Brodogradiliste Viktor Lenac d d : Non-Consolidated Annual Report

CONTENTS

STATEMENT OF MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL 4 STATEMENTS

INDEPENDENT AUDITOR'S REPORT 5

NON-CONSOLIDATED FINANCIAL STATEMENTS

Non-Consolidated Comprehensive Income Statement 12

Non-Consolidated Statement of Financial Position 13

Non-Consolidated Cash Flow Statement 14

Non-Consolidated Statement of Changes in Equity 15

Notes to Non-Consolidated Financial Statements 16

MANAGEMENT REPORT 48

SHIPYARD VIKTOR LENAC d.d. Member of Palumbo Group

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INDEPENDENT AUDITOR'S REPORT

To the shareholders of the joint stock company Brodogradilište Viktor Lenac, Rijeka

Reporting on Audited Financial Statements

Opinion

We have audited the separated financial statements of the joint stock company BRODOGRADILIŠTE VIKTOR LENAC, Rijeka, Martinšćica bb, Croatia ("the Company"), which comprise the Non-Consolidated Comprehensive Income Statement for the year ended 31 December 2021, Non-Consolidated Statement of Financial Position as at 31 December 2021, Non-Consolidated Cash Flow Statement for the year ended 31 December 2021, Non-Consolidated Statement of Changes in Equity and Notes to the financial statements, including a summary of significant accounting policies ("the financial statements").

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at 31 December 2021, its financial performance and its cash flows for the year then ended in accordance with the Croatian Accounting Act and International Financial Reporting Standards (IFRSs) issued by the European Commission and published in the European Union's official journal.

Basis for Opinion

We have conducted our audit in accordance with the Croatian Accounting Act and Audit Act, and International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the section entitled Auditor's Responsibilities for the Audit of the Financial Statements. We are independent of the Company and the Group in accordance with the Code of Ethics for Professional Accountants ("IESBA Code") and we have fulfilled our other ethical responsibilities in accordance with the requirements of the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

/i/ We draw attention to Note 33: Impact of the COVID-19 Pandemic, in which Management emphasized the impact COVID-19 pandemic had on the Company's business performance in 2021.

Our opinion is not modified in respect of this matter.

/ii/ We draw attention to Note 34: Impact of the Russian-Ukrainian conflict, which may indirectly affect the Company's operations in 2022.

Our opinion is not modified in respect of this matter.

SHIPYARD VIKTOR LENAC d.d. Member of Palumbo Group

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