HRVATSKE AUTOCESTE d.o.o. Sirolina ulica 4, Zagreb Annual Financial Statements and lndependent Auditors' Report for 2021 Iliis version of the Annual Financial Slatements ls a trans/ation front the original. wllich was prepared in Croatian language. AII possible care has been taken ta ensure that the translation is an accurate representation of the original. However. in all matters of interpretation of inforrnation. views or opinions. the original language versiorr takes precedence over this translation TABLE OF CONTENTS Page Responsibitity for annuat financia[ statements 1 lndependent Auditors' Report 2-7 Statement of comprehensive income I Statement of financial position 9 Statement of changes in equity 10 Statement of cash flows 11 Notes to the financial statements 12-53 ATTACHMENT - Financial reports of the company Hrvatske autoceste 54-56 d.o.o. and the Pubtic Good RESPONSIBILITY FOR THE ANNUAL FINANCIAL STATEMENTS The Management Board of Hrvatske autoceste d.o.o., Zagreb, Širotina4 (,,the Company") is responsible for ensuring that the annuat financiat statements for the year 2021, are prepared in accordance with the Croatian Accounting Act, lnternational Financial Reporting Standards, as determined by the European Commission and published in the Officiat Journal of the EU; and the Roads Act, to give a true and fair view of the financial position, the results of operations, the changes in equity and the cash flows of the Company for that period. After making enquiries, the Management Board reasonably expects the Company to have adequate resources to continue to operate in the foreseeable future. Accordingly, the Management Board prepared the annual financia[ statements using the going concern basis of accounting. ln preparing the annuat financial statements, the Management Board is responsible for: o selection and consistent application of suitabte accounting policies in accordance with the appticable financial reporting framework; r giving reasonable and prudent judgments and estimates; . the annual financiat statements are prepared on the going concern basis unless it is inappropriate to presume so. The Management Board is responsibte for keeping proper accounting records, which disclose with reasonable accuracy at any time the financial position, the resutts of operations, the changes in equity and the cash ftows of the Company and their compliance with the Accounting Act and the lnternational Financial Reporting Standards as determined by the European Commission and pubtished in the Officiat Journal of the EU; and the Roads Act. The Management is atso responsibte for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detecti,on of fraud and other irregutarities. Signed for and behatf of Management Board: ZAGBEB Boris Huzjan, of the 1 Management Board Management rd Hrvatske autoceste d.o.o Širotina utica 4 10 000 Zagreb Repubtic of Croatia 13 June 2022 BDO PKfFact R*vizija INDEPENDENT AUDITORS' REPORT To the Owner of Hrvatske autoceste d.o.o., Zagreb Report on the audit of the annual financial statements Opinion We have audited the annual financiat statements of HRVATSKE AUTocEsTE d.o.o., Zagreb, širotina 4 (the ,,Company") for the year ended 31 December 2021which comprise the Statement of financial position as at 31 December 2021, the Statement of comprehensive income, the Statement of changes in equity and the Statement of cash ftows for the year then ended as wetl as the accompanying Notes to the annuaI financia[ statements, including a summary of significant accounting poticies. ln our opinion, the accompanying annual financial statements, give a true and fair view of the financial position of the Company as at 31 December 2021 and of its financial performance and cash flows for the year then ended in accordance with the lnternational Financial Reporting Standards (lFRSs) as determined by European Commission and published in Officiat Journal of EU; and the Roads Act. Basis for Opinion We conducted our audit in accordance with the lnternational Standards on Auditing (lSAs). Our responsibilities under those standards are further described in our lndependent Auditors' report in the section about auditor's responsibitities for the audit of annual financial reports. We are independent of the Company in accordance with the Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilted our other ethicaI responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained are sufficient and appropriate to provide a basis for our opinion. Emphasis of matter We draw attention to Notes 2.11 b) and 13 to the annual financial statements which explain that the annual financial statements have been prepared in accordance with IFRS with deviations in accordance with IAS 8 item 10 due to specifics described in the Roads Act, which were amended aby the new Amendments to the Roads Act. The annual financial statements f or 2022 witt be prepared in accordance with IFRS without deviations and the opening batance and data of the comparative year witl be revised in accordance with the pubtished amendments to the Roads Act as described in Note 38 to the annual financial statements. Our opinion has not been modified on this issue. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the annual financial statements of the current period and include most significant identified risks of material misstatement due to error or fraud with the highest impact on our audit strategy, on our resources available and the time spent by the engaged audit team. These matters were addressed in the context of our audit of the annual financial statements as a whote, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below as the key audit matters to be communicated in our lndependent Auditors' Report. We have determined that the matters below are key audit matters to be disclosed in our lndependent Auditors' Report. z BDO PKfFact Rcvizija INDEPENDENT AUDITORS' REPORT (continued) Report on the audit of the annualfinancial statements (continued) Key audit matters (continued) Key aur How we addressed key audit matter Litigation and contingent liabilities Our audit procedures retated to this area included, among others: As at 31 December 2021, the Company has provisions for litigation and contingent liabilities. During the - receiving and anatysing lawyers' ordinary course of business of the Company, answers to our written inquiries and potential exposure to litigation may arise. Any discussing certain issues with them stated or pub[ished contingent liabitity or non- - critical review of the assumptions disclosure in the financial statements is inherently used, and assessments related to the uncertain and depends on a number of significant tegal ctaims. This includes an assumptions and judgments. These are potentiatly assessment of the probability of significant amounts for which the determination of adverse outcomes of court proceedings the amount to be disctosed in the financial and the retiabitity of the assessment of statements is, if appticab[e, subject to subjective the related amounts of required assessment. ln addition, the Management Board provisions in accordance with IAS 37 - estimates the future outcomes and amounts of Provisions, Contingent Liabitities and contingent liabitities that may arise as a resutt of Contingent Assets these lawsuits in accordance with IAS 37 - assessing the adequacy of disctosures in Provisions, Contingent Liabitities and Contingent the financial statements, taking into Assets. account the sensitivity and possible Due to the above factors, this area has been the bias in the disclosure of detailed information subject of our increased focus in auditing, and we have considered it a key audit matter. Related publications in the accompanying annual financial statements See Notes 2.15 and 2.16 (Accounting Policies) and Notes 26 and 37. Other .matters The audit of the annual financial statements of the Company for the year ended 31 December 2070 was performed by the auditing companies Audit d.o.o., Crowe Horwath Revizija d.o.o. and FACT revizija d.o.o., Zagreb, which expressed an unmodified opinion on these annuaI financia[ statements in their lndependent Auditor's Report dated '16 June 2021. Other Information in the Annual Report The Management Board of the Company is responsibte for other information. Other information includes information included in the Annual report, but do not inctude the annual financial statements and our lndependent auditors' report on them. Our opinion on the annuaI financial statements does not inctude other information. ln connection with our audit of the annual financiaI statements, it is our responsibility to read the other information and consider whether other information have significant contradictions to annual financial statements, or our knowtedge gained while performing the audit, or otherwise appear to be materially misstated. lf, based on the work we have performed, we conclude that there is material misstatement of other information we are required to report this fact. Regarding the Management Report, we also carried out the procedures required by the Croatian Accounting Act. These procedures include considering: 3 BDO PKfFact Hcvizija INDEPENDENT AUDITORS' REPORT (continued) Report on the audit of the annualfinancial statements (continued) Other lnformation in the Annual Report (continued) a whether the Company's Management Report has been prepared in accordance with accompanying financiaI statements a whether the Company's Management Report has been prepared in accordance with Articte 21 of the Accounting Act; Based on the procedures required to be performed as part of our audit of the annual unconsolidated financial statements and the above procedures, in our opinion: a The information contained in the Company's Management Report for the financial year for which the financial statements have been prepared comply in att significant aspects, with the annual financial statements of the Company presented on pages 8 to 53 on which we expressed our opinion as set out in the Opinion section above; a The Management Report has been prepared, in alt significant aspects, in accordance with the Accounting Act; Furthermore, taking into account the knowtedge and understanding of the Company's operations and the environment in which it operates, and which we acquired during our audit; it is our duty to report whether we have identified material misstatements in the Management Report. ln that sense, we have nothing to report. Responsibilities of the Management and Those Charged with Governance for the annual financial statements The Management is responsibte for the preparation of annual financial statements that give a true and fair view in accordance with IFRS; and for such internal controls as Management determines are necessary to enabte the preparation of annual financial statements that are free from material misstatement, whether due to fraud or error. ln preparing the annual financial statements, the Management Board is responsible for assessing the Company's abitity to continue as a going concern, disctosing, as applicable, matters retated to going concern and using the going concern basis of accounting untess the Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsibte for overseeing the Company's financial reporting process. 4 BDO PKfFact Rcvizija INDEPENDENT AUDITORS' REPORT (continued) Report on the audit of the annual financial statements (continued) Auditors' responsibilities for the audit of the annual financial statements Our objectives are to obtain reasonable assurance about whether the annuaI financiaI statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an lndependent Auditors' report that includes our opinion. Reasonabte assurance is a high levet of assurance but is not a guarantee that an audit conducted in accordance with lSAs will atways detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual financial statements. As part of an audit in accordance with lSAs, we exercise professional judgment and maintain professionaI scepticism throughout the audit. We atso: a ldentify and assess the risks of material misstatement of the annuat financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internaI controt. a Obtain an understanding of internal control retevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal controt. a Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and retated disclosures made by the Management Board. a Conclude on the appropriateness of the Management's Board use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists retated to events or conditions that may cast significant doubt on the Company's abitity to continue as a going concern. lf we conclude that a material uncertainty exists, we are required to draw attention in our lndependent Auditors' report to the related disclosures in the annuaI financiaI statements or, if such disctosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our lndependent Auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern. . Evaluate the overalI presentation, structure and content of the annuaI financiaI statements, inctuding the disclosures, and whether the annual financial statements represent the undertying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with retevant ethical requirements regarding independence, and that we witI communicate with them all relationships and other matters that may reasonably be considered to influence our independence, and where app[icable, related safeguards. 5 BDO PKfFact R*vizija INDEPENDENT AUDITORS' REPORT (continued) Report on the audit of the annual financial statements (continued) Auditors' responsibilities for the audit of the annual financial statements (continued) Among the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the unconsotidated annual financiat statements of the current period and are therefore the key audit matters. We describe these matters in our lndependent Auditors' report unless law or regulation precludes pubtic disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our lndependent Auditors' report because the adverse consequences of doing so would reasonably be expected to outweigh the pubtic interest benefits of such communication. PKF FACT Revizija d.o.o., Zagreb and BDO Croatia d.o.o., Zagreb; are jointly responsible for performing the audit and for the audit opinion, according to the requirements of the Audit Act applicabte in Croatia. Report on other legal requirements Report based on the requirements of Regulation (EU) no.53712014 1. On 29 June 2021, based on proposal of Supervisory Board, the General Assembly of the Company appointed audit companies PKF FACT Revizija d.o.o., Zagreb and BDO Croatia d.o.o., Zagreb as the auditors of the annual financial statements for the year 2021. 2. As of the date of this report, the auditing company PKF FACT revizija d.o.o., Zagreb has been continuously engaged in performing statutory audits of the Company from the audit of the Company's annual financial statements f or 2019 to the audit of, the Company's annuat financial statements for 2021; a total of three years. At the date of this report, the auditing company BDO Croatia d.o.o. is continuousty engaged in performing the [ega[ audit of the Company from the audit of the annual financial statements of the Company f or 202'l to the audit of the annual financial statements of the Company f or 2021, which totals one year. 3. Apart from the issues we have identified in our independent auditor's report as key audit matter within the subtitle Audit report on the annuat financial statements, we have nothing to report on point (c) of Articte 10 of Regulation (EU) no.537/2014. 4. Through our statutory audit of the Company's annual financial statements for 2071, we are able to detect irregutarities, including fraud in accordance with Section 225 Responding to non- compliance with taws and regutations of the IESBA Code, which requires us to consider whether the Company has comptied with laws and regulations that are generally recognized as having a direct effect on determining significant amounts and disclosures in their annual financial statements, as well as other [aws. and regulations that do not have a direct effect on determining significant amounts and disclosures in its annuat financia[ statements, but compliance with which may be critical to the operationaI aspects of the Company's operations, its abitity to continue as a going concern or to avoid significant penalties. Unless we encounter; or become aware of, non-compliance with any of the foregoing laws or regulations that is manifestly insignificant, in our judgment of its content and its impact, financiat or otherwise, to the Company, its stakeholders and the general public, we are required to notify the Company and seek to investigate the case and take appropriate measures to address the irregularities and to prevent the recurrence of those irregularities in the future. lf the Company does not correct the irregularities in the audited annuaI financiat statements that are cumulativety equaI to or greater than the materiatity of the financial statements as a whole as at the date of the audited balance sheet, we are required to modify our opinion in the independent auditor's report. 6 BDO PKfFect Revizija INDEPENDENT AUDITORS' REPORT (continued) Report on other legal requirements (continued) Report based on the requirements of Regulation (EU) no. 537/2014 (continued) ln the audit of the annual financial statements of the Company for 2021, we determined the materiatity for the financial statements as a whote in the amount of HRK 86,020,175; which represents approximately 0.2% of the net carrying value of property, ptant and equipment as at 31 December 7021; f or the most part relating to the value of motorways. 5. Our audit opinion is consistent with the supptementary report for the Company's audit committee drawn up in accordance with the provisions of Article 11 of Regutation (EU) no.53712014. 6. During the period between the initial date of the audited annual financiat statements of the Company for 2021 and the date of this report, none of the designated audit firms provided prohibited non-audit services and did not provide services for designing and imptementing internal control or risk management procedures related to preparing and/or controlling financial information or designing and implementing technological systems for financiaI information, and the audit companies have maintained their independence from the Company in performing the audit 7. The non-financial report on the Company's corporate social responsibility for 202'l was prepared in accordance with the provisions of the Accounting Act (OG 78115,134/15,120116,116/18 and 47 120) and forms an integral part of the Company's Annual Report f or 2021. Accordingly, the non- financial report witt be pubtished as an integral part of the Annual Report. Report based on the requirements of the Accounting Act 1. ln our opinion, based on the work performed during the audit, the information in the Company's management report for 2021 is harmonized with the attached annual financial statements of the Company for 2021. 2. ln our opinion, based on the work performed during the audit, the Company's Management Report for 2071 has been prepared in accordance with the Accounting Act. 3. Based on the knowledge and understanding of the Company's operations and its environment acquired during the audit, we did not establish that there are significant misstatements in the Company's Management Report. The partners engaged in the audit of the annua[ financial statements of the Company f or 2021, which results in this lndependent Auditors' Report, are the certified auditor lrena Kovačićfor PKF FACT Revizija d.o.o. and certified auditor Vtatka Rukavina for BDO Croatia d.o.o. Zagreb, 13 June2022 PKF FACT Revizija d.o.o BDO Croatia d.o.o. Zadarska 80 Radnička cesta 180 10000 Zagreb '10000 Zagreb Danieta šunjić signatures, please refer rana Stipic President of the Management Board the originat Croatian ber of the Management Board report, which ls lrena Kovačić Vtatka Rukavina Certified Auditor Certified Auditor 7 Hrvatske autoceste d.o.o., Zagreb STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 December 2021 POSTTTON Nofe 2021 2020 HRK'OOO HRK'OOO OPERATING INCOME Sates revenue 3. z,3g4,gg7 1,548,999 Other operating income J. 58,630 48,1 30 Total operating income 2,443,617 1,597,129 OPERATING EXPENSES Materiat expenses 4. (251,322) (235,601 ) Employee benefits 5. (455,386) (448,020) Depreciation 6. ('t,238,236) (783,192) Other expenses 7. (83,999) (84,726) Value adjustments 8. (270) (2,212) Provisions 9. (19,81 5) (2,196) Other operating expenses 10. (84,126) 898 Total operating expenses (2,'133,1541 (1,597,845) oPERATTNG PROFTT/ (LOSS) 310,463 (7161 FINANCIAL INCOME 11. 8,137 11,152 FINANCIAL EXPENSES 12. (10,368) (10,436) (LOSS)/PROFTT FROi{ FtNANCIAL ACTtVtTtES (2,231) 716 TOTAL INCOME 2,451 ,754 1,608,281 TOTAL EXPENSES (2,143,522) (1,608,281 ) RESULT BEFORE TAX 308,232 0 Profit tax 13. 55,504 10,893 PROFIT FOR THE PERIOD z5z,729 10 893 Other comprehensive income before tax 0 0 COMPREHENSIVE PROFIT FOR THE PERIOD 14. 252,729 10,893 The accompanying notes 1 to 39 below form an integral part of these financial statements. 8 Hrvatske autoceste d.o.o., Zagreb STATEMENT OF FINANCIL POSITION as of 31 December 2021 POSITION Nofe 31 Dec 202'1 31 Dec 2020 HRK'OOO HRK'OOO ASSETS Fixed assets lntangibte assets 15. 21,259 19,381 Property, plant and equipment 16. 43,005,466 41,927,650 Fixed financial assets 17. 26,359 26,359 Receivabtes 2,120 31 Deferred tax assets 1 90s 1 0,893 Total fixed assets 43,057,1O9 41,994,314 Current assets lnventories 18. 40,552 39,164 Trade receivabtes 19. 46,767 48,972 Receivabtes from employees and members-entrepreneurs 253 263 Receivables from the state and other institutions 20. 233,832 181,344 Other receivables 21. '1,039 831 Current financial assets 22. 49,405 9,448 Cash in the bank and the cash register 23. 1,137,660 889,825 Deferred expenses and accrued income 24. 81,213 90,437 Total current assets 1,59O,72O 1,260,294 TOTAL ASSETS 44,647,829 43,244,598 EQUITY AND LIABILITIES Equity 25 Share capital 131,140 131,140 Pubtic capitat - Pubtic capitat under management 19,077,368 19,077,368 - Pubtic capital from the fuel charge 20,846,480 20,320,429 - Pubtic capitat from other sources of financing (21,315,445) (22,741,068',) Legal reserves s68 568 Retained earnings 15,362 15,362 Profit for the current year 252,729 10,993 Total equity 19,008,202 16,914,692 Provisions 26. 62,312 75,732 Long-term liabilities 27. 22,632,838 23,958,17O Short-term liabilities Liabitities for loans, deposits and simitar 28. 34,782 28,244 Liabitities to banks and other financial institutions 29. 1 ,580,580 1,210,189 Liabitities for advances received 255 173 Trade payables 30. 139,092 154,476 Liabitities to employees 31. 33,587 34,340 Liabilities for taxes, contributions and similar benefits 32. 107,112 58,654 Other short-term tiabitities 716 758 Accrued expenses and deferred income 33 I ,048,353 909,170 Total short-term liabilities 2,944,477 2,396,004 TOTAL EQUITY AND LIABILITIES 44,647,829 43,244,598 The accompanying notes 1 to 39 below form an integral part of these financial statements. 9 Hrvatske autoceste d.o.o., Zagreb STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2021 Public Pubtic Pubtic capitat Profit/ (loss) Share capitat - capitat - - other Retained for the POStTtON capital management fuel fees sources Reserves earnings current year TOTAL HRK'OOO HRK'OOO HRK'OOO HRK'OOO HRK'OOO HRK'OOO HRK'OOO HRK'OOO Balance at 1 131 140 19 1 362 544 1 Profit allocation (398,544) Pubtic capital from the fuel charge 473,050 473,050 Public capital - collection of guarantees 4,067 4,067 Pubtic capitat - interest on deposits 9 9 Public capital - co-financing of the EU project'Crocodile lll 845 845 Pubtic capitat - positive exchange rate differences 494,345 494,345 Pubtic capitat - negative exchange rate differences (750,683) (750,683) Pubtic capitat - financing costs (456,123) (456,123\ Pubtic capitat - impairment of public property out of use (16,071) (16,071\ Pubtic capitat - impairment of pubtic property under concession (99,490) (99,490) Pubtic capitat - covering part of depreciation (107,',t60) (107,160) Public capital - capital of the merged company (505,344) (505,344) Profit for the current 10 Balance at 692 Profit allocation 10,893 Public capital from the fuel charge 526,051 526,051 Public capital - co[ection of guarantees 2ZO 220 Public capital - interest on deposits 4 4 Public capital - revenues from depreciation of shares'JD ARZ 31 ,524 31,524 Pubtic capitat - revenues from the management of JD-ARZ expropriation 423 423 Pubtic capital. - positive exchange rate differences 358,912 358,912 Pubtic capitat - negative exchange rate differences (293,995) (293,995\ Pubtic capitat - financing costs (481,929) (481,929) (58,431 ) (58,431 ) Pubtic capitat - costs of transferred facitities JD (3,460) (3,460) Pubtic capitat - impairment of pubtic property out of use Pubtic capitat - co-financing of Svil.aj bridge 52,796 52,796 Pubtic capitat - impairment of pubtic property under concession (30,672) (30,672\ Public capita[ - recategorization 1,839,338 I,939,338 Profit for the current 729 729 Balance at 25 1 The accompanying notes 1 to 39 below form an integral part of these financial statements 't0 Hrvatske autoceste d.o.o., Zagreb STATEMENT OF CASH FLOWS for the year ended 31 December 2021 POStTtON 2021 2020 HRK'OOO HRK'OOO Operating activities Resutt before tax 308,232 Depreciation and impairment of public goods 1,238,236 1,005,913 Other changes in the public good 1,940,782 (375,525) Changes in tax assets 8,988 Net exchange rate differences 7,041 9,727 Expenses from provisions 19,81 5 2,196 Vatue adjustments of current assets 270 2,212 Proceeds from the sale of property 1,298 685 lnterest income (1,096) lnterest expenses 1 0,368 Change in inventory (1,388) 3,200 Change in trade receivabtes 1 ,396 57,930 Change in receivables from employees and members - entrepreneurs 11 340 Change in receivabtes from the state and other institutions (47,867) (46,174) Change in other receivables (207) 790 Change in deferred expenses and accrued income 9,224 (3,474l' Change in provisions (33,236) (9,673) Change in liabitities for advances 82 (40) Change in trade payabtes (1 5,384) (83,737) Change in tiabitity to employees (754) 4,976 Change in tiabitities for taxes and contributions 46,835 (13,'t32) Change in other current tiabitities (3e) 583 Change in deferred income and accrued expenses 139,181 196,945 lnterest paid (1 0,368) (10,436) lnterest charged '1,096 693 lncome tax - paid (820) (27,818) Cash flow from operating activities 3,621 ,69g 716,182 lnvesting activities Receipts Receipts from collection of fixed receivables 2,198 Receipts from financiaI assets 637 221,192 Receipts from mergers 301,983 Expenditures lnvesting in financial assets (39,957) (2,836) Expenditures for fixed receivables (2,089)) Acquisition of tangibte fixed assets (2,374,891) (358,397) Acquisition of fixed intangibte assets (8,523 ) (1 5,459) Cash flow from investing activities (2,425,4601 148,681 Financing activities Expenditures Loan repayment (948,403) (416,477) Cash flow from financing activities (948,403) (416,477') Net cash flow 247,835 448,387 CASH AT THE BEGINNING OF THE YEAR 889 825 441,438 CASH AT THE END OF THE YEAR 1,137,660 889,825 The accompanying notes 1 to 39 below form an integral part of these financiat statements. 11 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2021 1. GENERALINFOR,MATION 1.1 Legal framework and activities By the decision Tt-0112180-2 as of I 1 Aprit 2001, the company Hrvatske autoceste d.o.o. Zagreb, Vončinina 3 (''the Company'') was registered at the Commercial Court in Zagreb. The Company was established on the basis of the Decision on the division and transformation of the Croatian Road Administration into the companies Hrvatske autoceste d.o.o. Zagreb and Hrvatske ceste d.o.o. Zagreb issued by the Repubtic of Croatia and the Statement on the Establishment of the Company dated 9 Aprit 2001. Subscribed capital amounted to HRK 102,071 thousand. The Repubtic of Croatia is the sote founder of the Company. Since the subscribed capital was determined based on the partition batance sheet as at 11 Aprit 200'1, the Company made corrections of the opening balance during 2001 and 2003, which increased subscribed capital by HRK 29,069 thousand. The difference in the amount of HRK 29,069 thousand was registered at the Commercial Court in Zagreb pursuant to Decision Tt-04/7025- 3 dated 16 Juty 2004. After the increase, the subscribed capitat amounts to HRK 131,140 thousand. Activities: . Designing and procuring of Location and Buitding Permits and certificate of occupancy for motorways, . Construction of motorways and road facilities with cotlection of road to[[s on state roads, . Maintenance of motorways and road facitities with collection of road totts on other state roads, . Other tasks of maintenance of motorways and road facilities with road to[[ coltection on other state roads and other. 1.2 Operating and financial restructuring of the roads sector ln early 2017, the Croatian Government adopted a Decision on the Business and Financial Restructuring of the Roads Sector. This decision aims to enabte the road sector reform, strengthen its supervision and ptanning for the sector, increase operational efficiency and improve the sector's. The main restructuring elements are: . managing the road sector o planning, financing and investments implementation in the road sector . managing companies and their operating The planned measures of managing roads sector refer to the merger of Hrvatske autoceste održavanje i naplata cestarine d.o.o. and the Company. Pursuant to the Decision of the Government of the Repubtic of Croatia on the Acceptance of Business andFinancialRestructuringof theRoadSectorldas:022-03117-04/77Ur.No.:50301-25 /25-17-4of 16 March 2017, point a)Management of the road sector section iv) Reorganization of the companies in the motorway sector and Decision of the General Assembly of Hrvatske autoceste d.o.o. No.4/17 of 12 Aprit 2017, the procedure of merging the company HAC ONC d.o.o into the Company was completed. Pursuant to the Merger Agreement of 13 November 2017 and the Decision of the General Assembly of the Company and the General Assembly of HAC-ONC d.o.o. from the 13 November 2017, on 1 December Commercial Court in Zagreb recorded the merger in the court register. Pursuant 2017 , the to the decision of the Government of the Repubtic of Croatia on initiating the procedure for termination of the concession granted to the company Autocesta Rijeka-Zagreb d.d. and merger of the company Autocesta Rijeka-Zagreb d.d. to the company Hrvatske autoceste d.o.o. (Officiat Gazette, No. 61/20), merged the company Autocesta Rijeka-Zagreb d.d. as of 31. December 2020. The Commercial Court in Zagreb entered the merger in the court register on the specified date. 17 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 1.3 Employees As at 31 December 202'1, the Company had 2,678 emptoyees (2,688 emptoyees as at 31 December Z0Z0). The employee structure is shown as follows: Structure 31 Dec 2021 31 Dec 2020 PhD/Master's degree 18 19 University degree 313 283 Two-year post-secondary diptoma 322 307 Secondary schooI certificate 1,572 1 ,588 Skitted workers 381 421 Unskitted workers 70 70 TOTAL 2,676 2,688 1.4 Governing bodies The Company's governing bodies are the Assembly, Supervisory Board and Management Board. The Republic of Croatia, as the founder, exercises its rights through the Government of the Republic of Croatia. Pursuant to the decision on representing the Croatian Government in the Assembty of Hrvatske autoceste d.o.o. dated 8 November 2004, the Minister (Ministry of Maritime, Transport and lnfrastructure) represents the Croatian Government in the Company's Assembly. The Supervisory Board consists of 5 members, 4 of which are elected by the Assembly: one at the proposal of the Ministry of Maritime Affairs, Transport and lnfrastructure; Ministry of Environmental and Nature Protection, Ministry of Construction and Physical Planning; Ministry of Finance and Ministry of Economy white the fifth member is elected by the emptoyees. Members' mandate is 4 years Supervisory Board Branimir Jerneić - Member from 23 November 20'l7, President Nino Vela - Member from 31 May 2016 to 31 May 2020, from 16 June 2020 to 16 October 2020 and from 17 October 2020, Deputy President Darko Kasap - Member from 31 May 2016 to 31 May 2020, from 16 June 2020 to 16 October 2020 and from 17 October 2020, Member Ladislav Turčinović- Member from 31 May 2016 to 31 May 2020, from 16 June 2020 to 16 october 2020 and from 17 October 2020, Member AnđelkoKasunić - Member from 04 May 2018 lvlanagement Boord Boris Huzjan - President of the management Board since 13 June 2018 Stjepan Baranašić - Member of the Management Board since 13 June 2018 13 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 Z. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of key accounting poticies is set out below. 2,1 Statement of compliance and basis of presentation /i/ Annuat financiat statements of the Company for 2021 are prepared in accordance with the lnternational financial reporting standards ("lFRSs") determined by the European Commission and pubtished in the Officiat Journal of the EU and Roads Act. Financial statements of the Company for 2019 are also in accordance with the Accounting Act (OG No 78l15, 12O/16, 42120, 47 l10l referring to IFRS and determined by the European Union and pubtished in the Officiat Journal of the EU. Annual financial statements have been prepared using the basic accounting assumption of the transaction in which the effects of transactions are recognized when they occur and reported in financial statements for the period to which they relate and with the application of fundamental accounting assumption of going concern. The Company's financiaI statements are prepared in Croatian Kuna (HRK) as the Company's measuring and reporting currency. Financial statements are presented in HRK '000. As on 31 December 2021 the exchange rate of 1 USD and 1 EUR amounted to HRK 6.64 and HRK 7.52 (31 December 2020: HRK 6.14 and HRK 7.54). On8Juty201l newRoadsActcameinforce(OG84111,22113,54/13,148113,92-114,110/19,144/211 in which Articles 94, 95 and 96 define roads as assets belonging to the Republic of Croatia which is kept in separate business records of the company which manages roads. These assets of the republic of Croatia are presented in these financial statements as pubtic capital, as prescribed by taw; the accounting approach to the recognition of certain operating events is the following: the application of the capitaI approach as defined by enacting clause. The capital approach includes keeping records of certain operating events in the foltowing way: . Funds from the annuat fees for the use of pubtic roads, user charges and fees to finance the construction and maintenance of pubtic roads by which the Repubtic of Croatia finances the construction, maintenance and other management services of pubtic roads, constitute the Croatian property (public capital), which is recorded separatety in the ledgers of [ega[ entity that manages pubtic road. . A legal entity that manages public roads includes depreciation of public roads managed in its operating expenses. Part of the depreciation that is not covered by own income is accounted at the expense of pubtic capital. . Pubtic capital also includes income based on foreign exchange differences, interest and other income generated on the basis of money management that makes the pubtic capitat and public capitaI is reduced by interest and other fees associated with financing the construction and maintenance of public roads and for foreign exchange losses. . The difference between own income and expenditures realized in fiscal year sha[[ be compensated at the expense of pubtic capital in accordance with the approved business plan of the Company. r Fee for financing the construction and maintenance of pubtic roads, paid by producers and importers of petroleum products and the competent state administration body for inventories, is paid into the Company's account and represents the capital used by the Republic of Croatia to finance the construction and maintenance of pubtic roads and the recapitatization of the Company, in accordance with the program . Public capital is increased by the profit realized by the Company and the Republic of Croatia is the onty member of the Company. . Funds collected from fees to fund construction and maintenance of public roads, paid by manufacturers and importers of petroleum products and the competent government authority for the department stores, are used for the purposes in accordance with annual plans for construction and maintenance of motorways, which, with the consent of the Government, is prepared by the Company 14 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 2.2 Adoption of new and revised lnternational Financial Reporting Standards ("!FRS") and lnterpretations First application of new amendments to existing stondords in force for the current reporting period ln the current reporting period, the foltowing amendments to existing standards pubtished by the lnternational Accounting Standards Board ("|ASB") and adopted by the European Union are in force COVID-19 - Concessions after 30 June 2021 (Amendments to IFRS '16) - extended period of application of the exemption unti[ 30 June 2022 (effective for annual periods beginning on or after I April 2021) Reference interest rate reform - Phase 2 introduces amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 and is not mandatory until annual periods beginning on or after 1 January 2021. The adoption of these amendments to existing standards did not lead to significant changes in the Company's financiaI statements. Standords and amendments to existing standards published by the IASB and adopted in the European Union, but not yet in force At the date of approvaI of these financiaI statements, the fotlowing amendments to existing standards issued by the IASB and adopted by the European Union have been issued but are not effective: Annual improvements to IFRS 2018-2020 - effective for annual periods beginning on or after 1 January 2022) IAS 37 Provisions, Contingent Liabitities and Contingent Assets (Amendment - Harmful Contracts - Contract Execution Costs): the amendments define which costs shoutd be inctuded in an entity's assessment of the harmfulness of a contract (effective for annual periods beginning on or after 1 January 2022) IAS 16 Property, Plant and Equipment (Amendment - Revenue before intended use): the amendment prohibits a reduction in acquisition costs for receipts from the sale of products produced by bringing plant and equipment into serviceable condition for its intended use. lnstead of the current practice, the entity witt atso recognize income and expenses generated by triat operation through the income statement (effective for annual periods beginning on or after 'l January 2022) IFRS 3 "Business Combinations" - link to the conceptual reporting framework (effective for annual periods beginning on or after 'l January 2022) IFRS currently adopted in the European Union do not differ significantly from the regulations adopted by the lnternational Accounting Standards Board (IASB), except for the fottowing new standards and amendments to existing standards, the adoption of which the European Union on 13 June 7027 has not yet decided on (effective dates tisted below refer to IFRSs issued by IASB): IFRS 17 - lnsurance Contracts IAS 1 Presentation of Financial Statements (Amendment - Classification of Liabilities in the Short and Long Term) IAS 1 Presentation of Financial Statements and IFRS Statement of Practice 2 (Amendment - Disclosure of Accounting Poticies) IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (Amendment - Definition of Accounting Estimates) 15 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 2.2 Adoption of new and revised lnternational Financial Reporting Standards ("IFRS") and lnterpretations - continued New standards and omendments to existing standords published by the IASB but not yet adopted in the European Union - continued IAS 12 lncome Taxes (Amendment - Deferred Tax on Assets and Liabitities Arising from a Single Transaction The above changes are effective for annual periods beginning on or after 1 January 2022. The Company expects that the adoption of these new standards and amendments to existing standards wi[[ not lead to significant changes in the Company's financial statements in the period of first application of the standard 2.3 Key estimates and uncertainties ln preparing financial statements, it is necessary to appty certain estimates which have an inftuence on the Company and retated companies' assets and tiabitities, revenues and expenses as wetl as disclosure of the Company's contingent liabilities. Future events and their effects can't be predicted with certainty; therefore actual results could differ from those estimated. The estimates used in preparing the financiat statements are subject to change as new events occur, additional experience is gained, additional information and insights obtained and if there are changes in the environment in which the Company operates. Useful life of property, plant, equipment and intangible assets Determining the useful life of an asset is based on historical experience with similar assets, as we[[ as projected changes in the economic environment and industry-specific factors. The adequacy of the estimated useful lives is reviewed annually, or whenever there is an indication of significant changes in assumptions. We believe that this is an important accounting estimate given the significant share of depreciable assets in total assets, and the impact of significant changes in these assumptions coutd have a materia[ effect on the Company's financial position and results of operations. lmpairment of inventories lnventories are measured at cost. ln addition, at the end of each year, inventories are reduced (due to impairment, impairment or other justifiable reasons, at the suggestion of the persons in charge of inventories), in order to measure inventories at cost or net realizable vatue at the balance sheet date, whichever is lower. Consequences of certain litigation The Company is a party to numerous lawsuits and proceedings arising in the ordinary course of business. Management uses estimation when the most likely consequences of these activities have been assessed and provisions have been recognized on a consistent basis (Note 37). Actuarial estimates used to calculate employee benefits and allowances The Company made fair value estimates as part of the preparation of the annual financiaI statements, which are exptained in more detait in Note 26. 16 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 2.4 Business mergers !n2017, the Company carried out the merger procedure of the subsidiary HAC ONC d.o.o. and in 2020 the company Autocesta Rijeka-Zagreb d.d. ln accordance with the legal framework in the Repubtic of Croatia, these mergers were made without increasing the subscribed capital (nominal capitat) of HAC. The total effect (net assets) is recognized within the Company's equity 2.5 Reporting currency Financial statements of the Company are stated in Croatian Kuna as measuring and reporting currency. Financial statements are presented in the thousands of HRK. 2.6 Revenue recognition and measurement a) Operating income Revenue consists of the fair value of the received consideration or receivabtes for the goods or services sold during the Company's business operations. Revenues are stated in amounts deducted for vatue added tax, estimated returns, rebates and discounts. The Company recognizes revenue when the amount of revenue can be measured retiabty when the Company has future economic benefits and when specific criteria for all the Company's activities are met. Sates revenue is recognized when the customer acquires control over the product, i.e. when the Company makes deliveries of goods to the buyer and when there is no outstanding obligation that coutd affect the acceptance of the product by the buyer. The detivery is done when the goods are shipped to a specific location, the risk of loss is transferred to the buyer and when the buyer accepts the products according to the contracted terms. The products are sotd at discounts and fees for realized traffic, and buyers are entitted to refund of defective goods. Sales revenues are stated on the basis of the sale price, reduced by discounts and fees for turnover and returns. ln accordance with the new IFRS 15, the Company appties a five-step model for recognizing a contract with customer: 1) ldentification of the contract with the customer 2) ldentification of the separate performance obtigations in the contract 3) Determination of the transaction price 4) Atlocation of the transaction price to the separate performance obligations 5) Recognition of revenue as each performance obtigation is satisfied Revenue is recognized for each separate contract detivery obtigation in the amount of the transaction price. The transaction price is the amount of contractual remuneration that the Company expects to be entitled to in return for the transfer of the promised goods to the buyer. 17 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 2.6 Revenue recognition and measurement - continued a) Operating income - continued Revenue from SaIe of Services Provided that the amount of revenue can be measured reliably and if the Company is tikely to receive a fee, the service revenues are recognized in the period in which they are provided. The service contract revenue is recognized in relation to the tevet of performance of the contract. The levels of performance of the contract are as fo[[ows: . th€ services performed are recognized in retation to the [eve[ of execution, determined as a percentage of the time spent over the balance sheet date, in relation to the total estimated time of service; . maintenance fees inctuded in the price of the goods sotd are recognized in proportion to the share in the total cost of maintaining the sold product, taking into account the number of previous maintenance services for the previously sold goods; and . contract revenue based on time and material expense is recognized at agreed prices in the period in which the hours worked and in which direct costs were incurred. Revenues from toll collection Revenues from toll collection, in accordance with the Roads Act, are in a broader sense sources of financing for public roads and are coltected from users of motorways and other toll facitities increased by vatue added tax. The Company's operating expenses are financed from toll revenues, and the depreciation of the Public Good, managed by the Company, is covered in the amount of the excess to[[ revenues over expenditures. Tolts are charged in accordance with the Decision on determining the amount of tott and tolt collection system for the use of motorways of 17 May 2018 and the Decision on incentive models of to[[ payment and toll payment in subscription of 27 January 2015, to which the Minister of Maritime Affairs, Transport and infrastructure gave the consent referred to in Articte 87, paragraph 2 of the Roads Act. lncome from land use fees Revenues from fees for land use and fees for performing ancitlary activities were generated by entrusting the use of road land and ancillary service facilities to users for the purpose of performing anciltary activities on road land in accordance with Art. 73 of the Roads Act (OG 84111, ZZl13, 54/13, 148113,92/14, 110119 and 144/21). Conditions and manner of use of road [and, conditions and procedure for entrusting the use of road land and ancillary service facilities, and rights and obtigations in performing ancillary activities on road land are determined by the Ordinance on the use of road tand and ancillary activities on public roads (OG 78/ 14, 43120) as we[[ as criteria for calcutating fees for their use and performing anciltary activities on road land. Article 25 of the Roads Act prescribes the establishment of easements and construction rights on pubtic roads for the construction of communal, water management and energy buitdings as we[[ as electronic communications buitdings with the obtigation to enter into a contract with the public road manager. For this type of installation, which was carried out before the entry into force of the Roads Act, contracts for the use of road land were conctuded Article 86, paragraphs 2 and 3 of the Roads Act prescribes exemption from the obtigation to pay a fee for the right of easement/construction for installations that are exctusively or predominantly owned by the Republic of Croatia or [oca[ and regional self-government units or owned by easements. buitding rights that are predominantly owned by the Repubtic of Croatia or local and regional self- government units. For other easements of construction, the obligation to pay a fee for the right of buitding easement is prescribed in accordance with the Decision on the amount of the fee for establishing the right of easement and the right to build on a pubtic road (OG 87114) 18 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 2.6 Revenue recognition and measurement - continued a) Operating income - continued Revenues from the provision of ARZ services Revenues from the provision of services to ARZ arose from the service of motorway maintenance, tott collection and traffic management, which was regulated by the Agreement on the provision of regutar motorway maintenance, tollcollection and traffic management services. Revenues from the provision of services to the merged company ARZ are stated for the entire year 2020 until the merger in the form of an annuat ftat fee. Revenues from EU grants Revenues from EU grants are reported in accordance with the realization of etigibte costs in the period when they are recognized directly in favour of pubtic goods revenues. b) Financialincome lnterest income is derecognised on a timely basis, on the basis of unpaid principat and at the applicabte effective interest rate, which accuratety discounts estimated future cash receipts through the expected tife of the financiat instrument or the net book amount of financiat assets. lnterest income is recognized as a financial income in the statement of comprehensive income. 2.7 Leases A[[ leases arecalculated by recognizing rights-of-use assets and lease liabilities, except for low vatue leases and leases when lease term ends within a period of 12 months or less from the date of first application. Right-of-use assets are presented separately in the Statement of financia[ position. Right-of-use assets are initially measured at the amount of the lease tiabitity, less any lease incentives received and increased by: - att tease payments made on or before the lease start date; - att initial direct costs; and - the amount of the provision recognized in the event that the Company contractualty bears the costs of dismantting, removing or rebuilding the site. The right-of-use asset is reduced by the accumulated depreciation calculated on a straight-line basis over the term of the lease, or the remaining economic tife of the asset, if it is considered to be shorter than the lease term. The lease tiabitity is calculated at the present vatue of the contractual future payments discounted using incremental borrowing rate of the Company on 1 January 2019. The Company's incremental borrowing rate is the rate at which, in the simitar period and on the basis of a simitar guarantee, the company would pay for the borrowing of funds necessary to acquire assets with value similar to the vatue of right-of-use assets in a simitar economic environment, under comparabte terms and conditions. At the date of initial recognition, the carrying amount of the lease liability includes: - amounts expected to be paid by the [essee under residual vatue guarantees; - the cost of executing the purchase option if it is certain that the lessee wi[[ use that option; and - payment of fines for termination of the lease if the lease period reflects that the lessee wi[[ take the opportunity to terminate the lease After the initiat measurement, the lease tiability increases to reftect interest on lease liabitities and decreases to reflect lease payments made. The lease tiabitity is subsequently measured when there is a change in future lease payments resulting from a change in the index or rate, or when there is a change in the estimate of the term of any lease 19 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 2.8 Recognition and measurement of expenses a) Operating expenses Expenses are recognized based on the direct connection between occurred expenses and certain realized items of income (Matching principle). Based on the mentioned, operating expenses represent atl expenses in relation to invoiced income from providing services. Recognition of expenses is deferred to further accounting periods if the reatization of revenues is expected in the next several accounting periods. Operating expenses include the costs of materials, small toots and services, maintenance services, the costs of gross wages and sataries, depreciation of own assets, depreciation of public goods (roads) and other operating expenses covered directty by operating income. b) Maintenance expenses Expenses for repairs or maintenance of property, plant and equipment, resutting from recovery or maintenance of future economic benefits that can be expected from the originalty estimated useful tife of assets. These costs are recognized as an expense when occurred. c) Gross salaries and wages Employee benefits inctude wages, salaries and social security contributions, fees for use of annual teave and sick leave, participation in profits and bonuses and monetary benefits of current employees, and benefits after termination of employment, such as severance and life insurance, and are recorded as expenses as incurred regardless of whether the current obligation is settled. A[[ pertaining tax tevies directty connected to accrued salaries and compensations are included in employees' expenses and represent their constituent part. Reimbursement to emptoyees in accordance with cottective contracts, are inctuded in employees expenses and are their constituent. lf the period of certain right is different than the payment period and longer than one year (non-current), tiabitities are discounted by the average interest rate on government bonds of similar maturities. d) Depreciation lntangible assets, property, plant and equipment with definite life are depreciated/amortized. The amount of investment in fixed assets shatt be compensated by the depreciation/amortization according to agreed or appropriate period of use of individual right, respectively property, plant and equipment. When assessing the depreciab[e amount, the expected residuaI value at the end of useful life is determined. lf this is insignificant compared to the total value of assets, it is not respected when calculating depreciation. The expected residual value of assets retated to the road is usualty zero. Estimated useful life is estimated for each asset item separately and is dependent on the technical characteristics of the asset, the speed of its economic obsolescence, as wetl as the expected use. Typicatly, the expected useful lives of assets are USEFUL LIFE z0z1 2020 DESCRIPTION (years) (years) Buildings 40 40 Semi-motorways and motorways - upper layer 33 33 Equipment 4-10 4-10 lntangible assets 5 5 z0 Hrvatske autoceste d.o.o.,.Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 2.8 Recognition and measurement of expenses - continued d) Depreciation - continued Depreciation/amortization is catculated using a method which corresponds to the realization of economic benefits from assets. For road and the property it is expected to be equally used throughout the year, therefore, a linear method of depreciation of these assets is apptied. Depreciation is calcutated individualty for atl assets. Depreciation/amortization begins to accrue after the month in which the use of assets started. Depreciation of public good (roads) and accompanying equipment, in part which may be covered by own income, is credited to the expenses of the period, while the difference of the part of depreciation that is not covered witl be covered by debiting pubtic capitat. e) Financial expenses lnterest expenses resulting from business relations payables are stated within financial expenses. lnterest is recognized as expense in the period in which it occurs and is stated as accruals until the batance sheet date. The conversion of monetary items (cash and receivables and tiabitities) denominated in foreign currencies in HRK is done at the spot rate on batance sheet date, which corresponds to the agreed rate of certain activities (mostly middte rate of Croatian National Bank). Foreign exchange differences are recorded separately as positive and negative in the genera[ ledger, and because of their significance are presented separately in the profit and loss. 2.9 Asset recognition policy a) lnventories lnventories are measured at cost. Vatue adjustment of inventories (due to the damage, decrease in value or other justified reasons is performed once a year at the suggestion of persons responsible for inventories), as to be measured at the balance sheet date, at cost or net reatizable value, whichever is lower. lnventory of raw material and supplies, spare parts, sma[[ inventory, packaging and car-tires are stated at the actual cost that comprise invoicing vatue of the supptier increased by att attached acquisition costs (customs fees, taxes, transportation costs and all other costs that may be attributed to procurement). Commercial discounts and similar items are deducted when determining the purchase expenses. Items are recorded as smatl inventory provided their duration of use is shorter than one year and their individual value does not exceed HRK 3,500 HRK. When putting sma[[ inventory, packaging and car-tires in use, they are written off at one-time. lnventories are measured by the weighted average cost method. b) Financial assets lnitial recognition and measurement The Company recognizes financial assets in its financiat statements when it becomes a party to the contractual provisions of the instrument. Depending on the business model for asset management and the contractual characteristics of cash flows of financial assets, the Company measures financial assets at amortized cost. 21 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2071 Z.1O Asset recognition policy - continued b) Financial assets - continued Asset items are classified and measured as shown below: Classificationandmeasurement Classificationandmeasurement Assets Fixed assets Loans given Held for collection / amortized cost Current assets Cash and cash equivalents Held for collection / amortized cost Trade and other receivables Held for collection / amortized cost Financial assets Deposits Hetd for coltection / amortized cost The Company's business models reflect the way in which the Company manages its assets with the aim of generating cash flows. Trade and other receivables Trade receivables and other short-term receivables are held with a contractual cash flow collection strategy. Trade receivables that do not have a significant financial component on initial recognition are measured in accordance with IFRS 15 at their transaction price. lmpairment The Company recognizes an impairment of financial assets based on expected credit losses. At each reporting date, the Company measures expected credit losses and recognizes them in the financial statements. Expected credit losses from financial instruments are measured in a way that reftects: lmpartial and weighted probabitity amount determined by estimating the range of possible outcomes, Time value of money, Reasonable and acceptable data on past events, current conditions and forecasts of future economic conditions. For the purpose of calculating the expected credit toss, the financial asset portfotio is divided into three stages: Tier 1, Tier 2 and Tier 3. lf no impairment is determined on the date of first recognition, the financial asset is inctuded in Tier 1, and subsequent reclassification to Tier 2 and 3 depends on an increase in credit risk per financial instrument after initial recognition, i.e. on the credit quatity of the financiaI instrument The Company applies a simptified approach of IFRS 9 to measure expected credit losses using expected provisions for trade receivabtes. To measure expected credit losses, trade receivables are grouped based on similar credit risk and age structure. Expected credit loss rates are based on historical credit tosses that occurred during the three years prior to the end of the reporting period. Historicat loss rates are then adjusted for current and future information about macroeconomic factors affecting the Company's customers. The Company has identified gross domestic product (GDP), unemployment rate and inflation rate as key factors for the country in which the Company operates. Derecognition of financial assets The Company derecognises a financiaI asset when: - The contractual rights to cash flows from financial assets expire, - Transfers financial assets and the transfer qualifies for derecognition 22 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 2.9 Asset recognition policy - continued b) Financial assets - continued The Company transfers financial assets if, and only if, it either transfers contractual rights to receive cash flows from financial assets or retains contractual rights to receive cash ftows from financial assets but assumes a contractual obtigation to pay cash flows to one or more recipients in the arrangement. When the Company transfers financial assets, it is required to assess the extent to which it retains the risks and rewards of ownership of the financial assets. ln this case, when atl risks and rewards of ownership are transferred, the Company ceases to recognize financial assets and recognizes separately as assets or liabitities atl rights and obligations that have arisen or are retained in the transfer. Derecognition of financial assets lf almost atl risks and rewards of ownership of financial assets are retained, the Company continues to recognize financial assets. lf the Company neither transfers nor retains substantially a[[ the risks and rewards of ownership of financial assets, the Company determines whether control of the financiaI assets has been retained. lf control over financiaI assets is not retained, the Company ceases to recognize financiaI assets and recognizes separately as assets or tiabitities att rights and obtigations that have arisen or have been retained in the transfer. lf controt is retained, the Company continues to recognize financial assets to the extent that it continues to participate in those financial assets. c) Property, plant and equipment Property, plant and equipment are: . Land . Buildings o Plant and equipment Under the concept of property, plant and equipment, it is considered buitdings of a[[ purposes, ptant and equipment (machines, helicopters) and tools, plant and office inventory, furniture and transport equipment (assets), as defined in the Accounting Act. Equipment and inventory are recorded as property, plant and equipment, respectivety fixed tangible assets, according to tegal regulations, if their lifetime is longer than one year, and their individual value greater than HRK 3,500 on the day of purchase. Purchase of property, plant and equipment during the year is recorded at purchase cost. Purchase cost represents invoiced value of acquired assets ptus any costs incurred by putting the assets into use (import duties, detivery and transmission costs, installation, fees, costs of borrowing) and by the time of use of property. Subsequent expenditure relating to the already recognized assets is added to the carrying amount of that asset when it is probabte that future economic benefits wi[[ inflow into the Company in a higher amount than origina[[y agreed. Any other subsequent expenditure is recognized as an expense in the period in which it was incurred. lncrease in property value is causing an extended tifetime of assets, increased use capacity and increased quatity of products. Assets for which replacement of individual parts is expected and which have different useful lives are separated for financial reporting purposes to the appropriate depreciation units for which it is determined useful life in accordance with the characteristics of these assets. Fixed assets are measured at cost less accumulated depreciation and accumulated impairment losses. Carrying vatue of an item of property, plant and equipment and any significant part initiatty recognized is derecognized upon disposat or when no future economic benefits are expected from its use or disposal. Gains or losses arising from derecognition of property, plant and equipment inctuded in the Statement of comprehensive income for the period in which they are derecognized and are classified as a gain or loss equal to the difference between the net amount receivable from the disposal and the carrying value of assets and are recognized separately from operating income. 23 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 2.9 Asset recognition policy - continued c) Property, plant and equipment - continued lnternatly generated fixed tangible assets are stated at cost (actual vatue), if the cost doesn't exceed market value. Roads, as pubtic property that may not become an object of ownership, and which was given to the Company for managing, are recorded within the Company's fixed tangibte assets and they are stated as public capital. Costs of designing, expropriation, construction, supervision and other costs related to construction of new roads, as we[[ as investment and improvement maintenance costs, which relate to renovation and replacement of part of the road of limited duration of use, are alt included in the value of the pubtic property (roads), loans and earmarked donations. d) lntangible assets lntangible assets meet recognition conditions if acquired separatety and if they arise from contractual or other legat rights. lntangible assets consist of rights, the use of which wi[[ produce economic benefits to the Company in a period longer than one year, and for which the individual cost vatue can be retiabty measured. Amortization of intangible assets is calculated according to the estimated useful life or the contractual term rights to use certain assets. ln the case of intangible assets with indefinite useful tife, special attention is paid that the impairment test is conducted for any asset preparation of the annuaI financial statements. lntangibte assets are measured at cost less accumutated amortization and accumulated impairment losses. Carrying value of intangible assets is derecognized upon disposal or when no future economic benefits are expected from its use or disposat. Gains or losses arising from derecognition of intangibte assets included in the statement of comprehensive income for the period in which they are derecognized and are classified as revenue in the amount of the difference between the net amount receivabte from the disposal and the carrying value of assets. 2.1O Recognition and measurement of liabilities lnitial Recognition and Measurement Attfinancial tiabitities are initially recognized at fair vatue ptus the associated transaction costs. The Company's financiaI tiabitities include liabilities to suppliers and other liabilities, overdrafts and loans and borrowings. Financial tiabitities are subsequently measured at amortized cost using the effective interest rate method. Gains and losses are recognized in the statement of comprehensive income when tiabitities are derecognised as welt as through the effective interest rate method in the amortization process. Amortized cost is catculated taking into account any discounts or premiums on the acquisition and the fees or expenses that are an integral part of the effective interest rate. Derecognition A financial tiabitity is derecognised when the tiabitity is met, cancelled or expired. When the existing financial tiabitity is replaced by another by the same creditor under substantially different terms or the terms of the existing tiabilities have been substantiatly altered, such change or modification is treated as a cessation of the originat tiabitity and recognition of the new tiabitity and the difference in the corresponding carrying amounts is recognized in the comprehensive income. 24 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 2.11 Recognition and disclosure of capital a) Share capital Share capital represents part of the Company's total capital. Share capital is registered with the competent CommerciaI Court. b) Public capital Public capital represents the vatue of assets - motorways, semi-motorways, bridges, tunnels and other facilities on the motorways, which are given to the Company under management and reported in the ledgers of the Company but are not registered in the share capita[. Fees for financing construction and maintenance of pubtic roads from the state budget must be paid in accordance with the provisions of the Roads Act to the accounts of the Company and represents the capital (hereinafter: public capitat) of the Republic of Croatia, which finance the construction and maintenance of public roads, the loan repayment for financing construction of motorways and state roads, and are used for recapitatization of the Company in accordance with the program from the article of the Roads Act. The difference between own revenues and expenses realized in fiscal year shall be compensated at the expense of public capital based on the approved plan of the Company. Pubtic capital also includes income based on exchange rate differences, interests and other revenue from the cash management that make the public capital, white pubtic capital is reduced by the interests and other fees associated with financing the construction and maintenance of pubtic roads, and for exchange rate tosses. Profit realized by the Company, while the Repubtic of Croatia is the sote Company's member, increases pubtic capital. Pubtic capital is reduced by impairment (depreciation) of public goods (roads) by the difference of the amount of depreciation uncovered by own revenues of the Company. c) Other reserves The classified part of the capital - company's principal, which refers to the formation of reserves under the law or regulations due to provision of additionat hedging measures from the effects of losses, is reported as other reserves. Other reserves might inctude a dedicated portion of retained earnings provided for hedge of capitat. 2.12 lnvestments in associates and joint ventures lnvestments in companies in which the Company has significant influence but has no control, are measured in separate financiaI statements at acquisition cost adjusted for impairment losses. The existence of possible impairment of investments is verified annuatly when the event or changed circumstances indicate that the carrying amount may not be recoverabte. 2.13 Profit tax Taxable income is the profit for the period specified in accordance with tax regulations, and according to which there is a duty of paying taxes on profits. The tax [oss is loss for the period determined in accordance with tax regutations, according to which there is no obligation to pay corporate income tax. Corporate income tax expense is the cumulative amount of current and deferred tax included in the determination of net profit or loss for the period. Deferred tax liabilities are the amounts of corporate income tax payabte in future periods retating to taxable temporary differences. Deferred tax assets are amounts of corporate income tax recovery in future periods, and relate to: (a) Temporarydeductibtedifferences (b) Unused tax losses carried forward and (c) Unused tax reliefs carried forward. The tax tiabitity is measured at the current tax rate, according to reported income tax. 25 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 Deferred tax assets and tiabitities are measured at the corporate income tax rates that are expected to appty in period of cancel[ation of the differences. 2.14 State aid and disclosure of state aid Due to the specific role of the Company, and the specific methods of evaluation, billing and financing of the core activities of the company Hrvatske autoceste d.o.o., established under the Roads Act with the aim of construction and maintaining pubtic roads, some of the inftows needed to finance the activities, is provided from the proceeds of fees from oiI products from which it primarity finances construction of pubtic roads, and repays borrowed funds. Road as a pubtic good over which one cannot acquire ownership rights, which are given to the management of the Company, are recorded in the non-current assets of the Company and recorded as pubtic capita[. Construction and renovation of public goods (roads) are funded by fees from oiI products, the surplus of own income, assets depreciation of public goods (roads), loans and dedicated grants. Public capital is increased by the proceeds of fees from oil derivatives. According to the Roads Act, receipts are fees from oil products paid by producers and importers of oit products, and the competent government authority for commodity stocks per litre delivered and imported refined oiI products at the expense of the Company. Proceeds from the fees for oil derivatives are used to cover part or the total depreciation of public goods (roads), if the Company's own resources are not available for their coverage; and to finance road construction in a broader sense. Pubtic capital is increased by other income and receipts that are directty attributabte to pubtic capital, such as donations and dedicated grants for the construction of public goods, foreign exchange gains related to pubtic goods and interest on dedicated deposits formed by pubtic capital funds. Pubtic capital is reduced by the impairment (depreciation) of pubtic goods (roads) for difference of the amount of depreciation uncovered by the Company's own revenues. Pubtic capital is reduced by amounts that are directly attributable to public capital, such as financial expenses (cost of toan processing, credit fees and guarantees, foreign exchange differences, interest expenses in the period of repayment, the interest expense up to the beginning of the repayment period, default interest, etc.), which is not inctuded in the purchase value of the pubtic good. 2.15 Provisions A provision is recognized only when the Company has a present obtigation as a result of a past event and it is probabte, that the obligation will require an outflow of resources with economic benefits and a reliable estimate can determine the amount of the obligation. Provisions are reviewed at each Balance sheet date and adjusted to reflect current best estimates. Provisions are established for litigation costs, severance payment costs, reimbursements to emptoyees for benefits and retirement (regutar jubitee awards and severance payments) and cost of stimulating severance payments based on the Company's personnel restructuring plan. Provisions for expenses related to emptoyee benefits are based on expected earnings in accordance with the appticable col[ective agreement and the Rulebook and are measured at the projected unit credit method. Provisions for reimbursements to emptoyees for benefits and retirement (regular jubitee awards and severance payments) are determined as the current value of future cash outftow using the discount rate which corresponds to the interest rate on state bonds. 26 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 2.16 Contingent assets Contingent tiabitities are not recognized in the financiat statements but are disclosed only in the notes to the financial statements. Contingent assets are not recognized in the financial statements but are recognized when an inflow of economic benefits becomes probable. 2.17 Events after the balance sheet date Events after the balance sheet date that provide additionaI information on the Company's position at the balance sheet date (reconcitiation events) are recognized in the financial statements prior to the adoption of the financial statements by the Company's Assembty (adoption of the pubtic disctosure report). Those events that do not result in reconciliation are disclosed in the notes to the financial statements if they are of material importance as additional clarifications about the circumstances that arose at the end of the financial year. 2.18 Operationalsegments The Company is not organized according to the production segments, but the Company uses capital approach, which implies the existence of two parattel records of pubtic goods and own revenues and expenditures, as well as assets, tiabitities and equity arising from these changes. 3. OPERATING INCOME z0z1 z0z0 DESCRIPTION HRK'OOO HRK'OOO lncome from land use fees /i/ 64,768 43,603 Revenues from to[[ collection /ii/ 2,294,393 1 ,333,059 Revenues from the provision of services to ARZ 152,819 Rental income 17,420 6,526 Revenues from sates of goods 9,679 5,115 Other unmentioned income 8,737 7,877 Total sales revenue z,3g4,gg7 1,54g,ggg Surptus income 245 176 Proceeds from the sale of property 786 68s lncome from write-off of tiabitities 27,709 24,981 lncome from damages, penalties and similar 10,669 9,301 Cotlected written-off receivables (Note19) 646 1,614 Other operating income 18,575 11,373 Other operating income 58,630 48,13O Total 2,443,617 1,597,129 /i/ lncome from [and usage fees and fees for performing anci[[ary activities originated from entrusting the road land usage and the performance of ancitlary activities on the road land in accordance with Article 73 of the Roads Act (O.G. 84111, ZZl13, 54113, 148113, 92/14, 110119 and 14412'l). Conditions and way of usage of the road land, conditions and procedures of detegating usage of the road land to tegal and physical persons and rights and obligations of performing ancillary activities on the road land are prescribed by the Ordinance on Measures for Calculation of Fees for Usage of Road Land and Fees for Performing Ancittary Activities (OG78114,43/20), as we[[ as measures for fee calculation for their usage and performance of ancillary activities on the road land. 27 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 3. OPERATING INCOME - continued Pursuant to Article 25 of the Road Act, which entered into force on 28 July 201 1, the foundation of the easement and the right to buitd on the pubtic road for construction of utility, energy and water management structures and buitdings of etectronic communication subject to the execution of the agreement with the pubtic road manager are prescribed. For this type of instattations that were performed before entry into force of the Roads Act, the contracts were signed on the use of road land. The Roads Act, Articte 86, paragraphs 2 and 3, provide the exemption from payment of fees for right of way / construction of installations that are exctusively or predominantly owned by the Repubtic of Croatia or local and regional government or owned by the authorized easement / right of construction, which are predominantly owned by the Repubtic of Croatia or [oca[ and regional governments. For other authorized persons of construction easement stiputates the obtigation to pay compensation for the right of use of construction according to the Decision on the establishment of fees for the right of way and rights to buitd on the pubtic road (OG 87114). /ii/ Revenues from toll coltection, in accordance with the Roads Act, are in a broader sense sources of financing for public roads and are coltected from users of motorways and other toll facitities increased byvalue added tax. The Company's operating expenses are financed from toll revenues and by the surptus of toll revenues over expenditures is covered the depreciation of the Pubtic Goods under the management of the Company. Tolls are charged in accordance with the Decision on determining the amount of toll and to[[ cotlection system for the usage of motorways dated 17 May 2018 and the Decision on incentive models of tolt payment and to[[ in subscription payment dated 27 January 201 5, to which the Minister of Maritime Affairs, Transport and lnfrastructure gave the consent referred to in Article 87, paragraph 2 of the Roads Act. 4. MATERIAL EXPENSES 2021 z0z0 DESCRIPTION HRK'OOO HRK'OOO Costs of raw materials and suppties /i/ 103,827 99,824 Cost of goods sold 2,025 1 ,328 Other external expenses /iil 145,470 134,449 Total 251 322 235,601 /i/ Costs of raw materials and supplies were as fo[[ows: 2021 2020 DESCRIPTION HRK'OOO HRK'OOO Consumed raw materiats and supplies 39,014 33,797 Energy consumed 54,471 55,977 Used spare parts for the maintenance of tangibte assets 5,500 5,144 Write-off of small inventory and tires 4,781 4,820 Other materiaI expenses 61 86 Total 1O3,827 99 824 28 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2O21 4. MATERIAL EXPENSES - continued /ii/ Other external expenses were as foltows z0z1 zo20 DESCRIPTION HRK'OOO HRK'OOO Transport services 26 466 Postat services 4,901 5,711 Maintenance services 70,890 63,938 RentaI services 3,345 3,043 Advertising and promotional costs 898 981 Research and development services 3,921 8,792 Utitities 7,125 6,474 lntetlectual and intermediary services 23,700 17,108 Health service 419 124 Banking services and payment costs 1,440 1,035 Property insurance premiums 4,835 2,983 Emptoyee insurance premiums 1,012 644 lntellectuaI property rights fee 1,308 794 Utility fees 8,047 7,976 Data processing and software maintenance services 8,640 9,725 Fees for roads and technical inspections of vehicles 1,688 1,731 Other services 3,275 2,924 Total 145,47O 134,449 5. EMPLOYEE BENEFITS 2021 zo20 DESCRIPTION HRK'OOO HRK'OOO Net salaries and wages 285,211 274,508 Costs of taxes and contributions from salaries 104,215 108,165 Contributions to salaries 6s,960 65,347 Total 455,386 448 020 6. DEPRECIATION 2021 z0z0 DESCRIPTION HRK'OOO HRK'OOO Amortization of intangibte assets (Note 15) 6,146 4,256 Depreciation of tangible assets (Note 16) 17,575 15,971 Depreciation of public goods /i/ 1,214,515 763,015 Total 1,238,236 783,192 /i/ Depreciation of public goods The Company prepares financials statements and discloses profit in accordance with the lnternationaI Financial Reporting Standards, with derogations determined by the Roads Act (Official Gazette 84/ 11 , 22/13,54113, 148/13,92/14, 110119 and 144121). The application of the Act conditions a deviation in the presentation of the Company's profit. The stated Act stipulates that a negative operating result of the period is transferred to the public capital, and impairment (depreciation of pubtic roads) which is not covered by the Company's own revenue, is transferred to the pubtic capital. The impairment of pubtic roads in the concession is recognized directly to the pubtic capital on the basis of impairment calculation carried out in accordance with the rates prescribed for the depreciation of motorways. 29 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 7. OTHER EXPENSES 2021 z0z0 DESCRIPTION HRK'OOO HRK'OOO Other materiat rights of employees 78,802 81,380 Costs of professionaI training 428 281 Cost of entertainment 145 149 Membership fees to associations 375 384 Contributions to forests 636 458 Court costs and fees 2,444 1,134 Costs of professional literature and press 121 75 Remuneration for work under employment contracts 708 339 Taxes independent of business results and other fees 340 526 Total 83,999 84,726 8. VALUE ADJUSTMENT The vatue adjustment shown in the statement of profit or loss f or 2071 in the amount of HRK 270 thousand (2020 in the amount of HRK 2,212 thousand) refers to the vatue adjustment of current assets. 9. PROVTSTONS z0z1 2070 DESCRIPTION HRK'OOO HRK'OOO Provisions for severance pay, jubitee awards, etc. (Note 26) 1,835 Provisions for titigation costs (Note 26) 9,493 2,196 Provisions for IFRS 9 8,487 TOTAL 19 8't 5 2,196 10. OTHER OPERATING EXPENSES z0?.1 2020 DESCRIPTION HRK'OOO HRK'OOO Unwritten value of disposed assets 46,649 20,525 Donations, gifts /i/ 18,016 10,971 Deficiencies 33 25 Penalties and damages 449 301 Subsequent expenditures from previous years 18,956 2,814 Other operating expenses 23 7,262 Total 84,126 41,898 /i / Donations and gifts in the amount of HRK 17 ,939 thousand relate to the cost of totts for motorway use services of pubtic service vehicles with the right of way (potice, ambulance, firefighters, army) who use the motorway free of charge. The proposed amendments to the Roads Act provide for the reimbursement of value added tax, which the Company now calculates and pays. Other donations and gifts in the amount of HRK 77 thousand were approved by the Company's Management Board in accordance with the Procedure for approving donations and sponsorships. 30 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 11. FINANCIAL INCOME z0z1 2020 DESCRIPTION HRK'OOO HRK'OOO lnterest, foreign exchange differences, dividends and other income f rom relations with unrelated entrepreneurs lnterest income 1,096 693 Positive exchange rate differences 7,041 10,459 Total 8,137 11,152 12. FINANCIAL EXPENSES z0z1 2020 DESCRIPTION HRK'OOO HRK'OOO lnterest, exchange rate differences and other expenses with unrelated entrepreneurs and other persons lnterest expenses I 0,368 10,436 Total 10,368 10,436 lnterest expenses refer to statutory default interest according to court decisions and default interest from business relations. lnterest on received loans is recorded at the expense of the pubtic good. 13. PROFIT TAX li/ Profit tax is catculated at the rate of 18o/" (in 2020 in the same percentage) in accordance with legal regulations on the basis of the difference between the realized income over the expenses of the accounting period for which the tax base is determined. ln 2020, the Company acquired the transferred tax loss of ARZ in the amount of HRK 61 ,178. thousand. ln 2020, the Company reported deferred tax assets in the amount of HRK 10,893 thousand based on transferred tax losses after the [osses in the amount of HRK 662 thousand were used. /ii/ The Company prepares financials statements and discloses profit in accordance with the lnternationaI Financial Reporting Standards, with derogations determined by the Roads Act (Officiat Gazette 84/ 11,22/13, 54113, 148/13,92114, 110119, 144121). The apptication of this Act conditions a deviation in the presentation of the Company's profit and capitalizing interest to finance investments in motorway construction and maintenance. By apptying Articte 95 and 96 of the Roads Act to the Company is ensured consistent application of the law without changes in the reporting manner and comparability of data at the level of the Company. The reconciliation of accounting profit to taxable profit of the Company was conducted as foltows: z0z1 2020 POStTtON HRK'OOO HRK'OOO Revenues z,45Z,g1g 1,609,014 Expenses (2,144,587) (1,609,014) Profit/(loss) of the current year 308,232 Non-tax-deductibte expenses 11,415 7,682 Tax incentives (712) (7,020!' Profit/(loss) after increase and decrease 318,935 662 Transferred tax loss of the merged company ARZ (60,51 6) (6',t,1781 Tax base 258,419 Profit tax expense 46 515 Tax transfer (60,51 6) /i/ The amount of profit tax differs from the amount stated in the Statement of comprehensive income by the amount of HRK 8,989 thousand, which represents the abolished deferred tax assets 31 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 14. STATEMENT OF COMPREHENSIVE NCOME - PUBLIC GOOD The statement of comprehensive income - pubtic good is presented in the attachment - Financial statements of the Company Hrvatske autoceste d.o.o. and the pubtic good. 15. INTANGIBLE ASSETS ons, patents, Deve[opment licenses, trademarks, lntangible assets DESCRIPTION Risht-of-use assets exDenses software and other rishts under construction TotaI intanqible assets HRK'OOO HRK'OOO HRK'OOO HRK'OOO HRK'OOO PURCHASE VALUE Balance at 1 January 192 109 497 1 09,689 procurement 15,459 15,459 Transfer to use 1,786 13,774 (1 5,060) Takeover of assets in use by ARZ 25 28 50 at ber 2O2O 786 217 151 596 399 153 998 procurement 96 8,427 8,523 Transfer to use 8,209 (8,209) VALUE ADJ'JST/'AE1.IT at 2020 192 1 504 102 696 reciation during the year 932. 3,324 4,256 Takeover of assets in use by ARZ 25 27 27 at 20 932 217 133 134 617 Dep the year 498 12,Z9Z 12,790 Expenditure, alienation and deficits 146 at 3'l December 2021 1,43O 217 139,6',14 141 261 PRESENT VALUE at uary 993 6 993 at 2020 854 128 399 19 381 at December 2021 452 20,191 517 21 259 32 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 16. PROPERTY, PLANTAND EQUIPMENT Tools, i.nventory and Natural Plant and transport Assets under Other DESCRIPTION Land resources BuiLdinps eouioment vehicles Advances construction assets TOTAL HRK'OOO HRK'OOO HRK'OOO HRK'OOO HRK'OOO HRK'OOO HRK'OOO HRK'OOO HRK'OOO PURCHASE VALUE Balance at 1 January 2021 1 699 735 15 378 385 31,872,918 8 93s 979 117 998 13 550 1 775,38O 92 59 794 037 Direct procurement 778 530,581 531,359 Transfer to use 11,364 38,268 121,433- 62,370 8,830 (242,265) Return to use 950 38 988 Transfer to other asset positions 50 (s0) Takeover of assets in use by ARZ 10,421 8,336,624 82,980 8,556 22,59; 689 9,461 ,964 Direct procurement 14,703 753,370 768,073 Transfer to use 29,650 5,517 285,628 40,542 1,261 (362,598) Transfer to other asset positions (11,342) 11,342 Transfer of assets to HC d.o.o. (2,666) (53,243) (9,939) (1 8,496) (84,344) Takeover of assets from HC d.o.o. 89,970 1,702,543 189,166 1,981,679 Expenditure, alienation and deficits (33 19 084 z, 506 277 at December 2021 1,751,187 15,497,O20 42,103,621 9,275,022 134,573 29,031 2,230,964 781 71,022,199 33 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 16. PROPERTY, PLANT AND EQUIPMENT -continued Toots, inventory and NaturaI Plant and transport Assets under Other DESCRIPTION Land resources Buitdines eouioment vehicles Advances construction assets TOTAL HRK'OOO HRK'OOO HRK'OOO HRK'OOO HRK'OOO HRK'OOO HRK'OOO HRK'OOO HRK'OOO VALUE ADJUSTMENT Balance at 1 Janua 389 7 52 704 1 262 01 5,333 reciation during the year 880,502 98,025 7,059 985 586 Expenditure, alienation and deficits (23,735) (24,987\ (1,412) 50 34) Return to use 947 38 985 Takeover of assets in use by ARZ 3 667 324 78 154 8,516 634 3 628 at 3'l December 2020 17,913,458 7 11 634 2 Dep year 1,160,295 111,750 7,648 1,279,693 Expenditure, alienation and deficits (72,276) ( 1 2,806) (671) (85,753) Transfer to other asset positions (11,342) 11,342 Transfer of assets to HC d.o.o. (16,733) (9,214) (25,947) Return to use 74,098 68,244 142,342 Takeover of assets from HC d.o.o. Balance at 31 19.O47,500 8.845.159 123.440 634 28,016,733 PRESENT VALUE Balance at 1 January 2020 1,699,735 't 5 378 385 1 51 41 275 15 736 13 550 1 775 380 92 37 77 704 34 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 16. PROPERTY, PLANTAND EQUPMENT - continued An overview of ongoing investments is shown as fotlows: 31 Dec 2020 lncrease Decrease 31 Dec 2021 DESCRIPTION HRK'OOO HRK'OOO HRK'OOO HRK'OOO Ongoing investments for land - expropriations 58,607 41,396 30,335 69,668 Ongoing investments for land - conclusions 6,936 7,240 2,059 12,117 Ongoing investments for land - works 40,768 584 51,552 1 1 ,368 lnvestments - incomplete expropriation 1,843 6,440 357 7,926 a) Total land investment 108,154 66,444 33,335 141,263 Motorways under construction - atterations to instaItations 25,159 4,000 4,043 25,116 Motorways under construction - demining 14,373 0 0 14,373 Motorways under construction - projects 101,216 9,694 8,605 1 02,305 Motorways under construction - construction 1,519,509 750,226 112,988 1,656,747 Motorways under construction - supervision 35 853 5,481 4,148 37 186 b) Total investments in construction lities 1,696,110 269,401 129,784 1,835,727 c) Motorways under construction - toll collection system and equipment 300 7,OO3 5,311 1,992 d) lnvestment and rehabilitation maintenance 198,629 26?.,806 209,453 251.982 Total (a+b+c+d) 2,003,193 605,654 377,883 2,230,964 Overview of investment in tand is as fo[[ows: 31 Dec 2020 lncrease Decrease 31 Dec 2021 Route HRK'OOO HRK'OOO HRK'OOO HRK'OOO lstarski lpsilon 31,495 3,290 24,297 10,498 Motorway Zagreb - Macetj 491 491 Bositjevo - Junction Sveti Rok 2 2 Junction Sveti Rok - tunnel Sveti Rok - Sptit 77 77 Sptit-Metković-Ploče 2,246 2,246 Ptoče - Dubrovnik 715 27 27 715 Motorway Zagreb - Lipovac 2,988 2,085 1,987 3,086 Motorway Rijeka - Bositjevo 13 13 Motorway Rupe - Rijeka - Žuta Lokva 1,015 30,821 18 31,818 Motorway Beli Manastir _ osijek - BiH - Ptoče 52',824 77 52,9O1 Krk bridge 204 204 Junction Vrbovec - Koprivnica - Border crossing 1,968 1,968 Junction Vrbovec - Bjetovar - Border crossing 3 3 Motorway Zaqreb - Sisak 16,451 27,8O5 2,706 41,55O Total 108,154 65,443 33,334 141,263 35 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 16. PROPERTY, PLANT AND EQUIIPMENT - continued An overview of investment in construction facitities is presented as follows 31 Dec lncrease Decrease 31 Dec 2021 2020 Route HRK'OOO HRK'OOO HRK'OOO HRK'OOO lstarski lpsilon 4,086 469 4,086 469 Motorway Zagreb - Goričan 450 317 236 531 Motorway Zagreb Macelj - 4 190 194 Motorway Bregana - Zagreb 44 134 178 Motorway Zagreb - Bositjevo 266 40 226 Motorway Rijeka - Bosljevo 8,O41 4,543 6,722 5,962 Bositjevo - Junction Sveti Rok 94 50 89 55 Junction Sveti Rok - tunnel Sveti Rok - Sptit 3,596 523 145 3,974 Sptit-Metković-Ploče 3,086 901 3,403 584 Ptoče - Dubrovnik 1,331 1,33't Motorway Zagreb - Lipovac 26,881 21,061 5,333 42,609 Motorway Rupe - Rijeka - Žuta Lokva 4,165 11,674 15,839 Motorway Beti Manastir - Osijek - Svitaj 1,599,386 zz3,4z7 92,719 1,73O,O94 Krk bridge 2 2 Zagreb bypass 30 638 152 5't 6 Junction Vrbovec - Koprivnica - Granični prijetaz 12,629 209 1 2,838 Junction Vrbovec - Bjelovar _ Granični prijetaz 3,228 459 3,687 Motorwav Zasreb - Sisak 29,O59 4,536 137 33,458 Total 1,696,110 269,399 129,781 1,835,729 17. FIXED FINANCIAL ASSETS 31 Dec 202'l 31 Dec 2020 DESCRIPTION HRK'OOO HRK'OOO Share in principal of BINA FINCOM d.d. li/ 45,502 45,502 lmpairment on investments in financial assets (39,59'1) (39,565) Share in principal of BINA ISTRA d.d. /ii/ 3,790 3,790 a) Shares (stakes) in related companies 9,7O1 9,727 Receivables for loans given to retated companies 28,650 23,067 lmpairment of receivabtes for loans qiven to retated companies (11,9921 (6,43s) b) Loans to related companies 16,658 16,632 Total (a + b) 26,359 26,359 /i/ The share in the capital of BINA-FINCOM d.d., Zagreb refers to 758,361 shares with a nominal value of HRK 60, i.e.44.00% of the company's registered capital. iiil The share in the capital of BINA-ISTRA d.d., Zagreb relates to 378,985 shares with a nominal value of HRK 10, or 14.78% of the company's registered capital. Shares of BINA-ISTRA d.d. were given to a fiduciary of Deutsche Trustee Company Limited of London /iii/ Based on the agreement on subordinated debt signed on 't4 December 2010, the shareholders reduced the share capital of the Concessionaire (BINA-ISTRA d.d.)from the amount of HRK 256,417 thousand by the amount of HRK 230,775 thousand to the amount of HRK 25,642 thousand, which represents a decrease of the share capital of the Concessionaire by 90%, by the conversion of the amount of HRK 230,775 thousand to interest-free subordinated debt. The concessionaire witt pay to the Company subordinated debt in the amount of HRK 31,901 thousand in equal annual instatments in the period from2012to2027. 36 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 17. FIXED FINANCIAL ASSETS - continued /iv/ Pursuant to the Subordinated Debt Agreement of 19 Aprit 2018, shareholders reduced the share capital of the company BINA-FINCOM d.d. from HRK 120,648 thousand in the amount of HRK 17,235 thousand to HRK 103,413 thousand, representing a decrease in the share capital of the company BINA- FINKOM d.d. for a 14.29% conversion of the amount of 17,235 into the non-interest-bearing Subordinated Debt. BINA-FINKOM d.d. wilt repay to the Company repaid Subordinated debt in the amount of HRK 7,584 thousand in equal annual instalments from 2018 to2027. /v/ Concessionaire Bina lstra d.d. and the Repubtic of Croatia conctuded amendments No. 5 to the Concession Agreement on 5 October 2018 and Amendments No. 6 to the Concession Agreement on 4 November 2020, which defined a new projection for the repayment of the Subordinated Debt in the period from 2020 to2037. /vi/ Pursuant to the Loan Agreement to the Concessionaire dated 5 October 2018, the Company was invited in 2021 to pay a variable retevant Contribution in the amount of HRK 21,372 thousand in accordance with its share, and the mentioned payment was made on 31 March 2021. The Concessionaire made a partial refund of the Contribution in the amount of HRK 16,748 thousand on 31 March 2021. 18. INVENTORIES 31 Dec 2021 31 Dec 2020 DESCRIPTION HRK'OOO HRK'OOO lnventories of raw materiats and supplies 30,362 28,863 lmpairment of inventories (628) (628) Spare parts inventory 9,027 9,423 lmpairment of spare parts (s71 ) (610) Stocks of small inventory 1,611 1 ,500 Tire stocks 130 't06 Small inventory in use 21,455 19,743 lmpairment of smatl inventory in use (21,455) (19,703) Car tires in use 3,078 2,978 lmpairment of used tires (3,078) (2,978) a) Raw materials 39 931 38,654 products 621 510 Total (a + b) 40,552 39,164 19. TRADE RECEIVABLES 31 Dec 202'l 31 Dec 2020 DESCRIPTION HRK'OOO HRK'OOO Trade receivables in the country 57,633 49,253 DoubtfuI and disputed trade receivables 55,027 55,959 lmpairment of doubtfut and disputed receivables (65,893) (56,240) Total 46 767 48 972 Trade receivables are stated at amortized cost. Statutory default interest is charged on late payments. Correction of receivables from customers The Company records for all receivabtes otder than 365 days or upon initiation of the forced cotlection procedure. The analysis of the age structure of trade receivables determines the expected credit tosses arising from existing trade receivabtes. 37 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 19. TRADE RECEIVABLES - continued Age analysis of trade receivables: 31 Dec 2021 31 Dec 2020 DESCRIPTION HRK'OOO HRK'OOO Not due 45,522 45,168 0-180 days 4,839 364 181-365 days 2,883 2,517 366-1095 days 3,892 760 Over 1095 days 497 444 Overdue 12,111 4,085 Total 57,633 49,253 Changes in impairment for doubtfuI receivables: 31 Dec 2021 31 Dec 2020 DESCRIPTION HRK'OOO HRK'OOO Balance as of 1 January (56,2401 (46,122) Derecognized receivables 1,105 1,870 Contribution (increase) of impairment (11,119) (1 3,321 ) Collected written-off receivables (Note 3) 361 1,614 Transfer from ARZ (281) Balance as of 31 December (65,893) (56,2401 ZO. RECEIVABLES FROM THE STATE AND OTHER INSTITUTIONS 31 Dec 2021 31 Dec 2020 DESCRIPTION HRK'OOO HRK'OOO Receivables from petroleum product fees 206,798 138,747 Receivables for sickness benefits 661 831 Co-financing receivables (CEF Crocodille project) 1,665 1,665 Receivables from PGC 43 8,084 Receivabtes for overpaid profit tax 19,412 31,735 Other receivables from the state and other institutions 5,253 282 Total 233,832 181,344 Compensation claims from petroleum derivatives retates to receivables for accrued fee from petroleum derivatives for October, November and December of the current year. Pursuant to the Excise Duties Act (OG 83/09) and the Ordinance on Excise Duties (OG 1/10), there was a change in reporting when calculating excise duties on petroleum products The Company records mentioned receivables based on monthly reports from the Ministry of Finance, respectively Customs Administration, which receives up to 20th day of the month for the previous month. 21. OTHER RECEIVABLES 3'l Dec 2021 31 Dec 2020 DESCRIPTION HRK'OOO HRK'OOO Receivabtes for given advances 742 57 Receivables from insurance companies 36 24 Other receivables 2,994 3,909 lmpairment of other receivables (2,634) (3,1 59) Total 1,038 831 38 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 22. CURRENT FINANCIAL ASSETS 31 Dec 2021 31 Dec 2020 DESCRIPTION HRK'OOO HRK'OOO Current maturities of loans granted to affiti 1 8,51 0 13,041 lmpairment of loans granted to affiliates (13,0't9) (12,169) Receivabtes for deposits given in the country 43,914 8,576 Total 49,405 9,448 23. cAsH 31 Dec 2021 31 Dec 2020 DESCRIPTION HRK'OOO HRK'OOO Giroaccount 344,129 473,029 Cash register 6,089 4,846 Foreign currency account 134,959 409,626 Foreign exchange cash register 2,483 2,089 Overnight kuna term deposits 650,000 235 Total 1,'137,660 889,825 24. DEFERRED EXPENSES AND ACCRUED INCOME 31 Dec 2021 31 Dec 2020 DESCRIPTION HRK'OOO HRK'OOO Prepaid expenses 1,144 338 Accrued and undue interest 178 23 Cost of financing pubtic good 79,892 90,076 Total 81,214 90,437 25. CAPITAL /i/ Subscribed capital stated in the Batance sheet as at 31 December 2021 in the amount of HRK 131,14O thousand (31 December 2020 in the same amount) represents own permanent sources for the Company's operations and include principaI registered at the Commercia[ court in Zagreb. /iil Pubtic capital under management is shown as follows: 31 Dec 2021 31 Dec 2020 DESCRIPTION HRK'OOO HRK'OOO Pubtic capital under management - transfer under division balance sheet 19,077,368 19,077,368 Public capital from petroleum derivatives fee - total revenue 20,846,480 20,320,429 Pubtic capital from other financing sources - net expenditure (21,315,445) (22,741,068\ Total '18,608,403 16,656,729 39 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 26. CAPITAL - continued /iii/ Pubtic capital from other financing sources is shown as follows: 2021 2020 DESCRIPTION HRK'OOO HRK'OOO Balance at 1 January (22,741,069) (22,209,352) Profit atlocation 10,893 398,544 Public capital - coltection of guarantees zz0 4,067 Public capital - interest on deposits 4 9 Public capitat - EU co-financing project 845 Pubtic capital - revenues from depreciation of shares-JD ARZ 31,524 Pubtic capital - revenues from the management of JD-ARZ expropriation 423 Public capital - positive exchange rate differences 358,91 2 494,344 Pubtic capital - negative exchange rate differences (293,995) (750,683) Public capita[ - financing costs (481,929\ (456,1231 Public capital - costs of transferred JD facitities (58,431) Pubtic capital - vatue adjustment of pubtic goods out of use (3,460) (16,071) Public capital - co-financing Svitaj bridge 52,796 Pubtic capital - correction of the vatue of pubtic goods under concession (30,672) (99,490) Pubtic capita[ - recategorization '1,839,339 Pubtic capital-covering part of depreciation (1 07,1 60) Balance at 31 December (21,315,445) (22,741,0691 l1i-al Receipts or increase of public capital Receipts such as net foreign exchange differences from loans for construction of pubtic roads, prepayments for construction of public roads and other tiabitities related to the construction of pubtic roads and interest on term deposits from public capital are stated within pubtic capital. lncreases in pubtic capital are shown as fo[[ows: 31 Dec 31 Dec 2021 zoz0 DESCRIPTION HRK'OOO HRK'OOO Profit attocation 1 0,893 398,544 Pubtic capital - co-financing the construction of motorways 845 Public capital - interest on deposits 4 9 Public capital - col[ection of guarantees 220 4,067 Pubtic capital - revenues from depreciation of shares-JD ARZ 31,524 Pubtic capital - revenues from the management of JD-ARZ expropriation 423 Pubtic capitat - positive exchange rate differences 358,912 494,344 Pubtic capital - co-financing Svitaj bridge 52,796 Public capitat - recategorization 1,839,339 Total 2,294,111 8g7,gog l1lbl Expenditures or decrease of public capital Expenditures such as interest for non-current loans, bank fees for granting loans, fees for issued state guarantees, costs of co-financing other public property and impairment (depreciation) of public roads (in part that is not covered by own income of the Company), which decrease pubtic capital are stated within pubtic capitaI from other financing sources. 40 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 25. CAPITAL - continued Decrease in pubtic capital was as foltows: z0z1 7020 DESCRIPTION HRK'OOO HRK'OOO Public capital - negative exchange rate differences (293,995) (750,683) Pubtic capital - financing costs (481,929) (456,123) Pubtic capital - costs of transferred JD facitities (58,431 ) Pubtic capital - impairment of pubtic good in concession (30,672) (99,490) Public capital - impairment of pubtic goods out of use (3,460) (16,071) Pubtic capital - covering part of depreciation (1 07,1 60) Total (868,487) (1,429,527) /iv/ Legat reseryes stated as at 3'l December 2021 in the amount of HRK 568 thousand (31 December 2020 in the same amount) arose from the distribution of part of the realized profit for 200'l in the amount of 5% of profit after tax in accordance with Art. 222 of the Companies Act. 26. PROVTSTONS 31 Dec 2021 31 Dec 2020 DESCRIPTION HRK'OOO HRK'OOO Provisions for pensions, severance pay and simitar liabilities 43,678 41,843 Provision for costs within the warranty period 49 49 Provisions for costs of initiated titigation 1 8,585 33,840 Total 62 312 75 732 The obtigation to set aside provisions for employee benefits arises from the collective agreement, and provisions are determined in accordance with IAS'l9 "Emptoyee Benefits". Provisions for employee benefits include provisions for retirement benefits and jubilee awards. Provisions are measured at the present value of the costs that are expected to be required to settle the obtigation, using a discount rate of '1.21% (2020:1.21%1. The ftuctuation rate apptied is 3.5% for jubitee awards and 1% for severance pay while the average expected remaining seniority in years is 16.21 years. The base used in the catcutation represents the average salary for work increased by the corresponding benefits per employee, i.e. the amounts of benefits defined by the Labour Act and the Collective Agreement. Movements in provisions are shown as fo[[ows: New Used 31 Dec 2020 provisions provisions 31 Dec 2021 DESCRIPTION HRK'OOO HRK'OOO HRK'OOO HRK'OOO Provisions for pensions, severance pay and similar tiabitities 41,843 1,835 43,678 Provision for costs within the warranty period 49 49 Provisions for costs of initiated litieation 33,840 9,493 24,748 1 8,58s Total 75,732 11,328 24,748 62,312 41 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 27. LONG-TERMLIABILITIES 31 Dec 2021 31 Dec 2020 DESCRIPTION HRK'OOO HRK'OOO Liabilities to the Ministry of Finance for 5 696 5 070 etc. 5.696.038 s.070.003 Liabitities to banks and other financial institutions in the country 14,973,007 15,358,294 Liabitities to banks and other financial institutions abroad 3,472,653 4,667,314 Current principal maturities (Note 29) 1,209,549 ,580,5 ll. Liabilities to ban 16,865,080 18,816,059 l.+ll 2 561,1 1 8 o62 Obligation to sell apartments occupancy 20 29 Trade payables for expropriations (tink note 30) 71,700 71,700 Liabitities for property, ptant and equipment (IFRS 16) 379 Other long-term liabilities 71,72O 72,108 Total 2?.,632,838 23,958,170 /i/ Changes in tiabitities to banks and other financial institutions are presented as foltows: 2021 DESCRIPTION HRK'OOO 1 January 2021 25,095,611 Loan repayments (1,594,263) New loans 705,326 rate ftuctuations 976 31 December 2021 141 698 Current maturities of 31 December 2O2O The anatysis of the maturity of long-term liabitities to banks and other financiat institutions is presented as follows: Amount Maturity (year) HRK'OOO 2022 (current maturity) 1,580,590 2023 1,695,227 z0z4 1,993,355 2025 2,013,047 2026 1,988,281 After 2026 14,871,208 Total 24,141 ,698 42 Hrvatske autoceste d.o.o., Zagreb NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2021 27. LONG-TERM LIABILITIES - continued /1/ An overview of liabitities to banks in the country is presented as follows: n lnterest 1.1 rrent term portion Creditor Maturity Currency Repayment rate HRK'OOO HRK'OOO HRK'OOO Zaba JUMBO 2030. EUR 1,137,715 nually