Ilirija d.d.

Annual Report (ESEF) • Feb 26, 2025

74780000V0GH8Q3K5K762024-01-012024-12-3174780000V0GH8Q3K5K762024-12-31iso4217:EUR74780000V0GH8Q3K5K762023-12-3174780000V0GH8Q3K5K762023-01-012024-12-3174780000V0GH8Q3K5K762022-01-012023-12-3174780000V0GH8Q3K5K762023-01-012023-12-31iso4217:EURxbrli:shares74780000V0GH8Q3K5K762022-12-3174780000V0GH8Q3K5K762022-12-31ifrs-full:IssuedCapitalMember74780000V0GH8Q3K5K762022-12-31ifrs-full:TreasurySharesMember74780000V0GH8Q3K5K762022-12-31ifrs-full:CapitalReserveMember74780000V0GH8Q3K5K762022-12-31ifrs-full:OtherReservesMember74780000V0GH8Q3K5K762022-12-31ifrs-full:RetainedEarningsMember74780000V0GH8Q3K5K762023-01-012023-12-31ifrs-full:IssuedCapitalMember74780000V0GH8Q3K5K762023-01-012023-12-31ifrs-full:TreasurySharesMember74780000V0GH8Q3K5K762023-01-012023-12-31ifrs-full:CapitalReserveMember74780000V0GH8Q3K5K762023-01-012023-12-31ifrs-full:OtherReservesMember74780000V0GH8Q3K5K762023-01-012023-12-31ifrs-full:RetainedEarningsMember74780000V0GH8Q3K5K762023-12-31ifrs-full:IssuedCapitalMember74780000V0GH8Q3K5K762023-12-31ifrs-full:TreasurySharesMember74780000V0GH8Q3K5K762023-12-31ifrs-full:CapitalReserveMember74780000V0GH8Q3K5K762023-12-31ifrs-full:OtherReservesMember74780000V0GH8Q3K5K762023-12-31ifrs-full:RetainedEarningsMember74780000V0GH8Q3K5K762024-01-012024-12-31ifrs-full:IssuedCapitalMember74780000V0GH8Q3K5K762024-01-012024-12-31ifrs-full:TreasurySharesMember74780000V0GH8Q3K5K762024-01-012024-12-31ifrs-full:CapitalReserveMember74780000V0GH8Q3K5K762024-01-012024-12-31ifrs-full:OtherReservesMember74780000V0GH8Q3K5K762024-01-012024-12-31ifrs-full:RetainedEarningsMember74780000V0GH8Q3K5K762024-12-31ifrs-full:IssuedCapitalMember74780000V0GH8Q3K5K762024-12-31ifrs-full:TreasurySharesMember74780000V0GH8Q3K5K762024-12-31ifrs-full:CapitalReserveMember74780000V0GH8Q3K5K762024-12-31ifrs-full:OtherReservesMember74780000V0GH8Q3K5K762024-12-31ifrs-full:RetainedEarningsMember ANNUAL REPORT FOR THE YEAR 2024 Biograd na Moru, February 2025 2ANNUAL REPORT FOR THE YEAR 2024 TABLE OF CONTENTS 04 06 12 18 18 19 24 25 26 30 31 32 34 36 36 37 38 40 40 41 41 42 42 52 56 58 61 64 66 68 70 73 74 76 87 101 115 119 Introduction by the President of the Management Board Overview of key performance indicators in 2024 Key information for 2024 1 ABOUT ILIRIJA d.d. 1.1 Basic information 1.2 Chronological overview of the Company’s development 1.3 Company’s bodies 1.4 Affiliated companies 1.5 Ownership structure of the Company and overview of trading in Company’s shares at Zagreb Stock Exchange 1.6 Company business model 1.7 Brands of the Company 1.8 Quality – standards and certificates 1.9 Awards and acknowledgements 2 CORPORATE STRATEGY AND GOVERNANCE 2.1 Vision, mission and fundamental values 2.2 Organisational structure 3 REPORT ON THE APPLICATION OF CORPORATE GOVERNANCE CODE 4 2024 COMPANY MANAGEMENT REPORT 4.1 Business expectations in 2025 4.2 Information on acquisition of own shares 4.3 Subsidiaries 4.4 Financial instruments 4.5 Risks and risk management 4.6 Sustainable development and corporate social responsibility 5 BUSINESS CAPACITIES OF THE COMPANY AND ADDITIONAL FACILITIES 5.1 Hotel sector 5.2 Nautical sector 5.3 camping SECTOR sector 5.4 Ilirija Travel 5.5 Hospitality 5.6 Additional facilities 5.7 City Galleria Business and Shopping Centre 6 KEY PHYSICAL PERFORMANCE INDICATORS OF THE COMPANY 6.1 Hotel sector 6.2 Nautical sector – Marina Kornati 6.3 Camping sector – “Park Soline” campsite 6.4 City Galleria Business and Shopping Centre 6.5 Ilirija Travel 7 FINANCIAL RESULTS OF THE COMPANY 7.1 Financial-operating results of the Company by sectors: 7.1.1 Hotel sector 7.1.2 Nautical sector 7.1.3 Camping sector 7.1.4 City Galleria Business and Shopping Centre 7.1.5 Financial results at Company level 7.2 Financial-operating results at Company level: 7.2.1 Financial results of the Company 7.2.2 Financial position of the Company 7.2.3 Company cash flow 8 ADDITIONAL INFORMATION ON THE STATUS AND BUSINESS OPERATIONS OF THE COMPANY 8.1 Significant events 8.2 Legal matters 8.3 Investments in 2024 8.4 Non-operating assets 8.5 Employment, labour costs and salaries 8.6 Occupational health and safety 8.7 Other 8.8 Notes 9 THE MANAGEMENT BOARD'S REPORT AND THE 2024 ANNUAL FINANCIAL STATEMENTS, INCLUDING THE INDEPENDENT AUDITOR’S REPORT 9.1 Statement on the accountability of the Management Board 9.2 Independent auditor’s report 9.3 Statement of financial position 9.4 Statement of comprehensive income 9.5 Cash flow statement 9.6 Statement of changes in equity 9.7 Notes 9.8 2024 Annual financial statements, including the independent auditor's report 9.9 Statements by the Company Representation 9.10 Decision on Creating of Annual Financial Statements and Draft Decision on Utilization of Profit 9.11 Decision on Approving the Annual Financial Statements and Draft Decision on Utilization of Profit 9.12. Supervisory Board's Report on Performed Supervision of the Conducting the Company's Business for the year 2024 121 122 122 125 129 132 134 135 135 144 155 156 156 157 161 162 163 164 170 172 173 175 176 185 186 187 188 189 227 240 241 243 244 3ANNUAL REPORT FOR THE YEAR 2024 4ANNUAL REPORT FOR THE YEAR 2024 INTRODUCTION BY THE PRESIDENT OF THE MANAGEMENT BOARD Goran Ražnjević, President of the Management Board INTRODUCTION BY THE PRESIDENT OF THE MANAGEMENT BOARD Dear shareholders, This 2024 business year also saw continued business growth, achieving the best results to date at the lev- el of all sectors individually and at the Company level. The achieved results stem from the growth of business activities in the tourism sectors expressed through the growth of key physical indicators, followed by the growth of revenue and profitability that were simulta- neously accompanied by the growth of the results of the real estate sector, as a result of which the Company achieved the best results in terms of revenue, total and business, while at the same time further strengthening the capital and balance sheet position, reducing total liabilities and having the lowest net debt to date. Tak- ing into account that the business year took place in an extremely unfavourable global macroeconomic and geopolitical environment with persistent and acceler- ating inflation, increasing geopolitical instability, the slow recovery of leading European economies, which are also the key outbound markets for Croatian tour- ism, the recovery of competitive tourist destinations in the Mediterranean with a continued pronounced lack of qualified labour, the achieved growth in key busi- ness indicators, some of which are the best thus far, significantly contributed to strengthening the Compa- ny's financial stability and resilience, further competi- tiveness and its economic viability. The business year was marked by the strengthening of the year-round business with the growth of business activities in the pre- and post-season, mostly realised by the Ilirija Travel destination management compa- ny with a strong increase in revenue at a rate of 43%, while other sectors also recorded growth, i.e. the ho- tel sector revenue increased by 9%, the nautical sector revenue increased at a rate of 9%, the real-estate sec- tor revenue increased by 5%, while the camping sector achieved an increase of revenue at a rate of 3%. The increase in sector revenue resulted in an increase in to- tal and operating revenue at the Company level, with total revenue in the amount of EUR 30,685,992.57, representing an 8.48% increase, while operating reve- nue amounted to EUR 30,351,531.83, representing an 8.21% increase compared to the previous year. The Company recorded growth in key business profit- ability indicators (EBITDA, EBIT, operating profit, profit before tax and net profit) compared to the previous business year, while some profitability indicators are the best to date. EBITDA was realised in the amount of EUR 8,120,672.86, representing a 4.17% increase 5ANNUAL REPORT FOR THE YEAR 2024 INTRODUCTION BY THE PRESIDENT OF THE MANAGEMENT BOARD compared to the previous year when it amounted to EUR 7,795,816.56, while EBIT amounted to EUR 4,896,264.66, recording a 7.46% increase compared to EUR 4,556,531.43 realised in the previous year. Operating profit was realised in the amount of EUR 7,786,212.12, constituting an increase of 3.03% com- pared to the previous year, when it amounted to EUR 7,556,885.16. Profit before tax was realised in the amount of EUR 4,434,043.96 at a growth rate of 8.93% compared to EUR 4,070,417.58 achieved in the previous year, while net profit amounted to EUR 3,576,074.33, constituting a 9.05% increase compared to the previ- ous year when it amounted to EUR 3,279,530.22. The Company's business results further strengthened its capital position, expressed through the growth of capital, which in the reporting period amounted to EUR 54,693,348.46, constituting a 2.97% increase generat- ed by the growth of net profit from the current period and profit from previous years. At the same time, to- tal liabilities in the reporting period amounted to EUR 16,862,887.68, recording an 8.58% decrease. Further- more, net debt amounted to EUR 539,116.87, recording an 83.13% decrease, which means that the Company continued to reduce its liabilities in 2024, especially with regard to net debt, which was the lowest to date, with an increase in the self-financing rate, i.e. further strengthening the overall capital, financial and balance sheet position. We are especially proud to have continued our efforts aimed at balancing the rights and interests of our key stakeholders, particularly our shareholders and em- ployees thorough dividend distribution and the im- provement of the employees’ material rights. At the same time, we have settled our obligations towards Company creditors, i.e. suppliers, as well as our tax and contribution obligations. We have also continued to settle in a timely manner our obligations towards our business bank in respect of the principal of loans, i.e. due interest rates. The Company paid a dividend in the amount of EUR 1,685,911.50, or EUR 0.70 per share, representing a 27% increase compared to the previous year, while salary costs increased by 11% due to the growth of the average net salary and the growth of the average net hourly wage, actively implementing the Company's fundamental principles in the area of personnel policy with the aim of creating a competitive employer on the labour market that shows systematic care about the material position of its employees. Dear shareholders, in the circumstances in which busi- ness was conducted in 2024, the Company achieved Goran Ražnjević, President of the Management Board growth in business activities at the level of all sectors, growth in key physical and financial indicators, achiev- ing satisfactory profitability, strengthening the balance sheet and capital position, competitiveness and stabil- ity of operations, i.e. had another successful business year. 6ANNUAL REPORT FOR THE YEAR 2024 16.9m TOTAL LIABILITIES (EUR) -8.58% 0.54m NET DEBT (EUR) -83.13% 3.6m NET PROFIT (EUR) +9.05% 30.7m TOTAL REVENUE (EUR) +8.48% 4.4m PROFIT BEFORE TAX (EUR) +8.93% 8.1m EBITDA (EUR) +4.17% 27.66€ AVERAGE SHARE PRICE +11.40% CAPITAL (EUR) +2.97% 54.7m 72.4m MARKET CAPITALISATION (EUR) +16.28% OVERVIEW OF KEY PERFORMANCE INDICATORS OVERVIEW OF KEY PERFORMANCE INDICATORS IN 2024 7ANNUAL REPORT FOR THE YEAR 2024 OVERVIEW OF KEY PERFORMANCE INDICATORS (in EUR) 2024 2023 Index 2024/2023 Financial indicators Total revenues 30,685,992.57 28,286,740.07 108.48 Operating revenues 30,351,531.83 28,047,808.67 108.21 Hotel sector 9,797,346.04 9,021,921.78 108.59 Nautics 9,117,40 4.47 8,383,126.66 108.76 Camping 7,728,416.08 7,4 85,683.10 103.24 Ilirija Travel 1,518,117.98 1,059,999.02 143.22 Real-estate 2,159,072.06 2,056,050.86 105.01 Revenues from other profit centers 31,175.20 41,027.25 75.99 Revenues from sales 30,022,421.49 27,8 48,262.58 107.81 EBITDA 8,120,672.86 7,795,816.56 104.17 EBITDA margin 26.76% 27.79 % 96.26 Adjusted EBITDA 8,426,874.52 8,248,456.98 102.16 Adjusted EBITDA margin 27.76% 29.41% 94.41 EBIT 4,896,264.66 4,556,531.43 107.46 Adjusted EBIT 5,202,466.32 5,009,171.85 103.86 Earnings before taxes 4,434,043.96 4,070,417.58 108.93 Profit 3,576,074.33 3,279,530.22 109.04 Profit margin 11.78% 11.69% 100.77 OVERVIEW OF KEY PERFORMANCE INDICATORS IN 2024 8ANNUAL REPORT FOR THE YEAR 2024 OVERVIEW OF KEY PERFORMANCE INDICATORS (in EUR) 31/12/2024 31/12/2023 Index 2024/2023 Balance sheet indicators Net debt 539,116.87 3,195,369.06 16.87 Net debt / EBITDA 0.07 0.41 16.20 Net debt /Adjusted EBITDA 0.06 0.39 16.51 Interest coverage 9.88 8.38 117.9 0 Capital investments 1,593,127.52 3,230,079.01 49.32 ROE 6.54% 6.18% 105.83 ROA 5.00% 4.59% 108.93 Adjusted ROCE 8.93% 8.91% 100.22 (in EUR) 2024 2023 Index 2024/2023 Achievemensts on the capital market Market capitalization 72,404,640.00 62,267,990.40 116.28 EV 72,943,756.87 59,072,621.34 123.48 EV / EBITDA 8.98 7. 58 118.54 EV / Adjusted EBITDA 8.66 7.16 120.87 P / E 20.12 18.84 106.79 EPS 1.49 1.37 108.76 DPS 0.7 0.55 127.27 (in EUR) 31/12/2024 31/12/2023 Index 2024/2023 Indicators of the financial position Value of assets 71,556,236.14 71,560,190.12 99.99 Capital 54,693,348.46 53,114,266.63 102.97 Total liabilities 16,862,887.68 18,445,923.49 91.42 Indicated by the methodology of calculation according to last share price multiplied with number of share. 9ANNUAL REPORT FOR THE YEAR 2024 OVERVIEW OF KEY PERFORMANCE INDICATORS Physical indicators 2024 2023 Index 2024/2023 Hotel sector Number of accommodation units 435 435 100.00 Overnight stays of tourists 126,130 118,680 106.28 Occupancy days 140 135 103.70 Annual occupancy 38.35% 36.95% 103.79 Nautics Number of berths 805 805 100.00 Contracted vessel 754 747 100.94 Transith berthY overnight stays of vessels 7,179 8,127 88.34 Transith berthY inbound sail of vessels 2,816 3,094 91.01 Port service - number of operations 4,000 3,817 104.79 Days of work 365 365 100.00 Camping Number of accommodation units 1,130 1,130 100.00 Days od work 198 198 100.00 Occupancy days 116.24 120.62 96.37 Mobile homes 87.76 89.35 98.22 Individuals 48.40 56.75 85.29 Fixed lease 198.00 198.00 100.00 Lump sum 198.00 198.00 100.00 Occupancy 58.71% 60.92% 96.37 Mobile homes 44.33% 45.13% 98.23 Individuals 24.44% 28.66% 85.28 Fixed lease 100.00% 100.00% 100.00 Lump sum 100.00% 100.00% 100.00 Overnight stays of tourists 321,016 329,010 97.57 10ANNUAL REPORT FOR THE YEAR 2024 OVERVIEW OF KEY PERFORMANCE INDICATORS Physical indicators 2024 2023 Index 2024/2023 Ilirija Travel Number of events 295 234 126.07 Number of participants (events) 40,424 30,560 132.28 Real-estate sector Number of leesses 36 35 102.86 Common expenses 34 33 103.03 Common areas 24 26 92.31 Advertising space 8 8 100.00 Garage - number of parking spaces 410 410 100.00 Rented area (m²) 9,445.32 9,445.32 100.00 Number of vehicle in garage 734,990 729,225 100.79 11ANNUAL REPORT FOR THE YEAR 2024 12ANNUAL REPORT FOR THE YEAR 2024 KEY INFORMATION FOR 2024 1 In the business year 2024, the Company realised the growth of key performance indicators, financial and profitability, recording the best business year to date both at the level of the Company and across all sectors, especially in terms of generated operating revenue. Furthermore, the generated total revenue, which grew at a rate higher than the growth of operating expenses, additionally strengthened the profitability of the busi- ness in its key indicators (operating profit, profit before tax, net profit, EBITDA and EBIT), which contributed to the strengthening of the financial and capital posi- tion of the Company, further strengthened the balance sheet position, influenced the reduction of total liabili- ties and net debt with further growth of self-financing. Due to the operating results recorded, the continuous growth of key performance indicators continued in 2024, which is primarily the result of the growth of op- erating revenue across all sectors. A bold move in 2024 was made in the development of business activities in the pre- and post-season, especially in the destina- tion management company Ilirija Travel, involving the organisation of a number of events, and in the hotel sector, which contributed to the further strengthening of the year-round operation of the Company's tourism sector. Furthermore, the nautical sector with the con- KEY INFORMATION tinuous growth of operating revenue, especially in the segment of contracted berths of vessels at Marina Ko- rnati and the nautical fair, followed by the growth of business activities in other sectors of real estate and the camping sector, ultimately resulted in the best achievements of the Company to date in terms of rev- enue and the growth of all key indicators of business profitability. Taking into account the circumstances of the busi- ness year, primarily the macroeconomic environment characterised by continued strong inflationary pres- sures on the growth of prices of goods and services not only in the Republic of Croatia but also in the EU Member States, the significant increase in labour costs as a result of the increase in salaries and other labour costs, as well as the lack of qualified workers on the domestic market, market circumstances such as the strong recovery of tourist destinations in the Mediterranean and geopolitical circumstances char- acterised by global political, security and economic instability and uncertainty, and despite such condi- tions we were able to ensure continuous growth of business activities, and achieve the best operating revenue to date, profitability growth, strengthen the Company's financial and capital position , i.e. ensure 13ANNUAL REPORT FOR THE YEAR 2024 KEY INFORMATION the Company's stability and strengthen competitive- ness by further improvement of quality and service standards. 2 The Company’s total revenue amounted to EUR 30,685,992.57, which compared to the previous busi- ness year, when it amounted to EUR 28,286,740.07, represents an increase of 8.48% generated by the growth of operating and financial revenue. Operating revenue in the reporting period amounted to EUR 30,351,531.83, which is an increase of 8.21% compared to the previous business year, when it amounted to EUR 28,047,808.67, and this is due to in- come growth across all sectors of the Company, that is, the sectors realised the highest revenue to date, of which revenue of the destination management compa- ny Ilirija Travel grew at the highest rate by 43%, hotel sector revenue increased by 9%, the nautical sector revenue increased by 9%, the real estate sector rev- enue by 5% and camping sector revenue by 3%. The achieved growth of operating revenue across all sec- tors is the result of the growth of business activities reflected in the growth of key performance indicators including arrivals and overnight stays, the number of events, the number of vessels at contracted berth, the growth of ADR and RevPAR, the number of lease agree- ments and the average lease per m². In the reporting period, the destination management company achieved the highest operating revenue growth rate of 43%, that is, it realised EUR 1,518,117.98 in operating revenue compared to EUR 1,059,999.02 realised in 2023 due to the increase in the number of events and the number of participants organised main- ly in the pre- and post-season, which resulted in the extension of the tourist season and further strength- ening of the Company’s year-round business activities through the destination management company system as a complementary and integrated product of all tour- ism sectors of the Company. In 2024, the nautical sector recorded the best operating revenue in the amount of EUR 9,117,404.47, and com- pared to the previous business year, when it amounted to EUR 8,383,126.66, this represents a growth of 9%. The growth in the nautical sector revenue is the result of an 8% increase in revenue in the profit centre of Marina Kor- nati due to the growth of the key indicator of the number of vessels at contracted berth, i.e. revenue generated by contracted berths, which grew by 7% and make up 74% of the marina’s revenue. Furthermore, the nautical fair recorded a strong double-digit revenue growth of 23% compared to 2023, which significantly contributed not only to the growth of the nautical sector’s revenue, but also to its best achievements to date. The hotel sector’s operating revenue amounted EUR 9,797,346.04, which compared to EUR 9,021,921.78 in revenue generated in 2023, represents a growth of 9% as a result of an increase in arrivals by 14% and over- night stays by 6%, with a special emphasis on increas- ing business activities in the pre-season and post-sea- son period, i.e. year-round business activities, with an increase in ADR by 6%, RevPAR based on availability days by 9% and RevPAR based on the total number of days in the period by 10%. In 2024, the real estate sector, i.e. the City Gal- leria Business and Shopping Centre, realised EUR 2,159,072.06 in operating revenue, which was a growth of 5% compared to last year’s revenue of EUR 2,056,050.86. Revenue grew in terms of key operat- ing items, primarily revenue from commercial prem- ises lease, revenue from common costs, garage and lease of commercial premises in Phase 1 of the cen- tre while maintaining a high level of occupancy of the centre at the level of 99.76% of all capacities and an increase in the average monthly rent per m² of com- mercial premises (AMR) by 7%. The operating revenue of the camping sector in the reporting period amounted to EUR 7,728,416.08 and grew by 3% compared to the EUR 7,485,683.10 real- 14ANNUAL REPORT FOR THE YEAR 2024 KEY INFORMATION ised in the previous business year, generated by a 5% growth in revenue in the accommodation segment, i.e. the “Park Soline” campsite, and it is the result of a growth in revenue from the mobile home market segment by 7% and from lump sum guests by 16% with a simultaneous increase in ADR by 9%. growth of RevPAR based on availability days by 6% and RevPAR based on the total number of days in the period by 5%. 3 In 2024, total expenses amounted to EUR 26,251,948.61, and compared to 2023, when they amounted to EUR 24,216,322.49, they increased by 8.41%, i.e. EUR 2,035,626.12, due to an increase in op- erating expenses. Operating expenses amounted to EUR 22,565,319.71 and increased by 10.12% or by EUR 2,074,396.20 compared to the previous business year, when they amounted to EUR 20,490,923.51, and were generated by the growth in outsourced service costs by 17%, sal- ary costs by 11%, other costs by 10% and raw material, material and energy costs by 2%, of which we would like to single out the following expenses, which in absolute terms contributed mostly to the growth of operating expenses: I the cost of labour, which in the reporting period in- creased by 11% or EUR 870,685.12 as a result of the increase in the material rights of employees, the earli- er start or retention of seasonal employees in employ- ment due to the greater volume of business activities in the pre- and post-season, and ultimately the devel- opment of the average net salary at the level of the av- erage net salary in the Republic of Croatia, which is also the Company’s main objective in terms of the material rights of employees. II the increase in costs related to various types of lease fees, which are higher by EUR 310,319.39 or by 33% mostly as a result of higher allocations for the accom- modation of seasonal employees and payment of fees for the lease of the campsite tourist land based on the Act on Unvalued Construction Land and the Ordinance on the Arrangement of Leases on Parts of the Camp- sites Owned by the Republic of Croatia. III increase in costs of building and equipment main- tenance service which increased by 23% or EUR 230,661.79, with the aim of improving the quality and standards of the service and maintaining the achieved level of competitiveness and minimum categorisation of facilities at 4-star rating level. IV increase in other costs which increased by 10% or EUR 433,387.27 as a result of the increase in costs from non-production services, primarily the entertainment programme costs due to the strengthening of business activities through the destination management compa- ny Ilirija Travel and ensuring year-round business ac- tivities. Furthermore, other costs grew on the basis of various employment benefits, which increased by 6%. V increase in the cost of raw materials and materials in the food and beverage segment, which increased by 11%, i.e. EUR 197,557.00, partly as a result of the increase in the number of higher-value special events with food and beverage services organised by the destination management company Ilirija Travel, an in- crease in the cost of food and beverages in the accom- modation with board services due to the increase in the number of guests, and to a lesser extent as a result of the increase in the purchase price of food and bev- erages. 4 In 2024, the Company achieved growth in all key profitability indicators (operating profit, profit before tax, net profit, EBITDA and EBIT), i.e. some indicators show the best profitability to date. Furthermore, the 15ANNUAL REPORT FOR THE YEAR 2024 Company considers the achieved profitability of the business and its further growth across all indicators to be appropriate, taking into account the macroe- conomic circumstances of the business year, the still present inflationary pressures, the continuous growth of labour costs and labour-related costs, the growth of service prices, and especially the slow growth of the economy in the key European markets for Croa- tian tourism. Also, profitability growth is primarily the result of the increased business activities across all sectors and, at the same time, the management of operating expenses, which grew at lower rates com- pared to the growth rate of total revenue. EBITDA amounts to EUR 8,120,672.86 and in the reporting period it increased by 4.17% or EUR 324,856.30 compared to the previous business year when it amounted to EUR 7,795,816.56. EBIT amounted to EUR 4,896,264.66, constituting an increase of 7.46% or EUR 339,733.23 compared to the previous business year, when it amounted to EUR 4,556,531.43. Operating profit was generated in the amount of EUR 7,786,212.12 and was 3.03% or EUR 229,326.96 higher compared to the previous year, when it amounted to EUR 7,556,885.16. Profit before tax amounted to EUR 4,434,043.96 and was 8.93% or EUR 363,626.38 higher compared to the previous year when it amounted to EUR 4,070,417.58. Net profit in the reporting period amounted to EUR 3,576,074.33, and compared to the previous business year, when it amounted to EUR 3,279,530.22, it in- creased by 9.05%, i.e. EUR 296,544.11. 5 Capital and reserves in the reporting period amount- ed to EUR 54,693,348.46 and compared to 2023, when they amounted to EUR 53,114,266.63, they increased by EUR 1,579,081.83, i.e. 2.97%, due to the increase in retained profit by 11.34% and the increase in net profit by 9.05%. 6 Total liabilities amounted to EUR 16,862,887.68, and compared to the previous business year, when they amounted to EUR 18,445,923.49, they decreased by 8.58%, i.e. EUR 1,583,035.81, due to the decrease in long-term liabilities, i.e. long-term loan liabilities and financial leasing. 7 In 2024, the Company continued to reduce its net debt, including short-term and long-term liabilities KEY INFORMATION towards banks, minus cash in hand and deposits, so that the Company’s net debt as at 31/12/2024 for the year amounted to EUR 539,116.87, which is a decrease by 83.13% or EUR 2,656,252.19 compared to the net debt of EUR 3,195,369.06 from the previ- ous year. By continuing to reduce net debt in 2024, the Company strengthened its financial and balance sheet position, contributing to further strength- ening of financial stability and liquidity. In simple terms: a Company is without debt. 8 Own source of funds (capital and reserves) as at 31/12/2024 made up 76.43% of total assets, which compared to the previous business year, when the own source of funds made up 74.22% of the share, represents an increase by 2.21 percentage points. The growth of own sources of funds also means a de- crease in the share from other sources of financing, which amounted to 23.57% in the reporting period. Based on the further growth of own sources of fi- nancing generated by the growth of profit from pre- vious years and the net profit of the current period, the Company continued to strengthen its balance sheet position by strengthening of capital, reserves and profit, the reducing total liabilities and net debt, i.e. by overall strengthening of financial stability and 16ANNUAL REPORT FOR THE YEAR 2024 financial position. 9 In the reporting period, 17,770 ILRA shares were traded, which resulted in a turnover of EUR 490,355.00, i.e. 2.33% more compared to the previ- ous year, when it amounted to EUR 479,167.00. 10 The average share price amounted to EUR 27.66, representing an increase of 11.40% compared to the previous business year, when the average share price amounted to EUR 24.83. The last price of the share in the reporting period amounted to EUR 30.00, increas- ing by 16.28%, which in turn means the proportional increase in market capitalisation, expressed as the product of the number of shares and the last price achieved, i.e. it amounted to EUR 72,404,640.00, i.e. EUR 10,136,649.60 more compared to 2023, when it amounted to EUR 62,267,990.40. 11 In 2024, the Company acquired 10,450 own shares based on the authorisation of the General Assem- bly issued on 26 February 2019, i.e. the Resolution on granting the Company's Management Board the authority to acquire own shares, adopted at the Gen- eral Assembly on 26 April 2024. Following the afore- mentioned acquisition, as at 31/12/2024 the Compa- ny holds 15,493 own shares, constituting 0.64% of the share capital. 12 The General Assembly of the Company, held on 26 April 2024, took note of the Company’s Annual Report for 2023 together with the Audit Report for 2023, Re- port of the Supervisory Board on the Performed Su- pervision of the Company’s Operations for 2023, and the Management Board’ Report on the Acquisition of Own Shares in 2023. The General Assembly adopted the Decision on the Approval of the 2023 Report on the Remuneration of Management Board and Super- visory Board Members, the Decision on Granting Dis- charge to the Company’s Management Board for the financial year 2023, Decision on Granting Discharge to the Members of the Supervisory Board for the finan- cial year 2023, Decision on Granting Authority to the Management Board for the Acquisition of Own Shares, Decision on Confirmation of the Previously Approved Policy on the Income of the Management Board Mem- bers and the Decision on the Appointment of the au- thorised auditing company ”UHY RUDAN d.o.o.“, Ilica 213, Zagreb, PIN: 717995390000 for 2024. Also, the Decision on the Use of Company Profit for the 2023 Financial Year was adopted at the General As- sembly, according to which the achieved net profit in the 2023 financial year (after tax) in the amount of EUR 3,279,530.22, is distributed as follows: • EUR 1,593,618.72 into the retained profit, and • EUR 1,685,911.50 for dividend distribution. The dividend per share amounts to EUR 0.70. 13 Pursuant to the Decision of the General Assem- bly on the Use of Profit, the Company paid to the shareholders a dividend in the total amount of EUR 1,685,911.50, i.e. EUR 0.70 per share. The amount of the dividend paid in 2024 was 27%, i.e. EUR 362,203.40 higher compared to the dividend paid in 2023, which amounted to EUR 1,323,708.10, and it amounted to a dividend yield of 2.7%. 14 At the meeting held on 16 September 2024, in order to harmonise the term of office of its members, the Su- pervisory Board adopted a decision on the recall and re-election of all members of the Supervisory Board and established a proposal for a call with an agenda for convening an extraordinary General Assembly of the Company, which was convened for 25 October 2024. On 25 October 2024, an extraordinary General Assem- bly of Ilirija d.d. was held, at which, in order to harmo- nise the Supervisory Board members’ term of office, KEY INFORMATION 17ANNUAL REPORT FOR THE YEAR 2024 a resolution was adopted to recall and re-elect the existing members of the Supervisory Board. Elected members of the Supervisory Board of Ilirija d.d. are as follows: Mr Goran Medić, Mr David Anthony Tudorović, Mr Davor Tudorović, Mr Siniša Petrović and Mr Darko Prebežac. The term of office of the newly elected mem- bers of the Supervisory Board of the Company shall be 4 (four) years. At the constituent meeting of the Supervisory Board of Ilirija d.d. held on 25 October 2024, Mr Goran Medić was elected as the Chairman of the Supervisory Board, and Mr David Anthony Tudorović was elected as the Deputy Chairman of the Board, David Anthony Tudor- ović. 15 Investments in the reporting period amounted to EUR 1,593,127.52 and mostly referred to the camping sector, the destination management company Ilirija Travel, the hotel sector and the real estate sector, with the aim of further improving the quality and standard of service. The investments into the camping sector include in- vestments in the reconstruction of the internal roads in the third zone, the reconstruction and installation KEY INFORMATION of additional LED lighting within the entire campsite, the development of special locations for waste dis- posal, additional investments in improving the quality of campsite accommodation and further landscap- ing work in the campsite up to the level of a camp- site-park. In the destination management company, the investments were related to the improvement of the quality of the existing service and content, as well as the increase of catering capacities for the purpose of further development of the year-round offer. Fur- thermore, with regard to the hotel sector, investments were made in the redecoration and additional furnish- ment of the restaurant of Hotel Kornati, as well as in the improvement of the quality of accommoda- tion in Hotel Ilirija and Hotel Adriatic. In the real estate sector, i.e. the City Galleria Business and Shopping Centre, the investments were related to the relocation and adaptation of public sanitary facilities on the second floor of the Centre and the complete refurbishment and adaptation of the main communi- cation corridor. 18ANNUAL REPORT FOR THE YEAR 2024 1 ABOUT ILIRIJA D.D. 1.1 BASIC INFORMATION 1 ABOUT ILIRIJA ILIRIJA d.d. is a public joint stock company registered for hospitality and tourism with registered office in Biograd na Moru, Tina Ujevića 7, that has been active in the Croatian tourist market for over 67 years. The business operations of ILIRIJA d.d. is based on the prin- ciples of corporate social responsibility as an integral part its corporate values. In its business operations, the Management Com- pany applies the Code of Corporate Governance of the Zagreb Stock Exchange and HANFA. The data on the operations are public and transparent, and at all times available to all national, financial and other in- stitutions, shareholders, banking institutions, funds, associations, business partners, institutional, individu- al and other investors in the regulated capital market in the Republic of Croatia. In its business operations, the Company covers all key segments of the Adriat- ic Mediterranean tourism offer that is: hotel sector (hotels: Ilirija, Kornati, Adriatic, Villa Do- nat/), nautical sector (Marina Kornati and Hotel port Ilirija-Kornati), camping (campsite „Park Soline“*), hospitality (restaurant “Marina Kornati”, restaurant “Park Soline”, Beach bar “Donat”, “Laven- der” lounge bar), destination management compa- ny/DMC Ilirija Travel (Arsenal in Zadar, Villa Primorje , diffuse hotel Ražnjevića dvori AD 1307, event boat “Nada”), sports-recreational and entertainment center (Tennis center Ilirija with 20 tennis courts and Aquatic center with hospitality facilities), and since the month of December 2016, the Company’s portfolio in- cludes the Commercial-Shopping Center City Galleria in Zadar with more than 28.500m 2 gross area in total six floors and total 9.445,32m 2 net rented floor area. Its business is based on providing services by using its capacities (hotels, nautics, camping) at the same time providing additional amenities and services, thus creat- ing a high-quality integrated and complementary tour- ism product in the domestic and international tourism market, presented under the brand Ilirija Travel. Des- tination management company was established as a result of the modern tourism demand, conditioned by the technological, social, market factors and trends of ever more demanding customer or market. 19ANNUAL REPORT FOR THE YEAR 2024 1.2 CHRONOLOGICAL OVERVIEW 1.2 CHRONOLOGICAL OVERVIEW OF THE COMPANY’S DEVELOPMENT Year 1957 | The Company was incorporated and domiciled in Biograd na Moru, where it operates today, although the beginnings of the company date back to 1934 when the first hotel called ILIRIJA in Biograd na Moru was built. These are also the first beginnings of organized tourism not only in Biograd but also in the entire Biograd Riviera, by which the Company becomes the pioneer and the leader of all tourism activities in the Biograd region. Years 1969-1972 | The construction of new hotel facilities (Hotel Kornati and Hotel Adriatic), the overall reconstruction and construction of hotels Ilirija* and building an annex to the hotel Villa Donat / in Sv. Filip and Jakov. Year 1976 | Start of construction of the first nautical tourism port in Croatia, according to the first building per- mit in the Republic of Croatia for the construction of the first nautical port issued by the former Municipality of Biograd na Moru, number: UP/I-03-4-318/1977 as of 10th March 1977, Hotel port Ilirija-Kornati, situated in Biograd na Moru, with a total of 100 berths and the purchase the first charter fleet of 40 vessels, by which the Company became a pioneer of development of the nautical tourism. Year 1986 | Extended nautical capacities of the Company by constructing the nautical tourism Port Marina Ko- rnati, located in Biograd na Moru, with total port area (aquatorium) of 131.600 m 2 with a total capacity of 705 berths on land and sea. Today, Marina Kornati is among the Top 3 Croatian marinas according to the number of berths, technical equipment, quality of service, cleanliness and neatness. Year 1988 | The construction of Tennis center, located in a pinewood Soline right next to the old town center Bi- ograd na Moru (400m from the hotel, 150m from the main beach), on an area of 48.000 m 2 with 20 tennis courts (14 clay and 6 artificial grass tennis courts). Year 1988 | The construction of Aquatic Center, that is, a beach facility as a part of a unique, technological and 20ANNUAL REPORT FOR THE YEAR 2024 1.2 CHRONOLOGICAL OVERVIEW functional unit of the existing hotel capacities, that is basically an Olympic outdoor swimming pool with many additional amenities, as a supplement to the existing and basic hotel amenities. Built as a swimming, beach and sports, entertainment and hospitality facility with bleachers with the capacity of 4,000 seats and a terrace of 1.000 m 2 , whereby it represents a center for holding almost all sports, entertaining and dance events in the City Biograd na Moru. Year 1989 | Construction of an annex to the hotel Kornati and administrative building of the Company. Year 1991-1992 | Completion of the remaining part of the port area, i.e. the capacities of the Port of Nautical Tourism Marina Kornati, by building docks in the southern and western aquatorium. Year 1993 | The Croatian Privatization Fund, makes a decision on the transformation of HTP Ilirija into a joint stock company. Year 1999 | The Company was privatized and is in major ownership of the company Arsenal Holdings d.o.o. from Zadar, which is in major ownership of Mr. Davor Tudorović. Year 1999 | The Company starts boat show organized as Spring Open Days, mainly intended for companies that operate in the marina, as the first such event in North Dalmatia. Wishing for Biograd na Moru, to be top nauti- cal event, at which all sectors of the boating and charter business will be presented in a short period, the Open Days grew into a boat event - Biograd Boat Show. Since 2004 Biograd Boat Show has been organized as the first autumn boat show in Croatia. Year 2000 - 2024 | During this period, i.e. as at 31 December 2024, the Company invested EUR 92,762,435.31 in 21ANNUAL REPORT FOR THE YEAR 2024 1.2 CHRONOLOGICAL OVERVIEW construction, reconstruction, extension, upgrading, renovation and adaptation of accommodation facilities and establishments of the Company in order to enhance the quality, improve the overall service and standards in all sectors of the Company, develop new products, improve and increase the categorization of the accommodation facilities and nautical capacities, expand hospitality facilities with an aim to create a high-quality, recognizable and competitive tourism product and enhance the quality of the offer of the destination itself together with the purchase of the City Galleria Business and Shopping Centre, which resulted in a growth in total revenue and newly created value in the mentioned period in the amount of EUR 182,869,201.93. Year 2002 | The National Audit Office carried out the audit of transformation and privatization of ILIRIJA d.d. and issued an unqualified opinion on the transformation and privatization in full, with an emphasis that the process was carried out in accordance with the legislation and that no irregularities were determined that would affect the legal implementation of the process of transformation and privatization. Year 2003 | The Company’s shares were listed on the Zagreb Stock Exchange in the quotation of public joint stock companies. Year 2005 | As part of the Company’s business system, the multimedia center Arsenal in Zadar, built in the 17th century at the time of the Venetian Republic, following the completion of the revitalization and renewal accord- ing to the concept of “indoor town square,” began conducting business activities. Year 2009 | The Company’s shares are listed on the Regular market of the Zagreb Stock Exchange, since the quo- tation of public joint stock companies was cancelled. Year 2014 | The market was presented the event ship “Nada” a floating convention center with multifunctional 22ANNUAL REPORT FOR THE YEAR 2024 1.2 CHRONOLOGICAL OVERVIEW purposes 36m in length and a capacity to accommodate 180 persons. Year 2014 | As a part of the Company’s business system, the first Croatian diffuse hotel Ražnjevića dvori AD 1307 was opened. Year 2015 | Renovated Villa Primorje, built in the second half of the 19th century, luxuriously decorated and equipped in line with the latest standards for facilities of its kind and category, has its own restaurant that offers the possibility of organizing a number of events. Year 2015 | Recapitalization of the Company by Allianz ZB d.o.o., the compulsory pension fund management company, with headquarters in Zagreb, which has acquired 10% equity share in the ownership of the company. Year 2015 | The Company’s shares are transferred from the Regular to the Official market of Zagreb Stock Ex- change which will contribute to even greater transparency and openness of the company to all of its stakehold- ers. Year 2016 | The second recapitalization of the Company was successfully carried out in the month of November through which the share capital was increased by contributions in cash and by issuing New ordinary shares of the Company through public offering. The main purpose of the recapitalization is to raise funds for the acquisition of the Commercial-Shopping Center City Galleria in Zadar. Year 2016 | On 19 December 2016, having acquired the Commercial-Shopping Center City Galleria in Zadar, the Company successfully completed and carried out the process of acquisition or buying of the real property which created a company with a wide range of economic activities, where in addition to tourism and hospitality sector consisting of hotel sector, nautics, camping and destination management as core business activities, the Compa- 23ANNUAL REPORT FOR THE YEAR 2024 ny partly enters the real estate segment having acquired the modern Commercial-shopping center. Years 2015 - 2017 | The investment cycle in Marina Kornati has been mainly completed by improving the quality of the accommodation of vessels by modernizing nearly seventy percent of the superstructure and the substruc- ture of the marina or piers, allowing thus the accommodation for a larger category of vessels, better exploitation of the marina aquatorium, further enrichment and modernization of the offer by implementing the best existing technical solutions which contributes to further strengthening of the market position of Marina Kornati among the three leading ports of nautical tourism at the Adriatic Sea. Year 2018 | The construction of the indoor swimming pool of useful surface area of approximately 500m 2 along with accompanying facilities, thus complementing the existing tourism offer of the hotel Ilirija Resort in the des- tination of Biograd na Moru. 1.2 CHRONOLOGICAL OVERVIEW 24ANNUAL REPORT FOR THE YEAR 2024 1.3 COMPANY’S BODIES 1.3 COMPANY’S BODIES 1.3.1 COMPANY MANAGEMENT BOARD Goran Ražnjević, President of the Management Board represents the Company solely and independently 1.3.2 SUPERVISORY BOARD Goran Medić, President of the Supervisory Board David Anthony Tudorović, Deputy President of the Supervisory Board Davor Tudorović, Member of the Supervisory Board Siniša Petrović, Member of the Supervisory Board Darko Prebežac, Member of the Supervisory Board 1.3.3 SHAREHOLDERS’ ASSEMBLY 25ANNUAL REPORT FOR THE YEAR 2024 1.4 AFFILIATED COMPANIES Arsenal Holdings d.o.o., Perivoj Gospe od Zdravlja 1, Zadar, PIN: 59794687464, owns 1,429,032 shares of the com- pany, accounting for 59.21% share in the Company's share capital, as well as for the same proportion of votes in the company's Assembly. The parent company Arsenal Holdings d.o.o. is registered with the Commercial Court of Zadar, CRN: 060014554; the share capital is HRK 21,027,500.00, which corresponds to EUR 2,790,828.85, using the fixed conversion rate (7,53450). The majority owner of Arsenal Holdings d.o.o. is Mr Davor Tudorović with a 75.25% share in its share capital, who also holds 95,744 shares of Ilirija d.d. accounting for 3.97% of its share capital. 1.4 AFFILIATED COMPANIES 26ANNUAL REPORT FOR THE YEAR 2024 1.5 OWNERSHIP STRUCTURE OF THE COMPANY AND TRADING IN THE COMPANY’S SHARES AT THE ZAGREB STOCK EXCHANGE The share capital of the Company amounts to EUR 30,420,000.00, and it is divided into 2,413,488 no-par-value ordi- nary shares. As at 31 December 2024, there were no significant changes in the ownership structure, while an overview of the major shareholders of the Company as at 31 December 2024 is provided below. 1.5 OWNERSHIP STRUCTURE Owners - shareholders Number of shares Share in % Arsenal Holdings d.o.o. Zadar 1,429,032 59.21 OTP banka d.d./AZ OMF of B category 328,506 13.61 Goran Ražnjević 201,120 8.33 Davor Tudorović 95,744 3.97 OTP banka d.d./AZ mandatory pension fund of A category 69,898 2.90 Zagrebačka banka d.d./AZ Profit voluntary pension fund 68,200 2.83 Goran Medić 40,000 1.66 Zoran Bogdanović 26,216 1.09 CERP/Republic of Croatia 25,342 1.05 Ilirija d.d. (treasury shares) 15,493 0.64 OTP banka d.d./Erste plavi expert - voluntary pension fund 9,726 0.40 OTP banka d.d./Erste plavi OMF of A category 8,631 0.36 Other shareholders 95,580 3.95 TOTAL 2,413,488 100.00 27ANNUAL REPORT FOR THE YEAR 2024 Arsenal Holdings d.o.o. Zadar 59.21% OTP banka d.d./AZ OMF of B category 13.61% Goran Ražnjević 8.33% Davor Tudorović 3.97% OTP banka d.d./AZ mandatory pension fund of A category 2.90% Zagrebačka banka d.d./AZ Profit voluntary pension fund 2.83% Goran Medić 1.66% Zoran Bogdanović 1.09% CERP/Republic of Croatia 1.05% Ilirija d.d. (treasury shares) 0.64% OTP banka d.d./Erste plavi expert - voluntary pension fund 0.40% OTP banka d.d./Erste plavi OMF of A category 0.36% Other shareholders 3.95% OWNERSHIP STRUCTURE OF THE COMPANY AS AT 31/12/2024 1.5 OWNERSHIP STRUCTURE 28ANNUAL REPORT FOR THE YEAR 2024 TRADING IN COMPANY’S SHARES ON THE CROATIAN CAPITAL MARKET IN 2024 (amounts in EUR) 2024 2023 % of change Total turnover 490,355.00 € 479,167.00 € 2.33% Average share price 27.66 € 24.83 € 11.40% Average turnover per transaction 3,771.96 € 7,371.80 € -48.83% Average daily turnover 6,368.25 € 16,523.00 € -61.46% Last share price 30.00 € 25.80 € 16.28% Market capitalization 72,404,640.00 € 62,267,990.40 € 16.28% Market capitalization* 66,757,078.08 € 59,926,907.04 € 11.40% Number of shares: 2,413,488 2,413,488 1.5 OWNERSHIP STRUCTURE indicated by the methodology of calculation according to the last share price multiplied with number of shares ** indicated by the methodology of calculation according to the average share price multiplied with number of shares In the business year 2024, the Company's share designated as ILRA was traded in the amount of EUR 490,355.00, constituting an increase by 2.33% compared to 2023, when trading amounted to EUR 479,167.00. Average turnover per transaction amounts to EUR 3,771.96, with average daily turnover amounting to EUR 6,368.25. A total of 17,730 shares were traded at an average realised share price of EUR 27.66, representing an increase of 11.40% compared to the average share price for 2023, which amounted to EUR 24.83. Compared to the price at the beginning of the business year, when it amounted to EUR 25.00, at the end of the year it increased by 20%, i.e. to the amount of EUR 30.00. Also, the last share price was EUR 30.00, representing an increase of 16.28% compared to the last share price in 2023, which amounted to EUR 25.80. In proportion to the increase in the last share price, the market capitalization of the Company also increased, which, expressed by the last share price in the observed period, amounted to EUR 72,404,640.00, compared to EUR 62,267,990.40 in the previous year, recoding an increase of EUR 10,136,649.60. 29ANNUAL REPORT FOR THE YEAR 2024 The movement of the ILRA share with the shown volume of trading and a comparison with CROBEX and CROBEXturist indices movements is shown in the following graph 1.5 OWNERSHIP STRUCTURE Last Amount Comparison (ILRA, CROBEX:INDX, CROBEXturist:INDX) 30ANNUAL REPORT FOR THE YEAR 2024 1.6 COMPANY BUSINESS MODEL 1.6 BUSINESS MODEL The Company has been present on the domestic and inter- national tourism markets for over six decades and in 2016, with the acquisition of the City Galleria Business and Shop- ping Centre, it became a company with a wide range of ac- tivities, the portfolio of which is composed of 5 sectors: • Hotel sector – 4 hotels, 435 rooms, 910 beds • Nautics – 805 berths, 2,000 persons • Camping – 1,130 pitches, 3,390 persons • Destination management company/DMC Ilirija Travel – through which 295 special events for 40,424 persons were organised in 2024 • Real-estate segment – City Galleria Business and Shopping Centre in Zadar, one of the two largest shopping centres in the wider Zadar region ILIRIJA d.d. is one of few tourism companies in the Republic of Croatia with such a diverse offer that includes all the seg- ments of the Adriatic or Mediterranean tourism offer in its portfolio (hotel, nautical and camping sectors), additionally strengthened by the destination management company Il- irija Travel and the real-estate sector. With regards to such a diverse portfolio, it is worth noting that the Company man- ages all business processes (management and operations) within the sector or facility. Diverse tourism and real-estate portfolios are based on the resources of the region and on a continuous investment in the improvement of the existing contents and products as well as the development of new ones, which is also the foundation of the Company’s business and development policy. The presence on the market spanning more than six decades as well as knowledge and experience gained, enable the Company to maximize its economic, financial, market and human resources potential. By developing a complementary and integrated product through the des- tination management company, the Company strives for achieving one of its strategic goals – year-round business operations of its tourism sectors, with an emphasis on the hotel and camping sectors, through high-standard exten- sion of the high season to pre-season and post-season and creating added value for both the Company and the desti- nation, or the wider community. Through the destination management company, the Company also contributes to the development and recognizability of the destination by organizing events and by offering contents and programs it organises in its own facilities. 31ANNUAL REPORT FOR THE YEAR 2024 1.7 BRANDS OF THE COMPANY 1.7 BRANDS OF THE COMPANY 32ANNUAL REPORT FOR THE YEAR 2024 1.8 QUALITY - STANDARDS AND CERTIFICATES 1.8 QUALITY - STANDARDS AND CERTIFICATES High quality and standards of services, their continu- ous improvement and enhancement, care for the safe- ty and health of guests and employees, meeting cus- tomer needs and expectations, competitiveness and sustainability of products, continuous improvement of operational processes and continuous employee edu- cation, environmental protection and preservation of biodiversity are the main directions of the Company and they are achieved through the implementation of domestic and international standards into its opera- tions: The Company implemented an integrated environ- mental and quality management system under the ISO 9001:2015 (quality management) and ISO 14001:2015 (environmental management) standards, by which it focuses on the continued improvement of processes connected to the service quality and standards en- hancement, the enhancement of operational and man- agement processes, at the same time connected to the environmental management system. By implementing the integrated Environmental and Quality Policy, the Company confirms its main focus on long-term busi- ness stability based on responsible and sustainable business operations. During 2024, a regular control au- dit was performed as part of the quality management system ISO 9001:2015 and the environmental manage- ment system ISO 14001:2015. Moreover, the international certification company SGS Adriatica d.o.o. conducted its regular audit of the HAC- CP Codex Alimentarius system, which confirmed that the Company, at the level of all its sectors in the area of food and beverage services, carries out a high degree of control during the process of production and distri- bution of food products. The Company uses “green” electricity and holds a Zel- En certificate guaranteeing that the electricity we use comes from renewable sources. The “Park Soline” campsite is the holder of the interna- tional Green Key certificate, attesting to the fulfilment of all criteria for the award of this eco-label in the field of sustainable development and environmental pro- tection. Following a successful audit in September 2015, the "Park Soline" campsite was awarded the internation- al "Ecocamping” certificate. With our membership in the Ecocamping Network, consisting of more than 240 camps from seven European countries, the Company continues to commit itself to promoting ecology, sus- 33ANNUAL REPORT FOR THE YEAR 2024 tainable development and socially responsible busi- ness even further, with particular emphasis on efficient energy management (water, electricity), waste sorting and recycling, preservation of nature and biodiversity, etc. Marina Kornati is the holder of the Blue Flag, i.e. par- ticipates in the international ecological programme for the protection of the sea and coastal environment, whose primary objective is sustainable control and management of the sea and the coastline. The “Company – Friend of Health” certificate was awarded to Ilirija in 2018 by the Croatian Institute of Public Health, with the aim of promoting health in the workplace and working environment, enabling the em- ployees to adopt healthy lifestyle habits and showing concern for the health of employees. 1.8 QUALITY - STANDARDS AND CERTIFICATES 34ANNUAL REPORT FOR THE YEAR 2024 1.9 AWARDS AND ACKNOWLEDGEMENTS 1.9 AWARDS AND ACKNOWLEDGEMENTS ILIRIJA d.d. received the 2024 Annual Award of the Town of Biograd na Moru for its outstanding contri- bution to the development of tourism in the town of Biograd na Moru as the destination’s largest tourism company which, through its work and dedication, made Biograd na Moru a recognisable tourist desti- nation, as well as for its dedication to service quality, innovation, preservation of local culture and tradition and, in general, the entirety of its contributions in the field of economy, tourism and the development of the town of Biograd na Moru, in which the company has operated without interruption for 67 years. 35ANNUAL REPORT FOR THE YEAR 2024 36ANNUAL REPORT FOR THE YEAR 2024 2 CORPORATE STRATEGY AND GOVERNANCE 2.1 VISION, MISSION AND FUNDAMENTAL VALUES 2.1 VISION, MISSION AND FUNDAMENTAL VALUES Vision - is to permanently secure position among the 3 leading tourism companies in the region of the North Dalmatia and among the 20 leading tourism companies in the Republic of Croatia in the key segments of the Croatian tourism offer (hotel sector, nautics and camp- ing), be and stay the leader of the tourism and economic development of our region and destinations such as Bi- ograd na Moru, Zadar and Sv. Filip i Jakov thereby de- veloping the whole year’s business by offering the com- plementary and selective forms of tourism offer in the destinations where we conduct business. According to the foregoing, the mission is: increasing the assets and achieving the financial results of the business operations, which will ensure long-term business and fi- nancial stability, establish an optimal level of quality and competitiveness in business at the level of the overall Croatian tourist offer, with continuous investment in hu- man resources and ensuring optimal employment level, ensuring and complying with sustainable development principle which is manifested in recognizing and satisfy- ing the needs of tourists, protecting and restoring natural and cultural heritage and preserving the environment, i.e. creating a responsible and sustainable tourism offer. Fundamental values: Respect and integrity – equality of treatment and atti- tude towards all our stakeholders constitute the basic values of our Company. Quality – top quality product, professional service and individual approach to clients constitute the basis of the relationship towards our guests, at the heart of the Com- pany’s service. Sustainability and responsibility – in business, invest- ment, relationships with our employees, business part- ners, clients (guests), the local and regional community, with shareholders and in day-to-day business, through the integration of economic, social and environmental aspects into the Company’s decision-making processes and corporate strategy as well as by creating added val- ue for all stakeholder groups through the achieved busi- ness results. Balancing the said aspects is the basis of the Company’s success and sustainable development. Transparency – in business and communication with all stakeholders of the company, while adhering to the prin- ciples of timely and true information as a prerequisite for the strengthening of the market position of the company and its further growth. 37ANNUAL REPORT FOR THE YEAR 2024 2.2 ORGANIZATIONAL STRUCTURE 2.2 ORGANIZATIONAL STRUCTURE Audit Committee SUPERVISORY BOARD MANAGEMENT BOARD HOTEL SECTOR SALES AND MARKETING SALES AND MARKETING SALES AND MARKETING SALES AND MARKETING SALES AND MARKETING HTL. ILIRIJA MARINA KORNATI CENTRAL MARINA WESTERN MARINA SOUTHERN MARINA HOTEL MARINA PARK SOLINE CAMPSITE PITCHES-AGENCIES MOBILE HOMES ILIRIJA INDIVIDUALS HTL. KORNATI HTL. ADRIATIC HTL. VILLA DONAT RESTAURANT MARINA KORANTI PARK SOLINE RESTAURANT TOURIST AGENCY CITY GALLERIA FOOD AND BEVERAGES PURCHASING SALES SERVICE AND PREPARATION CONTROLLING ARSENAL DIFFUSE HOTEL VILLA PRIMORJE BOAT “NADA” LAVANDER BAR TENNIS CENTRE DONAT BEACH BAR AQUATIC CENTRE PROFIT CENTRES PROFIT CENTRES PROFIT CENTRES PROFIT CENTRES PROFIT CENTRES NAUTICS CAMPING ILIRIJA TRAVEL COMMERCIAL-SHOPPING CENTRE CITY GALLERIA OTHER COMMON DEPARTMENTS ACCOUNTING AND FINANCE MARKETING AND SALES, RESEARCH, DEVELOP- MENT, ADVERTISING (DIGITAL MARKETING) AND SALES OF SERVICES AND PRODUCTS CONTROLLING PLAN/ANALYSIS HUMAN RESOURCES AND PAYROLL DEPARTMENT LEGAL DEPARTMENT INFORMATION TECHNOLOGY AND ENERGY MANAGEMENT DEPARTMENT MAINTENANCE DEPARTMENT AND LAUNDRY PURCHASING DEPARTMENT Management Board, Corporate Affairs and Public Relations Office SECTORS SAFETY DEPARTMENT (HEALTH PROTECTION, OCCUPATIONAL HEALTH AND SAFETY, FIRE SAFETY, ENVIRONMENTAL PROTECTION) HOUSEHOLD AND HORTICULTURE COMPANY ASSEMBLY 38ANNUAL REPORT FOR THE YEAR 2024 3 REPORT ON THE APPLICATION OF CORPORATE GOVERNANCE CODE Ilirija d.d. operates in accordance with principles and prac- tices of good corporate governance, providing a high level of transparency and accountability in relation to all of its stakeholders. In its operations, the Company applies the Corporate Governance Code jointly adopted by Zagreb Stock Exchange and HANFA, which is available on their websites. Each year, the Company completes and publishes the annual questionnaire prescribed by the Code, in which, when applicable and in line with the “act or explain” mech- anism, it specifies the reasons for possible deviations from the Code. Pursuant to the regulations, the annual question- naire is published on the website of Zagreb Stock Exchange (www.zse.hr) and the Company (www.ilirijabiograd.com). The Company also applies the Code of Business Ethics of the Croatian Chamber of Commerce, doing business in ac- cordance with the principles of responsibility, ethics, trans- parency and respect of good business practices towards all stakeholders in its business process. The Company has a worked-out a system of internal con- trols at all levels, the aim of which is to ensure operational functioning and security of business processes within the Company, satisfaction with the service quality and stand- ards as well as implementation and application of legal regulations, all of which contributes to timely publication within legally prescribed time limits of financial reports that provide objective data on the Company’s financial position and business results. The main characteristics of risk expo- sure and management are covered by the chapter “Risks and Risk Management”. The Management Board of the Company is composed of one member appointed by the Supervisory Board for a five- year term. With the Decision of the Company Supervisory Board of 15 June 2020, Mr Goran Ražnjević was reappoint- ed as the sole member of the Company’s Management Board for a five-year term, starting from 18 June 2020. The Management Board represents the Company independent- ly and individually and manages the Company’s business activities in accordance with the Company’s Articles of As- sociation and legal regulations. The Company Supervisory Board has five members, who are appointed for a term of four years. The Supervisory Board is responsible for supervising the management of the Company’s business activities and appointment of the Man- agement Board members; in addition, it decides on all other matters falling within its scope of competence pursuant to the legal regulations and the Company’s Articles of Associ- ation. Supervisory Board member Mr Darko Prebežac is an independent member, while the Deputy Chairman of the Supervisory Board, Mr David Anthony Tudorović, among other qualifications, has professional knowledge in the field of accounting and auditing of financial reports. The com- position of the Supervisory Board of the Company is listed 3 REPORT ON THE APPLICA- TION OF CORPORATE GOV- ERNANCE CODE 39ANNUAL REPORT FOR THE YEAR 2024 in the chapter “Company’s Bodies”. The Supervisory Board has appointed the Audit Committee, which supervises the existence and functioning of internal controls, risk manage- ment and financial reporting, as well as independence of external auditors. The General Assembly is a body of the Company within the framework of which shareholders exercise their sharehold- er rights and it is composed of all holders (owners) of the Company’s securities. Since there is a time limit related to the exercise of voting rights at the General Assembly, the shareholders are required to apply for participation no lat- er than 6 (six) days prior to the General Assembly meeting pursuant to the law and the Company’s Articles of Associa- tion. Pursuant to the Company’s Articles of Association, the shareholders’ voting rights are not limited to a specific per- centage or number of votes. Every share grants one voting right at the General Assembly. In the Company, there are no securities with special control rights, nor are there any limitations on voting rights. As at 31 December 2024, the Company had a total of 249 shareholders, who held a total of 2,413,488 shares. The Company’s significant shareholders are indicated in the chapter “Ownership Structure of the Company and Over- view of Trading in Company’s Shares at Zagreb Stock Ex- change” An overview of the Company’s ten major share- holders is available on a daily basis on the website of the Central Depository and Clearing Company Inc. (CDCC) www.skdd.hr. In 2024, the Regular General Assembly of the Company was held on 26/02/2024, and the Extraordinary General Assembly was held on 25/10/2024. As legally required, the decisions of the general Assemblies were published and are available on the website of the company (www.ilirijabi- ograd.com), the Zagreb Stock Exchange (www.zse.hr), HAN- FA and the officially appointed mechanism for the central storage of regulated information – SRPI (www.hanfa.hr), as well as the Croatian News Agency (www.hina.hr), and they were submitted to the Register of the Commercial Court, namely in accordance with legal regulations. All decisions of the General Assembly are listed in the chapter “Significant Events”. The Company may acquire own shares based on the author- isation of the General Assembly issued on 26 February 2019, i.e. the Resolution on granting the Company's Management Board the authority to acquire own shares, adopted at the General Assembly on 26 April 2024. In 2024, the Company acquired 10,450 own shares, designated as ILRA, which constitute 0.43% of the share capital. As at 31 December 2024, the Company owned 15,493 own shares, constituting 0.64% of the Company share capital. The Commissioners for Employee Dignity Protection, who are responsible for receiving and handling employee com- plaints, are Mrs Jasmina Kulaš Stojanov, Head of CEO’s Of- fice, Corporate Communications and Public Relations and Mr Ante Mikulić, Hotel Operations Manager and Technical Manager of the campsite. The Company is a signatory of the Croatian Diversity Char- ter, which forms part of a broader regional project imple- mented by the Croatian Business Council for Sustainable Development (HR BCSD) on the territory of the Republic of Croatia with the support of the European Commission. The President of the Company’s Management Board is one of the five promoters of the Croatian Diversity Charter in Cro- atia. The aim of the Croatian Diversity Charter is to promote and encourage diversity, non-discrimination, inclusiveness and equal opportunities in the workplace. In 2020, the Com- pany joined the Alliance for Gender Equality, established jointly by the Council for Sustainable Development (HR- BCSD) and the Embassy of the Kingdom of Spain. Of the total number of employees as at 31 December 2024, women make up 52% of all employees. In the Company's senior management consisting of the Management Board, sector managers and heads of corporate services, there are 16 persons, 71% of whom are women. 3 REPORT ON THE APPLICATION OF CORPORATE GOVERNANCE CODE 40ANNUAL REPORT FOR THE YEAR 2024 4 2024 COMPANY MANAGEMENT REPORT 4.1 Business expectations in 2025 In 2024, tourism was characterised by a complete re- covery as an industry with the opening of tourist desti- nations at the global level, and consequently reaching tourist turnover from the period that preceded the health crisis despite inflation, the general increase in costs, geopolitical and climate instabilities. In Europe, the world’s most important tourist region, the demand growth trend continued in most of its key destinations, while some destinations experienced the phenomenon of overtourism to a much greater ex- tent. In 2024, Croatian tourism followed global tourism trends in terms of the growth of physical and financial turnover, surpassing the results of 2019. Based on the further expected growth of tourist de- mand at the global level and in 2025 based on the growth of interest in travel on the key markets of Croatian tourism, the growth of demand from distant markets relevant for the pre- and post-season and the expected economic recovery of the key tourist markets of the European Union, as a result of which the Compa- ny’s 2025 business expectations are based on the fact that there are no limiting circumstances for the perfor- 4 2024 COMPANY MANAGE- MENT REPORT mance of year-round business activities across all sec- tors and profit centres and further sustainable growth of tourist demand in the Company’s tourism sectors, especially in the hotel and camping sectors, at the level of the entire business year with further strengthening of business activities in the pre- and post-season. The main determinants of the 2025 Business Plan are aimed at: • preservation of the Company’s long-term economic viability and security • preservation of the Company’s stable financial position • preservation of the Company's fixed assets and capital • preservation of the Company’s business operations and activities, and • enhancing the Company’s competitiveness, improv- ing and developing products and services. Also, the Company is aiming to ensure and carry out ac- tivities and actions in 2025 that are essential for main- taining the current status and operations, as follows: • preservation and improvement of the achieved level of facility development and equipment mainly at the 4-star level to ensure market competitiveness, • development of new products, services and content 41ANNUAL REPORT FOR THE YEAR 2024 with the aim of increasing the competitiveness of the Company and further developing its year-round busi- ness activities, • ensuring the optimum number of employees for un- interrupted business activities and the quality of ser- vice in high season, • preservation of the achieved financial position of em- ployees corresponding to the average net salary in the Republic of Croatia in order to ensure the competitive- ness of the Company on the labour market while facing a labour shortage, • fulfilment of obligations towards Company’s credi- tors, i.e. suppliers, payment of tax liabilities and con- tributions, as well as regular fulfilment of its liabilities towards the bank in respect of the principal of loans and interest. In addition to the above-mentioned determinants and preconditions, we believe that it is realistic for the Company to achieve the following business goals in 2025: a) increase in demand evidenced by the growth in terms of all key physical business performance indica- tors at the level of all sectors of the Company, b) increase in operating revenue at the level of all sec- tors and profit centres, i.e. at the level of the entire Company, c) generating EBITDA, or its share in the total revenue, in line with the tourism industry standards; and d) growth of other profitability indicators (profit, EBIT). Furthermore, the Company is aware of the existence of objective and real limiting circumstances and challeng- es that could, to a certain extent, affect the realisation of the 2025 business expectations, including global geopolitical instability with consequences not only for European but also for the threat to world stability and security, as well as negative implications for the econ- omy, impaired macroeconomic stability characterised by continued strong inflationary pressures, as well as a significant lack of labour in almost all economic sectors in the Republic of Croatia and a continuous increase in salary costs. All of the above can significantly affect the realisation of planned business expectations in 2025. By achieving the stated business goals, and under the assumption of a year-round business activity in its full scope, i.e. at the level of all sectors and profit centres, as well as providing for the absence of limiting factors, we believe that the Company has ensured long-term economic sustainability and security, a stable financial position, fixed assets and capital, as well as ensured its business activity in 2025. 4.2 Information on acquisition of own shares In 2024, the Company acquired 10,450 own shares, designated as ILRA, which constitute 0.43% of the share capital. As at 31 December 2024, the Company owns 15,493 own shares, constituting 0.64% of the share capital. 4.3 Subsidiaries Ilirija d.d. owns 100% of its two subsidiary companies: ILIRIJA GRAĐENJE d.o.o. with registered office in Bi- ograd na moru, the registered objects of the company being the performance of construction works, ILIRIJA NAUTIKA d.o.o. with registered office in Biograd na moru, the registered objects of the company being tourism, nautical and hospitality activities (not active). 4.4 Financial instruments Financial instruments reported in the balance sheet include money and bank account balances, receiva- 4 2024 COMPANY MANAGEMENT REPORT 42ANNUAL REPORT FOR THE YEAR 2024 bles, account payables, leases and loans. The specific applied recognition methods are disclosed in individual explanations of accounting policies for each item in the notes to the Company’s financial statements. 4.5 Risks and risk management The Company assesses risks at all levels of significance to the Company, i.e. at the macro and micro levels and according to the criterion of likelihood of their occur- rence. The Company assesses the risks for each of the business sectors according to the criterion of likelihood of risk occurrence and consequences or impact of each individual risk on the Ilirija d.d. business processes and system as a whole. The Company’s risk management process involves the following essential steps: • identification of potential risks; • assessment of the likelihood of occurrence of the Company's risk; • assigning responsibilities and taking actions in order to eliminate and/or reduce risks; • monitoring and reassessment of risks in order to avoid their negative impacts; • Exchange of information on the activities undertaken 4 2024 COMPANY MANAGEMENT REPORT and the results of actions between the business pro- cess managers and the Company’s Management Board through the lines of communication established by the prescribed procedures. The company recognizes the following types of risks in its operations: 1) Economic and financial risks 2) Regulatory risks 3) Tourism activity risks 4) Global risks and risks of the macroeconomic environment 1 Economic and financial risks On 12 July 2022, the Council of the European Union adopted the Decision on the adoption of the euro in Croatia on 1 January 2023, establishing that the Re- public of Croatia fulfils all the requirements for the in- troduction of the euro as the official currency in the Republic of Croatia, as well as Council Regulation (EU) of 12 July 2022 regarding the euro conversion rate for Croatia, establishing that the conversion rate shall amount to HRK 7.53450 for one euro. In accordance with the aforementioned Decision and Regulation, the Government of the Republic of Croatia adopted the Decision on the announcement of the introduction of the euro as the official currency in the Republic of Cro- atia, setting out that the euro shall become the official monetary unit and legal tender in the Republic of Cro- atia on 1 January 2023. The introduction of the euro as the official currency in the Republic of Croatia sig- nificantly affects the Company’s exposure to currency and price risks. More precisely, with the adoption of the aforementioned decisions/regulations at the level of the European Union and the Republic of Croatia, the Company is no longer exposed to currency and price risks. In terms of credit risk, i.e. the obligation to repay loans used by the Company, taken out with a currency clause, which were dependent on the movement of the Cro- atian kuna exchange rate against the euro, the intro- duction of the euro as the official currency eliminates the said risk. Indebtedness of the Company with the commercial bank is for the most part subject to fixed interest rates. Taking this into consideration, the Com- pany is not exposed to interest rate risk on that basis. For the purpose of reducing credit risk, the Company strives to reduce its overall credit liabilities to an ade- quate, i.e. a higher level in order for them to be lower than its own sources of funds. In its operations, as one 43ANNUAL REPORT FOR THE YEAR 2024 4 2024 COMPANY MANAGEMENT REPORT of the foundations of its business and financial secu- rity, the Company strives to have as little net debt as possible, thus significantly reducing the existing credit risk. Financial assets that may potentially expose the Company to credit risk are cash and trade receivables. Trade receivables pertaining to certain customers may entail credit risk, depending on the level of turnover realised with certain customers and the general state of liquidity in the country. Trade receivables are re- ported with reference to real values. The Company ac- tively monitors and manages trade receivables, at the same time taking especially into account the difficult macroeconomic situation, and applying measures of collection in instalments; and, if necessary, eventually undertaking measures of enforced collection, including by activating security instruments for the purpose of collection of its claims. An adjustment of the value of trade receivables is indicated when there is objective evidence that the Company will not be able to collect all of its claims in accordance with the agreed terms. Apart from the aforementioned, the Company has no exposure to any other significant credit risk. Liquidity management implies maintaining a sufficient amount of money in order to settle the Company’s lia- bilities. One of the primary Company goals in the chal- lenging business environment caused by unfavourable macroeconomic environment is to maintain its current liquidity. The Company is, therefore, undertaking activ- ities to diversify its existing and secure new financing sources if necessary, it is trying to minimise and opti- mise all of its operating costs, and is willing to and ca- pable of actively cooperating with all significant credi- tors by settling the liabilities they had at the time when challenging business conditions materialised. The continuous growth of strong inflationary pres- sures primarily caused by increases in the prices of primary energy products (oil, gas, electricity), which subsequently spread to consumer goods and services (especially food and beverages), along with the current geopolitical instability essentially generated strong inflation impacts not only on business entities of Eu- ropean Union countries, but also on their society in general. If they remain strong, inflationary pressures could affect purchasing power and new demand gen- eration, and slow down economic activities in the euro area. In the Republic of Croatia, the prices of goods and services for personal consumption, measured by the consumer price index, in 2024 were on average 3% higher than in 2023. As for the energy costs, primarily electricity as the primary energy source, the Compa- ny managed to protect itself from significant increases in electricity prices in time, namely with a multi-year contract, which mitigated the impact of the increase in electricity prices on total operating costs. The very in- tense increase in food and beverage costs constitutes a strong generator of inflation growth and at the same time accounts for a significant share of the operating expenses and significantly affects the prices of services in the hospitality and tourism industry. Therefore, by actively monitoring food and beverage prices and co- operating with key suppliers, the Company strives to minimise such prices as much as possible, i.e. ensure stability and security of the supply along with the high- est possible procurement cost control. On the other hand, through dynamic daily management of accom- modation unit prices, it aims to achieve the maximum level of competitiveness possible, as well as intense and systematic demand monitoring, and a quick and strong response to market trends, while at the same time striving for a timely response to potentially nega- tive challenges and impacts such as inflation. Bookkeeping values of the following items of financial assets and financial liabilities reflect their respective fair values: money, investments, trade payables, other receivables and other liabilities, loans granted to em- 44ANNUAL REPORT FOR THE YEAR 2024 4 2024 COMPANY MANAGEMENT REPORT ployees, long-term liabilities. 2 Regulatory risks: As one of the most significant risks in business oper- ations of tourism companies, Ilirija d.d. included, the Company points out unresolved property rights issues concerning tourism land and legal investments in the maritime domain and the related issues of protection of acquired rights based on legitimate investments and of legitimate expectations of companies perform- ing their activities on the maritime domain or tourism land. The Company is exposed to changes in tax and other regulations within the legal system of the Republic of Croatia. In particular, this applies to the regulations pertaining to the maritime domain and tourism land, in which domain the company has made significant in- vestments crucial for its business, while not all rights guaranteed by the Constitution in the field of acquired rights before, during and after conversion, the protec- tion of legal capital investments, and the legitimate ex- pectations regarding legal investments have been fully realised under Articles 48 and 49 of the Constitution of the Republic of Croatia. Tourism land – unresolved issue Pursuant to the Act on Tourism and Other Construction Land Not Evaluated in the Conversion and Privatisation Process (hereinafter: the Act), adopted in July 2010, the Company submitted to the Republic of Croatia, within the legally prescribed deadline, i.e. in January 2011, an application for a concession on tourism land for the “Park Soline” campsite in Biograd na Moru for a period of 50 years. Due to unclear provisions of the Act, no de- cision has been rendered during its validity regarding the Company’s application. In the meantime, in May 2020 a new act on non-evaluated construction land was adopted, and thus the Act on Tourism and Other Construction Land Not Evaluated in the Conversion and Privatisation process ceased to have effect. The new Act provides for the right of tourism companies to submit an application for leasing construction tour- ism land for a period of 50 years. In March 2021 the Company submitted the appropriate application for leasing construction land in the campsite for a period of 50 years to the competent authority of the Republic of Croatia, that is, to the Ministry of Physical Planning, Construction and State Assets. Under the provisions of the Act on Non-Evaluated Construction land, a com- pany shall become the owner of buildings, land under buildings and land in the campsite that were evaluated and entered into the value of social capital in the con- version and privatisation process, while the Republic of Croatia shall become the owner of buildings and land in the campsite that were not evaluated and entered into the value of social capital in the conversion and privatisation process (so called Parts of the campsite owned by the Republic of Croatia). In the meantime, on 1 April 2022 the Company, in accordance with Arti- cle 18) of the Act on Non-Evaluated Construction Land, obtained from the Centre for Restructuring and Sales the Certificate of Conformity of the Geodetic Survey Report, which confirms the conformity of the Park So- line Campsite Geodetic Survey Report with the deci- sion of the Croatian Privatisation Fund of 12 July 1996, by which the real property concerned was evaluated in the process of conversion of the socially-owned enter- prise “Ilirija” Biograd na Moru. Furthermore, the legislator also adopted the Ordinance on the Arrangement of Leases on Parts of the Camp- sites Owned by the Republic of Croatia (OG 16/24) (hereinafter: Ordinance on the Arrangement of Leases) which, as a by-law, has been in force since 9 February 2024, and which determines the methods and con- 45ANNUAL REPORT FOR THE YEAR 2024 4 2024 COMPANY MANAGEMENT REPORT ditions of payment of fees for the lease of unvalued parts of the campsite. The Republic of Croatia, through the departmental Ministry of Physical Planning, Con- struction and State Assets, in a letter dated 22 April 2024, invited ILIRIJA d.d. to pay the lease fee based on the aforementioned Ordinance, and Ilirija d.d. was calculated lease fee for the period from the date of entry into force of the Act on Unvalued Construction Land until 31 December 2023. (05/2020 – 12/2023) in the total amount of EUR 538,912.31. The amount determined in this way, in accordance with the Ordi- nance on the Arrangement of Leases, represents 50% of the lease fee for the “Park Soline” campsite, while the remaining 50% of the lease fee shall be calculated according to the decision from Article 17.1 of the Act on Unvalued Construction Land, i.e. the conclusion of a 50-year lease agreement in accordance with the Act. For the next period starting from 2024, the competent Ministry determined the annual lease fee for the “Park Soline” campsite in the amount of EUR 171,624.15, payable in 12 equal monthly instalments, and has is- sued the lease fee invoices to ILIRIJA d.d. ILIRIJA d.d. has duly paid the aforementioned annual lease fee for the year 2024, which amount in accordance with the Ordinance on the Arrangement of Leases, represents 50% of the lease fee. Also, the Company published on its website and on the website of the Zagreb Stock Exchange the “Study of the uniqueness and sustainability of the “Park Soline” camp- site in Biograd na Moru as an economic and function- al-technological unit within the business system of Ilirija d.d.”, which addresses all relevant issues concerning the “Park Soline” campsite in the context of the application submitted by Ilirija d.d., in accordance with the Act on Non-Evaluated Construction Land, for exercising the right to a long-term lease of the “Park Soline” campsite for a period of 50 years. The purpose of the aforemen- tioned Study is to enable all stakeholders, entities and public bodies that are directly or indirectly involved, within their respective spheres of competence, in re- solving the issue of campsite land that was not evalu- ated in the process of conversion and privatisation of socially-owned enterprises, an integral and compre- hensive overview of all aspects of the existing “Park Soline” campsite in Biograd, from complex relations regarding property rights, issues of spatial planning and the need to respect the campsite as an integrated business and functional unit of tourist land and build- ings. The Company maintains that, in accordance with the Act on Non-Evaluated Construction Land, it meets the requirements stipulated by the Act for exercising the right to lease construction land in the Campsite for a period of 50 years. Maritime domain The Company is a concessionaire of the Kornati nautical tourism port in Biograd na Moru (hereinafter: Marina Kornati) for a period of 32 years, counting from 13 Jan- uary 1999, and in accordance with Article 22 of the Act on Maritime Domain and Seaports (Official Gazette Nos 153/2003, 100/04, 141/06, 38/09, 123/11 and 56/16, hereinafter referred to as: ZPDML 2003) on 17 October 2017 the Company submitted to the Government of the Republic of Croatia, through the competent Ministry of the Sea, Transport and Infrastructure of the Republic of Croatia, a request for modification and amendment of the Decision on Concession and the Concession Agree- ment, that is, for extending the term of the concession by a period of 50 years, i.e. until the year 2049 (extension of the concession term if new investments are econom- ically feasible for it), primarily considering the same or similar cases from the recent Croatian practice where, upon an application for the extension of the concession term submitted by other companies engaging in nautical tourism and competing with Ilirija d.d., the concession term for marinas was extended to them by a period of 46ANNUAL REPORT FOR THE YEAR 2024 4 2024 COMPANY MANAGEMENT REPORT 50 years. As no meritorious decision was made on the said re- quest, on 11 July 2018, Ilirija d.d. delivered to the Min- istry of Maritime Affairs, Transport and Infrastructure a letter informing them of having procured an amend- ment to the construction permit for the reconstruction of the marina, as part of the new investment included in the application for an extension of the concession licence validity. Moreover, on 6 October 2021, the Company delivered a letter to the Ministry of Maritime Affairs, Transport and Infrastructure and the Ministry of Finance of the Republic of Croatia, so as to initiate the adoption of the decision regarding an extension of the concession licence validity. In the meantime, on 02 November 2021, the Com- pany received a statement from the Ministry of Fi- nance of the Republic of Croatia, as a body which, along with the competent Ministry of the Sea, Trans- port and Infrastructure of the Republic of Croatia, is involved in the procedures for extending the terms of concessions, in which they essentially point out that in order to conduct the procedure for extend- ing the concession agreement, the competent Min- istry of the Sea, Transport and Infrastructure, while looking at the problems of the nautical tourism sys- tem, needs to establish whether the decision on the concession or the agreement related to it may be changed without conducting a new procedure for granting the concession, in order not to violate the principle of market competition with other conces- sionaires in the Republic of Croatia. Considering the statement of the competent author- ities and the expressed views, in order to success- fully complete the procedure for extending the con- cession licence for Marina Kornati, Ilirija d.d. sent a supplement of the existing request for extension of the concession licence validity for Marina Kornati to the Ministry of the Sea, Transport and Infrastructure on 28 December 2023, in which it essentially offered: a new increased amount of investment in the mar- itime domain (superstructures and substructures), new increased investments in the green transition, including the decarbonisation and digital transfor- mation in accordance with Regulation (EU) 2020/852 of the European Parliament and Council of 18 June 2020, on establishing a framework for facilitating sus- tainable investments and amending Regulation (EU) 2019/2088 Official Journal of the European Union, L 198/13, in the total amount of new investments of: EUR 5,705,066.00, for which the Company has mostly obtained valid building permits and which ensure or- derly and legal performance of marina activities with regard to existing technical, technological and envi- ronmental requirements for operation in the period until the expiry of the concession. Also, the Company proposed new amounts of concession fees with ref- erence to previous revalued investments in Marina Kornati, which, in the period from 2000 until the end of 2023, amounted in total: EUR 16,013,277.44, all in order to show the actual absolute value of the invest- ments to date, and the Company also explained the legal issues relevant for making a positive decision, in accordance with the transitional and final provisions of the new Act on Maritime Domain and Seaports (Official Gazette no. 83/2023, hereinafter: ZPDML23), which entered into force on 29 July 2023, so that the procedures for granting and modifying concessions that were started according to the provisions of ZPDML03 have to be completed in accordance with the provisions of that Act. No decision has been ren- dered yet on the alleged supplemented request for an extension of the concession licence validity for Marina Kornati. As regards the Ilirija-Kornati Hotel Port in Biograd na Moru, the Company delivered to the Republic of Cro- 47ANNUAL REPORT FOR THE YEAR 2024 4 2024 COMPANY MANAGEMENT REPORT atia (Zadar County) on 19 January 2011 a request with detailed explanations for an extension of the conces- sion licence validity for a period of 20 years, but the competent authority of the regional self-government unit has not reached a decision on this Request by Il- irija d.d. Furthermore, and with regard to the above, in February 2015, the Company once again, pursuant to Article 22 of the Maritime Domain and Seaports Act (new investment), submitted a request to the Za- dar County regarding an extension of the concession licence validity for the Ilirija-Kornati Hotel Port, for a period of 30 years in total, but a decision has not been made regarding this request by Ilirija d.d. As regards a beach facility with an outdoor swimming pool in Bi- ograd na Moru, the Company submitted to the conces- sion licence grantor, Zadar County, a request for an ex- tension of the concession licence validity for a total of 30 years (until 2028) with all the necessary documenta- tion, back on 20 October 2008 (before the expiry of the concession licence validity). The competent authority still has not decided on this request. The company has been paying the concession fee in the agreed amount for all of the aforementioned facilities this whole time. On 24 June 2022, the Company published on its web- site and on the website of the Zagreb Stock Exchange the research paper of Assoc. Prof. Iva Tuhtan Grgić, PhD, from the Faculty of Law in Rijeka “Acquired rights and legitimate expectations of former holders of the right of use of the maritime domain for an indefinite period as well as for a limited period for as long as eco- nomic activity is being carried out”, which precisely on the example of Ilirija d.d. addressed the issues of legal capital investments on the maritime domain, con- version of socially-owned enterprises that had part of their assets on the maritime domain, issues of acquired rights and legitimate expectations of former holders of the right of use of the maritime domain, and conver- sion of the right of use into a time-limited concession. In particular, as it is stated in the aforementioned re- search paper, the companies that had the permanent right of use of the maritime domain, acquired on the basis of final administrative decisions of municipal assemblies, had indisputably acquired rights and le- gitimate expectations that they would be able to use these rights in the future under the same conditions under which they were acquired. However, by deci- sions adopted on the basis of the legislation in force at the time, the aforementioned right of permanent use of the maritime domain was subsequently converted into the right of economic exploitation of the mari- time domain based on a time-limited concession. This violated the interests of companies, shareholders and acquirers of shares in these companies, by grossly en- croaching on the acquired rights and legitimate expec- tations that they will be able to use the acquired rights within the same scope as when they acquired them, and those same rights are protected by the provisions of the Constitution of the Republic of Croatia (Articles 48(1) and 49(2) and (4)) and Article 1 of Protocol No. 1 to the Convention for the Protection of Human Rights and Fundamental Freedoms. On 14 July 2023, the Croatian Parliament adopted a new Maritime Domain and Seaport Act, which entered into force on 29 July 2023. It is evident that the new Act has a series of new provisions, and a certain amount of time will need to pass before we are able to fully assess its effect on complex matters in the area of legal investments in the maritime domain before and after the conversion, evaluation and entering in the share capital of former social enterprises, as well as on ac- quired legal and legitimate expectations of companies who perform legal activities in maritime domains. 3 Tourism activity risks In addition to the listed and described potential and 48ANNUAL REPORT FOR THE YEAR 2024 4 2024 COMPANY MANAGEMENT REPORT possible risks in the Company’s business operations, we believe that it is of the utmost importance to give a systematic overview of other key obstacles or restric- tions with regard to the development of Croatian tour- ism in general, and thus of tourism companies, Ilirija d.d. being one of them. With regard to the forgoing, we present an overview of the key obstacles, that is, of the risks and restrictions with regard to development of and investments in Cro- atian tourism: (I) the unresolved issue of ownership since the mo- ment of conversion, that is, property-legal, physical planning-urban and economic use and utilization of the construction tourism land in campsites and around hotels, (II) inadequately resolved or unresolved issue of con- version on the maritime domain, i.e. issues regarding acquired rights, legitimate investments and legitimate expectations in the maritime domain, having in mind, in particular, the contracted permanent right of use of the maritime domain, while companies which took part in the conversion process, as is the case with our Company, carry out economic activity on the maritime domain, contrary to the provisions of Article 49 and Ar- ticle 50 of the Constitution, (III) VAT rate on services in tourism and hotel industry is much higher than in competitive countries, which consequently makes Croatian tourism less competitive, hinders and slows down further investments both in the construction of new accommodation facilities and in improvement of the existing services and standards, affects new employment and salaries in tourism and hospitality, (IV) insurmountable obstacles regarding existing bu- reaucracy, administrative barriers, frequent changes of regulations, (V) complex and time-consuming procedure of issuing spatial plans and issuing building and operating permits, (VI) inadequate management of the area by regional or local self-government, (VII) cancellation of previously acquired rights in urban and spatial plans through conversion of use primarily of construction and tourism land for other non-com- mercial and non-economic purposes, (VIII) fiscal and parafiscal charges unsuitable to sea- sonal business activities with frequent changes in fiscal regulations. (IX) skilled labour shortages were significantly pro- nounced in 2024 in the Republic of Croatia, namely at the level of most economic activities, and with a spe- cial emphasis on hospitality and tourism taking into account the seasonal nature of Croatian tourism, as well as the fact that it is an extremely labour-inten- sive industry; therefore, skilled labour shortages (with a special emphasis on occupations in high demand) could affect the success of the peak season, and thus ultimately of the entire business year. Bearing in mind all of the above, the Company has rec- ognized risks pertaining to the said skilled labour short- ages, and it undertakes a series of activities to retain working-age, highly qualified and professional employ- ees at all levels for business operations, namely with the aim of retaining full employment, raising the level and quality of services, and achieving smooth opera- tion of business processes through activities aimed at improving the financial standing of employees, invest- ing in their education, and further developing human resources by hiring young, highly educated persons from different professions. 49ANNUAL REPORT FOR THE YEAR 2024 4 2024 COMPANY MANAGEMENT REPORT 4 Global risks and the macroeconomic environment Considering the global nature of the hospitality and tourism industry, different events and activities at the global level can significantly affect the operations of tourism companies. As such, the said industry is influ- enced by geopolitical risks with strong implications for security and stability at the global level, the security, political and economic instability of the region, i.e. of the countries in the immediate vicinity of the Repub- lic of Croatia, the global economic crisis, global health threats such as pandemics and epidemics, as well as the climate impact risk. In today’s globalised world, the said risks affect the free movement of people, goods and capital, i.e. na- tional economies and operations of economic entities. In addition to the aforementioned risks referred to in points 1 – 3, the most significant global risks for the Company’s operations are: the health risk, the geopo- litical risk, the climate impact risk, and the macroeco- nomic environment. Health risk Since 2020, the world faced an unpredictable, serious and extremely dynamic risk related to the epidemio- logical situation, i.e. the COVID-19 illness, which has had an extremely negative impact on business entities in almost all industries, albeit the most severely affect- ed ones are certainly the travel industry, tourism and hospitality, all of which form an integral part of the Company’s core business. The COVID-19 risk is also the biggest and most serious risk that the Company has faced so far, to which the Company responded with a number of measures and activities by reorganising its business processes and operations in order to safe- guard the health and well-being of guests and employ- ees, maintain financial stability and current liquidity for the duration of the COVID-19 pandemic, preserve assets and capital as well as business operations and activities, and retain full employment. The Company has successfully achieved all of its goals. The Company continues to implement different preventive activities within its business processes and operations in order to reduce and always be able to control health risks, just like it did during the COVID-19 pandemic. However, the Company is also aware of the related limitations and the unpredictability of easily transmissible infec- tious diseases and the threatening consequences of their spread. Geopolitical risk Due to the war in Ukraine, geopolitical risk with strong implications for European and global security and the macroeconomic environment has been present since February 2022. Therefore, the Company also reports on such risks and their consequences on its operations. The Company does not have any kind of an ownership relationship with entities from Russia and Ukraine. Moreover, it does not have any assets in Russia and/ or Ukraine, and it has not made any investments in entities from Russia and Ukraine or entities material- ly related to entities from Russia and Ukraine. Thus, the Company is neither exposed nor are there any potential consequences in this respect. Moreover, the Company has no exposure to entities from Russia or Ukraine since it does not do business with legal entities from Russia or Ukraine. The Company does business as a company specialised for hospitality and tourism has a business relationship with natural persons from Russia and Ukraine using the Company’s services such as accommodation in its facilities (hotel, camping and nautical sectors). The share of guests from Russia and Ukraine in the Company’s total turnover is insignificant, and losing it does not represent a risk to the Company. 50ANNUAL REPORT FOR THE YEAR 2024 4 2024 COMPANY MANAGEMENT REPORT Should the crisis, that is, the war, spread from Ukraine to other European countries or lead to destabilisation of the countries in the Balkans, this would surely have a negative effect on Croatian tourism as a whole, and thus also on the Company. Croatian tourism generates most of its turnover from the European outbound mar- ket, which could be significantly reduced in case the Russian-Ukrainian crisis, that is, the war, spreads across Ukrainian borders and causes major geopolitical insta- bility in the wider European region. The Company will counteract any potential negative effects of the Rus- sian-Ukrainian crisis by adjusting its business processes and activities to the new circumstances, with the aim of strengthening the resilience of its business system. Climate impact risk The Company bases its business policy on manage- ment in line with the principles of sustainable and responsible development, with particular focus on en- vironmental protection, as the environment is the fun- damental resource of the tourism industry. Environ- mental protection represents a significant segment of the Company’s integrated management systems and is a part of its strategic decisions and business processes. The consequences of climate change are becoming in- creasingly influential when it comes to almost all activi- ties. In the tourism sector and within the Company, they have been recognised as climate impact risks requiring an interdisciplinary approach and management. The Com- pany continuously monitors its impact on the climate, i.e. its greenhouse gas emissions and other environmental impacts, namely in accordance with all applicable legal regulations and prescribed limit values. The Company has previously recognised its impact on the environment and decided on a systematic ap- proach with a series of activities it carries out. They mainly pertain to the preservation of natural resources (water, air, soil, and coast), biodiversity, energy man- agement, and waste management, which ultimately confirms the Company’s focus on sustainable devel- opment and growth. The identified risks included the dangers brought on by climate change both at the glob- al level and at the level of the Company’s operations. We also noticed that extreme weather conditions can affect tourist demand and cause direct material dam- age to the Company’s assets. Climate change, which has a significant impact on the tourism industry globally, also poses a potential risk to the Company in terms of significantly increasing the incidence of extreme weather conditions (storms, hurricanes, etc.), as well as strengthening their in- tensity and unpredictability, and can cause extraor- dinary and unpredictable damage and threats for its business. Temperature variability, i.e. dangerous heat waves, reduce the attractiveness of our offer in holiday capacities. This directly affects arrivals and quality of stay. Rising sea levels put the infrastruc- ture in the immediate vicinity of the coast at risk. The same also applies to the marina, arranged beaches, and beach facilities. Unpredictable windstorms or hurricane-force winds can cause direct damage to al- most all our capacities. The Company pays maximum attention to overcoming such sudden and extreme climate and weather conditions by ensuring preven- tive, technical and spatial, as well as functional and organisational elimination of sudden and accidental risks of any nature to the highest degree possible. Other business risks, such as large-scale fires, acci- dental pollution of the coastal and marine aquarium, which are all beyond the Company’s control but may potentially jeopardise the Company’s business safety, are the circumstances which the Company attends to insofar as it can actively contribute to lowering their impact on the Company’s long-term business viabil- ity as much as possible, being aware of the fact that 51ANNUAL REPORT FOR THE YEAR 2024 4 2024 COMPANY MANAGEMENT REPORT the Company’s impact here is reduced to measures which cannot be of key importance for the elimina- tion of all the risks posed to the Company. Macroeconomic environment The unfavourable macroeconomic environment, i.e. significant economic uncertainties resulting partially from the global pandemic that affected supply chains, and partially from the Russian-Ukrainian war, led to disruptions in the supply of basic energy products in the euro area and resulted in a significant increase in the prices of all energy products (oil, gas, electricity), and ultimately strong inflationary pressures. An un- certain macroeconomic environment can affect the Company’s business activities by reducing the de- mand for its services as it significantly contributes to the deterioration of the business climate in the key outbound markets for Croatian tourism. This could also result in a slowdown in economic activities and a decrease in purchasing power and standards, as well as, ultimately, in a decrease in travel demand, which would definitely affect the achievements of Croa- tian tourism companies, including our Company. The company is aware of the challenges and risks aris- ing from the unfavourable macroeconomic environ- ment, and it undertakes a number of activities aimed at preserving its core business objectives (economic viability and security, financial stability, preservation of the Company’s fixed assets and capital, and preser- vation of the Company’s business operations and ac- tivities), as it did in previous years, namely based on: (I) commercial resilience – based on the Company’s ability to quickly and efficiently adapt to the current market circumstances of doing business by adjusting its marketing and sales activities in all Company sec- tors, (II) operational resilience – based on the abil- ity to adjust operational business processes to the current circumstances whilst maintaining maximum service and amenity quality and minimising possible negative effects, and (III) financial resilience – based on the Company’s ability to maintain financial stabil- ity of the business system by maintaining liquidity, assets and business activity through the realisation of revenue ensuring the Company’s business stabil- ity until key global and macroeconomic uncertainty factors end. Information system security with a particular focus on cybersecurity The increase in threats to the information security of business systems on a global level together with the increasing and more complex digitalisation of business processes make the information systems of companies more exposed to various forms of se- curity threats. As a result, the Company, in order to raise the level of information security and resilience with a particular focus on cybersecurity, maintain the stability and continuity of operations and preserve information and data, actively works to protect the security of the information system by the strength- ening and adapting information system security standards and practices, training employees, per- forming regular system updates, controlling supply chains of digital services and implementing new se- curity technologies. 4.6 Sustainable development and cor- porate social responsibility This chapter offers a concise presentation of the busi- ness model for sustainable development and the basic policy implemented by the Company to ensure sus- tainable and responsible operations. For the purpose of providing a complete overview of its activities and business transparency, the Company draws up a sepa- rate sustainability report, in which it provides an over- 52ANNUAL REPORT FOR THE YEAR 2024 view of key environmental, social and management aspects, data and indicators (both qualitative and quantitative) as well as a description of activities and policies implemented by the Company as part of the key corporate social responsibility areas: economic, so- cial, environmental and management. The Company will draw up and publish a full and sep- arate report on its activities in the field of sustainable development and corporate social responsibility for 2024 on its website (www.ilirijabiograd.com). Description of the entrepreneurial business model from the perspective of corporate sustainability and responsibility The Company’s business operations are anchored in the principles of sustainable development, which pre- suppose that economic development does not endan- ger the existing natural resources, the cultural, histor- ic and natural heritage. This approach of responsible and sustainable tourism, which harmonises all present and future economic, social, managerial and ecologi- cal demands of all participants in the business process, ensures the long-term viability of the Company as a business entity, tourism as an industry and a future for generations to come. Likewise, the Company focuses on continuous econom- ic growth and development, maintaining competitive- ness in the tourism industry with the aim of contribut- ing to the well-being of the local community and way of life of the tourist destination through its operations, but also to harmonising the interests of all participants of the business process – starting from shareholders, employees, customers, suppliers, other creditors, the local and broader social community, without jeopardis- ing the preservation of nature and the natural resourc- es used by the Company. Having tourism activities as the Company’s primary ac- tivities has significant economic impacts on the society, both at the local and the national level. However, tour- ism is a highly complex industry that includes numer- ous shareholders and requires considerable amounts of resources. As such, and depending on the mode of tourism service management, tourism can have the opposite impacts. If tourism services and facilities are managed responsibly, tourism has a positive role in the social, cultural, economic and environmental develop- ment of the destination and represents a significant opportunity for the local community. This is why the Company’s imperative is comprehen- sive planning and management of sustainable tourist activities and facilities in order to ensure sustaina- ble long-term operation while respecting the needs of the local community and all the stakeholders of the Company. Stakeholders are the key factor for the Company’s successful and long-term development, so as a socially responsible entity, it defines its business strategy through dialogue with stakeholders so as to understand their general expectations as well as ex- pectations from the Company. Stakeholder dialogue defined the material, non-financial and ESG (environ- mental, social, governance) topics that the stakehold- ers perceive as topics through which the Company can influence the society, environment and economy the most. Material ESG topic covered by the Dialogue with Stakeholders represent the content of the sustainable development report and the foundations of the ESG business model and the Company’s strategy. By applying the principle of corporate responsibility and sustainability through the achieved operating re- sults, the Company creates added value for all stake- holder groups by integrating economic, social and eco- logical aspects into decision-making processes. 4 2024 COMPANY MANAGEMENT REPORT 53ANNUAL REPORT FOR THE YEAR 2024 4 2024 COMPANY MANAGEMENT REPORT The socially responsible sustainable business strategy consists of four main areas: 1) Corporate responsibility and sustainability, 2) Corporate social responsibility, 3) Environmental protection, and 4) Responsible and ethical management. 1 Corporate responsibility and sustainability In terms of corporate responsibility and sustainability, focus is placed on the future growth of the Company, its business stability and excellence that exert a marked social and economic impact on the local, regional and national economy through the Company’s activities. The responsible and sustainable business strategy is based on the following determinants: • dedication to long-term corporate sustainability and responsibility at all levels of business processes and business activities, • creating added value for the Company’s shareholder groups, • continued implementation and affirmation of the key principles of corporate sustainability and responsibility within the Company and in the broader community, • retaining and maintaining the status of the leading tourism company in the destinations where it operates, • economic and social driver of regional and Croatian economy, • year-round business development in the Company’s tourism sectors and creating added value for destina- tions in which it operates, • integrating economic and social aspects and care for the environment into the decision-making process, and • sustainable and continuous investments in the devel- opment of sustainable, high-quality, recognisable and competitive products and services. 2 Corporate social responsibility Corporate social responsibility with regard to the re- lationship towards the social community is carried out through the development of the local and regional economy, employing the local population, corporate philanthropy system, activities in the area of the de- velopment of the destination offer and amenities, participation in the activity of expert and professional associations, and supporting other organisations, as- sociations, the local and the regional self-government. The social responsibility strategy is based on the fol- lowing determinants: • transparent and open communication with stake- holders, • active role in the business community (membership in business and expert associations), • employing the local population, • hiring local suppliers, • encouraging the development of the tourism offer of the destinations in which we operate, • care for employees by ensuring the right to personal and professional development and concern for mate- rial rights, • implementation of the business diversity and non-dis- crimination principle, and • corporate philanthropy supporting the activities and projects of wider interest to the community. 3 Environmental protection The Company has established policies, procedures, standards, and operational practices related to the en- vironment, quality and management, and they include part of the Company’s activities in the field of corpo- rate social responsibility, quality, and environmental protection. As the leading tourist company in Biograd na Moru and its surroundings, the Company is aware of the impact of its business activities and operations 54ANNUAL REPORT FOR THE YEAR 2024 4 2024 COMPANY MANAGEMENT REPORT on the environment, which is why it is committed, in the long term, to protecting and preserving the envi- ronment as the basic resource for tourist activities, as well as to preventing pollution, i.e. minimising it, in all of its business processes and activities. The Company sees environmental protection as a rational manage- ment of all natural resources and a systemic pursuit to decrease adverse impacts of our operations on the environment, natural resources and cultural heritage. Moreover, the Company has drawn up an Environment and Quality Policy containing the basic management objectives and principles for the purpose of achieving the objectives. Additionally, the Company has internal ordinances and manuals pertaining to environmental and quality management as part of its integrated man- agement system ISO 9001:2015 and ISO14001:2015 and implements international environmental brand criteria into its operations. The Integrated Environment and Quality Policy is based on the following: • continuously meeting the needs and expectations of the customers/guests, • continuous care for guest and employee safety, • continuous commitment to environmental protec- tion, including pollution prevention and sustainable use of natural resources, • continuous compliance with relevant legislation and other binding requirements, • continuous improvement of processes and services, as well as the overall quality and environmental man- agement system, • continuous improvement of the knowledge and mo- tivation of employees, • continuous value creation – preservation of Ilirija d.d. Detailed information on the Company’s environmen- tally responsible activities is contained in the chapters “Quality – Standards and Certificates” and “Occupa- tional Health and Safety”. 4 Responsible and ethical management Ilirija operates in accordance with principles and prac- tices of good corporate governance, providing a high level of transparency and accountability in relation to its stakeholders. The global sustainable development goals are universal, indivisible and indispensable. They must hold a dominant position in the future and be ap- plied in all countries and communities and by all peo- ple. Being a leader in the application of responsible and sustainable practices is both an honour and a responsi- bility – as a responsible company, we are a compass for the development of the overall economy and commu- nity. These are our main determinants that guide us in responsible, sustainable and ethical management and operation. The Company has a dualistic management structure with clearly separated powers and responsibilities, it applies the corporate governance code and code of business ethics, clearly set and communicated busi- ness objectives and adheres to the diversity and equal opportunity principles, hires domestic and local suppli- ers, conducts activities in the domain of occupational and guest health and safety, implements employee ed- ucation and training, etc. The responsible and ethical management strategy is based on the following determinants: • responsible and ethical management at all levels, • respect for legal regulations, respect for human rights, diversity and equality, • transparency in business and stakeholder relation- ships, • striving for excellence in our services and opera- tional processes through implementing domestic and 55ANNUAL REPORT FOR THE YEAR 2024 4 2024 COMPANY MANAGEMENT REPORT international management, service quality and safety standards, • internal acts with a clearly defined job description, responsibilities and rules of conduct of the manage- ment structure (Management Board and Supervisory Board), • application of the Corporate Governance Code and the Code of Business Ethics of the Croatian Chamber of Commerce, • care for guest and employee health and safety, and • responsible conduct in terms of environmental pro- tection. The Management Board of the Company is composed of one member (Mr Goran Ražnjević), so there is no un- der-representation on one gender in the Management Board. The Supervisory Board consists of 5 members, of which all are male. The members of the Superviso- ry Board were elected by the decision of the General Assembly of 25 October 2024, which was convened before the amendments to the Companies Act (Official Gazette 136/2024) entered into force, and as existing members of the Supervisory Board, they hold office until its regular expiration. The Company supports the aspect of diversity and in this regard, during 2024, several women were appointed to leading positions in the organisational structure. Of the total number of employees as at 31 December 2024, women make up 52% of all employees. In the Company's management consisting of the Management Board, sector managers and heads of corporate services, there are 16 persons, 71% of whom are women. In future appointments, the Company will, in addition to the criteria of expertise, knowledge, abilities, and professional experience, also take into account the aspect of diversity. 56ANNUAL REPORT FOR THE YEAR 2024 5 BUSINESS CAPACITIES 5 BUSINESS CAPACITIES OF THE COMPANY AND ADDI- TIONAL FACILITIES The portfolio of ILIRIJA d.d. consists of four hotels and a villa, Marina Kornati with the Ilirija-Kornati Hotel Port, the “Park Soline” Camp, destination management company Ilirija Travel with its own capacities (Arsenal in Zadar, the “Nada” event boat, agritourism and Villa Primorje), City Galleria Business and Shopping Centre, Tennis Centre, Aquat- ic Centre and hospitality facilities. Restaurant “Park Soline” Campsite “Park Soline“ Tennis center Ilirija Villa Primorje Ražnjevića dvori Polača Hotel port Hotel Adriatic Hotel Ilirija Hotel Kornati Ilirija Travel Event ship "Nada" Marina Kornati Restaurant "Marina Kornati" Arsenal Zadar City Galleria Zadar Villa Donat, Sv.Filip i Jakov Beach bar Donat, Sv. Filip i Jakov Beach Club Ilirija 57ANNUAL REPORT FOR THE YEAR 2024 58ANNUAL REPORT FOR THE YEAR 2024 5.1 HOTEL SECTOR The hotel sector capacities consist of 435 accommoda- tion units (hotel rooms and apartments), with a total of 910 beds located in Biograd na Moru (Ilirija, Ko- rnati, Adriatic) and Sv. Filip i Jakov. Filip i Jakov (hotel Villa Donat/), mainly classified as four- star hotels. Hotel accommodation is located in Hotels and Villas Ilirija Resort in Biograd and Sv. Filip i Jakov. The hotels are located on the coast, not far from the town centre and beach that has been awarded the Blue Flag, and are, owing to their ideal location and infrastructure, in- tended for holiday and congress tourism. In addition to modern and technically equipped conference halls and meeting rooms intended for conferences, seminars, presentations, workshops and meetings, there are nu- merous supporting amenities such as the Wellness & Beauty Centre Salvia, an outdoor Olympic swimming pool, fitness center, à la carte restaurants and coffee bars. Within the Ilirija Resort there is a conference centre consisting of 8 halls, with a total capacity for 30 to 250 people, and there is also a luxurious garden with terraces ideal for banquets, receptions and entertain- ment, as well as outdoor swimming pools, a beach, and as of May 2018, an indoor pool. ILIRIJA RESORT – HOTEL & VILLAS The Ilirija Hotel is the largest four-star hotel of the Ilir- ija Resort, with a capacity of 157 rooms and 326 beds, equipped with a 200-seat restaurant, a terrace with 70 seats and an aperitif bar with 50 seats. It is located by the seashore, right next to the old town centre, and it is surrounded by beautiful nature, the sea and a pine forest, as well as numerous facilities offering various amenities. The design and atmosphere of the four-star K o r n a ti Hotel, with a capacity of 106 rooms and 230 beds, also featuring a restaurant having a capacity for 220 peo- ple, a terrace for 50 and a bar for 40 people, is linked to and evokes the images of the most beautiful Croa- tian national park The Kornati Hotel is unique thanks to its connection with the nautical tourism port, the Ilirija-Kornati Hotel Port, which is located in the very centre of Biograd, and right next to the hotel there is also a beach. The three-star Adriatic Hotel has a capacity of 100 rooms and 210 beds, a restaurant with a capacity of 5.1 HOTEL SECTOR 59ANNUAL REPORT FOR THE YEAR 2024 5.1 HOTEL SECTOR 230 people, a terrace with a capacity of 300 people and a bar with a capacity of 110 people. It is located in a pine forest, almost on the beach, and right next to it there is the Aquatic Centre, ideal for family fun and for a number attractive summer sea activities. The Villa Donat Hotel is located in the town of Sv. Filip i Jakov, and it consists of a villa with 16 superbly and modernly furnished rooms. It is a four-star hotel, and it has a three-star annexe. Its total capacity includes 72 rooms and 144 beds, a restaurant with 120 seats, a terrace for 50 and an aperitif bar for 20 persons, as well as an outdoor pool. The hotel is located near the main beach and the town centre, and it is reminiscent of the rich history of the area. 60ANNUAL REPORT FOR THE YEAR 2024 61ANNUAL REPORT FOR THE YEAR 2024 5.2 NAUTICAL SECTOR The Company began developing its nautical sector in 1976 when it concluded a contract on the purchase of 40 ELAN vessels from Slovenia, that is, in 1977 with the construction of the first nautical marina in Croatia (Ko- rnati Hotel Port) with 100 berths and the organisation of the first private charter fleet on the Adriatic with more than 40 vessels for the needs of boaters. There- fore, ILIRIJA d.d. is rightly considered to be a pioneer of nautical tourism on the Adriatic. The Company’s cur- rent nautical sector consists of Marina Kornati and the Kornati Hotel Port, with a total of 805 berths at sea and on land, which can accommodate up to 2000 boaters in one day, and its number of berths, modern techni- cal equipment, quality of service and cleanliness (blue Flag) make Marina Kornati one of the three leading Cro- atian marinas, visited by over 60,000 boaters a year. In 2020 the Ministry of Tourism and Sport carried out the procedure of recategorisation of the Marina Kor- nati Nautical Tourism Port in which it established that Marina Kornati meets the requirements prescribed for the four-anchor category. Subsequently, the Marina Kornati Nautical Tourism Port received the four-anchor (star) category rating. Marina Kornati has received numerous awards, nota- bly the Special Award as part of “XVI Tourism Flower – Quality for Croatia 2012”, organised by the Croatian Chamber of Commerce and Croatian Radiotelevision, for the best marina in the category of marinas with over 450 berths. In 2013, in “XVII Tourism Flower – Quality for Croatia 2013”, it received an award in the category of the largest marinas, while in 2014 and 2015, as part of the same project, it ranked second in the “Best Large Marina” category. In 2017, in “XXI Tour- ism Flower – Quality for Croatia” it ranked third in the category “Large Marina“. In 2018, Marina Kornati was granted two acknowledgements: (I) a special acknowl- edgement from the Jutarnji list Nautical Patrol for the greatest progress achieved in the tourism season 2018 and for outstanding contribution to the development of Croatian nautical tourism and (II) in the “XXII Tour- ism Flower – Quality for Croatia” it ranked third in the category “Large Marina“. In 2019, it was awarded recognition as part of the “XX- III Tourism Flower – Quality for Croatia” competition, by the Croatian Chamber of Commerce and Croatian Radiotelevision, it ranked 2rd in the category of large marinas. The Jutarnji list Nautical Patrol awarded Mari- na Kornati a special recognition for its outstanding con- tribution to the organization and success of the nauti- 5.2 NAUTICAL SECTOR 62ANNUAL REPORT FOR THE YEAR 2024 cal patrol, while in 2021 it recognised the marina for its outstanding contribution to the development of nau- tical tourism during the COVID-19 pandemic. In 2023, the Company won the Zadar County Tourist Board annual award “For its contribution to nautical tourism and for having been organising the Biograd Boat Show for 25 years”. Ilirija d.d. is also the organiser of the leading nautical fair in Croatia, “BIOGRAD BOAT SHOW”, which has been continuously held in Marina Kornati for 26 years in a row. 5.2 NAUTICAL SECTOR 63ANNUAL REPORT FOR THE YEAR 2024 64ANNUAL REPORT FOR THE YEAR 2024 5.3 CAMPING SECTOR SECTOR The four-star “Park Soline” campsite is located in Bi- ograd na Moru within the borders of the populated area, but as a separate physical planning-urban and economic entity in the south-east part of the town of Biograd na Moru, right by the main beach in the coastal length of approx. 1.5 km, with a 450-meter beach posi- tioned right in front of the campsite. The campsite covers an area of 20.00 ha and includes 1,130 accommodation units with a total capacity for up to 3,390 persons. It is situated in an outstanding nat- ural environment of a predominantly high pine forest which provides shade to 90 % of the campsite. By ad- hering to the principles of sustainability and environ- mental protection and considering the natural features of the area by using indigenous plant species, the horti- cultural landscaping of the campsite has been complet- ed to the level of an arboretum, which is a remarkable and rare example in Croatia of creating added value for a tourism camping product. With its enriched offer of restaurants, a newly built promenade along the entire campsite and a beach leading to the centre of Biograd, the "Park Soline" camp is the right choice for a family holiday. In addition to entertainment activities for children and evening 5.3 CAMPING SECTOR entertainment, as well as an attractive sports offer guaranteeing active holidays, you can relax on long promenades and recreational trails in a healthy envi- ronment, which makes the camp a great choice for all nature lovers. The “Park Soline” campsite is the largest and the only high-quality four-star campsite in Biograd na Moru, which accounts for 77 % of the total campsite accom- modation capacities and sets the highest standards of equipment and landscaping in the destination. Since this campsite is the most valuable part of the camp- ing offer in Biograd na Moru, it directly influences the image of this destination and its positioning on the do- mestic and foreign tourism market. The value of investments made in the “Park Soline” campsite from 2000 until the end of business year 2024 amounted to approximately EUR 32.3 million and ow- ing to these investments the number of overnight stays increased from 4,556 in 1996 to 321,016 in 2024. The value of own works for the said period accounts for over 30% of the investments, meaning that the total value of investments in the “Park Soline” campsite for the said period amounted to approximately EUR 41.99 million. 65ANNUAL REPORT FOR THE YEAR 2024 66ANNUAL REPORT FOR THE YEAR 2024 5.4 ILIRIJA TRAVEL Ilirija Travel – destination management company: by developing new services and amenities, a high-quality, integrated and complementary tourism product has bee created in response to the contemporary tour- ist demand, and driven by technological, social and market factors and trends of an increasingly demand- ing market. Among the most important cornerstones when it comes to the offer and implementation of these special programmes and products are business operations conducted in our own additional facilities such as the following: Event ship „Nada“ a 36-metre multifunctional yacht with a capacity for 180 persons, with a restaurant, kitchen and bar provides guests with excellent servic- es pertaining to food and beverages during navigation. Congresses, seminars, special events, unique business meetings, gala receptions and banquets, unique wed- dings, exclusive day and night cruises and incentive events are only some of the exciting amenities that the “Nada” event boat offers, while adapting to the indi- vidual requirements of clients. Arsenal is a zero-category monument and multimedia centre located in Zadar, built in the 17th century and revitalized in 2005 as an indoor city square, or as the centre of public, cultural and entertainment life of the region, where over 100 public and private events are organized every year. Diffuse Hotel Ražnjevića dvori AD 1307 a diffuse multi- purpose functional facility located in Polača, in the mu- nicipality bearing the same name, in the heart of Ravni kotari and halfway between Biograd na Moru and Ben- kovac, is the first facility of its category in the Republic of Croatia. This set-up, based on the traditional farm facility, is a great example of an innovative tourism product conceived as a combination of the traditional and the contemporary. Villa Primorje, built in the second half of the 19th cen- tury, is a typical traditional Dalmatian stone manor house with an outbuilding. Newly renovated, luxuri- ously decorated and equipped according to the latest standards for facilities of this type and category, it has its own restaurant offering the opportunity to organ- ize a number of events, a Mediterranean garden with a promenade, while since the 2017 tourist season the offer also includes an outdoor swimming pool. Offers of trips, special offers according to the requirements of clients, sports programs, MICE etc. 5.4 ILIRIJA TRAVEL 67ANNUAL REPORT FOR THE YEAR 2024 68ANNUAL REPORT FOR THE YEAR 2024 5.5 HOSPITALITY The Marina Kornati restaurant located in the Marina Kornati, with a capacity for over 350 persons, which along with the Captain’s Club having a capacity for 70 persons can receive up to 420 persons, meets the needs of boaters when it comes to hosting various and numerous events in the Marina Kornati. In addition to restaurant services, the Captain’s Club also provides services for numerous presentations of nautical prod- ucts and serves as an ideal place for organorganiseda- tion of smaller conferences and events. The restaurant Park Soline is located in the Park Soline camp, right by the sea, about a ten minute walk away from the centre of the town of Biograd na Moru, and its food offer is based on Mediterranean cuisine. This restaurant, with a capacity for 280 persons, offers the possibility of organorganiseding various events – family festivities, banquets and soirées, as well as meetings. Within the restaurant, there is also a Dalma- tian tavern with a fireplace, a coffee shop and a wine bar arranged as a wine cellar, which provides you with the opportunity to buy and taste the highest quality red and white wine made from indigenous Croatian grape varieties. The Donat beach bar is located in the building-maga- zine within the protected cultural and historical unit of the town of Sv. Filip i Jakov, which is also entered in the Register of Cultural Goods of the Republic of Croatia. Today, it is categororganiseded as a beach bar / cock- tail bar with a capacity for 140 persons. The Lavender lounge bar located within the Adriatic Hotel located right by the beach, known for its Med- iterranean design, fully adapted for relaxation, with a beautiful view of the Pašman Canal, is a place offering the possibility of organizing numerous events of dif- ferent nature (MICE, weddings, banquets, cocktail bed bar, nightclub, etc.). 5.5 HOSPITALITY 69ANNUAL REPORT FOR THE YEAR 2024 70ANNUAL REPORT FOR THE YEAR 2024 5.6 ADDITIONAL FACILITIES Manifestation: Biograd Boat Show - the largest inter- national autumn nautical fair in the Republic of Croa- tia and the largest nautical fair held on water in South East Europe, bringing together all key representatives of the nautical industry and tourism. The nautical fair was first organised in 1999 as spring Open Days, mainly intended for companies that operate in the marina, as the first such event in Northern Dalmatia. Given its status as the cradle of nautical tourism, the aim was to organise a first-rate nautical event in Bi- ograd na Moru at which all sectors of nautical and charter activities would be presented, whereby the Open Days grew into Biograd Boat Show. Since 2004, the event has been organised as an autumn nautical fair, which contributed to the improvement of the nau- tical offer and the extension of the tourist season. The Biograd Boat Show was admitted to the International Federation of Boat Show Organizers (IFBSO) at the 50th session of the Federation held in Istanbul, Türkiye, in June 2014, and in 2015 it became its gold member. The fairs of former members of the Federation were mainly organized in major world centres, and the fact that the Biograd Boat Show is organized in a town of only 5,000 residents makes this success even greater and represents a great acknowledgement not only to the Company as the organizer, but also to Croatian nautical industry and tourism. Today the leading inter- national autumn nautical fair has established itself as the biggest Croatian nautical event and in the last three years it has grown into a nautical industry congress in the Republic of Croatia. Thanks to its partnership with all the relevant entities, the Biograd Boat Show encompasses “5 fairs in one”: the Biograd Boat Show exhibition fair, the Biograd B2B business fair, the Days of Croatian Nautics by the Cro- atian Chamber of Economy congress fair, the Croatia Charter Expo leading charter fair and, for the first time, the Croatia Luxury and Adventure Travel Show – a lux- ury and exclusive tourism fair, thereby connection in one place all the key segments of the nautical industry and tourism and continuing to contribute to their fur- ther development and affirmation. Due to the great interest and requests from present- ers, the 26th Biograd Boat Show held in 2024 was ex- tended to include spaces outside the waters of Marina Kornati, namely a part of the newly renovated Biograd Town Port (a passenger port), therefore enabling the participation of more than 450 presenters from Croatia 5.6 ADDITIONAL FACILITIES 71ANNUAL REPORT FOR THE YEAR 2024 and beyond, the presentation of more than 500 vessels and 25 premier vessels. Sports facilities: Located in the pine forest Soline near the old town centre, the Ilirija Tennis Centre covers a surface area of 48,000 m 2 and consists of 20 tennis courts and multi-purpose courts (14 ground and 6 artificial grass courts) with night lighting, a restaurant facility, locker rooms and associated facilities. 5.6 ADDITIONAL FACILITIES 72ANNUAL REPORT FOR THE YEAR 2024 73ANNUAL REPORT FOR THE YEAR 2024 5.7 CITY GALLERIA BUSINESS AND SHOPPING CENTRE City Galleria Business and Shopping Centre is located in a heavily residential area in the immediate centre of Zadar. It is one of the two largest shopping centres in town and the wider Zadar region, completed and opened to the public in October 2008, with a total gross surface area of more than 28,500 m 2 spread over a total of six floors (two garage and four retail floors). The gross surface area of the centre consists of the as- sociated underground garage with a total surface area of 10,863.50 m 2 , 9,445.32 m 2 of net rentable area, as well as ancillary rooms and corridors. As at 31 Decem- ber 2024, the occupancy of the centre amounted to 99.76% of total capacities. The centre features the following facilities: an under- ground car garage with more than 400 parking spaces on two floors, an outdoor and indoor market, a super- market, speciality shops, clothing and sports stores, service amenities, cafes, office spaces and 6 multiplex cinema halls. The unique features of the City Galleria Business and Shopping Centre were recognised on the internation- al level during the 2010 International Property Award, the world’s most prestigious competition in the real estate business, on which occasion the City Galleria Business and Shopping Centre Zadar received the pres- tigious five-star award in the Best Retail Development category. The unique features of the City Galleria Business and Shopping Centre, which distinguish it from the rest of the market offer can be summarised in a few ex- amples, such as: a very attractive location within the city’s pedestrian zone that provides great visibility and easy accessibility of the building, situation of the main marketplace with accompanying eating facilities in the Centre and the first and only multiplex cinema in the city of Zadar. 5.7. CITY GALLERIA 74ANNUAL REPORT FOR THE YEAR 2024 6 KEY PHYSICAL PERFOR- MANCE INDICATORS OF THE COMPANY In 2024, the Company achieved revenue growth across all sectors and growth in key market and phys- ical performance indicators, recording the best oper- ating results to date in terms of revenue at the level of each individual sector, and certain sectors also re- corded growth in business profitability. Despite the strong return of competitive tourist destinations in the Mediterranean and the slow recovery of the Eu- ropean economy, especially the key outbound mar- kets of Croatian tourism, the tourism sectors of the Company, by strengthening all business sectors, as well as year-round operation of the destination man- agement company Ilirija Travel, a complementary and integrated offer of all tourism sectors, and the growth of business activities in the hotel and nautical sectors, ultimately achieved adequate profitability of the business, which resulted in the Company's best financial achievements to date. In 2024, the hotel sector was also characterised by the continuation of the growth of business activities with a special focus on the pre- and post-season, re- cording 42,573 arrivals and 126,130 overnight stays, a growth of 14% in arrivals and 6% in overnight stays compared to the previous business year. In addition to the growth in physical performance indicators, the 6 KEY PHYSICAL PERFORMANCE INDICATORS business year was also characterised by the trend of increasing capacity occupancy compared to the pre- vious year, i.e. 140 days of occupancy were recorded with annual occupancy rate of 38.35% compared to 135 days of occupancy and 36.95% of annual capaci- ty occupancy. Furthermore, due to the growth in the volume of business activities which led to the growth of key physical performance indicators, revenue amounted to EUR 9,797,346.04, which is an increase of 8.59% compared to the previous year, also result- ing in an increase in revenue per room to EUR 160.45, 4.33% more compared to the last year’s EUR 153.79. Ilirija Travel, a destination management company, with 295 special programmes and events realised for a total of 40,424 people, achieved growth in both key physical indicators, i.e. a 26.07% increase in the num- ber of events and a 32.28% increase in the number of participants. The growth of key physical indicators is the result of strong demand growth continuously throughout the business year with a marked strength- ening of business activities in the pre- and post-sea- son, which resulted in the realisation of revenue in the amount of EUR 1,828,124.91, partly realised in other profit centres of the Company, with a growth rate of 25.53% compared to the previous business 75ANNUAL REPORT FOR THE YEAR 2024 year when revenue amounted to EUR 1,456,273.18. A significant achievement in strengthening the pre- and post-season, i.e. year-round business activity in 2024, was made in the Arsenal profit centre in Zadar, a zero-category monument transformed into a mod- ern multifunctional space, which mostly generated revenue growth for the entire sector and year-round business activity at the Company level by organising of a series of high-value events. The nautical sector also recorded continuous growth in key performance indicators in the reporting pe- riod, having the best business year to date. Due to the growth in the key market segment of vessels at contracted berth, i.e. 754 contracted vessels, with a significant growth in contracted charter vessels, revenue from contracted berths amounted to EUR 5,485,984.00 with a growth rate of 7% compared to the previous year and it makes up 73.52% of the total revenue of the marina. As for the port services seg- ment, with 4,000 operations performed, i.e. 5% more compared to the previous year, when 3,817 opera- tions were performed, its revenue amounted to EUR 505,960.00 with a growth rate of 9%, while revenue also increased in the segment of business coopera- tion and other services. The daily berth, with 2,816 transit sailings and 7,179 overnight stays of vessels in transit, realized EUR 393,575.00 in revenue, i.e. less by 12% due to favourable weather conditions and the vessel staying at sea. The physical and financial growth in the segment of vessels at contracted berth in absolute terms generated the largest share in the growth of the marina’s revenue, which was also re- flected in the total revenue of Marina Kornati, which amounted to EUR 7,462,351.00, i.e. 8% more than the previous year when the revenue amounted to EUR 6,897,469.00. As for the accommodation segment of the camping sector, i.e. the “Park Soline” campsite, with 49,854 arrivals and 321,016 overnight stays, its revenue amounted to EUR 7,065,458.98, 5% more compared to the previous year, when revenue amounted to EUR 6,741,340.71. Despite the physical indicators being at the previous year’s level, the “Park Soline” campsite had the best business year as far as the revenue is concerned. Revenue from the lump sum guests and mobile home market segments contributed the most to the growth in revenue, which increased by 16% and 7% respectively, with other revenue increasing by 13%. The rate of occupancy of accommodation units based on availability days was 58.71% and at 6 KEY PHYSICAL PERFORMANCE INDICATORS the level of the year 31.79% with 116 days of occu- pancy. Furthermore, the average price per camp- site unit (ADR) was EUR 53.89, increasing by 9.28%, while the accommodation revenue per campsite unit (RevPAR) based on availability days was EUR 31.64, increasing by 5.60%. The real estate sector, i.e. the City Galleria Busi- ness and Shopping Centre, achieved revenue in the amount of EUR 2,159,072.06, which was a 5% in- crease in revenue compared to the previous business year, when revenue amounted to EUR 2,056,050.86, while maintaining the high occupancy of the centre and the growth of average monthly rent and rent for the period per square metre of commercial premises (AMR), which increased by 7%. 76ANNUAL REPORT FOR THE YEAR 2024 6.1 HOTEL SECTOR The business year 2024 was marked by a pronounced continuation of the demand for hotel capacities to in- crease, which resulted in an increase in physical and financial business results in the entire hotel sector. During the reporting period, the physical performance indicators recorded a double-digit increase, i.e. arrivals increased by 14%, and overnight stays by 6%, continu- ing on the strong growth in tourist traffic that was pres- ent in the previous year. During the reporting period, 42,573 arrivals and 126,130 overnight stays were recorded, compared to 37,500 arrivals and 118,680 overnight stays in 2023. Under these circumstances, the achieved physical per- formance results significantly impacted the increase in financial performance. Thus, the hotel sector recorded a revenue growth of 8.79% from board offer revenue. Total revenue of the hotel sector, including the reve- nue realised in other profit centres of the hotel sector, amounted to EUR 9,797,346.04, which is an 8,59% in- crease from the previous year’s EUR 9,021,921.78. Significant changes in the sales channels which be- gan during the last two years as the market recovered and reopened continued. We recorded further strong growth of individual direct sales, with a decline in the allotment segment, which we addressed by introduc- ing organisational adaptations in the form of digitali- sation in the direct sales department. The recovery of the group sales segment also continued, which was especially important for season extension, both of the pre- and post-season, as it pertains to the segment of organised leisure, as well as business travel, confer- ences and similar events. The individual sales segment continues to play the dominant role, with a share of 46.4%, and the growth trend in organised groups in the pre-season continues, which now account for a share of 37,5% in market sales channels, compared to 35.2% in 2023. With a share of 13.7%, the allotment segment remained at the level of the previous year, while fixed lease continued to decline and remains symbolic with a share of 2.4%. When it comes to the guest structure, in 2024, domes- tic guests remained a predominant group with a share of 28.2% of total overnight stays, making for a 21% in- crease in their share in overnight stays. Among other markets, the following are dominant: (II) Slovenia, with a 9.7% share, (III) Austria, with an 8.79% share, (IV) Germany, with a 7.69% share, and (IV) Slovakia, with a 4.57% share in overnight stays. The business year was marked by the return of the South Korean mar- 6.1 HOTEL SECTOR 77ANNUAL REPORT FOR THE YEAR 2024 ket, whose share in total overnight stays amounted to 4.41%. Among other markets, European countries such as Bosnia and Herzegovina, France, Hungary, Po- land, the Netherlands, Belgium, Sweden, Italy, Estonia, Great Britain and Ireland dominate, as well as Canada. The occupancy and facility utilisation days have im- proved considerably in 2024 compared to the same pe- riod of the previous business year. In proportion to the number of days of availability of facilities and their ca- pacities, we recorded more uniform occupancy of indi- vidual hotels. In this respect, the average occupancy of all hotels increased from the previous year’s 36.95% to 38.35% in 2024, while record occupancy was achieved in highest-category hotels, namely 90.57% in the Ilirija hotel in August and 85.84% in July, while the Korna- ti hotel achieved an 82.89% occupancy in September. Meanwhile, the number of occupancy days at the level of the entire hotel sector increased from 135 days in 2023 to 140 days in the reporting period. 6.1 HOTEL SECTOR 78ANNUAL REPORT FOR THE YEAR 2024 Hotel sector capacities ILIRIJA D.D. NUMBER OF ROOMS NUMBER OF BEDS 2024 2023 Index 2024/2023 2024 2023 Index 2024/2023 ILIRIJA 157 157 1.00 326 326 1.00 KORNATI 106 106 1.00 230 230 1.00 ADRIATIC 100 100 1.00 210 210 1.00 DONAT 72 72 1.00 144 144 1.00 TOTAL 435 435 1.00 910 910 1.00 ILIRIJA 37% KORNATI 25% ADRIATIC 23% DONAT 15% % UDIO POJEDINOG HOTELA ( broj kreveta ) % Share of individual hotel (number of beds) 6.1 HOTEL SECTOR 79ANNUAL REPORT FOR THE YEAR 2024 6.1 HOTEL SECTOR Overview and comparison of realised arrivals and overnight stays in 2024 with 2023 HOTEL SECTOR PROFIT CENTER ARRIVALS INDEX OVERNIGHT STAYS INDEX 2024 2023 2024/2023 2024 2023 2024/2023 Hotel ILIRIJA 22,290 18,797 119 57,728 54,605 106 Hotel KORNATI 11,012 9,678 114 29,809 28,366 105 Hotel ADRIATIC 6,412 6,600 97 26,518 25,329 105 Hotel Villa DONAT 2,859 2,425 118 12,075 10,380 116 TOTAL 42,573 37,500 114 126,130 118,680 106 0 10.000 20.000 30.000 40.000 50.000 60.000 70.000 Hotel ILIRIJA Ho tel K OR NATI Ho tel ADR IATIC Ho tel Villa DONAT NOĆENJA 2024. 2023. OVERNIGHT STAYS 80ANNUAL REPORT FOR THE YEAR 2024 6.1 HOTEL SECTOR Croatia 28.23% Slovenia 9.70% Austria 8.79% Germany 7.69% Slovakia 4.57% South Korea 4.41% Bosnia and Herzegovina 3.82% France 3.48% Hungary 3.10% Poland 2.89% Other countries 23.36% Graph of realised overnight stays in 2024 81ANNUAL REPORT FOR THE YEAR 2024 6.1 HOTEL SECTOR Capacity occupancy in 2024 and a comparison with 2023 Percentage share MONTH ILIRIJA KORNATI ADRIATIC DONAT GRAND TOTAL Room total 2024 % Room total 2023 % Room total 2024 % Room total 2023 % Room total 2024 % Room total 2023 % Room total 2024 % Room total 2023 % Room total 2024 % Room total 2023 % JANUARY (I) 4.867 537 11,03% 4.867 333 6,84% 3.286 61 1,86% 3.286 253 7,70% 3.100 86 2,77% 3.100 55 1,77% 2.232 0 0,00% 2.232 0 0,00% 13.485 684 5,07% 13.485 641 4,75% FEBRUARY (II) 4.553 491 10,78% 4.396 0 0,00% 3.074 0 0,00% 2.968 344 11,59% 2.900 0 0,00% 2.800 0 0,00% 2.088 0 0,00% 2.016 0 0,00% 12.615 491 3,89% 12.180 344 2,82% MARCH (III) 4.867 2.011 41,32% 4.867 1.266 26,01% 3.286 67 2,04% 3.286 39 1,19% 3.100 0 0,00% 3.100 0 0,00% 2.232 0 0,00% 2.232 0 0,00% 13.485 2.078 15,41% 13.485 1.305 9,68% APRIL (IV) 4.710 2.396 50,87% 4.710 2.938 62,38% 3.180 488 15,35% 3.180 948 29,81% 3.000 53 1,77% 3.000 31 1,03% 2.160 0 0,00% 2.160 0 0,00% 13.050 2.937 22,51% 13.050 3.917 30,02% MAY (V) 4.867 3.294 67,68% 4.867 2.572 52,85% 3.286 1.823 55,48% 3.286 1.369 41,66% 3.100 2.103 67,8 4% 3.100 1.244 40,13% 2.232 28 1,25% 2.232 0 0,00% 13.485 7. 248 53,75% 13.485 5.185 38,45% JUNE (VI) 4.710 2.828 60,04% 4.710 3.432 72,87% 3.180 1.872 58,87% 3.180 1.880 59,12% 3.000 1.770 59,00% 3.000 1.508 50,27% 2.160 1.052 48,70% 2.160 0 0,00% 13.050 7.522 57,6 4% 13.050 6.820 52,26% JULY (VII) 4.867 4.178 85,84% 4.867 4.179 85,86% 3.286 2.633 80,13% 3.286 2.747 83,60% 3.100 2.508 80,90% 3.100 2.650 85,48% 2.232 1.538 68,91% 2.232 1.689 75,67% 13.485 10.857 80,51% 13.485 11.265 83,54% AUGUST (VIII) 4.867 4.408 90,57% 4.867 4.380 89,99% 3.286 2.959 90,05% 3.286 2.913 88,65% 3.100 2.704 87,23% 3.100 2.915 94,03% 2.232 1.776 79,57% 2.232 2.068 92,65% 13.485 11.847 87,85% 13.485 12.276 91,03% SEPTEMBER (IX) 4.710 3.744 79,49% 4.710 3.491 74,12% 3.180 2.636 82,89% 3.180 2.544 80,00% 3.000 2.245 74,83% 3.000 2.010 67,00 % 2.160 1.107 51,25% 2.160 1.447 66,99% 13.050 9.732 74,57% 13.050 9.492 72,74% OCTOBER (X) 4.867 2.919 59,98% 4.867 2.911 59,81% 3.286 1.662 50,58% 3.286 1.396 42,48% 3.100 836 26,97% 3.100 1.121 36,16% 2.232 109 4,88% 2.232 60 2,69% 13.485 5.526 40,98% 13.485 5.488 40,70% NOVEMBER (XI) 4.710 788 16,73% 4.710 634 13,46% 3.180 0 0,00% 3.180 0 0,00% 3.000 0 0,00% 3.000 0 0,00% 2.160 0 0,00% 2.160 0 0,00% 13.050 788 6,04% 13.050 634 4,86% DECEMBER (XII) 4.867 845 17, 36% 4.867 844 17,34% 3.286 318 9,68% 3.286 190 5,78% 3.100 188 6,06% 3.100 262 8,45% 2.232 0 0,00% 2.232 0 0,00% 13.485 1.351 10,02% 13.485 1.296 9,61% TOTAL 57.462 28.439 49,49% 57.305 26.980 47, 0 8% 38.796 14.519 37,42% 38.690 14.623 37,80% 36.600 12.493 34,13% 36.500 11.796 32,32% 26.352 5.610 21,29% 26.280 5.264 20,03% 159.210 61.061 38,35% 158.775 58.663 36,95% 82ANNUAL REPORT FOR THE YEAR 2024 6.1 HOTEL SECTOR Capacity occupancy in 2024 and a comparison with 2023 Occupancy days MONTH ILIRIJA KORNATI ADRIATIC DONAT GRAND TOTAL Room total 2024 Days in 2024 Room total 2023 Days in 2023 Room total 2024 Days in 2024 Room total 2023 Days in 2023 Room total 2024 Days in 2024 Room total 2023 Days in 2023 Room total 2024 Days in 2024 Room total 2023 Days in 2024 Room total 2024 Days in 2024 Room total 2023 Days in 2023 JANUARY (I) 4.867 537 3 4.867 333 2 3.286 61 1 3.286 253 2 3.100 86 1 3.100 55 1 2.232 0 0 2.232 0 0 13.485 684 2 13.485 641 1 FEBRUARY (II) 4.553 491 3 4.396 0 0 3.074 0 0 2.968 344 3 2.900 0 0 2.800 0 0 2.088 0 0 2.016 0 0 12.615 491 1 12.180 344 1 MARCH (III) 4.867 2.011 13 4.867 1.266 8 3.286 67 1 3.286 39 0 3.100 0 0 3.100 0 0 2.232 0 0 2.232 0 0 13.485 2.078 5 13.485 1.305 3 APRIL (IV) 4.710 2.396 15 4.710 2.938 19 3.180 488 5 3.180 948 9 3.000 53 1 3.000 31 0 2.160 0 0 2.160 0 0 13.050 2.937 7 13.050 3.917 9 MAY (V) 4.867 3.294 21 4.867 2.572 16 3.286 1.823 17 3.286 1.369 13 3.100 2.103 21 3.100 1.244 12 2.232 28 0 2.232 0 0 13.485 7. 248 17 13.485 5.185 12 JUNE (VI) 4.710 2.828 18 4.710 3.432 22 3.180 1.872 18 3.180 1.880 18 3.000 1.770 18 3.000 1.508 15 2.160 1.052 15 2.160 0 0 13.050 7.522 17 13.050 6.820 16 JULY (VII) 4.867 4.178 27 4.867 4.179 27 3.286 2.633 25 3.286 2.747 26 3.100 2.508 25 3.100 2.650 27 2.232 1.538 21 2.232 1.689 23 13.485 10.857 25 13.485 11.265 26 AUGUST (VIII) 4.867 4.408 28 4.867 4.380 28 3.286 2.959 28 3.286 2.913 27 3.100 2.704 27 3.100 2.915 29 2.232 1.776 25 2.232 2.068 29 13.485 11.847 27 13.485 12.276 28 SEPTEMBER (IX) 4.710 3.744 24 4.710 3.491 22 3.180 2.636 25 3.180 2.544 24 3.000 2.245 22 3.000 2.010 20 2.160 1.107 15 2.160 1.447 20 13.050 9.732 22 13.050 9.492 22 OCTOBER (X) 4.867 2.919 19 4.867 2.911 19 3.286 1.662 16 3.286 1.396 13 3.100 836 8 3.100 1.121 11 2.232 109 2 2.232 60 1 13.485 5.526 13 13.485 5.488 13 NOVEMBER (XI) 4.710 788 5 4.710 634 4 3.180 0 0 3.180 0 0 3.000 0 0 3.000 0 0 2.160 0 0 2.160 0 0 13.050 788 2 13.050 634 1 DECEMBER (XII) 4.867 845 5 4.867 844 5 3.286 318 3 3.286 190 2 3.100 188 2 3.100 262 3 2.232 0 0 2.232 0 0 13.485 1.351 3 13.485 1.296 3 TOTAL 57.462 28.439 181 57. 305 26.980 172 38.796 14.519 137 38.690 14.623 138 36.600 12.493 125 36.500 11.796 118 26.352 5.610 78 26.280 5.264 73 159.210 61.061 140 158.775 58.663 135 83ANNUAL REPORT FOR THE YEAR 2024 Monthly comparison of revenue/overnight stays of the Ilirija Resort Hotel in 2024 and a comparison with 2023 MONTH GENERATED REVENUES OVERNIGHT STAYS AVERAGE PRICE (EUR) 2024 2023 INDEX 2024/2023 2024 2023 INDEX 2024/2023 2024 2023 INDEX 2024/2023 JANUARY 195,546.89 € 157,4 66.87 € 124.18 1,117 1,027 108.76 175.06 € 153.33 € 114.18 FEBRUARY 65,778.74 € 42,029.48 € 156.51 903 544 165.99 72.84 € 77.26 € 94.29 MARCH 229,186.99 € 145,561.19 € 157.45 3,929 2,476 158.68 58.33 € 58.79 € 99.22 APRIL 292,591.73 € 370,845.42 € 78.90 5,266 7,419 70.98 55.56 € 49.99 € 111.16 MAY 758,787.83 € 574,451.97 € 132.09 12,424 9,048 137. 31 61.07 € 63.49 € 96.20 JUNE 1,059,039.26 € 882,651.20 € 119.98 15,299 13,024 117.47 69.22 € 67.77 € 102.14 JULY 1,924,043.80 € 1,885,976.52 € 102.02 27,160 27,132 100.10 70.84 € 69.51 € 101.91 AUGUST 2,477,253.59 € 2,261,789.96 € 109.53 29,601 28,712 103.10 83.69 € 78.78 € 106.24 SEPTEMBER 1,335,491.24 € 1,299,311.12 € 102.78 17, 325 17,167 100.92 77.0 8 € 75.69 € 101.85 OCTOBER 623,269.43 € 614,405.69 € 101.44 9,218 8,792 104.85 67.61 € 69.88 € 96.75 NOVEMBER 94,244.01 € 112,713.72 € 83.61 1,560 1,095 142.47 60.41 € 102.93 € 58.69 DECEMBER 92,669.83 € 61,775.82 € 150.01 2,328 2,244 103.74 39.81 € 27.53 € 144.60 TOTAL 9,147,903.3 4 € 8,408,978.96 € 108.79 126,130 118,680 106.28 72.53 € 70.85 € 102.36 31/12 9,147,903.3 4 € 8,408,978.96 € 108.79 126,130 118,680 106.28 72.53 € 70.85 € 102.36 Revenue per sold room by 31/12/24 - hotels 149,82 € Revenue per sold room - 2024 - hotel sector 160,45 € Revenues per sold room 22.522,63 € Revenue per sold room by 31/12/23 - hotels 143,34 € Revenue per sold room - 2023 - hotel sector 153,79 € Revenues per sold room Biograd na Moru 24.880,32 € Selected profit centers within the hotel sector Lavender bar 2024 2023 31/12 191.367,43 € INDEX 2024/2023 31/12 182.877,60 € 191.367,43 € 95,56 TOTAL 2024 2023 31/12 9.021.921,78 € INDEX 2024/2023 31/12. 9.797.346,04 € 9.021.921,78 € 108,59 Beach club Ilirija 2024 2023 31/12 334.148,22 € INDEX 2024/2023 31/12 373.079,14 € 334.148,22 € 111,65 Tennis center 2024 2023 31/12 76.893,04 € INDEX 2024/2023 31/12. 81.529,99 € 76.893,04 € 106,03 Beach bar "Donat" 2024 2023 31/12 10.534,13 € INDEX 2024/2023 31/12. 11.955,97 € 10.534,13 € 113,50 Hotel sector total 6.1 HOTEL SECTOR 84ANNUAL REPORT FOR THE YEAR 2024 REVENUE BY ACTIVITIES Revenue from hotel services amounted to EUR 9,147,903.34, compared to EUR 8,408,978.96 in 2023, marking an 8.79% increase. Other revenue from the hotel sector including the rev- enue generated from selected profit centres, amount- ed to EUR 649,442.70 recording a 5.95% increase com- pared to the EUR 612,942.82 generated in the same period of the previous year. In total, revenue of the hotel sector amounted to EUR 9,797,346.04 compared to EUR 9,021,921.78 realised in the previous year, representing an 8.59% increase. 6.1 HOTEL SECTOR 85ANNUAL REPORT FOR THE YEAR 2024 In 2024, the hotel sector achieved a revenue in the amount of EUR 9,797,346.04, representing an 8.59% increase compared to the EUR 9,021,921.78 achieved in the previous business year. Such increase was gen- erated through the growth in key physical and mar- ket achievement indicators. In the reporting period, 126,130 overnight stays were recorded, representing a 6.28% increase compared to the 118,680 overnight stays recorded in the previous year. The increase was also accompanied by an increase in the number of sold accommodation units, the occupancy of accommoda- tion units and occupancy days. Furthermore, there was a significant increase in rev- 1 10 100 1,000 10,000 100,000 1,000,000 2024 2023 enue per accommodation unit (RevPAR) with regard to days of availability – by 8.96%, i.e. in the amount of EUR 77.60 compared to the EUR 71.22 achieved in the previous year. At the same time, the average daily rate per accommodation unit (ADR) amounted to EUR 134.44 in the reporting period, compared to the EUR 126.50 achieved in 2023, representing an increase by 6.28%. * ADR – the average price per accommodation unit is calculated based on board services revenue (revenue from accommodation and food and drink under board services). SUMMARY OF KEY MARKET INDICATORS OF THE HOTEL SECTOR 6.1 HOTEL SECTOR Overnight stays and the average daily rate per accommodation unit (ADR) in Ilirija d.d. hotels in 2024 and 2023 126.130 118.160 134,44 € 126,50 € Number of overnight stays Average daily rate of the accommodation unit (ADR) * 86 ANNUAL REPORT FOR THE YEAR 2024 6.1 HOTEL SECTOR 2024 2023 2024/2023 HOTELS IN BIOGRAD Accommodation capacities: Number of hotels 3 3 0.00% Number of accommodation units 363 363 0.00% Number of beds 766 766 0.00% Phyisical turnover Number of overnight stays 114,055 108,300 5.31% Number of accommodation units sold 55,451 53,399 3.84% The occupancy of accommodation units based on a total number of days in a period (%) 41.74% 40.30% 3.56% Occupancy rate of the accommodation units on an open days basis (%) 57.38% 54.97% 4.38% Financial results (in EUR): Average daily rate of the accommodation unit (ADR) * 135.61 € 128.21 € 5.77% Revenue per accommodation unit (RevPAR) on a total number of days ba- sis in period ** 56.60 € 51.67 € 9.53% Revenue per accommodation unit (RevPAR) on an open days basis ** 77.81 € 70.48 € 10.40% HOTEL IN SV. FILIP I JAKOV Accommodation capacities: Number of hotels 1 1 0.00% Number of accommodation units 72 72 0.00% Number of beds 144 144 0.00% Phyisical turnover Number of overnight stays 12,075 10,380 16.33% Number of accommodation units sold 5,610 5,264 6.57% The occupancy of accommodation units based on a total number of days in a period (%) 21.29% 20.03% 6.28% Occupancy rate of the accommodation units on an open days basis (%) 61.35% 74.60% -17.76% Financial results (in EUR): Average daily rate of the accommodation unit (ADR) * 122.90 € 109.08 € 12.67% Revenue per accommodation unit (RevPAR) on a total number of days ba- sis in period ** 26.16 € 21.85 € 19.74% Revenue per accommodation unit (RevPAR) on an open days basis ** 75.40 € 81.38 € -7.35% HOTELS - TOTAL ILIRIJA d.d. Accommodation capacities: Number of hotels 4 4 0.00% Number of accommodation units 435 435 0.00% Number of beds 910 910 0.00% Phyisical turnover Number of overnight stays 126,130 118,680 6.28% Number of accommodation units sold 61,061 58,663 4.09% The occupancy of accommodation units based on a total number of days in a period (%) 38.35% 36.95% 3.80% Occupancy rate of the accommodation units on an open days basis (%) 57.72% 56.30% 2.52% Financial results (in EUR): Average daily rate of the accommodation unit (ADR) * 134.44 € 126.50 € 6.28% Revenue per accommodation unit (RevPAR) on a total number of days ba- sis in period ** 51.56 € 46.74 € 10.32% Revenue per accommodation unit (RevPAR) on an open days basis ** 77.60 € 71.22 € 8.96% KEY MARKET INDICATORS OF THE ILIRIJA D.D. HOTEL SECTOR Notes: Hotels in Biograd include the hotels Ilirija, Adriatic and Kornati, while the hotel in Sv. Filip Jakov is the hotel Villa Donat. * * ADR – Average daily rate of the accommodation unit is calculated on the basis of the revenue from board services (revenue from the accommodation and food and beverages of the board services). ** RevPAR – Revenue from the board services per accommodation unit includes the revenue from the board services (revenue from the accommodation and food and beverages of the board services) divided by the number of the available accommodation units in a given period (365 days; number of open days). 87ANNUAL REPORT FOR THE YEAR 2024 6.2 NAUTICAL SECTOR – MARINA KORNATI Marina Kornati had another record business year with the best business and financial result to date, gener- ating revenue in the amount of EUR 7,462,351.00, i.e. 8% higher compared to 2023, when revenue amounted to EUR 6,897,469.00. The record business and financial results of Marina Kornati in 2024 can be attributed to the organisational scheme of vessel schedules, which made the optimal use of the waters, and the organisa- tion of operational business processes which contrib- uted to the preservation and stability of the existing business activities and their further growth, especially in the area of key physical performance indicators, i.e. contracted berths. Marina Kornati performed business activities in the fol- lowing segments: 1. Contracted berth: • Contracted berths individual • Contracted berths charter 2.Transit berth – vessel arrival 3. Transit berth – vessel overnight stays 4. Port service – crane operations In 2024, in the part of the vessels at contracted berths, the most significant physical performance indicators of Marina Kornati, a total of 754 contracts on the use of berths were concluded, of which 393 for individu- al vessels and 361 for charter vessels, which is an in- crease of 1% compared to the previous year when 747 berths were contracted. The share of individual vessels at contracted berth amounted to 52% in the reporting period, while charter vessels had a 48% share. Such a ratio of individual and charter vessels generated a rev- enue increase from contracted berths by 7% compared to 2023. A total of 2,816 arrivals of transit vessels was recorded in the reporting period, which is 9% less than in the previous year. Furthermore, 7,179 overnight stays were recorded, which is 12% less compared to 2023, which recorded 8,127 overnight stays. The reason for the lower number of both entries and overnight stays of transit vessels can be found in the new vessel accom- modation capacities in the nearby destinations and good weather which affected the stay of vessels at sea. Port service saw a slight increase, with 4,000 service operations realised, representing a 5% increase com- pared to the previous year’s 3,817 service operations realised. In 2024, all revenue items saw an increase. The great- est amount of revenue was generated in the contract- ed berths, amounting to EUR 5,485,984.00, with a 7% 6.2 NAUTICAL SECTOR 88ANNUAL REPORT FOR THE YEAR 2024 growth rate compared to 2023 when revenue from contracted berths amounted to EUR 5,109,242.00. EBIT was realised in the amount of EUR 505,960.00, increas- ing by 9% compared to 2023, when it amounted to EUR 463,160.00. Business cooperation revenue amounting to EUR 436,776.00, represent an increase of 12% compared to the previous year when it amounted to EUR 390,084.00. A significant increase of revenue was achieved under the item concerning the nautical fair and events, hav- ing generated a 23% increase, i.e. a revenue of EUR 1,025,776.00 compared to EUR 835,777.00 generated in the previous year. The revenue in other services was generated in the amount of EUR 205,901.00 compared to the EUR 45,444.00 generated in 2023, which was the result of the introduction of a 1% fee for charter vessels’ use of contracted berths, i.e. the indirect fee for waste re- ception, which was added to the amount of the fee for contracted berth – annual berth of chartered vessels. A decrease in revenue was recorded in daily berths and parking due to a lower number of entries and overnight stays by transit vessels. Revenue from dai- ly berths amounted to EUR 393,575.00, representing a 6.2 NAUTICAL SECTOR 11% decrease compared to 2023, when it amounted to EUR 443,345.00, while the generated parking revenue amounted to EUR 434,155.00, representing a 3% de- crease compared to the previous year when it amount- ed to EUR 446,193.00. 89ANNUAL REPORT FOR THE YEAR 2024 Length of piers / m Number of berths Dry berth Total number of berths Central marina 923 365 70 435 West marina 262 190 0 190 South marina 180 80 0 80 Hotel marina 450 100 0 100 TOTAL 1.815 735 70 805 % Share of individual marina (number of berths) Marina Kornati capacities 6.2 NAUTICAL SECTOR 10% 24% 54% 12% Central marina West marina South marina Hotel marina 90ANNUAL REPORT FOR THE YEAR 2024 Cumulative overview of physical turnover of Marina Kornati in 2024 and a comparison with 2023 2023 by month Name of position Measurment unit 1 2 3 4 5 6 7 8 9 10 11 12 Contract-based berth-individual Contracted vessel 98 254 312 359 382 395 404 411 417 421 432 432 Contract-based berth-charter Contracted vessel 0 0 5 282 298 308 312 314 315 315 315 315 TOTAL Contract-based berth Contracted vessel 98 254 317 641 680 703 716 725 732 736 747 747 Transit berth-sailing in port Sailing in port 5 19 40 217 551 1.047 1.721 2.531 2.929 3.081 3.090 3.094 Transit berth-overnight stay of vessels Boat/day 117 218 392 1.047 1.878 2.973 4.684 6.609 7.44 6 7.922 8.050 8.127 Transit berth-overnight stay of vessel crew Overnight stay of a person Port service Operation 127 375 719 1.094 1.493 1.939 2.394 2.867 3.198 3.377 3.641 3.817 2024 by month Name of position Measurment unit 1 2 3 4 5 6 7 8 9 10 11 12 Contract-based berth-individual Contracted vessel 85 232 270 328 363 379 384 385 385 387 391 393 Contract-based berth-charter Contracted vessel 0 3 26 330 348 358 358 360 360 360 361 361 TOTAL Contract-based berth Contracted vessel 85 235 296 658 711 737 742 745 745 747 752 754 Transit berth-sailing in port Sailing in port 3 13 31 201 451 875 1.456 2.123 2.614 2.802 2.811 2.816 Transit berth-overnight stay of vessels Boat/day 67 215 468 1.075 1.768 2.641 3.934 5.510 6.461 6.930 7.066 7.179 Transit berth-overnight stay of vessel crew Overnight stay of a person 0 0 0 Port service Operation 163 413 722 1.090 1.537 1.995 2.554 3.124 3.402 3.577 3.871 4.000 6.2 NAUTICAL SECTOR 91ANNUAL REPORT FOR THE YEAR 2024 0 20 40 60 80 100 120 140 160 do 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 > 23 Number of vessels Lenght (m) Vessels of individual owners Charter vessels Totall vessel s Vessels at contractual berth in 2024 6.2 NAUTICAL SECTOR Vessels at contractual berth in 2024 and a comparison with 2023 Purpose Type of berth Position of berth 01/01-31/12 % Total 01/01-31/12 % Total INDEX 2024 Vessels 2023 Vessels 2024/2023 Vessel of individual owners Annual berth in the sea Central aquatorium 263 35 273 37 96 South aquatorium 32 4 38 5 84 Western aquatorium 2 0 2 0 100 Hotel port 35 5 37 5 95 Annual berth on the land Marina land 4 1 6 1 67 Seasonal berth in the sea Marina aquatorium 18 2 36 5 50 Hotel port 39 5 40 5 98 Total individual vessels: 393 52 432 58 91 Charter vessels Annual berth in the sea Central aquatorium 134 18 115 15 117 South aquatorium 0 0 0 0 #DIV/0! Western aquatorium 225 30 198 27 114 Hotel port 2 0 2 0 100 Total charter vessels: 361 48 315 42 115 Total vessels 754 100 747 100 101 up to 92ANNUAL REPORT FOR THE YEAR 2024 Transit berth – vessel arrival in 2024 and a comparison with 2023 Individually monthly Cumulatively monthly 2024 2024 2023 INDEX 2024 2023 INDEX Month 2024/2023 2024/2023 1 3 5 60 3 5 60 2 10 14 71 13 19 68 3 18 21 86 31 40 78 4 170 177 96 201 217 93 5 250 334 75 451 551 82 6 424 496 85 875 1.047 84 7 581 674 86 1.456 1.721 85 8 667 810 82 2.123 2.531 84 9 491 398 123 2.614 2.929 89 10 188 152 124 2.802 3.081 91 11 9 9 100 2.811 3.090 91 12 5 4 125 2.816 3.094 91 Total 2024 2.816 Total 2023 3.094 Index 2024/2023 91 0 500 1,000 1,500 2,000 2,500 3,000 3,500 1 2 3 4 5 6 7 8 9 10 11 12 Number of transit vessels sailing in Month 2024 2023 Sailing in of transit vessels by months (cumulatively) 6.2 NAUTICAL SECTOR 93ANNUAL REPORT FOR THE YEAR 2024 Transit berth – vessel overnight stays in 2024 and a comparison with 2023 Individually monthly Cumulatively monthly 2024 2024 2023 INDEX 2024 2023 INDEX Month 2024/2023 2024/2023 1 67 117 57 67 117 57 2 148 101 147 215 218 99 3 253 174 145 468 392 119 4 607 655 93 1.075 1.047 103 5 693 831 83 1.768 1.878 94 6 873 1.095 80 2.641 2.973 89 7 1.293 1.711 76 3.934 4.684 84 8 1.576 1.925 82 5.510 6.609 83 9 951 837 114 6.461 7.4 46 87 10 469 476 99 6.930 7.922 87 11 136 128 106 7.066 8.050 88 12 113 77 147 7.179 8.127 88 Total 2024 7.179 Total 2023 8.127 Index 2024/2023 88 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 1 2 3 4 5 6 7 8 9 10 11 12 Number of overnight stay of vessels Month 2024 2023 Overnight stay of transit vessel by month (cumulatively) 6.2 NAUTICAL SECTOR 94ANNUAL REPORT FOR THE YEAR 2024 6.2 NAUTICAL SECTOR Port service activities in 2024 and a comparison with 2023 Individually monthly Cumulatively monthly 2024 2024 2023 INDEX 2024 2023 INDEX Month 2024/2023 2024/2023 1 163 127 128 163 127 128 2 250 248 101 413 375 110 3 309 344 90 722 719 100 4 368 375 98 1.090 1.094 100 5 447 399 112 1.537 1.493 103 6 458 446 103 1.995 1.939 103 7 559 455 123 2.554 2.394 107 8 570 473 121 3.124 2.867 109 9 278 331 84 3.402 3.198 106 10 175 179 98 3.577 3.377 106 11 294 264 111 3.871 3.641 106 12 129 176 73 4.000 3.817 105 Total 2024 4.000 Total 2023 3.817 Index 2024/2023 105 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 1 2 3 4 5 6 7 8 9 10 11 12 Number of oprerations Month 2024 2023 Activity of port servise by month (cumulatively) 95ANNUAL REPORT FOR THE YEAR 2024 Revenue generated by the Marina Kornati in 2024 individually by months and comparison with 2023 REVENUES OF MARINA KORNATI 2024 SEPARATE BY MONTHS (in EUR) Revenue positions Months 2024 2024 2023 INDEX 1 2 3 4 5 6 7 8 9 10 11 12 CUMULAT. TOTAL 2024./2023. I Daily berths 2.078 7.392 10.294 30.969 43.039 49.772 72.963 85.124 49.715 34.914 3.887 3.428 393.575 443.345 89 II Contracted berth with accessories 544.623 1.053.373 245.530 1.693.381 166.318 111.208 1.588.876 35.285 7.610 5.924 19.776 14.080 5.485.984 5.109.242 107 III Port service 26.207 46.000 50.852 64.240 58.770 53.019 52.960 42.167 23.219 20.618 39.733 28.175 505.960 463.160 109 IV Vehicle parking 206 576 3.747 14.586 47.021 64.087 86.765 91.995 87.353 35.933 1.538 348 434.155 446.193 97 V Other services 1.895 7.471 117. 291 18.351 2.157 4.286 20.312 15.511 4.705 3.820 1.465 8.637 205.901 45.444 453 VI Business cooperation 0 0 218.336 1.652 216.788 436.776 390.084 112 VII Boat fair and events 61.144 89.941 225.974 663.137 -14.420 1.025.776 835.777 123 TOTAL : 575.009 1.114.812 427.714 2.039.863 318.957 282.372 2.099.808 360.023 398.576 764.346 66.399 40.248 8.488.127 7.733.246 110 REVENUES OF MARINA KORNATI 2023 SEPARATE BY MONTHS (in EUR) Revenue positions Months 2023 2023 1 2 3 4 5 6 7 8 9 10 11 12 Cummulat. I Daily berths 2.250 3.707 7.415 20.227 54.457 82.918 91.835 106.061 46.740 18.024 7.218 2.493 443.345 II Contracted berth with accessories 684.442 911.451 286.049 1.402.679 166.009 105.431 1.418.514 65.744 21.201 32.289 9.618 5.816 5.109.242 III Port service 14.231 42.319 48.986 60.214 58.775 52.585 40.227 35.555 22.971 18.826 36.532 31.939 463.160 IV Vehicle parking 200 642 1.341 20.959 48.336 71.725 93.095 84.442 85.613 38.377 1.123 341 446.193 V Other services 184 436 1.117 4.856 14.186 3.911 3.813 6.216 5.194 4.030 752 749 45.444 VI Business cooperation 194.485 2.200 193.399 390.084 VII Boat fair and events 1.580 11.129 37.114 73.004 164.545 545.202 3.703 -500 835.777 TOTAL : 701.307 958.555 344.907 1.703.420 345.543 327.699 1.877.997 371.022 346.264 656.748 58.946 40.838 7.733.246 6.2 NAUTICAL SECTOR 96ANNUAL REPORT FOR THE YEAR 2024 REVENUES OF MARINA KORNATI 2024 CUMULATIVE BY MONTHS (in EUR) Revenue positions Months 2024 % of total 1 2 3 4 5 6 7 8 9 10 11 12 revenues I Daily berths 2.078 9.470 19.764 50.733 93.772 143.544 216.507 301.631 351.346 386.260 390.147 393.575 5 II Contracted berth with acces- sories 544.585 1.597.996 1.843.526 3.536.907 3.703.225 3.814.433 5.403.309 5.438.594 5.446.204 5.452.128 5.471.904 5.485.984 72 III Port service 26.207 72.207 123.059 187.299 246.069 299.088 352.048 394.215 417.434 438.052 47 7.785 505.960 5 IV Vehicle parking 206 782 4.529 19.115 66.136 130.223 216.988 308.983 396.336 432.269 433.807 434.155 5 V Other services 1.895 9.366 126.657 145.008 147.165 151.451 171.763 187. 274 191.979 195.799 197.26 4 205.901 2 VI Business cooperation 0 0 0 218.336 219.988 219.988 436.776 436.776 436.776 436.776 436.776 436.776 6 VII Boat fair and events 0 0 0 0 0 61.144 151.085 37 7.059 1.040.196 1.040.196 1.025.776 5 TOTAL : 574.971 1.689.821 2.117.535 4.157.398 4.476.355 4.758.727 6.858.535 7.218.558 7.617.134 8.381.480 8 .4 47.879 8.488.127 100 REVENUES OF MARINA KORNATI 2023 CUMULATIVE BY MONTHS (in EUR) Revenue positions Months 2023 % of total 1 2 3 4 5 6 7 8 9 10 11 12 revenues I Daily berths 2.250 5.957 13.372 33.599 88.056 170.974 262.809 368.870 415.610 433.634 440.852 443.345 6 II Contracted berth with acces- sories 684.442 1.595.893 1.881.941 3.284.620 3.450.629 3.556.060 4.974.574 5.040.318 5.061.519 5.093.808 5.103.426 5.109.242 73 III Port service 14.231 56.550 105.536 165.750 224.525 277.110 317.337 352.892 375.863 394.689 431.221 463.160 5 IV Vehicle parking 200 842 2.182 23.141 71.477 143.202 236.297 320.739 406.352 444.729 445.852 446.193 6 V Other services 184 620 1.737 6.593 20.779 24.690 28.503 34.719 39.913 43.943 44.695 45.444 1 VI Business cooperation 0 0 194.485 196.685 196.685 390.084 390.084 390.084 390.084 390.084 390.084 5 VII Boat fair and events 0 0 0 1.580 12.709 49.823 122.827 287.372 832.574 836.277 835.777 4 TOTAL : 701.307 1.659.862 2.004.769 3.708.189 4.053.732 4.381.431 6.259.428 6.630.450 6.976.714 7.633.462 7.692.408 7.733.246 100 Revenue generated by Marina Kornati in 2024 cumulatively by months and a comparison with 2023 6.2 NAUTICAL SECTOR 97ANNUAL REPORT FOR THE YEAR 2024 Marina Kornati (the most important profit centre of the nautical sector) achieved the best financial results so far in the observed period, and all market segments recorded growth relative to previous business years. Since marina capacities are fixed, the exceptional in- crease in the revenue of Marina Kornati can be attrib- uted to revenue from contracted berths, with a 73.52% share in total marina revenue. In 2024, it was generat- ed in the amount of EUR 5,485,984.00, representing a 7.37% increase compared to 2023. The average reve- nue per contracted berth amounted to EUR 7,275.84, representing a 6.38% increase compared to the previ- ous year. The revenue generated from transit berths amount- ed to EUR 393,575.00 in 2024, representing a 11.23% decrease compared to 2023, while the average reve- nue per the overnight stay of a vessel at transit berth amounted to EUR 54.82, representing an insignificant increase compared to the previous year’s EUR 54.55. The revenue generated from services amounted to EUR 505,960.00 in 2024, representing a 9.24% increase compared to the previous year, with the average gen- erated revenue per service operation amounting to SUMMARY OF KEY MARKET INDICATORS OF MARINA KORNATI PERFORMANCE 6.2 NAUTICAL SECTOR EUR 126.49, representing a 4.24% increase compared to 2023. The revenue generated from parking amounted to EUR 434,155.00, representing a 2.70% decrease compared to 2023, with the average revenue per parking space amounting to EUR 868.31 in 2024, compared to the previous year’s EUR 892.39. Business cooperation revenue saw a strong dou- ble-digit growth by 11.97%, with the generated rev- enue amounting to EUR 436,776.00 and the average revenue amounting to EUR 8,913.80. 98 ANNUAL REPORT FOR THE YEAR 2024 Notes: * Number of berths refers to physically available number of berths in the marina. 6.2 NAUTICAL SECTOR 2024 2023 2024/2023 Capacity (number of berths): * Central marina 435 435 0.00% Western marina 190 190 0.00% Southern marina 80 80 0.00% Hotel marina 100 100 0.00% Total number of berths 805 805 0.00% Physical turnover: Vessel on berth contract 754 747 0.94% Number of overnight stays (vessels having tranzit berth ) 7,179 8,127 -11.66% Number of sertvice operations executed 4,000 3,817 4.79% Numbe of parking places 500 500 0.00% Number of bussiness cooperation agreements 49 49 0.00% Financial results Total operating revenue of the marina (in EUR): 7,462,351.00 6,897,469.00 8.19% Berth contract: Revenue from berth contracts 5,485,984.00 € 5,109,242.00 € 7.37% Aver. revenue per berth contract 7,275.84 € 6,839.68 € 6.38% Share in the total operating revenue of the marina 73.52% 74.07% -0.75% Transit berth: Revenue from the transit berth 393,575.00 € 443,345.00 € -11.23% Aver. revenue per overnight stay (transit berth) 54.82 € 54.55 € 0.50% Share in the total operating revenue of the marina 5.3% 6.4% -17.95% Servicing: Revenue from servicing 505,960.00 € 463,160.00 € 9.24% Aver. revenue per serv. operation 126.49 € 121.34 € 4.24% Share in the total operating revenue of the marina 6.8% 6.7% 0.97% Parking: Revenue from parking 434,155.00 € 446,193.00 € -2.70% Aver. revenue per parking space 868.31 € 892.39 € -2.70% Share in the total operating revenue of the marina 5.8% 6.5% -10.06% Business cooperation: Revenue from business cooperation 436,776.00 € 390,084.00 € 11.97% Aver. revenue from business cooperation 8,913.80 € 7,960.90 € 11.97% Share in the total operating revenue of the marina 5.9% 5.7% 3.49% KEY MARKET INDICATORS OF MARINA KORNATI 99ANNUAL REPORT FOR THE YEAR 2024 754 747 0 100 200 300 400 500 600 700 800 900 1000 2024 2023 7,179 8,127 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 2024 2023 7,275.84 € 6,839.68 € 0.00 5,000.00 10,000.00 15,000.00 20,000.00 25,000.00 30,000.00 35,000.00 40,000.00 2024 2023 54.82 € 54.55 € 0.00 10.00 20.00 30.00 40.00 50.00 60.00 2024 2023 6.2 NAUTICAL SECTOR Number of contractual berth vessels at the Marina Kornati in 2024 and 2023 Average revenue generated per contractual berth at Marina Kornati in 2024 and 2023 Average revenue generated per transit vessel overnight stay at Marina Kornati in 2024 and 2023 Number of transit vessel overnight stays at the Marina Kornati in 2024 and 2023 Vessels on berth contract Number of overnight stays (vessels having transit berth) Average revenue per berth contract in EUR Aver. revenue per overnight stay (transit berth) 100ANNUAL REPORT FOR THE YEAR 2024 101ANNUAL REPORT FOR THE YEAR 2024 6.3 CAMPING SECTOR – “PARK SO- LINE“ CAMPSITE In 2024, in the camping sector, i.e. the Campsite “Park Soline” recorded 49,854 arrivals, which is an increase of 0.25% compared to the same period of the previ- ous year, and in the same time, 321,016 overnight stays were recorded, which represents 97.57% of the figures from 2023. Two segments of campsite operations (lump sum guests and mobile homes) recorded an increase in arrivals and overnight stays. In the market segment, we recorded an increase in overnight stays by 7.93% and an increase in arrivals by 8.03%, representing 6.44 days of stay from lump sum guests in the reporting period. The aforementioned increase is for the most part a consequence of the increase in leased lump sum pitches and the increase in lump-sum price. The mobile home market segment realised an increase of 5.66% in arrivals and of 0.93% in overnight stays as compared to the previous year. Most of the increase was gen- erated in June due to the Slovenian and the Croatian market, and during the peak season. Individuals as a market segment realised 85.21% in arrivals and 87.01% in overnight stays compared to the arrivals and over- night stays realised in the same period of 2023. The allotment results were at 90.31% in the number of ar- rivals and at 85.53% in the number of overnight stays due to a lower number of leased pitches, i.e. a 16.33% decrease, which resulted in a lower index in overnight stays and arrival of agency guests. The camping sector recorded an increase in generated revenue, which amounted to EUR 7,065,458.98, repre- senting a 5% increase compared to the previous year’s EUR 6,741,340.71. The reporting period recorded a 26% increase in lump sum guests, which is the result of a higher number of leased lump sum pitches com- pared to the previous year, of which most of the lump sum refers to mobile homes that bring higher revenue, followed by an increase in revenue from own mobile homes by 7% and revenue from other services by 13%. In the structure of realized overnight stays, among the five leading outbound markets is (I) the Slovenian market with a 24.99% share of overnight stays, (II) the Czech market with a 18.52% share, (III) the Croatian market with a 14.19% share, (IV) the German market with a 11.03% share, and (V) the Dutch market with a 4.51% share. In the mobile homes segment, the great- est increase was recorded in guests from the Hun- garian market (by 30.05%), the Croatian market (by 26.40%), the Polish market (by 17.97%) and the market of Bosnia and Herzegovina (by 18.10%) compared to 6.3 CAMPING SECTOR 102ANNUAL REPORT FOR THE YEAR 2024 2023. In the business segment of camping units, the greatest increase was recorded in guests from the mar- ket of Bosnia and Herzegovina (by 68.69%), the Hun- garian market (by 28.66%), the Slovakian market (by 17.19%) and the Croatian market (by 15.58%). At the same time, when it comes to market segments, lump sum payments and guests in mobile homes prevail in the structure of overnight stays, with a share of 38% and 29% in overnight stays respectively. The continued growth of financial results in campsite operations and its 2024 revenue are the result of in- vestments made in the quality of facilities and services offered within campsites, as well as increased market- ing activities and strategically planned investments in key sales channels. 6.3 CAMPING SECTOR 103ANNUAL REPORT FOR THE YEAR 2024 6.3 CAMPING SECTOR Capacities of the "Park Soline" campsite 2021 2022 2023 2024 I EXTRA ZONE CAMPING PITCHES 81 81 81 81 CAMPING PLOTS 0 0 0 0 TOTAL 81 81 81 81 II FIRST ZONE CAMPING PITCHES 303 303 301 301 CAMPING PLOTS 0 0 0 0 TOTAL 303 303 301 301 III SECOND ZONE CAMPING PITCHES 208 208 205 205 CAMPING PLOTS 0 0 0 0 TOTAL 208 208 205 205 IV THIRD ZONE CAMPING PITCHES 616 616 543 543 CAMPING PLOTS 0 0 0 0 TOTAL 616 616 543 543 ∑ GRANDTOTAL CAMPING PITCHES 1208 1208 1130 1130 CAMPING PLOTS 0 0 0 0 GRANDTOTAL 1208 1208 1130 1130 81 303 208 616 0 100 200 300 400 500 600 700 EXTRA FIRST S EC O ND T HIRD CAM PING PIT CH E S PLOTS 543 205 301 104ANNUAL REPORT FOR THE YEAR 2024 6.3 CAMPING SECTOR Arrivals and overnight stays by outbound market and average days of stay in 2024 and a comparison with 2023 2024 2023 INDEX 2024/2023 AVERAGE STAY (DAYS) Country Arrivals Overnight stays Arrivals Overnight stays Arrivals Overnight stays 2024 2023 Austria 2,279 13,696 2,331 14,112 97.77 97.05 6.01 6.05 Belgium 198 1,488 430 2,881 46.05 51.65 7.52 6.70 B&H 1,471 7,224 909 4,441 161.83 162.67 4.91 4.89 Czech Republic 8,131 59,453 8,335 61,820 97.55 96.17 7. 31 7.42 Denmark 298 2,345 487 3,650 61.19 64.25 7.87 7.49 France 386 2,121 567 3,404 68.08 62.31 5.49 6.00 Croatia 8,466 45,538 7,161 39,223 118.22 116.10 5.38 5.48 Italy 648 3,956 891 5,201 72.73 76.06 6.10 5.84 Hungary 1,629 9,121 1,324 7,40 4 123.04 123.19 5.60 5.59 Netherlands 1,867 14,466 2,806 22,967 66.54 62.99 7.75 8.18 Germany 4,728 35,414 6,210 46,607 76.14 75.98 7.49 7.51 Poland 2,927 20,265 2,809 19,485 104.20 104.00 6.92 6.94 Slovakia 1,889 12,285 1,708 10,910 110.60 112.60 6.50 6.39 Slovenia 12,502 80,221 11,409 73,786 109.58 108.72 6.42 6.47 Switzerland 306 1,501 443 2,255 69.07 66.56 4.91 5.09 Other 2,129 11,922 1,909 10,864 111.52 109.74 5.60 5.69 TOTAL 49,854 321,016 49,729 329,010 100.25 97.57 6.44 6.62 105ANNUAL REPORT FOR THE YEAR 2024 Overnight stays by outbound market in 2024 6.3 CAMPING SECTOR Austria 4.27% Belgium 0.46% B&H 2.25% Czech Rep 18.52% Denmark 0.73% France 0.66% Croatia 14.19% Italy 1.23% Hungary 2.84%Netherlands 4.51% Germany 11.03% Poland 6.31% Slovakia 3.83% Slovenia 24.99% Switzerland 0.47% Other 3.71% 106ANNUAL REPORT FOR THE YEAR 2024 6.3 CAMPING SECTOR Arrivals, overnight stays and plot numbers by market segment in 2024 and a comparison with 2023 MARKET SEGMENT 2024 2023 INDEX 2024/2023 AVERAGE DAYS OF STAY Arrivals Overnight stays Pitch Arrivals Overnight stays Pitch Arrivals Overnight stays Pitch 2024 2023 Allotment 6.226 46.813 123 6.894 54.732 147 90,31 85,53 83,67 7,52 7,9 4 Lump sum 19.172 123.397 318 17.747 114.334 301 108,03 107,93 105,65 6,44 6,44 Individuals 9.574 57.557 419 11.003 67.550 412 87,01 85,21 101,70 6,01 6,14 Mobile homes 14.882 93.249 270 14.085 92.394 270 105,66 100,93 100,00 6,27 6,56 TOTAL 49.854 321.016 1.130 49.729 329.010 1.130 100,25 97,57 100,00 6,44 6,62 107ANNUAL REPORT FOR THE YEAR 2024 6.3 CAMPING SECTOR MOBILE HOMES AGENCIES LUMP SUM INDIVIDUALS TOTAL 2023 2024 INDEX 2023 2024 INDEX 2023 2024 INDEX 2023 2024 INDEX 2023 2024 INDEX Austria 5.401 4.987 92,33 213 90 42,25 4.409 4.403 99,86 4.089 4.216 103,11 14.112 13.696 97,05 Belgium 721 315 43,69 339 12 3,54 129 132 102,33 1.692 1.029 60,82 2.881 1.488 51,65 Bosnia and Herzego- vina 1.359 1.605 118,10 124 113 91,13 2.744 5.145 187, 50 214 361 168,69 4.441 7.224 162,67 The Czech Republic 9.821 10.137 103,22 37.711 35.657 94,55 10.929 10.452 95,64 3.359 3.207 95,47 61.820 59.453 96,17 Denmark 1.385 1.314 94,87 551 60 10,89 239 343 143,51 1.475 628 42,58 3.650 2.345 64,25 France 781 559 71,57 1.083 76 7,02 200 377 188,50 1.340 1.109 82,76 3.404 2.121 62,31 Croatia 9.558 12.081 126,40 438 914 208,68 25.550 28.293 110,74 3.677 4.250 115,58 39.223 45.538 116,10 Italy 1.992 1.774 89,06 219 137 62,56 743 256 34,45 2.247 1.789 79,62 5.201 3.956 76,06 Hungary 3.191 4.150 130,05 220 356 161,82 2.608 2.833 108,63 1.385 1.782 128,66 7.4 04 9.121 123,19 Netherlands 7.617 5.686 74,65 4.731 2.754 58,21 887 684 7 7,11 9.732 5.342 54,89 22.967 14.466 62,99 Germany 15.728 13.077 83,14 2.202 303 13,76 8.525 7.068 82,91 20.152 14.966 74,27 46.607 35.414 75,98 Poland 5.026 5.929 117,97 1.360 454 33,38 8.996 10.240 113,83 4.103 3.642 88,76 19.485 20.265 104,00 Slovakia 2.539 2.397 94,41 301 325 107,97 7.081 8.404 118,68 989 1.159 117,19 10.910 12.285 112,60 Slovenia 21.900 24.008 109,63 4.462 4.821 108,05 37.332 39.739 106,45 10.092 11.653 115,47 73.786 80.221 108,72 Switzerland 958 526 54,91 113 43 38,05 506 503 99,41 678 429 63,27 2.255 1.501 66,56 Others 4.417 4.704 106,50 665 698 104,96 3.456 4.525 130,93 2.326 1.995 85,77 10.864 11.922 109,74 TOTAL 92.394 93.249 100,93 54.732 46.813 85,53 114.334 123.397 107, 93 67.550 57.557 85,21 329.010 321.016 97,57 Overview of overnight stays by outbound market and by market segment in 2024 and a comparison with 2023 108ANNUAL REPORT FOR THE YEAR 2024 6.3 CAMPING SECTOR Cumulative overview of daily and monthly occupancy of campsite accommodation units in 2024 and comparison with 2023 MONTH APRIL MAY JUNE SEGMENT MAXIMUM POSSIBLE PITCHES DAYS PITCH DAYS OCCUPANCY IN % DAYS OF OCCU- PANCY MAXIMUM POSSIBLE PITCHES DAYS PITCH DAYS OCCUPANCY IN % DAYS OF OCCU- PANCY MAXIMUM POSSIBLE PITCHES DAYS PITCH DAYS OCCUPANCY IN % DAYS OF OCCU- PANCY MOBILE HOMES ILIRIJA 8.040 240 2,99% 0,90 8.308 1.115 13,42% 4,16 8.040 3.709 46,13% 13,84 AGENCIES 3.690 3.690 100,00% 30,00 3.813 3.813 100,00% 31,00 3.690 3.690 100,00% 30,00 LUMP SUM 9.540 9.540 100,00% 30,00 9.858 9.858 100,00% 31,00 9.540 9.540 100,00% 30,00 INDIVIDUALS PITCH- ES STANDARD MARE, COMFORT AND STANDARD III ZONE 10.380 416 4,01% 1,20 10.726 1.322 12,33% 3,82 10.380 2.248 21,66% 6,50 INDIVIDUALS CAMP- ING STANDARD IV ZONE 2.160 0 0,00% 0,00 2.263 53 2,34% 0,73 2.190 110 5,02% 1,51 INDIVIDUALS TOTAL 12.540 416 3,31% 0,99 12.989 1.375 10,59% 3,28 12.570 2.358 18,76% 5,63 TOTAL 33.810 13.886 41,07% 12,32 34.968 16.161 46,22% 14,33 33.840 19.297 57,02% 17,11 MONTH JULY AUGUST SEPTEMBER SEGMENT MAXIMUM POSSIBLE PITCHES DAYS PITCH DAYS OCCUPANCY IN % DAYS OF OCCU- PANCY MAXIMUM POSSIBLE PITCHES DAYS PITCH DAYS OCCUPANCY IN % DAYS OF OCCU- PANCY MAXIMUM POSSIBLE PITCHES DAYS PITCH DAYS OCCUPANCY IN % DAYS OF OCCU- PANCY MOBILE HOMES ILIRIJA 8.308 7.307 87,95% 27,26 8.308 7.907 95,17% 29,50 8.040 3.189 39,66% 11,90 AGENCIES 3.813 3.813 100,00% 31,00 3.813 3.813 100,00% 31,00 3.690 3.690 100,00% 30,00 LUMP SUM 9.858 9.858 100,32% 31,10 9.858 9.858 100,00% 31,00 9.540 9.540 100,00% 30,00 INDIVIDUALS PITCH- ES STANDARD MARE, COMFORT AND STANDARD III ZONE 10.726 5.231 48,77% 15,12 10.726 6.641 61,91% 19,19 10.380 2.046 19,71% 5,91 INDIVIDUALS CAMP- ING STANDARD IV ZONE 2.263 716 31,64% 9,81 2.263 1.142 50,46% 15,64 2.190 72 3,29% 0,99 INDIVIDUALS TOTAL 12.989 5.947 45,78% 14,19 12.989 7.783 59,92% 18,58 12.570 2.118 16,85% 5,05 TOTAL 34.968 26.925 77,00% 23,87 34.968 29.361 83,97% 26,03 33.840 18.537 54,78% 16,43 109ANNUAL REPORT FOR THE YEAR 2024 6.3 CAMPING SECTOR MONTH OCTOBER TOTAL 2024 TOTAL 2023 SEGMENT MAXIMUM POSSIBLE PITCHES DAYS PITCH DAYS OCCUPANCY IN % DAYS OF OC- CUPANCY NUMBER OF ACCOM- MODATING UNITS MAXIMUM POSSIBLE PITCHES DAYS PITCH DAYS OCCUPANCY IN % DAYS OF OC- CUPANCY NUMBER OF ACCOM- MODATING UNITS MAXIMUM POSSIBLE PITCHES DAYS PITCH DAYS OCCUPANCY IN % DAYS OF OC- CUPANCY MOBILE HOMES ILIRIJA 4.020 54 1,34% 0,20 270 53.064 23.521 44,33% 87,76 270 52.866 23.857 45,13% 89,35 AGENCIES 1.845 1.845 100,00% 15,00 123 24.354 24.354 100,00% 198,00 147 29.106 29.106 100,00% 198,00 LUMP SUM 4.770 4.770 100,00% 15,00 318 62.964 62.964 100,00% 198,00 301 59.598 59.598 100,00% 198,00 INDIVIDUALS PITCHES STAND- ARD MARE, COMFORT AND STANDARD III ZONE 5.190 279 5,38% 0,81 346 68.508 18.183 26,54% 52,55 346 68.508 20.778 30,33% 60,05 INDIVIDUALS CAMPING STAND- ARD IV ZONE 1.095 3 0,27% 0,04 73 14.454 2.096 14,50% 28,71 66 13.068 2.602 19,91% 39,42 INDIVIDUALS TOTAL 6.285 282 4,49% 0,67 419 82.962 20.279 24,44% 48,40 412 81.576 23.380 28,66% 56,75 TOTAL 16.920 6.951 41,08% 6,16 1130 223.344 131.118 58,71% 116,24 1130 223.146 135.941 60,92% 120,62 MONTH INDEX 2024./2023. SEGMENT NUMBER OF ACCOM- MODATING UNITS MAXIMUM POSSIBLE PITCHES DAYS PITCH DAYS OCCUPANCY IN % DAYS OF OC- CUPANCY MOBILE HOMES ILIRIJA 100 100 99 98,22% 98,22 AGENCIES 83,67 84 84 100,00% 100,00 LUMP SUM 105,65 106 106 100,00% 100,00 INDIVIDUALS PITCHES STANDARD MARE, COMFORT AND STANDARD III ZONE 100,00 100 88 87,51% 87, 51 INDIVIDUALS CAMP- ING STANDARD IV ZONE 110,61 111 81 72,83% 72,83 INDIVIDUALS TOTAL 101,70 102 87 85,29% 85,29 TOTAL 100 100 96 96,37% 96,37 110ANNUAL REPORT FOR THE YEAR 2024 6.3 CAMPING SECTOR Campsite revenue in 2024 and a comparison with 2023 SEGMENT 2023 2024 INDEX REALIZED BY 31/12/2023 CONTRACTED BY 31/12/2023 REALIZED BY 31/12/2024 2024/2023 NO.OF PITCHES OVERNIGHT STAYS REVENUES REALIZED OVERNIGHT STAYS REVENUES NO.OF PITCHES REALIZED OVERNIGHT STAYS REVENUES OVERNIGHT STAYS REVENUES 1 MOBILE HOMES ILIRIJA 270 92,394 3,172,046.56 € 92,394 3,172,046.56 € 270 93,249 3,407,481.06 € 101 107 2 AGENCIES 147 54,732 547,2 56.65 € 54,732 5 47,256.65 € 123 46,813 490,884.95 € 86 90 3 INDIVIDUALS 412 67, 550 1,203,612.00 € 67,550 1,203,612.00 € 419 57,557 1,067, 841.62 € 85 89 4 LUMP SUM 301 114,334 1,508,249.66 € 114,334 1,508,249.66 € 318 123,397 1,749,843.38 € 108 116 5 OTHER SERVICES - - 310,175.84 € 310,175.84 € 0 349,407.97 € #DIV/0! 113 TOTAL: 1130 329,010 6,741,340.71 € 329,010 6,741,340.71 € 1130 321,016 7,065,458.98 € 98 105 111ANNUAL REPORT FOR THE YEAR 2024 Summary of key market indicators of the “Park Soline” campsite In 2024, the “Park Soline” campsite saw an increase in financial performance indicators and in the area of key physical indicators, it recorded a small 0.25% increase in the number of arrivals, while the number of over- night stays declined by 2.43%. In the reporting period, the campsite revenue amounted to EUR 7,065,458.98, representing a 4.81% increase, whereby the greatest revenue increase was recorded in the lump sum mar- ket, mobile homes and other services segments. A 3.37% decrease in campsite unit occupancy on the basis of days of availability was recorded compared to the previous year, though a 9.28% increase in the aver- age achieved price and a 5.60% increase in accommo- dation revenue per campsite unit, based on campsite unit occupancy on the basis of days of availability, were also recorded. Note: ** RevPAR – Revenue from accommodation per camp unit is the rev- enue from accommodation divided by a number of available camp units in a given period. 6.3 CAMPING SECTOR Number of overnight stays and revenue from accommodation per camp unit in the campsite "Park Soline" in 2024 and 2023 321,016 31.64 € 329,010 29.96 € 1 10 1 00 1000 1 00 00 100000 1 00 00 00 No. of overnight stays Revenue f ro m acco mmo dation p er c am p unit (RevP AR) on an open days basis ** 2024 2023 112 ANNUAL REPORT FOR THE YEAR 2024 2024. 2023. 2024./2023. Accommodation capacities: Number of camping units 1.130 1.130 0,00% Number of guests 3.390 3.390 0,00% Physical turnover: No. of overnight stays 321.016 329.010 -2,43% No. of sold camp units 131.118 135.941 -3,55% Annual occupancy rate of the camp units (%) 31,79% 32,96% -3,55% Occupancy rate of the units on an open days basis (%) 58,71% 60,76% -3,37% Financial results: TOTAL OPERATING REVENUE 7.065.458,98 € 6.741.340,71 € 4,81% Fixed lease: Revenue - fixed lease 490.884,95 € 547.256,65 € -10,30% Average revenue per accommodation unit 3.990,93 € 3.722,83 € 7,20% Share in the total operating campsite revenue 6,9% 8,1% -14,42% Number of units 123 147 -16,33% Lump sum: Revenue - Lump sum 1.749.843,38 € 1.508.249,66 € 16,02% Average revenue per accommodation unit 5.502,65 € 5.010,80 € 9,82% Share in the total operating campsite revenue 24,8% 22,4% 10,70% Number of units 318 301 5,65% Individuals: Revenue - Individuals 1.067.8 41,62 € 1.203.612,00 € -11,28% Average revenue per accommodation unit 2.548,55 € 2.921,39 € -12,76% Share in the total operating campsite revenue 15,1% 17,9% -15,35% Number of units 419 412 1,70% Mobile homes: Revenue - Mobile homes 3.407.481,06 € 3.172.046,56 € 7,42% Average revenue per mobile homes 12.620,30 € 11.748,32 € 7,42% Share in the total operating campsite revenue 48,2% 47,1% 2,49% Number of mobile homes 270 270 0,00% Extra services: Revenue-extra services 349.407,97 € 310.175,84 € 12,65% Average revenue per accommodation unit 309,21 € 274,49 € 12,65% Share in the total operating campsite revenue 4,9% 4,6% 7,48% Total number of units 1130 1130 0,00% Average daily rate of the camp unit (ADR) 53,89 € 49,31 € 9,28% Revenue from accommodation per camp unit (RevPAR) on a basis of 365 days ** 17,13 € 16,25 € 5,40% Revenue from accommodation per camp unit (RevPAR) on an open days basis ** 31,64 € 29,96 € 5,60% Notes: * ADR - Average daily rate of a camp unit is calculated on the basis of the revenue from accommodation in the campsite and the number of camp units sold. ** RevPAR - Revenue from accommodation per camp unit is the revenue from accommodation divided by a number of available camp units in a given period (365 days; number of open days). Key market indicators of the “Park Soline” campsite 6.3 CAMPING SECTOR 113ANNUAL REPORT FOR THE YEAR 2024 3,990.93 € 3,722.83 € 0 5 00 1000 1500 2000 2500 3000 3500 4000 4500 Average revenue per accommodation unit 2024 2023 5,502.65 € 5,010.80 € 0 1000 2000 3000 4000 5000 6000 Average revenue per accommodation unit 2024 2023 2,548.55 € 2,921.39 € 0 5 00 1000 1500 2000 2500 3000 3500 Average revenue per accommodation unit 2024 2023 12,620.30 € 11,748.32 € 0 2000 4000 6000 8000 1 00 00 1 20 00 1 40 00 Average revenue per mobile homes 2024 2023 Average generated revenue per fixed lease pitch in the "Park Soline" campsite in 2024 and 2023 Average generated revenue per pitch – individuals at the “Park Soline” campsite in 2024 and 2023 Average generated revenue per mobile home at the “Park Soline” camp- site in 2024 and 2023 Average generated revenue per lump sum pitch at the “Park Soline” campsite in 2024 and 2023 6.3 CAMPING SECTOR 114ANNUAL REPORT FOR THE YEAR 2024 Average generated revenue from extra services per pitch at the “Park Soline” campsite in 2024 and 2023 6.3 CAMPING SECTOR 309.21 € 274.49 € 0 50 1 00 1 50 2 00 2 50 3 00 3 50 Average revenue per accommodation unit 2024 2023 115ANNUAL REPORT FOR THE YEAR 2024 6.4 CITY GALLERIA BUSINESS AND SHOPPING CENTRE City Galleria Business and Shopping Centre is located in a heavily residential area in the immediate centre of Zadar, just a ten-minute walk from the old town. Due to the good location of the building and the fact it is surrounded by some of the main city roads, the City Galleria Business and Shopping Centre is exceptionally easy to spot and access by a large number of local resi- dents and foreign visitors. The business results achieved in 2024 show a stable and continuous growth of key market indicators in that period. Business revenue of the City Galleria Cen- tre generated through lease of commercial premises, common costs, use of common parts of the centre, lease of advertising space, garage revenue and lease of commercial premises amounted to EUR 2,147,773.16. Other operating revenue relating to insurance claims amounted to EUR 11,298.90 in the relevant period, which brings the total generated revenue in 2024 to EUR 2,159,072.06. Total revenue generated in 2023 amounted to EUR 2,056,050.86, which represents growth of 5.01% realised in 2024. In the category of revenue from the lease of commer- cial premises in the observed period in comparison to 2023, an increase of 7.27% was recorded, while reve- nue from common costs recorded an increase of 5.33%. The category of revenue from the use of common are- as of the Centre decreased by 12.07% compared to the result achieved in 2023. Revenue from the lease of ad- vertising space remained at the same level compared to the same period of the previous year, while the cate- gory of parking revenue recorded an increase of 9.48%. Operating revenue from the lease of business premises in the neighbouring Phase 1 of the Centre recorded an increase of 9.23% in 2024 compared to the 2023. In 2024, the number of vehicles visiting the public un- derground garage of the centre amounted to 734,990, while in 2023 it amounted to 729,225. The said result constitutes a 0.79% increase in the reporting year. In addition to the shown increase in revenue followed by an increase in the number of visitors using the garage, in 2024 relative to the previous business year, there was also an increase in the length of parking time in the garage of the City Galleria Centre. 6.4 CITY GALLERIA 116ANNUAL REPORT FOR THE YEAR 2024 6.4 CITY GALLERIA 60,37%22,79% 5,54% 0,25% 9,04% 1,49% 0,52% LEASE OF BUSINESS UNITS COMMON E XPENSES LEASE OF COMMON AREAS LEASE OF ADVERTISING SPACE USAG E OF GA RAG E PARK I NG SPAC ES PHASE 1 - LEASE OF BUSINE SS UNITS OTHER BUSINESS REVENUES Business revenue of the business and shopping centre City Galleria in Zadar in 2024 and a comparison with 2023 DESIGNATION DESCRIPTION NUMBER OF AC- TIVE CONTRACTS SURFACE AREA m² REVENUES IN 2024 % REVENUES IN 2023 % INDEX 2024/2023 1 LEASE OF BUSINESS UNITS 36 9.445,32 1.303.430,75 € 60,37% 1.215.040,53 € 59,10% 107 2 COMMON EXPENSES 34 6.648,73 492.140,74 € 22,79% 4 67.219,78 € 22,72% 105 3 LEASE OF COMMON AREAS 24 1.506,50 119.518,39 € 5,54% 135.929,43 € 6,61% 88 4 LEASE OF ADVERTISING SPACE 8 130,98 5.314,85 € 0,25% 5.365,91 € 0,26% 99 5 USAGE OF GARAGE PARKING SPACES 410 10.863,50 195.137,62 € 9,04% 178.241,47 € 8,67% 109 6 PHASE 1- LEASE OF BUSINESS UNITS 6 289,96 32.230,81 € 1,49% 29.507,96 € 1,44% 109 REVENUE: 2.147.773,16 € 99,48% 2.031.305,08 € 98,80% 106 7 OTHER BUSINESS REVENUES 11.298,90 € 0,52% 24.745,78 € 1,20% 46 TOTAL REVENUE: 2.159.072,06 € 100,00% 2.056.050,86 € 100,00% 105 * Total net leasable surface area ** Total net leasable area for calculation of common expenses *** Number of parking spaces in the garage OVERVIEW OF REVENUE IN 2024 117ANNUAL REPORT FOR THE YEAR 2024 As at 31 December 2024, a total of 36 commercial lease agreements were active, i.e. the occupancy rate was 99.76% of the indicated net rentable area of the Cen- tre. By purchasing business premises, the Company en- sured additional 289,96 m 2 of business premises avail- able for lease, whereby the total net rentable surface area of all business premises owned by the Company increased to 9,735.28 m 2 and the occupancy rate of all business premises owned by the Company amounted to 99.77% as at 31 December 2024. The total gross area of the building is more than 28,500 m 2 , spread over a total of six floors including two floors for an under- ground garage and four floors with commercial and retail space. The total gross area of the centre is com- prised of an underground garage with a surface area of 10,863.50 m 2 , commercial premises with a total net rentable surface area of 9,445.32 m 2 , and connecting, technical and common areas. Business revenue of the City Galleria Centre is gener- ated through lease of commercial premises, common costs, use of common parts of the centre, lease of ad- vertising space, garage revenue and lease of commer- cial premises. Total revenue generated in 2024 amount- ed to EUR 2,159,072.06, representing a 5.01% increase achieved compared to 2023. Furthermore, revenue growth was followed by a growth in the average gen- erated monthly lease fee per square metre of business premises in the amount of EUR 11.50, representing a 7% increase, and the average generated lease fee per square metre of business premises also increased at the same rate and amounted to EUR 138.00 in the re- porting period. SUMMARY OF KEY MARKET RESULTS OF THE CITY GALLERIA BUSINESS AND SHOPPING CENTRE 6.4 CITY GALLERIA 118ANNUAL REPORT FOR THE YEAR 2024 2024 2023 2024/2023 Commercial capacities: Premises - floor area (m²) 9.445,32 9.445,32 0% Shared costs - floor area (m²) 6.648,73 6.648,73 0% Common areas - floor area (m²) 1.506,50 1.533,00 -2% Advertising space - floor area (m²) 130,98 130,98 0% Garage - floor area (m²) 10.863,50 10.863,50 0% Commercial turnover: Premises - number of active contracts 36 35 3% Shared costs - number of active contracts 34 33 3% Common areas - number of active contracts 24 26 -8% Advertising space - number of active contracts 8 8 0% Garage - number of parking spaces 410 410 0% Garage - turnover of vehicles 734.990 729.225 1% Financial results: Average monthly rent earned per m² of premises (AMR) 11,50 € 10,72 € 7% Average rent earned per m² of premises for the period 138,00 € 128,64 € 7% Average revenue from the garage per parking space for the period 475,95 € 434,74 € 9% Notes: * AMR - Average Monthly Rent – The average monthly price achieved for m² of the premises is calculated based on the revenue from the rent of premises and net available floor area of active premises. ** The revenue from the garage per parking space is the total revenue from the garage divided by a number of available parking spaces in a given period. Key market indicators of the real-estate sector – City Galleria 6.4 CITY GALLERIA 119ANNUAL REPORT FOR THE YEAR 2024 6.5 ILIRIJA TRAVEL Ilirija Travel, as a destination management company, continued its strong growth in 2024. By developing new services and amenities, the Company has been creating an integrated and complementary tourism product and offering additional services in the pre-sea- son through the agency, which has, thanks to improved sales and increasing number of arrivals of organised groups, increased the number of events and attendees as well as revenue. Total revenue of EUR 1,828,124.91 increased by 25.53% compared to EUR 1,456,273.18 in the previous year, were realised across other Compa- ny’s profit centres as well. After last year's 234 events with 30,560 participants, this year, 295 events were attended by 40,424 peo- ple. Through specialised programs and events such as concerts, incentives, events, conferences, congresses, weddings, excursions, regattas, and others, the compa- ny achieved a robust growth in both physical and finan- cial results, with pronounced increase in demand for excursion programs compared to the previous pre-sea- son. The multi-purpose facility Arsenal in Zadar also experienced an exceptional growth, achieving the rev- enue of EUR 1,119,178.21 compared to EUR 599,768.83 in 2023, marking an 86.6% revenue increase. 6.5 ILIRIJA TRAVEL 120ANNUAL REPORT FOR THE YEAR 2024 6.5 ILIRIJA TRAVEL Business events realised in 2024 and a comparison with 2023 Number of events Number of participants Total revenue 2024 2023 INDEX 2024/2023 2024 2023 INDEX 2024/2023 2024 2023 INDEX 2024/2023 TOTAL 295 234 126.07 40,424 30,560 132.28 1,828,124.91 € 1,456,273.18 € 125.53 121ANNUAL REPORT FOR THE YEAR 2024 7 FINANCIAL RESULTS OF THE COMPANY 122ANNUAL REPORT FOR THE YEAR 2024 7 FINANCIAL RESULTS OF THE COMPANY 7.1 FINANCIAL-OPERATING RESULTS OF THE COMPANY BY SECTORS 7.1.1 HOTEL SECTOR 7 FINANCIAL RESULTS OF THE COMPANY 2024 2023 2024/2023 HOTEL SECTOR - BIOGRAD Operating revenues 9.031.555,55 € 8.385.920,56 € 7,70 % Revenues from board services 7.519.631,36 € 6.846.537,26 € 9,83% TRevPAR * 24.880,32 € 23.101,71 € 7,70 % Operating costs ** 6.854.139,73 € 6.368.971,27 € 7,62% Gross operating profit (GOP) *** 2.177.415,82 € 2.016.949,29 € 7,9 6% GOP per accommodation unit 5.998,39 € 5.556,33 € 7,96% GOP margin* 24,1% 24,1% 0,24% Capital investments 235.973,89 € 720.892,93 € - 67,27% HOTEL SECTOR - SV. FILIP I JAKOV Operating revenues 765.790,49 € 636.001,22 € 20,41% Revenues from board services 689.446,22 € 574.198,34 € 20,07% TRevPAR * 10.635,98 € 8.833,35 € 20,41% Operating costs ** 629.672,61 € 529.415,36 € 18,94% Gross operating profit (GOP) *** 136.117,88 € 106.585,86 € 27,71% GOP per accommodation unit 1.890,53 € 1.480,36 € 27,71% GOP margin 17,8% 16,8% 6,06% Capital investments 99.113,55 € 134.142,23 € -26,11% HOTEL SECTOR - TOTAL ILIRIJA d.d. Operating revenues 9.797.346,04 € 9.021.921,78 € 8,59% Revenues from board services 8.209.077,58 € 7.420.735,60 € 10,62% TRevPAR * 22.522,63 € 20.740,05 € 8,59% Operating costs ** 7.483.812,34 € 6.898.386,63 € 8,49% Gross operating profit (GOP) *** 2.313.533,70 € 2.123.535,15 € 8,95% GOP per accommodation unit 5.318,47 € 4.881,69 € 8,95% GOP margin 23,6% 23,5% 0,32% Capital investments 335.087,44 € 855.035,16 € -60,81% 123ANNUAL REPORT FOR THE YEAR 2024 22,522.63 € 5,318.47 € 20,740.05 € 4,881.69 € 0.00 EUR 5,000.00 EUR 10,000.00 EUR 15,000.00 EUR 20,000.00 EUR 25,000.00 EUR 2024. 2023. 24,880.32 € 5,998.39 € 23,101.71 € 5,556.33 € 0 5000 10000 15000 20000 25000 30000 2024. 2023. Notes: The hotel sector in Biograd includes: Ilirija, Adriatic and Kornati hotels; Lavanda bar and pool, and the sports and entertainment facility, while the hotel sector in Sv. Filip i Jakov is the Villa Donat hotel. * TRevPAR (total annual revenue per accommodation unit) means the total operating revenue of the hotel sector divided by the number of physical accommodation units. ** The operating costs include the costs of raw materials and materi- als, costs of services, gross salaries and other operating costs, but they do not include depreciation, financial expenses and extraordinary ex- penses. *** GOP indicates gross operating profit from camping / the campsite / the restaurant before the allocation of common service costs, and it is calculated as follows: operating revenue - operating expenses (be- fore allocation, excluding depreciation and fixed costs). *** The GOP margin is calculated by relating the GOP amount before the allocation of common service costs and operating revenue. In 2024, the hotel sector generated a revenue of EUR 9,797,346.04, which represents an 8.59% increase compared to the revenue generated in the amount of EUR 9,021,921.78 in 2023. At the same time, operating costs of the hotel sector increased by 8.49% in com- parison to the previous year. With the growth of rev- enue while simultaneously managing costs, the gross operating profit (GOP) at the level of the hotel sector was realised in the amount of EUR 2,313,533.70, con- stituting an increase of 8.95% compared to 2023. GOP per accommodation unit amounted to EUR 5,318.47, representing an 8.95% increase, while the GOP margin amounted to 23.6%. 7 FINANCIAL RESULTS OF THE COMPANY Total revenues per accommodation unit (TrevPAR) and GOP per accommodation unit the hotels in Biograd na Moru during the period in 2024 and 2023 Total revenues per accommodation unit (TrevPAR) and GOP per accommodation unit in the hotel sector of Ilirija d.d. in 2024 and 2023 TrevPAR GOP per accommodation unit TrevPAR GOP per accommodation unit 124ANNUAL REPORT FOR THE YEAR 2024 7 FINANCIAL RESULTS OF THE COMPANY Items Annual cumulative achievements in 2022 Annual cumulative achievements in 2023 Annual cumulative achievements in 2024 Index 2024/2023 TOTAL NET REVENUE (operating) 6.975.192,32 9.007.720,39 9.785.145,62 108,63 Total direct costs 890.394,60 1.210.502,57 1.351.552,13 111,65 Total salary and labor costs 2.233.151,77 2.832.515,68 3.210.713,56 113,35 Total other department costs 489.160,78 561.966,42 536.714,47 95,51 TOTAL CONTRIBUTION 3.362.485,17 4.402.735,72 4.686.165,46 106,44 Total costs to GOP 5.906.578,54 7.558.424,18 8.092.833,13 107,07 GOP 1.068.613,78 1.449.296,21 1.692.312,48 116,77 Grandtotal net revenues 7.002.822,16 9.105.909,38 9.907.036,82 108,80 Grandtotal costs 7.305.913,28 9.091.926,78 9.841.697,82 108,25 PROFIT BEFORE TAXATION -303.091,12 13.982,59 65.339,01 467,29 Corporate income tax 0,00 2.716,84 12.642,84 465,35 NET PROFIT -303.091,12 11.265,75 52.696,17 4 67,76 EBITDA 802.815,00 1.147.187,38 1.236.253,97 107,76 EBIT -206.908,23 89.874,99 136.217,24 151,56 FINANCIAL OPERATIONS REPORTING SYSTEM ACCORDING TO THE USALI STANDARDS 01/01/2024 – 31/12/2024 HOTEL SECTOR (after allocation – reallocation of the common revenue and common costs) (EUR) 125ANNUAL REPORT FOR THE YEAR 2024 7.1 FINANCIAL-OPERATING RESULTS OF THE COMPANY BY SECTORS 7.1.2 NAUTICAL SECTOR Marina Kornati, the restaurant “Marina Kornati” and the Nautical Fair represent the profit centres of the Company’s nautical sector, which in 2024 generated revenue in the following amounts: • Marina Kornati – EUR 7,462,351.00 • “Marina Kornati” restaurant – EUR 629,277.00 • Nautical fair – EUR 1,025,776.00 In 2024, the nautical sector realised operating reve- nue in the amount of EUR 9,117,404.00, a 9% increase compared to 2023, when revenue amounted to EUR 8,383,127.00. The increase in the revenue generated by the nautical sector is the result of a significant increase in reve- nue in two of its profit centres, of which in absolute terms the most significant contribution by far is from the revenue realised in the part of boat accommoda- tion, i.e. Marina Kornati and nautical tourism. In 2024, Marina Kornati realised revenue in the amount of EUR 7,462,351.00 with a growth rate of 8% achieved com- pared to 2023, when it amounted to EUR 6,897,469.00, representing the highest revenue generated thus far. The revenue generated by Marina Kornati in 2024 ac- counted for 82% of the total business revenue of the 7 FINANCIAL RESULTS OF THE COMPANY nautical sector. The most significant increase in Mari- na Kornati’s revenue is due to an increase in the rev- enue from contractual berths, which equalled EUR 5,485,984.00 in the reporting period, representing a 7.37% increase in comparison to the same period of 2023. Apart from contractual berths, other revenue items also increased: business cooperation revenue by 11.97% and port service by 9.24%. Furthermore, the nautical fair profit centre also achieved an increase in revenue in the amount of EUR 1,025,776.00, recording an increase of 23%, while the revenue realised by the restaurant “Marina Kornati” in the amount of EUR 629,277.00, recorded growth at a rate of 3%. The substantial increase in operating revenue across all nautical profit centres was accompanied by an in- crease in the gross operating profit, which amounted to EUR 5,103,611.00 for the entire nautical sector, i.e. it represented a 9% increase compared to the previous year, when it amounted to EUR 4,686,187.00. The in- crease in the gross operating profit was accompanied by an increase in the GOP per berth, which equals EUR 6,340.00 in the reporting period, and an increase in the GOP margin, which equalled 56% in 2024. 126 ANNUAL REPORT FOR THE YEAR 2024 Notes: The nautical sector of Ilirija d.d. is comprised of three business units Marina Kornati, the nautical fair and restaurant. * The operating costs include the costs of raw materials and materials, costs of services, gross salaries and other operating costs, but they do not include depreciation, financial expenses and extraordinary expenses. ** GOP (Gross Operating Profit) indicates gross operating profit from the nautical sector before the allocation of common service costs, and it is calculat- ed as follows: operating revenue - operating expenses (before allocation, excluding depreciation and fixed costs). *** The GOP margin is calculated by relating the GOP amount before the allocation of common service costs and operating revenue. 7 FINANCIAL RESULTS OF THE COMPANY KEY FINANCIAL INDICATORS FOR THE NAUTICAL SECTOR 2024 2023 2024/2023 NAUTICS TOTAL Operating revenues 9,117,404. 00 € 8,383,127.00 € 9% Operating revenues per berth 11,325.97 € 10,413.82 € 9% Operating costs 4,013,793.00 € 3,696,940.00 € 9% GOP ** 5,103,611.00 € 4,686,187.00 € 9% GOP per berth 6,399.89 € 5,821.35 € 9% GOP margin *** 56% 56% 0% Capital investments 115,745.00 € 409,021.00 € -72% MARINA KORNATI Operating revenues 7,462,351.00 € 6,897,4 69.0 0 € 8% Operating revenues per berth 9,270.00 € 8,568.28 € 8% Operating costs 2,560,237.00 € 2,427,051.00 € 5% GOP ** 4,902,114.00 € 4,470,417.00 € 10% GOP per berth 6,089.58 € 5,553.31 € 10% GOP margin *** 66% 65% 1% RESTAURANT OF MARINA KORNATI Operating revenues 629,277.0 0 € 649,881 -3% Operating costs 642,265.00 € 628,627 2% GOP ** -12,988.00 € 21,254.00 € -161% GOP margin *** -2% 3% -163% BOAT SHOW Operating revenues 1,025,776.00 € 835,777.00 € 23% Operating costs* 810,838.00 € 641,262.00 € 26% GOP ** 214,938.00 € 194,515.00 € 10% GOP margin *** 21% 23% -10% 127ANNUAL REPORT FOR THE YEAR 2024 11,325.97 € 6,399.89 € 10,413.82 € 5,821.35 € 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 2024 2023 7 FINANCIAL RESULTS OF THE COMPANY Total operating revenue and gross operating profit (GOP) per berth of the nautical sector of Ilirija d.d. in 2024 and 2023 Operating revenues per berth GOP per berth 128ANNUAL REPORT FOR THE YEAR 2024 7 FINANCIAL RESULTS OF THE COMPANY Items Annual cumulative achieve- ments in 2022 Annual cumulative achieve- ments in 2023 Annual cumulative achieve- ments in 2024 Index 2024/2023 TOTAL NET REVENUE (operating) 7.294.235,39 8.377.640,76 8.999.935,40 107,43 Total direct costs 188.126,37 176.666,57 167.812,96 94,99 Total salary and labor costs 839.795,78 1.002.733,31 1.060.752,72 105,79 Total other department costs 322.106,54 327.230,44 391.586,76 119,67 TOTAL CONTRIBUTION 5.944.206,70 6.871.010,44 7.379.782,96 107, 40 Total costs to GOP 3.517.169,82 4.083.278,81 4.359.549,29 106,77 GOP 3.777.065,57 4.294.361,95 4.640.386,11 108,06 Grandtotal net revenues 7.326.260,85 8.469.913,84 9.230.751,61 108,98 Grandtotal costs 4.596.940,00 5.279.583,53 5.716.689,39 108,28 PROFIT BEFORE TAXATION 2.729.320,85 3.190.330,31 3.514.062,22 110,15 Corporate income tax 524.575,47 619.885,29 679.956,87 109,69 NET PROFIT 2.204.745,38 2.570.445,02 2.834.105,35 110,26 EBITDA 3.233.805,11 3.677.294,0 6 3.990.422,41 108,52 EBIT 2.835.528,31 3.273.090,10 3.588.849,59 109,65 FINANCIAL OPERATIONS REPORTING SYSTEM ACCORDING TO THE USALI STANDARDS 01/01/2024 – 31/12/2024 NAUTICAL SECTOR (after allocation – reallocation of the common revenue and common costs) (EUR) 129ANNUAL REPORT FOR THE YEAR 2024 7.1 FINANCIAL-OPERATING RESULTS OF THE COMPANY BY SECTORS 7.1.3 CAMPING SECTOR 2024 2023 2024/2023 CAMPING TOTAL Operating revenue 7.728.416,08 € 7.485.683,10 € 3,24% TRevPAR * 6.839,31 € 6.624,50 € 3,24% Operating costs 3.842.884,35 € 3.560.488,25 € 7,93% GOP *** 3.885.531,73 € 3.925.194,85 € -1,01% GOP per accommodation unit 3.438,52 € 3.473,62 € -1,01% GOP margin * 50,28% 52,44% -4,12% Capital investments 630.529,09 € 1.594.320,76 € -60,45% CAMPSITE "PARK SOLINE" Operating revenue 7.065.458,98 € 6.741.340,71 € 4,81% TRevPAR * 6.252,62 € 5.965,79 € 4,81% Operating costs* 3.084.829,81 € 2.814.664,51 € 9,60% GOP *** 3.980.629,17 € 3.926.676,20 € 1,37% GOP per accommodation unit 3.522,68 € 3.474,93 € 1,37% GOP margin 56,3% 58,2% -3,28% RESTAURANT "PARK SOLINE" Operating revenue 662.957,10 € 744.342,39 € -10,93% Operating costs 758.054,54 € 745.823,74 € 1,64% GOP *** - 95.0 97,44 € -1.481,35 € 6319,65% GOP margin * -12,5% -0,2% 6203,52% Notes: Camping includes accommodation and a restaurant in the “Park Soline” campsite. * TRevPAR – total revenue per camp unit means the total business camping (i.e. camp) revenue divided by the number of physical camp units. ** The operating costs include the costs of raw materials and mate- rials, costs of services, gross salaries and other operating costs, but they do not include depreciation, financial expenses and extraordi- nary expenses. *** GOP (Gross Operating Profit) indicates gross operating profit from camping / the campsite / the restaurant before the allocation of common service costs, and it is calculated as follows: operating revenue - operating expenses (before allocation, excluding deprecia- tion and fixed costs). The GOP margin is calculated by relating GOP from camping / the campsite / the restaurant before the allocation of common service costs and operating revenue. 7 FINANCIAL RESULTS OF THE COMPANY 130ANNUAL REPORT FOR THE YEAR 2024 In 2024, the Company’s camping sector generated revenue in the amount of EUR 7,728,416.08, which is a 3.24% increase compared to the same period of the previous year. Revenue of the camping sector was realised in the fol- lowing profit centres: “Park Soline” campsite – EUR 7,065,458.98 “Park Soline“ restaurant – EUR 662,957.10 Revenue from private mobile homes increased grew at the rate of 7%, while revenue from lump sum guests grew at the rate of 16% compared to the previous busi- ness year. In the camping sector, the gross operating profit (GOP) was generated in the amount of EUR 3,885,531.73, rep- resenting a 99% increase compared to 2023. Further- more, the gross operating margin for the entire camp- ing sector it amounted to 50.28%, while for the “Park Soline” campsite it amounted to 56.3% The operating costs of the entire campsite increased by 7.93% compared to 2023 due to an increase in lease costs by 71%, maintenance costs by 43%, energy and fuel costs by 10% and labour costs by 6%. 6,839.31 € 3,438.52 € 6,624.50 € 3,473.62 € 1.00 10.00 100.00 1,000.00 10,000.00 TRevPAR * GOP per accommodation unit 2024 2023 * TRevPAR (total annual revenue per accommodation unit) means the total operating revenue of the camping sector divided by the num- ber of physical campsite units. GOP indicates gross operating profit from camping before the allocation of common service costs, and it is calculated as follows: operating revenue - operating expenses (before allocation, excluding depreciation and fixed costs). 7 FINANCIAL RESULTS OF THE COMPANY TRevPAR and GOP of the camping per camp unit in 2024 and 2023 In 2024, capital investments in the amount of EUR 630,529.09 were made into improving competitiveness and the quality of services. It is particularly important to point out that the improvement in the overall qual- ity of accommodation was also recognized by the Ger- man ADAC, which awarded 4 stars to the “Park Soline” campsite in 2022, 2023 and 2024. TRevPAR GOP per accommodation unit 131ANNUAL REPORT FOR THE YEAR 2024 7 FINANCIAL RESULTS OF THE COMPANY Items Annual cumulative achieve- ments in 2022 Annual cumulative achieve- ments in 2023 Annual cumulative achieve- ments in 2024 Index 2024/2023 TOTAL NET REVENUE (operating) 6.656.058,48 7.485.682,18 7.727. 322,04 103,23 Total direct costs 208.307,59 192.915,87 163.979,29 85,00 Total salary and labor costs 583.411,15 747. 517,09 772.697,05 103,37 Total other department costs 257.253,80 333.601,77 249.067,45 74,66 TOTAL CONTRIBUTION 5.607.085,94 6. 211.6 47,45 6.541.578,25 105,31 Total costs to GOP 3.257.542,57 4.181.385,22 4. 317.858,08 103,26 GOP 3.398.515,91 3.304.296,96 3.409.463,96 103,18 Grandtotal net revenues 6.673.741,75 7.572 .470, 28 7.841.763,22 103,56 Grandtotal costs 4.804.241,19 6.146.010,47 6.4 47.709,89 104,91 PROFIT BEFORE TAXATION 1.869.500,56 1.426.459,81 1.394.053,33 97,73 Corporate income tax 359.318,01 277.162,98 269.743,70 97,32 NET PROFIT 1.510.182,56 1.149.296,83 1.124.309,63 97,8 3 EBITDA 3.081.647,94 2.916.302,18 2.772.342,68 95,06 EBIT 1.994.985,11 1.628.894,46 1.595.766,29 97,97 FINANCIAL OPERATIONS REPORTING SYSTEM ACCORDING TO THE USALI STANDARDS 01/01/2024 – 31/12/2024 CAMPING SECTOR (after allocation – reallocation of the common revenue and common costs) (EUR) 132ANNUAL REPORT FOR THE YEAR 2024 7.1 FINANCIAL-OPERATING RESULTS OF THE COMPANY BY SECTORS 7.1.4 CITY GALLERIA BUSINESS AND SHOPPING CENTRE 2024 2023 2024/2023 Operating revenues 2.159.072,06 € 2.056.050,86 € 5,01% Operating costs* 1.079.220,20 € 1.023.814,73 € 5,41% GOP ** 1.079.851,86 € 1.032.236,13 € 4,61% GOP margin *** 50,01% 50,20% -0,38% Capital investments 83.264,40 € 62.956,42 € 32,26% Notes: * The operating costs include the costs of raw materials and materials, costs of services, gross salaries and other operating costs, but they do not include depreciation, financial expenses and extraordinary ex- penses. ** GOP (Gross Operating Profit) indicates gross operating profit from the real estate sector before the allocation of common service costs, and it is calculated as follows: operating revenue - operating expenses (before allocation, excluding depreciation and fixed costs). *** The GOP margin is calculated by relating the GOP from the real estate sector before the allocation of common service costs and op- erating revenue. The operating revenue of the City Galleria Business and Shopping Centre generated in 2024 through the lease of commercial premises, common costs, the use of common areas of the centre, the lease of advertising space and revenue from the garage as well as the lease of premises in Phase 1 of the facility amounted to EUR 2,147,773.16. When we include other operating reve- nue in the amount of EUR 11,298.90, total operating revenue of the Centre amount to EUR 2,159,072.06. In comparison to 2023, the aforementioned revenue rep- resents an increase of 5.01% and it was generated in the amount of EUR 2,056,050.86. The results operating costs of the City Galleria Busi- ness and Shopping Centre, which do not include de- preciation, financial expenses and extraordinary costs, amounted to EUR 1,079,220.20 in 2024. The operating costs recorded a growth of 5.41% compared to 2023, when they amounted to EUR 1,023,814.73. This growth was recorded based on the increase of labour costs and other utility services and similar costs. The gross operating profit for the reporting period equalled EUR 1,079,851.86 before the allocation of common service costs, which represents a 50.01% margin. 7 FINANCIAL RESULTS OF THE COMPANY 133ANNUAL REPORT FOR THE YEAR 2024 Items Annual cumulative achieve- ments in 2022 Annual cumulative achieve- ments in 2023 Annual cumulative achieve- ments in 2024 Index 2024/2023 TOTAL NET REVENUE (operating) 535.453,05 608.515,12 616.973,98 101,39 Total direct costs 0,00 0,00 0,00 #DIV/0! Total salary and labor costs 328.944,94 389.602,28 424.351,22 108,92 Total other department costs 41.280,15 55.210,94 48.158,40 87,23 TOTAL CONTRIBUTION 165.227,95 163.701,90 144.464,36 88,25 Total costs to GOP 990.272,91 1.183.189,18 1. 229.877,25 103,95 GOP -454.819,86 -574.674,06 -612.903,27 106,65 Grandtotal net revenues 1.833.891,13 2.078.447,55 2.188.322,94 105,29 Grandtotal costs 1.482.682,10 1.703.748,71 1.786.939,40 104,88 PROFIT BEFORE TAXATION 351.209,03 374.698,84 401.383,90 107,12 Corporate income tax 67.502,37 72.804,47 77.666,17 106,68 NET PROFIT 283.706,65 301.894,37 323.717,73 107, 23 EBITDA 747.418,94 771.876,73 792.577, 27 102,68 EBIT 477.650,43 496.564,96 511.692,32 103,05 FINANCIAL OPERATIONS REPORTING SYSTEM ACCORDING TO THE USALI STANDARDS 01/01/2024 – 31/12/2024 CITY GALLERIA (After allocation - reallocation of the common revenue and common costs) 7 FINANCIAL RESULTS OF THE COMPANY (EUR) 134 ANNUAL REPORT FOR THE YEAR 2024 7 FINANCIAL RESULTS OF THE COMPANY DESCRIPTION 12/2022 12/2023 12/2024 Index 2024/2023 Share (%) in the total operating revenue 12/2022 12/2023 12/2024 OPERATING REVENUE Revenue on the domestic market 19.079.353,30 22.502.324,33 25.758.697,40 114 80,40 80,23 84,87 Revenue on the foreign market 4.477.288,33 5.345.938,25 4.263.724,09 80 18,87 19,06 14,05 Revenue from grants, donations, com- pensations, premiums 53.607,41 60.614,23 61.423,77 101 0,23 0,22 0,20 Revenue from use of own products 2.882,47 4.454,86 10.642,61 239 0,01 0,02 0,04 Revenue from leases 0,00 0,00 0,00 #DIV/0! 0,00 0,00 0,00 Exchange office–ticket sales commis- sion fee 26.959,73 324,66 158,32 49 0,11 0,00 0,00 Other operating revenue 91.248,91 134.152,34 256.885,64 191 0,38 0,48 0,85 TOTAL OPERATING REVENUE 23.731.340,15 28.047.808,67 30.351.531,83 108 100,00 100,00 100,00 OPERATING EXPENSES Raw materials and materials consumed 2.298.495,26 2.674.513,42 2.797.769,11 105 9,69 9,54 9,22 Energy and fuel costs 1.071.014,35 1.134.308,41 1.088.252,41 96 4,51 4,04 3,59 Costs of small inventory write-downs 281.261,70 237.527,38 260.279,23 110 1,19 0,85 0,86 COSTS OF RAW MATERIALS, MATERI- ALS AND ENERGY 3.650.771,30 4.046.349,21 4.146.300,75 102 15,38 14,43 13,66 Transportation, telephone and mail services 205.715,67 255.161,09 328.432,12 129 0,87 0,91 1,08 Maintenance services 996.357,02 999.725,37 1.230.387,16 123 4,20 3,56 4,05 Costs of fairs 4.592,20 21.608,39 18.161,33 84 0,02 0,08 0,06 Lease costs 692.787,74 936.327, 2 3 1.246.646,62 133 2,92 3,34 4,11 Advertising and promotion costs 458.540,57 684.547,61 737.025,80 108 1,93 2,44 2,43 Costs of public announcement systems and lighting 21.202,67 0,00 0,00 0 0,09 0,00 0,00 Utilities and other services 928.448,06 1.124.101,10 1.131.190,03 101 3,91 4,01 3,73 Reservations 0,00 0,00 0,00 #DIV/0! 0,00 0,00 0,00 OUTSOURCING COSTS 3.307.643,93 4.021.470,79 4.691.843,06 117 13,94 14,34 15,46 Reimbursement of employees' ex- penses 829.421,34 1.194.049,97 1.264.275,95 106 3,50 4,26 4,17 Nonproduction services 1.283.611,91 1.632.354,16 1.825.345,06 112 5,41 5,82 6,01 Entertainment expenses 145.181,74 165.967,57 261.290,90 157 0,61 0,59 0,86 Insurance premiums 143.139,52 146.573,01 165.232,14 113 0,60 0,52 0,54 Other expenses 171.554,42 604.140,42 306.201,66 51 0,72 2,15 1,01 Taxes not dependent on income 156.037,67 157.142,41 155.930,50 99 0,66 0,56 0,51 Contributions to associations 270.586,39 30 4.797,17 326.637,63 107 1,14 1,09 1,08 Banking services 60.095,14 67.946,34 77.0 49,20 113 0,25 0,24 0,25 Costs of other employee rights 19.152,43 29.394,87 27.573,36 94 0,08 0,10 0,09 Other costs 105.506,39 227. 537,98 553.754,77 243 0,44 0,81 1,82 OTHER COSTS TOTAL 3.184.286,96 4.529.903,90 4.963.291,17 110 13,42 16,15 16,35 Gross salaries 5.420.703,72 6.772.009,32 7.519.161,80 111 22,84 22,84 24,77 Contributions for gross salaries 897.829,53 1.121.190,29 1.244.722,93 111 3,78 3,78 4,10 TOTAL COST OF SALARIES 6.318.533,25 7. 8 93.199,61 8.763.884,73 111 26,63 28,14 28,87 TOTAL COSTS 16.461.235,44 20.490.923,51 22.565.319,71 110 69,36 73,06 74,35 OPERATING PROFIT 7.270.404,71 7.556.885,16 7.786.212,12 OPERATING REVENUE AND EXPENSES Share of individual operating revenue and expenditures in total generated operating revenue OPERATING PROFIT ACHIEVED (profit from operating activities) 7.1.5 FINANCIAL OPERATING RESULTS AT COMPANY LEVEL (EUR) 135ANNUAL REPORT FOR THE YEAR 2024 Overview of the financial operating results for 2024 and comparison with the period 2018 - 2023 DESCRIPTION 31/12/2018 31/12/2019 31/12/2020 31/12/2021 31/12/2022 31/12/2023 31/12/2024 Index 2024/2023 Operating revenues 21.167.975,99 22.259.196,94 12.959.129,14 17.8 47.335,99 23.731.340,15 28.0 47.808,67 30.351.531,83 108,21 Financial revenues 206.883,66 11.366,05 12.901,37 47.829,98 47.144,05 238.931,40 334.460,74 139,98 Extraordinary revenues 0,00 0,00 0,00 0,00 0,00 0,00 0,00 #DIV/0! TOTAL REVENUES 21.374.859,65 22.270.562,99 12.972.030,50 17.895.165,96 23.778.484,20 28.286.740,07 30.685.992,57 108,48 Operating expenses 14.179.126,14 15.593.244,76 10.145.711,43 11.419.647,19 16.500.561,53 20.490.923,51 22.565.319,71 110,12 Financial expenses 581.881,95 610.114,35 610.441,01 446.235,49 454.825,48 486.113,85 462.220,70 95,08 Extraordinary expenses 0,00 0,00 0,00 0,00 0,00 0,00 0,00 #DIV/0! Amortisation 1.698.440,16 1.908.478,86 2.080.251,35 2.530.778,27 2.963.899,80 3.239.285,13 3.224.408,20 99,54 TOTAL EXPENSES 16.459.448,25 18.111.837,97 12.836.403,78 14.396.660,95 19.919.286,81 24.216.322,49 26.251.948,61 108,41 PROFIT BEFORE TAX 4.915.411,40 4.158.725,02 135.626,72 3.498.505,01 3. 859.197, 39 4.070.417,58 4.434.043,96 108,93 NET PROFIT 4.915.411,40 4.158.725,02 135.626,72 2.942.793,29 3.117.753,76 3.279.530,22 3.576.074,33 109,05 OPERATING PROFIT/LOSS 6.988.849,85 6.665.952,18 2.813.417,71 6.427.688,79 7.230.7 78,62 7.556.885,16 7.786.212,12 103,03 EBITDA 7.195.733,52 6.677.318,23 2.826.319,08 6.475.518,77 7. 277.922,67 7.795.816,56 8.120.672,86 104,17 7 FINANCIAL RESULTS OF THE COMPANY (EUR) 7 FINANCIAL RESULTS OF THE COMPANY 7.2 FINANCIAL RESULTS OF THE COMPANY 7.2.1 FINANCIAL OPERATING RESULTS OF THE COMPANY 136ANNUAL REPORT FOR THE YEAR 2024 7 FINANCIAL RESULTS OF THE COMPANY 0 ,00 1 .00 0 .00 0, 00 2 .00 0 .00 0, 00 3 .00 0 .00 0, 00 4 .00 0 .00 0, 00 5 .00 0 .00 0, 00 6 .00 0 .00 0, 00 7 .00 0 .00 0, 00 8 .00 0 .00 0, 00 9 .00 0 .00 0, 00 31/12/2018 31/12/2019 31/12/2020 31/12/2021 31/12/2022 31/12/2023 31/12/2024 PROF IT BE FORE TA X OPERATING PROFIT/LOSS 0,00 5.000 .000, 00 10.000.000,00 15.000.000,00 20.000.000,00 25.000.000,00 30.000.000,00 35.000.000,00 Opera ting reve nue s Financial revenues Extraordinary revenues 31/12/2018 31/12/2019 31/12/2020 31/12/2021 31/12/2022 31/12/2023 31/12/2024 0,00 5.00 0 .00 0, 00 10.000.000,00 15.000.000,00 20.000.000,00 25.000.000,00 Opera ting expens es Financial expenses Extra ordinar y expens es Amortisation 31/12/2018 31/12/2019 31/12/2020 31/12/2021 31/12/2022 31/12/2023 31/12/2024 REVENUES 2018 - 2024 EXPENSES 2018 - 2024 137ANNUAL REPORT FOR THE YEAR 2024 1 The total revenue amounted to EUR 30,685,992.57, in- creasing by 8.48% compared to EUR 28,286,740.07 in 2023, as a result of an increase in operating and finan- cial revenue. Operating revenue in the amount of EUR 30,351,531.83 grew by 8.21%, or EUR 2,303,723.16 compared to the previous year, generated by the growth in sales reve- nue across all Company sectors, especially in tourism due to the increase in the volume of business activities. Revenue from sales amounted to EUR 30,022,421.49, representing an increase of 7.81% compared to 2023, when it amounted to EUR 27,848,262.58, due to a 14% increase in revenue from sales on the domestic market. Revenue from sales represented 98.92% of operating revenue and 97.84% of total revenue. 2 Total expenses amounted to EUR 26,251,948.61, and compared to 2023, when they amounted to EUR 24,216,322.49, they increased by 8.41%, i.e. EUR 2.035.626,12 due to a 10.12% increase in operating ex- penses. Operating expenses in the reporting period amounted to EUR 22.565,319.71, recording an increase 10.12%, i.e. EUR 2,074,396.20 compared to 2023, when they amounted to EUR 20,490,923.51, and are a result of the growth in operating expenses (cost of salaries, out- sourced services, raw materials, materials and other costs) due to the increase in business activities at the level of all sectors and the general increase in the prices of goods and services. 3 The Company’s operating profit amounted to EUR 7,786,212.12 and compared 2023, when it amounted to EUR 7,556,885.16, it increased by 3.03%, i.e. EUR 229,326.96. Profit before tax in the reporting period amounted to EUR 4,434,043.96, and compared to the previous busi- ness year, when it amounted to EUR 4,070,417.58, it in- creased by 8.93%, i.e. EUR 363,626.38. Net profit amounted to EUR 3,576,074.33 and com- pared to the previous year, when it amounted to EUR 3,279,530.22, it increased by 9.05%, i.e. EUR 296,544.11. EBITDA, i.e. earnings before depreciation, interest and taxes, amounted to EUR 8,120,672.86 and showed an increase of 4.17%, or EUR 324,856.30 compared to the previous business year when it amounted to EUR 7,795,816.56. EBIT, i.e. earnings before financing expenses, amounted to EUR 4,896,264.66, and showed an increase of 7.46%, or EUR 339,733.23 compared to the previous business year when it amounted to EUR 4,556,531.43. In 2024, the Company showed the best performance so far in terms of revenue, total and business, which are the result of growth in the activities of all sectors with growth rates ranging from 3% to 43%, which resulted in the growth of total revenue by 8.48% and business revenue by 8.21%. In the same period, operating ex- penses also increased by 8.41%, i.e. at a rate slightly lower than the growth rate of total revenue, which also contributed to the strenghtening the business profita- bility expressed in the growth of all key indicators, i.e. operating profit, profit before tax, net profit, EBITDA and EBIT. The Company considers the achieved oper- ating results in terms of revenue and profitability to be successful, especially taking into account the macroe- conomic circumstances of the business year, primarily the ongoing strong inflation at the national level and in other EU Member States, the continuous increase in labour costs, the strong geopolitical instability and the return of competitive tourist destinations in the Medi- terranean. 7 FINANCIAL RESULTS OF THE COMPANY 138ANNUAL REPORT FOR THE YEAR 2024 Revenue from the hotel sector amounted to EUR 9,797,346.04, recording an increase of 9%, i.e. EUR 775,424.26 compared to 2023, when it amounted to EUR 9,021,921.78, due to significant growth in physical turnover, arrivals and overnight stays, i.e. business ac- tivities with special emphasis on the pre- and post-sea- son, accompanied by the growth in key market and fi- nancial indicators, occupancy and occupancy days. Revenue of the nautical sector amounted to EUR 9,117,404.47, recording an increase of 9%, i.e. EUR 734,277.81 compared to 2023, when it amounted to EUR 8,383,126.66, due to an 8% increase in revenue in the accommodation segment, i.e. Marina Kornati, and a strong increase in nautical fair revenue, which increased by 23%. Revenue of the camping sector amounted to EUR 7,728,416.08, recording an increase of 3%, i.e. EUR 242,732.98 compared to 2023, when it amounted to EUR 7,485,683.10, due to a 5% increase in revenue in the accommodation segment, i.e. the “Park Soline” campsite, generated by an increase in revenue from lump sum guests, mobile homes and other services. Revenue from the real estate sector, i.e. the City Gal- leria Business and Shopping Centre amounted to EUR 2,159,072.06 recording an increase of 5%, i.e. EUR 103,021.20 compared to 2023, when it amounted to EUR 2,056,050.86, due to an increase in revenue from commercial premises lease, revenue from common costs and garage revenue. REVENUE BY ACTIVITIES: 7 FINANCIAL RESULTS OF THE COMPANY Revenue from other sectors, i.e. DMC Ilirija Travel and other profit centres of the Company, amounted to EUR 1,549,293.18 recording an increase of EUR 448,273.91 compared to the previous year, when it amounted to EUR 1,101,026.27, due to a significant increase in rev- enue by 43% generated by destination management company Ilirija Travel as a result of the growth in phys- ical indicators (increase in the number of events and people) and the organisation of higher-value events. GRAND TOTAL: Operating revenue per activity amount- ed to EUR 30,351,531.83, and compared to 2023, when it amounted to EUR 28,047,808.67, it increased by 8%, i.e. EUR 2,303,723.16. 139ANNUAL REPORT FOR THE YEAR 2024 Financial statements of the Company as at 31/12/2024 and a comparison with the period from 2019 to 2023 7 FINANCIAL RESULTS OF THE COMPANY REVENUES 2019 2020 2021 2022 2023 2024 INDEX 2024/2023 Revenue on the domestic market 16.698.613,17 10.480.685,84 14.405.343,69 19.132.960,71 22.562.938,56 25.820.121,17 114 Revenues on foreign market 5.265.553,03 1.498.399,36 2.699.398,25 4.477.288, 33 5.345.938,25 4.263.724,09 80 Other operating revenues 295.030,74 980.043,94 742.594,05 121.091,11 138.931,86 267.68 6,57 193 OPERATING REVENUES 22.259.196,94 12.959.129,14 17.8 47.335,99 23.731.340,15 28.047.8 08,67 30.351.531,83 108 FINANCIAL REVENUES 11.366,05 12.901,37 47.829,98 47.144,05 238.931,40 334.460,74 140 EXTRAORDINARY REVENUES 0,00 0,00 0,00 0,00 0,00 0,00 #DIV/0! TOTAL REVENUES 22.270.562,99 12.972.030,50 17.895.165,96 23.778.484,20 28.286.740,07 30.685.992,57 108 EXPENSES Raw material and material costs 3.232.619,57 1.472.737,48 2.272.794,39 3.650.771,30 4.046.349,21 4.146.300,75 102 Costs of services 2.874.002,90 2.158.335,52 2.453.538,75 3.307.6 43,93 4.021.470,79 4.691.843,06 117 Gross pays 5.622.472,88 4.0 41.57 7,94 4.506.151,93 6.318.533,25 7.893.199,61 8.763.884,73 111 Other expenses 3.864.149,41 2.473.060,48 2.187.162,13 3.223.613,05 4.529.903,90 4.963.291,17 110 TOTAL EXPENSES 15.593.244,76 10.145.711,43 11.419.647,19 16.500.561,53 20.490.923,51 22.565.319,71 110 AMORTISATION 1.908.478,86 2.080.251,35 2.530.778,27 2.963.899,80 3.239.285,13 3.224.408,20 100 FINANCIAL EXPENSES 610.114,35 610.441,01 446.235,49 454.825,48 486.113,85 462.220,70 95 EXTRAORDINARY EXPENSES 0,00 0,00 0,00 0,00 0,00 0,00 #DIV/0! TOTAL EXPENSES 18.111.837,97 12.836.403,78 14.396.660,95 19.919.286,81 24.216.322,49 26.251.948,61 108 PROFIT BEFORE TAX 4.158.725,02 135.626,72 3.498.505,01 3.859.197,39 4.070.417,58 4.434.043,96 109 NET PROFIT 4.158.725,02 135.626,72 2.942.793,29 3.117.753,76 3.279.530,22 3.576.074,33 109 OPERATING PROFIT/LOSS 6.665.952,18 2.813.417,71 6.427.68 8,79 7.230.778,62 7.556.885,16 7.786.212,12 103 EBITDA 6.677.318,23 2.826.319,08 6.475.518,77 7.277.922,67 7.795.816,56 8.120.672,86 104 (EUR) 140ANNUAL REPORT FOR THE YEAR 2024 7 FINANCIAL RESULTS OF THE COMPANY Items Annual cumulative achieve- ments in 2022 Annual cumulative achieve- ments in 2023 Annual cumulative achieve- ments in 2024 Index 2024/2023 TOTAL NET REVENUE (operating) 22.395.858,89 26.534.593,86 28.636.566,95 107,92 Total direct costs 1.500.697,46 1.747.0 02,66 1.937.593,21 110,91 Total salary and labor costs 4.319.332,16 5.340.398,02 5.834.050,88 109,24 Total other department costs 1.390.073,23 1.637.228,53 1.761.682,39 107,60 TOTAL CONTRIBUTION 15.185.756,03 17.80 9.96 4,65 19.013.240,47 106,76 Total costs to GOP 14.878.592,68 18.343.804,34 19.699.226,13 107, 39 GOP 7.517.266, 21 8.190.789,52 8.937.340, 82 109,11 Grandtotal net revenues 23.778.484,20 28.286.740,07 30.685.992,57 108,48 Grandtotal costs 19.919.286,81 24.216.322,49 26.251.948,61 108,41 PROFIT BEFORE TAXATION 3.859.197,39 4.070.417,58 4.434.043,96 108,93 Corporate income tax 741.443,62 790.887,36 857.969,63 108,48 NET PROFIT 3.117.753,76 3.279.530,22 3.576.074,33 109,04 EBITDA 7.277.922,67 7.795.816,56 8.120.672,86 104,17 EBIT 4.314.022,87 4.556.531,43 4.896.264,66 107,46 FINANCIAL OPERATIONS REPORTING SYSTEM ACCORDING TO USALI STANDARDS 01/01/2024-31/12/2024 ILIRIJA D.D. TOTAL (after the allocation of common revenues and common costs) (EUR) 141 ANNUAL REPORT FOR THE YEAR 2024 STATEMENT OF PROFIT OR LOSS for the period 01/01/2024 to 31/12/2024 in EUR Submitter: ILIRIJA d.d. Item ADP code Same period of the previous year Current period 1 2 3 4 I OPERATING INCOME (ADP 002 to 006) 001 28.047.809 30.351.532 1 Income from sales with undertakings within the group 002 2.040 2.040 2 Income from sales (outside group) 003 27.846.223 30.020.381 3 Income from the use of own products, goods and services 004 4.455 10.643 4 Other operating income with undertakings within the group 005 0 0 5 Other operating income (outside the group) 006 195.091 318.468 II OPERATING EXPENSES (ADP 08+009+013+017+018+019+022+029) 007 23.730.209 25.789.728 1 Changes in inventories of work in progress and finished goods 008 0 0 2 Material costs (ADP 010 to 012) 009 8.067.820 8.838.144 a) Costs of raw materials and consumables 010 4.046.349 4.146.301 b) Costs of goods sold 011 0 0 c) Other external costs 012 4.021.471 4.691.843 3 Staff costs (ADP 014 to 016) 013 7.893.200 8.763.885 a) Net salaries and wages 014 4.717.933 5.286.723 b) Tax and contributions from salary costs 015 2.054.077 2.232.439 c) Contributions on salaries 016 1.121.190 1.244.723 4 Depreciation 017 3.239.285 3.224.408 5 Other costs 018 3.979.260 4.657.089 6 Value adjustments (ADP 020+021) 019 0 0 a) fixed assets other than financial assets 020 0 0 b) current assets other than financial assets 021 0 0 7 Provisions (ADP 023 to 028) 022 0 0 a) Provisions for pensions, termination benefits and similar obligations 023 0 0 b) Provisions for tax liabilities 024 0 0 c) Provisions for ongoing legal cases 025 0 0 d) Provisions for renewal of natural resources 026 0 0 e) Provisions for warranty obligations 027 0 0 f) Other provisions 028 0 0 8 Other operating expenses 029 550.644 306.202 III FINANCIAL INCOME (ADP 031 to 040) 030 238.931 334.461 1 Income from investments in holdings (shares) of undertakings within the group 031 0 0 2 Income from investments in holdings (shares) of companies linked by virtue of participating interests 032 0 0 3 Income from other long-term financial investment and loans granted to undertakings within the group 033 0 0 4 Other interest income from operations with undertakings within the group 034 0 0 5 Exchange rate differences and other financial income from operations with undertakings within the group 035 0 0 6 Income from other long-term financial investments and loans 036 0 0 7 Other interest income 037 238.812 334.461 8 Exchange rate differences and other financial income 038 119 0 9 Unrealised gains (income) from financial assets 039 0 0 10 Other financial income 040 0 0 7 FINANCIAL RESULTS OF THE COMPANY 142 ANNUAL REPORT FOR THE YEAR 2024 IV FINANCIAL EXPENSES (ADP 042 to 048) 041 486.114 462.221 1 Interest expenses and similar expenses with undertakings within the group 042 0 0 2 Exchange rate differences and other expenses from operations with undertakings within the group 043 0 0 3 Interest expenses and similar expenses 044 478.251 448.924 4 Exchange rate differences and other expenses 045 1.286 6.437 5 Unrealised losses (expenses) from financial assets 046 0 0 6 Value adjustments of financial assets (net) 047 0 0 7 Other financial expenses 048 6.577 6.860 V SHARE IN PROFIT FROM UNDERTAKINGS LINKED BY VRITUE OF PARTICIPATING INTERESTS 049 0 0 VI SHARE IN PROFIT FROM JOINT VENTURES 050 0 0 VII SHARE IN LOSS OF COMPANIES LINKED BY VIRTUE OF PARTICIPATING INTEREST 051 0 0 VIII SHARE IN LOSS OF JOINT VENTURES 052 0 0 IX TOTAL INCOME (ADP 001+030+049 +050) 053 28.286.740 30.685.993 X TOTAL EXPENDITURE (ADP 007+041+051 + 052) 054 24.216.323 26.251.949 XI PRE-TAX PROFIT OR LOSS (ADP 053-054) 055 4.070.417 4.434.044 1 Pre-tax profit (ADP 053-054) 056 4.070.417 4.434.044 2 Pre-tax loss (ADP 054-053) 057 0 0 XII INCOME TAX 058 790.887 857.970 XIII PROFIT OR LOSS FOR THE PERIOD (ADP 055-059) 059 3.279.530 3.576.074 1 Profit for the period (ADP 055-059) 060 3.279.530 3.576.074 2 Loss for the period (ADP 059-055) 061 0 0 DISCONTINUED OPERATIONS (to be filled in by undertakings subject to IFRS only with discontinued operations) XIV PRE-TAX PROFIT OR LOSS OF DISCONTINUED OPERATIONS (ADP 063- 064) 062 0 0 1 Pre-tax profit from discontinued operations 063 0 0 2 Pre-tax loss on discontinued operations 064 0 0 XV INCOME TAX OF DISCONTINUED OPERATIONS 065 0 0 1 Discontinued operations profit for the period (ADP 062-065) 066 0 0 2 Discontinued operations loss for the period (ADP 065-062) 067 0 0 TOTAL OPERATIONS (to be filled in only by undertakings subject to IFRS with discontinued operations) XVI PRE-TAX PROFIT OR LOSS (ADP 055-+062) 068 0 0 1 Pre-tax profit (ADP 068) 069 0 0 2 Pre-tax loss (ADP 068) 070 0 0 XVII INCOME TAX (ADP 058+065) 071 0 0 XVIII PROFIT OR LOSS FOR THE PERIOD (ADP 068-071) 072 0 0 1 Profit for the period (ADP 068-071) 073 0 0 2 Loss for the period (ADP 071-068) 074 0 0 APPENDIX to the P&L (to be filled in by undertakings that draw up consolidated annual financial statements) XIX PROFIT OR LOSS FOR THE PERIOD (ADP 076+077) 075 0 0 1 Attributable to owners of the parent 076 0 0 2 Attributable to minority (non-controlling) interest 077 0 0 STATEMENT OF OTHER COMPRHENSIVE INCOME (to be filled in by undertakings subject to IFRS) I PROFIT OR LOSS FOR THE PERIOD 078 3.279.530 3.576.074 II OTHER COMPREHENSIVE INCOME/LOSS BEFORE TAX (ADP 80+ 87) 079 0 0 7 FINANCIAL RESULTS OF THE COMPANY 143 ANNUAL REPORT FOR THE YEAR 2024 III Items that will not be reclassified to profit or loss (ADP 081 to 085) 080 0 0 1 Changes in revaluation reserves of fixed tangible and intangible assets 081 0 0 2 Gains or losses from subsequent measurement of equity instruments at fair value through other comprehensive income 082 0 0 3 Fair value changes of financial liabilities at fair value through statement of profit or loss, attributable to changes in their credit risk 083 0 0 4 Actuarial gains/losses on the defined benefit obligation 084 0 0 5 Other items that will not be reclassified 085 0 0 6 Income tax relating to items that will not be reclassified 086 0 0 IV Items that may be reclassified to profit or loss (ADP 088 to 095) 087 0 0 1 Exchange rate differences from translation of foreign operations 088 0 0 2 Gains or losses from subsequent measurement of debt securities at fair value through other comprehensive income 089 0 0 3 Profit or loss arising from effective cash flow hedging 090 0 0 4 Profit or loss arising from effective hedge of a net investment in a foreign operation 091 0 0 5 Share in other comprehensive income/loss of companies linked by virtue of participating interests 092 0 0 6 Changes in fair value of the time value of option 093 0 0 7 Changes in fair value of forward elements of forward contracts 094 0 0 8 Other items that may be reclassified to profit or loss 095 0 0 9 Income tax relating to items that may be reclassified to profit or loss 096 0 0 V NET OTHER COMPREHENSIVE INCOME OR LOSS (ADP 080+087- 086 - 096) 097 0 0 VI COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD (ADP 078+097) 098 3.279.530 3.576.074 APPENDIX to the Statement on comprehensive income (to be filled in by undertakings that draw up consolidated statements) VI COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD (ADP 100+101) 099 0 0 1 Attributable to owners of the parent 100 0 0 2 Attributable to minority (non-controlling) interest 101 0 0 7 FINANCIAL RESULTS OF THE COMPANY 144 ANNUAL REPORT FOR THE YEAR 2024 7.2 FINANCIAL RESULTS AT COMPANY LEVEL 7.2.2 FINANCIAL POSITION OF THE COMPANY 7 FINANCIAL RESULTS OF THE COMPANY BALANCE SHEET Balance as at 31/12/2024 in EUR Submitter: ILIRIJA d.d. BIOGRAD NA MORU Item ADP code Last day of the preceding business year At the repor- ting date of the current period 1 2 3 4 A) RECEIVABLES FOR SUBSCRIBED CAPITAL UNPAID 001 0 0 B) FIXED ASSETS (ADP 003+010+020+031+036) 002 58.488.275 56.802.315 I INTANGIBLE ASSETS (ADP 004 to 009) 003 31.919 59.416 1 Research and development 004 0 0 2 Concessions, patents, licences, trademarks, software and other rights 005 0 0 3 Goodwill 006 0 0 4 Advances for the purchase of intangible assets 007 0 0 5 Intangible assets in preparation 008 0 0 6 Other intangible assets 009 31.919 59.416 II TANGIBLE ASSETS (ADP 011 to 019) 010 58.451.439 56.737.982 1 Land 011 5.894.095 5.894.095 2 Buildings 012 33.339.733 32.280.001 3 Plant and equipment 013 8.981.620 8.358.261 4 Tools, working inventory and transportation assets 014 0 0 5 Biological assets 015 0 0 6 Advances for the purchase of tangible assets 016 42.547 0 7 Tangible assets in preparation 017 205.783 389.534 8 Other tangible assets 018 0 0 9 Investment property 019 9.987.661 9.816.091 III FIXED FINANCIAL ASSETS (ADP 021 to 030) 020 4.917 4.917 1 Investments in holdings (shares) of undertakings within the group 021 4.917 4.917 2 Investments in other securities of undertakings within the group 022 0 0 3 Loans, deposits, etc. to undertakings within the group 023 0 0 4. Investments in holdings (shares) of companies linked by virtue of participating interests 024 0 0 5 Investment in other securities of companies linked by virtue of participating interests 025 0 0 6 Loans, deposits etc. given to companies linked by virtue of participating interests 026 0 0 7 Investments in securities 027 0 0 8 Loans, deposits, etc. given 028 0 0 9 Other investments accounted for using the equity method 029 0 0 10 Other fixed financial assets 030 0 0 IV RECEIVABLES (ADP 032 to 035) 031 0 0 1 Receivables from undertakings within the group 032 0 0 2 Receivables from companies linked by virtue of participating interests 033 0 0 3 Customer receivables 034 0 0 4 Other receivables 035 0 0 V DEFERRED TAX ASSETS 036 0 0 C) CURRENT ASSETS (ADP 038+046+053+063) 037 13.071.915 14.215.009 I INVENTORIES (ADP 039 to 045) 038 203.498 276.162 145 ANNUAL REPORT FOR THE YEAR 2024 1 Raw materials and consumables 039 203.498 276.162 2 Work in progress 040 0 0 3 Finished goods 041 0 0 4 Merchandise 042 0 0 5 Advances for inventories 043 0 0 6 Fixed assets held for sale 044 0 0 7 Biological assets 045 0 0 II RECEIVABLES (ADP 047 to 052) 046 843.000 910.596 1 Receivables from undertakings within the group 047 0 0 2 Receivables from companies linked by virtue of participating interests 048 0 0 3 Customer receivables 049 530.351 649.011 4 Receivables from employees and members of the undertaking 050 20.399 16.458 5 Receivables from government and other institutions 051 39.082 24.824 6 Other receivables 052 253.168 220.303 III CURRENT FINANCIAL ASSETS (ADP 054 to 062) 053 12.000.000 13.000.000 1 Investments in holdings (shares) of undertakings within the group 054 0 0 2 Investments in other securities of undertakings within the group 055 0 0 3 Loans, deposits, etc. to undertakings within the group 056 0 0 4 Investments in holdings (shares) of companies linked by virtue of participating interests 057 0 0 5 Investment in other securities of companies linked by virtue of participating interests 058 0 0 6 Loans, deposits etc. to companies linked by virtue of participating interests 059 0 0 7 Investments in securities 060 0 0 8 Loans, deposits, etc. given 061 12.000.000 13.000.000 9 Other financial assets 062 0 0 IV CASH AT BANK AND IN HAND 063 25.417 28.251 D ) PREPAID EXPENSES AND ACCRUED INCOME 064 0 538.912 E) TOTAL ASSETS (ADP 001+002+037+064) 065 71.560.190 71.556.236 OFF-BALANCE SHEET ITEMS 066 0 0 LIABILITIES A) CAPITAL AND RESERVES (ADP 068 to 070+076+077+081+084+087) 067 53.114.266 54.693.348 I INITIAL (SUBSCRIBED) CAPITAL 068 30.420.000 30.420.000 II CAPITAL RESERVES 069 389.195 389.195 III RESERVES FROM PROFIT (ADP 071+072-073+074+075) 070 4.975.723 4.664.642 1 Legal reserves 071 3.195.698 3.195.698 2 Reserves for treasury shares 072 925.837 925.837 3 Treasury shares and holdings (deductible item) 073 -137.207 -448.288 4 Statutory reserves 074 0 0 5 Other reserves 075 991.395 991.395 IV REVALUATION RESERVES 076 0 0 V FAIR VALUE RESERVES (ADP 078 to 080) 077 0 0 1 Financial assets at fair value through other comprehensive income (i.e. available for sale) 078 0 0 2 Cash flow hedge - effective portion 079 0 0 3 Hedge of a net investment in a foreign operation - effective portion 080 0 0 4 Other fair value reserves 081 0 0 5 Exchange differences arising from the translation of foreign operations (consolidation) 082 0 0 VI RETAINED PROFIT OR LOSS BROUGHT FORWARD (ADP 084-085) 083 14.049.818 15.643.437 1 Retained profit 084 14.049.818 15.643.437 2 Loss brought forward 085 0 0 7 FINANCIAL RESULTS OF THE COMPANY 146 ANNUAL REPORT FOR THE YEAR 2024 VII PROFIT OR LOSS FOR THE BUSINESS YEAR (ADP 087-088) 086 3.279.530 3.576.074 1 Profit for the business year 087 3.279.530 3.576.074 2 Loss for the business year 088 0 0 VIII MINORITY (NON-CONTROLLING) INTEREST 089 0 0 B) PROVISIONS (ADP 091 to 096) 090 154.108 154.108 1 Provisions for pensions, termination benefits and similar obligations 091 0 0 2 Provisions for tax liabilities 092 0 0 3 Provisions for ongoing legal cases 093 154.108 154.108 4 Provisions for renewal of natural resources 094 0 0 5 Provisions for warranty obligations 095 0 0 6 Other provisions 096 0 0 C) LONG-TERM LIABILITIES (ADP 098 to 108) 097 12.011.845 10.156.776 1 Liabilities towards undertakings within the group 098 0 0 2 Liabilities for loans, deposits, etc. to companies within the group 099 0 0 3 Liabilities towards companies linked by virtue of participating interest 100 0 0 4 Liabilities for loans, deposits etc. of companies linked by virtue of participating interest 101 0 0 5 Liabilities for loans, deposits etc. 102 0 0 6 Liabilities towards banks and other financial institutions 103 12.011.845 10.156.776 7 Liabilities for advance payments 104 0 0 8 Liabilities towards suppliers 105 0 0 9 Liabilities for securities 106 0 0 10 Other long-term liabilities 107 0 0 11 Deferred tax liability 108 0 0 D) SHORT-TERM LIABILITIES (ADP 110 to 123) 109 6.028.447 6.315.481 1 Liabilities towards undertakings within the group 110 0 38.217 2 Liabilities for loans, deposits, etc. to companies within the group 111 0 0 3 Liabilities towards companies linked by virtue of participating interest 112 0 0 4 Liabilities for loans, deposits etc. of companies linked by virtue of participating interest 113 0 0 5 Liabilities for loans, deposits etc. 114 0 0 6 Liabilities towards banks and other financial institutions 115 3.183.524 3.421.118 7 Liabilities for advance payments 116 11.293 57.251 8 Liabilities towards suppliers 117 1.798.103 1.600.491 9 Liabilities for securities 118 0 0 10 Liabilities towards employees 119 365.138 379.461 11 Taxes, contributions and similar liabilities 120 516.281 653.103 12 Liabilities arising from the share in the result 121 0 11.732 13 Liabilities arising from fixed assets held for sale 122 0 0 14 Other short-term liabilities 123 0 0 E) ACCRUALS AND DEFERRED INCOME 124 405.632 390.631 F) TOTAL – LIABILITIES (ADP 067+090+097+109+124) 125 71.560.190 71.556.236 G) OFF-BALANCE SHEET ITEMS 126 0 0 7 FINANCIAL RESULTS OF THE COMPANY 147ANNUAL REPORT FOR THE YEAR 2024 KEY FINANCIAL INDICATORS OF THE ASSETS, CAPITAL, LIABILITY INDICATORS AND OPERATING RESULTS OF THE COMPANY AS AT 31/12/2024 1 VALUE OF ASSETS The value of the Company assets as at 31/12/2024 amounted to EUR 71,556,236.14, at the level of 2023, when it amounted to EUR 71,560,190.12. The value of the Company assets as at 31/12/2024 in- creased by 73.41%, i.e. EUR 30,291,078.23 compared to the same period of 2014, when it amounted to EUR 41,265,157.91. 2 TOTAL LIABILITIES Total liabilities of the Company amounted to EUR 16,862,887.68, and compared to 2023, when they amounted to EUR 18,445,923.49, they decreased by 8.58%, i.e. EUR 1,583,035.81, due to the decrease in long-term liabilities, i.e. long-term loan liabilities and long-term financial leasing. Total liabilities of the Company as at 31/12/2024 were lower by 4.51%, i.e. EUR 796,361.99, compared to total liabilities of the Company as at 31/12/2014 when they amounted to EUR 17,659,249.67. 3 CAPITAL AND RESERVES Capital and reserves as at 31/12/2024 amounted to EUR 54,693,348.46 and compared to 2023, when they amounted to EUR 53,114,266.63, they increased by 2.98%, i.e. EUR 1,579,081.83, due to the increase in re- tained profit by 11.34% and the increase in net profit by 9.05%. Comparing capital and reserves of the Company as at 31/12/2024, they increased by EUR 31,087,440.22, i.e. 131.70% compared to 2014 when they amounted to EUR 23,605,908.24. Since the table providing an overview of the Company’s key indicators covers the years from 2024 to 2014 (eleven years), the realised described indicators are also listed in absolute amounts and growth rates. 7.2.2 FINANCIAL POSITION OF THE COMPANY 7 FINANCIAL RESULTS OF THE COMPANY 4 NET DEBT Net debt as at 31/12/2024 amounted to EUR 539,116.87, and compared to the previous year, when it amounted to EUR 3,195,369.06, it decreased by EUR 2,656,252.19, i.e. 83.13%, making this the lowest amount of the Com- pany’s net debt so far on an annual basis. This is also a 96.02%, or EUR 13,036,125.21, decrease compared to 2014, when the net debt amounted to EUR 13,575,242.08. 5 TOTAL REVENUE The total revenue amounted to EUR 30,685,992.57, and compared to 2023, when it amounted to EUR 28,286,740.07, it increased by 8.48%, i.e. EUR 2,399,252.50, due to an increase in operating rand fi- nancial revenue. 148ANNUAL REPORT FOR THE YEAR 2024 Total revenue of the Company, compared to the same period of 2014 when it amounted to EUR 16,308,149.46, increased by 88.17%, i.e. EUR 14,377,843.11. 6 OPERATING PROFIT Operating profit of the Company amounted to EUR 7,786,212.12, and compared to 2023, when it amount- ed to EUR 7,556,885.16, it increased by 3.03%, i.e. EUR 229,326.96, due to the growth in business activities across all Company sectors. Comparing the operating profit generated in 2024 and the one from 2014, when it amounted to EUR 4,373,925.04, a 78.01%, or EUR 3,412,287.08 increase can be seen. 7 EBITDA EBITDA amounted to EUR 8,120,672.86, increas- ing by 4.17%, or EUR 324,856.30 compared to EUR 7,795,816.56 in 2023. In the reporting period the EBITDA increased by 84.23% or EUR 3,712,797.45 compared to 2014, when it amounted to EUR 4,407,875.41. 7 FINANCIAL RESULTS OF THE COMPANY 8 PROFIT BEFORE TAX The Company’s profit before tax in the reporting pe- riod amounted to EUR 4,434,043.96, and compared to 2023, when it amounted to EUR 4,070,417.58, it in- creased by 8.93%, i.e. EUR 363,626.38. Profit before tax realised in 2024, compared to the prof- it realised in 2014 that amounted to EUR 2,705,569.73, increased by 63.89%, i.e. EUR 1,728,474.23. 9 NET PROFIT Net profit in the reporting period amounted to EUR 3,576,074.33, and compared to 2023, when it amount- ed to EUR 3,279,530.22, it increased by 9.05%, i.e. EUR 296,544.11. Net profit realised in 2024, compared to the net profit realised in 2014 that amounted to EUR 2,454,469.98, increased by 45.70%, i.e. EUR 1,121,604.35. 10 DIVIDEND A dividend in the amount of EUR 1,685,911.50 was paid to shareholders, increased by 27.37%, i.e. EUR 362,203.40 compared to the dividend paid in 2023, when it amounted to EUR 1.323.708,10. The Company allocated 239.57%, i.e. EUR 1,189,423.35, more for dividend distribution in 2024 compared to the dividend paid to shareholders in 2014, when it amount- ed to EUR 496,488.15. In the period from 2014 until 31/12/2024, the share- holders were paid a total of EUR 8,649,577.46 for div- idends. 149ANNUAL REPORT FOR THE YEAR 2024 CUMULATIVE COMPARATIVE OVERVIEW of asset, capital, liability indicators and operating results of the Company as at 31/12/2024 and for the period from 2014 to 2023 YEAR TOTAL LIABILITIES CAPITAL VALUE OF ASSETS NET DEBT REVENUES OPERATING PROFIT EBITDA PROFIT BEFORE TAX NET PROFIT ANNUAL DIVIDEND 1 2 3 4 5 6 7 8 9 10 11 31/12/2024 16.862.887,68 54.693.348,46 71.556.236,14 539.116,87 30.685.992,57 7.786.212,12 8.120.672,86 4.434.043,96 3.576.074,33 1.685.911,50 31/12/2023 18.445.923,49 53.114.266,63 71.560.190,12 3.195.369,06 28.286.740,07 7.556.885,16 7.795.816,56 4.070.417,58 3.279.530,22 1.323.708,10 31/12/2022 19.048.576,06 51.066.316,12 70.114.892,18 5.575.375,89 23.778.484,20 7.230.778,62 7.277.922,67 3. 859.197, 39 3.117.753,76 1.117.498,51 31/12/2021 16.544.966,56 49.139.955,35 65.684.921,91 7.934.616,50 17.895.165,96 6.427.68 8,79 6.475.518,77 3.498.505,01 2.942.793,29 0,00 31/12/2020 17.067.825, 35 46.197.162,06 63.264.987,41 12.150.023,98 12.972.030,50 2.813.417,71 2.826.319,08 135.626,72 135.626,72 0,00 31/12/2019 18.3 81.407,73 46.026.063,36 64.407.471,09 1 3.4 47.107,96 22.270.562,99 6.665.952,18 6.677.318,23 4.158.725,02 4.158.725,02 1.117.255, 56 31/12/2018 18. 317.937,20 43.052.015,80 61.369.953,01 14.714.843,61 21.374.859,65 6.988.849,85 7.195.733,52 4.915.411,40 4.915.411,40 958.423,25 31/12/2017 17.498.318,16 39.049.198,30 56.547.516,46 14.887.261,26 19.971.687,23 6.455.124,95 6.582.689,11 4.497.416,49 3.683.772,56 798.532,09 31/12/2016 18.249.686,18 36.589.542,50 54.839.228,69 15.164.970,71 17.123.76 4,99 5.786.616,54 5.976.127,08 4.146.366,29 4.071.411,04 655.272,15 31/12/2015 12.835.159,60 29.245.909,73 42.081.069,34 8.397.336,65 17.007.961,86 4.948.296,21 5.012.569,79 3.385.830,45 2. 857.969,41 496.488,15 31/12/2014 17.659.249,67 23.605.908,24 41. 265.157,91 13.575.242,08 16.308.149,46 4.373.925,04 4.407.875,41 2.705.569,73 2.454.469,98 496.488,15 7 FINANCIAL RESULTS OF THE COMPANY 150ANNUAL REPORT FOR THE YEAR 2024 0 ,00 10.000.000,00 20.000.000,00 30.000.000,00 40.000.000,00 50.000.000,00 60.000.000,00 70.000.000,00 80.000.000,00 31/12/2024 31/12/2023 31/12/2022 31/12/2021 31/12/2020 31/12/2019 31/12/2018 31/12/2017 31/12/2016 31/12/2015 31/12/2014 TOT AL LIABILITIES CAPITA L VALUE OF ASSETS NET DE BT REVENUES OPERATING PROFIT EBI TDA P ROF IT BE FORE TA X ANNUAL DIVIDEND A graph of basic operating results, as well as asset, capital and liability indicators of the Company as at 31/12/2024, and for the period 2014-2023 7 FINANCIAL RESULTS OF THE COMPANY 151ANNUAL REPORT FOR THE YEAR 2024 Indicator 2023 2024 Index 2024/2023 Financial stability, liquidity and indebtedness Self-financing rate 74.22% 76.43% 1.030 Share of equity capital in total fund sources (i.e. in total liabilities & stockholders' equity). The degree of indebtedness 25.78% 23.57% 0.914 Share of debt in total fund sources (i.e. in total liabilities & stockholders' equity). Financial stability coefficient 0.90 0.88 0.975 Fixed assets to long-term sources ratio (shareholders' capital and reserves in- creased bylong-term liabilities). Accelerated liquidity coefficient 2.00 2.16 1.079 Ratio of current assets reduced by the stocks and short-term liabilities. Current liquidity coefficient 2.03 2.20 1.083 Current assets to short-term liabilities ratio. Activity indicators Ratio of total assets turnover 0.40 0.43 1.085 Total revenue to total assets ratio shows how many times in a year the disposable assets are used to generate total revenues. Short-term assets turnover ratio 2.16 2.08 0.961 Total revenue to current assets ratio shows how many times a year the disposable current assets are used to generate total revenues. Business performance indicators Cost effectiveness 1.17 1.17 1.001 Total revenue and total expenses ratio. Profitability 11.59% 11.65% 1.005 Net profit/loss and total revenue ratio. Return on assets 4.58% 5.00% 1.090 Annual rate of return on invested assets indicates the profit/loss and total asset ratio. Share of EBITDA in total revenue 27.56% 26.46% 0.960 Earnings before interests, taxes, depreciation and amortization to total revenue ratio. Share of EBIT in total revenue 16.11% 15.96% 0.991 Earnings before interests and taxes to total revenue ratio. Key financial performance indicators in 2024 and a comparison with 2023 7 FINANCIAL RESULTS OF THE COMPANY 152ANNUAL REPORT FOR THE YEAR 2024 Composition and indicators of resources and sources of financing in the balance sheet as at 31/12/2024 and the presence of operating revenue in the sources of financing as at 31/12/2024 Indicator Year 2023 Year 2024 Index 2024/2023 Share of fixed assets in the assets 81.73 79.38 97.12 Share of current assets in the assets 18.27 20.62 112.87 Share of capital in reserves and in liabilities 74.22 76.43 102.98 Share of long-term commitments in the liabilities 16.79 14.19 84.56 Share of short-term commitments in the liabilities 8.99 9.37 104.23 Share of operating revenue in equity and reserves 52.81 55.49 105.09 Share of operating revenue in long-term commitments 233.50 298.83 127.98 Share of operating revenue in total commitments 152.05 179.99 118.37 Share of operating revenue in liabilities 39.19 42.42 108.22 7 FINANCIAL RESULTS OF THE COMPANY 153ANNUAL REPORT FOR THE YEAR 2024 Long-term credit liabilities of the Company as at 31/12/2024 31/12/2024 31/12/2023 Index 2023/2022 I LONG - TERM LIABILITIES (1+2+3+4) 8,341,107.79 EUR 9,750,643.11 EUR 85.54 1. of ERSTE & STEIERMAERKISCHE BANK d.d. 3,495,804.14 EUR 3,995,204.70 EUR 87.50 Agreement: 511766121 (5.743.106,66 EUR) 2.Long term loan of ERSTE & STEIERMAERKISCHE BANK d.d. From HBOR-a 951,713.87 EUR 1,063,680.23 EUR 89.47 Agreement:5114305381 (1.483.554,08 EUR) 3.Long term loan of ERSTE & STEIERMAERKISCHE BANK d.d. 2,900,000.31 EUR 3,300,000.27 EUR 87.88 Agreement: 517663485 (4.733.333,46 EUR) 4.Long term loan of ERSTE & STEIERMAERKISCHE BANK d.d. 993,589.47 EUR 1,391,757.91 EUR 71.39 Agreement: 5118899818 ( 2.000.000,00 EUR) II LOAN TERMS (1 + 2 +3+4) 1. For the loan under number 1 loan will be repaid in 46 equal quarter installments by the amount of 124.850,14 EUR commencing as of 01/07/2021 to 01/10/2032 Interest: fixed by 2,60% 2. For the loan under number 2 repayment will be made in 53 quarter installments. The first installment falls due 30/06/2021, and the last 30/06/2034 in equal installments by the amount of 27.991,59 EUR. Interest: variable 3% 3. For the loan under number 3 repayment will be made in 142 monthly installments. The first installment falls due 01/06/2021, and the last on 01/03/2033 in equal installments by the amount of 33.333,33 EUR. Interest: fixed by 2,60% 4. For the loan under number 5 repayment will be made in 20 quarter installments. The first installment falls due 31/07/2023, and the last on 30/04/2028 in equal installments by the amount 100.000,00 EUR. Interest: fixed by 2,25% Financial long-term leasing 1,815,667.79 EUR 2,261,201.86 EUR 80.30 TOTAL LONG-TERM LIABILITIELS 10,156,775.58 EUR 12,011,844.97 EUR 84.56 7 FINANCIAL RESULTS OF THE COMPANY 154ANNUAL REPORT FOR THE YEAR 2024 OPERATING AND OTHER COSTS The operational costs for the year 2024 amounted to EUR 22,565,319.71 and compared to the previous busi- ness year, when they amounted to EUR 20,490,923.51, they increased by 10.12%, due to the growth in all cate- gories of operating expenses, where, in absolute terms, the cost of salaries prevailed, followed by the costs of outsourced services, other costs and the cost of raw materials, materials and energy. Furthermore, the growth in operating costs resulted from an increase in business activities, the continuous improvement of the material position of employees and inflationary pres- sures on the prices of goods and services, which ulti- mately resulted in the growth in operating costs. FINANCIAL EXPENSES Financial expenses in the reporting period amounted to EUR 462,220.70, and they have decreased by 4.92% compared to the previous business year, when they amounted to EUR 486,113.85. LIQUIDITY In the reporting period, the Company fully and proper- ly maintained current liquidity and settled its liabilities towards the suppliers, the bank, the state, the employ- ees, etc. in a timely manner and within the deadlines. The Company secured a sufficient amount of liquid as- sets to settle its liabilities, having in mind the complex business circumstances due to a disrupted macroeco- nomic environment and strong inflation pressures. In November 2024, the Company concluded a Short- Term Limit Agreement with the commercial bank Er- ste&Steiermärkische Bank d.d. for the amount of EUR 3,500,000.00, which will secure a short-term credit limit for the remainder of 2024 and until November of 2025 for the purpose of maintaining current liquidity. EARNINGS PER SHARE Earnings per share for the reporting period amounted to EUR 1.49. COLLECTION OF FUTURE REVENUE With regard to the active collection of trade receiva- bles, the Company will seek to collect them in the most appropriate manner and within the most appropriate deadlines, taking into account the aggravated circum- stances of collection and implementation of the meas- ures of payment in instalments where possible, and also undertaking compulsory collection measures if needed. 7 FINANCIAL RESULTS OF THE COMPANY 155ANNUAL REPORT FOR THE YEAR 2024 7.2 FINANCIAL RESULTS AT COMPANY LEVEL: 7.2.3 COMPANY CASH FLOW Cash flow for the period 01/01-31/12/2024 27,40% 41,63% 13,44% 12,87% 4,39% 0,26% OUTFLOW OF FUNDS LABOUR COSTS SUPPLIERS-Goods- Se rvices-Inve st. BANK STA TE -TA X SHAREHOLDERS OT HER 7 FINANCIAL RESULTS OF THE COMPANY INFLOW OF FUNDS (EUR) 12/2023 12/2024 Structure OPERATING ACTIVITIES 33,333,585.80 36,160,461.25 94.98% BANK 800,000.00 1,400,000.00 3.68% OTHER 357,527.32 511,706.38 1.34% TOTAL 34,491,113.12 38,072,167.63 100.00% OUTFLOW OF FUNDS (EUR) 12/2023 12/2024 Structure LABOUR COSTS 9,144,863.74 10,505,024.28 27.4 0% SUPPLIERS-Goods-Services-Invest. 14,656,452.26 15,95 8,837.0 8 41.63% BANK 3,714,766.76 5,152,875.67 13.44% STATE-TAX 4,651,790.82 4,933,943.24 12.87% SHAREHOLDERS 1,319,600.51 1,684,805.99 4.39% OTHER 138,267.54 99,124.06 0.26% TOTAL 33,625,741.63 38,334,610.32 100.00% 156ANNUAL REPORT FOR THE YEAR 2024 8 ADDITIONAL INFORMATION 8.1 SIGNIFICANT EVENTS At its session held on 26 February 2024, the Manage- ment Board of the Company adopted the Company’s Q4 2023 financial statements (unaudited, unconsoli- dated), the Annual Report and the 2023 annual finan- cial statements (audited, unconsolidated). Also, at the session of the Supervisory Board held on the same day, the Company’s Annual Report, 2023 annual financial statements (audited, unconsolidated) were adopted and draft decisions were established, which were sent to the General Assembly for adoption. The General Assembly of the Company, held on 26 April 2024, took note of the Company’s Annual Report for 2023 together with the Audit Report for 2023, Re- port of the Supervisory Board on the Performed Su- pervision of the Company’s Operations for 2023, and the Management Board’s Report on the Acquisition of Own Shares in 2023. The General Assembly adopted the Decision on the Approval of the 2023 Report on the Remuneration of Management Board and Super- visory Board Members, the Decision on Granting Dis- charge to the Company’s Management Board for the financial year 2023, Decision on Granting Discharge to the Members of the Supervisory Board for the finan- cial year 2023, Decision on Granting Authority to the Management Board for the Acquisition of Own Shares, Decision on Confirmation of the Previously Approved Policy on the Income of the Management Board Mem- bers and the Decision on the Appointment of the au- thorised auditing company ”UHY RUDAN d.o.o.“, Ilica 213, Zagreb, PIN: 717995390000. Also, the Decision on the Use of Company Profit for the 2023 Financial Year was adopted at the General As- sembly, according to which the achieved net profit in the 2023 financial year (after tax) in the amount of EUR 3,279,530.22, is distributed as follows: - EUR 1,593,618.72 into the retained profit, and - EUR 1,685,911.50 for dividend distribution. The dividend per share amounts to EUR 0.70. At the session held on 16 September 2024, the Super- visory Board, in order to standardise the term of of- fice of its members, made a decision on the recall and re-election of all members of the Supervisory Board and established a proposal for an invitation including the agenda for the convocation of an extraordinary General Assembly of the Company, which was con- vened for 25 October 2024. On 25 October 2024, an extraordinary General Assem- bly of Ilirija d.d. was held, at which, in order to harmo- nise the Supervisory Board members’ term of office, a resolution was adopted to recall and re-elect the existing members of the Supervisory Board. Elected members of the Supervisory Board of Ilirija d.d. are as follows: Mr Goran Medić, Mr David Anthony Tudor ović, Mr Davor Tudorović, Mr Siniša Petrović and Mr Darko Prebežac. The term of office of the newly elect ed mem- bers of the Supervisory Board of the Compa ny shall be 4 (four) years. At the constituent meeting of the Supervisory Board of Ilirija d.d. held on 25 October 2024, Mr Goran Medić was elected as the Chairman of the Supervisory Board, and Mr David Anthony Tudorović was elected as the Deputy Chairman of the Board, David Anthony Tudor- ović. 8.1 SIGNIFICANT EVENTS 157ANNUAL REPORT FOR THE YEAR 2024 8.2 LEGAL MATTERS • The Ilirija Tennis Centre real property in Biograd na Moru, under the cadastral plot no. 3232, in the Ca- dastral Municipality of Biograd na Moru, surface area of 48705 m² was allocated in 1988 by the Municipal Assembly of Biograd na Moru to the predecessor of the Company for the purpose of building a complex of tennis courts. By 1990, Ilirija had built 20 tennis courts with changing rooms and a restaurant facility, auxiliary roads, parking spaces and complete infrastructure on the property, and the land was subsequently evaluated and entered in the share capital of the Company within the national conversion process. Pursuant to the lawful conversion of the Company and the Act on Ownership and Other Real Rights, the Company had been regis- tered as the sole owner and legal holder of said proper- ty until 2006, when, in the process of transforming the land registry for the Cadastral Municipality of Biograd na Moru in 2006, the entry in the land registry was changed for unknown reasons and 1/2 of the co-own- ership share of Ilirija d.d. was removed, and the Town of Biograd na Moru was entered as the co-owner of the share in question for the first time. Consequently, Ilirija d.d. initiated civil proceedings for the establishment of the right of ownership and, under the 2012 ruling of the Commercial Court in Zadar, which was upheld by the 2016 ruling of the High Commercial Court of the Republic of Croatia, Ilirija was established as the owner of the entire real property Ilirija Tennis Centre. Under the decision of the Supreme Court of the Republic of Croatia following the review initiated by the Town of Biograd na Moru, with which we were made aware of on 18 January 2022, first-instance and second-instance rulings were set aside and the case was remanded for a retrial, during which it shall be determined whether amenities have been constructed, i.e. “more compre- hensive works” have been performed on the real prop- erty at issue. In the repeated court proceedings, the Commercial Court in Zadar issued a first instance ruling on 24 May 2023 in favour of Ilirija d.d., which stipulated the Company as the owner of the Tenis centar Ilirija in its entirety. Against the said first instance ruling, the Town of Biograd na Moru filed an appeal, which was rejected by the ruling of the High Commercial Court of the Republic of Croatia as unfounded. Thereby, Ilir- ija d.d. was once again legally established as the land registry owner of the entire real property Ilirija Tennis Centre. On 30 November 2023, The Town of Biograd na Moru also filed a motion to the Supreme Court of the Republic of Croatia for permission to review this legal matter, which was refused by a decision of the Supreme Court of the Republic of Croatia dated 17 January 2024. Under the said decision of the Supreme Court of the 8.2 LEGAL MATTERS 158ANNUAL REPORT FOR THE YEAR 2024 Republic of Croatia, the claimant (the Town of Biograd na Moru) exhausted all the legal remedies for challeng- ing the ownership rights of Ilirija d.d., and the Compa- ny successfully established the lawful acquisition of the ownership rights of Ilirija Tennis Centre real property in Biograd na Moru, covering an area of 48,705 m 2 . • By the Decision of the Constitutional Court of the Re- public of Croatia No. U-III-4392/16 of 5 July 2017, the Constitutional Complaint of the Company was adopt- ed, and the ruling of the Supreme Court of the Republic of Croatia was set aside. The ruling set aside rejected the review initiated by Ilirija d.d. in the case pertain- ing to the compensation of damages against the Town of Biograd na Moru, for the purpose of conversion of the real property “Primorje” from a construction area into the so-called “area with landscape features”, and the case was referred back to the Supreme Court of the Republic of Croatia. In the repeated proceedings, the Supreme Court of the Republic of Croatia in its rul- ing number: Rev-x 688/2017 of 27 April 2022 rejected the review initiated by Ilirija d.d. as unfounded. The Company filed a constitutional complaint to the Con- stitutional Court of the Republic of Croatia against the aforementioned ruling of the Supreme Court of the Re- public of Croatia within the legal deadline. • The ruling of the County Court in Zadar No. 6 Gž- 751/16-2 of 13 June 2017 reversed the sentence of the Municipal Court in Zadar, Permanent Service in Biograd na Moru, of January 2016, and rejected the claim of the town of Biograd na Moru as unfounded. By said claim, the town of Biograd na Moru requested that the Forest Land Lease Agreement concluded between Ilirija d.d. and Hrvatske šume d.o.o. Zagreb, Forest Ad- ministration, Split Branch, be declared null and void. Thus, the dispute was finally disposed of in favour of Ilirija d.d., and given the fact that the land in question is tourist land not assessed in the process of conver- sion and privatization, Ilirija d.d. has already, within the legal deadline, submitted a request to the Govern- ment of the Republic of Croatia through the Ministry of Tourism of the Republic of Croatia, for a concession on the co-owned part of the Republic of Croatia, for the use of the "Park Soline" campsite for 50 years. In the meantime, in May 2020, the new Act on Non-Evaluat- ed Construction Land came into force, thus repealing the Act on Tourism and Other Construction Land Not Evaluated in the Conversion and Privatisation Process. The new Act on Non-Evaluated Construction Land pro- vides that buildings and land in a campsite which are estimated in the value of the capital, are owned by the company, whereas the campsite land not estimated in the value of the capital is owned by the Republic of Croatia. On 5 March 2021, Ilirija d.d. submitted, within the legal deadline, an application for a decision to the competent Croatian Ministry of Physical Planning, Con- struction and State Assets, under Article 17 of the Act on Non-Evaluated Construction Land, that is, for the determination/identification of the scope, evaluated and unevaluated parts and owners of the Park Soline campsite in Biograd na Moru and consequently for the conclusion of a lease agreement between the Republic of Croatia and Ilirija d.d. for a period of 50 years. The procedure is pending. In the meantime, on 1 April 2022 the Company, in ac- cordance with Article 18 of the Act on Non-Evaluated Construction Land, obtained from the Centre for Re- structuring and Sales the Certificate of Conformity of the Geodetic Survey Report, which confirms the con- formity of the “Park Soline Campsite Geodetic Survey Report with the decision of the Croatian Privatisation Fund of 12 July 1996, by which the real property con- cerned was evaluated in the process of conversion of the socially-owned enterprise “Ilirija” Biograd na Moru. Furthermore, in April 2023, based on the rul- ing of the Commercial Court in Zadar, adopted in the 8.2 LEGAL MATTERS 159ANNUAL REPORT FOR THE YEAR 2024 procedure of correcting the registration of ownership rights, which was confirmed by the ruling of the High Commercial Court of the Republic of Croatia, the Re- public of Croatia was registered in its entirety as the owner of the land plot with a surface area of 41 537 m² which is located within the Park Soline campsite. Namely, until that time, the Town of Biograd na Moru was registered as the land registry owner of the said land plot within the campsite. • The predecessor of the Company was allotted the maritime domain for permanent use by the Municipal Assembly of Biograd na Moru for the purpose of con- structing a sport port or marina (1976) and an outdoor swimming pool with a beach facility (1986) in Biograd na Moru. In accordance with the valid building and op- erating permits, the Company built the Ilirija-Kornati hotel port (1977–1979) and an outdoor swimming pool with beach facilities (1988), and these investments were evaluated and entered in the value of the cap- ital of Ilirija d.d. during the conversion process. The aforementioned permanent right to use the maritime domain was replaced in 1998 with a limited period con- cession, and in accordance with the Decisions of the Zadar County on the award of the concession on the maritime domain, the Maritime Domain Concession 8.2 LEGAL MATTERS Agreement was concluded for the purpose of commer- cial use of the special purpose port - nautical tourism port for a period of 12 years (until 2011) as well as the Maritime Domain Concession Agreement for the pur- pose of commercial use of the outdoor swimming pool for a period of 10 years (until 2008). Prior to the expiry of the concession for the nautical tourism port – the Il- irija-Kornati hotel port and the outdoor swimming pool with a beach facility, Ilirija d.d. submitted the applica- tions for the extension of the term of the concession by 20 years, i.e. to a total of 30 years. The competent authority has not decided on these applications to this day. Until the decision on the applications for the ex- tension of the term of concession Ilirija d.d. has been regularly paying the fee for the use of maritime domain to the budget of the Republic of Croatia. • During the conversion process, the property Dražice – Mini Golf was evaluated and entered in the value of the capital of the Company for the part with a surface area of 9,752 m², the part which Ilirija d.d. has been using uninterruptedly for the purposes of a parking lot and an entertainment and animation centre, and ac- cordingly holds in its possession, while for the rest of the land of approximately 46,000 m2 an application for a concession has been submitted. The dispute between Ilirija d.d. and the Town of Biograd na Moru before the Commercial Court in Zadar regarding the right of own- ership is pending. The Republic of Croatia has joined the proceedings. No first-instance ruling has been ren- dered in this case. • In the land registry renewal procedure for the Ca- dastral Municipality of Biograd na Moru, Ilirija d.d. was registered as the owner of the entire real property with an area of 1416 m 2 , which essentially represents the land around the hotels Ilirija and Adriatic in Biograd na Moru, considering that these land plots were evalu- ated and entered in the share capital of Ilirija d.d. in the process of conversion and privatisation of the Compa- ny. The Municipal Court in Zadar, in a proper proce- dure, rejected the objections of the Town of Biograd na Moru regarding the registration of the ownership rights of Ilirija d.d. After the objections of the Town of Biograd na Moru to the registration of ownership rights on real property, which essentially represents the land around the hotels Ilirija and Adriatic, were rejected as unfounded, the Town of Biograd na Moru filed a law- suit against Ilirija d.d. before the Commercial Court in Zadar for the purpose of correction and registration, asking to be established as the owner of the said real estate with a total area of 1,416 m 2 . The first-instance 160ANNUAL REPORT FOR THE YEAR 2024 8.2 LEGAL MATTERS ruling of the Commercial Court in Zadar rejected the claim of the Town of Biograd na Moru, and the said ruling was upheld by the ruling of the High Commer- cial Court of the Republic of Croatia of 16 May 2022. Against the ruling of the High Commercial Court of the Republic of Croatia, the Town of Biograd na Moru filed a motion for permission to review, which was reject- ed by the Supreme Court of the Republic of Croatia as inadmissible. Therefore, the ownership rights of Ilirija d.d. over the property in question as a whole remained unchanged. • As for the disputes in which the Company partici- pates, both actively or passively, we estimate that such disputes cannot significantly disrupt the Company’s business, nor can they cause significant financial ex- penses for the Company or have a significant effect on the Company’s current and future financial results. 161ANNUAL REPORT FOR THE YEAR 2024 8.3 INVESTMENTS IN 2024 Investments for 2024 amounted to EUR 1,593,127.52 and mostly related to the camping sector, the destination management company Ilirija Travel, the hotel and the real estate sector, part of which was already started in the fourth quarter of the previous business year with the aim of further improving the quality and standard of service. The largest portion of the investments was related to the camping sector, where investments were made in the further renovation of the campsite through the construction of the internal roads in the third zone, the recon- struction and installation of additional LED lighting within the entire campsite, the development of special loca- tions for waste disposal, additional investments in improving the quality of campsite accommodation and further landscaping work in the campsite up to the level of a campsite-park. In the destination management company, the investments were related to the improvement of the quality of the existing service and content, as well as the increase of catering capacities for the purpose of further development of the year-round offer. Furthermore, with regard to the hotel sector, investments were made in the redecoration and additional fur- nishment of the restaurant of Hotel Kornati, as well as in the improvement of the quality of accommodation in Hotel Ilirija and Hotel Adriatic*. In the real estate sector, i.e. the City Galleria Business and Shopping Centre, the investments were related to the relocation and adaptation of public sanitary facilities on the second floor of the Centre and the complete refurbishment and adaptation of the main communication corridor. 8.3 INVESTMENTS IN 2024 162ANNUAL REPORT FOR THE YEAR 2024 8.4. NON-OPERATING ASSETS An additional impact on the value of Company shares comes from non-performing assets, which are owned by the Company, but they are neither used for core ac- tivities of the Company, nor do they provide economic benefits to the Company. The most important non-per- forming assets owned by the Company are unused land plots (9 acres in total) at highly attractive locations: Land plot, Sv. Filip i Jakov: The Company owns a build- ing site of approximately 2.5 acres in Sv. Filip i Jakov, of which only a smaller portion is used (Villa Donat), while approximately 20,000 m 2 of the site is unused. According to the preliminary design, the Company plans to build 8 detached villas with apartments at the unused portion of the land plot, and expand the exist- ing accommodation and service facilities. The Munici- pality of Sv. Filip i Jakov adopted a Detailed Plan for the Development of a Mixed Hospitality and Tourism Zone (T1-hotel). Land plot, Villa Primorje: The Company owns approx- imately 2.5 acres of land near the Villa Primorje Hotel, of which only a smaller portion is used (approximately 10% of the total surface area). Apart from the existing physical plan, there is a possibility of building a settle- ment of traditional Dalmatian villas at the unused por- tion of the plot. The unused part of the plot is in direct contact with a building site. Land plot, Polača: The Company owns a building site of approximately 2.5 acres in Polača, located along the state road, which connects Biograd with the local motorway (regional importance). The site is equipped with basic communal infrastructure and Ilirija d.d. plans to use it to build a dry marina, which would be functionally connected with the existing nautical ca- pacities owned by Ilirija d.d. Land plot, Sv. Filip i Jakov: In December 2021, the Company bought a land plot with a surface area of 9,600 m 2 in Sv. Filip i Jakov in the crafts and services zone, within the area of the newly planned industrial zone, with the intention of building a central ware- house, distribution and service facility for the needs of the Company, which would include laundry service, central warehouse of assets, equipment and invento- ry, central warehouse of food and beverages, techni- cal service workshops, storage of machines, dry berth, ancillary mobile storages, office space for the needs of the storage and distribution facility, as well as traffic and parking areas. 8.4 NON-OPERATING ASSETS 163ANNUAL REPORT FOR THE YEAR 2024 8.5 EMPLOYMENT, LABOUR COSTS AND SALARIES In 2024, in the segment of human resources management, the Company undertook a series of activities ensuring the optimal number of employees for the business year with a special focus on the main season: employment of qualified and professional employees, timely employment of seasonal employees, maintaining a high rate of returning seaso- nal employees and actively taking care of improving their material rights, which is one of the main objectives of the Company in terms of HR policy. In the last few years, the Croatian labour market has been facing a deficit of qualified labour, especially in the tourism and catering industries, labour-intensive industries with a high participation of labour in the provision of services, but of a seasonal nature, which also significantly affects the cost of labour. The increase in the cost of labour in the Company in 2024 was partly due to the increase in business activities in the pre-season, which affected earlier em- ployment of employees, i.e. longer employment retention in the post-season, and most significantly, the Company's continuous policy of improving the financial position of employees. Compared to the previous business year, in addi- tion to the increase in the average number of employees, the total salary costs increased largely due to the average net hourly wages, i.e. the average net salary per employee, increasing by 11%. Furthermore, the Company is actively monitoring if the average net salary paid per employee in the Company is hig- her than the average net salary in the industry of accommodation and food preparation service at the national level and if it deviates slightly from the average net salary paid per employee in the Republic of Croatia. The increase of net salaries and other material rights arising from employment indicates a continuity in the Company’s HR management policy for the purpose of maintaining an optimum level of employment ensuring successful management of business processes and their smooth running at the operational level, warranting the continued development of products and services as well as the preservation of the established quality of service. 8.5 EMPLOYMENT, LABOUR COSTS AND SALARIES 164ANNUAL REPORT FOR THE YEAR 2024 8.6 OCCUPATIONAL HEALTH AND SAFETY 8.6 OCCUPATIONAL HEALTH AND SAFETY The Safety and Protection Service within the Company is divided into I Health Control, II Occupational Health and Safety, III Fire protection, and IV Environmental Protection The main objectives are providing maximum safety for its guests and employees, ensuring the conditions for providing high-quality services and complying with the principles of sustainability as the foundation for long- term stable development and growth of the Company. Accordingly, in terms of safety and security, the Compa- ny bases the system on: a) monitoring all applicable legal regulations and ordi- nances and alignment with them, b) development and implementation of own policies, including the Environmental and Quality Policy, c) development of annual plans and activities for each of these areas, d) implementation of domestic and international stand- ards, and e) continuous key stakeholder trainings. I Health Control Health and safety of guests and employees is one of the most important factors in the Company's business processes, where through optimal working conditions, regular education and appropriate equipment, it is pos- sible to implement the standards of health protection and hygiene of accommodation facilities. Activities and tasks of Health Control in the segment of operational processes in 2024: 1 Activities in the field of health and sanitary safety The Company implemented high health standards, as well as standards in the field of hygiene and sanitary conditions in order to provide a safe stay for guests and a safe working environment at the level of all sec- tors, profit centres and their departments. Sanitary and health safety and food safety, the organisation of sani- tary and health safety at facilities is primarily reflected in the control of water quality, temperature and hygien- ic and sanitary supervision of kitchens. The hygiene and sanitation segment covered the fa- cility's equipment and functionality, lighting and ven- tilation, maintenance of accessories and equipment, 165ANNUAL REPORT FOR THE YEAR 2024 cleaning and disinfection, removal of waste materials and care for employees' personal hygiene. The health control also covered the laundry service and compli- ance with all health and sanitary regulations. Sanitary and health safety as an extremely sensitive part of the business process where the responsibility of all employees is expected, as well as the responsible be- haviour of guests during their stay at the facilities. Reg- ular controls and inspections by competent authorities contribute to the prevention and quality of the hotel's sanitary and health safety. In 2024, the Sanitary Inspection of the State Inspec- torate carried out supervisory control in the food pro- duction facility and supervision of the swimming pool’s compliance with the sanitary, technical and hygienic requirements, the safety of the pool water, the keeping of the necessary records and the use of chemicals and biocidal products. All inspections confirmed that the fa- cility operated in compliance with the law. 2) The health safety of foodstuffs and items of general use In 2024, an authorised external company carried out the monitoring of the implementation of the HACCP system in hospitality facilities. Compliance with the HACCP system was confirmed in compliance with the Codex Alimentarius standard as a control/monitoring system of critical control points in foodstuff handling procedures. Regular inspections of hospitality facilities (restaurants, bars and kitchens) were performed and all processes were audited, analysing potential hazards, identifica- tion of control points and critical control points in op- eration, employee hygiene inspection, implementation of DDD measures, water safety inspections and contin- uous education of employees. 3 Hygiene of accommodation and sanitary facilities The control of the cleanliness of accommodation fa- cilities is carried out in accordance with the stipulated standard on a weekly and monthly basis within each in- dividual facility and sanitary facilities. This was entered in the records as part of quality management. House- keepers and maids were trained, laundry presentation workshops and a course on instructions for working with the new device and cleaning products were held. 4) The health safety of the pool water Together with the Zadar Institute of Public Health, the health safety of the pool water of all pools was analysed according to plan. Pool water indicators were internally controlled every day and a record was kept of swim- ming pool maintenance and hygiene inspections, san- itation and disinfection procedures were implemented and internal and external trainings of employees work- ing at the pools were held. 5 Wellness hygiene In order to maintain the hygiene of the wellness area, actions were taken to clean the wellness rooms, regu- larly check the health safety of the water in the jacuzzis, disinfect them, check the hygiene of the filters, check the items for general use, check and declare the prod- ucts that were used, conduct employee training and check the measurement of the ionizing radiation in the tanning room by an authorised company. 6 Implementation and control of the application of national and international standards in the field of 8.6 OCCUPATIONAL HEALTH AND SAFETY 166ANNUAL REPORT FOR THE YEAR 2024 health control (HACCP and ISO 9001:2015 quality management system and the “Company – Friend of Health” certificate) and employee training In the health and safety management system, we mon- itor and comply with all applicable legal requirements and policies. For all employees of the Food and Bever- ages Department as well as other departments subject to mandatory sanitary inspections, the inspections are performed by the Public Health Institute that is accred- ited to perform them. Internal training is provided by the Heads of Health Control and Occupational Safety and Fire Protection, in cooperation with external authorized companies and the Institute of Public Health. At the Institute of Public Health, 24 employees attended the Hygiene Minimum course. Internal trainings on the HACCP system were held in the same manner for the employees of the Food and Beverages Department. The company holds the “Company – Friend of Health” certificate, a project launched by the Croatian Institute of Public Health with the aim of promoting health in the workplace and working environment, adopting healthy lifestyle habits and showing concern for the health of employees, promoting physical activity, the protection of the health of employees in the workplace, a smoking ban, a prohibition of alcohol consumption, landscaping and the protection of consumer and client health. II Environmental protection The Company bases its business policy on management in line with the principles of sustainable and responsible development, with focus on the environment, as the en- vironment is the fundamental resource of the tourism industry. In 2024, the Company worked on the contin- uous improvement of the environmental management system, sanitary, economic and working conditions with the aim of protecting and preserving the environ- ment, as well as preventing its pollution, i.e. minimising it, rational management of all natural resources and reducing the negative effects of the Company's opera- tions on the natural assets and cultural heritage. Environmental protection activities and tasks in the segment of operational processes in 2024: 1 Waste management Waste management in the Company’s facilities included the following activities: prevention of possible pollution due to the generation and improper handling of hazard- ous and non-hazardous waste, keeping related records, i.e. recording and monitoring the generation and flow of waste as well as an annual report of the quantities of waste generated at the locations for the competent au- thorities, the control of proper sorting of waste on the spot and employee trainings, labelling, control of the condition of appropriate containers for hazardous and non-hazardous waste, procurement of new improved press containers, working with authorised waste dis- posal companies, monitoring and adapting business processes to legal regulations in the field of sustaina- ble waste management and continuous revision of legal obligations related to this field and the Company as a waste generator through its business processes. 2 Wastewaters The destination for all waste water produced at the Company's facilities is the public drainage system, and it is previously treated in separators and the collector. The water produced at the boat washing station in Ma- rina Kornati passes through a physical-chemical purifier before it is discharged, and the prescribed indicators of the discharged water are checked periodically in ac- cordance with the water law permit through an author- 8.6 OCCUPATIONAL HEALTH AND SAFETY 167ANNUAL REPORT FOR THE YEAR 2024 ised laboratory. At the beginning of 2021, a new water rights permit was obtained for Marina Kornati for the period of five years. Moreover, the issue of collection, treatment and discharge of waste waters in the "Park Soline" campsite is addressed by connecting all of the buildings within the camp via a gravity or pressure sew- er to the city sewer. In 2021, the Company obtained a new water rights permit for using water from a well in the “Park Soline” campsite for irrigation. Through this, the Company placed great focus on reducing the use of drinking water for the irrigation of horticultural areas of the camp by fully using its own water source. 3 Air Emissions of polluting gases (carbon dioxide, carbon monoxide, nitrogen and sulphur oxides) from station- ary sources, i.e. boiler rooms, are measured every two years by an authorised company. The results of the measurements carried out on the combustion plants in 2024 are in accordance with the permitted levels under the Regulation on limit values of pollutant emissions into the air from stationary sourc- es (Official Gazette 42/2021). Also, the quantities of used cooling gases (freons), fuel consumption in boiler rooms, cleaning and certification of air conditioning and ventilation systems are regularly checked. In coopera- tion with the Technical Service, the control of the op- eration of boiler rooms is carried out and technological improvements are considered for the purpose of reduc- ing emissions of polluting gases into the atmosphere, as well as monitoring and adapting to new legislation. 4 Use of hazardous chemicals Hazardous chemicals are used in the Company when maintaining the health safety of the pool water, for pu- rifying technological waste water in Marina Kornati as well as in household departments, kitchens and well- ness. Chemicals i.e. cleaning and disinfection agents are also used. Therefore, at the operational level, activities were carried out with the aim of reducing the amount of chemicals used, training employees on handling haz- ardous chemicals and checking their consumption. III Occupational Health and Safety All activities with regard to Occupational Health and Safety have been performed in compliance with leg- islation governing occupational health and safety and the Ilirija d.d. Plan of Measures for Occupational Health and Safety, with a continuous monitoring of new reg- ulations, their implementation and relevant employee training. The following occupational health and safety activities have been performed in 2024: • Employee education, informing and counselling, re- cord-keeping, documenting and notifying, non-smoker protection and prohibition of alcohol consumption and consumption of other addictive substances, all in ac- cordance with relevant legislation. • Keeping records of employees who suffered an injury or illness in the workplace. During the entire reporting period, a total of four minor work-related injuries oc- curred. • Monitoring, implementation and control of meas- ures and recommendations from the competent Civ- il Protection Authority in view of occupational health and safety. The Ilirija d.d. Occupational Safety and Fire Protection Manager is also a member of the Biograd na Moru Civil Protection Authority. • Testing of instruments of work and working environ- ment by a licensed company, testing of all machines and devices used for work with an increased risk of occupa- 8.6 OCCUPATIONAL HEALTH AND SAFETY 168ANNUAL REPORT FOR THE YEAR 2024 tional hazards, electrical, lightning protection and gas installations and the working environment, referring employees to periodically and daily inspect the service- ability of instruments of work. • In order to ensure health supervision suitable to haz- ards, harm and strain during work, for the preservation of employee health, the Company provided the employ- ees at positions with special working conditions with occupational healthcare services in accordance with relevant legislation at the licensed medical institution competent for occupational medicine. During 2024, 66 periodic examinations were performed for employees at workplaces with special working conditions, in addi- tion to additional annual sanitary examinations of em- ployees at the Institute of Public Health, and 33 eyesight examinations of employees at administrative positions (working with computers). • Employee training activities for safe work practices in accordance with the training programme based on a previously prepared risk assessment, which includes all occupational hazards, harms and efforts determined by the risk assessment and ways to eliminate them. Dur- ing 2024, 53 employees completed safe work training as well as minimum fire protection training, of which 24 were foreign employees who successfully completed the training according to the adapted programme. • Implementation of occupational health and safety measures in order to improve working conditions, pre- vent occupational injuries and illnesses, other work-re- lated illnesses and the protection of the working en- vironment, which include the following technical and organisational measures: testing of machines and devic- es used for work with increased occupational hazards, electrical installations, lightning protection – lightning rods, microclimate and lighting in accordance with reg- ulations governing respective areas, fire extinguisher inspections, fire hydrant network inspections, inspec- tions of fire alarm and extinguishing systems, as well as fire fighting equipment in fire hydrant cabinets; control of instructions for safe work practices and hazard sig- nage, and implementation of internal supervision of compliance with occupational health and safety rules. • Practice evacuation and rescue drills when imple- menting fire protection and employee rescue meas- ures, which must be carried out biannually in accord- ance with relevant legislation. During 2023, the four aforementioned drills were held in four different sec- tors, and new drills are planned for 2025 in cooperation with external authorised companies. • Activities of the Occupational Health and Safety Committee, which, for the purpose of improving oc- cupational health and safety in 2024, planned and su- pervised the implementation of occupational health and safety rules, organised the performance of occu- pational health and safety tasks, informed and trained employees on occupational health and safety, imple- mented the prevention of occupational risks and their effects on employee health and safety. • Every year, the Company performs testing of electri- cal installations in buildings intended for work, and em- ployers are required to test them at least once every four years. The aforementioned tests are performed by an authorised company. • All mandatory tests of work equipment (machines and devices, facilities and means of transfer and transpor- tation of loads) were carried out and compliance with the stipulated Occupational Health and Safety Act with regard to work equipment was established. In 2024, in the field of occupational health and safety, an inspec- tion was carried out with regard to the implementation of occupational health and safety measures, establish- ing the regularity of the implementation. 8.6 OCCUPATIONAL HEALTH AND SAFETY 169ANNUAL REPORT FOR THE YEAR 2024 IV Fire protection In order to protect people's lives and property from fire, the Company takes measures and actions for eliminat- ing causes of fire, prevention of occurrence and spread- ing of fire, fire detection and extinguishing, identifying causes of fire, as well as providing assistance with elim- inating fire damage. The following fire safety activities have been performed in 2024: • The Company actively engaged in the implementation of the Activity Programme for the Implementation of Special Fire Protection Measures in so far as it complies with the guidelines issued by the County Chief Fire Of- ficer and the Biograd Public Fire Brigade. • The Fire Protection Department requested from the Biograd na Moru water distributor to update the infor- mation on the public fire hydrant network (fire hydrant position and serviceability). • Procurement of required fire protection equipment and a sufficient number of fire extinguishers. The Com- pany has installed 391 fire extinguishers in all facilities. • Additional safety and protection were provided by purchasing a fireboat with special equipment and a foam fire extinguisher and a crew that completed a fire-fighting intervention course. Nineteen employees completed a volunteer fire fighter training. In 2024, a practical fire safety drill was held in Marina Kornati, where a fire simulation demonstrated the pos- sible hazards, that is, the measures and procedures that need to be taken in extraordinary circumstances. • Daily supervision of the implementation of fire pro- tection measures by the Department Manager and/or employees at each facility. Periodic supervision of the implementation of fire protection measures by imme- diate managers and the Occupational Safety and Fire Protection Manager. In 2024, in the field of fire protection, 2 inspections were carried out with regard to the implemented meas- ures, establishing the regularity of the implementation. 8.6 OCCUPATIONAL HEALTH AND SAFETY 170ANNUAL REPORT FOR THE YEAR 2024 8.7 OTHER 8.7 OTHER Business monitoring and reporting on a daily, weekly and monthly basis At the level of all sectors and the Company as a whole, a supervision, control and monitoring system for all business segments was established, namely for monitoring on a daily, weekly and monthly basis in accordance with the appli- cable Croatian and world reporting standards for the tourism industry. This enabled timely and quality monitoring of achieved operating and planned results, as well as the development of quality forecasts and business plans thro- ughout the business year, which created the foundations for a more efficient and rational management of the entire business process, as well as improved and accelerated the overall reporting process at all levels, and especially in the operational part of the Company’s business. On a daily basis, the Company records and enters accounting and bookkeeping documentation in a timely manner, within 24 to 48 hours of its receipt at the latest. This ensures up-to-date and accurate daily reporting at the level of the Company and its sectors, which includes: a daily balance sheet at the Company level, trade receivables and trade payables, short-term liabilities, a income statement at the level of the Company and profit centres, reports on daily financial and physical turnover for all profit centres, sectors and at the Company level, reports on daily operating revenue and cumulative operating revenue for the period by profit centres and sectors, i.e. at the Company level and a series of operational daily reports. This method of reporting enables detailed planning and monitoring of the achievement of financial performance indicators and the Budget, both at the level of an individual profit centre and at the same time at the level of sectors and the Company as a whole. In addition to daily reports, the Company pre- pares various weekly and complete monthly financial and accounting statements, including the income statement for all sectors and profit centres of the Company, as well as the Company's balance sheet on the last day of the current month, and the cash flow for the current month, i.e. cumulatively from the beginning of the year to the end of the reporting period, which are elaborated in more detail and analytically structured, which enables efficient business management. Also, in addition to accounting and financial statements on a daily, weekly and monthly basis, reports are prepared on the status of sales of accommodation capacities (hotel sector and camping), the status of sales of berths (nautical 171ANNUAL REPORT FOR THE YEAR 2024 sector) and the status of DMC Ilirija Travel sales (accommodation and special events) with all key physical , market and financial data by profit centres (accommodation facilities) and at the level of the sector itself. In addition to its own reporting system, for many years the Company has also been implementing the USALI reporting system, an international reporting system for the tourism industry, as well as a system for daily management of prices, and con- sequently also of the accommodation units revenue in the hotel and camping sector. Mergers and acquisitions There were no mergers and acquisitions. 8.7 OTHER 172ANNUAL REPORT FOR THE YEAR 2024 The Company has all the permits required for the per- formance of its activities, such as the decisions on cate- gorisation and on the meeting of the minimum techni- cal work requirements, as well as water rights permits, etc. Goran Ražnjević, President of the Management Board 8.8 NOTES 8.8 NOTES 173 9 2024 ANNUAL FINANCIAL STATEMENT, INCLUDING THE INDEPENDENT AUDITOR’S REPORT ILIRIJA d.d., Biograd na Moru 2024 Annual Financial Statements, including the Independent Auditor’s Report 174 9 2024 ANNUAL FINANCIAL STATEMENT, INCLUDING THE INDEPENDENT AUDITOR’S REPORT CONTENTS Statement on the accountability of the Management Board .................................................................................... Independent auditor’s report .................................................................................................................................... Statement of financial position ................................................................................................................................ Statement of comprehensive income ....................................................................................................................... Statement of the cash flow ....................................................................................................................................... Statements of changes in equity .............................................................................................................................. Notes ........................................................................................................................................................................ 185 186 187 188 189 176 175 175 9.1 STATEMENT ON THE ACCOUNTABILITY OF THE MANAGEMENT BOARD STATEMENT ON THE ACCOUNTABILITY OF THE MANAGEMENT BOARD STATEMENT ON THE ACCOUNTABILITY OF THE MANAGEMENT BOARD The Management Board is responsible for the preparation of financial statements that provide a true and fair overview of the Company's financial position, business results and cash flow in accordance with applicable accounting policies, as well as for maintaining adequate accounting records to enable such financial statements to be prepared at all times. The Management Board has overall responsibility to take steps that would reasonably enable it to preserve the Company's assets as well as to detect and prevent fraud or other irregularities. The Management Board is responsible for selecting appropriate accounting policies that comply with the applicable accounting standards, which it then should apply consistently, making reasonable and prudent judgements and estimates and preparing financial statements in accordance with the going concern principle unless the Company’s going concern is questionable. The Management Board is responsible for compiling and publishing the Company's annual financial statements. The Management Board approved the issuance of the financial statements on 26 February 2025, as is confirmed by the signature. ILIRIJA d.d. Tina Ujevića 7 Biograd na Moru Signed on behalf of the Company’s Management Board Goran Ražnjević, member of the Management Board 176 9.2 INDEPENDENT AUDITOR’S REPORT Audit | Tax | Consulting Trgovački sud u Zagrebu, MBS 080006795, OIB 71799539000 Uprava: mr. sc. Dragan Rudan i Vedrana Miletić; Temeljni kapital 132.640,00 eura uplaćen u cijelosti; Transakcijski račun: Istarska kreditna banka Umag d.d., IBAN: HR80 2380 0061 1800 0023 2; BIC: ISKBHR2X UHY RUDAN d.o.o. is an independent member of the international UHY network of independent accounting and consulting firms. The UHY network is a member of the Forum of Firms. INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF THE COMPANY ILIRIJA d.d. Report on the Audit of the Annual Financial Statements Opinion We have audited the annual financial statements of ILIRIJA d.d. (the Company), which comprise the statement of financial position as at 31 December 2024, the statement of comprehensive income, the statement of cash flows and the statement of changes in equity for the year then ended, and notes to the financial statements, including material accounting policy information. In our opinion, the accompanying annual financial statements give a true and fair view of the financial position of the Company as at 31 December, 2024 and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS). Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Annual Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ (IESBA) Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Republic of Croatia and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the annual financial statements of the current period. These matters were addressed in the context of our audit of the annual financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 177 9.2 INDEPENDENT AUDITOR’S REPORT Audit | Tax | Consulting Trgovački sud u Zagrebu, MBS 080006795, OIB 71799539000 Uprava: mr. sc. Dragan Rudan i Vedrana Miletić; Temeljni kapital 132.640,00 eura uplaćen u cijelosti; Transakcijski račun: Istarska kreditna banka Umag d.d., IBAN: HR80 2380 0061 1800 0023 2; BIC: ISKBHR2X UHY RUDAN d.o.o. is an independent member of the international UHY network of independent accounting and consulting firms. The UHY network is a member of the Forum of Firms. Key audit maIer Our procedures during the audit Investment in land not owned by the Company The Company partly performs registered tourist activity on the land that is not included in the Company's share capital in the process of transformation and privatization and on the part of the land that is a maritime domain. The use conditions for the land that was not included in the Company's share capital in the process of transformation and privatization have, so far, been defined by the Act on Tourist and Other Construction Land not appraised in the transformation and privatization process (OG 92/10) on the basis of which the Company submitted an application for a concession for a period of 50 years. On 2 May 2020, the new Act on Unapprised Land (OG 50/2020) entered into force. In accordance with the provisions of the Act on Unapprised Land, the Company submitted a request to the Ministry of Physical Planning and State Assets to issue a decision under Article 17 of the Act for concluding a lease agreement for 50 years for Camp Park Soline in Biograd na Moru. On February 9, 2024, the Regulation on the Arrangement of Lease for Parts of the Camp Owned by the Republic of Croatia (OG 16/2024) was published and came into force on February 17, 2024. This Regulation prescribes the initial unit rental prices for parts of the campsite owned by the Republic of Croatia, as well as other criteria for determining and calculating the rent. Our audit procedures related to investing in land not owned by the Company included, inter alia: Ø Understanding of the Company's accounting policies related to the measurement of the subject assets; Ø Assessment of the reasonableness of the key assumptions for valuing investments on the subject assets; Ø Review of input data for the purpose of testing the completeness and accuracy of recording the increase in investment in the subject assets; Ø Monitoring the status of the Request for a decision referred to in Article 17 of the Act on Unapraised Land (OG 50/2020) and for concluding a 50-year lease agreement for Camp Park Soline in Biograd na Moru, dated 5 March 2021; Ø Review of the Company's report on significant legal issues and assessment and status of legal disputes received from external attorneys; Ø Analysis of the impact of the Regulation on the arrangement of leases on parts of the camp owned by the Republic of Croatia (NN 16/24), adopted on February 9, 2024. year, to the Company's financial statements Ø Assessment the adequacy of related disclosures in annual financial statements and compliance with IFRS. 178 9.2 INDEPENDENT AUDITOR’S REPORT Audit | Tax | Consulting Trgovački sud u Zagrebu, MBS 080006795, OIB 71799539000 Uprava: mr. sc. Dragan Rudan i Vedrana Miletić; Temeljni kapital 132.640,00 eura uplaćen u cijelosti; Transakcijski račun: Istarska kreditna banka Umag d.d., IBAN: HR80 2380 0061 1800 0023 2; BIC: ISKBHR2X UHY RUDAN d.o.o. is an independent member of the international UHY network of independent accounting and consulting firms. The UHY network is a member of the Forum of Firms. Pursuant to the Transformation of Socially Owned Enterprises Act, all structures built on maritime domain have been evaluated and included in the share capital of the Company, while land as a public good has not been evaluated. The most important maritime domain used by the Company is Marina Kornati. The concession lasts until year 2032. In 2017, the Company submitted to the Ministry of the Sea, Transport and Infrastructure of the Republic of Croatia, a request for extension of the Concession Agreement for a total period of 50 (fifty) years. As of the date of issuing the financial reports for 2024, the request for the extension of the concession has not been decided yet. All investments in the mentioned lands are recorded by the Company as its own assets. Due to the above and significant future effects on the financial statements, the investment in land not owned by the Company was identified as a key audit matter. For further information see note 7 (Property, plant and equipment). Other information Management is responsible for other information. Other information comprises the Management Report and Corporate Governance Statement included in the Company’s Annual Report, but does not include annual financial statements and our auditor's report on thereon. Our opinion on annual financial statements does not cover the other information. 179 9.2 INDEPENDENT AUDITOR’S REPORT Audit | Tax | Consulting Trgovački sud u Zagrebu, MBS 080006795, OIB 71799539000 Uprava: mr. sc. Dragan Rudan i Vedrana Miletić; Temeljni kapital 132.640,00 eura uplaćen u cijelosti; Transakcijski račun: Istarska kreditna banka Umag d.d., IBAN: HR80 2380 0061 1800 0023 2; BIC: ISKBHR2X UHY RUDAN d.o.o. is an independent member of the international UHY network of independent accounting and consulting firms. The UHY network is a member of the Forum of Firms. In connection with our audit of the annual financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the annual financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. With respect to the Management Report and Corporate Governance Statement, we also performed procedures required by the Accounting Act. Those procedures include considering whether the Management Report is prepared in accordance with the requirements of Article 24 of the Accounting Act and whether the Corporate Governance Statement includes the information specified in Article 25 of the Accounting Act. Based on the procedures undertaken, to the extent we are able to assess it, we report that: 1. the information given in the enclosed Management Report and Corporate Governance Statement is consistent, in all material respects, with the enclosed annual financial statements; 2. the enclosed Management Report is prepared in accordance with requirements of Article 24 of the Accounting Act; 3. the enclosed Corporate Governance Statement includes the information specified in Article 25 of the Accounting Act. In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit of financial statements, we are also required to report if we have identified material misstatements in the Management Report and Corporate Governance Statement. We have nothing to report in this respect. Responsibilities of Management and Those Charged with Governance for the Annual Financial Statements Management is responsible for the preparation of annual financial statements that give a true and fair view in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of annual financial statements that are free from material misstatement, whether due to fraud or error. In preparing the annual financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company's financial reporting process. 180 9.2 INDEPENDENT AUDITOR’S REPORT Audit | Tax | Consulting Trgovački sud u Zagrebu, MBS 080006795, OIB 71799539000 Uprava: mr. sc. Dragan Rudan i Vedrana Miletić; Temeljni kapital 132.640,00 eura uplaćen u cijelosti; Transakcijski račun: Istarska kreditna banka Umag d.d., IBAN: HR80 2380 0061 1800 0023 2; BIC: ISKBHR2X UHY RUDAN d.o.o. is an independent member of the international UHY network of independent accounting and consulting firms. The UHY network is a member of the Forum of Firms. Auditor's Responsibilities for the Audit of the Annual Financial Statements Our objectives are to obtain reasonable assurance about whether the annual financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the annual financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the annual financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the annual financial statements, including the disclosures, and whether the annual financial statements represent the underlying transactions and events in a manner that achieves fair presentation. 181 9.2 INDEPENDENT AUDITOR’S REPORT Audit | Tax | Consulting Trgovački sud u Zagrebu, MBS 080006795, OIB 71799539000 Uprava: mr. sc. Dragan Rudan i Vedrana Miletić; Temeljni kapital 132.640,00 eura uplaćen u cijelosti; Transakcijski račun: Istarska kreditna banka Umag d.d., IBAN: HR80 2380 0061 1800 0023 2; BIC: ISKBHR2X UHY RUDAN d.o.o. is an independent member of the international UHY network of independent accounting and consulting firms. The UHY network is a member of the Forum of Firms. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the annual financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on Other Legal and Regulatory Requirements 1. We were appointed by the General Assembly at 26 April, 2024 based on the proposition of the Supervisory Board to perform the audit of the annual financial statements for the year 2024. 2. At the date of this report, we have been continuously appointed for performing statutory audits of the Company, from the audit of the annual financial statements for the year 2024, to the audit of the annual financial statements for the year 2024, that is for four years in total. 3. In our audit of the annual financial statements of the Company for the year 2024 we determined the materiality for the financial statements as a whole in the amount of EUR 311.448, that represents approximately 4% of EBITDA. The primary users of the financial statements are the Company's shareholders. Given that the shareholders' main focus is on further investment activities aimed at generating profit and dividend payments in the long term, we consider the chosen basis for determining materiality to be appropriate. 4. Our audit opinion is consistent with the Additional Report to the Audit Committee of the Company prepared in accordance with Article 11 of the Regulation (EU) No 537/2014. The main users of financial statements are the shareholders of the company. Given that the main focus of the shareholders is on further investments, which have as their long-term goal the generation of profits and the payment of dividends, we consider the chosen basis for calculating significance to be appropriate. 182 9.2 INDEPENDENT AUDITOR’S REPORT Audit | Tax | Consulting Trgovački sud u Zagrebu, MBS 080006795, OIB 71799539000 Uprava: mr. sc. Dragan Rudan i Vedrana Miletić; Temeljni kapital 132.640,00 eura uplaćen u cijelosti; Transakcijski račun: Istarska kreditna banka Umag d.d., IBAN: HR80 2380 0061 1800 0023 2; BIC: ISKBHR2X UHY RUDAN d.o.o. is an independent member of the international UHY network of independent accounting and consulting firms. The UHY network is a member of the Forum of Firms. 5. In the period from the beginning date of the audited annual financial statements of the Company for the year 2024 to the date of this report, we have not provided the prohibited non-audit services to the Company nor to the companies under its control and/or its parent company within EU and we have not provided the services of design and implementation of internal control procedures or risk management related to the preparation and/or control of financial information or the design and implementation of technological systems for financial information in the business year, before the before mentioned period, and we have maintained independence in relation to the Company during our audit. Report based on Delegated Regulation (EU) 2018/815 on supplementing Directive 2004/109/EZ of European parliament and Council related to regulatory technical standard for specification of single electronic reporting format of reporting Independent report on the compliance of annual financial statements (further: financial statements) prepared pursuant to Article 462 (5) of the Capital Market Act (Official Gazette 65/18, 17/20, 83/21 and 151/22) applying the requirements of the Delegated Regulation (EU) 2018/815 on establishing of single electronic reporting format for issuers (the ESEF Regulation). We have conducted a reasonable assurance engagement on whether the financial statements, as contained in the attached electronic file 74780000V0GH8Q3K5K76-2024-12-31-0-en.zip are prepared, for the purposes of public disclosure pursuant to Article 462, paragraph 5 of the Capital Market Act, in all material respects in accordance with the requirements of the ESEF Regulation. Responsibilities of the Management and those charged with governance Management is responsible for the preparation of the financial statements in accordance with ESEF Regulation. Furthermore, Management is responsible for maintaining an internal control system that reasonably ensures the preparation of financial statements without material non-compliances with ESEF Regulation requirements, whether due to fraud or error. The Management is also responsible for: • the public disclosure of financial statements included in the annual report in XHTML format and • selecting and using XBLR codes in accordance with ESEF regulation. 183 9.2 INDEPENDENT AUDITOR’S REPORT Audit | Tax | Consulting Trgovački sud u Zagrebu, MBS 080006795, OIB 71799539000 Uprava: mr. sc. Dragan Rudan i Vedrana Miletić; Temeljni kapital 132.640,00 eura uplaćen u cijelosti; Transakcijski račun: Istarska kreditna banka Umag d.d., IBAN: HR80 2380 0061 1800 0023 2; BIC: ISKBHR2X UHY RUDAN d.o.o. is an independent member of the international UHY network of independent accounting and consulting firms. The UHY network is a member of the Forum of Firms. Those charged with governance are responsible for overseeing the preparation of the financial statements in ESEF format as part of the financial reporting process. Auditor's responsibilities Our responsibility is to express a conclusion, based on the audit evidence gathered, as to whether the financial statements are free from material non-compliances with the requirements of the ESEF Regulation. We conducted our reasonable assurance engagement in accordance with International Standard for Assurance Engagements ISAE 3000 (revised) - Assurance engagements other than audits or reviews of historical financial information. Work performed The nature, timing and extent of the procedures selected depend on the auditor's judgment. Reasonable assurance is a high degree of assurance, however it does not guarantee that the scope of procedures will identify all significant (material) noncompliance with ESEF regulation. In respect of the subject matter, we have performed the following procedures: • we read the requirements of the ESEF Regulation, • we have gained an understanding of the Company's internal controls relevant to the application of the requirements of the ESEF Regulation, • we have identified and assessed the risks of material non-compliance with the ESEF Regulation due to fraud or error; and • based on this, devise and implement procedures to respond to the assessed risks and to obtain reasonable assurance for the purpose of expressing our conclusion. The aim of our procedures was to assess whether: • the financial statements, which are included in the annual report, are prepared in the relevant XHTML format, • the information contained in the financial statements required by the ESEF Regulation is marked and all markings meet the following requirements: o the XBRL markup language was used, o the basic taxonomy elements listed in the ESEF Regulation with the closest accounting significance have been used, unless an additional taxonomy element has been created in accordance with Annex IV. ESEF Regulation, o the labelled elements comply with the common labelling rules under the ESEF Regulation. We believe that the audit evidence obtained is sufficient and appropriate to provide a basis for our conclusion. 184 ANNUAL REPORT FOR THE YEAR 2024 Audit | Tax | Consulting Trgovački sud u Zagrebu, MBS 080006795, OIB 71799539000 Uprava: mr. sc. Dragan Rudan i Vedrana Miletić; Temeljni kapital 132.640,00 eura uplaćen u cijelosti; Transakcijski račun: Istarska kreditna banka Umag d.d., IBAN: HR80 2380 0061 1800 0023 2; BIC: ISKBHR2X UHY RUDAN d.o.o. is an independent member of the international UHY network of independent accounting and consulting firms. The UHY network is a member of the Forum of Firms. Conclusion Based on the procedures performed and evidence gathered, the financial statements presented in ESEF format for the year ended on 31 December 2024, contained in the aforementioned attached electronic file and prepared pursuant to Article 462 paragraph 5 of the Capital Market Act prepared for public disclosure, are prepared in all material respects in line with the requirements of Articles 3, 4 and 6 of the ESEF Regulation. Further to this conclusion as well as opinion contained in this independent auditor’s report related to accompanying financial statements and annual report for the year ended 31 December 2024, we do not express any opinion on the information contained in these presentations or on any other information contained in the aforementioned file. The engagement partner in charge of the audit resulhng in this independent auditor’s report is Dragan Rudan. In Zagreb, 26/02/2025 UHY RUDAN d.o.o. for tax consulting and audit Ilica 213 10 000 Zagreb Republic of Croatia Dragan Rudan Director and Certified Auditor 185 9.3 STATEMENT OF FINANCIAL POSITION Statement of the financial position of the Company ILIRIJA d.d. As at 31/12/2024 (All amounts are provided in Euro) The following notes are an integral part of these financial statements Note 31/12/2024 31/12/2023 ASSETS Non-current assets Intangible assets 6 59,416 31,919 Property, plant and equipment 7 46,921,891 48,463,778 Investment property 8 9,816,091 9,987,661 Investments in subsidiaries 9 4,917 4,917 Total non-current assets 56,802,315 58,488,275 Current assets Inventories 10 276,162 203,498 Receivables and prepayments 11 1,449,508 843,000 Current financial assets 12 13,000,000 12,000,000 Cash 13 28,251 25,417 Total current assets 14,753,921 13,071,915 TOTAL ASSETS 71,556,236 71,560,190 PRINCIPAL AND LIABILITIES Equity and reserves Share capital 14 30,420,000 30,420,000 Own shares 14 (448,288) (137,207) Capital reserves 389,195 389,195 Reserves 15 5,112,930 5,112,930 Retained profit 19,219,511 17,329,349 Total shareholders’ equity 54,693,348 53,114,267 Non-current liabilities Borrowings 16 10,156,776 12,011,845 Reservations 17 154,107 154,107 Total non-current liabilities 10,310,883 12,165,952 Short-term liabilities Borrowings 16 3,421,118 3,183,524 Trade and other payables 18 3,130,887 3,096,447 Total current liabilities 6,552,005 6,279,971 Total liabilities 16,862,888 18,445,923 TOTAL PRINCIPAL AND LIABILITIES 71,556,236 71,560,190 186 9.4 STATEMENT OF COMPREHENSIVE INCOME Report on the Comprehensive Income of the Company ILIRIJA d.d. All amounts are provided in Euro (Svi iznosi su izraženi u eurima) The following notes are an integral part of these financial statements Note 31/12/2024 31/12/2023 Revenues from sales 19 30,022,422 27,848,263 Other operating revenues 20 329,110 199,546 Operating revenue 30,351,532 28,047,809 Costs of raw materials, materials and energy 21 (4,146,301) (4,046,349) Costs of services 22 (4,691,843) (4,021,471) Staff costs 23 (10,783,819) (9,477,829) Depreciation of intangible assets 6 (51,886) (13,177) Depreciation of property, plant and equipment 7 (2,919,626) (2,976,524) Depreciation of investment property 8 (252,896) (249,584) Other operating costs 24 (2,943,357) (2,945,275) Operating expenses (25,789,728) (23,730,209) Operating profit 4,561,804 4,317,600 Net financial expenses 25 (127,760) (247,182) Profit before tax 4,434,044 4,070,418 Corporate income tax 26 (857,970) (790,887) Net profit for the current year 3,576,074 3,279,530 Other comprehensive income 0 0 Total comprehensive income for the period 3,576,074 3,279,530 Earnings per share – basic (in EUR) 27 1.49 1.37 187 9.5 CASH FLOW STATEMENT Report on the Cash Flow of the Company ILIRIJA d.d. As at 31/12/2024 (All amounts are provided in Euro) The following notes are an integral part of these financial statements 31/12/2024 31/12/2023 Business activities Cash inflow (outflow) generated from operations (note 28) 6,763,138 6,505,195 Investment activities Acquisition of intangible non-current assets 0 0 Procurement of property, plant and equipment (1,593,128) (3,475,895) Procurement of investment property 0 0 (Increase)/decrease in current financial investments (665,539) (1,200,496) Net cash outflow used for investment activities (2,258,667) (4,676,391) Financial activities Purchase of own shares (311,081) (199,279) Dividend distribution (1,684,806) (1,319,601) Cash receipts from loans 1,400,000 2,883,589 Cash outflows for loans (3,905,750) (3,269,075) Net cash outflow from financial activities (4,501,637) (1,904,366) Net increase/decrease in cash 2,834 (75,562) Changes in cash At beginning of the year 25,417 100,979 At the end of the year (note 13) 28,251 25,417 Increase/decrease in cash 2,834 (75,562) 1889.6 STATEMENT OF CHANGES IN EQUITY Statements of Changes in Equity of the Company ILIRIJA d.d. As at 31/12/2024 (All amounts are provided in Euro) The following notes are an integral part of these financial statements Share capital Own shares Capital reserves Reserves Retained profit Total equity Balance as at 01 January 2023 30,412,964 (229,335) 389,195 5,119,966 15,373,526 51,066,316 Distribution of own shares 0 291,407 0 0 0 291,407 Purchase of own shares 0 (199,279) 0 0 0 (199,279) Transfer to reserves 0 0 0 0 0 0 Dividend distribution 0 0 0 0 (1,323,708) (1,323,708) Net comprehensive income for the period 0 0 0 0 3,279,530 3,279,530 Share capital adjustment, euro 7,036 0 0 (7,036) 0 0 Balance as at 31 December 2023 30,420,000 (137,207) 389,195 5,112,930 17,329,349 53,114,267 As at 1 January 2024 30,420,000 (137,207) 389,195 5,112,930 17,329,349 53,114,267 Distribution of own shares 0 0 0 0 0 0 Purchase of own shares 0 (311,081) 0 0 0 (311,081) Transfer to reserves 0 0 0 0 0 0 Dividend distribution 0 0 0 0 (1,685,912) (1,685,912) Net comprehensive income for the period, euro 0 0 0 0 3,576,074 3,576,074 Share capital adjustment, euro 0 0 0 0 0 0 As at 31 December 2024 30,420,000 (448,288) 389,195 5,112,930 19,219,511 54,693,348 189 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 1 – GENERAL INFORMATION "Ilirija" d.d., Biograd na Moru (Company), OIB: 05951496767 performs its business activities in the Republic of Croatia. The objects of the Company are hospitality and tourism, trade and maritime affairs. The Company is registered with the Commercial Court in Zadar with a share capital of EUR 30,420,000.00. The Company’s headquarters are located in Biograd na Moru, Tina Ujevića 7, Croatia. The Company is a member of Arsenal Holdings d.o.o. Group, Zadar. As at 31 December 2024, the Company’s shares are listed on the Official Market of the Zagreb Stock Exchange. The ownership structure of the Company is presented in Note 14. The President of the Management Board is Mr Goran Ražnjević. The members of the Supervisory Board are: Mr Goran Medić (Chairman), Mr David Anthony Tudorović (Deputy Chairman), Mr Davor Tudorović, Mr Darko Prebežac and Mr Siniša Petrović (members). The members of the Audit Committee are: Mr David Anthony Tudorović (Chairman), Mr Goran Medić and Mr Darko Prebežac. NOTE 2 – BASIS FOR THE PRODUCTION OF FINANCIAL STATEMENTS The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated. (a) Declaration of compliance The financial statements are prepared in accordance with the International Financial Reporting Standards as adopted by the European Union, under the historical cost convention. In addition to the annual financial statements, the Company also prepares the Annual Management Report. The said financial statements were approved by the Management Board on 26 February 2025. (b) Basis for creation The financial statements have been created on a going concern basis, implying the continuity of normal business activities, the realisation of assets, and the settlement of liabilities in the normal course of operations. (c) Presentation basis These financial statements have been prepared under the historical cost convention, except for certain financial instruments that are carried at fair value. Functional currency and presentation currency The financial statements are presented in the Croatian currency, namely in euro (EUR), the Company’s functional currency since 1 January 2023, when the euro was introduced as the official national currency 190 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru in accordance with the Act on the Introduction of the Euro as the Official Currency in the Republic of Croatia . NOTE 2 – BASIS FOR THE PRODUCTION OF FINANCIAL STATEMENTS (CONTINUED) (d) Non-consolidated financial statements The financial statements of the Company are prepared on a non-consolidated basis. The Company is the sole (100%) owner of two companies (see Note 9) which are not consolidated in the financial statements of the Company because they have not started with their activities. (e) Segment reporting A business segment is reported in accordance with internal reporting to the executive decision-maker. The executive decision-maker, who is responsible for allocating resources and assessing performance of the business segments, is the Company’s Management Board. NOTE 3 – NEW STANDARDS AND INTERPRETATIONS At the date of issuance of these financial statements, the following standards, amendments and interpretations issued by the International Accounting Standards Board are not yet effective. The first application of new and amendments to existing standards effective for the current reporting period In the current reporting period, the following amendments to existing standards as well as new interpretations published by the International Accounting Standards Board (IASB) and adopted by the European Union shall apply: In the current reporting period, the following amendments to existing standards as well as new interpretations published by the International Accounting Standards Board (IASB) and adopted by the European Union shall apply: • amendments to IFRS 16 “Leases”: Leasehold receivables in sale and lease back, adopted in the European Union on 20 November 2023 (effective for annual periods beginning on or after 1 January 2024), • amendments to IAS 1 “Presentation of Financial Statements”: Classification of Liabilities as Current and Non-Current , Classification of Deferred Liabilities as Current and Non- Current, and Non-Current Liabilities with Covenants, adopted in the European Union on 19 December 2023 (effective for annual periods beginning on or after 1 January 2024), • amendments to IAS 7 “Statement of Cash Flows” and to IAS 7 “Financial Instruments: Disclosures”: Supplier Finance Arrangements, adopted in the European Union on 15 May 2024 (effective for annual periods beginning on or after 1 January 2024). The Company has consistently applied its accounting policies to all periods presented in its financial statements. The adoption of the said amendments to existing standards has not resulted in material changes to the financial statements. 191 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru Amendments to existing standards published by the IASB and adopted in the European Union, but not yet effective The following amendments to existing standards published by the IASB and adopted by the European Union had been adopted but not effective on the date when the financial statements were authorised for issue: • amendments to IAS 21 “Effects of Changes in Foreign Exchange Rates”: Lack of Exchangeability, adopted in the European Union on 12 November 2024 (effective for annual periods beginning on or after 1 January 2025). The Company has decided not to apply these amendments to existing standards before they become effective. The Company anticipates that the application of amendments to existing standards will not have a significant impact on the Company’s financial statements in the initial application period. New standards and amendments to existing standards published by the IASB, not yet adopted in the European Union IFRSs currently adopted in the European Union do not differ significantly from the regulations issued by the IASB, except for the following standards and amendments to existing standards, whose adoption has not yet been decided upon by the European Union on the day of issuance of these financial statements (the effective dates listed below refer to IFRSs issued by the IASB): • amendments to IFRS 9 “Financial Instruments” and to IFRS 7 “Financial Instruments: Disclosures”: amendments to the Classification and Measurement of Financial Instruments (effective for annual periods beginning on or after 1 January 2026). • amendments to IFRS 9 “Financial Instruments” and to IFRS 7 “Financial Instruments: Disclosures”: Contracts Referencing Nature-dependent Electricity (in force for annual periods beginning on or after 1 January 2026), • IFRS Annual Improvements – Volume 11 (effective for annual periods beginning on or after 1 January 2026). • IFRS 18 “Presentation and Disclosure in Financial Statements”: the standard repeals IFRS 1: Presentation of Financial Statements and introduces significant changes to the manner of presenting financial performance, with a special emphasis on the profit and loss account. IFRS 18 aims to improve the comparability and transparency of financial statements between companies (effective for annual periods beginning on or after 1 January 2027). The Company is currently evaluating the impact of new standards and amendments to existing standards on its financial statements. The Company expects that the adoption of the aforementioned new accounting standards and amendments to existing standards will not significantly affect their financial statements in their first application period. 192 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 4 – SIGNIFICANT ACCOUNTING POLICIES (a) Foreign currencies Transactions in foreign currencies are converted into the functional currency on the basis of the exchange rate of the date of the transaction. The results and financial position of the Company are presented in the financial statements, namely in euro (EUR), the Company’s functional currency and the presentation currency for the financial statements. (b) Use of estimates and judgements The preparation of financial statements requires the Management Board to make judgements, estimates and assumptions which affect the application of accounting policies and the reported amounts pertaining to assets, liabilities, revenue and costs. Actual results may differ from these estimates. The estimates are continually evaluated and based on experience and other factors, including the expected future events considered to be acceptable under current circumstances. The Company creates estimates and assumptions about the future. The effect of estimate adjustments is recognized in the period in which the estimate is adjusted, as well as in future periods if the adjustment affects those along with the current period. In creating judgements, the Management Board applied the individual criteria for recognizing sales revenue, particularly whether the Company has transferred significant risks and rewards of ownership to the customer. The Management Board is convinced that significant risks and rewards of ownership have been transferred, and that it is appropriate to recognize revenue in the current year. (c) Revenue recognition Revenue consists of the fair value of the consideration received or receivable for the services sold during the Company’s regular operations. Revenue is reported as an amount net of value added tax and discounts. The Company recognizes revenue when the amount of revenue can be measured reliably, when the Company will have future economic benefits, and when specific criteria for all of the Company’s activities are met. (a) Service revenue Revenue earned from the sale of services is recorded at the date of invoicing, which is after the point of delivery. (b) Rental revenue Revenue from rental services is recognized in the period when the services are provided, namely using the straight-line basis during the period of the contract with the lessors. (d) Costs of sale Cost of sale (goods sold) includes all purchase cost and cost of rendering services incurred in relation to the invoiced service or goods. 193 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 4 – SIGNIFICANT ACCOUNTING POLICIES (continued) (e) Selling, general and administrative expenses Selling, general and administrative expenses comprise all expenses of joint and general departments. (f) Repairs and maintenance The maintenance costs are charged to expenses in the period in which they are incurred. Increasing the capacity or quality of a service or product, that is, increasing or enhancing the scope and content of a product or service through repairs and maintenance leads to an increased service standard or longer useful life of a property, plant or equipment, whereby the repairs and maintenance are recorded as an increase in the value of the property, plant or equipment. The remaining repair costs which do not fall under the above-mentioned or are not incurred for the mentioned purpose but are in nature intended for maintaining the property, plant or equipment, are charged to expenses in the period in which they are incurred. Classifying the repair costs by character and purpose is carried out by the Company’s competent services managing the said business processes, including the Company’s accounting and finance department. Investments related to the reconstruction and adaptation aimed at changing the capacity or purpose of a property, plant and equipment are recorded as an increase in the value of the property, plant and equipment. (g) Corporate income tax The Company is subject to taxation according to the laws and regulations of the Republic of Croatia. Corporate income tax is assessed on the tax basis, which is determined as the difference between income and expenses, increased and decreased by items provided by tax regulations. (h) Property, plant and equipment Property, plant and equipment have been recorded at the estimated purchase cost, i.e. purchase cost less accumulated depreciation. Purchase cost includes all costs directly attributable to brining the asset to its working condition for its intended use. Items and equipment are registered as non-current assets if their estimated life is greater than one year. Tangible assets that are retired or otherwise disposed of are eliminated from the balance sheet together with the corresponding value adjustments (if any). Gains and losses on such disposals or retirements are included in the income statement for the year. Value adjustment is charged to the income statement on a straight-line basis so as to depreciate the cost or value of buildings and equipment over their estimated useful lives, as follows: 2024 2023 Buildings 40 years 40 years Equipment for tourism and hotel industry 10-40 years 10-40 years Other equipment 7-20 years 7-20 years 194 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 4 – SIGNIFICANT ACCOUNTING POLICIES (continued) The estimated useful life, residual value and the depreciation method are reviewed at the end of each financial year, and the effects of any changes in estimates are calculated prospectively. The useful life shall be reviewed periodically to determine whether there are any circumstances that would change the estimate relative to the previous one. Any changes in the estimate shall be recognised in future periods by changing the depreciation costs over the remaining useful life that has changed. The land is included in the estimated amounts and is not depreciated since it is considered to have an indefinite useful life. Depreciation of assets in course of construction commences when they are put in use. (i) Investment property Investment property comprises buildings with the accompanying land that are held for long-term rental yields or capital appreciation or both. They are considered non-current assets and are measured at the cost of acquiring less depreciation. The cost includes purchase cost and all costs directly attributable to purchase. Depreciation is charged to the income statement on a straight-line basis so as to depreciate the cost or valuation of investment property over its estimated useful life of 40 years. Land is not depreciated since it is considered to have an indefinite useful life. (j) Investments A subsidiary is an entity under the control of another entity, known as the parent company. The parent company does not need to present consolidated financial statements if, and only if the parent company itself is a subsidiary wholly or partly owned by another entity and its other owners, including those with no voting rights, have been informed that the parent company shall not present consolidated financial statements and they do not object. The subsidiaries are listed in Note 9. (h) Inventories The inventories are stated at the lower of cost and net realisable value. The cost of inventories includes all purchase costs incurred in bringing the inventories to their present location and the current state. When inventories are sold, the carrying value of these inventories is recognized as an expense in the period in which the related revenue is recognized. The amount of any write-off of inventories to net realizable value and all losses of inventories are recognized as an expense in the period of the write-off, i.e. the occurrence of deficit. The amount of any reversal of any write-off of inventories as a result of an increase in net realizable value is recognized as a decrease in the number of inventories recognized as an expense in the period in which they occur. The cost is calculated on the average cost price basis. Small inventories are 100% expensed when put in use. 195 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 4 – SIGNIFICANT ACCOUNTING POLICIES (continued) (l) Receivables and prepayments Receivables represent the right to collect determined amounts from customers or other debtors with regard to the Company’s business. Receivables are reported in the total amount less the value adjustment or in amounts that are expected to be collected. An adjustment of the value of trade receivables is performed when there is objective evidence that the Company will not be able to collect all of its claims in accordance with the agreed terms. At each reporting date, the Company estimates whether the credit risk for financial instruments has increased significantly since initial recognition. In estimates, the Company uses changes in default risk that occur during the expected life of the financial instrument instead of changing the amount of expected credit losses. In order to create an estimate, it compares the default risk for a financial instrument at the reporting date with the one at the date of initial recognition, taking into account reasonable and acceptable figures. Trade receivables include all receivables from sale of goods and provision of services, as well as prepayments, dues from state institutions and other short-term receivables. (lj) Cash For the purposes of cash flow statements, cash consists of cash in hand and balances with banks. (m) Own shares Own shares of the Company held at the balance sheet date are treated as a deduction from the Company’s equity. The gains and losses on sales of own shares are charged to the capital reserves. (n) Financial instruments Financial instruments reported in the balance sheet include money and bank account balances, receivables, account payables and borrowings. The specific applied recognition methods are disclosed in individual explanations of accounting policies for each item. (nj) Borrowings Borrowings are initially recognized at nominal value decreased by transaction costs, which equals the fair value. In future periods, borrowings are carried at amortized cost; any difference between the proceeds (minus transaction costs) and the surrender value is recognized in the statement of comprehensive income over the period of the borrowing, using the effective interest method. Borrowings shall be classified as current liabilities unless the Company has an unconditional right to postpone the settlement of the liability by at least 12 months after the reporting date. 196 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 4 – SIGNIFICANT ACCOUNTING POLICIES (continued) (o) Trade payables Trade payables are amounts related to purchased goods and services in the normal course of operations. A liability shall be presented as a current liability if payment is expected within one year, or as a long- term liability if it is not. Trade payables are initially recognized at fair value, and in future periods they are carried at amortized cost, namely using the effective interest method. NOTE 5 – KEY ACCOUNTING ESTIMATES AND JUDGMENTS The Company creates estimates and assumptions about the future. By definition, the resulting accounting estimates are rarely equal to the actual result. Estimates and assumptions that have a significant risk of causing a material adjustments of the net book value of assets and liabilities within the next financial year are described below. Corporate income tax The company is subject to corporate tax in the Republic of Croatia. Tax returns are subject to approval by the Tax Administration, which has the right to carry out subsequent inspections of the taxpayers’ accounts over the following three years, as well as to request changes on that basis. Property, plant and equipment life Determining the useful life of assets is based on the historical experience with similar assets, as well as on projected changes in the economic environment, and factors related to the industry in which the Company operates. The adequacy of the estimated useful life is reviewed either annually or whenever there is an indication of significant changes in assumptions. We believe this to be an important accounting estimate given the significant proportion of assets amortized in total assets. Thus, the impact of significant changes in these assumptions could have a material impact on the Company’s financial position and operating results. Impairment of financial assets At each reporting date, the Company estimates whether the credit risk for financial instruments has increased significantly since initial recognition. In estimates, the Company uses changes in default risk that occur during the expected life of the financial instrument instead of changing the amount of expected credit losses. In order to create an estimate, it compares the default risk for a financial instrument at the reporting date with the one at the date of initial recognition, taking into account reasonable and acceptable figures. 197 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 6 – INTANGIBLE ASSETS Investments in borrowed assets Total (In EUR, without cents) – buildings Year ended 31 December 2023 Opening net book amount 43,953 43,953 Additions 1,143 1,143 Depreciation charge (13,177) (13,177) Closing net book amount 31,919 31,919 Balance as at 31 December 2023 Cost 338,507 338,507 Accumulated value adjustments (306,588) (306,588) Net book value 31,919 31,919 Year ended 31 December 2024 Opening net book amount 31,919 31,919 Additions 79,383 79,383 Depreciation charge (51,886) (51,886) Closing net book amount 59,416 59,416 Balance as at 31 December 2024 Cost 417,890 417,890 Accumulated value adjustments (358,474) (358,474) Net book value 59,416 59,416 The investments were made in the catering facility "Arsenal", in which the Company carries out its activities under the Business Cooperation Agreement concluded with the Parent Company, Arsenal Holdings d.o.o., Zadar. 198 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 7 – PROPERTY, PLANT AND EQUIPMENT In the process of the Company conversion, the estimated value of the Company’s capital includes the estimated value of the property for which the property rights have not been resolved. The shares of equal value are mainly reserved by the Croatian Privatization Fund (Agency for State Property Management / CERP). For a part of the shares provision was cancelled, so the number of reserved shares remaining is 24,984 (see Note 14). The buildings of Marina Kornati, Kornati hotel port and swimming pool are located at the maritime domain, and have been evaluated and entered in the Company's share capital in the conversion process. Their usage is regulated by the approved concessions. Under the Concession Agreement of the Kornati maritime domain-port of nautical tourism, the use is, for the moment, regulated for a period of 32 years, or until 2031. In accordance with the Act on Maritime Domain and Seaports, on 17 October 2017, the Company submitted to the Government of the Republic of Croatia, through the competent Investments in buildings (In EUR, without cents) Land facilities Equipment under construction Total Year ended 31 December 2023 At beginning of the year 5,894,095 33,247,270 8,731,544 343,644 48,216,553 Additions 0 54,548 1,355,367 1,480,362 2,890,277 Transfer from assets under construction 0 1,333,476 587,093 (1,575,676) 344,893 Reductions – sale, disposal 0 0 (11,421) 0 (11,421) Depreciation charge 0 (1,295,561) (1,680,963) 0 (2,976,524) Closing net book amount 5,894,095 33,339,733 8,981,620 248,330 48,463,778 Balance as at 31 December 2023 Cost 5,894,095 48,237,715 19,011,574 248,330 73,391,714 Accumulated value adjustments 0 (14,897,982) (10,029,954) 0 (24,927,936) Net book value 5,894,095 33,339,733 8,981,620 248,330 48,463,778 Year ended 31 December 2024 At beginning of the year 5,894,095 33,339,733 8,981,620 248,330 48,463,778 Additions 0 87,876 784,990 366,204 1,239,070 Transfer from assets under construction 0 188,302 187,899 (225,000) 151,201 Reductions - disposal 0 0 (12,532) 0 (12,532) Depreciation charge 0 (1,335,910) (1,583,716) 0 (2,919,626) Closing net book amount 5,894,095 32,280,001 8,358,261 389,534 46,921,891 Balance as at 31 December 2024 Cost 5,894,095 48,513,894 19,627,037 389,534 74,424,560 Accumulated value adjustments 0 (16,233,893) (11,268,776) 0 (27,502,669) Net book value 5,894,095 32,280,001 8,358,261 389,534 46,921,891 199 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 7 – PROPERTY, PLANT AND EQUIPMENT (continued) Ministry of the Sea, Transport and Infrastructure of the Republic of Croatia, a request with regard to the Kornati Marina in Biograd na Moru for modification and amendment to the Decision on Concession and the Concession Agreement, that is for extending the term of the concession by a period of 50 years, i.e. until the year 2049. In order to successfully complete the procedure for extending the concession licence for Marina Kornati, Ilirija d.d. sent a supplement of the existing request for extension of the concession licence validity for Marina Kornati to the Ministry of the Sea, Transport and Infrastructure of the Republic of Croatia on 28 December 2023, in which it essentially offered: a new increased amount of investment in the maritime domain, new increased investments in the green transition, including the decarbonization and digital transformation in accordance with Regulation (EU) 2020/852 of the European Parliament and Council of 18 June 2020, on establishing a framework for facilitating sustainable investments and amending Regulation (EU) 2019/2088 EU OJ, L 198/13, suggested new amounts of concession fees with reference to the previously revalued investments in Marina Kornati with the end of 2023, in order to express the real, absolute value of investments so far, and also explained the legal matters that are important for making a positive decision, all in accordance with transitional and final provisions of the new Maritime Domain and Seaports Act (Official Gazette No.: 83/2023, hereinafter: ZPDML23), which entered into force on 29 July 2023, so that the procedures for granting and modifying concessions that were started according to the provisions of ZPDML03 have to be completed in accordance with the provisions of that Act. No decision has been rendered yet on the alleged supplemented request for an extension of the concession licence validity for Marina Kornati. In February 2015, an application was submitted to the County of Zadar for an extension of the concession term for the Ilirija-Kornati hotel port to 30 years, whereas an application for an extension of the concession term was also previously submitted for the open swimming pool in Biograd na Moru. The application has not yet been decided on, and the Company duly settles the concession fee in the agreed amount. As at 31 December 2024 the total investment in the "Park Soline" campsite, as reported at cost, was in the amount of EUR 19,849,210.56. Of the mentioned total investment amount, EUR 7,705.36 was invested in land, EUR 11,856,793.91 in infrastructure and the construction and reconstruction of seven modernly equipped and furnished sanitary facilities and investment in the construction of buildings housing the campsite management offices, the sales and marketing department of the campsite and reception, whereas EUR 7,984,711.29 was invested in equipment, mostly the holiday mobile homes. As at 31 December 2024 a total amount of EUR 318,857.35 was invested in the "Park Soline" campsite restaurant, of which EUR 193,599.54 in the building and EUR 125,257.81 in equipment. The auto camp is spread over 200,800 m² of land, which the Company, on the basis of the Decision of the former Assembly of the Municipality of Biograd na Moru and the Contract on granting permanent use of building land, concluded with the Assembly of the Municipality of Biograd na Moru, received for permanent use for the performance of registered tourism activities. Given the above-mentioned permanent right of use, the Company has in accordance with acquired rights from the transformation and privatization process and legitimate expectations, made capital investments on the tourism land which is not estimated in the process of transformation. The above-mentioned land, except a land plot of 779 m² and the land on which the building has been constructed, is not included in the estimated value of the Croatian Privatization Fund and is not included in the Company’s share capital in the process of conversion and privatization. This confirms one of the most important outstanding issues of the procedure of conversion and privatization of enterprises in our country, and that is arranging the real owner of the construction land, which in the conversion and privatization procedure has not been estimated in the value of the capital of legal entities. Pursuant to the Act on Tourism and Other Land Not Evaluated in the Conversion and Privatisation Process (hereinafter: the Act on Tourism Land) has submitted to the Republic of Croatia a timely request for a concession on tourism land not evaluated in the conversion and privatization process for a period 200 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru of 50 years (longest permitted period), based on a properly conducted conversion process and the rights from the conversion process over Soline campsite consequently belong to the Company. As a result of the ambiguity in the provisions of the Act on Tourism Land and related regulations, according to the information available to the Company, no concession contract for tourism land plots in campsites has been concluded in the Republic of Croatia since its adoption (2010). Due to unclear provisions of the Act, no decision has been rendered during its validity regarding the Company’s application. According to the above-mentioned legal basis, Park Soline campsite has been issued a decision on a four-star classification. In May 2020, a new act on non-evaluated construction land was adopted, and thus the Act on Tourism Land ceased to have effect. The new Act provides for the right of tourism companies to submit an application for leasing construction tourism land for a period of 50 years. In March 2021 the Company submitted the appropriate application for leasing construction land in the campsite for a period of 50 years to the competent authority of the Republic of Croatia, that is, to the Ministry of Physical Planning, Construction and State Assets. Under the provisions of the Act on Non-Evaluated Construction land, a company shall become the owner of buildings, land under buildings and land in the campsite that were evaluated and entered into the value of social capital in the conversion and privatisation process, while the Republic of Croatia shall become the owner of buildings and land in the campsite that were not evaluated and entered into the value of social capital in the conversion and privatisation process (so called Parts of the campsite owned by the Republic of Croatia). In the meantime, on 1 April 2022 the Company, in accordance with Article 18) of the Act on Non-Evaluated Construction Land, obtained from the Centre for Restructuring and Sales the Certificate of Conformity of the Geodetic Survey Report, which confirms the conformity of the Park Soline Campsite Geodetic Survey Report with the decision of the Croatian Privatisation Fund of 12 July 1996, by which the real property concerned was evaluated in the process of conversion of the socially-owned enterprise “Ilirija” Biograd na Moru. On 9 February 2024, the Ordinance on the Arrangement of Leases on Parts of the Campsites Owned by the Republic of Croatia was published (Official Gazette, No 16/2024, hereinafter: the Ordinance), which entered into force on 17 February 2024. The aforementioned Ordinance prescribes the initial amounts of the unit rental fee for the parts of the campsites owned by the Republic of Croatia, as well as other criteria for determining and calculating the rental fee. The Republic of Croatia, through the departmental Ministry of Physical Planning, Construction and State Assets, in a letter dated 22 April 2024, invited ILIRIJA d.d. to pay the lease fee based on the aforementioned Ordinance, and Ilirija d.d. calculated lease fee for the period from the date of entry into force of the Act on Unvalued Construction Land until 31 December 2023. (05/2020 – 12/2023) in the total amount of EUR 538,912.31. The amount determined in this way, in accordance with the Ordinance on the Arrangement of Leases, represents 50% of the lease fee for the “Park Soline” campsite, while the remaining 50% of the lease fee shall be calculated according to the decision from Article 17.1 of the Act on Unvalued Construction Land, i.e. the conclusion of a 50-year lease agreement in accordance with the Act. For the next period starting from 2024, the competent Ministry determined the annual lease fee for the “Park Soline” campsite in the amount of EUR 171,624.15, payable in 12 equal monthly instalments, and has issued the lease fee invoices to ILIRIJA d.d. ILIRIJA d.d. has duly paid the aforementioned annual lease fee, which amount in accordance with the Ordinance on the Arrangement of Leases, represents 50% of the lease fee. The Company estimated that the amount of lease fee calculated at the unit price per square meter of land will exceed 4% of the turnover in the previous year, and accordingly the amount of lease fee will represent a variable fee. In accordance with the provisions of IFRS 16, variable lease fee payments that are based solely on the revenue of the camp do not represent fixed payments and the Company has not included them in the calculation of IFRS 16 for classification and measurement purposes. In the meantime, the Company has also regulated performing its registered tourism activity on the stated land by lease agreements concluded with Hrvatske šume and the Town of Biograd na Moru. The land lease agreement concluded by and between the company Hrvatske šume d.o.o. and Ilirija d.d. on 20 August 2004 for a period of 20 years expired on 20 August 2024, as did the land lease agreement 201 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru between the Town of Biograd na Moru and Ilirija d.d. concluded on 16 December 1999 for a period of 25 years, which expired on 16 December 2024. Given the fact that the aforementioned land lease agreements have expired, as well as the fact that since the entry into force of the Act (May 2020) the lease for the land comprising the Ilirija campsite has been paid to the competent Ministry on the basis of the submitted lease invoices, Ilirija d.d. has sent letters notifying Hrvatske šume d.o.o. and the Town of Biograd na Moru that they have fully fulfilled all their obligations towards them under the Lease Agreement which has ceased to be valid and will continue to pay the lease fee to the competent Ministry and the Republic of Croatia. Over a part of the Company’s buildings (Hotel Adriatic, Hotel Ilirija and Tennis Centre) with purchase value of EUR 18,018,422.86 and its land of a purchase value of EUR 3,304,968.86 are subjects to lien in favour of the commercial bank for approved loans (see Note 16). In 2020, the commercial bank also performed the regular assessment of the value of Adriatic, Ilirija and Kornati hotels as guarantee for the loans. The estimated value of the hotels Adriatica, Ilirija and Kornati is EUR 25,436,422.00. In 2019, the commercial bank also performed the regular assessment of the value of the "City Galleria" Business and Shopping Centre owned by the Company as guarantee for the loans for the acquisition of "City Galleria". The value is estimated at EUR 16,359,776.00. The value of the said buildings, property and land, recorded in company accounts as the cost of acquisition decreased by the accumulated depreciation, amounts to EUR 20,859,574.96, namely EUR 20,936,623.04 less than the market value estimated by the commercial bank. The commercial bank estimated a total value of the buildings and land subject to lien in favour of the bank for approved loans (Hotel Adriatic, Hotel Ilirija, Hotel Kornati and City Galleria) in the amount of EUR 41,796,198.00, whereas the total value of the Company’s medium and long-term loans amounted to EUR 8,341,107.79 as at 31 December 2024, representing a loan share of 19,96% of the Company’s total assets evaluated by the commercial bank serving as lien in favour of the bank for approved loans. 202 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 8 – INVESTMENT PROPERTY Buildings (In EUR, without cents) Land facilities Total Year ended 31 December 2023 Opening net book amount 1,678,744 8,496,335 10,175,079 Additions 0 62,167 62,167 Depreciation charge 0 (249,585) (249,585) Closing net book amount 1,678,744 8,308,917 9,987,661 Balance as at 31 December 2023 Cost 1,678,744 9,694,482 11,373,226 Accumulated value adjustments 0 (1,385,565) (1,385,565) Net book value 1,678,744 8,308,917 9,987,661 Year ended 31 December 2024 Opening net book amount 1,678,744 8,308,917 9,987,661 Additions 0 81,326 81,326 Depreciation charge 0 (252,896) (252,896) Closing net book amount 1,678,744 8,137,347 9,816,091 Balance as at 31 December 2024 Cost 1,678,744 9,775,809 11,454,553 Accumulated value adjustments 0 (1,638,462) (1,638,462) Net book value 1,678,744 8,137,347 9,816,091 Investment property includes the land and the building of the “City Galleria” Business and Shopping Centre in Zadar. All buildings together with the associated land are subject to lien as collateral for repayment of a loan (see note 7). During the year, the Company had rental income from investment property in the amount of EUR 2,159,072.06 (2023: EUR 2,056,050.86), while operating expenses related to investment property amounted to EUR 1,442,955.58 (2023: EUR 1,393,002.89). 203 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 9 – INVESTMENTS IN SUBSIDIARIES (In EUR, without cents) 2024 2023 Ilirija Građenje d.o.o., Biograd n/m 2,405 2,405 Ilirija Nautika d.o.o., Biograd n/m 2,512 2,512 4,917 4,917 Investments and the respective ownership are as follows: Type of activity Share percentage Company name Seat 2024 2023 Subsidiaries Ilirija Građenje d.o.o., Biograd n/m construction, property Croatia 100.00% 100.00% Ilirija Nautika d.o.o., Biograd n/m marinas Croatia 100.00% 100.00% NOTE 10 – INVENTORIES (In EUR, without cents) 2024 2023 Raw material and materials 263,973 189,290 Small inventory and spare parts 12,189 14,208 276,162 203,498 NOTE 11 - RECEIVABLES AND ADVANCES (In EUR, without cents) 2024 2023 Domestic trade receivables 614,344 401,019 Domestic trade receivables - related parties, A. H. 0 0 Foreign trade receivables 34,667 129,332 Suspect and contested trade receivables 382,232 410,555 Advance receivables 89,277 128,710 Loans to co-owners – related parties 2,290 3,583 VAT receivables 6,106 29,779 Receivables due from employees, loans 10,293 14,611 Prepaid lease fee 538,912 0 Interest receivables 121,008 110,872 Other receivables 32,611 25,094 1,831,740 1,253,555 Trade receivables value adjustment (382,232) (410,555) 1,449,508 843,000 204 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 12 - SHORT-TERM FINANCIAL ASSETS (In EUR, without cents) 2024 2023 Time deposits with banks 13,000,000 12,000,000 13,000,000 12,000,000 NOTE 13 – CASH (In EUR, without cents) 2024 2023 Gyro accounts 5,828 7,393 Foreign currency accounts 0 0 Cash in hand 22,423 18,024 28,251 25,417 NOTE 14 – SHARE CAPITAL AND OWN SHARES Share capital Ordinary Reserved Own less the (In EUR, without cents) shares shares Total shares own shares Balance as at 31 December 2023 30,105,098 314,902 30,420,000 (137,207) 30,282,793 Balance as at 31 December 2024 30,105,098 314,902 30,420,000 (448,288) 29,971,712 As at 31 December 2024, the share capital of the Company amounted to EUR 30,420,000.00, and it is divided into 2,413,488 no-par-value ordinary shares. In 2024, the Company acquired 10,450 own shares, at the cost of acquisition of EUR 311,081.00. As at 31 December 2024, the balance of own shares amounted to 15,493 shares (2023: 5,043) at investment cost of EUR 448,287.84 (2023: EUR 137,206.84). In the process of Company conversion, by the decision of the Croatian Privatization Fund, shares with a value of DEM 2,727,000 have been reserved due to the unresolved property rights on certain properties. Since in the meantime a part of the properties was sold and for a part the ownership issue was resolved, the Croatian Privatization Fund resolutions cancelled the provision of shares for such properties, so on 31/12/2024, the number of reserved shares amounted to 24,984, or 1.0352% (2023: 1.0352%). 205 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 14 – SHARE CAPITAL AND OWN SHARES (continued) The capital ownership structure of Ilirija d.d., Biograd is as follows (in %): 31 December 2024 31 December 2023 Arsenal Holdings d.o.o., Zadar 59.21 59.21 Ilirija d.d., Biograd na moru (own shares) 0.64 0.21 AZ mandatory pension fund 16.51 16.51 AZ voluntary pension fund 3.03 3.03 Centre for restructuring and sale (CERP) 1.05 1.06 Other shareholders 19.56 19.98 100.00 100.00 NOTE 15 – RESERVES (In EUR, without cents) 2024 2023 Legal reserves 3,195,698 3,195,698 Reserves for own shares 925,837 925,837 Other reserves 991,395 991,395 5,112,930 5,112,930 Legal reserves are formed from the realised profit up to 5% of the Company's share capital, in accordance with the Companies Act. Legal reserves are not distributable. 206 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 16 – BORROWINGS Approved Interest (In EUR, without cents) principal rate 2024 2023 Short-term Erste&Steiermärkische Bank d.d., Rijeka EUR 750,000.00 2.30% - 450,000 Erste&Steiermärkische Bank d.d., Rijeka EUR 331,807.02 4.10% 363,924 312,505 Erste&Steiermärkische Bank d.d., Rijeka EUR 1,000,000.00 4.00% 801,472 - 1,165,396 762,505 Plus: current due amounts of long-term borrowings and leasing 2,255,722 2,421,019 Total short-term portion 3,421,118 3,183,524 Mid-term and long-term Erste&Steiermärkische Bank d.d., Rijeka EUR 1,680,000.00 3.00% 1,072,045 1,196,812 Erste&Steiermärkische Bank d.d., Rijeka EUR 7,491,008.67 2.60% 4,021,751 4,524,470 Erste&Steiermärkische Bank d.d., Rijeka EUR 6,000,000.00 2.60% 3,307,389 3,708,284 Erste&Steiermärkische Bank d.d., Rijeka EUR 600,000.00 2.60% - 100,224 Erste&Steiermärkische Bank d.d., Rijeka EUR 2,000,000.00 2.25% 1,401,789 1,802,247 S - Leasing d.o.o., Zagreb EUR 4,217,988.00 2,609,524 3,100,827 12,412,498 14,432,864 Minus: current due amounts of long-term borrowings and leasing (2,255,722) (2,421,019) Total mid-term and long-term debt 10,156,776 12,011,845 Total borrowings 13,577,894 15,195,369 Short-term borrowings Short-term loan liabilities relate to two loans from Erste&Steiermärkische bank d.d.: framework revolving loan under the transaction account of Erste&Steiermärkische bank d.d from 22 November 2024, up to EUR 500,000.00 with a fixed interest rate of 4.10%. revolving loan approved on 22 November 2024, in the amount of EUR 1,000,000.00, for financing working capital, at a fixed interest rate of 4.00% p.a. The repayment date is 22 November 2025. Mid-term and long-term borrowings Mid-term and long-term loan liabilities relate to four loans from Erste&Steiermärkische bank d.d.: 207 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 16 – BORROWINGS (CONTINUED) - loan approved on 26 February 2016, in the amount of EUR 1,680,000.00, as an investment loan from the loan support program for the tourism sector in cooperation with the Croatian Bank for Reconstruction and Development, for the reconstruction of the Kornati marina in Biograd na Moru. The loan is to be repaid in 60 quarterly instalments in the amount of EUR 27,991.59, the last instalment being due on 30 June 2034. The loan balance as at 31 December 2024 amounted to EUR 1,063,682.23. loan approved on 25 May 2016, in the amount of EUR 7,491,008.67, to refinance the existing long-term loan. The loan is to be repaid in 60 quarterly instalments in the amount of EUR 124,850.14, the last instalment being due on 01 October 2032. The loan balance as at 31 December 2024 amounted to EUR 3,995,204.70. - loan approved on 29 November 2016, in the amount of EUR 6,000,000.00, for the purchase of the City Galleria Business and Shopping Centre building in Zadar. The loan is to be repaid in 180 quarterly instalments in the amount of EUR 33,333.33, the last instalment being due on 1 March 2033. The loan balance as at 31 December 2024 amounted to EUR 3,300,000.27. Loan repayment is secured with financial instruments, and by registering a lien - mortgage on property of the Company (the building of the “City Galleria” Business and Shopping Centre with the associated land) in favour of the commercial bank (see Note 7). - loan approved on 19 May 2021, in the amount of EUR 2,000,000.00, was utilised in full on 17 March 2022. The first loan instalment becomes due on 31 July 2023. The loan is to be repaid in 20 equal quarterly instalments in the amount of EUR 100,000.00, the last instalment being due on 30 April 2028. The loan balance as at 31 December 2024 amounted to EUR 1,393,589.47. The liability to S-leasing d.o.o., Zagreb relates to the liabilities under 56 financial leasing contracts to purchase equipment, which are to be repaid in equal monthly annuities. The interest rates on all contracts are fixed, of which 34 contracts have an interest rate of 3.15%, and 3 contracts have an interest rate of 2.90%, 11 contracts have an interest rate of 5.75%, 2 contracts have an interest rate of 5.93%, 1 contract has an interest rate of 5.57%, 1 contract has an interest rate of 5.51%, 1 contract has an interest rate of 5.24%, and 3 contracts have an interest rate of 5.75%. Liabilities under these financial leasing contracts are due from 2023 to 2030. The repayment schedule for long-term borrowings for the next five years is as follows: (In EUR, without cents) 2025 2,436,882 2026 2,185,026 2027 2,019,046 2028 1,656,147 2029 1,361,216 after 2030 2,754,181 12,412,498 208 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 17 – PROVISIONS (In EUR, without cents) 2024 2023 Provisions per initiated legal proceedings 154,107 154,107 154,107 154,107 NOTE 18 - TRADE AND OTHER PAYABLES (In EUR, without cents) 2024 2023 Trade payables 1,600,491 1,796,090 Trade payables - Group, Arsenal Holdings, TCZ 38,217 2,014 Payables under received advances 57,251 11,293 Residence tax 65,465 11,546 Fee for the use of maritime domain 26,907 24,918 Advances from individual guests 91,054 170,159 Advances from agencies 299,578 235,473 Dividend payables 11,732 10,627 Employee payables 379,461 365,138 Liabilities to the government 261,368 235,923 Corporate income tax receivables 210,457 219,215 Other payables 88,906 14,051 3,130,887 3,096,447 209 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 19 – SEGMENT REPORTING For the primary reporting format the business segments are determined based on risks and rates of return of the Company, which is primarily influenced by the differences in services which they offer to the market. Secondary information are reports according to geographical segments. Business segments are organized and managed separately according to the nature of the services provided, with each segment representing a strategic business unit that offers different services to different markets. They are recorded based on the information that is internally prepared for the Management Board, which is also the chief operating decision-maker. The portfolio of the Company consists of the Adriatic, Ilirija and Kornati hotels and Villa Donat, Marina Kornati with the Ilirija-Kornati Hotel Port, the “Park Soline” campsite, destination management company Ilirija Travel with its own capacities (Arsenal in Zadar, the “Nada” event boat, agritourism and Villa Primorje), City Galleria Business and Shopping Centre, Tennis Centre, Aquatic Centre and hospitality facilities. The Company’s management activities are divided into the hotel segment (sector), the nautical segment, the camping segment, Ilirija travel and the City Galleria. The hotel business segment includes the operations of the Adriatic Ilirija and Kornati hotels and Villa Donat, Lavander Bar, Aquatic Centre, Tennis Centre and Biffe Beach. The nautical business segment includes the operations of the Kornati Marina, the Ilirija-Kornati Hotel Port, the Marina Kornati restaurant and the “Biograd Boat Show” nautical fair. The camping business segment includes the operations of the “Park Soline” campsite and the “Park Soline” restaurant. The Ilirija travel business segment includes the operations of the Tourist Agency, the “Nada” event boat, agritourism, Villa Primorje and Arsenal. The City Galleria business segment includes rental services in the business and shopping centre. Business segments The following tables present revenue and profit and certain assets and liabilities of the Company per business segments, i.e. sectors: 210 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru Year ended 31 December 2024 (In EUR, without cents) Hotel sector Nautical sector Camping sector Ilirija Travel City Galleria Total Revenue 9,681,498 8,995,995 7,690,958 1,506,198 2,145,733 30,020,382 Revenue from leases – the Group, Arsenal Holdings 2,040 2,040 Total revenue 9,681,498 8,995,995 7,690,958 1,506,198 2,147,773 30,022,422 Result Segment result (166,149) 3,323,544 1,734,517 (936,261) 606,153 4,561,804 Net financial expenses 34,780 33,152 (104,414) (4,534) (86,744) (127,760) Profit before tax (131,369) 3,356,696 1,630,103 (940,795) 519,409 4,434,044 (i) Cost of corporate income tax (25,419) 649,507 315,418 (182,040) 100,504 857,970 Net profit for the year (105,950) 2,707,189 1,314,685 (758,755) 418,905 3,576,074 For the year ended on 31/12/2024 (in EUR, without cents) Hotel sector Nautical sector Camping sector Ilirija Travel City Galleria Total As at 31/12/2024 Assets and liabilities Segment assets 23,834,110 14,488,634 16,300,338 4,848,568 10,938,735 70,410,385 Non-allocated assets 1,145,851 Total assets 71,556,236 Segment liabilities 1,014,673 2,033,863 3,001,471 106,771 3,568,598 9,725,376 Non-allocated liabilities 6,927,055 Corporate income tax receivables 210,457 Total liabilities 16,862,888 Other segment details Capital investments: Non-allocated 150,026 Property, plant and equipment 335,087 115,745 630,529 87,748 1,169,109 Intangible assets 190,728 190,728 Investment property 83,264 83,264 Depreciation of property, plant and equipment 1,069,001 365,869 1,140,873 213,451 2,789,194 Non-allocated depreciation 111,657 Total property, plant and equipment depreciation 2,900,851 Depreciation of intangible assets 51,886 51,886 Depreciation of investment property 271,671 271,671 211 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 19 – SEGMENT REPORTING (continued) Year ended 31 December 2023 (In EUR, without cents) Hotel sector Nautical sector Camping sector Ilirija Travel City Galleria Total Revenue 8,929,053 8,374,583 7,458,287 1,055,035 2,029,265 27,846,223 Revenue from leases – the Group, Arsenal Holdings 2,040 2,040 Total revenue 8,929,053 8,374,583 7,458,287 1,055,035 2,031,305 27,848,263 Result Segment result (161,770) 3,055,049 1,770,784 (931,893) 585,430 4,317,600 Net financial expenses (4,466) (8,894) (128,062) (3,161) (102,600) (247,183) Profit before tax (166,236) 3,046,155 1,642,722 (935,054) 482,830 4,070,417 (i) Cost of corporate income tax (32,300) 591,872 319,183 (181,682) 93,814 790,887 Net profit for the year (133,936) 2,454,283 1,323,539 (753,372) 389,016 3,279,530 For the year ended on 31/12/2023 (in EUR, without cents) Hotel sector Nautical sector Camping sector Ilirija Travel City Galleria Total As at 31/12/2023 Assets and liabilities Segment assets 24,240,662 14,017,171 16,613,227 4,606,133 11,043,679 70,520,872 Non-allocated assets 1,039,318 Total assets 71,560,190 Segment liabilities 977,738 2,194,192 3,471,899 85,960 3,941,101 10,670,890 Non-allocated liabilities 7,555,818 Corporate income tax receivables 219,215 Total liabilities 18,445,923 Other segment details Capital investments: Land - unallocated 31,981 Property, plant and equipment 855,035 409,022 1,594,321 234,671 3,093,049 Intangible assets 42,093 42,093 Investment property 62,956 62,956 Depreciation of property, plant and equipment 1,029,717 370,690 1,254,585 201,873 2,856,865 Non-allocated depreciation 102,402 Total property, plant and equipment depreciation 2,959,267 Depreciation of intangible assets 13,177 13,177 Depreciation of investment property 266,841 266,841 212 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru The total assets of the Company and capital investments in assets are in the Republic of Croatia. Revenue – per geographical area Sales revenues may also differ according to the geographical affiliation of customers. (In EUR, without cents) 2024 2023 Domestic sales revenue 25,756,658 22,500,284 Domestic sales revenue - Group, Arsenal Holdings 2,040 2,040 Revenues from sales abroad 4,263,724 5,345,939 30,022,422 27,848,263 Domestic sales revenues also include foreign trade receivables in domestic agency arrangements. NOTE 20 - OTHER OPERATING REVENUE (In EUR, without cents) 2024 2023 Revenue from previous years 96,186 - Exchange office commission fee 158 325 Insurance damages collected 29,615 44,083 Revenue from joint financing 61,424 60,614 Discounts 92,714 53,814 Other revenue 49,013 40,710 329,110 199,546 NOTE 21 - COST OF RAW MATERIAL, MATERIALS AND ENERGY (In EUR, without cents) 2024 2023 Raw materials and materials consumed 2,797,769 2,674,514 Energy 1,088,253 1,134,308 Small inventory 260,279 237,527 4,146,301 4,046,349 213 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 22 - COST OF SERVICES (In EUR, without cents) 2024 2023 Transport, telephone, postal fees 328,432 255,161 Repairs and maintenance 1,184,737 968,728 Cost of fairs 18,161 21,608 Leases 965,536 655,418 Rents - Group, Arsenal Holdings, TC 242,087 242,087 Rents - related party, natural person 39,024 38,823 Promotion costs 736,547 684,135 Promotion costs - Group, Arsenal Holdings 479 413 Municipal utility services 753,442 763,879 Utility and water fees 363,312 345,103 Other services 60,086 46,116 4,691,843 4,021,471 NOTE 23 - STAFF COSTS (In EUR, without cents) 2024 2023 Net salaries 5,286,723 4,717,933 Taxes and contributions from/on salaries 3,477,162 3,175,267 Key management rewards 285,657 74,764 Taxes and contributions from/on key management award 161,464 18,863 Other regulatory disbursements 1,572,813 1,491,002 10,783,819 9,477,829 At the end of the year the number of staff employed by the Company was 306 (2023: 312). This is the number of employees based on actual working hours (whole number) at the end of the tax period. Gross salaries and compensation of key management in 2024 amounted to EUR 481,111.83 (2023: EUR 455,773.09). 214 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 24 - OTHER OPERATING EXPENSES (In EUR, without cents) 2024 2023 Agency fees 401,461 336,524 Intellectual services (lawyer, notary and other) 31,054 24,622 Entertainment programme organisation 332,882 231,091 Commissions and fees 744,600 756,878 Security services 285,464 245,762 Entertainment expenses 261,291 165,968 Insurance premiums 165,232 146,573 Memberships, taxes and contributions 115,717 106,199 Bank and payment transaction charges 56,497 50,846 Concessions 231,607 215,831 Donations, sponsorships 68,632 104,640 Deficits 25,187 11,421 Subsequently identified expenses from previous years 45,794 16,319 Write-off of uncollected trade receivables for which legal proceedings or forced collection are initiated 52,102 - Other 125,837 532,601 2,943,357 2,945,275 NOTE 25 - NET FINANCIAL EXPENSES (In EUR, without cents) 2024 2023 Financial revenues Foreign exchange gains 0 119 Interest income 334,461 238,812 Total financial revenue 334,461 238,931 Financial expenses Foreign exchange losses 0 (1,286) Interest expenses (455,361) (478,250) Other financial expenses (6,860) (6,577) Total financial expenses (462,221) (486,113) Net financial expenses (127,760) (247,182) 215 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 26 - CORPORATE INCOME TAX Corporate income tax is calculated in accordance with Croatian legislation. Tax rate on taxable income is 18% (2023: a 18%). As at 31 December 2024, the corporate income tax liability amounted to EUR 857,969.63 (2023: EUR 790,887.36). Adjustment of the Company’s effective tax expense per income statement with statement of comprehensive income and taxation at the statutory rate is detailed in the table below: (In EUR, without cents) 31 December 2024 31 December 2023 Profit before tax 4,434,044 4,070,418 Tax calculated at a rate of 18% 798,128 732,675 Tax effect of net expenses non-deductible for tax purposes 59,842 58,212 Tax effect of net income not subject to tax - Tax liability 857,970 790,887 Benefit under the Investment Promotion Act - - Final tax liability 857,970 790,887 NOTE 27 - EARNINGS PER SHARE Basic earnings per share is calculated by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares outstanding during the year, excluding the average number of ordinary shares purchased by the Company and held as own shares (Note 14). 2024 2023 Net profit attributable to shareholders (in EUR) 3,576,074 3,279,530 Weighted average number of issued ordinary shares 2,398,282 2,404,310 Basic earnings per share (in EUR) 1.49 1.37 216 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 28 - CASH GENERATED FROM OPERATIONS Adjustment of profit with cash generated from operations as follows: (In EUR, without cents) 2024 2023 Profit before tax 4,434,044 4,070,418 Adjustment for: Depreciation of intangible assets (Note 6) 51,886 13,177 Property, plant and equipment depreciation (Note 7) 2,919,626 2,976,524 Depreciation of investment property (Note 8) 252,896 249,585 Sold and disposed intangible assets (Note 7) (25,187) (11,421) Distribution of own shares (Note 14) - (291,407) Corporate income tax paid (866,728) (942,641) Other adjustments 78,662 173,823 Changes in working capital: - trade receivables (118,660) (269,620) - other receivables 59,822 138,674 - inventories (72,664) (13,725) - trade payables (113,437) 489,960 - liabilities to the government 136,823 (113,898) - employee payables 26,055 35,737 - other payables 0 9 Cash inflow generated from operations 6,763,138 6,505,195 NOTE 29 - RELATED PARTY TRANSACTIONS The Company majority owner is Arsenal Holdings d.o.o., Zadar, which owns 59.21% share in the Company. Transactions with related parties, in addition to the aforementioned, include transactions with Trgovinski centar Zadar d.o.o., which is a member of the “Arsenal Holdings” group and which is owned by the same owner as well as the co-owners of the Company - natural persons and the Management Board and key management. Related party transactions, in the normal course of its operations, include purchase and sale of goods under market conditions, as well as services, loans and gross salaries of key management and supervisory board compensation. Year-end balances resulting from related party transactions that are included in the balance sheet are as follows: (In EUR, without cents) 2024 2023 Domestic trade receivables (Note 11) - - Other receivables from co-owners (Note 11) 2,290 3,583 Trade payables (Note 18) 38,217 2,014 217 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru During the year the Company had the following related party transactions which are reflected in the income statement: (In EUR, without cents) 2024 2023 Service revenues (Note 19) 2,040 2,040 Rents (Note 22) 281,111 280,910 Promotion (Note 22) 479 413 Gross salaries of key management (Note 23) 481,112 455,773 Service contract (net) 56,649 29,916 Supervisory Board 160,573 171,497 NOTE 30 – RISK MANAGEMENT During its regular business operations, the Company is exposed to interest rate, currency, and credit risks. The policy for managing risks connected to short-term and long-term financing of clients, managing funds and debts and liabilities can be summarised as follows: Interest rate risk Interest rate risk refers to risk of changes in the value of future cash flows of a financial instrument due to changes in market interest rates. The Company’s exposure to risk of changes on the interest rate market is primarily linked to received loans and granted deposits and loans. Due to the fact that the Company uses the borrowings with both fixed and, to a lesser extent, variable interest rate, it is subject to minimal risk of variable interest rates. Credit risk Financial assets that may potentially expose the Company to credit risk are cash and trade receivables. Trade receivables pertaining to certain customers may entail credit risk, depending on the level of turnover realised with certain customers and the general state of liquidity in the country. Trade receivables are reported with reference to real values. An adjustment of the value of trade receivables is indicated when there is objective evidence that the Company will not be able to collect all of its claims in accordance with the agreed terms. Apart from the aforementioned, the Company has no exposure to any other significant credit risk. Liquidity risk The Management Board is responsible for liquidity risk management, as it sets out an appropriate framework for managing the liquidity risk, in order to manage short-term, mid-term, and long-term financing and liquidity requirements. With regard to the liquidity risk, the Company's policy is to maintain adequate funds or to have funds at its disposal from loans for future liabilities. 218 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru The Company uses the following basic models for measuring the liquidity risk and based on the results it implements measures for liquidity risk management: - Budgetary projections - Cash flow projections - Fund source analysis - Maturity mismatch analysis of the statement of financial position. Prudent liquidity management implies maintaining a sufficient amount of money in order to settle the Company’s liabilities. The Finance Department monitors the level of liquidity on a regular basis. the Company has been carrying out activities to optimise all of its operating costs and minimise them to essential and indispensable costs, and actively cooperates with all significant creditors to settle current liabilities. Tabular analysis of the liquidity risk The following tables show the maturity of the Company’s liabilities presented in the statement of financial position at the end of the period. (In EUR, without cents) Weighted average effective interest rate % Up to 1 month From 1 to 3 mos From 3 mos to 3 yr Over 1 yr Total 2023 Interest-free - 1,809,396 0 0 0 1,809,396 Interest 3.09% 265,294 530,587 2,387,643 12,011,845 15,195,369 2,074,690 530,587 2,387,643 12,011,845 17,004,765 2024 Interest-free - 1,695,959 0 0 0 1,695,959 Interest 3.09% 285,093 570,186 2,565,839 10,156,776 13,577,894 1,981,052 570,186 2,565,839 10,156,776 15,273,853 The tables are based on undiscounted cash outflows per financial liability as at their maturity date. The tables show cash flows per principal. 219 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru The following tables show the maturity of the Company’s financial assets presented in the statement of financial position at the end of the period, confirming the non-existence of the liquidity risk. (In EUR, without cents) Weighted average effective interest rate % Up to 1 month From 1 to 3 mos From 3 mos to 1 yr From 1 to 5 yrs Total 2023 Receivables and cash balances - 868,417 0 0 0 868,417 Deposits and loans 2.70% 0 0 12,000,000 0 12,000,000 0 0 12,000,000 0 12,868,417 2024 Receivables and cash balances - 1,477,760 0 0 0 1,477,760 Deposits and loans 2.75% 0 0 13,000,000 0 13,000,000 1,477,760 0 13,000,000 0 14,477,760 The illiquidity risk, which is considered a financing risk, refers to a risk of difficulties that the Company will face when collecting funds for the timely settlement of liabilities linked to financial instruments. The Company's approach to managing liquidity is to ensure, as much as possible, its liquidity at any given moment in order to be able to timely meet its obligations, both in regular and extraordinary circumstances, without causing unacceptable losses or risking damage to the Company’s reputation. The liquidity risk arises from everyday activities. Currently, the Company is not at risk of illiquidity, and current assets exceed current liabilities several times over. Currency risk On 12 July 2023, the Council of the European Union adopted the Decision on the adoption of the euro in Croatia on 1 January 2023, establishing that the Republic of Croatia fulfils all the requirements for the introduction of the euro as the official currency in the Republic of Croatia, as well as Council Regulation (EU) of 12 July 2023 regarding the euro conversion rate for Croatia, establishing that the conversion rate shall amount to HRK 7.53450 for one euro. In accordance with the aforementioned Decision and Regulation, the Government of the Republic of Croatia adopted the Decision on the announcement of the introduction of the euro as the official currency in the Republic of Croatia, setting out that the euro shall become the official monetary unit and legal tender in the Republic of Croatia on 1 January 2023. The introduction of the euro as the official currency in the Republic of Croatia significantly affects the Company’s exposure to currency and price risks. Regulatory risk The Company is exposed to changes in tax and other regulations within the legal system of the Republic of Croatia. In particular, this applies to the regulations pertaining to the maritime domain and tourist land, in which domain the Company has made significant long-term investments crucial for its business, while not all rights guaranteed by the Constitution from the field of protection of capital investments referred to in Art. 48 and 49 of the Constitution of the Republic of Croatia, of which the Company informs the regulatory and investment public multiple times in its regular annual and quarterly business and financial reports. 220 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2024 Notes (continued) As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru NOTE 31 – CONTINGENT LIABILITIES The Company is a party to several legal proceedings, but the Management Board does not expect losses that would significantly impact property, ownership status and operations of the Company. Upon order of the Company, a bank guarantee was issued in favour of Hrvatske šume d.o.o., Zagreb, for the amount of EUR 66,361 with a validity period until 15 July 2024, as well as a bank guarantee in favour of the Ministry of Sea, Transport and Infrastructure of the Republic of Croatia, in the amount of EUR 59,917 with a validity period until 9 April 2025. NOTE 32 – EVENTS FOLLOWING THE REPORTING PERIOD After 31 December 2024, until the date of approving the financial statements by the Management Board, no events occurred that would have a significant impact on the financial statements of the Company. NOTE 33 - FINANCIAL STATEMENTS AUTHORISATION The Company Management Board adopted the financial statements and authorised their issuing on 26 February 2025. Signed on behalf of the Company’s Management Board Goran Ražnjević, member of the Management Board 221 ADDITION “STANDARD ANNUAL FINANCIAL STATEMENTS” Appendix "Standard annual financial reports" As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru Based on the Ordinance on the Structure and Content of Annual Financial Statements of 20 October 2016 (OG 95/2016, 144/2020), the following tables show financial in accordance with the mentioned Ordinance (income statement, including the statement of comprehensive income, statement of financial position (balance sheet) Balance sheet of ILIRIJA d.d. Submitter: Ilirija d.d. TIN: 05951496767 Item ADP code No Notes Previous year (net) Current year (net) 1 2 3 4 5 ASSETS A) RECEIVABLES FOR SUBSCRIBED CAPITAL UNPAID 001 0 0 B) FIXED ASSETS (ADP 003+010+020+031+036) 002 58,488,275 56,802,315 I INTANGIBLE ASSETS (ADP 004 to 009) 003 6 31,919 59,416 1 Research and development 004 0 0 2 Concessions, patents, licences, trademarks, software and other rights 005 0 0 3 Goodwill 006 0 0 4 Advances for the purchase of intangible assets 007 0 0 5 Intangible assets in preparation 008 0 0 6 Other intangible assets 009 31,919 59,416 II TANGIBLE ASSETS (ADP 011 to 019) 010 58,451,439 56,737,982 1 Land 011 7 5,894,095 5,894,095 2 Buildings 012 7 33,339,733 32,280,001 3 Plant and equipment 013 7 8,981,620 8,358,261 4 Tools, working inventory and transportation assets 014 0 0 5 Biological assets 015 0 0 6 Advances for the purchase of tangible assets 016 7 42,547 0 7 Tangible assets in preparation 017 7 205,783 389,534 8 Other tangible assets 018 0 0 9 Investment property 019 8 9,987,661 9,816,091 III FIXED FINANCIAL ASSETS (ADP 021 to 030) 020 4,917 4,917 1 Investments in holdings (shares) of undertakings within the group 021 9 4,917 4,917 2 Investments in other securities of undertakings within the group 022 0 0 3 Loans, deposits, etc. to undertakings within the group 023 0 0 4 Investments in holdings (shares) of companies linked by virtue of participating interests 024 0 0 5 Investment in other securities of companies linked by virtue of participating interests 025 0 0 6 Loans, deposits etc. given to companies linked by virtue of participating interests 026 0 0 7 Investments in securities 027 0 0 8 Loans, deposits, etc. given 028 0 0 9 Other investments accounted for using the equity method 029 0 0 10 Other fixed financial assets 030 0 0 IV RECEIVABLES (ADP 032 to 035) 031 0 0 1 Receivables from undertakings within the group 032 0 0 2 Receivables from companies linked by virtue of participating interests 033 0 0 3 Trade receivables 034 0 0 4 Other receivables 035 0 0 222 ADDITION “STANDARD ANNUAL FINANCIAL STATEMENTS” Appendix "Standard annual financial reports" As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru Balance sheet of ILIRIJA d.d. (continued) As at 31 December 2024 Submitter: Ilirija d.d. TIN: 05951496767 Item ADP code No Notes Previous year (net) Current year (net) 1 2 3 4 5 V DEFERRED TAX ASSETS 036 0 0 C) CURRENT ASSETS (ADP 038+046+053+063) 037 13,071,915 14,215,009 I INVENTORIES (ADP 039 to 045) 038 10 203,498 276,162 1 Raw material and materials 039 203,498 276,162 2 Production under construction 040 0 0 3 Finished goods 041 0 0 4 Merchandise 042 0 0 5 Advances for inventories 043 0 0 6 Fixed assets held for sale 044 0 0 7 Biological assets 045 0 0 II RECEIVABLES (ADP 047 to 052) 046 11 843,000 910,596 1 Receivables from undertakings within the group 047 0 0 2 Receivables from companies linked by virtue of participating interests 048 0 0 3 Trade receivables 049 530,351 649,011 4 Receivables from employees and members of the undertaking 050 20,399 16,458 5 Receivables from government and other institutions 051 39,082 24,824 6 Other receivables 052 253,168 220,303 III CURRENT FINANCIAL ASSETS (ADP 054 to 062) 053 12 12,000,000 13,000,000 1 Investments in holdings (shares) of undertakings within the group 054 0 0 2 Investments in other securities of undertakings within the group 055 0 0 3 Loans, deposits, etc. to undertakings within the group 056 0 0 4 Investments in holdings (shares) of companies linked by virtue of participating interests 057 0 0 5 Investment in other securities of companies linked by virtue of participating interests 058 0 0 6 Loans, deposits etc. given to companies linked by virtue of participating interests 059 0 0 7 Investments in securities 060 0 0 8 Loans, deposits, etc. given 061 12,000,000 13,000,000 9 Other financial assets 062 0 0 IV CASH AT BANK AND IN HAND 063 13 25,417 28,251 D) PREPAID EXPENSES AND ACCRUED INCOME 064 11 0 538,912 E) TOTAL ASSETS (ADP 001+002+037+064) 065 71,560,190 71,556,236 F) OFF-BALANCE SHEET ITEMS 066 0 0 223 ADDITION “STANDARD ANNUAL FINANCIAL STATEMENTS” Appendix "Standard annual financial reports" As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru Balance sheet of ILIRIJA d.d. (continued) As at 31 December 2024 Submitter: Ilirija d.d. TIN: 05951496767 Item ADP code No Notes Previous year (net) Current year (net) 1 2 3 4 5 LIABILITIES A) CAPITAL AND RESERVES (ADP 068 to 070+076+077+083+086+089) 067 14 53,114,266 54,693,348 I INITIAL (SUBSCRIBED) CAPITAL 068 30,420,000 30,420,000 II CAPITAL RESERVES 069 389,195 389,195 III RESERVES FROM PROFIT (ADP 071+072-073+074+075) 070 4,975,723 4,664,642 1 Legal reserves 071 3,195,698 3,195,698 2 Reserves for own shares 072 925,837 925,837 3 Treasury shares and holdings (deductible item) 073 137,207 448,288 4 Statutory reserves 074 0 0 5 Other reserves 075 991,395 991,395 IV REVALUATION RESERVES 076 0 0 V FAIR VALUE RESERVES AND OTHER (ADP 078 to 082) 077 0 0 1 Financial assets at fair value through other comprehensive income (i.e. available for sale) 078 0 0 2 Cash flow hedge – effective portion 079 0 0 3 Hedge of a net investment in a foreign operation – effective portion 080 0 0 4 Other fair value reserves 081 0 0 5 Exchange differences arising from the translation of foreign operations (consolidation) 082 0 0 VI RETAINED PROFIT OR LOSS BROUGHT FORWARD (ADP 084- 085) 083 14,049,818 15,643,437 1 Retained profit 084 14,049,818 15,643,437 2 Loss brought forward 085 0 0 VII PROFIT OR LOSS FOR THE BUSINESS YEAR (ADP 087-088) 086 3,279,530 3,576,074 1 Profit for the business year 087 3,279,530 3,576,074 2 Loss for the business year 088 0 0 VIII MINORITY (NON-CONTROLLING) INTEREST 089 0 0 B) PROVISIONS (ADP 091 to 096) 090 17 154.1080 154,108 1 Provisions for pensions, termination benefits and similar obligations 091 0 0 2 Provisions for tax liabilities 092 0 0 3 Provisions for ongoing legal cases 093 154,108 154,108 4 Provisions for renewal of natural resources 094 0 0 5 Provisions for warranty obligations 095 0 0 6 Other provisions 096 0 0 224 ADDITION “STANDARD ANNUAL FINANCIAL STATEMENTS” Appendix "Standard annual financial reports" As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru Balance sheet of ILIRIJA d.d. (continued) As at 31 December 2024 Submitter: Ilirija d.d. TIN: 05951496767 Item ADP code No Notes Previous year (net) Current year (net) 1 2 3 4 5 C) LONG-TERM LIABILITIES (ADP 098 to 108) 097 12,011,845 10,156,776 1 Liabilities to undertakings within the group 098 0 0 2 Liabilities for loans, deposits, etc. of undertakings within the group 099 0 0 3 Liabilities to companies linked by virtue of participating interests 100 0 0 4 Liabilities for loans, deposits etc. of companies linked by virtue of participating interests 101 0 0 5 Liabilities for loans, deposits, etc. 102 0 0 6 Liabilities to banks and other financial institutions 103 16 12,011,845 10,156,776 7 Payables under advances 104 0 0 8 Trade payables 105 0 0 9 Liabilities for securities 106 0 0 10 Other non-current liabilities 107 0 0 11 Deferred tax liability 108 0 0 D) SHORT-TERM LIABILITIES (ADP 110 to 123) 109 5,874,339 6,161,373 1 Liabilities to undertakings within the group 110 0 38,217 2 Liabilities for loans, deposits, etc. of undertakings within the group 111 0 0 3 Liabilities to companies linked by virtue of participating interests 112 0 0 4 Liabilities for loans, deposits etc. of companies linked by virtue of participating interests 113 0 0 5 Liabilities for loans, deposits, etc. 114 0 0 6 Liabilities to banks and other financial institutions 115 16 3,183,524 3,421,118 7 Payables under advances 116 18 11,293 57,251 8 Trade payables 117 18 1,798,103 1,600,491 9 Liabilities for securities 118 0 0 10 Employee payables 119 18 365,138 379,461 11 Taxes, contributions and similar liabilities 120 18 516,281 653,103 12 Liabilities arising from the share in the result 121 18 0 11,732 13 Liabilities arising from fixed assets held for sale 122 0 0 14 Other current liabilities 123 0 0 E) ACCRUALS AND DEFERRED INCOME 124 18 405,632 390,631 F) TOTAL – LIABILITIES (ADP 067+090+097+109+124) 125 71,560,190 71,556,236 G) OFF-BALANCE SHEET ITEMS 126 0 0 225 ADDITION “STANDARD ANNUAL FINANCIAL STATEMENTS” Appendix "Standard annual financial reports" As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru Income statement of ILIRIJA d.d. for the period from 01/01/2024 to 31/12/2024 Submitter: Ilirija d.d. TIN: 05951496767 Item ADP code No Notes Previous year (net) Current year (net) 1 2 3 4 5 I OPERATING INCOME (ADP 128 to 132) 127 28,047,809 30,351,532 1 Income from sales with undertakings within the group 128 19 2,040 2,040 2 Sales revenue (outside the group) 129 19 27,846,223 30,020,381 3 Income from the use of own products, goods and services 130 20 4,455 10,643 4 Other operating income with undertakings within the group 131 0 0 5 Other operating income (outside the group) 132 20 195,091 318,468 II OPERATING EXPENSES (ADP 134+135+139+143 to 145+148+155) 133 23,730,209 25,789,728 1 Changes in inventories of work in progress and finished goods 134 0 0 2 Material costs (ADP 136 to 138) 135 8,067,820 8,838,144 a) Costs of raw materials and materials 136 21 4,046,349 4,146,301 b) Costs of goods sold 137 0 0 c) Other external costs 138 22 4,021,471 4,691,843 3 Staff costs (ADP 140 to 142) 139 23 7,893,200 8,763,885 a) Net salaries and wages 140 4,717,933 5,286,723 b) Costs of taxes and contributions from salaries 141 2,054,077 2,232,439 c) Contributions on salaries 142 1,121,190 1,244,723 4 Depreciation 143 6.7 3,239,285 3,224,408 5 Other costs 144 24 3,979,260 4,657,089 6 Value adjustments (ADP 146+147) 145 0 0 a) fixed assets other than financial assets 146 0 0 b) current assets other than financial assets 147 0 0 7 Provisions (ADP 149 to 154) 148 0 0 a) Provisions for pensions, termination benefits and similar obligations 149 0 0 b) Provisions for tax liabilities 150 0 0 c) Provisions for ongoing legal cases 151 0 0 d) Provisions for renewal of natural resources 152 0 0 e) Provisions for warranty obligations 153 0 0 f) Other provisions 154 0 0 8 Other operating expenses 155 24 550,644 306,202 226 ADDITION “STANDARD ANNUAL FINANCIAL STATEMENTS” Appendix "Standard annual financial reports" As at 31/12/2024 (All amounts are provided in Euro) ILIRIJA d.d., Biograd na Moru Income statement of ILIRIJA d.d. (continued) for the period from 01/01/2024 to 31/12/2024 Submitter: Ilirija d.d. TIN: 05951496767 Item ADP code No Notes Previous year (net) Current year (net) 1 2 3 4 5 III FINANCIAL INCOME (ADP 157 to 166) 156 25 238,931 334,461 1 Income from investments in holdings (shares) of undertakings within the group 157 0 0 2 Income from investments in holdings (shares) of companies linked by virtue of participating interests 158 0 0 3 Income from other long-term financial investment and loans granted to undertakings within the group 159 0 0 4 Other interest income from operations with undertakings within the group 160 0 0 5 Exchange rate differences and other financial income from operations with undertakings within the group 161 0 0 6 Income from other long-term financial investments and loans 162 0 0 7 Other interest income 163 238,812 334,461 8 Exchange rate differences and other financial income 164 119 0 9 Unrealised gains (income) from financial assets 165 0 0 10 Other financial revenue 166 0 0 IV FINANCIAL EXPENSES (ADP 168 to 174) 167 25 486,114 462,221 1 Interest expenses and similar expenses with undertakings within the group 168 0 0 2 Exchange rate differences and other expenses from operations with undertakings within the group 169 0 0 3 Interest expenses and similar expenses 170 478,251 448,924 4 Exchange rate differences and other expenses 171 1,286 6,437 5 Unrealised losses (expenses) from financial assets 172 0 0 6 Value adjustments of financial assets (net) 173 0 0 7 Other financial expenses 174 6,577 6,860 V SHARE IN PROFIT FROM COMPANIES LINKED BY VRITUE OF PARTICIPATING INTERESTS 175 0 0 VI SHARE IN PROFIT FROM JOINT VENTURES 176 0 0 VII SHARE IN LOSS OF COMPANIES LINKED BY VRITUE OF PARTICIPATING INTERESTS 177 0 0 VIII SHARE IN LOSS OF JOINT VENTURES 178 0 0 IX TOTAL INCOME (ADP 127+156+175+176) 179 28,286,740 30,685,993 X TOTAL EXPENDITURE (ADP 133+167+177+178) 180 24,216,323 26,251,949 XI PRE-TAX PROFIT OR LOSS (ADP 179-180) 181 4,070,417 4,434,044 1 Pre-tax profit (ADP 179-180) 182 4,070,417 4,434,044 2 Pre-tax loss (ADP 180-179) 183 0 0 XII CORPORATE INCOME TAX 184 26 790,887 857,970 XII PROFIT OR LOSS FOR THE PERIOD (ADP 181-184) 185 3,279,530 3,576,074 1 Profit for the period (ADP 181-184) 186 3,279,530 3,576,074 2 Loss for the period (ADP 184-181) 187 0 0 227 9.8 2024 ANNUAL FINANCIAL STATEMENTS 9.8 2024 ANNUAL FINANCIAL STATEMENTS Annex 1 ISSUER’S GENERAL DATA Reporting period: 01/01/2024 to 31/12/2024 Year: 2024 Annual financial statements Registration number (MB): 03311953 Issuer’s home Member State code: CROATIA Entity’s registration number (MBS): 060032302 Personal identification number (OIB): 05951496767 LEI: 74780000VOGH8Q3K5K76 Institution code: 1271 Name of the issuer: ILIRIJA d.d. BIOGRAD NA MORU Postcode and town: 23210 BIOGRAD NA MORU Street and house number: TINA UJEVIĆA 7 E-mail address: ilirija@zd.t-com.hr Web address: www.ilirijabiograd.com Number of employees (end of the reporting period):" 306 Consolidated report: KN (KN-not consolidated/KD-consolidated) A u d i t e d : RD (RN-not audited/RD-audited) Names of subsidiaries (according to IFRS): Registered office: MB: Bookkeeping firm: (Yes/No) (name of the bookkeeping firm) Contact person: ZORKA STRPIĆ (only name and surname of the contact person) Telephone: 023/383178 E-mail address: zorkas@ilirijabiograd.com Audit firm: UHY RUDAN d.o.o. ZAGREB (name of the audit firm) Certified auditor: (name and surname) 228 BALANCE SHEET Balance as at 31/12/2024 in EUR Submitter:ILIRIJA d.d. BIOGRAD NA MORU Item ADP code Last day of the preceding busi- ness year At the reporting date of the cur- rent period 1 2 3 4 A) RECEIVABLES FOR SUBSCRIBED CAPITAL UNPAID 001 0 0 B) FIXED ASSETS (ADP 003+010+020+031+036) 002 58.488.275 56.802.315 I INTANGIBLE ASSETS (ADP 004 to 009) 003 31.919 59.416 1 Research and development 004 0 0 2 Concessions, patents, licences, trademarks, software and other rights 005 0 0 3 Goodwill 006 0 0 4 Advances for the purchase of intangible assets 007 0 0 5 Intangible assets in preparation 008 0 0 6 Other intangible assets 009 31.919 59.416 II TANGIBLE ASSETS (ADP 011 to 019) 010 58.451.439 56.737.982 1 Land 011 5.894.095 5.894.095 2 Buildings 012 33.339.733 32.280.001 3 Plant and equipment 013 8.981.620 8.358.261 4 Tools, working inventory and transportation assets 014 0 0 5 Biological assets 015 0 0 6 Advances for the purchase of tangible assets 016 42.547 0 7 Tangible assets in preparation 017 205.783 389.534 8 Other tangible assets 018 0 0 9 Investment property 019 9.987.661 9.816.091 III FIXED FINANCIAL ASSETS (ADP 021 to 030) 020 4.917 4.917 1 Investments in holdings (shares) of undertakings within the group 021 4.917 4.917 2 Investments in other securities of undertakings within the group 022 0 0 3 Loans, deposits, etc. to undertakings within the group 023 0 0 4. Investments in holdings (shares) of companies linked by virtue of participating in- terests 024 0 0 5 Investment in other securities of companies linked by virtue of participating interests 025 0 0 6 Loans, deposits etc. given to companies linked by virtue of participating interests 026 0 0 7 Investments in securities 027 0 0 8 Loans, deposits, etc. given 028 0 0 9 Other investments accounted for using the equity method 029 0 0 10 Other fixed financial assets 030 0 0 IV RECEIVABLES (ADP 032 to 035) 031 0 0 1 Receivables from undertakings within the group 032 0 0 2 Receivables from companies linked by virtue of participating interests 033 0 0 3 Customer receivables 034 0 0 4 Other receivables 035 0 0 V DEFERRED TAX ASSETS 036 0 0 C) CURRENT ASSETS (ADP 038+046+053+063) 037 13.071.915 14.215.009 I INVENTORIES (ADP 039 to 045) 038 203.498 276.162 1 Raw materials and consumables 039 203.498 276.162 9.8 2024 ANNUAL FINANCIAL STATEMENTS 229 2 Work in progress 040 0 0 3 Finished goods 041 0 0 4 Merchandise 042 0 0 5 Advances for inventories 043 0 0 6 Fixed assets held for sale 044 0 0 7 Biological assets 045 0 0 II RECEIVABLES (ADP 047 to 052) 046 843.000 910.596 1 Receivables from undertakings within the group 047 0 0 2 Receivables from companies linked by virtue of participating interests 048 0 0 3 Customer receivables 049 530.351 649.011 4 Receivables from employees and members of the undertaking 050 20.399 16.458 5 Receivables from government and other institutions 051 39.082 24.824 6 Other receivables 052 253.168 220.303 III CURRENT FINANCIAL ASSETS (ADP 054 to 062) 053 12.000.000 13.000.000 1 Investments in holdings (shares) of undertakings within the group 054 0 0 2 Investments in other securities of undertakings within the group 055 0 0 3 Loans, deposits, etc. to undertakings within the group 056 0 0 4 Investments in holdings (shares) of companies linked by virtue of participating inter- ests 057 0 0 5 Investment in other securities of companies linked by virtue of participating interests 058 0 0 6 Loans, deposits etc. to companies linked by virtue of participating interests 059 0 0 7 Investments in securities 060 0 0 8 Loans, deposits, etc. given 061 12.000.000 13.000.000 9 Other financial assets 062 0 0 IV CASH AT BANK AND IN HAND 063 25.417 28.251 D ) PREPAID EXPENSES AND ACCRUED INCOME 064 0 538.912 E) TOTAL ASSETS (ADP 001+002+037+064) 065 71.560.190 71.556.236 OFF-BALANCE SHEET ITEMS 066 0 0 LIABILITIES A) CAPITAL AND RESERVES (ADP 068 to 070+076+077+081+084+087) 067 53.114.266 54.693.348 I INITIAL (SUBSCRIBED) CAPITAL 068 30.420.000 30.420.000 II CAPITAL RESERVES 069 389.195 389.195 III RESERVES FROM PROFIT (ADP 071+072-073+074+075) 070 4.975.723 4.664.642 1 Legal reserves 071 3.195.698 3.195.698 2 Reserves for treasury shares 072 925.837 925.837 3 Treasury shares and holdings (deductible item) 073 -137.207 -448.288 4 Statutory reserves 074 0 0 5 Other reserves 075 991.395 991.395 IV REVALUATION RESERVES 076 0 0 V FAIR VALUE RESERVES (ADP 078 to 080) 077 0 0 1 Financial assets at fair value through other comprehensive income (i.e. available for sale) 078 0 0 2 Cash flow hedge - effective portion 079 0 0 3 Hedge of a net investment in a foreign operation - effective portion 080 0 0 4 Other fair value reserves 081 0 0 5 Exchange differences arising from the translation of foreign operations (consolida- tion) 082 0 0 VI RETAINED PROFIT OR LOSS BROUGHT FORWARD (ADP 084-085) 083 14.049.818 15.643.437 9.8 2024 ANNUAL FINANCIAL STATEMENTS 230 1 Retained profit 084 14.049.818 15.643.437 2 Loss brought forward 085 0 0 VII PROFIT OR LOSS FOR THE BUSINESS YEAR (ADP 087-088) 086 3.279.530 3.576.074 1 Profit for the business year 087 3.279.530 3.576.074 2 Loss for the business year 088 0 0 VIII MINORITY (NON-CONTROLLING) INTEREST 089 0 0 B) PROVISIONS (ADP 091 to 096) 090 154.108 154.108 1 Provisions for pensions, termination benefits and similar obligations 091 0 0 2 Provisions for tax liabilities 092 0 0 3 Provisions for ongoing legal cases 093 154.108 154.108 4 Provisions for renewal of natural resources 094 0 0 5 Provisions for warranty obligations 095 0 0 6 Other provisions 096 0 0 C) LONG-TERM LIABILITIES (ADP 098 to 108) 097 12.011.845 10.156.776 1 Liabilities towards undertakings within the group 098 0 0 2 Liabilities for loans, deposits, etc. to companies within the group 099 0 0 3 Liabilities towards companies linked by virtue of participating interest 100 0 0 4 Liabilities for loans, deposits etc. of companies linked by virtue of participating in- terest 101 0 0 5 Liabilities for loans, deposits etc. 102 0 0 6 Liabilities towards banks and other financial institutions 103 12.011.845 10.156.776 7 Liabilities for advance payments 104 0 0 8 Liabilities towards suppliers 105 0 0 9 Liabilities for securities 106 0 0 10 Other long-term liabilities 107 0 0 11 Deferred tax liability 108 0 0 D) SHORT-TERM LIABILITIES (ADP 110 to 123) 109 6.028.447 6.315.481 1 Liabilities towards undertakings within the group 110 0 38.217 2 Liabilities for loans, deposits, etc. to companies within the group 111 0 0 3 Liabilities towards companies linked by virtue of participating interest 112 0 0 4 Liabilities for loans, deposits etc. of companies linked by virtue of participating in- terest 113 0 0 5 Liabilities for loans, deposits etc. 114 0 0 6 Liabilities towards banks and other financial institutions 115 3.183.524 3.421.118 7 Liabilities for advance payments 116 11.293 57.251 8 Liabilities towards suppliers 117 1.798.103 1.600.491 9 Liabilities for securities 118 0 0 10 Liabilities towards employees 119 365.138 379.461 11 Taxes, contributions and similar liabilities 120 516.281 653.103 12 Liabilities arising from the share in the result 121 0 11.732 13 Liabilities arising from fixed assets held for sale 122 0 0 14 Other short-term liabilities 123 0 0 E) ACCRUALS AND DEFERRED INCOME 124 405.632 390.631 F) TOTAL – LIABILITIES (ADP 067+090+097+109+124) 125 71.560.190 71.556.236 G) OFF-BALANCE SHEET ITEMS 126 0 0 9.8 2024 ANNUAL FINANCIAL STATEMENTS 231 STATEMENT OF PROFIT OR LOSS for the period 01/01/2024 to 30/09/2024 in EUR Submitter: ILIRIJA d.d. Item ADP code Same period of the previous year Current period 1 2 3 4 I OPERATING INCOME (ADP 002 to 006) 001 28.047.809 30.351.532 1 Income from sales with undertakings within the group 002 2.040 2.040 2 Income from sales (outside group) 003 27.846.223 30.020.381 3 Income from the use of own products, goods and services 004 4.455 10.643 4 Other operating income with undertakings within the group 005 0 0 5 Other operating income (outside the group) 006 195.091 318.468 II OPERATING EXPENSES (ADP 08+009+013+017+018+019+022+029) 007 23.730.209 25.789.728 1 Changes in inventories of work in progress and finished goods 008 0 0 2 Material costs (ADP 010 to 012) 009 8.067.820 8.838.144 a) Costs of raw materials and consumables 010 4.046.349 4.146.301 b) Costs of goods sold 011 0 0 c) Other external costs 012 4.021.471 4.691.843 3 Staff costs (ADP 014 to 016) 013 7.893.200 8.763.885 a) Net salaries and wages 014 4.717.933 5.286.723 b) Tax and contributions from salary costs 015 2.054.077 2.232.439 c) Contributions on salaries 016 1.121.190 1.244.723 4 Depreciation 017 3.239.285 3.224.408 5 Other costs 018 3.979.260 4.657.089 6 Value adjustments (ADP 020+021) 019 0 0 a) fixed assets other than financial assets 020 0 0 b) current assets other than financial assets 021 0 0 7 Provisions (ADP 023 to 028) 022 0 0 a) Provisions for pensions, termination benefits and similar obligations 023 0 0 b) Provisions for tax liabilities 024 0 0 c) Provisions for ongoing legal cases 025 0 0 d) Provisions for renewal of natural resources 026 0 0 e) Provisions for warranty obligations 027 0 0 f) Other provisions 028 0 0 8 Other operating expenses 029 550.644 306.202 III FINANCIAL INCOME (ADP 031 to 040) 030 238.931 334.461 1 Income from investments in holdings (shares) of undertakings within the group 031 0 0 2 Income from investments in holdings (shares) of companies linked by virtue of participating interests 032 0 0 3 Income from other long-term financial investment and loans granted to undertakings within the group 033 0 0 4 Other interest income from operations with undertakings within the group 034 0 0 5 Exchange rate differences and other financial income from operations with undertakings within the group 035 0 0 6 Income from other long-term financial investments and loans 036 0 0 7 Other interest income 037 238.812 334.461 8 Exchange rate differences and other financial income 038 119 0 9 Unrealised gains (income) from financial assets 039 0 0 10 Other financial income 040 0 0 IV FINANCIAL EXPENSES (ADP 042 to 048) 041 486.114 462.221 1 Interest expenses and similar expenses with undertakings within the group 042 0 0 2 Exchange rate differences and other expenses from operations with undertakings within the group 043 0 0 3 Interest expenses and similar expenses 044 478.251 448.924 4 Exchange rate differences and other expenses 045 1.286 6.437 5 Unrealised losses (expenses) from financial assets 046 0 0 6 Value adjustments of financial assets (net) 047 0 0 9.8 2024 ANNUAL FINANCIAL STATEMENTS 232 7 Other financial expenses 048 6.577 6.860 V SHARE IN PROFIT FROM UNDERTAKINGS LINKED BY VRITUE OF PARTICIPATING INTERESTS 049 0 0 VI SHARE IN PROFIT FROM JOINT VENTURES 050 0 0 VII SHARE IN LOSS OF COMPANIES LINKED BY VIRTUE OF PARTICIPATING INTEREST 051 0 0 VIII SHARE IN LOSS OF JOINT VENTURES 052 0 0 IX TOTAL INCOME (ADP 001+030+049 +050) 053 28.286.740 30.685.993 X TOTAL EXPENDITURE (ADP 007+041+051 + 052) 054 24.216.323 26.251.949 XI PRE-TAX PROFIT OR LOSS (ADP 053-054) 055 4.070.417 4.434.044 1 Pre-tax profit (ADP 053-054) 056 4.070.417 4.434.044 2 Pre-tax loss (ADP 054-053) 057 0 0 XII INCOME TAX 058 790.887 857.970 XIII PROFIT OR LOSS FOR THE PERIOD (ADP 055-059) 059 3.279.530 3.576.074 1 Profit for the period (ADP 055-059) 060 3.279.530 3.576.074 2 Loss for the period (ADP 059-055) 061 0 0 DISCONTINUED OPERATIONS (to be filled in by undertakings subject to IFRS only with discontinued operations) XIV PRE-TAX PROFIT OR LOSS OF DISCONTINUED OPERATIONS (ADP 063-064) 062 0 0 1 Pre-tax profit from discontinued operations 063 0 0 2 Pre-tax loss on discontinued operations 064 0 0 XV INCOME TAX OF DISCONTINUED OPERATIONS 065 0 0 1 Discontinued operations profit for the period (ADP 062-065) 066 0 0 2 Discontinued operations loss for the period (ADP 065-062) 067 0 0 TOTAL OPERATIONS (to be filled in only by undertakings subject to IFRS with discontinued operations) XVI PRE-TAX PROFIT OR LOSS (ADP 055-+062) 068 0 0 1 Pre-tax profit (ADP 068) 069 0 0 2 Pre-tax loss (ADP 068) 070 0 0 XVII INCOME TAX (ADP 058+065) 071 0 0 XVIII PROFIT OR LOSS FOR THE PERIOD (ADP 068-071) 072 0 0 1 Profit for the period (ADP 068-071) 073 0 0 2 Loss for the period (ADP 071-068) 074 0 0 APPENDIX to the P&L (to be filled in by undertakings that draw up consolidated annual financial statements) XIX PROFIT OR LOSS FOR THE PERIOD (ADP 076+077) 075 0 0 1 Attributable to owners of the parent 076 0 0 2 Attributable to minority (non-controlling) interest 077 0 0 STATEMENT OF OTHER COMPRHENSIVE INCOME (to be filled in by undertakings subject to IFRS) I PROFIT OR LOSS FOR THE PERIOD 078 3.279.530 3.576.074 II OTHER COMPREHENSIVE INCOME/LOSS BEFORE TAX (ADP 80+ 87) 079 0 0 III Items that will not be reclassified to profit or loss (ADP 081 to 085) 080 0 0 1 Changes in revaluation reserves of fixed tangible and intangible assets 081 0 0 2 Gains or losses from subsequent measurement of equity instruments at fair value through other comprehensive income 082 0 0 3 Fair value changes of financial liabilities at fair value through statement of profit or loss, attributable to changes in their credit risk 083 0 0 4 Actuarial gains/losses on the defined benefit obligation 084 0 0 5 Other items that will not be reclassified 085 0 0 6 Income tax relating to items that will not be reclassified 086 0 0 IV Items that may be reclassified to profit or loss (ADP 088 to 095) 087 0 0 1 Exchange rate differences from translation of foreign operations 088 0 0 2 Gains or losses from subsequent measurement of debt securities at fair value through other comprehensive income 089 0 0 3 Profit or loss arising from effective cash flow hedging 090 0 0 4 Profit or loss arising from effective hedge of a net investment in a foreign operation 091 0 0 5 Share in other comprehensive income/loss of companies linked by virtue of participating interests 092 0 0 9.8 2024 ANNUAL FINANCIAL STATEMENTS 233 6 Changes in fair value of the time value of option 093 0 0 7 Changes in fair value of forward elements of forward contracts 094 0 0 8 Other items that may be reclassified to profit or loss 095 0 0 9 Income tax relating to items that may be reclassified to profit or loss 096 0 0 V NET OTHER COMPREHENSIVE INCOME OR LOSS (ADP 080+087- 086 - 096) 097 0 0 VI COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD (ADP 078+097) 098 3.279.530 3.576.074 APPENDIX to the Statement on comprehensive income (to be filled in by undertakings that draw up consolidated statements) VI COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD (ADP 100+101) 099 0 0 1 Attributable to owners of the parent 100 0 0 2 Attributable to minority (non-controlling) interest 101 0 0 9.8 2024 ANNUAL FINANCIAL STATEMENTS 234 STATEMENT OF CASH FLOWS - indirect method for the period 01/01/2024 to 31/12/2024 in EUR Submitter: ILIRIJA d.d. BIOGRAD NA MORU Item ADP code Same period of the previous year Current period 1 2 3 4 Cash flow from operating activities 1 Pre-tax profit 001 4.070.417 4.434.044 2 Adjustments (ADP 003 to 010): 002 3.615.828 3.337.928 a) Depreciation 003 3.239.285 3.224.408 b) Gains and losses from sale and value adjustment of fixed tangible and intangible assets 004 -11.421 -25.187 c) Gains and losses from sale and unrealised gains and losses and value adjustment of financial assets 005 0 0 d) Interest and dividend income 006 -238.812 -334.461 e) Interest expenses 007 478.251 455.360 f) Provisions 008 0 0 g) Exchange rate differences (unrealised) 009 1.168 0 h) Other adjustments for non-cash transactions and unrealised gains and losses 010 147.357 413.122 I Cash flow increase or decrease before changes in working capital (ADP 001+002) 011 7.686.245 8 .167.286 3 Changes in the working capital (ADP 013 to 016) 012 251.967 -82.061 a) Increase or decrease in short-term liabilities 013 133.993 49.440 b) Increase or decrease in short-term receivables 014 131.699 -58.837 c) Increase or decrease in inventories 015 -13.725 -72.664 d) Other increase or decrease in working capital 016 0 0 II Cash from operations (ADP 011+012) 017 7.938.212 8.085.225 4 Interest paid 018 -490.376 -455.360 5 Income tax paid 019 -942.641 -866.728 A) NET CASH FLOW FROM OPERATING ACTIVITIES (ADP 017 to 019) 020 6.505.195 6.763.137 Cash flow from investment activities 1 Cash receipts from sales of fixed tangible and intangible assets 021 0 0 2 Cash receipts from sales of financial instruments 022 0 0 3 Interest received 023 127.920 334.461 4 Dividends received 024 0 0 5 Cash receipts from repayment of loans and deposits 025 0 0 6 Other cash receipts from investment activities 026 0 0 III Total cash receipts from investment activities (ADP 021 to 026) 027 127.920 334.461 1 Cash payments for the purchase of fixed tangible and intangible assets 028 -3.475.895 -1.593.128 2 Cash payments for the acquisition of financial instruments 029 0 0 3 Cash payments for loans and deposits for the period 030 -1.328.416 -1.000.000 4 Acquisition of a subsidiary, net of cash acquired 031 0 0 5 Other cash payments from investment activities 032 0 0 IV Total cash payments from investment activities (ADP 028 to 032) 033 -4.804.311 -2.593.128 B) NET CASH FLOW FROM INVESTMENT ACTIVITIES (ADP 027 +033) 034 -4.676.391 -2.258.667 Cash flow from financing activities 1 Cash receipts from the increase in initial (subscribed) capital 035 0 0 2 Cash receipts from the issue of equity financial instruments and debt financial instru- ments 036 0 0 3 Cash receipts from credit principals, loans and other borrowings 037 2.592.181 1.400.000 9.8 2024 ANNUAL FINANCIAL STATEMENTS 235 4 Other cash receipts from financing activities 038 291.408 0 V Total cash receipts from financing activities (ADP 035 to 038) 039 2.883.589 1.400.000 1 Cash payments for the repayment of credit principals, loans and other borrowings and debt financial instruments 040 -2.499.865 -2.882.645 2 Cash payments for dividends 041 -1.319.601 -1.684.806 3 Cash payments for finance lease 042 -769.210 -1.023.104 4 Cash payments for the redemption of treasury shares and decrease in initial (subscribed) capital 043 -199.279 -311.081 5 Other cash payments from financing activities 044 0 0 VI Total cash payments from financing activities (ADP 040 to 044) 045 - 4.787.955 -5.901.636 C) NET CASH FLOW FROM FINANCING ACTIVITIES (ADP 039 +045) 046 -1.904.366 -4.501.636 1 Unrealised exchange rate differences in respect of cash and cash equivalents 047 0 0 D) NET INCREASE OR DECREASE IN CASH FLOWS (ADP 020+034+046+047) 048 -75.562 2.834 E) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 049 100.979 25.417 F) CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD (ADP 048+049) 050 25.417 28.251 9.8 2024 ANNUAL FINANCIAL STATEMENTS 236 STATEMENT OF CASH FLOWS - Direct method for the period 01/01/2024 to 31/12/2024 in EUR Submitter: ILIRIJA d.d. BIOGRAD NA MORU Item ADP code Same period of the previous year Current period 1 2 3 4 Cash flow from operating activities 1 Cash receipts from customers 001 0 0 2 Cash receipts from royalties, fees, commissions and other revenue 002 0 0 3 Cash receipts from insurance premiums 003 0 0 4 Cash receipts from tax refund 004 0 0 5 Cash payments to suppliers 005 0 0 6 Cash payments to employees 006 0 0 7 Cash payments for insurance premiums 007 0 0 8 Other cash receipts and payments 008 0 0 I Cash from operations (ADP 001 to 008) 009 0 0 9 Interest paid 010 0 0 10 Income tax paid 011 0 0 A) NET CASH FLOW FROM OPERATING ACTIVITIES (ADP 009 to 011) 012 0 0 Cash flow from investment activities 1 Cash receipts from sales of fixed tangible and intangible assets 013 0 0 2 Cash receipts from sales of financial instruments 014 0 0 3 Interest received 015 0 0 4 Dividends received 016 0 0 5 Cash receipts from repayment of loans and deposits 017 0 0 6 Other cash receipts from investment activities 018 0 0 II Total cash receipts from investment activities (ADP 013 to 018) 019 0 0 1 Cash payments for the purchase of fixed tangible and intangible assets 020 0 0 2 Cash payments for the acquisition of financial instruments 021 0 0 3 Cash payments for loans and deposits 022 0 0 4 Acquisition of a subsidiary, net of cash acquired 023 0 0 5 Other cash payments from investment activities 024 0 0 III Total cash payments from investment activities (ADP 020 to 024) 025 0 0 B) NET CASH FLOW FROM INVESTMENT ACTIVITIES (ADP 019 + 025) 026 0 0 Cash flow from financing activitie Cash receipts from the increase of initial (subscribed) capital 027 0 0 2 Cash receipts the from issue of equity financial instruments and debt financial instru- ments 028 0 0 3 Cash receipts from credit principals, loans and other borrowings 029 0 0 4 Other cash receipts from financing activities 030 0 0 IV Total cash receipts from financing activities (ADP 027 to 030) 031 0 0 1 Cash payments for the repayment of credit principals, loans andother borrowings and debt financial instruments 032 0 0 2 Cash payments for dividends 033 0 0 3 Cash payments for finance lease 034 0 0 4 Cash payments for the redemption of treasury shares and decrease of initial (sub- scribed) capital 035 0 0 5 Other cash payments from financing activities 036 0 0 9.8 2024 ANNUAL FINANCIAL STATEMENTS 237 V Total cash payments from financing activities (ADP 032 to 036) 037 0 0 C) NET CASH FLOW FROM INVESTMENT ACTIVITIES (ADP 031 +037) 038 0 0 1 Unrealised exchange rate differences in cash and cash equivalents 039 0 0 D) NET INCREASE OR DECREASE OF CASH FLOWS (ADP 012+026+038+039) 040 0 0 E) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF PERIOD 041 0 0 F) CASH AND CASH EQUIVALENTS AT THE END OF PERIOD(ADP 040+041) 042 0 0 9.8 2024 ANNUAL FINANCIAL STATEMENTS 238 STATEMENT OF CHANGES IN EQUITY for the period from 01/01/2024 to 31/12/2024 in EUR Item ADP code Attributable to owners of the parent Minority (non-controlling) interest Total capital and reserves Initial (subscri- bed) capital Capital reserves Legal reserves Reserves for treasury shares Treasury shares and holdings (deductible item) Statutory reserves Other reserves Revaluation reserves Fair value of financial assets through other comprehensive income (availa- ble for sale) Cash flow hed- ge - effective portion Hedge of a net investment in a foreign opera- tion - effective portion Other fair value reserves Exchange rate differences from transla- tion of foreign operations Retained profit / loss brought forward Profit/loss for the business year Total attributa- ble to owners of the parent 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 (3 do 6 - 7 + 8 do 17) 19 20 (18+19) Previous period 1 Balance on the first day of the previous business year 01 30.412.964 389.195 3.195.698 925.837 229.335 0 998.431 0 0 0 0 0 0 15.373.527 3.279.530 54.345.847 0 54.345.847 2 Changes in accounting policies 02 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 3 Correction of errors 03 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 4 Balance on the first day of the previous business year (restated) (ADP 01 to 03) 04 30.412.964 389.195 3.195.698 925.837 229.335 0 998.431 0 0 0 0 0 0 15.373.527 3.279.530 54.345.847 0 54.345.847 5 Profit/loss of the period 05 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 6 Exchange rate differences from translation of foreign operations 06 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 7 Changes in revaluation reserves of fixed tangible and intangible assets 07 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 8 Gains or losses from subsequent measurement of financial assets at fair value through other comprehensive income (available for sale) 08 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 9 Gains or losses on efficient cash flow hedging 09 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10 Gains or losses arising from effective hedge of a net investment in a foreign operation 10 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 11 Share in other comprehensive income/loss of companies linked by virtue of participating interest 11 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 12 Actuarial gains/losses on defined benefit plans 12 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 13 Other changes in equity unrelated to owners 13 7.036 0 0 0 0 0 -7.036 0 0 0 0 0 0 0 0 0 0 0 14 Tax on transactions recognised directly in equity 14 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 15 Increase/decrease in initial (subscribed) capital (other than from reinvesting profit and other than arising from the pre-bankruptcy settlement procedure) 15 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 16 Decrease in initial (subscribed) capital arising from the pre-bankruptcy settle- ment procedure 16 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 17 Decrease in initial (subscribed) capital arising from the reinvestment of profit 17 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 18 Redemption of treasury shares/holdings 18 0 0 0 0 199.279 0 0 0 0 0 0 0 0 0 0 -199.279 0 -199.279 19 Payments from members/shareholders 19 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 20 Payment of share in profit/dividend 20 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -1.323.709 -1.323.709 0 -1.323.709 21 Other distributions and payments to members/shareholders 21 0 0 0 0 -291.407 0 0 0 0 0 0 0 0 1.794.046 -1.794.046 291.407 0 291.407 22 Transfer to reserves according to the annual schedule 22 0 0 0 0 0 0 0 0 0 0 0 0 0 -3.117.754 3.117.754 0 0 0 23 Increase in reserves arising from the pre-bankruptcy settlement procedure 23 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 24 Balance on the last day of the previous business year reporting period (ADP 04 to 23) 24 30.420.000 389.195 3.195.698 925.837 137.207 0 991.395 0 0 0 0 0 0 14.049.819 3.279.529 53.114.266 0 53.114.266 APPENDIX TO THE STATEMENT OF CHANGES IN EQUITY (to be filled in by undertakings that draw up financial statements in accordance with the IFRS) I OTHER COMPREHENSIVE INCOME OF THE PREVIOUS PERIOD, NET OF TAX (ADP 06 to 14) 25 7.036 0 0 0 0 0 -7.036 0 0 0 0 0 0 0 0 0 0 0 II COMPREHENSIVE INCOME OR LOSS FOR THE PREVIOUS PERIOD (ADP 05+25) 26 7.036 0 0 0 0 0 -7.036 0 0 0 0 0 0 0 0 0 0 0 III TRANSACTIONS WITH OWNERS IN THE PREVIOUS PERIOD RECOGNISED DIRE- CTLY IN EQUITY (ADP 15 to 23) 27 0 0 0 0 -92.128 0 0 0 0 0 0 0 0 -1.323.708 -1 -1.231.581 0 -1.231.581 9.8 2024 ANNUAL FINANCIAL STATEMENTS 239 Current period 1 Balance on the first day of the current business year 28 30.420.000 389.195 3.195.698 925.837 137.207 0 991.395 0 0 0 0 0 0 17.329.348 0 53.114.266 0 53.114.266 2 Changes in accounting policies 29 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 3 Correction of errors 30 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 4 Balance on the first day of the current business year (restated) (AOP 28 to 30) 31 30.420.000 389.195 3.195.698 925.837 137.207 0 991.395 0 0 0 0 0 0 17.329.348 0 53.114.266 0 53.114.266 5 Profit/loss of the period 32 0 0 0 0 0 0 0 0 0 0 0 0 0 0 3.576.074 3.576.074 0 3.576.074 6 Exchange rate differences from translation of foreign operations 33 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 7 Changes in revaluation reserves of fixed tangible and intangible assets 34 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 8 Gains or losses from subsequent measurement of financial assets at fair value through other comprehensive income (available for sale) 35 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 9 Gains or losses on efficient cash flow hedging 36 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10 Gains or losses arising from effective hedge of a net investment in a foreign operation 37 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 11 Share in other comprehensive income/loss of companies linked by virtue of participating interest 38 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 12 Actuarial gains/losses on defined remuneration plans 39 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 13 Other changes in equity unrelated to owners 40 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 14 Tax on transactions recognised directly in equity 41 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 15 Decrease in initial (subscribed) capital (other than arising from the pre-ban- kruptcy settlement procedure or from the reinvestment of profit) 42 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 16 Decrease in initial (subscribed) capital arising from the pre-bankruptcy settle- ment procedure 43 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 17 Increase of initial (subscribed) capital arising from the pre-bankruptcy settle- ment procedure 44 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 18 Redemption of treasury shares/holdings 45 0 0 0 0 311.081 0 0 0 0 0 0 0 0 0 0 -311.081 0 -311.081 19 Payments from members/shareholders 46 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 20 Payment of share in profit/dividend 47 0 0 0 0 0 0 0 0 0 0 0 0 0 -1.685.911 0 -1.685.911 0 -1.685.911 21 Other distributions and payments to members/shareholders 48 0 0 0 0 0 0 0 0 0 0 0 0 0 3.279.530 0 3.279.530 0 3.279.530 22 Carryforward per annual plan 49 0 0 0 0 0 0 0 0 0 0 0 0 0 -3.279.530 0 -3.279.530 0 -3.279.530 23 Increase in reserves arising from the pre-bankruptcy settlement procedure 50 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 24 Balance on the last day of the current business year reporting period (ADP 31 to 50) 51 30.420.000 389.195 3.195.698 925.837 448.288 0 991.395 0 0 0 0 0 0 15.643.437 3.576.074 54.693.348 0 54.693.348 APPENDIX TO THE STATEMENT OF CHANGES IN EQUITY (to be filled in by undertakings that draw up financial statements in accordance with the IFRS) I OTHER COMPREHENSIVE INCOME FOR THE CURRENT PERIOD, NET OF TAX (ADP 33 to 41) 52 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 II COMPREHENSIVE INCOME OR LOSS FOR THE CURRENT PERIOD (ADP 32 do 52) 53 0 0 0 0 0 0 0 0 0 0 0 0 0 0 3.576.074 3.576.074 0 3.576.074 III TRANSACTIONS WITH OWNERS IN THE CURRENT PERIOD RECOGNISED DIRE- CTLY IN EQUITY (ADP 42 to 50) 54 0 0 0 0 311.081 0 0 0 0 0 0 0 0 -1.685.911 0 -1.996.992 0 -1.996.992 9.8 2024 ANNUAL FINANCIAL STATEMENTS 240 ILIRIJA d.d. BIOGRAD NA MORU Biograd na Moru, 12/02/2024 Statement made by the persons responsible for the preparation of the financial statements for the period from 01/01/2024–31/12/2024 According to Article 403-410 of the Capital Market Act, we declare that: Financial statements of Ilirija d.d., Biograd na Moru, Tina Ujevića 7, Tax No. OIB: 05951496767, for the period January - December of 2024 have been prepared in accordance with International Finan- cial Reporting Standards and Croatian Accounting Act. The financial statements give a true and fair view of the financial position of the Company as at 31/12/2024, operating results and cash flows of the Company in accordance with International Fi- nancial Reporting Standards. The Management’s Report gives a true overview of operating results and position of the Company as at 31/12/2024. Financial statements for the period form 01/1/2024 - 31/12/2024 are audited. Accounting Manager:: Management Board: Zorka Strpić Goran Ražnjević 9.9 STATEMENTS BY THE COMPANY REPRESENTATION 9.9 STATEMENTS BY THE COMPANY REPRESENTATION 241 9.10 DECISION ON CREATING THE ANNUAL FINANCIAL STATEMENTS 9.10 DECISION ON CREATING THE ANNUAL FINANCIAL STATEMENTS Tel: Centrala ++385 23 383 165; Fax: ++385 23 384 564; Prodaja: ++385 23 383 556; sales@ilirijabiograd.com; www.ilirijabiograd.com ILIRIJA d.d. za ugostiteljstvo i turizam, Tina Ujevića 7, Biograd n/M, Trgovački sud u Zadru, MBS: 060032302, Matični broj: 3311953, OIB (PIN): 05951496767; Account: ERSTE & STEIERMARKISCHE BANK d.d. – RIJEKA IBAN: HR5824020061100097324. Share capital: EUR 30,420,000.00, paid in full. Number of shares issued: 2.413.488, bez nominalnog iznosa. Uprava: G. Ražnjević, President of the Supervisory Board: G. Medić MANAGEMENT BOARD Number: 18/2025 In Biograd na Moru, 26 February 2025 Pursuant to Articles 250a, 300a and 300b of the Companies Act (“Official Gazette” No 152/11 – consolidated text, 111/12, 68/13, 110/15, 40/19, 34/22, 114/22, 18/23,130/23 and 136/24), Articles 462 and 463 of the Capital Market Act, the Management Board of ILIRIJA d.d. Biograd na moru, Tina Ujevića 7, Biograd na Moru, PIN: 05951496767 (hereinafter: the Company) on 26 February 2025 adopted the following DECISION ON CREATING THE ANNUAL FINANCIAL STATEMENTS AND DRAFT DECISION ON UTILIZATION OF PROFIT I. The Company’s Management Board hereby creates the Annual Financial Statements of the Company for 2024 (non-consolidated) consisting of the following: - Statement of Financial Position (balance sheet); - Income Statement; - Statement of Comprehensive Income; - Cash Flow Statement; - Statement of Changes in Equity; and - Notes to the Financial Statements. II. The 2024 Annual Financial Statements of the Company were reviewed by the selected audit company UHY Rudan d.o.o., Ilica 213, Zagreb (hereinafter: the Auditor) and the Auditor’s Report forms an integral part of the 2024 Annual Financial Statements of the Company. III. The Company’s Management Board hereby creates the 2024 Annual Statement of the Company (non-consolidated) consisting of the following: 1. 2024 Annual Financial Statements of the Company (non-consolidated); 2. Report on the Application of Corporate Governance Code 3. Management Report / Management Board Annual Report on the Company’s Status 4. Statements by the Company Representation; 5. Company’s auditor report for 2024 IV. The Company Management Board hereby defines the Decision on Proposed Profit Allocation for 2024 in the total amount of: EUR 3,576,074.33, so the profit shall be allocated as follows: EUR 1,655,334.33 into the retained profit, and EUR 1,920,740.00 for dividend distribution. 242 9.10 DECISION ON CREATING THE ANNUAL FINANCIAL STATEMENTS Tel: Centrala ++385 23 383 165; Fax: ++385 23 384 564; Prodaja: ++385 23 383 556; sales@ilirijabiograd.com; www.ilirijabiograd.com ILIRIJA d.d. za ugostiteljstvo i turizam, Tina Ujevića 7, Biograd n/M, Trgovački sud u Zadru, MBS: 060032302, Matični broj: 3311953, OIB (PIN): 05951496767; Account: ERSTE & STEIERMARKISCHE BANK d.d. – RIJEKA IBAN: HR5824020061100097324. Share capital: EUR 30,420,000.00, paid in full. Number of shares issued: 2.413.488, bez nominalnog iznosa. Uprava: G. Ražnjević, President of the Supervisory Board: G. Medić V. This Decision, along with the 2024 Annual Financial Statement of the Company (non- consolidated), shall be referred to the Supervisory Board of the Company for consideration, i.e. approval. VI. The Company Management Board shall convene the General Assembly of the Company following the approval of the 2024 Annual Financial Statements of the Company and adoption of related corresponding decisions by its Supervisory Board. ILIRIJA d.d. Supervisory Board Goran Ražnjević ___ 243 9.11 DECISION ON APPROVING THE ANNUAL FINANCIAL STATEMENTS 9.11 DECISION ON APPROVING THE ANNUAL FINANCIAL STATEMENTS Tel: Centrala ++385 23 383 165; Fax: ++385 23 384 564; Prodaja: ++385 23 383 556; sales@ilirijabiograd.com; www.ilirijabiograd.com ILIRIJA d.d. za ugostiteljstvo i turizam, Tina Ujevića 7, Biograd n/M, Trgovački sud u Zadru, MBS: 060032302, Matični broj: 3311953., OIB (PIN): 05951496767; Account: ERSTE & STEIERMARKISCHE BANK d.d. – RIJEKA IBAN: HR5824020061100097324. Share capital: EUR 30,420,000.00, paid in full. Number of shares issued: 2.413.488, bez nominalnog iznosa. Uprava: G. Ražnjević, President of the Supervisory Board: G. Medić SUPERVISORY BOARD Number: 19/2025 In Biograd na Moru, 26 February 2025 Pursuant to Articles 300c and 300d of the Companies Act (“Official Gazette” No 152/11 – consolidated text, 111/12, 68/13, 110/15, 40/19, 34/22, 114/22, 18/23, 130/23 and 136/24) and the Management Board Decision No: 18/2025 of 26 February 2025, the Supervisory Board of ILIRIJA d.d., at its session held on 26 February 2025, adopted the following: DECISION ON APPROVING THE ANNUAL FINANCIAL STATEMENTS AND THE DRAFT DECISION ON UTILIZATION OF PROFIT I. The Company Supervisory Board hereby approves the 2024 Annual Statement of the Company (non-consolidated) consisting of the following: 1. 2024 Annual Financial Statements of the Company (non-consolidated) – statement of financial position (balance sheet), income statement, statement of comprehensive income, cash flow statement, statement of changes in equity and notes to the financial statements 2. Statement on the Application of Corporate Governance Code 3. Management Report / Management Board Annual Report on the Company’s Status 4. Statements by the Company Representation; 5. Company’s auditor report for 2024 II. Following the approval by the 2024 Annual Statement of the Company (non-consolidated) by its Supervisory Board, the 2024 Annual Financial Statements of the Company are deemed created by the Company Management Board and Supervisory Board. III. The Company Supervisory Board agrees with the proposal of the Company Management Board that the General Assembly of the Company adopt the decision on the allocation of the net profit generated in 2024 in the total amount of EUR 3,576,074.33 as follows: - EUR 1,655,334.33 into the retained profit, - EUR 1,920,740.00 for dividend distribution. President of the Supervisory Board Goran Medić ___ 244 9.12. SUPERVISORY BOARD’S REPORT ON PERFORMED SUPERVISION 9.12 SUPERVISORY BOARD'S REPORT ON PERFORMED SUPERVISION OF CONDUCTING THE COMPANY'S BUSINESS FOR THE YEAR 2024 Tel: Centrala ++385 23 383 165; Fax: ++385 23 384 564; Prodaja: ++385 23 383 556; sales@ilirijabiograd.com; www.ilirijabiograd.com ILIRIJA d.d. za ugostiteljstvo I turizam, Tina Ujevića 7, Biograd n/M, Trgovački sud u Zadru, MBS: 060032302, Matični broj:3311953., OIB: 05951496767; račun: ERSTE & STEIERMARKISCHE BANK d.d. – RIJEKA IBAN: HR5824020061100097324. Temeljni kapital: 30.420.000,00 Eura, uplaćen u cijelosti. Broj izdanih dionica: 2.413.488, bez nominalnog iznosa. Uprava: G. Ražnjević, Predsjednik Nadzornog odbora: G. Medić SUPERVISORY BOARD Number: 16/2025 According to Article 263, paragraph 3, Article 300.c and Article 499 of the Companies’ Act (Official Gazette no. 111/1993, 34/1999, 121/1999, 52/2000, 118/2003, 107/2007, 146/2008, 137/2009, 111/2012, 125/2011, 68/2013, 110/2015, 40/2019,34/22,114/22, 18/23, 130/23 and 136/24 – hereinafter referred to as: the Companies’ Act), the Supervisory Board of the company Ilirija d.d. for hospitality and tourism, Tina Ujevića 7, Biograd na Moru (hereinafter referred to as: the Company), has adopted the following SUPERVISORY BOARD’S REPORT ON PERFORMED SUPERVISION OF CONDUCTING THE COMPANY’S BUSINESS FOR THE YEAR 2024 I. The Supervisory Board of the Company was constituted on 22nd December, 1995 and has five (5) members elected for a term of 4 (four) years. The Members of the Supervisory Board as of 31st December, 2024 were: Goran Medić (President), David Anthony Tudorović (Deputy President), Davor Tudorović, Siniša Petrović and Darko Prebežac. II. During the year 2024, 7 (seven) meetings of the Supervisory Board were held. All members of the Supervisory Board participated in the meetings of the Supervisory Board. During 2024, the Supervisory Board regularly received written reports on the business operations and other reports, including Management Board's Decisions, reviewed by the Supervisory Board in accordance with regulations, the Articles of Association and the Company's bylaws. The Supervisory Board also discussed the business plans and reports on the Company's business operations, as well as information about the current business operations and the position of the Company. At the meeting held on 26 th February, 2024, the Supervisory Board approved, among other things, the Annual Report and the Annual Financial Statements of the Company for the year 2023 (audited, unconsolidated), adopted the Report on remuneration received by the members of the Supervisory Board and Management Board for the year 2023, the Report on Transactions with Related Companies for the year 2023, determined the draft decision on granting approval to the Management Board for the acquisition of treasury shares, made the decision on approval of the current Remuneration Policy for the members of the Management Board, and made other decisions related to the Annual General Shareholders’ Assembly of the Company. At the meeting held on 26 th April, 2024, the Supervisory Board approved , among other things, the Corporate Governance Code for the year 2023 (Compliance Questionnaire for Issuers of Shares, Governance Practices Questionnaire) At the meeting held on 24 th July, 2024, the Supervisory Board received, among other things, the information regarding the publicly published Sustainability Annual Report of Ilirija d.d. for year 2023. 245 9.12. SUPERVISORY BOARD’S REPORT ON PERFORMED SUPERVISION Tel: Centrala ++385 23 383 165; Fax: ++385 23 384 564; Prodaja: ++385 23 383 556; sales@ilirijabiograd.com; www.ilirijabiograd.com ILIRIJA d.d. za ugostiteljstvo I turizam, Tina Ujevića 7, Biograd n/M, Trgovački sud u Zadru, MBS: 060032302, Matični broj:3311953., OIB: 05951496767; račun: ERSTE & STEIERMARKISCHE BANK d.d. – RIJEKA IBAN: HR5824020061100097324. Temeljni kapital: 30.420.000,00 Eura, uplaćen u cijelosti. Broj izdanih dionica: 2.413.488, bez nominalnog iznosa. Uprava: G. Ražnjević, Predsjednik Nadzornog odbora: G. Medić At the meeting held on 19 th September, 2024, the Supervisory Board made, among other things, a decision on the dismissal and election of members of the Supervisory Board to align the Supervisory Board members’ term of offices, so in accordance with this decision and the decision of the General Shareholders’ Assembly of the Company, the constitutive meeting of the Supervisory Board was held on 25 th October, 2025, at which Mr. Goran Medić was re-elected President, and Mr. David Anthony Tudorović was elected Vice President. III. The Supervisory Board of the Company established the Audit Committee, which performed tasks within its jurisdiction in accordance with legal regulations and the Rules of Procedure of the Audit Committee. In 2024, the Audit Committee operated in a composition of 3 (three) members, namely: David Anthony Tudorović (President), Goran Medić (Deputy) and Darko Prebežac (Member). In 2024, one meeting of the Audit Committee was held. The Supervisory Board received the report by the Audit Committee regarding the drafting and preparation of the Annual Report for the year 2023, and provided the Audit Committee's recommendation for the selection of the Company's auditor for the year 2024. The Audit Committee also carried out all other activities in accordance with relevant legal regulations and internal bylaws of the Company, and provided appropriate support to the Supervisory Board with its proposals and recommendations. IV. The Supervisory Board did, with its decisions and conclusions adopted at the meetings, influence the business policy of the Company, the Management Board of the Company to conduct business operations duly, diligently and in the interest of the Company. The Management Board of the Company cooperated very intensively with the Supervisory Board and successfully managed the Company. In accordance with its powers and authority, the Supervisory Board carried out the supervision and examined the Company’s business records and documents, thus gaining a comprehensive overview of the overall business operations of the Company. It was presented key figures on the assets, financial position and business performance, i.e. turnover, result, the company's assets, equity, the company's solvency and indebtedness. In addition to the presented comprehensive reports and with the supervision of conducting the Company's business operations performed during the year, we have gained confidence that this Company complies with the laws of the Republic of Croatia, the company's bylaws and the decisions of the General Assembly. The financial statements for the fiscal year 2024 have been prepared in accordance with the balances in the company's business records and reveal the proper balances of the company's assets, the company's equity and operating results. V. The Supervisory Board reviewed the Company’s Annual Report for the year 2024 which consists of: Annual Financial Statements of the Company for 2024 - Statement of financial position (balance sheet), Profit and loss account, Statement of comprehensive income, Statement of cash flows, Statement of changes in equity, Notes to the financial statements and Statement on the application of the Corporate governance Code, Management Representation Letter //Management Board’s Report on the position of the Company, Auditor's report of the Company for 2024 and Statements by the persons in charge. The Supervisory Board has no objections to the Annual Report of Ilirija d.d. for the year 2024 and to the Company Auditor's Report for the year 2024. Pursuant to the foregoing, the Supervisory Board gives its consent to the Annual Report of the Company for the year 2024 and 246 9.12. SUPERVISORY BOARD’S REPORT ON PERFORMED SUPERVISION Tel: Centrala ++385 23 383 165; Fax: ++385 23 384 564; Prodaja: ++385 23 383 556; sales@ilirijabiograd.com; www.ilirijabiograd.com ILIRIJA d.d. za ugostiteljstvo I turizam, Tina Ujevića 7, Biograd n/M, Trgovački sud u Zadru, MBS: 060032302, Matični broj:3311953., OIB: 05951496767; račun: ERSTE & STEIERMARKISCHE BANK d.d. – RIJEKA IBAN: HR5824020061100097324. Temeljni kapital: 30.420.000,00 Eura, uplaćen u cijelosti. Broj izdanih dionica: 2.413.488, bez nominalnog iznosa. Uprava: G. Ražnjević, Predsjednik Nadzornog odbora: G. Medić the Annual Report of the Company for the year 2024 is thus deemed to be determined by the Management Board and the Supervisory Board. VI. The Supervisory Board examined the report prepared by the Management Board on relations with related companies for the year 2024 and an independent auditor’s report expressing reasonable assurance on the report on relations with related companies for the year 2024 prepared by the company UHY Rudan d.o.o The Supervisory Board has no objection to the statement made by the Management Board stating that the Company, considering the circumstances known at the time when the legal transactions mentioned in the report were being undertaken, received appropriate consideration and that these transactions caused no harm to the Company and that no objections are raised to the results of the audit of the report on the relations with related companies stated in the independent auditor’s report and therefore, in accordance with Article 499 of the Companies’ Act, the Supervisory Board adopts the Company auditor’s statement from the said report in a way as follows: a.) The allegations made in the report on the relations with related companies for 2024 are correct in all significant respects; b.) In the legal transactions stated in the Report on the relations with related companies for 2024, considering the circumstances known at the time when the transactions were being undertaken, the value of the Company's consideration was not, in all significant respects, inappropriately high. VII. The Supervisory Board has independently assessed its effectiveness and composition, as well as the effectiveness and composition of its committees and the individual performance of its members. External assessors were not engaged in this process; instead, the evaluation was led by the President of the Supervisory Board, conducted internally through discussions and consultations with the other members of the Supervisory Board. The Supervisory Board concludes that it has effectively supervised the running of the Company's affairs, successfully cooperated with the Management Board, persons in charge, and the Company's expert units, that contributed to the efficient functioning of the Supervisory Board and the performance of its tasks within its scope of jurisdiction in a way that they prepared all materials that the Management Board submitted to the Supervisory Board on a timely manner and at a high quality level. Furthermore, the Supervisory Board concludes that all members of the Supervisory Board utilize their experience, knowledge and education to the greatest extent to ensure that the Supervisory Board performs its function as effectively as possible, thereby contributing to the business operations and protection of the Company's interests. Given the above, the Supervisory Board believes there is no need for changes in its size and composition, nor has any need for improvements in the functioning and preparation of the board meetings been identified. The Supervisory Board has taken note of the Conclusion of the Management dated 14 th February, 2025, regarding the effectiveness of the Management Board in 2024. VIII. The Supervisory Board of the Company accepted the proposal made by the Management Board to the General Shareholders’ Assembly at its meeting held on 26th February 2025 that the net profit generated in 2024 (after tax) in the amount of EUR 3,279,530.22 should be allocated in the way as follows: the retained earnings EUR 1,655,334.33, and for dividend payment: EUR 1,920,740.00. 247 9.12. SUPERVISORY BOARD’S REPORT ON PERFORMED SUPERVISION Tel: Centrala ++385 23 383 165; Fax: ++385 23 384 564; Prodaja: ++385 23 383 556; sales@ilirijabiograd.com; www.ilirijabiograd.com ILIRIJA d.d. za ugostiteljstvo I turizam, Tina Ujevića 7, Biograd n/M, Trgovački sud u Zadru, MBS: 060032302, Matični broj:3311953., OIB: 05951496767; račun: ERSTE & STEIERMARKISCHE BANK d.d. – RIJEKA IBAN: HR5824020061100097324. Temeljni kapital: 30.420.000,00 Eura, uplaćen u cijelosti. Broj izdanih dionica: 2.413.488, bez nominalnog iznosa. Uprava: G. Ražnjević, Predsjednik Nadzornog odbora: G. Medić IX. The Supervisory Board has finally assessed the effectiveness of the cooperation between the Supervisory Board and the Management Board and concludes that their mutual cooperation is good, that the Management Board provides adequate and appropriate support to the members of the Supervisory Board in fulfilling their duties in a way that the Management Board timely delivers all information, reports, proposals and other materials related to the Company's business operations, in accordance with applicable legal regulations and the internal bylaws of the Company. As a result, the Supervisory Board assesses the work of the Management Board and the Company’s performance in 2024 as successful. In accordance with Article 5.3 of the Remuneration Policy for the members of the Management Board, the Supervisory Board determines that the business objectives and results for 2024, as defined by the adopted business plan of the Company, have been fully accomplished, and that the Company’s results exceeded the forecasted results. The Supervisory Board emphasizes the good cooperation of the Supervisory Board with the Management Board of the Company, which successfully managed the company during the past period. In Biograd na Moru, 26th February 2025 President of the Supervisory Board Goran Medić _____ ILIRIJA D.D. TINA UJEVIĆA 7, BIOGRAD NA MORU, REPUBLIC OF CROATIA TEL: 023 383 165 FAX: 023 383 008 WWW.ILIRIJABIOGRAD.COM