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M SAN GRUPA ANNUAL REPORT 2024. 1
ANNUAL
Report
2024
This version of the Consolidated financial statements is a translation from the original, which was prepared in the Croatian language. All possible care
has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information,
views or opinions, the original language version of the Consolidated financial statements takes precedence over translation.

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M SAN GRUPA ANNUAL REPORT 2024. 2
4
6
8
22
34
46
60
66
69
79
84
89

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4
6
8
22
34
46
60
66
69
79
84
89
OVERVIEW OF KEY INDICATORS IN 2024
A COMMENT BY CHAIRPERSON OF THE MANAGEMENT BOARD
ABOUT US
CORPORATE GOVERNANCE
OPERATING BUSINESS
FINANCIAL OPERATIONS OF THE GROUP
OPERATING RISKS
PLANS AND EXPECTATIONS FOR 2025
AUDITOR’S REPORT AND FINANCIAL STATEMENTS
SUSTAINABILITY REPORT
CONTENTS
4
6
8
18
26
32
44
50
52
147

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M SAN GRUPA ANNUAL REPORT 2024. 4
4
502.0 million
11.5 million
8.5 million
3.9 million
+6.4%
+5.0%
+3.5%
(15.9%)
OVERVIEW OF KEY INDICATORS IN 2024
GROUP IN 2024
BUSINESS REVENUE*
(IN EURO)
CHANGE
(COMPARED TO 2023)
EBITDA*
(IN EURO)
CHANGE
(COMPARED TO 2023)
EBIT*
(IN EURO)
CHANGE
(COMPARED TO 2023)
NET PROFIT*
(IN EURO)
CHANGE
(COMPARED TO 2023)
*The financial measures used are not defined by International Financial Reporting Standards. For more details on the Alternative
Performance Indicators used, see Table 5. Alternative Performance Measures

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M SAN GRUPA ANNUAL REPORT 2024. 5
342.8 million +1.9%
4.8 million
(15.2%)
3.9 million
(10.3%)
1.3 million (8.1%)
COMPANY IN 2024
OVERVIEW OF KEY INDICATORS IN 2024
BUSINESS REVENUE*
(IN EURO)
CHANGE
(COMPARED TO 2023)
EBITDA*
(IN EURO)
CHANGE
(COMPARED TO 2023)
EBIT*
(IN EURO)
CHANGE
(COMPARED TO 2023)
NET PROFIT*
(IN EURO)
CHANGE
(COMPARED TO 2023)
*The financial measures used are not defined by International Financial Reporting Standards. For more details on the Alternative
Performance Indicators used, see Table 5. Alternative Performance Measures

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M SAN GRUPA ANNUAL REPORT 2024. 6
A COMMENT BY IRENA LANGER-BREZNIK
CHAIRPERSON OF THE MANAGEMENT BOARD
In 2024, M SAN Grupa continued to operate successfully despite
a challenging global environment, once again demonstrating its
resilience, strategic focus and adaptability. Thanks to the focus
on targets and operational excellence of the entire Group, we
achieved growth in total operating revenue of 6.4% to EUR 502.0
million, while EBITDA increased by 5.0% compared to the previous
year.
The most important contribution to this growth came from the
private brands segment, whose share in the total revenue rose to
27.8%. Within this segment, VIVAX, our strategic, most important
own brand, stands out, having become one of the most important
factors in the stability and long-term sustainability of the business
of M SAN Grupa. With its growth and the strengthening of its
presence in all distribution channels, VIVAX has confirmed its
market relevance and secured a strong position in the context of independence
from external suppliers and macroeconomic fluctuations. In 2024, we further
strengthened VIVAX’s position as a major brand in all the markets in which we
operate, with a focus on export markets.
In the first half of the year, we focused on internal reorganisation with the aim of
maximising the potential of the individual business divisions. Particular attention
was paid to operational efficiency and agility, which is essential for increasing
the satisfaction of our business partners, employees and end consumers, but
also for maintaining long-term competitiveness and for sustainable growth and
development. In this context, one of the most important strategic steps was
the strengthening of logistics capacities – in North Macedonia, capacities were
expanded by an additional 10,000 m², thereby strengthening the most important
logistics centre for Macedonia, Kosovo and the countries of the Southern Balkans.
At the same time, an investment cycle for the construction of a new production
and logistics complex was launched in Rijeka. Both investments are being made in
cooperation with companies that have a common ultimate owner and are active
in the field of property management.

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M SAN GRUPA ANNUAL REPORT 2024. 7
Within the Group, all key business areas made a strong contribution to the overall result:
• The Enterprise division continued its growth as the leading regional VAD distributor and achieved a revenue
of 111.1 million euros (12.3%). The software segment (43.4%) and Cloud (10.6%) made the largest contributions.
Strategic agreements were concluded with Red Hat and Check Point over the course of the year, further
strengthening our expertise in the areas of AI, virtualisation, security solutions and automation.
• The Green division achieved sales growth of 12.5%, with particularly strong growth in the solar energy sector
(44.1%). The MS Lux brand was expanded to include new sports and industrial lighting lines, and a significant
step forward was taken with accreditation to EN ISO/IEC 17025 for the testing of lighting systems, making a
further contribution to sustainability and energy efficiency.
• The VIVAX division achieved significant growth in all strategic product groups: air conditioning systems
(60.9%), white goods (38.0%) and small domestic appliances by shifting the focus to year-round products.
The reorganisation into three independent divisions was implemented and in the fourth quarter preparations
began for expansion into the EU markets through the establishment of subsidiaries.
• The ITCE division recorded a slight decline in sales (4.7%), which is in line with the market trend. However,
market share was maintained, and positive developments were achieved in the most important categories:
Computers (33%), monitors, televisions and telephones. The division continued the process of reorganisation
by vertical with the aim of increasing operational efficiency and reducing costs.
Over the course of the year, we also faced challenges in the supply chain, particularly in the procurement of goods
from China. Geopolitical unrest and conflicts had a significant impact on logistics flows and extended the average
shipping time from 35 to up to as much as 67 days. Nevertheless, thanks to timely measures, planning and flexibility,
we were able to ensure the continuity of supply and fulfil our obligations to our partners.
The year 2024 represents an important milestone for M SAN Grupa – a time when we have begun to lay the
foundations for a systematic and comprehensive approach to sustainability that is aligned with the new European
Sustainability Reporting Standards (ESRS).
Although we are aware that we still have a long way to go, 2024 in particular has been pivotal in shifting our focus
to a more attentive understanding of the impacts we have, the risks we face and the opportunities we can identify
and seize in collaboration with our many stakeholders.
In this process, we have begun to look at sustainability from a broader perspective – not only within the boundaries
of our Group, but also through the complexity of the value chains to which we are connected. We have recognised
how important it is not only to measure and report, but also to actively raise awareness – within the company, among
employees and partners as well as in the community. Green solutions, sustainable innovations and the responsible
use of resources are increasingly becoming the focus of our stakeholders – and for good reason.
We would like to thank our employees, partners, customers and suppliers for their continued cooperation and
support. Together, we will continue on the path to a stronger, more efficient and even more innovative future.

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M SAN GRUPA ANNUAL REPORT 2024. 8
ABOUT US
THE M SAN Grupa is a limited liability Company for
computer production, trade and import-export
with its headquarters in Rugvica, Dugoselska ulica 5,
represented by the chairperson of the Management
Board, Mrs. Irena Langer-Breznik, Company registration
number: 080157581, was registered at the Commercial
Court in Zagreb in 1995 under the name M SAN d.o.o.,
and in 1997 it got its current name.
The M SAN Grupa is the largest private IT Company in
the Republic of Croatia. Within the M SAN Grupa, whose
primary activity is the distribution of computer hardware,
software and consumer electronics, companies in the
region such as Kim Tec Bosnia and Herzegovina, Kim
Tec Serbia, Kim Tec Montenegro and Pakom Kompani
North Macedonia operate, among others, and from the
end of 2022 and Alterna distribucija d.o.o. in Slovenia. In
July 2023, the Company concluded the acquisition of the
company Data Link, which specializes in the production
of professional LED lighting and develops products
and production technology, software solutions and the
technology of LED lighting fixtures. On 21 May 2024, a
contract was signed for the acquisition of 100% of the
ownership shares in the company Ask Tec d.o.o. (Kosovo),
which until then was under the direct control of the sole
member of the company. This acquisition was carried
out with the aim of consolidating all sales companies
within the same business vertical.
In addition to the above, the Group distributes IT
equipment and consumer electronics of its own brands,
which includes TV sets, air conditioners, lighting
fixtures (LED lamps), white goods, desktop computers
and electric mobility products (electric scooters,
electric bicycles and electric motocycles), which it also
distributes through its distribution network.
In the portfolio, the Group also has a logistics activity
that primarily includes storage, manipulation and
transport of goods (M SAN LOGISTIKA), a service activity
for the provision of servicing and repair of goods during
the warranty and non-warranty periods (MR Servis
d.o.o., KIM TEC-SERVIS d.o.o. Vitez, KIM TEC SERVIS d.o.o.
Belgrade) and the collection and disposal of electrical
and electronic waste (M SAN EKO d.o.o., KIM TEC EKO
d.o.o. Vitez). The Group has one subsidiary.
Since its establishment, the Group has implemented
a strategy of strengthening its portfolio with all
major world-renowned brands of IT equipment and
consumer electronics. Special emphasis is placed on
the production and development of our own brands,
with production taking place in the People’s Republic
of China, the Republic of Turkey, the Republic of Croatia
and the Republic of Serbia. Most of the production takes
place in the plants of third parties, while in the plants
of the Group’s companies, in the Republic of Croatia
and the Republic of Serbia, the assembly of personal
computers, TV sets and electric bicycles takes place, as
well as the production of led lighting of our own brands.
In parallel, the expansion of the Group’s operations in
the Adriatic region is being carried out by establishing
companies and logistics centres with the development
of its own logistics, as well as service and service support.
Its own regional logistics network is one of the Group’s
key competitive advantages. Since entering the market
until today, we have gained the trust of our customers,
partners and suppliers, the number of which is constantly
increasing. We are proud that we have become one of
the best distributors on the regional IT and CE market
from our beginning until today. We attribute our
position as a market leader to the commitment of our
employees, suppliers, customers and stakeholders,
because we firmly believe that achieving common goals
leads to success and enables additional expansion and
improvement of our own business.
The company is active in research and development.

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M SAN GRUPA ANNUAL REPORT 2024. 9
30
YOUR RELIABLE PARTNER
years

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M SAN GRUPA ANNUAL REPORT 2024. 10
BUSINESS MODEL
The business model of the M SAN Grupa is based on building and maintaining trust and reliability of cooperation
with suppliers and customers, developing a diverse product portfolio and financial stability, and special care that is
devoted to products of its own brands.
We have acquired a large number of satisfied partners and customers by investing in production, distribution,
marketing and development. Our own brands that we are proud of are VIVAX in the consumer electronics range, MS
Energy in the e-mobility range, MSGW computers, MS in the range of peripherals, cables, drones, housings, power
supplies and accessories for mobile phones, laptops and desktops, Solmacht which covers the field of solar systems
and MS Lux which offers a range of LED lighting products.
is our own brand of electric scooters, bicycles and all other modern personal electric
transportation systems. It has been present on the Croatian market since 2019, and
today’s range of MS Energy is divided into four categories: electric bicycles, electric scooters, electric motorcycles
and accessories. In today’s world, where mobility and ecology define a new lifestyle, MS Energy provides answers
to customer demands for sustainable, simple and smart transport solutions, the for complete e-mobility. The
reliability and quality of e-mobility products is one of the foundations of the MS Energy brand. The product creation
strategy and the entire production process are based on the use of proven technological solutions, and the very
idea of creating a product is based on the desire to offer the user a complete, reliable, environmentally friendly and
economical solution to the issue of urban mobility.
The VIVAX brand as a domestic product has been present on the Croatian market since 2004,
and has been placed on a total of 39 markets, meaning 4 continents. Today, the VIVAX range
offers more than 300 different products that can be divided into 5 product Groups: TV and audio,
Air conditioning (air conditioners, heat pumps), Small home appliances, White goods and Smart devices (smart
watches and tablets). The entire range and design of VIVAX products is completely designed in Croatia, and high
quality standards are ensured by the implementation of strict procedures in production processes with a special
emphasis on quality control processes. VIVAX is part of a Group of rare European consumer electronics brands that
manufacture their products on European soil. Also, M SAN has a production line of LED TV devices with diagonal
sizes from 22’’ to 65’’, which takes place in its own premises in Rugvica. This production is intended for the Croatian
market, as well as the European Union market.

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M SAN GRUPA ANNUAL REPORT 2024. 11
is one of the leading European manufacturers of professional lighting. Utilizing state-of-the-
art LED technology, it replicates sunlight, adapting and optimizing it for all needs with the
smallest ecological footprint. The development of the production of MS Lux lighting began
in 2015 under the name LEDA. With the acquisition of DATA Link, the in-house brand has expanded to include
the production and development of lighting for special purposes, work lighting, and explosion-proof lighting for
industrial applications.From its inception, the development has been strategically focused on public and industrial
lighting, having supplied public lighting for over 100 cities and municipalities in Croatia, Bosnia and Herzegovina,
Macedonia, Slovenia, Serbia, and the surrounding region. In addition to lighting fixtures, solutions based on IoT
technologies for monitoring and managing lighting have been implemented. This product group consists of several
lines of public lighting: street lighting, ambient lighting, and floodlights.
BUSINESS MODEL
computers has been on the Croatian market since 2005 as M SAN’s own brand. All computers
are manufactured in the Group’s automated IT equipment production facility and have
undergone numerous testings of correctness. MSGW computers meets all the necessary requirements set by
Microsoft for full compatibility of built-in components with the Windows operating system.
is a private brand of the M SAN Grupa, which combines the production and sale of computer
peripherals including headphones, speakers, keyboards and mice, as well as housings, power
supplies and cables. With a 20-year tradition, it successfully operates on the Croatian market and
regional markets (Serbia, Bosnia and Herzegovina, Macedonia, Montenegro) and is expanding its operations to
other EU markets as well. Each stage of the production cycle is subject to strict quality control, which ensures the
reliability and functionality of each device, and ultimately a quality product at an affordable price.
is an own brand in the portfolio of M SAN Grupa, created in response to market needs
for complete solutions in the field of solar power plants production. Through the framework of Solmacht, business
and private users are provided with a complete service for the production of solar power plants: from the conceptual
design and detailed solar power plant project in accordance with the needs of users, professional assistance in the
process of obtaining permits and approvals, the supply of all components for the production of the solar power
plant according to the design, the organization of execution and supervision, all the way to commissioning.

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M SAN GRUPA ANNUAL REPORT 2024. 12
Croatia
Croatia
Slovenia
95%
60%*
24%*
60%
Croatia
CroatiaSlovenia
Croatia
Serbia
*on December 31, 2024, the company did not participate in the consolidation.
Serbia
Bosnia and
Herzegovina
North Macedonia Montenegro
Servis
Servis
Kosovo
KimTec
Croatia
North Macedonia
Croatia
Centar kompetencija
za zelenu energiju
IT & CE distribution
Agriculture Logistics
Ecommerce
Service
ICT
Real estate
EE waste disposal
Legend
OVERVIEW OF AFFILIATED COMPANIES WITHIN THE GROUP

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M SAN GRUPA ANNUAL REPORT 2024. 13

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M SAN GRUPA ANNUAL REPORT 2024. 14
The M SAN Grupa d.o.o. is the leading distributor of IT products and consumer electronics of more
than 60 of the world’s most reputable manufacturers and more than 15,000 products. The following
stand out among them: Microsoft, Hewlett Packard, Samsung, Acer, Asus, IBM, LG Electronics Inc,
Panasonic, Lenovo, Toshiba, Transcend, Western Digital, etc. The M SAN Grupa has expanded its
range with a full range of quality products from which every business or home user can choose a
product according to their wishes and capabilities.
THE M SAN GRUPA’S LOGISTICS IS AMONG THE MOST
DEVELOPED IN THE REGION, WHICH ENSURES FAST
AND ACCURATE DELIVERY.
The M SAN Grupa has over 7,400 partners inside and outside Croatia. Sales channels consist of
commodity chains, IT and CE retailers and system integrators. Internal sales teams of the M SAN
Grupa were also developed according to the sales channels according to product Groups. Through
the ‘Enterprise’’ sales segment, the M SAN Grupa offers high added value through knowledge and
complex solutions for partners such as system integrators and similar.
With a large number of partners, the Group has significantly diversified its operations, where the largest
unrelated customer accounts for 2.2% of the total annual turnover. The Group invests significantly
in the sales channels of exports to third countries (countries where there are no subsidiaries), so the
total share of exports to third parties amounted to 9.6% in 2024.
PORTFOLIO, SALES CHANNELS, PARTNERS

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M SAN GRUPA ANNUAL REPORT 2024. 15
M SAN GRUPA GODIŠNJE IZVJEŠĆE 2024. 15

HISTORICAL DEVELOPMENT OF
The Group
1995
The Company M SAN
d.o.o. was founded.
1997
The Company M SAN Grupa d.o.o.
was founded, to which the operations
of the Company M SAN d.o.o. were
transferred.
1999
The Company KIM TEC d.o.o.
was founded. Vitez, Bosnia and
Herzegovina
2006
Business shares in Pakom
Kompani (North Macedonia)
acquired
2005
The Company KIM TEC
CG d.o.o. was founded.
Podgorica, Montenegro
2021
Issuance of
a corporate bond,
SOLMACHT brand
registered
2022.
Acquired business shares
in the company Alterna
distribucija (Slovenia)
2023
Acquired business
shares in the company
2008
Business shares in the companies
Elektromagic (Croatia and Bosnia
and Herzegovina), Recos (Bosnia
and Herzegovina) acquired
2009
The companies
M SAN EKO, KIM-TEC Servis
BG and KIM-TEC Servis Vitez
were founded
2013
Kim TEC Eko was founded,
MS brand registered
2019
MS ENERGY brand
registered
2004
The Company KIM-TEC
d.o.o. Belgrade was
founded, Republic of Serbia
2004
VIVAX brand
registered
MR Servis d.o.o.
was founded
DATA LINK d.o.o. Bjelovar
2024
Acquired business shares
in the company
ASK TEC d.o.o. (Kosovo)

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M SAN GRUPA ANNUAL REPORT 2024. 16
The operating business of the Group is organized through four divisions:
•
ITCE – distribution of IT equipment and consumer electronics;
•
Enterprise – value-added distribution for customized hardware-software solutions;
•
VIVAX – production and distribution of its own brand, over 300 items in all categories (TV and audio, air
conditioning, white goods, small home appliances, smart devices).
•
Green – production and distribution of own brands of electric mobility and professional LED lighting,
distribution of solar power plant components.
The heads of the Company’s divisions are also responsible for the divisions in the regional members, which at the same time comprise four sales channels
whose motto is “One Company on many different markets”.
ORGANIZATIONAL STRUCTURE
The M SAN Grupa is a limited liability company. The sole owner of the Company is Mr. Stipo Matić.
The Company does not own its own shares and does not implement a program to buy them back.
Supervisory Board:
Željko Menalo, Chairman of the Supervisory Board,
Miroslav Huzjak, Deputy Chairman of the Supervisory Board,
Stipo Matić, member of the Supervisory Board until March 1, 2025,
Marko Rašić, member of the Supervisory Board,
Snježana Matić, member of the Supervisory Board until April 7, 2024,
Branko Bojanić, member of the Supervisory Board since August 1, 2024,
Goran Kotlarević, member of the Supervisory Board since March 1, 2025.
Management Board:
Irena Langer-Breznik, Chairperson of the Management Board,
Žarko Kruljac, Vice-Chairperson of the Management Board,
Slaven Stipančić, member of the Management Board until March 1, 2025,
Goran Kotlarević, member of the Management Board until March 1, 2025,
Alen Panić, member of the Management Board,
Vladimir Brkljača, member of the Management Board,
Miroslav Gabrić, member of the Management Bord until March 8, 2023,
Bruno Jozić, member of the Management Board since June 1, 2024.

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M SAN GRUPA ANNUAL REPORT 2024. 17
ORGANIZATIONAL STRUCTURE
In the reporting period ending on 31 December 2024, a total of 540 employees contributed to the
core business of the parent Company M SAN Grupa and related companies in Croatia, as well as 453
employees in the region (Serbia, Bosnia and Herzegovina, Montenegro, Macedonia, Slovenia, Kosovo). A
total of 993 employees contributed to the growth and development of our companies during the year
as of 31 December 2024.
Our main goals and ambitions are:
•
to become the most successful ITCE distributor in the Adria region
•
to develop our own brand with a relevant presence on the EU market
•
to achieve market leadership in the field of e-Mobility
•
to build a logistics infrastructure in order to reach end consumers
•
lean operations
7.400+ 950+ 6200.000
PARTNERS EMPLOYEES OWN
BRANDS
PRODUCTS DELIVERED
PER MONTH

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M SAN GRUPA ANNUAL REPORT 2024. 18
The M SAN Grupa, as an entity of public interest whose corporate bonds are listed on the Official Market of the
Zagreb Stock Exchange, in accordance with the Accounting Act, Article 22, is obliged to include a statement on the
application of the Corporate Governance Code in the annual report.
The M SAN Grupa is not obliged to apply the Corporate Governance Code of the Croatian Financial Services
Supervision Agency and the Zagreb Stock Exchange d.d., but the Group is guided in its operations by the highest
standards of governance and responsibility in accordance with good corporate management practices, and the
standards and practices themselves are included in the Articles of Association, which are available on the Company’s
website (
www.msan.hr
).
The Company is also obliged to submit data on corporate governance practices to Croatian Financial Services
Supervision Agency through the Questionnaire on governance practices for bond issuers (GIKU-UOP-OBV).
The M SAN Grupa is a signatory to the Code of Ethics in Business, initiated by the Croatian Chamber of Commerce.
The mentioned Code establishes the guidelines for the ethical behaviour of business entities, and the signatories
undertake, among other things, to respect human rights, apply the provisions on preventing corruption, and so on.
INTERNAL CONTROLS AND RISK MANAGEMENT IN RELATION TO THE FINANCIAL REPORTING
PROCEDURE
Internal accounting controls, meaning the procedures of competent employees, ensure the accuracy, validity, and
comprehensiveness of financial records and reports, which are the basis for the preparation of annual financial
reports. This system of controls also ensures their compliance with International Financial Reporting Standards. The
Company’s accounting policies represent the rules that the Company applies when compiling financial statements.
A summary of the most significant accounting policies is published in the Company’s financial statements.
BODIES OF THE COMPANY
The corporate governance structure of the M SAN Grupa is based on a dualistic system, which consists of the
Supervisory Board and the Company’s Management Board, which, together with the General Assembly, in
accordance with the Statute and the Companies Act, represent the three fundamental bodies of the Company. The
Supervisory Board has established an Audit Committee, which, when performing its tasks, assesses the quality of
the internal control and risk management system with the aim that the main risks to which the Company is exposed
(including risks related to compliance with regulations) are appropriately identified.i.

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M SAN GRUPA ANNUAL REPORT 2024. 19
DESCRIPTION OF DIVERSITY POLICY
The 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 characteristics of our organizational culture,
which has been present since the founding of the Company, and is manifested in the belief that differences in
gender, skin colour, political or other beliefs, national or social origin represent wealth, which has existed within M
SAN and has been transformed into success for more than 20 years.
The Group strictly prohibits and condemns any form of discrimination with the aim of providing and ensuring a
sustainable work environment without discrimination and abuse based on gender, race, religion, ethnicity, sexual
orientation or any other characteristic/status as a basis for discrimination. The Group is committed to providing a
non-discriminatory workplace, and we are proud of the absence of reported incidents.

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M SAN GRUPA ANNUAL REPORT 2024. 20

GOVERNANCE
Structure

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M SAN GRUPA ANNUAL REPORT 2024. 21
Governance within M SAN is based on the transparency and efficiency of corporate governance based on the best
international practices, ensuring the success and sustainability of the entire Group’s activities. M SAN operates
within a two-level board structure, consisting of the Supervisory Board and the Management Board. During
2024, the Supervisory Board consisted of five members, while the number of Management Board members
decreased from seven at the beginning of the year to six by the end of the first quarter and then increased again
to seven members from the end of the second quarter of 2024.
The Supervisory Board and the Management Board ensure that the established strategy, resources, risk
management system, internal control system and relations with stakeholders support the long-term success
and sustainable development of the entire Group. Moreover, the above elements ensure that the strategy takes
into account the potential impact on the environment and the community, and that the policies, culture and
values of M SAN promote ethical behaviour, respect for human rights and lead to a stimulating and pleasant
work environment.
The role of the Management Board in conducting business is regulated by the Companies Act, the Statute and by-
laws. The Management Board performs its function with the attention of an orderly and conscientious economist,
taking into account primarily the best interests of the Group. When making decisions, the Management Board
must not be guided by personal interests, that is, use business opportunities for personal purposes, and it is
obliged to immediately notify the Supervisory Board of any conflict of interest.
The Assembly of the Company is the highest body, and it consists of the member of the Company as the sole
founder. The member of the Company makes the decisions he is authorized to make by law and the Articles
of Association. The Assembly decides on issues that are within the exclusive competence of the Assembly
based on the current Companies Act. If it deems that there is a need for it, the Assembly is authorized to issue
mandatory instructions 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 Company’s Management Board in cases prescribed by the
Companies Act and whenever the Company’s interests require it, but it can also be convened by the Supervisory
Board and the member of the Company. The Assembly is eligible for decision-making if the sole member of the
Company is present.

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M SAN GRUPA ANNUAL REPORT 2024. 22
Irena Langer Breznik has held a number of management positions in the M SAN Grupa for 19 years. In her roles,
which include a leadership position in the M SAN Grupa’s procurement, in addition to responsibility for the complete
procurement process in the Republic of Croatia and regionally, she is responsible for obtaining new distributions,
nurturing quality relationships with principals, organizing and implementing marketing activities at the level of M
SAN and companies in the region; moreover, she was responsible for the establishment of new business processes
as well as the improvement of existing ones and worked continuously on structural improvements of business
processes with special emphasis on regional procurement, development and improvement of operations in the
foreign markets of Group members, management of numerous projects with the aim of developing and improving
business applications, electronic trade development between business entities, inventory management and digital
transformation. Since 2011, Mrs. Langer Breznik leads the e-commerce development and operations of eKupi, both
in the Republic of Croatia and regionally, and serves as a member of the M SAN Grupa Management Board. On 1
January 2023, she assumed the position of Chairperson of the Company’s Management Board.
IRENA LANGER BREZNIK
CHAIRPERSON OF THE MANAGEMENT BOARD
THE M SAN GRUPA’S MANAGEMENT BOARD
During his 20 years in the M SAN Grupa, Slaven Stipančić focused on improving the procurement process and
expanding the distribution portfolio. Mr. Stipančić, leading a team of successful professionals, is responsible for
and made a great contribution to the development of M SAN’s own VIVAX brand, thanks to which VIVAX became
a recognized brand that is sold on almost the entire European market, as well as on other continents. As director
of the consumer electronics segment, he works on contracting and developing distribution cooperation with the
world’s strongest CE brands, in Croatia and the region. At the same time, he is working on optimizing the connection
between the sales processes of international CE brands and the Company’s procurement processes. He was the
member of the Management Board from 2009 until 1 March 2025.
SLAVEN STIPANČIĆ
MEMBER OF THE MANAGEMENT BOARD
Žarko Kruljac devoted 18 years in the M SAN Grupa to the development of the Group’s sales force and distribution
reach. Initially, he stood out thanks to the successes in business and the realization of strategic goals that he
achieved in management positions in companies in the Republic of Serbia and Bosnia and Herzegovina, and after
that, managing commercial operations in Croatia and the region, and focused his activities on three key aspects:
continuous building and strengthening of partnership customer networks, raising the competences of sales
operations and adapting sales processes to market changes. He received his doctorate in the field of economic
sciences in 2020. Since 2009, Mr. Kruljac has been a member of the Company’s Management Board.
ŽARKO KRULJAC
VICE-CHAIRPERSON OF THE MANAGEMENT BOARD

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M SAN GRUPA ANNUAL REPORT 2024. 23
During almost 20 years within the M SAN Grupa, Mr. Alen Panić held a number of functions related to the construction
and development of the division of high technologies and project business, including the role of executive director of
the so-called value-added distribution. Today, the mentioned division consists of a number of departments that are
responsible for the business of infrastructure, software, cloud and project solutions, distributed in all the countries of
the region, distributing the world’s largest technology principals, and represents the regional leader in that segment
of business behind which hundreds of successfully delivered the most complex ICT projects, continuous growth and
business expansion. Since October 2022, he has been a member of the Company’s Management Board .
ALEN PANIĆ
MEMBER OF THE MANAGEMENT BOARD
Vladimir Brkljača built his business career in the M SAN Grupa, where he devoted himself to the development of
the VIVAX brand for the past 20 years. Along the way, he held various positions; from product manager, head of
development and procurement VIVAX, head of the VIVAX profit center, and for the last 5 years he held the position of
executive director of the VIVAX division, with key responsibilities for development, procurement, sales and building
the VIVAX brand. He led the project of moving and building a plant for the production of VIVAX LED televisions in
Croatia and in the initial phase the development of the MS Energy brand. He made the main contribution to the
overall development and strengthening of the VIVAX division’s operations in all countries of the region, a significant
step forward to the EU market, and the implementation of the VIVAX brand strategy. Since October 2022, he has
been a member of the Company’s Management Board.
VLADIMIR BRKLJAČA
MEMBER OF THE MANAGEMENT BOARD
In the period from 2014 to 2024, Bruno Jozić managed the business of M SAN Grupa on the Montenegrin market
in the position of Country Manager of Kim Tec in Podgorica. During this time, he brought Kim Tec to a leading
position as a distributor of IT and CE products on the Montenegrin market and achieved exceptional financial and
commercial results. After 10 successful years, he left the position of Country Manager in Montenegro to take over
the position of Board Member of M SAN Grupa in June 2024. He is responsible for the business of the ITCE division.
BRUNO JOZIĆ
MEMBER OF THE MANAGEMENT BOARD

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SUPERVISORY BOARD OF THE M SAN GRUPA
M SAN GRUPA ANNUAL REPORT 2024. 24
Marko Rašić started his career in the Group in 2003 as an intern in the Finance Department and by 2011 he had
progressed to the position of head of finance. During the acquisition period of the Group in the agricultural segment,
he actively participates in takeover processes and the subsequent financial restructuring of acquired agricultural
companies. In parallel with his duties as head of finance, since 2016 until he has held the position of Chairman of the
Supervisory Board of PP ORAHOVICA d.o.o. and President of the Supervisory Board of PPK Valpovo d.o.o. and from
2014 to 2023 he has been a member of the Supervisory Board of the Company KING ICT d.o.o. In the Supervisory
Board of M SAN, he has held the position of Deputy Chairman of the Supervisory Board from 2016 until 2023 when
he became a member of the supervisory board. In 2017, he was appointed director of the Company Ured za podršku
d.o.o. From February 2024, Mr. Rašić also acts as the chairman of the Supervisory Board of M SAN Grupa d.o.o.
MARKO RAŠIĆ
MEMBER OF THE SUPERVISORY BOARD
ŽELJKO MENALO
CHAIRMAN OF THE SUPERVISORY BOARD
Željko Menalo spent most of his career in the financial industry within the Erste&Steiermarkische Group in Croatia,
where he performed various managerial tasks. He joined the SM Group in 2019 with employment at the Company
M SAN Ulaganja d.o.o., and since 2022 he has been employed at the Company Ured za podršku d.o.o. in the position
of adviser. By the decision of the Company’s Assembly of September 2022, Željko Menalo was appointed to the
position of Chairman of the Supervisory Board with the beginning of his term of office on 1 January 2023.
MIROSLAV HUZJAK
DEPUTY CHAIRMAN OF THE SUPERVISORY BOARD
For the past 25 years, Miroslav Huzjak has been working in leading positions in the M SAN Grupa, leading teams of
professionals who have positioned the Company as the most important ICT and CE distributor in the Adria region.
He worked in various jobs in the Company, and held a managerial position in the commercial department, which in
addition to the responsibility for the organization of the commercial department, and its successful operation and
the positioning of M SAN as a market leader, included numerous other responsibilities. Mr. Huzjak was responsible
for conducting key negotiations for concluding a distribution contract with the largest globally significant principals,
thanks to which M SAN became an authorized distributor of numerous world-famous brands, both in the territory
of the Republic of Croatia and regionally. As of 1 January 2023, Mr. Huzjak holds the position of Deputy Chairman of
the Supervisory Board of the M SAN Grupa.

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M SAN GRUPA ANNUAL REPORT 2024. 25
Stipo Matić founded M SAN in 1995 and is its sole founder and member. In the period until 2009, Stipo Matić held
the position of director of M SAN Grupa, and then took over the position of Chairman of the Supervisory Board of
the Company. Moreover, Stipo Matić is the director of M SAN Logistika d.o.o. and M SAN EKO d.o.o., member of the
Management Board of eKupi d.o.o., as well as the Chairman of the Supervisory Board of KING ICT d.o.o. Today, the
portfolio of companies owned by him includes KING ICT d.o.o., eKupi d.o.o., Ured za podršku d.o.o., CORVUS PAY d.o.o.,
M SAN Grupa d.o.o., and others. He was the member of the Supervisory Board from 2004 until 1 March 2025.
STIPO MATIĆ
MEMBER OF THE SUPERVISORY BOARD
Snježana Matić has been involved in the business of M SAN since the very foundation of the Company. In the
beginning, she worked on sales tasks, and then on procurement tasks with a special focus on building long-
term sustainable business relationships with suppliers. In response to the growth of SAN’s business activities,
she took over the coordination of activities in accounting and finance, and in 2004 devoted herself to the
development of system integration business, where she still operates in the field of controlling. She has been a
member of the Supervisory Board of M SAN from 2004 until April 7, 2024.
SNJEŽANA MATIĆ
MEMBER OF THE SUPERVISORY BOARD
Branko Bojanić spent most of his career in companies of the Končar Elektroindustrija d.d. group in various
management positions in the field of finance and investments. After Končar, he worked in the financial sector as a
member and President of the Management Board of Alternative Invest d.o.o., an investment fund management
company. He returned to the real sector as Finance Director of Monting d.o.o. and joined the SM Group in 2024
as Director of Strategic Risk Management at Ured za podršku d.o.o. He is Chairman of the Supervisory Board of
Alternative Invest d.o.o., member of the Management Board of the Croatian Association of Corporate Treasurers
and since August 2024 member of the Supervisory Board of M SAN Grupa, KING ICT d.o.o. and Chairman of the
Supervisory Board of PPK Valpovo d.o.o.
BRANKO BOJANIĆ
MEMBER OF THE SUPERVISORY BOARD
Strengthening sales operations and expanding the distribution reach, in all countries of the region, are the
main subjects of Mr. Kotlarević’s activities. In his 20 years of work in the M SAN Grupa in the positions of sales
manager, sales director and business development director, Mr. Kotlarević directly influenced the building of
the Company’s strong market presence and its current recognition. From March 2021 to March 2025, he was the
member of the Management Board, and as of 1 March 2025, he has joined the Supervisory Board.
GORAN KOTLAREVIĆ
MEMBER OF THE SUPERVISORY BOARD

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M SAN GRUPA ANNUAL REPORT 2024. 26
OPERATING
Business

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M SAN GRUPA ANNUAL REPORT 2024. 27
ITCE DIVISION
The ITCE division operates in the territories of the Republic of Croatia, Serbia, Bosnia and Herzegovina, North Macedonia,
Montenegro and Slovenia.
The division includes the categories of 19 strategic product Groups that refer to the ‘A’ brands of world manufacturers in
the total product portfolio of the M SAN Grupa. The ITCE division is divided into four verticals across all countries where
it operates, namely the IT vertical, Notebooks/Computers vertical, Consumer Electronics - Appliances vertical, and Sales
Division Vertical. Each of the verticals specializes in the procurement and sale of a certain part of the range.
The IT vertical includes strategic groups of products that are primarily components of the desktop computer and
accessories that are closely related to the computer itself. The most important strategic groups in the IT vertical are
desktop computers, desktop computer components, monitors, consumables and printers, peripherals, network
equipment and the gaming range. In the IT vertical, there is an own brand of desktop computers called MSGW, which is
manufactured in an automated plant for the production of IT equipment, and the private MS brand, which encompasses
computer peripherals such as headphones, speakers, power supplies, keyboards and mice, and housings and cables.
The CE-A vertical includes strategic groups of white goods, TVs, air conditioners, drones, small household appliances,
new technologies, mobile phones and brown goods.
The NOT/COMP vertical includes strategic groups of laptops, gaming laptops, desktop computers and monitors related
to ‘A’ brands of manufacturers.
The Sales Division vertical is primarily in charge of distributing and expanding the strategic manufacturer groups located
in the ITCE Division portfolio across all divisional sales channels.
In 2024, the ITCE business division recorded revenues of EUR 196.4 million, which corresponds to a decrease of 4.7% (EUR
9.7 million) compared to 2023.
Looking at the countries in which the Group operates, the two largest markets recorded a negative result compared
to the previous year: Serbia with a decrease of 11.2% (EUR 6 million) and Croatia with a decrease of 10.2% (EUR 7.3
million). The other markets recorded growth: Macedonia 0.7% (65 thousand euros), Slovenia 32.0% (3.5 million euros)
and Montenegro 63.6% (5.7 million euros).
Common to all the markets mentioned is a year-on-year decline of 7.4 in the Notebook strategy group, particularly in
retail, e-commerce and the traditional channel. On the other hand, all markets recorded sales growth thanks to projects
and partners focusing on system integration. Increased investment in the refurbishment of devices, both in the private
and public sectors, contributed to this.
The ITCE division also recorded a decline in exports to the EU market. This can be explained by the high level of saturation
in this market, which led to a fall in prices and the unprofitability of sales.
Looking at sales by strategic product group, the ITCE division recorded significant growth in monitors (6.4% or 850
thousand euros), computers (33.0% or 7.3 million euros) and TVs (4.6% or 1.04 million euros) as well as telephones
(9.3% or 922 thousand euros). The growth is the result of increased sales and an expansion of the product range in
the retail channel as well as a significantly higher presence in the project business due to the aforementioned increase
in investments in the refurbishment of appliances. In addition, the growth in TV set sales in 2024 was significantly
influenced by the Olympic Games and the European Football Championship.
The largest decline in terms of strategic groups was realised in the aforementioned strategic group of notebooks by
7.4%, printers by 18.9% and consumables by 16.9%. We explain this with the reduction in the use of printed media and
the switch to digital media, both in the use and exchange as well as in the archiving of data.
From a strategic perspective, the division began the second phase of reorganisation and consolidation by vertical in
2024. Completion is planned for 2025. The ultimate goal of the reorganisation is to strengthen the vertical organisation,
increase efficiency and reduce costs in all sales channels and markets.

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M SAN GRUPA ANNUAL REPORT 2024. 28
VIVAX DIVISION
In 2024, the VIVAX division achieved exceptional business results with sales growth in all key strategic product groups,
confirming its strong market position and potential for further development. Particularly noteworthy is the growth
in the area of air conditioning systems, where an increase of 60.9% was recorded. The successful implementation of
new marketing activities, increased awareness of the VIVAX brand and the expansion of the sales channel network
contributed to this significant growth. The white goods segment also achieved significant growth of 38.0%. In this
segment, the presence of the Group’s products was increased in all sales channels, the product range was expanded,
and logistics processes were improved, ensuring better product availability. An important strategic change was made
in the small household appliances segment by abandoning the seasonal range and focusing resources on year-round
products. This decision led to an increase in sales in the first year, whereby we exceeded the sales achieved in the
seasonal range. Although the TV segment recorded a lower growth rate of 3.9%, which is a consequence of the particular
challenges in the export markets, we are continuously working on strategy adjustments to increase the competitiveness
and presence of the Group’s products.
In order to create a basis for further growth and improve the organisation, the VIVAX division was restructured in the
middle of the year into three new divisions based on the most important strategic groups: Air Conditioning, White Goods
and Multimedia & Small Home Appliances. This new organisational structure allows for a stronger focus on the most
important strategic product groups, increases the competence level of employees and creates room for strengthening
the team with existing employees and new experts.
In addition to the continued investment in the marketing of the VIVAX brand, an internal market research team has been
formed to facilitate decision-making related to understanding the needs of end consumers and to simplify the process
of developing and creating new products and services.
In the last quarter of 2024, a strategic business development plan was established in the European Union markets
through the creation of own companies, which will enable additional growth and increased market presence of the
VIVAX brand.

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M SAN GRUPA ANNUAL REPORT 2024. 29
GREEN DIVISION
The consolidated total revenue of the Green Division for 2024 amounts to EUR 32.9 million, which corresponds to an
increase in revenue of 12.5% compared to 2023. The largest growth was achieved in the Solar Energy division (44.1%),
while the LED lighting division recorded a decrease of 43.5%, mainly due to a lower number of projects in this specific
area. The largest growth in the solar energy segment was achieved in Serbia and Montenegro, while the largest sales in
the LED lighting segment were still generated in the Republic of Croatia.
The LED lighting business segment has been enhanced with a new range of sports and industrial lighting, while the
technical features of the road lighting range have been significantly improved. The MS LUX brand, with its product
portfolio, is capable of meeting all requirements for road lighting, specialised motorway lighting, outdoor and indoor
sports lighting, as well as lighting needs for large industrial halls. Significant investments have been made in the
development of the HCL range.
Intensive field work following the presentation of the new range at the Light&Building trade fair led to business co-
operation with a number of partners in the EU. The company Centar kompetencije za zelenu energiju d.o.o., which
operates in the LED lighting vertical, was awarded the prestigious EN ISO/IEC 17025 accreditation for the EN 13032-
4 standard, which enables the testing of photometric and colorimetric parameters of lighting fixtures. The company
has thus successfully positioned itself on the Croatian market. The company’s research laboratory is equipped with
Viso LabSpion, supports and measures street lighting fittings and offers all manufacturers testing opportunities in
accordance with the open market principle.
In the solar energy business area, cooperation was initiated with new suppliers of solar modules who are setting new
standards with their production quality. Significant progress was also made in the distribution of Huawei inverters and
the conditions for gold status were met as one of the first distributors in the Group’s distribution area.

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M SAN GRUPA ANNUAL REPORT 2024. 30
This segment is characterized by:
- working with a more demanding product portfolio – servers, data storage, networks, software, solutions, video
surveillance, industrial specialized products, cloud computing, high-tech services.
- working with more demanding customers - system integrators (SI), software manufacturers (ISV), service providers
(MSP) - which requires a higher level of knowledge and complex skills, as well as professional specialization and
certification for employees.
- working with more demanding suppliers – complex and dynamic technological, technical and operational
processes, and enormous breadth and depth of technologies, Groups, subgroups and specialization of products.
- Partners, and indirectly end users, are not only offered a product, the optimal solution is also designed,
suggested, upgraded and maintained, which gives a high value to the offer, especially for smaller and medium-
sized customers who cannot afford to hire expensive professionals and monitor the dynamics of technology
evolution, certification and other regulations; this approach reduces price pressure, as solutions are not simply
compared to identical products but are evaluated through more complex economic parameters such as quality,
total cost of ownership (TCO), scalability, cost reduction, service-level agreements (SLA), and others. Given
the advanced technological framework in this industry, profit margins are structured differently compared to
traditional retail. Additionally, the profiles, requirements, budgets, installed technology base, and habits of end
users vary significantly. This model also entails greater initial investments in technologies and human resources,
focusing on highly skilled engineering profiles and ongoing investment in education and training.
ENTERPRISE DIVISION
The Enterprise division is a Value Added Distribution (VAD) organized in several units – the Infrastructure department,
the Software and Cloud department, the Special Projects, technical support and marketing department, and the
Enterprise Sales department, in order to provide competitive goods and services to business ICT partners.
It operates as part of the M SAN Grupa, in Croatia, Serbia, Bosnia and Herzegovina, Slovenia, North Macedonia,
Montenegro, Albania and Kosovo. Its offering includes several dozen global brands.
The Group recognized the value of such an approach about 17 years ago, invested in an independent, specialized
division on a regional level, and, in the sales channel today, is the leading so-called Value Add distributor in Croatia
and the region.
In addition to direct sales, the Enterprise division also ensures the coordination of other sectors and departments
in the Company when their products (e.g. laptops, specialized products...) are offered as part of tenders and more
complex projects. It combines all the necessary parts of the offer in one place and offers the best solution to the
partner, thus increasing his competitiveness and profitability.

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M SAN GRUPA ANNUAL REPORT 2024. 31
Throughout 2024, within the broader global economic and technological framework, the continuation of challenges
stemming from the onset of the COVID crisis was felt, along with disruptions in supply chains, wars, inflationary
pressures, price fluctuations and other direct or indirect instabilities. Irrespective of this, this division generated
sales of 111.1 million euros in 2024, which corresponds to growth of 12.3% compared to the previous year. The
Infrastructure segment recorded a decline in revenue of 1.6%, the Cloud segment an increase of 10.6% and the
Software segment an increase of 43.4%.
Broken down by market, a 2.5% decline in sales was achieved in Croatia, mainly due to reduced or delayed public
infrastructure projects, a 0.8% decline in sales in Serbia, a 40% increase in sales in Bosnia and Herzegovina, a 28.3%
increase in North Macedonia, a 7.4% decline in sales in Kosovo, a 28.8% increase in sales in Montenegro and a 22.3%
increase in sales in Slovenia.
The year was marked by major changes at the technological level, driven by large mergers, acquisitions and
restructuring of the portfolio of technology manufacturers, their strong turns in organisations or strategic
investments, the most prominent and influential of which is the focus on AI (artificial intelligence), the further
development of MSP (managed services provider) services, hybrid cloud solutions and quantum computing, which
will significantly change the technological, but also the overall picture of the world in all segments of life and work.
The Group continues to invest in knowledge and technology in order to follow market and technology trends. The
crowning achievement in 2024 will be the awarding of contracts by major global brands:
- Red Hat, in the areas of middleware, AI, virtualisation and automation, and
- Check Point, as one of the indispensable players in the field of security solutions.

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M SAN GRUPA ANNUAL REPORT 2024. 32
During 2024, the Group achieved business revenues of EUR 502.0 million, representing an increase
of 6.4% compared to the previous year. Despite the challenging environment, all strategic divisions
except for the ITCE and Other division experienced growth. Perceived both apsolutely and relatively,
the biggest growth was achieved by the Vivax division, which, during 2024, had an increase in sales in
the amount of EUR 35.4 million (40.9%) compared to the previous year.
FINANCIAL
Operations
of the Group

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M SAN GRUPA ANNUAL REPORT 2024. 33
Division (Name) 2023 2024 Difference % Change
ITCE 206,097 196,423 (9,674 ) (4.7%)
Enterprise 98,906 111,051 12,145 12.3%
VIVAX 86,537 121,896 35,359 40.9%
Green 29,277 32,941 3,663 12.5%
Other 50,855 39,738 (11,117 ) (21.9%)
Total
471,672 502,049 30,377 6.4%
(in thousand EUR)
ITCE Enterprise Vivax Green Other
Table 1: Revenue by division
REVENUE BY DIVISION IN 2023 AND 2024
Graph 2: Revenue
structure by Divisions
Graph 1: Share of sales of own and
partner brands in 2024
Own brands
27,8%
Partner brands
72,2%
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2023
44%
39%
18%
24%
6%
7%
11%
8%
2024
21%
22%

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M SAN GRUPA ANNUAL REPORT 2024. 34
Graph 3: Sales Revenue by Strategic
Groups in 2024
33% Other
6% Desktop computers
5% Solar power plants
4% White goods
6% Software
16% Air
conditioning
11% Notebook
8% Servers
7% Tv sets
4% Storage
SALES REVENUE BY STRATEGIC GROUPS IN 2024

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M SAN GRUPA ANNUAL REPORT 2024. 35
SALES REVENUE BY BRANDS IN 2024
28% Other
7% IBM
3% Microsoft
2% SUNPRO
1% Philips
2% ASUS
24% Vivax
14% HP
11% Lenovo
8% Samsung
Graph 4: Market Share in Sales
Revenue by Brands in 2024
8% Servers

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M SAN GRUPA ANNUAL REPORT 2024. 36
MARKET SHARE IN SALES REVENUE BY COUNTRIES
IN 2024
Geographically, 41,0% of the Group’s revenue comes from sales in Croatia, 18,0% from Serbia, 10,2% from Slovenia,
8,4% from Bosnia and Herzegovina, 5,6% from Montenegro, 4,9% from North Macedonia, and 2,3% from Kosovo.
The remaining 9,6% of revenue comes from exports, i.e., from countries where the Group did not have affiliated
companies during 2024. *
*Since November 2022, the Slovenian market has been considered a ‘domestic market,’ and as of the end of May 2024, this designation also applies to the Kosovo market.
Graph 5: Sales Share by Segments in Countries without Subsidiaries in 2024
37%
11%
White
goods
10%
Monitors 5%
Other
TV sets
13%
Air conditioning
24%
Components

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M SAN GRUPA ANNUAL REPORT 2024. 37
10% Other
10% Slovenia
6% Montenegro
2% Kosovo
18% Serbia
8% Bosnia and
Herzegovina
North Macedonia 5%
41% Croatia
Graph 6. Share in sales revenue by countries

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M SAN GRUPA ANNUAL REPORT 2024. 38
Table 2: Profit and Loss Statement for the Year 2024
Table 3: Financial Indicators for the Year 2024
FINANCIAL INDICATORS
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.
(in thousand EUR) 2023 2024 % Change
Business revenue* 471,672 502,049 6.4%
EBITDA* 10,992 11, 544 5.0%
EBIT* 8,254 8,542 3.5%
Net income* 4,611 3,878 (15.9%)
(in thousand EUR) December 31, 2023 December 31, 2024
Net financial debt* 22,333 21,269
Total assets* 187, 276 206,447
Total equity* 45,256 49,179
Current ratio* 1.3 1.2
Net working capital (days)* 32.0 30.2
Equity ratio* 24.2% 24.6%
NFD / EBITDA* 2.0 1.8
*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.

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M SAN GRUPA ANNUAL REPORT 2024. 39
Business income and EBITDA margin
trend over 5 year period
The operating revenue of the Group increased by 6.4%, compared to the previous year, and amounted to EUR
502.0 million. The growth in operating revenue was achieved thanks to positive market trends, meaning an increase
in sales income.
The operating expenditure (without depreciation and amortization) increased by 6,4%, and in 2024 they amount
to EUR 490.5 million. The largest share in operating expenditure is the cost of goods sold, which increased by 6.0%
in 2024. In addition to the cost of goods sold, staff costs, costs of services and other costs have also increased. Due to
weakening inflationary pressures, the costs of raw materials and materials have decreased by 14.3%.
Graph 7: Business income and EBITDA margin trend over 5 year period
600
500
400
300
200
100
0
3.50%
3.00%
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
2020 2021 2022 2023 2024
2,43%
3,19%
Businessi revenue EBITDA margin
2,43%
2,30%
2,33%
352
360
432
472
502

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M SAN GRUPA ANNUAL REPORT 2024. 40
Since January 1, 2023, the official currency of the Republic of Croatia has been the euro, which has reduced the
volatility of financial revenues and expenses. The Group’s net financial expense amounted to EUR 4.0 million. The
Group ended the year with a net result after tax of EUR 3.9 million, representing a decrease of 15.9%.
In 2024, the Group’s EBITDA amounts to EUR 11.5 million (2023 EUR 11.0 million), which is an increase of 5.0%
compared to the previous year. After the challenging year of 2023, during which we witnessed various changes in the
market and the environment, there was a recovery in business operations and growth in operational performance
indicators in 2024. The operating profit amounted to EUR 8.5 million, representing an increase of 3.5% compared to
the year 2023.
Table 4: Operating costs in 2024
(in thousand EUR) 2023 2024 % Change
Costs of goods sold 402,694 426,834 6.0%
Cost of raw materials and
supplies
8,755 7, 50 4 (14.3%)
Staff costs 20,556 23,248
13.1%
Cost of services 23,238 26,839
15.5%
Oter expenses 5,729 6,072
6.0%
TOTAL 460,972 490,497
6.4%
Table 4: Operating costs in 2024

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M SAN GRUPA ANNUAL REPORT 2024. 41
As at 31 December 2024, the Group’s total assets increased by 10.2% year-on-year to EUR 206.4 million, with current
assets 17.2% and non-current assets 13.0% increasing at almost the same rate. The Group’s current assets account
for 73.1% of total assets. Inventories increased by 26.0% and trade receivables by 6.6%.
As at 31 December 2024, 65.5% of the sources of assets are current liabilities, 15.4% more than in the previous year.
Of the total amount of current liabilities, 66.9% is attributable to trade payables, an increase of 22.3% compared
to the previous year. The Group’s capital accounts for 23.8% of total sources of assets, with an increase of 8.7%
compared to the previous year. Total non-current liabilities fell by 11.4% compared to the previous year, in line with
the amortisation schedule.
ASSETS AND LIABILITIES
Structure of Financial Liabilities at 31 December 2024
Long-term bond liabilities
Short-term bank borrowings
and loans
Long-term borrowings
Current portion of longterm
bond liabilities
42.1%
45.0%
7.0%
5.9%
Graph 9: Structure of Financial Liabilities at 31 December 2024
Structure of Assets and Sources of Assets of the Group on 31 December 2024
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
8,0%
18,9%
73,1%
Cash and cash equivalents
Non-current assets
Current assets
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
10,7%
23,8%
65,5%
Non-current liabilities
Equity
Current liabilities
Graph 8: Structure of Assets and Sources of Assets of the Group in 2024
ASSETS SOURCES OF ASSETS

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M SAN GRUPA ANNUAL REPORT 2024. 42
The Group’s financial debt decreased by 4.8% in 2024, with a simultaneous decrease in debt of 18.4% and a
decrease in cash of 31.1%. The structure of total liabilities is shown in charts 8 and 9.
Graph 10: Movement of Financial Debt during 2024
Net financial debt 2023 Cash decrease Debt reduction Net financial debt 2024
22.333
-7.473
-8.537
21.269

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M SAN GRUPA ANNUAL REPORT 2024. 43
Table 5. Alternative performance measures
Alternative
performance
measures
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 operating income less total operating costs increased by depreciation and
amortization and impairment
EBITDA margin
EBITDA divided by total operating income
EBIT
Operating profit or total operating income less total operating costs
EBIT margin
EBIT divided by total operating income
Profit for the year
Profit for the year is the sum of profit before tax decreased by income tax
Net debt
Non-current and current liabilities to banks and other financial institutions increased for
long-term and short-term liabilities for securities and decreased for the balance of cash
and cash equivalents
Net debt / EBITDA
It means long-term and current liabilities towards banks and other financial institutions
increased for bond liabilities minus cash and cash equivalents.
Net profit margin
Net profit margin is net income as a percentage of operating income
Current ratio
Value of Current assets divided by current liabilities
The above-mentioned measures are not financial performance measures in accordance with the International
Financial Reporting Standards and should not be considered as alternatives to other operational impact indicators,
cash flows, or any other performance measures derived in accordance with the abovementioned 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.


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M SAN GRUPA ANNUAL REPORT 2024. 44
OPERATING
Risks
In its operations, the M SAN Grupa is exposed to numerous internal
and external influences that can cause the emergence of risks that
affect the realization of the Company’s plans and, indirectly, the
financial condition, meaning, the operating result.

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M SAN GRUPA ANNUAL REPORT 2024. 45
This Group of risks includes political, macroeconomic, risks of natural disasters and infectious diseases in all countries
where the Group operates. Although the consequences of exposure to these risks can have a significant impact on
the Group’s operations, the Group does not have the ability to influence exogenous factors that manifest themselves
through the mentioned risks.
OPERATING ENVIRONMENT RISK
POLITICAL RISK
The Group operates in the territory of the countries of the Adria region, and exposure to political risk can be manifested
in the deterioration of political and economic relations and cooperation between the countries of the Adria region,
which can affect the Group’s business processes and operations. At the global level, there are also certain risks that may
ultimately result in a shortage of goods on the market. A worsening of relations between the United States of America and
the People’s Republic of China is also possible, as well as a cooling of relations between the EU and the People’s Republic
of China. Given that the majority of goods from the Group’s portfolio are produced in the People’s Republic of China,
the imposition of certain additional customs barriers may affect the availability of goods, and thus the Group’s business
results. Also, compliance with different rules and regulations in different jurisdictions can cause significant costs.
MACROECONOMIC RISK
Through its international operations, the Group is under the influence of macroeconomic risks that appear both in
individual countries and at the global level. Most of the M SAN Grupa products from the IT and CE portfolio belong to
the Group of cyclical consumer goods, which moderately depend on the movement of GDP components, the most
significant of which is the influence
of personal consumption as a function of unemployment, disposable personal
income and inflation. In addition to personal consumption, it is also necessary to highlight investments, which are a
strong driver of demand for the Group’s products through the processes of digitization of economic entities.
RISK OF NATURAL DISASTERS
The risk of natural disasters in the form of floods, extreme droughts, earthquakes and others arises from events that
can unexpectedly, in a short time, cause significant material damage to property, or cause negative impacts on the
Group’s overall operations. Remediation of the consequences of such disasters can result in significant material
allocations, as well as a longer period of business interruption or limited scope of business under the given conditions.
The M SAN Grupa reduces exposure to the consequences of this risk by using asset insurance instruments.
RISK OF INFECTIOUS DISEASES
The Group is exposed to the risk of an infectious disease pandemic, which can affect a larger geographic area or
the entire world. In addition to the threat to the health and safety of employees, the risk arising from the pandemic
can lead to a shortage of goods, the temporary closure of one part of the business or a partial interruption of the
supply chain and the closure of business in all markets for an indefinite period. During the COVID-19 pandemic, the
Group proactively implemented health protection and infection prevention measures for employees, but also paid
special attention to the procurement of supplies in the circumstances of interrupted supply chains in order to provide
continuity of deliveries to its customers.

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M SAN GRUPA ANNUAL REPORT 2024. 46
INDUSTRY AND COMPETITION RISK
INDUSTRY RISK
The specificity of distribution in the IT equipment industry and in the distribution of consumer electronics is the
absence of long-term and exclusive contracts with principals. Mentioned industry is relatively young and these
characteristics are the result of the need to be able to respond quickly to the growing needs of the market for IT
equipment in conditions where no distribution network ready to respond to all logistical and financial requirements
existed.
Thus, not only in the Republic of Croatia but also in the EU and the world, multi-distribution appeared, where each
large principal has two or more distributors in the same market. This increases competitiveness, reduces margins
and forces distributors to be more efficient.
Likewise, distribution agreements are most often signed for the duration of one year and are usually automatically
renewed at the end of each period, but still provide the opportunity to the principal to not extend the agreement
without major financial or other obstacles, for example in case that the distributor has business problems and
significantly loses market share. There is also a risk in market consolidation where the principal may decide to reduce
the number of distributors with whom it operates in a certain market. The group is diversifying its principals, in order
to be able to replace possible lost income due to non-renewal of the contract by an individual principal, with income
from business with other principals.
COMPETITION RISK
In all markets where the Group operates, there is competition in the distribution of products with considering the
policy of the principal and the lack of exclusivity in the field of IT equipment distribution and consumer electronics.
In most product categories that the Group distributes, the right to sell the same or similar products has at least
two other distributors and in some cases three or four distributors. With the entry into the EU, the market of the
Republic of Croatia opened up to the free market import of goods from EU member countries, which enables other
distributors to market goods on Croatian market. The described opening of the market led to the entry of a certain
number of pan-European companies’ distributors to the market of the Republic of Croatia, either by acquiring a local
distributor or by opening local offices.
The market in which the Group operates is fragmented by a large number of partners engaged in sales of IT
equipment and consumer electronics or system integration. By concentration in the retail market, the share of larger
partners increases at the expense of smaller ones, and the probability increases direct cooperation of the principal
with large partners, which potentially reduces the market of the Group and can lead to a drop-in income. Although
in the previous examples the presence of a new distributor on the market did not have a significant impact on
the Group’s operations, in the event that the Group in the long term will not be able to adequately compete with
competitors, this may result in weakening competitive position of the Group and negatively affect its operations.

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M SAN GRUPA ANNUAL REPORT 2024. 47
BUSINESS RISK
RISK ASSOCIATED WITH THE EMERGENCE OF NEW DISRUPTIVE TECHNOLOGIES
There is a risk of the emergence of new technologies that will change existing business models and market needs
in a very short time, but it is not possible to predict them precisely. For example, virtualization has significantly
reduced the need for the number of servers that were previously significant distribution segment. Due to such
technological changes, IT equipment distributors and consumer electronics may be faced with the need to change
business dynamics. Group therefore invests resources in knowledge and monitoring of new technologies in order to
be able to react promptly and offer solutions in accordance with new user requirements. At the same time, trends in
the market, specifically digitization, significantly increases the need for IT equipment and services and thus, despite
solutions like virtualization, it increases the total need and capacity of the market.
RISK ASSOCIATED WITH INTELLECTUAL PROPERTY
The Group has its own brands Vivax, MS, MSGW, MS Energy, MS Lux in its portfolio, which represent its intellectual
property. The Group continuously invests considerable financial resources in their development, promotion and
protection of intellectual property rights, and today they make up a significant part of the overall business with a
further growth trend. Own brand products are sold on the market of the Republic of Croatia and the region (Republic
of Serbia, Bosnia and Herzegovina, Republic of North Macedonia, Republic of Montenegro) as well as on the EU and
world markets, meaning on the market of 39 different countries in total. The Group continuously and up-to-date
protects the names and signs of its brands and internet domains based on the national protection system (through
the State Institute for Intellectual Property), as well as at the international level (through the World Intellectual
Property Organization) and monitors the protection status of these rights, but there is always a risk that someone on
some market will try to abuse or violate the Publisher’s protected intellectual property. This would cause ambiguities
among consumers, and there is a possibility that by compromising the brand in this way, demand would fall, and thus
the Publisher’s operating results related to the sale of its own brand products.
RISK ASSOCIATED WITH IT SYSTEMS
The Group relies on efficient IT systems in its operations. A large amount of data about, for example, customers,
products, processes or employees would not be possible to process in real time without complex IT systems and
solutions that enable daily analyses. The greater the amount of data that is processed, the more complex and
vulnerable the system is.
Since distribution is an intensive activity with a large number of daily transactions, any downtime or inability to use
IT systems would cause damage to the business. The Group continuously invests in the development of IT systems
and their security. Tools and solutions are used to protect data from unauthorized access and backup copies are
made in different locations. However, the possibility of a system crash for various reasons (major hacker attack, long-
term power outage, and so on) cannot be ruled out, where just restoring all systems to full functionality would take
a certain amount of time and lead to harmful consequences.

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M SAN GRUPA ANNUAL REPORT 2024. 48
FINANCIAL RISK
This Group of risks includes market, credit and liquidity risk. Market risk implies exposure to changes in the fair value
of products or financial instruments depending on the movement of prices, interest rates and exchange rates. Credit
risk arises from the existing and future potential inability of business partners to meet their obligations towards
individual companies of the Group. Liquidity implies maintaining a sufficient amount of cash and working capital
and securing adequate financial resources in the form of credit lines.
FOREIGN EXCHANGE RISK
Considering the activity of the Group’s companies on the international and regional market, the Group’s companies
are exposed to foreign exchange risk arising from changes in foreign currency exchange rates mainly related
to the US dollar (USD), Serbian dinar (RSD) and Macedonian denar (MKD). As the companies of the Group have
currency exposure to suppliers for importing goods and to customers for sold goods in export, the impact of this
risk is mitigated by the Group in a natural way, meaning in the way that all goods imported in a foreign currency,
if sold abroad, are calculated in the same currency in which it is paid upon import, thus ensuring natural currency
protection. In addition, the Group monitors exchange rate movements and occasionally uses FX forward contracts.
The bulk of the Group’s credit liability exposure consists of liabilities in local currency and a smaller part in BAM and
MKD.
INTEREST RATE RISK
Interest rate risk arises from the obligations of Group companies to pay interest on short-term and long-term loans
that the Group has and may have in the future, as well as issued bonds. Loans granted at variable rates expose
the Group’s financial result to cash flow risk. Significant changes in interest rates could potentially have a negative
impact on the Group’s financial results. The most significant part of the Group’s credit obligations is contracted with
a fixed interest rate.
The Group continuously monitors changes in interest rates by simulating situations that point to a significant
increase in variable interest rates and takes into account refinancing options as well as alternative financing. Based
on these situations, the Group calculates the impact of interest rate changes on the profit and loss account.
CREDIT RISK
The risk of debt collection arises from the existing and future potential insolvency of business partners and their
inability to meet their obligations towards individual companies of the Group. The Group’s assets that bear the risk
of collection of receivables consist mainly of receivables from customers and other receivables.
The Group implements an active sales policy, as part of which it monitors business relations with all customers and
within the framework of predetermined credit limits and defined policies, whereby the level of approved credit
limits of insurance companies that insure claims plays an important role. Also, the Group defines a maximum credit
limit and payment terms for customers with a suitable credit history. Accordingly, strict measures are implemented
to control the collection and delivery of goods, as well as the acquisition of debtor’s security instruments (bank
guarantees, bills of exchange and promissory notes, registration of liens and occasional rights of return of goods).

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M SAN GRUPA ANNUAL REPORT 2024. 49
M SAN GRUPA GODIŠNJE IZVJEŠĆE 2024.
LIQUIDITY RISK
Liquidity implies maintaining a sufficient amount of cash and working capital and securing adequate financial
resources in the form of credit lines. Liquidity risk refers to the fact that the Group will not be able to fulfil its due
financial obligations in a timely manner due to a lack of own funds, a lack of available funds on the cash market
or the inability to lend from financial institutions.
Liquidity risk occurs as a result of other risk factors such as credit risk or refinancing risk and many others. The
occurrence of the Group’s liquidity risk could lead to a financial loss for the Group if the Group were to sell certain
assets below their market price in order to compensate for the lack of liquid assets.
REGULATORY RISK
The Group operates in the field of distribution of consumer electronics and IT equipment of the world’s leading
brands, as well as production and distribution of its own brands in the domain of consumer electronics and IT
equipment. The Group’s operations in relation to products of its own brands are subject to applicable national
and EU regulations in the field of electrical and electronic safety, energy efficiency, and so on, in such a way that
the products in question must have appropriate certificates and comply with applicable EU standards. The Group
continuously monitors and adapts to changes in regulations, and any failure to do so could result in various sanctions.
Furthermore, the Group may be exposed to higher costs that may arise as a result of eliminating potential violations
or adapting to changes in existing regulations, meaning introducing additional regulations regarding the field of
consumer electronics, which could affect business, financial position and business results.

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M SAN GRUPA ANNUAL REPORT 2024. 50
EXPECTATIONS OF THE MANAGEMENT FOR
THE YEAR 2025
The Group continues to build its future on capitalising on opportunities for further organic growth, primarily
based on strengthening the awareness of its own brands across Europe. Preparations for the process of expanding
business activities in several countries, which began at the end of 2024, continued at the beginning of 2025, when
the procedures for establishing subsidiaries were initiated, which are expected to start operating significantly in the
second half of 2025. The Group is also continuing to expand its logistics capacities as a necessary prerequisite for
realising the planned growth.
In addition to focusing on organic growth, the Group will continue to examine potential acquisitions that it believes
can contribute to business development.
Risk management, optimising business processes, investing in people and technology and increasing operational
efficiency remain the most important pillars of our activities. We are convinced that it is this focus that will enable M
SAN Grupa to continue its stable and sustainable growth in the coming years.
In the area of sustainability, we have a clear goal for the coming period: to develop a strong, realistic and actionable
sustainability strategy based on double materiality, an integrated analysis of impacts, risks and opportunities, and
targets that encompass all relevant aspects – environmental, social and governance.
We believe that sustainability is not something that happens all at once, but something that is built step by step – in
every business process, in every decision. Our task is to be ready, responsible and consistent.

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M SAN GRUPA ANNUAL REPORT 2024. 51
Pursuant to the Croatian Accounting Act, the Management Board is responsible for ensuring that Separate and
Consolidated financial statements are prepared for each financial year in accordance with the International Financial
Reporting Standards adopted by the European Union (IFRS), so that they may give a true and fair view of the
financial position as at the reporting date and performance of M SAN Grupa d.o.o., Zagreb (“Company”) and its
related companies (“Group”) for that period. Having performed the required analyses, the Company Management
Board has a reasonable expectation that the Company and the Group have adequate resources to continue as a
going concern in the foreseeable future.
For this reason, the Management Board continues to adopt the going concern basis in preparing the financial statements.
In preparing Separate and Consolidated financial statements, the Management Board is responsible for:
• selecting and consistently applying appropriate accounting policies;
• making justified and reasonable judgements and estimates;
• complying with applicable accounting standards; and
• preparing financial statements on a going concern basis.
The Management Board 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 their compliance with the Croatian
Accounting Act. The Management Board is also responsible for safeguarding the assets of the Company and Group
and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Responsibility for Separate and Consolidated
Financial Statements
Vladimir Brkljača
Member of the Management Board
Irena Langer-Breznik
Chairperson of the Management Board
Žarko Kruljac
Member of the Management Board
M SAN Grupa d.o.o., Dugoselska ulica 5, 10372 Rugvica, Republic of Croatia
30 April 2025
Alen Panić
Member of the Management Board
Bruno Jozić
Member of the Management Board

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M SAN GRUPA ANNUAL REPORT 2024. 52
AUDITOR’S REPORT AND
Financial
Statements

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M SAN GRUPA ANNUAL REPORT 2024. 53
AUDITOR’S REPORT AND

Graphics
Tel: +385 1 2395 741
Fax: +385 1 2303 691
E-mail: bdo-croatia.hr
BDO Croatia d.o.o.
10000 Zagreb
Radnička cesta 180
Registered with the Commercial Court in Zagreb under number 080044149
OIB 76394522236– GREB
INDEPENDENT AUDITOR'S REPORT
To the owner of M SAN GRUPA d.o.o., and its subsidiaries
Report on the audit of separate and consolidated annual financial statements
Opinion
We have audited the separate and consolidated financial statements of M SAN GRUPA d.o.o., (the
Company) and its subsidiaries (the Group), which include separate and consolidated Statement of
Financial Position as at 31 December 2024, separate and consolidated Statement of Comprehensive
Income, separate and consolidated Statement of Cash Flows and separate and consolidated
Statement of Changes in Equity for the year then ended, as well as the accompanying Notes to the
separate and consolidated annual Financial Statements, including information on significant
accounting policies.
In our opinion, the accompanying separate and consolidated annual financial statements give a true
and fair view of the financial position of the Company and the Group as of 31 December 2024, their
financial performance and their cash flows for the year then ended in accordance with International
Financial Reporting Standards adopted by the European Union (IFRS).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under these standards are described in detail in our Independent Auditor's Report in
the section on the Auditor's responsibilities for the audit of separate and consolidated annual
financial statements. We are independent from the Company and the Group in accordance with
International Code of Ethics for Professional Accountants (with International Independence
Standards) issued by the International Ethical Standards Board for Accountants (IESBA) (IESBA Code),
as well as in comply with ethical requirements relevant to our audit of the financial statements in
Croatia 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 the greatest
importance for our audit of the separate and consolidated annual financial statements of the
current period. We dealt with these matters in the context of our audit of the separate and
consolidated annual financial statements as a whole and in forming our opinion about them, and we
do not give a separate opinion on these matters.
This version of the Independent Auditor’s Report is translation from the original, which was prepared in the Croatian language. All possible
care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of
information, views or opinions, the original language version of the report takes precedence over this translation.
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BDO Croatia d.o.o.
INDEPENDENT AUDITOR'S REPORT (continued)
Report on the audit of separate and consolidated annual financial statements (continued)
Key audit matters (continued)
We have determined that the matter below is a key audit matter to be disclosed in our Independent
Auditor's Report.
Key audit matter
How we addressed the key audit matter
Revenue recognition
In the Statement of Comprehensive Income, the
Company and the Group reported sales income in the
amount of EUR 341,540 thousand and EUR 500,178
thousand, respectively.
Sales is generated by selling goods and providing
services. Revenues consist of the fair value of
compensation received or receivables for sold
products, goods or services during the regular
operations of the Company and the Group. Revenues
are shown in amounts less value added tax, volume
rebates and discounts.
In accordance with International Financial Reporting
Standard 15 - Revenue from contracts with customers,
the Company and the Group recognize sales revenue to
reflect the transfer of promised goods or services to
customers in an amount that reflects the consideration
to which they expect to be entitled in exchange for
those goods or services.
Considering the significance of the sales revenue
presented in the separate and consolidated Statement
of comprehensive income and the risk of recognizing
the same, we concluded that the occurrence, accuracy
and completeness of the revenue as well as their
distribution in the proper reporting period is a key
audit matter.
See notes 3. "Revenue recognition" and 5. "Sales" in the
accompanying separate and consolidated annual
financial statements.
Our audit procedures related to this matter
included, but were not limited to:
- Gaining an understanding of the sales
process by interviewing key sales personnel;
- Gaining an understanding of key controls
related to the recognition of sales revenue;
- Examining the design and implementation of
internal controls related to occurrence and
accuracy of the revenue recognition;
- Conducting detail tests on the sample in
order to identify unusual or irregular items
and the correct allocation of revenue
between reporting periods;
- Comparison of obtained external
confirmations of the amount of outstanding
trade receivables at the reporting date and
the balances presented in the Company's
and Group’s records on the same date;
- Assessment of the compliance of the sales
revenue recognition policy with
International Financial Reporting Standard
15 - Revenue from Contracts with
Customers;
- Assessing the adequacy of disclosures
related to the recognition of sales revenue
in accordance with International Financial
Reporting Standard 15 - Revenue from
Contracts with Customers.
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BDO Croatia d.o.o.
INDEPENDENT AUDITOR'S REPORT (continued)
Report on the audit of separate and consolidated annual financial statements (continued)
Key audit matters (continued)
We have determined that the matter below is a key audit matter to be disclosed in our Independent
Auditor's Report.
Key audit matter
How we addressed the key audit matter
Valuation of investments in subsidiaries and
affiliates
In its separate Statement of financial position as of
31 December 2024, the Company recognized
investments in subsidiaries and affiliates in the
amount of EUR 31,864 thousand.
Determining the valuation of individual investments
in subsidiaries and affiliates requires the Company's
Management to use various assumptions, projections
and forecasts related to future cash flows, applied
discount rates and growth rates in order to calculate
the expected future operations of subsidiaries.
Impairment of investments in subsidiaries and
affiliates is defined as a key audit matter due to its
significant carrying value as well as the wide range of
assumptions, projections and forecasts used in the
models and impairment assessment.
See notes 3. "Investments in subsidiaries", "Shares in
associates and joint ventures", 20. “Investment in
associates and other financial asset” and 20.1
„Investments in subsidiaries” in the related separate
and consolidated annual financial statements.
Our audit procedures in addressing this area
included, among other:
- Gaining an understanding of the Company's
accounting policies and processes
regarding impairment testing of
investments in subsidiaries and affiliates
- Review of the collected financial
information used in the consideration of
the existence of investment impairment
indicators and evaluation of the Company's
judgment of potential impairment
indicators;
- Critical evaluation of the selected model
used in the calculations of recoverable
value and fair value of subsidiaries and
affiliates where impairment indicators are
recognized to assess compliance with IFRS,
which have been adopted by the EU and
are consistently applied;
- An assessment of the reasonableness of the
key assumptions used in the model for
estimating the value of investments in
subsidiaries and affiliates, especially
projections of operating cash flows,
discount rates and estimates of long-term
growth rates;
- Comparison of key assumptions with
external information, where applicable;
- Test of the sensitivity of the investment
valuation model in subsidiaries and
affiliates to changes in key assumptions;
- Test of the mathematical accuracy of the
investment valuation model in subsidiaries
and affiliates;
- Review of related notes and assessment of
suitability of disclosures related to
investments in subsidiaries and affiliates to
assess compliance with IFRS, which have
been adopted by the EU.
Graphics
BDO Croatia d.o.o.
INDEPENDENT AUDITOR'S REPORT (continued)
Report on the audit of separate and consolidated annual financial statements (continued)
Key audit matters (continued)
We have determined that the matter below is a key audit matter to be disclosed in our Independent
Auditor's Report.
Key audit matter
How we addressed the key audit matter
Allocation of purchase price for acquired company
and goodwill impairment assessment
In the consolidated annual Statement of financial
position as of 31 December 2024, the Group reported
goodwill in the amount of EUR 9,804 thousand.
During 2024, the Group assessed the fair value of the
assets and liabilities of the acquired company Ask
Tec d.o.o., Kosovo as an integral part of the
allocation of the purchase price, which determined
the fair value of the net acquired assets. When
acquiring the company Ask Tec d.o.o. the difference
between the acquisition fee and the fair value of the
acquired company's net assets resulted in goodwill in
the amount of EUR 4,427 thousand.
The Group annually conducts an impairment test to
determine whether the amount of goodwill shown in
the financial statements is recoverable. The
calculation of the recoverable amount of goodwill is
based on the five-year revenue plan that companies
generate on local and foreign markets, developed by
the Group, taking into account the business strategy
and relevant market trends.
Allocation of the purchase price for the acquired
companies as well as the assessment of goodwill
impairment are defined as a key audit matter due to
the wide range of used assumptions, projections and
forecasts in the models and impairment assessment.
See notes 3. "Business combinations", "Goodwill", 6.
"Other operating income" and 18. "Goodwill" in the
corresponding separate and consolidated annual
financial statements.
Our audit procedures in addressing this area
included, among other:
- Gaining an understanding of the Group's
accounting policies and processes
regarding sales price allocation for
acquired companies and goodwill
impairment testing
- Critical evaluation of the selected model
used in the calculations of the fair value of
assets and liabilities of the acquired
companies and the assessment of
impairment of goodwill in order to assess
compliance with IFRS, which have been
adopted by the EU; and that it is
consistently applied
- Assessment of the reasonableness of the
key assumptions used in the asset and
liability valuation models of the acquired
companies, as well as in the goodwill
impairment assessments, especially the
projections of operating cash flows,
discount rates and estimates of long-term
growth rates;
- Comparison of key assumptions with
external information, where applicable;
- Sensitivity test of the asset and liability
valuation model of acquired companies as
well as goodwill impairment valuations to
changes in key assumptions;
- Mathematical accuracy test of investment
valuation models in subsidiaries and
affiliates;
- Reviewing the related notes and evaluating
the appropriateness of the disclosures
related to the allocation of the purchase
price and goodwill to assess compliance
with IFRS, which have been adopted by the
EU.
Graphics
BDO Croatia d.o.o.
INDEPENDENT AUDITOR'S REPORT (continued)
Report on the audit of separate and consolidated annual financial statements (continued)
Other information
Management is responsible for other information. Other information includes the Management
Report, Statement on the Application of the Code of Corporate Governance and Sustainability
Report included in the Annual Report, but not including the separate and consolidated annual
financial statements and our Independent Auditor's Report thereon.
Our opinion on the separate and consolidated annual financial statements does not include other
information.
In connection with our audit of the separate and consolidated annual financial statements, it is our
responsibility to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the separate and consolidated annual financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
Regarding the Management Report and the Statement on the Application of the Corporate
Governance Code, we also carried out the procedures required by the Accounting Act. These
procedures include considering whether the Company’s Management Report has been prepared in
accordance with Articles 22 and 24 of the Accounting Act and whether the Statement on the
Application of the Corporate Governance Code has been prepared in accordance with Article 25 of
the Accounting Act.
Based on the performed procedures, to the extent that we are able to assess it, we report that:
1. The information in the attached Management Report and Statement on the Application of the
Corporate Governance Code is harmonized, in all significant respects, with the attached separate
and consolidated annual financial statements;
2. The attached Management Report is compiled in accordance with Articles 22 and 24 of the
Accounting Act; and
3. The attached Statement on the Application of the Corporate Governance Code includes the
information defined in Article 25 of the Accounting Act;
4. In relation to the Sustainability Report, which is included as part of the other information and
forms a separate part of the Management Report, we have performed limited procedures to issue a
limited assurance report, the results of which are presented as a separate limited assurance report
with a modified conclusion.
Based on the knowledge and understanding of the operations of the Company and the Group and
their environment acquired within the audit of separate and consolidated annual financial
statements, we are obliged to report if we have established that there are significant
misrepresentations in the attached Management Report and Statement on the Application of the
Corporate Governance Code. In this sense, we have nothing to report.
Responsibilities of the Management Board and those charged with governance for the separate
and consolidated annual financial statements
Management Board is responsible for the preparation of separate and consolidated annual financial
statements that give a true and fair view in accordance with IFRSs, and for those internal controls
that the Management Board determines are necessary to enable the preparation of separate and
consolidated annual financial statements that are free from material misstatement due to fraud or
error. In preparing the separate and consolidated annual financial statements, Management Board is
responsible for evaluation of the Company's and Group’s ability to continue operations assuming
going concern principle, disclosure, if applicable, of issues related to going concern, and using
accounting based on going concern principle, unless the Management Board intends to liquidate the
Company or the Group or discontinue its business or there is no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the financial reporting process
established by the Company.
Graphics
BDO Croatia d.o.o.
INDEPENDENT AUDITOR'S REPORT (continued)
Report on the audit of separate and consolidated annual financial statements (continued)
Auditor’s Responsibility for the audit of separate and consolidated annual financial statements
Our goals are to obtain reasonable assurance about whether the separate and consolidated annual
financial statements, as a whole, are free from material misstatement as a result of fraud or error,
and to issue an Independent Auditors’ Report that includes our opinion. Reasonable assurance is a
higher level of assurance, but this is no guarantee that an audit performed in accordance with IAS
will always detect a material misstatement when it exists. Misstatements may result from fraud or
error and are considered as important, if it can reasonably be expected that, individually or in
aggregate, they affect the economic decisions of users made based on these separate and
consolidated annual financial statements.
As an integral part of the audit report in accordance with ISA, we make professional judgments and
maintain professional scepticism throughout the audit process. In addition, we:
• Identify and assess the risks of material misstatement of the separate and consolidated
annual financial statements due to fraud or error, design and perform audit procedures in
response to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of non-detecting a material misstatement of fraud
is greater than the risk of error, as fraud may involve collusion, forgery, intentional
omission, misrepresentation or circumvention of internal controls.
• Acquire an understanding of internal controls relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Company's and Group’s internal controls.
• Assess the appropriateness of the accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of the accounting basis used based on the going concern
principle used by the Management Board and, based on the obtained audit evidence, we
conclude on whether there is significant uncertainty regarding events or circumstances that
may create significant doubts about the ability to continue operating for an indefinite
period of time. If we conclude that there is significant uncertainty, in our Independent
Auditors’ Report we are required to call our attention to related disclosures in the separate
and consolidated annual financial statements or, if these are inappropriate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our
Independent Auditors’ Report. However, future events or conditions may cause the
Company and Group to discontinue their operations on a going concern.
• Evaluate the overall presentation, structure and content of the separate and consolidated
annual consolidated annual financial statements, including disclosures, as well as whether
the separate and consolidated annual financial statements reflect the transactions and
events which they are based on in a way that achieves a fair presentation.
• Obtain sufficient and appropriate audit evidence regarding the financial information of
entities or business activities within the Group to express an opinion on these consolidated
annual financial statements. We are responsible for directing, supervising and performing
the Group's audit. We are solely responsible for our audit opinion.
We communicate with those charged with governance, among other issues, the intended scope and
timing of audit and important audit findings, including any significant deficiencies in internal
controls identified during our audit.
We also make a statement to those charged with governance that we have complied with the
relevant ethical requirements regarding independence and that we will communicate with them any
relationship and other matters that may reasonably be considered to affect our independence as
well as, where applicable, on related safeguards.
Graphics
BDO Croatia d.o.o.
INDEPENDENT AUDITOR'S REPORT (continued)
Report on the audit of separate and consolidated annual financial statements (continued)
Auditor’s Responsibility for the audit of separate and consolidated annual financial statements
(continued)
Among the issues communicated to those charged with governance, we identify those issues that
are the most important in auditing the separate and consolidated annual financial statements of the
current period and therefore present the key audit matters.
We describe these matters in our Independent Auditor's Report, unless the law or regulation
prevents the matters from being publicly disclosed, or when we decide, in extremely rare
circumstances, that the matter should not be reported in our Independent Auditors’ Report because
the negative consequences of the disclosure could reasonably be expected to outweigh the benefits
of public interest from such communication.
Statement on other legal requirements
On 20 September 2024, we were appointed by the General Assembly of the Company to audit the
separate and consolidated annual financial statements for 2024.
We have been engaged to perform an audit of the separate and consolidated annual financial
statements of the Company and the Group for the first time in 2023, which represents an
engagement of two years.
In the audit of the separate financial statements of the Company for 2024, we determined the
materiality for the separate financial statements as a whole in the amount of EUR 5,834 thousand,
which represents approximately 1.7% of sales income for 2024. In the audit of the consolidated
annual financial statements of the Group for 2024, we determined the materiality for the
consolidated annual financial statements as a whole in the amount of EUR 8.232 thousand, which
represents approximately 1.6 % of sales income for 2024.
We have chosen sales income as measures of materiality because we believe that these are the
most appropriate measures of the performance of the Company's and Group's operations.
Our audit opinion is consistent with the supplementary report for the Audit committee of the
Company prepared in accordance with the provisions of Article 11 of Regulation (EU) no. 537/2014.
During the period between the starting date of the audited separate and consolidated annual
financial for 2024 and the date of this Independent Auditor’s Report, we did not provide prohibited
non-audit services to the Company and its subsidiaries and did not provide services for the design
and implementation of internal control procedures or risk management related to preparation
and/or control of financial information or the design and implementation of technological systems
for financial information, and we have maintained independence in relation to the Company and the
Group.
Graphics
BDO Croatia d.o.o.
INDEPENDENT AUDITOR'S REPORT (continued)
Report on the audit of separate and consolidated annual financial statements (continued)
Report based on the requirements of Delegated Regulation (EU) 2018/815 amending Directive
2004/109 / EC of the European Parliament and the Council regarding regulatory technical
standards for the specification of the European Single Electronic Format
Auditor's assurance report on the compliance of separate financial statements (financial
statements), prepared pursuant to the provision of Article 462, paragraph 5 of the Capital Market
Act (OG 85/24) by applying the Delegated Regulation (EU) 2018/815 establishing a single electronic
reporting format for issuers (the ESEF Regulation).
We conducted the engagement with expressing reasonable assurance as to whether the financial
statements prepared for the purposes of public disclosure pursuant to Article 462, paragraph 5 of
the Capital Market Act, which are contained in the electronic file M SAN Grupa FS 2024 EN, in all
material aspects prepared in accordance with the requirements of the ESEF Regulation
Responsibilities of Management and those charged with governance
The Management of the Company and the Group is responsible for the preparation and content of
the financial statements in accordance with the ESEF Regulation.
In addition, the Management of the Company and the Group is responsible for maintaining a system
of internal controls that reasonably assures the preparation of financial statements without material
non-compliance with the reporting requirements of the ESEF Regulation, whether due to fraud or
error.
The Management of the Company and the Group is also responsible for:
- public disclosure of the financial statements contained in the report in a valid XBRL format,
and
- selection and use of XBRL codes in accordance with the requirements of the ESEF
Regulation.
Those in charge of governance are responsible for overseeing the preparation of financial
statements in the ESEF format as part of the financial reporting process.
Auditor's responsibilities
It is our responsibility to express a conclusion, based on the audit evidence gathered, as to whether
the financial statements are free from material non-compliance with the requirements of the ESEF
Regulation. We conducted this reasonable assurance engagement in accordance with International
Standard on Assurance Engagements (ISAE) 3000 (revised) - Assurance engagements other than
audits or reviews of historical financial information.
Procedures performed
The nature, timing and extent of the procedures selected depend on the auditor's judgment.
Reasonable assurance is a high level of assurance. However, it does not assure that the scope of
testing will reveal all significant (material) non-compliance with the ESEF Regulation.
As part of the selected procedures, we have performed the following activities:
- we have read the requirements of the ESEF Regulation,
- we have gained an understanding of the Bank's internal controls relevant to the application of
the requirements of the ESEF Regulation,
- we have identified and assessed the risks of material non-compliance with the ESEF Regulation
due to fraud or errors; and
- based on that, we have planned and designed procedures for responding to assessed risks and
for obtaining reasonable assurance for the purpose of expressing our conclusion.
Graphics
BDO Croatia d.o.o.
INDEPENDENT AUDITOR'S REPORT (continued)
Report on the audit of separate and consolidated annual financial statements (continued)
Report based on the requirements of Delegated Regulation (EU) 2018/815 amending Directive
2004/109 / EC of the European Parliament and the Council regarding regulatory technical
standards for the specification of the European Single Electronic Format (continued)
Procedures performed (continued)
The aim of our procedures was to assess whether:
• the financial statements, which are included in the separate and consolidated annual
report, are prepared in the valid XHTML format,
• the information contained in the separate and consolidated annual financial statements
required by ESEF Regulation, are labelled and all labels meet the following requirements:
• XBRL mark-up language was used,
• the elements of the basic taxonomy listed in the ESEF Regulation with the closest
accounting meaning were used, unless an additional element of taxonomy has been
created in accordance with Annex IV ESEF Regulations,
• the labels comply with the common labelling rules under the ESEF Regulation.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our conclusion.
Conclusion
In our opinion, based on the procedures performed and the evidence obtained, the financial
statements presented in ESEF format, contained in the above-mentioned electronic file and based
on the provision of Article 462, paragraph 5 of the Capital Market Act prepared for the purposes of
public disclosure, in all material respects are in line with the requirements from articles 3, 4 and 6
of the ESEF Regulation for the year ended 31 December 2024.
In addition, as well as the opinion contained in this Independent Auditor's Report for the
accompanying separate and consolidated annual financial statements and the report for the year
ended 31 December 2024, we do not express any opinion on the information contained in these
statements or other information contained in the file stated above.
The engaged partner involved in the audit of the Company's and Group’s separate and consolidated
annual financial statements for 2024 which results in this Independent Auditor’s Report, is the
certified auditor Vedrana Stipić.
Zagreb, 30 April 2025
BDO Croatia d.o.o.
Radnička cesta 180
10000 Zagreb
Hrvoje Stipić, President of the
Management Board
Vedrana Stipić, Certified Auditor
Graphics
Consolidated statement of comprehensive income
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 63



Notes
2024

2023
OPERATING INCOME




Sales
5
500,178

467,963
Cost of goods sold
8
(426,834)

(402,694)
Gross profit

73,344

65,269
Other operating income
6
1,871

3,709
(Decrease)/Increase in inventories of finished goods and work in progress

(8)

292





OPERATING EXPENSES




Cost of raw material and supplies
7
(7,504)

(8,755)
Cost of services
9
(26,839)

(23,238)
Staff costs
10
(23,248)

(20,556)
Depreciation and amortization
11
(3,002)

(2,738)
Other expenses
12
(5,447)

(5,300)
Impairment allowance
13
(201)

(282)
Provisions
13.1
(424)

(147)
Total operating expenses

(66,665)

(61,016)
Operating profit

8,542

8,254





FINANCIAL INCOME AND EXPENSES




Financial income
14.1.
2,098

1,951
Financial expenses
14.2.
(6,107)

(4,970)
Net financial expense

(4,009)

(3,019)





Share of net result of associates
15
198

24





Profit before tax

4,731

5,259
Income tax
16
(853)

(648)
Profit for the year

3,878

4,611





OTHER COMPREHENSIVE INCOME




Translation exchange differences and other

45

23
Total comprehensive income for the year

3,923

4,634





Profit attributable to:




Equity holders of the Company

3,914

4,608
Non-controlling interests

(36)

3


3,878

4,611
Total comprehensive income attributable to:




Equity holders of the Company

3,959

4,631
Non-controlling interests

(36)

3


3,923

4,634




Accounting policies and notes are integral part of these annual financial statement


Graphics
Consolidated statement of financial position
at 31 December 2024
(all amounts are expressed in thousands of euro)
64 M SAN GRUPA ANNUAL REPORT 2024
ASSETS
Notes
31 December
2024
31 December
2023
NON-CURRENT ASSETS
Intangible assets
17
5,892
7,452
Goodwill
18
9,804
5,377
Property, plant and equipment
19
3,079
3,058
Right of use assets
19
1,665
873
Investment in associates and other financial asset
20
15,384
15,186
Deposits and loans given
25
3,084
2,468
Long-term receivables
20
24
Deferred tax assets
16
8
7
TOTAL NON-CURRENT ASSETS
38,936
34,445
CURRENT ASSETS
Inventories
21
61,962
49,185
Trade receivables
23
75,211
70,550
Prepayments
22
5,198
2,902
Given loans and deposits
25
1,441
1,719
Prepaid expenses and accrued income
26
3,086
1,180
Other receivables
24
4,071
3,280
Cash and cash equivalents
27
16,542
24,015
TOTAL CURRENT ASSETS
167,511
152,831
TOTAL ASSETS
206,447
187,276
Accounting policies and notes are integral part of these annual financial statement

Graphics
Consolidated statement of financial position (continued)
at 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 65
EQUITY AND LIABILITIES
Notes
31 December
2024
31 December
2023
EQUITY
Share capital
28
14,493
14,493
Legal reserves
2,220
2,220
Reserves from exchange of foreign currencies
(578)
(623)
Retained earnings
29
33,014
29,100
EQUITY HOLDERS OF THE PARENT
49,149
45,190
Non-controlling interest
30
30
66
TOTAL EQUITY
49,179
45,256
NON-CURRENT LIABILITIES
Provisions
31
956
999
Long-term borrowings
32
2,215
3,354
Long-term bond liabilities
35
15,927
18,581
Other long-term liabilities
36
1,063
651
Long-term lease liabilities
33
1,190
406
Deffered tax liability
16
641
824
TOTAL NON-CURRENT LIABILITIES
21,992
24,815
CURRENT LIABILITIES
Short-term bank borrowings and loans
34
17,015
21,759
Current portion of long-term bond liabilities
35
2,654
2,654
Trade payables
38
90,585
74,059
Current portion of long-term lease liabilities
33
561
492
Payables towards employees
1,426
1,241
Income tax liability
424
200
Other current liabilities
37
20,233
13,857
Accrued expenses and deferred income
39
2,378
2,943
TOTAL CURRENT LIABILITIES
135,276
117,205
TOTAL EQUITY AND LIABILITIES
206,447
187,276
Accounting policies and notes are integral part of these annual financial statement


Graphics
Consolidated statement of changes in shareholder's equity
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
66 M SAN GRUPA ANNUAL REPORT 2024
Share
capital
Legal
reserves
Foreign
currency
translation
reserves
Retained
earnings
Equity
holders of
the parent
Non-
controlling
interest
Total
Balance at 1 January 2023
14,493
2,220
(646)
24,492
40,559
63
40,622
Profit for the year
-
-
-
4,608
4,608
3
4,611
Other comprehensive income
-
-
23
-
23
-
23
Total comprehensive income for the year
-
-
23
4,608
4,631
3
4,634
Balance at 31 December 2023
14,493
2,220
(623)
29,100
45,190
66
45,256
Profit for the year
-
-
-
3,914
3,914
(36)
3,878
Other comprehensive income
-
-
45
-
45
-
45
Total comprehensive income for the year
-
-
45
3,914
3,959
(36)
3,923
Balance at 31 December 2024
14,493
2,220
(578)
33,014
49,149
30
49,179
Accounting policies and notes are integral part of these annual financial statement


Graphics
Consolidated statement of cash flows
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 67
Notes
2024
2023
CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the year
3,878
4,611
Adjusted by:
Income tax
16
853
648
Depreciation and amortization
11
3,002
2,738
Impairment allowance of trade receivables
13, 19
201
279
Net movement of provisions
31, 37
395
123
Loss on disposal of non-current assets
(18)
-
Profit from bargain purchase
(71)
(1,560)
Net interest expense
14.1., 14.2
2,950
2,370
Net other non-cash adjustments
(7)
(36)
11,183
9,173
CHANGES IN WORKING CAPITAL
(Increase)/decrease in inventory
(12,776)
12,317
Increase in trade receivables
(4,570)
(18,230)
Increase in given advances
(2,297)
(1,290)
Increase in other receivables
(949)
(1,192)
(Decrease)/increase) in received advances
(542)
1,451
Increase in trade payables
16,600
12,302
Expected payment for the acquisition of subsidiaries
37
601
285
(Decrease)/increase in other current liabilities
(1,459)
2,929
CASH GENERATED FROM OPERATIONS
5,791
17,745
Interests paid
(1,790)
(1,198)
Income taxes paid
(516)
(572)
Net cash generated from/(used in) operating activities
3,485
15,975
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment and intangible assets
17, 19
(1,235)
(1,185)
Interests collected
312
172
Cash disbursements for acquisition of subsidiaries
43
(788)
(2,363)
Cash receipts from acquisition of subsidiaries
43
349
60
Cash receipts from the sale of fixed assets
44
208
(Increase) in other financial assets
(200)
(41)
Cash disbursements from loans given
(235)
(1,091)
Net cash used in from investing activities
(1,753)
(4,240)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash receipts from financial institutions
97,587
95,241
Payments made to financial institutions
(103,568)
(94,298)
Liability repayments for right-of-use-assets
33
(570)
(535)
Cash disburstments for issued bonds
35
(2,654)
(2,654)
Net cash used in financing activities
(9,205)
(2,246)
Net increase in cash and cash equivalents
(7,473)
9,489
Cash and cash equivalents at the beginning of the year
27
24,015
14,526
Cash and cash equivalents at the end of year
27
16,542
24,015
Accounting policies and notes are integral part of these annual financial statement


Graphics
Separate statement of comprehensive income
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
68 M SAN GRUPA ANNUAL REPORT 2024
Notes
2024
2023
OPERATING INCOME
Sales
5
341,540
335,157
Cost of goods sold
8
(306,123)
(300,115)
Gross profit
35,417
35,042
Other operating income
6
1,210
1,249
Decrease in the value of inventories of work-in-progress and
finished goods
(3)
(200)
OPERATING EXPENSES
Cost of raw material and supplies
7
(2,209)
(3,271)
Cost of services
9
(18,425)
(16,661)
Staff costs
10
(8,698)
(8,316)
Depreciation and amortization
11
(973)
(1,396)
Other expenses
12
(2,266)
(2,003)
Impairment allowance
13
(96)
(84)
Provisions
13.1
(105)
(66)
Total operating expenses
(32,772)
(31,797)
OPERATING PROFIT
3,852
4,294
FINANCIAL INCOME AND EXPENSES
Financial income
14.1.
2,965
1,954
Financial expenses
14.2.
(5,472)
(4,793)
Net financial expense
(2,507)
(2,839)
Profit before tax
1,345
1,455
Income tax
16
(72)
(71)
PROFIT FOR THE YEAR
1,273
1,384
OTHER COMPREHENSIVE INCOME
-
-
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
1,273
1,384
Accounting policies and notes are integral part of these annual financial statement


Graphics
Separate statement of financial position
at 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 69
ASSETS
Notes
31 December
2024
31 December
2023
NON-CURRENT ASSETS
Intangible assets
17
2,296
2,805
Property, plant and equipment
19
579
603
Right of use assets
19
21
42
Investments in subsidiaries and associates
20
31,864
26,040
Deposits and loans given
25
1,930
2,429
Long-term receivables
17
17
TOTAL NON-CURRENT ASSETS
36,707
31,936
CURRENT ASSETS
Inventories
21
35,874
30,283
Trade receivables
23
53,016
46,539
Prepayments
22
4,145
2,491
Receivables from employees
11
12
Other financial assets
43
41
Loans and deposits given
25
2,358
353
Prepaid expenses and accrued income
26
1,093
34
Other receivables
24
468
386
Cash and cash equivalents
27
9,001
16,302
TOTAL CURRENT ASSETS
106,009
96,441
TOTAL ASSETS
142,716
128,377
Accounting policies and notes are integral part of these annual financial statement

Graphics
Separate statement of financial position (continued)
at 31 December 2024
(all amounts are expressed in thousands of euro)
70 M SAN GRUPA ANNUAL REPORT 2024
EQUITY AND LIABILITIES
Notes
31 December
2024
31 December
2023
EQUITY
Share capital
28
14,493
14,493
Legal reserves
2,143
2,143
Retained earnings
29
4,071
2,798
TOTAL EQUITY
20,707
19,434
NON-CURRENT LIABILITIES
Provisions
31
734
790
Long-term bond liabilities
35
15,927
18,581
Long-term loans liabilities
32
1,914
2,731
Other long-term liabilities
36
1,053
641
Long-term lease liabilities
33
-
2
TOTAL NON-CURRENT LIABILITIES
19,628
22,745
CURRENT LIABILITIES
Short-term bank borrowings
32
12,906
16,770
Current portion of non-current bond payables
35
2,654
2,654
Trade payables
38
71,701
58,202
Other current liabilities
37
13,479
7,382
Current portion of long-term lease liabilities
33
3
20
Payables to employees
475
458
Accrued expenses and deferred income
39
1,163
712
TOTAL CURRENT LIABILITIES
102,381
86,198
TOTAL EQUITY AND LIABILITIES
142,716
128,377
Accounting policies and notes are integral part of these annual financial statement


Graphics
Separate statement of changes in shareholder's equity
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 71
Share
capital
Legal
reserves
Retained
earnings
Total
Balance at 1 January 2023
14,493
2,143
1,414
18,050
Profit for the year
-
-
1,384
1,384
Total comprehensive income
-
-
1,384
1,384
Balance at 31 December 2023
14,493
2,143
2,798
19,434
Profit for the year
-
-
1,273
1,273
Total comprehensive income
-
-
1,273
1,273
Balance at 31 December 2024
14,493
2,143
4,071
20,707
Accounting policies and notes are integral part of these annual financial statement


Graphics
Seperate statement of cash flows
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
72 M SAN GRUPA ANNUAL REPORT 2024
CASH FLOWS FROM OPERATING ACTIVITIES
Notes
2024
2023
Profit for the year
1,273
1,384
Adjusted by:
Income tax
16
72
71
Depreciation and amortization
11
973
1,396
Impairment allowance of trade receivables
13
11
84
Impairment of given loans
-
308
Losses from investments in shares
15.2
-
95
Disposed value of non-current assets
9
-
Net movement in long-term provisions
105
66
Net interest expense
14.1.,
14.2.
2,491
1,947
4,934
5,351
CHANGES IN WORKING CAPITAL
Decrease in inventory
(5,591)
9,415
Increse in trade receivables
(6,477)
(13,397)
Increase in given advances
(1,654)
(1,171)
(Increase)/decrease in other receivables
(1,810)
396
Increase/(decrease)in received advances
641
(902)
Increase in trade payables
14,287
11,283
The expected cash disbursement for the acquisition of the subsidiaries
37
601
285
(Decrease)/Increase in other current liabilities
(1,357)
715
CASH GENERATED FROM OPERATIONS
3,574
11,975
Interests paid
(1,593)
(1,150)
Income taxes paid
(72)
(52)
Net cash generated from operating activities
1,909
10,773
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment and intangible assets
17, 19
(429)
(661)
Interests collected
248
168
Cash disbursements for acquisition of subsidiaries
(788)
(2,363)
Dividends received
632
-
Increase in other financial assets
-
(41)
Cash receipts/ (disbursements) for loans given
(1,519)
8
Cash receipts from the sale of fixed assets
-
3
Net cash used in investing activities
(1,856)
(2,886)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash receipts from credit institution
61,470
65,280
Repayments of loans to financial institutions
(66,151)
(64,052)
Liability repayments for right-of-use-assets
(19)
(52)
Cash disbursements for issued bonds
35
(2,654)
(2,654)
Net cash used in financing activities
(7,354)
(1,478)
Net increase in cash and cash equivalents
(7,301)
6,409
Cash and cash equivalents at the beginning of the year
27
16,302
9,893
Cash and cash equivalents at the end of year
27
9,001
16,302
Accounting policies and notes are integral part of these annual financial statement


Graphics
Notes to the consolidated and separate annual financial statements
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 73

1. GENERAL INFORMATION
M SAN GRUPA d.o.o., Zagreb, is a limited liability company incorporated in Croatia on 17 July 1997. The sole
owner and founder of the Company is Mr. Stipo Matić.

The Company is registered for the manufacture of office machines and computers, software consulting and
supply, office machine and computer maintenance, sale and purchase of goods, trade mediation on domestic
and international markets, and computer training.
The Company's registered seat is in Rugvica (Rugvica Municipality), Dugoselska ulica 5, 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 2024 and 2023:
Irena Langer-Breznik, President of Management Board
Žarko Kruljac, Vice President of Management Board
Slaven Stipančić, Member of Management Board until March 1, 2025
Goran Kotlarević, Member of Management Board until March 1, 2025
Miroslav Gabrić, Member of Management Board, until March 8, 2023
Alen Panić, Member of Management Board,
Vladimir Brkljača, Member of Management Board,
Bruno Jozić, Member of Management Board since June 1, 2024

Supervisory Board in 2024 and 2023:
Željko Menalo, President of Supervisory Board
Miroslav Huzjak, Deputy President of Supervisory Board
Stipo Matić, Member of Supervisory Board until March 1, 2025
Marko Rašić, Member of Supervisory Board
Snježana Matić, Member of Supervisory Board until April 7, 2024
Branko Bojanić, Member of Supervisory Board since August 1, 2024
Goran Kotlarević, Member of Supervisory Board since March 1, 2025
Audit committee in 2024 and 2023:
Branislav Vrtačnik
Kristina Alebić
Branka Gerić


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
74 M SAN GRUPA ANNUAL REPORT 2024
1. GENERAL INFORMATION (CONTINUED)
Subsidiaries
The Group consist of the company and the following subsidiaries in which the company has an ownership stake
of more than 50% and control:
Ownership in %
Name of related party Country Main Activity
2024 2023
KIM TEC D.O.O. VITEZ BIH 100% 100% Distribution of IT equipment
- KIM TEC SERVIS D.O.O. VITEZ BIH 100% 100% Maintenance of IT equipment
- KIM TEC EKO D.O.O. BIH 95% 95% Collection of EE waste
CENTAR KOMPETENCIJE ZA Croatia 100% 100% Consulting
ZELENU ENERGIJU D.O.O.
KIM TEC D.O.O. PODGORICA Montenegro 100% 100% Distribution of IT equipment
PAKOM KOMPANI D.O.O.E.L. North Macedonia 100% 100% Distribution of IT equipment
KIM TEC D.O.O. BEOGRAD Serbia 100% 100% Distribution of IT equipment
- KIM TEC SERVIS D.O.O. Serbia 100% 100% Maintenance of IT equipment
BEOGRAD
M SAN LOGISTIKA D.O.O. Croatia 100% 100% Transport and logistics
M SAN EKO D.O.O. Croatia 100% 100% Collection of EE waste
MR SERVIS D.O.O. Croatia 60% 60% Maintenance of IT equipment
ZELENA AGENDA 1.0. D.O.O. Croatia - 100% Consulting
KORVUS MK D.O.O.E.L North Macedonia 100% 100% ICT
ALTERNA DISTRIBUCIJA D.O.O. Slovenia 100% 100% Distribution of IT equipment
- MR PLUS SERVIS D.O.O. Slovenia 100% 100% Maintenance of IT equipment
DATA LINK D.O.O. Croatia 100% 100% Manufacturing
ASK TEC D.O.O. Hrvatska 100% - Distribution of IT equipment
In May 2024, the Company acquired 100% ownership of shares in ASK TEC d.o.o., Priština, Kosovo, based
on a share purchase agreement. The company operates as a distributor of IT equipment.
In July 2023, the Company acquired DATA LINK, established in 1995. The company specializes in the
production of professional LED lighting, and is engaged in the development of products and production
technologies, software solutions, and LED lighting technologies.

Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 75

2. APPLICATION OF NEW STANDARDS, INTERPRETATIONS AND AMENDED INTERNATIONAL
FINANCIAL REPORTING STANDARDS (IFRSs)
INITIAL APPLICATION OF NEW AMENDMENTS TO THE EXISTING STANDARDS AND
INTERPRETATIONS EFFECTIVE FOR THE CURRENT FINANCIAL PERIOD (“IFRSs”)
Initial application of new amendments to the existing standards effective for the current financial period
The following amendments to the existing standards issued by the International Accounting Standards Board
(IASB) and adopted by the EU are effective for the period beginning 1 January 2024:
• Supplier Finance Arrangements (Amendments to IAS 7 “Statement of Cash Flows” & IFRS 7
“Financial Instruments: Disclosures”);
• Lease Liability in a Sale and Leaseback (Amendments to IFRS 16 “Leases”);
• Classification of Liabilities as Current or Non-Current (Amendments to IAS 1 “Presentation of
Financial Statements”); and
• Non-current Liabilities with Covenants (Amendments to IAS 1 “Presentation of Financial Statements”)
The adoption of these amendments to existing standards did not lead to significant changes in the Company's
and Group financial statements.

Standards, amendments to existing standards and interpretations issued by the IASB and adopted in
the European Union, but not yet effective
The following amendments are effective for the annual reporting period beginning 1 January 2025:
• Lack of Exchangeability (Amendment to IAS 21 “The Effects of Changes in Foreign Exchange Rates”);
Standards and amendments to the existing standards issued by IASB and not yet adopted by the EU
IFRS currently adopted in the European Union do not differ significantly from the regulations adopted by the
International Accounting Standards Board (IASB), except for the following new standards and amendments
to existing standards, the adoption of which the European Union has not yet decided on (date of entry into
force set out below relate to IFRSs issued by the IASB):
The following amendments are effective for the annual reporting period beginning 1 January 2026:
• Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS
9 “Financial Instruments” and IFRS 7 “Financial Instruments: Disclosures”)
• Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 “Financial Instruments”
and IFRS 7 “Financial Instruments: Disclosures”)
The following standards are effective for the annual reporting period beginning 1 January 2027:
• IFRS 18 Presentation and Disclosure in Financial Statements
• IFRS 19 Subsidiaries without Public Accountability: Disclosures.
The Company and Group is currently assessing the effect of these new accounting standards and
amendments.


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
76 M SAN GRUPA ANNUAL REPORT 2024
2. APPLICATION OF NEW STANDARDS, INTERPRETATIONS AND AMENDED INTERNATIONAL
FINANCIAL REPORTING STANDARDS (IFRSs) (CONTINUED)
IFRS 18 Presentation and Disclosure in Financial Statements, which was issued by the IASB in April 2024
supersedes IAS 1 and will result in major consequential amendments to IFRS Accounting Standards including
IAS 8 Basis of Preparation of Financial Statements (renamed from Accounting Policies, Changes in
Accounting Estimates and Errors). Even though IFRS 18 will not have any effect on the recognition and
measurement of items in the separate and consolidated financial statements, it is expected to have a
significant effect on the presentation and disclosure of certain items. These changes include categorisation
and sub-totals in the statement of profit or loss, aggregation/disaggregation and labelling of information, and
disclosure of management-defined performance measures.
The Company and the Group does not expect to be eligible to apply IFRS 19.


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 77



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 and functional currency
The consolidated and separate financial statements have been prepared under the historical cost convention,
except for certain financial instruments that are measured at fair value, as explained in the accounting policies
set out below. Historical cost is generally based on the fair value of the consideration given in exchange for
assets. The financial statements have been prepared on a going concern basis for all members of the Group.
Where necessary, comparative figures have been adjusted to conform to changes in the current year’s
presentation.
Items included in the financial statements of the Company and the Group are measured using the currency
of the primary economic environment in which the Company and the Group operate (the functional currency).
The following is a summary of the principal accounting policies:

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.



Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
78 M SAN GRUPA ANNUAL REPORT 2024

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Basis of consolidation (continued)
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.
Consolidation of a subsidiary begins when the Company obtains 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.
Accounting policies of subsidiaries are aligned with the those of parent company.
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.



Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 79

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
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.



Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
80 M SAN GRUPA ANNUAL REPORT 2024


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.



Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 81


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. 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.



Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
82 M SAN GRUPA ANNUAL REPORT 2024

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 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.



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Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 83



3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Investments in associates and joint ventures (continued)
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 investee, 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.
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.

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.



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Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
84 M SAN GRUPA ANNUAL REPORT 2024




3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue recognition (continued)
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, i.e. income from share in profits 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.

Segmental reporting
A segment is a distinguishable component or part of the Group that is engaged either in sales of related products
or services (business segment) or in sales of products and services within a particular economic environment
(geographical segment) and is subject to risks and rewards that are different from those of other segments.
The Group identifies operating segments on the basis of internal reports about components of the Group that are
regularly reviewed by the chief operating decision maker (Management Board of the Company) in order to allocate
resources to the segments and to assess their performance. Details on the operating segments are disclosed in
note 4 to the consolidated and separate financial statements.

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). For the purposes of consolidated financial
statements, the results and financial position of each group entity are expressed in thousands of euro (TEUR),
since this is the functional currency of the parent company and presentation currency of the consolidated financial
statements.



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Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 85

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Foreign currencies (continued)
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 2024 and 2023 as well as the average rates applied in the
translation of income and expense items are as follows:
Currency 31/12/2024 Average exchange 31/12/2023 Average exchange
rate for 2024 rate for 2023
RSD 116,97070 117,08658 117,16100 117,24563
KM 1,95583 1,95583 1,95583 1,95583
MKD 61,58300 61,58077 61,63450 61,54226
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 EUR 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 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).



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Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
86 M SAN GRUPA ANNUAL REPORT 2024


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Foreign currencies (continued)
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
is 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. Such assets and liabilities are not recognised if the
temporary 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.



Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 87


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Taxation (continued)
ii) Deferred tax (continued)
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 expect, 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 EUR 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.
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.



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Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
88 M SAN GRUPA ANNUAL REPORT 2024


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Property, plant and equipment (continued)
The estimated useful lives and the applicable annual depreciation rates for principal categories of property and
equipment were as follows:
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%
Owned land is not depreciated.

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.
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.



Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 89


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Intangible assets (continued)
Internally generated intangible assets – research and development expenditure (continued)
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.
Amortization rates for intangible assets amounted from 20-25%.

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 at historical cost are depreciated according to the linear method, during the useful life of the
assets, starting in the first month after the asset is put into use.


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Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
90 M SAN GRUPA ANNUAL REPORT 2024



3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Impairment of tangible and intangible assets, excluding goodwill (continued)
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.

Cash and cash equivalents
Cash and cash equivalents comprise of cash in hand and the balance on bank accounts.



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Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 91

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Leases
Leases are recognized as a right-of-use asset and a lease liability whenever substantially all the risks and
rewards incidental to ownership of the asset are transferred to the lessee over the term of the lease, except:
- low-value leases,
- leases whose lease term ends within a period of 12 months from the date of the first application or less and
- possibility of unilateral termination of the contract, no significant penalties imposed.
When concluding a contract, the Group assesses whether the contract is or contains lease characteristics.
That is, it assesses whether the contract transfers the right to control the use of the property in question over
time in exchange for compensation.
The Group as a lessee
For all leases, except short-term leases and leases of low-value assets, the Group applies a single approach
to recognition and measurement. The Group recognizes lease payment liabilities and the right-of-use asset,
which is the right to use the asset in question.
Right-of-use assets
The Group recognizes a right-of-use asset at the time the lease is entered into (i.e. when the asset in question
is available for use). Right-of-use assets are measured at cost less accumulated depreciation and impairment
losses and are adjusted for remeasurement of lease liabilities. The cost of the right-of-use assets includes
the amount of recognized lease liabilities, initial direct costs and lease payments made on or before the date
of the contract, less any lease incentives received. Right-of-use assets are depreciated on a straight-line
basis over the term of the lease.
Lease liabilities
When entering into a lease, the Group recognizes lease liabilities, measured at the present value of future
lease payments over the term of the lease. Lease payments include fixed payments, variable payments that
depend on an index or rate, and amounts expected to be paid from residual value guarantees. Lease
payments may include the value of a purchase option that is expected to be realized with reasonable certainty
and the payment of a penalty for terminating the lease if the terms of the contract provide for a termination
option. Variable lease payments that do not depend on an index or rate are recognized as an expense in the
period in which the event or condition that conditions the payment occurs.
Lease liabilities are reported as a separate item under long-term and short-term liabilities. The statement of
comprehensive income shows the cost of depreciation of assets with the right of use and interest costs on
lease obligations (see note 33).



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Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
92 M SAN GRUPA ANNUAL REPORT 2024


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
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.



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Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 93

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial assets (continued)
Impairment of financial 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.
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), i.e. the amount of
loss if default occurs 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) Significant increase in credit risk
When assessing whether the credit risk for the receivables from customers 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 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, 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 of customers has not increased significantly
since initial recognition if the customer is determined to have low credit risk at the reporting date.



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Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
94 M SAN GRUPA ANNUAL REPORT 2024

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial assets (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.
(ii) Definition 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 financial 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.



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Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 95

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial assets (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, considering legal advice
where appropriate. Any recoveries made are recognised in profit or loss.
(v) Derecognition of financial 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.



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Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
96 M SAN GRUPA ANNUAL REPORT 2024

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.
Classification 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.



Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 97




3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial liabilities (continued)
Derecognition of financial 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.

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 corresponding 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.



Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
98 M SAN GRUPA ANNUAL REPORT 2024



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 date
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 each reporting date. Property, plant
and equipment, and intangible assets are recognised initially at cost, less accumulated depreciation and
amortisation, respectively.



Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 99

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Accounting judgements and estimates(continued)
(b) Expected credit losses
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 18).
(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, i.e. the value of the share of associated companies increased by the share in the result of
associated companies calculated according to the equity method.
(f) Determination of achieving of control over subsidiaries
The Company evaluates the achievement of control over a subsidiary based on the following elements of control:
power of disposal, variable returns and the relationship between power of disposal and variable returns.
• Power of disposal derives from voting rights based on ownership instruments, the right to appoint or
revoke the entity's key managers who are capable of conducting relevant affairs, the right to direct
the entity to conclude transactions in favor of investors or veto changes to such transactions, and the
ability to conduct relevant affairs.
• Achieving variable returns in an affiliated company depends on the right to receive returns (dividends,
share value changes, other payments of economic benefit) depending on the success of its business.
• The connection between the power of disposal and yield – control in relation to the dependent
company results from the ability to apply the power of disposal in such a way that the Company
affects its yield (Note 43).


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
100 M SAN GRUPA ANNUAL REPORT 2024
4. SEGMENT INFORMATION
As of 31 December, 2024, the reporting segments of the Group consisted of several business segments by geographic
area: Croatia, Bosnia and Herzegovina, Serbia, Montenegro, North Macedonia, Slovenia and Kosovo. Business
segments are reported in accordance with internal reporting to the executive decision maker – the Company's
Management Board, which is responsible for resource allocation and performance evaluation of business segments.
The following is an analysis of the Group's income and results by geographic segment. The displayed sales revenues
refer to revenues generated by sales to external customers, revenues generated by sales within segments and other
business revenues. The revenues and expenses shown at the operating segment level represent total
revenues/expenses generated from relations with third parties, but also with subsidiaries from other operating
segments. Such presentation of income and expenses is eliminated in the "Eliminations/Corrections" line.
Revenues and operating results by segment
2024 Croatia Bosnia and Serbia Montenegro North Slovenia Kosovo Total Eliminations / Total
Herzegovina Macedonia Corrections
Sales 363,063 49,957 89,584 27,377 33,482 45,112 10,844 619,418 (119,241) 500,178
Cost of (313,261) (42,119) (79,473) (23,648) (28,725) (39,976) (9,506) (536,709) 109,875 (426,834)
goods sold
Changes in (69) - - - - - - (69) 62 (8)
inventory
Other
operating 1,348 87 328 12 99 20 2 1,895 (24) 1,871
income
Other
operating (48,373) (6,597) (9,038) (2,018) (3,892) (4,253) (804) (74,976) 8,309 (66,665)
expenses
Profit from 2,707 1,328 1,401 1,722 963 903 536 9,559 (1,018) 8,542
operations
Net finance (2,624) (121) (269) (87) (50) (155) (103) (3,409) (401) (3,810)
expenses
Profit
before 83 1,207 1,132 1,635 912 748 433 6,150 (1,419) 4,731
taxes
Bosnia and North Eliminations /
2023 Croatia Herzegovin Serbia Montenegro Macedonia Slovenia Total Corrections Total
a
Sales 353,221 40,802 83,950 18,341 29,055 35,552 560,921 (92,958) 467,963
Cost of goods (304,244) (34,488) (75,743) (15,857) (24,834) (31,787) (486,953) 84,259 (402,694)
sold
Changes in (204) - - - - - (204) 496 292
inventory
Other operating 1,668 111 329 23 138 35 2,304 1,405 3,709
income
Other operating (46,702) (6,140) (7,770) (1,508) (2,967) (3,157) (68,244) 7,228 (61,016)
expenses
Profit from 3,739 285 766 999 1,392 643 7,824 430 8,254
operations
Net finance (2,906) (107) (143) (86) (86) (136) (3,464) 469 (2,995)
expenses
Profit before 833 178 623 913 1,306 507 4,360 899 5,259
taxes


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 101
4. SEGMENT INFORMATION (CONTINUED)
Segment assets and liabilities
2024 Croatia Bosnia and Serbia Montenegro North Slovenia Kosovo Total Eliminations Total
Herzegovina Macedonia / Corrections
Tangible and
intangible 4,130 336 175 797 188 444 82 6,152 14,288 20,440
assets
Other non-
current 33,828 10,111 1,293 1 13 52 - 45,298 (26,802) 18,496
assets
Current 108,942 13,753 27,851 7,733 14,533 13,637 6,449 192,898 (25,386) 167,511
assets
Total assets 146,900 24,201 29,319 8,530 14,733 14,134 6,531 244,347 (37,900) 206,448
Long-term 20,075 128 289 478 50 224 - 21,245 748 21,992
liabilities
Short-term 108,615 8,988 16,644 2,763 7,399 11,711 4,699 160,819 (25,542) 135,276
liabilities
Total 128,690 9,117 16,933 3,241 7,448 11,936 4,699 182,063 (24,794) 157,269
liabilities
2023 Croatia Bosnia and Serbia Montenegro North Slovenia Total Eliminations / Total
Herzegovina Macedonia Corrections
Tangible
and 4,725 306 157 278 96 379 5,941 10,819 16,760
intangible
assets
Other
non- 28,502 10,111 202 1 24 30 38,870 (21,185) 17,685
current
assets
Current 99,403 11,903 23,096 7,628 8,614 10,838 161,482 (8,651) 152,831
assets
Total 132,630 22,320 23,455 7,907 8,734 11,247 206,293 (19,017) 187,276
assets
Long-
term 23,708 99 565 8 - 122 24,502 313 24,815
liabilities
Short-
term 91,185 8,192 11,656 3,614 1,715 9,504 125,866 (8,661) 117,205
liabilities
Total 114,893 8,291 12,221 3,622 1,715 9,626 150,368 (8,348) 142,020
liabilities


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
102 M SAN GRUPA ANNUAL REPORT 2024
5. SALES INCOME
GROUP COMPANY
2024 2023 2024 2023
Domestic sales of goods 411,389 384,601 194,188 199,566
Foreign sales of goods 68,280 62,066 98,818 102,093
Income from sale of service 16,039 18,116 5,762 9,640
Income from sales of spare parts 8,812 6,022 427 419
Income from sale of licences 5,948 6,003 3,447 2,860
Re-export sales 1,840 5,170 52,022 33,808
Other 629 383 - -
Allowances and discounts provided to (12,759) (14,398) (13,124) (13,229)
customers
Total 500,178 467,963 341,540 335,157
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, Republic of Slovenia, the Republic of Northern Macedonia and the
Republic of Kosovo.
Reexport 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.
Overview of gross sales by countries in which it was realized:
GROUP COMPANY
2024 2023 2024 2023
Croatia 205,757 203,217 196,097 199,192
Serbia 90,557 82,011 41,263 39,056
Slovenia 51,144 41,243 5,871 4,777
Bosnia and Herzegovina 42,175 39,017 24,236 20,337
Montenegro 28,276 18,854 12,066 9,590
North Macedonia 24,535 21,644 20,993 13,901
Kosovo 11,314 10,138 8,402 6,948
Poland 5,989 7,019 5,975 6,999
Romania 5,352 3,257 5,351 3,257
Germany 5,232 6,488 5,218 6,484
Singapur 4,923 5,004 683 964
Finland 4,444 6,263 4,442 6,263
Slovakia 3,417 5,071 3,414 5,066
Cezch Republic 3,418 4,873 3,252 4,525
Austria 2,226 3,649 540 1,156
Other 24,178 24,613 16,861 19,871
Total 512,937 482,361 354,664 348,386


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 103
6. OTHER OPERATING INCOME
GROUP COMPANY
2024 2023 2024 2023
Income from free receipts 617 864 520 746
Income from reinvoicing 311 250 218 151
Income from reversal of provisions 189 113 160 88
Income from in-kind contributions 186 123 102 77
Income from elimination of expected credit loss 157 133 84 69
Income from bargain purchase 71 1,560 - -
Compensation Income 57 42 33 7
Income from incentives and subsidies 56 99 - -
Profit from sale of fixed assets 39 208 31 3
Inventory surpluses 18 24 14 17
Other 170 293 48 91
Total 1,871 3,709 1,210 1,249

7. COST OF RAW MATERIAL AND SUPPLIES
GROUP COMPANY
2024 2023 2024 2023
Cost of spare parts 2,463 3,082 - -
Basic and auxiliary materials, and office supplies 2,059 2,775 1,506 2,439
Servicing, replacement and repair costs under warranty 1,263 1,335 373 530
Energy and fuels for freight and personal vehicles 1,146 1,073 209 196
Small inventory, packaging and tires 546 465 121 106
Other 27 25 - -
Total 7,504 8,755 2,209 3,271


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
104 M SAN GRUPA ANNUAL REPORT 2024
8. COST OF GOODS SOLD
GROUP COMPANY
2024 2023 2024 2023
Cost of goods sold 447,623 429,207 322,968 322,889
Intellectual property use fee (license) 8,053 7,317 3,608 3,217
Other expenses 1,183 1,084 856 746
Allowances and discounts provided by (30,025) (34,914) (21,309) (26,737)
suppliers
Total 426,834 402,694 306,123 300,115
In addition to selling computers and laptops, the Group and the Company also sell licenses – ready-made office
applications or platforms for development, management and processing and more advanced analytics.

9. COST OF SERVICES
GROUP COMPANY
2024 2023 2024 2023
Business premise and equipment rental costs 4,922 4,533 1,335 1,214
Costs of Ured za podršku d.o.o. and bookkeeping
services 3,840 3,825 2,801 2,882
Telephone, shipping and transportation costs 3,764 3,770 5,849 4,806
Marketing, sponsorships and fairs 3,304 2,918 1,807 1,663
Maintenance and repairs 2,529 1,175 936 570
Utilities 1,889 1,683 1,314 1,208
Representation 1,372 948 614 326
Intellectual services 692 760 297 390
Income from quality control and attestation of goods 518 658 577 657
Outsourced repair of faulty goods under warranty
period 496 495 794 830
Students and youth employees service costs 169 296 49 87
Costs of storage and palletizing of goods - - 1,067 1,175
Other 3,344 2,177 985 853
Total 26,839 23,238 18,425 16,661
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 M SAN 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.


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 105
10. STAFF COSTS
GROUP COMPANY
2024 2023 2024 2023
Net salaries 14,419 12,716 5,146 4,922
Taxes, surtaxes and contributions from salaries 5,908 5,274 2,490 2,386
Contributions on salaries 2,921 2,566 1,062 1,008
Total 23,248 20,556 8,698 8,316
The Group had an average of 982 employees in 2024 (2023: 932 employees). The Company had an average of
259 employees in 2024 (2023: 281 employees).

11. DEPRECIATION AND AMORTIZATION
GROUP COMPANY
2024 2023 2024 2023
Amortization 1,645 1,606 637 1,089
Depreciation 823 672 315 273
Depreciation of the right of use asset 534 460 21 34
Total 3,002 2,738 973 1,396

12. OTHER EXPENSES
GROUP COMPANY
2024 2023 2024 2023
Insurance premiums for equipment, vehicles and 1,161 974 557 502
inventories
Other employee expenses 721 756 194 96
Severance costs, christmas allowance, children's gifts, 601 568 211 258
awards
Per diems and other business travel costs 550 491 228 222
Professional training and literature 518 382 453 322
Travel expenses 479 470 152 161
Bank and payment operation charges 364 346 94 112
Forest levies, other contributions and membership fees 217 191 89 111
License costs 119 126 - -
Donations 70 29 63 27
Write-offs of receivables 28 59 11 44
Claims and damage costs 3 503 1 -
Other 616 405 213 148
Total 5,447 5,300 2,266 2,003


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
106 M SAN GRUPA ANNUAL REPORT 2024
13. IMPAIRMENT ALLOWANCE
GROUP COMPANY
2024 2023 2024 2023
Impairment allowance of trade receivables (ECL) 167 279 96 84
Impairment allowance of Inventories 34 3 - -
Total 201 282 96 84

13.1 PROVISIONS
GROUP COMPANY
2024 2023 2024 2023
Provisions for warranty risks and refunds (50) 9 (56) 9
Provisions for termination benefits 7 - - -
Total long-term risks provisions (43) 9 (56) 9
Reserves for accruals unused vacation days 47 114 1 57
Short-term provisions for bonuses 420 24 160 -
Total short-term risks provisions 467 138 161 57
Total provisions 424 147 105 66


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 107
14.1 FINANCIAL INCOME
GROUP COMPANY
2024 2023 2024 2023
Foreign exchange gains 1,834 1,756 2,122 1,825
Interest income 264 167 209 101
Dividend income - - 632 -
Other - 28 2 28
Total 2,098 1,951 2,965 1,954

14.2 FINANCIAL EXPENSES
GROUP COMPANY
2024 2023 2024 2023
Interest expense 3,213 2,537 2,700 2,048
Foreign exchange losses 2,088 1,782 2,206 1,942
Bank guarantees fees 342 250 285 190
Factoring fees 320 317 164 172
Losses from investments in financial assets - - - 95
Imapirment of financial assets - - - 308
Other financial expenses 144 84 117 38
Total 6,107 4,970 5,472 4,793

15. SHARES IN THE RESULT OF THE ASSOCIATES
GROUP COMPANY
2024 2023 2024 2023
Income from profit attribution from associates 198 24 - -
Total 198 24 - -
The following is a summary of the attribution of results by individual associates:
GROUP
2024 2023
E Kupi 9 20
EKO Bosanska Posavina 189 4
Total 198 24


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
108 M SAN GRUPA ANNUAL REPORT 2024
16. INCOME TAX
Corporate income tax in Croatia is determined by applying the rate of 18% (Serbia: 15%, Montenegro: 9%,
Bosnia and Herzegovina: 10%, Slovenia 22%, North Macedonia: 10% and Kosovo 10%) to taxable profit for
the year.
GROUP COMPANY
2024 2023 2024 2023
Current tax 1,036 648 72 52
Deferred tax (183) - - 19
Income tax expense 853 648 72 71
Current tax
GROUP COMPANY
2024 2023 2024 2023
Accounting profit before tax 4,731 6,133 1345 1,436
Income tax 18% 852 1,104 242 258
Tax effect of lower tax rates 61 (472) - -
Tax effect of permanent deductiable expenses 507 413 908 168
Tax effect of premanent deductiable income (241) (66) (1,058) (50)
Income tax expense 1,179 979 92 377
Withholding tax paid that could not be used 72 52 72 52
Utilisation of tax loss (215) (382) (92) (377)
Net tax expense 1,036 648 72 52
Deferred tax assets
GROUP COMPANY
2024 2023 2024 2023
Balance at 1 January 7 24 - 19
Recognized in profit or loss account 1 (17) - (19)
Balance at 31 December 8 7 - -
Deferred tax liabilities
GROUP COMPANY
2024 2023 2024 2023
Balance at 1 January 824 - - -
Recognized in profit or loss account (183) 824 - -
Balance at 31 December 641 824 - -


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 109
16. INCOME TAX (CONTINUED)
During the preparation of Purchase Price Allocation (PPA) in June 2023 related to the acquisition of the
company Alterna distribucija in November 2022, there was an increase in the fair value of intangible assets,
which resulted in the recognition of a deferred tax liability in accordance with the requirements of the IAS 12.
At the same time, the Group recognized EUR 824 thousand in deferred tax liabilities which will be released
over the useful life of the identifiable asset, and for the purpose of harmonizing the consolidated current cost
of income tax. In 2024, the Group derecognised deferred tax liabilities in the amount of EUR 183 thousand.
Effective tax rate in 2024 was 18.03% (2023: 15.9%).
Gross tax losses in the amount of EUR 5.538 thousand for the Group are available to reduce future taxable
profits at the end of 2024. Tax losses cannot be transferred and used within group members. The Group did
not recognize deferred tax assets based on tax losses carried forward, given that it is uncertain when
individual companies within the Group will achieve sufficient future taxable profit on the basis of which such
tax assets could be used. On the next reporting date, the Group and the Company will reassess the
assumptions for the recognition of deferred tax assets.
Table of transferred tax losses
GROUP COMPANY
2024 2023 2024 2023
Up to 1 year 1,389 1,544 929 1,544
Up to 2 year 1,868 1,481 1,480 1,481
Up to 3 year 824 735 734 735
Up to 4 year 665 274 206 206
Up to 5 year 783 34 - -
Total tax loss available for transfer 4,746 4,068 3,349 3,966
The Company and the Group acquired the largest part of the transferred losses through the merger of the
company M SAN Ulaganja with the Company. The Company and the Group have not determined deferred
tax assets because there is no estimate of how many losses will be able to be used in the future period.
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.
In 2024, a tax audit was initiated in the Company. The Company’s Management does not expect a material
impact on the Company’s financial statements upon completion of the audit.


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
110 M SAN GRUPA ANNUAL REPORT 2024
17. INTANGIBLE ASSETS
Intangible
GROUP Software Development Trade- Customer assets Total
expenses mark relationships under
construction
COST
At 1 January 2023 7,200 271 79 - 1,644 9,194
Additions - - - 5,084 140 5,224
Transfer from assets under 130 51 3 - (181) 3
construction
Acquisition of the 53 - - - 51 104
subsidiary (note 43)
At 31 December 2023 7,383 322 82 5,084 1,654 14,525
Additions - - - - 102 102
Transfer from assets under 92 - 10 - (102) -
construction
Impairment of assets under - - - - (16) (16)
constructions
At 31 December 2024 7,475 322 92 5,084 1,638 14,611
ACCUMULATED
AMORTIZATION
At 1 January 2023 5,098 271 46 - - 5,415
Charge for the year 1,088 - 10 508 - 1,606
Acquisition of the 53 - - - - 53
subsidiary (note 43)
At 31 December 2023 6,239 271 56 508 - 7,074
Charge for the year 603 13 12 1,017 - 1,645
At 31 December 2024 6,842 284 68 1,525 - 8,719
NET BOOK VALUE
At 31 December 2024 633 38 24 3,559 1,638 5,892
At 31 December 2023 1,144 51 27 4,576 1,654 7,452


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 111
17. INTANGIBLE ASSETS (CONTINUED)
Development Trade- Intangible
COMPANY Software expenses mark assets under Total
construction
COST
At 1 January 2023 6,962 264 79 1,605 8,910
Additions - - - 261 261
Transfer from assets under 238 - 3 (241) -
construction
At 31 December 2023 7,200 264 82 1,625 9,171
Additions - - - 129 129
Transfer from assets under 119 - 10 (129) -
construction
Na dan 31 December 2024 7,319 264 92 1,625 9,300
ACCUMULATED AMORTIZATION
At 1 January 2023 4,966 264 47 - 5,277
Charge for the year 1,078 - 11 - 1,089
At 31 December 2023 6,044 264 58 - 6,366
Charge for the year 626 - 12 - 638
At 31 December 2024 6,670 264 70 - 7,004
NET BOOK VALUE
At 31 December 2024 649 - 22 1,625 2,296
At 31 December 2023 1,156 - 24 1,625 2,805


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
112 M SAN GRUPA ANNUAL REPORT 2024
18. GOODWILL
GROUP
December 31 2024 December 31 2023
Cost 9,804 5,377
9,804 5,377
2024 2023
Cost
Oppening balance 5,377 7,688
Sale of subsididary 4,427 567
Purchase price allocation when acquiring 100% share - (2,878)
Closing balance 9,804 5,377
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:
December 31 2024 December 31 2023
KIM TEC BG 3,883 3,883
Pakom Kompani d.o.o. 891 891
MR SERVIS 36 36
Data Link 567 567
ASK TEC 4,427 -
Total 9,804 5,377
During November 2022, M SAN Grupa acquired the subsidiary Alterna distribucija. On December 31, 2022
the Group has not yet made the Purchase Price Allocation (PPA), and the amount of goodwill is recognized
as the difference between the expected purchase price and the acquired net value of the asset on the date
of acquisition. The Purchase Price Allocation was made during 2023, whereby the estimated fair value of the
acquired net assets exceeded the expected value of the purchase price. This resulted in the derecognition of
the initially recognized goodwill and the recognition of gain from a bargain purchase in the amount of EUR
1,560 thousand (Note 6).
In July 2023, the Company acquired a 100% business share in the company Data link d.o.o. (Note 43) based
on the contract on the purchase of business shares, and the fair value of the compensation in the amount of
EUR 2,277 thousand for the acquisition of 100% ownership share was determined. The assessment of the
fair value of the Company's assets and liabilities, as an integral part of the distribution of the purchase price,
determined the fair value of the acquired net assets (100% of the share capital) in the amount of EUR 1,709
thousand. Goodwill resulting from the acquisition is defined as the difference between the fair value of
consideration and the fair value of the net assets of the acquired company in the amount of EUR 567
thousand.


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 113
18. GOODWILL (CONTINUED)
In May 2024, the Company acquired an equity interest in Ask Tec d.o.o. (Note 43) based on a share purchase
agreement, and the fair value of the consideration for the acquisition of a 100% ownership interest was
determined at EUR 5,900 thousand. As part of the purchase price allocation process, a fair value assessment
of the acquired company's assets and liabilities was carried out, resulting in the fair value of the acquired net
assets (100% of equity) being determined at EUR 1,473 thousand. Goodwill arising from the acquisition was
calculated as the difference between the consideration transferred and the fair value of the acquired net
assets, amounting to EUR 4,427 thousand.
The calculations of the value in use of goodwill are based on the following assumptions of the discount rates
after tax:
Cash generating units 2024 2023
KIM TEC BG 10.9% 13.1%
MR SERVIS 9.2% 10.2%
Pakom Kompani d.o.o. 13.7% 15.4%
Data Link 9.2% 10.2%
ASK TEC 12.4% -
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, considering 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% (2023 2.0% - 3.0%), 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 4,5% to 12,5% (2022: 3.1% to 17.2%).
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.


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
114 M SAN GRUPA ANNUAL REPORT 2024
19. PROPERTY, PLANT AND EQUIPMENT
As of December 31, 2024, the current value of the real estate on which the bank's mortgage was registered as loan insurance is EUR 249 thousand (2023: EUR 266
thousand). The mortgage on the said property amounts to EUR 1,062 thousand (2023: EUR 912 thousand), while the amount owed on the said mortgages amounts to
EUR 293 thousand (EUR 248 thousand).
Land and Plant and Office and Other Right of Assets under
GROUP buildings equipment Vehicles other assets use construction Total
equipment assets
COST
At 1 January 2023 - 6,615 1,654 1,983 231 2,277 51 12,811
Additions 642 334 25 - - 241 805 2,047
Transfer from assets under construction - 541 119 60 10 68 (801) (3)
Acquisition of the subsidiary 585 1,755 28 192 - - 38 2,598
Disposals (88) (95) (76) (6) - (751) - (1,016)
At 31 December 2023 1,139 9,150 1,750 2,229 241 1,835 93 16,437
Additions - - - 3 - 1,041 1,131 2,175
Transfer from assets under construction - 462 266 102 6 296 (1,132) -
Acquisition of the subsidiary (note 43) 25 12 166 33 - - - 236
Impairment of assets under construction - - - - - - (34) (34)
Disposals - (164) (76) (8) (15) (332) - (595)
At 31 December 2024 1,164 9,460 2,106 2,359 232 2,840 58 18,219


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 115
19. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Land and Plant and Office and Other Right of Assets
GROUP buildings equipment Vehicles other assets use under Total
equipment assets construction
ACCUMULATED DEPRECIATION
At 1 January 2023 - 5,947 1,400 1,654 197 931 - 10,129
Depreciation for the year 24 464 93 81 10 460 - 1,132
Disposals (89) (85) (37) (6) - (429) - (646)
Acquisition of the subsidiary 309 1,409 20 153 - - - 1,891
At 31 December 2023 244 7,735 1,476 1,882 207 962 - 12,506
Depreciation for the year 42 565 102 111 3 534 - 1,357
Disposals - (141) (62) (4) (4) (321) - (532)
Acquisition of the subsidiary (note 43) 21 12 94 17 - - - 144
At 31 December 2024 307 8,171 1,610 2,006 206 1,175 - 13,475
NET BOOK VALUE
At 31 December 2024 857 1,289 496 353 26 1,665 58 4,744
At 31 December 2023 895 1,413 274 347 34 873 93 3,931


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
116 M SAN GRUPA ANNUAL REPORT 2024
19. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Land and Plant and Right Office and Leasehold Assets
COMPANY buildings equipment Vehicles of use other improvements under Total
assets equipment construction
COST
At 1 January 2023 - 5,097 584 152 1,023 68 - 6,924
Additions - - - - - - 401 401
Transfer from assets under construction - 352 41 - 8 - (401) -
Disposals - (13) (38) (10) - - - (61)
At 31 December 2023 - 5,436 587 142 1,031 68 - 7,264
Additions - - - - - - 301 301
Transfer from assets under construction - 295 3 - 3 - (301) -
Disposals - (87) (59) - - - - (146)
At 31 December 2024 - 5,644 531 142 1,034 68 - 7,419
As of December 31, 2024, the Company has no tangible assets on which a bank mortgage was registered as loan security (December 31, 2023, EUR 0 thousand).


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
M SAN GRUPA ANNUAL REPORT 2024 117
19. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Land and Plant and Right of Office and Leasehold
COMPANY buildings equipment Vehicles use other improvements Total
assets equipment
ACCUMULATED DEPRECIATION
At 1 January 2023 - 4,790 576 70 853 62 6,351
Depreciation for the year - 224 11 34 37 1 307
Disposals - (13) (22) (4) - - (39)
At 31 December 2023 - 5,001 565 100 890 63 6,619
Depreciation for the year - 275 7 21 31 1 335
Disposals - (78) (59) - - - (136)
At 31 December 2024 - 5,199 513 121 921 64 6,818
NET BOOK VALUE
At 31 December 2024 - 445 18 21 113 4 600
At 31 December 2023 - 435 22 42 141 5 645


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
118 M SAN GRUPA ANNUAL REPORT 2024
20. INVESTMENT IN ASSOCIATES AND OTHER FINANCIAL ASSET
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Investments in subsidiaries - - 26,356 20,532
Investments in associates 15,379 15,182 5,508 5,508
Other financial assets 5 4 - -
15,384 15,186 31,864 26,040

20.1. INVESTMENTS IN SUBSIDIARIES
Set out in the table below are the Company’s subsidiaries, together with the Company’s ownership interests:
Country of Ownership share and
Name of subsidiary Principal activity incorporation share in the voting Amount
and business power
31.12. 31.12. 31.12. 31.12.
2024. 2023. 2024. 2023.
% %
Kim Tec Vitez d.o.o. DISTRIBUTION Bosnia and 100 100 875 875
Herzegovina
Kim Tec BG d.o.o. DISTRIBUTION Serbia 100 100 8,168 8,168
Kim Tec CG d.o.o. DISTRIBUTION Montenegro 100 100 1,553 1,553
Pakom Kompani DISTRIBUTION North 100 100 2,360 2,360
d.o.o. Macedonia
COLLECTION AND
M San Eko d.o.o. DISTRIBUTION OF Croatia 100 100 66 66
WASTE
MR SERVIS d.o.o. MAINTAINANCE Croatia 60 60 1,528 1,528
M San Logistika LOGISTICS Croatia 100 100 3 3
d.o.o.
Centar kompetencija
za zelenu energiju CONSULTING Croatia 100 100 5 5
d.o.o.
Corvus MK IT Croatia - 100 - 5
Alterna distribucija DISTRIBUTION Slovenia 100 100 3,620 3,691
d.o.o.
Data Link d.o.o. PRODUCTION Croatia 100 100 2,278 2,278
Ask Tec d.o.o. DISTRIBUTION Kosovo 100 - 5,900 -
26,356 20,532



Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)


20. INVESTMENT IN ASSOCIATES AND OTHER FINANCIAL ASSET (CONTINUED)
20.1. INVESTMENTS IN SUBSIDIARIES (CONTINUED)
In July 2023, the Company acquired a business stake in the company Data link d.o.o. based on the contract on
the purchase of business shares, and the fair value of compensation in the amount of EUR 2,278 thousand for
the acquisition of 100% of the owner's capital was determined.
In May 2024, the Company acquired an equity interest in Ask Tec d.o.o. based on a share purchase agreement,
with the fair value of the consideration for the acquisition of 100% of the share capital determined at EUR 5,900
thousand.
All business combinations are described in more detail in Note 43.

20.2. INVESTMENTS IN ASSOCIATES
The table below contains an overview of investments in associated companies as of December 31, 2024 and
December 31, 2023:
GROUP COMPANY
December December 31 2023 December December 31 2023
31 2024 31 2024
Shares in the company EKO 9,751 9,562 - -
Bosanska Posavina
Shares in the company E Kupi 5,628 5,620 5,508 5,508
d.o.o.
15,379 15,182 5,508 5,508
Information about the Group's affiliated companies is given below:
Principal Country of Ownership and share in the
Name of associate activity incorporation and voting rights
business
2024 2023
E Kupi d.o.o. E-commerce Croatia 24% 24%
EKO Bosanska Posavina Agriculture Bosnia and Herzegovina 60% 60%
Company E kupi d.o.o. was founded in 2010. In 2016, the company acquired a 24% stake in this associated
company.
The Group concluded that all companies represented or represent associated companies since the Group
does not have control over those companies in which the investment was made. Shares and shares of the
mentioned companies are not listed on active markets.



Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
120 M SAN GRUPA ANNUAL REPORT 2024

20. INVESTMENT IN ASSOCIATES AND OTHER FINANCIAL ASSET (CONTINUED)
20.2. INVESTMENTS IN ASSOCIATES (CONTINUED)
The following is a summary of the financial information relating to the associate E kupi d.o.o. and Eko
Bosanska Posavina d.o.o. for 2024:
Eko
E Kupi Bosanska Total
Posavina
Property, plant and equipment 168 20,992 21,160
Intangible assets 662 77 739
Other assets 875 0 875
Inventories 7,200 2,243 9,443
Trade receivables 3,224 2,612 5,836
Cash and cash equivalents 908 8 916
Other current assets 758 409 1,167
Long-term liabilities 0 1,737 1,737
Short-term liabilities 13,285 3,831 17,116
Net assets of associates 510 20,773 21,283
Group's share in the net assets of the associates 122 12,464 12,586
Total income 59,676 4,922 64,598
Total profit for the current year 38 315 353
Group's share in the profit of the associates (note 15) 9 189 198


21. INVENTORIES
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Merchandise 34,807 32,829 10,852 15,876
Goods in the customs 12,091 7,356 11,498 6,745
warehouse
Goods in transit 12,694 6,749 12,457 6,528
Other 2,370 2,251 1,067 1,134
Total 61,962 49,185 35,874 30,283

22. PREPAYMENTS
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Prepayments for services 4,413 2,836 4,145 2,491
Prepayments for goods 785 66 - -
Total 5,198 2,902 4,145 2,491


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
23. TRADE RECEIVABLES
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Domestic trade receivables 72,308 65,768 30,476 35,281
Foreign trade receivables 4,116 6,043 22,813 11,519
Impairment allowance on trade (1,213) (1,261) (273) (261)
receivables
Total 75,211 70,550 53,016 46,539
Movement in impairment allowance for doubtful accounts:
GROUP COMPANY
2024 2023 2024 2023
At 1 January 1,261 1,157 261 244
Impairment allowance (Note 13) 167 279 96 84
Reversed on collection (44) (16) - (4)
Write-off receivables (Note 6) (157) (116) (84) (69)
Exchange differences (14) (43) - 6
At 31 December 1,213 1,261 273 261
Aging structure of trade receivables (net)
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Undue 62,771 57,753 33,202 34,413
Up to 60 days 9,420 10,801 16,337 8,230
61-90 days 874 953 1,648 3,264
91-120 days 351 162 567 400
121-365 days 713 834 797 20
More than 365 days 1,082 47 465 212
Total 75,211 70,550 53,016 46,539
The average receivables collection period in the Group in 2024 was 55 days (2023: 48 days), while in the
Company it was 55 days (2023: 44 days).


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
122 M SAN GRUPA ANNUAL REPORT 2024
24. OTHER RECEIVABLES
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
VAT prepayments 1,137 520 133 40
Receivables acquired through 1,106 874 - -
debt assumption
Receivables from acquired 914 860 - -
assignments
Receivables for spare parts 190 179 - -
used during the warranty period
Receivables from the CHIF 163 99 40 16
Interest receivables 145 222 190 220
Receivables from suppliers due 131 97 102 96
to claims
Receivables for corporate 117 230 - -
income tax prepayments
Receivables for other taxes,
contributions, and membership 13 - 1 1
Fees
Other 154 199 2 13
Total 4,071 3,280 468 386
*Croatian Health Insurance Fund
GROUP COMPANY
December December December December
31 31 31 31
2024 2023 2024 2023
Interest receivables 115 200 159 198
Contractual interest receivables 30 22 31 22
Ukupno 145 222 190 220


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
25. GIVEN LOANS AND DEPOSITS
Long-term loans and deposits:
GROUP COMPANY
December 31 December 31 2023 December 31 December 31 2023
2024 2024
Loans to corporate 3,020 2,429 1,930 2,429
entities
Given deposits to 64 39 - -
unrelated parties
Total 3,084 2,468 1,930 2,429
Long-term loans and deposits
Original Amount Due date December December
currency 31 2024 31 2023
Loans to corporate entities
Company
Baks grupa d.o.o. EUR 18,309 31.12.2025. 1,930 2,429
Total 1,930 2,429
Group
Ekupi d.o.o. Beograd RSD 169,000 30.9.2025. 1,090 -
Total 3,020 2,429
Short-term loans and deposits:
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Loans to corporate entities 1,035 1,415 2,625 609
Given deposits to unrelated 304 300 304 300
parties
Loans to individuals 102 4 2 4
Impairment of given domestic - - (573) (560)
loans
Total 1,441 1,719 2,358 353


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
124 M SAN GRUPA ANNUAL REPORT 2024
25. GIVEN LOANS AND DEPOSITS (CONTINUED)
Short-term loans and deposits:
Original Amount Due date December December
currency 31 2024 31 2023
Company
Loans to entities within group
M SAN EKO d.o.o. EUR 575 31.12.2025 575 560
M SAN Logistika d.o.o. EUR 2,050 31.12.2025 2,050 -
Castalia projekt d.o.o. EUR 477 31.12.2024 - 49
Total short term loans to corporate 2,625 609
entities - Company
Group
Castalia projekt d.o.o. EUR 477 31.12.2025 - 49
Ekupi BG d.o.o. RSD 100,000 01.12.2025 284 854
Kim tec BG Nekretnine RSD 30,000 30.06.2025 342 256
Kim tec BiH Nekretnine KM 240 31.12.2025 409 256
Total 1.035 1.415
Total amount of deposits to non related entities 304 300
Total amount of deposits to individuals 102 4
1,441 1,719


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
26. PREPAID EXPENSES AND ACCRUED INCOME
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Accrued income for subsequently 1,686 665 - -
approved discounts
Prepaid expenses 1,393 508 1,093 34
Accured overdue revenues 7 7 - -
Total 3,086 1,180 1,093 34

27. CASH AND CASH EQUIVALENTS
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Cash in banks 16,541 24,013 9,001 16,301
Petty cash 1 2 - 1
Total 16,542 24,015 9,001 16,302

28. SHARE CAPITAL
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Nominal value 14,493 14,493 14,493 14,493
Total 14,493 14,493 14,493 14,493
The share capital consists of 485,000 business shares, each business share in the nominal amount of HRK
200.00 (EUR 26.54), which are paid in full in cash and one business share in the nominal amount of HRK
12,197,700.00 (EUR 1,618,913) which was paid in full in rights.

29. RETAINED EARNINGS
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Retained earnings 33,014 29,100 4,071 2,798
Total 33,014 29,100 4,071 2,798


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
126 M SAN GRUPA ANNUAL REPORT 2024
29. RETAINED EARNINGS (CONTINUED)
Changes in retained earnings can be shown:
GROUP COMPANY
Balance as of December 31 2023 29,100 2,798
Profit for the year 3,914 1,273
Balance as of December 31 2024 33,014 4,071

30. MINORITY INTEREST
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Minority interest 30 66 - -
Total 30 66 - -
MR SERVIS KIM TEC TOTAL
BIH EKO
At 1 January 2024 33 33 66
Total profit for the current year (35) (1) (36)
At 31 December 2024 (2) 32 30

31. PROVISIONS
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Long-term provisions for risks within the 813 799 650
warranty period 642
Provisions for returns 101 165 84 148
Long-term provisions for bonuses and 42 35 -
severance pay -
Total 956 999 734 790


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
32. LONG-TERM LOANS LIABILITIES
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Total loans from financial institutions 3,352 4,575 2,731 3,547
Less: current portion of loans from (1,137) (1,221) (817) (816)
financial institutions
Total long-term loans from financial 2,215 3,354 1,914 2,731
institutions
COMPANY
Financial institution Original Amount Due date December December
currency 31 2024 31 2023
ERSTE & STEIERMARKISCHE BANK d.d. EUR 2,175 20.12.2027 2,731 3,547
Total 2,731 3,547
More: the current part of the loan
obligation from financial institutions - (817) (816)
Company
Total 1,914 2,731
GROUP
Financial institution Original Amount Due date December December
currency 31 2024 31 2023
ProCredit Bank AD. EUR 4,000 12.10.2026 504 754
ERSTE & STEIERMARKISCHE BANK
d.d. EUR 105 31.03.2029 54 104
Zagrebačka banka d.d. EUR 70 31.12.2026 26 47
Hamag Bicro EUR 100 30.06.2026 37 62
Intesa Sanpaolo Banka d.d. EUR 2,500 28.08.2024 - 61
Total 3,352 4,575
Less: short-term part of long-term (1,137) (1,221)
loans - Group
Total - Group: 2,215 3,354
The range of interest rates on borrowings for the Group in 2024 was from 0.25% to 6.26% (2023: 0.25% to
6.18%), while for the Company it ranged from 3.91% to 5.06% (2023: 4.91% to 6.06%).


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
128 M SAN GRUPA ANNUAL REPORT 2024
33. LEASE LIABILITIES
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Current portion of long-term lease 561 492 3 20
liabilities
Long-term lease liabilities 1,190 406 - 2
Total lease liabilities 1,751 898 3 22
The Group uses part of the leases of business and warehouse spaces and vehicles that do not meet the
recognition requirements in accordance with IFRS 16, and the stated cost is shown above as a short-term lease
cost (Note 9).
Defining the lease period
The definition of the lease period is determined by the irrevocable lease period, considering the option of
extension and termination of the lease agreement, to which the lessee has the right only. In accordance with
the company's business policies and concluded contracts, the total rental period cannot be shorter than 1
year or longer than 10 years. The company regularly, and at least once a year, assesses whether the
economic circumstances related to the extension or termination of the lease contract have changed, whereby
it adjusts the original estimate of the lease period.
Contracts with variable installments
During the year ending December 31, 2024 and December 31, 2023, the Group did not pay rents with variable
installments.


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
34. SHORT-TERM LOANS AND BORROWINGS
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Short-term bank loans 15,778 20,495 12,090 15,911
Obligations for loans 100 43 - 43
Total 15,878 20,538 12,090 15,954
Current part of long-term loan 1,137 1,221 816 816
Total 17,015 21,759 12,906 16,770
Short term loans liabilities
COMPANY
December 31 December 31
Financial institutions Original Amount Due date 2024 2023
currency
Zagrebačka banka d.d. EUR 6,000 24.05.2025 4,225 6,000
Hrvatska poštanska banka d.d. EUR 5,000 31.03.2025 4,165 4,911
Erste banka d.d. EUR 5,000 01.08.2025 3,700 5,000
Total 12,090 15,911
GROUP
Original Due December 31 December 31
Financial institutions currency Amount date 2024 2023
UniCredit Bank Mostar d.d. BAM 2.000 24.5.2024 1,022 1,022
Intesa Sanpaolo Banka d.d. BAM 2.000 13.06.2025 1,023 1,023
NLB Tuzlanska banka BAM 500 30.06.2025 256 256
Bosna Bank International d.d. BAM 1.800 20.06.2025 920 920
Erste banka d.d. EUR 49 31.10.2025 168 115
Zagrebačka banka d.d. EUR 33 31.01.2025 100 48
Gorenjska banka d.d. EUR 1.000 04.06.2025 200 1,000
Addiko Bank d.d. EUR 700 03.05.2024 - 200
Total 15,778 1,200
Loans 100 43
Plus: Current portion of loans from 1,137 1,221
financial institutions
Total current portion of long-term 17,015 21,759
borrowings and short-term loans

35. LONG-TERM BOND LIABILITIES
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Long-term bond liabilities 18,581 21,235 18,581 21,235
Current portion of non-current Bond payables (2,654) (2,654) (2,654) (2,654)
Total 15,927 18,581 15,927 18,581


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
130 M SAN GRUPA ANNUAL REPORT 2024
36. OTHER LONG-TERM LIABILITIES
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Long-term liabilities for the purchase of a 680 627 680 627
business share
Long-term liabilities to insurance companies 372 14 373 14
Other long-term liabilities 11 10 - -
Total 1,063 651 1,053 641

37. OTHER SHORT-TERM LIABILITIES
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Business share purchase liabilities 5,847 801 5,847 801
VAT payables 5,158 4,250 3,483 3,560
Factoring liabilities 4,093 3,922 1,825 1,362
Liabilities for advances received 2,156 2,698 1,450 809
Liabilities for payroll taxes and 774 665 315 284
contributions
Customs duties payable 674 573 26 25
Liabilities for memberships, 515 29 3 7
contributions and other taxes
Short-term provisions for bonuses 420 380 160 160
Short-term provisions for unused 331 263 124 123
annual leave
Interest payable on issued bonds 167 190 167 190
Interest payable on borrowings and 75 66 74 60
loans
Other liabilities 23 20 5 1
Total 20,233 13,857 13,479 7,382
Some suppliers offer modular payment terms, whereby the Company has the option to pay within the
contractual terms or to settle earlier in exchange for certain early payment discounts. In such arrangements,
the Company occasionally utilizes factoring, where the cost of factoring is lower than the early payment
discount (cash discount), thereby generating additional savings.


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
38. TRADE PAYABLES
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Foreign trade payables 74,424 52,159 59,669 41,906
Domestic trade payables 16,161 21,900 12,032 16,296
Total 90,585 74,059 71,701 58,202

39. ACCRUED EXPENSES AND DEFERRED INCOME
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Unbilled invoices 2,185 2,779 1,163 701
Accrued income 98 142 - 11
Other 95 22 - -
Total 2,378 2,943 1,163 712

40. RELATED-PARTY TRANSACTIONS
The table below shows Company's receivables and payables from transactions with its subsidiaries in purchase
transactions at December 31 2024 and December 31 2023:
Receivables Payables
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Kim Tec d.o.o., Beograd 8,578 3,487 (6) (21)
Kim Tec d.o.o., Vitez 2,257 2,519 - -
Pakom Kompani d.o.o.e.l., Skopje 5,151 93 - -
Ask Tec d.o.o., Priština 3,296 - - -
Alterna distribucija d.o.o., Ljubljana 403 207 (12) (1)
Kim Tec CG, Podgorica 278 170 (16) (67)
Centar kompetencije za zelenu 79 61 (3) (15)
energiju d.o.o.
Data link d.o.o. Bjelovar 19 2 (61) (1)
M San Eko d.o.o. 7 6 - -
MR Servis d.o.o. - 131 (108) (299)
M San Logistika d.o.o. - - (4) (384)
Korvus MK d.o.o.e.l. ,Skopje - - - (110)
20,068 6,676 (210) (898)


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
132 M SAN GRUPA ANNUAL REPORT 2024
40. RELATED-PARTY TRANSACTIONS (CONTINUED)
The table below shows the receivables and payables that the Company had with associates and companies with
a common ultimate owner in sales transactions on December 31 2024 and 2023:
Receivables Payables
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Ekupi d.o.o. 8,949 10,718 (67) -
PP Orahovica d.o.o. 1,057 7 (67) -
PPK Valpovo d.o.o. 793 3 (59) -
King ICT d.o.o. 608 271 - -
Planet IX.d.o.o. 531 88 - -
Pametna energija d.o.o. 153 1,077 - -
M San Nekrenine d.o.o. 69 - (8) (120)
Omega Software d.o.o. 8 18 - (4)
Agroinvest Grupa 6 - - -
Corvus pay d.o.o. 3 - - (48)
MS Industrial Kina 842 646 - (76)
Grey Wolf - 3,550 - -
Ask Tec d.o.o., Priština - 2,526 - -
Aktivis d.o.o., - 8 (2) -
Ured za podršku d.o.o. - - (714) (1,295)
13,020 18,912 (917) (1,543)
The table below shows the income and expenses that the Company had in sales transactions with subsidiaries
in 2024 and 2023:
Income /sale Expenses Cost of goods
2024 2023 2024 2023 2024 2023
Kim Tec d.o.o., Beograd 38,638 36,384 274 19 - 171
Kim Tec d.o.o., Vitez 24,199 19,557 231 12 - 230
Pakom Kompani d.o.o.e.l., Skopje 21,830 13,569 97 - - 52
Kim Tec CG, Podgorica 11,533 9,430 16 3 - -
Ask Tec d.o.o., Priština 8,362 - - - - -
MR Servis d.o.o. 885 940 906 1,367 - 51
Alterna distribucija d.o.o., Ljubljana 879 128 37 2 - 166
M San Logistika d.o.o. 97 87 5,859 6,034 - 1
Data link d.o.o. Bjelovar 36 23 70 1 - -
Centar kompetencije za zelenu energiju 14 - 56 49 - -
d.o.o.
M San Eko d.o.o. - 2 - - - -
Kim Tec BG Servis d.o.o - 2 - - - -
Kim Tec BiH Servis d.o.o. - 1 - - - -
Korvus MK - - 27 - - -
106,473 80,123 7,573 7,487 - 671


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
40. RELATED-PARTY TRANSACTIONS (CONTINUED)
The income and expenses of the Company from purchase/sales transactions with its associates and entities with
the same ultimate owner during 2024 and 2023 were as follows:
Income /sale Expenses Cost of goods
2024 2023 2024 2023 2024 2023
Ekupi d.o.o. 38,753 36,084 835 659 - 605
King ICT d.o.o. 9,237 11,409 74 494 - 31
Pametna energija d.o.o. 553 4,287 - - - -
Grey Wolf 531 3,550 - - - -
Planet IX .d.o.o. 354 81 - - - -
PP Orahovica d.o.o. 100 336 86 63 - -
M San Nekrenine d.o.o. 57 133 1,074 1,206 - 14
Omega Software d.o.o. 52 278 49 82 - -
Ured za podršku d.o.o. 51 67 3,295 3,339 - -
Corvus pay d.o.o. 23 17 1 1 - -
Agroinvest Grupa 10 - - - - -
PPK Valpovo d.o.o. 7 228 47 - - -
Aktivis d.o.o. 5 14 6 1 - -
MS Industrial Kina - 185 9,814 546 - 8,074
Zelena Agenda d.o.o. - - - 1 - -
Ask Tec d.o.o., Priština - 6,662 - - - -
49,733 63,331 15,281 6,392 - 8,725
The table below presents receivables and revenue of the Company from loan transactions with its subsidiaries at
31 December 2024 and 2023:
Receivables Income
December 31 December 31 December 31 December 31
2024 2023 2024 2023
M San Logistika d.o.o. 2,063 - 41 4
M San Eko d.o.o. 34 573 19 13
MR Servis d.o.o. - - - 1
2,097 573 60 18


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
134 M SAN GRUPA ANNUAL REPORT 2024
40. RELATED-PARTY TRANSACTIONS (CONTINUED)
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 2024 and 2023:
Receivables Income
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Baks Grupa d.o.o. 1,942 2,488 78 58
M San Nekrenine d.o.o. - - 32 -
1,942 2,488 110 58
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 2024 and 2023:
Liabilities Expenses
December 31 December 31 December 31 December 31
2023 2022 2023 2022
PP Orahovica d.o.o. (7) (102) 1 42
King ICT d.o.o. - - 83 14
(7) (102) 84 56
Management remuneration through the year were as it follows:
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Short-term income - gross 1,463 1,410 858 666
Total 1,463 1,410 858 666


Graphics
Notes to the consolidated and separate annual financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)

41. FINANCIAL INSTRUMENTS
41.1. Capital risk management
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 32 and 34 and
issued corporate bonds disclosed in Note 35, 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.
41.1.1. Gearing ratio
Gearing ratio at the end of the reporting period:
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Debt 37,811 46,348 33,401 40,736
Less: cash in banks and petty (16,542) (24,015) (9,001) (16,302)
cash
21,269 22,333 24,400 24,434
Equity 49,179 45,256 20,707 19,434
Gearing ratio 43.25% 49.35% 117.84% 125.73%
Debt consists of long-term loans and finance lease payables and short-term loans from financial institutions.



Graphics
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
136 M SAN GRUPA ANNUAL REPORT 2024

41. FINANCIAL INSTRUMENTS (CONTINUED)
41.1. Capital risk management (continued)
The Group and the Company are exposed to the following risks arising from financial instruments:
41.1.2. Categories of financial instruments
GROUP COMPANY
December 31 December 31 December 31 December 31
2024 2023 2024 2023
Financial assets
Cash and cash equivalents 16,542 24,015 9,001 16,302
Loans and receivables 89,025 80,070 61,945 52,168
Total financial assets 105,567 104,085 70,946 68,470
Financial liabilities
Bank loans 19,230 25,113 14,820 19,501
Corporate bonds 18,581 21,235 18,581 21,235
Other financial liabilities 1,751 898 3 22
Total financial liabilities 39,562 47,246 33,404 40,758



Graphics
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)

41. FINANCIAL INSTRUMENTS (CONTINUED)
41.2. Foreign currency risk management
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:
GROUP Assets Liabilities Difference
December December December December December December
31 2024 31 2023 31 2024 31 2023 31 2024 31 2023
USD 4,454 6,057 (22,541) (15,246) (18,087) (9,189)
COMPANY Assets Liabilities Difference
December December December December December December
31 2024 31 2023 31 2024 31 2023 31 2024 31 2023
USD 15,935 6,745 (25,445) (14,262) (9,510) (7,517)
41.2.1. Analysis of sensitivity to currency risk
The following table shows analysis of the Group’s sensitivity to a 10% increase and decrease of the euro
against foreign exchange rate against the relevant foreign currencies. Sensitivity rate of 10% is the rate which
is used in internal reports on foreign exchange risk which are presented to the Management and represents
the Management's assessment of the reasonably possible change in foreign exchange rates. The sensitivity
analysis includes only outstanding monetary foreign currency balances and it is used for translation of
balances which are adjusted for a 10% change in the foreign exchange rates. The sensitivity analysis includes
external borrowings, as well as loans to foreign entities of the Group denominated in a currency that is not
the currency of the lender or the borrower. A positive number below indicates an increase in profit and other
equity when the euro strengthens 10% against the relevant currency. For a 10% weakening of the euro
against the relevant currency, there would be an equal and opposite impact on the profit, and the balances
below would be negative.



Graphics
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
138 M SAN GRUPA ANNUAL REPORT 2024


41. FINANCIAL INSTRUMENTS (CONTINUED)
41.2. Foreign currency risk management (continued)
41.2.1. Analysis of sensitivity to currency risk (continued)
GROUP USD impact
2024 2023
Profit/Loss (1,809) (919)
USD impact
COMPANY 2024 2023
Profit/Loss (951) (752)

41.3. Credit risk management
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.
The Group's customer portfolio is highly diversified, and the 10 largest customers account for 21.2% of sales
revenue. If customers with a common ultimate owner are excluded, the top 10 customers account for 13.5%
of sales revenue.



Graphics
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)


41. FINANCIAL INSTRUMENTS (CONTINUED)
41.4. Interest risk management
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 have 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 100-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 100 basis points higher/lower and all other variables were held constant, the interest
expense of the Company as of 31 December 2024 would have changed by EUR 148 thousand (31 December
2023: EUR 195 thousand), and the Group as of 31 December 2024 would have changed by EUR 153
thousand (31 December 2023: EUR 212 thousand). Interest rates on issued corporate bonds and loans were
not considered because they are instruments with fixed interest rates.

41.5. Liquidity risk management
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.
41.5.1. Liquidity and interest rate risk tables
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.



Graphics
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
140 M SAN GRUPA ANNUAL REPORT 2024

41. FINANCIAL INSTRUMENTS (CONTINUED)
41.5. Liquidity risk management (continued)
41.5.1. Liquidity and interest rate risk tables (continued)
GROUP Up to 1 1 to 3 3 months to 1 to 5 After 5
December 31 month months 1year years year Total
2024
Assets
Non-interest 101,022 - 20 - 101,042
bearing
Interest
bearing - - 1,441 3,084 - 4,525
instruments
Total assets 101,022 - 1,441 3,104 - 105,567
Liabilities
Non-interest 90,585 - - - - 90,585
bearing
Lease 47 94 421 1,190 - 1,751
liabilities
Interest
bearing 2,745 2,836 14,089 18,142 - 37,811
instruments
Total 93,377 2,929 14,509 19,332 - 130,148
liabilities
Net asset / 7,903 (2,929) (13,068) (16,229) - (24,324)
(liabilities)
GROUP Up to 1 1 to 3 3 months After 5
December month months to 1 year 1 to 5 years year Total
31 2023
Assets
Non-interest 100,747 - - 24 - 100,771
bearing
Interest
bearing - - 1,719 2,468 - 4,187
instruments
Total assets 100,747 - 1,719 2,492 - 104,958
Liabilities
Non-interest 74,059 - - - - 74,059
bearing
Lease 41 82 369 406 - 898
liabilities
Interest
bearing 3,140 3,627 17,646 21,935 - 46,348
instruments
Total 77,240 3,709 18,015 22,341 - 121,305
liabilities
Net asset / 23,507 (3,709) (16,296) (19,849) - (16,347)
(liabilities)



Graphics
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)

41. FINANCIAL INSTRUMENTS (CONTINUED)
41.5. Liquidity risk management (continued)
41.5.1. Liquidity and interest rate risk tables (continued)
COMPANY Up to 1 1 to 3 3 months After 5
December 31 month months to 1 year 1 to 5 years year Total
2024
Assets
Non-interest 66,684 - - 17 - 66,701
bearing
Interest bearing - - 2,358 1,930 - 4,288
instruments
Total 66,684 - 2,358 1,947 - 70,989
Liabilities
Non-interest 71,701 - - - - 71,701
bearing
Finance lease - 1 2 - - 3
liabilities
Interest bearing 2,403 2,151 11,007 17,840 - 33,401
instruments
Total 74,104 2,152 11,009 17,840 - 105,105
Net asset / (7,420) (2,152) (8,651) (15,893) - (34,117)
(liabilities)
COMPANY Up to 1 1 to 3 3 months After 5
December 31 month months to 1 year 1 to 5 years year Total
2023
Assets
Non-interest 65,771 - - 17 - 65,788
bearing
Interest bearing - - 353 2,429 - 2,782
instruments
Total 65,771 - 353 2,446 - 68,570
Liabilities
Non-interest 58,202 - - - - 58,202
bearing
Finance lease 2 3 15 1 - 21
liabilities
Interest bearing 2,725 2,795 13,905 21,312 - 40,736
instruments
Total 60,928 2,798 13,920 21,313 - 98,959
Net asset / 4,843 (2,798) (13,567) (18,867) - (30,389)
(liabilities)



Graphics
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
142 M SAN GRUPA ANNUAL REPORT 2024

41. FINANCIAL INSTRUMENTS (CONTINUED)
41.6. Fair value of financial instruments
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 2024, 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 hierarchy 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.



Graphics
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)

41. FINANCIAL INSTRUMENTS (CONTINUED)
41.7. Market risk
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.


42. CONTRACTUAL AND CONTINGENT LIABILITIES
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. The table below details the Group's and the Company's contracted liabilities per
operating leases:
GROUP COMPANY
2024 2023 2024 2023
Within one year 3,819 2,809 962 739
1-5 years 22 22 - -
Total 3,841 2,831 962 739
Future liabilities are presented at the cumulative level for the entire contract duration for contracts with a maturity
of more than one year.


Graphics
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
144 M SAN GRUPA ANNUAL REPORT 2024
43. BUSINESS COMBINATIONS AND DEACQUISITIONS
43.1. BUSINESS COMBINATIONS AND DEACQUISITIONS IN 2023
A. DISPOSAL OF SUBSIDIARY ZELENA AGENDA 1.0
In March 2023, the Company disposed of its subsidiary Zelena Agenda 1.0 d.o.o. to Pametna energija d.o.o.,
a company under common ultimate ownership. The transaction was carried out at book values and had no
impact on the Company’s profit or loss for 2023. The total net carrying amount of the disposed assets was
EUR 132 thousand as of 6 March 2023.
B. ACQUISITION OF SUBSIDIARY DATA LINK D.O.O.
In July 2023, upon fulfillment of all contractual conditions stipulated in the share purchase agreement signed
in May 2023 for the acquisition of a 100% ownership stake in Data Link d.o.o., Croatia, the Company
completed the acquisition of the aforementioned entity. The estimated purchase price for the 100% stake
amounts to EUR 2,277 thousand, of which EUR 1,907 thousand was paid upon closing of the transaction.
The remaining amount represents the expected contingent consideration, dependent on the subsidiary's EBIT
performance during the 2023–2026 period. Consequently, the Company obtained control over the subsidiary
as of 1 July 2023, and it has been consolidated into the Group's financial statements from that date. Following
the completion of the Purchase Price Allocation (PPA), the Company recognized goodwill in the amount of
EUR 567 thousand arising from this transaction (Note 18).
07.2023
Property, plant and equipment 707
Intangible assets 51
Inventory 376
Trade receivables 157
Cash and cash equivalents 60
Other short-term assets 14
Total assets 1,365
Long-term liabilities 209
Short-term liabilities 511
Total liabilities 720
Book value of net assets 645
43.2. BUSINESS COMBINATIONS AND DEACQUISITIONS IN 2024
A. ACQUISITION OF SUBSIDIARY ASK TEC D.O.O.
In May 2024, the Company acquired a 100% ownership stake in ASK TEC d.o.o., Kosovo a company under
common ultimate ownership. The estimated purchase price for the full stake amounts to EUR 5,900 thousand.
As a result, the Company obtained control over the subsidiary as of 15 May 2024, and it has been
consolidated into the Group’s financial statements from that date. Following the completion of the Purchase
Price Allocation (PPA), the Company recognized goodwill in amount of EUR 4,427 thousand arising from this
transaction (Note 18).

Graphics
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
43. BUSINESS COMBINATIONS AND DEACQUISITIONS (CONTINUED)
43.2. BUSINESS COMBINATIONS AND DEACQUISITIONS IN 2024 (CONTINUED)
A. ACQUISITION OF SUBSIDIARY ASK TEC D.O.O. (CONTINUED)
05.2024
Property, plant and equipment 92
Intangible assets -
Ostala dugotrajna imovina -
Inventory 1,338
Trade receivables 3,123
Cash and cash equivalents 349
Other short-term assets 138
Total assets 5,041
Long-term liabilities -
Short-term liabilities 3,641
Total liabilities 3,641
Book value of net assets 1,400
44. SUBSEQUENT EVENTS
There were no other significant events after the balance sheet date that would require reconciliation or
disclosure in the consolidated and separate financial statements.
45. AUDIT FEES
Fees for the statutory audit of the Group’s financial statements amounted to EUR 167 thousand (2023: EUR
127 thousand), while fees for other services amounted to EUR 0 thousand (2023: 0 thousand).

Graphics
Notes to the consolidated and separate financial statements (continued)
for the year ended 31 December 2024
(all amounts are expressed in thousands of euro)
146 M SAN GRUPA ANNUAL REPORT 2024
46. APPROVAL OF THE FINANCIAL STATEMENTS
Consolidated and separate financial statements for the year ended on December 31, were approved by the
Management Board and authorised for issue on April 30, 2025

Irena Langer-Breznik
Žarko Kruljac
Vladimir Brkljača
President of Management Board
Member of Management Board
Member of Management Board
Alen Panić
Bruno Jozić
Member of Management Board
Member of Management Board

Graphics
M SAN GRUPA ANNUAL REPORT 2024. 63
Sustainability
Report
2024

Graphics
M SAN GRUPA ANNUAL REPORT 2024. 148
Vladimir Brkljača
Member of the Management Board
Irena Langer-Breznik
Chairperson of the Management Board
Žarko Kruljac
Member of the Management Board
Alen Panić
Member of the Management Board
Bruno Jozić
Member of the Management Board
Statement of Management Responsibility
In accordance with the provisions of Articles 32 and 36 of the Accounting Act (Official Gazette 85/2024,
145/2024) the Management Board is responsible for the preparation of the consolidated Sustainability Report
in accordance with the European Sustainability Reporting Standards (ESRS), and for:
• the preparation of disclosures in the section “Information in accordance with the Article 8 of Regulation
(EU) 2020/852 (Taxonomy Regulation)” of the consolidated Sustainability Report in accordance with the
reporting requirements of Article 8 of Regulation (EU) 2020/852 (Taxonomy Regulation),
• the design, implementation and maintenance of internal control systems as determined necessary by the
Management Board to enable the preparation of the consolidated Sustainability Report free from material
misstatement due to fraud or error, the selection and application of appropriate sustainability reporting
methods, and
• the formulation of reasonable estimates and judgements concerning individual sustainability disclosures
under the given circumstances.
The Management Board is also responsible for the design and implementation of a process to identify
information to be disclosed in the consolidated Sustainability Report in accordance with the ESRS, and for
disclosing this process in the section “ESRS 2 IRO-1 – Description of the processes to identify and assess
material impacts, risks and opportunities” in the consolidated Sustainability Report. This responsibility
includes:
• understanding the context in which the Group’s activities and business relationships take place, as well as
understanding the affected stakeholders,
• identifying actual and potential (negative and positive) impacts related to sustainability matters, as well as
risks and opportunities that affect or could reasonably be expected to affect the Group’s financial position,
financial performance, cash flows, access to finance or cost of capital in the short, medium or long term,
• assessing the materiality of identified impacts, risks and opportunities related to sustainability matters by
selecting and applying appropriate materiality thresholds, and
• making assumptions that are reasonable under the circumstances.
The Management Board of M SAN Grupa approved the consolidated Sustainability Report for issuance on 30
April 2025.

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M SAN GRUPA ANNUAL REPORT 2024. 149
ESRS 2 – General disclosures
Basis for preparation
BP-1
General basis for preparation of the
statement
General disclosures - Basis for
preparation
150
BP-2
Disclosures in relation to specific
circumstances
General disclosures - Basis for
preparation
151
TOPIC DESCRIPTION CHAPTER PAGE
Impact, risk and opportunity management
IRO-1
Description of the processes to identify
and assess material impacts, risks and
opportunities
General disclosures - Double materiality
160, 168, 186,
201, 217, 222,
230
IRO-2
Disclosure requirements in ESRS covered by
the undertaking’s sustainability statement
General disclosures - Double materiality 164
Governance
GOV-1
The role of the administrative, management
and supervisory bodies
General disclosures - management of
sustainability matters
153
GOV-2
Information provided to and sustainability
matters addressed by the undertaking’s
administrative, management and
supervisory bodies
General disclosures - management of
sustainability matters
156
GOV-3
Integration of sustainability-related
performance in incentive schemes
General disclosures - management of
sustainability matters
157
GOV-4
Statement on due diligence
General disclosures - management of
sustainability matters
157
GOV-5
Risk management and internal controls over
sustainability reporting
General disclosures - management of
sustainability matters
158
Strategy
SBM-1
Strategy, business model and value chain
General disclosures - Strategy and
business model
159
SBM-2
Interests and views of stakeholders
General disclosures - Double
materiality
159
SBM-3
Material impacts, risks and opportunities and
their interaction with strategy and business
model
General disclosures - Double
materiality
167, 186,
195, 216,
222
GENERAL DISCLOSURES ESRS 2

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M SAN GRUPA ANNUAL REPORT 2024. 150
M SAN Grupa publishes its Sustainability Report as set out by the Accounting Act (Official Gazette of the
Republic of Croatia, Nos. 85/2024, 145/2024) and Capital Markets Act (Official Gazette of the Republic of Croatia,
Nos. 65/2018, 17/2020, 83/2021, 151/2022, 85/2024) for the first time. The Report has been published as part
of the Management Report, in line with Commission Delegated Regulation (EU) 2023/2772 supplementing
Directive 2013/34/EU of the European Parliament and Council as regards sustainability reporting standards
(European Sustainability Reporting Standards (ESRS)). The Sustainability Report incorporates information
under Article 8 of Regulation (EU) 2020/852 on establishing a framework to facilitate sustainable investment
(Taxonomy Regulation).
The Report has been made on consolidated basis in line with the financial statements of M SAN Grupa and
includes the reporting period from 1 January to 31 December 2024. The Report includes significant events.
Disclosures relate to M SAN Grupa d.o.o. za proizvodnju računala, trgovinu i uvoz-izvoz, with a registered
office in Rugvica, the Republic of Croatia, which owns several companies in Croatia and other states. In
its distribution branch, several affiliated companies operate in the region: KimTec d.o.o. in Bosnia and
Herzegovina, KimTec d.o.o. in Serbia, KimTec d.o.o. in Montenegro, Pakom Kompani d.o.o.e.l. in Macedonia,
Alterna distribucija d.o.o. in Slovenia and ASK Tec d.o.o. in Kosovo. In its portfolio, the Group also includes
logistics that primarily relates to storage, handling and transport of goods (M SAN Logistika d.o.o.),
provision of servicing and repair of goods within the warranty period and beyond the warranty period (MR
Servis d.o.o., KIM TEC-SERVIS d.o.o. Vitez, KIM TEC SERVIS d.o.o. Beograd) and the collection and disposal of
electrical and electronic waste (M SAN EKO d.o.o., KIM TEC EKO d.o.o. Vitez). Apart from above-mentioned
companies, DATA Link d.o.o. and Centar kompetencije za zelenu energiju d.o.o. related to LED lighting are
also part of the Group. The Group has one branch office in Zagreb.
As of 31 December 2024, M SAN Grupa comprised 17 undertakings. The Group places special emphasis
on the production and development of proprietary brands, where production takes place in the Republic
of Croatia, the Republic of Serbia, the People’s Republic of China and the Republic of Turkey. Most of the
manufacturing takes place in third-party plants, while the assembly of personal computers, TV sets and
electric bicycles, as well as the production of LED lighting of proprietary brands, takes place in the facilities
of the Group in the Republic of Croatia and the Republic of Serbia. The growth of the M SAN Grupa’s
business continues by expanding the Group’s logistics network. An extremely long and complex value
chain of the Group and its dispersion in terms of various business activities poses numerous sustainability
reporting challenges. Pronounced data dispersion further complicates data collection and verification of
their reliability. For some indicators, collecting and consolidating data supporting this Sustainability Report
was impossible.
So far, M SAN Grupa was strongly focused on growth and market development and product quality
assurance and so various sustainability aspects across the value chain were considered for some situations
only. In 2024, M SAN Grupa checked material impacts, risks and opportunities based on previous impact
analyses. Decisions on objectives and key performance indicators were also made. From 2024, the internal
ESG organisation started to develop, supporting the development of the environmental, social and
governance matters and their integration into the business operations of the Group.
ESRS 2, BP-1, BP-2
Basis for preparation

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M SAN GRUPA ANNUAL REPORT 2024. 151
In 2025, M SAN Grupa intends to strengthen its sustainability approach, which includes an in-depth overview
and mapping of the value chain, impacted stakeholders and focal sustainability points. Additionally, the
goal is to re-implement a deep dive and analysis of the impacts, risks and opportunities to more precisely
define and, if necessary, review the results of the double materiality assessment. Furthermore, in 2024, M
SAN Grupa set the cornerstones for its Sustainability Strategy, defining targets for key areas, which will be
developed in more detail in 2025. We are aware of the necessary improvements relating to our calculations,
record keeping, collection and tracking of data to achieve the expected improvement in the management
of sustainability topics in the future. M SAN Grupa will continue developing mechanisms for ensuring
sustainability compliance with the expectations of our stakeholders and best practice recommendations.
Also, we will continue integrating environmental, social and governance matters into our business processes
and decisions.
M SAN Grupa has not used the possibility to omit information on intellectual property, know-how, experience
or innovation results, and on disclosing upcoming events. This Sustainability Report includes own operations
and production activities and the upstream and downstream value chain activities, wherever possible and
to the extent possible. Although our financial statements use definitions prescribed by the International
Financial Reporting Standards, for this Sustainability Statement we have used the definitions for short-, mid-
and long-term periods defined by ESRS.
ESRS 2, BP-2
M SAN Grupa reports in line with the European Sustainability Reporting Standards (ESRS) for the first time.
Changes in reporting and errors from previous reporting periods

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M SAN GRUPA ANNUAL REPORT 2024. 152
ESRS 2, BP-2
In some disclosures included in this Report, integral data was unavailable or was unavailable for all markets.
Assumptions, approximations and estimates were not used for the parts for which complete or reliable data
were unavailable. Instead, it is clearly stated that the data is unavailable or uncollected. The challenge in
collecting and reporting data is caused by a high dispersion of the sources of information and the Group’s
prior focus on different strategic priorities.
In the chapter ESRS E1 Climate change and energy, GHG Scope 1 and 2 emissions were calculated for 2023. Due
to a high business granularity, the complexity concerning the availability and recording of data, as well as an
extensive value chain and various data owners within the organisation, more than six months were needed to
collect and consolidate the data on GHG emissions for 2023. Given these challenges, until the end of the year
it was difficult to collect and consolidate the data for 2024 in a timely manner. In the meantime, M SAN Grupa
gained a better insight into the key focus areas to improve its data collection processes. Therefore, the 2024
GHG emissions report is expected to be will be finalised by 30 June 2025.
In the chapter ESRS E5-3 Resource use and circular economy, it was impossible to disclose the required data.
Sources of estimation and outcome uncertainty
ESRS 2, BP-2
In line with Appendix C of ESRS 1, M SAN Grupa decided to omit information, whose disclosure is possible to
postponed in the first reporting year. Following that, certain information on matters relating to ESRS SBM-3
para 48c, ESRS E1-9, ESRS E2-6, ESRS E5-6 and ESRS S1-7 to ESRS 1-15 was omitted.
Implementing provisions on phasing in under ESRS 1, Appendix C
ESRS 2, BP-2
Incorporation by reference
G1 ESRS 2 GOV-1 para 5a
Detailed information on the composition and activities of
the Management Board and Supervisory Board
ESRS 2 GOV-1 – The role of the administrative,
management or supervisory bodies
ESRS 2 GOV-1 para 21c/G1 ESRS 2 GOV-1 para 5b
Curricula vitae of members of the Management Board and
Supervisory Board
ESRS 2 GOV-1 – The role of the administrative,
management or supervisory bodies
ESRS 2 SBM-1 para 40f
Significant products and/or services and significant markets
and customer groups
ESRS 2 SBM-1 Strategy, business model and value
chain
ESRS 2 SBM-1 para 42c
Significant products and/or services and significant markets
and customer groups
ESRS 2 SBM-1 Strategy, business model and value
chain
Disclosure requirement (data point) Reference, chapter

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M SAN GRUPA ANNUAL REPORT 2024. 153
ESRS 2, GOV-1
The role of the administrative, management or supervisory bodies concerning business conduct is key to
ensuring ethical and responsible business operations. The administrative bodies set the legal framework
and standards that define the expected business conduct. Supervisory bodies ensure that undertakings
comply with regulations and standards. Administration bodies may require regular reports on business
conduct and related activities, which additionally ensures responsibility in processes and business
operations.
The role of administrative, management or supervisory bodies
M SAN has a Management Board and a Supervisory Board as the key corporate governance bodies. The
Management Board of M SAN Grupa manages the business operations taking into account sustainability
and ESG (environmental, social and governance) standards, while the Supervisory Board monitors the
efficiency of implementing the sustainability strategy. M SAN Grupa’s Audit Committee oversees its financial
statements, implementation of internal controls and risk assessment concerning sustainable business. More
details on corporate governance are available in the Management Report on page 21.
Governance structure
The Committee’s tasks are: setting the strategic directive for managing sustainability issues in line with
material topics approved by the Management Board, monitoring the implementation of ESG matters in
business operations, identifying ESG risks and alignment with regulatory requirements and coordinating
sustainability-related initiatives with the business goals and strategy.
The Sustainability Committee was established in July 2024 and comprises 11 permanent and some
temporary members. Permanent Committee members are: Management Board member for Sustainability,
expert for sustainable development and business, Human Resources Director, Marketing Director, M SAN
Nekretnine Director, Company’s Legal Officer, Head of Product Development, Head of Waste Management
and Head of General Affairs. Temporary members participate in the Committee’s work as necessary, and
they are, most often, Directors of affiliated companies in the region, Head of Transport – M SAN Logistika,
Head of Business Processes Analysis, Production Department Director and others.
Sustainability Committee
Managing sustainability issues
The Management Board also reviews and discusses the topics relating to business continuity. The
Management Board member in charge of the Enterprise segment is also in charge of the matters of
environmental, social and governance sustainability. In this process, the Management Board member in
charge of the Enterprise segment cooperates with an expert for sustainable development and business in
a planned and structured manner. Plans and activities for all short- and long-term sustainability matters are
agreed upon jointly. Additionally, each Management Board member of M SAN Grupa actively contributes to
the understanding and development of the sustainability strategy within their scope of activities, including
IT and CE Distribution, Enterprise, Green Technologies and proprietary brands such as Vivax. This approach
enables aligned activities and sets the foundation for further sustainability improvements.
Key managers role

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M SAN GRUPA ANNUAL REPORT 2024. 154
The Committee
meets annually to discuss all matters concerning sustainability, approvals and
harmonisations, or as necessary in the event of extraordinary needs. The Management Board is informed
of the Committee’s conclusions. It confirms the Committee’s decisions, which the line managers of the
respective organisational units implement. The Sustainability Committee is a key structure of M SAN Grupa
that ensures compliance with ESG standards and promotes sustainable business practices. The most recent
meeting of the Sustainability Committee was held at the end of 2024.
Information on the members of the Supervisory Board and the Management Board of M SAN Grupa can
be found in the Management Report on page 22. As of 31 December 2024, the Management Board of M
SAN Grupa was composed of seven members, six of whom were men and one was a woman. The
representation of women on the Management Board of M SAN Grupa stands at 14.3%. The
Supervisory Board’s Audit Committee of M SAN Grupa has one independent member.
Members of the Management Board of M SAN Grupa possess and continuously enhance their sustainability-
related competencies, including technological innovation, process optimisation, regional expansion, future
product planning and strengthening business models that integrate sustainable practices. Each member
contributes to specific aspects of sustainability through their responsibilities and areas of expertise. Below
is a brief description of the sustainability competencies of the Management Board:

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M SAN GRUPA ANNUAL REPORT 2024. 155
ESRS 2, GOV-1, ESRS 1 ESRS 2 GOV-1 AR5
Irena Langer Breznik, President of the Management Board
Sustainability-related competences: Long-term experience in leading eCommerce development and digital
transformation, which includes business processes optimisation with the potential to decrease environmental
impact. Focus on innovation and regional operations including sustainable procurement processes and
labour practices. Sustainability contribution: Integration of digital tools to reduce emissions across the value
chain and enhance efficiency through digitalisation.
Goran Kotlarević, Management Board member (until 1 March 2025)
Sustainability-related competences: Development and expansion of sales operations and business growth in
the region. Strong focus on market recognition alongside developing regional distribution with sustainable
practices. Sustainability contribution: Utilisation of regional distribution centres to reduce transport emissions
and enhance logistical efficiency.
Žarko Kruljac, Vice-President of the Management Board
Sustainability-related competences: Doctoral degree in economic sciences focusing on resource management.
Specialisation in strengthening partner network and adapting to market changes.
Sustainability contribution: Application of economic models involving resource optimisation and long-term
growth strategies that support sustainable development.
Slaven Stipančić, Management Board member (until 1 March 2025)
Sustainability-related competences: Focus on procurement process improvement and expansion of the
distribution portfolio. Contracting partnerships with leading global brands that promote sustainable products
and solutions. Sustainability contribution: Introduction of products that reduce environmental footprint and
promote climate- and environmentally responsible solutions within the distribution portfolio.
Alen Panić, Management Board member
Sustainability-related competences: Led the high-tech and project business department, including solutions
for infrastructure, cloud operations and software tools. Participated in IT conferences focused on sustainability
and technological solutions.
Sustainability contribution: Development of advanced ICT solutions that facilitate resource optimisation and
support emission reduction objectives.
Vladimir Brkljača, Management Board member
Sustainability-related competences: Development of the VIVAX brand, including implementing projects for the
production of energy-efficient devices such as LED TV sets and electric bicycles. He led the project for the
relocation and construction of production facilities in Croatia with a focus on local sustainability. In 2024, he
completed an MBA programme at IEDC Bled School of Management, which includes a focus on sustainability,
enabling expert insights about integrating sustainable practices into the Group’s strategic objectives.
Sustainability contribution: Promoting products with low climate and environmental impact and development
of brands that support the circular economy concept.
Bruno Jozić, Management Board member (as of 1 June 2024)
Sustainability-related competences: For ten years, he led the operations of M SAN Grupa in the Montenegrin
market as Country Manager of the company Kim Tec in Podgorica. During that period, he positioned the
company as the leading distributor of IT and CE products in the Montenegrin market and achieved outstanding
financial and commercial results. Sustainability contribution: as Management Board member of M SAN Grupa, he is in
charge of the ITCE division and contributes to the development of solutions with a reduced environmental footprint.

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ESRS 2, GOV-2
Information provided to and sustainability matters addressed by the undertaking’s
administrative, management and supervisory bodies
The Management Board of M SAN Grupa is included in assessing, planning and managing sustainability
matters in all segments – environmental, social and governance. In addition to regularly receiving information
on sustainability topics, Management Board members also initiate and actively participate in meetings,
workshops and educational activities related to sustainability.
The Management Board initiated surveys to assess employee engagement and workplace climate, with a
particular focus on the social dimension of sustainability to improve labour practices. In 2024, the Sustainability
Committee and a working group were established, whose members regularly receive training on sustainability
topics. A Sustainability and Business Expert was also employed, whose tasks include, among other things,
raising awareness of sustainability within the organisation and implementing sustainable practices
Two workshops were conducted for the Management Board in 2024 to enhance their knowledge and
competencies in the field of sustainability. External consultants were engaged to calculate greenhouse gas
emissions and to improve plans in the area of emissions management. In addition, external advisers were
engaged to plan an upgrade of the sustainability strategy in 2025, including an enhancement of the double
materiality assessment, in-depth sustainability risk assessments across all business segments and a due
diligence analysis of the value chain.
In 2025, an upgrade of the sustainability strategy is planned to ensure a more effective integration of
sustainability matters into business operations. The decision-making process for upgrading the existing 2024
strategy is based on the principles of strategic planning and the inclusion of double materiality, to ensure
sustainability and accurate impact assessment. The key steps of this process include:
- analysis of the current state and evaluation of the 2024 strategy;
- definition of the framework for double materiality;
- impacts, risks and opportunities analysis;
- implementation and management of strategy;
- review and adjustment of necessary areas.
The upgrade of the 2024 strategy requires a comprehensive approach to ensure an inclusive and adaptable
decision-making process, enabling the organisation to create long-term value for all stakeholders and
contribute to sustainable development.
At the time of drafting the Sustainability Report, no workers’ representative had been elected at M SAN Grupa
and, therefore, the consultation process in accordance with Article 34 of the Accounting Act (Official Gazette of
the Republic of Croatia, Nos 85/24, 145/24) could not be conducted. Once a workers’ representative is elected,
the workers’ representative will be informed about the Sustainability Report.

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M SAN GRUPA ANNUAL REPORT 2024. 157
ESRS 2, GOV-3
Integration of sustainability-related performance in incentive schemes
Supervisory Board members do not receive remuneration for their work. Remuneration to Management Board
members is set out by their contracts. The salary of Management Board members is comprised of a fixed and
a variable performance-based part. The remunerations and salaries of Management Board members do not
include key performance indicators relating to sustainability objectives.
Embedding due diligence in governance,
strategy and business model
Managing sustainability issues
Strategy and business model
Policies related to material topics within topical standards (E1, E5, S1,
S2, S4, G1)
Engagement with affected stakeholders in
all key steps of the due diligence process
Managing sustainability issues
Double materiality
Including stakeholders related to material topics within topical
standards (E1, E5, S1, S2, S4, G1)
Identifying and assessing negative impacts
Managing sustainability issues
Double materiality
Our material impacts, risks and opportunities related with material
topics within topical standards (E1, E5, S1, S2, S4, G1)
Taking actions to address these negative
impacts
Actions and activities related to material topics within topical
standards (E1, E5, S1, S2, S4, G1)
Tracking the effectiveness of these efforts
and communication
Objectives and indicators related to material topics within topical
standards (E1, E5, S1, S1, S2, S4, G1)
Key due diligence elements Reference in the sustainability statement
ESRS 2, GOV-4
Statement on due diligence
Due diligence, as a process of identifying, preventing, mitigating or describing how actual or potential negative
impacts on people and the environment are addressed, is partially integrated into the Management Board’s
considerations within the impact assessment process. In doing so, publicly available disclosures from relevant
international organisation, rating agencies and industry-specific topics important according to the SASB
standard reporting were used. To fully comply with ESRS requirements and other international instruments
relating to the precision of objectives and data integrity, in 2025, M SAN Grupa will conduct an in-depth due
diligence process to audit its double materiality assessment process.
Due diligence elements included in the Sustainability Report are described below:

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M SAN GRUPA ANNUAL REPORT 2024. 158
ESRS 2, GOV-5
Risk management and internal controls over sustainability reporting
In 2024, M SAN Grupa adopted a new Risk Management Strategy for M SAN Grupa and its affiliated companies.
The purpose of this Strategy is to clearly define how the Group approaches the risks to which it is or may
be exposed in its operations, with the aim of preventing ambiguity, inconsistency and imbalance in risk
management. The Strategy is designed to enhance the effectiveness of risk management and to embed risk
management into corporate culture. This positions risk management as a standard part of the planning and
decision-making process, enabling a comprehensive and consistent approach across all business segments.
The Strategy also aims to establish an effective system for coordinating risk management and ensures that the
key elements of this system are applied and respected at all levels of the organisation. Particular emphasis is
also placed on sustainability-related risks, which have been recognised as one of the fundamental types of risk
within this Strategy.
In 2024, M SAN Grupa also adopted a Risk Management Policy and a Risk Tolerance Statement. The Policy sets out
the objectives of risk management and provides a framework for a continued integration of risk management
processes throughout the organisation, with defined roles and responsibilities and a structured process. The
Policy prescribes the internal control system for risk management. The Management Board is responsible for
risk management processes, while the implementation rests with the Directors of organisational units. M SAN
Grupa has also adopted the Risk Management Regulations of M SAN Grupa and Affiliated Companies. It sets
out the risk management system in more detail.
In 2025, the Strategy, Policy and Risk Management Regulations are planned to be further aligned with the aim
of centralising and consolidating responsibilities and competences. The updated documents will also include
a more in-depth approach to sustainability risk management, following the enhanced double materiality
assessment process.
To further ensure the effectiveness of managing economic and financial business risks, in 2024 a person having
expertise in risk management was employed as at M SAN Grupa as Director of Strategic Risk Management.
Certain material sustainability risks are described in separate topical chapters of this Report.

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M SAN GRUPA ANNUAL REPORT 2024. 159
ESRS 2, SBM-1
Strategy, business model and value chain
M SAN Grupa’s Sustainability Report covers the Group’s business activities in the Republic of Croatia and the
region. The main business activities of M SAN Grupa are the distribution of computer hardware, software and
consumer electronics, production and production technology, software solutions and LED lighting technolo-
gy. The Group also distributes IT equipment and consumer electronics of proprietary brands, including TV sets,
air conditioners, large appliances, desktop computers and electrical mobility products. The Group also deals
with logistics, and collection and disposal of electrical and electronic waste. The business segments,
portfolio and sales channels of M SAN Grupa have been described in detail on page 10 of the Management
Report. The business model of M SAN Grupa is based on building and maintaining trust and reliability of
cooperation with suppliers and customers, developing product portfolio diversity and financial stability and
paying special attention to the products of proprietary brands.
B
usiness revenues per business line are shown on page 33 of the Management Report.
In line with its business activities, M SAN Grupa has an extremely long value chain that involves numerous
stakeholders. Being organised into four divisions, described in the Management Report on page 27, the Group
organises its business processes that vary across segments, depending on the specific characteristics of each value
chain. M SAN Grupa has taken basic steps in the detailed mapping of its value chain and related stakeholders.
The following important value chain components were recognised in mapping:
The upstream value chain, which, depending on the particular division, includes:
- Market research
- Procurement of materials and components
- Factory inspections and quality control
- Product development
- Inbound transport
Value chain in own operations includes:
- Production processes
- Quality control
- Marketing and sales
- Other non-production and support processes
Downstream value chain includes:
- Product transport and distribution
- Distribution and retail sales channels
- Authorised service centres and customer support
- Customers and end users – product use
- Waste disposal, recovery and recycling
ESRS 2, SBM-2
Stakeholder engagement
Interests and views of stakeholders are referred to in the double materiality chapter and have been additionally
described in topical standards, where necessary.

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M SAN GRUPA ANNUAL REPORT 2024. 160
Double materiality process
M SAN Grupa’s business activities to date have primarily focused on identifying and managing economic, i.e.
financial impacts and risks, thereby ensuring the stability and sustainable growth of the Group. However, given
the increasingly complex and dynamic business environment, and in the context of continued implementation
of the Sustainability Strategy, the Management Board deems it necessary to broaden its risk management
approach. It has therefore been determined that, during 2025, a more in-depth analysis of the negative and
positive impacts, risks and opportunities (Impact Risk Opportunity – IRO) must be conducted, enabling a
comprehensive overview of impacts, risks and opportunities across all business segments. This will result in a
revision of the previous materiality assessment.
M SAN Grupa conducted an impact materiality assessment in 2023, based on which an impact matrix was
developed. According to the process description applied, the sustainability context assessment was first
carried out, taking into account the business model description, organisational structure, portfolio, business
partners and channels of the Group, the Group’s value chain, locations of its business activities, ESG impacts
related to consumer electronics manufacturing and distribution sector and other aspects. In the second phase,
the actual and potential impacts of M SAN Grupa on the environment and society were identified. In this phase,
the stakeholders on whom the Group has a significant impact were also identified. In the third phase, the
significance of individual impacts was assessed through a survey (stakeholders’ involvement) across 13 topics
that have the most significant impacts on stakeholders. In this process, the initial financial impact matrix was
created, based on a survey in which, as the first step of assessing the financial materiality, managers evaluated
topical standards referred to in ESRS and related topics and sub-topics in accordance with ESRS 1 AR 16. This was
done based on the magnitude of potential financial impacts on M SAN Grupa and the likelihood of occurrence
of the financial impacts for M SAN Grupa.
The Management Board of M SAN Grupa conducted additional checks in a special workshop to establish the
connection between impacts, risks and opportunities, i.e., to link the findings of impact materiality with the
ESRS topics. The Management Board of M SAN Grupa determined that the significance of impacts corresponds
with the initially identified impacts and ESRS areas, linking the recognised significant topics by impact and the
initially identified risks and opportunities with ESRS areas and specific sub-areas. Certain details were identified
and verified through industry benchmarking as well as the materiality description of the SASB industrial
standard for ICT and manufacturing of electronic equipment and technical products.
Impact materiality
The assessment conducted in 2023 included an initial review of the Group’s activities and business relationships,
establishing their sustainability context, which formed the basis for identifying their materiality. To define the
topics to be assessed, the actual and potential impacts of the Group’s business activities and key stakeholders
were identified. The process of assessing the significance of impacts also included stakeholder opinions
collected through an online survey, in which 227 stakeholders participated. Stakeholders assessed the areas of
governance, environment, social matters and the working environment, as well as business operations across
13 topics. A quantitative assessment was conducted, with a significance threshold set at 75 points (on a scale
of 100 points).
Double materiality
ESRS 2, IRO-1

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M SAN GRUPA ANNUAL REPORT 2024. 161
E1 Climate change* Extremely low probability / extremely low impact
E2 Pollution Extremely low probability / extremely low impact
E3 Water and water resources Extremely low probability / extremely low impact
E4 Biodiversity and ecosystems Extremely low probability / extremely low impact
E5 Circular economy Medium probability / medium impact
S1 Own workforce Medium probability / high impact
S2 Workers in the value chain** Low probability / low impact
S3 Impact on the community Extremely low probability / low impact
S4 Consumers and end-users** Extremely low probability / low impact
G1 Business conduct Medium probability / medium impact
Financial materiality assessment
The initial assessment of the likelihood of occurrence and the magnitude of financial impacts was made by the
Management Board, evaluating the probability of a financial impact and the magnitude of potential negative
or positive financial effects on the Group’s operations. A more comprehensive and in-depth assessment of
financial materiality will be conducted after the development of a detailed risk and opportunity catalogue and
a thorough evaluation of physical and transition climate risks, which will be undertaken during 2025. It is shown
in the diagram below:
* Although financial impacts were initially assessed as low, circumstances have since occurred that would lead to a different assessment, and the topic
of climate change is now considered material.
** Although financial impacts were initially assessed as low, due to the number and vulnerability of stakeholders, the topic is considered material.
High materiality
Labour practices S1
Employee health and safety S1-1-S-5 / S1-14
Business and personal data security S1/S4
Business practices and product labelling S4
Business ethics G1
Systemic risk management ESRS 2 GOV-1
Long-term nature of the business model --
Competition --
Moderate materiality
ESG impact management in the supply chain S2/E5
Employee engagement, diversity and participation S1
Energy efficiency management E1
GHG emissions management E1
Waste management E5
Topic ESRS disclosure equivalent
In the impact assessment, the following areas were assessed as significant:

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M SAN GRUPA ANNUAL REPORT 2024. 162
Identified stakeholders and their interests and views
Employees (managers and
heads / workers / foreign
workers)
Secured employment and adequate wages
Labour rights protection
Occupational safety and protection
Professional development
Respecting diversity
Meetings
Direct and written
communication
Individual communication
Yearly engagement surveys
Onboarding talks
Informal and formal events
Consumers and end users:
consumers and business
partners / end users
Product safety and compliance
Product availability and production stability
Proper product labelling and transparency
Fair pricing
Meetings
Direct and written
communication
Participation in events
Surveys and market research
Product feedback
Suppliers and business
partners: large enterprises
/ SMEs / distributors /
carriers
Fair business relationships and procurement
processes
Timely payments to suppliers
Long-term collaboration
Measures to combat corruption and bribery
Meetings
Direct and written
communication
Audits and quality checks
Participation in events
Tenders
State organisations:
ministries / funds /
agencies / administrations
bodies / other bodies
Lawfulness of business operations
Product compliance
Responsible financial and business management
Responsible investments
Settling financial obligations timely
Meetings
Direct and written
communication
Events
Reports and announcements
Implementation of supervision
Financial stakeholders:
banks / credit institutions
/ insurance companies
/ leasing companies /
investors
Lawfulness of business operations
Responsible financial and business management
Successful business operations
Risk management
Settling financial obligations timely
Meetings
Direct and written
communication
Events
Reports and announcements
Civil society associations,
NGOs
Sponsors and donations
Direct and written
communication
Events, fairs, sports events
Education and science:
faculties / secondary
schools / scientific
institutes
Traineeships and employment
Collaboration in scientific projects
Knowledge transfer
Sponsorships and donations
Meetings
Direct and written
communication
Events and presentations
Stakeholders Interest and views
Way of communication and
engagement

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M SAN GRUPA ANNUAL REPORT 2024. 163
Uncertainty of assessment and process updates
Taking into account that the double materiality assessment considered the identification of impacts, risks and
opportunities made earlier, which the Management Board linked and aligned with ESRS topics, there is some
uncertainty relating to the double materiality assessment. The assessment was based on the previous period’s
tested context and business analysis. In 2025, we plan a comprehensive re-check of double materiality.
For the process upgrade, M SAN Grupa will undertake the following:
- a detailed mapping of the value chain, including identifying focal points and stakeholder mapping;
- material topics check: check of relevant environmental, social and governance matters related to business
operations;
- impact check: qualitative and quantitative analysis of the Group’s impact on people and the environment,
and what the material risks and opportunities are, by implementing an in-depth check of negative and
positive impacts and risks and opportunities;
- estimation of financial materiality: analysis of how the identified ESG matters can impact the financial
performance, including costs, revenue, investment and enterprise value;
- an adequate stakeholders ‘ interaction: engaging internal and external stakeholders (employees, investors,
creditors, regulatory authorities, suppliers, consumers and others) to ensure a holistic view about material
topics.
Material impacts, risks and opportunities
In the supplementary double materiality check, the M SAN Grupa’s Management Board determined the
connection between the materiality of impacts and the risks and opportunities that could affect the M SAN
Grupa’s financial performance, which correspond to the areas referred to in ESRS. M SAN Grupa uses the above-
mentioned ESRS disclosures in its 2024 Sustainability Report. General topics from the previously determined
impact materiality: “Long-term nature of the business model” and “Competition” can be related to several
ESRS areas and have thus been incorporated under respective topics. The materiality topic “Systemic risk
management” has been integrated into all material areas and, in future due diligence, all sustainability-related
risks will be re-analysed and addressed.
ESRS E1 - Climate change
√ √ √
ESRS E5 - Circular economy
√ √ √
ESRS S1 - Own workforce
√ √ √
ESRS S2 - Workers in the value chain
√ √
ESRS S4 - Consumers and end users
√ √ √
ESRS G1 - Business conduct
√ √ √
TOPIC Impact Risk Opportunity
ESRS 2, IRO-2

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M SAN GRUPA ANNUAL REPORT 2024. 164
ESRS 2, IRO-2
Material topics, sub-topics and impacts, risks and opportunities have been described under chapters on
topical standards.
Following the materiality assessment, the areas ESRS 2 “Pollution”, ESRS E2 “Water and marine resources”,
ESRS E4 “Biodiversity and ecosystems” and ESRS S3 “Affected communities” were assessed as not material. The
disclosures assessed as material are referred to in the topical chapters, or the option to postpone the disclosure
was used:
ESRS 2, IRO-1
Disclosures stemming from other legislation or generally accepted sustainability
reporting pronouncements
Disclosed in Appendix 2
DISCLOSURE Page/remark
General information
ESRS 2 – General disclosures 149
Environmental information
ESRS E1 - Climate change 165
Disclosure under Article 8 of Regulation (EU) 2020/852 (Taxonomy Regulation)
175
ESRS E5 - Circular economy 184
Social information
ESRS S1 - Own workforce 191
ESRS S2 - Workers in the value chain 215
ESRS S4 - Consumers and end users 220
Governance information
ESRS G1 - Business conduct 228
Disclosure requirements in ESRS covered by the undertaking’s sustainability
statement

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ESRS 2 GOV-3
E1
Integration of sustainability-related performance in incentive
schemes
157
ESRS 2 SBM-3
E1
Material impacts, risks and opportunities and their interaction with
strategy and business model
167
ESRS 2 IRO-1
E1
Description of the processes to identify and assess material climate-
related impacts, risks and opportunities
168
ESRS E1-1 Transition plan for climate change mitigation 167
ESRS E1-2 Policies related to climate change mitigation and adaptation 168
ESRS E1-3 Actions and resources in relation to climate change policies 168
ESRS E1-4 Targets related to climate change mitigation and adaptation 169
ESRS E1-5 Energy consumption and mix 169
ESRS E1-6 Gross Scopes 1, 2, 3 and Total GHG emissions 171
ESRS E1-7
GHG removals and GHG mitigation projects financed through carbon
credits
174
ESRS E1-8 Internal carbon pricing 174
ESRS E1-9
Anticipated financial effects from material physical and transition
risks and potential climate-related opportunities
Use of phase-in option
Disclosure requirements Information
The production of electrical and electronic devices and equipment is an intensive activity in terms of its impact
on climate change, as significant emissions are generated throughout the entire value chain. The Group’s
activities belong to sectors that significantly impact the climate according to ESRS and NACE classification,
as they include the manufacturing industry, the production of computers and peripheral equipment, cooling
and ventilation equipment, electronic devices, vehicles, as well as the collection, treatment and disposal of
hazardous and non-hazardous waste, and the transportation and storage of goods. Considering its extensive
value chain, M SAN Grupa is aware of the need to track and adapt its business decisions and processes to
reduce its climate impact as well as to adapt to climate change. The M SAN Grupa’s operations are closely linked
to climate impacts in many ways, as the production of electrical and electronic devices relies on the primary
production of components that require large amounts of energy. Furthermore, the intensive inbound and
outbound transportation generates significant greenhouse gas emissions. Energy management in production,
exposure to dynamic energy price fluctuations and energy efficiency issues are material for the M SAN Grupa’s
operations.
ESRS E1: CLIMATE CHANGE

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M SAN GRUPA ANNUAL REPORT 2024. 166
CLIMATE CHANGE
Negative impact – actual; in own operations, in the upstream and downstream value chain
GHG emissions
from production
Greenhouse gas emissions from raw material
extraction, raw material production, semi-
finished products and proprietary products,
inbound and outbound transport.
Originating from
the business model;
linked to business
relationships
Short-term to long-
term
ENERGY
Negative impact – actual; in own operations; in the upstream value chain
Electricity and
energy sources
consumption
Negative impacts associated with energy
and energy products from non-renewable
sources.
Originating from
the business model;
linked to business
relationships
Short-term to long-
term
RISKS AND OPPORTUNITIES CONNECTED WITH CLIMATE AND ENERGY
RISK; in own operations; in the upstream and downstream value chain
Increases in
transport prices
Potential increases in transport prices are
possible due to transport-related costs
and charges, as well as energy and energy
products prices
Originating from the
business context
Short-term to long-
term
OPPORTUNITIES; in own operations
Generation
and purchasing
electricity from
RES
Generation of electricity from its own solar
power plants may represent an opportunity
in terms of reducing energy costs. By
purchasing energy from RES, the footprint in
this segment would be fully reduced.
Originating from the
business model
Short-term to long-
term
Production
potential
Increased production of electrically
powered vehicles affects the use of more
environmentally friendly modes of transport.
Increased demand for cooling appliances
may have positive financial effects
Originating from the
business model and
business context
Short-term to long-
term

ESRS 2 General disclosures
Identified impacts, risks and opportunities

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M SAN GRUPA ANNUAL REPORT 2024. 167

E1-1 Transition plan for climate change mitigation
M SAN Grupa has undertaken the first phase of detailed value chain mapping and business process analysis to
identify physical and transition climate risks across all business lines, business opportunities, and key climate
change impacts originating from the business operations. The transition plan will be adopted once targets and
actions are defined and scenarios related to climate change are analysed, based on all conducted analyses.
During 2024, data was collected to calculate Scope 1 and Scope 2 GHG emissions for 2023 as the baseline year,
which were determined at the beginning of 2025. As part of the calculation of Scope 1 and Scope 2 emissions
for the baseline year 2023, recommendations for climate change mitigation actions were developed, which may
serve as a basis for the preparation of the transition plan. The recommendations do not represent a final list of
actions, as each action must be further developed from the technical, economic and environmental perspective
prior to its inclusion in the plan and implementation. This needs to be done, for example, by preparing a feasibility
study, cost-benefit analysis, life cycle assessment (LCA), or similar analyses to demonstrate the sustainability of the
respective investment. The recommendations include, in addition to calculating Scope 3 emissions, adopting
actions for Scope 3 emissions management; establishing a system for continuous measurement and monitoring
energy consumption and emissions; actions to improve energy efficiency, particularly those aimed at reducing
heat loss and optimising the operation of heating and cooling systems; increasing the share of renewable energy
sources; the use of alternative fuels and propulsion systems; and the optimisation of fuel consumption.
Due to the extreme complexity and expansion of the value chain, which involves numerous suppliers, logistics partners
and end users across various geographic regions and sectors, it is currently impossible to reliably and consistently
capture all categories of Scope 3 emissions. Limited access to standardised and high-quality data further hinders the
accuracy and reliability of reporting, particularly in the case of smaller suppliers who lack the capacity to monitor their
own emissions. At this stage, the Group is primarily focused on calculating the baseline year for Scope 1 and Scope 2
emissions, which fall under its direct operational control and can be directly influenced. At the same time, the Group
recognises the importance of incorporating Scope 3 emissions into its climate strategy and is already developing plans
for their gradual integration, starting with identifying priority categories.
ESRS 2 SBM-3
Material impacts, risks and opportunities and their interaction with strategy and business model
Climate risks can impact various business activities of M SAN Grupa. The process of extracting and processing raw
materials for electronics, such as metals and minerals, requires large amounts of energy and contributes to GHG
emissions. Raw material extraction can lead to excessive destruction of forests, water pollution and biodiversity
loss, further exacerbating the impacts of climate change. The production process also requires large amounts of
energy, often from non-renewable sources and involving the use of fossil fuels, which increases carbon dioxide
emissions. Climate change can disrupt supply chains and affect the availability of raw materials, semi-finished
products and finished goods. The concentration of critical production hubs in vulnerable regions can amplify
climate-related risks. The above-listed risks can be adequately addressed through a range of actions.
In 2024, experts from various business verticals at M SAN Grupa assessed the physical and climate-related risks
associated with specific activities. Given that most risks have been assessed as low, the following are risks some
that have been identified as medium to high risks.
Among the acute physical climate risks, the most significant are storm winds, extreme rainfall and fire. Key
chronic physical climate risks include the rise in average air temperature and changes in the type and frequency
of precipitation. Among the transitional risks, particular attention is given to product and service regulations,
regulatory changes, unsuccessful investments in new technologies, shifts in customer behaviour, uncertainty of
market signals and increased raw material costs.

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M SAN GRUPA ANNUAL REPORT 2024. 168
Impacts, risks and opportunities management
ESRS 2 IRO-1
M SAN Grupa assessed climate-related impacts, risks and opportunities in this phase at the top (general) level.
By analysing the business lines, priority was put on identifying the most important physical and transition
climate-related risks for the core activities of M SAN Grupa and possible business opportunities.
The process of assessing physical and transition risks and opportunities included key managers and experts
in the organisation who reviewed the magnitude of the risk for individual production lines. Climate scenarios
analysis was not conducted in this assessment phase. A detailed risk assessment of climate-related physical
and transition risks will be done again in 2025. Upon completion of the thorough analysis of these risks to the
business model, an assessment of the business model’s resilience to climate change risks will also be conducted
ESRS 2 MDR-P
E1-2 Policies related to climate change mitigation and adaptation
M SAN Grupa will adopt policies related to climate change mitigation and adaptation after a detailed assessment
of climate risks. The Group is currently preparing an assessment of the climate change impacts on its business
operations and intends to conduct a through analysis before adopting formal policies. In line with business
priorities and regulatory requirements, the Group will review the development of respective policies in the
future.
ESRS 2 MDR-A
E1-3 Actions and resources in relation to climate change policies
At present, climate aspects are considered within the broader context of operational efficiency and sustainability,
but they are not formally defined as a separate initiative. Taking business priorities into account, M SAN Grupa
plans to gradually develop strategies and actions in line with regulatory requirements and industry practices.
ESRS 2 MDR-T
E1-4 Targets related to climate change mitigation and adaptation
As a detailed reassessment of climate impacts on business operations is currently being prepared, the Group
has not yet defined indicators or target values related to climate change. The year 2024 saw the commencement
of the data collection on Scope 1 and 2 GHG emissions for 2023 which is considered the baseline year. This
Report shows the values for Scope 1 and 2 GHG emissions for 2023; at the moment of the compilation of this
Report, the data for 2024 was still being collected and will be disclosed by 30 June 2025. Although objectives
have still not been formally defined, the Group is monitoring the parameters related to energy consumption. In
the upcoming period, we plan to develop key indicators and objectives aligned with the regulatory framework
and strategic priorities.
Metrics and targets

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M SAN GRUPA ANNUAL REPORT 2024. 169
E1-5 Energy consumption and mix
Activities of M SAN Grupa in high climate impact sectors
1 Sectors with high climate impact are referred to in sections A through H and section L of NACE (as defined in the Delegated Commission
Regulation (EU) 2022/1288)
2 REGULATION (EC) No 1893/2006 of the EUROPEAN PARLIAMENT AND COUNCIL of 20 December 2006 establishing the statistical classification
of economic activities NACE Revision 2 and amending Council Regulation (EEC) No 3037/90 as well as certain EC Regulations on specific statistical
domains (Annex I)
Section C - Manufacturing
26.20 Manufacture of computers and peripheral
equipment
26.40 Manufacture of consumer electronics
27.40 Manufacture of electric lighting equipment
30.92 Manufacture of bicycles and invalid carriages
Section E - Water supply, sewerage, waste
management
38.11 Collection of non-hazardous waste
Section H - Transportation and storage
49.41 Freight transport by road
52.10 Warehousing and storage
52.24 Cargo handling
Section N - Administrative and support services
82.92 Packaging activities
Section S - Other service activities
95.1 Repair of computers and communication
equipment
95.11 Repair of computers and peripheral equipment
95.12 Repair of communication equipment
95.2 Repair of personal and household goods
95.21 Repair of consumer electronics
95.22 Repair of household appliances and home and
garden equipment
95.29 Repair of other personal and household goods
Sectors with high climate impact according to

ESRS standards
1
and NACE classification
2
Other activities

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M SAN GRUPA ANNUAL REPORT 2024. 170
Sectors with high climate impact according to

ESRS standards
1
and NACE classification
2
Other activities
Energy within M SAN Grupa is used for the following purposes: heating and cooling of offices, warehouses and
other enclosed spaces, electricity for indoor and outdoor lighting, computers, machinery, air conditioning and
other uses and fuels for vehicles.
At the locations in Buzin and Rugvica, where the companies M SAN Grupa, M SAN Logistika, M SAN Eko d.o.o.,
Centar kompetencije za zelenu energiju d.o.o. and MR Servis are situated, energy consumption (electricity from
the electricity supplier, electricity from renewable sources and thermal energy) has been estimated based on
the proportion of the floor space occupied by each of the mentioned companies. Photovoltaic (PV) panels have
been installed and integrated within the Group at the locations of Buzin and Rugvica, generating electricity
on-site as renewable energy source.
Energy consumption per source in 2023
Energy consumption per source in 2023
1. Fuel consumption from coal and coal products 0 MWh
2. Fuel consumption from crude oil and petroleum products 6,750.04 MWh
3. Fuel consumption from natural gas 670.05 MWh
4. Fuel consumption from other fossil sources 0 MWh
5.
Consumption of the purchased or acquired electricity, heating energy,
steam and cooling energy from fossil sources
1,899.49 MWh
6.
TOTAL FOSSIL ENERGY CONSUMPTION
(CALCULATED AS THE SUM OF LINES 1-5)
9,319.58 MWh
Share of fossil sources in the total energy consumption 97.4 %
7 Consumption from nuclear sources 0 MWh
Share of consumption from nuclear sources in total energy consumption 0 %
8.
Fuel consumption from renewable sources, including biomass (also
comprising industrial and municipal waste of biologic origin, biogas,
renewable hydrogen, etc.)
0 MWh
9.
Consumption of purchased or acquired electricity, heat, steam and cooling
from renewable sources
0 MWh
10. Consumption of self-generated non-fuel renewable energy 245.63 MWh
11.
TOTAL RENEWABLE ENERGY CONSUMPTION (CALCULATED AS THE
SUM OF LINES 8-10)
245.63 MWh
Share of renewable sources in the total energy consumption 2.6 %
TOTAL ENERGY CONSUMPTION (CALCULATED AS THE SUM OF LINES 6
AND 11)
9,565.21 MWh

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M SAN GRUPA ANNUAL REPORT 2024. 171
Energy intensity based on net revenue of the Group for 2023, calculated as the as the ratio of total energy
consumption from activities in sectors with material climate impact to the net revenue generated from these
activities.
Energy intensity based on net revenue of the Group
Indicator Amount Unit
Energy intensity per net revenue
0.2028 MWh/EUR 1,000
Tot
al energy consumption from activities in high climate
impact sectors
9,565.21 MWh
Net revenue from activit
ies in high climate impact sectors used to
calculate energy intensity
471,672.00 MWh
Net revenue (other)
0.00 EUR 1,000
ESRS 1
E1-6 Gross Scope 1, 2 and 3 GHG emissions and total GHG emissions
In 2024, data for Scope 1 and 2 GHG emissions for 2023 was collected, which is from that point onwards
considered to be the baseline year. Not all data necessary for calculating Scope 1 and 2 emissions for 2024
were available when preparing this Report. The following steps are to collect the data and do the calculation
for 2024, as well as do preparatory activities for the analysis and calculation of Scope 3 emissions.
The data presented in Table 6 refer to the gross emissions of seven greenhouse gases: carbon dioxide (CO
2
),
methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride
(SF
6
) and nitrogen trifluoride (NF
3
), but are not limited to these gases.
The GHG emissions inventory includes all GHGs emitted across the M SAN Grupa’s value chain within its
organisational and operational boundaries, as presented in the following table.

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M SAN GRUPA ANNUAL REPORT 2024. 172
Indicator Amount Unit
Energetski intenzitet po neto prihodu 0.2028 MWh/EUR 1,000
Ukupna potrošnja energije iz djelatnosti u sektorima koji znatno utječu na
klimu
9,565.21 MWh
Neto prihodi od djelatnosti u sektorima koji znatno utječu na klimu
upotrijebljeni za izračun energetskog intenziteta
471,672.00 MWh
Neto prihodi (ostalo) 0.00 EUR 1,000
GHG emissions, consolidated, M SAN Grupa
GHG Sources Scope
Carbon dioxide (CO
2
)
Direct stationary sources: Combustion of natural gas and LPG for
building heating and diesel combustion in generators.
Direct mobile sources: combustion of diesel and petrol in vehicles.
1
Indirect emissions from electricity supply. 2
Methane (CH
4
)
Direct stationary sources: Combustion of natural gas and LPG for
building heating and diesel combustion in generators.
Direct mobile sources: combustion of diesel and petrol in vehicles.
1
Indirect emissions from electricity supply. 2
Nitrous oxide (N
2
O)
Direct stationary sources: Combustion of natural gas and LPG for
building heating, and diesel combustion in generators.
Direct mobile sources: combustion of diesel and petrol in vehicles.
1
Indirect emissions from electricity supply. 2
Hydrofluorocarbons (HFCs)
Direct fugitive emissions from stationary and mobile air conditioning
units due to the leakage of HFC gases: HFC-32, R-22, R-401A, R-407C,
R-410A, HFC-134a, R-1234yf
1

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M SAN GRUPA ANNUAL REPORT 2024. 173
Indicator
Reference
year 2023
2024
GHG emissions Scope 1
Gross Scope 1 GHG emissions (tCO2eq) 2,356.36 Data unavailable
Percentage of Scope 1 GHG emissions from regulated
emission trading schemes (%)
0 0
GHG emissions Scope 2
Location-based gross Scope 2 GHG emissions (tCO2eq) 1,223.22 Data unavailable
Market-based gross Scope 2 GHG emissions (tCO2eq) 1,714.24 Data unavailable
Significant scope 3 GHG emissions
Total gross indirect Scope 3 GHG emissions
(tCO2eq)
Data
unavailable
Data unavailable
Total GHG emissions
Total Scope 1 + 2 (location-based) gross GHG emissions
(tCO2eq)
3,579.57 Data unavailable
Total Scope 1 + 2 (market-based) gross GHG emissions
(tCO2eq)
4,070.60 Data unavailable
GHG emissions, consolidated, M SAN Grupa
GHG intensity per net revenue (2023) Value
Total net revenue of M SAN Grupa (EUR 1,000) 471,672.00
GHG intensity per net revenue (t CO2 eq./EUR 1,000) 0.00759
GHG intensity per net revenue
GHG intensity based on net revenue
The intensity of GHG emissions is shown as the ratio of the total gross GHG emissions to total net revenues of
the Group. The data in the table below pertains to 2023. The calculation for 2024 is under preparation.

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M SAN GRUPA ANNUAL REPORT 2024. 174

E1-8 Internal carbon pricing
M SAN Grupa does not apply an internal carbon pricing mechanism in its business processes, investments or
strategic decision-making.

E1-7 GHG removals and GHG mitigation projects financed through carbon credits
M SAN Grupa do
es not conduct or finance GHG removal projects, does not participate in programmes for
purchasing, selling or trading in carbon credits, and does not use carbon credits to offset GHG emissions.
M SAN Grupa primarily focuses on plans for direct emission reductions through operational measures and
efficiency improveme
nts rather than on compensatory mechanisms.

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M SAN GRUPA ANNUAL REPORT 2024. 175
Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment (Taxonomy
Regulation) establishes a system for classifying economic activities, which the European Union established to
enable a significant contribution to sustainability, while complying with the standards concerning human rights,
battle against corruption, fair market competition and tax transparency. Article 8 of the Taxonomy Regulation
provides for reporting obligation for undertakings covered by Non-Financial Reporting Directive (NFRD) (EU)
2014/95, which was replaced by Corporate Sustainability Reporting Directive (CSRD) (EU) 2022/2464, whose
provisions were transposed to the Accounting Act of the Republic of Croatia (Official Gazette of the Republic of
Croatia, Nos 85/2024 and 145/2024) and which are binding for M SAN Grupa.
Article 9 of the Taxonomy Regulation defines the following environmental objectives:
(a) climate change mitigation,
(b) climate change adaptation,
(c) the sustainable use and protection of water and marine resources,
(d) the transition to a circular economy,
(e) pollution prevention and control,
(f) the protection and restoration of biodiversity and ecosystems.
The reporting process under the Taxonomy Regulation requirements can be divided into the three principal steps:
• assessment of Taxonomy-eligible economic activities,
• detailed assessment of compliance of identified Taxonomy-eligible economic activities with the criteria for
environmentally sustainable economic activities set out in Article 3 of the Taxonomy Regulation. Technical
criteria are defined by delegated acts of the Taxonomy Regulation, and include criteria of significant
contribution to one or more environmental objectives, of not doing significant harm to other environmental
objectives (DNSH) and compliance with minimum social safeguards,
• calculation of key performance indicators (KPIs) for determining the degree of environmental sustainability of
required to be reported under Article 3 of the Taxonomy Regulation, which relate to the ratio of Taxonomy-
eligible and Taxonomy-aligned activities in turnover, capital expenditure (CapEx) and operational expenditure
(OpEx).
In compiling disclosures related to Regulation (EU) 2020/852 on the establishment of a framework to facilitate
sustainable investment, we have also reviewed provisions of the following delegated acts of the Taxonomy
Regulation:
• Commission Delegated Regulation (EU) 2021/2178 supplementing Regulation (EU) 2020/852 of the European
Parliament and of the Council by specifying the content and presentation of information concerning
environmentally sustainable economic activities of undertakings,
• Commission Delegated Regulation (EU) 2021/2139 supplementing Regulations (EU) 2020/852 of the European
Parliament and Council by establishing the technical screening criteria for determining the conditions under
which an economic activity qualifies as contributing substantially to climate change mitigation or climate
change adaptation and whether this economic activity causes significant harm to another environmental
objective,
• Commission Delegated Regulation (EU) 2022/1214 amending Delegated Regulation (EU) 2021/2139 as regards
economic activities in certain energy sectors and Delegated Regulation (EU) 2021/2178 as regards specific
public disclosures for those economic activities,
INFORMATION IN ACCORDANCE WITH ARTICLE 8 OF REGULATION
(EU) 2020/852

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M SAN GRUPA ANNUAL REPORT 2024. 176
• Commission Delegated Regulation (EU) 2023/2485 amending Delegated Regulation (EU) 2021/2139 establishing
additional technical screening criteria for determining the conditions under which certain economic activities
qualify as contributing substantially to climate change mitigation or climate change adaptation and for
determining whether those activities cause significant harm to any of the other environmental objectives,
• Commission Delegated Regulation (EU) 2023/2486 supplementing Regulation (EU) 2020/852 of the European
Parliament and of the Council by establishing the technical screening criteria for determining the conditions
under which an economic activity qualifies as contributing substantially to the sustainable use and protection
of water and marine resources, to the transition to a circular economy, to pollution prevention and control, or
to the protection and restoration of biodiversity and ecosystems and for determining whether that economic
activity causes significant harm to any of the other environmental objectives and amending Commission
Delegated Regulation (EU) 2021/2178 as regards specific public disclosures for those economic activities,
• Commission Delegated Regulation (EU) 2024/3215 on correcting certain language versions of Delegated
Regulation (EU) 2021/2139 supplementing Regulation (EU) 2020/852 of the European Parliament and of
the Council by establishing the technical screening criteria for determining the conditions under which an
economic activity qualifies as contributing substantially to climate change mitigation or climate change
adaptation and for determining whether that economic activity causes significant harm to any of the other
environmental objectives.
Article 1 of Delegated Regulation (EU) 2021/2178 supplementing Regulation (EU) 2020/852 of the European
Parliament and Council by specifying the content and presentation of information on environmentally
sustainable economic activities to be disclosed by undertakings as economic activity has been described in the
delegated acts. Accordingly, a Taxonomy-non-eligible economic activity means any activity that is not described
in the delegated acts. An analysis of potential Taxonomy-aligned economic activities of M SAN Grupa has been
conducted considering all delegated acts related to the Taxonomy Regulation.
The analysis has shown that M SAN Grupa generates turnover from the following Taxonomy-eligible economic
activities:
• 2.3 Collection and transport of non-hazardous and hazardous waste (CE),
• 3.5 Manufacture of energy efficiency equipment for buildings (CCM),
• 5.1 Repair, refurbishment and re-manufacturing (CE),
• 5.2 Sale of spare parts (CE),
• 6.6 Freight transport services by road (CCM).
Along with the activities whereby M SAN Grupa generates turnover, this Sustainability Report and disclosures
under the Taxonomy Regulation comprise the following activities, which have been recognised in the capital
expenditure (CapEx) and/or operational expenditure (OpEx) of M SAN Grupa in 2024:
• 6.5 Transport by motorbikes, passenger cars and light commercial vehicles (CCM),
• 7.7 Acquisition and ownership of buildings (CCM).
M SAN Grupa does not engage in, finance or is exposed to activities related to nuclear energy and gas.
Taxonomy-eligibility assessment

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M SAN GRUPA ANNUAL REPORT 2024. 177
2.3 Collection and transport of non-
hazardous and hazardous waste (CE)
Revenue is generated from the collection of electrical and electronic waste
from legal persons, which includes the collection and temporary storage
phase until sale, as well as from the separate collection and sale of waste
generated by the company's core business activity.
3.5 Manufacture of energy efficiency
equipment for buildings (CCM)
Manufacture of light sources classified in the two highest energy efficiency
classes in accordance with Regulation (EU) 2017/1369 and delegated acts
adopted pursuant to this Regulation.
5.1 Repair, refurbishment and re-
manufacturing (CE),
Providing repair services for computer components and peripherals, as well
as electronic devices used in households (e.g. audio and video equipment,
white and brown goods, small household appliances, etc.), as well as mobile
phones and e-mobility devices, to both natural and legal persons.
5.2 Sale of spare parts (CE)
Sale of spare parts necessary for the repair of mobile phones, computer
equipment and peripherals, as well as electronic devices used in households
and LED lights manufactured by the Grupe.
6.5 Transport by motorbikes, passenger
cars and light commercial vehicles
(CCM),
Use of passenger and light commercial vehicles under lease agreements.
6.6 Freight transport services by road
(CCM)
Use of commercial vehicles under lease agreements for the provision of
service of transporting goods to customers.
7.7 Acquisition and ownership of
buildings (CCM)
Use of office and warehouse premises under lease agreements.
Overview and description of M SAN Grupa’s Taxonomy-eligible activities in 2024
concerning turnover, capital expenditure (CapEx) and operational expenditure (OpEx)
Assessment of alignment with Regulation (EU) 2020/852
A Taxonomy-aligned economic activity is such an activity that meets the criteria referred to in Article 3 of the
Taxonomy Regulation, which relate to meeting all criteria for environmentally sustainable economic activities.
These criteria include the criteria of significant contribution to one environmental objective, not harming any
other environmental objectives (DNSH) and compliance with minimum social safeguards.
Taxonomy-eligible economic activities identified in the turnover of M SAN Grupa are not aligned with the criteria
for environmentally sustainable activities:
• 2.3 Collection and transport of non-hazardous and hazardous waste (CE),
The Group collects electrical and electronic waste, but its business processes are not aligned with the technical
screening criteria referred to in the Taxonomy Regulation.
• 3.5 Manufacture of energy efficiency equipment for buildings (CCM),
The Group manufactures light sources classified in the two highest energy efficiency classes in accordance with
Regulation (EU) 2017/1369 and delegated acts adopted pursuant to this Regulation. However, the manufacturing
processes are not aligned with the technical screening criteria referred to in the Taxonomy Regulation.
• 5.1 Repair, refurbishment and re-manufacturing (CE),
The Group provides repair services for computer components and peripherals, as well as electronic devices used
in households (e.g. audio and video equipment, white and brown goods, small household appliances, etc.), as
well as mobile phones and e-mobility devices, to both natural and legal persons. However, the manufacturing
processes are not aligned with the technical screening criteria referred to in the Taxonomy Regulation,

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M SAN GRUPA ANNUAL REPORT 2024. 178
• 5.2 Sale of spare parts (CE),
The Group sells spare parts necessary for the repair of mobile phones, computer equipment and peripherals, as
well as electronic devices used in households. However, the sales processes are not aligned with the technical
screening criteria referred to in the Taxonomy Regulation,
• 6.6 Freight transport services by road (CCM),
The Group uses commercial vehicles based on lease agreements to transport goods to customers; however, the
record of these vehicles and their characteristics have not been aligned with the technical screening criteria
referred to in the Taxonomy Regulation.
Taxonomy-eligible and Taxonomy-aligned activities of M SAN Grupa identified in capital expenditure (CapEx)
and/or operational expenditure (OpEx) are not aligned with criteria for environmentally sustainable activities:
• 6.5 Transport by motorbikes, passenger cars and light commercial vehicles (CCM),
The Group uses personal and light commercial vehicles based on lease agreements; however, the record of
these vehicles and their characteristics have not been aligned with the technical screening criteria referred to
in the Taxonomy Regulation,
• 7.7 Acquisition and ownership of buildings (CCM),
The Group uses office and warehouse space based on lease agreements; however, their management has not
been aligned with the technical screening criteria referred to in the Taxonomy Regulation.s processes are not
aligned with the technical screening criteria referred to in the Taxonomy Regulation.
Key performance indicators (KPIs) relating to turnover in 2024
For the purposes of disclosures related to the Taxonomy Regulation, to calculate the turnover KPI, the turnover
from sales has been used as the denominator pursuant to the definition of the turnover from sales referred to in
the consolidated financial statements (Note 5 in the attached audited consolidated financial statements).
The numerator includes turnover from sales generated from Taxonomy-eligible and Taxonomy-aligned economic
activities.
When calculating the turnover KPIs, care was taken not to do a double count by showing a significant contribution
of the same item for several environmental objectives for various M SAN Grupa’s companies, both relating to
capital expenditure (CapEx) and/or operational expenditure (OpEx).
Turnover (2024)
Turnover share / Absolute turnover
Taxonomy-aligned activities
per objective (%)
Taxonomy-eligible objectives
per objective (%)
Climate change mitigation (CCM)
0% 0.16%
Climate change adaptation (CCA)
0% 0%
The sustainable use and protection of water and
marine resources (WTR)
0% 0%
The transition to a circular economy (CE)
0% 1.73 %
Pollution prevention and control (PPC)
0% 0%
The protection and restoration of biodiversity
and ecosystems (BIO)
0% 0%

Graphics


G1 – POSLOVO ŠANJE SUBSTANTIAL CONTRIBUTION CRITERIA DNSH CRITERIA (DO NO SIGNIFICANT HARM)
Economic activities (1)
Turnover (3)
Proportion of turnover, 2023 (4)
Climate change mitigation (5)
Climate change adaptation (6)
Water and marine resources (7)
Pollution (8)
Circular economy (9)
Biodiversity and ecosystems (10)
Climate change mitigation (11)
Climate change adaptation (12)
Water and marine resources (13)
Pollution (14)
Circular economy (15)
Biodiversity and ecosystems (16)
Minimum safeguards (17)
"Share of turnover from taxonomy-aligned (A.1) or
acceptable (A.2) activities
year 2024 (18)"
"Share of turnover from taxonomy-aligned (A.1) or
acceptable (A.2) activities
year 2023 (19)"
Enabling Activity Category (20)
Transition Activity Category (21)
(EUR) % Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No % % E T
A. Taxonomy-Eligible Activities
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Turnover of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
0.00 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
2.3. Collection and transport of non-hazardous and
hazardous waste (CE)
89,494.78 0.02% 0.00% 0.00% 0.00% 0.02% 0.00% 0.00%
3.5. Manufacture of energy efficiency equipment for
buildings (CCM)
591,306.57 0.12% 0.12% 0.00% 0.00% 0.00% 0.00% 0.00%
5.1. Repair, refurbishment and remanufacturing (CE) 4,065,385.15 0.81% 0.00% 0.00% 0.00% 0.81% 0.00% 0.00%
5.2. Sale of spare parts (CE) 4,4 87.811.17 0.90% 0.00% 0.00% 0.00% 0.90% 0.00% 0.00%
6.6. Freight transport services by road (CCM) 210.273.89 0.04% 0.04% 0.00% 0.00% 0.00% 0.00% 0.00%
Turnover of Taxonomy-eligible but not
environmentally sustainable activities (not
Taxonomy-aligned activities) (A.2.)
9,444,271.55 1.89% 0.16% 0.00% 0.00% 1.73% 0.00% 0.00%
Total (A.1. + A.2.) 9,444,271.55 1.89% 0.16% 0.00% 0.00% 1.73% 0.00% 0.00%
B. Taxonomy-Non-Eligible Activities
Turnover of Taxonomy non-eligible activities (B) 490,733,735.45 98.11%
Total (A + B) 500,178,007.00 100.00%
Environmental objectives %
Climate change mitigation (CCM) 0,16%
Climate change adaptation (CCA) 0,00%
Sustainable use and protection of water and marine resources (WTR) 0,00%
Transition to circular economy (CE) 1,73%
Pollution prevention and control (PPC) 0,00%
Protection and restoration of biodiversity and ecosystems (BIO) 0,00%
Information in accordance with article 8 of Regulation (EU) 2020/852
Turnover
179

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M SAN GRUPA ANNUAL REPORT 2024. 180
For the calculation of the key performance indicator related to capital expenditure (CapEx KPI), the denominator
for the purposes of disclosures pursuant to the Taxonomy Regulation includes increases in tangible and intangible
assets during the financial year, before depreciation and re-measurements. The denominator also includes
increases in tangible and intangible assets resulting from business combinations, as presented in the consolidated
financial statements (Notes 17 and 19 of the attached audited consolidated financial statements).
The numerator is equal to the portion of capital expenditure included in the denominator that relates to capital
expenditure associated with Taxonomy-eligible and Taxonomy-aligned economic activities.
When calculating turnover KPIs, care was taken not to do a double count that may arise by showing a significant
contribution of the same item for several environmental objectives for various companies of M SAN Grupa, both
relating to capital expenditure (CapEx) and/or operational expenditure (OpEx).
Key performance indicators relating to capital expenditures (CapEx KPI) in 2024
M SAN Grupa has not adopted a capital expenditure (CapEx) plan aligned with the requirements of Delegated
Regulation (EU) 2021/2178 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council
by specifying the content and presentation of information concerning environmentally sustainable economic
activities to be disclosed by undertakings.
The capital expenditure (CapEx) plan as required by Commission Delegated Regulation
(EU) 2021/2178
Capital expenditure (2024)
Capital expenditure share / Absolute capital expenditure
Taxonomy-aligned activities
per objective (%)
Taxonomy-eligible objectives
per objective (%)
Climate change mitigation (CCM)
0% 47.41 %
Climate change adaptation (CCA)
0% 0%
The sustainable use and protection of water and
marine resources (WTR)
0% 0%
The transition to a circular economy (CE)
0% 0%
Pollution prevention and control (PPC)
0% 0%
The protection and restoration of biodiversity
and ecosystems (BIO)
0% 0%

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G1 – POSLOVO ŠANJE SUBSTANTIAL CONTRIBUTION CRITERIA DNSH CRITERIA (DO NO SIGNIFICANT HARM)
Economic activities (1)
Turnover (3)
Proportion of turnover, 2023 (4)
Climate change mitigation (5)
Climate change adaptation (6)
Water and marine resources (7)
Pollution (8)
Circular economy (9)
Biodiversity and ecosystems (10)
Climate change mitigation (11)
Climate change adaptation (12)
Water and marine resources (13)
Pollution (14)
Circular economy (15)
Biodiversity and ecosystems (16)
Minimum safeguards (17)
"Share of turnover from taxonomy-aligned (A.1) or
acceptable (A.2) activities
year 2024 (18)"
"Share of turnover from taxonomy-aligned (A.1) or
acceptable (A.2) activities
year 2023 (19)"
Enabling Activity Category (20)
Transition Activity Category (21)
(EUR) % Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No % % E T
A. Taxonomy-Eligible Activities
A.1. Environmentally sustainable activities (Taxonomy-aligned)
CapEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
0.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
6.6. Freight transport services by road (CCM) 295,900.00 15.27% 15.27% 0.00% 0.00% 0.00% 0.00% 0.00%
7.7. Acquisition and ownership of buildings (CCM) 622,877.15 32.14% 32.14% 0.00% 0.00% 0.00% 0.00% 0.00%
CapEx of Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned
activities) (A.2.)
918,777.15 47.41% 47.41% 0.00% 0.00% 0.00% 0.00% 0.00%
Total (A.1. + A.2.) 918,777.15 47.41% 47.41% 0.00% 0.00% 0.00% 0.00% 0.00%
B. Taxonomy-Non-Eligible Activities
CapEx of Taxonomy non-eligible activities (B) 1,019,130.71 52.59%
Total (A + B) 1,937,907.86 100.00%
Capital expenditure
Information in accordance with article 8 of Regulation (EU) 2020/852
181
Environmental objectives %
Climate change mitigation (CCM) 47,41%
Climate change adaptation (CCA) 0,00%
Sustainable use and protection of water and marine resources (WTR) 0,00%
Transition to circular economy (CE) 0,00%
Pollution prevention and control (PPC) 0,00%
Protection and restoration of biodiversity and ecosystems (BIO) 0,00%

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M SAN GRUPA ANNUAL REPORT 2024. 182
For the calculation of the key performance indicator related to operating expenditure (OpEx KPI), the denominator
includes direct non-capitalised costs relating to research and development, building renovation measures, short-
term leases, maintenance and repair, as well as all other direct expenditures relating to the day-to-day servicing
of property, plant and equipment carried out either by the undertaking itself or by a third party to whom these
activities are outsourced, and which are necessary to ensure the continued and effective functioning of such
assets (Notes 7 and 9 of the attached audited consolidated financial statements).
The numerator is equal to the portion of operational expenditure included in the denominator that relates to
operational expenditure associated with Taxonomy-eligible and Taxonomy-aligned activities. When calculating
operational expenditure (OpEx) KPIs, care was taken not to do a double count that may arise by showing a
significant contribution of the same item for several environmental objectives for various companies of M SAN
Grupa, both relating to turnover and/or capital expenditure (CapEx).
Key performance indicators relating to operational expenditures (OpEx KPI) in 2024
Operational expenditure (2024)
Operational expenditure share / Absolute operational
expenditure
Taxonomy-aligned activities
per objective (%)
Taxonomy-eligible objectives
per objective (%)
Climate change mitigation (CCM)
0% 14.9%
Climate change adaptation (CCA)
0% 0%
The sustainable use and protection of water and
marine resources (WTR)
0% 0%
The transition to a circular economy (CE)
0% 0%
Pollution prevention and control (PPC)
0% 0%
The protection and restoration of biodiversity
and ecosystems (BIO)
0% 0%

Graphics


G1 – POSLOVO ŠANJE SUBSTANTIAL CONTRIBUTION CRITERIA DNSH CRITERIA (DO NO SIGNIFICANT HARM)
Economic activities (1)
Turnover (3)
Proportion of turnover, 2023 (4)
Climate change mitigation (5)
Climate change adaptation (6)
Water and marine resources (7)
Pollution (8)
Circular economy (9)
Biodiversity and ecosystems (10)
Climate change mitigation (11)
Climate change adaptation (12)
Water and marine resources (13)
Pollution (14)
Circular economy (15)
Biodiversity and ecosystems (16)
Minimum safeguards (17)
"Share of turnover from taxonomy-aligned (A.1) or
acceptable (A.2) activities
year 2024 (18)"
"Share of turnover from taxonomy-aligned (A.1) or
acceptable (A.2) activities
year 2023 (19)"
Enabling Activity Category (20)
Transition Activity Category (21)
(EUR) % Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No % % E T
A. Taxonomy-Eligible Activities
A.1. Environmentally sustainable activities (Taxonomy-aligned)
OpEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
0.00 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
3.5. Manufacture of energy efficiency equipment for
buildings (CCM)
367,024.50 1.07% 1.07% 0.00% 0.00% 0.00% 0.00% 0.00%
"6.5. Transport by motorbikes, passenger cars and
light commercial
vehicles (CCM)"
886,834.39 2.58% 2.58% 0.00% 0.00% 0.00% 0.00% 0.00%
6.6. Freight transport services by road (CCM) 217,289.68 0.63% 0.63% 0.00% 0.00% 0.00% 0.00% 0.00%
7.7. Acquisition and ownership of buildings (CCM) 3.645,189.84 10.61% 10.61% 0.00% 0.00% 0.00% 0.00% 0.00%
OpEx of Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned
activities) (A.2.)
5,116,338.42 14.90% 14.90% 0.00% 0.00% 0.00% 0.00% 0.00%
Total (A.1. + A.2.) 5,116,338.42 14.90% 14.90% 0.00% 0.00% 0.00% 0.00% 0.00%
B. Taxonomy-Non-Eligible Activities
OpEx of Taxonomy non-eligible activities (B) 29,226,661.58 85.1%
Total (A + B) 34,343,000.00 100%
Operational expenditures
Environmental objectives %
Climate change mitigation (CCM) 14,90%
Climate change adaptation (CCA) 0,00%
Sustainable use and protection of water and marine resources (WTR) 0,00%
Transition to circular economy (CE) 0,00%
Pollution prevention and control (PPC) 0,00%
Protection and restoration of biodiversity and ecosystems (BIO) 0,00%
Information in accordance with article 8 of Regulation (EU) 2020/852
183

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M SAN GRUPA ANNUAL REPORT 2024. 184

ESRS E5: RESOURCE USE AND CIRCULAR ECONOMY
Given the nature of its business activities, M SAN Grupa recognises the importance of topics related to
resource use and the circular economy. Resource inflows and outflows in the production of electronic devices
are material and the objective of M SAN Grupa is to transparently present its business practice. M SAN Grupa
includes the company M SAN Eko, whose role is the collection of electrical and electronic waste. Apart from
this segment, M SAN Grupa has not yet established systematic processes for managing and monitoring data
related to resource inflows and outflows, or waste volumes. With the aim of aligning with ESRS requirements,
the Group will focus on developing systems for data management and monitoring. The objective is also to
develop measures for waste reduction and improving resource use efficiency. Efforts to improve practices
will include collaboration with suppliers and partners to optimise resource use across the entire value chain.
The M SAN Grupa’s goal is to become part of a sustainable business environment and to contribute to the
development of the circular economy in the region.

Disclosure requirements Information
ESRS 2 SBM-3
E5
Material impacts, risks and opportunities and their
interaction with strategy and business model
186
ESRS 2 IRO-1
E5
Description of the processes to identify and assess material
resource use and circular economy-related impacts, risks
and opportunities
186
ESRS E5-1 Policies related to resource use and circular economy 187
ESRS E5-2
Actions and resources related to resource use and circular
economy
188
ESRS E5-3 Targets related to resource use and circular economy 189
ESRS E5-4 Resource inflows 189
ESRS E5-5 Resource outflows 189
ESRS E5-6
Anticipated financial effects from resource use and circular
economy-related impacts, risks and opportunities
Use of phase-in option

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M SAN GRUPA ANNUAL REPORT 2024. 185
RESOURCE INFLOWS
Negative impact – actual; in the upstream value chain
Inflows and resource
use
M SAN procures large quantities of
materials, semi-finished products and
products that are neither recycled nor
recyclable.
Originating from the
business model and linked
to business relationships
Short-term to
long-term
RESOURCE OUTFLOWS
Negative impact – actual; in the downstream value chain
Resource outflows
related to products
and services
M SAN generates large quantities of waste.
Given the nature of its operations, the
quantities of packaging waste as well as
electrical and electronic waste generated
are material. The impact is linked to the
downstream business relationships.
Originating from the
business model and linked
to the downstream value
chain
Short-term to
long-term
WASTE
Positive impact – potential; in own operations and in the downstream value chain
Waste management
M SAN Grupa generates various types of
waste in line with the nature of its business
activities, while the affiliated company M
SAN EKO carries out waste management
operations by collecting hazardous and
non-hazardous electronic waste. The
e-waste collection service is made available
to all of the M SAN Grupa’s partners.
Originating from the
business model and linked
to the downstream value
chain
Long-term
Opportunity – in own operations
Waste collection and
disposal
A business opportunity is recognised in
building internal resources and securing
logistical capacities for waste collection and
disposal, which may contribute to increased
revenue (M SAN Eko’s operations).
Originating from the
business model
Short-term to
mid-term

ESRS 2 General disclosures
Material impacts, risks and opportunities

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M SAN GRUPA ANNUAL REPORT 2024. 186

Explanation of impacts, risks and opportunities
The production of electrical and electronic equipment and devices is highly intensive in terms of waste
management. Its impacts can be observed in ensuring the collection of electronic waste, as well as device
repair services. Ensuring the longest possible product lifespan can also represent an actual negative impact (if
lacking), and a potential positive impact, if managed appropriately. Consequently, this impact is linked to ESRS
S4 – particularly concerning consumer information and product safety. The identified risks relate to increased
costs associated with the collection and further management of electrical and electronic waste streams. These
are linked to regulatory measures that impact the supply chain, specifically the capacity of suppliers to whom
electrical and electronic waste is handed over for its further processing.
Risks within the scope of ESRS S4 – concerning information for the partner network, users or customers – may
affect customer awareness and their knowledge of the options for returning equipment and devices to M SAN
Grupa. There is also a risk related to M SAN Grupa’s competencies for receiving and further processing electrical
and electronic waste, as well as the operational complexity of the associated activities. Opportunities can be
identified in strengthening this segment, which may reflect in the development of internal resources (knowledge,
logistical capacities, development, investments, market research) as well as in potential revenue generation.
Negative impacts may arise from the inherent characteristics of products, if the highest efficiency standards
are not applied, as well as from non-compliance with energy efficiency requirements. Customer awareness of
energy efficiency puts pressure on equipment manufacturers, which can also represent an opportunity.
M SAN Grupa uses numerous materials in the production of electrical and electronic equipment as key resources
for finished products. This is particularly evident in the production of electronic equipment, electrical devices
and electric vehicles. Negative impacts are evident in the absence of policies related to the procurement of
materials, semi-finished products and products used.
M SAN Grupa may impact product design aligned with circular economy principles, i.e. increasing or fully
utilising the potential for product, material and waste stream recirculation. However, a systematic management
of such materials is lacking.
Impacts can be identified in ensuring the collection of electrical and electronic waste, as well as in providing
repair services for devices. Given that M SAN Eko, an undertaking within the M SAN Grupa, collects and manages
electrical and electronic waste, the impacts can be negative (in the case of system malfunction) or positive
(in the case of system improvement). Negative impacts may be reflected in insufficient capacities for waste
collection and disposal (in-house, downstream).
ESRS 2 IRO-1
Impacts, risks and opportunities management
As a result of changes and the implementation of substitute materials, e-waste is becoming increasingly
lighter due to the characteristics of products shaped by technological advancement and development. The
introduction of substitute materials, and notably the increased use of plastics, has led to a causal relationship
resulting in reduced mass. As a result, there are risks that are unpredictable and directly impact business
operations. Certain situations have material impacts on the overall business system, such as dependence on
the Environmental Protection and Energy Efficiency Fund, which manages specific categories of waste. At
the end of 2024, a new pricing list was introduced, which automatically affects the entire value chain. The
Fund disburses funds to the collector and processor, who determine the value of the waste handed over to
them through their purchase prices. The current system is a continuation of the former concession model,
pending the establishment of a different operational framework, which depends on the competent authorities
responsible for respective areas.
ESRS 2 SBM-3

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M SAN GRUPA ANNUAL REPORT 2024. 187
In the event of system stagnation and/or extraordinary circumstances, we are automatically put in an uncertain
position – facing waste accumulation, which entails financial risk due to potential penalties. The risk also
relates to a lack of understanding of the system, given the frequent occurrence of theft when waste is left
unattended, even for just a few moments. The dynamics of waste collection are influenced by unpredictable
situations such as traffic congestion, delays, accidents and similar events, which can prolong the collection
time and create opportunities for the theft of the collected waste.
ESRS 2 MDR-P
E5-1 Policies related to resource use and circular economy
M SAN Grupa does not have a unified and dedicated policy for management in the area of circular economy
and waste management. In managing this area, the Group is guided by laws and regulations and compliance
with statutory waste management obligations, while also continuously undertaking measures aimed at more
efficient resource use.
M SAN Grupa relies on applicable legislation and permits issued by the Ministry for carrying out activities
related to the management of non-hazardous and hazardous waste. The conduct of business operations,
performance of activities and waste management are subject to amendments of law and by-laws, as well
as to alignment with these laws and by-laws. M SAN Eko holds permits for carrying out waste management
activities. Permits for hazardous waste are issued by the competent ministry, while permits for non-hazardous
waste are issued by the respective county. Permits consist of an accompanying study, which provides a
detailed description of the technological processes in accordance with the relevant codes (for which the
permit is issued). Permits are issued for a period of five years and are subject to revision within the same time
interval. Each shipment of e-waste is accompanied by a consignment note (a legally required document) that
includes the key waste code, date, description, consignment note number and information about the sender
and recipient. When received, it is weighted and its weight is recorded. After the weight recording, M SAN Eko
certifies the consignment note, and one copy is provided to the sender as a proof of delivery. All other types of
waste generated, such as cardboard and paper, are also handed over via consignment notes, and records on
the generation and flow of waste are kept in accordance with regulations.
MR Servis, as part of the M SAN Grupa, holds the ISO 14001:2015 certificate.
At the SM group level (covering all companies with a common ultimate owner), the “reuse” option is
implemented, involving the repeated use of pallets, cardboard and all materials that can be reused. Cardboard
is shredded and used for packaging and/or repacking boxes; in this way, the Group pursues waste reduction
and adheres to environmental protection principles. Proper sorting and separation directly contribute to
increasing the collection rate of various types of waste that would otherwise end up in municipal waste. In
line with all of the above, continuous efforts are being made to reduce the volume of municipal waste. In
the undertaking’s yard, there is a “green island” with containers for different types of waste, where larger
quantities are disposed of daily in accordance with the business requirements of that day.
MR SERVIS is responsible for extending the product life cycle, which falls under the domain of waste prevention.
If, upon inspection, repairing a piece of equipment is found to be uneconomical and/or cost-ineffective, the
equipment is handed over as e-waste to M SAN EKO. M SAN EKO receives e-waste in accordance with the
waste codes specified in the obtained permits for carrying out waste management activities (both hazardous
and non-hazardous). The reverse logistics business model directly contributes to reducing CO2 emissions, fuel
consumption and optimising resource utilisation.
The Management Board is responsible for the implementation of policies and measures at the highest level.

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M SAN GRUPA ANNUAL REPORT 2024. 188
ESRS 2 MDR-A
E5-2 Actions and resources related to resource use and circular economy
Since 2009, M SAN Grupa has been operating in the field of e-waste collection through its subsidiary company M
SAN Eko. E-waste belongs to special categories of waste. In addition to being available to the business partners
of company M SAN Grupa, this service is also offered through the sister company eKupi (DTH – Delivery to
Home, collecting the old device upon delivering the new one). The purpose of M SAN Eko’s operations is to
enhance capabilities and support for business partners within the value chain by recognising market needs as
well as the principles of the circular economy. To provide support to the partner network, a portal has been
developed for submitting requests for the delivery and collection of containers and/or waste. The portal allows
users to view the total quantities they have handed over, define preferred times and select waste types in
accordance with the relevant waste codes.
Upon receipt of the partner’s request, a work order is automatically generated in the system and sent via email
to M SAN Logistika, which collects e-waste on a return route. Besides being available to the partner network
of M SAN Grupa, the collection service is also available to eKupi customers, who can choose to have their old
device collected when they purchase their new device.
All necessary actions are taken to comply with legal and regulatory obligations, one of which is the entry of
yearly quantities, both generated and collected, into the Environmental Pollution Register system. Additionally,
every change in status, i.e. the entry and/or exit of e-waste, is recorded using the prescribed consignment note
form and confirmed in the Eonto system. In addition to the aforementioned systems, the Imperios and Pandora
systems are also used. In accordance with the newly emerging types/categories of waste, actions are taken as
needed to place the greatest possible emphasis on waste reuse and reduction. Proper separation reduces the
volume of municipal waste, which represents a positive development, especially considering the number of
employees and other contributing factors. The waste collection yard is adapted to meet the requirements of
proper waste sorting.
In order to achieve the set objectives, the following actions are planned by 2027.
For the purpose of increasing the amount of collected WEEE (Waste Electronical and Electric Equipment):
- Enhancing communication about the activities of M SAN Eko among employees of all Group members, as
well as raising awareness (internally and externally) of the law and related by-laws, including cause-and-
effect relationships;
- Communicate the return option to end users via the Group’s customers, familiarise employees with the
activities of M SAN Eko, promote green business practices and the circular economy. Engage partners
who work directly with end users;
- Expand the energy efficiency and environmental compatibility of products and processes, and increase
awareness of producer responsibility.
For the purpose of implementing sustainable use of raw materials and packaging:
- Develop a roadmap for replacing packaging with recyclable alternatives and/or reducing the amount of
packaging used;
- Use of best available technologies with the aim of reducing environmental impact.

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M SAN GRUPA ANNUAL REPORT 2024. 189
ESRS 2 MDR-T
E5-3 Targets related to resource use and circular economy
In 2024, the Management Board of M SAN Grupa set two general objectives for circular economy management:
To increase the amount of collected WEEE, by category: hazardous waste and non-hazardous waste. Given that
EE equipment is becoming increasingly lighter, the share of the collected WEEE will be measured in relation to
the EE equipment placed on the market.
Implement sustainable use of raw materials and packaging (input materials, recyclable packaging, digitalisation,
reduction of paper consumption). By 2027, demonstrate progress in technological processes, i.e. by identifying
what can be replaced (recyclable materials/technologies and/or improvement of existing technology).
E5-4 Resource inflows
Although the topic of resource inflows has been recognised as material, it was not possible to establish an
effective system for collecting relevant information and data during the reporting period. M SAN Grupa will
make efforts to establish a data monitoring system by the end of 2026 and to report on the required data. The
Group does not have data on the description of inflows of significant resources, or on the mass of unprocessed
reused or recycled parts of semi-finished products and materials used in production (including packaging).
Metrics and targets
E5-5 Resource outflows
Although the topic of resource outflows has been recognised as material, it was impossible to establish an
effective system for collecting relevant information and data during the reporting period. The Group will make
efforts to establish a data monitoring system by the end of 2026 and to report on the required data. Product
packaging of the Group’s own brands features labels indicating proper waste separation and disposal.
Waste
M SAN Eko holds permits for carrying out waste management activities for hazardous and non-hazardous
categories of e-waste. Each permit includes an accompanying study as its integral part. The Environmental
Protection and Energy Efficiency Fund is responsible for fulfilling national targets and is the competent
authority for special categories of waste. M SAN Eko is registered with the Register of Carriers (PRV-1060) and
the Register of Brokers (POS-354), while the carrier M SAN Logistika is also registered with the Register of
Carriers (PRV-1364), with yearly status updates being carried out.
All offices are equipped with waste separation bins, and employees have the option to dispose of used batteries
in designated containers.
The table provides data on waste generated in 2024 and relates to the undertakings Kim Tec Eko d.o.o.,
Data Link d.o.o., M SAN Logistika d.o.o., M SAN Grupa d.o.o., M SAN Eko d.o.o. and MR Servis d.o.o. Data for
the rest of M SAN Grupa are unavailable. The data presented refer to categories for which it was possible to
collect information. Efforts will be made over the next two years to establish systematic monitoring of the
required data.

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M SAN GRUPA ANNUAL REPORT 2024. 190
WASTE QUANTITY (kg)
Total quantity of waste generated 463,719.00
Hazardous waste diverted from disposal
Hazardous waste diverted from disposal - preparation for reuse
Hazardous waste diverted from disposal - recycling 138,791.00
Hazardous waste diverted from disposal - other recovery operations*
Non-hazardous waste diverted from disposal
Non-hazardous waste diverted from disposal - preparation for reuse
Non-hazardous waste diverted from disposal - recycling 324,928.00
Non-hazardous waste diverted from disposal - other recovery operations
Hazardous waste that is disposed
Hazardous waste that is disposed of - incineration
Hazardous waste that is disposed of - landfill
Hazardous waste that is disposed of - other disposal operations 8.00
Non-hazardous waste that is disposed
Non-hazardous waste that is disposed of - incineration
Non-hazardous waste that is disposed of - landfill
Non-hazardous waste that is disposed of - other disposal operations 46,739.00
Non-recycled waste
Share of non-recycled waste
Total quantity of hazardous waste 138,791.00
Total quantity of radioactive waste

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A large business system such as M SAN Grupa directly impacts employee well-being across all areas of operation,
from secure employment, working hours and fair wages, to employee health and safety, work-life balance and
the facilitation of the freedom of association, social dialogue and workers’ right to information. Managing one’s
own workforce is becoming one of the key strategic challenges for undertakings operating in the electronic
and electrical products and equipment manufacturing industry, as well as in the development of advanced
energy efficiency systems, e-mobility and other sustainable solutions. High employee fluctuation, a shortage
of qualified labour, and a complex competitive landscape in the labour market in Croatia and the wider region
require a systematic and sustainable approach to recruitment, development and employee retention. The long-
term stability of business operations depends on the undertaking’s ability to attract, develop and motivate
employees in line with high standards of responsible human capital management.
Transparent recruitment practices, systematic investment in education and the adaptation of employees’
knowledge and skills to advanced technology products, as well as the promotion of diversity and inclusion,
are becoming key factors in building a resilient and productive working environment. In addition, responsible
management of wages and benefits contributes to reducing inequality and increases employee loyalty.
The sustainability of business operations largely depends on workforce engagement and satisfaction. The
implementation of ESG criteria in employee management processes not only strengthens the Group’s
reputation but also enhances its competitive advantage in the market. By integrating sustainability principles
into its workforce management strategy, the Group lays the foundation for its long-term resilience, innovation
and sustainable growth.
The index below shows the materiality-based disclosure requirements relating to the topical standard S1 -
Own workforce.
ESRS S1: OWN WORKFORCE

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M SAN GRUPA ANNUAL REPORT 2024. 192
Topic Description Page Comment
ESRS 2 SBM-2 Interests and views of stakeholders 200
ESRS 2 SBM-3
S1
Material impacts, risks and opportunities and
their interaction with strategy and business
model
195
The undertaking uses the option to
disclose only qualitative information
under ESRS2 SBM-3 para 48e
ESRS S1-1 Policies related to own workforce 197
ESRS S1-2
Processes for engaging with own workers and
workers’ representatives about impacts
201
ESRS S1-3
Processes to remediate negative impacts and
channels for own workers to raise concerns
202
ESRS S1-4
Taking action on material impacts on own
workforce, and approaches to mitigating
material risks and pursuing material
opportunities related to own workforce, and
effectiveness of these actions
203
ESRS S1-5
Targets related to managing material negative
impacts, enhancing positive impacts and
managing material risks and opportunities
207
ESRS S1-6 Characteristics of the undertaking’s employees 210
ESRS S1-7
Characteristics of non-employee workers in the
undertaking’s own workforce
--
The undertaking uses the option to
make a limited disclosure
ESRS S1-8
Collective bargaining coverage and social
dialogue
212
ESRS S1-9 Diversity metrics 213
ESRS S1-10 Adequate wages 213
ESRS S1-11 Social protection --
The undertaking uses the option
to postpone the disclosure of this
information
ESRS S1-12 Persons with disabilities --
The undertaking uses the option
to postpone the disclosure of this
information
ESRS S1-13 Training and skills development metrics --
The undertaking uses the option
to postpone the disclosure of these
information
ESRS S1-14 Health and safety metrics 213
ESRS S1-15 Work-life balance metrics --
The undertaking uses the option
to postpone the disclosure of this
information
ESRS S1-16
Compensation metrics (pay gap and total
compensation)
213
ESRS S1-17
Incidents, complaints and severe human rights
impacts
214

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M SAN GRUPA ANNUAL REPORT 2024. 193
WORKING CONDITIONS
Positive impact – actual; in own operations
Secure employment
Secure employment is evident from the
practice of concluding permanent employment
contracts. This contributes to income security for
employees, enabling decent living conditions
for workers. This positive impact applies to all
permanently employed workers.
Originating from the
business model
Mid-term to long-
term
Negative impacts – actual; in own operations
Inflexibility of
working conditions
The absence of options for hybrid work and
flexible working hours can have negative effects
on work-life balance.
Originating from the
business model
Short-term to mid-
term
Employee health and
safety
Potential delays in providing adequate training
to employees on occupational health and safety
(OHS) matters may negatively impact health and
safety outcomes at the workplace.
Originating from the
business model
Short-term to mid-
term
EQUAL TREATMENT AND OPPORTUNITIES FOR ALL
Positive impact – potential; in own operations
Organisational
openness to diversity
The organisation fosters a culture of diversity,
inclusion and equal opportunities, as well as
the integration of individuals from diverse
backgrounds.
Originating from the
business model
Mid-term to
long-term
Positive impact – actual; in own operations
A work environment
free from
discrimination
The organisation is committed to and
implements zero-tolerance policies against
discrimination, violence and harassment in the
workplace.
Originating from the
business model
Short-term to mid-
term
ESRS 2, SBM-3
S1
Material impacts, risks and opportunities and their interaction with business model
The table below shows material impacts to stakeholders that arise from the business activities of M SAN Grupa
as well as risks and opportunities pertaining to its own workforce.
ESRS 2 General disclousures

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M SAN GRUPA ANNUAL REPORT 2024. 194
RISKS AND OPPORTUNITIES RELATED TO OWN WORKFORCE
RISKS; in own operations
Workforce
fluctuation
A high risk of employee fluctuation can lead
to increased costs and impact the efficiency of
business processes.
Originating from the
business model
Short-term to
long-term
OPPORTUNITY; in own workforce
Employing interns
and foreign workers
Internship programmes and the employment
of foreign workers contribute to employee
diversity and the rejuvenation of the
organisation. The opportunity is actual, short-
term to long-term.
Originating from the
business model
Short-term to
long-term
WORKING CONDITIONS
Positive impact – actual; in own operations
Secure employment
Secure employment is evident from the
practice of concluding permanent employment
contracts. This contributes to income security for
employees, enabling decent living conditions
for workers. This positive impact applies to all
permanently employed workers.
Originating from the
business model
Mid-term to long-
term
Negative impacts – actual; in own operations
Inflexibility of
working conditions
The absence of options for hybrid work and
flexible working hours can have negative effects
on work-life balance.
Originating from the
business model
Short-term to mid-
term
Employee health and
safety
Potential delays in providing adequate training
to employees on occupational health and safety
(OHS) matters may negatively impact health and
safety outcomes at the workplace.
Originating from the
business model
Short-term to mid-
term

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ESRS 2, SBM-3
S1
Impact, risk and opportunity management
Workforce fluctuation poses a challenge to business stability, reduces productivity and increases recruitment
and training costs. Frequent employee departures hinder knowledge transfer, disrupt organisational culture
and prolong the execution time of key tasks. Additionally, the lack of qualified workers delays the filling of job
positions and the achievement of business objectives. The risk also encompasses challenges related to labour
market competitiveness, particularly in comparison to industries such as the IT sector, which offer attractive
working conditions and where highly educated and skilled employees can easily find employment. With
globalisation and digitalisation, the possibility of remote work is increasingly widespread, further heightening
the risk of losing qualified employees, as it opens up opportunities for them to work for employers in other
cities or even countries. This has a significant impact on the increased risk of high rates of voluntary (unwanted)
fluctuation, which is further exacerbated by the effects associated with inflexible working conditions within
the organisation.
To effectively address the fluctuation rate of 21.45% in 2024, M SAN Grupa has undertaken a series of strategic
actions, including the engagement of foreign workers in the warehouse and logistics sector, the introduction
of a documentation portal (Quality Management System – QMS) with work procedures, and the development
of an online training system (Learning Management System – LMS) to maintain productivity. Additionally, the
adjustment of the wage and benefits system is a response to employee needs and market conditions.
Since 2024, a reorganisation of the business has been underway, alongside the development of a system for
assessing employee performance and competencies. The QMS portal, featuring consolidated work instructions
and documentation, has been implemented, and the benefits package has been expanded, including additional
health insurance and co-financing of kindergarten costs, to reduce turnover and attract qualified personnel.
Investing in talent development and aligning competencies with business objectives enhances the Group’s
value chain. Further improvements to the benefits packages are planned to improve employee engagement
and satisfaction, thereby ensuring sustainable business growth through strategic workforce management. A
decrease in employee fluctuation is expected in 2025 and 2026.
Inflexibility of working conditions. The absence of a formally established hybrid work model or flexible
working hours contributes, among other matters, to a high employee fluctuation, which negatively affects
permanently employed staff, as they are often required to “cover” the workload until a new colleague is hired.
Additionally, new employees require onboarding and familiarisation with the work processes and procedures,
which places an additional burden on the existing staff. This impact is partly linked to the business model
and partly to market conditions. Within the Group, different operational needs across individual teams result
in variations in working hours. Organisational dynamics sometimes requires additional flexibility to support
specific business needs. We recognise the importance of aligning practices with applicable legislation and
believe that open dialogue and collaboration can support the harmonisation of these needs with regulatory
requirements.
Secure employment. Business stability and growth accompanied by a low rate of employer-initiated
fluctuation are indicators of secure employment for employees, as reflected in employee engagement survey
results, where secure employment is perceived as a positive aspect of working at the Group. This effect is
linked to the business model, which is characterised by a workplace culture that fosters a sense of job
security regardless of the current market fluctuations or economic and global crises. This impact applies to all
permanently employed workers across the region in which the Group operates, with particular focus on those
with potential for career advancement. There are no strategic guidelines or strategies in place that indicate
changes which could potentially have a long-term negative impact on this positive effect.

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Openness to diversity and the integration of individuals with different characteristics. The diversity
of professional backgrounds across the organisation, along with the interconnectedness of employees in all
Group companies, has a significant impact on knowledge sharing. The broad range of competencies enhances
the organisation’s overall capacity and its ability to adapt to changing market conditions and demands. The
impact applies to all employees within the Group and originates from the strategy that highlights respect for
diversity as one of the organisation’s core values. The impact is expected to be long-term, as there are no plans
to change the strategy or business model that could negatively affect it. It originates from a broad range of
activities involving the participation of employees from various M SAN Grupa’s undertakings across all countries
from the Group’s footprint in joint business activities, regular regional coordination meetings involving all
employees of a specific business unit from all undertakings, as well as regional events and initiatives aimed at
strengthening team cohesion. These activities have a positive impact on all Group employees.
Employee health and safety. High fluctuation can lead to delays in providing essential training to employees
in the area of occupational health and safety. This impact originates from the Group’s own business model and
applies to new employees. The negative impact can be mitigated by strengthening capacities and resources
for employee health and safety issues, as well as by engaging third parties in the training processes.
Employing foreign workers and interns presents an opportunity to address some of the aforementioned
negative impacts or business risks.

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ESRS 2 MDR-P
Working conditions, including collective bargaining
M SAN Grupa manages working conditions and processes in accordance with applicable legislation and its own
internal instruments governing labour-related matters. The main document that guarantees employee rights
and sets out their obligations is the Labour Regulations, which has been in effect since 1 July 2023 It lays down
provisions on the establishment and termination of employment, work organisation, wages, allowances and
other material rights of workers, working hours and the allocation of working time, the periods of rest and leave,
prohibition of competition, protection of life and health, occupational health and safety measures, protection
of workers’ dignity and measures against discrimination, among others. The Regulations on Organisation, the
Regulations on the Systematisation of Job Positions, the Job Positions Catalogue, the Personal Data Protection
Regulations, the Regulations on the Procedure for Internal Reporting of Irregularities and the Appointment of
a Confidential Person, and other documents also apply to working conditions.
S1- Policies related to own workforce
Human rights
The Code of Ethics adopted in 2023 sets forth respect for integrity and dignity and a zero-tolerance policy
towards any form of discrimination, mobbing and harassment. It also comprises respect for human rights and
a zero-tolerance policy on forced and child labour. Additionally, the Code of Ethics contains provisions on
expertise, responsibility and professionalism in business, trust and collegiality, teamwork and professional
communication.
M SAN Grupa is committed to protecting human rights in accordance with national and international laws and
regulations. The Group ensures fair and safe employee working conditions, complies with labour legislation
and ensures fair wages and benefits. The Group has included in its relevant internal documents, such as the
Labour Regulations, a prohibition of all forms of discrimination in accordance with the Labour Act, the Gender
Equality Act and the Anti-Discrimination Act. This includes prohibiting discrimination based on racial and ethnic
origin, race, gender, sexual orientation, gender identity, disability, age, religion, political opinion and social
background. The Management Board of M SAN Grupa is responsible for implementing the Code of Ethics.
M SAN Grupa has a zero-tolerance to forced and child labour, which has been clearly defined by internal policies.
There is no forced labour at the Group, and work is organised in compliance with all laws and regulations. There
are no reported incidents or risks concerning child labour. In employing foreign workers from third countries,
particular attention is paid to ethical employment and ensuring of workers’ rights. Human rights policies are
implemented indirectly through other policies regulating labour relations, equality and protection against
discrimination and harassment, and their full implementation is a continuous process. A further improvement
and education of employees about human rights is planned to be implemented via the LMS platform.
Employee health and safety
M SAN Grupa has occupational health and safety policies, including the Regulations on Occupational Health
and Safety, the Fire Safety Regulations and the Emergency Management Regulations. The document titled
Supplement to the Occupational Health and Safety Risk Assessment was adopted in November 2023.
To ensure high standards of workplace safety, M SAN Grupa continuously invests efforts in the training and
education of employees by occupational health and safety experts and authorised institutions.

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ESRS 1 AR 17
In its recruitment and promotion processes, M SAN Grupa takes into account only the results of the employee
selection process, their competencies, skills and previous work experience. The highest responsibility for
ensuring an equal treatment lies with the Management Board, the HR Department, and the line management,
who oversee recruitment and employee development and equal access to professional opportunities. Employee
progress is regularly monitored, and as of 2025, all data on training and development will be digitalised via the
LMS platform and the internal HRIS application. Employees have the possibility to raise their grievances safely
through a dedicated system, with each report being thoroughly investigated and appropriate actions taken.
The formal complaints procedure is defined by the Labour Regulations and is available 24/7 via the QMS portal.
M SAN Grupa continuously invests in employee development and plans to expand its training programmes
and introduce personalised development plans in 2025 and 2026. M SAN Grupa aims to establish a Diversity,
Inclusion and Equal Opportunities Policy by the end of 2025, along with a corresponding action plan for 2026.
The Group is currently partially adapting the physical work environment to persons with disabilities. All job
tasks are defined based on the required competencies, without discrimination, and the HR Department and
line management ensure that working conditions do not place specific groups at a disadvantage.
Employees who are not in an employment relationship with the Group but are significantly affected by the
Group’s operations are the employees our contractual partners in the European Union countries where the
Group does not have an affiliated undertaking. These external collaborators promote their own brand in their
respective countries and contribute to the expansion of our sales network. As a rule, M SAN Grupa does not
employ agency workers.
M SAN Grupa operates in an industry that occasionally requires increased workforce engagement, particularly
during seasonal peaks or in situations where temporary engagement through agencies is impossible due to a
lack of qualified workers in the market. In such cases, certain tasks must be completed within a short timeframe,
which sometimes necessitates the redistribution of working hours. During these periods, permanent employees
temporarily work longer hours to ensure the timely execution of key operations. This redistribution is carried
out in accordance with labour laws, but it may be perceived as a form of mandatory work.
In 2024, training sessions have been conducted two to three times per year due to the high employee
fluctuation rate. With the support of additional resources, efforts are being made to accelerate this process,
with the goal of conducting future training every two months. Periodic medical checkups for jobs with special
working conditions are carried out regularly, and the introduction of vision tests for employees working with
computers is also planned. To improve its safety practices, the Group has begun developing new evacuation
and rescue plans and it will organise training of personnel responsible for their implementation. The aim is
to continuously improve the occupational health and safety system. With the new resources invested and
processes enhanced, a higher level of employee health and safety protection will be achieved.
The Group provides medical check-ups and adjusts working conditions to protect employees’ health. Within
M SAN Grupa in the Republic of Croatia, all employees are covered by supplementary health insurance and
receive regular medical check-ups. Through the Flexi Benefits programme, employees can also choose
additional check-ups. In the Republic of North Macedonia and the Republic of Serbia, employees undergo
regular medical check-ups.
M SAN Grupa is continuously improving its occupational health and safety system, and further digitalisation
of the training through the LMS platform is planned for 2025 and 2026. This will enhance the organisation’s
capacity to conduct regular occupational health and safety training, rather than doing it occasionally.

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M SAN Grupa explicitly prohibits child labour, as clearly defined in its internal documents. Its operations are
organised in accordance with national and international laws, and all departments are organised for adult
employees only. Regular internal audits are conducted to ensure that child labour is not present within the
M SAN Grupa’s own operations or in its business relationships with third parties. The Group has not had any
reported incidents or identified risks of child labour.
Working environment and climate change
M SAN Grupa recognises the importance of reducing negative environmental impacts. Significant impacts on its
own workforce resulting from the plans to reduce environmental harm and achieve greener and more climate-
neutral operations include, among other things, an increase in the number of employees dedicated to tasks
directly related to market expansion in the field of solar power plant construction, primarily for business entities
and tourist facilities, but indirectly also for private individuals through our business partners. Additionally, the
number of employees engaged in the production of LED lighting systems and fixtures for industrial and public
use is also increasing. Significant investments in R&D projects aimed at improving the efficiency of LED lighting
products and system solutions indirectly affect production processes and contribute to the acquisition of new
competencies and knowledge among employees involved in these business activities. At the end of 2024, the
Group also decided to make significant investments in expanding its branch network across the European
Union, focusing on developing its e-mobility products market (e-scooters and e-bikes). This has a positive
impact on reducing environmental harm and advancing greener, more climate-neutral operations.
Furthermore, the Group encourages collective employee commuting (to and from work) in order to optimise
travel distances and reduce CO2 emissions. In line with internal policies, business trips, meetings, conferences
and similar events are always organised using the minimum number of vehicles, regardless of whether
employees have access to an assigned company vehicle for solo travel. In line with internal policies, business
trips, meetings, conferences and similar events are always organised using the minimum number of vehicles,
regardless of whether employees have access to an assigned company vehicle for solo travel.
Internal policies on the rational use of resources, such as paper recycling and water conservation, also contribute
to more responsible business practices and increased ecological awareness among employees.
Through the implementation of green initiatives and planned changes, the Group will enhance operational
processes, raise environmental awareness, and foster a more sustainable environment, thereby reducing its
carbon footprint and demonstrating accountability towards the community and future generations.

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ESRS 2, SBM-2
Interests and views of stakeholders
The interests and views of employees are taken into account in the matters of work optimisation, communication
improvement, leadership and employee organisation, workplace challenges and the identification of required
competencies and development measures. The primary tool for gathering employee views is the annual WTW
survey, which was conducted at the beginning of 2024 and is planned again in 2025. Additionally, employees’
views are collected via group meetings and individual talks.
Through engagement and communication with employees at all organisational levels, the Group gains a better
insight into employee needs. It can thus influence their motivation, engagement and productivity and identify
and develop th
eir competencies, particularly in terms of their career advancement and development.
Additionally, this enables a better understanding of the reasons behind employee fluctuation and allows for
an effective management of fluctuation-related risks. Business operations are improved by implementing
employee ideas related to task automation and optimisation. Decision-making is enhanced through a
timely and effective identification, resolution and prevention of potential issues. Based on the collected
facts and employee views, better interpersonal relations are fostered, reducing the risk of occurrence of
stressful situations.
Timely notification of administration bodies enables effective decision-making to address the current issues
and prevent negative impacts on business operations. Administration bodies are informed of employee views
and interests both verbally and in writing (via email communication), and these are also presented at meetings
of the Management Board and the Supervisory Board, based on structured organisational surveys (such as the
WTW Engage engagement survey and occasional pulse-check surveys). There is no predefined yearly reporting
schedule, which allows for prompt and effective decision-making aimed at resolving immediate issues and
preventing further negative effects on operations.

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S1-2 Processes for engaging with own workforce and workers’ representatives
about impacts
M SAN Grupa takes into account the perspectives of its own employees in the decision-making process,
especially with regard to business optimisation and the improvement of working conditions. The primary
means of implementing inclusiveness relates to regular engagement surveys in which all employees participate.
Reports are prepared about the of these surveys, including direct suggestions for improvements, which the
Management Board takes into consideration when making operational and strategic decisions. Engaging with
employees takes place directly, through written (email) communication, in meetings, individual conversations
and via occasional surveys. The Management Board reviews the received proposals during meetings and
assesses their impact on business operations, as well as their financial and operational feasibility.
Feedback is collected through annual surveys (WTW), verbal conversations with line managers and other
managers and email suggestions. Collaboration is ongoing at the level of the entire Group. Strategic decisions
are made centrally, while operational aspects are adapted to the specificities of individual sectors. Information
about decisions is delivered to employees through the corporate intranet, via email and in meetings. Formal
decisions, i.e. procedures, work instructions, and other documentation, are available to all employees through
the QMS. Responsibility for ensuring engaging with employees and its impact on decision-making lies with the
following organisational units:
- The HR team, who is responsible for implementing strategies and collecting employee data.
- The Management Board, which makes key strategic decisions.
- Line management, which implements operational changes.
Training of individuals in managerial positions has been ongoing since 2024, including all management levels.
During 2025 and 2026, it will be extended to all employees through the LMS platform.
Currently, there are no formal measuring instruments for assessing the effectiveness of engagement with the
internal workforce.
M SAN Grupa provides direct and indirect support to particularly vulnerable groups, especially in situations
that pose danger to the health or life of individuals. Support may take the form of material assistance during
long-term sick leave, counselling or guidance in life-critical events, and the organisation of assistance with
relevant institutions (clinics, private practices, professional counsellors, government services, and the like).

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S1-3 Processes to remediate negative impacts and channels for own workers to
raise concerns
Employee complaints are primarily resolved through individual conversations with the HR team, line managers,
or through written reports to the Group in cases of reporting mobbing, discrimination, or harassment,
as described in the Labour Regulations. Employee feedback on this approach is positive, as they have the
opportunity to present the problem in detail and participate in its resolution. In the case of a written report by
an employee, the Group is also obliged to formally communicate the resolution of the complaint/report to the
employee in writing.
In order to provide employees with the easiest possible access to the channels for expressing concerns, the
Group provides:
- The “Red Box” on the corporate intranet (clearly marked on the intranet homepage), through which
employees can send any questions or express any concerns fully anonymously; and in case of any doubts
regarding anonymity, a dedicated email address, anonimna.pitanja@msan.hr, is also provided, to which
such inquiries can be sent privately from a temporary email address;
- Physical and digital reports (email, meetings);
- Open communication with HR, which is available to all employees;
- Formal reports as described in the Labour Regulations (which are available to all employees at all times
through the QMS portal);
At M SAN Grupa, a Person Responsible for the Protection of Dignity has been formally appointed. This person
receives written reports (mobbing, harassment, discrimination, etc.), initiates the process of establishing
the circumstances. Also, this person proposes measures to be taken in cooperation with HR, Legal, and,
where possible, the respective line manager of the employee who submitted the report. The Management
Board decides on the proposal, and written feedback is provided to the reporting employee. No incidents
of discrimination or other serious violations of labour rights were identified in 2024. A court proceeding is
ongoing before a court in Montenegro following a lawsuit for mobbing, which has not been concluded by a
final judgment.
Although M SAN Grupa does not have explicitly defined and prescribed mechanisms for protection against
retaliation, it implements a zero-tolerance policy on discrimination and retaliation. To date, there have been no
reported incidents requiring a special protection procedure.

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ESRS 2 MDR-A
In 2024, M SAN Grupa launched a series of strategic initiatives aimed at reducing employee fluctuation,
improving working conditions, and increasing workforce engagement and satisfaction. Key measures, which
will continue in 2025 and 2026, include:
Actions for preventing, mitigating and remedying negative impacts on the workforce
• Reduction of fluctuation through continuous investment in the professional and personal
development of employees via training programmes that began in 2024 and will continue in 2025
and 2026.
• Increasing employee satisfaction by expanding the benefits package focused on health and
family well-being, and introducing a flexible model in which employees choose the benefits that
suit them best.
• Access to sports and recreational facilities through the Multisport/PassSport cards, including
swimming pools, as well as discounts in restaurants and shops.
• Implementation of a dynamic pay model, to be introduced at the end of 2024, with a full
implementation during 2025 and early 2026.
Actions for achieving positive impacts on the workforce
• Talent development and career advancement through educational programmes launched in
2024, with a further expansion of the LMS platform content, enabling 24/7 training and systematic
monitoring of employee development.
• Digitalisation and improved organisation of business processes through the KPM platform,
which optimises the HRM process management and enhances efficiency.
Key risks
• Lack of a qualified workforce, as the Group focuses on the development of proprietary brands in
a specific segment, and employing workforce from other EU countries is financially more demanding.
• High competitiveness of other sectors, which can attract and retain educated and skilled
employees.
• Openness of the EU market, which can also draw away talented employees
• Inflation and rising operating costs, which negatively affect employees’ purchasing power and
the Group’s financial stability.
Opportunities the undertaking tries to capitalise on
• Attracting and retaining talent through competitive wages, its development and advancement
system, and an expanded benefits package.
• Increasing employee engagement, which contributes to higher productivity and work quality.
• Modernisation and digitalisation of employee management, ensuring better connectivity,
transparency, and efficiency of business processes.
• Openness of the EU market as an opportunity for more competitive business operations and for
employing foreign labour in areas with a shortage of locally available experts.
S1-4 Taking action on material impacts on own workforce, and approaches to
mitigating material risks and pursuing material opportunities related to own
workforce, and effectiveness of those actions

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Resources allocated for the implementation of actions
• Investments in education and talent development through the LMS platform, individual and
group training programmes.
• Development and implementation of the KPM and LMS digital platforms for monitoring
employee progress and optimising work processes.
• Increase in the salary budget and expansion of benefits, providing employees with greater
financial stability and improved working conditions.
Initiatives to strengthen the undertaking’s opportunities
In 2024, M SAN Grupa launched a series of initiatives aimed at seizing opportunities related to the
development, engagement and productivity of its own workforce. These opportunities will be further
developed and expanded throughout 2025 and 2026. Key actions include:
- Development of training programmes through the LMS platform
- Development of an internal academy with in-house trainers for key operational processes
- Introduction of the KPM system to increase efficiency and digitalise HRM processes
- Enhancing the system of benefits and perks for employee
- Development of internal mentoring and knowledge transfer system
- Increase in employee engagement and satisfaction
- Strengthening employer branding and attracting talent
- Investment in the green transition and employment opportunities through sustainable practices
M SAN Grupa continuously adapts its business practices to ensure that it does not cause or contribute to
material negative impacts on its own workforce.
Transparent organisational structure and continuous improvements in job systematisationa
- In 2024, work began on a new business organisation and the introduction of a series of improvements
in the job systematisation
Employee training and development
- In 2025, employees will be given the opportunity for individual training and skills development in
accordance with the requirements of their job positions.
- The introduction of a mentoring model is planned, in which experienced colleagues will transfer
their knowledge to less experienced colleague.
Management of risks related to business pressures
- The Management Board ensures that business pressures, such as cost constraints, do not result in
negative consequences for employees.
- All changes in work organisation are implemented in consultation with the HR Department,
supervisors and employees, in order to ensure timely identification and minimisation of risks.
- zaposlenicima, kako bi se rizici pravovremeno identificirali i minimizirali.
Transparency and communication
- All employees are regularly informed about changes through corporate intranet pages (as of the
second half of 2024), emails and meetings with their line managers.
- In 2024, the Group conducted the WTW engagement survey, which serves as a key tool for
identifying potential issues. The next survey is planned for 2025.
ESRS 2 MDR-A
S1-4

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M SAN GRUPA ANNUAL REPORT 2024. 205
Change management in line with ESG objectives
- In 2024, the Group launched training on sustainability and resource optimisation.
- All operational changes are implemented with the aim of reducing environmental impact while
ensuring maximum protection of employees through adapted working conditions.
M SAN Grupa continues to develop its processes to further ensure that none of its business practices result
in adverse impacts on employees.
M SAN Grupa employs a multi-phase approach to identify and determine the necessary measures in
response to actual or potential adverse impacts on the workforce. This process includes:
1. Through the analysis of employee feedback – via WTW annual surveys, individual interviews, quarterly/
annual evaluations introduced as of 2025, and meetings with management – we collect employee
opinions on the existing challenges and potential improvements.
2. Monitoring of key performance indicators (KPIs) – includes fluctuation rates, employee engagement,
productivity, and the number of reported issues related to working conditions and organisational
culture.
3. Management and HR meetings – the HR team, the Management Board and Heads of Sectors analyse
the collected data and define specific measures needed to mitigate negative impacts.
4. Benchmarking and alignment with market practices – by monitoring market trends in the sector and
benchmarking against other companies, we ensure that the measures taken are in line with best
practices.
5. Piloting and testing of new measures – prior to a full implementation of new initiatives (e.g. the LMS
platform, variable pay component), they will be tested on selected teams to assess their effectiveness.
6. Performance monitoring and iterative improvement – following their implementation, measures will
be evaluated through internal analyses, employee feedback and financial indicators to ensure their
effectiveness and timely adjustment.
By combining these steps, it is ensured that the actions taken are based on concrete data and actual
employee needs, thereby reducing negative impacts and increasing workforce satisfaction.
The main risks in 2024 remained the same as in the previous reporting period: the threat of workforce loss;
shortage of qualified labour; and competitiveness of the labour market.
However, a downward trend in these risks is expected due to the launched strategic initiatives, such as:
- Systematic assessment of employee engagement, with the first WTW survey conducted at the
beginning of 2024.
- Launch of structured educational programmes focusing on employee development and their
competencies.
- Strengthening HR competencies and capabilities.
- Implementation of key tools and systems (QMS, LMS and KPM tools, Performance Management
System), whose rollout began in 2024 and continues to be improved and expanded.
In 2025 and 2026, full implementation of these initiatives is expected, along with the launch of new processes
to further reduce risks and increase the Group’s competitiveness in the labour market.

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In 2024, a formalised system for monitoring the effectiveness of the actions taken was not in place, but its
establishment is planned for 2025 and 2026 through:
- Systematic collection of employee feedback through WTW surveys (annual survey from 2024 + pulse
check at the beginning of 2025 and ongoing in the following years).
- Introduction of annual employee interviews to continuously monitor employee needs and satisfaction.
- Monitoring of data through the KPM platform, which will enable improved analytic in the areas of
recruitment, employee development and performance appraisal systems.
- Ben
chmarking of results with the aim of measuring performance in comparison with the previous year.
Allocated resources
For 2024, 2025 and 2026, M SAN Grupa has allocated significant resources to the management of material
impacts, particularly in the areas of employee retention, talent development, improvement of working
conditions and process digitalisation. The allocated resources include:
1. Financial resources (adjustment of salaries and expansion of the additional benefits model)
2. Employee education and development (investments in training and upskilling, implementation of the
LMS platform, development of educational materials; launch of the internal academy)
3. Improvement of recruitment processes and internal operations (introduction of the KPM platform,
digitalisation of candidate tracking and selection processes, enhancement of the employee feedback
monitoring system)
4. Actions aimed at long-term sustainability (adjustments to business organisation and job classification;
improvement of working conditions and reduction of fluctuation).

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M SAN GRUPA ANNUAL REPORT 2024. 207
ESRS 2 MDR-T
M SAN Grupa defined target values based on the monitoring of HR records, HR reports, results of the 2024
WTW survey, individual interviews with employees, and meetings between the Human Resources
Department and management. The objectives also support the most significant impacts, risks and
opportunities and are set out in the Management Board resolution on ESG objectives.
The following are M SAN Grupa’s general objectives related to the improvement of the working environment,
with a target completion date by the end of 2026.
Objective: Attraction and development of employees (linked to the risk of fluctuation) and building
a culture of excellence
Key performance indicators:
- Reduce the turnover rate to 20%
- Employee Net Promoter Score (NPS) – 5% increase in the share of “promoters” within the NPS
- (KPI = 26% over a three-year period)
- Building a culture of excellence
- >50% of employees (in the commercial and corporate business area) with an individual development
plan
- Greater employee engagement (compared to the 2024 result) – target: 78 Sustainable Engagement
Score
- 100% of evaluated employees (all employees with personal objectives must receive assessments from
their line manager).
Actions for achieving this objective:
- Attraction of talent in line with the business development plan
- Alignment of the onboarding process
- Identification of talents and key performers, their career paths, mapping of exit risks, potential
successors for managerial / leadership positions and expert / key positions
- Development of a career development management model
- Introduction of a performance management system at Group level
- Development of a policy and definition of a methodology for talent retention
- Development of a reward policy
Objective: Occupational health and safety
- Protection of the health for all employees and creating a safer working environment
- Keeping the occupational health and safety (OHS) system up to date
- Upgrading the occupational health and safety (OHS) system to a higher level
The key performance indicator for this area is a reduction in the number of workplace accidents and injuries,
as well as an increase in employees’ sense of safety.
S1-5 Targets related to managing material negative impacts, advancing positive
impacts, and managing material risks and opportunities

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M SAN GRUPA ANNUAL REPORT 2024. 208
Actions for achieving this objective:
- Enhancing employee awareness of their personal responsibility for health and safety
- Continuous training, professional development and education of employees on occupational health
and safety (OHS)
- Regular monitoring of laws and regulations
- Continuous implementation of periodic medical check-ups
- Integration of OHS into employee onboarding
- More frequent updating of risk assessments
- More frequent evacuation drills
Financial effects and resilience of the strategy
The most material financial impact in 2024 was due to increased costs arising from comprehensive growth in
operating expenses related to employee costs, as well as intensified expansion of business activities and
workforce in markets beyond the countries where M SAN Grupa previously operated. Additionally, following
the introduction of new logistics models in delivery and transportation, the number of employees involved in
logistics processes is increasing, which will further contribute to rising employee-related costs. These
investments are planned as a strategic step towards long-term business improvement and strengthening the
Group’s competitiveness in the labour market. To date, the expected financial impacts of significant risks and
opportunities have not been assessed; however, this assessment is planned for future periods.
M SAN Grupa continuously adapts its business model and strategy to address risks and capitalise on
opportunities. Key adjustments include enhancing employer attractiveness, securing intellectual capital
through 24/7 access to documents and procedures, and expanding operations into new markets both within
and outside the EU. Additionally, logistics optimisation is being carried out through the introduction of a
capillary distribution model via regional hubs. As part of the digitalisation process, a new intranet portal has
been developed, and the implementation of LMS, QMS and KPM platforms is underway to enhance planning,
training, and internal communication. Given the Group’s geographical dispersion, these innovations enable
improved collaboration and professional development of employees, regardless of their location. These actions
have increased productivity, modernised operations and facilitated talent attraction. The HR team now able to
present the benefits of working within the Group more clearly, which improves recruitment and reduces
fluctuation. The adaptable and proactive strategy has proven resilient to global challenges, particularly in the
context of market changes and digitalisation.
M SAN Grupa has conducted a qualitative analysis of the resilience of its strategy and business model, taking
into account key matters such as employee fluctuation, labour market competitiveness, and the impact of
digitalisation on its workforce. The analysis was conducted through an internal assessment of key risks and
opportunities, based on brainstorming sessions and in-depth discussions with the Management Board and
Heads of all Divisions and Sectors.
The HR team, based on the input received, has developed new strategies and activities.
As a result, significant changes have occurred compared to the previous reporting period. Key changes include:
- S
alary increases and changes in the calculation of the variable component based on employee
performance.
- The implementation of various digital platforms to optimise operations, plan training, and improve
communication.
- Strengthening the talent attraction strategy through better working conditions and opportunities for
professional development.
- Increase in operating cos
ts due to adjustments in the salary system and investments in digitalisation.
ESRS 2

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M SAN GRUPA ANNUAL REPORT 2024. 209
These changes are the result of a strategic business adjustment aimed at increasing the Group’s resilience and
long-term growth.
This area carries certain risks, including employee turnover, competition from other industries and markets,
and the rise in labour costs due to inflation and the introduction of the euro. At the same time, opportunities
have been recognised – digitalisation of HR processes through LMS and KPM platforms contributes to work
optimisation and the professional development of employees. Talent attraction is encouraged through
improved working conditions, training, and new motivation systems, while investments in external
communication strengthen the Group’s reputation in the labour market.
Additional Group-specific information not covered by ESRS pertains to internal digitalisation processes, plans
for expansion into other markets, planned changes in operational business models in logistics, and specific
measures for attracting and retaining employees.

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M SAN GRUPA ANNUAL REPORT 2024. 210
S1-6 Characteristics of the undertaking’s employees
M SAN Grupa includes 17 active undertakings, of which six operate in the Republic of Croatia, three in Bosnia
and Herzegovina, two in Serbia, Slovenia and North Macedonia, and one in Montenegro and Kosovo.
Table 1
Gender Headcount
Men 739
Women 254
Other 0
Not reported 0
Total headcount (ESRS 2 SBM 1, para 40a iii) 993
The headcount numbers shown in Table 1 and Table 2 correspond to the official headcount numbers used in
the financial statements of M SAN Grupa for 2024. These data include all permanently employed persons. The
data refers to the status as at 31 December 2024.
Table 2
Country Headcount
Republic of Croatia 540
Bosnia and Herzegovina 129
Republic of Serbia 160
Republic of Slovenia 24
Republic of North Macedonia 76
Republic of Montenegro 33
Republic of Kosovo 31

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M SAN GRUPA ANNUAL REPORT 2024. 211
Employees per contract type, broken down per gender, for the entire M SAN Grupa
Table 3
Reporting period
WOMEN
MEN
OTHER
NOT REPORTED
TOTAL
Headcount (number/FTE) 254 739 0 0
993
Full-time employees (number/FTE) 228 645 0 0 873
Part-time employees (number/FTE)
28 92 0 0 120
Number of non-guaranteed hours employees
(headcount/FTE)
0 0 0 0
0
Number of full-time employees (headcount/FTE)
251 727 0 0 978
Number of part-time employees (headcount/
FTE)
3 12 0 0
15

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M SAN GRUPA ANNUAL REPORT 2024. 212
Table 4
Reporting period
CROATIA
BOSNIA AND
HERZEGOVINA
SERBIA
NORTH
MACEDONIA
MONTENEGRO
SLOVENIA
KOSOVO
TOTAL
Headcount (number/FTE)
540 129 160 76 33 24 31 993
Full-time employees (number/FTE)
498 113 143 51 23 24 21 873
Part-time employees (number/FTE)
42 16 17 25 10 0 10 120
Number of non-guaranteed hours employees (headcount/FTE)
0 0 0 0 0 0 0 0
Number of full-time employees (headcount/FTE)
530 129 160 75 33 24 26 977
Number of part-time employees (headcount/FTE)
10 0 0 1 0 0 5 16
In 2024, a total of 213 employees left M SAN Grupa (excluding transfers to other affiliated companies and
contract expirations). The annual fluctuation rate was 21.45% across the entire Group. The data refers to the
entire M SAN Grupa, excluding the companies Data Link, Alterna, and AskTec.
S1-8 Collective bargaining coverage and social dialogue
M SAN Grupa nema potpisan kolektivni ugovor.
M SAN Grupa does not have a signed collective bargaining agreement.
There is no agreement with employees for representation within the European Works Council (EWC), the
employee council of a Societas Europaea (SE), or the employee council of a Societas Cooperativa
Europaea (SCE).
The fluctuation data refers to the number of employees who left the Group (excluding those who transferred
to another company within the Group or whose fixed-term contracts expired) in relation to the average number
of employees (the average number of employees in January and December 2024).

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M SAN GRUPA ANNUAL REPORT 2024. 213
S1-9 Diversity metrics
The highest management positions refer to individuals responsible for the legal entities within the
group (excluding undertakings founded by subsidiary companies), i.e. members of the Management
Board or Directors of affiliated undertakings. In 2024, five women (42%) and nine men (64%) were
employed in these positions.
This is the breakdown of employees per age, according to headcount and percentage:
1. younger than 30 years of age: 222 (22%)
2. 30 – 50 years of age: 625 (63%)
3. older than 50 years of age: 146 (15%)
The distribution includes individuals employed as at 31 De
cember 2024.
S1-10 Adequate wages
M SAN Grupa pays employees wages and remuneration in accordance with laws. All employees receive an
adequate wage, which is in all cases higher than the minimum wage (taking into account each country where
the Group operates separately). Additionally, all Group employees are entitled to the same benefits (hot meals,
transportation to and from work), regardless of their years of service, position, gender, age or any other
characteristic. Furthermore, all employees who hold similar job positions / are in similar job groups in a country
where the Group operates have their base salaries within similar pay grades, with no significant deviations
(taking into account the lowest and the highest salary within the job group).
S1-14 Health and safety
M SAN Grupa’s health and safety management system covers all employees (100%) and is governed by
the policies outlined in this chapter, under the section “Policies related to own workforce”, on page 197.
The Risk Assessment related to occupational safety incorporates the Employee Training Programme. The
development of a new Risk Assessment was initiated during the reporting period and is expected to be
finalised in the first quarter of 2025.
S1-16 Remuneration metrics
The salary calculation based on the gender of employees includes all employees in all M SAN Grupa companies
who are employed full-time (98.90% of employees, excluding those at Alterna Distribucija d.o.o., for which data
was unavailable).
Gross hourly wage for women (W) = EUR 10.17; Gross hourly wage for men (M) = EUR 9.98
[ (W-M) ÷ M ] × 100 = 1.90
The ratio of the total annual remuneration of the highest-paid individual to the median total yearly remuneration
for all employees (excluding the highest-paid individual) in 2024 is 6.63:1. This calculation includes employees
in all Group companies that received their wage in every month of 2024.

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M SAN GRUPA ANNUAL REPORT 2024. 214

S1-17 Incidents, complaints and severe human rights impacts
During the reporting period, no reported incidents of discrimination based on gender, race or ethnic origin,
nationality, religion or belief, disability, age, sexual orientation or any other relevant grounds were recorded.
Additionally, there were no fines, sanctions or compensation for damages related to incidents of discrimination.
Currently, there is no formalised mechanism for receiving complaints; instead, complaints are addressed in
individual talks between employees and the HR Department or line managers. In 2024, no formal complaints
of discrimination were submitted through the available channels. In 2024, no severe human rights violations
were recorded, nor were any fines, sanctions or compensation for damages related to serious human rights
violations imposed.

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ESRS S2: WORKERS IN THE VALUE CHAIN

Disclosure requirements Information
ESRS 2 SBM-2
S2
Interests and views of stakeholders 216
ESRS 2 SBM-3
S2
Material impacts, risks and opportunities and their interaction with
strategy and business model
216
ESRS S2-1 Policies related to value chain workers 217
ESRS S2-2 Processes for engaging with value chain workers about impacts 218
ESRS S2-3
Processes to remediate negative impacts and channels for value
chain workers to raise concerns
218
ESRS S2-4
Taking action on material impacts on value chain workers, and
approaches to managing material risks and pursuing material
opportunities related to value chain workers, and effectiveness of
those action
218
ESRS S2-5
Targets related to managing material negative impacts, advancing
positive impacts, and managing material risks and opportunities
219
M SAN Grupa operates in a complex and globally connected value chain, sourcing materials, components, and
services from various countries, including China, Turkey and other international markets. The Group recognises
the importance of ensuring dignified working conditions throughout our supply chain, as outlined in our
policies and programmes. However, to date, no formal policies or systematic approach have been developed
for in-depth analysis of working conditions within our supply chain. We acknowledge that there is room for
improvement in recognising and managing the impact on workers in the value chain. As a Group that is
required to report in accordance with ESRS, we are committed to the gradual improvement of our practices in
line with regulatory requirements and standards. We conduct basic checks to promptly identify potential risks
and ensure compliance with regulations, being aware of the importance of good business practices.

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M SAN GRUPA ANNUAL REPORT 2024. 216
ESRS S2: WORKERS IN THE VALUE CHAIN

WORKING CONDITIONS
Negative impact – potential; in the upstream value chain
Non-adequate wages

Overtime work

Health and safety
The production of electronic equipment
and devices is associated with overtime, low
wages that do not enable a decent living, and
inadequate protection of workers’ health and
safety.
Originating
from the
business
model and
linked to
business
relationships
Short-term to long-
term
EQUAL TREATMENT AND OPPORTUNITIES FOR ALL
Negative impact – potential; in the upstream value chain
Gender inequality
Unequal pay for equal work
Migrant workers, women, young workers, and
workers in third countries and global regions
with lower standards of workers’ rights have
been recognised as vulnerable groups of the
workers associated with M SAN Grupa, who are
at significant risk of underpayment.
Originating
from the
business
model and
linked to
business
relationships
Short-term to long-
term
OTHER RIGHTS ARISING FROM EMPLYOMENT RELATIONSHIP
Negative impact – potential; in the upstream value chain
Forced labour
Child labour
The extraction of raw materials and production
in third countries are associated with forced
labour and child labour, which are the most
severe forms of human rights violations
Originating
from the
business
model and
linked to
business
relationships
Short-term to long-
term
ESRS 2 SBM-2
Interests and views of stakeholders
The production of electronic equipment and devices is associated with potential human rights violations in the
upstream value chain (supply chain), especially in third countries. M SAN Grupa, which is involved in the
development and distribution of products under its own brand, is part of global value chains where negative
impacts on workers’ rights can be expected, arising from the business model and related to the organisation’s
business relationships.
ESRS 2 SBM-3
Material impacts, risks and opportunities and their interaction with strategy and
business model

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M SAN GRUPA ANNUAL REPORT 2024. 217

Impacts, risks and opportunities management
The complexity of the electronics production supply chain makes it difficult to precisely identify, assess and
address issues related to human rights of the workers within the value chain, particularly forced labour and
child labour, which represent the most severe forms of violation. Since the process of mapping the upstream
value chain, or the supply chain of M SAN Grupa, was not completed at the time of the publication of this
Report, the assessment was made by prioritising negative aspects, i.e. negative impacts and risks based on
available information. The focus was placed on the most serious potential human rights violations in third
countries, where M SAN Grupa and its business partners operate, as well as on matters for which it was assessed
that there is a reasonable chance that the risk will materialise. All described significant negative impacts on
workers in the value chain have been classified as potential risks in the short, medium and long term
Positive impacts and opportunities, as well as the actual negative impacts and risks along the chain of activities,
i.e. in the upstream and downstream value chain, will be assessed in the next reporting period, after the value
chain mapping process is completed. The results of the new double materiality assessment related to workers
in the value chain will be published in the next sustainability report of M SAN Grupa.
M SAN Grupa has identified several key types of workers in the value chain who may be significantly impacted:
- At M SAN Grupa locations, third-party workers are employed, including maintenance, security, and
logistics staff, who are hired through external recruitment agencies or through the Group’s own Human
Resources Department (such as students, etc.).
- Workers of manufacturers and suppliers of raw materials, parts and components that M SAN Grupa uses
in its products. These can be workers in manufacturing plants and factories.
- Workers in distribution, logistics and retail who enable the sale and placement of M SAN Grupa’s products
in the market. Their working conditions may be influenced by our business practices, particularly through
the selection of partners with responsible employment and occupational safety policies.
- Vulnerable worker groups in the value chain identified include migrants, women, young workers and
workers in third countries and global regions with lower standards of workers’ rights.
ESRS 2 MDR-P
S2-1 Policies related to value chain workers
As described in more detail in the chapter S1-1 under “Policies related to own workforce”, the respect of human
rights and the values upheld by M SAN Grupa are governed by the Corporate Compliance and Ethics Programme
and the Code of Ethics of M SAN Grupa and its affiliated companies.
M SAN Grupa addresses worker-related issues in the value chain through the Supplier Management Procedure
Rules. The Rules include procedures for factory or supplier quality checks to ensure high standards of product
and labour practices. M SAN Grupa has set its own standards and norms that suppliers must adhere to, which
include respecting human and labour rights. Factories and suppliers must conduct a thorough analysis and
adjust their operations according to M SAN Grupa’s requirements, which includes absolute intolerance of child
labour and forced or compulsory labour.
ESRS E2 IRO-1

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M SAN GRUPA ANNUAL REPORT 2024. 218
ESRS 2 MDR-A
S2-2 Processes for engaging with value chain workers about impacts
Before starting cooperating with suppliers, M SAN Grupa conducts factory audits to check ISO certifications
and working conditions. The assessment is based on the conditions to which workers are exposed, including
humidity and temperature of the work environment, the availability of protective equipment required for
specific tasks and the provision of all necessary tools. It is also checked whether workers have appropriate
chairs if the job requires sitting or standing. Workplaces are categorised according to their purpose, such as
offices, warehouses, and production, depending on the factory’s activity. During this audit, it is checked
whether these areas are properly segregated in accordance with regulations. In addition, the inspector uses a
subjective assessment to evaluate the production line to determine whether there are employees under the
age of 18. Supplier workers are not directly included in this assessment.

S2-3 Processes to remediate negative impacts and channels for value chain workers
to raise concerns
Given the effects and risks in the value chain in third countries where M SAN’s business partners operate, as
well as its complexity, there is a need to expand the scope of the Corporate Compliance and Ethics Programme
and the Code of Ethics of M SAN Grupa and its affiliated companies, and to regulate supplier management in
line with M SAN Grupa’s values. This includes expanding the channels for reporting irregularities and expressing
concerns to cover the practices of suppliers and business partners of M SAN Grupa, which will be known and
accessible to workers in M SAN Grupa’s value chain.

S2-4 Taking action on material impacts, and approaches to mitigating material
risks and pursuing material opportunities related to value chain workers, and
effectiveness of those actions and approaches
M SAN Grupa is actively working on improving working conditions throughout the value chain by setting
standards, collaborating with responsible partners and conducting regular compliance checks versus M SAN
Grupa’s standards. When it has joint projects or special business arrangements with partners, M SAN Grupa
ensures that all workers in those entities have fair working conditions and that M SAN Grupa’s working standards
are applied to prevent negative impacts on workers in the value chain. Positive impacts and opportunities, as
well as actual negative impacts and risks along the chain of activities or in the upstream and downstream value
chain, will be considered in the next reporting period after the completion of the value chain mapping process.
Consequently, an action plan will be developed and published in the next reporting periods.

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M SAN GRUPA ANNUAL REPORT 2024. 219
ESRS 2 MDR-P
S2-5 Targets related to managing material negative impacts, advancing positive
impacts, and managing material risks and opportunities
M SAN Grupa recognises the need to regulate the area of supplier management. The Management Board of M
SAN Grupa has therefore set a goal in 2024 to create internal regulations that will establish a systematic supplier
check process and initiate this process by the end of 2025.
A detailed analysis of the value chain and supplier checks in 2025 and 2026 will enable the setting of time-
limited result-oriented targets for managing material negative impacts, promoting positive impacts and
managing significant risks and opportunities.
Target setting and the inclusion of workers in the value chain will be considered in future reporting periods
after the completion of M SAN Grupa’s value chain mapping and the corresponding double materiality
assessment of the impacts, risks and opportunities related to workers in the value chain, based on information
gathered from supplier checks.
Metrics and targets

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ESRS S4: CONSUMERS AND END USERS

Disclosure requirements Information
ESRS 2 SBM-2
S4
Interests and views of stakeholders 221
ESRS 2 SBM-3
S4
Material impacts, risks and opportunities and their interaction with
strategy and business model
222
ESRS S4-1 Policies related to consumers and end-users 223
ESRS S4-2 Processes for engaging with consumers and end-users about impacts 224
ESRS S4-3
Processes to remediate negative impacts and channels for consumers and
end-users to raise concerns
224
ESRS S4-4
Taking action on material impacts on consumers and end-users,
and approaches to managing material risks and pursuing material
opportunities related to consumers and end-users, and effectiveness of
those actions
225
ESRS S4-5
Targets related to managing material negative impacts, advancing
positive impacts, and managing material risks and opportunities
227
M SAN Grupa has a highly diversified product portfolio, which is consolidated into four divisions, described in
more detail in the Management Report on page 27. The divisions cover operations in the regional Group
members. M SAN Grupa’s operations comprise more than 7,400 partners and deliver 200,000 products monthly
through various sales and distribution channels. The production and distribution of a large number of diverse
products have significant effects on consumers and end users. M SAN Grupa places safety, product and service
quality, delivery stability and serviceability at the centre of its operations. To achieve these standards, a thorough
quality control process has been implemented for components and finished products So far, the focus has
primarily been on quality, safety and availability, with consumer policies being part of the quality control
process. In the future, M SAN Grupa plans to gradually integrate the management of impacts, risks and
opportunities into all key processes – including production, distribution, marketing and sales.

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ESRS 2 SBM-2
Interests and views of stakeholders
Given that M SAN Grupa’s business activities cover a wide range of products, customers and end users, it is
crucial to responsibly manage the impacts and consider the interests and views of the affected stakeholders. At
the forefront of their interest is the quality of the delivered products and services, as well as service and support.
Furthermore, detailed and clear labelling of product characteristics and usage instructions provide stakeholders
with an in-depth understanding of correct handling, ensuring product safety during use. Regarding
communication with consumers and end customers, in addition to clear labelling, transparent marketing
communications ensure accessible information, product benefit descriptions and market-sustainable
behaviours. M SAN Grupa provides customers and business partners with access to all essential information on
its website, as well as opportunities for interaction about products and access to complaint mechanisms.
During 2024, M SAN Grupa conducted several market research studies, which are described below in the
chapter on implemented measures.
Strategy

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ESRS 2 SBM-3
Material impacts, risks and opportunities and their interaction with strategy and
business model

IMPACTS ON CONSUMERS AND END USERS
Positive impact – actual; in the downstream value chain
Comprehensive and
transparent product
information
Comprehensive, clear and transparent
product information, along with
ensuring mechanisms for customer
complaints.
Originating from the
business model and linked to
business relationships
Short-term
to long-
term
Positive impact – actual; in the downstream value chain
Quality control
Quality control ensures a high level of
product safety for consumers.
Originating from the
business model and linked to
business relationships
Short-term
to long-
term
Positive impact – actual; in the downstream value chain
Product availability and
responsible marketing
practices
Products are equally available to all
stakeholder groups, and the Group
implements responsible marketing
practices based on transparent and
truthful advertising.
Originating from the
business model and linked to
business relationships
Short-term
to long-
term
RISKS RELATED TO CONSUMERS AND END USERS
Comprehensive and
transparent product
information
Risks have been identified related
to the collection, storage and use
of sensitive, confidential and/or
proprietary data of users or customers.
Additionally, non-compliance with
regulations such as GDPR and NIS2/
Cyber Security Act may pose a risk,
potentially leading to financial
impacts in business dealings with
major partners.
Regulatory changes and trends in
product safety may lead to increased
production costs and material
procurement expenses.
Originating from the
business model and linked to
business relationships
Short-term
to long-
term

Impacts, risks and opportunities management
The diversity of products, the complexity of production processes and the multitude of business partners in
the downstream value chain, as well as consumers or end users, contribute to the potential occurrence of both
negative and positive effects and risks.
Since the process of mapping the downstream value chain, i.e. the supply chain of M SAN Grupa, was not
completed at the time of the publication of this Report, the assessment was made by prioritising impacts and
risks based on the information available at that time. Given that M SAN Grupa produces consumer goods, it has
direct effects on consumers and end users, particularly with regard to product information, the provision of
complaint mechanisms and the safeguarding of user information.
ESRS E2 IRO-1

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By complying with applicable regulations, M SAN Grupa develops positive impacts on consumers through
product quality control and the provision of key information about its products and services. It has been
recognised that potential negative impacts on stakeholders may occur in the areas of user data security and
privacy, product labelling and access to quality product information, but these can only be thoroughly verified
and documented in further assessments. The main activity of M SAN Grupa is the production of electrical and
electronic devices, and the accuracy and quality of its products have been assessed as crucial for the safety of
consumers and end users. High-quality product information, user instructions and product quality control are
directly linked to the management of potential negative impacts on consumers. Positive impacts have been
clearly recognised in terms of adequate consumer information, product quality and safety control, and the
equal availability of products to a very wide range of consumers.
Positive impacts and opportunities, as well as the actual negative impacts and risks along the value chain will
be considered in the next reporting period after the completion of the value chain mapping process. The
results of the new assessment of double materiality related to worker issues in the value chain will be published
in the next M SAN Grupa’s sustainability report.
In the consumer and end user segment, the following stakeholders have been recognised as clearly evident:
wholesalers, retailers, web shops, specialised retail chains, undertakings within M SAN Grupa, designers, air
conditioning installers, kitchen furniture manufacturers and end users.
ESRS 2 MDR-P
S4, ESRS 2 SBM-2
S4-1 Policies related to consumers and end users
M SAN Grupa respects human rights, the safety and health of end consumers and trade provisions by monitoring
and implementing the applicable regulations of the European Union and the Republic of Croatia, as well as
other relevant international regulations and those in force in key markets (such as the United States). During
product development, the needs, preferences and views of consumers and end users are taken into account.
This is monitored through market analyses and direct interaction with business partners, installers, service
technicians and end customers.
M SAN Grupa has adopted revised Rules on the Customer Management Procedure, which set out the procedures
and processes that must be applied in establishing business relations with customers, including the initiation
of business cooperation, mandatory data checks, procedures for verifying existing customers and behaviours
to be taken into account as they may have potential negative impacts on the operations of M SAN Grupa. The
Rules apply to business entities, i.e., companies with which contracts are concluded, both in the Croatian and
foreign markets. The Rules also lay down provisions on the verification of customers’ financial characteristics in
order to mitigate risks related to payments for delivered goods.
M SAN Grupa’s Export Compliance Programme is available on the Group’s website. Among other things, it
specifies necessary checks of business partners and customers. The Rules are described in the chapter G1 –
Business governance on p. 228.

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S4-3 Processes to remediate negative impacts and channels for consumers and end-
users to raise concerns
As consumers and end users place the greatest emphasis on product quality and safety, the characteristics of
product warranties are extremely important in addressing negative impacts. M SAN Grupa offers extended
warranties for its products, as well as additional warranties for certain products and provides spare parts within
the legally prescribed period.
Timely and clear information and awareness-raising for users is of vital importance with regard to the safe use
of products. All user manuals clearly specify the intended user groups for each product, indicating which
vulnerable users (children, children under the age of 8, persons with mental or physical impairments) should
not use the product.
Particular attention is given to child safety and to warnings related to children.
In the electric vehicles segment, this is ensured through promotions and test drives aimed at protecting the
safety and health of users. In 2024, M SAN Grupa ran a promotion offering a free helmet for safe riding with
every purchased electric scooter and electric bicycle.
On M SAN Grupa’s website, a form and email address are available for complaints, claims, enquiries and
commendations, accessible to all stakeholders involved in the relevant process. Depending on the nature of
the enquiry or complaint, the responsible function within M SAN Grupa provides the responses.
In the event of an undesirable incident during product use, M SAN Grupa has a contract in place with an
insurance company to cover all costs. Communication with the consumer or user takes place through an
insurance broker or, in the case of a minor damage, through direct negotiations with the user/consumer, with
the aim of reaching a fair compensation agreement to the mutual satisfaction of both parties.
ESRS 2 MDR-A
S4-2 Processes for engaging with consumers and end-users about impacts
All M SAN Grupa products are accompanied by legally required and appropriate materials containing
information and user instructions. M SAN Grupa carries out strict quality checks on its products throughout the
entire process of their manufacturing and assembly. Channels for advice, questions and complaints are available
to consumers and end users, and are published in the accompanying documents as well as on M SAN’s websites.
Distributors and business partners also provide appropriate channels for user communication with the
undertaking. The Group’s policy allows for customer complaints to be acknowledged even in cases where not
all conditions for complaint acceptance under the warranty terms have been met. In its relations with customers,
M SAN Grupa is also guided by the principles of conduct set out in its Code of Ethics and the Anti-Corruption
Policy, which are described in chapter G1 – Business governance, on p. 231.

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ESRS 2 MDR-A
S4-4 Taking action on material impacts, and approaches to mitigating material
risks and pursuing material opportunities related to value chain workers, and
effectiveness of those actions and approaches
M SAN Grupa is actively working on improving working conditions throughout the value chain by setting
standards, collaborating with responsible partner, and conducting regular compliance checks against M SAN
Grupa’s standards.
The Market Analysis Department conducts surveys and other methods to research the needs, rights, views and
preferences of end customers. In 2024, several market studies were conducted, with the main focus on the
specialised air conditioning installer channel, where two partner surveys were carried out. The surveys included
VIVAX service technicians in Croatia, Serbia, Bosnia and Herzegovina and Montenegro. The surveys assisted in
assessing what matters to partners in their business operations, their interests in cooperation, determining the
level of satisfaction with their collaboration with M SAN Grupa and gathering ideas for improvements. The two
surveys were conducted using quantitative methods, focus groups and in-depth interviews, and covered a
total of 586 stakeholders.
Suggestions for improving cooperation were collected, and a new sales plan was developed based on the
research findings.
A quantitative survey was conducted at the largest gaming fair with the aim of gathering stakeholder opinions
on the perceptions of individual brands. The survey was preparatory, aimed at obtaining initial information on
product reliability and quality.
In 2025, multiple surveys related to various products are planned, some of which will also include the e-mobility
segment. In addition to satisfaction with products and their quality, the surveys also collect valuable information
on which communication channels customers prefer, providing a solid basis for delivering high-quality and
comprehensive product information. Some of the planned surveys will also focus on studies related to quality
of life and health, the use of e-mobility and other aspects of sustainability.
Taking into account customer views about products and based on market research and customer preferences,
new products are developed or improvements introduced to existing products.
Consumer rights are stated and enclosed with each product through the warranty statement. Consumers can
submit their enquiries via on online form on the Group’s website and their enquiries are answered on a daily
basis.
The M SAN Grupa websites also contain relevant information relating to the importance of and issues concerning
cyber security, as well as the implementation of the NIS 2 Directive.
M SAN Grupa’s central service centre is located in Rugvica, covering an area of 2,200 m2, and is equipped with
state-of-the-art technical equipment as well as measurement and calibration devices essential for efficient
operation and top-level performance. M SAN Grupa invests in the training of service staff, who continuously
undergo professional development both in Croatia and abroad. All service employees hold the internationally
recognised CompTIA A+ certificate, compliant with ISO 17024 and US Directive 8140/8570.01-M, which
guarantees their expertise and competence in maintaining and servicing personal computers, laptops, desktop
and mobile phones, printers and peripherals. They are also specialised in the specific technological segment in
which they operate.

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The Enterprise Division is a value-added IT distribution (VAD). Enterprise services are aimed at system integrators,
Value Add Resellers, Managed Services Providers, Independent Software Vendors, Cloud Solution Providers,
large and small companies, whether being well-established or startups, as well as local and regional offices.
The enabling solutions include software solutions, infrastructure solutions, as well as cloud operations and
project-based solutions. M SAN Grupa collaborates with a range of globally recognised brands. As part of these
services, M SAN provides comprehensive customer and advisory support to clients.
One of the measures implemented is Smart BMS and was carried out by MS Energy. It is a smarter way of
battery management, providing insight into battery health via a mobile application. A centralised battery
production was introduced in a single factory using the same software, which led to improved product
performance and enhanced quality control. This reduced the number of devices returned for repair, the
quantity and number of spare parts required, and, consequently, the volume of transport in the region, as well
as the number of written-off devices and electronic waste.

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ESRS 2 MDR-M
S4-5 Targets related to managing material negative impacts, advancing positive
impacts, and managing material risks and opportunities
M SAN Grupa is aware of its opportunities and potential in ensuring product quality, as well as the importance
of managing its performance in terms of quality management and consumer information. For this purpose, the
Management Board of M SAN adopted key objectives in 2024.
Responsible marketing and product labelling includes a key indicator of 100% of the product range being
labelled with the following information on the products.
- source of product components and services;
- content, particularly with regard to substances that could impact the environment and society;
- safe use of a product and service;
- product disposal and its impact on the environment and society.
Actions for achieving this objective are:
- collection of accurate specifications from factories and suppliers
- obtaining complete technical documentation
- verification of all specifications via quality control
- preparation of a verified manufacturer’s specification for publication on the product and in the technical
instructions
- marketing communication of the accurate product name and characteristics in price lists and all
communication materials.
Implementation of the quality management process: ensure the delivery of devices that meet the defined
quality control standards. The following actions are undertaken to achieve this:
- continuously improve product and process safety
- expand the energy efficiency and environmental compatibility of products and processes
- sampling and testing, correction and analysis of errors identified in the sample
- production quality control in accordance with defined standards (AQL, full check and quality control
procedures).
Implementation of a data security management system across all Group members, which will be monitored by
the total number of substantiated complaints received regarding user privacy breaches and the total number
of data leaks, thefts or losses of user data. The actions to achieve this objective include the development of
data security policies and the provision of physical security, access controls, network security, backup and
recovery and cryptography. Employee training on the topic of business and personal data security is also
planned.
Metrics and targets

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Disclosure requirements Information
ESRS 2 GOV-1
G1
The role of the administrative, management and supervisory bodies 153
ESRS 2 IRO-1
G1
Description of the processes to identify and assess material impacts,
risks and opportunities
230
ESRS G1-1 Business conduct policies and corporate culture 231
ESRS G1-2 Management of relationships with suppliers 232
ESRS G1-3 Prevention and detection of corruption and bribery 234
ESRS G1-4 Confirmed incidents of corruption or bribery 234
ESRS G1-5 Political influence and lobbying activities 235
ESRS G1-6 Payment practices 235
As a large business system with a highly complex and extended value chain (both upstream and downstream),
M SAN Grupa maintains business relations with numerous business partners, suppliers and customers across
multiple markets. Given the multitude and complexity of these relationships, business ethics is an area that
requires particular attention. Potential negative impacts and risks related to business conduct and corruption
may occur along the value chain. Taking into account M SAN Grupa’s business activities and its traditionally
strong and responsible relationships with many users, customers and suppliers, the adoption of strict standards
and adherence to rules of business conduct are essential for sustainable and resilient operations. Associated
risks may manifest in increased procurement and production costs as well as disruptions in the supply chain.
Existing policies and regulations, along with the development of a corporate culture of responsibility,
strengthen M SAN Grupa’s business capacities and consequently the stability of the organisation. Business
conduct is regulated by codes, regulations and programmes, while corporate culture is based on M SAN Grupa’s
corporate values, vision and mission. M SAN Grupa has established a Sustainability Committee. Given its
international business relations, a culture of sustainability is the basis for establishing responsible relationships
with customers, suppliers and other stakeholders.
ESRS G1: BUSINESS GOVERNANCE

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ESRS 2 GENERAL DISCLOSURES
Identified impacts, risks and opportunities
CORPORATE CULTURE
Positive impact – potential; in own operations
Corporate culture
A corporate culture policy in which
employees have an easy access to top
management, can communicate openly
and have insight into all aspects of the
company’s operations.
Originating from the
business model
Short-term to mid-
term
MANAGEMENT OF RELATIONSHIPS WITH SUPPLIERS
Positive impact – actual; in business relationships, in the upstream value chain
Regular payments to
suppliers
Fair market relations with suppliers,
including negotiation and contracting
procedures as well as regular payments,
can have positive impacts, particularly
on small suppliers who are significantly
dependent on such practices.
Linked to business
relationships
Short-term to long-
term
Negative impact – potential; in business relationships, in the upstream value chain
Lack of due diligence
Since there is no systematic checking
of suppliers based on environmental
protection and human rights criteria, the
Group cannot provide adequate support
to suppliers relating to sustainable
practices. This can lead to inadequate
working conditions for suppliers or
negative environmental impacts.
Linked to business
relationships
Short-term to long-
term
ANTI-CORRUPTION
Negative impact – actual; in own operations
Insufficient employee
awareness
Although the Group takes care of all
legal obligations, the negative impact
arises from employees’ insufficient
awareness and familiarity with anti-
corruption measures.
Originating from the
business model
Short-term to mid-
term

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CORPORATE CULTURE
Positive impact – potential; in own operations
Corporate culture
A corporate culture policy in which
employees have an easy access to top
management, can communicate openly
and have insight into all aspects of the
company’s operations.
Originating from the
business model
Short-term to mid-
term
MANAGEMENT OF RELATIONSHIPS WITH SUPPLIERS
Positive impact – actual; in business relationships, in the upstream value chain
Regular payments to
suppliers
Fair market relations with suppliers,
including negotiation and contracting
procedures as well as regular payments,
can have positive impacts, particularly
on small suppliers who are significantly
dependent on such practices.
Linked to business
relationships
Short-term to long-
term
Negative impact – potential; in business relationships, in the upstream value chain
Lack of due diligence
Since there is no systematic checking
of suppliers based on environmental
protection and human rights criteria, the
Group cannot provide adequate support
to suppliers relating to sustainable
practices. This can lead to inadequate
working conditions for suppliers or
negative environmental impacts.
Linked to business
relationships
Short-term to long-
term
ANTI-CORRUPTION
Negative impact – actual; in own operations
Insufficient employee
awareness
Although the Group takes care of all
legal obligations, the negative impact
arises from employees’ insufficient
awareness and familiarity with anti-
corruption measures.
Originating from the
business model
Short-term to mid-
term
GOVERNANCE-RELATED RISKS
RISK; in the upstream value chain
Assessment of suppliers’
sustainability practices
Although suppliers are checked using
methods primarily focused on the
prescribed quality, there is no systematic
process for checking (significant)
suppliers based on environmental
protection and human rights criteria,
which poses a risk in governance
and compliance with sustainability
requirements in the supply chain.
Linked to business
relationships
Short-term to
long-term
RISK; in own operations; in the upstream and downstream value chain
Anti-corruption
Given the industry and sector and the
markets the Group operates in, there
is a risk of corruption and bribery. The
Anti-Corruption Policy prescribes zero
tolerance for corruption and bribery,
however, the need to organise a more
systematic training of the exposed
functions has been recognised.
Originating from the
business model
Short-term to
mid-term
M SAN Grupa is commercially active in diverse markets and takes into account various legal frameworks and
social norms in its operations. So far, the Management Board of M SAN Grupa has largely focused its
management of impacts, risks and opportunities on business processes, particularly in terms of quality
control and the consideration of financial, market and operational risks. Impact assessment was initiated in
2023, when the Management Board undertook an initial review of the likelihood and significance of financial
impacts. Risk management has been described in chapter ESRS 2 “General disclosures”, on p. 167. A
comprehensive update of the impact, risk and opportunity management process will be carried out in 2025.
ESRS 2 IRO-1 G1
Impact, risk and opportunity management

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ESRS 2 MDR-P
ESRS 1 AR1
G1-1 Business conduct policies and corporate culture
M SAN Grupa’s business conduct and corporate culture are based on ethical business practices, transparency
and inclusiveness. Through regular discussions, education and incentives, key functions are ensured to
understand the importance of these values and actively contribute to creating a positive working
environment.
M SAN Grupa relies on several key policies and documents in its governance.
The Code of Ethics and Anti-Corruption Policy comprise the following principles:
- The principle of compliance with laws and other regulations
- The principle of respect for integrity and dignity
- The principle of zero tolerance for any form of discrimination, mobbing and harassment
- The principle of zero tolerance for bribery and corruption
- The principle of avoiding and preventing conflicts of interest
- The principle of fair market competition
- The principle of responsible management of assets, business finances and the procurement process
- The principle of zero tolerance for money laundering and terrorist financing
- The principle of professionalism and accountability
- The principle of trust and collegiality
- The principle of teamwork and professional communication
- The principle of confidentiality of personal data and business information, and the security of IT systems
- The principle of zero tolerance for the consumption of alcohol, drugs and other addictive substances
during working hours
- The principle of environmental protection and human health
- The principle of respect for human rights and zero tolerance for forced labour and child labour
- The principle of transparency in business operations and reporting
- The principle of compliance with import-export controls, restrictions and sanctions
Business partners, suppliers and other stakeholders may lodge a complaint about employee conduct they
believe to be in breach of the provisions of the Code of Ethics. Employees may file a complaint against their
direct superiors and/or other employees if they believe their behaviour is in breach of the provisions of the
Code of Ethics. Grievances may be submitted in writing to the contact email address: compliance@msan.hr
or by telephone using the number available and published on the intranet pages for employees or on the
website for all third parties concerned. The data of the complainant are considered confidential information.
The submission of a complaint by an employee in good faith cannot be a reason for disciplinary action
against them. The Group does not tolerate any retaliation against stakeholders, especially employees, who
report potential violations or express concerns in good faith.
In 2023, M SAN Grupa adopted a comprehensive Corporate Compliance and Ethics Programme. It sets out
the corporate values, mission and vision. It sets out in detail the compliance objectives, the management of
compliance processes and their improvement. Furthermore, it defines the responsibilities of management
and key personnel for the implementation of compliance, as well as the responsibilities of the Compliance
Officer and Internal Audit.

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In 2023, M SAN Grupa adopted an Export Compliance Programme, which reflects the Group’s adherence
to and compliance with all export control laws and econoMic SANctions of the United States, the European
Union and other applicable jurisdictions. M SAN Grupa complies with all anti-corruption laws applicable in
the Republic of Croatia, the European Union, including the United States Foreign Corrupt Practices Act
(FCPA) and the United Kingdom Bribery Act. M SAN Grupa does not engage in business cooperation with
individuals or entities with whom business is prohibited under the SDN List (Specially Designated Nationals
and Blocked Persons), or with individuals or entities listed on other U.S. lists such as the Entity List, the
Denied Persons List or the Debarred Parties List. M SAN Grupa also does not participate in the provision of
services or products intended for prohibited end uses (Prohibited End Users). M SAN Grupa trains its
employees in accordance with the Programme.
At the end of 2019, M SAN Grupa adopted the Rules on the Internal Reporting of Irregularities and the
Appointment of a Confidential Person. Each report may be submitted to the immediate supervisor or Legal,
and Internal Audit is involved as necessary.
All relevant documents are available on the Group’s intranet pages, while the Anti-Corruption Policy, Code
of Ethics and Export Compliance Programme are also available on the website at the following link: https://
www.msan.hr/en/corporate-compliance-and-ethics-statement/.

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G1-2 Management of relationships with suppliers
M SAN Grupa governs its relationships with suppliers through the Supplier Code of Conduct. This document,
which all suppliers must accept, sets out the Group’s expectations when establishing cooperation and during
cooperation with suppliers, and defines the minimum standards the Group expects from its procurement
business partners. These expectations can be grouped into the following areas: ethics and integrity; worker
protection, human rights; health and safety protection; environment and sustainability; security and privacy
protection. When procuring products, enquiries are initially directed to local suppliers who meet the
requirements, where such suppliers exist and are able to provide the specific type of goods or services. In
this way, the local community is supported and, due to the proximity of delivery, the harmful environmental
impact of transport is reduced. Uncertainties, i.e., the risks of unstable supply chains, are addressed by
securing alternatives and continuously expanding the base of reliable suppliers. The nature of the products
also dictates the possibility of expanding the supplier base, with consideration given to the length of supply
chains.
According to M SAN Grupa’s regulations, the approach to suppliers is based on a careful risk assessment in
order to minimise potential issues such as financial penalties, loss of revenue, reputational damage and
supply chain disruptions. When selecting and checking suppliers, particular attention is given to checks such
as VAT number verification, registration in national registers, analyses of financial indicators and assessment
of supplier reliability. Existing suppliers are also continuously monitored and periodically evaluated to ensure
compliance with internal and legal standards. Factory assessment is described in the chapters ESRS S2
“Workers in the value chain” and ESRS S4 “Consumers and end users”. Based on the audit of the supplier /
factory carried out by quality control, a somewhat relevant information is obtained on the internal
organisation of the supplier or factory, working conditions, social rights and other aspects related to ethical
business conduct. Suppliers are assessed in accordance with the Factory Evaluation Report, the subjective
impression from the communication with the supplier’s responsible and contact persons, and information
about the suppliers obtained from third parties. M SAN Grupa selects suppliers whose supply chains have all
processes and certifications fully aligned with European Union regulations.
The process of selecting and verifying suppliers through social and environmental criteria, as well as the
application of ESG factors, was not active during 2024. However, the Regulations highlight the importance of
evaluating supplier sustainability, as well as ensuring compliance with the M SAN Grupa’s Code of Ethics or
the supplier’s own ethical standards, which include relevant social and environmental elements. An action
plan for introducing social and environmental criteria into the supplier selection process for the next two
years should be an organic continuation of this process, along with a thorough analysis of the value chain.

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G1-3 Prevention and detection of corruption and bribery
The Anti-Corruption Policy is available to all employees and is publicly published. All employees of M SAN
Grupa are required to read, understand and comply with this policy. Managers are required to implement this
policy and ensure that the employees, individuals, and entities they are responsible for are familiar with this
business policy, understand it, and adhere to its provisions.
The goal of identifying corporate risks is to uncover weak points within the established decision-making
processes, or parts of the system that, due to various circumstances, are most exposed to corruption.
Additionally, the Group is required to maintain books and documentation that accurately reflect the Group’s
transactions and the allocation of its resources. The books and documentation must be accurate and complete,
including forms necessary for processing payments, attachments and backups used to justify payment
requests, authorisation and payment classification by accounting codes. No undisclosed or undocumented
financial funds will be established for any purpose.
M SAN Grupa, its employees and representatives may be exposed to criminal, civil and administrative penalties,
including imprisonment and/or fines. A violation of the business policy or anti-corruption laws may subject
employees to disciplinary actions, including termination of their employment contract.
According to the provisions of the Anti-Corruption Policy, reports of violations or suspicious activities can be
submitted to the relevant line manager or Legal, either personally or anonymously. M SAN Grupa does not
tolerate retaliation against anyone who, in good faith, submits a report or cooperates in an investigation
process. If an investigation has been conducted, the Confidential Person, Legal and Internal Audit submit a
report to the Management Board. The most high-risk functions in the Group in terms of corruption and bribery
are those involving financial transactions, business decision-making, relations with external partners and
government institutions. These functions carry a higher risk due to their role in awarding contracts, handling
finances, making strategic decisions and interacting with third parties.
M SAN Grupa’s Anti-Corruption Policy is available to all employees through internal channels. The introduction
of the new LMS system aims to implement an anti-corruption training in 2025.

G1-4 Incidents of corruption or bribery
No reports were recorded during the reporting period, and therefore no confirmed cases of corruption
or bribery.

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M SAN GRUPA ANNUAL REPORT 2024. 235

G1-5 Political influence and lobbying
M SAN Grupa does not engage in lobbying or hire lobbyists to exert political influence related to its material
impacts, risks and opportunities. Additionally, the Group’s Anti-Corruption Policy prohibits offering and giving
political donations, which include monetary or non-monetary contributions such as equipment rentals,
donations, free services or donating employees’ time.
None of the members of the company’s administrative, management or supervisory bodies or the Group
companies have held a comparable position in the public administration within the two years prior to their
appointment in the current reporting period.
M SAN Grupa is member of the Croatian Chamber of Commerce.

G1-6 Payment practices
The average weighted payment period for obligations to EU suppliers during 2024 was 47.0 days, while for non-
EU suppliers, this period was 70.5 days. The average days were obtained based on a sample that included all
distribution companies within the Group. The closing days were weighted based on the invoice amounts for
each supplier, and the same method was used to calculate the weighted average for all suppliers at the Group
level. Of the analysed payments, 47% relate to payments to suppliers within the EU. The Group has contracted
payment terms within the EU ranging from 30 to 60 days. The remaining 53% relates to suppliers outside the
EU, where payment terms are contracted, depending on the supplier, between 30 to 120 days. Some suppliers
offer modular payment terms, where the Group has the option to pay under the contractual conditions or opt
for shorter payment terms, receiving discounts for early payment.
In such options, the Group occasionally uses factoring payments, where the factoring costs represent a lower
expense than the amount of the discount, thus generating additional savings. M SAN Grupa has no ongoing
legal proceedings related to delayed payments.

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M SAN GRUPA ANNUAL REPORT 2024. 236

Disclosure requirements in ESRS included in the sustainability report
Appendix 1: Index of ESRS disclosures
ESRS 2 IRO-2
ESRS 2 – GENERAL DISCLOSURES
BP-1
General basis for preparation of the
sustainability statement
ESRS 2 - General disclosures: Basis for preparation of the
sustainability report
150
BP-2
Disclosures in relation to specific
circumstances
ESRS 2 - General disclosures: Basis for preparation of the
sustainability report
151
GOV-1
The role of the administrative,
management and supervisory
bodies
ESRS 2 - General disclosures: Managing sustainability
issues
153
GOV-2
Information provided to and
sustainability matters addressed by
the undertaking’s administrative,
management and supervisory
bodies
ESRS 2 - General disclosures: Managing sustainability
issues
156
GOV-3
Integration of sustainability-related
performance in incentive schemes
ESRS 2 - General disclosures: Managing sustainability
issues
157
GOV-4 Statement on due diligence
ESRS 2 - General disclosures: Managing sustainability
issues
157
GOV-5
Risk management and internal
controls over sustainability
reporting
ESRS 2 - General disclosures: Managing sustainability
issues
158
SBM-1 Strategy and business model ESRS 2 - General disclosures: Strategy and business model 159
SBM-2 Interests and views of stakeholders
ESRS 2 - General disclosures: Double materiality 159
Within the topical standards: Material impacts, risks and
opportunities
S1 200
S2 216
S4 221
SBM-3
Material impacts, risks and
opportunities and their interaction
with strategy and business model
ESRS 2 - General disclosures: Double materiality 160
Within the topical standards: Material impacts, risks and
opportunities
E1 167
E5 186
S1 194
S2 216
S4 221
G1 230
IRO-1
Description of the processes to
identify and assess material impacts,
risks and opportunities
ESRS 2 - General disclosures: Double materiality 160
Within the topical standards: Material impacts, risks and
opportunities
E1 168
E5 186
S1 201
S2 217
S4 222
G1 230
IRO-2
Disclosure requirements in ESRS
covered by the undertaking’s
sustainability statement
ESRS 2 - General disclosures: Double materiality 164

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M SAN GRUPA ANNUAL REPORT 2024. 237
E1 – CLIMATE CHANGE
GOV-3
Integration of sustainability-related
performance in incentive schemes
ESRS 2 - General disclosures: Managing
sustainability issues
157
SBM-3
Material impacts, risks and opportunities and
their interaction with strategy and business
model
E1- Climate change: Material impacts, risks and
opportunities
167
IRO-1
Description of the processes to identify and
assess material climate-related impacts, risks
and opportunities
E1- Climate change: Our material impacts, risks
and opportunities
168
ESRS 2 - General disclosures: Double materiality 160
E1-1 Transition plan for climate change mitigation E1- Climate change: Our management approach 167
E1-2
Policies related to climate change mitigation
and adaptation
E1- Climate change: Our management approach 168
E1-3
Actions and resources in relation to climate
change policies
E1 - Climate change: Actions and activities 168
E1-4
Targets related to climate change mitigation
and adaptation
E1 - Climate change: Metrics and targets 168
E1-5 Energy consumption and mix E1 - Climate change: Metrics and targets 169
E1-6 Gross Scopes 1, 2, 3 and Total GHG emissions E1 - Climate change: Metrics and targets 171
E1-7
GHG removals and GHG mitigation projects
financed through carbon credits
Not applicable 174
E1-8 Internal carbon pricing Not applicable 174
E1-9
Anticipated financial effects from material
physical and transition risks and potential
climate-related opportunities
Use of phase-in option -
E5 – RESOURCE USE AND CIRCULAR ECONOMY
SBM-3
Material impacts, risks and opportunities and
their interaction with strategy and business
model
E5 - Resource use and circular economy: Material
impacts, risks and opportunities
186
IRO-1
Description of the processes to identify
and assess material resource use and
circular economy-related impacts, risks and
opportunities
E5 - Resource use and circular economy: Material
impacts, risks and opportunities
186
ESRS 2 - General disclosures: Double materiality 160
E5-1
Policies related to resource use and circular
economy
E5 - Resource use and circular economy:
Management approach
187
E5-2
Actions and resources related to resource use
and circular economy
E5 - Resource use and circular economy: Actions
and activities
188
E5-3
Targets related to resource use and circular
economy
E5 - Resource use and circular economy: Metrics
and targets
189
E5-4 Resource inflows
E5 - Resource use and circular economy: Metrics
and targets
189
E5-5 Resource outflows
E5 - Resource use and circular economy: Metrics
and targets
189
E5-6
Anticipated financial effects from resource use
and circular economy-related impacts, risks and
opportunities
Use of phase-in option -

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S1 – OWN WORKFORCE
SBM-2 Interests and views of stakeholders
S1- Own workforce: Material impacts, risks and
opportunities
200
ESRS 2 - General disclosures: Double materiality 159
SBM-3
Material impacts, risks and opportunities and
their interaction with strategy and business
model
S1- Own workforce: Material impacts, risks and
opportunities
195
S1-1 Policies related to own workforce S1 - Own workforce: Management approach 197
S1-2
Processes to remediate negative impacts and
channels for own workers to raise concerns
S1 - Own workforce: Management approach 201
S1-3
Processes to remediate negative impacts and
channels for own workers to raise concerns
S1 - Own workforce: Management approach 202
S1-4
Taking action on material impacts on own
workforce, and approaches to mitigating
material risks and pursuing material
opportunities related to own workforce, and
effectiveness of those actions
S1 - Own workforce: Actions and activities 203
S1-5
Targets related to managing material negative
impacts, advancing positive impacts, and
managing material risks and opportunities
S1 - Own workforce: Metrics and targets 207
S1-6 Characteristics of the undertaking’s employees S1 - Own workforce: Metrics and targets 210
S1-7
Characteristics of non-employee workers in the
undertaking’s own workforce
Use of phase-in option -
S1-8
Collective bargaining coverage and social
dialogue
S1 - Own workforce: Metrics and targets 212
S1-9 Diversity metrics S1 - Own workforce: Metrics and targets 213
S1-10 Adequate wages S1 - Own workforce: Metrics and targets 213
S1-11 Social protection Use of phase-in option -
S1-12 Persons with disabilities Use of phase-in option -
S1-13 Training and skills development metrics Use of phase-in option -
S1-14 Health and safety metrics Use of phase-in option 213
S1-15 Work-life balance metrics Use of phase-in option -
S1-16
Compensation metrics (pay gap and total
compensation)
S1 - Own workforce: Metrics and targets 213
S1-17
Incidents, complaints and severe human rights
impacts
S1 - Own workforce: Metrics and targets 214

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M SAN GRUPA ANNUAL REPORT 2024. 239
S2 – WORKERS IN THE VALUE CHAIN
SBM-2 Interests and views of stakeholders
S2 - Workers in the value chain: Material impacts,
risks and opportunities
215
ESRS 2 - General disclosures: Double materiality 159
SBM-3
Material impacts, risks and opportunities and
their interaction with strategy and business
model
S2 - Workers in the value chain: Our material
impacts, risks and opportunities
215
S2-1 Policies related to value chain workers
S2 - Workers in the value chain: Management
approach
217
S2-2
Processes for engaging with value chain
workers about impacts
S2 - Workers in the value chain: Management
approach
218
S2-3
Processes to remediate negative impacts
and channels for value chain workers to raise
concerns
S2 - Workers in the value chain: Management
approach
218
S2-4
Taking action on material impacts on value
chain workers, and approaches to managing
material risks and pursuing material
opportunities related to value chain workers,
and effectiveness of those action
S2 - Workers in the value chain: Actions and
activities
218
S2-5
Targets related to managing material negative
impacts, advancing positive impacts, and
managing material risks and opportunities
S2 - Workers in the value chain: Targets 219
S4 – CONSUMERS AND END USERS
SBM-2 Interests and views of stakeholders
S4 - Consumers and end users: Material impacts,
risks and opportunities
221
ESRS 2 - General disclosures: Double materiality 159
SBM-3
Material impacts, risks and opportunities and
their interaction with strategy and business
model
S4 - Consumers and end users: Material impacts,
risks and opportunities
222
S4-1 Policies related to consumers and end-users ESRS 2 - General disclosures: Double materiality 223
S4-2
Processes for engaging with consumers and
end-users about impacts
S4 - Consumers and end users: Management
approach
224
S4-3
Processes to remediate negative impacts and
channels for consumers and end-users to raise
concerns
S4 - Consumers and end users: Actions and
activities
224
S4-4
Taking action on material impacts on
consumers and end-users, and approaches to
managing material risks and pursuing material
opportunities related to consumers and end-
users, and effectiveness of those actions
S4 - Consumers and end users: Actions and
activities
225
S4-5
Targets related to managing material negative
impacts, advancing positive impacts, and
managing material risks and opportunities
S4 - Consumers and end users: Actions and
activities
227

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M SAN GRUPA ANNUAL REPORT 2024. 240
G1 – BUSINESS GOVERNANCE
GOV-1
The role of the administrative, management
and supervisory bodies
ESRS 2 - General disclosures: Managing
sustainability issues
153
IRO-1
Description of the processes to identify and
assess material impacts, risks and opportunities
G1 - Business governance: Material impacts, risks
and opportunities
230
ESRS 2 - General disclosures: Double materiality 160
G1-1
Business governance policies and corporate
culture
G1 - Business governance: Management
approach
231
G1-2
Management of relationships with suppliers
Prakse plaćanja
G1 - Business governance: Management
approach
232
S2 - Workers in the value chain: Actions and
activities
225
G1-3
Prevention and detection of corruption and
bribery
G1 - Business governance: Management
approach
234
G1-4 Confirmed incidents of corruption or bribery G1 - Business governance: Metrics and targets 234
G1-5 Political influence and lobbying activities G1 - Business governance: Metrics and targets 235
G1-6 Payment practices G1 - Business governance: Metrics and targets 235

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M SAN GRUPA ANNUAL REPORT 2024. 241
Requirement
Data point
Designation
SFDR reference
Pillar 3 reference
Benchmark regulation reference
EU Climate Law reference
Comment
Page
ESRS 2 GOV-1 21d
Management Board’s gender
diversity
x x 154
ESRS 2 GOV-1 21e
Percentage of Management Board
members who are independent
x 154
ESRS 2 GOV-4 30 Statement on due diligence x 157
ESRS 2 SBM-1 40d-i
Involvement in activities related
to fossil fuels and energy
x x x
Not
applicable
ESRS 2 SBM-1 40d-ii
Involvement in activities related
to chemical production
x x
Not
applicable
ESRS 2 SBM-1 40d-iii
Involvement in activities related
to controversial weapons
x x
Not
applicable
ESRS 2 SBM-1 40d-iv
Involvement in activities related
to the cultivation and production
of tobacco
x
Not
applicable
ESRS E1-1 14
Transition plan to reach climate
neutrality by 2050
x
Use of
phase-in
option
ESRS E1-1 16g
Undertakings excluded from
Paris-aligned benchmarks
x x 167
ESRS E1-4 34 GHG emissions reduction goals x x x 169
ESRS E1-5 38
Energy consumption from fossil
sources disaggregated by sources
(only high climate impact sectors)
x 169
ESRS E1-5 37 Energy consumption and mix x 169

The table below includes all data points arising from other EU regulations as outlined in ESRS 2 Appendix B, with
references to the chapters in this Sustainability Report where these data can be found. The data is not listed if it is
related to a topic that is “Not material” or “Not applicable” to the business activities of M SAN Grupa.
Appendix 2: List of data points in cross-cutting and
topical standards that derive from other EU legislation

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M SAN GRUPA ANNUAL REPORT 2024. 242
Requirement
Data point
Designation
SFDR reference
Pillar 3 reference
Benchmark regulation reference
EU Climate Law reference
Comment
Page
ESRS 2 GOV-1 21d
Management Board’s gender
diversity
x x 154
ESRS 2 GOV-1 21e
Percentage of Management Board
members who are independent
x 154
ESRS 2 GOV-4 30 Statement on due diligence x 157
ESRS 2 SBM-1 40d-i
Involvement in activities related
to fossil fuels and energy
x x x
Not
applicable
ESRS 2 SBM-1 40d-ii
Involvement in activities related
to chemical production
x x
Not
applicable
ESRS 2 SBM-1 40d-iii
Involvement in activities related
to controversial weapons
x x
Not
applicable
ESRS 2 SBM-1 40d-iv
Involvement in activities related
to the cultivation and production
of tobacco
x
Not
applicable
ESRS E1-1 14
Transition plan to reach climate
neutrality by 2050
x
Use of
phase-in
option
ESRS E1-1 16g
Undertakings excluded from
Paris-aligned benchmarks
x x 167
ESRS E1-4 34 GHG emissions reduction goals x x x 169
ESRS E1-5 38
Energy consumption from fossil
sources disaggregated by sources
(only high climate impact sectors)
x 169
ESRS E1-5 37 Energy consumption and mix x 169
Requirement
Data point
Designation
SFDR reference
Pillar 3 reference
Benchmark regulation reference
EU Climate Law reference
Comment
Page
ESRS E1-5 40-43
Energy intensity associated with
activities in high climate impact
sectors
x 169
ESRS E1-6 44
Gross Scopes 1, 2, 3 and Total
GHG emissions
x x x 171
ESRS E1-6 53-55 Gross GHG emissions intensity x x x 171
ESRS E1-7 56 GHG removals and carbon credits x
Not
material
ESRS E1-9 66
Exposure of the benchmark
portfolio to climate-related
physical risks
x
Use of
phase-in
option
ESRS E1-9 66a
Disaggregation of monetary
amounts by acute and chronic
physical risk
x
Use of
phase-in
option
ESRS E1-9 66c
Location of significant assets at
material physical risk
x
Use of
phase-in
option
ESRS E1-9 67c
Breakdown of the carrying value
of its real estate assets by energy-
efficiency classes
x
Use of
phase-in
option
ESRS E1-9 69
Degree of exposure of the
portfolio to climate-related
opportunities
x
Use of
phase-in
option
ESRS E2-4 28
Amount of each pollutant
listed in Annex II of the EPRTR
Regulation (European Pollutant
Release and Transfer Register)
emitted to air, water and soil
x
Not
material
ESRS E3-1 9 Water and marine resources x
Not
material
ESRS E3-1 13 Dedicated policy x
Not
material

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M SAN GRUPA ANNUAL REPORT 2024. 243
Requirement
Data point
Designation
SFDR reference
Pillar 3 reference
Benchmark regulation reference
EU Climate Law reference
Comment
Page
ESRS E3-1 14 Sustainable oceans and seas x
Not
material
ESRS E3-4 28c Total water recycled and reused x
Not
material
ESRS E3-4 29
Total water consumption in
m3 per net revenue on own
operations
x
Not
material
ESRS 2 SBM-3 E4 16a-i Biodiversity-sensitive areas x
Not
material
ESRS 2 SBM-3 E4 16b Land impact x
Not
material
ESRS 2 SBM-3 E4 16c Endangered species x
Not
material
ESRS E4-2 24b
Sustainable land/agriculture
practices or policies
x
Not
material
ESRS E4-2 24c
Sustainable oceans/seas practices
or policies
x
Not
material
ESRS E4-2 24d Policies to address deforestation x
Not
material
ESRS E5-5 37d Non-recycled waste x 189
ESRS E5-5 39
Hazardous waste and radioactive
waste
x 189
ESRS 2 SBM-3 – S1 14f Risk of incidents of forced labour x
Not
material
ESRS 2 SBM-3 – S1 14g Risk of incidents of child labour x
Not
material
ESRS S1-1 20
Human rights policy
commitments
x 197
ESRS S1-1 21
Due diligence policies on issues
addressed by the fundamental
International Labour Organisation
Conventions 1 to 8
x 197
ESRS S1-1 22
Processes and measures for
preventing trafficking in human
beings
x
Not
material
ESRS S1-1 23
Workplace accident prevention
policy or management system
x 197

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M SAN GRUPA ANNUAL REPORT 2024. 244
Requirement
Data point
Designation
SFDR reference
Pillar 3 reference
Benchmark regulation reference
EU Climate Law reference
Comment
Page
ESRS S1-3 32c
Grievance/complaints handling
mechanisms
x x 202
ESRS S1-14 88b, 88c
Number of fatalities and number
and rate of work-related accidents
x
Use of
phase-in
option
ESRS S1-14 88e
Number of days lost to injuries,
accidents, fatalities or illness
x x
Use of
phase-in
option
ESRS S1-16 97a Unadjusted gender pay gap x 213
ESRS S1-16 97b Excessive CEO pay ratio x 213
ESRS S1-17 103a Incidents of discrimination x x 214
ESRS S1-17 104a
Non-respect of UNGPs on
Business and Human Rights and
OECD
x 214
ESRS 2 SBM3 S2 11b
Significant risk of child labour or
forced labour in the value chain
x 215
ESRS S2-1 17
Human rights policy
commitments
x 217
ESRS S2-1 18
Policies related to value chain
workers
x x 217
ESRS S2-1 19
Non-respect of UNGPs on
Business and Human Rights and
OECD
x 217
ESRS S2-1 19
Due diligence policies on issues
addressed by the fundamental
International Labour Organisation
Conventions 1 to 8
x 217
ESRS S2-4 36
Human rights issues and incidents
connected to its upstream and
downstream value chain
x 218
ESRS S3-1 16
Human rights policy
commitments
x x
Not
material

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Requirement
Data point
Designation
SFDR reference
Pillar 3 reference
Benchmark regulation reference
EU Climate Law reference
Comment
Page
ESRS S3-1 17
Non-respect of UNGPs on
Business and Human Rights
and OECD
x
Not
material
ESRS S3-4 36
Human rights issues and
incidents
x
Not
material
ESRS S4-1 16
Policies related to consumers
and end users
x x 223
ESRS S4-1 17
Non-respect of UNGPs on
Business and Human Rights
and OECD
x 223
ESRS S4-4 35
Human rights issues and
incidents
x 225
ESRS G1-1 10b
United Nations Convention
against Corruption
x 231
ESRS G1-1 10d Protection of whistle-blowers x x 231
ESRS G1-4 24a
Fines for violation of anti-
corruption and anti-bribery
laws
x 234
ESRS G1-4 24b
Standards for preventing
corruption or bribery
x 234

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Tel: +385 1 2395 741
E-mail: bdo-croatia@bdo.hr
BDO Croatia d.o.o.
10000 Zagreb
Radnička cesta 180

Registrirano kod Trgovačkog suda u Zagrebu pod brojem 080044149
OIB 76394522236
INDEPENDENT AUDITOR'S LIMITED ASSURANCE REPORT ON THE CONSOLIDATED SUSTAINABILITY
REPORT FOR 2024
To the owner of M SAN Grupa d.o.o. and its subsidiaries, Zagreb
Subject of Examination
We have been engaged by M SAN Grupa d.o.o. to conduct an engagement with limited assurance, in
accordance with the International Standard on Assurance Engagements (ISAE) 3000, Assurance
Engagements Other than Audits or Reviews of Historical Financial Information (revised)
("Engagement"), on the consolidated Sustainability Report ("Subject of Examination") of M SAN Grupa
d.o.o. ("Company") and its subsidiaries (together "Group"), contained in the "Sustainability Report" in
the Management Report (consolidated Sustainability Report) as of 31 December 2024, and for the
year then ended.
Criteria Applied by the Group
In preparing the consolidated Sustainability Report, the Group applied the provisions of Articles 32
and 36 of the Accounting Act (Official Gazette, No. 85/24 and 145/24), including:
• Compliance with the provisions of the European Sustainability Reporting Standards (ESRS),
including the implementation of the process for identifying information disclosed in the
consolidated Sustainability Report ("Process") as described in the section The process of
assessing double materiality; and
• Compliance of disclosures in the consolidated Sustainability Report with the reporting
requirements of Article 8 of Regulation (EU) 2020/852 ("Taxonomy Regulation").
Inherent Limitations in Preparing the Consolidated Sustainability Report
Inherent limitations exist in all assurance engagements.
The criteria and characteristics of the Sustainability Report and the lack of long-established
authoritative guidelines, standard applications, and reporting practices allow for the adoption of
different, but acceptable, measurement methodologies, which may result in differences among
entities. The adopted measurement methodologies can also affect the comparability of sustainability
data reported by different organizations and the consistency within the same organization from year
to year as methodologies evolve.
In reporting information about future events in accordance with ESRS, the Group's Management is
required to prepare information about future events based on published assumptions about events
that may occur in the future and possible future activities of the Group. The actual outcome is likely
to be different, as future events often do not follow expectations.
In determining disclosures in the consolidated Sustainability Report, the Group's Management
interprets undefined legal and other terms. Undefined legal and other terms can be interpreted in
different ways, including the legal compliance of their interpretation, and are therefore subject to
uncertainties.

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BDO Croatia d.o.o.




Management's and Those Charged with Governance Responsibility for Sustainability Reporting
Management is responsible for the design and implementation of the process for identifying
information disclosed in the consolidated Sustainability Report in accordance with ESRS, and for
disclosing this Process in the section The process of assessing double materiality in the consolidated
Sustainability Report. This responsibility includes:
• Understanding the context in which the Group's activities and business relationships take
place and understanding the affected stakeholders;
• Identifying actual and potential impacts (both negative and positive) related to sustainability
issues, as well as risks and opportunities that affect or could reasonably be expected to affect
the Group's financial position, financial performance, cash flows, access to financing, or cost
of capital in the short, medium, or long term;
• Assessing the significance of identified impacts, risks, and opportunities related to
sustainability issues by selecting and applying appropriate materiality thresholds; and
• Making assumptions that are reasonable in the given circumstances.
Furthermore, Management is responsible for preparing the consolidated Sustainability Report in
accordance with the provisions of Articles 32 and 36 of the Accounting Act, including:
• Compliance with ESRS;
• Preparing disclosures in the section Information in accordance with Article 8 of Regulation
(EU) 2020/852 in accordance with the reporting requirements of Article 8 of Regulation (EU)
2020/852 (EU Taxonomy Regulation);
• Designing, implementing, and maintaining internal control systems that Management
determines are necessary to enable the preparation of the consolidated Sustainability Report
without material misstatements due to fraud or error; and
• Selecting and applying appropriate sustainability reporting methods and forming appropriate
estimates and judgments about individual sustainability disclosures that are reasonable in
the given circumstances.
Those charged with governance are responsible for overseeing the Group's sustainability reporting
process established by the Company.
Auditor's Responsibility
We conducted an engagement with limited assurance in accordance with the International Standard
on Assurance Engagements, Assurance Engagements Other than Audits or Reviews of Historical
Financial Information (ISAE) 3000 (revised), as prescribed by the provision of Article 37 of the
Accounting Act and the provisions of the contract for this engagement concluded with M SAN Grupa
d.o.o. on 10 October 2024. These standards require planning and performing the engagement to
express a conclusion on whether we are aware of any significant changes that need to be made to
the Subject of Examination to be in accordance with the Criteria, and to issue a report. The nature,
timing, and extent of selected procedures depend on our professional judgment, including the
assessment of the risk of material misstatement, whether due to fraud or error.





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BDO Croatia d.o.o.




Auditor's Responsibility (continued)
Our responsibility is to express a conclusion on the presentation of the Subject of Examination based
on the evidence we have obtained. Our responsibilities regarding the Subject of Examination, in
relation to the Process, include:
• Gaining an understanding of the Process but not for the purpose of expressing a conclusion
on the effectiveness of the Process, including the outcome of the Process;
• Considering whether the identified information meets the applicable ESRS disclosure
requirements; and
• Designing and performing procedures to assess the compliance of the Process with the
description of the Group's Process, as disclosed in the section The process of assessing double
materiality.
Our other responsibilities regarding the Subject of Examination include:
• Identifying disclosures where significant misstatements are likely to occur, whether due to
fraud or error;
• Designing and performing procedures aimed at disclosures in the consolidated Sustainability
Report where significant misstatements are likely to occur. The risk of not detecting a
significant 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 controls.
We believe that the evidence obtained is sufficient and appropriate to provide a basis for our
conclusion with limited assurance.
Our Independence and Quality Management
We comply with the independence and other ethical requirements established by the International
Code of Ethics for Professional Accountants, issued by the International Ethics Standards Board for
Accountants (IESBA), which sets out fundamental principles of integrity, objectivity, professional
competence and due care, confidentiality, and professional behavior. We possess the necessary
knowledge and experience to conduct this assurance engagement.
We also apply the International Standard on Quality Management 1, Quality Management for Firms
that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services
Engagements, and accordingly, maintain a comprehensive quality control system, including
documented policies and procedures regarding compliance with ethical requirements, professional
standards, and applicable legal and regulatory requirements.











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BDO Croatia d.o.o.




Description of Procedures Performed
Procedures performed in a limited assurance engagement differ in nature and timing from, and are
less extensive than, those performed in a reasonable assurance engagement. Consequently, the level
of assurance obtained in a limited assurance engagement is significantly lower than that which would
have been obtained had a reasonable assurance engagement been performed. Our procedures are
designed to obtain a limited level of assurance on which we can base our conclusion and do not
provide all the evidence that would be required to provide a reasonable level of assurance.
Although we considered the effectiveness of internal controls established by Management in
determining the nature and extent of our procedures, our assurance engagement was not designed
to provide a conclusion on internal controls. Our procedures did not include testing controls or
performing procedures relating to checking the aggregation or calculation of data within IT systems.
A limited assurance engagement consists of making inquiries, primarily to persons responsible for
preparing the consolidated Sustainability Report and related information, and applying analytical and
other appropriate procedures.
A limited assurance engagement includes performing procedures to obtain evidence about the
consolidated Sustainability Report.
The nature, timing, and extent of selected procedures depend on professional judgment, including
identifying disclosures where significant misstatements are likely to occur, whether due to fraud or
error, in the consolidated Sustainability Report.
In conducting our limited assurance engagement, we performed the following procedures regarding
the Process:
• Gaining an understanding of the Process:
• Making inquiries to understand the sources of information used by Management (e.g.,
stakeholder engagement, business plans, and strategic documents);
• Reviewing the Group's internal documentation on the Process; and
• Assessing the compliance of evidence obtained from our procedures on the Process
conducted by the Group with the description of the Process stated in the section The
process of assessing double materiality.

In conducting our limited assurance engagement on the consolidated Sustainability Report, we
performed the following procedures:
• Gaining an understanding of the Group's reporting process relevant to the preparation of the
consolidated Sustainability Report, including the consolidation process by gaining an
understanding of the Group's control environment, processes, and information systems
relevant to the preparation of the consolidated Sustainability Report, but not assessing the
design of specific control activities, obtaining evidence of their implementation, or testing
their operational effectiveness;
• Assessing whether significant information identified by the Process for identifying
information for disclosure in the consolidated Sustainability Report is included in the
consolidated Sustainability Report;
• Assessing the compliance of the structure and presentation of the consolidated Sustainability
Report in accordance with ESRS;
• Making inquiries of relevant employees and performing analytical procedures on selected
information from the consolidated Sustainability Report;
• Assessment of methods, assumptions, and data for developing significant estimates and
future information, and how these methods were applied.



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BDO Croatia d.o.o.




Description of Procedures Performed (continued)
• Understanding the process for identifying eligible and aligned economic activities under the
EU taxonomy regulation for transport, CAPEX, and OPEX, as well as the corresponding
disclosures in the consolidated Sustainability Report;
• Evaluation of the presentation and use of EU Taxonomy templates in accordance with the
relevant requirements; and
• Alignment and verification of consistency, to the extent applicable, between the listed
economic activities under the EU Taxonomy and the items stated in the consolidated financial
statements, including the disclosures mentioned in the related notes.

Qualified limited assurance conclusion
Based on the we have performed and the evidence we have obtained, except for the effects and the
possible effects of the matters described in the Basis for qualified conclusion section, nothing has
come to our attention that causes us to believe that the consolidated Sustainability Report of the
Group is not prepared, in all material respects, in accordance with the provisions of Articles 32 and
36 of the Accounting Act, including:
• Compliance with the European Sustainability Reporting Standards (ESRS), including the
compliance of the process conducted by the Group for identifying information disclosed in
the consolidated Sustainability Report ("Process") with the description provided in the section
The process of assessing double materiality; and
• Compliance of disclosures in the section Information in accordance with Article 8 of
Regulation (EU) 2020/852 in the consolidated Sustainability Report with the reporting
requirements of Article 8 of Regulation (EU) 2020/85 (EU Taxonomy Regulation).

Basis for qualified conclusion
The double materiality assessment process was not fully conducted in accordance with the
methodological requirements of the European Sustainability Reporting Standards, which may affect
the reliability of the identification of material topics. Furthermore, in relation to the environmental
topical standards (ESRS E1 to E5), disclosures were found not to be fully aligned with the requirements
of the standards, particularly regarding quantitative indicators and targets. Consequently, the
sustainability information is not fully presented in accordance with the requirements of the European
Sustainability Reporting Standards.

Other Matters
Comparative information included in the consolidated Sustainability Report of the Group for the
financial year from 1 January to 31 December 2023, was not subject to the assurance engagement.
Our conclusion is not modified with respect to this matter.

Zagreb, 30 April 2025
BDO Croatia d.o.o.
Radnička cesta 180
10000 Zagreb




Hrvoje Stipić, President of the
Management Board


Vedrana Stipić, Certified Auditor



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Zagreb, 30 April 2025

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 2024 is determined according to the text attached to this Decision.

II. The consolidated and separate Annual Financial Report for 2024 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 separate and consolidated annual 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 2024 is an integral part of the report referred to in item I of this Decision.

IV. Management Report is determined, together with the Statement on the Application of the Code of
Corporate Governance and Sustainability Report together with independent Auditor's Report which forms an
integral part of the report referred to in item I of this Decision.

V. Annual report of the Company for 2024, i.e. 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.

Irena Langer-Breznik
Žarko Kruljac
Vladimir Brkljača
President of Management Board
Member of Management Board
Member of Management Board










Alen Panić
Bruno Jozić
Member of Management Board
Member of Management Board

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Zagreb, 30 April 2025

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 Board of the Company at its meeting held on April 30, 2025 adopted the following

D E C I S I O N

I. Consent is given to the Annual Report of the Company for 2024 according to the text attached to this
Decision.
II. Consent is given to:
- consolidated and separate Annual Financial Report for 2024, 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 2024,
- Annual Report on the state of the Company and its affiliates for 2024 (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 2024 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.




Željko Menalo
President of the Supervisory Board



















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Zagreb, 30 April 2025

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 profit after tax for 2024 amounts to EUR 1,272,163.94.

II. The total realized profit for 2024, after taxation, in the amount of EUR 1,272,163.94, is allocated to the
retained earnings of the Company.

II. This Decision shall enter into force upon obtaining the consent of the Supervisory Board.





Irena Langer-Breznik
Žarko Kruljac
Vladimir Brkljača
President of Management Board
Member of Management Board
Member of Management Board










Alen Panić
Bruno Jozić
Member of Management Board
Member of Management Board

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Zagreb, 30 April 2025

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 30, 2024,
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 2024 amounts to EUR 1,272,163.94.

II. The total realized profit for 2024, after taxation, in the amount of EUR 1,272,163.94, is allocated to the
retained earnings of the Company.

II. This Decision shall enter into force on the day of its adoption.



Željko Menalo
President of the Supervisory Board




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M SAN GRUPA ANNUAL REPORT 2024. 246
M SAN GRUPA d.o.o.
Dugoselska ulica 5,
10372 Rugvica,
Republika Hrvatska
www.msan.hr