Kofola CescoSlovensko A.S.

Annual Report (ESEF) • Apr 11, 2024

Kofola ČeskoSlovensko a.s. A-0 A. BOARD OF DIRECTORS REPORT KOFOLA ČESKOSLOVENSKO A.S. CONSOLIDATED ANNUAL FINANCIAL REPORT OF THE ISSUER 2023 Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Table of contents A-1 Table of contents A. BOARD OF DIRECTORS REPORT ...................................................................................................................................... A-0 KOFOLA AT A GLANCE ............................................................................................................................................... A-4 CHAIRMAN´S STATEMENT ........................................................................................................................................ A-7 KOFOLA GROUP ........................................................................................................................................................ A-8 3.1. Kofola ČeskoSlovensko .................................................................................................................................... A-8 3.2. Kofola Group ................................................................................................................................................... A-8 3.3. Group structure ............................................................................................................................................... A-9 3.4. Successes and Awards ................................................................................................................................... A-10 BUSINESS OVERVIEW AND OTHER MATTERS ......................................................................................................... A-11 4.1. Business overview ......................................................................................................................................... A-11 4.2. Auditors remuneration.................................................................................................................................. A-19 4.3. Intellectual property and licences ................................................................................................................. A-20 4.4. Research and development and other information ...................................................................................... A-20 4.5. Technology and production and other non-current assets ........................................................................... A-20 4.6. Additions to property, plant and equipment and intangibles and their condition ....................................... A-21 4.7. Capital sources .............................................................................................................................................. A-21 4.8. Regulatory environment ............................................................................................................................... A-21 4.9. Ukraine crisis ................................................................................................................................................. A-22 4.10. Subsequent events ........................................................................................................................................ A-22 RISK MANAGEMENT ............................................................................................................................................... A-24 5.1. Principal risks faced by the Group ................................................................................................................. A-24 5.2. Approach to market trends and development .............................................................................................. A-32 NON-FINANCIAL INFORMATION ............................................................................................................................. A-33 6.1. Non-financial information ............................................................................................................................. A-33 CORPORATE GOVERNANCE REPORT ....................................................................................................................... A-34 7.1. Shares and shareholders ............................................................................................................................... A-34 7.2. Information pursuant to Capital Markets Act section 118.5a-k .................................................................... A-35 7.3. Corporate governance code .......................................................................................................................... A-38 7.4. Bodies of the Company ................................................................................................................................. A-38 7.5. Description of diversity policy applied to governance bodies ....................................................................... A-50 7.6. Financial reporting process ........................................................................................................................... A-50 REPORT ON RELATIONS .......................................................................................................................................... A-51 8.1. Structure of relations between related parties and the description of the entities ..................................... A-51 8.2. Structure of relations and ownership interests between related entities as at 31 December 2023 ............ A-53 8.3. Role of the controlled entity in the organisational structure ........................................................................ A-53 8.4. Method and means of control ...................................................................................................................... A-53 8.5. List of acts with value exceeding 10% of equity of controlled entity ............................................................ A-54 8.6. List of mutual contracts between controlled entity and controlling entity or between controlled entities . A-54 8.7. Assessment of advantages and disadvantages arising from relations between related entities .................. A-57 STATUTORY DECLARATION ..................................................................................................................................... A-58 INDEPENDENT AUDITOR´S REPORT ........................................................................................................................ A-59 TABLE OF CONTENTS Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Table of contents A-2 B. CONSOLIDATED FINANCIAL STATEMENTS ...................................................................................................................... B-0 CONSOLIDATED FINANCIAL STATEMENTS ................................................................................................................ B-1 1.1. Consolidated statement of profit or loss ........................................................................................................ B-1 1.2. Consolidated statement of other comprehensive income .............................................................................. B-2 1.3. Consolidated statement of financial position ................................................................................................. B-3 1.4. Consolidated statement of cash flows ............................................................................................................ B-4 1.5. Consolidated statement of changes in equity ................................................................................................. B-5 GENERAL INFORMATION .......................................................................................................................................... B-7 2.1. Corporate information .................................................................................................................................... B-7 2.2. Group structure ............................................................................................................................................... B-8 MATERIAL ACCOUNTING POLICIES ........................................................................................................................... B-9 3.1. Statement of compliance and basis of preparation ........................................................................................ B-9 3.2. Functional and presentation currency ............................................................................................................ B-9 3.3. Foreign currency translation ........................................................................................................................... B-9 3.4. Consolidation methods ................................................................................................................................. B-10 3.5. Accounting methods ..................................................................................................................................... B-12 3.6. New and amended standards adopted by the Group ................................................................................... B-23 3.7. Significant estimates and key management judgements .............................................................................. B-24 3.8. Standards issued but not yet effective .......................................................................................................... B-24 3.9. Approval of consolidated financial statements ............................................................................................. B-24 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ...................................................................................... B-25 4.1. Segment information .................................................................................................................................... B-25 4.2. Revenue ........................................................................................................................................................ B-29 4.3. Expenses by nature ....................................................................................................................................... B-29 4.4. Other operating income ................................................................................................................................ B-30 4.5. Other operating expenses ............................................................................................................................. B-30 4.6. Finance income ............................................................................................................................................. B-31 4.7. Finance costs ................................................................................................................................................. B-31 4.8. Income tax ..................................................................................................................................................... B-31 4.9. Earnings per share ......................................................................................................................................... B-33 4.10. Property, plant and equipment ..................................................................................................................... B-33 4.11. Intangible assets............................................................................................................................................ B-37 4.12. Investments in equity accounted investees .................................................................................................. B-41 4.13. Inventories .................................................................................................................................................... B-42 4.14. Trade and other receivables.......................................................................................................................... B-42 4.15. Cash and cash equivalents ............................................................................................................................ B-43 4.16. Equity ............................................................................................................................................................ B-43 4.17. Provisions ...................................................................................................................................................... B-45 4.18. Bank credits and loans .................................................................................................................................. B-45 4.19. Trade and other payables ............................................................................................................................. B-47 4.20. Future commitments, contingent assets and liabilities ................................................................................ B-47 4.21. Share based payment .................................................................................................................................... B-48 4.22. Leases ............................................................................................................................................................ B-48 4.23. Legal and arbitration proceedings................................................................................................................. B-49 4.24. Related party transactions ............................................................................................................................ B-50 4.25. Financial risk management ........................................................................................................................... B-51 4.26. Capital management ..................................................................................................................................... B-55 4.27. Financial instruments .................................................................................................................................... B-57 4.28. Headcount ..................................................................................................................................................... B-58 4.29. Acquisition of subsidiaries ............................................................................................................................. B-58 4.30. Acquisition of NCI .......................................................................................................................................... B-59 4.31. Ukraine crisis ................................................................................................................................................. B-59 4.32. Other information ......................................................................................................................................... B-59 4.33. Subsequent events ........................................................................................................................................ B-60 Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Table of contents A-3 C. SEPARATE FINANCIAL STATEMENTS ............................................................................................................................... C-0 SEPARATE FINANCIAL STATEMENTS ......................................................................................................................... C-1 1.1. Separate statement of profit or loss ............................................................................................................... C-1 1.2. Separate statement of other comprehensive income .................................................................................... C-1 1.3. Separate statement of financial position ........................................................................................................ C-2 1.4. Separate statement of cash flows ................................................................................................................... C-3 1.5. Separate statement of changes in equity........................................................................................................ C-4 GENERAL INFORMATION .......................................................................................................................................... C-5 2.1. Corporate information .................................................................................................................................... C-5 2.2. Group structure ............................................................................................................................................... C-6 MATERIAL ACCOUNTING POLICIES ........................................................................................................................... C-7 3.1. Statement of compliance and basis of preparation ........................................................................................ C-7 3.2. Functional and presentation currency ............................................................................................................ C-7 3.3. Foreign currency translation ........................................................................................................................... C-7 3.4. Accounting methods ....................................................................................................................................... C-8 3.5. New and amended standards adopted by the Company .............................................................................. C-18 3.6. Significant estimates and key management judgements .............................................................................. C-19 3.7. Standards issued but not yet effective .......................................................................................................... C-19 3.8. Approval of separate financial statements ................................................................................................... C-19 NOTES TO THE SEPARATE FINANCIAL STATEMENTS ............................................................................................... C-20 4.1. Segment information .................................................................................................................................... C-20 4.2. Revenue ........................................................................................................................................................ C-20 4.3. Expenses by nature ....................................................................................................................................... C-20 4.4. Other operating income ................................................................................................................................ C-21 4.5. Other operating expenses ............................................................................................................................. C-21 4.6. Finance income ............................................................................................................................................. C-21 4.7. Finance costs ................................................................................................................................................. C-22 4.8. Income tax ..................................................................................................................................................... C-22 4.9. Earnings per share ......................................................................................................................................... C-23 4.10. Property, plant and equipment ..................................................................................................................... C-24 4.11. Intangible assets............................................................................................................................................ C-25 4.12. Investments in subsidiaries ........................................................................................................................... C-26 4.13. Investments in equity accounted investees .................................................................................................. C-27 4.14. Trade and other receivables.......................................................................................................................... C-28 4.15. Cash and cash equivalents ............................................................................................................................ C-29 4.16. Equity ............................................................................................................................................................ C-29 4.17. Provisions ...................................................................................................................................................... C-30 4.18. Bank credits and loans .................................................................................................................................. C-30 4.19. Trade and other payables ............................................................................................................................. C-32 4.20. Future commitments, contingent assets and liabilities ................................................................................ C-33 4.21. Share based payment .................................................................................................................................... C-33 4.22. Leases ............................................................................................................................................................ C-34 4.23. Financial risk management ........................................................................................................................... C-35 4.24. Financial instruments .................................................................................................................................... C-39 4.25. Related party transactions ............................................................................................................................ C-40 4.26. Cash and non-cash financing activities .......................................................................................................... C-42 4.27. Headcount ..................................................................................................................................................... C-42 4.28. Acquisition of subsidiaries ............................................................................................................................. C-43 4.29. Ukraine crisis ................................................................................................................................................. C-43 4.30. Other information ......................................................................................................................................... C-44 4.31. Subsequent events ........................................................................................................................................ C-44 1. KOFOLA AT A GLANCE Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Kofola at a glance A-4 1. KOFOLA AT A GLAN CE KOFOLA GROUP one of top producers of branded non-alcoholic beverages in Central and Eastern Europe CZK 8.7 BN 2023 REVENUES 11 PRODUCTION PLANTS 2,037 EMPLOYEES LISTED ON PRAGUE STOCK EXCHANGE CZECHIA SLOVAKIA SLOVENIA CROATIA NO. 2 PLAYER IN THE SOFT DRINKS MARKET NO. 2 WATER BRAND NO. 1 PLAYER IN THE SOFT DRINKS MARKET NO. 1 WATER BRAND NO. 1 PLAYER IN THE SOFT DRINKS MARKET NO. 1 WATER BRAND NO. 4 PLAYER IN THE SOFT DRINKS MARKET NO. 2 WATER BRAND 1. KOFOLA AT A GLANCE Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Kofola at a glance A-5 FOR THE 12M PERIOD The results and ratios above are based on adjusted results. For details on financial performance and reconciliation of reported and adjusted results refer to section 4.1. 8,690 7,875 12M23 12M22 Revenue (CZKm) 6,209 1,513 968 5,641 1,410 824 CzechoSlovakia Adriatic Fresh & Herbs Revenue per main business segments (CZKm) 12M23 12M22 2.28 2.97 31-12-23 31-12-22 Net debt/LTM EBITDA 1,253 1,110 12M23 12M22 EBITDA (CZKm) 938 205 110 875 182 53 CzechoSlovakia Adriatic Fresh & Herbs EBITDA per main business segments (CZKm) 12M23 12M22 340 209 12M23 12M22 Profit/(loss) for the period (CZKm) 1. KOFOLA AT A GLANCE Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Kofola at a glance A-6 1. KOFOLA AT A GLANCE MAIN INFORMATION IN 2023: o Group´s revenue increased by CZK 814.8 mil. (10.3%). o Group´s EBITDA increased by CZK 143.0 mil. (12.9%). o Very good results driven by sales in main season. o Net profit increased by CZK 131.0 mil. o Demonstration of strength of the Group’s portfolio and customers’ loyalty to Kofola brands. o Entrance into new business segments (breweries, apple orchards, coffee plantations). Based on adjusted results. 2. CHAIRMAN´S STATEMENT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Chairman’s statement A-7 2. CHAIRMAN´S STATEME NT Dear shareholders, I'm pleased to begin this year's commentary by saying that nothing unusual happened in 2023. This is something we have almost forgotten over the past three years. After years of Covid, the energy crisis and inflation, we have been able to focus fully on growing our business. As you will see on the following pages of our annual report, it has been a very good year. At the beginning, we expected a 10-12% decline in soft drinks consumption and adjusted our cost structures accordingly. For most of the year, it looked like we would not be far off the mark, but we had a very good season and ended the year with a 7.9% decline in volumes compared to 2022. The reasons for our volume decline are mainly two - rising cost reflecting input prices and inflation in mandated household spending coupled with a decline in household purchasing power. This has been particularly felt in our traditional beverage divisions. On the other hand, LEROS and UGO trade showed strong volume growth with very solid margins. I was also happy to see the fulfilment of our vision. In 2023, we laid the foundation stone of our agricultural division. We want to understand our raw material base, so we have invested in an area that is unusual for us. Approximately 60 hectares of orchards and an 25% interest in 200 hectares of coffee plantations in Colombia are the first step into a new world. We need to get our feet wet first, but we believe this is the right way to go. The CzechoSlovakia segment, I believe, has bounced back from the bottom. The margin we have achieved in 2023 is very promising, but we are still a long way from our pre-2020 performance. Novelties like Targa Florio and Jupí popsicles, as well as stalwarts like Kofola on tap, are performing well. The Adriatic region grew by 7.3% in sales, with Slovenia performing particularly well. We launched the functional water ALL based on Radenska mineral water. In Croatia, our spring water Studena is gaining in popularity among consumers, with its very provocative advertising campaign attracting the attention of the younger generation in particular. At the end of the year, we succeeded in installing the first photovoltaic power plant in the Group on the roof of the Radenci production plant. LEROS completed its post-acquisition five-year run exactly as projected. All key channels were strong and sales for 2023 grew by approximately 8%. Our e-shop performed well and we opened our first store in Černý Most shopping centre at the end of the year. UGO is undoubtedly the rising star of the year. Strong revenue growth of almost 24% accompanied by strong profitability and an increase in satisfied customers was and is the picture of UGO in the last year. Drivers were the new rice-based Superbowls as well as the collaboration with F.H.Prager on Kombucha on tap. UGO still has huge potential and we have big plans for it in the coming years. Overall, we grew on an EBITDA level by CZK 143 million. We thus reached the upper end of our expected range of CZK 1.25 billion. We are projecting an EBITDA range of CZK 1.55 – 1.80 billion for 2024. This range considers not only the impact of the new acquisitions but also the further growth of the current Group. At the end of the year, we announced our entry into the beer segment - the acquisition of Pivovary CZ Group, which represents the breweries Zubr, Holba and Litovel. Overall, the fifth largest player on the Czech beer market with a long tradition, countless quality awards and strong distribution especially in central Moravia. Beer is the family silver, it is the strongest segment in FMCG, it has been here for 500 years and I believe it will be here for another 500 years. We are approaching the acquisition with great humility and will therefore keep this segment as a separate unit from Kofola's non-alcoholic division. In 2024, beer sales could account for around 15% of the entire Kofola Group. Finally, I want to thank everyone who pulled together with us in 2023: our employees, suppliers, customers, shareholders and consumers. We couldn't have done it without you. Thank you. Jannis Samaras Chairman of the Board of Directors Kofola ČeskoSlovensko a.s. 3. KOFOLA GROUP Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Kofola Group A-8 3. KOFOLA GROUP 3.1. KOFOLA ČESKOSLOVENSKO Kofola ČeskoSlovensko a.s. (“the Company”) is a joint-stock company and was registered on 12 September 2012 in the Czech Republic. Its registered office is Nad Porubkou 2278/31a, Poruba, 708 00 Ostrava, Czech Republic and the identification number is 24261980. Ostrava is also a Company’s principal place of business. The Company is recorded in the Commercial Register kept by the Regional Court in Ostrava (Czech Republic), section B, Insert No. 10735. The Company´s websites are http://www.firma.kofola.cz and the phone number is +420 595 601 030. LEI: 3157005DO9L5OWHBQ359. 3.2. KOFOLA GROUP Basic information Nature of Group's operations and principal activities is production and sale of non-alcoholic beverages. Kofola ČeskoSlovensko a.s. is part of the Kofola Group, one of the leading producers and distributors of non-alcoholic beverages in Central and Eastern Europe that belongs to the top players in CzechoSlovakia. The Group produces its products with care and love in eleven production plants located in the Czech Republic (six plants), Slovakia (two plants), Slovenia (one plant), Croatia (one plant) and Poland (one plant). The Group distributes its products using a wide variety of packaging, including kegs that are used in the HoReCa channel to serve our widely popular drink „Kofola Draught" distributed in KEG which is considered as one of our most environmentally friendly packaging. The Group distributes its products through Retail, HoReCa and Impulse channels. Besides traditional non-alcoholic drink segment, Group is also entering new smaller segments through the acquisition of coffee plantations and apple orchards, but with its latest acquisition of Pivovary CZ Group a.s. realized in March 2024, at is also entering the beer segment. Key brands Key own brands include carbonated beverages Kofola and Vinea, waters Radenska, Studenac, Rajec, Ondrášovka, Korunní and Kláštorná Kalcia, syrup Jupí, beverages for children Jupík, Semtex energy drink, UGO fresh juices and salads, Leros teas and coffee brands Café Reserva and Trepallini. In selected markets, the Group distributes among others Rauch, Evian, Vincentka or Dilmah products and under the licence produces Royal Crown Cola, Orangina, Rauch or Pepsi. The Group also produces and distributes water, carbonated and non-carbonated beverages and syrups under private labels for third parties, mostly big retail chains. Despite the fact that the Group’s portfolio includes more than 30, mostly well-established and recognisable brands with a wide market, the Group's key brand is Kofola. Main brands by categories are shown in the visualisation below: CATEGORY MAIN OWN BRANDS DISTRIBUTED AND LICENSED BRANDS Waters Non-carbonated beverages Carbonated beverages Syrups Fresh Bars & Salateries Other 3. KOFOLA GROUP Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Kofola Group A-9 3.3. GROUP STRUCTURE Group structure chart as at 31 December 2023 Description of the group companies Name of entity Place of business Segment Section B.4.1 Principal activities Ownership interest and voting rights 31.12.2023 31.12.2022 Holding companies Kofola ČeskoSlovensko a.s. Czech Republic CzechoSlovakia top holding company Cafe Dorado s.r.o. Czech Republic Fresh & Herbs holding company 50.00% n/a PIVOVARY TRIANGL s.r.o. Czech Republic n/a holding company 51.00% n/a Bilgola fresh s.r.o. Czech Republic Fresh & Herbs holding company 100.00% n/a Production and trading Kofola a.s. Czech Republic CzechoSlovakia production and distribution of non-alcoholic beverages 100.00% 100.00% Kofola a.s. Slovakia CzechoSlovakia production and distribution of non-alcoholic beverages 100.00% 100.00% UGO trade s.r.o. Czech Republic Fresh & Herbs operation of Fresh bars chain, production of salads 90.00% 90.00% RADENSKA d.o.o. Slovenia Adriatic production and distribution of non-alcoholic beverages 100.00% 100.00% Studenac d.o.o. Croatia Adriatic production and distribution of non-alcoholic beverages 100.00% 100.00% Premium Rosa Sp. z o.o. Poland Fresh & Herbs production and distribution of syrups and jams 100.00% 100.00% LEROS, s.r.o. Czech Republic Fresh & Herbs production and distribution of products from medicinal plants and quality natural teas 100.00% 100.00% Leros Slovakia, s.r.o. Slovakia Fresh & Herbs distribution of products from medicinal plants and quality natural teas 100.00% 100.00% F.H.Prager s.r.o. Czech Republic CzechoSlovakia production and distribution of ciders and kombucha 100.00% 100.00% Semtex Republic s.r.o. Czech Republic CzechoSlovakia marketing activities 100.00% 100.00% Zahradní OLLA s.r.o.* Czech Republic n/a production and distribution of self-watering clay pots 34.00% n/a FILIP REAL a.s. Czech Republic n/a hotel operation 100.00% n/a Bylinkárna s.r.o. Czech Republic Fresh & Herbs products completion and packaging 100.00% 100.00% General Plastic, a. s. Slovakia CzechoSlovakia production of hot-washed PET flakes and PET preforms 33.33% n/a AGRITROPICAL S.A.S. Colombia n/a coffee plantations 25.00% n/a Transportation SANTA-TRANS s.r.o. Czech Republic CzechoSlovakia road cargo transport 100.00% 100.00% * Established in Jun 2023. ** Acquired in Sep 2023. *** Established in Nov 2023. Acquired in May 2023. Acquired in Dec 2023. Effective share of Kofola Group in UGO trade s.r.o. is 100% after the acquisition of Bilgola fresh s.r.o. in Dec 2023. 3. KOFOLA GROUP Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Kofola Group A-10 3.4. SUCCESSES AND AWARDS PROKOP PR awards The Public Relations Association of the Slovak Republic has announced the winning entries of the 13 th annual PROKOP competition, which recognizes the best Slovak PR projects and campaigns of the past year. Kofola received 6 awards, including the main prize of Client of the Year. UGO Czech Superbrands Consumers and the expert jury of the Superbrands Brand Council of the Czech Republic awarded the UGO brand with the Czech Superbrands 2023 award. Superbrands is the most respected worldwide brand evaluation programme. The evaluation and nomination of brands for Superbrands awards is based on identical criteria in more than 90 countries worldwide, including the Czech Republic. CZECH TOP 100 Kofola has once again been ranked among the 100 admired companies in the Czech Republic. Golden Wedge In the Slovak advertising competition “Zlatý klínec”, which annually recognises and supports creativity and innovation in the field of advertising, communication and marketing, Kofola won two awards for its campaign “Láskyplný páteček”. We won 2 nd and 3 rd place in the categories Creativity in PR Campaign and Campaign. Among the brands Rajec scored as well, winning 2 nd place in the Film category for its Meditation campaign. Randstad Award 2023: Kofola is the winner among employers in the FMCG category Kofola ČeskoSlovensko was ranked, again, among the Top 10 most attractive employers in the Czech Republic in 2023, with an overall finish of 5 th place. In the FMCG category, it beat all competitors to win. Companies are selected based on the results of the Employer Brand Research preference survey. Kofola is the most trusted brand among carbonated soft drinks Kofola was named the most trusted brand in the carbonated soft drinks category. Czech consumers rated nearly 900 brands in an independent survey. Brands are nominated on the basis of sales. This ensures that the awarded brands are truly strong and trustworthy. 4. BUSINESS OVERVIEW AND OTHER MATTERS Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Business overview and other matters A-11 4. BUSINESS OVERVIE W AND OTHER MA TTERS 4.1. BUSINESS OVERVIEW Revenue development in 2023 Year 2023 was connected with the continuing unprecedented inflation, nevertheless, the price increase covered the decrease of volumes sold (in some categories there were even increases of volumes sold, mainly due to very good summer season). As a result, the Group’s sales increased year over year by CZK 814.8 million (10.3%). Revenue in the CzechoSlovakia business segment increased by CZK 568.2 million (10.1%) which is the biggest growth in the absolute terms and also a very satisfactory growth in percentage terms. Increase was driven mainly by summer season and, also, by very good sales in 4Q23. Adriatic region contributed to 2023 Group’s revenue as well, it grew by CZK 102.8 million (7.3%), mainly due to very good main tourist season with a support of sales from novelties, such as new functional drinks. The total sales of CzechoSlovakia and Adriatic segments represented 88.9% of total Group sales (89.5% in 2022). Decrease of percentage is mainly due to very positive sales growth rate of Fresh & Herbs segment, because this segment grew the most in percentage terms, by 17.5% (CZK 143.8 million), mainly thanks to UGO (which is on a very positive business trajectory) and LEROS (organic growth resulting from the consistent effort in all company areas). Adjustments of reported performance and position Presented below is a description of the financial performance and financial position of Kofola Group in 2023. It should be read along with the financial statements and with other financial information contained in the attached consolidated financial statements. The Board of Directors is presenting and commenting on the consolidated financial results adjusted for one-off events in the following sections of part A. 4. BUSINESS OVERVIEW AND OTHER MATTERS Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Business overview and other matters A-12 4.1.1 ADJUSTED CONSOLIDATED FINANCIAL RESULTS Adjusted consolidated financial results 2023 One-off adjustments 2023 adjusted CZK´000 000 CZK´000 000 CZK´000 000 Revenue 8,690.1 - 8,690.1 Cost of sales (4,802.7) - (4,802.7) Gross profit 3,887.4 - 3,887.4 Selling, marketing and distribution costs (2,487.8) - (2,487.8) Administrative costs (707.1) - (707.1) Other operating income/(costs), net 54.7 (28.2) 26.5 Operating profit/(loss) 747.2 (28.2) 719.0 Depreciation and amortisation 540.4 (6.0) 534.4 EBITDA 1,287.6 (34.2) 1,253.4 Finance income/(costs), net (265.3) - (265.3) Income tax (112.9) (0.8) (113.7) Profit/(loss) for the period 369.0 (29.0) 340.0 - attributable to owners of Kofola ČeskoSlovensko a.s. 365.4 (29.0) 336.4 * EBITDA refers to operating profit/(loss) plus depreciation and amortisation. ** Adjusted EBITDA refers to EBITDA adjusted for the effects of events and transactions that are non-recurring, extraordinary or unusual in nature, including in particular results from the sale of non-current assets and financial assets, costs not arising from ordinary operations, such as those associated with the impairment of property, plant and equipment, financial assets, goodwill and intangible assets, relocation costs and the costs of Group layoffs. The result of the Kofola Group for the 12-month period ended 31 December 2023 was affected by the following one-off items: In Other operating income/(costs), net: • Advisory costs of CZK 6.6 million (CzechoSlovakia and Adriatic segments). • Net costs connected with the closed Grodzisk Wielkopolski plant of CZK 3.4 million (Fresh & Herbs segment). • Restructuring costs of CZK 2.3 million (Fresh & Herbs segment). • Net gain on sold items of Property, plant and equipment of CZK 10.6 million recognized in all business segments, mainly Fresh & Herbs. • Gain on sale of the closed Grodzisk Wielkopolski plant of CZK 29.9 million (Fresh & Herbs segment). 4. BUSINESS OVERVIEW AND OTHER MATTERS Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Business overview and other matters A-13 Adjusted consolidated financial results 2022 One-off adjustments 2022 adjusted CZK´000 000 CZK´000 000 CZK´000 000 Revenue 7,875.3 - 7,875.3 Cost of sales (4,564.0) - (4,564.0) Gross profit 3,311.3 - 3,311.3 Selling, marketing and distribution costs (2,330.0) - (2,330.0) Administrative costs (466.5) - (466.5) Other operating income/(costs), net (32.2) 50.0 17.8 Operating profit/(loss) 482.6 50.0 532.6 Depreciation and amortisation 586.1 (8.3) 577.8 EBITDA 1,068.7 41.7 1,110.4 Finance income/(costs), net (82.8) (126.6) (209.4) Income tax (135.9) 21.7 (114.2) Profit/(loss) for the period 263.9 (54.9) 209.0 - attributable to owners of Kofola ČeskoSlovensko a.s. 269.1 (54.9) 214.2 * EBITDA refers to operating profit/(loss) plus depreciation and amortisation. ** Adjusted EBITDA refers to EBITDA adjusted for the effects of events and transactions that are non-recurring, extraordinary or unusual in nature, including in particular results from the sale of non-current assets and financial assets, costs not arising from ordinary operations, such as those associated with the impairment of property, plant and equipment, financial assets, goodwill and intangible assets, relocation costs and the costs of Group layoffs. The result of the Kofola Group for the 12-month period ended 31 December 2022 was affected by the following one-off items: In Other operating income/(costs), net: • Impairment of CZK 33.1 million in relation to plant Grodzisk Wielkopolski (Fresh & Herbs segment). • Advisory costs of CZK 7.9 million (mainly CzechoSlovakia and Adriatic segment). • Restructuring costs of CZK 7.0 million (mainly CzechoSlovakia segment). • Net costs connected with the closed Grodzisk Wielkopolski plant of CZK 4.6 million (Fresh & Herbs segment). • Costs connected with the support provided to parties impacted by the Ukraine war of CZK 1.4 million (CzechoSlovakia segment). • Costs arising on integration of acquired subsidiaries of CZK 0.1 million (CzechoSlovakia segment). • Release of impairment to items of Property, plant and equipment of CZK 1.0 million (CzechoSlovakia segment). • Net gain on sold items of Property, plant and equipment of CZK 3.1 million recognized in all business segments. In Finance income/(costs), net: • Gain on terminated derivatives of CZK 126.6 million (CzechoSlovakia segment). 4. BUSINESS OVERVIEW AND OTHER MATTERS Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Business overview and other matters A-14 4.1.2 FINANCIAL PERFORMANCE Adjusted consolidated financial results 2023 2022 Change Change CZK´000 000 CZK´000 000 CZK´000 000 % Revenue 8,690.1 7,875.3 814.8 10.3% Cost of sales (4,802.7) (4,564.0) (238.7) 5.2% Gross profit 3,887.4 3,311.3 576.1 17.4% Selling, marketing and distribution costs (2,487.8) (2,330.0) (157.8) 6.8% Administrative costs (707.1) (466.5) (240.6) 51.6% Other operating income/(costs), net 26.5 17.8 8.7 48.9% Operating profit/(loss) 719.0 532.6 186.4 35.0% EBITDA 1,253.4 1,110.4 143.0 12.9% Finance income/(costs), net (265.3) (209.4) (55.9) 26.7% Income tax (113.7) (114.2) 0.5 (0.4%) Profit/(loss) for the period 340.0 209.0 131.0 62.7% - attributable to owners of Kofola ČeskoSlovensko a.s. 336.4 214.2 122.2 57.0% Revenue Increase of Group’s revenue demonstrates the strength of its brands in their local markets where the customers’ demand acted well on our well managed focus on our strong brands. 2023 2022 Change Business segments Revenue Share Revenue Share CZK´000 000 % CZK´000 000 % CZK´000 000 % CzechoSlovakia 6,209.4 71.5% 5,641.2 71.6% 568.2 10.1% Adriatic 1,513.1 17.4% 1,410.3 17.9% 102.8 7.3% Fresh & Herbs 967.6 11.1% 823.8 10.5% 143.8 17.5% Total 8,690.1 100.0% 7,875.3 100.0% 814.8 10.3% CzechoSlovakia segment sales grew in all packaging formats. On premise (drinks in KEGs and glass bottles) grew the most, mainly thanks to very positive summer season sales of draught Kofola. On the go (drinks in cans and 1l- packaging) and At home (syrups and drinks in 1.5l+ packaging) formats sales grew as well, with double digit growth rate. On premise format sales grew also volume wise. Kofola, Royal Crown Cola, Vinea and Korunní brands grew the most in percentage terms. Sales realized by the Adriatic segment grew mainly due to successful tourist season and also due to support of novelties, such as Radenska FunctionALL. The biggest increase was achieved by Radenska, Ora, Studena and Pepsi brands. Fresh & Herbs segment revenue was driven by UGO and LEROS. UGO is on an excellent business trajectory. LEROS has experienced excellent performance in e-shop that was supported by growth also in other distribution channels. 2023 2022 Change Product lines Revenue Share Revenue Share CZK´000 000 % CZK´000 000 % CZK´000 000 % Carbonated beverages 3,396.7 39.1% 2,962.6 37.6% 434.1 14.7% Waters 2,831.1 32.6% 2,639.4 33.5% 191.7 7.3% Non-carbonated beverages 707.4 8.1% 682.6 8.7% 24.8 3.6% Syrups 543.6 6.3% 514.0 6.5% 29.6 5.8% Fresh bars & Salads 481.6 5.5% 394.1 5.0% 87.5 22.2% Other 729.7 8.4% 682.6 8.7% 47.1 6.9% Total 8,690.1 100.0% 7,875.3 100.0% 814.8 10.3% The activities of the Group concentrate on the production of beverages in four market categories: carbonated beverages (including cola beverages), non-carbonated beverages, types of bottled water and syrups. Together these categories accounted for 86.1% of the Group’s revenue in 2023 (in 2022: 86.3%). Increase of sales of Carbonated beverages was driven by sales of Kofola, Vinea and Royal Crown Cola. 4. BUSINESS OVERVIEW AND OTHER MATTERS Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Business overview and other matters A-15 2023 2022 Change Sales by countries (per end customer) Revenue Share Revenue Share CZK´000 000 % CZK´000 000 % CZK´000 000 % Czech Republic 4,897.6 56.4% 4,430.9 56.3% 466.7 10.5% Slovakia 2,103.5 24.2% 1,869.9 23.7% 233.6 12.5% Slovenia 960.3 11.1% 878.2 11.2% 82.1 9.3% Croatia 426.7 4.9% 417.0 5.3% 9.7 2.3% Poland 109.3 1.3% 88.1 1.1% 21.2 24.1% Other 192.7 2.1% 191.2 2.4% 1.5 0.8% Total 8,690.1 100.0% 7,875.3 100.0% 814.8 10.3% The allocation of revenue to a particular country segment is based on the geographical location of customers. Revenue in Croatia grew less than in other countries because the price increase combined with country’s transition to EUR lead to bigger decrease of volumes sold than in other countries of the Group. Other represents the Group’s export. Cost of sales Group’s Cost of sales increased less than sales due to savings in energy but also due to fact that there was a positive sales mix and decreasing sugar consumption. Selling, marketing and distribution costs Selling, marketing and distribution costs increased mainly as a result of increased marketing costs (there were savings in prior year) but also sales costs (salaries). Administrative costs Administrative costs increased mainly as a result of increased employee bonuses and the increase of the share based payment reserve (overall income statement effect of CZK 180.6 million) due to positive business results and increase of the expected Equity Value (EBITDA multiple decreased by the Net debt) as of 31-12-26 which is the end of vesting period for the performance part of the share based payment program. EBITDA Adjusted EBITDA 2023 2022 CZK´000 000/% CZK´000 000/% EBITDA 1,253.4 1,110.4 EBITDA margin 14.4% 14.1% * EBITDA refers to operating profit/(loss) plus depreciation and amortisation. ** Calculated as (EBITDA/Revenue)100%. 2023 2022 Change Adjusted EBITDA by business segments EBITDA EBITDA margin EBITDA EBITDA margin CZK´000 000 % CZK´000 000 % CZK´000 000 % CzechoSlovakia 938.0 15.1% 875.1 15.5% 62.9 7.2% Adriatic 204.7 13.5% 181.8 12.9% 22.9 12.6% Fresh & Herbs 110.7 11.4% 53.5 6.5% 57.2 106.9% Total 1,253.4 14.4% 1,110.4 14.1% 143.0 12.9% Czechoslovakia business segment results are influenced by the effect of change in the share based payment reserve which increased due to positive results which were driven by all business segments. Increase in Fresh & Herbs segments was driven by UGO and further supported by positive development of LEROS. 4. BUSINESS OVERVIEW AND OTHER MATTERS Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Business overview and other matters A-16 Finance income/(costs), net Worse financial result was influenced mainly by higher interest expense from bank credits and loans (by CZK 31.6 million) due to higher interest rates but also due to increased loan balance. There was also a negative FX effect of CZK 34.7 million, mainly from Group’s bank credits and loans. Income tax Income tax remained flat which is mainly due to recognition of the deferred tax asset on tax losses in UGO due to its positive business development. 4.1.3 FINANCIAL POSITION Consolidated statement of financial position 31.12.2023 31.12.2022 Change Change CZK´000 000 CZK´000 000 CZK´000 000 % Total assets 8,027.6 7,503.4 524.2 7.0% Non-current assets 5,130.3 5,089.0 41.3 0.8% Property, plant and equipment 3,113.3 3,098.5 14.8 0.5% Intangible assets 1,159.8 1,177.7 (17.9) (1.5%) Goodwill 662.3 648.0 14.3 2.2% Investments in equity accounted investees 75.7 - 75.7 n/a Deferred tax assets 38.6 - 38.6 n/a Other 80.6 164.8 (84.2) (51.1%) Current assets 2,897.3 2,414.4 482.9 20.0% Inventories 706.2 766.4 (60.2) (7.9%) Trade and other receivables 1,119.9 998.0 121.9 12.2% Cash and cash equivalents 1,071.1 626.4 444.7 71.0% Other 0.1 23.6 (23.5) (99.6%) Total equity and liabilities 8,027.6 7,503.4 524.2 7.0% Equity 1,457.9 1,287.6 170.3 13.2% Non-current liabilities 3,762.7 3,664.0 98.7 2.7% Bank credits and loans 3,153.9 3,058.2 95.7 3.1% Lease liabilities 215.9 252.6 (36.7) (14.5%) Deferred tax liabilities 264.5 303.8 (39.3) (12.9%) Other 128.4 49.4 79.0 159.9% Current liabilities 2,807.0 2,551.8 255.2 10.0% Bank credits and loans 447.3 491.8 (44.5) (9.0%) Lease liabilities 113.7 118.9 (5.2) (4.4%) Trade and other payables 1,982.4 1,832.8 149.6 8.2% Other 263.6 108.3 155.3 143.4% ASSETS Property, plant and equipment remained relatively flat as a net result of additions (incl. acquisitions) of CZK 531.5 million, depreciation charge of CZK 472.0 million, upward FX revaluation of foreign Group entities’ assets of CZK 35.5 million and net book value of assets sold/disposed of CZK 90.5 million arising mainly from the sale of closed Grodzisk Wielkopolski plant. The most significant additions realized by the Group in 2023 were represented by investments into the production machinery and buildings and constructions. Intangible assets decreased mainly as a result of amortization charge of CZK 76.3 million. Investments in equity accounted investees represent mainly the Group’s share in General Plastic and Cafe Dorado. Deferred tax asset represents mainly the asset from tax losses which was recognized in UGO trade. Other non-current assets contain mainly prepayments and deferred expenses. Derivatives balance decreased by CZK 67.6 million due to change in the yield curves. Trade and other receivables increased mainly due to higher trade receivables (CZK 135.7 million) which was driven by increased sales. Inventories decreased due to higher sales at the end of 2023. 4. BUSINESS OVERVIEW AND OTHER MATTERS Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Business overview and other matters A-17 LIABILITIES Increase of the Bank credits and loans is a result of the regular loan repayment (CZK 294.9 million), overdraft and CAPEX tranche drawing (CZK 285.8 million) and upward FX revaluation (CZK 57.7 million). Lease liabilities decreased mainly as a result of lease repayments (CZK 137.3 million) that were higher than lease additions (CZK 95.6 million). The Group´s provisions increased mainly as a result of provisions for employee bonuses and provisions related to share based payment. Trade and other payables increased mainly due to higher trade payables (CZK 75.1 million) but also due to deferred/contingent liabilities related to acquisition of FILIP REAL and Bilgola fresh. The Group’s consolidated net debt (calculated as total non-current and current liabilities relating to credits, loans, leases and other debt instruments less cash and cash equivalents) amounted to CZK 2,859.7 million as at 31 December 2023, which represents a decrease of CZK 435.3 million. Decrease is attributable mainly to positive Group results but was influenced also by cash inflow from the sold Grodzisk Wielkopolski plant of CZK 119.0 million. The Group´s consolidated net debt / Adjusted LTM EBITDA as at 31 December 2023 was of 2.28 (as of 31 December 2022: 2.97). 4.1.4 CASHFLOWS Cash flows from operating activities were higher by CZK 561.9 million mainly due positive Group results but also due to changes in working capital (effect of CZK 110.7 million). Cash flows from investing activities were relatively flat and decreased by CZK 13.9 million which is a net effect of increased cash inflows from sale of Property, plant and equipment (sale of the closed Grodzisk Wielkopolski plant described above) and increased cash outflows in relation to acquisitions. Cash flows from financing activities were lower by CZK 360.0 million mainly due lower loan drawings and higher loan repayments. There was also the cash inflow in 2022 resulting from sold derivatives (CZK 126.6 million). From the total balances in relation to repayments and drawings of loans and bank credits presented within the Consolidated statement of cash flows, amount of CZK 112.2 million represents the decrease of Group’s overdraft (in 2022: increase of CZK 166.7 million). 4.1.5 TRANSACTIONS WITH RELATED PARTIES THAT SUBSTANTIALLY INFLUENCED FINANCIAL PERFORMANCE There were no transactions with related parties that substantially influenced financial performance for the reported period ended 31 December 2023. 4.1.6 MAIN RISKS AND UNCERTAINTIES IN SUBSEQUENT PERIOD The continuance of war keeps risks and uncertainties for our daily operations and foreseeable future on the table. We have seen historical increases of energy prices that impact not only our production costs. Due to increasing prices of our inputs in prior years (mainly sweeteners, PET, logistics and energy), we have already significantly increased prices to our customers. It is worth to be mentioned that we don’t see any significant decrease in demand for our products yet. Higher prices reflected in higher inflation rate have many adverse effects. As they decrease the value of savings and change purchasing habits, our consumers can still be expected to decrease the amount of their non-mandatory expenses (e.g. by less visits of pubs and restaurants). Higher inflation led also to a significant increase of interest rates in prior year. As a reaction, we have transferred 60% of our bank credits and loans to EUR in June 2022 from which we realize significant savings on interest expense. The substantial part however remains in Czech Crowns and as such is subject to risk of interest rate fluctuation. Currently, we have very solid financial position. We have sufficient cash balances and flexibility in our expenses. We also closely monitor the situation and create scenarios during our regular top management meetings. Still, we believe that the war ends soon and with it also risks of continuing price increases, and the uncertainty about upcoming development in general. 4. BUSINESS OVERVIEW AND OTHER MATTERS Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Business overview and other matters A-18 4.1.7 EXPECTED DEVELOPMENT IN SUBSEQUENT PERIOD In 2024, the CzechoSlovakia segment will continue to build and further enhance its competence of being comprehensive supplier with the complete offer of beverages. In the Retail channel, CzechoSlovakia segment will mainly support its most significant brands Kofola, Rajec, Jupí and others while the focus will also be given on the further development of mineral waters Kláštorná Kalcia and new functional Korunní water in can. In the HoReCa channel, the priority will again be given to draught Kofola, further support will be provided to Royal Crown Cola brand and to tea business represented by brands Leros and Dilmah, as well as the latest portfolio innovations represented by Targa Florio tonic. The CzechoSlovakia segment will manage continuously increasing costs translating them into sales prices and seeking further internal optimizations. In 2024, Adriatic is poised to deliver steady performance without significant surprises. We observe a notable decline in electricity and gas prices, while the stabilization of raw material costs is expected to enhance profitability across both markets. Notably, successful business negotiations have been finalized with two key customers in Croatia, making new collaborations compared to the previous year. Nevertheless, challenges persist due to the escalation of wages and labor costs, particularly in Croatia. Furthermore, we are expanding our product portfolio by introducing two new flavors of Radenska functional waters, supported with strong marketing campaign. Additionally, we plan to relaunch the instant beverage category by mid-year. In LEROS, according to the first three months of 2024, revenues are on the right track and we should deliver budgeted revenue and EBITDA. There are three main tasks ahead of LEROS in 2024. First, we should build our own sales team for pharmacy which will boost our pharma revenue in the future. Second, we will continue in developing our own retail (shops and pop-up shops) which will enable us to diversify our revenue portfolio. Thirds, we will install a new production line that will help us to upgrade our "SUKL" (certified medicaments) portfolio in the future. In Premium Rosa, we are also on a good revenue track. The company is working well after significant restructuring in the second half of 2023. Budgeted revenue and EBITDA should be delivered. We expect to widen the portfolio of products sold by Premium Rosa (with products of Kofola Group) as well as we will be seeking for new customers on the domestic market (in Poland) and abroad. UGO continues to grow in transactions and revenues in all segments. UGO QSR (Quick Service Restaurants) is planning in 2024 to optimize the restaurant portfolio by closing four weak locations and openning four new better and bigger ones. Due to successful QSR development, there is a higher interest from franchise partners, both current and new. As such, further development could be announced in the second half of 2024. UGO is growing also in the retail segment due to higher interest from retailers and end consumers for the pascalized fresh juices, smoothies, lemonades and newly kombuchas. New wraps & sandwiches segment is developing for the food production plant of UGO. We will further continue in our significant contributions to the environmental protection and we take ESG as a very important part of our business. We plan to further support a development of our own brands and also a distribution of our partners’ brands with focus on CEE region. We will also focus on the successful takeover and further development of newly acquired companies, see note 4.10. There can still be some unexpected challenges in place because of the war at Ukraine. 4.1.8 ALTERNATIVE PERFORMANCE INDICATORS Even though ESMA (European Securities and Markets Authority) does not require a reconciliation of Alternative Performance Indicators (APM) to financial statements if the APM can be defined from the financial statements, we add such a reconciliation for better understanding of our calculation of EBITDA and Net debt. 4. BUSINESS OVERVIEW AND OTHER MATTERS Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Business overview and other matters A-19 Definition and reconciliation of APM to the financial statements (FS) FS Line in FS Revenue A Statement of Profit or Loss Revenue Cost of sales (B) Statement of Profit or Loss Cost of sales Gross profit A+B=C Statement of Profit or Loss Gross profit Selling, marketing and distribution costs (D) Statement of Profit or Loss Selling, marketing and distribution costs Administrative costs (E) Statement of Profit or Loss Administrative costs Other operating income/(costs), net F Statement of Profit or Loss Other operating income + Other operating expenses Operating profit/(loss) C+D+E+F=G Statement of Profit or Loss Operating profit/(loss) Depreciation and amortisation H Statement of Cash Flows Depreciation and amortisation EBITDA G+H=I - - Bank credits and loans J Statement of Financial Position Bank credits and loans Lease liabilities K Statement of Financial Position Lease liabilities Cash and cash equivalents L Statement of Financial Position Cash and cash equivalents Net debt J+K-L =M - - Net debt/EBITDA M/I - - * In both current and non-current liabilities. Purpose of APM: A. EBITDA The Company uses EBITDA because it is an important economic indicator showing a business’s operating efficiency comparable to other companies, as it is unrelated to the Company’s depreciation and amortisation policy, capital structure and tax treatment. EBITDA indicator is also treated as a good approximation for operating cash flow. Additionally, it is one of the fundamental indicators used by companies worldwide to set their key financial and strategic objectives. The Company uses EBITDA indicator also in budgeting process, benchmarking with its peers and as a basis for remuneration for key management staff. Such indicator is also used by stock exchange and bank analysts. B. Net debt The Company uses Net debt indicator because it shows the real level of a Company’s financial debt, i.e. the nominal amount of debt net of cash, cash equivalents, and highly liquid financial assets held by the Company. The indicator allows assessing the overall indebtedness of the Company. C. Net debt/EBITDA The Company uses Net debt/EBITDA indicator because it indicates a Company’s capability to pay back its debt as well as its ability to take on additional debt to grow its business. Additionally, the Company uses this indicator to assess the adequacy of its capital structure and stability of its expected cash flows. Such indicator is also used by stock exchange and bank analysts. 4.1.9 DIVIDEND POLICY On 21 October 2021, the Board of Directors of the Company approved the Company's dividend policy for the periods of 2021 to 2023. The intention of the Board of Directors is to maintain the current trend and distribute approximately CZK 300 million to shareholders in each financial year. This currently represents approximately CZK 13.46 per share before tax. The realisation of this intention is conditional on sufficient funds being available for distribution (distributable resources) without jeopardising the Company's financial stability. This dividend policy was announced at the General Meeting on 29 November 2021. The actual amounts of dividends for 2023 and 2022 are described in section B.1.5. 4.2. AUDITORS REMUNERATION The amounts charged by professional advisors and auditors are presented within sections B.4.32 and C.4.30. 4. BUSINESS OVERVIEW AND OTHER MATTERS Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Business overview and other matters A-20 4.3. INTELLECTUAL PROPERTY AND LICENCES Intellectual property and licenses The Group relies on the strength of its brands which are registered trademarks protected by local legislation in its countries of operation. The Group has also registered a number of industrial designs (drink bottles and other beverage packaging). Kofola ČeskoSlovensko a.s. owns the most licenses, trademarks for branded beverages and similar copyrights, for the use of which the other Group companies pay royalties. The Vinea and Kláštorná Kalcia trademarks are the exception and are owned by Kofola a.s. (SK). Slovenian brands Radenska and Ora are owned by RADENSKA d.o.o. and are mainly sold in the Adriatic region. Café Reserva is owned by LEROS, s.r.o. Some of the key trademarks and industrial designs are also protected at international level as (i) Community Trade Marks (CTMs) (e.g. the Kofola, Rajec and Vinea trademarks) or Registered Community Designs (RCDs), which are registered through EUIPO and protected in the EU as a whole, or (ii) international trademarks (IRTs) (e.g. the Jupík, Vinea trademarks), which are registered through WIPO and protected in a number of other specific export countries (e.g. Italy and Switzerland). The Group uses a number of registered Internet domains, including "kofola.cz" & "kofola.sk", "jupik.com", "rajec.com", "ugo.cz" & "ugo.sk", "radenska.si", "ondrasovka.cz", "korunni.cz", "semtex-energy.cz" or "targaflorio.cz” and "targaflorio.sk". The Group entered into the following main licensor and distribution agreements: • distribution agreements under which the Group has the exclusive right to distribute Rauch's products in the territory of the Czech Republic and Slovakia, • distribution agreement under which the Group has the exclusive right to distribute Evian products (water) in the territory of the Czech Republic and Slovakia, • distribution agreement under which the Group has the exclusive right to distribute Vincentka (natural mineral water) in the territory of the Czech Republic, • licensor agreement under which the Group has the exclusive right to purchase beverage concentrates to manufacture, bottle and sell carbonated beverage RC Cola, • licensor agreement under which the Group has the exclusive right to purchase beverage concentrates to manufacture, bottle and sell carbonated beverage Orangina, • licensor and distribution agreement under which the Group has the exclusive right to produce and distribute the PepsiCo portfolio products in the Slovenian market and since January 2016 also in the Croatian market. In the Company´s opinion, there are no other patents or licences, industrial, commercial or financial contracts or new manufacturing processes which would be material to the Company´s or the Group's business or profitability and which are not included in the annual report. 4.4. RESEARCH AND DEVELOPMENT AND OTHER INFORMATION In 2023, the Group carried out research and development activities and incurred costs of CZK 6.6 million (2022: CZK 5.6 million). The Company does not operate an organisational unit abroad. 4.5. TECHNOLOGY AND PRODUCTION AND OTHER NON-CURRENT ASSETS The Group manufactures its products in eleven main production plants located in the Czech Republic (six plants – Krnov, Mnichovo Hradiště, Strážnice, Jažlovice, Ondrášov and Stráž nad Ohří), Slovakia (two plants - Rajecká Lesná, Kláštor pod Znievom), Poland (one plant - Zlotoklos), Slovenia (one plant - Radenci) and Croatia (one plant - Lipik). The Group uses state-of-the-art, modern production equipment. Total CAPEX (excluding acquisitions, including lease addition) in the last 3 years amounted to CZK 1,445.5 million. The Group has also invested substantial amounts in equipment used in the HoReCa distribution channel, supporting further growth in this channel (kegs, fridges etc.). As a consequence, the Group's manufacturing facilities do not need major investments in the next few years. In addition, the Group has spare production capacities that allow, if necessary, quickly increase its production. Production lines are constructed by renowned producers such as Sidel, KHS and Kronnes. The Group has implemented modern management methodologies: WCM (World Class Management), SPC (Statistics Process Control) and TPM (Total Productive Maintenance). 4. BUSINESS OVERVIEW AND OTHER MATTERS Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Business overview and other matters A-21 In addition, the Group's production plants are used as main logistic centres for distribution. Distribution is realised partly by external logistic providers, but also by our own logistic company SANTA-TRANS s.r.o., which operates approximately 70 trucks and vans. The Group's material assets are primarily production, distribution and storage facilities. Accordingly, the Group's material assets consist primarily of buildings, warehouses and other constructions, as well as real estate properties (plots of land) on which these constructions are located and machinery and equipment in these constructions (e.g. production lines). 4.6. ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLES AND THEIR CONDITION The Group finances its operations by cash flows from its operating activities, long- and short-term loans and leases. Additions of Property, plant, equipment (PPE) and Intangible assets (IA) 2021 2022 2023 CZK´000 000 CZK´000 000 CZK´000 000 Land 8.2 12.2 3.3 Buildings and constructions 76.9 64.6 73.0 Plant and equipment 168.7 278.6 206.7 Vehicles 76.0 31.9 47.2 Leasehold improvement 0.1 1.3 1.9 Returnable packages 21.1 65.4 34.4 Other non-current assets 0.2 0.1 0.6 Non-current assets under construction, Prepayments for PPE 54.3 41.2 103.4 Software 7.3 11.4 27.5 Trademarks and other rights 1.7 0.4 1.6 Intangible assets under development, Prepayments for IA 2.1 3.3 18.9 Total 416.6 510.4 518.5 * excluding acquisitions, including lease additions Allocation of Property, plant, equipment and Intangible assets additions 2021 2022 2023 CZK´000 000 CZK´000 000 CZK´000 000 Czech Republic 293.1 334.0 337.0 Slovakia 80.8 88.9 83.8 Slovenia 30.0 60.7 54.6 Croatia 12.0 25.4 40.3 Poland 0.7 1.4 2.8 Total 416.6 510.4 518.5 * excluding acquisitions, including lease additions Condition of Group’s assets is in line with their useful life, they are subject to regular maintenance and replacement at the end of their useful life. Future investments are expected to be on the similar level as in prior periods and will comprise mainly investments into the production, warehousing, vehicles and returnable packaging. 4.7. CAPITAL SOURCES Group's activities are financed through various sources of capital as presented within the statement of financial position. Particular material balances are further described in part B and part C of this report. Bank credits and loans represent the significant source of finance to both Company and Group and payment schedules of already provided bank loans are dependent on Group’s fulfilment of specified financial indicators (covenants). 4.8. REGULATORY ENVIRONMENT The Group produces and distributes non-alcoholic beverages in many countries. As a consequence, the Group’s operations are subject to the regulation of various legal systems. In particular, this refers to taxation (including VAT rates), labour law, social insurance regulations, matters relating to the granting of licences and permits, advertisement regulation, beverage industry regulations, etc. Since the Company´s shares have been admitted to trading on the Prague Stock Exchange, the shareholders have certain disclosure requirements arising from the provisions of the Czech Capital Markets Act. The financial statements have to be 4. BUSINESS OVERVIEW AND OTHER MATTERS Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Business overview and other matters A-22 prepared in line with International Financial Reporting Standards (“IFRS Accounting Standards”) and the interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”) as adopted by the EU. The Company is also subject to supervision of relevant regulatory authorities (such as Czech National Bank). Moreover, the Company is subject to certain aspects of the European Union regulations. The ESEF (European Single Electronic Format) Regulation requires that all issuers with securities listed on an EU regulated market prepare their annual financial reports in xHTML and mark-up the consolidated financial statements contained therein using XBRL tags and the iXBRL technology. However, the users will be still able to find also standard pdf format version of this annual report on the Company’s website https://investor.kofola.cz/en. The Company is obliged to prepare also a non-financial report (see note 6) and remuneration report which is issued as a separate document and will be available for download on the above provided website link. 4.9. UKRAINE CRISIS War in Ukraine brought new risks and uncertainty to our business. The Group’s management is very closely monitoring the development of the war conflict between Russia and Ukraine. The Group has already provided various forms of support to Ukrainian civilians and intends to continue in these activities as it cares about people in need. The whole situation impacts people, companies and states all around the world. The Group has no material direct exposure either to Russia or Ukraine. The war however impacts whole European economy and led to price increases which was perceived also by the Group. Increasing input prices do not, however, represent a threat to the Group’s ability to continue as a going concern as it has sufficient financial resources and is able to control its costs (e.g. by savings in marketing expenses) to a certain level. In case of the ongoing cost pressure, the Group may also increase the output prices to ensure profitability level expected by its stakeholders. As of the date of this report, the production is in operation, we have continuing supplies of materials and energy (we are in close contact with our key suppliers). There were optimizations in CAPEX and OPEX and we plan to continue in this trend in the upcoming period based on actual development. The Group updates its risk matrix on a regular basis and is aware of increased risks in connection with the war in Ukraine (such as already mentioned input prices). There can also be an increased frequency of cyber-attacks but we haven’t been subject to any such attack that would impact our daily operations or would lead to leakage of the sensitive information. Our IT department monitors the situation on the daily basis and executes necessary steps to continue in the defence of our data and systems. The Group believes to have sufficient resources from current cash balance and overdrafts. We have an open and long-term relationship with our supportive banking group to whom we communicate our business outlook regularly. Based on the above analysis and assumptions, including the severe but plausible scenarios, management concluded that the Group will have sufficient resources to continue its business for a period of at least 12 months from the reporting date. As a result, the Group used the going concern basis of accounting in preparing these financial statements. 4.10. SUBSEQUENT EVENTS In January 2024, the Company has acquired a 49% stake in MIXA VENDING s.r.o., a company focused on the operation of beverage and food vending machines. The agreement includes a three-year option for Kofola to acquire a majority stake in the company. In 2022, MIXA VENDING s.r.o. reached a turnover of over CZK 170 million and EBITDA over CZK 36 million. In January 2024, the Company has established a new subsidiary Supplo s.r.o. which is intended for B2B sales of products and services through the Marketplace model. In January 2024, the Company has acquired a 100% share in PRAGEROVY SADY LIBINA s.r.o., a company that owns apple orchards in the Úsovsko region. In February 2024, the Company has drawn the remaining balance of CAPEX loan tranche of CZK 130 million. In March 2024, PIVOVARY TRIANGL s.r.o. ("TRIANGL") became a 100% owner of Pivovary CZ Group a.s. and FONTÁNA PCZG s.r.o. The shareholders of TRIANGL are Kofola ČeskoSlovensko a.s. (51%), RSJ PE SICAV a.s. (29%) and ÚSOVSKO a.s. (20%). Company Pivovary CZ Group a.s. develops the traditional beer brands Holba, Zubr and Litovel. The Kofola Group can thus enter another category at the regional level in which it can use its business, distribution and marketing know-how. In 2022, Pivovary CZ Group a.s. reached a turnover of over CZK 1,300 million and EBITDA over CZK 250 million. 4. BUSINESS OVERVIEW AND OTHER MATTERS Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Business overview and other matters A-23 In March 2024, the Group has drawn a loan of CZK 500 million in connection with the acquisition of Pivovary CZ Group. TRIANGL has received a capital contribution of CZK 800 million (from all shareholders on a pro rata basis), intercompany loans of CZK 315 million (from all shareholders on a pro rata basis) and bank loan of CZK 300 million in March 2024.Interest rate swaps have been concluded in relation to EUR part of recently drawn loans intended for CAPEX purposes in January 2024 and March 2024. In March 2024, company P.H.Lager s.r.o. was established. The company’s purpose is to focus on the production of F.H.Prager’s portfolio. Kofola ČeskoSlovensko a.s. has purchased 36,997 shares of its own shares (which represents 0.17% of the Company´s share capital) in the total value of CZK 10,063 thousand (CZK 272 per share) from RADENSKA d.o.o. in March 2024. The individual share price was determined based on the price quoted at Prague Stock Exchange. As such, the contract was concluded at market terms. The shares have nominal value of CZK 50 per individual share. The sole purpose of the acquisition of own shares by the Company was to meet obligations arising from share option programmes, or other allocations of shares, to employees or to members of the administrative, management or supervisory bodies of the Company or of an associate company. Substantial majority of shares has been transferred to option scheme participants in March 2024. The settlement agreement on CZK 90 million was concluded between the Company and RADENSKA d.o.o. that settled the outstanding loan payable by the Company and part of the dividend payble by RADENSKA. No other events have occurred after the end of the reporting period that would require disclosures in the Board of directors’ report. 5. RISK MANAGEMENT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Risk management A-24 5. RISK MANAGEMEN T 5.1. PRINCIPAL RISKS FACED BY THE GROUP Activities of the Group companies, their financial position and financial performance are subject to and may in the future be subject to negative changes as a result of the occurrence of any of the risk factors described below. Occurrence of even some of these risk factors may have a materially adverse effect on the business, financial position and financial performance of the Company or the Group as a whole, and in consequence the trading price and liquidity of the shares may decline. The factors presented below represent the key risks. Most of those risk factors are of contingent nature and may or may not occur and the Company is not able to express its view on their probability of occurrence. The order in which they are presented is not an indication as to their significance, or probability of occurrence or of the potential impact on the Group. Other risks, factors and uncertainties than those described below, including also those which the Group is not currently aware of or which are considered to be minor, may also have an important negative impact on the Group's operations, financial position and financial performance in future. Key risks are monitored. The Board is ultimately responsible for the effective risk management and internal control system. For these risks, preventive actions are taken to reduce their vulnerability and reduce their potential impact on the Group. The Group operates on mature markets in a highly competitive industry The Group operates mainly in the non-alcoholic beverages industry where the major part of its revenues come from, mainly in the Czech Republic, Slovakia, Slovenia and Croatia, which, apart from certain exceptions, are markets where the non-alcoholic beverages industry has been stagnant and where both multinational and local producers compete against each other by offering a wide range of products. This creates a risk of decreasing selling prices and/or a possibility of losing market share in the individual product categories or in the overall soft drinks market and may lead to a decrease in the Group's sales and could have an adverse effect on the Group's financial condition and the result of operations. Key mitigations: The Group protects itself against this type of risk primarily by building a strong brand loyalty of its end consumers and by introducing new products in the market. Additionally, the Group mitigates this risk by increasing the percentage share of sales in the HoReCa sector (that is less prone to promotions), as well as by promoting impulse products (with higher margins) or introducing new products, for which no aggressive pricing promotions have to be used (thanks to absence of competitors’ products). The Group also eliminates this risk by investing into new businesses not dependent on the soft drinks’ categories. Changes in the shopping habits of end customers may have a negative impact on the Group's sales In recent years, there have been changes in the shopping habits of end consumers. Retail discounter changed their behaviour and changed consumers’ habits and very effectively made themselves a more attractive place to shop. This has redirected trading volumes to the fast-developing discount chains, which diminishes the significance of independent convenience stores. In addition, large retail chains tend to put pressure on prices and resist price increases. There is a risk of an inability to transfer increases in raw materials´ costs to end consumers. Due to Covid-19 pandemics there were changes in consumer behaviour, retail customers make less visits to shops but buy bigger volumes when there is a higher risk of getting the disease, also, digitalization trend is faster. Key mitigations: The companies from the Kofola Group try to minimise this risk by negotiations with major customers about price increases, adjusting its cost structure, implementing innovations leading to higher margins and by proper packing and sale channel tactics. The Group also invested into its own retail chain through UGO Freshbars & Saladbars. The Group entered a whole new distribution channel of Pharmacies via the company LEROS. The risk of changed consumer behaviour is mitigated by customized presentation on shelves, increased share of multipacks and volume discounts. The Group now operates its own e-shops and commenced its digital transformation. Unfavourable changes in the prices of raw materials may have an adverse effect on the Group's financial result Changes in the prices of raw materials may have an effect on the costs of raw materials purchased by the Group and, as a consequence, on the margins earned on the sale of products. In addition, the costs of production and the delivery of the Group's products depend to a certain extent on the prices of commodities such as fuel and electricity. This may have (and during the adverse development of macroeconomic situation already had) a material adverse effect on the Group's business, financial condition and the results of operations. 5. RISK MANAGEMENT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Risk management A-25 Key mitigations: When it is effective, the Group’s central purchasing department aims to sign mid-term contracts with the key suppliers, which helps to guarantee purchase prices. However, in the case of some commodities, agreeing a purchase price is only possible for relatively short terms. Therefore, the Group maintains multiple sources of supply with robust suppliers’ strategy, selection, monitoring and management processes. The Group closely monitors and analyses the trends and prices of the key raw materials to understand the cost drivers. During the adverse macroeconomic development, the Group implements wide range of saving precautions (such as focusing on key activities, savings in marketing, energy consumption and many other areas, including personnel costs when it is unavoidable) as a response. The Group may be exposed to product liability claims or product recalls Intentional or unintentional product contamination or defectiveness may result in a loss of reputation of a brand or manufacturer which, in consequence, may adversely impact the sales of such a brand or, in extreme case, all products manufactured by that manufacturer in the particular market leading to a necessity to recall the products from the market. Moreover, product contamination or defectiveness may lead to personal injuries of end consumers and, as a consequence, liability claims against the Group. In addition, product liability claims could result in negative publicity that could materially affect the Group’s sales. Key mitigations: The Group protects itself against this risk by performing detailed controls of raw materials, suppliers´ assurance and by regular controls of the production processes by Group´s laboratories. Product recall procedures are tested regularly. The Group’s operations are subject to various EU directives & Country regulations and unfavourable changes may have a negative impact on the Group's business Unfavourable changes to the applicable laws and regulations may affect various aspects of the Group's operations and results and/or cause an increase in the costs of the Group. Future changes may cause the Group to incur compliance costs or otherwise negatively affect its operations. Key mitigations: These affect all companies in the sector and do not severely affect competition. The Group monitors the changes in legal regulations and adapts to them in advance. Group works closely with external advisors and trade and industry associations regarding current and future legislation changes with impact upon the business and is an active member of various legislation processes as commenting authority. Failure of IT systems could materially affect the Group’s business The Group relies on IT systems for a variety of functions. Despite the implementation of security and back-up measures, the IT systems used by the Group may be vulnerable to physical or electronic intrusions, computer viruses, hacker attacks and/or other disruptions. Key mitigations: The Group protects against this type of risk by establishing back data centre, daily backups, disks in mirroring and continued articulation and implementation of information security policies. Disaster recovery plans are tested on regular basis. Central IT governance and decision-making process exists for system changes. IT security standards are closely monitored to protect systems and information. Failure of implementation of new ERP system The Group uses SAP as its main ERP system which is undergoing the major update. Many unexpected situations may happen during this process and as a result, there may be disruptions in data consistency or unplanned system downtime that may affect production and supply chain processes, which may result in non-deliveries to the customer. Key mitigations: The Group has established a senior project implementation team that closely cooperates with the responsible people from particular departments. Selected external supplier is a sound partner which has sufficient experience. Both new and current version are going to work simultaneously until the Group has sufficient confidence that all necessary steps were taken, all data were transferred appropriately and all areas are functioning as intended. The Group has chosen a conservative migration approach, including a comfortable timeline to allow for proper testing of all critical features. 5. RISK MANAGEMENT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Risk management A-26 Cyber security risks With the increasing digitalization, there can be an increased frequency of cyber-attacks that may lead to difficulties of system operations or thefts of the Group’s resources. Key mitigations: Our IT department closely monitors the situation on the daily basis and executes necessary steps to continue in its sufficient regular SW updates, employee trainings and other ways of mitigation that ensure sufficient defence of Group’s data and systems. Continued growth of the Group depends, in part, on its ability to identify, acquire and integrate businesses, brands and/or products If the Group is unable to identify and acquire businesses, brands or products to support its growth in accordance with its strategy, or if the Group is unable to successfully integrate acquisitions, or if a failure by the acquired company to comply with the law or to administer good business practice and policies prior to an acquisition has a material adverse effect on the value of such an acquired company, the Group may not be able to obtain the advantages that the acquisitions were intended to create. Key mitigations: The Group has a solid acquisition strategy and limits this risk by continued monitoring of progress against the integration plan, including frequent and regular tracking of key performance indicators and senior leadership involved in monitoring progress and in making key decisions. The Group has a track of successful acquisitions within the last years and cooperates with advisors on a long-term basis which gives them good knowledge about sectors where the Group operates. Additionally, proven integration processes, procedures and practices are applied to ensure delivery of expected returns. The Group is exposed to the risk of currency exchange fluctuations and interest rate risk More than half of the raw materials (mostly sugar) used by the Group for production are purchased in EUR or in local currencies but with the pricing derived from EUR. Significant share of Group's income is denominated in local currencies other than EUR. Therefore, the results of the Group are subject to fluctuations in the foreign exchange rates of EUR against the local currencies. The Group might not be able to mitigate all the currency risks, in particular over longer periods. Additionally, the Group uses external financing facilities to finance its long-term assets and working capital needs. More than half of those facilities are denominated in EUR. Most of the EUR part is hedged against fluctuations in interest rates, however remaining part denominated in CZK is at variable interest rates based on PRIBOR. As a consequence, the Group is also exposed to the risk of negative interest rate fluctuations. Key mitigations: The Group closely monitors its results and cash flows to ensure sufficient amount of money necessary for its business activities in both short and long-term. To limit the exposure to adverse movements in interest rates, the Group concluded interest rate swaps for selected bank debts with longest maturity. The Group is exposed to the liquidity risk The Group generates sufficient financial resources to be able to finance its standard daily operations, capital expenditures, loan repayments and dividends. It however sometimes needs also external resources to finance bigger and one-off expenditures like acquisitions of subsidiaries. As a result, it is subject to risk of inability to obtain such resources from banks and other external parties. Payment schedules of already provided bank loans are dependent on Group’s fulfilment of specified financial indicators (covenants) and in case of breach of these covenants the financing bank can request earlier repayment of provided loans. 5. RISK MANAGEMENT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Risk management A-27 Key mitigations: The Group closely monitors its business results and cash flows and on regular basis prepares both short and long-term financial projections to prevent any liquidity issues or breach of covenants. The Group has also available undrawn credit line in case of need of extra ad hoc financing. Ongoing legal proceedings regarding the denationalisation of Radenska There are pending denationalisation proceedings with respect to denationalisation claims of the legal successors of the former owners of RADENSKA. The legal outcome of these proceedings remains unclear and uncertain. Key mitigations: RADENSKA intensively defends against any claims of former owners. Current situation is described in section B.4.23. The Group may be exposed to sugar tax In Slovakia, a national discussion about sugar tax started and in Croatia a change to the current sugar tax system was introduced in 2020. There is a risk that the tax will be paid by producers and that the Group is not able to pass these costs to end customers. Key mitigations: At the moment, we do not know when the sugar tax is implied and who will bear the tax in Slovakia. The Group continuously reformulates the products to have lower sugar content as well as focuses on water based soft drinks. The Group opened new categories through acquisitions – such as tea & coffee – outside the traditional soft drinks business, that are not subjects to sugar tax. We have also spread our Waters portfolio through the acquisition of ONDRÁŠOVKA and Karlovarská Korunní in 2020. The Group is not able to pass costs of PET bottles deposit system to end customers In Slovakia, PET and aluminium bottles deposit system started in 2022. There is a risk that part of the cost will be carried by producers and the Group is not able to pass these costs to end customers. Key mitigations: The Group was an active member of the implementation group in Slovakia. Since the initial application, there are not any material adverse effect on consumers’ demand. The Group will be negatively affected by the anti-plastic trend The world as we know it today is changing. Environmental pollution is being discussed on all levels and climate change is rather a fact than an ecological fiction. One of the negative symbols of this movement is plastic material. Because the Group uses a lot of plastic material in various formats (PET bottles), it may be strongly affected not only by regulations but also by a change in consumer behaviour. Key mitigations: The Group is monitoring and thoroughly analysing all movements and is deeply immersed into this matter. The Group believes, that plastic is very relevant material and, in some cases, there is no better solution at this moment with the biggest share of recycled PET as possible. The Group is an active member in industrial activities educating consumers and a member of the Association for the deposit system for PET and cans in the Czech Republic. At the same time, the Group is taking progressive steps to reduce the volume of new plastic packaging, for example by using recycled rPET materials. The Group's management has also decided to support the introduction of deposit system for returnable PET bottles, which it considers to be the best solution in this area. This will help to sort out more used bottles. Most importantly, it will close the PET bottle management system. The used packaging will be turned into new packaging. In Slovakia, the system has already been in place since the beginning of 2022. In the Czech Republic, the discussion about introducing the system was opened two years ago thanks to the Initiative for deposit system, of which Kofola is a founding active member. The Group signed an agreement on the purchase of one third of the shares in General Plastic, a.s., a producer of hot-washed PET flakes and PET preforms in Slovakia, for the production of which it uses recycled PET bottles. 5. RISK MANAGEMENT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Risk management A-28 Nevertheless, The Group also focuses on other packaging formats to be in line with the anti-plastic trend, such as drafted products, syrups and returnable glass bottles (as supported by our Cirkulka project that brings a returnable glass back to Retail). The Group also invests into non-plastic businesses – tea & coffee segment. The Group will deal with water pollution Water pollution is one of the key topics of today. Agriculture is using chemical fertilizers and pesticides, that negatively affect water sources and there is a risk that in a decade most of the surface water and some of the spring waters will no longer meet the limits for drinking water. Key mitigations: The Group is actively cooperating with the state authorities and agricultural segment, so that our spring water sources will not be affected. We believe that our sources are in well preserved localities so that we can protect them effectively. To protect its water resources in the future, the Group has launched a project to create certified BIO localities around its production plants. The first such locality was created close to the Rajecká Lesná plant, the second near Moravský Beroun and Ondrášov. The BIO certified localities are being created in cooperation with local farmers and local authorities. The Group carries higher costs due to lack of water There is risk of draughts leading to higher costs from water consumption. Key mitigations: The Group mitigates the risk by building own water wells and takes deep care of current water sources it manages. The Group carries higher costs due to public pressure on environmental projects Because climate change and environmental issues are now very trendy and there is significant demand from customers and consumers, the Group might be forced to proceed with some ecological measures to remain competitive. Implementation of this policy is rather expensive with a longer payback period. Key mitigations: The Group monitors the market and tries to proactively apply steps, that are easy to proceed with high impact on the environment. In general, we closely focus on the ratio between effectiveness and financial demands so that the outcome of our projects is both cost effective and environmentally friendly. It is an integral part of our CAPEX policy to have all new projects validated through the eco-friendly criteria. We also work on educating our consumers to better understand our perspective. Climate related matters have no material impact on the cash flow projections or discount rates used in the Group’s tests on recoverable values of non-current assets. There will be no sustainably grown ingredients to meet demanding consumer expectations With the Group´s approach to deliver to consumers best quality products from authentic ingredients, it could happen that there will be no ingredients of such quality or that their price will be tremendously unaffordable. There is also possible rise of costs for laboratories for quality tests. Key mitigations: The Group´s quality standards are already above legal requirements. The Group has started to cooperate with local farmers, local authorities and other stakeholders to produce authentic ingredients for affordable price and to build good, valuable and healthy relationships that all parts can benefit from. This cooperation brings added value to all parts of the supply chain and is real example of circular economy. The Group also cooperates intensively with testing institutes and cooperates with proven suppliers with quality certificates. Changes in end consumer preferences may have a negative impact on the Group's sales End consumer preferences, tastes and behaviours are evolving over time. If the Group does not successfully anticipate these changing end consumer preferences or fails to address them by swiftly developing new products or product extensions through innovation, the Group's sales could be negatively affected. 5. RISK MANAGEMENT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Risk management A-29 Key mitigations: The Group diversifies this risk through acquisitions, that are organic part of its strategy to have a wide range of products, not only on the soft drinks market, but also in the field of tea & coffee or newly also beers. In the soft drinks sector, the Group offers a broad range of products with different flavours and in various packaging formats which offers a choice to the end consumer. The Group closely monitors consumer trends in order to anticipate changes in preferences and offers diversified portfolio of its products. The Group regularly develops its products to be able to meet consumer needs. The Group may be negatively affected by the anti-sugar movement One of the social issues of today is definitely, whether soft drinks as such could be an integral part of healthy lifestyle. There are very strong movements against the intake of sugar. Non-alcoholic beverages are named as one of the significant donors to the rise in obesity of population. The soft drinks companies are blamed for influencing researches about the correlation between soft-drinks drinking and obesity. This might lead to negative social image of the Group´s products as well as legal restrictions, which could mean a significant drop in the sale of soft drinks with added sugars. Key mitigations: The Group takes this issue very seriously and proactively self-regulates itself to prevent official regulations. The Group has all various beverages in its portfolio – from no sugar to soft-drinks with 12g of sugar in 100ml. Our key brand is Kofola, that has 30% less sugar than average cola beverage. Where it is possible and where it makes sense, we reformulate the amount of sugar (Kofola has in prior year reduced the amount of sugar in its flavoured variants by 30 %) or add sugar-free variants (Kofola, Royal Crown Cola). We offer a wide range of water-based products and also focus on small packaging, that means smaller amount of sugar in one portion. We do not support or initiate any study proving that drinking soft drinks does not affect obesity because we believe, that any drink can be part of healthy lifestyle if drunk in a moderate way. The Group supports many events with physical activity (running, cycling) especially in connection to its spring/mineral water brands (Rajec, Radenska, Studena). The Group may be negatively affected by sales regulations of specific product groups There are attempts on national, but also on the EU level to regulate the sale of specific product ranges of drinks to children or teenagers, especially energy drinks or other soft drinks that contain caffeine or high amount of added sugar. There is also a trend to prohibit the sale of these products in schools. The risk of implementing such regulations on some markets is not negligible. Key mitigations: The Group closely monitors this issue especially through its memberships in various professional organisations. As a responsible producer, we also naturally self-regulate our operations in this matter. We do not promote soft-drinks with higher amount of added sugar (above 4g/100ml) or caffeine to children and we do not sell them in schools in shops or vending machines. The regulation of sale of soft drinks with higher than 5g/100ml sugar content was already implemented in Czechia and the Group´s sales of restricted product groups were not affected by this law. We do not promote our products with higher amount of added sugar to kids in any of our markets. We never promote drinking energy drinks with alcohol. If any regulation of the sale of drinks steps into force, the Group is not likely to be affected because according to its strategy of comprehend portfolio, it has a wide range of drinks that comply with above mentioned regulations. However, we are certain that there is no regulation needed and we proactively act and cooperate with state authorities to prevent any restrictions taking place. There will be new restrictions in the use of preservatives European Food Safety Authority (EFSA) is re-evaluating the current recommended daily amount of harmless preservatives intake and there is a reasonable assumption that there might be further restriction in the use of preservatives in beverages that might affect the Group´s beverages recipes. Key mitigations: It is in the Group´s strategy to limit the use of preservatives to technological minimum. The Group only cooperates with proven suppliers to have good quality raw materials with detailed content sheet. Since 2010, the Group has invested a significant amount of money into technologies to produce soft drinks without preservatives (i.e. hot fill, pascalization and aseptic line). Nevertheless, the number of used conservatives in the Group´s products, where it is not at the moment 5. RISK MANAGEMENT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Risk management A-30 technologically possible to produce without preservatives, is in minimal amounts far from recommended daily maximum intake, so that it will not be affected by reasonable tightening of the limits. The Group may be unable to attract, retain and motivate qualified personnel (employment issue) The Group's future success will also depend on its continuing ability to attract, retain and motivate highly qualified sales, production, technical, customer support, financial, accounting, marketing, promotional and managerial personnel. The Group may be unable to retain or attract the necessary personnel. Key mitigations: The Group limits this risk by sustaining a strong culture of accountability, empowerment, benefit scheme and personal development as well as by building the Group’s leadership talent pipeline through strategic people resourcing. The Group continuously tracks the conditions within but also outside the company on the labour market and acts promptly according to the situation. The Group structures its compensation packages in a manner consistent with the market standard. The Group faces growing personal costs Because of still very low unemployment rate and high inflation, the Group may be facing pressure on rising personal costs. Key mitigations: The Group works on this matter very deeply. The Group implemented segmented reward system as well as individual approach to wages based on employee's role and competence, without flat levelling. The Group invests into labour market data and works with those intensively to carefully benchmark itself with the labour market. The Group regularly optimizes the systemisation of jobs and also works on robotization and automation of activities. The Group may deal with cultural and multi-age differences in the employee’s structure The employees cultural and age diversity could lead to various problems, that could lead to higher fluctuation and lower employee satisfaction, which could cause lower productivity of the Group. Key mitigations: In all countries and companies that belong to the Group, we try to be as local as possible with respect to local culture and environment. We support the diversity and healthy self-confidence of our employees. We have and cherish our open multicultural (especially in the Adriatic region) and age diversive environment that does not limit or discriminate individuals by gender, age, race, or any handicap. We take care of the individual's life and personal situation and the needs of our employees. We seek for talents in our employees and push them forward. We support internal promotions and career changes of our employees, especially with expats programme, management positions replacements, new projects and acquisitions, where we fully rely on our well experienced staff. We are developing our people individually through programs and activities. Employees of the Group may face discrimination or corruption There might be some discrimination acts in the workplace or some employees might be corrupted and act against the Group. Key mitigations: The Group believes in its own people. In the unlikely event of discrimination, all employees are informed who to turn to. We have an open-door policy in this matter. All employees can refer to any member of management with any request and they will be treated with respect and nothing is forgotten or left unsolved. We also have a very strict policy regarding not accepting bribes or other special benefits by our employees. When selecting business partners, we follow procurement policy, when there are always at least two members of our staff and we do not favour anyone and decide honestly and transparently according to predetermined factors and rules. All money transfers are carefully monitored and need to be multi-stage approved. All our employees need to go through various trainings and are repeatedly informed about above mentioned. The group may not be able to pass inflation driven increased costs to its customers Recent economic development lead to a significant increase of the inflation rate. Higher prices significantly increase all types of business expenses and put pressure on transferring these costs into the product prices. The Group however may not be successful in the price negotiations with its customers and it may be the case that higher input costs are not fully transferred to the customers. 5. RISK MANAGEMENT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Risk management A-31 Key mitigations: The Group management deeply monitors the products margin and overall business profitability. It builds on long-term relationship with its customers and respectfully utilizes its negotiation power. The Group also continuously searches for efficiencies in its production and other internal processes. Ukraine crisis Refer to section B.4.31. 5. RISK MANAGEMENT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Risk management A-32 5.2. APPROACH TO MARKET TRENDS AND DEVELOPMENT The following part summarizes the main market trends identified by the Group and the steps the Group takes as a response to these trends. Healthy food and beverages • gradual conversion of products to preservative-free, healthy innovations, • promotion of healthy life style, • reformulation – process of changing the sugar content of a product (Flavoured Kofola LessMore has 30% less sugar, Royal Crown Cola without sugar), • more healthy beverages (water, children’s beverages) with lower sugar content compared to other competitors and beverages with herbs and tree extracts (UGO juices, Rajec flavoured, fresh drinks), • drinks with stevia (natural sweetener - without calories) - Kofola bez cukru (Sugar free), Jupík with stevia, • hot filling and aseptic line allowing the new products without preservatives (for example: high fruit content drinks, functional drinks), • use of high-pressure technology (pascalisation) - all nutritional values of fruit and vegetables in our 100% juices are retained, • water category and small packaging focus to naturally eliminate sugar intake for consumers, • nutritionally rich products, • presence in segment of herbs, tea & coffee mixtures and use of own herbs from certified BIO localities near the plants. Environmental protection • carbon footprint elimination (green energy, CNG trucks, CO 2e offset project), towards carbon neutrality in 2030, • water sources protection, • energy saving policies, • afforestation, • cooperation with suppliers, especially local farmers, • 100% recyclability and biodegradability of packaging and Eco modulation, • support for a deposit system for returnable PET bottles and cans, • packaging elimination (drafted products, syrup category focus, big volume packaging, reusable returnable packaging), • green offices and operations policy application, • returnable glass in Retail (“Cirkulka” project), • single use packaging elimination. Increasing amount of outdoor activities • focus on impulse products (portfolio enhancement), • development of the impulse channels, • development of cooperation with hotels, restaurants and cafés (HoReCa), • entrance to the impulse market (kiosks, vending machines, gyms, schools, work places etc.), • increasing share of small formats in the product portfolio (most of the new formats are up to 0.5 litre), • increasing number of supplied restaurants (direct distribution in Slovakia since 2009, in the Czech Republic since 2014), • dedicated sales team for HoReCa clients in the Czech Republic. Consolidation of retail and drift of volume to retail trade channel • strengthening brands to be more important for retailers, • focus on terms and conditions with retailers, • proper pack/channel tactics, • operational excellence, • opening own retail chain of UGO Freshbars & Saladbars, • e-commerce focus, • entering market of pharmacies via LEROS. Globalisation and growing individualism • rollout of successful brands to other markets where the Group companies operate, • purchasing and/or creation of brands with functional/emotional features, • using production/distribution licenses, introduction of global brands (Rauch, Orangina, Royal Crown Cola, Evian), • engaging the customers in the promotion of positive emotions related to the Group’s brands. 6. NON-FINANCIAL INFORMATION Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Non-financial information A-33 6. NON-FINANCIAL INF ORMATI ON 6.1. NON-FINANCIAL INFORMATION Non-financial information will be issued as a separate document till 30 June 2024 on the following link: https://investor.kofola.cz. 7. CORPORATE GOVERNANCE REPORT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Corporate governance A-34 7. CORPORATE GOVER NANCE REPORT 7.1. SHARES AND SHAREHOLDERS 7.1.1 SHARE CAPITAL As at 31 December 2023, the registered share capital of Kofola ČeskoSlovensko a.s. totalled CZK 1,114,597,400 (as at 31 December 2022: CZK 1,114,597,400) and comprised 22,291,948 (as at 31 December 2022: 22,291,948) common registered shares with a nominal value of CZK 50 (as at 31 December 2022: CZK 50) each, issued as book-entry shares under Czech law in particular under the Czech Companies Act, with the ISIN CZ0009000121. The Share capital of the Company is fully paid up. The shares have been admitted for trading on the Prague Stock Exchange in October 2015. The General Meeting held outside of the meeting during 4 – 19 September 2023 has approved a distribution of dividends in the amount of CZK 13.5 per share, i.e. CZK 300,941 thousand (CZK 286,601 thousand in the Group financial statements due to shares owned by RADENSKA). The General Meeting held outside of the meeting during 5 – 20 September 2022 has approved a distribution of dividends in the amount of CZK 11.3 per share, i.e. CZK 251,899 thousand (CZK 239,896 thousand in the Group financial statements due to shares owned by RADENSKA). 7.1.2 SHAREHOLDERS STRUCTURE Share capital structure 31.12.2023 31.12.2022 Name of entity Number of shares % in share capital % in voting rights Number of shares % in share capital % in voting rights AETOS a.s. 14,984,204 67.22 70.58 14,984,204 67.22 70.58 RADENSKA d.o.o. 1,062,236 4.77 0.00 1,062,236 4.77 0.00 Others 6,245,508 28.01 29.42 6,245,508 28.01 29.42 Total 22,291,948 100.00 100.00 22,291,948 100.00 100.00 For transactions with shares refer to section Equity in the Consolidated financial statements and Separate financial statements. 7.1.3 RIGHTS ATTACHED TO THE SHARES Each share in the Company ranks pari passu in all respects with all other shares. The same rights are incorporated into all the Company's shares including the right to attend the General Meeting, to require and receive explanations of matters concerning the Company that are part of the agenda of the General Meeting, to submit proposals and counterproposals, and to receive a dividend and share in the liquidation surplus. In compliance with the relevant legal provisions, the voting rights attached to the shares owned by RADENSKA d.o.o. cannot be exercised. The Company does not own its own shares. The rights attached to the shares arise from the provisions of Czech Companies Act and Company´s Articles of Association. The Company duly complied with the obligation to register its beneficial owners. Since the Company´s shares have been admitted to trading on the Prague Stock Exchange, the shareholders have certain disclosure requirements arising from the provisions of the Czech Capital Markets Act. The Company didn’t issue any convertible or other shares of similar kind. Company has only concluded a program for long-term remuneration of senior managers of the Group, as described in the section 7.2 (k). 7. CORPORATE GOVERNANCE REPORT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Corporate governance A-35 7.1.4 SHARES IN POSSESSION OF PERSONS WITH EXECUTIVE AUTHORITY Shares in possession of persons with executive authority 31.12.2023 pcs Members of the Board of Directors 15,049,412 Members of the Supervisory Board - Other persons with executive authority 78,960 Persons related to those with executive authority - Total 15,128,372 7.1.5 DIVIDEND POLICY On 21 October 2021, the Board of Directors of the Company approved the Company's dividend policy for the periods of 2021 to 2023. The intention of the Board of Directors is to maintain the current trend and distribute approximately CZK 300 million to shareholders in each financial year. This currently represents approximately CZK 13.46 per share before tax. The realisation of this intention is conditional on sufficient funds being available for distribution (distributable resources) without jeopardising the Company's financial stability. The actual amounts of dividends for 2023 and 2022 are described in section B.1.5. 7.2. INFORMATION PURSUANT TO CAPITAL MARKETS ACT SECTION 118.5A-K (a) Figures and information about the structure of the equity The equity structure is as follows: Equity structure 31.12.2023 CZK´000 Equity attributable to owners of Kofola ČeskoSlovensko a.s. 1,457,845 Share capital 1,114,597 Share premium and capital reorganisation reserve (1,962,871) Other reserves 2,614,776 Foreign currency translation reserve (1,193) Own shares (467,382) Retained earnings/(Accumulated deficit) 159,918 Equity attributable to non-controlling interests 5 Total equity 1,457,850 As at 31 December 2023, the share capital of Kofola ČeskoSlovensko a.s. totalled CZK 1,114,597,400 and comprised 22,291,948 common registered shares with a nominal value of CZK 50 each, issued as book-entry shares under Czech law in particular under the Czech Companies Act, with the ISIN CZ0009000121. The Share capital of the Company is fully paid up. The shares have been admitted for trading on the Prague Stock Exchange. The Company has not purchased any own shares (treasury shares) in 2023. For purchases in 2022 refer to section B.4.16.3. The Company as at 31 December 2023 didn´t hold any treasury shares (as at 31 December 2022: nil shares). RADENSKA d.o.o. as at 31 December 2023 owned 1,062,236 (as at 31 December 2022: 1,062,236) shares of the Company (which represented 4.77% of the Company´s share capital as at 31 December 2023 and 4.77% as at 31 December 2022) in total value as at 31 December 2023 of CZK 467,382 thousand (as at 31 December 2022: CZK 467,382 thousand). The shares were purchased by RADENSKA d.o.o. in a public tender offer on the stock market mainly from CED GROUP S.à r.l. for the total value of CZK 490,208 thousand (CZK 440 per share). At the date of acquisition, the shares had nominal value of CZK 100 each. Nominal value of shares owned by RADENSKA d.o.o as at 31 December 2023 was CZK 53,112 thousand (as at 31 December 2022: CZK 53,112 thousand). Part of the shares owned by RADENSKA is intended for the management incentive programme. RADENSKA is considering the sale of its whole share (1,062,236 shares as of 31 December 2023). A decision of exact timing of such sale has not been taken yet, however, might occur shortly, subject to market conditions. Proceeds from the sale will be used to finance Group's growth opportunities. 7. CORPORATE GOVERNANCE REPORT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Corporate governance A-36 In compliance with the relevant legal provisions, the voting rights attached to the treasury shares and shares owned by RADENSKA d.o.o. cannot be exercised. (b) Information about limitations on the transferability of securities The shares issued by the Company are transferable without any restrictions pursuant to Article 5 par. 5.3 of the Company´s Articles of Association. (c) Figures and information about significant direct and indirect participation in the Company´s voting rights Significant shareholders as at 31 December 2023: Significant shareholders (all with direct participation) Proportion of the voting rights Participation percentage AETOS a.s., Nad Porubkou 2278/31a, Poruba, 708 00 Ostrava, registration No. 06167446 70.58% 67.22% RADENSKA, družba za polnitev mineralnih voda in brezalkoholnih pijač, d.o.o., Boračeva 37, 9252 Radenci, Republic of Slovenia, registration No. 5056152000 0.00% 4.77% Total 70.58% 71.99% Significant shareholders as at 31 December 2022: Significant shareholders (all with direct participation) Proportion of the voting rights Participation percentage AETOS a.s., Nad Porubkou 2278/31a, Poruba, 708 00 Ostrava, registration No. 06167446 70.58% 67.22% RADENSKA, družba za polnitev mineralnih voda in brezalkoholnih pijač, d.o.o., Boračeva 37, 9252 Radenci, Republic of Slovenia, registration No. 5056152000 0.00% 4.77% Total 70.58% 71.99% The above-mentioned entities dispose of the rights of the qualified shareholders arising from Section 365 and foll. of the Act No. 90/2012 Coll., Business Corporations Act, especially of the right to request convocation of the General Meeting of the Company for discussion of the items proposed by them, request inclusion of the item determined by them on the agenda of the General Meeting, request the Supervisory Board to review the exercise of powers by the Board of Directors in the matter specified in the request as well as file a shareholder action on behalf of the Company. The structure of the significant direct participation in the voting rights of the Company as at 31 December 2023 is known to the Company only in the case of the controlling entity AETOS a.s. and the controlled company RADENSKA d.o.o. and is described within the Report on relations between the controlling entity and the controlled entity and between the controlled entity and other entities controlled by the same controlling entity for the year 2023. As for the other entities, their direct and indirect participation and shares in their possession are based on the notification delivered to the Czech National Bank. There were no notifications submitted from 1 January 2023 up to the date of this report. Until the end of the year 2023 and throughout the year 2024 (until the cut-off date of the annual report), the Company has not been informed about any other change of participation in the voting rights that would have met the legislative limits for the reporting. Except for the above mentioned natural and legal persons, the Company is not aware of any other significant direct and indirect participation in the Company´s voting rights or of any Company´s shareholders whose participation in the Company´s voting rights reached at least 1%. The controlled company RADENSKA is entitled to exercise rights of the qualified shareholder but not the voting rights attached to the shares of the Company. (d) Information about the owners of securities with special rights, including the description of such rights There are not any special rights attached to the securities issued by the Company. 7. CORPORATE GOVERNANCE REPORT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Corporate governance A-37 (e) Information about limitations on voting rights The voting rights attached to the Company´s shares may only be limited or excluded where stipulated by law. According to the legal provisions, the voting rights attached to the 1,062,236 shares owned by the controlled company RADENSKA cannot be exercised. Starting from June 2021, new obligations arising from the Act. No. 37/2021 Coll., on the register of beneficial owners, have been introduced. Shareholders – legal entities having registered office in the Czech Republic who do not have their beneficial owner registered in the register of beneficial owners cannot exercise their voting right. The Company is not aware of any other restrictions on or exclusions of the voting rights attached to the shares issued by the Company. (f) Information about agreements between the shareholders that may reduce the transferability of shares or the transferability of the voting rights, if known to the issuer The Company is not aware of any agreements between the shareholders of the Company that may reduce the transferability of shares of the Company or of the voting rights attached to the shares of the Company. (g) Information about special rules regulating election and recalling of members of the statutory body and changes to the Articles of Association of the issuer The statutory body of the Company is six-member Board of Directors. The members of the Board of Directors are elected and recalled pursuant to Article 15 par. 15.5 of the Article of Association of the Company by the Supervisory Board. The Supervisory Board of the Company has 5 members. The Supervisory Board has the quorum if majority of its members is present or otherwise takes part in a meeting. The Supervisory Board takes a decision by a majority of votes of present or otherwise participating members. In case of equality of votes the vote of a chairman of the Supervisory Board is decisive. The Supervisory Board may also take decisions per rollam (outside the meeting). Approval by a majority of at least two thirds of the votes of the shareholders present at the General Meeting is required to adopt a decision amending the Articles of Association of the Company. The General Meeting has the quorum if the shareholders present hold shares with the par value exceeding 50% of the share capital of the Company. The latest amendments to the Articles of Association of the Company relating to the Company’s corporate bodies and the way in which the decisions are taken (i.e. increase in the number of members of the Supervisory Board by 1 and the introduction of decision-making by rollam) were approved by the annual General meeting of the Company held on 28 June 2021. Any special rules regulating election and recalling of the members of the Board of Directors of the Company and amendments and changes to the Articles of Association of the Company don´t apply. (h) Information about special powers of the statutory body pursuant to the Business Corporations Act The members of the Board of Directors of the Company do not hold any special powers. The Board of Directors takes decisions on all Company matters unless they are reserved for the General Meeting, Supervisory Board or other Company´s body. (i) Information about significant agreements to which the issuer is a party and which will become effective, change or cease to exist in the event of a change of control of the issuer as a result of a take-over bid, and about the effects arising from such agreements, with the exception of agreements whose disclosure would cause harm to the issuer The Company has not entered into any significant agreement that will become effective, change or cease to exist in the event of a change of control of the Company as a result of a take-over bid. (j) Information about agreements between the issuer and the members of its statutory body or employees that bind the issuer to take on any commitments in the event of the termination of their offices or employment in connection with a take-over bid The Company has not entered into any agreement with the members of the Board of Directors that bind the Company to take on any commitments in the event of the termination of their offices in connection with a take-over bid. The Company has not entered into any agreement with any employee that bind the Company to take on any commitments in the event of the termination of its employment in connection with a take-over bid. 7. CORPORATE GOVERNANCE REPORT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Corporate governance A-38 (k) Information on the systems of control of a scheme under which members of the statutory body or the employees of the Company may acquire participating securities of the Company, options concerning such securities or any other rights related to these securities if they do not exercise those right themselves The scheme (Share based payment Plan) under which the members of the statutory body and the employees of the Company may acquire participating securities of the Company is reviewed and approved by the Supervisory Board of the Company. Pursuant to Section 121m of the Capital Market Undertakings Act the Company may pay remuneration, inter alia, to members of the statutory body of the Company or their direct subordinate employees only in accordance with the approved remuneration policy. Approval of the remuneration policy falls within the authority of the General Meeting of the Company. On 23 April 2021, the Supervisory Board of the Company approved the Share based payment Plan for 2021-2026. The Share based payment Plan enhances the dependence of the eligibility to Kofola shares on the profit of the Kofola Group. Based on the approved Share based payment Plan, the statutory body prepared an amendment to the remuneration policy incorporating the remuneration in the form of shares (approved Share based payment Plan) which was presented to the shareholders for their approval at the General Meeting which was held on 28 June 2021. Amended remuneration policy was approved by the General Meeting under para 8 of the agenda. Under the obligations arising from the Capital Market Undertakings Act the Company must establish a report on remuneration of the members of the bodies of the Company and submit it to the General Meeting. The report must be submitted to the General Meeting of the Company for its approval. The report gives a full account of remuneration including all benefits in any form granted to the members of bodies of the Company (incl. shares). The remuneration report for 2022 was approved by the General Meeting on 28 June 2023. The remuneration policy as well as all the remuneration reports are available on the Company´s website https://investor.kofola.cz/en. Share based payment program is described in sections B.3.5.14, B.4.21, C.3.4.15 and C.4.21. 7.3. CORPORATE GOVERNANCE CODE Czech Corporate Governance The Company is listed on the Prague Stock Exchange (“PSE”). In the Czech Republic, the Company is required to submit to the PSE a declaration on the code of corporate governance stating that the issuer willingly or voluntarily complies with the same form as is a part of the Company´s annual report. However, due to the fact that there was no binding corporate governance regime in the Czech Republic, which the Company had to comply with, the Company, as at the date of the annual financial report, did not commit to comply with any specific corporate governance regime in the Czech Republic. Nevertheless, the Company and the companies within the Group are firmly committed to maintaining an effective framework for the control and management of the Group’s business. The Company puts much emphasis on respecting all statutory rights of shareholders, including the equal treatment of shareholders in a similar position. The Company strictly adheres to the principle of disclosure and transparency not only in relation to convening a General Meeting but also in relation to informing of corporate events, including financial results and relations with related parties. The members of the bodies of the Company regularly attend the General Meetings of the Company and are available to the shareholders during teleconferences. The Company follows in particular Business Corporations Act, Civil Code, Corporate Criminal Liability Act and Capital Market Undertakings Act. Information about policies and procedures, internal controls and the rules of the risks in relation to the accounting process is contained in section 7.6. 7.4. BODIES OF THE COMPANY Kofola ČeskoSlovensko a.s. had the following bodies in 2023: • General Meeting, • Board of Directors, • Supervisory Board, • Audit Committee. 7. CORPORATE GOVERNANCE REPORT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Corporate governance A-39 7.4.1 GENERAL MEETING Overall information The General Meeting is the supreme body of the Company. The General Meeting is, according to the Articles of Association, authorised to: • decide on changes of the Articles of Association, unless it is a change which occurred as a result of an increase in the registered capital by the authorised Board of Directors or a change which occurred as a result of other legal facts, • adopt Procedural Rules of the General Meeting, if the Company desires to provide more details on the course of a General Meeting of the Company besides the rules stipulated by the law or the Articles of Association, • elect and recall members of the Supervisory Board and approve their agreement on performance of office including their remuneration, • appoint and recall a liquidator and approve its agreement on the performance of office including its remuneration, • approve a transfer, lease or pledge of the Company’s enterprise or such a part thereof that would imply a significant change of the existing structure of the enterprise or a significant change of the scope of business or activity of the Company, • decide on matters which are submitted by the Board of Directors to the General Meeting to be resolved by the General Meeting, • grant instructions to the Board of Directors and Supervisory Board and approve the operating principles of the Board of Directors and the Supervisory Board, provided that these are not contrary to the law; the General Meeting may also prohibit a member of the Board of Directors and Supervisory Board from taking certain actions, if such a prohibition is in the interest of the Company, • decide on the distribution of profit, including the distribution of dividends, or of other own sources, or decide on the settlement of loss, • approve the Company’s auditor, • approve the remuneration policy and the reports on remuneration under the Capital Market Undertakings Act; • approve significant transaction under Section 121s et. Seq. of the Capital Market Undertakings Act; and • decide on any other issues falling under the powers of the General Meeting by virtue of the Czech Companies Act or the Articles of Association. The General Meeting must be held at least once in a financial year of the Company, no later than six months from the last day of the previous financial year at the request of the Board of Directors (or, in exceptional cases, also at the request of a member of the Board of Directors, of a qualified shareholder, or at the request of the Supervisory Board). The General Meeting is to be convened at least 30 days (if the General Meeting is not requested by a qualified shareholder or if the General Meeting is not requested as a substitute General Meeting) before the General Meeting, by publishing an invitation to the General Meeting on the Company’s website https://investor.kofola.cz/en. Sending of the invitation to the shareholders is replaced by publishing of the invitation in the Commercial Journal. The invitation shall contain all information required by law. If a qualified shareholder requests the Board of Directors to convene the General Meeting, it shall be convened in a manner and period prescribed by the Czech Companies Act. If all the shareholders agree, the General Meeting may be held without fulfilling the requirements set out by law and the Articles of Association. Any decision within the competence of the General Meeting except decisions on the amendment of the Articles of Association of the Company can also be adopted outside the General Meeting (remotely). The Board of Directors defines the terms of remote vote and specifies them in the draft resolution. Announcement of upcoming remote vote shall be published on Company´s website at least 10 days before the day the draft resolution is delivered to the shareholders. The draft resolution is delivered to the shareholders by publishing in the Commercial Journal as well as Company´s website. The period for delivery of votes is 15 days after the day of delivery of the draft resolution. If a shareholder will not vote on the draft resolution, he shall be deemed to have voted against. The seventh day before the day the draft resolution is delivered to all shareholders is considered as the decisive date for the remote vote. In 2023, the General Meeting adopted a decision on profit distribution outside the General Meeting (remotely). There is no provision of the Articles of Association that would have an effect of delaying, deferring or preventing a change in control of the Company. Voting at General Meeting Shareholders may participate in the General Meeting and exercise their voting right personally or by proxy. It is also allowed to exercise voting right by correspondence in compliance with Article 14 par. 14.2. and following of the Articles of Association of the Company. 7. CORPORATE GOVERNANCE REPORT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Corporate governance A-40 Each share in the capital of the Company confers the right to cast one vote, subject to the relevant provisions of the Articles of Association. The total number of votes in the Company is 22,291,948 votes. As the date of the annual report, the total number of votes in the Company is reduced by number of votes attached to the Company´s shares by which is not possible to exercise the voting right (shares owned by the company RADENSKA controlled by the Company) and amounted to 21,229,712 votes. None of the Participating Shareholders has different voting rights. Every holder of the Company's share(s) and every other party entitled to attend the General Meeting who derives his rights from such share(s), is entitled to attend the General Meeting in person, or be represented by a person holding a written power of attorney unless provided by the legal provisions or the Articles of Association of the Company otherwise, to address the General Meeting and, as far as he/she has voting rights, to vote at the meeting. For this purpose, Czech law prescribes a mandatory record date to establish which shareholders are entitled to attend and vote at the General Meeting. Such record date is fixed at the seventh day before said General Meeting. The invitation to the General Meeting shall state the record date, the place and the manner in which registration shall take place. According to Article 8 par. 8.2 of the Articles of Association of the Company the list of shareholders is replaced by a book-entry securities register issued by the Central Securities Depository. The book-entry securities register shall be used for identification of attendance at the General Meeting. The Company requests an extract of book-entry securities register for such purpose. The General Meeting constitutes a quorum if the shareholders present at the General Meeting own shares with an aggregate face value exceeding 50% of the share capital. All resolutions are adopted by a simple majority of votes unless otherwise specified in the legal provisions. Shareholders vote by raising a voting card indicating the number of votes pertaining to the respective shareholder. Shareholders may also cast votes by correspondence voting. In such case, shareholders cast their votes in writing at least one business day before a General Meeting is opened. The Company records the voting results for each resolution adopted at a General Meeting. Detailed information regarding participation and voting at General Meetings is being included in the invitation to the General Meeting published in accordance with relevant Czech legislation. Decision making of the General meeting The General Meeting of the Company is quorate if the present shareholders hold shares with the par value which exceeds 50% of the share capital. The General Meeting adopts decision by a majority of votes of the present shareholders, unless a different majority is required by the law. The Articles of Association do not require any majorities that differ from the majorities required by the law. According to the Czech Companies Act, decisions adopted remotely are approved by majority of all the shareholders of the Company. General Meetings in 2023 During the year 2023, one ordinary General Meeting was held by the Company. On 28 June 2023, the ordinary General Meeting took place which in particular: - heard the Report of the Board of Directors on business activities of the Company and state of its assets for the year 2022 and Summary explanatory report regarding the matters pursuant to Section 118 subsec. 5 par. a) to k) of the Capital Market Undertakings Act and Conclusions of the Report on relations between controlling entity and controlled entity and between controlled entity and entities controlled by the same controlling entity for the year 2022; - heard the Report of the Supervisory Board on the results of the control activities including information about review of the Report on relations; - approved the financial statements of the Company for the year 2022 and Consolidated financial statements of Kofola ČeskoSlovensko Group for the year 2022; - approved the Report on remuneration for 2022; - approved the change in the Articles of Association (to bring a specification of Company’s scope of business in line with the relevant case law of the Supreme Court of the Czech Republic and its interpretation by the competent Registry Court); - re-elected two members of the Audit Committee. 7. CORPORATE GOVERNANCE REPORT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Corporate governance A-41 On 21 August 2023, the Board of Directors of the Company announced adopting of the resolution on distribution of profit for 2022 outside the General Meeting. The vote took place from 4 to 19 September 2023. The shareholders approved the Board of Directors´ proposal to distribute part of the profit generated in 2022 in the amount of CZK 300,941,298 among the shareholders of the Company and to transfer the rest of the profit in the amount of CZK 99,911,199.21 to the account of undistributed profit of previous years. The dividend per share amounted to CZK 13.50 before taxation. 7.4.2 BOARD OF DIRECTORS Board of Directors The Board of Directors of the Company has 6 members. The Board of Directors is responsible for the day-to-day management of the Company’s operations under the supervision of the Supervisory Board. Status, powers, composition, decision-making and other basic rights and obligations as well as rules of procedure are included in Art. 15 of the Articles of Associations of the Company. The Board of Directors is required to keep the Supervisory Board informed, to consult with the Supervisory Board on important matters and to submit certain important decisions to the Supervisory Board for its approval, as more fully described below. The members of the Board of Directors are elected by the Supervisory Board. A member of the Board of Directors is appointed for a period of five years. A member of the Board of Directors may be reappointed. The Supervisory Board may also dismiss any member of the Board of Directors at any time. The Board of Directors appoints a Chair and two Vice-Chairs from amongst its members. The Board of Directors constitutes a quorum if a majority of its members is present or otherwise takes part in a meeting. It takes a decision by a majority of votes of the present or otherwise participating members. In case of a tie, the vote of the Chair decides. Resolutions of the Board of Directors require the approval of the General Meeting when these relate to an important change in the identity or character of the Company or its business. The Board of Directors acts on behalf of the Company towards third parties, in which case the Chair of the Board of Directors together with one member of the Board of Directors or Vice-Chair of the Board of Directors together with one member of the Board of Directors shall act jointly. Meetings of the Board of Directors are convened as the need arises. Members of the Board of Directors As at the date of the Report, the Board of Directors is composed of six members. The table below sets forth the names, positions, election date, and terms of office of the current members of the Board of Directors: Members of the Board of Directors Position Appointment date Expiration of the office term Janis Samaras Chairman of the Board of Directors – Chief Executive Officer 18 September 2015 30 June 2025 Daniel Buryš Vice-Chair of the Board of Directors – General Director of CS operation 17 June 2015 30 June 2025 René Musila Vice-Chair of the Board of Directors – Chief Operations Officer of Kofola Group 16 June 2015 30 June 2025 Marián Šefčovič Member of the Board of Directors – Chief Executive Officer of Adriatic operation 21 June 2017 30 June 2025 Martin Pisklák Member of the Board of Directors – Chief Financial Officer of Kofola Group 1 April 2020 1 April 2025 Martin Mateáš Member of the Board of Directors – Chief Executive Officer of LEROS 30 June 2020 30 June 2025 Janis Samaras Janis Samaras is the Chairman of the Board of Directors and the CEO of the Company. He received secondary education and gained a CIMA certificate from the Czech Institute of Marketing in 2010. He was awarded Entrepreneur of the Year 2011 in the Czech Republic. In 1991, together with his father, Mr. Samaras established a company, SANTA NÁPOJE, Krnov, a.s. that took over the Kofola trademark in 2002. Starting from 1996, Mr. Samaras has held various managerial positions at 7. CORPORATE GOVERNANCE REPORT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Corporate governance A-42 SANTA NÁPOJE and thereafter in the Kofola Group, including being CEO and Chairman of the Board of Directors of Kofola a.s. (CZ), Kofola a.s. (SK), Kofola CS a.s. and KOFOLA S.A. (PL). Daniel Buryš Daniel Buryš is the Vice-Chair of the Board of Directors and the Chief Executive Officer for the matters of Kofola a.s. (CZ) and Kofola a.s. (SK). In 1993, he graduated in automatic control in economy from the Technical University of Ostrava, Czech Republic. He also completed an MBA programme at Liverpool JMU School organized by Technical University of Ostrava, Czech Republic in 2008. Mr. Buryš joined the Kofola Group in 2010 as the CFO of Czech operations. Prior to joining the Kofola Group, Mr. Buryš was CFO at Štěrkovny spol. s r. o. (2000-2004), Severomoravská energetika, a. s. (2004-2007) and Elektrociepłownia Chorzów „ELCHO" S.A. (ČEZ Group). René Musila René Musila is the Vice-Chair of the Board of Directors and the Chief Operations Officer of Kofola Group. He received secondary education. He has been present in the beverage industry since 1993 when he started to work at SP VRACHOS, which was taken over by SANTA NÁPOJE, the predecessor of the Kofola Group. Since 1996, he has been the Operating Director at Kofola CS responsible for production, purchasing and quality. In the following years, he became responsible for managing production plants, investments and new technologies in the whole Group. Marián Šefčovič Since 1999, Marián Šefčovič acted as a regional salesman in SANTA DRINKS a.s. (currently Kofola a.s. Slovakia). During 2001-2002, he was a sales manager of Kofola a.s. (SK). Between 2002-2007, he acted as a sales director of Kofola a.s. (SK) where he was responsible for the entire sales force and sales strategy in Slovakia. During 2007-2011, he acted as general director of Kofola a.s. (SK). Since September 2011 until April 2015, he also acted in the position of the sales director responsible for sales in all channels of Kofola brand in the Czech Republic and Slovakia. Since March 2015, Mr. Šefčovič has been acting as CEO of Adriatic business. Martin Pisklák Martin Pisklák graduated in Business Finance and Accounting at Masaryk University in Brno in 2005. During his studies, he spent one semester studying International Business Relations at the Austrian FH Burgenland. He joined Kofola in December 2010. From 2011 – 2014 he was Head of Controlling, and from 2015 – 2019 he was Chief Financial Officer and Vice Chairman of the Board of Directors of RADENSKA and Studenac in the Adriatic region. Prior to joining Kofola, Martin was a transaction advisor at PwC (2008-2010), and a financial auditor at PwC (2005-2008). Martin Mateáš Martin Mateáš has a university degree in Management. He worked in companies ST. NICOLAUS – trade CZ and Heineken in the past, and in 2005, he joined the Kofola Group. After his first position as a Brand manager of favourite mineral water Rajec, he became a CMO of the whole Group. In 2010, he moved to Poland where for the next five years he led the entire Polish branch as its General Manager. He has been LEROS CEO since 2018. Directorships of Members of the Board of Directors The following table sets forth the past and current directorships held by the current members of the Board of Directors in the past five years: 7. CORPORATE GOVERNANCE REPORT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Corporate governance A-43 Directorships of the Board of Directors members Current and former directorships Janis Samaras Chairman of the BoD, Kofola ČeskoSlovensko a.s., since 2015 Chairman of the BoD, Kofola a.s. (CZ), since 2011 BoD Member, Alofok Ltd (liquidated in 2021), 2012-2021 Chairman of the BoD, Kofola a.s. (SK), since 2004 (Chairman of the BoD since 2015) Statutory representative UGO trade s.r.o., since 2018 Chairman of the BoD, AETOS a.s., since 2017 Statutory representative and Shareholder, Palác Silesia s.r.o., since 2016 SB member, Nadační fond proti korupci, 2012-2021 Member of statutory body, Nadační fond Bez-DOMOVA, since 2016 Shareholder, Afton s.r.o., since 2006 Shareholder (joint property of spouses), TIERRA VERDE s.r.o., since 2021 Shareholder (joint property of spouses), TIERRA NUEVA s.r.o., since 2021 Statutory representative Bilgola fresh s.r.o., since 2023 SB member, FILIP REAL a.s., since 2023 Statutory representative PIVOVARY TRIANGL s.r.o., since 2023 Chairman of the SB, General Plastic, a. s., since 2023 Daniel Buryš Vice-Chair of the BoD, Kofola ČeskoSlovensko a.s., since 2015 (Vice-Chair of the BoD since 2018) Member of the BoD Kofola a.s. (SK) since 2011, Vice-Chair of the BoD since 2019 Vice-Chair of the BoD, Kofola a.s. (CZ), since 2010 (Vice-Chair of the BoD since 2018) Statutory representative, F.H. Prager s.r.o., 2020-2021 Chairman of the BoD, ONDRÁŠOVKA a.s., 2020-2021 Statutory representative, Karlovarská Korunní s.r.o., 2020-2021 Statutory representative and liquidator, Minerálka s.r.o. (SK), 2020-2021 Member of the SB, REMA AOS, a.s., since 2020 Statutory representative, Semtex Republic s.r.o., since 2021 René Musila Vice-Chair of the BoD, Kofola ČeskoSlovensko a.s., since 2015 (Vice Chairman of the BoD since 2018) Statutory representative, SANTA-TRANS s.r.o., since 2004 Vice-Chair of the BoD, Kofola a.s. (CZ), 2015-2018, since 2022 SB Member, Kofola a.s. (SK), 2018-2022 BoD Member, AETOS a.s., since 2017 Shareholder, Afton s.r.o., since 2006 Vice-Chair of the BoD, Kofola a.s. (SK), since 2022 BoD member, FILIP REAL a.s., since 2023 Statutory representative, Cafe Dorado s.r.o., since 2023 Statutory representative, PIVOVARY TRIANGL s.r.o., since 2023 Marián Šefčovič BoD Member, Kofola ČeskoSlovensko a.s., since 2017 Chairman of the BoD, RADENSKA d.o.o., since 2015 Chairman of the BoD, Studenac d.o.o., since 2016 Martin Pisklák BoD Member, Kofola ČeskoSlovensko a.s., since 2020 BoD Member, RADENSKA d.o.o., 2015-2020 BoD Member, Studenac d.o.o., 2015-2020 BoD Member, Radenska d.o.o. (liquidated in 2020), 2015-2020 Shareholder, Zahradní OLLA s.r.o., since 2023 Martin Mateáš BoD Member, Kofola ČeskoSlovensko a.s., since 2020 Statutory representative, Espresso s.r.o., 2019-2020 Statutory representative, LEROS s.r.o., since 2018 Statutory representative (and shareholder), DENTU s.r.o. (SK), 2017-2019 Statutory representative, Leros Slovakia, s.r.o. (SK), since 2018 Statutory representative, PREMIUM FOODS s.r.o. v likvidácii (SK), 2020-2021 Statutory representative (and shareholder), GAUDIN MONK s.r.o. (SK), since 2019 Statutory representative, Bylinkárna s.r.o., since 2022 Above mentioned activities are considered as significant. 7.4.3 SUPERVISORY BOARD The Supervisory Board is responsible for supervising the conduct of and providing advice to the Board of Directors and for supervising the Company’s business generally. In performing its duties, the Supervisory Board is required to consider the interests of the Company’s business. Status, powers, composition, decision-making and other basic rights and obligations as well as rules of procedure are included in Art. 16 of the Articles of Association of the Company. The members of the Supervisory Board are not authorised to represent the Company in dealings with third parties, unless they are explicitly appointed by the Supervisory Board to represent the Company in courts and other authorities’ proceedings against a member of the Board of Directors of the Company. The members of the Supervisory Board are elected by the General Meeting. A member of the Supervisory Board is appointed for a period of five years. A member of the Supervisory Board may be reappointed. The General Meeting may elect alternate member/s for filling free posts of members of the Supervisory Board according to the predefined order. If the alternate members are not elected, the Supervisory Board, in which the number of members elected by the General Meeting has not decreased by more than one half, may appoint substitute member until the next General Meeting. The term of office of a substitute member of the Supervisory Board shall not be applied towards the term of office of a member of the Supervisory Board. 7. CORPORATE GOVERNANCE REPORT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Corporate governance A-44 The Supervisory Board consists of five members. The Supervisory Board shall appoint a chairperson from amongst its members. The General Meeting may at any time suspend or dismiss Supervisory Board members. The Supervisory Board constitutes a quorum if a majority of its members is present or otherwise takes part in a meeting. It takes a decision by a majority of votes of the present or otherwise participating members. In case of a tie, the vote of the chairman decides. The Supervisory Board holds at least one meeting every calendar quarter. The Supervisory Board may also take decisions per rollam. Members of the Supervisory Board As at the date of the Report, the Supervisory Board is composed of five members. The table below sets forth the names, positions, election date, and terms of office of the current members of the Supervisory Board: Members of the Supervisory Board Position Appointment date Expiration of the office term René Sommer Chairman of the Supervisory Board 17 June 2015 5 August 2025 Moshe Cohen-Nehemia Member of the Supervisory Board 15 September 2015 5 August 2025 Tomáš Jendřejek Member of the Supervisory Board 30 November 2018 5 August 2025 Ladislav Sekerka Member of the Supervisory Board 28 June 2021 28 June 2026 Alexandros Samaras Member of the Supervisory Board 28 June 2021 28 June 2026 A brief description of the qualifications and professional experience of the members of the Supervisory Board is presented below. René Sommer René Sommer is the Chairman of the Supervisory Board of the Company. In 1992, Mr. Sommer started to cooperate with SP VRACHOS, which was taken over by SANTA NÁPOJE, the predecessor of the Kofola Group. Mr. Sommer held many different positions in the Group’s structures in financial, HR and legal departments. He also held the position of CEO in Kofola a.s. (CZ). Prior to joining the Kofola Group, he worked, among others, as the Project Manager of Production for ČKD Polovodiče Praha, a.s. (until 1990) and ran his own grocery chain (starting from 1990). Moshe Cohen-Nehemia Moshe Cohen-Nehemia is a member of the Supervisory Board of the Company. He graduated from the Faculty of Economics at the Open University in Israel in 1995 and completed an MBA program at Ben Gurion University in 2000. Mr. Cohen-Nehemia joined the Kofola Group in 2014 as a member of the Supervisory Board of KOFOLA S.A. (PL). Mr. Cohen-Nehemia gained professional experience in the beverages industry at Jafora Tabori in Israel (1997-2004), RC Cola International in USA (2005-2018), being the Managing Director responsible for the entire commercial operation, Beverage Partners International a global beverage company in Israel (from 2019) as a Chief Operation Officer. Tomáš Jendřejek Tomáš Jendřejek is a member of the Supervisory Board of the Company. He received secondary education and gained a CIMA certificate from the Czech Institute of Marketing in 2010. He established his relationship with Kofola in 1994 as a Sales representative and after several promotions he became the Sales Director in 2002. Since 2006, he has been responsible for procurement of the Group. Before joining the Group, he had worked for eight years in the plant producing the tannery industry machines. Ladislav Sekerka Ladislav Sekerka is a partner at Consilium Family Office after a decade at UBS Wealth Management out of Zurich and Vienna. As an Executive Director, he advised HNWI, UHNW and family office clients across Central Europe. He has professional experience in the international banking environment as well as on the buy-side. He had several senior roles in the wealth management industry and has experience from retail, corporate and investment banking, and asset management. He is 7. CORPORATE GOVERNANCE REPORT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Corporate governance A-45 a Harvard Business School Alumnus and holds a Master´s degree from Masaryk University (Law) and Brno University of Technology (Economics). Alexandros Samaras Alexandros Samaras is a Programme Manager of EU funds, responsible for the Cooperation Programmes of Greece with North Macedonia and with the Black Sea Basin at the Ministry of Economy & Finance, Greece. He has an experience in Finance, Controlling and Accounting and holds a Master s Degree in Public Law and Political Science (LL.M) and Degree in Law from Democritus University of Thrace and a degree in Economics from University of Macedonia. Directorships of the Members of the Supervisory Board The following table sets forth the past and current directorships held by the current members of the Supervisory Board in the past five years: Directorships of the Supervisory Board members Current and former directorships René Sommer Chairman of the SB, Kofola ČeskoSlovensko a.s., since 2015 Chairman of the SB, AETOS a.s., since 2017 Statutory representative, Palác Silesia s.r.o., since 2016 Chairman of the SB, REMA AOS, a.s., 2015-2020 Chairman of the SB, Kofola a.s. (CZ), since 2023 (since 2019 SB Member) Shareholder, Afton s.r.o., since 2006 SB Member, Kofola a.s. (SK), since 2022 Moshe Cohen-Nehemia SB Member, Kofola ČeskoSlovensko a.s., since 2015 Managing director, RC Cola International, 2017-2019 CEO, Beverage Partners International, since 2019 Tomáš Jendřejek SB Member, Kofola ČeskoSlovensko a.s., since 2018 SB Member, Kofola a.s. (CZ), since 2015 Statutory representative, UGO trade s.r.o., since 2018 Statutory representative, SANTA-TRANS s.r.o., since 2013 SB Member, AETOS a.s., since 2017 BoD Member, Kofola a.s. (SK), since 2018 Shareholder, Afton s.r.o., since 2006 SB Member, ONDRÁŠOVKA a.s., 2020-2021 Alexandros Samaras SB Member, Kofola ČeskoSlovensko a.s., since 2021 Ladislav Sekerka SB Member, Kofola ČeskoSlovensko a.s., since 2021 SB Member, BioVendor – Laboratorní medicína a.s., since 2017 Statutory representative (and shareholder), SECO Invest s.r.o., since 2018 Statutory representative, ConsilEng s.r.o., since 2017 Statutory representative (and shareholder), DLI project I s.r.o., since 2020 Statutory representative, DLI Panorama s.r.o., since 2021 Member of the management board, Nadace rodiny Vlčkových, since 2021 Shareholder, Alts Partner s.r.o. since 2022 Statutory representative, Úněšovský statek a.s., since 2023 Statutory representative (and shareholder), RDC Alfa s.r.o., since 2023 Statutory representative (and shareholder), RDC Beta s.r.o., since 2023 Statutory representative (and shareholder), RDC Finance s.r.o., since 2023 Above mentioned activities are considered as significant. 7. CORPORATE GOVERNANCE REPORT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Corporate governance A-46 7.4.4 AUDIT COMMITTEE Competences of the Audit Committee are laid down by the law. The Audit Committee assists the Supervisory Board in supervising the activities of the Board of Directors with respect to: • recommending to the Supervisory Board the selection of an auditor of the financial statements of the Company and of the Group companies, and of the consolidated financial statements, • monitoring the audit of the Company’s financial statements and the consolidated financial statements for the previous financial year; becoming familiar with the details of the results of these audits at their various stages, • presenting to the Board of Directors its findings and recommendations relating to the audit and evaluation of the financial statements and consolidated financial statements for the previous financial year, as well as the Board of Director’s proposed distribution of profit or coverage of loss, • presenting to the Board of Directors its findings and recommendations on granting a discharge to the member of the Board of Directors in charge of the economic and finance department for the duties he/she performed, • performing other tasks determined by the Board of Directors depending on the needs arising from the Company’s current situation, • submitting to the Board of Directors annual reports on the Audit Committee’s operations, and • other matters as specified in Article 41 of Directive No. 2006/43/EC passed by the European Parliament on 17 May 2006. The members of the Audit Committee are elected by the General Meeting from among the whole Group or third parties. From August 2022, the function of an internal auditor has been temporarily suspended for personal reasons. The agenda has been transferred to relevant employees to mitigate potential risks. Furthermore, the work was overviewed by a Supervisory board member. From Feb 2024, the Group already has an internal auditor. Members of the Audit Committee As at the date of the Report, the Audit Committee is composed of three members. The table below sets forth the names, positions, election date, and terms of office of the current members of the Audit Committee: Members of the Audit Committee Position Appointment date Expiration of the office term Petr Šobotník Member of the Audit Committee 21 June 2017 21 June 2027 Zuzana Prokopcová Chairman of the Audit Committee 30 November 2018 30 November 2028 Lenka Frostová Member of the Audit Committee 30 November 2018 30 November 2028 Zuzana Prokopcová became a Chairman of the Audit Committee in November 2023. A brief description of the qualifications and professional experience of the members of the Audit Committee is presented below. Petr Šobotník Petr Šobotník is a member and former Chairman of the Audit Committee. He has more than 20 years’ experience in audit profession, in 1995-2010 he was an audit Partner in Coopers & Lybrand and PricewaterhouseCoopers. Up to his early retirement from PwC in 2010, he functioned in various performing positions focusing mainly on local market development. Petr Šobotník also served as the President of the Chamber of Auditors of the Czech Republic in years 2007-2014, from 2014- 2016 he was a member of the Supervisory Board of the Chamber of Auditors of the Czech Republic. Zuzana Prokopcová Zuzana Prokopcová was elected the new Chairman of the Audit Committee. Zuzana Prokopcová graduated from the University of Economics in Prague, Faculty of finance and accounting. She has experience as an auditor in international advisory company and in the management of large companies. Zuzana began her professional career at the international consulting company PricewaterhouseCoopers (PwC) in 1998, where she served as an auditor, focusing mainly on financial institutions. Subsequently, she held the same position for one year in Russia and for two and half years in Kazakhstan, again within the framework of her work at PwC. For 2014-2016, she was the Vice-Chairman of the Board of Directors and CFO of Czech Aeroholding, the leading company in the field of air transport in the Czech Republic, where she was responsible for 7. CORPORATE GOVERNANCE REPORT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Corporate governance A-47 treasury, accounting, tax, controlling, internal audit and risk management areas. Zuzana is a Certified member of the Association of Chartered Certified Accountants. Lenka Frostová Lenka Frostová is a member of the Audit Committee. Lenka Frostová graduated from the Technical University of Ostrava with a specialisation in management. She became a member of the Association of Chartered Certified Accountants in 2000. She joined the Kofola Group in 2016 as Group reporting manager, and in 2018 she assumed the role of Financial manager. Previous to joining the Kofola Group, she was an audit supervisor at Ernst & Young Audit, s.r.o. (1996-2005) and later joined OKD, a.s. as an IFRS Accounting Standards specialist, before becoming Accounting manager (2005-2016). Directorships of the Members of the Audit Committee The following table sets forth the past and current directorships held by the current members of the Audit Committee in the past five years: Directorships of the Audit Committee members Current and former directorships Petr Šobotník AC member, Kofola ČeskoSlovensko a.s., since 2017 (2017-2023 Chairman) Vice-Chair of the AC, Severomoravské vodovody a kanalizace Ostrava a.s., since 2017 Chairman of the AC, ČEPRO, a.s., since 2016 Vice-Chair of the AC, Letiště Praha, a.s., since 2023 (2014-2023 Chairman) Chairman of the AC, Československá obchodní banka, a.s., 2016-2023 Statutory representative (and shareholder), AFITEC s.r.o. (earlier Šobotník & Partners, s.r.o.), 2010-2020 Member of the SB, Letiště Praha, a. s., since 2017 Chairman of the AC, Českomoravská stavební spořitelna, a.s., 2019-2022 Chairman of the AC, ČSOB Penzijní společnost, a. s., member of group ČSOB, 2016-2022 ViceChairman of the AC, MERO ČR, a.s., since 2021 Member of the AC, Phillip Morris ČR a.s., since 2021 Zuzana Prokopcová Chairman of the AC, Kofola ČeskoSlovensko a.s., since 2023 (since 2018 Member) AC member, MONETA Money Bank, a.s., since 2017 AC member, MONETA Stavební spořitelna, a.s., since 2020 Member of the management board, Nadace MONETA Clementia, since 2021 Member of the SB, PPF Group N.V., since 2021 Member of the AC, PPF Financial Holdings a.s., since 2021 Lenka Frostová AC Member, Kofola ČeskoSlovensko a.s., since 2018 Shareholder, Zahradní OLLA s.r.o., since 2023 Above mentioned activities are considered as significant. 7.4.5 PERSONS WITH EXECUTIVE AUTHORITY Definition The Company regards as persons with executive authority those persons that are either: • a member of the Board of Directors of the Company, or • a member of the Supervisory Board of the Company, or • a member of the Audit Committee of the Company, or • a participant of the Group Share Share based payment Plan, or • other top management members who both make decisions within the Company or Group that can affect future development and strategy of the Company and the Group and who have an access to inside information. Identification The following persons qualified as persons with executive authority: Members of the board of directors • Janis Samaras • Daniel Buryš • René Musila • Martin Pisklák • Martin Mateáš • Marián Šefčovič 7. CORPORATE GOVERNANCE REPORT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Corporate governance A-48 Members of the supervisory board • René Sommer • Tomáš Jendřejek • Moshe Cohen-Nehemia • Alexandros Samaras • Ladislav Sekerka Members of the audit committee • Petr Šobotník • Zuzana Prokopcová • Lenka Frostová Other persons with the executive authority Karel Hrbek Karel Hrbek was a marketing director responsible for Group activities in Czech and Slovak region till October 2019. He is a marketing director in LEROS since November 2019. Jure Zrilić Jure Zrilić is a sales director in Company’s subsidiaries RADENSKA and Studenac. René Novotný René Novotný is a CEO of SANTA-TRANS s.r.o. Petr Kulovaný Petr Kulovaný is a Procurement Director of Kofola CS (Kofola CZ and Kofola SK). Jaroslav Vích Jaroslav Vích is a Sales Director of Kofola CS. Karel Teichmann Karel Teichmann is an Operations Director of Kofola CS. Martin Rosypal Martin Rosypal is a CFO of Kofola CS. Egle Wehle Egle Wehle is a Marketing Director in Adriatic. Marek Farník Marek Farník is a General Director of UGO trade. František Beneš František Beneš is a CFO of LEROS and Premium Rosa. Pavol Chalupka Pavol Chalupka is a Marketing Director of Kofola CS. No person with managerial responsibilities has been convicted of crime or fraud in the past five years, they were not connected with any proceedings of bankruptcy or liquidation, nor were they involved in any public accusation from official authorities. No person with managerial responsibilities was rendered incapable of acting as a member of management or supervisory bodies of any company in the past five years. No person with managerial responsibilities is in the conflict of powers with the Group activities. 7. CORPORATE GOVERNANCE REPORT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Corporate governance A-49 Remuneration principles The persons with executive authority, aside from regular salaries that are based on individual employment contracts, receive variable compensation based on the Group´s results. Some of them are also participants in the Share based payment Plan. Remuneration for explicit work in the Board of Directors and Supervisory Board, as well as in Audit Committee is paid only to Non-executive members. The remuneration level is given by the General Meeting resolution. No members of the administrative, management or supervisory body of the Company or any of its subsidiaries have any service contracts with the Company or the respective Company’s subsidiary which would provide benefits upon termination of the member’s services with the Company or the respective Company’s subsidiary. All members of administrative, management and supervisory bodies of the Company and of its subsidiaries work for the Company or the respective subsidiary on the basis of standard employment contracts and the relationship between these members and the Company or the respective Company’s subsidiary is governed by the local employment law. Accordingly, all members of the administrative, management and supervisory bodies of the Company work on the basis of an individual employment contract governed by the applicable law. The remuneration of persons with executive authority consists of a fixed and a variable component related to each particular position and the management level. Remuneration is paid in the form of salaries for work performed under employment contracts. The level of salaries is based on qualified benchmarking studies on manager´s remuneration in the respective countries and reflects both managerial and professional potential as well as competencies. The variable component amounts 0 – 100% of the basic monthly salaries and is paid yearly in relation to the level of planned EBITDA performance. The payment execution is not a subject of any further approval of the Board of Directors, until the variable component amount exceeds the limit stated in the Articles of Association. In addition to financial income, persons with executive authority are entitled to an income in kind, which includes: 1. right to use a business car for private purposes; 2. accommodation costs, eventual costs associated with relocation; 3. air ticket expenditures according to internal regulation; 4. fuel consumption for private purposes. This income in kind is adjusted by the internal regulation and depends on the level of managerial position. The remuneration system is approved by the Board of Directors. The variable component related to planned EBITDA is amended individually for each year by the Board of Directors as well. The Company has not entered into any work or other agreement with a person with executive authority that would grant such person any special entitlements (e.g. severance payment), except for the ones granted by the legal provisions. According to the Czech law, an employee is entitled to a severance payment upon termination of his/her employment (by agreement or notice) only if: 1. the employer or a portion of the employer’s organization is dissolved or relocated, or 2. the employee becomes redundant because of a decision by the employer or the respective body to change the employer’s tasks or technical set-up, to reduce the number of employees for the purpose of raising work productivity, or to make other organizational changes. If one of the above conditions is met, the employee should receive from the employer a severance payment based on his/her years of service as set out in the table below: Duration of employment relationship Amount of severance payment less than 1 year at least 1 multiple of the employee’s average monthly earnings at least 1 year but less than 2 years at least 2 multiples of the employee’s average monthly earnings at least 2 years at least 3 multiples of the employee’s average monthly earnings If the reason for employment termination (by agreement or notice) is a work-related injury, work-related sickness or threat of work-related sickness, the employee is then entitled to receive from the employer a severance payment in the amount of at least 12 multiples of the employee’s average monthly earnings. With respect to the members of the Board of Directors and the Supervisory Board the Group transfers mandatory social security contributions being part of the national pension systems in the countries where the Group is obliged to make such 7. CORPORATE GOVERNANCE REPORT Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Corporate governance A-50 contributions. No other amounts are set aside to provide pension or retirement benefits to the members of the Board of Directors and the Supervisory Board. Remuneration of key management personnel of the Group and Company is described in sections B.4.24.2 and C.4.25.3. 7.5. DESCRIPTION OF DIVERSITY POLICY APPLIED TO GOVERNANCE BODIES Due to the fact that there is no binding diversity policy regime in the Czech Republic, which the Company has to comply with, the Company, as at the date of the annual report, did not commit to comply with any specific diversity policy (as defined in Capital Markets Act section 118.4h). Regardless of age, gender or other indicators the Company places main emphasis on search and appointment of the most suitable candidates into the governance bodies of the Company (Board of Directors, Supervisory Board or Audit Committee) taking account on their background, experience and qualification for performance of the position of a member of the relevant governance body of the Company. The Company also assess candidates´ knowledge in the business field of the Company or nature of activities of the relevant body. All the persons suitable for the positions in the governance bodies of the Company are chosen in a non-discriminatory manner. The Company´s long-term effort is to build a corporate culture that is professionally open to everyone, regardless of gender, race, colour, nationality, ethnic, origin, worldview, religion, health, age or sexual orientation. 7.6. FINANCIAL REPORTING PROCESS Entities in the Kofola Group keep their accounting primarily in accordance with the local accounting standards. The Group companies maintain a parallel general ledger according to International Financial Reporting Standards as adopted by the European Union (IFRS Accounting Standards) for consolidation purposes, as well as for the Group management who periodically evaluates results prepared in line with IFRS Accounting Standards. Individual Group companies are reporting their statutory annual financial results according to local accounting standards, except for Kofola ČeskoSlovensko a.s. (as the issuer of publicly traded instruments), that reports separate results annually and consolidated results quarterly and annually based on IFRS Accounting Standards. The Group maintains the Group Accounting Manual that complies with IFRS Accounting Standards that contains general principles to prepare the consolidation packages and consolidated financial statements. All the Group entities follow the Group Accounting Manual and as such the Group accounting policies are unified. The accounting is partly carried out at individual entities and partly is centralised. The shared service is maintained by Kofola ČeskoSlovensko a.s. in Ostrava. The accounting is processed in enterprise information system SAP that is implemented in all major Group companies. The Company and the Group follow the internal guidelines and internal directives with respect to e.g. the circulation of accounting documents, approval processes or orders. The approval procedures are specified in internal guidelines that specify the transaction limits that particular employees can approve. The Group has implemented a three-way match policy to pair order, receipt note (or other confirmation of transaction) and the invoice. The payments are made only if approved by a specified employee, the treasury function is personally separated from accounting function. The information system access rights are granted after approval by persons specified in internal guidelines only to authorised employees and only to limited parts of the system valid for the employee´s job specification. The accounting is under an oversight of controlling department that is separated from accounting department both personally and in terms of organization structure. Also, the Group has established an internal processes review function in order to assess and improve the design, implementation and operating effectiveness of the internal controls and processes. The accounting is also subject to external audit, both on individual and on consolidated basis, with the Audit Committee overseeing the audit process and findings. 8. REPORT ON RELATIONS Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Report on relations A-51 8. REPORT ON RELATI ONS REPORT ON RELATIONS BETWEEN THE CONTROLLING ENTITY AND THE CONTROLLED ENTITY AND BETWEEN THE CONTROLLED ENTITY AND ENTITIES CONTROLLED BY THE SAME CONTROLLING ENTITY FOR THE ACCOUNTING PERIOD OF 2023 Pursuant to Section 82 of Act No. 90/2012 Coll., on business corporations, the Board of Directors of Kofola ČeskoSlovensko a.s., with its registered office at Nad Porubkou 2278/31a, Poruba, 708 00 Ostrava, Czech Republic, identification number 24261980, in the Commercial Register kept by the Regional Court in Ostrava, section B, Insert No. 10735 ( „Controlled entity“ or „Company“) has prepared the following Report on relations between the controlling entity and the controlled entity and between the controlled entity and entities controlled by the same controlling entity for the accounting period of twelve months ended 31 December 2023 („Indicated period“). 8.1. STRUCTURE OF RELATIONS BETWEEN RELATED PARTIES AND THE DESCRIPTION OF THE ENTITIES Based on the information known to the Board of Directors of the Company acting with due care, the Company was for the whole Indicated period part of the group controlled by AETOS a.s. („Group“). Data about the entities that were part of the Group are valid as of 31 December 2023, based on the information known to the Board of Directors acting with due care. 8.1.1 INFORMATION ABOUT THE GROUP ENTITIES Controlled entity Kofola ČeskoSlovensko a.s. Identification number: 24261980 Registered office: Nad Porubkou 2278/31a, 708 00 Ostrava, Czech Republic Controlling entity AETOS a.s. Identification number: 06167446 Registered office: Nad Porubkou 2278/31a, 708 00 Ostrava, Czech Republic Other entities controlled by controlling entity Kofola a.s. Identification number: 27767680 Registered office: Za Drahou 165/1, Pod Bezručovým vrchem, 794 01 Krnov, Czech Republic Kofola a.s. Identification number: 36319198 Registered office: súp. č. 1, 013 15 Rajecká Lesná, Slovakia UGO trade s.r.o. Identification number: 27772659 Registered office: Za Drahou 165/1, Pod Bezručovým vrchem, 794 01 Krnov, Czech Republic 8. REPORT ON RELATIONS Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Report on relations A-52 Bilgola fresh s.r.o. Identification number: 29453941 Registered office: Za Drahou 165/1, Pod Bezručovým vrchem, 794 01 Krnov, Czech Republic SANTA-TRANS s.r.o. Identification number: 25377949 Registered office: Ve Vrbině 592/1, 794 01 Krnov - Pod Cvilínem, Czech Republic RADENSKA d.o.o. Identification number: 5056152 Registered office: Boračeva 37, 9502 Radenci, Slovenia Studenac d.o.o. Identification number: 42128028 Registered office: Matije Gupca 120, 34551 Lipik, Croatia Premium Rosa Sp. z o.o. Identification number: 0000295231 Registered office: ul. Św. Andrzeja Boboli 20, 05-504 Złotokłos, Poland LEROS, s.r.o. Identification number: 61465810 Registered office: U Národní galerie 470, Zbraslav, 156 00 Praha 5, Czech Republic Leros Slovakia, s.r.o. Identification number: 36230561 Registered office: súp. č. 1, 013 15 Rajecká Lesná, Slovakia Bylinkárna s.r.o. Identification number: 17235979 Registered office: U Národní galerie 470, Zbraslav, 156 00 Praha 5, Czech Republic F.H.Prager s.r.o. Identification number: 29153379 Registered office: U Národní galerie 470, Zbraslav, 156 00 Praha 5, Czech Republic Semtex Republic s.r.o. Identification number: 08325448 Registered office: U Národní galerie 470, Zbraslav, 156 00 Praha 5, Czech Republic Cafe Dorado s.r.o. Identification number: 19405642 Registered office: U Národní galerie 470, Zbraslav, 156 00 Praha 5, Czech Republic PIVOVARY TRIANGL s.r.o. Identification number: 19883218 Registered office: Za Drahou 165/1, Pod Bezručovým vrchem, 794 01 Krnov, Czech Republic FILIP REAL a.s. Identification number: 27886557 Registered office: U Národní galerie 471, Zbraslav, 156 00 Praha 5, Czech Republic 8. REPORT ON RELATIONS Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Report on relations A-53 8.2. STRUCTURE OF RELATIONS AND OWNERSHIP INTERESTS BETWEEN RELATED ENTITIES AS AT 31 DECEMBER 2023 AETOS a.s. holds 67.22% share in the Company, the remaining shareholdings are presented in the chart below. 8.3. ROLE OF THE CONTROLLED ENTITY IN THE ORGANISATIONAL STRUCTURE The Company became part of the Group in 2015. The Company is the parent company of the Kofola Group. The main assets of the Company are the direct and indirect shareholdings in the Group companies. Company also provides certain services for the other companies in Kofola Group. This comprises, in particular, the provision of: • strategic services, including: cooperation in the preparation of business, marketing, production, investment and financing plans, management of subsidiaries, including their financing; • services related to products (quality department), including: central product development, innovation process management, costing and pricing, production and logistics planning, quality control; • shared services, including: controlling and reporting, IT services, legal services, central purchasing department, back office services, supply chain, call centre, internal audit; • licenses and trademarks: Kofola ČeskoSlovensko a.s. owns most licenses, trademarks for branded beverages and similar copyrights for the products distributed on the CzechoSlovak market, for which the other Group companies pay royalties. The Company is listed at Prague Stock Exchange. 8.4. METHOD AND MEANS OF CONTROL With the implementation of the Articles of Association of the Company dated 15 September 2015 as amended on 2 December 2015, 30 May 2016, 20 December 2018, 1 January 2021, 1 January 2022 and 28 June 2023, the control of the Company is exercised above all through decision taken by the General Meeting of the Company, especially through appointment and removal of members of the Supervisory Board which is according to the Articles of Association of the Company entitled to appoint and remove members of the Board of Directors of the Company. 8. REPORT ON RELATIONS Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Report on relations A-54 8.5. LIST OF ACTS WITH VALUE EXCEEDING 10% OF EQUITY OF CONTROLLED ENTITY Equity value of the Company as of 31 December 2022 was CZK 1,717,627 thousand. The Company distributed a dividend to AETOS a.s. of CZK 202,287 thousand. 8.6. LIST OF MUTUAL CONTRACTS BETWEEN CONTROLLED ENTITY AND CONTROLLING ENTITY OR BETWEEN CONTROLLED ENTITIES In the Indicated period, the following contracts were concluded or amended between controlled entity and controlling entity or between controlled entities: • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (CZ) on 1.1.2023, • car rental agreement concluded between UGO trade s.r.o. and Kofola ČeskoSlovensko a.s. on 16.1.2023, • contract for the transfer of rights to trademark applications concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (CZ) on 19.1.2023, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (CZ) on 24.1.2023 (2x), • car rental agreement concluded between Kofola a.s. (CZ) and Kofola ČeskoSlovensko a.s. on 3.1.2022, as amended on 1.2.2023, • car rental agreement concluded between Kofola a.s. (CZ) and Kofola ČeskoSlovensko a.s. on 1.2.2023, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (SK) on 1.2.2023, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and LEROS, s.r.o. on 1.2.2023, • car purchase agreement concluded between Kofola ČeskoSlovensko a.s. and SANTA-TRANS s.r.o. on 21.2.2023, • car rental agreement concluded between LEROS, s.r.o. and Kofola ČeskoSlovensko a.s. on 9.3.2023, • car rental agreement concluded between LEROS, s.r.o. and Kofola ČeskoSlovensko a.s. on 10.3.2023, • car rental agreement concluded between LEROS, s.r.o. and Kofola ČeskoSlovensko a.s. on 20.3.2023, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and LEROS, s.r.o. on 12.4.2023, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and Leros Slovakia, s.r.o. on 2.5.2023, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (CZ) on 17.5.2023, • loan agreement concluded between Kofola ČeskoSlovensko a.s. and Premium Rosa Sp. z o.o. on 1.9.2022, as amended on 17.5.2023, • loan agreement concluded between Kofola ČeskoSlovensko a.s. and Premium Rosa Sp. z o.o. on 16.12.2022, as amended on 17.5.2023, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and LEROS, s.r.o. on 24.5.2023, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (SK) on 1.6.2023, • loan agreement concluded between RADENSKA d.o.o. and Kofola ČeskoSlovensko a.s. on 26.6.2023, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (CZ) on 27.5.2021, as amended on 1.8.2023, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (CZ) on 26.10.2023, • car rental agreement concluded between Kofola a.s. (CZ) and Kofola ČeskoSlovensko a.s. on 1.11.2023 (2x), • loan agreement concluded between Kofola ČeskoSlovensko a.s. and F.H.Prager s.r.o. on 16.9.2022, as amended on 20.11.2023, • loan agreement concluded between Kofola ČeskoSlovensko a.s. and F.H.Prager s.r.o. on 1.12.2022, as amended on 20.11.2023, • loan agreement concluded between Kofola ČeskoSlovensko a.s. and F.H.Prager s.r.o. on 18.1.2023, as amended on 20.11.2023, • loan agreement concluded between Kofola ČeskoSlovensko a.s. and F.H.Prager s.r.o. on 3.4.2023, as amended on 20.11.2023, • loan agreement concluded between Kofola ČeskoSlovensko a.s. and F.H.Prager s.r.o. on 3.5.2023, as amended on 20.11.2023, • loan agreement concluded between Kofola ČeskoSlovensko a.s. and F.H.Prager s.r.o. on 26.7.2023, as amended on 20.11.2023, • loan agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (SK) on 1.9.2022, as amended on 20.11.2023, • loan agreement concluded between Kofola ČeskoSlovensko a.s. and LEROS, s.r.o. on 1.9.2022, as amended on 20.11.2023, 8. REPORT ON RELATIONS Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Report on relations A-55 • loan agreement concluded between Kofola ČeskoSlovensko a.s. and UGO trade s.r.o. on 1.9.2022, as amended on 20.11.2023, • loan agreement concluded between Kofola ČeskoSlovensko a.s. and F.H.Prager s.r.o. on 6.12.2023, • share purchase agreement in relation to share in Bilgola fresh s.r.o. concluded between Kofola ČeskoSlovensko a.s. and Lukáš Prauss on 22.12.2023, • share purchase agreement in relation to share in Bilgola fresh s.r.o. concluded between Kofola ČeskoSlovensko a.s. and Marek Farník on 22.12.2023. Provided guarantees: Entity providing guarantees Entity receiving guarantees Currency (CY) Guarantee amount Guarantee amount Guarantee period Guarantees provided for Relationship CY´000 CZK´000 Kofola ČeskoSlovensko a.s. City-Arena PLUS a.s. EUR 8 198 8/2025 UGO trade s.r.o. subsidiary ORLEN Unipetrol Doprava s.r.o. CZK 130 130 Until the end of contract UGO trade s.r.o. subsidiary Fatra, a.s. CZK 100 100 Until the end of contract UGO trade s.r.o. subsidiary Raiffeisen - Leasing, s.r.o. CZK 484 484 1/2025 LEROS, s.r.o. subsidiary Raiffeisen - Leasing, s.r.o. CZK 265 265 1/2025 LEROS, s.r.o. subsidiary Leasing České spořitelny, a.s. CZK 891 891 11/2027 UGO trade s.r.o. subsidiary Leasing České spořitelny, a.s. CZK 558 558 11/2027 LEROS, s.r.o. subsidiary The following contracts concluded between controlled entity and controlling entity or between controlled entities were effective in the Indicated period: • licence agreement concluded between Kofola Holding a.s. (predecessor of Kofola CS a.s.) and Kofola a.s. (CZ) on 1.11.2006, • service agency agreement concluded between Kofola Holding a.s. (predecessor of Kofola CS a.s.) and Kofola a.s. (CZ) on 1.11.2006, • licence agreement concluded between Kofola Holding a.s. (predecessor of Kofola CS a.s.) and Kofola a.s. (SK) on 1.11.2006, • service agency agreement concluded between Kofola Holding a.s. (predecessor of Kofola CS a.s.) and Kofola a.s. (SK) on 1.11.2006, • licence agreement concluded between PINELLI spol. s r.o. (successor of PINELLI spol. s r.o. after merger is Kofola ČeskoSlovensko a.s.) and Kofola a.s. (CZ) on 16.5.2011, • service agreement concluded between Kofola CS a.s. and Kofola a.s. (SK) on 20.1.2012, • master inter-group service agreement concluded between Kofola CS a.s. and Radenska d.d. Radenci (original company name of RADENSKA d.o.o.) on 18.3.2015, as amended on 31.3.2015, • management services agreement concluded between Kofola CS a.s. and Radenska d.d. Radenci (original company name of RADENSKA d.o.o.) on 1.1.2016, • agreement on the temporary assignment concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (SK) on 1.2.2017, • agreement on the temporary assignment concluded between Kofola ČeskoSlovensko a.s. and RADENSKA d.o.o. on 1.2.2017, • agreement on the temporary assignment concluded between Kofola ČeskoSlovensko a.s. and Studenac d.o.o. on 1.2.2017, • accounting services agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (SK) on 2.1.2018, • accounting services agreement concluded between Kofola ČeskoSlovensko a.s. and UGO trade s.r.o. on 2.1.2018, • accounting, financial, administrative and management services agreement concluded between Kofola ČeskoSlovensko a.s. and AETOS a.s. on 2.1.2019, • service agreement (controlling, financial, purchasing activities) concluded between Kofola ČeskoSlovensko a.s. and SANTA-TRANS s.r.o. on 1.12.2018, as amended on 1.1.2020, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (CZ) on 7.5.2021, • agreement on reimbursement of costs in Kofola Group senior management long-term remuneration program concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (SK) on 1.6.2021, • agreement on reimbursement of costs in Kofola Group senior management long-term remuneration program concluded between Kofola ČeskoSlovensko a.s. and LEROS, s.r.o. on 1.6.2021, • agreement on reimbursement of costs in Kofola Group senior management long-term remuneration program concluded between Kofola ČeskoSlovensko a.s. and RADENSKA d.o.o. on 1.6.2021, 8. REPORT ON RELATIONS Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Report on relations A-56 • agreement on reimbursement of costs in Kofola Group senior management long-term remuneration program concluded between Kofola ČeskoSlovensko a.s. and SANTA-TRANS s.r.o. on 1.6.2021, • agreement on reimbursement of costs in Kofola Group senior management long-term remuneration program concluded between Kofola ČeskoSlovensko a.s. and UGO trade s.r.o. on 1.6.2021, • car rental agreement concluded between UGO trade s.r.o. and Kofola ČeskoSlovensko a.s. on 29.6.2021, • master service agreement and contract of mandate concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (CZ), Kofola a.s. (SK), ONDRÁŠOVKA a.s., Karlovarská Korunní s.r.o., UGO trade s.r.o., LEROS, s.r.o., Premium Rosa Sp. z o.o., RADENSKA d.o.o., SANTA-TRANS s.r.o., Brute s.r.o. on 2.1.2021, as amended on 1.7.2021, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (SK) on 15.7.2021, • car rental agreement concluded between Kofola a.s. (CZ) and Kofola ČeskoSlovensko a.s. on 2.8.2021, • car rental agreement concluded between Kofola a.s. (CZ) and Kofola ČeskoSlovensko a.s. on 1.11.2021, • car rental agreement concluded between Kofola a.s. (CZ) and Kofola ČeskoSlovensko a.s. on 15.11.2021, • car rental agreement concluded between Kofola a.s. (CZ) and Kofola ČeskoSlovensko a.s. on 1.1.2022, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and F.H.Prager s.r.o. on 1.1.2022 (2x), • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (CZ) on 1.1.2022 (9x), • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (SK) on 1.1.2022 (9x), • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and RADENSKA d.o.o. on 1.1.2022 (2x), • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and UGO trade s.r.o. on 1.1.2022 (4x), • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (SK) on 10.1.2022, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (CZ) on 14.1.2022, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and LEROS, s.r.o. on 1.2.2022, • car rental agreement concluded between Kofola a.s. (CZ) and Kofola ČeskoSlovensko a.s. on 18.2.2022, • loan agreement concluded between Kofola ČeskoSlovensko a.s. and F.H.Prager s.r.o. on 25.2.2022, • share purchase agreement concluded between Kofola ČeskoSlovensko a.s. and RADENSKA d.o.o. on 7.3.2022, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (SK) on 15.3.2022, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (CZ) on 4.4.2022, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (CZ) on 29.4.2022, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (CZ) on 6.5.2022, • loan agreement concluded between Kofola ČeskoSlovensko a.s. and F.H.Prager s.r.o. on 12.5.2022, • car rental agreement concluded between Kofola a.s. (CZ) and Kofola ČeskoSlovensko a.s. on 1.1.2022, as amended on 1.7.2022, • car rental agreement concluded between Kofola a.s. (SK) and Kofola ČeskoSlovensko a.s. on 8.7.2022, • loan agreement concluded between Kofola ČeskoSlovensko a.s. and F.H.Prager s.r.o. on 19.7.2022, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (CZ) on 19.7.2022, • loan agreement concluded between Kofola ČeskoSlovensko a.s. and F.H.Prager s.r.o. on 3.8.2022, • loan agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (CZ) on 1.9.2022, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (SK) on 1.1.2022, as amended on 21.10.2022, • framework agreement - use of the Kofola Group´s fleet concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (CZ), Kofola a.s. (SK), LEROS, s.r.o., Leros Slovakia, s.r.o., UGO trade s.r.o. on 1.1.2021, as amended on 1.1.2022 and 1.11.2022, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and LEROS, s.r.o. on 14.11.2022, • car rental agreement concluded between Kofola a.s. (CZ) and Kofola ČeskoSlovensko a.s. on 1.12.2022 (2x), • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and Kofola a.s. (CZ) on 1.12.2022, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and LEROS, s.r.o. on 1.12.2022, • car rental agreement concluded between Kofola ČeskoSlovensko a.s. and Premium Rosa Sp. z o.o. on 1.12.2022. All described contractual relationships between the Company and controlling entity or controlled entities were established under standard contractual terms and conditions when the agreed and provided performance or consideration corresponded to the conditions of a standard business relation. Some transactions were realized based on purchase orders or oral agreements. 8. REPORT ON RELATIONS Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Report on relations A-57 8.7. ASSESSMENT OF ADVANTAGES AND DISADVANTAGES ARISING FROM RELATIONS BETWEEN RELATED ENTITIES Controlled entity has advantages from relations with Group entities coming mainly from synergies from optimisation of processes and costs throughout the Group and from possibility to exploit access to financial, knowledge and technical potential of individual entities. Controlled entity has no disadvantages from relations with Group entities. The Company is not exposed to any specific risk from relations with Group entities except those arising from standard participation in international business group. The Company has not suffered loss from contracts and agreements concluded in the Indicated period between the Company and other Group companies, or from other acts and measures that were concluded by the Company in the Indicated period based on instruction or in the interest of other Group entities. In Ostrava, on 29 March 2024 René Musila Martin Pisklák Vice-Chair of the Board of Directors Member of the Board of Directors 9. STATUTORY DECLARATION Kofola ČeskoSlovensko Group Consolidated annual financial report 2023 Statutory declaration A-58 9. STATUTORY DEC LARATION Statutory declaration of persons responsible for the annual report of Kofola ČeskoSlovensko a.s. To the best of our knowledge, the Separate Financial Statements and the Consolidated Financial Statements of Kofola ČeskoSlovensko a.s. („issuer“) and its Group for the reported year ended 31 December 2023, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position, and results of operations of the issuer and the entities included in the consolidation taken as a whole, and the Consolidated Annual Financial Report under the accounting law gives a true and fair view of the development and performance of the issuer and the position of the issuer and the entities included in the consolidation as a whole, including a description of the principal risks and uncertainties that they face. SIGNATURES OF THE COMPANY’S REPRESENTATIVES 11.4.2024 Janis Samaras Chair of the Board of Directors date name and surname position/role signature 11.4.2024 René Musila Vice-Chair of the Board of Directors date name and surname position/role signature 11.4.2024 Daniel Buryš Vice-Chair of the Board of Directors date name and surname position/role signature 11.4.2024 Martin Pisklák Member of the Board of Directors date name and surname position/role signature 11.4.2024 Martin Mateáš Member of the Board of Directors date name and surname position/role signature 11.4.2024 Marián Šefčovič Member of the Board of Directors date name and surname position/role signature 10. INDEPENDENT AUDITOR´S REPORT Kofola ČeskoSlovensko Group Consolidated annual report 2022 Independent auditor’s report A-59 10. INDEPENDENT AU DITOR´S REPORT 10. INDEPENDENT AUDITOR’S REPORT B-0 B. CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS 2023 Kofola ČeskoSlovensko a.s. 1. CONSOLIDATED FINANCIAL STATEMENTS B-1 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU 1. CONSOLIDATED FINA NCIAL STATEME NTS 1.1. CONSOLIDATED STATEMENT OF PROFIT OR LOSS for the 12-month period ended 31 December 2023 and 31 December 2022 in CZK thousand. Consolidated statement of profit or loss Note 2023 2022 CZK´000 CZK´000 Revenue 4.2 8,690,103 7,875,284 Cost of sales 4.3 (4,802,651) (4,564,018) Gross profit 3,887,452 3,311,266 Selling, marketing and distribution costs 4.3 (2,487,765) (2,329,973) Administrative costs 4.3 (707,052) (466,509) Other operating income 4.4 89,917 47,858 Other operating expenses 4.5 (35,349) (80,002) Operating profit/(loss) 747,203 482,640 Finance income 4.6 34,256 158,282 Finance costs 4.7 (295,532) (241,078) Share of profit/(loss) of equity accounted investees 4.12 (3,985) - Profit/(loss) before income tax 481,942 399,844 Income tax (expense)/benefit 4.8 (112,965) (135,925) Profit/(loss) for the period 1.2 368,977 263,919 Attributable to: Owners of Kofola ČeskoSlovensko a.s. 1.5 365,397 269,150 Non-controlling interests 1.5 3,580 (5,231) Earnings/(loss) per share for profit/(loss) attributable to the ordinary equity holders of the Company (in CZK) Basic earnings/(loss) per share 4.9 16.39 12.07 The above consolidated statement of profit or loss should be read in conjunction with the accompanying notes. 1. CONSOLIDATED FINANCIAL STATEMENTS B-2 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU 1.2. CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME for the 12-month period ended 31 December 2023 and 31 December 2022 in CZK thousand. Consolidated statement of other comprehensive income Note 2023 2022 CZK´000 CZK´000 Profit/(loss) for the period 1.1 368,977 263,919 Other comprehensive income Items that may be reclassified to profit or loss: Exchange differences 28,882 (29,345) Exchange differences on translation of foreign subsidiaries 27,221 (29,345) Exchange differences on translation of foreign equity accounted investees 1,661 - Derivatives accounted through Other comprehensive income (60,478) (5,143) Derivatives - Cash flow hedges (74,384) (6,350) Deferred tax from Cash flow hedges 4.8 13,906 1,207 Other comprehensive income/(loss) for the period, net of tax (31,596) (34,488) Total comprehensive income/(loss) for the period 1.5 337,381 229,431 Attributable to: Owners of Kofola ČeskoSlovensko a.s. 1.5 333,801 234,662 Non-controlling interests 1.5 3,580 (5,231) The above consolidated statement of other comprehensive income should be read in conjunction with the accompanying notes. 1. CONSOLIDATED FINANCIAL STATEMENTS B-3 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU 1.3. CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31 December 2023 and 31 December 2022 in CZK thousand. Assets Note 31.12.2023 31.12.2022 CZK´000 CZK´000 Non-current assets 5,130,248 5,088,930 Property, plant and equipment 4.10 3,113,262 3,098,477 Goodwill 4.11 662,318 647,969 Intangible assets 4.11 1,159,796 1,177,692 Investments in equity accounted investees 4.12 75,696 - Other receivables 4.14 80,569 164,792 Deferred tax assets 4.8 38,607 - Current assets 2,897,353 2,414,503 Inventories 4.13 706,191 766,437 Trade and other receivables 4.14 1,119,938 997,989 Income tax receivables 125 23,635 Cash and cash equivalents 4.15 1,071,099 626,442 Total assets 8,027,601 7,503,433 Liabilities and equity Note 31.12.2023 31.12.2022 CZK´000 CZK´000 Equity attributable to owners of Kofola ČeskoSlovensko a.s. 1.5 1,457,845 1,332,365 Share capital 1.5 1,114,597 1,114,597 Share premium and capital reorganisation reserve 1.5 (1,962,871) (1,962,871) Other reserves 1.5 2,614,776 2,516,742 Foreign currency translation reserve 1.5 (1,193) (30,075) Own shares 1.5 (467,382) (467,382) Retained earnings/(Accumulated deficit) 1.5 159,918 161,354 Equity attributable to non-controlling interests 1.5 5 (44,736) Total equity 1.5 1,457,850 1,287,629 Non-current liabilities 3,762,652 3,664,098 Bank credits and loans 4.18, 4.26.1 3,153,945 3,058,226 Lease liabilities 4.22, 4.26.1 215,891 252,594 Provisions 4.17 51,505 32,613 Other liabilities 4.19 76,847 16,825 Deferred tax liabilities 4.8 264,464 303,840 Current liabilities 2,807,099 2,551,706 Bank credits and loans 4.18, 4.26.1 447,315 491,799 Lease liabilities 4.22, 4.26.1 113,652 118,863 Provisions 4.17 182,248 100,509 Trade and other payables 4.19 1,982,385 1,832,832 Income tax liabilities 81,499 7,703 Total liabilities 6,569,751 6,215,804 Total liabilities and equity 8,027,601 7,503,433 The above consolidated statement of financial position should be read in conjunction with the accompanying notes. 1. CONSOLIDATED FINANCIAL STATEMENTS B-4 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU 1.4. CONSOLIDATED STATEMENT OF CASH FLOWS for the 12-month period ended 31 December 2023 and 31 December 2022 in CZK thousand. Consolidated statement of cash flows Note 2023 2022 CZK´000 CZK´000 Cash flows from operating activities Profit/(loss) before income tax 1.1 481,942 399,844 Adjustments for: Non-cash movements Depreciation and amortisation 4.3 540,421 586,096 Net interest 4.6, 4.7 242,935 209,973 Share of result of equity accounted investees, net of tax 4.12 3,985 - Impairment/(Release of impairment) of non-current assets 4.10.1 - 32,209 Change in the balance of provisions 4.17 98,846 7,052 Change in the balance of other impairments 12,674 (15,115) Derivatives 4.6, 4.7 (19,752) (127,841) Realised (gain)/loss on sale of Property, plant and equipment and Intangible assets 4.4, 4.5 (40,502) (3,085) Net exchange differences 23,311 (16,536) Share based payment 4.21 158,512 (1,508) Other 702 (4,995) Cash movements Income taxes paid (83,644) (97,881) Change in operating assets and liabilities Change in receivables (74,731) (140,964) Change in inventories 64,522 (135,341) Change in payables 75,429 230,865 Net cash inflow/(outflow) from operating activities 1,484,650 922,773 Cash flows from investing activities Sale of Property, plant and equipment 7,340 31,447 Sale of the closed Grodzisk Wielkopolski plant 119,025 - Acquisition of Property, plant and equipment and Intangible assets (417,083) (413,683) Acquisition of subsidiaries, net of cash acquired (22,677) - Acquisition of equity accounted investees (40,424) - Interest received 211 47 Loans granted (4,870) - Proceeds from repaid loans 500 - Capital contributions (38,083) - Net cash inflow/(outflow) from investing activities (396,061) (382,189) Cash flows from financing activities Lease payments 4.26.1 (137,343) (143,451) Proceeds from loans and bank credits 4.26.1 285,807 400,915 Repayment of loans and bank credits 4.26.1 (294,868) (214,663) Dividends paid to Company´s shareholders (286,601) (253,012) Interest paid (240,528) (207,177) Realised derivatives 4.6, 4.7 19,752 1,219 Terminated derivatives 4.6, 4.7 - 126,622 Dividends not drawn - 2,643 Transaction costs connected with loan financing - (7,482) Other (2,510) (1,938) Net cash inflow/(outflow) from financing activities (656,291) (296,324) Net increase/(decrease) in cash and cash equivalents 432,298 244,260 Cash and cash equivalents at the beginning of the period 1.3 626,442 391,517 Effects of exchange rate changes on cash and cash equivalents 12,359 (9,335) Cash and cash equivalents at the end of the period 1.3 1,071,099 626,442 * The Group has elected to present cash flows from operating activities using the indirect method. The above consolidated statement of cash flows should be read in conjunction with the accompanying notes. 1. CONSOLIDATED FINANCIAL STATEMENTS B-5 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU 1.5. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the 12-month period ended 31 December 2023 and 31 December 2022 in CZK thousand. Consolidated statement of changes in equity Note Equity attributable to owners of Kofola ČeskoSlovensko a.s. Equity attributable to non- controlling interests Total equity Share capital Share premium and capital reorganisation reserve Interest rate swaps Share based payment Other funds Foreign currency translation reserve Own shares Retained earnings/ (Accumulated deficit) Total CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Balance as at 1 January 2023 1,114,597 (1,962,871) 69,413 18,567 2,428,762 (30,075) (467,382) 161,354 1,332,365 (44,736) 1,287,629 Profit/(loss) for the period 1.1 - - - - - - - 365,397 365,397 3,580 368,977 Other comprehensive income/(loss) 1.2 - - (60,478) - - 28,882 - - (31,596) - (31,596) Total comprehensive income/(loss) for the period - - (60,478) - - 28,882 - 365,397 333,801 3,580 337,381 Dividends 4.16.4 - - - - - - - (286,601) (286,601) - (286,601) Share based payment 4.21 - - - 158,512 - - - - 158,512 - 158,512 Acquisition of NCI without change in control 4.30 - - - - - - - (80,718) (80,718) 41,156 (39,562) Acquisition of subsidiary with NCI - - - - - - - - - 5 5 Dividends not collected - - - - - - - 486 486 - 486 Transactions with owners in their capacity as owners - - - 158,512 - - - (366,833) (208,321) 41,161 (167,160) Balance as at 31 December 2023 1,114,597 (1,962,871) 8,935 177,079 2,428,762 (1,193) (467,382) 159,918 1,457,845 5 1,457,850 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. Dividend distribution The General Meeting held outside of the meeting during 4 – 19 September 2023 has approved a distribution of dividends in the amount of CZK 13.5 per share, i.e. CZK 286,601 thousand in the consolidated financial statements. 1. CONSOLIDATED FINANCIAL STATEMENTS B-6 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU Consolidated statement of changes in equity Note Equity attributable to owners of Kofola ČeskoSlovensko a.s. Equity attributable to non- controlling interests Total equity Share capital Share premium and capital reorganisation reserve Interest rate swaps Share based payment Other funds Foreign currency translation reserve Own shares Retained earnings/ (Accumulated deficit) Total CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Balance as at 1 January 2022 1,114,597 (1,962,871) 74,556 30,026 2,428,762 (730) (477,333) 129,457 1,336,464 (39,505) 1,296,959 Profit/(loss) for the period 1.1 - - - - - - - 269,150 269,150 (5,231) 263,919 Other comprehensive income/(loss) 1.2 - - (5,143) - - (29,345) - - (34,488) - (34,488) Total comprehensive income/(loss) for the period - - (5,143) - - (29,345) - 269,150 234,662 (5,231) 229,431 Dividends 4.16.4 - - - - - - - (239,896) (239,896) - (239,896) Shares transfer to share based payment participants 4.16.2 - - - (9,951) - - 9,951 - - - - Share based payment 4.21 - - - (1,508) - - - - (1,508) - (1,508) Dividends not collected - - - - - - - 2,643 2,643 - 2,643 Transactions with owners in their capacity as owners - - - (11,459) - - 9,951 (237,253) (238,761) - (238,761) Balance as at 31 December 2022 1,114,597 (1,962,871) 69,413 18,567 2,428,762 (30,075) (467,382) 161,354 1,332,365 (44,736) 1,287,629 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. Dividend distribution The General Meeting held outside of the meeting during 5 – 20 September 2022 has approved a distribution of dividends in the amount of CZK 11.3 per share, i.e. CZK 239,896 thousand in the consolidated financial statements. 2. GENERAL INFORMATION B-7 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU 2. GENERAL INFORMAT ION 2.1. CORPORATE INFORMATION GENERAL INFORMATION Kofola ČeskoSlovensko a.s. (“the Company”) is a joint-stock company registered on 12 September 2012. Its registered office is Nad Porubkou 2278/31a, Ostrava, 708 00, Czech Republic and the identification number is 24261980. The Company is recorded in the Commercial Register kept by the Regional Court in Ostrava, section B, Insert No. 10735, in the Czech Republic. The Company´s websites are https://www.kofola.cz/ and the phone number is +420 595 601 030. LEI: 3157005DO9L5OWHBQ359. Company’s principal place of business is Ostrava. Main area of activity of Kofola ČeskoSlovensko a.s. in 2023 was holding of the subsidiaries and providing certain services for the other companies in Kofola Group, e.g. strategic services, services related to products, shared services and holding of licences and trademarks. Kofola ČeskoSlovensko a.s. is the parent of the Kofola Group. Besides the traditional markets of the Czech Republic and Slovakia, the Group is also present in Slovenia, Croatia and in Poland. The Group produces drinks in eleven production plants and key trademarks include Kofola, Jupí, Jupík, Rajec, Radenska, Semtex energy drink, Vinea, Ondrášovka and Korunní. On selected markets, the Group distributes among others Rauch, Evian, Café Reserva and Dilmah products and under the licence produces Royal Crown Cola or Orangina. Besides traditional non-alcoholic drink segment, Group is also entering new smaller segments through the acquisition of coffee plantations and apple orchards, but with its latest acquisition of Pivovary CZ Group a.s. realized in March 2024, at is also entering the beer segment. Based on the information known to the Board of Directors of the Company acting with due care, the ultimate parent of the Company is AETOS a.s. AETOS a.s. is also an ultimate parent of the Group. The ownership structure is described in section 4.24.1. Stock exchange listing Kofola ČeskoSlovensko a.s. is listed on Prague Stock Exchange (ticker KOFOL). MANAGEMENT As at 31 December 2023, the composition of the Board of Directors, Supervisory Board and Audit Committee was as follows: BOARD OF DIRECTORS • Janis Samaras – Chair • René Musila – Vice-Chair • Daniel Buryš – Vice-Chair • Martin Pisklák • Martin Mateáš • Marián Šefčovič SUPERVISORY BOARD • René Sommer – Chair • Tomáš Jendřejek • Moshe Cohen-Nehemia • Alexandros Samaras • Ladislav Sekerka AUDIT COMMITTEE • Zuzana Prokopcová – Chair • Petr Šobotník • Lenka Frostová 2. GENERAL INFORMATION B-8 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU 2.2. GROUP STRUCTURE Group structure chart as at 31 December 2023 Description of the group companies Name of entity Place of business Segment (section 4.1) Principal activities Ownership interest and voting rights 31.12.2023 31.12.2022 Holding companies Kofola ČeskoSlovensko a.s. Czech Republic CzechoSlovakia top holding company Cafe Dorado s.r.o. Czech Republic Fresh & Herbs holding company 50.00% n/a PIVOVARY TRIANGL s.r.o. Czech Republic n/a holding company 51.00% n/a Bilgola fresh s.r.o.* Czech Republic Fresh & Herbs holding company 100.00% n/a Production and trading Kofola a.s. Czech Republic CzechoSlovakia production and distribution of non-alcoholic beverages 100.00% 100.00% Kofola a.s. Slovakia CzechoSlovakia production and distribution of non-alcoholic beverages 100.00% 100.00% UGO trade s.r.o.* Czech Republic Fresh & Herbs operation of Fresh bars chain, production of salads 90.00% 90.00% RADENSKA d.o.o. Slovenia Adriatic production and distribution of non-alcoholic beverages 100.00% 100.00% Studenac d.o.o. Croatia Adriatic production and distribution of non-alcoholic beverages 100.00% 100.00% Premium Rosa Sp. z o.o. Poland Fresh & Herbs production and distribution of syrups and jams 100.00% 100.00% LEROS, s.r.o. Czech Republic Fresh & Herbs production and distribution of products from medicinal plants and quality natural teas 100.00% 100.00% Leros Slovakia, s.r.o. Slovakia Fresh & Herbs distribution of products from medicinal plants and quality natural teas 100.00% 100.00% F.H.Prager s.r.o. Czech Republic CzechoSlovakia production and distribution of ciders and kombucha 100.00% 100.00% Semtex Republic s.r.o. Czech Republic CzechoSlovakia marketing activities 100.00% 100.00% Zahradní OLLA s.r.o.* Czech Republic n/a production and distribution of self-watering clay pots 34.00% n/a FILIP REAL a.s. Czech Republic n/a hotel operation 100.00% n/a Bylinkárna s.r.o. Czech Republic Fresh & Herbs products completion and packaging 100.00% 100.00% General Plastic, a. s. Slovakia CzechoSlovakia production of hot-washed PET flakes and PET preforms 33.33% n/a AGRITROPICAL S.A.S. Colombia n/a coffee plantations 25.00% n/a Transportation SANTA-TRANS s.r.o. Czech Republic CzechoSlovakia road cargo transport 100.00% 100.00% * Established in Jun 2023. ** Acquired in Sep 2023. *** Established in Nov 2023. Acquired in May 2023. Acquired in Dec 2023. Effective share of Kofola Group in UGO trade s.r.o. is 100% after the acquisition of Bilgola fresh s.r.o. in Dec 2023. 3. MATERIAL ACCOUNTING POLICIES B-9 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU 3. MATERIAL ACCOUNT ING POLICIES 3.1. STATEMENT OF COMPLIANCE AND BASIS OF PREPARATION BASIS OF PREPARATION The consolidated financial statements have been prepared in accordance with the laws binding in the Czech Republic and with International Financial Reporting Standards (“IFRS Accounting Standards”), as well as the interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”) adopted by the European Union, published and effective for reporting periods beginning 1 January 2023. The consolidated financial statements have been prepared on a going concern basis and in accordance with the historical cost method, except for financial assets and liabilities measured at fair value, employee share-based payments measured at grant date fair value and contingent consideration relating to business combinations at fair value. The consolidated financial statements include the consolidated statement of the financial position, consolidated statement of profit or loss, consolidated statement of other comprehensive income, consolidated statement of changes in equity, consolidated statement of cash flows and explanatory notes. The Group’s consolidated financial statements cover the year ended 31 December 2023 and the year ended 31 December 2022 (comparatives). The consolidated financial statements are presented in Czech crowns (“CZK”), and all values, unless stated otherwise, are presented in CZK thousand. The preparation of financial statements in conformity with IFRS Accounting Standards requires the use of certain critical accounting estimates. It also requires that management exercises its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in section 3.7. 3.2. FUNCTIONAL AND PRESENTATION CURRENCY The consolidated financial statements are presented in Czech crowns (CZK), which is the Company´s functional and presentation currency. 3.3. FOREIGN CURRENCY TRANSLATION The financial statements items of the Group entities are measured using their functional currency. Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Monetary assets and liabilities expressed as at the balance sheet date in foreign currencies are translated using the closing exchange rate announced by the National Bank for the end of the reporting period, and all foreign exchange gains or losses are recognized in profit or loss under: • operating income and expense – for trading operations, • finance income and costs – for financial operations. Non-monetary assets and liabilities carried at historical cost expressed in a foreign currency are stated at the historical exchange rate as at the date of the transaction. Non-monetary assets and liabilities carried at fair value expressed in a foreign currency are translated at the exchange rate as at the date on which they were remeasured to the fair value. 3. MATERIAL ACCOUNTING POLICIES B-10 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU The following exchange rates were used for the preparation of the financial statements: Closing exchange rates 31.12.2023 31.12.2022 CZK/EUR 24.725 24.115 CZK/PLN 5.694 5.152 CZK/HRK n/a 3.200 Average exchange rates 1.1.2023 - 31.12.2023 1.1.2022 - 31.12.2022 CZK/EUR 24.007 24.565 CZK/PLN 5.290 5.245 CZK/HRK n/a 3.260 Croatia is part of Eurozone since 1 January 2023, as such, the balances of Studenac d.o.o. have been translated to CZK from EUR. The results and financial position of foreign operations are translated into CZK as follows: • assets and liabilities for each statement of financial position presented at closing exchange rates announced by the Czech National Bank for the balance sheet date, • income and expense for each statement of profit or loss at average exchange rates announced by the Czech National Bank for the reporting period, unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions, • the resulting exchange differences are recognised in other comprehensive income and accumulated in equity, • cash-flow statement items at the average exchange rate announced by the Czech National Bank for the reporting period, unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions. The resulting foreign exchange differences are recognized under the “Effects of exchange rate changes on cash and cash equivalents” item of the cash-flow statement. Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate. Foreign exchange gains and losses recognized in profit or loss are offset on individual company level. 3.4. CONSOLIDATION METHODS 3.4.1 SUBSIDIARIES General methods Subsidiaries are those investees, including structured entities, that the Group controls because the Group (i) has power to direct the relevant activities of the investees that significantly affect their returns, (ii) has exposure, or rights, to variable returns from its involvement with the investees, and (iii) has the ability to use its power over the investees to affect the amount of the investor’s returns. The existence and effect of substantive rights, including substantive potential voting rights, are considered when assessing whether the Group has power over another entity. For a right to be substantive, the holder must have a practical ability to exercise that right when decisions about the direction of the relevant activities of the investee need to be made. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. The Group also assesses the existence of control where it does not have more than 50% of the voting power but is able to govern the financial and operating policies by virtue of de-facto control. De-facto control may arise in circumstances where the size of the Group’s voting rights relative to the size and dispersion of holdings of other shareholders give the Group the power to govern the financial and operating policies, etc. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity instruments issued by the Group. The consideration transferred includes the fair value of any 3. MATERIAL ACCOUNTING POLICIES B-11 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values as at the acquisition date. The Group recognizes any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred. If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is re-measured to fair value at the acquisition date; any gains or losses arising from such remeasurement are recognised in profit or loss. Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IFRS 9 in profit or loss. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity. Goodwill is initially measured as the excess of the aggregate of the consideration transferred and initially recognized non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss. Inter-company transactions, balances, income and expenses on transactions between Group companies are eliminated. Profits and losses resulting from intercompany transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Changes in ownership interests in subsidiaries without change of control Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share of the acquired carrying value of net assets of the subsidiary is recorded in retained earnings. Gains or losses on disposals to non-controlling interests are also recorded in equity. Disposal of subsidiaries When the Group ceases to have control, any retained interest in the entity is remeasured to its fair value as at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss. 3.4.2 ASSOCIATES AND EQUITY ACCOUNTED INVESTEES Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Joint venture or Joint operation is an investment where the Group has a joint control over the investment. Equity accounted investees are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognized at cost, and the carrying amount is increased or decreased to recognize the investor’s share of the net assets of the investee after the date of acquisition. The Group’s investment in equity accounted investees includes goodwill identified on acquisition. If the ownership interest is reduced but significant influence is retained, only a proportionate share of the amounts previously recognized in other comprehensive income is reclassified to profit or loss where appropriate. The Group’s share of post-acquisition profit or loss is recognized in profit or loss and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the Group’s share of losses in an investment equals or exceeds its interest in the investment, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the investment. The foreign investments are retranslated using foreign exchange rate valid at the balance sheet date and any resulting difference is recognised in Other comprehensive income. The Group determines as at each reporting date whether there is any objective evidence that the investment is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of 3. MATERIAL ACCOUNTING POLICIES B-12 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU the investment and its carrying value and recognises the amount adjacent to share of profit/(loss) of investment in the income statement. Profits and losses resulting from upstream and downstream transactions between the Group and its investments are recognised in the Group’s financial statements only to the extent of unrelated investor’s interests in the investments. Unrealised gains and losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of the investments have been changed where necessary to ensure consistency with the policies adopted by the Group. 3.5. ACCOUNTING METHODS 3.5.1 PROPERTY, PLANT AND EQUIPMENT Items of property, plant and equipment are stated at cost less accumulated depreciation and less any impairment losses. Items acquired in a business combination are measured at their acquisition-date fair values. The costs of non-current assets consist of their acquisition price plus all costs directly associated with the asset’s acquisition and adaptation for use. The costs also include the cost of replacing parts of machines and equipment as they are incurred, if the recognition criteria are met. Costs incurred after the asset is given over for use, such as maintenance and repairs, are charged to the income statement as they are incurred. If circumstances occurred during the preparation of the financial statements indicating that the carrying value of item of property, plant and equipment may not be recoverable, the said asset is tested for impairment. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). If there are indications that impairment might have occurred, and the balance sheet value exceeds the estimated recoverable amount, then the value of those assets or cash generating units to which the assets belong is reduced to the value of the recoverable amount. The recoverable value corresponds to the higher of the following two values: the fair value less costs of disposal, or the value in use. When determining value in use, the estimated future cash flows are discounted to the present value using a post-tax discount rate reflecting the current market assessments of the time value of money and the risk associated with the given asset component. If the asset component does not generate income sufficiently independently, the recoverable amount is determined for the cash generating unit to which the asset belongs. Impairment write downs are recognised in the income statement under other operating costs or in the separate row if material. A given tangible non-current asset is derecognised from the balance sheet when it is sold or if no economic benefits are anticipated from its continued use. All profits and losses arising from the derecognition (calculated as the difference between the potential proceeds from the sale and the balance sheet value of a given item) are recognised in the income statement in the period in which the derecognition was performed. Assets under construction consist of non-current assets that are being constructed or assembled and are stated at acquisition price or cost of production. Non-current assets under construction are not depreciated until the construction is completed and the assets given over for use. Returnable packages in circulation are recorded within property, plant and equipment at cost net of accumulated depreciation less any impairment loss. Returnable packages allocated at customers are covered by advances received and are further described in section 3.5.6. When the advances received are written-off, the respective returnable packages are derecognized. The balance sheet value, the useful life and the depreciation method of non-current assets are verified, and, if need to be, adjusted, at the end of each financial year. Items of income and expense related to sold property, plant and equipment are offset on individual company level. 3. MATERIAL ACCOUNTING POLICIES B-13 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU Depreciation Items of property, plant and equipment, or their significant and separate components, are depreciated using the straight-line method to allocate their costs to their residual values over their economic useful lives. Land is not depreciated. Depreciation of returnable packages is recorded to write them off over the course of their economic life. The Group assumes the following economic useful lives for the following categories of non-current assets: Asset category Useful life Buildings and constructions 20 – 40 years Technical improvement on leased property 9 years in average Plant and equipment 2 – 15 years Vehicles 4 – 10 years Returnable packages 2 – 10 years 3.5.2 LEASES At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. As a lessee At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration on the contract to each lease component on the basis of its relative stand-alone prices. The Group recognises a right-of-use asset (RoUA) and a lease liability at the lease commencement date. The RoUA is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The RoUA is subsequently depreciated under the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the RoUA reflects that the Group will exercise a purchase option. In that case the RoUA will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property, plant and equipment. In addition, the RoUA is periodically reduced by the impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses interest rate implicit in the lease for the vehicle leases and its incremental borrowing rate for other leases. Lease payments included in the measurement of the lease liability comprise the following: • fixed payments, including in-substance fixed payments, • variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date, • amounts expected to be payable under residual value guarantee, • the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early. The lease liability is measured at amortised cost under the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the RoUA, or is recorded in profit or loss if the carrying amount of the RoUA has been reduced to nil. The Group presents RoUA that do not meet a definition of investment property in Property, plant and equipment and lease liabilities on separate rows in the statement of financial position. 3. MATERIAL ACCOUNTING POLICIES B-14 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU The Group leases mainly the head office administrative building, premises for Fresh and Salad bars, production equipment and vehicles. Rental contracts are typically made for fixed periods of 1 to 10 years but may have extension options or may be longer in case of rents of lands. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. Extension options relate mainly to long-term contracts and in most cases are not expected to be utilized due to length of the period and associated future uncertainties in macroeconomic and microeconomic development. Short-term leases and leases of low-value assets The Group has elected not to recognise RoUA and lease liabilities for leases of low-value assets and short-term leases, including IT equipment. The Group recognises the lease paymets associated with the leases as an expense on a straight-line basis over the lease term. 3.5.3 GOODWILL Goodwill is carried at cost less accumulated impairment losses, if any. The Group tests goodwill for impairment at least annually and whenever there are indications that goodwill may be impaired. Goodwill is allocated to the cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the business combination. Such units or groups of units represent the lowest level at which the Group monitors goodwill and are not larger than an operating segment. Any impairment of goodwill cannot be subsequently reversed. Gains or losses on disposal of an operation within a cash generating unit to which goodwill has been allocated include the carrying amount of goodwill associated with the disposed operation, generally measured on the basis of the relative values of the disposed operation and the portion of the cash-generating unit which is retained. 3.5.4 INTANGIBLE ASSETS Intangible assets acquired in a separate transaction are initially stated at acquisition price. The acquisition price of intangible assets acquired in a business combination is equal to their fair value as at the date of the combination. After their initial recognition, intangible assets are stated at their historical price or production costs less accumulated amortisation and impairment write downs. Expenditures on internal research and development, except for capitalised development costs of identifiable intangible assets, are not capitalised and are recognised in the income statement of the period in which they were incurred. The Group determines whether the economic useful life of an intangible asset is finite or indefinite. A significant part of the Group's intangible assets constitute trademarks, for most of them the Group has determined that they have an indefinite useful life. The Group companies are the owners of some of the leading trademarks in non-alcoholic beverages in Central Europe. As a result, these trademarks are generating positive cash flows and the Group owns the trademarks for the long term. The Board considered several factors and circumstances in concluding that these trademarks have indefinite useful lives, such as size, diversification and market share of each trademark, the trademark's past performance, long-term development strategy, any laws or other local regulations which may affect the life of the assets and other economic factors, including the impact of competition and market conditions. The Group’s management expects that it will hold and promote trademarks for an indefinite period through marketing and promotional support. The trademarks with indefinite useful lives are tested for impairment at least annually. The Group has reassessed useful lives of assets with indefinite useful life and concluded that current events and circumstances continue to support an indefinite useful life assessment. Intangible assets with finite useful lives are amortised over the useful economic life and assessed for impairment whenever there are impairment indicators. Useful life and method of amortisation of intangible assets with finite lives are reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of the future economic benefits embodied in the asset are accounted for by changing the amortisation period or method and treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the income statement in the expense category consistent with the function of the intangible asset. Intangible assets with finite useful lives are assessed for impairment whenever there are impairment indicators. 3. MATERIAL ACCOUNTING POLICIES B-15 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU Intangible assets are amortised using the straight-line method over their useful lives: Asset category Useful life Software licences 3 – 16 years Computer software 3 – 6 years Other licences 5 – 7 years Valuable rights 5 – 10 years 3.5.5 RECOVERABLE VALUE OF NON-FINANCIAL ASSETS For its non-financial assets, except for inventory and deferred tax assets, the Group evaluates its assets whether indicators of impairment are present as at each balance sheet date. For goodwill and indefinite life intangible assets, the Group performs a formal estimate of the recoverable amount annually, for remaining assets the estimate is performed in case of presence of impairment indicators. If the carrying value of a given asset or cash-generating unit exceeds its recoverable amount, it is considered impaired and written down to its recoverable amount. The recoverable amount corresponds to the higher of the following two values: the fair value less costs of disposal, or the value in use of a given asset or cash generating unit. When determining value in use, the estimated future cash flows are discounted to the present value using a post-tax discount rate reflecting the current market assessments of the time value of money and the risk associated with the given asset component. Impairment write downs are recognised in the income statement under other operating costs or in the separate row if material. The impairment loss recognised, except for impairment of goodwill, may be reversed in future periods if the asset’s value recovers. If there is any indication that an asset may be impaired, recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount is determined for the cash-generating unit to which the asset belongs. If there isn’t any such cash-generating unit, as a CGU is considered the whole entity and any impairment loss is allocated to the particular entity’s assets respecting the IFRS Accounting Standards requirements on order of the impairment loss allocation. 3.5.6 FINANCIAL INSTRUMENTS Financial instrument is any formal agreement that gives rise to a financial asset of one entity, and a financial liability or equity instrument of another entity. The most significant assets that are subject to the financial instruments accounting policies are: • derivative instruments (swap contracts), • other financial receivables, • trade receivables, • cash. The most significant liabilities that are subject to the financial instruments accounting policies: • loan payables, • derivative instruments (swap contracts), • trade payables, • advances received for the returnable packages, • contingent/deferred consideration liabilities, • lease liabilities. The Group’s financial assets/liabilities are classified to the following categories: • measured at amortized costs, • fair value through other comprehensive income (FVTOCI), and • fair value through profit and loss (FVTPL). Classification is based on the nature of the assets/liabilities and management intention. The Group classifies its assets/liabilities at their initial recognition. Financial assets/liabilities Financial assets are initially recognised at fair value, except for trade receivables which are initially recognised based on IFRS 15 transaction price. Their initial valuation is increased by transaction costs, with the exception of financial assets stated 3. MATERIAL ACCOUNTING POLICIES B-16 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU at fair value through profit or loss. The transaction costs payable in case of a possible disposal of the asset are not deducted from subsequent measurement of financial assets. The asset is recognised in the balance sheet when the Group becomes a party to the agreement (contract), out of which the financial asset arises. Financial liabilities are initially recognised at fair value. Transaction costs are deducted from the amount at initial recognition, except for financial liabilities at fair value through the profit or loss. The transaction costs payable upon a transfer of a financial liability are not added to the subsequent valuation of financial liabilities. The financial liabilities are recognised in the balance sheet when the Group becomes a party to the agreement, out of which the financial liability arises. Financial assets/liabilities measured at amortized costs Financial assets measured at amortized costs include primarily trade receivables, bank deposits and other cash funds. Depending on their maturity date, they are included in non-current assets (assets due in more than 1 year after the end of the reporting period) or current assets (assets due within 1 year after the end of the reporting period). The assets included in this category are stated at amortised cost using the effective interest method. Financial liabilities include primarily trade payables, advances received for the returnable packages, leases and loans. The liabilities included in this category are stated at amortised cost using the effective interest method. The Group classifies its financial assets as at amortised cost only if both of the following criteria are met: • the asset is held within a business model whose objective is to collect the contractual cash flows, and • the contractual terms give rise to cash flows that are solely payments of principal and interest. Financial liabilities are measured at mortised costs under the effective interest method. Interest expense expense and foreign exchange gains and losses are recognised in profit or loss. Financial liabilities include also advances received from customers for the returnable packages (e.g. bottles, crates, pallets, KEGs). These are recognized when the cash advance for the returnable packages is received. Such liabilities are derecognized when the returnable packages are returned to the Group. Liabilities from advances received for the returnable packages are payable on demand and as such are presented within current liabilities undiscounted. Some of returnable packages are never returned to the Group and advances related to these packages are regularly written-off against profit or loss. The amount of write-offs is based on management historical experience with the rate of return of particular types of packages. Financial assets/liabilities measured at fair value through other comprehensive income Except for interest rate swaps for which the hedge accounting is applied, the Group doesn’t have any assets/liabilities measured at fair value through other comprehensive income. Derivative financial instruments and hedge accounting This category includes derivative instruments in the Group’s balance sheet. The Group holds derivative financial instruments to hedge its interest rate risk exposures. Financial assets/liabilities within this category serve for the hedging of risks associated with the cash flows of recognised assets and liabilities and highly probable forecast transactions (cash flow hedges) and are presented within other receivables/other payables. At the inception of the hedging relationship, there is a formal designation and documentation of the hedging relationship and the Group’s risk management objective and strategy for undertaking the hedge. The Group also documents the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period through other comprehensive income. The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in the cash flow hedge reserve within equity. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss, within finance income/costs. Amount accumulated in the hedging reserve and the cost of hedging reserve are reclassified to profit or loss in the same period or periods during which the hedged expected future cash flows affect profit or loss. The fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 1 year after the end of the reporting period. 3. MATERIAL ACCOUNTING POLICIES B-17 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU When the financial asset/liability is derecognized, the cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss. Financial assets/liabilities measured at fair value through profit or loss This category in general includes two groups of assets: financial assets held for trading and financial assets designated initially at fair value through profit or loss. A financial asset is included in the held for trading category if it was acquired in order to be sold in the near term, or if it is part of a portfolio in which a pattern or short-term trading exists, or if it is a derivative instrument with a positive fair value and not designated for hedges. Assets classified as financial assets designated at fair value through profit or loss are stated as at each reporting date at fair value, and all gains or losses are recognised as financial income or costs. Derivative financial instruments are stated at fair value as at the balance sheet date and as at the end of each reporting period based on valuations performed by the banks realising the transactions which are accepted by the management. Other financial assets designated at fair value through profit or loss are valued using stock exchange prices, and in their absence, using appropriate valuation techniques, such as: the use of the prices in recent transactions, comparisons with similar instruments, option valuation models. The fair value of debt instruments represents primarily future cash flows discounted at the current market interest rate applicable to similar instruments. This category includes two groups of liabilities: financial liabilities held for trading and financial liabilities designated at fair value through profit or loss. Financial liabilities held for trading are liabilities that: have been issued primarily to be transferred or repurchased in near term or are a component of a portfolio of financial instruments that are managed together with a purpose of generating a profit from short-term fluctuations in price or trader’s margin or constitute derivative instruments. Financial liabilities at fair value through profit or loss are measured at their fair value at the end of each reporting period, and all gains or losses are recognised as finance income or costs. Derivative instruments are measured at fair value at the end of each reporting period based on valuations performed by the banks realising the transactions which are accepted by the management. The fair value of debt instruments represents future cash flows discounted at the current market interest rate applicable to similar instruments. Impairment of financial assets The Group recognises a loss allowance for expected credit losses (ECL) on financial assets that are measured at amortized costs. For trade receivables, the Group measures loss allowances at an amount equal to lifetime ECLs. For other financial assets the Group measures loss allowances at amount equal to either 12-month ECL or lifetime ECL (when the credit risk of an asset has increased significantly). When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort (mainly historical experience, credit assessment, current and forward-looking information available to the management). The Group assumes that the credit risk on financial assets has increased significantly if it is more than 90 days past due. The Group considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held). Lifetime expected credit losses are those that result from all possible default events over the expected life of a financial instrument. 12-month expected credit losses constitute the portion of lifetime expected credit losses that represents the expected credit losses that result from default events on a financial instrument that are possible within the 12 months after the reporting date. The Group considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of investment grade. The Group considers this to be Ba1 or higher per rating of agency Moody's. The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk. 3. MATERIAL ACCOUNTING POLICIES B-18 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU ECLs are a probability-weighted estimates of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset. Derecognition of financial assets/liabilities The Group derecognises financial assets when (a) the assets are redeemed or the rights to cash flows from the assets otherwise expired or (b) the Group has transferred the rights to the cash flows from the financial assets or entered into a qualifying pass-through arrangement while (i) also transferring substantially all risks and rewards of ownership of the assets or (ii) neither transferring nor retaining substantially all risks and rewards of ownership but not retaining control. Control is retained if the counterparty does not have the practical ability to sell the asset in its entirety to an unrelated third party without needing to impose additional restrictions on the sale. The Group derecognises financial liability (or part of a financial liability) when it extinguishes, i.e. when the obligation is discharged, cancelled or expires. The difference between the carrying amount of a financial liability (or part of a financial liability) extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. Offsetting Financial assets and liabilities are offset and the net amount reported in the statement of financial position only when there is a legally enforceable right to offset the recognised amounts, and there is an intention to either settle on a net basis, or to realise the asset and settle the liability simultaneously. However, the offsetting is not possible if it cannot be legally enforced in the normal course of business, in the event of default or in the event of insolvency or bankruptcy of the entity or any of the counterparties. 3.5.7 INVENTORIES Inventories are carried at the lower of cost and net realisable value. Cost of inventory is determined on the weighted average basis. The cost of finished goods and work in progress comprises raw material, direct labour, other direct costs and related production overheads (based on normal operating capacity). Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. Inventory is written down to bring the carrying value of inventory to the net realisable value. Inventory write downs are recognised in the income statement under the “cost of goods sold” item. Reversals of inventory write downs are recorded as a decrease of the cost of goods sold. The amount of a write down decreases the carrying value of the inventory. 3.5.8 TRADE AND OTHER RECEIVABLES Trade and other financial receivables are carried at amortised cost (i.e. present value discounted using the effective interest rate) net of impairment write downs. In cases when the effect of the time value of money is significant, the carrying value of a receivable is determined by discounting the expected future cash flows to the present value, using a discount rate that reflects the current market assessments of the time value of money. Unwinding of the effects of discounting increasing the receivable is recorded as finance income. An impairment loss is recognised in profit or loss at the difference between an asset´s carrying amount and the present value of the estimated cash flows discounted at the asset´s original effective interest rate. For the measurement of loss allowance for financial assets refer to section 3.5.6. Non-financial receivables are assessed at each reporting date to determine whether there is an objective evidence of impairment. Such evidence includes: • significant financial difficulties of the debtor, • probability that the debtor will enter bankruptcy or financial reorganisation, • default or delinquency by the debtor. 3.5.9 CASH AND CASH EQUIVALENTS Cash and cash equivalents include cash at bank and in hand, as well as highly liquid investments that can be readily convertible to known amount of cash and are subject to insignificant changes in the value. 3. MATERIAL ACCOUNTING POLICIES B-19 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU The balance of cash and cash equivalents presented in the consolidated statement of cash flows consists of cash at bank and in hand, as well as short-term deposits with original maturity up to 3 months. 3.5.10 EQUITY Equity is classified by category and in accordance with binding legal regulations and the Company’s Statute. Share capital is carried at the amount stated in the Statute and in the National Court Register. Declared but unpaid capital contributions are recorded as unpaid share capital. Treasury shares and unpaid share capital are deducted from the Company’s equity. Other elements of equity are: Share premium and capital reorganisation reserve, Other reserves, Foreign currency translation reserve, Own shares, Retained earnings and Non-controlling interest. Balance of the Foreign currency translation reserve is adjusted for exchange differences arising from the translation of financial statements of subsidiaries with functional currency different from Group’s presentation currency. Own shares of the Company acquired by the Group are recorded at cost as a negative amount as a separate component of equity. Retained earnings/Accumulated deficit consist of accumulated profit or uncovered loss from previous years and the profit/loss for the period. Dividends are recognised as liabilities in the period in which they were approved. Non-controlling interest Non-controlling interest is measured: • based on the share on the acquired net identifiable assets; and • subsequently increased/decreased by non-controlling interest’s share of profit, dividends paid, share in other comprehensive income and effects of changes in ownership. 3.5.11 INTEREST-BEARING BANK CREDITS AND LOANS At initial recognition, all bank credits and loans are recorded at their fair value, which corresponds to the received cash funds, less the costs of obtaining the credit or loan. After their initial recognition, interest bearing credits and loans are stated at amortised cost by applying the effective interest rate method. Amortised cost is determined by taking into account the costs of obtaining the credit or loan, as well as discounts and bonuses received or settlement fees charged at the settlement of the liability. 3.5.12 TRADE LIABILITIES AND OTHER LIABILITIES Financial liabilities constitute a current obligation arising out of past events, the fulfilment of which is expected to result in an outflow of cash or other financial assets. Financial liabilities other than financial liabilities stated at fair value through profit or loss are measured at amortised cost (i.e. discounted using the effective interest rate). Exchange rate differences resulting from the balance sheet remeasurement of trade payables are recognised in cost of sales. Non-financial current liabilities are measured at amounts due. 3.5.13 PROVISIONS AND CONTINGENT LIABILITIES Provisions are created when the Group has a present obligation (legal or constructive) arising out of past events, and when it is likely that the fulfilment of this obligation will result in an outflow of economic benefits, and when the amount of the obligation can be reliably measured. If the Group has a right to be reimbursed for the costs covered by the provision, for example based on an insurance policy, then the reimbursement is recognised as a separate asset, but only if it is virtually 3. MATERIAL ACCOUNTING POLICIES B-20 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU certain that the reimbursement will be received. The costs relating to a given provision are presented in the income statement net of any reimbursements. If the time value of money is material, the carrying amount of the provision is determined by discounting the forecasted future cash flows to their present values using a pre-tax discount rate reflecting the current market assessments of the time value of money and any risks associated with the given obligation. Subsequent increases of the provision due to unwinding of discount are presented as interest expense. Contingent liability is an obligation of sufficient uncertainty that it does not qualify for recognition as a provision, unless it is assumed in a business combination. 3.5.14 EMPLOYEE BENEFITS Pension obligations A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity or to a state pension plan. Obligations for contributions to defined contribution plans are expensed as the related service is provided. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. A defined benefit plan is a pension plan that is not a defined contribution plan. The liability recognised in respect of defined benefit pension plans represents the amount of estimated future benefit that employees have earned in the current and prior periods, net of the fair value of any plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the corresponding pension obligation. Material actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income in the period in which they arise. Past-service costs are recognised immediately in profit or loss. Termination benefits Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits at the earlier of the following dates: • when the Group can no longer withdraw the offer of those benefits; and • when the Group recognises costs for a restructuring that is within the scope of IAS 37 and the restructuring involves the payment of termination benefits. Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value. Share based payment The grant-date fair value of equity-settled share-based payment arrangements granted to employees is generally recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes of such/these conditions. The fair value of shares granted is based on the stock market share price as of the grant date that was adjusted for the expected fulfilment of non-vesting conditions and market conditions, expected dividend payments and shares restrictions. In terms of non-vesting conditions, it is expected that all participants will fulfil the set administrative tasks and also period of holding the shares after their acquisition. In terms of Pair shares, new share based payment program participants are expected to utilize the annual gross salary limit in 75%. Participants from the previous share based payment program that are also participants in this share based payment program are expected to utilize the annual gross salary limit in 100%. Market condition is represented mainly by the expected share price on Prague Stock Exchange. The projection of the share price was determined using the Monte Carlo simulation that is based on historical data (starting from June 2018) from which the 3. MATERIAL ACCOUNTING POLICIES B-21 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU average growth rate as well as standard deviation are determined. These, together with the random input from normal distribution, serve as a base for the projection of share price development in particular future months. Expected dividends were for the purpose of valuation determined in line with the historical resolutions. And due to existing time limitations on sale, the fair value was decreased by approximately 15% which is a discount rate reflecting the overall market restriction discounts, Group’s market capitalization, industry and shares holding period. Share based payment Plan 2021 - 2026 In the year 2021, the Group introduced a new program for long-term remuneration of senior managers of the Group. By entering into agreement on participation in the Program, the participants are entitled to acquire Kofola shares free of charge, subject the fulfilment of set conditions. The new Share based payment Plan is based on the ended Share based payment Plan for years 2017 - 2019 and enhances the dependence of the eligibility to Kofola shares on the Group results. The new Share based payment Plan has been approved for the period to 31 December 2026. The Plan consists of two separate, though complementary plans: 1) Share Acquisition Plan granting the participants the opportunity to buy Kofola shares on the market (Investment Shares) and to acquire the corresponding number of Kofola Pair Shares free of charge under defined conditions. The maximal number of eligible Investment Shares cannot exceed the specified limit corresponding to the number of shares which can be purchased on the regulated market for 40% of the basic annual gross salary/remuneration the participant is entitled to under contract(s) concluded with Kofola Group companies in the corresponding calendar year (i. e. from January 1, 2021 to December 31, 2021, from January 1, 2022 to December 31, 2022, from January 1, 2023 to December 31, 2023, from January 1, 2024 to December 31, 2024, from January 1, 2025 to December 31, 2025 and from January 1, 2026 to December 31, 2026). The calculation of the Limit of Investment Shares is based on the average price of Kofola shares on the regulated market. Under the Share Acquisition Plan, there are two vesting periods (2021 – 2023 and 2021 – 2026). To be eligible for the acquisition of Pair Shares, they must be employed with any of Kofola Group companies or be a member of any of Kofola Group companies’ bodies throughout the entire vesting period, and at the same time, Kofola Group Equity Value (EBITDA multiple decreased by the Net debt) must not be lower than in the previous calendar year. Provided that the set conditions are met, pair shares will be transferred to the participants gradually up until 2029. The participant must hold the Investment Shares for a set minimum period (two years following the end of the calendar year that served as reference for the yearly limit). Participants are obliged to hold the Pair Shares at least until 31 January of the calendar year following the calendar year in which they were transferred to the participant. 2) Performance Shares Plan providing the participant the opportunity to acquire a predetermined amount of Kofola shares (Performance Shares) free of charge provided that Kofola Group has met performance targets. The period relevant for the Performance Shares Plan starts on 1 January 2021 and terminates on 31 December 2026. The total amount of Performance Shares to be distributed among the participants is composed of two parts. The first part depends on the price of Kofola shares as of 31 December 2026 and the related market capitalization on the regulated market; the second part depends on the Equity Value of Kofola Group as of the last day of the relevant period. To be eligible for the acquisition of Performance Shares, the participant must be employed with any of Kofola Group companies or to be a member of any of Kofola Group companies’ bodies from the start of the participant’s participation in the Plan to the end of the relevant period provided that they participated in the Program for at least three years (with an exception set in the conditions of the Plan) and must hold Kofola shares of the set minimal value equal to the yearly basic gross wage/remuneration (or the double of yearly basic gross wage/remuneration) of the participant in the last complete calendar year the participant complied with the condition of employment or membership in any of Kofola Group companies and their bodies. Performance Shares will be transferred to participants eligible under the conditions of the Plan by 31 May 2027. Participants are obliged to hold 50% of the Performance Shares at least until 31 January 2028. 3.5.15 PERFORMANCE OBLIGATIONS AND REVENUE RECOGNITION POLICIES Revenue is recognised at the amount of the transaction price (which excludes estimates of variable consideration), and when the amount of revenue can be measured reliably. Revenue is measured excluding value added tax (VAT), excise tax and rebates (discounts, bonuses and other price reductions, i.e. possible price reductions assumed by the management). The amount of revenue is measured at the fair value of the consideration received or receivable. Revenue is stated at net present value when the effect of the time value of money is material (in case of payment after 360 days, such transactions contain a significant financing component). If revenue is measured at discounted amount, the discount is recognised using the effective interest method as an increase in receivables, and as financial income in profit or loss. 3. MATERIAL ACCOUNTING POLICIES B-22 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU Foreign exchange rate differences resulting from the realisation or the remeasurement of trade receivables are recognised in profit or loss. Revenue is also recognised in accordance with the criteria specified below. Recognition, measurement, presentation or disclosure of Group's revenue doesn't bear any significant judgements or assumptions. Group's transactions are rather clear. Sale of goods and products Revenue is recognised when the performance obligation is satisfied and control passes to the customer, and when the amount of revenue may be measured reliably. The amount of revenue recognised is adjusted for expected discounts, bonuses and other price reductions which are determined based on actual deliveries for the year and the contracted terms. Provision of services Revenue from the provision of services (mainly transportation services) is recognised when the service was performed with reference to the percentage of completion of the service obligation. Franchise fees are recognized on monthly basis based on contracts with franchisants. Variable part of revenue is recognized to extend to which it is probable that the franchisant will meet the contracted turnover. Interest Interest income is recognised gradually using the effective interest method. 3.5.16 GOVERNMENT GRANTS The Group recognises government grants once there is a reasonable assurance that the subsidy will be received and that all of the related conditions will be complied with. Both of the above criteria must be met for a government subsidy to be recognised. The Group may be entitled to claim special tax deductions for investments in qualifying assets or in relation to qualifying expenditure. The Group accounts for such allowances as tax credits, reducing the income tax payable and current tax expense. A deferred tax asset is recognised for unclaimed tax credits. 3.5.17 INCOME TAX The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted as at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. Liabilities are recorded for income tax positions that are determined by management as more likely than not to result in additional taxes being levied if the positions were to be challenged by tax authorities. Deferred income tax is recognised, using the balance sheet liability method, on tax loss carry forwards and temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted at the balance sheet date and are expected to apply when the temporary differences will reverse or the tax loss carry forwards will be utilised. Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred income tax is provided on temporary differences arising on investments in subsidiaries, joint ventures and equity accounted investees, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. 3. MATERIAL ACCOUNTING POLICIES B-23 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. 3.5.18 SEGMENT REPORTING Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. Segment revenue, expenses and assets are measured in the same way as in the consolidated financial statements. 3.5.19 EARNINGS PER SHARE Basic earnings per share are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year excluding ordinary shares purchased by the Company and held as treasury shares. The diluted earnings per share ratio is calculated by dividing the profit/(loss) for the period attributable to ordinary shareholders (after deducting the interest on redeemable preferred shares convertible to ordinary shares) by the weighted average number of ordinary shares outstanding during the period (adjusted by the effect of diluting options and own shares not subject to dividends). 3.6. NEW AND AMENDED STANDARDS ADOPTED BY THE GROUP The following standards, amendments and interpretations applied for the first time in 2023. IFRS 17 Insurance Contracts There is not any material impact on the Group’s financial statements. Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2 There is not any material impact on the Group’s financial statements. Definition of Accounting Estimates – Amendments to IAS 8 There is not any material impact on the Group’s financial statements. Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12 There is not any material impact on the Group’s financial statements. International Tax Reform – Pillar Two Model Rules – Amendments to IAS 12 There is not any material impact on the Group’s financial statements. 3. MATERIAL ACCOUNTING POLICIES B-24 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU 3.7. SIGNIFICANT ESTIMATES AND KEY MANAGEMENT JUDGEMENTS Since some of the information contained in the consolidated financial statements cannot be measured precisely, the Group´s management must perform estimates to prepare the consolidated financial statements. Management verifies the estimates based on changes in the factors considered at their calculation, new information or past experience. For this reason, the estimates made as at 31 December 2023 may be changed in the future. The main estimates pertain to the following matters: Estimates Type of information Section Impairment of CGU, goodwill and individual tangible and intangible assets Key assumptions used to determine the recoverable amount: Impairment indicators, used models, discount rates, growth rates. 4.10.1, 4.11.1 Useful life of trademarks The history of the trademark on the market, market position, useful life of similar products, the stability of the market segment, competition. 3.5.4, 4.11 Deferred tax asset from tax losses Historical experience, current and forward-looking information available to the management. 4.8 Income tax Assumptions used to recognise deferred income tax assets (other than Deferred tax asset from tax losses). 4.8 Impairment of receivables Historical experience, credit assessment, current and forward-looking information available to the management. 4.14 Share based payment Key assumptions used to determine the share based payment reserve: Expected EBITDA and Net debt as of 31-12-26. 4.21 3.8. STANDARDS ISSUED BUT NOT YET EFFECTIVE The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. Forthcoming requirements Non-current Liabilities with Covenants – Amendments to IAS 1 There is not expected any material impact on the Group’s financial statements. Classification of Liabilities as Current or Non-current – Amendments to IAS 1 There is not expected any material impact on the Group’s financial statements. Lease Liability in a Sale and Leaseback – Amendments to IFRS 16 There is not expected any material impact on the Group’s financial statements. Supplier Finance Arrangements – Amendments to IAS 7 and IFRS 7 There is not expected any material impact on the Group’s financial statements. Lack of Exchangeability – Amendments to IAS 21 There is not expected any material impact on the Group’s financial statements. 3.9. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS The Board of Directors approved the present consolidated financial statements for publication on 11 April 2024. 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS B-25 Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU 4. NOTES TO THE CO NSOLIDATED F INANCIAL STATEME NTS 4.1. SEGMENT INFORMATION The Board of Directors of Kofola ČeskoSlovensko a.s. is the chief operating decision maker (“CODM”) responsible for operational decision-making and uses segment results to decide on the allocation of resources to the segments and to assess segments’ performance. Three main business segments are presented within these financial statements. These are: o CzechoSlovakia, o Adriatic, o Fresh & Herbs. Division of particular Group companies between the segments is outlined in the section 2.2. Furthermore, CODM monitors revenue, but not a profit measure, from the following product lines: o Carbonated beverages, o Non-carbonated beverages (incl. UGO fresh bottles), o Waters, o Syrups, o Fresh bars & Salads, o Other (e.g. energy drinks, isotonic drinks, tea, coffee, transportation and other services). In compliance with the relevant requirements of IFRS 8 Operating Segments, the management presents also the distribution of revenues and non-current assets (other than financial instruments and deferred tax assets) distributed into geographical areas. The Group applies the same accounting methods to all segments. These policies are also in line with the accounting methods used in the preparation of these consolidated financial statements. Transactions between segments are eliminated in the consolidation process. The Group did not identify any customer in the year ended 31 December 2023 and in the comparative year ended 31 December 2022 that generated more than 10% of the Group’s consolidated revenue. 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-26 Business segments 1.1.2023 – 31.12.2023 CzechoSlovakia Adriatic Fresh & Herbs Subtotal Consolidation adjustments Total CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Revenue 6,314,707 1,514,892 1,026,918 8,856,517 (166,414) 8,690,103 External revenue – excl. services 6,188,291 1,496,594 944,836 8,629,721 - 8,629,721 External revenue – services 21,073 16,502 22,807 60,382 - 60,382 Inter-segment revenue 105,343 1,796 59,275 166,414 (166,414) - Operating expenses (5,689,640) (1,397,110) (1,022,564) (8,109,314) 166,414 (7,942,900) Related to external revenue (5,584,297) (1,395,314) (963,289) (7,942,900) - (7,942,900) Related to inter-segment revenue (105,343) (1,796) (59,275) (166,414) 166,414 - Operating profit/(loss) 625,067 117,782 4,354 747,203 - 747,203 Finance income/(costs), net (229,646) 12,718 (32,159) (249,087) (12,189) (261,276) - within segment (254,413) (1,971) (4,892) (261,276) - (261,276) - inter-segment 24,767 14,689 (27,267) 12,189 (12,189) - Share of profit/(loss) of equity accounted investees (3,985) - - (3,985) - (3,985) Profit/(loss) before income tax 391,436 130,500 (27,805) 494,131 (12,189) 481,942 Income tax (expense)/benefit (128,368) (29,820) 45,223 (112,965) - (112,965) Profit/(loss) for the period 263,068 100,680 17,418 381,166 (12,189) 368,977 EBITDA 933,855 204,375 149,394 1,287,624 - 1,287,624 One-offs (4.26) 4,146 347 (38,713) (34,220) - (34,220) Adjusted EBITDA (4.26) 938,001 204,722 110,681 1,253,404 - 1,253,404 * EBITDA refers to operating profit/(loss) plus depreciation and amortisation. Other segment information (1.1.2023 – 31.12.2023) CzechoSlovakia Adriatic Fresh & Herbs Subtotal Consolidation adjustments Total CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Additions to PPE and Intangible assets 343,658 94,877 79,921 518,456 - 518,456 Depreciation and amortisation 308,788 86,593 145,040 540,421 - 540,421 Other Impairment losses 22,698 3,961 6,967 33,626 - 33,626 Other Impairment losses reversals (5,769) (7,850) (87,488) (101,107) - (101,107) Provisions - Increase due to creation 162,774 10,971 26,295 200,040 - 200,040 Provisions - Decrease due to usage/release (78,942) (6,674) (15,578) (101,194) - (101,194) * excluding acquisitions, including lease additions 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-27 1.1.2022 – 31.12.2022 CzechoSlovakia Adriatic Fresh & Herbs Subtotal Consolidation adjustments Total CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Revenue 5,735,854 1,413,483 876,848 8,026,185 (150,901) 7,875,284 External revenue – excl. services 5,618,207 1,391,070 802,108 7,811,385 - 7,811,385 External revenue – services 22,974 19,215 21,710 63,899 - 63,899 Inter-segment revenue 94,673 3,198 53,030 150,901 (150,901) - Operating expenses (5,206,733) (1,338,555) (998,257) (7,543,545) 150,901 (7,392,644) Related to external revenue (5,112,060) (1,335,357) (945,227) (7,392,644) - (7,392,644) Related to inter-segment revenue (94,673) (3,198) (53,030) (150,901) 150,901 - Operating profit/(loss) 529,121 74,928 (121,409) 482,640 - 482,640 Finance income/(costs), net (23,786) 5,696 (30,713) (48,803) (33,993) (82,796) - within segment (77,176) (2,541) (3,079) (82,796) - (82,796) - inter-segment 53,390 8,237 (27,634) 33,993 (33,993) - Profit/(loss) before income tax 505,335 80,624 (152,122) 433,837 (33,993) 399,844 Income tax (expense)/benefit (114,576) (26,146) 4,797 (135,925) - (135,925) Profit/(loss) for the period 390,759 54,478 (147,325) 297,912 (33,993) 263,919 EBITDA 865,910 177,975 24,851 1,068,736 - 1,068,736 One-offs (4.26) 9,234 3,789 28,672 41,695 - 41,695 Adjusted EBITDA (4.26) 875,144 181,764 53,523 1,110,431 - 1,110,431 * EBITDA refers to operating profit/(loss) plus depreciation and amortisation. Other segment information (1.1.2022 – 31.12.2022) CzechoSlovakia Adriatic Fresh & Herbs Subtotal Consolidation adjustments Total CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Additions to PPE and Intangible assets 344,300 86,113 79,952 510,365 - 510,365 Depreciation and amortisation 336,789 103,047 146,260 586,096 - 586,096 Other Impairment losses 8,047 6,441 44,685 59,173 - 59,173 Other Impairment losses reversals (29,654) (4,730) (18,346) (52,730) - (52,730) Provisions - Increase due to creation 79,762 5,305 16,111 101,178 - 101,178 Provisions - Decrease due to usage/release (72,831) (14,976) (10,556) (98,363) - (98,363) * excluding acquisitions, including lease additions 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-28 Product lines 1.1.2023 - 31.12.2023 Carbonated beverages Non-carbonated beverages Waters Syrups Fresh bars & Salads Other Total CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Revenue 3,396,722 707,391 2,831,107 543,569 481,633 729,681 8,690,103 External revenue – excl. services 3,396,722 707,391 2,831,107 543,569 464,648 686,284 8,629,721 External revenue – services - - - - 16,985 43,397 60,382 1.1.2022 - 31.12.2022 Carbonated beverages Non-carbonated beverages Waters Syrups Fresh bars & Salads Other Total CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Revenue 2,962,643 682,641 2,639,373 513,973 394,108 682,546 7,875,284 External revenue – excl. services 2,962,643 682,641 2,639,373 513,973 379,100 633,655 7,811,385 External revenue – services - - - - 15,008 48,891 63,899 Information about geographical areas – revenue per end customer 1.1.2023 - 31.12.2023 Czech Republic Slovakia Slovenia Croatia Poland Other Total CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Revenue 4,897,617 2,103,454 960,316 426,721 109,253 192,742 8,690,103 External revenue – excl. services 4,871,898 2,095,336 943,837 426,697 107,553 184,400 8,629,721 External revenue – services 25,719 8,118 16,479 24 1,700 8,342 60,382 1.1.2022 - 31.12.2022 Czech Republic Slovakia Slovenia Croatia Poland Other Total CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Revenue 4,430,881 1,869,935 878,221 417,031 88,079 191,137 7,875,284 External revenue – excl. services 4,409,419 1,857,687 859,036 417,000 87,004 181,239 7,811,385 External revenue – services 21,462 12,248 19,185 31 1,075 9,898 63,899 Non-current assets (excluding financial assets and deferred tax assets) Czech Republic Slovakia Slovenia Croatia Poland Other Total CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 31.12.2023 3,265,930 964,244 578,123 149,067 44,283 - 5,001,647 31.12.2022 3,215,921 952,955 566,175 129,363 138,810 - 5,003,224 SEASONAL AND CYCLICAL NATURE OF THE OPERATIONS Seasonality Seasonality is associated with periodic deviations in demand and supply and has certain effect on Group’s general sales trends. Beverage sales peak appears in the 2nd and 3rd quarter of the year. This is caused by increased drink consumption in the spring and summer months. In the year ended 31 December 2023, about 19.7% (19.1% in 2022) of revenue was earned in the 1st quarter, with 26.9% (28.1% in 2022), 29.5% (29.8% in 2022) and 23.8% (23.0% in 2022) of the annual consolidated revenue earned in the 2nd, 3rd and 4th quarters, respectively. Cyclical nature The Group's results are to certain extent dependent on economic cycles, in particular on fluctuations in demand and in the prices of raw materials. 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-29 4.2. REVENUE Table Revenue streams, Timing of revenue recognition 2023 2022 CZK´000 CZK´000 Revenue from contracts with customers - Sales of finished products/goods/materials (transferred at a point in time) 8,629,721 7,811,385 - Sales of transportation services (transferred over time) 11,186 14,245 - Franchise licences (transferred over time) 16,969 15,007 - Sales of other services (transferred over time) 32,227 34,647 Total revenue 8,690,103 7,875,284 Revenue from contracts with customers is represented by finished products, goods and materials sold and is recognized at a point of time. For further allocation between particular segments refer to section 4.1. Changes of loss allowances on receivables arising from contracts with customers are presented in section 4.14. Group doesn’t have any material contract assets, contract liabilities or performance obligations satisfied (or partially satisfied) in previous periods. 4.3. EXPENSES BY NATURE Table Expenses by nature 2023 2022 CZK´000 CZK´000 Depreciation of Property, plant and equipment and amortisation of Intangible assets 540,421 586,096 Employee benefits expenses (i) 1,817,851 1,509,911 Consumption of materials and energy, cost of goods and materials sold 3,892,998 3,792,347 Services 1,528,977 1,373,224 Rental costs 98,431 94,318 Taxes and fees 72,910 80,951 Insurance costs 17,183 18,040 Inventory write-down/(back) 7,854 797 Change in allowance to receivables 12,802 (12,366) Change in finished products and work in progress 4,146 (80,202) Other costs 9,942 5,695 Total expenses by nature 8,003,515 7,368,811 Depreciation recognized in Other operating expenses (6,047) (8,311) Reconciliation of expenses by nature to expenses by function 7,997,468 7,360,500 Cost of sales 4,802,651 4,564,018 Selling, marketing and distribution costs 2,487,765 2,329,973 Administrative costs 707,052 466,509 Total costs of products and services sold, merchandise and materials, sales costs and administrative costs 7,997,468 7,360,500 * Excluding Other operating expenses (except for depreciation) and Impairment. Depreciation decreased due to end of useful life of several assets during 2022. Employee benefits expenses increased mainly due to revaluation of the share based payment reserve (mainly due to increase of expected Equity Value (EBITDA multiple decreased by the Net debt) as of 31-12-26), but also due to higher wages and employee bonuses which were influenced by positive results. Direct material costs, costs of goods sold, energy costs and services increased less than revenue due to savings in energy, there is also a positive sales mix and decreasing sugar consumption. Higher services were driven mainly by higher revenue but there were also more expenses on marketing in 2023. Change in finished products and work in progress in 2022 resulted from higher production at the end of prior year in comparison to 2021. Change in allowance to receivables is represented mainly by specific allowances created to customers with business difficulties. In 2023, the Group carried out research and development activities and incurred costs of CZK 6,573 thousand (2022: CZK 5,593 thousand). 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-30 (i) Employee benefits expenses Employee benefits expenses 2023 2022 CZK´000 CZK´000 Salaries 1,224,152 1,121,657 Share based payment 158,512 (1,508) Social security and other benefit costs (including healthcare insurance) 216,196 183,912 Pension benefit plan expenses 218,991 205,850 Total employee benefits expenses 1,817,851 1,509,911 4.4. OTHER OPERATING INCOME Table Other operating income 2023 2022 CZK´000 CZK´000 Net gain from the sale of PPE and Intangible assets 10,617 8,099 Gain on sale of Grodzisk Wielkopolski plant 29,883 - Release of impairment of Property, plant and equipment - 993 Reinvoiced payments 4,227 2,920 Subsidies, grants and government support 19,055 6,613 Rent discounts - 973 Compensation claims 4,555 3,591 Penalties and compensation for damages 11,023 11,755 Other tax income 1,053 1,718 Write-off of advances received for the returnable packages - 5,440 Liabilities write-off 43 420 Other 9,461 5,336 Total other operating income 89,917 47,858 * Subsidies are, in accordance with IAS 20, presented as other operating income. There are no unfulfilled conditions in relation to these subsidies. In 2023, the Subsidies, grants and government support contain mainly the compensation for high energy prices. In 2023, the Group has sold the Grodzisk Wielkopolski plant which resulted in the gain on sale of CZK 29,883 thousand. 4.5. OTHER OPERATING EXPENSES Table Other operating expenses 2023 2022 CZK´000 CZK´000 Net loss from disposal of PPE and Intangible assets - 5,014 Net costs connected with inactive plant in Poland 3,359 4,568 Impairment of PPE - 33,124 Provided donations, sponsorship 8,258 8,542 Penalties and damages 6,048 1,733 Advisory services 5,782 6,843 Restructuring costs 2,328 7,006 Support to parties impacted by war in Ukraine - 1,431 Other tax expense 2,276 2,795 Litigations - 1,248 Other 7,298 7,698 Total other operating expenses 35,349 80,002 * Mainly depreciation expense, property taxes, consumption of energy, net of rental income. ** Mainly payroll expenses. Impairment of Property, plant and equipment in 2022 resulted mainly from the decrease of the expected value of the closed Grodzisk Wielkopolski plant (determined as fair value less costs of disposal). 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-31 4.6. FINANCE INCOME Table Finance income 2023 2022 CZK´000 CZK´000 Interest from: – bank deposits 97 47 – other 114 - Exchange gains 14,118 15,431 Realized derivatives (new derivatives in EUR) 19,752 - Realized derivatives (original derivatives in CZK) - 16,116 Gain on derivatives termination (original derivatives in CZK) - 126,622 Other 175 66 Total finance income 34,256 158,282 With the amendment on bank loans in June 2022, also new IRS contracts were concluded (only in relation to EUR part of the loan) with interest 2.149% p.a. + margin. At the same time, the existing IRS were terminated and sold with realized gain of CZK 126,622 thousand. 4.7. FINANCE COSTS Table Finance costs 2023 2022 CZK´000 CZK´000 Interest from: – bank loans and credits 229,406 197,811 – lease 13,591 12,046 – other 149 163 Exchange losses 38,931 5,534 Bank costs and charges 12,631 10,355 Realized derivatives (new derivatives in EUR) - 14,897 Other 824 272 Total finance costs 295,532 241,078 Increased interest expense from bank loans and credits is caused by drawings of CAPEX tranche and higher interest rates. FX losses arose mainly from Group’s EUR part of bank credits and loans. 4.8. INCOME TAX 4.8.1 INCOME TAX RECOGNISED IN PROFIT OR LOSS Main income tax elements for the twelve-month period ended 31 December 2023 and 31 December 2022 were as follows: Income tax 2023 2022 CZK´000 CZK´000 Current income tax expense/(benefit) 178,728 92,304 Current income tax on profits for the year 177,894 92,173 Adjustments for current income tax of prior periods 834 131 Deferred income tax expense/(benefit) (65,763) 43,621 Related to arising and reversing of temporary differences other than tax losses (59,583) 13,071 Related to tax losses (6,180) 30,550 Income tax expense/(benefit) 112,965 135,925 * Deferred tax recognized in the profit or loss statement doesn’t reconcile to the difference between the values recognized in the statement of financial position which is caused mainly by the foreign exchange differences arising on consolidation of foreign subsidiaries. The income tax rate applicable to the majority of the Group’s 2023 and 2022 income is 19%. Since 1 January 2024, the tax rate applicable in the Czech Republic is 21%. Current income tax expense increased as a result of higher taxable profits. Deferred income tax benefit is resulting mainly from the recognition od deferred tax asset from share based payment and from tax losses in UGO trade which has positive business results. 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-32 4.8.2 INCOME TAX RECOGNISED DIRECTLY IN EQUITY Income tax elements for the twelve-month period ended 31 December 2023 and 31 December 2022 were as follows: Movement of income tax recognised directly in equity 2023 2022 CZK´000 CZK´000 Deferred income tax (13,906) (1,207) Tax from Cash flow hedges (13,906) (1,207) Movement of income tax recognised directly in equity (13,906) (1,207) Change in tax from Cash flow hedges in 2023 results from downward revaluation due to decrease of expected future interest rates. 4.8.3 EFFECTIVE TAX RECONCILIATION Table Effective tax 2023 2022 CZK´000 CZK´000 Profit/(loss) before income tax 481,942 399,844 Tax at the rate of 19% valid in the Czech Republic (91,569) (75,970) Tax effect of: Non-deductible expenses (48,055) (51,269) Non-recognition of deferred tax assets (18,080) (24,619) Investment incentives 2,026 2,434 Non-taxable income 3,724 7,956 Current tax of prior periods 4,484 (703) Deferred tax adjustments relating to prior periods 3,577 1,297 Previously unrecognized deferred tax asset/liability 47,696 9,494 Difference in tax rates of subsidiaries operating in other jurisdictions (3,822) (4,545) Change in the tax rate (12,189) - Share of results of equity accounted investees (757) - Income tax expense (112,965) (135,925) Effective tax rate 23.4% 34.0% The deferred tax asset was not recognized on tax losses for which the utilisation in future periods was not probable according to the tax planning of the particular Group companies. 4.8.4 DEFERRED TAX ASSETS AND LIABILITIES Table 31.12.2023 Deferred tax assets and liabilities Deferred tax assets Deferred tax liabilities Net amount CZK´000 CZK´000 CZK´000 Temporary differences attributable to: Property, plant and equipment and Intangible assets - (343,407) (343,407) Inventories 3,149 - 3,149 Receivables 5,331 - 5,331 Tax losses 17,166 - 17,166 Trade and other liabilities and provisions 54,373 - 54,373 Deferred tax from Cash flow hedges - (2,376) (2,376) Share based payment 39,907 - 39,907 Deferred tax assets/(liabilities) 119,926 (345,783) (225,857) Presentation offsetting (81,319) 81,319 - Deferred tax assets/(liabilities) 38,607 (264,464) (225,857) 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-33 31.12.2022 Deferred tax assets and liabilities Deferred tax assets Deferred tax liabilities Net amount CZK´000 CZK´000 CZK´000 Temporary differences attributable to: Property, plant and equipment and Intangible assets - (332,397) (332,397) Inventories 1,876 - 1,876 Receivables 3,088 - 3,088 Tax losses 11,036 - 11,036 Trade and other liabilities and provisions 25,427 - 25,427 Deferred tax from Cash flow hedges - (16,282) (16,282) Share based payment 3,412 - 3,412 Deferred tax assets/(liabilities) 44,839 (348,679) (303,840) Presentation offsetting (44,839) 44,839 - Deferred tax assets/(liabilities) - (303,840) (303,840) Based on management assessment and tax projections, the Group didn’t recognize as of 31 December 2023 the deferred tax asset of CZK 89,955 thousand (as of 31 December 2022: CZK 113,814 thousand) that arose from tax losses. Tax losses can be utilized up to 2028. The deferred tax asset from tax losses was not recognized in those cases when the particular entity has no sufficient taxable temporary differences or there is not convincing other evidence that sufficient taxable profit will be available against which the unused tax losses or unused tax credits can be utilised. 4.9. EARNINGS PER SHARE The basic earnings per share ratio is calculated by dividing the profit/(loss) for the period attributable to owners of Kofola ČeskoSlovensko a.s. by the weighted average number of ordinary shares outstanding during the period. The diluted earnings per share ratio is calculated by dividing the profit/(loss) for the period attributable to ordinary shareholders (after deducting the interest on redeemable preferred shares convertible to ordinary shares) by the weighted average number of ordinary shares outstanding during the period (adjusted by the effect of diluting options and own shares not subject to dividends). The diluted earnings per share ratio is not applicable to the Group because it didn’t issue any of above-mentioned financial instruments. Information used to calculate basic earnings per share is presented below: Weighted average number of ordinary shares 2023 2022 Pcs Pcs Total number of ordinary shares issued by the Company 22,291,948 22,291,948 Effect of own shares in possession of the Company - (124) Weighted average number of ordinary shares used to calculate basic earnings per share 22,291,948 22,291,824 Based on the above information, the basic earnings per share amounts to: Basic earnings per share 2023 2022 Profit/(loss) for the period attributable to owners of Kofola ČeskoSlovensko a.s. (CZK´000) 365,397 269,150 Weighted average number of ordinary shares used to calculate basic earnings per share (pcs) 22,291,948 22,291,824 Basic earnings per share attributable to owners of Kofola ČeskoSlovensko a.s. (CZK/share) 16.39 12.07 4.10. PROPERTY, PLANT AND EQUIPMENT The additions (including acquisition) to Property, plant and equipment were of CZK 531,505 thousand in the year ended 31 December 2023. The most significant additions realized by the Group in 2023 were represented by investments into the production machinery, and buildings and constructions. In 2023, Group has sold the closed Grodzisk Wielkopolski plant and realized gain on sale of CZK 29,883 thousand. The additions to Property, plant and equipment were of CZK 495,177 thousand in the year ended 31 December 2022. 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-34 The most significant additions realized by the Group in 2022 were represented by investments into the production machinery, buildings and constructions and returnable packages. Impairment in 2022 is resulting mainly from the decrease of the expected value of the closed Grodzisk Wielkopolski plant (determined as fair value less costs of disposal). 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-35 Table Movements in Property, plant and equipment (PPE) Land Buildings and constructions Plant and equipment Vehicles Leasehold improvement Returnable packages Other non-current assets Non-current assets under construction, Advances Total 1.1.2023 - 31.12.2023 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Cost - opening 268,515 2,860,202 4,683,360 486,252 94,560 731,642 4,347 123,732 9,252,610 Acquisition of subsidiary 4,913 67,263 1,079 - - - - - 73,255 Additions 1,059 22,343 199,715 11,456 1,885 34,430 610 103,298 374,796 Transfers from non-current assets under construction - 4,397 39,735 - 697 1,902 - (46,731) - Lease additions 2,255 50,661 6,913 35,774 - - - - 95,603 Other increases - - 635 - - 1,603 - - 2,238 Sale (13,863) (284,555) (73,025) (12,702) - (1,917) (87) - (386,149) Disposal - (9,858) (122,489) (18,544) (668) (31,858) (120) - (183,537) Exchange differences 5,553 39,354 79,095 4,895 (116) 9,459 197 1,539 139,976 Cost - closing 268,432 2,749,807 4,815,018 507,131 96,358 745,261 4,947 181,838 9,368,792 Accumulated depreciation - opening (3,835) (1,234,329) (3,803,954) (344,850) (58,274) (605,961) (3,815) - (6,055,018) Acquisition of subsidiary - (11,176) (972) - - - - - (12,148) Depreciation charge (1,193) (135,447) (232,627) (53,393) (9,731) (39,428) (205) - (472,024) Sale - 150,170 65,914 12,356 - 1,693 87 - 230,220 Disposal - 7,503 121,438 18,180 667 29,961 120 - 177,869 Exchange differences (26) (24,764) (62,757) (2,180) 51 (7,130) (179) - (96,985) Accumulated depreciation - closing (5,054) (1,248,043) (3,912,958) (369,887) (67,287) (620,865) (3,992) - (6,228,086) Impairment allowance - opening - (68,336) (30,772) - - (7) - - (99,115) Sale - 70,244 854 - - - - - 71,098 Release - 4,999 3,045 - - 7 - - 8,051 Exchange differences - (6,907) (571) - - - - - (7,478) Impairment allowance - closing - - (27,444) - - - - - (27,444) Net book value - opening 264,680 1,557,537 848,634 141,402 36,286 125,674 532 123,732 3,098,477 Net book value - closing 263,378 1,501,764 874,616 137,244 29,071 124,396 955 181,838 3,113,262 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-36 Table Movements in Property, plant and equipment (PPE) Land Buildings and constructions Plant and equipment Vehicles Leasehold improvement Returnable packages Other non-current assets Non-current assets under construction, Advances Total 1.1.2022 - 31.12.2022 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Cost - opening 266,015 2,837,411 4,569,562 508,972 93,608 701,235 4,230 119,122 9,100,155 Additions 6,147 17,402 266,176 4,848 1,298 65,380 50 41,188 402,489 Transfers from non-current assets under construction - 9,797 27,084 - 10 2,841 - (39,732) - Lease additions 6,019 47,234 12,418 27,017 - - - - 92,688 Other increases - - 116 - - 985 - - 1,101 Sale (1,342) - (32,460) (42,008) - (4,028) - - (79,838) Disposal - (10,589) (72,963) (6,500) (355) (21,889) - - (112,296) Other decreases (2,548) - (42) (952) - (65) - - (3,607) Exchange differences (5,776) (41,053) (86,531) (5,125) (1) (12,817) 67 3,154 (148,082) Cost - closing 268,515 2,860,202 4,683,360 486,252 94,560 731,642 4,347 123,732 9,252,610 Accumulated depreciation - opening (3,393) (1,128,551) (3,710,126) (318,813) (48,554) (591,643) (3,664) - (5,804,744) Depreciation charge (1,418) (133,627) (267,657) (55,561) (10,074) (47,999) (281) - (516,617) Sale - - 32,411 20,342 - 3,920 - - 56,673 Disposal - 8,935 72,880 6,362 355 21,794 - - 110,326 Other movements 954 427 - 952 - (911) - - 1,422 Exchange differences 22 18,487 68,538 1,868 (1) 8,878 130 - 97,922 Accumulated depreciation - closing (3,835) (1,234,329) (3,803,954) (344,850) (58,274) (605,961) (3,815) - (6,055,018) Impairment allowance - opening - (39,739) (32,545) - - (15) - (1,693) (73,992) Impairment loss - (33,124) - - - - - - (33,124) Release - 3,539 1,662 - - 7 - 1,693 6,901 Exchange differences - 988 111 - - 1 - - 1,100 Impairment allowance - closing - (68,336) (30,772) - - (7) - - (99,115) Net book value - opening 262,622 1,669,121 826,891 190,159 45,054 109,577 566 117,429 3,221,419 Net book value - closing 264,680 1,557,537 848,634 141,402 36,286 125,674 532 123,732 3,098,477 Depreciation charge for years 2023 and 2022 is presented in the tables above. 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-37 4.10.1 IMPAIRMENT TESTING In 2023, no impairment loss was charged to the items of Property, plant and equipment. In 2022, the impairment in the amount of CZK 33,124 thousand was charged to the items of Property, plant and equipment related to the closed Grodzisk Wielkopolski plant (determined as fair value less costs of disposal based on most up to date available information). In case of Studenac d.o.o., the value of selected items of Property, plant and equipment as of 31 December 2023 were supported by the external valuation report issued in January 2024. 4.11. INTANGIBLE ASSETS Table Movements in Intangible assets (IA) 1.1.2023 - 31.12.2023 Goodwill Patents, licenses Software Trademarks and other rights IA under development, Advances Total CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Cost - opening 647,969 846 291,096 1,530,821 4,035 2,474,767 Acquisition of subsidiary 14,248 - - - - 14,248 Additions - - 27,482 1,627 18,948 48,057 Transfer from IA under development - - 3,182 629 (3,811) - Sale - - (31) - - (31) Disposal - - (7,017) (17) - (7,034) Exchange differences 102 44 1,971 13,550 1 15,668 Cost - closing 662,319 890 316,683 1,546,610 19,173 2,545,675 Accumulated amortisation - opening - (811) (259,591) (388,704) - (649,106) Amortisation charge - (36) (18,537) (57,776) - (76,349) Sale - - 31 - - 31 Disposal - - 7,017 17 - 7,034 Exchange differences - (43) (2,132) (2,996) - (5,171) Accumulated amortisation - closing - (890) (273,212) (449,459) - (723,561) Net book value - opening 647,969 35 31,505 1,142,117 4,035 1,825,661 Net book value - closing 662,319 - 43,471 1,097,151 19,173 1,822,114 Of which: Goodwill 662,318 Intangible assets 1,159,796 Amortisation of trademarks with finite useful lives is charged to Selling, marketing and distribution costs. The main trademarks are not amortized – such trademarks with indefinite useful lives are tested for impairment. The value of trademarks includes, among others: Kofola, Vinea, Radenska, Citrocola, Semtex energy drink, Erektus, UGO, Premium Rosa, Leros, Café Reserva, Prager ciders and lemonades, Ondrášovka and Korunní. In 2023, the additions (including acquisition) to intangible assets were of CZK 62,305 thousand. The most significant additions were connected with the investments to SAP. In 2022, the additions to intangible assets were of CZK 15,188 thousand. The most significant additions were connected with the investments to SAP. Amortization charge for years 2023 and 2022 is presented in the tables above. 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-38 Table Movements in Intangible assets (IA) 1.1.2022 - 31.12.2022 Goodwill Patents, licenses Software Trademarks and other rights IA under development, Advances Total CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Cost - opening 648,093 7,191 291,939 1,535,742 2,371 2,485,336 Additions - - 11,421 382 3,385 15,188 Transfer from IA under development - - 858 864 (1,722) - Sale - - (11) - - (11) Disposal - - (10,440) (213) - (10,653) Reclassification to other categories - - (250) 250 - - Other decreases - (6,314) - 6,260 - (54) Exchange differences (124) (31) (2,421) (12,464) 1 (15,039) Cost - closing 647,969 846 291,096 1,530,821 4,035 2,474,767 Accumulated amortisation - opening - (6,914) (257,645) (323,272) - (587,831) Amortisation charge - (114) (14,806) (60,467) - (75,387) Sale - - 1 - - 1 Disposal - - 10,411 213 - 10,624 Reclassification to other categories - 6,192 - (6,296) - (104) Exchange differences - 25 2,448 1,118 - 3,591 Accumulated amortisation - closing - (811) (259,591) (388,704) - (649,106) Net book value - opening 648,093 277 34,294 1,212,470 2,371 1,897,505 Net book value - closing 647,969 35 31,505 1,142,117 4,035 1,825,661 Of which: Goodwill 647,969 Intangible assets 1,177,692 4.11.1 IMPAIRMENT TESTING In the impairment testing of goodwill, management of the Group has decided to use value in use method. For the purpose of trademarks valuation, the relief-from-royalty method was used (fair value method). Due to the fact that management is not aware of comparable market transactions, the calculation of value in use for goodwill is based on discounted free cash flows and estimated cash-flow projections based on financial plans approved by management of the Group for the period until 2028. Main assumptions used in financial plans and cash-flow projections: Trademarks The main trademarks with indefinite useful life: 2023 Ondrášovka Korunní Kofola Vinea Radenska Country of trademark Czechia Czechia Czechia Slovakia Slovenia Royalty rate 4.5% 3.0% n/a 6.0% n/a Average revenue growth rate 2.9% 3.7% n/a 2.7% n/a Perpetuity growth rate 2.0% 2.0% n/a 2.0% n/a Discount rate post-tax (avg. in explicit period) 8.2% 8.2% n/a 8.0% n/a Discount rate post-tax (perpetuity) 7.6% 7.6% n/a 7.6% n/a 2022 Ondrášovka Korunní Kofola Vinea Radenska Country of trademark Czechia Czechia Czechia Slovakia Slovenia Royalty rate 4.5% 3.0% 6.0% 6.0% 6.0% Average revenue growth rate 3.3% 1.5% 4.2% 5.2% 4.0% Perpetuity growth rate 2.0% 2.0% 2.0% 2.0% 2.0% Discount rate post-tax (avg. in explicit period) 9.5% 9.5% 9.5% 9.0% 9.0% Discount rate post-tax (perpetuity) 8.3% 8.3% 8.3% 8.3% 8.3% The detailed calculations made in 2022 of the recoverable amount of the Kofola and Radenska trademarks were used for the purpose of 2023 impairment test because all of the criteria set by IAS 36, par. 24 were met. These criteria are: - the assets and liabilities making up the unit have not changed significantly since the most recent recoverable amount calculation; 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-39 - the most recent recoverable amount calculation resulted in an amount that exceeded the carrying amount of the unit by a substantial margin; and - based on an analysis of events that have occurred and circumstances that have changed since the most recent recoverable amount calculation, the likelihood that a current recoverable amount determination would be less than the current carrying amount of the unit is remote. Carrying value of all trademarks per country Czech Republic Slovakia Slovenia Poland Total CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 31 December 2023 739,742 206,676 124,494 21,188 1,092,100 31 December 2022 785,902 201,577 121,422 23,964 1,132,865 Value of trademarks decreased as a result of regular amortization. In 2023 and 2022, no impairment was charged. Impairment considerations in relation to cash-generating units In 2023, due to favourable business development, there were no impairment indicators in relation to UGO trade s.r.o. or any other CGU within the Group. In 2022, impairment indicators were identified by management only in case of UGO trade s.r.o. as remaining cash generating units within the Group were generating sufficient cash flows. UGO trade s.r.o. has three main product lines which are QSR (Quick Service Restaurants), FOOD (production of salads) and PET (UGO juices packed in bottles). These were for the purpose of impairment testing considered as separate CGUs. Results of CGUs QSR, PET and FOOD were expected to return to profitability in the projected explicit period (the next 5 years) and the total recoverable amounts determined as value in use exceeded the carrying amounts of these CGUs as of 31 December 2022. Therefore, no impairment was recognized in relation to these CGUs in 2022. The assumptions of the impairment tests were as follows: Table 2022 QSR PET FOOD WACC (avg. in explicit period) 9.1% 9.1% 9.1% WACC (perpetuity) 7.6% 7.6% 7.6% Average revenue growth rate 9.7% 9.2% 9.7% Perpetuity growth rate 2.0% 2.0% 2.0% Average EBITDA margin for 2023-2027 17.7% 8.5% 5.8% CGU carrying amount in CZK thousand 80,146 13,727 6,539 * Growth rate used for the purpose of the impairment testing from 2023 till the end of the explicit period. QSR sensitivity analysis In 2022, management believed that, in relation to value in use calculations, no reasonable change in the adopted assumptions would result in the recoverable amount being lower than the carrying amount. PET sensitivity analysis In 2022, management believed that, in relation to value in use calculations, no reasonable change in the adopted assumptions would result in the recoverable amount being lower than the carrying amount. FOOD sensitivity analysis In 2022, management believed that, in relation to value in use calculations, no reasonable change in the adopted assumptions would result in the recoverable amount being lower than the carrying amount. 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-40 Goodwill The Goodwill arose on acquisition of PINELLI spol. s r.o., Klimo s.r.o., LEROS, s.r.o., Minerálka s.r.o, Espresso s.r.o., F.H.Prager s.r.o., ONDRÁŠOVKA a.s., Karlovarská Korunní s.r.o. and FILIP REAL a.s. Goodwill on acquisition of LEROS, s.r.o. of CZK 2,865 thousand and Goodwill on acquisition of Espresso s.r.o. of CZK 12,091 thousand relate to Fresh & Herbs business segment. Goodwil on acquisition of FILIP REAL a.s. of CZK 14,248 thousand doesn’t relate to any of Group’s segments. The remaining amount of Goodwill presented in the Consolidated statement of financial position relates to the CzechoSlovakia business segment. The Goodwill is monitored by the management at the segment level. Table below summarizes the key inputs for impairment testing in relation to Goodwill attributable to CzechoSlovakia business segment. Table The assumptions of the impairment tests of Goodwill in the CzechoSlovakia business segment 2022 CZK´000/% EBITDA margin 15.5% Perpetuity growth rate 2.0% Discount rate post-tax (avg. in explicit period) 9.1% Discount rate post-tax (perpetuity) 7.6% The detailed calculation made in 2022 of the recoverable amount of the CzechoSlovakia business segment’s Goodwill was used for the purpose of 2023 impairment test because all of the criteria set by IAS 36, par. 99 were met. These criteria are: - the assets and liabilities making up the unit have not changed significantly since the most recent recoverable amount calculation; - the most recent recoverable amount calculation resulted in an amount that exceeded the carrying amount of the unit by a substantial margin; and - based on an analysis of events that have occurred and circumstances that have changed since the most recent recoverable amount calculation, the likelihood that a current recoverable amount determination would be less than the current carrying amount of the unit is remote. Main assumptions adopted by the management are based on past experience and expectations as for the future market development. Discount rates used are in line with those used when preparing the Group’s results assumptions. Discount rates are post-tax and include risk related to respective operating segments and trademarks. The Group’s management believes that the main assumptions used in impairment tests of cash generating units as at 31 December 2023 and 31 December 2022 are rational and based on the past experience, the Group’s development strategy and on market forecasts. The Group’s forecasts of future financial results are based on series of assumptions, where those relating to macroeconomic factors and actions taken by the competition, such as foreign exchange rates, prices of raw materials and interest rates are beyond the Group’s control. Sensitivity analysis Management believes that, in relation to value in use calculations for trademarks (except for Ondrášovka, as stated below) and for Goodwill monitored at segment level, no reasonable change in the adopted assumptions would result in their recoverable amounts being lower than their carrying amounts. In 2023, value in use for Ondrášovka brand was close to its carrying amount, however no impairment was charged to any brand. In 2022, value in use for Ondrášovka brand was close to its carrying amount, however no impairment was charged to any brand despite unprecedent increase in WACC rates. 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-41 4.12. INVESTMENTS IN EQUITY ACCOUNTED INVESTEES Tables below summarizes Group’s equity accounted investees. Equity accounted investees 31.12.23 CZK´000 General Plastic, a. s. 40,433 Cafe Dorado s.r.o. 34,060 Zahradní OLLA s.r.o. 1,203 Total 75,696 4.12.1 GENERAL PLASTIC, A. S. (JOINT VENTURE) On May 16, 2023, the acquisition date, the Group became a 33.33% owner of General Plastic, a. s., a Slovak producer of hot-washed PET flakes and PET preforms used for production of PET bottles. The acquisition is a logical step towards fulfilling the Group’s commitment for usage of recycled rPET and is also part of our sustainable packaging approach. General Plastic is structured as a separate vehicle and the Group has a residual interest in its net assets. The following table summarises the financial information of General Plastic as included in its own financial statements. The table summarizes the recognized amounts of assets acquired and liabilities assumed at the date of acquisition and as of the balance sheet date. The valuation of net assets was prepared on the provisional basis due to the timing of the transaction. If new information obtained within one year of the date of acquisition about facts and circumstances that existed at the date of acquisition identifies adjustments to the below amounts, or any additional provisions that existed at the date of acquisition, the accounting for the acquisition will be revised. Equity accounted investee’s assets and liabilities 31.12.2023 16.5.2023 CZK´000 CZK´000 Non-current assets 321,136 236,512 Current assets 151,834 184,785 Non-current liabilities (155,369) (118,303) Current liabilities (224,473) (214,170) Net assets (100%) 93,128 88,824 Group’s share of net assets (33.33%) 31,043 29,608 Consideration transferred n/a 38,693 Goodwill attributable to the Group n/a 9,085 Equity accounted investee’s revenue and profit/(loss) 16.5.2023 – 31.12.2023 CZK´000 Revenue 295,321 Profit/(loss) for the period (11,955) 4.12.2 CAFE DORADO S.R.O. (ASSOCIATE) The Group has acquired a 50% share in Cafe Dorado s.r.o. in June 2023 for CZK 10 thousand. It is a holding company which has acquired a 50% share in AGRITROPICAL S.A.S., a company owning Columbian coffee plantations, in December 2023. In 2023, the Group has provided capital contributions to Cafe Dorado s.r.o. amounting to CZK 34,050 thousand. Equity accounted investee’s assets and liabilities 31.12.2023 1.6.2023 CZK´000 CZK´000 Non-current assets 58,463 - Current assets 18,016 20 Current liabilities (9,429) - Net assets (100%) 67,050 20 Group’s share of net assets (50.00%) 33,525 10 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-42 4.13. INVENTORIES Table Inventories 31.12.2023 31.12.2022 CZK´000 CZK´000 Inventories not written-down 733,606 787,724 Material 392,972 426,430 Goods 97,710 97,804 Work in progress 32,407 36,338 Finished products 210,517 227,152 Inventories write-down (27,415) (21,287) Inventories total 706,191 766,437 Inventories write-down movement table 2023 2022 CZK´000 CZK´000 As at 1 January 21,287 21,184 Increase due to creation 9,583 5,423 Decrease due to usage/(write-back) (3,738) (5,047) Exchange differences 283 (273) As at 31 December 27,415 21,287 4.14. TRADE AND OTHER RECEIVABLES Table Trade receivables and other receivables 31.12.2023 31.12.2022 Current Non-current Current Non-current CZK´000 CZK´000 CZK´000 CZK´000 Financial assets within Trade receivables and other receivables Trade receivables 969,829 - 834,123 - Loss allowance for trade receivables (51,902) - (50,216) - Derivatives (i) 22,239 - 18,101 67,595 Other financial receivables 69,221 15,791 56,672 20,495 Loss allowance for other financial receivables (36,633) (1,493) (32,240) (2,384) Total 972,754 14,298 826,440 85,706 Non-financial assets within Trade receivables and other receivables VAT receivable 40,068 - 38,145 - Deferred expenses 51,457 16,012 57,641 15,600 Prepayments 56,699 50,100 74,883 63,326 Other non-financial receivables 1,439 159 1,453 160 Loss allowance for non-financial receivables (2,479) - (573) - Total 147,184 66,271 171,549 79,086 Trade receivables and other receivables total 1,119,938 80,569 997,989 164,792 * Mainly paid principals. Loss allowance for trade and other financial receivables 2023 2022 Trade receivables Other financial receivables Trade receivables Other financial receivables CZK´000 CZK´000 CZK´000 CZK´000 As at 1 January 50,216 34,624 66,127 30,643 Exchange differences 859 536 (1,226) (546) Increase due to creation 22,629 13,750 9,312 14,082 Decrease due to usage/release (21,802) (10,784) (23,997) (9,555) As at 31 December 51,902 38,126 50,216 34,624 (i) Derivatives The Group has established a hedge accounting. Revaluation of derivatives in relation to the effective portion of the hedging relationship is accounted through Other comprehensive income (refer to section 3.4.2 for more details). 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-43 With the amendment on bank loans in June 2022, also new IRS contracts were concluded (only in relation to EUR part of the loan) with interest 2.149% p.a. + margin. At the same time, the existing IRS were terminated and sold (refer to section 4.6). Trade receivables increased mainly as a result of increased sales. Derivatives balance decreased due to decrease of expected future interest rates. Further information on transactions with related parties is presented in section 4.24. Trade receivables are not interest bearing and are usually payable within 30-60 days of recognition. The risks associated with trade and other receivables, as well as the Group’s policy relating to managing such risks, are described in section 4.25. Information on liens established on receivables to secure credits and loans is presented in section 4.18. 4.15. CASH AND CASH EQUIVALENTS Table Cash and cash equivalents 31.12.2023 31.12.2022 CZK´000 CZK´000 Cash in bank and in hand 1,071,099 626,367 Other - 75 Total cash and cash equivalents 1,071,099 626,442 Free funds are held at bank and invested in the form of term and overnight deposits, primarily with variable interest rates. Split by currency 31.12.2023 31.12.2022 CZK´000 CZK´000 in CZK 370,504 218,055 in EUR 682,186 333,030 in PLN 16,464 3,503 in HRK - 63,083 other 1,945 8,771 Total cash and cash equivalents 1,071,099 626,442 4.16. EQUITY 4.16.1 SHARE CAPITAL SHARE CAPITAL STRUCTURE Share capital structure 2023 2022 Type of shares Shares Par value Shares Par value pcs CZK´000 pcs CZK´000 Ordinary shares of Kofola ČeskoSlovensko a.s. 22,291,948 1,114,597 22,291,948 1,114,597 Total 22,291,948 1,114,597 22,291,948 1,114,597 Ordinary shares of Kofola ČeskoSlovensko a.s. have a par value of CZK 50 (as of 31 December 2022 value of CZK 50). Each share ranks pari passu in all respects with all other shares. The same rights are incorporated into all shares including the right to attend the General Meeting, to require and receive explanations of matters concerning the Company that are part of the agenda of the General Meeting, to submit proposals and counterproposals, and to receive a dividend and share in the liquidation surplus. In compliance with the relevant legal provisions, the voting rights attached to the shares owned by RADENSKA d.o.o. cannot be exercised. All of the issued shares have been fully paid up. 4.16.2 OTHER RESERVES Other reserves are created based on statutory requirements (in accordance with binding legal regulations) or voluntarily (in accordance with the entity’s by-laws) using funds from decreased share capital, generated profits and contributions made by 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-44 the shareholders. It is used to cover losses, refund capital contributions, and redeem shares. Other reserves also contain balances accounted based on IFRS Accounting Standards requirements (e.g. share based payment). Other reserves contain balances related to: • share based payment programme, and • valuation of the interest rate swaps (hedge accounting). The Group has made a disaggregation of Other reserves in both 2023 and 2022. Total balances in 2022 remain the same as reported. 4.16.3 OWN SHARES The Company didn’t have any own shares as of 31 December 2023 and 31 December 2022. RADENSKA d.o.o. as at 31 December 2023 owned 1,062,236 (as at 31 December 2022: 1,062,236) shares of the Company (which represents 4.77% of the Company´s share capital, as of 31 December 2022: 4.77%) in total value of CZK 467,382 thousand (treasury shares) (as at 31 December 2022: CZK 467,382 thousand). COURSE OF PURCHASE OF OWN SHARES IN 2022 (transaction performed within the Group) The Board of Directors of the Company resolved to implement the acquisition of own shares by the Company on 7 March 2022. The sole purpose of the acquisition of own shares by the Company was to meet obligations arising from share option programmes, or other allocations of shares to employees or to members of the administrative, management or supervisory bodies of the Company or of an associate company. The conditions for the acquisition of own shares by the Company: a) the acquisition took place outside the regulated market, directly from the company RADENSKA d.o.o., a subsidiary company of the Company; b) number of shares that were acquired amounted to 22,615 shares of the Company which represented 0.10% of the Company´s share capital; and c) the acquisition was settled on 8 March 2022 for the price equal to the closing price for which shares of Kofola were traded on the regulated market organized by the company Burza cenných papírů Praha, a.s. on the previous trading day, i.e. CZK 295 per individual share (total value of CZK 6,671 thousand). As such, the contract was concluded at market terms. The shares have nominal value of CZK 50 per individual share. Shares have been transferred to share based payment participants in March 2022. 4.16.4 DIVIDENDS Table Dividends 2023 2022 CZK´000 CZK´000 Dividends 286,601 239,896 Dividends per share (CZK/share) 13.5 11.3 * Declared dividends divided by the number of shares outstanding as of dividend record date. 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-45 4.17. PROVISIONS Table Movements in provisions Pension benefits Provision for personnel expenses (bonuses) Other provisions Total CZK´000 CZK´000 CZK´000 CZK´000 Balance as at 1 January 2023 16,213 97,491 19,418 133,122 Increase due to creation 515 178,416 21,109 200,040 Decrease due to usage/release (2,656) (97,412) (1,126) (101,194) Exchange differences 374 1,002 409 1,785 Balance as at 31 December 2023 14,446 179,497 39,810 233,753 Of which: Current part 256 179,497 2,495 182,248 Non-current part 14,190 - 37,315 51,505 Balance as at 31 December 2023 14,446 179,497 39,810 233,753 Provision for personnel expenses and other provisions (mainly shared based payments related provisions) increased due to positive Group results. For further information about contingent liabilities refer to section 4.23. 4.18. BANK CREDITS AND LOANS Indebtedness of the group from the credits and loans As at 31 December 2023, the Group’s total bank loans and credits amounted to CZK 3,601,260 thousand (as at 31 December 2022: CZK 3,550,025 thousand). Increase of the balance is a result of the regular loan repayment, overdraft and CAPEX tranche drawing and FX revaluation. From the total balances in relation to repayments and drawings of loans and bank credits presented within the Consolidated statement of cash flows (section 1.4), amount of CZK nil thousand represents the change of Group’s overdraft (in 2022: increase of CZK 166,737 thousand). The Facility loan agreement as amended (which refinanced loans at that time, served for a loan financing of RADENSKA d.o.o. acquisition and also the acquisition of ONDRÁŠOVKA a.s. and Karlovarská Korunní s.r.o) with carrying amount of CZK 3,384,730 thousand as at 31 December 2023 (as at 31 December 2022: CZK 3,226,113 thousand) was a main component of Group´s liabilities. The reason for the execution of the Facility loan agreement was a consolidation of Group financing to ensure strategic development and taking advantage of the favourable conditions of financial market. In June 2022, an amendment to existing contract on bank credits and loans has been concluded. Transferring 60% of outstanding loan to EUR brings significant savings in interest expense and adjustment of the repayment schedule lead to decrease of regular annual loan repayments. Credit terms and terms and conditions Based on credit agreements, the Group is required to meet specified covenants. In accordance with the requirements of IAS 1, a breach of credit terms that may potentially limit unconditional access to credits in the nearest year makes it necessary to classify such liabilities as current. As of 31 December 2023, the Group met all covenants. As of 31 December 2022, the Group obtained a bank waiver for the breach of CAPEX ratio covenant. All other bank loan covenants were met in 2022. 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-46 Table Financing entity Credit currency Face value Carrying amount Interest terms Maturity date Collateral Undrawn credit line 31.12.2023 CZK´000 CZK´000 CZK’000 ČSOB, a.s. + Česká spořitelna, a.s. CZK - - 1M PRIBOR + margin 6/2025 buildings, receivables, movable assets, 283,470 EUR 216,530 216,530 1M EURIBOR + margin 6/2025 shares, bill of exchange, inventory ČSOB, a.s. + Česká spořitelna, a.s. CZK 1,025,791 1,022,486 3M PRIBOR + margin 6/2028 buildings, receivables, movable assets, shares, bill of exchange, inventory - ČSOB, a.s. + Česká spořitelna, a.s. EUR 1,897,834 1,891,290 3M EURIBOR + margin 6/2028 buildings, receivables, movable assets, shares, bill of exchange, inventory - ČSOB, a.s. + Česká spořitelna, a.s. CZK 126,889 126,889 3M PRIBOR + margin 6/2028 buildings, receivables, movable assets, - EUR 122,088 122,088 3M EURIBOR + margin 6/2028 shares, bill of exchange, inventory ČSOB, a.s. + Česká spořitelna, a.s. CZK 88,000 88,000 3M PRIBOR + margin 6/2028 buildings, receivables, movable assets, 130,000 EUR 133,977 133,977 3M EURIBOR + margin 6/2028 shares, bill of exchange, inventory Total 3,611,109 3,601,260 413,470 Out of it non-current 3,153,945 Out of it current 447,315 * Carrying amount of borrowings on variable interest rate approximates fair value. ** Administration by Česká spořitelna, a.s. There is a shared limit of CZK 500,000 thousand for Kofola a.s. (CZ), Kofola a.s. (SK), RADENSKA d.o.o. and Kofola ČeskoSlovensko a.s. which can be drawn in CZK and EUR. *** The interest rate swaps were concluded (refer to section 4.25.1). Financing entity Credit currency Face value Carrying amount Interest terms Maturity date Collateral Undrawn credit line 31.12.2022 CZK´000 CZK´000 CZK’000 ČSOB, a.s. + Česká spořitelna, a.s. CZK - - 1M PRIBOR + margin 6/2025 buildings, receivables, movable assets, 176,088 EUR 323,912 323,912 1M EURIBOR + margin 6/2025 shares, bill of exchange, inventory ČSOB, a.s. + Česká spořitelna, a.s. CZK 1,153,791 1,149,322 3M PRIBOR + margin 6/2028 buildings, receivables, movable assets, shares, bill of exchange, inventory - ČSOB, a.s. + Česká spořitelna, a.s. EUR 1,851,011 1,843,013 3M EURIBOR + margin 6/2028 buildings, receivables, movable assets, shares, bill of exchange, inventory - ČSOB, a.s. + Česká spořitelna, a.s. CZK 155,086 155,086 3M PRIBOR + margin 6/2028 buildings, receivables, movable assets, 66,222 EUR 78,692 78,692 3M EURIBOR + margin 6/2028 shares, bill of exchange, inventory Total 3,562,492 3,550,025 242,310 Out of it non-current 3,058,226 Out of it current 491,799 * Carrying amount of borrowings on variable interest rate approximates fair value. ** Administration by Česká spořitelna, a.s. There is a shared limit of CZK 500,000 thousand for Kofola a.s. (CZ), Kofola a.s. (SK) and Kofola ČeskoSlovensko a.s. which can be drawn in CZK and EUR. *** For part of the face value the interest rate swap was concluded (refer to section 4.25.1). 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-47 Pledges of the Group Pledges of the Group 31.12.2023 31.12.2022 Cost Net book value Cost Net book value CZK´000 CZK´000 CZK´000 CZK´000 Property, plant and equipment 4,215,877 1,302,748 4,079,863 1,302,587 Intangible assets (trademarks) 73,656 1,159 71,735 1,271 Inventories 369,529 361,270 381,861 377,161 Receivables 671,796 671,783 603,781 603,781 Cash in bank 933,952 933,952 548,511 548,511 Total 6,264,810 3,270,912 5,685,751 2,833,311 Balances related to the returnable packages are presented within Property, plant and equipment. ** Mostly trade receivables, without effect of loss allowances. 4.19. TRADE AND OTHER PAYABLES Table Trade and other payables 31.12.2023 31.12.2022 Other liabilities Current Non-current Current Non-current CZK´000 CZK´000 CZK´000 CZK´000 Financial liabilities within Trade payables and other liabilities Trade payables 1,460,027 - 1,384,879 - - of that accrued expenses 282,494 - 196,611 - Liabilities for purchased tangible and intangible assets 50,014 - 41,953 - Derivatives - 10,927 - - Advances received 203,116 - 200,834 - Contingent/deferred consideration 40,790 50,680 - - Other financial liabilities 33,676 15,240 25,822 16,825 Total 1,787,623 76,847 1,653,488 16,825 Non-financial liabilities within Trade payables and other liabilities VAT 27,436 - 20,496 - Payables to employees 92,457 - 82,642 - Deferred revenue 5,548 - 5,095 - Other non-financial liabilities 69,321 - 71,111 - Total 194,762 - 179,344 - Trade and other payables and other liabilities total 1,982,385 76,847 1,832,832 16,825 * Mainly advances received for the returnable packages. ** Mainly payables to state authorities. *** Including government levies in Slovenia. Trade payables increased due to higher purchases at the end of the year and also increased prices. Contingent/deferred consideration represents liabilities connected with the acquisition of FILIP REAL a.s. and Bilgola fresh s.r.o. that are repayable in following years as per contract terms. Trade payables are not interest bearing and are usually paid within 30-90 days of recognition. Other payables are not interest bearing and are payable on average within 1 month. 4.20. FUTURE COMMITMENTS, CONTINGENT ASSETS AND LIABILITIES As at 31 December 2023 and 31 December 2022 the Group companies didn’t provide any material guarantees for third party entities. 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-48 4.21. SHARE BASED PAYMENT The following table summarizes the information about the share based payment plan 2021 – 2026. Share based payment Plan 2021 - 2026 Summary of effect during 2023 and as of 31 December 2023 Share price at grant date (CZK) 282 Number of Pair shares transferred to participants in 2023 (pcs) - Total cumulated number of Pair shares transferred to participants as of 31 Dec 2023 (pcs) - Fair value of Pair shares as of grant date (CZK) 140 - 200 Ends of vesting periods 31 Dec 2023, 31 Dec 2026 Number of Performance shares transferred to participants in 2023 (pcs) - Total cumulated number of Performance shares transferred to participants as of 31 Dec 2023 (pcs) - Fair value of Performance shares as of grant date (CZK) 185 Ends of vesting periods 31 Dec 2026 Cumulated reserve from equity settled transactions as of 31 Dec 2022 (CZK thousand) 16,349 Total expense/(income) from equity settled transactions in 2023 (CZK thousand) 158,512 Cumulated reserve from equity settled transactions as of 31 Dec 2023 (CZK thousand) 174,861 Share based payment Plan 2021 - 2026 Summary of effect during 2022 and as of 31 December 2022 Share price at grant date (CZK) 282 Number of Pair shares transferred to participants in 2022 (pcs) - Total cumulated number of Pair shares transferred to participants as of 31 Dec 2022 (pcs) - Fair value of Pair shares as of grant date (CZK) 140 - 200 Ends of vesting periods 31 Dec 2023, 31 Dec 2026 Number of Performance shares transferred to participants in 2022 (pcs) - Total cumulated number of Performance shares transferred to participants as of 31 Dec 2022 (pcs) - Fair value of Performance shares as of grant date (CZK) 185 Ends of vesting periods 31 Dec 2026 Cumulated reserve from equity settled transactions as of 31 Dec 2021 (CZK thousand) 17,857 Total expense/(income) from equity settled transactions in 2022 (CZK thousand) (1,508) Cumulated reserve from equity settled transactions as of 31 Dec 2022 (CZK thousand) 16,349 Significant increase of the share based payment balance in 2023 is connected with the positive development of the Group’s business and its expected continuance in the upcoming years which influences the Performance Shares Plan due to increase of expected Equity Value (EBITDA multiple decreased by the Net debt) as of 31 Dec 2026. 4.22. LEASES This note provides information about leases where the Group is a lessee. Leases where the Group is a lessor are immaterial. 4.22.1 AMOUNTS RECOGNISED IN THE STATEMENT OF FINANCIAL POSITION Right-of-use asset forms a part of Property, plant and equipment. Lease liabilities are presented on separate rows in the statement of financial position. The net carrying amount at the end of the reporting period by classes of assets is provided below: Net carrying amount by classes of assets 31.12.2023 31.12.2022 CZK´000 CZK´000 Land 25,403 24,185 Buildings and constructions 177,536 191,661 Plant and equipment 22,369 36,630 Vehicles 108,859 119,179 Total 334,167 371,655 Additions to the right-of-use assets were following: 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-49 Additions by classes of assets for the period Land Buildings and constructions Plant and equipment Vehicles Total CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 2023 2,255 50,661 6,913 35,774 95,603 2022 6,019 47,235 12,418 27,017 92,689 4.22.2 AMOUNTS RECOGNISED IN THE STATEMENT OF PROFIT OR LOSS Depreciation expense to the right-of-use assets during the 2023 and 2022 financial year was following: Depreciation expense by classes of assets Land Buildings and constructions Plant and equipment Vehicles Total CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 2023 1,193 62,815 21,219 46,274 131,501 2022 1,418 60,138 16,992 45,120 123,668 Interest expense to lease liabilities is presented in note 4.7. The statement of profit or loss further shows the following amounts relating to not capitalized leases: Expense relating to not capitalized leases 2023 2022 CZK´000 CZK´000 Expense relating to short-term leases, leases of low-value assets and variable lease payments 98,431 94,318 Total 98,431 94,318 Total cash outflows in relation to capitalized leases are presented in the section Cash flows from financing activities within the Consolidated statement of cash flows. Future cash outflows in relation to capitalized leases are presented within section 4.25.4. Total cash outflows in relation to other leases is close to balance stated in the table above (short-term leases, leases of low-value assets and variable lease payments). Future cash outflows to which the lessee is potentially exposed that are not reflected in the measurement of lease liabilities are mostly represented by variable lease payments presented in the table above and their value is expected to not significantly differ from the balance presented in 2023 adjusted for newly concluded and terminated lease contracts. Lease commitments for short-term leases and leases of low-value assets as of 31 December 2023 amounted to CZK 33,695 thousand (as of 31 December 2022: CZK 31,025 thousand). 4.23. LEGAL AND ARBITRATION PROCEEDINGS Denationalisation proceedings against RADENSKA There are pending denationalisation proceedings with respect to denationalisation claims of the legal successors of the former owners of RADENSKA d.o.o. – Wilhelmina Höhn Šarič and Ante Šarič. These denationalisation claims have been in the process of being decided on from the year 1993 onward. After several turns in the process the Constitutional court in 2018 reversed the decisions of the authorities adopted by then which prevented the denationalization beneficiaries from denationalization for legal reasons and returned the matter to the first instance authority. Upon such a decision the administrative unit Gornja Radgona as the first instance authority resumed with the process in 2018. In the resumed process the authority, in several partial decisions issued so far in 2018, 2019 and 2020, found the denationalization beneficiaries are entitled to denationalization, however, not in the form of in-kind return of property, for which RADENSKA would be liable, but merely in the form of compensation, which is paid from the Republic of Slovenia and neutral with respect to RADENSKA. In part the denationalisation claims were rejected for lack of merit. Such decisions of the authorities effectively mean that the beneficiary is not entitled to in-kind return of property and therefore neither RADENSKA nor Kofola are obliged to any compensation payment. In February 2021, the beneficiary even withdrew the claim for the in-kind return of the RADENSKA enterprise and real estates owned by the enterprise and is now primarily requesting to be compensated by the state. The authorities recently followed such request and issued decisions according to which the beneficiary is entitled to compensation in form of state bonds, compensated by the Slovene Sovereign Holding and neutral with respect to RADENSKA and Kofola Group. Please note that such decisions, including the most recent decision are not final and thus, in theory, there’s still the risk, albeit very low, the current decisions would be reversed later in the process with potential negative consequences for RADENSKA. RADENSKA is therefore still actively participating in the process and protecting its interests. 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-50 Litigation with former lawyer There is a litigation concerning the amount of CZK 23,070 thousand with a former lawyer Mr. Belec, who represented RADENSKA in the denationalization process and with whom RADENSKA already concluded a settlement in 2018. Currently, Mr. Belec is in a personal bankruptcy procedure and claims that the settlement in 2018 was not in his interest. Although we estimate the risk of the plaintiff succeeding with the claim to be low, we note the outcome of legal proceeding is uncertain and therefore a potentially negative outcome cannot be completely excluded. Other proceedings Some of the Group companies are routinely involved in legal proceedings which arise in the ordinary course of the Group's business but which are not material to the Group. The Company is not involved in any judicial, administrative or arbitration proceedings and has not conducted such proceedings in the past. Apart from the above denationalisation related proceedings, there are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened, of which the Company and/or Group is aware, including any claims against the directors of the Company) which may have, or have had during the 12 months prior to the date of these financial statements, an effect on the financial position or profitability of the Company and/or the Group. 4.24. RELATED PARTY TRANSACTIONS 4.24.1 SHAREHOLDERS STRUCTURE Table Share capital structure 31.12.2023 31.12.2022 Name of entity Number of shares % in share capital % in voting rights Number of shares % in share capital % in voting rights AETOS a.s. 14,984,204 67.22 70.58 14,984,204 67.22 70.58 RADENSKA d.o.o. 1,062,236 4.77 0.00 1,062,236 4.77 0.00 Others 6,245,508 28.01 29.42 6,245,508 28.01 29.42 Total 22,291,948 100.00 100.00 22,291,948 100.00 100.00 Transactions with own shares are described in section 4.16.3. 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-51 4.24.2 REMUNERATION OF THE COMPANY’S KEY MANAGEMENT PERSONNEL Presented below is the structure of the remuneration of Group´s key management personnel in 2023 and 2022. Table Remuneration of the Group´s key management personnel 2023 Members of the Company´s Board of Directors Members of the Company´s Supervisory Board Members of the Company´s Audit Committee Other key management personnel of the Group Total compensation CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Amounts paid for activities in the Company´s Board of Directors Financial 27,251 - - - 27,251 Non-financial 857 - - - 857 Amounts paid for activities in the Company´s Supervisory Board Financial - 1,200 - - 1,200 Non-financial - 287 - - 287 Amounts paid for activities in the Company´s Audit Committee Financial - - 288 - 288 Non-financial - - - - - Amounts paid for other activities within the Group Financial 6,470 5,795 1,936 35,417 49,618 Non-financial 98 214 56 1,683 2,051 Total expense/(income) from equity settled transactions (Share based payment) Share based payment 50,771 - - 107,741 158,512 Shares transfer to share based payment participants Share based payment - - - - - Cumulated reserve from equity settled transactions Share based payment 63,839 1,010 - 120,869 185,718 Remuneration of the Group´s key management personnel 2022 Members of the Company´s Board of Directors Members of the Company´s Supervisory Board Members of the Company´s Audit Committee Other key management personnel of the Group Total compensation CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Amounts paid for activities in the Company´s Board of Directors Financial 23,842 - - - 23,842 Non-financial 5,175 - - - 5,175 Amounts paid for activities in the Company´s Supervisory Board Financial - 1,200 - - 1,200 Non-financial - 287 - - 287 Amounts paid for activities in the Company´s Audit Committee Financial - - 288 - 288 Non-financial - - - - - Amounts paid for other activities within the Group Financial 6,206 5,114 1,776 33,521 46,617 Non-financial 126 214 56 3,407 3,803 Total expense from equity settled transactions (Share based payment) Share based payment (390) - - (1,118) (1,508) Shares transfer to share based payment participants Share based payment (3,722) (550) - (2,399) (6,671) Cumulated reserve from equity settled transactions Share based payment 12,820 954 - 13,432 27,206 4.24.3 OTHER RELATED PARTY TRANSACTIONS There was a dividend payment to parent company of CZK 202,287 thousand (in 2022: CZK 169,322 thousand). The Group has purchased the remaining 10% share in UGO trade s.r.o. through the acquisition of Bilgola fresh s.r.o. (see note 4.30). In 2023, there were purchases from General Plastic, a. s. of CZK 53,075 thousand, sales of CZK 4,595 thousand, receivables as of 31 December 2023 amounted to CZK 672 thousand and payables to CZK 7,565 thousand. The Group has made a capital contribution to General Plastic, a. s. of CZK 4,033 thousand. The Group has made a capital contribution to Cafe dorado s.r.o. of CZK 34,050 thousand. 4.25. FINANCIAL RISK MANAGEMENT The Group’s primary financial instruments consist of bank credits, lease payables, derivatives, cash and cash equivalents, deposits and loans. The main goal of holding such financial instruments is to obtain funds for business operations, or to invest the Group’s available funds. In addition, the Group has other financial instruments, such as trade receivables and payables that arise as part of its operations. The accounting methods relating to those instruments are described above (section 3.4.2). It is the Group’s policy – now and throughout the reporting periods presented in these financial statements – not to keep the financial instruments for trading purposes. The Group’s activities are exposed to several types of financial risk: market risk (including foreign exchange risk, and cash-flow risk relating to changes in interest rates), credit risk and liquidity risk. In addition, the Group monitors the market 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-52 prices risk relating to all of its financial instruments. Risks are managed by the Group’s management, which recognises and assesses the above financial risks. The general risk management process is focused on the unpredictability of financial markets, and the Group tries to minimise any potential adverse effects on its financial results. The Group uses derivative financial instruments to hedge against certain types of risk, providing that the hedging instruments are considered to be cost effective. Management verifies and agrees the risk management methods with regard to every type of risk. A short description of these methods is presented below. 4.25.1 INTEREST RATE RISK Interest rate risk is a risk that the fair value or future cash flows from a financial instrument will change due to changes in interest rates. The interest-bearing financial liabilities of the Group are mainly bank credits. The Group has credit payables with variable interest rates, which give rise to a risk of an increase in those rates compared to the rates applied at contract conclusion. In addition, the Group places its free funds on variable interest rate deposits, which would bring the profits down if the interest rates fall. The Group also uses fixed interest rate instruments, with regard to which interest rate movements have no effect on interest costs or interest income. Trade and other receivables and payables are not interest bearing and have mostly due dates of up to one year. Management of the Group monitors its exposure to interest rate risk and interest rate forecasts. In order to protect against changes in interest rates, the Group has fixed the interest rate on EUR part of the loan (excluding overdraft) for Group financing, because existing contract terms were favourable for the Group which was not the case of CZK part where the interest rates were on their maximum levels. The balance of the loan which is covered by interest rate swaps as of 31 December 2023 was CZK 2,019,922 thousand (as of 31 December 2022: CZK 1,851,011 thousand). Hedge accounting is established by the Group for these derivative instruments. There was no ineffective portion of the hedging relationship for the year ended 31 December 2023 and 31 December 2022. The Group determines the existence of an economic relationship between the hedging instrument and hedged item based on the reference interest rates, maturities and the notional amounts. The Group assesses whether the derivative designated in each hedging relationship is expected to be effective in offsetting changes in cash flows of the hedged item under the hypothetical derivative method. The Group's interest rate risk management policy is to hedge at least 50% of its variable interest exposure that is related to Group's bank credit and loans (excluding overdrafts). Hedging instruments are utilizied when the conditions of available contracts are considered to be favourable for the Group. Information about hedging instruments (cash flow hedge) Interest rate swaps 31.12.2023 31.12.2022 Net exposure Average fixed interest rate Net exposure Average fixed interest rate CZK´000 p.a. CZK´000 p.a. In period from one to six months 13,565 4.0% - 3.9% In period from six to twelve months 13,565 4.0% - 3.9% More than one year 1,992,792 3.9% 1,851,011 3.9% Total 2,019,922 1,851,011 * IRS relate to the part of the bank credits and loans that is repayable in 6/2028. Interest rate swaps – nominal balances 31.12.2023 31.12.2022 CZK'000 EUR'000 CZK'000 EUR'000 Nominal amounts of the hedging instruments 2,019,922 81,696 1,851,011 76,758 Interest rate swaps by tranches 31.12.2023 31.12.2022 Net exposure Carrying amount Net exposure Carrying amount CZK´000 CZK´000 CZK´000 CZK´000 Derivative in relation to tranche C1 122,088 (3,018) - - Derivative in relation to tranche B2 756,325 5,711 737,665 34,151 Derivative in relation to tranche B6 1,141,509 8,619 1,113,346 51,545 Total 2,019,922 11,312 1,851,011 85,696 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-53 Carrying amounts and FS position of IRS 31.12.2023 31.12.2022 CZK´000 CZK´000 Non-current financial assets (presented in Other receivables) - 67,595 Current financial assets (presented in Trade and other receivables) 22,239 18,101 Non-current financial liabilities (presented in Other liabilties) (10,927) - Current financial liabilities (presented in Trade and other payables) - - Net balance 11,312 85,696 Hedge effectiveness and Hedge ratio of IRS 31.12.2023 31.12.2022 CZK´000 CZK´000 Change in fair value of the hedging instruments used as the basis for recognising hedge ineffectiveness for the period (74,384) (6,350) Change in fair value of the hedged item used as the basis for recognising hedge ineffectiveness for the period (74,384) (6,350) Hedge ratio 100% 100% * There was no ineffective portion of the hedging relationship. ** The Group is able to conclude the derivative contracts with the same characteristics (such as maturities and notional amounts) as those of the underlying assets. Changes in IRS hedge reserve 2023 2022 CZK´000 CZK´000 IRS reserve balance as of 1 January 69,413 74,556 Effective portion of changes in fair value (74,384) (6,350) Recclasification to profit or loss - - Tax effect of fair value movements during the year 14,133 1,207 Tax effect resulting from change in the tax rate (227) - IRS reserve balance as of 31 December 8,935 69,413 Interest rate sensitivity If interest rates at the balance sheet date had been 100 basis points lower/higher with all other variables held constant, profit/(loss) for the period for the year 2023 would have been increased/decreased by CZK 14,876 thousand (2022: CZK 20,191 thousand), mainly as a result of different interest expense on variable interest for financial liabilities. 4.25.2 CURRENCY RISK The Group is exposed to the risk of changes in foreign exchange rates due to a volume of sales of finished products in local currencies of individual entities (CZK, EUR, PLN) and the fact that significant part of the costs of purchased raw materials are incurred in foreign currencies (mainly EUR). The currency risk relates primarily to the EUR exchange rates in relation to CZK. The Group’s currency risk associated with other currencies is immaterial. The effect of currency risk on the Group’s position is presented in the table (sensitivity analysis) below. The sensitivity analysis is based on a reasonable change in the assumed foreign exchange rate while the other assumptions remain unchanged. In practice this is not very likely, and changes in certain assumptions may be correlated, e.g. a change in interest rate and in the foreign exchange rate. The Group manages currency risk as a whole. The sensitivity analysis prepared by management for currency risk illustrates after-tax profit or loss effect of changes in the exchange rate of the EUR to CZK. Financial assets and liabilities denominated in EUR 31.12.2023 31.12.2022 CZK´000 CZK´000 Cash and cash equivalents 256,101 76,991 Loans provided to related parties 601,204 733,440 Trade receivables and other current financial receivables 252,373 238,824 Non-current financial receivables 963 66,062 Bank credits and loans (2,152,156) (1,921,705) Lease liabilities (110,939) (68,571) Loans received from related parties (516,899) (647,610) Trade liabilities and other current financial liabilities (260,245) (374,181) Non-current financial liabilities (10,927) - Net position (1,940,525) (1,896,750) * Table includes also intercompany balances that are eliminated during the consolidation process because FX differences arising on intercompany balances and transactions are not eliminated during the consolidation procedures which is in line with IFRS. 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-54 Currency risk impact on profit or loss 31.12.2023 31.12.2022 CZK´000 CZK´000 EUR strengthening by 3% (47,155) (46,091) EUR weakening by 3% 47,155 46,091 4.25.3 CREDIT RISK Credit risk arises from cash deposits in banks along with other short-term deposits, as well as from trade and other financial receivables. The Group undertakes activities aimed at limiting credit risk, consisting of checking the creditworthiness of its customers, setting credit limits and monitoring the customers’ financial position. An analysis of ageing structure of trade and other financial receivables assists with the credit risk management. There are no significant concentrations of credit risk, whether through exposure to individual customers, specific industry sectors and/or regions. TRADE AND OTHER FINANCIAL RECEIVABLES The Group is exposed to credit risk, defined as a risk that its debtors will not meet their obligations and thus cause the Group to incur losses. Presented below is the ageing structure of receivables: Credit risk 31.12.2023 31.12.2022 Trade receivables Other financial receivables Trade receivables Other financial receivables Due CZK´000 CZK´000 CZK´000 CZK´000 Total due 794,468 74,049 678,883 136,121 Past due - less than 30 days overdue 106,026 433 84,179 2,249 - 30 to 90 days overdue 19,035 754 21,126 570 - 91 to 180 days overdue 16,341 462 9,522 738 - 181 to 360 days overdue 5,614 2,505 2,532 2,077 - over 360 days overdue 28,345 29,048 37,881 21,108 Total past due 175,361 33,202 155,240 26,742 Less loss allowance (-) (51,902) (38,126) (50,216) (34,624) Total 917,927 69,125 783,907 128,239 Subject to the above, management believes that the credit risk has been accounted for in the financial statements through the creation of appropriate allowances. CASH AND CASH EQUIVALENTS With regard to the Group’s other financial assets, such as cash and cash equivalents, credit risk arises as a result of the other party’s inability to pay, and the maximum amount of the Group’s exposure to this risk is equal to the balance sheet value of these amounts. The credit risk associated with bank deposits, derivative instruments and other investments is considered to be immaterial, as the Group has concluded transactions with institutions that have a sound financial position. Credit quality of cash in bank and in hand 31.12.2023 31.12.2022 Credit rating CZK´000 CZK´000 Aa3 636 2,674 A1 663,868 316,083 A2 12,356 7,098 A3 7,104 93,214 Baa1 380,929 201,713 Not on watch - 1,358 Cash in hand 6,206 4,302 Total cash in bank and in hand 1,071,099 626,442 * Mainly Fio banka a.s. 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-55 4.25.4 LIQUIDITY RISK The risk for the Group arises from a potential restriction in access to financial markets or from a change in the attitude of banks in the area of granting credits, which may result in an inability to obtain new financing or refinancing of debts. Management of the Group monitors the risk of insufficient funds by adjusting the structure of financing to prediction of future cash flows (planned investments included), diversifying of sources of financing and by keeping sufficient level of available credit lines. It is the Group’s objective to maintain a balance between financing continuity and flexibility, by using various financing sources, such as credits, loans and lease agreements. The Group controls its financial liabilities so that in each given period the amount of liabilities due within the next 12 months does not pose a threat for the Group’s ability to meet its financial obligations. The Group’s management believes that the value of cash and cash equivalents as at the balance sheet date, the available credit lines as at 31 December 2023 of CZK 413,469 thousand (as at 31 December 2022: CZK 242,310 thousand) and the Group’s financial position are such that the risk of losing liquidity is assessed as not significant. Analysis of financial liabilities is presented below. The amounts represent undiscounted cash flows, which represent the Group's maximum exposure to liquidity risk. Future cash outflows related to financial liabilities: Contractual cash flows of financial liabilities as at 31 December 2023 Less than 3 months Between 3-12 months Between 1-2 years Between 2-5 years Over 5 years Total contractual cash-flows Total carrying amount CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Trade payables 1,451,572 8,455 - - - 1,460,027 1,460,027 Bank credits and loans 114,288 523,746 358,312 3,198,572 - 4,194,918 3,601,260 Lease liabilities 32,666 91,990 88,175 108,918 52,530 374,279 329,543 Advances received 203,116 - - - - 203,116 203,116 Other liabilities 79,070 45,410 24,333 24,921 27,593 201,327 201,327 Total 1,880,712 669,601 470,820 3,332,411 80,123 6,433,667 5,795,273 Contractual cash flows of financial liabilities as at 31 December 2022 Less than 3 months Between 3-12 months Between 1-2 years Between 2-5 years Over 5 years Total contractual cash-flows Total carrying amount CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Trade payables 1,376,660 8,219 - - - 1,384,879 1,384,879 Bank credits and loans 92,042 614,043 353,537 940,338 2,448,297 4,448,257 3,550,025 Lease liabilities 29,910 97,371 138,875 100,462 51,052 417,670 371,457 Advances received 200,834 - - - - 200,834 200,834 Other liabilities 50,717 17,203 2,872 5,172 8,781 84,745 84,600 Total 1,750,163 736,836 495,284 1,045,972 2,508,130 6,536,385 5,591,795 The cash outflows schedules above do not include financial guarantees, where the fair value was determined to be close to zero and which are listed in section 4.20. 4.26. CAPITAL MANAGEMENT The Group manages capital by having a balanced financial policy with the objective of supplying the necessary funds to grow the business and, at the same time, secure an appropriate capital structure and financial liquidity and meet all the externally imposed capital requirements. The Group manages net debt and monitors the net debt/adjusted EBITDA ratio. The net debt is defined as the total value of liabilities arising out of credits, loans, bonds and leases, less cash and cash equivalents. Adjusted EBITDA is operating profit/(loss) plus depreciation and amortisation adjusted by all one-off events (all non-recurring or exceptional items not arising out of ordinary operations, such as impairment write downs, costs of relocation, extraordinary sale of non-current assets or group layoffs). 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-56 Net debt/Adjusted EBITDA calculation 2023 2022 CZK´000 CZK´000 Bank credits and loans 3,601,260 3,550,025 Lease liabilities 329,543 371,457 Cash and cash equivalents (1,071,099) (626,442) Net debt 2,859,704 3,295,040 Operating profit/(loss) 747,203 482,640 Adjusted for: One off´s (EBITDA impact) (34,220) 41,695 Depreciation and amortisation 540,421 586,096 Adjusted EBITDA 1,253,404 1,110,431 Net debt/Adjusted EBITDA 2.28 2.97 One-offs for 2023 (EBITDA impact): • Advisory costs of CZK 6,639 thousand (CzechoSlovakia and Adriatic segments). • Restructuring costs of CZK 2,328 thousand (Fresh & Herbs segment). • Net gain connected with the closed Grodzisk Wielkopolski plant of CZK 2,687 thousand (Fresh & Herbs segment). • Net gain on sold items of Property, plant and equipment of CZK 10,617 thousand recognized in all business segments, mainly Fresh & Herbs. • Gain on sale of the Grodzisk Wielkopolski plant of CZK 29,883 thousand (Fresh & Herbs segment). One-offs for 2022 (EBITDA impact): • Impairment of CZK 33,124 thousand in relation to plant Grodzisk Wielkopolski (Fresh & Herbs segment). • Advisory costs of CZK 7,874 thousand (mainly CzechoSlovakia and Adriatic segment). • Restructuring costs of CZK 7,006 thousand (mainly CzechoSlovakia segment). • Costs connected with the support provided to parties impacted by the Ukraine war of CZK 1,431 thousand (CzechoSlovakia segment). • Costs arising on integration of acquired subsidiaries of CZK 83 thousand (CzechoSlovakia segment). • Release of impairment to items of Property, plant and equipment of CZK 993 thousand (CzechoSlovakia segment). • Net gain on sold items of Property, plant and equipment of CZK 3,085 thousand recognized in all business segments. • Net income (excluding depreciation effect) connected with the closed Grodzisk Wielkopolski plant of CZK 3,745 thousand (Fresh & Herbs segment). 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-57 4.26.1 CASH AND NON-CASH FINANCING ACTIVITIES Table Net debt reconciliation Liabilities from financing activities Cash and cash equivalents Net debt Bank credits and loans Lease liability As at 1.1.2023 3,550,025 371,457 (626,442) 3,295,040 Proceeds from loans and bank credits received 285,807 - - 285,807 Repayment of loans and bank credits (294,868) - - (294,868) Change in amortized costs 2,618 - - 2,618 Repayment of lease liabilities - (137,343) - (137,343) Lease additions - 95,603 - 95,603 Lease terminations - (2,693) - (2,693) Cash (inflow)/outflow - - (432,298) (432,298) Foreign exchange adjustments 57,678 2,519 (12,359) 47,838 As at 31.12.2023 3,601,260 329,543 (1,071,099) 2,859,704 Net debt reconciliation Liabilities from financing activities Cash and cash equivalents Net debt Bank credits and loans Lease liability As at 1.1.2022 3,417,004 427,163 (391,517) 3,452,650 Proceeds from loans and bank credits received 400,915 - - 400,915 Repayment of loans and bank credits (214,663) - - (214,663) Change in amortized costs (4,639) - - (4,639) Repayment of lease liabilities - (143,451) - (143,451) Lease additions - 92,688 - 92,688 Lease terminations - (22,944) - (22,944) Cash (inflow)/outflow - - (244,260) (244,260) Foreign exchange adjustments (48,592) 18,001 9,335 (21,256) As at 31.12.2022 3,550,025 371,457 (626,442) 3,295,040 4.27. FINANCIAL INSTRUMENTS 4.27.1 FINANCIAL INSTRUMENTS CATEGORIES Fair value of Trade receivables, other financial receivables, Cash and cash equivalents, Trade liabilities and other financial liabilities is close to carrying amounts since the interest payable on them is either close to market rates or they are short-term. 31.12.2023 Financial assets at amortised cost Derivatives at fair value through OCI Financial liabilities at amortised cost Total CZK´000 CZK´000 CZK´000 CZK´000 Trade and other receivables 964,813 - - 964,813 Cash and cash equivalents 1,071,099 - - 1,071,099 Derivatives - 11,312 - 11,312 Bank credits and loans - - (3,601,260) (3,601,260) Lease liabilities - - (329,543) (329,543) Trade and other payables - - (1,853,543) (1,853,543) Total 2,035,912 11,312 (5,784,346) (3,737,122) 31.12.2022 Financial assets at amortised cost Derivatives at fair value through OCI Financial liabilities at amortised cost Total CZK´000 CZK´000 CZK´000 CZK´000 Trade and other receivables 826,450 - - 826,450 Cash and cash equivalents 626,442 - - 626,442 Derivatives - 85,696 - 85,696 Bank credits and loans - - (3,550,025) (3,550,025) Lease liabilities - - (371,457) (371,457) Trade and other payables - - (1,670,313) (1,670,313) Total 1,452,892 85,696 (5,591,795) (4,053,207) 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-58 Fair value of derivatives In 2020 and 2018, the Group concluded IRS contract and established a hedge accounting. Revaluation of derivatives in relation to the effective portion of the hedging relationship is accounted through Other comprehensive income (refer to section 3.5 for more details). With the amendment on bank loans in June 2022, also new IRS contracts were concluded (only in relation to EUR part of the loan) with interest 2.149% p.a. + margin. At the same time, the existing IRS were terminated and sold (refer to section 4.6). Measured derivatives are not traded in active markets, however all significant inputs required for fair value measurement are observable and as such the Group has included this instrument in Level 2 of fair value hierarchy levels. 4.28. HEADCOUNT The average headcount in the Group was as follows: Average headcount 2023 2022 Management Board of the Company 6 6 Management Boards of the Group entities 10 7 Administration 196 199 Sales, Marketing and Logistic department 1,143 1,158 Production division 682 699 Total 2,037 2,069 Total number of employees as of 31 December 2023 was 2,034 persons (as of 31 December 2022: 2,064 persons). 4.29. ACQUISITION OF SUBSIDIARIES Acquisition of subsidiary FILIP REAL a.s. In November 2023, the Company concluded an agreement to purchase a 100% stake in FILIP REAL a.s., a company that operates the hotel in Zbraslav, Prague. The following table summarizes the recognized amounts of assets acquired and liabilities assumed at the date of acquisition. Fair value of assets and liabilities CZK´000 Property, plant and equipment 61,107 Trade and other receivables – current 278 Cash and cash equivalents 329 Trade and other payables – current (732) Income tax liabilities (322) Total identifiable net assets acquired 60,660 Consideration transferred 20,000 Deferred consideration liability – current 19,126 Deferred consideration liability – non-current 35,782 Total consideration 74,908 Goodwill 14,248 The reason for the acquisition was the entrance into the new segment and also possible utilisation for own purposes. Post-acquisition revenue and result are immaterial. Acquisition of subsidiary PIVOVARY TRIANGL s.r.o. In November 2023, the Company became a 51% owner in PIVOVARY TRIANGL s.r.o., a holding company for the purpose of the acquisition of company Pivovary CZ Group a.s. (refer to subsequent events). Consideration transferred amounted to CZK 5 thousand. 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-59 4.30. ACQUISITION OF NCI Acquisition of subsidiary Bilgola fresh s.r.o. In December 2023, the Company concluded an agreement to purchase a 100% stake in Bilgola fresh s.r.o., a holding company that owned a remaining 10% share in UGO trade s.r.o. As such, UGO trade s.r.o. became fully part of the Kofola Group. Consideration CZK´000 Consideration transferred 3,000 Deferred consideration liability – current 21,664 Deferred consideration liability – non-current 14,898 Total consideration 39,562 Summary CZK´000 Carrying amount of NCI acquired (41,156) Total consideration 39,562 A decrease in equity attributable to owners of the Company (presented in Retained earnings) (80,718) The contingent consideration results from the estimated business results of UGO trade s.r.o. and is discounted with the cost of debt. 4.31. UKRAINE CRISIS War in Ukraine brought new risks and uncertainty to our business. The Group’s management is very closely monitoring the development of the war conflict between Russia and Ukraine. The Group has already provided various forms of support to Ukrainian civilians and intends to continue in these activities as it cares about people in need. The whole situation impacts people, companies and states all around the world. The Group has no material direct exposure either to Russia or Ukraine. The war however impacts whole European economy and led to price increases which was perceived also by the Group. Increasing input prices do not, however, represent a threat to the Group’s ability to continue as a going concern as it has sufficient financial resources and is able to control its costs (e.g. by savings in marketing expenses) to a certain level. In case of the ongoing cost pressure, the Group may also increase the output prices to ensure profitability level expected by its stakeholders. As of the date of this report, the production is in operation, we have continuing supplies of materials and energy (we are in close contact with our key suppliers). There were optimizations in CAPEX and OPEX and we plan to continue in this trend in the upcoming period based on actual development. The Group updates its risk matrix on a regular basis and is aware of increased risks in connection with the war in Ukraine (such as already mentioned input prices). There can also be an increased frequency of cyber-attacks but we haven’t been subject to any such attack that would impact our daily operations or would lead to leakage of the sensitive information. Our IT department monitors the situation on the daily basis and executes necessary steps to continue in the defence of our data and systems. The Group believes to have sufficient resources from current cash balance and overdrafts. We have an open and long-term relationship with our supportive banking group to whom we communicate our business outlook regularly. Based on the above analysis and assumptions, including the severe but plausible scenarios, management concluded that the Group will have sufficient resources to continue its business for a period of at least 12 months from the reporting date. As a result, the Group used the going concern basis of accounting in preparing these financial statements. 4.32. OTHER INFORMATION Auditors remuneration The Company was for the years ended 31 December 2023 and 31 December 2022 audited by KPMG Česká republika Audit, s.r.o. (“KPMG”). 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-60 The following amounts were charged by professional advisors and auditors: Auditors’ remuneration 2023 2022 CZK´000 CZK´000 Audit (KPMG) 4,599 4,801 Audit (Other companies) 325 309 Tax services (Other companies) 3,361 2,339 Other services (KPMG) 20 297 Other services (Other companies) 720 875 Total 9,025 8,621 Tax services include mainly advisory relating to preparation of corporate income tax returns, personal income tax for expats and various consultations in complex tax areas. Electricity purchase contracts The Group has concluded a general agreement on electricity deliveries and as such is not in risk of not having the electricity for production and other purposes. Price fixing is performed for various periods and on country by country basis for 20-50% of expected volumes. 4.33. SUBSEQUENT EVENTS In January 2024, the Group has acquired a 49% stake in MIXA VENDING s.r.o., a company focused on the operation of beverage and food vending machines. The agreement includes a three-year option for Kofola to acquire a majority stake in the company. In 2022, MIXA VENDING s.r.o. reached a turnover of over CZK 170 million and EBITDA over CZK 36 million. In January 2024, the Group has established a new subsidiary Supplo s.r.o. which is intended for B2B sales of products and services through the Marketplace model. In January 2024, the Group has acquired a 100% share in PRAGEROVY SADY LIBINA s.r.o., a company that owns apple orchards in the Úsovsko region. In February 2024, the Group has drawn the remaining balance of CAPEX loan tranche of CZK 130 million. In March 2024, PIVOVARY TRIANGL s.r.o. ("TRIANGL") became a 100% owner of Pivovary CZ Group a.s. and FONTÁNA PCZG s.r.o. The shareholders of TRIANGL are Kofola ČeskoSlovensko a.s. (51%), RSJ PE SICAV a.s. (29%) and ÚSOVSKO a.s. (20%). Company Pivovary CZ Group a.s. develops the traditional beer brands Holba, Zubr and Litovel. The Kofola Group can thus enter another category at the regional level in which it can use its business, distribution and marketing know-how. In 2022, Pivovary CZ Group a.s. reached a turnover of over CZK 1,300 million and EBITDA over CZK 250 million. In March 2024, the Group has drawn a loan of CZK 500 million in connection with the acquisition of Pivovary CZ Group. TRIANGL has received a capital contribution of CZK 800 million (from all shareholders on a pro rata basis), intercompany loans of CZK 315 million (from all shareholders on a pro rata basis) and bank loan of CZK 300 million in March 2024. Interest rate swaps have been concluded in relation to EUR part of recently drawn loans intended for CAPEX purposes in January 2024 and March 2024. In March 2024, company P.H.Lager s.r.o. was established. The company’s purpose is to focus on the production of F.H.Prager’s portfolio. Kofola ČeskoSlovensko a.s. has purchased 36,997 shares of its own shares (which represents 0.17% of the Company´s share capital) in the total value of CZK 10,063 thousand (CZK 272 per share) from RADENSKA d.o.o. in March 2024. The individual share price was determined based on the price quoted at Prague Stock Exchange. As such, the contract was concluded at market terms. The shares have nominal value of CZK 50 per individual share. The sole purpose of the acquisition of own shares by the Company was to meet obligations arising from share option programmes, or other allocations of shares, to employees or to members of the administrative, management or supervisory bodies of the Company or of an associate company. Substantial majority of shares has been transferred to option scheme participants in March 2024. Initial accounting for the above mentioned business combinations is incomplete at the time the financial statements are authorized for issue, therefore the disclosures required in relation to these business combinations are limited. 4. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-61 The settlement agreement on CZK 90 million was concluded between the Company and RADENSKA d.o.o. that settled the outstanding loan payable by the Company and part of the dividend payble by RADENSKA. No other events have occurred after the end of the reporting period that would require adjusting the amounts recognised and disclosures made in the consolidated financial statements. Kofola ČeskoSlovensko Group Consolidated financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU B-62 11.4.2024 Janis Samaras Chair of the Board of Directors date name and surname position/role signature 11.4.2024 René Musila Vice-Chair of the Board of Directors date name and surname position/role signature 11.4.2024 Daniel Buryš Vice-Chair of the Board of Directors date name and surname position/role signature 11.4.2024 Martin Pisklák Member of the Board of Directors date name and surname position/role signature 11.4.2024 Martin Mateáš Member of the Board of Directors date name and surname position/role signature 11.4.2024 Marián Šefčovič Member of the Board of Directors date name and surname position/role signature C-0 C. SEPARATE FINANCIAL STATEMENTS SEPARATE FINANCIAL STATEMENTS 2023 Kofola ČeskoSlovensko a.s. 1. SEPARATE FINANCIAL STATEMENTS C-1 Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-1 1. SEPARATE FINANCIA L STATEME NTS 1.1. SEPARATE STATEMENT OF PROFIT OR LOSS for the 12-month period ended 31 December 2023 and 31 December 2022 in CZK thousand. Separate statement of profit or loss Note 2023 2022 CZK´000 CZK´000 Revenue 4.2 588,741 480,407 Cost of sales 4.3 (31,798) (29,729) Gross profit 556,943 450,678 Selling, marketing and distribution costs 4.3 (195,149) (170,924) Administrative costs 4.3 (376,582) (222,370) Dividends 4.2 332,873 422,560 Release of impairment 4.12 238,453 - Other operating income 4.4 51,863 2,505 Other operating expenses 4.5 (8,027) (44,602) Operating profit/(loss) 600,374 437,847 Finance income 4.6 63,005 197,996 Finance costs 4.7 (248,380) (215,890) Profit/(loss) before income tax 414,999 419,953 Income tax (expense)/benefit 4.8 14,236 (19,101) Profit/(loss) for the period 429,235 400,852 Earnings/(loss) per share (in CZK) Basic earnings/(loss) per share 4.9 19.26 17.98 The above separate statement of profit or loss should be read in conjunction with the accompanying notes. 1.2. SEPARATE STATEMENT OF OTHER COMPREHENSIVE INCOME for the 12-month period ended 31 December 2023 and 31 December 2022 in CZK thousand. Separate statement of other comprehensive income Note 2023 2022 CZK´000 CZK´000 Profit/(loss) for the period 1.1 429,235 400,852 Other comprehensive income Items that may be reclassified to profit or loss: Derivatives - Cash flow hedges (74,384) (6,350) Deferred tax from cash flow hedging 4.8 13,906 1,207 Other comprehensive income/(loss) for the period (60,478) (5,143) Total comprehensive income/(loss) for the period 1.5 368,757 395,709 The above separate statement of other comprehensive income should be read in conjunction with the accompanying notes. 1. SEPARATE FINANCIAL STATEMENTS C-2 Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-2 1.3. SEPARATE STATEMENT OF FINANCIAL POSITION as at 31 December 2023 and 31 December 2022 in CZK thousand. Assets Note 31.12.2023 31.12.2022 CZK´000 CZK´000 Non-current assets 4,247,271 3,812,722 Property, plant and equipment 4.10 56,404 53,202 Goodwill 4.11 30,675 30,675 Intangible assets 4.11 277,916 266,117 Investments in subsidiaries 4.12 3,747,391 3,285,781 Investments in equity accounted investees 4.13 35,263 - Other receivables 4.14 99,622 176,947 Current assets 1,466,619 1,291,930 Inventories - 4 Trade and other receivables 4.14 489,372 416,500 Loans provided to related parties 4.14, 4.25.4 610,778 737,961 Cash and cash equivalents 4.15 366,469 137,465 Total assets 5,713,890 5,104,652 Liabilities and equity Note 31.12.2023 31.12.2022 CZK´000 CZK´000 Total equity 1.5 1,944,441 1,717,627 Share capital 1.5 1,114,597 1,114,597 Other reserves 1.5 194,653 96,619 Retained earnings/(Accumulated deficit) 1.5 635,191 506,411 Total liabilities 3,769,449 3,387,025 Non-current liabilities 3,330,147 3,114,072 Bank credits and loans 4.18, 4.26 3,153,945 3,058,226 Lease liabilities 4.22, 4.26 4,067 5,733 Provisions 4.17 21,353 1,611 Other liabilities 4.19 61,607 - Loans received from related parties 4.19 86,538 - Deferred tax liabilities 4.8 2,637 48,502 Current liabilities 439,302 272,953 Bank credits and loans 4.18, 4.26 230,785 167,887 Lease liabilities 4.22, 4.26 10,414 10,986 Provisions 4.17 79,949 42,011 Trade and other payables 4.19 99,904 49,055 Loans received from related parties 4.19 2,521 - Income tax liabilities 15,729 3,014 Total liabilities and equity 5,713,890 5,104,652 The above separate statement of financial position should be read in conjunction with the accompanying notes. 1. SEPARATE FINANCIAL STATEMENTS C-3 Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-3 1.4. SEPARATE STATEMENT OF CASH FLOWS for the 12-month period ended 31 December 2023 and 31 December 2022 in CZK thousand. Separate statement of cash flows Note 2023 2022 CZK´000 CZK´000 Cash flows from operating activities Profit/(loss) before income tax 1.1 414,999 419,953 Adjustments for: Non-cash movements Depreciation and amortisation 4.3 49,823 47,218 Net interest 4.6, 4.7 176,955 151,941 Dividends 4.2 (332,873) (422,560) Release of impairment 4.12 (238,453) - Change in the balance of provisions and other adjustments 8,079 28,219 Derivatives 4.6, 4.7 (19,752) (127,841) Realised (gain)/loss on sale of Property, plant and equipment and Intangible assets 4.4, 4.5 (396) (2) Net exchange differences 27,186 (11,306) Share based payment 4.3 99,204 (1,142) Other 1,500 (367) Cash movements Income tax (5,011) 779 Change in operating assets and liabilities Change in receivables (50,874) (28,199) Change in inventories 4 - Change in payables 7,442 (7,088) Net cash inflow/(outflow) from operating activities 137,833 49,605 Cash flows from investing activities Sale of Property, plant and equipment 467 17 Acquisition of Property, plant and equipment and Intangible assets (50,451) (18,153) Acquisition of subsidiaries 4.28 (23,005) - Acquisition of equity accounted investees 4.13 (1,213) - Dividends and interest received 382,117 577,541 Proceeds from repaid loans 152,038 15,000 Loans granted (9,370) (91,165) Capital contributions 4.13 (34,050) - Net cash inflow/(outflow) from investing activities 416,533 483,240 Cash flows from financing activities Lease payments 4.22 (12,786) (13,640) Proceeds from loans and bank credits 4.26 368,862 234,169 Repayment of loans and bank credits 4.26 (182,649) (285,705) Dividends paid to the shareholders of the Company 4.16.4 (300,941) (263,215) Interest paid (215,090) (194,011) Realized derivatives 4.6, 4.7 19,752 1,219 Terminated derivatives 4.7 - 126,622 Purchase of own shares - (6,671) Transaction costs connected with loan financing - (7,483) Dividends not drawn - 2,643 Other (2,510) (1,938) Net cash inflow/(outflow) from financing activities (325,362) (408,010) Net increase/(decrease) in cash and cash equivalents 229,004 124,835 Cash and cash equivalents at the beginning of the period 1.3 137,465 12,630 Cash and cash equivalents at the end of the period 1.3 366,469 137,465 * The Company has elected to present cash flows from operating activities using the indirect method. The above separate statement of cash flows should be read in conjunction with the accompanying notes. 1. SEPARATE FINANCIAL STATEMENTS C-4 Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-4 1.5. SEPARATE STATEMENT OF CHANGES IN EQUITY for the 12-month period ended 31 December 2023 and 31 December 2022 in CZK thousand. Separate statement of changes in equity Note Share capital Interest rate swaps Share based payment Own shares Retained earnings/ (Accumulated deficit) Total equity CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Balance as at 1 January 2022 1,114,597 74,556 35,385 - 354,814 1,579,352 Profit/(loss) for the period 1.1 - - - - 400,852 400,852 Other comprehensive income/(loss) 1.2 - (5,143) - - - (5,143) Total comprehensive income/(loss) for the period - (5,143) - - 400,852 395,709 Dividends 4.16.4 - - - - (251,899) (251,899) Share based payment 4.21 - - (1,508) - - (1,508) Own shares purchase 4.16.3 - - - (6,671) - (6,671) Shares transfer to share based payment participants 4.16.3 - - (6,671) 6,671 - - Transactions with owners in their capacity as owners - - (8,179) - (251,899) (260,078) Uncollected dividends - - - - 2,643 2,643 Rounding - - - - 1 1 Balance as at 31 December 2022 1,114,597 69,413 27,206 - 506,411 1,717,627 Balance as at 1 January 2023 1,114,597 69,413 27,206 - 506,411 1,717,627 Profit/(loss) for the period 1.1 - - - - 429,235 429,235 Other comprehensive income/(loss) 1.2 - (60,478) - - - (60,478) Total comprehensive income/(loss) for the period - (60,478) - - 429,235 368,757 Dividends 4.16.4 - - - - (300,941) (300,941) Share based payment 4.21 - - 158,512 - - 158,512 Transactions with owners in their capacity as owners - - 158,512 - (300,941) (142,429) Uncollected dividends - - - - 486 486 Balance as at 31 December 2023 1,114,597 8,935 185,718 - 635,191 1,944,441 The above separate statement of changes in equity should be read in conjunction with the accompanying notes. Dividend distribution The General Meeting held outside of the meeting during 4 – 19 September 2023 has approved a distribution of dividends in the amount of CZK 13.5 per share, i.e. CZK 300,941 thousand. The General Meeting held outside of the meeting during 5 – 20 September 2022 has approved a distribution of dividends in the amount of CZK 11.3 per share, i.e. CZK 251,899 thousand. 2. GENERAL INFORMATION C-5 Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-5 2. GENERAL INFORMAT ION 2.1. CORPORATE INFORMATION GENERAL INFORMATION Kofola ČeskoSlovensko a.s. (“the Company”) is a joint-stock company registered on 12 September 2012. Its registered office is Nad Porubkou 2278/31a, Ostrava, 708 00, Czech Republic and the identification number is 24261980. The Company is recorded in the Commercial Register kept by the Regional Court in Ostrava, section B, Insert No. 10735. The Company´s websites are https://www.kofola.cz/ and the phone number is +420 595 601 030. LEI: 3157005DO9L5OWHBQ359. Main area of activity of Kofola ČeskoSlovensko a.s. in 2023 was holding of the subsidiaries and providing certain services for the other companies in Kofola Group, e.g. strategic services, services related to products, shared services and holding of licences and trademarks. Kofola ČeskoSlovensko a.s. is the parent of the Kofola Group. Besides the traditional markets of the Czech Republic and Slovakia, the Group is also present in Slovenia, Croatia and in Poland. The Group produces drinks in eleven production plants and key trademarks include Kofola, Jupí, Jupík, Rajec, Radenska, Semtex energy drink, Vinea, Ondrášovka and Korunní. On selected markets, the Group distributes among others Rauch, Evian, Café Reserva and Dilmah products and under the licence produces Royal Crown Cola or Orangina. Besides traditional non-alcoholic drink segment, Group is also entering new smaller segments through the acquisition of coffee plantations and apple orchards, but with its latest acquisition of Pivovary CZ Group realized in March 2024, at is also entering the beer segment. Based on the information known to the Board of Directors of the Company acting with due care, the ultimate parent of the Company is AETOS a.s. The ownership structure is described in section 4.25.1. STOCK EXCHANGE LISTING Kofola ČeskoSlovensko a.s. is listed on Prague Stock Exchange (ticker KOFOL). MANAGEMENT As at 31 December 2023, the composition of the Board of Directors, Supervisory Board and Audit Committee was as follows: BOARD OF DIRECTORS • Janis Samaras – Chair • René Musila – Vice-Chair • Daniel Buryš – Vice-Chair • Martin Pisklák • Martin Mateáš • Marián Šefčovič SUPERVISORY BOARD • René Sommer – Chair • Tomáš Jendřejek • Moshe Cohen-Nehemia • Alexandros Samaras • Ladislav Sekerka AUDIT COMMITTEE • Zuzana Prokopcová – Chair • Petr Šobotník • Lenka Frostová 2. GENERAL INFORMATION C-6 Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-6 2.2. GROUP STRUCTURE Group structure chart as at 31 December 2023 Description of the group companies Name of entity Place of business Segment Principal activities Ownership interest and voting rights 31.12.2023 31.12.2022 Holding companies Kofola ČeskoSlovensko a.s. Czech Republic CzechoSlovakia top holding company Cafe Dorado s.r.o. Czech Republic Fresh & Herbs holding company 50.00% n/a PIVOVARY TRIANGL s.r.o. Czech Republic n/a holding company 51.00% n/a Bilgola fresh s.r.o. Czech Republic Fresh & Herbs holding company 100.00% n/a Production and trading Kofola a.s. Czech Republic CzechoSlovakia production and distribution of non-alcoholic beverages 100.00% 100.00% Kofola a.s. Slovakia CzechoSlovakia production and distribution of non-alcoholic beverages 100.00% 100.00% UGO trade s.r.o. Czech Republic Fresh & Herbs operation of Fresh bars chain, production of salads 90.00% 90.00% RADENSKA d.o.o. Slovenia Adriatic production and distribution of non-alcoholic beverages 100.00% 100.00% Studenac d.o.o. Croatia Adriatic production and distribution of non-alcoholic beverages 100.00% 100.00% Premium Rosa Sp. z o.o. Poland Fresh & Herbs production and distribution of syrups and jams 100.00% 100.00% LEROS, s.r.o. Czech Republic Fresh & Herbs production and distribution of products from medicinal plants and quality natural teas 100.00% 100.00% Leros Slovakia, s.r.o. Slovakia Fresh & Herbs distribution of products from medicinal plants and quality natural teas 100.00% 100.00% F.H.Prager s.r.o. Czech Republic CzechoSlovakia production and distribution of ciders and kombucha 100.00% 100.00% Semtex Republic s.r.o. Czech Republic CzechoSlovakia marketing activities 100.00% 100.00% Zahradní OLLA s.r.o.* Czech Republic n/a production and distribution of self-watering clay pots 34.00% n/a FILIP REAL a.s. Czech Republic n/a hotel operation 100.00% n/a Bylinkárna s.r.o. Czech Republic Fresh & Herbs products completion and packaging 100.00% 100.00% General Plastic, a. s. Slovakia CzechoSlovakia production of hot-washed PET flakes and PET preforms 33.33% n/a AGRITROPICAL S.A.S. Colombia n/a coffee plantations 25.00% n/a Transportation SANTA-TRANS s.r.o. Czech Republic CzechoSlovakia road cargo transport 100.00% 100.00% * Established in Jun 2023. ** Acquired in Sep 2023. *** Established in Nov 2023. Acquired in May 2023. Acquired in Dec 2023. Effective share of Kofola Group in UGO trade s.r.o. is 100% after the acquisition of Bilgola fresh s.r.o. in Dec 2023. 3. MATERIAL ACCOUNTING POLICIES C-7 Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-7 3. MATERIAL ACCOUNT ING POLICIES 3.1. STATEMENT OF COMPLIANCE AND BASIS OF PREPARATION BASIS OF PREPARATION The separate financial statements have been prepared in accordance with the laws binding in the Czech Republic and with International Financial Reporting Standards (“IFRS Accounting Standards”), as well as the interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”) adopted by the European Union, published and effective for reporting periods beginning 1 January 2023. The separate financial statements have been prepared on a going concern basis and in accordance with the historical cost method, except for financial assets and liabilities measured at fair value, employee share-based payments measured at grant date fair value and contingent consideration relating to business combinations at fair value. The separate financial statements include the separate statement of the financial position, separate statement of profit or loss, separate statement of other comprehensive income, separate statement of changes in equity, separate statement of cash flows and explanatory notes. The separate financial statements cover the year ended 31 December 2023 and contain comparatives for the year ended 31 December 2022. The separate financial statements are presented in Czech crowns (“CZK”), and all values, unless stated otherwise, are presented in CZK thousand. The preparation of financial statements in conformity with IFRS Accounting Standards requires the use of certain critical accounting estimates. It also requires that management exercises its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the separate financial statements are disclosed in section 3.6. 3.2. FUNCTIONAL AND PRESENTATION CURRENCY The separate financial statements are presented in Czech crowns (CZK), which is the Company´s functional and presentation currency. 3.3. FOREIGN CURRENCY TRANSLATION Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Monetary assets and liabilities expressed as at the balance sheet date in foreign currencies are translated using the closing exchange rate announced by the Czech National Bank for the end of the reporting period, and all foreign exchange gains or losses are recognized in profit or loss under: • operating income and expense – for trading operations, • finance income and costs – for financial operations. Non-monetary assets and liabilities carried at historical cost expressed in a foreign currency are stated at the historical exchange rate as at the date of the transaction. Non-monetary assets and liabilities carried at fair value expressed in a foreign currency are translated at the exchange rate as at the date on which they were remeasured to the fair value. Foreign exchange gains and losses recognized in profit or loss are offset. 3. MATERIAL ACCOUNTING POLICIES C-8 Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-8 The following exchange rates were used for the preparation of the financial statements: Closing exchange rates 31.12.2023 31.12.2022 CZK/EUR 24.725 24.115 CZK/PLN 5.694 5.152 CZK/HRK n/a 3.200 Average exchange rates 1.1.2023 - 31.12.2023 1.1.2022 - 31.12.2022 CZK/EUR 24.007 24.565 CZK/PLN 5.290 5.245 CZK/HRK n/a 3.260 3.4. ACCOUNTING METHODS 3.4.1 PROPERTY, PLANT AND EQUIPMENT Items of property, plant and equipment are stated at cost less accumulated depreciation and less any impairment losses. Items acquired in a business combination are measured at their acquisition-date fair values. The costs of non-current assets consist of their acquisition price plus all costs directly associated with the asset’s acquisition and adaptation for use. The costs also include the cost of replacing parts of machines and equipment as they are incurred, if the recognition criteria are met. Costs incurred after the asset is given over for use, such as maintenance and repairs, are charged to the income statement as they are incurred. If circumstances occurred during the preparation of the financial statements indicating that the carrying value of item of property, plant and equipment may not be recoverable, the said asset is tested for impairment. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). If there are indications that impairment might have occurred, and the balance sheet value exceeds the estimated recoverable amount, then the value of those assets or cash generating units to which the assets belong is reduced to the value of the recoverable amount. The recoverable value corresponds to the higher of the following two values: the fair value less costs of disposal, or the value in use. When determining value in use, the estimated future cash flows are discounted to the present value using a post-tax discount rate reflecting the current market assessments of the time value of money and the risk associated with the given asset component. If the asset component does not generate income sufficiently independently, the recoverable amount is determined for the cash generating unit to which the asset belongs. Impairment write downs are recognised in the income statement under other operating costs or in the separate row if material. A given tangible non-current asset is derecognised from the balance sheet when it is sold or if no economic benefits are anticipated from its continued use. All profits and losses arising from the derecognition (calculated as the difference between the potential proceeds from the sale and the balance sheet value of a given item) are recognised in the income statement in the period in which the derecognition was performed. Assets under construction consist of non-current assets that are being constructed or assembled and are stated at acquisition price or cost of production. Non-current assets under construction are not depreciated until the construction is completed and the assets given over for use. The balance sheet value, the useful life and the depreciation method of non-current assets are verified, and if need to be adjusted, at the end of each financial year. Items of income and expense related to sold property, plant and equipment are offset. Depreciation Items of property, plant and equipment, or their significant and separate components, are depreciated using the straight-line method to allocate their costs to their residual values over their economic useful lives. Land is not depreciated. The Company assumes the following economic useful lives for the following categories of non-current assets: 3. MATERIAL ACCOUNTING POLICIES C-9 Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-9 Asset category Useful life Buildings and constructions 20 – 40 years Technical improvement on leased property 10 years in average Plant and equipment 2 – 15 years Vehicles 4 – 6 years 3.4.2 LEASES At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. As a lessee At commencement or on modification of a contract that contains a lease component, the Company allocates the consideration on the contract to each lease component on the basis of its relative stand-alone prices. The Company recognises a right-of-use asset (RoUA) and a lease liability at the lease commencement date. The RoUA is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The RoUA is subsequently depreciated under the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of the RoUA reflects that the Company will exercise a purchase option. In that case the RoUA will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property, plant and equipment. In addition, the RoUA is periodically reduced by the impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, the Company uses interest rate implicit in the lease for the vehicle leases and its incremental borrowing rate for other leases. Lease payments included in the measurement of the lease liability comprise the following: • fixed payments, including in-substance fixed payments, • variable lease payment that depend on an index or a rate, initially measured using the index or rate as at the commencement date, • amounts expected to be payable under residual value guarantee, • the exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early. The lease liability is measured at amortised cost under the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the RoUA, or is recorded in profit or loss if the carrying amount of the RoUA has been reduced to nil. The Company presents RoUA that do not meet a definition of investment property in Property, plant and equipment and lease liabilities on separate rows in the statement of financial position. The Company leases mainly the head office administrative building and vehicles. Rental contracts are typically made for fixed periods of 1 to 10 years but may have extension options. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. 3. MATERIAL ACCOUNTING POLICIES C-10 Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-10 Short-term leases and leases of low-value assets The Company has elected not to recognise RoUA and lease liabilities for leases of low-value assets and short-term leases, including IT equipment. The Company recognises the lease paymets associated with the leases as an expense on a straight-line basis over the lease term. 3.4.3 GOODWILL Goodwill is carried at cost less accumulated impairment losses, if any. The Company tests goodwill for impairment at least annually and whenever there are indications that goodwill may be impaired. Goodwill is allocated to the cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the business combination. Such units or groups of units represent the lowest level at which the Company monitors goodwill and are not larger than an operating segment. Any impairment of goodwill cannot be subsequently reversed. Gains or losses on disposal of an operation within a cash generating unit to which goodwill has been allocated include the carrying amount of goodwill associated with the disposed operation, generally measured on the basis of the relative values of the disposed operation and the portion of the cash-generating unit which is retained. 3.4.4 INTANGIBLE ASSETS Intangible assets acquired in a separate transaction are initially stated at acquisition price or production costs. The acquisition price of intangible assets acquired in a business combination is equal to their fair value as at the date of the combination. After their initial recognition, intangible assets are stated at their historical price or production costs less accumulated amortisation and impairment write downs. Expenditures on internal research and development, except for capitalised development costs of identifiable intangible assets, are not capitalised and are recognised in the income statement of the period in which they were incurred. The Company determines whether the economic useful life of an intangible asset is finite or indefinite. A significant part of the Company's intangible assets constitute trademarks, for most of them, the Company has determined that they have an indefinite useful life. The Company is the owner of some of the leading trademarks in non-alcoholic beverages in Central Europe. As a result, these trademarks are generating positive cash flows and the Company owns the trademarks for the long term. The Board considered several factors and circumstances in concluding that these trademarks have indefinite useful lives, such as size, diversification and market share of each trademark, the trademark's past performance, long-term development strategy, any laws or other local regulations which may affect the life of the assets and other economic factors, including the impact of competition and market conditions. The Company’s management expects that it will hold and promote trademarks for an indefinite period through marketing and promotional support. The trademarks with indefinite useful lives are tested for impairment at least annually. The Company has reassessed useful lives of assets with indefinite useful life and concluded that current events and circumstances continue to support an indefinite useful life assessment. Intangible assets with finite useful lives are amortised over the useful economic life and assessed for impairment whenever there are impairment indicators. Useful life and method of amortisation of intangible assets with finite lives are reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of the future economic benefits embodied in the asset are accounted for by changing the amortisation period or method, and treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the income statement in the expense category consistent with the function of the intangible asset. Intangible assets with finite useful lives are assessed for impairment whenever there are impairment indicators. Intangible assets are amortised using the straight-line method over their useful lives: Asset category Useful life Software licences 3 – 16 years Computer software 3 – 6 years Other licences 5 – 7 years Valuable rights 5 – 10 years 3.4.5 INVESTMENTS IN SUBSIDIARIES The Company accounts for investments in subsidiaries at cost. 3. MATERIAL ACCOUNTING POLICIES C-11 Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-11 3.4.6 INVESTMENTS IN EQUITY ACCOUNTED INVESTEES Associates are all entities over which the Company has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Joint venture or Joint operation is an investment where the Company has a joint control over the investment. Equity accounted investees are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognized at cost, and the carrying amount is increased or decreased to recognize the investor’s share of the net assets of the investee after the date of acquisition. The Company’s investment in equity accounted investees includes goodwill identified on acquisition. If the ownership interest is reduced but significant influence is retained, only a proportionate share of the amounts previously recognized in other comprehensive income is reclassified to profit or loss where appropriate. The Companys’s share of post-acquisition profit or loss is recognized in profit or loss and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the Company’s share of losses in an investment equals or exceeds its interest in the investment, including any other unsecured receivables, the Company does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the investment. The foreign investments are retranslated using foreign exchange rate valid at the balance sheet date and any resulting difference is recognised in Other comprehensive income. The Company determines as at each reporting date whether there is any objective evidence that the investment is impaired. If this is the case, the Company calculates the amount of impairment as the difference between the recoverable amount of the investment and its carrying value and recognises the amount adjacent to share of profit/(loss) of investment in the income statement. 3.4.7 RECOVERABLE VALUE OF NON-FINANCIAL ASSETS The Company evaluates its assets whether indicators of impairment are present as at each balance sheet date. For goodwill and indefinite life intangible assets, the Company performs a formal estimate of the recoverable amount annually, for remaining assets the estimate is performed in case of presence of impairment indicators. If the carrying value of a given asset or cash-generating unit exceeds its recoverable amount, it is considered impaired and written down to its recoverable amount. The recoverable amount corresponds to the higher of the following two values: the fair value less costs of disposal, or the value in use of a given asset or cash generating unit. The impairment loss recognised, except for impairment of goodwill, may be reversed in future periods if the asset’s value recovers. If there is any indication that an asset may be impaired, recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount is determined for the cash-generating unit to which the asset belongs. If there isn’t any such cash-generating unit, as a CGU is considered the whole entity and any impairment loss is allocated to the Company’s assets respecting the IFRS Accounting Standards requirements on order of the impairment loss allocation. 3.4.8 FINANCIAL INSTRUMENTS Financial instrument is any formal agreement that gives rise to a financial asset of one entity, and a financial liability or equity instrument of another entity. 3. MATERIAL ACCOUNTING POLICIES C-12 Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-12 The most significant assets that are subject to the financial instruments accounting policies are: • loan receivables, • derivative instruments (swap contracts), • trade receivables, • other financial receivables, • dividend receivables, • cash. The most significant liabilities that are subject to the financial instruments accounting policies: • loan payables, • derivative instruments (swap contracts), • trade payables, • contingent/deferred consideration liabilities, • lease liabilities. The Company’s financial assets/liabilities are classified to the following categories: • measured at amortized costs, • fair value through other comprehensive income (FVTOCI), and • fair value through profit and loss (FVTPL). Classification is based on the nature of the assets/liabilities and management intention. The Company classifies its assets/liabilities at their initial recognition. Financial assets/liabilities Financial assets are initially recognised at fair value, except for trade receivables which are initially recognised based on IFRS 15 transaction price. Their initial valuation is increased by transaction costs, with the exception of financial assets stated at fair value through profit or loss. The transaction costs payable in case of a possible disposal of the asset are not deducted from subsequent measurement of financial assets. The asset is recognised in the balance sheet when the Company becomes a party to the agreement (contract), out of which the financial asset arises. Financial liabilities are initially recognised at fair value. Transaction costs are deducted from the amount at initial recognition, except for financial liabilities at fair value through the profit or loss. The transaction costs payable upon a transfer of a financial liability are not added to the subsequent valuation of financial liabilities. The financial liabilities are recognised in the balance sheet when the Company becomes a party to the agreement, out of which the financial liability arises. Financial assets/liabilities measured at amortized costs Financial assets measured at amortized costs include primarily loans, trade receivables, dividend receivables, bank deposits, bonds and other cash funds. Depending on their maturity date, they are included in non-current assets (assets due in more than 1 year after the end of the reporting period) or current assets (assets due within 1 year after the end of the reporting period). The assets included in this category are stated at amortised cost using the effective interest method. Financial liabilities include primarily trade payables, leases and loans. The liabilities included in this category are stated at amortised cost using the effective interest method. The Company classifies its financial assets as at amortised cost only if both of the following criteria are met: • the asset/liability is held within a business model whose objective is to collect the contractual cash flows, and • the contractual terms give rise to cash flows that are solely payments of principal and interest. Financial assets/liabilities measured at fair value through other comprehensive income Except for interest rate swaps for which the hedge accounting is applied, the Company doesn’t have any other assets/liabilities measured at fair value through other comprehensive income. Derivative financial instruments and hedge accounting This category includes derivative instruments in the Company’s balance sheet. The Company holds derivative financial instruments to hedge its interest rate risk exposures. Financial assets/liabilities within this category serve for the hedging of 3. MATERIAL ACCOUNTING POLICIES C-13 Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-13 risks associated with the cash flows of recognised assets and liabilities and highly probable forecast transactions (cash flow hedges) and are presented within other receivables/other payables. At the inception of the hedging relationship, there is a formal designation and documentation of the hedging relationship and the Company’s risk management objective and strategy for undertaking the hedge. The Company also documents the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period through other comprehensive income. The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in the cash flow hedge reserve within equity. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss, within finance income/costs. Amount accumulated in the hedging reserve and the cost of hedging reserve are reclassified to profit or loss in the same period or periods during which the hedged expected future cash flows affect profit or loss. The fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 1 year after the end of the reporting period. When the financial asset/liability is derecognized, the cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss. Financial assets/liabilities measured at fair value through profit or loss This category in general includes two groups of assets: financial assets held for trading and financial assets designated initially at fair value through profit or loss. A financial asset is included in the held for trading category if it was acquired in order to be sold in the near term, or if it is part of a portfolio in which a pattern or short-term trading exists, or if it is a derivative instrument with a positive fair value and not designated for hedges. Assets classified as financial assets designated at fair value through profit or loss are stated as at each reporting date at fair value, and all gains or losses are recognised as financial income or costs. Derivative financial instruments are stated at fair value as at the balance sheet date and as at the end of each reporting period based on valuations performed by the banks realising the transactions which are accepted by the management. Other financial assets designated at fair value through profit or loss are valued using stock exchange prices, and in their absence, using appropriate valuation techniques, such as: the use of the prices in recent transactions, comparisons with similar instruments, option valuation models. The fair value of debt instruments represents primarily future cash flows discounted at the current market interest rate applicable to similar instruments. This category includes two groups of liabilities: financial liabilities held for trading and financial liabilities designated at fair value through profit or loss. Financial liabilities held for trading are liabilities that: have been issued primarily to be transferred or repurchased in near term or are a component of a portfolio of financial instruments that are managed together with a purpose of generating a profit from short-term fluctuations in price or trader’s margin or constitute derivative instruments. Financial liabilities at fair value through profit or loss are measured at their fair value at the end of each reporting period, and all gains or losses are recognised as finance income or costs. Derivative instruments are measured at fair value at the end of each reporting period based on valuations performed by the banks realising the transactions which are accepted by the management. The fair value of debt instruments represents future cash flows discounted at the current market interest rate applicable to similar instruments. Impairment of financial assets The Company recognises a loss allowance for expected credit losses (ECL) on financial assets that are measured at amortized costs. For trade receivables, the Company measures loss allowances at an amount equal to lifetime ECLs. For other financial assets the Company measures loss allowances at amount equal to either 12-month ECL or lifetime ECL (when the credit risk of an asset has increased significantly). When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue 3. MATERIAL ACCOUNTING POLICIES C-14 Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-14 cost or effort (mainly historical experience, credit assessment, current and forward-looking information available to the management). The Company assumes that the credit risk on financial assets has increased significantly if it is more than 90 days past due. The Company considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions such as realising security (if any is held). Lifetime expected credit losses are those that result from all possible default events over the expected life of a financial instrument. 12-month expected credit losses constitute the portion of lifetime expected credit losses that represents the expected credit losses that result from default events on a financial instrument that are possible within the 12 months after the reporting date. The Company considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of investment grade. The Company considers this to be Ba1 or higher per rating of agency Moody's. The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk. ECLs are a probability-weighted estimates of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Company expects to receive). ECLs are discounted at the effective interest rate of the financial asset. Derecognition of financial assets/liabilities The Company derecognises financial assets when (a) the assets are redeemed or the rights to cash flows from the assets otherwise expired or (b) the Company has transferred the rights to the cash flows from the financial assets or entered into a qualifying pass-through arrangement while (i) also transferring substantially all risks and rewards of ownership of the assets or (ii) neither transferring nor retaining substantially all risks and rewards of ownership but not retaining control. Control is retained if the counterparty does not have the practical ability to sell the asset in its entirety to an unrelated third party without needing to impose additional restrictions on the sale. The Company derecognises financial liability (or part of a financial liability) when it extinguishes, i.e. when the obligation is discharged, cancelled or expires. The difference between the carrying amount of a financial liability (or part of a financial liability) extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. Offsetting Financial assets and liabilities are offset and the net amount reported in the statement of financial position only when there is a legally enforceable right to offset the recognised amounts, and there is an intention to either settle on a net basis, or to realise the asset and settle the liability simultaneously. However, the offsetting is not possible if it cannot be legally enforced in the normal course of business, in the event of default or in the event of insolvency or bankruptcy of the entity or any of the counterparties. 3.4.9 TRADE AND OTHER RECEIVABLES Trade and other financial receivables are carried at amortised cost (i.e. present value discounted using the effective interest rate) net of impairment write downs. In cases when the effect of the time value of money is significant, the carrying value of a receivable is determined by discounting the expected future cash flows to the present value, using a discount rate that reflects the current market assessments of the time value of money. Unwinding of the effects of discounting increasing the receivable is recorded as finance income. An impairment loss is recognised in profit or loss at the difference between an asset´s carrying amount and the present value of the estimated cash flows discounted at the asset´s original effective interest rate. For the measurement of loss allowance for financial assets refer to section 3.4.8. 3. MATERIAL ACCOUNTING POLICIES C-15 Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-15 Non-financial receivables are assessed at each reporting date to determine whether there is objective evidence of impairment. Such evidence includes: • significant financial difficulties of the debtor, • probability that the debtor will enter bankruptcy or financial reorganisation, • default or delinquency by the debtor. 3.4.10 CASH AND CASH EQUIVALENTS Cash and cash equivalents include cash at bank and in hand, as well as highly liquid investments that can be readily convertible to known amount of cash and are subject to insignificant changes in the value. The balance of cash and cash equivalents presented in the separate statement of cash flows consists of cash at bank and in hand, as well as short-term deposits with original maturity up to 3 months. 3.4.11 EQUITY Equity is classified by category and in accordance with binding legal regulations and the Company’s Statute. Share capital is carried at the amount stated in the Statute and in the National Court Register. Declared but unpaid capital contributions are recorded as unpaid share capital. Treasury shares and unpaid share capital are deducted from the Company’s equity. Other elements of equity are: Other reserves (reserve from IRS and Share based payment) and Retained earnings. Own shares acquired for cancellation, in accordance with the provisions of the Business Corporation Act, are recorded at cost as a negative amount as a separate component of equity. Retained earnings/Accumulated deficit consist of accumulated profits or uncovered losses from previous years and the profit/loss for the period. Dividends are recognised as liabilities in the period in which they were approved. 3.4.12 INTEREST-BEARING BANK CREDITS AND LOANS At initial recognition, all bank credits and loans are recorded at their fair value, which corresponds to the received cash funds, less the costs of obtaining the credit or loan. After their initial recognition, interest bearing credits and loans are stated at amortised cost by applying the effective interest rate method. Amortised cost is determined by taking into account the costs of obtaining the credit or loan, as well as discounts and bonuses received or settlement fees charged at the settlement of the liability. 3.4.13 TRADE LIABILITIES AND OTHER LIABILITIES Financial liabilities constitute a current obligation arising out of past events, the fulfilment of which is expected to result in an outflow of cash or other financial assets. Financial liabilities other than financial liabilities stated at fair value through profit or loss are measured at amortised cost (i.e. discounted using the effective interest rate). Exchange rate differences resulting from the balance sheet remeasurement of trade payables are recognised in cost of sales. Non-financial current liabilities are measured at amounts due. 3.4.14 PROVISIONS Provisions are created when the Company has a present obligation (legal or constructive) arising out of past events, and when it is likely that the fulfilment of this obligation will result in an outflow of economic benefits, and when the amount of the obligation can be reliably measured. If the Company has a right to be reimbursed for the costs covered by the provision, 3. MATERIAL ACCOUNTING POLICIES C-16 Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-16 for example based on an insurance policy, then the reimbursement is recognised as a separate asset, but only if it is virtually certain that the reimbursement will be received. The costs relating to a given provision are presented in the income statement net of any reimbursements. If the time value of money is material, the carrying amount of the provision is determined by discounting the forecasted future cash flows to their present values using a pre-tax discount rate reflecting the current market assessments of the time value of money and any risks associated with the given obligation. Subsequent increases of the provision due to unwinding of discount are presented as interest expense. 3.4.15 EMPLOYEE BENEFITS Share based payment The grant-date fair value of equity-settled share-based payment arrangements granted to employees is generally recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes of such/these conditions. The fair value of shares granted is based on the stock market share price as of the grant date that was adjusted for the expected fulfilment of non-vesting conditions and market conditions, expected dividend payments and shares restrictions. In terms of non-vesting conditions, it is expected that all participants will fulfil the set administrative tasks and also period of holding the shares after their acquisition. In terms of Pair shares, new share based payments program participants are expected to utilize the annual gross salary limit in 75%. Participants from the previous share based payments program that are also participants in this share based payments program are expected to utilize the annual gross salary limit in 100%. Market condition is represented mainly by the expected share price on Prague Stock Exchange. The projection of the share price was determined using the Monte Carlo simulation that is based on historical data (starting from June 2018) from which the average growth rate as well as standard deviation are determined. These, together with the random input from normal distribution, serve as a base for the projection of share price development in particular future months. Expected dividends were for the purpose of valuation determined in line with the historical resolutions. And due to existing time limitations on sale, the fair value was decreased by approximately 15% which is a discount rate reflecting the overall market restriction discounts, Group’s market capitalization, industry and shares holding period. Equity-settled share-based payments granted by the Company to the employees of its subsidiaries are recognized in equity with a corresponding increase of the investments in the subsidiary. Share based payment Plan 2021 - 2026 In the year 2021, the Company introduced a new program for long-term remuneration of senior managers of the Group. By entering into agreement on participation in the Program, the participants are entitled to acquire Kofola shares free of charge, subject the fulfilment of set conditions. The new Share based payment Plan is based on the ended Share based payment Plan for years 2017 - 2019 and enhances the dependence of the eligibility to Kofola shares on the Group results. The new Share based payment Plan has been approved for the period to 31 December 2026. The Plan consists of two separate, though complementary plans: 1) Share Acquisition Plan granting the participants the opportunity to buy Kofola shares on the market (Investment Shares) and to acquire the corresponding number of Kofola Pair Shares free of charge under defined conditions. The maximal number of eligible Investment Shares cannot exceed the specified limit corresponding to the number of shares which can be purchased on the regulated market for 40% of the basic annual gross salary/remuneration the participant is entitled to under contract(s) concluded with Kofola Group companies in the corresponding calendar year (i. e. from January 1, 2021 to December 31, 2021, from January 1, 2022 to December 31, 2022, from January 1, 2023 to December 31, 2023, from January 1, 2024 to December 31, 2024, from January 1, 2025 to December 31, 2025 and from January 1, 2026 to December 31, 2026). The calculation of the Limit of Investment Shares is based on the average price of Kofola shares on the regulated market. Under the Share Acquisition Plan, there are two vesting periods (2021 – 2023 and 2021 – 2026). To be eligible for the acquisition of Pair Shares, they must be employed with any of Kofola Group companies or be a member of any of Kofola Group companies’ bodies throughout the entire vesting period, and at the same time, Kofola Group Equity Value (EBITDA multiple decreased by the Net debt) must not be lower than in the previous calendar year. Provided that the set conditions are met, pair shares will be transferred to the participants gradually up until 2029. The participant must hold the Investment 3. MATERIAL ACCOUNTING POLICIES C-17 Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-17 Shares for a set minimum period (two years following the end of the calendar year that served as reference for the yearly limit). Participants are obliged to hold the Pair Shares at least until 31 January of the calendar year following the calendar year in which they were transferred to the participant. 2) Performance Shares Plan providing the participant the opportunity to acquire a predetermined amount of Kofola shares (Performance Shares) free of charge provided that Kofola Group has met performance targets. The period relevant for the Performance Shares Plan starts on 1 January 2021 and terminates on 31 December 2026. The total amount of Performance Shares to be distributed among the participants is composed of two parts. The first part depends on the price of Kofola shares as of 31 December 2026 and the related market capitalization on the regulated market; the second part depends on the Equity Value of Kofola Group as of the last day of the relevant period. To be eligible for the acquisition of Performance Shares, the participant must be employed with any of Kofola Group companies or to be a member of any of Kofola Group companies’ bodies from the start of the participant’s participation in the Plan to the end of the relevant period provided that they participated in the Program for at least three years (with an exception set in the conditions of the Plan) and must hold Kofola shares of the set minimal value equal to the yearly basic gross wage/remuneration (or the double of yearly basic gross wage/remuneration) of the participant in the last complete calendar year the participant complied with the condition of employment or membership in any of Kofola Group companies and their bodies. Performance Shares will be transferred to participants eligible under the conditions of the Plan by 31 May 2027. Participants are obliged to hold 50% of the Performance Shares at least until 31 January 2028. 3.4.16 PERFORMANCE OBLIGATIONS AND REVENUE RECOGNITION POLICIES Revenue is recognised at the amount of the transaction price (which excludes estimates of variable consideration), and when the amount of revenue can be measured reliably. Revenue is measured excluding value added tax (VAT), excise tax and rebates (discounts, bonuses and other price reductions, i.e. possible price reductions assumed by the management). The amount of revenue is measured at the fair value of the consideration received or receivable. Revenue is stated at net present value when the effect of the time value of money is material (in case of payment after 360 days, such transactions contain a significant financing component). If revenue is measured at discounted amount, the discount is recognised using the effective interest method as an increase in receivables, and as financial income in profit or loss. Foreign exchange rate differences resulting from the realisation or the remeasurement of trade receivables are recognised in profit or loss. Revenue is also recognised in accordance with the criteria specified below. Recognition, measurement, presentation or disclosure of Company's revenue doesn't bear any significant judgements or assumptions. Company's transactions are rather clear. Provision of services Revenue from the provision of services is recognised when the service was performed with reference to the percentage of completion of the service obligation. Interest Interest income is recognised gradually using the effective interest method. Dividends Dividends are recognised once the shareholders’ right to receive them is established. 3.4.17 GOVERNMENT GRANTS The Company recognises government grants once there is a reasonable assurance that the subsidy will be received and that all of the related conditions will be complied with. Both of the above criteria must be met for a government subsidy to be recognised. The Company may be entitled to claim special tax deductions for investments in qualifying assets or in relation to qualifying expenditure. The Company accounts for such allowances as tax credits, reducing the income tax payable and current tax expense. A deferred tax asset is recognised for unclaimed tax credits. 3. MATERIAL ACCOUNTING POLICIES C-18 Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-18 3.4.18 INCOME TAX The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted as at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. Liabilities are recorded for income tax positions that are determined by management as more likely than not to result in additional taxes being levied if the positions were to be challenged by tax authorities. Deferred income tax is recognised, using the balance sheet liability method, on tax loss carry forwards and temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the separate financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted at the balance sheet date and are expected to apply when the temporary differences will reverse or the tax loss carry forwards will be utilised. Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred income tax is provided on temporary differences arising on investments in subsidiaries, joint ventures and equity accounted investees and associates, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. 3.4.19 EARNINGS PER SHARE Basic earnings per share are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year excluding ordinary shares purchased by the Company and held as treasury shares. The diluted earnings per share ratio is calculated by dividing the profit/(loss) for the period attributable to ordinary shareholders (after deducting the interest on redeemable preferred shares convertible to ordinary shares) by the weighted average number of ordinary shares outstanding during the period (adjusted by the effect of diluting options and own shares not subject to dividends). 3.5. NEW AND AMENDED STANDARDS ADOPTED BY THE COMPANY The following standards, amendments and interpretations applied for the first time in 2023. IFRS 17 Insurance Contracts There is not any material impact on the Company’s financial statements. Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2 There is not any material impact on the Company’s financial statements. Definition of Accounting Estimates – Amendments to IAS 8 There is not any material impact on the Company’s financial statements. Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12 3. MATERIAL ACCOUNTING POLICIES C-19 Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-19 There is not any material impact on the Company’s financial statements. International Tax Reform – Pillar Two Model Rules – Amendments to IAS 12 There is not any material impact on the Company’s financial statements. 3.6. SIGNIFICANT ESTIMATES AND KEY MANAGEMENT JUDGEMENTS Since some of the information contained in the separate financial statements cannot be measured precisely, the Company´s management must perform estimates to prepare the separate financial statements. Management verifies the estimates based on changes in the factors considered at their calculation, new information or past experience. For this reason, the estimates made as at 31 December 2023 may be changed in the future. The main estimates pertain to the following matters: Estimates Type of information Section Impairment of goodwill and individual tangible and intangible assets Key assumptions used to determine the recoverable amount: Impairment indicators, used models, discount rates, growth rates. 4.11.1 Impairment of investments in subsidiaries Key assumptions used to determine the recoverable amount: Impairment indicators, used models, discount rates, growth rates. 4.12.1 Useful life of trademarks The history of the trademark on the market, market position, useful life of similar products, the stability of the market segment, competition. 3.4.4, 4.11 Income tax Assumptions used to recognise deferred income tax assets (other than Deferred tax asset from tax losses). 4.8 Share based payment Key assumptions used to determine the share based payment reserve: Expected EBITDA and Net debt as of 31-12-26. 4.21 3.7. STANDARDS ISSUED BUT NOT YET EFFECTIVE The Company has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. Forthcoming requirements Non-current Liabilities with Covenants – Amendments to IAS 1 There is not expected any material impact on the Company’s financial statements. Classification of Liabilities as Current or Non-current – Amendments to IAS 1 There is not expected any material impact on the Company’s financial statements. Lease Liability in a Sale and Leaseback – Amendments to IFRS 16 There is not expected any material impact on the Company’s financial statements. Supplier Finance Arrangements – Amendments to IAS 7 and IFRS 7 There is not expected any material impact on the Company’s financial statements. Lack of Exchangeability – Amendments to IAS 21 There is not expected any material impact on the Company’s financial statements. 3.8. APPROVAL OF SEPARATE FINANCIAL STATEMENTS The Board of Directors approved the present separate financial statements for publication on 11 April 2024. 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-20 4. NOTES TO THE SE PARATE FINA NCIAL STATEME NTS 4.1. SEGMENT INFORMATION The Board of Directors of the Company, as the chief decision maker, does not use segment results of the Company, neither in the decision-making process nor in the allocation of resources and assessment of the performance. 4.2. REVENUE Revenue streams, Timing of revenue recognition 2023 2022 CZK´000 CZK´000 Revenue from contracts with customers 588,741 480,407 - Sales of services (transferred over time) 588,741 480,407 Other revenue 332,873 422,560 - Dividend income (transferred at a point in time) 332,873 422,560 Total revenue 921,614 902,967 Revenue from sales of services increased due to higher invoicing of brand fees and group services. Dividend income decreased mainly due to lower dividend from Kofola a.s. (CZ). Revenue from contracts with customers is represented mostly by revenue from shared services and brand fees. Loss allowances on receivables arising from contracts with customers are presented in section 4.14. Company doesn’t have any material contract assets, contract liabilities or performance obligations satisfied (or partially satisfied) in previous periods. 4.3. EXPENSES BY NATURE Expenses by nature 2023 2022 CZK´000 CZK´000 Depreciation of Property, plant and equipment and amortisation of Intangible assets 49,823 47,218 Employee benefits expenses (i) 423,015 264,626 Consumption of materials and energy 9,143 11,278 Services 115,738 96,615 Rental costs 2,281 1,868 Taxes and fees 1,017 859 Insurance costs 1,987 2,140 Change in allowance to receivables 400 (2,400) Other costs 125 819 Total expenses by nature 603,529 423,023 Cost of sales 31,798 29,729 Selling, marketing and distribution costs 195,149 170,924 Administrative costs 376,582 222,370 Total costs of products sold, merchandise and materials, sales costs and administrative costs 603,529 423,023 * Excluding Other operating expenses and Impairment. Employee benefits expenses increased mainly due to revaluation of the share based payment reserve (mainly due to increase of expected Equity Value (EBITDA multiple decreased by the Net debt) as of 31-12-26), but also due to higher wages and employee bonuses which were influenced by positive results. Services increased mainly due to higher marketing expenses. (i) Employee benefits expenses Employee benefits expenses 2023 2022 CZK´000 CZK´000 Salaries (excl. share based payment) 229,901 198,979 Share based payment 99,204 (1,142) Social security and other benefit costs (including healthcare insurance) 52,380 29,800 Pension benefit plan expenses 41,530 36,989 Total employee benefits expenses 423,015 264,626 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-21 4.4. OTHER OPERATING INCOME Other operating income 2023 2022 CZK´000 CZK´000 Net gain from the sale of PPE and Intangible assets 396 2 Subsidies - 62 Compensation claims 31 492 Tax return - 523 Loss allowance write-back 50,002 - Other 1,434 1,426 Total other operating income 51,863 2,505 The loss allowance write-back represents the release of the loss allowance to loan receivable from Premium Rosa. The loan provided to Premium Rosa was partially repaid which is connected with the sale of Grodzisk Wielkopolski plant. 4.5. OTHER OPERATING EXPENSES Other operating expenses 2023 2022 CZK´000 CZK´000 Provided donations, sponsorship 2,039 1,773 Advisory services 5,296 1,342 Restructuring costs - 1,716 Impairment of Property, plant and equipment 226 - Loss allowance write-off - 39,255 Other 466 516 Total other operating expenses 8,027 44,602 * mainly payroll expenses In 2022, the loss allowance write-off represented the creation of the loss allowance to loan receivable from Premium Rosa. 4.6. FINANCE INCOME Finance income 2023 2022 CZK´000 CZK´000 Interest from: – credits and loans granted 39,237 40,817 – purchased bonds 4,016 4,096 Exchange gains - 10,281 Realized derivatives (new derivatives in EUR) 19,752 - Realized derivatives (original derivatives in CZK) - 16,116 Gain on derivatives termination (original derivatives in CZK) - 126,622 Other - 64 Total finance income 63,005 197,996 The Company sold original derivatives in CZK in June 2022 as a part of refinancing. 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-22 4.7. FINANCE COSTS Finance costs 2023 2022 CZK´000 CZK´000 Interest from: – credits and loans granted 218,897 195,844 – lease 1,162 847 – other 149 163 Exchange losses 23,235 - Bank costs and charges 4,937 4,139 Realized derivatives (new derivatives in EUR) - 14,897 Total finance costs 248,380 215,890 FX losses arose mainly from Company’s EUR bank credits and loans. 4.8. INCOME TAX 4.8.1 INCOME TAX RECOGNISED IN PROFIT OR LOSS Main income tax elements for the twelve-month period ended 31 December 2023 and 31 December 2022 were as follows: Income tax 2023 2022 CZK´000 CZK´000 Current income tax expense 17,722 3,019 Current income tax on profits for the year 17,722 3,019 Deferred income tax expense/(benefit) (31,958) 16,082 Related to arising and reversing of temporary differences other than tax losses (31,958) 2,855 Related to tax losses - 13,227 Income tax expense/(benefit) (14,236) 19,101 The income tax rate applicable to the Company in 2023 and 2022 income is 19%. Deferred income tax benefit was influenced mainly by the deferred tax asset from share based payment. 4.8.2 INCOME TAX RECOGNISED DIRECTLY IN EQUITY Income tax elements for the twelve-month period ended 31 December 2023 and 31 December 2022 were as follows: Movement of income tax recognised directly in equity 2023 2022 CZK´000 CZK´000 Deferred income tax (13,906) (1,207) Tax from Cash flow hedges (13,906) (1,207) Movement of income tax recognised directly in equity (13,906) (1,207) 4.8.3 EFFECTIVE TAX RECONCILIATION Effective tax 2023 2022 CZK´000 CZK´000 Profit/(loss) before income tax 414,999 419,953 Tax at the rate of 19% valid in the Czech Republic (78,850) (79,791) Tax effect of: Non-deductible expenses (25,416) (29,451) Non-taxable income 118,502 80,647 Previously unrecognized deferred tax asset/liability - 9,494 Income tax (expense)/benefit 14,236 (19,101) Effective tax rate (3.4%) 4.5% * mainly from dividends, release of impairment and write-back of loss allowance 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-23 4.8.4 DEFERRED TAX ASSETS AND LIABILITIES Deferred tax assets and liabilities 31.12.2023 Deferred tax assets Deferred tax liabilities Net amount CZK´000 CZK´000 CZK´000 Temporary differences attributable to: Property, plant and equipment and Intangible assets - (45,066) (45,066) Provisions and payables 17,231 - 17,231 Deferred tax from Cash flow hedges - (2,376) (2,376) Share based payment 27,574 - 27,574 Deferred tax assets/(liabilities) 44,805 (47,442) (2,637) Presentation offsetting (44,805) 44,805 - Deferred tax assets/(liabilities) - (2,637) (2,637) Deferred tax balances as of 31.12.2023 are determined using the tax rate of 21% that is valid from 1.1.2024. Deferred tax assets and liabilities 31.12.2022 Deferred tax assets Deferred tax liabilities Net amount CZK´000 CZK´000 CZK´000 Temporary differences attributable to: Property, plant and equipment and Intangible assets - (42,632) (42,632) Provisions and payables 8,064 - 8,064 Deferred tax from Cash flow hedges - (16,282) (16,282) Share based payment 2,348 - 2,348 Deferred tax assets/(liabilities) 10,412 (58,914) (48,502) Presentation offsetting (10,412) 10,412 - Deferred tax assets/(liabilities) - (48,502) (48,502) 4.9. EARNINGS PER SHARE The basic earnings per share ratio is calculated by dividing the profit/(loss) for the period attributable to owners of Kofola ČeskoSlovensko a.s. by the weighted average number of ordinary shares outstanding during the period. The diluted earnings per share ratio is calculated by dividing the profit/(loss) for the period attributable to ordinary shareholders (after deducting the interest on redeemable preferred shares convertible to ordinary shares) by the weighted average number of ordinary shares outstanding during the period (adjusted by the effect of diluting options and own shares not subject to dividends). The diluted earnings per share ratio is not applicable to the Company because it didn’t issue any of above-mentioned financial instruments. Information used to calculate basic earnings per share is presented below: Weighted average number of ordinary shares 2023 2022 pcs pcs Total number of ordinary shares issued by the Company 22,291,948 22,291,948 Effect of own shares - (124) Weighted average number of ordinary shares used to calculate basic earnings per share 22,291,948 22,291,824 Based on the above information, the basic earnings per share amounts to: Basic earnings per share 2023 2022 Profit/(loss) for the period attributable to owners of Kofola ČeskoSlovensko a.s. (CZK´000) 429,235 400,852 Weighted average number of ordinary shares used to calculate basic earnings per share (pcs) 22,291,948 22,291,824 Basic earnings/(loss) per share attributable to owners of Kofola ČeskoSlovensko a.s. (CZK/share) 19.26 17.98 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-24 4.10. PROPERTY, PLANT AND EQUIPMENT Tables below summarize Property, plant and equipment movements in the current and comparative period. Movements in Property, plant and equipment Land Buildings and constructions Plant and equipment Vehicles Leasehold improvement Non-current assets under construction, Prepayments Total 2023 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Cost – opening 4,957 24,358 63,968 69,058 5,733 18,949 187,023 Additions - - 4,476 4,146 10 4,637 13,269 Lease additions - 10,548 - - - - 10,548 Sale - - (114) (2,580) (117) - (2,811) Disposal - - (7,125) (1,230) (46) - (8,401) Cost – closing 4,957 34,906 61,205 69,394 5,580 23,586 199,628 Accumulated depreciation – opening - (21,563) (49,416) (57,742) (5,100) - (133,821) Depreciation charge - (5,344) (7,579) (7,199) (198) - (20,320) Sale - - 113 2,578 51 - 2,742 Disposal - - 7,125 1,230 46 - 8,401 Accumulated depreciation – closing - (26,907) (49,757) (61,133) (5,201) - (142,998) Impairment allowance – opening - - - - - - - Impairment loss - - (226) - - - (226) Impairment allowance – closing - - (226) - - - (226) Net book value – opening 4,957 2,795 14,552 11,316 633 18,949 53,202 Net book value – closing 4,957 7,999 11,222 8,261 379 23,586 56,404 Movements in Property, plant and equipment Land Buildings and constructions Plant and equipment Vehicles Leasehold improvement Non-current assets under construction, Prepayments Total 2022 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Cost – opening 4,957 32,852 60,407 69,844 5,733 19,892 193,685 Additions - - 4,093 - - 140 4,233 Transfers from non-current assets under construction - - 1,083 - - (1,083) - Sale - - (32) - - - (32) Disposal - (8,494) (1,583) (786) - - (10,863) Cost – closing 4,957 24,358 63,968 69,058 5,733 18,949 187,023 Accumulated depreciation – opening - (23,154) (43,035) (50,213) (4,918) - (121,320) Depreciation charge - (5,669) (7,982) (8,315) (182) - (22,148) Sale - - 18 - - - 18 Disposal - 7,260 1,583 786 - - 9,629 Accumulated depreciation – closing - (21,563) (49,416) (57,742) (5,100) - (133,821) Net book value – opening 4,957 9,698 17,372 19,631 815 19,892 72,365 Net book value – closing 4,957 2,795 14,552 11,316 633 18,949 53,202 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-25 4.11. INTANGIBLE ASSETS Tables below summarize Intangible assets movements in the current and comparative period. Movements in Intangible assets (IA) 2023 Goodwill Software Trademarks and other rights IA under development Total CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Cost – opening 30,675 179,478 397,308 1,897 609,358 Additions - 23,422 509 17,371 41,302 Transfer from IA under development - 1,166 587 (1,753) - Disposal - (6,243) - - (6,243) Cost – closing 30,675 197,823 398,404 17,515 644,417 Accumulated amortisation – opening - (164,266) (148,300) - (312,566) Amortisation charge - (12,082) (17,421) - (29,503) Disposal - 6,243 - - 6,243 Accumulated amortisation – closing - (170,105) (165,721) - (335,826) Net book value – opening 30,675 15,212 249,008 1,897 296,792 Net book value – closing 30,675 27,718 232,683 17,515 308,591 Of which: Goodwill 30,675 Intangible assets 277,916 The Goodwill arose on merger with PINELLI spol. s r.o. acquired in April 2011. Amortisation of trademarks and other rights is charged to Selling, marketing and distribution costs. The value of trademarks includes, among others, the value of such trademarks as: Kofola, Citrocola, Semtex energy drink and Erektus. Movements in Intangible assets (IA) 2022 Goodwill Software Trademarks and other rights IA under development Total CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Cost – opening 30,675 172,570 396,518 505 600,268 Additions - 8,257 301 1,883 10,441 Transfer from IA under development - 2 489 (491) - Disposal - (1,351) - - (1,351) Cost – closing 30,675 179,478 397,308 1,897 609,358 Accumulated amortisation – opening - (157,825) (131,022) - (288,847) Amortisation charge - (7,792) (17,278) - (25,070) Disposal - 1,351 - - 1,351 Accumulated amortisation – closing - (164,266) (148,300) - (312,566) Net book value – opening 30,675 14,745 265,496 505 311,421 Net book value – closing 30,675 15,212 249,008 1,897 296,792 Of which: Goodwill 30,675 Intangible assets 266,117 4.11.1 IMPAIRMENT TESTING In impairment testing of trademarks, management of the Company has decided use to the relief-from-royalty method (fair value method. Due to the fact that management is not aware of comparable market transactions, discounted free cash flows are used in the estimation of cash-flow projections that are based on financial plans approved by management of the Company on the basis of plans drawn up by management of the Company for the period until 2029. 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-26 Main assumptions used in financial plans and cash-flow projections: Trademarks The main trademark with indefinite useful life Kofola 2022 Royalty rate 6.0% Average revenue growth rate 4.2% Perpetuity growth rate 2.0% Discount rate post-tax (average in explicit period) 9.5% Discount rate post-tax (perpetuity) 8.3% * Growth rate used for the purpose of the impairment testing from 2023 till the end of the explicit period. The detailed calculation made in 2022 of the recoverable amount of the Kofola trademark was used for the purpose of 2023 impairment test because all of the criteria set by IAS 36, par. 24 were met. These criteria are: - the assets and liabilities making up the unit have not changed significantly since the most recent recoverable amount calculation; - the most recent recoverable amount calculation resulted in an amount that exceeded the carrying amount of the unit by a substantial margin; and - based on an analysis of events that have occurred and circumstances that have changed since the most recent recoverable amount calculation, the likelihood that a current recoverable amount determination would be less than the current carrying amount of the unit is remote. Carrying value of all trademarks CZK´000 31 December 2023 230,624 31 December 2022 247,755 Company’s trademarks generate historically positive results and are expected to continue in this trend also in future periods. Sensitivity analysis Management believes that, in relation to value in use for Company’s trademarks which are tested for impairments, no rational change in the above-adopted assumptions would result in their recoverable amounts being lower than their carrying amounts. 4.12. INVESTMENTS IN SUBSIDIARIES Investments in subsidiaries Ownership interest Cost Carrying amount Name of entity 31.12.2023 31.12.2022 31.12.2023 31.12.2022 31.12.2023 31.12.2022 % % CZK´000 CZK´000 CZK´000 CZK´000 Kofola a.s. (CZ) 100.00 100.00 1,303,322 1,303,322 1,303,322 1,303,322 Kofola a.s. (SK) 100.00 100.00 51,023 51,023 51,023 51,023 SANTA-TRANS s.r.o. 100.00 100.00 8,760 8,760 8,760 8,760 UGO trade s.r.o. 90.00 90.00 543,362 543,362 543,362 304,909 RADENSKA d.o.o. 100.00 100.00 1,324,280 1,324,280 1,324,280 1,324,280 Premium Rosa Sp. Z o.o. 100.00 100.00 117,534 68,160 117,534 68,160 LEROS, s.r.o. 100.00 100.00 199,040 199,040 199,040 199,040 F.H.Prager s.r.o. 100.00 100.00 13,000 13,000 13,000 13,000 PIVOVARY TRIANGL s.r.o. 51.00 n/a 5 n/a 5 n/a FILIP REAL a.s. 100.00 n/a 74,908 n/a 74,908 n/a Bilgola fresh s.r.o. 100.00 n/a 39,562 n/a 39,562 n/a Share based payment (Kofola a.s. (SK), RADENSKA d.o.o., LEROS, s.r.o., SANTA-TRANS s.r.o., UGO trade s.r.o.) n/a n/a 72,595 13,287 72,595 13,287 Total investments in subsidiaries 3,747,391 3,524,234 3,747,391 3,285,781 In 2023, the investment in Premium Rosa Sp. z o.o. was increased through in-kind contribution by CZK 49,374 thousand. 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-27 In 2023, the Company has released the impairment related to UGO trade s.r.o. of CZK 238,453 thousand because recoverable amount exceeded the carrying amount of the investment. UGO trade s.r.o. has a very positive business development. In 2022, the investment in UGO trade s.r.o. was increased through in-kind contribution by CZK 45,000 thousand. 4.12.1 IMPAIRMENT TESTING Investments in subsidiaries were subject of impairment testing. Value in use method is utilized for the determination of the recoverable amount. In 2023 and 2022, there wasn’t identified any impairment loss. In 2023, there wasn’t identified any impairment indicator due to overall positive business development. In 2022, the management identified impairment indicators in case of subsidiaries UGO trade s.r.o. and Premium Rosa Sp. z o.o. However, results of the subsidiaries tested for impairment were expected to return to profitability in the projected explicit period (next 5 years) and the total recoverable amount determined as value in use as of 31 December 2022 exceeded the carrying amount of investments. The assumptions of the impairment test models of the investments in UGO trade s.r.o. and Premium Rosa Sp. z o.o. in 2022 were as follows: • WACC average in explicit period: UGO trade s.r.o. - 9.0%, Premium Rosa Sp. z o.o. - 10.0%, • WACC in perpetuity: UGO trade s.r.o. - 7.6%, Premium Rosa Sp. z o.o. - 8.1%, • Perpetuity growth rate: UGO trade s.r.o. - 2.0%, Premium Rosa Sp. z o.o. - 2.0%, • Average EBITDA margin for 2023-2027: UGO trade s.r.o. - 10.7%, Premium Rosa Sp. z o.o. - 7.4%. The impairment test for UGO trade s.r.o. based on above mentioned assumptions resulted in no impairment charge in 2022. Sensitivity analysis was performed - WACC increased by 3.7 ppt, average EBITDA lower by 3.2 ppt, both lead to a situation when the recoverable amount is equal to the carrying amount. When calculated the sensitivity analysis, only 1 parameter is changed. The impairment test for Premium Rosa Sp. z o.o. based on above mentioned assumptions resulted in no impairment charge in 2022. Sensitivity analysis was performed - WACC increased by 0.4 ppt, average EBITDA lower by 0.4 ppt, both lead to a situation when the recoverable amount is equal to the carrying amount. When calculated the sensitivity analysis, only 1 parameter is changed. 4.13. INVESTMENTS IN EQUITY ACCOUNTED INVESTEES Tables below summarizes Company’s equity accounted investees. Equity accounted investees 31.12.2023 CZK´000 Cafe Dorado s.r.o. 34,060 Zahradní OLLA s.r.o. 1,203 Total 35,263 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-28 4.13.1 CAFE DORADO S.R.O. (ASSOCIATE) The Company has acquired a 50% share in Cafe Dorado s.r.o. in June 2023 for CZK 10 thousand. It is a holding company which has acquired a 50% share in AGRITROPICAL S.A.S., a company owning Columbian coffee plantations, in December 2023. In 2023, the Company has provided capital contributions to Cafe Dorado s.r.o. amounting to CZK 34,050 thousand. Cafe Dorado s.r.o. – Statement of financial position 31.12.2023 01.06.2023 CZK´000 CZK´000 Non-current assets 58,463 - Current assets 18,016 20 Current liabilities (9,429) - Net assets 67,050 20 Company’s share of net assets (50%) 33,525 10 4.14. TRADE AND OTHER RECEIVABLES Trade receivables and other receivables 31.12.2023 31.12.2022 Current Non-current Current Non-current CZK´000 CZK´000 CZK´000 CZK´000 Financial assets within Trade and other receivables Trade receivables 241,974 - 189,523 - of that estimated receivables 11,408 - - - Loans provided to related parties 610,778 - 787,963 - Loss allowance for loans provided to related parties - - (50,002) - Dividends receivable 208,156 - 203,021 - Bonds 251 94,778 251 96,782 Derivatives (i) 22,239 - 18,101 67,595 Other financial receivables 12,414 4,570 2,636 11,700 Loss allowance for other financial receivables (400) - - - Total 1,095,412 99,348 1,151,493 176,077 Non-financial assets within Trade and other receivables Deferred expenses 4,471 274 2,447 870 Prepayments 267 - 521 - Total 4,738 274 2,968 870 Trade and other receivables total 1,100,150 99,622 1,154,461 176,947 * Measured at amortized costs, repayable in December 2027. Trade receivables increased mainly as a result of increased invoicing of brand fees and management services. Changes in Loans provided to related parties and loss allowance result mainly from repayment of loans by Kofola (CZ) and Premium Rosa. Part of the loan provided to Premium Rosa was settled with the payable from in-kind contribution of CZK 49,374 thousand. Derivatives balance decreased due to decrease of expected future interest rates. (i) Derivatives The Company has established a hedge accounting. Revaluation of derivatives in relation to the effective portion of the hedging relationship is accounted through Other comprehensive income (refer to section 3.4 for more details). With the amendment on bank loans in June 2022, also IRS contracts were concluded (only in relation to EUR part of the loan) with interest 2.149% p.a. + margin. At the same time, the existing IRS were terminated and sold (refer to section 4.6). Loss allowance for financial assets within trade and other receivables 2023 2022 CZK´000 CZK´000 As at 1 January 50,002 14,543 (Recovery)/Increase of the loss allowance (49,602) 35,459 As at 31 December 400 50,002 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-29 Decrease of the loss allowance in 2023 is connected with the repayments of the loan balance by Premium Rosa. Increase of the loss allowance in 2022 related mainly to the loan provided to Premium Rosa. Further information on transactions with related parties is presented in section 4.25. Trade receivables are not interest bearing and are usually payable within 30-60 days of recognition. The risks associated with trade and other receivables, as well as the Company’s policy relating to managing such risks, are described in section 4.23. Information on liens established on receivables to secure credits and loans is presented in section 4.18. 4.15. CASH AND CASH EQUIVALENTS Cash and cash equivalents 31.12.2023 31.12.2022 CZK´000 CZK´000 Cash in bank and in hand 366,469 137,465 Total cash and cash equivalents 366,469 137,465 Free funds are held at bank and invested in the form of term and overnight deposits, primarily with variable interest rates. Split by currency 31.12.2023 31.12.2022 CZK´000 CZK´000 in CZK 127,068 74,784 in PLN 2,378 2,219 in EUR 237,023 60,462 Total cash and cash equivalents 366,469 137,465 4.16. EQUITY 4.16.1 SHARE CAPITAL AND SHARE PREMIUM SHARE CAPITAL STRUCTURE Share capital structure 31.12.2023 31.12.2022 Type of shares Shares Par value Shares Par value pcs CZK´000 pcs CZK´000 Ordinary shares of Kofola ČeskoSlovensko a.s. 22,291,948 1,114,597 22,291,948 1,114,597 Total 22,291,948 1,114,597 22,291,948 1,114,597 Ordinary shares of Kofola ČeskoSlovensko a.s. have as at 31 December 2023 a par value of CZK 50 (as of 31 December 2022 value of CZK 50). Each share in the Company ranks pari passu in all respects with all other shares. The same rights are incorporated into all the Company's shares including the right to attend the General Meeting, to require and receive explanations of matters concerning the Company that are part of the agenda of the General Meeting, to submit proposals and counterproposals, and to receive a dividend and share in the liquidation surplus. In compliance with the relevant legal provisions, the voting rights attached to the shares owned by the Company and by RADENSKA d.o.o. cannot be exercised. All of the issued shares have been fully paid up. 4.16.2 OTHER RESERVES Other reserves contain balances related to: • share based payment programme, and • valuation of the interest rate swaps (hedge accounting). The Company has made a disaggregation of Other reserves in both 2023 and 2022. Total balances in 2022 remain the same as reported. 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-30 4.16.3 OWN SHARES The Company didn’t have any own shares as of 31 December 2023 and 31 December 2022. COURSE OF PURCHASE OF OWN SHARES IN 2022 The Board of Directors of the Company resolved to implement the acquisition of own shares by the Company on 7 March 2022. The sole purpose of the acquisition of own shares by the Company was to meet obligations arising from share option programmes, or other allocations of shares to employees or to members of the administrative, management or supervisory bodies of the Company or of an associate company. The conditions for the acquisition of own shares by the Company: a) the acquisition took place outside the regulated market, directly from the company RADENSKA d.o.o., a subsidiary company of the Company; b) number of shares that were acquired amounted to 22,615 shares of the Company which represented 0.10% of the Company´s share capital; and c) the acquisition was settled on 8 March 2022 for the price equal to the closing price for which shares of Kofola were traded on the regulated market organized by the company Burza cenných papírů Praha, a.s. on the previous trading day, i.e. CZK 295 per individual share (total value of CZK 6,671 thousand). As such, the contract was concluded at market terms. The shares have nominal value of CZK 50 per individual share. Shares have been transferred to share based payment participants in March 2022. 4.16.4 DIVIDENDS Dividends 2023 2022 CZK´000 CZK´000 Dividends 300,941 251,899 Dividend per share (CZK/share) 13.5 11.3 * Dividend divided by the number of shares outstanding as of dividend record date. 4.17. PROVISIONS Movements in provisions Provision for personnel expenses (bonuses) Share based payment Total CZK´000 CZK´000 CZK´000 Balance as at 1 January 2023 42,011 1,611 43,622 Increase due to creation 79,949 19,742 99,691 Decrease due to usage/release (42,011) - (42,011) Balance as at 31 December 2023 79,949 21,353 101,302 Of which: Current part 79,949 - 79,949 Non-current part - 21,353 21,353 Balance as at 31 December 2023 79,949 21,353 101,302 Increase of provisions is connected with positive Group results. 4.18. BANK CREDITS AND LOANS Indebtedness of the Company from the credits and loans As at 31 December 2023, the Company’s total bank loans and credits amounted to CZK 3,384,730 thousand (as at 31 December 2022: CZK 3,226,113 thousand). Increase of the balance is a result of the regular loan repayment, CAPEX tranche drawing and FX revaluation. From the total balances in relation to repayments and drawings of loans and bank credits 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-31 presented within the Separate statement of cash flows (section 1.4), there was no change of Company’s overdraft (in 2022: decrease of CZK 72,259 thousand). The Facility loan agreement as amended (which refinanced loans at that time, served for a loan financing of RADENSKA d.o.o. acquisition and also the acquisition of ONDRÁŠOVKA a.s. and Karlovarská Korunní s.r.o.) with carrying amount of CZK 3,384,730 thousand as at 31 December 2023 (as at 31 December 2022: CZK 3,226,113 thousand) was a main component of Company´s liabilities. The reason for the execution of the Facility loan agreement was a consolidation of Group financing to ensure strategic development and taking advantage of the favourable conditions of financial market. In June 2022, an amendment to existing contract on bank credits and loans has been concluded. Transferring 60% of outstanding loan to EUR brought significant savings in interest expense and adjustment of the repayment schedule lead to decrease of regular annual loan repayments. Credit terms and terms and conditions Based on credit agreements, the Company is required to meet specified covenants. In accordance with the requirements of IAS 1, a breach of credit terms that may potentially limit unconditional access to credits in the nearest year makes it necessary to classify such liabilities as current. As of 31 December 2023, the Company met all covenants. As of 31 December 2022, the Company obtained a bank waiver for the breach of CAPEX ratio covenant. All other bank loan covenants were met in 2022. Financing entity Credit currency Face value Carrying amount* Interest terms Maturity date Collateral 31.12.2023 CZK´000 CZK´000 ČSOB, a.s. + Česká spořitelna, a.s. CZK - - 1M PRIBOR + margin 6/2025 buildings, receivables, movable assets, shares, bill of exchange, inventory ČSOB, a.s. + Česká spořitelna, a.s. CZK 1,025,791 1,022,486 3M PRIBOR + margin 6/2028 buildings, receivables, movable assets, shares, bill of exchange, inventory ČSOB, a.s. + Česká spořitelna, a.s. EUR 1,897,834 1,891,290 3M EURIBOR + margin 6/2028 buildings, receivables, movable assets, shares, bill of exchange, inventory ČSOB, a.s. + Česká spořitelna, a.s. CZK 126,889 126,889 3M PRIBOR + margin 6/2028 buildings, receivables, movable assets, EUR 122,088 122,088 3M EURIBOR + margin 6/2028 shares, bill of exchange, inventory ČSOB, a.s. + Česká spořitelna, a.s. CZK 88,000 88,000 3M PRIBOR + margin 6/2028 buildings, receivables, movable assets, EUR 133,977 133,977 3M EURIBOR + margin 6/2028 shares, bill of exchange, inventory Total 3,394,579 3,384,730 Out of it non-current 3,153,945 Out of it current 230,785 * Carrying amount of borrowings on variable interest rate approximates fair value. ** Administration by Česká spořitelna, a.s. There is a shared limit of CZK 500,000 thousand for Kofola a.s. (CZ), Kofola a.s. (SK), RADENSKA d.o.o. and Kofola ČeskoSlovensko a.s. which can be drawn in CZK and EUR. *** The interest rate swaps were concluded (refer to section 4.23.1). 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-32 Financing entity Credit currency Face value Carrying amount Interest terms Maturity date Collateral 31.12.2022 CZK´000 CZK´000 ČSOB, a.s. + Česká spořitelna, a.s. CZK - - 1M PRIBOR + margin 6/2025 buildings, receivables, movable assets, shares, bill of exchange, inventory ČSOB, a.s. + Česká spořitelna, a.s. CZK 1,153,791 1,149,322 3M PRIBOR + margin 6/2028 buildings, receivables, movable assets, shares, bill of exchange, inventory ČSOB, a.s. + Česká spořitelna, a.s. EUR 1,851,011 1,843,013 3M EURIBOR + margin 6/2028 buildings, receivables, movable assets, shares, bill of exchange, inventory ČSOB, a.s. + Česká spořitelna, a.s. CZK 155,086 155,086 3M PRIBOR + margin 6/2028 buildings, receivables, movable assets, EUR 78,692 78,692 3M EURIBOR + margin 6/2028 shares, bill of exchange, inventory Total 3,238,580 3,226,113 Out of it non-current 3,058,226 Out of it current 167,887 * Carrying amount of borrowings on variable interest rate approximates fair value. ** Administration by Česká spořitelna, a.s. There is a shared limit of CZK 500,000 thousand for Kofola a.s. (CZ), Kofola a.s. (SK), RADENSKA d.o.o. and Kofola ČeskoSlovensko a.s. which can be drawn in CZK and EUR. *** The interest rate swaps were concluded (refer to section 4.23.1). Undrawn credit lines as of 31 December 2023 amounted to CZK 413,470 thousand (as of 31 December 2022: CZK 242,310 thousand). Pledges of the Company Pledges of the Company 31.12.2023 31.12.2022 Cost Net book value Cost Net book value CZK´000 CZK´000 CZK´000 CZK´000 Investments in subsidiaries 3,593,014 3,377,408 3,721,327 3,192,539 Cash in bank 366,382 366,382 136,339 136,339 Total 3,959,396 3,743,790 3,857,666 3,328,878 * including Studenac (the financial investment of RADENSKA) 4.19. TRADE AND OTHER PAYABLES Trade and other payables Other liabilities 31.12.2023 31.12.2022 Current Non-current Current Non-current CZK´000 CZK´000 CZK´000 CZK´000 Financial liabilities within Trade payables and Other liabilities Trade payables 29,841 - 24,160 - - of that accrued expenses 1,470 - 937 - Liabilities for purchased PPE and Intangible assets 5,732 - 1,242 - Derivatives - 10,927 - - Loans received from related parties 2,521 86,538 - - Contingent/deferred consideration 40,790 50,680 - - Other financial liabilities 1,780 - 4,776 - Total 80,664 148,145 30,178 - Non-financial liabilities within Trade and other payables VAT 3,833 - 1,380 - Payables to employees 12,966 - 11,180 - Other non-financial liabilities 4,962 - 6,317 - Total 21,761 - 18,877 - Trade and other payables and Other liabilities total 102,425 148,145 49,055 - Company has received a loan from its subsidiary RADENSKA in June 2023. The loan was concluded at market terms. Contingent/deferred consideration represents liabilities connected with the acquisition of FILIP REAL a.s. and Bilgola fresh s.r.o. that are repayable in following years as per contract terms. Trade payables are not interest bearing and are usually paid within 30-90 days of recognition. Other payables are not interest bearing and are payable on average within 1 month. 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-33 4.20. FUTURE COMMITMENTS, CONTINGENT ASSETS AND LIABILITIES As at 31 December 2023, the Company provided the following guarantees for other entities: Entity providing guarantees Entity receiving guarantees Currency (CY) Guarantee amount Guarantee amount Guarantee period Guarantees provided for Relationship CY´000 CZK´000 Kofola ČeskoSlovensko a.s. City-Arena PLUS a.s. EUR 8 198 8/2025 UGO trade s.r.o. subsidiary ORLEN Unipetrol Doprava s.r.o. CZK 130 130 Until the end of contract UGO trade s.r.o. subsidiary Fatra, a.s. CZK 100 100 Until the end of contract UGO trade s.r.o. subsidiary Raiffeisen - Leasing, s.r.o. CZK 484 484 1/2025 LEROS, s.r.o. subsidiary Raiffeisen - Leasing, s.r.o. CZK 265 265 1/2025 LEROS, s.r.o. subsidiary Leasing České spořitelny, a.s. CZK 891 891 11/2027 UGO trade s.r.o. subsidiary Leasing České spořitelny, a.s. CZK 558 558 11/2027 LEROS, s.r.o. subsidiary Total guarantees issued 2,626 * The fair value of the guarantees is close to zero (fair valuation in level 3). As at 31 December 2022 the Company provided the following guarantees for other entities: Entity providing guarantees Entity receiving guarantees Currency (CY) Guarantee amount Guarantee amount Guarantee period Guarantees provided for Relationship CY´000 CZK´000 Kofola ČeskoSlovensko a.s. City-Arena PLUS a.s. EUR 8 193 8/2025 UGO trade s.r.o. subsidiary ORLEN Unipetrol Doprava s.r.o. CZK 130 130 Until the end of contract UGO trade s.r.o. subsidiary Fatra, a.s. CZK 100 100 Until the end of contract UGO trade s.r.o. subsidiary ČSOB Leasing, a.s. CZK 224 224 6/2023 LEROS, s.r.o. subsidiary Raiffeisen - Leasing, s.r.o. CZK 964 964 1/2025 LEROS, s.r.o. subsidiary Leasing České spořitelny, a.s. CZK 1,113 1,113 11/2027 UGO trade s.r.o. subsidiary Leasing České spořitelny, a.s. CZK 703 703 11/2027 LEROS, s.r.o. subsidiary Total guarantees issued 3,427 * The fair value of the guarantees is close to zero (fair valuation in level 3). 4.21. SHARE BASED PAYMENT The following table summarizes the information about the share based payment plan 2021 – 2026. Share based payment Plan 2021 - 2026 Summary of effect during 2023 and as of 31 December 2023 Share price at grant date (CZK) 282 Number of Pair shares transferred to participants in 2023 (pcs) - Total cumulated number of Pair shares transferred to participants as of 31 Dec 2023 (pcs) - Fair value of Pair shares as of grant date (CZK) 140 - 200 Ends of vesting periods 31 Dec 2023, 31 Dec 2026 Number of Performance shares transferred to participants in 2023 (pcs) - Total cumulated number of Performance shares transferred to participants as of 31 Dec 2023 (pcs) - Fair value of Performance shares as of grant date (CZK) 185 Ends of vesting periods 31 Dec 2026 Cumulated reserve from equity settled transactions as of 31 Dec 2022 (CZK thousand) 16,349 Total expense/(income) from equity settled transactions in 2023 (CZK thousand) 99,204 Total increase/(decrease) of investments in subsidiaries resulting from equity settled transactions in 2023 (CZK thousand) 59,308 Cumulated reserve from equity settled transactions as of 31 Dec 2023 (CZK thousand) 174,861 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-34 Share based payment Plan 2021 - 2026 Summary of effect during 2022 and as of 31 December 2022 Share price at grant date (CZK) 282 Number of Pair shares transferred to participants in 2022 (pcs) - Total cumulated number of Pair shares transferred to participants as of 31 Dec 2022 (pcs) - Fair value of Pair shares as of grant date (CZK) 140 - 200 Ends of vesting periods 31 Dec 2023, 31 Dec 2026 Number of Performance shares transferred to participants in 2022 (pcs) - Total cumulated number of Performance shares transferred to participants as of 31 Dec 2022 (pcs) - Fair value of Performance shares as of grant date (CZK) 185 Ends of vesting periods 31 Dec 2026 Cumulated reserve from equity settled transactions as of 31 Dec 2021 (CZK thousand) 17,857 Total expense/(income) from equity settled transactions in 2022 (CZK thousand) (1,143) Total increase/(decrease) of investments in subsidiaries resulting from equity settled transactions in 2022 (CZK thousand) (365) Cumulated reserve from equity settled transactions as of 31 Dec 2022 (CZK thousand) 16,349 Significant increase of the share based payment balance in 2023 is connected with the positive development of the Group’s business and its expected continuance in the upcoming years which influences the Performance Shares Plan due to increase of expected Equity Value (EBITDA multiple decreased by the Net debt) as of 31 Dec 2026. 4.22. LEASES This note provides information about leases where the Company is a lessee. Leases where the Company is a lessor are immaterial. 4.22.1 AMOUNTS RECOGNISED IN THE STATEMENT OF FINANCIAL POSITION Right-of-use asset forms a part of Property, plant and equipment. Lease liabilities are presented on separate rows in the statement of financial position. The net carrying amount at the end of the reporting period by classes of assets is provided below: Net carrying amount by classes of assets 31.12.2023 31.12.2022 CZK´000 CZK´000 Buildings and constructions 7,918 2,697 Plant and equipment 2,158 4,512 Vehicles 4,227 9,393 Total 14,303 16,602 Additions to the right-of-use assets were following: Additions by classes of assets Buildings and constructions Plant and equipment Vehicles Total CZK´000 CZK´000 CZK´000 CZK´000 2023 10,548 - - 10,548 2022 - - - - 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-35 4.22.2 AMOUNTS RECOGNISED IN THE STATEMENT OF PROFIT OR LOSS Depreciation expense to the right-of-use assets during 2023 and 2022 financial years was following: Depreciation expense by classes of assets Buildings and constructions Plant and equipment Vehicles Total CZK´000 CZK´000 CZK´000 CZK´000 2023 5,327 2,354 5,166 12,847 2022 5,643 2,353 5,559 13,555 Interest expense to lease liabilities is presented in note 4.7. The statement of profit or loss further shows the following amounts relating to not capitalized leases: Expense relating to not capitalized leases 2023 2022 CZK´000 CZK´000 Expense relating to short-term leases and leases of low-value assets 2,281 1,868 Total 2,281 1,868 Total cash outflows in relation to capitalized leases is presented in the section Cash flows from financing activities within the Separate statement of cash flows. Total cash outflows in relation to other leases is close to balance stated in the table above (short-term leases and leases of low-value assets). There are no material future cash outflows to which the lessee is potentially exposed that are not reflected in the measurement of lease liabilities. Lease commitments for short-term leases and leases of low-value assets as of 31 December 2023 amounted to CZK 238 thousand (as of 31 December 2022: CZK 182 thousand). 4.23. FINANCIAL RISK MANAGEMENT The Company’s primary financial instruments consist of cash and cash equivalents, dividends and loans. The main goal of holding such financial instruments is to obtain funds for business operations, or to invest the Company’s available funds. In addition, the Company has other financial instruments, such as trade receivables and payables that arise as part of its operations. The accounting methods relating to those instruments are described in section 3.4. It is the Company’s policy – now and throughout the reporting periods presented in these financial statements – not to trade in financial instruments. The Company’s activities are exposed to several types of financial risk: market risk (including foreign exchange risk, and cash-flow risk relating to changes in interest rates), credit risk and liquidity risk. In addition, the Company monitors the market prices risk relating to all of its financial instruments. Risks are managed by the Company’s management, which recognises and assesses the above stated financial risks. The general risk management process is focused on the unpredictability of financial markets, and the Company tries to minimise any potential adverse effects on its financial results. The Company uses derivative financial instruments to hedge against certain types of risk, providing that the hedging instruments are considered to be cost effective. Management verifies and agrees the risk management methods with regard to every type of risk. A short description of these methods is presented below. 4.23.1 INTEREST RATE RISK Interest rate risk is a risk that the fair value or future cash flows from a financial instrument will change due to changes in interest rates. The interest-bearing financial liabilities of the Company are mainly bank credits. The Company has credit payables with variable interest rates, which give rise to a risk of an increase in those rates compared to the rates applied at contract conclusion. In addition, the Company places its free funds on variable interest rate deposits, which would bring the profits down if the interest rates fall. Trade and other receivables and payables are not interest bearing and have due dates of up to one year. Management of the Company monitors its exposure to interest rate risk and interest rate forecasts. In order to protect against changes in interest rates, the Company has fixed the interest rate on EUR part of the loan (excluding overdraft) for Company financing, because existing contract terms were favourable for the Company which was not the case of CZK part where the interest rates were on their maximum levels. The balance of the loan which is covered by interest rate swaps as of 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-36 31 December 2023 was CZK 2,019,922 thousand (as of 31 December 2022: CZK 1,851,011 thousand). Hedge accounting is established by the Company for below stated derivative instruments. There was no ineffective portion of the hedging relationship for the year ended 31 December 2023 and 31 December 2022. The Company determines the existence of an economic relationship between the hedging instrument and hedged item based on the reference interest rates, maturities and the notional amounts. The Company assesses whether the derivative designated in each hedging relationship is expected to be effective in offsetting changes in cash flows of the hedged item under the hypothetical derivative method. The Company's interest rate risk management policy is to hedge at least 50% of its variable interest exposure that is related to Company 's bank credit and loans (excluding overdrafts). Hedging instruments are utilizied when the conditions of available contracts are considered to be favourable for the Company. Information about hedging instruments (cash flow hedge) Interest rate swaps 31.12.2023 31.12.2022 Net exposure Average fixed interest rate Net exposure Average fixed interest rate CZK´000 p.a. CZK´000 p.a. In period from one to six months 13,565 4.0% - 3.9% In period from six to twelve months 13,565 4.0% - 3.9% More than one year 1,992,792 3.9% 1,851,011 3.9% Total 2,019,922 1,851,011 * IRS relate to the part of the bank credits and loans that is repayable in 6/2028. Interest rate swaps – nominal balances 31.12.2023 31.12.2022 CZK'000 EUR'000 CZK'000 EUR'000 Nominal amounts of the hedging instruments 2,019,922 81,696 1,851,011 76,758 Interest rate swaps by tranches 31.12.2023 31.12.2022 Net exposure Carrying amount Net exposure Carrying amount CZK´000 CZK´000 CZK´000 CZK´000 Derivative in relation to tranche C1 122,088 (3,018) - - Derivative in relation to tranche B2 756,325 5,711 737,665 34,151 Derivative in relation to tranche B6 1,141,509 8,619 1,113,346 51,545 Total 2,019,922 11,312 1,851,011 85,696 Carrying amounts and FS position of IRS 31.12.2023 31.12.2022 CZK´000 CZK´000 Non-current financial assets (presented in Other receivables) - 67,595 Current financial assets (presented in Trade and other receivables) 22,239 18,101 Non-current financial liabilities (presented in Other liabilties) (10,927) - Current financial liabilities (presented in Trade and other payables) - - Net balance 11,312 85,696 Hedge effectiveness and Hedge ratio of IRS 31.12.2023 31.12.2022 CZK´000 CZK´000 Change in fair value of the hedging instruments used as the basis for recognising hedge ineffectiveness for the period (74,384) (6,350) Change in fair value of the hedged item used as the basis for recognising hedge ineffectiveness for the period (74,384) *(6,350) Hedge ratio 100% 100% * There was no ineffective portion of the hedging relationship. ** The Company is able to conclude the derivative contracts with the same characteristics (such as maturities and notional amounts) as those of the underlying assets. 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-37 Changes in IRS hedge reserve 2023 2022 CZK´000 CZK´000 IRS reserve balance as of 1 January 69,413 74,556 Effective portion of changes in fair value (74,384) (6,350) Recclasification to profit or loss - - Tax effect of fair value movements during the year 14,133 1,207 Tax effect resulting from change in the tax rate (227) - IRS reserve balance as of 31 December 8,935 69,413 Interest rate sensitivity If interest rates at the balance sheet date had been 100 basis points lower/higher with all other variables held constant, profit/(loss) for the period before tax for the year 2023 would have been increased/decreased by CZK 5,642 thousand (2022: CZK 12,950 thousand), mainly as a result of different interest expense on variable interest for financial liabilities. 4.23.2 CURRENCY RISK The Company is exposed to the risk of changes in foreign exchange rates, mainly due to foreign exchange receivables. The currency risk relates primarily to the EUR and PLN exchange rate in relation to CZK. The Company’s exposure associated with other currencies is immaterial. The effect of currency risk on the Company’s position is presented in the table (sensitivity analysis) below. The sensitivity analysis is based on a reasonable change in the assumed foreign exchange rate while the other assumptions remain unchanged. In practice this is not very likely, and changes in certain assumptions may be correlated, e.g. a change in interest rate and in the foreign exchange rate. The Company manages currency risk as a whole. The sensitivity analysis prepared by management for currency risk illustrates after-tax profit or loss effect of changes in the exchange rate of the EUR to CZK. Financial assets and liabilities denominated in EUR 31.12.2023 31.12.2022 CZK´000 CZK´000 Cash and cash equivalents 237,023 60,462 Loans provided to related parties 601,204 733,440 Trade receivables and other current financial receivables 230,395 222,695 Non-current financial receivables - 66,062 Bank credits and loans (2,152,156) (1,921,705) Loans received from related parties (89,059) - Trade liabilities and other current financial liabilities (6,110) (994) Non-current financial liabilities (10,927) - Net position (1,189,630) (840,040) Currency risk impact on profit or loss 31.12.2023 31.12.2022 CZK´000 CZK´000 EUR strengthening by 3% (28,908) (20,413) EUR weakening by 3% 28,908 20,413 4.23.3 CREDIT RISK Credit risk arises from cash deposits in banks along with other short-term deposits, as well as from trade and other financial receivables. The Company undertakes activities aimed at limiting credit risk, consisting of checking the creditworthiness of its customers, setting credit limits and monitoring the customers’ financial position. An analysis of ageing structure of trade and other financial receivables assists with the credit risk management. There are no significant concentrations of credit risk, whether through exposure to individual customers, specific industry sectors and/or regions. TRADE AND OTHER FINANCIAL RECEIVABLES The Company is exposed to credit risk, defined as a risk that its debtors will not meet their obligations and thus cause the Company to incur losses. Presented below is the ageing structure of receivables: 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-38 Credit risk 31.12.2023 31.12.2022 Trade receivables Other financial receivables Trade receivables Other financial receivables Due CZK´000 CZK´000 CZK´000 CZK´000 Third parties 1,791 39,223 1,010 100,032 Intercompany 158,758 899,680 100,442 1,070,473 Total due 160,549 938,903 101,452 1,170,505 Past due Third parties - less than 30 days overdue - - - - - 30 to 90 days overdue - - - - - 91 to 180 days overdue - - 267 - - 181 to 360 days overdue - - - - - over 360 days overdue - - - - Intercompany 81,425 14,283 87,804 17,544 Total past due 81,425 14,283 88,071 17,544 Third parties - (400) - - Intercompany - - - (50,002) Less loss allowance (-) - (400) - (50,002) Total 241,974 952,786 189,523 1,138,047 Subject to the above, management believes that the credit risk has been accounted for in the financial statements through the creation of appropriate allowances. CASH AND CASH EQUIVALENTS With regard to the Company’s other financial assets, such as cash and cash equivalents, credit risk arises as a result of the other party’s inability to pay, and the maximum amount of the Company’s exposure to this risk is equal to the balance sheet value of these amounts. The credit risk associated with bank deposits is considered to be immaterial, as the Company has concluded transactions with institutions that have a sound financial position. Credit quality of cash in bank and in hand 31.12.2023 31.12.2022 Credit rating CZK´000 CZK´000 A1 366,383 136,338 Not on watch - 1,091 Cash in hand 86 36 Total cash in bank and in hand 366,469 137,465 4.23.4 LIQUIDITY RISK The risk for the Company arises from a potential restriction in access to financial markets or from a change in the attitude of banks in the area of granting credits, which may result in an inability to obtain new financing or refinancing of debts. Management of the Company monitors the risk of insufficient funds by adjusting the structure of financing to prediction of future cash flows (planned investments included), diversifying of sources of financing and by keeping sufficient level of available credit lines. Current liabilities exceed current assets, nevertheless, the Company´s business plan is based on future cash inflows from dividends, licence fees, shared service fees and repayments of loans to related parties. The management is not aware of any going concern risk. It is the Company’s objective to maintain a balance between financing continuity and flexibility, by using various financing sources, such as credits, loans and lease agreements. The Company controls its financial liabilities so that in each given period the amount of liabilities due within the next 12 months does not pose a threat for the Company’s ability to meet its financial obligations. Analysis of financial liabilities is presented below. The amounts represent undiscounted cash flows, which represent the Company's maximum exposure to liquidity risk. Future cash outflows related to financial liabilities: 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-39 Contractual cash flows of financial liabilities as at 31 December 2023 Less than 3 months Between 3-12 months Between 1-2 years Between 2-5 years Over 5 years Total contractual cash-flows Total carrying amount CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Trade payables 29,069 772 - - - 29,841 29,841 Bank credits and loans 114,288 307,216 358,312 3,198,572 - 3,978,388 3,384,730 Lease liabilities 3,391 7,869 3,755 530 - 15,545 14,481 Other liabilities 31,697 19,126 21,412 107,151 19,582 198,968 198,968 Total 178,445 334,983 383,479 3,306,253 19,582 4,222,742 3,628,020 Contractual cash flows of financial liabilities as at 31 December 2022 Less than 3 months Between 3-12 months Between 1-2 years Between 2-5 years Over 5 years Total contractual cash-flows Total carrying amount CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Trade payables 22,730 1,430 - - - 24,160 24,160 Bank credits and loans 92,042 290,131 353,537 940,338 2,448,297 4,124,345 3,226,113 Lease liabilities 3,486 7,515 5,515 1,400 - 17,916 16,719 Other liabilities 4,767 1,400 - - - 6,167 6,018 Total 123,025 300,476 359,052 941,738 2,448,297 4,172,588 3,273,010 4.24. FINANCIAL INSTRUMENTS 4.24.1 FINANCIAL INSTRUMENTS CATEGORIES Fair value of Trade receivables, Cash and cash equivalents, other financial receivables, Trade payables and other financial liabilities is close to carrying amounts since the interest payable on them is either close to market rates or they are short-term. 31.12.2023 Financial assets at amortised cost Derivatives through OCI Financial liabilities at amortised cost Total CZK´000 CZK´000 CZK´000 CZK´000 Trade and other financial receivables 1,172,525 - - 1,172,525 Cash and cash equivalents 366,469 - - 366,469 Derivatives - 11,312 - 11,312 Bank credits and loans - - (3,384,730) (3,384,730) Lease liabilities - - (14,481) (14,481) Trade and other payables and other liabilities - - (217,882) (217,882) Total 1,538,994 11,312 (3,617,093) (2,066,787) 31.12.2022 Financial assets at amortised cost Derivatives through OCI Financial liabilities at amortised cost Total CZK´000 CZK´000 CZK´000 CZK´000 Trade and other financial receivables 1,241,874 - - 1,241,874 Cash and cash equivalents 137,465 - - 137,465 Derivatives - 85,696 - 85,696 Bank credits and loans - - (3,226,113) (3,226,113) Lease liabilities - - (16,719) (16,719) Trade and other payables and other liabilities - - (30,178) (30,178) Total 1,379,339 85,696 (3,273,010) (1,807,975) Fair value of derivatives In 2020 and 2018, the Group concluded IRS contract and established a hedge accounting. Revaluation of derivatives in relation to the effective portion of the hedging relationship is accounted through Other comprehensive income (refer to section 3.4 for more details). With the amendment on bank loans in June 2022, also new IRS contracts were concluded (only in relation to EUR part of the loan) with interest 2.149% p.a. + margin. At the same time, the existing IRS were terminated and sold (refer to section 4.6). Measured derivatives are not traded in active markets, however all significant inputs required for fair value measurement are observable and as such the Company has included this instrument in Level 2 of fair value hierarchy levels. 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-40 4.25. RELATED PARTY TRANSACTIONS 4.25.1 SHAREHOLDERS STRUCTURE Share capital structure 31.12.2023 31.12.2022 Name of entity Number of shares % in share capital % in voting rights Number of shares % in share capital % in voting rights AETOS a.s. 14,984,204 67.22 70.58 14,984,204 67.22 70.58 RADENSKA d.o.o. 1,062,236 4.77 0.00 1,062,236 4.77 0.00 Others 6,245,508 28.01 29.42 6,245,508 28.01 29.42 Total 22,291,948 100.00 100.00 22,291,948 100.00 100.00 Transactions with own shares are described in section 4.16.3. 4.25.2 SUBSIDIARIES Interests in subsidiaries are set out in sections 2.2 and 4.12. 4.25.3 REMUNERATION OF THE COMPANY’S KEY MANAGEMENT PERSONNEL Presented below is the structure of the remuneration of Company´s key management personnel in 2023 and 2022. Remuneration of the Company´s key management personnel 2023 Members of the Company´s Board of Directors Members of the Company´s Supervisory Board Members of the Company´s Audit Committee Other key management personnel of the Group Total compensation CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Amounts paid for activities in the Company´s Board of Directors Financial 23,159 - - - 23,159 Non-financial 688 - - - 688 Amounts paid for activities in the Company´s Supervisory Board Financial - 1,200 - - 1,200 Non-financial - 287 - - 287 Amounts paid for activities in the Company´s Audit Committee Financial - - 288 - 288 Non-financial - - - - - Amounts paid for other activities within the Group Financial - 5,795 1,936 18,885 26,616 Non-financial - 214 56 1,009 1,279 Total expense/(income) from equity settled transactions (Share based payment) Share based payment 50,771 - - 48,433 99,204 Shares transfer to share based payment participants Share based payment - - - - - Cumulated reserve from equity settled transactions Share based payment 63,839 1,010 - 120,869 185,718 Remuneration of the Company´s key management personnel 2022 Members of the Company´s Board of Directors Members of the Company´s Supervisory Board Members of the Company´s Audit Committee Other key management personnel of the Group Total compensation CZK´000 CZK´000 CZK´000 CZK´000 CZK´000 Amounts paid for activities in the Company´s Board of Directors Financial 20,962 - - - 20,962 Non-financial 5,007 - - - 5,007 Amounts paid for activities in the Company´s Supervisory Board Financial - 1,200 - - 1,200 Non-financial - 287 - - 287 Amounts paid for activities in the Company´s Audit Committee Financial - - 288 - 288 Non-financial - - - - - Amounts paid for other activities within the Group Financial - 5,114 1,776 16,823 23,713 Non-financial - 214 56 1,573 1,843 Total expense/(income) from equity settled transactions (Share based payment) Share based payment (390) - - (752) (1,142) Shares transfer to share based payment participants Share based payment (3,722) (550) - (2,399) (6,671) Cumulated reserve from equity settled transactions Share based payment 12,820 954 - 13,432 27,206 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-41 4.25.4 OTHER RELATED PARTY TRANSACTIONS Presented below are the total amounts of transactions concluded with the Company’s related parties: Intercompany transactions 2023 2022 Revenue Costs/Purchases Revenue Costs/Purchases CZK´000 CZK´000 CZK´000 CZK´000 Kofola a.s. (CZ) 514,401 (5,133) 499,794 (5,734) Kofola a.s. (SK) 388,628 (5,562) 354,932 (4,974) RADENSKA d.o.o. 14,961 (14,637) 37,826 (10,203) UGO trade s.r.o. 12,054 (555) 18,072 (459) Studenac, d.o.o. 8,089 - 8,416 - LEROS, s.r.o. 17,189 (470) 15,791 (576) Premium Rosa Sp. z o.o. 10,177 - 10,577 - SANTA-TRANS s.r.o. 1,151 (568) 1,935 (832) F.H.Prager s.r.o. 960 - 593 - AETOS a.s. 654 - 804 - Total 968,264 (26,925) 948,740 (22,778) * Including finance income and dividends. Intercompany receivables and payables 31.12.2023 31.12.2022 Assets Liabilities Assets Liabilities CZK´000 CZK´000 CZK´000 CZK´000 Kofola a.s. (CZ) 275,525 - *306,032 - Kofola a.s. (SK) 208,831 - 182,051 - RADENSKA d.o.o. 213,279 (89,059) 205,313 - UGO trade s.r.o. 48,278 - 52,849 - Studenac, d.o.o. 2,510 - 2,191 - LEROS, s.r.o. 311,695 (3) 289,776 - Premium Rosa Sp. z o.o. 72,783 - 220,324 - SANTA-TRANS s.r.o. 157 - 18 (78) F.H.Prager s.r.o. 11,519 - 5,954 - AETOS a.s. 791 - 973 - Total 1,145,368 (89,062) 1,265,481 (78) * Including Loans provided to related parties (described below). ** Including purchased bonds. Receivables from Loans provided to related parties (excluding interest receivable) 31.12.2023 31.12.2022 Short-term Maturity Short-term Maturity CURR CZK´000 CZK´000 Kofola a.s. (SK) EUR 170,769 12/2024 166,556 12/2023 LEROS, s.r.o. EUR 291,544 12/2024 284,351 12/2023 Premium Rosa Sp. z o.o. EUR 65,831 12/2024 148,263 12/2023 Premium Rosa Sp. z o.o. EUR 2,473 12/2024 2,412 12/2023 UGO trade s.r.o. EUR 46,483 12/2024 52,849 12/2023 Kofola a.s. (CZ) EUR - 12/2024 56,127 12/2023 F.H.Prager s.r.o. CZK 5,500 12/2024 - n/a F.H.Prager s.r.o. CZK 3,000 on demand 4,000 12/2023 Total 585,600 714,558 * Net of loss allowance. Carrying amount of loan provided to Premium Rosa decreased mainly as a result of repayment that is connected with the sale of Grodzisk Wielkopolski plant. Interest rates from loans provided to related parties are concluded at market terms. The loans are not pledged. Loans provided to related parties are connected with the Facility loan agreement which refinanced current loans at that time and a loan for financing RADENSKA d.o.o. acquisition. The reason for the execution of the Facility Loan Agreement was a consolidation of Group financing. Previous bank loans in Company´s subsidiaries were repaid and refinanced by a loan from the Company. All transactions with related parties have been concluded at market terms. The Company has purchased the remaining 10% share in UGO trade s.r.o. through the acquisition of Bilgola fresh s.r.o. (see note 4.28). 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-42 The Company acts as a holding company and as such provides certain services for the other companies in Kofola Group. This comprises, in particular, the provision of: • strategic services, including: cooperation in the preparation of business, marketing, production, investment and financing plans, management of subsidiaries, including their financing; • services related to products (quality department), including: central product development, innovation process management, costing and pricing, production and logistics planning, quality control; • shared services, including: preparation and management of accounting and reporting methods, controlling and reporting, IT services, legal services, back office services, internal audit; and • licenses and trademarks: Kofola ČeskoSlovensko a.s. owns most licenses, trademarks for branded beverages and similar copyrights for the products distributed on the Czechoslovak market, for which the other Group companies pay royalties. 4.26. CASH AND NON-CASH FINANCING ACTIVITIES Net debt reconciliation (in CZK’000) Liabilities from financing activities Cash and cash equivalents Net debt Bank credits and loans Lease As at 1.1.2023 3,226,113 16,719 (137,465) 3,105,367 Proceeds from loans and bank credits received 285,807 - - 285,807 Repayment of loans and bank credits (182,649) - - (182,649) Change in amortized costs 2,618 - - 2,618 Repayment of lease liabilities - (12,786) - (12,786) Lease additions - 10,548 - 10,548 Cash (inflow)/outflow - - (229,004) (229,004) FX differences 52,841 - - 52,841 As at 31.12.2023 3,384,730 14,481 (366,469) 3,032,742 Net debt reconciliation (in CZK’000) Liabilities from financing activities Cash and cash equivalents Net debt Bank credits and loans Lease As at 1.1.2022 3,323,668 31,602 (12,630) 3,342,640 Proceeds from loans and bank credits received 234,169 - - 234,169 Repayment of loans and bank credits (285,705) - - (285,705) Change in amortized costs (4,639) - - (4,639) Repayment of lease liabilities - (13,640) - (13,640) Lease disposals - (1,243) - (1,243) Cash (inflow)/outflow - - (124,835) (124,835) FX differences (41,380) - - (41,380) As at 31.12.2022 3,226,113 16,719 (137,465) 3,105,367 4.27. HEADCOUNT The average headcount in the Company was as follows: Average headcount 2023 2022 Management Board of the Company 6 6 Administration 77 77 Sales, Marketing and Logistic department 117 118 Production division 29 30 Total 229 231 Total number of employees as of 31 December 2023 was 237 persons (as of 31 December 2022: 246 persons). 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-43 4.28. ACQUISITION OF SUBSIDIARIES Acquisition of subsidiary FILIP REAL a.s. In November 2023, the Company concluded an agreement to purchase a 100% stake in FILIP REAL a.s., a company that operates the hotel in Zbraslav, Prague. The following table summarizes the recognized amounts of assets acquired and liabilities assumed at the date of acquisition. Book values and consideration CZK´000 Property, plant and equipment 52,130 Trade and other receivables – current 278 Cash and cash equivalents 329 Trade and other payables – current (732) Income tax liabilities (321) Total identifiable net assets acquired 51,684 Consideration transferred 20,000 Deferred consideration liability – current 19,126 Deferred consideration liability – non-current 35,782 Total consideration 74,908 The reason for the acquisition was the entrance into the new segment and also possible utilisation for own purposes. Acquisition of subsidiary PIVOVARY TRIANGL s.r.o. In November 2023, the Company became a 51% owner in PIVOVARY TRIANGL s.r.o., a holding company for the purpose of the acquisition of company Pivovary CZ Group a.s. (refer to subsequent events). Consideration transferred amounted to CZK 5 thousand. Acquisition of subsidiary Bilgola fresh s.r.o. In December 2023, the Company concluded an agreement to purchase a 100% stake in Bilgola fresh s.r.o., a holding company that owned a remaining 10% share in UGO trade s.r.o. Consideration CZK´000 Consideration transferred 3,000 Deferred consideration liability – current 21,664 Deferred consideration liability – non-current 14,898 Total consideration 39,562 The contingent consideration results from the estimated business results of UGO trade s.r.o. and is discounted with the cost of debt. 4.29. UKRAINE CRISIS War in Ukraine brought new risks and uncertainty to our business. The Group’s management is very closely monitoring the development of the war conflict between Russia and Ukraine. The Group has already provided various forms of support to Ukrainian civilians and intends to continue in these activities as it cares about people in need. The whole situation impacts people, companies and states all around the world. The Group has no material direct exposure either to Russia or Ukraine. The war however impacts whole European economy and led to price increases which was perceived also by the Group. Increasing input prices do not, however, represent a threat to the Group’s or Company’s ability to continue as a going concern as it has sufficient financial resources and is able to control its costs (e.g. by savings in marketing expenses) to a certain level. In case of the ongoing cost pressure, the Group may also increase the output prices to ensure profitability level expected by its stakeholders. As of the date of this report, the production is in operation, we have continuing supplies of materials and energy (we are in close contact with our key suppliers). There were optimizations in CAPEX and OPEX and we plan to continue in this trend in the upcoming period based on actual development. The Group updates its risk matrix on a regular basis and is aware of increased risks in connection with the war in Ukraine (such as already mentioned input prices). There can also be an increased frequency of cyber-attacks but we haven’t been subject to any such attack that would impact our daily operations or would lead to leakage of the sensitive information. Our 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-44 IT department monitors the situation on the daily basis and executes necessary steps to continue in the defence of our data and systems. The Group believes to have sufficient resources from current cash balance and overdrafts. We have an open and long-term relationship with our supportive banking group to whom we communicate our business outlook regularly. Based on the above analysis and assumptions, including the severe but plausible scenarios, management concluded that the Group and the Company will have sufficient resources to continue its business for a period of at least 12 months from the reporting date. As a result, the Company used the going concern basis of accounting in preparing these financial statements. 4.30. OTHER INFORMATION Auditors remuneration The Company was for the years ended 31 December 2023 and 31 December 2022 audited by KPMG Česká republika Audit, s.r.o. (“KPMG”). The following amounts were charged by professional advisors and auditors: Auditors’ remuneration 2023 2022 CZK´000 CZK´000 Audit (KPMG) 1,561 1,370 Other (KPMG) 20 - Other services (Other companies) 2,086 999 Total 3,667 2,369 Tax services include mainly advisory relating to preparation of corporate income tax returns, personal income tax for expats and various consultations in complex tax areas. Electricity purchase contracts The Company has concluded a general agreement on electricity deliveries and as such is not in risk of not having the electricity for its purposes. Electricity consumptions and costs are not material. 4.31. SUBSEQUENT EVENTS In January 2024, the Company has acquired a 49% stake in MIXA VENDING s.r.o., a company focused on the operation of beverage and food vending machines. The agreement includes a three-year option for Kofola to acquire a majority stake in the company. In 2022, MIXA VENDING s.r.o. reached a turnover of over CZK 170 million and EBITDA over CZK 36 million. In January 2024, the Company has established a new subsidiary Supplo s.r.o. which is intended for B2B sales of products and services through the Marketplace model. In January 2024, the Company has acquired a 100% share in PRAGEROVY SADY LIBINA s.r.o., a company that owns apple orchards in the Úsovsko region. In February 2024, the Company has drawn the remaining balance of CAPEX loan tranche of CZK 130 million. In March 2024, PIVOVARY TRIANGL s.r.o. ("TRIANGL") became a 100% owner of Pivovary CZ Group a.s. and FONTÁNA PCZG s.r.o. The shareholders of TRIANGL are Kofola ČeskoSlovensko a.s. (51%), RSJ PE SICAV a.s. (29%) and ÚSOVSKO a.s. (20%). Company Pivovary CZ Group a.s. develops the traditional beer brands Holba, Zubr and Litovel. The Kofola Group can thus enter another category at the regional level in which it can use its business, distribution and marketing know-how. In 2022, Pivovary CZ Group a.s. reached a turnover of over CZK 1,300 million and EBITDA over CZK 250 million. In March 2024, the Company has drawn a loan of CZK 500 million in connection with the acquisition of Pivovary CZ Group. TRIANGL has received a capital contribution of CZK 800 million (from all shareholders on a pro rata basis), intercompany loans of CZK 315 million (from all shareholders on a pro rata basis) and bank loan of CZK 300 million in March 2024. 4. NOTES TO THE SEPARATE FINANCIAL STATEMENTS Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU C-45 Interest rate swaps have been concluded in relation to EUR part of recently drawn loans intended for CAPEX purposes in January 2024 and March 2024. In March 2024, company P.H.Lager s.r.o. was established. The company’s purpose is to focus on the production of F.H.Prager’s portfolio. Kofola ČeskoSlovensko a.s. has purchased 36,997 shares of its own shares (which represents 0.17% of the Company´s share capital) in the total value of CZK 10,063 thousand (CZK 272 per share) from RADENSKA d.o.o. in March 2024. The individual share price was determined based on the price quoted at Prague Stock Exchange. As such, the contract was concluded at market terms. The shares have nominal value of CZK 50 per individual share. The sole purpose of the acquisition of own shares by the Company was to meet obligations arising from share option programmes, or other allocations of shares, to employees or to members of the administrative, management or supervisory bodies of the Company or of an associate company. Substantial majority of shares has been transferred to option scheme participants in March 2024. Initial accounting for the above mentioned business combinations is incomplete at the time the financial statements are authorized for issue, therefore the disclosures required in relation to these business combinations are limited. The settlement agreement on CZK 90 million was concluded between the Company and RADENSKA d.o.o. that settled the outstanding loan payable by the Company and part of the dividend payble by RADENSKA. No other events have occurred after the end of the reporting period that would require adjusting the amounts recognised and disclosures made in the separate financial statements. Kofola ČeskoSlovensko Group Separate financial statements for the year ended 31 December 2023 In accordance with IFRS Accounting Standards as adopted by EU 46 D. APPROVAL FOR P UBLICATION 1. STATUTORY DECLARATION A ND APPR OVAL FOR PU BLICATION 11.4.2024 Janis Samaras Chair of the Board of Directors date name and surname position/role signature 11.4.2024 René Musila Vice-Chair of the Board of Directors date name and surname position/role signature 11.4.2024 Daniel Buryš Vice-Chair of the Board of Directors date name and surname position/role signature 11.4.2024 Martin Pisklák Member of the Board of Directors date name and surname position/role signature 11.4.2024 Martin Mateáš Member of the Board of Directors date name and surname position/role signature 11.4.2024 Marián Šefčovič Member of the Board of Directors date name and surname position/role signature © Kofola ČeskoSlovensko a.s. 2024 3157005DO9L5OWHBQ3592023-01-012023-12-313157005DO9L5OWHBQ3592022-01-012022-12-313157005DO9L5OWHBQ3592023-12-313157005DO9L5OWHBQ3592022-12-313157005DO9L5OWHBQ3592021-12-313157005DO9L5OWHBQ3592022-12-31ifrs-full:IssuedCapitalMember3157005DO9L5OWHBQ3592023-01-012023-12-31ifrs-full:IssuedCapitalMember3157005DO9L5OWHBQ3592023-12-31ifrs-full:IssuedCapitalMember3157005DO9L5OWHBQ3592022-12-31KOF:SharePremiumAndCapitalReorganisationReserveMember3157005DO9L5OWHBQ3592023-01-012023-12-31KOF:SharePremiumAndCapitalReorganisationReserveMember3157005DO9L5OWHBQ3592023-12-31KOF:SharePremiumAndCapitalReorganisationReserveMember3157005DO9L5OWHBQ3592022-12-31ifrs-full:ReserveOfCashFlowHedgesMember3157005DO9L5OWHBQ3592023-01-012023-12-31ifrs-full:ReserveOfCashFlowHedgesMember3157005DO9L5OWHBQ3592023-12-31ifrs-full:ReserveOfCashFlowHedgesMember3157005DO9L5OWHBQ3592022-12-31ifrs-full:ReserveOfSharebasedPaymentsMember3157005DO9L5OWHBQ3592023-01-012023-12-31ifrs-full:ReserveOfSharebasedPaymentsMember3157005DO9L5OWHBQ3592023-12-31ifrs-full:ReserveOfSharebasedPaymentsMember3157005DO9L5OWHBQ3592022-12-31ifrs-full:MiscellaneousOtherReservesMember3157005DO9L5OWHBQ3592023-01-012023-12-31ifrs-full:MiscellaneousOtherReservesMember3157005DO9L5OWHBQ3592023-12-31ifrs-full:MiscellaneousOtherReservesMember3157005DO9L5OWHBQ3592022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember3157005DO9L5OWHBQ3592023-01-012023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember3157005DO9L5OWHBQ3592023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember3157005DO9L5OWHBQ3592022-12-31ifrs-full:TreasurySharesMember3157005DO9L5OWHBQ3592023-01-012023-12-31ifrs-full:TreasurySharesMember3157005DO9L5OWHBQ3592023-12-31ifrs-full:TreasurySharesMember3157005DO9L5OWHBQ3592022-12-31ifrs-full:RetainedEarningsMember3157005DO9L5OWHBQ3592023-01-012023-12-31ifrs-full:RetainedEarningsMember3157005DO9L5OWHBQ3592023-12-31ifrs-full:RetainedEarningsMember3157005DO9L5OWHBQ3592022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember3157005DO9L5OWHBQ3592023-01-012023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember3157005DO9L5OWHBQ3592023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember3157005DO9L5OWHBQ3592022-12-31ifrs-full:NoncontrollingInterestsMember3157005DO9L5OWHBQ3592023-01-012023-12-31ifrs-full:NoncontrollingInterestsMember3157005DO9L5OWHBQ3592023-12-31ifrs-full:NoncontrollingInterestsMember3157005DO9L5OWHBQ3592021-12-31ifrs-full:IssuedCapitalMember3157005DO9L5OWHBQ3592022-01-012022-12-31ifrs-full:IssuedCapitalMember3157005DO9L5OWHBQ3592021-12-31KOF:SharePremiumAndCapitalReorganisationReserveMember3157005DO9L5OWHBQ3592022-01-012022-12-31KOF:SharePremiumAndCapitalReorganisationReserveMember3157005DO9L5OWHBQ3592021-12-31ifrs-full:ReserveOfCashFlowHedgesMember3157005DO9L5OWHBQ3592022-01-012022-12-31ifrs-full:ReserveOfCashFlowHedgesMember3157005DO9L5OWHBQ3592021-12-31ifrs-full:ReserveOfSharebasedPaymentsMember3157005DO9L5OWHBQ3592022-01-012022-12-31ifrs-full:ReserveOfSharebasedPaymentsMember3157005DO9L5OWHBQ3592021-12-31ifrs-full:MiscellaneousOtherReservesMember3157005DO9L5OWHBQ3592022-01-012022-12-31ifrs-full:MiscellaneousOtherReservesMember3157005DO9L5OWHBQ3592021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember3157005DO9L5OWHBQ3592022-01-012022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember3157005DO9L5OWHBQ3592021-12-31ifrs-full:TreasurySharesMember3157005DO9L5OWHBQ3592022-01-012022-12-31ifrs-full:TreasurySharesMember3157005DO9L5OWHBQ3592021-12-31ifrs-full:RetainedEarningsMember3157005DO9L5OWHBQ3592022-01-012022-12-31ifrs-full:RetainedEarningsMember3157005DO9L5OWHBQ3592021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember3157005DO9L5OWHBQ3592022-01-012022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember3157005DO9L5OWHBQ3592021-12-31ifrs-full:NoncontrollingInterestsMember3157005DO9L5OWHBQ3592022-01-012022-12-31ifrs-full:NoncontrollingInterestsMemberiso4217:CZKiso4217:CZKxbrli:shares