Zagreb, April 2025

The report in PDF format is an unofficial report, while the official version of the annual report, in accordance with the Capital Market Act, is available in a single electronic reporting format (ESEF – European Single Electronic Format).

This version of the Annual report is a translation from the original, which was prepared in Croatian language. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version takes precedence over this translation.

Content

	Page
Management report	3
Statement on the application of the Corporate Governance Code	29
Responsibilities of the Management board for the Annual report	35
Independent Auditors’ report to the shareholders of Zagrebačka burza d.d. Group	36
Financial statements
Consolidated Statement of comprehensive income	44
Consolidated Statement of the financial position	46
Consolidated Statement of changes in equity and reserves	48
Consolidated Statement of cash flows	50
Notes to the consolidated financial statements	52
Forms in accordance with the Ordinance on the Structure and Content of Stock Exchange Annual Financial Statements (Official Gazette 25/19, 155/22) (consolidated)	97
Decision on determining the annual financial statements	114
Decision on profit distribution	115

1                MANAGEMENT REPORT

1.1    Introduction

In 2024, the Zagreb Stock Exchange Group (hereinafter: the Group) recorded the following significant business events:

-        On January 25, the Exchange presented the Artificial Intelligence Research project (AIR) and hosted a round table themed “Fintech: technology in service of capital”. The AIR project has been financed by the Taiwan Business EBRD Technical Cooperation fund, with the goal of creating an advanced solution for assessing companies based on artificial intelligence. The project aims to create a more streamlined access to research on listed companies on the exchanges in the region, allowing the tool to be used in neighboring countries after the completion of the pilot program by the end of 2024.

-        On February 7, 2024, the Ljubljana Stock Exchange organized a webinar titled “Annual overview of the events on the Stock Exchange”.

-        On February 9, 2024, the Zagreb Stock Exchange Academy hosted a free online seminar themed “Get to know ETFs” which gathered more than 230 attendees from Croatia and countries from the region: Slovenia, N. Macedonia, Montenegro, Serbia and Bosnia and Herzegovina, with participants joining from over 50 cities. The goal of the seminar was to familiarize the public with ETFs, and answer questions of advantages and risks related to ETF investing. The ZSE Academy intends to continue with similar activities related to capital market education with the goal of bringing select themes closer to interested participants.

-        On February 28, 2024, the Exchange co-organized a free seminar on gender equality and the financial markets with the United Nations Sustainable Stock Exchanges Initiative, in which ZSE participates as a member. Gender equality is a complex theme, outlined as one of the 17 UN Sustainable Development Goals (Goal 5), and its increasing importance is noted on the capital markets as well, especially considering new regulatory demands promoting positive change in that regard and increasing reporting demands from investors related to corporate social responsibility.  The seminar has been hosted with the aim of raising awareness on sustainable finance through understanding the financial implications of gender inequality, highlighting improvement of corporate reporting and literacy on gender equality and identifying market opportunities created by these improvements.

-        On February 28, 2024, the Exchange hosted representatives of public institutions and the financial sector on a task force meeting as part of the Interreg MESTRI-CE project. The meeting agenda referred to financing models for sustainable buildings, with the goal of defining existing opportunities and barriers, as well as priorities and recommendations to increase investments in energy efficiency.

-        On March 8, 2024, the Exchange organized the event "Ring for Gender Equality" to mark International Women's Day by opening trade in symbolic bells to emphasize the need to include more women in the world of work and their advancement in the business world.

-        From March 18 - 22, 2024, the ZSE Academy participated in the Global Money Week events. The Global Money Week is the leading global event for raising awareness of the importance of financial literacy and inclusiveness of children and young adults. The activities related to this initiative gathered over 60 million children and young adults in over 176 countries so far. Money Week activities are focused on formal and informal education of young adults to help them develop knowledge, skills, perspective and habits necessary to make healthy financial decisions.

-        On March 19, 2024, the Ljubljana Stock Exchange organized an educational webinar “Let’s go to the Stock Exchange” to mark the Global and European Money Week events.

-        On March 21, 2024, the Ljubljana Stock Exchange organized a webinar titled “Slovenian Listed Companies Online”.

-        On April 29, 2024, the Zagreb Stock Exchange Academy hosted a free online seminar themed “Get to know the DORA regulation” which gathered more than 90 attendees joining from over 30 cities. The goal of the seminar was to inform and prepare the participants for the upcoming Digital Operational Resilience Act for the financial sector, with an overview of key terms, regulation framework characteristics and implementation deadlines.

-        On May 14 and 15, 2024, the Ljubljana Stock Exchange held the 41^st Financial Conference in Portorož.

-        On May 22, 2024, the Ljubljana Stock Exchange hosted an event titled “Trade on the Stock Exchange” with the aim of bringing the Slovenian capital market closer to the general public.

-        On May 23, 2024, the Zagreb Stock Exchange published an updated Trading Manual which refers to changes in the minimal size of block-transactions for bonds, in accordance with the MiFID II Directive. The new Trading manual has entered into force on June 1, 2024.

-        On June 4 and 5, 2024, the "CEE Investment Opportunities" investment conference of the Zagreb and Ljubljana stock exchanges was held in Zagreb. The event has traditionally taken place every spring in Zagreb since 2014, and was conceived as a meeting place for Slovenian, Croatian and international investors and eminent issuers from the Zagreb and Ljubljana Stock Exchanges, with the aim of enabling direct contact through a series of individual meetings in one place between companies and investors. In addition to Croatian and Slovenian companies, a company listed on the Bucharest Stock Exchange participated in this year's event.

-        On June 6, 2024, the Ljubljana Stock Exchange’s Standard market listed shares of issuer Relax d.d.

-        On June 11, 2024, the Zagreb Stock Exchange General Assembly adopted the Resolution on the use of profits for 2023, which included dividend payments to shareholders of the Exchange in the amount of EUR 0.05 per share. 

-        On June 19, 2024, the 15^th annual training for companies whose securities are listed on the regulated market was held, co-organized by The Croatian Financial Services Supervisory Agency, the Central Clearing Depository Company and the Zagreb Stock Exchange. In addition to its educational character, the aim of this event is to encourage open dialogue among participants in the capital market so that topics of interest to all market participants can be addressed directly.

-        On September 5, 2024, the Zagreb Stock Exchange Academy hosted a free online seminar themed “Get to know the financial markets” which gathered more than 70 attendees. The goal of the seminar was to establish the basic information required for initial investments, with an overview of the types of financial markets and the advantages and risks of investing.

-        On September 5, 2024, the Ljubljana Stock Exchange hosted an event titled “Slovenian Listed Companies Online” where issuers from the Prime market of Ljubljana Stock Exchange presented their financial results for the first half of 2024. The event gathered more than 200 participants.

-        On September 11, 2024, the Zagreb Stock Exchange hosted the PrimePlus investment webcast, which gathered 40 Croatian and international investors and analysts. Issuers from the Prime and Official segments of Zagreb Stock Exchange presented their financial results.

-        On September 12, 2024, the Exchange hosted representatives of public institutions and the financial sector on a task force meeting as part of the Interreg MESTRI-CE project. The meeting agenda referred to renovating public buildings, establishing an efficient national energy infrastructure and recommendations to increase investments in energy efficiency.

-        From October 9 – 10, 2024, the Ljubljana Stock Exchange hosted experts from the financial industry on a two-day conference titled the “Finance Festival”. The conference gathered over 450 participants who has the opportunity to get to know the financial market in Slovenia and gather insights on the latest trends on the capital market.

-        From October 16 – 18, 2024, the traditional regional financial conference “Challenge of Change” took place, organized by the Croatian Association of Pension Fund Management and Pension Insurance Companies (UMFO) and the Zagreb Stock Exchange. The conference gathered more than 500 participants from the domestic and international financial community.

-        On November 13, 2024, a meeting of representatives of seven regional stock exchanges and the European Bank for Reconstruction and Development was held in Bratislava. This occasion marked the signing of a Memorandum of understanding between the participants, bringing forward their intent of increasing cooperation in further development of the capital markets in the region.

-        On November 26, 2024, the "CEE Investment Opportunities" investment conference of the Zagreb and Ljubljana stock exchanges was held in Ljubljana. The main goal of the event is enhancing visibility of Slovenian, Croatian and other regional companies to local and international investors. The conference gathered over 35 analysts and investors from Slovenia, Croatia, Bulgaria, Sweden and Estonia, who held a total of 200 meetings. Zagreb and Ljubljana Stock Exchanges will continue with individual and joint efforts towards increasing investor interest on the regional markets.

-        On November 26, 2024, the Ljubljana Stock Exchange Awards were presented.

-        On December 16, 2024, the 13^th Zagreb Stock Exchange Awards were presented. The prestigious event offered an opportunity to provide recognition to the key market participants who contributed to the overall development and stability of the Croatian capital market.

-        On December 16, 2024, the Croatian financial services agency (HANFA) and Zagreb Stock Exchange signed a decision adopting the new Code of Corporate Governance, which came into force on January 1, 2025.

-        From the beggining of 2024, the Regulated market of Zagreb Stock Exchange listed seven treasury bills and two bonds of the Ministry of finance of the Republic of Croatia, InterCapital EUR Romania Govt Bond 5 UCITS ETFs, and bonds of issuer JADRAN-GALENSKI LABORATORIJ D.D. Issuers HELIOS FAROS D.D. and BOSQAR D.D. listed addional tranches of shares on the Regulated market. At the same time, the Progress market listed two tranches of bonds of issuer GLUCODENT D.D.

-        From the beggining of 2024, the Regulated Market of Zagreb Stock Exchange delisted a total of ten treasury bills and two bonds of the Ministry of finance of the Republic of Croatia, one bond of issuer JADRAN-GALENSKI LABORATORIJ D.D., and shares of issuers SUNCE HOTELI D.D., VIRO TVRONICA ŠEĆERA D.D., BIOKALNIK-IPA D.D., VARTEKS D.D., HOTELI HALUDOVO MALINSKA D.D., SOLARIS D.D., ZVEČEVO D.D., HTP OREBIĆ D.D. and HTP KORČULA D.D. In the same period, the Progress market of Zagreb Stock Exchange delisted one bond of issuer ESCONT PARTNERS D.O.O.

1.2    Group’s Key Performance Indicators in 2024

In 2024 operating revenues increased by +11% compared to 2023, and amounted to EUR 3,987 thousand. The increase in operating revenues was primarily caused by increased securities turnover on the year-level. Despite fewer new listings compared to 2023, stronger market activity enabled the increase in sales revenues. Other operating income increased by EUR +87 thousand, or +7%.

Figure 1: Operating revenue, profit for the year and EBITDA

In 2024, operating expenses increased by about +9% compared to 2023. The Group concluded 2024 with an operating profit of EUR 59 thousand, an impressive net financial result of EUR 104 thousand and a net profit of EUR 197 thousand. Operating profit before depreciation in 2024 amounts to a EUR 384 thousand, which represents an increase of +28% compared to 2023.

Table 1: Main business indicators

1.2.1    Trading and price of ZB-R-A stock of the issuer Zagreb Stock Exchange, Inc.

Zagreb Stock Exchange shares were listed on the regulated market (Official market segment) in August 2016. The Company share capital amounts to EUR 3,076,315 and is divided to 2,317,850 ordinary shares. As of December 31, 2024, the Company owns a total of 8,369 of own shares, which make up for 0.3611% of its share capital.

From January 1 to December 31 2024, Zagreb Stock Exchange’s share reached a total orderbook turnover of EUR 64,896.38.

Table 2: ZB-R-A share in 2024

The ZB-R-A stock price reached its peak on July 24, 2024 in the amount of EUR 3.50, while it fell to its lowest level on April 26, 2024, when it was priced at EUR 2.36.

Figure 2: Turnover and average price ZB-R-A stock in 2024

1.2.2             Ownership structure of the issuer Zagreb Stock Exchange

A total of 197 shareholders were noted in the ownership structure of the Zagreb Stock Exchange on 31 December 2024.

Figure 3: Ownership structure on 31 December 2024

1.3    Financial results and business operations of the Group in 2024

In 2024, the Group generated a total of EUR 3,987 thousand of operating revenues, which is EUR +382 thousand or +11% more than in the previous year when they amounted to EUR 3,605 thousand. Compared to 2023, sales revenues increased from EUR 2,267 to EUR 2,562 thousand, i.e., by a EUR +294 thousand or +13%. The increase in sales revenues is primarily the result of an increase in revenues from trading commissions and membership fees, which, following a higher securities turnover compared to 2023, by the end of 2024 reached EUR 1,343 thousand (EUR +317 thousand or +31% more compared to 2023 when they amounted to EUR 1,026 thousand). A smaller number of newly listed securities than in the previous year resulted in a decrease in income from quotation fees, which in 2024 amounted to EUR 148 thousand, which is EUR -8 thousand or -5% less than in 2023 when they amounted to EUR 156 thousand. In 2024, income from quotation maintenance amounted to EUR 1,071 thousand, which represents a decrease by EUR -15 thousand or -1.3% compared to 2023 when they amounted to EUR 1,086 thousand. Compared to 2023, other operating income increased by EUR +87 thousand or +7%, i.e., from EUR 1,338 to EUR 1,425 thousand. The increase in other operating income is due to the growth of revenue from the income from the supply of information which amounted to EUR 930 thousand (EUR +28 thousand or +3%), and other income which amounting to EUR 113 thousand (EUR +64 thousand or +132%). Compared to 2023, revenues from education decreased by EUR -9 thousand or -5% and amounted to EUR 197 thousand, while income from assigning and administering LEIs amounted to EUR 76 thousand (EUR -3 thousand or -4.2%).

Influenced by the general increase in prices, in 2024 the Group continued recording an increase in total operating expenses. Total operating expenses in 2024 increased by a EUR +315 thousand (+9%) compared to 2023 and amounted to EUR 3,928 thousand (2023: EUR 3,613 thousand). The increase in operating expenses was mostly due to the increase in staff costs (EUR +178 thousand or +10%, i.e., from EUR 1,774 to EUR 1,952 thousand). Other costs increased by EUR +121 thousand or +8% (from EUR 1,531 to EUR 1,651 thousand).

The Group's operating profit in 2024 amounted to EUR 231 thousand, while in the previous year the operating profit amounted to EUR 77 thousand (EUR +154 thousand or +200%). The net financial result in 2024 amounts to EUR 104 thousand (an increase of EUR +19 thousand compared to 2023), and participation in joint venture and participating interest amounts to EUR 68, while in 2023 it amounted to EUR -203.

Considering all of the above, the Group’s net profit in 2024 amounts to EUR 197 thousand, which is EUR +133 thousand (+209%) more than in 2023, when the Group's net profit amounted to EUR 64 thousand. Operating profit before interest, taxes, depreciation and amortization is positive and in 2024 amounts to EUR 384 thousand, i.e., EUR +83 thousand more than in 2023.

In 2024, in order to preserve the value of its assets, the Group invested its available cash in bond funds and bank deposits. At the end of 2024, the Group's free assets amounted to EUR 3,522 thousand (units in investment funds, bonds, promissory notes, bank deposits and cash in the bank).

1.4    Business analysis

1.4.1    Total operating revenues

Total operating revenues in 2024 amount to EUR 3,987 thousand and are higher by EUR +382 thousand or +11% compared to 2023 when they amounted to EUR 3,605 thousand. The largest increase in revenue was recorded in revenue from trading commissions (EUR +317 thousand or +31%), and the largest decrease is in revenue from quotation fees (EUR -8 thousand or -5%).

Figure 4: Operating revenue

Following a higher overall securities turnover compared to 2023, in 2024, income from trading commissions and membership fees increased their share in operating revenues (34%). At the same time, other income (7%) also recorded a larger share in total operating revenues.

Figure 5: Operating revenue structure

Trading commissions and membership fees

In 2024, EUR 1,343 thousand was generated on the basis of trading commissions and membership fees, which is EUR +317 thousand or +31% more compared to 2023, when they amounted to EUR 1,026 thousand. At the end of 2024, the Zagreb Stock Exchange had a total of 12 members, the same number as last year, and the Ljubljana Stock Exchange had 8 members, one member less than in 2023. Income from membership fees is higher by EUR +2 thousand or +3% and amount to EUR 67 thousand.

Income from quotation maintenance

Income from quotation maintenance decreased from EUR 1,086 to EUR 1,071 thousand (EUR -15 thousand or -1%). At the end of 2024, 78 shares (2023: 87), 31 bonds (2023: 31), 4 treasury bills (2023: 7) and 5 ETFs (2023: 4) were listed on the Regulated Market of the Zagreb Stock Exchange, while 18 shares (2023: 23), 26 bonds (2023: 28), 0 commercial papers (2023: 1), 14 treasury bills (2023: 13), and 4 structured products (2023: 2) were listed on the Ljubljana Stock Exchange.

Income from quotation fees

In 2024, income from quotation fees decreased from EUR 156 to EUR 148 thousand (EUR -8 thousand or -5%) compared to the previous year. During 2024, seven treasury bills, five bonds and one ETFs were listed on the Zagreb Stock Exchange, while in 2023, sixteen treasury bills, four bonds and two ETFs were listed. On the Ljubljana Stock Exchange two shares, five bonds and nine treasury bills were listed in 2024, while in 2023, three bonds, twenty-seven treasury bills and one commercial paper were listed.

Figure 6: Sales revenue structure

Other operating income

Other operating income increased by EUR +87 thousand or +6.5% compared to 2023 (from EUR 1,338 to EUR 1,425 thousand) due to the growth of revenues from from the supply of information that amount to EUR 930 thousand (EUR +28 thousand or +3%) and other income that increased by EUR +64 thousand or +132% and amount to EUR 113 thousand. Revenues from the supply of information have the largest share in other operating income (65%), which also includes income from real-time data distribution rights paid by members.

Figure 7: Other operating income structure

1.4.2    Total operating expenses

Total operating expenses in 2024 amounted to EUR 3,928 thousand, which is an increase of EUR +315 thousand or +9% (in 2023 they amounted to EUR 3,613 thousand).

Figure 8: Operating expenses

As previously mentioned, the growth of operating expenses in 2024 is mainly related to the general price increases as a result of increased inflation rates, which in turn, reflected on the increase in other costs (+8%), and staff costs (+10%). In 2024, staff costs increased from EUR 1,774 to EUR 1,952 thousand (EUR +178 thousand), and include necessary wage corrections of Group employees. Depreciation increased by EUR +17 thousand or +5.4% (from EUR 308 to EUR 325 thousand).

Figure 9: Other operating expenses structure

Other operating expenses increased from EUR 1,531 to EUR 1,651 thousand (EUR +120 thousand or +8%) and contributed to the increase in total operating expenses. Among them, the most significant is the increase in other costs from EUR 179 to EUR 235 thousand (EUR +56 thousand or +31%). Regulator fees recorded an increase of EUR +28 thousand or +19% compared to 2023 and amounted to EUR 179 thousand.  Costs of software and licensing increased by EUR +20 thousand or +3% and amounted to EUR 684 thousand, reserving the largest share in other operating expenses (41%) in 2024.

1.4.3    Net profit for the period

In 2024, the net profit for the period amounted to EUR 197 thousand; an increase of EUR +133 thousand or +209% compared to the previous year when the net profit amounted to EUR 64 thousand. Besides the increase in the income from trading commissions and memberships (+31%), which traditionally accounts for about 52% of sales revenue and about 34% of the total revenues of the Group, growth was recorded in other operating income (+6.5%). The Group successfully increased revenues from other bases, where it is necessary to highlight revenues from the supply of information (+3%), revenues from OTC service (+2%) and other income (+132%).

Operating profit before interest, taxes, depreciation and amortization increased compared to the previous year (EUR +83 thousand) and in 2024 amounted to EUR 384 thousand.

Figure 10: Net profit for the period and EBITDA

1.4.4    The Group’s Assets

As of December 31, 2024, the Group's total assets amounted to EUR 7,370 thousand, which is +3% more than on the last day of 2023.

Table 3: Balance Sheet on 31 December

The structure of the balance sheet has changed compared to 2024. On the liabilities side the share of equity and reserves decreased compared to the previous year, while on assets side the share of non-current assets reduced, while the share of current assets increased in the total assets and liabilities structure of the Group.

Figure 11: Assets and Liabilities Structure

1.5    Significant events after the end of the financial year

In the first quarter of 2025, the Group continued its successful business operations from the end of the previous year. Due to the financial results achieved in 2024, the successful beginning of 2025, and the projections for the remainder of 2025, the Management Board believes that the unlimited continuation of business is not threatened.

The Group, like all other business entities, is prone to risks related to the increase of prices of goods and services, and as such is aware of the increased risks caused by inflation which continues in the future period, although current economic indicators and forecasts point to the inflation rate slowing down significantly. The long-term effects may affect business volume, cash flows and profitability.

Regardless of the aforementioned, on the date of publishing of these financial reports, the Group continues to meet all of its obligations, is highly capitalized and has significant free assets at its disposal, and therefore, applies the principle of indefinite operations as an accounting basis for the preparation of financial statements.

Apart from the above, no other business events or transactions have occurred after the balance sheet date that would have a material impact on the financial statements on or for the period then ended or are of such importance to the Group's operations that it would require disclosure in the management report.

1.6    Expected development of the Group

In 2025, the Group will continue to focus on raising Corporate Governance and reporting standards on the regulated market. The Group will also focus on greater promotion of existing issuers, with a focus on the Prime Market. If applicable by regulatory framework in the future, Zagreb Stock Exchange intends to update the existing market segmentation in order to highlight ESG listings, as well as tourism shares.

In 2025, The Group will focus on preparing the issuers for non-financial reporting requirements, which will come into force for all listed companies on the Zagreb and Ljubljana Stock Exchanges over the period of next two years.

The Group will continue to develop internal IT services that will be used by the Zagreb and Ljubljana Stock Exchanges, and thus further reduce the need for external suppliers.

In 2025, The Group will press on with previously initiated projects, placing the greatest emphasis on the projects related to the implementation of new technologies to market activities, completion of the AIR project which aims to provide analyst reports for issuers, and education of market participants regarding green bond listings withing the framework of the MESTRI CE project which is financed by the European union.

The Group will continue efforts in promoting ESG listings and issuer activities.

The Group is involved in a project supported by regional exchanges, where integration models are being considered, with the goal of facilitating investor access to local markets.

During 2025, the Group will also focus on compliance activities for the Digital Operational Resilience Act (DORA) regulation which defines detailed cyber security and risk management requirements for entities in the financial sector. DORA has entered into force in January, 2025.

Zagreb Stock Exchange intends to provide support and cooperate with SKDD CCP d.d. in enabling securities lending and short-selling on the Zagreb Stock Exchange.

Zagreb Stock Exchange is the holder or co-holder of several activities planned within the Strategic Framework for the Development of the Capital Market in the Republic of Croatia and the Action Plan, and after its adoption, it will direct its activities toward achieving these goals.

1.7    Research & Development activities

The Group has pressed on with continuous efforts at developing and improving its own service offering and at expanding service provision to the Slovenian market as well.

The ZSE IT department has been working on updates for the Ljubljana Stock Exchange’s webpages, which will allow users and visitors a more streamlined view of relevant information and services related to the capital market. Zagreb Stock Exchange thus further strengthened its position as the leading trading service provider for the entire Zagreb Stock Exchange Group, actively reducing costs and dependence on external service providers.

By the end of 2024, he Group successfully completed the implementation of two new trading system releases and other infrastructure optimization activities.

1.8    Information on repurchase of own shares

On December 31, 2024, the Zagreb Stock Exchange owns a total of 8,369 of own shares, which make up for 0.3611% of the Exchange’s total issued share capital.

Zagreb Stock Exchange Group

Figure 12: Zagreb Stock Exchange Group

On 30 December 2015, the Zagreb Stock Exchange took over a 100% participation in company Ljubljana Stock Exchange Inc. The issued share capital of Ljubljana Stock Exchange on 31 December 2024 is EUR 1,401,000, and the Zagreb Stock Exchange participates with 100%. Ivana Gažić, President of the Management Board of the Zagreb Stock Exchange, is the President of the Supervisory Board of the Ljubljana Stock Exchange, and the members of the Supervisory Board as of 31 December 2024 are Tomislav Gračan, Member of the Management Board of the Zagreb Stock Exchange, and Matko Maravić, Member of the Supervisory Board of the Zagreb Stock Exchange.

SEE Link LLC., is a company seated in Skopje established by the Bulgarian, Macedonian and Zagreb Stock Exchanges in May 2014 with the aim of setting up the regional infrastructure for trading in securities listed in those three exchanges, holding equal equity participations. The issued share capital of SEE Link is 80,000 EUR and Zagreb Stock Exchange participates with 33.33%. Manyu Moravenov, Executive Director of the Bulgarian Stock Exchange, is the President of the Supervisory Board of SEE Link. Ivana Gažić, President of the Management Board of the Zagreb Stock Exchange, and Ivan Steriev, President of the Management Board of the Macedonian Stock Exchange, are members of the Supervisory Board of SEE Link. Macedonian Stock Exchange, Inc. holds additional 33.33% of the shares of SEE Link which the total share of the Group amounts to 43.33%.

Funderbeam South-East Europe d.o.o. is a company that the Zagreb Stock Exchange founded in 2016 together with company Funderbeam Ventures OÜ. The issued share capital of the company is EUR 32,384.37 and the Zagreb Stock Exchage participates with 30%.

Macedonian Stock Exchange, Inc., a company seated in Skopje. The issued share capital of Macedonian Stock Exchange amounts to EUR 1,695,029.03, in which the Zagreb Stock Exchange, Inc. holds a total of 837 shares, i.e., 29.98% of the issued share capital. Ivana Gažić, president of the Management Board of Zagreb Stock Exchange, is a member of the Supervisory Board of the Macedonian Stock Exchange.

Adria Digital Exchange LLC., a company seated in Zagreb, founded in 2023 with the goal of detailed analysis and development of potential for trading and managing of virtual assets. The share capital of the company is EUR 215,000, in which the Zagreb Stock Exchange, Inc. participates with 24%.

Central Depository & Clearing Company, Inc., seated in Zagreb. The issued share capital of the company amounts to EUR 12,545,620, in which the Zagreb Stock Exchange, Inc. holds a total of 1,259 shares, i.e., 1.27 % of the issued share capital.

EuroCPT B.V., a company seated in Amsterdam, founded in 2023 with the goal of supplying consolidated trading data in the European Union. The share capital of the company is EUR 99.53, in which the Zagreb Stock Exchange, Inc. participates with 0.05%.

1.9    Financial instruments

The Group is fully funded by its own capital. The financial instruments the companies in the Group invest in are investment funds (money market and bond funds) and deposits (a vista and fixed-term deposits).

1.10    Business operation risks

The Group’s Business operation risks are detailed in the notes to the financial statements (Note 22).

1.11    Zagreb and Ljubljana Stock Exchanges in 2024

1.11.1    Zagreb Stock Exchange in 2024

In 2024, the orderbook turnover amounted to EUR 354 million, +10% more than in 2023, while the orderbook turnover reached an impressive EUR 459 million (+24% more than in 2023). From the total orderbook turnover in 2024, shares turnover amounted to EUR 299 million which is an increase of +10% (2023: EUR 267 million), bond turnover amounted to EUR 29 million decreasing by -27% (2023: EUR 39 million), while ETF turnover increased by +62% and amounted to EUR 26 million (2023: EUR 16 million). The equity block turnover amounted to EUR 91.5 million which is an increase by +143% compared to 2023 (2023: EUR 38 million). Debt block turnover also increased, and amounted to EUR 13.5 million (2023: EUR 12 million). Money market instruments turnover amounted to nearly EUR 5 million in 2024, while it was not recorded in previous years.  

Table 4: ZSE securities turnover

Figure 13: ZSE turnover by type of security

The market value measured by market capitalization as of 31 December 2024 has increased by EUR +9.5 billion compared to the end of 2023. The equity market capitalization increased by EUR +6 billion or +26.3% in total, with the market capitalization of the Prime Market increasing by +17%, the Official Market by +11.5%, and the Regular Market by +41%. The market capitalization of bonds increased by +4.3%, while the market capitalization of ETFs increased by an impressive +211%. The market capitalization of money market instruments on the last day of the reporting period amounted to EUR 2.7 billion.

		2023	2024	change	2023	2024	change
		Market Capitalization (EUR)			Number of listed securities
Shares		22,921,642,696	28,948,929,132	26.3%	87	78	-10.3%
Prime market		4,872,990,193	5,708,623,214	17.1%	6	6	0.0%
Official market		7,560,463,836	8,428,132,466	11.5%	20	18	-10.0%
Regular market		10,488,188,667	14,812,173,452	41.2%	61	54	-11.5%
Bonds		17,879,846,903	18,645,875,866	4.3%	31	31	0.0%
Money market instruments		/	2,680,910,250	/	7	4	-42.9%
ETFs	23,581,647		73,359,124	211.1%	4	5	25.0%
TOTAL		40,825,071,246	50,349,074,371	23.3%	129	118	-8.5%

Table 5: Market Capitalization and number of listed securities

Compared to 31 December 2023, at the end of 2024, a total of seven shares less were listed on the Regular Market, two shares less were listed on the Official Market, while the number of shares listed on the Prime Market remained unchanged.

Figure 14: Equity Market Capitalization and number of stocks listed

Nearly all equity indices recorded growth compared to 2023. The strongest increase was that of CROBEXindustrija (+39%), followed by CROBEX10tr (+33%) and CROBEXtr (+30%). The regional index ADRIAprime increased by a significant +28%, while the bond index CROBIStr increased by +6.5%, and CROBIS by +3.9%.

Table 6: Indices - value and turnover

The most traded share in 2024 was that of Hrvatski telekom d.d., followed closely by Končar d.d., Podravka d.d., Ericsson Nikola Tesla d.d., and Končar – Distributivni i Specijalni Transformatori d.d. The first five most liquid shares make up of 45.7% of total share turnover, and 29% of the total orderbook turnover of Zagreb Stock Exchange in 2024.

Table 7: Turnover of the 5 most liquid shares in 2024

At the end of 2024, the Exchange had 12 members, and the top five members of the Exchange with the highest turnover in 2024 are listed in the following table:

Table 8: Top 5 members of the Stock Exchange in 2024

The turnover of the first five members of the Exchange accounts for 74% of the total turnover.

1.11.2    Ljubljana Stock Exchange in 2024

The total securities turnover on the Ljubljana Stock Exchange in 2024 amounted to EUR 505.6 million, which is an increase of +53% compared to 2023. The equity turnover within the orderbook is higher by +58% and amounted to EUR 464.8 million. Bonds turnover in 2024 amounted to EUR 6.6 million (2023: EUR 1.2 million), while structured products turnover amounted to EUR 584 thousand (2023: 358 thousand). T-bills turnover in 2024 recorded a significant increase and amounted to EUR 13 million, while in the same time in 2023 it amounted to EUR 8.2 million. In 2024, the equity block turnover amounted to EUR 40.7 million, which is an increase of +11.7% compared to the same period in 2023 (2023: EUR 36 million), while the debt turnover was not recorded in both observed periods.

Table 9: Ljubljana Stock Exchange Overview

Figure 15: LJSE turnover by type of security

Compared to December 31, 2023, the equity market capitalization has increased by +30% and on the last day of the fourth quarter of 2024 amounted to EUR 11.9 billion. From the last value on December 31, 2023, the SBITOP index increased by +33% and amounts to 1.666,60, while the SBITR index increased by an impressive +42%, ending December 2024, at a value of 2.394,06.

Figure 16: Equity Market capitalization and number of shares listed on 31 December

1.11.3    Support for members

Zagreb and Ljubljana Stock Exchanges provide regular support to members regarding the exchanges’ trading process. This includes both configuring and maintenance of the trading system itself, and the preparation of various support applications used for trading. In that respect, the Exchanges actively communicate with members during the implementation of new trading system functionalities and other changes that might reflect on the members’ business. The focus is especially on own member-side applications, developed using the FIX (a Vienna Stock Exchange version – CEESEG FIX) protocol interface. In cooperation with the Vienna Stock Exchange, the Exchanges provide support to members when developing their own applications and conduct initial certification of their software solutions.

Zagreb Stock Exchange, as the most important service provider to Ljubljana Stock Exchange, also provides other forms of technical support for both Exchanges’ members, and has developed a dedicated collaboration website (http://it.zse.hr) for users to submit their support requests directly to the Information and Technology Development Department.

1.11.4    Support for issuers

Zagreb and Ljubljana Stock Exchanges provide advisory and expert support to all issuers listed on the Regulated or Progress market, while working closely with issuers regarding compliance with the provisions of the Capital Market Act, EU Directive 596/2014, the Rules of the Exchange and other regulations.

Zagreb Stock Exchange also monitors issuers and securities listed on the Regulated or the Progress market in order to ensure that the issuers and their listed securities meet all necessary obligations provided by the Rules of the Exchange.

Every year, the Zagreb Stock Exchange organizes a joint education for the issuers on the Regulated Market in co-operation with the Croatian Financial Services Supervisory Agency and the Central Depository and Clearing Company. Participation in the education is free, and is highly recommended to all issuers since it covers trending topics on the capital market.

Zagreb Stock Exchange licenses authorized advisors on the Progress Market and monitors the entire application process for trade listing on the Progress Market. It also handles trade supervision and ensures that issuers meet their obligations towards the Exchange after they have listed on the Progress Market.

The Zagreb Stock Exchange strategy, among other things, includes continuous education of issuers in order to increase the level of transparency and Corporate Governance in all market segments, especially following the significant change to the Exchange Rules in December 2019, regarding the supervising of issuers in terms of fulfilling post-listing obligations. It is estimated that the changes to the Rules played a significant role in the raising the quality and timeliness of reporting on the Regulated market.

1.12    Internal controls and risk management system

Zagreb Stock Exchange internal controls system consists of procedures and processes for monitoring of business efficiency, financial reports reliability and legal compliance.

All employees, including the Management and Supervisory Board, are included in internal controls system enforcement.

The Exchanges enforce the internal controls system through two independent control functions: compliance with the relevant regulations function and the internal audit function.

These control functions process and monitor the work of all organizational units, company activities and support services in their internal documents.

Risk management is a set of procedures and methods for determining, measuring, assessing, controlling and monitoring risks and also reporting on the risks to which the Exchange is or might be exposed in its operations.

Both Exchanges have adopted a number of procedures related to risk management, including but not limited to: Risk management policy, Conflict of interest policy, Information system risk management, Self-assessment procedure for compliance with Art. 48. MIFID II, The procedure for admission to membership and termination of membership, which contains the annual evaluation of the members of the Exchange, Service agreements management procedure, Crisis management procedure etc.

The internal auditors of the Group are:

−       Antares revizija d.o.o. for Zagreb Stock Exchange

−       Arem d.o.o. and Vezjak svetovanje d.o.o. for Ljubljana Stock Exchange

Internal auditors for the Group compiles the following documents:

−       Strategic internal audit plan (for Zagreb Stock Exchange),

−       Mid-term plan (for Ljubljana Stock Exchange)

−       Annual internal audit plan (for both Exchanges).

In order to successfully manage risks that affect completion of the Group’s objectives, the Group assesses risks by identifying and analysing them.

Considering the Group’s determined objectives and defined core processes, the Group has identified and determined risks that could influence the Group’s business processes. The list of risks does not encompass all risks, but only those on a higher level. Other, more detailed risks (lower level risks) are identified during the internal audit of business processes.

The risks are grouped by the Group’s organizational units that perform specific business processes within the company and by other risks that are connected with the Group’s business in general.

Considering the previously defined Group’s core business processes and determined risks, the Group has adopted Risk assessment with regard to their impact on business processes.

Risk assessment encompasses every process’s inherent risk and during the assessment, the very nature of those processes and best practice were taken into consideration.

 

Based on the risk assessment results, main areas that will be covered by internal audit procedures and measures that will prevent the occurrence of risky events have been established.

Risk monitoring is not separated and entrusted to Group’s independent organizational unit, but to one or more Group’s departments, depending on the type of risk. Therefore, every employee of the Group is included in the Group’s risk management.

Each organizational unit, depending on the identified risks and risk management system, is in charge of risk monitoring and cooperation with other organizational units, especially with the Management Board who makes decisions on individual risk management and its control.

By the Digital Operational Resilience Act (DORA) entering into force, the Company executed significant updates to the existing risk policies and internal procedures, ensuring compliance with the new regulatory framework.

In addition, two mutually independent control functions are involved in Group’s risk management system: compliance with relevant regulations function and the internal audit function performed by an external independent company.

2                Statement on the application of the Corporate Governance Code

Pursuant to provision of Article 272, paragraph, in conjunction with provision of Article 250a, paragraph 4 of the Companies Act (Official Gazette no. 111/93, 34/99, 52/00, 118/03, 107/07, 148/08, 137/09, 125/11, 152/11, 111/12, 68/13, 110/15, 40/19, 34/22, 114/22, 18/23, 130/23 and 136/24; hereinafter: CA) and provision of Article 25 of the Accounting Act (Official Gazette no. 85/24 and 145/24, hereinafter: AA), the Management Board of company ZAGREB STOCK EXCHANGE Inc., Zagreb, Ivana Lučića 2a (hereinafter: the Company), on 28 April 2025, issued the following 

REPORT

on the application of the Corporate Governance Code

1.       The Company implements the Corporate Governance Code prescribed by the Croatian Financial Services Supervisory Agency and the Zagreb Stock Exchange Inc. Zagreb. The Code is published in Zagreb Stock Exchange website, www.zse.hr.

2.       In financial year 2024, the Company essentially complied with and implemented recommendations established by the Code, publishing all information as envisaged by the positive regulations as well as information that are in the interest of Company’s shareholders. Detailed explanations regarding minor deviations from the recommendations of the Code are presented by the Company in the Annual Questionnaire that is provided, and published on the Company website.

3.       In accordance with Code requests, and pursuant to provisions of the Companies Act and Capital Market Act (Official Gazette no. 65/18, 17/20, 83/21, 151/22, 85/24; hereinafter: CMA), the Supervisory Board conducts internal supervision of the Company by conducting regular controls of prepared reports. Members of the Supervisory Board receive on regular basis detailed information on management and work of the Company. All issues under the competence of the Supervisory Board, as prescribed by the CA, CMA and Articles of Association of the Company, are discussed and decided upon in the Supervisory Board meetings. Supervisory Board Report is part of the Company's Annual Report presented to the General Assembly. In addition, the Supervisory Board performs internal controls and supervision through Audit Board that provides expert support to the Supervisory Board and the Management Board in the efficient execution of obligations relating to corporate governance, risk management, financial reporting and control of the Company. The Management Board is bound to monitor that the Company keeps business books and other books and business documents, prepares book-keeping documents, provides realistic assessments of the assets and liabilities, drafts financial and other reports in accordance with accounting regulations and standards and applicable laws and regulations. 

4.        Top ten shareholders on 31 December 2024:

Pursuant to the Articles of Association of the Company, shareholder's voting rights are not limited to a certain percentage or number of votes, and there are no time limitations for acquisition of voting rights. Each ordinary share provides a right to one vote in the General Assembly.

Rights and obligations of the Company deriving from the acquisition of own shares are met in accordance with the provision of the CA.

On December 31, 2024, the Company owns a total of 8,369 of own shares, which make up for 0.3611% of the Company’s total issued share capital.

5.       Management Board of the Company consists of two members. Mrs Ivana Gažić performs duties of the President of the Management Board, and Mr Tomislav Gračan performs duties of the member of the Management Board.

The Management Board runs Company business operations in line with the Articles of Association and legal regulations.

The Management Board is appointed and dismissed by the Supervisory Board that on 31 December 2024 consists of the following members:

·          Matko Maravić, president

·          Tomislav Jakšić, deputy president

·          Dražen Čović

·          Bente Avnung Landsnes

·          Silvije Orsag

·          Ivan Sardelić

·          Vedrana Jelušić Kašić

Activities of the Supervisory Board in 2024 included:

·        Adoption of the consolidated and unconsolidated quarterly, biannual and annual financial reports of the Company,

·        Approving of amendments to the Company's Rules of procedure and other strategic documents,

·        Receiving information from the Management Board of the Company and the Group's subsidiaries

·        Electing the vice-president of the Supervisory Board, members of the Audit, Strategy and Remuneration Committees,

·        Deciding on the date, agenda and proposals of resolutions of the Company's General Assembly,

·        Approving the annual Code of Corporate Governance Questionnaire

·        Adopting the yearly Internal Audit Plan,

·        Deciding on suitability of the members of the Management Board

·        Approving the Company's Business Plan and Buget

·        Determining of the full text of the Company's Articles of Association

During 2024, the Supervisory Board held a total of six meetings, attended by members:

·        Matko Maravić, president (80%)

• Tomislav Jakšić, vice president (100%)
• Dražen Čović (80%)
• Bente Avnung Landsnes (100%)
• Silvije Orsag (100%)
• Ivan Sardelić (100%)
• Vedrana Jelušić Kašić (80%)

The composition of the the Management and Supervisory Boards in 2024 includes members of different genders, age, profiles and experience in order to ensure diverse perspectives in decision-making. The Company intends to bring to attention the need to increase the number of women in the Supervisory Board in the future.

6.        There are several boards / committees of the Supervisory Board in the Company which provides expert support to the Supervisory Board and the Management board. The members of these boards / committees are appointed and recalled by the Supervisory Board.

The Supervisory Board has established the Audit Committee composed of three members, namely:

• Matko Maravić,
• Ivan Sardelić,
• Silvije Orsag.

Activities of the Audit Committee in 2024 included:

·        Detailed analysis of the Company's consolidated and unconsolidated quarterly, biannual and annual financial reports,

·        Supervision of the Company's expenses,

·        Supervision of the audit of the annual financial reports for 2023,

·        Issuing recommendations to the Supervisory Board in regards to the choice of the Company's auditor,

·        Issuing an opinion in regards to the Strategic and yearly Internal Audit plan.

During 2024, the Audit Committee held a total of three meetings, attended fully by all members.

The Supervisory Board has established Remuneration Committee composed of three members, namely:

• Matko Maravić,
• Tomislav Jakšić,
• Bente Avnung Landsnes.

Activities of the Remuneration Committee in 2024 included:

·        Supporting the Supervisory Board in the procedure of proposing a reward policy for the members of the Management Board,

·        Proposing objective criterion to accurately assess business success which forms a base for the reward policy for the members of the Management Board,

·        Issuing a proposal to the Supervisory Board regarding the reward amounts for the Management Board following the adoption of the annual financial reports,

·        Issuing an opinion to the Supervisory Board regarding the Management Board’s proposal for reward payment to the Company’s employees.

During 2024, the Remuneration Committee held one meeting, attended fully by all members.

The Supervisory Board has established Strategy Committee composed of three members, namely:

• Matko Maravić,
• Bente Avnung Landsnes,
• Silvije Orsag.

Activities of the Strategy Committee in 2024 included:

·        Supporting the Management Board in development, implementation and realization of strategic goals and the Company’s strategy in general,

·        Assessment, consideration and revision of the Company’s key strategic determinants,

·        Construction of the proposals of the Supervisory Board for adoption of the Company’s strategic goals

·        Supervision of the implementation and/or realization of the set strategic goals of the Company and regular reporting to the Management and Supervisory Boards.

During 2024, the Strategy Committee held one meeting, attended by all members.

The Supervisory Board has established Nomination Committee composed of three members, namely:

• Tomislav Jakšić,

• Silvije Orsag,
• Bente Avnung Landsnes.

Activities of the Nomination Committee in 2024 included:

·        carrying out the procedure of initial, regular and extraordinary assessment of the suitability of candidates for members of the Exchange's Management Board and Supervisory Board, and collective assessment of the Exchange's Management Board and Supervisory Board;

·        identification and recommendation of candidates for filling positions in the Company's Management Board and Supervisory Board,

·        assessment of the balance of knowledge, skills, diversity and experience of the members of the Management Board and Supervisory Board of the Company;

·        the decision on the goal for the representation of the underrepresented gender in the Management Board and the Supervisory Board of the Exchange and the preparation of a policy on how to increase the number of representatives of the underrepresented gender in the Management Board and the Supervisory Board of the Company;

·        regular evaluation of the structure, size, composition and performance of the Company's Management Board and Supervisory Board;

·        regular evaluation of the knowledge, skills and experience of individual members of the Management Board and the Supervisory Board as a whole and reporting to the Management Board and the Supervisory Board of the Company.

During 2024, the Nomination Committee held a total of two meetings, attended fully by all members of the Committee.

7.      Report of the Supervisory Board on the supervision of the management of the Company's affairs in 2024

In 2024, the Supervisory Board of the Zagreb Stock Exchange (hereinafter: the Stock Exchange and/or the Company) held a total of six (6) sessions on the following dates: February 27, April 29, July 2, July 24, October 29, and December 11, 2024. At the meetings of the Supervisory Board, the entire business of the company was considered, which includes current and preventive supervision.

Members of the Company's Management Board also participated in the sessions of the Supervisory Board, presenting individual business areas and providing the necessary clarifications to the Supervisory Board. In this regard, the Supervisory Board assesses its cooperation with the Management Board as very successful.

During the supervision, the Supervisory Board paid particular attention to the examination of the legality of the business, both in the part of acting in accordance with the valid legal framework, and in relation to acting in accordance with the provisions of the Company's Articles of association.

The Supervisory Board adopted all reports of the Management Board submitted during 2024, and concludes that the achieved results are within the expectations and in accordance with the current economic environment.

The Supervisory Board points out that according to the current knowledge and based on the data provided, the business data presented corresponds to the status of the Company shown in the business books of the Exchange, as well as that they represent an objective, complete and true presentation of the Company's assets and liabilities.

The Supervisory Board fully and unreservedly accepts the conclusion of the Management Board that the preparation of financial statements based on the principle of going concern is appropriate.

Pursuant to provisions of Article 250a, paragraph 4 and Article 272, paragraph of the CA, and Article 25 of the AA, this Report is a special section and integral part of the Company's Annual Report for 2024.

Responsibilities of the Management Board for the Annual report

The Management Board of the Company is required to prepare consolidated financial statements for each financial year, which give a true and fair view of the financial position of the Company and its subsidiary (“the Group”) and of the results of its operations and cash flows, in accordance with International Financial Reporting Standards as adopted by the European Union. The Management Board is responsible for implementing and maintaining proper accounting records relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

The Management Board has general responsibility for taking such steps as are reasonably available to it to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. 

The Management Board is responsible for selecting suitable accounting policies to conform to applicable accounting standards and then applying them consistently; making judgments and estimates that are reasonable and prudent; and preparing the consolidated financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Management Board is also responsible for the preparation and content of the Management report and the statement of implementation of the Corporate Governance Code, as required by the Croatian Accounting Act (Official Gazette 85/24, 145/24), and the rest of other information (together “other information”).

The Management Board is responsible for the submission of the Annual report to the Supervisory Board which includes the consolidated financial statements and other information for acceptance, following which the Supervisory Board is required to consider, and if appropriate approve the consolidated annual financial statements for submission to the General Assembly for adoption.

The consolidated financial statements and other information are approved by the Management Board on April 28, 2025 and are signed and verified for submission to the Supervisory Board.

Signed on behalf of the Zagreb Stock Exchange, Inc.:

  

S

Consolidated Statement of comprehensive income

	Notes	2024		2023
		EUR		EUR
Income statement
Sales revenue	4	2,561,831		2,267,409
Other operating income	5	1,424,974		1,337,775
Staff costs	6	(1,951,910)		(1,774,304)
Depreciation and amortization	10,11,12	(324,741)		(307,982)
Other operating expenses	7	(1,651,199)		(1,530,556)
Operating profit/(loss)		58,955		(7,658)
Financial income	8	88,355		37,859
Financial expense	8	(7,757)		(10,944)
Dividend income		-		32,593
Net gains / (losses) from financial assets at fair value through profit or loss		24,119		26,533
Net foreign exchange loss		(990)		(1,002)
Net financial gain / (loss)		103,727		85,039
Share of profit / (loss) in joint venture and associates		68,127		(203)
Profit before tax		230,809		77,178
Income tax expense	9	(33,556)		(13,330)
Profit for the year		197,253		63,848

The accounting policies and other notes form an integral part of these consolidated financial statements.