financial statements for period from 01/01/2016 to 30/09/2016

Biograd na Moru, October 2016

4 Overview of key performance indicators for the period from 01/01 to 30/09/2016
7 Key information for the period from 01/01 to 30/09/2016
13 General information
14 Chronological overview of the Company development
17 Company's bodies
18 Company's subsidiaries
18 Affiliated companies
19 Ownership structure of the Company as at 30/09/2015 and trading in the Company's shares at the Zagreb Stock Exchange
24 Company's capacities
33 Operating results
68 Investments
69 Non-operating assets
71 Business expectations and development plan in the year 2016
73 Operational risks of the Company
74 Important events
77 Sustainable development and corporate social responsibility
81 Other
82 Notes
83 Financial statements for the period from 01/01 to 30/09/2016
92 Representation letter by responsible persons for the preparation of the financial statements

1. overview of key performance indicators for the period from 01st january to 30th september 2016

in HRK	I-IX 2016	I-IX 2015	INDEX 2016/2015
Financial indicators
Total revenues	117.717.140,32	116.608.664,22	100,95
Operating income	116.292.365,96	116.037.177,99	100,22
Hospitality	42.778.623,97	42.875.147,32	99,77
Nautics	40.302.334,02	40.936.620,26	98,45
Camping	27.179.943,16	26.489.770,86	102,61
Other revenues	6.031.464,81	5.735.639,55	105,16
Revenues from sales	113.730.817,89	114.502.873,40	99,33
EBITDA	53.633.864,42	48.202.243,05	111,27
EBITDA margin	46,12%	41,54%	111,03
Adjusted EBITDA	54.472.964,42	49.454.243,05	110,15
Adjusted EBITDA margin	46,85%	42,62%	109,92
EBIT	47.464.378,46	42.599.577,90	111,42
Adjusted EBIT	48.234.909,47	43.023.485,77	112,11
Profit	44.789.148,33	39.468.455,64	113,48
Profit margin	38,51%	34,01%	113,23

in HRK	I-IX 2016	I-IX 2015	INDEX 2016/2015
Balance sheet indicators
Net debt	61.037.781,12	78.246.454,09	78,01
Net debt / EBITDA	1,14	1,62	70,11
Net debt / Adjusted EBITDA	1,12	1,58	70,82
Interest coverage	17,75	13,61	130,42
Capital investments	19.754.868,84	10.174.420,50	194.16
ROE	14,00%	15,00%	93,33
ROA	11,00%	10,00%	110,00
Adjusted ROCE	14,44%	13,39%	107,84

in HRK	I-IX 2016	I-IX 2015	INDEX 2016/2015
Indicators of the financial position
Value of assets	338.408.515,62	324.313.848,21	104,35
Capital	256.102.674,48	213.593.055,17	119,90
Total liabilities	82.305.840,84	110.720.793,04	74,34

in HRK	I-IX 2016	I-IX 2015	INDEX 2016/2015
Achievements on the capital market
Market capitalization	383.992.171,42	229.183.240,14	167,55
EV	445.029.952,54	301.419.273,54	147,64
EV / EBITDA	8,30	6,25	132,69
EV / Adjusted EBITDA	8,17	6,09	134,04
P / E	9,75	7,59	128,46
EPS	115,3	111,8	103,19
DPS	18,00	15,00	120,00

Physical indicators	I-IX 2016	I-IX 2015.	INDEX 2016/2015
Hospitality
Number of accommodation units	443	443	100,00
Overnight stays of tourists	117.861	116.222	101,41
Occupancy days	126	123	102,44
Annual occupancy	46%	45%	102,22

Nautics
Number of berths	805	805	100,00
Contracted vessels	705	717	98,33
Transit berth, overnight stay of vessels	11.264	10.629	105,97
Transit berth, inbound vessels	3.308	3.213	102,96
Port service - number of operations	3.226	3.426	94,16
Days of work	365	365	100,00

Camping
Number of accommodation units	1.130	1.123	100,62
Days of work	162	160	101,25
Occupancy days	91,66	92,84	98,73
Mobile homes	103,73	104,31	99,44
Individuals	44,5	50,1	88,82
Fixed lease	162	160	101,25
Lump sum	162	158,78	102,03
Occupancy	56,58%	58,02%	97,52
Mobile homes	64,03%	65,19%	98,22
Individuals	27,47%	31,31%	87,74
Fixed lease	100,00%	100%	100,00
Lump sum	100,00%	99%	100,77
Overnight stays of tourists	257.939	260.166	99,14

2. key information for the period from 01/01 to 30/09/2016

Operating results achieved at the level of the entire Company are by far the best so far in particular in terms of improving business performance and key parameters of profitability (profit, EBITDA, EBIT and operating profit) with a slight increase in total and operating revenues and operating performance indicators.

By the end of the year more intensive business activity will take place in the nautical sector through the segment of nautical events and organization of the Biograd Boat Show, while the hospitality sector and destination management company/DMC Ilirija Travel record satisfactory sales and bookings in the rest of the post-season, as a result of which we expect further generation of revenues at the Company level.

In the first nine months, physical operating results in all sectors of the company are at the level of the planned and expected results, with a special emphasis on the growth of key operational performance indicators, that are in the hotel sector reflected in the growth of the total number of overnight stays by 1%, while the nautical sector recorded a significant growth of physical turnover in the area of transit berth, that is inbound vessels and overnight stays of vessels in transit, which increased by 3% or 6%, with a significant growth of revenues from transit berth by 7%. The number of contractual berths for the vessels is slightly lower than in the comparative period in 2015, which did not affect the revenue position of the contractual berth, that remained to be at the same level as in the previous year.

Camping sector, considering its pronounced seasonality, records a slight decline in physical operational results as a result of unfavorable schedule of holidays and bad weather in the month of June, which significantly impacted the realization in the camping sector in the second quarter of 2016. In spite of the exceptionally good post-season and growth of a number of overnight stays by 5%, the camping sector did not manage to compensate for the physical turnover in the pre-season, but it did not affect the revenue side, which grew by 3% compared to the same period in 2015.

Total income amount to HRK 117,717,140.32 and grew by 0.95% compared to the same period in 2015, when they amounted to HRK 116,608,664.22, as a result of growth in operating and financial revenues.
There has been a slight increase in operating revenues, which in the first nine months of 2016 amounted to HRK 116,292,365.96, compared to the operating revenues generated in the same period in 2015, which amounted to HRK 116,037,177.99, of which the growth in operating revenues of the camping sector by 3% and other profit centers of the Company by 5% is particularly significant, which also include the revenues of the destination management company/ DMC Ilirija Travel realized mainly in the pre-season and post-season. Revenues of the hotel sector remained at the level of revenues in 2015, while the revenues in the nautical sector decreased by 2% compared to the same period of the previous fiscal year, only by single position of the revenues generated from nautical events realized in the second quarter of 2015.
Decrease in total expenses by 5.46% from the amount of HRK 77,140,208.58 as much as they amounted in the third quarter of 2015 to the amount of HRK 72,927,991.99 as a result of a continuous and efficient cost management policy at all levels of business operations, namely by reducing operating expenses by 6.92% and financial expenditures by 14.56%.
Profit for the first nine months of 2016 amounts to HRK 44,789,148.33 and increased by 13.48% or HRK 5,320,692.69 compared to the same period of 2015 when it amounted to HRK 39,468,455.64. Operating profit, that is, profit earned from the business operations of the Company grew from HRK 48,061,109.69, as much as it amounted in the third quarter of the previous fiscal year, by 10.32% or by HRK 4,959,953.44 and amounts to HRK 53,021,063.13. Significant growth in profit and operating profit is the result of the decrease in total expenditures especially in the segment of operating and financial expenses.
Realized EBITDA amounts to HRK 53,633,864.42 and it grew by 11.27% or HRK 5,431,621.37 compared to the same period of the previous fiscal year, when it amounted to HRK 48,202,243.05, while EBITDA margin for the observed period amounts to 46.12% and rose by 11% compared to the same period of 2015 when it amounted to 41.54%.
EBIT was realized in the amount of HRK 47,464,378.46 and grew by 11.42% or HRK 4,864,800.56 compared to the same period of 2015 when it amounted to HRK 42,599,577.90.
A significant decrease in the total liabilities of the Company by HRK 28,414,952.20 or 25.66%, that is, from HRK 110,720,793.04 as much as they amounted in the third quarter of 2015 to the amount of HRK 82,305,840.84 in the same period of 2016, as a result of decreased loan liabilities owed to financial institutions.

We should emphasize that the Company's total liabilities increased by the item relating to the long-term financial leasing in the amount of HRK 7,629,819.06 due to a change in the method of financing of a part of long-term investments from operating into the financial leasing this year.

In the observed accounting period, the value of the assets grew by 4.35% or HRK 14,094,667.41, that is, from HRK 324,313,848.21 as much as they amounted in the third quarter of 2015 to a total of HRK 338,408,515.62 in the year 2016. We should also emphasize that the value of assets increased by a change in the financing of one portion of the long-term investments by means of financial leasing in the amount of HRK 7,629,819.06.
In the first nine months of 2016, equity increased by 19.90% or HRK 42,509,619.31, that is, from the amount of HRK 213,593,055.17 as much as it amounted in the third quarter of 2015 to HRK 256,102,674.48 in the same period in 2016.
On 10 June 2016, the General Shareholders' Assembly passed a unanimous decision on profit utilization for the fiscal year 2015, based on which it was decided that a portion of the profit after tax in the amount of HRK 4,937,148.00 shall be appropriated for the distribution of dividends in the amount of HRK 18.00 per share which is an increase in the amount of dividend per share by 20% compared to the amount of the dividend of HRK 15.00 per share distributed to the Company's shareholders in 2015.

Also, at the above General Meeting, the Decision on an increase in share capital from the Company's assets was unanimously adopted, based on which the share capital increased from the reinvested profits earned in 2015 by the amount of HRK 8,228,580,00.

According to the Decision No. Tt-16/3121-2 of 12th July 2016, the Commercial Court in Zadar entered the increase in share capital of the Company in the court registry, by which the share capital increases from the amount of HRK 150,857,300.00 by the amount of HRK 8,228,580.00 to the total amount of HRK 159,085,880.00 from the Company's funds or from the reinvested profit disclosed in the adopted 2015 financial statements. Following the increase, the share capital was divided into 274,286 ordinary shares, each of nominal value of HRK 580.00.

The call for Extraordinary General Meeting convened on 24th October 2016 has been publicized to the Company's shareholders, by which the Management Board and Supervisory Board propose the adoption of the following decisions:
Decision on a change to the core business activities – added activities;
Decision on changes and amendments to the Articles of Association of the Company;

• Decision on an increase in share capital by contributions in cash and issue of shares and changes made to the Articles of Association ("Decision on an increase in share capital), namely by issuing new ordinary shares by public offering by contributions in cash thereby excluding the pre-emptive right of the existing shareholders while subscribing for new shares, except for the pre-emptive right of the shareholder – company Allianz ZB d.o.o., compulsory pension fund management company with registered office in Zagreb, since the offer of New Shares will be exclusively given to qualified investors that fulfill requirements therefor according to Article 351, paragraph 1, section 1 of the Capital Market Act, whereas Allianz ZB d.o.o. fulfills the requirements indicated in the mentioned Article of the Act; and

• Decision on the listing of all Company's shares on the Official market of the Zagreb Stock Exchange for trading.

The document Information Memorandum of issue of new shares of the company Ilirija d.d. was released for the purpose of business development, in which the Company informed the general public in a fully public, transparent and detailed manner, about the intention of conducting the process of recapitalization (capital increase), which will take place through a share capital increase by contributions in cash, thereby excluding the pre-emptive rights of the existing shareholders, except for Allianz ZB d.o.o., and the issue of new ordinary shares by a public offering exclusively to qualified investors with the primary objective of raising funds for the acquisition of real estate Commercial shopping center City Galleria in Zadar. The Information Memorandum, in addition to the foregoing, includes a detailed description of the investment proposition with a detailed description of target investment, the planned financing conditions, future consolidated and expected financial operating results, competitive advantages of the acquisition by the Company (the diversification of income and risks, the impact on profitability, stabilization of cash flow by inflows outside of tourist season, consolidation of expenses. The company will be created with a wide range of economic activities including hotel industry, nautics, camping, destination management and partly real estate, year-round business, etc.) with future investment plans of the Company.
The judgment rendered by the Higher Commercial Court of the Republic of Croatia as of 2016 affirmed the judgment rendered by the Commercial Court in Zadar, which designates the Company as the owner of the entire property with land plot no. 3232 of the cadastral municipality Biograd, on an area of 48,705 m2, which in the nature is "Tennis center Ilirija" with the surrounding land. In this way the dispute over the property of the "Tennis center Ilirija" has been completed to the benefit of the Company by rendering final and absolute judgment.
The rise in market capitalization by 67.55% or by HRK 154,808,931.28 from the amount of HRK 229,183,240.14, as much as it amounted in the third quarter of 2015 to the amount of HRK 383,992,171.42 in the same period of 2016.
The rise in the total turnover of the shares of the Company by 138.54% or HRK 4,758,864.31 from HRK 3,435,005.70 as much as it amounted in the third quarter of 2015 to the amount of HRK 8,193,870.01 realized in the same period in 2016.
The growth in average price of share by 33.24% from HRK 858.32 as much as it amounted in the third quarter of the year 2015, to HRK 1,143.60 in the same period of 2016, while at the same time in the observed period, the average daily Comany's share turnover increased by 266.13%, that is, from the amount of HRK 52,045.54 to the amount HRK 190,555.12 as much as it amounted in 2016.
In the first nine months of 2016, the highest achieved share price amounted to HRK 1,399.97 per share, which compared to the same period in 2015 constitutes a growth by 50.54 when the highest share price amounted to HRK 929.94.
The continuation of investments in the accommodation facilities, improvement of services, offer and amenities in all sectors of the company, of which we especially emphasize the finalization of the reconstruction of first phase of the nautical tourism port Marina Kornati, the purchase of new mobile homes for the camping sector, extension of the capacities in the hospitality facilities and restaurants while in the hotel sector we need to emphasize the refurbishment of the public areas and accommodation units and other activities aimed at improving the accommodation facilities, products and services in the total amount of HRK 19,754,868.84. Direct investments mostly from own funds amount to HRK 11,263,636.23 while one portion is financed by leasing, that is, it arises from the conversion of operating into the financial leasing, the amount of HRK 8,491,232.61.
The most important investment of the Company in the first nine months of 2016 is the completion of the reconstruction of the first phase of the coastal part of the nautical tourism port "Marina Kornati" in February in a total amount of 10.01 million HRK, of which 4.9 million HRK was invested in the year 2016.

The second phase of the reconstruction of Marina Kornati or the reconstruction of the remaining docks in the central aquatorium will be initiated in the month of November this year, where the finalization is planned in February 2017, according to the 2016 Investment Plan and final building permit, Class: UP/I-361-03/15-01/000111, Protocol No.: 531-06-2-1-1467- 15-0008, of 20th October 2015.

The Ministry of Construction and Physical Planning has issued an operating permit, Class: UP/I-361-05/1601/000022, Prot. No,: 531-06-2-2-609-16-0011 and operating permit Class:UP/I-361-05/16-01/000023, Prot. No. :531-06-2-2-609-16-011, the both as of 07th June 2016, which implies the successful finalization of the reconstruction of the first phase of the coastal part of the nautical tourism port "Marina Kornati" that is, docks with all accompanied installations, not only in the inland part, but also in the part of pontoon and with the entire dock equipment, according to the final and non-appealable building permit, Class: UP/I-361-03/15-01/000111, Protocol No.: 531-06-2-1- 1467-15-0008, of 20th October 2015.
The Company is the organizer and host of the jubilee eighteenth Biograd Boat Show, which takes place from 20th to 23rd October 2016 in Marina Kornati, at which further innovations in the nautical industry will be presented, such as the Charter Info Center, that due to huge interest shown by the charter companies has been renamed to Biograd Charter Show with congress room in Hall B, with an agreement concluded with over 330 exhibitors, that participate with more than 300 vessels, 40 premieres of vessels will be presented, while during the show, 5 regatta events will be organized, which will be attended by over 600 sailors on 100 vessels. The eighteenth Boat Show this year has placed a special emphasis on further development of its "business to business" character as over 2,000 business visits were recorded at the boat show in 2015.
The publication Business model of corporate social responsibility from 2000 to 2015 has been devised, which shows an overview of the activities in the area of corporate social responsibility of the Company in the last fifteen years in the six basic areas: economic sustainability, incorporation of CSR and SD into business strategy, protection of nature and environment, responsible policies and practices in the working environment, responsible policies and practices of environmental management, corporate social responsibility in market relations and socially responsible community relations.

In this way, the Company has introduced an institute of non-financial reporting as a significant contribution to strengthening the Company's responsibility according to the corporate social responsibility concept, whereby the company's corporate values are further strengthened by enhancing its transparency, in accordance with the views and recommendations of the European Commission, especially in the area of corporate behavior, business operations and reporting by the companies.

In the first nine months of 2016, not a single incident or compromise of safety, including the occupational safety and protection, health and environmental safety of guests and employees has been recorded, especially considering the fact that 6,000 visitors a day were staying in the facilities of the Company in high season.
Certificates and standards:

Certificates:

Ilirija Travel Certificate is the winner of the DMK for business operations of the destination management company awarded by UNPAH or the Croatian Association of Independent Travel Agents. The Certificate confirms responsible attitude towards suppliers, human resource capacity to provide all necessary information on the destination and all products of the destination.

In June 2016, Croatian Association of Travel Agents (UHPA) granted to Ilirija Travel the status of certified specialists for fulfilling all the requirements for specialization, for the period from 2016 to 2018 for the following areas: Professional Congress Organizer, destination management company for the tourism county of Zadar and wine and food tourism.

Standards:

In May, The Ministry of Tourism conducted a process of re-categorization of the camp "Park Soline" and after passing the Decision on temporary performance of activities, Class: UP/I-335-05/15-02/6 Prot. No.: 529-03-16-6 of 20th June 2016, it was found that the camp "Park Soline" meets the requirements prescribed for the category of the camp, which is marked with four stars.

Introduction and implementation of HALAL quality in the hospitality facilities of the Company.

In June, the re-certification of the quality management system according to the standard DIN EN ISO 9001 was successfully carried out at the level of the entire Company and all of its sectors (hotel industry, camping, nautics and hospitality and restaurants).

In June, the camp "Park Soline" was subject to the in-

spection by the international inspectorate for the implementation of criteria and standards of the Green Key, which established the compliance with the criteria and standards of this ecological certificate.

In Marina Kornati, the international environmental program regarding the environmental protection, sea and coastal area has been renewed, by which the marina was again awarded the Blue Flag, which it has been continiously held since 2004.

general information 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 already 59 years. The business operations of Ilirija d.d. is based on the principles of corporate social responsibility as an integral part its corporate values. In its business operations, the Management Company 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 institutions, shareholders, banking institutions, funds, associations, business partners, institutional, individual 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 Adriatic Mediterranean tourism supply that is: hotel industry (hotels: Ilirija****, Kornati****, Adriatic***, Villa Donat****/***, Villa Primorje****, diffuse hotel Ražnjevića Dvori AD 1307****), nautical sector (Marina Kornati and Hotel port Ilirija-Kornati), camping (camp "Park Soline"****), hospitality (restaurant "Marina Kornati" restaurant "Park Soline", Beach bar "Donat", "Lavender" lounge

bar), destination management company/DMC Ilirija Travel, Arsenal in Zadar, Tennis center Ilirija with 20 tennis courts and coffe bar, Aquatic center with the hospitality facility and event boat "Nada", a floating convention center with multifunctional purposes, 36m in length and a capacity to accommodate 180 persons.

Its business is based on providing services by using its capacities (hotels, nautics, camping) at the same time providing additional amenities and services, thus creating a high-quality integrated and complementary tourism product in the domestic and international tourism market, presented under the brand Ilirija Travel. Destination 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.

4. chronological overview of the company 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 1936 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 permit 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 Kornati, located in Biograd na Moru, with total port area (aquatorium) of 131.600 m2 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 Biograd na Moru (400m from the hotel, 150m from the main beach), on an area of 48.000 m2 with 20 tennis courts (14 clay and 6 color-set tennis courts).

Year 1988 | The construction of Aquatic Center, that is, a beach facility as a part of a unique, technological and 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 m2, whereby it represents a center for holding almost all sports, entertaining and dance events in the City Biograd na Moru.

Year 1991 | By merger of the campsite "Soline", located in Biograd na Moru, later renamed into the camp "Park Soline", by which the Company in its operations in addition to hotel management and nautics also included camping as the third segment of its tourism offer.

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 nautical 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.

Years 1999 – 2016 | During this period, that is, by 30th September 2016, the Company has invested HRK 364,817,017.58 in construction, reconstruction, extension, building annexes, 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, which resulted in a significant growth in total revenues and newly created value in the mentioned period in the amount of HRK 631,180,864.80.

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 according to the concept of "indoor town square," began conducting business activities.

Year 2009 | The Company's shares are listed on the Regular Zagreb Stock Exchange, since the quotation of public joint stock companies was cancelled.

Year 2014 | The market was presented the event yacht "Nada" a floating convention center with multifunctional 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 Exchange which will contribute to even greater transparency and openness of the company to all of its stakeholders.

5. company's bodies 2.1 company management board

Goran Ražnjević, President of the Management Board represents the company solely and independently

2.2 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

2.3 shareholders' assembly

6. company's subsidiaries The Company has two subsidiaries in 100% ownership: ILIRIJA GRAĐENJE d.o.o. ILIRIJA NAUTIKA d.o.o. (are not active in business)

affiliated companies Arsenal Holdings d.o.o., Perivoj Gospe od Zdravlja 1, Zadar, Company Tax Number - OIB: 59794687464, owner, holds 178,629 shares in the Company, which accounts for 65.13% of the shares in the share capital of the Company, and the same number of votes in the Shareholders' Assembly.

The controlling company Arsenal Holdings d.o.o. is registered with the Commercial Court in Zadar, Company Reg. No. MBS: 060014554; share capital HRK 21,027,500.00 paid in whole.

The major owner of the company Arsenal Holdings d.o.o. is Mr. Davor Tudorović with 75.25% shares in its share capital, who also holds 4.36% shares in the share capital of the company Ilirija d.d..

8. ownership structure of the company as at 30/09/2016 and trading in the company's shares at the zagreb stock exchange

The share capital of the Company is HRK 159,085,800.00 and is divided in 274,286 ordinary shares with nominal value of HRK 580,00.

During the period from 01st January to 30th September 2016 there occurred no significant change in the ownership structure, and an overview given in the below text shows the ten major shareholders of the Company as at 30th September 2016.

Overview of the ten major shareholders of the Company as at 30/09/2016:

Owners - shareholders	Number of shares	Share in %
Arsenal Holdings d.o.o. Zadar	178.629	65,13
Goran Ražnjević	25.317	9,23
Societe Generale - Splitska banka d.d. /AZ OMF of B category	21.603	7,88
Davor Tudorović	11.968	4,36
Societe Generale - Splitska banka d.d./AZ compulsory pension fund of A category	9.529	3,47
CERP/Republic of Croatia	9.275	3,38
Goran Medić	5.000	1,82
Zoran Bogdanović	3.227	1,18
Dražen Hrkač	891	0,33
Ilirija d.d. (treasury shares)	859	0,31
Other minor shareholders	7.988	2,91
TOTAL	274.286	100,00

Ownership structure of the Company as at 30th September 2016

trading in shares of the company on the croatian capital market in the year 01/01 -30/09/2016

(Amounts in HRK)	I-IX 2016.	I-IX 2015.	% changes
Total sales	8.193.870,01	3.435.005,70	138,54%
Average share price	1.143,60	858,32	33,24%
Average turnover per transaction	78.036,86	29.110,22	168,07%
Average daily turnover	190.555,12	52.045,54	266,13%
Last share price	1.399,97	918,99	52,34%
Market capitalization	383.992.171,42	229.183.240,14	67,55%

By comparing data on trading in company shares on the Zagreb Stock Exchange in the first nine months of 2016, we can see a high growth in all key indicators of realization in the capital market compared to the same period last year. The reason for this lies in good operating results disclosed and the fact that the investment community recognizes the potential of the Company. The listing of shares on the Official Market of the Zagreb Stock Exchange in late 2015, and consequently the increased transparency, has resulted in an increased interest in purchasing shares of the Company, as a result of which, in the first nine months of 2016 a total of 7,165 shares were traded in, which compared to the same period last fiscal year, when a total of 4,002 shares were traded in, constitutes a growth of physical turnover of shares by 79.04%. In the observed period, a total turnover in the amount of HRK 8,193,870.01 was realized compared to the same period in 2015 when a turnover was realized in the amount of HRK 3,435.005,70, which constitutes an increase by 138.54%. An average price per share in the amount of HRK 1,143.60 was realized, which compared to the same period in 2015, when the average share price amounted to HRK 858.32, constitutes an increase by 33.24%.

The highest single price per share was realized in the amount of HRK 1,399.97 per share compared to the same period in 2015, when the highest share price amounted to HRK 929.94 which constitutes an increase by 50.54%. Also, when comparing the Company's share price realized early this fiscal year, when it amounted to HRK 1,000.00 per share to the latest price of the share in the amount of HRK 1,399.97 in the first nine months of 2016, a growth in the share price by 40% has been realized.

Comparing the most recent share price in the observed period in 2016, which amounted to HRK 1,399.97, it achieved an increase by 52.34% compared to latest share price realized in the same period in 2015, which amounted to HRK 918.99. The market capitalization of the Company amounted to HRK 383,992,171.42 which compared to the comparative period in 2015, when the market capitalization amounted to HRK 229,183,240.14, is an increase by 67.55% or by HRK 154,808,931.28.

In the reporting period, the Company acquired 135 treasury shares and on 30/09/2016 it holds 859 treasury shares, which make for 0.31% of the share in the share capital and the same percentage of votes in the Shareholders' Assembly.

The movement of the share price designated as ILRA-R-A and comparison with CROBEX and CROBEXTURIST indices

The exchange rate of the share of the Company for the Zagreb Stock Exchange continues to show higher growth than the CROBEX index and CROBEXTUR-IST sectoral index. In the period from 01/01/2016 to 30/09/2016, the CROBEX index rose by 14.90%, while the CORBEXTURIST index rose by 21.43% This shows that the tourism sector of the economy is more vital and successful than the average of the economy in the Republic of Croatia. In the same period, the exchange rate of the share ILRA-R-A has been increased by 40.00%, which shows its faster growth than the average of the tourism sector of the economy. Analyzing these indicators, we should note that the share ILRA-R-A is relatively new on the market which has been intensively traded in for over two years in the Stock Exchange. Technical analysis of the Company's shares shows the strong price rising trend in the forthcoming period.

The movement of the share price ILRA-R-A and comparison with CROBEX and CROBEXTURIST indices

9. company's capacities Portfolio of ILIRIJA d.d. consists of six hotels and villas, marina Kornati with Hotel port Ilirija-Kornati, camp "Park Soline," Arsenal in Zadar, Tennis center Ilirija, Aquatic center and hospitality facilities. The added value to the "heart" of our offer is granted by the event boat "Nada", a convention center with multifunctional purposes and event yacht with 180 seats, a complete restaurant, kitchen and a bar which provides an excellent hospitality service during the voyage.

Hotel sector capacity consists of 449 accommodation units (hotel rooms and apartments) with a total of 929 beds located in Biograd na Moru (Ilirija****, Kornati****, Adriatic***, Villa Primorje****), Sv. Filip i Jakov (hotel Villa Donat***/****) and Polača (diffuse hotel Ražnjevića dvori AD 1307****), mainly classified as four star hotels.

Hotel accommodation is located in Ilirija Resort Hotels & Vilas in Biograd and Sv. Filip i Jakov. The hotels are located along the coast, not far from the town center and beach that is awarded the Blue Flag, which are owing to the ideal location and infrastructure, intended for leisure and congress tourism. In addition to modern and technically equipped conference halls and meeting rooms intended for conferences, seminars, presentations, workshops and meetings, there is a number of supporting amenities such as Wellness & beauty center Salvie, Olympic and outdoor swimming pool, a fitness center, a'la carte restaurants and coffee bars.

As part of Ilirija Resort there is a conference center that consists of 8 halls with a total capacity to accommodate 30 to 250 persons, and there is also a magnificent garden with terraces ideal for banquets, receptions and entertainment, outdoor swimming pools and beach.

ilirija resort hotels & villas

hotel ilirija the largest hotel in Ilirija Resort classified as a four-star hotel, with a capacity of 165 rooms and 337 beds, and includes a restaurant with 200 seats, a terrace with 70 and aperitif bar with 50 seats. It is located the along the coast, close to the old town, surrounded by magnificent nature, sea and pinewood, as well as many amenities.

hotel kornati classified as a four star hotel, with the capacity of 106 rooms and 216 beds, a restaurant with the capacity for 220 persons, a terrace for 50 persons and a bar for 40 persons, by its design and atmosphere is linked to and associated with the most beautiful Croatian national park – Kornati. Kornati Hotel is a unique for its connection with the Nautical tourism port Hotel port Ilirija - Kornati, which is located in the very center of Biograd with a beach right next to the hotel.

hotel adriatic classified as a threestar hotel, with the capacity of 100 rooms and 210 beds, with a restaurant with the capacity for 230 persons, a terrace for 300 persons and a bar with the capacity for 110 persons. It is located in a pine forest, almost on the beach, and there is Family Aquatic Center next to it, which is ideal for family fun and for a range of attractive summer sea activities.

hotel villa donat is located in Sv. Filip i Jakov and consists of Villa with 16 superb and modern rooms, classified as a four star hotel, and the annex which is classified as a three star hotel. The total capacity is 72 rooms and 144 beds, a restaurant with 120 seats, a terrace for 50 persons and aperitif bar for 20 persons. The hotel is located near the main beach and the town center which reminds of the rich history of this region.

In 2015, the market was presented with villa primorje, built in the second half of the 19th century, is a typical traditional Dalmatian stone nobleman's house with the outbuildings. Newly renovated, luxuriously decorated and equipped in line with the latest standards for facilities of its kind and category, it has its own restaurant that offers the possibility of organizing a number of events and the Mediterranean garden with a promenade.

marina kornati

Nautical sector began to develop in 1976 with the construction of the first nautical marina in Croatia (Hotel port Kornati) with 100 berths and the procurement and organization of the first own charter fleet in the Adriatic sea with more than 40 vessels for the needs of boaters, therefore Ilirija d.d. deserves to be considered to be a pioneer of nautical tourism at the Adriatic sea.

Today, the nautical sector of the Company consists of Kornati marina and Hotel port Kornati, in which the Company has 805 berths on sea and land, which in one day can accept up to 2000 sailors, but by the number of berths, modern technical equipment, quality of service, cleanliness and neatness (Blue Flag) the Kornati marina is one of the three leading Croatian marinas which annually attracts over 60,000 sailors.

marina kornati is the winner of numerous awards, where we wish to emphasize the Special Award in the "XVI. Tourism Flower - Quality for Croatia 2012" action, organized by the Croatian Chamber of Commerce and the Croatian Radio and Television, which is an award for the best marina in the category of over 450 berths. In 2013, in the "XVII. Tourism Flower - Quality for Croatia 2013" action, it received an award in the competition of the largest marinas, while in the same action in 2014 and 2015 it ranked second in the "Best big marina" category.

ilirija d.d. is the organizer of the leading boat show in Croatia "BIOGRAD BOAT SHOW" which has been continuously held in Marina Kornati for 18 years in a row.

kamp park soline

camp park soline, classified as a four-star camping, also located in Biograd na Moru covers an area of 20.00 Ha, contains 1,130 accommodation units with a total capacity to accommodate up to 3,390 persons. In addition to the enriched restaurant offer, newly built promenade that stretches along the entire camp and the beach leading to the Biograd town center, the camp "Park Soline" is the right choice for a family vacation. In addition to entertainment for children and evening entertainment, active holiday with attractive sports, you can relax walking along the long walking trails and recreational routes in a healthy environment, and the camp is an excellent choice for all nature lovers. The value of investments made so far in the camp "Park Soline" since the year 2000 amounted to approximately HRK 155,000,000.00 and owing to these investments, the number of overnight stays rose from 4,556 in 1996 to 260,579 overnight stays in 2015.

sports facilities:

Tennis center Ilirija, located in a pinewood Soline near the old city center, covers an area of 48.000 m2, consists of 20 tennis courts and multipurpose courts (14 clay and 6 color set tennis courts) with night lighting, restaurant and changing rooms as well as related facilities

ilirija travel

ilirija travel – destination management company: Owing to the development of new services and facilities, a high-quality, integrated and complementary tourism product has been created in response to the needs of the modern tourism demand, conditioned by technological, social, market factors and trends of ever more demanding markets. Among the most important backbones of the offering and implementation of these special programs and products there is the business operation in own additional facilities such as:

event boat "nada"

a multifunctional yacht, sized 35m and a capacity to accommodate 180 persons, with a complete restaurant, kitchen and bar which provides an excellent hospitality service during the voyage. Conferences, seminars, special events, unique business meetings, gala receptions and banquets, unique weddings, exclusive day and night cruises, incentive events are all activities organized in the Nada Event Boat which adapts to the individual requirements of the clients.

arsenal

which is a world heritage site, a multimedia center located in Zadar, built in the 17th century, which was renovated in 2005 as an indoor town square or as the center of public, cultural and entertainment life in the region in which over 100 public and private events are organized on an annual level.

diffuse hotel ražnjevića dvori ad 1307

multi-functional facility, located in the settlement of Polača named after the municipality in this settlement, in the heart of Ravni Kotari, which lies halfway between Biograd na Moru and Benkovac and is the first facility of such a category in the Republic of Croatia. This tourist complex has originated from the rural estate tradition, is an example of innovative tourism product conceived as a blend of tradition and contemporary trends.

Offers of trips, special offers according to the requirements of clients, sports programs, MICE etc.

hospitality

Restaurant "Marina Kornati", located in Marina Kornati, having the capacity for over 350 persons, which together with the recently refurbished Captain's Club having the capacity to accommodate 70 persons, or with the overall capacity for 420 persons meets the requirements of boaters for holding various and numerous events in Marina Kornati. Besides hospitality services, Captain's Club also provides services for a number of presentations on nautical products, and is an ideal venue for holding small conferences and events. In 2015, a total of 50 events were organized in Marina Kornati attended by over 12,830 persons.

Restaurant "Park Soline" is located in "Park Soline"****, close to the sea, ten minutes walk from the center of Biograd na Moru with an offer of food based on Mediterranean cuisine. The restaurant with a capacity to accommodate 280 people offers the possibility of organizing various events - family celebrations, banquets and receptions as well as meetings. The restaurant includes a Dalmatian tavern with a fireplace, coffee bar and taps of wine decorated as a wine cellar, which offers the possibility of buying and tasting top quality red and white wines produced from the native Croatian species.

Beach bar "Donat" is located in the building-magazine located in a protected cultural and historical complex of village Sv. Filip i Jakov settlement, which is also entered in the Register of Croatian cultural monuments of the Republic of Croatia. Today, it is classified as a beach hospitality facility or beach bar/ cocktail bar with capacity to accommodate 140 persons.

Lavender louge bar, located inside of Adriatic hotel, next to the beach, known for its Mediterranean design, fully designed for people to relax, with a beautiful view of the Pašman Channel, a place that offers the possibility of organizing a number of events of different character (MICE, weddings, banquets, cocktail bed bar, night club, etc.).

FINANCIAL STATEMENTS FOR PERIOD FROM 01/01/2016 TO 30/09/2016 31

events: Biograd Boat Show, the largest international autumn boat show in the Republic of Croatia and the largest boat show in South East Europe among the shows which takes place on the water, brings together all the key representatives of the nautical industry and tourism. At the beginning, that is, in the year 1999 the boat show was 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 win the top boat event considering its status of the city as a cradle of nautical tourism, at which all sectors of the boating and charter business will be presented, the Open Days grew into Biograd Boat Show. Since 2004, the event has been organized as a autumn boat show which has contributed to an improved boat offer and extension of the tourism season.

Biograd Boat Show was admitted to the International Federation of Boat Show Organisers-IFBSO at the 50th meeting of the Federation that took place in Istanbul, Turkey, in June 2014, and in 2015 it became its gold member. The shows of former members of the Federation were mainly organized in the major world centers, and the fact that the Biograd Boat Show is organized in the city of only 5,000 residents makes this success even greater, which is a great recognition not only to the Company as the boat show organizer, but also the Croatian boating industry and tourism.

Today the leading international autumn boat show has grown into the major Croatian boat event. From its early beginnings the boat show brings together all representatives of the boating industry and tourism, government institutions, umbrella organizations in tourism and boating as well as professional associations. Owing to this partnership with all relevant subjects, and now long-term exhibitors and partners, we have been developing Biograd Boat Show by listening to their needs, keeping up with trends in the boating and show industry while implementing our own vision of its development creating a high quality, distinctive, and above all, sustainable economic and tourism product, which since its beginnings further enriches the Croatian tourism supply, especially its post-season.

In 2015 the show was attended by over 307 registered exhibitors that participated with 300 vessels, while the number of visitors surpassed the figure of 15,000 with over 2000 realized business visits.

10. operating results physical operating results

The realized physical operating results in the third quarter of 2016 are within the expected and planned results at the level of all sectors of the company. Operating results realized in the pre-season and in the second quarter of 2016 continued both in the high season and post-season with a special emphasis on the growth in key physical performance indicators in certain sectors of the Company that are highly important considering the market environment, especially the nautical sector (a significant increase in the number of berths in the existing ports of nautical tourism and the construction of new nautical tourism ports in the Company directly competitive to the central and southern Dalmatia ports).

In the nautical sector whose fundamental physical operating parameters, the berth contract and vessels in transit - sailing in and overnight stays that mostly affect the realization of other physical operating parameters of the entire sector, particularly in terms of generating revenues (activities of port service, crane activities, parking, hospitality), realized a significant increase in physical and financial turnover, especially in the segment of acceptance of vessels in transit (sailing in and overnight stays of vessels), while the number of signed berth contracts during high season has not been compensated or is slightly lower, although this is not reflected on the revenue position of the contract berth which is at the level of the previous fiscal year. Despite a low number of vessels based on the contract berth, the revenue of the nautical sector is within the planned and expected revenue, although it is lower compared to operating revenues in 2015 due to the expected decrease in revenues from nautical events and the lack of a single nautical event that took place in May 2015.

In the hotel sector, the forecasted growth in the physical operating results or overnight stays has been realized by 1%, compared to the same period of 2015, with a special emphasis on the growth of the most important market segment of individual guests, where the combination of the target marketing campaigns, pricing policy and additional complementary and integrated offer realized through the destination management company Ilirija Travel has resulted in the continuation and retention of the growth in physical operating results as in the second

quarter of 2016.

Regarding the camping sector, due to high seasonality of the entire Croatian camping tourism and dependence on weather conditions, which in the month of June were highly negative and in addition to an unfavorable schedule of holidays, in the first nine months in relation to the pre-season, the Company managed to reduce, but not completely compensate for the physical turnover or overnight stays that are slightly lower or decreased by 0.86% compared to the same period in 2015, but which has not affected the total revenues of the camping sector which increased by 3% compared to the same period in 2015.

In the fourth quarter of 2016, that is by the end of the year, the Company's business activities will be intensified in the nautical sector due to the organization of boat show and nautical events - regatta, most of them take place in the off-season, followed by the hotel sector, which records good booking and occupancy in the remaining season and mostly through the destination management company/DMC Ilirija Travel that organizes individual events.

hotel sector

In the first nine months of 2016, the hotel sector recorded some 30,918 guests that stayed, which is a fall by 3% compared to the same period of 2015, which with an average stay of 3.81 days, which is a rise by 5%, realized a total of 117,861 overnight stays, 1% more than in the same period in 2015.

In the structure of realized overnight stays among the top five source markets, there is (1) the Slovenian market with a share of 16.2% of overnight stays, which decreased by 16%, compensated for by (2) the Croatian market with a share of 14.8% with trend of rise by 15%, (3) the German market decreased by 7% with 12.4% overnight stays, (4.) the Austrian marked also decreased by 14% from 9.0%, and (5) the stable Slovakian market with a share of 8.4 % overnight stays.

A significant growth, except for the Croatian market, has been realized by the markets where investments in the target stakeholders were systematically made, these are: the French market recording an increase by 11%, the Finnish market, which has assumed a share of 1.8% in total overnight stays, and so far insignificant markets of South Korea, Hungary, Bosnia and Herzegovina, Poland, and countries such as Sweden, United Kingdom, Ireland and Belgium.

According to market segments, the hotel sector has recorded a rise in the share of allotments by 9.6%, a rise in the share of individuals from 8.6%, a decline in the group segment by 14.7% and a decline in fixed lease by 3.8% which is a good trend of a change in the market structure.

In the observed period, the capacity utilization and hotel occupancy days slightly increase, owing to better occupancy of a part of the pre-season and the peak season, that is, the stagnation of other periods, which by retaining the average price of overnight stays is a continuation of maintaining the existing market position.

Revenues from hotel services amount to HRK 42,778,623.97 and remained at the same level compared to the year 2015 and make up for 37% of the total operating revenues of the Company.

Hotel sector capacities

		NUMBER OF ROOMS			NUMBER OF BEDS
ILIRIJA D.D.	2014	2015	2016	INDEX 16/15	2014	2015	2016	INDEX 16/15
Hotel ILIRIJA	165	165	165	1,00	337	337	337	1,00
Hotel KORNATI	106	106	106	1,00	216	216	216	1,00
HOTELSKI KAPACITETI - ILIRIJA d.d. Hotel ADRIATIC	100	100	100	1,00	210	210	210	1,00
Hotel Villa DONAT	72	72	72	1,00	144	144	144	1,00
BROJ SOBA ILIRIJA d.d. TOTAL 2014 2015 2016 index 16/15	BROJ KREVETA 443 2014 2015	443 2016 index 16/15	443	1,00	907	907	907	1,00

% Share of individual hotel (number of beds)

Overview and comparison of realized arrivals and overnight stays from 01/01/2016 to 30/09/2016 to the same period in 2014 and 2015

	HOTEL INDUSTRY
PROFIT CENTER		ARRIVALS		INDEX	OVERNIGHT STAYS	INDEX
	2014	2015	2016	16 / 15	2014	2015	2016	16 / 15
Hotel ILIRIJA	16.064	15.601	14.322	92	51.201	49.202	49.483	101
Hotel KORNATI	8.380	8.238	8.416	102	28.471	28.821	27.940	97
Hotel ADRIATIC	4.700	5.217	5.469	105	23.941	23.568	25.487	108
Hotel Villa DONAT	3.091	2.839	2.711	95	14.431	14.631	14.951	102
TOTAL	32.235	31.895	30.918	97	118.044	116.222	117.861	101

Graph of the realized overnight stays by source markets for the period from 01/01/2016 to 30/09/2016

Occupancy rate for the period from 01/01/2016 to 30/09/2016 and the comparison to the same period of 2015

Percentage share

MONTH			ILIRIJA					KORNATI					ADRIATIC					DONAT			GRANDTOTAL
	Total rooms	2015	%	2016	%	Total rooms	2015	%	2016	%	Total rooms	2015	%	2016	%	Total rooms	2015	%	2016	%	Total rooms	2015	%	2016	%
JANUARY (I)	5.115	0	0,00%	127	2,48%	3.286	681	20,72%	673	20,48%	3.100	0	0,00%	0	0,00%	2.232	0	0,00%	0	0,00%	13.733	681	4,96%	800	5,83%
FEBRUARY (II)	4.620	0	0,00%	0	0,00%	2.968	301	10,14%	404	13,61%	2.800	0	0,00%	0	0,00%	2.016	0	0,00%	0	0,00%	12.404	301	2,43%	404	3,26%
MARCH (III)	5.115	852	16,66%	968	18,92%	3.286	382	11,63%	189	5,75%	3.100	0	0,00%	0	0,00%	2.232	0	0,00%	0	0,00%	13.733	1.234	8,99%	1.157	8,42%
APRIL (IV)	4.950	2.285	46,16%	2.314	46,75%	3.180	440	13,84%	247	7,77%	3.000	251	8,37%	235	7,83%	2.160	0	0,00%	0	0,00%	13.290	2.976	22,39%	2.796	21,04%
MAY (V)	5.115	3.701	72,36%	3.452	67,49%	3.286	1.534	46,68%	1.573	47,87%	3.100	578	18,65%	1.204	38,84%	2.232	123	5,51%	162	7,26%	13.733	5.936	43,22%	6.391	46,54%
JUNE (VI)	4.950	3.323	67,13%	3.413	68,95%	3.180	2.186	68,74%	2.158	67,86%	3.000	1.952	65,07%	2.243	74,77%	2.160	1.500	69,44%	1.080	50,00%	13.290	8.961	67,43%	8.894	66,92%
JULY (VII)	5.115	4.556	89,07%	4.574	89,42%	3.286	2.931	89,20%	2.959	90,05%	3.100	2.724	87,87%	2.848	91,87%	2.232	1.940	86,92%	2.120	94,98%	13.733	12.151	88,48%	12.501	91,03%
AUGUST (VIII)	5.115	4.665	91,20%	4.829	94,41%	3.286	2.914	88,68%	3.121	94,98%	3.100	2.975	95,97%	2.999	96,74%	2.232	2.008	89,96%	2.122	95,07%	13.733	12.562	91,47%	13.071	95,18%
SEPTEMBER (IX)	4.950	4.041	81,64%	3.998	80,77%	3.180	2.707	85,13%	2.598	81,70%	3.000	2.218	73,93%	2.302	76,73%	2.160	833	38,56%	874	40,46%	13.290	9.799	73,73%	9.772	73,53%
TOTAL			45.045 23.423 52,00% 23.675		53%	28.938		14.076 48,64% 13.922 48,11%			27.300	10.698	39%		11.831 43,34%	19.656	6.404	33%	6.358		32% 120.939		54.601 45,15%		55.786 46,13%

Occupancy rate for the period from 01/01/2016 to 30/09/2016 and the comparison to the same period of 2015

Occupancy days

MONTH	ILIRIJA							KORNATI					ADRIATIC					DONAT			GRANDTOTAL
	Total rooms	2015	Days	2016	Days	Total rooms	2015	Days	2016	Days	Total rooms	2015	Days	2016	Days	Total rooms	2015	Days	2016	Days	Total rooms	2015	Days	2016	Days
JANUARY (I)	5.115	0	0	127	1	3.286	681	6	673	6	3.100	0	0	0	0	2.232	0	0	0	0	13.733	681	2	800	2
FEBRUARY (II)	4.620	0	0	0	0	2.968	301	3	404	4	2.800	0	0	0	0	2.016	0	0	0	0	12.404	301	1	404	1
MARCH (III)	5.115	852	5	968	6	3.286	382	4	189	2	3.100	0	0	0	0	2.232	0	0	0	0	13.733	1.234	3	1.157	3
APRIL (IV)	4.950	2.285	14	2.314	14	3.180	440	4	247	2	3.000	251	2	235	2	2.160	0	0	0	0	13.290	2.976	7	2.796	6
MAY (V)	5.115	3.701	22	3.452	21	3.286	1.534	14	1.573	15	3.100	578	6	1.204	12	2.232	123	2	162	2	13.733	5.936	13	6.391	14
JUNE (VI)	4.950	3.323	20	3.413	21	3.180	2.186	21	2.158	20	3.000	1.952	19	2.243	22	2.160	1.500	21	1.080	15	13.290	8.961	20	8.894	20
JULY (VII)	5.115	4.556	28	4.574	28	3.286	2.931	28	2.959	28	3.100	2.724	26	2.848	28	2.232	1.940	27	2.120	29	13.733	12.151	27	12.501	28
AUGUST (VIII)	5.115	4.665	28	4.829	29	3.286	2.914	27	3.121	29	3.100	2.975	28	2.999	30	2.232	2.008	28	2.122	29	13.733	12.562	28	13.071	30
SEPTEMBER (IX)	4.950	4.041	24	3.998	24	3.180	2.707	26	2.598	25	3.000	2.218	21	2.302	23	2.160	833	12	874	12	13.290	9.799	22	9.772	22
TOTAL	45.045	23.423	142	23.675	143	28.938	14.076	133	13.922	131	27.300	10.698	107	11.831	118	19.656	6.404	89	6.358	88	120.939	54.601	123	55.786	126

Monthly comparison of revenues/overnight stays of Ilirija hotels from 01/01/2016 to 30/09/2016 and comparison to the same period of 2015

		GENERATED REVENUE			OVERNIGHT STAYS		AVERAGE PRICE IN HRK			AVERAGE PRICE IN €
MONTH	2015	2016	INDEX	2015	2016	INDEX	2015	2016	2015	2016	INDEX
JANUARY	504.665,66	458.980,79	0,91	1.159	1.442	1,24	435,43	318,29	56,59	41,57	0,73
FEBRUARY	123.508,47	334.933,36	2,71	493	701	0,00	0,00	0,00	0,00	0,00	0,00
MARCH	494.898,88	642.780,24	1,30	2.184	2.274	1,04	226,60	282,67	29,64	37,57	1,27
APRIL	1.423.601,41	1.480.970,56	1,04	5.127	4.660	0,91	277,67	317,80	36,58	42,50	1,16
MAY	2.987.906,32	3.118.310,35	1,04	10.474	11.226	1,07	285,27	277,78	37,63	37,10	0,99
JUNE	6.485.413,33	6.116.130,92	0,94	18.231	18.207	1,00	355,74	335,92	46,93	44,71	0,95
JULY	9.366.733,66	9.516.904,07	1,02	30.361	30.336	1,00	308,51	313,72	40,64	41,95	1,03
AUGUST	10.573.838,57	10.950.751,87	1,04	30.022	30.663	1,02	352,20	357,13	46,63	47,77	1,02
SEPTEMBER	6.973.430,48	6.454.164,22	0,93	18.171	18.352	1,01	383,77	351,69	50,19	46,84	0,93
OCTOBER	3.260.914,46	0,00	0,00	10.838	0	0,00	300,88	0,00	39,59	0,00	0,00
NOVEMBER	463.418,09	0,00	0,00	2.011	0	0,00	230,44	0,00	30,20	0,00	0,00
DECEMBER	768.552,30	0,00	0,00	1.572	0	0,00	488,90	0,00	64,03	0,00	0,00
TOTAL	43.426.881,63	39.073.926,38	0,90	130.643	117.861	0,90	332,41	331,53	43,63	44,05	1,01
30.09.2016.	38.933.996,78	39.073.926,38	1,00	116.222	117.861	1,01	335,00	331,53	44,13	44,34	1,00

Revenues per room sold in 2016 700,43 kn 93,06 €

Revenues per room sold in 2015	713,06 kn	93,58 €
Lavander	2015	2016	INDEX
31.12.	1.120.588,98	968.883,13	0,86
30.09.	1.093.246,82	968.883,13	0,89
Aquatic Center	2015	2016	INDEX
31.12.	2.599.501,79	2.468.975,39	0,95
30.09.	2.586.075,96	2.468.975,39	0,95
Tennis Center	2015	2016	INDEX
31.12.	269.271,03	266.516,09	0,99
30.09.	261.827,76	266.516,09	1,02
Beach bar	2015	2016	INDEX
31.12.	428.130,98	319.351,14	0,75
30.09.	419.444,65	319.351,14	0,76
TOTAL:	2015	2016	INDEX
31.12.	47.844.374,41	43.097.652,13	0,90
30.09.	43.294.591,97	43.097.652,13	1,00

Revenues per room sold – 2016:	772,55 kn	102,64 €
Revenues per room sold – 2015:	792,93 kn	104,07 €

ilirija travel complementary product

In the reporting period for the first nine months of 2016, through the system and organization of the destination management company (DMC) Ilirija Travel and Arsenal, over 300 individual events, events, weddings, trips, regattas, conferences, congresses, etc. with a total number of over 31,835 guests, was realized mostly in the pre-season and post-season, which is the backbone of the Company's extension of the season by offering complementary forms of tourism and special interest tourism.

Other revenues were realized in the amount of HRK 6,031,464.81 and are higher by 5% than in the same period in 2015 and they make for 5% of the total operating revenues of the Company.

nautics

In the nautical sector the overnight stays are not the core business of the marina, they are indicated for informative purposes, while the core nautical activities in terms of generating revenues are: (1) the berth on a contract basis for vessels in the marina, (2) transit number of inbound vessels from other ports (3) repair services, (4) lifting services, (5) parking and (6) hospitality.

In the first nine months of 2016, 705 berth contracts were concluded, of which 440 contracts for individual vessels, that make for 62% of total vessels in the Marina Kornati, and 265 vessels in charter that make for 38% of the total number of vessels. Compared to the same period of 2015, there is a slight decrease in the number of berth contracts as a result of a greater number of contracts concluded for a shorter period of time mainly with local customers and an increase in the capacity of nautical tourism ports at the Adriatic sea, especially in the nautical ports of Central Dalmatia, which are direct competitors to the Company. The foregoing did not affect the position of revenues earned from the contractual berth that remained at the same level compared to the period of 2015.

In the third quarter of 2016, a total of 3,308 of inbound vessels were recorded in transit berth, that have a berth in some other marinas, which is a rise by 3% compared to the same period of 2015 when in the same period 3,213 vessels sailed in. In the observed period, an increase in vessels in transit berth of greater length, that is vessels over sixteen meters in length, is especially important, that compared to the last fiscal year realized a rise of inbound vessels by 24%. The vessels in transit berth also realized 11,264 overnight stays, which is a rise by 6% compared to the same period in 2015 when 10,629 overnight stays were realized. The rise in the physical turnover in the transit berth, the number of inbound vessels sailing in and overnight stays of vessels in transit, resulted in a rise in revenues by 7% as a result of changed trend among boaters who instead of seasonal berth decided to hire multi-day transit berth.

In the first nine months of 2016, some 3,226 port service and crane operations were carried out, which compared to the same period of 2015 is a fall by 6% as a result of the later opening of the charter season, unfavorable weather conditions in the first quarter of this fiscal year and the opening of a new crane just next to the marina, providing services of lowering, lifting and servicing vessels up to 9 meters, while the marina Kornati recorded growth in port service and crane operations for boats over 17 meters in length. In the reporting period, 26 nautical events took place, which were attended by 1,138 vessels with a total of 9,538 sailors. Regarding the nautical events, compared to the previous fiscal year, far the most important regatta event has not taken place, according to financial parameters of operations (revenues and profits), Engineering Challenge Cup (ECC) lasting for seven days, which was attended by about 350 people, with 55 vessels. This nautical event in 2015 resulted in the generation of the income of HRK 1,667,964.93 that will not be generated in the total revenues of the nautical sector (income from berth, food and beverage services) which will be mainly reflected in the total revenue of the of the nautical sector of the Company.

From 20th to 23rd October 2016, the eighteenth Biograd Boat Show will be held, which will surpass the results achieved so far owing to much earlier commencement of the sale and booking of the exhibition space as well as considering any other relevant indicators (number of exhibitors, vessels, premieres, seminars, etc.), which contributes to its affirmation as a representative symbol of the tourist offer of Zadar destinations, especially Croatian nautical offer. The jubilee eighteenth organization of the largest boat show in Croatia and the leading Central European nautical boat show organized on the water introduc es additional novelties as result of keeping up with and leading the trends in nautical tourism and indus try, especially in the part of the growing charter offer, where Charter info Center, due to the huge interest by charter companies, has been renamed to Biograd Charter Show with congress room in Hall B. At the boat show, which in the last two years has been inten sively developing B2B activities, as a result of which the show is becoming a competitive tourism and economic product, by the time this report is complet ed, some 330 exhibitors participating with more than 300 vessels, 40 premier vessels will be presented at the show, 5 regatta events will be organized at which over 600 sailors on 100 boats will participate.

Marina Kornati capacities

	Length of piers / m	Number of berths	Dry berth	Total no. of berths
Central marina	923	365	70	435
Western marina	262	190	0	190
Southern marina	180	80	0	80
Hotel marina	450	100	0	100
TOTAL	1.815	735	70	805

% Share of a individual marina - berths

Cumulative overview of physical turnover of Marina Kornati during the period from 01/01/2016-30/09/2016 and comparison with the same period in 2015

Physical turover items							Months 2015
Name of item	Measur. unit	1	2	3	4	5	6	7	8	9	10	11	12
Contract-based berth - individual	Contracted vessel	126	293	340	381	401	424	434	441	445	0	0	0
Contract-based berth - charter	Contracted vessel	0	2	14	258	265	268	271	272	272	0	0	0
TOTAL Contract-based berth	Contracted vessel	126	295	354	639	666	692	705	713	717	0	0	0
Transit berth - inbound vessels sailing in	Sailing in of vessel	6	16	60	172	528	954	1.722	2.671	3.213	0	0	0
Transit berth - overnight stay of vessel	Boat/day	152	388	878	1.645	2.745	3.867	6.199	9.390	10.629	0	0	0
Transit berth - overnight stay of vessel crew	Overnight stay of person
Port service	Operation	135	403	798	1.225	1.677	2.108	2.575	3.130	3.426	0	0	0

Physical turover items							Months 2016
Name of item	Measur. unit	1	2	3	4	5	6	7	8	9	10	11	12
Contract-based berth - individual	Contracted vessel	118	283	352	373	406	423	434	437	440	0	0	0
Contract-based berth - charter	Contracted vessel	2	3	19	245	255	261	263	265	265	0	0	0
TOTAL Contract-based berth	Contracted vessel	120	286	371	618	661	684	697	702	705	0	0	0
Transit berth - inbound vessels sailing in	Sailing in of vessel	5	13	42	171	578	1.088	1.847	2.811	3.308	0	0	0
Transit berth - overnight stay of vessel	Boat/day	200	418	805	1.560	2.722	4.014	6.638	9.977	11.264	0	0	0
Transit berth - overnight stay of vessel crew	Overnight stay of person
Port service	Operation	95	300	605	1.033	1.503	1.981	2.436	2.926	3.226	0	0	0

Vessels with berth contract in the period from 01/01/2016-30/09/2016 and comparison with the same period in 2015

Purpose	Type of berth	Position of berth	01/01-30/09	% total	01/01-30/09	% total	Index
			2016	vessels	2015	vessels	2016/2015
	Annual berth in the sea	Central aquatorium	307	44	316	44	97
		Southern aquatorium	60	9	54	8	111
		Western aquatorium	4	1	4	1	100
VESSELS OF INDIVIDUAL		Hotel port	38	5	37	5	103
OWNERS	Annual berth in the sea	Marina land	5	1	4	1	125
	Annual berth on the land	Marina aquatorium	15	2	19	3	79
		Hotel port	11	2	11	2	100
	Total individual vessels		440	62	445	62	99
	Annual berth in the sea	Central aquatorium	61	9	58	8	105
		Southern aquatorium	0	0	9	1	0
CHARTER VESSELS		Western aquatorium	192	27	196	27	98
		Hotel port	12	2	9	1	133
	Total charter vessels		265	38	272	38	97
	Total vessels		705	100	717	100	98

Vessels based on berth contract

Index 2016/2015 103

Transit berth – inbound vessels during the period from 01/01/2016-30/09/2016 and comparison with the same period in 2015

		Individually monthly			Cumulatively monthly
2016	2016	2015	INDEX	2016	2015	INDEX
Month			2016/2015			2016/2015
1	5	6	83	5	6	83
2	8	10	80	13	16	81
3	29	44	66	42	60	70
4	129	112	115	171	172	99
5	407	356	114	578	528	109
6	510	426	120	1.088	954	114
7	759	768	99	1.847	1.722	107
8	964	949	102	2.811	2.671	105
9	497	542	92	3.308	3.213	103
10	0	0	0	0	0	0
11	0	0	0	0	0	0
12	0	0	0	0	0	0
Total 2016	3.308
Total 2015	3.213

Index 2016/2015 106

Transit berth – overnight stay of vessels during the period from 01/01/2016-30/09/2016 and comparison with the same period in 2015

		Individually monthly			Cumulatively monthly
2016	2016	2015	INDEX	2016	2015	INDEX
Month			2016/2015			2016/2015
1	200	152	132	200	152	132
2	218	236	92	418	388	108
3	387	490	79	805	878	92
4	755	767	98	1.560	1.645	95
5	1.162	1.100	106	2.722	2.745	99
6	1.292	1.122	115	4.014	3.867	104
7	2.624	2.332	113	6.638	6.199	107
8	3.339	3.191	105	9.977	9.390	106
9	1.287	1.239	104	11.264	10.629	106
10	0	0	0	0	0	0
11	0	0	0	0	0	0
12	0	0	0	0	0	0
Total 2016	11.264
Total 2015	10.629

Index 2016/2015 94

Activities of port repair services during the period from 01/01/2016-30/09/2016 and comparison with the same period in 2015

		Individually monthly			Cumulatively monthly
2016	2016	2015	INDEX	2016	2015	INDEX
Month			2016/2015			2016/2015
1	95	135	70	95	135	70
2	205	268	76	300	403	74
3	305	395	77	605	798	76
4	428	427	100	1.033	1.225	84
5	470	452	104	1.503	1.677	90
6	478	431	111	1.981	2.108	94
7	455	467	97	2.436	2.575	95
8	490	555	88	2.926	3.130	93
9	300	296	101	3.226	3.426	94
10	0	0	0	0	0	0
11	0	0	0	0	0	0
12	0	0	0	0	0	0
Total 2016	3.226
Total 2015	3.426

Revenues generated by Marina Kornati during the period from 01/01/2016-30/09/2016 individually by months and comparison with the same period in 2015

	REVENUES OF MARINA KORNATI 2016 INDIVIDUALLY BY MONTHS
	Revenue positions						Months 2016							2016	2015	Index
		1	2	3	4	5	6	7	8	9	10	11	12	cumulat.	cumulat.	2016/2015
I	Daily berth	72.419	52.067	80.927	135.568	280.823	372.261	545.825	702.859	319.954	0	0	0	2.562.703	2.402.986	107
II	Contracted berth with accessories	4.388.719	5.622.733	2.455.402	4.067.008	2.811.079	785.893	5.532.139	200.350	168.655	0	0	0	26.031.978	26.122.101	100
III	Port service	117.793	231.835	311.397	454.035	411.645	421.480	233.743	232.857	140.108	0	0	0	2.554.893	2.585.026	99
IV	Vehicle parking	1.472	4.833	22.264	112.397	210.145	231.944	389.820	381.406	374.903	0	0	0	1.729.184	1.733.308	100
V	Other services	4.352	58.839	23.155	71.151	64.593	50.823	119.985	115.658	68.930	0	0	0	577.486	655.349	88
VI	Business cooperation	0	0	0	1.082.859	4.500	1.313	1.050.944	0	-5.778	0	0	0	2.133.838	2.129.243	100
VII	Boat show and events	0	0	0	0	0	0	34.119	173.458	933.639	0	0	0	1.141.216	1.805.240	63
	TOTAL:	4.584.755	5.970.308	2.893.145	5.923.018	3.782.785	1.863.714	7.906.575	1.806.588	2.000.411	0	0	0	36.731.298	37.433.253	98

	REVENUES OF MARINA KORNATI 2015 INDIVIDUALLY BY MONTHS
	Revenue positions						Months 2015							2015	2014	Index
		1	2	3	4	5	6	7	8	9	10	11	12	cumulat.	cumulat.	2015/2014
I	Daily berth	34.901	45.351	88.723	167.703	314.909	312.393	468.109	666.507	304.390	0	0	0	2.402.986	2.342.543	103
II	Contracted berth with accessories	4.337.435	5.849.005	1.552.678	4.069.631	3.202.264	783.699	6.026.428	162.595	138.367	0	0	0	26.122.101	27.070.919	96
III	Port service	210.179	275.204	386.386	386.775	403.737	299.670	246.378	235.036	141.662	0	0	0	2.585.026	2.349.385	110
IV	Vehicle parking	2.424	8.136	22.023	100.866	222.990	234.682	340.555	458.824	342.808	0	0	0	1.733.308	1.845.038	94
V	Other services	4.610	55.500	45.657	30.577	61.135	102.410	97.501	157.230	100.730	0	0	0	655.349	481.977	136
VI	Business cooperation	0	11.836	0	1.055.064	18.235	18.910	1.072.626	-47.428	0	0	0	0	2.129.243	2.192.912	97
VII	Boat show and events	0	9.130	5.840	0	1.462.572	3.750	31.642	177.775	114.531	0	0	0	1.805.240	438.129	412
	TOTAL:	4.589.548	6.254.161	2.101.307	5.810.616	5.685.842	1.755.514	8.283.239	1.810.539	1.142.488	0	0	0	37.433.253	36.720.903	102

Cumulative overview of revenues generated by Marina Kornati during the period from 01/01/2016-30/09/2016 by months and comparison with the same period in 2015

	REVENUES OF MARINA KORNATI 2016 CUMULATIVELY BY MONTHS
	Revenue positions						Months 2016							% total
		1	2	3	4	5	6	7	8	9	10	11	12	revenue
I	Daily berth	72.419	124.487	205.413	340.982	621.805	994.066	1.539.891	2.242.750	2.562.703	0	0	0	0
II	Contracted berth with accessories	4.388.719	10.011.452	12.466.854	16.533.863	19.344.941	20.130.834	25.662.973	25.863.323	26.031.978	0	0	0	0
III	Port service	117.793	349.628	661.025	1.115.060	1.526.706	1.948.186	2.181.930	2.414.787	2.554.893	0	0	0	0
IV	Vehicle parking	1.472	6.305	28.569	140.966	351.112	583.056	972.876	1.354.281	1.729.184	0	0	0	0
V	Other services	4.352	63.191	86.346	157.497	222.089	272.913	392.898	508.556	577.486	0	0	0	0
VI	Business cooperation	0	0	0	1.082.859	1.087.359	1.088.672	2.139.616	2.139.616	2.133.838	0	0	0	0
VII	Boat show and events	0	0	0				34.119	207.577	1.141.216	0	0	0	0
	TOTAL:	4.584.755	10.555.063	13.448.208	19.371.227	23.154.012	25.017.727	32.924.303	34.730.890	36.731.298	0	0	0	0

	REVENUES OF MARINA KORNATI 2015 CUMULATIVELY BY MONTHS
	Revenue positions						Months 2015							% total
		1	2	3	4	5	6	7	8	9	10	11	12	revenue
I	Daily berth	34.901	80.252	168.975	336.678	651.587	963.980	1.432.089	2.098.596	2.402.986	0	0	0	0
II	Contracted berth with accessories	4.337.435	10.186.439	11.739.117	15.808.748	19.011.012	19.794.711	25.821.140	25.983.735	26.122.101	0	0	0	0
III	Port service	210.179	485.383	871.768	1.258.544	1.662.281	1.961.951	2.208.328	2.443.364	2.585.026	0	0	0	0
IV	Vehicle parking	2.424	10.560	32.583	133.449	356.439	591.121	931.676	1.390.500	1.733.308	0	0	0	0
V	Other services	4.610	60.110	105.766	136.343	197.478	299.888	397.389	554.620	655.349	0	0	0	0
VI	Business cooperation	0	11.836	11.836	1.066.900	1.085.135	1.104.045	2.176.671	2.129.243	2.129.243	0	0	0	0
VII	Boat show and events	0	9.130	14.970	14.970	1.477.542	1.481.292	1.512.934	1.690.710	1.805.240	0	0	0	0
	TOTAL:	4.589.548	10.843.709	12.945.016	18.755.632	24.441.474	26.196.988	34.480.227	36.290.768	37.433.253	0	0	0	0

camping

In the first three quarters of 2016, the camping sector realized 33,077 arrivals, which compared to the same period last fiscal year is a slightly decreased number of arrivals by 0.9%, as a result of unfavorable schedule of holidays and exceptionally bad weather in June, which greatly impact the realization of physical turnover in the camping sector in the Republic of Croatia, and as a result of non-organizing the Vespa World Days, held in June 2015, which also resulted in the decrease in the number of overnight stays by 0.86%. By the end of the third quarter compared to the first six months of this fiscal year, when due to the above reasons, the Camping sector recorded the expected decline in physical turnover, that is, overnight stays by 3% and arrivals by 10.8%, they were in the following months of high season and post-season almost compensated or were only slightly lower compared to the same period in the last fiscal year owing to the position of sales.

For these reasons, the decline is recorded in the segment of individual guests, while at the same time the number of overnight stays in case of the Agency's guests rose by 5.98%, and the number of overnight stays with lump sum guests by 6.79% and the number of overnight stays in the segment of mobile homes rose by 7.75%, which resulted in a slight reduction in the number of overnight stays by only 0.86%.

The slight decline in the physical turnover did not affect the position of revenues where the contracted and realized revenues amount to HRK 24,769,090.13, which is an increase by 3% compared to the same period last year, with the rise in revenues from the agencies by 5% as a result of an increase in the number of leased camping pitches and lump sum guests with a rise in contracted revenues by 1%, which is a result of booking of lump sum-based pitches at a higher price compared to the last year. Revenues from mobile homes rose by 13% as a result of excellent booking thereof, while the revenues from individual guests declined as compared to the last year's figures mainly owing to holding Vespa World Days in Biograd in the second quarter of 2015, that is, higher individual booking at those times, which meant lower agency commission and higher direct income.

The shift of holidays on the Dutch market has led to overlapping in demand from the German market, and at the same time non-holding of Vespa World Days, influenced the minimal decrease in the number of arrivals and overnight stays by 0.89%

The index of the number of overnight stays equals the index of the number of arrivals, so the average number of days in the camp remained at last year's level of 7.80 days. Average days of stay vary by segments within the overall results, but the most important is certainly the extension of the average days of stay in the segment of mobile homes from 7.85 days to 7.93 days. In addition to the segment of mobile homes, an increase is recorded in the segment of lump sum guests where an increase is recorded from 8.21 days to 8.34 days. In the segment of individual and allottment guests, a minimal decline from 7.16 days to 7.03 days and from 8.47 days to 8.34 days has been recorded. A totally equal average number of days of stay from 7.80 days is an indicator of guest satisfaction with the service provided which is why the length of stay remains unchanged.

In the structure of realized overnight stays, the top five source markets are (1) the Slovenian market with a share of 23% overnight stays, (2) the Czech market with a share of 19% overnight stays, (3) the German market with a share of 16% overnight stays, (4) the Dutch market with a share of 10% overnight stays and (5) the Croatian and Polish market with a share of 6% overnight stays.

In the business segment of mobile homes, the largest

increase was recorded by the guests from the Hun garian market (33.71%), the Polish market (27.23%), the Czech market (21.84%), the German market (9.18%), Austrian market (8.72%) and Slovenian market (8.41%) compared to the year 2015. In the business segments of camping units, the highest increase is recorded by the guests from the Slovenian market (14.92%), the Czech market (8.28%), the French market (4.70%) and the Danish market (1.24%).

At the same time, the structure of overnight stays ac cording to market segments is dominated by individ uals with a share of 32%, and agencies with a share of 31%, followed by the guests in mobile homes with a share of 21% of overnight stays, which compared to the same period last year increased by 1% and fi nally with lump sum guests with a share in the total overnight stays of 16% and with an increase by 2% compared to the same period in the year 2015.

To conclude, despite an overall reduction in the num ber of overnight stays by 0.86%, price optimization, marketing activities and strategically planned invest ments in key sales channels resulted in an increased position of revenues, that is, increased revenues by 3% compared to the same period in the year 2015 in accordance with the Sales Plan and the budget for 2016.

Capacities of the Camp "Park Soline"

		2012	2013	2014	2015	2016
	EXTRA ZONE
	PITCH	80	80	80	81	81
I.	CAMP SITES	0	0	0	0	0
	TOTAL	80	80	80	81	81
	FIRST ZONE
	PITCH	327	336	345	326	326
	CAMP SITES	0	0	0	0	0
II.	TOTAL	327	336	345	326	326
	SECOND ZONE
	PITCH	157	168	168	182	182
	CAMP SITES	0	0	0	0	0
III.	TOTAL	157	168	168	182	182
	THIRD ZONE
	PITCH	161	342	342	347	347
	CAMP SITES	263	130	188	187	194
IV.	TOTAL	424	472	530	534	541
	GRANDTOTAL
	PITCH	725	926	935	936	936
∑	CAMP SITES	263	130	188	187	194
	TOTAL	988	1056	1123	1123	1130

Arrivals and overnight stays by source markets and average days of stay during the period from 01/01/2016 to 30/09/2016 and comparison with the same period in 2015

	2016		2015		INDEX 16/15		AVERAGE DAYS OF STAY
Market	Arrivals	Overnight stays	Arrivals	Overnight stays	Arrivals	Overnight stays	2016	2015
Austria	1.675	11.948	1.893	12.859	88,48	92,92	7,13	6,79
Belgium	464	3.626	562	4.505	82,56	80,49	7,81	8,02
B&H	274	1.248	207	912	132,37	136,84	4,55	4,41
Czech Rep.	6.386	49.989	5.577	43.905	114,51	113,86	7,83	7,87
Denmark	730	6.687	700	6.524	104,29	102,50	9,16	9,32
France	609	4.263	692	5.209	88,01	81,84	7,00	7,53
Croatia	1.615	14.654	1.694	15.115	95,34	96,95	9,07	8,92
Italy	1.121	6.486	1.568	9.313	71,49	69,64	5,79	5,94
Hungary	1.351	8.433	1.303	7.968	103,68	105,84	6,24	6,12
Netherlands	2.556	24.955	2.557	25.494	99,96	97,89	9,76	9,97
Germany	4.792	40.331	5.122	43.491	93,56	92,73	8,42	8,49
Poland	1.785	14.443	1.509	12.520	118,29	115,36	8,09	8,30
Slovakia	472	3.057	507	3.999	93,10	76,44	6,48	7,89
Slovenia	7.961	59.547	8.270	61.717	96,26	96,48	7,48	7,46
Switzerland	320	1.811	311	1.417	102,89	127,81	5,66	4,56
Other	966	6.461	907	5.218	106,50	123,82	6,69	5,75
TOTAL	33.077	257.939	33.379	260.166	99,10	99,14	7,80	7,79

Overnight stays by source markets during the period from 01/01/2016 to 30/09/2016

Cumulative overview of daily and monthly occupancy of accommodation units of the camp during the period from 22/04 to 30/09/2016

MONTH			APRIL				MAY				JUNE				JULY
SEGMENT	MAXIMUM POSSIBLE PITCHES DAYS	PITCHES DAYS	OCCUPANCY IN %	OCCUPANCY DAYS	MAXIMUM POSSIBLE PITCHES DAYS	PITCHES DAYS	OCCUPANCY IN %	OCCUPANCY DAYS	MAXIMUM POSSIBLE PITCHES DAYS	PITCHES DAYS	OCCUPANCY IN %	OCCUPANCY DAYS	MAXIMUM POSSIBLE PITCHES DAYS	PITCHES DAYS	OCCUPANCY IN %	OCCUPANCY DAYS
MOBILES ILIRIJA	1.215	207	17,04%	1,53	4.185	992	23,70%	7,35	4.050	2.008	49,58%	14,87	4.185	4.067	97,18%	30,13
AGENCIES	1.917	1.917	100,00%	9,00	6.603	6.603	100,00%	31,00	6.390	6.390	100,00%	30,00	6.603	6.603	100,00%	31,00
LUMP SUM	1.566	1.566	100,00%	9,00	5.394	5.394	100,00%	31,00	5.160	5.160	100,00%	30,00	5.332	5.332	100,00%	31,00
INDIVIDUALS EXTRA, I, II and III ZONE	3.816	130	3,41%	0,31	13.144	970	7,38%	2,29	12.720	3.431	26,85%	8,05	13.206	7.634	57,81%	17,92
INDIVIDUALS IV ZONE	1.746	0	0,00%	0,00	5.704	0	0,00%	0,00	5.520	67	1,21%	0,36	5.704	1.867	32,73%	10,15
INDIVIDUALS TOTAL	5.562	130	2,37%	0,21	18.848	970	5,14%	1,59	18.240	3.498	19,11%	5,73	18.910	9.501	50,24%	15,58
TOTAL	10.260	3.820	37,23%	3,35	35.030	13.959	39,85%	12,35	33.840	17.056	50,31%	15,09	35.030	25.503	72,80%	22,57

MONTH			AUGUST				SEPTEMBER		TOTAL
SEGMENT	MAXIMUM POSSIBLE PITCHES DAYS	PITCHES DAYS	OCCUPANCY IN %	OCCUPANCY DAYS	MAXIMUM POSSIBLE PITCHES DAYS	PITCHES DAYS	OCCUPANCY IN %	OCCUPANCY DAYS	NUMBER OF ACCOMMODATION UNITS	MAXIMUM POSSIBLE PITCHES DAYS	PITCHES DAYS	OCCUPANCY IN %	OCCUPANCY DAYS
MOBILES ILIRIJA	4.185	4.061	97,04%	30,08	4.050	2.669	65,90%	19,77	135	21.870	14.004	64,03%	103,73
AGENCIES	6.603	6.603	100,00%	31,00	6.390	6.390	100,00%	30,00	213	34.506	34.506	100,00%	162,00
LUMP SUM	5.332	5.332	100,00%	31,00	5.160	5.160	100,00%	30,00	172	27.944	27.944	100,00%	162,00
INDIVIDUALS EXTRA, I, II and III ZONE	13.206	7.635	57,81%	17,92	12.780	2.623	20,52%	6,10	426	68.872	22.423	32,56%	52,74
INDIVIDUALS IV ZONE	5.704	2.669	46,79%	14,51	5.520	108	1,96%	0,59	184	29.898	4.711	15,76%	25,53
INDIVIDUALS TOTAL	18.910	10.304	54,49%	16,89	18.300	2.731	14,92%	4,44	610	98.770	27.134	27,47%	44,50
TOTAL	35.030	26.300	75,08%	23,27	33.900	16.950	50,00%	14,98	1130	183.090	103.588	56,58%	91,66

Revenues of the camp during the period from 01/01/2016 to 30/09/2016 and comparison with the same period in 2015

	2015						2016		INDEX
SEGMENT			REALIZED 2015		AGREED TILL 30/09/2015			AGREED TILL 30/09/2016	01-09 2016/2015
		NUMBER OF PITCHES	OVERNIGHT STAYS	REVENUE	REALIZED OVERNIGHT STAYS	REVENUE	NO. OF PITCHES	REALIZED OVERNIGHT STAYS	CONTRACTED REVENUE	OVERNIGHT STAYS	REVENUE
1.	MOBILE HOMES	125	50.786	7.909.517,00 kn	50.770	7.895.619,29 kn	135	54.704	8.928.030,21 kn	108	113
2.	AGENCIES	204	77.043	3.768.292,00 kn	76.850	3.768.292,41 kn	213	81.444	3.965.195,24 kn	106	105
3.	INDIVIDUALS	621	94.869	7.773.880,99 kn	94.790	7.763.142,80 kn	610	81.473	7.202.901,35 kn	86	93
4.	LUMP SUM	173	37.881	3.113.307,00 kn	37.756	2.976.344,52 kn	172	40.318	3.016.451,87 kn	107	101
5.	OTHER SERVICES	-	-	1.649.329,24 kn	-	1.610.274,04 kn	0	0	1.656.511,46 kn	0	103
	TOTAL:	1123	260.579	24.214.326,23 kn	260.166	24.013.673,06 kn	1130	257.939	24.769.090,13 kn	99	103

financial operating results of the company

Overview of financial operating results during the period from 01/01/2016 to 30/09/2016 and comparison with the same period from 2010 to 2016

Description	30.09.2010.	30.09.2011.	30.09.2012.	30.09.2013.	30.09.2014.	30.09.2015.	30.09.2016.	Index 2016/2015
Operating revenues	84.263.889,23	93.482.009,75	103.093.525,94	107.612.475,44	112.063.612,03	116.037.177,99	116.292.365,96	100,22
Financial income	74.800,22	205.909,31	157.590,20	211.122,31	101.872,88	169.969,36	1.376.108,17	809,62
Extraordinary revenues	536.739,13	377.760,07	383.689,23	88.306,06	367.249,51	401.516,87	48.666,19	12,12
TOTAL REVENUES	84.875.428,58	94.065.679,13	103.634.805,37	107.911.903,81	112.532.734,42	116.608.664,22	117.717.140,32	100,95
Operating expenses	52.541.185,61	56.427.395,94	59.888.658,02	63.604.415,83	69.539.142,34	67.976.068,30	63.271.302,83	93,08
Financial expenses	4.050.980,90	4.602.714,96	4.853.152,11	4.033.062,83	4.390.325,97	3.131.122,26	2.675.230,13	85,44
Extraordinary expenses	1.610.175,49	1.803.702,62	2.417.771,78	2.926.069,57	667.960,12	430.352,87	811.973,07	188,68
Amortization	4.095.890,60	4.373.087,04	4.414.346,12	4.679.634,18	4.788.904,95	5.602.665,15	6.169.485,96	110,12
TOTAL EXPENSES	62.298.232,60	67.206.900,56	71.573.928,03	75.243.182,41	79.386.333,38	77.140.208,58	72.927.991,99	94,54
PROFIT/LOSS	22.577.195,98	26.858.778,57	32.060.877,35	32.668.721,40	33.146.401,04	39.468.455,64	44.789.148,33	113,48
OPERATING PROFIT/LOSS	31.722.703,62	37.054.613,81	43.204.867,92	44.008.059,61	42.524.469,69	48.061.109,69	53.021.063,13	110,32
EBITDA	30.724.067,48	35.834.580,57	41.328.375,57	41.381.418,41	42.325.631,96	48.202.243,05	53.633.864,42	111,27

EXPENSES FROM 2010 TO 2016

1.

The totally generated revenues for the third quarter of 2016 in the amount of HRK 117,717,140.32 resulted in an increase by 0.95% compared the same period in 2015 as a result of a slight increase in operating and financial income.

Totally realized operating revenues in the observed period amount to HRK 116,292,365.96 that resulted in the slight increase by 0.22%, compared to the same period in the previous fiscal year, as a result of an increase in the revenues in the camping sector by 3% and other profit centers that include destination management company/DMC Ilirija Travel by 5%.

Total revenues realized from sales in the first nine months in the year 2016 amount to HRK 113,730,817.89, and they are slightly lower that is, they are lower by 0.67% compared to the same period in 2015 as a result of reduced revenue on the foreign market by 3%. The revenues from sales make up for 96.6% of the total and 97.80% of the operating revenues.

2.

Total operating expenses in the indicated period amount to HRK 72,927,991.99 and are lower by 5.46 in comparison with the same period in 2015.

Total operating expenses generated in the third quarter of the year 2016 amount to HRK 63,271,302.83 and are lower by 6,92% compared to the same period in 2015, while the financial expenditures amount to HRK 2,675,230.13 and are lower by 14.56% in comparison with the same period in 2015.

3.

The operating profit or the profit from bussines operations rose by 10.32% compared to the year 2015 and amounts to HRK 53,021,063.13.

EBITDA or Earnings before interest, taxes, depreciation and amortization was realized in the amount of HRK 53,633,864.42, and rose by HRK 11.27% compared to the same period in the year 2015.

EBIT or Earnings before interest and taxes was realized in the amount of HRK 47,464,378.46, and rose by HRK 11% compared to the same period in the year 2015.

PROFIT before tax amounts to HRK 44,789,148.33 and rose by 13.48% compared to the same period in 2015.

Operating profit, EBITDA, EBIT and profit before tax realized in the first nine months of 2016 are far the best so far, compared with the same periods of the previous fiscal years in their absolute amount, where the result is the rationalization and reduction of operating expenses and increase in operating efficiency of the Company as a whole.

Financial statements of the Company as at 30th September 2016 and comparison with the same period in 2014 and 2015

REVENUES	2014	2015	INDEX 2015/2014	2016	INDEX 2016/2015
Revenues on the local market	77.827.629,87	80.263.473,22	103	80.591.140,89	100
Revenues on the foreign market	32.298.326,02	34.239.400,18	106	33.139.677,00	97
Other revenues	1.937.656,14	1.534.304,59	79	2.561.548,07	167
OPERATING REVENUES	112.063.612,03	116.037.177,99	104	116.292.365,96	100
FINANCIAL INCOME	101.872,88	169.969,36	167	1.376.108,17	810
EXTRAORDINARY REVENUES	367.249,51	401.516,87	109	48.666,19	12
TOTAL REVENUES	112.532.734,42	116.608.664,22	104	117.717.140,32	101
EXPENSES
Raw material and material costs	16.627.255,58	16.201.073,42	97	14.888.489,53	92
Costs of services	12.582.900,52	13.853.759,73	110	11.113.227,88	80
Gross salaries	25.492.257,25	23.020.000,24	90	23.361.300,05	101
Other expenses	14.836.728,99	14.901.234,91	100	13.908.285,37	93
TOTAL EXPENSES	69.539.142,34	67.976.068,30	98	63.271.302,83	93
AMORTIZATION	4.788.904,95	5.602.665,15	117	6.169.485,96	110
FINANCIAL EXPENSES	4.390.325,97	3.131.122,26	71	2.675.230,13	85
EXTRAORDINARY EXPENSES	667.960,12	430.352,87	64	811.973,07	189
TOTAL EXPENDITURE	79.386.333,38	77.140.208,58	97	72.927.991,99	95
PROFIT / LOSS	33.146.401,04	39.468.455,64	119	44.789.148,33	113
OPERATING PROFIT/LOSS	42.524.469,69	48.061.109,69	113	53.021.063,13	110
EBITDA	42.325.631,96	48.202.243,05	114	53.633.864,42	111

revenues by activities

Revenues from hotel services amount to HRK 42,778,623.97 and remained at the same level in comparison with the comparative period in 2015.

Revenues from nautical services amount to HRK 40,302,334.02 and fell by 2% in comparison with the same period in 2015, that is, they are reduced by the extraordinary income from organization of the nautical events.

Revenues from camping amount to HRK 27,179,943.16 and rose by 3% in comparison with the same period in 2015.

The revenues from other activities that is profit centers, including Ilirija Travel, hospitality, Arsenal and event boat "Nada" were generated in the amount of HRK 6,031,464.81 and rose by 5% compared to the same period in the year 2015.

GRANDTOTAL: Operating revenues by activities amount to HRK 116,292,365.96 and slightly rose by 0.22% in comparison with the same period in 2015.

fundamental financial indicators of the company's position as at 30/09/2016

The value of the Company's assets as at 30th September 2016 amounted to HRK 338,408,515.62 and rose by HRK 14,094,667.41 or 4.35% compared to the same period of 2015 when it was evaluated at HRK 324,313,848.21, and the increase of which is partly the result of a change in the balance sheet position of leasing, which changed from the operating leasing to financial leasing, by which all the equipment financed through leasing is entered into the Company's assets.

Total liabilities of the Company as at 30th September 2016 amounted to HRK 82,305,840.84 and fell by HRK 28,414,952.20 that is, by 25.66% compared to the same period in the year 2015 when they amounted to HRK 110,720,793.04.

3.

Capital and reserves of the Company as at 30th September 2016 amount to HRK 256,102,674.48 and rose by HRK 42,509,619.31 that is by 19.9% compared to the same period in 2015 when they amounted to HRK 213,593,055.17.

OVERVIEW of fundamental cumulative and comparative indicators of the Company, or the position of liabilities, capital, value of assets and other operating indicators of the Company as at 30/09/2016 and for the period from 2009 to 2016

YEAR	TOTAL LIABILITIES	CAPITAL	VALUE OF ASSETS	REVENUES	OPERATING PROFIT	PROFIT	ANNUAL DIVIDENDS
1	2	3	4	5	6	7	8
30.09.2016.	82.305.840,84	256.102.674,48	338.408.515,62	117.717.140,32	53.021.063,13	44.789.148,33	4.937.148,00
30.09.2015.	110.720.793,04	213.593.055,17	324.313.848,21	116.608.664,22	48.061.109,69	39.468.455,64	3.740.790,00
30.09.2014.	125.000.091,75	194.440.141,31	319.440.233,06	112.532.734,42	42.524.469,69	33.146.401,04	3.740.790,00
30.09.2013.	128.884.542,13	179.400.931,75	308.285.473,88	107.911.903,81	44.008.059,61	32.668.721,40	3.740.790,00
30.09.2012.	135.863.714,92	165.701.164,63	301.564.879,55	103.634.805,37	43.204.867,92	32.060.877,35	3.740.790,00
30.09.2011.	137.125.121,72	152.465.850,07	289.590.971,79	94.065.679,13	37.054.613,81	26.858.778,57	3.740.790,00
30.09.2010.	142.008.921,31	143.990.748,17	285.999.669,48	84.875.428,58	31.722.703,62	22.577.195,98	3.740.790,00
30.09.2009.	141.839.290,85	139.965.428,23	281.804.719,08	83.364.770,90	31.334.110,36	23.523.719,41	3.740.790,00

operating and other expenses

Operating expenses in the third quarter of the year 2016 amount to HRK 63,271,302.83, and fell by 6.92% compared to the same period of the previous fiscal year. The decrease in these expenses is the result of better, more efficient and more rational operating cost management of the Company, where the largest savings have been particularly realized in the segment of costs of services that are lower by 20% or HRK 2,740,531.85, the costs of raw materials which are lower by 8% or by HRK 1,312,583.89 and other operating expenses which are lower by 7% or HRK 992,949.54 compared to the same period in 2015, while the cost of gross salaries rose by 1%.

financial expenses

Financial expenses for the third quarter of 2016 amount to HRK 2,675,230.13 and fell by 14.46% compared to the same period of 2015, when they amounted to HRK 3,131,122.26. Reduced financial expenses are the result of gradual reduction of total indebtedness of the Company and lower volume of short-term financing of the Company by foreign funding sources and they constitute regular financial expenses, that is, the interests on long-term and short-term financial debts.

extraordinary expenses

Extraordinary expenses in the third quarter of 2016 amount to HRK 811,973.07 and are higher by 88.68% compared to the same period of 2015, when they amounted to HRK 430,352.87 and relate to the expenses from previous years.

liquidity

It is assessed as satisfactory for current and due accrued liabilities of the Company for the reporting period.

share split

During the period from 01 January to 30th September 2016, there was no share split.

earning per share

In the first nine months of 2016, it amounts to gross amount of HRK 163.81.

uncertainty of collecting revenues and potential future costs

There are no such risks that may substantially affect the financial position and financial operating results of the Company and can therefore be regarded as negligible.

investments In 2016, the Company continued to make investments in the offer, improvement of services, offer and amenities at the level of the whole Company, tailoring its offer to the requirements, demands and wishes of its clients, thereby ensuring a competitive market position and high-quality and recognizable tourism product.

In accordance with Annual Investment Plan for 2016, a total amount of HRK 19,754,868.84 was invested in the first nine months of this fiscal year. Regarding the camping sector, the investment was made in purchasing and equipping new mobile homes, landscaping of the camp up to the level of the arboretum and its further infrastructural development, while at the same time the Company continued to invest in the public amenities and additional refurbishment of the accommodation units in the hotel sector.

The most considerable investment of the Company in the first nine months of 2016 was finished in February and refers to the completion of the first phase of reconstruction of the coastal part of the nautical tourism port "Marina Kornati", or the reconstruction of docks in the central and southern marina aquatorium, totaling to HRK 10,142,622.15, of which HRK 5,197,274.72 was invested in 2015 since the reconstruction began in November that year, while the investment in 2016 amounted to HRK 4,945,347.43 that allowed the accommodation of a higher category of vessels and better utilization of the marina aquatorium.

The second phase of the reconstruction of Marina Kornati or the reconstruction of the remaining docks in the central aquatorium will be performed in the autumn of 2016, where the finalization is planned by the end of February 2017, according to the Investment Plan for 2016 and non-appealable building permit.

non-operating assets An additional impact on the value of the shares of the Company is exerted by non-operating assets owned by the company, which has been neither used for performing the core business activities of the company, nor does the company realize the economic benefit from the relevant assets.

The most important non-operating assets owned by the Company refers to unutilized land (total area of 10-12 hectares) at highly attractive locations:

Land plot, Sv. Filip i Jakov: The Company owns approximately 2.5 hectares of the building land plot in Sv. Filip i Jakov, of which a smaller portion thereof is utilized (Villa Donat), while approximately 20.000 m2 of the land plot remain unused. According to the conceptual design, the Company is planning to build eight detached villas with apartments on the undeveloped part of the land plot and the Company is also planning to extend the existing accommodation and supporting facilities. With respect the planned project, the Municipality has adopted the Detailed development plan for the area intended for hospitality and tourism (T1-hotel) and for mixed-use purposes.

Land plot, Villa Primorje: The Company is the owner

of approximately 2.5 hectares of land in the vicinity of the Villa Primorje Hotel, of which only a small part of the land plot is utilized (about 10% of the total surface area). In addition to previous physical planning of the area, the undeveloped part of the land plot may be used for building settlements with traditional Dalmatian type villas. The unused land is in direct contact with the building land plot.

Land plot, Tennis center: The Company owns approximately 4.9 hectares of the land plot in Biograd na Moru within the boundaries of the Forest Park Soline that is used only to a smaller part (Tennis center Soline built on about 25% of the total surface area) from which the company does not earn any financial income. In addition to the prior resolution of the physical planning documentation on the relevant land plot, there is a possibility of building a modern multifunctional hotel-health and tourist and recreation center.

Land plot, Polača: The Company is the owner of approximately 2.5 hectares of the land plot in the settlement of Polača, that is situated along the state road that connects Biograd to the nearby highway (is of regional significance). The land plot is equipped with basic utility infrastructure on which the company Ilirija d.d. is planning to build a dry marina that would be functionally linked to the existing nautical facilities owned by Ilirija d.d.

In addition to the above indicated land plots owned by the Company, additional non-operating assets relate to tourist land in Biograd na Moru (the surface area of about 10 hectares), on which the existing tourist capacities of the company may be extended by exercising the concession right.

13. business expectations and development plan of the company in the year 2016

In the fiscal year 2016, we at least expect to realize or to repeat the operating results realized in 2015, when the generation of operating and total operating revenues is concerned and to make a step forward to improve the Company's profitability.

When it comes to the achievement of other Company's operating results, according to the Company's Business Plan, we expect a rise in operating results, that is, in key profitability indicators, that is operating profit, EBITDA, EBIT and profit up to 10% compared to the year 2015 as a result of further and more efficient Company's operations management in terms of rationalization of operating expenses, that is, operating and total expenses of the Company in the year 2016. The Company's results achieved in the first nine months of 2016, in particular the profitability ratios are far the best so far, compared to the same periods in the previous fiscal years and the best indicator of the soundness of such a business objective in the year 2016.

A significant growth and market positioning particularly in the segment of innovative and complementary tourism supply that we present to the market through DMK Ilirija Travel intended to the emerging experience and special interest tourism market, which is important for achieving better operating results in the pre-season and post-season. Considering the substantial focus of marketing and acquisition activities in the current fiscal year on this segment of offer, it enabled a more intensive business activity and generation of income in less active tourism periods of the year, which resulted in over 300 individual events in the first nine months of 2016, of which most of them in the pre-season and post-season, which were attended by 31,835 guests. In accordance with the strategic orientation of the Company towards long-term development of those segments of the offer, which will contribute to the real extension of business activities throughout the whole year, we expect the realization of positive business trends through the destination management company Ilirija Travel in the last quarter.

In addition, will shall continue with the investment cycle in the nautical sector where in early November, we shall start with the reconstruction of the second phase of the coastal area of Marina Kornati, planning to finish it by the end of the month of February in 2017, where the marina itself would be further extended and modernized through the implementation of the best available technical solutions, which is one of the three largest marinas in the Croatian part of the Adriatic coast, to be followed by modernization of other services, particularly in the area of accepting vessels.

Besides the nautical sector, the investment cycle of the preparation of the facilities for the tourism season 2017 will also encompass the hotel and camping sector in order to improve and raise the quality of the accommodation facilities, improve service quality and standards, perform landscaping, increase hospitality and restaurant capacities, while regarding the hotel sector, the Company will invest in raising the quality of accommodation facilities, shared areas and additional amenities.

The Company will continue to invest in the training of our employees by organizing a wide range of workshops to improve their personal and professional skills, in particular, in the area of sales and marketing, the department of food and beverages and con-

trolling.

The Company will perform significant activities to adapt to and implement the standards, procedures and regulations in all aspects of environmental protection (protection of the sea, coast, water, air, soil) and waste management and take further actions focused on the implementation of HALAL standards in the Company's hospitality facilities and restaurants.

14. operational risks of the company

The Company is, after all, as the most businesses in the tourism sector, exposed to foreign exchange risk, interest rate risk, price risk, credit risk and liquidity risk, environmental risk, risk of tourism as the branch of economy, the risk of macroeconomic movements and risk of changes in tax and other regulations.

Since most of the monetary fund inflows of the Company are quoted in EUR, as well as the most of the loans, the Company is to the highest degree hedged against the foreign exchange risk owing to this circumstance.

Indebtedness of the Company with the commercial bank is mainly subject to variable interest rates, so taking this into consideration, the Company is partially exposed to interest rates, but only due to exceptional circumstance and disturbance in the operations which are not attributable to the Company.

In order to reduce the credit risk, the Company strives to reduce the total loan debts to an appropriate level that would be inferior to their own funding source.

The Company has most of its prices quoted in EUR and collects the majority of claims in the same currency, thereby being hedged against the price risk.

The Company is exposed to changes in tax and other regulations in the legal system of the Republic of Croatia. This, in particular applies to legislation in the field of maritime domain and the tourist land plots on which the Company has significant and crucial commercial long-term investments and all the constitutionally guaranteed rights have not been exercised in the field of protection of capital investment.

important events As at 30th September 2016, the Company has acquired 135 treasury shares designated as ILRA-R-A in the regulated capital market of Zagreb Stock Exchange. Following the above acquisition, the Company owns 859 treasury shares which make up for 0.3% shares in the share capital and the same percentage of votes at the General Shareholders' Assembly.

The Company's Supervisory Board did at its session on 22nd April 2016 adopt the Annual report prepared by the Management Board on the operations and position of the Company for the year 2015, the Audit Report on the Company's operations for 2015 and the Supervisory Board's Report on performed supervision of business operations in 2015. At its session, the Supervisory Board established the fundamental Annual Financial Statements for the year 2015 (Financial Operations Report, Financial Position Report and Cash Flow Statement), the draft decision on utilization of profit, distribution of dividends and an increase in share capital of the Company, the draft Decision on changes and amendments to the Articles of Association of the Company, the draft decision on the appointment of the auditor of the Company for the year 2016 and the draft call with the agenda for convening the General Shareholders' Assembly. Also, the Supervisory Board suggested the appropriation of the profit generated in the fiscal year 2015, after taxation in the amount of HRK 21,533,370.50 in the way as follows: (i) HRK 1,867,642.50 in statutory reserves, (ii) HRK 6.500 000.00 in retained earnings, (iii) HRK 4,937,148.00 for the distribution of dividends in the amount of 18 HRK per share and (iv) HRK 8,228,580.00 for an increase in share capital from the reinvested profit.

At the Supervisory Board's meeting held on 31st May 2016, the Management Board was given a consent to conclude a long-term loan with Erste & Steiermärkische Bank d.d. Rijeka, with the purpose to refinance the Company's existing financial (loan) liabilities.

The Ordinary Shareholders' Assembly was held on 10th June 2016 at which the following decisions were unanimously adopted:

Decision on the utilization of the profit of Ilirija d.d. for the fiscal year 2015, according to which the dividend in the amount of HRK 18.00 per share shall be paid to the Company's shareholders.
Decision on giving remuneration to the Company's Management Board, Decision on giving remune ration to the Company's Supervisory Board;
Decision on appointment of auditor for the year 2016,
Decision on a change to the core business activities of ILIRIJA d.d. added activities
Decision on changes and amendments to the Articles of Association of the company Ilirija d.d., and

• The Decision on an increase in share capital from the Company's assets, based on which the share capital increases from the reinvested profits earned in 2015 by the amount of HRK 8,228,580.00.The share capital of the Company increases from the amount of HRK 150,857,300.00 by the amount of HRK 8,228,580.00 (reinvested profit) to the amount of HRK 159,085,880.00, in a way that for each of the totally existing 274,286 shares the nominal amount increases by HRK 30.00 in a way that after the increase each share has a nominal amount of HRK 580.00.

The call for Extraordinary General Meeting convened on 24th October 2016 has been publicized to the Company's shareholders, by which the Management Board and Supervisory Board propose the adoption of the following decisions:

Decision on a change to the core business activities of the Company added activities;
Decision on changes and amendments to the Company's Articles of Association;

• Decisions on an increase in share capital by contributions in cash and the issue of shares and making amendments to the Articles of Association ("Decision on an increase in share capital"), namely, by issuing new ordinary shares by means of public offering by contributions in cash thereby excluding the pre-emptive rights of the existing shareholders to subscribe for new shares, except for the pre-emptive right of the shareholder - Allianz ZB d.o.o., the compulsory pension fund management company with the registered office in Zagreb, since the offering of New Shares will be given only to qualified investors that meet the requirements therefor according to

Article 351, paragraph 1, section 1 of the Capital Market Act, whereas Allianz ZB d.o.o. meets the requirements indicated in the mentioned Article of the Act; and

• Decision on the listing of all Company's shares on the Official market of the Zagreb Stock Exchange plc. for trading.

The Company released the document Information Memorandum of issue of new shares of the company Ilirija d.d. for the purpose of business development, in which the Company informed the general public in a fully public, transparent and detailed manner, about the intention of conducting the process of recapitalization (capital increase), which will take place through a share capital increase by contributions in cash, thereby excluding the pre-emptive rights of the existing shareholders, except for Allianz ZB d.o.o., and the issue of new ordinary shares by a public offering exclusively to qualified investors with the purpose of raising funds for the acquisition of the real estate Commercial shopping center City Galleria in Zadar, with the intention and aim to:

strengthen the market position of the Company by ensuring a long-term and sustainable business and capital development;
create a company with a wide range of activities, especially the activities characterized by continuous year-round business that is to be achieved by the acquisition of the Commercial shopping center City Galeria considering the fact that the Company partially enters the real estate segment;
strengthen the financial position by the stabilization of cash inflows outside of the high season, risk diversification and synergistic effects at the level of costs; and
strengthen the total value of the Company through an increase in profitability indicators or positioning of the Company in the top of profitability in the sector.

16. sustainable develop- ment and corporate social responsibility

In the first nine month of the year 2016, we continued our policy of responsible and sustainable business by retaining the standards achieved so far in the form of renewal of the existing certificates in the field of environmental protection and health safety with a special focus on supporting a number of projects in collaboration with the public and educational institutions, aimed at promoting the activities in the area of environmental protection and nature mostly intended for children and youth.

Since the tourism industry largely depends on preserved natural resources, while planning the business processes, the Company has established an excellent quality and environmental protection management system by establishing the Safety Department in charge of health care, environmental protection and safety for all employees and guests. In the hospitality sector, the Company implemented and certified HACCP system according to the standard Codex Alimentarius, which in 2012/2013/2014/2015/2016 was renewed in all facilities, confirming thus maintaining high standards in serving food. The Company has also implemented and certified the Quality management system ISO 9001, whose successful re-certification took place in June and Environmental management system 14001, whereas the implementation of the HALAL standard is underway.

The Company has drafted the publication Business model of Corporate Social Responsibility for the period from 2000 to 2015 presenting an overview of the Company's activities in the field of corporate social responsibility through six basic areas in accordance with the methodology INDEX CSR (focus on economic sustainability, incorporation of CSR and SD into the business strategy, responsible policies and practices of environmental management, corporate social responsibility in market relations and socially responsible community relations) which, as such, is the first report of the company on Corporate Social Responsibility.

The first non-financial report of the Company's business operations, with independent external verification by Ms. Mirjana Matešić, Principal of the Croatian Business Council for Sustainable Development, the leading association for corporate social responsibility in Croatia, as such constitutes an integral part of corporate culture, strategy and policy of the Company, particularly in terms of transparency of the business operations. As a public and socially responsible company, we are particularly dedicated to integrating economic, social and environmental aspects in the decision-making process and in addition, this report, which will be only the first in a continuing edition of non-financial reporting, was be used by the Company to present policy, objectives and achievements in the area of sustainable development and corporate social responsibility to all its stakeholders in a public and transparent manner by the areas as follows:

Economic viability

The fundamental values of the company include the understanding that corporate social responsibility of the company is impossible without profitability and without the expected and optimal profit, which ensures further growth and development, investments and an appropriate dividend to be distributed to owners of capital or shareholders. In this way we confirm the inevitable, socially responsible economic sense of the business venture - development and progress and thus the company contributes to the local, regional and national economy at the same time.

Incorporation of the corporate social responsibility into the company's business strategy

Every company is an integral part of established eco-

nomic and multiple social relations. Integrity, compliance with the legislative framework and understanding of the economic environment is the starting point of the business operations, where active participation in professional associations and institutions helps us as the company to influence the improvement of the competitive framework of business. Understanding the fact that the environment is the basic resource for tourism, the top management of the Company actively participates in the initiatives of improving the competitive framework of business by making suggestions for designing the legal solution related to the key regulations governing the business operations of tourism companies in the area (the solutions related to the maritime domain and the so-called tourist land).

Responsibility towards employees

Understanding that a man is the key to success in tourism, we ensure the right to personal and professional development for all of its employees, thus improving the quality of the service and satisfaction of our guests. We implement the policy of gender equality in all business segments, which is reflected in recruiting 50% of women that hold the positions in key management team of the company.

As a major employer in the region and Croatia, we employ 180 permanent and over 220 seasonal employees, including other companies engaged for business cooperation that perform nautical activities in Marina Kornati, the Company provides jobs for over 800 employees in a season.

The company has not had any labor dispute throughout the period from privatization to date. Being aware of the fact that the quality of tourism services and guest satisfaction is attributable to people, we have paid special attention to careful delegation of employees to positions that best suit their skills at which they can best contribute to the success and development of the company by their knowledge, skills and enthusiasm. Management and staff are continuously provided with training in the areas of operations, marketing and sales as well as monitoring of modern trends according to international experience of best practices in hospitality and tourism

Responsible environmental management policies and practices

An integral part of corporate social responsibility which is particularly evident in the tourism industry, and thus in Ilirija, is based on complying with the principle of sustainable development where economic growth does not threaten the existing natural resources, cultural, historical and natural heritage and such a type of responsible tourism where the current and future economic, social and environmental requirements of all participants in the business process are in equilibrium, which ensures long-term viability of businesses, tourism industry as well as the future of the generations to come.

Having its business based on these principles, llirija d.d. pays special attention to the environmental protection where it strives to minimize the impact of its business processes on the environment, always attempting to do more than to merely comply with the binding legislation. Therefore, the Company particularly emphasizes the following achievements: 1. Since 2004, Marina Kornati has been the holder of the Blue Flag, which is an international symbol of environmental, sea and coastal protection;

The camp "Park Soline" is the holder of the international eco label for accommodation facilities "Green Key" and Ecocamping certificate;
The implementation of the environmental management system ISO 14001 at the level of the entire company is an upgrade of the quality management system ISO 9001 already implemented and certified, in which way the Company minimizes all environmental management issues related to its activities and any potentially negative impacts of its operations.
It is among the first companies in Croatia that use the so-called green energy or energy generated from renewable energy sources;
In addition to guest satisfaction with the service, one of our most important priorities is their safety and health. This is the reason why we have ensured the health-related safety of services in the hospitality industry by implementing and certifying the HACCP system.
The Hotel Ilirija has been awarded the basic certificate "Sustainable Hotel" as a part of the "Green business in the hotel industry";
The Ilirija d.d. facilities are in possession of water permit for the discharge of sanitary water and wastewater into the public sewage system;
Water consumption at water meters is controlled on a daily basis, whereas faucet aerators are installed in the camp "Park Soline", as part of the Sustainability drop project at all shared toilet facilities and in mobile homes thereby reducing the total amount of water consumed.
Selection/separation of waste (hazardous and non-hazardous) on a daily basis with continuous measures aimed at reduction and improvement of the separation of new types of waste;

Corporate social responsibility in market relations

Corporate social responsibility in market relationships include relationships with suppliers, consumers, customers, shareholders and the competition and is based on the principles of transparency of operations and communication, promptness in fulfilling mutual obligations, mutual respect and appreciation, implementation and application of the principles of the Corporate Governance Code in running the company, transparency in relations with the investment public, systematic measuring and monitoring the satisfaction of customers or guests who always come first to us as a tourism company.

Corporate social responsibility in relations with the community

We actively and responsibly participate, contribute and help solve the problems that society is facing, particularly the community in which we operate through the socially responsible corporate philanthropy project. By providing the support, the company supports the work of various associations and organizations, sports clubs and educational and healthcare institutions. In the last 5 years through donations and sponsorships, Ilirija d.d. has allocated over 3.1 million HRK for the development of society and the local community as well.

During 2016 the Company has continued with a series of educational activities in the field of environmental protection, especially in promotion of the importance of conservation of and care for the environment among their employees, guests and the local community in partnership with the Public Institution Nature Park Vrana Lake, particularly including the following:

The workshop "Cook, sort, responsibly dispose" where the workshop was aimed to show to high school students in Biograd na Moru, majoring in hospitality and waiter jobs, what they as students and later as a future tourism professionals can do to preserve nature - through practical examples of the separation of organic waste and its importance for the preservation of the environment.

Exhibition of photographs of the Public Institution Nature Park Vrana Lake, that took place in the restaurant Marina Kornati from 01/01/ to 16/08/, was aimed to raise the marina guests' awareness of the need to protect nature and environment, especially protected areas where the natural values of this protected area were presented through the exhibition of photographs and of the need for further conservation and protection.

The celebration of the 20th International Bat Night was organized in Ilirija camp "Park Soline" which through a series of educational, interactive workshops and lectures was attended by over 30 children of different ages where they became familiar and informed about the only flying mammals, their habitats and species.

Also, the Company renewed international environmental certificates Green Key and Blue Flag. In the camp "Park Soline" in addition of the local inspection, the international inspection of the criteria for Green key was carried out by the Foundation for Environmental Protection (FEE) Green Key Program. The renewal of the certificate Green Key confirmed the right to use eco-label that is awarded only to accommodation facilities that reduce their negative effects on the environment through the optimization of energy consumption, waste sorting and education of their staff and guests.

In Marina Kornati, the international environmental program regarding the environmental, sea and coastal area protection has been renewed, by which the marina was again awarded the Blue Flag, which has been continuously owned by it since 2004. Also, the Blue Flag Project Day was implemented in Marina Kornati.

17. other legal issues

The judgment rendered by the Higher Commercial Court of the Republic of Croatian as of 2016 affirmed the judgment rendered by the Commercial Court in Zadar, which designates Ilirija d.d. as the owner of the entire property with land plot 3232 cadastral municipality Biograd, with an area of 48,705 m2, which in the nature is "Tennis Center Ilirija" with the surrounding land. In this way the dispute over the property of the "Tennis center Ilirija" has been completed to the benefit of the Company by rendering final and absolute judgment.

With respect to disputes in which the Company participates either as a plaintiff or a defendant, we estimate that these disputes can neither significantly cause a disturbance in the Company's operations nor can they cause significant financial expenses for the Company nor negatively affect the current and future financial results of the Company.

changed accounting policy

There have been no changes in the accounting policies.

mergers and acquisitions

There have been no mergers and acquisitions.

monitoring and repor- ting on business operati- ons

In 2016, the system of monitoring the business operations has been established by all of its segments at the level of all sectors and the Company as a whole on a daily, weekly and monthly basis in accordance with the applicable Croatian and international reporting standards in the tourism industry. This has enabled timely and high-quality monitoring of the achieved operating results and the production of high-quality forecasts and business plans throughout the fiscal year, creating thus the foundations for a more efficient and rational management of the entire business process and improving and speeding up the entire process of reporting at all levels, particularly in the operational part of the Company's business operations.

18. notes

There are no particularly significant events that could substantially affect the Company's smooth operations, and further achievement of expected business results.

The Company owns all the proper permits to carry out the business activities, such as the decisions on the classification, meeting minimum technical requirements for the operation, water management licenses, etc.

Goran Ražnjević, President of the Management Board

Reporting period 01/01/2016 to 30/09/2016 Quarterly financial report TFI-POD

Tax number (MB):	03311953
Company registration number (MBS):	060032302
Personal identification number (OIB):	05951496767
Issuing company:	ILIRIJA d.d.
Postal code and place	23210	BIOGRAD NA MORU
Street and house number:	TINA UJEVIĆA 7
E-mail address:	[email protected]
Internet address:	www.ilirijabiograd.com
Municipality/city code and name	22	BIOGRAD NA MORU
County code and name	13	ZADARSKA	Number of employees:	336
			(period end)
County code and name	NO		NKD code:	55100

Companies of the consolidation subject (according to IFRS): Seat: MB:

Contact person:

Contact person:	STRPIĆ ZORKA
	(only surname and name)
Telephone:		Telefax:	023/384564
E-mail address:	[email protected]
Family name and name:	RAŽNJEVIĆ GORAN
	(person authorized to represent the company)

Documents disclosed:

Financial statements (Balance Sheet, Income Statement, Cash Flow Statement,

Statement of Changes in Equity and notes to financial statements);

Management Interim Report;
Declaration of the persons responsible for preparing the issuer's statements;

L.S. (signature of the person authorized to represent the company)

Balance Sheet as of 30/09/2016

Company: ILIRIJA d.d. BIOGRAD NA MORU

Position	AOP	Previous period	Current period
1	2	3	4

A) RECEIVABELS FOR SUBSCRIBED NOT PAID CAPITAL	001
B) NON-CURRENT ASSETS (003+010+020+029+033)	002	297.270.992	313.973.420
I. INTANGIBLE ASSETS (004 to 009)	003	0	0
1. Expenditure for development	004
2. Concessions, patents, licenses, trademarks, service marks, software and other rights	005
3. Goodwill	006
4. Advances for purchase of intangible assets	007
5. Intangible assets in progress	008
6. Other intangible assets	009
II. PROPERTY, PLANT AND EQUIPMENT (011 to 019)	010	297.230.992	313.933.420
1. Land	011	42.340.267	42.340.227
2. Buildings	012	206.831.179	221.199.612
3. Plant and equipement	013	29.978.179	39.388.902
4. Tools, working inventory and transportation assets	014
5. Biological assets	015
6. Advances for purchase of tangible assets	016	360.111	420.130
7. Tangible assets in progress	017	17.721.256	10.584.549
8. Other tangible assets	018
9. Investment in real-estate	019
III. NON-CURRENT FINANCIAL ASSETS (021 to 028)	020	40.000	40.000
1. Share in related parties	021	40.000	40.000
2. Loans to related parties	022
3. Participating interests (shares)	023
4. Loans to companies with participating interest	024
5. Investments in securities	025
6. Loans, deposits, etc.	026
7. Other non-current financial assets	027
8. Equity-accounted investments	028
IV. RECEIVABLES (030 to 032)	029	0	0
1. Receivables from related parties	030
2. Receivables arising from sales on credit	031
3. Other receivables	032
V. DEFERRED TAX ASSET	033
C) CURRENT ASSETS (035+043+050+058)	034	26.979.274	23.949.592
I. INVENTORIES (036 to 042)	035	2.698.414	2.410.935
1. Raw materials and supplies	036	2.698.414	2.410.935
2. Production in progress	037
3. Finished products	038
4. Merchandise	039
5. Advances for inventories	040
6. Long term assets held for sale	041
7. Biological assets	042
II. RECEIVABLES (044 to 049)	043	18.682.254	17.832.810
1. Receivables from related parties	044
2. Receivables from end-customers	045	17.169.412	16.524.251

Balance Sheet as of 30/09/2016 Company: ILIRIJA d.d. BIOGRAD NA MORU

3. Receivables from participating parties	046
4. Receivables from employees and members of the company	047	695.077	768.619
5. Receivables from government and other institutions	048	337.254	243.139
6. Other receivables	049	480.511	296.801
III. CURRENT FINANCIAL ASSETS (051 to 057)	050	4.929.195	3.670.925
1. Share in related parties	051
2. Loans to related parties	052
3. Participating interests (shares)	053
4. Loans to companies with participating interest	054
5. Investments in securities	055
6. Loans, deposits, etc.	056	4.929.195	3.670.925
7. Other financial assets	057
IV. CASH AND CASH EQUIVALENTS	058	669.411	34.922
D) PREPAYMENTS AND ACCRUED INCOME	059	1.121.927	485.504
E) TOTAL ASSETS (001+002+034+059)	060	325.372.193	338.408.516
F) OFF BALANCE SHEET ITEMS	061
EQUITY AND LIABILITIES
A) ISSUED CAPITAL AND RESERVES (063+064+065+071+072+075+078)	062	213.593.054	256.102.675
I. SUBSCRIBED SHARE CAPITAL	063	137.162.300	159.085.880
II. CAPITAL RESERVES	064	829.039	8.921.539
III.RESERVES FROM PROFIT (066+067-068+069+070)	065	21.723.814	23.435.964
1. Legal reserves	066	7.610.343	9.477.986
2. Reserve for own shares	067	6.975.716	6.975.716
3. Treasury shares and shares (deductible items)	068	384.924	540.417
4. Statutory reserves	069
5. Other reserves	070	7.522.679	7.522.679
IV. REVALUATION RESERVES	071
V. RETAINED EARNINGS OR LOSS CARRIED FORWARD (073-074)	072	14.402.772	19.870.143
1. Retained earnings	073	14.402.772	19.870.143
2. Loss carried forward	074
VI. NET PROFIT OR LOSS FOR THE PERIOD (076-077)	075	39.475.129	44.789.148
1. Net profit for the period	076	39.475.129	44.789.148
2. Net loss for the period	077
VII. MINORITY INTEREST	078
B) PROVISIONS (080 to 082)	079	0	0
1. Provisions for pensions, severance pay and similar liabilities	080
2. Provisions for tax liabilities	081
3. Other provisions	082
C) NON-CURRENT LIABILITIES (084 to 092)	083	77.412.998	65.330.928
1. Liabilites to related parties	084
2. Liabilities for loans, deposits, etc.	085
3. Liabilities to banks and other financial institutions		77.412.998	65.330.928
	086
4. Liabilities for advances	087
5. Trade payables	088
6. Commitments on securities	089
7. Liabilities to companies with participating interest	090

Balance Sheet as of 30/09/2016 Company: ILIRIJA d.d. BIOGRAD NA MORU

9. Deferred tax liabilities	092
D) CURRENT LIABILITIES (094 to 105)	093	31.443.327	15.296.636
1. Liabilites to related parties	094
2. Liabilities for loans, deposits, etc.	095
3. Liabilities to banks and other financial institutions	096	4.971.090	73.249
4. Liabilities for advances	097
5. Trade payables	098	17.905.467	9.905.127
6. Commitments on securities	099
7. Liabilities to companies with participating interest	100
8. Liabilities to emloyees	101	1.833.277	1.866.026
9. Taxes, contributions and similar liabilities	102	5.785.277	1.296.502
10. Liabilities arising from share in the result	103
11. Liabilities arising from non-current assets held for sale	104
12. Other current liabilities	105	948.216	2.155.731
E) ACCRUED EXPENSES AND DEFERRED INCOME	106	2.922.814	1.678.277
F) TOTAL EQUITY AND LIABILITIES (062+079+083+093+106)	107	325.372.193	338.408.516
G) OFF BALANCE SHEET ITEMS	108
ADDITION TO BALANCE SHEET (only for consolidated financial statements)
ISSUED CAPITAL AND RESERVES
1. Attributable to majority owners	109
2. Attributable to minority interest	110

Income statement period 01/01 to 30/09/2016 Company: ILIRIJA d.d. BIOGRAD NA MORU

Position	AOP	Previous period		Current period
		Cummulative	Quarter	Cummulative	Quarter
1	2	3	4	5	6
I. OPERATING INCOME (112 to 113)	111	116.037.178	63.329.652	116.292.366	64.202.461
1. Sales revenues	112	114.502.873	63.276.019	113.730.818	64.069.672
2. Other operating revenues	113	1.534.305	53.633	2.561.548	132.789
II. OPERATING COSTS (115+116+120+124+125+126+129+130)	114	70.629.768	32.203.815	69.440.789	33.299.236
1. Change in inventories of work in progress	115
2. Material expenses (117 to 119)	116	30.054.833	15.034.324	26.001.717	13.533.639
a) Costs of raw materials	117	16.201.073	9.010.957	14.888.490	8.500.901
b) Cost of goods sold	118
c) Other material expenses	119	13.853.760	6.023.367	11.113.228	5.032.738
3. Employee benefits expenses (121 to 123)	120	23.020.001	9.826.132	23.361.300	10.087.869
a) Net salaries	121	13.236.027	5.964.465	14.045.142	6.120.609
b) Tax and contributions from salary expenses	122	6.405.611	2.416.731	5.887.708	2.486.788
c) Contributions on salary	123	3.378.363	1.444.936	3.428.450	1.480.473
4. Depreciation and amortisation	124	5.602.665	1.867.555	6.169.486	2.056.495
5. Other expenses	125	11.952.269	5.475.804	13.908.285	7.621.233
6. Write down of assets (127+128)	126	0	0	0	0
a) non-current assets (except financial assets)	127
b) current assets (except financial assets)	128
7. Provisions	129
8. Other operating costs	130
III. FINANCIJSKI PRIHODI (132 do 136)	131	169.969	120.438	1.376.108	1.315.995
1. Interest, foreign exchange differences, dividens and similar income
from related parties	132
2. Interest, foreign exchange differences, dividens and similar income
from third parties	133	169.969	120.438	1.376.108	1.315.995
3. Income from investments in associates and joint ventures	134
4. Unrealised gains (income) from financial assets	135
5. Other financial income	136
IV. FINANCIAL EXPENSES (138 to 141)	137	3.131.122	806.308	2.675.230	715.167
1. Interest, foreign exchange differences, dividends and similar income from related parties	138
" 2. Interest, foreign exchange differences, dividends and similar income
from third parties	139	3.131.122	806.308	2.675.230	715.167
3. Unrealised losses (expenses) from financial assets	140
4. Other financial expenses	141
V. SHARE OF PROFIT FROM ASSOCIATED COMPANIES	142
VI. SHARE OF LOSS FROM ASSOCIATED COMPANIES	143
VII. EXTRAORDINARY - OTHER INCOME	144	401.517	213.731	48.666	19.016
VIII. EXTRAORDINARY - OTHER EXPENSES	145	3.379.319	2.280.500	811.973	325.817
IX. TOTAL INCOME (111+131+142+144)	146	116.608.664	63.663.821	117.717.140	65.537.472
X. TOTAL EXPENSES (114+137+143+145)	147	77.140.209	35.290.623	72.927.992	34.340.220
XI. PROFIT OR LOSS BEFORE TAXES (146-147)	148	39.468.455	28.373.198	44.789.148	31.197.252
1. Profit before taxes (146-147)	149	39.468.455	28.373.198	44.789.148	31.197.252
2. Loss before taxes (147-146)	150	0	0	0	0
XII. TAXATION	151
XII. PROFIT OR LOSS FOR THE PERIOD (148-151)	152	39.468.455	28.373.198	44.789.148	31.197.252

Income statement period 01/01 to 30/09/2016 Company: ILIRIJA d.d. BIOGRAD NA MORU

1. Profit for the period (149-151)	153	39.468.455	28.373.198	44.789.148	31.197.252
2. Loss for the period (151-148)	154	0	0	0	0
ADDITION TO PROFIT AND LOSS ACCOUNT (only for consolidated financial statements)
XIV. PROFIT OR LOSS FOR THE PERIOD
1. Attributable to majority owners	155
2. Attributable to minority interest	156
STATEMENT OF OTHER COMPREHENSIVE INCOME (only for IFRS adopters)
I. PROFIT OR LOSS FOR THE PERIOD (=152)	157	39.468.455	28.373.198	44.789.148	31.197.252
II. OTHER COMPREHENSIVE INCOME/LOSS BEFORE TAXES (159 to 165)	158	0	0	0	0
1. Exchange differences from international settlement	159
" 2. Changes in revaluation reserves of long-term tangible
and intangible assets	160
" 3. Profit or loss from re-evaluation of financial assets
held for sale	161
4. Profit or loss from cash flow hedging	162
5. Profit or loss from hedging of foreign investments	163
6. Share of other comprehensive income/loss from associatied companies	164
7. Actuarial gains/losses from defined benefit plans	165
III. TAXATION OF OTHER COMPREHENSIVE INCOME FOR THE PERIOD	166
IV. NET OTHER COMPREHENSIVE INCOME
FOR THE PERIOD (158 - 166)	167	0	0	0	0
V. COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD (157+167)	168	39.468.455	28.373.198	44.789.148	31.197.252
ADDITION TO STATEMENT OF OTHER COMPREHENSIVE INCOME (only for consolidated financial statements)
VI. COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD
1. Attributable to majority owners	169
2. Attributable to minority interest	170

Cash flow statement - indirect method Period 01/01 to 30/09/2016

	Company: ILIRIJA d.d. BIOGRAD NA MORU
--	---------------------------------------

Position	AOP	Previous period	Current period
1	2	3	4
CASH FLOWS FROM OPERATING ACTIVITIES
1. Profit before tax	001	39.475.129	44.789.148
2. Depreciation and amortisation	002	813.760	566.821
3. Increase of current liabilities	003	381.183
4. Decrease of current receivables	004		849.444
5. Decrease of inventories	005	302.471	287.479
6. Other cash flow increases	006
I. Total increase of cash flow from operating activities	007	40.972.543	46.492.892
1. Decrease of current liabilities	008		16.146.691
2. Increase of current receivables	009	3.385.880
3. Increase of inventories	010
4. Other cash flow decreases	011	8.407.132	294.345
II. Total decrease of cash flow from operating activities	012	11.793.012	16.441.036
A1) NET INCREASE OF CASH FLOW FROM
OPERATING ACTIVITIES (007-012)"	013	29.179.531	30.051.856
A2) NET DECREASE OF CASH FLOW FROM
OPERATING ACTIVITIES (012-007)"	014	0	0
CASH FLOW FROM INVESTING ACTIVITIES
1. Proceeds from sale of non-current assets	015
2. Proceeds from sale of non-current financial assets	016
3. Interest received	017
4. Dividend received	018
5. Other proceeds from investing activities	019
III. Total cash inflows from investing activities	020	0	0
1. Purchase of non-current assets	021	3.167.124	9.410.723
2. Purchase of non-current financial assets	022
3. Other cash outflows from investing activities	023	5.754.749	10.275.452
IV. Total cash outflows from investing activities	024	8.921.873	19.686.175
B1) NET INCREASE OF CASH FLOW
FROM INVESTING ACTIVITIES (020-024)"	025	0	0
B2) NET DECREASE OF CASH FLOW
FROM INVESTING ACTIVITIES (024-020)"	026	8.921.873	19.686.175
CASH FLOW FROM FINANCING ACTIVITIES
1. Proceeds from issue of equity securities and debt securities	027
2. Proceeds from loans and borrowings	028
3. Other proceeds from financing activities	029	3.845.000	3.600.000
V. Total cash inflows from financing activities	030	3.845.000	3.600.000
1. Repayment of loans and bonds	031	12.014.996	12.240.479
2. Dividends paid	032
3. Repayment of finance lease	033
4. Purchase of treasury shares	034
5. Other cash outflows from financing activities	035	11.506.471	2.028.155
VI. Total cash outflows from financing activities	036	23.521.467	14.268.634
C1) NET INCREASE OF CASH FLOW
FROM FINANCING ACTIVITIES (030-036)"	037	0	0

Cash flow statement - indirect method Period 01/01 to 30/09/2016. Company: ILIRIJA d.d. BIOGRAD NA MORU

C2) NET DECREASE OF CASH FLOW		19.676.467	10.668.634
FROM FINANCING ACTIVITIES (036-030)"	038
Total increases of cash flows (013 – 014 + 025 – 026 + 037 – 038)	039	581.191	0
Total decreases of cash flows (014 – 013 + 026 – 025 + 038 – 037)	040	0	302.954
Cash and cash equivalents at the beginning of period	041	88.220	337.876
Increase of cash and cash equivalents	042
Decrease of cash and cash equivalents	043
Cash and cash equivalents at the end of period	044	669.411	34.922

STATEMENT OF CHANGES IN EQUITY period 01/01 to 30/09/2016

Position	AOP	Previous year	Current year
1	2	3	4
1. Subscribed share capital	001	137.162.300	159.085.880
2. Capital reserves	002	829.039	8.921.539
3. Reserves from profit	003	21.723.815	23.435.964
4. Retained earnings or loss carried forward	004	14.402.772	19.870.143
5. Net profit or loss for the period	005	39.475.129	44.789.148
6. Revaluation of tangible assets	006
7. Revaluation of intangible assets	007
8. Revaluation of available for sale assets	008
9. Other revaluation	009
10. Total equity and reserves (AOP 001 to 009)	010	213.593.055	256.102.674
11. Foreign exchenge differences from foreign investments	011
12. Current and deferred taxes	012
13. Cash flow hedge	013
14. Change of accounting policies	014
15.Correction of significant mistakes of prior period	015
16. Other changes	016	39.475.129	44.789.148
17.Total increase or decrease of equity (AOP 011 to 016)	017	39.475.129	44.789.148
17 a. Attributable to majority owners	018
17 b. Attributable to minority interest	019

ILIRIJA d.d. BIOGRAD NA MORU Biograd na Moru, 14/10/2016

Statement made by the persons responsible for preparation of financial statements for the period from 01/01 to 30/09/2016

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 from January to September 2016 have been prepared in accordance with International Financial Reporting Standards and Croatian Accounting Act.

The financial statements give a true and fair view of the financial position of the Company as at 30/09/2016, operating results and cash flows of the Company in accordance with International Financial Reporting Standards. The Management's Report gives a true presentation of operating results and position of the Company as at 30/09/2016.

Accounting Manager: Management Board: Zorka Strpić Goran Ražnjević

AI assistant

Ilirija d.d. — Interim / Quarterly Report 2016

2092_10-q_2016-10-28_12281375-dae9-4735-8e3e-868e940b681c.pdf

financial statements for period from 01/01/2016 to 30/09/2016

contents:

1. overview of key performance indicators for the period from 01st january to 30th september 2016

2. key information for the period from 01/01 to 30/09/2016

Certificates:

Standards:

4. chronological overview of the company development

5. company's bodies 2.1 company management board

2.2 supervisory board

2.3 shareholders' assembly

8. ownership structure of the company as at 30/09/2016 and trading in the company's shares at the zagreb stock exchange

Ownership structure of the Company as at 30th September 2016

trading in shares of the company on the croatian capital market in the year 01/01 -30/09/2016

The movement of the share price designated as ILRA-R-A and comparison with CROBEX and CROBEXTURIST indices

The movement of the share price ILRA-R-A and comparison with CROBEX and CROBEXTURIST indices

ilirija resort hotels & villas

marina kornati

kamp park soline

sports facilities:

ilirija travel

event boat "nada"

arsenal

diffuse hotel ražnjevića dvori ad 1307

hospitality

10. operating results physical operating results

quarter of 2016.

hotel sector

Hotel sector capacities

% Share of individual hotel (number of beds)

Overview and comparison of realized arrivals and overnight stays from 01/01/2016 to 30/09/2016 to the same period in 2014 and 2015

Graph of the realized overnight stays by source markets for the period from 01/01/2016 to 30/09/2016

Occupancy rate for the period from 01/01/2016 to 30/09/2016 and the comparison to the same period of 2015

Percentage share

Occupancy rate for the period from 01/01/2016 to 30/09/2016 and the comparison to the same period of 2015

Occupancy days

Monthly comparison of revenues/overnight stays of Ilirija hotels from 01/01/2016 to 30/09/2016 and comparison to the same period of 2015

ilirija travel complementary product

nautics

Marina Kornati capacities

% Share of a individual marina - berths

Cumulative overview of physical turnover of Marina Kornati during the period from 01/01/2016-30/09/2016 and comparison with the same period in 2015

Vessels with berth contract in the period from 01/01/2016-30/09/2016 and comparison with the same period in 2015

Vessels based on berth contract

Transit berth – inbound vessels during the period from 01/01/2016-30/09/2016 and comparison with the same period in 2015

Transit berth – overnight stay of vessels during the period from 01/01/2016-30/09/2016 and comparison with the same period in 2015

Activities of port repair services during the period from 01/01/2016-30/09/2016 and comparison with the same period in 2015

Revenues generated by Marina Kornati during the period from 01/01/2016-30/09/2016 individually by months and comparison with the same period in 2015

Cumulative overview of revenues generated by Marina Kornati during the period from 01/01/2016-30/09/2016 by months and comparison with the same period in 2015

camping

Capacities of the Camp "Park Soline"

Arrivals and overnight stays by source markets and average days of stay during the period from 01/01/2016 to 30/09/2016 and comparison with the same period in 2015

Overnight stays by source markets during the period from 01/01/2016 to 30/09/2016

Cumulative overview of daily and monthly occupancy of accommodation units of the camp during the period from 22/04 to 30/09/2016

Revenues of the camp during the period from 01/01/2016 to 30/09/2016 and comparison with the same period in 2015

financial operating results of the company

Overview of financial operating results during the period from 01/01/2016 to 30/09/2016 and comparison with the same period from 2010 to 2016

1.

2.

3.

Financial statements of the Company as at 30th September 2016 and comparison with the same period in 2014 and 2015

revenues by activities

fundamental financial indicators of the company's position as at 30/09/2016

3.

OVERVIEW of fundamental cumulative and comparative indicators of the Company, or the position of liabilities, capital, value of assets and other operating indicators of the Company as at 30/09/2016 and for the period from 2009 to 2016

operating and other expenses

financial expenses

extraordinary expenses

liquidity

share split

earning per share

uncertainty of collecting revenues and potential future costs

13. business expectations and development plan of the company in the year 2016

trolling.

14. operational risks of the company

16. sustainable develop- ment and corporate social responsibility

Economic viability

Incorporation of the corporate social responsibility into the company's business strategy

Ilirija d.d. Interim / Quarterly Report 2016