Adris grupa d d : Interim financial statements 1Q2021(eng)

ADRIS GRUPA d. d.

Rovinj

ADRIS GRUPA d. d.

INTERIM CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS (NOT AUDITED)

for the period ended 31 March 2021

Content
MANAGEMENT REPORT .........................................................................................................	3
1.	PRINCIPAL ACTIVITY OF THE COMPANY....................................................................................................	4
2.	SIGNIFICANT EVENTS ....................................................................................................................................	4
3.	RESEARCH AND DEVELOPMENT ACTIVITIES ...........................................................................................	5
4.	INFORMATION ON THE ACQUISITION AND RELEASE OF TREASURY SHARES ..................................	5
5.	SUBSIDIARIES ..................................................................................................................................................	6
6.	RISKS AND RISK MANAGEMENT ..................................................................................................................	6
7.	EVENTS AFTER THE END OF THE REPORTING PERIOD..........................................................................	6
A SET OF NON-AUDITED CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS .7
Consolidated and separate statement of comprehensive income (cumulative) ......................................................	8
Consolidated and separate statement of comprehensive income (quarter) ............................................................	9
Consolidated and separate statement of financial position ....................................................................................	10
Consolidated and separate statement of changes in equity ....................................................................................	12
Consolidated and separate statement of cash flows................................................................................................	16
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS ...............	17
1.	GENERAL INFORMATION ............................................................................................................................	17
2.	SIGNIFICANT ACCOUNTING POLICIES......................................................................................................	18
3.	SEASONAL AND CYCLIC CHANGES ............................................................................................................	19
4.	SIGNIFICANT CHANGES IN THE CURRENT REPORTING PERIOD .......................................................	19
5.	INFORMATION ON BUSINESS SEGMENTS...............................................................................................	20
6.	EARNING PER SHARE...................................................................................................................................	21
7.	CAPITALIZED COST OF SALARIES ..............................................................................................................	21
8.	FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE ......................................................................	21
9.	SHARE CAPITAL.............................................................................................................................................	22
10.	DEFERRED TAXES ....................................................................................................................................	22
11.	FINANCIAL LIABILITIES ..........................................................................................................................	22
12.	DIVIDEND PAYMENT DURINGF THE REPORTING PERIOD..............................................................	23
13.	SIGNIFICANT TRANSACTIONS BETWEEN RELATED PARTIES.........................................................	23
14.	EVENTS AFTER THE END OF THE REPORTING PERIOD ...................................................................	23
Declaration by the persons responsible for the preparation of the statements.......................	24

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ADRIS GRUPA d. d.

Rovinj

MANAGEMENT REPORT

for the period ended 31 March 2021

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1. PRINCIPAL ACTIVITY OF THE COMPANY

The principal activity of the company ADRIS GRUPA d. d. (hereinafter: "Adris" or the "Company") is management and investment. The aim of the Company as a corporate centre is to coordinate investment, management, development and operation of the system as a whole.

Adris (hereinafter: the "Group") comprises three strategic business units: tourism, managed by Maistra d. d., manufacture of healthy food managed by Cromaris d. d., and insurance managed by Croatia osiguranje d. d.

2. SIGNIFICANT EVENTS

The coronavirus pandemic that broke out in early 2020 continues into 2021. Due to the third wave of the pandemic underway, cross-border travel of the population was reduced or stopped completely. Partially or completely closed HORECA segment on the key markets exerts an impact on the structure and the level of consumption. Although there is an increasing sense of uncertainty, the vaccination coverage, partially acquired immunity of the population and coming of the warmer season give cause for modest optimism and expected recovery.

In such circumstances, a total revenue generated by Adris grupa in the first quarter of 2021 amounted to HRK

1.06 billion, and is 3% higher if compared to the first quarter of 2020. Revenues from sales of goods and services amounted to HRK 965 million, up 3% compared to last year's revenues. Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) reached HRK 168 million which represents an increase of 8%. Net profit for the first quarter of 2021 amounted to HRK 10.7 million.

Although the coronavirus crisis has hit the tourism, investments and new project preparations have continued

Activities in the Group's tourism business are still reduced due to the ongoing coronavirus pandemic. At this moment the booking shows many people are interested in visiting Rovinj in the peak and late seasons. As a response to the crisis, the Group's tourism business started a number of transformation initiatives in all areas: marketing, sales, operations and supporting functions. Special importance is given to user experience improvement and to revenue management supported by advanced analytics and further development of direct sales channels. Investments planned for this year amount to HRK 163 million. Preparations for the Zagreb Westin and Panorama hotels, and for the Marjan hotel in Split have gone forward. In the first quarter, revenues from sales of goods and services amounted to HRK 41 million which represents a 40% decline. Earnings before interest, tax, depreciation and amortization (EBITDA) amounted to minus HRK 23 million, and EBIT to minus HRK 96 million. Operating profit remained at the last year's level, which is a result of the coronavirus pandemic-related grants and subsidies and of a series of actions taken to assure efficient cost management.

Croatia osiguranje continued its transformation initiatives and digitalization of business which resulted in higher profits in the first quarter

Croatia osiguranje continued to keep its leading position in the Croatian market with the total share of 27.5%. The total gross written premium generated by Croatia osiguranje in Croatia amounted to HRK 840 million, up 1% in comparison with the same period last year. Consolidated gross written premium, including the regional subsidiaries, amounted to HRK 981 million reaching last year's level. The combined operating ratio of the Group Croatia osiguranje, as one of the key indicators of profitability, was 87.7 or by 2.1% more than last year suggesting further cost efficiency improvement.

In the first quarter of 2021, Croatia osiguranje reported a consolidated net profit of HRK 128 million which is an increase of 8%. A number of transformation initiatives launched in 2019 and 2020 improved efficiency in business. Preparations for a new cycle are underway, implementation of which should cause an increase in premium and more effective cost management in the second half of the year. Different experiences and good practices gained through previous transformation program shall be transferred from the headquarters to the regional subsidiaries.

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In the first quarter of 2021, strong support for the introduction of Laqo insurance continued, both in marketing and functional terms. The LaqoPrevent program is one of LAQO insurance products offered by Croatia osiguranje, and is the first fully digital insurance solution in this area. LaqoPrevent promotes safe driving and responsible road behaviour by using an advanced telematics technology solution, available as part of the LAQO application.

In cooperation with Swiss RE, one of the largest reinsurers in the world, Croatia osiguranje also launched the first parametric crop insurance product against a lack of soil moisture (drought). This technologically highly sophisticated product is the most modern product of its kind on the market that uses advanced satellite soil moisture measurement technology, which provides accurate data for insured agricultural land and represents another step in the digitalization of the insurance industry to meet future challenges.

Cromaris achieved a 30% growth in sales volume and a 36% growth in exports

The coronavirus crisis caused a number of logistics challenges in fresh fish and fish product distribution during the first quarter of 2021. The closure of catering establishments on the key markets forced the company to shift its sales toward retail chains.

For the first quarter of 2021 Cromaris recorded sales of 2,638 tonnes of whole fish equivalent, up 30% in comparison with the figures reported for the first three months of last year. The volume of exports rose by 36% primarily due to a strong growth on the Italian and Swiss markets. Export markets still account for a high share of sales - 88% of Cromaris' sales volume, and 86% of its sales revenue. The trend of growth in differentiated products continued and accounted for 44% of revenue from sales in the first quarter. An extremely valuable project of new aquacultured species - greater amberjack and dentex is added to the company's product portfolio. Revenues from sales amounted to HRK 126 million, which represents an increase of 25%. Net profit for the first quarter of 2021 amounted to HRK 9.4 million.

3. RESEARCH AND DEVELOPMENT ACTIVITIES

The Company continually monitors events in its environment and invests in market research, in addition to directing and supporting activities of its subsidiaries with the purpose of achieving organic growth and recognizing business opportunities as well as realizing new acquisitions.

4. INFORMATION ON THE ACQUISITION AND RELEASE OF TREASURY SHARES

From 1 January till 31 March 2021 the Company acquired 2,821 own class ADRS (ADRS-R-A) shares, accounting for 0.0293% of the shares from this class and 0.0172% of the Company's total share capital. During the reporting period, the Company acquired 9,232 own class ADRS2 (ADRS-P-A) shares, accounting for 0.1360% of the shares from this class and 0.0562% of the Company's total share capital.

Detailed information on each individual acquisition transaction was publicly disclosed in accordance with the Companies Act, Capital Market Act and the Rules of the Zagreb Stock Exchange d. d.

At the end of the reporting period, the Company owned a total of 117,731 own class ADRS shares, accounting for 1.22% of the shares from this class, and 546,753 own class ADRS2 shares, accounting for 8.05% of the shares from this class, i.e. total of 664,484 own shares, accounting for 4.05% of the Company's total share capital.

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