Arena Hospitality Group d.d.

Reference: page 64

Arena Hospitality Group operates a two-tier board structure. The Supervisory Board is the highest governance body, overseeing the Management Board and exercising direct oversight of strategic risks, impacts and opportunities, including sustainability matters. The Supervisory Board has seven members, all non-executive: four male and three female (women represent 43 percent), with no non-binary members. The board gender diversity ratio is 0.75 to 1, with male members at 57 percent. One member is appointed by the Worker's Council to represent employees. The Company confirms the Supervisory Board's independence and reports no underrepresented social groups on the board. The Supervisory Board is supported by four committees, each with at least three members: Audit, Sustainability, and Remuneration and Nomination Committees. The Management Board oversees daily operations, short and long term. The Sustainability Committee, established in 2022 and chaired by Supervisory Board member Mrs Lorena Skuflic, oversees environmental and social impacts. Mrs Ivana Matovina chairs the Audit Committee. Detailed governance information is referenced to the Annual Report 2024 pages 153 to 157.

Reference: page 66

The Group has a long-established sustainability governance framework. It created a Responsible Business Programme in 2016 to embed engagement across all levels, regions and business operations, helping evolve the sustainability strategy through continuous review of impacts, risks and opportunities. The Supervisory Board provides strategic direction on the sustainability strategy and ensures implementation of due diligence, review and oversight through its Sustainability Committee. The Management Board is accountable for delivering the strategy through the Responsible Business Programme, which is managed by the Sustainability Steering Group and chaired by the Sustainability manager together with a designated Management Board member responsible for sustainability. Programme progress is reviewed by the Sustainability Committee each quarter to ensure alignment with Group strategy and Supervisory Board expectations. The Sustainability Steering Group comprises cross-functional members from procurement, human resources, legal, IT, technical services and operations. Programme progress is independently certified by Green Key. The Management Board and Supervisory Board, including Sustainability and Audit Committee members, were active participants in the double materiality process determining the IROs detailed under SBM-3.

Reference: page 66

The Group integrates sustainability-related performance into its incentive schemes, with details disclosed in the ESRS E1 section on page 94. In 2024 the Supervisory Board adopted and the General Assembly approved a Management Board Remuneration Policy that elaborates the framework for Management Board remuneration. The Policy ensures the Company applies performance-based remuneration that rewards Management Board members for their commitment to the Company's strategy in a transparent and clear manner. Remuneration of Supervisory Board members is determined by a decision of the General Assembly. Both the Management Board Remuneration Policy and the General Assembly decision on Supervisory Board remuneration are published on the Group's corporate website. Sustainability-related performance is reflected in the incentive plans of the board and senior leadership.

Reference: page 67

The Group provides a statement on due diligence mapping the core elements of due diligence to the locations in the sustainability statement where they are addressed. Embedding due diligence in governance, strategy and business model is covered in sections GOV-1 and GOV-2 (pages 64 to 66). Engaging with affected stakeholders in all key steps of due diligence is covered in sections GOV-1, GOV-2, GOV-4 and GOV-5 (pages 64 to 67). Identifying and assessing adverse impacts, and taking actions to address them, are covered in the Risk Management section, Principal Risks (pages 146 to 151). Tracking the effectiveness of these efforts and communicating is covered in the Risk Management Risk Governance section (pages 142 to 143) and in sustainability report sections GOV-2 and GOV-5. The statement is cross-referenced in the IRO-2 datapoint index against ESRS 2 paragraph 30, located on page 67.

Reference: page 67

The Group has an extensive enterprise risk management (ERM) strategy and risk governance framework covering risk management and internal controls over sustainability reporting. The ERM identifies the principal risks and risk categories, including matters relating to sustainability, and defines the risk appetite levels, objectives of risk management, the enterprise risk assessment process, risk description, residual risk and mitigating internal controls. The Group maintains a risk register reviewed quarterly by the Audit Committee and managed by the Group's internal control officer under the oversight of the Management Board. In 2024 the Group established a Risk Forum comprising the Group Internal Controls Officer, Group General Counsel, Chief Information Security Officer, Data Protection Officer, Regional General Manager, and Group and Regional Function Heads; the Risk Forum helps implement controls associated with risk management. The Group also adopted an Enterprise Risk Management Policy and Framework. Further detail on enterprise risk management is provided in the Management Board's Report of the Annual Report 2024 on pages 140 to 144.

Reference: page 68

Arena Hospitality Group's business model centres on accommodation and food services through hotels, resorts and campsites in the upscale, upper upscale and lifestyle segments across the CEE region. It operates in Croatia, Germany, Austria, Serbia and Hungary, with brands including Radisson and PPH (PPHE) branded properties. Its purpose is to create memories for guests in premium destinations, and its strategy is to become a leader in sustainable and responsible tourism. Products and services include accommodation, food and beverage, recreational and other associated services in the leisure and tourism sector. Customers come mainly from Germany, Austria, Hungary, Italy, Slovenia and Croatia, spanning leisure, corporate, groups, government, transient, tour operators, and meetings and events. Sustainability targets are based on three pillars (environmental, social, governance) with 17 identified goals. Employee headcount including JVs is 1,145 in 2024 (Croatia 738, Germany 257, Austria 64, Hungary 44, Serbia 42). The Group identifies climate change, resource use and circular economy, employee engagement and local community engagement as priority sustainability matters. The Group does not engage in fossil fuel, chemical, controversial weapons or tobacco activities.

Reference: page 70

The Group engaged stakeholders during 2024 through the double materiality assessment to align operations with ESG standards. Stakeholder categories identified include suppliers, employees, guests/customers, local communities, regulatory institutions, financial institutions and investors. Employees and PPHE Hotel Group are recognised as key stakeholders. Engagement methods vary by group: employee meetings, surveys and a Green Key team; customer market research and feedback; supplier assessments, audits and communication; investor AGMs, presentations and reports; and community consultations and meetings. Engagement is led by the Sustainability Team. A 2024 survey assessed the impact of sustainability practices, covering stakeholders representing 52 to 54 percent of turnover (as at 31 October 2024) across four regions. Survey findings highlighted strong local-community relationships in Croatia (Pula, Medulin), financial-institution concerns over bribery, corruption and pay equity, and varied supplier sustainability knowledge needing tailored support (especially Serbia and Hungary). Identified challenges include limited awareness in non-EU regions and resource constraints, with proposed actions to expand survey coverage. The Board, management and Sustainability Steering Group actively participated; the Supervisory Board is informed through Sustainability Committee meetings.

Reference: page 74

The Group's double materiality assessment identified a total of 50 IROs split across impacts, risks and opportunities. There are 27 impacts (10 material, 17 non-material, 0 unassessed), 15 risks (8 material, 7 non-material, 0 unassessed) and 8 opportunities (0 material, 8 non-material, 0 unassessed), giving 18 material IROs overall. Material IROs are distributed across ESRS topics including E1 Climate Change, E3 Water and Marine Resources, E5 Resource Use and Circular Economy, S1 Own Workforce and G1 Business Conduct. Described material items include the increase in GHG emissions from direct and indirect emissions (negative impact), asset damage from severe climate events (physical risk), revenue losses associated with adverse weather conditions during the high season (emerging risk affecting guest comfort and destination attractiveness), water consumption for economic purposes (negative impact), loss of worker health and safety from incidents (negative impact), maintenance of workforce equality through zero tolerance to discrimination (positive impact), and the increase in employee skill and knowledge (positive impact). The IROs are integrated into the Group's strategy and business model across own operations and the upstream and downstream value chain.

Reference: page 81

The Group describes a structured double materiality assessment process to identify and assess material impacts, risks and opportunities, conducted in 2024 using the Code Gaia application. IROs are identified from (1) review of existing company documentation and standards, (2) internal experience and expertise, and (3) workshops with internally responsible persons and external experts. The IRO identification and assessment activity took place during April and May 2024, led by the Chief Financial Officer, Sustainability Manager and team, Technical Department Manager, Purchasing Manager, Human Resources Manager, Legal Department, Group Financial Analyst and Senior Managers from the German Region. A four-step process is used: stakeholder identification and stakeholder impact identification (with stakeholders surveyed); own impact identification; identification of financial risks and opportunities; and collation, materiality assessment and documentation. Impacts are characterised by scale, scope, likelihood, irremediability and human rights relevance, with EFRAG no-netting applied. Negative impact severity and positive impact materiality follow defined threshold tests; risks and opportunities are assessed by magnitude (using a financial threshold of 0.5 percent of revenue, EUR 632,490 based on 2023 revenue) and likelihood. The process used EFRAG guidance (ID 177, Implementation Guidance 3) and the Code Gaia Whitepaper; no IRO is exempt from assessment.

Reference: page 86

The Disclosure Requirements complied with, based on the materiality assessment results, are presented in the form of the table of contents with page numbers, and a table of datapoints derived from other EU legislation (ESRS 2 Appendix B) is provided in the appendix indicating where each is located and which are not material or not relevant. This is the first year of reporting (FY2024); disclosures are not required for any period before initial application. The statement is prepared on a consolidated basis including subsidiaries and equity-method joint ventures, aligned with the financial statements, covering Croatia, Austria, Germany, Hungary and Serbia. The Group used phase-in provisions under Appendix C of ESRS 1, applying phase-in to topics ESRS E1, S1, E3 and E5; the phase-in Disclosure Requirements omitted include E1-9, S1-7, S1-11 (also S1-12, S1-13, S1-15), E3-5 and E5-6. During the double materiality process the Group assessed all ESRS topics, finding several non-material, including E2 Pollution, E4 Biodiversity and Ecosystems, and S3 Affected Communities, whose IROs were nonetheless considered. The exemption for sensitive or in-negotiation information under Directive 2013/34/EU articles 19a(3) and 29a(3) was not used.

Reference: page 94

Arena Hospitality does not yet have a finalised transition plan. In 2021 it adopted a Sustainability Roadmap aligned with the UN SDGs, setting a net zero by 2040 ambition (aligned with PPHE goals), with material topics, timelines, responsible internal departments and key milestones. A dedicated ESRS-compliant transition plan for climate change mitigation will be prepared in 2025, following EFRAG guidance published on 4 November 2024. A third party has conducted the Group's climate risk assessment since 2023 and 2024, calculating a CLIMATIG Score (0 to 100) for each climate hazard. The analysis concludes properties in Croatia face low to medium climate risk, with the primary hazards being drought, wind, fire and heat waves, heightened during the April to September seasonal operating period.

Reference: page 96

The Group does not yet have dedicated policies addressing climate change mitigation, adaptation and energy efficiency, but plans to develop a transition plan in 2025 to serve as the foundation for future climate-related policies. It has adopted the Sustainability Roadmap defining environmental areas, goals and time frames, with goals set for 2030 and 2050. The Group has monitored its GHG emissions since 2018 and reports progress in its Annual Reports. It has adopted a series of standard operating procedures for the management, monitoring and control of energy consumption, defined annual OPEX and CAPEX with implementation dynamics, and adopted a sustainable procurement policy. Continuous cooperation across departments and ongoing training, including occupational safety and health, support implementation. New ESRS-compliant policies created in 2025 will replace existing procedures and be revised annually or every five years.

Reference: page 97

In Croatia, renewable electricity generation is advancing through photovoltaic panels at four sites. Two locations, Park Plaza Arena Pula and Grand Hotel Brioni Pula, are already equipped and in trial operation with the national distributor; the remaining two are scheduled for installation in 2025, with all sites live in 2025. Past actions include the transition to alternative energy sources, energy-saving light bulbs, and energy efficiency improvements during property refurbishment. The Group continues life cycle assessments across properties to drive water consumption reductions, replacing fixtures with water-saving alternatives. It used two desalination plants (Pula and Medulin) in 2024 to reduce drinking water use for green areas. Waste is continuously monitored; two food recycling machines were introduced in 2023 at Park Plaza Histria Pula. Allocated CapEx in the current period was 57,985.94 (2023: 115,043.16).

Reference: page 98

The Group currently has no formal Transition Plan; it will be created in 2025. When that plan is prepared, targets the company set in 2019 will be revised so that the Scope 1, 2 and 3 emissions results published in this report become the initial parameters, making 2024 the base year. The plan will define new targets, implementation policies, measurements and achievements, continuing the Group's prior focus on reducing Scope 1, 2 and 3 emissions as shown in its Performance Tracking section. Existing Roadmap targets include reducing Scope 1 and Scope 2 carbon intensity by 50% by 2030, reducing electricity consumption by 30% by 2030, 100% renewable electricity sourcing by 2025, 20% solar renewable implementation mix by 2030, reducing waste intensity by 30% by 2030, eliminating single-use plastic by 2025, and reducing water withdrawal by 30% by 2030.

Reference: page 99

Total energy consumption was 46,405.14 MWh in 2024 (2023: 42,958.12 MWh). Total fossil energy consumption was 8,983.87 MWh (2023: 8,437.20 MWh), giving a fossil share of 19.36% (2023: 19.64%). Fossil sources comprised fuel from crude oil and petroleum products of 1,626.31 MWh, natural gas of 7,162.77 MWh, and other fossil sources of 194.78 MWh. Total renewable energy consumption was 36,725.01 MWh (2023: 15,801.68 MWh), of which purchased or acquired renewable electricity, heat, steam and cooling was 37,421.26 MWh, giving a renewable share of 79.14% (2023: 36.78%). Energy intensity per net revenue was 1.2366 MWh per monetary unit (2023: 1.4116), a 12% decrease. Energy intensity is calculated using net revenue from high-climate-impact sectors.

Reference: page 100

With 2024 as the base year, Gross Scope 1 emissions were 2,419.42 tCO2eq (2023: 1,880.80), up 29%, driven by campsite upgrades operating year-round and reallocation of more granular data from Scope 3 to Scope 1. Gross location-based Scope 2 emissions were 8,458.03 tCO2eq (2023: 7,696.99), up 10%. Gross market-based Scope 2 emissions were 1,295.96 tCO2eq (2023: 3,300.29), down 61% as Croatia fully transitioned to renewable energy. Total Scope 3 emissions were 18,052.98 tCO2eq (2023: 16,730.14), up 7%, mainly from the new employee commuting category and a switch from spend-based to volume-based data for purchased goods and services. Total GHG emissions (location-based) were 28,930.43 tCO2eq and (market-based) 21,768.36 tCO2eq.

Reference: page 101

The Group does not apply internal carbon pricing.

Reference: page 102

Using the Water Risk Atlas, the Group determined that its accommodation facilities in Croatia, Austria, Serbia and Hungary are not in high water stress areas; in Germany, the Berlin and Nuremberg regions are in high stress water zones, while Cologne is not. Croatian facilities sit within the Adriatic Water Area (JVP) zone and within Natura 2000 protected areas, which are not characterised as stress areas. The Group references the Croatian Water Area Management Plan to 2027 (Official Gazette 84/2023). To minimise water stress risks, the Company aligns operations with relevant local regulation, including German water laws. Within its property investment and maintenance lifecycle, water-consuming equipment is implemented to minimum consumption levels of 6 litres per minute for shower heads and washbasin mixers, 4 litres per flush for toilets and 9 litres per minute for rain shower pipes. Continuous monitoring at property level uses dedicated software.

Reference: page 103

The Group has implemented another water desalination plant, contributing to reduced fresh potable water usage for environment and green area maintenance. Numerous steps reduce water consumption where practical by introducing technology and products that dispense fresh water at a reduced rate, investing in energy-saving equipment and installing controls (increasing OPEX and CAPEX). For landscape irrigation, the Group uses reverse osmosis systems to convert seawater into irrigation water. All properties connect to local municipal water systems, and a centralized water monitoring system provides hourly data on consumption and pressure, allowing prompt leak detection and repair. All wastewater collected on-site is directed to municipal wastewater infrastructure; the Group does not discharge used water directly into the environment. Allocated CapEx in the comparative year was 767,200.00.

Reference: page 103

The Group has water consumption targets linked to a metric driven by customer (guest) usage. It measures water withdrawal in metric tonnes per guests served in the organisation. Continuous monitoring of water consumption at property level is set up via dedicated software, and any unusual volatility in water consumption at hotel level is immediately identified and addressed by maintenance teams to ensure minimum waste of water that might occur due to short-term maintenance issues. The targets support the broader Roadmap goal of reducing water withdrawal by 30% by 2030, with the Group reducing water consumption where practically possible through better technology and products.

Reference: page 104

Water consumption was 528,447 m3 in 2024 (2023: 511,344 m3). Water consumption in areas at water risk was 34,624 m3 (2023: 34,469 m3). Recycled and reused water, stored water and change in storage were not reported. Water intensity was 0.0037 m3 per million EUR (2023: 0.0040). Water consumption in the hospitality industry is directly related to the number of guests. As part of the Responsible Business Programme, dedicated teams work to reduce the carbon footprint, conserve water and manage waste. All properties connect to local municipal water systems, and a centralized water monitoring system provides hourly data on consumption and pressure to detect irregularities and repair leaks, preventing unnecessary water waste and guest inconvenience.

Reference: page 105

The Company's waste management policy focuses on addressing the generation of waste that requires treatment and creates pressure on treatment systems. The policy applies across all Company activities and locations, including upstream and downstream value chains, with employees and suppliers as key stakeholders. A dedicated manager is responsible for implementing the policy, which includes waste categorisation, contracting suppliers for recycling, repurposing and hazardous waste disposal, and analysing opportunities for new technologies. Employee training and supervision ensure adherence, and the policy is aligned with relevant national institutions. The strategy reflects circular economy principles of reducing waste, recycling and diverting materials from landfill.

Reference: page 105

The waste management strategy focuses on reducing waste, recycling and diverting materials from landfill in line with circular economy principles. In Germany, waste is sent to energy recovery through incineration; in Croatia, waste from 20 properties is centrally managed, registered, segregated and largely recycled via certified providers. Food recycling machines at Park Plaza Histria Pula convert food waste into compost, complementing kitchen standards for daily food waste reduction. Long-standing waste-sorting policies minimise landfill disposal, partnering with local companies Herculanea d.o.o. and Med Eko Servis d.o.o. Mixed waste goes to ZCGO Kastijun for mechanical-biological processing, with only 9% of waste ending in landfill; the facility holds ISO 9001 and ISO 14001 certifications. The Group is minimising plastics use and replacing them with recyclable alternatives where possible.

Reference: page 106

Total waste generated was 2,544.2 t in 2024 (2023: 2,306.91 t), of which non-hazardous was 2,510.34 t and hazardous was 4.06 t (2023: 6.01 t). Total waste diverted from disposal was 613 t (2023: 528.33 t), comprising recycling of 609.82 t and other recovery of 3.18 t. Total waste directed to disposal was 1,931.2 t (2023: 1,778.58 t), including incineration of 11.44 t, landfill of 307.77 t and other disposal operations of 1,611.99 t. The percentage of non-recycled waste was 23.97% (2023: 22.76%). No radioactive waste was generated. Primary waste streams include paper and cardboard, plastic, metal, glass packaging, chemical waste, organic biowaste, edible oils and laundry sludge.

Reference: page 110

The Company has implemented policies to ensure fair treatment, wellbeing and development of all Group employees. Alongside the Code of Conduct, which sets out the Company's inclusion and diversity principles and provisions on health, safety, wellbeing and adequate training, the Group maintains a Health and Safety Policy and a human rights and labour standards policy. Main standards upheld include freedom of employment, freedom of association and the right to collective bargaining, fair wages, prohibition of discrimination, safe working conditions and no excessive working hours. These policies are publicly available on Arena's webpage at www.arenahospitalitygroup.com. Other publicly available policies referenced include the Human Rights Policy, Children Protection Policy, Code of Conduct and Whistleblowing Policy. The Group adheres to high employee wellbeing standards and provides access to employee wellbeing workshops.

Reference: page 111

The Group fosters transparent and constructive communication with its workforce. In line with local legal requirements, a Workers' Council has been established that represents the interests of employees and provides a formal platform to raise concerns, share feedback and collaborate on matters affecting the workforce. An active union works closely with the organisation and is involved in discussions and negotiations on key matters such as working conditions, wages and benefits, ensuring employee perspectives are considered in decision-making. The Company conducts annual employee engagement surveys across all employment types (permanent, temporary, full time, part time, and non-employee temporary agency workers), covering working environment, leadership and wellbeing. In 2024 the survey methodology was amended to focus on groups such as permanent, seasonal and foreign workers to secure more meaningful feedback. Together the Workers' Council, union and engagement surveys enable open and responsive dialogue, feeding perspectives into Management Board decisions.

Reference: page 111

The Group strives to professionally and responsibly establish, monitor and manage all aspects of occupational health and safety to identify risks and hazards, acting preventively at all levels through continuous education of employees, carried out internally and with authorised companies. Management is responsible for establishing and promoting the health and safety policy, with individuals responsible for health and safety across the Group alongside the central office professional team. The Group maintains an occupational health and safety management system (OHSMS). For discrimination cases, the Company has appointed two persons authorised to receive and resolve complaints related to the protection of the dignity of workers, acting in accordance with internal procedures and national legislation. Health and safety incidents are addressed through immediate response teams, medical support and compensation schemes, with follow-up investigations to prevent recurrence. A Whistleblowing Policy is publicly available on the corporate website.

Reference: page 112

To prevent or mitigate material negative impacts the Group implements enhanced safety protocols, regular safety training and mandatory incident reporting to reduce health and safety risks, supported by an appointed Health & Safety Manager. Workforce equality is maintained via zero tolerance to all forms of discrimination, in line with UN global guidelines and national legislation, reinforced by the new collective agreement signed in Croatia in 2024 and several publicly available policies. Prohibited grounds of discrimination include race, ethnicity, gender, religion, trade union membership, age, disability, gender identity and sexual orientation, applied in all regions of operation. Additional positive actions cover gender equality, investment in employee skills through internal and external learning and development programs, and career progression pathways. Effectiveness is tracked through continuous monitoring of incident rates, periodic third-party audits, employee surveys, and metrics on training participation and internal promotion. Where tensions arise between business pressures and impact prevention, the Group prioritises long-term workforce wellbeing.

Reference: page 114

For loss of worker health and safety the long-term goal is to achieve the lowest number of health and safety related incidents, pursued through a dedicated health and safety team, training programs, safety audits using incident reporting systems, investigation of incidents and preventive measures. For maintaining workforce equality via zero tolerance to discrimination the goal is to achieve the lowest number of incidents through grievance mechanisms, legal support, compliance with anti-discrimination laws, clear reporting and remediation channels, and regular policy reviews. A new HR function was created to support overseas seasonal workers coming to Croatia. On gender equality, the employee gender distribution was slightly in favour of women (51.92% in 2023 and 50.31% in 2024), with the goal of maintaining an optimal gender balance. New annual targets will be defined within the scope of a new transition plan to be developed in 2025. Targets are informed by the annual employee engagement survey and resulting action plans.

Reference: page 115

Total employees fell from 1,182 in 2023 to 1,145 in 2024. By gender in 2024 there were 568 male, 576 female and 1 other (versus 567 male, 614 female and 1 other in 2023). By contract type in 2024: 453 permanent male and (by the breakdown table) permanent female employees, 123 temporary female and 141 temporary male, with female permanent at 453 and male permanent at 427; non-guaranteed hours employees numbered 10 female, 9 male and 1 other; full-time employees 412 female and 424 male; part-time employees 6 female and 2 male. By age group in 2024: 234 employees under 30, 606 aged 30-50, and 305 over 50. Employees operate across Germany, Hungary, Croatia, Austria and Serbia. Group average turnover was 52.78% in 2024 (62.10% in 2023), with Croatia 45.23%, Germany 43.20% and Hungary 69.90%. Data reflects headcount as at 31 December 2024; one FTE equals 40 hours per week. Employees by country are reported in SBM-1 on page 68.

Reference: page 118

In Croatia collective bargaining plays a key role in ensuring fair working conditions, with approximately 80% of employees covered by a collective bargaining agreement. Employees not covered are ensured fair treatment through alignment with industry standards, with representation by the Workers' Council for regular consultations. In Austria, 100% of employees in the hospitality sector are covered by a collective bargaining agreement. In Germany, two hotels (art'otel Cologne and Park Plaza Nuremberg) have a collective agreement, resulting at Group level in 69% of employees being covered. In Serbia there is currently no collective bargaining agreement, but the Group complies with national labour laws and maintains open channels and social dialogue. The coverage table indicates EEA collective bargaining coverage in the 60-79% band and workplace social dialogue representation (EEA only) in the 80-100% band.

Reference: page 118

Gender distribution at top management level is reported. In 2024 there were 112 male (51%) and 108 female (49%) at top management, compared with 102 male (55%) and 82 female (45%) in 2023. The Top management category by definition includes Executive members (Management Board and Supervisory Board) and Leadership (General Managers, Assistant GMs or Hotel Managers, and Function heads). Across the overall workforce the gender distribution was slightly in favour of women, at 50.31% female in 2024.

Reference: page 119

In Croatia, within Arena Hospitality Group d.d., the Company is committed to ensuring all employees are compensated fairly and adequately according to their job position and level, under the in-house collective agreement. From January 2024 all minimum wage positions were promptly aligned with national minimum wage changes, ensuring competitive compensation in line with the latest legal standards. For employees in other positions, wage increases were implemented following the successful conclusion of negotiations with the union in the second quarter of 2024, and positions outside the collective agreement are all paid adequately. The entity Ulika d.o.o., which operates art'otel Zagreb, is subject to the National Hospitality Agreement, with all positions paid accordingly. In Austria, the Group adheres to the local collective agreement and labour laws to ensure all positions are paid adequately. In Serbia, positions are paid in accordance with local labour laws and industry benchmarks, ensuring competitive compensation in line with national standards.

Reference: page 119

The Group continuously invests in employee development through internal and external training programs tailored to professional growth. In the reporting year, training sessions focused on workplace safety and health, Good Hygiene and Manufacturing Practices, HACCP, and the Food & Beverage department. Employees also participated in workshops and conferences on occupational safety, food and beverage, and ESG training at the Croatian Chamber of Commerce. The second generation of ARENA Management Program graduates completed their studies, conducted in collaboration with BHMS School in Switzerland, further strengthening leadership skills within the Group. Results from the annual employee engagement survey confirm that continuous learning is one of the most important aspects of employees' professional development, and the Group remains committed to proactively enhancing training initiatives. The Group provides access to digital platforms for continuous learning and allocates time for employees to attend training and upskilling programs, with the HR team designing initiatives in consultation with department managers.

Reference: page 120

Health and safety metrics are reported for 2024 (with 2023 comparatives). 100% of own workforce is covered by the health and safety management system, and 100% is covered by an audited health and safety management system. There were 0 fatalities among own workforce and 0 fatalities among other workers working on the undertaking's sites in both years. The number of recordable work-related accidents was 27 in 2024 (29 in 2023), with a rate of recordable work-related accidents of 14.39% in 2024 (14.26% in 2023). The number of cases of recordable work-related ill health was 0 in both years. As the first reporting year, cases of recordable work-related ill health for non-employees and days lost (own employees and non-employees) are marked as not available (first year).

Reference: page 120

The gender pay gap for all employees was 9.5% in the current reporting year (2024). The annual total remuneration ratio was 1:35 in 2024, compared with 1:36 in 2023. The reported ratio includes all employees, including members of the Management Board and seasonal employees. The Company notes that given the size of the Group, the large total number of employees (the majority in hospitality operations) relative to the small number of highly paid Management Board members produces a large disproportion, which contributes to such large ratios under this method of mathematical calculation.

Reference: page 121

Incidents, complaints and severe human rights impacts are reported for 2024 (with 2023 comparatives). The total number of incidents of discrimination was 3 in 2024 (0 in 2023), and the number of complaints filed was 3 (0 in 2023). The number of complaints filed to National Contact Points for OECD Multinational Enterprises was 0, and the total amount of fines, penalties and compensation was 0. The number of severe human rights incidents was 0 in both years, as was the number of severe human rights issues connected to own workforce constituting cases of non-respect of the UN Guiding Principles and OECD Guidelines, and severe incidents where the undertaking played a role securing remedy. The Group received three complaints relating to alleged discrimination; the Company acted in accordance with appropriate procedures, conducted inquiries, and all cases were closed with no further proceedings, fines, penalties or compensation. No reconciliation of monetary amounts occurred in 2024.

Reference: page 121

Value-chain workers represent a group of affected stakeholders who are not part of the Group's direct workforce. Through the double materiality process and surveys, it was determined that they do not pose a material impact or risk to the Group's operations. Before establishing a business relationship, each supplier and agency is required to review and acknowledge acceptance of the Group's business policies, including the Supply Policy and Policies of Social Responsibility, by completing the Supplier Application Form available on the corporate website. These resources are provided in both Croatian and English. All workers performing tasks within the Group who are not direct employees are entitled to the same rights and working conditions as the Group's employees.

Reference: page 122

During the double materiality process, no impacts, risks or opportunities related to workers in the value chain were identified. Consequently, implementing a dedicated process for engaging with value chain workers and their representatives in 2024 was not considered essential. The Group's broader engagement approach relies on the supplier acknowledgement process, whereby suppliers and agencies review and accept the Group's business policies before establishing a business relationship, and on the principle that non-employee workers performing tasks within the Group are entitled to the same rights and working conditions as direct employees.

Reference: page 123

The Group recognises guests as a key stakeholder group and primary customers of its hospitality services. As disclosed under SMB-3, it has adopted Group-wide policies to manage material impacts that apply to all employees and relevant stakeholders and are publicly available on the Group's website under the ESG and governance section. The Code of Conduct sets out ethical principles and expectations for everyone working in the Group, including directors and leadership, requiring conduct with integrity and transparency. The Human Rights Policy defines the basic human rights standards the Group respects and expects business partners to respect. The Child Protection Policy reflects the principles underlying international child protection conventions and includes practical rules for employees. Together with other policies, the Code of Conduct and Human Rights Policy outline the Group's commitment to addressing and mitigating potential adverse impacts on guests and end users.

Reference: page 123

No material impacts were identified for this topic, only material risks. As an international hospitality group, the Group states it is committed to ensuring operations respect the rights and well-being of guests, and has implemented industry standard processes for engaging with consumers and end users. Engagement typically occurs directly across stages of the guest interaction: pre-stay during booking, during stay through in-property engagement and initiatives, and post-stay through surveys that collect feedback on guest experiences. The Group maintains official communication channels, including customer service hotlines and dedicated email addresses, to receive and address guest concerns about their experiences and any potential negative impacts. The Marketing and Sales Director, a Management Board member, holds operational responsibility for ensuring consumer engagement processes are implemented effectively, including overseeing guest feedback systems and driving meaningful interaction. Feedback is reviewed regularly to inform decision-making and improve services and policies.

Reference: page 124

Further to the S4-2 disclosure, the Group has processes in place to provide for or cooperate in remediation of negative impacts on end users. It provides confidential reporting mechanisms and treats grievances confidentially, upholding rights to privacy and data protection so end users feel safe sharing feedback about potential adverse impacts. A trained team of customer service and operations specialists ensures complaints are handled promptly and professionally and collaborates with relevant departments to investigate and resolve issues. The Group has established several specific channels for consumers and end users to raise concerns: internal channels, including direct in-property guest relations desks and dedicated customer service email addresses; and third-party mechanisms, including participation in industry-recognised third-party review platforms that it monitors and responds to actively. These channels are promoted during pre-stay communications, in-property signage, and follow-up correspondence to ensure guest awareness. Business partners, including third-party operators, are required to establish or participate in adequate consumer feedback mechanisms through contractual obligations.

Reference: page 125

When the Group identifies that its operations have caused or contributed to a negative impact on consumers or end users, it takes immediate and proportionate action to provide or contribute to remedy. This typically involves investigating the root cause through a dedicated resolution team, engaging directly with affected individuals to determine appropriate remediation measures such as service recovery or compensation, and assessing the effectiveness of the remedy through follow-up assessments to prevent recurrence. Guest complaints and resolutions are tracked and analysed to identify trends and recurring issues and to implement policy reviews and operational adjustments. The Whistleblowing Policy and Code of Conduct are in place to prevent retaliation. The risks identified during the double materiality process are ongoing and subject to continuous monitoring, resulting in no incidents in previous periods. To address material risks, the Group continues strengthening its IT infrastructure through failover systems, real-time monitoring, and stress testing, and in 2024 introduced a Group Information Security Manager function.

Reference: page 129

As a prime listed company on the Zagreb Stock Exchange, the Company acknowledges its obligations to ensure comprehensive social, ethical, and environmental practices within its operations and supply chain in every market in which it operates. It has implemented various policies publicly available on its website and is committed to upholding the highest standards of ethical behaviour and integrity. The Code of Conduct, adopted in 2022, serves as the cornerstone of the Company's ethical framework, outlining principles all employees, contractors, and stakeholders are expected to adhere to. It covers accountability, respect for human rights and diversity, fair competition practices, prevention of conflicts of interest, and zero tolerance against corruption. Mechanisms for identifying, reporting and investigating concerns about unlawful behaviour are outlined in the Whistleblowing Policy adopted in 2022 and last updated in 2024, which provides confidential and secure reporting channels and protection against retaliation. In 2024 the Company adopted an Anti-Bribery and Anti-Corruption Policy, and it maintains a Human Rights Policy adopted in 2022.

Reference: page 130

The management of supplier relationships is undertaken to mitigate supply chain risks, integrate sustainability, and foster long-term partnerships. This involves diversifying suppliers, conducting regular assessments of social and environmental performance, and prioritising suppliers with certifications or local bases. Procurement teams are trained in ethical engagement. Vulnerable suppliers, such as small local producers, are supported through fair practices. Social and environmental criteria guide supplier selection, with emphasis on compliance with labour laws, sustainable practices, and regional inclusion. Ongoing dialogue with suppliers and surveys ensures accountability and continuous improvement, aligning practices with risk management and sustainability goals. In the supply chain due diligence, the Group ensures suppliers adhere to ethical practices, including fair labour standards and environmentally friendly production methods. The Group also notes a Responsible and Ethical Sourcing Policy based on its Human Rights Policy.

Reference: page 130

In 2024 the Company adopted an Anti-Bribery and Anti-Corruption Policy to prevent and address corrupt practices across all operations. The policy prohibits offering, giving, receiving, or soliciting bribes or other improper payments, and engaging in facilitation payments or any activity that could be perceived as corrupt behaviour. Employees and stakeholders are provided with clear guidance on identifying and reporting potential corruption risks. Mechanisms for identifying, addressing and reporting any corruption or bribery related incidents to the compliance and legal department are included in the policy, which is publicly available on the Company's webpage. Outcomes of any corruption related incident are to be reported to the Sustainability and Audit Committee in accordance with applicable regulations. The policy envisages that employees should receive training within 30 days of the start date of employment and periodically thereafter, at least once per year. The training is given to all employees, including the Management Board.

Reference: page 131

The Company reports on confirmed incidents of corruption or bribery for the comparative year 2023 and the current reporting year 2024. The total number of confirmed incidents of corruption or bribery was 0 in 2023 and 0 in 2024. The number of confirmed incidents involving own workers was 0 in both years, and the number of confirmed incidents involving business partners was 0 in both years. For violations of anti-corruption and anti-bribery laws, the number of convictions was 0 in 2023 and 0 in 2024, and the amount of fines was 0 in 2023 and 0 in 2024. The Company therefore reports no confirmed incidents and no convictions or fines related to corruption or bribery across both periods.

Reference: page 131

The Company reports metrics on payment practices for the comparative year 2023 and the current reporting year 2024. The average time for invoice payment was 24 days in 2023 and 23 days in 2024. The percentage of payments aligned with standard terms was 94% in 2023 and 94% in 2024. The number of legal proceedings currently outstanding was 0 in 2023 and 0 in 2024. In some regions where the Group operates, standard payment terms are governed by legal provisions, such as the EU Late Payment Directive (2011/7/EU), which typically allows terms up to 60 days. Hungary is an exception, with usual payment terms of 8 to 15 days and no specific legal regulation. The reported table was prepared based on two approaches: realistic contracted terms and a standard 60-day term for percentage alignment calculations. The Group has no recorded legal disputes for 2023 or 2024.