CONSOLIDATED ANNUAL REPORT OF THE GROUP AND AUDITOR’S REPORT
FOR 2022
Contents
Page
Independent Auditor’s Report
1 - 7
Statement of the Management Board's responsibilities
8
Consolidated statement of comprehensive income
10
Consolidated statement of financial position
11 - 12
Consolidated statement of changes in equity
13
Consolidated statement of cash flows
14
Notes to the consolidated financial statements
15 – 62
Consolidated Management Report
63 – 79
Corporate Governance Statement
80 – 83
1
2
3
4
5
6
7
8
9
JADRAN joint stock company for hotel management and tourism
Crikvenica
CONSOLIDATED ANNUAL
FINANCIAL STATEMENTS
FOR 2022
Consolidated statement of comprehensive income
For the year ended 31 December 2022 (All amounts in HRK)
10
*Comparative data have been altered due to the discontinued operations. Please see note 38 for details.
**The accompanying notes are an integral part of these consolidated financial statements.
These consolidated financial statements have been authorised and signed by the Management Board.
Note
2021*
2022
Continuing operations
Revenue
6
Other income
7
Total operating income from continuing operations
Cost of goods sold
(221,968 )
(306,106 )
Cost of raw materials and supplies
8
(24,923,333 )
(45,919,836 )
Cost of services
9
(31,685,268 )
(47,042,690 )
Staff costs
10
(42,056,179 )
(62,150,631 )
Depreciation and amortisation
11
(50,272,330 )
(60,625,787 )
Impairment of non-current non-financial assets
12
(7,314,803 )
Net gains/(losses) on value adjustment of financial assets
13
(12,784 )
Other operating expenses
14
(9,180,088 )
(13,016,588 )
Total operating expenses from continuing operations
(155,615,975 )
(236,389,225 )
Operating (loss)/profit from continuing operations
(2,617,474 )
Finance income
15
Finance costs
15
(12,934,744 )
(17,305,585 )
Net loss from financing activities
(9,638,127 )
(15,439,340 )
Loss before tax
(12,255,601 )
(2,177,511 )
Income tax
16
Net loss from continuing operations
(12,255,601 )
(2,177,511 )
Profit from discontinued operations
38
Loss for the period
(6,802,101 )
(780,244 )
Other comprehensive income
Total comprehensive loss for the year
(6,802,101 )
(780,244 )
Loss per share from continuing operations
17
(0.44 )
(0.08 )
Loss per share with discontinued operations
17
(0.24 )
(0.03 )
Consolidated statement of financial position
As at 31 December 2022 (All amounts in HRK)
11
*The accompanying notes are an integral part of these consolidated financial statements.
These consolidated financial statements have been authorised and signed by the Management Board.
Note
31 December 2021
31 December 2022
ASSETS
Non-current assets
Goodwill
Property, plant and equipment
18
Intangible assets
19
Investment property
20
Financial assets
21
Other non-current assets
Right-of-use assets
36
Deferred tax assets
16
Total non-current assets
Current assets
Inventories
22
Trade receivables
23
Receivables from the government
24
Income tax receivable
Other receivables
25
Cash and cash equivalents
26
Assets held for sale
39
Total current assets
TOTAL ASSETS
Consolidated statement of financial position
As at 31 December 2022 (All amounts in HRK)
12
*The accompanying notes are an integral part of these consolidated financial statements.
These consolidated financial statements have been authorised and signed by the Management Board.
Note
31 December 2021
31 December 2022
EQUITY AND LIABILITIES
Capital and reserves
Share capital
Capital reserves
Accumulated loss
(175,900,692 )
(176,680,936 )
Total capital and reserves
27
Non-current liabilities
Provisions
28
Liabilities to financial institutions
29
Other non-current liabilities
30
Lease liabilities
36
Total non-current liabilities
Current liabilities
Trade payables
31
Liabilities for advances, deposits and guarantees
32
Liabilities to employees
33
Liabilities to the government
34
Liabilities to banks and other financial institutions
29
Other current liabilities
35
Lease liabilities
36
Liabilities from assets held for sale
38
Total current liabilities
Total liabilities
TOTAL EQUITY AND LIABILITIES
Consolidated statement of changes in equity
For the year ended 31 December 2022
(All amounts in HRK)
13
*The accompanying notes are an integral part of these consolidated financial statements.
These consolidated financial statements have been authorised and signed by the Management Board.
Note
Share (registered)
capital
Capital
reserves
Accumulated
loss
Total
Balance at 1 January 2021
(169,098,591 )
Comprehensive loss for the year
(6,802,101 )
(6,802,101 )
Balance at 31 December 2021
(175,900,692 )
Comprehensive loss for the year
27
(780,244 )
(780,244 )
Balance at 31 December 2022
(176,680,936 )
Consolidated statement of cash flows
For the year ended 31 December 2022 (All amounts in HRK)
14
**The accompanying notes are an integral part of these consolidated financial statements.
These consolidated financial statements have been authorised and signed by the Management Board.
Note
2021*
2022
Cash flow from operating activities
Profit / (loss) before tax from:
Continuing operations
(12,255,601 )
(2,177,511 )
Discontinued operations
38
Profit / (loss) before tax including discontinued operations
(6,802,101 )
(780,244 )
Depreciation and amortisation
11
Net impairment of non-current non-financial assets
12
Gains from value adjustment of non-current financial assets
(1,000,000 )
(107,991 )
Net losses / (gains) on sale and disposal of non-current assets
(445,419 )
Net gains on termination of lease contract
7
(10,668,601 )
Changes in non-current provisions
(94,902 )
Interest income
15
(1,278 )
(1,678 )
Interest expense
15
Net unrealized foreign exchange differences
(612,051 )
(460,439 )
Net gains on impairment of current financial assets
13
(14,377 )
(262,797 )
Impairment of goodwill
12
Changes in trade and other receivables
(3,422,312 )
Changes in inventories
(274,892 )
(119,783 )
Decrease / (increase) in trade and other payables
(4,318,479 )
Cash flows from operating activities
Interest paid
37
(11,352,164 )
(14,936,328 )
A. Net cash from operating activities
Cash flow from investing activities
Payments for purchases of non-current tangible and intangible assets
(43,101,961 )
(33,053,436 )
Proceeds from sale of non-current tangible and intangible assets
18
Interest received
Loans granted
(353,918 )
B. Net cash from investing activities
(15,481,155 )
(33,051,758 )
Cash flow from financing activities
Proceeds from borrowings
37
Repayment of borrowings
37
(17,973,734 )
(28,474,613 )
Repayment of lease liabilities
37
(19,360,354 )
(27,502,004 )
C. Net cash from financing activities
(37,334,088 )
(49,949,017 )
Net decrease in cash
(4,384,278 )
(17,182,788 )
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
26
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
15
1. PRINCIPAL ACTIVITY AND GENERAL INFORMATION ABOUT THE COMPANY AND THE GROUP
JADRAN joint stock company for hotel management and tourism, Bana Jelačića 16, Crikvenica (the “Company”) is
registered with the Commercial Court in Rijeka under Reg. No. (MBS): 040000817. The Company’s subscribed share
capital amounts to HRK 482,507,730. The Company’s authorised representatives are Ivan Safundžić, Member of the
Management Board, appointed on 1 December 2020 and Miroslav Pelko, Member of the Management Board,
appointed on 1 September 2021. The Company is represented by the Management Board in such a manner that
each Member of the Management Board represents the Company jointly with another member of the Management
Board. The Company’s principal activity is the provision of accommodation services in hotels, resorts and campsites,
preparation of food and provision of food services, and preparation and serving of drinks and beverages.
In 2022, the average number of the Group’s employees was 329 (2021: 320 employees).
The Jadran Group consists of Jadran d.d., Crikvenica and its subsidiaries Club Adriatic d.o.o. and Stolist d.o.o. (the
“Group”) in which Jadran d.d., Crikvenica has a 100% share and voting rights.
As stated in Note 39, on 6 February 2023, i.e. after the reporting period, Jadran d.d. has successfully fulfilled all the
prerequisites established by the concluded agreements on the purchase of business shares in the company Adria
coast turizam d.o.o., which provided for the acquisition of 100% of the shares in that company by Jadran d.d., as well
as the agreement on the sale of business shares in the company Club Adriatic d.o.o., by which Jadran sold and
transferred 100% of the shares in that company to Adria Grupa Baško Polje d.o.o.
Based on the above facts, the criteria for classifying this subsidiary as Assets held for sale in accordance with IFRS
5 Non-current assets held for sale and discontinued operations are met as of the reporting date.
In 2022, the Supervisory Board consisted of:
From 01.01.2022. until 22.05.2022
• Goran Hanžek, president of the Supervisory Board
• Karlo Došen, Deputy Chairman of the Supervisory Board
• Mirko Herceg, member of the Supervisory Board
• Dragan Magaš, member of the Supervisory Board
• Adrian Čajić, member of the Supervisory Board.
From 23.05.2022. until 07.07.2022
• Goran Hanžek, president of the Supervisory Board
• Karlo Došen, Deputy Chairman of the Supervisory Board
• Adrian Čajić, member of the Supervisory Board.
From 08.07.2022. until 31.12.2022
• Goran Hanžek, president of the Supervisory Board
• Karlo Došen, Deputy Chairman of the Supervisory Board
• Mirko Herceg, member of the Supervisory Board
• Sandra Janković, member of the Supervisory Board
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
16
2. SIGNIFICANT ACCOUNTING POLICIES
The most significant accounting policies consistently applied in the current year and previous years are set out below:
2.1. Statement of compliance and basis of presentation
The Group’s financial statements have been prepared in accordance with the International Financial Reporting
Standards (IFRS) as adopted by the EU. The financial statements also comply with the Croatian Accounting Act
which refers to the IFRSs as adopted by the EU.
The accounting policies are consistent with those of the previous fiscal year, except as stated and published below.
The Group's financial statements have been prepared under the accrual basis according to which the transaction
effects are recognised when incurred and included in the financial statements for the period to which they relate, and
by applying the basic accounting assumption of going concern.
The financial statements have been presented in the Croatian currency, Croatian kuna (“HRK”), which is the
Company’s functional currency.
2.1. Critical accounting judgements and key sources of estimation uncertainty
In preparing these financial statements, certain estimates have been used that affect the presentation of the Group’s
assets and liabilities, income and expenses and the disclosure of the Group’s contingent liabilities.
Future events and their effects cannot be anticipated with certainty, and therefore actual results may differ from these
estimates. The estimates used in the preparation of the financial statements are subject to change as new events
occur, as more experience is gained, additional information is obtained and due to the changing environment in which
the Group operates.
The key estimates used in the application of accounting policies when preparing consolidated financial statements
are disclosed in Note 3 below.
2.2. Going concern
The consolidated financial statements have been prepared on the assumption that the Company will continue in
business on a going concern basis.
The Group realised the planned divestment in the company Club Adriatic (sale of land), thus creating the
preconditions for the repayment of loans granted to a related company, but also providing funds for a continuous
investment cycle, although restricted due to the pandemic. In 2022, Jadran d.d. received the return of all remaining
loans from the related company Club Adriatic.
In the course of the past years, the Group has invested significant amounts in the renovation of facilities from the
portfolio and the improvement of the portfolio of services provided to clients in all destinations in which it operates.
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
17
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.3. Going concern (continued)
Inflationary pressures that appeared in the first quarter of 2022, indirectly caused by the political situation in Russia
and Ukraine, and increased during the summer, had the effect of increasing the input costs of raw materials and
supplies. The Group amortized this increase, as much as it could, by increasing the selling prices of accommodation
and food and beverages. The energy crisis in 2022 affected the Group only slightly, because it had a three-year
contract with an electricity supplier whose prices were several times lower than the market price.
The Group's cumulative losses as at 31 December 2022 amounted to HRK 176.681 thousand (31 December 2021:
HRK 175,901 thousand), and current liabilities exceeded current assets by HRK 52.945 thousand (31 December
2021: HRK 35,811 thousand).
After the passage of the challenging period caused by the COVID-19 pandemic, which greatly affected the Group
and the entire sector in which it operates, the Group made a operating profit in the past year. Cash flow projections
prepared by the Company's management (and approved by the Supervisory Board) for the next period show positive
results. Business revenues for the first three months of 2023 are significantly better than in the same period last year.
This revenue normalized for the one-off income from the termination of the lease agreement for the Grand Hotel View
and compared to the same capacities, the Group's performance is 66% above compared to the previous year.
According to the current booking, overnight stays are 83%, and income from accommodation is 88% above those in
2022, on the basis of which the Group expects a continuation of the positive trend in the rest of the year.
Most of the Group's current liabilities as of the reporting date refer to liabilities to banks and other financial institutions,
trade payables and lease liabilities, which the Group regularly settles from the funds in the account from continuing
business activities. Due to the seasonality of the Group has agreed credit engagements, so that, in case of need, it
would be able to ensure liquidity.
Given the fact that the Group has the full support of the owners, in the opinion of the Management, the above supports
the assertion that the Group will have sufficient resources to continue operations for a period of at least 12 months
from the reporting date.
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
18
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4. Changes in accounting policies and disclosures
The adopted accounting policies are in accordance with the accounting policies of the previous financial year, except
for the changes listed below, which are the result of amendments to the International Financial Reporting Standards
(IFRS) adopted by the Group from January 1, 2022:
• Amendments to IFRS 3 Business Combinations, IAS 16 Property, Plant and Equipment, IAS 37
Provisions, Contingent Liabilities and Contingent Assets and the cycle of Annual Improvements to IFRS
2018-2020 (Amendments), all issued on May 14, 2020 (effective date for annual periods beginning on
or after January 1, 2022).
The adoption of these standards and interpretations did not have a significant impact on the Group's financial
statements.
2.4.1 Standards, amendments to standards and interpretations that are issued, but not yet effective
The standards, amendments to standards and interpretations that are issued, but not yet effective, up to the date of
issuance of the financial statements are disclosed below. The Group intends to adopt these standards, if applicable,
when they become effective.
Until 31 December 2022, the European Commission endorsed the following changes to the accounting principles
applicable to reporting, that were not effective for the preparation of 2022 financial statements:
• IFRS 17 Insurance Contracts (issued on 18 May 2017); including Amendments to IFRS 17 (issued on
25 June 2020);
• Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Definition of
Accounting Estimates (issued on 12 February 2021)
• Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure
of Accounting Policies (issued on 12 February 2021);
• Amendments to IAS 12 Income taxes: Deferred Tax related to Assets and Liabilities arising from a
Single Transaction (issued on 7 May 2021);
• Amendments to IFRS 17 Insurance contracts: Initial Application of IFRS 17 and IFRS 9 – Comparative
Information (issued on 9 December 2021).
As at 31 December 2022 the IASB issued the following standards, amendments, interpretations or revisions, whose
application is subject to completion of the endorsement process by the competent bodies of the European
Commission, which is still ongoing:
• Amendments to IAS 1: Presentation of Financial Statements: Classification of Liabilities as Current or
Non-current - Deferral of Effective Date (issued on 23 January 2020 and 15 July 2020 respectively),
• Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback (issued on 22 September
2022).
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
19
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.5. Property, plant and equipment
Property, plant and equipment are presented in the statement of financial position (balance sheet) at historical cost
less accumulated depreciation and accumulated impairment losses. Cost includes the purchase price and all costs
directly attributable to bringing the asset to working condition for its intended use. The costs of current maintenance
and repairs, replacements and minor investment maintenance are recognised as expense when incurred. The costs
of major overhauls and replacements are capitalised.
Gains and losses on the retirement or disposal of property, plant and equipment are presented in profit or loss in the
period when incurred.
Property under construction is presented at cost less any impairment losses. Depreciation commences when the
assets are ready for their intended use. Depreciation is calculated on a straight-line basis over the estimated useful
lives of the assets, as follows:
2.6. Intangible assets
Non-current intangible assets include licenses and software and are measured at historical cost less accumulated
amortisation and any accumulated impairment losses. Subsequent costs are capitalised only if they increase future
economic benefits arising from the asset. All other costs are recognised in profit or loss as incurred.
The amortisation charge is recognised in profit and loss on a straight-line basis over the estimated useful lives of
intangible assets, from the date that they are available for use.
Intangible assets are amortised using the straight-line method over a period of 5 years.
Buildings - buildings made of concrete, metal, stone and brick
20-59 years
Buildings - buildings made of wood and other materials
20-59 years
Campsite infrastructure
20-59 years
Furniture and technological equipment
2-10 years
Transportation vehicles
7 years
Passenger cars
10 years
Office equipment
4-10 years
Equipment - mobile homes
10 years
ICT equipment
5-10 years
Other equipment
2-10 years
Landscaping
10 years
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
20
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.7. Investment property
Investment property mainly relates to buildings and other business premises within the hotels and campsites and is
held to earn long-term rentals or capital appreciation and is not owner-occupied. Investment property is treated as a
long-term investment unless it is intended to be sold in the next year and a buyer has been identified in which case
it is classified within current assets.
Investment property is carried at historical cost less accumulated depreciation. The depreciation of buildings is
calculated using the straight-line method to allocate cost over their estimated useful life.
Subsequent expenditure is capitalised only when it is probable that future economic benefits associated with it will
flow to the Group and the cost can be measured reliably. All other repairs and maintenance costs are expensed when
incurred. If an investment property becomes owner-occupied, it is reclassified to property, plant and equipment, and
its carrying amount at the date of reclassification becomes its deemed cost to be subsequently depreciated.
Income from a lease with the Group as the lessor is recognised in income for the period over the lease term.
2.8. Impairment of non-financial assets
Non-financial assets are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less
costs to sell and its value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels
for which there are separately identifiable cash flows (cash-generating units). The Group defined the CGU at the
profit centre i.e. accommodation facility level.
Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairment at each
reporting date.
2.9. Financial assets
The business model reflects how the Group manages their assets in order to generate cash flows - regardless
whether the Group’s objective is: (i) solely to collect contractual cash flows from the assets (“hold to collect contractual
cash flows”) or (ii) to collect both the contractual cash flows and cash flows arising from the sale of assets (“hold to
collect contractual cash flows and sell”) or, if neither of (i) and (ii) are applicable, financial assets are classified as
part of “other” business model and are measured at fair value through profit or loss.
As at the reporting date, the Group’s financial assets comprise receivables.
Impairment of financial instruments
The measurement of the expected credit loss (ECL) is based on reasonable and supportable information available
without undue costs or effort, including information about past events, current and foreseeable future conditions and
circumstances. Assessments of expected credit losses are normally based on historical probability of the inability to
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
21
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.9. Financial assets (continued)
For trade receivables, a simplified approach to expected credit loss measurement is applied i.e. measurement on a
collective basis, depending on the type of customer, and are monitored according to their ageing structure. For
example, ageing groups may be defined as follows: not past due, due in 0-90 days, due in 90-180 days, etc. The
ageing groups are determined according to the stages of the collection process.
2.10. Inventories
Inventories are carried at the lower of cost and net realisable value. Cost is determined using the weighted average
cost method. Net realisable value is the estimated selling price in the ordinary course of business, less costs to sell.
2.11. Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits held at call with banks, and other short-term highly
liquid instruments with original maturities of three months or less.
2.12. Borrowings
Borrowings are initially recognised at fair value less transaction costs and subsequently at amortised cost using the
effective interest rate method. Interest is recognised as an expense, except in the case of the construction of a
qualifying asset, when it is capitalised as part of the asset’s cost.
The effective interest rate method is a method to calculate the amortised cost of a financial liability and allocate
interest expenses over the accounting period.
Borrowings are classified based on the agreed maturity as current liabilities, or non-current liabilities if they mature
in more than 12 months. If the Group has an unconditional right to defer the settlement of a liability for at least 12
months after the reporting date, such liabilities are classified as non-current liabilities.
The Group derecognises financial liabilities when, and only when, they have been discharged, cancelled or have
expired.
2.13. Trade payables
Trade payables are obligations to pay for goods or services that have been acquired from suppliers in the ordinary
course of business. Trade payables are classified as current liabilities if payment is due within one year or less. If
not, they are presented as non-current liabilities. Trade payables are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest method.
2.14. Taxation
The income tax expense represents the sum of the tax currently payable and deferred tax.
The current tax liability is based on taxable profit for the year. Taxable profit differs from profit as reported in the
income statement because it excludes items of income or expense that are taxable or deductible in other years or
non-taxable, i.e. not recognised as expense for income tax purposes. The Group’s current tax liability is calculated
using tax rates that have been enacted by the reporting date.
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
22
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.14. Taxation (continued)
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences,
and deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is
probable that taxable profits will be available against which those deductible temporary differences and tax losses
can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the tax asset to be recovered.
Deferred tax is recognised as an expense or income in profit or loss, except when they relate to items credited or
debited directly to equity, in which case the deferred tax is also recognised directly in equity.
2.15. Employee benefits
Pension obligations and post-employment benefits
In the continuing course of business through salary deductions, the Group makes payments to mandatory pension
funds on behalf of its employees as required by law. All contributions made to the mandatory pension funds are
recorded as salary expense when incurred. The Group is not obliged to provide any other post-employment benefits.
Termination benefits
The Group pays one-time termination benefits to its employees at retirement. The liability and costs of such benefits
are determined using the projected unit credit method and discounted to their present value based on calculations
made at the end of each reporting period, which take into account the assumptions of the number of employees
estimated to become entitled to termination benefits at regular retirement, the estimated cost of such termination
benefits, and the discount rate defined as the average anticipated rate of return on investment in government bonds.
Actuarial gains and losses resulting from experience adjustments and changes in actuarial assumptions are
recognised immediately in profit or loss.
Long-term employee benefits
The Group recognises a liability for long-term employee benefits (jubilee awards) evenly over the period the benefit
is earned based on actual years of service. The long-term employee benefit liability is determined annually at the end
of each reporting period using assumptions regarding the likely number of staff to whom the benefits will be payable,
estimated benefit cost and the discount rate which is determined as the average expected rate of return on
investments in government bonds. Actuarial gains and losses arising from experience adjustments and changes in
actuarial assumptions are recognised immediately in profit or loss.
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
23
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.16. Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events;
it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been
reliably estimated. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money and the risks specific to the liability. Where the Group
expects a provision to be reimbursed, the reimbursement is recognised as a separate asset but only when the
reimbursement is virtually certain.
2.17. Share capital
The Group’s share capital comprises ordinary shares. The consideration paid for treasury shares purchased,
including any directly attributable transaction costs, is deducted from equity attributable to the Group’s shareholders
until the shares are withdrawn, reissued or disposed of. When such shares are subsequently disposed of or reissued,
any consideration received, net of any directly attributable transaction costs, is included in equity attributable to the
2.18. Revenue recognition
Revenue is income arising in the course of the Group’s continuing activities. A five-step model used for recognition
of revenue from contracts with customers is presented below:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation
Revenue is recognised for each separate contractual performance obligation in the amount of the transaction price.
The transaction price is the amount of the consideration in the contract to which the Group expects to be entitled in
exchange for transferring control over the promised goods or services to a customer.
The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future
economic benefits will flow to the Group and specific criteria have been met for each of the Group’s activities.
Revenue from provision of services
Revenue from hotel & tourism services is recognised in the period the services are provided.
Lease income
Lease income is generally recognised in the period the services are provided, using a straight-line method over the
lease term.
Interest income
Interest income is recognised on a time-proportion basis using the effective interest method.
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
24
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.19. Government grants
Government grants are recognised at their fair value where there is reasonable assurance that the grant will be
received and the Group and the Company will comply with all attached conditions. A grant receivable as
compensation for costs or losses already incurred or for immediate financial support, with no future related costs, are
recognised as income in the period in which it is receivable within other operating income - Note 7.
2.20. Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and
rewards of ownership to the lessee. All other leases are classified as operating leases.
The Group as the lessor
Rental income from operating leases is recognised on the straight-line basis over the term of the relevant lease. Initial
direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased
asset and recognised on a straight-line basis over the lease term.
The Group as the lessee
Assets held under finance leases are initially recognised as assets of the Group at their fair value at the
commencement date of the lease or, if lower, at the present value of the minimum lease payments. The corresponding
liability to the lessor is included in the statement of financial position as a finance lease obligation. Lease payments
are apportioned between finance costs and the reduction of the lease liability to achieve a constant rate of interest
on the remaining balance of the liability. All other borrowing costs are recognised in gain or loss in the period in which
they arise.
At the inception of a contract, the Group assesses whether the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration. If the above conditions are met, the contract is
considered to be or contain a lease. If the terms and conditions of the contract are changed, the Company shall
reassess whether the above conditions are met.
The Group determines the lease term as the non-cancellable period of a lease, together with the periods covered by
the option to extend the lease if the lessee is reasonably certain to exercise that option; and the periods covered by
the option to terminate the lease if the lessee is reasonably certain not to exercise that option, with the obligation to
reassess the above if significant events or a significant change in circumstances arise.
At the commencement date (the date on which the underlying asset is available for use), the Group recognises a
right-of-use asset and a lease liability.
The right-of-use assets are measured at cost that comprises: the amount of the initial measurement of the lease
liability; any lease payments made at or before the commencement date, less any lease incentives received; any
initial direct costs incurred.
After the commencement date, the right-of-use assets are measured using the cost model. Under the cost model,
the right-of-use asset is measured at cost: less any accumulated depreciation on a straight-line basis over the period
of the lease (3-15 years), and any accumulated impairment losses; and adjusted for any remeasurement of the lease
liability.
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
25
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.20. Leases (continued)
Lease liabilities at the present value of the lease payments that are not paid by that date. The lease payments are
discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the lessee’s
incremental borrowing rate is used.
The measurement of lease liabilities includes: fixed payments less any lease incentives receivable; variable lease
payments that are based on an index or a rate; amounts expected to be payable by the Group under residual value
guarantees; the exercise price of a purchase option if the Group is reasonably certain to exercise that option;
payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.
After the commencement date, the lease liability is measured considering any changes in the interest rate, lease
payments made and any reassessment or lease modifications.
Short-term leases and leases of low-value assets
The Group has decided to apply the short-term lease exemption recognition (for leases up to 12 months that do not
include the purchase option) and leases for which the underlying asset is of low value (up to HRK 30,000). Payments
for leases for which the underlying asset is of low value are recognised on a straight-line basis as an expense over
the lease term. The Group will consider a short-term lease to be a new lease if there is a lease modification and/or a
change to the lease term. These leases mainly relate to photocopier machines and fire extinguishers.
The Group as the lessor
Leases where the Group does not transfer substantially all the risks and rewards of ownership of the asset are
classified as operating leases. Lease income is recognised on a straight-line basis over the lease term and included
in the statement of comprehensive income due to its operating nature.
Concession arrangements
If investments are made that are expected to last less than one accounting period, then that expense is recognised
as expense for the period, and if investments made in the concession area are expected to last longer than one
accounting period, they will be capitalised. Investments in the concession area have a limited useful life and are
stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method to allocate the
cost of investments over their estimated useful lives, which is consistent with the remaining life of the concession
2.21. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the
cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment
income earned on the temporary investment of specific borrowings over the period of their expenditure on qualifying
assets is deducted from the borrowing costs eligible for capitalisation.
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
26
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.22. Foreign currencies
Transactions in currencies other than Croatian kuna are recorded at the exchange rate prevailing at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies are re-translated at the reporting date
using the exchange rate prevailing at that date. Gains and losses arising on translation are charged to profit or loss
in the period when incurred.
2.23. Earnings / (loss) per share
Earnings per share are determined by dividing the profit or loss attributable to equity holders of the Group by the
weighted average number of participating shares outstanding during the year.
2.24. Business combinations
Subsidiaries are all entities controlled by the Group. The Group controls the entity when the Group is exposed or is
entitled to variable returns from its association with the entity and has the ability to influence those returns through
its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group
and are de-consolidated from the date that control ceases.
The Group applies the acquisition method to account for business combinations. The consideration transferred for
the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners
of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of
any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities
and contingent liabilities assumed in a business combination are measured initially at their fair values at the
acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition
basis, either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of the
acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held
equity interest in the acquiree is remeasured to fair value as at the acquisition date through comprehensive income.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is
recognised in accordance with IFRS 9 either as income or expense or as a change to other comprehensive income.
The contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is
accounted for within equity.
Goodwill is initially measured as the difference between the consideration transferred and the amount of non-
controlling interest in the acquiree in relation to the fair value of identified net assets acquired. If this consideration is
lower than the fair value of the net assets acquired, the difference is recognised in the statement of comprehensive
income. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
2.25. Consolidation
Intercompany transactions, balances, income and expenses from transactions with Group entities are eliminated.
Gains and losses from intercompany transactions recognised in assets are also eliminated. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
27
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.26. Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision-maker. The chief operating decision-maker is responsible for allocating resources and assessing
performance of the operating segments. The chief operating decision-maker is the Group’s Management Board.
2.27. Non-current assets held for sale and disposal groups
Non-current assets and disposal groups classified as held for sale are measured at the lower of the carrying amount
or fair value less costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying
amount will be recovered primarily through sale rather than through continued use. This condition is considered to
be met only when the sale is highly probable, and the asset or disposal group is immediately available for sale in its
current condition at the balance sheet date. The activities necessary to complete the sale should indicate that it is
not likely that there will be any significant changes to the sale or that the sale will be abandoned. Management must
commit to a sale, which is expected to be recognized as a completed within one year of the date of classification.
Property, plant and equipment and intangible assets are not depreciated and amortized after they are classified as
held for sale.
Assets and liabilities classified as held for sale or distribution are reported separately as current or short-term items
in the statement of financial position.
2.28. Events after the end of the reporting year
Events after the end of the reporting year providing additional information about the position of the Group as at the
date of the financial statements (adjusting events) are reflected in the financial statements. Not-adjusting events are
disclosed in the notes to the financial statements, if material.
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
28
3. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES
In applying the accounting policies described in Note 2, Group management has made certain judgements that had
a significant impact on the amounts reported in the financial statements (independent of those presented below).
These judgements are detailed in the relevant notes and the most significant ones among them relate to the
following:
Estimated useful life of property, plant and equipment
When a significant investment in tourism properties (buildings) occurs, the useful life of buildings or their
components is reassessed/reviewed. The useful lives should be periodically revised to reflect any changes in
circumstances since the previous assessment. Changes in estimate, if any, will be reflected prospectively in a
revised depreciation charge over the remaining, revised useful life.
Analysis of sensitivity to changes in useful lives:
By using a certain asset, the Group uses the economic benefits contained in this asset, which diminish more
intensely with economic and technological ageing. Consequently, in the process of determining the useful life of an
asset, in addition to assessing the expected physical utilisation, it is necessary to consider the changes in demand
on the tourism market, which will cause a faster economic obsolescence as well as a more intense development of
new technologies.
In view of the above, business operations in the hotel industry impose the need for more frequent investments, and
this circumstance contributes to the fact that the useful life of assets is decreasing.
If the useful lives of property, plant and equipment had been 10% longer/shorter, with all other variables held
constant, the net profit for the year would have been HRK 2,278 thousand higher/lower in 2021 (2021: HRK 2,413
thousand), and the net carrying amount of property, plant and equipment would have been HRK 2,778 thousand
higher/lower in 2022 (2021: HRK 2,942 thousand).
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
29
3. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES (continued)
Impairment of non-current non-financial assets - recoverable amount of property, plant and equipment,
investment property and right-of-use assets
1) Property, plant and equipment and investment property
In accordance with the adopted accounting policy, the Group reviews the carrying amounts of non-financial assets
(including property, plant and equipment, investment property and right-of-use assets) at least once a year to
determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable
amount is estimated. For the purpose of assessing impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash flows (cash-generating units). The cash-generating unit in the hotel
industry/tourism is the accommodation facility. The accounting policy is presented in Note 2.8.
Given the prolonged impact of the COVID-19 pandemic on the Group's operations and inflationary shocks that the
Group faced in 2022, the Group has assessed that there are indicators of impairment of certain categories of non-
current non-financial assets and in accordance with IAS 36 made an impairment test of all its cash-generating units
i.e. accommodation facilities (own as well as rental facilities).
The recoverable amount is calculated in one of two ways: by calculating the value of assets in use or by calculating
the fair value of assets less costs to sell for individual cash-generating units whose value in use determined by the
Discounted Cash Flows (DCF) method does not reflect their intrinsic value (taking into account their location and
development potential).
The investment cycle started by the Group in 2019 and continued following year resulted in an increase in revenue
in the facilities covered by new investments. During the preparation of the impairment test as at 31 December 2021
the Group estimated that the historical approach to allocating administrative costs by revenue of an individual facility
in relation to total revenues did not adequately reflect the Group’s new asset structure. In order to optimally allocate
the administrative costs of central services, a new method of allocating these costs had been applied, which was
based on the number of accommodation units per each facility.
During the preparation of impairment tests on the reporting date, the Group observed 4 different allocation keys
(number of accommodation units, revenue, GOP and EBIDTA). The application of three distribution keys (revenue,
GOP and EBIDTA) showed similar results for individual objects in the portfolio, while the application of a key based
on the number of accommodation units of an individual object resulted in significantly different values.
Due to the aforementioned deviations, the management concluded that it is appropriate to abandon the distribution
key by number of accommodation units and return to the "old key", i.e. distribution by revenue. Additionally, the
allocation keys were checked with other companies within the industry and it was concluded that this approach is
a market practice. By applying the new method of allocating administrative costs of central services, the Company’s
total operating result remained unchanged.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. In determining the recoverable amount, management considers key indicators such as revenue growth
based on occupancy of facilities, revenue per unit and expected market growth in the hotel industry, etc. The
valuations are based on five-year cash flow projections prepared by the Group's management, with the budget for
2022 also approved by the Supervisory Board.
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
30
3. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES (continued)
Impairment of non-current non-financial assets - recoverable amount of property, plant and equipment,
investment property and right-of-use assets (continued)
1) Property, plant and equipment and investment property (continued)
For the period after the end of the five-year period, the assumed long-term sustainable growth rate (sustainable
growth rate) was applied. Taking into account the significant capital investments in the Group's accommodation
units just before the outbreak of the Covid-19 pandemic, the sustainable growth rates used in the valuation
represent the maximum value of the projected inflation rates in the Republic of Croatia.
An overview of the assumptions used in the in-use value calculation model is as follows:
Note: the margin and revenue growth listed in the table above reflect the ranges after returning to the business
level after the Covid-19 pandemic (in 2023 or onward) and depend on the individual facility of different
characteristics.
The calculation of fair value less costs to sell is based primarily on the revenue method, and in two cases on the
comparative (for land) and cost method. According to the income method, real estate is worth as much as the cash
it is able to generate over its lifetime. After determining all income and expenses related to an individual
accommodation unit, the net income of all future periods is calculated and discounted at an adequate discount rate
in order to obtain the present value of future cash flows. The assumptions used in the income method are the
average board price per accommodation unit, the average occupancy rate, the estimated total cost defined as %
of GOP and the capitalisation factor.
The following is an overview of the key assumptions in the revenue method used:
Tourism 2023
Average board price (HRK) 43 - 646
Average occupancy rate 14% - 52%
Estimated total cost (% of GOP) 60%
Note: The key assumptions listed in the table above depend on the individual facility of different characteristics.
For accommodation facilities where land represents the most significant part of the estimated value, a
comparative method was used, i.e. method of determination based on realised comparable transactions on the
real estate market, in accordance with the current state of the respective real estate.
Prepared impairment tests suggest that the recoverable amount of each facility exceeds the net carrying amount
of each facility as at 31 December 2022 and, accordingly, there are no indications of impairment. Furthermore, as
the tests showed that the recoverable value of the facility, which was impaired during 2020, for the second year in
a row show a significantly higher value than the net book value, the Group decided to reverse the previously
recognized impairment in the amount of HRK 9,228 thousand.
Tourism
2023 - 2026
EBITDA margin
5% - 52% (higher profitability rates are assumed for campsites and
apartments)
Revenue growth
5% - 17% (depending on the type of accommodation and capital investment)
Discount rate (before tax)
10.2% - 10.4% (depending on the type of the CGU)
Sustainable long-term growth rate
2%
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
31
3. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES (continued)
Impairment of non-current non-financial assets - recoverable amount of property, plant and equipment,
investment property and right-of-use assets (continued)
1) Property, plant and equipment and investment property (continued)
The Group considered the impact of reasonable changes in key assumptions and identified the following:
• if the EBITDA margin rate were to decrease by 100 bps within the projected five-year period, the Group
should recognise an impairment in the amount of HRK 3.6 million in its records
• if the growth rate were to decrease by 100 bps within the projected five-year period, the Group should
recognise an impairment in the amount of HRK 13.2 million in its records
• if the discount rate were to increase by 50bps, the Group should recognise an impairment in the amount
of HRK 10.3 million in its records and
• if the terminal growth rate were to decrease by 50bps, the Group should recognise an impairment in the
amount of HRK 8.7 million in its records.
2) Right-of-use assets
In 2022, the Group conducted an impairment test for right-of-use assets with respect to the indicators of impairment
due to the prolonged effects of the COVID-19 pandemic. A leased accommodation facility was identified as a cash-
generating unit.
The recoverable amount of leased accommodation facilities has been determined on the basis of the value in use
based on financial projections in the contracted lease term at a discount rate. As the result of this analysis, for
leased accommodation object an impairment in the amount of 15,223 thousand was identified.
For tourism facilities for which the recoverable amount is determined at fair value less valuation costs, based on
the assessment of an independent appraiser, the Group has classified them in Level 3 of the fair value hierarchy.
The applied valuation methods for these facilities are described above.
Deferred tax assets
Deferred tax assets include the amount of HRK 18,905 thousand (2021: - ), which is created based of tax losses
carried forward and deducible temporary tax differences.
The Company has a remaining 4 years for utilization of amounts reported based on tax losses carried forward (for
more details please see note 15). The realization of deferred tax assets arising from deductible temporary tax
differences is not time-limited, and therefore there is no high uncertainty surrounding the use of this part.
During the assessment of the recoverability of the recognized deferred tax assets, the Company considered the
following factors in favour of recognition:
• implementation of the sale transaction of the subsidiary, Club Adriatic (notes 39 and 40);
• the result achieved in the observed year and projections of future operations as well as
• the pandemic of the COVID-19, which it considered as an event that will not repeat again.
The unfavourable factor of uncertainty surrounding the full realization of current business plans was also
considered.
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
32
3. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES (continued)
Deferred tax assets (continued)
Detailed projections of future business results were made for the next 6 years. Considering the uncertainty factor,
the Company decided to recognize deferred tax assets in the amount corresponding to the projections for the next
4 years. It is important to emphasize that the realization of a significant part of recognized deferred tax assets is
already expected in the first year.
Based on the analysis, the Company concludes that the deferred tax assets will be recoverable using estimated
future taxable income based on approved business plans and budgets. Taking into account all of the above, it is
expected that the Company will fully utilize all tax losses carried forward in the next couple of years, i.e. before they
expire.
Leases
As the interest rate implicit in the lease cannot be readily determined, the Group uses its own incremental borrowing
rate of 3.5% (2021: 2.70%) when calculating the lease liability for cash flow discounting purposes.
The Group defines a lease term as a non-cancellable period, together with periods under the lease extension and/or
termination option if it is reasonably certain that such option will be exercised (extension) or not exercised
(termination).
The Group does not expect to exercise either the lease termination or the extension option, and no potential effects
were calculated in relation to these options. The exception is the termination of the lease for the Grand Hotel View,
the effects of which will be calculated at within the purchase price allocation.
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
33
3. FINANCIAL INSTRUMENTS
Capital risk management
The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the
return to stakeholders through the optimisation of the debt and equity balance. The Group's capital structure
consists of share capital, statutory reserves, retained earnings and profit for the year.
Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest
rate risk and price risk), credit risk and liquidity risk. The Group does not have a formal risk management programme
in place, and the overall risk management is carried out by the Group’s Management Board and management.
Market risk
The Group’s activities primarily expose the Group to the financial risks of changes in foreign currency exchange
rates and interest rates (see below). Market risk exposures are supplemented by the sensitivity analysis. There has
been no change to the Group’s exposure to market risks or the manner in which it manages and measures the risk.
Currency risk management
The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate
fluctuations arise. The carrying amounts of the Group’s foreign currency denominated monetary assets and
31 December 2021
31 December 2022
Financial assets
Trade receivables
16,358,165
2,160,622
Non-current financial assets
1,353,918
-
Cash and cash equivalents
23,256,173
6,073,385
Total
40,968,256
8,234,007
Financial liabilities
Liabilities to financial institutions
244,804,041
222,880,923
Trade payables
15,476,049
10,605,294
Lease liabilities
183,638,312
339,497,773
Total
443,918,402
Assets
Liabilities
31 December
2021
31 December
2021
31 December
2021
31 December
2021
EUR
17,560,362
4,562,670
(562.283.768)
(421,260,716)
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
34
4. FINANCIAL INSTRUMENTS (continued)
Analysis of foreign currency sensitivity
The Group is exposed to foreign currency risk in the event of a change in the euro (EUR) exchange rate. The
analysis of the effects of changes for 2021 in the HRK exchange rate compared to the increase or decrease in HRK
value by 10% in relation to EUR shows that the Group’s loss would have been lower or higher by HRK 40,370
thousand. 10% is the rate used for internal reporting to the Management Board on foreign currency risk and
represents the Management Board's estimate of the reasonably possible change in foreign exchange rates.
With the introduction of the euro as the national currency in the Republic of Croatia on January 1, 2023, there is no
currency risk for the euro currency on the reporting date of December 31, 2022. The Company may be exposed to
currency transaction risk it enters into transactions using a currency that is different from the national currency
(euro). At the Group level, apart from HRK and EUR transactions, transactions in other currencies do not make up
a material part of the total turnover. After the introduction of the euro as the domestic currency as of January 1,
2023 the Group does not expect exposure to currency risk.
Interest rate risk management
The Group is exposed to interest rate risk as it enters into loan agreements with variable interest rates. The Group’s
exposure to interest rates based on financial assets and liabilities is detailed under Liquidity risk management. The
Group manages this risk by maintaining an appropriate ratio of loans with fixed and variable interest rates in its loan
Interest rate sensitivity analysis
Cash flow interest rate risk is the risk that the cost of interest for the instrument will fluctuate over time.
Most financial liabilities are contracted at fixed interest rates and the sensitivity analysis of interest rate changes to
financial liabilities contracted at a variable interest rate is shown in the following table:
2021
2022
Interest rate change by +100 bp
Decrease in profit/increase in loss
1,010,383
936,759
Interest rate change by -100 bp
Increase in profit/(decrease) in loss
(1,010,383)
(936,759)
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
35
4. FINANCIAL INSTRUMENTS (continued)
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss
for the Group. The Group constantly monitors its exposure to the parties it conducts business with and their credit
ratings and allocates the total value of transactions among acceptable customers.
The carrying amount of financial assets recorded in the financial statements, net of impairment losses, represents
Liquidity risk management
The ultimate responsibility for liquidity risk management rests with the Group's Management Board which has built
an appropriate liquidity risk management framework for the management of the Group’s short, medium and long-
term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate
reserves, bank borrowings and other sources of financing, by continuously monitoring forecast and actual cash
flows and matching the maturity profiles of financial assets and liabilities.
The table below details the remaining contractual maturities for the Group for non-derivative financial liabilities. The
table has been prepared on the basis of undiscounted cash flows of financial liabilities based on the earliest date
on which the Group may be required to settle the liabilities.
Weighted
average
interest
method
Past due
Up to 1
month
1 to 3
months
3 months to
1 year
1 to 5 years
Over 5
years
Total
2021
Interest-free
-
15,118,532
357,517
-
-
-
15,476,049
Lease liabilities
-
2,093,707
4,501,340
25,205,742
81,168,531
96,927,806
209,897,126
Fixed interest rate
2.7%
1,018,649
2,005,306
21,986,601
79,260,819
53,126,358
157,397,733
Variable interest rate
2.1%
-
-
524,557
9,163,335
46,760,857
56,146,204
112,594,953
Total
-
18,230,888
7,388,720
56,355,678
207,190,207
206,200,368
495,365,861
2022
Interest-free
-
10,445,920
538,819
-
-
-
10,984,739
Lease liabilities
-
2,058,356
1,579,303
14,397,354
144,455,498
270,019,566
432,510,077
Fixed interest rate
2.7%
810,144
1,593,417
20,493,421
67,979,762
41,815,569
132,692,313
Variable interest rate
2.1%
-
17,043
3,520,078
16,460,880
46,006,141
45,098,731
111,102,873
Total
-
13,331,463
7,231,617
51,351,655
258,441,401
356,933,866
687,290,002
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
36
5. SEGMENT INFORMATION
Operating segments are reported in accordance with the internal reporting procedure to the Group’s Management
Board, the chief operating decision-maker, which is responsible for allocating resources to the reportable segments
and assessing its performance.
Management defined Hotels & Apartments, Campsites and operating units Inter café bar, Rokan, Katarina
swimming pools and Kačjak beach as its reportable segments.
The segment information for the reportable segments for the year ended 31 December 2022 is as follows:
The result by segment represents the profit of each segment before the distribution of other operating income, other
operating expenses, finance income, finance costs and income tax. This result represents a benchmark that is
submitted to the Group's Management Board for the purpose of making a decision on allocating resources to that
segment and evaluating its performance.
Income by segment
Expenses by segment
Result by segment
Operating segment
HRK
HRK
HRK
Hotels & Apartments
215,517,518
(171,851,539)
43,665,978
Campsites
22,807,318
(13,656,586)
9,150,732
Other
7,532,562
(6,665,956)
866,606
Total reportable segments
245,857,398
(192,174,081)
53,683,317
Income by segment
Expenses by segment
Result by segment
Operating segment
HRK
HRK
HRK
Hotels & Apartments
123,049,446
(117,013,891)
6,035,556
Campsites
18,084,574
(10,519,779)
7,564,795
Other
6,530,094
(6,413,774)
116,319
Total reportable segments
147,664,114
(133,947,443)
13,716,670
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
37
5. SEGMENT INFORMATION (continued)
A reconciliation of the result of reportable segments and net loss for the current period is provided as follows:
The Group does not monitor assets and liabilities by segments and therefore, this information has not been
disclosed. The Group does not monitor income and expenses or assets and liabilities of the subsidiary Stolist d.o.o.
by segments.
The hotels, apartments and campsites (operating assets) are located in the Republic of Croatia.
31 December 2021
31 December 2022
Item
HRK
HRK
Result by reportable segment
13,716,670
53,683,317
Unallocated operating income
5,335,387
3,793,656
Unallocated finance income
3,296,617
1,866,245
Unallocated operating costs:
(21,668,532)
(44,215,144)
Cost of goods sold
-
2,251
Cost of raw materials and supplies
(339,993)
(677,673)
Cost of services
(-4,551,313)
(6,828,537)
Staff costs
(13,792,588)
(16,390,736)
Depreciation and amortisation
(1,498,728)
(1,904,678)
Impairment
493,743
(16,435,297)
Other operating expenses
(1,979,653)
(1,980,474)
Unallocated finance costs
(12,934,744)
(17,305,585)
Profit from discontinued operations
5,453,500
1,397,267
Income tax
-
-
Loss for the year
(6,802,101)
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
38
The Group provides its hotel/hospitality services and sales activities in Croatia to domestic and foreign customers.
/i/ Other includes revenues from the sale of trade goods, alcoholic and non-alcoholic drinks, food and beverages,
parking services, wellness and other similar services, where it is not possible to determine whether revenue was
earned from the sale to foreign or domestic customers.
/i/ Net gains from the termination of the lease contract refer to the termination of the contract for the Garden Palace
Resort Umag, which was initially signed for ten years, for a period from 1 April 2020 to 31 March 2030. With the
2021
2022
Accommodation
93,704,092
158,144,319
Food and beverages
42,546,222
65,344,695
Other hotel services
2,479,450
3,533,442
Trade goods
433,004
567,027
TOTAL
139,162,768
2021
2022
Sales - domestic customers
35,309,842
47,186,294
Sales - foreign customers
89,946,425
159,831,188
Other /i/
13,906,501
20,572,001
Total
139,162,768
2021
2022
Net gains on termination of lease contract /i/
-
10,668,601
Covid-19-related grants
4,401,761
-
Rental income
4,074,742
4,657,623
Disposal of non-current assets
291,451
66,383
Income from marketing and other services
1,112,146
583,413
Collection of amounts due as per judgement and out-of-court
settlement
12,502
7,292
Recharged costs of lessees
630,068
987,594
Direct aid
361,761
487,252
Insurance reimbursements
610
834,227
Other operating income
2,950,692
3,769,186
TOTAL
13,835,733
22,061,571
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
39
2021
2022
Groceries consumed
11,015,595
21,810,118
Electricity
5,560,128
10,584,326
Water used
2,517,640
3,287,260
Consumables and cleaning supplies
1,717,566
3,580,946
Heating oil and gas
1,247,056
2,226,656
Alcoholic and soft drinks consumed
1,054,147
1,662,545
Write-off of small inventory
695,774
1,668,660
Fuel for passenger and freight vehicles
399,503
557,965
Overheads - leased properties
300,641
-
Packaging
130,758
97,069
Office supplies
79,102
112,008
Other costs
205,423
332,283
TOTAL
24,923,333
45,919,836
2021
2022
Commissions and banking services
10,990,245
17,095,335
Contractor services
7,024,152
11,131,594
Utility services
2,807,022
2,896,764
Intellectual services
2,293,739
2,512,646
Investment and current maintenance
2,982,011
4,318,520
Student employment agency services
1,711,299
2,456,830
Gross temporary service contract cost
812,528
1,247,824
Advertising services
666,465
972,212
Telephone, Internet and mail
626,174
1,475,895
Rentals
563,895
973,487
Music and ZAMP fees
161,256
361,441
Transport services (road and maritime transport)
76,413
217,025
Other services
970,069
1,383,117
TOTAL
31,685,268
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
40
2021
2022
Net salaries
21,032,084
33,307,464
Contributions from salaries
5,707,706
8,866,630
Contributions on salaries
4,575,545
7,299,542
Taxes and surtaxes
2,122,285
3,559,890
Performance bonus and holiday pay
2,967,209
4,024,656
Accrual for unused vacation days
1,552,427
141,325
Children’s gifts, Christmas bonus, non-taxable voucher
1,003,596
1,164,170
Transportation to and from work
1,135,999
1,772,007
Meal
946,226
1,381,455
Unused hours off - redistribution
528,795
132,078
Termination benefits
121,133
127,940
Non-current provisions for termination benefits and jubilee
awards
63,332
-
Other
299,842
373,474
TOTAL
42,056,179
62,150,631
2021
2022
Key management
1,814,838
3,048,943
of which benefits in kind
146,601
153,798
Supervisory Board
672,723
664,889
TOTAL
2,487,561
Continuing
operations
Discontinued
operations
Total
Property, plant and equipment
25,846,069
2,419,739
28,265,808
Intangible assets
286,822
46,692
333,514
Investment property
86,750
722,990
809,740
Right-of-use assets
24,052,689
-
24,052,689
TOTAL
50,272,330
3,189,421
53,461,751
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
41
Continuing
operations
Discontinued
operations
Total
Property, plant and equipment
27,750,742
3,163,522
30,914,264
Intangible assets
637,220
46,901
684,121
Investment property
68,880
135,878
204,758
Right-of-use assets
32,168,945
-
32,168,945
TOTAL
60,625,787
3,346,301
63,972,088
2021
2022
Reversal of impairment of property, plant and equipment
(Note 17)
-
9,227,860
Impairment of right-of-use assets (Note 37)
-
(15,225,898)
Impairment of goodwill
-
(1,316,765)
TOTAL
-
(7,314,803)
2021
2022
Write off of trade receivables
-
(665)
Impairment of trade receivables
(179,921)
(120,110)
Impairment of trade receivables-IFRS 9
2,903,112
107,991
TOTAL
2,723,191
(12,784)
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
42
2021
2022
Utility charges and concessions
1,800,437
2,644,841
Charges to Hrvatske vode
1,306,947
1,367,427
Insurance premiums
929,029
1,310,712
Animation and entertainment
664,606
1,038,052
Entertainment
469,057
404,587
Net book amount of disposed assets
345,477
295,870
Taxes and contributions irrespective of business result
333,034
511,397
Employee accommodation
373,621
1,691,135
Subscriptions and memberships
360,600
498,712
Reimbursement to students in practice and scholarships
375,616
626,799
Aid to employees
276,444
546,428
Travel expenses, per diems, accommodation and field bonus
105,565
226,195
Disability benefits
61,200
67,500
Professional training of employees
32,164
132,078
Other operating expenses
1,746,291
1,654,855
TOTAL
9,180,088
2021
2022
Finance income
Regular and penalty interest income
525,241
218,788
Foreign exchange gains
2,771,376
1,647,457
3,296,617
Finance costs
Regular and penalty interest expense
(5,503,599)
(5,954,580)
Foreign exchange losses
(2,098,488)
(2,226,377)
Interest expense on lease
(5,332,657)
(9,124,628)
(12,934,744)
(17,305,585)
NET FINANCE COSTS
(9,638,127)
(15,439,340)
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
43
The Group is liable for income tax under the laws and regulations of the Republic of Croatia. The tax base is
determined as the difference between income and expenses for the period plus and net of income and expenses
having a different tax treatment according to the tax regulations concerning the taxation of income. The income tax
rate was 18% in all presented periods.
The Tax Administration has not conducted any audits of the Company’s income tax returns in the past several
years. According to the relevant tax regulations, the Tax Administration may inspect Company’s books and records
at any time within three years of the end of the year in which the relevant tax liability is presented and may impose
additional tax liabilities and penalties. The Management Board is not aware of any circumstances that may give
rise to a potential material liability in this respect.
Deferred tax assets
Deferred tax assets were created as a temporary difference between the book value of assets and liabilities
determined for financial reporting purposes and the legally prescribed tax base.
As at 31 December 2022, a deferred tax asset in the amount of HRK 11,793 thousand was created based on tax
losses, available to be carried forward, as stated below:
2021
2022
Income tax on loss from continuing operations
-
-
Income tax on profit from discontinued operations
-
865,609
Income tax in statement of comprehensive income (tax credit)
-
2021
2022
Accounting loss before tax from continuing operations
(12,255,601)
(2,177,511)
Accounting profit before tax from discontinued operations
5,453,500
2,262,876
Accounting loss before tax
(6,802,101)
85,365
Income tax calculated at the rate of 18%
(1,224,378)
15,366
Effects of expenses not recognised for tax purposes
1,177,918
1,364,268
Effects of income not recognised for tax purposes
(46,460)
(514,025)
Income tax
-
Year incurred
Amount
Year of expiry
2018
(3,449,889)
2023
2019
(920,085)
2024
2020
(36,754,195)
2025
2021
(24,394,700)
2026
Total
(65,518,869)
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
44
16. INCOME TAX AND DEFERRED TAX ASSETS (continued)
Additionally, based on deductible temporary tax differences related to depreciation of property, plant and
equipment, a deferred tax assets in the amount of HRK 7,112 thousand was created.
On the same basis, the Group has HRK 9,197 thousand available temporary tax differences for which no deferred
tax assets have been recognized.
2021.
2022.
Deferred tax assets recoverable within one year
-
9,879,878
Deferred tax assets recoverable within a period longer than one year
-
9,025,606
Deferred tax assets
-
18,905,484
2021.
2022.
Weighted average number of ordinary shares used to
calculate basic/diluted earnings per share
27.971.463
27.971.463
Loss from continuing operations
(12.255.601)
(2.177.511)
Basic and diluted loss per share from continuing
operations attributable to shareholders of the Group
(0,44)
(0,08)
Profit from discontinued operations
5.453.500
1.397.267
Basic and diluted loss per share from discontinued
operations
0,19
0,05
Loss attributable to shareholders of the Group
(6,802,101)
(780,244)
Basic and diluted loss per share with discontinued
operations
(0.24)
(0.08)
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
45
Additions to tangible assets in 2022: buildings in the amount of HRK 8,309,206 relate to investments in hotel
facilities (upgrading the classification of hotels, developing campsites and other construction works), equipment in
the amount of HRK 12,317,430 relates to the purchase of equipment necessary for operations in hotels and
campsites, the additions to tangible assets under construction in the amount of HRK 11,327,663 relate to
investments in hotel facilities and campsite development, which were not put into use during 2022. The disposals
in land in the amount of HRK 1,924,853 relate to the divestment in 2022 (of which the amount of HRK 324,878
relates to own property, and the amount of HRK 1,599,975 relates to investment property).
Item description
Land
Buildings
Plant and
equipment
Other
assets
Tangible
assets under
construction
Total
COST
At 1 January 2021
447,692,725
764,824,848
148,546,967
1,369,597
2,666,455
1,365,100,592
Additions
-
10,291,295
25,773,100
518,488
4,298,357
40,881,240
Transfer from investment property
-
7,252,171
-
-
-
7,252,171
Disposals
(36,733,282)
(3,560,369)
(4,007,032)
-
-
(44,300,683)
Transfer to investment property
-
(483,649)
-
-
-
(483,649)
At 31 December 2021
410,959,443
778,324,296
170,313,035
1,888,085
6,964,812
1,368,449,671
Reclassification to assets held for
sale (Note 38)
(142,090,961)
(39,158,879)
(18,862,241)
(183,882)
(1,299,359)
(201,595,322)
Additions
-
8,309,206
12,317,430
282,170
11,327,663
32,236,469
Disposals
(324,878)
-
(1,463,770)
-
-
(1,788,648)
Transfer to investment property
(1,599,975)
-
-
-
-
(1,599,975)
At 31 December 2022
266,943,629
747,474,623
162,304,454
1,986,373
16,993,116
1,195,702,195
ACCUMULATED DEPRECIATION
At 1 January 2021
27,988,579
500,677,353
49,341,106
418,390
-
578,425,428
Depreciation charge
-
9,569,894
18,534,197
161,717
-
28,265,808
Transfer from investment property
-
6,613,602
-
-
-
6,613,602
Disposals
-
(2,806,242)
(2,617,039)
-
-
(5,423,281)
Transfer to investment property
-
(264,779)
-
-
-
(264,779)
At 31 December 2021
27,988,579
513,789,828
65,258,264
580,107
-
607,616,778
Reclassification to assets held for
sale (Note 38)
-
(17,624,674)
(10,680,516)
(55,166)
-
(28,360,356)
Depreciation charge
-
10,312,590
20,391,369
210,305
-
30,914,264
Disposals
-
-
(948,919)
-
-
(948,919)
Impairment reversal
(2,461,406)
(6,766,454)
-
-
-
(9,227,860)
At 31 December 2022
25,527,173
499,711,290
74,020,198
735,246
-
599,993,907
NET BOOK AMOUNT
At 31 December 2021
382,970,864
264,534,468
105,054,771
1,307,978
6,964,812
760,832,893
At 31 December 2022
241,416,456
247,763,333
88,284,256
1,251,127
16,993,116
595,708,288
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
46
18. PROPERTY, PLANT AND EQUIPMENT (continued)
Additions to tangible assets in 2021: buildings in the amount of HRK 10,955,805 relate to investments in hotel
facilities (upgrading the classification of hotels, developing campsites and other construction works) (2020: HRK
58,786,083), equipment in the amount of HRK 25,773,100 relates to the purchase of equipment necessary for
operations in hotels and campsites (2020: HRK 39,684,049), other assets in the amount of HRK 518,488 (2020:
HRK 326,171) and the additions to tangible assets under construction in the amount of HRK 4,298,357 relate to
investments in hotel facilities and campsite development, which were not put into use during 2021 (2020: disposals
of HRK 33,188,961).
As at 31 December 2022, the carrying amount of mortgaged properties (hotels Omorika, hotel Ad Turres,
Esplanade, Katarina, International, Slaven resort, pavilions, swimming pool and central restaurant within the Ad
Turres, Kačjak and Kaštel resorts) amounts to a total of HRK 281,877,908 (31 December 2021: HRK 298,653,837).
The total value of tangible assets that are fully depreciated, and which are still in use as at 31 December 2022
amounts to HRK 107,677,364 (31 December 2021: HRK 106,434,619).
Proceeds from sale of property, plant and equipment in 2022 amounted to HRK 87,801 (in 2021 were 1,757,720
without discontinued operations). Proceeds from sale of property, plant and equipment in 2021 amounted to HRK
27,943,446 and the unsettled amount of HRK 12,191,132 is stated within trade receivables at the balance sheet
date.
Item description
Licences, software and other rights
Total
COST
At 1 January 2021
4,633,534
4,633,534
Additions
1,556,211
1,556,211
Disposals
(1,877,979)
(1,877,979)
At 31 December 2021
4,311,766
4,311,766
Reclassification to assets held for sale (note 38)
(800,465)
(800,465)
Additions
816,968
816,968
Disposals
(135,593)
(135,593)
At 31 December 2022
4,192,676
4,192,676
ACCUMULATED AMORTISATION
At 1 January 2021
3,890,336
3,890,336
Amortisation charge
333,514
333,514
Disposals
(1,877,660)
(1,877,660)
At 31 December 2021
2,346,190
2,346,190
Reclassification to assets held for sale (note 38)
(784,064)
(784,064)
Amortisation charge
684,121
684,121
Disposals
(78,143)
(78,143)
At 31 December 2022
2,168,104
2,168,104
NET BOOK AMOUNT
At 31 December 2021
1,965,576
1,965,576
At 31 December 2022
2,024,572
2,024,572
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
47
Investment property relates to land and buildings that are leased or held for future realisation through renting or
selling.
The fair value of investment property based on an external appraisal by independent appraisers or an internal
appraisal amounts to HRK 31,805 thousand.
Estimates of the fair value of investment property are categorised as Level 3 in the fair value hierarchy.
Item description
Land and buildings
Total
COST
At 1 January 2021
51,049,733
51,049,733
Transfer from property, plant and equipment
483,649
483,649
Additions
664,510
664,510
Disposals
(6,044,043)
(6,044,043)
Transfer to property, plant and equipment
(7,252,171)
(7,252,171)
At 31 December 2021
38,901,678
38,901,678
Reclassification to assets held for sale (note 38)
(6,793,873)
(6,793,873)
Transfer from property, plant and equipment
1,599,975
1,599,975
At 31 December 2022
33,707,780
33,707,780
ACCUMULATED DEPRECIATION
At 1 January 2021
18,225,627
18,225,627
Depreciation charge
809.740
809.740
Transfer from property, plant and equipment
264.779
264.779
Disposals
(4.758.104)
(4.758.104)
Transfer to property, plant and equipment
(6,613,602)
(6,613,602)
At 31 December 2021
7,928,440
7,928,440
Reclassification to assets held for sale (note 38)
(6,230,371)
(6,230,371)
Depreciation charge
204,758
204,758
At 31 December 2022
1,902,827
1,902,827
NET BOOK AMOUNT
At 31 December 2021
30,973,238
30,973,238
At 31 December 2022
31,804,953
31,804,953
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
48
31 December 2021
31 December 2022
Hoteli Novi d.d. in bankruptcy
4,384,800
4,384,800
Impairment of shares
(4,384,800)
(4,384,800)
Loan repayment agreement - Municipality of Podgora
1,353,918
-
Loans granted
1,495,015
-
Loans granted - impairment
(1,495,015)
-
TOTAL
1,353,918
-
31 December 2021
31 December 2022
Cost - low value items, tyres in use
13,037,420
9,771,564
Raw materials and supplies on stock
803,257
852,520
Packaging
57,292
34,794
Trade goods
35,247
20,560
Impairment of small inventory and tyres
(13,037,420)
(9,771,564)
TOTAL
895,796
31 December 2021
31 December 2022
Domestic trade receivables
20,507,747
2,997,172
Foreign trade receivables /i/
1,513,451
586,657
Domestic trade receivables - impairment
(3,600,582)
(3,132)
Impairment of trade receivables - individual
adjustments
(888,602)
(741,913)
Impairment of receivables - IFRS 9
(1,173,849)
(678,162)
TOTAL
16,358,165
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
49
Based on the above calculation, the closing loss allowance for trade receivables is reconciled with the opening loss
allowance as follows:
31 December 2022
Not past due
Past due up
to 30 days
Past due from
31–90 days
Past due from
91–180 days
Past due from
181–270 days
Past due
beyond 270
days
TOTAL
Expected loss rate
2.82%
10.79%
30.98%
57.74%
53.57%
100.00%
39.71%
Gross book amount
- trade receivables
971,190
796,295
385,494
306,670
238,522
885,658
3,583,829
Loss allowance
(27,353)
(85,928)
(119,415)
(177,080)
(127,773)
(885,658)
(1,423,207)
Trade receivables
– net of
impairment
943,837
710,367
266,079
129,590
110,749
-
2,160,622
31 December 2021
Not past due
Past due up
to 30 days
Past due from
31–90 days
Past due from
91–180 days
Past due from
181–270 days
Past due
beyond 270
days
TOTAL
Expected loss rate
4.27%
21.31%
31.16%
67.12%
1.76%
98.86%
26.02%
Gross book amount
- trade receivables
2,399,794
287,829
1,497,456
770,930
12,724,043
4,341,146
22,021,198
Loss allowance
(102,381)
(61,327)
(466,570)
(517,469)
(224,507)
(4,290,779)
(5,663,033)
Trade receivables
– net of
impairment
2,297,413
226,502
1,030,886
253,461
12,499,536
50,366
16,358,165
2021
2022
Loss allowance as at 1 January
(6,145,233)
(5,663,033)
Increase in bad debt allowance recognised in profit or loss
over the period
(515,069)
(38,979)
Write-off of previously impaired receivables
318,758
175,672
IFRS 9 effects
529,446
423,905
Transfer of movements in provisions for losses for trade
receivables related to discontinued operations to assets held
for sale
-
3,600,582
Other movements
149,065
78,646
At 31 December
(5,663,033)
(1,423,207)
31 December 2021
31 December 2022
Grants receivable
74,723
13,594
Prepaid VAT receivable
2,849,930
3,026,810
Other receivables from the government
1,246,032
323,658
TOTAL
4,170,685
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
50
/i/ Receivables arising from advances given relate to advances for insurance premium paid in the amount of HRK
692,427, the amount of HRK 445,584 paid to HEP and other advances given to suppliers.
/i/ The carrying amount of cash at banks in foreign currency was translated from EUR.
The Company mainly deposits its cash at local banks that are members of banking groups with the following credit
ratings by Standard & Poor's:
31 December 2021
31 December 2022
Receivables for advances given /i/
1,021,963
3,535,793
Recognised leasehold improvements
87,450
42,769
Banking charges for loans
281,312
221,223
Suspense accounts for services accounted for
674,535
837,546
Other receivables
134,094
148,639
TOTAL
2,199,354
31 December 2021
31 December 2022
Bank balances - domestic currency
6,499,282
2,097,370
Bank balances - foreign currency /i/
16,751,772
3,976,015
Cash on hand
5,119
-
TOTAL
23,256,173
31 December 2020
31 December 2021
A
12,151,076
3,343,113
BBB
11,062,953
2,654,241
No credit rating
37,025
76,031
TOTAL
23,251,054
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
51
The parent Company's share capital amounts to HRK 482,507,730 and is divided among 27,971,463 ordinary
shares without a nominal value with the ticker symbol JDRN-R-B. The Company's ID No. (OIB) is 56994999963,
while its Reg. No. (MBS) is 040000817. The share capital represents the Company’s own sources of assets for its
operating purposes.
Capital reserves as of 31 December 2022 as well as of 31 December 2021 amount to HRK 234,210,922 and are
not available for distribution to the shareholders.
Individual major shareholders are PBZ CO OMF – CATEGORY B which holds 58.30% of shares and ERSTE PLAVI
OMF CATEGORY B which holds 30.56% of the Company’s shares.
Table 1: Structure of shareholders as at 31 December 2022 and 31 December 2021
31 December 2022
31 December 2021
Investor
Balance
%
Balance
%
Erste & Eteiermarkische bank d.d./PBZ CO OMF -
category B (1/1) - custodial account
16.307.401
58,30
16.250.954
58,10
OTP banka d.d. /Erste Plavi OMF category b - custodial
account
8.547.346
30,56
8.547.346
30,56
Restructuring and Sale Center - CERP (0/1) Republic of
Croatia (1/1) zs
673.666
2,41
673.666
2,41
Hrvatske vode, Water Management Corporation (1/1)
208.292
0,74
208.292
0,74
Town of Crikvenica (1/1)
184.056
0,66
184.056
0,66
OTP banka d.d./Erste Plavi Expert - voluntary pension
fund (1/1) - custodial account
174.249
0,62
174.249
0,62
Other shareholders
1.876.453
6,71
1.932.900
6,91
TOTAL
27,971,463
100.00
27,971,463
31 December 2021
31 December 2022
Provisions for termination benefits
237,980
221,969
Provisions for jubilee awards
287,367
208,476
Provisions for legal disputes
181,000
181,000
TOTAL
706,347
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
52
28. PROVISIONS (continued)
Movements in provisions over the years are as follows:
Legal
disputes
Termination
benefits
Jubilee
awards
Total
At 31 December 2020
-
174,648
309,353
484,001
Additional provisions based on estimate
181,000
63,332
-
244,332
Release of provisions
-
-
(21,986)
(21,986)
At 31 December 2021
181,000
237,980
287,367
706,347
Release of provisions
-
(16,011)
(78,891)
(94,902)
At 31 December 2021
181,000
221,969
208,476
31 December 2021
31 December 2022
Interest in currency
859,068
982,792
Long-term loans-HBOR - DT-6/15 /i/
1,071,140
-
Long-term loans-HBOR - DT-1/16 /ii/
12,294,129
10,210,042
Long-term loans-HBOR - DT-10/16 /iii/
7,163,900
5,949,485
Long-term loans-PBZ - 2016 -5110217867-5110217867 /iv/
36,803,344
27,666,128
Long-term loans-PBZ - 2019 -5110228722-5110228722 /v/
85,572,377
78,369,003
Long-term loans-ERSTE-2019-5117407680/15 /vi/
101,038,336
93,675,873
Short-term loans-ERSTE - 2022 - 5002285447 /vii/
-
6,027,600
Other liabilities to financial institutions
1,747
-
TOTAL LIABILITIES
244,804,041
222,880,923
Other liabilities to financial institutions
(1,747)
-
Current maturities of long-term loans in the current year
(28,859,295)
(30,674,847)
Short-term loans-ERSTE - 2022 - 5002285447 /vii/
-
(6,027,600)
Interest in currency
(859,069)
(982,792)
CURRENT LIABILITIES
(29,720,111)
(37,685,239)
NON-CURRENT LIABILITIES
215,083,930
31 December 2021
31 December 2022
EUR
243,943,226
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
53
29. LIABILITIES TO BANKS AND OTHER FINANCIAL INSTITUTIONS (continued)
/i/ In 2015, the Group entered into a long-term loan agreement with the Croatian Bank for Reconstruction
and Development for a loan of HRK 7 million, repayable over 5 years, with a 1-year grace period and 3%
interest rate, for the renovation of facilities and upgrading the classification of Hotel Omorika and Selce
Autocamp. The loan matures in 2022 due to a moratorium granted during the Covid – 19 pandemic.
/ii/ In 2016, the Group entered into a long-term loan agreement with the Croatian Bank for Reconstruction
and Development for a loan of HRK 17,400,000, repayable over 8 years, with a 1-year and 10 months
grace period and 3% interest rate, for the renovation of facilities and upgrading the classification of Hotel
Omorika and Hotel Varaždin (Katarina).
/iii/ In 2016, the Group entered into a long-term loan agreement with the Croatian Bank for Reconstruction
and Development for a loan of HRK 10 million, repayable over 8 years, with a 1-year and 3 months grace
period and 3% interest rate, for the renovation of facilities and upgrading the classification of Hotel
Varaždin (Katarina).
/iv/ In 2016, the Group entered into a long-term loan agreement with Privredna banka Zagreb d.d. for a loan
of EUR 7,400,000, repayable over 6 years, with a 1-year and 6 months grace period and 2.6% interest
rate, for the renovation of facilities and upgrading the classification of Hotel Varaždin (Katarina) and Hotel
Esplanade and to purchase the receivables from Veneto banka d.d. This Agreement was entered into in
December of 2016. The amount of EUR 7,343,852 was drawn under the loan, and the loan
commencement date was 20 July 2019.
/v/ In 2019, the Group entered into a long-term loan agreement with Privredna banka Zagreb d.d. for a loan
of EUR 12,250,000, repayable over 12 years, with a 2.05% interest rate, for the renovation of facilities and
upgrading the classification of the Ad Turres resort, Selce Campsite - swimming pool and allotment, Hotel
Katarina, Hotel Omorika, Kačjak resort, Slaven pavilions and Hotel Esplanade
/vi/ In 2019, the Group entered into a long-term loan agreement with Erste&Steiermärkische Bank d.d. for a
loan of EUR 13,441,000.00, repayable over 10 years, with a 2.1% interest rate, to be used for investments
- purchasing and other costs of acquiring Club Adriatic d.o.o. Zagreb.
/vii/ In 2022, the Company entered into a short-term loan agreement with Erste&Steiermärkische Bank d.d. for
a loan of EUR 800,000, repayable until September 30, 2023, with a 1.2% + 3M Euribor interest rate, to be
used for current liquidity financing
/i/ The liabilities under the Bankruptcy Plan of HRK 61,720 relate to liabilities to secured creditors of the 2nd rank =
HRK 31,224 and liabilities intended to be included in the share capital of HRK 30,496. The Bankruptcy Plan does
31 December 2021
31 December 2022
Bankruptcy Plan /i/
61,720
61,720
TOTAL
61,720
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
54
31 December 2021
31 December 2022
Domestic trade payables
15,397,421
10,475,288
Foreign trade payables
78,628
130,006
TOTAL
15,476,049
31 December 2021
31 December 2022
Advances received
3,474,266
2,128,154
Security and other deposits
552,143
533,619
TOTAL
4,026,409
2,661,773
31 December 2021
31 December 2022
Net salaries payable
1,913,269
2,080,053
Unused vacation days
1,803,294
1,637,223
Liabilities to employees - bonuses
2,908,982
2,000,000
Liabilities to employees - redistribution of working hours
683,874
719,504
Other liabilities to employees
358,650
123,197
TOTAL
7,668,069
31 December 2021
31 December 2022
Contributions from and on salaries
1,052,839
1,151,008
Taxes and surtaxes payable
207,590
237,228
Other liabilities to the government
527,460
403,680
TOTAL
1,787,889
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
55
/i/ The capital grants remitted by the Energy Efficiency and Environmental Protection Fund relates to the
reconstruction of the heating system at Hotel Katarina in 2016 and is prorated to revenue on an annual basis.
31 December 2021
31 December 2022
Accrual of received capital grants /i/
737,911
675,824
Scholarships
23,024
41,132
Fees based on temporary service agreements
80,296
32,045
Other liabilities - unpaid to bankruptcy creditors
6,696
6,695
TOTAL
847,927
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
56
The interest expense on lease liabilities is included in Finance costs - Interest expense on lease (Note 15).
The method of recognition and measurement is set out in Note 2.20.
LEASE LIABILITIES
/i/ It refers to the initial recognition of the lease contracts for Grand Hotel View in June 2022 and Stypia in December
2022.
/ii/ It refers to the termination of the contract for the Garden Palace Resort Umag, which was initially signed for ten
years, for a period from 1 April 2020 to 31 March 2030. With the contract on the termination of the lease contract,
the lease was terminated on 30 September 2022.
As stated in Note 2.20, the Group uses the exemption expedient for short-term leases and low-value leases. In
2022, short-term leases and low-value leases amounted to HRK 973,487 (Note 9).
31 December 2020
31 December 2021
Non-current lease liabilities
171,617,694
156,689,888
Current lease liabilities
17,822,844
26,948,424
TOTAL
189,440,538
Vehicles
Real estate
Beach
concession
Total
Net book amount at 1 January 2021
506,247
161,644,873
767,889
162,919,009
Initial recognition as per new contracts
54,390
6,999,000
-
7,053,390
Modifications to existing contracts
1,112,795
5,740,839
-
6,853,634
Depreciation charge for the year
(763,810)
(23,172,815)
(116,064)
(24,052,689)
Disposals
(54,638)
-
-
(54,638)
Net book amount at 31 December 2021
854,984
151,211,897
651,825
152,718,706
Net book amount at 1 January 2021
854,984
151,211,897
651,825
152,718,706
Initial recognition as per new contracts /i/
991,105
249,098,181
-
250,089,286
Depreciation charge for the year
(865,888)
(31,186,993)
(116,064)
(32,168,945)
Termination of lease contract /ii/
(158,215)
(57,051,006)
-
(57,209,221)
Impairment
-
(15,225,898)
-
(15,225,898)
Net book amount at 31 December 2022
821,986
296,846,181
535,761
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
57
38. DISCONTINUED OPERATIONS
On February 6, 2023, Jadran d.d. has successfully fulfilled all the prerequisites established by the concluded
agreements on the purchase of business shares in the company Adria coast turizam d.o.o., which provided for the
acquisition of 100% of the shares in that company by Jadran d.d., as well as the agreement on the sale of business
shares in the company Club Adriatic d.o.o., by which Jadran sold and transferred 100% of the shares in that
company to Adria Grupa Baško Polje d.o.o.
With the agreement on the transfer of business shares in the company Club Adriatic d.o.o., dated February 6, by
which Jadran transferred 100% of the shares in that company to Adria Grupa Baško Polje d.o.o. the conditions
have been met for this business segment to be classified as discontinued operations on December 31, 2022. The
statement of comprehensive income for the year 2021 has been altered to bring the financial statements in line with
IFRS 5 Non-current assets held for sale and discontinued operations.
Cash
Liabilities to
financial
institutions
and loans
Lease
liabilities
Total
Net debt at 31 December 2020
27,640,451
(264,034,598)
(189,440,538)
(425,834,685)
Cash flow
(4,384,278)
17,973,734
19,360,354
32,949,810
Increase arising from new lease
agreements and modifications
-
(13,907,024)
(13,907,024)
Interest expense
-
(5,506,426)
(5,332,657)
(10,839,083)
Interest paid
-
5,506,426
5,845,738
11,352,164
Foreign exchange differences and
other non-cash movements
-
1,256,823
(164,185)
1,092,638
Net debt at 31 December 2021
23,256,173
(244,804,041)
(183,638,312)
(405,186,180)
Cash flow
(17,182,778)
22,447,013
27,502,004
32,766,239
Increase arising from new lease
agreements and modifications
-
-
(250,089,286)
(250,089,286)
Termination of lease contract
-
-
67,877,822
67,877,822
Interest expense
-
(5,935,424)
(9,124,628)
(15,060,052)
Interest paid
-
5,811,700
9,124,628
14,936,328
Foreign exchange differences and
other non-cash movements
-
(400,171)
(1,150,001)
(1,550,172)
Net debt at 31 December 2022
6,073,395
(222,880,923)
(339,497,773)
(556,305,311)
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
58
38. DISCONTINUED OPERATIONS (continued)
The impact of discontinued operations and assets held for sale on the statement of comprehensive income,
statement of financial position and statement of cash flows is presented below.
Impact on the statement of comprehensive income:
Discontinued operations
2021*
2022
Revenue
16,704,271
24,302,474
Other income
5,598,629
707,520
Total operating income
22,302,900
25,009,994
Cost of goods sold
(8,534)
-
Cost of raw materials and supplies
(1,957,907)
(4,101,871)
Cost of services
(1,992,611)
(2,483,225)
Staff costs
(5,295,813)
(6,489,051)
Depreciation and amortisation
(3,189,421)
(3,346,301)
Losses on impairment of non-financial assets
(2,708,815)
(85,716)
Other operating expenses
(1,169,552)
(5,885,491)
Total operating expenses
(16,322,651)
(22,391,655)
Operating profit
5,980,249
2,618,339
Finance income
-
-
Finance costs
(526,749)
(355,463)
Net loss from financing activities
(526,749)
(355,463)
Profit before tax
5,453,500
2,262,876
Income tax
-
(865,609)
Discontinued operations
5,453,500
1,397,267
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
59
38. DISCONTINUED OPERATIONS (continued)
31 December 2022
ASSETS
Non-current assets
Property, plant and equipment (note 18)
173,234,966
Intangible assets (note 19)
16,401
Investment property (note 20)
563,502
Financial assets
892,702
Other non-current assets
9,530
Total non-current assets
174,717,101
Current assets
Inventories
107,705
Trade receivables
55,118
Receivables from the government
156,231
Income tax receivable
1,630,391
Other receivables
222,417
Cash and cash equivalents
7,094,828
Total current assets
9,266,690
TOTAL ASSETS HELD FOR SALE
183,983,791
31 December 2022
Liabilities
Trade payables
336,263
Liabilities for advances, deposits and guarantees
100,899
Liabilities to employees
419,710
Liabilities to the government
162,847
Other current liabilities
5,200
Deferred tax liability
18,905,484
Total liabilities
19,930,403
TOTAL LIABITILIES FROM ASSETS HELD FOR SALE
19,930,403
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
60
38. DISCONTINUED OPERATIONS (continued)
39. EVENTS AFTER THE BALANCE SHEET DATE
On the basis of the concluded Agreement on the Termination of the Agreement on Assignment of Contracts from
January 1, 2023, the company Club Adriatic d.o.o. ceased to be a lessee of the Noemia Hotel in Baška Voda, and
Jadran d.d. became the lessee of the Noemia Hotel.
After Jadran d.d. has successfully fulfilled all the prerequisites established by the concluded agreements on the
purchase of business shares in the company Adria coast turizam d.o.o., which foresees the acquisition of 100% of
the shares in that company by Jadran d.d., as well as the agreement on the sale of business shares in the Club
Adriatic d.o.o., by which Jadran sells and transfers 100% of the shares in that company to Adria Grupa Baško Polje
d.o.o., on February 6, 2023, the following contracts were concluded:
• agreement on the transfer of business shares in the company Adria coast turizam d.o.o., by which Jadran
d.d. acquired 100% of the shares in that company;
• agreement on the transfer of business shares in the company Club Adriatic d.o.o., by which Jadran
transferred 100% of the shares in that company to Adria Grupa Baško Polje d.o.o.
In accordance with the above, as of February 6, 2023, Mr. Miroslav Pelko, as a former member of the board of Club
Adriatic d.o.o. resigned from the position and was simultaneously appointed to the position of board member of
Adria coast turizam d.o.o..
Upon implementation of these activities, the requirements of the Decision of the General Assembly of the Company
from August 31, 2022 were met.
On March 14, 2023, the Company concluded an Asset management contract with Club Adriatic d.o.o., based on
2021*
2022
A. Net cash from operating activities
34,447,175
12,846,971
B. Net cash from investing activities
(12,999,313)
(2,860,009)
C. Net cash from financing activities
(14,900,000)
(10,400,000)
Net increase / (decrease) in cash
6,547,862
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
61
39. EVENTS AFTER THE BALANCE SHEET DATE (continued)
Acquisition of Adria Coast Turizam d.o.o.
On February 6, 2023, the Group acquired 100% ownership of Adria Coast Turizam d.o.o. for the agreed amount of
EUR 23,164 thousand, which includes EUR 22,000 thousand worth of 100% ownership in Club Adriatic d.o.o.
(defined by the purchase agreement) adjusted for financial position items as of December 31, 2022, which Jadran
and Adria Group Baško Polje used for the purpose of concluding the transaction: short-term receivables in the
amount of EUR: 514 thousand, cash in the amount of EUR 941 thousand and short-term liabilities in the amount of
EUR 292 thousand.
The amounts were calculated using Jadran's accounting policies.
The acquired net asset value and preliminary gain on a bargain purchase are presented as follows:
As stated above, for the acquisition of shares in Adria Coast Turizam d.o.o. the shares of Club Adriatic d.o.o. were
transferred, with an adjustment for financial position items, and there was no outflow of cash, while the amount of
cash in the account of Adria coast turizam at the time of takeover is not significant. In the context of purchase price
allocation, the effects of the pre-existing relationship between Jadran d.d.. and Adria coast turizam d.o.o. are still
being considered.
2023
2023
EUR '000
HRK '000
Acquisition cost
23,164
174.529
Compensation defined by the Sales Contract and the Appendix I
for the acquisition of 100% shares in the company Club Adriatic d.o.o.
23,164
174.529
Fair value of acquired assets of Adria Coast Turizam d.o.o.
(23,830)
(179.547)
Preliminary gain on a bargain purchase
(666)
2023.
2023
EUR '000
HRK '000
Assets under construction
59
445
Real estates and land
47,141
355,184
Equipment
2,483
18,708
Inventory
521
3,925
Trade and other receivables
286
2,155
Cash
9
68
Deposits
150
1,130
Trade payables
(35)
(264)
Deferred tax liability
(2,621)
(19,748)
Loans
(24,163)
(182,056)
Net assets acquired
23,830
Notes to the consolidated financial statements
For the year ended 31 December 2022 (All amounts in HRK)
62
39. EVENTS AFTER THE BALANCE SHEET DATE (continued)
Euro introduction
On January 1, 2023. the euro becomes the official currency and legal means of payment in the Republic of Croatia.
The fixed conversion rate was set at HRK 7.53450 for one euro.
The introduction of the euro as the official currency in the Republic of Croatia represents a change in the functional
currency that will be calculated prospectively and does not represent an event after the balance sheet date that
requires the reconciliation of the amounts in these financial statements.
Consolidated Management Report
For the year ended 31 December 2022 (All amounts in HRK)
63
CONSOLIDATED MANAGEMENT REPORT
Consolidated Management Report
For the year ended 31 December 2022 (All amounts in HRK)
64
1. KEY OPERATING INFORMATION
Key operating indicators for the Group
Key financial indicators for the Group
1
EBITDA was normalised for one-time costs
2
EBIT was normalised for one-time costs
2021
2022
2022/2021
Number of accommodation units (capacity)
3,440
3,548
3.10%
Number of bed-places
8,380
8,575
2.30%
Full occupancy days
63
88
39.68%
Annual occupancy rate
17%
24%
38.90%
Number of accommodations units sold
217,191
305,821
40.80%
Number of overnights
559,391
805,701
44.00%
ADR (in HRK)
423
539
27.30%
RevPar (in HRK)
44,227
59,582
34.70%
2021
2022
2022/2021
TOTAL REVENUE
156,295,118
251,517,299
60.90%
SALES REVENUE
139,162,768
227,589,483
63.50%
OTHER OPERATING INCOME
13,835,733
22,061,571
59.50%
TOTAL COSTS
168,550,719
253,694,810
50.50%
OPERATING EXPENSES
155,615,975
236,389,225
51.90%
MATERIAL COSTS
56,830,569
93,268,632
64.10%
STAFF COSTS
42,056,179
62,150,631
47.80%
DEPRECIATION AND AMORTISATION
50,272,330
60,625,787
20.60%
IMPAIRMENT OF NON-CURRENT NON-FINANCIAL
ASSETS
-
7,314,803
n/a
VALUE ADJUSTMENTS
-2,723,191
12,784
-100.50%
OTHER COSTS
9,180,088
13,016,588
41.80%
FINANCE INCOME
3,296,617
1,866,245
-43.40%
FINANCE COSTS
12,934,744
17,305,585
33.80%
EBITDA
47,654,856
73,887,616
55.00%
EBITDA MARGIN
31%
30%
-5.00%
NORMALISED EBITDA
1
44,931,665
81,215,203
80.80%
NORMALISED EBITDA MARGIN
29%
33%
10.80%
EBIT
-2,617,474
13,261,829
-606.70%
NORMALISED EBIT
2
-5,340,665
20,589,416
-485.50%
PROFIT FROM DISCONTINUED OPERATIONS
5,453,500
1,397,267
-74.40%
LOSS BEFORE TAX
-6,802,101
-780,244
-88.50%
Consolidated Management Report
For the year ended 31 December 2022 (All amounts in HRK)
65
2. GENERAL GROUP INFORMATION
The JADRAN group consists of JADRAN d.d. and its subsidiaries:
• CLUB ADRIATIC d.o.o. in which JADRAN has 100% business shares.
• Stolist d.o.o. in which JADRAN has 100% business shares.
JADRAN, dioničko društvo za hotelijerstvo i turizam, from Crikvenica, Bana Jelačića 16, is registered at the
Commercial Court in Rijeka under registration number 040000817, Company ID no. 5699499963. In 2022, the
Company was governed by the Management Board and Supervisory Board.
In 2022, the Supervisory Board comprised the following members:
• from 1 January 2022 to 22 May 2022.
o Goran Hanžek, Chairman of the Supervisory Board
o Karlo Došen, Deputy Chairman of the Supervisory Board
o Mirko Herceg, Member of the Supervisory Board
o Dragan Magaš, Member of the Supervisory Board
o Adrian Čajić, Member of the Supervisory Board
• from 23 May 2022 to 7 July 2022.
o Goran Hanžek, Chairman of the Supervisory Board
o Karlo Došen, Deputy Chairman of the Supervisory Board
o Adrian Čajić, Member of the Supervisory Board
• from 8 July 2022 to 31 December 2022.
o Goran Hanžek, Chairman of the Supervisory Board
o Karlo Došen, Deputy Chairman of the Supervisory Board
o Mirko Herceg, Member of the Supervisory Board
o Sandra Janković, Member of the Supervisory Board
o Adrian Čajić, Member of the Supervisory Board
In 2022, the Management Board comprised the following members:
• from 1 January 2022 to 22 May 2022:
o Goran Fabris, Chairman of the Management Board
o Ivan Safundžić, Member of the Management Board
o Miroslav Pelko, Member of the Management Board
• from 23 May 2022 to 31 December 2022:
o Ivan Safundžić, Member of the Management Board
o Miroslav Pelko, Member of the Management Board .
The members of the Company’s Management Board are authorised to represent the Company together with
another member of the Management Board, based on the amendment to the provisions of the Articles of
Association adopted at the General Assembly as at 31 August 2020.
CLUB ADRIATIC d.o.o. za turizam i usluge, from Baška Voda, Petra Krešimira IV 11, is registered at the
Commercial Court in Zagreb under registration number 080391811, Company ID no. 44661735229, EUID:
HRSR.080391811.
Consolidated Management Report
For the year ended 31 December 2022 (All amounts in HRK)
66
2. GENERAL GROUP INFORMATION (continued)
The sole owner of the Company is JADRAN d.d. as of 19 December 2018, and on 12 February 2019 an entry was
made in the court register. The share capital amounts to HRK 120,947,400 thousand.
On 13 January 2004, the Company's share capital was increased from the amount of HRK 20,000 in cash, by the
amount of HRK 107,988,500 in kind, to the amount of HRK 108,008,500 in cash and in kind based on the Decision
amending the Company's Certificate of Incorporation
The Company's share capital was increased from the amount of HRK 108,008,500 in cash and in kind, by the
amount of HRK 12,938,900, to the amount of HRK 120,947,400, by entering the right of claim into the share capital
of the company based on the Decision of the General Assembly on the share capital increase by investing rights
dated 21 December 2012.
Based on the decision of the General Assembly of the company dated 16 December 2019, the share capital of the
company was reduced from the amount of HRK 120,947,400 by the amount of HRK 60,947,400 to the amount of
HRK 60,000,000 to cover the accumulated losses, by reducing the nominal amount of each business share. Based
on the decision of the General Assembly dated 16 December 2019, the share capital of the company was increased
from the amount of HRK 60,000,000 by the amount of HRK 57,104,500 to the amount of HRK 117,104,500, by
paying a new cash contribution, i.e. by creating a new business share with a nominal amount of HRK 57,104 .500
kuna taken over by a new company owner.
In 2022, the Company was governed by the Management Board and Supervisory Board.
The Supervisory Board comprised the following members:
• Dragan Magaš - Chairman of the Supervisory Board
• Darko Lendić - Deputy Chairman of the Supervisory Board
• Mirko Herceg - Member of the Supervisory Board
In 2022, the Company was governed by the Management Board comprising the following members:
• Goran Fabris – director until 9 May 2022,
• Miroslav Pelko – Member of the Management Board from 9 May 2022.
Stolist d.o.o. za usluge i trgovinu, a tourist agency from Crikvenica, Frankopanska 22, is registered at the
Commercial Court in Rijeka under registration number 040270363, Company ID no. 20400393476, EUID:
HRSR.040270363.
The sole owner of the Company is JADRAN d.d. as of 18 June 2020, and on 28 June 2019 an entry was made in
the court register. The share capital amounts to HRK 20,000 thousand.
In 2022, the company Stolist was managed by the Management Board:
• Sandra Marcel Tomašić – Member of the Management Board
The Group is mainly engaged in the provision of accommodation and catering services, whereof it generates most
of its revenue.
Consolidated Management Report
For the year ended 31 December 2022 (All amounts in HRK)
67
2. GENERAL GROUP INFORMATION (continued)
The Group performs its financial operations through giro accounts opened at:
• Privredna banka d.d. HR4323400091110722690
• Zagrebačka banka d.d. HR3923600001102150140
• Erste & Steiermärkische bank d.d. HR3924020061100620496
• Erste & Steiermarkische bank d.d. HR8624020061100094686
• Privredna banka d.d. Zagreb HR3623400091110076505
• Zagrebačka banka d.d. HR1023600001102807740
In 2022, the Group has
• used available resources as follows:
o material – existing property is protected by the due care of a prudent manager wherever possible,
o financial – all liabilities are settled,
o personnel – rational organisational approach.
• maintained and confirmed the current market position,
• the business process ran smoothly.
As at 31 December 2022, the Group’s share capital amounted to HRK 482,507,730.
The list of the Company’s shareholders with a 5% share or more in the share capital of JADRAN d.d. (balance at
31 December 2022) is as follows:
• Erste & Steiermarkische bank d.d../PBZ CO OMF - CATEGORY B holds 16,307,401 shares, representing
a 58.30% share in the Company’s share capital;
• OTP banka d.d./ERSTE PLAVI OMF K CATEGORY B holds 8,547,346 shares, representing a 30.56%
share in the Company’s share capital.
As at 31 December 2022, the ownership structure of CLUB ADRIATIC d.o.o. is as follows:
• JADRAN d.d. is the sole owner of CLUB ADRIATIC d.o.o.
As at 31 December 2022, the ownership structure of Stolist d.o.o. is as follows:
• JADRAN d.d. is the sole owner of Stolist d.o.o.
Major events for the Group in 2022 were as follows:
• On March 23, 2022, Jadran d.d. concluded a lease contract for the Grad Hotel View on the island of Brač,
with a capacity of 230 accommodation units for the period from June 1, 2022 to December 31, 2022.
During mentioned period the contracting parties needed to agree upon the terms of further business
cooperation.
• On June 29, 2022, based on the concluded lease contract, the company took possession of the Grad
Hotel View. After taking possession, an internal analysis regarding the potential possibility of purchasing
the building in question was conducted. At the same time, Jadran d.d. considered the possibility of selling
business shares in the company Club Adriatic d.o.o. considering the investments that are needed in the
facilities owned by the mentioned company in order to maintain the appropriate service standard and
considering dispersed locations of the facilities managed by Club Adriatic d.o.o. in relation to the region
of operation of Jadran d.d., Crikvenica. As the properties directly adjacent to the properties owned by
Club Adriatic d.o.o. were at that moment owned by a company which (in terms of the applicable legislation
of the Republic of Croatia) is partly connected to the then members of the company Adria coast turizam
d.o.o., which expressed an interest in acquiring the properties owned by the company Club Adriatic d.o.o.,
communication was initiated with the aim of potential transaction realization in the way it was ultimately
realized.
Valuations of properties owned by Adria coast turizam d.o.o. and Club Adriatic d.o.o. were made as part
of the preparatory activities for transaction realization.
Consolidated Management Report
For the year ended 31 December 2022 (All amounts in HRK)
68
2. GENERAL GROUP INFORMATION (continued)
After conducting a legal, financial and tax due diligence of the company Adria coast turizam d.o.o. no
significant inconsistencies or risks were identified, and the company's Management Board decided to
propose to the General Assembly of the company Jadran d.d., Crikvenica, to grant the prior approval for
the acquisition of shares in the company Adria coast turizam d.o.o. At the Extraordinary General Assembly
held, the Management Board of the company explained the submitted proposal, and none of the present
shareholders objected to the insufficiency of the materials, and no third party objected or requested
additional documentation.
After the assembly of Jadran d.d., Crikvenica gave its consent to the realization of the acquisition of
shares in the company Adria coast turizam d.o.o., the preparation of contractual documentation began,
both regarding the purchase of shares in the company Adria coast turizam d.o.o., as well as regarding to
the sale of shares in the company Club Adriatic d.o.o.
On September 30, 2022, the process of signing the contracts on the purchase and sale of business
shares began. The contracts were concluded under deferred conditions. In other words, the actual
realization of the transfer of shares in both companies should have occurred after the fulfilment of certain
(mutually agreed upon) conditions, the most important of which were the regulation of the financial
liabilities of Adria coast turizam d.o.o., and the removal of encumbrances from property owned by Club
Adriatic d.o.o. The expected date of fulfilment of the conditions in question was initially set at the end of
2022, however, as they had not been met by then, the deadline was extended to mid-February 2023.
After the aforementioned conditions were met, on February 6, 2023, the contracts on the transfer of
business shares in Club Adriatic d.o.o. and in the company Adria coast turizam d.o.o. were signed.
• On December 15, 2022, Jadran d.d. concluded a lease contract for the Heritage Hotel Stypia in
Crikvenica with a capacity of 57 beds.
Consolidated Management Report
For the year ended 31 December 2022 (All amounts in HRK)
69
3. REALISED OVERNIGHTS
Reservations in 2022 started quite late. The reasons were consequences of the pandemic and beginning of the
war in Ukraine. Based on the previous season business results experiences and the continued advantage of
independence from air traffic due to the geographical proximity of emitting markets, the Company achieved record
business results.
Campsites were recognized as a very interesting product in 2022, as they provide all the comfort and infrastructure
of hotel accommodation, but with additional privacy, proximity to nature and freedom of movement, which in
previous years proved to be a benefit due to specific epidemiological circumstances, and today it has become a
trend in choosing the preferred accommodation.
We believe that further planned investments in campsite infrastructure will significantly contribute to better results
in the future.
Chart 1 Number of overnights recorded in hotels and campsites from 2020 to 2022
Source: JADRAN d.d.
The continuation of the investment cycle, a new hotel and a new destination in the Jadran portfolio resulted in an
increase in overnight stays in 2022. In hotel accommodation, we record a growth of 42% compared to 2021, while
campsites at the Group level recorded a growth of even 41% compared to the year before.
The flexibility of cancellation policies, last-minute reservations, termination of lease agreement for facilities that
were open for the whole year, and the earlier closure due to a facility’s technical failure affected changes in
distribution by sales channels. The share of the group channel increased by 5% compared to 2021, while the
shares of the individual and online channels decreased proportionally by 2% compared to the year before.
547.697
385.216
188.891
246.312
174.175
82.411
0
100.000
200.000
300.000
400.000
500.000
600.000
2022 2021 2020
Jadran Group_overnights hotels & camps
Hoteli i turistička naselja
Consolidated Management Report
For the year ended 31 December 2022 (All amounts in HRK)
70
3. REALISED OVERNIGHTS (continued)
Chart 2: Overnights by the sales channels in 2021 and 2022 for hotel accommodation
Source: JADRAN d.d.
Chart 3: Overnights by the sales channels in 2021 and 2022 for campsites
Source: JADRAN d.d.
1%
0%
27%
6%
64%
1%
0%
25%
5%
68%
Overnights by the Company’s sales
channels for campsites
Allotment
Groups
Individuals
Online booking
Lump sums
2021
2022
Consolidated Management Report
For the year ended 31 December 2022 (All amounts in HRK)
71
3. REALISED OVERNIGHTS (continued)
Source: JADRAN d.d.
In 2022, the Company realized 75% of overnight stays from foreign guests, and 25% of overnight stays from
domestic guests in hotel facilities. In 2022, foreign guests came mostly from the emitting markets of Germany,
Austria, Slovenia, Hungary and the Czech Republic.
Source: JADRAN d.d.
The majority of guests in campsites arrive from Slovenia, followed by guests from Germany, Poland, Croatia and
the Czech Republic.
25%
14%
13%
9%
7%
7%
5%
4%
4%
2%
10%
Overnight stays by country, hotels 2022
CROATIA GERMANY AUSTRIA
SLOVENIA HUNGARY CZECH REPUBLIC
SLOVAKIA POLAND BOSNIA AND HERZEGOVINA
ITALY OTHER COUNUTRIES
22%
14%
12%
11%
11%
5%
4%
4%
4%
3%
10%
Overnight stays by country, campsites ,
2022
SLOVENIA GERMANY POLAND
CROATIA CZECH REPUBLIC AUSTRIA
BOSNIA AND HERZEGOVINA SLOVAKIA HUNGARY
NETHERLANDS OTHER COUNUTRIES
Consolidated Management Report
For the year ended 31 December 2022 (All amounts in HRK)
72
4. GROUP BUSINESS PERFORMANCE
After two very challenging years marked predominantly by the COVID-19 pandemic, as well as the war in Ukraine,
2022 was a year of recovery for the Group. Despite the major inflationary and energy crisis, the Company carried
out all necessary activities to optimize operations with the aim to minimize the negative impact of high input costs,
primarily food and beverage costs.
In the period from January to December 2022, the Groupd. generated total revenues of HRK 251,517,299 which
is 61% higher than the total revenues generated in 2021. Total expenses amounted to HRK of 253,694,810 which
was 51% more than the expenses incurred in 2021.
In 2022, the Group incurred a loss of HRK 780,244, which was 89% less than the expenses incurred in 2021.
EBITDA in 2022 amounts to HRK 73,887,601 and is 55% higher than EBITDA realized in 2021.
The Group achieved a total of HRK 251,517,299 in revenue in 2022, which is 61% more than the revenue
generated in 2021. Sales revenues amounted to HRK 227,589,483 and are 64% higher than those achieved in
2021, while other income amounted to HRK 22,061,571 or 59% more than those achieved in 2021.
Financial income amounted to HRK 1,866,245 and is 43% less than the income realized in 2021.
In 2022, the Group’s total expenses amounted to HRK 253,694,810, which is 51% higher than the expenses
incurred in the same period in 2021. Operating expenses amounted to HRK 236,389,225, which is 52% higher
than operating expenses in 2021.
Financial costs amounted to HRK 17,305,585 and are 34% higher than the costs realized in 2021. The biggest
increase in financial costs in 2022 compared to the previous year relates to interest on the new leased hotel, the
Grand Hotel View.
In 2022, Raw material and supplies costs amounted to HRK 46,225,942 and are 84% higher than those in 2021.
The costs of services amounted to HRK 47,042,690 and are 48% higher than those realized in 2021. Staff costs
amounted to HRK 62,150,631 and exceed the costs incurred in 2021 by 48%. In 2022, amortisation and
depreciation amounted to HRK 60,625,787 and is 21% higher than the amortisation and depreciation realised in
2021. It should be noted that the largest increase in depreciation in 2022 compared to 2021 refers to the
depreciation of the new leased hotel, Grand Hotel View. Reversal of impairment of long-term non-financial assets
amounts to HRK 7,314,803, while there was no reversal of impairment in 2021. Net gains from the value adjustment
of financial assets amounted to HRK 12,784 and are 100% lower than those achieved in 2021. Other business
expenses amounted to HRK 13,016,588 and are 42% higher than those realized in 2021.
Consolidated Management Report
For the year ended 31 December 2022 (All amounts in HRK)
73
5. ASSET MANAGEMENT
5.1. Management of Group assets
The Group manages owned properties and properties for which it has entered into lease agreements for a period
longer than 1 year.
On March 23, 2022, Jadran d.d. concluded the lease contract for the Grand Hotel View on the island of Brač, with
a capacity of 230 accommodation units.
On September 30, 2022 Jadran d.d. signed an Agreement on the termination of the lease contract with the
company Adria Umag d.o.o for the lease of the Garden Bella Natura Resort facility in Umag. The focus of the
Company's Management in the future would be on the use and management of facilities and capacities that will
bring the Company significantly higher revenues and a significant increase in the profitability rate. With the
aforementioned Agreement, the obligations from the lease contract for the facility ended on September 30, 2022.
Jadran d.d. handed over the mentioned property to Adria Umag on September 30, 2022.
On December 15, 2022, Jadran d.d. concluded a lease contract for the Heritage Hotel Stypia in Crikvenica with a
capacity of 57 beds.
On February 1, 2023, the lease contract for the Hotel Lišanj in Novi Vinodolski expired, and Jadran d.d. returned
the possession of the hotel to the lessor.
Consolidated Management Report
For the year ended 31 December 2022 (All amounts in HRK)
74
5. GROUP RISK EXPOSURE
The most significant risks faced by the Group are as follows:
Competition risk
Competition risk in the tourism market is very high because other similar tourism destinations have invested
substantial funds to further improve and develop their capacities, as well as in other marketing activities focusing
on the arrival of tourists. Among other things, competition is based on the prices, quality and substance of tourism
offers on the Crikvenica Riviera, Makarska Riviera, Riviera of the island Brač and other domestic and foreign
tourism destinations. Bearing in mind that the vast majority of the Group's guests are foreign guests, the
macroeconomic policy of the countries they come from is extremely important, above all the stability of the
exchange rate and the price of goods and services, which directly affect the purchasing power of the guests.
Macroeconomic stability of domestic guests is also very important, because the reduction of their purchasing power
directly affects decisions about coming to our facilities.
In addition to all the existing challenges related to competitiveness, the events related to the COVID-19 pandemic
require that it should be considered how the Group and the local community manage the events related to this new
challenge. The way in which the local communities at the destinations where the Group operates will respond to
the challenges will be extremely important for the Group’s future business and therefore the Group is trying to
engage in solving this problem in a structural manner.
Currency risk
The official currency of the Group is HRK, but certain transactions denominated in foreign currencies are translated
into HRK at the prevailing exchange rate at the balance sheet date. The resulting exchange differences are charged
to operating expenses or credited to the income statement, but do not affect operating cash flows.
Interest rate risk
The Group is exposed to interest rate risk because it enters into loan agreements with banks at variable interest
rates, which exposes the Group to higher risk. The inflation rate trends and the levels of interest rates on foreign
and domestic financial markets are actively monitored, enabling the Group to react in a timely manner in the event
of expected changes in interest rates on the domestic money market.
Settlement risk
Settlement risk is present in all bilateral transactions. Given that settling financial obligations to issuers is one of
the key elements necessary for smooth business operations, the Group considers this risk to be highly important.
The Group has established stringent procedures to minimise collection risks. In addition, settlement risk arising
from executed contracts may be significantly increased if there is an option of terminating them on grounds of force
majeure e.g if the free movement of people and goods is disrupted during the pandemic.
Inflation risk (increase in consumer prices)
Inflation risk is present in contractual relationships where the price of a service or product is indexed and tied to the
Croatian National Bank’s strong HRK policy. As this is an external risk, the ability to eliminate it is minimal. The
Group observes trends of increasing inflation rates primarily measured through the consumer price index, as a
result of extremely expansive monetary policies of central banks and for the purpose of minimising inflation risk,
the Group insists on negotiating fixed terms of supply with all suppliers where possible. Suppliers of energy are an
exception - their prices are subject to market variations.
Consolidated Management Report
For the year ended 31 December 2022 (All amounts in HRK)
75
6. GROUP RISK EXPOSURE (continued)
Liquidity risk
The Group manages liquidity risk by maintaining adequate reserves, bank borrowings and other sources of
financing, by continuously monitoring planned and actual cash flows and matching the maturity profiles of financial
assets and liabilities. The Group is particularly focused on this risk due to increased uncertainty regarding revenues
as a result of the pandemic’s adverse impact on the free movement of guests, guests’ spending power and
performance of contractual obligations by business partners.
The current high level of indebtedness of the Group does not jeopardise current liquidity, and the Company’s and
the Group’s Management Board assesses that even in the event of a continued “crisis”, the Group can provide the
necessary liquidity and smooth operations from its own reserves. It should be noted that several parties have
expressed their interest for the purchase of a part of the Group’s property that is currently not in operation or its
business performance is significantly below its current market value.
Risk of changes in tax and concession regulations
The risk of changes in tax and concession regulations is the likelihood that legislative authorities will amend tax
regulations in a way that they adversely impact the Group’s profitability. This risk is reflected in potential changes
in tax rates and taxable assets, as well as changes in regulations concerning concessions and concessional
authorisations. The right to use maritime domain is one of the significant conditions for the Group’s further
operations, and the Group has actively endeavoured to establish new bases for cooperation with the local
community in this segment.
Tourism industry risk
Tourism trends are largely affected by the COVID-19 pandemic and the global political situation. As an industry, tourism
is highly sensitive to the epidemiological situation and political situation at the destination and its surroundings. By
launching the investment cycle and the advantages of the geographical position compared to the most important emitting
markets (car destination), the Group will endeavour to minimise the impact of adverse market trends and the resulting
risks. The global financial crisis may significantly reduce the spending power of individuals inclined to travelling, whereas
a pandemic and war circumstances may also significantly reduce or completely eliminate the effects of tourist arrivals at
the Group’s destination as a result of the inability to travel outside one’s own country or fear for one’s own health and
future.
Environmental risk
Environmental risk may significantly affect the Group’s performance, notably through the quality of the sea and
coast where guests stay. Climate changes may directly affect the length of stay in the Group’s accommodation
facilities. This risk also includes various other natural disasters.
7. EMPLOYEES
As at 31 December 2022, JADRAN d.d. had a total of 289 employees.
As at 31 December 2022, CLUB ADRIATIC d.o.o. had a total of 40 employees.
As at 31 December 2022, Stolist d.o.o. had no employees.
As at 31 December 2022, the Group had 329 employees.
8. RESEARCH AND DEVELOPMENT ACTIVITIES
The Group constantly monitors developments in its environment and invests in market research, identification of
new business opportunities and new acquisitions. The Group directs and supports the activities of its related parties.
Consolidated Management Report
For the year ended 31 December 2022 (All amounts in HRK)
76
9. OWN SHARE REDEMPTION
As at 31 December 2022, the share capital of JADRAN d.d. amounted to HRK 482,507,730, divided into 27,971,463
regular dematerialised shares with no nominal value and the Company held 631 own shares, which accounted for
0,0023% of the Company's share capital.
As at 31 December 2022, the share capital of CLUB ADRIATIC d.o.o. amounted to HRK 117,104,500.
As at 31 December 2022, the share capital of Stolist d.o.o. amounted to HRK 20,000.
10. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
On the basis of the concluded Agreement on the Termination of the Agreement on Assignment of Contracts from
January 1, 2023, the Company Club Adriatic d.o.o. ceased to be a lessee of the Noemia Hotel in Baška Voda, and
Jadran d.d. became the lessee of the Noemia Hotel.
After the Company has successfully fulfilled all the prerequisites established by the concluded agreements on the
purchase of business shares in the company Adria coast turizam d.o.o., which foresees the acquisition of 100% of
the shares in that company by Jadran d.d., as well as the agreement on the sale of business shares in the Club
Adriatic d.o.o., by which Jadran sells and transfers 100% of the shares in that company to Adria Grupa Baško Polje
d.o.o., on February 6, 2023, the following contracts were concluded:
• agreement on the transfer of business shares in the company Adria coast turizam d.o.o., by which Jadran
d.d. acquired 100% of the shares in that company;
• agreement on the transfer of business shares in the company Club Adriatic d.o.o., by which Jadran
transferred 100% of the shares in that company to Adria Grupa Baško Polje d.o.o.
As of February 6, 2023, Mr. Miroslav Pelko, as a former member of the board of Club Adriatic d.o.o. resigned from
the position and was simultaneously appointed to the position of board member of Adria coast turizam d.o.o..
Upon implementation of these activities, the requirements of the Decision of the General Assembly of the Company
from August 31, 2022 were met.
On February 1, 2023, the lease contract for the Hotel Lišanj in Novi Vinodolski expired, and Jadran d.d. returned
the possession of the hotel to the lessor
On March 14, 2023, the company concluded an Asset management contract with Club Adriatic d.o.o., based on
which Jadran d.d. will manage accommodation objects in Baško Polje during 2023.
Consolidated Management Report
For the year ended 31 December 2022 (All amounts in HRK)
77
11. SOCIAL INDICATORS
Health and safety
Based on the provisions of the Occupational Health and Safety Act (Official Gazette 71/14, 118/14, 154/14, 94/18,
96/18) Jadran d.d. and the Group regulated the occupational safety implementation, rules, rights, obligations and
responsibilities of the employer, worker authorized from the employer, according to the activity performed, risk
assessment, work process, jobs with special working conditions, work tools and dangerous chemicals. The risk
assessment determined the level of danger, harm and efforts in terms of prevention of injuries at work, occupational
disease, work-related illness and disruptions in the work process that could cause harmful consequences for the
safety and health of workers. At the beginning of 2022, business was affected by the impact of the COVID-19
pandemic, which implied increased caution and possible consequences. For this reason, the Management Board
of Jadran d.d. issued recommendations in order to actively manage possible risks and made appropriate decisions.
In administrative departments, workers who regularly perform their work from the office were enabled to work from
home. A comprehensive and structured approach ensured adequate working conditions in every department within
the organization.
Jadran d.d. and the Group regularly undertake activities to ensure a safe working environment for all its employees
and regular training, improvement, and education of its employees in order to educate employees to work in a safe
manner. We conduct our business in accordance with current legal regulations.
In accordance with legal regulations, we regularly inform the Workers’ council about important issues of the state
of health and safety at work. Authorized persons regularly conduct tests of used work equipment to check
compliance with safety and health requirements.
In 2022, there were 7 injuries recorded at work, 6 of which were acknowledged, while one is still being processed.
In order to determine the health capacity of workers to perform certain jobs, workers are referred to health
examinations. The company concluded an Additional Health Insurance policy and thereby ensured additional health
care for employees through medical check-ups.
Equality
Any direct or indirect discrimination based on race, skin color, gender, sexual orientation, marital status, family
obligations, age, language, religion, political or other belief, national or social origin, property status, birth, social
position, membership or non-membership in a political party, membership or non-membership in a trade union, or
physical or mental disabilities is prohibited in Jadran d.d and in the Group.
No form of abuse and harassment is tolerated within the Jadran d.d. and the Group. At the highest management
levels of the organization, members of the Supervisory Board and the Management Board are elected, in
accordance with the Companies Act and the Company's Articles of Association, which do not contain diversity
restrictions in terms of age, gender, education or profession.
Employment
Jadran d.d. had 289 employees as at 31 December 2022. Out of the total number, there were 106 semi-managers,
72 full-time workers, 82 seasonal workers, 19 managers, 6 permanent seasonal workers and 4 interns employed.
Consolidated Management Report
For the year ended 31 December 2022 (All amounts in HRK)
78
11. SOCIAL INDICATORS (continued)
Employment (continued)
Of the total number of employees on the specified date, 62% are women, 38% are men and 0% are undecided.
Chart 6: Employees by gender
Source: Jadran d.d.
As an employer, Jadran d.d. and the Group encourage and invest in employee training and education and organizes
internal and external training for workers, especially in the hotel operations department.
Collective Bargaining
Jadran d.d. and the Group respect the rights of workers to join workers’ associations and unions. No worker will be
discriminated by being or not being a member of an association or disadvantaged for participating or not
participating in association activities. The Group and Jadran d.d. cooperate with the trade union. In 2022 the
Management Board's negotiations began with the trade union representatives about the new Collective Agreement.
During 2022, an agreement with union representatives was concluded, based on which the employee's material
rights were increased from those rights established by the collective agreement. Payment of rewards to employees
was agreed based on good results achieved for the year 2022. With these payments the Group used the maximum
amount of tax-free rewards for work results that could be paid to workers.
Environmental indicators
Jadran d.d. and the Group invest in projects that will improve or change existing business models with the aim of
achieving sustainable business to contribute to the responsible use of natural resources and positively influence
the destinations and society in which it operates.
Energy consumption
The basic energy needs of Jadran d.d. and the Group are derived from fuel, the consumption of which is mostly
related to heating buildings, cooking and transport (fuel oil, gas and gasoline) and electricity and heat supplied by
energy utility companies. In future investments, the Company plans to implement systems for efficient energy
saving from renewable energy sources. Improving energy efficiency will reduce CO2 emissions emitted by the
company.
Men
38%
Women
62%
Men Women Undecided
Undecided
0%
Consolidated Management Report
For the year ended 31 December 2022 (All amounts in HRK)
79
11. SOCIAL INDICATORS (continued)
Energy consumption (continued)
Chart 7: Average consumption
Source: Jadran d.d.
Waste management
On June 10, 2022, the Fund for Environmental Protection and Energy Efficiency published a public call for co-
financing the purchase of machines to prevent the generation of biowaste (food waste) in hotels (JP EU-3/2022).
Up to 40% of the purchase amount was co-financed, with maximum amount up to HRK 150,000 and total available
funds of HRK 1,500,000, according to priority of application. The Company’s application was accepted and we
signed an Agreement with the Fund on the Fund's direct participation in co-financing the procurement of machines
for preventing the generation of biowaste (food waste) in hotels, by providing subsidy funds (contract number
2022/027534, Class: 990-01/22-02/ 17, Number: 563-02-2/236-22-4), August 4, 2022. The fund has paid the funds,
the machine has been purchased and is in use.
In the area of environmental protection, Jadran d.d. and the Group are aware of the importance and burden of
responsibility towards all interested parties and undertakes actions to ensure that business is performed to ensure
sustainability and preserve natural resources. In this sense, actions are taken to continuously develop and improve
business processes in the direction of responsible management and environmental protection. For Jadran d.d. and
the Group to fulfill the above, following actions would be undertaken:
• harmonization of business activities with valid legal regulations of the Republic of Croatia
• harmonization of business activities with norms aimed at environmental protection
• responsible waste management generated within the processes of all levels of work within the organization
• prevention and reduction of possible pollution at the place of their origin
• in work processes where it is possible to use the most acceptable sources of energy
• developing the awareness of employees in the area of conservation and improvement of natural resources
by conducting regular trainings
• actively cooperate with the local community and sustainably use indigenous natural resources.
Electricity/kW
h
76%
Fuel/lit
5%
Gas/lit
4%
Fuel oil/lit
15%
AVERAGE CONSUMPTION
Electricity/kWh Fuel/lit Gas/lit Fuel oil/lit
Corporate Governance Statement
For the year ended 31 December 2022 (All amounts in HRK)
80
Corporate Governance Statement
Jadran d.d. (hereinafter Jadran d.d. or the Company), in accordance with Article 250.b. paragraphs 4 and 5 and
Article 272.p of the Companies Act (Official Gazette No. 111/93, 34/99, 121/99, 52/00 - Decision of the
Constitutional Court of the Republic of Croatia, 118/03, 107/07, 146/08, 137/09,152/11 - consolidated text, 111/12,
68/13, 110/15, 40/19, 34/22, 114/22 and 18/23), hereby issues this Corporate Governance Statement.
In 2022, Jadran d.d., whose shares are listed on the ZSE Official Market, applied the Code of Corporate
Governance adopted by the Croatian Financial Services Supervisory Agency (HANFA) and the Zagreb Stock
Exchange, Inc. Zagreb. This Code has been in force since 1 January 2020, and has been published on the website
of the Stock Exchange (www.zse.hr) and on the website of the Croatian Financial Services Supervisory Agency
(www.hanfa.hr). The Company’s application of the Zagreb Stock Exchange’s Code is reflected in an annual
questionnaire which is publicly disclosed in accordance with the applicable regulations. The answers in the
questionnaire clearly show which provisions of the Code are complied with by the Company and which are not, and
the Questionnaire is publicly available on the official website of the Zagreb Stock Exchange (www.zse.hr).
The Company's shares were listed on the official market of the Zagreb Stock Exchange in January 2018, and the
shareholding report is an integral part of the Annual Report. As of the date its shares were first quoted on the stock
exchange, the Company has not recorded profits and no dividend has thus been distributed.
The Company’s share capital is HRK 482,507,730, divided and contained in 27,971,463 registered common
dematerialised shares without nominal value, each entitling its holder to one vote. There are no holders of securities
in the Company that entail special control rights or voting limitations to a specific percentage or number of votes.
As at 31 December 2022, the Company held 631 treasury shares.
Information about significant shareholders is available on a daily basis on the official website of the Central
Depositary and Clearing Company (www.skdd.hr). The corporate bodies of the Company consist of the General
Assembly, the Supervisory Board and the Company's Management Board. The members of the corporate bodies
of the Company have the duty and obligation to act in accordance with the best interest of the Company in their
work. The Company applied the principle of equal treatment of all shareholders. The shareholders exercised their
primary control rights by deciding on matters within their scope of responsibility via the General Assembly. The
operation of the General Assembly, its powers, the rights of shareholders and the manner of their realisation are
prescribed by the Company's Articles of Association, which are publicly available on the Company's website
(www.jadran-crikvenica.hr).
The General Assembly is responsible for deciding on the following matters: election and removal of Supervisory
Board members, allocation of profits, granting discharge to Management Board members, appointment of auditors,
amendments to the Articles of Association, increasing and decreasing of share capital and any other matters placed
under its responsibility under the law. The shareholders exercise their rights via the General Assembly.
In 2022, the General Assembly was convened and held in accordance with the provisions of the Companies Act
and the Company's Articles of Association. The General Assembly notice, the motions made to, and resolutions
passed by the General Assembly are publicly disclosed in accordance with the Companies Act, the Capital Market
Act, the Zagreb Stock Exchange Rules and the Company's Articles of Association. Registrations for the General
Assembly are limited insomuch as each shareholder is required to notify their participation in accordance with the
Companies Act.
At the session held on 8 July 2022, decisions on granting discharge to the members of the Company’s Management
Board and the Supervisory Board were adopted, a decision on loss coverage was rendered and acceptance of the
Report on Remuneration of Members of the Management Board and the Supervisory Board of the Company in
2021 and an auditor was appointed to audit the financial statements for 2022.
All decisions from the sessions of the General Assembly were published in accordance with legal regulations on
the websites of the Company (www.jadran-crikvenica.hr), the Zagreb Stock Exchange and HANFA.
Corporate Governance Statement
For the year ended 31 December 2022 (All amounts in HRK)
81
The Extraordinary General Assembly was held on 31 August, 2022.The General Assembly made a decision by
which the Management Board of the Company was given prior approval for the acquisition of 100% of the
business shares of company Adria coast turizam d.o.o. for the purchase value, which can-not be higher than
EUR 47 million. In accordance with the Corporate Governance Code of the Zagreb Stock Exchange and HANFA
in force since 1 January 2020, the Supervisory Board is mainly composed of independent members who do not
have business, family or other relations with the Company, the majority shareholder or a group of majority
shareholders or members of the Management Board or the Supervisory Board of the Company or the majority
shareholder. The Supervisory Board has five members, four of whom are elected and relieved of duty by the
General Assemby, and one representative is elected by the employees in accordance with the provisions of the
Labour Act. In accordance with the amendment of the Articles of Association adopted at the General Assembly
on 31 August 2020, the term of office of the Supervisory Board members is 2 years.
The rules for appointing and removing members of the Management Board and the Supervisory Board are defined
by the Articles of Association and the Companies Act.
No restrictions as regards gender, age, education, profession or other similar restrictions apply in any executive,
managing or supervisory bodies or at any other level.
Pursuant to the Companies Act and the Company's Articles of Association, the Supervisory Board renders
decisions at its meetings. In 2022, the Supervisory Board supervised the management of the Company's affairs in
accordance with the Companies Act, the Articles of Association and other internal corporate documents. The
Supervisory Board held a total of 10 meetings, which is consistent with good corporate practices. In 2022, on the
meeting held on 28 July 2022 the Supervisory Board made the Decision on the appointment of the committee of
the Supervisory Board. Until the day of the adoption of the new Decision, the Supervisory Board of the Company
operated through three committees the Audit and Remuneration Committee, the Appointment Committee and the
Corporate Governance Committee. With the new Decision, it was decided that the Supervisory Board will be
assisted in its work by two committees, the Audit and Remuneration Committee and the Appointment Committee.
On 23 May 2022. the term of office of members of the Supervisory Board, Mr. Mirko Herceg and Mr. Dragan Magaš,
expired.
At its session held on 8 July 2022, the General Assembly adopted the Decision on the appointment of members
of the Supervisory Board.
As at 8 July 2022, the Supervisory Board comprised the following persons:
- Goran Hanžek, Chairman of the Supervisory Board
- Karlo Došen, Deputy Chairman of the Supervisory Board
- Mirko Herceg, Supervisory Board Member
- Sandra Janković, Supervisory Board Member
- Adrian Čajić - Supervisory Board Member (employee representative).
In 2022, the Management Board managed the Company’s affairs in accordance with the Companies Act, the
Articles of Association and other internal corporate documents, and fully complied with the provisions of the Code.
On 23 May 2022. the term of office of the Chairman of the Management Board, Mr. Goran Fabris, and the member
of the Management Board, Mr. Ivan Safundžić, expired. On 28 April 2022. the Supervisory Board made a decision
to dismiss Mr. Goran Fabris from the position of President of the Management Board due to the expiration of his
term on 23 May 2022, and the Supervisory Board passed the Decision on the appointment of a member of the
Management Board, Mr. Ivan Safundžić, for a new term until 22 May 2026.
In 2022, the Company’s Management Board comprised the following persons:
- from 1 January 2022 to 22 May 2022:
- Goran Fabris, Chairman of the Management Board
- Ivan Safundžić, Member of the Management Board
- Miroslav Pelko, Member of the Management Board.
- from 23 May 2022 to 31 December 2022:
- Ivan Safundžić, Member of the Management Board
- Miroslav Pelko, Member of the Management Board.
At the meeting held on 17 May 2022. the Supervisory Board adopted the Decision on amending the Rules of
Procedure on the work of the Management Board, which Rules apply until the appointment of the President of the
Company's Management Board.
Corporate Governance Statement
For the year ended 31 December 2022 (All amounts in HRK)
82
Members of the Company’s Management Board are authorised to represent the Company together with another
member of the Management Board, based on the amendment of the Articles of Association adopted at the General
Assembly on 31 August 2020.
In 2020, the Company established the Internal Audit Department, and in June 2020, the Internal Audit Charter was
adopted, which defines the operational framework and the main principles used in the Company's internal audits.
Internal Audit Department is responsible for assessing the level of risk management in business processes, auditing
the effectiveness of internal control systems, in order to improve risk management and compliance with procedures,
examining and analysing compliance of existing business systems with adopted policies, plans, procedures, laws
and rules that may have a significant impact on business reports. It is charged with recommending preventive
measures in the areas of financial reporting, compliance, operations and control in order to eliminate risks and
possible deficiencies that could lead to the inefficiency of processes or fraudulent procedures. Internal audit
informs the Management Board, the Audit and Remuneration Committee and the Supervisory Board about its
activities and audit plan.
The Company complies with the provisions of the Code, except for those provisions that cannot be implemented at
a given time. Such exceptions are as follows:
- The Company will not provide a proxy holder for shareholders who are unable to vote personally at the
General Assembly for any reason. The Company has not received such requests from its shareholders to
date but does provide its shareholders with a proxy form to help them authorise a person of their choice
as their proxy;
- The Company does not maintain a long-term succession plan within the meaning of the Code but has a
general plan for the replacement of key function holders through ongoing training programs;
- The remuneration paid to the Supervisory Board Members was not determined based on their contribution
to the Company’s performance but equals a fixed amount in line with the decision of the General Assembly.
In order to maintain the independence and objectivity of the Supervisory Board members, the
remuneration of the members of the Supervisory Board does not depend on the results of the Company
and does not contain a variable part of the remuneration. In addition, it is not possible to evaluate each
Supervisory Board Member’s contribution to the Company’s performance, especially since the
Supervisory Board Members are not actively involved in the management of Company’s business;
- The Audit and Remuneration Committee is not mostly comprised of independent Supervisory Board
Members. It was decided to implement an alternative solution offered by Article 65 of the Audit Act, so the
Supervisory Board appointed all three Members of the Audit Committee from among Supervisory Board
Members. Of these three Audit and Remuneration Committee members, one is an independent
Supervisory Board member and his membership in this Committee reflects the relevant proportion of
independent members in the Supervisory Board. All three Audit Committee members are financial experts;
- The Supervisory Board did not prepare an evaluation of its activities in the past period, except for the
review contained in the 2022 Supervision Report and the results of examining reports relevant to the
closing of the fiscal year 2022;
- No transactions were conducted that involved any Supervisory Board Members or their related parties and
the Company or its related parties, which is why they were not specified in the Company’s reports. This
also pertains to transactions involving Management Board members or Executive Directors or their related
parties and the Company or its related parties;
- No contracts or agreements were entered into in 2022 between Supervisory Board Members or
Management Board Members and the Company.
In accordance with the provisions of the Corporate Governance Code, the Company adopted the Code of Conduct,
the Policy on Reporting Irregularities and the Conflict of Interest Management Policy, which acts are also published
on the Company's official website.
The Audit and Remuneration Committee adopted the Policy on Prohibited Audit Services. As part of its
organisational model that encompasses all business operations and processes, the Company maintains developed
internal control systems on all relevant levels which, inter alia, provide a true and fair view of the financial statements
and business reports.
Corporate Governance Statement
For the year ended 31 December 2022 (All amounts in HRK)
83
Pursuant to the Capital Market Act, the Zagreb Stock Exchange Rules and other applicable regulations, Jadran
d.d. fuly discloses the required inside information and any changes thereto as soon as such changes occur.
