Viro Tvornica ŠEĆERA d.d.

Quarterly Report • Jul 30, 2020

Viro tvornica šećera d.d. Annual Report for the Year 2019 together with the Independent Auditor's Report

	Page
Annual Management Board Report on the Business Performance and Position of the Company for the Year 2019	1-12
Responsibility of the Management Board for the Annual Financial Statements	13
Independent Auditor's Report	14-16
Unconsolidated Statement of Other Comprehensive Income	17
Unconsolidated Statement of Financial Position	18 - 19
Unconsolidated Statement of Changes in Equity	20
Unconsolidated Statement of Cash Flows	21
Notes to the Unconsolidated Financial Statements	22-76
Standard Annual Unconsolidated Financial Statements as at and for the year ended	77
31 December 2019

Annual Management Board Report on the Business Performance and Position of the Company for the Year 2019

Zagreb, June 2020

Contents

	1. Introduction
	2. Risk exposure
a.	Capital risk
	b. Interest risk
	c. Liquidity risk
	3. Financial position of the company
	4. Employees
	5. Investment
	6. Environment and ecology
	7. Planned short-term development

Annex 1 - Audited Unconsolidated Financial Statements

1. Introduction

GENERAL INFORMATION: VIRO TVORNICA ŠEĆERA d.d. (hereinafter: the

Company)
----------

Establishment:	19 June 2002
Activities.	Production of sugar
Headquarters:	Zagreb, Ulica grada Vukovara 269g
Phone.	Zagreb, +385 1 2369 777
	Virovitica, + 385 33 840 101
Pax:	Zagreb, +385 1 2369 777
	Virovitica, + 385 33 840 103
E-mail:	info@secerana.hr
Personal identification number ORB:	04525204420
MBS registration number:	010049135
Identification number:	1650971
Share capital of the Company:	HRK 249,600,060.00
Number of shares.	Regular - ticker VIRO-R-A: 1.386.667
Ownership structure:	EOS-Z d.o.o.o. - 33.64%
	ROBIC d.o.o. - 22.23%
	CRISTAL FINANCIERE - 17%
	Treasury shares 3.07%
	Other - 24.06%
Traded on:	Zagreb Stock Exchange - Official market
Management Board:	Zeljko Zadro, president Darko Krstić, member Ivo Rešić, member
Supervisory Board:	Marinko Zadro, president

In the business year 2019, the company generated total revenues for HRK 685,875,431. Of that, total operating income amounts to HRK 653,313,666, and financial income amounts to HRK 32,561,765.

Total expenses in the business year 2019 amount to HRK 584,313,138, of which HRK 560,814,363 are operating expenses, while financial expenses amounted to HRK 23,498,775. In the business year 2019, the company made a profit in the amount of HRK 101,562,293. Following the abolition of production quotas in the EU in October 2017, there was a major disturbance on the EU sugar market in the following year, which still has a negative impact on the Company's operations, as the revenuc from the sale of sugar is the most important item. Three domestic sugar factories realized that the only way for them to survive on the market is to combine production into one business system.

Following the abolition of production quotas in the EU in October 2017, there was a major disturbance on the EU sugar market in the following year, which still has a negative impact on the Company's operations, as the revenue from the sale of sugar is the most important item. Three domestic sugar factories realized that the only way for them to survive on the market is to combine production into one business system.

The majority owners of the Viro tvornica secera d.d. and Sladorana d.o.o. on the one hand and Tvornica šećera Osijek d.o.o. on the other hand (hereinatter: TSO), in principle, reached an agreement on connecting all sugar factories into one business system. After several months of considering this intention, the Croatian Competition Agency approved the concentration, after which a series of steps that led to the purchase and sale of production assets at the end of 2019 and the consequent transfer of workers from the three sugar factories to the Hrvatska industrija šećera d.d. with the last day of that year.

In this regard, it should be noted that the Company didn't process sugar beet as an independent business system in 2019, as this was and will continue to be done within the newly established company Hrvatska industrija šećera d.d.

Within the production, there were 63,049 tons of white cane sugar produced, and this production will take place in the future within the Hrvatska industrija šećera d.d.

As pointed out in the introduction to this report, despite a certain loss at the level of operating operations, the Company made a profit of HRK 101.56 million. This result was mostly influenced by the sale of production assets to the Hrvatska industrija šećera d.d. which, as a new entity, continued to operate from the second half of 2019, while the Company sold existing stocks of goods, and performed management activities as a holding company,

Management Board of the Company

Željko Zadro, president Darko Krstić, member Ivo Rešić, member

2. Risk exposure

From the perspective of an independent entity, the company should significantly reduce certain risks since most of the business activities have been transferred to the newly established entity, Hrvatska industrija šećera.

a. Capital risk

The Company's sources of assets consist of debt, which includes trade payables and credit liabilities less cash and cash equivalents (so-called net debt) and equity, which includes share capital, reserves and retained earnings.

The competent services of the Company regularly analyse the capital structure. As part of this analysis, the service analyses the cost of capital and the risk associated with each item of capital.

b. Interest risk

The Company is exposed to interest rate risk on part of its financial debt. The Company seeks to reduce financial debt and thus reduce the risk in question.

The sale of assets related to sugar production secured funds that closed existing credit liabilities in the amount of € 32.37 million.

c. Liquidity risk

The Company manages its liquidity by continuously monitoring planned and realized cash flows and adjusting the maturity structure of liabilities and receivables.

All liabilities to creditors will be settled on time and in accordance with the agreement reached with creditors. A high degree of agreement has been reached with certain creditors on the manner and dynamics of repayment and the Management Board believes that written agreements will be concluded soon. If it does not prove certain that the liabilities can be properly settled, the Management Board is also considering the implementation of a recapitalization to which creditors would be invited.

d. Credit risk, currency risk and the Company's exposure to price risk

As already mentioned, due to the reduction of business volume and the transfer of business activity to the newly established company, these risks should be significantly reduced.

3. Financial position of the company

Table 1. Balance sheet as at 31 December 2019

tem	ADP ਕਰਨੀਵ	31 December 2018	31 December 2019
1	2	3	4
A) RECEIVABLES FOR SUBSCRIBED CAPITAL UNPAID	001	0	0
B) FIXED ASSETS (ADP 003+010+020+031+036)	002	649,438,487	539,123,292
I INT ANGIBLE ASSETS (ADP 004 to 009)	003	2,266,166	0
1 Research and development	004	0	0
2 Concessions, patents, licences, trademarks, software and other
rights	005	2,266,166	0
3 Goodwill	006	0	0
4 Advance payments for purchase of intangible assets	007	0	0
5 Intangible assets in preparation	003	0	0
6 Other intangible assets	009	0	0
II TANGIBLE ASSETS (ADP 011 to 019)	010	135,424,536	65,191,679
1 Land	011	5,548,592	23,538,630
2 Buildings	012	59,336,370	1,824,100
3 Plant and equipment	013	32,708,188	2,384,080
4 Tools, working inventory and transportation assets	014	0	0
5 Biological assets	015	0	0
	016	33,816,284	33,930,280
6 Advance payments for purchase of tangible assets
7 Tangible assets in preparation	017	2,230,095	2,230,095
8 Other tangible assets	018	9,300	9,300
9 Investment property	019	1,775,707	1,275,194
III FINED FINANCIAL ASSETS (ADP 021 to 030)	020	511,747,785	473,931,613
1 Investments in holdings (shares) of undertakings within the group	021	424,406,807	407,586,783
2 Investments in other securities of undertakings within the group	022	0	0
3 Loans, deposits, etc. to undertakings within the group	023	85,506,383	63,021,922
4 Investments in holdings (shares) of companies linked by virtue of participating interest	(024	0	0
5 Investment in other securities of companies linked by virtue of participating interest	025	0	0
6 Loans, deposits etc. given to companies linked by virtue of participating interest	026	0	0
7 Investments in securities	027	13,670	17,908
8 Loans, deposits, etc. given	(0.43	1,820,925	3,305,000
9 Other investments accounted for using the equity method	029	0	0
10 Other fixed financial assets	(1)30)	0	0
IV RECEIVABLES (ADP 032 to 035)	031	0	0
1 Receivables from undertakings within the group	032	0	0
2 Receivables from companies linked by virtue of participating
interests	033	0	0
3 Customer receivables	034	0	0
4 Other receivables	035	0	0
V. Deferred tax assets	036	0	0
C) CURRENT ASSETS (ADP 038+046+053+063)	037	459,850,497	320,845,210
I INVENTORIES (ADP 039 to 045)	038	132,389,263	28,212,969
1 Raw materials	039	86,116,520	536,944
2 Work in progress	040	0	0

3 Finished goods	041	33,585,691	7,687,154
4 Merchandise	042	8,812,000	18,727,690
5 Advance payments for inventories	043	3,875,052	1,261,181
6 Fixed assets held for sale	044	0	0
7 Biological assets	045	0	0
II RECEIVABLES (ADP 047 to 052)	046	73,878,194	80,285,191
1 Receivables from undertakings within the group	047	36,568,429	67,013,639
2 Receivables from companies linked by virtue of participating			0
interest	048	0
3 Customer receivables	049	27,291,561	10,247,084
4 Receivables from employees and members of the undertaking	050	15	0
5 Receivables from government and other institutions	051	7,670,427	2,491,595
6 Other receivables	052	2,347,762	532,873
III SHORT-TERM FINANCIAL ASSETS (ADP 054 to 062)	053	253,366,282	210,520,857
1 Investments in holdings (shares) of undertakings within the group	054	0	0
2 Investments in other securities of undertakings within the group	055	0	0
3 Loans, deposits, etc. to undertakings within the group	056	244,945,825	207.690,998
4 Investments in holdings (shares) of companies linked by virtue
of participating interest	057	0	0
5 Investment in other securities of companies linked by virtue of participating interest	058	0	0
6 Loans, deposits etc. given to companies linked by virtue of participating interest	11:20	0	0
7 Investments in securities	060	0	0
8 Loans, deposits, etc. given	061	7,720,457	2,829,859
9 Other financial assets	062	700,000	0
IV CASH AT BANK AND IN HAND	063	216,758	1,826,193
D ) PREPAID EXPENSES AND ACCRUED INCOME	064	760,923	73.178
E) TOTAL ASSETS (ADP 001+002+037+064)	065	1,110,049,907	860,042,280
OFF-BALANCESHI3D THEMS	066	80,761,205	32,571,803
CAPITAL AND DIABILITIES
A) CAPITAL AND RESERVES (ADP 068 to
070+076+077+081+084+087)	067	530,936,108	631,887,468
I. INITIAL (SUBSCRIBED) CAPITAL	068	249,600,060	249,600,060
II CAPITAL RESERVES	060	10,368,101	10,368,102
III RESERVES FROM PROFIT (ADP 071+072-073+074+075)	070	51,711,553	51,100,618
1 Legal reserves	071	12,480,003	12,480,003
2 Reserves for treasury shares	072	39,231,550	38,620,615
3 Treasury shares and holdings (deductible item)	073	0	0
4 Statutory reserves	074	0	0
5 Other reserves	075	0	0
IV REVALUATION RESERVES	076	0	0
V FAIR VALUE RESERVES (ADP 078 to 080)	0777	0	0
1 Fair value of financial assets available for sale	078	0	0
2 Cash flow hedge - effective portion	079	0	0
3 Hedge of a net investment in a foreign operation - effective
portion	0830	0	0
VI RETAINED PROFIT OR LOSS BROUGHT FORWARD (ADP 082-083)	081	236,919,469	219,256,394
1 Retained profit	0832	236,919,469	219,256,394
2 Loss brought forward	11:33	0	0
VII PROFIT OR LOSS FOR THE BUSINESS YEAR (ADP 085- 086)	084	-17,663,075	101,562,294
1 Profit for the business year	035	0	101,562,294

2 Loss for the business year	086
VIII MINORITY (NON-CONTROLLING) INTEREST	087
B) PROVISIONS (ADP 089 to 094)	088
1 Provisions for pensions, termination benefits and similar
obligations	089
2 Provisions for tax liabilities	090
3 Provisions for ongoing legal cases	191
4 Provisions for renewal of natural resources	192
5 Provisions for warranty obligations	1103
6 Other provisions	194
C) LONG-TERM LIABILITIES (ADP 096 to 106)	095
1 Liabilities towards undertakings within the group	096
2 Liabilities for loans, deposits, etc. to companies within the
group	097
3 Liabilities towards companies linked by virtue of participating	00%
interest
4 Liabilities for loans, deposits etc. of companies linked by virtue of participating interest	000
5 Liabilities for loans, deposits etc.	100
6 Liabilities towards banks and other financial institutions	101
7 Liabilities for advance payments	102
8 Liabilities towards suppliers	103
9 Liabilities for securities	104
10 Other long-term liabilities	105
11 Deferred tax liability	106
D) SHORT-TERM LIABILITIES (ADP 108 to 121)	107
1 Liabilities towards undertakings within the group	108
2 Liabilities for loans, deposits, etc. to companies within the
group	109
3 Liabilities towards companies linked by virtue of participating interest	110
4 Liabilities for loans, deposits etc. of companies linked by virtue
of participating interest	1111
5 Liabilities for loans, deposits etc.	112
6 Liabilities towards banks and other financial institutions	113
7 Liabilities for advance payments	114
8 Liabilities towards suppliers	115
9 Liabilities for securities	116
10 Liabilities towards employees	117
11 Taxes, contributions and similar liabilities	118
12 Liabilities arising from the share in the result	119
13 Liabilities arising from fixed assets held for sale	120
14 Other short-term liabilities	1221
E) ACCRUALS AND DEFERRED INCOME
	1222
F) TOTAL - LIABILITIES (ADP 067+088+095+107+122)	123
G) OFF-BALANCE SHEET ITEMS	124

Source: the Company

0

0

0

0

0

0

0

0

0

0

0

0

0

0 0

0

0

0 0

0

0

0

220,560,841

723,005

837,342

4,408,554

57,679,599

6,944,781

164,390

624,287

30,963 0

15,329,408

860,042,280

32,571,803

143,914

133,818,512

7,450,057

7,450,057

17,663,075

8,834,992

8,834,992

86,354,623

0

0 0

0

0

0

0

0

0

0

0 0

0

0

0

0

0

0

0

0

6,462,091

281,072,338

25,170,938

167,748,686

1,554,340

840,710

30,963

209,958 791,079

1,110,049,907

80,761,205

483,133,105

43,081

208,554 86,146,069

Table 2. Statement o f profit or loss
---------------------------------------	--	--	--	--	--	--	--

kem	ADP apple	31 822 82018	39. Bread annierer 20000
	2	3	4
I OPERATING INCOME (ADP 126 to 130)	125	547,721,980	653,313,666
1 Income from sales with undertakings within the group	126	50,205,871	43,403,466
2 Income from sales (outside group)	127	477,419,070	453,417,504
3 Income from the use of own products, goods and services	128	56,096	34,469
4 Other operating income with undertakings within the group	129	200,947	1,152,821
5 Other operating income (outside the group)	130	19,839,996	155,305,406
II OPERATING EXPENSES (ADP 132+133+137+141+142+143+146+153)	131	609,567,032	560,814,363
1 Changes in inventories of work in progress and finished goods	1392	84,799,681	25,875,196
2 Material costs (ADP 134 to 136)	133	443,507,607	490,537,284
a) Costs of raw material	134	110,021,200	186,840,468
b) Costs of goods sold	135	295,196,809	280,291,683
c) Other external costs	136	38,289,598	23,405,133
3 Staff costs (ADP 138 to 140)	137	24,293,618	12,031,230
a) Net salaries and wages	138	15,245,560	7,454,377
b) Tax and contributions from salaries expenses	139	5,695,085	2,965,677
c) Contributions on salaries	140	3,352,973	1,611,176
4 Depreciation	141	23,853,533	8,290,916
5 Other expenses	142	6,210,291
6 Value adjustments (ADP 144+145)	143	10,759,251	4,987,179
a) fixed assets other than financial assets	144	0	0
b) current assets other than financial assets			0
7 Provisions (ADP 147 to 152)	145	10,759,251	0
a) Provisions for pensions, termination benefits and similar	146	1,945,949	0
obligations	147	0	0
b) Provisions for tax liabilities	148	0	0
c) Provisions for ongoing legal cases	149	0	0
d) Provisions for renewal of natural resources	150	0	0
e) Provisions for warranty obligations	151	0	0
f) Other provisions	152	1,945,949	0
8 Other operating expenses	153	14,197,102	19,092,558
III FINANCIAL INCOME (ADP 155 to 164)	154	68,674,110	32,561,765
1 Income from investments in holdings (shares) of undertakings within the group	155	0	0
2 Income from investments in holdings (shares) of companies linked by virtue of participating interest	156	0	0
3 Income from other long-term financial investment and loans granted to undertakings within the group	157	0	0
4 Other interest income from operations with undertakings within the group	158	12,576,189	12,092,528
5 Exchange rate differences and other financial income from operations with undertakings within the group	150	1,117,718	0
6 Income from other long-term financial investments and loans	160	0	0
7 Other interest income	161	723,691	018,856
8 Exchange rate differences and other financial income	162	7,031,200	2,323,918
9 Unrealised gains (income) from financial assets	163	300,500	0
10 Other financial income	164	46,924,812	17,226,463
			8

IV FINANCIAL EXPENDITURE (ADP 166 to 172)	165	24,492,133	23,498,775
1 Interest expenses and similar expenses with undertakings	166	82,639	24,771
within the group
2 Exchange rate differences and other expenses from operations	167	3,082,572	671,993
with undertakings within the group 3 Interest expenses and similar expenses	168	15,854,716	13,970,950
4 Exchange rate differences and other expenses	169	3,593,433	3,162,327
5 Unrealised losses (expenses) from financial assets	170	0	0
6 Value adjustments of financial assets (net)	171	0	0
7 Other financial expenses	172	1,878,773	5,668,734
SHARE IN PROFIT FROM COMPANIES LINKED
BY VIRTUE OF PARTICIPATING INCREAT	173	0	0
VI SHARE IN PROFIT FROM JOINT VENTURES	174	0	0
VII SHARE IN LOSS OF COMPANIES LINKED BY VIRTUE OF PARTICIPATING INTEREST	175	0	0
VIII SHARE IN LOSS OF JOINT VENTURES	176	0	0
IX TOTAL INCOME (ADP 125+154+173 + 174)	177	616,396,090	685.875.431
X TOTAL EXPENDITURE (ADP 131+165+175 + 176)	178	634,059,165	584,313,138
XI PRE-TAX PROFIT OR LOSS (ADP 177-178)	179	-17,663,075	101,562,293
1 Pre-tax profit (ADP 177-178)	180	0	101,562,293
2 Pre-tax loss (ADP 178-177)	187	-17,663,075	0
XII INCOME TAX	182	0	0
XIII PROFIT OR LOSS FOR THE PERIOD (ADP 179-182)	133	-17,663,075	101,562,293
1 Profit for the period (ADP 179-182)	184	0	101,562,293
2 Loss for the period (ADP 182-179)	185	-17,663,075	(0)
DISCONTINUED OPERATIONS (to be filled in by the entrepreneur liable to IFRS only if it has discontinued
operations)
XIV. PROPER OR LOSS FROM DISCONCRIPTOD OPERATIONS BEFORE TAXATIONS (ADP 187-188)	186	0	114,812,861
1. Profit from discontinued operations before tax	187	0	114,812,861
2. Loss of discontinued operations before tax	188	0
XV. INCOME TAX FOR DISCONTINUED BUSINESS	189	0	0
1. Operating profit for the period (AOP 186-189)	199	0	114,812,861
2 Loss of discontinued operations for the period (AOP 189-
186)	191	0
TOTAL BUSINESS (to be filled in only by an entrepreneur subject to IFRS who has discontinued operations)
XVI PROFIT OR LOSS BEFORE TAX (AOP 179 + 186)	192	0	216,375,154
1. Profit before tax (AOP 192)	193	0	216,375,154
2. Pre-tax loss (AOP 192)	194	0	0
XVII. INCOME TAX (AOP 182 + 189)	103	0	0
XVIII. PROFIT OR LOSS FOR THE PERIOD (AOP 192- 195)	196	0	216,375,154
1. Profit for the period (AOP 192-195)	197	0	216,375,154
2. Loss for the period (AOP 195-192)	198	0	0
APPENDIX to the P&L (to be filled in by the entrepreneur compiling the consolidated annual financial report)
XIX. PROFIT OR LOSS FOR THE PERIOD (AOP 200 + 201)	100	0	0
1. Attributable to equity holders of the parent	200	0	0
2. Attributable to minority (non-controlling) interest	201	0	0
STATENT OF OTHER COMPREHENSIVE INCOME (to be completed by the entrepreneur obliged to apply
THEREST THROPIT OR LOSS FOR THE PERCOD
	202	-17,663,075	101,562,293
II OTHER COMPREHENSIVE PROFIT/LOSS BEFORE TAX	203	0	0

(ADP 204 to 211)	204	0	0
1 Exchange rate differences from translation of foreign operations	205	0	0
2 Changes in revaluation reserves of fixed tangible and intangible assets	206	0	0
3 Profit or loss arising from re-evaluation of financial assets available for sale	207	0	0
4 Profit or loss arising from effective cash flow hedging	208	0	0
5 Profit or loss arising from effective hedge of a net investment in a foreign operation	209	0	0
6 Share in other comprehensive income/loss of companies linked by virtue of participating interest	210	0	0
7 Actuarial gains/losses on defined remuneration plans	211	0	0
8 Other changes in equity unrelated to owners	212	0	0
III TAX ON OTHER COMPREHENSIVE INCOME FOR THE PERIOD	213	0	0
IV NET OTHER COMPREHENSIVE INCOME OR LOSS (ADP 203-212)	214	-17,663,075	101,562,293

Source: the Company

Table 3. Cash flow

lice in	ADP ande	31 December 2018	3111 December 2019
	ei	ಹಾ	4
Cash flow from operating activities
1. Profit before tax	001	-17,663,075	101,562,294
2. Adjustments (ADP 003 to 010):	002	23,853,533	8,290,916
a) Depreciation	003	23,853,533	8,290,916
b) Gains and losses on disposals and value adjustments of property, plant and equipment and intangible assets	004
c) Gains and losses on disposals and unrealized gains and losses and value adjustments of financial assets	005
d) Interest and dividend income	006
e) Interest expenses	007
f) Provisions	0003
g) Exchange rate differences (unrealized)	009
h) Other adjustments for non-monetary transactions and unrealized gains and losses	010
I Increase or decrease in cash flows before changes in working capital(ADP 001 + 002)	011	6,190,458	109,853,210
3. Changes in working capital (ADP 013 to 016)	012	-33,871,692	132,451,565
a) Increase or decrease in short-term liabilities	013	-26,055,677	4,761,716
b) Increase or decrease in current receivables	014	61,383,036	-6,406,997
c) Increase or decrease in inventories	015	36,089,805	104,176,294
d) Other increases or decreases in working capital	016	-105,288,856	29,920,552
II. Cash from operations (ADP 011 + 012)	017	-27,681,234	242,304,175
4. Cash interest expenses	018	0
5. Paid income tax	019	0
A) NET CASH FLOWS FROM OPERATING ACTIVITIES (ADP 017 to 019)	020	-27,681,234	242,304,775
Cash flow from investing activities
1 Cash receipts from sales of fixed tangible and intangible assets	021	555,061	87,808,549
2 Cash receipts from sales of financial instruments	022	0

3 Interest received 4 Dividends received	023 024	9,296,176 75,390	12,031,908
5 Cash receipts from repayment of loans and deposits 6 Other cash receipts from investment activities	1125 026	0 35,886,737	41,627,170
III Total cash receipts from investment activities (ADP 024 to 026)	027	45,813,364	141,467,627
1 Cash payments for the purchase of fixed tangible and intangible assets	023	-5,059,667	-23,600,442
2 Cash payments for the acquisition of financial instruments	029	0
3 Cash payments for loans and deposits	030	0
4 Acquisition of a subsidiary, net of cash acquired	031	0
5 Other cash payments from investment activities	0392	-12,191,005	-3,810,998
IV Total cash payments from investment activities (ADP 028 to 032)	033	-17,250,672	-27,411,440
B) NET CASH FLOW FROM INVESTMENT ACTIVITIES (ADP 027 + 033)	034	28,562,692	114,056,187
Cash flow from financial activities
1 Cash receipts from the increase of initial (subscribed) capital	035
2 Cash receipts the from issue of equity financial instruments and debt financial instruments	036	0
3 Cash receipts from credit principals, loans and other borrowings	037	304,946,725	54,571,775
4 Other cash receipts from financing activities	038	9,200,000	1,900,000
V Total cash receipts from financing activities (ADP 035 to 038)	039	314,146,725	56,471,175
1 Cash payments for the repayment of credit principals, loans andother borrowings and debt financial instruments	040	-356,373,260	-406,448,638
2 Cash payments for dividends	041	0
3 Cash payments for finance lease	042	-798,048	-363,729
4 Cash payments for the redemption of treasury shares and decrease of initial (subscribed) capital	043	-5,023,251	-610,935
5 Other cash payments from financing activities	044	-15,300,000	-3,800,000
VI Total cash payments from financing activities (ADP 040 to 044)	045	-377,494,559	-411,223,302
C) NET CASH FLOW FROM INVESTMENT ACTIVITIES (ADP 039 +045)	046	-63,347,834	-354,751,527
1 Unrealised exchange rate differences in cash and cash equivalents	047
D) NET INCREASE OR DECREASE OF CASH FLOWS (ADP020+034+046+047)	048	-62,466,376	1,609,435
E) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF PERIOD	049	62,683,134	216,758
F) CASH AND CASH EQUIV ALENTS AT THE END OF PERIOD(ADP 048+049)	020	216,758	1,826,193

Source: the Company

4. Employees

		31 Dec 2019
Qualification	Number	Structure %
-	2 -	3
Master of Science
Higher education	2	18
College education
High school education	9	82
Half qualified
Qualified
Non-qualified
Total permanent:	】【	100
Source: the Comnany

Table 5. Qualification structure of permanent employees VIRO TVORNICA SECERA d.d.

5. Investment

The company had no significant investments in 2019

6. Environment and ecology

During 2019, there were no environmental incidents in the Company.

7. Planned short-term development

The main focus will be on management through its partner management role in the entity Hrvatska industrija šećera d.d. and commitment that the newly established company takes all necessary actions in order to maximize the rational operation and use of available resources. In terms of the volume of business, and in terms of the operation of production plants, the movement of the domestic raw material base, i.e. contracting sugar beet for processing, will play a crucial role, first in Croatia and, if economically viable, to some extent from neighbouring countries, with producers of raw materials domestic sugar factories have cooperated in the past.

Reposnsibility of the Management Board for the Annual Financial Statements

Pursuant to the Croatian Accounting Act, the Management Board is responsible for ensuring that inancial statements are prepared for each financial year in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with the Accounting Act, which give a true and fair view of the state of affairs and results of the Viro tvornica šećera d.d.(the Company) for that period.,.

After making enquiries, the Management Board has a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseable future. For this reason, the Management Board continues to accept the going concern principle when preparing the financial statements.

In preparing financial statements, the Management Board is responsible for:

• · selecting and then consistently applying sultable accounting policies.
• · making reasonable and prudent judgments and estimates.
• · following applicable accounting standards, subject to any material departures disclosed and explained in the financial statements; and
• = preparing the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue its business.

The Management Board is responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time the financial position of the Company and must ensure that the financial statements comply with the Croatian Accounting Act. Furthermore, the Management Board is responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Signed on behaif of and for the Management Board:

Želiko Za sident of the Management Board

Darko Krstić, Member of the Management Board

Ivo Resić, Presidant of the Management Board

Viro tvornica šećera d.d. Ulica grada Vukovara 269g 10000 Zagreb Croatis 23 June 2020

vorni

INDEPENDENT AUDITOR'S REPORT

to the shareholders of Viro tvornica šećera d.d., Zagreb:

Report on the audit of the unconsolidated annual financial statements

Disclaimer of Opinion

We are engaged to audit the annual unconsolidated financial statements of Viro tvornica secera d.d. (hereinafter: "the Company"), which comprise the Statement of Financial Position as at 31 December 2019, the Statement of Comprehensive Income, the Statement of Cash Flows and the Statement of Changes in equity for the year then ended, and Notes to the annual unconsolidated financial statements, including a summary of significant accounting policies.

We do not express an opinion on the accompanying annual unconsolidated financial statements of the Company for the year ended 31 December 2019. Due to the importance of the issue described in our report in the Basis for Disclaimer of Opinion section, we were unable to obtain sufficient appropriate audit evidence to provide a basis for the audit opinion on these financial statements.

Basis for Disclaimer of Opinion

As stated in Note 15 to the annual unconsolidated financial statements, the Company in the Statement of Financial Position as at 31 December 2019 has stated investments in the subsidiary Sladorana d.o.o., Zagreb in the amount of HRK 407,187 thousand. As at 31 December 2019, the Company did not assess the recoverability of the carrying amount of these investments in accordance with International Accounting Standard 36 "Impairment of Assets". Consequently, we are not able to determine the effects of adjustments, if any, on the annual unconsolidated financial statements of the Company for 2019.

As stated in Note 28 to the annual unconsolidated financial statements, the Company in the Statement of Financial Position as at 31 December 2019 has receivables from customers and receivables from loans from the associated company Sladorana d.o.o. in the total amount of HRK 282,335 thousand. The Company did not estimate the expected credit losses at the reporting date in accordance with International Financial Reporting Standard 9 - Financial Instruments. Consequently, we are not able to determine the effects of adjustments, if any, on the annual unconsolidated financial statements of the Company for 2019.

Material Uncertainty Related to Going Concern

We draw attention to the fact that in the annual unconsolidated financial statements as at 31 December 2019, the Company has current assets in the amount of HRK 320,919 thousand and has short-term liabilities in the amount of HRK 220,704 thousand. Short-term liabilities include liabilities under due letters of credit, loans and financial leases in the amount of 62,925 thousand as stated in Note 24 in the annual unconsolidated financial statements; while current assets include receivables from the associated company Sladorana d.o.o. in the amount of HRK 282,335 thousand. These events or circumstances, among other matters, indicate the existence of uncertainties that may cast doubt on the Company's ability to continue as a going concern. Following the above, the Management Board makes efforts to resolve the existing situation in the manner described in Note 3.1.1. to the annual unconsolidated financial statements. The assessment of the Management Board is that the Company is capable of continuing its operations indefinitely. Our opinion has not been modified on this regard.

Other matters

The Company has also prepared annual consolidated financial statements for the Viro tvornica šećera d.d. and subsidiaries, dated 23 June 2020 and for a better understanding of the Group as a whole, users should read the annual consolidated financial statements, in conjunction with these unconsolidated annual financial statements.

The audit of the annual unconsolidated financial statements of the Company for the year ended 31 December 2018 was performed by the auditing company Deloitte d.o.o., Zagreb, which in its Independent Auditor's Report dated 29 April 2019 expressed a qualified opinion on these annual unconsolidated financial statements. The basis for the qualified opinion related to the potential impairment of investments in the subsidiary.

Responsibilities of the Management board and those charged with governance for the unconsolidated annual financial statements

Management Board is responsible for the preparation of unconsolidated annual financial statements that give a true and fair view in accordance with IFRSs, and for those internal controls that the Management board determines are necessary to enable the preparation of annual financial statements that are free from material misstatement due to fraud or error.

In preparing the unconsolidated annual financial statements, Management board is responsible for evaluation of the Company's ability to continue operations assuming going concern principle, disclosure, if applicable, issues related to going concern, and using accounting based on going concern principle, unless the Management board intends to liquidate the Company or discontinue its business or there is no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the financial reporting process established by the Company.

Auditor's responsibilities for auditing the annual unconsolidated financial statements

it is our responsibility to audit the Company's annual unconsolidated financial statements in accordance with International Standards on Auditing and to issue the auditor's report. However, due to the issue described in our report in the Basis for Disclaimer of Opinion section, we were unable to obtain sufficient appropriate audit evidence to provide a basis for the audit opinion on these annual unconsolidated financial statements.

We are independent of the Company in accordance with the Code of Ethics for Professional Accountants ("IESBA Code") and have fulfilled our ethical responsibilities in accordance with the IESBA Code.

Statement on other legal requirements

On 29 August 2019, we were appointed by the General Assembly of the Company based on the proposal of the Supervisory Board, to audit the annual unconsolidated financial statements of the Company for 2019.

We are engaged to perform the legal audit of the annual unconsolidated financial statements of the Company for the first time for 2019, which is a one-year engagement.

In the audit of the annual unconsolidated financial statements of the Company for 2019, we determined the significance for the unconsolidated financial statements as a whole in the amount of HRK 7,432 thousand, which represents approximately 1.5% of the realized sales revenue for 2019.

We have chosen sales revenue as a measure of materiality because we believe it is the most appropriate measure given the significant fluctuations in profit before tax in the current and prior periods.

Our audit opinion is consistent with the supplementary report for the Audit committee of the Company prepared in accordance with the provisions of Article 11 of Regulation (EU) no. 537/2014.

During the period between the starting date of the audited annual unconsolidated financial statements of the Company for 2019 and the date of this Independent Auditor's Report, we did not provide prohibited non-audit services to the Company and did not provide services for the design and implementation of internal control procedures risk management related to preparation and/or control of financial information or the design and implementation of technological systems for financial information, and we have maintained independence in relation to the Company

The partner involved in the audit of the Company's annual unconsolidated financial statements for 2019 which results in this Independent Auditor's Report, is the certified auditor Vedrana Stipić

Zagreb, 23 June 2020

BDO Croatia d.o.o. Trg J. F. Kennedy 6b 10000 Zagreb BDO CROATIA BDO Croatia d.o.o. za pružanje revizorskih, konzalting Hrvoje Stipić, President of the Zageb, I. R Kensovovskog
Hrvoje Stipić, President of the Zageb, I. R Kensdy 60 Vedrana Stipić, Certified Auditor Management Board

Unconsolidated Statement of Comprehensive Income

for the year ended 31 December 2019

(all amounts in HRK '000)

CONTINUING OPERATIONS	Note	2019	2018
Sales revenue	4.1	288,595	527,681
Other income	4.2		20,041
Total operating income		288,595	547,722
Decrease in value of work in progress and finished goods	17		(84,800)
Costs of raw materials and supplies	6	(13,936)	(110,021)
Cost of goods sold	7	(280,292)	(295,197)
Other external expenses	8	(15,541)	(38,290)
Amortization and depreciation		(607)	(23,853)
Employee costs	9	(2,099)	(24,294)
Other expenses	10.1	(2,656)	(6,210)
Value adjustment	10.2		(10,759)
Other operating expenses	103		(16,143)
Total operating expenses		(315,131)	(609,567)
Loss from ordinary activities		(26,536)	(61,845)
Financial revenue	11	17,226	68,674
Financial expenses	12	(3,941)	(24,492)
Net financial gain		13,285	44,182
Loss before tax		(13,251)	(17,663)
Profit tax	13
Current year loss FROM CONTINUING OPERATIONS		(13,251)	(17,663)
DISCONTINUED OPERATIONS
Profit for the current year from discontinued operations	13.1	114,813
Profit (loss) of the current year		101,562	(17,663)
Other comprehensive income
items that are not subsequently transferred to profit or 1055
Other comprehensive income
Total comprehensive loss for the current year		101,562	(17,663)
Loss per share:
- basic and diluted (in kunas and lipas)	23	73,24	(12,74)

The accounting policies and notes that follow form an integral part of these unconsolidated financial statements.

Unconsolidated Statement of Financial Position

as at 31 December 2019

(all amounts in HRK '000)

	Note	31 Dec 2019	3 Dec 2018
ASSETS
Fixed assets
Intangible assets			2,266
Property, plant and equipment	14	65,192	135,425
Shares in subsidiaries	15	407,586	423,507
Long-term financial assets	16	66,345	88,241
Total fixed assets		539,123	649,439
Current assets
Inventories	17	28,213	132,388
Trade receivables and receivables from related companies	18	77,261	63,860
Receivables from the state and other institutions	19	2.491	7,670
Current financial assets	20	210,521	253,366
Other receivables		533	2,348
Cash and cash equivalents	21	1,826	217
Deferred expenses paid and accrued income		74	761
Total current assets		320,919	460,611
TOTAL ASSETS		860,042	1,110,050

The accounting policies and notes that follow form an integral part of these unconsolidated financial statements.

Unconsolidated Statement of Financial Position (continued)

as at 31 December 2019

(all amounts in HRK '000)

	Note	31 Dec 2019	31 Dec 2018
EQUITY AND LIABILITIES
Capital and reserves
Share capital	22.1	249,600	249,600
Retained earnings		320,819	219,256
Capital reserves	22.2	10,368	10,368
Profit reserves	222	51,101	51,712
Total capital		631,888	530,936
Provisions	30	7,450	8,835
Long-term liabilities
Liabilities under loans and finance leases	24		86,355
Total long - term liabilities			86,355
Current liabilities
Liabilities under loans and finance leases	24	62,925	287.534
Liabilities for advances	26	6,945	25,171
Liabilities to suppliers and related companies	25	134,541	167,792
Other current liabilities	27	16,149	2,636
Accrued expenses and deferred income		144	791
Total current liabilities		220,704	483,924
TOTAL EQUITY AND LIABILITIES		860,042	1,110,050

The accounting policies and notes that follow form an integral part of these unconsolidated financial statements.

all amounts in HRK '000)
	Share capital	reserves Capital	Profit reserves	Retained earnings	Total
Balance at 1 Jan 2018	249,600	10,368	56.347	246,142	567457
Current year loss				17,663)	(17,663)
Total comprehensive loss				(17,663)	(17,663)
Impact of the application of IFRS 9 (note 2b)				(9,223)	(9,223)
Own shares			(4,635)		(4,635)
Balance at 31 Dec 2018	249,600	10,368	51,712	219,256	530,936
Profit for the current year				101,562	101,562
Total comprehensive loss				101,562	101,562
Own shares			(611)		(611)
Balance at 31 Dec 2019	249,600	10.368	51,101	320.819	631 888

Unconsolidated Statement of Changes in Equity

for the year ended 31 December 2019

The accounting policies and notes that follow form an integral part of these unconsolidated financial statements.

Unconsolidated Statement of Cash flows

for the year ended 31 December 2019

(all amounts in HRK '000)

DESCRIPTION	2019	2018
Cash flows from operating activities
Profit before tax	101,562	(17,663)
Adjustments
- Depreciation	8,291	23,854
Changes in working capital
- Increase or decrease in current liabilities	4.762	(26,056)
- Increase or decrease of current receivables	(6,407)	61,383
- Increase or decrease in inventories	104,176	36,090
- Other increases or decreases in working capital	29,921	(105,289)
NET CASH FLOW FROM OPERATING ACTIVITIES	242,305	(27,681)
Cash flows from investing activities
Cash receipts from sale of tangible and intangible fixed assets	87,809	555
Cash receipts from interest	12.032	9,296
Cash receipts from dividends		75
Other cash inflows from investing activities	41,627	35,887
Cash outflows for the purchase of tangible and intangible fixed
assels	(23,600)	(5,060)
Other cash outflows from investing activities	(3,810)	(12,191)
NET CASH FLOW FROM INVESTING ACTIVITIES	114,056	28,563
Cash flows from financing activities
Cash inflows from loans, credits and other borrowings	54,572	304,947
Other cash inflows from financing activities	1,900	9,200
Cash outflows for repayment of loans, borrowings and other loans and debt instruments	(406,449)	(356,373)
Cash outflows for finance leases	(364)	(798)
Cash outflows for repurchase of own shares and reduction of share capital	(611)	(5,023)
Other cash outflows from financing activities	(3,800)	(15,300)
NET CASH FLOWS FROM FINANCIAL ACTIVITIES	(354,752)	(63,348)
NET INCREASE OR DECREASE IN CASH FLOWS	1,609	(62,466)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE	29 7	62,683
PER (0)0)
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	1,826	2977

Notes to the unconsolidated financial statements for the year ended 31 December 2019

(all amounts in HRK '000)

GENERAL INFORMATION 1.

Introduction 1.1

Viro tvornica šećera d.d., Zagreb, Ulica grada Vukovara 269g, was entered in the Court Register of the vilo women our in Bjelovar on 23 July 2002. The founders of the company were EOS-Z d.o.o. Zagreb and Ochineral. Solice. In 2005, the Company was transformed from a limited liability company into a joint Acole company. The share capital of the company in the amount of HRK 249,600,060 (2017: HRK 249,600,060) was divided into 1,386,667 (2017: 1,386,667) ordinary registered shares, without a nominal amount.

At the beginning of 2015, the Company changed its registered office, which is no longer located in Virovitica At the beginning or 2010, are over a 269g, which was entered in the Court Register of the Commercial Court in Zagreb on 20 January 2015.

Viro tvomica šećera founded a new company Hrvatska industrija šećera d.d. on 18 March 2019 by entering the share capital in cash in the amount of HRK 200 thousand. The share capital is divided into 2,000 shares of which 400 are preferred HIS-P-A and 1,600 ordinary HIS-R-A.

On 29 October 2019, based on the Sale and transfer of the Company's shares contract, Viro tvornica šecera sold 960 ordinary and 240 preferred shares of HIS to Sladorana d.o.o. and 640 ordinary and 160 preferred shares to the company Tvornica šećera Osijek d.o.o.

Business activity 1.2

The main activity of the Company entered in the court register is sugar production.

Since the company Viro tvornica šećera d.d. sold assets related to sugar production, it will continue to operate as a holding company.

In 2019, the Company's operations are presented from both discontinued and continued operations. The in 100% the been the operations of the factory from the production and sale of finished products as uell as operations related to the Company to the company Hrvatska industrija šećera d.d. well as operatene research the newly established company Hrvatska industrija šećera d.d. On our suns are the purchase and sale of sugar as a commodity as well as other sales not related to finished products

(all amounts in HRK '000)

Management Board 1,3

The members of the Management Board of the Company as at 31 December 2019 and 31 December 2018 are:

1. Želiko Zadro	President of the Management Board
2. Darko Krstić	Member of the Management Board
3. Ivo Rešić	Member of the Management Board

1.4 Supervisory Board

The members of the Supervisory Board of the Company as at 31 December 2019 and 31 December 2018 are

1. Marinko Zadro	President of the Supervisory Board
2. Boris Šimunović	Deputy President of the Supervisory
	Board
3. Ivan Mišetić	Member of the Supervisory Board
4. Robert Barnaki	Member of the Supervisory Board
5. Zadro Svetlana	Member of the Supervisory Board

1.5 Audit Board

The members of the Audit Board of the Company as at 31 December 2019 and 31 December 2018 are

1. Marinko Zadro	President of the Audit Board	since 18 January 2018
2. Boris Šimunović	Member of the Audit Board	since 18 January 2018
3. Ivan Mišetić	Member of the Audit Board	since 18 January 2018

(all amounts in HRK '000)

2.

Adoption of new and amended International Financial Reporting Standards and Interpretations

IFRS 16 Leases

IFRS 16 allows the use of one or more practical solutions in retroactive application with the cumulative effect of the standard relating to initial application. The standard is effective for annual periods beginning on or after 1 January 2019.

The following amended standards are effective from 1 January 2019, but did not have a significant impact on the Company:

IFRIC 23 "Uncertainty Over Income Tax Treatments" (issued on 7 June 2017 and effective for annual periods beginning on or after 1 January 2019).

Characteristics of negative fee overpayments - Amendments to IFRS 9 (issued on 12 October 2017 and effective for annual periods beginning on or after 1 January 2019).

Amendments to IAS 28 "Investments in Associates and Joint Ventures" (issued on 12 October 2017 and effective for annual periods beginning on or after 1 January 2019).

Annual Improvements to IFRSs for the 2015-2017 Reporting Cycle - Amendments to IFRS 11, IAS 12 and IAS 23 (issued on 12 December 2017 and effective for annual periods beginning on or after January 1, 2019).

Amendments to IAS 19 "Employee Benefits" (issued on 7 February 2018 and effective for annual periods beginning on or after 1 January 2019)

(all amounts in HRK '000)

2.

Adoption of new and amended International Financial Reporting Standards and Interpretations (continued)

Standards and amendments to the existing standards issued by IASB and adopted by the EU but not yet effective

Several new accounting standards and interpretations have been issued that are not mandatory for the reporting periods ending 31 December 2019 and that the Company has not previously adopted

· Appendices to the Conceptual Financial Reporting Framework (effective for annual periods beginning on or after 1 January 2020).

The revised conceptual framework includes a new chapter on measurement; guidelines for reporting the financial result; improved definitions and guidelines - in particular the definition of an obligations in important areas, such as the role of governance, prudence, and measurement uncertainty in financial reporting.

· Definition of materiality - Amendments to IAS 1 and IAS 8 (effective for annual periods beginning on or after 1 January 2020).

The amendments clarify the definition of materiality and how it should be applied to encompass guidelines that have been contained elsewhere in IFRSs. Furthermore, the explanations along with the definition itself have been improved. Finally, the amendments ensure the consistency of the definition of materiality in all IFRSs. Information is material if it can reasonably be expected that its omission or misstatement will affect the decisions made by the primary users of general purpose financial statements based on those financial statements that provide financial information about a particular reporting entity.

· Reform of reference interest rates - Amendments to IFRS 9, IAS 39 and IFRS 7 (issued on 26 September 2019 and effective for annual periods beginning on or after 1 January 2020)

The amendments result from the replacement of reference interest rates such as LIBOR and other interbank bid interest rates ("IBORs"), which provide a temporary exemption from the application of certain hedge accounting requirements to hedging relationships directly affected by the IBOR reform. Cash flow hedge accounting under IFRS 9 and IAS 39 requires that future hedged cash flows be "highly probable". If these cash flows depend on the IBOR, the exemption provided for in the amendments requires the entity to apply the assumption that the interest rate on which the cash flows are based will not change as a result of the reform. IAS 39 and IFRS 9 require an estimate of expected future events for the application of hedge accounting. While the cash flows to which IBOR interest rates apply and the interest rates that replace it are currently expected to be broadly equal, thus minimizing any inefficiencies, this may no longer be the case as the reform date approaches.

(all amounts in HRK '000)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Adoption of new and amended International Financial Reporting Standards and Interpretations (continued)

According to the amendments, the entity may assume that the reference interest rate on which the cash flows of the hedged item, hedging instrument or hedged risk are based has not been affected by the IBOR reform. Due to the reform of the IBOR, protection could be found outside the range of 80-125%, which is mandatory for retroactive testing in accordance with IAS 39. IAS 39 has therefore been amended to allow an exemption from retroactive performance testing in such a way that hedging is not interrupted during the period of uncertainty caused by the IBOR simply because retroactive inefficiency is outside this range. However, even then, other requirements for the application of hedge accounting should still be met, including an assessment of expected events.

For some hedges, the hedged item or hedged risk refers to a non-contractual component of the IBOR. In order to apply hedge accounting, IFRS 9 and IAS 39 require that the identified risk component can be determined separately and measured reliably. According to the risk component should be able to be determined separately at the beginning of the protection relationship, and not continuously. In the context of a macro protection, where the subject often harmonizes the protection relationship, the exemption applies from the protected item was originally established within that protection relationship. Any hedging inefficiencies will continue to be recognized in the income statement in accordance with IAS 39 and IFRS 9.

The amendments set out the reasons for the cessation of the uncertainty arising from the reference interest rate reform, which is no longer applicable. The amendments require entitles to provide additional information to investors about their protection relationships directly affected by these uncertainties, including the nominal amount of hedging instruments to which the exemptions apply, any significant assumptions or judgments made during the exemption, and qualitative disclosure of how the entity is affected by the IBQR reform and how it manages the transition process. The Company is currently assessing the impact of the amendments on the financial statements.

· Sale or entry of assets between an investor and its associate or joint venture - Amendments to IFRS 10 and IAS 28 (issued on 11 September 2014 and effective for annual periods beginning on or after the date determined by the IASB, not yet approved by the European Union).

These amendments address the inconsistency between the requirements of IFRS 10 and the requirements of IAS 28 relating to the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of allowances is that full profit or loss is recognized when the transaction involves business. Partial gain or loss is recognized when the transaction involves non-business assets, even if they are subsidiary assets. The Company is currently assessing the amendments on the financial statements.

for the year ended 31 December 2019

(all amounts in HRK '000)

Adoption of new and amended International Financial Reporting Standards and Interpretations (continued)

· IFRS 17 "Insurance Contracts" (issued on 18 May 2017 and effective for annual periods beginning on or after 1 January 2021, not yet approved by the European Union).

IFRS 17 replaces IFRS 4 which has allowed companies to present insurance contracts using existing practices. For this reason, it was difficult for investors to compare the financial performance of otherwise similar insurance companies. IFRS 17 is a standard that applies a single principle to the disclosure of all types of insurance contracts, including reinsurance contracts. The standard requires the recognition and measurement of groups of insurance contracts at: (i) the present value of future risk-adjusted cash flows (contractual cash flows) that includes all available information about contractual cash flows to match the information available in the market; increased (if this value is a liability) or decreased (if this value is an asset) by (ii) the amount representing the unrealized gain of the contract service margin). Insurers will recognize profits for a group of insurance contracts during the coverage period and as they are hedged. If a group of contracts incurs or will incur a loss, the entity shall recognize that loss as incurred. The Company is currently assessing the impact of the amendments on the financial statements.

· Definition of business - Amendments to IFRS 3 (issued on 22 October 2018 and effective for acquisitions from the beginning of the annual reporting period beginning on or after 1 January 2020, not yet approved by the European Union).

The appendices change the definition of business must have inputs and a detailed process that together significantly contribute to the ability to generate results. The new guidelines provide a framework for assessing if input and a detailed process exist, including early-stage entitles that have not generated results. In the absence of results, there should be an organized workforce for the purposes of classification as a business. The definition of 'results' is narrowed to focus on goods and services provided to customers, generating investment income and other income, and excludes returns in the form of lower costs and other economic benefits. It is also no longer necessary to assess whether market participants are able to replace missing elements or integrate acquired activities and assets. The subject may apply a "concentration test". Acquired assets would not be business if almost the entire fair value of gross assets acquired was concentrated in a single asset (or group of similar assets). The amendments relate to future periods and the Company will apply them and assess their impact from 1 January 2020.

According to the Company's estimates, the application of these new standards and amendments to existing standards should not have a material impact on the Company's financial statements in the period of their first application.

for the year ended 31 December 2019

(all amounts in HRK '000)

BASIC ACCOUNTING POLICIES েই

Basis of preparation 3.1.

The Company keeps accounting records in the Croatian language, in Croatian kuna (HRK) and in accordance with Croatian legal regulations. The Company's financial statements have been prepared under the historical cost convention, except for financial assets carried at fair value, in accordance with International Financial Reporting Standards, adopted by the European Union, and Croatian legislation.

These financial statements have been prepared on a going concern basis.

As at 31 December, the exchange rate of the HRK against EUR and USD was:

	1 EUR	1 USD
2019	7.442580	6,649911
2018	7,417575	6,588129

The financial statements of the Company represent the aggregate amounts of the Company's assets, liabilities, equity and reserves as at 31 December 2019 and the results of operations for the year then ended.

Going concern 3.1.1.

The Company's Management Board believes that it will be able to finance its needs during 2020 in accordance with its business plans. The key event that marked 2019 is the consolidation of production resources for sugar production and processing capacities in Virovitica and Županja (Sladorana tvornica šećera d.o.o.) into one company called Hrvatska industrija šećera d.d. (HIŠ d.d.) in June 2019. At the end of 2019 HIŠ d.d. has also consolidated the operations of the plant in Osijek, which until then operated under the auspices of the Tvornica šećera Osijek d.o.o., and which was not part of the Viro Group, which led to an ownership reshuffle in such a way that Viro Group retained a 60% share in HIS, while 40% went to Tvornica šećera Osijek d.o.o. This consolidation will lead to significant savings while leaving production capacities that will be used optimally. Given the circumstance of a significant reduction in sugar prices after the abolition of production quotas in all EU countries and market liberalization, the Management Board believes that this was a necessary step to ensure survival on the market and preservation of sugar production in the Republic of Croatia.

The transaction in question, i.e. the sale of assets related to the production of sugar, secured the funds for closing the existing loan liabilities.

As at 31 December 2019, the Company has current assets in the amount of HRK 320.9 million and has short-term liabilities in the amount of HRK 220.7 million. Short-term liabilities include short-term liabilities on collected letters of credit, loans and financial leases in the amount of HRK 63 million as stated in the Note 24 to the financial statements, where the collaterals on fixed assets have also been noted.

for the year ended 31 December 2019

(all amounts in HRK '000)

3.1.1. Going concern (continued)

All liabilities to institutions, which are under collateral, will be settled on time and in accordance with the agreement reached with creditors. A high degree of agreement has been reached with certain creditors on the manner and dynamics of repayment and the Management Board believes that agreements will be concluded soon. If it does not prove certain that the liabilities can be properly serviced, the Management Board is also considering the implementation of a recapitalization to which creditors would be invited. Given the above, we do not expect the initiation of property foreclosure.

Estimates are based on information available at the date of preparation of the financial statements, and actual amounts may differ from those estimated.

for the year ended 31 December 2019

(all amounts in HRK '000)

3. BASIC ACCOUNTING POLICIES (continued)

Revenue recognition 32.

Revenue is recognized when it is probable that the economic benefits associated with the event will flow to the Company and the amount can be measured realistically. Sales revenue is recognized less the amount of taxes and discounts at the time of delivery of products, goods and services and when the risks and rewards are transferred to the customer.

In accordance with the new IFRS 15, the Company applies a five-step model regarding the recognition of contracts with customers;

• 1) Identify the contract(s) with a customer
• 2) Identify the performance obligations in the contract
• 3) Determine the transaction price
• 4) Allocate the transaction price to the performance obligations in the contract
• 5) Recognise revenue when (or as) the entity satisfies a performance obligation.

Revenue is recognized for each separate delivery obligation in the contract in the amount of the transaction price. The transaction price is the amount of fees in the contract that the Company expects to be entitled to in exchange for the transfer of the promised goods or services to the customer. Interest income is recognized on an accrual basis and at the applicable effective interest rate.

3.3. Borrowing costs

Borrowing costs that are directly attributable to the acquisition of a qualifying asset, an asset that requires time to be ready for its intended use or sale, are charged to the cost of the asset until it is largely ready for intended use or sale.

Investment income earned by temporarily investing earmarked loan funds until their spending on a qualifying asset is deducted from borrowing costs and capitalization is acceptable. All other borrowing costs are included in profit or loss in the period in which they are incurred.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

Transactions in foreign currencies 3.4.

Transactions in foreign currencies are initially translated into Croatian kuna using the exchange rates prevailing at the date of the transaction. Cash, receivables and liabilities denominated in foreign currencies are subsequently translated at the exchange rates ruling at the date of the statement of financial position. Gains and losses on translation are included in the statement of comprehensive income for the current year.

for the year ended 31 December 2019

(all amounts in HRK '000)

1. BASIC ACCOUNTING POLICIES (CONTINUED)

Corporate income tax 3.5.

Current tax is based on taxable profit for the year. Taxable profit differs from pre-tax profit reported in the statement of comprehensive income because it does not include items of income and expenses that are taxable or non-taxable in other years, as well as items that are never taxable or deductible. The Company's current tax liability is calculated using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax

Deferred taxes are recognized on the basis of the difference between the carrying amounts of assets and liabilities shown in the financial statements and the related tax bases used to calculate taxable profit. Deferred tax liabilities are generally recognized for all temporary taxable differences, and deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilized. Deferred tax liabilities and deferred tax assets are not recognized if the temporary difference arises from the first posting of other assets and other liabilities (except in the case of a business combination) from a transaction that affects neither taxable nor accounting profit. Deferred tax liabilities are not recognized on the basis of temporary differences on the initial recognition of goodwill.

Deferred tax liabilities are also recognized on the basis of taxable temporary differences related to investments in subsidiaries and interests in joint ventures, except when the Company is able to influence the reversal of the temporary difference and when it is probable that the temporary difference will not be reversed in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are recognized only to the extent that it is probable that taxable profit will be available against which the temporary differences can be utilized and are expected to be reversed in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced by the amount that is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.

Deferred tax assets and deferred tax liabilities are calculated at the tax rates that are expected to apply in the period in which the liability is settled, i.e. the realization of the asset is based on tax rates and tax laws in force or in the process of enactment at the end of the reporting period.

The determination of deferred tax liabilities and deferred tax assets reflects the tax consequences that would arise from the manner in which the Company expects to recover the carrying amount of its assets at the end of the reporting period, i.e. to settle the carrying amount of its liabilities.

for the year ended 31 December 2019

(all amounts in HRK '000)

3. BASIC ACCOUNTING POLICIES (CONTINUED)

Corporate income tax (continued) 3.5.

Current and deferred tax for the period

Current and deferred taxes are recognized in profit or loss, except for taxes that relate to items included in other comprehensive income or directly in equity, in which case the tax is also recognized in other comprehensive income or directly in equity. In the case of current and deferred taxes arising from the initial recognition of a business combination, the tax effect is included in the calculation of the business combination.

3.6. Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation. The cost of property, plant and equipment includes cost, import duties and non-refundable sales taxes, as well as any other costs directly attributable to bringing the asset to its working condition for its intended use.

Costs of ongoing maintenance and repairs, replacements and small-scale investment maintenance are recognized as an expense when incurred. In situations where it is clear that the costs have resulted in an increase in future expected economic benefits to be obtained from the use of property, plant and equipment beyond their originally estimated capabilities, they are capitalized or included in the carrying amount of the asset. Gains and losses on disposals of property, plant and equipment are recognized as income and expense in the period in which they arise. Depreciation begins with the asset being put into use. Depreciation is calculated by writing off the asset or the estimated value of the asset, excluding land and property, plant and equipment in preparation, over the estimated useful life of the asset using the straight-line method as follows:

type of asset	Usefullife	Annual rate
Buildings	20 years	5%
Personal vehicles	5 years	20%
Intangible assets, equipment vehicles (other than personal), machinery	4 years	25%
Computers, IT and network equipment, mobile phones	2 years	50%
Other assets	10 years	10%

In 2019, there were no changes in depreciation rates compared to the previous period.

for the year ended 31 December 2019

(all amounts in HRK '000)

3. BASIC ACCOUNTING POLICIES (CONTINUED)

3.7 Inventories

Inventories are stated at the lower of cost and net realizable value. Cost includes direct material and, if applicable, direct labour costs and any overheadlindirect costs associated with bringing the inventories to their current location and condition.

In cases when it is necessary to reduce the value of inventories to the net expected sales value, the value of inventories is adjusted against expenses for the current year.

The net expected realizable value, which can be realized, represents the estimated selling price less all estimated costs of completion and marketing, sales and distribution expenses.

Cash and cash equivalents 3.8

Cash consists of balances in bank accounts and cash on hand, as well as deposits and securities redeemable on demand or within three months at the latest.

3.9 Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) that arises from past events, it is probable that the Company will need to settle the obligation and the amount of the obligation can be estimated reliably.

Provisions are reviewed at each statement of financial position date and adjusted for an estimate based on current knowledge. When the amount of the impairment loss is significant, the amount of the provision is the present value of the costs expected to be incurred to settle the obligation, determined using the estimated non-risky interest rate as the discount rate. When discounting is used, the effect of discounting is recorded as a financial expense each year, and the carrying amount of the provision is increased each year for the elapsed time.

The amount recognized as a provision is the best estimate of the consideration that will be required to settle the present obligation at the statement of financial position date, taking into account the risks and uncertainties associated with the obligation. If a provision is measured using an estimate of the cash flows required to settle the present obligation, the carrying amount of the liability is the present value of those cash flows.

When a third party is expected to recover some or all of the economic benefits necessary to settle a provision, a related receivable is recognized as an asset if it is almost certain that the consideration will be received and the amount of the receivable can be measured reliably

for the year ended 31 December 2019

(all amounts in HRK '000)

1. BASIC ACCOUNTING POLICIES (CONTINUED)

Provisions (continued) 3.9

Provisions for restructuring are recognized if the Company has prepared an elaborate formal restructuring plan and if, at the inception of the plan or by publishing its main features among those covered by the plan, it has given rise to a valid expectation that it will implement the restructuring. The measurement of restructuring provisions includes only direct restructuring costs, which are amounts that are necessarily related to the restructuring and that are not related to the regular activities of the entity.

3.10 Contingent liabilities

Contingent liabilities are not recognized in the financial statements. They are published only if the possibility of an outflow of resources embodying economic benefits is not remote. Contingent assets are not recognized in the financial statements, but are disclosed when an inflow of economic benefits is probable.

3.11 Events after the reporting date

Events after the reporting date that provide additional information about the Company's position at the reporting date (events that have the effect of reconciliation) are reflected in the financial statements. Those events that do not result in reconciliation are disclosed in the financial statements if they are material.

Financial instruments 3.12

Financial assets and financial liabilities disclosed in the accompanying financial statements include cash and cash equivalents, marketable securities, trade and other receivables and payables, long-term receivables, loans, borrowings and investments. The accounting methods for recognizing and valuing these items are set out in appropriate accounting policies.

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially recorded at fair value. Transaction costs directly attributable to the acquisition or issue of financial liabilities, other than those carried at fair value through profit or loss, are added to or deducted from fair value on initial recognition. Transaction costs directly attributable to the assumption of financial liabilities carried at fair value through profit or loss are recognized immediately in profit or loss.

The purchase or sale of financial assets on a regular basis is recognized and derecognised on the basis of the trade date. Regular purchases or sales are the purchase or sale of financial assets that require the delivery of assets within a time frame established by market regulations or practices.

(all amounts in HRK '000)

1. BASIC ACCOUNTING POLICIES (CONTINUED)

3.12. Financial instruments (continued)

All recognized financial assets are subsequently measured entirely at amortized cost, fair value through other comprehensive income or fair value through profit or loss, depending on the business model and the characteristics of the contracted cash flows of the financial asset.

Classification of financial assets

Debt instruments that meet the following conditions are subsequently measured at amortized cost:

• · financial assets are held within a business model aimed at holding financial assets to collect contractual cash flows; and
• · the contractual terms of a financial asset give rise to cash flows that are solely payments of principal and interest on the outstanding amount of principal on certain dates

(i) Amortised cost and effective interest rate method

The effective interest rate method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period.

For financial assets, other than purchased or incurred impaired financial assets impaired at initial recognition), the effective interest rate is the rate that exactly discounts estimated future cash receipts (including any fees and points paid or received that form an integral part of effective interest rate, transaction costs and other premiums or discounts) excluding expected credit losses, over the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition. For purchased or incurred financial assets, the effective interest rate adjusted for the loan is calculated by discounting the estimated future cash flows, including expected credit losses, to the amortized cost of the debt instrument at initial measurement.

Amortized cost of a financial asset is the amount at which the financial instrument is measured at initial recognition less principal repayments and cumulative amortization, using the effective interest rate method of any difference between that initial amount of maturity, adjusted for any loss. The gross carrying amount of a financial asset is the amortized cost of the financial asset before adjustment for any loss.

Interest income is recognized using the effective interest rate method for debt instruments that are subsequently measured at amortized cost and at the fair value through other comprehensive income.

For financial assets, other than for purchased or incurred financial assets, interest income is calculated by applying the effective interest rate to the gross carrying amount of the financial asset, except for financial assets that subsequently become impaired.

for the year ended 31 December 2019

(all amounts in HRK '000)

BASIC ACCOUNTING POLICIES (CONTINUED) 3.

3.12. Financial instruments (continued)

For financial assets that subsequently become impaired, interest income is recognized by applying the effective interest rate to the amortized cost of the financial asset. If, in subsequent reporting periods, credit risk on a loan impaired financial instrument improves so that the financial instrument is no longer impaired, interest income is recognized by applying the effective interest rate to the gross carrying amount of the financial asset.

For purchased or incurred impaired financial assets, the Company recognizes interest income by applying the effective interest rate adjusted for credit risk to the amortized cost of financial assets at initial recognition. The calculation is not returned on a gross basis even if the credit risk of the financial asset subsequently improves so that the financial asset is no longer impaired.

Interest income is recognized in comprehensive income.

Impairment of financial assets

The Company recognizes provisions for expected credit losses from investments in debt instruments measured at amortized cost and for trade receivables. The amount of expected credit losses is calculated at each reporting date to reflect changes in credit risk since the initial recognition of an individual financial instrument.

The Company always recognizes lifelong expected credit losses (ECL) for trade receivables based on the simplified approach chosen. Expected credit losses on these financial assets are estimated based on a matrix of days in arrears created based on the Company's historical experience with credit losses, adjusted for factors specific to debtors. The Company does not currently adjust the loss rate for future macroeconomic conditions as it has not conducted an analysis of the impact of macroeconomic factors on historical loss rates, including the time value of money where appropriate.

For all other financial instruments, the Company recognizes a lifelong ECL when there has been a significant increase in credit risk since initial recognition. However, if the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss for that financial instrument in the amount equal to the 12-month ECL. The lifelong ECL represents the expected credit losses that will result from all possible defaults during the expected life of the financial instrument.

In contrast, a 12-month ECL is part of a lifelong ECL due to the likelihood of default in the 12 months following the reporting date.

for the year ended 31 December 2019

(all amounts in HRK '000)

1. BASIC ACCOUNTING POLICIES (CONTINUED)

3.12. Financial instruments (continued)

(ii) Significant increase in credit risk

In assessing whether credit risk on a financial instrument has increased significantly since initial recognition, the Company compares the risk of default on the reporting date with the risk of default of the financial instrument on the date of initial recognition. In making this assessment, the Company considers both quantitative and qualitative information that is reasonable and available, including historical experience, and that is available without undue expense or commitment.

In particular, the Company relies on default days when assessing significant credit risk deterioration. If the borrower is more than 180 days late, then the Company assumes that there has been a significant increase in credit risk.

Notwithstanding the above, it is assumed that the credit risk on a financial instrument has not increased significantly since initial recognition if it is determined that the financial instrument has low credit risk at the reporting date. A financial instrument is found to have low credit risk if:

• · The financial instrument has a low risk of default,
• The debtor has a strong ability to meet its contractual obligations in a short period of time, and
• Adverse changes in economic and business conditions, in the long run, may, but do not e necessarily have to, reduce the borrower's ability to meet its contractual cash flow obligations.

However, the Company does not currently use low credit risk simplification when assessing a significant increase in credit risk. The Company regularly monitors the effectiveness of the criteria used to determine whether there has been a significant increase in credit risk and revises them to ensure that the criteria can identify a significant increase in credit risk before payment delays occur.

(ii) Definition of default status

The Company considers the following facts that constitute a case of default for the purposes of internal credit risk management as historical experience that shows financial assets that meet any of the following criteria are generally not recoverable:

• · When the debtor has breached financial clauses; or
• · Data developed internally or obtained from external sources indicates that the borrower is unlikely to pay off its creditors, including the Group, in full (without taking into account any collateral held by the Company).

Notwithstanding the above analysis, the Company considers that there was a default when the financial assets matured more than 360 days and the liabilities were not paid unless the Company has reasonable and substantiated information to show a more appropriate default criterion.

for the year ended 31 December 2019

(all amounts in HRK '000)

BASIC ACCOUNTING POLICIES (CONTINUED) 3.

3.12. Financial instruments (continued)

(iii) Credit-impaired financial asset

Financial assets are credit-impaired when one or more events have occurred that have an adverse effect on the estimated future cash flows of those financial assets. Evidence that the financial asset is impaired includes available information on the following events:

• · significant financial difficulties of the issuer or debtor;
• · breach of contract, such as failure to fulfil an obligation (defined above);
• · when the issuer grants the debtor, due to the financial difficulties of the same concession that it would not otherwise take into account;
• · it becomes probable that the debtor will go bankrupt or undergo other financial reorganization
• · there is the disappearance of an active market for certain financial assets due to financial difficulties

(iv) Write-off policy

The Company writes off financial assets when there is evidence that the debtor is in serious financial difficulty and has no realistic prospect of recovery, e.g. when the debtor is liquidated or in bankruptcy proceedings or; in the case of trade receivables, when the amounts are over three years overdue; whichever comes first. Depreciated financial assets may still be subject to the Group's collection activities, taking into account legal advice where appropriate. Income from the collection of previously written off financial assets is recognized in the income statement.

(v) Measurement and recognition of expected credit losses

The measurement of expected credit losses is a function of the probability of default (PD), loss given default (LGD), i.e. the amount of loss if a default occurs) and exposure at default (EAD) status. The assessment of the probability of default and loss due to default is based on historical data and the information provided in the previous paragraphs. As for the exposure at default, for financial assets, it represents the gross carrying amount of the asset at the reporting date.

To assess PD and LGD parameters, the Company relies on the publications of external investment rating agencies.

For financial assets, the expected credit loss is estimated as the difference between all contractual cash flows maturing under the contract and all expected cash flows, discounted at the original effective interest rate. If the Company has measured the provision for expected credit losses for a financial instrument in the amount of the lifelong ECL in the previous reporting period, but at the current reporting date determines that the conditions for the lifelong ECL are no longer met, the Company measures the loss in the amount of 12-month ECL at the current reporting date, except for assets for which simplified access has been used (trade receivables).

(all amounts in HRK '000)

1. BASIC ACCOUNTING POLICIES (CONTINUED)

3.12. Financial instruments (continued)

The Company recognizes a gain or loss in the statement of comprehensive income for ail financial instruments with an appropriate adjustment to the carrying amount through the provision for expected credit losses.

De-recognition of financial assets

The Company derecognises a financial asset only when the contractual rights to the cash flows from the financial asset expire or when it transfers the financial assets, all risks and rewards of the financial assets to another entity.

If the Company does not transfer and retain substantially all the risks and rewards of ownership and continues to control the transferred assets, the Company recognizes its retained interest in the assets and the related liability for the amounts it may have to pay. If the Company retains all significant risks and rewards of ownership of the transferred financial assets, the Company continues to recognize the financial asset and also recognizes the collateral received for the assets received.

In the event of de-recognition of a financial asset measured at amortized cost, the difference between the carrying amount and the consideration receivable is recognized in the income statement. Furthermore, upon de-recognition of an investment in a debt instrument measured by the fair value through other comprehensive income, the curnulative gain or loss previously accumulated in the investment revaluation reserve is reclassified to profit or loss, except for equity instruments for which the fair value through other comprehensive income option is selected.

Loans and receivables

The Company always discloses provisions for losses on trade receivables in the amount equal to the lifelong ECL. Expected credit losses on trade receivables are estimated based on the arrears matrix, taking into account the historical experience of the occurrence of the debtor, and the analysis of the current financial position of the debtor. The Company has recognized a loss of 100% on all receivables overdue for more than 360 days as historical experience indicates that these receivables are generally uncollectible.

There were no changes in valuation techniques or significant assumptions during the current reporting period.

The Company writes off trade receivables when there are data indicating that the debtor is in serious financial difficulties and that there is no realistic prospect of recovery, e.g. when the debtor has been liquidated or entered into bankruptcy proceedings, or when trade receivables are overdue for more than two years, whichever comes first. None of the written-off receivables is subject to enforcement activities.

for the year ended 31 December 2019

(all amounts in HRK '000)

1. BASIC ACCOUNTING POLICIES (CONTINUED)

3.12. Financial instruments (continued)

All financial liabilities are subsequently measured at amortized cost using the effective interest rate method or at fair value through profit or loss.

The Company measures all financial liabilities at amortized cost.

However, financial liabilities that arise when the transfer of financial assets does not qualify for derecognition or when the continuing participation approach is applied, and for financial guarantee contracts issued by the Company; subsequent measurement is performed in accordance with the specific accounting policies set out below.

Financial liabilities are subsequently measured at amortized cost

Financial liabilities that are not (i) contingent consideration for the acquirer in a business combination, (ii) held for trading, or (iii) designated at fair value through profit or loss; are subsequently measured at amortized cost using the effective interest rate method.

The effective interest method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including any fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) over the expected life of the financial liability or (if appropriate) a shorter period, at the amortized cost of the financial liability.

Classification as a financial liability or equity

Debt or equity instruments are classified as either financial liabilities or equity in accordance with the substance of the contractual arrangement_

3.13 State grants and subsidies

State aid is not recognized until the fulfilment of the conditions for receiving state aid and receiving the aid becomes realistically certain.

Government grants are recognized in profit or loss on a systematic basis over the period in which the Company recognizes the costs to be covered by the grant as an expense. In particular, government grants for which the Company is required to purchase, construct or otherwise acquire property, plant and equipment are recognized in the statement of financial position as deferred income and transferred to profit or loss systematically and rationally over the useful life of the asset in question.

(all amounts in HRK '000)

3. BASIC ACCOUNTING POLICIES (CONTINUED)

3.13. State grants and subsidies (continued)

Receivables based on state aid for the reimbursement of already incurred costs or for the purpose of providing current financial support to the Company without future related costs are recognized in profit or loss in the period in which the receivable arises.

The suitability of a government loan granted at an interest rate below the market rate is calculated as government aid and is reported as the difference between the funds received and the fair value of the loan based on the prevailing market interest rates.

3.14. Operating segment reporting

The Company determines business segments according to internal reports on the components of the Company, which are regularly reviewed by the chief executive decision-maker, in order to allocate resources to the segments and assess the performance of their operations. Details of operating segments are disclosed in Note 5 to the unconsolidated financial statements.

3.15. Key accounting judgments and key sources of estimation uncertainty

In applying the Company's accounting policies, which have been described above, the Management Board should make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not visible from other sources. Estimates and associated assumptions are based on historical experience and other relevant factors. Actual results may differ from estimates.

The estimates and assumptions are reviewed on an ongoing basis. Changes in accounting estimates are recognized in the revision period of the estimate if the change affects only that period or in the revision period of the estimate and in future periods if the change affects both current and future periods.

Estimates are used, but not limited to, depreciation periods and residual values of property, plant and equipment and intangible assets, impairment of inventories and impairment of receivables, provisions for litigation. The following is a description of the key judgments of the Management Board, in the process of applying the Company's accounting policies that most significantly affected the amounts recognized in the financial statements.

for the year ended 31 December 2019

(all amounts in HRK '000)

1. BASIC ACCOUNTING POLICIES (CONTINUED)

3.15. Key accounting judgments and key sources of estimation uncertainty (continued)

The useful life of property, plant and equipment

As described in Note 3.6, the Company reviews the estimated useful lives of property, plant and equipment and intangible assets at the end of each annual reporting period. Property, plant and equipment and intangible assets are stated at cost less accumulated impairment losses.

Consequences of certain legal disputes

The Company is a party to litigation and proceedings arising in the ordinary course of business. Management uses estimation when the most probable consequences of these activities have been assessed and provisions are recognized on a consistent basis.

Inventory value adjustment

As described in Note 3.7, the Company reviews the carrying amounts of its inventories at each reporting date and adjusts the value as necessary.

Inventories are stated at the lower of cost and net realizable value.

for the year ended 31 December 2019

(all amounts in HRK '000)

4. SALES AND OTHER REVENUES

Sales revenues 4.1

	2019	2018
Revenue from domestic sales	251,261	251,462
Revenues from sales abroad	37,334	276,219
	288,595	527,681

4.2 Other revenues

	2019	2018
Income from sale of fixed assets		1.864
Income from sales of raw materials		204
Income from collected value-adjusted and written-off receivables		6,190
Income from subsequently approved discounts		4,154
Income from cancellation of long-term provisions	=	2,334
Surpluses		3,438
Unrealized income		1.796
Income from previous years		26
Other income		35
		20,041

(all amounts in HRK '000)

5. SEGMENT INFORMATION

Business segments are formed according to the criterion of similarity of individual product groups. Two business segments have been identified: "sugar" and "molasses and dry beet".

Business segments are an integral part of internal financial statements. Internal financial statements are regularly reviewed by the Management Board and the business performance is assessed and business decisions are made based on them.

Revenues and operating results by segments

The following is an analysis of the Company's revenues and results by reporting segments, which are presented in accordance with IFRS 8 - Operating Segments. Displayed sales revenues refer to revenues generated from sales to customers.

		Segment revenue
	2019	2018
Sugar	251,822	439,257
Molasses and dry beet	36,773	108.465
	288,595	547,722

	Segment expenses		Segment loss
	2019	2018	2019	2018
Sugar	274,977	489,032	(23,155)	(49,775)
Molasses and dry beet	40.154	118.589	(3,381)	(12,070)
	315,131	607,621	(26,536)	(61,845)
			2019	2018
Segment profit			(26,536)	(61,845)
Financial income			17,228	68,674
			(3,941)	(24,492)
Financial expenses Loss before taxes			(13,251)	(17,663)

The "sugar" segment includes sugar production.

The "molasses and dry beet" segment includes the production of molasses and ndry beet.

(all amounts in HRK '000)

5. SEGMENT INFORMATION (CONTINUED)

The accounting policies of the operating segments are the Company's accounting policies set rill assuming point of the segments the loss or profit incurred by each segment without Satin Note of the Forme and expenses. This is the information given to the decision-maker in for reaching decisions on resource allocation and evaluating the business performance of the segment.

Segment assets and liabilities	31 Dec 2019	31 Dec 2018
Segment assets		277,615
Sugar	153,216	67,321
Molasses and dry beet	22,374
Total segment assets	175,590	344,936
Unallocated	684,452	765,114
Total assets	860,042	1,110,050
	31 Dec 2019	31 Dec 2018
Segment liabilities	192.582	458.978
Sugar	28.122	111,301
Molasses and dry beet	220,704	570,279
Total segment liabilities
Unallocated
Total liabilities	220,704	570,279

In order to monitor the performance of the segment, all assets were allocated by segments except longin order to mort-term financial assets (investments in subsidiaries, long-term financial assets and Ioans and deposits, see Notes 15, 16 and 20).

All liabilities are distributed by segments. Liabilities are allocated to segments in proportion to segment assets.

for the year ended 31 December 2019

(all amounts in HRK '000)

5. SEGMENT INFORMATION (CONTINUED)

Other segment information

	Depreciation and amortisation of tangible and intangible assets		Increase in tangible and intangible assets
	2019	2018	2019	2018
Sugar	530	19,198	20,621	4.560
Molasses and dry beet	17	4.655	3.011	1,106
Tota	607	23,853	23,632	5,666

Territorial business analysis

The company operates in three main territorial areas in which sales revenues are reported, while all fixed assets are related to the Croatian market.

Sales revenues

	2018 2019
Croatia	271,215 255,009
European union	158,672 33,586
other	117,835
Total	545,388 288,595

Information about the biggest customers

Sales revenues in the amount of HRK 446,438 thousand (2018: HRK 547,722 thousand) include HRK 40,169 thousand (2018: HRK 45,820 thousand) of revenues generated by the Company from the sale of products to its largest customer.

for the year ended 31 December 2019

(all amounts in HRK '000)

Write-off of small inventory

Other material costs

MATERIAL EXPENSES থে
	2019
Consumed raw materials and supplies	13.485
Energy consumed	376
Used spare parts	62 A -

COSTS OF GOODS SOLD 7.

Costs of goods sold in the amount of HRK 280,292 thousand (2018: HRK 295,197 thousand) are expenses based on the cost of goods sold, which the Company delivered to customers during the reporting year.

8. OTHER EXTERNAL EXPENSES

	2019	2018
Leases and rents	6,922	2,886
Transportation services	3,765	18,390
External product development services	1.718
Intellectual services	876	1.890
Maintenance services	249	3,207
Banking and payment services	499	2,715
Insurance premiums	255	1,381
Utilities and fees	89	1,086
Intermediary services	357	832
Postal services	127	638
Data processing services	155	578
Advertising and trade fair services	190	453
Market research services	107	215
External staff services	9	1.711
Manipulative costs	0	1,171
Other services	223	1,137
	15,541	38,290

2018

88,549

19,086

110,021

13

13,936

2,103

281

ୟ

for the year ended 31 December 2019

(all amounts in HRK '000)

EMPLOYEE COSTS 9.

	2019	2018
Net salaries and wages	1.174	15,246
Costs of taxes and contributions from salaries	628	5.695
Contributions on salaries	297	3.353
	2.099	24,294

As at 31 December 2019, the Company employed 11 employees (31 December 2018: 210 employees).

10. OTHER OPERATING EXPENSES

10.1 Other expenses

	2019	2013
Prescribed fees, contributions and membership tees	612	1,355
Occasional awards and gifts to workers	77	1,542
Severance	653	112
Entertainment costs	365	750
Other taxes and fees to the fund	644	72
Transportation of workers	25	1,001
Material rights of employees (per diems, accommodation on business trips, grants)	54	620
Remuneration to members of the Supervisory Board	125	334
Vocational education and magazines	19	96
Fieldwork compensation		28
Other	82	300
	2,656	6.210

(all amounts in HRK '000)

10. OTHER OPERATING EXPENSES (CONTINUED)

10.2 Value adjustment of inventories

The value adjustment in the amount of HRK 10,759 thousand in 2018 referred to the value adjustment of inventories since the value of sugar stocks that can be realized on the market was lower than the value of the cost. In 2019, there was no value adjustment of inventories at the date of the reporting period.

Other operating expenses 10.3

	2019	2018
Cost of goods and materials sold	1	204
Deficits		192
Subsequently granted discounts	=	410
Write-off of receivables	1	7,662
Subsequently determined expenses	=	3,237
Penalties and damages		1,717
Donations		630
The cost of provisions for expected credit losses on loans	4	1,946
Other		145
	0	16,143

for the year ended 31 December 2019

(all amounts in HRK '000)

1. FINANCIAL INCOME

	20119	2018
Income from realized gains from the sale of financial assets	17/226	46.849
Interest income from associates		12,575
Positive exchange rate differences	L	7.031
Positive exchange rate differences with associates	=	1,118
Interest income from unrelated companies		724
Unrealized gains on financial assets		301
Other financial income		76
	17,226	68.674

FINANCIAL EXPENSES 12.

	2019	2018
Interest from unrelated companies		15.855
Negative exchange rate differences	1	3.598
Negative exchange rate differences from associates	-	3.082
Fees on bank loans		1,878
Interest from associates		83
Other financial expenses	3.941
	3,941	24.492

(all amounts in HRK '000)

CORPORATE INCOME TAX 13.

In 2019, the Company made a profit in the amount of HRK 101,562 thousand, and a tax profit in the amount of HRK 88,493 thousand. The tax loss carried forward from the previous period amounts to HRK 110,503 thousand, and therefore there is no liability to pay income tax.

	2019	2018
Profit/(loss) before taxation	101-562	(17,663)
Income tax - 18%	18.281	(3,179)
The effect of non-tax deductible expenses and non-taxable income	(2,352)	2,419
The effect of unrecognized deferred tax assets based on tax osses	(15,929)	760
Income tax

The current corporate tax rate in the Republic of Croatia is 18% (2018: 18%).

An overview of the tax losses available for transfer is shown as follows:

Available for transfer until:	Tax loss	Amount of unrecognized deferred tax assets
Until 2023	22,010	3.962

Amounts of unused tax losses are not used to recognize deferred tax assets in the unconsolidated statement of financial position because it is not probable that sufficient taxable profit will be available against which the deferred tax assets can be utilized.

In accordance with tax regulations, the tax administration may at any time review the books and records of the Company for a period of three years after the end of the year in which the tax liability is stated, and may impose additional tax liabilities and penalties.

for the year ended 31 December 2019

(all amounts in HRK '000)

13.1 DISCONTINUED OPERATIONS

Below is the result of the discontinued part of the business, i.e. sugar production, which is included in the result of the current year.

	2019
Sales revenue	206,876
Other income	157,843
Total operating income	364,719
Change in the value of inventories of work in progress and finished goods
	(25,876)
Costs of raw materials and supplies	(172,904)
Cost of goods sold
Other costs	(7,864)
Amortization and depreciation	(7,684)
Staff costs	(9,932)
Other costs	(2,331)
Value adjustment
Other operating expenses	(19,093)
Total regular operating expenses	(245,684)
Profit from regular operations	119,035
Financial income	15,336
Financial expenses	(19,558)
Net financial income	(4,222)
Profit for the year	114,813
Income tax
Profit from discontinued operations	114,813

for the year ended 31 December 2019

1. PROPERTY, PLANT AND EQUIPMENT (all amounts in HRK '000)

	Land	Buildings	equipment Plant and	Artwork	Advances	construction	Assets under Other tangible assels	Total
Cost
Balance at 1 January 2018	5,549	122,785	316,516	6	34,254	2,230	2,990	484,333
Purchase	11:41	2,910	450		169	4	14	3,529
Sale, disposal, deficit	=		(a '888)		(607)		1	(10,495)
Balance at 31 December 2018	5,549	125,695	307,078	6	33,816	2,230	2,990	477,367
Purchase	21,366		2,087	4.1	179			23,632
Sale, disposal, deficit	(3,376)	120,058)	(262,316)		(65)	-	(573)	(386,388)
Balance at 31 December 2019	23,539	5,637	46,849	6	33.930	2,230	2.417	114.611

Pleaged assess leater of childres with her and start in the carring value of HRK 3,600 thousand (31 December 2018: HRK 80,117
HRK 20,117 Pledged assets relate to construction facilities with net carrying value of HRK 1,824 thousand (31 December 211 blev a contract (31 December 112 HRK 80 f thousand).

Viro tvornica šećera d.d.

53

Notes to the unconsolidated financial statements (continued) for the year ended 31 December 2019

(all amounts in HRK '000)

PROPERTY, PLANT AND EQUIPMENT (CONTINUED) 14.

	Land	Buildings	equipment Plant and	Artwork	Advances	Assets under construction	Other tangible assets	llola
Value adjustment
Balance at 1 January 2018	I	60,190	266,554			=	1,065	327,809
Depreciation		6,169	17,148				149	23,466
Sale, disposal, deficit			(9,333)					(9,333)
Balance at 31 December							1,214	341,942
2018		66,359	274,369
Depreciation	4 1	2,752	5,125				125	8.002
Sale, disposal, deficit		65,298)	(235,029)		1		198)	(300,525)
Balance at 31 December
2019		3,813	44.465				1.141	49,419
NET CARRYING VALUE

Viro tvornica šećera d.d.

54

65,192

1,276

2,230

33,930

9

2,384

1,824

23,539

Balance at 31 December

2019

Balance at 31 December

2018

137.691

1,776

2,230

33,816

9

32,709

59,336

5,549

for the year ended 31 December 2019

(all amounts in HRK '000)

SHARES IN SUBSIDIARIES 15.

	Primary activity	31 Dec 2019	Ownership (%)	31 Dec 2018	Ownership (%)
Sladorana 0.0.0.	Sugar production	407,187	100.00	407,187	100.00
Slavonija	Production and trade of		0.00	11,343	16.72
Zupanja d.d. PD Gradina doo	cereals Agriculture		0.00	4.578	31.79
VRO BH d.o.o.	Trade	379	100.00	379	100.00
VIRO - kooperacija	Warehousing, laboratory analysis	20	10.00	20	100.00
0.0.0.		407,586		423,507

In 2019, the company sold its shares in the companies Slavonija Županja d.d. and PD Gradina d.o.o.

16.

	31 Dec 2019	31 Dec 2018
Loans given to a subsidiary	63.022	86,406
Financial assets at fair value through other comprehensive income	18	2392
Deposits, loans and guarantees paid	3.305	1,603
	66,345	88.241

Loans granted to a subsidiary in the amount of HRK 63,022 thousand (31 December 2018: HRK 86,406 thousand) relate to a loan granted to Sladorana d.o.o. A loan was raised with Raiffeisen Bank to close Incons from other banks for Viro tvornica šećera d.d. and Sladorana d.o.o., and upon maturity of the loan, Sladorana d.o.o. repays the loan.

Deposits, loans and guarantees in the amount of HRK 3,305 thousand (31 December 2018: HRK 1,603 thousand) relate to a long-term loan granted to PD Gradina d.o.o. (In 2018 it was classified as a subsidiary).

(all amounts in HRK '000)

INVENTORIES 17.

	31 Dec 2019	31 Dec 2018
Raw materials	537	86.116
Finished products	7,687	44.354
Merchandise	18.728	9.115
Advances for inventories	1.260	3,875
Value adjustment of inventories	1	(11,071)
	28.213	132,389

18.

Trade receivables structure:

	31 Dec 2019	31 Dec2018
Receivables from related companies (note 30)	67.014	36,593
Trade receivables in the country	16,178	23,580
Trade receivables abroad	7.462	17.661
Impairment of trade receivables	(13,393)	(13,974)
	77,261	63,860

Ageing structure of trade receivables:

	31 Dec 2019	31 Dec 2018
Undue	19.387	13,253
0-90 days	37.316	32,252
90-120 days	1.077	1.910
Over 120 days	19,481	16,445
	77.261	63,860

for the year ended 31 December 2019

(all amounts in HRK '000)

(a) amounts in the count of the ReceivaBles FROM RELATED PARITES (CONTINUED)

Movement in impairment during the year

	2019	2018
Balance at 1 January	13.974	12.491
New impairment	27	5.935
Collection of previously impaired receivables	(608)	(4,452)
Balance at 31 December	13,393	13.974

All impairment receivables are overdue for more than 120 days.

19. RECEIVABLES FROM STATE AND OTHER INSTITUTIONS

	31 Dec 2019	31 Dec 2018
Receivables for VAT	2,464	7,544
Other receivables from the State	27	126
	2,491	7,670
CURRENT FINANCIAL ASSETS 20.
	31 Dec 2019	31 Dec 2018
Loans to related companies (note 28)	207,691	244,946
Given loans	1,107	7,714
Investments in securities - bills of exchange received		700
Deposits given	1,723	6
	210,521	253,366

(all amounts in HRK '000)

21. CASH AND CASH EQUIVALENTS

	31 Dec 2019	31 Dec 2018
Current accounts	274	216
Foreign currency accounts	50	-
Allocated funds	1,502
	1,826	217

22. EQUITY AND RESERVES

22.1. Share capital

The share capital as at 31 December 2019 amounts to HRK 249,600 thousand and is divided into 1,386,667 shares (31 December 2018: HRK 249,600 thousand and 1,386,667 shares).

The ownership structure of the Company is as follows:

	Number of shares		% of ownership
	2019	2018	2019	2018
EOS-Z d.o.0.	594,436	466,500	42.87%	34 84%
Robić d.o.o.	180.366	308,302	13.01%	222239/0
Cristal financiere	235,734	235,734	17.00%	17 00%
OTP banka d.d./ AZ OMF kategorije b (2017.- Splitska banka d.d.)	137,055	137.055	9.88%	9.88%
Viro tvornica šećera d.d.	42,507	33.108	3,07%	2.39%
AZ Profit Zagrebačka banka d.d. / DMF	25,449	25,449	1.84%	1.84%
Hrvatska pošťanska banka d.d.	24.9257	23,257	1.68%	1.68%
Croatia banka d.d.	7,500		0.54%
Erste&Steiermarkischebank d.d. / CSC		31,496		2.27%
Addiko bank d.d./ Raiffeisen OMF kategorije b		12.765		0.92%
other	140,363	113.001	10.11%	8.15%
	1,386,667	1,386,667	100.00%	100.00%

for the year ended 31 December 2019

(all amounts in HRK '000)

22. EQUITY AND RESERVES (CONTINUED)

22.2. Reserves

	31 Dec 2019	31 Dec 2018
Legal reserves	12.480	12.480
Capital reserves	10.368	10,368
Reserves for own shares	38.621	39,232
	61.469	67,080

LOSS PER SHARE 23.

Basic and diluted earnings per share

Basic loss per share is calculated by dividing the Company's net loss by the weighted average number of total ordinary shares less the weighted average number of ordinary shares purchased and held by the Company as treasury shares.

	2019	2013
Profit/(loss) of the year attributed to the owners of the company (in	101.562	(17,663)
thousands of HRK) Average weighted number of ordinary shares used in calculating basic	1.386.667	1.386.667
earnings per share Basic profit/(loss) per share (in Croatian kunas and lipas)	76.24	(12,74)

Diluted earnings per share are equal to basic earnings per share because there is no basis for adjusting the weighted average number of ordinary shares.

for the year ended 31 December 2019

(all amounts in HRK '000)

24. I LIABILITIES UNDER LOANS AND FINANCIAL LEASES

	31 Dec 2019	31 Dec2018
Long-term loans
Banks		86,146
Financial lease
Other creditors		209
		86,355
Short-term loans
Banks		212,155
Banks - current portion of long-term loans (maturity within one year)	-	68,917
Banks - collected letter of credit	57,679
Financial loan - affiliated companies	837
Financial loan	4,200	6,100
Finance lease - part of a long-term lease due within one year	209	3692
	62,925	287,534
Total	62,925	373,889

Other liabilities to banks relate to a letter of credit in the amount of HRK 57,679 thousand (31 December 2018: HRK 0 thousand) whose maturity is 31 October 2019. At 31 December 2019 the letter of credit was in the off-balance sheet records. A high degree of agreement has been reached on the manner and dynamics of repayment and the Management Board believes that agreements will be concluded soon.

Debentures were given as collateral for financial lease in the amount of HRK 209 thousand (31 December 2018: HRK 362 thousand).

The financial loan in the amount of HRK 4,200 thousand (31 December 2018: HRK 6,100 thousand) relates to a liability to Konzum d.d.

The movement of bank loans is shown as follows:

	2019	2018
Balance at 1 January	367.218	416,416
New loans	37.972	304.945
Loan repayments	(404,257)	(351,062)
Exchange rate differences	(933)	(3,081)
Balance at 31 December	0	367,218

(all amounts in HRK '000)

24. LIABILITIES UNDER LOANS AND FINANCIAL LEASES (CONTINUED)

Overview of bank loans (maturity, interest rate, amount, currency):

Creditor	Maturity	Interest rate	Currency	Balance at 31 Dec 2019
Long-term loans	31 Mar 2021	4%	EUR
Raiffeisenbank Austria d.d.
Short-term loans
CBRD	15 Apr 2019	3%	EUR
		5%+yield on
PBZ	31 Oct 2018	treasury bills	HRK
		5%+yield on
PBZ	31 Oct 2018	treasury bills	HRK
Kentbank d.d.	19 Mar 2019	3.5%	HRK
		5%+yield on	HRK	4
PBZ	31 Oct 2018	treasury bills
PBZ	31 Oct 2018	5%+yield on treasury bills	HRK
Erste&Steiermaerkische Bank	31 Dec 2018	4.9%	HRK
Total long and short term loans				0

Creditor	Maturity	Interest rate	Currency	Balance at 31 Dec 2018
Long term loans
Raiffeisenbank Austria d.d.	31 Mar 2021	4%	EUR	155,063
Short term loans
CBRD	15 Apr 2019	3%	EUR	74,176
		5%+yield on		33,379
PB7Z	31 Oct 2018	treasury bills	HRK
		5%+yield on	HRK	31.317
PBZ	31 Oct 2018	treasury bills
Kentbank d.d.	19 Mar 2019	3.5%	HRK	30.000
		5%+yield on		20,000
PB7	31 Oct 2018	treasury bills	Hak
		5%+yield on		14,000
PB7	31 Oct 2018	treasury bills	HRK
Erste&Steiermaerkische Bank	31 Dec 2018	4 9%	HRK	9,283
Total long and short term loans				367,218

(all amounts in HRK '000)

24.

Present value of minimum payments under finance leases:

	Minimum lease payments		Financing cost		Present value of minimum lease payments
	2019	2018	2019	2018	2019	2018
Up to one year		362		2		360
Two to five years	0	362		1		360
Less future financial expenses		2
Present value of minimum lease payments		360			1	360

25.

	31 Dec 2019	31 Dec 2018
Liabilities to related companies	723	43
Accounts payable in the country	123.725	82.362
Accounts payable abroad	10,093	85,387
	134.541	167.792

26. I LIABILITIES FOR ADVANCES

Liabilities for advances as at 31 December 2019 amount to HRK 6,945 thousand (31 December 2018: HRK 25,171 thousand) and relate to payments by foreign and domestic entrepreneurs who pay in advance for sugar.

(all amounts in HRK '000)

27.

31 Dec 2019	31 Dec 2018
14.955 Liabilities for commodity reserves
164 Liabilities to employees	1.554
624 Taxes, contributions and other benefits	841
31 Liabilities arising from share in the result	31
375 Other current liabilities	210
16.149	2,636

28.

Balances and transactions from the relationship between the Company and its related parties are set out below.

Purchase and sale transactions

Transactions between the Company and its related parties during the year were as follows:

Operating income

	Sales revenue		Other income
	2019	2018	2019	2018
VIRO BH d.o.o.	7,412	28,736
SLADORANA d.o.o.	6,877	14,026	1,153	204
SLAVONIJA ŽUPANJA d.d.		5,222
OSTRC PROMET d.o.o.		1,107
PD GRADINA	834	657
GRUDSKA PIVOVARA d.o.o.	334	458
HRVATSKA INDUSTRIJA
SECERA d.d.	27.952		210,894
	43,403	50,206	212,047	204

for the year ended 31 December 2019

(all amounts in HRK '000)

28. TRANSACTIONS WITH RELATED PARTIES (CONTINUED)

Operating expenses

	Sales expenses		Other expenses
	2019	2018	2019	2018
VIRO BH d.o.o.	7,471	39,390
SLADORANA d.o.o.	6,856	13.972	1,154	202
SLAVONIJA ŽUPANJA d.d.		5,465	1 0
OSTRC PROMET d.o.o.		1,021
PD GRADINA	લગામ	576
GRUDSKA PIVOVARA d.o.o.	236	4592
HRVATSKA INDUSTRIJA
ŠEČERA d.d.	25,675		91.555
	40,936	60,876	92.709	202

Financial income and expenses

	Financial income		Financial expenses
	2013	2018	2019	2018
SLADORANA d.o.o.	11,521	12,765	527	2.342
ROBIC d.o.o.	133	539
GRUDSKA PIVOVARA d.o.o.	262	204	143	642
VIRO BH d.o.o	122	ರಿಕ	្ទ	gg
PD GRADINA	54	90
SLAVONIJA ŽUPANJA d.d. HRVATSKA INDUSTRIJA			25	82
SECERA d.d.	12,092	13,694	697	3,165

for the year ended 31 December 2019

(all amounts in HRK '000)

28. TRANSACTIONS WITH RELATED PARTIES (CONTINUED)

Open balances from transactions at the end of the reporting period:

	Receivables from related parties		Liabilities to related parties
	2019	2018	2019	2018
VIRO BH d.o.o.	13,072	17,996
SLADORANA d.o.o.	11,622	13,223
PD GRADINA		1,977
OSTRC PROMET d.o.o	491	1,490
SLAVONIJA ŽUPANJA d.d.		979
OSTRC doo.	રિક	489
GRUDSKA PIVOVARA d.o.o.	795	459
DALMACIJAVINO SPLIT doo			1	43
HRVATSKA INDUSTRIJA
SECERA d.d.	40,169		722
	67,014	36,593	723	43

Loans given to related parties

	Receivables for given loans		Liabilities for received oans
	2019	2018	2019	2018
SLADORANA d.o.o.	270.713	274,366
SLAVONIJA ŽUPANJA d.d.		40.770	837
ROBIC d.o.o.		11,938
PD GRADINA		3,375		ﻪ
VIRO-KOOPERACIJA d.o.o.	1.677	1,677		. .
VIRO BH d.o.o.		ಿ
	272,390	332,130	837

Remuneration paid to key executives

	2019	2018
Salaries	2,434	2,994
Other	242	347
	2,726	3,341

(all amounts in HRK '000)

29. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Capital risk management

The Company manages its capital to ensure that it is allowed to continue operating indefinitely while realizing the highest possible return for stakeholders by optimizing the situation between debt and equity. The general strategy of the Company has not changed since 2012.

The Company's sources of assets consist of the debt portion, which includes borrowings and loans disclosed in Note 25 less cash and cash equivalents (so-called net debt) and equity, which includes share capital, reserves and retained earnings.

The Company's treasury regularly analyses the capital structure. As part of this analysis, the Treasury analyses the cost of capital and the risk associated with each capital item. The gearing ratio at the reporting date was as follows:

Gearing ratio

	2019	2018
Debt (i)	62,925	373,889
Cash and cash equivalents	(1,826)	(217)
Net debt	61.099	373,672
Capital (ii)	631.887	530,936
Gearing ratio%	9.67	69.23

(i) Debt comprises liabilities under long - term and short - term loans, as set out in Note 25.

(ii) Equity includes share capital, retained earnings, including current year loss or gain, and reserves.

for the year ended 31 December 2019

(all amounts in HRK '000)

29. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED)

Categories of financial instruments

	30 Dec 2019	31 Dec 2018
Financial assets
Long-term financial assets	66,345	88,241
Receivables from affiliated companies	67.014	36,568
Trade receivables	10,247	27,292
Current financial assets	210,521	253,366
Other receivables	583	2,348
Cash and cash equivalents	1,826	217
Prepaid expenses and accrued income	14	769
	356,560	408,793
Financial liabilities
Liabilities under loans and finance leases		86,355

Lisbilities unuel IVans and Imanoo louoo
Liabilities to related companies	1.560	43
Liabilities under loans and finance leases	62.088	287.534
Liabilities for advances	6.945	25.177
Accounts payable	133.819	167.749
Other current liabilities	15.525	1.795
Accrued expenses and deferred income	144	791
	220.081	569.438

The above carrying amounts represent the Company's largest exposure to credit risk on loans and receivables.

for the year ended 31 December 2019

(all amounts in HRK '000)

(an anounts In TAX 000 RISK MANAGEMENT (CONTINUED)

Financial risk management objectives

The Company's treasury function provides services to the Company's activities, coordinates access to the I he company of enational financial markets, monitors financial risks related to the Company's operations Gonoble and them through internal risk reports in which exposures are analysed by degree and size of risk.

These are market risks, which include currency risk and price risk, liquidity risk and interest rate risk.

The Company seeks to minimize the effects of these risks. The Company does not enter into contracts for The Company County County a financial instruments, nor does it trade them for speculative mirrolar The treasury function submits periodic risk exposure reports to the Management Board.

Market risk

Based on its activities, the Company is exposed to financial risks primarily in the form of movements in the Dased on its uctivities, the e of raw materials needed for its production (sugar cane and sugar beet). The proce of sugar and the risks of changes in foreign exchange rates and interest rates, which are explained in more detail below.

Exchange rate risk management

The Company concludes certain transactions in foreign currency, and is therefore exposed to the risks of changes in exchange rates.

The following table shows the carrying amounts of the Company's monetary assets and monetary liabilities denominated in foreign currencies at the end of the reporting period:

	Liabilities		Assets
	2019	2018	2019	2018
European union (EUR)	112,901	248,918	167,690	194.601
USD		11	1.717	2,524

(all amounts in HRK '000)

29. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED)

Exchange rate risk management (continued)

Currency risk sensitivity analysis

The Company is mainly exposed to the currency risk of changes in the exchange rate of the HRK against THE Sempell States the sale of sugar on the international market is largely done in EUR and the purchase of raw sugar in USD.

The following table analyses the Company's sensitivity to a ten per cent (10%) change in the exchange rate r he relieving table when in foreign currencies. A sensitivity rate of 10% is the rate used in internal reports of the Fire agains on currency risk and represents the Management Board's assessment of realistically to hey exchange in exchange rates. Sensitivity analysis includes only open monetary items in foreign posible thanged in change in exchange in exchange in exchange rates. Sensitivity analysis ourfor and as well as loans to foreign entities of the Company denominated in a currency other than the currency of the borrower or lender. A positive number indicates an increase in profit or principal than the salee of the HRK increases by 10% in relation to the currency in question. In the event of a 10% fall in the value of the HRK against the currency in question, the impact on profit or principal would be the same but opposite, i.e. the amounts in the table would be negative.

		EUR influence		USD influence
	2019	2018	2019	2018
Cain or Inse	5.479	(5,432)	172	2592

Exposure to changes in the exchange rate of the currencies shown by 10% is mostly related to the balance Expodie to change of suppliers and receivables from associated companies denominated in euros (EUR), and the balance of suppliers denominated in dollars (USD).

Interest risk management

The Company is exposed to interest rate risk due to the fact that the Company borrows funds at fixed and ring ochpany to the Company manages interest rate risk by maintaining an appropriate loan ratio with fixed and variable interest rates. The Company's exposure to interest rates on financial assets and financial liabilities is described in detail in the part of this note relating to liquidity risk management.

for the year ended 31 December 2019

(all amounts in HRK '000)

29. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED)

Interest risk management (continued)

Interest rate risk sensitivity analysis

The sensitivity analysis presented below is deternined based on the exposure to interest rates at the end of the reporting period by non-derivative instruments. The sensitivity analysis for variable interest liabilities was prepared assuming that the outstanding amount of the liability at the end of the reporting period was outstanding throughout the year. Internal interest rate risk reports submitted to key executives use an increase or decrease of 50 basis points and represent the Management Board's assessment of realistically possible changes in interest rates.

If interest rates were 50 basis points higher or lower and all other variables unchanged:

The Company's loss for 2018 would be lower by HRK 797 thousand (in 2017: loss higher/lower by HRK 649 thousand), which can mainly be related to the Company's exposure to loans and borrowings with variable interest rates.

Credit risk management

Credit risk refers to the risk that the other party will fail to meet its contractual obligations, which would result in a financial loss to the Company. The Company has adopted a policy of dealing exclusively with creditworthy parties and obtaining sufficient collateral to mitigate the risk of financial loss due to default in ersument. The Company continuously monitors its exposure to the business partners, as well as their creditworthiness, and distributes the total value of concluded transactions to accepted clients. Credit exposure is managed by setting limits for clients.

Credit analysis is performed based on the financial condition of the debtor and, if necessary, insurance coverage for credit guarantees is concluded.

The concentration of credit risk in relation to the most significant customers of the Company is shown as follows:

		Receivables
	31 Dec 2019	31 Dec 2018
Customer A	40.169	17.996
Customer B	13.072	12.962
Customer C	11,622	4,173
Customer D	1.874	3.438
Customer E	1.761	1.976
	68,498	40,545

(all amounts in HRK '000)

29. FINANCIAL INSTRUMENT AND RISK MANAGEMENT (CONTINUED)

Credit risk management (continued)

Collaterals

The company usually takes bank guarantees, promissory notes and bills of exchange as a means of securing payment with customers.

Liquidity risk management

Prudent liquidity risk management means maintaining a sufficient amount of money, securing available financial resources in an adequate amount through contracted credit lines and the ability to meet its obligations in a timely manner. It also involves striking a balance in the structure of liabilities by maturity and assets by the appropriate degree of liquidity. The Management Board is responsible for credit risk management. The Company manages its liquidity by continuously monitoring planned and realized cash flows, and by adjusting financial assets and financial liabilities. The planned cash flow is made monthly (by days), and deviations are monitored daily.

Tabular analysis of liquidity risk and interest rate risk

The following tables analyse the remaining period until the contractual maturity of the Company's nonderivative financial liabilities. The tables have been prepared on the basis of undiscounted cash oufflows on financial liabilities at the earliest date on which payment can be requested from the Company. The table includes cash outflows both by principal and by interest. For variable rate interest outflows, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is determined as the earliest date on which payment can be requested from the Company.

	Weighted average effective interest rate	Up to 1 month	From 1 to 3 months	From 3 months to 1 year	From 1 to 5 years	Tota
2019						219,135
Non-interest bearing		194,170	9,802	15,168
Interest bearing	0%	840	1	3		350
		195,010	9,809	15,166		219,985
2018
Non-interest bearing		123,334	3,478	73,146	209	200,167
Interest bearing	5.12%	7,625	55,441	228,402	88,757	380,225
		130.959	58,919	301,548	88,966	580,392

(all amounts in HRK '000)

29. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED)

Liquidity risk management (continued)

The following table analyses the remaining period up to the agreed maturities of the Company's nonderivative financial assets. The table has been prepared on the basis of undiscounted cash inflows from financial receivables at the earliest date on which the Company can request payment.

	Weighted average effective interest rate	Up to 1 month	From 1 to 3 months	From 3 months to 1 year	From 1 to 5 years	Total
2019
Non-interest bearing assets		78.745	415	2.256	398	81,814
Interest bearing assets	205%	772	1,393	215,853	66,327	284,345
		79,517	1,808	218,109	66,725	366,159
2018
Non-interest bearing assets		59.438	3,955	4.258	1,372	69,028
Interest bearing assets	6.54%	6,077	37,791	262,416	50,150	356,434
		65.515	41.746	266,674	51,522	425,457

Fair value of financial instruments

The fair values of financial assets and financial liabilities are determined as follows:

• · the fair value of financial assets and financial liabilities under standard terms and traded in active liquid markets is determined at quoted prices,
• · the fair value of other financial assets and other financial liabilities is determined in accordance with pricing models, based on an analysis of discounted cash flows using prices from known market transactions and prices offered for similar instruments.

As at 31 December 2018, the reported amounts of cash, short-term deposits, receivables, short-term libilities, accrued expenses, short-term loans and other financial instruments correspond to their market value, due to the short-term nature of these assets and liabilities.

(all amounts in HRK '000)

29. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED)

Fair value of financial instruments (continued)

Fair value indicators recognized in the statement of financial position

The following table analyses financial instruments that have been reduced to fair value after initial recognition, classified into three groups depending on the availability of fair value indicators:

Level 1 indicators - fair value indicators are derived from (unadjusted) prices quoted in active markets for the same assets and the same liabilities

Level 2 indicators - fair value indicators are derived from other data on assets or liabilities that are not quoted prices from level 1, either directly (i.e. as prices) or indirectly (i.e. derived from their prices) and,

Level 3 indicators - indicators derived from the application of valuation methods in which data on assets or liabilities that are not based on available market data are used as input data

31 Dec 2019	Level 1	Leve 2	Level 3	Total
Financial assets at fair value through other comprehensive
income				1
Total			1	0
31 Dec 2018	Level 1	Level 2	Level 3	Total
Financial assets at fair value through other comprehensive
	700	232		932
income Total	700	239	■	9392

30. PROVISIONS

The total amount of long-term provisions refers to provisions for initiated litigation and for expected credit losses for trade receivables and loans granted under IFRS 9. The movement of provisions is shown below:

As at 31 December	7,450	8,835
Discontinued provisions	(1,385)	(2,334)
New provisions	1	11,169
As at 1 January	8,835
	2019	2018

The following table shows the movement of expected credit losses for receivables in accordance with IFRS 9. Movement of expected credit losses for receivables:

As at 31 December	1,746	1.794
Decrease in expected credit losses	(48)	1.743
Increase in expected credit losses		4
As at 1 January	1,794	3,537
	2019	2018

The following table shows the movement of expected credit losses recognized for loans granted: Movement of expected credit losses for loans:

Level 1	2019	2018
As at 1 January	7.041	5,686
Increase in expected credit losses	1
Decrease in expected credit losses	(1,337)	1,355
As at 31 December	5.704	7.041

All loans granted were allocated to the Level 1 and during 2019; there was no transition between the levels.

For the purpose of assessing impairment, for loans to related parties and other parties, the Company estimated at the date of the first application that there was no significant increase in credit risk from the initial recognition date and uses a 12-month expected credit loss for these assets.

In determining the expected credit losses for these assets, the Company's Management Board took into account the publications of external investment rating agencies, historical experience and the financial position of other counterparties.

There were no changes in valuation techniques or significant assumptions during the current reporting period in estimating provisions for expected credit losses for these financial assets.

31. OPERATING LEASES

The Company as a lessee

Operating lease agreements

Operating leases relate to the lease of passenger cars for a period of 5 years. The Company has no option to repurchase the leased asset at the end of the lease term.

Lease paid recognized as an expense

	2019
Minimum lease payments	426	131

Irrevocable commitments under operating leases

	2019	2018
Up to 1 year	90	213
From 2 to 5 years	78	647
	168	860

32. LEGAL DISPUTES

Nineteen lawsuits are being filed against the Company for the collection of receivables, the total value of which is HRK 14,305 thousand. The assessment of the Company's Management Board is that it is not necessary to make provisions for them.

33. EVENTS AFTER THE BALANCE SHEET DATE

Since last year (of which the public has been notified), the companies operating within the Group (Viro and Sladorana), which are engaged in the production and sale of sugar, have transferred all their production capacities, including the vast majority of workers, to the newly established company Hrvatska industrija šećera d.d. and a very small number of workers necessary for the administrative affairs and assets not in the function of sugar production remained engaged within companies. Consequently, the impact of the pandemic caused by the COVID 19 virus did not have a significant impact on business.

Companies Viro tvornica šećera d.d. and Sladorana d.o.o. have pledged sugar stocks and a promissory note to the company Hrvatska industrija šećera d.d. for their short-term debt to the associated company, and that short-term debt replaced the creditor. At the same time, the repayment of the same was extended until 31 December 2020.

34. APPROVAL OF THE MANAGEMENT BOARD FOR THE ISSUE OF UNCONSOLIDATED FINANCIAL STATEMENTS

The Management Board adopted the unconsolidated financial statements and approved their issuance on 23 June 2020.

Signed on behalf of the Management Board on 23 June 2020:

Željko Žadro) ( President of the Management Board

Darko Krstić, Member of the Management Board

Ivo Resić, Member of the Management Board

BALANCE SHEET as at 31 December 2019

			ITTEES
VIRO TVORNICA ŠEĆERA d.d.
ROS TON	ADP	Last day of the previous year	Reporting data ol the corron pariod
1	2	an	4
A) RECEIVABLES FOR SUBSCRIBED CAPITAL UNPAID	00-	0	0
B) FIXED ASSETS (ADP 003+010+020+031+036)	0072	649,438,487	539,123,292
I INTANGIBLE ASSETS (ADP 004 to 009)	0003	2,266,166	C
1 Research and development	004	0	0
2 Concessions, patents, licences, trademarks, software and other rights	005	2,266,166	0
3 Goodwill	006	0	0
4 Advance payments for purchase of intangible assets	01077	0	0
5 Intangible assets in preparation	008	0	0
6 Other intangible assets	0103	0	0
II TANGIBLE ASSETS (ADP 011 to 019)	010	135,424,536	65,191,679
1 Land	011	5,548,592	23,538,630
2 Buildings	0172	59,336,370	1,824,100
3 Plant and equipment	013	32,708,188	2,384,080
4 Tools, working inventory and transportation assets	014	0	0
5 Biological assets	015	0	0
6 Advance payments for purchase of tangible assets	016	33,816,284	33,930,280
7 Tangible assets in preparation	017	2,230,095	2,230,095
8 Other tangible assets	018	9,300	9,300
9 Investment property	09 (3)	1,775,707	1,275,194
III FIXED FINANCIAL ASSETS (ADP 021 to 030)	0720	511,747,785	473,931,613
1 Investments in holdings (shares) of undertakings within the group	0729	424,406,807	407,586,783
2 Investments in other securities of undertakings within the	092	0	0
group	093	85,506,383	63,021,922
3 Loans, deposits, etc. to undertakings within the group 4 Investments in holdings (shares) of companies linked by	0924	0	0
virtue of participating interest 5 Investment in other securities of companies linked by virtue of participating interest	025	0	0
6 Loans, deposits etc. given to companies linked by virtue of participating interest	0926	0	0
	0727	13,670	17,908
7 Investments in securities	028	1,820,925	3,305,000
8 Loans, deposits, etc. given	0749	0	0
9 Other investments accounted for using the equity method	030	0	0
10 Other fixed financial assets	034	0	D
IV RECEIVABLES (ADP 032 to 035)	0332	0	0
1 Receivables from undertakings within the group 2 Receivables from companies linked by virtue of
participating interests	083	0	0
3 Customer receivables	034	0	0 0
4 Other receivables	035	0

BALANCE SHEET as at 31 December 2019

in HRK

VIRO TVORNICA ŠEČERA d.d.
2013 11 0 1	ADP	Last day of the previous year	Reporting date of the current pollod
1	2	sa	4
V. Deferred tax assets	036	0	0
C) CURRENT ASSETS (ADP 038+046+053+063)	037	459,850,497	320,845,210
I INVENTORIES (ADP 039 to 045)	0333	132,389,263	28,212,969
1 Raw materials	039	86,116,520	536,944
2 Work in progress	040	0	0
3 Finished goods	041	33,585,691	7,687,154
4 Merchandise	0472	8,812,000	18,727,690
5 Advance payments for inventories	043	3,875,052	1,261,181
6 Fixed assets held for sale	044	0	0
7 Biological assets	045	0	0
II RECEIVABLES (ADP 047 to 052)	046	73,878,194	80,285,191
1 Receivables from undertakings within the group	047	36,568,429	67,013,639
2 Receivables from companies linked by virtue of participating interest	04 3	0	0
3 Customer receivables	049	27,291,561	10,247,084
4 Receivables from employees and members of the undertaking	0-50	15	0
5 Receivables from government and other institutions	05-	7,670,427	2,491,595
6 Other receivables	0-42	2,347,762	532,873
III SHORT-TERM FINANCIAL ASSETS (ADP 054 to 062)	053	253,366,282	210,520,857
1 Investments in holdings (shares) of undertakings within the group	0-2	0	0
2 Investments in other securities of undertakings within the group	055	0	0
3 Loans, deposits, etc. to undertakings within the group	0 - 6	244,945,825	207,690,998
4 Investments in holdings (shares) of companies linked by virtue of participating interest	0-7	0	0
5 Investment in other securities of companies linked by virtue of participating interest	0533	0	0
6 Loans, deposits etc. given to companies linked by virtue of participating interest	059	0	0
7 Investments in securities	080	0	0
8 Loans, deposits, etc. given	069	7,720,457	2,829,859
9 Other financial assets	0692	700,000	0
IV CASH AT BANK AND IN HAND	0133	216,758	1,826,193
D ) PREPAID EXPENSES AND ACCRUED INCOME	062	760,923	73,778
E) TOTAL ASSETS (ADP 001+002+037+064)	065	1,110,049,907	860,042,280
F) OFF-BALANCE SHEET ITEMS	066	80,761,205	32,571,803

December 2019

BALANCE SHEET as at 31 December 2019

VIRO TVORNICA ŠEĆERA d.d.			in HRK
POST I ON	AD 2	Last day of the previous year	Reporting date of the current period
1	Pro 7	97	4
PASIVA
A) CAPITAL AND RESERVES (ADP 068 to 070+076+077+081+084+087)	067	530,936,108	631,887,468
I. INITIAL (SUBSCRIBED) CAPITAL	068	249,600,060	249,600,060
Il CAPITAL RESERVES	089	10,368,101	10,368,102
III RESERVES FROM PROFIT (ADP 071+072-073+074+075)	070	51,711,553	51,100,618
1 Legal reserves	071	12,480,003	12,480,003
2 Reserves for treasury shares	072	39,231,550	38,620,615
3 Treasury shares and holdings (deductible item)	07/3	0	0
4 Statutory reserves	074	0	0
5 Other reserves	075	0	0
IV REVALUATION RESERVES	076	0	0
V FAIR VALUE RESERVES (ADP 078 to 080)	077	0	0
1 Fair value of financial assets available for sale	078	0	0
2 Cash flow hedge - effective portion	079	0	0
3 Hedge of a net investment in a foreign operation - effective portion	080	0	0
VI RETAINED PROFIT OR LOSS BROUGHT FORWARD (ADP 082-083)	081	236,919,469	219,256,394
1 Retained profit	082	236,919,469	219,256,394
2 Loss brought forward	083	0	0
VII PROFIT OR LOSS FOR THE BUSINESS YEAR (ADP 085- 086)	084	-17,663,075	101,562,294
1 Profit for the business year	085	0	101,562,294
2 Loss for the business year	086	17,663,075	D
VIII MINORITY (NON-CONTROLLING) INTEREST	087	0	0
B) PROVISIONS (ADP 089 to 094)	088	8,834,992	7,450,057
1 Provisions for pensions, termination benefits and similar obligations	089	0	0
2 Provisions for tax liabilities	090	0	0
3 Provisions for ongoing legal cases	091	0	0
4 Provisions for renewal of natural resources	092	0	0
5 Provisions for warranty obligations	093	0	0
6 Other provisions	094	8,834,992	7,450,057
C) LONG-TERM LIABILITIES (ADP 096 to 106)	095	86,354,623	0
1 Liabilities towards undertakings within the group	000	0	0
2 Liabilities for loans, deposits, etc. to companies within the group	097	0	0
3 Liabilities towards companies linked by virtue of participating interest	098	0	0
4 Liabilities for loans, deposits etc. of companies linked by virtue of participating interest	099	0	0
5 Liabilities for loans, deposits etc.	100	208,554	0
6 Liabilities towards banks and other financial institutions	101	86,146,069	0

BALANCE SHEET as at 31 December 2019

			in HRK
VIRO TVORNICA ŠEĆERA d.d.
POSITION	ADP	Last day of the previous year	Reporting date Di the current period
1	2	3	4
7 Liabilities for advance payments	1072	0	0
8 Liabilities towards suppliers	103	0	0
9 Liabilities for securities	104	0	0
10 Other long-term liabilities	105	0	0
11 Deferred tax liability	106	0	0
D) SHORT-TERM LIABILITIES (ADP 108 to 121)	107	483,133,105	220,560,841
1 Liabilities towards undertakings within the group	108	43,081	723,005
2 Liabilities for loans, deposits, etc. to companies within the group	102	0	837,342
3 Liabilities towards companies linked by virtue of participating interest	110	0	0
4 Liabilities for loans, deposits etc. of companies linked by virtue of participating interest	111	0	0
5 Liabilities for loans, deposits etc.	112	6,462,091	4,408,554
6 Liabilities towards banks and other financial institutions	113	281,072,338	57,679,599
7 Liabilities for advance payments	114	25,170,938	6,944,781
8 Liabilities towards suppliers	115	167,748,686	133,818,512
9 Liabilities for securities	116	0	0
10 Liabilities towards employees	117	1,554,340	164,390
11 Taxes, contributions and similar liabilities	118	840,710	624,287
12 Liabilities arising from the share in the result	119	30,963	30,963
13 Liabilities arising from fixed assets held for sale	120	0	0
14 Other short-term liabilities	121	209,958	15,329,408
E) ACCRUALS AND DEFERRED INCOME	122	791,079	143.914
F) TOTAL - LIABILITIES (ADP 067+088+095+107+122)	128	1,110,049,907	860,042,280
G) OFF-BALANCE SHEET ITEMS	124	80,761,205	32,571,803

PROFIT AND LOSS ACCOUNT as at 31 December 2019

VIRO TVORNICA ŠEĆERA d.d.
COSITON	ADP	Last day of the Provious year	Reporting date of the current period
-	24	m	T
TOPERATING INCOME (ADP 126 to 130)	195	547,721,980	653,313,666
1 Income from sales with undertakings within the group	1126	50,205,871	43,403,466
2 Income from sales (outside group)	127/	477,419,070	453,417,504
3 Income from the use of own products, goods and services	128	56,096	34,469
4 Other operating income with undertakings within the group	129	200,947	1,152,821
5 Other operating income (outside the group)	130	19,839,996	155,305,406
II OPERATING EXPENSES (ADP 132+133+137+141+142+143+146+153)	131	609,567,032	560,814,363
1 Changes in inventories of work in progress and finished goods	132	84,799,681	25,875,196
2 Material costs (ADP 134 to 136)	133	443,507,607	490,537,284
a) Costs of raw material	134	110,021,200	186,840,468
b) Costs of goods sold	135	295,196,809	280,291,683
c) Other external costs	1136	38,289,598	23,405,133
3 Staff costs (ADP 138 to 140)	137	24,293,618	12,031,230
a) Net salaries and wages	138	15,245,560	7,454,377
b) Tax and contributions from salaries expenses	139	5,695,085	2,965,677
c) Contributions on salaries	140	3,352,973	1,611,176
4 Depreciation	141	23,853,533	8,290,916
5 Other expenses	142	6,210,291	4,987,179
6 Value adjustments (ADP 144+145)	143	10,759,251	0
a) fixed assets other than financial assets	144	0	0
b) current assets other than financial assets	145	10,759,251	0
7 Provisions (ADP 147 to 152)	146	1,945,949	0
a) Provisions for pensions, termination benefits and similar obligations	147	0	0
b) Provisions for tax liabilities	148	0	0
c) Provisions for ongoing legal cases	149	0	0
d) Provisions for renewal of natural resources	150	0	0
e) Provisions for warranty obligations	151	0	0
f) Other provisions	1592	1,945,949	0
8 Other operating expenses	153	14,197,102	19,092,558
III FINANCIAL INCOME (ADP 155 to 164)	154	68,674,110	32,561,765
1 Income from investments in holdings (shares) of undertakings within the group	155	0	0
2 Income from investments in holdings (shares) of companies linked by virtue of participating interest	156	0	0
3 Income from other long-term financial investment and loans granted to undertakings within the group	157	0	0

PROFIT AND LOSS ACCOUNT as at 31 December 2019

			in HRK
VIRO TVORNICA ŠEĆERA d.d.
4 Other interest income from operations with undertakings within the group	158	12,576,189	12,092,528
5 Exchange rate differences and other financial income from operations with undertakings within the group	150	1,117,718	0
6 Income from other long-term financial investments and loans	160	0	0
7 Other interest income	161	723.691	918,856
8 Exchange rate differences and other financial income	162	7,031,200	2,323,918
9 Unrealised gains (income) from financial assets	168	300,500	0
10 Other financial income	164	46,924,812	17,226,463
IV FINANCIAL EXPENDITURE (ADP 166 to 172)	165	24,492,133	23,498,775
1 Interest expenses and similar expenses with undertakings within the group	166	82,639	24,771
2 Exchange rate differences and other expenses from operations with undertakings within the group	167	3,082,572	671,993
3 Interest expenses and similar expenses	168	15,854,716	13,970,950
4 Exchange rate differences and other expenses	160	3,593,433	3,162,327
5 Unrealised losses (expenses) from financial assets	170	0	0
6 Value adjustments of financial assets (net)	171	0	0
7 Other financial expenses	172	1,878,773	5,668,734
SHARE IN PROPITIE FROM COMPANIES LINKED BY VIRTUE OF PARTICIPATING TING ORDER PASSE	173	0	0
VI SHARE IN PROFIT FROM JOINT VENTURES	174	0	0
VI SHARE IN LOSS OF COMPANIES LINKED BY VIRTUE OF PARTICIPATING INTEREST	175	0	0
VIII SHARE IN LOSS OF FORSE THE FORT ORES	176	0	0
IX TOTAL INCOME (ADP 125+154+173 + 174)	177	616,396,090	685,875,431
X TOTAL EXPENDITURE (ADP 131+165+175 + 176)	178	634,059,165	584,313,138
XI PRE-TAX PROFIT OR LOSS (ADP 177-178)	179	-17,663,075	101,562,293
1 Pre-tax profit (ADP 177-178)	180	0	101,562,293
2 Pre-tax loss (ADP 178-177)	181	-17,663,075	1
XII INCOME TAX	182	0	0
XIII PROFIT OR LOSS FOR THE PERIOD (ADP 179-182)	183	-17,663,075	101,562,293
1 Profit for the period (ADP 179-182)	184	0	101,562,293
2 Loss for the period (ADP 182-179)	185	-17,663,075	0
DISCONTINUED OPERATIONS (to be filled in by the entrepreneur liable to IFRS only if it has
discontinued operations)
XIV. PROFIT OR LOSS FROM DISCONTINUED OPERATIONS BEFORE TAXATION (ADP 187-188)	186	0	114,812,861
1. Profit from discontinued operations before tax	1837	0	114,812,861
2. Loss of discontinued operations before tax	188	0

PROFIT AND LOSS ACCOUNT as at 31 December 2019

			in HRK
VIRO TVORNICA ŠEĆERA d.d.
XV. INCOME TAX FOR DISCONTINUED BORSHISTORS	139	0	0
1. Profit from discontinued operations for the period (ADP 186-189)	190	0	114,812,861
2. Loss from discontinued operations for the period (ADP 189-186)	191	0
TOTAL BUSINESS (to be filled in only by an entrepreneur subject to IFRS who has discontinued
operations)
XVI. PROFIT OR LOSS BEFORE TAXATION (ADP
179+186)	192	0	216,375,154
1. Profit before taxation (ADP 192)	193	0	216,375,154
2. Loss before taxation (AOP 192)	104	0
XVII. CORPORATE INCOME TAX (ADP 182+189)	105	0
XVIII. PROFIT OR LOSS FOR THE PERIOD (ADP			0
192-195)	196	0	216,375,154
1. Profit for the period (ADP 192-195)	107	0	216,375,154
2. Loss for the period (ADP 195-192)	108	0	0
APPENDIX to the PLA (to be completed by the entity compiling the consolidated annual financial report)
XIX. PROFIT OR LOSS FOR THE PERIOD (ADP
200+201)	199	0	0
1. Attributable to equity holders of the parent	200	0	0
2. Attributable to minority (non-controlling) interest	201	0	0
STATEMENT OF OTHER COMPREHENSIVE INCOME (to be completed by the entity required to
apply IRRS)
I. PROFIT OR LOSS FOR THE PERIOD	2402	-17,663,075	101,562,293
IL OTHER COMPREHENSIVE PROFIT/LOSS
BEFORE TAXATION	2013	0	0
(ADP 204 to 211)
1. Exchange differences from the conversion of foreign operations	204	0	0
2. Changes in revaluation reserves of tangible and
intangible fixed assets	205	0	0
3. Gain or loss on the subsequent valuation of available-
for-sale financial assets	206	0	0
4. Profit or loss from effective cash flow hedges	2407	0	0
5. Profit or loss from the effective hedging of net	203	0	0
investments abroad
6. Share in other comprehensive income / loss of companies related to the participating interest	209	0	0
7. Actuarial gains / losses according to defined benefit
plans	2110	0	0
8. Other non-owner changes in equity	211	0	0
III. TAX ON OTHER COMPREFENSIVE PROFIT
FOR THE PECRICOD	2122	0	0
IV. NET OTHER COMPRHENSIVE PROFIT OR	213
LOSS FOR THE PERIOD (ADP 203-212)		0	0
V. TOTAL COMPREHENSIVE PROFIT OR LOSS	214	-17,663,075	101,562,293
FOR THE PERIOD (ADP 202+213)

CASH FLOW STATEMENT - indirect method for the period 1 January 2019 - 31 December 2019

VIRO TVORNICA SECERA d.d.
POSITON	ADP	Same pariod of the previous year	Current poriod
11	2	30	4
Cash flow from operating activities
1. Profit before tax	001	-17,663,075	101,562,294
2. Adjustments (ADP 003 to 010):	002	23,853,533	8.290.916
a) Depreciation	003	23,853,533	8.290.916
b) Gains and losses on disposals and value adjustments of property, plant and equipment and intangible assets	004
c) Gains and losses on disposals and unrealized gains and losses and value adjustments of financial assets	005
d) Interest and dividend income	006
e) Interest expenses	007
f) Provisions	008
g) Exchange rate differences (unrealized)	000
h) Other adjustments for non-monetary transactions and unrealized gains and losses	010
I. Increase or decrease in cash flows before changes in working capital(ADP 001 + 002)	011	6,190,458	109,853,210
3. Changes in working capital (ADP 013 to 016)	012	-33,871,692	132,451,565
a) Increase or decrease in short-term liabilities	013	-26,055,677	4,761,716
b) Increase or decrease in current receivables	014	61,383,036	-6,406,997
c) Increase or decrease in inventories	015	36,089,805	104,176,294
d) Other increases or decreases in working capital	016	-105,288,856	29,920,552
II. Cash from operations (ADP 011 + 012)	017	-27,681,234	242,304,775
4. Cash interest expenses	018	0
5. Paid income tax	019	0
A) NET CASH FLOWS FROM OPERATING ACTIVITIES (ADP 017 to 019)	020	-27,681,234	242,304,775
Cash flow from investment activities
1 Cash receipts from sales of fixed tangible and intangible assets	077	555,061	87,808,549
2 Cash receipts from sales of financial instruments	0742	0
3 Interest received	073	9,296,176	12,031,908
4 Dividends received	0924	75,390
5 Cash receipts from repayment of loans and deposits	025	0
6 Other cash receipts from investment activities	0-25	35,886,737	41,627,170
III Total cash receipts from Investment activities (ADP 024 to 026)	0771	45,813,364	141,467,627
1 Cash payments for the purchase of fixed tangible and intangible assets	028	-5,059,667	-23,600,442
2 Cash payments for the acquisition of financial instruments	0749	0
3 Cash payments for loans and deposits	030	0
4 Acquisition of a subsidiary, net of cash acquired	039	0

CASH FLOW STATEMENT - indirect method for the period 1 January 2019 – 31 December 2019

Obveznik: VIRO TVORNICA SECERA d.d.
POSITION	ADP	Same period of the previous year	Current period
R	15	3	4
5 Other cash payments from investment activities	0392	-12.191.005	-3,810,998
IV Total cash payments from investment activities (ADP 028 to 082)	083	-17,250,672	-27,411,440
B) NET CASH FLOW FROM INVESTMENT ACTIVITIES (ADP 027 + 033	034	28,562,692	114,056,187
Cash flow from financing activities
1 Cash receipts from the increase of initial (subscribed) capital	035
2 Cash receipts the from issue of equity financial instruments and debt financial instruments	026	0
3 Cash receipts from credit principals, loans and other borrowings	0:7	304,946,725	54,571,775
4 Other cash receipts from financing activities	038	9,200,000	1,900,000
V Total cash receipts from financing activities (ADP 035 to 038)	039	314,146,725	56,471,775
1 Cash payments for the repayment of credit principals, loans and other borrowings and debt financial instruments	040	-356,373,260	-406,448,638
2 Cash payments for dividends	049	0
3 Cash payments for finance lease	0492	-798,048	-363,729
4 Cash payments for the redemption of treasury shares and decrease of initial (subscribed) capital	048	-5,023,251	-610,935
5 Other cash payments from financing activities	044	-15,300,000	-3,800,000
VI Total cash payments from financing activities (ADP 040 to 044)	045	-377,494,559	-411,223,302
C) NET CASH FLOW FROM INVESTMENT ACTIVITIES (ADP 039 +045)	046	-63,347,834	-354,751,527
1 Unrealised exchange rate differences in cash and cash equivalents	047
D) NET INCREASE OR DECREASE OF CASH FLOWS (ADP020+034+046+047)	(043	-62,466,376	1,609,435
E) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF 22300	049	62,683,134	216,758
F) CASH AND CASH EQUIVALENTS AT THE END OF PERIOD(ADP 048+049)	050	216,758	1,826,193

STATEMENT OF PERSON RESPONSIBLE FOR PRODUCTION OF THE ANNUAL FINANCIAL REPORT FOR 1Y 2019

With this statement, in compliance with article 403, paragraph 2 of the Law on capital market, I state that to the best of our knowledge

• the set of revised financial reports of VIRO TVORNICA ŠEĆERA d.d., Zagreb for 1Y 2019, 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.
• The annual financial reports are audited.

In Zagreb, on June 23, 2020

Darko Krstig, Member of the Management Board

RESPONSIBLE PERSON

PRESIDENT OF THE MANAGEMENT BOARD: Željko Zadro, dipl.oec

Ivo Rešić, Member of the Management Board

ISSUER'S GENERAL DATA
Reporting period:		1.1.2019	to	31.12.2019
Year:		2019
		Annual financial statements
gistration number (MB):	01650971		Issuer's home Member State code:	HR
Entity's registration number (MBS):	010049135
Personal identification number (OIB):	04525204420			LEI: 5493006LGN8RLWC2UL05
Institution code:	1569
	Name of the issuer: VIRO TVORNICA ŠEČERA d.d.
Postcode and town:	10000		ZAGREB
reet and house number: ULICA GRADA VUKOVARA 269 g
	E-mail address: viro@secerana.hr
	Web address: www.secerana.hr
Number of employees (end of the reporting	11
Consolidated report:	KN	(KN-not consolidated/KD-consolidated)
Audited:	RD	(RN-not audited/RD-audited)
Names of subsidiaries (according to IFRS)			Registered office:		V 3:
	Bookkeeping fim: No No No (Yes/No)			(name of the bookkeeping firm)
	Contact person: ZDENKA SMOJVER
Telephone: 033 840 122		(only name and surname of the contact person)
	E-mail address: racunovodstvo-viro@secerana.hr
	Audit firm: BDO CROATIA d.o.o.
	(name of the audit firm) Certified auditor: VEDRANA STIPIC
	(name and surname)

n

:

BALANCE SHEET balance as at 31.12.2019

Submitter: VIRO TVORNICA ŠEĆERA d.d. Last day of the At the reporting date of ADP preceding business Item the current poriod ebut b vonr 2 1 1 0 0 001 A) RECEIVABLES FOR SUBSCRIBED CAPITAL UNPAID 539.123.292 649.438.487 002 B) FIXED ASSETS (ADP 003+010+020+031+036) 0 I INTANGIBLE ASSETS (ADP 004 to 009) 008 2.266 166 0 0 1 Research and development 004 2 Concessions, patents, licences, trademarks, software and other D 2.266.166 005 rights 0 0 006 3 Goodwill 0 0 007 4 Advance payments for purchase of intangible assets 0 0 008 5 Intangible assets in preparation 0 0 009 6 Other intangible assets II TANGIBLE ASSETS (ADP 011 to 019) 010 135.424.536 65.191.679 011 5.548.592 23.538.630 1 Land 1.824.100 012 59.336.370 2 Buildings 2.384.080 013 32,708.188 3 Plant and equipment 0 O 4 Tools, working inventory and transportation assets 014 0 0 5 Biological assets 015 33.930.280 33.816.284 6 Advance payments for purchase of tangible assets 016 2.230.095 2.230.095 017 7 Tangible assets in preparation 9.300 018 9.300 8 Other tangible assets 1.275.194 019 1.775.707 9 Investment property III FIXED FINANCIAL ASSETS (ADP 021 to 030) 473,931,613 020 511.747.785 1 Investments in holdings (shares) of undertakings within the group 424.406.807 407.586.783 021 0 022 0 2 Investments in other securities of undertakings within the group 63.021.922 07年 85.506.383 3 Loans, deposits, etc. to undertakings within the group 4 Investments in holdings (shares) of companies linked by virtue of 0 0 024 participating interest 5 Investment in other securities of companies linked by virtue of 0 0 025 participating interest 6 Loans, deposits etc. given to companies linked by virtue of 0 0 026 participating interest 13.670 17.908 027 7 Investments in securities 3.305.000 1.820.925 028 8 Loans, deposits, etc. given 0 0 9 Other investments accounted for using the equity method 0229 0 0 10 Other fixed financial assets 030 0 0 IV RECEIVABLES (ADP 032 to 035) 031 0 D 032 1 Receivables from undertakings within the group 2 Receivables from companies linked by virtue of participating 0 0 088 interests 0 0 024 3 Customer receivables 0 0 4 Other receivables 035 0 0 036 V. Deferred tax assets 459.850.497 320.845.210 C) CURRENT ASSETS (ADP 038+046+053+063) 0377 132.389.263 28.212.969 038 I INVENTORIES (ADP 039 to 045) 039 86.116.520 536,944 1 Raw materials 0 040 0 2 Work in progress 7.687.154 041 33.585.691 3 Finished goods 18.727.690 4 Merchandise 042 8.812.000 1.261.181 3.875.052 5 Advance payments for inventories 043 0 0 6 Fixed assets held for sale UALA 0 0 045 7 Biological assets 80.285.191 73.878.194 046 RECEIVABLES (ADP 047 to 052) ll 67.013.639 1 Receivables from undertakings within the group 047 36.568.429 0 0 048 2 Receivables from companies linked by virtue of participating interest 10.247.084 27.291.561 049 3 Customer receivables

in HRK

	050	15	0
4 Receivables from employees and members of the undertaking 5 Receivables from government and other institutions	051	7.670.427	2.491.595
6 Other receivables	0-72	2.347.762	532.876
111 SHORT-TERM FINANCIAL ASSETS (ADP 054 to 062)	0-3	253.366.282	210-520.857
1 Investments in holdings (shares) of undertakings within the group	054	0	0
2 Investments in other securities of undertakings within the group	055	0	0
3 Loans, deposits, etc. to undertakings within the group	0-5	244.945.825	207.690.998
4 Investments in holdings (shares) of companies linked by virtue of
participating interest	0-77	0	0
5 Investment in other securities of companies linked by virtue of	058	0	0
participating interest
6 Loans, deposits etc. given to companies linked by virtue of	0-3	0	0
participating interest 7 Investments in securities	060	0	0
8 Loans, deposits, etc. given	067	7.720.457	2.829.859
9 Other financial assets	062	700.000	0
IV CASH AT BANK AND IN HAND	063	216.758	1.826.193
D ) PREPAID EXPENSES AND ACCRUED INCOME	064	760.926	76.778
E) TOTAL ASSETS (ADP 001+002+037+064)	065	1.110.049.907	860.042.280
OFF-BALANCE SHEET ITEMS	065	80.761.205	32.571.803
LABOTIES
A) CAPITAL AND RESERVES (ADP 068 to	067	530.936.108	631.887.468
I. INITIAL (SUBSCRIBED) CAPITAL	063	249.600.060	249.600.060
II CAPITAL RESERVES	069	10.368.101	10.368.102
III RESERVES FROM PROFIT (ADP 071+072-073+074+075)	07 0	21711558	51.100.618
1 Legal reserves	079	12.480.003	12.480.003
2 Reserves for treasury shares	072	39.231.550	38.620.615
3 Treasury shares and holdings (deductible item)	07/3	0	0
4 Statutory reserves	074	0	0
5 Other reserves	075	0	0
IV REVALUATION RESERVES	076	0	0
V FAIR VALUE RESERVES (ADP 078 to 080)	0777	0	0
1 Fair value of financial assets available for sale	078	0	0
2 Cash flow hedge - effective portion	0749	0	0
3 Hedge of a net investment in a foreign operation - effective portion	030	0	0
VI RETAINED PROFIT OR LOSS BROUGHT FORWARD (ADP 082-	0:3	236 919.469	219-256-394
083)	08:2	236.919.469	219.256.394
1 Retained profit	083	0	0
2 Loss brought forward VII PROFIT OR LOSS FOR THE BUSINESS YEAR (ADP 085-086)	034	-17 663.075	101.562 294
1 Profit for the business year	0:5	0	101.562.294
2 Loss for the business year	036	17.663.075	0
VIII MINORITY (NON-CONTROLLING) INTEREST	087	0	0
B) PROVISIONS (ADP 089 to 094)	03:33	8.834.992	7 450.057
1 Provisions for pensions, termination benefits and similar obligations	089	0	0
2 Provisions for tax liabilities	090	0	0
3 Provisions for ongoing legal cases	0.91	0	0
4 Provisions for renewal of natural resources	0872	0	0
5 Provisions for warranty obligations	033	0	0
6 Other provisions	0.94	8.834.992	7.450.057
C) LONG-TERM LIABILITIES (ADP 096 to 106)	035	86.354 678	0
1 Liabilities towards undertakings within the group	026	0	0
2 Liabilities for loans, deposits, etc. to companies within the group	037	0	0
3 Liabilities towards companies linked by virtue of participating interest	038	0	0
4 Liabilities for loans, deposits etc. of companies linked by virtue of participating interest	(0:3)	0	0
5 Liabilities for loans, deposits etc.	100	208.554	0
6 Liabilities towards banks and other financial institutions	107	86.146.069	0
7 Liabilities for advance payments	1072	0	0
8 Liabilities towards suppliers	103	0	0
9 Liabilities for securities	104	0	0
10 Other long-term liabilities	105	0	0

ri

L

11 Deferred tax liability	106		0
D) SHORT-TERM LIABILITIES (ADP 108 to 121)	107	483 133 105	220.560.841
1 Liabilities towards undertakings within the group	108	43.081	723.005
2 Liabilities for loans, deposits, etc. to companies within the group	100	0	837.342
3 Liabilities towards companies linked by virtue of participating interest	110	0	0
4 Liabilities for loans, deposits etc. of companies linked by virtue of participating interest	111	0	0
5 Liabilities for loans, deposits etc.	112	6.462.091	4.408.554
6 Liabilities towards banks and other financial institutions	113	281.072.338	57.679.599
7 Liabilities for advance payments	114	25.170.938	6.944.781
8 Liabilities towards suppliers	115	167.748.686	18:318.512
9 Liabilities for securities	116
10 Liabilities towards employees	117	1.554.340	164.390
11 Taxes, contributions and similar liabilities	118	840.710	624.287
12 Liabilities arising from the share in the result	119	30.963	30.968
13 Liabilities arising from fixed assets held for sale	120
14 Other short-term liabilities	129	209.958	15.329.408
E) ACCRUALS AND DEFERRED INCOME	122	791.079	143.914
F) TOTAL - LIABILITIES (ADP 067+088+095+107+122)	123	1-110-049-907	860.042.280
OFF-BALANCE SHEET ITEMS G)	124	80.761.205	32.571.803

न

V

STATEMENT OF PROFIT OR LOSS for the period 01.01.2019 to 31.12.2019

Submitter: VIRO TVORNICA SECERA d.d.	ADP
IT& TI	code	Same pariod of the Drevious will	Current per od
	ਨ	রী	45
OPERATING INCOME (ADP 126 to 130)	175	547.721.980	653.313.666
1 Income from sales with undertakings within the group	126	50.205.871	43.403.466
2 Income from sales (outside group)	1777	477.419.070	453.417.504
3 Income from the use of own products, goods and services	173	56.096	34.469
4 Other operating income with undertakings within the group	129	200.947	1.152 32
5 Other operating income (outside the group)	130	19.839.996	155.305.406
II OPERATING EXPENSES (ADP 132+133+137+141+142+143+146+153)	131	609.567.032	560 814 363
1 Changes in inventories of work in progress and finished goods	132	84.799.681	25.875.196
2 Material costs (ADP 134 to 136)	178	448 507 607	490 - 87 284
a) Costs of raw material	124	110.021.200	186.840.468
b) Costs of goods sold	185	295.196.809	280.291.683
c) Other external costs	136	38.289.598	23.405.133
3 Staff costs (ADP 138 to 140)	137	24,293,618	12.031.230
a) Net salaries and wages	138	15.245.560	7.454.377
b) Tax and contributions from salaries expenses	1 (39)	5.695.085	2.965.677
c) Contributions on salaries	140	3.352.973	1.611.176
4 Depreciation	141	23.853.538	8.290.916
5 Other expenses	142	6.210.291	4.987.179
6 Value adjustments (ADP 144+145)	148	10.75975	0
a) fixed assets other than financial assets	144	0	0
b) current assets other than financial assets	145	10.759.231	0
7 Provisions (ADP 147 to 152)	14.5	1.945.949	0
a) Provisions for pensions, termination benefits and similar obligations	147	0	0
b) Provisions for tax liabilities	14:3	0	0
c) Provisions for ongoing legal cases	149	0	0
d) Provisions for renewal of natural resources	150	0	0
e) Provisions for warranty obligations	159	0	0
f) Other provisions	152	1.945.949	0
8 Other operating expenses	153	14.197.102	19.092.558
III FINANCIAL INCOME (ADP 155 to 164)	। ਟੈਕ	68.674 110	32,561-765
1 Income from investments in holdings (shares) of undertakings within	155	0	D
the group
2 Income from investments in holdings (shares) of companies linked by virtue of participating interest	156	0	0
3 Income from other long-term financial investment and loans granted to undertakings within the group	157	0	0
4 Other interest income from operations with undertakings within the group	158	12.576.189	12.092.528
5 Exchange rate differences and other financial income from operations with undertakings within the group	153	1.117.718	0
6 Income from other long-term financial investments and loans	160	0	0
7 Other interest income	161	723.691	918.856
8 Exchange rate differences and other financial income	162	7.031.200	2.323.918
9 Unrealised gains (income) from financial assets	163	300.500	0
10 Other financial income	164	46.924.812	17.226.463
IV FINANCIAL EXPENDITURE (ADP 166 to 172)	165	24.4927 KB	23.498.775
1 Interest expenses and similar expenses with undertakings within the	135	82689	24.771
group 2 Exchange rate differences and other expenses from operations with	167	3.082.572	671.993
undertakings within the group 3 Interest expenses and similar expenses	163	15.854.716	13 370 950
4 Exchange rate differences and other expenses	169	3.593.433	3.162.327
5 Unrealised losses (expenses) from financial assets	170	0	0
6 Value adjustments of financial assets (net)	174	0	0
7 Other financial expenses	1772	1.878.776	5.668.734
SHARE IN PROFIT FROM COMPANIES LINKED BY VIRTUE OF PARTICIPATING INTEREST	173	0	0

VI SHARE IN PROFIT FROM JOINT VENTURES	174	0	0
VII SHARE IN LOSS OF COMPANIES LINKED BY VIRTUE OF
PARTICIPATING INTEREST	175	0
VIII SHARE IN LOSS OF JOINT VENTURES	175	0
IX TOTAL INCOME (ADP 125+154+173 + 174)	1777	616.396.090	685.875 431
TOTAL EXPENDITURE (ADP 131+165+175 + 176)	178	634.059.165	584.318 KE
PRE-TAX PROFIT OR LOSS (ADP 177-178)	179	-17.663.075	101.562.293
1 Pre-tax profit (ADP 177-178)	180	(0)	101.562.293
2 Pre-tax loss (ADP 178-177)	189	-17 663-075	t
XII INCOME TAX	1892	0	0
XIII PROFIT OR LOSS FOR THE PERFOD (ADP 179-182)	183	-17.663.075	101.562.208
1 Profit for the period (ADP 179-182)	184	0	101 562,293
2 Loss for the period (ADP 182-179)	185	-17.663.075	0
DISCONTINUED OPERATIONS (to be filled in by undertakings subject to IFRS only with discontinued operations)
XIV PRE-TAX PROFIT OR LOSS OF DISCONTINUED OPERATIONS
(ADP 187-188)	186	0	114.812.86
1 Pre-tax profit from discontinued operations	187	0	114.812.861
2 Pre-tax loss on discontinued operations	188	0
XV INCOME TAX OF DISCONTINUED OPERATIONS	189	0
1 Discontinued operations profit for the period (ADP 186-189)	190	0	114.812 861
2 Discontinued operations loss for the period (ADP 189-186)	1991	0
TOTAL OPERATIONS (to be filled in only by undertakings subject to IFRS with discontinued operations)
XVI PRE-TAX PROFIT OR LOSS (ADP 179+186)	1992	0	216.375.154
1 Pre-tax profit (ADP 192)	198	0	216.375.154
2 Pre-tax loss (ADP 192)	194	0	0
XVII INCOME TAX (ADP 182+189)	195	0
XVIII PROFIT OR LOSS FOR THE PERIOD (ADP 192-195)	196	0	216.375.154
	197	0	216.375.154
1 Profit for the period (ADP 192-195)	198	0	0
2 Loss for the period (ADP 195-192)
APPENDIX to the P&L (to be filled in by undertakings that draw up consolidated annual financial statements XIX PROFIT OR LOSS FOR THE PERIOD (ADP 200+201)	199	O
	200	0	0
1 Attributable to owners of the parent	201	0
2 Attributable to minority (non-controlling) interest STATENT OF OTHER COMPRENSIVE INCOME (to be filled in by undertakings subject to IFRS)
I PROFIT OR LOSS FOR THE PERIOD	202	-103.442.212	101.562.293
II OTHER COMPREHENSIVE PROFIT/LOSS BEFORE TAX
(ADP 204 to 211)	203	0	l
1 Exchange rate differences from translation of foreign operations	204	0	0
2 Changes in revaluation reserves of fixed tangible and intangible assets	205	0	0
3 Profit or loss arising from re-evaluation of financial assets available for	206	0
sale
4 Profit or loss arising from effective cash flow hedging	207	0	0
5 Profit or loss arising from effective hedge of a net investment in a foreign operation	208	0	0
6 Share in other comprehensive income/loss of companies linked by virtue of participating interest	209	0	0
7 Actuarial gains/losses on defined remuneration plans	210	0	0
8 Other changes in equity unrelated to owners	211	0	0
III TAX ON OTHER COMPREHENSIVE INCOME FOR THE PERIOD	212	0	0
IV NET OTHER COMPREHENSIVE INCOME OR LOSS (ADP 203-212)	213	0	D
V. COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD (ADP 2024213)	214	-103.442.212	101 562.293
APPENDIX to the Statement on comprehensive in be filled in by entrepreneurs who draw up consolidated statements)
VI COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD (ADP 216+217)	295	0	0
1 Attributable to owners of the parent	216	0	0
2 Attributable to minority (non-controlling) interest	217	0	0

제

ﻟ

STATEMENT OF CASH FLOWS - indirect method for the period 01.01.2019 . to 31.12.2019.

Submitter: VIRO TVORNICA SECERA d.d.	ADP	Same period of the
tern	COGE	orevious vear	Gurrent period
1	2	3 -	4
Cash flow from operating activities
1 Pre-tax profit	001	-17.663.075	101.562.294
2 Adjustments (ADP 003 to 010):	0072	23.853.533	8.290.916
a) Depreciation	003	23,853,533	8.290.916
b) Gains and losses from sale and value adjustment of fixed tangible and intangible assets	004	0	0
c) Gains and losses from sale and unrealised gains and losses and value adjustment of financial assets	005	0	0
d) Interest and dividend income	006	0	0
e) Interest expenses	007	0	0
f) Provisions	008	0	0
g) Exchange rate differences (unrealised)	009	0	0
h) Other adjustments for non-cash transactions and unrealised gains and losses	0-10	0	0
Cash flow increase or decrease before changes in the working capital (ADP 001+002)	011	6.190.458	109.853.210
3 Changes in the working capital (ADP 013 to 016)	09 72	-33.871.692	132.451 565
a) Increase or decrease in short-term liabilities	07 €	-26.055.677	4.761.716
b) Increase or decrease in short-term receivables	014	61.383.036	-6.406.997
c) Increase or decrease in inventories	0915	36.089.805	104.176.294
d) Other increase or decrease in the working capital	016	-105-288.856	29.920.552
II Cash from operations (ADP 011+012)	0-77	-27.681 234	242.304.775
4 Interest paid	0-18	0	0
5 Income tax paid	09 9	0	0
A} NET CASH FLOW FROM OPERATING ACTIVITIES (ADP 017 to 019)	020	-27.681.234	242.304.775
Cash flow from investment activities
1 Cash receipts from sales of fixed tangible and intangible assets	6929	555.061	87.808.549
2 Cash receipts from sales of financial instruments	022	0	0
3 Interest received	078	9.296.176	12.031.908
4 Dividends received	024	75.390	0
5 Cash receipts from repayment of loans and deposits	075	0	0
6 Other cash receipts from investment activities	026	35.886.757	41.627.170
Ill Total cash receipts from investment activities (ADP 021 to 026)	027	45.813.364	141.467 377
1 Cash payments for the purchase of fixed tangible and intangible assets	028	-5.059.667	23,600.442
2 Cash payments for the acquisition of financial instruments	0749	0	0
3 Cash payments for loans and deposits for the period	030	0	0
4 Acquisition of a subsidiary, net of cash acquired	ાજિન	0	0
5 Other cash payments from investment activities	0372	-12.191.005	-3.810.998
IV Total cash payments from Investment activities (ADP 028 to 032)	038	-17 250.672	-27 411 440
B) NET CASH FLOW FROM INVESTMENT ACTIVITIES (ADP 027 4033)	034	28 367 692	114.056 87
Cash flow from financing activities
1 Cash receipts from the increase of initial (subscribed) capital	035	0	0
2 Cash receipts from the issue of equity financial instruments and debt financial instruments	036	0	0
3 Cash receipts from credit principals, loans and other borrowings	037	304.946.725	54.571.775
4 Other cash receipts from financing activities	033	9.200.000	1.900.000
V Total cash receipts from financing activities (ADP 035 to 038)	033	314.146.725	56.471.775
1 Cash payments for the repayment of credit principals, loans and other borrowings and debt financial instruments	040	-356 378 260	-406.448.638
2 Dividends paid	041	0	D
3 Cash payments for finance lease	04/2	-798.048	-363.729

4 Cash payments for the redemption of treasury shares and decrease of initial (subscribed) capital	043	-5.028 251	-610-0351
5 Other cash payments from financing activities	044	-15.300.000	-3,800.000
VI Total cash payments from financing activities (ADP 040 to 044)	045	-377-494-559	-411 72 302
C) NET CASH FLOW FROM FINANCING ACTIVITIES (ADP 039 +045)	046	-63 347 834	-354.75 -527
1 Unrealised exchange rate differences in cash and cash equivalents	047
D) NET INCREASE OR DECREASE OF CASH FLOWS (ADP 020+034+046+047)	048	-62.466 -76	1.609.435
E) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF PERIOD	040	62.683.134	216.758
F) CASH AND CASH EQUIVALENTS AT THE END OF PERIOD(ADP 048+049)	050	216-758	1:326 198

ುಳ್ಳ

STATEMENT OF CHANGES IN EQUITY

B 1.1.2019 for the period from	- 21.1
										calmen practi ? Profilize			ದ	THE COLLIN
to to final day of the provious bundown your (rustoming (ADP D1 to on the first day of the previous launters your wwpped Dullimosome in escripti Correction of error 14411		000 LIDE BIT	ાભ	a b	711				DOG	B	000			5
hanges in revelusives of fixed langible and Inlangible suusts schange rate a Berences from transfation of for engage and of the period			3						0 0			6-48 (820)		17.000 646 BOG
Guire or lowers with a lots of a new of a new ment in a localy roft or loss a leing thous re-wail.astion of firm.cist sussets evailable for mate go and or louises and official seem flow hedging
state in other comprehensive incomplians of companise linked by virtual of Tax on Iransactions resegriesed directly in equily Actuarial gairmiomes or defined benefil plans unutus 10 personal relation in teached to seman ration
i increase lean while (subscribed) capital (cities from reinvesting profil. cl cihar than whing from the pro-barivantey sellinenel procedural novelle of Information of International provesting provins
increase of fritial (pubscribud) couplial aristing from line pro-internet. supply
Transfor to reverse by enville sonediae Redemption of treasury alwares,"holding a Paymani of share in profil/dividual Other il leighbullion in awners.	皇后不符
Balance on the last the provises business year reperting ported (ADP ות שלישירים והוא היה היה שלו דוגמה שיש שירות שיש שיש הי ונושב ביו la 22)	2											19
PERCENT TO THE STATISCHEN OF CHAINMER IN RESULTY for be miled in by more OTHER COMPRENENDING INCORRE OP THE PREVIOUS PIDOD, NET OF (АДРОВ Г 14)	1
Columbian Moonte on Foods for the Fireform Listed from 24) -												17,862,077		17.002
TRANSACTIONS THITH OWNERS IN THE PREVIOUS PERSON RECONS BOLLEY IN BOUNLY (ADP 15 ID 20)
imes on the that day of the carrent isualmom your Changes in accentraling policies Correction of terrote Parked porchad		000 000	10.368 101	12,460,003 00	30.201.550				000	210.250.304			000	30
propes any the find day of the energent from the freeloped (ADP 27 la 29) nonema millers from transminen move transitis etam e president ിവിശേഷ ന്ദ് live period					193 80						642 101	530,936.10 104.602.2		8 10-1
Profit or loss arts and re-sunituation of firmulation and available for male risus a sualization reserver de di formalismanen el magnari
Guine ar leasen arieing from affactive institutions of a nel foreign the possible on and chant contribution business on while
thoinating interest PHOTOS
് നോസേനിന്റെ സമ്പിച്ച് (ന്യോഗസ്ത്രവ്) സമരീതി (ന്യൂസ് (ന്ലാസ് (ന്യാസവിശു ഗ്രാമി ൽ ശ്രീനം മന്ത്രിയു (rum മാം ഇന്ത-ഗ്രങ്ങിയത്തു ഉയർമ്മനാവ procud.co) Actuatel gains/loases on datinat recumention plans Tus on Irenneolons recognited directy in equity of the obenges in equily unreleted to ouvers
the guilter
linereas of Intilis) (subscribed) capital while pro-berstauptcy sell/erners) Rademption of trearury sharechedlega cedure					-210,035							A101
Therster to reserves by annual schedule Peyment, of share in profilidividend alter distribution in overtura	3 9 8 6 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8
Balynas on the last does of the surverli business year reporting paried (ADP Increase in reserves arteing from the pro-baniuruptcy suffilement procedure 10 41}			0.360.901	12.480.005	34,477						09	631,007,497		2
PLECON TO THE UTATECTLAT OF OFFICES IN BOATTY But ha Milled in by In OTHER OOMPRINENCENSIVE INCOME FOR THE CURRITIENT PERSON, NET OF
COMPRENESSIONAL INCOME OR LOBS POR THE CURRENT PERIOD [ADP (ADP 22 to 40)
B TRANSACTIONS VITTH OWNERS IN THE CURRENT PERSON RECODENE a												01.802.00
RECTLY IN BOUNTY (ADP 41 to 46)