Adriatic Croatia International Club za djelatnost marina d d : Annual report for the year ended 31 december 2021 including independent auditor’s report

Address: Rudolfa Strohala 2

Ordinary shares: ISIN HRACI0RA0000

Economic activity: R 9329

Market: Regular market

LEI:7478000090X86WBQ6C10 Home member state: Croatia

ADRIATIC CROATIA INTERNATIONAL CLUB, za djelatnost marina d.d.

ANNUAL REPORT

FOR THE YEAR ENDED 31 DECEMBER 2021 INCLUDING INDEPENDENT AUDITOR'S REPORT

DOCUMENT IS NOT IN THE OFFICIAL FORMAT FOR

PUBLISHING

CONTENTS

AL

MANAGEMENT REPORT FOR THE YEAR 2021 STATEMENT BY THE PERSONS RESPONSIBLE FOR FINANCIAL REPORTING PROPOSED DECISION ON PROFIT DISTRIBUTION DECISION OF THE SUPERVISORY BOARD ON APROVING THE ANNUAL FINANCIAL STATEMENTS FOR 2021 FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 INCLUDING INDEPENDENT AUDITOR'S REPORT

GENERAL COMPANY DATA

ACI d.d. is a chain of 22 marinas spread along the Adriatic, from Umag in the north to Dubrovnik in the south. In addition to marinas, ACI d.d. provides services in the anchorage in the Podražanj bay, which uses the infrastructure of Marina Žut and complementing business activity. The Company's main business activity is providing yearly, monthly and daily berthing services in ports for nautical tourism. In addition to this, ACI offers its clients supplementary services, such as boat lowering and lifting, towing, boat ramp services and so on. Other activities, such as catering, retail business, charter etc., are provided by other legal and natural entities on the basis of business cooperation contracts. In 2021, ACI marinas had 5,865 berths at their disposal, of which 5,279 wet berths and 586 dry berths. Marinas conduct business in concession areas, for which the Company pays concession fees. The fees consist of a fixed part, which is paid on the basis of the surface area of a marina, and a variable part, which is paid based on the income that marinas have generated themselves. Concession contracts of the marinas expire in late 2030, with the exceptions of the Marina Veljko Barbieri, which expires in 2027, and anchorage Žut, expiring in 2026.

SUPERVISORY BOARD

In 2021, the members of the Supervisory Board were:

•  Dražen Ivanušec, President of the Supervisory Board

•  Dobrica Rončević, Vice President of the Supervisory Board

•  Marijeta Hladilo, Member of the Supervisory Board

•  Tomislav Ninić, Member of the Supervisory Board.

Members of the Supervisory Board are usually elected for a term of four years.

In 2021, following the four-year term ending in July 2020, the terms that the members of the Supervisory Board were elected to were restricted to three months, with extensions provided on three occasions, at General Assemblies held on 8 March, 28 June and 12 October 2021.

MANAGEMENT BOARD

The Company's Management as at 31 December 2021 consists of one member:

•  Kristijan Pavić- Member of the Management Board - director (represents the Company individually and independently)

Pursuant to the Decision of the Company's Supervisory Board of 11 February 2022, starting from 14 February 2022, the Management Board of the Company consists of three members. In addition to Kristijan Pavić, President of the Management Board, the members of the Management Board are:

•  Josip Ostrogović, Member of the Management Board (represents the Company together with the President of the Management Board)

•  Ivan Herak, Member of the Management Board (represents the Company together with the President of the Management Board).

EMPLOYEES

As at 31 December 2021, the Company had 334 employees, whilst as at 31 December 2020, the Company employed 340 employees.

ADRIATIC CROATIA INTERNATIONAL CLUB, za djelatnost marina d.d.

MANAGEMENT REPORT FOR THE YEAR 2021

Comment from the president of the Management Board

Key performance indicators

Description of the most important risk and uncertainties Significant events in 2021

Sales revenue trends Profitability trends

Financial performance indicators Market capitalisation Ownership structure Corporative governance

Environmental care and social responsibility

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COMMENT FROM THE PRESIDENT OF THE MANAGEMENT BOARD

The results achieved in 2021 exceeded our expectations, especially if we take into account the uncertainties and unknowns that marked the year preceding it and that had accompanied us into 2021.

The modification and adaptation of business processes to new circumstances and the results of the work done to date have primarily been reflected in the preservation of financial stability and liquidity of ACI. We have preserved jobs and maintained fair relations with our business partners, all with an increase in sales revenue by HRK 36 million.

Results planned for 2022 are set at the pre-pandemic level, and we hope that the circumstances we are currently witnessing will allow us to realise them.

This leaves room for the development of strategic projects that were started in the past and the development of new ones with the aim of improving business, primarily by expanding services other than the core business ones.

During the year, we invested HRK 44 million in the system. Among the most important projects is the completion of the long-planned reconstruction of the breakwater on Korčula; we also invested in the land and sea infrastructure of the marina in Vodice, and considerable investments were made in infrastructure in Marina Dubrovnik, with works being underway.

At this moment, further development of the Company is primarily linked to investing in new projects and activities, but also to solving the problem of the concession contracts period, where some strategic investments are already not profitable due to the short period of return on investment. The above-mentioned issues, at the moment, represent the main limiting factor in making investments and putting into action other business ideas related to the system.