total 109,198 97,000 109,198 97,000
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 148 M SAN GROUP IN 2021 149
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
31. RETAINED EARNINGS
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Retained earnings 238,207 233,415 49,384 93,092
Total 238,207 233,415 49,384 93,092
GROUP COMPANY
At 31 December 2020 233,415 93,092
Merger of a company (note 46) (24,828) (24,828)
Separation of an afliated company (note 46) (33,540) (29,933)
Acquisition of an afliated company (note 46) 16,910
-
Prot for the year 46,250 11,053
At 31 December 2021 238,207 49,384
33. PROVISIONS FOR RISKS
34. LONG-TERM LOANS AND FINANCE LEASE LIABILITIES
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Long-term provisions for risks within the warranty
period
3,369 2,809 1,672 1,072
Provisions for returns 1,087 933 979 933
Total 4,456 3,742 2,651 2,005
GROUP COMPANY
2021 2020 2021 2020
Total nance leases liabilities 8,206 2,325 920 742
Less: current portion of nance lease liabilities (2,961) (963) (263) (279)
Long-term nance lease liabilities 5,245 1,362 657 463
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Total loans from nancial institutions 44.086 143.415 - 107.222
Less: current portion of loans from nancial institutions (12.692) (28.328) - (18.647)
Total long-term loans from nancial institutions 31.394 115.087 - 88.575
Total long-term loans and leases 36.639 116.449 657 89.038
GROUP COMPANY
2021 2020 2021 2020
At 1 January 3,742 4,034 2,006 2,137
Increases 1,199 79 645 -
Decreases (482) (396) - (132)
Exchange rate differences (3) 25 - -
At 31 December 4,456 3,742 2,651 2,005
32. LEGAL RESERVES
Legal reserves in the amount of HRK 9,944 thousand arose due to the merger of M San Ulaganja d.o.o.
(Note 46).
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 150 M SAN GROUP IN 2021 151
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
34. LONG-TERM LOANS AND FINANCE LEASE LIABILITIES (CONTINUED)
35. SHORT-TERM LOANS AND BORROWINGS FROM FINANCIAL INSTITUTIONS
Financial institution
Original
currency
Amount Due date
31 December
2021
31 December
2020
KIM TEC BEOGRAD d.o.o.
ProCredit Bank AD. EUR 4,000 12 October 2026 9,294 20,059
NLB Razvojna banka EUR 1,500 19 June 2022 3,843 7,609
Total 13,137 27,668
KIM TEC BIH d.o.o.
Intesa Sanpaolo Banka d.d. EUR 2,500 28 February 2024 5,816 8,525
Total 5,816 8,525
EKO BOSANSKA POSAVINA d.o.o.
ProCredit Bank d.d. KM 535 18 June 2026 1,902 -
ProCredit Bank d.d. KM 220 18 June 2027 820 -
ProCredit Bank d.d. KM 2,900 13 July 2028 7,732 -
ProCredit Bank d.d. KM 250 19 June 2025 688 -
ProCredit Bank d.d. KM 400 5 April 2027 1,067 -
12,209 -
KIM TEC BIH NEKRETNINE d.o.o.
Intesa Sanpaolo Banka d.d. KM 1,431 11 November 2026 5,409 -
Total 5,409 -
KIM TEC BG NEKRETNINE d.o.o.
ProCredit Bank AD. EUR 1,000 1 November 2026 7,515 -
Total 7,515 -
Financial institution
Original
currency
Amount Due date
31 December
2021
31 December
2020
MSAN GRUPA d.o.o.
Syndicated loan EUR 17,206 15 September 2026 - 107,222
Total - 107,222
Total long-term loans
from nancial institutions
44,086 143,415
Less: Current portion (12,692) (28,328)
Total 31,394 115,087
GROUP COMPANY
31 December
2021
31 December
2021
31 December
2021
31 December
2021
Short-term bank loans 24,214 44,336 - 25,403
Total loans and borrowings 24,214 44,336 - 25,403
Current portion of long-term leases 2,961 963 263 279
Current portion of long-term loans 12,692 28,328 - 18,647
Total 39,867 73,627 263 44,329
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 152 M SAN GROUP IN 2021 153
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
35. SHORT-TERM LOANS AND BORROWINGS FROM FINANCIAL INSTITUTIONS (CONTINUED)
36. LONG-TERM BOND LIABILITIES
37. ADVANCES RECEIVED
Liabilities for short - term loans
GROUP
Financial institutions
Original
currency
Amount Due date
31 December
2021
31 December
2020
KIM TEC BIH d.o.o.
UniCredit Bank Mostar d.d. KM 500 15 June 2022 7,687 1,919
Intesa Sanpaolo Banka d.d. KM 1,800 15 December 2022 7,687 6,937
NLB Tuzlanska banka1 400 000 KM 500 30 June 2022 1,921 1,927
Bosna Bank International d.d. KM 1,800 24 June 2022 6,919 6,937
Total 24,214 17,720
PAKOM KOMPANI d.o.o.
NLB Tutunska banka MKD 52,000 5 February 2021 - 1,213
Total - 1,213
Total short-term borrowings 24,214 44,336
Plus: Current portion of long-term leases 2,961 963
Plus: Current portion of loans from nancial
institutions
12,692 28,328
Total current portion of long-term
borrowings and short-term loans
39,867 73,627
COMPANY
Financial institutions
Original
currency
Amount Due date
31 December
2021
31 December
2020
Addiko banka EUR 707 2 September 2021 - 4,959
Addiko banka EUR 2,700 15 April 2021 - 20,444
Total - 25,403
Plus: Current portion of long-tearm leases 263 279
Plus: Current portion of loans from nancial
institutions
- 18,647
Total current portion of long-term
borrowings and short-term loans
263 44,329
GROUP COMPANY
2021 2020 2021 2020
Long-term bond liabilities 200,000 - 200,000 -
Current portion of non-current Bond payables (20,000) - (20,000) -
Total Long-term bond liabilities 180,000 - 180,000 -
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Advances received from domestic customers 9,734 5,609 5,096 4,218
Advances received from foreign customers 763 289 762 1,897
Total 10,497 5,898 5,858 6,115
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Foreign trade payables 294,353 259,945 266,368 242,988
Domestic trade payables 71,468 69,543 50,798 48,981
Total 365,821 329,488 317,166 291,969
In July 2021, the Company issued corporate bonds in the amount of HRK 200 million at the issue
price of 99.742%, with a coupon of 2.000% per annum with semi-annual interest payments and semi-
annual amortization of maturity in the amount of 5% of the nominal value of the issue and 55% of the
nominal value on final maturit, July 20, 2026. The purpose of these bonds is to refinance the financial
debt of the parent company and to finance the development of its own brand and expand logistics
capacities.
38. TRADE PAYABLES
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 154 M SAN GROUP IN 2021 155
39. TAXES, CONTRIBUTIONS AND SIMILAR PAYABLE
40. FACTORING LIABILITIES
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Some of the suppliers offer modular payment due dates, where the company has the option
of payment in contractual due date period and the option of payment in shorter terms, whereby
receiving certain discounts for early payment. In such options, the company occasionally uses
factoring payments, whereby the costs of factoring for a previously made payment represent a lower
cost than the amount of the casa sconto and thus achieves additional savings.
Change in accured expenses and defered income can be shown as:
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
41. OTHER CURRENT LIABILITIES
42. ACCRUED EXPENSES AND DEFERRED INCOME
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
VAT liabilities 22,489 29,455 21,482 27,353
Liabilities for taxes and contributions from and on salaries 4,595 3,877 1,454 1,231
Customs payable 2,606 1,722 384 209
Liabilities for memberships, contributions and other taxes 430 187 100 68
Total 30,120 35,241 23,420 28,861
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Factoring liabilities 21,141 5,655 8,436 143
Total 21,141 5,655 8,436 143
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Bond interest liabilities 1,783 - 1,783 -
Reserves for accruals unused vacation days 968 - 389 -
Interest loan payables 797 22 752 9
Other 125 379 44 4
Total 3,673 401 2,968 13
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Unbilled invoices 6,276 3,622 3,649 2,083
Accrued income 515 362 377 -
Deferred state subsidy income 937 - - -
Late payment interest income 4 32 - -
Other 132 732 - -
Total 7,864 4,748 4,026 2,083
GROUP COMPANY
2021 2020 2021 2020
At 1 January 4,748 5,450 2,083 2,904
Cumulated during year 114,739 62,138 92,895 44,035
Utilised over year (111,661) (62,287) (91,017) (43,213)
Unused over year 38 (553) 65 (1,643)
At 31 December 7,864 4,748 4,026 2,083
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 156 M SAN GROUP IN 2021 157
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
43. RELATED-PARTY TRANSACTIONS
The receivables and payables of the Company from transactions with its associates and entities
with the same ultimate owner in purchase/sales transactions at 31 December 2021 and 2020 were as
follows:
The table below shows Company’s receivables and payables from transactions with its subsidiaries
in purchase/sales transactions at 31 December 2021 and 2020:
The income and expenses of the Company from purchase/sales transactions with its subsidiaries
during 2021 and 2020 were as follows:
The income and expenses of the Company from purchase/sales transactions with its associates and
entities with the same ultimate owner during 2021 and 2020 were as follows:
43. RELATED-PARTY TRANSACTIONS (CONTINUED)
Receivables Payables
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Kim Tec d.o.o., Beograd 39,767 1,368 (839) (353)
Kim Tec d.o.o., Vitez 19,513 20,316 - (1,758)
Pakom Kompani d.o.e.l., Skopje 1,554 74 - (157)
Kim Tec CG, Podgorica 2,460 147 - -
M San Logistika d.o.o., Zagreb 393 - - -
MR Servis d.o.o., Zagreb 143 1,796 (1,024) -
M San Eko d.o.o., Zagreb 6 8 - -
Kim Tec Nekretnine d.o.o., Beograd 1 - - -
Eko Bosanska Posavina, Derventa 86 - - -
63,923 23,709 (1,863) (2,268)
Receivables Payables
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Ekupi d.o.o., Zagreb 56,560 22,689 (2,726) -
Ask Tec d.o.o., Priština 15,568 17,201 (767) -
MS Industrial Kina 4,114 5,156 (363) 24
Corvus Info d.o.o., Zagreb 1,160 440 - -
Planet IX.d.o.o. Zagreb 913 - - -
PP Orahovica d.d. 299 338 (246) (600)
PPK Valpovo 163 - - (15)
Ventex d.o.o., Rijeka 117 3,023 - -
King ICT d.o.o., Zagreb 41 17,424 (1,267) -
M San Nekrenine d.o.o., Zagreb 45 391 (76) -
Baks grupa d.o.o. 5 - - -
King ICT d.o.e.l., Skopje 3 4 - -
Litus projekt d.o.o. - 17 - -
Pametna energija d.o.o. - 4 - -
Corvus pay d.o.o. Zagreb - 1 (1) -
M San Ulaganja d.o.o., Zagreb - - - -
Aktivis d.o.o., Zagreb - - (25) (25)
Ured za podršku d.o.o., Zagreb - (119) (1,895) (1,914)
78,988 66,569 (7,366) (2,530)
Income / sale Expenses Purchase value of goods
2021 2020 2021 2020 2021 2020
Kim Tec d.o.o., Beograd 296,867 246,839 14,973 13,777 3,185 2,724
Kim Tec d.o.o., Vitez 120,393 105,770 5,394 5,274 1,297 1,085
Pakom Kompani, Skopje 85,276 62,791 2,251 2,405 232 214
Kim Tec CG, Podgorica 47,275 33,399 1,400 1,592 172 359
MR Servis d.o.o. 4,368 6,982 7,063 9,433 1,567 681
M San Logistika d.o.o., Zagreb 1,797 637 33,423 23,658 - -
M San Eko d.o.o., Zagreb 6 10 1 - - -
Kim Tec Nekretnine d.o.o., BG 1 - - - - -
Eko Bosanska Posavina,
Derventa
86 - - - - -
556,069 456,428 64,505 56,139 6,453 5,063
Income / sale Expenses Purchase value of goods
2021 2020 2021 2020 2021 2020
Ekupi d.o.o., Zagreb 303,683 285,758 22,083 18,973 946 1,642
King ICT d.o.o., Zagreb 81,379 126,380 321 533 143 78
Ask Tec d.o.o., Priština 33,996 26,667 2,905 2,150 1,489 326
Ventex d.o.o., Rijeka 6,967 9,389 2,180 52 - -
PP Orahovica d.d. 1,860 483 476 219 - 29
Pametna energija d.o.o. 1,810 6,390 - 24 - -
M San Ulaganja d.o.o., Zagreb 1,205 157 - - - -
Corvus Info d.o.o. 967 499 368 59 - -
Planet IX .d.o.o. Zagreb 843 1,122 - - - -
Ured za podršku d.o.o. 293 371 19,488 19,538 - -
PPK Valpovo d.o.o. 192 27 471 34 - -
M San Nekrenine d.o.o., Zagreb 174 268 4,169 4,179 - 9
Aktivis d.o.o., Zagreb 117 65 20 20 - -
Corvus pay d.o.o. Zagreb 12 14 5 - - -
Baks grupa d.o.o. 4 - - - - -
King ICT d.o.e.l., Skopje 3 4 - - - -
Kim Tec, Ljubljana - - - 15,939 - -
MS Industrial Kina - - 3,162 2,965 65,206 33,092
King ICT d.o.o., BiH - - 3 - - -
433,505 457,594 55,651 64,685 67,784 35,176
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 158 M SAN GROUP IN 2021 159
43. RELATED-PARTY TRANSACTIONS (CONTINUED)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
The table below presents receivables and revenue of the Company from loan transactions with its
subsidiaries at 31 December 2021 and 2020:
The table below presents receivables and revenue of the Company from loan transactions with its
associates and entities with the same ultimate owner at 31 December 2021 and 2020:
The table below presents the liabilities and expenses that the Company had with its associates and
entities with the same ultimate owner from loan transactions as at 31 December 2021 and 2020:
Management remuneration through the year were as it follows:
The Group manages its capital to ensure that it will be able to continue as a going concern, while
maximising the return to stakeholders through the optimisation of the debt and equity balance.
The Group’s capital consists of debt, which includes loans and borrowings disclosed in Notes 34 and
35 and issued corporate bonds disclosed in Note 36, less cash and cash equivalents (the so-called
net debt) and equity, which comprises share capital, reserves and retained earnings as reported in
the statement of changes in equity.
Gearing ratio at the end of the reporting period:
Debt consists of long-term loansand finance lease payables and short-term loans from financial
institutions.
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
43. RELATED-PARTY TRANSACTIONS (CONTINUED)
44. FINANCIAL INSTRUMENTS
44.1. CAPITAL RISK MANAGEMENT
44.1.1. GEARING RATIO
Receivables Income
31 December
2021
31 December
2020
31 December
2021
31 December
2020
M San Eko d.o.o., Zagreb 3,234 2,631 89 81
MR Servis d.o.o., Zagreb 251 670 73 201
M San Logistika d.o.o., Zagreb - 1,736 101 12
3,485 5,037 263 294
Receivables Income
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Baks Grupa d.o.o. 22,728 23,112 549 626
M San Ulaganja d.o.o. - 2,477 176 324
Litus Projekt d.o.o. - 777 16 19
M San Nekrenine d.o.o. - 327 - 302
Ured za podršku d.o.o., Zagreb - - 9 -
22.728 26.693 750 1.271
Receivables Income
31 December
2021
31 December
2020
31 December
2021
31 December
2020
PPK Valpovo d.d 474 3 471 3
M San Nekrenine d.o.o. 266 - - -
PP Orahovica d.o.o. 12 2 9 2
King ICT d.o.o., Zagreb - - 58 218
MS Industrial Kina - - 5 -
Pametna energija d.o.o., Zagreb - 38 - 7
752 43 543 230
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Salaries 7,926 6,854 4,147 4,020
Total 7,926 6,854 4,147 4,020
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Debt 276,506 190,076 200,920 133,367
Less: cash in banks and petty cash (97,680) (116,380) (65,047) (92,672)
178,826 73,696 135,873 40,695
Equity 379,444 331,460 174,729 196,295
Gearing ratio
47.13% 22.23% 77.76% 20.73%
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 160 M SAN GROUP IN 2021 161
44. FINANCIAL INSTRUMENTS (CONTINUED)
44.1. CAPITAL RISK MANAGEMENT (CONTINUED)
44.2. FOREIGN CURRENCY RISK MANAGEMENT
44.1.2. CATEGORIES OF FINANCIAL INSTRUMENTS
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
The Group and the Company are exposed to the following risks arising from financial instruments:
The Group and the Company undertakes certain transactions denominated in foreign currencies.
Hence, exposures to exchange rate fluctuations arise.
The carrying amounts of the Group’s foreign-currency denominated monetary assets and liabilities
at the reporting date are provided in the table below:
The following table analyzes the group’s sensitivity to an increase and decrease in the kuna exchange
rate of 10% against relevant foreign currencies. A sensitivity rate of 10% is the rate used in internal
reports to key executives on currency risk and represents management’s assessment of realistically
possible changes in exchange rates. The sensitivity analysis includes only open monetary items in
foreign currency and it recalculates items adjusted for a 10% change in exchange rates. The sensitivity
analysis includes external loans as well as loans to foreign entities of the group that are denominated
in a currency other than the currency of the borrower or lender. A positive number indicates an
increase in profit and other principal if the value of the kuna increases by 10% against the currency in
question. In the event of a 10% fall in the value of the kuna against the currency in question, the impact
on profit and other principal would be the same, but opposite, ie the amounts in the table would be
negative.
Credit risk is the risk of default by counterparty in settling its liability or contractual obligations to
the Company and the Group, as a result of which the Group and the Company may incur financial
losses. The Group and the Company have adopted procedures they apply in transacting with their
customers and, where possible, they obtain payment security instruments to protect themselves
from potential financial and default risks.
Trade receivables are continuously monitored so as to identify any potential risk of default and take
appropriate measures. The Group and the Company monitor regularly their credit exposures to
customers and revise the risk assessment at least once a year. The Group and the Company operate
with a large number of customers from various industries and of various size as well as individuals
with a specific type of credit risk. The Group and the Company have developed separate procedures
for each of the groups of customers in order to ensure that credit risk is adequately managed.
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
44. FINANCIAL INSTRUMENTS (CONTINUED)
44.2.1. CURRENCY RISK SENSITIVITY ANALYSIS
44.3. CREDIT RISK MANAGEMENT
GROUP COMPANY
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Financial assets
Cash and cash equivalents 97,680 116,380 65,047 92,672
Loans and receivables 397,057 346,577 284,978 232,913
Total nancial assets 494,737 462,957 350,025 325,585
Financial liabilities
Bank loans 68,300 187,751 - 132,625
Korporativne obveznice 200,000 - 200,000 -
Other nancial liabilities 8,206 2,325 920 742
Total nancial liabilities 276,506 190,076 200,920 133,367
GROUP Assets Liabilities Difference
31 December
2021
31 December
2020
31 December
2021
31 December
2020
31 December
2021
31 December
2020
EUR 48,488 37,189 (301,591) (387,931) (253,103) (350,742)
USD 44,669 35,326 (71,335) (88,841) (26,666) (53,515)
COMPANY Assets Liabilities Difference
31.12.2021. 31.12.2020. 31.12.2021. 31.12.2020. 31.12.2021. 31.12.2020.
EUR 75,719 48,021 (255,209) (342,887) (179,490) (294,866)
USD 63,551 36,407 (67,005) (86,820) (3,454) (50,413)
GROUP EUR impact
2021 2020 2021 2020
Prot/ (loss) (25,310) (35,074) (2,667) (5,352)
COMPANY EUR impact
2021 2020 2021 2020
Prot/ (loss) (17,949) (29,487) (345) (5,041)
USD impact
USD impact
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 162 M SAN GROUP IN 2021 163
44. FINANCIAL INSTRUMENTS (CONTINUED)
44.3. CREDIT RISK MANAGEMENT (CONTINUED)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Presented in the table below are the sales revenues of the Group and the Company from the top ten
customers at the end of the reporting period.
Since the Company and the Group use both fixed and variable rate loans, they are exposed to the
interest rate risk. Most of the Company’s and Group’s loans bear interest at a fixed rate.
Interest rate sensitivity analysis
The sensitivity analyses below has been determined based on the exposure to risk of the change of
interest rates at the date of the statement of financial position. For variable rate liabilities, the analysis
is prepared assuming the amount of liability outstanding at the date of the statement of financial
position was outstanding for the whole year. A 50 basis point increase or decrease is used in internal
reporting on interest rate risk and represents management’s assessment of the reasonably possible
change in interest rates.
If interest rates had been 50 basis points higher/lower and all other variables were held constant, the
interest expense of the Company as of 31 December 2021 would have changed by HRK 0 thousand (31
December 2020: HRK 536 thousand), and the Group as of 31 December 2021 would have changed by
HRK 84 thousand (31 December 2020: HRK 636 thousand). Interest rates on issued corporate bonds
and loans are not taken into account because they are instruments with fixed interest rates.
Ultimate responsibility for liquidity risk management rests with the board of directors, which has
built an appropriate liquidity risk management framework for the management of the Group’s short,
medium and long-term funding and liquidity management requirements.
The following tables detail the Group’s remaining contractual maturity for its non-derivative financial
liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities
based on the earliest date on which the Group and the Company can be required to pay. Disclosures
of non-derivative financial assets and liabilities are necessary for understanding the manner in which
the Group manages its liquidity risk, as it is managed on the basis of net amounts of financial assets
and liabilities.
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
44. FINANCIAL INSTRUMENTS (CONTINUED)
44.4. INTEREST RISK MANAGEMENT
44.5. LIQUIDITY RISK MANAGEMENT
44.5.1. LIQUIDITY AND INTEREST RATE RISK TABLES
GROUP COMPANY
Customer Domicile country
31 December
2021
31 December
2020
31 December
2021
31 December
2020
Ekupi d.o.o. CROATIA 310,438 291,771 303,683 285,760
KING ICT d.o.o. CROATIA 84,204 130,181 81,430 126,476
S&T Hrvatska d.o.o. CROATIA 71,007 39,496 71,007 39,492
Links d.o.o. CROATIA 48,159 56,923 48,159 56,922
Ask Tec d.o.o. KOSOVO 43,106 32,178 34,019 26,667
Coral Computers d.o.o. SERBIA 39,276 32,490 - -
JP Hrvatske telekomunikacije d.d.
Mostar
BOSNIA AND
HERZEGOVINA
34,865 32,988 - -
Mikronis d.o.o. CROATIA 31,040 30,624 31,037 30,826
GIGATRON d.o.o. SERBIA 30,621 - - -
Nordecon Oy FINLAND 29,100 5,233 29,100 5,233
Kim Tec d.o.o. Beograd SERBIA - - 297,001 246,851
Kim Tec d.o.o. Vitez
BOSNIA AND
HERZEGOVINA
- -
120,427 105,714
Pakom Kompani Skopje MACEDONIA - - 85,276 62,824
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 164 M SAN GROUP IN 2021 165
44 FINANCIAL INSTRUMENTS (CONTINUED)
44.5. LIQUIDITY RISK MANAGEMENT (CONTINUED)
44.5.1. LIQUIDITY AND INTEREST RATE RISK TABLES (CONTINUED)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
44 FINANCIAL INSTRUMENTS (CONTINUED)
44.5. LIQUIDITY RISK MANAGEMENT (CONTINUED)
44.5.1. LIQUIDITY AND INTEREST RATE RISK TABLES (CONTINUED)
GROUP
Up to 1
month
1 to 3
months
3 months
to 1 year
1 to 5
years
After 5 year Total
31 December 2021
Assets
Non-interest bearing 466,224 - - 127 - 466,351
Interest bearing instruments - - 25,366 173 - 25,539
Total assets 466,224 - 25,366 300 - 491,890
Liabilities
Non-interest bearing 383,311 - - - - 383,311
Finance lease liabilities 247 494 2,837 6,391 - 8,207
Interest bearing instruments 11,058 11,723 34,125 211,394 - 268,300
Total liabilities 394,616 12,217 36,962 217,785 - 661,580
Net asset / (liabilities) 71,608 (12,217) (11,596) (217,485) - (169,690)
Up to 1
month
1 to 3
months
3 months
to 1 year
1 to 5 years
After 5
year
Total
31 December 2020
Assets
Non-interest bearing 435,995 - - 127 - 436,122
Interest bearing instruments - - 7,843 18,992 - 26,835
Total assets 435,995 - 7,843 19,119 - 462,957
Liabilities
Non-interest bearing 341,047 - - - - 341,047
Finance lease liabilities 80 161 722 1,362 - 2,325
Interest bearing instruments 2,361 4,721 65,582 97,955 17,132 187,751
Total liabilities
343,488 4,882 66,304 99,317 17,132 531,123
Net asset / (liabilities) 92,507 (4,882) (58,641) (80,198) (17,132) (68,166)
COMPANY
Up to 1
month
1 to 3 months
3 months
to 1 year
1 to 5 years
After 5
year
Total
31 December 2021
Assets
Non-interest bearing 320,591 - - 127 - 320,718
Interest bearing instruments - - 26,457 - - 26,457
Total 320,591 - 26,457 127 - 347,175
Liabilities -
Non-interest bearing 325,433 - - - - 325,433
Finance lease liabilities 22 44 197 657 - 920
Interest bearing instruments 10,000 - 10,000 180,000 - 200,000
Total 335,455 44 10,197 180,657 - 526,353
Net asset / (liabilities) (14,864) (44) 16,260 (180,530) - (179,178)
COMPANY
Up to 1
month
1 to 3
months
3 months
to 1 year
1 to 5
years
After 5
year
Total
31 December 2020
Assets
Non-interest bearing 293,862 - - 127 - 293,989
Interest bearing instruments - - 12,733 18,863 - 31,596
Total 293,862 - 12,733 18,990 - 325,585
Liabilities
Non-interest bearing 299,961 - - - - 299,961
Finance lease liabilities 23 47 209 463 - 742
Interest bearing instruments 1,554 3,108 39,388 74,589 13,986 132,625
Total 301,538 3,154 39,598 75,052 13,986 433,328
Net asset / (liabilities) (7,676) (3,154) (26,865) (56,062) (13,986) (107,743)
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 166 M SAN GROUP IN 2021 167
44. FINANCIAL INSTRUMENTS (CONTINUED)
44.5. LIQUIDITY RISK MANAGEMENT (CONTINUED)
44.5.2. CHANGES IN LIABILITIES ARISING FROM FINANCIAL ACTIVITIES
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
The fair values of financial assets and financial liabilities are determined as follows:
• the fair value of financial assets and financial liabilities with standard terms and conditions
and traded on active liquid markets is determined with reference to quoted market prices;
• the fair value of other financial assets and financial liabilities is determined in accordance
with generally accepted pricing models based on discounted cash flow analysis using prices
from observable current market transactions and dealer quotes for similar instruments;
As at 31 December 2021, reported amounts of cash, short-term deposits, receivables, short-term liabilities,
accrued expenses, short-term loans and other financial instruments correspond to their market value,
due to the short-term nature of these assets and liabilities.
The following table provides an analysis of financial instruments measured subsequently at fair value,
grouped into three groups depending on the availability of fair value indicators:
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets
for identical assets or liabilities,
Level 2 fair value measurements are those derived from inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived
from prices); and
Level 3 fair value measurements are those derived from valuation techniques that include inputs for the
asset or liability that are not based on observable market data.
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
44. FINANCIAL INSTRUMENTS (CONTINUED)
44.7. MARKET RISK
45. CONRACTUAL AND CONTINGENT LIABILITIES
Market risk is the risk that changes in market prices, exchange rates and interest rates will affect
the income, investments or financial instruments of the Company. The objective of market risk
management is to maintain the market risk exposure within acceptable limits, while optimising the
result.
With the onset of the COVID-19 pandemic, supply problems arose with suppliers, caused by
production difficulties, a lack of key components, and insufficient transportation capacity. The Group
has mitigated these market risks through contracts with several leading manufacturers for key
product groups and the timely provision of sufficient quantities of key components required for the
production of its own brands.
The Group and the Company lease business premises, offices, warehouses and vehicles. The duration
of the lease contracts is up to one year. The most significant lease obligations are operating leases
of business premises and warehouses.
Future liabilities are presented at the cumulative level for the entire contract duration for contracts
with a maturity of more than one year. In the current business year, the Group and the Company
changed the policy of contracting the lease of warehouse and vehicle business premises from
several years period to one year period.
As at 31 December of the current year the Company ordered merchandises in the amount of HRK
59,004 thousand (2020: HRK 56,158 thousand) whose recognition was not met as of year end date.
44.6. FAIR VALUE OF FINANCIAL INSTRUMENTS
Short-term
loan liabiities
Long-
term loan
liabilities
Short term-
term bond
issuance fees
Long-term
bond issuance
fees
Short-
term lease
liabilities
Long-term
lease
liabilities
Total
1 January 2021 72,664 115,087 - - 963 1,362 190,076
Cash ow (47,628) (82,562) - 200,000 (1,622) (81) 68,107
Acquisition of an
afliated company
(note 46)
1,093 10,335 - - 1,491 2,971 15,890
Increases, modications
and termination of
leases
- - - - 277 2,821 3,098
Curret portion 10,905 (10,905) 20,000 (20,000) 1,854 (1,854) -
Exchange rate
differences
(128) (561) - - (2) 26 (665)
31 December 2021 36,906 31,394 20,000 180,000 2,961 5,245 276,506
GROUP COMPANY
2021 2020 2021 2020
Within one year 18,619 15,391 3,776 3,808
1-5 years 648 590 - -
After 5 years - - - -
Total 19,267 15,981 3,776 3,808
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 168 M SAN GROUP IN 2021 169
During October 2020, the Group recapitalized the company EKO Bosanska Posavina in the amount of
BAM 5,000 thousand, and acquired a ownership of 36.83%.
46. BUSINESS COMBINATIONS AND DIVESTMENTS
46.1. BUSINESS COMBINATIONS AND DIVESTMENTS IN 2020
A. EKO BOSANSKA POSAVINA- ACQUISITION OF AN AFFILIATED COMPANY
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
At the end of September 2020, the company purchased the shares of MPI Modriča from the affiliated
company Kim Tec Vitez d.o.o. on the basis of a share purchase agreement through block transactions.
with a nominal value of HRK 29,734 thousand and thus acquired a 100% share in ownership and voting
rights. The Group did not have any effects from the transaction as the acquired company was part of
the group even before the transaction.
During 2020, the Group and the Company implemented a strategic disinvestment program in
agriculture. Consequently, in July 2020, the Group sold its shares in the associated companies
Agropormet Grahovo, Poljoprivrednik Odžak, Poljoprivrednik Glamoč and MP Energija to the affiliated
company King ICT d.o.o. from Zagreb.
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
46. BUSINESS COMBINATIONS AND DIVESTMENTS (CONTINUED)
46.1. BUSINESS COMBINATIONS AND DIVESTMENTS IN 2020 (CONTINUED)
D. POLJOPRIVREDNIK D.O.O. DERVENTA- SALE OF SUBSIDIARY
At the end of December 2020, the company sold its subsidiary Poljoprivrednik d.o.o. Derventa based
on the contract of sale to the affiliated company King ICT d.o.o. Zagreb. The agreed consideration for
the transfer of business shares was determined in the amount of HRK 22,991 thousand.
Carrying value of net assets:
The Company did not have the effect of sale of subsidiaries and associated companies, given that the
agreed consideration for the transfer of business shares is stated in exact amount as the Company
bought shares from the subsidiary Kim tec Vitez d.o.o. The total value of the bought shares amounted
to HRK 37,536 thousand and and this amount was selling price towards related company KING ICT
d.o.o., Zagreb.
Property, plant and equipment 64,650
Inventories 7,267
Trade receivables 12,218
Cash and cash equivalents 970
Other current assets 755
Total Assets 85,860
Non-current liabilities (15,072)
Current liabilities (29,726)
Total Liabilities (44,798)
Net assets 41,062
Group share in net assets of the acquired company 15,123
Cash consideration 19,268
Carrying values of acquired asset (15,123)
Total
Agropromet
Grahovo
Poljoprivrednik
Odžak
Poljoprivrednik
Glamoč
MP Energija
Cash 14,545 3,239 2,905 3,983 4,418
Investing in associated
company
(17,383) (3,696) (3,441) (4,625) (5,620)
Loss from sale (2,838) (457) (536) (642) (1,202)
Fee received for the sale of subsidiary:
Cash 22,991
Carrying value of sold net assets of the group (21,411)
Gain from sale of the associated company 1,580
Property, plant and equipment 19,013
Land 1,600
Goodwill 1,462
Intangible assets 26
Inventories 26,301
Trade receivables 8,124
Cash and cash equivalents 133
Other current assets 302
Total Assets 56,961
Non-current liabilities (7,833)
Current liabilities (27,717)
Total Liabilities (35,550)
Carrying value of net assets 21,411
B. MPI MODRIČA – ACQUISITION OF AN ADDITIONAL SHARE IN OWNERSHIP
C. SALE OF INVESTMENT IN ASSOCIATES (AGRICULTURE SEGMENT)
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 170 M SAN GROUP IN 2021 171
During 2021, the Company and the Group decided to disinvest the real estate segment from their
portfolio. The intention of the above is to separate the real estate business of the group into a separate
group (the transfer will be realized in 2022). Kim Tec BG d.o.o., subisidiary of Company, on October 6,
2021, based on the division agreement, separated the business segment of real estate in such a way
that the relevant part of the assets, liabilities and capital was transferred to the newly established
company - Kim Tec Neketnine BG d.o.o. The same transaction was carried out on the subsidiary Kim
Tec d.o.o., Vitez, where the newly established company Kim Tec Nekretnine d.o.o. became subisidiary
of the same. The separation of the mentioned units was realized by carrying values and these
transactions did not have an impact on the financial reporting of the company and the group.
As the Company is the sole owner of the subsidiary Kim Tec BG d.o.o., the 100% of owner ofKim Tec
Nekretnine BG.d.o.o. is M SAN GRUPA d.o.o.
B. ESTABLISHMENT OF AN ENTITY ZELENA AGENDA 1.0 D.O.O.
In November 2021, the company further founded the company Zelena Agenda 1.0 d.o.o. by payment
in cash, and thus acquired a 100% share in ownership and voting rights. The main activity of the
company is the design of solar systems and consulting in business and management.
C. SEPARATION OF AN SUBSIDIARY
On November 25, 2021, based on the Division Agreement, the Company separated the subsidiary MPI
Modriča by transferring it to Agro Invest Grupa d.o.o. (related party of the group). The company made
the transfer per carrying values and it also had no effects on the result of operations in 2021.
46. BUSINESS COMBINATIONS AND DIVESTMENTS (CONTINUED)
46.2 BUSINESS COMBINATIONS AND DIVESTMENTS IN 2021 (CONTINUED)
A. SEPARATION OF THE REAL ESTATE SEGMENT FROM SUBSIDIARIES INTO SEPARATE ENTITIES WITHIN
GROUP
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Overview of the separated segment
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
46. BUSINESS COMBINATIONS AND DIVESTMENTS (CONTINUED)
46.2 BUSINESS COMBINATIONS AND DIVESTMENTS IN 2021 (CONTINUED)
Furthermore, in December 2021, the Company under the merger agreement of 28 December 2021.
merged with the associated company M San Ulaganja d.o.o. The balance sheet of the merged
company is on the mentioned date was as follows:
The value of investments in the subsidiary MPI Modriča (HRK 29,733 thousand) increased by cash in
the amount of HRK 200 thousand was separated from the balance sheet of the Company.
D. MERGER OF A COMPANY
Carrying value
2021
Property, plant and equipment 23,642
Trade receivables 83
Cash and cash equivalents 160
Total assets 23,885
Non-current liabilities 7,514
Net assets of division 16,371
Overview of the net assets of the separate entity MPI Modriča
2021
Property, plant and equipment 31,561
Intangible assets 864
Other long-term assets 49
Inventories 90
Trade receivables 537
Cash and cash equivalents 601
Other current asset 54
Total assets 33,756
Current liabilities (216)
Total Liabilities (216)
Carrying value of net assets 33,540
28 December
2021
Intangible assets
1,376
Property, plant and equipment 433
Investing in a subsidiary 2,129
Cash and cash equivalents 10
Other current assets 404
Total assets 4,352
Non-current liabilities (218)
Current liabilities (6,820)
Total Liabilities (7,038)
Carrying value of net assets (2,686)
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 172 M SAN GROUP IN 2021 173
Besides tangible assets, the Company merged the ownership in the Corvus Info d.o.o. (subsidiary of
merged company) and thus acquired ownership and voting rights in 100%.
E. ACQUISITION OF THE AFFILIETED COMPANY EKO BOSANSAK POSAVINA
In November 2021, the Group additionally recapitalized this associated company, by land input in the
amount of HRK 49,575 thousand (November 2021; ownership of 60.08%), and by paying in cash in the
amount of HRK 7,245 thousand (December 2021; ownership of 82%). The total investment amount is
HRK 76,038 thousand. The control over the mentioned company was acquired on 1.11.2021. and from
that moment the same was consolidated into the group. As this is a transaction under common
control, the company recognized the effects of the acquisition of control as per carrying values. The
Group attributed the result of the associate until 31 October 2021 in the amount of HRK 1,211 thousand
(Note 16).
The carrying amount of the acquired company at the date of acquisition is shown in the following
presentation:
*Company had investment in associate in amount of HRK 19,218 thousand (until 31.10.2021). After
investing land value into equity of associate into equity of Eko Bosanska Posavina as of 1.11.2021
(when company obtained control), the amount of investment in subsidiary amounted to HRK
68,793 thousand, which represents the total value of land and previous investment in associate.
The Company, in December 2021, invested additionally HRK 7,245 thousand and by this increased
its ownership from 60% to 82%. Mentioned portion was bought from private person (previous
shareholder in entity).
46. BUSINESS COMBINATIONS AND DIVESTMENTS (CONTINUED)
46.2 BUSINESS COMBINATIONS AND DIVESTMENTS IN 2021 (CONTINUED)
D. MERGER OF A COMPANY(CONTINUED)
46. BUSINESS COMBINATIONS AND DIVESTMENTS (CONTINUED)
46.2 BUSINESS COMBINATIONS AND DIVESTMENTS IN 2021 (CONTINUED)
E. ACQUISITION OF THE AFFILIETED COMPANY EKO BOSANSAK POSAVINA (CONTINUED)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
47. SUBSEQUENT EVENTS
48. AUDIT FEES
In January 2022, the company acquired the company KIM TEC Nekretnine d.o.o. Vitez, BiH from the
subsidiary KIM TEC d.o.o. Vitez, BIH.
In March 2022, the Company submitted an application to the Commercial Court in Zagreb for
the implementation of the separation procedure so the part of investments and net assets of the
Company and the Group related to subsidiaries (KIM TEC Nekretnine d.o.o. Vitez, BiH and Kim Tec
Nekretnine d.o.o. Belgrade, Serbia) transfers to related companies Ribnjak Jasinje d.o.o. and Ribnjak
Narta d.o.o. The Company has recognized the need to implement these changes in order to optimize
its operations and limit its business decisions and transactions to the part of the group that falls under
its area of responsibility. The total amount of transferred net assets amounts to HRK 39,680 thousand.
The group assessed the potential impact of the conflict in Ukraine. The Company considers this event
to be an event that does not adjust after the reporting period. Although the quantitative impact
cannot be assessed with sufficient certainty at this time, the Group has analyzed the possible impact
of changing micro and macroeconomic conditions on the Group’s performance, financial position
and operations and has not identified any question of business continuity or any significant financial
impact. the position or operations of the Group in view of this situation at the date of the financial
statements.
Fees for the statutory audit of the Group’s financial statements amounted to HRK 985.6 thousand
(2020: HRK 928.5 thousand), while fees for other services amounted to HRK 90 thousand. The other
services refer to permitted tax services in accordance with local regulations.
1 November
2021
Property, plant and equipment 120,403
Inventories 6,110
Trade receivables 9,353
Cash and cash equivalents 854
Other current asset 317
Total assets 137,037
Non-current liabilities (16,644)
Current liabilities (8,062)
Total Liabilities (24,706)
Carrying value of net assets 112,331
Effects of acquisition of control (Group)
44,843
Non controling share of net assets (39,92%)
68,793*
Investments M SAN Group d.o.o. (112,331)
Net assets of acquired company 1,305
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 174 M SAN GROUP IN 2021 175
Zagreb, 25 April 2022
Pursuant to the provisions of Articles 300a and 300b of the Companies Act, the Management Board
of the Company adopted next
D E C I S I O N
I. The Annual Report of the Company for 2021 is determined according to the text attached to this
Decision.
II. The consolidated and separate Annual Financial Report for 2021 are determined, which consists of:
- statement of financial position (balance sheet),
- profit and loss account,
- report on other comprehensive income,
- cash flow statement,
- report on changes in equity,
- notes to the financial statements,
according to the text attached to this Decision and are an integral part of the report referred to in item
I of this Decision.
III. The Audit Report for 2021 is an integral part of the report referred to in item I of this Decision.
IV. The Annual Report on the Situation of the Company and Associated Companies for 2021 is
determined (management report), together with the Statement on the Application of the Code of
Corporate Governance which forms an integral part of the report referred to in item I of this Decision.
V. Annual report of the Company for 2021, ie reports from item II. to IV. these decisions are submitted
to the Supervisory Board for examination.
VI. This Decision shall enter into force on the day of its adoption.
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2021
(all amounts are expressed in thousands of kuna)
49. APPROVAL OF THE FINANCIAL STATEMENTS
These financial statements, set out on pages 69 to 174, were approved by the Management Board
and authorised for issue on 25 April 2022
Miroslav Huzjak
Chairman of the Management Board
Irena Langer-Breznik
Member of the Management Board
Goran Kotlarević
Member of the Management Board
Žarko Kruljac
Member of the Management Board
Slaven Stipančić
Member of the Management Board
Miroslav Huzjak
Chairman of
the Management Board
Irena Langer-Breznik
Member of
the Management Board
Goran Kotlarević
Member of
the Management Board
Žarko Kruljac
Member of
the Management Board
Slaven Stipančić
Member of
the Management Board
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 176 M SAN GROUP IN 2021 177
Zagreb, 29 April 2022
Pursuant to the provisions of Article 300.d, and in accordance with the provisions of Article 300.c of the
Companies Act, after the examination of the submitted relevant reports of the Management Board,
the Supervisory Bord, The Society at its meeting held on April 29, 2022 adopted the following
D E C I S I O N
I. Consent is given to the Annual Report of the Company for 2021 according to the text attached to
this Decision.
II. Consent is given to:
- consolidated and separate Annual Financial Report for 2021, consisting of:
statement of financial position (balance sheet), income statement, statement of other
comprehensive income, cash flow statement, statement of changes
capital, notes to the financial statements,
- Audit Report for 2021,
- Annual report on the state of the Company and its affiliates for 2021 (management report), together
with a statement on the application of the corporate governance code, according to the text attached
to this Decision, which reports are an integral part of the report referred to in point I. of this Decision.
III. Pursuant to the provisions of Article 300d of the Companies Act by giving consent from point II. of
this Decision, unconsolidated and consolidated Annual Financial Statements of the Company for 2021
was determined by the Management Board and the Supervisory Board of the Company.
IV. This Decision shall enter into force on the day of its adoption.
Stipo Matić
the Chairman of the Supervisory Board
Zagreb, 25 April 2022
Pursuant to the provisions of Articles 275 and 300.b of the Companies Act, the Management Board of
the Company passed next
D E C I S I O N
I. The proposal of the Decision on use, which is sent to the General Assembly for adoption, is determined,
which reads:
I. It is determined that the total realized prot after tax for 2021 amounts to HRK 11,053,309.92.
II. The total realized prot for 2021, after taxation, in the amount of HRK 11,053,309.92, is allocated to the
retained earnings of the Company.
II. This Decision shall enter into force upon obtaining the consent of the Supervisory Board.
Miroslav Huzjak
Chairman of
the Management Board
Irena Langer-Breznik
Member of
the Management Board
Goran Kotlarević
Member of
the Management Board
Žarko Kruljac
Member of
the Management Board
Slaven Stipančić
Member of
the Management Board
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 M SAN GRUPA ANNUAL REPORT 2021 178 M SAN GROUP IN 2021 179
www.msan.hr
M San Grupa d.o.o.
Buzinski prilaz 10,
10000 Zagreb,
Republic of Croatia
Zagreb, 29 April 2022
Pursuant to the provisions of Article 300.c of the Companies Act, after an examination submitted the
proposal of the Decision in the use of profit, the Supervisory Board of the Company at its meeting on
April 29, 2022, adopted the following
D E C I S I O N
I. Consent is given to the proposal of the Decision on use which is sent to the General Assembly on
adoption, which reads:
I. It is determined that the total realized profit after tax for 2021 amounts to HRK 11,053,309.92.
II. The total realized profit for 2021, after taxation, in the amount of HRK 11,053,309.92, distributes
to the retained earnings of the Company.
II. This Decision shall enter into force on the day of its adoption.
Stipo Matić
the Chairman of the Supervisory Board
M SAN GROUP IN 2021 M SAN GRUPA ANNUAL REPORT 2021 180