Tatry Mountain Resorts A.S.

Tatry mountain resorts, a.s. 315700YHD1JR6VB1BA90 2021-11-01 2022-10-31 315700YHD1JR6VB1BA90 2022-11-01 2023-10-31 315700YHD1JR6VB1BA90 2022-10-31 315700YHD1JR6VB1BA90 2023-10-31 315700YHD1JR6VB1BA90 2021-10-31 315700YHD1JR6VB1BA90 2021-11-01 2022-10-31 ifrs-full:NoncontrollingInterestsMember 315700YHD1JR6VB1BA90 2021-11-01 2022-10-31 ifrs-full:EquityAttributableToOwnersOfParentMember 315700YHD1JR6VB1BA90 2021-11-01 2022-10-31 ifrs-full:RetainedEarningsMember 315700YHD1JR6VB1BA90 2021-11-01 2022-10-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 315700YHD1JR6VB1BA90 2021-11-01 2022-10-31 ifrs-full:ReserveOfCashFlowHedgesMember 315700YHD1JR6VB1BA90 2021-11-01 2022-10-31 ifrs-full:RevaluationSurplusMember 315700YHD1JR6VB1BA90 2021-11-01 2022-10-31 tmr:LegalReserveFundMember 315700YHD1JR6VB1BA90 2021-11-01 2022-10-31 ifrs-full:SharePremiumMember 315700YHD1JR6VB1BA90 2021-11-01 2022-10-31 ifrs-full:IssuedCapitalMember 315700YHD1JR6VB1BA90 2022-11-01 2023-10-31 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315700YHD1JR6VB1BA90 2021-10-31 ifrs-full:ReserveOfCashFlowHedgesMember 315700YHD1JR6VB1BA90 2021-10-31 ifrs-full:RevaluationSurplusMember 315700YHD1JR6VB1BA90 2021-10-31 tmr:LegalReserveFundMember 315700YHD1JR6VB1BA90 2021-10-31 ifrs-full:SharePremiumMember 315700YHD1JR6VB1BA90 2021-10-31 ifrs-full:IssuedCapitalMember 315700YHD1JR6VB1BA90 2022-10-31 ifrs-full:IssuedCapitalMember 315700YHD1JR6VB1BA90 2022-10-31 ifrs-full:SharePremiumMember 315700YHD1JR6VB1BA90 2022-10-31 tmr:LegalReserveFundMember 315700YHD1JR6VB1BA90 2022-10-31 ifrs-full:RevaluationSurplusMember 315700YHD1JR6VB1BA90 2022-10-31 ifrs-full:ReserveOfCashFlowHedgesMember 315700YHD1JR6VB1BA90 2022-10-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 315700YHD1JR6VB1BA90 2022-10-31 ifrs-full:RetainedEarningsMember 315700YHD1JR6VB1BA90 2022-10-31 ifrs-full:EquityAttributableToOwnersOfParentMember 315700YHD1JR6VB1BA90 2022-10-31 ifrs-full:NoncontrollingInterestsMember 315700YHD1JR6VB1BA90 2023-10-31 ifrs-full:IssuedCapitalMember 315700YHD1JR6VB1BA90 2023-10-31 ifrs-full:SharePremiumMember 315700YHD1JR6VB1BA90 2023-10-31 tmr:LegalReserveFundMember 315700YHD1JR6VB1BA90 2023-10-31 ifrs-full:RevaluationSurplusMember 315700YHD1JR6VB1BA90 2023-10-31 ifrs-full:ReserveOfCashFlowHedgesMember 315700YHD1JR6VB1BA90 2023-10-31 ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember 315700YHD1JR6VB1BA90 2023-10-31 ifrs-full:RetainedEarningsMember 315700YHD1JR6VB1BA90 2023-10-31 ifrs-full:EquityAttributableToOwnersOfParentMember 315700YHD1JR6VB1BA90 2023-10-31 ifrs-full:NoncontrollingInterestsMember iso4217:EUR xbrli:shares iso4217:EUR xbrli:shares Annual Report 2022/23 Tatry mountain resorts, a. s. and its Subsidiaries as of October 31, 2023 2 Content Commentary from Chairman of the Board of Directors 4 Operations Review 6 Consolidated Financial Highlights 8 Our History 10 Company Proﬁle 12 Strategy 22 Key Performance Indicators (KPIs) 28 Market Analysis and Trends 30 Risk Factors and Risk Management 36 Financial Performance Review for the Year 44 Key Results 46 Financial performance 47 Results by Segments 47 Key Performance Indicators (KPIs) 48 Financial Operating Results 50 Group’s Position at the End of the Year 52 Financial Position 54 Outlook 55 Other ﬁnancial information 56 Corporate Social Responsibility 58 Environment and Community 60 Human Resources 62 Projects 63 Reporting of Information in accordance with EU Taxonomy 64 Corporate Governance 74 Corporate Governance Principles 76 Board of Directors 76 Supervisory Board 77 General Meeting 80 Supervisory Board Report 82 The Company‘s Corporate Governance Code 82 Other Supplementary Data 86 Contracts with External Advisors and Related Parties 88 Proposal on Distribution of Proﬁt 89 Shares 90 Consolidated Financial Statements 94 Separate Financial Statements 186 Remuneration Report 272 Statement by the Board of Directors 276 Commentary from Chairman of the Board of Directors Igor Rattaj Dear shareholders, we have completed a successful and challenging year. We faced not only economic challenges in the form of rising consumer prices for goods and services, labor cost increases, and increase in interest rate, but also the impact of unpredictable weather that affected the winter season in locations outside of Slovakia. Despite these mentioned negative external inﬂuences, we achieved record numbers that reﬂect not only our resilience to challenges but also our ability to react quickly and effectively to changing circumstances. We effectively utilized our long- term expertise in price management through dynamic pricing, introducing new products, leveraging synergies within our resorts, and utilizing the Gopass program. As a result, consolidated revenues increased by 43% to EUR 188.4 million, and the Group‘s operating proﬁt before depreciation, interest, and taxes (EBITDA) reached EUR 59.4 million, a 76% increase compared to the previous ﬁscal year. After accounting for higher operating costs, interest expenses, depreciation, impairment of ﬁxed assets, and tax expenses, we reported a net consolidated loss of EUR 0.5 million. Despite this loss, we managed to maintain the group‘s cash ﬂow at a stable level, with timely fulﬁllment of all obligations to our creditors and partners. The winter season was successful in our mountain resorts in Slovakia, with higher altitude and a quality artiﬁcial snow system being a key factor. We have introduced a new cable car, Biela Púť-Priehyba, which signiﬁcantly improved transportation connectivity in Jasna and enhanced the product quality for both skiers and pedestrians. Despite challenging years affected by the pandemic, we experienced increase in number of visitors, especially from foreign clients from Poland, Hungary, Romania, and Baltic countries in Jasna and High Tatras. The use of dynamic pricing tools, actively managed, enabled us to achieve growth in average customer spending in all our resorts and main segments. Our resorts in Poland, Czech Republic, and Austria in the winter season did not reach the overall expected revenue and visit rate, mainly due to unfavorable weather during the main part of the winter season. Our water parks in Bešeňová and Tatralandia experienced a successful not only winter but also summer season, setting a record attendance of over 1.3 million visitors, representing an increase of over 47% compared to the previous ﬁscal year. Although the Legendia amusement park saw 13% fewer guests compared to the previous year, the overall attendance in the amusement park segment, including water parks, increased by almost 26%. Hotels in the TMR portfolio had a signiﬁcant impact on results with a 48.4% growth in revenues. A novelty of the past season was stays in TMR hotels with ski passes and aquaparks included in the room rates, resulting in an increase in the average room rate and higher hotel occupancy. This innovation represents a product innovation welcomed by our customers, providing them with additional beneﬁts and a better customer experience. Throughout the year, we traditionally organized our popular events. The most visited Tatra attraction was again the Tatra Ice Dome in Hrebienok, resembling a unique sacred building – the Basilica of the Holy Sepulcher in Jerusalem. In addition to various events, we prepared many novelties and advantageous offers for our customers, delivered through our Gopass customer program and updated Gopass mobile application, which brought new functionalities and an improved customer experience. Last year, we invested EUR 22.7 million, primarily directed towards Slovak resorts, including the construction project of the Jasná Central Resort Hotel. Other signiﬁcant investments included the completion and operation of the Biela Púť-Priehyba cable car, the reconstruction of wellness facilities in Grandhotel Starý Smokovec, and the refurbishment of apartments in Bešeňová. Investments also went into our foreign resorts in Poland, Czech Republic, and Austria. We are aware of our position and role in sustainable business practices. We are developing and implementing processes in the ESG (Environmental, Social, Governance) initiatives and regulations. The goal is to create a management system, set goals, and implement investments with an emphasis on achieving sustainability. In the coming period, we aim to continue improving the quality of services provided at our resorts and strengthen their competitiveness with product innovations. We will also focus on strategic investments to maintain an adequate length of the winter season, the quality of the main skiing product, and mitigate the impacts of changing weather conditions. We want to continue digitizing and innovating a signiﬁcant part of our business. A signiﬁcant upcoming project is the Gopass Property Fund, aiming to enable investments in premium properties managed and utilized by the TMR Group, which is a prerequisite for an attractive portfolio investment and interesting yield. Igor Rattaj Chairman of the Board of Directors and CEO of the TMR Group OPERATIONS REVIEW 8 in €'000 unless speciﬁed otherwise 2022/23 2021/22 2020/21 2019/20 2018/19 Revenues 188 379 132 119 64 697 111 197 127 592 EBITDA 59 366 33 696 7 000 35 137 35 496 EBIT 23 357 11 630 -23 831 7 387 12 723 Net Income / loss -548 -11 947 -45 876 -20 513 -2 288 CAPEX 22 655 23 616 10 555 14 452 45 254 No. of employees 1 456 1 359 1 193 1 332 1 456 Earnings per share (EUR) -0,074 -1,694 -6,816 -3,013 -0,341 Hotel Occupancy (%) 59,4 54,5 37,4 49,4 66,3 Avg. Daily Rate per Room (EUR) 112,2 107,1 84,7 99,7 88,0 Visit Rate Mountain Resorts ('000) 2 928 2 660 1 163 2 425 2 840 Visit Rate Leisure Parks ('000) 1 780 1 416 483 655 808 EBITDA (%) 31,5 25,5 10,8 31,6 27,8 EBIT (%) 12,4 8,7 -36,8 6,6 10,0 Equity 31 896 33 007 45 123 91 886 110 173 Debt/Equity (%) 1 188,7 1 178,6 816,5 366,8 315,3 Debt/Capital (%) 92,2 92,2 89,1 78,6 75,9 Debt/EBITDA 6,4 11,5 52,6 9,6 9,8 Total Assets 579 634 574 667 556 761 561 927 533 858 Consolidated Financial Highlights Revenues vs. CAPEX Revenues Capex thousands Revenues EBITDA EBITDA Margin Key Operating Results thousands 0% 10% 20% 30% 40% 50% 60% 70% 80% 0 € 20 000 € 40 000 € 60 000 € 80 000 € 100 000 € 120 000 € 140 000 € 160 000 € 180 000 € 200 000 € 2018/19 2019/20 2020/21 2021/22 2022/23 0 € 20 000 € 40 000 € 60 000 € 80 000 € 100 000 € 120 000 € 140 000 € 160 000 € 180 000 € 200 000 € 2018/19 2019/20 2020/21 2021/22 2022/23 9 * as of 31/10/2023 TMR IN NUMBERS 12 resorts Group Revenues 188.4 mil. € Group EBITDA 59.4 mil. € Group Net Loss -0.5 mil. € 4.7 mil. guests 1.8 mil. guests 7 mountain resorts 2.9 mil. skier days FTE 1 456 3 leisure parks 2 golf resorts CAPEX 22.655 mil. € +10,1% +25,7% +15,5% +42.6% +76.2% 20 own / managed hotels 112.17 € ADR 59.4 % occupancy +4.7% +4.9 p.p. 10 Our History 1992 Establishment of SKI Jasná, a.s., the legal predecessor of TMR, by the National Property Fund of the Slovak Republic in March 1992 2003 Change of name to Jasná Nízke Tatry, a. s. in March 2003 2009 In June 2009 Shareholders of Jasná Nízke Tatry, a.s. agreed on raising of the capital to EUR 250 million and on renaming the Company Tatry mountain resorts, a.s. Consequently, a new equity issue was listed on the Bratislava Stock Exchange. In October 2009 TMR purchased Tatras Cableways (TLD), which dissolved without liquidation and merged with TMR on May 1, 2010. At the same time TMR, as its successor, continues to conduct TLD’s business activity, especially operation of mountain resorts in the High Tatras - Tatranská Lomnica and Starý Smokovec. In December 2009 TMR acquired 100% of Grandhotel Praha, a.s. (Grandhotel Praha) and 50% of Interhouse Tatry, s.r.o., which was the owner of Grandhotel Starý Smokovec at that time. 2011 In April 2011 TMR acquired Tatralandia Holiday Resort. This trademark comprises Aquapark Tatralandia, a lodging facility Holiday Village Tatralandia, an entertainment park Fun Park, and Tropical Paradise. The acquisition of Tatralandia was an important step for TMR in pursuing the strategy to create an all-year tourist destination. 2012 Dual listing of TMR shares on exchanges in Warsaw and Prague took place in October 2012 In November 2012 TMR through an associated company Melida, a.s. signed a lease contract with the Czech union of physical education for operating SKIAREÁL Špindlerův Mlýn. In November 2012 TMR founded Korona Ziemi with a Polish town of Gmin Zawoja, with the purpose of creating an entertainment- educational park. 2010 I n October 2010 TMR purchased all shares of Tatry mountain resorts services and thus became its 100% owner. TMR initiated cooperation with the resort of Štrbské Pleso in December 2010. 11 2013 On February 16, 2013 TMR acquired the other 50% in Interhouse, s.r.o. (Grandhotel Starý Smokovec). As of May 1, 2013 subsidiaries of TMR - Tatry mountain resorts services, a.s., Grandhotel Praha, a.s. and Interhouse s.r.o. - merged and seized without liquidation. Share capital of TMR was decreased from EUR 221.3 million to EUR 47.0 million on October 22, 2013 based on the approval by the Extraordinary General Meeting held on August 22, 2013. 2017 On November 30, 2017 TMR made an agreement with the Czech town of Liberec to rent the sports center Ještěd for 10 years with the option of another 10 years. TMR ofﬁcially took over the sports and ski resort Ještěd in December 2017, when it also launched its ﬁrst winter season there. 2015 In April 2015 TMR agreed to acquire a 75% share in a Polish entity that owns and since May 2015 is operating Silesian Amusement Park (Śląskie Wesołe Miasteczko). 2014 In March 2014 TMR acquired a 97% share in a Polish ski resort Szczyrkowski Ośrodek Narciarski S.A. (SON). In June 2019 TMR acquired a 100% share in an Austrian company that owns and operates the glacier ski resort Mölltaler Gletscher and its sister resort Ankogel - Mallnitz in Austria. 2018 In November 2018 TMR enters the golf segment and in the Czech Republic enters a contract to lease and operate Golf & Ski Resort Ostravice with a 20-year term. 2019 In January 2019 The Group enters a lease contract of Golf Resort Kaskáda near the Czech town of Brno for a 20-year term. TMR controls the management of the hotel with a conference center and a restaurant. 2021 In May 2021, the Group expanded its portfolio to include Muttereralm Innsbruck resort in the Tyrolean Alps. 2022 In April 2022, the Group expanded its portfolio to include a new water park Bešeňová. 12 10% 10% 10% KD GRUND GmbH 100% Szczyrkowski ošrodek narciarski S.A. Tatry mountain resorts CR, a.s. Muttereralm Bergbahnen Errichtungs GmBH Mölltaler Gletscherbah- nen GmbH & CO KG International TMR services s.r.o. TMR Ještěd a.s. Korona Ziemi Sp. z o.o. TMR Finance CR, a.s. Mölltaler Gletscherbah- nen GmbH GOPASS SE Melida, a.s. Tatry mountain resorts, a.s. Ostravice Hotel a.s. GOPASS SE, organizačná zložka Hotel Alpina s.r.o. TMR Parks, a.s. Tatry mountain resorts AT GmbH Ślaskie Wesole Miasteczko Sp. z o. o. 100% 50% 100% EUROCOM Investment, s.r.o. 100% 100% 97,6% 100% 90% 90% 100 % 100% 73,6% 100% 90% 100% TMR Real Estate, s.r.o. Štrbské Pleso resort, s. r. o. 100 % 100 % 25% 100% 100% 100%KL BASIC OVERVIEW OF TMR Tatry mountain resorts, a.s. with its registered seat in Liptovský Mikuláš, SK together with its subsidiaries (TMR, the Group) is the biggest provider of tourism in Slovakia with emerging activities in neighboring countries. TMR’s revenues come from operation of mountain resorts, an aquapark, and an amusement park, golf resorts, from provision of hotel and dining services, from sports stores and ancillary services in the resorts, and from real estate projects. In terms of revenue breakdown, the largest share comes from sale of ski passes and cableway tickets in the mountain resorts (39.2%) and from accommodation services in the hotels that TMR owns and/or runs (28.4%). Additional revenues come from ticket sale in the leisure parks (12.4%), and from ancillary services provided by the dining facilities on the slopes, in the golf resorts, and in the leisure parks (14.7%) and sports and souvenir stores, rentals, and ski schools (4%). In addition to the mentioned business activities TMR conducts its business activities in real estate, revenues of which are generated mainly from lease of accommodation facilities and sale of apartments (0.8%). A part of revenues also comes from the operation of leased golf resorts (0.6%). TMR runs all its operations in regions of the High and Low Tatras in Slovakia, in the Polish Beskids and Silesia, and in the Czech Krkonoše Mountains, Beskids, and Moravia, and in the Austrian Alps. Since December 2017 TMR rents and operates a Czech ski center Ještěd. As of the end of FY 2020/21 TMR also owns a 25% share in Melida a.s., which since the winter 2012/13 leases and operates the resort Špindlerův Mlýn in the Czech Republic. TMR also rents and operates Czech golf resorts – Golf & Ski Resort Ostravice and Golf Resort Kaskáda. In Poland TMR owns 97.6% in the mountain resort Szczyrk Mountain Resort (Szczyrk); and a 100% share in Legendia - Silesian Amusement Park (Śląskie Wesołe Miasteczko). Since June 2019 the Group also owns the Austrian Alpine resorts of Mölltaler Gletscher and Ankogel – Mallnitz. On May 1, 2021, theGroup expanded its portfolio for another Austrian resort, Muttereralm Innsbruck, in which it owns a 100% stake through Muttereralm Bergbahnen Errichtungs GmbH. As part of the acquisition, the Group expanded its portfolio from April 2022, with the new water park Bešeňová, with which TMR had a long-term business and marketing cooperation. On November 1, 2021, TMR sold part of the GOPASS and on July 1, the Group acquired a 100% stake in the European company GOPASS SE, which will serve for the purpose of expanding on the European market. The Group founded a new company International TMR Services s.r.o., which will provide consulting services within TMR. On November 1, 2022, a merger took place between EUROCOM Investment s.r.o. and WORLD EXCO s.r.o., with EUROCOM Investment s.r.o. becoming the legal successor. Simultaneously, there was a cross- border merger involving GOPASS, a.s., and GOPASS SE, resulting in GOPASS SE becoming the successor company, along with a change in the country‘s registered ofﬁce. On June 28, 2023, TMR Real Estate, s.r.o. was established. This company will focus on implementing real estate projects aimed at constructing investment properties in the High and Low Tatras and amusement parks. Company Profile The TMR Group Brno Pardubice BUDAPEST WARSZAWA KRAKOW H UA PL CZ A DE Brezno Katowice Poprad Košice Praha Bratislava WIEN Flattach Mallnitz Ostravice Liptovský Mikuláš Innsbruck Mountain Resort VYSOKÉ TATRY (The High Tatras) All-season resort offering complex services for all the types of clients in the summer and winter season Three ski areas– Tatranská Lomnica, Štrbské Pleso and Starý Smokovec Situated in the oldest national park in Slovak republic TANAP 5 months of snow guaranteed 24 km of ski trails, 17 km of snowmaking 20 cableways and lifts Max. transportation capacity 23,000 persons/hour Hotels - Grandhotel Praha Tatranská Lomnica, Grandhotel Starý Smokovec, Hotel FIS Štrbské Pleso, A Night at Lomnický Peak, Horec suites Mountain Resort JASNÁ NÍZKE TATRY (Jasná Low Tatras) he biggest winter sports resort in Central Europe Ski areas – Chopok North and Chopok South Host of World Cup Jasná 51 km of ski trails, 42 km of snowmaking 20 cableways and lifts Max. transportation capacity 31,959 persons/hour Hotels – Hotel Tri Studničky, Hotel Grand Jasná, Chalets Jasná de Luxe and Hotel Srdiečko, A night on Mt. Chopok, Hotel Pošta*, Hotel SKI, Hotel Liptov Real Estate – Kosodrevina Lodge, sale of Chalets Jasná Collection Mountain Resort SZCZYRK MOUNTAIN RESORT (Szczyrk) 40 km of ski trails, 22 km with snowmaking, 5km of lit-up trails 13 cableways and lifts Max. transportation capacity: 22,000 persons/ hour Hotels – Hotel Gronie Ski&Bike Location – Silesia Voivodship, the Beskids, Poland Mountain Resort MÖLLTALER GLETSCHER An Alpine resort located on a glacier with 17.4 km of ski trails and almost 7 km of freeride terrain 9 cableways and ski lifts Max. transportation capacity of 15,610 persons/hour 90% of ski trails covered with snow made by 45 snow guns Glacier Snow Park on the Schareck trail – with terrain waves, banked curves and jumps Location – Carinthia, Austria Mountain Resort ANKOGEL MALLNITZ (Ankogel) A mountain resort with 12.8 km of ski trails and 5 km of freeride terrain 5 cableways and ski lifts Max. transportation capacity of 4,880 persons/hour 50% of ski trails covered with snow made by 40 snow guns A big complex for skiing beginners at the lower cableway station Location – Hohe Tauern, Austria Mountain Resort MUTTERERALM (Innsbruck) A mountain resort with 15 km of ski trails and 8 km of toboggan trails 5 cableways and ski lifts Max. transportation capacity of 2,100 persons/hour A popular complex for skiing families with smaller kids Location – Innsbruck, Austria Mountain Resort SKIAREAL JEŠTED A ski resort in a close proximity of the city of Liberec, within a short driving distance from Prague More than 10 km of slopes 10 ski lifts and cableways Water park TATRALANDIA The biggest aquapark with accommodation in Central Europe Unique indoor complex Tropical Paradise also with seawater and authentic corals A Hawaii complex with four artiﬁcial surf wave lanes 14 swimming pools (10 year-around) with thermal, sea and pure water 21 steam, water, jet spas, saunas and procedures, a wellness center 28 toboggans and waterslides (6 year-round) and 300 different attractions Liptov Arena – a multipurpose cultural- entertainment sports arena in Tatralandia Housing – Holiday Village Tatralandia 502 beds in 99 stylish bungalows and apartments in 11 theme villages Congress center, 5D cinema, Hurricane Factory wind tunnel, ZOOKONTAKT Tatralandia Real Estate – sale of apartments in Holiday Village Tatralandia Location – Liptov Region, Slovakia Water park Bešeňová The extensive complex has a rich history thanks to the rich resources of geothermal springs 23 pools and whirlpools (13 during winter) with geothermal and clear water Harmony wellness center 30-meter-high toboggan tower with 6 waterslides that are more than 1km long Hotels – Hotel Bešeňová, Galéria Thermal Bešeňová*, Hotel Akvamarín Bešeňová Location – Liptov Region, Slovakia LEGENDIA - SILESIAN AMUSEMENT PARK (Legendia, ŚLĄSKIE WESOŁE MIASTECZKO) The largest and oldest leisure park in Poland The 40-meter high roller coaster - Lech Coaster – with 4 inversion curves Area: 26 ha 50 attractions Location – Park Śląski (Silesian Park) near Chorzów, Poland GOLF & SKI RESORT OSTRAVICE An 18-hole par 72 master golf course designed by Chris Johnson A lit cross-country skiing resort Green Inn Hotel – 36 rooms A restaurant, wellness center, congress center Location – the Beskids, Czechia GOLF RESORT KASKÁDA A 27-hole master golf course designed by a British architect, Jonathan Gaunt A 6-hole academy, a 300 m lit driving range A 4 hotel - 50 rooms, 100 beds A restaurant with a deck and a view of the golf course, a congress center, a wellness center Location – Moravia, Czechia 14 14 BUSINESS SEGMENTS OF TMR TMR’s business activities are concentrated into in seven key segments – Mountains Resorts; Leisure Parks; Golf; Dining; Sports Services and Stores; Hotels; and Real Estate. MOUNTAIN RESORTS The Mountain Resorts segment includes the operation of six mountain resorts in Slovakia: Jasná Nízke Tatry – Chopok North and South, Vysoké Tatry – Tatranská Lomnica, Starý Smokovec and Štrbské Pleso, the Polish Szczyrk Mountain Resort, the Austrian Alpine resorts of Muttereralm, Mölltaler Gletscher and Ankogel Mallnitz, and the leased Ještěd Ski Resort in Czechia. The resorts currently offer over 150 km of trails with transport capacity approximately 105 thousand persons per hour. Since the winter season 2012/13 TMR also co-manages the ski resort Špindlerův Mlýn in the Czech Republic, which has been leased by Melida, a.s., in which currently TMR owns 25%. VYSOKÉ TATRY (THE HIGH TATRAS) The High Tatras as the greatest mountain range in Slovakia are also the oldest national park in our country (Tatra National Park – TANAP). Therefore, all the tourist activities are performed considering the nature conservation and rare biotopes. In the resort of the High Tatras the Company owns and operates cableways in Tatranská Lomnica and Starý Smokovec and Štrbské Pleso. Tatranská Lomnica The longest trail in Slovakia also with the highest altitude difference is located in Tatranská Lomnica. This ski trail has the highest altitude difference with possibility to ski down from 2,196 m a.s.l. on a 5,5 km long trail from Lomnické sedlo to Tatranská Lomnica. Ski trails in Tatranská Lomnica are attractive for both experts and intermediate skiers, and beginners can use blue tracks in the bottom part of the resort. Altogether there is one difﬁcult, ﬁve intermediate, and six beginner trails available for skiers. In September 2015 the ski portal Skiresort.info ranked the ski resort Tatranská Lomnica among the world’s top 14 resorts with up to 20 km of trails; and in the category “Beginners” it was ranked among the world’s top resorts with infrastructure and services suitable for ski beginners. The resort in Tatranská Lomnica offers up to 45.9 hectare of ski trails with total length of 12 km, while almost 32 ha of ski trails have technical snowmaking coverage thanks to 250 snow guns. Tatranská Lomnica together with Starý Smokovec also offers fun and entertainment after skiing. Every day there is an interesting après ski program available for skiers. Parking has been also improved to the satisfaction of skiers with a new terraced ski in – ski out parking lot for 350 cars and 10 buses. In the summer Tatranská Lomnica turns into a sought-after tourist destination for relaxation and fun for the whole family. Besides cableway trips up to the top of Lomnicky peak, attractions such as cart rides from Štart, there is the original children’s project – Tatra’s Wilderness. It presents educational - entertainment trails in Tatranská Lomnica, Lomnické sedlo and around Skalnaté pleso, accompanied by games and a mini ecopark Marmot Land at Skalnaté pleso for children under 12. Company Proﬁle Revenue Breakdown Mou n tai n Resorts Hotels Di n i n g Leisure Parks S p orts Servi c es & Stores Real Estate Golf 37,6% 29,7% 14,6% 12,4% 3,6% 1,7% 0,5% Mou n tai n Resorts Hotels Di n i n g Leisure Parks S p orts Servi c es & Stores Real Estate Golf 37,6% 29,7% 14,6% 12,4% 3,6% 1,7% 0,5% 15 15 Starý Smokovec Starý Smokovec resort is unlike Tatranská Lomnica more about alternative leisure activities, such as snowtubing, sledging on a 2.5 km long sledging track, and funtools – skifox, snowbike, snowcoot. In the winter season, every year Hrebienok is home to the Tatra Ice Dome – an ice sculpture hidden in a dome, which is carved out in a different form every year. In the summer season there are attractions like summer tubing. Hrebienok, the ﬁnish station of a comfortable panorama funicular from Starý Smokovec is the favorite start point for hikes throughout the year. In winter months there are ski trails available for skiers with name Jakubkova lúka I and II. Štrbské Pleso The Štrbské Pleso resort is sought after by fans of quality wide red trails with best views. The best experience at this picturesque location comes on a cableway ride to Solisko at 1,840 m when one can view beautiful peaks of the High Tatras and the whole mountain ridge of the Low Tatras from Kráľova hoľa to Mt. Chopok. In the resort of Štrbské Pleso we offer our visitors up to 26 kilometers of cross-country tracks and more than 9 kilometers of trails with beginner or medium difﬁculty. There is also a wide range of ski and snowboard rentals, ski service, and ski school for kids and beginners. In the summer for instance you can take a cableway ride to Solisko, where you get panoramic views of the valley, of the romantic Štrbské pleso, Kriváň, or the Low Tatras. Passionate bikers can rent a mountain bike at Tatry Motion – a sports store underneath ski jump boards – with an option of its return in Starý Smokovec or Tatranská Lomnica. Via mountain trails you can easily get to Popradské pleso or you can take a ride to Sliezsky dom, Smokovec, Hrebienok or to Poprad via the ‘Freedom Route’. Boating on the lake has a more than 130-year old tradition. JASNÁ NÍZKE TATRY (JASNÁ LOW TATRAS) The Jasná Nízke Tatry (Jasná Low Tatras) resort is located in the mountain range of the Low Tatras, which stretches across the heart of Slovakia. The second highest peak and also one of the most visited places in the Low Tatras is Mt. Chopok, the north and south side of which is interconnected with cableways. Jasná Nízke Tatry is currently the biggest ski resort in Slovakia. Skiers have an option to try all types of trails from blue to black, suitable for beginners, families with children, as well as for advanced skiers. The modern snowmaking system with 617 snow points covers almost 37 km of trails and provides snow guarantee for at least ﬁve months a year. Fans of wild rides can enjoy 12 free ride zones, a great snow park, and Fun Zone. You get to the top of Mt. Chopok by ultra-modern cableways – the 24-person Funitel or 15-person gondolas. At night you can enjoy night skiing on a 990 - meters long lit up trail in Jasná. There are 2830 cableways and lifts at Mt. Chopok with the transportation capacity of 32,000 persons per hour. The winter season typically lasts from the beginning of December to the end of April. In the resort of Jasná Nízke Tatry TMR also operates several dining facilities. Happy End Disco & Restaurant is well known by its great disco parties and live concerts at night. Furthermore, one can try Bernardino burger restaurant beneath Mt. Chopok, the stylish Restaurant Von Roll Luková, Snack Bar Rovná Hoľa, a panoramic A la Carte restaurant Rotunda at 2,004 m above sea level with a large sundeck and multiple après-ski bars at the start cableway stations. The highest located ski in-ski out Night at mount Chopok on the top of Mt. Chopok also serves as a boarding and disembarking station of cable cars that connect the southern and northern slope of the second highest peak of the Low Tatras. In addition to the dining facilities we also offer our visitors multiple sport services – individual or group lessons with licensed instructors at the ski school and kindergarten Maxiland. The stores offering sports wear and accessories and sports equipment rentals are run under the Tatry Motion brand. The modern ski service offers ski and snowboard service with a technologically perfect machine on the spot. Thanks to the all-year cableway operation the Jasná resort offers also in the summer a wide spectrum of sports activities – rides on mountain carts, scooters, Nordic walking, a bungee trampoline, or lake boat rides. On the north and south side of Mt. Chopok there is a family outdoor game prepared with new tasks and attractions of the Dragon Demian at Drakopark Chopok. SZCZYRK MOUNTAIN RESORT (SZCZYRK) Szczyrk Mountain Resort is located in the Polish Beskid Mountains near the town of Szczyrk. The resort offers skiing on 65 hectares of perfectly laid-out and long trails. The longest trail is 5.3 km long. Thanks to cooperation with neighboring ski areas clients can use a joint ski pass on 40 km of ski trails. The resort consists of a new10-person gondola and three 6-person chair lifts. The slopes and trails have been widened and proﬁled, with modern snowmaking system and water Company Proﬁle 16 16 Company Proﬁle tank and a new multifunctional building – SZCZYRK- GONDOLA – has been added, providing full service for visitors. At the beginning of 2020, the center was at an altitude of 1000 m above sea level. put into operation a new restaurant Kuﬂonka with a capacity of 450 people. MÖLLTALER GLETSCHER The Mölltaler Gletscher ski resort located in the only glacial area in Carinthia offers ski trails of all difﬁculty levels, including the most popular almost 7 km long FIS downhill course where professional skiers love to train. The season begins in mid June and ends in mid May of the following year. The snow cover reaches as high as 450 cm in high season. There are trails for beginners but also terrain for experienced freeriders. Resort attractions include the Mölltaler Gletscher Express funicular, which transports 220 passengers to the altitude of 2,234 m within 8 minutes and surmounts a vertical drop of 1,012 m on a more than 4.7 km long route. Non-skiers can enjoy the panoramic Ice Palace restaurant at the altitude of 2,800 m and feast their eyes on beautiful scenery of 28 peaks. The resort features restaurants, car parks, ski rentals, a snow park and much more. The interchange station (upper funicular station) will offer a ski service, a ski depot, a big complex for skiing beginners in the winter. Ski lessons for kids from the age of 4 years including lunch care will be at disposal in the kid´s club. ANKOGEL MALLNITZ The Ankogel Mallnitz ski resort (20 km from the Mölltaler Gletscher resort) is located in the Hohe Tauern National Park between Carinthia and Salzburg and is ideal for enjoying some extra skiing adventures in the region on perfect terrain above the tree line. Ankogel Mallnitz offers medium-difﬁcult ski trails. A kid´s club for small skiers from the age of 3 can be found at the lower cableway station. The club has its own ski area with a magic carpet (conveyor belt) and provides kids with lunch, and there is a ﬁnal race after lessons. Clients can use a combined ski pass in both resorts – Ankogel and Mölltaler Gletscher. MUTTERERALM (INNSBRUCK) Muttereralm in the Tyrolean Alps is the latest acquisition in TMR‘s portfolio. The resort’s offer includes hiking, cycling and mountain biking trails during summer and skiing or sledding in winter. Modern infrastructure and adventure restaurants throughout the ski area make Muttereralm a popular destination for the whole family. Snow is guaranteed by the snowmaking system, which snows all 15 km of slopes. SKIAREAL JEŠTĚD (JEŠTĚD) The Ještěd mountain resort has a long history of sports and has been traditionally an urban resort with a unique client target area. Its all-year operation is even more popular for its easy access from the northern Czech region. The sole resort has 10 km of ski trails interconnected with the new trail of Nová Skalka, which is the key project for the future of the resort. In the summer season, a popular attraction was the bike park as well as the summer operation of the Skalka cable car for hiking as well as cyclists. TMR has been renting the resort and operating it since 17 17 December 22, 2017. TMR signed a lease agreement of Ještěd for 10 years with an option of another 10 years. LEISURE PARKS WATER PARK TATRALANDIA Water park Tatralandia with lodging facility Holiday Village Tatralandia is one of the largest all-year aquapark in Central Europe. It offers its customers 14 pools and 28 waterslides, out of which ten are all-year and four are summer ones, as well as Celtic sauna world and Wellness Paradise. Fun Park Tatralandia is also located within the aquapark. The year- round indoor shell-shaped facility Tropical Paradise with a sea water pool, a unique roof deck allows sunbathing and provides a snorkeling pool with authentic coral reefs and marine life. The indoor simulator, Surf Waves Tatralandia, utilizes the technology of an artiﬁcial river creating waves like in ocean. The unique Hawaii complex includes four lanes of 68 square meters. This attraction guided by experienced instructors is suitable for age groups 6 and over. In 2017 Tatrapolis – a park with metal miniatures of world-famous structures, was added in Tatralandia and it’s also possible to get to know the life of animals from a close distance in ZOOKONTAKT Tatralandia. WATER PARK BEŠEŇOVÁ Water park Bešeňová is a water park with year-round operation. The thermal swimming pool is built based on hot springs of healing waters that spring from a depth of 1,987 meters. Geothermal water has a beneﬁcial effect on the respiratory and locomotor systems. There are 23 pools and hot tubs with geothermal and clear water (13 during the winter) in the area, which makes the water park the 1st place in Slovakia. It offers visitors 13 toboggans, slides, and a wave pool in the entertainment tent. One of the biggest jewels is the unique wellness & spa. Holistically focused wellness with an emphasis on body, soul and mind care is a source of new energy for everyone. The new wellness & spa offers a connection of 4 elements of life and Liptov nature through birch trees, the Bešeňová cave with endless waterfalls and a magniﬁcent Sauna dome and a new quiet zone. LEGENDIA – SILESIAN AMUSEMENT PARK (LEGENDIA, ŚLĄSKIE WESOŁE MIASTECZKO) Legendia near the Polish town of Chorzów is the largest and oldest theme park in Poland. It was launched in 1959. It spreads on the area of 26 ha. It is located in the upper Silesian industrial district with its unique ‘green oasis’ of Silesian Park (Park Śląski). The guests will ﬁnd over 40 popular attractions, such as the Ferris wheel (Legendia Flower), large aircrafts (Dream Flight Airlines) and Tea Cups, as well as new rides, including Diamond River - a water slide from the height of 8 and 12 meters, or Lech Coaster - awarded the Best Coaster 2017 in the prestigious industry competition for the best European rollercoaster 2017. The hit of the 2018 season is Bazyliszek – the only Interactive Dark Ride family attraction in Poland and at the same time one of the most modern in the world. TMR owns a 100% share of the park and has been operating it since May 2015. Company Proﬁle 18 18 GOLF The golf segment is TMR’s newest segment, in line with our strategy to expand our Group’s business operations. GOLF & SKI RESORT OSTRAVICE Golf & Ski Resort Ostravice launched its operations in 2008. In Golf Digest’s survey in 2009, 2010, and 2011 the resort was awarded The Best Czech Golf Course. Along with the golf course, a lit cross-country skiing resort was created for professional and recreational cross-country skiers. The 18-hole golf course is located between two highest peaks of the Beskid Mountains – Lysá Mountain and Smrk at the foot of Mt. Žár in the village of Ostravice at the altitude of 400 meters a. s. l. GREEN INN Hotel located at the heart of the resort features 36 spacious rooms with high standard amenities, a restaurant with high-quality regional cuisine, wellness services and variable conference rooms. TMR has been leasing and operating the resort since November 2018 and the lease and management contract has been signed for 20 years GOLF RESORT KASKÁDA The luxury resort, situated 9 km outside the city of Brno, provides a 27-hole master golf course, a 6-hole academy, and a 300-meter lit driving range with a covered tee. The full-service resort is complemented by a 4 hotel with 50 rooms and apartments and 100 beds, a restaurant with a deck and a view of the golf course, a congress center, and a wellness center. TMR has been managing the resort since January 2019, whilst it rents the hotel and the restaurant. The lease contract has been signed for 20 years. DINING The dining facilities include tens of restaurants, bars, après ski bars, and fast-food joints on and off the slopes of the mountain resorts, in the leisure parks, and in the golf resorts of TMR’s portfolio. SPORTS SERVICES AND STORES Sport Services and Stores under the Tatry Motion, Szczyrk Motion, and Ještěd Motion brands include specialized stores with top brand ski and snowboard goods, ski schools, and sports equipment rentals. Tatry Motion, Szczyrk Motion and Ještěd Motion stores are located at TMR the resorts’ base levels. In the leisure parks stores sell souvenirs and specialized summer and sports merchandise. HOTELS TMR in its hotel segment currently owns or rents and operates a portfolio of renowned hotels and lodging fa- cilities in the High and Low Tatras and in the leased golf resorts, in categories ranging up to four stars. All hotels operated by TMR offer together more than 3,000 beds. The hotels can please a wide spectrum of clients from individuals and families to corporate clientele. Hotel fa- cilities offer a suitable place for conferences and busi- ness meeting effectively covering the off-peak season. THE HIGH TATRAS Grandhotel Praha, Tatranská Lomnica 123 rooms, 239 beds Company Proﬁle 19 19 It is situated in the center of Tatranská Lomnica, at the foot of Lomnický štít, in the heart of the High Tatras. Its history dates back more than 110 years since the grand opening in 1905. The wellness center Grand Mountain Spa combines local spa tradition with healing effects of the Tatra’s nature. During FY 2016/17 the hotel’s rooms underwent a renovation in the ‘Classic’ style. Grandhotel, Starý Smokovec 84 rooms, 161 beds From the point of view of history, location, or architecture this Grandhotel is justly considered one of the most prestigious hotels not only in the High Tatras, but also in Slovakia. Its unique vintage ambiance is attractive for its traditional Austrian- Hungarian cuisine and views from its spacious Art nouveau rooms. Hotel FIS, Štrbské Pleso 78 rooms, 157 beds Mountain ski in - ski out Hotel FIS is located right below the FIS slope, in the center of a sport area at Štrbské pleso. The location is its main competitive advantage. The hotel is in the elevation of 1,346 m and offers newly renovated rooms. The hotel with its own sports arena and a pro fitness center also offers a natural wellness & spa designed in a mountain-meadow style. Horec suites, Tatranská Lomnica 33 rooms, 66 beds Apartment house Horec is situated right in the center of Tatranská Lomnica and is built in an atypical style, which looks luxurious in the exterior and interior and at the same time ﬁts perfectly into the Tatra environment. Thanks to the combination of modern interiors with quality traditional materials, the Horec apartments have a unique mountain atmosphere and at the same time offer guests maximum comfort. A night on Mt. Lomnický štít 2 rooms, 4 beds Just to hear is not enough. A night on top of Mt Lomnický štít is something that you need to experience. Discover the most beautiful place in Slovakia where the summits of the Tatras are touching the sky. Enjoy countless breathtaking views of every piece of the Slovak high mountains, captivating silence, and a magical atmosphere in the highest located hotel room in Central Europe. THE LOW TATRAS Hotel Tri Studničky , Demänovská Dolina 42 rooms, 98 beds The ﬁrst adult friendly hotel in Jasná at the foot of the Low Tatras, has been known for years as an oasis of peace and relaxation. Wellness with a mountain beach, experiential gastronomy, harmony and relaxation in the hotel can stop the hurried time. At a time when we do not have time to stop for a while, to perceive our surroundings, or even to perceive ourselves and the people around us, we in Tri Studničky decided to focus exclusively on the adult client. Hotel Grand, Jasná 155 rooms, 311 beds This mountain hotel is situated in the center of Jasná, at 1,100 m a.s.l., right near the start station of the 8-seat cabin cableway Grand Jet. Its ski in-ski out location is exceptional, as well as the renovated interior and exterior wellness center or a multipurpose conference hall with a 350-person capacity. This kids- friendly hotel is well-suited for families with children. Company Proﬁle 20 20 Company Proﬁle Hotel Pošta 32 rooms, 72 beds The ﬁrst boutique hotel in Jasná with its imaginative architecture underlined by the panorama of the mountains brings a perfect harmony with the surrounding nature. The unusual interior with a breath of avant-garde and the variety of materials used is a feast for those who are close to „otherness“. A new bar in the hotel was created with the aim of creating a place in the center of Jasná where people with the same hobbies will meet - mountain lovers, active people with attention to detail who seek and know how to appreciate quality. Chalets Jasná Collection 68 rooms, 264 beds Two locations, one collection of unique chalets. The chalets have been added to the portfolio of TMR hotels to bring the client a diverse range of accommodation with customized services in the private environment of the chalet. Chalets Jasná Collection are an ideal choice for groups of 4 or more people. The privacy of the mountain chalet and the great location right next to the best slopes in Slovakia in two locations - Jasná Záhradky and Jasná Centrum will take care of an experiential holiday for the whole family. A novelty of 2020 is the introduction of a new online delivery system, where the guests can have their food brought from the restaurant of Hotel Pošta directly to the chalet. Hotel Srdiečko 43 rooms, 84 beds The hotel with a unique mountain atmosphere with an open heart has been welcoming its guests since 1958. The hotel is located directly at the cable car station in the heart of the Low Tatras, thanks to which you can get straight from the hotel to the top of the Mount Chopok. The great ski-in / ski-out location of the hotel allows you to walk from the room directly to the ski slope or hiking trail. The hotel with the atmosphere of a chalet, excellent gastronomy and a cozy wellness world is perfect for a family holiday or stay for two. A night on Mt. Chopok 3 rooms, 12 beds Unique location right on the top of the Mount Chopok. If you are a mountain lover and you are looking for adventure or longing for romance as a couple, you will find your little paradise in this hotel. Hotel Rotunda is synonymous with a mountain atmosphere and beautiful experiences. Maximum comfort in an exclusive location and a view of the panorama of the High Tatras or the basin of Slovakia directly from the rooms of the Rotunda hotel will enchant every guest. Each of the hotel’s rooms will surprise you with its cozy and tasteful furnishings. The hotel has only a few rooms, thanks to which the Rotunda offers guests an intimate environment and a feeling of uniqueness. Hotel SKI 40 rooms, 78 beds Hotel SKI stands out with its unique retro design, enhancing the atmosphere of the mountain environment in which is located. Thanks to its location directly on the slope in the Záhradky area and the popular SKI Bar in a traditional spirit, it is ideal for enthusiasts of both winter and summer sports. The ski slope and the starting cable car are only 50 meters away from the hotel. Hotel Liptov 53 rooms, 191 beds Since the summer of 2023, the hotel has been a part 21 21 Company Proﬁle of TMR. Its location in close proximity to Vrbické pleso with the picturesque scenery of Chopok and the highest peaks of the Low Tatras provides an ideal starting position for all winter sports enthusiasts as well as summer sports and hiking. Holiday Village Tatralandia 101 rooms, 391 beds Just a few steps from the Aquapark Tatralandia is the unique lodging resort Holiday Village Tatralandia with a wide range of private accommodation in cottages with entrances to the aquapark included in the price. Accommodation in themed, private cottages is ideal for exploring Liptov and offers many activities and accompanying services. Hotel Bešeňová 123 rooms, 246 beds TMR owns the hotel directly in the complex in the Bešeňová water park. The hotel offers a total of 123 rooms and suites, while guests have all-day access to the Bešeňová water park. Galéria Thermal Bešeňová 52 rooms, 104 beds Hotel Galeria Thermal brings to Bešeňová a unique combination of beneﬁcial geothermal water and quality services of a 4 hotel. At the Hotel Galeria Thermal Bešeňová, visitors can enjoy maximum relaxation during the event, but also a gallery of the most beautiful views of Chopok, Choč mountains or the water park area. As hotel guests, they have private access to pools with beneﬁcial thermal water directly from some rooms. Hotel Akvamarín Bešeňová 143 rooms, 286 beds TMR rents and operates Hotel Akvamarín Bešeňová, which brings a new, modern accommodation complex right in the water park and it is possible to get there comfortably through covered areas. A private outdoor pool is available for guests staying and for greater comfort a balcony or terrace, a kitchenette and air conditioning in each room, which are suitable for large families due to their spaciousness. THE CZECH REPUBLIC Green Inn Hotel, Golf & Ski Resort Ostravice 36 rooms, 72 beds TMR rents and operates Green Inn Hotel situated at the heart of Golf & Ski Resort Ostravice in the Czech Beskid Mountains. It offers fascinating views of Challenge Golf Course Ostravice and of Beskid peaks and valleys. A luxury resort that meets requirements of low-energy buildings consists of the main building – the club house with a reception desk, a restaurant, congress space and a luxury wellness center, and seven separate hotel houses. Hotel Kaskáda, Golf Resort Kaskáda 50 rooms, 100 beds TMR rents and manages the golf hotel Kaskáda, situated in Golf Resort Kaskáda near the city of Brno. The hotel with a restaurant, wellness center, bowling, and congress space offers ideal comfort and privacy in cozy barrier free apartments with a view of the golf course. POLAND Hotel Gronie Ski & Bike, Szczyrk Mountain Resort 36 rooms, 86 beds A recently renovated ski-in and ski-out hotel in the vicinity of Szczyrk Mountain Resort. The hotel provides accommodation in 2 – 4-bed rooms and family apartments. There is a wellness spa, a ﬁtness center, and a conference room. REAL ESTATE The goal of this segment is to build infrastructure and buildings in the mountain regions and the summer resorts. In its realization the Company plans to capitalize on the unique location in the High and Low Tatras region (including Tatralandia). TMR’s strategy in this segment is mostly development, construction, and sale of apartments which serve as short and long-term londings. In the past ﬁnancial year, the chalets at Záhradky and bungalows in the Tatralandia complex were sold. Currently, TMR is preparing a new real estate project, Jasná Resort Central Hotel. Alongside these projects the Real Estate team works on projects ensuring the necessary infrastructure is being built for the natural development of tourism in the following areas – cableways, infrastructure, trails, information signs, etc. TMR plans its real estate projects mostly on traditional, urban areas, where sport and tourism have been part of history for decades. The Company within the Real Estate segment owns and leases out Kosodrevina Lodge. Revenues from the Real Estate segment come mainly from the hotel leases, from sale of bungalows Holiday Village Tatralandia and sale of apartments Chalets Jasná Collection. 22 VISION Due to the unique position of the Tatras and strategic acquisitions in the region, we aim to become a premier, internationally renowned tourism services provider striving to revive mountain resorts, aquaparks, theme and amusement parks in the region of Central and Eastern Europe from the investment, sports, cultural, and social point of view. MISSION STATEMENT TMR’s mission is to provide services in tourism at a constantly increasing level, through business activities divided into seven key segments – Mountains Resorts; Leisure Parks; Golf; Dining; Sports Services and Stores; Hotels; and Real Estate. The Group plans to fulﬁl its mission through synergies leading to a complex satisfaction of both, its clients, and shareholders. COMPETITIVE ADVANTAGE As opposed to other operators of mountain resorts and tourist services in the region of Central Eastern Europe, TMR holds a position of natural monopoly due to the unique geographical location of TMR’s key mountain resorts in the highest mountain range in the region – the Tatras and due to a long history and signiﬁcant local brands of the resorts in Poland and Czech. This advantage predetermines them to be premier tourist destinations in Central and Eastern Europe. Besides the attractive mountain environment and the resorts’ history, the following facts form the competitive advantage for TMR: Through its loyalty program GOPASS the Group can build and sustain a wide client base in Slovakia, Poland, Czechia, and Austria during both the winter and summer season. There are 64 million people living in TMR’s key target countries within the CEE region, and their economic power and leisure spending has been increasing from year to year. The Poprad Airport ensures easy access by air from key European cities outside the mountainous area, e.g., London, Warsaw, Riga, Tel Aviv. To the east of the Tatras there are ski resorts with only limited comparable services. The high altitude and investments in infrastructure provides a competitive advantage for TMR, comparing to other resorts in the region, since it signiﬁcantly mitigates the risk of unfavorable weather because of global warming. The Group can capitalize on intra-segmental and inter-company synergies in sales, purchase, operations, and support areas of the Group. TMR has years of experiences and know-how in operation of mountain resorts, leisure parks, and ancillary tourist services, as well as in building capital-intense infrastructure. TMR’s business model is well diversiﬁed with revenue generation from mountain resorts, leisure parks, hotels, and complementary services. The size of the Group and its years of experiences and success enables an easier access to capital TMR mitigates the risk of seasonality with its summer season comparably strong to its winter season thanks to its summer cableway operations and summer activities, popularity of hotels in the mountain resorts, the summer operation of Silesian Amusement Park, and the all-year operation of water parks Tatralandia, Bešeňová. BUSINESS STRATEGY The long-term strategic goal of the Group is to maintain its leading role in winter and summer tourism in the region of Central and Eastern Europe and use this position to gradually enter new European markets. Leadership in the area of tourism provides TMR with the ability to set trends and standards in this industry. At the same time, it leads the Group to differentiation. As a result, TMR works on offering premium services for reasonable prices in comparison with other similar resorts in Europe. A wide spectrum of services and their quality are the key for the Group’s direction. This goal is based on three pillars, which are highly interconnected: PILLAR 1: INCREASING QUALITY WITH INVESTMENTS By the end of 2023, for the last 17 years TMR had invested in its resorts and hotels over EUR 466 million. As a result of these investments, the services provided by TMR in the High and Low Tatras, in Polish Szczyrk, Legendia and in Czech resorts improved signiﬁcantly. TMR’s resorts thus reached the level of alpine resorts and increased their leading position in the region. CAPEX of approximately EUR 23 million in 2022/23 includes among other things investments in the construction of the Biela Púť cableway in Jasná and Strategy 23 continuation of construction works at Centrum Jasná development project. The investments also include the reconstruction of the wellness facility at Grandhotel Starý Smokovec, the refurbishment of apartments in the water park Bešeňová, improvements to the IT infrastructure, as well as the reconstruction of the water slide tower at Tatralandia. Int the Szczyrk mountain resort, investments were made in the development of the bike park, the improvement of slope grooming machinery, the reconstruction of the cable car facility, and operational investments were carried out in Legendia. In Ještěd, the Group invested in the „Nová Skalka“ project, while at the Kaskáda and Ostravice golf resorts, the Group focused on various operational investments. In Austrian resorts Mölltaler and Ankogel, investments were made in cable cars and ski slope expansions, and in Muttereralm, a new access system was implemented. In the coming periods, the Group plans to grow organically in its resorts and capitalize on completed investments. Future capital investments in the resorts will mainly cover maintenance and infrastructure, improvements in the hotel segment, and the automation of customer service processes. The Group also intends to continue with planned real estate projects in Slovak resorts. Investments will also be required for the recently acquired Austrian resorts, which the Group plans for in the coming years. New ski slopes, cable cars, and strengthening of accommodation infrastructure are in the preparation process for almost every resort, although many of them face lengthy processes in terms of permits and exemptions. The Group is also focusing on investments in the digitization and automation of customer processes through its GOPASS program. The goal is to develop and enhance the GOPASS program, which is based on customer. Through investments in digital processes such as e-commerce, online marketing and communication, a digital customer application, and the automation of customer service processes, the Group aims to improve the quality and service for its customers and create a loyalty system. The Group focuses on customer engagement and monetization by achieving a high-quality product and dynamic pricing. The Group has developed expertise in managing the prices of its key products (ski passes, hotel stays) and has thereby established a system of dynamic pricing that responds to demand and creditworthiness based on seasonality. This competence creates opportunities to increase efﬁciency and proﬁtability by leveraging the potential in price determination. PILLAR 2: STRATEGIC ACQUISITIONS AND EXPANSION Following the acquisition of three Austrian resorts in the last couple of years, in the medium term, TMR will focus primarily on completing and strengthening existing resorts, where it will have ample opportunities to grow, improve services and improve TMR’s results. Strategic expansion of the operations on the neighboring Czech market includes a direct minority interest in Melida a.s., the operator of the Špindlerův Mlýn resort, which is included in the GOPASS loyalty program. In November of 2017 TMR made an agreement with the Czech town of Liberec for TMR to rent and operate the ski resort Ještěd. TMR plans to develop the potential of this unique city ski resort via future investments. TMR also expanded its business activities in Czech by entering a new segment – golf. Since November 2018 TMR has been renting Golf & Ski Resort Ostravice and in January 2018 it started managing Kaskáda Golf Resort Brno. The Ostravice contract has been signed for 20 years and the Kaskáda contract, based on which TMR is managing the resort’s hotel, restaurant, and a congress center, has been signed for 20 years. TMR also plans to further expand its business activities in utilization of accommodation capacities for third parties, namely of new hotel in Bešeňová and Centrum Jasná. PILLAR 3: CONSTANT OPERATIONS & SERVICES ENHANCEMENT The intensive growth in the number of visitors in the years before the outbreak of the COVID-19 pandemic, had been the result of an intensive customer orientation. Even in the years to come, management wants to achieve intensive growth of the number of visitors primarily by intensive pro-customer approach. Strategic steps to achieve this goal in the recent years included increasing the variety and quality of the services provided. TMR expanded the scale of attractions offered and improved the quality of ski schools, ski equipment rentals, and dining facilities on slopes. Moreover, it continuously improves the offer of après ski possibilities. The Group also tries to optimize transport possibilities to its resorts and cooperates with local business entities on the level of regional Strategy 24 Strategy clusters. TMR prefers to cooperate rather than compete with them; it wants to build on their success and provide their customers easy access to its nearby mountain resorts and leisure parks and a variety of attractions for children, adrenalin sports for the young (e.g. bike parks), and relaxation zones. Regarding accommodation possibilities, TMR focuses primarily on four-star hotels and improvement of their wellness and dining services. Other strategic steps include focus on afﬂuent clientele, essential quality of management and staff, and a sophisticated marketing strategy. A novelty is the creation of a resort “All Inclusive” package for accommodated guests. It’s including ski passes and aqua passes in the accommodation price for every single day of stay. This offer creates a comprehensive product for the customer, increasing the synergy effect between the hotel and the resort, not only within mountain resorts but also between mountain resorts and water parks. This offer establishes a unique position with customers and simultaneously serves as a competitive advantage in the market. It also increases the complexity of pricing for hotels and ski passes/water park passes, presenting an opportunity to improve proﬁtability. The Group gained experience in dynamic price management through the Gopass program in this area. By implementing this new business strategy, the Group achieved an increase in average prices, improved hotel occupancy, and enhanced the perceived value of its products from a customer perspective. Another key to TMR’s growth is innovation. In this regard, TMR acts as the trendsetter in tourism. The loyalty program GOPASS enables its customers to shop online or via a mobile app and to collect points in its facilities by using its services and pay bargain prices, and at the same time, GOPASS serves as TMR’s Customer Relationship Management and Direct Marketing tool. This loyalty program was awarded in 2015 at The Loyalty Awards in London, where it won in categories: the Best loyalty program of the year in the travel sector (airlines, hotels, destinations); the Best loyalty program of the year in Central and Eastern Europe; and the Best Customer Relationship Management (CRM) in a loyalty program for Direct Marketing. Dynamic price management is also a fundamental part of the GOPASS program, contributing to revenue growth in combination with other features and the creation of new products. Within this pillar, TMR fully utilizes synergic effects among its segments, thus it can constantly optimize services it provides, as well as to keep expanding its variety of products and services, e.g., an option to use services of several mountain resorts and the aquapark with purchase of just one ticket. The quality management in the resorts is also supported by the revolutionary price policy of ﬂexi ski pass prices, which allows the resorts to regulate attendance and plan capacity. In times of lesser demand TMR offers skiing at much more attractive prices than in the past and at times of congestion, with higher prices it can generate better sales and keep visitors at a level that can offer quality skiing. Linking this strategy with hotels has contributed to the creation of the „All- Inclusive„ offer for hotels. CAPEX ACQUISITIONS QUALITY Over EUR 466 million over 17 years New modern cableways and infrastructure Renovated hotels Larger, mondernized resorts Investment apartments Aquapark Tatralandia Špindlerův Mlýn, CR (25%) Szczyrk Mountain resort, PL Legendia - Silesian Amusement Park Legendia ,PL Mölltaler Gletscher, AT Ankogel Mallnitz, AT Muttereralm, Innsbruck, AT Lease of the Ještěd Ski Resort, CR Water park Bešeňová Commercial and marketing cooperations Management of resorts for third parties Better expereinces for visitors as a result of synergies Trendsetter in tourism in the region GOPASS loyalty program Innovations Flexi prices 25 FINANCIAL GOALS For the past ﬁscal year, the Group set the goals of a stable growth in operating revenues and operating income after the COVID19 pandemic. The short-term goal for 2022/23 included a revenue plan in value of EUR 180 mil. and EBITDA of EUR 49.0 mil. This ﬁnancial plan was presented at the General meeting held on May 31, 2023. TMR did meet the revenue and EBITDA plan and even exceeded the plan in revenues by 5% and in EBITDA by 21%. MARKETING STRATEGY MARKET SEGMENTATION The TMR Group’s client base is based on domestic visitors in Slovakia, Poland, Czechia, and Austria, as well as on visitors from neighboring and close by countries, such as Hungary, Lithuania, Latvia, Estonia or Romania. The natural market of the Group is in the regions within 200 km radius inhabited by 7.5 million people. This radius includes cities, such as Krakow and Katowice in Poland, as well as Czech cities Ostrava, Olomouc, and Brno. From the geographical point of view there are other, further markets with limited access to mountains, such as Great Britain, Ireland, and Baltic countries. While domestic clients and the clients from the neighboring countries use road transportation (car, bus), clients from more distant locations travel by air and use regular charter connections. The Group’s market has also expanded thanks to the acquisition of the Alpine resorts of Mölltaler Gletscher and Ankogel in Austrian Carinthia, and Muttereralm close to Innsbruck, which thanks to their attractive locations are interesting not only for the GOPASS program clients, but also for visitors from Austria, Italy, Germany, and Slovenia. The Group also divided potential target groups into the following categories: afﬂuent clients mainstream low-cost clients The main marketing goals of the Group include clear brand placement on the market by segmentation of clients and focusing of marketing strategies on these speciﬁc segments that would lead to maximum synergy of all brands covered by TMR. At the same time the Group has been observing a shift of clientele structure towards afﬂuent clientele generating the highest revenues and focusing on products and services with the highest added value. COMMUNICATION OF STRONG TMR BRAND Preferred goals of the TMR Group’s marketing include building of the TMR brand awareness by constant communication of image, integrated product communication with the TMR brand, setting communication of the Group and all brands that the Group covers to reach maximum synergy (cobranding); and by strengthening positive and managed PR and attractive adventure tourism – through event Strategy Revenues EBITDA EBITDA margin 0% 5% 10% 15% 20% 25% 30% 35% 0 € 50 000 € 100 000 € 150 000 € 200 000 € 2018/19 2019/20 2020/21 2021/22 2022/23 2022/23 plan Plan vs. Actual Operating Results 26 management. In order to create awareness and build a strong company brand, a useful fact without a doubt is that TMR is a publicly traded company listed on the stock exchange in Bratislava, Prague, and Warsaw; it is the strongest player in tourism in Slovakia, or even in Central and Eastern Europe, providing full service resorts or destinations with a high level of service in the region of the High Tatras, Low Tatras, Liptov, the Polish Beskids, Silesia, the Czech Beskids, Moravia and Krkonoše Mountains in the Czech Republic, Carinthia and Tyrol in Austria. MARKETING ACTIVITIES IN SLOVAKIA The Group is using a massive marketing communication in all basic types of media – Internet, television, radio and press, and outdoor advertising in several forms – bigboards, citylights, and others. The Company focuses on modern marketing content in various forms. The Company‘s offer also has a very intensive presentation through a not-for-sale image magazine called TATRY MAGAZÍN, which is available in accommodation facilities and tourist facilities as the only lifestyle magazine about the life in the Tatras. In addition to the above-mentioned advertising campaigns, TMR Marketing Department also active and participates in exhibitions and fairs, cooperates in destination management with entities operating in the region, such as the active Liptov Cluster and several district tourism organizations in the regions. Also, cooperation with single district tourism organizations, the origin of which was supported by the Tourism Act, and active subsidy policy of the state in relation to the creation and execution of marketing campaigns for regions and creation of regional products supporting tourism, are important for TMR. USE OF INFORMATION TECHNOLOGY AND INNOVATIONS TMR also keeps in mind the use of innovations and continually improves its communication also via information technology. TMR communicates and informs via individual resort and hotel websites that direct the purchase process to www.gopass.sk. In Poland TMR communicates via website www.szczyrkowski.pl and via www.legendia.pl. All TMR hotels communicate with their clients also via a uniﬁed website www.tmrhotels. sk. From the point of view of a securities issuer and a tourism operator, TMR communicates via its corporate website www.tmr.sk. Information about the Austrian resorts is available at www.moelltaler-gletscher.at and www.muttereralm.at. The Group uses social networks for communicating with clients on a daily basis. In the Group’s key markets (Slovakia, Poland, Czech Republic and Austria), Facebook is the number one in social networks and, therefore, TMR puts emphasis on the development of a wide fan base. At present, the following resort proﬁles are administered (fan groups) – JASNÁ, Vysoké Tatry – The Adventure Mountains, Aquapark Tatralandia, Water park Bešeňová, Szczyrkowski Ośrodek Narciarski, Mölltaler Gletscher, Ankogel, Innsbruck Muttereralm, Legendia, Golf Resort Kaskáda, Golf & Ski Resort Ostravice, TMR hotels a Tatry Mountain Resorts, a.s. and smaller proﬁles of individual projects – Tatranská divočina, Happy End Jasná, Liptov Arena, Tatry Motion ant others. For marketing purposes, the Group also utilizes social networks Instagram, LinkedIn, or a YouTube channel. During the seasons the Group‘s Marketing Department is focused on production of quality live video transmissions and online information from individual resorts that are available on the Internet and thanks to which clients can get a better idea of actual conditions in the resorts. Information about changing snow conditions and operation of resorts is published online from each communication point, on both own and external web portals several times a day. Current information about the resorts is provided on LCD monitors in hotels, LCD screens in the resorts, or the dispatching center radio during the winter season. DIRECT MARKETING AND E-COMMERCE Through the GOPASS program, the Group uses digital tools to address and serve clients in its resorts. The program also includes active direct marketing, which connects the function of the e-shop, the loyalty program and the communication platform via emails, SMS messages and push notiﬁcations. GOPASS actively uses its web application as well as a mobile application available for both popular user platforms. The goal of GOPASS is the digitization of customer service and communication, as well as the facilitation of sales and proﬁling of offers directly to target groups of customers. As of the end of the ﬁscal year 2023, 3.651 million members in total were registered in the program GOPASS. EVENT MANAGEMENT ACTIVITIES DURING 2022/23 The ski season in TMR‘s Slovak resorts kicked off in Jasna on December 3rd. At Štrbské Pleso, the Strategy 27 Strategy season opened on December 10th, while Tatranská Lomnica started its operations on December 17th. At the beginning of the winter season, the most visited Tatra attraction, the Tatra Ice Dome, reopened at Hrebienok. The 10th edition of this successful winter attraction in the High Tatras takes the form of a unique sacred building – the Basilica of the Holy Sepulchre in Jerusalem. A new feature of the 2022/23 season was the opportunity to enter between the ice walls of the structure. Other proven winter events included the Hero Season Trophy at Štrbské Pleso, Tatranská Lomnica, and Jasna, where the winner received a special main prize, Rossignol skis, Chopok Tastes, Experience Dinner with Folk Music at Habarka, and Tatry Ice Master at Hrebienok. In our foreign resorts, traditional winter events included the popular New Year‘s Eve skiing in Szczyrk, the Szczyrk Avalanche event, and the highly successful Women‘s Alpine Skiing World Cup in Spindleruv Mlyn. During the summer season, in addition to other events, the traditional Bear Days took place at Hrebienok at the end of July – a family festival of entertainment and education, with a new silent format that received positive feedback from guests and the community. On the 150th anniversary of the founding of the settlement Štrbské Pleso, the annual event Benátska Noc took place, which, in addition to a cultural and culinary experience, included romantic boating on Štrbské Pleso. In Tatralandia, the animation program followed the theme „Summer all year round,“ and the water park celebrated its 20th anniversary. The season at the Bešeňová water park opened with the musical „Na skle maľované“, marking the ﬁrst open-air musical in Bešeňová. In the Jasná ski resort, the most successful summer event was the „Zbojníci na salaši priehyba“ with Ondrej Kandráč, featuring traditional sheep - Valachian and, in the summer, an original shepherd‘s cottage with a presentation of the history and life on the mountain pasture. This year‘s season at Legendia carried the theme „Summer like a fairy tale“, featuring strengthened animation programs and the introduction of new park characters known from fairy tales: Cinderella, Pirate Jack, Thumbelina, Alice in Wonderland, and others. NOVELTIES Jasná Nízke Tatry (Jasná Low Tatras) In the winter season 2022/2023, several novelties have been added to the Jasná resort. The most signiﬁcant was the new gondola lift from Biela púť to Priehyba, which greatly accelerated and simpliﬁed transportation to Chopok. The operation of the lift at Zadné Dereše was restored, snowmaking was strengthened, and the Happy End and Rotunda restaurants underwent a transformation into self- service establishments. Shuttle transport was strengthened in cooperation with the municipality of Demänovská dolina and DMO Liptov Region, and the possibility to purchase a parking place through GOPASS was introduced. Vysoké Tatry (The High Tatras) The main novelty of the season in Tatranská Lomnica in the High Tatras, skiers could use Comfort parking - the possibility to purchase a limited number of the most favorable parking spaces through GOPASS for a fee, with the certainty of parking even at the time of peak trafﬁc. Skiers with daily ski passes will have parking at a discount, owners of all-season ski passes Šikovná sezónka PREMIUM will park for free. Szczyrk Mountain Resort In the 2022/23 season, Szczyrk Mountain Resort introduced a novelty for ski touring enthusiasts – sunrise or sunset tours, evening descents with headlamps, and the addition of the K2 Skitouring Academy to the resort‘s offerings. For families with children, the Max Bear Academy was available on weekends, as well as 5-day childcare packages combined with an attractive program full of animations. The Ski&Bike Gronie Hotel prepared a special offer, providing accommodation with ski passes, including a fast pass for skiing without waiting. Ještěd The Ještěd Ski Resort has become the ﬁrst with a completely unmanned cash register system. Among the novelties are snowtubing for children, a new trail, and a school for ski mountaineers. The resort introduces a unique Ski Biking experience and an expanded Après-ski bar offering. A signiﬁcant pre- winter season investment was the new snowmaking system on the lower section of the Nová Skalka slope. Špindlerův Mlýn In January, the Women‘s Alpine Skiing World Cup took place in Špindlerův Mlýn. The races in slalom and giant slalom were on the schedule from January 28 to 29, 2023, and they enjoyed signiﬁcant success with the audience. 28 Key Performance Indicators (KPIs) The management uses operating and ﬁnancial key performance indicators (KPIs) to evaluate operating performance of the Group. The Group’s portfolio is divided into seven segments, and for this reason the management monitors performance of each segment. OPERATING PERFORMANCE INDICATORS: NUMBER OF VISITORS As for the performance of the Mountain Resorts segment, the management monitors performance of ﬁnancial indicators based on the number of visitors in terms of used skier days in the winter season, i.e. number of persons visiting a ski area for any part of day or night for the purpose of skiing, snowboarding, or other downhill slide. E.g., a 4-day ticket means four customers in the mountain resorts of TMR. The number of visitors on the cableways in the summer season and visitors in the Leisure Parks segment is measured in terms of sold and used entries. AVERAGE REVENUE PER VISITOR In the segments Mountain Resorts, Leisure Parks, Dining, and Sport Services & Stores, the key indicator is the average revenue per visitor / sold skier day for a given period from sale of ski passes, entries, services, and products. OCCUPANCY In the Hotels segment operating performance is monitored based on percentage occupancy of individual hotels of TMR’s portfolio and of the weighted average of the hotel portfolio. AVERAGE DAILY RATE Average Daily Rate (ADR) is one the key indicators to measure hotel performance. It represents average revenue from per occupied room per given period. The calculation is based on the equation where room revenues are divided by the number of rooms sold. The management monitors ADR of each hotel and of the weighted average of the hotel portfolio. FINANCIAL PERFORMANCE INDICATORS: REVENUES Operating revenues of the Group come from operating activity of the segments Mountain Resorts, Leisure Parks, Golf, Dining, and Sports Services & Stores, Hotels, and Real Estate. EBITDA To describe ﬁnancial performance of the TMR Group, management uses EBITDA (Earnings before interests, taxes, depreciation and amortization) as the key indicator, which represents income net of interest, taxes, and write-offs. EBITDA clearly indicates the Group’s ﬁnancial performance based on operating activities since it eliminates impact of ﬁnancing, as well as accounting decisions of a non-operating character. EBITDA MARGIN In order to evaluate operating proﬁtability of the TMR Group, management utilizes EBITDA margin. It equals earnings before interests, taxes, depreciation and amortization (EBITDA) divided by operating revenues. Since EBITDA excludes depreciation and amortization, EBITDA margin is able to provide the investor a clearer picture of operating proﬁtability. 29 30 The target segment of the Group are tourists from the countries of Central and Eastern Europe, especially from Slovakia, Czech Republic, Poland, and Austria. The visit rate of the Group’s resorts is, to a certain degree, determined by developments in the economic situation on the markets of the countries from which the tourists arrive and in which the Group operates. The global economy continues to slowly recover from the aftermath of the pandemic, the Russian invasion of Ukraine, and increasing living costs. Global growth was at a level of 3.5% in 2022. The year 2023 brought a slight decline to 3%, and the forecast for the next year indicates a decrease of 0.1 percentage points. While inﬂation is gradually coming under control, the headline inﬂation continues to decelerate from 9.2% in 2022, based on a year-on-year comparison, to 5.9% this year and to 4.8% in 2024. Core inﬂation, which excludes food and energy prices, is also expected to decline, albeit more slowly than headline inﬂation, reaching 4.5% in 2024. 1 According to the European Bank for Reconstruction and Development (hereinafter referred to as EBRD), regional growth is expected to slow down from 3.3% in 2022 to an estimated 1.7% year-on-year in the ﬁrst half of 2023, as high inﬂation weighed on household purchasing power. Oil and gas prices have again dropped to pre-war comparable levels. In 2023, average growth in Central Europe and the Baltic states is expected to be 0.5%, and in 2024, it is anticipated to increase to 2.5%. In the southeastern part of Europe, a growth of 2% is expected in 2023, further increasing to 2.8% in 2024. 2 THE SLOVAK REPUBLIC GDP growth in Slovakia eased to 1.2% in 2023. The economy is being supported by the utilization of EU funds and foreign labor. However, the labor market remains tense, with demographic changes pushing the supply of labor downward. The outlook for the eurozone in 2024 is more favorable, and the economic dynamics of the eurozone will accelerate. In Slovakia, household consumption will begin to recover in the coming year as government measures ﬁx energy prices, thereby reducing inﬂation to 3.2%. The utilization of EU funds will be succeeded by the Recovery Plan, boosting the Slovak GDP by 2.7%. The Recovery Plan will drive the economy in 2025, marking the peak of the economic cycle. In 2026 and 2027, economic growth will ease to levels approaching its potential. 3 THE CZECH REPUBLIC According to the Czech National Bank, ), the GDP growth of the Czech Republic slightly decreased in 2023, and in 2024, the economy is projected to grow by 1.2%, with its recovery being tempered by a ﬁscal consolidation package. In 2025, GDP is anticipated to accelerate to 2.8%. Monetary conditions in the Czech economy continue to exert a signiﬁcant restrictive inﬂuence. Interest rates are at a level that slows down the growth of crown-denominated bank loans for households and businesses, hindering the expansion of money supply in the economy. Since the fall of 2022, there has been a signiﬁcant decline in inﬂation. Overall inﬂation dropped from 18% to 6.9% in September 2023, and core inﬂation decreased from 14.7% to 5%. 4 POLAND According to the EBRD, economic activity remained strong in 2022, supported by a growth of 5.1%. However, in the ﬁrst half of 2023, it sharply declined by 0.8%. Limited foreign demand negatively affected exports, while recently stabilized prices brought some relief. Inﬂation peaked in February 2023 at 17.2% and in June at 10.3%, representing one of the highest in the European Union. However, in June 2023, the development of real wages turned positive for the entire economy for the ﬁrst time since the end of 2021. Given the overall limited economic activity in 2023, GDP is expected to grow by only 0.6%. The return to positive real wage growth, low unemployment, and an improvement in consumer sentiment are expected to contribute to GDP growth of 2.7% in 2024. 5 AUSTRIA According to the Organization for Economic Co- operation and Development (the OECD), the GDP growth of Austria has signiﬁcantly slowed, reaching a level of 0.4% in 2023. The OECD predicts economic growth in Austria to be 0.6% in 2024 and 1.5% in 2025. Higher real household wages will support consumption in 2024. Investments will be subdued due to higher interest and personal costs, and export demand will be limited by the global macroeconomic downturn. Higher interest costs and high public debt will require public ﬁnance consolidation through expenditure reduction. 6 Market Analysis and Trends 1 International Monetary Fund (IMF): World Economic Outlook, October 2023: Navigating global divergences, published in October 2023, available at the hyperlink: https://www.imf.org/en/Publications/WEO/Issues/2023/10/10/world-economic-outlook-october-2023. 2 European Bank for Reconstruction and Development (EBRD) Regional Economic Prospects in EBRD Countries of Operations: September 2023, published in September 2023, available at the hyperlink: https://www.ebrd.com/what-we-do/economic-research-and-data/rep.html. 3 Financial Policy Institute of the Slovak Ministry of Finance: Macroeconomic prognosis IFP. 66th meeting of the Committee for Macroeconomic Forecasts, December 2023, available at the hyperlink: https://www.mfsr.sk/sk/ﬁnancie/institut-ﬁnancnej-politiky/ekonomicke-prognozy/makroekonomicke-prognozy/66-zasadnutie-vyboru-makroekonomicke-prognozy-december-2023.html. 4 Czech National Bank: Monetary Policy report – Fall 2023, published in October 2023, available at the hyperlink: https://www.cnb.cz/export/sites/cnb/cs/menova-politika/.galleries/zpravy_o_menove_politice/2023/podzim_2023/download/zomp_2023_podzim.pdf. 5 European Bank for Reconstruction and Development (EBRD): Regional Economic Prospects in EBRD Countries of Operations: September 2023, published in November 2023, available at the hyperlink: https://www.ebrd.com/what-we-do/economic-research-and-data/rep.html. 6 European Commission: OECD Economic Outlook: Economic Outlook Note - Austria: November 2023 Published in November 2023, available at the hyperlink: https://www.oecd.org/economy/austria-economic-snapshot/. 31 REGIONAL TOURISM INDUSTRY The number of international tourist arrivals measured by the methodology of the World Tourism Organization (the UNWTO) reach 87% of pre- pandemic levels by the end of 2023. An estimated 975 million tourists travelled internationally between January and September, more than double the number recorded in the same period of 2022 , though 13% fewer than in 2019. International tourism receipts could reach USD 1.4 trillion in 2023. These results reﬂect the strong recovery of demand in 2023. Europe, the world’s largest destination region, reached 94% of pre-pandemic levels, supported by robust intra- regional demand. International arrivals are expected to reach 1.3 billion overall in 2023, up 33% over 2022 and almost 90% of pre-pandemic levels, in line with UNWTO scenarios published in January. Against this backdrop, international tourism is well on track to fully recover pre-pandemic levels in 2024 despite economic challenges and uncertainty derived from certain geopolitical tensions and conﬂicts. 7 SLOVAK TOURISM INDUSTRY Besides the majority of domestic tourists, Slovakia has historically been mostly visited by the population of the neighboring countries; with the most tourists in 2022 coming yet again from the Czech Republic (2022: 35% or 563 thousand) and Poland (2022: 12% or 190 thousand). In 2022, the number of foreign tourists increased by 177% to 1.6 million. The number of domestic tourists for the year 2022 also increased by 51% to 3.2 million. However, compared to 2019, a quarter of visitors were still missing. The ratio of domestic tourists to foreign tourists is currently 70/30. 8 In summary, from January to November 2023, 5.4 million visitors stayed in accommodation facilities in Slovakia. In year-on-year comparison, this represents an almost 20% increase, with approximately a tenth missing from the overall visitation levels of 2019. The number of foreign guests in Slovakia increased by 32% over the past 11 months compared to the previous year, and the numbers of domestic tourists grew by 13%. 9 EUROPEAN MOUNTAIN INDUSTRY Europe is the relevant market for TMR’s ski business, especially the CEE region. In Europe the biggest skiing destinations are alpine countries – Austria, France, Switzerland, Germany, and Italy. Worldwide, the Alps capture the greatest market share, accounting for 40% of skier visits (skier days). 10 The second most signiﬁcant is North America with 23%. Central and Eastern Europe attracts only 10% of skiers, although this region produces 12% of skiers globally. Since the start of the new millennium global skier destinations have been experiencing a downward trend in the number of skier visits, especially the Western European traditional skier destinations, despite the overall growing global population and a growing number of skier days globally. One of the reasons is aging population and struggle to promote skiing Market Analysis and Trends 7 UNWTO World Tourism Barometer and Statistical Annex, November 2023, available at the hyperlink: https://www.e-unwto.org/doi/abs/10.18111/wtobarometereng.2023.21.1.4 8 Ministry of transport and construction of the Slovak Rep. The accommodation statistics of tourism in Slovakia in 2022, available at the hyperlink: https://www.mindop.sk/ministerstvo-1/cestovny-ruch-7/statistika/ubytovacia-statistika/ubytovacia-statistika-cr-na-slovensku-za-rok-2022. 9 Statistical Ofﬁce of the Slovak Republic. Development of tourism in accommodation establishments in the SR in November 2023, available at the hyperlink: https://bit.ly/4bmfTdb 10 The number of skier visits is measured in terms of skier days; which means one person visiting a ski area for any part of day or night for purpose of skiing, snowboarding, or other downhill slide; e.g. a four-day ticket means four skier visits. 32 Market Analysis and Trends among the young. This introduces an opportunity for the CEE region to grow in provision of ski resorts at least to match the regional demand and even to attract a higher number of foreign skier visits. Among alpine countries, France and Austria have the most major resorts (with over 1 million skier visits) – 13 and 15, respectively each, and Austria with the highest number of skier visits per year 11 - over 43 million whereas Switzerland produces the highest rate of domestic skiers- 35%, with Germany having the highest total number of domestic skiers- 14.6 million. 12 Mountain industry in general is very capital intensive because of essential investments into cableways and other resort facilities, which represent great barriers of entry. Another essential entry criterion is e.g. location since skiing requires a mountainous area with a milder/ colder climate. As for characteristics of ski resorts, they vary in size, ownership, and infrastructure. In some alpine countries, they are usually run by many small private operators who join forces also with local municipalities and market the resort or the ski region, like in Italy, Switzerland, or Austria. In France, on the contrary, operation of large ski resorts especially is concentrated with a major operator. German resorts are also fragmented but considerably smaller than in other alpine countries. 13 Large alpine resorts usually offer state of the art infrastructure, have over 100 km of ski trails, transport capacity of over 50,000 persons/ hour, and more than 30 ski lifts. They also keep reinvesting large amounts into resorts enhancement. The TMR resorts can be compared to medium-sized alpine ski resorts. REGIONAL MOUNTAIN INDUSTRY In the CEE region Russia has the most ski areas - 354, although only around 67 have more than ﬁve lifts and majority have limited infrastructure. Russia is followed by Poland with 264, the Czech Republic with 191 and Slovakia with around 107. Poland’s ski areas are mostly small, suitable for beginners, and Czech ski areas are located up to 1300 m above sea level. Russia had on average for the past ﬁve years the highest number of skier visits in the winter season- 9.5 million, followed by the Poland with 5.5 million, Czech Republic with 5 million and Slovakia with 3.7 million. As for domestic skiers, winter sports in Poland are growing in popularity, as Poland produces the highest absolute number of skiers in the region – 5 million, who make up 13% of population. This proportion grew by more than double since 2013, which presents a great growth potential on this market. Slovakia and the Czech Republic produce a much higher percentage of skiers – 18% and 21%, although there are much more Czech skiers in the absolute number – 2.2 million. Slovakia has a competitive advantage on the supply side in the region since 80% of the geographical area is situated above 750m above sea level; and the area includes the highest mountain range in the region- the Tatras, with the highest peak of 2,655 m- Gerlachovský štít. 14 The regional mountain industry exhibits room to grow, in comparing to mature alpine resorts. Observable trends besides investing in resort infrastructure and equipment include extending the variety of services in mountain resorts, such as ski schools, ski service, and shops, as well as non-skiing activities, such as après ski bars, nightlife, restaurants, wellness, family activities and events. As for summer activities, the focus is on adrenaline sports, summer family events, and cycling, evidenced by an increase in development of resorts, cycling tours, and by increased marketing. Mountain resorts tend to keep expanding technical snowmaking. Also, mountain resort tourists tend to be attracted to package deals on lodging and lift tickets, thus this trend is expected to continue. Another trend in mountain resorts is observed in consolidating marketing activities of a mountain destination or a region and mutual cooperation of mountain resort operators. District tourism organizations in Slovakia for example join together in destination management. One can observe these trends in all the locations operated by TMR. TMR is also cooperating with other mountain resort operators in marketing efforts. No. of National Skiers Skiers as % of Population Thousands 0% 5% 10% 15% 20% 25% 30% 35% 40% 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 Skiers by Country 11 Laurent Vanat: 2022 International Report on Snow & Mountain Tourism. 14th edition published in April 2022, available at the hyperlink: https://www.vanat.ch/RM-world-report-2022.pdf. 12 Ibidem 13 Ibidem 14 Laurent Vanat: 2022 International Report on Snow & Mountain Tourism. 14th edition published in April 2022, available at the hyperlink: https://www.vanat.ch/RM-world-report-2022.pdf. 33 Market Analysis and Trends SLOVAK MOUNTAIN TOURISM On the Slovak mountain tourism market TMR is the clear leader in terms of the number of resorts, ski lifts, transportation capacity, km of ski trails, and lifts elevation. Mountain resorts in Slovakia are mostly operated by small private operators in cooperation with local municipalities and national parks. There are around 100 ski areas in Slovakia, and 47 major ski resorts (3, 4, and 5 quality) in Slovakia. When comparing individual resorts and their km of ski trails, TMR’s resorts Jasná Nízke Tatry (51km) and Vysoké Tatry – Tatranská Lomnica, Starý Smokovec a Štrbské pleso (24km) are the biggest ones in Slovakia, followed by Veľká Rača Oščadnica (14km), Skipark Kubínska Hoľa (14km), Vrátna free time zone (13km), and Winter Park Martinky (13km). 16 Mountain Tourism - Country Comparison 15 15 Ibidem. 16 skiresort.info, resort websites Country No. of Ski areas Number of major resorts (>1 mil Skier Visits) Skier visits Proportion of domestic skiers (in % population) Number of do - mestic skiers % foreign skiers Alpine countries 135 543 000 Austria 253 15 43 580 000 34,0% 2 960 000 66% France 317 13 40 656 000 13,0% 8 574 000 27% Italy 349 7 22 320 000 12,0% 7 266 000 35% Switzerland 181 6 21 967 000 35,0% 2 959 000 35% Germany 498 0 7 020 000 18,0% 14 607 000 10% United States 470 6 55 492 000 8,0% 25 017 000 6% Eastern Europe 26 244 000 Czech Republic 191 0 4 960 000 21,0% 2 236 000 30% Slovenia 44 0 1 190 000 14,0% 299 000 17% Ukraine 54 0 1 400 000 2,0% 1 114 000 5% Poland 264 0 5 531 000 13,0% 4 937 000 15% Russia 354 0 9 467 000 3,0% 4 275 000 5% Slovakia 107 0 3 696 000 18,0% 979 000 25% Km of Trails of Leading Ski Resorts in Slovakia Jasná, Nízke Tatry Vysoké Tatry Ski Park Kubínska hoľ a Vrátna Free Time Zone Winter Park Martinky Drienica - Lysá Veľká Rača Oščadnica Ski Park Ružomberok Park Snow Donovaly Ski Bachledová 51 25 14 13 13 9 14 12 11 11 34 AUSTRIAN MOUNTAIN TOURISM Austria is one of the European Alpine countries with the highest number of ski resorts with ski visits over 1 million per year also thanks to its lift interconnections between ski areas. It also operates the most ski lifts in the world, over 3,000, together with France and the U.S. It also has one of the highest portions of skiers in the population with 34%, and one of the highest number of skier days – more than 43 million (5-year average), 66% of which are foreign, the most foreign skiers in the world. The visit rate has been steadily growing despite struggles in other western markets. The Austrian ski operators have been heavily investing into development of ski infrastructure for the past 15 years. Some resorts have joint marketing efforts, which allow them a higher pricing, and the number of interconnected resorts has been increasing in the last couple of years. 17 TMR’S HOTEL MARKET TMR’s hotels are located in TMR’s mountain resorts, golf resorts, in water parks Tatralandia and Bešeňová, and most of the clients utilize TMR hotels’ services when visiting the resorts. That’s why TMR hotels compete for clients with other lodging facilities in the given resort and its surrounding. In the winter season especially, performance of the hotels is closely linked to performance of the mountain resorts. In water park Tatralandia there is only one lodging facility, thus TMR holds a monopoly here. In the mountain resorts there are other mostly private operators of resort hotels, inns, bed & breakfasts, apartments, and cottages. The two leased golf hotels in the Czech golf resorts are the only ones in the respective golf resorts, thus their location is a great competitive advantage within the area, and their visitors tend to stay here. Categories of TMR hotels range from 2-star to 4-star. In the resorts there is a greater competition in the lower category lodging than in the upscale segment. The trend in the resorts lodging sector is to cooperate closely with the mountain resort operators in order to attract clients with affordable bundled stay packages. The hotel market in TMR’s resorts is not saturated since TMR had invested a large amount of capital in recent years, and the resorts attract new investors. REGIONAL TRENDS IN WATER PARKS In Slovakia there is around a 30 water parks and thermal spas. Water parks Tatralandia and Bešeňová ranks among the top three parks in terms of size, visit rate and services offered. The number of visitors primarily depends on the variety and quality of services offered. As for the target market, aquaparks observe an increasing visit rate and an increasing share of solvent clients who are willing to pay more for their aquapark visits and require higher quality and constantly changing customized services. In this aspect, TMR’s loyalty program, Gopass, helps. Another observable trend is the comeback of Slovak clients who now represent the majority as opposed to the past till 2009, when clients from Poland comprised the majority. Also, aquaparks observe a growing number of families with children that seek out a wide scale of activities, also as addition to water attractions. Demand for quality requires quality personnel, which puts pressure on personal costs for the aquapark operators as aquaparks are mainly a seasonal and weekend business. Solutions can be found in automation, and TMR utilizes its winter employees from the mountain resorts in the summer season of the leisure parks. The trend also includes continuing investments into parks’ development, especially all-year attractions. All-year aquaparks carry a competitive advantage as they do not depend on weather. 18,19 Competition in the neighboring countries is present especially closer to the Slovak border- there are ﬁve aquaparks close to Slovakia in Poland, nine in the Czech Republic, and seven in Hungary. REGIONAL TRENDS IN LEISURE PARKS The CEE region exhibits absence of leisure parks on a scale of Western Europe, where most of 300 parks are located, with annual revenues of around EUR 4.5 bn. There are 30 parks in Europe with an average visit rate of 1-2 mil. visitors. In Poland there are about 45 leisure parks of different size and theme. They may be divided into a number of groups depending on their main theme – luna parks, western theme parks, fairy tale theme parks, dinosaur adventure parks, and miniature theme parks. Majority are so-called dino parks (19) and miniature parks (13). These should be treated as a substitute rather than direct competitors to TMR’s Silesian Amusement Park. Besides Legendia - Silesian Amusement Park, there is only one other amusement park of comparable size and with a comparable number of attractions, located also in the Silesia region. REGIONAL TRENDS IN GOLF RESORTS In the Czech Republic where TMR operates two golf resorts, there are around 100 golf resorts. Golf & Ski Market Analysis and Trends 17 Laurent Vanat: 2022 International Report on Snow & Mountain Tourism. 14th edition published in April 2022, available at the hyperlink: https://www.vanat.ch/RM-world-report-2022.pdf. 18 Guests are more picky. The big 3 is doing well, though. Trend. August 3, 2019. https://www.etrend.sk/trend-archiv/rok-2019/cislo-29/velkej-trojke-sa-dari-a-nielen-jej.html 19 The Best Water Parks in Slovakia: Water Slides, Wellness, and Luxury Accommodation – Where Will You Go? Zoznam.sk, January 27, 2024, available at the hyperlink: https://plnielanu.zoznam.sk/najlepsie-vodne-parky-na-slovensku-prehlad/. 35 Market Analysis and Trends Resort Ostravice and Golf Resort Kaskáda both belong to the top 10 Czech golf resorts. 21 In neighboring Slovakia there are over 20 golf resorts and 55 in Austria. The trends in the regional golf industry include focus on technology since online presence, functional reservation systems, or rating websites are essential for golf resort operators. Promotion of the resorts is vital, thus the resort operators organize professional tournaments and provide ancillary services. Visitors put importance on the quality of accommodation and dining services in the resorts. Another decision factor for golf players is the access to tee times. Also, golf players’ demand for golf travel keeps increasing. Half of European golf players travel for golf individually and half use travel agency services, mostly elderly players. REGIONAL TRENDS ON THE REAL ESTATE MARKET The performance of the regional real estate market depends on the stability of demand, which is impacted by macro-economic development, the job market development, income growth, and access to bank ﬁnancing. The real estate market cooled down in 2022 due to higher interest rates, but also a few percent drop in people‘s real wages due to high inﬂation. 22 We are experiencing a similar situation in 2023 when the European Central Bank raised the base interest rate several times throughout the year. In the past years, the recreational real estate market in the Jasná resort had been booming, with several new projects, such as the completed project of a 5-star hotel complex, which is also set to become the largest hotel in Central Europe. 23 Additionally, in Jasná, the Central Jasná Resort is being constructed under the TMR brand, with an expected completion date in 2027. 24 In the High Tatras, speciﬁcally in Tatranská Lomnica, a project for the Sasanka Apartment House is in preparation. 25 21 10 trends in golf travelling, what are the trends in 2018? March, 8, 2018. www.golfextra.cz/detail/3477/10-trendu-cestovani-za-golfem-co-frci-v-roce-2018 22 What changes do you expect in the real estate market? What contributes the most to its cooldown? https://www.trend.sk/trend-archiv/ponuk-pribuda-zaujemcovia-miznu-trh-nehnutelnostami-ochladzuje 23 Another large luxury hotel is to be built in Jasná https://myliptov.sme.sk/c/22205624/v-jasnej-ma-vyrast-dalsi-velky-luxusny-hotel.html 24 In Jasná, they are opening one of the largest hotels in Central Europe https://index.sme.sk/c/23198906/jasna-damian-bude-jeden-z-najvacsich-hotelov-v-strednej-europe.html. 25 The mountain giant is planning a 20-million investment in the Tatras, building luxury apartments. https://hnonline.sk/ﬁnweb/ekonomika/96125973-horsky-gigant-planuje-20-milionovu-investiciu-v-tatrach-postavi-luxusne-apartmany-galeria RISK FACTORS AND RISK MANAGEMENT 38 Main risks that the Group faces can be divided into market, ﬁnancial, and operating risks. The management has the complete responsibility for deﬁning and controlling the Group‘s risks. All these factors are either external, which means they are completely beyond the management’s control, or internal risks, which can be at least partially controlled by the management. The most signiﬁcant risks are described below: MARKET RISKS BUSINESS CYCLE Current operations of the Group are focused on the Slovak, Czech, Polish, and Austrian market, although majority of the Group’s clients come from the whole CEE region, and thus the Group’s operations are mainly dependent on the level of economy of the Slovak and Czech Republic and countries of the CEE region. Majority of TMR’s revenues depend on the number of visitors to TMR’s resorts and hotels. The vacation choices of TMR’s clients also depend on the business cycle of the economy, each country’s economic growth, and the level of their discretionary income, while the last two factors are highly correlated. Development of such macroeconomic factors is an external risk for TMR. Since the majority of visitors to TMR’s resorts and hotels come from various countries, each of which has its own unique macroeconomic proﬁle, operations of TMR can be heavily affected by worsening of the economic situation on these markets. The risk of a downward business cycle is partially managed by reasonable pricing strategies and effective marketing campaigns on the relevant target markets (see Strategy). Developments in the business cycle in general may adversely affect the Group‘s operating activities, ﬁnancial performance, and ﬁnancial prospects. In addition, a signiﬁcant risk within the Central and Eastern Europe region is the military conﬂict in Ukraine, which may have an impact on the attendance of the Group‘s resorts and hotels, since the countries in which the Group has resorts and hotels are near the borders of the military conﬂict, i.e. Ukraine. The group is affected by the conﬂict directly due to the loss of visitors from Russia and Ukraine. However, before the events of the war and the introduction of sanctions, the group did not consider the Russian or Ukrainian market to be essential. Although the loss of visitors from these regions has a negative impact, it is a signiﬁcantly minority group of visitors. The group is also affected by the conﬂict indirectly through Slovakia‘s economy (which is strongly export-oriented) as well as the impact on the European Union, mainly due to the related increase in inﬂation, the prices of materials and commodities (or their reduced availability) or existing risks related to the interruption of oil supply or natural gas from Russia and/or a material increase in the price of oil or natural gas. TMR‘s revenues from tourism could decrease, especially if it could not keep up with inﬂation, or reﬂect the increased prices of entrances into prices for accommodation or tickets to resorts. SEASONALITY TMR’s business model is primarily seasonal, although TMR’s strategy involves building and promoting all-year vacation destinations. The busiest months are from January through March, especially in the number of skiers, and July and August in the leisure parks and the Vysoké Tatry resort. The management is continuously working on attracting visitors in the off-season, e.g. by adding snowmaking guns, running vibrant marketing campaigns, offering bundled stay packages, and by organizing events in the resorts and hotels. Besides the water parks Tatralandia and Bešeňová providing warm thermal water, the Tropical Paradise project in water park Tatralandia was a major step towards minimizing the effects of seasonality in the aquapark since visitors of Tropical Paradise can experience summer temperatures in any season. By acquiring the Alpine resort located on a glacier, Mölltaler Gletscher, the skiing winter season got longer. The golf resorts operate the golf courses from the spring till the fall, although in the Ostravice resorts provides lit up cross country skiing tracks in the winter. WEATHER AND CLIMATE RISK The number of TMR’s visitors also depends on a successful winter season, i.e. on favorable weather conditions in terms of abundance of natural snow and temperatures below zero degrees Celsius. TMR manages the risk of low snowfall with the already- mentioned snowmaking facilities. The extensive scope of coverage by technical snowmaking gives TMR an absolute advantage among competitors in Slovakia in case of shortage of natural snow. Historically, the Jasná Nízke Tatry resort has had an average of 54 cm of snow coverage during the winter season and the Vysoké Tatry resort 59 cm 1 . Drier winters may increase the cost of snowmaking. On the other hand, warmer weather may hinder Risk Factors and Risk Management 1 A 7-year average on the peak of the Jasná and Vysoké Tatry - Tatranská Lomnica a Štrbské Pleso resorts. Source: www.onthesnow.sk 39 Risk Factors and Risk Management the snowmaking, since freezing temperatures are needed, and it may reduce the scope of skiing area. At the same time, the resorts are located in a mountainous area with a generally colder climate. Also, in comparing with other Slovak mountain resorts, TMR’s resorts have start and terminal cableway stations at the highest altitudes. The Polish SON resort, on the other hand, has an advantage in facing north and towards northwest winds. The Austrian Mölltaler Gletscher resort is located on an Alpine glacier, which guarantees a much longer period with snow coverage. The season on the Mölltaler glacier lasts from mid June till following May with the snow coverage reaching 450 cm. Warm thermal water in Tatralandia and in Bešeňová partially offsets the cold weather effects, but Tropical Paradise in Tatralandia eliminates dependence on warm weather completely. As for the summer season in the mountain resorts and the amusement park, favorable weather in the summer months is essential for hiking tourists and visits of amusement parks. The extent of the risk exposure is detailed in Consolidated Financial Statements. COMPETITION The Group’s results also depend on how successfully the Group deals with competition. In the segment of Mountain Resorts TMR competes for visitors on domestic oligopolistic markets in Slovakia, Poland and the Czech Republic, with the position of a leader in terms of size and the range of services. In Austria Mölltaler Gletscher is one of eight ski resorts on a glacier, and among all the Austrian resorts, as well as within Europe the TMR Group faces monopolistic competition with a large number of competitors that provide a wide supply for visitors. TMR utilizes its high-quality services, massive capital investments in resort development, reasonable prices in comparing to alpine resorts, patriotism, and locality with the goal of attracting visitors. Moreover, TMR capitalizes on its competitive advantage of natural monopoly in terms of the strategic location of its key resorts in the Tatras in the highest mountain range in the region to the East and North. In the Golf segment the resorts operated by the Group rank among the top golf resorts in Czechia. In the Leisure Parks segment TMR is also among the top players in the local market Base elevation (m a.s.l.) Summit elevation ( m a.s.l.) 880 1080 805 1400 1025 915 630 720 600 545 540 470 510 2004 2003 2196 2093 1480 1360 1236 1396 1550 1209 770 912 830 0 500 1000 1500 2000 2500 Base & Summit Elevation of Slovak Ski Resorts. 40 Risk Factors and Risk Management of aquaparks, although visitation of aquaparks also depends on the travel distance for the given visitor. Among theme parks Legendia Silesian Amusement Park is one of two top players in the region. The hotels from TMR’s portfolio, restaurants, sports stores and services, and real estate projects of TMR capitalize on their attractive locations directly in the TMR resorts and on synergies within the Group and provide mostly upscale quality. Partially, TMR manages this type of risk with marketing tools, by utilizing its tangible and intangible assets, such as its strategic position in the Tatras mountain range, and by a well-deﬁned corporate strategy described in the Strategy section. OCCUPANCY AND AVERAGE DAILY RATE The Group’s proﬁtability also depends on the occupancy rate of its own hotels and lodging facilities in the resorts. TMR actively works with local lodging operators in marketing the resorts in order to increase occupancy and consequently the number of resort visitors. TMR hotels’ results depend on the occupancy rate and average daily rate per room (ADR). To increase these indicators, it is essential for TMR to invest heavily into development and renovation of its lodging facilities. Besides aggressive marketing activities for peak seasons, TMR actively works to increase occupancy and ADR also during the off-season by marketing conference space to corporate clientele, offering special seasonal or weekend lodging packages in conjunction with events in the hotels or resorts, e.g. live cooking show, culinary festivals, romantic spa weekends, serving “brain food” for corporate clientele, etc. REAL ESTATE MARKET One of the operating segments of TMR is focused on real estate, as described in the Company Proﬁle section. The revenues of this segment depend on sale and/or lease of residences, lodging facilities, and commercial space in the real estate projects. Even though the current performance of the Group does not depend on the success of this segment, its growth depends on the state of the real estate market, which is an external risk factor. This industry is exhibiting an upward trend for the last couple of years (see Market Analysis and Trends). In case of realization of all the projects, TMR can mitigate the risk of low apartment sales with revenues from lease of space, facility management, and operation. Also, TMR intends to capitalize on synergies from other segments, such as marketing, procurement of inventory, human resources, etc. RISK OF UNSTABLE PRICES, ESPECIALLY OF ELECTRICITY AND NATURAL GAS The Group‘s costs are affected, among other things, by the consumption of energy, natural gas, fuel and water. These are directly reﬂected in the operating costs of resorts and hotels, for example from the point of view of electricity consumption in the operation of cable cars and snowmaking equipment. As of preparing the annual report, the prices of electricity and natural gas within the European Union are stabilized, and there are no signiﬁcant ﬂuctuations. Currently, energy prices do not signiﬁcantly constrain the Group‘s ability to operate its facilities. If, in the future, the prices of electricity (as well as natural gas, fuel, water, and other input sources) were to increase signiﬁcantly in the coming years, it could have a signiﬁcantly negative impact on the operational activities, market position, sales, ﬁnancial performance, and ﬁnancial outlook of the Group. FINANCIAL RISKS EXCHANGE RATES Volatility of exchange rates in relation to euro is an external risk that affects the Group’s revenues because majority of TMR’s foreign clients come from countries outside of Eurozone (mainly the Czech Republic and Poland). That is why their travel choices are impacted by currency movements. Appreciation of euro in respect to Polish zloty, for instance, negatively impacts the number of visitors from Poland. As a result of ownership of subsidiaries in Poland and in the Czech Republic, the Group also is also volatile in respect to exchange rates changes of the local currencies to euro. Investments into the resorts in terms of technology, equipment, renovation, and procurement of inventory are settled in euros, Czech crowns, and Polish zloty. Investments settled in Polish zloty and crowns are thus exposed to volatility of exchange rates. The value of the investment in Melida a.s., which operates the Špindlerův Mlýn resort, is converted from Czech crowns into euros. For more information, see Consolidated Financial Statements. INTEREST RATES Volatility of interest rates may have a direct impact on the value of the Group’s interest-earning assets and interest-bearing liabilities. The extent of this risk is equal to the amount of interest-earning assets and 41 Risk Factors and Risk Management interest-bearing liabilities, where the interest rate at maturity or at the time of a rate change is different from the current interest rate. The period of a ﬁxed rate for a ﬁnancial instrument therefore reﬂects the risk for ﬂuctuations in interest rates. The Group’s loan portfolio during 2022/23 consisted mostly of short- and long-term bank debt with ﬁxed and variable rates based on 3-month and 12-month EURIBOR rates. The Group considers the variable interest rate to manage the interest rate risk automatically. In case of economic expansion, EURIBOR grows, but at the same time economic performance of the population should grow, and the Group should be more proﬁtable. In case of economic recession, it is the exact opposite. As EURIBOR currently has positive values, the variable rates do affect the ﬁnancial performance and cash ﬂow sensitivity. Besides bank debt, the Group has also issued bonds with payment of regular ﬁxed coupon which is in no way correlated to any variable rates. Loans granted by the Group earn interest at ﬁxed interest rates, thus the Group mitigates the risk of interest rate ﬂuctuations downward. Exposure to this risk is detailed in Consolidated Financial Statements. CREDIT RISK The Group’s primary exposure to credit risk arises through its trade receivables, lease receivables, other receivables and advances and loans provided. The amount of credit risk exposure is represented by the carrying amounts of these assets in the balance sheet if no form of guarantee is issued. The carrying amount of receivables, advances and loans provided represents the maximum accounting loss that would have to be recognized if the counterparty completely failed to perform its contractual obligations and all collaterals and guarantees would be of no value. Therefore, this value highly exceeds the expected losses included in the provision for unrecoverable receivables. Before the conclusion of major contracts, the Group’s management evaluates the credit risk related to the counterparty at its regular meetings. Provided material risks are identiﬁed, the Group withdraws from concluding the contract. The extent of the risk exposure is detailed in Consolidated Financial Statements. LIQUIDITY Liquidity risk arises in the general ﬁnancing of the Group‘s activities and ﬁnancial positions. It includes the risk of being unable to ﬁnance assets at an agreed maturity and interest rate and inability to liquidate assets at a reasonable price in a reasonable time frame. Individual segments in the Group use different methods of managing liquidity risk. The Group‘s management focuses on managing and monitoring liquidity of each of its controlled companies. In order to manage liquidity, in 2009 the management changed the accounting year for the ﬁnancial year ending on October 31. In the ﬁrst half of its ﬁnancial year the Group has the winter season representing around 60% of the Group‘s income. According to the development in the ﬁrst half-year, the Group is able to affect income and expenses well in advance to keep sufﬁcient liquidity. The seasonality in the resort of Vysoké Tatry is balanced also by a strong summer season in this resort, and it provides more stable liquidity throughout the year. Payment of bond coupons adds to the liquidity risk. The Group‘s risk of insufﬁcient liquidity is currently potentially increased due to the rise of EURIBOR rate, which increases the Group’s debt service from external bank loans. The extent of the risk exposure is detailed in Consolidated Financial Statements. BONDS As of the end of the reported period TMR has bonds issued in several tranches. Currently, the capital structure in terms of the debt-to-equity ratio may cause TMR difﬁculties in obtaining other external ﬁnancing to ﬁnance future investments into its resorts or acquisitions. In case these difﬁculties in obtaining further ﬁnancing should occur, TMR’s growth rate may slow down. It is not certain whether the Group will be able to obtain external ﬁnancing, or whether external debt will be obtained under favorable conditions. Inability to receive or a delay in receiving further external debt as well as ﬁnancing terms, which differ from assumptions, may have a major negative impact on the operations, market position, sales, ﬁnancial performance and ﬁnancial outlook of the Group. For more information see Consolidated Financial Statements. 42 OPERATING RISKS Operating risk is the risk of loss resulting from embezzlement, unauthorized activities, errors, mistakes, inefﬁciency or system failures. This risk arises from all activities of the Group and is faced by all segments within the Group. Operating risk also includes legal risk. The Group‘s goal is to manage the operating risk to avoid ﬁnancial losses and protect the reputation of the Group while maintaining optimal costs and avoiding measures that would hinder initiatives and creativity. The Group‘s management has the main responsibility for implementation of controls related to the management of operating risk. This responsibility is supported by the development of standards for the management of operating risk common for the whole Group. The operational risk is managed by the system of directives, meeting minutes and control mechanisms. The Group’s management strives to eliminate all operating risks by regular checks. SAFETY Safety is of great concern to TMR since the Group operates in types of business with varied safety risks. TMR is obliged to mitigate safety risk and guard its clients and employees in the following situations: In the course of developing, maintaining, and operating cableways, lifts, trails, swimming pools, toboggans, rollercoasters, golf courses, and other resort facilities In relation to health risks when providing dining services in the restaurants and hotels In relation to operations of the lodging facilities Any accidents and incidents during promotional and collaborative events In relation to compliance with regulations governing provision of ready-made products and services to clients Risk Factors and Risk Management 43 Risk Factors and Risk Management IT SECURITY The Group’s business activities substantially depend on information technology (IT) – with ticket sales platforms; on lift turnstiles; cableway and snowmaking equipment; and in shops, in the Gopass loyalty program and e-shop, restaurants, and hotels. Therefore, the Group takes extraordinary measures to mitigate the risk of break-down with high quality software and hardware components and a strong IT support in order to be able to operate under contingency mode. CAPITAL INVESTMENTS The ﬁrst pillar of TMR’s corporate strategy is based on organic growth through capital investments into its resorts and hotels. Implementation of this strategy requires major capital. Each investment project is carefully analyzed under different scenarios. Despite this fact, there is risk that some of the ongoing or planned projects may be less proﬁtable than previously planned, or even at loss. Unproﬁtable investments may negatively impact the operations, market position, sales, ﬁnancial performance, and ﬁnancial outlook of TMR. ACQUISITIONS TMR plans to strengthen its position on regional markets also through new acquisitions. A risk exists that acquisitions of other entities will negatively impact future income and results of TMR, speciﬁcally in case of choosing the wrong acquisition target, unfavorable terms, or inability to receive permissions from relevant regulators (especially failure to obtain permission from the antimonopoly bureau). In case such event should happen, it may negatively impact the operations, market position, sales, ﬁnancial performance, and ﬁnancial outlook of TMR. ENVIRONMENTAL ISSUES The Group’s capital investments in protected outdoor areas may be subject to approvals of various governmental and environmental bodies. Since the Group conducts its operations mostly in mountainous areas, part of which belong to protected national parks, some capital investment projects may be subject to approval of various governmental bodies. Each new investment project in such area related to expansion of snowmaking, construction of a cableway, etc. must ﬁrst undergo the Environmental Impact Assessment (EIA), one of main instruments of the international environmental policy of sustainable development, and it must be approved by relevant bodies of environmental protection. TMR’s resorts in Slovakia are located in already urbanized areas and comply with all environmental regulations, although development of the SON resort in Poland as well as planned projects in Slovakia and Czechia still need to undergo the EIA process. FINANCIAL PERFORMANCE REVIEW FOR THE YEAR 46 Financial Performance Review for the Year KEY RESULTS Total consolidated revenues increased by 42.6% to EUR 188.379 mil. (132.119) Consolidated operating proﬁt before interest, tax, depreciation and amortization (EBITDA) amounted to EUR 59.366 mil. (33.696) TMR operated with EBITDA margin of 31.5% (25.5%) Net consolidated loss amounted to EUR -0.548 mil. (-11.947) Net consolidated earnings per share amounted to EUR -0,074 (-1,694) The number of visitors to Mountain Resorts increased to 2.928 mil. (2.660); Leisure Parks recorded 1.880 mil. (1.416) visitors Selected Consolidated Audited Results (IFRS) in €'000 FY 2022/23 FY 2021/22 Sales 188 379 132 119 Total Revenues 188 379 132 119 Consumption of Material and Goods -24 687 -19 070 Personnel and Operating Costs -107 933 -84 681 Other Gain/ Loss 3 607 5 328 EBITDA 59 366 33 696 EBITDA Margin 31,5% 25,5% Depreciation & Amortization -25 637 -23 388 Depreciation of right-of-use of leased assets -5 844 -5 863 Gain on bargain purchase 0 13 162 Impairment of non-current assets -4 528 -5 977 EBIT 23 357 11 630 Interest income calculated using effective interest rate 238 47 Financing costs -27 574 -22 915 Net proﬁt / (loss) on ﬁnancial operations 6 889 -2 356 Share of proﬁt or (loss) from disposal of subsidiaries 0 -482 Share of proﬁt or (loss) on equity-accounted investees -355 -163 Pre-tax Income 2 555 -14 239 Current Income Tax -1 919 -776 Deferred Income tax -1 184 3 068 Net Loss -548 -11 947 Total Comprehensive Income -1 094 -12 500 EPS (€) -0,074 -1,694 47 FINANCIAL PERFORMANCE REVENUES The Group‘s total consolidated revenues for the past ﬁnancial year increased by almost 42.6% to EUR 188.379 mil. (132.119). The result was positively impacted mainly by the higher visit rate at the resorts compared to the last ﬁnancial year, which was affected by anti-pandemic measures that restricted full operations in Slovak and Austrian resorts. The positive impact on revenues was also attributed to the increase in the average price through effective ski pass pricing management. EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) Another TMR’s key ﬁnancial performance indicator – EBITDA – amounted to EUR 59.366 mil. (33.696); which represents an 76.2% increase result compared to the previous ﬁnancial year. The increase is mainly due to reason that the Group ski resorts, leisure parks and hotels during the winter season operated with lifted restrictions. Consumption of materials increased by 29.5%; personnel and operating costs were increased by 27.5% yoy, due to increase of energy prices, which was then reﬂected in the increased prices of goods and services. The increase in costs was also due to market pressure to raise labor prices, an increase in the minimum wage, and the recruitment of new employees. TMR’s operating proﬁtability ratio (EBITDA margin) reached the level of 31.5% (25.5). DEPRECIATION AND AMORTIZATION, IMPAIRMENT LOSS The depreciation and amortization costs slightly increased to EUR 25.637 mil. (23.388) mainly due to completed investments. Depreciation of the carrying amounts of property, plant and equipment acquired through leasing amounted to 5.844 mil. EUR (5.863). For more information on provisions for ﬁxed assets and proﬁt from the bargain purchase, see Consolidated Financial Statements, Notes 5, 14, 15, 16. FINANCIAL ACTIVITY Interest income of EUR 0.238 mil. (0.047) mainly stemmed from loans granted, earning ﬁxed interest rates. Interest expense rose to EUR 27.574 mil. (22.916); it includes mainly loan expenses and expenses of the issued bonds (see Consolidated Financial Statements, Note 12). NET INCOME The Group recognized a net consolidated loss in the amount of EUR -0.548 mil. (-11.947). Loss attributable to owners of the parent company amounted to EUR -0.497 mil. (-11.361). EPS reached EUR -0.074 (-1.694). Total comprehensive income after accounting for foreign currency translation reserve and gain on cash ﬂow hedging amounted to EUR -1.094 mil. (-12.500). The parent company reported a net proﬁt of EUR 2.712 mil. (3.287). Financial Performance Review for the Year Key Operating Results Revenues EBITDA EBITDA Margin in €'000 FY 2022/23 FY 2021/22 Change yoy (%) FY 2022/23 FY 2021/22 Change yoy (%) FY 2022/23 FY 2021/22 Change yoy (p.p.) Mountain Resorts 70 832 50 932 39,1% 29 933 17 937 66,9% 42,3% 35,2% 7,0% Leisure Parks 23 344 16 861 38,5% 9 374 5 562 68,5% 40,2% 33,0% 7,1% Golf 855 740 15,5% -81 173 -146,9% -9,5% 23,4% -32,9% Dining 27 474 19 501 40,9% 5 702 2 790 104,4% 20,8% 14,3% 6,5% Sports Services & Stores 6 724 5 321 26,4% 1 365 541 152,3% 20,3% 10,2% 10,0% Hotels 55 962 37 709 48,4% 11 958 8 299 44,1% 21,4% 22,0% -0,6% Real Estate 3 188 1 055 202,2% 1 116 -1 605 169,5% 35,0% -152,1% 187,1% Total 188 379 132 119 42,6% 59 366 33 696 76,2% 31,5% 25,5% 6,0% RESULTS BY SEGMENTS 48 Financial Performance Review for the Year 1 The visit rate in Mountain Resorts in the summer season is measured in terms of used entry tickets to cableways and in the winter season in terms of used skier days, i.e. the number of persons that visited a mountain resort during any part of the day or night for the purpose of skiing, snowboarding, or other downhill slide. E.g., a 4-day ticket means four skier days in Mountain Resorts. 2 The Group is currently not observing the visit rate and the average revenue per visitor from entries, dining, and sports services and stores in the golf resorts. Sports Services & Stores Dining 0,00 € 1,00 € 2,00 € 3,00 € 4,00 € 5,00 € 6,00 € 2018/19 2019/20 2020/21 2021/22 2022/23 KEY PERFORMANCE INDICATORS (KPIS) The visit rate in the Mountain Resorts segment in 2022/23 increased year-over-year by 10.1% to 2.928 mil. (2.660) visitors/ skier days 1 , whilst it includes skier days from the Austrian resorts of Mölltaler Gletscher, Ankogel and Muttereralm. On the like-for-like basis the visit rate increased by 14%. This positive result reﬂects the impact of the easing pandemic measures compared to the previous ﬁnancial year, when the resorts were operating in restricted regime. Average revenue per visitor per day increased by 21.2% to EUR 20.02 (16.52). Leisure Parks reported an 25,7% rise in the visit rate to 1.880 mil. (1.416). The increased number of visitors is due to ease of pandemic measures in segment and moreover it includes visitors of whole winter season of water park Bešeňová. The average revenue per visitor also rose, by 3% to EUR 11.15 (10.83). The resort clients spent more in dining facilities on and off the slopes and in the leisure parks. Average dining revenues thus increased by 23.5% to EUR 5.47 (4.43). Sports Services & Stores, which largely depend on performance of the resorts, reported average revenues per visitor make up 7.4% to EUR 1.48 (1.38). 2 Average revenue per visitor Visit rate Visit rate Average revenue per visitor 0 € 5 € 10 € 15 € 20 € 25 € 0 500 000 1 000 000 1 500 000 2 000 000 2 500 000 3 000 000 3 500 000 2018/19 2019/20 2020/21 2021/22 2022/23 Average revenue per visitor Visit rate Visit rate Average revenue per visitor 0 € 2 € 4 € 6 € 8 € 10 € 12 € 14 € 16 € 0 200 000 400 000 600 000 800 000 1 000 000 1 200 000 1 400 000 1 600 000 1 800 000 2 000 000 2018/19 2019/20 2020/21 2021/22 2022/23 Mountain Resorts‘ KPIs Leisure Parks‘ KPIs Average revenue per visitor in selected segments 49 50 Financial Performance Review for the Year The weighted average occupancy of the TMR hotel portfolio increased by 4.9 percentage points to 59.4% (54.5). The weighted average daily room rate (ADR) increased by 4.7% to EUR 112.17 (107.12). FINANCIAL OPERATING RESULTS 3 MOUNTAIN RESORTS Revenues of the largest segment, Mountain Resorts, make up 37.6% (38.6) of the Group’s total operating revenues. Revenues are mostly generated from ski pass sales in the resorts of Jasná Nízke Tatry, Vysoké Tatry, Szczyrk Mountain Resort, Ski Resort Ještěd and the Austrian resorts Mölltaler Gletsche, Ankogel and Muttereralm. As a result of the increase in visit rate and revenue per guest, the Group recorded an almost 39.1% increase in revenue of Mountain Resorts to EUR 70.832 mil. (50.933). The Mountain Resorts’ EBITDA increased year-over- year to EUR 29.933 mil. (17.937), reaching operating proﬁtability of 42,3% (35.2). LEISURE PARKS The Leisure Parks’ revenues are mostly generated from entry tickets to water Park Tatralandia, Bešeňová and Legendia – Silesian Amusement make up 12.4% (12.8) of total revenues. In the ﬁnancial year 2022/2023 revenues increased by almost 39% to EUR 23.344 mil. (16.861). The increase was caused by a rise in the visit rate due in Aquapark Tatralandia and higher revenues were also due to new acquisition of water park Bešeňová, which included the whole winter season. EBITDA rose by 68.5% to EUR 9.374 mil. (5.562). Operating proﬁtability of Leisure Parks increased to 40.2% (33). GOLF Revenues of the newest Golf segment come from the operation of two leased Czech golf resorts of Golf & Ski Resort Ostravice and Golf Resort Kaskáda, speciﬁcally from green fees, membership and coach fees, green card fees, and from golf cart rental. The segment revenues reached the amount of EUR 855 ths. (740). The operating performance indicator, EBITDA, amounted to EUR -81 ths. (173). DINING The Dining segment revenues of the reported period are generated in the Group’s dining facilities and après ski bars in the resorts Jasná Nízke Tatry, Vysoké Tatry, Szczyrk, Ještěd, Mölltaler Gletscher, Muttereralm in both golf resorts, and all leisure parks. Last year’s revenues of the segment make up 14.6% (14.8) of total revenues. Total revenues reached EUR 27.474 mil. (19.501), or a 40.9% increase. The segment’s operating proﬁtability reached 20.8% (14.2), whereas EBITDA increased to EUR 5.702 mil. (2.790). The success of this segment to a certain extent depends directly on the success of the resorts and parks, as these are ancillary services in the resorts and leisure parks. SPORTS STORES & SERVICES Last year’s revenues generated from the sports stores, ski schools, sports equipment rentals and service in Mountain Resorts under the Tatry Motion, Szczyrk Motion and Ještěd Motion brands, revenues from the sports stores and services in the golf resorts, and revenues from the stores in the leisure parks made up a 3.6% (4) share in total revenues. The segment’s revenues grew by 26.4% to EUR 6.724 mil. (5.321). The operating performance, EBITDA, increased to EUR 1.365 mil. (0.541) and the segment’s operating proﬁtability reached 21.4% (10.2). 3 In the FY 2018/19 the Group changed its segmentation from three key segments: Mountains & Leisure (with its subsegments Mountain Resorts, Leisure Parks, Dining, and Sports Services and Stores), Hotels, and Real Estate to seven equal segments: Mountain Resorts, Leisure Parks, Golf, Dining, Sports Services and Stores & Leisure, Hotels, and Real Estate, whilst the Golf segment was added. Occupancy (%) Average price (EUR) ADR (EUR) Occupancy (%) 0 10 20 30 40 50 60 70 0 20 40 60 80 100 120 2018/19 2019/20 2020/21 2021/22 2022/23 KPIs of Hotel Portfolio Mou n tai n Resorts Hotels Di n i n g Leisure Parks S p orts Servi c es & Stores Real Estate Golf 37,6% 29,7% 14,6% 12,4% 3,6% 1,7% 0,5% Revenue Breakdown 51 Financial Performance Review for the Year HOTELS The Group’s second largest segment is Hotels, revenues of which for the reported period made up a 29.7% (28.5) share in total revenues. Due to better situation compared to previous ﬁnancial year and higher occupancy, the segment reported an 48.4% increase in revenues to EUR 55.962 mil. (37.709). EBITDA grew to EUR 11.958 mil. (8.299) with the corresponding EBITDA margin of 21.4% (22). REAL ESTATE The last year’s revenues of the Real Estate segment come from the lease Hotel Liptov (until 31/05/2023), Kosodrevina Lodge, and the lodging facility Otupné (30/09/2023) to third parties, as well as from sale of recreational real estate (cottages in Tatralandia). The segment’s revenues in the past ﬁnancial year made up 1.7% (0.8) of total revenues and they amounted to EUR 3.188 mil. (1.055). EBITDA signiﬁcantly increased to EUR 1.116 mil. (-1.605). Explanations () - data in brackets refers to the corresponding value of previous period ADR - Average daily room rate EBITDA - represents the proﬁt from regularly recurring activities of the company before taxes, interest, amortization and depreciation adjusted for other income and expenses, which are listed under EBITDA, in particular proﬁt / (loss) from ﬁnancial operations representing foreign exchange gains / (losses). The EBITDA indicator adjusted in this way is used by the company‘s management to manage the performance of the company as well as its individual segments. FY - ﬁnancial year, period from 1 November to 31 October KPIs - Key Performance Indicators p.p. - percentage points mil. - millions ths. - thousands Change yoy - change year-over-year GROUP’S POSITION AT THE END OF THE YEAR 54 FINANCIAL POSITION LIQUIDITY As of the end of 2022/23 the Group operated with liquid funds in the amount of EUR 17.727 mil. (15.600) in the form of cash and cash equivalents. The increase is due to higher amount of revenues throughout the year especially in Slovak resorts. BORROWINGS The total value of the Group’s borrowings as of 31. October 2023 amounted to EUR 379.146 mil. (389.016). Out of that issued bonds were valued at EUR 261.264 mil. (266.186). Bank loans, as part of the Group’s ﬁnancial strategy, are sourced from J&T Bank and Raiffeisen – Leasing were valued to EUR 117.882 mil. (122.830). During the ﬁscal year, the Group drew its bank borrowings from the J&T Banka to complete the construction of cableway Biela Púť and Priehyba, amounting to EUR 2.9 mil. The level of the Group’s debt as of the period end was at 92.2% (92.2%) (total debt-to-capital ratio). Total debt-to-EBITDA ratio reached the level of 6.4 (11.5) as of 31/10/2023. The overall indebtedness is thoroughly documented and monitored, with the Group committing to efﬁcient management of this debt to achieve a stable ﬁnancial position and sustainable growth (See Consolidated Financial Statements, Note 27). TOTAL ASSETS The book value of total assets increased to EUR 579.634 mil. (574.667). Value of current assets increased to EUR 43.690 mil. (37.054) mostly due to an increase in the value of inventories by EUR 5 mil., primarily represents the partially completed apartments in the Centrum Jasná complex and recreational facilities in the Bobrovečky cottage village. Subsequently, the Group plans to sell these properties to third parties. Non-current assets decreased to EUR 535.944 mil. (537.613) mainly due to impairment of ﬁxed assets in Legendia, Mölltaler a Muttereralm. The value of ﬁxed assets amounted to EUR 480.247 mil. (482.872). The key completed investments transferred to ﬁxed assets included new cableway in Jasná mountain resort, reconstruction of the wellness facility at Grandhotel Starý Smokovec, the refurbishment of apartments in Bešeňová, the reconstruction of the water slide tower at Tatralandia, development of bike park and reconstruction of cable car facility in Szczyrk mountain resort, in Austrian resorts investments in cableways, expansion of ski slopes, new access system, and other minor investments. (See Consolidated Financial Statements, Notes 14-17). EQUITY The book value of shareholders’ equity amounted to EUR 31.896 mil. (33.007), whilst retained earnings Group’s Position at the End of the Year Financial Position in €‘000 October 31 2022/23 2021/22 Total Assets 579 634 574 667 Non-current Assets 535 944 537 613 Fixed Assets 480 247 482 872 Other Non-current Assets 55 697 54 741 Current Assets 43 690 37 054 Liquid Assets 17 727 15 600 Equity 31 896 33 007 Liabilities 547 738 541 660 Non-current Liabillities 380 270 413 244 Current Liabilities 167 468 128 416 Total Debt 379 146 389 016 55 and other funds totaled EUR -43.338 mil. (-45.426). Minority interest amounted to EUR -700 ths. (-646). CAPEX In the past ﬁnancial year, the Group completed several investment projects with a total value of almost EUR 22.7 million. Signiﬁcant investments include continuation of construction works at Centrum Jasná development project, completition of the cable car Biela Púť and Priehyba, the reconstruction of wellness facilities at Grandhotel Starý Smokovec, the refurbishment of apartments in Bešeňová, improvements to IT infrastructure, and the reconstruction of the water slide tower at Tatralandia water park and other minor investments in Slovak resorts. In Szczyrk mountain resort, the Group invested in development of a bike park, improvements to grooming equipment, the reconstruction of cable car facility and other minor investments. Additionally, in Szczyrk, the Group capitalized costs associated with tree cutting fees. The Group in Poland has also invested in maintenance of amusement park Legendia. In Ještěd, the Group invested in project “Nová Skalka” and in minor operational investments. Within the golf segment in the Ostravice and Kaskáda resorts, the Group focused on operational investments. In Austria, the Group has invested into new access system at the Muttereralm. In Mölltaler and Ankogel resorts the Group has invested into development of cable cars and ski slope expansion. ACQUISITIONS On 8 November 2022, the company GOPASS SE, a branch in Slovakia, was established. It represents a foreign entity, a European company subsidiary, of GOPASS SE. On 1 April 2023, the effects of the cross- border merger of GOPASS a.s. as the disappearing company with the successor company GOPASS SE came into force. On 28 June 2023, for real estate activities, the company TMR Real Estate, s.r.o. was founded and on 26 September 2023, the company Štrbské pleso resort, s.r.o. was founded. CASH FLOW Cash ﬂow generated from operating activities reached EUR 61.429 mil. (32.971). Cash ﬂows assigned for investment activity reached EUR -19.083 mil. (-20.433), whilst cash ﬂow for acquisition of property amounted to EUR -22.655 mil. (-23.535). The Company recorded cash ﬂows generated from ﬁnancing activities in the amount of EUR -40.219 mil. (-12.491). OUTLOOK The management expects continuing positive effects stemming from capital investments of prior periods with impact on the next ﬁnancial year and following periods, in terms of increasing the visit rate, client spending in the resorts, and growing occupancy in the hotels, especially in the off-season. The intense activity in the Real Estate segment is expected to continue also in the following periods, which should generate additional revenues and income not only in this segment but also in hotels and ancillary services through shops and dining facilities. Besides continuing the gradual progress in the projects of modernization of all the resorts and building infrastructure, in the short term the management will keep focusing on inter-segment synergies, quality management, utilization of innovative information technologies, on increasing the quality of services provided and quality of human capital, and on active sales strategy also through the GOPASS program. Group’s Position at the End of the Year Cash Flows in €‘000 November 1 - October 31 2022/23 2021/22 Cash Flow from Operating Activities 61 429 32 971 Cash Flow from Investing Activities -19 083 -20 433 Cash Flow from Financing Activities -40 219 -12 491 Net Increase in Cash and Cash Equivalents 2 127 47 56 OTHER FINANCIAL INFORMATION AFTER BALANCE SHEET PERIOD ITEMS On 1 November 2023, the Group entered into cooperation agreement with the ski resort Beskid Sport Arena in the location of Szczyrk in Poland. On 15 December 2023, the company GOPASS Property a.s. was founded, based in the Czech Republic for the purpose of operating real estate fund. On 2 February 2024, TMR paid out the coupon of TMR V bond in the amount of 6,600 mil. EUR. Explanations () - data in brackets refers to the corresponding value of previous period mil. – millions thous. – thousands Total Debt-EBITDA ratio – is calculated as a sum of current and non-current loans and borrowings and other current liabilities to the amount of liabilities towards shareholders from the decrease of share capital, divided by EBITDA for the reported period EBITDA – represents the proﬁt from regularly recurring activities of the company before taxes, interest, amortization and depreciation adjusted for other income and expenses, which are listed under EBITDA, in particular proﬁt / (loss) from ﬁnancial operations representing foreign exchange gains / (losses). The EBITDA indicator adjusted in this way is used by the company‘s management to manage the performance of the company as well as its individual segments. Group’s Position at the End of the Year 57 Group’s Position at the End of the Year CORPORATE SOCIAL RESPONSIBILITY 60 ENVIRONMENT AND COMMUNITY TMR owns and operates major tourist resorts mainly in Slovakia, but also in Poland, the Czech Republic and Austria. Majority of these resorts is located in the area of national parks. The Company concentrates solely on traditional, already urbanized areas, where sports and tourism have been a tradition for decades. From TMR’s point of view protecting fauna and ﬂora is a very important part of ongoing investments, and of con- tinuing development of summer and winter tourism in all the resorts of its portfolio. That is why every in- vestment TMR makes and every action it takes is ana- lysed in terms of impact on the environment. IMPACT OF BUSINESS ACTIVITIES ON ENVIRONMENT TTMR in all its investment and operational activities cares for environment protection and minimal impact on the natural environment. The Company takes en- vironment into consideration during the course of its business activities and tries to minimize their impact in every segment. TMR’s effort is to select services and products in such a way that the impact on the environ- ment is minimal. Moreover, the Company does its best to restrict relatively the use of natural resources and optimize waste production. TMR spreads this attitude towards environment internally among its employees and externally within communities by means of initia- tives and events. The goal of TMR is to conduct busi- ness activities with a minimum energy and fuel con- sumption. With this goal in mind the Company also adapts its capital investments into new cableways. These new cableways are built with the latest energy efﬁcient technologies from top world producers, like Doppelmayr and Leitner. Green Energy For its operations the Company also utilizes „green energy“ – electric energy from renewable resources, i.e. solar, water, and wind energy, for which it was granted a certiﬁcate from the supplier. In every segment the Company aims to utilize efﬁcient management of operations at an optimal level of energy consumption, and moreover, the Company consistently works on improving operational efﬁciency. In addition to the selection of energy efﬁcient cableways TMR also cares for the correct choice of trail-grooming vehicles that have lower emissions and thus decrease the impact on the environment. PROJECTS OF 2022/23 TMR’s projects last year referred to activities of prior periods, when TMR made an active contribution to restoration of the areas, in which TMR’s business activities are performed. The Group was also proactive in preparation of educational activities focused on various age groups of the population. In Slovakia TMR has been very active in cooperation with district tourism organizations (DTOs). TMR is a member of three DTOs covering the whole region of the Company‘s operation. It includes the following DTOs: DTO High Tatras Region DTO Liptov Region DTO Horehronie Region All these organizations developed projects of common communication and/or support to the regional infrastructure aiming to improve their establishment on the tourism market. The parties involved managed to put together funds of businesses operating in tourism and local governments; and, in accordance with the Act on Tourism, the state contributed to the projects in form of grants; as a result, funds were raised for common support of the regions. Tatry Magazine All DTOs supported their common image magazine for visitors of Tatras named Tatry Magazine. The maga- zine provides a lifestyle communication of attractions, events, prominent people, and news in the broad Tatra region. Nature and Children Education promoting positive approach to nature is apparent in many of the Companys activities. The key projects which usually focus on tutorial and educatio- nal tasks are ‘Drakopark Chopok’, ‘Tatra Wilderness’, ‘Snow Dogs’ and ‘Bear Days’. During summer families with children discovered secrets of the mountains and Demänovská Valley, looking for traces of the Demian, the Dragon. An educational trail for children covering even larger area is presently under construction in the High Tatras. The nature trail named Tatry Wild resulted from TMR’s cooperation with the State Forests Enter- prise of TANAP National Park and the Management of TANAP National Park. This project gradually expands from Tatranská Lomnica, through Hrebienok to Štrb - ské Pleso. The most attractive part of the project is the Corporate Social Responsibility 61 eco-mini park Marmot Cave at Skalnaté Pleso – an en- vironment-friendly educational and fun park for chil- dren. Green Chopok Volunteers traditionally meet at Mt. Chopok for the Green Chopok event to clean up ski trails and surroun- dings from garbage and rocks after the ski season is over. Besides cleaning the trails, the fans of mountains also usually plant trees at Mt. Chopok. Around 250 vo- lunteers and fans of mountains from 3 countries parti- cipated. It’s a record participation in the entire history of this event and last year, the 12th year of the event took place. Planting also took place in the High Tatras region. Sports Events The Group proactively supports sport events in its re- sorts, either as a partner or as a sponsor. Supporting Athletes TMR supports talented pro skiers that are members of the Slovak Skiing Association and that have achieved extraordinary performance results in the past year, have represented Slovakia in international races, and have ﬁnished in top ranks in alpine disciplines. Ski pistes in Jasná have become home of traditional Wallachian sheep TMR supports good ideas and activities focused on the outdoors where it is centered. The goal of the pro- ject is to maintain the traditional breed of Wallachian sheep in the Liptov region, where it used to occur in the past, but today its occurrence is rather rare. Its main task was grazing mountain meadows at high al- titudes. However, its breeding began to be abandoned due to low milk production. However, their role in the maintenance of mountain meadows and their value in preserving the shepherding tradition is high. In the last year, Wallachian sheep settled on the northern side of Chopok in location Priehyba. Visitors had the opportunity to look into the history of sheep breeding and see this rare breed and its breeding method in the beautiful environment of the Low Tatras. For a Better Life in the Town of Vysoké Tatry In 2019 TMR launched a grant program entitled For a Better Life in the town of Vysoké Tatry. The aim of the program is to support the public beneﬁt activities of the inhabitants of Vysoké Tatry, which will contribute to improving the quality of life in the city for its inhabi- tants. The program aims to motivate people and orga- nizations in the High Tatras to identify what needs to be improved, repaired or created for the beneﬁt of the local community. The added value of the submitted projects is that applicants will actively participate as volunteers in the implemented ones. In 2019,2020 and 2023 TMR supported 26 projects in the total amount of EUR 60 thousand. Thanks to the grant schoolchildren from the surrounding villages acquired new sports equipment, and landscaping of the sports complex and adjacent cross-country ski trails near the settle- ment of Tatranská Polianka has been completed. For the upcoming year a vale of EUR 20 thousand has been set aside, while the maximum support per pro- ject is EUR 5 thousand. Corporate Social Responsibility 62 Corporate Social Responsibility HUMAN RESOURCES Human resources are an important factor in the Group’s success, thus the HR department continues to follow the preset course of enhancing the processes in the HR management, jobs stabilization, continuing employee education, and utilization of all modern HR tools in order to achieve quality, stability, and the Group’s growth. The annual average number of the Group employees for the ﬁnancial year 2022/23 totaled 1,456 (1,359 in 2021/22). In the reported period the Group was using services of human resource agencies in hiring short term employees. In 2022/23 746 employees were hired this way (707 in 2021/22). This proves that the Group is considered a major and credible employer. Despite the Group’s positive business performance, jobs seasonality is still present. The Group hires a high number of full-time employees and contractors especially before the winter and summer season, which shows efﬁcient human capital management. In comparing with prior years, differences between the summer and winter season are diminishing. By efﬁcient utilization of human resources, we were able to decrease the number of seasonal employees and stabilize full-time employees. TMR strives to provide equal employment opportunity. On average, the Group employs 57% men and 43% women. In 2022/23 the Group published 592 job offers and recorded 4,943 responses. The number of the job offers published is the reﬂection of the labor market which is facing a lack of skilled labor force in the whole EU. Due to this status quo TMR puts emphasis on internal learning, requaliﬁcation of the human capital, and employees’ personal growth, thus TMR prefers internal recruitment in the hiring process. 63 PROJECTS The key performance indicator of TMR’s employees is TMR’s clients’ satisfaction and their return to TMR’s resorts. On the other hand, it is important for the Group to monitor satisfaction of its employees and to focus on their personal and professional growth. COMMUNICATION Last year several projects were launched aimed to support and speed up employees’ integration (new and senior) as well as to support communication among all resorts, passing of information among all employees on the Group’s news, its strategy, new projects, and strengthening and adoption of corporate values. TeMeR newspaper – subtitled “Newspaper not only for Tatry mountain resorts employees” is one of the communication channels distributing up-to-date information about the Group’s news. Employee brochure – provides basic information on TMR, on its acquisitions, values, its vision and social program. It serves as a guide in the onboarding process and provides useful information also for long-time employees. Evaluation dialogues – are a tool to raise employee performance by setting goals and their evaluation. Setting of personal and career growth is a part of the dialogues, as well as deﬁning job learning for the following year. COOPERATION WITH SCHOOLS AND UNIVERSITIES TMR puts emphasis on building relationships with high schools and universities in a way so that the Group can create an efﬁcient source of qualiﬁed and highly professional employees. TMR continued in its dual education programme. In the school year 2022/23 there were 152 students from Hotel Academy in Liptovský Mikuláš, and from the Specialized Hotel School in Starý Smokovec and 2 students from Business Academy in Liptovský Mikuláš, involved in the programme. TMR has also a cooperation memorandum signed with the Catholic University of Ružomberok in the form of participating in the ERAZMUS plus programs. There were approximately 61 foreign full-time students of the university working part-time for TMR during the school year 2022/23. SOCIAL PROGRAM AND BENEFITS The well-designed social program includes many activities, the goal of which is to fully unify TMR employees and to achieve comprehension and adoption of TMR goals in order to build corporate culture and create a feeling of corporate togetherness. The employees have a chance to use a wide variety of employee beneﬁts. Also, this way TMR wants to enable the employees and their families to try out all the services that TMR offers, and thus to boost the overall transfer of knowledge about the products and last but not least to spread positive word of mouth in their networks. Corporate Social Responsibility REPORTING OF INFORMATION IN ACCORDANCE WITH EU TAXONOMY 66 Tatry Mountain Resorts, a.s. and its subsidiaries (hereinafter referred to as “the Group“) as a large public interest entity with more than 500 employees discloses information in accordance with the Regulation of the European Parliament and Council (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment (hereinafter referred to as “the Taxonomy Regulation” or “the EU Taxonomy”) and related regulations. These also include: Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021 (“Climate Delegated Regulation”), which establishes conditions for determining whether selected economic activities substantially contribute to climate change mitigation and/or to climate change adaptation, as well as whether they substantially do not interfere with the achievement of some of the other environmental objectives, Commission Delegated Regulation (EU) 2022/1214 of 9 March 2022 (“Complementary Climate Delegated Act”), which sets conditions for economic activities in certain energy sectors, Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021 (“Disclosure Delegated Regulation”) establishing the scope and content of information that entities are to disclose regarding environmentally sustainable economic activities, as well as the methodology for fulﬁlling this disclosure obligation. Information on the proportion of the turnover, capital expenditure and operating expenditure of the Group for the year ending as at 31 October 2023 describes proportion of activities related to economic activities eligible according to the ﬁrst environmental objective (climate change mitigation) in accordance with the delegated regulation to Article 8 of the EU Taxonomy (2021/2178). The Taxonomy Regulation deﬁnes the basic principles for identifying an economic activity as environmentally sustainable, which are then further speciﬁed by the relevant delegated regulations of the European Union. The EU Taxonomy classiﬁcation system works with three categories, which help determine their level of environmental sustainability. Within this regime, a distinction is made between: Taxonomy-eligible economic activities, Taxonomy-aligned economic activities, Taxonomy-non-eligible economic activities. Assessment report disclosure of Taxonomy-eligible economic activities is being prepared by the Group for the consolidated unit. In preparing the disclosure, all economic activities carried out by the Group were reviewed to identify Taxonomy-eligible and Taxonomy-aligned economic activities under Annexes I and II of the Climate Delegated Regulation and the Complementary Climate Delegated Act. The table of Taxonomy- eligible disclosed activities lists those economic activities that were assessed as Taxonomy-eligible. Information on the degree of Taxonomy-alignment of these economic activities, including their contribution to the relevant environmental objectives is provided in the table for each key performance indicator (KPI). In general, the Group generates turnover from its reported economic activities and incurs the related capital expenditure and operating expenditure. The Group operates mainly in tourism, hospitality, and recreation. Considering that these economic activities have not been included in the EU Taxonomy Delegated Regulation yet, it is not possible to perform the assessment of their eligibility and alignment with the EU Taxonomy for this reporting period. We anticipate a change in the assessment from the next reporting period, when new delegated regulation (Taxonomy Environmental Delegated Act) on remaining environmental objectives will come into force from 1 January 2024, which will incorporate selected tourism activities. Therefore, for this period, we evaluated only our secondary economic activities which naturally relate to the primary scope of our business activities and are included in so-called Climate Delegated Regulation. 1. TAXONOMY-ELIGIBLE ECONOMIC ACTIVITIES OF THE GROUP A Taxonomy-eligible economic activity (hereinafter referred as “eligible economic activity”) is an economic activity, described in the delegated act supplementing the Taxonomy Regulation regardless of whether this economic activity meets some or all of the technical screening criteria set out in these delegated acts. For the Group that are economic activities: 4.9 Transmission and distribution of electricity, 4.22 Production of heat/cool from geothermal energy, 4.30 High-efﬁciency co-generation of heat/cool and power from fossil gaseous fuels 5.3 Construction, extension and operation of Reporting of Information in accordance with EU Taxonomy 67 wastewater collection and treatment, 6.3 Urban and suburban transport, road passenger transport, 7.1 Construction of new buildings, 7.2 Renovation of existing buildings. Economic activity 6.3 Urban and suburban transport, road passenger transport, has been qualiﬁed as eligible economic activity in the ﬁrst step as Austrian ski resorts of the Group are operating funicular railways and aerial cableways which are classiﬁed as a part of urban and suburban transport in Austria. Based on the decision of the Group’s management it was concluded, that in fact, even though the legislation in Austria classiﬁes this type of transport in a way described above, this type of transport is not performed as the deﬁned activity does not serve its original purpose for which it is classiﬁed and therefore this economic activity does not perform the function of urban, suburban, or road passenger transport. Based on this fact, we do not consider this economic activity to be eligible. Turnover, capital expenditure and operating expenditure for the following two identiﬁed eligible economic activities: 4.22 Production of heat/cool from geothermal energy, 5.3 Construction, extension and operation of wastewater collection and treatment, are highly immaterial from the reporting point of view and thus will not be listed in the calculations of key performance indicators (KPI). Reporting of Information in accordance with EU Taxonomy Economic activity Description KPI proportion NACE code 4.9 Transmission and distribution of electricity Construction and operation of transmission systems that transport the electricity on the extra high- voltage and high voltage interconnected system. Construction and operation of distribution systems that transport electricity on high-voltage, medium- voltage and low-voltage distribution systems. Turnover D35.12 D35.13 4.22 Production of heat/cool from geothermal energy, Construction or operation of facilities that produce heat/cool from geothermal energy. N/A D35.30 4.30 High-efﬁciency co-generation of heat/ cool and power from fossil gaseous fuels Construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels. Operating expenditure D35.11 D35.30 5.3 Construction, extension and operation of wastewater collection and treatment Construction, extension and operation of centralised waste water systems including collection (sewer network) and treatment. N/A E37.00, F42.99 7.1 Construction of new buildings Development of building projects for residential and non-residential buildings by bringing together ﬁnancial, technical and physical means to realise the building projects for later sale as well as the construction of complete residential or non- residential buildings, on own account for sale or on a fee or contract basis. Turnover, Capital Expenditure, Operating Expenditure F41.1 F41.2 7.2 Renovation of existing buildings Construction and civil engineering works or preparation thereof. Turnover, Capital Expenditure F41 F43 Table 2 – Taxonomy-eligible economic activities of the Group 68 2. TECHNICAL SCREENING CRITERIA An economic activity is qualiﬁed as environmentally sustainable if it is aligned with the EU Taxonomy (hereinafter referred as „aligned economic activity “) and complies with the criteria set out in Article 3 of the EU Taxonomy: Complies with the technical screening criteria set out by the European Commission in accordance with the regulations, speciﬁcally: • Substantially contributes to one or multiple environmental objectives speciﬁed in the regulation, Does not signiﬁcantly harm fulﬁlment of any of these environmental objectives, Is conducted in compliance with the minimum safeguards outlined in the regulations. All economic activities of the Group disclosed in the table of eligible economic activities, with the exception of economic activity 4.30, contribute to the generation of turnover and represent a substantial contribution to the environmental objective of climate mitigation. In order to be able to demonstrate a substantial contribution to a given environmental objective, the economic activity concerned must also satisfy the speciﬁc technical screening criteria for that economic activity as deﬁned in Annex I of the climate delegated regulation. The evaluation of these criteria for each economic activity is described in this chapter. The Group assessed all its identiﬁed eligible economic activities based on requirements as they are deﬁned and stipulated in Delegated Regulations of the Commission, which set the technical screening criteria for individual economic activities. The Group does not disclose any of its economic activities which could be considered as Taxonomy-aligned for the year ending as at 31 October 2023. Some economic activities of the Group, such as the production of heat from geothermal energy, naturally have the potential to be qualiﬁed as environmentally sustainable according to the EU Taxonomy in the future (due to the use of low- emission renewable source of energy). However, it is not possible to fulﬁl all of the technical requirements set out in the regulation for this economic activity for the year ending as at 31 October 2023. 2.1 „DO NO SIGNIFICANT HARM“ PRINCIPLE In addition to substantial contribution criteria, technical screening criteria also address the „do no signiﬁcant harm“ principle which should ensure that the economic activity does not have a signiﬁcant negative impact on the environment and does not disrupt the achievement of any other environmental objective set out in Article 9 of the regulation (EU) 2020/852. The requirements of „Do no signiﬁcant harm“ („DNSH“) principle have not been evaluated due to the absence of economic activities that could be considered as aligned. Nevertheless, for future reporting periods, we focused on the assessment of climate risks. During our assessment we were guided not only by internal consultation but also by the National Threat Register 1 valid for Slovak Republic and identiﬁed which of these risks will need to be considered at the Group level in the future. In the future, we plan to undertake a comprehensive assessment of climate risks, including climate scenario modelling for those aligned economic activities where the risk appears possible and severe as recommended by the European Commission. 2.2 MINIMUM SAFEGUARDS In accordance with Article 3, paragraph c) of the EU Taxonomy, each economic activity that is considered environmentally sustainable must be carried out in alignment with minimum safeguards. Minimum safeguards are deﬁned by Article 18, paragraph a) of the EU Taxonomy as procedures that ensure the performance of environmentally sustainable economic activities in accordance with: the OECD Guidelines for Multinational Enterprises (2011) 2 , the United Nations Guiding Principles on Business and Human Rights (UNGPs) 3 , including the principles and rights set out in the eight core conventions set out in the International Labour Organisation Declaration on Fundamental Principles and Rights at Work 4 ; the International Bill of Human Rights 5 . Assessment of minimum safeguards was carried out in accordance with Final Report on Minimum Safeguards prepared by Platform on Sustainable Finance in October 2022 6 . The assessments of alignment with the minimum safeguards were carried out for the following four areas: human rights (including labour and consumer rights), corruption and bribery, taxation, fair economic competition. The Group did not record any violation of human rights (including labour and consumer rights) either Reporting of Information in accordance with EU Taxonomy 1 https://rokovania.gov.sk/RVL/Material/26865/1; Príloha 1 2 https://www.oecd.org/daf/inv/mne/48004323.pdf 3 https://www.ohchr.org/sites/default/ﬁles/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf 4 https://www.ilo.org/wcmsp5/groups/public/---ed_norm/---declaration/documents/normativeinstrument/wcms_716594.pdf 5 https://www.ohchr.org/sites/default/ﬁles/Documents/Publications/Compilation1.1en.pdf 6 https://ﬁnance.ec.europa.eu/system/ﬁles/2022-10/221011-sustainable-ﬁnance-platform-ﬁnance-report-minimum-safeguards_en.pdf 69 during the reporting period or historically. The Group has committed to respecting human rights, avoiding human rights violations and their abuse in its own activities related to the Group’s operations. These principles are cross-sectioned in internal regulations and policies of the Group. Within these principles respect and commitment to comply with all relevant standards including suitable working conditions, health and safety, adequate working hours, wages and time for rest is expressed. Employees of the Group are not required to work beyond acceptable legal and industry standards. The employer provides its employees with access to regular breaks for rest along with access to sufﬁcient water and access to sanitary facilities. The proper taxation procedures are also conﬁrmed by the Tax Reliability Index declaring the company TMR as a “Reliable Tax Subject” which the company received from the Financial Administration of Slovak Republic. At the Group level, there are no penalties or judicial proceedings registered in connection with its tax or other legal obligations in the area of fair and ethical business conduct, both against the Group itself and against individual members of The Board. The Group has also adopted rules for recording, investigation and reporting the results of the investigations of notiﬁcations related to crime or anti-social activities in accordance with Act no. 54/2019 Coll. on the protection of whistle-blowers, amending and supplementing certain legislations with the aim to prevent and reduce the occurrence of these incidents. 3. ACCOUNTING POLICIES OF TMR Key performance indicators (KPI) include indicators related to revenue, capital expenditure and operating expenditure. The presentation of key performance indicators is in accordance with the EU Taxonomy as set out in Annex II to the Delegated Regulation of EU Commission on disclosure obligations . As key performance indicators must include the assessment of the EU taxonomy alignment for the ﬁrst time for the period ending as at 31 October 2023, data for comparable timeframe are not listed. Cumulative proportion of eligible economic activities on individual indicators of the Group is provided in Table 1. – Proportion of Taxonomy-eligible economic activities for the year ending as at 31 October The year ending as at 31 October 2023 Total (EUR ths.) Proportion of eligible (not aligned) economic activities (%) Proportion of aligned economic activities (%) Proportion of non- eligible economic activities (%) Turnover 188,379 3.83 0 96.17 Capital Expenditure 22,655 60.24 0 39.76 Operating Expenditure 4,872 1.56 0 98.44 The year ending as at 31 October 2022 Total (EUR ths.) Proportion of eligible (not aligned) economic activities (%) Proportion of aligned economic activities (%) Proportion of non- eligible economic activities (%) Turnover 132,119 1.10 0 98.90 Capital Expenditure 23,616 0 0 100 Operating Expenditure 4,093 1.03 0 98.97 Table 1 – Proportion of Taxonomy-eligible economic activities for the year ending as at 31 October 2023 (turnover, capital expenditure, operating expenditure) Table 2 – Proportion of Taxonomy-eligible economic activities for the year ending as at 31 October 2022 (turnover, capital expenditure, operating expenditure) 1 Delegated regulation of European Commission 2021/2178 from 6th July 2021, supplementing regulation of European parliament and of the Council (EU) 2020/852 specifying content and presentation of information to be disclosed by undertakings subject to Article 19a or 29a of Directive 2013/34/EU, concerning environmentally sustainable economic activities, and specifying the methodology to comply with that disclosure obligation Reporting of Information in accordance with EU Taxonomy 70 71 2023 (turnover, capital expenditure, operating expenditure). Cumulative proportion of Taxonomy- eligible economic activities on individual indicators of the Group for the comparable period ending as at 31 October 2022 is provided in Table 2 - Proportion of Taxonomy-eligible economic activities for the year ending as at 31 October 2022 (turnover, capital expenditure, operating expenditure) 3.1 TURNOVER The proportion of turnover from eligible economic activities of the Group was calculated as the part of the net turnover derived from products or services associated with eligible economic activities (numerator) divided by the net turnover of the company (denominator) for the year ending as at 31 October 2023. Net turnover for the year ending as at 31 October 2023 (EUR ths. 188,379) includes amounts derived from the sales of products or the provision of services after deducting sales rebates and value added tax and other taxes directly linked to turnover. Further information is provided in note 6 of the consolidated ﬁnancial statements. Net turnover from eligible economic activities represents turnover from the following activities: 4.9 Transmission and distribution of electricity, which encompass turnover from sales of electricity from co-generating unit in Aquapark Bešeňová, 7.1 Construction of new buildings, which encompass turnover from accommodation in new apartments in Aquapark Tatralandia and sales associated with operations of the new ski-lift in resort Jasná (proportionate amount from sales of ski tickets and fees from parking), Substantial Contribution Criteria DNSH criteria (‚Does Not Signiﬁcantly Harm‘) Economic activities Code (s) Absotulte turnover (in EUR ths.) Proportion of Turnover Climate change mitigation % Climate change adaptation % Water % Pollution % Circular economy % Biodiversity and ecosystems % Climate change mitigation yes/no Climate change adaptation yes/no Water yes/no Pollution yes/no Circular economy yes/no Biodiversity and ecosystems yes/no Minimal safeguards Taxonomy aligned proportion of total Turnover year N % Taxonomy aligned proportion of total Turnover year N-1 % Category (enabling activity) Category (transitional activity) A. Taxonomy-eligible activities A.1 Environmentally sustainable activities (Taxonomy-aligned) Turnover of Taxonomy-aligned activities A.1 0 0% Not applicable A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) 4.9 Transmission and distribution of electricity D35.12 D35.13 1 284 0,68% Not applicable 7.1 Construction of new buildings F41.1 F41.2 5 612 2,98% 7.2 Renovation of existing buildings F41 F43 319 0,17% Total (A.1 + A.2) 7 215 3,83% Turnover of Taxonomy-non-eligible activities (B) 181 164 96,17% Total (A + B) 188 379 100% Table 3 – Turnover KPI Reporting of Information in accordance with EU Taxonomy 72 7.2 Renovation of existing buildings, which encompass turnover from accommodation in renovated part of apartments in Aquapark Bešeňová. 3.2 CAPITAL EXPENDITURE The capital expenditure indicator was determined as the proportion of capital expenditure related to eligible economic activities (numerator) and the total capital expenditure as deﬁned by the EU Taxonomy (denominator) for the year ending as at 31 October 2023. The denominator covers total capital expenditure for the accounting period, which comprise additions to property, plant and equipment, and intangible assets (EUR ths. 22,655) as disclosed in notes 14 – 16 of the consolidated ﬁnancial statements. Capital expenditure for eligible economic activities represents expenses from the following economic activities: 7.1 Construction of new buildings, which encompass capital expenditures associated with construction of new buildings in Aquapark Tatralandia and resort Jasná, 7.2 Renovation of existing buildings, which encompass capital expenditures associated with renovation of existing buildings in Aquapark Bešeňová and resorts Jasná. Substantial Contribution Criteria DNSH criteria (‚Does Not Signiﬁcantly Harm‘) Economic activities Code (s) Absotulte turnover (in EUR ths.) Proportion of Turnover Climate change mitigation % Climate change adaptation % Water % Pollution % Circular economy % Biodiversity and ecosystems % Climate change mitigation yes/no Climate change adaptation yes/no Water yes/no Pollution yes/no Circular economy yes/no Biodiversity and ecosystems yes/no Minimal safeguards Taxonomy aligned proportion of total Turnover year N % Taxonomy aligned proportion of total Turnover year N-1 % Category (enabling activity) Category (transitional activity) A. Taxonomy-eligible activities A.1 Environmentally sustainable activities (Taxonomy-aligned) Capital expenditures of environmentally sustainable activities (A.1) 0 0% Not applicable A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) 7.1 Construction of new buildings F41.1 F41.2 13 110 57,87% Not applicable 7.2 Renovation of existing buildings F41 F43 537 2,37% Total (A.1 + A.2) 13 647 60,24% Capital expenditures of Taxonomy- non-eligible activities (B) 9 008 39,76% Total (A + B) 22 655 100% Table 4 – CapEx KPI Reporting of Information in accordance with EU Taxonomy 73 3.3 OPERATING EXPENDITURE The operating expenditure indicator was determined as the proportion of eligible expenditure (numerator) and the total operating expenditure as deﬁned by the EU Taxonomy (denominator). Operating expenditure according to the EU Taxonomy comprises expenditure associated with maintenance and repair of property, plant and equipment, research and development, short-term lease and rent. In case of the Group, these operating expenditures include direct non-capitalised expenditure associated with research and development, building renovation measures, short- term lease, maintenance and repair and any other direct expenditures relating to the day-to-day servicing of assets of property, plant and equipment by the Group or a third party to whom activities are outsourced that are necessary to ensure the continued and effective functioning of such assets. The denominator covers operating expenditure disclosed in note 8 of the consolidated ﬁnancial statements. Operating expenditure for eligible economic activities represents expenses from the following economic activities: 4.30 High-efﬁciency co-generation of heat/cool and power from fossil gaseous fuels, which encompass eligible expenses associated with operation of a co-generating unit in Aquapark Bešeňová, 7.1 Construction of new buildings, which encompass eligible expenses associated with new buildings in resort Jasná. Substantial Contribution Criteria DNSH criteria (‚Does Not Signiﬁcantly Harm‘) Economic activities Code (s) Absotulte turnover (in EUR ths.) Proportion of Turnover Climate change mitigation % Climate change adaptation % Water % Pollution % Circular economy % Biodiversity and ecosystems % Climate change mitigation yes/no Climate change adaptation yes/no Water yes/no Pollution yes/no Circular economy yes/no Biodiversity and ecosystems yes/no Minimal safeguards Taxonomy aligned proportion of total Turnover year N % Taxonomy aligned proportion of total Turnover year N-1 % Category (enabling activity) Category (transitional activity) A. Taxonomy-eligible activities A.1 Environmentally sustainable activities (Taxonomy-aligned) Operational expenditures of environmentally sustainable activities A.1 0 0% Not applicable A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) 4.30 High-efﬁciency co-generation of heat/cool and power from fossil gaseous fuels D35.11 D35.30 54 1,11% Not applicable 7.1 Construction of new buildings F41.1 F41.2 22 0,44% Total (A.1 + A.2) 76 1,56% Turnover of Taxonomy-non-eligible activities (B) 4 796 98,44% Total (A + B) 4 872 100% Table 5 – OpEx KPI Reporting of Information in accordance with EU Taxonomy CORPORATE GOVERNANCE 76 CORPORATE GOVERNANCE PRINCIPLES TMR’s corporate governance is regulated by the principles and methods outlined in the Company Articles, TMR’s Code of Conduct, in the Corporate Governance Code of companies in Slovakia, in the Rules of Organization and in the set of managing acts (guidelines), which are published at the Company‘s registered ofﬁce. The principles and methods are communicated to the Company‘s employees. CORPORATE BODIES AND MANAGEMENT BOARD OF DIRECTORS The Board of Directors is a statutory body of Tatry mountain resorts, a.s. The Board of Directors regulates the Company‘s activities and decides all Company matters, unless legal regulations or the Company‘s Articles stipulate that such matters fall under the competence of the General Meeting or the Supervisory Board. Besides other documents, the Board of Directors submits the draft investment and ﬁnancial plan for approval by the Supervisory Board and is responsible for meeting the plan. Furthermore, it also submits proposals for the approval of ﬁnancial and business transactions with a value exceeding EUR 150 000 by the Supervisory Board. The Board of Directors submits the Company Articles for approval by the General Meeting. The Board of Directors convenes the General Meeting at least once a year. The power to act on behalf of the Company in all matters is always held jointly by two members of the Board of Directors. Members of the Board of Directors are elected and removed by the Supervisory Board. The term of ofﬁce of members of the Board of Directors is ﬁve years; re-election is allowed. Additionally, the Supervisory Board shall appoint the Chairman and the Vice-Chairman of the Board of Directors from among the members of the Board of Directors. The Board of Directors does not have its own Statute or Committees. The Board of Directors holds sessions as necessary; at least once in two months. The Board of Directors holds a quorum if a session is attended by a majority of all members of the Board of Directors. A decision of the Board of Directors is adopted if all the members of the Board of Directors voted in the afﬁrmative. As of 31 October 2023, the Board of Directors comprised of three members: Igor Rattaj - chairman of the Board of Directors Zuzana Ištvánﬁová - vice chairman of the Board of Directors Čenek Jílek - member of the Board of Directors MEMBERS OF THE BOARD OF DIRECTORS Igor Rattaj - Chairman of the Board of Directors since 28/05/2020 Mr. Rattaj became the Chairman of the Board of Directors in May 2020. Previously, he has held the ofﬁce of the Chairman of the Supervisory Board of TMR since June 2009, when he was elected by the General Meeting as a member of the Supervisory Board. He has extensive experience in ﬁnance. Additionally, he is a member of Supervisory Boards and an Executive in a number of companies. He worked as Director for Trading with Securities in J&T Securities. Previously, he held the position of Vice- Chairman of the Board of Directors and Director for Private Banking at “Podnikatelská banka” in Prague. He graduated from the Slovak University of Technology, Faculty of Electrical Engineering in Bratislava. Besides his role as TMR’s Chairman of the Supervisory Board, Ing. Rattaj holds the position of Chairman of the Board of Directors in companies such as GARFIN HOLDING, a.s., Hurricane Factory a.s., TMR Parks, a.s., GOPASS SE, Czech Republic, and is a member of the Board of Directors of MELIDA, a.s., Czech Republic. Mr. Rattaj is also the Chairman of the Supervisory Board of HOBACOR, a.s., Czech Republic, and a member of the Supervisory Board of RIVERSAND a.s., SOLIVARY Joint Stock Company Prešov in bankruptcy, a member of the Supervisory Board of TMR Ještěd a.s., Czech Republic, TMR Finance CR, a.s., Czech Republic, RT ASSETS Holding a.s., Czech Republic, DEVEREAL a.s., Czech Republic. He is a member of the Supervisory Board of the J&T Foundation, the CEO of HURRICANE FACTORY PRAHA s.r.o., Czech Republic, and the Chairman of the Supervisory Board of Tatry mountain resorts CR, a.s. Mr. Rattaj is also a partner in EU GEN s.r.o., since December 10, 2018, a member of the Supervisory Corporate Governance 77 Board of RENTAL LIVE a.s. since November 30, 2018, and the CEO of Muchalogy s.r.o. since November 8, 2022. Additionally, he is the head of the organizational unit in GOPASS SE, organizational unit. As of the date of the annual report, he also holds the position of CEO in the following companies: KPRHT 5, s.r.o., Thalia s.r.o., C4U, s.r.o., MONTIR, s.r.o. in liquidation, and RCBT, s.r.o., budkova, s.r. o., CryptoData, s.r.o., DCBA s.r.o., TMR Real Estate, s.r.o., MORAVA SPORT, s.r.o., Eurocom Investment, s.r.o., Hurricane Factory Tatralandia s.r.o., Aerodrome Promotion s.r.o., Czech Republic, CLP Finance s. r. o., Czech Republic. He is also a member of the Supervisory Board of RIVERSAND a.s., Snowparadise a.s., 100% shareholder in ROJKO, spol. s.r.o., CTY PRŮMYSLOVÁ, s.r.o. in liquidation, Czech Republic. Number of shares held as of 31 October 2023: 1,973,197 (C.I. CAPITAL INDUSTRIES LIMITED, 100%) Zuzana Ištvánﬁová - member of the Board of Directors from 01/06/2023 In Tatry Mountain Resorts, a.s., Ms. Zuzana Ištvánﬁová has been serving as the Director of Business and Marketing for Slovak operations of TMR since January 2021. On April 25, 2023, she was elected by the Supervisory Board as a member of the Board of Directors, with the function starting on June 1, 2023. Additionally, she was designated as the Vice-Chairman of the Board of Directors by the Supervisory Board, with the function also commencing on June 1, 2023. Ms. Zuzana Ištvánﬁová brings extensive experience from managerial and leadership positions in various companies in Slovakia and the Czech Republic, which have had long-term collaborations with TMR. Apart from her role as a member of the TMR Board of Directors, Ms. Zuzana Ištvánﬁová also serves as a board member in following companies: • TMR Parks, a.s. • Hotel Sliezsky dom, a.s. • GARFIN HOLDING, a.s. • EUROCOM Investment, s.r.o. • X-BIONIC® SPHERE a.s. • NARCIUS, a. s. Number of shares held as of 31 October 2023: 0 Čeněk Jílek - member of the Board of Directors since 04/06/2020 Čenek Jílek has been a member of the Company‘s Board of Directors since June 2020. Mr. Jílek previously held the position of Director of the Špindlerův Mlýn resort, operated by Melida a.s., . Earlier he served three years as a sales manager of the Tatry Motion retail stores, which belong to TMR. He has also gained his experiences in tourism during seven years as a sales manager in the luxury hotel segment in Canary Islands. He received his MBA degree from Bircham International University. Mr. Jílek concurrently serves as a member of the Board of Directors in the following companies: • MELIDA, a.s., Czech Republic • OSTRAVICE HOTEL a.s., Czech Republic • Tatry mountain resorts CR, a.s., Czech Republic • GOPASS SE, Czech Republic • SKOL MAX Ski School, a. s. in liquidation, Czech Republic Furthermore, Mr. Jílek holds the position of Chairman of the Supervisory Board in TMR Finance CR, a.s., Czech Republic, and TMR Ještěd, a.s., Czech Republic. He is also the CEO of International TMR Services, s.r.o., Czech Republic, and a partner in the company Refugio s.r.o. Additionally, among other responsibilities, he serves as the Chairman of the committee in the association MOTION TEAM, z.s. Number of shares held as of 31 October 2023: 0 SUPERVISORY BOARD The Supervisory Board is the Company‘s supreme monitoring body. It supervises the exercise of the Board of Directors’ competences and performance of the Company‘s business activities. The Supervisory Board, inter alia, approves draft ﬁnancial plans submitted by the Board of Directors, signiﬁcant investments and other material, ﬁnancial and business transactions for the relevant ﬁnancial year, reports to the General Meeting regarding results of its monitoring activities. The Supervisory Board is comprised of nine members. The term of ofﬁce is ﬁve years, and re-election is allowed. Members of the Supervisory Board are elected and removed by the General Meeting. If, at the moment of an election, the Company employs more than 50 employees Corporate Governance 78 on full-time employment, two thirds of the members of the Supervisory Board are elected and removed by the General Meeting and one third is elected and removed by the Company‘s employees. The Supervisory Board elects the Chairman and Vice-Chairman of the Supervisory Board from among its members. From 19.04.2018 the Supervisory Board performs the activities of the Audit Committee under Act No. 423/2015 Coll. on Statutory Audit and under the Amendments to Act No. 431/2002 Coll. on accounting. As of 31 October 2023, the Supervisory Board was comprised of nine members: Jozef Hodek – Chairman of the Supervisory Board František Hodorovský – Vice-Chairman of the Supervisory Board, reelected effective 01/07/2021 Adam Tomis – member of the Supervisory Board Pavol Mikušiak – member of the Supervisory Board Roman Kudláček – member of the Supervisory Board Andrej Devečka – member of the Supervisory Board Miroslav Roth – independent member of the Supervisory Board, elected by TMR employees Mgr. Marek Schwarz - independent member of the Supervisory Board, elected by TMR employees Ivan Oško - independent member of the Supervisory Board, elected by TMR employees Changes during the year: On May 31, 2023, the General Meeting removed Bohuš Hlavatý as the member of the Supervisory Board with the termination of his function effective on June 30, 2023. In his place, Mr. Jozef Hodek was elected as a member of the Supervisory Board, with the commencement of his function on July 1, 2023 MEMBERS OF THE SUPERVISORY BOARD Jozef Hodek - Chairman of the Supervisory Board since 01/07/2023 Ing. Jozef Hodek was elected as a member of the Supervisory Board by the Issuer‘s Annual General Meeting on May 31, 2023, with the function commencing on July 1, 2023. Additionally, on July 3, 2023, he was elected as the Chairman of the Supervisory Board. Ing. Hodek is a former long-time Financial Director of TMR and a member of the Board of Directors. He played a signiﬁcant role in streamlining processes within TMR, issuing new shares, and listing on the Bratislava Stock Exchange. Prior to that, he worked in the audit ﬁeld at Pricewaterhouse Cooper Slovakia from 2006 to 2007. He successfully graduated from the Economic University, Faculty of Economic Informatics in Bratislava. In addition to his role on the TMR Supervisory Board, Ing. Hodek is a partner and CEO in the company HODRENT, s.r.o. He also serves as a member of the Supervisory Board of GARFIN HOLDING, a.s. Number of shares held as of 31 October 2023: 431 František Hodorovský – member of the Supervisory Board since 18/01/2011, re-elected as the Deputy Chairman of the Board since 01/07/2021 In January 2011, Mr Hodorovský was ﬁrst elected by the General Meeting as a member of the Supervisory Board and, at the same time, he was elected by the Supervisory Board as Vice-Chairman of the Supervisory Board, as the owner of Tatralandia, which was acquired by the Company. The Annual General Meeting reelected František Hodorovský a member of the Supervisory Board, effective as of 28/04/2016. The Supervisory Board at its meeting on 28/04/2016 appointed František Hodorovský its vice-chairman as of 28/04/2016. Since 1996, he has held various positions as a legal representative, partner and shareholder in various companies operating in the tourism industry. He graduated from the University of Economics in Bratislava, Faculty of Business Management. Besides his role as TMR’s member of the Supervisory Board, Ing. Hodorovský serves as a legal representative in the following companies: HOLLYWOOD C.E.S., s.r.o. a C4U, s.r.o., E.R.W. Trading s. r. o., HOLLYWOOD C.E. SK, s.r.o., Solidteam s. r. o. and from Oktober 1, 2022 is member of the Supervisory board in company TMR Parks, a.s. Number of shares held as of 31 October 2023: 1,030,919 (FOREST HILL COMPANY, s.r.o., 100%) Adam Tomis - member of the Supervisory Board since 12/04/2014 Mr. Tomis was elected a Supervisory Board member by the General Meeting on 12/04/2014 and reelected at the General Meeting on 17/04/2019. Currently, he serves as a project manager responsible for non-banking investments of the J&T Group. During 2012-2013 he worked in a consulting ﬁrm McKinsey&Company on projects in banking and telecommunications. Before, he had served for eight years at the investment Corporate Governance 79 ﬁrm Benson Oak Capital and for one year at the independent air travel agency Travel Service. Mr. Tomis earned his college degree at the Charles University in Prague, the Institute of Economic Studies, majoring in Finance, ﬁnancial markets, and banking. Beside his role of TMR’s Supervisory Board member, Adam Tomis serves as a member of the board of directors in the following companies: • Equity Holding, a.s., (Czech Republic); • J&T CAPITAL PARTNERS, a.s., (Czech Republic); • J&T ENERGY HOLDING, a.s., (Czech Republic); and • J&T EQUITY PARTNERS, a.s. (Czech Republic). Moreover, Adam Tomis serves as a member of the supervisory board in the following companies: • Westminster JV a.s. (Czech Republic); • EP Global Commerce a.s., (Czech Republic); • E-Commerce and Media Investments, a.s. (Czech Republic); • CZECH MEDIA INVEST a.s. (Czech Republic); • J&T ENERGY FINANCING CZK V, a.s. 1 (Czech Republic); and • J&T ENERGY FINANCING CZK VI, a.s. (Czech Republic). Since 27/04/2022, Adam Tomis serves as the chairman of the supervisory board of J&T INVESTIČNÍ SPOLEČNOST, a.s. Number of shares held as of 31 October 2023: 0 Pavol Mikušiak - member of the Supervisory Board since 27/4/2013 Ing. Mikušiak was elected a member of the Supervisory Board in April 2013 by the General Meeting and reelected in April 2018. He is a member of corporate bodies of several Slovak companies. Since 1996 he serves as business director of CBA Verex, a.s. Previously he worked as foreign trade director at Verex, s.r.o. (1992 – 1996) and as a scientiﬁc researcher at Research Institute in Liptovský Mikuláš (1987 – 1992). He graduated from the Technical University in Košice, the Faculty of information technologies and programming. Currently, besides his role as TMR’s member of the Supervisory Board, Ing. Mikušiak holds positions on the Boards of Directors in the following companies: CBA SK, a.s., CBA VEREX, a.s., VEREX HOLDING, a.s., NARCIUS, a.s. He is also a member of the Supervisory Boards in VEREX-ELTO, a.s., VEREX ŽILINA, a.s., VEREX REALITY s.r.o., OSKO, a.s., LEVEL, a.s. Furthermore, he serves as a legal representative in ELTO REALITY, s. r. o., Invest Liptov, s.r.o., MPL Invest, s.r.o. Number of shares held as of 31 October 2023: 0 Roman Kudláček - member of the Supervisory Board since 21/4/2012 In April 2012, Mr Kudláček was elected by the General Meeting as a member of the Supervisory Board, and then reelected in April 2017. He has extensive experience in machinery and engineering. Since 2000 he has held the position of Chairman of the Board of Directors in K&M, a.s. From 2001 to 2008, he worked as an executive of Liptosol, s.r.o. in Liptovský Mikuláš. Previously he held the position of Chairman of the Board of Directors at the machinery manufacturer LIPTOVSKÉ STROJÁRNE plus, a.s. (1997 – 1999). From 1993 to 1999 he was an Executive of RBL, s.r.o. During the prior two years he was engaged in retail business activities. Besides his membership on the Supervisory Board of TMR, Mr Kudláček is a member of the Supervisory Board at Štrbské pleso resort, s.r.o. Number of shares held as of 31 October 2023: 0 Andrej Devečka - member of the Board of Directors since 29/04/2020 Mr. Devečka was a member of the Board of Directors until the end of April 2020. Since 1991 he has been an owner, businessman, co-owner, executive and member of the Supervisory Board in a number of companies. Previously, he held the position of Senior Manager in Tesla Liptovský Hrádok, a technology machinery company. He graduated from the University of Technology in Liptovsky Mikuláš, with a specialization in microelectronics and laser technology. Besides serving on the Board of Directors of TMR Ing. Devečka serves as a legal representative at HOLLYWOOD C.E.S., s.r.o. a C4U, s.r.o., E.R.W. Trading s. r. o., HOLLYWOOD C.E. SK, s.r.o., Solidteam s. r. o. Since 01/10/2022 he has been a supervisory board member of TMR Parks, a.s. Number of shares held as of 32 October 2023: 0 Miroslav Roth - independent member of the Supervisory Board since 30/6/2012 Mr. Roth was reelected as a member of the Corporate Governance 80 Supervisory Board by employees of the Company in June 2021. He works for the Company as an electrical networks specialist in the resort Vysoké Tatry. He had previously held this position from 1985 in Tatranské lanové dráhy, a.s. Number of shares held as of 31 October 2023: 0 Mgr. Marek Schwarz - independent member of the Supervisory Board since 30/6/2021 Mgr. Schwarz was elected a member of the Supervisory Board in June 2021 by the Company‘s employees. He works at TMR as the director of the human resources department. In addition to the Supervisory Board of TMR, Mr. Schwarz also serves as a member of the Supervisory Board in the companies TMR Parks, a.s. and Region Tatry Travel, s.r.o. Number of shares held as of 31 October 2023: 0 Ivan Oško - independent member of the Supervisory Board since 30/6/2021 Mr. Oško was elected a member of the Supervisory Board in June 2021 by the Company‘s employees. At TMR, he works as the head of the cable car operations in Jasná. In addition, he is also the chairman of Union of Trade and Tourism Workers. Number of shares held as of 31 October 2023: 0 GENERAL MANAGER OF THE COMPANY The Chief Executive Ofﬁcer manages the Company‘s operations between board meetings in accordance with the decisions of the board. Among other responsibilities, the CEO implements the resolutions of the board, fulﬁlls tasks derived from the company‘s organizational regulations, and performs other duties within the scope delegated by the board through written authorization. According to the articles of association, the chairman of the board also holds the position of the CEO. As of October 31, 2023, Ing. Igor Rattaj serves as the Chief Executive Ofﬁcer. REMUNERATION OF THE BOARD MEMBERS OF THE PUBLICLY TRADED COMPANIES The company, as a publicly traded entity, is obliged pursuant to Art. § 201a of the Commercial Code to draw up remuneration rules and at the same time is obliged to pay remuneration to members of the bodies in accordance with the approved remuneration rules. On May 31, 2023, the Ordinary General Meeting approved the „Rules of Remuneration of the Bodies of a Public Joint Stock Company“ (hereinafter referred to as the „Remuneration Rules“). The Remuneration Rules regulate the basic remuneration framework and the methods of providing compensation to members of the Company‘s bodies. For the purposes of the Remuneration Rules in accordance with Art. § 201a par. 2 of the Commercial Code means the Company‘s bodies refer to the following: - member of the Board of Directors of the Company - member of the Supervisory Board of the Company - person acting at the highest level of management of the Company, if this position exists in the Company, provided they are not members of the Board of Directors or the Supervisory Board. In accordance with the approved Remuneration Rules, the members of the Board of Directors are provided with the Total Remuneration of a member of the Board of Directors, which consists of: - a ﬁxed component in accordance with point 2.2 of the Remuneration Rules - a variable component in accordance with point 2.3 of the Remuneration Rules - surcharges and other beneﬁts of a member of the Board of Directors In accordance with the Remuneration Rules, the members of the Supervisory Board are provided with the Total Remuneration of a member of the Supervisory Board, which consists of: - a ﬁxed component in accordance with point 3.2 of the Remuneration Rules - a variable component in accordance with point 3.3 of the Remuneration Rules - surcharges and other beneﬁts of a member of the Board of Directors In accordance with §201e of the Commercial Code, the Board of Directors will prepare a “Remuneration Report” and at the same time submit it once a year to the General Meeting for discussion as part of the Annual Report. The Remuneration Report for the Financal Year 2022/2023 is published in an appendix to this Annual Report. The total amount of remuneration paid to the representatives of the Board of Directors, Supervisory Corporate Governance 81 Board members and the top management in 2022/2023 was EUR 0.817 mil. GENERAL MEETING The General Meeting is the Company‘s supreme body. Its competence includes mainly the following: Amendments to the Articles; Decisions on an increase/decrease in the Company‘s registered capital; instructing the Board of Directors to increase the share capital in accordance with Article 210 of the Commercial Code and decisions to issue preferred or convertible bonds; Decisions on termination of the Company and/or change in the legal form; Election and removal of members of the Supervisory Board, except for members of the Supervisory Board elected and removed in accordance with Article 200 of the Commercial Code by employees in accordance with applicable law; Approval of annual individual ﬁnancial statements and extraordinary individual ﬁnancial statements, decisions regarding the distribution of proﬁt or settlement of loss, and decisions on remuneration ; Decisions regarding the termination of trading the Company‘s shares on the stock exchange and decision on the fact that the Company ceases to be a publicly traded company; Decisions on transformation of registered shares into share certiﬁcates and vice versa Decisions regarding the approval of a contract on transfer of business or a part thereof; Approval of the Remuneration Rules of the members of the company‘s bodies and their changes; Approval of contracts for the performance of the function of members of the Supervisory Board; Deciding other issues falling under the competence of the General Meeting in accordance with the Articles and under existing law. The competence of the General Meeting is deﬁned by Act 513/1991 Coll. of the Commercial Code, as amended, and the Company‘s Articles. The General Meeting is comprised of all shareholders, members of the Board of Directors, and members of the Supervisory Board present at the session and/or third parties invited by the Company‘s body (bodies) or shareholders who convened the meeting. Each shareholder is authorized to attend the General Meeting, vote, ask for information and explanations regarding corporate matters and/or entities controlled by the Company, if relevant to the agenda of the General Meeting, and ﬁle proposals. Shareholders can exercise their rights at the General Meeting through authorized representatives who shall prove their authorization by a written power of attorney deﬁning the scope of the authorization. Exercise of the shareholders’ voting rights is not limited in the Articles. The number of votes held by each shareholder is deﬁned by the proportion between the nominal value of the shares held by the shareholder and the amount of registered capital, whilst every EUR 7 of the shares’ nominal value means one voting right. DECISION-MAKING PROCEDURE OF THE GENERAL MEETING The General Meeting decides by majority vote held by the present shareholders. In matters related to amendments of the Articles, an increase or decrease in the registered capital, instructing the Board of Directors to increase the registered capital, the issuance of preference bonds or exchangeable bonds, the termination of the Company or change in the legal format a 2/3 majority of votes of the present shareholders is required and a notarized record shall be prepared on the results of the voting. A 2/3 majority of votes of the present shareholders is also necessary for approval of the General Meeting’s decision on the termination of trading the Company‘s shares on the stock exchange and for the election and removal of members of the Supervisory Board, as well as for the General Meeting’s decision that the Company ceases to be a public joint-stock company and becomes a private joint-stock company. For amendments to the Articles in terms of establishing the option of correspondence voting and for amendments to the Articles in terms of establishing and deﬁning the requirements for attending the General Meeting and for shareholders’ voting through electronic equipment, afﬁrmative votes of 3/5 majority of all votes are required. Minutes of the General Meetings are freely available at the Company‘s website: www.tmr.sk. In the period from 1 November 2022 to 31 October 2023, one session of the General Meeting was convened. It took place on May 31, 2023. ANNUAL GENERAL MEETING At the Annual General Meeting held on 31 May 2023, the shareholders adopted the following key resolutions: 1. Approval of the annual individual ﬁnancial statements as of 31 October 2022 2. Approval of the proposal by the Board of Directors for the distribution of the proﬁt earned in the ﬁscal year starting on November 1, 2021, and ending on October 31, 2022, in the amount of EUR 3,287,469.82. Corporate Governance 82 This distribution involves allocating a portion of the proﬁt, amounting to EUR 328,746.98, to supplement the reserve fund. Another portion of the proﬁt, totaling EUR 16,437.35, will be allocated to the social fund. The remaining portion of the proﬁt, EUR 2,942,285.49, will be transferred to the retained earnings account. 3. Discussion of the report of the company‘s board of directors on the results of business activities, the state of the company‘s assets and ﬁnancial management, the business plan and ﬁnancial budget, the annual report and the report of the supervisory board. 4. Removal of Ing. Bohuš Hlavatý from the position of a member of the Supervisory Board effective June 30, 2023. 5. Election of Ing. Jozef Hodek as a member of the Supervisory Board and approval of the contract for the performance of the function. 6. Election of Ing. Pavel Mikušiak as a member of the Supervisory Board and approval of the contract for the performance of the function. 7. Approval of changes to the Company‘s Articles of Asso- ciation – adding new items to the subject of business ac- tivities and elaborating on the scope of authority of the Board of Directors and the Supervisory Board. 8. Approval of changes to the Remuneration Rules for the ofﬁcials of the public joint-stock company. 9. Approval of the auditor - KPMG Slovensko spol. s.r.o. to audit the ﬁnancial statements for the year ending 31 October 2023 DESCRIPTION OF SHAREHOLDERS’ RIGHTS Legal regulations and Articles of Association hereof regulate the rights and the obligations of the shareholder. Both legal and natural persons may become a shareholder of the Company. The shareholder may not exercise the rights of the shareholder which would affect the rights and professional interests of other shareholders. The company must treat all shareholders on equal terms. The shareholder shall have the right to participate on the management of the Company, on its proﬁts and on its liquidation balance upon the cancellation of the Company with liquidation. The right to participate on the management of the Company shall be exercised by the shareholder by participation at the General Meeting and by execution of the rights related to this participation, whereas the shareholders shall be bounded with the organizational measures applicable to the proceedings of General Meeting. At the General Meeting any shareholder may vote, ask for information and explanations concerning the matters of the Company or the matters of parties controlled thereby, which are related to the agenda of the General Meeting, make proposals, and request to have their suggested topics to be included in the agenda of the General Meeting in accordance with relevant regulations. The date relevant for the exercise of the rights according to previous sentence shall be the day indicated in the notice of General Meeting in accordance with section 180, subsection 2 of the Commercial Code. The shareholder or shareholders holding shares, of which the nominal value equals not less than 5% of the share capital, are entitled to request for convocation of an extraordinary General Meeting by including speciﬁcation of their reason. The shareholder shall be entitled to share the proﬁts generated by the Company (dividend), which were allocated by the General Meeting for their distribution. The shareholder shall not be under the obligation to refund to the Company the dividends obtained in good faith. Following the winding up of the Company with the liquidation the shareholders shall be entitled to share liquidation balance in the amount stipulated by the law. At the Company headquarters the shareholder is entitled to view Company documents that are ﬁled in a document archive or in a ﬁnancial statement register pursuant to a speciﬁc law, and the shareholder is entitled to request copies of these documents or request to have them mailed at a speciﬁed address on the shareholder’s expense and risk. Further details on the shareholders’ rights are described in the Company’s Articles of Association at www.tmr.sk/investor-relations/corporate-governance. SUPERVISORY BOARD REPORT In the ﬁnancial year 2022/2023, the Company‘s Supervisory Board carried out the Company‘s monitoring activities with a total of nine members. In the period from 1 November 2022 to 31 October 2023, the Supervisory Board convened seven (7) meetings of the Supervisory Board: On 24/11/2022 nine members of the Supervisory Board were present. On 02/12/2022 nine members of the Supervisory Board were present. On 01/03/2023 nine members of the Supervisory Board were present. On 25/04/2023 nine members of the Supervisory Board were present. On 31/05/2023 eight members of the Supervisory Board were present. On 03/07/2023 nine members of the Supervisory Board were present. On 06/09/2023 eight members of the Supervisory Board were present. Corporate Governance 83 During the ﬁnancial year ending 31/10/2023 as part of its control function, the Supervisory Board focused on controlling the Board of Directors’ fulﬁllment of its duties assigned by the General Meeting, at monitoring the Board of Directors activity in terms of effective management of the Company, achievement of strategic goals in given conditions and determining the Company’s growth plans, the operating and ﬁnancial activity, the Company’s assets, liabilities and receivables, correct bookkeeping, fulﬁllment of the business plan, ﬁnancial budget, investment plan and compliance with the Company’s Articles of Association, Code of Conduct and general legally binding regulations. The Supervisory Board approved the ﬁnancial plans submitted by the Board of Directors, major investments and other material ﬁnancial and business transactions for the relevant ﬁnancial year and submitted the results of its monitoring activities to the General Meeting. As part of their role, the Supervisory Board members have electronic access to production systems, through which they can get a daily report on the Company’s ﬁnancial performance. The Supervisory Board meetings were always attended also by the chairman of the Board of Directors and members of the Board of Directors. They informed the Supervisory Board members in detail on the Company performance including ﬁnance (CAPEX, Cash Flow, debt service). As part of the performance of the activities of the Audit Committee, the Supervisory Board engaged in cooperation with an external auditor – KPMG Slovensko spol. s.r.o. They discussed the overall approach to the audit of the company as well as the TMR group (as part of the preparation of the Company‘s consolidated ﬁnancial statements as of October 31, 2023). At the same time, the Supervisory Board set a deadline for the external auditor to submit an afﬁdavit of independence and adopted the Declaration of Independence from KPMG . THE COMPANY‘S CORPORATE GOVERNANCE CODE The Company is fully aware of the importance of compliance with the Corporate Governance principles. On 3 November 2010, the Company and its statutory bodies adopted the Corporate Governance Code in Slovakia. Moreover, on 8 October 2012 the Company declared adherence to the Corporate Governance Code principles for companies listed on the Warsaw Stock Exchange. Information on adherence to the codes is available on the Company‘s website www. tmr.sk/investor-relations/corporate-governance. As for the Corporate Governance Code for companies in Slovakia 2016, the Company‘s Corporate Governance fails to comply with this Code in the following items: I.A.5. The right to elect and to remove members of the Company‘s bodies: Partly met. The General Meeting elects and removes members of the Supervisory Board. The Board of Directors is elected and removed by the Supervisory Board. I.C.2.iii. An electronic voting system in absentia, including the electronic distribution of proxy materials and reliable vote conﬁrmation Not met. So far the Company has not enabled attending General Meetings and voting at General Meetings by electronic means. In order to implement the attendance at General Meetings and voting at General Meeting by electronic means, the Articles of Association need to be changed and approved by the 3/5 majority of all the shareholder votes. I.C.4.i. Effective shareholder participation in decisions on the nomination, election and remuneration of board members should be facilitated. Shareholders should be able to participate in the nomination of board members. Partly met. In the scope deﬁned by the valid legal regulations, as part of the discussion regarding the discussed item of the General Meeting’s agenda, shareholders have the right to express their opinion either in writing or verbally. This right is unlimited. Nomination and election of members of the Board of Directors is the responsibility of the Supervisory Board. The General meeting elects and dismisses member of the Supervisory Board. I.C.4.iii. Effective shareholder participation in decisions on the nomination, election and remuneration of board members should be facilitated. Shareholders should be able to make their views known on the remuneration of board members. Partly met. The Company acts in accordance with the Commercial Code and the Articles. The General Meeting approves the Remuneration Rules for members of the Supervisory Board. The Remuneration Rules for members of the Board of Directors are approved by the Supervisory Board. I.C.4.iv. Effective shareholder participation in decisions on the nomination, election and remuneration of board members should be Corporate Governance 84 facilitated. The equity component of compensation schemes for board members and employees should be subject to shareholder approval. Partly met. Currently, the Company does not offer any stock-option compensation schemes. The Company acts in accordance with the Commercial Code and the Articles. The General Meeting approves the Remuneration Rules for members of the Supervisory Board. The Remuneration Rules for members of the Board of Directors are approved by the Supervisory Board. I.C.4.v. Effective shareholder participation in decisions on the nomination, election and remuneration of board members should be facilitated. The remuneration of board members and key executives should be disclosed, the total value of compensation arrangements made and how remuneration and company performance are linked. Partly met. Information on the remuneration of the board members and the management is disclosed in the Annual Report. The Company discloses the general remuneration policy for the members of the Supervisory Board and the Board of Directors, and only the sum of the remuneration of the Supervisory Board, the Board of Directors, and the Top Management. I.C.4.vi. Effective shareholder participation in decisions on the nomination, election and remuneration of board members should be facilitated. Any signiﬁcant change in the remuneration schemes should be approved by shareholders. Partly met. The General Meeting approves the Remuneration Rules for the Supervisory Board and the role contracts of the Supervisory Board members. The Company acts in accordance with the Commercial Code and the Articles. When approving internal regulations the Company acts in accordance with the competencies of the relevant statutory bodies, with the Articles of Association and relevant law. I.C.5.ii i. Non-discriminatory voting of shareholders in absentia should be enabled: Where proxies are held by the board or management for company pension funds, the directions for voting should be disclosed. Not met. The Company does not disclose directions for voting. I.C.6. Ability to vote electronically by non- discriminatory means (if the company enables such voting). Not met. So far the Company does not enable electronic voting at General Meetings. In order to implement the attendance at General Meetings and voting at General Meeting by electronic means, the Articles of Association need to be changed and approved by the 3/5 majority of all the shareholder votes. I.E.1.iii. Non-discriminatory relations with shareholders and transparency of capital structures. Changes in economic and voting rights should be subject to approval by a qualiﬁed majority of the relevant group of shareholders. Partly met. These changes are subject to changes in the Articles of Association, which require the 2/3 majority of the present shareholder votes; the notary meeting minutes need to be prepared. A change in the Articles of Association related to the implementation of possible proxy voting and/or electronic voting is subject to approval by the 3/5 majority of all the shareholder votes. I.E.2. The capital structure and takeover arrangements should be disclosed. Partly met. The Company discloses such information provided that relevant legal regulations require and/or enable such disclosure. IV.A.4.ii. Information on the company’s remuneration: information on the remuneration policy in the upcoming ﬁnancial year or, where appropriate, consecutive years and information on the implementation of the policy in the previous ﬁnancial year. Partly met. The Company discloses the general remuneration policy for the members of the Supervisory Board and the Board of Directors, and only the sum of the remuneration of the Supervisory Board, the Board of Directors, and the Top Management. IV.A.5.ii. Information about board members, executive managers, especially: Information on the qualiﬁcation requirements and the selection process. Partly met. The Company discloses the process of electing members of the Supervisory Board. V.D.4. Remuneration with the longer-term interests of the company and its shareholders. Partly met. The level of basic remuneration is set for each member of the Board of Directors separately Corporate Governance 85 based on the decision of the Supervisory Board upon each member’s nomination. Extraordinary bonuses of the Board of Directors are subject to the fulﬁllment of the EBITDA plan in the previous ﬁnancial year. Remuneration of the Top management is set by and subject to approval by the Board of Directors depending on the performance of the operating segments and resorts of the Company. V.E.1. Boards should consider assigning a sufﬁcient number of non-executive board members where there is a potential for conﬂicts of interest. The board should consider establishing speciﬁc committees to consider questions where there is a potential for conﬂicts of interest. These committees should require a minimum number of non- executive members, or be composed entirely of members of the supervisory board. Partly met. The Supervisory Board is composed of only non-executive members and is responsible for controlling. In case of a conﬂict of interest, the Company acts in accordance with its Code of Conduct and relevant persons are excluded from the decision-making process. The Company does not have such speciﬁc committees established. V.E.2.i. Existence, composition and the role of committees. The nomination committee. Not met. Currently, the Company does not have a nomination committee. Members of the Board of Directors are nominated by the Supervisory Board. V.E.2.ii. Existence, composition and the role of committees. The remuneration committee. Not met. Currently, the Company does not have a remuneration committee. The variable part of the Board of Directors’ remuneration is determined by the Remuneration Rules and is subject to performance achieved by the Company. The Board of Directors’ Remuneration Rules are subject to approval by the Supervisory Board. V.E.4. Regular self-assessment of the company boards, including assessment of correct backgrounds and competences. Not met. Assessment of the activity of the Board of Directors is done by the Supervisory Board. The Supervisory Board’s report has not included self- assessment so far. As to the Best Practices for GPW Listed Companies 2016 required by the Warsaw Stock Exchange, the Company‘s corporate governance does not accord with the Best Practices in the following issues: I.Z.1.3. A company should operate a corporate website and publish on it, in a legible form and in a separate section: a chart showing the division of duties and responsibilities among members of the management board drawn up according to principle II.Z.1; Partially met. Currently, the Company website does not present such chart. However, the website lists members of the Board of Directors with description of their roles, and their short CV. I.Z.1.15. A company should operate a corporate website and publish on it, in a legible form and in a separate section: information about the company’s diversity policy applicable to the company’s governing bodies and key managers; the description should cover the following elements of the diversity policy: gender, education, age, professional experience, and specify the goals of the diversity policy and its implementation in the reporting period; where the company has not drafted and implemented a diversity policy, it should publish the explanation of its decision on its website; Not met. Even though the Company strives to enable equal employment opportunity and employs 57% men and 43% women, it has not yet prepared and implemented a diversity policy for its statutory bodies and top management, thus such policy is not published on the Company website either. Main criteria for selecting candidates for key positions and statutory bodies are competency and fulﬁllment of requirements for a given role; not factors such as sex or age. I.Z.1.20. A company should operate a corporate website and publish on it, in a legible form and in a separate section: an audio or video recording of a General Meeting; Not met. Currently, the Company does not publish audio or video recordings from its General Meetings as the beneﬁt of these recordings is not justiﬁed in comparing to high costs associated with them and they do not ﬁt within the budget for the General Meeting. II.Z.1. The internal division of responsibilities for individual areas of the company’s activity among management board members should be clear and transparent, and a chart describing that division should be available on the company’s website. Corporate Governance 86 Partly met. The Company presents its internal division of responsibilities among members of the Board of Directors on its website in wording. II.Z.3. At least two members of the supervisory board should meet the criteria of being independent referred to in principle II.Z.4. Not met. None of the Supervisory Board members meets the criteria of independence referred to in principle II.Z.4. Even though the Company considers two members of the Supervisory Board, elected by the Company employees, as independent, since they hold non-managerial roles in the Company, according to the current Best Practices for GPW Listed Companies 2016, they cannot be considered independent. II.Z.10.1. In addition to its responsibilities laid down in the legislation, the supervisory board should prepare and present to the ordinary general meeting once per year an assessment of the company’s standing including an assessment of the internal control, risk management and compliance systems and the internal audit function; such assessment should cover all signiﬁcant controls, in particular ﬁnancial reporting and operational controls; Partly met. The Supervisory Board presents to the Annual General Meeting a report prepared according to the legislation and the Company’s Articles of Association. II.Z.10.2. a report on the activity of the supervisory board containing at least the following information: - full names of the members of the supervisory board and its committees; - supervisory board members’ fulﬁlment of the independence criteria; - number of meetings of the supervisory board and its committees in the reporting period; - self-assessment of the supervisory board; Partly met. The Supervisory Board’s report has not so far included a description on supervisory board members’ fulﬁlment of the independence criteria, since the Company automatically considers members, elected by the Company employees and who are not shareholders, as independent. IV.Z.2. If justiﬁed by the structure of shareholders, companies should ensure publicly available real- time broadcasts of general meetings. Not met. The Company has not so far broadcasted its General Meetings publicly, since potential beneﬁt of the General Meeting being broadcasted does not outweigh costs associated with its organizing. The Company does not exclude the possibility of broadcasting its General Meetings in the future, although such decision is subject to the approval of shareholders at the General Meeting by amendment of the Articles of Association. IV.Z.3: Presence of representatives of the media should be allowed at general meetings. Presence of third parties is usually allowed based on the proposal by the Board of Directors at Annual General Meetings. Also at the last Annual General Meetings a proposal was presented by the Board of Directors to allow presence of third parties at the General Meeting. This proposal was adopted by the shareholders and third parties were allowed to attend the General Meeting. The Company does not exclude a possibility that it will allow attendance of third parties at all General Meetings, although such decision would have to be preceded by the approval of the shareholders at the General Meeting in the form of change in Articles of Association. VI.Z.4. In this activity report, the company should report on the remuneration policy including at least the following: 1) general information about the company’s remuneration system; 2) information about the conditions and amounts of remuneration of each management board member broken down by ﬁxed and variable remuneration components, including the key parameters of setting the variable remuneration components and the terms of payment of severance allowances and other amounts due on termination of employment, contract or other similar legal relationship, separately for the company and each member of its group; 3) information about non-ﬁnancial remuneration components due to each management board member and key manager; 4) signiﬁcant amendments of the remuneration policy in the last ﬁnancial year or information about their absence; 5) assessment of the implementation of the remuneration policy in terms of achievement of its goals, in particular long-term shareholder value creation and the company’s stability. Partly met. The Company publishes its general Corporate Governance 87 remuneration rules for the Board of Directors and Supervisory Board and the total sum of remuneration of the Board of Directors, Top Management and Supervisory Board. The Company has not entered into any agreements with any members of bodies or employees under which the company would be obliged to provide such members or employees with any compensation if their ofﬁce or employment terminates by resignation, notice served by the employee, removal, notice served by the employer without giving a reason or if their ofﬁce or employment terminates as a result of an acquisition offer. The Company does not disclose information about non-ﬁnancial remuneration, as it has not been material so far, nor assessment of the implementation of the remuneration policy in terms of achievement of its goals, in particular long-term shareholder value creation and the company’s stability. OTHER SUPPLEMENTARY DATA Tatry mountain resorts, a.s. is the issuer of 6,707,198 shares admitted to trading on the listed parallel market of the Bratislava Stock Exchange, on the main market of the Prague Stock Exchange, and on the main market of the Warsaw Stock Exchange (WSE) with the following structure: ISIN: SK11220010287 Security type and form: ordinary bearer shares Nominal share value: 7.00 EUR Number of shares outstanding: 6,707,198 % share in share capital: 100% Limitation on transferability of shares: none The Company, a.s. during the FY 2013/14 issued two tranches of bonds in the total of EUR 180 mil.: Bonds TMR I 4.50%/ 2018 ISIN: SK4120009606 Volume: 70 000 000 EUR Market: The Bratislava Stock Exchange Nominal Value: 1 000 EUR Coupon Rate: ﬁxed rate 4.50% p.a. Coupon Payment: semi-annual always on 17-06 and 17-12 Maturity Date: 17 December 2018 Issue Date: 17-12-2013 Bonds TMR I 4.50%/ 2018 were senior, secured by a pledge over certain immovable assets owned by the Company. TMR I 4.50% bonds were fully repaid on December 17, 2018. During the ﬁnancial year 2017/18 the Company issued another tranche of bonds: Bonds TMR II 6.0%/ 2021 ISIN: SK4120009614 Volume: 110 000 000 EUR Market: The Bratislava Stock Exchange Nominal Value: 1 000 EUR Coupon Rate: ﬁxed rate 6.00% p.a. Coupon Payment: annual always on 05-02 Maturity Date: 5 February 2021 Issue Date: 05-02-2014 Bonds TMR II 6.0%/ 2021 are junior, subordinated. TMR II 6.0% bonds were fully repaid on February 5, 2021. Bonds TMR III 4.40%/ 2024 ISIN: SK4120014598 Volume: 90 000 000 EUR Market: The Bratislava Stock Exchange Nominal Value: 1 000 EUR Coupon Rate: ﬁxed rate 4.40% p.a. Coupon Payment: semi-annual always on 10-04 and 10-04 Maturity Date: 10 October 2024 Issue Date: 10 October 2018 Bonds TMR III 4.40%/ 2024 are senior bods, secured by a pledge over certain assets owned by the Company. During the FY 2018/19 the Group issued another bonds issue through its subsidiary, TMR Finance CR, a.s.: Bonds TMR F CR 4.50% / 2022 ISIN: CZ0003520116 Volume: 1 500 000 000 CZK Market: The Prague Stock Exchange Nominal Value: CZK 30 000 Coupon Rate: ﬁxed rate 4.50% p.a. Coupon Payment: semi-annual always on 07-05 and 07-11 Maturity Date: 7 November 2022 Issue Date: 7 November 2018 Bonds TMR F CR 4.50% / 2022 constitute direct, general, unconditional, and non-subordinated obligations of the Issuer, secured by a guarantor statement of Tatry mountain resorts, a.s. (the Guarantor). Furthermore, the Bond obligations will be secured by a lien in favor of the Security Agent, Patria Corporate Finance, a.s., for: (i) certain immovable assets owned by the Guarantor in the Slovak Republic; (ii) certain movable assets owned by the Guarantor and its indirect 100% subsidiary Śląskie Wesołe Miasteczko Sp. Zoo. in the Slovak Republic and the Republic of Poland, (iii) a 75% share in the capital of Śląskie Wesołe Miasteczko Sp. Zoo. owned by Tatry Mountain Resorts PL, a.s., which is a 100% direct subsidiary of the Guarantor and (iv) the Guarantor s receivables from Corporate Governance 88 the LTV account. For more information see the Security prospectus available at https://tmr-ﬁnance.cz/zakonne- zverejneni.php. The company fully redeemed the TMR F CR 4.50% / 2022 bonds as of November 7, 2022. During the ﬁnancial year 2020/2021, the Company issued bonds: Bonds TMR V 6.00%/ 2026 ISIN: SK4000018255 Volume: up to 150 000 000 EUR Market: The Bratislava Stock Exchange Nominal Value: 1 000 EUR Coupon Rate: ﬁxed rate 6.00% p.a. Coupon Payment: annual always on 02-02 Maturity Date: 2 February 2026 Issue Date: 2 February 2021 The total value of registered bonds TMR V 6.00%/ 2026 is 110 000 000 EUR. TMR V 6.00%/ 2026 are junior, subordinated bonds. For more information regarding the issued bonds see the Company website: https:// tmr.sk/investorrelations/bonds/. During the ﬁnancial year 2021/2022, the Company issued bonds: Bonds TMR VI 5.40%/ 2027 ISIN: SK4000021713 Volume: up to 65 000 000 EUR Market: The Bratislava Stock Exchange Nominal Value: 1 000 EUR Coupon Rate: ﬁxed rate 5.40% p.a. Coupon Payment: semi-annual always on 28-04 and 28-10 Maturity Date: 28 October 2027 Issue Date: 28 October 2022 The total value of registered bonds TMR VI 5.40%/ 2027 is 59 000 000 EUR. TMR VI 5.40%/ 2027 are senior bods, secured by a pledge over certain assets owned by the Company. For more information regarding the issued bonds see the Company website: https://tmr. sk/investorrelations/bonds/. As of 31/10/2023 the Company has not issued any employee stock or preferred shares. The Company, based on the decision of the General Meeting, may issue bonds, convertible into Company shares (convertible bonds), or bonds with the senior subscription rights to Company shares (preferred bonds), provided that the General Meeting at the same time decides on the conditional raising of share capital. In case of the buy-back of own Company shares with the purpose of their transfer to Company employees, the Article 161a Par. 2 point a) of the Commercial Code shall not be applied. In this case the purchased shares shall be transferred to the Company employees within 12 (twelve) months from their acquisition by the Company. In case of the buy-back of own Company shares with the purpose of preventing an eminent major damage to the Company, the Article 161a Par. 2 point a) of the Commercial Code shall not be applied. The Board of Directors is obliged to inform the next General Meeting about the circumstances according to the Article 161a Par. 4 of the Commercial Code. The voting rights attached to Company shares have no limitations. The holders of securities issued by the Company do not have differing controlling rights. As of 31/10/2023 the Company has no knowledge of any shareholder agreements that might lead to limitations on transferability of the securities and to limitations on voting rights. The Company incurred no research and development costs in FY 2022/23. TMR does not have any branch ofﬁce abroad. The Group utilized ﬁnancial derivative instruments solely for hedging cash ﬂows against currency risk related to the issuance of bonds in Czech crowns. In doing so, the Group chose to manage the currency risk of exchange rate ﬂuctuations through a hedging instrument - a currency swap. As a result of the redemption of the bond in Czech crowns, the accounting related to the hedging of cash ﬂows against currency risk was concluded. The Group does not have any other risks hedged through hedge accounting as these risks are managed in a different way. The cash ﬂows and liquidity ratios are monitored in regular intervals. The Company ensures internal controls through regular monitoring of the ﬁnancial plan and overall ﬁnancial position. Management of market risks, business and ﬁnancial activities is described in the Risk Factors and Risk Management section and in the Consolidated Financial Statements. The Company has not entered into any agreements which would become effective, changed or terminated as a result of change in control, or as a result of an acquisition offer. The Company has not entered into any agreements with any members of bodies or employees under which the company would be obliged to provide such Corporate Governance 89 members or employees with any compensation if their ofﬁce or employment terminates by resignation, notice served by the employee, removal, notice served by the employer without giving a reason or if their ofﬁce or employment terminates as a result of an acquisition offer. During FY 2022/23 the Company prepared Separate Financial Statements in accordance with International Financial Reporting Standards (IFRS). The Company is not subject to any special regulations, which would require disclosure of additional information in terms of Article 34 Par. 2 a) of the Slovak Act No. 429/2002 Coll. in connection with Article 20 Par. 1 g) of the Slovak Act No. 431/2002 Coll. CONTRACTS WITH EXTERNAL ADVISORS AND RELATED PARTIES LEASE OF THE ŠPINDLERŮV MLÝN RESORT Melida, a.s., a company associated with TMR, signed a lease contract on 6 November 2012 as the lessee with the company SKIAREÁL Špindlerův mlýn, a.s., as the lessor. The subject of the contract was the lease of the Špindlerův Mlýn resort in the Czech Republic. As of the date of this report TMR held a 25% interest in Melida, a.s. Based on the lease contract, Melida, a.s. will be operating the ski resort Špindlerův Mlýn in the Krkonoše Mountains for 20 years for the lease fee in the amount of CZK 43.8 mil. per year. Besides the sole operation of Špindlerův Mlýn, Melida committed to provide further development of the resort by expanding trails, renewing technological equipment, and by improving skiers’ experience in any other way with investments in the minimum amount of CZK 800 mil. during the whole lease term. TMR acts in the lease contract as a by-party that provides a guarantee for Melida, a.s. by guaranteeing Melida’s liabilities resulting from the lease contract and by providing it a zero-interest loan. CONTRACTS WITH MELIDA, A.S. Subsidiary company TMR International TMR services, s.r.o. provides Melida, a.s. with consulting services in management and analysis of cableways, dining facilities, ski schools, rentals, shops, in marketing, bookkeeping, and project ﬁnancing. Also TMR provides Melida, a.s. with consulting services on the project of building infrastructure in the Špindlerův Mlýn ski resort. TMR made an agreement with Melida to temporarily lend it employees of TMR in order to boost the winter season and to realize some investments. TMR provided Melida with an interest- bearing loan in 2013 and an interest non-bearing loan in 2014. FINANCIAL AUDIT As of the date of this Annual Report, KPMG Slovensko spol. s.r.o., seated at Dvořákovo nábrežie 10, 811 02 Bratislava, is responsible for the audit of separate and consolidated ﬁnancial statements. KPMG Slovensko spol. s.r.o. has been approved to perform the audit of the Company’s Separate Financial Statements as of 31 October 2023 and Consolidated Financial Statements as of 31 October 2023 based on the decision of the General Meeting held on 31 May 2023. ADVISORS As of the date of this Annual Report, the Company had a contract signed with Ernst & Young seated at Žižkova 9, Bratislava 811 02, on the provision of advisory services in preparation of ﬁnancial statements and the provision of advisory services related to non- ﬁnancial reporting. PROPOSAL ON DISTRIBUTION OF PROFIT For the year ended 31 October 2023, the Company achieved net proﬁt of EUR 2.712 mil. according to Individual Financial Statements. The Board of Directors proposes the following distribution of the proﬁt: 1. EUR 271 ths. will be allocated to the reserve fund. 2. EUR 13 ths. will be allocated to the social fund, based on the Collective Agreement. 3. The balance in the amount of EUR 2,428 mil. will be transferred to the retained earnings account. Corporate Governance SHARES 92 SHAREHOLDER CLUB TMR and individual shareholders have come together in partnership based on trust in order to move successfully forward, create loyalty with special offers in the region’s most popular resorts, and to increase the number of registered shareholders. For this reason Shareholder Club was established at the beginning of 2010. Shareholders who own at least 500 shares have the right to beneﬁts that help them to get to know the Group and its activities better through special deals as part of the GOPASS program. You can ﬁnd more information on https:// tmr.sk/en/shareholder-club. Shares * BSSE - the Bratislava Stock Exchange WSE - the Warsaw Stock Exchange PSE - the Prague Stock Exchange Closing Price BCPB (EUR) WSE (PLN) BCPP (CZK) 31.10.2023 24,40 116,00 615,00 31.10.2022 24,00 130,00 610,00 18 € 20 € 22 € 24 € 26 € 28 € 30 € 2.11.22 2.12.22 2.1.23 2.2.23 2.3.23 2.4.23 2.5.23 2.6.23 2.7.23 2.8.23 2.9.23 2.10.23 TMR Stock Performance on the BSSE 93 Shares Company / Name No. of Shares Interest in Share Capital Voting Rights % in EUR thousands % C.I. CAPITAL INDUSTRIES LIMITED 1 973 197 13 812 29,4% 29,4% Retail Shareholders 1 791 636 12 541 26,7% 26,7% FOREST HILL COMPANY, s.r.o. 1 030 919 7 216 15,4% 15,4% RMSM1 LIMITED 992 666 6 949 14,8% 14,8% DIAMCA INVESTMENTS LIMITED 918 780 6 431 13,7% 13,7% Total 6 707 198 46 950 100,0% 100,0% C.I. CAPITAL INDUSTRIES LIMITED Retail Shareholders <5% FOREST HILL COMPANY, s.r.o. RMSM1 LIMITED DIAMCA INVESTMENTS LIMITED 29,4% 26,7% 15,4% 14,8% 13,7% Shareholder Structure as of 31.10.2023 SHAREHOLDER STRUCTURE To the best of the Company’s knowledge the following entities held the following direct or indirect interest in the share capital and the Company voting rights as of 31/10/2023: CONSOLIDATED FINANCIAL STATEMENTS 96 Consolidated Financial Statements Tatry mountain resorts, a.s., Subsidiaries, Joint Ventures and Associates Consolidated Financial Statements for the Period from 1 November 2022 to 31 October 2023 prepared in accordance with the International Financial Reporting Standards ("IFRS") as adopted by the European Union 97 Consolidated Financial Statements Consolidated Statement of Profit and Loss and Other Comprehensive Income in TEUR Note 1.11.2022 - 31.10.2023 1.11.2021 - 31.10.2022 Sales 6 188 379 132 119 Total revenue 188 379 132 119 Material and goods consumption 7 -24 687 -19 070 Purchased services 8 -51 468 -39 679 Personnel expenses 9 -54 422 -43 244 Other operating expenses 10 -2 043 -1 758 Other operating income 11 3 447 4 843 Gain / (loss) on revaluation of investment property 17 - -906 Impairment losses to financial assets 20,21,22,23,25 160 1 391 Profit / (loss) before interest, taxes, depreciation and amortization (EBITDA) 59 366 33 696 Depreciation and amortization 14,16 -25 637 -23 388 Depreciation of right-of-use assets 15 -5 844 -5 863 Gain on bargain purchase 5 - 13 162 Impairment of non-current assets 14,16 -4 528 -5 977 Profit / (loss) before interest, taxes (EBIT) 23 357 11 630 Interest income calculated using effective interest rate 12 238 47 Financing cost 12 -27 574 -22 915 Net profit / (loss) on financial operations 12 6 889 -2 356 Share of profit or (loss) from disposal of subsidiaries 5 - -482 Share of profit or (loss) on equity-accounted investees 5 -355 -163 Profit / (loss) before tax 2 555 -14 239 Current income tax 13 -1 919 -776 Deferred income tax 13 -1 184 3 068 Profit / (loss) -548 -11 947 Attributable to: - Holders of interest in the parent company's equity -497 -11 361 - Non-controlling interest -51 -586 Other components of the comprehensive income Other comprehensive income that may be reclassified to profit or (loss) in subsequent periods (net of tax): Net gain/(loss) on cash flow hedges 30 2 602 -1 103 Foreign currency translation reserve 26 -3 148 550 Total comprehensive income / (expense) -1 094 -12 500 98 Consolidated Financial Statements Consolidated Statement of Profit and Loss and Other Comprehensive Income (continued) Total comprehensive income / (expense) -1 094 -12 500 Attributable to: - Holders of interest in the parent company's equity -1 040 -11 912 - Non-controlling interest -54 -588 Basic and diluted earnings per share (in EUR) 26 -0,074 -1,694 Number of shares 6 707 198 6 707 198 EBITDA represents a profit from recurring activities of the Group before taxes, interest, amortisation and depreciation, adjusted for other income and expenses, which are listed under EBITDA, in particular profit / (loss) from financial operations representing foreign exchange gains / (losses). The EBITDA indicator adjusted in this way is used by the Group's management to manage the Group's performance as well as individual CGUs (cash-generating units). The Notes on pages 103 to 177 constitute an integral part of the Consolidated Financial Statements. An overview of the statement of profit and loss by particular segments is in Note 4 – Information about operating segments. 99 Consolidated Financial Statements 99 Consolidated Statement of Financial Position in TEUR Note 31.10.2023 31.10.2022 Assets Goodwill and intangible assets 16 35 431 35 605 Property, plant and equipment 14 414 566 404 962 Right-of-use assets 15 59 018 70 499 Investment property 17 6 663 7 411 Investment in an associate and a joint venture 5 13 219 13 552 Loans provided 20 1 245 894 Other receivables 22 506 508 Deferred tax asset 18 5 296 4 182 Total non-current assets 535 944 537 613 Inventory 19 9 471 4 507 Trade receivables 21 5 537 4 872 Loans provided 20 1 426 1 215 Other receivables 22 1 838 4 172 Financial investments 24 39 42 Cash and cash equivalents 25 17 727 15 600 Other assets 23 7 652 6 646 Total current assets 43 690 37 054 Assets total 579 634 574 667 Equity 26 Share capital 46 950 46 950 Share premium 30 430 30 430 Retained earnings -50 872 -50 029 Other reserves 7 534 4 603 Foreign currency translation reserve -1 446 1 699 Total equity attributable to holders of interest in the parent company's equity 32 596 33 653 Non-controlling interest -700 -646 Total equity 31 896 33 007 Liabilities Loans and borrowings 27 106 420 112 679 Lease liabilities 28 63 838 58 489 Trade payables and other payables 29 864 3 630 Provisions 33 167 141 Other non-current liabilities 32 12 741 13 079 Bonds issued 34 166 643 198 496 Deferred tax liability 18 29 597 26 730 Total non-current liabilities 380 270 413 244 Loans and borrowings 27 11 462 10 151 Lease liabilities 28 8 440 8 609 Trade payables and other payables 29 25 214 22 226 Contract liabilities 31 19 810 15 571 Provisions 33 422 472 Bonds issued 34 94 621 67 690 Corporate income tax liability 13 1 516 - Other current liabilities 32 5 983 3 697 Total current liabilities 167 468 128 416 Total liabilities 547 738 541 660 Total equity and liabilities 579 634 574 667 The Notes on pages 103 to 177 constitute an integral part of the Consolidated Financial Statements. 100 Consolidated Statement of Changes in Equity in TEUR Share capital Share premium Legal reserve fund Fair value revaluation reserve Hedging revaluation reserve Foreign currency translation reserve Accumulated losses Equity attributable to holders of interest in the parent company’s equity Non- controlling interest Total Balance as at 1 November 2022 46 950 30 430 7 021 184 -2 602 1 699 -50 029 33 653 -646 33 007 Transfer of retained earnings into the legal reserve fund - - 329 - - - -329 - - - Contributions to the social fund - - - - - - -17 -17 - -17 Profit / (loss) for the period - - - - - - -497 -497 -51 -548 Other components of comprehensive income, after tax - items with possible subsequent reclassification to profit/(loss): Cash Flow hedge - - - - 2 602 - - 2 602 - 2 602 Foreign currency translation reserve - - - - - -3 145 - -3 145 -3 -3 148 Total comprehensive income for the period - - 329 - 2 602 -3 145 -843 -1 057 -54 -1 111 Transactions with owners posted directly into equity Effect of disposal of a subsidiary - - - - - - - - - - Total transactions during the year - - - - - - - - - - Balance as at 31 October 2023 46 950 30 430 7 350 184 - -1 446 -50 872 32 596 -700 31 896 Consolidated Financial Statements 101 Consolidated Statement of Changes in Equity (continued) in TEUR Share Capital Share premium Legal reserve fund Fair value revaluation reserve Hedging revaluation reserve Foreign currency translation reserve Accumulated losses Equity attributable to holders of interest in the parent company’s equity Non- controlling interest Total Balance as at 1 November 2021 46 950 30 430 7 021 184 -1 499 1 147 -38 668 45 565 -442 45 123 Profit / (loss) for the period - - - - - - -11 361 -11 361 -586 -11 947 Other components of comprehensive income, after tax - items with possible subsequent reclassification to profit/(loss): Cash Flow hedge - - - - -1 103 - - -1 103 - -1 103 Foreign currency translation reserve - - - - - 552 - 552 -2 550 Total comprehensive income for the period - - - - -1 103 552 -11 361 -11 912 -588 -12 500 Transactions with owners posted directly into equity Effect of disposal of a subsidiary - - - - - - - - 384 384 Total transactions during the year - - - - - - - - 384 384 Balance as at 31 October 2022 46 950 30 430 7 021 184 -2 602 1 699 -50 029 33 653 -646 33 007 The Notes on pages 103 to 177 constitute an integral part of the Consolidated Financial Statements. Consolidated Financial Statements 102 Consolidated Cash Flow Statement in TEUR Note 1.11.2022 - 31.10.2023 1.11.2021 - 31.10.2022 OPERATING ACTIVITIES Loss -548 -11 947 Adjustments related to: Gain on disposal of property, plant and equipment and intangible assets 14,16 -2 002 -3 341 Depreciation and amortisation 14,16 25 637 23 388 Depreciation of right-of-use assets 15 5 844 5 863 Impairment losses to financial assets 20,21,22,23,25 -160 -1 391 Impairment of non-current assets 14,15 4 528 5 977 Net (gain) / loss on financial instruments (non-cash) 5 -6 889 2 356 Share of (profit) or loss of investments in joint ventures and associates accounted for using equity method 5 355 163 Loss from disposal of subsidiaries 5 - 482 (Profit) / loss on revaluation of investment property 17 - 906 Net interest (income)/ expenses 12 27 336 22 869 Gain on bargain purchase 5 - -13 162 Change in provisions 33 -23 -366 Income tax 13 3 103 -2 292 Change in trade receivables, other receivables and other assets 21,22,23 3 858 -2 703 Change in inventories 19 -4 964 -397 Change in trade payables and other liabilities 29, 32 6 176 5 809 Cash flow from operating activities before income tax 62 251 32 214 Income tax paid -822 757 Cash flow from operating activities 61 429 32 971 INVESTING ACTIVITIES Acquisition of property, plant and equipment and intangible assets 14,16 -22 654 -23 535 Proceeds from disposal of property, plant and equipment and intangible assets 14,16 4 090 7 495 Net cash income/ (expenditure) from the purchase of subsidiaries 5 - -6 833 Proceeds from the sale of shares in subsidiaries 5 - 2 346 Loans provided 20 -920 -246 Repayment of loans provided 20 389 331 Proceeds from disposal of financial investments 24 3 - Interest received 12 9 9 Cash flow from investing activities -19 083 -20 433 FINANCING ACTIVITIES Repayment of lease liabilities 28 -6 589 -7 596 Repayment of received loans and borrowings 27 -8 691 -22 552 Loans and borrowings received 27 2 928 34 112 Bonds issued 34 56 457 1 518 Repayment of bonds 34 -61 127 - Interest paid 12 -23 197 -17 973 Cash flow from financing activities -40 219 -12 491 Net increase of cash and cash equivalents 2 127 47 Cash and cash equivalents at the beginning of the year 25 15 600 15 553 Cash and cash equivalents at end of the year 25 17 727 15 600 The Notes on pages 103 to 177 constitute an integral part of the Consolidated Financial Statements. Consolidated Financial Statements 103 Notes to the Consolidated Financial Statements Content 1. Information about the Company ............................................................................................................................... 104 2. Significant Accounting Policies ............................................................................................................................... 106 3. Significant Accounting Estimates and Assumptions ................................................................................................ 121 4. Information about Operating Segments .................................................................................................................... 127 5. Increase, Decrease and Sale of Shares in Companies ............................................................................................... 130 6. Sales ......................................................................................................................................................................... 135 7. Consumption of Material and Goods ....................................................................................................................... 135 8. Purchased Services ................................................................................................................................................... 136 9. Personnel Expenses .................................................................................................................................................. 136 10. Other Operating Expenses ........................................................................................................................................ 138 11. Other Operating Income ........................................................................................................................................... 138 12. Finance Income and Expenses .................................................................................................................................. 138 13. Current and Deferred Income Tax ............................................................................................................................ 139 14. Property, Plant and Equipment ................................................................................................................................. 142 15. Right-of-use Assets .................................................................................................................................................. 145 16. Goodwill and Intangible Assets ................................................................................................................................ 146 17. Investment Property ................................................................................................................................................. 147 18. Deferred Tax Asset, Deferred Tax Liability ............................................................................................................. 148 19. Inventories ................................................................................................................................................................ 149 20. Loans Provided ......................................................................................................................................................... 150 21. Trade Receivables .................................................................................................................................................... 151 22. Other Receivables .................................................................................................................................................... 152 23. Other Assets ............................................................................................................................................................. 152 24. Financial Investments ............................................................................................................................................... 153 25. Cash and Cash Equivalents ...................................................................................................................................... 153 26. Equity ....................................................................................................................................................................... 153 27. Loans and Borrowings .............................................................................................................................................. 156 28. Lease Liabilities ....................................................................................................................................................... 158 29. Trade Payables and other payables ........................................................................................................................... 159 30. Hedge Accounting .................................................................................................................................................... 160 31. Contract liabilities .................................................................................................................................................... 162 32. Other Liabilities ........................................................................................................................................................ 162 33. Provisions ................................................................................................................................................................. 163 34. Bonds Issued ............................................................................................................................................................ 164 35. Fair Value Information ............................................................................................................................................. 166 36. Changes in Liabilities Arising from Financial Activities ......................................................................................... 166 37. Information about Risk Management ....................................................................................................................... 167 38. Related Parties .......................................................................................................................................................... 172 39. Subsequent Events .................................................................................................................................................... 173 40. Capital Commitments and Capital Management ...................................................................................................... 173 41. Contingent Assets and Contingent Liabilities .......................................................................................................... 174 42. Companies within the Group .................................................................................................................................... 175 Consolidated Financial Statements 104 Consolidated Financial Statements 1. Information about the Company Tatry mountain resorts, a.s. (the "Parent Company" or the "Company") is a joint stock company with its registered office and place of business in Demänovská Dolina 72, 031 01 Liptovský Mikuláš. The Company was established on 20 March 1992 and incorporated on 1 April 1992. The Company’s identification number is 31 560 636 and its tax identification number is 2020428036. The Company is not a fully liable partner in other accounting entities. The Company's shares have been registered on the Bratislava Stock Exchange since 19 November 1993, on the Warsaw Stock Exchange (WSE) since 15 October 2012 and on the Prague Stock Exchange (BCCP) since 22 October 2012. The structure of the Company's shareholders is described in part 26 - Equity. The consolidated financial statements of the Group for the period ending 31 October 2023 comprise the statements of the parent company, its subsidiaries, joint ventures and associates (together referred to as the “Group”). The principal activities of the Group include cable and ski lift operations, restaurant and dining services, the operation of ski and snowboard schools, purchase and sale of goods, hotel management, operation of an amusement park and golf resorts. On 1 November 2020, there was a merger of the Parent Company with 1. Tatranská, akciová spoločnosť (“1. Tatranská”). As at 1 May 2021, the Group expanded its portfolio by adding the subsidiary Muttereralm Bergbahnen Errichtungs GmbH (100% share). On 4 June 2021, GOPASS, a.s. was founded with registered capital of EUR 25 thousand. The Parent Company became its sole shareholder. On 29 October 2021, the Parent Company sold Aquapark Tatralandia and Holiday Village Tatralandia assets to its subsidiary TMR Parks, a.s. (former name: Tatry mountain resorts PL, a.s.), but the Parent Company continues to operate them. On 31 March 2022, the Group acquired a 100% share and control in WORLD EXCO s.r.o. The acquired company operates a congress center in Bešeňová. On 31 March 2022, the Group also acquired a 100% share and control in EUROCOM Investment, s.r.o. The acquired company operates the Bešeňová water park, Hotel Galeria Thermal and Hotel Bešeňová. On 22 June 2022, for the purpose of providing services within the TMR Group, International TMR services s.r.o. was founded, 100% owned by the Company. On 1 July 2022, the Company acquired a 100% share in the European company GOPASS SE, which will serve the purpose of expanding in the European market. On 30 September 2022, the Group sold its 51% stake in Tikar d.o.o. On 1 November 2022, the companies EUROCOM Investment, s.r.o and WORLD EXCO, s.r.o were merged and the company EUROCOM Investment s.r.o became the legal successor. On 8 November 2022, GOPASS SE, a branch in Slovakia, was founded. It is an enterprise of a foreign entity of a European company - a subsidiary of GOPASS SE. As at 1 April 2023, the cross-border merger of GOPASS a.s. as a dissolving company with the successor company GOPASS SE took effect. The decisive date for the merger is 1 November 2022. GOPASS a.s. ceased to exist as a result of a cross-border merger without liquidation as at 1 April 2023. On 28 June 2023, TMR Real Estate, s.r.o. was established for the purpose of real estate activities, and the Company became its sole shareholder. On 26 September 2023, the company Štrbské Pleso resort, s. r. o. was established, and the Company became its 100% -owner. The average number of Group employees and information about used the services of employment agencies for short-term personnel leasing are described in part 9 – Personnel expenses. 105 Consolidated Financial Statements The Group ’s bodies are: Board of Directors: Ing. Igor Rattaj, the Chairman Ing. Zuzana Ištvánfiová, the Vice Chairman (since 1.6.2023) Ing. Jozef Hodek, the Member (to 30.6.2023) Čeněk Jílek, the Member Supervisory Board: Ing. Jozef Hodek (since 1.7.2023) Ing. Bohuš Hlavatý ( to 30.6.2023) Ing. František Hodorovský Roman Kudláček Ing. Andrej Devečka Ing. Pavol Mikušiak Adam Tomis Mgr. Marek Schwarz Ivan Oško Miroslav Roth 106 Consolidated Financial Statements 2. Significant Accounting Policies (a) Statement of compliance The Consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (“IFRS”) as adopted by the EU and in accordance with Act No. 431/2002 Coll. of the National Council of the Slovak Republic on Accounting (“Act on Accounting”). The Consolidated financial statements have been prepared for the period from 1 November 2022 to 31 October 2023. The financial statements were approved by the Board of Directors on 29 February 2024. (b) Basis of preparation The Consolidated financial statements have been prepared based on the historical cost principle, while the investment property and financial instruments measured at fair value were revalued to their fair value through profit or loss. The Group's Consolidated financial statements have been prepared on a going-concern basis (for more details see also Note 39 – Subsequent events). The Group's management expects that the Group has sufficient resources to continue as a going concern for at least another 12 months and that the preparation of the financial statements, assuming the continuity of its operations, is appropriate. The Group consistently plans the future development of the financial position, cash flows and operational results. It monitors the development of its financial results against financial plans and previous periods. It evaluates external factors, such as interest rates, unemployment, inflation, and others, in all its relevant markets. It uses the information and assumptions of developments in the preparation of long-term plans and cash flow projections, considering the needs for financing its operations. It is essential for the Group to meet its required capital commitments and ensure sufficient cash liquidity. The Group regularly monitors these parameters with an emphasis on maintaining sustainability of its business and functioning on a going concern basis. It adapts its strategy and management to the needs of meeting its commitments and investment needs of its resorts. The Group does not have and does not foresee any cash flow management issues for the next period. The Group considers the impact of macroeconomic developments in its plans and management and considers the current situation to be manageable. The Group, in its plans and management, takes into account the impacts of macroeconomic development and considers the current situation to be manageable. Thanks to investments into snowmaking, it was possible to open the ski season earlier than usual in several resorts in December 2023. At the same time, favorable weather conditions allowed for a wider-scale opening of the resorts, which resulted in an increased number of visitors at the resorts and hotels. Consequently, planned revenues and financial results have been exceeded above the expectations. The consolidated financial statements have been prepared in EUR thousands. The accounting methods were consistently applied by the companies in the Group in accordance with the previous accounting period. The preparation of financial statements in compliance with the International Financial Reporting Standards as adopted by the EU requires the application of various judgements, assumptions and estimates which affect the reported amounts of assets, liabilities, income and expenses. However, actual results will likely differ from these estimates. Significant accounting estimates and judgements which were made by management, and which bear a significant risk of material adjustment in the next accounting period are discussed in Note 3 – Significant accounting estimates and assumptions. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of revision and also in future periods if the revision affects both current and future periods. (c) Adoption of new standards and interpretations The accounting principles used are consistent with the accounting principles and methods used when preparing the individual financial statements for the financial year ended 31 October 2023. 107 Consolidated Financial Statements In the course of the accounting period starting on 1 November 2022 the Group implemented the following new IFRS standards, amendments to standards and IFRIC interpretations. The application of these standards had no impact on the financial statements of the Group. • Amendments to IFRS 3 “Business Combinations” – adopted by the EU on 28 June 2021 (effective for annual periods beginning on or after 1 January 2022), • Amendments IAS 16 “Property, Plant and Equipment” – adopted by the EU on 28 June 2021 (effective for annual periods beginning on or after 1 January 2022), • Amendments IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” – adopted by the EU on 28 June 2021 (effective for annual periods beginning on or after 1 January 2022), • Annual amendments to various standards due to “IFRS quality improvement project (cycle 2018 – 2020)” – resulting from the annual IFRS quality improvement project, the main aim of which is to eliminate inconsistencies and clarify the wording – adopted by the EU on 28 June 2021 (effective for annual periods beginning on or after 1 January 2022). (d) International financial reporting standards that were issued but not yet effective The Group did not apply any International Financial Reporting Standards as adopted by the European Union before the date they become effective. In case that the transition arrangements allow entities to choose between prospective or retrospective approach, the Group decided to apply these standards prospectively. As at 31 October 2023, the following International Financial Reporting Standards, amendments to standards and interpretations as adopted by the European Union were issued but not yet effective, and have not been applied by the Group in preparing these financial statements: • Amendments to IFRS 17 Insurance contracts - Initial application of IFRS 17 and IFRS 9 - Comparative information – adopted by the EU on 8 September 2022 (effective for annual periods beginning on or after 1 January 2023), • Amendments to IAS 12 Income taxes – Deferred tax relating to assets and liabilities arising from a single transaction - adopted by the EU on 11 August 2022 (effective for annual periods beginning on or after 1 January 2023), • Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies – adopted by the EU on 2 March 2022 (effective for annual periods beginning on or after 1 January 2023), • Amendments to IAS 8 Accounting principles, Changes in accounting estimates and errors - Definition of accounting estimates – adopted by the EU on 2 March 2022 (effective for annual periods beginning on or after 1 January 2023), • IFRS 17 Insurance contracts; including Amendments to IFRS 17 – adopted by the EU on 19 November 2021 (effective for annual periods beginning on or after 1 January 2023). The Group anticipates that the issuance of new but not yet effective International Standards will not affect the financial statements. (e) Leases The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Group as a lessee The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. 108 Consolidated Financial Statements i. Right-of-use assets The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows: • Buildings and land 30 years • Individual movables and sets of movables ▪ Works of art 20 years ▪ Billboards and advertising space 10 years ▪ Snow groomers 8 years ▪ Other 5 years If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment. Refer to the accounting policies related to impairment of non-financial assets in note 2(l) Impairment of non-financial assets. ii. Lease liabilities At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses in the period in which the event or condition that triggers the payment occurs. The Group does not apply the practical expedient in IFRS 16.15. Every contract is examined to determine whether it contains a non-lease components in addition to lease components. Non-lease components are separated from the lease components, and only the lease components are accounted for in accordance with the provisions of IFRS 16. In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. When revaluing lease liability due to a lease modification, residual value of the right-of-use asset is adjusted for the revaluation difference. Right-of-use asset is further depreciated from this adjusted value. The Group’s lease liabilities are included in Lease liabilities (see Note 28). iii. Short-term leases and leases of low-value assets The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). The Group also applies the lease of low-value assets recognition exemption to leases of items of low value - below EUR 109 Consolidated Financial Statements 1,000. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term. Group as a lessor Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit or loss due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned. In the case of leases, in which the Group transfers substantially all the risks and rewards of ownership of the asset, are classified as finance leases. The leased asset is derecognised and the Group recognizes a financial asset measured at amortized cost, representing the present value of the lease payments, adjusted as in lease liabilities. In case that the Group leases right-of-use assets, which it further sublets as a lessor to other lessees, the Group evaluates the lease provided to the lessee on whether it is an operating or financial sublease. The only different criterion compared to leasing own assets is the assessment of the sublease against the right-of-use and not the original underlying asset. After assessing whether it is a financial or operating lease, it is subsequently reported in terms of accounting policies for the Group as a lessor. (f) Financial instruments i. Initial recognition and measurement of financial asset Financial assets upon initial recognition are classified in one of three categories as financial assets subsequently measured at amortized cost, fair value through other comprehensive income (OCI) and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group ’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient (ie. the Group measures life-time credit losses). The Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price determined under IFRS 15. In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. The Group ’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. ii. Subsequent measurement For purposes of subsequent measurement, financial assets are classified in four categories: 110 Consolidated Financial Statements • financial assets at amortised cost (debt instruments), • financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments), • financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments), • financial assets at fair value through profit or loss. iii. Financial assets at amortised cost (debt instruments) The Group measures financial assets at amortised cost if both of the following conditions are met: • the financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows, and • the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. The Group ’s financial assets at amortised cost includes Trade receivables, Other receivables and Loans provided. iv. Financial assets at fair value through OCI without recycling of cumulative gains and losses upon derecognition (equity instruments) The Group decided to measure equity instruments at fair value through OCI if both of the following conditions are met: • the equity instrument is an instrument neither in Associate, nor in Subsidiary, • the equity instrument is not held for trading. v. Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised when: • the rights to receive cash flows from the asset have expired, or • the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass - through’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. vi. Impairment of financial assets The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). For trade receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a method, that is based on its historical credit loss experience, adjusted for forward-looking factors specific 111 Consolidated Financial Statements to the debtors and the economic environment. For financial assets, where simplified approach is not used – Loans provided, significant increase in credit risk since initial recognition is assessed on an individual basis. The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows. Derivative financial instruments and hedge accounting Initial recognition and subsequent measurement The Group uses derivative financial instruments, such as foreign currency swaps to hedge its foreign currency risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. For the purpose of hedge accounting, hedges are classified as: • cash flow hedges when hedging the exposure to variability in cash flows that is either attributable to a particular risk associated with a recognised asset or liability. The Group does not use any other form of hedges. At the beginning of the hedging relationship will be formally defined and documented hedging relationship and objective and strategy of an entity's risk management to ensure implementation. The documentation includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the Company will assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the hedge ratio is determined). A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements: • There is ‘an economic relationship’ between the hedged item and the hedging instrument. • The effect of credit risk does not ‘dominate the value changes’ that result from that economic relationship. • The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item. Hedges that meet all the qualifying criteria for hedge accounting are accounted for, as described below: Cash flow hedges That part of the gain or loss on the hedging instrument that is determined as effective hedging (i.e. that part that is offset by a change in the cash flow hedge provision) is recognized in other comprehensive income (OCI) until any remaining gain or loss on the hedging instrument (or any gain or loss required to offset a change in a cash flow hedge provision) represents a hedge ineffectiveness recognized in profit or loss. 112 Consolidated Financial Statements The separate component of equity related to the hedged item (cash flow hedge reserve) is adjusted to the lower of the following values (in absolute terms): i) the cumulative gain or loss on the hedging instrument since the inception of the hedge and ii) the cumulative change in the fair value (present value) of the hedged item (i.e. the present value of the cumulative change in the hedged expected future cash flows) since the inception of the hedge. The Group uses swap currency contracts as hedges of its exposure to foreign currency risk in loans taken out in foreign currencies. If the hedged expected transaction subsequently results in the recognition of a non-financial asset or non-financial liability, or if the hedged expected transaction with a non-financial asset or non-financial liability becomes a liability to which fair value hedge accounting applies, the entity removes that amount from the cash flow hedge provision and includes it directly in the initial cost or other carrying amount of the asset or liability. It does not constitute a reclassification adjustment (see IAS 1) and therefore does not affect the other components of the comprehensive income. For other cash flow hedges, the amount is reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment in the same period or periods during which the hedged expected future cash flows have an impact on profit or loss. When an entity ceases to account for a cash flow hedge, the amount that has accumulated in the cash flow hedge reserve remains in the cash flow hedge reserve until future cash flows are expected, otherwise the amount is immediately reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment. (g) Basis for consolidation i. Subsidiaries Subsidiaries are those enterprises that are controlled by the Group. The control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an enterprise, so as to obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. The consolidated financial statements include the Group's interests in other entities based on the Group's power to control such entities regardless of whether the control is actually exercised or not. The financial statements of subsidiaries are included in the consolidated financial statements from the day of origin of the control until the day of cessation of the control. ii. Associates Associates are those enterprises in which the Group has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when a company holds between 20 and 50 percent of the voting rights of another entity. Investment in associate is recognised initially at cost. The consolidated financial statements include the Group's interest in the reported profits and losses of associates according to the equity method from the date of origin of significant influence until the date of cessation of the substantial influence. The investment is initially recognized at acquisition cost. At the subsequent valuation when the Group's share of the losses exceeds the carrying amount of the associate, the carrying amount of that company is reduced to zero and the recognition of future losses is discontinued, except when the Group has incurred any liabilities in respect of the associate. iii. Joint ventures A joint venture is a joint arrangement where two or more participants carry out an economic activity that is subject to joint control, through which the Group has a right to the net assets of the arrangement but not a right to assets and obligation for liabilities related to that arrangement. Joint control is the contractually agreed sharing of control of an arrangement. Joint ventures are carried at cost. The consolidated financial statements include the Group’s share of the total recognised gains and losses of joint ventures on an equity method basis, from the date that joint control commences until the date that joint control ceases. 113 Consolidated Financial Statements The cost of jointly controlled (associated) ventures is derived from the amount of spent cash or cash equivalents or is recognised at fair value of contributed assets and liabilities to acquire the enterprise at the moment of acquisition. Costs related to acquisition (transaction costs) are included in the cost of the investment. As at the reporting date of the consolidated financial statements, the management reconsiders whether any events occurred which could cause impairment of jointly controlled (associated) ventures. Potential impairment of financial investments below their cost is recognised through a value adjustment. Value adjustments are derived from the value of future cash flows discounted to present value. iv. Scope of consolidation The list of all companies included in the consolidation is provided in Note 42 – Companies within the Group. v. Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised gains or losses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. vi. Acquisition method of accounting Acquisitions of subsidiaries are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the acquirer, liabilities incurred by the acquirer to the former owners of the acquiree and the equity interests issued by the acquirer. Acquisition-related costs are recognised directly in profit or loss. The acquiree's identifiable assets acquired and the liabilities assumed that meet the recognition criteria under IFRS 3 are recognised at their fair value at the acquisition date. Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Otherwise, the difference is reassessed and any excess remaining (gain on bargain purchase) after the reassessment is recognised directly in profit and loss. The non-controlling interest is measured as a proportionate share of identifiable assets of the acquiree’s identifiable assets. vii. Unification of accounting principles The accounting principles and procedures applied by the consolidated companies in their financial statements were unified in the consolidation and comply with the principles applied by the Parent company. (h) Foreign currency Foreign currency transactions Items included in the financial statements of the Group are measured using the currency of the primary economic environment in which the Group operates (the functional currency). The consolidated financial statements are presented in thousands of euros, which is the Group's presentation currency and Parent Company’s functional currency. Transactions in foreign currencies are translated into euros at the foreign exchange rate valid at the date immediately preceding the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into euros at the financial statements date at the exchange rate of the European Central Bank valid at that day. 114 Consolidated Financial Statements Foreign exchange differences arising from such translations are recognised through profit or loss. Non-monetary assets and liabilities denominated in foreign currencies, which are measured at cost, are translated into euros using the exchange rate valid at the date immediately preceding the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated into euros at the foreign exchange rates valid at the dates the fair values are determined. Foreign currency translation reserve includes all foreign exchange differences that arise from the transfer of financial statements of foreign entities within the consolidation group. Conversion of foreign operations The results and financial position of a foreign operation are translated into the presentation currency so that the foreign operation can be included in the financial statements of the reporting entity upon full consolidation. The results and financial position are translated into another presentation currency, where: a) Assets and liabilities for each presented statement of financial position (i.e. including comparable data) are translated at the closing rate valid on the date on which this statement of financial position was prepared. b) Revenue and expenses for each statement of comprehensive income (i.e. including comparable information) shall be translated at the average exchange rate for the period. c) All resulting exchange differences are recognized in other comprehensive income. (i) Cash and cash equivalents Cash and cash equivalents comprise cash on hand and in banks, short-term highly liquid investments with original maturities of three months or less and short-term highly liquid investments readily convertible for known amounts of cash. (j) Inventories Inventories are measured at the lower of acquisition cost (purchased inventory), respectively in own costs (incurred by own activity), and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and selling expenses. Purchased inventories are measured at cost, which includes the purchase price and other directly attributable expenses incurred in acquiring the inventories and bringing them to their existing location and condition. Own costs include direct costs and indirect costs associated with acquiring inventories by own activity. The Group uses a weighted average cost method for valuation of its inventories. (k) Offsetting Financial assets and liabilities are offset and their net amount is reported in the balance sheet when the Group has a legally enforceable right to set off the recognised amounts and the transactions are intended to be settled on a net basis. (l) Impairment of non-financial assets The carrying amounts of the Group's assets, other than inventories (refer to the accounting policy under letter j), investment property (refer to the accounting policy under letter o), financial assets (refer to the accounting policy under letter f), and deferred tax assets (refer to the accounting policy under letter s) are reviewed at each financial statements date to determine whether there is objective indication of impairment of the asset. If any such indication exists, the asset's recoverable amount is estimated. Intangible assets that have an indefinite useful life are not subject to amortisation but are tested annually for impairment as part of the cash-generating unit to which they belong. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in profit or loss. If assets available for sale caused a decrease in fair value recognized directly in equity and if objective reasons exist that prove that there was a decrease in the fair value of the assets, the cumulated loss recognized in equity shall be reported in the profit and loss statement even if the relevant asset had not been derecognized from the financial position. 115 Consolidated Financial Statements The recoverable amount of other assets is the greater of their value in use less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. In the case of goodwill, an impairment loss cannot be decreased subsequently. In respect of other assets, an impairment loss is reversed or decreased when there is an indication that the impairment loss no longer exists and there has been a change in the estimates used to determine the recoverable amount. An impairment loss can only be reversed or decreased to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. (m) Property, plant and equipment i. Owned assets Single items of property, plant and equipment are measured at cost less accumulated depreciation (see below) and impairment losses (refer to the accounting policy under letter l). Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials, direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use and costs of dismantling and removing the items and restoring the site where it was located. When parts of an item of property, plant and equipment have different useful lives, those components are accounted for as Consolidated items (major components) of property, plant and equipment. ii. Subsequent expenditures Subsequent expenditure is capitalised if it is probable that the future economic benefits embodied in the part of property, plant and equipment will flow to the Group and the relevant cost can be measured reliably. All other expenditures including the costs of day-to-day servicing of property, plant and equipment are recognised in profit or loss in the period to which they relate. iii. Depreciation Except as specified below, depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of individual items of property, plant and equipment. Land is not depreciated. The estimated useful lives are as follows: • Buildings 30 - 45 years • Cableways and ski lifts ▪ Fixed structures and other objects 20 – 40 years ▪ Technology and accessories 4 - 12 years • Individual movables and sets of movables ▪ Geothermal borehole 40 years ▪ Slides 25 years ▪ Equipment 5 - 12 years ▪ Fixtures and fittings and others 5 - 10 years Depreciation methods, useful lives, as well as residual values, are reassessed annually as at the financial statement’s date. Each significant part of property, plant and equipment (component) with cost significant in relation to the total cost of the relevant item is depreciated separately. 116 Consolidated Financial Statements iv. Capitalized borrowing costs Borrowing costs attributable to the asset that necessarily takes a substantial period of time to get ready for its use or sale are capitalised by the Group as part of the cost of the asset. (n) Intangible assets i. Goodwill and intangible assets acquired in a business combination Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date fair values of the identifiable assets acquired and the liabilities assumed. Goodwill on acquisition of subsidiaries is included under intangible assets. Goodwill on acquisition of associates is included in the investments in associates. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Bargain purchase (negative goodwill) arising on an acquisition is reassessed and any excess remainder of the negative goodwill after the reassessment is recognised in profit or loss. Intangible assets acquired in a business combination are recognised at fair value on the acquisition date if the intangible asset is separable or arises from contractual or other legal rights. Intangible assets with an indefinite useful life are not subject to amortisation and are recorded at cost net of impairment loss. Intangible assets with a definite useful life are amortized over the useful life and are stated at cost net of accumulated amortisation and impairment losses. ii. Software and other intangible assets Software and other intangible assets acquired by the Group are stated at cost less accumulated amortisation (see below) and impairment losses (refer to the accounting policy under letter l). Useful life of these assets is reassessed regularly. iii. Amortisation Amortisation is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, from the date the asset is available for use. The estimated useful lives are as follows: • Software 2 – 5 years • Valuable rights each item uses an individual depreciation plan, based on the estimated useful lives if these assets, valuable rights also include trademarks which represent non-depreciated assets. The Group uses 2, 6, 7, 8, 10, 12 and 50-year useful lives for its valuable rights (o) Investment property Investment property represents assets that are held by the Group to generate rental income or to realise a long-term increase in value, or for both of these purposes. Investment property is stated at fair value, which is determined by an independent expert or by the management. Fair value is based on current prices of similar assets on an active market under the same location and the same conditions, or where such conditions are not available, by applying the generally applicable valuation models such as the yield method. Any gain or loss arising from a change in fair value is recognised in profit or loss. Assets that are constructed or developed for their future use as investment property are measured at fair value if the fair value can be determined reliably. 117 Consolidated Financial Statements Details on the valuation of investment property are specified in Note 3(b) – Significant accounting estimates and assumptions, Valuation of investment property. Rental income from investment property is accounted for as described in the accounting policy under letter (e) Leases – Group as a lessee. (p) Government grants Government grants are recognised where there is a reasonable assurance that the grant will be received, and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset. When the Group receives grants of non-monetary assets, the asset and the grant are recorded at nominal amounts and released to profit or loss over the expected useful life of the asset, based on the pattern of consumption of the benefits of the underlying asset by equal annual instalments. (q) Provisions A provision is recognised in the balance sheet when the Group has a present legal, contractual, or non-contractual obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate of the amount can be made. Long-term provisions the reduction of which to their present value would have a material impact on the financial statements are discounted to their present value. i. Long-term employee benefits Liability of the Group resulting from long-term employee benefits other than pension plans represents the estimated amount of future benefits that employees have earned in return for their service in the current and prior periods. The liability is calculated using the projected unit credit method, discounted to its present value. A discount rate used to calculate the present value of liability is derived from the yield curve of high-quality bonds with maturities close to the conditions of the Group’s liabil ities as at the date of the financial statements preparation. (r) Interest income and expense Interest income and expense is recognised in profit or loss in the period to which it relates using the effective interest rate basis. All expenses on loans and borrowings are recognised in profit or loss, with the exception of capitalised borrowing costs; refer to the accounting policy under letter (m), part ( iv ). (s) Income tax Income tax on the profit for the current accounting period comprises current and deferred tax. Current tax is the expected tax payable on the taxable income for the current accounting period, using tax rates valid as at the date of the financial statement’s preparation, and any adjustments to tax payable in respect of previous accounting periods. The amount of deferred tax is based on the expected method of realization or settlement of the carrying amount of assets and liabilities using tax rates valid as at the date of the financial statement’s preparation or enacted to this date. Deferred tax is accounted for using the balance sheet method and calculated from all temporary differences between the carrying amounts of assets and liabilities determined for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences weren’t taken into account: the initial recognition of assets or liabilities which affect neither accounting nor taxable profit, and the differences relating to investments in subsidiaries to the extent that it is probable that they will not be reversed in the foreseeable future. No deferred taxes are recognised on the initial recognition of goodwill. The amount of deferred tax is based on the expected way of realisation or settlement of the 118 Consolidated Financial Statements carrying amount of assets and liabilities, using the tax rates valid or approved as at the date of the financial statement’s preparation. Income tax is recognised directly in profit or loss, except for the part that relates to items recognised directly in equity, in which case the income tax is recognised in equity. Deferred tax asset and liability are offset if there is a legally enforceable right to offset the payable tax liability and asset, and they relate to the same tax authority and the taxable entity. A deferred tax asset is only recognised up to the amount of probable future taxable profits against which the unused tax losses and credits can be offset. Deferred tax assets are reduced by the amount for which it is probable that the related tax benefit will not be realised. (t) Trade and other payables Trade and other payables are stated at amortised cost (see point (y) Financial liabilities). i. Short-term employee benefits Short-term employee benefit obligations are measured on an undiscounted basis and are recognised as expenses at the time of provision of the service by the employees. A payable is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or contractual obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. Customer advances received and current accruals are reported separately under customer contract obligations. (u) Revenues from services rendered The Group recognises eight types of basic revenues from services rendered: • Revenues from cableways and ski lifts (hereinafter also referred to as “Mountain Resorts”) • Revenues from leisure parks • Revenues from sports services and stores • Revenues from hotel services (hereinafter also referred to as “Hotels”) • Revenues from restaurant facilities (hereinafter also referred to as “Dining”) • Revenues from real estate projects (mainly from investment property, hereinafter also referred to as “Real Estate”) • Revenues from golf resorts (hereinafter also referred to as “Golf s ”) • Other revenues The Group recognizes revenues to the extent, in which economic benefits are likely to flow to the Group, and these revenues can be reliably valued. The revenues are recognized at fair value. The Group accounts mainly for revenues from cable cars and amusement parks, which are accounted for in the profit or loss after fulfilling the obligation to perform the contract by transferring the promised service. Revenues from season ski passes and aqua passes are accrued depending on the period during which the service was provided. Revenues from accommodation and restaurant facilities is charged daily on the basis of the services provided in each hotel establishment even for those customers who are still staying in the hotel facility. Revenue is accrued depending on the period during which the service was provided. Pre-paid advances from customers are recognized as liabilities under contract liabilities – referred to Note 31. Revenues from services rendered do not include value added tax. They are also net of discounts and rebates (rebates, bonuses, discounts, credit notes and the like). Since 2012 the Group has been running a loyalty program for its clients – Gopass, which enables its clients to earn points for purchase of products and services in its resorts and to redeem these points as discounts from future purchases. The amount of unredeemed points are recognized as a decrease in sales against revenue time difference, as they are related 119 Consolidated Financial Statements to promised discounts from future purchases of clients. The Group monitors the value of unredeemed points and revalues it on a regular basis for its recognition in the financial statements. From 1 November 2022 to 31 October 2022 was the loyalty program operated by the subsidiary GOPASS a.s. Since 1 November 2022 the loyalty program has been operated by the subsidiary GOPASS SE, that is a part of the Group. Revenues from investment property projects are recognized for when the Group fulfills the obligation to perform the contract by transferring the property to the customer. The sale of investment property is reported in the Group's revenues on the date of signing the acceptance protocol, or by registration at the cadastre on the basis of the decision to allow the deposit of title, whichever occurs first. Revenues from the sale of souvenirs and other goods shall be recognized when the Group fulfills the obligation to perform the contract by transferring the promised goods to the Customer or during this process. An asset is transferred when a customer acquires control of that asset. Other revenues from services provided shall be recognized following the provision thereof. (v) Dividends Dividends are recognised in the statement of changes in equity and also as liabilities in the period in which they are approved. (w) Non-current assets and disposal groups held for sale Non-current assets (or disposal groups comprising assets and liabilities) that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale. Immediately before classification as held for sale, the assets (or components of a disposal group held for sale) are re-measured in accordance with the International Financial Reporting Standards as adopted by the EU. Thereafter, upon initial classification as held for sale, the assets and disposal group held for sale are recognised at the lower of their carrying amount or fair value less cost to sell. Any impairment loss on a disposal group is first allocated to goodwill, and then to the remaining assets and liabilities on a pro rata basis, except for inventories, financial assets, deferred tax assets and investment property, which continue to be measured in accordance with the Group's accounting policies. Impairment losses on initial recognition as held for sale are recognised in profit or loss even if the revaluation reserve was created. The same applies to gains and losses on subsequent measurements. Gains are not recognised in excess of any cumulative impairment loss. Property, plant and equipment and intangible assets classified as held for sale are no longer depreciated or amortised. In case that, after the asset assignment into the group of assets held for sale, value is realized mainly through use rather than sale thereof, the assets shall be accounted back and depreciation or amortization for property, plant and equipment and intangible assets shall be recognised in the period when such change of assets arose. (x) Reporting by segments Operating segments are parts of the Group that are able to generate income and expenses with available financial information, which is regularly reviewed by the chief operating decision makers in order to allocate resources to the segments and to assess their performance. The management monitors 8 main segments, namely mountain resorts, leisure parks, hotels, dining, sports services and stores, real estate, golfs and other. (y) Financial liabilities The Group recognises financial liabilities as other financial liabilities. The Group does not recognise any financial liabilities valued at fair value through profit or loss. In the Group’s Consolidated statement of financial position, other financial liabilities are recognized as received loans and borrowings, bonds issued, trade payables and other liabilities. 120 Consolidated Financial Statements Financial liabilities are recognised by the Group on the trade date. Upon initial recognition, financial liabilities are measured at fair value including transaction costs. Subsequent to initial recognition, financial liabilities are measured at amortized cost. Upon measurement at amortized cost the difference between the cost and the face value is recognised through profit or loss during existence of the asset or liability using the effective interest rate method. Financial liabilities are derecognised when the Group's obligation specified in the contract expires, is settled or cancelled. (z) Fair value estimates The following notes summarise the main methods and assumptions used in estimating the fair values of financial assets and liabilities referred to in Note 35 – Fair value information: i. Loans granted Fair value is calculated based on discounted expected future principal and interest cash flows. Expected future cash flows are estimated considering credit risk and any indication of impairment. The estimated fair values of loans reflect changes in credit status since the loans were made and changes in interest rates in the case of fixed rate loans. ii. Loans and borrowings For loans and borrowings with no defined maturities, fair value is taken to be the amount payable on demand as at the date of preparation of the consolidated financial statement. The estimated fair value of fixed-maturity loans and borrowings is based on discounted cash flows using rates currently offered for loans and borrowings of similar remaining maturities. iii. Trade receivables and other financial receivables Short-term receivables without the interest rate are valued at the original invoice amount if the impact of discounting is insignificant. For receivables with a remaining life of less than one year, the nominal amount is deemed to reflect the fair value. Fair value is determined at initial recognition and for disclosure purposes at the end of the accounting period. iv. Trade payables, and other financial liabilities Trade payables and other financial liabilities are initially measured at fair value. The carrying amount of trade payables and other financial liabilities is approximately equal to their fair value. v. Cash and cash equivalents For cash and cash equivalents, it is assumed that their nominal value is also fair value. vi. Other financial assets/liabilities Other assets/liabilities are mainly claims on partner companies, which the Group uses for the proprietary sale of tickets to customers to its resorts, receivable/ liability from derivative operations - currency SWAP, remaining liability to shareholders from a reduction in share capital in 2013. Other financial assets/liabilities are discounted for the determination of fair value if the impact of discounting is material. 121 Consolidated Financial Statements 3. Significant Accounting Estimates and Assumptions The preparation of the financial statements according to the International Financial Reporting Standards as adopted by the EU requires the application of certain significant accounting estimates. It also requires that the management, in the application process of the Group accounting principles, should use its judgement. These accounting estimates will, therefore, rarely conform to the actual results. Information about assumptions and estimation uncertainties as at 31 October 2023 that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities in the next financial year is described below. The estimates and assumptions are continually reviewed. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of revision and also in future periods if the revision affects both current and future periods. The Group considers climate change and the risks arising from it (hereinafter referred to as climate risks) as a factor that may affect the ski sector in the future. Since the beginning of its existence, the Group has been adapting its ski resorts to trends requiring artificial snow. Therefore, historical investments in resorts also included a significant share in snowmaking (snowmaking technology, retention lakes such as water reservoirs, pumps and others). By using snowmaking technology in its resorts for a long time, the Group is factoring the increase in operating and snow production costs into its financial models, projections and pricing. This item is not new for the Group, but due to fluctuations in electricity prices, it is growing significantly. Therefore, the Group uses financial risk management tools such as commodity hedging to secure and predict the prices of electricity needed for cable car operations as well as snowmaking. In the future, the topic of climate risks and their impacts on business will be dealt with by the Group with increased emphasis. At the same time, we follow trends and innovations in the field of snowmaking. The Group also defines its ESG strategies, which includes business sustainability in relation to location and climate risk impacts. This area is becoming a priority, including addressing risks and finding sustainable solutions. Inflation and cost increases are perceived and actively managed by the Group through the mix of tools at its disposal. The Group monitors the indicators of cost, efficiency and profitability of its business. It evaluates trends and impacts of increases on its profitability. At the same time, it uses financial risk management tools to eliminate jumps in some costs (energy), such as commodity hedging and upfront buying. This tool significantly helps to predict the development of significant cost items and this makes it possible to quantify the impacts on financial indicators and results. By introducing flexible pricing tools for most of its products, the Group has gained the competence to better and more flexibly manage price and demand. At the same time, this method helps it compensate for the increase in costs to increase sales through price and demand. The Group is thus able to pass on part of the increase in costs to its customers. Flexi pricing and cost management allow the Group to better respond and meet financial projections and plans. From the perspective of sustainable business and managing the effects of inflation, the Group has sufficient know-how and tools to cope with these pressures. This was also demonstrated during 2022 and 2023, when the impact of inflation became apparent, and the Group was able to maintain the business without major negative impacts. (a) Business combinations and purchase price allocation The acquiree’s or part of business's identifiable assets, liabilities and contingent liabilities are recognised and measured at their fair value on the date of acquisition. The allocation of the total cost among the net assets acquired for financial reporting purposes is performed with the support of professional advisors or the Group's management. The valuation is based on historical and prospective information available as at the date of the business combination. Any prospective information that may impac t the fair value of the acquired assets is based on management’s assumptions of the future development of competitive and economic environments. The results of the valuation analyses are also used for determining the amortisation and depreciation periods of the values allocated to specific intangible and tangible fixed assets. An overview of business combinations and purchase price allocation of current and previous period is in Note 5 – Increase and decrease of interests in companies. 122 Consolidated Financial Statements (b) Valuation of investment property Investments property is measured at fair value. The fair value of investment property is determined either by a management evaluation or independent expert (see Note 2 - Significant Accounting Principles); in both of the cases the valuation is based on current market values and conditions. The fair market value is the estimated value, for which the property could be exchanged, on the valuation day, between knowledgeable, willing parties being a prospective seller and a prospective buyer, in an arm’s length transaction, with each party acting well informed, cautiously and without compulsion. In the absence of current market prices, net estimated cash flow generated from the leasing of property and gains from capitalisation which reflect the risk specific for the market and also cash flow from the property shall be taken into account. The valuation reflects (where relevant) the type of lessees who use the property or are responsible for the fulfilment of lease liabilities or the type of prospective users, if the property is left non-rented, the general market perception of lessee solvency, the distribution of responsibilities related to maintenance and insurance of property between the Company and the lessees, and the remaining life of property. An overview of investments in property of current and previous period is in Note 17 – Investment property. (c) Goodwill and impairment test As at the date of the consolidated financial statements, the Group assesses whether the goodwill has not been impaired. If the indicator of possible impairment is not detected, the Group is, in accordance with IAS 36, testing goodwill recognised in business combinations during the current accounting period and goodwill recognised in prior accounting periods for possible impairment annually on 31 October, i.e. as at the date of preparation of the annual consolidated financial statements. On the day of acquisition, the acquired goodwill is assigned to individual cash-generating units (CGU) for which it is expected to benefit from synergies arising in business combinations. Potential impairment of goodwill is determined by comparing the recoverable amount of CGU and its book value. The recoverable amount is determined by the value in use. This value was derived from the business plan prepared by the management. The key prerequisite which was also the most sensitive factor in determining the recoverable amount, was expected revenues assessed by the management, profitability (EBITDA) and cost of capital used as the discount factor for future net cash flows. Expected revenues as well as the profit margin ratio are based on historical revenue and EBITDA, adjusted by management's expectations for future developments - changes in customer target groups, strengthened marketing, increase in the quality of services rendered and expected investments into the property, plant and equipment to maintain their performance. Projection of cash flows applied in determining the value in use covers a basic term period with subsequent extrapolation for the next period. The Group used a 24 -year respectively 25-year projection due to the need of reflecting recently made investments in order to reach a normalized level of cash flows for determination of terminal value. Based on such normalized cash flows, the assumption of long-term growth of cash flows at the level of inflation was used. Discount rates applied in the projection of cash flows were calculated as weighted average cost of capital after taking into account the effect of the corporate income tax. 123 Consolidated Financial Statements Following table summarizes assumptions, result and sensitivity of impairment of goodwill in CGU High Tatras: 1.11.2022 - 1.11.2021 - In TEUR 31.10.2023 31.10.2022 Calculation assumptions Horizon for cash flow projection 24 years 25 years Growth in terminal year 3.7 % 3.8 % Average annual EBITDA/revenue growth 2.6 % 2.5 % Average annual growth in the number of visitors 0.46 % 1.17 % Discount rate used during cash flow projection 10.94 % 9.50 % Result and sensitivity Impairment for the period - - Impairment as at the end of the period - - Decrease of EBITDA by 5 % – impact on value in use -8 554 -8 413 Decrease of EBITDA by 5 % – resulting impairment - - Increase of discount rate by 0.5 % – impact on value in use -8 671 -10 118 Increase of discount rate by 0.5 % – resulting impairment - - Marginal decrease of EBITDA -18.08 % -9.09 % Marginal value of discount rate 13.04 % 10.29 % In 2023 and 2022, goodwill was tested within CGU Vysoké Tatry, and the test did not show any reason for asset impairment. CGU High Tatras includes restaurants and ski resorts in Starý Smokovec, Tatranská Lomnica and Štrbské Pleso. Grandhotel Starý Smokovec, Grandhotel Praha and Hotel FIS are located in these locations. (d) Impairment test of non-financial assets other than goodwill As at the date of the financial statements, the Group assesses whether the non-monetary assets have not been impaired. IAS 36 requires the testing of asset impairment in cases where external or internal indicators would point possible asset impairment. The Group carries on 7 principal activities: running of mountain resorts, leisure parks, golf resorts, restaurant services, sports services and shops, accommodation services and real estate projects, in three Slovak locations: in Jasná (Low Tatras), in the High Tatras and in Liptovský Mikuláš and through its subsidiaries in the Republic of Poland, the Czech Republic and Austria. Each of the locations was assessed by the management as an individual cash-generating unit (CGU). The Group monitors the performance and creates independent budgets for individual cash-generating units. The Group's assets were allocated according to their material affiliation to each cash-generating unit, including all assets located in there, except for hotels, restaurants, golf resorts, leisure parks and sports services and shops in addition to lifts and ropeways. As at 31 October 2023 and 31 October 2022 the Group carried out testing for impairment of assets for all of its major CGUs, as the Group has identified indicators of possible asset impairment related to the disruption to its business operations in prior years, the ongoing military conflict in Ukraine, which has had an indirect impact on the Group, and as a result of which energy prices and other costs have increased significantly. The impairment test was performed for location High Tatras, as goodwill is assigned to it, as described in Note 3(c). As at 31 October 2023 for the locations of Low Tatras, Tatralandia, Szczyrkowski Ośrodek Narciarski ("SON" or "Szczyrk") and Ještěd, there was no evidence of impairment of the property. In the Silesian Amusement Park ("SWM" or "Legendia"), Muttereralm and Mölltaler/Ankogel locations, impairment of assets is reflected in the consolidated statements of the Group by accounting for impairment of Right-of-use asset pertaining to CGU SWM, and by accounting for impairment of Land, buildings and equipment pertaining to CGU SWM, Muttereralm and Mölltaler/Ankogel. Projection of cash flows applied in determining the value in use covers a basic term period with subsequent extrapolation for the next period. The Group used a 19 to 25-year projections due to the need of to reflect recently made investments in 124 Consolidated Financial Statements order to reach a normalised cash flows for determination of terminal value. Based on such normalised cash flows, the assumption of long-term growth of cash flows at the level of inflation was used. Discount rates applied in the projection of cash flows were calculated as weighted average cost of capital after taking into account the effect of the corporate income tax. Following table summarizes assumptions, result and sensitivity of impairment calculation for CGU tested for impairment as at 31 October 2023: In TEUR Nízke Tatra- SON SWM Je štěd Mölltaler Muttere Tatry landia /Ankogel ralm Calculation assumptions Horizon for cash flow projection 24 years 19 years 25 years 23 years 24 years 19 years 19 years Growth in terminal year 3.7 % 3.7 % 2.5 % 2.5 % 3.4 % 2.0 % 2.0 % Average annual EBITDA/revenue growth 2.8 % 2.7 % 4.2 % 4.0 % 3.4 % 2.7 % 2.6 % Average annual growth in the number of visitors 0.6 % 0.1 % 1.5 % 2.0 % 2.2 % 2.8 % 0.9 % Discount rate used during cash flow projection 10.94 % 10.94 % 12.81 % 12.81 % 11.55 % 10.3 % 10.3 % Result and sensitivity Impairment for the period - - - -196 - -3 210 -1 122 Impairment as at the end of the period - - - -21 141 - -3 210 -1 859 Recoverable amount - in case of impairment identification - - - 24 552 - 22 572 3 951 Decrease of EBITDA by 5 % – impact on value in use -10 317 -3 381 -3 585 -1 444 -544 -611 -295 Decrease of EBITDA by 5 % – resulting impairment - - - -1 640 - -3 821 -1 417 Increase of discount rate by 0.5 % – impact on value in use -10 311 -3 145 -3 353 -1 105 -481 -313 -152 Increase of discount rate by 0.5 % – resulting impairment - - - -1 301 - -3 523 -1 274 Marginal decrease of EBITDA -15.79 % -36.87 % -7.6 % - -24.8 % - - Marginal value of discount rate 12.75 % 17.72 % 13.65 % - 15.25 % - - As at 31 October 2022, following an assessment by Group management, indicators of possible impairment of Group ’s assets have been identified in relation to the volatile economic situation caused by the increase in energy prices and inflation resulting from the ongoing war in Ukraine, as well as the effects of the global coronavirus pandemic on the Group for the previous financial year. The Group proceeded to test impairment of assets for CGUs, which were most affected by the measures against the pandemic, did not achieve planned sales and, after the relaxation of pandemic measures, the number of their visitors did not return to pre-pandemic times or historically did not show the desired performance. An impairment test was performed for the locations of Low Tatras, Tatralandia, resort Szczyrkowski Ośrodek Narciarski ("SON" or "Szczyrk"), Silesian Amusement Park ("SWM" or "Legendia"), Ještěd Resort, Mölltaler/Ankogel and Muttereralm, as well as for the High Tatras site, as goodwill is assigned to it, as specified under Note 3(c). For the locations of Low Tatras, Tatralandia, SON, Ještěd and Mölltaler/Ankogel, there was n o evidence of impairment of the property. In the SWM and Muttereralm locations, impairment of assets is reflected in the consolidated statements of the Group by accounting for impairment of Land, buildings and equipment pertaining to CGU SWM and Muttereralm. Projection of cash flows applied in determining the value in use covers a basic term period with subsequent extrapolation for the next period. The Group used a 25-year projection due to the need of reflecting recently made investments in order to reach a normalised level of cash flows for determination of terminal value. Based on such normalised cash flows, the 125 Consolidated Financial Statements terminal value was calculated with expected nominal growth of cash flows by inflation. Discount rates applied in the projecting of cash flows were calculated as weighted average cost of capital after taking into account the effect of the corporate income tax. Following table summarizes assumptions, result and sensitivity of impairment calculation for CGU tested for impairment as at 31 October 2022: In TEUR Nízke Tatra- SON SWM Ještěd Mölltaler Muttere Tatry landia /Ankogel ralm Calculation assumptions 25 years 25 years 25 years 25 years 25 years 25 years 25 years Horizon for cash flow projection Growth in terminal year 3.8 % 4 % 4 % 4.4 % 2.5 % 3.5 % 3.5 % Average annual EBITDA/revenue growth 3.3 % 2.8 % 3.5 % 3.8 % 4.0 % 3.3 % 3.4 % Average annual growth in the number of visitors 1.9 % 1.0 % 0.6 % 1.5 % 1.5 % 3.1 % 1.1 % Discount rate used during cash flow projection 9.50 % 10.20 % 11.90 % 11.80 % 10.50 % 9.20 % 9.20 % Result and sensitivity Impairment for the period - - - -5 240 - - -737 Impairment as at the end of the period - - - -20 945 - - -737 Recoverable amount - in case of impairment identification - - - 24 169 - - 7 615 Decrease of EBITDA by 5 % – impact on value in use -9 235 -2 539 -3 418 -1 441 -617 -959 -488 Decrease of EBITDA by 5 % – resulting impairment -5 795 - -1 034 -6 681 - - -1 225 Increase of discount rate by 0.5 % – impact on value in use -11 017 -2 449 -3 405 -1 298 -625 -770 -419 Increase of discount rate by 0.5 % – resulting impairment -7 578 - -1 021 -6 538 - - -1 156 Marginal decrease of EBITDA -1.87 % -13.09 % -3.49 % - -33.55 % -15.61 % - Marginal value of discount rate 9.65 % 11.75 % 12.25 % - 15.38 % 11.60 % - The development of the impairment during the accounting period is shown in the overview below: in TEUR 31.10.2023 31.10.2022 Balance as at 1.11.2022 / 1.11.2021 21 682 15 030 Creation of impairment allowance - SWM 196 5 240 Creation of impairment allowance - Muttereralm 1 122 737 Creation of impairment allowance - Mölltaler /Ankogel 3 210 - Foreign exchange difference 259 675 Balance as at 31.10.2023/31.10.2022 26 469 21 682 For more information regarding the actual amount of impairment to non-current assets refer to Note 14 - Property, Plant and Equipment and Note 15 - Right-of-use Assets. 126 Consolidated Financial Statements (e) Financial instruments at fair value The fair value of financial instruments is determined based on: Level 1: quoted market prices (not adjusted) in active markets for identical assets or liabilities Level 2: inputs other than quoted prices included in Level 1 that are comparable for the asset or liability, either directly (i.e. as prices of similar instruments) or indirectly (i.e. derived from such prices) Level 3: inputs for the asset and liability, which are not determined on the basis of data from comparable markets (unobservable inputs) When the quoted market price is not available, the fair value of the instrument is estimated using valuation techniques. When using the valuation models, the management applies estimates and assumptions which are consistent with information available on estimates and assumptions that market participants would use when pricing the relevant financial instrument. in TEUR 31.10.2023 31.10.2022 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Financial assets Loans provided 20 - - 2 671 2 671 - - 2 109 2 109 Other assets - Hedging derivative transactions - 24 - - - - - 254 - 254 foreign exchange SWAP Total - - 2 671 2 671 - 254 2 109 2 363 in TEUR 31.10.2023 31.10.2022 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Financial liabilities Bonds issued 34 - 261 264 - 261 264 - 266 186 - 266 186 Total - 261 264 - 261 264 - 266 186 - 266 186 The table does not present financial instruments for which the carrying amount is considered to be an approximation of fair value and which are within Level 2. The above financial instruments are stated at their carrying amounts. 127 Consolidated Financial Statements 4. Information about Operating Segments Information about operating segments – Consolidated statement of profit and loss Sports Services and Main segments - Mountain Resorts Leisure Parks Hotels Dining Stores Real Estate Golf TOTAL Other TOTAL in TEUR 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m Sales 70 832 50 932 23 344 16 861 55 962 37 709 27 474 19 501 6 724 5 321 3 188 1 055 855 740 188 379 132 119 - - 188 379 132 119 Material and goods consumption -3 607 -2 689 -1 382 -832 -8 555 -7 396 -7 610 -5 921 -1 958 -1 631 -1 530 -565 -45 -36 -24 687 -19 070 - - -24 687 -19 070 Purchased services -19 074 -16 484 -6 761 -5 280 -18 731 -12 749 -4 899 -3 371 -990 -870 -386 -637 -627 -288 -51 468 -39 679 - - -51 468 -39 679 Personnel expenses -17 992 -15 120 -5 592 -3 498 -18 844 -14 047 -9 142 -7 546 -2 358 -2 264 -240 -542 -254 -227 -54 422 -43 244 - - -54 422 -43 244 Other operating expenses -618 -738 -304 -289 -715 -434 -296 -186 -72 -70 -10 -14 -28 -27 -2 043 -1 758 - - -2 043 -1 758 Other operating income 299 1 540 37 -1 679 2 824 4 837 165 127 10 4 94 13 18 1 3 447 4 843 - - 3 447 4 843 Loss on revaluation of investment property - - - - - - - - - - - -906 - - - -906 - - - -906 Impairment losses to financial assets 93 495 31 279 18 378 10 186 8 51 - -9 - 11 160 1 391 - - 160 1 391 Depreciation and amortization -13 427 -12 285 -5 010 -3 919 -4 457 -4 066 -1 899 -1 795 -541 -934 -246 -211 -32 -28 -25 612 -23 238 -25 -150 -25 637 -23 388 assets Depreciation of right-of-use -3 629 -3 943 -1 205 -866 -548 -612 -171 -148 -45 -48 - - -246 -246 -5 844 -5 863 - - -5 844 -5 863 Gain on bargain purchase - - - 6 387 - 6 775 - - - - - - - - - 13 162 - - - 13 162 Impairment of fixed assets -4 331 -737 -197 -5 240 - - - - - - - - - - -4 528 -5 977 - - -4 528 -5 977 Interest income calculated - - - - - - - - - - - - - - - - 238 47 238 47 using effective interest rate Financing cost -11 262 -10 182 -1 552 -1 203 -7 338 -5 687 -4 107 -3 273 -1 469 -1 139 -1 846 -1 431 - - -27 574 -22 915 - - -27 574 -22 915 Net profit / (loss) on financial operations - - - - - - - - - - - - - - - - 6 889 -2 356 6 889 -2 356 Net profit / (loss) on disposal of subsidiaries - - - - - - - - - - - - - - - - - -482 - -482 Share of the loss of investments in JV accounted - - - - - - - - - - - - - - - - -355 -163 -355 -163 for using the equity method Profit/(loss) of the segment before tax -2 716 -9 676 1 409 446 -384 -292 -475 -2 613 -691 -1 631 -976 1 380 -359 -111 -4 192 -12 497 6 747 -1 743 2 555 -14 239 Current income tax -1 919 -776 Deferred income tax -1 184 3 068 Consolidated Loss -548 -11 947 128 Consolidated Financial Statements 128 Information about operating segments – Consolidated statement of financial position Sports Services and Main segments - Mountain Resorts Leisure Parks Hotels Dining Stores Real Estate Golf TOTAL Other TOTAL in TEUR 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 Goodwill 23 770 23 770 - - 3 390 3 390 - - - - - - - - 27 160 27 160 - - 27 160 27 160 Intangible assets 3 963 3 777 3 457 3 392 611 812 168 286 57 104 10 69 5 5 8 271 8 445 - - 8 271 8 445 Property, plant and equipment 247 930 248 519 66 058 56 104 77 259 71 990 17 242 17 669 2 113 2 456 1 224 5 829 158 158 411 984 402 725 2 582 2 237 414 566 404 962 Right-of-use assets 41 500 44 952 1 124 12 585 7 161 5 096 1 803 1 761 745 715 - - 6 685 5 390 59 018 70 499 - - 59 018 70 499 Investment property - - - - - - - - - - 6 663 7 411 - - 6 663 7 411 - - 6 663 7 411 Inventory 1 533 1 141 634 249 975 845 747 166 1 448 1 371 3 958 575 176 160 9 471 4 507 - - 9 471 4 507 Trade receivables 2 909 3 595 763 635 638 322 220 36 15 17 839 133 153 134 5 537 4 872 - - 5 537 4 872 Investment in an associate and a joint venture 11 245 11 578 - - - - - - - - - - 1 974 1 974 13 219 13 552 - - 13 219 13 552 Other receivables 1 124 3 519 495 498 453 - 25 - 13 - - 484 234 179 2 344 4 680 - - 2 344 4 680 Financial investments 3 6 - - - - - - - - - - - - 3 6 36 36 39 42 Other assets 3 685 3 443 865 680 2 444 2 095 40 25 143 117 - - 475 286 7 652 6 646 - - 7 652 6 646 Loans provided - - - - - - - - - - - - - - - - 2 671 2 109 2 671 2 109 Cash and cash equivalents 8 821 5 941 4 539 4 619 2 902 3 012 969 1 078 275 422 92 344 129 129 17 727 15 545 - 55 17 727 15 600 Deferred tax receivable - - - - - - - - - - - - - - - - 5 296 4 182 5 296 4 182 Assets total 346 483 350 241 77 935 78 762 95 833 87 562 21 214 21 021 4 809 5 202 12 786 14 845 9 989 8 415 569 049 566 048 10 585 8 619 579 634 574 667 Loans and borrowings long- term 72 517 79 869 21 488 20 260 9 020 9 155 2 263 2 263 1 132 1 132 - - - - 106 420 112 679 - - 106 420 112 679 Lease liabilities 42 763 40 521 14 655 13 051 5 107 4 964 1 852 1 766 746 753 - - 7 155 6 043 72 278 67 098 - - 72 278 67 098 Other long-term liabilities 10 214 13 079 - - - - - - - - - - - - 10 214 13 079 2 527 - 12 741 13 079 Loans and borrowings short- term 9 441 8 561 1 410 1 234 590 287 14 46 7 23 - - - - 11 462 10 151 - - 11 462 10 151 Trade payables and other 13 530 12 388 3 181 2 009 5 557 4 960 1 854 1 493 493 344 1 062 1 991 401 210 26 078 23 395 - 2 461 26 078 25 856 payables Other current liabilities 4 652 2 158 126 48 217 284 69 100 16 23 10 14 146 146 5 236 2 773 747 924 5 983 3 697 Contract liabilities 13 318 10 882 1 511 1 104 4 872 3 320 - - - - 109 265 - - 19 810 15 571 - 19 810 15 571 Provisions 518 506 5 9 21 40 10 18 2 5 1 1 32 34 589 613 - - 589 613 Bonds issued - - - - - - - - - - - - - - - - 261 264 266 186 261 264 266 186 Deferred tax liability - - - - - - - - - - - - - - - - 29 597 26 730 29 597 26 730 Corporate income tax - - - - - - - - - - - - - - - - 1 516 - 1 516 - Total liabilities 166 953 162 261 42 376 40 271 25 384 20 869 6 062 6 073 2 396 2 750 1 182 6 702 7 734 6 433 252 087 245 359 295 651 296 301 547 738 541 660 129 Consolidated Financial Statements Information about operating segments – Consolidated statement of profit and loss Sales 1.11.2022 - 1.11.2021 - 31.10.2023 31.10.2022 in TEUR Slovak Republic 81% 75% Austria 6% 7% Republic of Poland 9% 13% Czech Republic 4% 5% Total 100% 100% The Company reports the operating segment information that have been adjusted for intersegment transactions. Intersegment eliminations are included in the amounts disclosed for each period. No client of the Group exceeded the limit of 10% share in total sales. Cost interest is distributed according to a management key. Information about operating segments – Consolidated statement of financial position Property, plant, and equipment 1.11.2022 - 1.11.2021 - 31.10.2023 31.10.2022 in TEUR Slovak Republic 301 063 299 987 Austria 26 095 31 173 Republic of Poland 80 132 66 537 Czech Republic 7 276 7 264 Total 414 566 404 961 The total amount of deferred tax liability from subsidiaries and investments in associates is shown in the table below: Deferred tax liability 1.11.2022 - 1.11.2021 - 31.10.2023 31.10.2022 in TEUR Slovak Republic 24 582 22 414 Austria 3 528 1 020 Republic of Poland 615 2 352 Czech Republic 872 -944 Total 29 597 26 730 Inter-segment eliminations are included in the amounts disclosed for each period. Inter-segment prices are determined based on market prices for similar services and financing. The issued bonds in the Other category were not used to finance specific projects. 130 5. Increase, Decrease and Sale of Shares in Companies (a) Subsidiaries On 1 November 2022, the companies EUROCOM Investment, s.r.o and WORLD EXCO, s.r.o were merged and the company EUROCOM Investment s.r.o became the legal successor. On 8 November 2022, GOPASS SE, a branch in Slovakia, was founded. It is an enterprise of a foreign entity of a European company - a subsidiary GOPASS SE. As at 1 April 2023, the cross-border merger of GOPASS a.s. as a dissolving company with the successor company GOPASS SE took effect. The decisive date for the merger is 1 November 2022. GOPASS a.s. ceased to exist as a result of a cross-border merger without liquidation on 1 April 2023. On 28 June 2023, the company TMR Real Estate, s.r.o. was established with a share capital of EUR 5 thousand, of which the Company became the only partner. On 26 September 2023, the company Štrbské Pleso resort, s.r.o. was established with a share capital of EUR 5 thousand, of which the Company became 100% owner. The company was founded for the purpose of further development of the Štrbské Pleso resort in relation to local communities. In 2023, the Group did not acquire any new subsidiaries. The table below provides an overview of subsidiaries acquired in 2022: Date of Increase/ Share of in TEUR acquisition Acquisition price (Decrease) Group after (acquisition of of cash acquisition control) % Acquisition of subsidiaries GOPASS SE 1.7.2022 118 -118 100% WORLD EXCO s.r.o. 31.3.2022 20 105 100% EUROCOM Investment, s.r.o. 31.3.2022 16 389 3 083 100% On 1 July 2022, the Company acquired a 100% share in the European company GOPASS SE with a place of business in the Czech Republic and a share capital of CZK 2,924 thousand, which will serve the purpose of expanding in the European market. This company was established solely for the purpose of further sale to the Group and before acquisition of 100% share by the Parent Company it did not carry out any business activity. By its purchase the Group acquired only receivable from unpaid share capital in the amount of CZK 2,924 thousand (equivalent to EUR 118 thousand), which was not paid as at the date of acquisition. The consideration transferred in the amount of CZK 2,924 thousand was settled in cash. On 22 June 2022, for the purpose of providing services within the TMR Group, International TMR services s.r.o. was founded in the Czech Republic with a share capital of CZK 200 thousand, 100% owned by the Company. On 31 March 2022, the Group acquired a 100% share and control in company WORLD EXCO s.r.o. The acquired company operates a congress center in Bešeňová. The total value of the acquired assets in WORLD EXCO s.r.o. was reassessed to the fair value of EUR 3,096 thousand and the total value of liabilities to EUR 1,526 thousand as at the acquisition date. The transaction resulted in a bargain purchase gain of EUR 1,550 thousand. The consideration transferred of EUR 20 thousand was fully paid and settled in cash. 131 Additions due to the acquisition of companies in 2022, related to WORLD EXCO s.r.o., had the following effect on the Group’s assets and liabilities (information related to acquisition of assets is described in Note 3 (a) – Business combinations and purchase price allocation): in TEUR WORLD EXCO s.r.o. Property, plant and equipment 2 898 Cash and cash equivalents 105 Other assets 93 Deferred tax liability -200 Loans and borrowings -361 Trade payables -7 Provisions -10 Other current liabilities -948 Net identified assets and liabilities 1 570 Consideration transferred -20 Gain from bargain purchase 1 550 Consideration paid, cash settlement -20 Cash acquired 105 Net cash income / (expenditure) 85 From the acquisition date the company WORLD EXCO s.r.o. contributed EUR 209 thousand to consolidated revenues and a profit of EUR 1,612 thousand to the total consolidated comprehensive result (including the bargain purchase gain of EUR 1,550 thousand). If the acquisition had been made at the beginning of the period presented, the revenues of WORLD EXCO s.r.o. would have contributed EUR 397 thousand to consolidated revenues and a profit of EUR 1,947 thousand to the total consolidated comprehensive result. On 31 March 2022, the Group also acquired a 100% share and control in EUROCOM Investment, s.r.o. The acquired company operates the Bešeňová water park, Hotel Galeria Thermal and Hotel Bešeňová. The total value of the acquired assets in EUROCOM Investment, s.r.o. was reassessed to the fair value of EUR 46,474 thousand and the total value of liabilities to EUR 18,473 thousand as at the acquisition date. The transaction resulted in a bargain purchase gain of EUR 11,612 thousand. The Group identified previously unrecognized lease-related liabilities and assets, measured at the present value of future lease payments in accordance with the accounting policies applied by the Group for IFRS 16. The consideration transferred of EUR 16,389 thousand was partially set-off with the advance payment of EUR 6,388 thousand and the rest of the consideration transferred of EUR 10,001 thousand was paid and settled in cash. 132 Consolidated Financial Statements Additions due to the acquisition of companies in 2022, related to EUROCOM Investment, s.r.o. had the following effect on the Group’s assets and liabilities (information related to acquisition of assets is described in Note 3 (a) - Business combinations and purchase price allocation): EUROCOM in TEUR Investment, s.r.o. Intangible assets 628 Property, plant and equipment 31 487 Right-of-use assets 1 121 Deferred tax asset 135 Inventories 16 Trade receivables 388 Loans provided 7 802 Other receivables 213 Cash and cash equivalents 3 083 Other assets 1 601 Deferred tax liability -2 264 Loans and borrowings -11 360 Lease liabilities -1 121 Trade payables -1 455 Provisions -33 Other current liabilities -2 240 Net identified assets and liabilities 28 001 Consideration transferred -16 389 Gain from bargain purchase 11 612 Consideration paid, cash settlement -10 001 Cash acquired 3 083 Net cash income / (expenditure) -6 918 From the acquisition date the company EUROCOM Investment, s.r.o. contributed EUR 10,081 thousand to consolidated revenues and a profit of EUR 12,293 thousand to the total consolidated comprehensive result (including the bargain purchase gain of EUR 11,612 thousand). If the acquisition had been made at the beginning of the period presented, the revenues of EUROCOM Investment, s.r.o. would have contributed EUR 14,175 thousand to consolidated revenues and a profit of EUR 12,609 thousand to the total consolidated comprehensive result. 133 Consolidated Financial Statements In 2023, there has been no decrease nor sale of shares in companies. The table below provides an overview of sold shares in subsidiaries in 2022: Share of Date of Net increase Group in TEUR disposal (loss Sale price of cash flows before of control) disposal % Disposal of subsidiaries TIKAR d.o.o. 30.9.2022 2 350 2 347 51% Disposals due to the sale of subsidiary Tikar d.o.o. in 2022 had the following effect on the Group’s assets and liabilities: in TEUR TIKAR d.o.o. Intangible assets -161 Trade receivables -1 892 Cash and cash equivalents -3 Other assets -609 Loans and borrowings -2 015 Trade payables 5 Other current liabilities 2 229 Net identified assets and liabilities -2 446 Non-controlling interest -384 Foreign currency translation reserve -2 Consideration received 2 350 Loss from disposal of subsidiary -482 Consideration received, cash settlement 2 350 Cash disposal -3 Net cash income / (expenditure) 2 347 134 Consolidated Financial Statements (b) Associates and joint ventures The Group did not enter into any transactions related to associates and joint ventures between 1 November 2022 and 31 October 2023. For further information about financial investments see Note 24 – Financial investments. The table below provides an overview of selected financial information for the period from 1 November 2022 to 31 October 2023 for associates and joint ventures and the book value of the Group’s share in these companies: OSTRAVICE MELIDA, a.s. HOTEL a.s. (25% share) (50% share) in TEUR Net profit / (loss) for the year -1 381 -20 Assets 77 229 5 768 Liabilities -32 959 -1 464 Equity 44 270 4 304 in TEUR Share of equity as at 1 November 2022 11 384 2 168 Share of the profit / (loss) -345 -10 Dividends received during the year - - Foreign exchange difference 28 -6 Share of equity as at 31 October 2023 11 067 2 152 The table below provides an overview of selected financial information for the period from 1 November 2021 to 31 October 2022 for associates and joint ventures and the book value of the Group’s share in these companies: OSTRAVICE MELIDA, a.s. HOTEL a.s. (25% share) (50% share) in TEUR Net profit / (loss) for the year -613 -16 Assets 75 172 5 465 Liabilities -29 634 -1 129 Equity 45 538 4 336 in TEUR Share of equity as at 1 November 2021 11 677 2 073 Share of the profit / (loss) -155 -8 Dividends received during the year - - Foreign exchange difference -138 103 Share of equity as at 31 October 2022 11 384 2 168 135 Consolidated Financial Statements 6. Sales 1.11.2022 - 1.11.2021 - in TEUR 31.10.2023 31.10.2022 Low Tatras 52 276 33 806 High Tatras 47 194 33 116 Szczyrk 10 751 10 572 Legendia 6 329 6 611 Tatralandia 20 608 13 101 Bešeňová 27 100 16 371 Ještěd 2 742 2 669 Mölltaler Ankogel 6 930 4 929 Muttereralm 3 701 3 375 Real estate 2 780 684 Ostravice 2 166 1 871 Kaskáda 1 952 1 748 Other 3 850 3 266 Total 188 379 132 119 7. Consumption of Material and Goods 1.11.2022 - 1.11.2021 - in TEUR 31.10.2023 31.10.2022 Material in hotels and restaurant facilities -12 075 -8 916 Real estate sold -1 517 -529 Goods -3 014 -3 169 Fuels -1 491 -1 215 Material for repair and maintenance -1 431 -997 Material and goods – other -5 159 -4 244 Total -24 687 -19 070 136 Consolidated Financial Statements 8. Purchased Services 1.11.2022 - 1.11.2021 - in TEUR 31.10.2023 31.10.2022 Energy consumption -20 029 -16 273 Advertisement expenses -3 866 -2 348 Rental costs (cost of premises) and others -5 196 -4 029 Other administrative expenses -2 939 -3 130 Communication expenses -2 567 -2 334 Repairs and maintenance expenses -4 872 -4 093 Legal advice expenses -2 928 -2 441 Services related to owned premises -919 -727 Transport, accommodation, travel expenses -1 040 -364 Laundry and cleaning costs -2 198 -1 364 Music and animation costs -1 117 -532 Guard and security service costs -369 -284 Accounting and audit costs -479 -247 Other purchased services -3 767 -2 946 State aid related to rental and other costs 818 1 433 Total -51 468 -39 679 The Group uses the services of KPMG Slovensko spol. s r. o., audit company, to audit individual and consolidated financial statements. The expense of these items in the period from 1 November 2022 to 31 October 2023 amounted to EUR 235 thousand (for the period ending 31 October 2022: EUR 178 thousand) for auditing of the regular financial statements. Similarly, for the period ending 31 October 2023, the Group used the services of KPMG Audyt Sp. z o.o. sp.k., audit company, to audit i ndividual financial statements and group reporting packages for Szczyrkowski Ośrodek Narciarski, S.A. and Ślaskie Wesole Miasteczko Sp. z o.o. The cost of these items in the period from 1 November 2022 to 31 October 2023 amounted to EUR 53 thousand (for the period ending 31 October 2022: EUR 53 thousand). 9. Personnel Expenses 1.11.2022 - 1.11.2021 - in TEUR 31.10.2023 31.10.2022 Wages and salaries -31 763 -25 450 Personnel leasing -8 080 -6 735 Social security (compulsory) -12 105 -9 499 Remuneration of members of key management and Supervisory Board -2 505 -1 925 Other social expenses -22 -18 State aid related to wages and salaries 53 383 Total -54 422 -43 244 The average number of Group employees during the period from 1 November 2022 to 31 October 2023 was 1,456, out of which 20 were management (from 1 November 2021 to 31 October 2022, it was 1,359 employees, out of which 20 were management). During the year, the Group used the services of employment agencies for short-term personnel leasing. From 1 November 2022 to 31 October 2023, it was 746 employees in average (from 1 November 2021 to 31 October 2022: 707 employees). 137 Consolidated Financial Statements The table below provides an overview of the Group's key management remuneration for the period from 1 November 2022 to 31 October 2023: in TEUR Variable Remuneration of members of key management Basic Extraordinary component of Total remuneration bonuses renumeration Board of Directors 206 - 1 688 1 894 Supervisory Board 79 - - 79 Top management 332 200 - 532 Audit Committee - - - - Total 617 200 1 688 2 505 The table below provides an overview of the Group's key management remuneration for the period from 1 November 2021 to 31 October 2022: in TEUR Variable Remuneration of members of key management Basic Extraordinary component of Total remuneration bonuses renumeration Board of Directors 192 - 941 1 133 Supervisory Board 79 - - 79 Top management 416 297 - 713 Audit Committee - - - - Total 687 297 941 1 925 For year ended 31 October 2023, base remuneration for top management amounted to EUR 332 thousand (in the period between 1 November 2021 and 31 October 2022: EUR 416 thousand). The extraordinary remuneration for the members of the top management amounted to EUR 200 thousand (from 1 November 2021 to 31 October 2022: EUR 297 thousand). Members of the Board of Directors, in accordance with the Rules of Remuneration of Company Bodies of the Parent Company dated 31 May 2023 (hereinafter referred to as the "Rules of Remuneration "), are granted remuneration for the performance of the duties of a member of the Board of Directors of the Parent Company, which consists of a fixed component of remuneration and a variable component of remuneration. The amount of the fixed component of the remuneration is agreed with the member of the Board of Directors in accordance with the Remuneration Rules in the contract for the performance of the duties of a member of the Board of Directors, which has been approved by the Supervisory Board of the Parent Company. For the year ended 31 October 2023 fixed remuneration component was paid out in the amount of EUR 206 thousand (from 1 November 2021 to 31 October 2022: EUR 192 thousand). The variable remuneration component shall be paid to the Members of the Board of Directors after the criteria defined in the Remuneration Rules have been met, the main criterion being the achievement of EBITDA, at the earliest payout date specified in the Group for the payment of salaries to employees after the publication of the Group's consolidated statutory financial statements for the financial year for which the remuneration is paid. The total amount of the claimable variable component of the renumeration in the value of EUR 1,688 thousand (from 1 November 2021 to 31 October 2022: EUR 941 thousand) is disclosed as a provision for the variable remuneration component of the members of the Board of Directors. The year-on-year increase occurred due to the fulfillment of the criteria set for the award of the variable remuneration component (fulfillment of the EBITDA plan). The members of the Supervisory Board are paid fixed components of remuneration in accordance with the Rules on remuneration of members of the Supervisory Board and concluded contracts for the performance of their duties, the variable components of remuneration shall not be paid to the members of the Supervisory Board. For the year ending 31 October 2023, basic remuneration totaled EUR 79 thousand (in the period between 1 November 2021 and 31 October 2022: EUR 79 thousand). 138 Consolidated Financial Statements 10. Other Operating Expenses 1.11.2022 - 1.11.2021 - in TEUR 31.10.2023 31.10.2022 Insurance (property, automobiles, travel cost) -881 -793 Fees and commissions -973 -658 Shortages and losses -167 -112 Other operating expenses -22 -195 Total -2 043 -1 758 11. Other Operating Income 1.11.2022 - 1.11.2021 - in TEUR 31.10.2023 31.10.2022 Claims paid by insurance company 229 375 Other operating income 1 216 1 127 Gain / (loss) on sale of assets 2 002 3 341 Total 3 447 4 843 Other operating income in the financial year 2023 consists mainly of income from subsidies received to cover operating expenses in the amount of EUR 391 thousand (from 1 November 2021 to 31 October 2022: EUR 400 thousand). This item also includes revenues related to the allowance for the provision of accommodation to displaced persons in connection with the war in Ukraine in the amount of EUR 122 thousand (from 1 November 2021 to 31 October 2022: EUR 32 thousand) and the contribution to the provision of practical education in the dual education system in the amount of EUR 68 thousand (from 1 November 2021 to 31 October 2022: EUR 62 thousand). 12. Finance Income and Expenses 1.11.2022 - 1.11.2021 - in TEUR 31.10.2023 31.10.2022 Interest income calculated using effective interest rate 238 47 Financing costs -27 574 -22 915 Net profit / (loss) on financial operations 6 889 -2 356 Total -20 447 -25 224 Interest income calculated using effective interest rate results mainly from the fixed-rate loans provided. See Note 20 – Loans provided. 139 Consolidated Financial Statements The table below shows the composition of financing costs: 1.11.2022 - 1.11.2021 - in TEUR 31.10.2023 31.10.2022 Interest expense related to loans and borrowings -9 210 -6 085 Interest expense from bonds issued -14 952 -14 526 Interest expense from leasing -3 418 -3 096 Income associated with hedging derivative transaction SWAP 6 792 Financing costs total -27 574 -22 915 For information about received loans and borrowings see Note 27 – Loans and Borrowings. For information about bonds issued see Note 34 – Bonds Issued. For information about leases see Note 28 – Lease Liabilities. In the period from 1 November 2022 to 31 October 2023, the Group capitalized the interest expenses into the assets in the amount of EUR 178 thousand (from 1 November 2021 to 31 October 2022, the Group capitalized interest expenses into the assets in amount of EUR 243 thousand). Interest rate used for interest expense capitalization was 7.29% in the period from 1 November 2022 to 31 October 2023 (from 1 November 2021 to 31 October 2022: 6.24%). 1.11.2022 - 1.11.2021 - in TEUR 31.10.2023 31.10.2022 Cost of administration of financial instruments -273 -593 Foreign exchange gains/loss 7 162 -1 763 Net profit / (loss) on financial operations total 6 889 -2 356 In the period from 1 November 2022 to 31 October 2023, the Group disclosed a profit on financial operations of EUR 6,889 thousand (from 1 November 2021 to 31 October 2022 a loss of EUR 2,356 thousand). The profit on financial instruments was primarily due to the strengthening of the Polish zloty, which resulted in a revaluation of euro-denominated loans received by the Polish subsidiaries (2022: The loss on financial instruments was primarily due to the weakening of the Polish zloty, which resulted in a revaluation of euro-denominated loans received by the Polish subsidiaries). 13. Current and Deferred Income Tax Deferred income taxes are calculated using statutory tax rates which are expected in the period in which a receivable is realized, or a liability is settled. In order to calculate deferred tax from temporary differences incurred in the Slovak Republic, the Group used a 21% rate for the year 2023, resulting from the corporate income tax rate applicable on the date of preparation of the financial statements. To calculate deferred tax from temporary differences incurred in Poland and Czech Republic, the Group used a 19% tax rate. The Group used a 24% (the tax rate decreased from 25% to 24% - the effective date of change is 1 January 2023) tax rate in Austria as per the income tax rate of legal entities effective as at the date the financial statements were prepared on. The individual tax rates used to calculate deferred taxes on temporary differences have not changed in any of the remaining countries in which the Group operates compared to the previous accounting period. 140 Consolidated Financial Statements 1.11.2022 - 1.11.2021 - in TEUR 31.10.2023 31.10.2022 Current tax: Tax of current accounting period -1 908 -775 Withholding tax on interest -11 -1 -1 919 -776 Deferred tax: Posting and release of temporary differences -1 184 3 068 Change of tax rate - - Total income tax -3 103 2 292 Reconciliation of the effective tax rate in TEUR 1.11.2022 - 31.10.2023 1.11.2021 - 31.10.2022 % % Profit / (loss) before taxes 2 555 -14 239 Tax rate 21% 537 21% -2 990 Tax non-deductible expenses 46% 1 181 -8% 1 086 Income not subject to tax -3% -71 18% -2 539 Current tax: withholding tax on interest 0% 11 0% 1 Tax losses claimed during the period -11% -282 4% -552 Deferred tax asset not recognized 74% 1 902 -19% 2 740 Impact of Polish, Czech, Austrian tax rate -7% -175 0% -38 Total 121% 3 103 16% -2 292 Income tax reported through other comprehensive income: 1.11.2022 - 31.10.2023 1.11.2021 - 31.10.2022 Before After Before After in TEUR taxes Tax taxes taxes Tax taxes Other comprehensive income that may be reclassified to profit / (loss) in subsequent periods (net of tax): Net gain/(loss) on cash flow hedges 3 294 692 2 602 -1 396 -293 -1 103 Other comprehensive income 3 294 692 2 602 -1 396 -293 -1 103 141 Consolidated Financial Statements Movements of deferred tax liability (net) during 2023 and 2022 2023 Reported Reported in Effect of Acquired Balance as at in profit other foreign through Balance as at 1 November and loss comprehensive exchange business 31 October in TEUR 2022 statement income difference combination 2023 Property, plant and equipment, -26 183 -637 - - - -26 820 and intangible assets Investment property -595 156 - - - -439 Losses on impairment of trade 259 -41 - 1 - 219 receivables and other assets Cash Flow hedge 691 - -691 - - - Provisions and liabilities 1 721 -403 - 89 - 1 407 Leases (IFRS 16) 240 -306 - - - -66 Tax losses 469 -105 - 6 - 370 Other temporary differences 873 152 - 3 - 1 028 Total, net -22 525 -1 184 -691 99 - -24 301 2022 Reported Reported in Effect of Acquired Balance as at in profit other foreign through Balance as at 1 November and loss comprehensive exchange business 31 October in TEUR 2021 statement income difference combination 2022 Property, plant and equipment, -25 465 1 837 - -91 -2 464 -26 183 and intangible assets Investment property -785 190 - - - -595 Losses on impairment of trade 512 -259 - -1 7 259 receivables and other assets Cash Flow hedge 398 - 293 - - 691 Provisions and liabilities 587 1 037 - -31 128 1 721 Leases (IFRS 16) -181 421 - - - 240 Tax losses 753 -283 - -1 - 469 Other temporary differences 725 149 - -1 - 873 Total, net -23 456 3 091 293 -124 -2 329 -22 525 See also Note 18 - Deferred tax asset, deferred tax liability. 142 Consolidated Financial Statements 14. Property, Plant and Equipment Individual Land and movable assets Assets under Total buildings and sets of construction in TEUR movable assets Cost Opening balance as at 1.11.2021 353 720 174 544 12 412 540 676 Additions 2 023 1 482 19 674 23 179 Additions due to business combinations 33 487 898 - 34 385 Disposals -5 874 -1 149 -298 -7 321 Transfer from an Asset with a right of use - 350 - 350 Transfers within assets 1 240 601 -1 841 - Foreign exchange difference -1 066 319 -213 -960 Balance as at 31.10.2022 383 530 177 045 29 734 590 309 Opening balance as at 1.11.2022 383 530 177 045 29 734 590 309 Additions 5 954 6 582 9 323 21 859 Disposals -2 565 -590 -873 -4 028 Transfer from/to Investment property 747 - - 747 Transfer from Right-of-use assets 277 1 899 - 2 176 Transfers within assets 11 583 8 816 -20 399 - Foreign exchange difference 5 210 905 166 6 281 Balance as at 31.10.2023 404 736 194 657 17 951 617 344 Accumulated depreciation and losses from impairment of assets Opening balance as at 1.11.2021 -84 805 -75 464 - -160 269 Depreciation of current accounting period -12 452 -9 806 - -22 258 Disposals 2 077 1 091 - 3 168 Impairment of non-current assets -5 398 -579 - -5 977 Transfer from an Asset with a right of use - -172 - -172 Foreign exchange difference 349 -188 - 161 Balance as at 31.10.2022 -100 229 -85 118 - -185 347 Opening balance as at 1.11.2022 -100 229 -85 118 - -185 347 Depreciation of current accounting period -14 087 -10 579 - -24 666 Disposals 1 398 542 - 1 940 Transfer of Impairment of assets to Right-of- 13 411 - - 13 411 use assets Impairment of non-current assets -1 885 -2 643 - -4 528 Transfer from Right-of-use assets -120 -1 001 - -1 121 Transfers within assets 95 -95 - - Foreign exchange difference -1 868 -599 - -2 467 Balance as at 31.10.2023 -103 285 -99 493 - -202 778 Carrying value As at 1.11.2021 268 916 99 080 12 412 380 408 As at 31.10.2022 283 301 91 927 29 734 404 962 As at 1.11.2022 283 301 91 927 29 734 404 962 As at 31.10.2023 301 451 95 164 17 951 414 566 143 Consolidated Financial Statements In the period from 1 November 2022 to 31 October 2023 , the Group carried out investments amounting to EUR 21,859 thousand. From the total value the Group invested EUR 18,442 thousand in Slovakia. The Group invested EUR 7,408 thousand into the continuation of the construction of the Centrum Jasná complex, EUR 5,636 thousand in the completion of the Biela Púť – Priehyba cable car, EUR 933 thousand in the reconstruction of wellness in the Grandhotel Starý Smokovec, EUR 449 thousand in the reconstruction of apartments in Bešeňová, EUR 409 thousand in the area of IT infrastructure and EUR 275 thousand in the reconstruction of the water slide tower in Aquapark Tatralandia. The Group also made other minor operational investments. In the Republic of Poland, the Group invested EUR 1,496 thousand in the period from 1 November 2022 to 31 October 2023, of which in the Szczyrk resort the Group capitalized costs related to tree cutting fees connected with investments into renewal of the ski resort in the amount of EUR 672 thousand, invested EUR 172 thousand in the development of the existing bike park, EUR 170 thousand in ski slope maintenance machines, EUR 103 thousand in the reconstruction of the cable car and also made other smaller investments. In the Legendia resort in Chorzów, the Group made various operational investments worth EUR 116 thousand. In the Czech Republic, the Group invested a total of EUR 862 thousand in the period from 1 November 2022 to 31 October 2023 . In the Ještěd resort, the Group invested the amount of EUR 367 thousand in the completion of the investment project "Nová Skalka" and financed various small operational investments in the amount of EUR 142 thousand. Within the golf segment in the Ostravice and Kaskáda resorts, the Group invested EUR 170 thousand in several small investments. In Austria, the Group invested in the period from 1 November 2022 to 31 October 2023 a total of EUR 1,059 thousand, of which EUR 306 thousand in Muttereralm resort and EUR 753 thousand in Mölltaler and Ankogel resorts. At the Muttereralm resort, the Group invested EUR 116 thousand into the access system and also made other smaller investments. In Mölltaler and Ankogel resorts, the Group invested EUR 448 thousand to the cableway and extension of ski slopes and made also other minor investments. The Group also reclassified right-of-use assets with the accounting residual value of EUR 1,055 thousand (from 1 November 2021 to 31 October 2022: EUR 177 thousand) due to the termination of finance leases during the period from 1 November 2022 to 31 October 2023. Transfer from Investment Property in the amount of EUR 747 thousand includes the transfer of Hotel Liptov and accommodation facility Otupné, for which the lease to third parties was terminated on 31 May 2023 and 30 September 2023 respectively, and which the Group has begun to operate again. Transfer of Impairment of assets to Right-of-use assets amounting to EUR 13,411 thousand represents the impairment losses attributable to company SWM. The Group assigned the asset impairment to the lease of the 'Legendia' resort. Information on the assets impairment testing is described in Note 3 (d). In the period from 1 November 2021 to 31 October 2022 , the Group carried out investments amounting to EUR 23,179 thousand. From the total value the Group invested EUR 20,286 thousand in Slovakia. The Group invested EUR 10,446 thousand in the construction of the Biela Púť – Priehyba - cableway, EUR 3,689 thousand in the continuation of the construction of the Centrum Jasná complex and completely strengthened snowmaking worth EUR 1,903 thousand. The Group also acquired the gastronomic facility, named Humno, in Tatranská Lomnica worth EUR 780 thousand, invested EUR 402 thousand in the completion of water reservoir, named Zadné vody, EUR 317 thousand in the reconstruction of spiral chute in the Aquapark Tatralandia, EUR 195 thousand in the expansion of the capacity of the Bistro Bešeňová gastronomic facility and made also other minor investments. In the Republic of Poland, the Group invested EUR 637 thousand in the period from 1 November 2021 to 31 October 2022, of which in the Szczyrk resort the Group made investments in the gastronomic facilities and improving the safety of the bike park worth EUR 153 thousand, invested EUR 113 thousand in the purchase of land and also made other minor investments. In Legendia resort in Chorzów, the Group made various operational investments worth EUR 155 thousand. In the Czech Republic, the Group invested a total of EUR 1,343 thousand. In the Ještěd resort, the Group invested an amount of EUR 773 thousand in the completion of the investment project "Nová Skalka" and financed various small 144 Consolidated Financial Statements operational investments in the amount of EUR 388 thousand. Within the golf segment in the resorts of Ostravice and Kaskáda, the Group invested EUR 182 thousand in several small investments. In Austria, the Group invested a total of EUR 913 thousand, of which EUR 561 thousand in Muttereralm resort and EUR 352 thousand in Mölltaler and Ankogel resorts. At the Muttereralm resort, the Group invested EUR 323 thousand in the development of an existing bike park and also made other smaller investments. In Mölltaler and Ankogel resorts, the Group invested EUR 119 thousand in a new access system and also made other minor investments. The Group also made other small investments in Slovakia, the Republic of Poland, Austria, and the Czech Republic. Impairment loss For the period ending as at 31 October 2023, for the location of SWM (CGU) in the Republic of Poland, the impairment test showed the need for impairment of fixed assets in a total amount of EUR 196 thousand (31 October 2022: EUR 5,240 thousand), of which EUR 176 thousand (31 October 2022: EUR 5,180 thousand) related to land and buildings, a value of EUR 20 thousand (31 October 2022: EUR 60 thousand) to individual movable assets and sets of movable assets. For the period ending on 31 October 2023, for the location of Muttereralm (CGU) in Austria, the impairment test showed the need for impairment of fixed assets in a total amount of EUR 1,122 thousand (31 October 2022: EUR 737 thousand), of which EUR 294 thousand (31 October 2022: EUR 217 thousand) related to land and buildings, the value of EUR 828 thousand (31 October 2022: EUR 520 thousand) to individual movable assets and sets of movable assets. For the period ending as at 31 October 2023 for Mölltaler/Ankogel (CGU) in Austria, the impairment test showed the need for impairment of fixed assets totaling EUR 3,210 thousand, of which EUR 1,415 thousand related to land and buildings, EUR 1,795 thousand to individual movables and sets of movables. Information on the assets impairment testing is described in Note 3 (d). Insurance of assets in TEUR 31.10.2023 31.10.2022 Natural disaster and vandalism 766 223 772 245 General machinery risks 50 610 59 056 Liability for damage 53 268 52 963 Security As at 31 October 2023, Property, plant and equipment in the amount of EUR 395,004 thousand were used to secure bank loans and bonds (as at 31 October 2022: in the amount of EUR 372,711 thousand). Capitalized borrowing costs As at 31 October 2023, the Group capitalized interest expense into assets in the amount of EUR 178 thousand (as at 31 October 2022: the Group capitalized interest expense into assets in the amount of EUR 243 thousand). 145 Consolidated Financial Statements 15. Right-of-use Assets Movements in the carrying amounts of property, plant and equipment acquired through lease were as follows: Individual in TEUR Land and movable assets Total buildings and sets of movable assets Cost Opening balance as at 1.11.2021 74 116 9 163 83 279 Additions 1 818 955 2 773 Additions due to business combinations 1 121 - 1 121 Transfer to Property, plant and equipment - -350 -350 Disposals -907 -871 -1 778 Modifications 1 606 174 1 780 Foreign exchange difference -57 3 -54 Balance as at 31.10.2022 77 697 9 075 86 772 Opening balance as at 1.11.2022 77 697 9 075 86 772 Additions 659 1 675 2 334 Transfer to Property, plant and equipment -277 -1 899 -2 176 Disposals -53 -515 -568 Modifications 5 636 -81 5 555 Foreign exchange difference 948 9 957 Balance as at 31.10.2023 84 610 8 264 92 874 Accumulated depreciation and losses from impairment of assets Opening balance as at 1.11.2021 -9 110 -3 237 -12 347 Depreciation of current accounting period -4 197 -1 666 -5 863 Transfer to Property, plant and equipment - 172 172 Disposals 907 876 1 783 Modifications 2 -23 -21 Foreign exchange difference 4 -1 3 Balance as at 31.10.2022 -12 394 -3 879 -16 273 Opening balance as at 1.11.2022 -12 394 -3 879 -16 273 Depreciation of current accounting period -4 296 -1 548 -5 844 Transfer to Property, plant and equipment 120 1 001 1 121 Disposals 53 515 568 Transfer of Impairment of assets from Property, plant -13 411 - -13 411 and equipment Modifications - - - Foreign exchange difference -5 -12 -17 Balance as at 31.10.2023 -29 933 -3 923 -33 856 Carrying value As at 31.10.2022 65 303 5 196 70 499 As at 31.10.2023 54 677 4 341 59 018 146 Consolidated Financial Statements 16. Goodwill and Intangible Assets Acquired Goodwill Valuable Software intangible Total rights assets in TEUR Cost Opening balance as at 1.11.2021 32 324 6 930 5 080 135 44 470 Additions - 19 396 22 437 Additions due to business combinations - 595 33 - 628 Disposals - - - -24 -24 Disposals due to disposal of subsidiaries -161 - - - -161 Transfers within assets - - 110 -110 - Foreign exchange difference -22 43 -3 - 18 Balance as at 31.10.2022 32 141 7 587 5 616 23 45 367 Opening balance as at 1.11.2022 32 141 7 587 5 616 23 45 367 Additions - 30 428 338 796 Disposals - - -18 -1 -19 Foreign exchange difference 68 3 32 -22 81 Balance as at 31.10.2023 32 209 7 620 6 058 338 46 225 Accumulated depreciation and losses from impairment of assets Opening balance as at 1.11.2021 -4 298 -1 134 -3 187 - -8 618 Depreciation of current accounting - -572 -558 - -1 130 period Foreign exchange difference 22 -38 3 - -13 Balance as at 31.10.2022 -4 276 -1 744 -3 742 - -9 762 Opening balance as at 1.11.2022 -4 276 -1 744 -3 742 - -9 762 Depreciation of current accounting - -323 -648 - -971 period Disposals - - 18 - 18 Foreign exchange difference -68 - -11 - -79 Balance as at 31.10.2023 -4 344 -2 067 -4 383 - -10 794 Carrying value As at 1.11.2021 28 026 5 796 1 893 135 35 851 As at 31.10.2022 27 865 5 843 1 874 23 35 605 As at 31.10.2022 27 865 5 843 1 874 23 35 605 As at 31.10.2023 27 865 5 553 1 675 338 35 431 Valuable rights are represented mainly by trademarks related to Aquapark Tatralandia. 147 Consolidated Financial Statements 17. Investment Property in TEUR 31.10.2023 31.10.2022 Acquisition price Opening balance as at 1.11.2022 / 1.11.2021 7 411 8 317 Transfer from/to Property, Plant and Equipment -748 - Revaluation at fair value - -906 Balance as at 31.10.2023 / 31.10.2022 6 663 7 411 As at 31 October 2023, investment property represents hotel Kosodrevina, Chata Solisko and Vila Zámoček with an aggregate book value of EUR 1,042 thousand (as at 31 October 2022: EUR 1,789 thousand), which are leased out to third parties that operate them. Hotel Kosodrevina is located in the Low Tatras, Chata Solisko and Vila Zámoček are located in the High Tatras. Chata Solisko and Vila Zámoček in the amount of EUR 833 thousand (as at 31 October 2022: EUR 833 thousand) were acquired as a result of the Company’s merger with 1. Tatranská. In addition, investment property also includes forest areas and lots of land in Starý Smokovec in the book value of EUR 5,622 thousand (as at 31 October 2022: EUR 5,622 thousand) acquired by acquisition in 2009. Transfer to Property, Plant and Equipment in the amount of EUR 747 thousand includes the transfer of Hotel Liptov and accommodation facility Otupné, for which the lease to third parties was terminated on 31 May 2023 and 30 September 2023 respectively, and which the Group has begun to operate again. As at 31 October 2023, Group management concluded that the assumptions leading to a change in the value of these investments had not changed significantly (as at 31 October 2022: Group management has revised the value of investment property downwards by EUR 906 thousand based on current market and contractual conditions). The value of the leased properties was determined by management's estimate. The estimate of management's fair value is based on discounting future cash flows arising from currently concluded lease contracts after taking into account non- recoverable costs of 4-10% in each of the objects at yield of 6-10%, assuming continuation at current prices. During the current period the lease contract of the Hotel Kosodrevina has not changed compared to the previous period. Other assumptions have also not changed during the current period presented, resulting in no change in their fair value. The value of the land was determined by the management using market prices, and the final value is based on an estimate of market price per square meter, depending on the type of land and market transactions for similar lots of land. The price per m 2 for forest land is in a range between EUR 0.60 – EUR 1.10, the price for land with built-up areas and courtyards ranges from EUR 60 to EUR 110 per m 2 . Prices per m 2 for individual types of land did not change during the presented or comparable period. If the fair value of that part of investment property that was determined based on management's estimates differed by 10%, the carrying amount of investment property would be EUR 666 thousand higher or lower compared to the amount reported as at 31 October 2023 (as at 31 October 2022: EUR 741 thousand). In the period between 1 November 2022 and 31 October 2023, income from investment property accounted for EUR 140 thousand and direct operating cost related to investment property was EUR 20 thousand (between 1 November 2021 and 31 October 2022: income from investment property accounted for EUR 138 thousand, and direct operating cost related to investment property was EUR 39 thousand). Security As at 31 October 2023, a part of investment property in the amount of EUR 209 thousand were used as the security for bank loans and bonds (as at 31 October 2022: in the amount of EUR 1,257 thousand). 148 Consolidated Financial Statements 18. Deferred Tax Asset, Deferred Tax Liability Deferred tax asset (liability) has been recognized for these items: in TEUR Receivables Liabilities Total 31.10.2023 31.10.2022 31.10.2023 31.10.2022 31.10.2023 31.10.2022 Temporary differences related to: Property, plant and equipment, 6 792 5 669 -33 612 -31 852 -26 820 -26 183 and intangible assets Investment property - - -439 -595 -439 -595 Losses from impairment of trade 273 260 -54 -1 219 259 receivables and other assets Cash Flow hedge - 691 - - - 691 Provisions and liabilities 2 999 3 253 -1 592 -1 532 1 407 1 721 Leases (IFRS 16) 256 350 -322 -110 -66 240 Tax losses 370 469 - - 370 469 Other temporary differences 1 028 873 - - 1 028 873 Offsetting -6 422 -7 383 6 422 7 383 - - Total 5 296 4 182 -29 597 -26 707 -24 301 -22 525 Deferred tax asset was not recognized for these items (tax base): in TEUR 31.10.2023 31.10.2022 Property, plant and equipment, and intangible assets -44 699 -23 311 Losses on impairment of trade receivables and other assets - -120 Provisions and liabilities -11 266 -22 965 Tax losses -747 - Total -56 712 -46 396 Deferred tax asset from carry-forward losses is recognized only up to the amount up to which it can be utilized against future tax profits. The expected last periods for utilization of tax losses are as follows: in TEUR 2024 2025 2026 after 2026 Tax losses 1 387 496 215 103 149 Consolidated Financial Statements Based on the legislative change in Slovakia, the tax loss can be deducted from the tax base for 2023 as follows: • for 2019 – in the amount of ¼, • for 2020 – in any amount, but not more than 50% of the tax base of the current year, • for 2021 – in any amount, but not more than 50% of the tax base of the current year, • for 2022 – in any amount, but not more than 50% of the tax base of the current year. In Poland the maximum deadline for utilization of tax losses incurred is 5 years. The Group may apply evenly maximum 50% of tax losses per year. If the entity ’ s tax loss does not exceed PLN 5 000 000, the entity may claim up to 100% of the loss for the next 5 consecutive years. In the Czech Republic, the maximum deadline for utilization of tax losses is 5 subsequently following years, starting after the year in which the tax loss incurred. In Austria, the legislation does not limit the use of incurred tax losses. 19. Inventories in TEUR 31.10.2023 31.10.2022 Goods 2 870 1 973 Material 2 643 1 959 Chalets and apartments developed for sale 3 958 575 Total 9 471 4 507 Chalets and apartments for sale in the amount of EUR 3,958 thousand represent apartments under construction in the Centrum Jasná complex worth EUR 3,813 thousand and recreational buildings in the cottage settlement Bobrovečky in the value of EUR 145 thousand, the construction of which the Group carries out and subsequently plans to sell to third parties. Revenue from the sale of recreational properties will be reported in 2024 or later. As at 31 October 2022 chalets and apartments for sale in the amount of EUR 575 thousand are recreational objects in the cottage settlement Bobrovečky 1, the construction of which has been carried out by the Parent Company and subsequently are intended to be sold to third parties. The revenue from the sale of recreational objects will be reported in 2023 or later. These are 16 recreational objects in the cottage settlement Bobrovečky 1, Liptovská Ondrášová. In the period from 1 November 2022 to 31 October 2023, inventories amounted to EUR 16,430 thousand (from 1 November 2021 to 31 October 2022: EUR 11,789 thousand) were recognized as an expense during the year and included in the income statement. The Group did not recognize any write-down of inventories in the reporting and comparative period. Security As at 31 October 2023, inventories of EUR 9,471 thousand were used to secure bank loans and bonds (as at 31 October 2022: EUR 4,507 thousand). 150 Consolidated Financial Statements 20. Loans Provided in TEUR 31.10.2023 31.10.2022 Short-term 2 481 2 268 Long-term 1 245 894 Total 3 726 3 162 Impairment allowance to loans provided -1 055 -1 053 Total with allowance 2 671 2 109 As at 31 October 2023 in accordance with the rules of IFRS 9, the value of impairment allowance for loans provided was EUR 1,055 thousand (as at 31 October 2022: EUR 1,053 thousand). Table below summarizes long-term loans as at 31 October 2023 and 31 October 2022. As at 31 October 2023 the weighted average interest rates applied on long-term loans was 0.46% p.a. (as at 31 October 2022: 0.00% p.a.). in TEUR 31.10.2023 31.10.2022 Debtor Interest rate type Loan value Loan value MELIDA, a.s. - 892 894 OSTRAVICE HOTEL a.s. 4% p.a. 143 - Desať s.r.o. - 210 - Total long-term loans 1 245 894 Table below summarizes short-term loans as at 31 October 2023 and 31 October 2022. As at 31 October 2023 the weighted average interest rates applied on short-term loans was 6.13% p.a. (as at 31 October 2022: 5.79% p.a.). in TEUR 31.10.2023 31.10.2022 Debtor Interest rate type Loan value Loan value Thalia s.r.o. 5% p.a. 1 076 1 033 SON Partner 7% p.a. 1 077 963 MS reality holding a.s. 7% p.a. 328 - OSTRAVICE HOTEL a.s. 4% p.a. - 138 P.M.I.R a.s. 5% p.a. - 132 Other 4% p.a. - 2 Total short-term loans 2 481 2 268 151 Consolidated Financial Statements 21. Trade Receivables in TEUR 31.10.2023 31.10.2022 Trade receivables 5 661 5 291 Impairment allowance to receivables -124 -419 Total 5 537 4 872 Short-term 5 537 4 872 Long-term - - Total 5 537 4 872 As at 31 October 2023, carrying amount of trade receivables amounts to EUR 5,537 thousand and comprises of current operating receivables (as at 31 October 2022: EUR 4,872 thousand). The ageing structure of receivables is as follows: in TEUR 31.10.2023 31.10.2022 Impairment Impairment Gross allowance Net Gross allowance Net Within due period 5 068 -97 4 971 4 258 -59 4 199 Overdue within 30 days 198 -3 195 203 -3 200 Overdue from 30 days to 180 days 180 -2 178 196 -36 160 Overdue from 180 days to 365 days 86 -6 80 314 -102 212 Overdue over 365 days 129 -16 113 320 -219 101 Total 5 661 -124 5 537 5 291 -419 4 872 As at 31 October 2023 and 31 October 2022, the amount of the impairment allowance consisted of value adjustments to current operating receivables. The development of the impairment allowance during the accounting period is shown in the overview below: in TEUR 31.10.2023 31.10.2022 Balance as at 1.11.2022 / 1.11.2021 419 306 Creation of impairment allowance 27 165 Additions due to business combinations - 33 Use -103 -29 Reversal of impairment allowance -219 -56 Balance as at 31.10.2023 / 31.10.2022 124 419 Security As at 31 October 2023, trade receivables of EUR 5,537 thousand were used to secure bank loans and bonds (as at 31 October 2022: EUR 4,872 thousand). 152 Consolidated Financial Statements 22. Other Receivables in TEUR 31.10.2023 31.10.2022 Advance payments made 2 344 4 680 Total 2 344 4 680 Short-term 1 838 4 172 Long-term 506 508 Total 2 344 4 680 The advance payments made as at 31 October 2023 amount to a total of EUR 2,344 thousand (as at 31 October 2022: EUR 4,680 thousand). The decrease in short-term advances provided, compared to the value as at 31 October 2022, is mainly due to the settlement of advances granted in the immediately preceding accounting period in connection with the construction of the Biela Púť – Priehyba cable car and the Centrum Jasná complex, as well as the reconstruction of cottages in the Holiday Village Tatralandia cottage area. 23. Other Assets in TEUR 31.10.2023 31.10.2022 Prepaid expenses and accrued income 3 544 2 280 Other tax assets 736 831 Other assets 3 298 3 297 Finance sublease receivables 97 - Derivative operations - currency SWAP - 254 Impairment allowance -23 -16 Total 7 652 6 646 Short-term 7 652 6 646 Long-term - - Total 7 652 6 646 Based on the assignment contract and set-off agreement of receivables, the Group records as at 31 October 2023 a receivable against Penzión Energetik s.r.o. in the amount of EUR 1,994 thousand (as at 31 October 2022: EUR 1,994 thousand). As at 31 October 2023, derivative operations - currency SWAP represents the fair value of the derivative of EUR 0 thousand, hedging accounting was completed during the current period (as at 31 October 2022: EUR 254 thousand). For more information, see Note 30 – Hedge Accounting. As at 31 October 2023, in accordance with the rules of IFRS 9, the impairment allowance for other assets amounted to EUR 23 thousand (as at 31 October 2022: EUR 16 thousand). 153 Consolidated Financial Statements Tatry mountain resorts, a.s., Subsidiaries, Joint Ventures and Associates Notes to the Consolidated Financial Statements for the Period from 1 November 2022 to 31 October 2023 24. Financial Investments in TEUR 31.10.2023 31.10.2022 Financial instruments measured at fair value through profit or loss 39 42 Total 39 42 Financial investments represent an investment of a cash contribution to Tatranské dopravné družstvo, which is engaged in brokerage activities in the area of services in the amount of EUR 36 thousand (31 October 2022: EUR 36 thousand) and an investment in SON Partner Sp. Z o. o. in the amount of EUR 3 thousand (as at 31 October 2022: EUR 6 thousand). 25. Cash and Cash Equivalents in TEUR 31.10.2023 31.10.2022 Cash 263 240 Stamps and vouchers 26 35 Current accounts with banks 17 440 15 327 Impairment allowance -2 -2 Total 17 727 15 600 As at 31 October 2023, the value of impairment allowance to cash and cash equivalents under IFRS 9 was EUR 2 thousand (as at 31 October 2022: EUR 2 thousand). The Group has cash and cash equivalents that are deposited in banks and financial institutions that have been awarded a credit rating between A2 to Baa2 by recognized rating agencies. Security The Group may freely dispose of the bank accounts. 26. Equity Share capital and share premium The share capital approved, subscribed and fully paid as at 31 October 2023 and 31 October 2022 comprised of 6,707,198 ordinary shares in nominal value of EUR 7 per share as at 31 October 2023 and 31 October 2022. The emission of shares is marked by ISIN: SK1120010287. On 31 May 2023, an ordinary general assembly of Tatry mountain resorts, a.s. was held. The general assembly decided, among other things, on the distribution of profit Tatry mountain resorts, a.s. generated in the period between 1 November 2021 and 31 October 2022 according to the separate financial statements compiled for that accounting period, in the amount of EUR 3,287 thousand as follows: - Allocation to the legal reserve fund in the amount of EUR 329 thousand - Allocation to the social fund on the basis of a collective agreement in the amount of EUR 16 thousand - Balance of EUR 2,942 thousand, transfer to retained earnings of previous periods Shareholders have a right to the payment of dividends, and the value of share vote in the Company’s general assembly is determined as a ratio of the value of one share and the total value of share capital. The following table presents the Company’s shareholders and the number of shares, ownership interest and voting rights . 154 Consolidated Financial Statements 31 October 2023 Number Ownership Ownership Voting of shares interest interest rights in TEUR % % C.I. CAPITAL INDUSTRIES LIMITED 1 973 197 13 812 29.4% 29.4% FOREST HILL COMPANY, s.r.o. 1 030 919 7 216 15.4% 15.4% RMSM1 LIMITED 992 666 6 949 14.8% 14.8% DIAMCA INVESTMENTS LIMITED 918 780 6 431 13.7% 13.7% Minority shareholders 1 791 636 12 541 26.7% 26.7% Total 6 707 198 46 950 100% 100% 31 October 2022 Number Ownership Ownership Voting of shares interest interest rights in TEUR % % C.I. CAPITAL INDUSTRIES LIMITED 1 973 197 13 812 29.4% 29.4% FOREST HILL COMPANY, s.r.o. 1 030 919 7 216 15.4% 15.4% STOCKLAC LIMITED 992 666 6 949 14.8% 14.8% NIKROC INVESTMENTS LIMITED 800 000 5 600 11.9% 11.9% RMSM1 LIMITED 404 486 2 831 6.0% 6.0% Minority shareholders 1 505 930 10 542 22.5% 22.5% Total 6 707 198 46 950 100% 100% Profit / (loss) per share 31.10.2023 31.10.2022 Profit / (loss) for the period in TEUR -497 -11 361 Weighted average number of ordinary shares 6 707 198 6 707 198 Basic and diluted earnings per share in EUR -0.074 -1.694 L egal reserve fund The legal reserve fund amounts to EUR 7,305 thousand (as at 31 October 2022: EUR 7,021 thousand). According to the Slovak legislation, a legal reserve fund shall be mandatorily created on an annual basis, in the minimum amount of 10% of the company's net profit and minimum of 20% of the subscribed share capital (on a cumulative basis). The legal reserve fund may be used only for the settlement of the company's losses, and it cannot be used for payment of dividends. The calculation of the legal reserve fund is made in compliance with the Slovak legal regulations. The obligation to create a legal reserve fund is determined by the partnership agreement, while the Company is obliged to create a legal reserve fund only when profit is made. The legal reserve fund of the subsidiaries totals EUR 936 thousand. According to the Polish law the fund is mandatorily created on an annual basis; in the minimum amount of 8% of the company's net profit and up to 33% of the subscribed share capital (on a cumulative basis). The legal reserve fund does not have to be formed according to the Czech legislation, its creation is purely voluntary, unless otherwise stated in the statutes or in the company's partnership agreement. According to Austrian legislation, the legal reserve fund is created depending on the size and type of company. Its creation is purely voluntary, this obligation is not stipulated by the obligations in the currently valid partnership agreement. 155 Consolidated Financial Statements Profit (loss) distribution For the fiscal year ended on 31 October 2023 , the Parent Company’s management proposes the distribution of total profit of the Parent Company in the amount of EUR 2,712 thousand as follows: - Allocation to the legal reserve fund of EUR 271 thousand - Allocation to the social fund on the basis of a collective agreement in the amount of EUR 13 thousand - Balance of EUR 2,428 thousand transfer to retained earnings of previous periods Change in the foreign currency translation reserve The foreign currency translation reserve includes all foreign exchange differences resulting from conversion of the financial statements of foreign companies Szczyrkowski Ośrodek Narciarski, S.A., Ślaskie Wesole Miasteczko Sp. z o. o. Korona Ziemi sp.z o.o in Poland, from translation of financial statements of TMR Ještěd, a.s. and TMR Finance Č R, a.s., Tatry mountain resorts Č R, a.s., International TMR services s.r.o. and GOPASS SE in Czech Republic to euros. As at 31 October 2023, the foreign currency translation reserve included all exchange differences resulting from conversion of the financial statements of the aforementioned foreign subsidiaries. Non-controlling interest Non-controlling interests represent the interests of minority shareholders in subsidiaries: in TEUR 31.10.2023 31.10.2022 Szczyrkowski Ośrodek Narciarski, S.A (SON) (3%) -513 -499 Korona Ziemi sp.z o.o. (26%) -187 -147 Total -700 -646 Material non-controlling interests Szczyrkowski Ośrodek Narciarski, S.A (SON) in TEUR 31.10.2023 31.10.2022 Non-current assets 60 979 58 772 Current assets 2 355 2 210 Assets 63 335 60 982 Non-current liabilities -27 423 -29 958 Current liabilities -53 004 -47 646 Liabilities -80 427 -77 604 Net assets, net of goodwill -17 092 -16 622 Percentage of non-controlling interest 3% 3% Book value of non-controlling interest -513 -499 Revenues 11 297 10 766 Profit (loss) -459 -3 940 Other comprehensive income - - Total comprehensive income -459 -3 940 Percentage of non-controlling interest 3% 3% Profit/(loss) attributable to the non-controlling interest -14 -118 Other comprehensive income attributable to the non- controlling interest - - Net increase (decrease) of cash and cash equivalents -515 122 156 Consolidated Financial Statements 27. Loans and Borrowings in TEUR 31.10.2023 31.10.2022 Loans and borrowings received 117 882 122 830 Total 117 882 122 830 Short-term 11 462 10 151 Long-term 106 420 112 679 Total 117 882 122 830 Received loans and borrowings as at 31 October 2023 and 31 October 2022 are shown in the following overview: Unpaid amount Interest rate type Maturity date as at Creditor 31.10.2023 in TEUR J&T BANKA, a.s. 3M EURIBOR + 4.75% p.a. 31.12.2029 33 747 J&T BANKA, a.s. 12M EURIBOR + 5% p.a. 31.3.2033 31 152 J&T BANKA, a.s. 3M EURIBOR + 4.75% p.a. 31.12.2026 20 377 J&T BANKA, a.s. 3M EURIBOR + 5.25% p.a. 31.12.2026 20 121 J&T BANKA, a.s. 3M EURIBOR + 4.75% p.a. 31.12.2026 12 225 Dr. Nodari Giorgadze - 30.6.2017 190 Raiffeisen - Leasing s.r.o. 7.49% p.a. 15.7.2027 70 Total 117 882 Unpaid amount Interest rate type Maturity date as at Creditor 31.10.2022 in TEUR J&T BANKA, a.s. 3M EURIBOR + 4.75% p.a. 31.12.2029 38 116 J&T BANKA, a.s. 12M EURIBOR + 5% p.a. 31.3.2033 33 411 J&T BANKA, a.s. 3M EURIBOR + 4.75% p.a. 31.12.2026 21 494 J&T BANKA, a.s. 3M EURIBOR + 5.25% p.a. 31.12.2026 20 116 J&T BANKA, a.s. 3M EURIBOR + 4.75% p.a. 31.12.2026 9 418 Dr. Nodari Giorgadze - 30.6.2017 190 Raiffeisen - Leasing s.r.o. 7,49% p.a. 15.7.2027 85 Total 122 830 157 Consolidated Financial Statements The weighted average of interest rates for loans and borrowings received as at 31 October 2023 was 8.86% (as at 31 October 2022: 4.89%). Interest is payable on a monthly and quarterly basis. For more information, see Note 12 – Finance income and expenses. The obligation arising from the loan received from Giorgadze Nodari in the amount of EUR 190 thousand was acquired by the purchase of company WORLD EXCO s.r.o. into the Group on 31 March 2022. As at 15 July 2022, the Group drew funds from a loan from Raiffeisen - Leasing s.r.o that were used to purchase new motor vehicle in the Czech republic. As at 31 October 2023 the loan amounted to EUR 70 thousand (as at 31 October 2022: EUR 85 thousand). As at 30 March 2022, the Group drew funds from a syndicated loan from J&T Banka and thus refinanced its previous loans from J&T Banka and 365.bank, the value of which was EUR 62,396 thousand as at 31 October 2021 (excluding the existing loan from J&T Bank as at 31 October 2022 in the amount of EUR 33,411 thousand). The total outstanding amount of the new loan to J&T Bank as at 31 October 2023 is EUR 86,470 thousand. The funds provided served primarily as a loan to a subsidiary TMR Parks, a.s. to cover the purchase price for the transfer of EUROCOM Investment, s.r.o. shareholding of EUR 10,000 thousand, the refinancing of loans in the acquired companies EUROCOM Investment, s.r.o. and WORLD EXCO s.r.o. in the amount of EUR 11,651 thousand and the construction of the Biela púť - Priehyba cableway. In May 2019, the Group drew funds from J&T Banka a.s. in the amount of EUR 37,000 thousand, which was increased to EUR 40,000 thousand in September 2020, and the total amount of outstanding loan balance as at the reporting date of EUR 31,152 thousand (as at 31 October 2022: EUR 33,411 thousand). As at 31 October 2023, the Group has committed to meet the covenants – Leverage, DSCR and LTV. The Leverage covenant may not exceed 7.75. The DSCR covenant may not be less than 1.1 and the LTV covenant may not exceed 60%. However, failure to meet the LTV ratio does not affect the maturity of the debt, only the amount of security. The Group evaluated fulfillment of covenants as at 31 October 2023. Covenants Leverage, DSCR and LTV which evaluation is due within the dates of issuing the consolidated financial statements were met. Security In order to guarantee bank loans, the following assets were used: lands, technology and service buildings of mountain lift equipment: ski lifts, chair cableways, terrestrial cableways, hanging cableways, cabin cableways, transformers, operating buildings and structures: Grandhotel Praha, Hotel Grand Jasná, Hotel Tri Studničky, Hotel Srdiečko, Hotel Kosodrevina, Hotel Liptov, Hotel SKI, a former telecommunication building, as well as tangible asset of Polish ski resort Szczyrk. All movable assets of the Jasná, High Tatras and aquapark Bešeňová as well as trade receivables are pledged. As at 31 October 2023, property, plant and equipment, investment property, inventories and receivables of EUR 410,604 thousand were used to secure bank loans and bonds (as at 31 October 2022: in the amount of EUR 383,347 thousand). 158 Consolidated Financial Statements 28. Lease Liabilities in TEUR Opening balance as at 1.11.2021 66 154 Additions 2 771 Additions due to business combinations 1 121 Modifications 1 605 Interest 3 096 Payments -7 596 Foreign exchange difference -53 Balance as at 31.10.2022 / 1.11.2022 67 098 Short-term 8 609 Long-term 58 489 Total 67 098 Opening balance as at 1.11.2022 67 098 Additions 2 315 Modifications 6 226 Interest 3 418 Payments -7 839 Foreign exchange difference 1 060 Balance as at 31.10.2023 72 278 Short-term 8 440 Long-term 63 838 Total 72 278 The maturity of lease liabilities is as follows: in TEUR 31.10.2023 31.10.2022 Less than 1 year 8 440 8 609 1 - 5 years 20 537 17 359 Above 5 years 43 301 41 130 Total 72 278 67 098 159 Consolidated Financial Statements 29. Trade Payables and other payables in TEUR 31.10.2023 31.10.2022 Trade payables 12 947 15 005 Liabilities towards employees and social security institutions 9 467 7 352 Unbilled deliveries 3 664 3 499 Total 26 078 25 856 Short-term 25 214 22 226 Long-term 864 3 630 Total 26 078 25 856 As at 31 October 2023, liabilities towards employees and social security institutions mainly represent a provision for bonuses for the financial year from 1 November 2022 to 31 October 2023 amounting to EUR 2,212 thousand (as at 31 October 2022: EUR 1,814 thousand), wage liabilities to employees and social security institutions are in the amount of EUR 5,274 thousand (as at 31 October 2022: EUR 3,976 thousand) and a provision for unused holidays of EUR 1,685 thousand (as at 31 October 2022: EUR 1,388 thousand). The creation and usage of the Social Fund during the accounting period are shown in the following overview: in TEUR 31.10.2023 31.10.2022 Balance as at 1.11.2022 / 1.11.2021 15 -3 Increase from subsidiary acquisition - 3 Creation of social fund against expenses 112 93 Drawing -72 -78 Balance as at 31.10.2023 / 31.10.2022 55 15 As at 31 October 2023, long-term liabilities in the amount of EUR 864 thousand represent retention fees against contractors for the construction of the Centrum Jasná complex, the Biela Púť – Priehyba cableway. As at 31 October 2022, long-term liabilities in the amount of EUR 3 630 thousand represented retention fees in the amount of EUR 1,344 thousand against contractors for the construction of the Centrum Jasná complex, the Biela Púť – Priehyba cableway, the construction of the 2nd stage of snowmaking in Szczyrk and the retention fee resulting from investment projects aimed at improving attractions in the Legendia resort and other long-term liabilities in the amount of EUR 2,286 thousand. As at 31 October 2023, overdue liabilities amounted to EUR 2,222 thousand (as at 31 October 2022: 1,780 thousand). Overdue liabilities as at 31 October 2023 represent primarily unpaid retention fees due to signed construction contracts with suppliers for their performed and realized construction of individual buildings, in some cases repayment schedules are agreed with suppliers. 160 Consolidated Financial Statements 30. Hedge Accounting The Group applied cash-flow hedges and hedges only against foreign currency risk. Since the Group took out a loan from its Czech subsidiary, the currency gap has widened. The Group decided to manage the foreign currency risk against the Czech Crown on this particular instrument by hedging against changes in foreign currency exchange rates. On 7 November 2022, TMR Finance Č R, a.s. repaid the fourth issue of TMR F. Č R bonds in nominal value of CZK 1,500,000 thousand. At the same time, accounting for hedging cash flows against currency risk was completed. The hedging instrument had a fixed maturity in November 2022 for a entire nominal value of EUR 57.9 million. The forward rate used for collateral was CZK 25.870 / EUR 1. The total profit from hedging derivatives in the Comprehensive income is in the amount of EUR 2,602 thousand (as at 31 October 2022: loss of EUR 1,103 thousand) The Group does not currently have any risks hedged through hedge accounting, as they are managed otherwise. Please refer to Note related to financial risks for further information. The Group has no risks under hedging accounting other than currency risk arising from that instrument, as those risks are otherwise managed. For more information, see the section on financial risks. The collateralized item is a long-term bond denominated in Czech currency with a fixed repayment schedule. The secured instrument is a currency swap that swaps instalments in Czech koruna into instalments in euro, while maintaining a fixed interest rate for both currencies. There is an economic relationship between the hedged item and the collateral instrument, as the swap terms replicate the terms of the secured bond (nominal value, maturity and repayment plans). The Group has set the hedging ratio at 1:1 for the hedging relationship, as the underlying currency swap risk is identical to the risk of the hedged item. Since the swap conditions replicate the terms of the secured bond (face value, graduation and repayment schedules), the Group expects the hedging relationship to be largely efficient. Security inefficiencies may occur if the Group ceases to adhere to the repayment schedule. The Group expects to repay the bond in accordance with the repayment schedule. Hedging instrument profile – the hedging instrument has a fixed maturity in November 2022 for the entire nominal value of EUR 57.9 million. The forward rate used for collateral is 25.870 CZK / 1 euro. 161 Consolidated Financial Statements Notional Carrying Line item in Changes in FV amount amount statement of used for In ‘000 EUR financial measuring position ineff. Foreign 57 943 254 Other assets 1 532 exchange swap Change in fair Cash flow Cost of hedging value used for hedge reserve In ‘000 EUR measuring reserve ineffectiveness. Foreign -1 532 -2 602 0 exchange swap In comparable period, the effect of cash flow hedge on statement of financial performance was as follows: Total Ineffectiveness Line item Cost of Amount Line item in the statement hedging recognized in the hedging reclassified of profit or loss gain/(loss) in profit or statement recognized from OCI to In ‘000 EUR recognized loss of in OCI profit or loss in OCI profit or loss Foreign -1 103 0 - 0 379 Interest income calculated exchange swap using the effective interest rate and Interest expense 2 865 Profit / (loss) from financial operations, net 162 Consolidated Financial Statements 31. Contract liabilities 31.10.2023 31.10.2022 in TEUR Advances received 11 388 8 076 Deferred revenue 7 840 6 913 Discounts on purchases 582 582 Total 19 810 15 571 As at 31 October 2023, the advances received represent mainly advances received for hotel accommodation in the amount of EUR 5,112 thousand (as at 31 October 2022: EUR 3,237 thousand) advance on the purchase price in connection with the construction of the water structure Pump station and transformer stations – Otupné, which the Group realizes, in the amount of EUR 3,000 thousand (as at 31 October 2022: EUR 3,000 thousand). The total amount of advance payments received also includes purchased, but not yet spent, Gopass credits of Group clients in the amount of EUR 1,685 thousand (as at 31 October 2022: EUR 1,307 thousand) and advance payments for purchase of cottages in the amount of EUR 109 thousand (as at 31 October 2022: EUR 265 thousand). As at 31 October 2023, the deferred revenues include mainly the amount of EUR 6,718 thousand for accrual of ski passes and aqua passes sold (as at 31 October 2022: EUR 5,203 thousand) with an amount of EUR 5,892 thousand coming from the “Šikovná sezónka“ ski passes sold (as at 31 October 2022: EUR 3,601 thousand) and EUR 826 thousand from other ski passes and aqua passes sold. The provision for discounts on purchases was as at 31 October 2023 in total amount of EUR 582 thousand (as at 31 October 2022: EUR 582 thousand). 32. Other Liabilities in TEUR 31.10.2023 31.10.2022 Liabilities to shareholders from reduction in share capital 213 213 Other liabilities to the former shareholders (Mölltaler Group) 8 580 10 106 Contingent consideration 1 060 983 Other 5 697 2 076 Government subsidies 3 174 3 398 Total 18 724 16 776 Short-term 5 983 3 697 Long-term 12 741 13 079 Total 18 724 16 776 As at 31 October 2023, liabilities to shareholders from reduction in share capital represent the amount EUR 213 thousand (as at 31 October 2022: EUR 213 thousand) and comprise mainly the remaining liability from the capital reduction in 2013 in total amount EUR 174,388 thousand. As at 31 October 2023, other liabilities to the former shareholders amount to EUR 8,580 thousand (as at 31 October 2022: EUR 10,106 thousand) and include, in particular, contain mainly the outstanding balance to the former shareholders of the Austrian company Mölltaler Gletscherbahnen GmbH & Co KG, the repayment of which is in accordance with the agreed repayment calendar at the time of acquisition. 163 Consolidated Financial Statements As at 31 October 2023, the contingent consideration in the amount of EUR 1,060 thousand (as at 31 October 2022: EUR 983 thousand) represents part of the purchase price for the subsidiary Muttereralm Bergbahnen Errichtungs GmbH (date of acquisition: 1.5.2021), which is contingent on the seller fulfilling the contractually stipulated conditions. As at 31 October 2023, the amount of other liabilities includes the amount of EUR 1,202 thousand resulting from from the acquisition of TMR Ješted, a.s. in accordance with standard IFRS 3 (as at 31 October 2022: EUR 1,215 thousand) on the basis of a signed rent agreement ("business rent") for 10 years with an option for the next 10 years and value added tax liabilities in the amount of EUR 721 thousand (as at 31 October 2022: EUR 930 thousand). The table contains a detail on government grants movements : in TEUR 31.10.2023 31.10.2022 Balance as at 1.11.2022 / 1.11.2021 3 398 1 361 Increase from subsidiary acquisition - 1 860 Received during the year 1 038 2 450 Released to the statement of profit and loss and other comprehensive income -1 262 -2 273 Balance as at 31.10.2023 / 31.10.2022 3 174 3 398 In the financial year 2023, state aid totaling EUR 1,038 thousand was received, mainly to compensate for increased energy costs. This is short-term state aid that has been recognized in the statement of comprehensive income as income during the period in which the related costs to be reimbursed are recorded. For more information see Note 8 - Purchased services and 9 - Personnel costs. In the financial year 2022, state aid related to energy with a total value of EUR 1,814 thousand was received. This is short- term State aid that has been recognized in the statement of comprehensive income as income during the period in which the related costs that the aid is intended to compensate for are accounted for. For more information see Note 8 - Purchased services and 9 - Personnel costs. The table summarizes government grants recognized in the statement of comprehensive income: 1.11.2022 - 1.11.2021 - in TEUR 31.10.2023 31.10.2022 State aid related to rental costs - 501 State aid related to wages and salaries 53 382 State aid related to other costs 1 209 1 390 Total 1 262 2 273 33. Provisions 31.10.2023 31.10.2022 in TEUR Opening balance as at 1.11.2022/1.11.2021 613 1 338 Creation of provisions during the year 570 241 Reversal of provisions during the year - -963 Use of provisions during the year -600 -2 Foreign exchange difference 6 -1 Balance as at 31.10.2023/31.10.2022 589 613 164 Consolidated Financial Statements 31.10.2023 31.10.2022 Short-term 422 472 Long-term 167 141 Total 589 613 34. Bonds Issued On 10 October 2018, the Group issued the third bond issue TMR III in the total value of EUR 90,000 thousand. On 7 November 2018, the Group issued the fourth bond issue TMR F. CR in the total value of CZK 1,500,000 thousand, which was repaid on 7 November 2022. In February 2021, the Group issued TMR V bonds in the total value of up to EUR 150 million, at an interest rate of 6% p.a. and with a maturity date in 2026. On 28 October 2022, the Group issued TMR VI bonds up to a maximum of EUR 65,000 thousand with an interest rate of 4% p.a. and maturity in 2027. In total, bonds worth EUR 59,000 thousand were traded. On 28 October 2022, bonds worth EUR 1,552 thousand were traded. On 3 November 2022, bonds issued by TMR VI worth EUR 57,448 thousand were traded. Details on particular bonds are presented in the table below. in TEUR Face value of the issue in the Interest Effective Currency initial rate interest Carrying Carrying Date of Maturity of the currency p.a. in rate p.a. value as value as ISIN issue date issue in '000 % in % at 31.10.2023 at 31.10.2022 Name TMR III SK4120014598 10.10.2018 10.10.2024 EUR 90 000 4,4 4,940 89 718 89 229 4.40%/2024 TMR V SK4000018255 2.2.2021 2.2.2026 EUR 110 000 6,0 6,697 113 601 113 091 6.00%/2026 TMR F. CR CZ0003520116 7.11.2018 7.11.2022 CZK 1 500 000 4,5 5,090 - 62 582 4.5%/2022 TMR VI SK4000021713 28.10.2022 28.10.2027 EUR 59 000 5,4 5,924 57 945 1 284 5.40%/2027 Total 261 264 266 186 Short-term 94 621 67 690 Long-term 166 643 198 496 Total 261 264 266 186 165 Consolidated Financial Statements All four bonds represent a book-entry security in bearer form, and their issue was approved by the National Bank of Slovakia or the Czech National Bank in case of TMR F. CR. Covenants - issue of TMR III - The Parent Company has committed that, until all of its monetary obligations under the Bonds have been met, the Net Senior Debt to Modified EBITDA (Leverage) ratio will not exceed 8. If the indicator is not met, owners who own at least 10% of the nominal value of issued and outstanding bonds can request that a meeting be called to vote on the possibility of exercising the right to demand early maturity of bonds. The Parent Company has also committed to the LTV ratio, this indicator may not be higher than 70%. However, failure to meet the LTV ratio does not affect the maturity of the debt only the amount of security. The Group issued TMR Finance CR TMR F. CR bonds on 7 November 2018 with a total volume of CZK 1,500,000 thousand. The funds raised were subsequently provided in the form of a loan to other companies in the Group, these loans were repaid on 4 November 2022. And subsequently, on 7 November 2022, the bonds were repaid. Covenants – Issue of TMR V does not include conditions causing its immediate repayment. At the same time, the Parent Company is entitled under certain conditions to postpone payment of interest. Covenants – Issue of TMR VI - The Group has committed that, until all of its monetary obligations under the Bonds have been satisfied, the LTV ratio may not be higher than 70%. However, failure to meet the LTV indicator does not affect the maturity of the debt only the amount of security. The Group evaluated fulfillment of covenants as at 31 October 2023. The covenants which evaluation is due within the dates of issuing the consolidated financial statements were met. Fulfillment of other covenants will be evaluated later. All of the three issues (as at 31 October 2022: four issues) are associated with regular payment of the coupon , financed from the Group ’s own resources. Out of the total value of liability of EUR 261,264 thousand (as at 31 October 2022: EUR 266,186 thousand), a short-term portion amounts to EUR 94,621 thousand which represents a liability from coupon due in the period of 12 months after 31 October 2023 including the liability from issue of TMR III due on 10 October 2024 (as at 31 October 2022: EUR 67,690 thousand liability from the coupon due in the period of 12 months after 31 October 2022 including the liability from issue TMR F. CR). Security As at 31 October 2023, right of lien ("Pledge") for the issued TMR III bonds has been established on the property, movable assets and part of receivables owned by the Group, in the total amount of EUR 97,283 thousand. These are assets that are not used to secure other obligations of the Group. As at 31 October 2023, right of lien ("Pledge") for the issued TMR VI bonds has been established on the property, movable assets and part of receivables owned by the Group, in the total amount of EUR 77,098 thousand. These are assets that are not used to secure other obligations of the Group. 166 Consolidated Financial Statements 35. Fair Value Information The following overview contains information about the carrying amount and fair value of the Group’s financial assets and liabilities, that are not accounted for in fair value: in TEUR Carrying value Fair value 31.10.2023 31.10.2022 31.10.2023 31.10.2022 Financial assets Loans provided 20 2 671 2 109 2 256 1 725 Total 2 671 2 109 2 256 1 725 in TEUR Carrying value Fair value 31.10.2023 31.10.2022 31.10.2023 31.10.2022 Financial liabilities Bonds issued 34 261 264 266 186 259 746 264 362 Total 261 264 266 186 259 746 264 362 The table does not present financial instruments for which the carrying amount is considered to be an approximation of fair value. 36. Changes in Liabilities Arising from Financial Activities in TEUR Interest 1 Additions accrued Additions Impact of 31 November / Payment in the due to cash-flow Other October 2022 Drawings current business hedge 2023 period combinations Loans and borrowings 122 830 2 928 -16 768 9 210 - - -318 117 882 Lease liabilities 67 098 8 541 -7 839 3 418 - - 1 060 72 278 Bonds issued 266 186 56 457 -76 247 14 952 - -127 43 261 264 Total liabilities from financing activities 456 115 67 926 -100 854 27 580 - -127 785 451 425 In case of bonds issued, the category Other represents the impact of foreign currency loan hedge (see also Note 30 – Hedge accounting) and fee to the administrator for issuing bonds (see also Note 34 - Bonds issued). in TEUR Interest 1 Additions accrued Additions Impact of 31 October November / Payment in the due to cash-flow Other 2022 2021 Drawings current business hedge period combinations Loans and borrowings 107 626 34 112 -27 268 6 085 3 748 -1 473 122 830 Lease liabilities 66 154 4 376 -7 596 3 096 1 121 -53 67 098 Bonds issued 260 805 1 518 -13 257 14 526 - 2 833 -239 266 186 Total liabilities from financing activities 434 585 40 006 -48 121 23 707 4 869 2 833 -1 765 456 114 167 Consolidated Financial Statements In case of loans and borrowings, the category Other represents the impact of foreign currency loan hedge (see also Note 30 – Hedge accounting). In case of issued bonds, the category Other represents administrator’s fee for bond issuance administration. 37. Information about Risk Management This section provides details about the risks the Group is exposed to and about the method of management thereof. The Group is exposed to risk in the following areas: - Credit risk - Liquidity risk - Market risk - Operational risk The management is fully responsible for the establishment and supervision of the Group’s risk management. Credit risk The Group’s primary exposure to credit risk arises through its trade receivables, lease receivables, other receivables and advances and loans provided. The amount of credit risk exposure is represented by the carrying amounts of these assets in the balance sheet if no form of guarantee is issued. The carrying amount of receivables, advances and loans provided represents the maximum accounting loss that would have to be recognised if the counterparty completely failed to perform its contractual obligations and all collaterals and guarantees would be of no value. Therefore, this value highly exceeds the expected losses included in the provision for unrecoverable receivables. Before the conclusion of major contracts, the Group’s management evaluates the credit risk related to the counterparty at its regular meetings. Provided material risks are identified, the Group withdraws from concluding the contract. Loans provided The Group assigns a level of credit risk to the loans provided on the basis of data that is expected to predict credit risk (including but not limited to external ratings, financial statements, management accounts and cash flow projections and available counterparty press releases), potential days past due and applying experienced credit judgment. The grades of credit risk are defined by qualitative and quantitative factors that indicate the risk of default and are consistent with external credit rating definitions from credit rating agencies such as Moody's and Standard & Poors. The probability of default is then assigned based on historical data collected by these agencies. The loss given default (LGD) parameters generally reflect an expected rate of return of 40%, except when a borrowing is reduced by a loan. Probability of default (PD) Loss given default (LGD) Carrying value Expected credit loss (ECL) 1.99% - 7.38% 40% 2 322 - 66 As at 31 October 2023, loans totaling EUR 1,076 thousand (as at 31 October 2022: EUR 1,033 thousand) were classified as Stage 2, for which an impairment allowance of EUR 989 thousand (as at 31 October 2022: EUR 989 thousand) was created. 168 Consolidated Financial Statements Sensitivity analysis If the borrower's credit quality was changed, the probability of default (PD) would also change. If the PD increased by 10%, the ECL would increase by EUR 6,6 thousand. If the PD decreased by 10%, the ECL would decrease by EUR 6,6 thousand. The Group also takes into account the differences between the economic conditions during the period in which the historical data were collected, the current conditions and the Group's view on the economic conditions over the expected life of the loan. As at 31 October 2023, the Group was exposed to the following credit risk: Other Legal financial in TEUR entities Banks institutions Other Total Financial assets Loans Provided 2 671 - - - 2 671 Other receivables - - - - - Trade receivables 5 537 - - - 5 537 Cash and Cash Equivalents - 17 438 - 289 17 727 Other Assets 2 403 - 345 - 2 748 Total 10 611 17 438 345 289 28 683 As at 31 October 2022, the Group was exposed to the following credit risk: Other Legal financial in TEUR entities Banks institutions Other Total Financial assets Loans Provided 2 107 - - 2 2 109 Other receivables - - - - - Trade receivables 4 872 - - - 4 872 Cash and Cash Equivalents - 15 325 - 275 15 600 Other Assets 4 641 254 225 8 5 128 Total 11 620 15 579 225 285 27 709 Liquidity risk Liquidity risk arises in the general financing of the Group‘s activities and financial positions. It includes the risk of bei ng unable to finance assets at an agreed maturity and interest rate and inability to realize assets at a reasonable price in a reasonable time frame. Individual companies in the Group use different methods of managing liquidity risk. Group‘s Management focuses on managing and monitoring the liquidity of each company controlled by the Group. In order to manage liquidity, the management determined its accounting period for a fiscal year ended on 31 October. In the first half of its accounting period the Group has the winter season representing 60% of the Group‘s income. Based on the development in the first half of the year, the Group is able, in good time, to affect the income and expenditures to maintain sufficient liquidity. In the Group, seasonality is compensated also by a strong summer season, providing for a more stable liquidity through the entire year. The following table includes an analysis of financial assets and liabilities of the Group classified by the remaining maturity. This analysis represents the most prudent alternative of the remaining maturities including the interest, based on contracted terms. Therefore, the earliest repayment possible is reported for liabilities and the latest repayment possible is reported for assets. Assets and liabilities without a defined maturity are reported together in the "not specified" category. 169 Consolidated Financial Statements 169 As at 31 October 2023, the Group had financial assets and liabilities with the following remaining maturities: 3 months Above 5 Without Carrying value Future Up to 3 up to 1 1 year up years specification cash flow months year to 5 years in TEUR Financial assets Loans provided 2 671 3 726 1 077 1 404 353 892 - Other receivables - - - - - - - Trade receivables 5 537 5 661 5 661 - - - - Cash and cash equivalents 17 727 17 729 17 729 - - - - Other Assets 2 748 2 939 2 898 41 - - - Total 28 683 30 055 27 365 1 445 353 892 - Financial liabilities Loans and borrowings -117 882 -153 893 -3 595 -15 504 -110 773 -24 021 - Lease liabilities -72 278 -137 338 -2 502 -11 502 -44 313 -79 020 - Bonds issued -261 264 -295 504 - -103 746 -191 758 - - Trade payables and other -14 756 -14 756 -14 496 - -260 - - payables Contract liabilities - - - - - - Other liabilities -23 835 -23 835 -6 372 -2 500 -14 963 - - Total -490 015 -625 326 -26 965 -133 252 -362 067 -103 041 - As at 31 October 2023, loans granted for up to 1 year amount to EUR 2,481 thousand (as at 31 October 2022: EUR 2,268 thousand), a majority of which is payable on demand or by the end of October 2024. The Group does not assume that these loans will be paid off within a year and plans to draw these financial resources according to its needs in order to finance its investment activity and acquisitions. The loan granted is expected to be paid off within 3 years. In order to ensure sufficient liquidity, shortly after the end of the accounting period, the Group increased the overdraft facility from J&T Banka and also decided on bond issue to refinance the bond with maturity in 2024. As at 31 October 2022, the Group had financial assets and liabilities with the following remaining maturities: Future Up to 3 3 months 1 year up Above 5 Without Carrying value cash flow months up to 1 to 5 years years specification year in TEUR Financial assets Loans provided 2 109 3 162 1 095 1 173 - 894 - Other receivables - - - - - - - Trade receivables 4 872 5 291 5 291 - - - - Cash and cash equivalents 15 600 15 602 15 602 - - - - Other Assets 5 128 5 136 5 046 90 - - - Total 27 709 29 191 27 034 1 263 - 894 - Financial liabilities Loans and borrowings -122 830 -153 518 -6 527 -12 241 -98 572 -36 178 - Lease liabilities -67 098 -123 362 -2 213 -11 180 -37 773 -72 196 - Bonds issued -266 186 -298 872 -62 581 -10 644 -225 647 - - Trade payables and other -14 909 -14 909 -14 883 -26 - - - payables Contract liabilities - - - - - - Other liabilities -15 813 -15 813 -660 -2 592 -10 822 -1 739 - Total -486 836 -606 474 -86 864 -36 683 -372 814 -110 113 - 170 Consolidated Financial Statements The carrying amount of Other receivables includes the advances provided where they are not expected to be settled in cash, but by means of a transfer of shares. Foreign exchange risk Because of the acquisition of subsidiaries in Poland and Czech Republic, the Group is primarily exposed to foreign exchange risk of Polish zloty and Czech crown versus euro. The Management regularly monitors whether the difference between receivables and payables in the foreign currency is not too big. The Group used cash flow hedging to hedge only against currency risk. Since the Group issued Czech crown-denominated bonds in euro equivalent of EUR 58.7 million, the open currency risk position of the Czech crown has opened significantly. The Group decided to hedge its monetary position against fluctuations in the Czech crown for this particular debt instrument. On 7 November 2022, TMR Finance CR, a.s. repaid the fourth issue of TMR F. CR bonds in nominal value of CZK 1,500,000 thousand. At the same time, accounting for hedging cash flows against currency risk was completed. For more information, see Note 30 – Hedge Accounting. As at 31 October 2023 and 31 October 2022, the Group reported below mentioned items of financial assets and liabilities denominated in foreign currencies: 31.10.2023 31.10.2022 in TEUR Financial assets EUR PLN CZK EUR PLN CZK Cash and cash equivalents 4 908 891 1 188 185 154 Trade receivables 136 - - 163 - 1 Loans Provided 4 674 34 699 6 848 4 147 31 159 8 280 Total 9 719 35 590 6 848 5 498 31 344 8 435 31.10.2023 31.10.2022 in TEUR Financial liabilities EUR PLN CZK EUR PLN CZK Trade payables and other payables -455 -1 -45 -58 -8 -46 Loans and borrowings received -101 117 - - -102 437 - -61 014 Total -101 572 -1 -45 -102 495 -8 -61 060 Other assets and liabilities of the Group are denominated in euros. There is a secondary risk that the weakening of the Czech crown or Polish zloty against the euro would lead to a reduction in the number of visitors to Slovakia from these countries. The Group’s management is not able to quantify value of this risk for sure. Sensitivity analysis Appreciation of euro by 5% versus Polish zloty and Czech crown would have the following impact on financial assets and financial liabilities of the Group: Effect on the portfolio in TEUR 2023 2022 PLN -1 780 -1 568 CZK -340 2 631 Depreciation of euro by 5% versus Polish zloty and Czech crown would have an identically high but opposite impact on financial assets and financial liabilities in comparison with strengthening of the euro. 171 Consolidated Financial Statements Interest rate risk The Group’s operations are subject to the risk of interest rate fluctuations. The volume of this risk equals the sum of interest-earning assets and interest-bearing liabilities for which the interest rate differs at maturity or re-pricing compared to current interest rates. The period for which the interest rate of a financial instrument is fixed therefore indicates to what extent the Group is exposed to interest rate risk. The overview below provides infor mation about the extent of the Group’s interest rate exposure based on the contractual maturity date of its financial instruments. The balance of liabilities with fixed interest rate includes also non-interest-bearing liabilities. As at 31 October 2023 and 31 October 2022, the Group has the following interest-earning assets and interest-bearing liabilities: in TEUR 31.10.2023 31.10.2022 Fixed interest rate Assets 28 665 27 648 Liabilities -372 393 -364 281 Variable interest rate Assets 18 61 Liabilities -117 622 -122 555 Sensitivity analysis for instruments with variable interest rate A change of 100 basis points in interest rates would have the following effect on profit or loss and cash flow sensitivity: in TEUR Profit (Loss) 100 bb growth 100 bb decline 31 October 2023 Instruments with variable interest rate 1 176 -1 176 Effect 1 176 -1 176 in TEUR Profit (Loss) 100 bb growth 100 bb decline 31 October 2022 Instruments with variable interest rate 1 225 -1 225 Effect 1 225 -1 225 Interest-bearing liabilities of the Group bear variable interest rates based on EURIBOR. The Group considers a variable interest rate to be a self-management of the interest rate risk. EURIBOR grows under economic expansion, but also the economic performance of the population grows, and the Group has higher revenues and earnings. It is quite the opposite under economic recession. In the previous period, when EURIBOR had negative value, the variable interest component of the total interest rate did not affect the economic result and cash flow sensitivity, as according to the loan agreements the value of EURIBOR is then taken at the level of 0%. In the current period, EURIBOR has positive values and therefore a decrease of 100 basis points in interest rates would have an impact on the economic result and cash flow sensitivity. 172 Consolidated Financial Statements Operational risk Operational risk is the risk of loss arising from embezzlement, unauthorized activities, error, omission, inefficiency or system failure. This risk arises in the case of all of the Group’s activities and all companies within the Group are exposed to such risk. Operational risk includes also the risk of lawsuit. The Group’s objective is to manage the operational risk so as to prevent financial losses and damage to Group’s reputation within the effectiveness of costs spent to achieve this objective, while avoiding measures hindering initiative and creativity. The primary responsibility for the implementation of controls to address operational risk is assigned to the Group’s management. This responsibility is supported by preparation of standards for management of operational risk applicable for the whole Group. Operational risk is managed by a system of directives, minutes from meetings and control mechanisms. The Group has a controlling department established, which attempts to eliminate all operational risks through regular inspections. The Group is also exposed to risk of adverse weather-related conditions. The resort attendance is dependent on the volume and period of snow. Unfavorable conditions adversely affect the number of skiers and the Group’s revenues and profit or loss. Warm weather may disproportionately increase the cost of snowmaking and reduce the area for skiing. Historically, the region of the Low Tatras had an average of 54 cm of snow during the winter season and the High Tatras region had 59 cm of snow. The start of the winter season and the snow conditions affect the perception of the whole season by skiers. The Group is unable to reliably predict the snow conditions at the beginning of the winter season. Thanks to the system of snowmaking, the snow conditions during the winter are stable each year. 38. Related Parties Identification of related parties As shown in the following overview, the Group has a related-party relationship with its shareholders who have significant influence in the Group and other parties; as at 31 October 2023 and 31 October 2022 or during the period from 1 November 2022 to 31 October 2023 and 1 November 2021 to 31 October 2022: (1) Companies with joint control or significant influence over the entity and its subsidiaries or associates, (2) Joint ventures in which the Group is a partner, (3) Associates, (4) Members of the Group's top management or shareholders of the Group and companies in which top management has control or significant influence (see also Note 9 – Personnel expenses) Information about remuneration of key management is provided in Note 9 – Personnel expenses. All related party transactions, including transactions with Key management, were made on the basis of market conditions that are common in such transactions between unrelated parties or that are expected in such transactions. None of the related parties was privileged in any kind of transactions. As at 31 October 2023, the Group has receivables in the amount of EUR 0 thousand (2022: EUR 0 thousand) and liabilities in the amount of EUR 1,668 thousand (2022: EUR 941 thousand) to Members of the Key Management. In the period from 1 November 2022 to 31 October 2023, the Group reported revenues in the amount of EUR 0 thousand (2022: EUR 43 thousand) and expenses in the amount of EUR 2,505 thousand (2022: EUR 1,925 thousand) to Members of the Key Management. As at 31 October 2023, the Group has receivables in the amount of EUR 7 thousand (2022: EUR 25 thousand), liabilities in the amount of EUR 344 thousand (2022: EUR 62 thousand) to companies related through Members of the Key Management. 173 Consolidated Financial Statements In the period from 1 November 2022 to 31 October 2023, the Group reported revenues in the amount of EUR 145 thousand (2022: EUR 43 thousand) and expenses in the amount of EUR 5,900 thousand (2022: EUR 4,081 thousand). 39. Subsequent Events On 1 November 2023, the Group entered into cooperation agreement with the ski resort Beskid Sport Arena in the location of Szczyrk in Poland. On 2 February 2024, the Group paid out a coupon from the TMR V bond in the amount of EUR 6,600 thousand. On 15 December 2023, GOPASS Property a.s. was established with a registered capital of EUR 110 thousand and its registered office in the Czech Republic. 40. Capital Commitments and Capital Management In the course of 2014, the Group made two bond issues in the total nominal value of EUR 180,000 thousand, which have been admitted to trading on the Bratislava Stock Exchange since 19 February 2014. On 10 October 2018, the Group issued the third issue of TMR III bonds at a total nominal value of EUR 90,000 thousand; will be due in 2024. On 7 November 2018, the Group issued the fourth bond issue TMR F. CR in the nominal value of CZK 1,500,000 thousand, with maturity in 2022. During February 2021, the Company issued TMR V bonds with a total nominal value of EUR 110,000 thousand. Interest income from this bond will be paid for each annual period in arrears, always on the 2 February, with the first occurrence on 2 February 2022. The maturity of TMR V bond is on 2 February 2026. On 28 October 2022, the Group issued TMR VI bonds with a total value of up to a maximum of EUR 65,000 thousand with an interest rate of 5.4% p.a. and a maturity in 2027. On 28 October 2022, bonds worth EUR 1,552 thousand were traded and on 3 November 2022, bonds worth EUR 57,448 thousand were traded. Interest income from this bond are paid for each income period on a semi-annual basis in arrears, always on 28 April and 28 October of each year. The maturity of TMR VI bond is on 28 October 2027. Further information on issued bonds and related covenants is provided in Note 34 – Bonds Issued. The Group's management deals with capital management in order to secure a sufficient amount of funds for the planned investments in the period for which the investments were planned, if necessary, in cooperation with bank loans. The Group and its management monitor developments in the Group ’s capital structure, any changes and their potential impact. The Group's capital includes significant items such as bonds issued, borrowings and the related costs or expenses associated with servicing and repayment. The Group meets all its obligations properly, on time and according to the agreed terms. It also meets all agreed terms, ratios and reporting and valuation requirements for any maintenance of this capital. The capital is part of the Group's long-term and strategic plans. The Group uses capital primarily to fund development projects that have been undertaken in previous periods. The purpose of these capital projects is to increase the value of the Group and provide a competitive advantage to its resorts, as well as to generate cash surpluses to cover the repayment of liabilities and also to provide a source of further funding for the Group. Over the course of the period between 1 November 2022 and 31 October 2023 , no changes occurred in the Group’s management approach to capital management. 174 Consolidated Financial Statements 41. Contingent Assets and Contingent Liabilities With respect to that many areas of Slovak law on taxation have not been sufficiently ascertained in practice, there is uncertainty in how tax offices will apply them. It is not possible to quantify the level of this uncertainty and it will only cease to exist when legal precedents or official interpretations of the relevant bodies are available. The Group is currently in the process of evaluation of the possibilities of tax losses utilization by the Parent Company in Slovakia, that arose in a foreign subsidiary of the Group. The Group addressed a request for guidance to the Financial Administration of the Slovak Republic. Due to the uncertainty and lack of clarity of the financial impact, this fact has not been captured in the Group's financial statements. The Group is a party to several legal disputes. The maximum amount of compensation in all legal disputes can amount up to EUR 377 thousand plus related charges and fees. 175 Consolidated Financial Statements 42. Companies within the Group The list of companies in the Group as at 31 October 2023 and 31 October 2022 is included in the following overview: 31.10.2023 31.10.2022 Consol. Consol. Country Method % Control % Control Parent company Tatry mountain resorts, a.s. Slovakia full 100 100 Subsidiaries Szczyrkowski Ośrodek Narciarski, S.A. Poland full 97 direct 97 direct Ślaskie Wesole Miasteczko Sp. z o. o. Poland full 100 indirect 100 indirect TMR Parks, a.s. Slovakia full 100 direct 100 direct TMR Ještěd , a.s. Czech Republic full 100 direct 100 direct Tatry mountain resorts Č R, a.s. Czech Republic full 100 direct 100 direct TMR Finance Č R, a.s. Czech Republic full 100 direct 100 direct Tatry Mountain Resorts AT GmbH Austria full 100 direct 100 direct Mölltaler Gletscherbahnen GmbH & Co KG Austria full 100 direct 100 direct Mölltaler Gletscherbahnen GmbH Austria full 100 direct 100 direct Grundstücksverwertungs-GmbH Flattach Austria full 100 indirect 100 indirect Korona Ziemi sp.z o.o. Poland full 74 direct 74 direct Muttereralm Bergbahnen Errichtungs GmbH Austria full 100 direct 100 direct GOPASS, a.s. Slovakia full - direct 100 direct WORLD EXCO s.r.o. Slovakia full - indirect 100 indirect EUROCOM Investment, s.r.o. Slovakia full 100 indirect 100 indirect International TMR services, s.r.o. Czech Republic full 100 direct 100 direct GOPASS SE Czech Republic full 100 direct 100 direct TMR Real Estate, s.r.o. Slovakia full 100 direct - - Štrbské Pleso resort, s. r. o. Slovakia full 100 direct - - Joint ventures OSTRAVICE HOTEL a.s. Czech Republic equity 50 indirect 50 indirect method Associate MELIDA a.s. (Note 5(b)) Czech Republic equity 25 direct 25 direct method 176 Consolidated Financial Statements In March 2014, the Group acquired a 97% stake in the Polish mountain resort of Szczyrkowski Ośrodek Narciarski S.A. (SON). In April 2015, the Group agreed to acquire a 75% stake in a Polish company that owns and operates the Silesian Amusement Park (Śląskie Wesołe Miasteczko Sp. Z o.o.). In 2017, the subsidiary TMR Parks, a.s. was established, which bought the entire 75% stake in SWM from the Parent Company and subsequently bought the remaining 25% stake from the original owner and thus became the sole owner. In December 2017, the Group, through its subsidiary TMR Ještěd a.s. officially took over the operation of the Ještěd sports complex in the city of Liberec. In November 2018, the Group entered the golf segment and leases and operates Golf & Ski Resort Ostravice in the Czech Republic. The subject of activity of OSTRAVICE HOTEL a.s. is the rental of real estate, apartments and non-residential premises. In January 2019, the Group leased Golf Resort Kaskáda near Brno, Czech Republic, for a period of 20 years, managing the operation of a hotel with a congress center and restaurant. The company Tatry mountain resorts Č R, a.s. was founded in 2018 and is used for future acquisitions in the Czech Republic. In 2018, the company TMR Finance Č R, a.s. whose main activity is the provision of funds obtained by issuing bonds to related companies in the Group in the form of loans, borrowings or other forms of financing, was founded. In 2019, through the subsidiary Tatry Mountain Resorts AT GmbH, the Group acquired shares in the subsidiaries Mölltaler Gletscherbahnen GmbH & Co KG, Mölltaler Gletscherbahnen GmbH and Grundstücksverwertungs-GmbH Flattach. These subsidiaries operate the Mölltaler Gletscher and Ankogel ski resorts in Austria. In May 2020, the Group acquired a 100% stake in 1. Tatranská, a joint- stock company that operates the Štrbské Pleso ski resort in the High Tatras in Slovakia, operates a hospitality business and operates a ski school. As at 1 November 2020, it was merged with the Parent Company. On 1 May 2021, the Parent Company acquired 100% share in the company Muttereralm Bergbahnen Errichtungs GmbH. The company operates a ski resort in Austria. On 4 June 2021, GOPASS, a.s. was founded. The Parent company became its sole shareholder. On 29 October 2021, the Parent Company sold the assets of Aquapark Tatralandia and Holiday Village Tatralandia to a subsidiary of TMR Parks, a.s. (original name: Tatry mountain resorts PL), but the Parent Company continues to operate them. On 31 March 2022, the Group acquired a 100% stake and control in the company WORLD EXCO, s.r.o. The acquired company operates a congress center in Bešeňová. On 31 March 2022, the Group also acquired a 100% stake and control in EUROCOM Investment, s.r.o. The acquired company operates the Bešeňová water park, Hotel Galeria Thermal and Hotel Bešeňová. On 22 June 2022, the company International TMR services s.r.o. was founded in the Czech Republic for the purpose of providing services within the TMR Group, 100% owned by the Parent Company. On 1 July 2022, the Group acquired a 100% stake in the European company GOPASS SE, based in the Czech Republic, which will serve the purpose of expanding in the European market. On 1 November 2022, EUROCOM Investment, s.r.o. and WORLD EXCO, s.r.o. merged, where EUROCOM Investment s.r.o. became the legal successor. On 8 November 2022, GOPASS SE, a branch in Slovakia, was founded. It is an enterprise of a foreign entity of a European company - a subsidiary of GOPASS SE. As at 1 April 2023, the cross-border merger of GOPASS a.s. as a dissolving company with the successor company GOPASS SE took effect. The decisive date for the merger is 1 November 2022. GOPASS a.s. ceased to exist as a result of a cross-border merger without liquidation on 1 April 2023. 177 Consolidated Financial Statements On 28 June 2023, TMR Real Estate, s.r.o. was established for the purpose of real estate activities with the amount of registered capital of EUR 5 thousand, of which the Company became the sole shareholder. On 26 September 2023, the company Štrbské Pleso resort, s. r. o. was founded, with the amount of registered capital EUR 5 thousand, of which the Company became 100% owner. The company was founded for the purpose of further development of the Štrbské Pleso resort in relation to local communities. ............................................................................................................................................................................................. Igor Rattaj Zuzana Ištvánfiová Marián Klas Lucia Kušnierová The Chairman of the The Vice Chairman Finance Person responsible for Board of Directors of the Board of Directors Director preparation of the financial statements 178 Independent Auditor‘s Report Consolidated Financial Statements 179 Independent Auditor‘s Report Consolidated Financial Statements 180 Independent Auditor‘s Report Consolidated Financial Statements 181 Consolidated Financial Statements Independent Auditor‘s Report 182 Consolidated Financial Statements Independent Auditor‘s Report 183 Consolidated Financial Statements Independent Auditor‘s Report 184 Consolidated Financial Statements Independent Auditor‘s Report 185 Consolidated Financial Statements Independent Auditor‘s Report SEPARATE FINANCIAL STATEMENTS 188 Separate Financial Statements Tatry mountain resorts, a.s. Separate Financial Statement for the Period from 1 November 2022 to 31 October 2023 prepared in accordance with the International Financial Reporting Standards (“IFRS”) Standards (“IFRS”) as adopted by the EU 189 Separate statement of profit and loss and other comprehensive income in TEUR Note 1.11.2022 - 31.10.2023 1.11.2021 - 31.10.2022 Sales 6 135 617 90 483 Total revenue 135 617 90 483 Material and goods consumption 7 -19 875 -15 132 Purchased services 8 -32 964 -25 439 Personnel expenses 9 -37 056 -29 816 Other operating expenses 10 -943 -879 Other operating income 11 2 371 6 703 Gain / (loss) on revaluation of investment property 17 - -906 Impairment losses to financial assets 22,23,26,28 -7 393 10 470 Profit before interest, taxes, depreciation and amortization (EBITDA) 39 757 35 484 Depreciation and amortization 14,16 -14 116 -12 971 Depreciation of right-of-use assets 15 -4 803 -4 344 Profit / (loss) before interest, taxes (EBIT) 20 838 18 169 Interest income calculated using effective interest rate 12 7 523 7 965 Financing cost 12 -25 871 -20 051 Net profit / (loss) on financial operations 12 1 572 -715 Net profit / (loss) on disposal of subsidiaries 5 - -721 Profit / (loss) before tax 4 062 4 647 Current income tax 13 -1 216 -1 Deferred income tax 13 -134 -1 359 Profit / (loss) 2 712 3 287 Other comprehensive income Other comprehensive income that may be reclassified to profit or (loss) in subsequent periods (net of tax): Net gain/(loss) on cash flow hedges 33 2 602 -1 103 Total comprehensive income 5 314 2 184 Profit / (loss) per share (in EUR) 29 0,404 0,490 Number of shares 6 707 198 6 707 198 EBITDA represents a profit from recurring Company activities before taxes, interest, amortization and depreciation, adjusted to other income and expenses, which are listed under EBITDA, in particular profit / (loss) from financial operations representing foreign exchange gains / (losses). The EBITDA indicator adjusted in this way is used by the Company's management to manage the Company's performance as well as individual CGUs (cash-generating units). Separate Financial Statements 190 Separate Financial Statements Separate Statement of Financial Position in TEUR Note 31.10.2023 31.10.2022 Assets Goodwill and intangible assets 16 31 927 32 328 Property, plant and equipment 14 246 168 242 311 Right-of-use assets 15 59 092 59 256 Investment property 17 6 663 7 411 Investments in an associate and a joint venture 18 7 118 7 118 Loans provided 22 11 484 23 351 Other receivables 24 161 128 Investments in subsidiaries 19 45 573 15 074 Total non-current assets 408 186 386 977 Inventory 21 7 208 2 629 Trade receivables 23 3 961 2 424 Loans provided 22 145 996 159 877 Other receivables 24 1 349 3 923 Financial investments 27 36 36 Cash and cash equivalents 28 4 341 5 332 Other assets 26 4 745 4 317 Total current assets 167 636 178 538 Assets total 575 822 565 515 Equity 29 Share capital 46 950 46 950 Share premium 30 430 30 430 Retained earnings 11 310 8 943 Other reserves 7 527 4 596 Total equity 96 217 90 919 Liabilities Loans and borrowings 30 79 558 87 272 Lease liabilities 31 55 455 51 901 Trade payables and other payables 32 864 1 169 Provisions 36 85 137 Other non-current liabilities 35 954 884 Bonds issued 37 166 643 198 496 Deferred tax liability 20 17 028 16 203 Total non-current liabilities 320 587 356 062 Loans and borrowings 30 27 018 78 317 Lease liabilities 31 7 566 7 760 Trade payables and other payables 32 17 890 14 755 Contract liabilities 34 8 983 10 061 Bonds issued 37 94 621 5 108 Corporate income tax liability 13 1 210 - Other current liabilities 35 1 730 2 533 Total current liabilities 159 018 118 534 Total liabilities 479 605 474 596 Total equity and liabilities 575 822 565 515 The Notes provided on pages 194 to 260 constitute an integral part of the Separate Financial Statements. 191 Separate Financial Statements Separate Statement of Changes in Equity in TEUR Share capital Share premium Legal reserve fund Fair value revaluation reserve Hedging revaluation reserve Retained earnings Total Balance as at 1 November 2022 46 950 30 430 7 018 180 -2 602 8 943 90 919 Transfer of retained earnings into the legal reserve fund 329 -329 Contributions to the social fund - - - - - -16 -16 Profit / (loss) for the period - - - - - 2 712 2 712 Other components of comprehensive income, after tax - items with possible subsequent reclassification to profit/(loss): Cash Flow hedge - - - - 2 602 - 2 602 Total comprehensive income for the period - - 329 - 2 602 2 367 5 298 Balance as at 31 October 2023 46 950 30 430 7 347 180 - 11 310 96 217 192 Separate Financial Statements Separate Statement of Changes in Equity (continued ) in TEUR Share capital Share premium Legal reserve fund Fair value revaluation reserve Hedging revaluation reserve Retained earnings Total Balance as at 1 November 2021 46 950 30 430 7 018 180 -1 499 5 656 88 735 Profit / (loss) for the period - - - - - 3 287 3 287 Other components of comprehensive income, after tax - items with possible subsequent reclassification to profit/(loss): Cash Flow hedge - - - - -1 103 - -1 103 Total comprehensive income for the period - - - - -1 103 3 287 2 184 Balance as at 31 October 2022 46 950 30 430 7 018 180 -2 602 8 943 90 919 193 Separate Financial Statements Separate Cash Flow Statement in TEUR Note 1.11.2022 - 31.10.2023 1.11.2021 - 31.10.2022 OPERATING ACTIVITIES Profit 2 712 3 287 Adjustments related to: Gain on disposal of property, plant and equipment and intangible assets -1 945 -5 319 Depreciation and amortization 14,16 14 116 12 971 Depreciation of right-of-use assets 15 4 803 4 344 (Release) / creation of impairment to receivables 23,24,26 7 392 -10 467 (Profit) / loss from financial operations 12 -1 572 715 Loss from disposal of subsidiaries 5 - 721 Loss on revaluation of investment property 17 - 906 Net interest expense / (income) 12 18 348 12 086 Change in provisions -53 327 Income tax 13 1 350 1 360 Change in trade receivables, other receivables and other assets 3 819 -2 023 Change in inventories -4 579 33 Change in trade liabilities and other liabilities 2 909 6 115 Cash flow from operating activity before income tax 47 300 25 056 Income tax paid -6 167 Cash flow from operating activity 47 294 25 223 INVESTING ACTIVITIES Acquisition of land, buildings and equipment and intangible assets 14,16 -17 514 -19 800 Proceeds from disposal of property, plant and equipment and intangible assets 3 662 7 850 Cost of acquisition of subsidiaries (capital contributions) 5 -3 240 -17 Income from the sale of shares in subsidiaries 5 - 2 350 Loans provided -6 031 -33 070 Repayment of loans provided 3 184 5 166 Interest received 10 22 Cash flow from investing activity -19 929 -37 499 FINANCING ACTIVITIES Repayment of lease liabilities -5 962 -7 012 Repayment of received loans and borrowings -64 493 -7 352 Loans and borrowings received 7 928 37 023 Bonds issued 37 56 457 1 518 Interest paid -22 286 -16 766 Cash flow from financing activity -28 356 7 411 Net increase/ (decrease) of cash and cash equivalents -991 -4 865 Influence of impairment allowance to cash and cash equivalents 28 - 3 Cash and cash equivalents at the beginning of the year 28 5 332 10 194 Cash and cash equivalents at the end of the year 28 4 341 5 332 The Notes provided on pages 194 to 260 constitute an integral part of the Separate Financial Statements. 194 Separate Financial Statements Content Information about the Company ............................................................................................................................... 195 Significant Accounting Policies ............................................................................................................................... 197 Significant Accounting Estimates and Assumptions ................................................................................................ 210 Information about Operating Segments .................................................................................................................... 215 Increase, Decrease and Sale of Shares in Companies ............................................................................................... 217 Sales ......................................................................................................................................................................... 218 Consumption of Material and Goods ....................................................................................................................... 218 Purchased Services ................................................................................................................................................... 219 Personnel Expenses .................................................................................................................................................. 219 Other Operating Expense ......................................................................................................................................... 221 Other Operating Income ........................................................................................................................................... 221 Finance Income and Expense ................................................................................................................................... 221 Current and Deferred Income Tax ............................................................................................................................ 222 Property, Plant and Equipment ................................................................................................................................. 225 Right-of-use Assets .................................................................................................................................................. 227 Goodwill and Intangible Assets ................................................................................................................................ 228 Investment Property ................................................................................................................................................. 229 Investment in an Associate and a Joint Venture ....................................................................................................... 230 Investments in Subsidiaries ...................................................................................................................................... 230 Deferred Tax Asset, Deferred Tax Liability ............................................................................................................. 233 Inventory .................................................................................................................................................................. 234 Loans Provided ......................................................................................................................................................... 234 Trade Receivables .................................................................................................................................................... 236 Other Receivables .................................................................................................................................................... 237 Assets held for sale and liabilities directly associated .............................................................................................. 237 Other Assets ............................................................................................................................................................. 237 Financial Investments ............................................................................................................................................... 238 Cash and Cash Equivalents ...................................................................................................................................... 238 Equity ....................................................................................................................................................................... 238 Loans and Borrowings .............................................................................................................................................. 240 Lease Liabilities ....................................................................................................................................................... 242 Trade Payables and other payables ........................................................................................................................... 243 Hedge Accounting .................................................................................................................................................... 243 Contract liabilities .................................................................................................................................................... 245 Other Liabilities ........................................................................................................................................................ 246 Provisions ................................................................................................................................................................. 247 Bonds Issued ............................................................................................................................................................ 247 Information about the Fair Value ............................................................................................................................. 249 Changes in Liabilities Arising from Financial Activities ......................................................................................... 249 Information on Risk Management ............................................................................................................................ 250 Related Parties .......................................................................................................................................................... 256 Subsequent Events .................................................................................................................................................... 259 Capital Commitments and Capital Management ...................................................................................................... 259 Contingent Assets and Contingent Liabilities .......................................................................................................... 260 195 Separate Financial Statements Information about the Company Tatry mountain resorts a.s. (hereinafter referred to as the “Company”) is a joint stock company with the registered office an d place of business in Demänovská Dolina 72, Liptovský Mikuláš 031 01. The Company was established on 20 March 1992 and was registered in the Commercial Register on 1 April 1992. The Company identification number is 31 560 636 and the Company tax identification number is 2020428036. The Company is not a fully liable partner in other accounting entities. Starting from 19 November 1993, the Company shares are registered on the Bratislava Stock Exchange; starting from 15 October 2012, on the Warsaw Stock Exchange (WSE), and starting from 22 October 2012, on the Prague Stock Exchange (BCCP). The Company has the accounting period and fiscal year from 1 November to 31 October, as the Company activity is influenced by seasonal fluctuations. The Shareholders’ structure of the Company is described in Note 29 - Equity The principal activities of the Company comprise the operation of cable ways and ski lifts, restaurant and catering services, the operation of a ski and snowboard school, the purchase and sale of goods, hotel business. Since 29 March 2011 the Company has been operating the Tatralandia Aquapark and thus expanded its portfolio of services. During 2014 and 2015 the Company acquired interests in subsidiaries in Poland that operate the Szczyrk ski resort and an amusement park in Chorzow. During the years 2017 and 2018 the Company expanded its portfolio by subsidiary companies in the Czech Republic and Austria. The company in the Czech Republic operates ski center Ještěd near Liberec since December 2017. In 2019 the Company acquired interests in Austrian companies operating the ski resorts Mölltaler Gletscher and Ankogel in Austria. In October 2019 the Company became a direct shareholder (9.5% share) in MELIDA a.s., then in December 2019 acquired additional 15.5 % share (in total the Company has 25% share). MELIDA a.s. operates the ski resort Špindlerův Mlýn in the Czech Republic. During the accounting period ended 31 October 2020, the Company acquired shares in the Slovak company 1. Tatranská, akciová spoločnosť, which operates the ski resort Štrbské pleso in High Tatr as, provides hospitality services and operates a ski school. On 1 November 2020, the Company merged with 1. Tatranská, akciová spoločnosť (“1. Tatranská”). As at 1 May 2021, the Company expanded its portfolio by adding the subsidiary Muttereralm Bergbahnen Errichtungs GmbH (90% share). On 4 June 2021, GOPASS, a.s. was established, in which the Company became the sole shareholder. GOPASS, a.s. will be used for expansion into Alpine ski resorts which are planned to be incorporated into its platform. On 29 October 2021, the Company sold Aquapark Tatralandia and Holiday Village Tatralandia assets to its subsidiary TMR Parks, a.s. (former name: Tatry mountain resorts PL), but the Company continues to operate them. On 22 June 2022, International TMR services s.r.o. was established for the purpose of providing services within the TMR Group, of which the Company became 100% owner. On 1 July 2022, the Company acquired 100% of the shares in the European company GOPASS SE, which will be used for the purpose of expansion in the European market. On 8 November 2022, GOPASS SE, a branch in Slovakia, was founded. It is an enterprise of a foreign entity of a European company - a subsidiary of GOPASS SE. As of 1 April 2023, the cross-border merger of GOPASS a.s. as a dissolving company with the successor company GOPASS SE took effect. The decisive date for the merger is 1 November 2022. GOPASS a.s. ceased to exist as a result of a cross-border merger without liquidation as at 1 April 2023. On 28 June 2023, TMR Real Estate, s.r.o. was established for the purpose of real estate activities, and the Company became its sole shareholder. On 26 September 2023, the company Štrbské Pleso resort, s. r. o. was established, and the Company became its 100% owner. 196 Separate Financial Statements Company bodies are: The Board of Directors Ing. Igor Rattaj, the Chairman Ing. Zuzana Ištvánfiová , the Vice Chairman (since 1.6.2023) Ing. Jozef Hodek, the Member (to 30.6.2023) Čeněk Jílek, the Member The Supervisory Board: Ing. Jozef Hodek, (since 1.7.2023) Ing. Bohuš Hlavatý ( to 30.6.2023) Ing. František Hodorovský Roman Kudláček Ing. Andrej Devečka Ing. Pavol Mikušiak Adam Tomis Mgr. Marek Schwarz Ivan Oško Miroslav Roth 197 Separate Financial Statements Significant Accounting Policies (a) Statement of compliance The separate financial statements for the period from 1 November 2022 to 31 October 2023 have been prepared in accordance with the International Financial Reporting Standards (“IFRS”) as adopted by the EU and in accordance with Art 17a), par. 3 of Act No. 431/2002 Coll. of the National Council of the Slovak Republic on Accounting (“Act on Accounting”). Since the Company has share in subsidiaries, IFRS and the Act on Accounting require the preparation of consolidated financial statement. The Company has not consolidated its subsidiaries in this separate financial statement. The investments in subsidiaries are recognized at cost (net of impairment losses, if any) and dividend returns are recognized at the moment when the Company became entitled to receiving dividends from those companies. The Company applies similar treatment to associates. The Company prepares consolidated financial statements that shall be published by the end of February 2024 and that shall be available at the Company headquarters. The financial statements were approved by the Board of Directors on 29 February 2024. (b) Basis of preparation The separate financial statements have been prepared based on the historical cost principle, while the investment property and financial instruments measured at fair value were revalued to their fair value through profit or loss. The Company's separate financial statements have been prepared on a going-concern basis. The Company's management expects that the Company has sufficient resources to continue as a going concern for at least another 12 months and that the preparation of the financial statements, assuming the continuity of its operations, is appropriate. The Company consistently plans the future development of the financial position, cash flows and operational results. It monitors the development of its financial results against financial plans and previous periods. It evaluates external factors, such as interest rates, unemployment, inflation, and others, in all its relevant markets. It uses the information and assumptions of developments in the preparation of long-term plans and cash flow projections, considering the needs for financing its operations. It is essential for the Company to meet its required capital commitments and ensure sufficient cash liquidity. The Company regularly monitors these parameters with an emphasis on maintaining sustainability of its business and functioning on a going concern basis. It adapts its strategy and management to the needs of meeting its commitments and investment needs of its resorts. The Company does not have and does not foresee any cash flow management issues for the next period. The Company considers the impact of macroeconomic developments in its plans and management and considers the current situation to be manageable. The Company, in its plans and management, takes into account the impacts of macroeconomic development and considers the current situation to be manageable. Thanks to investments into snowmaking, it was possible to open the ski season earlier than usual in several resorts in December 2023. At the same time, favorable weather conditions allowed for a wider-scale opening of the resorts, which resulted in an increased number of visitors at the resorts and hotels. Consequently, planned revenues and financial results have been exceeded above the expectations. The separate financial statements have been prepared in EUR thousands. The preparation of financial statements in compliance with the International Financial Reporting Standards as adopted by the EU requires the application of various judgements, assumptions and estimates which affect the reported amounts of assets, liabilities, income and expenses. However, actual results will likely differ from these estimates. Significant accounting estimates and judgements which were made by management, and which bear a significant risk of material adjustment in the next accounting period are discussed in Note 3 – Significant Accounting Estimates and Assumptions. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of revision and also in future periods if the revision affects both current and future periods. 198 Separate Financial Statements (c) Adoption of new standards and interpretations In the course of the accounting period starting on 1 November 2022, the Company implemented following new IFRS standards, amendments to standards and IFRIC interpretations. The application of these standards had no impact on the financial statements of the Company. • Amendments to IFRS 3 “Business Combinations” – adopted by the EU on 28 June 2021 (effective for annual periods beginning on or after 1 January 2022), • Amendments IAS 16 “Property, Plant and Equipment” – adopted by the EU on 28 June 2021 (effective for annual periods beginning on or after 1 January 2022), • Amendments IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” – adopted by the EU on 28 June 2021 (effective for annual periods beginning on or after 1 January 2022), • Annual amendments to various standards due to “IFRS quality improvement project (cycle 2018 – 2020)” – resulting from the annual IFRS quality improvement project, the main aim of which is to eliminate inconsistencies and clarify the wording – adopted by the EU on 28 June 2021 (effective for annual periods beginning on or after 1 January 2022). (d) International financial reporting standards that were issued but not yet effective The Company did not apply any International Financial Reporting Standards as adopted by the European Union before the date they become effective. In case that the transition arrangements allow entities to choose between prospective or retrospective approach, the Company decided to apply these standards prospectively. As at 31 October 2023, the following International Financial Reporting Standards, amendments to standards and interpretations were issued but not yet effective, and have not been applied by the Company in preparing these financial statements: • Amendments to IFRS 17 Insurance contracts - Initial application of IFRS 17 and IFRS 9 - Comparative information – adopted by the EU on 8 September 2022 (effective for annual periods beginning on or after 1 January 2023), • Amendments to IAS 12 Income taxes – Deferred tax relating to assets and liabilities arising from a single transaction - adopted by the EU on 11 August 2022 (effective for annual periods beginning on or after 1 January 2023), • Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies – adopted by the EU on 2 March 2022 (effective for annual periods beginning on or after 1 January 2023), • Amendments to IAS 8 Accounting principles, Changes in accounting estimates and errors - Definition of accounting estimates – adopted by the EU on 2 March 2022 (effective for annual periods beginning on or after 1 January 2023), • Amendments to IFRS 17 Insurance contracts; including Amendments to IFRS 17 – adopted by the EU on 19 November 2021 (effective for annual periods beginning on or after 1 January 2023). The Company anticipates that the issuance of new, but not yet effective International Standards, will not affect the financial statements. (e) Leases The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Company as a lessee The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognizes lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. 199 Separate Financial Statements i. Right-of-use assets The Company recognizes right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows: • Buildings and land 30 years • Individual movables and sets of movables ▪ Works of art 20 years ▪ Billboards and advertising space 10 years ▪ Snow groomers 8 years ▪ Other 5 years If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment. Refer to the accounting policies for impairment of non-financial assets in Note 2(l) Impairment of non-financial assets. ii. Lease liabilities At the commencement date of the lease, the Company recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognized as expenses in the period in which the event or condition that triggers the payment occurs. The Company does not apply the practical expedient in IFRS 16.15. Every contract is examined to determine whether it contains a non-lease components in addition to lease components. Non-lease components are separated from the lease components, and only the lease components are accounted for in accordance with the provisions of IFRS 16. In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. When revaluing lease liability due to a lease modification, residual value of the right-of-use asset is adjusted for the revaluation difference. Right-of-use asset is further depreciated from this adjusted value. The Company’s lease liabilities are included in Lease liabilities (see Note 3 1). iii. Short-term leases and leases of low-value assets The Company applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). The Company also applies the lease of low-value assets recognition exemption to leases of items of low value - below 200 Separate Financial Statements EUR 1,000. Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight- line basis over the lease term. Company as a lessor Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Arising rental income is accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit or loss due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned. In the case of leases, in which the Company transfers substantially all the risks and rewards of ownership of the asset, are classified as finance leases. The leased asset is derecognized and the Company recognizes a financial asset measured at amortized cost, representing the present value of the lease payments, adjusted as in lease liabilities. In case that the Company leases right-of-use assets, which it further sublets as a lessor to other lessees, the Company evaluates the lease provided to the lessee on whether it is an operating or financial sublease. The only different criterion compared to leasing own assets is the assessment of the sublease against the right-of-use and not the original underlying asset. After assessing whether it is a financial or operating lease, it is subsequently reported in terms of accounting policies for the Company as a lessor. (f) Financial instruments i. Initial recognition and measurement of financial asset Financial assets upon initial recognition are classified in one of three categories as financial assets subsequently measured at amortized cost, fair value through other comprehensive income (OCI) and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Company’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient (ie. the Company measures life-time credit losses). The Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient are measured at the transaction price determined under IFRS 15. In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. The Company’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. ii. Subsequent measurement For purposes of subsequent measurement, financial assets are classified in four categories: 201 Separate Financial Statements • financial assets at amortised cost (debt instruments), • financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments), • financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments), • financial assets at fair value through profit or loss. iii. Financial assets at amortised cost (debt instruments) The Company measures financial assets at amortised cost if both of the following conditions are met: • the financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows, and • the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets at amortised cost are subsequently measured using the effective interest rate method (EIR) and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired. The Company’s financial assets at amortised cost includes Trade receivables, Other receivables and Loans provided. iv. Financial assets at fair value through OCI without recycling of cumulative gains and losses upon derecognition (equity instruments) The Company elected to measure equity instruments at fair value through OCI if both of the following conditions are met: • the equity instrument is an instrument neither in Associate, nor in Subsidiary, • the equity instrument is not held for trading. v. Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized when: • the rights to receive cash flows from the asset have expired, or • the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass - through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. vi. Impairment of financial assets The Company recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). 202 Separate Financial Statements For trade receivables, the Company applies a simplified approach in calculating ECLs. Therefore, the Company does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Company has established a method, that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. For financial assets, where simplified approach is not used – Loans provided, significant increase in credit risk since initial recognition is assessed on an individual basis. The Company considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Company may also consider a financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Company. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows. Derivative financial instruments and hedge accounting Initial recognition and subsequent measurement The Company uses derivative financial instruments, such as foreign currency swaps to hedge its foreign currency risks. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. For the purpose of hedge accounting, hedges are classified as: • cash flow hedges when hedging the exposure to variability in cash flows that is either attributable to a particular risk associated with a recognized asset or liability. The Company does not use any other form of hedges. At the beginning of the hedging relationship will be formally defined and documented hedging relationship and objective and strategy of an entity's risk management to ensure implementation. The documentation includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the Company will assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the hedge ratio is determined). A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements: • There is ‘an economic relationship’ between the hedged item and the hedging instrument. • The effect of credit risk does not ‘dominate the value changes’ that result from that economic relationship. • The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Company actually hedges and the quantity of the hedging instrument that the Company actually uses to hedge that quantity of hedged item. Hedges that meet all the qualifying criteria above for hedge accounting are accounted for, as described below: Cash flow hedges That part of the gain or loss on the hedging instrument that is determined as effective hedging (i.e. that part that is offset by a change in the cash flow hedge provision) is recognized in other comprehensive income (OCI) until any remaining gain or loss on the hedging instrument (or any gain or loss required to offset a change in a cash flow hedge provision) represents a hedge ineffectiveness recognized in profit or loss. 203 Separate Financial Statements The separate component of equity related to the hedged item (cash flow hedge reserve) is adjusted to the lower of the following values (in absolute terms): (i) the cumulative gain or loss on the hedging instrument since the inception of the hedge and (ii) the cumulative change in the fair value (present value) of the hedged item (i.e. the present value of the cumulative change in the hedged expected future cash flows) since the inception of the hedge. The Company uses swap currency contracts as hedges of its exposure to foreign currency risk in loans taken out in foreign currencies. If the hedged expected transaction subsequently results in the recognition of a non-financial asset or non-financial liability, or if the hedged expected transaction with a non-financial asset or non-financial liability becomes a liability to which fair value hedge accounting applies, the entity removes that amount from the cash flow hedge provision and include it directly in the initial cost or other carrying amount of the asset or liability. It does not constitute a reclassification adjustment (see IAS 1) and therefore does not affect the other components of the comprehensive income. For other cash flow hedges, the amount is reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment in the same period or periods during which the hedged expected future cash flows have an impact on profit or loss. When an entity ceases to account for a cash flow hedge, the amount that has accumulated in the cash flow hedge reserve remains in the cash flow hedge reserve until future cash flows are expected, otherwise the amount is immediately reclassified from the cash flow hedge reserve to profit or loss management as a reclassification adjustment. (g) Financial investments i. Subsidiaries Subsidiaries are all enterprises that are controlled by the Company. The control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an enterprise, so as to obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Company controls another entity. Investments in subsidiaries are measured at cost. ii. Associates Associates are those enterprises in which the Company has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when a company holds between 20 and 50 percent of the voting rights of another entity. Investments in associates are recognized at cost. The cost of financial investments is derived from the amount of spent cash or cash equivalents or is recognized at fair value of contributed assets and liabilities to acquire the enterprise at the moment of acquisition. Costs related to acquisition (transaction costs) are included in the cost of the investment. As at the reporting date, the management reconsiders whether any events occurred which could cause impairment of financial investments. Potential impairment of financial investments below their cost is recognized through a value adjustment. Value adjustments are derived from the value of future cash flows discounted to present value. 204 Separate Financial Statements 204 (h) Foreign currency Foreign currency transactions Items included in the Company's financial statements are measured using the currency of the primary economic environment in which the Company operates (the functional currency). The separate financial statements are presented in thousands of euros, which is the Company's functional and presentation currency. Transactions in foreign currencies are translated into euros at the foreign exchange rate valid at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into euros at the financial statements date at the exchange rate of the European Central Bank valid at that day. Foreign exchange differences arising from such translations are recognized through profit or loss. Non-monetary assets and liabilities denominated in foreign currencies, which are measured at cost, are translated into euros at the exchange rate valid on the day preceding the day of the accounting event. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated into euros at the foreign exchange rates valid at the dates the fair values are determined. (i) Cash and cash equivalents Cash and cash equivalents comprise cash on hand and in banks, short-term highly liquid investments with original maturities of three months or less and short-term highly liquid investments readily convertible for known amounts of cash. (j) Inventories Inventories are measured at the lower of acquisition cost (purchased inventory), respectively in own costs (incurred by own activity), and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and selling expenses. Purchased inventories are measured at cost, which includes the purchase price and other directly attributable expenses incurred in acquiring the inventories and bringing them to their existing location and condition. Own costs include direct costs and indirect costs associated with acquiring inventories by own activity. The Company uses a weighted average cost method for valuation of its inventories. (k) Offsetting Financial assets and liabilities are offset and their net amount is reported in the balance sheet when the Company has a legally enforceable right to set off the recognized amounts and the transactions are intended to be settled on a net basis. (l) Impairment of non-financial assets The carrying amounts of the Company's assets, other than inventories (refer to the accounting policy under letter j), investment property (refer to the accounting policy under letter o), financial assets (refer to the accounting policy under letter f), and deferred tax assets (refer to the accounting policy under letter s) are reviewed at each financial statements date to determine whether there is objective indication of impairment of the asset. If any such indication exists, the asset's recoverable amount is estimated. Intangible assets that have an indefinite useful life are not subject to amortisation but are tested annually for impairment as part of the cash-generating unit to which they belong. An impairment loss is recognized whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognized in profit or loss. If assets held for sale caused a decrease in fair value recognized directly in equity and if objective reasons exist that prove that there was a decrease in the fair value of the assets, the cumulated loss recognized in equity shall be reported in the profit and loss statement even if the relevant asset had not been derecognized from the statement of financial position. The recoverable amount of other assets is the greater of their value in use less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit (CGU) to which the asset belongs. 205 Separate Financial Statements In the case of goodwill, an impairment loss cannot be decreased subsequently. In respect of other assets, an impairment loss is reversed or decreased when there is an indication that the impairment loss no longer exists and there has been a change in the estimates used to determine the recoverable amount. An impairment loss can only be reversed or decreased to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognized. (m) Property, plant and equipment i. Owned assets Single items of property, plant and equipment are measured at cost less accumulated depreciation (see below) and impairment losses (refer to the accounting policy under letter l) . Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials, direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use and costs of dismantling and removing the items and restoring the site where it was located. When parts of an item of property, plant and equipment have different useful lives, those components are accounted for as separate items (major components) of property, plant and equipment. ii. Subsequent expenditures Subsequent expenditure is capitalized if it is probable that the future economic benefits embodied in the part of property, plant and equipment will flow to the Company and the relevant cost can be measured reliably. All other expenditures including the costs of day-to-day servicing of property, plant and equipment are recognized in profit or loss in the period to which they relate. iii. Depreciation Depreciation is recognized in profit or loss on a straight- line basis over the estimated useful lives of individual items of property, plant and equipment. Land is not depreciated. The estimated useful lives are as follows: • Buildings 30 - 45 years • Cableways and ski lifts ▪ Fixed structures and other objects 20 – 40 years ▪ Technology and accessories 4 - 12 years • Individual movables and sets of movables ▪ Geothermal borehole 40 years ▪ Slides 25 years ▪ Equipment 5 - 12 years ▪ Fixtures and fittings and others 5 - 10 years Depreciation methods, useful lives, as well as residual values, are reassessed annually as at the financial statement’s date. Each significant part of property, plant and equipment (component) with cost significant in relation to the total cost of the relevant item is depreciated separately. iv. Capitalized borrowing costs Borrowing costs attributable to the asset that necessarily takes a substantial period of time to get ready for its use or sal e are capitalised by the Company as part of the cost of the asset. 206 Separate Financial Statements (n) Intangible assets i. Goodwill and intangible assets acquired in a business combination Goodwill recognized as a result of the Company merging with its subsidiaries is measured as the excess of the sum of the consideration transferred, or the amount of the investments, over the net of the actual amounts of the identifiable assets acquired and the liabilities assumed. Goodwill on acquisition of subsidiaries and associates is included in the investments in subsidiaries and associates. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. ii. Software and other intangible assets Software and other intangible assets acquired by the Company are stated at cost less accumulated amortisation (see below) and impairment losses (refer to the accounting policy under letter l). Useful life of these assets is reassessed regularly. iii. Amortisation Amortisation is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, from the date the asset is available for use. The estimated useful lives are as follows: • Software 4 – 5 years • Valuable rights each item uses an individual depreciation plan, based on the estimate useful lives if these assets, valuable rights also include trademarks which represent non-depreciated assets. The Company uses 6, 7, 8, 12 and 50-year useful lives for its valuable rights. (o) Investment property Investment property represents assets that are held by the Company to generate rental income or to realise a long-term increase in value, or for both of these purposes. Investment property is stated at fair value, which is determined by an independent expert or by the management. Fair value is based on current prices of similar assets on an active market under the same location and the same conditions, or where such conditions are not available, by applying the generally applicable valuation models such as the yield method. Any gain or loss arising from a change in fair value is recognized in profit or loss. Assets that are constructed or developed for their future use as investment property are measured at fair value if the fair value can be determined reliably. Details on the valuation of investment property are specified in Note 3(a) – Significant Accounting Estimates and Assumptions, Valuation of investment property. Rental income from investment property is accounted for as described in the accounting policy under letter (u). (p) Government grants Government grants are recognized where there is a reasonable assurance that the grant will be received, and all attached conditions will be complied with. When the grant relates to an expense item, it is recognized as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognized as income in equal amounts over the expected useful life of the related asset. 207 Separate Financial Statements When the Company receives grants of non-monetary assets, the asset and the grant are recorded at nominal amounts and released to profit or loss over the expected useful life of the asset, based on the pattern of consumption of the benefits of the underlying asset by equal annual instalments. (q) Provisions A provision is recognized in the balance sheet when the Company has a present legal, contractual, or non-contractual obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate of the amount can be made. Long-term provisions the reduction of which to their present value would have a material impact on the financial statements are discounted to their present value. i. Long-term employee benefits Liability of the Company resulting from long-term employee benefits other than pension plans represents the estimated amount of future benefits that employees have earned in return for their service in the current and prior periods. The liability is calculated using the projected unit credit method, discounted to its present value. A discount rate used to calculate the present value of liability is derived from the yield curve of high-quality bonds with maturities close to the conditions of the Company’s li abilities as at the date of the financial statements preparation. (r) Interest income and expense Interest income and expense is recognized in profit or loss in the period to which it relates using the effective interest rate basis. All expenses on loans and borrowings are recognized in profit or loss, with the exception of capitalised borrowing costs; refer to the accounting policy under Note (m), part (iv) . (s) Income tax Income tax on the profit for the current accounting period comprises current and deferred tax. Current tax is the expected tax payable on the taxable income for the current accounting period, using tax rates valid as at the date of the financial statement’s preparation, and any adjustments to tax payable in respect of previous accounting periods. The amount of deferred tax is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date. Deferred tax is accounted for using the balance sheet method and calculated from all temporary differences between the carrying amounts of assets and liabilities determined for financial reporting purposes and the amounts used for taxation purposes. The fo llowing temporary differences weren’t taken into account: the initial recognition of assets or liabilities which affect neither accounting nor taxable profit, and the differences relating to investments in subsidiaries to the extent that it is probable that they will not be reversed in the foreseeable future. No deferred taxes are recognized on the initial recognition of goodwill. The amount of deferred tax is based on the expected way of realization or settlement of the carrying amount of assets and liabilities, using the tax rates valid or approved as at the date of the financial statement’s preparation. Income tax is recognized directly in profit or loss, except for the part that relates to items recognized directly in equity, in which case the income tax is recognized in equity. Deferred tax asset and liability are offset if there is a legally enforceable right to offset the payable tax liability and asset, and they relate to the same tax authority and the taxable entity. A deferred tax asset is only recognized up to the amount of probable future taxable profits against which the unused tax losses and credits can be offset. Deferred tax assets are reduced by the amount for which it is probable that the related tax benefit will not be realized. 208 (t) Trade and other payables Trade and other payables are stated at amortised cost (see Note (y) Financial liabilities). i. Short-term employee benefits Short-term employee benefit obligations are measured on an undiscounted basis and are recognized as expenses at the time of provision of the service by the employees. A payable is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Company has a present legal or contractual obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. Customer advances received and current value of accruals are disclosed separately under Contract liabilities. (u) Revenues from services rendered The Company recognizes six types of basic revenues from services rendered: • r evenues from cableways and ski lifts (hereinafter also referred to as “Mountain Resorts”) , • revenues from leisure parks, • revenues from sports services and stores, • r evenues from hotel services (hereinafter also referred to as “Hotels”) , • revenues from restaurant facilities (hereinafter also referred to as “Dining”) , • revenues from real estate projects (mainly from investment property, hereinafter also referred to as “Real Estate”) , • other revenues. The Company recognizes the revenues to the extent, in which it is probable that the economic benefits will flow to the Company and these revenues can be reliably evaluated. The revenues are recognized at fair value. The Company accounts mainly for revenues from cable cars and amusement parks, which are accounted for in the profit or loss after fulfilling the obligation to perform the contract by transferring the promised service. Revenues from season ski passes and aqua passes are accrued depending on the period during which the service was provided. Revenue from accommodation and restaurant facilities is charged daily on the basis of the services provided in each hotel establishment even for those customers who are still staying in the hotel facility. Revenue is accrued depending on the period during which the service was provided. Pre-paid advances from customers are recognized as liabilities under contract liabilities — referred to in Note 34. Revenues from services rendered do not include value added tax. They are also net of discounts and rebates (rebates, bonuses, discounts, credit notes and the like). Since 2012 the Company has been running a loyalty program for its clients – Gopass which enables its clients to earn points for purchase of products and services in its resorts and to redeem these points as discounts from future purchases. The number of unredeemed points are recognized as a decrease in sales against revenue time difference, as they are related to promised discounts from future purchases of clients. The Company monitors the value of unredeemed points and revalues it on a regular basis for its recognition in the financial statements. From 1 November 2022 to 31 October 2022 was the loyalty program operated by the subsidiary GOPASS a.s. Since 1 November 2022 the loyalty program has been operated by the subsidiary GOPASS SE, that is a part of the Group. Revenues from investment property projects are recognized for when the Company fulfills the obligation to perform the contract by transferring the property to the customer. The sale of investment property is reported in the Company ’ s revenues on the date of signing the acceptance protocol, or by registration at the cadastre on the basis of the decision to allow the deposit of title, whichever occurs first. Revenues from the sale of souvenirs and other goods shall be recognized when the Company fulfills the obligation to perform the contract by transferring the promised goods to the Customer or during this process. An asset is transferred when a customer acquires control of that asset. Other revenues from services provided shall be recognized following the provision thereof. Separate Financial Statements 209 (v) Dividends Dividends are recognized in the statement of changes in equity and also as liabilities in the period in which they are approved. (w) Non-current assets and disposal groups held for sale Non-current assets (or disposal groups comprising assets and liabilities) that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale. Immediately before classification as held for sale, the assets (or components of a disposal group held for sale) are re-measured in accordance with the International Financial Reporting Standards as adopted by the EU. Thereafter, upon initial classification as held for sale, the assets and disposal group held for sale are recognized at the lower of their carrying amount or fair value less cost to sell. Any impairment loss on a disposal group is first allocated to goodwill, and then to the remaining assets and liabilities on a pro rata basis, except for inventories, financial assets, deferred tax assets and investment property, which continue to be measured in accordance with the Company ’ s accounting policies. Impairment losses on initial recognition as held for sale are recognized in profit or loss even if the revaluation reserve was created. The same applies to gains and losses on subsequent measurements. Gains are not recognized in excess of any cumulative impairment loss. Property, plant and equipment and intangible assets classified as held for sale are no longer depreciated or amortised. In case that, after the asset assignment into the group of assets held for sale, value is realized mainly through use rather than sale thereof, the assets shall be accounted back and depreciation or amortization for property, plant and equipment and intangible assets shall be recognized in the period when such change of assets arose. (x) Reporting by segments Operating segments are parts of the Company that are able to generate income and expenses with available financial information, which is regularly reviewed by the chief operating decision makers in order to allocate resources to the segments and to assess their performance. The management monitors 7 main segments, namely mountain resorts, leisure parks, hotels, dining, sports services and stores, real estate and other. (y) Financial liabilities The Company recognizes financial liabilities as other financial liabilities. The Company does not recognize any financial liabilities valued at fair value through profit or loss. In the Company’s separate statement of financial position, other financial liabilities are recognized as received loans and borrowings, bonds issued, trade payables and other liabilities. Financial liabilities are recognized by the Company on the trade date. Upon initial recognition, financial liabilities are measured at fair value including transaction costs. Subsequent to initial recognition, financial liabilities are measured at amortized cost. Upon measurement at amortized cost the difference between the cost and the face value is recognized through profit or loss during existence of the asset or liability using the effective interest rate method. Financial liabilities are derecognized when the Company ’ s obligation specified in the contract expires, is settled or cancelled. (z) Fair value estimates The following notes summarise the main methods and assumptions used in estimating the fair values of financial assets and liabilities referred to in Note 38 – Fair value information: Separate Financial Statements 210 Separate Financial Statements 210 i. Loans granted Fair value is calculated based on discounted expected future principal and interest cash flows. Expected future cash flows are estimated considering credit risk and any indication of impairment. The estimated fair values of loans reflect changes in credit status since the loans were made and changes in interest rates in the case of fixed rate loans. ii. Loans and borrowings For loans and borrowings with no defined maturities, fair value is taken to be the amount payable on demand as at the date of preparation of the consolidated financial statement. The estimated fair value of fixed-maturity loans and borrowings is based on discounted cash flows using rates currently offered for loans and borrowings of similar remaining maturities. iii. Trade receivables and other financial assets Short-term receivables without the interest rate are valued at the original invoice amount if the impact of discounting is insignificant. For receivables with a remaining life of less than one year, the nominal amount is deemed to reflect the fair value. Fair value is determined at initial recognition and for disclosure purposes at the end of the accounting period. iv. Trade payables, and other financial liabilities Trade payables and other financial liabilities are initially measured at fair value. The carrying amount of trade payables and other financial liabilities is approximately equal to their fair value. v. Cash and cash equivalents For cash and cash equivalents, it is assumed that their nominal value is also fair value. vi. Other financial assets/liabilities Other assets/liabilities are mainly claims on partner companies, which the Company uses for the proprietary sale of tickets to customers to its resorts, receivable/ liability from derivative operations – currency SWAP, remaining liability to shareholders from a reduction in share capital in 2013. Other financial assets/liabilities are discounted for the determination of fair value if the impact of discounting is material. Significant Accounting Estimates and Assumptions The compilation of the financial statements according to the International Financial Reporting Standards as adopted by the EU requires the application of certain significant accounting estimates. It also requires that the management, in the application process of the Company accounting principles, should use its judgement. Therefore, the accounting estimates will be rarely identical with actual figures. Information about assumptions and estimation uncertainties at 31 October 2023 that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities in the next financial year is described below. The estimates and assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of revision and also in future periods if the revision affects both current and future periods. The Company considers climate change and the risks arising from it (hereinafter referred to as climate risks) as a factor that may affect the ski sector in the future. Since the beginning of its existence, the Company has been adapting its ski resorts to trends requiring artificial snow. Therefore, historical investments in resorts also included a significant share in snowmaking (snowmaking technology, retention lakes such as water reservoirs, pumps and others). By using snowmaking technology in its resorts for a long time, the Company is factoring the increase in operating and snow production costs into its financial models, projections and pricing. This item is not new for the group, but due to fluctuations in electricity prices, it is growing significantly. Therefore, the Company uses financial risk management tools such as commodity hedging to secure and predict the prices of electricity needed for cable car operations as well as snowmaking. In the future, the topic of climate risks and their impacts on business will be dealt with by the Company with increased emphasis. At the same time, we follow trends and innovations in the field of snowmaking. The Company also defines its ESG strategies, which 211 Separate Financial Statements includes business sustainability in relation to location and climate risk impacts. This area is becoming a priority, including addressing risks and finding sustainable solutions. Inflation and cost increases are perceived and actively managed by the Company through the mix of tools at its disposal. The Company monitors the indicators of cost, efficiency and profitability of its business. It evaluates trends and impacts of increases on its profitability. At the same time, it uses financial risk management tools to eliminate jumps in some costs (energy), such as commodity hedging and upfront buying. This tool significantly helps to predict the development of significant cost items and this makes it possible to quantify the impacts on financial indicators and results. By introducing flexible pricing tools for most of its products, the Company has gained the competence to better and more flexibly manage price and demand. At the same time, this method helps it compensate for the increase in costs to increase sales through price and demand. The Company is thus able to pass on part of the increase in costs to its customers. Flexi pricing and cost management allow you to better respond and meet financial projections and plans. From the perspective of sustainable business and managing the effects of inflation, the Company has sufficient know-how and tools to cope with these pressures. This was also demonstrated during 2022 and 2023, when the impact of inflation became apparent and the Company was able to maintain the business without major negative impacts. (a) Valuation of Investments in Property Investments in property are measured at fair value. The fair value of investments in property is determined either by a management evaluation or independent expert (see the Significant Accounting Principles, Note 2); in both of the cases the valuation is based on current market values and conditions. The fair market value is the estimated value, for which the property could be exchanged, on the valuation day, between knowledgeable, willing parties being a prospective seller and a prospective buyer, in an ar m’s length transaction, with each party acting well informed, cautiously and without compulsion. In the absence of current market prices, net estimated cash flow generated from the leasing of property and gains from capitalization which reflect the risk specific for the market and also cash flow from the property shall be taken into account. The valuation reflects (where relevant) the type of lessees who use the property or are responsible for the fulfilment of lease liabilities or the type of prospective users, if the property is left non-rented, the general market perception of lessee solvency, the distribution of responsibilities related to maintenance and insurance of property between the Company and the lessees, and the remaining life of property. An overview of investments in property of current and previous period is in Note 17 – Investment Property. (b) Goodwill and Impairment Test As at the date of the financial statements, the Company is required to assess whether there is any indication that its goodwill is impaired. If there is no indication that goodwill may be impaired, the Company shall, according to IAS 36, test reported goodwill for possible impairment on a yearly basis as at 31 October, i.e. as at the date of compilation of the annual separate financial statements. On the day of recognition, the acquired goodwill is allocated to individual cash-generating units (CGU) that are expected to benefit from the synergies of the business combinations. Potential decrease of the goodwill value is determined by comparing the recoverable amount of CGU and its book value. The recoverable amount is determined by the value in use. The value in use was derived from a business plan prepared by the management. The key prerequisite which was also the most sensitive factor in determining the recoverable amount was expected revenues assessed by the management, the profit margin ratio (EBITDA) and the cost of capital used as the discount factor for future net cash flows. Expected revenues as well as the profit margin ratio are based on historical revenue and EBITDA, adjusted by management's expectations for future developments - changes in customer target groups, strengthened marketing, increase in the quality of services rendered and expected investments into the property, plant and equipment to maintain their performance. 212 Projection of cash flows applied in determining the value in use covers a basic term period with subsequent extrapolation for the next period. The Company used a 24-year projection due to the need to reflect recently made investments in order to reach a normalized cash flows for determination of terminal value. Based on such normalized cash flows the assumption of long-term growth of cash flows at the level of inflation was used. Discount rates applied in the projecting of cash flows were calculated as weighted average cost of capital (after taking into account the effect of the corporate income tax). Following table summarizes assumptions, result and sensitivity of impairment of goodwill in CGU High Tatras: in TEUR 1.11.2022 - 31.10.2023 1.11.2021 - 31.10.2022 Calculation assumptions Horizon for cash flow projection 24 years 25 years Growth in the terminal year 3.7 % 3.8 % Average annual EBITDA/revenue growth 2.6 % 2.5 % Average annual growth in the number of visitors 0.46 % 1.17 % Discount rate used during cash flow projection 10.94 % 9.50 % Result and sensitivity Impairment for the period - - Impairment as at the end of the period - - Decrease of EBITDA by 5 % – impact on value in use -8 554 -8 413 Decrease of EBITDA by 5 % – resulting impairment - - Increase of discount rate by 0.5 % – impact on value in use -8 671 -10 118 Increase of discount rate by 0.5 % – resulting impairment - - Marginal decrease of EBITDA -18.08 % -9.09 % Marginal value of discount rate 13.04 % 10.29 % In 2023 and 2022, goodwill was tested within CGU High Tatras, and the test did not show any reason for asset impairment. CGU High Tatras includes restaurants and ski resorts in Starý Smokovec, Tatranská Lomnica and Štrbské Pleso. Grandhotel Starý Smokovec, Grandhotel Praha and Hotel FIS are situated in these locations. (c) Impairment test of non-financial assets other than goodwill IAS 36 requires the testing of asset impairment in cases where external or internal indicators would point out to possible asset impairment. The Company carries on 6 principal activities: running of mountain resorts, leisure park - aquapark, restaurant services, sports services and stores, accommodation services and real estate projects, namely in three locations: Jasná (the Low Tatras), in the High Tatras, and in Liptovský Mikuláš and via its subsidiaries in Slovakia, Poland, Czech Republic and Austria. Each of the locations was assessed by the management as an individual cash-generating unit (CGU). The Company monitors performance and creates separate budgets for each cash-generating unit. The Company's assets were allocated according to their material affiliation to the individual cash-generating units, including all assets located in there, except for hotels, restaurants, golf resorts, leisure parks and sports services and shops in addition to lifts and ropeways. As at 31 October 2023 and 31 October 2022 the Company carried out testing for impairment of assets for all of its major CGUs, as the Group has identified indicators of possible asset impairment related to the disruption to its business operations in prior years, the ongoing military conflict in Ukraine, which has had an indirect impact on the Company, and as a result of which energy prices and other costs have increased significantly. The impairment test was performed for locations Low Tatras a High Tatras, since it has assigned goodwill as stated in Note 3(b). The test results did not confirm a decrease in the value of the assets of the main CGUs, therefore no impairment of the Company's assets was posted. Projection of cash flows applied in determining the value in use covers a basic term period with subsequent extrapolation for the next period. Separate Financial Statements 213 The Company used a 24-year respectively 25-year projection due to the need to reflect recently made investments in order to reach a normalized cash flows for determination of terminal value. Based on such normalized cash flows, the assumption of long-term growth of cash flows at the level of inflation was used. Discount rates applied in the projection of cash flows were calculated as weighted average cost of capital after taking into account the effect of the corporate income tax. Following table summarizes assumptions, result and sensitivity of impairment of assets in CGU Low Tatras: in TEUR 1.11.2022 - 31.10.2023 1.11.2021 - 31.10.2022 Calculation assumptions Horizon for cash flow projection 24 years 25 years Growth in terminal year 3.7 % 3.8 % Average annual EBITDA/revenue growth 2.8 % 3.3 % Average annual growth in the number of visitors 0.59 % 1.88 % Discount rate used during cash flow projection 10.94 % 9.50 % Result and sensitivity Impairment for the period - - Net Impairment as at the end of the period - - Decrease of EBITDA by 5 % – impact on value in use -10 317 -9 235 Decrease of EBITDA by 5 % – resulting impairment - -5 795 Increase of discount rate by 0.5 % – impact on value in use -10 311 -11 017 Increase of discount rate by 0.5 % – resulting impairment - -7 578 Marginal decrease of EBITDA -15.79 % -1.87 % Marginal value of discount rate 12.75 % 9.65 % (d) Impairment testing of financial assets The Company performs impairment testing of financial assets in accordance with IFRS 9 and reports an impairment allowance for expected credit losses (ECL) as described in Note 2(f) vi). As at 31 October 2019, a significant increase in credit risk was identified in the credit exposure to the subsidiary SWM and the Company proceeded to reclassify this credit relationship to Stage 2. During the period from 31 October 2019 to 31 October 2022, the Company booked a specific allowance for expected credit losses during the total remaining life of the loans to SWM in the total amount of EUR 17,894 thousand. As at 31 October 2023, the Company prepared a projection of expected cash flows taking into the account current results of CGU SWM, which was discounted with an effective interest rate of 7% as a result of which the value of specific allowance was increased by the amount of EUR 8,277 thousand to EUR 26,171 thousand. If as at 31 October 2023 the projected EBITDA of CGU SWM which is part of the projected cash flows, was lower by 5% compared to the management´s estimate, the value of the specific allowance would be increased compared to previous accounting period by the amount of EUR 11,726 thousand. Separate Financial Statements 214 Separate Financial Statements (e) Financial instruments at fair value The fair value of financial instruments is determined based on: Level 1: quoted market prices (unadjusted) in active markets for identical assets or liabilities Level 2: inputs other than quoted market prices included within Level 1, which are comparable for the asset or liability, either directly (as prices of comparable instruments) or indirectly (derived from prices) Level 3: inputs for the asset and liability, which are not determined on the basis of data from comparable markets (unobservable inputs) When the quoted market price is not available, the fair value of the instrument is estimated using valuation techniques. When using valuation models, the management applies estimates and assumptions which are consistent with information available on estimates and assumptions that market participants would use when pricing the relevant financial instrument. in TEUR Note 31.10.2023 31.10.2022 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Financial assets Loans provided 22 - - 157 480 157 480 - - 183 228 183 228 Other assets - Hedging derivative transactions - foreign exchange SWAP 26 - - - - - 254 - 254 Total - - 157 480 157 480 - 254 183 228 183 482 in TEUR 31.10.2023 31.10.2022 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Financial liabilities Bonds issued 37 - 261 264 - 261 264 - 203 604 - 203 604 Total - 261 264 - 261 264 - 203 604 - 203 604 The table does not present financial instruments for which the carrying amount is considered to be an approximation of fair value. The above financial instruments are stated at their carrying amounts. 215 Separate Financial Statements Information about Operating Segments Information about Operating Segments - Separate Profit and Loss Statement Mountain Resorts Leisure Parks Hotels Dining Sports Services and Stores Real Estate Main Segments TOTAL Other TOTAL in TEUR 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m Sales 53 163 34 473 10 006 6 700 43 815 31 106 20 907 13 747 4 837 3 677 2 889 780 135 617 90 483 - - 135 617 90 483 Material and goods consumption -2 575 -1 882 -782 -440 -7 993 -6 999 -5 613 -4 103 -1 386 -1 148 -1 526 -560 -19 875 -15 133 - - -19 875 -15 132 Purchased services -12 772 -10 097 -2 821 -1 501 -12 715 -9 412 -3 616 -2 274 -700 -594 -340 -597 -32 964 -24 475 - -964 -32 964 -25 439 Personnel expenses -11 173 -9 362 -2 251 -1 792 -15 630 -11 688 -6 191 -4 895 -1 637 -1 573 -174 -506 -37 056 -29 816 - - -37 056 -29 816 Other operating expenses -273 -387 -71 -81 -390 -245 -160 -106 -42 -44 -7 -16 -943 -879 - - -943 -879 Other operating income 27 82 11 605 2 227 4 832 112 100 -6 4 - 13 2 371 5 636 - 1 067 2 371 6 703 Gain / (loss) on revaluation of investment property - - - - - - - - - - - -906 - -906 - - - -906 Impairment losses to financial assets - - - - -2 3 - -1 - - - -7 -2 -5 -7 391 10 475 -7 393 10 470 Depreciation and amortization -9 722 -8 040 -131 -128 -2 821 -3 047 -943 -951 -292 -636 -207 -169 -14 116 -12 971 - - -14 116 -12 971 Depreciation of right-of-use assets -2 884 -2 720 -1 155 -816 -548 -612 -171 -148 -45 -48 - - -4 803 -4 344 - - -4 803 -4 344 Interest income calculated using effective interest rate - - - - - - - - - - - - - - 7 523 7 965 7 523 7 965 Financing cost -9 959 -7 718 -1 552 -1 203 -7 338 -5 687 -3 707 -2 873 -1 469 -1 139 -1 846 -1 431 -25 871 -20 051 - - -25 871 -20 051 Net profit / (loss) on financial operations - - - - - - - - - - - - - - 1 572 -715 1 572 -715 Net profit / (loss) on disposal of subsidiaries - - - - - - - - - - - - - - - -721 - -721 Profit / (loss) of the segment before taxes 3 832 -5 651 1 254 1 344 -1 395 -1 749 618 -1 504 -740 -1 501 -1 210 -3 398 2 358 -12 461 1 704 17 107 4 062 4 647 Current income tax -1 216 -1 Deferred income tax -134 -1 359 Profit/ (loss) 2 712 3 287 The Company generates all of its revenues on the territory of the Slovak Republic. Intersegment eliminations are included in the amounts reported for each period. The Company reports the operating segment information that have been adjusted for intersegment transactions. The threshold of 10% of the share in total revenues was not exceeded by any client of the Company. Cost interest is distributed according to the management key and not according to the distribution in the table below. 216 Separate Financial Statements Information about Operating Segments - Separate Statement of Financial Position Mountain Resorts Leisure Parks Hotels Dining Sports Services and Stores Real Estate Main Segments TOTAL Other TOTAL in TEUR 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 Goodwill 23 770 23 770 - - 3 390 3 390 - - - - - - 27 160 27 159 - - 27 160 27 159 Intangible assets 3 232 3 273 1 153 1 088 331 533 23 141 18 65 10 69 4 767 5 169 - - 4 767 5 169 Property, plant and equipment 147 336 150 129 7 819 8 240 72 351 61 254 14 442 14 869 1 413 1 756 1 224 3 826 244 585 240 074 1 583 2 237 246 168 242 311 Right-of-use assets 30 943 30 330 21 613 22 759 3 988 3 736 1 803 1 716 745 715 - - 59 092 59 256 - - 59 092 59 256 Investments property - - - - - - - - - - 6 663 7 411 6 663 7 411 - - 6 663 7 411 Inventory 701 293 - - 943 813 581 - 1 025 948 3 958 575 7 208 2 629 - - 7 208 2 629 Trade receivables 1 813 1 608 536 408 538 222 220 36 15 17 839 133 3 961 2 424 - - 3 961 2 424 Investments in associates and joint venture 7 118 7 118 - - - - - - - - - - 7 118 7 118 - - 7 118 7 118 Investments in subsidiaries 40 798 10 309 3 472 3 472 - - - - - - 10 - 44 280 13 781 1 293 1 293 45 573 15 074 Other receivables 644 3 143 375 424 453 - 25 - 13 - - 484 1 510 4 051 - - 1 510 4 051 Financial investments - - - - - - - - - - - - - - 36 36 36 36 Other assets 1 803 1 612 381 328 2 384 2 226 38 27 139 124 - - 4 745 4 317 - - 4 745 4 317 Loans provided - - - - - - - - - - - - - - 157 480 183 228 157 480 183 228 Cash and cash equivalents 1 702 1 996 320 400 1 402 1 512 669 778 155 302 93 344 4 341 5 332 - - 4 341 5 332 Assets total 259 860 233 580 35 669 37 119 85 780 73 686 17 801 17 567 3 522 3 927 12 797 12 842 415 430 378 721 160 392 186 794 575 822 565 515 in TEUR 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 31.10.23 31.10.22 Loans and borrowings long-term 45 654 47 724 21 488 26 998 9 020 9 155 2 263 2 263 1 132 1 132 - - 79 558 87 272 - - 79 558 87 272 Loans and borrowings short-term 20 765 15 787 5 643 1 280 590 287 14 45 7 23 - - 27 018 17 422 - 60 895 27 018 78 317 Lease liabilities 35 141 31 508 21 528 22 023 3 754 3 611 1 852 1 766 746 753 - - 63 021 59 661 - - 63 021 59 661 Trade payables and other payables 8 517 6 937 1 899 2 008 4 929 2 960 1 854 1 493 493 344 1 062 1 991 18 754 15 734 - 190 18 754 15 924 Other liabilities 1 555 2 143 33 48 217 284 69 100 16 23 10 14 1 900 2 614 784 803 2 684 3 417 Contract liabilities 4 269 6 881 462 275 4 143 2 640 - - - - 109 265 8 983 10 061 - - 8 983 10 061 Provisions 46 64 5 9 21 40 10 18 2 5 1 1 85 137 - - 85 137 Bonds issued - - - - - - - - - - - - - - 261 264 203 604 261 264 203 604 Deferred tax liability - - - - - - - - - - - - - - 17 028 16 203 17 028 16 203 Corporate income tax - - - - - - - - - - - - - - 1 210 - 1 210 - Total liabilities 114 185 111 045 52 704 52 641 22 704 18 978 6 135 5 685 2 410 2 281 1 182 2 271 199 319 192 901 280 286 281 695 479 605 474 596 Eliminations among segments are included in amounts reported for particular periods. The prices used among segments are deter mined based on market prices for similar services and financing. Loans and Borriwings and Bonds Issued in the Other category were not used to finance specific projects. 217 Separate Financial Statements 217 Increase, Decrease and Sale of Shares in Companies On 1 November 2022, the Company increased other capital funds in the company TMR Jested, a.s. and Mölltaler Gletscherbahnen GmbH & Co KG. For more information, see Note 20 Investments in Subsidiaries. On 1 November 2022, the companies EUROCOM Investment, s.r.o and WORLD EXCO, s.r.o were merged and the company EUROCOM Investment s.r.o became the legal successor. On 8 November 2022, GOPASS SE, a branch in Slovakia, was founded. It is an enterprise of a foreign entity of a European company - a subsidiary GOPASS SE. As of 1 April 2023, the cross-border merger of GOPASS a.s. as a dissolving company with the successor company GOPASS SE took effect. The decisive date for the merger is 1 November 2022. GOPASS a.s. ceased to exist as a result of a cross-border merger without liquidation on 1 April 2023. On 28 June 2023, the company TMR Real Estate, s.r.o. was established with a share capital of EUR 5 thousand, of which the Company became the only partner. On 26 September 2023, the company Štrbské Pleso resort, s.r.o. was established with a share capital of EUR 5 thousand, of which the Company became 100% owner. On 30 September 2022, the Company sold its 51% share in Tikar D.O.O. The consideration transferred was in the amount of EUR 2,350 thousand, part of which was used to settle loans with the corresponding outstanding interest in the amount of EUR 3,071 thousand. The transaction resulted in a loss from the sale of the subsidiary in the amount of EUR 721 thousand. On 1 July 2022, the Company acquired a 100% stake in the European company GOPASS SE with a place of business in the Czech Republic and a total value of CZK 2,924 thousand, which will serve to expand in the European market. This company was established solely for the purpose of further sale and before acquiring the 100 % share it did not carry out any business activity. By its purchase the Company acquired only receivable from unpaid share capital in the amount of CZK 2,924 thousand, which was not paid as at the date of acquisition. The consideration transferred in the amount of CZK 2,924 thousand was settled in cash. On 22 June 2022, for the purpose of providing services within the TMR Group, International TMR services s.r.o. was founded in the Czech Republic with a share capital of CZK 200 thousand, which became 100% owned by the Company. 218 Separate Financial Statements Sales in TEUR 1.11.2022 - 31.10.2023 1.11.2021 - 31.10.2022 Low Tatras 52 275 33 806 High Tatras 47 194 33 116 Tatralandia 20 608 13 101 Bešeňová 10 067 6 360 Real estate 2 780 684 Other 2 693 3 415 Total 135 617 90 483 Consumption of Material and Goods in TEUR 1.11.2022 - 31.10.2023 1.11.2021 - 31.10.2022 Material in hotels and restaurant facilities -10 756 -7 745 Goods -2 432 -2 701 Real estate sold -1 517 -529 Fuels -948 -809 Material for repair and maintenance -1 087 -834 Material and goods – other -3 135 -2 514 Total -19 875 -15 132 219 Separate Financial Statements Purchased Services in TEUR 1.11.2022 - 31.10.2023 1.11.2021 - 31.10.2022 Energy consumption -14 062 -10 793 Advertisement expenses -2 349 -1 586 Rental costs (cost of premises) and others -2 435 -685 Other administrative expenses -3 894 -3 538 Repairs and maintenance expenses -2 296 -1 972 Communication expenses -1 825 -1 674 Legal advice expenses -646 -958 Services related to owned premises -570 -445 Transport, accommodation, travel expenses -812 -271 Laundry and cleaning costs -1 252 -923 Music and animation costs -927 -421 Guard and security service costs -249 -225 Accounting and audit costs -266 -247 Other purchased services -2 271 -1 907 State aid related to rental costs and other costs 890 206 Total -32 964 -25 439 The Company uses the services of KPMG Slovensko spol. s r.o. audit company, for the auditing of separate and consolidated financial statements. Between 1 November 2022 and 31 October 2023, the expense of these items represented EUR 235 thousand (for the period ended on 31 October 2022: EUR 178 thousand) for auditing of year-end financial statements. Personnel Expenses in TEUR 1.11.2022 - 31.10.2023 1.11.2021 - 31.10.2022 Wages and salaries -19 714 -16 051 Personnel leasing -6 512 -5 898 Social security (compulsory) -8 436 -6 691 Remuneration of members of key management and Supervisory Board -2 377 -1 531 Other social expenses -17 -15 State aid related to wages and salaries - 370 Total -37 056 -29 816 In the period between 1 November 2022 and 31 October 2023, the average number of Company employees was 996, of which management 9 (between 1 November 2021 and 31 October 2022, it was 918, of which management 14). During the year, the Company used the services of employment agencies for short-term personnel leasing. In the period between 1 November 2022 and 31 October 2023 it was 344 employees in average (between 1 November 2021 and 31 October 2022: 318 employees). 220 Separate Financial Statements 220 The table below provides an overview of the Company's key management remuneration for the period from 1 November 2022 to 31 October 2023: in TEUR Remuneration of members of key management Base remuneration Extraordinary bonuses Variable component of renumeration Total Board of Directors 206 1 688 1 894 Supervisory Board 79 - - 79 Top management 204 200 - 404 Audit Committee - - - - Total 489 200 1 688 2 377 The table below provides an overview of the Company's key management remuneration for the period from 1 November 2021 to 31 October 2022: in TEUR Remuneration of members of key management Base remuneration Extraordinary bonuses Variable component of renumeration Total Board of Directors 192 - 941 1 133 Supervisory Board 79 - - 79 Top management 219 100 - 319 Audit Committee - - - - Total 490 100 941 1 531 For the year ending 31 October 2023, base remuneration for top management amounted EUR 204 thousand (from 1 November 2021 to 31 October 2022: EUR 219 thousand). Extraordinary remuneration was paid to members of the top management in the total amount of EUR 200 thousand (from 1 November 2021 to 31 October 2022: EUR 100 thousand). Members of the Board of Directors of the Company, in accordance with the Rules of Remuneration of Company Bodies dated 31 May 2023 (hereinafter referred to as the "Rules of Remuneration"), are granted remuneration for the performance of their duties as a member of the Board of Directors of the Company, which consists of a fixed component of remuneration and a variable component of remuneration. The amount of the fixed component of remuneration is agreed with the member of the Board of Directors in accordance with the Remuneration Rules in the contract for the performance of the duties of a member of the Board of Directors, which has been approved by the Supervisory Board of the Company. For the year ending 31 October 2023, fixed remuneration components totaling EUR 206 thousand were paid to the members of the Board of Directors (from 1 November 2021 to 31 October 2022: EUR 192 thousand). The variable remuneration component is paid to the members of the Board of Directors after fulfilling the criteria defined in the Remuneration Rules, the main criterion being the achievement of the EBITDA ratio at the next payout date specified in the Company for the payment of wages to employees after the publication of the consolidated statutory financial statements of the Company for the financial year for which the remuneration is paid. The total amount of the claimable variable component of the renumeration for the period from 1 November 2022 to 31 October 2023 in the value of EUR 1,688 thousand (from 1 November 2021 to 31 October 2022: EUR 941 thousand) is disclosed as a provision for the variable remuneration component of the members of the Board of Directors. The year-on-year increase occurred due to the fulfillment of the criteria set for the award of the variable remuneration component (fulfillment of the Company's EBITDA plan). The members of the Supervisory Board are paid fixed components of remuneration in accordance with the Rules on remuneration of members of the Supervisory Board and concluded contracts for the performance of their duties, the variable components of remuneration shall not be paid to the members of the Supervisory Board. For the year ending on 31 October 2023, basic remuneration totaling EUR 79 thousand was paid (from 1 November 2021 to 31 October 2022: EUR 79 thousand). 221 Separate Financial Statements Other Operating Expense in TEUR 1.11.2022 - 31.10.2023 1.11.2021 - 31.10.2022 Insurance (property, automobiles, travel cost) -368 -343 Fees and commissions -406 -415 Shortages and losses -154 -92 Other operating expense -15 -29 Total -943 -879 Other Operating Income in TEUR 1.11.2022 - 31.10.2023 1.11.2021 - 31.10.2022 Claims paid by insurance company 23 22 Other operating income 403 1 362 Gain / (loss) on sale of assets 1 945 5 319 Total 2 371 6 703 For 2022, other operating income is represented by revenues from the sale of a part of the business between the Company and GOPASS a.s. in the amount of EUR 1,066 thousand. Finance Income and Expense in TEUR 1.11.2022 - 31.10.2023 1.11.2021 - 31.10.2022 Interest income calculated using effective interest rate 7 523 7 965 Financing costs -25 871 -20 051 Net profit / (loss) on financial operations 1 572 -715 Total -16 776 -12 801 Interest income calculated using effective interest rate results mainly from loans provided at a fixed interest rate. See Note 22 - Loans Provided. 222 Separate Financial Statements The table below shows the composition of financing costs: in TEUR 1.11.2022 - 31.10.2023 1.11.2021 - 31.10.2022 Interest expense related to loans and borrowings -7 186 - 6 727 Interest expense from bonds issued -14 900 -11 457 Interest expense from leasing -3 791 -2 659 Income associated with hedging derivative transaction SWAP 6 792 Financing costs total -25 871 -20 051 For information about received loans and borrowings see Note 30 – Loans and Borrowings. For information about bonds issued see Note 37 – Bonds Issued. For information about leases see Note 31 – Lease Liabilities. In the period from 1 November 2022 to 31 October 2023, the Company capitalized interest expense into assets with a total value of EUR 94 thousand (from 1 November 2021 to 31 October 2022: EUR 137 thousand). in TEUR 1.11.2022 - 31.10.2023 1.11.2021 - 31.10.2022 Cost of administration of financial instruments -273 -484 Exchange gains / (losses) 1 845 -231 Net Profit / (Loss) from Financial Operations Total 1 572 -715 Current and Deferred Income Tax Deferred income tax is calculated using statutory tax rates, which are expected in a period in which the receivable is realized, or the liability is settled. To calculate deferred tax from temporary differences originated in the Slovak Republic, the Company applied a 21% rate for the year 2023 (2022: 21%) resulting from the legal corporate income tax rate valid as at the date when the financial statements are being compiled. in TEUR 1.11.2022 - 31.10.2023 1.11.2021 - 31.10.2022 Current tax: Tax of current accounting period -1 210 - Withholding tax on interest -6 -1 -1 216 -1 Deferred tax: Posting and release of temporary differences -134 -1 359 Change of tax rate - - Total income tax -1 350 -1 360 223 Separate Financial Statements Income tax reported through other components of comprehensive income 1.11.2022 - 31.10.2023 1.11.2021 - 31.10.2022 in TEUR Before taxes Tax After taxes Before taxes Tax After taxes Other comprehensive income that may be reclassified to profit or loss in subsequent periods: Net gain/(loss) on cash flow hedges 3 294 692 2 602 -1 396 -293 -1 103 Total comprehensive income 3 294 692 2 602 -1 396 -293 -1 103 Reconciliation of the effective tax rate in TEUR 1.11.2022 - 31.10.2023 1.11.2021 - 31.10.2022 % % Profit before taxes 4 062 4 647 Tax rate 21% 21% 853 21% 976 Tax non-deductible expenses 18% 749 16% 738 Income not subject to tax 0% - -2% -78 Current tax: withholding tax on interest 0% 6 0% 1 Tax losses claimed during the period -7% -282 -6% -277 Deferred tax asset not recognized 1% 24 0% - Change of tax rate 0% - 0% - Total 33% 1 350 29% 1 360 224 Separate Financial Statements Movements of deferred tax liability (net) during 2023 and 2022 2023 in TEUR Balance as at 1 November 2022 Reported in profit and loss statement Reported in other comprehensive income Acquired through business combination Balance as at 31 October 2023 Non-current tangible and intangible assets -21 975 -1 728 - - -23 703 Investment property -595 156 - - -439 Losses from impairment of trade receivables and other assets 4 791 1 547 - - 6 338 Cash Flow hedge 691 - -691 - - Provisions and liabilities 526 385 - - 911 Leases (IFRS 16) -110 -212 - - -322 Tax losses 469 -282 - - 187 Total, net -16 203 -134 -691 - -17 028 2022 in TEUR Balance as at 1 November 2021 Reported in profit and loss statement Reported in other comprehensive income Acquired through business combination Balance as at 31 October 2022 Non-current tangible and intangible assets -22 501 526 - - -21 975 Investment property -785 190 - - -595 Losses from impairment of trade receivables and other assets 6 996 -2 206 - - 4 791 Cash Flow hedge 398 - 293 - 691 Provisions and liabilities 183 343 - - 526 Leases (IFRS 16) -181 71 - - -110 Tax losses 753 -284 - - 469 Total, net -15 137 -1 360 293 - -16 203 See also Note 20 - Deferred Tax Asset, Deferred Tax Liability. 225 Separate Financial Statements Property, Plant and Equipment in TEUR Land and buildings Individual movable assets and sets of movable assets Assets under construction Total Cost Opening balance as at 1.11.2021 220 522 134 553 7 086 362 162 Additions 1 061 822 17 754 19 637 Disposals -4 216 -806 -298 -5 320 Transfer from Right-of-use asset - 350 - 350 Movements within assets 235 107 -343 - Balance as at 31.10.2022 217 602 135 026 24 199 376 829 Opening balance as at 1.11.2022 217 602 135 026 24 199 376 829 Additions 5 028 4 687 7 651 17 366 Disposals -1 927 -327 -587 -2 841 Transfer from/to Investment property 747 - - 747 Transfer from Right-of-use asset 277 1 899 - 2 176 Movements within assets 7 515 6 904 -14 419 - Balance as at 31.10.2023 229 242 148 189 16 844 394 277 Accumulated depreciation and losses from impairment of assets Opening balance as at 1.11.2021 -59 541 -64 855 - -124 396 Depreciation of current accounting period -6 351 -6 134 - -12 485 Disposals 1 755 780 - 2 535 Transfer from Right-of-use asset - -172 - -172 Balance as at 31.10.2022 -64 137 -70 381 - -134 518 Opening balance as at 1.11.2022 -64 137 -70 381 - -134 518 Depreciation of current accounting period -6 366 -7 247 - -13 613 Disposals 817 326 - 1 143 Transfer from Right-of-use asset -120 -1 001 - -1 121 Balance as at 31.10.2023 -69 806 -78 303 - -148 109 Carrying value As at 1.11.2021 160 981 69 698 7 086 237 766 As at 31.10.2022 153 465 64 645 24 199 242 311 As at 1.11.2022 153 465 64 645 24 199 242 311 As at 31.10.2023 159 436 69 886 16 844 246 168 In the period from 1 November 2022 to 31 October 2023, the Company made investments totaling EUR 17,366 thousand. The Company invested EUR 7,408 thousand into the continuation of the construction of the Centrum Jasná complex, EUR 5,636 thousand in the completion of the Biela Púť – Priehyba cable car and EUR 933 thousand in the reconstruction of the wellness in the Grandhotel Starý Smokovec. The Company also invested EUR 409 thousand in IT infrastructure and made other minor investments. In the period from 1 November 2021 to 31 October 2022, the Company made investments totaling EUR 19,637 thousand. The C ompany invested EUR 10,446 thousand in the construction of the Biela Púť – Priehyba cableway, EUR 3,689 thousand in the continuation of the construction of the Centrum Jasná complex and completely strengthened 226 Separate Financial Statements snowmaking worth EUR 1,903 thousand. The Company also procured the gastronomic operation, named Humno, in Tatranská Lomnica in the value of EUR 780 thousand, invested EUR 402 thousand in the completion of water reservoir, named Zadné vody, and made other minor investments. The Company also reclassified right-of-use assets with the accounting residual value of EUR 1,055 thousand (from 1 November 2021 to 31 October 2022: EUR 177 thousand) due to the termination of financial leasing during the period from 1 November 2022 to 31 October 2023. The transfer from investment property in the amount of EUR 747 thousand includes the transfer of Hotel Liptov and accommodation facility Otupné, for which the lease to third parties was terminated on 31 May 2023 and 20 September 2023 respectively, and which the Company has begun to operate again. Impairment loss For the period ended on 31 October 2023 and 31 October 2022, the Company did not recognize any impairment of land, buildings and equipment. Property Insurance in TEUR 31.10.2023 31.10.2022 Natural disaster and vandalism 499 044 490 820 General machinery risks 32 797 31 900 Liability for damage 5 706 5 706 Security As at 31 October 2023, Land, buildings and equipment in the amount of EUR 227,460 thousand were used as the security of the bank loans and bonds (as at 31 October 2022: in the amount of EUR 228,247 thousand). Capitalized financial costs As at 31 October 2023, the Company capitalized the interest expenses into the assets in the amount of EUR 94 thousand (as at 31 October 2022: EUR 137 thousand). 227 Separate Financial Statements Right-of-use Assets Movements in the carrying amounts of property, plant and equipment acquired through leasing were as follows : in TEUR Land and buildings Individual movable assets and sets of movable assets Total Cost Opening balance as at 1.11.2021 36 696 8 266 44 962 Additions 24 148 905 25 053 Transfer to Property, plant and equipment - -350 -350 Disposals -870 -832 -1 702 Modifications 1 732 46 1 778 Balance as at 31.10.2022 / 1.11.2022 61 706 8 036 69 742 Additions 545 1 672 2 217 Transfer to Property, plant and equipment -277 -1 900 -2 177 Disposals -18 -244 -261 Modifications 3 545 -60 3 485 Balance as at 31.10.2023 65 502 7 504 73 006 Accumulated depreciation Opening balance as at 1.11.2021 -5 090 -2 944 -8 034 Depreciation of current accounting period -2 947 -1 397 -4 344 Transfer to Property, plant and equipment - 172 172 Disposals 860 860 1 720 Balance as at 31.10.2022 / 01.11.2022 -7 177 -3 309 -10 486 Depreciation of current accounting period -3 454 -1 350 -4 803 Transfer to Property, plant and equipment 120 1 003 1 123 Disposals 18 234 252 Balance as at 31.10.2023 -10 493 -3 424 -13 914 Carrying value As at 31.10.2022 54 529 4 727 59 256 As at 31.10.2023 55 009 4 083 59 092 228 Separate Financial Statements Goodwill and Intangible Assets in TEUR Goodwill Valuable rights Software Acquired intangible assets Total Cost Opening balance as at 1.11.2021 27 510 6 874 2 617 134 37 135 Additions - - 184 22 206 Disposals - -1 653 - -24 -1 677 Transfers within assets - - 110 -110 - Balance as at 31.10.2022 27 510 5 221 2 911 22 35 664 Opening balance as at 1.11.2022 27 510 5 221 2 911 22 35 664 Additions - - 103 - 103 Disposals - - -18 -1 -19 Foreign exchange differences - - 21 -21 - Balance as at 31.10.2023 27 510 5 221 3 017 - 35 748 Accumulated depreciation and losses from impairment of assets Opening balance as at 1.11.2021 -350 -1 250 -1 602 - -3 202 Depreciation of current accounting period - -158 -328 - -486 Disposals - 352 - - 352 Balance as at 31.10.2022 -350 -1 056 -1 930 - -3 336 Opening balance as at 1.11.2022 -350 -1 056 -1 930 - -3 336 Depreciation of current accounting period - -141 -362 - -503 Disposals - - 18 - 18 Balance as at 31.10.2023 -350 -1 197 -2 274 - -3 821 Carrying value As at 1.11.2021 27 160 5 624 1 015 134 33 933 As at 31.10.2022 27 160 4 165 981 22 32 328 As at 1.11.2022 27 160 4 165 981 22 32 328 As at 31.10.2023 27 160 4 024 743 - 31 927 Valuable rights are represented in particular by the customer relationships obtained during the merger of the Company with the company 1. Tatranská a.s. worth of EUR 3,071 thousand in the financial year ending as at 31 October 2021. Disposals of valuable rights with a net book value of EUR 1,301 thousand are trademarks sold by the Company in the period from 1 November 2021 to 31 October 2022 to its subsidiary of TMR Parks, a.s. 229 Separate Financial Statements Investment Property in TEUR 31.10.2023 31.10.2022 Acquisition price Opening balance as at 1.11.2022 / 1.11.2021 7 411 8 317 Transfer to Property, Plant and Equipment -747 - Revaluation at fair value - -906 Balance as at 31.10.2023 / 31.10.2022 6 663 7 411 As at 31 October 2023 , investment property represents hotel Kosodrevina, Chata Solisko and Vila Zámoček with an aggregate book value of EUR 1,042 thousand (as at 31 October 2022: EUR 1,789 thousand), which are leased out to third parties that operate them. Hotel Kosodrevina is located in the Low Tatras, Chata Solisko and Vila Zámoček are located in the High Tatras. Chata Solisko and Vila Zámoček in the amount of EUR 833 thousand (as at 31 October 2022: EUR 833 thousand) were acquired as a result of the Company’s merger with 1. Tatranská. In addition, investment property also includes forest areas and lots of land in Starý Smokovec in the book value of EUR 5,622 thousand (as at 31 October 2022: EUR 5,622 thousand) acquired by acquisition in 2009. Transfer to Property, Plant and Equipment in the amount of EUR 747 thousand includes the transfer of Hotel Liptov and accommodation facility Otupné, for which the lease to third parties was terminated on 31 May 2023 and 30 September 2023 respectively, and which the Company has begun to operate again. As of 31 October 2023, the management of the Company concluded that the assumptions that would lead to change in the value of these investments have not changed significantly (as at 31 October 2022: based on the current market and contractual conditions, the management of the Company has revised the value of investment property downwards by EUR 906 thousand). The value of the leased properties was determined by management's estimate. The estimate of management's fair value is based on discounting future cash flows arising from currently concluded lease contracts after taking into account non- recoverable costs of 4-10% in each of the objects at yield of 6-10%, assuming continuation at current prices. During the current period the lease contract of the Hotel Kosodrevina has not changed compared to the previous period. Other assumptions have also not changed during the current period presented, resulting in no change in their fair value. The value of the land was determined by the management using market prices, and the final value is based on an estimate of market price per square meter, depending on the type of land and market transactions for similar lots of land. The price per m 2 for forest land is in a range between EUR 0.60 – EUR 1.10, the price for land with built- up areas and courtyards ranges from EUR 60 to EUR 110 per m 2 . Prices per m 2 for individual types of land did not change during the presented or comparable period. If the fair value of that part of investment property that was determined based on management's estimates differed by 10%, the carrying amount of investment property would be EUR 666 thousand higher or lower compared to the amount reported as at 31 October 2023 (as at 31 October 2022: EUR 741 thousand). In the period between 1 November 2022 and 31 October 2023 , income from investment property accounted for EUR 140 thousand and direct operating cost related to investment property was EUR 20 thousand (between 1 November 2021 and 31 October 2022: income from investment property accounted for EUR 138 thousand, and direct operating cost related to investment property was EUR 39 thousand). Security As at 31 October 2023, a part of investment property in the amount of EUR 209 thousand was used as the security for bank loans and bonds (as at 31 October 2022: in the amount of EUR 1,257 thousand). 230 Separate Financial Statements Investment in an Associate and a Joint Venture in TEUR 31.10.2023 31.10.2022 MELIDA, a.s. (25% stake) 7 118 7 118 Total 7 118 7 118 On 15 December 2019, the Company signed an agreement regarding transfer of securities, on the basis of which it purchased an additional 15.5% stake in MELIDA a.s., which is the operator of the Špindlerův Mlýn ski resort in the Czech Republic. By signing the cont ract, the Company became owner of a total share of 25% in the amount of EUR 7,118 thousand. As at 31 October 2023, the stake in MELIDA a.s. is reported as an investment in associates at cost. The purchase price of MELIDA a.s. in the amount of EUR 7,118 thousand was the fair value of the share held as at 30 October 2019, increased by an additional cash consideration in the amount of EUR 2,027 thousand. The valuation of the 9.5% stake held as at 30 October 2019 in the amount of EUR 4,498 thousand, which was increased by additional capital contributions of EUR 593 thousand, totaled EUR 5,091 thousand, was assessed by the Company as a reliable estimate of the fair value of the 9.5% stake held as of 15 December 2019. As at 31 October 2019, the Company recorded a financial investment of 9.5% stake in MELIDA, a.s. in the amount of EUR 4,498 thousand. As at 29 October 2019, the Company signed an agreement on the transfer of securities with CAREPAR, a.s., on the basis of which the Company acquired 19 ordinary shares of MELIDA, a.s. and thus became a direct shareholder (9.5% stake) in MELIDA, a.s.. Investments in Subsidiaries in TEUR 31.10.2023 31.10.2022 Investments in share capital Szczyrkowski Ošrodek Narciarski S.A. (97% stake) 7 191 7 191 Muttereralm Bergbahnen Errichtungs GmbH (90% stake) 3 714 3 714 TMR Parks, a.s. (100% stake) 2 327 2 327 GOPASS, a.s. (100% stake ) 0 1 102 Korona Ziemi Sp. z o.o. (73% stake) 317 317 GOPASS SE (100% stake) 1 220 118 Tatry mountain resorts Č R, a.s. (100% stake) 79 79 TMR Finance Č R, a.s. (100% stake) 78 78 TMR Ještěd a.s. (100% stake) 75 75 Mölltaler Gletscherbahnen GmbH (90% stake) 33 33 Tatry Mountain Resorts AT GmbH (100% stake) 32 32 TMR Real Estate s.r.o. (100% stake) 5 - Štrbské Pleso resort, s. r. o. (100% stake ) 5 - International TMR services s.r.o. (100% stake) 8 8 Mölltaler Gletscherbahnen GmbH & Co KG (90% stake) 0,002 0,002 15 084 15 074 Investments in other capital funds TMR Ještěd a.s. 7 598 - Mölltaler Gletscherbahnen GmbH & Co KG 22 891 - 30 489 - Total 45 573 15 074 231 Separate Financial Statements As at 1 November 2022, the Company capitalized provided loan in the amount of EUR 6,552 thousand to other capital funds of the subsidiary TMR Ještěd, a.s.. As at 31 October 2023, the Company reported other capital funds of the subsidiary TMR Ješted worth of EUR 7,598 thousand. As at 1 November 2022, the Company capitalized provided loan in the amount of EUR 20,970 thousand to other capital funds of the subsidiary Mölltaler Gletscherbahnen GmbH & Co KG. As at 31 October 2023, the Company reported other capital funds to the subsidiary Mölltaler Gletscherbahnen GmbH & Co KG worth EUR 22,891 thousand. As at 1 April 2023, the cross-border merger of GOPASS a.s. as a dissolving company with the successor company GOPASS SE took effect. The decisive date for the merger is 1 November 2022. GOPASS a.s. ceased to exist as a result of a cross-border merger without liquidation on 1 April 2023. On 28 June 2023, the company TMR Real Estate, s.r.o. was established for the purpose of real estate activity with a share capital with the amount of EUR 5 thousand, of which the Company became the only shareholder. On 26 September 2023, the company Štrbské Pleso resort, s.r.o. was established, with a share capital with the amount of EUR 5 thousand, of which the Company became the 100% owner. On 30 September 2022, the Company sold its 51% share in Tikar D.O.O. The consideration transferred was in the amount of EUR 2,350 thousand, part of which was used to settle loans with the corresponding outstanding interest in the amount of EUR 3,071 thousand. The transaction resulted in a loss from the sale of the subsidiary in the amount of EUR 721 thousand. As of 7 September 2022, an increase in the registered capital of TMR Parks, a.s. by EUR 2,300 thousand was entered in the Commercial Register. On 1 July 2022, the Company acquired 100% of the shares in the European company GOPASS SE with a value of CZK 2,924 thousand, which will be used for the purpose of expansion into the European market. On 22 June 2022, the company International TMR services, s.r.o. was established with a registered capital of CZK 200 thousand, in which the Company became the sole shareholder. The Company will serve to provide services within the Group. As at 12 April 2022, an increase in the registered capital of GOPASS, a.s. by EUR 1,074 thousand was entered in the Commercial Register. On 4 June 2021, GOPASS, a.s. was founded with registered capital of EUR 25 thousand. The Company became its sole shareholder. GOPASS, a.s. will be used for expansion into Alpine ski resorts which are planned to be incorporated into its platform. On 1 May 2021, the Company acquired a 90% share in Muttereralm Bergbahnen Errichtungs GmbH, amounting to EUR 3,714 thousand. The shareholding of 10% was acquired by the subsidiary Tatry mountain resorts AT GmbH. The Company operates a ski resort in Austria. On 1 November 2020, the Company merged with its subsidiary 1. Tatranská. As a result of this merger, the Company increased its direct interests in Korona Ziemi Sp. z o.o. and TIKAR D.O.O. in the amount of EUR 317 thousand (73% interest) and EUR 1 thousand (51% interest), respectively. On 31 May 2020, the Company acquired 100% stake in 1.Tatranská, akciová spoločnosť for EUR 25,247 thousand. Acquired company operates the ski resort Štrbské pleso in High Tatras in Slovakia, provides restaurant and catering services and runs a ski and snowboard school. On 1 May 2019, the Company acquired 90% stake in Mölltaler Gletscherbahnen GmbH for EUR 33 thousand and 90% stake in Mölltaler Gletscherbahnen GmbH & Co KG for EUR 1.8. 10% stake in Mölltaler Gletscherbahnen GmbH and 10% stake in Mölltaler Gletscherbahnen GmbH & Co KG were purchased by Tatry Mountain Resorts AT GmbH. The acquired Companies run the ski resorts Mölltaler Gletscher and Ankogel in Austria. 232 Separate Financial Statements On 16 February 2018 Tatry mountain resorts Č R, a.s. was founded with a registered capital of CZK 2,000 thousand (EUR 79 thousand). Its sole shareholder has become the Company. The company Tatry mountain resorts Č R, a.s. will serve for future acquisition in the Czech Republic. On 28 May 2018, the Company signed a purchase agreement of PHIG Holding GmbH, which was later renamed to Tatry mountain resorts AT GmbH. The purchase amount was agreed to EUR 32 thousand, with the Company becoming the sole owner of the business. The net asset value of the company at the time of acquisition amounted to EUR 32 thousand. On 14 September 2018, TMR Finance Č R, a.s. was founded, with a registered capital of CZK 2,000 thousand (EUR 78 thousand). Its sole shareholder has become the Company. TMR Finance Č R, a.s. issued bonds on the Prague Stock Exchange on 7 November 2018. On 5 May 2017, company Tatry mountain resorts Č R, a.s. was incorporated, with share capital in total amount of CZK 2,000 thousand (EUR 75 thousand). The Company became sole shareholder in the new company. On 31 January 2018, the company Tatry mountain resorts ČR, a.s. was renamed to TMR Ještěd a.s.. On 30 September 2017, company TMR Parks, a.s. (former name: Tatry mountain resorts PL, a.s.) , with share capital in total amount of EUR 27 thousand was incorporated. The Company became sole shareholder in the new company. Tatry mountain resorts PL, a.s. then on 6 December 2017 purchased the entire 75% stake in Slaskie Wesole Miasteczko Sp. Z o.o. in the total value of PLN 30,000 thousand. On 14 April 2015, the Company acquired a 70% stake in Polish company PS Rozrywka, which was later renamed to Ślaskie Wesole Miasteczko Sp. z o. o. (hereinafter referred to as SWM). For such a 70% stake, the Company paid EUR 6,727 thousand. On 4 August 2015, the Company purchased an additional 5% stake, in a total amount of EUR 723 thousand. The company SWM is the operator of a theme park in the town of Chorzow, Poland. The total value of the assets, as the date of acquisition after revaluation at the fair value was EUR 9,489 thousand, and the total value of equity was EUR 9,077 thousand. On 6 December 2017 the Company sold its 75% stake in Ślaskie Wesole Miasteczko Sp. Z o.o., to the subsidiary Tatry mountain resorts PL, a.s. for PLN 30 million. On 5 March 2014, the Company purchased 97% shares of Szczyrkowski Osrode Narciarski S.A. (hereinafter referred to as SON), in a total amount of EUR 7,191 thousand. It is a company holding and running a ski centre in Poland. The total value of the assets, as the date of acquisition after revaluation at the fair value was EUR 13,321 thousand, and the total value of equity was EUR 9,031 thousand. Security As at 31 October 2023, shares in subsidiary SON in the amount of EUR 7,191 thousand (as at 31 October 2022: in the amount of EUR 7,191 thousand) were used to secure bank loans of the subsidiary SON. 233 Separate Financial Statements Deferred Tax Asset, Deferred Tax Liability Deferred tax asset (liability) was posted for the following items: in TEUR Receivables Payables Total 31.10.2023 31.10.2022 31.10.2023 31.10.2022 31.10.2023 31.10.2022 Temporary differences related to: Non-current tangible and intangible assets - - -23 703 -21 975 -23 703 -21 975 Investments property - - -439 -595 -439 -595 Losses from impairment of trade receivables and other assets 6 338 4 791 - - 6 338 4 791 Cash flow hedge - 691 - - - 691 Provisions and liabilities 911 526 - - 911 526 Leases (IFRS 16) - - -322 -110 -322 -110 Tax losses 187 469 - - 187 469 Set-off -7 436 -6 477 7 436 6 477 - - Total - - -17 028 -16 203 -17 028 -16 203 Deferred tax asset was not posted for the following items (tax base): in TEUR 31.10.2023 31.10.2022 Provisions and liabilities 114 - Total 114 - Deferred tax asset from unredeemed losses from previous periods is posted only up to the amount to which it may be probably redeemed in the future against future tax profits. Expected last periods for redemption of tax losses are as follows: in TEUR 2024 2025 2026 post 2026 Tax losses 892 - - - Based on the legislative change, the tax loss can be deducted from the tax base for 2023 as follows: • for the year 2019 - in the amount of ¼, • for the year 2020 - in any amount, but not more than 50% of the tax base of the current year, • For the year 2021 – in any amount, but not more than 50 % of the tax base of the current year. • For the year 2022 – in any amount, but not more than 50 % of the tax base of the current year. 234 Separate Financial Statements Inventory in TEUR 31.10.2023 31.10.2022 Goods 1 435 947 Material 1 815 1 107 Chalets and apartments developed for sale 3 958 575 Total 7 208 2 629 Chalets and apartments for sale worth EUR 3,958 thousand are apartments under construction in the Centrum Jasná complex in the value of EUR 3,813 thousand and recreational objects in the cottage settlement Bobrovečky in the value of EUR 145 thousand, the construction of which the Company carries out and subsequently plans to sell to third parties. Revenue from the sale of recreational objects will be recognized in 2024 or later. As at 31 October 2022 chalets and apartments for sale worth EUR 575 thousand are recreational objects in the cottage settlement Bobrovečky 1, the construction of which the Company carries out and subsequently plans to sell to third parties. Revenue from the sale of recreational objects will be recognized in 2023 or later. These are 16 recreational objects in the cottage settlement Bobrovečky 1, Liptovská Ondrášová. In the period from 1 November 2022 to 31 October 2023, inventories amounting to EUR 13,935 thousand (from 1 November 2021 to 31 October 2022: EUR 9,633 thousand) were recognized as an expense during the year and included in the income statement. The Company did not recognize any write-down of inventories in the reporting and comparative period. Security As at 31 October 2023, inventory of EUR 7,208 thousand (as at 31 October 2022: EUR 2,629 thousand) was used to secure bank loans and bonds. Loans Provided in TEUR 31.10.2023 31.10.2022 Short-term 176 031 182 439 Long-term 11 484 23 351 Total 187 515 205 790 Impairment allowance -30 035 -22 562 Total with allowance 157 480 183 228 As at 31 October 2023 in accordance with the rules of IFRS 9, the value of the impairment allowance for loans provided was EUR 2,874 thousand (as at 31 October 2022: EUR 3,709 thousand). The value of specific impairment allowance for short-term loans to subsidiaries - Ślaskie Wesole Miasteczko Sp. z o.o./ TMR Parks, a.s. in the amount of EUR 26,171 thousand (as at 31 October 2022: EUR 17,894 thousand) and the value of the specific impairment allowance for the granted loan against a third party was EUR 990 thousand. (as of 31 October 2022: EUR 959 thousand). Table below summarizes long-term loans as at 31 October 2023 and 31 October 2022. As at 31 October 2023, the weighted average interest rate applied on the long-term loans was 4,34% p.a. (as at 31 October 2022: 4.68% p.a.). 235 Separate Financial Statements in TEUR 31.10.2023 31.10.2022 Debtor Interest rate type Loan value Loan value Eurocom Investment 4,75% p.a. 10 239 11 781 MELIDA a.s. 0% 892 894 Desať s.r.o. 0% 210 - OSTRAVICE HOTEL a.s. 4% p.a. 143 - Mölltaler Gletscherbahnen Gesellschaft GmbH & Co KG 5% p.a. - 10 498 WORLD EXCO, s.r.o. 4,75% p.a. - 178 Total long-term provided loans 11 484 23 351 For more information on credit risk management, see Note 40 – Information on Risk Management, Credit Risk section. Table below summarizes short-term loans as at 31 October 2023 and 31 October 2022. As at 31 October 2023, the weighted average interest rate applied on the short-term loans was 5,51% p.a. (as at 31 October 2022: 5.45% p.a.). in TEUR 31.10.2023 31.10.2022 Debtor Interest rate type Loan value Loan value Szczyrkowski Ošrodek Narciarski S.A. 7% p.a. 40 249 36 941 TMR Parks a.s. - 32 725 35 725 TMR Parks a.s. 7% p.a. 30 354 28 692 Ślaskie Wesole Miasteczko Sp. z o. o. 6% p.a. 28 342 27 142 Ślaskie Wesole Miasteczko Sp. z o. o. 7% p.a. 21 733 19 902 Szczyrkowski Ošrodek Narciarski S.A. 7% p.a. 6 519 5 454 Ślaskie Wesole Miasteczko Sp. z o. o. 7% p.a. 3 608 3 227 Tatry mountain resorts ČR a.s. 7% p.a. 3 334 2 537 TMR Finance Č R a.s. 7% p.a. 1 830 - Korona Ziemi Sp. z o.o. 7% p.a. 1 763 1 615 Ślaskie Wesole Miasteczko Sp. z o. o. 7% p.a. 1 263 1 193 SON Partner 7% p.a. 1 077 963 Thalia s.r.o. 5% p.a. 1 076 1 033 Muttereralm Bergbahnen Errichtungs GmbH 5% p.a. 1 001 468 TMR Ještěd a.s. 7% p.a. 536 - Tatry mountain resorts AT GmbH 5% p.a. 366 349 TMR Finance Č R a.s. 4,51% p.a. 255 205 Mölltaler Gletscherbahnen Gesellschaft GmbH & Co KG 7% p.a. - 9 122 TMR Ještěd a.s. 7% p.a. - 3 743 TMR Ještěd a.s. 7% p.a. - 2 955 TMR Ještěd a.s. 7% p.a. - 901 OSTRAVICE HOTEL a.s. 4% p.a. - 138 P.M.I.R a.s. 5% p.a. - 132 Other 4% p.a. - 2 Total short-term provided loans 176 031 182 439 * These items represent bills of exchange. 236 Trade Receivables in TEUR 31.10.2023 31.10.2022 Trade receivables 4 076 2 657 Impairment allowance to receivables -115 -233 Total 3 961 2 424 Short-term 3 961 2 424 Long-term - - Total 3 961 2 424 As at 31 October 2023, trade receivables amount to EUR 3,961 thousand and comprise current operating receivables. As at 31 October 2022, trade receivables involved current operating receivables amounting to EUR 2,424 thousand. The ageing structure of receivables is as follows: in TEUR 31.10.2023 31.10.2022 Gross Impairment allowance Net Gross Impairment allowance Net Within due period 3 942 -98 3 844 2 267 -55 2 212 Overdue within 30 days 103 -2 101 136 -3 133 Overdue from 30 days to 180 days 18 -2 16 54 -36 18 Overdue from 180 days to 365 days - - - 76 -15 61 Overdue over 365 days 13 -13 - 123 -123 - Total 4 076 -115 3 961 2 656 -232 2 424 As at 31 October 2023 and 31 October 2022, the amount of impairment allowance is related to current operating receivables. Development of impairment allowance during accounting period is shown in the following overview: in TEUR 31.10.2023 31.10.2022 Balance as at 1.11.2022 / 1.11.2021 233 193 Creation of value adjustment 26 71 Use -26 -25 Reversal of value adjustment -118 -7 Balance as at 31.10.2023 / 31.10.2022 115 232 Security As at 31 October 2023, trade receivables in amount of EUR 3,691 thousand (as at 31 October 2022: EUR 2,424 thousand) were used to secure bank loans and bonds. Separate Financial Statements 237 Other Receivables in TEUR 31.10.2023 31.10.2022 Advance payments made 1 510 4 051 Total 1 510 4 051 Short-term 1 349 3 923 Long-term 161 128 Total 1 510 4 051 The advances provided, in the total value of EUR 1,510 thousand, are mainly made up of advances for supplies and services received (as at 31 October 2022: EUR 4,051 thousand). The decrease in short-term advances provided, compared to the value as at 31 October 2022, is mainly due to the settlement of advances granted in the immediately preceding accounting period in connection with the construction of the Biela Púť – Priehyba cable car and the Centrum Jasná complex, as well as the reconstruction of cottages in the Holiday Village Tatralandia cottage area. Assets held for sale and liabilities directly associated As at 31 October 2023 or as at 31 October 2022, the Company did not disclose any assets held for sale or any related liabilities. Other Assets in TEUR 31.10.2023 31.10.2022 Prepaid expenses and accrued income 2 050 1 563 Finance sublease receivables 46 97 Derivative operations - currency SWAP - 254 Other assets 2 665 2 419 Impairment allowance -16 -16 Total 4 745 4 317 Short-term 4 745 4 268 Long-term - 49 Total 4 745 4 317 Other assets in the total value of EUR 2,665 thousand mainly represent a receivable from Penzión Energetik s.r.o.. Based on an assignment contract and set-off agreement, the Company records a receivable against Penzión Energetik s.r.o. in the amount of EUR 1,994 thousand as at 31 October 2023 (31 October 2022: EUR 1,994 thousand). As at 31 October 2023, derivative operations – currency SWAP represent fair value of the derivative in amount of EUR 0 thousand, accounting for security was completed during the current period (as at 31 October 2022: in the amount of EUR 254 thousand). For more information, see Note 33 – Hedge accounting. As at 31 October 2023, in accordance with the rules of IFRS 9, the impairment allowance for other assets amounted to EUR 16 thousand (as at 31 October 2022: EUR 16 thousand). Separate Financial Statements 238 Financial Investments in TEUR 31.10.2023 31.10.2022 Financial instruments measured at fair value through profit or loss 36 36 Total 36 36 As at 31 October 2023 the financial investments in the amount of EUR 36 thousand represent a share in the company Tatranské družstvo (as of 31 October 202 2: EUR 36 thousand). Cash and Cash Equivalents in TEUR 31.10.2023 31.10.2022 Cash 8 10 Meal vouchers 23 31 Current accounts with banks 4 312 5 293 Impairment allowance -2 -2 Total 4 341 5 332 As at 31 October 2023, the Company created impairment allowance of EUR 2 thousand in light of IFRS 9 expected credit loss changes (as at 31 October 2022: EUR 2 thousand). The Company has cash and cash equivalents that are deposited in banks and financial institutions that have been awarded a credit rating between A2 to Baa2 by recognized rating agencies. Security The Company can freely dispose of bank accounts. Equity Share capital and share premium As at 31 October 2023 and 31 October 2022, the approved, subscribed and fully paid-up share capital consisted of 6,707,198 ordinary shares in the nominal value of 7 EUR per share. The emission of shares is marked by ISIN: SK1120010287. As at 31 May 2023, an ordinary general assembly of Tatry mountain resorts, a.s. was held. The general assembly decided, among other things, on the settlement of profit Tatry mountain resorts, a.s. generated in the period between 1 November 2021 and 31 October 2022 according to the financial statements compiled for that accounting period, in the amount of EUR 3,287 thousand as follows: - Allocation to the legal reserve fund in the amount of EUR 329 thousand, - Allocation to the social fund on the basis of a collective agreement in the amount of EUR 16 thousand, - The balance in the amount of EUR 2,942 thousand transfer to retained earnings of previous period. Shareholders have a right to the payment of dividends, and the value of share vote in the Company general meeting is determined as a ratio of the value of one share and the total value of share capital. The following table presents the Company shareholders and the number of shares, ownership interest and voting rights. Separate Financial Statements 239 31 October 2023 Number Ownership Ownership Voting of shares interest interest rights in TEUR % % C.I. CAPITAL INDUSTRIES LIMITED 1 973 197 13 812 29.4% 29.4% FOREST HILL COMPANY, s.r.o. 1 030 919 7 216 15.4% 15.4% RMSM1 LIMITED 992 666 6 949 14.8% 14.8% DIAMCA INVESTMENTS LIMITED 918 780 6 431 13.7% 13.7% Minority shareholders 1 791 636 12 541 26.7% 26.7% Total 6 707 198 46 950 100% 100% 31 October 2022 Number Ownership Ownership Voting of shares interest interest rights in TEUR % % C.I. CAPITAL INDUSTRIES LIMITED 1 973 197 13 812 29.4% 29.4% FOREST HILL COMPANY, s.r.o. 1 030 919 7 216 15.4% 15.4% NEEVAS INVESTMENTS LIMITED 992 666 6 949 14.8% 14.8% STOCKLAC LIMITED 800 000 5 600 11.9% 11.9% RMSM1 LIMITED 404 486 2 831 6.0% 6.0% Minority shareholders 1 505 930 10 542 22.5% 22.5% Total 6 707 198 46 950 100% 100% Profit / (loss) per share 31.10.2023 31.10.2022 Profit / (loss) for the period in TEUR 2 712 3 287 Weighted average number of ordinary shares 6 707 198 6 707 198 Basic and diluted earnings per share in EUR 0,404 0,490 Legal reserve fund As at 31 October 2023, the legal reserve fund amounts to EUR 7,347 thousand (as at 31 October 2022: 7,018 thousand). According to the Slovak legislation, the creation of legal reserve fund is compulsorily created on a yearly basis in the minimum amount of 10% of the Company net profit and at least up to 20% of subscribed share capital (cumulatively). The legal reserve fund can only be used for the payment of Company losses and cannot be used for the payment of dividends. The calculation of reserve fund is made according to Slovak legal regulations. Profit (Loss) Distribution For the fiscal year ended on 31 October 2023 , the Company’s management proposes the distribution of total profit in the amount of EUR 2,712 thousand as follows: − Allocation to the legal reserve fund of EUR 271 thousand, − Allocation to the social fund on the basis of a collective agreement in the amount of EUR 13 thousand, − Balance of EUR 2,428 thousand transfer to retained earnings of previous periods. Separate Financial Statements 240 240 Loans and Borrowings in TEUR 31.10.2023 31.10.2022 Loans and borrowings received 106 576 165 589 Total 106 576 165 589 Short-term 27 018 78 317 Long-term 79 558 87 272 Total 106 576 165 589 Creditor Interest rate type Maturity date Unpaid amount as at 31.10.2023 in TEUR J&T BANKA, a.s. 3M EURIBOR + 4.75% 31.12.2029 33 748 J&T BANKA, a.s. 3M EURIBOR + 4.75% 31.12.2026 20 377 J&T BANKA, a.s. 3M EURIBOR + 5.25% 31.12.2026 20 121 EUROCOM Investment s.r.o. 4% p.a. On demand within 15 days 15 766 J&T BANKA, a.s. 3M EURIBOR + 4.75% 31.12.2026 12 225 Ślaskie Wesole Miasteczko Sp. z o. o. 7% p.a. 31.12.2023 4 339 Total 106 576 Creditor Interest rate type Maturity date Unpaid amount as at 31.10.2022 in TEUR TMR Finance Č R, a.s. 4.51% p.a. 30.11.2022 60 894 J&T BANKA, a.s. 3M EURIBOR + 4.75% 31.12.2029 38 116 J&T BANKA, a.s. 3M EURIBOR + 4.75% 31.12.2026 21 494 J&T BANKA, a.s. 3M EURIBOR + 5.25% 31.12.2026 20 116 EUROCOM Investment s.r.o. 4% p.a. On demand within 15 days 11 285 J&T BANKA, a.s. 3M EURIBOR + 4.75% 31.12.2026 9 418 Ślaskie Wesole Miasteczko Sp. z o. o. 7% p.a. 31.12.2023 4 147 GOPASS SE - 31.12.2032 119 Total 165 589 The weighted average of interest rates for loans and borrowings as at 31 October 2023 accounted for 8.03 % (as at 31 October 2022: 5,36 %). The interest is due on a quarterly basis. For more information, see Note 12 – Finance Income and Expense. On 2 December 2018 the Company drawn new loan from TMR Finance Č R, a.s. in the total amount of EUR 58,773 thousand. The outstanding balance of this loan amounted to EUR 60,894 thousand as of 31 October 2022. On November 4, 2022, this loan was repaid. Separate Financial Statements 241 As at 31 October 2023, the total outstanding unpaid amount of the loans to J&T Bank represents the amount EUR 86,471 thousand (as at 31 October 2022: EUR 89,144 thousand). As at 30 March 2022, the Company drew funds from a syndicated loan from J&T Banka and thus refinanced its previous loans from J&T Banka and 365.bank, the value of which was EUR 62,396 thousand as at 31 October 2021. The funds provided served primarily as a loan to a subsidiary TMR Parks, a.s. to cover the purchase price for the transfer of EUROCOM Investment, s.r.o. shareholding of EUR 10,000 thousand, the refinancing of loans in the acquired companies EUROCOM Investment, s.r.o. and WORLD EXCO s.r.o. in the amount of EUR 11,651 thousand and the construction of the Biela púť - Priehyba cableway. On 7 October 2019, the Company signed a short-term loan agreement with EUROCOM Investment, s.r.o. The amount of the loan was gradually increased to EUR 14,500 thousand by several amendments (as at 31 October 2021: EUR 10,500 thousand). The outstanding balance of the loan at the balance sheet date amounts to EUR 15,766 thousand (as at 31 October 20212: EUR 11,285 thousand). As at 31 October 2023, the Company has committed to meet the covenants – Leverage, DSCR and LTV. The Leverage covenant may not exceed 7.75. The DSCR covenant may not be less than 1.1 and the LTV covenant may not exceed 60%. However, failure to meet the LTV ratio does not affect the maturity of the debt, only the amount of security. The Company evaluated fulfillment of covenants as at 31 October 2023. Covenants Leverage, DSCR abd LTV which evaluation is due within the dates of issuing the consolidated financial statements were met. Security The following assets were used as a security of bank loans and bonds: land, technology and operating buildings of mountain lift facilities: lifts, chair-lift rope ways (hereinafter: RWs), funicular RWs, aerial RWs, gondola RWs, substations, economic buildings and structures: Grandhotel Praha, Hotel Grand Jasná, Hotel Tri Studničky, Hotel Srdiečko, Hotel Kosodrevina, Hotel Liptov, Hotel SKI, former telecommunications building. All movable assets of the centres Jasná and High Tatras are put into pledge, also including trade receivables. As at 31 October 2023, lots of land, buildings and equipment, property investments, inventory and receivables of EUR 239,221 thousand were used as a security of bank loans and bonds (as at 31 October 2022: in the amount of EUR 234,557 thousand). Separate Financial Statements 242 Lease Liabilities in TEUR Opening balance as at 1.11.2021 37 220 Additions 25 066 Modifications 1 782 Interest 2 659 Lease payments -7 066 Balance as at 31.10.2022 59 661 Short-term 7 760 Long-term 51 901 Total 59 661 Additions 2 199 Modifications 4 724 Interest 3 724 Lease payments -7 287 Balance as at 31.10.2023 63 021 Short-term 7 566 Long-term 55 455 Total 63 021 The maturity of lease liabilities is as follows: in TEUR 31.10.2023 31.10.2022 Less than 1 year 7 566 7 767 1 - 5 years 16 563 14 064 Above 5 years 38 892 37 830 Total 63 021 59 661 Separate Financial Statements 243 Separate Financial Statements Trade Payables and other payables in TEUR 31.10.2023 31.10.2022 Trade payables 8 991 7 705 Liabilities towards employees and social security institutions 6 877 5 706 Unbilled deliveries 2 886 2 513 Total 18 754 15 924 Short-term 17 890 14 755 Long-term 864 1 169 Total 18 754 15 924 As at 31 October 2023, liabilities towards employees and social security institutions are mainly provision for bonuses for the economic year from 1 November 2022 to 31 October 2023 in the amount EUR 1,762 thousand (as at 31 October 2022: EUR 1,744 thousand), wage liabilities to employees and social security institutions are in the amount EUR 4,266 thousand (as at 31 October 2022: EUR 3,172 thousand) and provision for unused vacations in the amount EUR 774 thousand (as at 31 October 2022: EUR 750 thousand). The creation and usage of the Social Fund during the accounting period are shown in the following overview: in TEUR 31.10.2023 31.10.2022 Balance as at 1.11.2022 / 1.11.2021 10 -3 Creation of social fund against expenses 128 86 Drawing -84 -73 Balance as at 31.10.2023 / 31.10.2022 54 10 As at 31 October 2023, long-term liabilities in the amount EUR 864 thousand (as at 31 October 2022: EUR 1,169 thousand) are mainly retention fees against suppliers for the construction of the Centrum Jasná complex and the Biela Púť - Priehyba cableway. As at 31 October 2023, overdue liabilities amounted to EUR 1,769 thousand (as at 31 October 2022: EUR 922 thousand). Overdue liabilities as at 31 October 2023 represent primarily unpaid retention fees due to signed construction contracts with suppliers for their performed and realised construction of individual buildings, in some cases repayment schedules are agreed with suppliers. Hedge Accounting The Company applied cash-flow hedges and hedges only against foreign currency risk. Since the Company took out a loan from the Czech subsidiary, the Company has opened a position in CZK . The Company decided to manage the foreign currency risk against the Czech Crown on this particular instrument by hedging against changes in foreign currency exchange rates – currency swap. On 4 November 2022, according to the repayment schedule, a loan from TMR Finance Č R, a.s. was fully repaid, the total value of which as at 31 October 2022 amounted to EUR 60,894 thousand. At the same time, accounting regarding cash- flow hedges against foreign currency risk was completed. The hedging instrument had a fixed maturity in November 2022 for the entire nominal value of EUR 57.9 million. The forward rate used for hedging was 25.870 CZK / 1 EUR. 244 The total profit from hedging derivates in the Comprehensive income is in the amount of EUR 2,602 thousand (as at 31 October 2022: loss EUR 1,103 thousand). The Company does not currently have any risks hedged through hedge accounting, as they are managed otherwise. Please refer to Note related to financial risks for further information. For the comparative period from 1 November 2021 to 31 October 2022, the impact of hedging instrument and hedged instrument on statement of financial position was as follows: The Company does not currently have any risks hedged through hedge accounting, besides the foreign currency risk arising from the above mentioned instrument, as they are managed otherwise. Please refer to section financial risks for further information. The hedged item is a long-term bullet-payment loan denominated in CZK provided by a Czech subsidiary with a fixed repayment schedule. Hedging instrument is a Foreign currency swap, swapping the CZK repayments on the loan exposure for repayments in EUR, retaining the fixed nature of interest rates in both currencies. There is an economic relationship between the hedged items and the hedging instruments as the terms of the foreign exchange and swap contracts match the terms of the loan (nominal value and repayment schedules). The Company has established a hedge ratio of 1:1 for the hedging relationships as the underlying risk of the foreign exchange swap contracts are identical to the hedged risk components. As the terms of the swap copy the terms of the loan (nominal value and repayment schedules), the Company expects the hedging relationship to be effective to a high degree. The hedge inefficiencies can arise when the Company ceases to adhere to the repayment schedule. The Company expects to repay the loan in accordance with the repayment schedule. Hedging Instrument profile – the hedging instrument has a fixed maturity in November 2022 for the entire nominal value of EUR 57.9 million. The forward rate used for hedging is 25.870 CZK / 1 EUR. In ‘000 EUR Notional amount Carrying amount Line item in statement of financial position Changes in FV used for measuring ineff. Foreign exchange swap 57 943 254 Other assets 1 532 In ‘000 EUR Change in fair value used for measuring ineffectiveness. Cash flow hedge reserve Cost of hedging reserve Foreign exchange swap -1 532 -2 602 0 Separate Financial Statements 245 In ‘000 EUR Total hedging gain/(loss) recognised in OCI Ineffectiveness recognised in profit or loss Line item in the statement of profit or loss Cost of hedging recognised in OCI Amount reclassified from OCI to profit or loss Line item in the statement of profit or loss Foreign exchange swap -1 103 0 - 0 379 Interest income calculated using the effective interest rate and Interest expense 2 865 Profit / (loss) from financial operations, net Contract liabilities in TEUR 31.10.2023 31.10.2022 Advances received 7 288 5 818 Deferred revenue 1 311 3 859 Discounts from purchases 384 384 Total 8 983 10 061 Short-term 8 983 10 061 Long-term - - Total 8 983 10 061 As at 31 October 2023, the advances received mainly represent advances received for hotel accommodation in the amount of EUR 3,958 thousand (as at 31 October 2022: EUR 2,511 thousand), advance on the purchase price in connection with the construction of the water structure Pump station and transformer stations – Otupné, which the Company constructs, in the amount of EUR 3,000 thousand (as at 31 October 2022: EUR 3,000 thousand) and advances for the purchase of cottages in the amount of EUR 109 thousand (as at 31 October 2022: EUR 265 thousand). As at 31 October 2023, the amount of deferred revenue is mainly represented by an amount of EUR 672 thousand for the accrual of the ski passes sold. As of 31 October 2022, accrued revenues mainly amounted to EUR 3,485 thousand for accruals of season ski passes sold – “Šikovná sezónka” Separate Financial Statements 246 Other Liabilities in TEUR 31.10.2023 31.10.2022 Liabilities to shareholders from reduction in share capital 213 213 Contingent consideration 954 884 Other 563 1 141 Value added tax liabilities 450 652 Government grants 504 527 Total 2 684 3 417 Short-term 1 730 2 533 Long-term 954 884 Total 2 684 3 417 As at 31 October 2023, liabilities to shareholders from reduction in share capital represent the amount EUR 213 thousand (as at 31 October 2022: EUR 213 thousand) and comprise mainly the remaining liability from the capital reduction in 2013 in total amount EUR 174,388 thousand. As at 31 October 2023, the contingent consideration in the amount EUR 954 thousand (as at 31 October 2022: EUR 884 thousand) represents the part of the purchase price for the subsidiary Muttereralm Bergbahnen Errichtungs GmbH (see also point 19 – Investments in Subsidiaries), which is contingent on the seller fulfilling the contractually stipulated conditions. Governments grants are as at 31 October 2023, in the total value EUR 504 thousand, of which the amount EUR 432 thousand represents the grant for the construction of the cable car Furkotka in the Štrbské Pleso ski resort (as at 31 October 2022: EUR 453 thousand) and the amount EUR 72 thousand represents the grant for the Tri studničky hotel (as at 31 Octobter 2022: EUR 74 thousand). Details of movement of government grants are presented in the table below: in TEUR 31.10.2023 31.10.2022 Balance as at 1.11.2022 / 1.11.2021 527 550 Received during the year 890 576 Released to the statement of profit and loss and other comprehensive income -913 -599 Balance as at 31.10.2023 / 31.10.2022 504 527 State aid related to energy was received during the financial year 2023 in the amount of EUR 890 thousand. This is short- term state aid that has been recognized in the statement of comprehensive income as income during the period in which the related costs to be reimbursed are recorded. (State aid related to COVID-19 was received during the financial year 2022 in the amount of EUR 576 thousand. This is short-term state aid that has been recognized in the statement of comprehensive income as income during the period in which the related costs to be reimbursed are recorded.) In the period from 1 November 2022 to 31 October 2023 the state aid was recognized in the statement of comprehensive income in the amount EUR 913 thousand (as at 31 October 202: EUR 599 thousand). For more details see Note 8 - Purchased Services and Note 9 - Personnel Expenses. Separate Financial Statements 247 Details of government grants recognised in the statement of other comprehensive income are presented in the table: in TEUR 1.11.2022 - 31.10.2023 1.11.2021 - 31.10.2022 State aid related to rental costs - 206 State aid related to wages and salaries - 370 State aid related to other costs 913 23 Total 913 599 Provisions in TEUR 31.10.2023 31.10.2022 Opening balance as at 1.11.2022 137 24 Creation of provisions during the year 61 113 Use of provisions during the year -113 - Balance as at 31.10.2023 85 137 31.10.2023 31.10.2022 Short-term - - Long-term 85 137 Total 85 137 Bonds Issued On 10 October 2018, the Company issued the third bond issue in the total value of EUR 90,000 thousand. In February 2021, the Company issued new TMR V bonds in the total value of up to EUR 150 million, at an interest rate of 6% p.a. and with a maturity date in 2026. On 28 October 2022, the Company issued TMR VI bonds up to a maximum of EUR 65,000 thousand with an interest rate of 5.4% p.a. and maturity in 2027. A total of EUR 59,000 thousand worth of bonds were traded. On 28 October 2022, EUR 1,552 thousand worth of bonds were traded. On 3 November 2022, bonds of the TMR VI issue were traded in the amount of EUR 57,448 thousand. Separate Financial Statements 248 Details of the individual bonds at the end of the current and immediately preceding financial year are presented in the table below: All three bonds represent a book-entry security in bearer form, and their issue was approved by the National Bank of Slovakia. Covenants Issue of TMR III - The Company has committed that, until all of its monetary obligations under the Bonds have been met, the Net Senior Debt to Modified EBITDA (Leverage) ratio will not exceed 8. If the indicator is not met, owners who own at least 10% of the nominal value of issued and outstanding bonds can request that a meeting be called to vote on the possibility of exercising the right to demand early maturity of bonds. The Company has also committed to the LTV ratio, this indicator may not be higher than 70%. However, failure to meet the LTV ratio does not affect the maturity of the debt only the amount of security. Issue of TMR V does not include conditions causing its immediate repayment. At the same time, the Company is entitled under certain conditions to postpone payment of interest. Issue of TMR VI - The Company has committed that until all of its monetary obligations under the Bonds have been satisfied, the LTV ratio may not be higher than 70%. However, failure to meet the LTV indicator does not affect the maturity of the debt only the amount of security. The Company evaluated fulfillment of covenants as at 31 October 2023. The covenants which evaluation is due within the dates of issuing the separate financial statements were met. All of the three issues are associated with regular payment of the coupon which is provided by the Company from its own resources. Out of the total value of liability of EUR 261,264 thousand (as at 31 October 2022: EUR 203,604 thousand), the short- term part is EUR 94,621 thousand, comprising EUR 89,718 thousand, the liability from the TMR III issue due on 10 October 2024 and the coupon liability in the amount of EUR 5,108 thousand, payable in the 12 months in TEUR ISIN Date of issue Maturity date Currency of the issue Face value of the issue in the initial currency in '000 Interest rate p.a. in % Effective interest rate p.a. in % Carrying value as at 31.10.2023 Carrying value as at 31.10.2022 Name TMR III 4.40%/2024 SK4120014598 10.10.2018 10.10.2024 EUR 90 000 4.4 4.940 89 718 89 229 TMR V 6.00%/2026 SK4000018255 2.2.2021 2.2.2026 EUR 110 000 6.0 6.697 113 601 113 091 TMR VI 5.40%/2027 SK4000021713 28.10.2022 28.10.2027 EUR 59 000 5.4 5.924 57 945 1 284 Total 261 264 203 604 Short-term 94 621 5 108 Long-term 166 643 198 496 Total 261 264 203 604 Separate Financial Statements 249 after 31 October 2023 (as of 31 October 2022: EUR 5,108 thousand, which includes a coupon liability payable in the 12- month period after 31 October 2022). Security As at 31 October 2023 right of lien (“Pledge”) for the issued TMR III and TMR VI bonds on the property, movable assets and part of receivables owned by the Company, in the total amount of EUR 112,820 thousand. It is property that is not used as a security for other Company ’s liabilities. Information about the Fair Value The following table contains information about the book value and fair value of Company financial assets and liabilities, that are not accounted for at fair value: in TEUR Carrying value Fair value 31.10.2023 31.10.2022 31.10.2023 31.10.2022 Financial assets Loans provided 22 157 480 183 228 155 719 179 276 Total 157 480 183 228 155 719 179 276 in TEUR Carrying value Fair value 31.10.2023 31.10.2022 31.10.2023 31.10.2022 Financial liabilities Bonds issued 37 261 264 203 604 259 746 201 752 Total 261 264 203 604 259 746 201 752 The table does not present financial instruments for which the carrying amount is considered to be an approximation of fair value. Changes in Liabilities Arising from Financial Activities in TEUR 1 November 2022 Additions / Drawings Payment Interest accrued in the current period Impact of cash-flow hedge Other 31 October 2023 Loans and borrowings 165 589 7 928 -72 960 7 186 -127 -1 040 106 576 Lease liabilities 59 661 6 923 -7 287 3 724 - - 63 021 Bonds issued 203 604 56 457 -13 744 14 900 - 47 261 264 Total liabilities from financing activities 428 854 71 308 -93 991 25 810 -127 -993 430 861 Separate Financial Statements 250 in TEUR 1 November 2021 Additions / Drawings Payment Interest accrued in the current period Impact of cash-flow hedge Other 31 October 2022 Loans and borrowings 132 408 37 023 -13 505 6 727 2 833 103 165 589 Lease liabilities 37 220 26 848 -7 066 2 659 - - 59 661 Bonds issued 201 438 1 518 -10 560 11 457 - -249 203 604 Total liabilities from financing activities 371 066 65 389 -31 131 20 843 2 833 2 687 428 854 In case of loans and borrowings, the category Other represents the impact of foreign currency loan hedge (see also Note 33 – Hedge accounting). In case of issued bonds, the category Other represents administrator’s fee for bond issuance administration. Information on Risk Management This section provides details of risks to which the Company is exposed, and the method of management of the risks. The Company is exposed to risks in the following areas: - Credit Risk - Liquidity Risk - Market Risk - Operational Risk The management is generally responsible for setting and control of Company risk management. Credit Risk The Company is exposed to this risk mainly with respect to trade receivables, lease receivables, other receivables, advance payments and loans provided. The volume of exposure to this risk is expressed as the book value of these assets in the balance sheet in case that no form of guarantees is provided. The book value of receivables, advance payments and loans provided expresses the highest possible book loss that would have been posted if the counterpart completely fails in performing its contractual obligations, and all securities and guarantees would have a zero value. Therefore, this value far exceeds the expected losses which are included in the provisions for irrecoverable debts. Before signing major contracts, the Company board at regular board meetings evaluates credit risk related to counterpart. In case of identifying significant risks, the Company withdraws from signing the contract. Loans provided The Company assigns a degree of credit risk to loans provided on the basis of data that is expected to predict credit risk (including but not limited to external ratings, financial statements, management accounts and cash flow projections and available counterparty press releases), potential days past due and applying experienced credit judgment. The grades of credit risk are defined by qualitative and quantitative factors that indicate the risk of default and are consistent with external credit rating definitions from credit rating agencies such as Moody's and Standard & Poors. The probability of default is then assigned based on historical data collected by these agencies. Separate Financial Statements 251 The default loss (LGD) parameters generally reflect an expected rate of return of 40%, except when the loan is reduced by a loan. Probability of default (PD) Loss Given Default (LGD) Carrying amount Impairment allowance (ECL) 1.99% - 6.90% 40% 101,139 -2,873 As at 31 October 2023, loans provided were classified as Stage 2 for a total amount of EUR 86,376 thousand (31 October 2022: EUR 81,189 thousand), for which an impairment allowance of EUR 27,161 thousand (31 October 2022: EUR 18,852 thousand) has been created. Sensitivity analysis If the borrower's credit quality has changed, the probability of default would also change. If PD increased by 10%, ECL would increase by EUR 287 thousand. If PD decreased by 10%, ECL would decrease by EUR 287 thousand. The Company also takes into account the differences between the economic conditions during the period in which the historical data were collected, the current conditions and the Company's view of the economic conditions over the expected life of the loan. As at 31 October 2023, the Company was exposed to the following credit risk: in TEUR Legal entities Banks Other financial institutions Other Total Financial assets Loans provided 157 480 - - - 157 480 Other receivables 154 - - - 154 Trade receivables 3 961 - - - 3 961 Cash and cash equivalents - 4 310 - 31 4 341 Other Assets 2 325 - 227 - 2 552 Total 163 920 4 310 227 31 168 488 As at 31 October 2022, the Company was exposed to the following credit risk: in TEUR Legal entities Banks Other financial institutions Other Total Financial assets Loans provided 183 226 - - 2 183 228 Other receivables 248 - - - 248 Trade receivables 2 424 - - - 2 424 Cash and cash equivalents - 5 291 - 41 5 332 Other Assets 2 220 254 156 8 2 638 Total 188 118 5 545 156 51 193 870 Separate Financial Statements 252 Liquidity Risk Liquidity risks arise within general financing of the Company and management of financial positions. It covers the risk of insolvency regarding the financing of assets within the agreed maturity period and at the interest rate, and also the risk of asset management at a reasonable price within an adequate timeframe. The Company management focuses on liquidity management and monitoring. Due to liquidity management, the management determined the accounting period for a fiscal year ended on 31 October. In the first half of its accounting period, the Company has a winter season, which represents 60% of Company’s income. According to the trend in the first half-year, the Company can affect the side of revenues and expenses sufficiently early, so that they are able to keep sufficient liquidity for Company’s operation. In the High Tatras centre, the seasonal nature is also balanced with a strong summer season, which ensures its more stable liquidity all year round. The following table presents an analysis of Company financial assets and liabilities grouped by the residual maturity. The analysis presents the most prudent variant of residual maturity including interest, based on contracted terms. Therefore, for liabilities, the earliest possible repayment is reported, and for assets, the latest possible repayment is reported. Assets and li abilities which have no maturity are posted in the category “Without specification“. As at 31 October 2023, the Company had financial assets and liabilities with the following remaining maturities: in TEUR Carrying value Future cash flow Up to 3 months 3 months up to 1 year 1 year up to 5 years Above 5 years Without specification Financial assets Loans provided 157 480 187 516 142 231 33 801 10 592 892 - Other receivables 154 154 154 - - - - Trade receivables 3 961 4 076 4 076 - - - - Cash and cash equivalents 4 341 4 343 4 343 - - - - Other assets 2 552 2 580 2 580 - - - - Total 168 488 198 669 153 384 33 801 10 592 892 - Financial liabilities Loans and borrowings -106 576 -129 596 -23 505 -10 073 -87 323 -8 695 - Lease liabilities -63 021 -141 914 -1 916 -11 800 -43 847 -84 352 - Bonds issued -261 264 -295 504 - -103 746 -191 758 - - Trade payables and other payables -11 485 -11 485 -11 485 - - - - Contract liabilities - - - - - - - Other liabilities -1 580 -1 579 -447 - -1 132 - - Total -443 926 -580 078 -37 353 -125 619 -449 679 -93 047 - As at 31 October 2023 the loans provided up to 1 year amount to EUR 175,309 thousand (as at 31 October 2022: EUR 182,439 thousand), a majority of which is payable on demand or by the end of October 2024. The Company does not anticipate repaying these loans within 1 year and plans to require the repayment of these financial resources based on the needs for the purposes of financing the investment activity and acquisition. The expected drawdown of the loan provided is within 3 years. For securing sufficient liquidity shortly after the end of the accounting period the Company has increased an overdraft from J&T Bank and also decided to issue bond which will be used to refinance the bond due for repayment in 2024. Separate Financial Statements 253 As at 31 October 2022, the Company had financial assets and liabilities with the following remaining maturities: in TEUR Carrying value Future cash flow Up to 3 months 3 months up to 1 year 1 year up to 5 years Above 5 years Without specification Financial assets Loans provided 183 228 205 791 118 399 64 040 11 959 11 393 - Other receivables 248 248 248 - - - - Trade receivables 2 424 2 657 2 657 - - - - Cash and cash equivalents 5 332 5 333 5 333 - - - - Other assets 2 638 2 646 2 556 90 - - - Total 193 870 216 675 129 193 64 130 11 959 11 393 - Financial liabilities Loans and borrowings -165 589 -183 233 -74 893 -7 544 -86 100 -14 697 - Lease liabilities -59 661 -132 534 -2 195 -11 126 -38 800 -80 413 - Bonds issued -203 604 -236 291 - -10 644 -225 647 - - Trade payables and other payables -9 835 -9 835 -9 835 - - - - Contract liabilities - - - - - - - Other liabilities -2 098 -1 924 -1 040 - -884 - - Total -440 787 -563 817 -87 963 -29 314 -351 431 -95 110 - The book value of Other receivables contains mainly advance payments made, which are not expected to be paid in cash, but by a transfer of shares. Currency risk Due to the acquisition of subsidiaries in Poland and in the Czech Republic and due to providing loans to and receiving loans from these companies during 2023 and 2022, the Company is primarily exposed to the risk of changes in the exchange rate of Polish Zloty and Czech Crown against the euro. The management monitors regularly whether there is a large difference between foreign currency liabilities and receivables. As at 31 October 2023, the Company reported an investment in the subsidiaries in Polish Zloty in the amount of EUR 7,508 thousand, (as at 31 October 2022: EUR 7,508 thousand). The Company also reported investment in the subsidiaries in Czech Crown in the amount of EUR 9,058 thousand (as at 31 October 2022: EUR 358 thousand). For more information see point 19 – Investments is Subsidiaries Since the Company has drawn a loan from its subsidiary in Czech Republic, denominated in Czech Crown, the open position on the currency risk at the Czech Crown has significantly opened. The Company decided to hedge its currency position against fluctuations in the Czech Crown for this particular debt instrument. In 2023, the loan denominated in Czech crowns was repaid and the respective hedging instrument terminated. For more information, see Note 33 - Hedge Accounting. Secondarily, there is a risk that weakening of the Czech Crown or Polish Zloty against the euro would lead to reducing the number of visitors from the above stated countries. Separate Financial Statements 254 Sensitivity analysis 31.10.2023 in TEUR CZK PLN Assets Cash and cash equivalents - 7 Loans and borrowings 6 847 34 700 6 847 34 707 in TEUR CZK PLN Liabilities Loans and borrowings received - - Trade payables -16 - -16 - 31.10.2022 in TEUR CZK PLN Assets Cash and cash equivalents 12 33 Loans and borrowings 8 280 31 161 8 292 31 194 in TEUR CZK PLN Liabilities Loans and borrowings received -61 013 - Trade payables -20 -8 -61 033 -8 5% strengthening of the EUR against the Polish Zloty and the Czech Crown would have the following effect on the financial assets and financial liabilities of the Company: Effect on the portfolio in TEUR 2023 2022 PLN -1 735 -1 558 CZK -342 -414 5% weakening of the EUR against the Polish Zloty and the Czech Crown would have an identically high but opposite effect on the financial assets and financial liabilities in comparison with strengthening of the euro. Interest Risk Company transactions are exposed to the risk of interest rate changes. The volume of this risk is equal to the amount of interest-bearing assets and interest-bearing liabilities, for which the interest rate differs, in the maturity period or in the period of change, from the present interest rate. Therefore, the period for which a fixed interest rate is determined for the financial instrument, expresses the exposure to the risk of changes in interest rates to which the Company is exposed. The table below presents Company exposure to the risk of changes in interest rates based on contractual maturity period of financial instruments. The balance of liabilities with fixed interest rate includes also non-interest-bearing liabilities. Separate Financial Statements 255 As at 31 October 2023 and as at 31 October 2022, the Company has the following assets and liabilities linked to interest rates: in TEUR 31.10.2023 31.10.2022 Fixed interest rate Assets 168 469 166 666 Liabilities -357 456 -351 643 Variable interest rate Assets 18 27 204 Liabilities -86 470 -89 144 Sensitivity analysis for instruments with a variable interest rate Change by 100 basis points in interest rates would have the following effect on the profit/loss from operations and cash flow sensitivity: in TEUR Profit (Loss) 100 bb growth 100 bb decline 31 October 2023 Instruments with variable interest rate 865 -865 Effect 865 -865 in TEUR Profit (Loss) 100 bb growth 100 bb decline 31 October 2022 Instruments with variable interest rate 619 -619 Effect 619 -619 Company interest-bearing liabilities have a variable interest rate referring to EURIBOR. The Company considers the variable interest rate as the self-management of interest risk. During an economic expansion, the EURIBOR is growing, but at the same time, the population economic performance is growing, and the company has higher revenues and profits. During an economic recession, the situation is completely opposite. Operational Risk Operational risk is the risk of loss resulting from any fraud, unauthorised activities, failures, errors, inefficiency or failure of systems. The risk is created in all Company activities. Operational risk also includes the risk of legal disputes. The aim of the Company is to manage the operational risk to prevent any financial losses and detriment to the Company reputation within the cost-efficiency of cost spent on achieving this objective, while avoiding any measures preventing initiatives and creativity. The Company management has key responsibility for the implementation of inspections related to the operational risk management. The responsibility is supported by the implementation of standards for the management of operational risk which is common for the whole Company. Operational risk is governed by a system of directives, minutes of meetings and control mechanisms. The Company has a controlling department which attempts to eliminate all operational risks through regular inspections. Separate Financial Statements 256 The Company is also exposed to the risk of unfavourable conditions with respect to the weather. The number of visitors in the centre depends on the snow and snowfall periods. Unfavourable conditions adversely affect the number of skiers and the revenue of profit/loss from operations. Warm weather can unreasonably increase the cost of snowmaking and reduce the area where skiing is possible. Historically, the Low Tatras and the High Tatras region had on average 54 cm and 59 cm of snow during the winter season, respectively. The start of winter season and snow conditions affect the perception of the whole season by skiers. The Company is not able to forecast reliably in any manner the snow conditions at the beginning of winter season. Thanks to the system of snowmaking, the snow conditions during the winter are stable each year. Related Parties Identification of related parties As provided in the following overview, the Company has relations of a related party with respect to its shareholders having significant influence in the Company, and with respect to other parties, as at 31 October 2023 and 31 October 2022 or during the period between 1 November 2022 and 31 October 2023 and 1 November 2021 and 31 October 2022: (1) Companies controlling jointly or having significant influence on the accounting entity and its subsidiary and associate companies (2) Jointly controlled companies in which the Company is a partner (3) Associates (4) The members of company top management or Company shareholders or companies in which top management has control or significant influence (see also Note 9 – Personnel Expenses) Information on remuneration of Members of Key management is stated in Note 9 – Personnel Expenses. All transactions with related parties, including transactions with Key management, were realized based on conditions, which are ordinary (or expected) for non-related parties transactions realized on the market. None of the related parties was privileged in any kind of transactions. Separate Financial Statements 257 The Company has the transactions provided below with respect to related parties: in TEUR Note: Receivables Payables Receivables Payables 31.10.2023 31.10.2023 31.10.2022 31.10.2022 Szczyrkowski Osrodek Narciarski S.A. 1 46 964 - 42 399 8 Ślaskie Wesole Miasteczko Sp. z o. o. 2 54 948 4 343 51 465 4 147 TMR Ještěd a.s. 3 555 - 7 618 18 Tatry mountain resorts Č R, a.s. 4 3 337 6 2 543 2 TMR Parks, a.s. 5 63 279 1 000 64 465 1 024 Mölltaler Gletscherbahnen GmbH & Co KG 6 2 41 19 693 5 Mölltaler Gletscherbahnen GmbH 7 - - 6 - Grundstücksverwertungs-GmbH Flattach 8 - - 5 - TMR Finance Č R, a.s. 9 2 085 - 205 60 895 Ostravice Hotel a.s. 10 138 - 138 - MELIDA, a.s. 11 892 - 966 4 TIKAR d.o.o 12 - - - - Korona Ziemi sp.z o.o. 13 1 763 - 1 615 - Muttereraim Bergbahnen Errichtungs GmbH 14 1 001 - 468 - Tatry mountain resorts AT GmbH 15 366 - 350 - GOPASS, a.s. 16 - - 47 748 WORLD EXCO s.r.o. 17 - - 178 - EUROCOM Investment, s.r.o. 18 10 909 16 400 12 426 11 420 International TMR services, s.r.o. 19 1 - 1 1 GOPASS SE 20 178 90 - 119 Companies related though Members of the Key Management 21 7 310 25 42 in TEUR Note: Revenues Costs Revenues Costs 1.11.2022 - 31.10.2023 1.11.2022 - 31.10.2023 1.11.2021 - 31.10.2022 1.11.2021 - 31.10.2022 Szczyrkowski Osrodek Narciarski S.A. 1 2 602 13 2 322 8 Ślaskie Wesole Miasteczko Sp. z o. o. 2 2 470 199 1 885 212 TMR Ještěd a.s. 3 250 32 618 333 Tatry mountain resorts Č R, a.s. 4 181 43 144 213 TMR Parks, a.s. 5 1 697 2 001 2 301 1 258 Mölltaler Gletscherbahnen GmbH & Co KG 6 2 5 924 5 Mölltaler Gletscherbahnen GmbH 7 - - 5 - Grundstücksverwertungs-GmbH Flattach 8 - - 5 - TMR Finance Č R, a.s. 9 133 22 8 2 630 Ostravice Hotel a.s. 10 - - - - MELIDA, a.s. 11 - - - - TIKAR d.o.o 12 - 167 - Korona Ziemi sp.z o.o. 13 82 - 81 - Muttereraim Bergbahnen Errichtungs GmbH 14 33 - 19 - Tatry mountain resorts AT GmbH 15 16 - 16 - GOPASS, a.s. 16 - - 37 927 WORLD EXCO s.r.o. 17 - - 10 - EUROCOM Investment, s.r.o. 18 2 376 941 1 785 327 International TMR services, s.r.o. 19 - - - 101 GOPASS SE 20 159 2 554 - - Companies related though Members of the Key Management 21 102 5 608 43 4 082 Separate Financial Statements 258 1 Szczyrkowski Osrodek Narciarski S.A. became a related party on 30 April 2014. 2 Ślaskie Wesole Miasteczko Sp. z o. o. became a related party on 1 May 2015. 3 TMR Ještěd a.s. became a related party on 5 May 2017. 4 Tatry mountain resorts Č R, a.s. became a related party on 16 February 2018. 5 Tatry Parks, a.s. became a related party on 30 September 2017. 6 Mölltaler Gletscherbahnen GmbH & Co KG became a related party on 1 May 2019. 7 Mölltaler Gletscherbahnen GmbH became a related party on 1 May 2019. 8 Grundstücksverwertungs-GmbH Flattach became a related party on 1 May 2019. 9 TMR Finance Č R, a.s became a related party on 14 September 2018. 10 OSTRAVICE HOTEL a.s. became a related party on 31 December 2018. 11 MELIDA, a.s. became a related party on 15 December 2019. 12 TIKAR d.o.o. was a related party from 31 May 2020 to 30 September 2022. 13 Korona Ziemi sp. Z.o.o. became a related party on 31 May 2020. 14 Muttereraim Bergbahnen Errichtungs GmbH became a related party on 1 May 2021. 15 Tatry mountain resorts AT GmbH became a related party on 28 May 2018. 16 GOPASS, a.s. became a related party on 4 June 2021 until the decisive date of the merger with the successor company GOPASS SE, 1 November 2022. GOPASS a.s. ceased to exist as a result of a cross-border merger without liquidation on 1 April 2023. 17 WORLD EXCO s.r.o. became a related party from 1 April 2022 to November 1, 2022, when the companies EUROCOM Investment, s.r.o. and WORLD EXCO, s.r.o. merged, whose legal successor became EUROCOM Investment s.r.o. 18 EUROCOM Investment, s.r.o. became a related party on 1 April 2022. 19 International TMR services, s.r.o. became a related party on 22 June 2022 . 20 GOPASS SE became a related party on 1 July 2022 . 21 Transactions related to remuneration mentioned in Note 9 - Personnel Expenses are not included in the above line. Separate Financial Statements 259 Subsequent Events On 1 November 2023, the Company entered into agreement on lease of part of enterprise with its subsidiary Štrbské Pleso resort, s.r.o, based on which it leased part of movable and immovable assets in location Štrbské Pleso, High Tatras. On 2 February 2024, the Company redeemed the coupon on the TMR V bond in the amount of EUR 6,600 thousand. Capital Commitments and Capital Management During financial year 2014, the Company issued two bond issues (see point 37 – Bonds Issued) in the total nominal value of EUR 180,000 thousand, which, starting from 19 February 2014, were admitted to trading on the Bratislava Stock Exchange. On 10 October 2018, the Company issued the third bond issue TMR III in the nominal value of EUR 90,000 thousand. Interest income on the TMR III bond is paid for each income period on a semi-annual basis, on 10 October and 10 April each year, starting on 10 April 2019. The TMR III bond has maturity on 10 October 2024. During February 2021, the Company issued TMR V bonds with a total nominal value of EUR 110,000 thousand. Interest income from this bond is paid for each annual period in arrears, always on the 2 February, with the first occurrence on 2 February 2022. The maturity of TMR V bond is on 2 February 2026. On 28 October 2022, the Company issued TMR VI bonds with a total value of up to a maximum of EUR 65,000 thousand with an interest rate of 5.4% p.a. and a maturity in 2027. On 28 October 2022, bonds worth EUR 1,552 thousand and 3 November 2022 worth EUR 57,448 thousand were traded. Interest income from this bond are paid for each income period on a semi-annual basis in arrears, always on 28 April and 28 October of each year. The maturity of TMR VI bond is on 28 October 2027. Further information on issued bonds and related covenants are provided in Note 37 – Bonds Issued. The Company management manages capital in order to ensure sufficient amount of resources for planned investments in that period for which investments are planned, if necessary in cooperation with bank loans. The Company and its management monitor developments in the Company’s capital structure, any changes and their potential impact. The Company's capital includes significant items such as bonds issued, borrowings and the related costs or expenses associated with servicing and repayment. The Company meets all its obligations properly, on time and according to the agreed terms. It also meets all agreed terms, ratios and reporting and valuation requirements for any maintenance of this capital. The capital is part of the Company's long-term and strategic plans. The Company uses capital primarily to fund development projects that have been undertaken in previous periods. The purpose of these capital projects is to increase the value of the Company and provide a competitive advantage to its resorts, as well as to generate cash surpluses to cover the repayment of liabilities and also to provide a source of further funding for the Company. Over the course of the period between 1 November 2022 and 31 October 2023 , no changes occurred in the Company’s management approach to capital management. Separate Financial Statements 260 Contingent Assets and Contingent Liabilities With respect to that many areas of Slovak law on taxation have not been sufficiently ascertained in practice, there is uncertainty in how tax offices will apply them. It is not possible to quantify the level of this uncertainty and it will only cease to exist when legal precedents or official interpretations of the relevant bodies are available. The Company is currently in the process of evaluation of the possibilities of tax losses utilisation in Slovakia, that arose in a foreign subsidiary of the Company. The Company addressed a request for guidance to the Financial Administration of the Slovak Republic. Due to the uncertainty and lack of clarity of the financial impact, this fact has not been captured in the Company's financial statements. The Company has initiated several legal proceedings. The maximum amount of compensation in all legal proceedings can be up to EUR 260 thousand and accessions thereof. …… .......................................................................................................................................................................................... Igor Rattaj Zuzana Ištvánfiová Marián Klas Lucia Kušnierová The Chairman of the The Vice Chairman Finance Person responsible for Board of Directors of the Board of Directors Director preparation of the financial statements Separate Financial Statements 261 Separate Financial Statements Independent Auditor‘s Report 262 Separate Financial Statements Independent Auditor‘s Report 263 Separate Financial Statements Independent Auditor‘s Report 264 Separate Financial Statements Independent Auditor‘s Report 265 Separate Financial Statements Independent Auditor‘s Report 266 Separate Financial Statements Independent Auditor‘s Report 267 Separate Financial Statements Independent Auditor‘s Report 268 Independent Auditor‘s Report Separate Financial Statements 269 Independent Auditor‘s Report Separate Financial Statements REMUNERATION REPORT 272 Remuneration report REMUNERATION REPORT OF MEMBERS OF THE BODIES OF PUBLIC LIMITED COMPANY TATRY MOUNTAIN RESORTS, A.S. Board of Directors of Tatry mountain resorts, a.s. with its registered seat at Demänovská Dolina 72, 031 01 Liptovský Mikuláš, ID: 31 560 636, registered in the Commercial Register kept by the District Court of Ž ilina, Section: Sa, Insert No. 62/L (hereinafter referred to as " The Company ") in accordance with the provision stated in § 201e of Act No. 513/1991 of the Commercial Code as amended (hereinafter referred to as the " Commercial Code ") prepared the following report on the remuneration of members of the Company's bodies for the financial year starting on 01.11.2022 and ending on 31.10.2023 (hereinafter referred to as the " Remuneration Report "). 1. REMUNERATION OF MEMBERS OF THE BOARD OF DIRECTORS 1.1. The Board of Directors of the Company was active in the financial year starting on 01.11.2022 and ending on 31.10.2023 (hereinafter referred to as the " Financial year ") in the following composition: 1.1.1 Ing. Igor Rattaj, Chairman of the Board of Directors since 30.04.2020 1.1.2 Ing. Jozef Hodek, Member of the Board of Directors from 30.06.2009 to 30.06.2023 1.1.3 Čeněk Jílek, Member of the Board of Directors since 29.04.2020 1.1.4 Ing. Zuzana Ištvánfiová, Vicechairman of the Board of Directors since 01.06.2023 1.2 Overview of all components of the total remuneration 1.2.1 In accordance with the remuneration rules of the Company's bodies approved by the General Meeting on 29.04.2020, In the wording of changes approved by the general meeting on 31.05.2023 (hereinafter referred to as " Remuneration rules ") the members of the Board of Directors are provided with so- called total remuneration of a member of the Board of Directors which consists of: (i) fixed component – point 2.2 of the Remuneration rules, (ii) variable component – point 2.3 of the Remuneration rules and (iii) bonuses and other benefits. 1.2.2 For the Financial year, these following components of the total remuneration were paid to the members of the Board of Directors: 1.2.2.1 Fixed component of the total remuneration: Ing. Igor Rattaj, in the amount of 96.000,- EUR Ing. Jozef Hodek, in the amount of 32.000,- EUR Čeněk Jílek, in the amount of 48.000,- EUR Ing. Zuzana Ištvánfiová, in the amount of 30.000,-EUR 1.2.2.2 Granted variable component of the total remuneration: Ing. Igor Rattaj, in the amount of 730.393,- EUR Ing. Jozef Hodek, in the amount of 321.538,- EUR Čeněk Jílek, in the amount of 456.496,- EUR Ing. Zuzana Ištvánfiová, in the amount of 179.942,- EUR 1.3 Proportional share of fixed and variable component in the total remuneration 1.3.1 The proportional share of fixed and variable component of the total remuneration for members of the Board of Directors is as follows: Fixed component Variable component Ing. Igor Rattaj 11.62% 88.38% Ing. Jozef Hodek 9.05% 90.95% Čeněk Jílek 9.51% 90,49% Ing. Zuzana Inštvánfiová 14.29% 85.81% 1.4 Explanation of how the total remuneration corresponds to the agreed remuneration rules including how it contributes to a long-term performance of the Company and information on how the performance assessment criteria have been applied 1.4.1 The total remuneration provided or awarded to the members of the Board of Directors in the Financial year takes full account of the criteria for awarding remuneration within the meaning of the Remuneration rules. In the case of a fixed component of the total remuneration it is the proper 273 performance of the function of a member of the Board of Directors and in the case of the variable component of the total remuneration it is the achievement of the performance criteria, which is the positive financial result of the Company. 1.4.2 For the Financial year, the Company achieved positive consolidated financial result (EBITDA) of EUR 59.366 thousand and when comparing the so-called modified EBITDA like-for-like, the achieved modified EBITDA for the year ended 31.10.2023 (EUR 56.306 thousand) reached more than 90% of modified EBITDA for the year ended 31.10.2022 (EUR 27.824 thousand). At the same time, the Company properly complied with the set of non-financial performance indicators – the Company´s position as the so called “Creditable debtor”. Due to achievement of all criteria in terms of the Remuneration rules, the members of the Board of Directors in the Financial year were entitled to a variable component of the total remuneration in the amount specified in point 2.3.1., 2.3.11., 2.3.12 of the Remuneration rules. In accordance with the changes to the Remuneration Rules adopted at the Company's general meeting on May 31, 2023, a claim for a proportional portion of the variable component of the total remuneration has arisen for members of the board of directors whose position was created/discontinued during the fiscal year (point 2.3.11. and 2.3.12. of the renumeration rules). The granted variable components of remuneration in accordance with point 2.3.1, 2.3.11, 2.3.12 of the Remuneration Rules in the total amount of EUR 1.688.371 will be paid to the members of the Board of Directors in accordance with point 2.3.10 of the Remuneration rules on the next payment date determined by the Company for the payment of wages to employees after the publication of the consolidated IFRS financial statements of the Company for the year ended 31.10.2023. 2. REMUNERATION OF MEMBERS OF THE SUPERVISORY BOARD 2.1. The Supervisory Board of the Company served during the Financial year in the following composition: 2.1.1. Ing. Bohuš Hlavatý, Chairman of the Supervisory Board from 30.04.2020 to 30.06.2023 2.1.2. Ing. Jozef Hodek, Chairman of the Supervisory Board since 01.07.2023 2.1.3. Ing. František Hodorovský, Vice-Chairman of the Supervisory Board since 18.01.2011 2.1.4. Roman Kudláček, Member of the Supervisory Board since 21.04.2012 2.1.5. Ing. Pavol Mikušiak, Member of the Supervisory Board since 27.04.2013 2.1.6. Adam Tomis, Member of the Supervisory Board since 12.04.2014 2.1.7. Ing. Andrej Devečka, Member of the Supervisory Board since 29.04.2020 2.1.8. Miroslav Roth, Member of the Supervisory Board since 30.06.2021 2.1.9. Mgr. Marek Schwarz, Member of the Supervisory Board since 30.06.2021 2.1.10. Ivan Oško, Member of the Supervisory Board since 30.06.2021 2.2. Overview of all components of the total remuneration 2.2.1. In accordance with the Remuneration rules, the members of the Supervisory Board are provided with the so-called total remuneration of a member of the Supervisory Board, which consists of: (i) fixed component – point 3.2 of the Remuneration rules, (ii) variable component – point 3.3 of the Remuneration rules and (iii) bonuses and other benefits. 2.2.2. For the Financial year, these following components of the total remuneration were paid to the members of the Supervisory Board: 2.2.2.1. Fixed component of the total remuneration: Ing. Bohuš Hlavatý, in the amount of 32.000,- EUR Ing. Jozef Hodek, in the amount of 16.000,-EUR Ing. František Hodorovský, in the amount of 6.000,- EUR Roman Kudláček, in the amount of 3. 600,- EUR Ing. Pavol Mikušiak, in the amount of 3.280,- EUR Adam Tomis, in the amount of 3.600,- EUR Ing. Andrej Devečka, in the amount of 3.600,- EUR Miroslav Roth, in the amount of 3.600,- EUR Mgr. Marek Schwarz, in the amount of 3.600,- EUR Ivan Oško, in the amount of 3.600,- EUR 2.2.2.2. The variable component of the total remuneration is not granted to the members of the Supervisory Board in accordance with the Remuneration rules. Remuneration report 274 2.3. Proportional share of fixed and variable component in the total remuneration 2.3.1 The proportional share of fixed and variable component of the total remuneration of the members of the Supervisory Board is as follows: Fixed remuneration Variable remuneration Ing. Bohuš Hlavatý 100% 0% Ing. Jozef Hodek 100% 0% Ing. František Hodorovský 100% 0% Roman Kudláček 100% 0% Ing. Pavol Mikušiak 100% 0% Adam Tomis 100% 0% Ing. Andrej Devečka 100% 0% Miroslav Roth 100% 0% Mgr. Marek Schwarz 100% 0% Ivan Oško 100% 0% 2.4. Explanation of how the total remuneration corresponds to the approved remuneration rules, including how it contributes to the long-term performance of the Company and information on how the performance assessment criteria have been applied. 2.4.1. The total remuneration provided or awarded to the members of the Supervisory Board in the Financial year takes full account of the criteria for awarding remuneration within the meaning of the Remuneration rules. Only a fixed component of the total remuneration is awarded to members of the Supervisory Board for the proper performance of the function of a member of the Supervisory Board. 3. COMMON PROVISIONS ON REMUNERATION OF THE MEMBERS OF THE BOARD OF DIRECTORS AND THE MEMBERS OF THE SUPERVISORY BOARD 3.1. Annual remuneration summary regardless of its form of acquisition, annual development of the Company’s performance assessment and average annual remuneration summary based on comparison of income from total remuneration of a member of the Body of the Company and income of the Company’s employees who are not members of the Body of the Company and have a weekly working time established according to a special law, for at least five previous accounting periods. 3.1.1. In accordance with the Remuneration rules a member of the Board of Directors and a member of the Supervisory Board also have the right to remuneration in the form of salary or any other form obtained from the Company for the act of employment contract or any other contract in the case of a membership within the Board of Directors and in the form of a salary in the case of a membership within the Supervisory Board. However, members of the Board of Directors and members of the Supervisory Board are not awarded remuneration for the performance of their duties in the bodies of other companies belonging to the TMR Group. No royalties were awarded or paid to the members of Board of Directors or members of Supervisory Board during the Financial year. 3.1.2. For the Financial year, members of the Board of Directors and members of the Supervisory Board were paid salaries and bonuses, and at the same time the members of Board of Directors were granted bonuses in aggregate as follows: Ing. Igor Rattaj, in the amount of 826.393,- EUR Ing. Jozef Hodek, in the amount of 655.597,- EUR Čeněk Jílek, in the amount of 632.582,- EUR Ing. Zuzana Ištvánfiová, in the amount of 328.252,- EUR Bohuš Hlavatý, in the amount of 32.000,- EUR Ing. Andrej Devečka, in the amount of 29.145,- EUR Ing. František Hodorovský, in the amount of 6.000,- EUR Roman Kudláček, in the amount of 3. 600,- EUR Ing. Pavol Mikušiak, in the amount of 3.280,- EUR Adam Tomis, in the amount of 3.600,- EUR Miroslav Roth, in the amount of 30.521,- EUR Mgr. Marek Schwarz, in the amount of 93.495,- EUR Ivan Oško, in the amount of 32.982,- EUR Remuneration report 275 3.1.3. Comparison of income from total remuneration of a member of the Body of the Company and income of the Company’s employees in thousand EUR: „E“ Employees of the Company in the corresponding Financial year „EE“ Employees of the Company in the corresponding Financial year without the number of members of the Body of the Company „BoC“ Members of the Body of the Company (member of the Board of Directors, member of the Supervisory Board, persons on the highest level of management) in the corresponding Financial year 3.2. Number of shares and share options granted or offered in connection with the performance of the function. 3.2.1. No member of the Board of Directors and the Supervisory Board has acquired any shares or stock options in connection with the performance of a member of the Board of Directors function neither as member of the Supervisory Board. Information on the number of shares of the Company owned by individual members of Board of Directors and members of the Supervisory Board is provided in the annual report prepared as of 31.10.2023, which includes this Remuneration report. 3.3. Information on the use of the possibility of recovering option of the variable component of the total remuneration. 3.3.1. The Company has not set any criteria for recovering the variable component of the total remuneration. 3.4. Information on all cases pursuant to § 201a, section 3, including an explanation of the nature of exceptional cases and an indication of the specific provisions from which they have temporarily deviated 3.4.1. The Remuneration rules do not provide for any exceptional cases referred to in § 201a, section 3 of the Commercial Code, therefore the provisions in the Financial year have not been applied. Demänovská Dolina, 29.02.2024 Financial year 2023 2022 2021 2020 2019 Number of „E“ 1 456 1 359 1 193 1 332 1 456 Number of „BoC“ 12 12 13 12 19 Number of „EE“ 1 444 1 347 1 180 1 325 1 444 Total annual personal expenses for „EE“ 34 268 27 375 18 959 21 760 22 672 Total annual remuneration for „BoC“ 2 505 1 925 836 1 195 2 424 Total annual remuneration for BoC/number of BoC 208.8 160.4 64.3 99.6 127.6 Total annual personal expenses for EE/number of EE 22.0 18.9 15.4 15.5 14.0 Total annual remuneration BoC/number BoC to total annual personal expenses EE/number of EE 9.5 multiple 8.5 multiple 4.2 multiple 6.4 multiple 9.1 multiple Remuneration report STATEMENT BY THE BO ARD OF DIRECTORS 278 Statement by the Board of Directors The Board of Directors of Tatry mountain resorts, a.s. hereby states that according to its best knowledge Annual Report, Consolidated Financial Statements, and Separate Financial Statements have been prepared in accordance with relevant regulations, and they present a true and accurate description of assets, liabilities, ﬁnancial situation, and comprehensive results of the Group (Tatry mountain resorts, a.s. and its subsidiaries) and the Parent company. The Board further states that Annual Report contains a true and accurate review of performance, operating results, and position of the Group, as well as an explanation of key risks and uncertainty factors that the Group faces. Demänovská Dolina, February 29, 2024 Igor Rattaj Zuzana Ištvánﬁová Chairman of the Board of Directors Vice-Chairman of the Board of Directors 279 TATRY MOUNTAIN RESORTS, a.s., e-mail: info @ tmr.sk, www.tmr.sk, tel.: 0850 606 202 foto: Marek Hajkovský

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