proceedings were completed. The Commercial Court in Rijeka in the case ref. no. 14 St-52/2010 issued a Decision

to continue as a going concern. All court proceedings initiated to challenge the bankruptcy plan have been completed.

During 2017 and 2018, the Company entered into out-of-court settlements on the amicable settlement of disputes with

are settled, which the Company undertook to do in 12 equal instalments. The last of these instalments became due

and payable in September 2019. By concluding these settlements, the Company ensured its ability to continue as a

going concern.

The separate financial statements have been prepared on the assumption that the Company will continue in business

on a going concern basis.

The Company 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

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

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

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

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 Company as lessor is recognised in income for the period over the lease term.

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

The business model reflects how the Company manages its assets in order to generate cash flows - regardless whether

the Company’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 Company’s financial assets comprise receivables.

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.

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.

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 Company 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.

course of business. Trade payable 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.

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

i.e. not recognised as expense for income tax purposes. The Company’s current tax liability is calculated using tax

rates that have been enacted by the reporting date.

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.

In the normal course of business through salary deductions, the Company makes payments to mandatory pension

Provisions are recognised when the Company 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

The Company’s share capital comprises ordinary shares. The consideration paid for treasury shares, including any

directly attributable transaction costs, is deducted from equity attributable to the Company’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

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).

At inception of a contract, the Company 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

The Company 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

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.

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.