Granolio d.d.

Interim / Quarterly Report • Jul 31, 2018

Consolidated financial results for the six months period ended 30 June 2018 (unaudited)

General information on Granolio d.d.

GRANOLIO d.d. ("The Company") is a joint-stock company registered with the Commercial Court of Zagreb, Croatia. The Company's tax number (OIB) is 59064993527, and its registration number (MBS) 080111595.

The Company's headquarter is located in Zagreb at Budmanijeva 5.

Subsidiaries

The Company holds 100% of the shares in Zdenačka farma d.o.o.

It has a controlling influence in the decision-making process in the Zdenka mliječni proizvodi d.o.o. (further "Zdenka-m.p. d.o.o.") and Žitar d.o.o companies. The above companies have been consolidated into the Granolio Group since 2011.

Subsidiary Žitar d.o.o. has founded another company, Žitar konto d.o.o., which is fully owned by it. Žitar konto d.o.o. financial statements are part of the consolidated financial statements.

Ownership in subsidiaries is presented in the organizational chart below:

The Group monitors its business operations through four business segments:

• Milling
• Dairy and cheese production
• Wholesale trade
• Other

Milling is the segment that comprises flour production and sale of flour. This business segment is comprised in the holding company exclusively.

Dairy and cheese production ("Dairy") comprises cheese production and cheese sale realized in the company Zdenka – mliječni proizvodi d.o.o., but also milk production and sale of milk by dairy farms in the companies Zdenačka farma d.o.o. and Žitar d.o.o.

Wholesale trade segment comprises grain and oilseed trade and trade of sowing materials performed by the companies Granolio d.d. and Žitar d.o.o.

The segment Other comprises animal feed production (Žitar d.o.o.), pig farming and beef cattle farming (Žitar d.o.o., beef cattle farming in the company Granolio d.d.), and rendering the silo services and the storage of trade goods (Granolio d.d. and Žitar d.o.o.).

Granolio Group's financial indicators for the six months period of 2018

			In thousands of HRK
	1-6 2018	1-6 2017	change
Operating income	238.104	287.772	(49.668)	(17%)
Operating expenses	(241.241)	(299.582)	58.341	19%
EBIT	(3.137)	(11.810)	8.673	(73%)
EBIT margin	-1%	(4%)
EBITDA	12.216	4.365	7.851	180%
EBITDA margin	5%	2%
Net financial result	(24)	(12.429)	12.405	100%
Net result for the period	(3.161)	(24.239)	21.078	87%
Attributable to the Group	(4.234)	(23.034)	18.800	82%
Non-controlling interest	1.073	(1.205)	2.278	189%

In the first half-year 2018, the Group has made more favorable operating result compared to the same period last year.

Net financial result in the first half-year 2018 is more favorable than in the same period last year due to the fact that mother company was charged with no interest for the interest bearing debt.

Financial indicators			In thousands of HRK
	30.6.2018	31.12.2017	change
Net assets (Capital and reserves)*	17.377	20.356	(2.979) (15%)
Total debt	511.220	485.138	26.082 5%
Cash and cash equivalents	10.871	3.605	7.266 202%
Given loans, deposits and similar**	38.525	28.750	9.775 34%
Net debt	461.824	452.783	9.041 2%
Net debt/ EBITDA	19,49	-26,49
EBITDA for the last 12 months	23.690	(17.969)

* Net assets = capital and reserves attributable to the equity holders of the parent and to the minority interests

** Loans given, securities and deposits

Compared to 31 December 2017, net assets decreased due to the negative result for the period.

As at 29 January 2018 Company received a notice on the acquisition of 150,000 shares by HOK osiguranje (that represent 7,89% of ownership). HOK acqured shares in OTC transaction with the pension fund PBZ CROATIA OSIGURANJE. As at 30 June 2018, company HOK held 19,9% of ownership in Granolio.

The Group expects to successfully end the pre-bankruptcy process in the mother company during 2018.

Separate business results for the six months period of 2018

Granolio d.d. In thousands of HRK
	1-6 2018	1-6 2017	change
Operating income	125.933	187.650	(61.717)	(33%)
EBIT	(6.566)	(10.348)	3.782	37%
margin %	(5%)	(6%)
EBITDA	(1.373)	(4.813)	3.440	(71%)
margin %	(1%)	(3%)
Net financial result	290	(11.979)	12.269	102%
Net result	(6.276)	(22.327)	16.051	72%
margin %	(5,0%)	(11,9%)

In the first half-year 2018, Company has made more faforable operating result (EBIT) compared to the same period last year.

In the first half-year 2018, interest expense on loans received were not charged due to the prebankruptcy process still ongoing. Therefore, in 2018 Company reported net financial income.

As at 14 March 2018, Company and started process of merging it's related party Prerada žitarica into Granolio.

As at 30 April 2018, Commercial court in Zagreb has reached a resolution on the forementioned merger by which the company Prerada žitarica ceased to exist.

Zdenka - mliječni proizvodi d.o.o.				In thousands of HRK
	1-6 2018	1-6 2017	change
Operating income	67.692	72.722	(5.030)	(7%)
EBIT	2.281	636	1.645	(259%)
margin %	3%	1%
EBITDA	8.400	7.061	1.339	19%
margin %	12%	10%
Net financial result	(183)	(431)	248	58%
Net result	2.098	205	1.893	(923%)
margin %	3%	0%

In the first half-year 2018, the company has made almost equal operating result as in the same period last year.

Žitar d.o.o. (consolidated) In thousands of HRK

	1-6 2018	1-6 2017	change
Operating income	35.377	21.688	13.689	63%
EBIT	187	(2.520)	2.707	(107%)
margin %	1%	(12%)
EBITDA	2.659	48	2.611	5440%
margin %	8%	0%
Net financial result	(140)	(79)	(61)	(77%)
Net result	47	(2.599)	2.646	102%
margin %	0%	(12%)

Žitar's operating activities include agriculture, production of milk on a dairy farms, cattle breeding, rendering services of storing goods and trade in crops.

Zdenačka farma d.o.o. In thousands of HRK
	1-6 2018	1-6 2017	change
Operating income	11.328	10.315	1.013	10%
EBIT	1.080	778	302	39%
margin %	10%	8%
EBITDA	2.509	2.214	295	13%
margin %	22%	21%
Net financial result	(348)	(416)	68	16%
Net result	732	362	370	102%
margin %	6%	4%

In the first half-year 2018 total sales of milk by Zdenačka farma amounted to 2,3 million kilos (HY 2017: 2,3 million kilos). Average sales price realised in the first half-year 2018 was almost as equal as the average sales price realised in the same period last year. In the first half-year 2018, income was also made from trade in goods.

Employees

In the six months 2018 the Group employed 416 employees based on man-hour basis (in the six months 2017: 448 employees).

Environment

Regarding the environmental protection, the Group has implemented comprehensive and systematic solutions and established environment-friendly production processes.

Other

Supervisory Board has approved Granolio Group's financial statements for the six months period 2018.

Annex 1.
Reporting period	1.1.2018	to	30.6.2018
		Quarterly financial report TFI-POD
Tax number (MB): 01244272
Company registration number 080111595 (MBS):
59064993527 Personal identification number (OIB):
Issuing company: GRANOLIO d.d.
Postal code and place 10000		ZAGREB
Street and house number: BUDMANIJEVA 5
E-mail address: granolio@granolio.hr
Internet address www.granolio.hr
Municipality/city code and name 133
County code and name 21	GRAD ZAGREB		Number of employees:	436
Consolidated report: YES			(period end) NKD code:	1061
Companies of the consolidation subject (according to IFRS):		Seat:	MB:
GRANOLIO D.D.		ZAGREB	01244272
ZDENAČKA FARMA D.O.O.		VELIKI ZDENCI	02095777
PRERADA ŽITARICA D.O.O.		GRUBIŠNO POLJE	02095696
ZDENKA - MLIJEČNI PROIZVODI D.O.O.		VELIKI ZDENCI	01623982
ŽITAR D.O.O.		DONJI MIHOLJAC	01443119
ŽITAR KONTO D.O.O.		DONJI MIHOLJAC	04212517
Bookkeeping service:
JASENKA KORDIĆ Contact person:
(only surname and name) Telephone: 01/6320-261		Telefax:	01/6320-224
E-mail address: jkordic@granolio.hr
Family name and name: HRVOJE FILIPOVIĆ	(person authorized to represent the company)
Documentation for public disclosure: notes to the financial statements) 2. Non-consolidated financial results for the 12 months period ended 31 December 2016, financial statements.		1. Financial statements (balance sheet, income statement, cash flow statement, statement of changes in equity, 3. Management Board statement of liability and Statements of responsibility of executives responsible for preparing
	L.S.		(signature of the person authorized to represent the company)

Balance Sheet

as of 30.06.2018

Company: GRANOLIO d.d.
Position	AOP	Previous period	Current period
1	2	3	4
ASSETS
A) RECEIVABLES FOR SUBSCRIBED BUT NOT PAID-IN CAPITAL	001
B) LONG-TERM ASSETS (003+010+020+031+036)	002	468.986.689	458.257.312
I. INTANGIBLE ASSETS (004 do 009)	003	124.767.302	123.718.555
1. Assets development	004	0	0
2. Concessions, patents, licenses, trademarks, service marks, software and other rights 3. Goodwill	005	120.737.135 0	120.521.388
4. Prepayments for purchase of intangible assets	006 007	0	0 0
5. Intangible assets in preparation	008	0	0
6. Other intangible assets	009	4.030.167	3.197.167
II. TANGIBLE ASSETS (011 do 019)	010	328.212.154	318.531.523
1. Land	011	23.610.097	23.643.097
2. Buildings	012	223.325.464	218.555.745
3. Plant and equipement	013	56.943.128	52.603.854
4. Tools, working inventory and transportation assets	014	2.917.588	2.369.961
5. Biological assets	015	10.110.572	9.785.140
6. Prepayments for tangible assets	016	355.095	283.777
7. Tangible assets in progress	017	10.437.015	10.777.713 80.236
8. Other tangible assets 9. Investments in buildings	018 019	81.195 432.000	432.000
III. LONG-TERM FINANCIAL ASSETS (021 do 030)	020	13.892.233	13.892.234
1. Investments (shares) with related parties within the Group	021
2. Investments in other securities of related parties within the Group	022
3. Loans, deposits and similar assets to related parties within the Group	023
4. Investments (shares) with entrepreneurs in whom the entity holds participating interests	024
5. Investments in other securities of entrepreneurs in whom the entity holds participating interests	025
6. Loans, deposits and similar assets to entrepreneurs in whom the entity holds participating
interests	026
7. Investments in securities	027
8. Loans, deposits and similar assets	028	396.143	396.144 0
9. Other investments accounted by equity method 10. Other long - term financial assets	029 030	0 13.496.090	13.496.090
IV. RECEIVABLES (032 do 035)	031	15.000	15.000
1. Receivables from related parties within the Group	032
2. Receivables from participating parties	033
3. Accounts receivable	034
4. Other receivables	035	15.000	15.000
V. DEFERRED TAX ASSET	036	2.100.000	2.100.000
C) SHORT TERM ASSETS (038+046+053+063)	037	254.673.903	285.329.825
I. INVENTORIES (039 do 045)	038	74.430.389	87.768.245
1. Raw materials and supplies	039	23.586.432	16.171.712
2. Work in progress	040	8.376.188	12.817.309
3. Finished goods 4. Merchandise	041	33.251.567	35.198.596 23.553.662
5. Prepayments for inventories	042 043	9.130.745 85.457	26.966
6. Long term assets held for sale	044	0	0
7. Biological assets	045	0	0
II. RECEIVABLES (047 do 052)	046	148.285.115	148.560.978
1. Receivables from related parties within the Group	047	492.726	492.722
2. Receivables from participating parties	048	0	0
3. Accounts receivable	049	112.470.877	119.821.767
4. Receivables from employees and members of related parties	050	3.526	4.675
5. Receivables from government and other institutions	051	8.710.729	2.945.972
6. Other receivables	052	26.607.258	25.295.842
III. SHORT TERM FINANCIAL ASSETS (054 do 062) 1. Investments (shares) with related parties within the Group	053	28.353.437	38.129.246
2. Investments in other securities of related parties within the Group	054 055
3. Loans, deposits and similar assets to related parties within the Group	056	14.676.132	14.656.773
4. Investments (shares) with entrepreneurs in whom the entity holds participating interests	057	0	0
5. Investments in other securities of entrepreneurs in whom the entity holds participating interests	058	0	0
6. Loans, deposits and similar assets to entrepreneurs in whom the entity holds participating	059	0	0
7. Investments in securities	060	178.441	179.272
8. Loans, deposits and similar assets	061	13.498.864	23.293.201
9. Other financial assets	062
IV. CASH AND CASH EQUIVALENTS	063	3.604.962	10.871.356
D) PREPAID EXPENSES AND ACCRUED REVENUE E) TOTAL ASSETS (001+002+037+064)	064 065	1.278.706 724.939.299	1.161.818 744.748.955
F) OFF-BALANCE RECORDS	066

EQUITY AND LIABILITIES
A) ISSUED CAPITAL AND RESERVES (068 do 070+076+077+081+084+087)	067	20.356.307	17.376.965
I. SUBSCRIBED SHARE CAPITAL	068	19.016.430	19.016.430
II. CAPITAL RESERVES	069	84.186.547	84.195.807
III.RESERVES FROM PROFIT (071+072-073+074+075)	070	1.208.554	1.208.554
1. Reserves prescribed by law	071	408.554	408.554
2. Reserves for treasury shares	072	800.000	800.000
3. Treasury shares (deductible items)	073
4. Statutory reserves	074
5. Other reserves	075
IV. REVALUATION RESERVES	076	60.117.173	59.179.265
V. FAIR VALUE RESERVES(078-080)	077
1. Fair value of financial assets available for sale	078
2. Efficient part of cash flow hedging	079
3. Efficient part of hedging of a net investment in foreign countries	080
V. RETAINED EARNINGS OR ACCUMULATED LOSS (082-083)	081	$-868.634$	-201.420.647
1. Retained earnings	082		$\mathbf 0$
2. Accumulated loss	083	868.634	201.420.647
VI. PROFIT/LOSS FOR THE CURRENT YEAR (085-086)	084	-201.662.286	$-4.233.873$
1. Profit for the current year	085
2. Loss for the current year	086	201.662.286	4.233.873
VII. MINORITY (NON-CONTROLLING) INTEREST	087	58.358.525	59.431.430
B) PROVISIONS (089 do 094)	088	0	$\mathbf 0$
1. Provisions for pensions, severance pay and similar libabilities	089
2. Provisions for tax liabilities
3. Provisions for ongoing legal cases	090
4. Provisions for costs of natural resources regeneration	091
	092
5. Provisions for guarantees costs 6. Other provisions	093
	094
C) LONG - TERM LIABILITIES (096 do 106)	095	85.269.845	75.673.277
1. Liabilites to related parties within the Group	096
2. Liabilities for loans, deposits, etc. to related parties within the Group	097
3. Liabilities to entrepreneurs in whom the entity holds participating interests	098
4. Liabilities for loans, deposits, etc. to entrepreneurs in whom the entity holds participating	099
5. Liabilities for loans, deposits, etc.	100	11.270	11.069
6. Liabilities to banks and other financial institutions	101	71.876.349	62.485.865
7. Liabilities for received prepayments	102		$\mathbf{0}$
8. Accounts payable	103	185.773	185.773
9. Liabilities arising from debt securities	104	0	0
10. Other long-term liabilities	105		$\Omega$
11. Deferred tax liability	106	13.196.453	12.990.570
D) SHORT - TERM LIABILITIES (108 do 121)	107	605.933.816	637.913.875
1. Liabilites to related parties within the Group	108
2. Liabilities for loans, deposits, etc. to related parties within the Group	109
3. Liabilities to entrepreneurs in whom the entity holds participating interests	110
4. Liabilities for loans, deposits, etc. to entrepreneurs in whom the entity holds participating	111
5. Liabilities for loans, deposits, etc.	112	0	35.551.515
6. Liabilities to banks and other financial institutions	113	366.510.252	367.341.172
7. Liabilities for received prepayments	114	2.985.710	250.488
8. Accounts payable	115	102.605.008	102.751.192
9. Liabilities arising from debt securities	116	46.740.600	45.830.600
10. Liabilities to employees	117	2.188.819	2.306.435
11. Liabilities for taxes, contributions and similar fees	118	4.014.406	4.261.919
12. Liabilities to share - holders	119	0	0
13. Liabilities for long-term assets held for sale	120	0	$\mathbf 0$
14. Other short - term liabilities	121	80.889.021	79.620.554
E) DEFFERED SETTLEMENTS OF CHARGES AND INCOME DEFERRED TO FUTURE PERIOD	122	13.379.330	13.784.838
F) TOTAL - CAPITAL AND LIABILITIES $(067+088+095+107+122)$	123	724.939.298	744.748.955
G) OFF-BALANCE RECORDS	124
APPENDIX to balance sheet (to be filled in by entrepreneur that prepares consolidated financial statements)
A) CAPITAL AND RESERVES
1. Attributed to equity holders of parent company	125	$-38.002.217$	-42.054.465
2. Attributable to minority interest	126	58.358.525	59.431.430

Note 1.: Appendix to the balance sheet to be filled by entrepreneurs that prepare consolidated financial statements.

period 01.01.2017 to 30.06.2017 Income statement

Company: GRANOLIO d.d. Position	AOP		Previous period	Current period
		Cummulative	Quarter	Cummulative	Quarter
1	2	3	4	5	6
I. OPERATING REVENUE (125+130)	125	287.771.957	128.319.693	238.103.938	135.075.936
1. Sales revenue with related parties with the Group	126	0	0	0	0
2. Sales revenue (other parties)	127	279.289.112	124.742.996	229.827.599	131.042.643
3. Revenue from the use of own products, goods and services	128	1.069.523	521.551	1.015.268	647.747
4. Other operating revenue with related parties with the Group	129	0	0	0	0
5. Other operating revenue (other parties)	130	7.413.322	3.055.146	7.261.071	3.385.546
II. OPERATING COSTS (132+133+137+141+142+143+146+153)	131	299.581.452	133.703.863	241.240.878	134.856.970
1. Changes in value of work in progress and finished products	132	-5.140.336	788.861	-6.730.675	-3.845.499
2. Material costs (133 do 136)	133	255.728.151	110.141.240	206.084.472	117.013.024
a) Raw material and material costs	134	134.092.373	60.893.204 38.402.481	144.172.275 44.387.018	73.238.798 34.113.418
b) Cost of goods sold c) Other external costs	135	100.009.243	10.845.555	17.525.179	9.660.808
3. Staff costs (138 do 140)	136	21.626.535 21.825.119	10.284.255	18.585.933	9.471.183
a) Net salaries and wages	137 138	13.568.338	6.490.081	11.962.012	6.115.030
b) Tax and contributions from salary expenses	139	5.037.408	2.275.580	3.998.459	2.024.307
c) Contributions on gross salaries	140	3.219.373	1.518.594	2.625.463	1.331.847
4. Depreciation and amortisation		16.174.437	8.029.696	15.352.641	7.613.351
	141
5. Other costs	142	3.932.497	1.511.724 0	3.473.745 0	1.845.698 0
6. Impairment (144+145)	143	0
a) Impairment of long-term assets (financial assets excluded)	144				0
b) Impairment of short - term assets (financial assets excluded)	145
7. Provisions (147 do 152) a) Provisions for pensions, severance pay and similar libabilities	146 147				0
b) Provisions for tax liabilities	148
c) Provisions for ongoing legal cases	149
d) Provisions for costs of natural resources regeneration	150
e) Provisions for guarantees costs	151
f) Other provisions	152
8. Other operating costs	153	7.061.584	2.948.087	4.474.762	2.759.213
III. FINANCIAL INCOME (155 do 164)	154	3.713.282	1.458.870	2.175.677	922.386
1. Income from investment in shares in related parties within the Group	155	0	0	0	0
2. Income from investment in shares of entrepreneurs in whom the entity holds participating	156	0	0	0	0
3. Income from other long-term financial investment and loans granted to related parties	157	0	0	0	0
4. Other income arising from interests with related parties within the Group	158	0	0	0	0
5. Foreign exchange gains and similar financial income with related parties within the Group	159	0	0	0	0
6. Income from other long-term financial investment and loans	160	413.813	385.185	352.276	176.250
7. Other income arising from interests	161	64.067	43.963	19.919	7.518
8. Foreign exchange gains and similar financial income	162	2.151.683	586.361	1.803.482	738.618
9. Unrealized gains (income) from financial assets	163	0	0	0	0
10. Other financial income	164	1.083.719	443.361	0	0
IV. FINANCIAL EXPENSES (166 do 172)	165	16.143.219	7.348.958	2.199.704	1.105.664
1. Expenses arising from interests and similar expenses with related parties within the Group	166	0	0 0	0 0	0 0
2. Foreign exchange losses and similar financial expenses with related parties within the 3. Expenses arising from interests and similar expenses	167	0	7.137.434	1.872.262	899.509
4. Foreign exchange losses and similar financial expenses	168 169	15.475.282 636.473	207.869	305.831	184.639
5. Unrealized losses (expenses) on financial assets	170	0	0	0	0
6. Financial assets impairment (net)	171	0	0	0	0
7. Other financial expenses	172	31.464	3.655	21.611	21.516
V. SHARE IN PARTICIPATING INTERESTS PROFIT	173
VI. SHARE IN JOINT-VENTURE PROFIT	174
VII. SHARE IN PARTICIPATING INTERESTS LOSS	175
VIII. SHARE IN JOINT-VENTURE LOSS	176
IX. TOTAL INCOME (125+164+173 + 174)	177	291.485.239	129.778.563	240.279.615	135.998.322
X. TOTAL EXPENSES (131+165+175 + 176)	178	315.724.671	141.052.821	243.440.582	135.962.634
XI. PROFIT OR LOSS BEFORE TAXES (177-178)	179	-24.239.432	-11.274.258	-3.160.967	35.689
1. Profit before taxes (177-178)	180	0	0	0	35.689
2. Loss before taxes (178-177)	181	24.239.432	11.274.258	3.160.967	0
XII. PROFIT TAX	182
XIII. PROFIT OR LOSS FOR THE PERIOD (179-182)	183	-24.239.432	-11.274.258	-3.160.967	35.689
1. Profit for the period (179-182)	184	0	0	0	35.689
2. Loss for the period (182-179)	185	24.239.432	11.274.258	3.160.967	0
APPENDIX to income statement (to be filled in by entrepreneur that prepares consolidated financial statements)
XIV. PROFIT OR LOSS FOR THE PERIOD
1. Attributed to equity holders of parent company	186
2. Attributable to minority interest	187
STATEMENT OF OTHER COMPREHENSIVE INCOME (only for IFRS adopters) I. PROFIT OR LOSS FOR THE PERIOD	188	-24.239.432	-11.274.258	-3.160.967	35.689
II. OTHER COMPREHENSIVE INCOME/LOSS BEFORE TAXES (190 do 197)	189	0	0	0	0
1. Exchange differences on translation of foreign operations	190
2. Movements in revaluation reserves of long - term tangible and intangible assets	191
3. Profit or loss arising from re-evaluation of financial assets available for sale	192
4. Gains or losses arising on efficient cash flow hedging	193
5. Gains or losses arising on efficient hedge of a net investment in foreign countries	194
6. Share in other comprehensive income / loss of participating interest companies	195
7. Actuarial gains / losses on defined benefit plans	196
8. Other changes in equity non related to the owners	197
III. TAX ON OTHER COMPREHENSIVE INCOME FOR THE PERIOD	198
IV. NET OTHER COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD (158-166)	199	0	0	0	0
V. COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD (188+199)	200	-24.239.432	-11.274.258	-3.160.967	35.689
APPENDIX to other comprehensive income statement (to be filled in by entrepreneur that prepares consolidated financial statements)
VI. COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD
1. Attributed to equity holders of parent company	201	-23.034.101	-10.392.562	-4.233.873	-1.470.940
2. Attributed to minority interest	202	-1.205.330	-881.669	1.072.907	1.506.629

Cash flow statement - indirect method period 01.01.2018 to 30.06.2018

Company: GRANOLIO d.d.
Position	AOP	Previous period	Current period
1	2	3	4
CASH FLOWS FROM OPERATING ACTIVITIES
1. Profit before tax	001	(23.057.645)	(3.160.967)
2. Adjustments (003 do 010)	002	23.946.808	13.338.367
a.) Depreciation and amortisation	003	16.175.437	15.352.643
b.) Gains and losses from the sale and impairment of long-term tangible and	004	(1.077.621)	1.990.817
intangible assets
c.) Gains and losses from the sale and unrealised gains and losses and impairment of financial assets	005	(792.367)
d.) Interests and dividends income	006	(477.880)	(372.081)
e.) Interests expense	007	15.475.256	1.733.324
f.) Provisions	008	-
g .) Foreign exchange differences (unrealised)	009	(1.775.073)	(1.521.732)
h.) Other adjustments for non-cash transactions and unrealised gains and losses	010	(3.580.944)	(3.844.604)
I. Cash flow increase or decrease before changes in the working capital (001 do 002)	011	889.163	10.177.400
3. Working capital changes ( 013 do 016)	012	31.069.748	(12.564.304)
a.) Increase or decrease in short term liabilities	013	(6.902.192)	(1.731.141)
b.) Increase or decrease in short term receivables	014	20.218.396	2.388.245
c.) Increase or decrease in inventories	015	17.753.544	(13.221.408)
d.) Other increase or decrease in the working capital	016	-
II. Cash from operations (011+012)	017	31.958.911	(2.386.904)
4. Interests paid	018	(9.694.762)	(1.784.381)
5. Income tax paid	019	(1.199.045)	(490.000)
A) NET CASH FLOW FROM OPERATING ACTIVITIES (017 do 019)	020	21.065.104	(4.661.285)
CASH FLOW FROM INVESTING ACTIVITIES
1. Cash inflows from sales of long-term tangible and intangible assets	021	242.394	-
2. Cash inflow from the sale of financial instruments	022	1.435.851	-
3. Interests receipts	023	767.626	43.482
4. Dividends receipts	024	-
5. Cash inflow from repayment of given loans and other borrowings	025	4.754.735	54.811
6. Other cash inflows from investing activities	026		10.215
III. Total cash inflows from investing activities (021 do 026)	027	7.200.606	108.508
1. Cash outflow for purchase of long-term tangible and intangible assets	028	(4.464.061)	(4.350.185)
2. Cash outflow for acquisition of financial instruments	029
3. Cash outflow for granting loans and other borrowings in the given period	030	(21.837.319)	(9.840.004)
4. Aquisition of associates decreased by the acquired cash	031
5. Other cash outflow for investing activities	032	(180.161)
IV. Total cash outflow for investing activities (028 do 032)	033	(26.481.541)	(14.190.189)
B) NET CASH FLOW FROM INVESTING ACTIVITIES (027+033)	034	(19.280.935)	(14.081.681)
CASH FLOW FROM FINANCING ACTIVITIES
1. Cash inflow from increase of the share (subscribed) capital	035
2. Cash inflow from issuing property and debt financial instruments 3. Cash proceeds from the credit principals, promissory notes, borrowings and	036 037	97.577.451	35.551.515
other loans
4. Other proceeds from financial activities V. Total cash inflows from financial activities (027 do 029)	038	52.319 97.629.770	35.551.515
	039
1. Cash outflow for repayment of credit principals, promissory notes, borrowings and other loans	040	(97.531.239)	(7.769.741)
2. Cash outflow for dividends paid	041	(1.181.786)
3. Cash outflow for financial lease	042	(1.287.814)	(862.413)
4. Cash outflow for purchase of treasury shares and decrease of share (subscribed) capital	043
5. Other cash outflow for financial activities	044	(8.118.000)	(910.000)
VI. Total cash outflow for financial activities (031 do 035)	045	(108.118.839)	(9.542.154)
C) NET CASH FLOW FROM FINANCIAL ACTIVITIES	046	(10.489.069)	26.009.361
1. Unrealised foreign exchange differences in cash and cash equivalents	047
D) NET INCREASE OR DECREASE IN CASH FLOW (020+034+046+047)	048	(8.704.900)	7.266.395
E) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD	049	9.729.371	3.604.962
F) CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	050	1.024.471	10.871.357

Statement of changes in equity Obrazac POD-PK 01.01.2017-30.06.2017

DIRECTLY IN EQUITY (AOP 15 to 22)

II. COMPREHENSIVE INCOME OR LOSS OF THE PRIOR PERIOD (AOP 05+24)

Dbrazac POD-PK

										Attributable to the equity holders of the parent
Position	AOP	Note no.	Share (subscribed) capital	Capital reserves	Legal reserves	Reserves for treasury shares	Treasury shares (deductible)	Statutory reserves	Other reserves	Revaluation reserve	Fair value of financial assets available for	Efficient part of cash flow hedging	Efficient part of hedging of a net	Retained earnings / accumulate d loss	Profit / loss for the current year	Total attributable to the equity holders of	Minority (non controlling) interest	Total capital and reserves
1	2	3	4	5	6	7	8	9	10	11	sale 12	13	investment 14	15	16	the parent 17 (4 do 7 - 8	18	19 (17+18)
Prior period
1. Balance 1 January of the prior period	01		19.016.430	84.186.547	283.227	800.000				61.561.956				7.812.413		2.406.269 176.066.842 61.141.415 237.208.257
2. Changes in accounting policies	02															0		0
3. Correction of errors	03															0		0
4. Balance 1 January of the prior period (AOP 01 do 03)	04		19.016.430	84.186.547	283.227	800.000	0	0		0 61.561.956	0	0		0 7.812.413		2.406.269 176.066.842 61.141.415 237.208.257
5. Profit / loss for the period	05															-23.034.101 -23.034.101 -1.205.330 -24.239.431
6. Exchange differences on translation of foreign operations	06															0		0
7. Changes in revaluation reserves of long-term tangible and intangible assets	07									-1.491.916				1.491.916		0		0
8. Profit or loss from re-evaluation of financial assets available for sale	08															0		0
9. Gains or losses arising on efficient cash flow hedging	09															0		0
10. Gains or losses arising on efficient hedge of a net investment in foreign countries	10															0		0
11. Share in other comprehensive income / loss of participating interest companies	11															0		0
12. Actuarial gains / losses on defined benefit plans	12															0		0
13. Other changes in equity non related to the owners	13													34.944		34.944		34.944
14. Taxation recognised directly in equity	14									1.539.049				327.494		1.866.543		1.866.543
15. Increase/decrease in share (subscribed) capital (other than from reinvesting profit and other than arising from the pre-bankuptcy settlement procedure)	15															0		0
16. Increase of share (subscribed) capital by reinvesting profit	16															0		0
17. Increase of share (subscribed) capital arising from the pre-bankruptcy settlement procedure	17															0		0
18. Redemption of own (treasury) shares	18															0		0
19. Payment of share in profit / dividends	19															0		0
20. Other distribution of profits to the owners	20															0		0
21. Transfer to reserves by annual schedule	21				125.327										2.280.942 -2.406.269	0		0
22. Increase in reserves arising from the pre-bankruptcy settlement procedure	22															0		0
23. Balance 30 of Yune the prior period (04 do 22)	23		19.016.430	84.186.547	408.554	800.000	0	0		0 61.609.089	0	0			0 11.947.709 -23.034.101 154.934.228 59.936.085 214.870.313
APPENDIX TO THE STATEMENT OF CHANGES IN EQUITY (to be filled in by entrepreneur that prepares financial statements in accordance to IFRS)
I. OTHER COMPREHENSIVE INCOME OF THE PRIOR PERIOD, NET OF TAX (AOP 06 to 14)	24		0	0		0	0 0	0		0 0	0	0	0	0	0	0	0	0

²⁶ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 III. TRANSACTIONS WITH THE OWNERS OF THE PRIOR PERIOD RECOGNISED

25 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Statement of changes in equity Obrazac POD-PK 01.01.2017-30.06.2017

Obrazac
POD-PK

Position	AOP									Attributable to the equity holders of the parent
		Note no.	Share (subscribed) capital	Capital reserves	Legal reserves	Reserves for treasury shares	Treasury shares (deductible)	Statutory reserves	Other reserves	Revaluation reserve	Fair value of financial assets available for	Efficient part of cash flow	Efficient part of hedging of a net	Retained earnings / accumulate	Profit / loss for the current year	Total attributable to the equity holders of	Minority (non controlling) interest	Total capital and reserves
1	2	3	4	5	6	7	8	9	10	11	sale 12	hedging 13	investment 14	d loss 15	16	the parent 17 (4 do 7 -	18	19 (17+18)
Current period																8
1. Balance 1 January of the current period	27		19.016.430	84.186.547	408.554	800.000				60.117.173								-868.634 -201.662.286 -38.002.216 58.358.525 20.356.309
2. Changes in accounting policies	28															0		0
3. Correction of errors	29															0		0
4. Balance 1 January of the current period (AOP 27 do 29)	30		19.016.430	84.186.547	408.554	800.000		0	0	0 60.117.173		0 0						0 -868.634 -201.662.286 -38.002.216 58.358.525 20.356.309
5. Profit / loss for the period	31																	-4.233.873 -4.233.873 1.072.907 -3.160.966
6. Exchange differences on translation of foreign operations	32															0		0
7. Changes in revaluation reserves of long-term tangible and intangible assets	33									-1.494.985				1.494.985		0		0
8. Profit or loss from re-evaluation of financial assets available for sale	34															0		0
9. Gains or losses arising on efficient cash flow hedging	35															0		0
10. Gains or losses arising on efficient hedge of a net investment in foreign countries	36															0		0
11. Share in other comprehensive income / loss of participating interest companies	37															0		0
12. Actuarial gains / losses on defined benefit plans	38															0		0
13. Other changes in equity non related to the owners	39			9.260						679.363				-716.248		-27.625	-2	-27.627
14. Taxation recognised directly in equity	40									-122.285				331.536		209.251		209.251
15. Increase/decrease in share (subscribed) capital (other than from reinvesting profit and other than arising from the pre-bankuptcy settlement procedure)	41															0		0
16. Increase of share (subscribed) capital by reinvesting profit	42															0		0
17. Increase of share (subscribed) capital arising from the pre-bankruptcy settlement procedure	43															0		0
18. Redemption of own (treasury) shares	44															0		0
19. Payment of share in profit / dividends	45															0		0
20. Other distribution of profits to the owners	46															0		0
21. Transfer to reserves by annual schedule	47														-201.662.286 201.662.286	0		0
22. Increase in reserves arising from the pre-bankruptcy settlement procedure	48															0		0
23. Balance 30 Yune of the prior period (04 do 22)	49		19.016.430	84.195.807	408.554	800.000		0	0	0 59.179.266		0 0						0 -201.420.647 -4.233.873 -42.054.463 59.431.430 17.376.967
APPENDIX TO THE STATEMENT OF CHANGES IN EQUITY (to be filled in by entrepreneur that prepares financial statements in accordance to IFRS)
I. OTHER COMPREHENSIVE INCOME OF THE CURRENT PERIOD, NET OF TAX (AOP 32 to 40)	50		0	0		0	0	0	0	0 0		0 0		0	0	0	0 0	0
II. COMPREHENSIVE INCOME OR LOSS OF THE CURRENT PERIOD (AOP 31 + 50)	51		0	0		0	0	0	0	0 0		0 0		0	0	0	0 0	0
III. TRANSACTIONS WITH THE OWNERS OF THE CURRENT PERIOD RECOGNISED DIRECTLY IN EQUITY (AOP 41 to 48)	52		0	0		0	0	0	0	0 0		0 0		0	0	0	0 0	0

Granolio d.d. Budmanijeva 5, HR-10000 Zagreb tel.: +385 | 6320 200; faks: +385 | 6320 222; e-mail: granolio@granolio.hr; http://www.granolio.hr

In Zagreb, 31 July 2018

Pursuant to the article 407. to 410. of the Capital market Law (Official Gazette 88/08, 146/08 and 74/09) the President of the Management Board of the Company Granolio d.d., Budmanijeva 5, Zagreb provides:

MANAGEMENT BOARD'S STATEMENT OF LIABILITY

The separate and consolidated financial statements of Granolio d.d. have been prepared pursuant to the International Financial Reporting Standards (IFRS) and Croatian Accounting Law.

The non-consolidated and consolidated financial statements for the period from 1 January 2018 till 30 June 2018 present complete and fair view of assets and liabilities, profit and loss, financial position and operations of the Company.

The management report for the six months period ended 30 June 2018 presents true and fair presentation of development and results of the Company's operations with description of significant risks and uncertainties the Company is facing.

President of the Management Board

Contact: Granolio d.d. Budmanijeva 5 10 000 Zagreb Hrvatska

Tel: +385 1 6320 200 e-mail: trzistekapitala@granolio.hr

MB: 1244272; OIB: 59064993527; IBAN HR6024020061100063532 Erste&Steiermarkische bank d.d. Rijeka. IBAN HR1423400091110416692 Privredna banka Zagreb, IBAN HR5123900011100014261 Hrvatska poštanska banka Zagreb; temeljni kapital: 19.016.430,00 kn uplaćen u cijelosti podijeljen na 1.901.643 redovnih dionica serije A nominalnog iznosa 10,00 kn; tvrtka je upisana u Trgovačkom sudu u Zagrebu, MBS: 080111595; predsjednik Uprave: Hrvoje Filipović, članovi Uprave: Vladimir Kalčić i Drago Šurina, predsjednik Nadzornog odbora: Franjo Filipović

Budmanijeva 5, HR-10000 Zagreb tel.: +385 | 6320 200; faks: +385 | 6320 222; e-mail: granolio@granolio.hr; http://www.granolio.hr

Zagreb, 31 July 2018

Statement of Executives responsible for preparing financial statements for the six months period

Pursuant to the current Croatian Accounting Act (Official Gazzette 109/07), the Management Board is required to ensure that the financial statements of Granolio d.d. for each financial period are prepared in accordance with the International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB) and that they give a true and fair view of the financial position and results of the Company's operations in the given period.

To the best of our knowledge, the complete shorten set of unaudited financial statements for the six months period give a true presentation of the Company's position as at 30 June 2018.

Reports prepared by:

Jasenka Kordić Accounting Dire d.d., Budmanlieva 5

DNV-GL

MB: 1244272; OIB: 59064993527; IBAN HR6024020061100063532 Erste&Steiermarkische bank d.d. Rijeka, IBAN HR1423400091110416692 Privredna banka Zagreb, IBAN HR5123900011100014261 Hrvatska poštanska banka Zagreb; temeljni kapital: 19.016.430.00 kn uplaćen u cijelosti podijeljen na 1.901.643 redovnih dionica serije A nominalnog iznosa 10.00 kn; tvrtka je upisana u Trgovačkom sudu u Zagrebu, MBS: 080111595; predsjednik Uprave: Hrvoje Filipović, članovi Uprave: Vladimir Kalčić i Drago Šurina, predsjednik Nadzornog odbora: Franjo Filipović