Jadroplov d d audited financial statements 2024

JADROPLOV d.d., SPLIT

Note: This format does not represent the official format for the publication of the annual report.

This version of the consolidated financial statements is a translation from the original, which was prepared in the Croatian language. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of the consolidated financial statements takes precedence over this translation.

Page

Consolidated Management Report 1 - 17

Corporate Governance Statement 18 - 19

Statement of the Management Board's responsibility 20

Independent Auditor's Report to the Shareholders of Jadroplov d.d. 21 - 28

Consolidated financial statements 29 - 79

Consolidated statement of comprehensive income 29

Consolidated statement of financial position 30

Consolidated statement of changes in equity 31

Consolidated statement of cash flows 32

Notes to the consolidated financial statements 33 - 79

Management presents its annual report for the year ended 31 December 2024.

Primary Activity

Jadroplov d.d. ("Company") was established in the Republic of Croatia as a joint-stock company, registered at the Commercial Court in Split, number 060000041. The Company and its subsidiaries (collectively referred to as the "Group") own and operate a fleet of vessels sailing under the Croatian flag. The main activities of the Group include free navigation, crew management, and technical maintenance of vessels. The principal activity is predominantly conducted outside of Croatia, across the world's seas in the Atlantic, Indian, and Pacific Oceans.

As of December 31, 2024, the Group's fleet consisted of 7 vessels, of which 5 were bulk carriers with a total deadweight tonnage (DWT) of 242,727 and an average age of 18.3 years. Since October 24, 2022, and March 16, 2023, respectively, the Group has also owned 2 LPG vessels with a capacity of 7,500 cbm.

Supervisory Board

The Supervisory Board of the Company consists of: Dražen Ivanušec, Chairman; Tibor Konjevod, Deputy Chairman (relieved of duty on 4 March 2025); Goran Matešić, Member; Jasmina Dužević Đonlagić, Member; and Dantea Krnčević Šarac, Member until 11 April 2025, when she became Deputy Chairman.

Management Board

Since 6 September 2021, Ivan Pavlović has served as the sole Management Board member with a term lasting until 6 September 2026. On 11 April 2025, the Management Board was expanded to include Ivan Pavlović as President of the Management Board and Tibor Konjevod as a Member of the Management Board, both with terms lasting until 16 April 2030.

The total number of shareholders as of December 31, 2024 was 2,652.

Results

The Group's total result for 2024 amounted to a loss of EUR 2,663 thousand (USD 2,781 thousand), compared to a loss of EUR 4,540 thousand (USD 5,016 thousand) in 2023.

The Group's consolidated revenues for the reporting period amounted to EUR 37,708 thousand (2023: EUR 30,150 thousand).

Total expenses of the Group amounted to EUR 40,371 thousand (2023: EUR 34,690 thousand).

Below are some of the most significant figures from the financial statements for the reporting period:

Total income (EUR) 30,150,281 37,708,180

Income from primary activity / Total income 93% 96%

Other income / Total income 4% 2%

Material costs / Operating expenses 69% 74%

Employee costs / Operating expenses 4% 4%

Financial expenses / Total expenses 14% 15%

OPERATING INDICATORS

Table 1 Fleet - As at 31.12.2024

Chart 1 Vessel overview by age (years)

26,5

23,8

14,6

14,3

12,4

Split

Trogir

Peristil Sv.Dujam

Solin

2,2

Marko

Marulić

1,8

Vis

Chart 2 Average hire per month for the year 2024 in USD

25.000

19.451

20.000

18.089

18.294

19.078

16.651

17.499

15.000

14.105

14.747

11.382

12.059

12.580

10.177

10.000

5.000

0

* Available days represent the total days reduced by the days in dry dock

** Operating days represent available days reduced by days in off-hire, unexpected repairs and downtime, as well as days waiting for new employment.

*** Fleet utilization is calculated as the ratio of operating days to available days.

Chart 3 Structure of operating income

120%

100%

24%

80%

55%

60%

40%

76%

20%

45%

0%

2023.

2024.

Time charter Voyage charter

FINANCIAL INDICATORS

-10.000.000

In the calculation, EBITDA for the year is adjusted for financial income and expenses (interest and exchange rate differences, as these are not considered operating income and expenses), corporate income tax, and depreciation. EBIT represents operating profit, i.e., the result for the year adjusted for financial income and expenses and corporate income tax.

Significant events during 2024:

1.) Trends in the Maritime Market

The beginning of 2024 in the maritime dry bulk transport market was marked by a continued decline in freight rates compared to the end of 2023. This is reflected in a 7% week-on-week drop in the Cross-Sector ClarkSea Index, which stood at USD 24,428 per day at the end of the first week.

In the first week of 2024, the average charter rate for the total Supramax tonnage was USD 15,750 per day, while the rate for Handysize tonnage was USD 13,667 per day.

Baltic freight index movement during 2023 and 2024:

Since the end of 2023 and throughout 2024, one of the most significant factors affecting the shipping industry as a whole has been the disruption of transit through the Red Sea due to continued attacks on vessels in the area. As a result, some shipping companies have reinstated or extended suspensions of transit through this region, leading to a substantial decline in traffic through the Suez Canal-by some estimates, up to 44% compared to the period before the attacks began. Consequently, the beginning of the year was marked by a more favorable market position for larger tonnage vessels (Capesize) compared to smaller ones.

The shipping market was also affected by transit restrictions in the Panama Canal, which temporarily led to longer voyages for certain bulk cargoes at the end of 2023 and the beginning of 2024. However, this disruption was mitigated with the lifting of the restrictions.

An additional risk to the global market was the impact of the natural phenomenon La Niña in a number of key exporting countries (e.g., Australia, Brazil, Indonesia, etc.).

It is also important to mention the impact of the EU Emissions Trading Scheme (EU ETS), which was expanded in 2024 to include shipping. This requires companies to surrender allowances for 40% of applicable emissions in 2024, increasing to 70% in 2025 and 100% in 2026.

The Company has 5 ships for the transport of bulk cargo and 2 LPG ships, which is why we are providing a brief overview of these segments of the maritime market.

Significant events during 2024 (continued):

1.) Trends in the Maritime Market (continued):

Dry bulk market:

When considering the market, we will focus on the "Supramax" vessel segment, although their average carrying capacity is somewhat higher than the actual capacity of our vessels.

Historically, this market segment was in recession from 2010, reaching its historical low on 12 February 2016, when the index value was 243. After that, the market experienced a recovery marked by an increase in the index.

Despite the above, maritime trade in dry bulk cargo grew by approximately 3.7% on a year-on-year basis during 2024.

Iron ore trade recorded growth of approximately 3% to a record 1.6 billion tonnes in 2024. The main driver of this growth was strong supply growth from Brazil due to increased demand from China. As a result, iron ore stocks in China reached approximately 154 million tonnes by the end of August 2024, following a 5.3% increase in imports during the January-August 2024 period. However, it is important to note that demand for this ore outside of China was very uneven, as some parts of the world were under pressure from weaker macroeconomic trends and strong Chinese exports of steel products, which affected the profitability of steel mills in, for example, Europe, Brazil, and India.

Coal trade remained stable, primarily thanks to the Chinese and Indian markets, while coal usage in "developed" economies was under pressure from the "green transition."

Maritime grain trade increased by approximately 5% due to the recovery of Ukrainian exports to pre-conflict levels, a rise in U.S. exports following a sharp decline at the end of 2023 caused by the "carryover" of significant crop stocks into 2024, as well as strong Brazilian production and steady Chinese demand.

Global GDP growth for 2024 was at the expected level of 3.2% (3.3% in 2023), with the highest growth in India (5.4%) and China (4.6%), and the lowest in Japan (0.8%) and the Eurozone (1.5%).

Under these conditions, 2024 was also a very active year for the newbuilding market (especially for VLEC and Newcastlemax vessels), with total orderbook volume reaching 66 million CGT, the highest level in the past 17 years.

In 2024, the global dry bulk fleet grew by more than 3% (approximately 34 million DWT), with the number of vessels increasing from 13,658 to 14,078 during the year. A total of 491 new units were delivered, while 71 vessels were removed from the market (66 due to scrapping and 5 for other reasons).

It is worth noting that the adoption of alternative fuels in the dry bulk segment remained more limited than in some other shipping sectors. Only 10% of new orders were for vessels using alternative fuels, primarily LNG and methanol blends, while approximately 50% of Capesize orders this year were for vessels that are "alternative-fuel ready."

Significant events during 2024 (continued):

1.) Trends in the Maritime Market (continued):

Scrap prices have remained high but generally followed a downward trend since 22 April 2024. As of early September, the indicative price for a Handysize bulker stood at USD 495 per LDT, which is USD 15 per LDT below the level at the beginning of the year. Fleet renewal pressures and vessel age are expected to drive an increase in ship recycling ("scrapping") in the coming years, although the timing of any rise will still largely depend on conditions in the shipping market.

Under such conditions, the average value of the ClarkSea Index for 2024 was USD 24,964 per day, showing a declining trend toward the end of the year. At year-end, the index stood at USD 22,435 per day, representing a 3% drop compared to the previous week (by the end of the first week of 2025, it had decreased further to USD 21,389 per day).

Total earnings for dry bulk carriers in 2024 amounted to USD 15,031 per day, representing a 21% increase compared to USD 12,371 per day in 2023, and significantly above the average levels recorded during the 2010-2019 period (approximately USD 11,000 per day). This growth was particularly driven by a 76% increase in the Capesize market.

Annual average charter rates by dry bulk vessel type in USD:

LPG Cargo Market

LPG cargo market prices fell significantly compared to the previous year, which was somewhat expected given the record-setting year experienced in 2023.

Although it is true that prices declined, it could be more accurately said that the market underwent a correction and returned to a more normalized state.

The two most influential topics that dominated the LPG shipping market in 2024 were the Panama Canal and the export challenges from terminals in the U.S. Gulf (USG).

As a reminder, it is worth noting that around this time last year, it became customary to wake up to news reports of a Panama Canal auction slot being secured for over 3 million dollars.

It was not long before vessels began sailing around the Cape of Good Hope for voyages from the U.S. Gulf to the Far East. Since then, water levels in the canal have improved, and operations have largely returned to normal, with most owners resuming the transit of their vessels through the canal. However, the auctions have continued to display volatility - on some days, no bids are submitted, while on others, bids can surge to several hundred thousand dollars. As owners return to routing their vessels through the canal, the availability of tonnage has increased compared to 2023, putting downward pressure on freight rates.

Significant events during 2024 (continued):

1.) Trends in the Maritime Market (continued):

Looking ahead, the Panama Canal Authority has announced that, starting in 2025, the slot allocation policy will be revised, likely resulting in a reduced number of auction slots available. It will be important to monitor Panama Canal trends throughout 2025 to assess how the new system will impact transit capacity and, consequently, the overall market dynamics.

This year, closures, unexpected maintenance, and delays at terminals in the U.S. Gulf have been mentioned more frequently than usual. Weather disruptions that led to shutdowns, along with equipment failures, were not uncommon at terminals-causing delays and constraining the export capacity of the U.S. Gulf, which in turn contributed to record-high premiums. Despite these challenges, U.S. LPG exports rose by more than 9% year-on-year.

Furthermore, entering 2025, export capacity is expected to increase by an additional 250,000 barrels by mid-year, when the expansion project-featuring a new dock-is scheduled for completion.

Although thirteen new VLGCs are scheduled for delivery this year, more than six times that number of vessels will be temporarily unavailable due to mandatory dry docking. Nearly eighty vessels are expected to undergo dry docking this year, which is double the number seen in 2024.

In summary, while several adverse factors are likely to keep rates subdued in early 2025, the increase in U.S. Gulf export capacity and ongoing fleet maintenance could provide some upward pressure later in the year.

Average daily vessel charter rates in 2024 were as follows:

Fully Ref & Semi Ref

VLGC - 45833 P/D MGC(38000cbm) - 33333 P/D MGC(35000cbm) - 29000 P/D

Handy(22000cbmEthylene) - 34167P/D Handy(17000cbmEthylene) - 27000 P/D Handy (22000cbm Semi Ref) - 29600 P/D

Pressurized

11000 cbm - 18833 P/D

7500 cbm - 15166 P/D

5000 cbm - 11000 P/D

3500 cbm - 8000 P/D

Significant events during 2024 (continued):

1. Trends in the Maritime Market (continued):

Chemical Gas Market

Ethylene

A decline in import demand in Asia, combined with higher prices in the U.S. due to production outages, pipeline maintenance, and underground storage issues, negatively impacted U.S. ethylene exports in 2024. The global seaborne trade volume of ethylene fell by 6%, from 4,991 kt in 2023 to 4,693 kt in 2024, reflecting the broader slowdown of the global economy.

A significant portion of this decline originated from the U.S. Gulf (USG), where exports dropped by 28% year-on-year, from 1,120 kt in 2023 to 805 kt in 2024. Targa experienced a sharp decline from 108 kt to 34 kt, facing challenges related to the economics of "slow loading rates," while Enterprise's exports decreased from 1,013 kt to 771 kt. A narrowed arbitrage window with Asia made it difficult to ship non-contracted volumes during the third and fourth quarters, and European markets were unable to absorb the excess supply due to high ethane content.

Despite widespread declines in major export hubs, Libya diverged from the trend with a significant increase. Following the commissioning of its facilities at the end of 2023, Libya exported an estimated 178 kt in 2024, primarily shipping within the Mediterranean and to Northern Europe, with a few cargoes even reaching Bahia Blanca.

East of the Suez Canal, exports also recorded sharp declines. Rabigh and Ruwais exported only 9-10 kt in 2024, a steep drop from around 90 kt for each port the previous year. Similarly, Pengerang's volume fell by 34%, from 170 kt to 113 kt year-on-year.

Ethane

While maritime ethylene trade declined in 2024, U.S. ethane exports recorded modest growth, increasing by 1% year-on-year-from 9,100 kt in 2023 to 9,225 kt in 2024. This growth was limited by issues at the Panama Canal early in the year, which extended voyage durations around the Cape and reduced export capacity due to vessel delays.

With domestic ethane production expected to outpace demand, U.S. inventories remain well-positioned for export. Enterprise's new terminal on the Neches River, scheduled to come online by late 2025, will add substantial capacity, with the first phase delivering 120,000 barrels per day, and the second phase increasing that to 180,000 barrels per day.

The VLEC (Very Large Ethane Carrier) fleet is poised for dramatic expansion, growing from 29 vessels today to 90 by 2027-an increase of 210%. Investment in VLECs has been significant, with large 150,000 m³ ships costing up to $207 million each, and 99,000 m³ vessels ranging between $130 million and $170 million.

Significant events during 2024 (continued):

1. Trends in the Maritime Market (continued):

   Propylene

   Global propylene trade experienced only a slight change in 2024, with export volumes declining by just under 4% year-on-year. However, there were several significant regional shifts.

   Exports from the U.S. saw a substantial drop of nearly 28% between 2023 and 2024. Imports into Colombia took the biggest hit, falling by 38% year-on-year-from 268 kt in 2023 to 165 kt in 2024. Imports into Mexico also experienced a significant decline, dropping by 20% from 265 kt in 2023 to 212 kt in 2024. Reduced demand in the processing industry was the main driver of these decreases. Structurally, Colombia reduced its fleet from two vessels of 12,000 m³ and one vessel of 17,000 m³ to only two vessels of 12,000 m³, while Mexico continues to use a general cargo vessel on a time charter basis. Both importers supplemented their volumes with shipments from Asia, the Mediterranean, and the Middle East.

   Trade volumes in Europe remained largely unchanged compared to the previous year. However, the Far East recorded a more pronounced decline of nearly 15%, considering intra-country flows. This drop can be attributed to new PDH plants coming online, increasing domestic supply, and slower economic growth reducing demand.

   Once demand recovers, supply is already in place, indicating the potential for a rapid rebound. However, it is unlikely that this change will materialize before the end of 2025, given ongoing geopolitical uncertainties.

2. Bulk Carrier Fleet

   In 2024, the subject fleet consisted of 5 vessels:

   • m/b "Solin"

   • m/b "Sveti Dujam"

   • m/b "Peristil"

   • m/b "Trogir"

   • m/b "Split"

The first three vessels mentioned above belong to the "Supramax" class, while the last two vessels are in the "Handy" class, which have slightly lower carrying capacity compared to the "Supra" tonnage.

The total deadweight tonnage (DWT) capacity of the entire bulk fleet is 242,727 metric tons, with an average vessel age of 18.3 years.

In line with market trends observed during the year (a decline compared to the previous year) and the company's objectives, the fleet was predominantly employed on the spot market, except for two voyages of the vessel Split, which were conducted under a valid COA (Contract of Affreightment) agreement with the company CIOS.

Significant events during 2024 (continued):

1. Bulk Carrier Fleet (continued)

   M/B SOLIN

   The vessel Solin completed a total of four (4) charters in 2024, of which three (3) were short-term time charters and one (1) was on a voyage basis. The reasons for the below-average number of contracts concluded stem from the fact that the vessel's last charter in 2023 effectively began at the very end of that year, with most of its performance carried out predominantly in 2024. Additionally, the voyage charter concluded took longer than planned (approximately two additional months) due to issues on the charterer's side.

   M/B SVETI DUJAM

   The vessel Sveti Dujam completed seven (7) charters in 2024, of which five (5) were time charters for a single voyage, and two (2) were voyage charters. One voyage had to be canceled due to the vessel's delay caused by issues on the part of one of the voyage charterers.

   M/V PERISTIL

   he vessel Peristil had a total of eight (8) charters during the observed year, of which seven (7) were time charters for a single voyage and one (1) was a voyage charter. The majority of voyages (a total of 5) were carried out in the Far East. At the end of the year, a charter agreement was concluded that commenced on January 6, 2025.

   M/V TROGIR

   The vessel Trogir completed a total of eight (8) voyages in 2024, of which six (6) were on a voyage charter basis and two (2) on a time charter basis. Most of the voyages (five (5) in total) were carried out with grain cargo loaded at ports in Ukraine. Additionally, the vessel underwent dry-docking at the Yalova shipyard (Turkey) during the period from June to August 2024.

   M/V SPLIT

   The vessel Split completed a total of eight (8) voyages in 2024. Of these, seven (7) voyages were on a voyage charter basis, and one (1) was a time charter for a single voyage. A significant portion of the charters also involved grain cargoes from Ukraine, totaling three (3) voyages in 2024.

2. LPG fleet

   Both LPG vessels operate east of the Suez Canal, primarily due to business opportunities, as well as compliance with regulations currently in force in that region of the world.

   Marko Marulić and VIS are currently conducting operations in Southeast Asia, servicing coastal terminals

   between Singapore, Malaysia, Brunei, the Philippines, and China.

   Significant events during 2024 (continued):

3. Long-Term Charter Agreement for the vessel Split

On March 21, 2022, the company entered into a transportation contract with the client, CE-ZA-R, Centar za reciklažu d.o.o., Zagreb, Republic of Croatia. Under this contract, Jadroplov d.d. will provide cargo transportation services to the client using the motor vessel Split, the oldest vessel in Jadroplov's fleet, built in 1998, over a period of five years on the route from the Croatian ports of Rijeka and Split to the Turkish ports of the Mediterranean and the Sea of Marmara. On October 1, 2022, the contract with CE-ZA-R was terminated, and an identical contract was subsequently concluded with CIOS CARGO d.o.o., Zagreb, Republic of Croatia.

Fair Value of Real Estate

In order to determine the fair value of the real estate, appraisal reports were prepared by a certified court expert in construction and real estate valuation. Based on the 2023 assessment, the fair value of the properties amounted to EUR 8,943 thousand.

Events after the Reporting Date

1. Trends in the Maritime Market

a) Dry Bulk Market - expectations for the year 2025:

At the beginning of 2025, during January and February, the dry bulk shipping markets experienced a decline, with the sector's average earnings dropping to approximately USD 8,500 per day, representing a decrease of about 40% compared to the previous year. This decline was influenced by more typical seasonal demand patterns (e.g., heavy rainfall in Brazil, cyclones affecting northern Australia) which impacted vessel demand. However, market sentiment has shown signs of recovery since early March, particularly in the Capesize sector, where the average spot earnings reached approximately USD 26,000 per day by mid-March.

Daily charter rates in USD (for a 12-month period) for modern "handymax"/"supramax" vessels during the first week of each month were as follows:

According to the data from the previous table, it is evident that the beginning of 2025 was marked by lower charter rates compared to the start of 2024.

In 2025, the fleet is expected to grow by approximately 3% compared to the previous year, while demand growth may be limited. The anticipated growth in dry bulk cargo volume this year is only around 1% (compared to +3% in 2024), primarily due to expectations of weaker Chinese demand amid increased inventories of such cargoes in the earlier period. However, in recent months, a series of events have led to increased uncertainty regarding the global economy and downward revisions of bulk trade growth projections, with the possibility that volumes will remain fairly stable this year.

In addition to previously known factors (the war in Ukraine, transit issues through the Red Sea), market dynamics will also be influenced by announced measures from the U.S. government (e.g., possible introduction of additional tariffs, extra levies on vessels connected to China, etc.).

Events After the Reporting Date (countinued)

1. Dry Bulk Market - expectations for the year 2025 (continued):

   So far, the direct impact of tariffs on dry bulk trade appears limited and potentially smaller than the impact of the previous 'trade war' in 2018-2019 (which reduced dry bulk trade by approximately 0.5%). Regarding NOx and SOx emission control areas (ECAs), the implementation of these rules is being prepared for new zones: the Canadian Arctic and the Norwegian Sea, expected to come into effect in March 2026 and 2027, respectively.

   In the meantime, the Mediterranean Sea will become a SOx ECA starting from May 25, 2025.

   Following the EU ETS regulations that began applying in 2024, the EU "FuelEU Maritime" regulation came into effect at the beginning of 2025. This regulation sets maximum annual greenhouse gas intensity limits for marine fuels used on voyages within the EU (2% below the 2020 baseline from 2025, 6% below by 2030, and 80% below by 2050). These limits are based on 100% of the energy used on voyages within the EU and in EU ports, and 50% on voyages between EU ports and ports outside the EU.

2. LPG Cargo Market - Expectations for 2025:

   It is expected that the volume of LPG trade will register a more limited growth of 2.2% in 2025, following a 5.9% increase in 2024.

   The growth in exports is anticipated to be constrained by the export terminal capacities in the U.S. (additional capacities are not expected before the end of 2025) and ongoing production cuts by OPEC+.

   On the import side, Asia is expected to account for the majority of growth, with Chinese imports rising by 6% and Indian imports by 3%.

   Growth in ton-mile trade is also expected to be limited in 2025 (1.8%), with additional transits through the Panama Canal and a potential reduction in disruptions in the Red Sea further constraining growth.

   However, forecasts remain subject to uncertainty, particularly concerning trade between the U.S. and China (which accounted for 13% of LPG trade in 2024), given the potential escalation of trade tensions between the two countries.

   The LPG carrier fleet increased by 6.0% during 2024, with 54 vessels delivered totaling a capacity of 2.8 million cubic meters. Further fleet growth is expected, with an anticipated increase in fleet capacity of 5.2% in 2025 and an accelerated growth of 9.8% in 2026.

3. Refinancing of the Sale&Leaseback arangement for the Vessel Peristil

On January 27, 2025, a rescheduling of the Sale & Leaseback arrangement with Moon Rise Shipping, S.A., Panama, for the vessel Peristil-originally concluded on March 27, 2023-was carried out. The rescheduling was undertaken due to certain navigational area restrictions, which subsequently affected the vessel's commercial employment. The refinancing was executed by the Japanese shipowner Nakaei Marine Co., Ltd, in the amount of USD 7 million, with the same interest rate and with the key terms remaining largely unchanged.

Business Outlook for 2025

Compared to the previous year, and contrary to our expectations, the dry bulk market experienced a decline between January and April 2025. Particularly unexpected was the drop in freight rates on voyages through the Red Sea to Ukraine, which resulted in revenues falling below those generated by voyages to other destinations that carry no war-related risk.

It is important to note that since last year, we have focused on voyages originating from Ukraine and targeting the Mediterranean market, which, over the past four months, has performed worse than other regions-especially the Americas. Overall, the market remains weak, and in the context of recent developments such as the introduction of U.S. tariffs on China and other countries, it is difficult to predict what implications these events may have on the dry bulk market.

It should be emphasized that two vessels Peristil and Sveti Dujam are scheduled for dry docking this year, with the work planned to be carried out in China due to significantly lower costs compared to Turkey and other global locations.

The Company will continue to make strong efforts to minimize costs. We estimate that operating costs for the three newer bulk carriers should not exceed USD 6,000 per day. However, this is not achievable for the two oldest vessels Split and Trogir due to their age and the need for substantial investment to maintain seaworthiness. As a result, daily operating costs for these vessels are expected to be around USD 7,500.

Despite efforts to reduce vessel operating costs, we aim to improve the current RightShip ratings of our ships from one star to at least three stars. Achieving this would allow us to engage with major charterers such as Cargill, Viterra, Trafigura, and others.

The situation is significantly more favorable in the LPG segment, as both vessels are under long-term charter contracts, ensuring stable operations and the ability to meet financial obligations.

Due to substantial historical debt and the still-high interest rates on the U.S. dollar (SOFR), maintaining liquidity remains one of the Company's main challenges. Although SOFR is expected to be reduced at least twice by the end of the year, falling below 4%, the Company has decided to enter into a Sale & Leaseback arrangement for the vessel Vis to secure additional funding to service existing debts.

This year, we also intend to sell the vessel Split, the oldest ship in the fleet at 27 years of age. However, due to the low scrap steel prices, this decision is being postponed until market conditions improve to a more acceptable level.

We emphasize that the Company has a strong need to increase its share capital through a capital injection in order to restructure and potentially order new vessels. These could be LPG carriers, provided that contracts with major oil companies are signed in advance, guaranteeing loan repayment and return on investment over a 10-year period, after which the vessel would be mortgage-free.

Risks to which the Group is exposed

Price Risk

The Group operates in the international shipping market, exposing it to significant market risk due to cyclical changes in supply and demand in the shipping space market, affecting freight rates.

Interest Rate Risk

Since the Group uses loans with variable interest rates, it is exposed to the risk of interest rate changes. Part of the Group's loans are contracted with variable interest rates. The Company has not contracted instruments to hedge against interest rate risk.

Credit Risk

Credit risk is related to receivables from customers and refers to the risk of non-fulfillment of contractual obligations by the other contracting party, which could cause financial losses to the Group. The Group does not have significant credit risk because it has adopted a policy of leasing vessels to first-class charterers.

Currency Risk

Since the Group operates in the international market, most transactions are executed in foreign currencies, exposing it to exchange rate risks. The Group is mainly exposed to transactions in USD.

Liquidity Risk

The Company has a management process in place to ensure sufficient liquidity to meet obligations as they become due. Chartering ships on a time charter basis with payment agreements at the beginning of a 15-day period and increasing daily charter rates provide additional assurance of the necessary liquidity level.

Environmental Protection

The primary activity of the Company is international maritime transport, which means there is exposure to environmental protection risks. During 2024, there were no environmental incidents. To improve environmental protection, great attention is paid to the regular maintenance and renewal of the fleet, as well as to the professional training of maritime personnel.

Share Buyback

In 2024, there were no share buybacks by the Company.

Subsidiaries

Jadroplov d.d., Split conducts its international maritime transport operations with ships owned by associated companies abroad. Since Jadroplov d.d. manages these subsidiaries from a single business management headquarters, under a unified name and leadership, it keeps the business books and prepares consolidated financial statements for overall operations both domestically and internationally.

Research and Development

The Group does not have branches and does not invest in research and development.

For and on behalf of the Management:

Ivan Pavlović Tibor Konjevod

President of the Management Board Member of the Management Board

30 April 2025

General Information

The Company adheres to the objectives and guidelines of the Corporate Governance Code and the principles contained therein, in accordance with the legal framework and regulations of the Republic of Croatia. The purpose of such corporate governance is to ensure an effective and transparent allocation of roles and responsibilities among corporate bodies, a balanced approach to strategic oversight, management and control functions, with a focus on risk management and asset protection.

Jadroplov d.d. is a company whose shares are listed on the Official Market of the Zagreb Stock Exchange and applies the Corporate Governance Code adopted by the Croatian Financial Services Supervisory Agency and the Zagreb Stock Exchange. The Code is published on the website of the Zagreb Stock Exchange.

Corporate Governance Structure

In accordance with Company's Law and Statute of the Company boddies of Company are: General Assembly, Supervisory Board and Managment Board, and their roles and responsibilities are regulated by the aforementinoed acts.

General Assembly

The General Assembly decides on matters stipulated by the Companies Act and the Company's Articles of Association, including adopting the Articles of Association, deciding on the use of profit, deciding on increases and decreases of capital, electing and dismissing members of the Supervisory Board, granting discharge to members of the Management Board and the Supervisory Board, appointing the Company's external auditor, and performing other duties in accordance with the law and the Articles of Association. The regular annual General Assembly was held on 23 August 2024.

Supervisory Board

The Company's Supervisory Board supervises the management of the Company and for that purpose reviews and examines the Company's business books and documentation. The Supervisory Board submits a written report on the performed supervision to the General Assembly. The Supervisory Board consists of five members. Regular meetings of the Supervisory Board are generally convened once every three months. For important and urgent matters, the Supervisory Board may decide at meetings held in writing or via telephone. The members of the Supervisory Board are: Dražen Ivanušec, Chairman; Tibor Konjevod, Deputy Chairman (dismissed on 4 March 2025); Goran Matešić, Member; Jasmina Dužević Đonlagić, Member; and Dantea Krnčević Šarac, Member until 11 April 2024, when she became Deputy Chairman.

Management Board

The Management Board manages the Company's operations, establishes business plans, monitors their implementation, and coordinates the activities of the individual organizational units of the Company. The number of Management Board members varies from one to five. Since 6 September 2021, the Management Board consists of the Chairman and sole member, Ivan Pavlović, with a mandate until 6 September 2026. On 11 April 2025, two members of the Management Board were appointed: Ivan Pavlović, Chairman of the Management Board, and Tibor Konjevod, Member of the Management Board, for a term of five years.

Key Elements of the Internal Control and Risk Management System Related to Financial Reporting

The overall control systems include:

• an appropriate organizational structure at all levels, with segregation of duties and clearly defined levels of

  authority;

• internal controls integrated into business processes and activities;

• making reasonable and prudent judgments and estimates;

• a comprehensive set of accounting policies and procedures related to the preparation of the annual report in accordance with the International Financial Reporting Standards as adopted by the European Union.

Ivan Pavlović Tibor Konjevod

President of the Management Board Member of the Management Board

30 April 2025

In accordance with the Accounting Act of the Republic of Croatia, the Management Board is responsible for ensuring that consolidated financial statements are prepared for each financial year in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union, which provide a true and fair view of the financial position of Jadroplov d.d. (the "Company") and its subsidiaries (collectively referred to as the "Group") as at the reporting date, as well as their performance for each period presented.

After conducting appropriate inquiries and taking into account events after the reporting date, the Management Board reasonably expects that the Group will have adequate resources available in the foreseeable future and therefore continues to adopt the going concern basis in preparing the consolidated financial statements.

• The responsibilities of the Management Board in preparing the consolidated financial statements include the following:

• selection and consistent application of appropriate accounting policies;

• making reasonable and prudent judgments and estimates;

• compliance with applicable accounting standards, with disclosure and explanation of all material departures

  in the consolidated financial statements; and

• preparation of the consolidated financial statements on a going concern basis, unless the assumption that the Group will continue as a going concern is not appropriate..

  The Management Board is responsible for maintaining adequate accounting records that accurately reflect, at any time, the consolidated financial position of the Group. The Management Board is also required to ensure that the consolidated financial statements comply with the Accounting Act. Furthermore, the Management Board is responsible for safeguarding the Group's assets and for taking reasonable steps to prevent and detect fraud and other irregularities. The Management Board is also responsible for ensuring the accuracy and completeness of all elements of the statement on the application of the corporate governance code and the management report, in accordance with Articles 21 and 24 of the Accounting Act.

  In addition, in accordance with Commission Delegated Regulation (EU) 2018/815 of 17 December 2018 supplementing Directive 2004/109/EC of the European Parliament and of the Council as regards regulatory technical standards on the specification of a single electronic reporting format ("ESEF Regulation"), the Company's Management Board is required to prepare and publish the annual consolidated report in XHTML format and to tag the annual financial statements prepared in accordance with IFRS in the XHTML format using XBRL tags, as well as to tag the notes to the annual financial statements as block text to meet the requirements of Article 462 of the Capital Market Act.

  The consolidated financial statements on the following pages were approved by the Management Board and signed below as confirmation.

  On behalf of the Management Board, 30 April 2025

  Ivan Pavlović Tibor Konjevod

  President of the Management Board Member of the Management Board

  
  
  Independent Auditors' Report to the shareholders of Jadroplov d.d. Report on the Audit of the Financial Statements Opinion

  We have audited the consolidated financial statements of Jadroplov d.d. ("the Company") and its subsidiaries (together referred to as "the Group"), which comprise the consolidated statement of financial position as at 31 December 2024, the consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising material accounting policies and other explanatory information (further referred to as "the financial statements").

  In our opinion, the accompanying financial statements give a true and fair view of the consolidated financial position of the Group as at 31 December 2024 and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union ("EU IFRS").

  Basis for Opinion

  We conducted our audit in accordance with International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in Croatia and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

  Material Uncertainty Related to Going Concern

  We draw attention to Note 2, Basis of preparation of consolidated financial statements, section c) Going concern which indicates the Group realised a loss for the year in the amount of EUR 2,663 thousand and that as of 31 December 2024 the Group's current liabilities exceed current assets by EUR 26,864 thousand. These facts together with other events outlined in Note 2 c) indicate that a material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

  Report on the Audit of the Financial Statements (continued) Key Audit Matters

  Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material Uncertainty Related to Going Concern sections of the report we have identified the following key audit matter to communicate in our report:

  Impairment of vessels

  The carrying amount of vessels and capitalised drydocking costs ("vessels") as at 31 December 2024 amounted to EUR 98,076 thousand (31 December 2023 EUR 97,126 thousand). For 2024, net reversal of impairment losses amounted to EUR 568 thousand (2023: net impairment in the amount of EUR 95 thousand).

  Refer to accounting policy 2.1. f) of Material accounting policies and financial disclosures in notes 2.3 Key accounting estimates and 12 Property, plant and equipment of the consolidated financial statements.

  As at 31 December 2024, the carrying amount of vessels, carried at cost less accumulated depreciation and any accumulated impairment losses, represented approximately 94% of the Group's total assets.

  As described in Note 2.3 of the financial statements, in the current year, the Group has identified impairment indicators, primarily, realised operating loss, the market capitalisation below the carrying amount of the Group's net assets and uncertain outlook of freight market.

  As required by relevant financial reporting standards, vessels for which impairment indicators exist are required to be tested by the Group for potential impairment. Any such impairment would be recognised in the amount by which the carrying amount of the vessel (or a related Cash generating unit ("CGU")) exceeds its recoverable amount.

Key audit matter How our audit addressed the matter

Our audit procedures in this area, performed assisted by our own valuation specialists, included, among others:

Key audit matter (continued) How our audit addressed the matter (continued)

• Critically assessing the Group's assumptions within the model used to determine the recoverable amounts of vessels. This included:

  • Testing the relevance and reliability of data used in the model;

  • Assessing reasonableness of the key assumptions applied in the model (such as, freight rates, operating days, operating costs, capital expenditures, residual values, inflation and discount rate), by reference to publicly available market reports, as well as the Group's internal documents, such as budgets, customer contracts and sales reports;

• Assessing susceptibility of the impairment model and its outcome to management bias, by challenging the Group's analysis of the model's sensitivity to changes in key underlying assumptions;

• Assessing the accuracy and completeness of impairment-related disclosures in the financial statements against the requirements of the financial reporting standards.

Management is responsible for the other information. The other information comprises the Management Report and Corporate Governance Report included in the Annual Report of the Group but does not include the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements, or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

With regard to the Management Report, and the Corporate Governance Report, we also performed procedures prescribed by applicable legal requirements and we report that:

• the information given in the Management Report and the Corporate Governance Report for the financial year for which the financial statements are prepared, is consistent, in all material respects, with the financial statements;

• the Management Report and the Corporate Governance Report have been prepared, in all material respects, in accordance with applicable legal requirements.

  If, based on the work we have performed above, we conclude that there is a material misstatement, we are required to report that fact. We have nothing to report in this regard.

  Responsibilities of Management and Those Charged with Governance for the Financial Statements

  Management is responsible for the preparation of the financial statements that give a true and fair view in accordance with EU IFRS, and for such internal control as management determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

  In preparing the financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

  Those charged with governance are responsible for overseeing the Group's financial reporting process.

  Auditors' Responsibilities for the Audit of the Financial Statements

  Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing will always 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 financial statements.

  As part of an audit in accordance with International Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

  • Identify and assess the risks of material misstatement of the 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 internal controls.

  • Obtain an understanding of internal control relevant 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 Group's internal controls.

  • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

  • Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Group to cease to continue as a going concern.

  • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

  • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

    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 controls that we identify during our audit.

    Auditors' Responsibilities for the Audit of the Financial Statements (continued)

    We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

    From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

    Report on Other Legal and Regulatory Requirements

    We were appointed by those charged with governance on 23 August 2024 to audit the consolidated financial statements of Jadroplov d.d. for the year ended 31 December 2024. Our total uninterrupted period of engagement is two years, covering the year ended 31 December 2023 and 31 December 2024.

    We confirm that:

  • our audit opinion is consistent with the additional report presented to the Audit Committee of the Company dated 29 April 2025;

  • we have not provided any prohibited non-audit services (NASs) referred to in Article 44 of the Audit Act. We also remained independent of the audited entity in conducting the audit.

  The engagement partner on the audit resulting in this independent auditors' report is Joško Džida.

  Report on Compliance with the ESEF Regulation

  In accordance with the requirements of Article 462 paragraph 5 of Capital Market Act, we are required to express an opinion on compliance of the consolidated financial statements of the Group as at and for the year ended 31 December 2024, as included in the attached electronic file jadroplovdd-2024-12-31-0-hr.zip, with the requirements of the Commission Delegated Regulation (EU) 2019/815 of 17 December 2018 supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to regulatory technical standards on the specification of a single electronic reporting format (the "RTS on ESEF").

  Responsibilities of Management and Those Charged with Governance

  Management is responsible for the preparation of the consolidated financial statements in a digital format that complies with the RTS on ESEF. This responsibility includes:

• the preparation of the consolidated financial statements in the applicable xHTML format and their publication;

• the selection and application of appropriate iXBRL tags, using judgment where necessary;

• ensuring consistency between digitised information and the consolidated financial statements presented in human-readable format; and

• the design, implementation and maintenance of internal control relevant to the application of the RTS on ESEF.

  Those charged with governance are responsible for overseeing the Group's ESEF reporting, as a part of the financial reporting process.

  Auditors' Responsibilities

  Our responsibility is to express an opinion on whether the consolidated financial statements comply, in all material respects, with the RTS on ESEF, based on the evidence we have obtained. We conducted our reasonable assurance engagement in accordance with International Standard on Assurance Engagements 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information (ISAE 3000) issued by the International Auditing and Assurance Standards Board.

  A reasonable assurance engagement in accordance with ISAE 3000 involves performing procedures to obtain evidence about compliance with the RTS on ESEF. The nature, timing and extent of procedures selected depend on the auditor's judgment, including the assessment of the risks of material departures from the requirements of set out in the RTS on ESEF, whether due to fraud or error. Reasonable assurance is a high degree of assurance. However, it does not guarantee that the scope of procedures will identify all significant (material) non-compliance with the RTS on ESEF.

  Our procedures included, among other things:

• obtaining an understanding of the tagging process;

• evaluating the design and implementation of relevant controls over the tagging process;

• tracing the tagged data to the consolidated financial statements of the Group presented in human-readable format;

• evaluating the completeness of the Group's tagging of the consolidated financial statements;

  Report on Compliance with the ESEF Regulation (continued) Auditors' Responsibilities (continued)

• evaluating the appropriateness of the use of iXBRL elements selected from the ESEF taxonomy used and creation of extension elements where no suitable element in the ESEF taxonomy has been identified;

• evaluating the use of anchoring in relation to the extension elements; and

• evaluating the appropriateness of the format of the consolidated financial statements.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

In our opinion, based on the procedures performed and evidence obtained, the consolidated financial statements of the Group as at and for the year ended 31 December 2024 presented in ESEF format and contained in the aforementioned attached electronic file, have been prepared, in all material respects, in accordance with the requirements of the RTS on ESEF.

Our opinion does not represent an opinion on the true and fair view of the financial statements as this is included in our Report on the Audit of the Financial Statements. Furthermore, we do not express any assurance with respect to other information included in documents in the ESEF format.

KPMG Croatia d.o.o. za reviziju 30 April 2025

Croatian Certified Auditors Eurotower, 17th floor Ivana Lučića 2a

10000 Zagreb Croatia