Viro Tvornica ŠEĆERA d.d.

Audit Report / Information • Feb 28, 2017

STATEMENT OF PERSON RESPONSIBLE FOR PRODUCTION OF THE THREE-MONTH REPORT FOR 40 2016

With this statement, in compliance with article 410 of the Law on capital market, I state that to the best of our knowledge

• the set of financial reports of VIRO TVORNICA SECERA d.d., Zagreb for the period I-XII 2016, produced by applying International standards of financial reporting and in compliance with the Croatian Law on Accounting, provides an integral and true overview of assets and liabilities, loss and profit, financial position and operations of the company.
• the Management report contains a true overview of business results and position of the company, with a description of the most significant risks and uncertanties to which the company is exposed.

In Virovitica, on February 22, 2017

RESPONSIBLE PERSON

PRESIDENT OF THE MANAGEMENT BOARD:

eljko Zadro, dipl.oec

$\iota r o$

TVORNICA ŠEĆERA d.d.
ZAGREB

Appendix 1 Reporting period:	1.1.2016 to	31.12.2016
	Quarterly Financial Report - TFI-POD
Registration number (MB) 01650971
Identification number of subject (MBS) 010049135
Personal identification number 04525204420 (OIB)
Issueer company: VIRO TVORNICA ŠEĆERA d.d.
Postal code and place 10000	ZAGREB
Street and number ULICA GRADA VUKOVARA 269 g
E-mail address: viro@secerana.hr
Internet address: www.secerana.hr
Code and name of comune/town ZAGREB 133
GRAD ZAGREB Code and county name 21		Number of employees 198
Consolidated statement NO		(at quarter end) NKD/NWC code: 1081
Subsidiaries subject to consolidation (according to IFRS):		Registration number:
Book keeping service:
Contact person: SMOJVER ZDENKA
(fill in only surname and name of contact person) Phone number: 033840122		Fascimile: 033840103
E-mail address: racunovodstvo-viro@secerana.hr
Surname and name ZADRO ŽELJKO (authorised person for representation)
Disclosure documents: 1. Financial statements (balance sheet, profit and loss account, cash flow statement, statement of changesip shareholders' equity and notes to the financial statements 2. Statement of responsible persons for preparation of financial statements

1. Report of the Management Board on position of the Company

Ł U. TVORNICA ŠEĆERA d.d. 4

(signed by authorised person for representation)

BALANCE SHEET
as at 31.12.2016

Item		Last year (net)	Current year (net)
$\mathbf{1}$ ASSETS	$\overline{2}$	$\mathbf{3}$	$\overline{\mathbf{4}}$
A) RECEIVABLES FOR SUBSCRIBED BUT NOT PAID-IN CAPITAL
B) LONG-TERM ASSETS (003+010+020+029+033)	001
I. INTANGIBLE ASSETS (004 to 009)	002	765.801.159	749.273.897
1. Assets development	003	86.315	136.740
2. Concessions, patents, licences fees, trade and service marks, software and other rights	004
3. Goodwill	005	86.315	136.740
4. Prepayments for purchase of intangible assets	006
5. Intangible assets in preparation	007
6. Other intangible assets	008
II. TANGIBLE ASSETS (011 to 019)	009
1. Land	010	168.306.215	179.990.028
2. Buildings	011	5.548.592	5.548.592
3. Plant and equipment	012	71.331.533	68.340.805
4. Tools, facility inventory and transport assets	013	83.772.355	66.153.617
5. Biological assets	014
6. Prepayments for tangible assets	015
7. Tangible assets in progress	016	307.627	34.576.964
8. Other tangible assets	017	5.112.658	3.286.081
9. Investments in buildings	018	9.300	9.300
III. LONG-TERM FINANCIAL ASSETS (021 to 028)	019	2.224.150	2.074.669
1. Investments (shares) with related parties	020	597.408.629	569.147.129
2. Loans given to related parties	021	419.450.043	419.450.043
3. Participating interest (shares)	022	177.343.482	149.216.583
4. Loans to entrepreneurs in whom the entity holds participating interests	023
5. Investments in securities	024
6. Loans, deposits and similar assets	025	3.248	3.248
7. Other long - term financial assets	026	611.856	477.255
8. Investments accounted by equity method	027
IV. RECEIVABLES (030 to 032)	028
1. Receivables from related parties	029	0	$\overline{0}$
2. Receivables from based on trade loans	030
3. Other receivables	031
V. DEFERRED TAX ASSETS	032
C) SHORT TERM ASSETS (035+043+050+058)	033
I. INVENTORIES (036 to 042)	034	435.839.083	668.453.422
1. Raw-material and supplies	035	179.521.872	434.941.674
2. Work in progress	036	15.634.383	55.191.037
3. Finished goods	037
4. Merchandise	038	74.153.867	213.847.092
5. Prepayments for inventories	039	47.598.499	116.054.925
6. Long - term assets held for sales	040	42.135.123	49.848.620
7. Biological assets	041
	042
II. RECEIVABLES (044 to 049)	043	204.219.640	184.412.623
1. Receivables from related parties	044	71.406.529	1.259.876
2. Accounts receivable	045	121.960.367	133.612.862
3. Receivables from participating parties	046
4. Receivables from employees and members of related parties	047	2.372	890
5. Receivables from government and other institutions	048	10.743.689	49.421.570
6. Other receivables	049	106.683	117.425
III. SHORT TERM FINANCIAL ASSETS (051 to 057)	050	45.095.292	26.687.789
1. Shares (stocks) in related parties	051
2. Loans given to related parties	052	1.735.697	4.681.963
3. Participating interests (shares)	053
4. Loans to entrepreneurs in whom the entity holds participating interests	054
5. Investments in securities	055
6. Loans, deposits, etc.	056	35.656.652	12.632.314
7. Other financial assets	057	7.702.943	9.373.512
IV. CASH AT BANK AND IN CASHIER	058	7.002.279	22.411.336
D) PREPAID EXPENSES AND ACCRUED REVENUE	059	7.761.345	5.501.947
E) TOTAL ASSETS (001+002+034+059)	060	1.209.401.587	1.423.229.266
F) OFF-BALANCE RECORDS	061	281.936.097	291 648 942

Item			(net)
$\mathbf{1}$	$\mathbf{2}$	3	$\overline{4}$
A) CAPITAL AND RESERVES (063+064+065+071+072+075+078)
I. SUBSCRIBED CAPITAL	062	628.667.495	665.899.638
II. CAPITAL RESERVES	063	249.600.060	249.600.060
III.RESERVES FROM PROFIT (066+067-068+069+070)	064	10.368.101	10.368.101
1. Reserves prescribed by low	065	56.346.673	56.346.673
2. Reserves for treasury shares	066	12.480.003	12.480.003
3. Treasury stocks and shares (deduction)	067	43.866.670	43.866.670
4. Statutory reserves	068	0	$\Omega$
5. Other reserves	069
IV. REVALUATION RESERVES	070
	071
V. RETAINED EARNINGS OR ACCUMULATED LOSS (073-074)	072	318.901.121	312.352.661
1. Retained earnings	073	318.901.121	312.352.661
2. Accumulated loss	074
VI. PROFIT/LOSS FOR THE CURRENT YEAR (076-077)	075	$-6.548.460$	37.232.143
1. Profit for the current year	076		37.232.143
2. Loss for the current year	077	6.548.460
IX. MINORITY INTERESTS	078
B) PROVISIONS (080 to 082)	079	0	$\mathbf 0$
1. Provisions for pensions, severance pay, and similar liabilities	080
2. Reserves for tax liabilities	081
3. Other reserves	082
C) LONG - TERM LIABILITIES (084 to 092)	083	305.499.913	229.589.347
1. Liabilities to related parties	084
2. Liabilities for loans, deposits etc.	085	4.015.994	1.375.750
3. Liabilities to banks and other financial institutions	086	301.483.919	228.213.597
4. Liabilities for received prepayments	087
5. Accounts payable	088
6. Liabilities arising from debt securities	089
7. Liabilities to entrepreneurs in whom the entity holds participating interests	090
8. Other long-term liabilities
9. Deferred tax liability	091
D) SHORT - TERM LIABILITIES (094 to 105)	092
1. Liabilities to related parties	093	274.543.567	527.558.401
2. Liabilities for loans, deposits etc.	094	2.393.482	30.738.212
3. Liabilities to banks and other financial institutions	095	7.992.303	7.443.244
4. Liabilities for received prepayments	096	66.603.095	101.174.511
5. Accounts payable	097	3.275.008	1.302.698
6. Liabilities arising from debt securities	098	104.881.026	313.719.185
	099
7. Liabilities to entrepreneurs in whom the entity holds participating interests 8. Liabilities to employees	100
	101	1.155.944	1.284.066
9. Liabilities for taxes, contributions and similar fees	102	5.514.605	2.101.273
10. Liabilities to share - holders	103	31.703	30.963
11. Liabilities for long-term assets held for sale	104
12. Other short - term liabilities	105	82.696.401	69.764.249
E) DEFFERED SETTLEMENTS OF CHARGES AND INCOME DEFERRED TO FUTURE PERIOD	106	690.612	181.880
F) TOTAL - CAPITAL AND LIABILITIES (062+079+083+093+106)	107	1.209.401.587	1.423.229.266
G) OFF-BALANCE RECORDS	108	281.936.097	291.648.942
APPENDIX to balance sheet(to be filled in by entrepreneur that prepares consolidated annual financial report)
CAPITAL AND RESERVES
1. Attributed to equity holders of parent company	109
2. Attributed to minority interest	110

PROFIT AND LOSS ACCOUNT
for the period 01.01.2016. do 31.12.2016.

Item			Last year	Current year
$\mathbf{1}$		Comulative	Quartely	Comulative	Quartely
I. OPERATING REVENUE (112+113)	$\overline{2}$ 111	3 920.723.764	$\overline{\mathbf{4}}$ 415.001.950	5 700.509.756	6
1. Sales revenue	112	916.069.380	412.493.177	696.989.106	357.913.815 356.312.911
2. Other operating revenues	113	4.654.384	2.508.773	3.520.650	1.600.904
II. OPERATING EXPENSES (115+116+120+124+125+126+129+130)	114	917.161.191	428.217.826	656.350.120	320.602.802
1. Changes in value of work in progress and finished products	115	168.687.561	148.986.742	-138.523.037	$-82.897.367$
2. Material costs (117 to 119)	116	679.505.672	259.437.299	725.178.607	382.045.364
a) Raw material and material costs b) Costs of goods sold	117	338.787.709	120.498.510	510.624.754	335.806.332
c) Other external costs	118	305.901.254	133.092.481	181.160.920	37.442.516
3. Staff costs (121 to 123)	119	34.816.709	5.846.308	33.392.933	8.796.516
a) Net salaries and wages	120	19.829.901	5.318.534	21.966.324	6.185.503
b) Cost for taxes and contributions from salaries	121	12.245.975	3.309.141	13.578.823	3.850.366
c) Contributions on gross salaries	122	4.683.623	1.231.984	5.194.585	1.439.383
4. Depreciation	123	2.900.303	777.409	3.192.916	895.754
5. Other costs	124	31.256.001	7.427.441	28.759.248	6.574.580
6. Impairment (127+128)	125	10.734.767	3.071.182	10.773.515	2.736.376
a) Impairment of long-term assets (financial assets excluded)	126			$\mathbf{0}$	$\mathbf{0}$
b) Impairment of short - term assets (financial assets excluded)	127
7. Provisions	128
8. Other operating costs	129
III. FINANCIAL INCOME (132 to 136)	130	7.147.289	3.976.628	8.195.463	5.958.346
1. Interest income, foreign exchange gains, dividends and similar income from related	131	11.950.936	1.758.196	13.825.221	4.127.499
parties 2. Interest income, foreign exchange gains, dividends and similar income from non - related	132	2.491.641	504.949	2.804.648	2.105.806
parties and other entities	133	9.157.795	1.253.247	10.520.573	2.021.693
3. Share in income from affiliated entrepreneurs and participating interests	134
4. Unrealized gains (income) from financial assets 5. Other financial income	135	301.500		500.000
	136
IV. FINANCIAL EXPENSES (138 do 141) 1. Interest expenses, foreign exchange losses, dividends and similar expenses from related	137	22.061.969	9.115.288	20.752.714	7.063.143
parties 2. Interest expenses, foreign exchange losses, dividends and similar expenses from non -	138	927.316		2.957.899
related parties and other entities	139	20.693.318	8.808.023	17.292.315	6.933.142
3. Unrealized losses (expenses) on financial assets	140
4. Other financial expenses	141	441.335	307.265	502.500	130.000
V. INCOME FROM INVESTMENT - SHARE IN PROFIT OF ASSOCIATED ENTREPRENEURS	142
VI. LOSS FROM INVESTMENT - SHARE IN LOSS OF ASSOCIATED ENTREPRENEURS	143
VII. EXTRAORDINARY - OTHER INCOME	144
VIII. EXTRAORDINARY - OTHER EXPENSES	145
IX. TOTAL INCOME (111+131+142 + 144)	146	932.674.700	416.760.146	714.334.977	362.041.314
X. TOTAL EXPENSES (114+137+143 + 145)	147	939.223.160	437.333.114	677.102.834	327.665.945
XI. PROFIT OR LOSS BEFORE TAXATION (146-147)	148	$-6.548.460$	$-20.572.968$	37.232.143	34.375.369
1. Profit before taxation (146-147)	149	$\mathbf{0}$	$\mathbf 0$	37.232.143	34.375.369
2. Loss before taxation (147-146)	150	6.548.460	20.572.968
XII. PROFIT TAX	151
XIII. PROFIT OR LOSS FOR THE PERIOD (148-151)	152	$-6.548.460$	$-20.572.968$	37.232.143	34.375.369
1. Profit for the period (149-151) 2. Loss for the period (151-148)	153	$\mathbf 0$	$\circ$	37.232.143	34.375.369
	154	6.548.460	20.572.968	0
APPENDIX to P&L account (to be filled in by entrepreneur that prepares consolidated financial report) XIV. PROFIT OR LOSS FOR THE PERIOD
1. Attributed to equity holders of parent company
2. Attributed to minority interest	155
STATEMENT OF OTHER COMPREHENSIVE INCOME (IFRS)	156
I. PROFIT OR LOSS FOR THE PERIOD (= 152)
II. OTHER COMPREHENSIVE INCOME / LOSS BEFORE TAX (159 do 165)	157	$-6.548.460$	$-20.572.968$	37.232.143	34.375.369
1. Exchange differences on translation of foreign operations	158	$\mathbf 0$	$\mathbf{0}$	O
2. Movements in revaluation reserves of long - term tangible and intangible assets	159
3. Profit or loss from reevaluation of financial assets available for sale	160
4. Gains or losses on efficient cash flow hedging	161
5. Gains or losses on efficient hedge of a net investment in foreign countries	162
6. Share in other comprehensive income / loss of associated companies	163
7. Actuarial gains / losses on defined benefit plans	164
III. TAX ON OTHER COMPREHENSIVE INCOME FOR THE PERIOD	165
IV. NET OTHER COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD (158-166)	166
V. COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD (157+167)	167 168	0	O	$\mathbf{0}$
APPENDIX to Statement of other comprenhensive income (to be filled in by entrepreneur that prepares consolidated financial report)		$-6.548.460$	$-20.572.968$	37.232.143	34.375.369
VI. COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD
1. Attributed to equity holders of parent company	169
2. Attributed to minority interest	170

for the period	1.1.2016	do	31.12.2016
Item			AOP code	Last year	Current year
$\mathbf 1$ CASH FLOW FROM OPERATING ACTIVITIES	$\overline{2}$	3	$\overline{\bf 4}$
1. Profit before tax
2. Depreciation			001	$-6.548.460$	37.232.143
3. Increase in short term liabilities			002	31.256.001	28.759.248
4. Decrease in short term receivables			003		218.992.477
5. Decrease in inventories			004		19.807.017
6. Other increase in cash flow			005	148.883.732
I. Total increase in cash flow from operating activities (001 to 006)			006	12.388.084	20.666.901
1. Decrease in short term liabilities			007	185.979.357	325,457.786
2. Increase in short term receivables			008	80.072.247
3. Increase in inventories			009	101.163.720
4. Other decrease in cash flow			010		255.419.802
			011	6.273.084	6.114.639
II. Total decrease in cash flow from operating activities (008 to 011) A1) NET INCREASE IN CASH FLOW FROM OPERATING ACTIVITIES			012	187.509.051	261.534.441
AKTIVNOSTI (007-012) A2) NET DECREASE IN IN CASH FLOW FROM OPERATING ACTIVITIES			013		63.923.345
AKTIVNOSTI (012-007)			014	1.529.694
CASH FLOW FROM INVESTING ACTIVITIES
1. Cash inflows from sales of long-term tangible and intangible assets			015	13.344	217.805
2. Cash inflows from sales of equity and debt instruments			016
3. Interests receipts			017	2.683.636	1.679.568
4. Dividend receipts			018	40.596
5. Other cash inflows from investing activities			019	47.639.936	56.703
III. Total cash inflows from investing activities (015 to 019)			020		34.039.033
1. Cash outflow for purchase of long-term tangible and intangible assets			021	50.377.512	35.993.109
2. Cash outflow for acquisition of equity and debt financial instruments			022	13.536.041	40.711.291
3. Other cash outflow for investing activities			023
IV. Total cash outflow for investing activities (021 do 023)			024	108.420.045	5.777.533
B1) NET INCREASE IN CASH FLOW FROM INVESTING ACTIVITIES (020-024)				121.956.086	46.488.824
B2) NET DECREASE IN CASH FLOW FROM INVESTING ACTIVITIES			025
AKTIVNOSTI (024-020)			026	71.578.574	10.495.715
CASH FLOW FROM FINANCIAL ACTIVITIES
1. Cash inflow from issuing property and debt financial instruments			027
2. Proceeds from the credit principal, promissory notes, borrowings and other loans			028	465.716.896	177.339.572
3. Other proceeds from financial activities			029	338.000.000	247.628.278
V. Total cash inflows from financial activities (027 to 029)			030	803.716.896	424.967.850
1. Cash outflow for repayment of credit principal and bonds			031	392.268.843	212.228.499
2. Cash outflow for dividends paid			032
3. Cash outflow for financial lease			033	6.627.929	5.977.777
4. Cash outflow for purchase of treasury shares			034
5. Other cash outflow for financial activities			035	339.809.853	244.780.147
VI. Total cash outflow for financial activities (031 to 035)			036	738.706.625	462.986.423
C1) NET INCREASE IN CASH FLOW FROM FINANCIAL ACTIVITIES AKTIVNOSTI (030-036)			037	65.010.271
C2) NET DECREASE IN CASH FLOW FROM FINANCIAL ACTIVITIES AKTIVNOSTI (036-030)			038		38.018.573
Total increase in cash flow (013 - 014 + 025 - 026 + 037 - 038)					15.409.057
Total decrease in cash flow (014 - 013 + 026 - 025 + 038 - 037)				8.097.997
Cash and cash equivalents at the beginning of the period				15.100.276
Increase of cash and cash equivalents			041 042	0	7.002.279
Decrease of cash and cash equivalents				8.097.997	15.409.057
Cash and cash equivalents at the end of the period			043 044
				7.002.279	22.411.336

STATEMENT OF CASH FLOWS - INDIRECT METHOD

			STATEMENT OF CHANGES IN EQUITY
for the period	1.1.2016	do	31.12.2016

SI GISPOIIOG 1.1.4010 uv J1.14.4010 Item	AOP code	Last year	Current year
$\mathbf{1}$	$\overline{2}$	$\overline{3}$	$\overline{4}$
1. Subscribed capital	001	249,600,060	249.600.060
2. Capital reserves	002	10.368.101	10,368,101
3. Reserves from profit	003	56.346.673	56.346.673
4. Retained earnings or accumulated loss	004	318.901.121	312.352.661
5. Profit or loss for the current year	005	$-6.548.460$	37.232.143
6. Revaluation of long - term tangible assets	006
7. Revaluation of intangible assets	007
8. Revaluation of financial assets available for sale	008
9. Other revaluation	009
10. Total capital and reserves (AOP 001 do 009)	010	628.667.495	665.899.638
11. Currency gains and losses arising from net investement in foreign operations	011
12. Current and deferred taxes (part)	012
13. Cash flow hedging	013
14. Changes in accounting policy	014
15. Correction of significant errors in prior period	015
16. Other changes of capital	016
17. Total increase or decrease in capital (AOP 011 do 016)	017	$\circ$
17 a. Attributed to equity holders of parent company	018
17 b. Attributed to minority interest	019

Notes

THERE WERE NO ACCOUNTING POLICY CHANGES IN RELATION TO HTE ANNUAL FINANCIAL REPORT FOR YEAR 2015.