Annual Report 2014 UNION HOTELI d.d. ANNUAL REPORT UNION HOTELI Company and Group, 2014 UNION HOTELI d.d. www.union-hotels.eu 1 Annual Report 2014 UNION HOTELI d.d. INDEX 1 INTRODUCTION ................................................................................................................................. 4 1.1 UNION HOTELI d.d. Company Overview ........................................................................................... 4 1.2 Key achievements in operations of UNION HOTELI d.d. Company and UNION HOTELI Group ...... 6 1.3 UNION HOTELI Group Development Indicators ................................................................................. 7 1.4 Major Business Events in 2014 ......................................................................................................... 10 1.5 Letter to the Shareholders ................................................................................................................. 14 1.6 Report on the manner and scope of supervision of company’s operations during the 2014 fiscal year 15 1.7 Management Declaration .................................................................................................................. 19 1.7.1 Statement on Compliance with the Provisions of the Code of Governance for Public Limited Companies .................................................................................................................................... 23 1.7.2 Report on Relations with the Parent Company ACH, družba za gospodarjenje z naložbami, d.d., Ljubljana .......................................................................................................................... 23 2 MANAGEMENT REPORT................................................................................................................. 24 2.1 A Look Towards 2015 ....................................................................................................................... 24 2.2 Ownership Structure and Shares ...................................................................................................... 25 2.3 Structure of Financial Investments in Subsidiaries ........................................................................... 26 2.4 Performance of the UNION HOTELI Group ...................................................................................... 26 2.4.1 Key Achievements by the UNION HOTELI Group ............................................................. 27 2.4.2 Tourist Turnover in the UNION HOTELI Group ................................................................. 27 2.4.3 Financial Results of the UNION HOTELI Group ................................................................ 28 2.4.4 Property Results of the UNION HOTELI Group ................................................................. 29 2.4.5 Number of Employees and Trends in UNION HOTELI Group........................................... 31 2.4.6 Operations of subsidiary IP Central, d.o.o. 1 January - 31 December 2014 ..................... 33 2.5 UNION HOTELI d.d. Company Performance.................................................................................... 34 2.5.1 Key Achievements of the UNION HOTELI d.d. Company ................................................. 34 2.5.2 Financial Results of the UNION HOTELI d.d. Company ................................................... 34 2.5.3 Assets Performance of the UNION HOTELI d.d. Company .............................................. 36 2.5.4 Number of Employees and Fluctuation Trends in UNION HOTELI d.d. Company ........... 38 2.6 Risk Management ............................................................................................................................. 39 2.7 Sustainable Development ................................................................................................................. 43 2.7.1 Research and Development .............................................................................................. 43 2.7.2 Human Resources Management ....................................................................................... 44 2.7.3 Social Responsibility .......................................................................................................... 45 2.7.4 Care for Environment ......................................................................................................... 45 2.7.5 Quality of Operations ......................................................................................................... 46 2.7.6 Communicating with Interest Groups ................................................................................. 46 3 FINANCIAL STATEMENT ................................................................................................................. 48 3.1 Consolidated Financial Statement .................................................................................................... 48 3.1.1 Consolidated Profit and Loss Account ............................................................................... 48 3.1.2 Consolidated Statement of Other Comprehensive Income ............................................... 48 3.1.3 Group Balance Sheet ......................................................................................................... 49 3.1.4 Consolidated Statement of Capital Movement .................................................................. 51 3.1.5 Consolidated Cash Flow Statement ................................................................................... 52 3.1.6 Explanations to the Group’s Financial Statements ............................................................ 53 3.1.7 Group Operating Indicators ................................................................................................ 81 3.1.8 Management Board Responsibility Statement ................................................................... 83 3.1.9 Events after the Balance Sheet ......................................................................................... 83 3.1.10 Independent Auditor’s Report for the UNION HOTELI Group ........................................... 84 3.2 Financial Statement UNION HOTELI d.d. ......................................................................................... 85 3.2.1 Profit and Loss Account ..................................................................................................... 85 3.2.2 Other Comprehensive Income Statement.......................................................................... 86 3.2.3 Balance Sheet .................................................................................................................... 86 3.2.4 Statement of Capital Movement ......................................................................................... 88 3.2.5 Cash Flow Statement ......................................................................................................... 89 3.2.6 Explanations to Accounting Statements ............................................................................ 90 3.2.7 Operating Indicators ......................................................................................................... 120 3.2.8 Management Board Responsibility Statement ................................................................. 122 3.2.9 Events after the Balance Sheet ....................................................................................... 122 2 Annual Report 2014 UNION HOTELI d.d. 3.2.10 Independent Auditor’s Report for the UNION HOTELI Company .................................... 123 4 CONTACT WITH UNION HOTELI GROUP .................................................................................... 124 4.1 Who’s Who in UNION HOTELI d.d. Company ................................................................................ 124 4.2 Who’s Who in IP Central d.o.o. ....................................................................................................... 124 4.3 List of Companies within UNION HOTELI Group on 31 December 2014 ....................................... 124 3 Annual Report 2014 UNION HOTELI d.d. 1 INTRODUCTION 1.1 UNION HOTELI d.d. Company Overview General information as of 31 December 2014 Corporate name: UNION HOTELI d.d. Seat: Ljubljana (headquarters address): Mikloši čeva cesta 1, 1000 LJUBLJANA Size: Large company Code of activities (according to the I55.10 – Hotels and similar accommodation Standard Classification) Form of incorporation: Delniška družba d.d. (public limited company) Registration number 5001153000 Tax number SI79834264 Established in: 1905 and on 11 November 1997 as a public limited company Company registration: On 11 November 1997, the Company was entered into the business register as a public li mited company with the Ljubljana District Court, registration form No 1/ 03932 /00, SRG 97/00812 Share capital: €7,485,695.10 (district court decision on entering the change, dated 19 April 2012) Number of shares: 1,793,869 par value shares (decree by KDD D.D., d.d., dated 9 May 2012); the shares are traded on the Entry Market of the Ljubljana Stock Exchange under the symbol GHUG Fiscal year: Calendar year Company bodies: Management Board – CEO, Supervisory Board, General Assembly Chief Executive Officer Tomislav Čeh Supervisory Board Chairman Primož Raktelj Number of employees: On 31 December 2014: 221; from working hours: 205.31 Shareholders with a 20% or larger ACH, d.d. - 75.35% stake in UNION HOTELI d.d. stake: Subsidiary: IP Central d.o.o. (the parent company