SUNCE HOTELI d d : Fourth quarter, Group and Company

Sunce hoteli d.d., Group and Company

Financial Results

for the period January - December 2022 (unaudited)

Zagreb, 28th February, 2023

CONTENT:
1.	General information	1
2.	Organizational and shareholder structure	6-8
3.	Business results	9-11
4.	Risk management	12
Appendix 1: Financial Statements	13

1. GENERAL INFORMATION

Name

The Company name is SUNCE HOTELI d.d. for tourism and hospitality, travel agency, company registration number (MBS): 080502040, personal identification number (OIB): 06916431329. The Company`s short name is SUNCE HOTELI d.d.

Registered office and legal form

SUNCE HOTELI d.d is joint stock company with registered office in Zagreb, Radnička cesta 43, Republic of Croatia, telephone number: + 385 1 3844 044.

Bluesun Hotels & Resorts

Bluesun Hotels & Resorts is the name under which Sunce hoteli d.d. manage hotels in portfolio.

History and development

Sunce concern was founded by mr. Jako Andabak on October 15, 2004. under the company SUNCE HOTELI d.o.o. During 2005 and 2006, shares were acquired in today's members of the Group: Hoteli Zlatni Rat d.d., Hoteli Brela d.d. and Hoteli Tučepi d.d. In 2006, the Company and the members of the Group entered into an Entrepreneurial Agreement - a business management agreement, based on which the governing body of the Group was defined, aimed at strengthening the efficiency and profitability of the members with the aim of creating a strong and recognizable hotel and tourism brand in the Republic of Croatia, through a joint appearance on the market providing hotel, tourist and hospitality services.

In 2007, the company was transformed into a joint-stock company called SUNCE KONCERN d.d.

The period from 2005 to 2007 within the Group was marked by strong investments in the amount of 50,000,000 euros, on the basis of which the following hotel facilities were completely renovated and upgraded in the period in question: Elaphusa in Bol, Soline and Berulia in Brela, while the hotel facilities Alga and Afrodita in Tučepi were renovated to a greater extent.

MIG Leisure & Real Estate Croatia B.V. in 2008 became a shareholder and strategic partner with a 49.99% share in the share capital and voting rights, while the Andabak family retained majority ownership and management of the company.

In 2010, the share capital was increased by EUR 30,000,000 through shareholder cash payments, which significantly strengthened the balance sheet structure and created the foundations for long-term financial development.

In 2013, a member of the Hoteli Tučepi d.d. Group acquired a business share in company Punta Zlatarac Tučepi d.o.o. which is the owner of the hotel facility Jadran and the associated land.

The year 2016 is marked by a change and focus of the company on the sale of the Group's accommodation capacities through allotment sales, with an increase in the average price of accommodation units. In this regard, long-term allotment contracts were signed with the travel agencies TUI and Thomas Cook for the renovated hotel facilities Jadran in Tučepi and Berulia in Brela for the 2017 season.

In June 2017, MIG Leisure & Real Estate Croatia B.V., by selling its entire ownership stake, completely exits the ownership structure of the company.

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The company issued 444,000 new shares, increasing by 9.9% the total number of shares increased, and HRK 68,8 million of new funds were collected. The collected funds were used for more efficient implementation of the Group's capital investment plan with the aim of renovating accommodation facilities and paying off and/or refinancing part of the debt in order to achieve more favorable financing conditions.

On November 3, 2017, the so-called Mandate Letter with representatives of the European Bank for Reconstruction and Development was signed (EBRD), which initiated the procedure of comprehensive refinancing of the Group's existing financial debt.

On November 10, 2017 the Group reached an agreement with TUI AG to raise their partnership to a higher level, whereby the transaction itself was carried out in two phases. The first phase was the formation of a joint venture company (JV) where TUI AG buys 50% of Punta Zlatarac for the total value of the company (EV) of EUR 31.5 million. Punta Zlatarac is the owner of the TUI BLUE Jadran hotel in Tučepi. The second phase is the establishment of an additional joint management company in which TUI has 51% and Group 49% of ownership.

As the completion phase of the "Joint Venture" transaction with TUI, on November 17, 2017, the Group concluded the purchase of tourist land on the island of Brač with the intention of building up to 3 new hotels. The land is located on the island of Brač (Sutivan municipality), and represents an exceptional location for the development of new tourist facilities. It is a plot of land with an area of 320,000 m2, with direct access to the coast and good infrastructure connections. The hotels will be managed by the Management company (TUI 51%, Sunce 49%), which will also manage all the hotels owned by the JV, i.e. Punta Zlatarac.

In December 2017, the company, a member of the Hoteli Zlatni Rat Group d.d. as a lessee concluded an agreement on the lease of real estate in Supetar, with the company VELARIS d.o.o., Supetar for a period of 5 years. The tourist resort Velaris is located in a very attractive location directly by the sea, in the picturesque bay of Vela Luka, in the western part of Supetar on the island of Brač. It extends to approx. 52,000 m2, where there is Hotel Amor with 4*, Villa Vela Luka with 4* and two pavilions with 3*, with a total capacity of 172 rooms.

On August 10, 2018, the General Assembly of Sunce Koncern d.d. made a decision on the increase of the Company's share capital by a stake in the rights by entering 595,397 ordinary shares of the company HOTEL ALAN d.d. and by issuing 506,788 new ordinary shares. With this decision, the Company's share capital is increased from HRK 488,706,200 by HRK 50,678,800 to HRK 539,385,000.

On August 28, 2018, an agreement on the refinancing of the Group's entire financial debt was signed with the European Bank for Reconstruction and Development (EBRD) as the arranger, and representatives of Erste&Steiermärkische Bank d.d., Privredna banka Zagreb d.d., and Zagrebačka banka d.d. as members of the bank union. The total value of the transaction is EUR 73 million, with all banks participating equally in the stated amount. Although the Credit Agreement was signed on August 28, 2018, the funds were disbursed at the end of the fourth quarter of the same year after the fulfillment of all previous conditions under the Credit Agreement.

Sunce Koncern d.d. on December 19, 2018, submitted a request for the transfer of all shares of the Company from the Regular Market segment to the Official Market of the Zagreb Stock Exchange. Management of the Zagreb Stock Exchange d.d. made a decision to approve the transfer of all 5,393,850 ordinary shares to the Official Market, and the same was implemented on December 27, 2018. 23.09% of shares were distributed to the public, including three companies for the management of mandatory and/or voluntary pension funds, however the Company's intention is to further increase the percentage of shares distributed to the public, in such a way that more than 25% of the total number of shares is distributed to the public, and that to this end, a restructuring process was initiated by optimizing the organizational structure.

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On June 28, 2019, the General Assembly passed a decision to increase the share capital of Sunce Koncern d.d. and issuing new shares in order to implement the merger of the companies Hotel Alan d.d., Hoteli Tučepi d.d., Hoteli Zlatni Rat d.d. and Hoteli Brela d.d. ("Merged Companies") Sunce Koncern d.d. The share capital is increased as a consequence and for the purpose of implementing the merger between the Issuer as the acquiring company and its subsidiaries as the merged companies by issuing 560,735 new ordinary shares with a nominal amount of HRK 100 each, thereby increasing the share capital from the amount of HRK 539,385,000 to the amount of HRK 56,073 .500 kuna on the amount of 595,458,500 kuna.

On December 31, 2019, the merger of the Merged Companies and the increase of the Company's share capital by issuing new ordinary shares were entered in the Court Register of the Commercial Court in Zagreb. At the same time, the change of the Company from SUNCE KONCERN was registered in the Court Register, in SUNCE HOTELI, a joint-stock company for tourism and hospitality and travel agency, i.e. SUNCE HOTELI d.d. as an abbreviated company.

On March 22, 2021, Eagle Hills Zagreb Real Estate d.o.o., based in Zagreb, entered into an Agreement for the purchase of shares from the previous owners and other related persons as sellers. On the basis of the aforementioned contract, a total of 4,151,092 ordinary shares of the company were acquired, which represent 69.71% of the share capital of the Target Company.

Share capital and company shares

Share capital as of 31.12.2022. amounts to HRK 714,480,200.00 and is divided into 7,144,802 ordinary shares, in the name of the nominal amount of HRK 100.00 each, which are kept at the Central Depository and Clearing Company d.d. in dematerialized form under the security code SUKC- R-A and the ISIN code HRSUKCRA0001. The share capital has been paid in full. Number of treasury shares of the Company as of 31.12.2022. is 1,163.

Management Board:

• Shaikh Mubarak Ali Abdulla Hamad Alkhalifa - President of the Management Board
  Supervisory Board:
• Mohamed Ali Rashed Alabbar - Chairman of the Supervisory Board
• Frederick William Howdon Durie - Deputy Chairman of the Supervisory Board
• Ping Low - Member of the Supervisory Board until 12.07.2022
• Ratomir Ivičić - Member of the Supervisory Board
• Rosa Mijailović - Member of the Supervisory Board as of 26.08.2022.

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