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Zagrebačka burza d.d.

Quarterly Report Jul 29, 2022

2105_10-q_2022-07-29_61be6c79-233b-4770-8103-29220ee65a48.pdf

Quarterly Report

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Zagreb Stock Exchange, Inc.

Unconsolidated unaudited financial results for

1/1/2022 – 30/6/2022

29 July 2022

CONTENTS

1 INTERIM MANAGEMENT REPORT FOR THE PERIOD BETWEEN 1/1/2022 AND 30/6/2022 1
1.1 Significant business events of the Zagreb Stock Exchange, Inc. in the period between 1/1/2022 and
30/6/2022 1
1.2 Zagreb Stock Exchange overview 2
1.3 Expected future development of the Company 7
1.4 Research & Development activities 7
1.5 Information on repurchase of own shares 7
1.6 Subsidiaries of the Company 8
1.7 Financial instruments used by the Company 8
1.8 Company's objectives and policies related to financial risk management 8
1.9 Company's exposure to price risk, credit risk, liquidity risk and cash flow risk 9
1.10 Statement of transactions and transfers between the Company and its subsidiaries and shareholders
9
1.11 Statement of events which might have an adverse effect on Company operations 9
1.12 Business results for 1/1/2022 – 30/6/2022 9
2 DECLARATION OF RESPONSIBILITY FOR THE PREPARATION OF FINANCIAL STATEMENTS 13
Unconsolidated unaudited financial statements of the Company for 1/1/2022 – 30/6/2022 14

1 INTERIM MANAGEMENT REPORT FOR THE PERIOD BETWEEN 1/1/2022 AND 30/6/2022

1.1 Significant business events of the Zagreb Stock Exchange, Inc. in the period between 1/1/2022 and 30/6/2022

In the first half of 2022, the Zagreb Stock Exchange, Inc. (hereinafter: the Company or the Exchange) recorded the following significant business events:

  • On March 8, 2022, the Stock Exchange marked International Women's Day by opening a trade with a symbolic bell ringing to highlight the need to involve more women in the world of work and their advancement in the business world.
  • On May 26 and 27, 2022, the investment conference of the Zagreb and Ljubljana stock exchanges "CEE Investment Opportunities" was held. The event was organized for the first time in 2014. The aim of the event is to facilitate the access of regional and international investors to Slovenian and Croatian companies, thereby strengthening their visibility and supporting liquidity. For the second year in a row, Slovenian and Croatian companies were joined by companies listed on the Macedonian Stock Exchange. The event was held via the Zoom webinar platform, and was attended by about 200 analysts and investors from the region, as well as from Austria, the Czech Republic, Estonia, Germany, Poland, Spain, Turkey, Great Britain, the United States of America and Japan.
  • On June 8, 2022, the Annual Education for issuers was held in the co-organization of the Croatian Financial Services Supervisory Agency, the Central Depository & Clearing Company and the Zagreb Stock Exchange, which has been held since 2011. The training brought together more than a hundred representatives of companies listed on the Zagreb Stock Exchange and was held online.
  • On June 14, the Zagreb Stock Exchange's General Assembly was held where, among others, a decision was made to regularly reduce the share capital by merging shares according to the ratio 2:1, by issuing to each shareholder one new ordinary registered share with a nominal value of HRK 10 for two shares outstanding. The basic capital of the Zagreb Stock Exchange was thus reduced from HRK 46,357,000 by HRK 23,178,500 to HRK 23,178,5001 .
  • On June 15, 2022, a presentation was held at the Zagreb Stock Exchange for investors of the Funderbeam SEE campaign of the company FRIENDLY FIRE.
  • On June 24, 2022, the Zagreb Stock Exchange acquired an additional 199 shares of the Macedonian Stock Exchange and increased its share in that stock exchange to 17.05%.
  • On June 27, 2022, the new version of the Xetra T7 10.1 trading system was put into production on the Zagreb and Ljubljana Stock Exchanges. The migration was carried out without difficulty.

1 More in the Notes to the financial statements in item 10.

1.2 Zagreb Stock Exchange overview

In the second quarter of 2022, the total turnover amounted to HRK 499 million, which is -27% less than in the same period of 2021, while the total turnover since the beginning of the year, i.e., in the first half of 2022, amounts to HRK 1,507 million (+32% compared to the first half of 2021).

HRK 2Q 2021 2Q 2022 change 1H 2021 1H 2022 change
TOTAL TURNOVER 685.821.627 499.472.946 -27,17% 1.140.549.730 1.506.902.174 32,12%
Orderbook turnover 473.773.888 471.730.911 -0,43% 928.501.991 1.127.048.795 21,38%
Stocks 404.793.992 432.379.785 6,81% 804.521.266 1.048.684.936 30,35%
Bonds 51.168.022 28.767.474 -43,78% 92.556.627 33.020.421 -64,32%
ETFs 17.811.874 10.583.652 -40,58% 31.424.099 45.343.438 44,30%
Block turnover 212.047.739 27.742.035 -86,92% 212.047.739 379.853.379 79,14%
Equity Block 212.047.739 27.742.035 -86,92% 212.047.739 379.853.379 79,14%
Debt Block 0 0 0 0

Securities turnover

The biggest jump in the amount of daily turnover began to be noticed in late February following the start of the war in Ukraine. The next few weeks were marked by high volatility, and the initial shock did not subside until late March. The continuation of the half-year brought mostly positive sentiment, so in the second quarter of 2022, the orderbook turnover amounted to HRK 471 million, only -0.43% less than in the second quarter of 2021. Of this amount, HRK 432 million refers to stock turnover (2Q 2021: HRK 405 million), HRK 29 million to bond turnover (2Q 2021: HRK 51 million), while ETFs achieved a turnover of HRK 11 million (2Q 2021: HRK 18 million). The equity block turnover amounted to almost HRK 28 million (2Q 2021: HRK 212 million), while the debt block turnover was absent as in the same period last year. Since the beginning of 2022, the total turnover has reached HRK 1,507 million, which is as much as +32% more than in the first half of last year (1H 2021: HRK 1,141 million). Within the orderbook in the first half of 2022, the stock turnover amounted to HRK 1,049 million and is higher by +30.3% (1H 2021: HRK 805 million), the bond turnover was only HRK 33 million and is lower by -64,3% (1H 2021: HRK 93 million), while ETF turnover increased by +44.3% and amounts to HRK 45 million (1H 2021: HRK 31 million). The largest part of equity block turnover was realized in the first quarter, and at the level of the half-year, it amounts to a significant HRK 380 million, which is an increase of as much as +79% compared to the same period in 2021 (1H 2021: HRK 212 million).

Securities turnover

The market value measured by market capitalization as of 30 June 2022 was higher by a total of HRK 335 million compared to the end of the first half of 2021. The equity market capitalization is higher by HRK +6.5 billion or +5%, with the market capitalization of the Prime Market lower by -4.7%, the Official Market higher by +4.4%, and the Regular Market by +11%. The debt market capitalization is lower by -4.6% while the value of ETFs increased by a significant +25.5%.

Market capitalization and number of listed securities

Market capitalization (HRK) Number of listed securities
30.6.2021 30.6.2022 30.6.2021 30.6.2022 change
TOTAL 263.598.641.185 263.934.200.886 0,13% 130 130 0,00%
Stocks 130.834.615.709 137.319.943.118 4,96% 100 98 -2,00%
Prime Market 30.729.538.906 29.294.947.386 -4,67% 6 6 0,00%
Official Market 46.823.250.251 48.898.906.526 4,43% 22 21 -4,55%
Regular Market 53.281.826.552 59.126.089.206 10,97% 72 71 -1,39%
Bonds 132.711.816.473 126.548.728.789 -4,64% 28 30 7,14%
ETFs 52.209.004 65.528.979 25,51% 2 2 0,00%

Compared to the end of the first half of 2021, as of 30 June 2022, one less share was listed on the Regular and the Official Market, while the number of stocks listed on the Prime Market remained unchanged.

Equity Market Capitalization and number of stocks listed

A comparison of data for the first half of 2022 with data from the same period last year shows a stable trend among indices as well. With the exception of CROBEXkonstrukt, which weakened -10.77%, all other stock indices increased or slightly decreased compared to the closing value on June 30, 2021. CROBEXtransport (+26%) increased the most, followed by CROBEXplus (+11%). CROBEXtr, which also calculates the dividend yield, rose by +5%, which is an excellent indicator of the return on investment that investors could achieve. The ADRIAprime regional index rose by +2.6%, while bond indices fell by -9.8% (CROBIS) and -7.7% (CROBIStr).

Indices - value (30.6.2021 vs. 30.6.2022)

* (=x/10)

1H 2021 1H 2022

* (=x/10)

1.3 Expected future development of the Company

In 2022, the Company will continue to focus on restoring confidence and raising Corporate Governance standards and reporting on a regulated market. The Company will also focus on greater promotion of existing issuers, with a focus on Prime Market. The Company will continue internally to develop IT services that will be used by the Zagreb and Ljubljana Stock Exchanges, and thus further reduce the need for external suppliers.

The Company will press on with previously initiated projects, placing the greatest emphasis on the project of regional SME capital market development (Progress), and further activities related to financing and investing in start-ups (Funderbeam SEE).

1.4 Research & Development activities

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

In 2021, the biggest focus was on the development of Exchange's own trading monitoring software, Zeus, as well as on the Exchange's strategy development project for the next five years. The Exchange also participated in the CCP implementation project for the Republic of Croatia and successfully implemented new trading system releases and other infrastructure optimization activities.

In 2022, the Exchange is intensively carrying out activities and preparatory actions for the introduction of the euro as the official currency in the Republic of Croatia from January 1, 2023.

1.5 Information on repurchase of own shares

As of June 30, 2022, the Company held no own shares.

The Company did not acquire own shares between 1 January 2022 and 30 June 2022.

1.6 Subsidiaries of the Company

The Ljubljana Stock Exchange, Inc., a company domiciled in Ljubljana. The issued share capital of the Ljubljana Stock Exchange is EUR 1,401,000, in which the Zagreb Stock Exchange, Inc. participates with 100 %.

SEE Link d.o.o., a company domiciled in Skopje. The issued share capital of SEE LINK is EUR 80,000, in which the Zagreb Stock Exchange, Inc. participates with 33.33%.

Funderbeam South East Europe d.o.o., a company domiciled in Zagreb. The issued share capital of Funderbeam South East Europe d.o.o. is HRK 244,000, and the share of the Zagreb Stock Exchange, Inc. in the share capital is 30%.

On June 30, 2022, the Zagreb Stock Exchange, Inc. holds a total of 476 shares, i.e., 17.05% of the share capital of Macedonian Stock Exchange, Inc.2

1.7 Financial instruments used by the Company

The Company is fully funded by its own capital. The financial instruments the Company invests in are investment funds (money market and bond funds) and bank deposits.

1.8 Company's objectives and policies related to financial risk management

All employees of the Company, including its Management and Supervisory Board, are involved in the implementation of internal control and risk management systems.

The Company manages risks, including financial risks, particularly through two mutually independent control functions: monitoring of compliance with relevant regulations and internal audit function.

2 After the balance sheet date, the Zagreb Stock Exchange increased its ownership stake in the Macedonian Stock Exchange to 691 shares or 24.75% in two additional transactions.

These control functions process and monitor the work of all organizational units, Company activities and support services.

1.9 Company's exposure to price risk, credit risk, liquidity risk and cash flow risk

The Company invests free funds in open-end money market and bond investment funds, as well as bank deposits. Its investments are carried at fair value. The Company mitigates the price risk by diversifying its portfolio of open-end investment funds it by investing in different types of funds managed by different fund management companies, and by investing in low-risk funds.

The Company has no loans received, rather its cash and financial assets exceed substantially the liabilities of the Company, and consequently, the Company's liquidity position is satisfactory.

1.10 Statement of transactions and transfers between the Company and its subsidiaries and shareholders

The Company confirms that in 2022 there were no transactions between the Company and its subsidiaries and shareholders in excess of EUR 100,000.

1.11 Statement of events which might have an adverse effect on Company operations

The ongoing war in Ukraine and sanctions against the Russian Federation are affecting economies in Europe and the world. The Company has no significant exposure in Ukraine, Russia and Belarus. However, the effect on the general economic situation may require a revision of certain assumptions and estimates, which may lead to significant adjustments in the carrying amount of certain assets and liabilities over the next financial year. At this stage, management cannot reliably assess the impact as new developments take place day by day.

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

1.12 Business results for 1/1/2022 – 30/6/2022

In the first half of 2022, the Company generated a total of HRK 7,510 thousand of operating revenues, which is HRK +583 thousand or +8.4% more than in the same period last year when they amounted to HRK 6,928 thousand. Compared to the first half of 2021, sales revenue increased from HRK 4,769 to HRK 5,197 thousand, i.e., by HRK +428 thousand or +9%. The increase in sales revenue is primarily the result of an increase in income from commissions and membership fees, which, following the increased securities turnover from the end of February to mid-March this year, reached the amount of HRK 2,135 thousand by the end of the first half of this year; HRK +390 thousand or +22.3% more compared to the first half of 2021, when they amounted to HRK 1,745 thousand. Considering the approximately equal number of listed securities, the income from listing maintenance fees remained in the first half of 2022 at almost the same level as in the same period last year. In the first six months of 2022, the income from listing maintenance fees amounts to HRK 2,534 thousand, which is a decrease of only HRK -7 thousand or -0.3% (1H 2021: HRK 2,541 thousand). In the first half of 2022, one more share was listed than in the same period last year, so income from quotation maintenance increased by HRK +45 thousand or +9.4% and amounted to HRK 528 thousand (1H 2021: HRK 483 thousand). Compared to the first half of 2021, other operating income increased by HRK +155 thousand or +7.2%, i.e., from HRK 2,159 to HRK 2,314 thousand. The stated increase in other operating income is a consequence of the increase in other income by HRK +223 thousand or +26% which amounted to HRK 1,086 thousand and includes income from education and income from issuing and maintaining LEI (1H 2021: HRK 863 thousand). Income from the supply of information fell by HRK -68 thousand or -5.2% and amounted to HRK 1,228 thousand (1H 2021: HRK 1,296 thousand).

Observing only the second quarter of 2022, the total Company's operating income amounts to HRK 3,591 thousand, which is a slight decrease of HRK -3 thousand (-0.1%) compared to the second quarter of last year, when operating income amounted to HRK 3,594 thousand. Sales revenues fell from HRK 2,397 thousand in the second quarter of 2021 to HRK 2,348 thousand in the same period of the current year. The decrease in income from commissions and membership fees from HRK 905 to HRK 808 thousand contributes to this decrease (HRK -97 thousand or -10.8%). Due to the larger number of newly listed securities, Income from quotation maintenance increased from HRK 220 to HRK 266 thousand (HRK +45 thousand or +21.2%), while income from listing maintenance fees remained almost at the same level and amounts to HRK 1,274 thousand (2Q 2021: HRK 1,272 thousand). Other operating income increased slightly from HRK 1,197 to HRK 1,243 thousand (HRK +46 thousand or +3.8%). Within other operating income, income from the supply of information fell from HRK 730 to HRK 616 thousand (HRK -114 thousand or -15.6%), and other income increased from HRK 467 to HRK 627 thousand (HRK +160 thousand or +34,1%).

Along with the normalization of business operations after two pandemic years, the Company began to record an increase in operating expenses, while the impact of inflation on their amount should also be taken into account. The Company's total operating expenses in the first half of 2022 were thus HRK +842 thousand (+12.6%) higher than in the first half of 2021 and amounted to HRK 7.504 thousand (1H 2021: HRK 6.662 thousand). All items of operating expenses are higher in the first half of 2022 compared to the same period last year:

  • material costs amount to HRK 2,152 thousand, which is an increase of HRK +376 thousand or +21.2% (1H 2021: HRK 1,776 thousand),
  • staff costs amount to HRK 3,753 thousand, which is an increase of HRK +251 thousand or +7.2% (1H 2021: HRK 3,502 thousand),
  • other costs amount to HRK 878 thousand, which is an increase of HRK +93 thousand or +11.9% (1H 2021: HRK 785 thousand),
  • depreciation amounts to HRK 643 thousand, which is an increase of HRK +91 thousand or +16.4% (1H 2021: HRK 552 thousand),
  • other operating expenses amount to HRK 28 thousand, which is an increase of HRK +23 thousand (1H 2021: HRK 5 thousand),

  • value adjustment amounts to HRK 50 thousand, which is an increase of HRK +8 thousand or +19.4% (1H 2021: HRK 42 thousand).

In the second quarter of 2022 alone, operating expenses amount to HRK 4,086 thousand, which is an increase of HRK +381 thousand or +10.3% compared to the same period last year (2Q 2021: HRK 3,705 thousand). The biggest increase was recorded in material costs, which amounted to HRK 883 thousand in the second quarter of 2021, and HRK 1,252 thousand in the same period of the current year (HRK +369 thousand or +41.8%). In addition to them, depreciation increased from HRK 283 to HRK 326 thousand (HRK +42 thousand or +15.2%), and value adjustment from HRK 42 to HRK 50 thousand (HRK +8 thousand or +19.4%). A decrease was recorded in staff costs (HRK -23 thousand or -1.2%, i.e., from HRK 1,982 to HRK 1,959 thousand), other costs (HRK -12 thousand or -2.4%, i.e., from HRK 512 to HRK 500 thousand), and other operating expenses that were almost annulled (HRK -3 thousand or -99%).

000 HRK 1H 2021 1H 2022 change 2Q 2021 2Q 2022 change
Number of shares 4.636 2.318 -50,00% 4.636 2.318 -50,00%
Share capital 46.357 23.179 -50,00% 46.357 23.179 -50,00%
Capital and reserves 43.420 43.448 0,06% 43.420 43.448 0,06%
Total assets 51.458 50.680 -1,51% 51.458 50.680 -1,51%
Operating income 6.928 7.511 8,41% 3.594 3.591 -0,10%
sales revenue 4.769 5.197 8,98% 2.397 2.348 -2,07%
other operating income 2.159 2.314 7,17% 1.197 1.243 3,84%
Operating expenses 6.662 7.504 12,63% 3.705 4.087 10,30%
material costs 1.776 2.152 21,15% 883 1.252 41,76%
staff costs 3.502 3.753 7,16% 1.982 1.959 -1,16%
depreciation 552 643 16,44% 283 326 15,17%
other costs 832 956 14,97% 557 550 -1,31%
EBIT 266 7 -97,22% -111 -496 347,37%
EBITDA 818 650 -20,54% 172 -170 -198,85%
Financial income 958 372 -61,11% 890 326 -63,34%
Financial expenses 258 678 162,57% 26 397 1403,05%
Pre-tax profit or loss 966 -298 -130,88% 753 -567 -175,31%
Income tax 0 0 0 0
Profit or loss for the period 966 -298 -130,88% 753 -567 -175,31%
Other comprehensive income 0 419 0 419
Total comprehensive income 966 121 -87,52% 753 -148 -119,70%
Number of employees 24 25 4,17% 24 25 4,17%

The Company's key business indicators

The Company's operating profit in the first half of 2022 amounted to HRK 7 thousand, while in the same period last year it amounted to HRK 266 thousand (HRK -259 thousand or -97.2%). At the level of the second quarter, the Company reports an operating loss in the amount of HRK -496 thousand, while the operating loss in the same period last year amounted to HRK -111 thousand. Financial income recorded a significant decrease in the first half of the year as well as in the second quarter compared to the same periods last year. In the first half of 2022, financial income amounted to HRK 372 thousand (HRK -585 thousand or -61.1%), while financial income in the second quarter accounted for HRK 326 thousand (HRK -564 thousand or -63.3%). In the first half of this year, financial expenses amount to HRK 678 thousand (HRK +420 thousand or +162.6%), while in the second quarter alone they are higher by HRK +371 thousand and amount to HRK 397 thousand. Changes in the movement of financial income and expenses are primarily the result of the negative yield of bond funds in which the Company has invested free funds.

Given the above, the Company's net loss in the first half of 2022 amounted to HRK -299 thousand, which is HRK -1.264 thousand (-131%) less than in the same period last year when the Company's net profit amounted to HRK 966 thousand. In the second quarter of 2022, the Company's net loss amounts to HRK -567 thousand, which is HRK -1,320 thousand less than the HRK 753 thousand net profit of the same period last year.

Operating profit before interest, taxes, depreciation and amortization in the first half of 2022 is positive and amounts to HRK 650 thousand, i.e., HRK -168 thousand less than in the first half of 2021, while in the second quarter of 2022 it is negative and amounts to HRK -170 thousand, i.e., HRK -342 thousand less than in the same period last year when it amounted to HRK 172 thousand.

2 DECLARATION OF RESPONSIBILITY FOR THE PREPARATION OF FINANCIAL STATEMENTS

Financial statements of the Zagreb Stock Exchange, Inc. prepared for the period between 1/1/2022 and 30/6/2022 give a fair and true account of facts in accordance with the International Standards of Financial Reporting and the Croatian Accounting Act.

Unconsolidated financial statements for the period between 1/1/2022 and 30/6/2022 give an objective, complete and true statement of assets and liabilities, financial position and operations of the Company.

The management report for the first half of 2022 contains a true and fair view of the development and results of operations, with a description of the principal risks and uncertainties to which the Company is exposed.

Unconsolidated financial statements for the first half of 2022 have not been audited.

Contact Zagreb Stock Exchange, Inc. Ivana Lučića 2a/22 10000 Zagreb Croatia

Phone number: +385/ 1 4686 806 E-mail: [email protected]

Unconsolidated unaudited financial statements of the Company for 1/1/2022 – 30/6/2022

Annex 1 ISSUER'S GENERAL DATA
Reporting period: 1.1.2022 to 30.6.2022
Year: 2022
Quarter: 2
Quarterly financial statements
Registration number (MB):
03749606
Issuer's home HR
Entity's registration
080034217
Member State code:
number (MBS):
Personal identification
84368186611
LEI: 7478000050A040C0D041
number (OIB):
Institution
4
code:
Name of the issuer: Zagreb Stock Exchange, Inc
Postcode and town:
10000
Zagreb
Street and house number: Ivana Lučića 2a/22
E-mail address: [email protected]
Web address: www.zse.hr
Number of employees
2 5
(end of the reporting
Consolidated report:
KN
(KN-not consolidated/KD-consolidated) KN KD
Audited:
RN
(RN-not audited/RD-audited) RN RD
Names of subsidiaries (according to IFRS): Registered office: MB:
Ljubljanska borza vrednostnih papirjev d.d. Ljubljana, Slovenija 5316081
Yes
No
Bookkeeping firm:
Yes
Contact person: Martina Butković
(Yes/No) Sigma Tax Consulting d.o.o.
(name of the bookkeeping firm)
Telephone: 01/4699-555 (only name and surname of the contact person)
E-mail address: [email protected]
Audit firm:
(name of the audit firm)
BALANCE SHEET
balance as at 30.6.2022
Submitter: Zagreb Stock Exchange, Inc in HRK
Item ADP
code
Last day of
the preceding
business
year
At the
reporting
date of the
current
period
1 2 3 4
ASSETS
FIXED ASSETS 002+003+009+012
I INTANGIBLE ASSETS
1
2
26.669.627
918.751
30.045.237
863.504
II TANGIBLE ASSETS 004+…+008 3 4.202.560 3.921.177
1 Land and buildings 4 2.837.671 2.509.406
2 Computer equipment 5 742.389 662.921
3 Other tangible assets 6 179.851 156.913
4 Leasehold improvements 7 442.649 591.937
5 Assets under construction 8 0 0
III FIXED FINANCIAL ASSETS 010+011 9 21.548.316 25.260.556
1 Investments in associates, subsidiaries and joint ventures 10 19.400.367 19.400.367
2 Financial assets at amortised cost
DEFERRED TAX ASSETS
11
12
2.147.949
0
5.860.189
0
B CURRENT ASSETS 014+020+024 13 24.681.493 19.637.206
I RECEIVABLES 015++019 14 2.334.007 2.475.560
1 Trade receivables 15 1.722.654 1.524.304
2 Receivables from employees and members of the undertaking 16 524 7.613
3 Receivables from government and other institutions 17 8.284 161.242
4 Receivables from connected undertakings 18 5.638 177.776
5 Other receivables 19 596.907 604.625
III SHORT-TERM FINANCIAL ASSETS 021+…+023 20 18.985.735 14.903.291
1 Financial assets at amortised cost 21 4.506.448 4.500.296
2 Financial assets at fair value through other comprehensive 22 0 0
3 Financial assets at fair value through statement of profit or
III CASH AND CASH EQUIVALENTS
23
24
14.479.287
3.361.751
10.402.995
2.258.355
C PREPAID EXPENSES AND ACCRUED INCOME 25 70.962 997.216
D TOTAL ASSETS 001+013+025 26 51.422.082 50.679.659
E OFF-BALANCE SHEET ITEMS 27 0 0
LIABILITIES
A CAPITAL AND RESERVES 029+030+031+036+037+038
28 43.327.531 43.448.070
I INITIAL CAPITAL 29 46.357.000 23.178.500
II CAPITAL RESERVES 30 13.860.181 13.860.181
III PROFIT RESERVES 032++035 31 141.000 6.707.541
1 Legal reserves 32 141.000 141.000
2 Reserves for treasury shares 33 0 0
3 Fair value reserves 34 0 418.691
4 Other reserves 35 0 6.147.850
IV RETAINED PROFIT OR LOSS BROUGHT FORWARD 36 -17.903.905 0
V PROFIT OR LOSS FOR THE YEAR
VI MINORITY INTEREST
37
38
873.255
0
-298.152
0
B PROVISIONS 39 0 0
C SHORT-TERM LIABILITIES 041+046 40 2.280.408 1.774.819
1 Liabilities for advance payments 41 119.079 475
2 Trade payables 42 665.933 361.902
3 Liabilities to employees 43 328.099 338.234
4 Taxes, contributions and similar liabilities 44 219.642 395.677
5 Liabilities to connected undertakings 45 2.631 0
6 Other short-term liabilities
D LONG-TERM LIABILITIES
46
47
945.024
2.228.710
678.531
2.338.785
E DEFERRED TAX LIABILITY 48 0 102.832
F ACCRUALS AND DEFERRED INCOME 49 3.585.433 3.015.153
G TOTAL LIABILITIES 028+039+040+047+048+049 50 51.422.082 50.679.659
H OFF-BALANCE SHEET ITEMS 51 0 0
Appendix to the balance sheet (position for consolidated financial statements)
I Capital and reserves 053+054 52 0 0
1 Attributable to owners of the parent 53 0 0
STATEMENT OF PROFIT OR LOSS
For the period 1.1.2022 to 30.6.2022 in HRK
Submitter: Zagreb Stock Exchange, Inc
Item ADP Same period of the previous year Current period
code Cumulative Quarter Cumulative Quarter
1 2 3 4 5 6
A OPERATING INCOME 002+009 1 6.928.164 3.594.223 7.510.969 3.590.625
I Sales revenue 003++008 2 4.768.788 2.397.382 5.196.795 2.347.811
1 Commissions and membership fees 3 1.745.048 905.378 2.134.951 807.813
2 Listing maintenance fees 4 2.541.062 1.272.346 2.533.887 1.273.827
3 Income from quotation maintenance 5 482.678 219.658 527.957 266.171
4 Income from auctions 6 0 0 0 0
5 Income from memberships 7 0 0 0 0
6 Revenue from assigning and administering LEIs 8 0 0 0 0
II Other operating income 010++012 9 2.159.376 1.196.841 2.314.174 1.242.814
1 Income from application programming interface (API) services 10
11
0
1.296.078
0
729.562
0
1.228.074
0
615.938
2 Income from the supply of information
3 Other income
12 863.298 467.279 1.086.100 626.876
B OPERATING EXPENSES 014+017+021+022+023+026+027 13 6.662.009 3.705.069 7.503.579 4.086.522
I Material costs 015+016 14 1.776.092 883.293 2.151.741 1.252.183
1 Costs of raw materials 15 209.974 99.393 221.810 122.838
2 Other external costs 16 1.566.118 783.900 1.929.931 1.129.345
II Staff costs 018++020 17 3.502.122 1.981.775 3.752.768 1.958.719
1 Net salaries and wages 18 1.994.386 1.118.436 2.150.771 1.117.292
2 Tax and contributions from salary costs 19 1.029.658 591.624 1.089.454 572.857
3 Payroll contributions 20 478.078 271.715 512.543 268.570
III Depreciation 21 551.964 282.903 642.691 325.818
IV Other costs 22 784.858 512.229 877.961 499.766
V Value adjustment 024+025 23 41.873 41.873 50.000 50.000
1 fixed assets (other than financial assets) 24 0 0 0 0
2 current assets (other than financial assets) 25 41.873 41.873 50.000 50.000
VI Provisions 26 0 0 0 0
VII Other operating expenses 27 5.100 2.996 28.418 36
C FINANCIAL INCOME 029++034 28 957.649 890.156 372.382 326.310
1 Interest, exchange rate differences, dividends and similar 29 957.313 957.313 319.095 318.931
2 Interest, exchange rate differences, dividends and similar 30 -4.948 -70.094 50.905 5.869
3 Income share from associates and participating interests 31 0 0 0 0
4 Unrealised gains (income) from financial assets 32 0 0 0 0
5 Profit from reversal of provisions for impairment for expected 33 0 0 0 0
6 Other financial income 34 5.284 2.937 2.382 1.510
D FINANCIAL EXPENSES 036++040 35 258.190 26.441 677.924 397.422
1 Interest, exchange rate differences and other expenditures with 36
37
147
0
142
0
170
105.601
167
69.039
2 Interest, exchange rate differences and other expenditure from
3 Unrealised losses (expenses) from financial assets
38 258.880 27.136 572.153 328.216
4 Loss on impairment for expected credit losses 39 0 0 0 0
5 Other financial expenses 40 -837 -837 0 0
E TOTAL INCOME 001+028 41 7.885.813 4.484.379 7.883.351 3.916.935
F TOTAL EXPENDITURE 013+035 42 6.920.199 3.731.510 8.181.503 4.483.944
G Share in profit/loss of associates and subsidiaries 43 0 0 0 0
H PRE-TAX PROFIT OR LOSS 041-042+043 44 965.614 752.869 -298.152 -567.009
I INCOME TAX 45 0 0 0 0
J PROFIT OR LOSS FOR THE PERIOD 044-045 46 965.614 752.869 -298.152 -567.009
1 Change in revaluation reserves (property, plant, 47 0 0 0 0
2 Actuarial gains/losses on defined benefit pension plans 48 0 0 0 0
3 Unrealised gains/losses on financial assets at fair value
through other comprehensive income
49 0 0 0 0
4 Gains/losses on hedging instruments in a cash flow hedge 50 0 0 521.523 521.523
5 Gains/losses arising from translation of financial 51 0 0 0 0
6 Income tax on other comprehensive income 52 0 0 102.832 102.832
K OTHER COMPREHENSIVE INCOME 047+…+052 53 0 0 418.691 418.691
TOTAL COMPREHENSIVE INCOME 046+053 54 965.614 752.869 120.539 -148.318
M RECLASSIFICATION ADJUSTMENTS 55 0 0 0 0
Appendix ** 56 0 0 0 0
Attributable to owners of the parent
Attributable to non-controlling interest
57 0 0 0 0
17
for the period 1.1.2022 to 30.6.2022
in HRK
Submitter: Zagreb Stock Exchange, Inc
Item ADP
code
Same period of
the previous
year
Current period
1 2 3 4
CASH FLOW FROM OPERATING ACTIVITIES
1 Pre-tax profit 1 965.614 -298.152
2 Depreciation 2 551.964 642.691
3 Increase in short-term liabilities 3 1.379.037 0
4 Decrease in short-term receivables 4 0 0
5 Decrease in inventories 5 0 0
6 Loss on impairment for expected credit losses 6 0 0
7 Other cash flow increase 7 32.194 52.027
I Total cash flow increase from operating activities
001++007
8 2.928.809 396.566
1 Decrease in short-term liabilities 9 0 239.097
2 Increase in short-term receivables 10 551.200 191.553
3 Increase in inventories 11 0 0
4 Profit from reversal of provisions for impairment for expected 12 0 0
5 Other cash flow decrease 13 0 1.252.417
II Total cash flow decrease from operating activities
009++013
14 551.200 1.683.067
CASH FLOW FROM INVESTMENT ACTIVITIES
1 Cash receipts from sale of fixed tangible and intangible assets 15 0 0
2 Cash receipts the from sale of equity instruments and debt 16 0 0
3 Interest received 17 0 115
4 Dividends received 18 6.508 318.920
5 Other cash receipts from investment activities 19 507.982 3.505.000
III Total cash receipts from investment activities 015++019 20 514.490 3.824.035
1 Cash payments for the purchase of fixed tangible and intangible 21 278.636 67.915
2 Cash payments for the acquisition of equity financial 22 0 3.190.716
3 Other cash payments from investment activities 23 0 0
IV Total cash payments from investment activities
021++023
24 278.636 3.258.631
CASH FLOW FROM FINANCING ACTIVITIES
1 Cash receipts from the issue of equity financial instruments and
debt financial instruments
25 0 0
2 Cash receipts from credit principals, debentures, loans and
other borrowings
26 0 0
3 Other cash receipts from financing activities 27 0 0
V Total cash receipts from financing activities 025++027 28 0 0
1 Cash payments for credit principals and bonds 29 0 0
2 Cash payments for dividends 30 0 0
3 Cash payments for finance lease 31 0 0
4 Cash payments for the redemption of treasury shares 32 0 0
5 Other cash payments from financing activities 33 753.330 382.299
VI Total cash payments from operating activities 029++033 34 753.330 382.299
VII Cash and cash equivalents at the beginning of period 35 1.638.068 3.361.751
VIII Increase of cash and cash equivalents 36 1.860.133 0
IX Decrease of cash and cash equivalents 37 0 1.103.396
X Cash and cash equivalents at the end of period 38 3.498.201 2.258.355
18

STATEMENT OF CASH FLOWS - indirect method

STATEMENT
CHANGES
EQUITY
OF
IN
for the period from 1.1.2022 to 30.6.2022 in HRK
Attributable to owners of the
parent
Item ADP Subscribed
capital
Capital
reserves
Profit
reserves
Profit
or loss
for
the
year
(period)
Retained
profit
or loss
brought
forward
Fair
value
reserves
Other
revaluation
reserves
Attributable
to
non-controlling
interests
Total
capital
and
reserves
1 2 3 4 5 6 7 8 9 10 11
first
of
previous
Balance
on the
day
the
business
year
1 46.357.000 13.860.181 141.000 1.874.402 -19.778.307 0 0 0 42.454.276
Change
in
accounting
policies
2 0 0 0 0 0 0 0 0 0
Correction
of
errors from
prior
periods
3 0 0 0 0 0 0 0 0 0
Balance
on the
first
day
of
the
previous
business
year (restated)
4 46.357.000 13.860.181 141.000 1.874.402 -19.778.307 0 0 0 42.454.276
Profit
or loss
for
the
period
5 0 0 0 873.255 0 0 0 0 873.255
Unrealised
gains
or losses
on financial
assets at
fair
value
through
other
comprehensive
income
6 0 0 0 0 0 0 0 0 0
Other
changes
in
equity
unrelated
to owners
7 0 0 0 0 0 0 0 0 0
Total
directly
recognized
income
and
expenses of
the
previous
year (previous
year periods)
8 0 0 0 873.255 0 0 0 0 873.255
Increase/decrease
in
subscribed
capital
9 0 0 0 0 0 0 0 0 0
Other
contributions
by
owners
10 0 0 0 0 0 0 0 0 0
Payment
of
share
in
profit/dividend
11 0 0 0 0 0 0 0 0 0
Other
distribution
to owners
12 0 0 0 -1.874.402 1.874.402 0 0 0 0
Balance
on the
last
day
of
the
previous
business
year reporting
period
13 46.357.000 13.860.181 141.000 873.255 -17.903.905 0 0 0 43.327.531
Balance
on the
first
day
of
the
current
business
year
14 46.357.000 13.860.181 141.000 873.255 -17.903.905 0 0 0 43.327.531
Change
in
accounting
policies
15 0 0 0 0 0 0 0 0 0
Correction
of
errors from
prior
periods
16 0 0 0 0 0 0 0 0 0
first
of
Balance
on the
day
the
current
year (restated)
business
17 46.357.000 13.860.181 141.000 873.255 -17.903.905 0 0 0 43.327.531
Profit
or loss
for
the
period
18 0 0 0 -298.152 0 0 0 0 -298.152
on financial
Unrealised
gains
or losses
assets at
fair
value
through
other
comprehensive
income
19 0 0 0 0 0 418.691 0 0 418.691
Other
changes
in
equity
unrelated
to owners
20 0 0 0 0 0 0 0 0 0
Total
directly
recognised
income
and
expenses of
the
current year (current
period)
21 0 0 0 -298.152 0 418.691 0 0 120.539
Increase/decrease
in
subscribed
capital
22 -23.178.500 0 6.147.850 0 17.030.650 0 0 0 0
Other
contributions
by
owners
23 0 0 0 0 0 0 0 0 0
profit/dividend
Payment
of
share
in
24 0 0 0 0 0 0 0 0 0
Other
distribution
to owners
25 0 0 0 -873.255 873.255 0 0 0 0
Balance
on the
last
day
of
the
current
business
year reporting
period
26 23.178.500 13.860.181 6.288.850 -298.152 0 418.691 0 0 43.448.070

19

NOTES TO THE FINANCIAL STATEMENTS – TFI (drawn up for quarterly reporting periods) Name of issuer: Zagrebačka burza d.d. Personal identification number (OIB): 84368186611

Reporting period: 1.1.2022 - 30.6.2022 Sort of report: Separate

1. Reporting entity

Zagrebačka burza d.d. ("the Company") is a joint stock company domiciled in Republic of Croatia and was registered at the Commercial Court in Zagreb on 5 July 1991 under the number (MBS) 0800034217. The personal identification number of the Company (OIB) is 84368186611. The address of the Company's registered office is Eurotower, 22nd floor, Ivana Lučića 2a/22, Zagreb, Croatia.

2. Basis of preparation and significant accounting policies

Basis for preparation

Financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS). Financial statements are prepared on a historical cost basis, except for financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income which are measured at fair value.

Detailed information on the basis of preparation of the financial statements are provided in the Note No.2 to the separate financial statements presented in the Annual Report on Company Status and Business Activities in 2021 available on the internet page www.zse.hr (further: Annual Report of the Company).

Significant accounting policies

The interim financial statements for the reporting quarter are prepared applying the same accounting policies as in the latest separate annual financial statements presented in the Annual Report on Company Status and Business Activities in 2021 available on the internet page www.zse.hr.

Information required by IFRSs that are not presented elsewhere in the separate statement of financial position, separate statement of comprehensive income, separate statement of cash flows and separate statement of changes in equity are disclosed in Unconsolidated unaudited financial result for period 1.1. to 30.6.2022 (further: Unconsolidated result for the second quarter) as published on the internet page www.zse.hr.

3. Financial commitments, guarantees or contingencies that are not included in the balance sheet, and an indication of the nature and form of any valuable security which has been provided

The Company does not have financial commitments, guarantees or contingencies that are not included in the balance sheet as at 30 June 2022 nor has issued securities.

4. Amount and nature of individual items of income or expenditure which are of exceptional size or incidence

Details on the income or expenditure which are of exceptional size or incidence are presented in the Notes to the non-consolidated financial statements in Note 1.12 presented in the Unconsolidated result for the second quarter (www.zse.hr).

Besides the above-mentioned notes, we are describing the differences in classification between incomes and expenditures as presented in the audited separate financial statements and Notes to the separate financial statements as presented in Annual Report of the Company and incomes and expenditures presented in this TFI form:

(a) income from assigning and administering LEIs is, in accordance with the Company's accounting policies, reported in other income (AOP 12) in the amount of HRK 171 thousand

(b) other differences between the information presented in the financial statements in TFI form compared to the classification of the information in the audited financial statements are presented in the Attachment to this notes.

5. Liabilities falling due after more than five years, as well as the debts covered by valuable security

At the balance sheet date, the Company does not have liabilities falling due after more than five years.

At the balance sheet date, the Company does not have debts covered by valuable securities.

6. Average number of employees during the reporting period

The average number of the employees during the reporting period of 2022 is 25.

7. Capitalized costs of the salaries during the financial year

The Company did not capitalize the cost of salaries in the financial year.

8. Deferred taxes

The provision for deferred taxes, amount of the deferred taxes at the beginning and at the end of the reporting period and movement during the reporting period is as follows:

1.1.2022 Increase Decrease 30.6.2022
kn'000 kn'000 kn'000 kn'000
Deferred tax assets - - - -
Deferred tax liabilities - 103 - (103)
- 103 - (103)

9. Name and registered office of each of the companies in which the issuer, either itself or through a person acting in their own name but on the issuer's behalf, holds a participating interest, showing the amount of capital held, the amount of total capital and reserves, and profit or loss

The investments in the controlled companies, joint ventures and holdings of a participating interest are presented in the Notes 13 and 14 to the separate financial statements presented in the Annual Report of the Company for 2021. During the reporting period there were no significant changes in information presented in the Annual Report of the Company for 2021.

10. Number and the nominal value of shares subscribed during the financial year within the limits of the authorised capital

There were no shares subscribed during the financial year within the limits of the authorised capital.

Based on the Decision of the Company's Assembly dated June 14, 2022, the share capital of the Company is reduced in a regular procedure for the purpose of transferring HRK 23,178,500.00 to other reserves of the Company. By undertaking the share capital reduction, the nominal value per share is reduced to the amount which is lower than the minimum nominal amount permitted under Article 163(2) of the Companies Act. Hence, the share capital is reduced in a regular procedure through a consolidation of shares (reverse split), in accordance with Article 342(4) of the Companies Act. The shares are consolidated at a ratio of 2:1 by issuing to each shareholder 1 registered share with a nominal value of HRK 10.00 for 2 shares outstanding.

The company used other reserves to cover losses from previous periods in the amount of HRK 17,030,651.07, after which the amount of HRK 6,147,848.93 remained in the company's other reserves.

11. Existence of any participation certificates, convertible debentures, warrants, options or similar securities or rights, with an indication of their number and the rights they give

The Company has no participation certificates, convertible debentures, warrants, options or similar securities or rights.

12. Name, registered office and legal form of each of the companies of which the issuer is a member having unlimited liability

The Company has no shares in companies having unlimited liability.

13. Name and registered office of the company which draws up quarterly consolidated financial statements of the largest group of companies of which the issuer forms part as a controlled group member

The Company is the final parent company and is not a controlled member of any group.

The Company prepares the consolidated financial statements for the second quarter of 2022 that are available for use on the internet page www.zse.hr.

14. Name and registered office of the company which draws up quarterly consolidated financial statements of the smallest group of companies of which the issuer forms part as a controlled group member and which is also included in the group of companies referred to in point 13.

The Company is the final parent company and is not a controlled member of any group.

15. Place where copies of the consolidated financial statements referred to in points 13 and 14 may be obtained

The Company prepares the consolidated financial statements that are available for use on the internet page www.zse.hr.

16. Nature and business purpose of the company's arrangements that are not included in the balance sheet and the financial impact on the company of those arrangements, provided that the risks or rewards of such arrangements are material and to the extent that disclosure of such risks or rewards is necessary to assess the issuer's financial condition

The Company has no arrangement that are not included in the presented unconsolidated financial statements for the reporting period ended on 30 June 2022.

17. Nature and the financial effect of significant events arising after the balance sheet date which are not reflected in the profit and loss account or balance sheet

Significant events arising after the balance sheet date are presented in the Note 1.11 to the Unconsolidated result for the second quarter of 2022, as published on the internet page www.zse.hr

Attachment: Reconciliation of the classification of the items of the financial statements in TFI form in comparison to the classification used in preparation of the audited financial statements for the year 2021:

P&L item (IFRS) Amount
HRK'000
P&L item (GFI) Amount
HRK'000
Staff costs 3.906 Staff costs 3.753
Reclassification from other costs 153
Other operating costs 2.955 Costs of raw materials 222
Other external costs 1.930
Value adjustment 50
Other costs 878
Other operating expenses 28
Reclassification to staff costs -153
Rounding 0
Balance sheet item (IFRS) Amount
HRK'000
Balance sheet item (GFI) Amount
HRK'000
Property and equipment 1.039 Land and buildings 2.509
Assets with right of use 2.882 Computer equipment 663
Other tangible assets 157
Leasehold improvements 592
Assets under construction -
Rounding 0
Financial assets at fair value through other comprehensive income 5.393 Financial assets at amortised cost (long term) 5.860
Long term deposits 250
Loans receivable from associate 217
Trade receivables and other assets 2.469 Receivables (short term) 2.476
Inventories 6 Rounding -1
Trade and other payables (short term) 1.342 Trade payables 362
Short term financial liabilities 432 Liabilities to employees 338
Advance payments received -
Taxes, contributions and similar liabilities 396
Other short-term liabilities 679
Rounding -1
Contractual liabilities 3.013 Accruals and deferred income 3.015
Rounding -2

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