INTRODUCTION Changes in the Corporate structure of the Company Statement of Responsibilities of the Executive Directors...

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2 Contents INTRODUCTION... 2 Changes in the Corporate structure of the Company... 2 Statement of Responsibilities of the Executive Directors... 4 Executive Directors Interim Performance Report for the Period January - December Consolidated Business Results of the Group... 5 Consolidated Income Statement... 5 Consolidated Statement of Financial Position... 8 Company business results (not-consolidated)... 9 Company Income Statement... 9 Company Statement of Financial Position as of 31 December Company Risks Ownership Structure APPENDIX 1 Financial statements (unaudited)... 15

3 INTRODUCTION Pursuant to the Capital Market Act, the company publishes the quarterly financial report for the fourth quarter of 2016 both for Arenaturist d.d. (the Company) and for the Company and its subsidiaries (the Group) on a consolidated basis. When using the report at the Group level, attention should be drawn to the scope of data for the current year in comparison with the comparable period of the previous year, following changes in the corporate structure in The changes in the corporate structure are in line with the strategy to develop the Company into a dynamic hospitality company in the CEE Region whilst strengthening and developing the Company s business and market position in the upscale and upper upscale segments of the hospitality markets, primarily within Croatia and Germany.. Changes in the Corporate structure of the Company The Company significantly changed its corporate structure during 2016, below is a summary of such changes: - A change to the majority shareholding of the Company as PPHE Hotel Group Limited and its subsidiaries (PPHE Hotel Group) acquired a controlling interest by way of acquisition of 80% of the shares in its previous joint venture company. As a result of the acquisition and pursuant to the Croatian Takeover Act, a mandatory takeover bid to minority shareholders of the Company was made. Following the completion of that offer, PPHE Hotel Group sold shares to two Croatian pension funds (9% to AZ and 3% to PBZ CO respectively), following which PPHE Hotel Group owned 65.63% of the shares of the Company. - In June 2016, Arenaturist bought the shares in three Croatian private companies Arenaturist Hoteli d.o.o., Arenaturist Zlatne Stijene d.o.o. and Arenaturist Turistička Naselja d.o.o. (the Bora Companies). The Bora Companies were previously owned by the joint venture company and were under Arenaturist s management for many years. These Bora Companies were later merged into the Company on 31 October In November 2016, Arenaturist s shares were moved from the Regular Market to the Official Market of the Zagreb Stock Exchange. - In December 2016, the Group entered into an agreement to acquire the freehold interests in art otel cologne and art otel berlin kudamm, in Germany and completed the acquisition in February Arenaturist subsequently acquired 88% of the shares in Sugarhill Investments B.V. (Sugarhill) and in return Arenaturist issued 1,091,250 new shares to PPHE Hotel Group increasing PPHE Hotel Group's shareholding in Arenaturist to 77.09%. Sugarhill and its subsidiaries (the Sugarhill Group) operate hotels in Germany and Hungary. These German and Hungarian operations consist of a portfolio of eight Park Plaza or art otel branded owned/co-owned/leased/managed hotels. Arenaturist has an option to buy the remaining 12% of Sugarhill at a price per share which is based 2

4 on the agreed valuation for the above 88% capital contribution. The option is exercisable for 18 months following the initial transaction date. Overview of properties in the Sugarhill Group portfolio Hotel Location Number of units Categorisation (Co) ownership Operating lease Manageme nt agreement art'otel berlin kudamm (2) Berlin (GER) 152 4* x x 2000 art'otel berlin mitte Berlin (GER) 109 4* x x 2000 Park Plaza Berlin Kudamm Berlin (GER) 133 3* x x 2006 Park Plaza Wallstreet Berlin Mitte Year 1 Berlin (GER) 167 4* x x 2006 art'otel cologne (2) Cologne (GER) 218 4* x x 2010 Park Plaza Nuremberg art'otel dresden art'otel budapest Nurernberg (GER) Dresden (GER) Budapest (HUN) 177 4* x x * x * x x 2000 TOTAL 1, Year of commencement of operations under the Park Plaza or art otel brand 2 The Company entered into hotel sale agreements with a third party on 9 December 2016 Consolidated results of operations and consolidated cash flows are presented as if the newly acquired Bora Companies formed part of the Group as of 1 January

5 Statement of Responsibilities of the Executive Directors Pursuant to the provisions of the Capital Market Act, Article 410, Paragraph 2, the Executive Directors of the Company make the following statement: To the best of our best knowledge: - This short set of non-consolidated unaudited quarterly financial statements (the Financial Statements) provides a comprehensive and true presentation of assets and liabilities, profit and loss, financial position and operations of the Company. - The consolidated unaudited quarterly financial statements (the Consolidated Financial Statements) provide a comprehensive overview of assets and liabilities, profit and loss of the Group. The consolidated financial data for the period, reported in line with the approach applied, are contained in the prescribed forms attached to this report. - The Sugarhill Group had no contribution to the 2016 consolidated income statement of the Group as the acquisition took place a few days before year end. The balance sheets of the Sugarhill Group are included in the consolidated balance sheet of the Group. - The Financial Statements and Consolidated Financial Statements have not been audited; therefore the Executive Directors reserve the right to make amendments following completion of the audit. - The Executive Directors Interim Report for the period from 1 January through 31 December 2016 contains a true presentation of the business results and operations of the Company and the companies included in the consolidation, with a description of the most significant business events, apart from those described in the introduction, which relate to changes in the corporate structure of the Company Chief Executive Officer Reuel Israel Gavriel Slonim Executive Director Milena Perković 4

6 Executive Directors Interim Performance Report for the Period January - December 2016 Consolidated Business Results of the Group The operating income increased by 8% as a result of an increase of the average daily rate that occurred due to the increased demand through online sales channels and the effect of investments in renovated and branded properties. The operating expenses increased due to the increased volume of sales and staff costs. The EBITDA increased by 13% to HRK million (2015: HRK million), whereas EBIT before impairment increased by 1% to HRK 58.1 million (2015: HRK 57.3 million). Consolidated Income Statement 2016 (unaudited) 2015 (unaudited) Index Rooms sold 748, , Average room rate HRK in million Operating income Operating expenses EBITDA Depreciation EBIT before impairment charge Impairment charge Extraordinary restructuring expenses Financial revenues Financial expenses Total income Total expenditures Profit/(loss) before tax (138.0) 23.7 (581) * Average room rate is calculated as the accommodation revenue generated by hotels, self-catering holiday apartment resorts and campsites divided by the number of sold rooms, apartments and pitches. The Group s consolidated financial position, results of operations and cash flows are presented as if the three Bora companies have been part of the Group since 1 January Impairment charge The Group recorded in 2016 an impairment charge of HRK million. Under International Financial Reporting Standards (IFRS) accounting standards the Group is required to carry out a fair value review of the carrying value or book value of its operating assets and to impair the value of any asset whose fair value is lower value than the carrying value. The independent valuation of the Group for the purposes of the Sugarhill acquisition indicated that an impairment of some of the Group s Croatian operating assets could be required. 5

7 Impairment charge (cont) Fair value is the higher of an asset s market value (less costs of disposal) and its value in use. The value in use is arrived at by discounting the estimated future cash flows using a pre-tax discount rote that reflects current market rates for the time value of money and the risks associated with an asset. As the Group was not able to establish a market value due to a lack of comparable transactions the Group calculated the value in use for each of its operating assets. The results of this exercise were that the total of the value in use of the Group s Croatian operating assets was HRK 1,424 million which was higher than the total carrying value of the Croatian operations before impairment of HRK 1,236 million. However the value in use of some operating assets was below their carrying value and under IFRS an impairment of those operating assets is required. IFRS does not allow an increase in value where the fair value exceeds the carrying value of an asset unless it is to reverse a previous impairment of the value of an asset. The total amount of the impairment of the Croatian operating assets whose fair value was below the carrying value amounts to HRK million of which HRK 98.1 million relates to hotel assets, HRK 45.8 million relates to self-catering holiday apartment resorts and HRK 4.7 million relates to other assets. As required by IFRS the impairment charge of HRK million appears in the profit & loss statements for the year ended 31 December The impairment was a necessary adjustment to the carrying value of some of the Group s properties. It is a non-cash item and represents approximately 12% of the HRK 1,236 million carrying value of our operating assets before impairment. As stated above the total of the value in use of the Group s Croatian operating assets is not affected by this non-cash item and remains at HRK 1,424 million as at 31 December Result before tax and normalized profit before tax The Group recorded extraordinary expenses of HRK 6.6 million associated with the changes in the corporate structure. The Group realised in 2016 a loss before tax of HRK million (2015: profit before tax was 23.7 million). During the two years ended 31 December 2016 the Group incurred a number of nonrecurring or exceptional costs that are not part of its usual operations (see table below). Excluding these costs the 2016 normalised profit before tax shows year-on-year increases of 70.8% to HRK 42.7 million (2015: HRK 25.0 million). Total revenues increased in 2016 by HRK 33.1 million and normalised profit before tax increased by HRK 17.7 million, demonstrating strong cost control. 6

8 Normalised profit before tax 2016 (unaudited) 2015 (unaudited) Reported (loss) before tax (138.0) 23.7 Impairment on property, plant and equipment Non-recurring cost restructuring, etc Increase depreciation due to merger or renovation Fair value movement related party loan Normalised profit before tax Trading in the fourth quarter The fourth quarter in the business year is also an off-season for the Group, in which the Group records low business activity, and the expenses are affected by fixed costs. The increase of the total expenses in the fourth quarter is primarily a result of the impairment expense. 7

9 Consolidated Statement of Financial Position 2016 (unaudited) As of 31 December (in HRK million) 2015 (unaudited) Index Long-term assets 1, , Short-term assets Total assets 1, , Capital and reserves Capital Unregistered capital Reserves* ,2 109 Retained earnings* (90.4) Minority interest Long-term liabilities Short-term liabilities Total liabilities Total capital and liabilities 1, , * In the table the results of the Bora Companies until the date which they were merged into the Company are included in the Reserves. In the prescribed forms these result are included in Retained earnings. The increase in 2016 in the total assets of HRK million to HRK 1,646.5 million results mainly from the acquisition in December 2016 of the Sugarhill Group, contributing HRK million to the total assets. This increase was reduced by a number of other items including the impairment charge on property, plant and equipment amounting to HRK million. The increase in 2016 in the total liabilities of HRK million to HRK million results mainly from the acquisition of the Sugarhill Group, contributing HRK million to the total liabilities. The other main contributor is the new loan from Zagrebačka banka d.d. of HRK 74.9 million (EUR 10.0 million) for the acquisition of the Bora Companies in June

10 Company business results (not-consolidated) In 2016, the Company achieved solid results from ordinary business activities, as shown in the table below. It should be noted that the income statement of the Company includes the operations of the Bora Companies as of 31 October 2016, the date that the Bora Companies merged with the Company. Company Income Statement (unaudited) (audited) Index Rooms sold 680, , Average room rate* in HRK In million HRK Total operating income Total operating expenses EBITDA Depreciation EBIT before impairment charge Impairment charge Extraordinary restructuring expenses Financial revenues Financial expenses Total income Total expenditures Profit/loss before tax (135.1) * Average room rate is calculated as the accommodation revenue generated by hotels, self-catering holiday apartment resorts and campsites divided by the number of sold rooms, apartments and pitches. During 2016, the Company achieved an increase in the operating income of 7% and an increase in the operating expenses of 8%, which resulted in an EBITDA of HRK million, representing an increase of 6% compared to the previous year. Trading in the fourth quarter The fourth quarter of the business year is an off-season period in which the Company records low business activity, and the expenses are affected by fixed costs. The operating income and expenditures resulted in negative profit before tax in the amount of HRK 62.0 million, which is HRK 5.5 million less than compared to the previous year. The increase in the total expenses in the fourth quarter is a result primarily of the asset value impairment in the amount of HRK million. 9

11 Company Statement of Financial Position as of 31 December 2016 As of 31 December (in million HRK) 2016 (unaudited) 2015 (audited) Index Long-term assets 1, , Short-term assets Total assets 1, , Capital and reserves Capital Unregistered capital Reserves Retained earnings (90.9) Long-term liabilities Short-term liabilities Total liabilities Total capital and liabilities 1, , The non-consolidated balance sheet of the Company as at 31 December 2016 also includes the assets and the liabilities of the merged Bora Companies. As result of this merger the assets and the liabilities increased. The merger was effective as of 31 October The increase in the long-term assets is further a result of the acquisition of 88% of the shares of Sugarhill for HRK million. The increase in the long term assets is offset with the impairment charge of HRK million. 10

12 Company Risks Global risks the risk of macroeconomic movements and political stability 1. that over 90% of guests are foreign, with the UK representing an increasingly growing market, the stability of macroeconomic indicators such as the price of goods and services and the foreign currency exchange rate is highly important, as they influence the purchasing power of guests and their decision about the holiday location. The stability of countries the guests come from is also very important. 2. The political stability is especially important in terms of safety of citizens and guests, where the Republic of Croatia is rated as a highly safe country. This is an important advantage of the destination considering the increase in political unrest all over the world. 3. Tourism and hospitality industry risks relate to regulations applicable to the hospitality industry and taxes and other duties that impact the Group. Any changes to regulations, taxes or duties could have an adverse effect on the Group. 4. The still unresolved issue of concessions on tourist land and the announced amendments to the Act on Concessions of 2010 which have not yet been applied with respect to agreements on concessions make future investments uncertain. 5. Potential amendments to the Act on Concessions of 2010 on the Maritime Demesne are of great significance to the Company s operations as its hotels, self catering holiday apartment resorts and campsites are located directly on or very close to the coastline. 6. There is increasing competition in the Istrian area of Croatia and from other destinations, which requires the Group to invest continuously in new and improved accommodation and associated attractions such as swimming pools, bars and restaurants. Financial risks The Company is exposed to a variety of financial risks such as: 1. Currency risk The Company is naturally protected against currency risk as most of its revenues and borrowings are denominated in the Euro. The Company did not use derivative instruments in the previous period. 2. Interest rate risk Due to borrowings and variable interest rates, the Company is exposed to the interest rate risk. In the previous period, due to the decrease in Euribor, interest rates were equalised with bank interest margins. 3. Credit risk The Company contracts advance payments, deposits and payments with major credit cards, and also obtains security instruments in the form of promissory notes, in order to reduce the risk of uncollectibility of receivables. The Company has no credit placements. 11

13 4. Liquidity risk In the observed period, the Company ensured sufficient funds to settle all operating, financing and investment activities. Arenaturist regularly makes cash flow projections on a monthly, annual and long-term basis. In order to ensure flexibility, short-term borrowings are used, and in periods of excess cash flows, the funds are deposited. Other risks 1 The Company s business in Croatia is highly seasonal; the majority of guest visits are from June to September. The Group s self-catering holiday apartment complexes and campsites in Croatia typically experience operating losses and negative cash flows during the first, second and fourth quarters of each fiscal year, as a result of the seasonality of these businesses. Operating results for any three-month period are not indicative of the results that may be achieved for any subsequent quarter or for a full fiscal year. While the German and Hungarian hotels acquired by Arenaturist do not experience such seasonality, Arenaturist expects to continue to experience significant seasonality in its consolidated results. 2 A high degree of seasonality in revenues in the Croatian market increase the impact of certain weather events on Arenaturist s operating results. The ability to attract visitors to Arenaturist s Croatian properties, particularly the campsites and selfcatering holiday apartment resorts, is influenced by weather conditions and the number of warm and dry weather days during the summer season. Adverse weather conditions and other significant weather events of even moderate or limited duration occurring during peak business periods could adversely affect guest visits, which could have a material adverse effect on the Group s business, financial condition and results of operations. 3 In accordance with the provisions of the Tourist Land Act, in 2011 the Company submitted requests for the award of priority concessions for a term of 50 years (the maximum term allowed) in relation to land in its eight campsites and three of its resorts. Since the adoption of the Tourist Land Act in 2010, as far as the Company is aware, no concession agreement has been entered into with respect to tourist land in campsites or tourist resorts in Croatia due to unclear provisions in the Tourist Land Act and other related regulations. In practice, all companies that have submitted requests for a concession regularly pay 50% of the concession fee because for so long as the co-ownership of the land is not established, it is considered that the land is owned in equal parts by the Croatian government and the relevant company. As such, the Company pays fifty per cent. of the concession fee and makes a provision in respect of the remaining fifty per cent in the Group s Financial Statements. 4 The final outcome of the priority concession award proceedings and other related proceedings cannot be predicted. Potential changes in the laws impacting the tourist land present additional risks to the Group, including but not limited to, concession award procedures and the overall fees that may become payable by the Group If the proceedings are not resolved in the Group s favour, this could have a material adverse effect on the Group s business, financial condition and results of operations. 12

14 Other risks (cont.) 5. During the year to 31 December 2016, the Company was not exposed to environmental risks (pollution of the sea and the coast), or natural disasters of large scale (storms). Unstable weather and rainy periods impacted the reduced number of guests on campsites. Environmental risks affect customer satisfaction regarding the destination and, as such, are very important for the promotion and the status of the destination.. 13

15 Ownership Structure Overview of the major shareholders of Arenaturist as at 31 December 2016: Share in registered capital 1 DVADESET OSAM D.O.O. 65,63 2 SOCIETE GENERALE-SPLITSKA BANKA D.D./AZ OMF KATEGORIJE B Custody account 7,63 3 ADDIKO BANK D.D./PBZ CO OMF - KATEGORIJA B - Custody account 2,73 4 CERP/REPUBLIKA HRVATSKA 1,94 5 BAKIĆ NENAD 1,92 6 RAIFFEISENBANK AUSTRIA D.D. - Custody account 1,38 7 SOCIETE GENERALE-SPLITSKA BANKA D.D./AZ OMF KATEGORIJE A - Custody account 1,12 8 SOCIETE GENERALE-SPLITSKA BANKA D.D./KD VICTORIA FOND - Custody account 0,83 9 PIOVESANA EZIO 0,55 10 OTP BANKA D.D. - Custody account 0,28 The Company holds 169 shares as treasury shares. Following the share capital increase in February 2017, the share capital of the Company is HRK 65,475, HRK and is divided into 2,182, ordinary shares under the ticker symbol ARNT-R-A and 1,091,250 ordinary shares under the ticker symbol ARNT-R-B with a nominal value of HRK each. The shareholder, Dvadeset Osam d.o.o. (a member of PPHE Hotel Group) will have 77.09% voting rights. Share price and market capitalization (all in HRK) Highest Lowest Last Market capitalisation 472,00 398,76 468, Management Board In the fourth quarter a meeting of the Management Board was held, whose session and the resolutions adopted were published on the Zagreb Stock Exchange website and on the Company s website In Pula, on 27 February 2017 Chief Executive Officer Executive Director Reuel Israel Gavriel Slonim Milena Perković 14

16 APPENDIX 1 Financial statements (unaudited) Consolidated Balance sheet Consolidated Profit and loss statement Consolidated Cash flow statement Consolidated Statement of changes in equity Company Balance sheet Company Profit and loss statement Company Cash flow statement Company Statement of changes in equity 15

17 Annex 1. Reporting period to Quarterly financial report TFI-POD Tax number (MB): Company registration number (MBS): Personal identification number (OIB): Issuing company: ARENATURIST d.d. Postal code and place PULA Street and house number: Smareglina 3 address: uprava@arenaturist.hr Internet address Municipality/city code and name 359 PULA County code and name Consolidated report: 18 ISTARSKA Number of employees: 704 (period end) YES NKD code: 5510 Companies of the consolidation subject (according to IFRS Seat: MB: Mažurana d.o.o. Zagreb, Radnička cesta Ulika d.o.o. Zagreb, Radnička cesta Sugarhill Investments B.V. Nizozemska, Amsterdam / NCCCR Germany Real Estate B.V. Nizozemska, Amsterdam /NCCCR Bookkeeping service: Contact person: KALAGAC SANDRA (only surname and name) Telephone: 052/ Telefaks: 052/ address: skalagac@arenaturist.hr Family name and name: REUEL ISRAEL GAVRIEL SLONIM, MILENA PERKOVIĆ (person authorized to represent the company) L.S. (signature of the person authorized to represent the company)

18 Balance Sheet Consolidated as of Company: ARENATURIST d.d. Position AOP Previous period Current period ASSETS A) RECEIVABELS FOR SUBSCRIBED NOT PAID CAPITAL 001 B) NON-CURRENT ASSETS ( ) I. INTANGIBLE ASSETS (004 do 009) Expenditure for development Concessions, patents, licenses, trademarks, service marks, software and other rights Goodwill Advances for purchase of intangible assets Intangible assets in progress Other intangible assets II. PROPERTY, PLANT AND EQUIPMENT (011 do 019) Land Buildings Plant and equipement Tools, working inventory and transportation assets Biological assets Advances for purchase of tangible assets Tangible assets in progress Other tangible assets Investment in real-estate III. NON-CURRENT FINANCIAL ASSETS (021 do 028) Share in related parties Loans to related parties Participating interests (shares) Loans to companies with participating interest Investments in securities Loans, deposits, etc Other non-current financial assets Equity-accounted investments IV. RECEIVABLES (030 do 032) Receivables from related parties Receivables arising from sales on credit Other receivables V. DEFERRED TAX ASSET C) CURRENT ASSETS ( ) I. INVENTORIES (036 do 042) Raw materials and supplies Production in progress Finished products Merchandise Advances for inventories Long term assets held for sale Biological assets II. RECEIVABLES (044 do 049) Receivables from related parties Receivables from end-customers Receivables from participating parties Receivables from employees and members of the company Receivables from government and other institutions Other receivables III. CURRENT FINANCIAL ASSETS (051 do 057) Share in related parties Loans to related parties Participating interests (shares) Loans to companies with participating interest Investments in securities Loans, deposits, etc Other financial assets IV. CASH AND CASH EQUIVALENTS D) PREPAYMENTS AND ACCRUED INCOME E) TOTAL ASSETS ( ) F) OFF BALANCE SHEET ITEMS 061 0

19 EQUITY AND LIABILITIES A) ISSUED CAPITAL AND RESERVES ( ) I. SUBSCRIBED SHARE CAPITAL II. CAPITAL RESERVES III.RESERVES FROM PROFIT ( ) Legal reserves Reserve for own shares Treasury shares and shares (deductible items) Statutory reserves Other reserves IV. REVALUATION RESERVES V. RETAINED EARNINGS OR LOSS CARRIED FORWARD ( ) Retained earnings Loss carried forward VI. NET PROFIT OR LOSS FOR THE PERIOD ( ) Net profit for the period Net loss for the period VII. MINORITY INTEREST B) PROVISIONS (080 do 082) Provisions for pensions, severance pay and similar libabilities Provisions for tax liabilities Other provisions C) NON-CURRENT LIABILITIES (084 do 092) Liabilites to related parties Liabilities for loans, deposits, etc Liabilities to banks and other financial institutions Liabilities for advances Trade payables Commitments on securities Liabilities to companies with participating interest Other non-current liabilities Deferred tax liabilities D) CURRENT LIABILITIES (094 do 105) Liabilites to related parties Liabilities for loans, deposits, etc Liabilities to banks and other financial institutions Liabilities for advances Trade payables Commitments on securities Liabilities to companies with participating interest Liabilities to emloyees Taxes, contributions and similar liabilities Liabilities arising from share in the result Liabilities arising from non-current assets held for sale Other current liabilities E) ACCRUED EXPENSES AND DEFERRED INCOME F) TOTAL EQUITY AND LIABILITIES ( ) G) OFF BALANCE SHEET ITEMS ADDITION TO BALANCE SHEET (only for consolidated financial statements) ISSUED CAPITAL AND RESERVES 1. Attributable to majority owners Attributable to minority interest

20 Consolidated Income statement period to Company: ARENATURIST d.d. Position AOP Previous period Previous period Current period Current period Cummulative Quarter Cummulative Quarter I. OPERATING INCOME (112 do 113) Rendering of services Other operating income 113 II. OPERATING COSTS ( ) Change in inventories of work in progress Material expenses (117 do 119) a) Costs of raw materials b) Cost of goods sold 118 c) Other material expenses Employee benefits expenses (121 do 123) a) Net salaries b) Tax and contributions from salary expenses c) Contributions on salary Depreciation and amortisation Other expenses Write down of assets ( ) a) non-current assets (except financial assets) b) current assets (except financial assets) Provisions Other operating costs III. FINANCIAL INCOME (132 do 136) Interest, foreign exchange differences, dividens and similar income from related parties Interest, foreign exchange differences, dividens and similar income from third parties Income from investments in associates and joint ventures Unrealised gains (income) from financial assets Other financial income IV. FINANCIAL EXPENSES (138 do 141) Interest, foreign exchange differences, dividens and similar income from related parties Interest, foreign exchange differences, dividens and similar income from third parties Unrealised losses (expenses) from financial assets Other financial expenses V. SHARE OF PROFIT FROM ASSOCIATED COMPANIES VI. SHARE OF LOSS FROM ASSOCIATED COMPANIES VII. EXTRAORDINARY - OTHER INCOME VIII. EXTRAORDINARY - OTHER EXPENSES IX. TOTAL INCOME ( ) X. TOTAL EXPENSES ( ) XI. PROFIT OR LOSS BEFORE TAXES ( ) Profit before taxes ( ) Loss before taxes ( ) XII. TAXATION XII. PROFIT OR LOSS FOR THE PERIOD ( ) Profit for the period ( ) Loss for the period ( ) ADDITION TO PROFIT AND LOSS ACCOUNT (only for consolidated financial statements) XIV. PROFIT OR LOSS FOR THE PERIOD 1. Attributable to majority owners Attributable to minority interest 156 STATEMENT OF OTHER COMPREHENSIVE INCOME (only for IFRS adopters) I. PROFIT OR LOSS FOR THE PERIOD (=152) 157 II. OTHER COMPREHENSIVE INCOME/LOSS BEFORE TAXES (159 TO 165) Exchange differences from international settlement Changes in revaluation reserves of long-term tangible and intangible assets Profit or loss from re-evaluation of financial assets held for sale Profit or loss from cash flow hedging Profit or loss from hedging of foreign investments Share of other comprehensive income/loss from associatied companies Actuarial gains/losses from defined benefit plans 165 III. TAXATION OF OTHER COMPREHENSIVE INCOME FOR THE PERIOD 166 IV. NET OTHER COMPREHENSIVE INCOME FOR THE PERIOD (158 TO 166) 167 V. COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD ( ) 168 ADDITION TO STATEMENT OF OTHER COMPREHENSIVE INCOME (only for consolidated financial statements) VI. COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD 1. Attributable to majority owners Attributable to minority interest 170

21 Consolidated Cash flow statement - indirect method period to Company: ARENATURIST d.d. Position AOP Previous period Current period CASH FLOWS FROM OPERATING ACTIVITIES 1. Profit before tax Depreciation and amortisation Decrease of current liabilities Decrease of current receivables Decrease of inventories Other cash flow increases I. Total increase of cash flow from operating activities Decrease of current liabilities Increase of current receivables Increase of inventories Other cash flow decreases 011 II. Total decrease of cash flow from operating activities A1) NET INCREASE OF CASH FLOW FROM OPERATING ACTIVITIES A2) NET DECREASE OF CASH FLOW FROM OPERATING ACTIVITIES CASH FLOW FROM INVESTING ACTIVITIES 1. Proceeds from sale of non-current assets Proceeds from sale of non-current financial assets Interest received Dividend received Other proceeds from investing activities III. Total cash inflows from investing activities Purchase of non-current assets Purchase of non-current financial assets Other cash outflows from investing activities IV. Total cash outflows from investing activities B1) NET INCREASE OF CASH FLOW FROM INVESTING ACTIVITIES B2) NET DECREASE OF CASH FLOW FROM INVESTING ACTIVITIES CASH FLOW FROM FINANCING ACTIVITIES 1. Proceeds from issue of equity securities and debt securities Proceeds from loans and borrowings Other proceeds from financing activities 029 V. Total cash inflows from financing activities Repayment of loans and bonds Dividends paid Repayment of finance lease Purchase of treasury shares Other cash outflows from financing activities 035 VI. Total cash outflows from financing activities C1) NET INCREASE OF CASH FLOW FROM FINANCING ACTIVITIES C2) NET DECREASE OF CASH FLOW FROM FINANCING ACTIVITIES Total increases of cash flows Total decreases of cash flows Cash and cash equivalents at the beginning of period Increase of cash and cash equivalents Decrease of cash and cash equivalents Cash and cash equivalents at the end of period

22 1 1. Subscribed share capital 2. Capital reserves 3. Reserves from profit 4. Retained earnings or loss carried forward 5. Net profit or loss for the period 6. Revaluation of tangible assets 7. Revaluation of intangible assets 8. Revaluation of available for sale assets 9. Other revaliuation 10. Total equity and reserves (AOP 001 to 009) 11. Foreign exchenge differences ffrom foreign investments 12. Current and deferred taxes 13. Cash flow hedge 14. Change of accounting policies 15. Correction of significant mistakes of prior period 16. Other changes 17.Total increase or decrease of equity (AOP 011 to 016) STATEMENT OF CHANGES IN EQUITY, consolidated period to Position AOP Previous year Current year a. Attributable to majority owners 17 b. Attributable to minority interest

23 Annex 1. Reporting period to Quarterly financial report TFI-POD Tax number (MB): Company registration number (MBS): Personal identification number (OIB): Issuing company: ARENATURIST d.d. Postal code and place PULA Street and house number: Smareglina 3 address: uprava@arenaturist.hr Internet address Municipality/city code and name 359 PULA County code and name Consolidated report: 18 ISTARSKA Number of employees: 480 (period end) NO NKD code: 5510 Companies of the consolidation subject (according to IFRS Seat: MB: Bookkeeping service: Contact person: KALAGAC SANDRA (only surname and name) Telephone: 052/ Telefaks: 052/ address: skalagac@arenaturist.hr Family name and name: REUEL ISRAEL GAVRIEL SLONIM, MILENA PERKOVIĆ (person authorized to represent the company) L.S. (signature of the person authorized to represent the company)

24 Balance Sheet as of Company: ARENATURIST d.d. Position AOP Previous period Current period ASSETS A) RECEIVABELS FOR SUBSCRIBED NOT PAID CAPITAL 001 B) NON-CURRENT ASSETS ( ) I. INTANGIBLE ASSETS (004 do 009) Expenditure for development Concessions, patents, licenses, trademarks, service marks, software and other rights Goodwill Advances for purchase of intangible assets Intangible assets in progress Other intangible assets 009 II. PROPERTY, PLANT AND EQUIPMENT (011 do 019) Land Buildings Plant and equipement Tools, working inventory and transportation assets Biological assets Advances for purchase of tangible assets Tangible assets in progress Other tangible assets Investment in real-estate 019 III. NON-CURRENT FINANCIAL ASSETS (021 do 028) Share in related parties Loans to related parties Participating interests (shares) Loans to companies with participating interest Investments in securities Loans, deposits, etc Other non-current financial assets Equity-accounted investments 028 IV. RECEIVABLES (030 do 032) Receivables from related parties Receivables arising from sales on credit Other receivables 032 V. DEFERRED TAX ASSET C) CURRENT ASSETS ( ) I. INVENTORIES (036 do 042) Raw materials and supplies Production in progress Finished products Merchandise Advances for inventories Long term assets held for sale Biological assets 042 II. RECEIVABLES (044 do 049) Receivables from related parties Receivables from end-customers Receivables from participating parties Receivables from employees and members of the company Receivables from government and other institutions Other receivables III. CURRENT FINANCIAL ASSETS (051 do 057) Share in related parties Loans to related parties Participating interests (shares) Loans to companies with participating interest Investments in securities Loans, deposits, etc Other financial assets 057 IV. CASH AND CASH EQUIVALENTS D) PREPAYMENTS AND ACCRUED INCOME 059 E) TOTAL ASSETS ( ) F) OFF BALANCE SHEET ITEMS 061

25 EQUITY AND LIABILITIES A) ISSUED CAPITAL AND RESERVES ( ) I. SUBSCRIBED SHARE CAPITAL II. CAPITAL RESERVES 064 III.RESERVES FROM PROFIT ( ) Legal reserves Reserve for own shares Treasury shares and shares (deductible items) Statutory reserves Other reserves IV. REVALUATION RESERVES V. RETAINED EARNINGS OR LOSS CARRIED FORWARD ( ) Retained earnings Loss carried forward 074 VI. NET PROFIT OR LOSS FOR THE PERIOD ( ) Net profit for the period Net loss for the period VII. MINORITY INTEREST 078 B) PROVISIONS (080 do 082) Provisions for pensions, severance pay and similar libabilities Provisions for tax liabilities Other provisions C) NON-CURRENT LIABILITIES (084 do 092) Liabilites to related parties Liabilities for loans, deposits, etc Liabilities to banks and other financial institutions Liabilities for advances Trade payables Commitments on securities Liabilities to companies with participating interest Other non-current liabilities Deferred tax liabilities 092 D) CURRENT LIABILITIES (094 do 105) Liabilites to related parties Liabilities for loans, deposits, etc Liabilities to banks and other financial institutions Liabilities for advances Trade payables Commitments on securities Liabilities to companies with participating interest Liabilities to emloyees Taxes, contributions and similar liabilities Liabilities arising from share in the result Liabilities arising from non-current assets held for sale Other current liabilities E) ACCRUED EXPENSES AND DEFERRED INCOME 106 F) TOTAL EQUITY AND LIABILITIES ( ) G) OFF BALANCE SHEET ITEMS 108 ADDITION TO BALANCE SHEET (only for consolidated financial statements) ISSUED CAPITAL AND RESERVES 1. Attributable to majority owners Attributable to minority interest 110

26 Income statement period to Company: ARENATURIST d.d. Position AOP Previous period Previous period Current period Current period Cummulative Quarter Cummulative Quarter I. OPERATING INCOME (112 do 113) Rendering of services Other operating income II. OPERATING COSTS ( ) Change in inventories of work in progress Material expenses (117 do 119) a) Costs of raw materials b) Cost of goods sold c) Other material expenses Employee benefits expenses (121 do 123) a) Net salaries b) Tax and contributions from salary expenses c) Contributions on salary Depreciation and amortisation Other expenses Write down of assets ( ) a) non-current assets (except financial assets) b) current assets (except financial assets) Provisions Other operating costs III. FINANCIAL INCOME (132 do 136) Interest, foreign exchange differences, dividens and similar income from related parties Interest, foreign exchange differences, dividens and similar income from third parties Income from investments in associates and joint ventures Unrealised gains (income) from financial assets Other financial income IV. FINANCIAL EXPENSES (138 do 141) Interest, foreign exchange differences, dividens and similar income from related parties Interest, foreign exchange differences, dividens and similar income from third parties Unrealised losses (expenses) from financial assets Other financial expenses V. SHARE OF PROFIT FROM ASSOCIATED COMPANIES VI. SHARE OF LOSS FROM ASSOCIATED COMPANIES VII. EXTRAORDINARY - OTHER INCOME VIII. EXTRAORDINARY - OTHER EXPENSES IX. TOTAL INCOME ( ) X. TOTAL EXPENSES ( ) XI. PROFIT OR LOSS BEFORE TAXES ( ) Profit before taxes ( ) Loss before taxes ( ) XII. TAXATION XII. PROFIT OR LOSS FOR THE PERIOD ( ) Profit for the period ( ) Loss for the period ( ) ADDITION TO PROFIT AND LOSS ACCOUNT (only for consolidated financial statements) XIV. PROFIT OR LOSS FOR THE PERIOD Attributable to majority owners Attributable to minority interest STATEMENT OF OTHER COMPREHENSIVE INCOME (only for IFRS adopters) I. PROFIT OR LOSS FOR THE PERIOD (=152) II. OTHER COMPREHENSIVE INCOME/LOSS BEFORE TAXES (159 TO 165) Exchange differences from international settlement Changes in revaluation reserves of long-term tangible and intangible assets Profit or loss from re-evaluation of financial assets held for sale Profit or loss from cash flow hedging Profit or loss from hedging of foreign investments Share of other comprehensive income/loss from associatied companies Actuarial gains/losses from defined benefit plans III. TAXATION OF OTHER COMPREHENSIVE INCOME FOR THE PERIOD IV. NET OTHER COMPREHENSIVE INCOME FOR THE PERIOD (158 TO 166) V. COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD ( ) ADDITION TO STATEMENT OF OTHER COMPREHENSIVE INCOME (only for consolidated financial statements) VI. COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD 1. Attributable to majority owners Attributable to minority interest 170