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TATRY MOUNTAIN RESORTS AS (2/2018) Amended Annual Report 2016/17

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  • 2016/2017
    a nnua l
    r eport
    Annual Report of Tatry mountain resorts, a.s.and its subsidiaries as of 31/10/2017


    2
    Content
    Commentary from CEO 5
    Operations Review \
    6
    Consolidated Financial Highlights 8
    Our History 10
    Company Profile 12
    Strategy 24
    Key Performance Indicators (KPIs) 32
    Market Analysis and Trends 34
    Risk Factors and Risk Management 40
    Financial Performance Review for the Year 48
    Key Results 50
    Total Revenues and Income 51
    Key Events of the Year 51
    Results by Segments and Subsegments 52
    Key Performance Indicators (KPIs) 53
    Financial Operating Results 54
    Group’s Position at the End of the Year 58
    Financial Position 60
    Cash Flow 61
    Outlook 61
    Corporate Social Responsibility 62
    Environment and Community 64
    Human Resources 68
    Projects 68
    Corporate Governance 70
    Corporate Governance Principles 72
    Board of Directors 72
    Supervisory Board 74
    Audit Committee 76
    Top Management 76
    General Meeting 78
    Supervisory Board Report 80
    The Company‘s Corporate Governance Code 80
    Other Supplementary Data 84
    Contracts with External Advisors and Related Parties 85
    Proposal on Distribution of Profit 85
    Shares 86
    Consolidated Financial Statements 90
    Separate Financial Statements 15 4
    Statement by the Board of Directors 216


    Dear Shareholders, Dear Fans of Mountains,
    TMR has another successful year behind it and we are very delighted to present our best results so far. For the past financial year 2016/17 we managed to improve total revenues by 18.1% and operating profit before depreciation is 25.5% higher. We achieved net consolidated profit of EUR 6.990 mil. with a 155% growth.
    The winter 2016/17 was very strong, with ideal snow conditions throughout most of the season, ending with a solid Easter and skiing also through April in the Tatras, which got reflected in the growth of visit rate. TMR’s hotels were yet again fully occupied during peak periods. Our unique product, Smart Season Pass, used by most of our all-season clients, also helped us. The visit rate in the summer season maintained the level of the prior record-breaking year despite the news about Slovaks, Czechs, and Poles starting to travel to seaside again due to a less tense security situation in traditional seaside travel destinations. The offer of Grandhotel Praha, which provided its clients with comfort in newly renovated rooms, was the highlight in the High Tatras. In the Low Tatras we broadened our offer with the new Hotel Pošta. In the summer season with a grand style we opened to public the newly renovated Polish park Legendia with numerous rides, new themes, and a new brand. The unique roller coaster, Lech Coaster, was the most popular attraction. The total number of visitors in the mountain resorts grew 8% year-over-year and 9% in the leisure parks.
    Our personalized products and services through the Gopass program also contributed to the results. Thus, we want to continue to motivate our clients to register in our loyalty program. As of the end of the financial year, we had 665 thousand registered clients, a 44% increase, also achieved thanks to our mobile app. Online purchase of ski passes and tickets to the parks via the Gopass e-shop continues the upward trend and last year contributed with 24% to total sales in the Tatras and improved 15% year-over-year. Our cooperation with all lodging providers who used our service of ski passes ‘on the pillow’ was successful, as well as our cooperation with regional district tourism organizations. We regularly supported operations of our resorts and parks with our now regular events and attractions, such as the popular Ice Dome at Hrebienok.
    In our Real Estate segment we observed a considerable recovery. We were selling bungalows Holiday Village Tatralandia, Chalets Jasná de Luxe at Otupné and in the new Hotel Pošta**** we completely sold out all apartments designated for sale. We also finished the first phase of the Jasná Center project with a two-story building, which houses a complete visitor service center. There is central dispatching with an info center and a customer service department, a ticket office, the ski school Maxiland, a self-service ski depot, a souvenir shop, and the luxury Crystal Bar with a view of Mt. Chopok and a sundeck. Escalators enable skiers a comfortable transfer from parking lots to ski trails.
    As for growth investments, last year we invested EUR 65 mil. Out of that EUR 44 mil. were invested into modernization of our Polish projects - the Szczyrk mountain resort and Legendia - Silesian Amusement Park. In Szczyrk we obtained necessary permits and built inter alia three new cableways with the transportation capacity of 7,800 persons per hour, a new ski trail, a retention water reservoir for snowmaking, and snowmaking systems. These investments moved the Szczyrk resort a step closer to the level of our Slovak resorts, which is a factor we should see in the results already in 2017/18. In Legendia new rides were added, such as the already-mentioned Lech Coaster. In Slovakia we invested mostly in the real estate projects and infrastructure. We built new Chalets Jasná de Luxe, Jasná Center, Hotel Pošta, renovated hotel rooms and finalized the Krupová-Kosodrevina cableway in the Jasná resort.
    In terms of expanding our operations, last year we came to an agreement to rent and operate the Czech mountain resort of Ještěd, which we plan to modernize completely. In the midterm horizon we plan to add a major alpine resort to our portfolio, which our clients could use within the Gopass program.
    Thanks to our intense investments in prior periods and our unique products, the winter season 2017/18 is smoothly progressing, and we are optimistic about the continuing growth of TMR.
    See you on the slopes!
    Ing. Bohuš HlavatýCEO and Chairman of the Board of Directors Tatry mountain resorts, a. s.
    Commentary
    from CEO


    OPER ATIONS REVIEW


    8 9
    in €‘000 unless specified otherwise 2 016 /17 2 015/16 2 014 /15 2 013 /14 2 012 /13
    Revenues 9 5 910 81 202 70 915 56 309 54 348
    EBITDA 31 516 2 5 111 24 410 18 411 18 5 6 6
    EBIT 17 6 8 8 12 075 11 112 5 094 7 666
    Net Income 6 990 2 74 6 -751 683 6 604
    CAPEX 65 058 23 625 6 000 7 500 3 6 710
    No. of employees 1 289 1 095 804 1 018 1 334
    Earnings per share (EUR) 1,10 0,46 - 0 ,10 0 ,10 0,98
    Hotel Occupancy (%) 56,6 56,4 54,6 51, 2 50,7
    Avg. Daily Rate per Room (EUR) 71, 3 65,4 62,4 6 1,1 55,2
    Visit Rate Mountain Resorts ('000) 2 287 2 121 1 930 1 512 1 616
    Visit Rate Leisure Parks ('000) 855 784 777 598 633
    EBITDA (%) 32,9 30,9 34,4 32,7 34,2
    EBIT (%) 18,4 14 , 9 15,7 9,0 14 ,1
    Equity 113 14 9 10 6 0 0 3 10 3 3 31 10 2 312 101 477
    Debt/Equity (%) 246,9 216,8 215, 3 223,0 210,0
    Debt/Capital (%) 71, 2 68,4 68,3 69,0 6 7, 7
    Debt/EBITDA 8,9 9,2 9 ,1 12,4 11, 5
    Interest Coverage Ratio 1, 5 1,1 1,0 0,7 11, 3
    Consolidated Financial
    Highlights
    Key Operating Results
    Revenues EBITDA EBITDA Margin
    thousands
    Revenues vs. CAPEX
    Revenues Capex
    thousands
    2012/132013/142014/152015/162016/17
    0

    20 000

    40 000

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    120 000

    0% 10%
    20% 30% 40%
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    0 €
    20 000

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    2012/13 2013/142014/152015/162016/17
    5 resorts*
    Group Revenues
    € 95,9 mil.
    Group EBITDA
    € 31,5 mil.
    Group Net Profit
    € 7,0 mil.
    3,4 mil. guests
    2
    leisure parks
    855 ths.
    guests
    3
    mountain resorts
    2.3 mil.
    skier days + 7.8% + 9.1%
    + 155%
    + 8.1%
    + 18,1%
    + 25,5%
    12
    own / managed
    hotels
    € 71,30
    ADR
    56,6 %
    occupancy + 9.0% + 0.1 p.p.
    CAPEX
    € 65,1 mil.
    FTE
    1 289
    + 216%
    * as of 31/10/2017
    TMR in Numbers
    51%
    28%
    9%
    5%
    2%
    5%0%
    Mo
    untain R eso rt s
    Leis ure P ark s
    Hote ls
    Din ing
    Sport s S tore s & S erv ices
    Re al E state
    Ot her
    FY 2016/17 Investments


    10 11
    Our Histor y
    19 9 2
    Establishment of SKI Jasná, a.s., the legal predecessor of TMR, by the National Property Fund of the Slovak Republic in March 1992
    2003
    Change of name to Jasná Nízke Tatry, a. s. in March 2003
    2009
    In June 2009 Shareholders of Jasná Nízke Tatry, a.s. agreed on raising of the capital to EUR 250 million and on renaming the Company Tatry mountain resorts, a.s. Consequently, a new equity issue was listed on the Bratislava Stock Exchange.
    In October 2009 TMR purchased Tatras Cableways (TLD), which dissolved without liquidation and merged with TMR on May 5, 2010. At the same time TMR, as its successor, continues to conduct TLD’s business activity, especially operation of mountain resorts in the High Tatras - Tatranská Lomnica and Starý Smokovec.
    In December 2009 TMR acquired 100% of Grandhotel Praha, a.s. (Grandhotel Praha) and 50% of Interhouse Tatry, s.r.o., which was the owner of Grandhotel Starý Smokovec at that time.
    2 0 11
    In April 2011 TMR
    acquired Tatralandia Holiday Resort. This trademark comprises Aquapark Tatralandia, a lodging facility Holiday Village Tatralandia, an entertainment park Fun Park, and Tropical Paradise. The acquisition of Tatralandia was an important step for TMR in pursuing the strategy to create an all-year tourist destination.
    2 013
    On February 16, 2013 TMR acquired the other 50% in Interhouse, s.r.o. (Grandhotel Starý Smokovec).
    As of May 1, 2013 subsidiaries of TMR - Tatry mountain resorts services, a.s., Grandhotel Praha, a.s. and Interhouse s.r.o. - merged and seized without liquidation.
    Share capital of TMR was decreased from EUR 221.3 million to EUR 47.0 million on October 22, 2013 based on the approval by the Extraordinary General Meeting held on August 22, 2013.
    2 012
    Dual listing of TMR shares on exchanges in Warsaw and Prague took place in October 2012
    In November 2012 TMR through an associated company Melida, a.s. signed a lease contract with the Czech union of physical education for operating SKIAREÁL Špindlerův Mlýn.
    In November 2012 TMR founded Korona Ziemi with a Polish town of Gmin Zawoja, with the purpose of creating an entertainment-
    educational park.
    2 015
    In April 2015 TMR agreed to acquire a 75% share in a Polish entity that owns and since May 2015 is operating Silesian Amusement Park (Śląskie Wesołe Miasteczko).
    2 014
    In March 2014 TMR acquired a 97% share in a Polish ski resort Szczyrkowski Ośrodek Narciarski S.A. (SON).
    2 010
    In October 2010 TMR purchased all shares of Tatry mountain resorts services and thus became its 100% o w n e r.
    TMR initiated cooperation with the resort of Štrbské Pleso in December 2010.


    Bratislava
    Brno
    Pardubice Praha
    WIEN
    BUDAPEST
    UŽGOROD
    WARSZ AWA KR AKOW
    H
    UA
    PL
    CZ
    A
    DE
    LiptovskýMikuláš
    Brezno
    Katowice
    Poprad
    Košice
    12
    Tatry mountain resorts, a.s.
    CAREPAR, a.s.
    Melida, a.s.
    Szczyrkowski ošrodek narciarski S.A.
    Ślaskie Wesole Miasteczko Sp. z o. o. Korona Ziemi Sp. z o. o.
    Tatry mountain resorts CR, a.s.*
    Tatry mountain resorts PL, a.s.
    97,6% 75% 7,3%
    100%
    100%
    50%
    19%
    Basic Overview of TMR
    Tatry mountain resorts, a.s. with its registered seat in Liptovský Mikuláš, SK together with its subsidiaries (TMR, the Group) is the biggest provider of tourism in Slovakia with emerging activities in neighboring countries, especially in Poland. TMR’s revenues primarily come from operation of mountain resorts, an aquapark, and an amusement park, from provision of hotel and dining services, and from sports stores and ancillary services in the resorts. In terms of revenue breakdown, the largest share comes from sale of ski passes and cableway tickets in the mountain resorts (37.8%) and from accommodation services in the hotels that TMR owns and/or runs (23.2%). Additional revenues come from ticket sale in the leisure parks (13.0%), and from ancillary services provided by the dining facilities on the slopes and in the leisure parks (13.9%) and sports and souvenir stores, rentals, and ski schools (6.0%). In addition to the mentioned business activities TMR conducts its business activities in real estate, revenues of which are generated mainly from lease of accommodation facilities and sale of apartments (6.1%). TMR runs all its operations in regions of the High and Low Tatras in Slovakia, in the Polish Beskids and Silesia, and in the Czech Krkonoše Mountains.
    TMR’s key assets in the Low Tatras include: resort Jasná Nízke Tatry, hotels Tri Studničky****, Wellness hotel Grand Jasná****, Chalets Jasná de Luxe****, Hotel Pošta****, Hotel Srdiečko**, and Hotel Rotunda. Aquapark Tatralandia is located in the vicinity of Jasná with Holiday Village Tatralandia bungalows. TMR at the same time owns and leases out Hotel Liptov**, Ski&Fun Záhradky**, Kosodrevina Lodge, and lodging facility Otupné.
    In the High Tatras TMR owns and runs resorts Vysoké Tatry - Tatranská Lomnica and Starý Smokovec, and the ski area Štrbské Pleso, which TMR co-manages. In the High Tatras TMR also owns hotels Grandhotel Praha**** Tatranská Lomnica, Grandhotel**** Starý Smokovec, Hotel FIS*** at Štrbské pleso, Mountain hotel Hrebienok, and rents and operates Hotel Kukučka****.
    As of the end of FY 2016/17 TMR also owns 19% in Carepar, a.s., which holds a 50% share in Melida a.s., which since the winter 2012/13 leases and operates the resort Špindlerův Mlýn in the Czech Republic. In Poland TMR owns 97.6% in the mountain resort Szczyrkowski Ośrodek Narciarski S.A. (Szczyrk); a 75% share in Legendia - Silesian Amusement Park (Śląskie Wesołe Miasteczko); and 7.3% in an educational- entertainment project through a Polish company Korona Ziemi Sp. z o.o. Finally, companies Tatry
    mountain resorts PL, a.s. and Tatry mountain resorts CR, a.s. were established with the purpose of further possible expansion on foreign markets.
    The TMR Group
    Business Segments of TMR
    TMR’s business activities are concentrated into three key segments: Mountains & Leisure, Hotels a Real estate.
    Company Profile
    Revenue Breakdown
    Mountain R eso rt s
    Leisure Parks
    D in ing
    S port s S erv ices & S tore s
    H ote ls
    Re al E state
    37, 8%
    13, 0%
    13,
    9%
    6,
    0%
    23,
    2% 6,
    1%
    Mountain Resort
    V YS O K É TAT R Y
    All-season resort offering complex services for all the types of clients in the summer and winter season Three ski areas - Tatranská Lomnica, Štrbské Pleso and Starý Smokovec Situated in the oldest national park in Slovak republic TANAP 5 months of snow guaranteed 24 km of ski trails, 17 km of snowmaking 20 cableways and lifts Max. transportation capacity 21,385 persons/hour Hotels - Grandhotel Praha**** Tatranská Lomnica, Grandhotel**** Starý Smokovec, Hotel FIS*** Štrbské Pleso, Mountain hotel Hrebienok, Hotel Kukučka****
    Mountain Resort JASNÁ NÍZKE TATRY
    The biggest winter sports resort in Central Europe Ski areas - Chopok North and Chopok South Host of FIS Ski World Cup Ladies 2015, Junior Alpine FIS World Cup 2014 50 km of ski trails, 35.5 km of snowmaking 27 cableways and lifts Max. transportation capacity 31,784 persons/hour Hotels - Hotel Tri Studničky****, Hotel Grand Jasná****, Chalets Jasná de Luxe**** and Hotel Srdiečko**, Hotel Rotunda, Hotel Pošta**** Real Estate - lease out of hotels Liptov**, Hotel SKI & FUN**, Kosodrevina Lodge, lodging facility Otupné, sale of Chalets Jasná Otupné, sale of apartments in Hotel Pošta, Jasná Center
    Mountain Resor t SZCZYRK MOUNTAIN RESORT (Szczyrk)
    EUR 35 mil. already invested into modernization (since April 2014 till November 2017) 23 km of ski trails, 15 km with snowmaking, 4km of lit-up trails 13 cableways and lifts Max. transportation capacity: 22,000 persons/ hour Location - Silesia Voivodship, the Beskids, PL
    LEGENDIA - SILESIAN AMUSEMENT PARK (Legendia, ŚL ĄSKIE WESOŁE MIASTECZKO)
    EUR 26 mil. already invested into modernization (since May 2015) The largest and oldest leisure park in Poland The 40-meter high roller coaster - Lech Coaster - with 4 inversion curves Area: 26 ha 50 attractions Location - Park Śląski (Silesian Park) near Chorzów, PL
    Aquapark TAT R A L A N D I A
    The biggest aquapark with accommodation in Central Europe Unique indoor complex Tropical Paradise also with seawater and authentic corals A Hawaii complex with two artificial surf wave lanes 14 swimming pools (10 year-around) with thermal, sea and pure water 21 steam, water, jet spas, saunas and procedures, a wellness center 26 toboggans and waterslides (6 year-round) and 300 different attractions Liptov Arena - a multipurpose cultural- entertainment sports arena in Tatralandia Housing - Holiday Village Tatralandia 700 beds in 155 bungalows and apartments in 11 theme villages Congress center, 5D cinema, Hurricane Factory wind tunnel, the metal miniature park Tatrapolis Real Estate - sale of apartments in Holiday Village Tatralandia- Location - Liptov Region, SK
    * Tatry mountain resorts CR, a.s. was changed to TMR Ještěd, a.s. \řas of 31/01/2018.


    14 15
    I. MOUNTAINS AND LEISURE
    The main segment Mountains and Leisure includes the ownership and operation of three mountain resorts: Jasná Nízke Tatry - Chopok North and South, Vysoké Tatry - Tatranská Lomnica, Starý Smokovec and Štrbské Pleso (TMR doesn’t own but co-manages ski area Štrbské Pleso), and the Polish Szczyrk Mountain Resort. The resorts currently offer 100 km of trails with transport capacity 75 thousand persons per hour. Since the winter season 2012/13 TMR also co-manages the ski resort Špindlerův Mlýn in the Czech Republic, which has been leased for 20 years to Melida, a.s., in which currently TMR indirectly owns 9.5%. The main segment also includes the Leisure Parks subsegment - Aquapark Tatralandia and Legendia - Silesian Amusement Park. In order to cover complex client’s needs, in the Mountain and Leisure segment TMR offers a wide range of ancillary services, such as ski schools, rental, service, sports stores and dining.
    Mountain Resorts
    V YSOKÉ TATRY (THE HIGH TATRAS)
    The High Tatras as the greatest mountain range in Slovakia are also the oldest national park in our country (Tatra National Park - TANAP). Therefore, all the tourist activities are performed considering the nature conservation and rare biotopes. In the area of the High Tatras the Company owns and operates cableways in Tatranská Lomnica and Starý Smokovec and closely cooperates with the owner of the Štrbské Pleso resort which they manage together.
    TATRANSKÁ LOMNICA
    Winter SeasonTatranská Lomnica resort holds the lead in Slovakia with its longest 5.5 km trail and a 1,300 m vertical drop. The trail in Lomnické sedlo has the highest elevation in Central Europe. The base elevation of the resort is at the bottom station of the 6-seat cableway in Tatranská Lomnica, in 888 m a.s.l., and its summit elevation point is at the exit station of elevated cableway to Lomnický štít in 2,634 m a.s.l. Ski trails of different levels can satisfy all the skiers from beginners to experts guaranteeing five months of snow coverage. Lomnické sedlo (2,196 m a.s.l.) is a trail only with natural snow, and besides advanced skiers it is popular among free riders. The resort is equipped with modern snowmaking system, which reaches the highest point of the Esíčka trail at Skalnaté Lake. In September 2015 the ski portal Skiresort.info ranked the ski resort Tatranská Lomnica among the world’s top 14 resorts with up to 20 km of trails; and in the category “Beginners” it was ranked among the world’s top resorts with infrastructure and services suitable for ski beginners.
    Summer SeasonTatranská Lomnica turns in the summer months into an attractive leisure center for the whole family. It provides possibility of trips to the top of Lomnický štít in 2,634 m a.s.l. The resort is regularly extending its offer of services and today it offers a number of attractions, such as mountain cart rides from the midstation Start and an authentic project for children - Tatras wilderness located in 1,751 m above sea level. It is a natural fun trail from Tatranská Lomnica, around Skalnaté pleso, Starý Smokovec and Hrebienok, to Štrbské Pleso with games, competitions and mini eco-park Marmot Land at Skalnaté Pleso that is suited mainly for children. Youngsters can also enjoy themselves all-year round in an indoor children’s center - The Chamois Land - with a big playground with a maze and a chill-out zone for parents.
    Ski TrailsSki resort Tatranská Lomnica offers up to 46 ha of ski trails (out of which almost 32 ha have technical snowmaking) with a total length of nearly 12 km. The ski trails in the resort are mostly easy (six trails - 5,700 m) to moderate (five trails - 5,190 m) with technical snowmaking. The ski trail for experts in Lomnické sedlo (1,240 m) is best suited for most advanced skiers, with an average angel of almost 47%.
    Transport FacilitiesIn the resort there are three gondolas, and four chairlifts with total length of 10,272 m. The maximum transport capacity is 11,645 persons per hour. Two of the cableways are equipped with shields, so called bubbles, and one also with heated seats and better wind resistant system (RPD). At the beginning of the winter season 2013/14 a new 15-person gondola was completed starting at the Start location leading to Skalnaté Lake with the transportation capacity of 2,400 persons/hour. It substituted the original old 4-seat gondola. The 15-person gondola is design-wise and struction-wise similar to the gondola at the Chopok Mountain South. 37 cabins by Doppelmayr transports
    skiers to Skalnaté Lake in seven minutes and exceeds the vertical drop of 599 m. The cableway resists winds up to 22-24 m/s. The start station of the gondola Štart - Skalnaté Lake starts at 1,170 m a.s.l., and the end station is located at 1,772 m a.s.l. The all-year most attractive cableway is still the elevated gondola to Lomnický štít which can get visitors to the top of the second highest peak of the High Tatras just in 8 minutes, and which has been in operation for 75 years now.
    STARÝ SMOKOVEC Winter SeasonStarý Smokovec resort - Hrebienok and ski trails Jakubova lúka I and II with snowmaking - is oriented during the winter season on beginner skiers and families with children, as well as on alternative leisure activities, such as snowtubing and sledging on 2.5 km long sledging track. A central part is a funicular. The finish station of a comfortable panorama funicular from Starý Smokovec to Hrebienok is the favorite start point for winter hikes to mountain lodges and waterfalls. Attractions made of ice - Tatra Ice Dome and ice sculptures at Hrebienok - are quite popular, as well.
    Summer SeasonIn the summer the resort offers attractions like summer tubing, or trampolines. Starý Smokovec and Hrebienok are also the perfect places for hiking trips to Small or Great Cold Valley. The resort is also well known for its organization of Bear Days, the project dedicated to families with children.
    Ski TrailsSki trails in total length of 3,375 m are more suitable rather for beginners. All three trails are easy. Besides them, the resort offers the longest lit up sledge trail in Slovakia.
    Transport FacilitiesThe resort disposes a modern funicular from Starý Smokovec to Hrebienok and two ski lifts in the area of Hrebienok and Jakubkova lúka I and II. The total transportation capacity of the resort is 2,700 persons per hour, out of which 1,600 is by funicular. Visitors can with this funicular reach the altitude of 1,272 m a.s.l., while in 7 minutes overcome the 255 m elevation from the bottom station (1,025 m a.s.l.).
    ŠTRBSKÉ PLESO Winter SeasonThe resort in the highest Tatra settlement on Štrbské Pleso is suited also for clients requiring the highest standard of services. Nine kilometers of easy and moderate ski trails and more than 26 km cross-country trails are used by
    families with children as well as advanced skiers. Vysoké Tatry - Štrbské Pleso provides its visitors with services such as ski and snowboard rental, ski services and ski school for beginners. The resort is well suited also for leisure skiers.
    Summer SeasonThe resort is in summer a popular place for tourists, since it is an ideal place to start a mountain hike, or simple walks around Štrbské and Popradské pleso. After years of examining the state of Štrbské pleso, in 2008 the boating on the lake with a more than 130-year old tradition was allowed to restart. There are 11 wooden boats and one sports raft anchored to a newly built pier overlooking the Tatra peaks. Orlíkovo Park is available for the youngest clients directly under the ski-jump. For several years now Štrbské Pleso organizes a favorite sports fun event Marmots at the Lake.
    Ski TrailsSki resort in Štrbské Pleso offers its clients several trails of easy (eight trails - 3,220 m) and moderate (five trails - 5,600 m) difficulty. The resort has 8,820 meters of slopes with technical snowmaking. Part of the resort is also lit up and thus suitable for night skiing. All trails in the resort together overcome the elevation of 1,251 m and also because of high levels of real snow belong among the most popular ones.
    Transport FacilitiesThere are eight cableways altogether, out of which there are three chairlifts, four lifts, and one moving belt with a total length of 4,964 meters in the resort. Their maximum transport capacity is 7,020 persons per hour. Two cableways are used to transport visitors towards Solisko station (1,840 m a.s.l.), one 4-seat cableway from the bottom of Štrbské Pleso (1,351 m a.s.l.) and another six-seat cableway from Furkotská dolina. The third cableway is located parallel to the ski-jump, where the other lifts are located too.
    JASNÁ NÍZKE TATRY (THE LOW TATRAS)
    The Low Tatras are the largest national park in our country (the Low Tatras National park - NAPANT ), stretch 82 km in the middle of Slovakia. The second highest peak of the Low Tatras is Chopok, 2,024 m a.s.l. and you can get close to its summit by cableways from Liptov or Horehronie. This is also one of the reasons why Chopok area is the most visited place in the Low Tatras.
    Winter SeasonJasná Nízke Tatry resort is the top ski resort in Slovakia with excellent conditions for winter sports on the both sides of Chopok. The resort offers a lot of slopes on different levels of difficulty from blue to black, as well as twelve freeride zones and a snowpark. After skiing there is an interesting
    Company Profile Company Profile


    16 17
    Specific is the mounting of the booth on two ropes with two power drives, resulting in higher safety and wind resistance. This cableway system consists of 22 cabins, each for 24 persons, which provides a total transport capacity of 2.480 persons per hour. With the bottom station at Priehyba in 1,349 m a.s.l. and top station in 2,004 m a.s.l. the cableway overcomes elevation of 655 meters at a distance of 2,130 meters. Funitel’s transport speed is 7 m/s and the route itself takes about 6.5 minutes.
    The connection from the south side is provided by a cabin cableway - Doppelmayr 15-MGD gondola. This facility has its bottom station in 1.488 m a.s.l. at Kosodrevina and top station just like Funitel at Chopok in 2,004 m a.s.l. Gondola enables operation at wind speed up to 90 km/h and has the maximum slope of 74.91°. Total length of its track is 1.433 m with an elevation of 516 m. With the speed of 6 m/s the route takes 5.44 minutes. Total transport capacity with its
    18 booths, 15 seats in each, is 2,800 persons/ hour.
    The connection to the bottom station of Funitel is provided by another novelty in Slovakia, the skew lift Twinliner 50-SSB by Doppelmayr. This new cableway enables clients to get from Biela Púť to the bottom station of Funitel even in unfavorable weather when other cableways do not operate. The cableway consists of one 50-seat wagon which travels for four minutes at the 2 m/s speed. The total transport capacity is 324 persons per hour. The wagon moves on rails and is pulled by a tow rope. The entire track is built on 26 supports above ground.
    The last three cableways were used for the first time in mountain conditions in Slovakia in the winter season 2012/13, and the 15-seat gondola is also the first one with its special design.
    SZCZYRK MOUNTAIN RESORT (SZCZYRK)
    Szczyrk is located in the Polish Beskid Mountains near the town of Szczyrk. The resort offers skiing possibilities on 65 hectares of perfectly laid-out and long trails. There are 23 km of ski trails and 13 cableways and lifts available. The longest trail is 5.3 km long. The maximum transport capacity is 22,000 persons per hour. TMR has been gradually modernizing and expanding the resort. Since the operations takeover it had invested over 30 million euros into its development. Before the winter season 2017/18 TMR added three new cableways with the transport capacity of 7,800 persons per hour, a new ski trail, and a water retention reservoir for snowmaking.
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    apr?s-ski program available for both skiers and non-skiers. In the fiscal year 2011/2012 cableways to Chopok from the north and south side have been completed together with a skewed ski elevator Twinliner Biela P? - Priehyba, which thus again after many years restored the connection between both sides of the resort. In October 2012 the Jasn? resort was voted among the top 10 winter destinations in Europe by the prestigious tourist guide publisher Lonely Planet. In April 2014 Jasn? N?zke Tatry was awarded five prestigious awards in the international Skiareatest in Italian Bolzano and thus succeeded among strong alpine resorts. In November 2014 during World Snow Awards in London Jasn? was awarded for the category Best Up And Coming Resort. In November 2015 Jasn? won a prestige prize in Kitzb?hel, a ?ski Oscar? in the World Ski Awards in the category The Best Slovak Ski Resort of 2015. By winning this prize, Jasn? has been included among the best 24 resorts in the world.
    Summer SeasonThe resort in the summer offers a wide range of sports - mountain carts, Tarzania, Nordic walking and a ride in the bike park on nearly 13 km of trails. The bike park on one of its four tracks of various levels of difficulty from Rovn? hoa uses natural conditions and together with wooden hurdles and landscape provides good conditions for training of professional riders as well as for less experienced or amateur cyclist and families with children. On the north and south side of Chopok for families with children there is an educational fun trail with and entertainment program- Drakopark Chopok. At Chopok South near the Kosodrevina area there is a free cableway museum Von Roll from 1954.
    Ski TrailsJasn? N?zke Tatry as the largest ski resort in Slovakia is
    suitable for all categories of visitors. Wide range of different types of slopes lies on 91 ha of land. There are 50 km of ski trails. On 35.5 km of trails is built a fully automated high-pressure technical snowmaking system with 527 snow guns. There are eight easy blue trails in total length of 20,235 meters, 15 moderate red trails in total length of 17,910 meters and six black trails for experts in total length of 7,325 meters. In addition to these trails the resorts offer seven ski roads in total length of 4,520 meters. In the resort there are also 12 free ride zones, two cross-country skiing trails and a snow park. One trail in total of 990 meters is lit up and used for night skiing.
    Transport FacilitiesThe resort operates 27 cableways and lifts with a total transport capacity of 31,784 persons per hour. There are three 6-seat cableways, four 4-seat cableways and one 2-seat cableway. There are also five cabin cableways - 24-seat Funitel, two 15-seat gondolas and one 8-seat gondola and 50-seat ski funicular Twinliner. For the winter season 2016/17 a new 15-person gondola was completed in the Krupova - Kosodrevina location with the transportation capacity of 2,800 persons/hour and a 403-meter vertical drop. Thanks to this gondola skiers can enjoy a comfortable ride and a smooth transfer to another 15-person gondola, which takes them all the way to the top of Mt. Chopok.
    With construction of Funitel Doppelmayr 24-FUN from Priehyby to Chopok was completed the link between the north and south part of the resort as well as convenient transport from the valley station of Z?hradky resort (together with 6-seat cableway) up to Chopok. Cabin cableway Funitel is one of the most advanced technologies of its kind in the world and can operate at wind speed up to 120 km/h.


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    Dining
    TMR operates the following dining facilities and après-ski bars:
    VYSOKÉ TATRY:
    Café Dedo - 2,634 m a.s.l.Stylish cafe with a panoramic terrace at the second highest peak in Slovakia is called Café Dedo. Its name is related to Lomnický štít which has always been called Dedo. Café is also a good place for private social events at the highest level.
    Restaurant Skalnaté pleso - 1,751 m a.s.l.Restaurant with one of the highest elevation points in the High Tatras. Its 250 seats sunny terrace provides beautiful panoramic views of the surrounding peaks and mountain trails as well as of the steepest slope in Slovakia, Lomnické sedlo.
    Restaurant Pizza & Pasta - 1,145 m a.s.l.At the mid-station Štart half way to Skalnaté pleso there hides a restaurant with Italian cuisine as well as with traditional Slovak meals. The restaurant is in operation the whole winter season. In the evening, this place offers an evening full of culinary experiences with an interesting program.
    Après-Ski Bar Tatranská Lomnica - 888 m a.s.l.The greatest après-ski bar in the Tatras and in Slovakia at the bottom station of the lift in Tatranská Lomnica offers skiers refreshment and entertainment not only during skiing. During the summer the 158-person après-ski bar provides a kids’ play room for families with children and a chill zone.
    Restaurant Hrebienok - 1,280 m a.s.l.
    A popular spot with a sun deck directly in Mountain hotel Hrebienok offers traditional fast food and snack, alcoholic and non-alcoholic beverages.
    Retro Station Restaurant - 1,173 m a.s.l.The old cableway station Štart has a fully renovated interior. The history of the building is exhibited in the wall pictures. The restaurant’s exterior is original with the original sign ŠTART. A sun terrace with sunbeds enables relaxation. The menu includes homemade hamburgers and a wide range of beverages.
    Restaurant Slalom - Štrbské Pleso 1,400 m a.s.l.A modern cafeteria in Štrbské Pleso right below the Interski trail at the start station of the cableway to Solisko- Expres catering national and international cuisine. The spacious and sunny spot also provides a unique view of Front Solisko.
    Bivac Pizza - Solisko 1,840 m a.s.l.A pizza and snack restaurant with a sun deck offering panoramic views of the valley, Štrbské pleso, Mt. Kriváň, or the Low Tatras.
    HUMNO Restaurant & Music Pub - Tatranská LomnicaA unique multipurpose facility with services of an après-ski bar, a culinary restaurant, a cocktail bar, and a disco club. JASNÁ NÍZKE TATRY:
    Happy End Restaurant - Biela Púť 1,117 m a.s.l.A stylish mountain ski-in ski-out restaurant Happy End, is an ideal center of nightlife and winter club season in Liptov with a years-long tradition. During the day it offers a quality restaurant with a capacity of 500 persons, après-ski entertainment after skiing and at night the greatest disco in the region with live concerts and the capacity of 1.000 guests.
    Bernardino Burger - Brhliská 1,423 m a.s.l.This restaurant offers a great burger menu, salads and desserts and is located at the top point of a Grand Jet cableway, where an easy - so called blue, trail starts. For parents with children is available the largest children’s room on the slope.
    Von Roll Restaurant - Luková 1,670 m a.s.l.The observation a la carte restaurant and a self-service restaurant Von Roll is built in a historic building in the ski lift station of Luková. Historic features and furniture remained even after the reconstruction and thus give the Museum Restaurant an unusual atmosphere. In the winter it provides unique culinary experiences as Tatra Dinner of Experiences. Après-ski Bars
    Après-ski bars in the resort offer daily snack on the slope, regular events, great music, drinks and competitions. Après-ski bars are the meeting points for skiers directly on the slopes and a place for a quick snack.
    Crystal Bar Happy End - Biela Púť 1,117 m a.s.l. - the only bar on the slopes that offers genuine champagne and the widest selection of wines and sparkling champagnes.
    FUNIBAR - Priehyba 1,349 m a.s.l. - new après-ski bar at Priehyba, at the entrance station of FUNITEL with opening glass roof and cupola. It is one of the first of its kind in Central Europe.
    SNOW BAR - Zadné Dereše 1,440 m a.s.l. -is a place for snack at Chopok South.
    Après-ski bars at base stations Záhradky - 1,028 m a.s.l., Biela Púť, Happy End - 1,117 m a.s.l., the après-ski bar Lúčky - 943 m a.s.l., and après-ski bar Krupová - 1,084 m a.s.l. are the natural gateways to the ski resorts.
    Snack Bar - Rovná Hoľa 1,491 m a.s.l.Snack Bar Rovná Hoľa has a superb location with convenient access for skiers transported by the 6-seat cableway from Záhradky.
    Rotunda Restaurant - Chopok 2,004 m a.s.l.A reconstructed viewpoint restaurant with a 360-degree panoramic view located at 2,004 m n.m. at the top of Chopok Mountain with a capacity of 100, five apartments, and a sunny 200-person terrace. It is Located at the exit station of Funitel and 15-seat gondola. Rotunda Restaurant offers a magnificent view of the High and West Tatras and Horehronie. The Rum Bar with the highest altitude located in Rotunda offers visitors 61 world-famous brands of rums. In Rotunda’s foyer there is the 60-person self-service Energy Bar.
    Restaurant Kosodrevina - Kosodrevina 1,494 m a.s.l.Restaurant is popular mainly due to its spacious and sunny terrace facing south. A part of this restaurant is a mini museum - Cableway operator’s room, which is devoted to the cableway and all the visitors of mountains.
    Angus Restaurant - Biela Púť 1,117 m a.s.l.A new luxury restaurant in Hotel Pošta**** inspired by American cuisine, located right in the center of Jasná. The a la carte menu offers steaks and dishes made of local ingredients. The extraordinary interior completes cozy ambiance.
    TATRALANDIA:
    Paradiso RestaurantA tropical restaurant with a 200-person capacity, located in the heart of Tropical Paradise Tatralandia. Culinary cuisine with exotic and grilled dishes, or homemade pasta set in a unique interior with tropical flora.
    Barbados BarA 24-seat bar located among four pools with clear and sea water with a wide range of tropical mixed drinks and fresh lemonades.
    Zbojnícka koliba Offers various traditional dishes in the surroundings inspired by a Liptovian village within Holiday Village Tatralandia.
    Marina BarA stylish marina bar next to a pirate ship in Tropical Paradise caters creative variations of fresh-baked pies, ice cream desserts and smoothies.
    Tiki BarThis joint with the view of the surfing wave offers refreshing mixed drinks, juicy cocktails and a wide selection of ice cream flavors.
    Hurricane BarThe quirky Hurricane Bar offers a wide selection of beverages right at the free fall simulator Hurricane Factory Tatralandia.
    MedranoAn outdoor terraced 400-seat summer restaurant Medrano in Tatralandia has a unique yacht-shaped roof design with views of Liptovska Mara and surroundings. The stylish joint offers traditional cuisine with fresh salads and desserts.
    LEGENDIA:
    Old Town Cafe A café at the entrance, offering high-quality coffee, fresh desserts, sandwiches, and croissants.
    Ice DreamA dream come true for all lovers of icy delicacies, ice creams and sorbets.
    Crunchy Bite, Old Mine Tavern, Marina Snacks, Pod Dębem, Fritek, Sweet Refreshments and snacks in Legendia, offering sandwiches, hamburgers, and Belgian fries.
    Oberża Lecha A restaurant offering a wide choice of Polish dishes.
    Pizza & Pasta Perfect for fans of Italian dishes, pizza and pasta.
    SZCZYRK:
    There are two dining facilities - Après-ski bar and Bistro pod Gondolą.
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    Sports Services and Stores
    Ancillary services and sports retail stores are run under the Tatry Motion brand, which provides synergic effects and allows them to be easily identified. A chain of stylish stores offers trendy fashion of different brands.
    The chain of stores in the High Tatras consists of three operations in Tatranská Lomnica - New Shop, Intersport Rent, and Outlet Slovakia; one in Starý Smokovec in the building of railway station- Shop & Rental Starý Smokovec; Shop Hrebienok at the exit station of the funicular at Hrebienok; and two in Štrbské Pleso - Intersport Rent and Vist Fashion Štrbské Pleso.
    In Jasná Nízke Tatry Tatry Motion stores are located at Biela Púť and include Shop, Rental, Central Shop, and Souvenir Shop Priehyba. At Záhradky there is Tatry Motion Shop & Ticket Záhradky. The stores also include a reservation point for services of ski school. The location near Grand Jet cableway includes a store with luxury clothing Vist Shop. In the area of Hotel Grand there is Grand Shop, at the top of Chopok Mountain there are Souvenirs at Demian’s, and at Chopok South there are Shop & Rental Srdiečko and Shop & Rental Krupová. Some of the stores also include ski rentals and service stations. The services were expanded by Test center Völkl Lúčky and Outlet Demänová.
    In Aquapark Tatralandia there are stores offering souvenirs and specialized summer and sports merchandise - Paradiso Shop, Aquashop, Exit Shop, Tatry Motion Shop, Coqui Shop, and Darčekovo in Tatrapolis. FITBAR in Liptov Arena is a mix of a sports store and a sports refreshments stall.
    Visitors of Legendia - Silesian Amusement Park can shop for souvenirs and gifts in: Kowalski´s Store, Candy Shop, Diamond River Gifts, and Skarbcu Lecha.
    Leisure Parks
    AQUAPARK TATRALANDIA
    Aquapark Tatralandia with lodging facility Holiday Village is one of the largest all-year aquapark in Central Europe. It offers its customers 14 pools and 26 waterslides, out of which ten are all-year and five are summer ones, as well as sauna world and Wellness Paradise. Fun Park Tatralandia is also located within the aquapark. The year-round indoor shell-shaped facility Tropical Paradise with a sea water pool, a unique roof deck allows sunbathing and provides a snorkeling pool with authentic coral reefs and marine life. New for the summer 2016 was the launch of an indoor simulator, Surf Waves Tatralandia, which utilizes the technology of an artificial river creating waves similar to ocean. The unique Hawaii complex includes four lanes of 68 square meters. The new attraction guided by experienced instructors is suitable for age groups 6 and over. In 2017 Tatrapolis - a park with metal miniatures of world-famous structures, was added in Tatralandia.
    LEGENDIA - SILESIAN AMUSEMENT PARK (ŚLĄSKIE WESOŁE MIASTECZKO)
    Silesian Amusement Park near the Polish town of Chorzów is the largest and oldest theme park in Poland. It was launched in 1959. It spreads on the area of 26 ha. It is located in the upper Silesian industrial district with its unique ‘green oasis’ of Silesian Park (Park Śląski). A 40-meter high roller coaster - Lech Coaster is the park’s most popular attraction. There are 50 attractions in the park. TMR owns a 75% share of the park and has been operating it since May 2015. Since the operations takeover TMR had invested around EUR 30 mil. in the park.
    II. HOTELS
    Within the Company, TMR in its hotel segment currently owns and operates portfolio of nine renowned hotels and lodging facilities in the High and Low Tatras, in categories ranging up to four stars, and leases three hotels and lodging facilities to third parties. All hotels operated by TMR offer together more than 2,000 beds. The hotels can please a wide spectrum of clients from individuals and families to corporate clientele. Hotel facilities offer a suitable place for conferences and business meeting effectively covering the off-peak season.
    THE HIGH TATRAS
    Grandhotel Praha****, Tatranská Lomnica125 rooms, 236 bedsIt is situated in the center of Tatranská Lomnica, at the foot of Lomnický štít, in the heart of the High Tatras. Its history dates back more than 110 years, since the grand opening in 1905. The wellness center Grand Mountain Spa combines local spa tradition with healing effects of the Tatra’s nature. During FY 2016/17 the hotel’s rooms underwent a renovation in the ‘Classic’ style.
    Grandhotel****, Starý Smokovec 75 rooms, 147 bedsFrom the point of view of history, location, or architecture this Grandhotel is justly considered one of the most prestigious hotels not only in the High Tatras, but also in Slovakia. Its unique vintage ambiance is attractive for its traditional Austrian-Hungarian cuisine and views from its spacious Art nouveau rooms.
    Hotel FIS***, Štrbské Pleso80 rooms, 194 bedsMountain ski in - ski out Hotel FIS is located right below the FIS slope, in the center of a sport area at Štrbské pleso. The
    location is its main competitive advantage. The first truly dog-friendly hotel in Slovakia is located in the elevation of 1,346 m and offers newly renovated rooms. The hotel with its own sports arena and a pro fitness center also offers a natural wellness & spa designed in a mountain-meadow style.
    Mountain hotel Hrebienok 40 rooms, 61 bedsA hotel with summer operation and a unique location at the foothill of Slavkovsky Peak in the tourist trails hub at Hrebienok. The hotel is accessible from Stary Smokovec by a funicular (7 minutes), by foot via the green tourist track, or via a paved road (45 minutes). Elevated at 1,285 m a.s.l. the hotel offers 40 simply and economically equipped tourist rooms in lower standard with bathrooms and a dining facility.
    Hotel Kukučka**** 45 rooms, 170 bedsSince the end of 2016 TMR has been leasing and managing 45 rooms in the hotel and residences Kukučka for private owners, mainly rooms of the LUX type and suites. TMR also operates the hotel restaurant. Hotel Kukučka with its great location underneath Lomnicky Peak is close to ski slopes in the mountain resort Vysoké Tatry - Tatranská Lomnica. Hiking trails, cableways, and the restaurant Humno Music Pub are accessible only a few meters from the hotel. The whole hotel resort is divided into 4 buildings. In the main building there are 2-bedroom rooms and suites; in the residences there are 1- and 2-bedroom suites available for guests. Wide hotel services satisfy even the individual needs of a higher-end client, as well as families with children.
    Current Information on TMR Mountain Resorts as of the End of Fiscal Year\ř 2016/17
    Length of trails (km)
    Capacity (persons/ hour)
    Trails with technical snowmaking (km)
    Number of cableways/ lifts Snowmaking units
    the Low Tatras 50 31 784 36 27 595
    Jasná Nízke Tatry 50 31 784 36 27 595
    the High Tatras 24 2 0 615 20 20 284
    Tatranská Lomnica 12 11 6 4 5 11 9 227
    Starý Smokovec 3 2 700 1 3 0
    Štrbské Pleso 9 6 270 9 8 57
    The Polish Beskid Mountains 23,0 22 000 15,0 13 200
    SON 23,0   22 000 15,0 13 15
    Total 9 7, 3 74 3 9 9 70,8 60 1 079
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    Company Profile Company Profile
    N Í Z K E TAT R Y
    Hotel Tri Studničky ****, Demänovská Dolina 36 rooms, 100 bedsIts architecture and layout of exteriors and interiors complements the surrounding mountain environment and the panorama of local mountains. It is located in a beautiful forest area near a mountain stream. In 2010 new conference rooms with attractive views of a mountain stream were added, as well as a renovated wellness center with the first beach in the Tatra Mountains. These services complete the gap in the offer of this authentic boutique hotel.
    Hotel Grand****, Jasná 157 rooms, 311 bedsThis mountain hotel is situated in the center of Jasná, at 1,100 m a.s.l., right near the start station of the 8-seat cabin cableway Grand Jet. Its ski in-ski out location is exceptional, as well as the renovated wellness center or a multipurpose conference hall with a 350-person capacity. This kids-friendly hotel is well-suited for families with children.
    Hotel Pošta****31 rooms, 72 bedsThe new Hotel Pošta located in the heart of Jasná offering 24 design deluxe rooms, 7 spacious apartments, a cozy boutique wellness center, culinary restaurant Angus, own cosmetics brand Tatry Wellness Elixír, baby and dog sitting, daily newspapers, shoes cleaning, concierge services, and much more.
    Chalets Jasná de Luxe **** 16 chalets, 32 apartments, 128 bedsLuxury apartments in the style of French alpine lodges provide a 4-star hotel quality. Their strategic advantage is their ski-in ski-out location directly on the slope at Záhradky (18 apartments) and at Otupné (14 apartments) and their provision of premium services. Each chalet has two apartments, each with two separate bedrooms. Guests can visit a private spa in the basement of some chalets.
    Hotel Srdiečko**45 rooms, 125 bedsA ski-in ski-out hotel with an unbeatable ski in-ski out location, directly below the slopes in the resort of Jasná Nízke Tatry - Chopok South. A friendly ambiance and a homey feel surrounded by nature in a less busy area of Jasná, equipped with a new wellness center, saunas, and an open-air jacuzzi.
    Hotel Rotunda3 rooms, 12 bedsLocated at the top of Chopok Mountain in the Low Tatras at 2,004 m. Hotel Rotunda is a part of the renovated facility Rotunda, which connects the north and south side of Chopok Mountain with cableways The ski in ski out hotel with the highest elevation offers lodging for the most demanding clients that want to enjoy a top experience in comfort and seek out an absolute escape. The hotel includes a panoramic restaurant Rotunda with Slovak and world cuisine, Energy Bar with quick snacks, and Rum Bar with a selection of specialty world rums.
    Holiday Village Tatralandia155 rooms and apartments, 700 bedsIt is a unique lodging resort of its kind in Slovakia in the vicinity of the Aquapark Tatralandia. It consists of 155 stylish bungalows and apartments, divided into 11 theme villages, with reception, restaurant and other hotel services. This complex offers an ideal environment for family or individual holiday any time of the year. It offers plentiful activities, such as sports facilities, playgrounds, game zones, bonfires.
    III. REAL ESTATE
    The goal of this segment is to build infrastructure and buildings in the mountain regions. In its realization the Company plans to capitalize on the unique location in the High and Low Tatras region. TMR’s strategy in this segment is mostly development, construction, and sale of apartments and non-housing areas. Last year another phase of the Chalets Jasná de Luxe Center project was completed and further construction is underway. At the same time development of the project Jasná Center is still ongoing. Alongside these projects necessary infrastructure is being built for the natural development of tourism in the following areas - cableways, infrastructure, trails, information signs, etc. TMR plans its real estate projects mostly on traditional, urban areas, where sport and tourism have been part of history for decades.
    The Company within the Real Estate segment owns and leases out hotels Liptov**, SKI hotel**, Kosodrevina Lodge, and lodging facility Otupné in Jasná. TMR has also been offering bungalows in Holiday Village Tatralandia for sale. Last year all the apartments in the newly built Hotel Pošta were sold. Revenues from the Real Estate segment come mainly from the hotel leases, from sale of bungalows Holiday Village Tatralandia and sale of apartments Chalets Jasná de Luxe and Hotel Pošta.
    Chalets Jasná de Luxe CenterChalets Jasná de Luxe Center consists of thirteen newly built deluxe chalets directly on the slope of Otupné in the Jasná resort. In each chalet there are two apartments,
    joined with an optional living room door. Each chalet includes a spa. For property owners TMR provides facility management and sale of vacant capacities.
    Jasná CenterThe first phase of the project Jasná Center, which was finalized at the end of FY 2016/17, includes a two-story building with a complete service center for visitors. There is the central dispatching with an info center and a customer service department, cash registers, ski school Maxiland, a self-service ski depot, a souvenir shop, and the luxury Crystal Bar with a view of Mt. Chopok and with a sundeck. Escalators provide a comfortable transfer for skiers from parking lots to ski trails.


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    VISION
    By capitalizing on our position of a natural monopoly due to the unique position of the Tatras, to become a premier, internationally renowned tourism services provider striving to revive mountain resorts, aquaparks, theme and amusement parks in the region of Central and Eastern Europe from the investment, sports, cultural, and social point of view.
    MISSION STATEMENT
    TMR’s mission is to provide services in tourism at a constantly increasing level, in particular through business activities divided into three key segments - Mountains & Leisure, Hotels, and Real Estate, where the Mountain & Leisure segment covers operation of mountain resorts, an aquapark, a leisure park and additional services throughout the year. The Group plans to fulfil its mission through synergies leading to a complex satisfaction of both, its clients and shareholders.
    COMPETITIVE ADVANTAGE
    As opposed to other operators of mountain resorts and tourist services in the region of Central Eastern Europe, TMR holds a position of natural monopoly due to the unique geographical location of TMR’s key mountain resorts in the highest mountain range in the region - the Tatras and due to a long history and significant local brands of the resorts in Poland and Czechia. This advantage predetermines them to be premier tourist destinations in Central and Eastern Europe. Besides the attractive mountain environment and the resorts’ history, the following facts form the competitive advantage for TMR:
    Through its loyalty program GOPASS the Group is able to build and sustain a wide client base in Slovakia, Poland, and Czechia during both the winter and summer season. There are 64 million people living in TMR’s key target countries within the CEE region, and their economic power and leisure spending has been increasing from year to year. The Poprad Airport ensures easy access by air from key European cities outside the mountainous area, e.g. London, Warsaw, Riga, Tel Aviv, and by charter or private flights from summer destinations, such as Turkey, Bulgaria, Greece, and Albania. To the east of the Tatras there are ski resorts with only limited comparable services. The high altitude provides a competitive advantage for TMR, comparing to other resorts in the region, since it significantly mitigates the risk of unfavorable weather as a result of global warming. TMR is able to capitalize on intra-segmental and intra-
    subsegmental synergies in sales, purchase, operations, and support areas of the Group. TMR has years of experiences and know-how in operation of mountain resorts, leisure parks, and ancillary tourist services, as well as in building capital-intense infrastructure. TMR’s business model is well diversified with revenue generation from mountain resorts, leisure parks, hotels and complementary services. The size of the Group and its years of experiences and success enables an easier access to capital TMR mitigates the risk of seasonality with its summer season comparably strong to its winter season thanks to its summer cableway operations and summer activities, popularity of hotels in the mountain resorts, the summer operation of Silesian Amusement Park, and the all-year operation of Aquapark Tatralandia
    BUSINESS STRATEGY
    The long term strategic goal of the Group for the next ten years is to gain a leading role in winter and summer tourism in the region of Central and Eastern Europe. Leadership in the area of tourism provides TMR with the ability to set trends and standards in this industry. At the same time it leads the Group to differentiation. As a result, TMR works on offering premium services for reasonable prices in comparison with other similar resorts in Europe. A wide spectrum of services and their quality are the key for the Group’s direction. This goal is based on three pillars, which are highly interconnected:
    PILL AR 1: INCREASING QUALITY WITH INVESTMENTS
    By the end of 2017, for the last 11 years TMR had invested in its resorts and hotels around 300 million euros. As a result of these investments, the services provided by TMR in the High and Low Tatras, in Polish Szczyrk and Legendia improved significantly. TMR Slovak resorts thus reached the level of alpine resorts and increased their leading position in the region within the industry, whereas Polish Szczyrk is still undergoing this transformation. Investments completed in in the Slovak mountain resorts in the last 11 years include eleven new cableways, which means an increase of the transportation capacity by 59%; extension of technical snowmaking by more than 100% to total of 56 km of ski trails with snowmaking and 879 snow guns; ski trail areas larger by 48%, in total length of 74 km in both the High and the Low Tatras; or tens of après ski bars and restaurants on the slopes of the ski resorts. In the Polish Szczyrk resort the first phase of the planned modernization in the amount of more than EUR 30 mil. was executed last year. Also, more than EUR 30 mil. have been invested so far into the Polish amusement park Legendia’s attractions and services since the operations takeover in May 2015. Other investments were
    Strategy
    Increasing quality with investments Strategic acquisitions and expansion of operation in CEE
    Constant operations & services enhancement
    EUR 295 million over 11 years
    New modern cableways
    Renovating hotels
    Expanding resorts
    Capitalizing on completed investments
    Modernization of Szczyrk, and Legendia
    Aquapark Tatralandia 2011
    Špindlerův Mlýn ski resort (9.5%, CZ)
    Korona Ziemi (7%, PL)
    Szczyrk mountain resort, PL 2014
    Legendia - Silesian Amusement Park (75%, PL) 2015
    Planned acquisition of an alpine resort
    Enhancing customer experience through synergies
    Focus on affluent clientele
    Trendsetter in the region
    Quality management
    GOPASS loyalty program and e-shop
    Innovative technologies
    aimed at improvement and renovation of accommodation capacities, and enhancement of infrastructure in all the resorts and at enhancement of services and operations, such as the Tropical Paradise in Aquapark Tatralandia.
    In the following periods TMR plans for its resorts in the Slovak Tatras to grow organically and capitalize on the completed investments. Future CAPEX in the Slovak resorts will mainly cover maintenance investments and investments into additional enhancement of services provided, tailored to customers’ needs, such as lodging facilities, après-ski and dining options, and other complementary services. As for investments into development of the last acquired assets, the same as in Slovakia, TMR plans to continue to develop “The New Era of Szczyrk and Silesian Amusement Park”. TMR plans to get the Polish Szczyrk resort to the level of its Tatra resorts.
    PILL AR 2: STRATEGIC ACQUISITIONS AND EXPANSION OF OPERATIONS IN CEE
    After fulfillment of the primary vision of - New Era of the Tatras - in 2012/13, TMR currently concentrates on strategic acquisitions of ski resorts and amusement parks on the local market, as well as on the international level, namely in the region of Central and Eastern Europe. The most recent addition to the Group`s portfolio was Legendia - Silesian Amusement Park in Poland in May 2015. Other key acquisitions include the mountain resort Szczyrk in the Polish Beskids from March 2014 or Holiday Resort Tatralandia, acquired in April 2011, which includes Aquapark Tatralandia and Holiday Village Tatralandia. Strategic expansion of the operations on the neighboring Czech market includes an indirect minority interest in Melida a.s., the operator of the Špindlerův Mlýn resort. In 2017 TMR made an agreement with the Czech town of Liberec for TMR to rent and operate the ski resort Ještěd with the contract signed after the end of the fiscal year 2016/17. In the mid-term horizon TMR plans to broaden its portfolio with a major alpine resort, which would
    be easily accessible for TMR clients, sufficiently large (over 100 km of ski trails), and included in the GOPASS program.
    PILLAR 3: CONSTANT OPERATIONS & SERVICES ENHANCEMENT
    Management wants to achieve intensive growth of the number of visitors primarily by intensive customer orientation. Strategic steps to achieve this goal include increasing the variety and quality of the services provided. TMR expands the scale of attractions offered and improves the quality of ski schools, ski equipment rentals, and dining facilities on slopes. Moreover, it continuously improves the offer of après ski possibilities. The Group also tries to optimize transport possibilities to its resorts and cooperates with local business entities on the level of regional clusters. TMR prefers to cooperate rather than compete with them; it wants to build on their success and provide their customers easy access to its nearby mountain resorts and leisure parks and a variety of attractions for children, adrenalin sports for the young (e.g. bike parks), and relaxation zones. Regarding accommodation possibilities, TMR focuses primarily on four-star hotels and improvement of their wellness and dining services. Other strategic steps include focus on affluent clientele, essential quality of management and staff, and a sophisticated marketing strategy. Another key to TMR’s growth is innovation. In regards to that, TMR acts as the trendsetter in tourism. The loyalty program GOPASS enables its customers to shop online or via a mobile app and to collect points in its facilities by using its services and pay bargain prices, and at the same time, GOPASS serves as TMR’s Customer Relationship Management and Direct Marketing tool. This loyalty program was awarded in 2015 at The Loyalty Awards in London, where it won in categories: the Best loyalty programme of the year in the travel sector (airlines, hotels, destinations); the Best loyalty programme of the year in Central and Eastern Europe; and the Best Customer Relationship Management (CRM) in a loyalty programme for Direct Marketing. Within this pillar TMR fully utilizes synergic effects among its segments and subsegments, thus it is able to constantly optimize services it provides, as well as to keep expanding its variety of products and services, e.g. an option
    to use services of several mountain resorts and the aquapark with purchase of just one ticket.
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    26 27
    TMR’S ACTION PL AN FOR 2016/17 INCLUDED THE FOLLOWING STRATEGIC STEPS:
    Grow our loyal customer base through our GOPASS program and utilize GOPASS as our Direct Marketing tool Continue the project of modernization of Legendia - Silesian Amusement Park Start executing the project of modernization of the Polish Szczyrk resort Continue to analyze acquisition targets on the regional market in tourism Continue to enhance and expand lodging and dining options in TMR’s resorts Expand après-ski options on the slope and ancillary services in the resorts Actively increase visit rate and popularity of the resorts by organizing sports and outdoor events in the resorts; strengthen and support the resorts’ brand by selecting specific events related to each resort’s character perceived by the clients (families with children, sports, culture…) Continue to enhance ski trails and equipment in TMR mountain resorts and its hotel facilities Continue in utilizing synergies among segments and subsegments in sales, operations, purchase, and support services. Utilize synergies stemming from the cooperation with the water park Bešeňová and the ski resort Špindlerův Mlýn. Continue in cooperation with lodging providers and other business partners in the Tatra region, in form of marketing of the region, and stay packages.
    Management expects that the impact of these strategic steps will continue to be reflected in the Group’s results, and mainly the impact of already completed capital investments of prior years in the total of EUR 295 mil.
    FINANCIAL GOALS
    For the past fiscal year the Group set goals of a stable growth in operating revenues and operating income.
    The short term goal for 2016/17 included a growth in operating revenues of 10.8% and a growth in EBITDA of 15.5%. This financial plan was introduced at the Annual General Meeting on April 28, 2017. Partly thanks to great weather conditions in the winter season 2016/17, TMR achieved, even exceeded its financial plan for the year 2016/17. TMR concluded the year with revenues 6.6% over the plan, whereas EBITDA (earnings before interest, taxes, depreciation and amortization) exceeded the plan by 8.7%.
    MARKETING STRATEGY
    MARKET SEGMENTATION
    TMR’s client base is, besides customers from Slovakia, based mostly on visitors from neighboring countries, such as Poland, the Czech Republic, Ukraine, and Russia.
    The natural market of the Group is in the regions within 200 km radius inhabited by 7.5 million people. This radius includes cities, such as Krakow and Katowice in Poland, as well as Czech cities Ostrava and Olomouc. From the geographical point of view there are other, further markets with limited access to mountains, such as Great Britain, Ireland, Russia (Moscow and Sankt Petersburg), Ukraine, and Baltic countries. Clients from the first group come by cars or buses, while the second group uses air transport.
    The Group also divided potential target groups into the following categories:
    affluent clients mainstream low-cost clients
    The main marketing goals of the Group include clear brand placement on the market by segmentation of clients and focusing of particular marketing strategies on these specific segments that would lead to maximum synergy of all brands covered by TMR. At the same time the Group has been observing a shift of clientele structure towards affluent clientele generating the highest revenues and focusing at products and services with the highest added value. COMMUNICATION OF STRONG TMR BRAND
    Preferred goals of the TMR Group’s marketing include building of the TMR brand awareness by constant communication of image, integrated product communication with the TMR brand, setting communication of the Group
    and all brands that the Group covers in order to reach maximum synergy (cobranding); and by strengthening positive and managed PR and attractive adventure tourism - through event management. In order to create awareness and build a strong company brand, a useful fact without a doubt is that TMR is a publicly traded company listed on the stock exchange in Bratislava, Prague, and Warsaw; it is the strongest player in tourism in Slovakia, or even in Central and Eastern Europe, providing full service resorts or destinations with a high level of service in the region of the High Tatras, Low Tatras, Liptov, the Polish Beskids, Silesia, and the Krkonoše Mountains in the Czech Republic.
    MARKETING ACTIVITIES IN SLOVAKIA
    The Group is using a massive marketing communication in all basic types of media - Internet, television, radio and press, and also outdoor advertising in several forms
    - bigboards, atypical premium billboards placed on walls of buildings in big cities and on main roads, citylights, bus banners and the like.
    As for the Slovak market, also last year TMR cooperated on commercials and sponsored content; in the form of real-time marketing on the T V show The best weather forecast of T V JOJ, in which throughout the whole winter season live images were used from the mountain resorts Jasná Nízke Tatry, Tatranská Lomnica and Štrbské Pleso. Advance sale and mountain resorts spots were broadcasted in radios (Rádio Expres, Funradio, Rádio Jemné, and Rádio Anténa Rock, Rádio Vlna). Cooperation in the form of spot campaigns continued with Rádio Anténa Rock and Rádio Jemné during the winter and summer season. Real-time marketing broadcasted the actual conditions in the mountain resorts and Aquapark Tatralandia.
    As for print media, the Company advertised in the daily Pravda, massively in weeklies of the News and Media Holding publishing house, but mainly in the weekly Plus 7 dní. The Company‘s offer also has a very intensive presentation through a not-for-sale image magazine called TATRY MAGAZÍN, which is available in accommodation facilities and tourist facilities as the only lifestyle magazine about the life in the Tatras.
    In addition to the above-mentioned advertising campaigns, TMR Marketing Department also performs other, no less important activities such as active participation in exhibitions and fairs, cooperation in destination management with entities operating in the region, such as the active Liptov Cluster and several district tourism organizations in the regions. Also cooperation with single district tourism organizations, the origin of which was supported by the Tourism Act, and active subsidy policy
    of the state in relation to the creation and execution of marketing campaigns for regions and creation of regional products supporting tourism, are important for TMR.
    USE OF INFORMATION TECHNOLOGY AND INNOVATIONS
    TMR also keeps in mind the use of innovations and continually improves its communication also via information technology. TMR communicates and informs via individual resort and hotel websites, via the corporate website www.tmr.sk, www.gotatry.sk, or via the e-shop www.gopass.sk. In Poland TMR communicates via the Szczyrk resort’s website www.szczyrkowski.pl and via www.legendia.pl. All TMR hotels communicate with their clients also via a unified website www.tmrhotels.sk. The
    Strategy Strategy
    thousandsPlan vs. Actual Results
    Revenues E B IT DA EBITDA margin
    30 %
    30
    %
    31
    %
    31
    %
    32
    %
    32
    %
    33
    %
    33
    %
    34
    %
    20 12/ 13 2013/ 14 2014/ 15 2015/ 16 2016/ 17
    p la n 20
    16/ 17 0 €
    20 000 € 40 000 € 80 000 €
    60 000 €
    100 000 € 120 000 €
    Slovakia
    Poland
    Czech Rep.
    Hungary
    Other
    Visitors to Jasná
    in the winter 2016/17 Visitors to the High Tatras
    in the winter 2016/17
    47%
    23%
    12%
    5%
    13%
    81%
    8%
    5%
    2%
    4%


    28 29
    mobile app, GOPASS, enables customers to purchase ski passes, entry tickets, and other services directly at resort’s entry gate. This app helped to boost online ski pass sales in terms of skier days by 15.3% in the Slovak resorts.
    The Group uses social networks for communicating with clients on a daily basis. In the Group’s key markets (Slovakia, Poland and the Czech Republic), Facebook is number one in social networks and, therefore, TMR puts emphasis on the development of a wide fan base. At present, the following resort profiles are administered (fan groups) - JASNÁ Nízke Tatry, Vysoké Tatry - The Adventure Mountains, Aquapark Tatralandia, Szczyrkowski Ośrodek Narciarski, Legendia, Tatry Mountain Resorts, a.s. and smaller profiles of individual projects - Tatranská divočina, Happy End Jasná, Liptov Arena, Events in Tatras and TMR hotels, Bernardino Burger Restaurant, Burton snowpark Jasná, Hotel Srdiečko, Nízke Tatry; Après-ski bary Jasná, Tatry Motion, Grandhotel**** Starý Smokovec, Vysoké Tatry; Hotel Fis***, Štrbské Pleso; Hotel Tri Studničky****, Nízke Tatry; Rotunda, Grandhotel Praha****, Vysoké Tatry; Hotel Grand****, Jasná-Nízke Tatry, Holiday Village Tatralandia, Mountain Lodge Hrebienok, Hotel Pošta, Chalets Jasná de Luxe, FUN ZONE Jasná, and others. For marketing purposes the Group also utilizes social networks Twitter, Linkedin, Instagram, or a YouTube channel.
    The Group‘s Marketing Department is continually improving the quality of live video transmissions and online information from individual resorts that are available on the Internet and thanks to which clients can get a better idea of actual conditions in the resorts. Information about changing snow conditions and operation of resorts is published online from each communication point, on both own and external web portals several times a day. Current information about the resorts is provided on LCD monitors in hotels, LCD screens in the resorts, or the dispatching center radio in Jasná Nízke Tatry during the winter season.
    MARKETING ACTIVITIES ON INTERNATIONAL MARKETS
    The Polish market is the most important foreign market for TMR. And that is the reason why we pay Poland special attention also in terms of marketing strategy and communication. In the past year 2016/17, the campaigns used the key visual “ZaPrzyjemność“, which was aimed at potential clients at www.gotatry.sk, as well as on other web sites of each resort. As for Tatralandia, the focus was aimed at a varied offer during summer and at the key visual “Tatralandia - Morze atrakcji w Tatrách“. As for Baltic campaigns and campaigns for the UK market, the website www.gotatry.sk was used. The Group was also using Internet marketing tools such as YouTube, Facebook, Google Adwords campaigns, which together
    with classic media such as exterior advertising space, T V, radio and PR sports reported millions of views just in the winter alone. Advertising was also aimed at print media and a PR campaign. Communication with more distant markets is facilitated mainly through foreign tourist agencies, although smaller campaigns have already been carried out also in Russian-speaking countries.
    MARKETING OF THE POLISH RESORTS
    During the winter season a PR campaign was launched to promote the modernization of the mountain resort Szczyrk, which lasted through the summer and fall. The Polish Legendia - Silesian Amusement Park ran the biggest online and offline campaign in Poland. The campaign focused mostly on the region of Silesia and Malopolske Voivodship. During the season Legendia held mostly evening events with the goal to attract new visitors and introduce new attractions.
    DIRECT MARKETING
    TMR is currently actively using Direct Marketing also in the GOPASS program. As of the end of the fiscal year, 665 ths. members in total were registered in the program, whilst during the year 203 ths. new members joined the program - a 35.5% increase. In the online presale during April through the end of October 2017 30.6% more season passes “Smart Pass” were sold at a special rate yoy for the winter season 2017/18.
    EVENT MANAGEMENT
    The Tatras have become a place that never sleeps also thanks to the opening of new centers of après ski entertainment and night life. Restaurant & Club Happy End in Jasná with an offer of après ski program is also an ideal place for organizing various events mainly during the winter season. The most important events in Jasná include Winter Music Opening, CGC Jasná Adrenalin (world freeride race), and Bikini Skiing (traditional spring downhill race). The High Tatras events include Snow Dogs (Snežné psy) (a grand winter event for families with children in Tatranská Lomnica), and the most visited event Bear Days (Medvedie dni) (a grand summer event for families with children taking place at Hrebienok), or Marmots at the Lake.
    EVENT MANAGEMENT ACTIVITIES DURING 2016/17 IN SLOVAKIA
    November 2016Since November 25, 2016 till April 18, 2017 the Tatra Ice Dome was open to public, built with 90 tons of ice. Its core motive was a Gothic church with elements of the Tatra
    history and nature. This most popular Tatra attraction was built by eight sculptors and seven assistants. This activity was made possible thanks to the cooperation of TMR with the District Tourism Organization (DTO) the High Tatras Region. The popular show ‘Diamonds Fight Night‘ in Aquapark Tatralandia’s Liptov Arena attracted many viewers on November 26. In matches according to the rules of K1, kickbox, box, and MMA female fighters competed as well.
    December 2016On December 3 the grandest winter season launch on the snow - Winter Music Opening with the theme of a luxury oceanic cruise ship. Besides a sports race and an evening party, skiers enjoyed the first official skiing on the north and south side of Mt. Chopok. Grandhotel Praha in Tatranská Lomnica organized a gift collection for orphanages on December 9. At the 75th anniversary of the launch of the gondola to Lomnicky Peak dinners with experiences were held at Skalnate Lake, called ’The Cableway’s 75 Secrets’ in order to support an architectural tender for the new purpose of the cableway’s original start station building in Tatranská Lomnica. On December 23 at the south side of Mt. Chopok at Krupová there was a grand opening of the new cableway Krupová - Kosodrevina. On the day before the New Year’s Eve the mountain resort Jasná organized the 2nd Annual Mass Night Alpine Ski Climb to Luková. Visitors of Tropical Paradise Tatralandia wished each other Happy New Year at the New Year’s Eve party in the swimming pools.
    January 2017Four unforgettable evening experiences - Sky of Stars Dinner at Skalnate Lake - kicked off on January 7 and ran through February by the moonlight at the eleven of 1,751 meters. On January 20 and 21 film and sports celebrities faced off on the slope and in the water at the winter event, Jasná Celebrity Winter Cup. During January
    26 - 28 the a la carte restaurant Von Roll Lukova, set at the highest elevation of 1,670 meters, held the fourth annual Culinary Week. In cooperation with the DTO the High Tatras Region on January 13-15 TMR hosted Tatry Ice Master 2017 at Hrebienok. The fifth annual international World Championship in ice sculptures was attended by nine international teams of ice sculptors, 45 tons of ice were used, and 30 ice sculptures were built, accompanied by popular singers Peter Lipa and Celeste Buckingham. Visitors of Skalnate Lake could experience a simulated expedition camp, ‘Snow Camp’, on four dates under the supervision of experienced instructors.
    February 2017On February 5 during the half-year school break parents with children took part in the fun downhill race on plastic bags, ‘Speed Bag Race’, accompanied by numerous
    contests and an entertainment program. On February 8-9 the European Cup in Men’s Giant Slalom took place on the slopes of Mt. Chopok as the 78th Annual Grand Prix of Demänovské Caves. The eighth annual multi-genre event for families, called ‘Snow Dogs’, was held in Tatranská Lomnica on February 11-12. The Slovak Freestyle Skiing Cup in Slopestyle and Bigair was organized on February 26 in Jasná.
    March 2017 On March 1-5 in its freeride zones Mt. Chopok hosted the top freeride race, CGC Jasná Adrenalin in extreme skiing. 80 racers competed in the best Slovak freeride troughs for valuable points and for qualification to the Freeride World Tour. During the race a rich accompanying après-ski program was prepared for all viewers at Priehyba and in Happy End at Biela Púť. At Štrbské Lake the 62nd International Alpine Skiing Race in giant slalom and slalom was held on March 4-5 as the Slovak Grand Prix. On March 11 skiers in Jasná again stripped to their swimsuits. They welcomed the spring with the ‘Biking Skiing’ event on the slopes and at the Ratrak Stage party at Priehyba or in the Happy End night club. The first spring grill party at Skalnaté Lake was a pleasant distraction for skiers and a sign of the coming spring. On March 24-25 Tatranska Lomnica and Mt. Chopok hosted a championship for the Smart Pass holders, ‘Hero Season Trophy’.
    April 2017The DC snowpark Jasná hosted an unusual event, ‘Helter Skelter’, on April 1, with contests and a speed snowboard race. The regional sports relay event, ‘Liptov Ride’, took place on April 8, part of which was held also on the slopes of Mt. Chopok. On April 14-17 visitors of Jasná could ride a giant Easter egg with accompanied by a fun program to Mt. Chopok. Skiers in the High Tatras enjoyed a fun Easter on April 16 on the slope of Interski at Štrbské pleso dressed in fun carnival costumes. On April 29 ‘Tatra May
    Festival’ was kicked off in the High Tatras. Visitors could entertain themselves, take part in sports activities, and enjoy beautiful views.
    May 2017The first lady of Slovak fashion, Lydia Eckhardt, presented her fashion show Dreams in Liptov Arena at the beginning of May.
    June 2017In June first Tatra attractions were introduced - the launch of boating at Štrbské Lake and the first downhill ride from Mt. Chopok at the Slovak Downhill Championship. World-class tennis came again to the Tatras as Poprad - Challenger Tour 2017. The 15th annual top tennis event as part of the ATP series ended on the eve of the finals on June 23 with a gala evening in Grandhotel Praha in Tatranská Lomnica. At
    Strategy Strategy


    30 31
    this gala event Daniela Hantuchová’s racket was auctioned for charity. On June 27 Hotel Grand Jasná hosted the final judging of the Tatra Knights project with its workshops and the host Andrej Bičan.
    July 2017From July 1 till September 15 the butterfly exhibition in Liptov Arena showcased the fragile lightness of butterflies’ being. During the exhibition estimated three thousand butterflies were showcased on the area of 1,200 m2. The international children’s violin orchestra moved last year from Skalnate Lake to Hrebienok. Young talents from all over the world performed in the open air during July 9-16. In cooperation with the DTO Liptov on July 15 the first of the Dragon Nights was held at Mt. Chopok. The packed accompanying program was made special with tasty dragon delicacies and an adventurous night ride by cableways. The culinary and healthy lifestyle festival, ‘Liptov Fest’, attracted visitors to the new miniature park - Tatrapolis in Tatralandia. In Vysoké Tatry ‘The Cableway’s 75 Secrets’ event symbolically opened the original engine room of a gondola to public. August 2017The popular Tatra festival ‘Bear Days at Hrebienok’ celebrated its 10th anniversary. Five days were full of fun, dance, and rest in the picturesque Tatra outdoors. August 6 brought a fairytale record to Tatralandia with the ‘Frog Prince’ project, attended by 321 amateur creators. Visitors of the ‘Sky of Stars Dinner’ at Skalnate Lake enjoyed a
    starry sky and a culinary paradise on the plate during July and August. A night cableway ride to Skalnate Lake, a visit to an observatory or to the tower in Encian Gallery provided a unique experience to visitors. The 7th annual adventure family competition, ‘Marmots at the Lake’, on August 26-27 concluded the summer in the High Tatras. The end of the summer in Tatralandia belonged to master craftsmen who presented their true work of artisan blacksmiths during the event ‘Tatrapolis Iron Master’.
    September 2017The fourth annual Green Chopok event was held by the DTO Liptov with the message ‘Out of love of mountains we think of the future’. Besides cleaning the trails from rocks, trees were planted as well on September 8 in the Jasná resort. In mid-September Tropical Paradise in Aquapark Tatralandia turned into an original Mexican wedding, dominated with hand-made art decorations, which kicked off Halloween in Tatralandia. Family days in Chamois Land on September 23 and 24 prepared Chamois Olympics for adults and children, accompanied by workshops.
    October 2017On October 28 a Halloween show took place in Tatralandia with a full day of an accompanying and theatrical program, popular with families. In Tropical Paradise there were 50 oversized sculptures installed, and 30 artists presented themselves on that day.
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    32 33
    TMR management uses operating and financial key performance indicators (KPIs) to evaluate operating performance. The Group’s portfolio is divided into three segments and subsegments and for this reason management monitors performance of each segment and subsegment.
    Operating Performance Indicators:
    Number of Visitors
    As for the performance of the Mountains & Leisure segment, Management monitors performance of financial indicators based on the number of visitors in terms of sold skier days in the winter season, i.e. number of persons visiting a ski area for any part of day or night for the purpose of skiing, snowboarding, or other downhill slide. E.g., a 4-day ticket means four customers in the mountain resorts of TMR. The number of visitors on cableways in the summer season and visitors in Leisure Parks is measured in terms of sold entries.
    Average Revenue per Visitor
    In the main segment Mountains & Leisure and its subsegments Mountain Resorts, Leisure Parks, Dining, and Sport Services & Stores, the key indicator is the average revenue per visitor for a given period from sale of ski passes, entries, services, and products.
    Occupancy
    In the Hotels segment operating performance is monitored based on percentage occupancy of individual hotels in the High and Low Tatras and in the aquapark and of the weighted average of the hotel portfolio.
    Average Daily Rate
    Average Daily Rate (ADR) is one the key indicators to measure hotel performance. It represents average revenue from per occupied room per given period. The calculation is based on the equation where room revenues are divided by the number
    of rooms sold. Management monitors ADR of each hotel and of the weighted average of the hotel portfolio.
    Financial Performance Indicators:
    Revenues
    Operating revenues of the Group come solely from operating activity of the Mountains & Leisure segment - with subsegments Mountain Resorts, Leisure Parks, Dining, and Sports Services & Stores - and from segments Hotels and Real Estate.
    EBITDA
    To describe financial performance of TMR, management uses EBITDA (Earnings before interests, taxes, depreciation and amortization) as the key indicator, which represents income net of interest, taxes, and write-offs. EBITDA clearly indicates the Group’s financial performance based on operating activities since it eliminates impact of financing, as well as accounting decisions of a non-operating character.
    EBITDA Margin
    In order to evaluate operating profitability of TMR, management utilizes EBITDA margin. It equals earnings before interests, taxes, depreciation and amortization (EBITDA) divided by operating revenues. Since EBITDA excludes depreciation and amortization, EBITDA margin is able to provide the investor a clearer picture of operating profitability.
    Key Performance
    Indicators (KPIs)


    34 35
    The main target group for TMR is represented by tourists from Central and Eastern Europe, mainly from Slovakia, the Czech Republic, Poland, Ukraine, and Russia. Therefore, the visit rate in TMR’s resorts is partly impacted by economic development in these countries.
    Slovakia
    The percentage GDP growth in Slovakia for the past period ranks among one of the highest in the EU. 1 According to the National Bank of Slovakia, in 2016 GDP increased by 3.3% year-over-year, at a slower pace due to lower utilization of the EU funds. In 2017 GDP of Slovakia should reach a growth of 3.4% supported by a recovery towards the end of the year thanks to stronger investments. The positive economic growth has a favorable impact on the labor market as a sharp fall in unemployment. In the following years a wage growth over 5% is expected. In 2018 the growth is estimated at 4.3%. 2
    The Czech Republic
    According to Czech National Bank (ČNB), economic growth in 2016 slowed down to 2.5% due to absence of one-time growth factors, such as EU funds, regulation effect, pre-supply of tobacco products, or favorable weather. In 2017 the GDP growth is estimated at 4.5% also thanks to recovery in the Eurozone, especially in Germany, the fact that also impacts Czech exports and labor market. The pressure on the labor market is reflected on wage rises and higher household spending. Investment activity is further supported by EU funds. In 2018 the Czech economy should grow 3.2%. 3
    Poland
    According to EBRD, in 2016 Polish economy slowed down by 2.9% due to drop in investments caused by slow drawing of EU funds and continuing regulatory uncertainty. In 2017 GDP is estimated to have grown 4.1% as a result of strong household spending, strong wage growth, and higher social spending. Private investment is still weak a presents a risk to growth due to rising wages and shrinking labor supply. In 2018 the economic growth will probably decrease to 3.4% along with growing inflation, which may negatively impact household consumption. 4
    Ukraine
    In 2016 Ukrainian economy finally recorded a GDP growth of estimated 1.5% following 16% cumulative real GDP contraction in the previous two years, as a result of military turbulence in the eastern part of the country, government instability, and lack of foreign investment. Ukraine’s economy showed signs of moderate recovery in the first half of 2017 with household consumption and real wages picking up. Gross fixed capital formation grew heavily, by 20%, although exports declined in the first and second quarter. Industrial production declined due to the ongoing economic blockade of the eastern area outside of the control of the government. Consumer price inflation slowed down but remains high at 16.4% as of September 2017. Ukraine boosted its presence on capital markets with its issuance of USD 3 billion sovereign Eurobonds. The banking system showed improvement but lending remains weak. EBRD estimates the GDP growth of 2% for 2017 and 3% for 2018. 5
    Russia
    After a decline of 0.2% in 2016 and two years of recession, Russian economy finally recorded a growth in 2017. The first half of 2017 showed stronger activity in trade, mining, and transport. The recovery was driven by domestic consumption and investments, whilst net exports were negative, with prevailing imports. Private capital outflows reached the levels of 2016 due to banking sectors outflows. Eurobond issuances increased threefold. Inflation fell to 3% (as of September 2017), supported by a stronger ruble, a stronger food harvest, and base effects. The Central Bank cut the key policy rate, thus easing monetary policy. Fiscal policy tightened with deficit falling to 2.5% of GDP in 2017. Financial stability is boosted by closing banks with poor corporate governance. The GDP growth in 2017 is estimated at 1.8% and 1.7% in 2018. 6
    Regional Tourism Industry
    Following three consecutive years of strong growth, tourism of Central and Eastern Europe (CEE) has suffered a drop of -5.9% in international arrivals in 2014, which can be attributable to the geopolitical and economic crisis in Ukraine and Russia. The region rebounded from 2014’s decrease and grew year-over-year by 5.1% in 2015. In 2016 international tourist arrivals to CEE increased by 3.8% with especially strong growth in Slovakia (+17%) or Bulgaria (+16%). On the other hand, Russian Federation declined by 9%. 9
    The Travel & Tourism Competitiveness Index (developed by the World Economic Forum) measures factors and policies that impact competitiveness of the Travel & Tourism sector in individual countries in context of regulatory, business, cultural, and natural environment. According to the Index, in 2017 CEE countries that are ranked higher than Slovakia are the Czech Republic (39), Poland (46), Hungary (49), and Russia (43), whereas Slovakia, which improved from 61st place in 2015 to 59th, is perceived the least attractive, except for Ukraine, ranked 88. 10
    Slovak Tourism Industry
    Besides the majority of domestic tourists, Slovakia is mostly visited by neighboring countries, with the most tourists in 2016 coming yet again from the Czech Republic (621 thousand) and Poland, followed by German tourists. In 2016 international tourist arrivals here increased by 17.8% to record-high 2.0 million. The number of domestic tourists also increased in 2016 by 14.9%. The ratio of domestic to foreign travelers has been traditionally 60/40. For the first half of 2017 the number of domestic and international tourist arrivals increased significantly, by 18.9% and 18.0%, respectively. 11 The reason behind the growth in 2016 and 2017, according to hotel operators, is the fact that tourists prefer safer tourist destinations or rather spend their vacations in their home country or neighboring countries due to the unstable security situation in some traditional vacation destinations. Besides this, the growth was boosted also by cooperation among tourism entities, regional and district tourism organizations, new airline connections, enhancement of tourist services, and Slovakia’s presidency the Council of the EU. On the other hand, Slovak tourism lacked state-wide promotion in 2016 and 2017 also due to the cancellation of Slovak Tourism Agency. Despite growth of the visit rate in 2016 and 2017, absolute numbers of tourist arrivals are much lower than in the neighboring countries, such as Austria or Czechia, which year by year achieve significant growth. Moreover, business environment in Slovakia is not favorable according to entrepreneurs in the travel sector. 12 This is confirmed by the Travel & Tourism Competitiveness Index, according to which Slovakia is ranked 115 out of 136 countries in terms of business environment.
    Market Analysis
    and Trends
    Country/Economy 2 017 2 015
    Rank/136 Rank/141
    Spain 1 1
    France 2 2
    Germany 3 3
    Japan 4 9
    United Kingdom 5 5
    United States 6 4
    Australia 7 7
    Italy 8 8
    Canada 9 10
    Switzerland 10 6
    Czech Republic 39 37
    Russian Federation 43 45
    Poland 46 47
    Hungary 49 41
    Slovak Republic 59 61
    Ukraine 88 -
    Travel & Tourism Competitiveness Index 2017 and 2015comparison (Selected countries) 8
    2012 2013 2014 2015 201 6
    International Tourist Arrivals 7
    -8
    -
    6
    -
    4
    -
    2
    0 2 4 6 8
    10
    12 14
    %
    Ch ange yo y
    Market Analysis and Trends
    Origin of Foreign Tourists in Slovakia in 2016 13
    Czech Rep.
    Poland
    Germany
    Austria
    Hungary
    Ukraine
    Italy
    UK
    Russia
    France
    USA
    Romania
    China
    Spain
    Other
    1 Eurostat2 NBS3 Inflationary expectations of the financial market. December 2017\ř. www.cnb.cz/cs/financni_trhy/inflacni_ocekavani_ft 4,5,6 European Bank for Reconstruction and Development. Regional Economic Pros\řpects in EBRD Countries of Operations: November 20177 UNWTO World Tourism Highlights: 2017 Edition. July 2017.
    8 World Economic Forum. The Travel & Tourism Competitiveness Index 2017.9 UNWTO World Tourism Highlights: 2017 Edition. July 2017.10 World Economic Forum. Travel & Tourism Competitiveness Report 201711 Ministry of transport and construction of the Slovak Rep. The accommodat\řion statistics.12 Trend Top in Travel. May 201713 Ministry of transport and construction of the Slovak Rep. The accommo\řdation statistics.


    36 37
    Market Analysis and Trends
    Direct contribution of tourism to GDP of Slovakia in 2016 reached EUR 1.9 bn., and increase from EUR 1.8 bn., or 2.4% of total GDP, which ranks Slovakia 140 in the world relative ranking. In comparison, direct contribution of tourism in the whole EU reached 3.7% of total GDP. For 2017 Slovakia’s share is forecasted to rise by 3.3% and is expected to grow by 3.6% p.a. to 2027. Travel and tourism directly generated 62,000 jobs or 2.5% of total jobs in 2016, and this is expected to grow by 0.4% in 2017. In ten years travel & tourism should directly generate 70,000 jobs (2.9% of total employment). In 2017 international tourism income should grow by 2.3%. 14
    European Mountain Industry
    Europe is the relevant market for TMR’s ski business, especially the CEE region. In Europe the biggest skiing destinations are alpine countries - Austria, France, Switzerland, Germany, and Italy. Worldwide, the Alps capture the greatest market share, accounting for 43% of skier visits (skier days). 15 The second most significant is North America with 21%. Central and Eastern Europe attracts only 9% of skiers, although this region produces 13% of skiers globally. Since the start of the new millennium global skier destinations have been experiencing a downward trend in the number of skier visits, especially the Western European traditional skier destinations, despite the overall growing global population and a growing number of skier days globally. This introduces an opportunity for the CEE region to grow in provision of ski resorts at least to match the regional demand and even to attract a higher number of foreign skier visits.
    Among alpine countries, France and Austria have the most major resorts (with over 1 million skier visits) - 13 and 15, respectively each, and France with the highest number of skier visits per year - 54.9 million but Austria records the most domestic skier visits per inhabitants- 2.1, whereas Switzerland produces the highest rate of domestic skiers- 37%, with Germany having the highest total number of domestic skiers - 14.6 million. 16 Mountain industry in general is very capital intensive because of essential investments into cableways and other resort facilities, which represent great barriers of entry. Another essential entry criterion is e.g. location since skiing requires a mountainous area with a milder/ colder climate.
    As for characteristics of ski resorts, they vary in size, ownership, and infrastructure. In some alpine countries, they are usually run by a large number of small private operators who join forces also with local municipalities and market the resort or the ski region as a whole, like in Italy, Switzerland or Austria. In France, on the contrary, operation of large ski resorts especially is concentrated with a major operator. German resorts are also fragmented but considerably smaller than in other alpine countries. 17 Large alpine resorts usually offer state of the art infrastructure, have over 100 km of ski trails, transport capacity of over 50,000 persons/hour, and more than 30 ski lifts. They also keep reinvesting large amounts into resorts enhancement. TMR resorts can be compared to medium-sized alpine ski resorts.
    Km of trailsCapacity ('000 persons/hour)
    1-day Ticket Price (€)
    Jasná - TMR; 49
    PKL / Kasprowy
    Wierch; 16 Špindleruv Mlýn; 25
    Stubaier Gletcher; 62
    Livigno; 115 Val Gardena; 175
    Gastein; 86 Ischgl; 238
    Szczyrk; 25 Biaka Tatrzaska; 17
    Pec pod Snžkou; 15
    15 20
    25
    30
    35
    40
    45
    50
    55
    0,000 20,000 40,00060,00080,000100,000 120,000
    Vysoké Tatry - TMR; 24
    60
    Market Positioning in Europe in Winter 2016/17 18
    Market Analysis and Trends
    Regional Mountain Industry
    In the CEE region Russia has the most ski areas - 354, although only around 67 have more than five lifts and majority have limited infrastructure. Russia is followed by Poland with 182, the Czech Republic with 176 and Slovakia with around 107. Poland’s ski areas are mostly small, suitable for beginners, and Czech ski areas are located up to 1300 m above sea level. The Czech Republic had on average for the past five years the highest number of skier visits in the winter season- 8.7 million, followed by Slovakia and Poland, both with estimated 5 million. As for domestic skiers, winter sports in Poland are growing in popularity, as Poland produces the highest absolute number of skiers in the region - 5 million, who make up 13% of population. This proportion grew by more than double since 2013, which presents a great growth potential on this market. Slovakia and the Czech Republic produce a much higher percentage of skiers - 18% and 22%, although there are much more Czech skiers in the absolute number - 2.2 million. Slovakia has a competitive advantage on the supply side in the region since 80% of the geographical area is situated above 750m above sea level; and the area includes the highest mountain range in the region- the Tatras, with the highest peak of 2,655 m - Gerlachovsk? ?t?t. 19
    The regional mountain industry still exhibits room to grow, in comparing to mature alpine resorts. Observable trends besides investing in resort infrastructure and equipment include extending the variety of services in mountain resorts, such as ski schools, ski service, and shops, as well as non-
    skiing activities, such as apr?s ski bars, nightlife, restaurants, family activities and events. As for summer activities, the focus is on adrenaline sports, summer family events, and cycling, evidenced by an increase in development of resorts, cycling tours, and by increased marketing. Mountain resorts tend to keep expanding technical snowmaking. Also, mountain resort tourists tend to be attracted to package deals on lodging and lift tickets, thus this trend is expected to continue. Another trend in mountain resorts is observed in consolidating marketing activities of a mountain destination or a region and mutual cooperation of mountain resort operators. District tourism organizations in Slovakia for example join together in destination management. One can observe these trends in all the locations operated by TMR. TMR is also cooperating with other mountain resort operators in marketing efforts.
    0
    2
    00 0
    4
    00 0
    6
    00 0
    8
    00 0
    10
    000
    12
    000
    14
    000
    16
    000
    Skiers by Country
    No. of National Skiers Skiers as % of Population
    Thousands
    0% 5% 10%
    15% 20% 25%
    30% 35% 40%
    Mountain Tourism - Country Comparison 20
    Country No. of Ski areas*
    Number of major resorts (>1 mil Skier Visits)
    Skier visits
    Proportion of domestic skiers (in % population)
    Number of domestic skiers
    % foreign skiers
    Domestic Skier Visits per inhabit - ants
    Skier Visits per foreign visitors
    Alpine countries 169 439 000
    Austria 254 15 51 302 000 36,0% 2 960 000 66% 2 ,1 1,6
    France 325 13 54 886 000 13,0% 8 574 000 3 1% 0,6 0,2
    Italy 349 7 24 610 000 8,0% 4 919 000 3 5% 0,3 0,2
    Switzerland 19 3 6 23 659 000 3 7, 0 % 2 959 000 46% 1,6 1, 3
    Germany 498 0 14 982 000 18,0% 14 607 000 10% 0,2 0 ,1
    United States 463 6 54 146 000 8,0% 25 017 000 6% 0,2 0 ,1
    Eastern Europe 27 106 000
    Czech Republic 176 0 8 700 000 22,0% 2 236 000 3 5% 0,6 0,5
    Slovenia 44 0 1 071 000 15,0% 299 000 17% 0,4 0 ,1
    Ukraine 54 0 1 400 000 2,0% 1 114 330 5% 0,0 0,0
    Poland 18 2 0 5 000 000 13,0% 4 990 000 15% 0 ,1 0 ,1
    Russia 354 0 5 935 000 3,0% 4 275 000 5% 0,0 0,0
    Slovakia 107 0 5 000 000 18,0% 988 000 25% 0,7 1,0
    14 World Travel & Tourism Council. Travel & Tourism Economic Impact 201\ř7 Slovakia15 The number of skier visits is measured in terms of skier days; which\ř means one person visiting a ski area for any part of day or night for p\řurpose of skiing, snowboarding, or other downhill slide; e.g. a four-day ticket means four skier v\řisits. 16,17 Vanat, Laurent. 2017 International report on mountain tourism. April 20\ř17. www.vanat.ch 18 www.skiresort.info , resorts websites
    19 Vanat, Laurent. 2017 International report on mountain tourism. May 2017\ř. www.vanat.ch 20 Vanat, Laurent. 2017 International report on mountain tourism. May 2017\ř. www.vanat.ch


    38 39
    Slovak Mountain Tourism
    On the Slovak mountain tourism market TMR is the clear leader in terms of the number of resorts, ski lifts, transportation capacity, km of ski trails, and lifts elevation. Mountain resorts in Slovakia are mostly operated by small private operators in cooperation with local municipalities and national parks. There are around 100 ski areas in Slovakia, and 47 major ski resorts (3*, 4*, and 5* quality) in Slovakia. When comparing individual resorts and their km of ski trails, TMR’s resorts Jasná Nízke Tatry (49km) and Vysoké Tatry - Tatranská Lomnica, Starý Smokovec a Štrbské pleso (24km) are the biggest ones in Slovakia, followed by Veľká Rača Oščadnica (17km), Vrátna free time zone (13km), Skipark Kubínska Hoľa (14km), and Winter Park Martinky (13km). 21
    Regional Hotel Industry
    The hotel industry in Slovakia in 2016 continued the growth trend that started in 2015, with total turnover from accommodation services for hotels having increased by 20.2%. 2017 continued at a more moderate pace, when for the period of first nine months in comparing to the same period the prior year hotel turnover in Slovakia increased 6.8%. TMR’s hotels are located in TMR’s mountain resorts and in Aquapark Tatralandia, and most of the clients utilize TMR hotels’ services in addition to visiting the resorts. That’s why TMR hotels compete for clients with other lodging facilities in the given resort and its surrounding. In the winter season especially, performance of the hotels is closely linked to performance of the mountain resorts. In Aquapark Tatralandia there is only one lodging facility, thus TMR holds a monopoly here. In the mountain resorts there are other mostly private operators of resort hotels, inns, bed & breakfasts, apartments, and cottages. The region of Jasná Nízke Tatry and Tatralandia followed a positive trend in 2016 and recorded an 18.2% increase in hotel revenues, whilst for the first nine months of 2017 the region reported only a slight 1% improvement. The region of Vysoké Tatry grew 21.3% in 2016 and for the first nine months of 2017 improved 2.5%. 22 Categories of TMR hotels range from 2-star to 4-star. In the resorts there is a greater competition in the lower category lodging than in the upscale segment. The trend in the resorts lodging sector is to cooperate closely with the mountain resort operators in order to attract clients with affordable bundled stay packages. This trend was strong also in 2016 and 2017. The hotel market in TMR’s resorts is not saturated since TMR had invested a large amount of capital in recent years, and the resorts attract new investors.
    Market Analysis and Trends
    Transportation Capacity and Prices of Leading Ski Resorts in Slovakia
    Km of Trails of Leading Ski Resorts in Slovakia
    Ja sn á, Nízke Tatry
    V yso ké T atry
    S ki P ark Kubín sk a ho a
    V rátn a F ree Time Zone
    W inte r P ark Ma rtin ky
    D rie nica - L ysá
    V eká Raa Oš adnica
    Ski P ark Ru žom bero k
    Park S no w Do no va ly
    S ki B ach le dová 49
    24
    14
    13
    13
    14
    17
    11
    12
    11
    Transporation Capacity (Persons per Hour) Price of a 1-day Ski Pass in the Main Season 2016/17
    Transporation Capacity 1-day Ski Pass
    0
    5 000
    10 000 15 000 20 000
    25 000
    30 000
    35 000 0

    5

    10

    15

    20

    25

    30

    35

    40

    Market Analysis and Trends
    Regional Trends in Aquaparks
    In Slovakia there is around a dozen aquaparks and thermal spas. Tatralandia ranks among the top three parks in terms of size, visit rate and services offered. The number of visitors primarily depends on the variety and quality of services offered. As for the target market, aquaparks observe an increasing share of solvent clients who tend to spend more during their visits and require higher quality and a wider scale of services. Another observable trend is the comeback of Slovak clients who now represent the majority as opposed to the past till 2009, when clients from Poland and the Czech Republic comprised the majority, and for the past two years also due to unstable security in the world with domestic tourists more often choosing to spend their vacations in Slovakia. Also, aquaparks observe a growing number of families with children that seek out a wide scale of activities, also as addition to water attractions. The trend also includes continuing investments into parks’ development, especially all-year attractions. All-year aquaparks carry a competitive advantage as they do not depend on weather. Operators of aquaparks tend to cooperate closely with local hotels and lodging operators, and they form or join local tourism organizations (OOCR). 23 Competition in the neighboring countries is present especially closer to the Slovak border- there are three aquaparks close to Slovakia in Poland, nine in the Czech Republic, and seven in Hungary.
    Regional Trends in Leisure Parks
    The CEE region exhibits absence of leisure parks on a scale of Western Europe, where most of 300 parks are located, with annual revenues of around EUR 4.5 bn. There are 30 parks in Europe with an average visit rate of 1-2 mil. visitors. In Poland there are about 45 leisure parks of different size and theme. They may be divided into a number of groups depending on their main theme - luna parks, western theme parks, fairy tale theme parks, dinosaur adventure parks, and miniature theme parks. Majority are so-called dino parks (19) and miniature parks (13). These should be treated as a substitute rather than direct competitors to TMR’s Silesian Amusement Park. Besides Silesian Amusement Park, there is only one other amusement park of comparable size and with a comparable number of attractions, located also in the Silesia region.
    Regional Trends on the Real Estate Market
    The performance of the regional real estate market depends on the stability of demand, which is impacted by macro-economic development, the job market development, income growth, and access to bank financing. In 2016 according to CBRE, foreign and domestic investors invested EUR 853 mil. on the commercial real estate market in Slovakia, almost 100% more than in 2015. The record investment volume was mostly the result of transactions with shopping malls. As for transactions in the retail segment, 11 real estate projects were sold valued at EUR 417 mil., a 188% increase year-over-year. After a retraction in 2014 and stabilization in 2015 the office space segment increased also more than 10% with transactions valued at EUR 118 mil. 24 In 2017 investors showed a higher interest in office and logistics space, and the construction boom continued. The most valued transaction, also in the whole CEE region, was the sale of the logistics park near Galanta. 25
    The recreational real estate market in the Jasná resort has also been experiencing a rebound. In 2016 a new project of building a 5-star hotel resort was announced opposite of Grand hotel Jasná and Chalets Jasná with 181 rooms and apartments, also for sale. Besides this, developers have announced a new construction of recreational residences and infrastructure in Jasná. 26 In 2015 TMR completed another stage of Chalets Jasná Otupné and construction works are underway to build the Jasná Center project with multipurpose buildings, apartments, and a shopping mall. In the High Tatras, mainly in Tatranská and Veľká Lomnica several real estate projects are being prepared or already getting built. 27
    21 skiresort.info , resort websites 22 Statistical Bureau of the Slovak Republic 23 Waterparks were visited mostly by domestic clients. Top Trend in Tra\řvel. 19/2017. May 4, 201724 Investors invested 853 million euros to Slovak real estate. 12.1.201\ř7. reality.etrend.sk/realitny-biznis/investori-vrazili-do-slovenskych-reali\řt-rekordnych-853-milionov-eur.html 25 5 top events of the year in real estate. 29.12.2017. reality.etrend.sk/realitny-biznis/5-najdolezitejsich-udalosti-roka-v-rea\řlitnom-biznise.html 26 Jasná: the Slovak attempt for an alpine resort. 16.3.2017. Trend \ř11/2017. Real estate extra. 27 Another area of recreational houses at the golf resort beneath the T\řatras.10.2.2015. reality.etrend.sk/komercne-nehnutelnosti/pri-golfovom-ihrisku-pod-tatram\ři-dalsia-zona-rekreacnych-domov.html


    R ISK FACTOR S AND R ISK M ANAGEMENT


    42 43
    Main risks that the Group faces can be divided into market, financial, and operating risks. The management has the complete responsibility for defining and controlling the Group‘s risks. All these factors are either external, which means they are completely beyond the management’s control, or internal risks, which can be at least partially controlled by the management. The most significant risks are described below:
    Market Risks
    Business Cycle
    Current operations of the Group are focused in the Slovak, Czech and Polish market, although majority of the Group’s clients come from the whole CEE region, and thus the Group’s operations are mainly dependent on the level of economy of the Slovak and Czech Republic and countries of the CEE region. Majority of TMR’s revenues depend on the number of visitors to TMR’s resorts and hotels. The vacation choices of TMR’s clients also depend on the business cycle of the economy, each country’s economic growth, and the level
    of their discretionary income, with the latter two highly correlated (see the Graph below). Development of such macroeconomic factors is an external risk for TMR. Since the majority of visitors to TMR’s resorts and hotels come from various countries, each of which has its own unique macroeconomic profile, operations of TMR can be heavily affected by worsening of the economic situation on these markets. The risk of a downward business cycle is partially managed by reasonable pricing strategies and effective marketing campaigns on the relevant target markets (see Strategy). Seasonality
    TMR’s business model is primarily seasonal, although TMR’s strategy involves building and promoting all-year vacation destinations. The busiest months are from January through March, especially in the number of skiers, and July and August in the leisure parks and the Vysoké Tatry resort. The management is continuously working on attracting visitors in the off-season, e.g. by adding snowmaking guns, running vibrant marketing campaigns, offering bundled stay packages, and by organizing events in the resorts and hotels. Besides the
    Risk Factors
    and Risk Management
    1 Eurostat, WTTC
    Real GDP per Capita 2016 (in EUR)
    Outbound Travel & Tourism Expenditure per Capita 2016 (in EUR)
    GDP vs. Tourist Spending in EU Countries
    1

    = 0, 7488
    0
    5
    00 0
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    N
    L
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    Risk Factors and Risk Management
    aquapark providing warm thermal water, the Tropical Paradise project in Aquapark Tatralandia was a major step towards minimizing the effects of seasonality in the aquapark since visitors of Tropical Paradise can experience summer temperatures in any season.
    Weather
    The number of TMR’s visitors also depends on a successful winter season, i.e. on favorable weather conditions in terms of abundance of natural snow and temperatures below zero degrees Celsius. TMR manages the risk of low snowfall with the already-mentioned snowmaking facilities. In the winter season 2016/17 TMR’s snow coverage by snowmaking facilities was 71 km. The extensive scope of coverage by technical snowmaking gives TMR an absolute advantage among competitors in Slovakia in case of shortage of natural snow. Historically, the Low Tatras area has had an average of 80 cm of snow during the winter season and the High Tatras 85 cm. Drier winters may increase the cost of snowmaking. On the other hand, warmer weather may hinder the snowmaking, since freezing temperatures are needed, and it may reduce the scope
    of skiing area. At the same time, the resorts are located in a mountainous area with a generally colder climate. Also, in comparing with other Slovak mountain resorts, TMR’s resorts have start and terminal cableway stations at the highest altitudes. The Polish SON resort, on the other hand, has an advantage in facing north and towards northwest winds. Warm thermal water in Tatralandia partially offsets the cold weather effects, but Tropical Paradise in Tatralandia eliminates dependence on warm weather completely. As for the summer season in the mountain resorts and the amusement park, favorable weather in the summer months is essential for hiking tourists and visits of amusement parks.
    Competition
    The Group’s results also depend on how successfully the Group deals with competition. In the primary segment of Mountains and Leisure, specifically in Mountain Resorts TMR competes for visitors on domestic oligopolistic markets in Slovakia, Poland and the Czech Republic, with the position of a leader in terms of size and the range of services. On the European market the Group faces monopolistic competition with a large number
    Base & Summit Elevation of Slovak Ski Resorts
    Base elevation (m a.s.l.)
    Summit elevation ( m a.s.l.)
    880
    1080
    805 1400
    1025915
    630720
    600
    545540 470510
    2004
    20032196
    2093
    14801360
    12361396
    1550
    1209
    770912
    830
    0
    500
    1000 1500 2000
    2500


    44 45
    Risk Factors and Risk Management
    of competitors that provide a wide supply for visitors. TMR utilizes its high quality services, massive capital investments in resort development, reasonable prices in comparing to alpine resorts, patriotism, and locality with the goal of attracting visitors. Moreover, TMR capitalizes on its competitive advantage of natural monopoly in terms of the strategic location of its key resorts in the Tatras in the highest mountain range in the region to the East and North. In the Leisure Parks subsegment TMR is also among the top players in the local market of aquaparks, although visitation of aquaparks also depends on the travel distance for the given visitor. Among theme parks Silesian Amusement Park is one of two top players in the region. Partially, TMR manages this type of risk with marketing tools, by utilizing its tangible and intangible assets, such as its strategic position in the Tatras mountain range, and by a well-defined corporate strategy described in the Strategy section.
    Occupancy and Average Daily Rate
    The Group’s profitability also depends on the occupancy rate of its own hotels and lodging facilities in the resorts. TMR actively works with local lodging operators in marketing the resorts in order to increase occupancy and consequently the number of resort visitors. TMR
    hotels’ results depend on the occupancy rate and average daily rate per room (ADR). To increase these indicators it is essential for TMR to invest heavily into development and renovation of its lodging facilities. Besides aggressive marketing activities for peak seasons, TMR actively works to increase occupancy and ADR also during the off-season by marketing conference space to corporate clientele, offering special seasonal or weekend lodging packages in conjunction with events in the hotels or resorts, e.g. live cooking show, culinary festivals, romantic spa weekends, serving ?brain food? for corporate clientele, etc.
    Real Estate Market
    One of the three operating segments of TMR is focused on real estate, as described in the Company Profile section. The revenues of this segment depend on sale and/or lease of residences, lodging facilities, and commercial space in the real estate projects. Even though the current performance of the Group does not depend on the success of this segment, its growth depends on the state of the real estate market, which is an external risk factor. This industry is exhibiting an upward trend for the last couple of years (see Market Analysis and Trends). In case of realization of all the projects, TMR can mitigate
    2 ECB
    One-year Performance of Selected Currencies vs. Euro 2
    NOV16 DEC16 JAN17 FE B17 MAR17 APR17 MAY17 JU N17 JU L17 AUG17 SEP17 OCT17
    EURPLN
    EURRUB
    EURCZK
    -15% -13%
    -11%-9%
    -7%
    -5%
    -3%
    -1%1%
    3% 5%
    Risk Factors and Risk Management
    the risk of low apartment sales with revenues from lease of space, facility management, and operation. Also, TMR intends to capitalize on synergies from other segments, such as marketing, procurement of inventory, human resources, etc.
    Financial Risks
    Exchange Rates
    Volatility of exchange rates in relation to euro is an external risk that affects the Group’s revenues because majority of TMR’s foreign clients come from countries outside of Eurozone- the Czech Republic, Poland, Ukraine, Russia, etc, therefore their travel choices are impacted by currency movements. Appreciation of euro in respect to Polish Zloty, for instance, negatively impacts the number of visitors from Poland as it did at the beginning of the winter season 2016/2017 when Polish Zloty depreciated in respect to euro, recovering in the spring and appreciating moderately almost the rest of the financial year. Czech Crown was flat during the whole winter season, then started appreciating in respect to euro before the summer season 2017, and continued the trend until the end of the financial year. Russian Ruble appreciated against euro
    in the first half of 2017, then erased the gains, ending the year slightly up. Investments into the resorts in terms of technology, equipment, renovation, and procurement of inventory were settled in euros and Polish zloty. Investments settled in Polish zloty are thus exposed to volatility of exchange rates. The value of the investment in Carepar, a.s. that holds an interest in Melida a.s., which operates the Špindlerův Mlýn resort, is converted from Czech crowns into euros.
    3 www.emmi-benchmarks.eu
    EURIBOR rates (%) 3
    N
    OV16 DEC16 JAN17 FE B17 MAR17 APR17 MAY17 JU N17 JU L17 AUG17 SEP17 OCT17
    -0, 400
    -
    0, 350
    -
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    -
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    46 47
    Interest Rates
    Volatility of interest rates may have a direct impact on the value of the Group’s interest-earning assets and interest-bearing liabilities. The extent of this risk is equal to the amount of interest-earning assets and interest-bearing liabilities, where the interest rate at maturity or at the time of a rate change is different from the current interest rate. The period of a fixed rate for a financial instrument therefore reflects the risk for fluctuations in interest rates. The Group’s loan portfolio during 2016/17 consisted mostly of short- and long-term bank debt with fixed and variable rates based on 3-month and 12-month EURIBOR rates and 3-month WIBOR rates. The Group considers the variable interest rate to manage the interest rate risk automatically. In case of economic expansion, EURIBOR grows, but at the same time economic performance of the population should grow, and the Group should be more profitable. In case of economic recession, it is the exact opposite. Besides bank debt, in 2013/14 the Group has issued two tranches of senior and junior bonds in the face value of EUR 180 mil with payment of regular fixed coupon. Loans granted by the Group earn interest at fixed interest rates, thus the Group mitigates the risk of interest rate fluctuations downward. Exposure to this risk is detailed in Consolidated Financial Statements, items 20, 27, 34.
    Credit Risk
    The Group is primarily exposed to risk with trade receivables, receivables from leasing, other receivables, advances and loans granted. The extent of this risk is expressed in the book value of assets on the balance sheet. Book value of receivables, credits, and loans represent the highest possible accounting loss that would have to be accounted for in the event of counterparty’s default- counterparty will fail to fully meet their contractual obligations and all guarantees and warrants would have
    nil value. Therefore, this value significantly exceeds the expected losses in the reserve for unredeemable receivables. The extent of the risk exposure is detailed in Consolidated Financial Statements, items 20, 34.
    Liquidity
    Liquidity risk arises in the general financing of the Group‘s activities and financial positions. It includes the risk of being unable to finance assets at an agreed maturity and interest rate and inability to liquidate assets at a reasonable price in a reasonable time frame. Individual segments in the Group use different methods of managing liquidity risk. The Group‘s management focuses on managing and monitoring liquidity. In order to manage liquidity, in 2009 the management changed the accounting year for the financial year ending on October 31. In the first half of its financial year the Group has
    the winter season representing around 60% of the Group‘s income. According to the development in the first half-year, the Group is able to affect income and expenses well in advance to keep sufficient liquidity. The seasonality in the resort of Vysoké Tatry is balanced also by a strong summer season in this resort, and it provides more stable liquidity throughout the year. Payment of coupons on two tranches of bonds in total of EUR 180 mil. adds to the liquidity risk. Nevertheless, the increasing operating income comfortably covers the Group’s debt service despite the high level of debt. The extent of the risk exposure is detailed in Consolidated Financial Statements, item 34.
    Bonds
    TMR issued bonds in 2013/14 in total of EUR 180 mil. By issuing the bonds, TMR significantly increased its level of debt. At the same time, by decreasing share capital from EUR 221 mil. to EUR 47 mil. as of 22-10-2013, TMR’s capital structure changed considerably in terms of the debt-to-equity ratio. The change of this ratio may cause TMR difficulties in obtaining other external financing to finance future investments into its resorts or acquisitions. In case these difficulties in obtaining further financing should occur, TMR’s growth rate may slow down. It is not certain whether the Group will be able to obtain external financing, or whether external debt will be obtained under favorable conditions. Inability to receive or a delay in receiving further external debt as well as financing terms, which differ from assumptions, may have a major negative impact on the operations, market position, sales, financial performance and financial outlook of the Group. For more information see Consolidated Financial Statements, item 31.
    Operating Risks
    Operating risk is the risk of loss resulting from embezzlement, unauthorized activities, errors, mistakes, inefficiency or system failures. This risk arises from all activities of the Group and is faced by all segments within the Group. Operating risk also includes legal risk. The Group‘s goal is to manage the operating risk to avoid financial losses and protect the reputation of the Group while maintaining optimal costs and avoiding measures that would hinder initiatives and creativity. The Group‘s management has the main responsibility for implementation of controls related to the management of operating risk. This responsibility is supported by the development of standards for the management of operating risk common for the whole Group. The operational risk is managed by the system of directives, meeting minutes and control mechanisms. The Group’s management strives to eliminate all operating risks by regular checks.
    Risk Factors and Risk Management Risk Factors and Risk Management
    Safety
    Safety is of great concern to TMR since the Group operates in types of business with varied safety risks. TMR is obliged to mitigate safety risk and guard its clients and employees in the following situations:
    In the course of developing, maintaining, and operating cableways, lifts, trails, swimming pools, toboggans, rollercoasters and other resort facilities In relation to health risks when providing dining services in the restaurants and hotels In relation to operations of the lodging facilities Any accidents and incidents during promotional and collaborative events In relation to compliance with regulations governing provision of ready-made products and services to clients
    IT Security
    The Group’s business activities substantially depend on information technology (IT) - with ticket sales platforms (interconnected in ski resorts because of universal ski passes); on lift turnstiles; cableway equipment; and in shops, e-shop, restaurants, and hotels. Therefore, the Group takes extraordinary measures to mitigate the risk of break-down with high quality software and hardware components and a strong IT support in order to be able to operate under contingency mode.
    Capital Investments
    The first pillar of TMR’s corporate strategy is based on organic growth through capital investments into its resorts and hotels. Implementation of this strategy requires major capital. During past 11 years (including 2017) TMR had invested more than EUR 300 mil. into development of its resorts. Each investment project is carefully analyzed under
    different scenarios. Despite this fact, there is risk that some of the ongoing or planned projects may be less profitable than previously planned, or even at loss. Unprofitable investments may negatively impact the operations, market position, sales, financial performance, and financial outlook of TMR.
    Acquisitions
    TMR plans to strengthen its position on regional markets also through new acquisitions. A risk exists that acquisitions of other entities will negatively impact future income and results of TMR, specifically in case of choosing the wrong acquisition target, unfavorable terms, or inability to receive permissions from relevant regulators (especially failure to obtain permission from the antimonopoly bureau). In case such event should happen, it may negatively impact the operations, market position, sales, financial performance, and financial outlook of TMR.
    Environmental Issues
    The Group’s capital investments in protected outdoor areas may be subject to approvals of various governmental and environmental bodies. Since the Group conducts its operations mostly in mountainous areas, part of which belong to protected national parks, some capital investment projects may be subject to approval of various governmental bodies. Each new investment project in such area related to expansion of snowmaking, construction of a cableway, etc. must first undergo the Environmental Impact Assessment (EIA), one of main instruments of the international environmental policy of sustainable development, and it must be approved by relevant bodies of environmental protection. TMR’s resorts in Slovakia are located in already urbanized areas and comply with all environmental regulations, although development of the SON resort in Poland as well as planned projects in Slovakia still need to undergo the EIA process.


    FINANCIAL PER FOR M ANCE R EVIEW FOR THE YEAR


    50 51
    Financial Performance
    Review for the Year
    Selected Consolidated Results (IFRS) For the Year Ended October 31
    in €‘000 2 0 16 / 17 2 015 / 16
    Sales 95 683 80 577
    Other Operating Revenues 227 625
    Total Revenues 95 910 81 202
    Cost of Sales -16 393 -13 0 6 2
    Personnel and Operating Costs -49 063 - 43 671
    Other Gain/ Loss 1 062 642
    EBITDA 31 516 2 5 111
    EBITDA Margin 32,9% 30,9%
    Depreciation & Amortization -13 8 2 8 -13 0 3 6
    EBIT 17 6 8 8 12 075
    Interest Income 2 058 1 336
    Interest Expense -12 0 9 4 -10 9 5 8
    Income from Financial Instruments, net 16 9 1 605
    Pre-tax Income 7 821 4 058
    Income Tax - 831 -1 312
    Net Profit 6 990 2 74 6
    Total Comprehensive Income 7 14 6 2 671
    EPS (€ ) 1,0 9 9 0,456
    KEY RESULTS
    Total consolidated revenues increased to EUR 95.910 mil. ( 81. 20 2) Consolidated operating profit before interest, tax, depreciation and amortization (EBITDA) reached EUR 3 1. 516 m i l . ( 2 5 .111) TMR operated with EBITDA margin of 32.9% (30.9) Net consolidated profit amounted to EUR 6.990 mil. (2.746)
    Net consolidated earnings per share (EPS) reached EUR 1.099 (0.456) The number of visitors to Mountain Resorts increased to 2.287 mil. (2.121); Leisure Parks recorded 855 ths. (784) visitors
    TOTAL REVENUES AND INCOME
    Total Revenues
    In the prior year, the Group’s total consolidated revenues reached EUR 95.910 mil. (81.202), an increase of 18.1%. Thereof, operating revenues amounted to EUR 95.683 mil. (80.577) and the rest, i.e. EUR 227 ths. (625) was other operating income. Revenues were positively influenced by higher visit rate in the resorts and leisure parks, higher average revenue per visitor in the mountain resorts, leisure parks and ancillary services, as well as a greater average daily room rate in Hotels and sale of recreational real estate.Earnings before interest, taxes, depreciation and amortization (EBITDA)
    Another TMR’s key financial performance indicator - EBITDA - reached EUR 31.516 mil. (25.111); which means an increase of 25.5%. Cost of sales increased by 25.5%, and personnel and operating costs were up 12.3%. The rise in personnel and operating costs was caused mainly by the pressure of the labor market to raise wages, new operations (Hotel Pošta, Reštaurácia Hrebienok), and launching activities in the Polish resorts, especially new attractions in Legendia. Operating profitability ratio (EBITDA margin) reached 32.9% (30.9).
    Depreciation and Amortization
    The depreciation and amortization increased to the level of EUR 13.828 mil. (13.036).
    Financial Activity
    Interest income of EUR 2.058 mil. (1.336) mainly stemmed from loans granted, earning fixed interest rates (see Consolidated Financial Statements, Note 20). Interest expense rose to EUR 12.094 mil. (10.958); they include mainly loan expenses and expenses of the issued bonds
    (see Consolidated Financial Statements, Note 12). Income from financial instruments, net fell to EUR 0,169 mil. (1.605) due to a positive revaluation from FY 2015/16 of the 19% share in CAREPAR, a.s., which owns 50% in Melida, a.s. - the operator of the Špindlerův Mlýn resort. In the past financial year TMR did not revalue the interest in CAREPAR, a.s. (see Consolidated Financial Statements, Note 13, 3e).
    Ta x e s
    Payable income tax was EUR -728 ths. (-13). Total income tax was recognized in the amount of EUR -0.831 mil. (-1.312).
    Net Income
    The Group recognized a net consolidated profit in the amount of EUR 6.990 mil. (2.746). Profit attributable to
    owners of the parent company amounted to EUR 7.370 mil. (3.061). EPS achieved a 140.8% growth to EUR 1.099(0.456). Total comprehensive income after accounting for foreign currency translation reserve and revaluation of securities held for sale amounted to EUR 7.146 mil. (2.671). The parent company reported a net profit of EUR 9.223 mil. (4.814).
    KEY EVENTS OF THE YEAR
    The positive financial results can be attributed to the diversi - fied business model and following of the corporate strategy, under which the Group took the following actions:
    Capital Investments
    At the Annual General Meeting (AGM) in April 2017 the Board of Directors presented an investment plan for current calendar year with the estimated budget of EUR 83 mil. The actual capital expenditures of the completed and ongoing investments, including reserves, for the financial year 2016/17 totaled EUR 65.1 mil. 1
    In the past year TMR focused its investment activity on the Polish mountain resort Szczyrk and Silesian Amusement Park Legendia, where it invested more than EUR 44 mil. In Legendia rides got renovated, the main entry gate was modernized with new cash desks, stores, a stylish café, and a new brand - Legendia. The pedestrian zone got a new coating, new greenery was planted, and a new roller coaster was added - Lech Coaster, as well as Lech Restaurant.
    In the Szczyrk resort investments flowed especially into infrastructure. Obsolete transportation systems were replaced with new, modern ones, and transportation got more efficient. Before the winter season 2017/18 three modern cableways
    with the transportation capacity of 7,800 persons per hour were added in the resort: a new 10-person gondola and two 6-person chair lifts. Besides these, a new blue ski trail was added, as well as snow-grooming vehicles, ski trail lighting, additional snowmaking, and a retention water reservoir. As for ancillary services, dining facilities, a sports store and a sports equipment rental service were added.
    Another EUR 20 mil. was invested in Slovakia into the resorts of Vysoké Tatry, Jasná Nízke Tatry and Aquapark Tatralandia. The key investments in Jasná include the finalization of the cableway at Krupová-Kosodrevina, additional snowmaking, two new snow-grooming vehicles, and the opening of new Hotel Pošta****. At the end of the FY works on the first phase of the Jasná Center project were finalized. The two-story building houses a whole visitor service center. There is central dispatching with an info center and a customer service department, a ticket office, the
    Financial Performance Review for the Year
    1 Actual capital expenditures from the management reporting for the fis\
    cal year 2016/17
    The results of the past financial year 2016/17 were again positively impacted by a successful winter season in terms of snow conditions and visit rate and yet again by a good summer season. We observed increases in skier days in the winter season as well as in the number of visitors to the leisure parks in the summer. The higher visit rate and visitor spending were the key drivers of the double digit percentage revenue increase. Moreover, the long-lasting impact of the massive investment projects of development of the Tatra resorts and hotels from prior periods totaling EUR 230 mil. at the end of 2016 was reected in the Group’s results also in the last year
    and justified an increase of ticket prices, although the average revenue from online sale of ski passes remained unchanged. Besides higher average revenue per visitor in the mountain resorts and leisure parks, TMR managed to increase visitor spending also on ancillary services such as Dining and Sports Services & Stores, thus the share of these segments on the Group’s total revenues increased again. Lastly, the sale of completed real estate projects also boosted the results.


    52 53
    ski school Maxiland, a self-service ski depot, a souvenir shop, and the luxury Crystal Bar with a view of Mt. Chopok and a sundeck. Escalators enable skiers a comfortable transfer from parking lots to ski trails. Tatralandia got new family attractions - amusement park Tatrapolis - exhibiting 12 metal miniature world-famous structures, as well as Halloween Land. Fun Park got renovated. In Vysoké Tatry rooms of Grandhotel**** Praha in Tatranská Lomnica got renovated in a “Classic” style. 62 rooms of Hotel FIS**** at Štrbské Pleso underwent a major renovation. The terraces of Hotel FIS**** and Mountain Hotel Hrebienok were extended. The interior of the start station of the cableway to Lomnický Peak was also modernized, and a new pier in the boat harbor at Štrbské Lake was built.
    At the same time TMR executed numerous smaller investments, such as resurfacing the parking lot at Krupová, ski trails and snowmaking systems amendments, maintenance investments in the hotels and restaurants, and sports stores. Additional expenditures were spent on documents of future projects. CAPEX also included costs of real estate projects Chalets Jasná de Luxe, Hotel Pošta, and costs of preparing future projects in the High Tatras.
    Loyalty Program
    TMR continued in its active sales strategy also through direct marketing and building its loyal client base within the GOPASS program. GOPASS enables TMR clients to purchase TMR products and services online or via a mobile ap at special rates and by using its services in the resorts and hotels to earn loyalty points, as well. The points can be then applied against future purchases.
    In April TMR again launched sale of Smart Season Pass - a season pass for the following season at discounted rates through its e-shop GOPASS.
    As of the end of FY, there were 665 ths members registered in the GOPASS program, whereas 203 ths new members joined.
    Acquisitions and Expansion
    In the past year TMR agreed with the town of Liberec on the terms of lease of the Czech mountain resort Ještěd and on its operation. The lease contract was signed after the end of the financial year 2016/17, in December 2017. TMR plans to modernize the resort in two phases with an estimated budget of more than CZK 600 mil. Since July 2017 TMR has been renting and operating HUMNO - music club in Tatranská Lomnica. Since January 2017 TMR also has been renting and operating Hotel Kukučka in Tatranská Lomnica.
    Financial Performance Review for the Year Financial Performance Review for the Year
    KEY PERFORMANCE INDICATORS
    (KPIs)
    Mountains and Leisure
    Visit rate and average revenues per visitor in 2016/17 were positively impacted by great snow conditions during the majority of the winter season 2016/17 as well as by changing preferences of summer vacationers due to an unfavorable security situation in foreign vacation destinations. The growth was also boosted by Smart Season Passes and customized products and services via the GOPASS program. Mountain Resorts, including Štrbské Pleso and the Szczyrk resort, recorded a total of 2.287 mil. (2.121) visitors/ skier days 2, a 7.8% increase. Leisure Parks including Legendia - Silesian Amusement Park and Aquapark Tatralandia observed a 9% growth to 855 ths. (784) visitors.
    Average revenues per visitor increased mainly in Leisure Parks, by 9.6% to EUR 13.45(12.28). Average revenues per skier day in Mountain Resorts increased 3.3% to EUR 14.37 (13.92), although with online sales the average revenue remained
    unchanged. The resort clients spent more in dining facilities on and off the slope and in the leisure parks, which improved the average revenues by 7.1% to 4.45EUR (4.16). Sports Services & Stores, which largely depend on performance of the resorts, grew in average revenues per visitor by 11.3% to EUR 1.94 (1.74) also thanks to the opening of additional branches, especially in Legendia.
    Hotels
    The weighted average occupancy of the TMR hotel portfolio remained almost unchanged with 56.6% (56.5), whilst during the year 45 rooms of rented Hotel Kukučka were added, as well as 31 rooms of the new Hotel Pošta and two new chalets with four apartments at Otupné in Jasná, managed by TMR. Most of the hotels improved its occupancy, although Hotel Pošta was first opened in the
    Key Operating Results* Revenues EBITDA EBITDA Margin
    v €‘000 2 016 /17 2 015/16 Change yoy (%) 2 016 /17 2 015/16 Change yoy (%) 2 016 /17 2 015/16 Change yoy (p.p.)
    Mountains & Leisure 67 789 60 449 12 ,1% 24 324 19 593 2 4 ,1% 35,9% 3 2 ,4% 3,5%
    Mountain Resorts 3 6 214 34 120 6 ,1% 15 410 12 510 23,2% 42,6% 36,7% 5,9%
    Leisure Parks 12 473 10 527 18, 5% 4 724 3 735 26,5% 37,9% 3 5,5% 2,4%
    Dining 13 302 11 13 2 19, 5% 3 071 2 402 2 7, 9 % 2 3 ,1% 21,6% 1, 5%
    Sports Services & Stores 5 800 4 670 24, 2% 1 119 946 18, 3% 19, 3% 20,3% -1, 0 %
    Hotels 22 265 19 910 11, 8 % 4 859 4 402 10,4% 21, 8% 2 2 ,1% -0,3%
    Real Estate 5 855 843 594,5% 2 333 1 116 10 9 ,1% 39,8% 13 2 ,4% -92 ,5%
    To t a l 95 910 81 202 18 ,1% 31 516 2 5 111 25,5% 32,9% 30,9% 1,9%
    RESULTS BY SEGMENTS AND SUBSEGMENTS
    2 The total visit rate is measured by the number of entry passes sold in \řthe aquapark and for cableways in the summer season and by the number of\ř skier days in the winter season, i.e. a person visiting a mountain resort at any time of d\řay or night, for the purpose of skiing, snowboarding or other type of do\řwnhill run. For example, one 4-day ticket means four skier days in mountain resorts, including Š\řtrbské pleso, co-operated by TMR and the owner of the resort.
    51%
    28%
    9%
    5%
    2%
    5%0%
    Mo
    untain R eso rt s
    Leis ure P ark s
    Hote ls
    Din ing
    Sport s S tore s & S erv ices
    Re al E state
    Ot her
    FY 2016/17 Investments
    Revenue Breakdown
    37,8%
    13,0%
    13,9%
    6,0%
    23,2%
    6,1%
    M
    ount ain R eso rts
    L eis u re Park s
    D in in g
    Sports Services & Stores
    H ote ls
    R eal E sta te
    Visit Rate in Mountains and Leisure
    Leisure Parks
    Dining Sports Services & Stores
    Mountain Resorts
    Average Revenues per Visitor
    Mountain Resorts Leisure Parks
    Visit Rate in 2016/17
    Leisure Parks Mountain Resorts
    0
    1 000 000
    500 000
    1 500 000 2 000 000
    2 500 000
    1H 2016/2017
    2H 2016/2017
    0 €
    2

    4

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    500 000
    1 000 000 1 500 000 2 000 000 2 500 000
    2012/132013/142014/152015/162016/17
    2012/13 2013/14 2014/15 2015/16 2016/17


    54 55
    Leisure Parks
    Revenues of Leisure Parks come mainly from sale of entry tickets to Aquapark Tatralandia and Legendia - Silesian Amusement Park and make up 13.0% (13.0) of total revenues. The revenues for last year grew by 18.5% to EUR 12.473 mil. (10.527). The revenue growth was achieved by a higher number of visitors and average revenue per visitor. The modernization of Legendia with new attractions also boosted the revenues. The second half of the financial year is traditionally stronger for Leisure Parks (May - October, 76% of the segment revenues), even though Aquapark Tatralandia runs its operations all year round, whereas Legendia is closed during the winter. EBITDA increased by 26.5% to EUR 4.724 mil. (3.735). Leisure Parks’ operating profitability improved to 37.9% (35.5).
    Dining
    Revenues of this subsegment come from the Company’s restaurants and après-ski bars in Jasná Nízke Tatry, Vysoké Tatry and both leisure parks. The last year’s revenues of this segment make 13.9% (13.7) of total revenues. Revenues
    are evenly generated in the first (50%) and in the second half-year (50%). Total revenues of this subsegment reached EUR 13.302mil. (11.132), which means an increase of 19.5%. The subsegment’s annual growth confirms the continuing trend of the clients’ rising demand for ancillary services in the resorts. Thus, TMR sees further growth potential in this subsegment and expands and improves its dining operations. Operating profitability of this subsegment reached 23.1% (21.6), with EBITDA growing to EUR 3,071 mil. (2.402). This subsegment’s success is partly dependent on success of the resorts and parks, as Dining provides supplementary services in Mountain Resorts and Leisure Parks. Opening new facilities, the increased visit rate, higher visitor spending, as well as numerous marketing events during the year contributed to the subsegment’s positive results.
    Sports Services & Stores
    Revenues generated from sports stores, ski schools, ski rent and service in the Mountain Resorts under the Tatry Motion brand and revenues from stores in the leisure parks last year made up a 6.0% (5.8) share in total revenues. Revenues from this subsegment are closely related to the visit rate in Mountain Resorts and Leisure Parks, so they also followed the upward trend and increased 24.2% to EUR 5.800 mil. (4.670). In the summer season additional stores were opened in the modernized Legendia. As these supplementary services are used more in the winter season, the stronger half-year was the first one (58%). EBITDA improved by 18.3% to EUR 1.119 mil. (0.946). Operating profitability reached 19.3% (20.3).
    Financial Performance Review for the Year Financial Performance Review for the Year
    summer and Mountain Hotel Hrebienok is open only during the summer. The hotels were occupied to full capacity during peak periods of the ‘Golden Week’ (24/12-06/01), spring break, as well as during some days in July and August. The weighted average daily room rate (ADR) increased 9.0% to EUR 71.30(65.44).During the winter season domestic clients prevailed in the hotels. In the summer season Slovak clients made up 41% of all the clients. The number of hotel guests from Poland and Israel continued to increase - by 2%.
    FINANCIAL OPERATING RESULTS
    Mountains and Leisure
    Thanks to the high level of the services offered that attracted yet again a higher number of visitors in Mountain Resorts and Leisure Parks, the main segment of Mountains and Leisure, which includes subsegments of Mountain Resorts, Leisure Parks, Dining, and Sports Services & Stores, recorded a
    12.1% growth in revenues year-over-year to reach EUR 67.789 mil. (60.449). The revenues of the main segment make up 70.7% of the Group’s total operating revenues. Thanks to the growing visit rate and average revenue per visitor all the subsegments reported a revenue growth. Mountain Resorts were up 6.1%. Leisure Parks improved revenues by 18.5%; Dining reported a 19.5% growth; whilst Sports Services & Stores improved 24.2%. The main segment’s stronger half-year in terms of revenues was the first (58% of the segment revenues, November - April) thanks to the successful winter season in Mountain Resorts. Operating profit before interest, tax and depreciation (EBITDA) increased by 24.1% to EUR 24.324 mil. (19.593), which means that operating profitability measured by EBITDA margin reached 35.9% (32.4).
    Mountain Resorts
    Within the main segment of Mountains and Leisure, Mountain Resorts is the strongest subsegment in terms of revenues, with a 37.8% (42.0) share in total revenues. Its revenues come mainly from sale of ski passes in resorts Jasná Nízke Tatry, Vysoké Tatry, and Szczyrk. Other revenues come from leases of billboards and other advertising space and from marketing events in the resorts and from fees for management consulting services to the Špindlerův Mlýn resort. Mainly thanks to the successful winter season 2016/17 the Group achieved a 6.1% revenue growth in Mountain Resorts in total of EUR 36.214 mil. (34.120). The successful winter and a stable summer season 2016/17 attracted more visitors with higher spending than the prior year to the resorts, which boosted revenues. Online ski pass sales through the GOPASS program, available in resorts Jasná and Vysoké Tatry, increased year-over-year by 15% in the number of skier days sold, and made up 24% of total ski pass sales in the Tatra resorts. The sale of 7-day ski passes surged the most - by 100% in the number of skier days sold. The upward trend of season passes sale continued, up by 35%, most of which the clients purchased in advance as the
    Smart Season Pass. Increases were observed also in the sale of 1-day passes (+23%) and 6-day passes (+13%). Half-year results of Mountain Resorts tend to be stronger in the first half of the year due to the strong winter season (72% of the segment revenues). The Szczyrk resort was closed during the summer.
    Mountain Resorts’ EBITDA increased year-over-year by 23.2% EUR to 15.410 mil. (12.510), and consequently Mountain Resorts reached operating profitability of 42.6% (36.7). The growth at the EBITDA level greater than at the revenue level was caused due to a lower allocation of overhead expenses to Mountain Resorts.
    thousands
    Revenues EBITDA EBITDA margin
    Operating Results Mountains and Leisure Parks
    29% 30% 31% 32% 33%
    34%
    35% 36% 37% 38%
    39%
    0 €
    10 000

    20 000

    30 000

    40 000

    50 000

    60 000

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    80 000

    2012/13 2013/142014/152015/162016/17
    KPIs of Hotel Portfolio
    ADR (EUR) Occupancy (%)
    Occupancy (%), price (EUR)
    0
    10 20
    30
    40 50 60
    70
    80
    2012/13 2013/142014/152015/16 2016/17
    Operating Revenues
    thousands
    Mountain Resorts Leisure Parks
    Dining Sports Services & Stores
    Hotels Real Estate
    EBITDA
    thousands
    Mountain Resorts Leisure Parks
    Dining Sports Services & Stores
    Hotels Real Estate
    0 €
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    2012/13 2013/142014/152015/162016/17
    0 €
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    2012/13 2013/142014/152015/162016/17
    Revenues 1-d ay Tic ke t Pric e in Mai n Seaso n
    thousands
    Pricing vs. Revenues Mountain Resorts
    avg . p rice in reso rts
    Jasná and Vys o ké T atry
    0 €
    5 000 €
    10 000 € 15 000 € 20 000 € 25 000 €
    30 000 € 35 000 € 40 000 € 27

    28

    29

    30

    31

    32

    33

    34

    35

    36

    37

    2012/13 2013/142014/152015/162016/17


    56 57
    Financial Performance Review for the Year
    Hotels
    The Group’s second largest segment is Hotels, revenues of which make up a 23.2% (24.5) share in total revenues. Hotels ended the financial year with revenues amounting to EUR 22.265 mil. (19.910) - an 11.8% growth. The segment’s revenues are almost evenly distributed in terms of seasons. The first half-year was a little stronger (51%). Besides the stable average occupancy and higher ADR of the hotel portfolio, the increased Hotels revenues are also attributable to added hotel capacities of Hotel Kukuka, Chalets Jasn? de Luxe, and the new Hotel Po?ta, to synergic effects with Mountain Resorts and Tatralandia, supported by the client relationship management via the Gopass program and effective marketing. The results were also impacted by full occupancy especially during peak periods, such as New Year and the ‘Golden week’ (24/12-6/1) and by a successful summer in the Tatras also thanks to the unfavorable security situation in foreign vacation destinations. EBITDA improved by 10.4% to EUR 4,859 mil. (4.402), corresponding with EBITDA margin of 21.8% (22.1).
    Real Estate
    The last year’s revenues of the Real Estate segment come from lease of Hotel Ski &Fun, Hotel Liptov, Kosodrevina Lodge, and the lodging facility Otupn? to third parties, as well as from sale of recreational real estate. Real Estate revenues make up 6.1% of total revenues and they reached the level of EUR 5.855 mil. (0.843). 3 Revenues from sale of recreational real estate - in the past year from sale of 23 bungalows of Holiday Village Tatralandia, two apartments of Chalets Jasn? de Luxe Center, one apartment of Chalets Z?hradky, and 16 apartments of Hotel Po?ta - reached EUR 5.442 mil. Thus, EBITDA rose to EUR 2.333 mil. (1.116) with EBITDA margin of 39.9% (132.4).
    Explanations( ) - data in brackets refers to the corresponding value of previous periodADR - Average daily room rate EBITDA - Earnings before interest, taxes, depreciation, and amortization FY - financial year, period from 1 November to 31 OctoberKPIs - Key Per formance Indicators p.p. - percentage points mil. - millions ths. - thousands Change yoy - change year-over-year
    Financial Performance Review for the Year
    thousands
    Operating Results Hotels
    Revenues EBITDA EBITDA margin
    0 €
    5 000 €
    10 000 € 15 000 € 20 000 € 25 000 € 0% 5%
    10%
    15% 20% 25% 30%
    2012/13 2013/142014/152015/162016/17
    3 The reported yoy significant revenue increase is caused also by a cha\řnge in accounting for sales in real estate projects, which in 2016/17 we\řre recognized as revenues and in 2015/16 as gain on sale.


    GROUP’S POSITION AT THE END OF THE YEAR


    60 61
    FINANCIAL POSITION
    Liquidity
    As of the end of 2016/17 the Group operated with liquid funds in the amount of EUR 9.584 mil. (7.493) in the form of cash and cash equivalents.
    Borrowings
    The total value of the Group’s borrowings amounted to EUR 279.320 mil. (229.805). Out of that issued bonds are valued at EUR 184.842 mil. (184.702). The total value of the Group’s bank loans and leases as of the end of the period came to EUR 94.478 mil. (45.103). The Group draws its bank borrowings from the Slovak banks Tatra banka, Poštová banka, J&T Banka, and from the 1. Tatranská, a.s. company. By drawing new loan facilities TMR mainly financed the new cableway at Krupová in the the Jasná resort, development in the Szczyrk resort and in the Legendia park. The value of borrowings with maturity within 12 months was EUR 9.880 mil. (6.996). The average interest rate on the bank borrowings for the year came to 4.64% (2.82). The level of the Group’s debt as of the period end was at 71.2% (68.4) (total debt-to-capital ratio). Total debt-to-EBITDA ratio reaches the level of 8.9 (9.2) (See Consolidated Financial Statements, Note 27, 31).
    Total Assets
    The book value of total assets increased to EUR 437.972 mil. (375.701). The value of current assets increased to EUR 84.844 mil. (67.336) mostly due to an increase in Other receivables by EUR 15.040 mil., which mostly represent prepayments on new investments. Non-current assets rose to EUR 353.128 mil. (308.366) due to completed investments that were added to the fixed assets registry. The value of fixed assets amounted to EUR 333.718 mil. (283.133). The key completed investments transferred to fixed assets inter alia include: new rides, a new theme, and ancillary services in the Legendia park; Hotel Pošta; new Chalets Jasná de Luxe; finished and approved cableway Krupová; Jasná Center - East; and in the Szczyrk resort three new cableways, snowmaking systems, a retention water reservoir, new stores, and a dining facility (See Consolidated Financial Statements, Note 15).
    Equity
    The book value of shareholders’ equity amounted to EUR 113.149 mil. (106.003), whilst retained earnings and other funds totaled EUR 27.224 mil. (24.129). Minority interest amounted to EUR 1.588 mil. (2.008).
    Group’s Position
    at the End of the Year
    Financial Position in €‘000 October 31
    2 016 /17 2 015/16
    Total Assets 437 972 375 701
    Non-current Assets 3 5 3 128 308 365
    Fixed Assets 333 718 28 3 13 3
    Other Non-current Assets 19 410 25 232
    Current Assets 84 844 67 336
    Liquid Assets 9 584 7 493
    Equity 113 14 9 10 6 0 0 3
    Liabilities 324 823 269 697
    Non-current Liabilities 286 277 23 9 197
    Current Liabilities 38 546 30 500
    Total Debt 279 320 229 804
    CASH FLOW
    Cash flow generated from operating activities reached EUR 20.380 mil. (28.600). Cash flows assigned for investment activity reached EUR -55.165 mil. (-25.752), whilst EUR 64,022 mil. (31.226) covered CAPEX associated with acquisition of property. CAPEX from managerial reporting came to EUR 65.058 mil. The Company recorded cash flows generated from financing activities in the amount of EUR 36.876 mil. (-3.574). During the year the Group repaid principal of loans received in the amount of EUR 7.638 mil. and drew new loans in the amount of EUR 55.476 mil.
    OUTLOOK
    Management expects continuing positive effects stemming from capital investments of prior periods exceeding EUR 300 mil. with impact on the next financial year and following periods, in terms of increasing the visit rate, client spending in the resorts, and growing occupancy in the hotels, especially in the off-season. The intense activity in the Real Estate segment is expected to continue also in the following periods, which should generate additional revenues and income not only in this segment but also in Hotels and ancillary services through shops and dining facilities. The gradual progress in the projects of modernization of Legendia - Silesian Amusement Park and the Szczyrk resort should bring results in terms of increased visit rate and average spending per visitor in the following periods. Besides continuing in the Polish modernization projects, in the short term the management will keep focusing on inter-segment synergies, quality management, utilization of innovative information technologies, on increasing the quality of services provided and quality of human capital, and on active sales strategy also through the GOPASS program. In terms of expansion of TMR’s operations, the
    Group will focus on the development and modernization of the leased Ještěd resort in Czechia. In the midterm horizon TMR will attempt to acquire a major alpine mountain resort.
    Explanations
    () - data in brackets refers to the corresponding value of previous periodmil. - millions thous. - thousands Total Debt-EBITDA ratio - is calculated as a sum of current and non-current loans and borrowings and other current liabilities to the amount of liabilities towards shareholders from the decrease of share capital, divided by EBITDA for the repor ted period EBITDA - earnings before interest, taxes, depreciation, and amor tization
    Cash Flows in €‘000 November 1 - October 31
    2 016 /17 2 015/16
    Net Cash from Operating Activities 20 380 28 600
    Net Cash from Investing Activities - 5 5 16 5 -25 752
    Net Cash from Financing Activities 36 876 - 3 5 74
    Net Increase in Cash and Cash Equivalents 2 091 -726
    Group’s Position at the End of the Year


    COR POR ATE SOCI A L R ESPONSIBILIT Y


    64 65
    ENVIRONMENT AND COMMUNITY
    TMR owns and operates major tourist resorts mainly in Slovakia and Poland. Majority is located in the area of national parks. The Group concentrates solely on traditional, already urbanized areas, where sports and tourism have been a tradition for decades.
    From TMR’s point of view protecting fauna and flora is a very important part of ongoing investments, and of continuing development of summer and winter tourism in the Tatras. Every investment is analyzed in terms of impact on the environment.
    Impact of Business Activities on Environment
    TMR in all of its investment and operational activities cares for environment protection and minimal impact on the natural environment. The Group takes environment into consideration during the course of its business activities and tries to minimize their impact in every segment. TMR’s effort is to select services and products in such a way that the impact on the environment is minimal. Moreover, the Group does its best to restrict relatively the use of natural resources and optimize waste production. TMR spreads this attitude towards environment internally among its employees and externally within communities by means of initiatives and events.
    The goal of TMR is to conduct business activities with a minimum energy and fuel consumption. With this goal in mind the Group also adapts its capital investments into new cableways. These new cableways are built with the latest energy efficient technologies from top world producers, like Doppelmayr and Leitner.
    For its operations the Company utilizes “green energy” -
    electric energy from renewable resources, i.e. solar, water, and wind energy, for which it was granted a certificate from the supplier. In every segment the Group aims to utilize efficient management of operations at an optimal level of energy consumption, and moreover, the Group consistently works on improving operational efficiency. In addition to the selection of energy efficient cableways TMR also cares for the correct choice of trail-grooming vehicles that have lower emissions and thus decrease the impact on the environment.
    Projects of 2016/17
    TMR’s projects of 2016/17 refer to activities of prior periods, when TMR made an active contribution to restoration of the areas, in which TMR’s business activities are performed. The Group was also proactive in preparation of educational
    activities focused on various age groups of the population.TMR has been very active in cooperation with district tourist organizations (DTOs). TMR is a member of three DTOs covering the whole region of the Company‘s operation. It includes the following DTOs:
    DTO Liptov Region DTO High Tatras Region DTO Horehronie Region
    All the aforementioned organizations developed projects of common communication and/or support to the regional infrastructure aiming to improve their establishment on the tourism market. The parties involved managed to put together funds of businesses operating in tourism and local governments; and, in accordance with the Act on Tourism, the state contributed to the projects in form of grants; as a result funds were raised for common support of the regions.
    DTO Liptov Region
    The DTO Liptov Region operated in 2017 with the budget of more than EUR 1.92 mil. It ran several projects to support summer and winter tourism, and to make regional services more attractive. The key events with the goal to support summer and winter tourism included: a summer campaign in T V JOJ, online campaigns on the domestic, Polish, and Czech market, and a fun family game - The Treasures in Liptov. In the winter season the operation of a ski & aqua bus ran again. The campaign ‘You can find everything in Liptov’ communicated the Liptov region’s wide offer and helped to boost the number of room nights. The DTO Liptov Region led other projects to boost hiking and cycling: a navigation system in Demänovská Valley and in Liptovský Trnovec; the info trail ‘The story of water’ in Demänovská Valley; a kids’ playground at Vrbické Lake; the info trail ‘The Bear Path’ in Hrabovska Valley; and marking of new 40 km of cycling
    tracks. The key mutual projects included the discount card Liptov Region Card, which more than 65 thous. Liptov tourists applied for in 2017. The organization organized LiptovFest - a festival of good fun, food, and experiences, visited by 4,300 paying visitors; then the opening of the summer and winter tourism season in Liptov; and it co-financed events ‘Riding Easter Egg to Mt. Chopok’, ‘Dragon Nights’, ‘Winter Music Opening’, ‘Ratrak Stage’, and ‘Hero Season Trophy’.
    The DTO Liptov Region became a 50% shareholder in the travel agency Region Tatry Travel s.r.o., which serves as the common sales headquarters for destination management of regions Liptov and the High Tatras. The agency’s main goal in the first year was to create an attractive product portfolio for potential foreign partners and basic communication tools (website, promotional material) to present the agency’s products under the common marketing brand ‘Enjoy Tatras‘.
    Corporate Social
    Responsibility
    DTO High Tatras Region
    Last year the DTO High Tatras Region made a contribution to the common projects in the amount of EUR 1.1 mil. sourced from membership fees and with a EUR 957 thous. state grant. The key events included - ‘Tatry Ice Master’, ‘Snow Dogs’, ‘Venetian Night at Štrbské pleso’, ‘Bear Days at Hrebienok’, ‘Marmots at the Lake’, and construction of Tatry Ice Dome, which was available to visitors from December to April. As part of marketing activities, common promotion materials were made, such as summer and winters maps, guides to Tatra experiences, hiking in the winter, photos, and product videos for the MICE client segment, and an accommodation catalogue. The High Tatras DTO sponsored the entire TATRY Card project. The DTO built statistics, ran surveys and analyses with the aim to follow the strategic vision of the location’s growth. Infotours were organized for media and for tour operators from Poland, Hungary, Austria, Turkey and others. The DTO attended fairs and exhibitions in the following cities: Warsaw, Krakow, Warsaw, Prague, Budapest, London, and at ITF Slovakiatour. It continued to support marketing of airline connections London - Poprad, Riga - Poprad, and Kiev - Poprad. The DTO entirely organized and free transport for visitors and Tatry Card holders during the winter season by the ski & aqua bus and in the summer by boosting eco tram connections.
    DTO Horehronie Region
    The DTO Horehronie Region operated in 2017 with the budget of EUR 136 thous. The region of Horehronie has a big tourist potential, which the DTO supports through destination management, and thus boosts demand for the region among domestic and foreign tourists. As part of marketing and promotional activities abroad, it attended the Go & Regiontour expo in Brno, which is considered the top promotional event for tourism in Central and Eastern
    Europe. The international online campaign was targeted mainly at Hungarian clients. On the Slovak market the online and print promotion of the Bike & E-Bike region Horehronie dominated during the summer months. The DTO provided production and print of new cycling and hiking maps of the whole Horehronie region. Cooperation with rentals of bikes and electronic bikes turned out successful, and cycling is becoming the top product of the summer season and the offseason. The top events included ‘The Royal Days of Horehronie’ or ‘Bombur Festival’ in the town of Brezno. The DTO showcased traditions to visitors during ‘Easter Joys’ or ‘Days of Valach Culture’ at Mýto pod Ďumbierom. With a series of sports events such as ‘Horehronie FIT DAY 2017’, ‘BIKETOUR through Horehronie 2017’, or ‘Hotelier Cup’ the DTO boosted visitors’ activities in the region. The DTO Horehronie Region kicked off the winter season together with the DTO Liptov Region in the Jasná resort. A few weeks later it prepared the winter season opening at the south
    side of Mt. Chopok with the first birthday of the cableway Krupova with the biggest birthday cake in Slovakia. It provided comfortable shuttle service for visitors with regular ski bus lines connecting three ski resorts and two cross-country skiing resorts from Brezno and Banska Bystrica. The Horehronie region has become a paradise for young skiers as, besides a perfect skiing, visitors can pick a movie in the Mostar cinema or they go for a swim in a renovated swimming pool.
    Tatry Magazine
    All DTOs supported their common image magazine for visitors of Tatras named Tatry Magazine. The magazine provides a lifestyle communication of attractions, events, prominent people and news in the broad Tatra region.
    Nature and Children
    Education promoting positive approach to nature is apparent in many of the Company‘s activities. The key projects focused on such tutorial and educational tasks are projects such as ‘The Treasure of Demian, the Dragon’, ‘Tatra Wilderness’, ‘Snow Dogs’ and ‘Bear Days’.
    During summer families with children discovered secrets of the mountains and Demänovská Valley, looking for traces of the Demian, the Dragon. An educational trail for children covering even larger area is presently under construction in the High Tatras. The nature trail named Tatry Wild resulted from TMR’s cooperation with the State Forests Enterprise of TANAP National Park and the Management of TANAP National Park. This project gradually expands from Tatranská Lomnica, through Hrebienok to Štrbské Pleso. The most attractive part of the project is the eco-mini park Marmot Cave at Skalnaté Pleso - an environment-friendly
    educational and fun park for children.
    Green Chopok
    In September 2017 the 4th annual Green Chopok event took place at Mt. Chopok as a public proposal of people of Liptov for cleaner mountains. Besides cleaning the trails, mountain fans also planted trees. The event was attended by primary school students, as well as seniors from a tourist club and mountain fans from all Slovakia. More than 300 attendees of Green Chopok managed to plant 2,000 trees. The activists went through five tons of rocks and garbage left from the winter season on the area of three hectares. The event’s positive impact and a great interest from public are the reason that it will take place again next year.
    Corporate Social Responsibility


    66 67
    What Kind of Tatras Do We Want
    In Slovakia, TMR has been interested in the Tatras for a longer period and the Company plans to add some more investments. However, TMR says that further development of skiing and tourism in the Tatras is not sustainable without a solving the transport situation in a complex way and looking for alternative ecological means of transport. In order to lead a constructive discussion about the Tatras, the Company initiated a platform called ‘What kind of Tatras do we want’ at www.aketatrychceme.sk , which has been used to present positive examples of making reasonable business in the Tatras and inspirations from various resorts in Europe and around the world. TMR has been using the ‘What kind of Tatras do we want’ - platform to formulate the vision of the Tatras from the point of view of entrepreneurs and at the same time to get feedback and opinions about the development of the Tatras from people around Slovakia. Views of entrepreneurs and investors who are interested in developing this area and improving the quality of services here should be as relevant as opinions of other parties. Of almost 1,300 respondents from all around Slovakia that were included in the research, 75% said the issue of the development of the High Tatras referred to the whole territory of Slovakia. Only 12% of them think that it is only a matter of inhabitants that live in the town of Vysoké Tatry and 9% hold the view that the Tatras should be dealt with on the regional level.
    Sports Events
    The Group proactively supports sport events in its resorts, either as a partner or as a sponsor. In the last period, TMR participated in the following sports races:
    Vertical Grand Tour (Tatranská Lomnica) The Slovak Freestyle Cup (Jasná) Slovak Grand Prix (Štrbské Pleso) FIS Europe Cup Slopestyle (Jasná) European Cup - Men’s Giant Slalom (Jasná) Liptov Ride (Mt. Chopok) Poprad - Tatry Challenger Tour Jasná Adrenalin CGC
    Supporting Athletes
    TMR supports talented pro skiers that are members of the Slovak Skiing Association and that have achieved extraordinary performance results in the past year, have represented Slovakia in international races, and have finished in top ranks in alpine disciplines. TMR’s support covers EUR 20 thousand per athletes, plus ski passes and aqua passes.
    Supporting Ski Courses for Students
    TMR supports ski courses with special rates in top Slovak resorts, best equipped with cableways, snowmaking, and the size and length of ski trails. TMR regularly offers ski courses for all types of primary schools, high schools and universities at special rates.
    Tatra Knights
    TMR supports good ideas and activities focused on the outdoors where it is centered. The goal of the Tatra Knights project is to motivate pupils to contribute to environmental care and to intensify their interest. It also motivates pupils to keep studying the importance of sustaining biodiversity and eco topics not taught in schools. The national ecological project Tatra Knights focuses on pupils of primary schools and high schools. During the prior school year the pupils competed in ecological categories, and the best classes were picked in June 2017. TMR supported the project financially and with material procurement. TMR’s employees took part in judging and helped to execute the winning ecological projects. The projects of three winning schools of Rejdová, Dobšiná, and Rakovec nad Ondavou, ready to be executed, ended the first annual Tatra Knights project.
    Corporate Social Responsibility Corporate Social Responsibility


    68 69
    Corporate Social Responsibility Corporate Social Responsibility
    HUMAN RESOURCES
    Human resources are an important factor in the Group’s success, thus the HR department continues to follow the preset course of enhancing the processes in the HR management, jobs stabilization, continuing employee education, and utilization of all modern HR tools in order to achieve quality, stability, and the Group’s growth.
    The annual average number of the Group employees for the financial year 2016/17 totaled 1,289 (1,090). This proves that the Group is considered a major and credible employer. Despite the Group’s positive business performance, jobs seasonality is still present. The Group hires a high number of full-time employees and contractors especially before the winter and summer season, which shows efficient human capital management. In comparing with prior years, differences between the summer and winter season are diminishing. By efficient utilization of human resources we were able to decrease the number of seasonal employees and stabilize full-time employees.
    TMR strives to provide equal employment opportunity, as seen in the graph below. The Group employs 52.0% men and 48% women, and this ratio is closer to balance with each year. TMR gives an employment opportunity to young people without prior professional experience, as well, as 36% of our employees belong to the 18-30 age group and 28% are between 31 - 40 years old. Employees with age 41 - 50 make up 19%, and 18% of employees are over 50.
    In 2016/17 the Group published 518 job offers and recorded 6,531 responses. The increase in the job offers published is the reflection of the labor market which is facing a lack of skilled labor force in the whole EU. Due to this status quo TMR puts emphasis on internal learning, requalification of the human capital, and employees’ personal growth, thus TMR prefers internal recruitment in the hiring process.
    PROJECTS
    The key performance indicator of TMR’s employees is TMR’s clients’ satisfaction and their return to TMR’s resorts. On the other hand, it is important for the Group to monitor satisfaction of its employees and to focus on their personal and professional growth.
    Communication
    Last year several projects were launched aimed to support and speed up employees’ integration (new and senior) as well as to support communication among all resorts, passing of information among all employees on the Group’s
    No. of Employees
    0
    200 400
    600
    800
    1000 1200 1400
    NovDecJanFeb Mar AprMay JunJulAug SepOct
    2012/13 2013/14 2014/15 2015/16 2016/17
    Hotels
    Mountain Resorts
    Leisure Parks
    Dining
    Tatry Motion
    TMRS
    35%
    21%
    6%
    19%
    3%
    16%
    Employment Trend 2013-2017
    Employeees‘ Age and Gender Structure 2017
    Employment by Segments
    news, its strategy, new projects, and strengthening and adoption of corporate values.
    TeMeR newspaper - subtitled “Newspaper not only for Tatry mountain resorts employees” was published in 2,500 copies in Slovak and Polish in three editions. TeMeR newspaper is one of the communication channels distributing up-to-date information on the Group.
    Employee brochure - provides basic information on TMR, on its acquisitions, values, its vision and social program. It serves as a guide in the onboarding process and provides useful information also for long-time employees. The brochure was published in 3,000 copies and was distributed among all the employees as well as among the new ones. The updated online version is available to all employees.
    In 2017 the Company conducted an employee satisfaction survey - Corporate Identity No. 3.The survey was focused on efficiency of the application of remedial measures from prior surveys as well as on new feedback from the employees.
    Evaluation dialogues - are another tool to raise employee performance by setting goals and their evaluation. Setting of personal and career growth is a part of the dialogues, as well as defining job learning for the following year. In 2016/17 automatization of the evaluation dialogues was implemented.
    Cooperation with School and Universities
    TMR puts emphasis on building relationships with high schools and universities in a way so that the Group can create an efficient source of qualified and highly professional employees. TMR focuses on decreasing unemployment of young people caused by differences between skills of school graduates and employers’ expectations. Therefore, TMR successfully joined the dual education system in the school year 2016/17, and in the school year 2017/18 the number of participating students increased 64%. In the school year 2016/17 there were 22students of Hotel Academy in Liptovský Mikuláš involved in its operations. In the school year 2017/18 16 more students joined the program from Otto Brückner Hotel Academy in Kežmarok. There are 48 students in total participating in the dual education program. Students perform professional practice in TMR’s hotels and restaurants - Grandhotel Praha, Hotel Kukučka, HUMNO
    Restaurant & Music Pub, Restaurant Skalnaté pleso, Hotel Grand Jasná, Hotel Tri Studničky, Restaurant Paradiso, and Zbojnícka koliba restaurant. Currently, other TMR operations are undergoing accreditation for the program. TMR has also a cooperation memorandum signed with the Catholic University of Ružomberok in the form of participating in the ERAZMUS plus programs. There are 20 foreign full-time students of the university working part-time for TMR.
    This way TMR strives to maintain a high level of its employees’ qualification by preparing its future employees for the exact technologies and equipment that it uses in its operations. By dually educating students with focus on demand of the labor market, TMR creates an opportunity for a long-term and stable company growth; and by having joined the dual education model it reacts on higher client requirements, which gives it a competitive advantage in its business sector.
    Employee Learning
    The Group supports a continuing development of skills, knowledge, and employee loyalty on all levels in order to enable them to efficiently fulfill their job duties, improve their job performance, and to create further advancement opportunities for the employees. In 2016 the Group created and recruited professionals for the new department of learning and development, which has executed an analysis of the employees’ learning needs based on the Company strategy, goals, and the system of regular job performance evaluation of the employees. The department keeps a check on the level of personal profile, potential, and qualification of each employee and sets individual development plans. The department further prepared a learning plan for 2016/17, a catalogue with internal learning courses, and a financial plan for external learning. In 2017 the department ran 205 courses for 2,042 employees during 935 hours, i.e. 8,915 attendee hours.
    Social Program and Benefits
    The well designed social program includes many activities, the goal of which is to fully unify TMR employees and to achieve comprehension and adoption of TMR goals in order to build corporate culture and create a feeling of corporate togetherness. The employees have a chance to use a wide variety of employee benefits. Also this way TMR wants to enable the employees and their families to try out all the services that TMR offers, and thus to boost the overall transfer of knowledge about the products and last but not least to spread positive word of mouth in their networks.
    In 2017 the validity of the benefits was extended from 12 to 17 months. Also, benefits were distributed to employees who had worked for 10 years for the Company and left, and to those who have retired.
    Men Women 18-30
    31-4041-5051-60over 60
    No. of Employees
    0
    50
    100 150 200 250 300 350
    400
    450


    COR POR ATE GOV ER NA NCE


    72 73
    CORPORATE GOVERNANCE
    PRINCIPLES
    TMR’s corporate governance is regulated by the principles and methods outlined in the Company Articles, TMR’s Code of Conduct, in the Corporate Governance Code of companies in Slovakia, in the Rules of Organization and in the set of managing acts (guidelines), which are published at the Company‘s registered office. The aforementioned principles and methods are communicated to the Company‘s employees.
    CORPORATE BODIES
    AND MANAGEMENT
    BOARD OF DIRECTORS
    The Board of Directors is a statutory body of Tatry mountain resorts, a.s. The Board of Directors regulates the Company‘s activities and decides all Company matters, unless legal regulations or the Company‘s Articles stipulate that such matters fall under the competence of the General Meeting or the Supervisory Board. Besides other documents, the Board of Directors submits the draft investment and financial plan for approval by the Supervisory Board and is responsible for meeting the plan. The Board of Directors submits the Company Articles for approval by the General Meeting. The Board of Directors convenes the General Meeting at least once a year.
    The power to act on behalf of the Company in all matters is always held jointly by two members of the Board of Directors. Members of the Board of Directors are elected and removed by the Supervisory Board. The term of office of members of the Board of Directors is five years; re-election is not allowed. Additionally, the Supervisory Board shall appoint the Chairman and the Vice-Chairman of the Board of Directors from among the members of the Board of Directors.
    The Board of Directors does not have its own Statute or Committees.
    The Board of Directors holds sessions as necessary; at least once in two months. The Board of Directors holds a quorum if a session is attended by a majority of all members of the Board of Directors. A decision of the Board of Directors is adopted if more than half of the members of the Board of Directors voted in the affirmative.
    As of 31 October 2017, the Board of Directors comprised four members: Bohuš Hlavatý - Chairman of the Board of Directors Branislav Gábriš - Vice-Chairman of the Board of Directors Jozef Hodek - member of the Board of Directors Andrej Devečka - member of the Board of Directors
    Members of the Board of Directors
    Bohuš Hlavatý - Chairman of the Board of Directors and CEO of TMR since 29/06/2009 In June 2009 Ing. Hlavatý was first elected as a member of the Company’s Board of Directors and as the Chairman of the Board of Directors. On 27/05/2014 he was reelected as a member of the Board of Directors and its Chairman, effective as of 30/06/2014. Since 2009 Mr. Hlavatý also holds the office of the Company’s Chief Executive Officer. Under his leadership, TMR underwent a successful revitalization and started making use of synergies with its subsidiaries. He managed the successful issue of TMR shares on the Bratislava Stock Exchange. Since 2006 he has held a number of senior managerial positions in hotel and tourism sectors in the High and Low Tatras. In 2006 - 2008 he held the position of CEO of JASNÁ Nízke Tatry (predecessor of TMR) and CEO of Tatranské lanové dráhy (Tatra Cableways). Previously, he held top managerial positions at Slovak, Polish and Czech FMCG companies: Vodní sklo Brno ( Vice-Chairman of the Executive Board 2003 - 2006), Wyborova SA (Pernod Ricard Poland) (Sales Director 2001 - 2003), Seagram Poland (Sales Director 1999 - 2001), Seagram Slovakia (Sales Director 1995 - 1999), and BOBI Slovakia (since 1997 Kimberley Clark) (Director 1994 - 1995).
    Since November 2006 Ing. Hlavatý has been a partner and a legal representative in BAKK s.r.o. He is also a member of the supervisory board of the Polish company Korona Ziemi Sp. z o.o., a member of the supervisory boards of Szczyrkowski Ośrodek Narciarski S.A. and Śląskie Wesołe Miasteczko Sp. z o.o. Since 05/05/2017 he has been a member of the management board of TMR Ještěd a.s. (till 31/01/2018 Tatry mountain resorts CR, a.s.) and since 30/09/2017 he has been chairman of the supervisory board of Tatry mountain resorts PL, a.s.
    Number of shares held as of 31 October 2017: 710
    Jozef Hodek - member of the Board of Directors and CFO of the Company since 29/06/2009
    Mr. Hodek was first elected as a member of the Board of Directors in June 2009. On 27/05/2014 he was reelected, effective as of 30/06/2014. He joined the Company as the Chief Financial Officer in 2007; later he was engaged in the financial consolidation of the companies which now are
    Corporate Governance
    members of TMR. From 2008 to 2009, he held the position of Chief Financial Officer of Tatry mountain resort services, a.s., which merged with TMR. Currently, he serves as the Company’s CFO. He was engaged in TMR efficiency improvement processes, the issue of new shares and listing on the Bratislava Stock Exchange. Previously, in 2006 to 2007, he worked in the audit department of Pricewaterhouse Cooper Slovakia. He graduated from the University of Economics, Faculty of Business Informatics in Bratislava.
    He is also a supervisory board member at the Polish company Szczyrkowski Ośrodek Narciarski S.A., at Korona Ziemi Sp. z o.o., and at Śląskie Wesołe Miasteczko Sp. z o.o..Since 05/05/2017 he has been a member of the management board of TMR Ještěd a.s. (till 31/01/2018 Tatry mountain resorts CR, a.s.) and since 30/09/2017 he has been a member of the supervisory board of Tatry mountain resorts PL, a.s. From August 2012 till 31/07/2017 he served as a supervisory board member at MELIDA, a.s.
    Number of shares held as of 31 October 2017: 431
    Branislav Gábriš - Vice-Chairman of the Board of Directors since 18/02/2011
    Mr. Gábriš was first elected as a member of the Board of Directors and as Vice-Chairman of the Board of Directors in February 2011. At the Supervisory Board meeting on 18/03/2016 he was reelected a member of the Board of Directors and appointed the vice-chairman of the Company’s Board of Directors, effective as of 18/03/2016. Previously, he worked as an IT Manager in the real estate company NITRA REAL GROUP, a.s., where held the position of Chairman of the Board of Directors. He is a graduate (master‘s degree: M.Sc.) of the University of Technology in Košice.
    Besides serving on the Board of Directors of TMR, NITRA REAL GROUP, and TSS GRADE, a.s., Ing. Gábriš is a legal representative at Traťová strojní stanice Olomouc, spol. s r.o., SANUS Real, s.r.o. and HS WEST, s. r.o. He is also chairman of the Board of Directors at Tatralandia a.s., TAVIS, a.s., he served as a chairman of the Board of Directors atSTAVCOM-HP a.s. till 30/06/2016, and as a vice-chairman of ŽS Real a.s. till 30/06/2016.
    Number of shares held as of 31 October 2017: 0
    Andrej Devečka - member of the Board of Directors since 22/12/2011
    Mr. Devečka was elected as a member of the Board of Directors in December 2011. Since 1991 he has been an owner, businessman, co-owner, executive and member of the Supervisory Board in a number of companies. Previously, he held the position of Senior Manager in Tesla Liptovský Hrádok, a technology machinery company. He graduated from the University of Technology in Liptovsky Mikuláš, with a specialization in microelectronics and laser technology.
    Besides serving on the Board of Directors of TMR Ing. Devečka serves as a legal representative at HOLLYWOOD C.E.S., s.r.o. and C4U, s.r.o. Since 30/09/2017 he has been a supervisory board member of Tatry mountain resorts PL, a.s.
    Number of shares held as of 31 October 2017: 500
    Remuneration of Members of the Board of Directors
    Remuneration of members of the Company‘s Board of Directors is governed by “Remuneration Rules for Members of the Board of Directors of Tatry Mountain Resorts, a.s.” (hereinafter only the “Remuneration Rules”), approved by the Company‘s Supervisory Board on 12/09/2013 and by contracts on office signed between members of the Board of Directors and the Company, and approved by the Company‘s Supervisory Board.
    In accordance with the Remuneration Rules and the signed contracts on the performance of the office, the following remuneration is paid to members of the Board of Directors:
    Basic Flat Remuneration: the amount is defined on an individual basis for each member of the Board of Directors, upon decision of the Supervisory Board when electing the member of the Board of Directors;
    Extraordinary Bonuses are paid to members of the Board of Directors after meeting the criteria defined in the Remuneration Rules. The amount of bonuses for members of the Board of Directors and deadlines for their payment are defined in the Remuneration Rules, which are tied to meeting the plan based on EBITDA. The total amount of extraordinary bonuses of the Board of Directors shall not exceed 1% of the Company’s EBITDA.
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    SUPERVISORY BOARD
    The Supervisory Board is the Company‘s supreme monitoring body. It supervises the exercise of the Board of Directors’ competences and performance of the Company‘s business activities. The Supervisory Board, inter alia, approves draft financial plans submitted by the Board of Directors, significant investments and other material, financial and business transactions for the relevant financial year, approves the rules for the remuneration of members the Board of Directors and reports to the General Meeting regarding results of its monitoring activities.
    The Supervisory Board is comprised of nine members. The term of office is five years, and re-election is not allowed. Members of the Supervisory Board are elected and removed by the General Meeting. If, at the moment of an election, the Company employs more than 50 employees on full-time employment, two thirds of the members of the Supervisory Board are elected and removed by the General Meeting and one third is elected and removed by the Company‘s employees. The Supervisory Board elects the Chairman and Vice-Chairman of the Supervisory Board from among its members.
    As of 31 October 2017, the Supervisor y Board was comprised of six members:
    Igor Rattaj - Chairman of the Supervisory Board, elected by the General Meeting; František Hodorovský - Vice-Chairman of the Supervisory Board, elected by the General Meeting; Adam Tomis - member of the Supervisory Board, elected by the General Meeting Pavol Mikušiak -member of the Supervisory Board, elected by the General Meeting; Roman Kudláček - member of the Supervisory Board, elected by the General Meeting; Martin Kopecký - member of the Supervisory Board, elected by the General Meeting from; Ján Štetka -member of the Supervisory Board, elected by TMR employees till 30/06/2017; Peter Kubeňa - independent member of the Supervisory Board, elected by TMR employees till 30/06/2017; Miroslav Roth - independent member of the Supervisory Board, elected by TMR employees till 30/06/2017.
    Changes during the year:28/04/2017 - the Annual General Meeting reelected Roman Kudláček a member of the Supervisory Board, effective as of 28/04/2017. As of 30/06/2017 the office term ended for the Supervisory Board members elected by the Company employees.
    Members of the Supervisory Board
    Igor Rattaj - Chairman of the Supervisory Board since 29/06/2009
    Mr. Rattaj has held the office of the Chairman of the Supervisory Board since June 2009, when he was elected by the General Meeting as a member of the Supervisory Board and reelected by the General Meeting on 12/04/2014. He has extensive experience in financing. Additionally, he is a member of Supervisory Boards and an Executive in a number of companies. He worked as Director for Trading with Securities in J&T Securities. Previously, he held the position of Vice-Chairman of the Board of Directors and Director for Private Banking at “Podnikatelská banka” in Prague. He graduated from the Slovak University of Technology, Faculty of Electrical Engineering in Bratislava.
    Besides his role as TMR’s Chairman of the Supervisory Board, Ing. Rattaj holds positions as a member of the Board of Directors of 1. Garantovaná, a.s., a vice-chairman of the board of directors of CAREPAR, a.s., Czechia, a member of the board of directors of Park Orbis Pictus a.s., Czechia, a chairman of the Board of Directors at MELIDA, a.s. until 13/04/2017, a member of the board of directors of NARCIUS, a.s., and a director and a management board member of HOBACOR, a.s., Czechia. As of 31/10/2017 he also serves as a legal representative at KPRHT 5, s. r. o., Thalia s.r.o., C4U, s.r.o, MONTIR, s.r.o. RCBT, s. r. o., ORBIS NATURA, s.r.o., Czechia, MORAVA SPORT, s.r.o., and Aerodrome Promotion s.r.o., Czechia. He is also a member of the Supervisory Board of RIVERSAND a. s., Snowparadise a.s., Huricane Factory a.s., Profimedia.CZ a.s., and SOLIVARY akciová spoločnosť Prešov in liquidation, HAMBRAND a.s.,Czechia. Since 05/05/2017 he has been chairman of the management board of TMR Ještěd a.s. (till 31.01.2018 Tatry mountain resorts CR, a.s.). Since 11/08/2017 he has also served as a management board member of Nadace J&T. He is a 100% partner at In Vestito, s.r.o., Czechia and a parnter at BEB, s.r.o., Czechia.
    Number of shares held as of 31 October 2017: 3,300 (Igor Rattaj), 1,262,139 (C.I. CAPITAL INDUSTRIES LIMITED, 100%), 664,058 (KEY DEE LIMITED, 50%)
    František Hodorovský - member of the Supervisory Board since 18/01/2011
    In January 2011, Mr Hodorovský was first elected by the General Meeting as a member of the Supervisory Board and, at the same time, he was elected by the Supervisory Board as Vice-Chairman of the Supervisory Board, as the owner of Tatralandia, which was acquired by the Company. The Annual General Meeting reelected František Hodorovský a member of the Supervisory Board, effective as of 28/04/2016. The Supervisory Board at its meeting
    Corporate Governance
    on 28/04/2016 appointed Franti?ek Hodorovsk? its vice-chairman as of 28/04/2016. Since 1996, he has held various positions as a legal representative, partner and shareholder in various companies operating in the tourism industry. He graduated from the University of Economics in Bratislava, Faculty of Business Management.
    Besides his role as TMR’s member of the Supervisory Board, Ing. Hodorovsk? serves as a legal representative in BELGOMET, s.r.o., DITERGO, s.r.o., EL AFINA, s.r.o., FOREST HILL COMPANY, s. r. o., MINERVASIS, s.r.o., SLOVK ARPATIA DANUBE, s.r.o., SLOVK ARPATIA, s.r.o., ENNEL, s.r.o. and TLD, s. r. o.; as a partner in E-is-W, s.r.o. and DITERGO, s.r.o.
    Number of shares held as of 31 October 2017: 0 (Franti?ek Hodorovsk?), 1,030,919 (FOREST HILL COMPANY, s.r.o., 10 0%)
    Adam Tomis - member of the Supervisory Board since 12/04/2014
    Mr. Tomis was elected a Supervisory Board member by the General Meeting on 12/04/2014. Currently, he serves as a project manager responsible for non-banking investments of the J&T Group. During 2012-2013 he worked in a consulting firm McKinsey&Company on projects in banking and telecommunications. Before, he had served for eight years at the investment firm Benson Oak Capital and for one year at the independent air travel agency Travel Service. Mr. Tomis earned his college degree at the Charles University in Prague, the Institute of Economic Studies, majoring in Finance, financial markets, and banking.
    Beside his role of TMR’s Supervisory Board member, Adam Tomis serves as a member of the board of directors of Equity Holding, a.s., Czechia and a supervisory board member of Westminster JV a.s., Czechia.
    Number of shares held as of 31 October 2017: 0
    Pavol Mikušiak - member of the Supervisory Board since 2 7/4 / 2 0 13
    Ing. Mikušiak was elected a member of the Supervisory Board in April 2013 by the General Meeting. He is a member of corporate bodies of several Slovak companies. Since 1996 he serves as business director of CBA Verex, a.s. Previously he worked as foreign trade director at Verex, s.r.o. (1992 - 1996) and as a scientific researcher at Research Institute in Liptovský Mikuláš (1987 - 1992). He graduated from the Technical University in Košice, the Faculty of information technologies and programming. Currently, besides his role as TMR’s member of the
    Supervisory Board, Ing. Mikušiak serves as a member of the Supervisory Board at CBA SK, a.s., OSKO, a.s., EUROCOM Investment, s.r.o., WORLD EXCO, s.r.o, and LEVEL a.s. At the same time, he holds a position of chairman of the Board of Directors at Svätojánske Kúpele, a.s., and NARCIUS, a.s., vice-chairman of the Board of Directors at CBA VEREX, a.s., VEREX HOLDING, a.s. and VEREX-ELTO, a.s.; and a member of the board at VETEX ŽILINA, a.s. He is a legal representative of ELTO REALITY, s.r.o., VEREX REALITY s.r.o., PeLiM, práčovne a čistiarne, s.r.o. and MPL Invest, s.r.o.
    Number of shares held as of 31 October 2017: 0 (Pavol Mikušiak), 23 000 ( Verex Holding, a.s., 25%)
    Roman Kudláček - member of the Supervisory Board since 21/4/2012
    In April 2011, Mr Kudláček was elected by the General Meeting as a member of the Supervisory Board. He has extensive experience in machinery and engineering. Since 2000 he has held the position of Chairman of the Board of Directors in K&M, a.s. From 2001 to 2008, he worked as an executive of Liptosol, s.r.o. in Liptovský Mikuláš. Previously he held the position of Chairman of the Board of Directors at the machinery manufacturer LIPTOVSKÉ STROJÁRNE plus, a.s. (1997 - 1999). From 1993 to 1999 he was an Executive of RBL, s.r.o. During the prior two years he was engaged in retail business activities.
    Besides his membership on the Supervisory Board of TMR, Mr Kudláček is a legal representative at NORDBELL s.r.o. and a member of the Supervisory Board at EUROCOM Investment, s.r.o. a WORLD EXCO s.r.o.
    Number of shares held as of 31 October 2017: 1,000
    Martin Kopecký - member of the Supervisory Board from 25/04/2015
    PhDr. Martin Kopecký, MSc, CFA was elected a member of the Supervisory Board by the General Meeting on 25/04/2015. Since 2011 he has been working at J&T IB and Capital Markets, specializing in bonds issues and M& As within the J&T group, as well as externally. He has experience with transactions in banking, consumer finance, and retail. Previously, he worked at Ernst & Young in transactions consulting and valuations. He earned his master’s degree at Oxford University and PhDr. at Charles University in Prague. Also he is a CFA - Chartered Financial Analyst.
    Number of shares held as of 31 October 2017: 0
    Ján Štetka - member of the Supervisory Board since 3 0/6 / 2012 In June 2012, Mr. Štetka was elected as a member of
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    the Supervisory Board by employees of the Company. Since 1998 he has been working for TMR as Cableways Operation Manager in the resort Jasná Nízke Tatry. Before joining TMR he worked as Director for Cableways in Telemar, a.s. and before that he worked at Javorina travel agency. He has a master degree (M.Sc.) as a graduate of the Slovak University of Technology in Bratislava, with a specialization in mechanical engineering.
    Number of shares held as of 31 October 2017: 15
    Peter Kubeňa - independent member of the Supervisory Board since 30/6/2012
    Mr. Kubeňa was elected as a member of the Supervisory Board by employees of the Company in June 2012. He presently works at TMR as Facility Management Director in Aquapark Tatralandia; he has held this position since 1998. Previously, he studied gardening and landscaping at the Slovak Agricultural University.
    Number of shares held as of 31 October 2017: 0
    Miroslav Roth - independent member of the Supervisory Board since 30/6/2012
    Mr. Roth was elected as a member of the Supervisory Board by employees of the Company in June 2012. He works for the Company as an electrical networks specialist in the resort Vysoké Tatry. He had previously held this position from 1985 in Tatranské lanové dráhy, a.s.
    Number of shares held as of 31 October 2017: 0
    Remuneration of Members of the Supervisory Board
    Remuneration of members of the Company‘s Supervisory Board is regulated by the “Remuneration Rules for Members of the Supervisory Board of Tatry Mountain Resorts, a.s.” (hereinafter only the “Supervisory Board Remuneration Rules”) approved by the Company‘s General Meeting on 30 April 2010 and in accordance with contracts on office signed between members of the Supervisory Board and the Company, and approved by the Company‘s General Meeting.
    Basic remuneration is paid to members of the Supervisory Board in accordance with the Supervisory Board Remuneration Rules and the contracts on office.
    Total remuneration paid for the year ending 31 October 2017 totaled EUR 40 thousand (42).
    AUDIT COMMITTEE
    The Company has an Audit Committee in place which monitors the preparation of financial statements and recommends an auditor for auditing the Company‘s financial statement. Other responsibilities are defined by law and by the Company‘s Articles. The Audit Committee is comprised of two members, who are elected and removed by the General Meeting based on the proposal submitted either by the Board of Directors or by the Company‘s shareholders.
    As of 31 October 2017, the Audit Committee comprised two members:
    Jozef Hodek - TMR’s CFO and member of the Board of Directors Viera Prokopová - independent member of the Audit Committee
    Remuneration of the Audit Committee
    Remuneration of the Audit Committee is regulated by contracts on office signed between members of the Audit Committee and the Company and approved by the Supervisory Board and by the rules of remuneration approved by the Supervisory Board.
    For the year ending 31 October 2017 based on the decision of the Supervisory Board from 30/06/2017, remuneration for 2016/17 was distributed to the Audit Committee member, Mrs. Prokopová, in the amount of EUR 400. No remuneration was paid to Mr. Hodek.
    TOP MANAGEMENT
    The top management’s responsibility is the day-to-day management of operations and service departments.
    As of 31 October 2017, the top management comprised nine members:
    Bohuš Hlavatý - CEO of TMR and Chairman of the Board of Directors Jozef Hodek - CFO of TMR and member of the Board of Directors Dušan Slavkovský - Director of the Mountain Resort Vysoké Tatry Matej Hulej - Director of the Mountain Resort Jasná N í z k e Ta t r y Tomáš Kimlička - Finance Director Vladimír Čukan - Director of Development František Šoltis - Director of Trade and Marketing Igor Mráz - Director of Aquaparks Čeněk Jílek - Director of the Špindlerův Mlýn resort
    Corporate Governance
    Bohuš Hlavatý - CEO and Chairman of the Board of Directors of the Company
    For personal data see the description of his position in the Board of Directors.
    Jozef Hodek - CFO and member of the Board of Directors of the Company
    For personal data see the description of his position in the Board of Directors.
    Dušan Slavkovský - Director of the Mountain Resort Vysoké Tatry
    Mr. Slavkovský was first elected as a member of the Board of Directors in May 2010. On 23/03/2015 he was reelected, effective as of 01/05/2015. At the Supervisory Board Meeting on 28/04/2016 he was removed as a member of the Board of Directors effective as of 28/04/2016 due to the change in Articles of Association approved by the AGM, which decreased the number of members of the Board of Directors from six to four. In the past he served as Director of mountain resorts; following an organizational restructuring in the Company he is now Director of the mountain resort Vysoké Tatry. Previously he held the position of Director of Tatranské lanové dráhy, a.s. Under his leadership the Vysoké Tatry resort, which was primarily focused on the year-long operation of cableways, was turned into a mountain resort providing comprehensive and high-quality year-long services. Previous jobs include Odštepný závod ŽSR Tatranské lanové dráhy (Director) and Tatranské lanové dráhy, a. s. (Director).
    Besides his roles at TMR, Ing. Slavkovský sits on the Board of Directors of 1. Tatranská, akciová spoločnosť and Tatranské družstvo. He was also vice-chairman of Szczyrkowski Ośrodek Narciarski S.A. till 12/04/2017.
    Number of shares held as of 31 October 2017: 105
    Matej Hulej - Director of the Mountain Resort Jasná N í z k e Ta t r y
    Mr Hulej joined the company in 2007, since May 2010 he has held the position of Director for Sports Services and Stores of TMR. Since 2015 he serves as Director of the Mountain Resort Jasná Nízke Tatry. Previously he worked as Sales Director at Flash Web spol. s r.o. and as Product and Stock Manager at Outdoor Bratislava. He graduated from the University of Economics in Bratislava, branch Information Technologies. Additionally, Mr. Hulej is Director of the SAFL civic association; for the last nine years, the association has organised the internationally recognised freeride ski races, one of ten world Freeride World
    Qualification contests, known as JASNA ADRENALIN.
    Number of shares held as of 31 October 2017: 104
    Tomáš Kimlička - Finance Director
    Tomáš Kimlička joined TMR in 2010 as Finance Director responsible for accounting, taxes, controlling, reporting, IT procurement, and office management. Previously he held various senior finance roles at Pirelli Cables, SkyEurope Airlines, and Dell. Mr. Kimlička graduated from the University of Economics in Bratislava, Faculty of Business Informatics with major in Accounting and Audit.
    Number of shares held as of 31 October 2017: 0
    Vladimír Čukan - Director of Development
    He has held his role since TMR‘s incorporation. Earlier he served as a member of the board of directors at Tatranské lanové dráhy, a.s. Under his leadership all key investment projects have been undertaken in mountain resorts of the High and Low Tatras, especially cableway constructions, ski trails with snowmaking, and parking lots. Previous roles include the ski resort of SCR-Veľká Rača, a.s. (Director), Roller bearing plant of Kysucké Nové mesto (Manufacturing Director and Director of Quality), TOS Čelákovice (metallurgy).
    Number of shares held as of 31 October 2017: 0
    František Šoltis - Director of Trade and Marketing
    He has served as Director of Trade and Marketing at TMR since April 2007. He has managed marketing campaigns in Slovakia, the Czech Republic, Poland, Ukraine, and in the Baltic countries. The team under his leadership organized more than 100 TMR marketing events. He launched the loyalty CRM system GOPASS, which as of today has more than 60 thousand members. Besides this role at TMR he represents the Company in district tourist organizations of the High and Low Tatras and Liptov. Before his career in TMR he served as a director in companies Seagram Slovakia and Belvedere Slovakia.
    Number of shares held as of 31 October 2017: 107
    Igor Mráz - Director of Aquaparks
    Mr. Mráz was integrated to TMR in April 2011 as director of Aquapark Tatralandia. He held an executive role in Aquapark Tatralandia since 2003 till 30/03/2015 and again since 04/08/2015. He served on positions of a project manager and an investments director. From 2009 to 2012 he also served as a member of the Board
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    of Directors at Tatralandia a.s. Under his leadership the successful project, Tropical Paradise, was launched. From 01/11/2014 till 31/07/2015 he served as a legal representative at EUROCOM Investment, s.r.o. Before coming to work at Aquapark Tatralandia, he worked at a private architectural firm. He graduated from Technical University in Košice, Faculty of Civil Engineering majoring in Civil Engineering.
    Number of shares held as of 31 October 2017: 0
    Čeněk Jílek - Director of the Špindlerův Mlýn resort
    Mr. Jílek holds the position of Director of the Špindlerův Mlýn resort, operated by Melida a.s., since November 2012. Earlier he served three years as a sales manager of the Tatry Motion retail stores, which belong to TMR. He has also gained his experiences in tourism during seven years as a sales manager in the luxury hotel segment in Canary Islands. He received his MBA degree from Bircham International University.
    Mr. Jílek serves as chairman of the board of directors of the Czech company MELIDA, a.s., he is vice-chairman of the board of directors of SKOL MA X Ski School, a. s., Czechia, a member of the board of directors of HAMBRAND a.s., a supervisory board member of CAREPAR, a.s., Czechia, a statutory director and a management board member of TMR Ještěd a.s. (till 31.01.2018 Tatry mountain resorts CR, a.s.), and a partner and legal representative of Refugio, s.r.o.
    Number of shares held as of 31 October 2017: 0
    Remuneration of the Key Management
    The Company’s key management comprises members of the Board of Directors and members of the Top Management. The Board of Directors determines and approves the remuneration of Top Management based on achieved results in each resort and segment. For the year ended on October 31, 2017 key management was paid basic remuneration totaling EUR 678 ths. (697). Extraordinary bonuses to key management amounted to EUR 1.068 mil. (1.206).
    GENERAL MEETING
    The General Meeting is the Company‘s supreme body. Its competence includes mainly the following:
    Amendments to the Articles; Decisions on an increase/decrease in the Company‘s registered capital; instructing the Board of Directors to increase the share capital in accordance with Article 210 of the Commercial Code and decisions to issue preferred or convertible bonds; Decisions on termination of the Company and/or change in the legal form; Election and removal of members of the Supervisory Board, except for members of the Supervisory Board elected and removed in accordance with Article 200 of the Commercial Code by employees in accordance with applicable law; Approval of annual individual financial statements and extraordinary individual financial statements, decisions regarding the distribution of profit or settlement of loss, and decisions on remuneration ; Decisions regarding the termination of trading the Company‘s shares on the stock exchange and decision on the fact that the Company ceases to be a publicly traded company; Decisions on transformation of registered shares into share certificates and vice versa Decisions regarding the approval of a contract on transfer of business or a part thereof; Approval of the Supervisory Board Remuneration Rules and the contracts on office signed by members of the Supervisory Board; Deciding other issues falling under the competence of the General Meeting in accordance with the Articles and under existing law. The competence of the General Meeting is defined by Act 513/1991 Coll. of the Commercial Code, as amended, and the Company‘s Articles. The General Meeting is comprised of all shareholders, members of the Board of Directors, and members of the Supervisory Board present at the session and/or third parties invited by the Company‘s body (bodies)
    Corporate Governance
    or shareholders who convened the meeting. Each shareholder is authorized to attend the General Meeting, vote, ask for information and explanations regarding corporate matters and/or entities controlled by the Company, if relevant to the agenda of the General Meeting, and file proposals. Shareholders can exercise their rights at the General Meeting through authorized representatives who shall prove their authorization by a written power of attorney defining the scope of the authorization. Exercise of the shareholders’ voting rights is not limited in the Articles. The number of votes held by each shareholder is defined by the proportion between the nominal value of the shares held by the shareholder and the amount of registered capital, whilst every EUR 7 of the shares’ nominal value means one voting right.
    Decision-Making Procedure of the General Meeting
    The General Meeting decides by majority vote held by the present shareholders. In matters related to amendments of the Articles, an increase or decrease in the registered capital, instructing the Board of Directors to increase the registered capital, the issuance of preference bonds or exchangeable bonds, the termination of the Company or change in the legal format a 2/3 majority of votes of the present shareholders is required and a notarized record shall be prepared on the results of the voting. A 2/3 majority of votes of the present shareholders is also necessary for approval of the General Meeting’s decision on the termination of trading the Company‘s shares on the stock exchange and for the election and removal of members of the Supervisory Board, as well as for the General Meeting’s decision that the Company ceases to be a public joint-stock company and becomes a private joint-stock company. For amendments to the Articles in terms of establishing the option of correspondence voting and for amendments to the Articles in terms of establishing and defining the requirements for attending the General Meeting and for shareholders’ voting through electronic equipment, affirmative votes of 3/5 majority of all votes are required. Minutes of the General Meetings are freely available at the Company‘s website: www.tmr.sk .
    The Annual General Meeting for the period from 1 November 2016 - 31 October 2017 was held on 28 April 2017.
    Annual General Meeting Held on 28 April 2017
    At the Annual General Meeting held on 28 April 2017, the shareholders adopted the following key resolutions:
    1. Approval of the presence of third parties at the Annual General Meeting 2. Approval of the annual individual financial statements as of 31 October 2016
    3. Approval of the distribution of individual net profit achieved in the financial year beginning on 01/11/2015 and ending on 31/10/2016 in the amount of EUR 4,814,445.14. A part of the profit in the amount of EUR 481,444.51 was to be added to the reserve fund, and EUR 4,333,000.63 was to be transferred to the Retained earnings account. 4. Approval of the auditor - KPMG Slovensko spol. s.r.o. to audit the financial statements for the year ending 31 October 20175. Reelection of the member of the Supervisory Board - Roman Kudl?ek and approval of his role contract.
    Description of Shareholders’ Rights
    Legal regulations and Articles of Association hereof regulate the rights and the obligations of the shareholder. Both legal and natural persons may become a shareholder of the Company. The shareholder may not exercise the rights of the shareholder which would affect the rights and professional interests of other shareholders. The company must treat all shareholders on equal terms. The shareholder shall have the right to participate on the management of the Company, on its profits and on its liquidation balance upon the cancellation of the Company with liquidation. The right to participate on the management of the Company shall be exercised by the shareholder by participation at the General Meeting and by execution of the rights related to this participation, whereas the shareholders shall be bounded with the organizational measures applicable to the proceedings of General Meeting. At the General Meeting any shareholder may vote, ask for information and explanations concerning the matters of the Company or the matters of parties controlled thereby, which are related to the agenda of the General Meeting, make proposals, and request to have their suggested topics to be included in the agenda of the General Meeting in accordance with relevant regulations. The date relevant for the exercise of the rights according to previous sentence shall be the day indicated in the notice of General Meeting in accordance with section 180, subsection 2 of the Commercial Code. The shareholder or shareholders holding shares, of which the nominal value equals not less than 5% of the share capital, are entitled to request for convocation of an extraordinary General Meeting by including specification of their reason.
    The shareholder shall be entitled to share the profits generated by the Company (dividend), which were allocated by the General Meeting for their distribution. The shareholder shall not be under the obligation to refund to the Company the dividends obtained in good faith. Following the winding up of the Company with the liquidation the shareholders shall be entitled to share liquidation balance in the amount stipulated by the law. At the Company headquarters the shareholder is entitled to view Company documents that are filed in a document archive or in a financial statement register pursuant to a specific law, and the shareholder is entitled to request
    Corporate Governance
    Remuneration of TMR Leadership 2015/16 in €‘000
    Basic Remune - ration
    Extraor - dinary Bonuses Total
    Key Management 697 1 206 1 903
    Supervisory Board 42 0 42
    Audit Committee 0,4 0 0,4
    To t a l 739 1 206 1 945
    Remuneration of TMR Leadership 2016/17 in €‘000
    Basic Remune - ration
    Extraor - dinary Bonuses Total
    Key Management 678 1 068 1 74 6
    Supervisory Board 40 0 40
    Audit Committee 0 0 0
    To t a l 718 1 068 1 786


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    copies of these documents or request to have them mailed at a specified address on the shareholder’s expense and risk.
    Further details on the shareholders’ rights are described in the Company’s Articles of Association at www.tmr.sk/ investor-relations/corporate-governance .
    SUPERVISORY BOARD REPORT
    For the financial period from 1 November 2016 to 31 October 2017, the Company‘s Supervisory Board carried out the Company monitoring activities consisting of nine members, whilst the office term expired for three members elected by employees on 30/06/2017. In April 2017, the Annual General Meeting reelected the Supervisory Board Member, Roman Kudláček effective as of 28/04/2017. In the period from 1 November 2016 to 31 October 2017, the Supervisory Board held six sessions:
    On 23/11/2016 nine members of the Supervisory Board were present. On 18/01/2017 nine members of the Supervisory Board were present. On 24/03/2017 six members of the Supervisory Board were present. On 30/06/2017 seven members of the Supervisory Board were present. On 12/09/2017 five members of the Supervisory Board were present. On 10/10/2017 three members of the Supervisory Board were present, the Supervisory Board was not capable of quorum. During the financial year ending 31/10/2017 as part of its control function, the Supervisory Board focused at controlling the Board of Directors’ fulfillment of its duties assigned by the General Meeting, at monitoring the Board of Directors activity in terms of effective management of the Company, achievement of strategic goals in given conditions and determining the Company’s growth plans, the operating and financial activity, the Company’s assets, liabilities and receivables, correct bookkeeping, fulfillment of the business plan, financial budget, investment plan and compliance with the Company’s Articles of Association, Code of Conduct and general legally binding regulations. The Supervisory Board approved the financial plans submitted by the Board of Directors, major investments and other material financial and business transactions for the relevant financial year, and submitted the results of its monitoring activities to the General Meeting. As part of their role, the Supervisory Board members have electronic access to production systems, through which they can get a daily report on the Company’s financial performance. The Supervisory Board meetings were always attended also by
    the chairman of the Board of Directors (and CEO) and by CFO who is also a member of the Board of Directors. They informed the Supervisory Board members in detail on the Company performance including finance (CAPEX, Cash Flow, debt service).
    THE COMPANY‘S CORPORATE
    GOVERNANCE CODE
    The Company is fully aware of the importance of compliance with the Corporate Governance principles. On 3 November 2010, the Company and its statutory bodies adopted the Corporate Governance Code in Slovakia. Moreover, on 8 October 2012 the Company declared adherence to the Corporate Governance Code principles for companies listed on the Warsaw Stock Exchange. Information on adherence to the codes is available on the Company‘s website www. tmr.sk/investor-relations/corporate-governance .
    As for the Corporate Governance Code for companies in Slovakia 2016 , the Company‘s Corporate Governance fails to comply with this Code in the following items:
    I.A .5. The right to elect and to remove members of the Company‘s bodies:
    Partly met. The General Meeting elects and removes members of the Supervisory Board and the Audit Committee. The Board of Directors is elected and removed by the Supervisory Board.
    I.C.2.III. An electronic voting system in absentia, including the electronic distribution of proxy materials and reliable vote confirmation
    Not met. So far the Company has not enabled attending General Meetings and voting at General Meetings by electronic means. In order to implement the attendance at General Meetings and voting at General Meeting by electronic means, the Articles of Association need to be changed and approved by the 3/5 majority of all the shareholder votes.
    I.C.4.I. Effective shareholder participation in decisions on the nomination, election and remuneration of board members should be facilitated. Shareholders should be able to participate in the nomination of board members.
    Partly met. In the scope defined by the valid legal regulations, as part of the discussion regarding the discussed item of the General Meeting’s agenda, shareholders have the right to express their opinion either
    Corporate Governance
    in writing or verbally. This right is unlimited. Nomination and election of members of the Board of Directors is the responsibility of the Supervisory Board. The General meeting elects and dismisses member of the Supervisory Board and the Audit Committee.
    I.C.4.III. Effective shareholder participation in decisions on the nomination, election and remuneration of board members should be facilitated. Shareholders should be able to make their views known on the remuneration of board members.
    Partly met. The Company acts in accordance with the Commercial Code and the Articles. The General Meeting approves the Remuneration Rules for members of the Supervisory Board. The Remuneration Rules for members of the Board of Directors and the Audit Committee are approved by the Supervisory Board.
    I .C. 4 . I V. Effective shareholder participation in decisions on the nomination, election and remuneration of board members should be facilitated. The equity component of compensation schemes for board members and employees should be subject to shareholder approval.
    Partly met. Currently, the Company does not offer any stock-option compensation schemes. The Company acts in accordance with the Commercial Code and the Articles. The General Meeting approves the Remuneration Rules for members of the Supervisory Board. The Remuneration Rules for members of the Board of Directors and the Audit Committee are approved by the Supervisory Board.
    I .C. 4 .V. Effective shareholder participation in decisions on the nomination, election and remuneration of board members should be facilitated. The remuneration of board members and key executives should be disclosed, the total value of compensation arrangements made and how remuneration and company performance are linked.
    Partly met. Information on the remuneration of the board members and the management is disclosed in the Annual Report. The Company discloses the general remuneration policy for the members of the Supervisory Board and the Board of Directors, and only the sum of the remuneration of the Supervisory Board, the Board of Directors, and the Top Management.
    I.C.4.vi. Effective shareholder participation in decisions on the nomination, election and remuneration of board members should be facilitated. Any significant change in the remuneration schemes should be approved by shareholders.
    Partly met. The General Meeting approves the Remuneration
    Rules for the Supervisory Board and the role contracts of the Supervisory Board members. The Company acts in accordance with the Commercial Code and the Articles. When approving internal regulations the Company acts in accordance with the competencies of the relevant statutory bodies, with the Articles of Association and relevant law.
    I.C.5.iii. Non-discriminatory voting of shareholders in absentia should be enabled: Where proxies are held by the board or management for company pension funds, the directions for voting should be disclosed.
    Not met. The Company does not disclose directions for voting.
    I.C.6. Ability to vote electronically by non-discriminatory means (if the company enables such voting).
    Not met. So far the Company does not enable electronic voting at General Meetings. In order to implement the attendance at General Meetings and voting at General Meeting by electronic means, the Articles of Association need to be changed and approved by the 3/5 majority of all the shareholder votes.
    I.E.1.III. Non-discriminatory relations with shareholders and transparency of capital structures. Changes in economic and voting rights should be subject to approval by a qualified majority of the relevant group of shareholders.
    Partly met. These changes are subject to changes in the Articles of Association, which require the 2/3 majority of the present shareholder votes; the notary meeting minutes need to be prepared. A change in the Articles of Association related to the implementation of possible proxy voting and/or electronic voting is subject to approval by the 3/5 majority of all the shareholder votes.
    I.E.2. The capital structure and takeover arrangements should be disclosed.
    Partly met. The Company discloses such information provided that relevant legal regulations require and/or enable such disclosure.
    I V. A . 4 . I I . Information on the company’s remuneration: information on the remuneration policy in the upcoming financial year or, where appropriate, consecutive years and information on the implementation of the policy in the previous financial year.
    Partly met. The Company discloses the general remuneration policy for the members of the Supervisory Board and the Board of Directors, and only the sum of the remuneration of the Supervisory Board, the Board of Directors, and the Top Management.
    Corporate Governance


    82 83
    I V. A . 5 . I I . Information about board members, executive managers, especially: Information on the qualification requirements and the selection process.
    Partly met. The Company discloses the process of electing members of the Supervisory Board and the Audit Committee.
    V. D. 4 . Remuneration with the longer-term interests of the company and its shareholders.
    Partly met. The level of basic remuneration is set for each member of the Board of Directors separately based on the decision of the Supervisory Board upon each member’s nomination. Extraordinary bonuses of the Board of Directors are subject to the fulfillment of the EBITDA plan in the previous financial year. Remuneration of the Top management is set by and subject to approval by the Board of Directors depending on the performance of the operating segments and resorts of the Company.
    V. E .1. Boards should consider assigning a sufficient number of non-executive board members where there is a potential for conflicts of interest. The board should consider establishing specific committees to consider questions where there is a potential for conflicts of interest. These committees should require a minimum number of non-executive members, or be composed entirely of members of the supervisory board.
    Partly met. The Supervisory Board is composed of only non-executive members and is responsible for controlling. In case of a conflict of interest, the Company acts in accordance with its Code of Conduct and relevant persons are excluded from the decision-making process. The Company does not have such specific committees established.
    V.E.2.I. Existence, composition and the role of committees. The nomination committee.
    Not met. Currently, the Company does not have a nomination committee. Members of the Board of Directors are nominated by the Supervisory Board.
    V.E.2.II. Existence, composition and the role of committees. The remuneration committee.
    Not met. Currently, the Company does not have a remuneration committee. The variable part of the Board of Directors’ remuneration is determined by the Remuneration Rules and is subject to performance achieved by the Company. The Board of Directors’ Remuneration Rules are subject to approval by the Supervisory Board.
    V. E . 4 . Regular self-assessment of the company boards, including assessment of correct backgrounds and competences.
    Not met. Assessment of the activity of the Board of Directors is done by the Supervisory Board. The Supervisory Board’s report has not included self-assessment so far.
    As to the Best Practices for GPW Listed Companies 2016 required by the Warsaw Stock Exchange, the Company‘s corporate governance does not accord with the Best Practices in the following issues:
    I . Z .1. 3 . A company should operate a corporate website and publish on it, in a legible form and in a separate section: a chart showing the division of duties and responsibilities among members of the management board drawn up according to principle II.Z.1;
    Partially met. Currently, the Company website does not present such chart. However, the website lists members of the Board of Directors with description of their roles, and their short CV.
    I . Z .1.15 . A company should operate a corporate website and publish on it, in a legible form and in a separate section: information about the company’s diversity policy applicable to the company’s governing bodies and key managers; the description should cover the following elements of the diversity policy: gender, education, age, professional experience, and specify the goals of the diversity policy and its implementation in the reporting period; where the company has not drafted and implemented a diversity policy, it should publish the explanation of its decision on its website;
    Not met. Even though the Company strives to enable equal employment opportunity and employs 52% men and 48% women, it has not yet prepared and implemented a diversity policy for its statutory bodies and top management, thus such policy is not published on the Company website either. Main criteria for selecting candidates for key positions and statutory bodies are competency and fulfillment of requirements for a given role; not factors such as sex or age.
    I . Z .1. 2 0 . A company should operate a corporate website and publish on it, in a legible form and in a separate section: an audio or video recording of a General Meeting;
    Not met. Currently, the Company does not publish audio or video recordings from its General Meetings as the benefit of these recordings is not justified in comparing to high costs associated with them and they do not fit within the budget for the General Meeting.
    Corporate Governance
    I I . Z .1. The internal division of responsibilities for individual areas of the company’s activity among management board members should be clear and transparent, and a chart describing that division should be available on the company’s website.
    Partly met. The Company presents its internal division of responsibilities among members of the Board of Directors on its website in wording. II.Z.3. At least two members of the supervisory board should meet the criteria of being independent referred to in principle II.Z.4.
    Not met. None of the Supervisory Board members meets the criteria of independence referred to in principle II.Z.4. Even though the Company considers two members of the Supervisory Board, elected by the Company employees, as independent, since they hold non-managerial roles in the Company, according to the current Best Practices for GPW Listed Companies 2016, they cannot be considered independent.
    I I . Z .10 .1. In addition to its responsibilities laid down in the legislation, the supervisory board should prepare and present to the ordinary general meeting once per year an assessment of the company’s standing including an assessment of the internal control, risk management and compliance systems and the internal audit function; such assessment should cover all significant controls, in particular financial reporting and operational controls;
    Partly met. The Supervisory Board presents to the Annual General Meeting a report prepared according to the legislation and the Company’s Articles of Association.
    I I . Z .10 . 2 . a report on the activity of the supervisory board containing at least the following information:
    - full names of the members of the supervisory board and its committees; - supervisory board members’ fulfilment of the independence criteria; - number of meetings of the supervisory board and its committees in the reporting period; - self-assessment of the supervisory board;
    Partly met. The Supervisory Board’s report has not so far included a description on supervisory board members’ fulfilment of the independence criteria, since the Company automatically considers members, elected by the Company employees and who are not shareholders, as independent.
    I V. Z . 2 . If justified by the structure of shareholders, companies should ensure publicly available real-time broadcasts of general meetings.
    Not met. The Company has not so far broadcasted its General Meetings publicly, since potential benefit of the General Meeting being broadcasted does not outweigh costs associated with its organizing. The Company does not exclude the possibility of broadcasting its General Meetings in the future, although such decision is subject to the approval of shareholders at the General Meeting by amendment of the Articles of Association.
    I V. Z . 3 : Presence of representatives of the media should be allowed at general meetings.
    Presence of third parties is usually allowed based on the proposal by the Board of Directors at Annual General Meetings. At the Annual General Meetings in 2017 a proposal was presented by the Board of Directors to allow presence of third parties at the General Meeting. This proposal was adopted by the shareholders and third parties were allowed to attend the General Meeting. The Company does not exclude a possibility that it will allow attendance of third parties at all General Meetings, although such decision would have to be preceded by the approval of the shareholders at the General Meeting in the form of change in Articles of Association.
    VI.Z.4. In this activity report, the company should report on the remuneration policy including at least the following:
    1) general information about the company’s remuneration system; 2) information about the conditions and amounts of remuneration of each management board member broken down by fixed and variable remuneration components, including the key parameters of setting the variable remuneration components and the terms of payment of severance allowances and other amounts due on termination of employment, contract or other similar legal relationship, separately for the company and each member of its group; 3) information about non-financial remuneration components due to each management board member and key manager; 4) significant amendments of the remuneration policy in the last financial year or information about their absence; 5) assessment of th e implementation of the remuneration policy in terms of achievement of its goals, in particular long-term shareholder value creation and the company’s stability.
    Partly met. The Company publishes its general remuneration rules for the Board of Directors and
    Corporate Governance


    84 85
    Supervisory Board and the total sum of remuneration of the Board of Directors, Top Management and Supervisory Board. The Company has not entered into any agreements with any members of bodies or employees under which the company would be obliged to provide such members or employees with any compensation if their office or employment terminates by resignation, notice served by the employee, removal, notice served by the employer without giving a reason or if their office or employment terminates as a result of an acquisition offer. The Company does not disclose information about non-financial remuneration, as it has not been material so far, nor assessment of the implementation of the remuneration policy in terms of achievement of its goals, in particular long-term shareholder value creation and the company’s stability.
    OTHER SUPPLEMENTARY DATA
    Tatry mountain resorts, a.s. is the issuer of 6,707,198 shares admitted to trading on the listed parallel market of the Bratislava Stock Exchange, on the main market of the Prague Stock Exchange, and on the main market of the Warsaw Stock Exchange (WSE) with the following structure:
    ISIN: SK11220010287Security type and form: ordinary bearer sharesNominal share value: 7.00 EURNumber of shares outstanding: 6,707,198% share in share capital: 100%Limitation on transferability of shares: none
    The Company, a.s. as of 31/10/2014 issued two tranches of bonds in the total of EUR 180 mil.:
    Bonds TMR I 4.50%/ 2018ISIN: SK4120009606Volume: 70 000 000 EURMarket: The Bratislava Stock ExchangeNominal Value: 1 000 EURCoupon Rate: fixed rate 4.50% p.a.Coupon Payment: semi-annual always on 17-06 and 17-12Maturity Date: 17 December 2018Issue Date: 17-12-2013
    Bonds TMR I 4.50%/ 2018 are senior, secured by a pledge over certain immovable assets owned by the Company. For more information see the Security Prospectus available at http://tmr.sk/investor-relations/bonds/ .
    Bonds TMR II 6.0%/ 2021ISIN: SK4120009614Volume: 110 000 000 EUR
    Market: The Bratislava Stock ExchangeNominal Value: 1 000 EURCoupon Rate: fixed rate 6.00% p.a.Coupon Payment: annual always on 05-02Maturity Date: 5 February 2021Issue Date: 05-02-2014
    Bonds TMR II 6.0%/ 2021 are junior, subordinated. For more information see the Security Prospectus available at http://tmr. sk/investor-relations/bonds/ .
    As of 31/10/2017 the Company has not issued any employee stock or preferred shares.
    The Company, based on the decision of the General Meeting, may issue bonds, convertible into Company shares (convertible bonds), or bonds with the senior subscription rights to Company shares (preferred bonds), provided that the General Meeting at the same time decides on the conditional raising of share capital.
    In case of the buy-back of own Company shares with the purpose of their transfer to Company employees, the Article 161a Par. 2 point a) of the Commercial Code shall not be applied. In this case the purchased shares shall be transferred to the Company employees within 12 (twelve) months from their acquisition by the Company.
    In case of the buy-back of own Company shares with the purpose of preventing an eminent major damage to the Company, the Article 161a Par. 2 point a) of the Commercial Code shall not be applied. The Board of Directors is obliged to inform the next General Meeting about the circumstances according to the Article 161a Par. 4 of the Commercial Code.
    The voting rights attached to Company shares have no limitations. The holders of securities issued by the Company do not have differing controlling rights.
    As of 31/10/2017 the Company has no knowledge of any shareholder agreements that might lead to limitations on transferability of the securities and to limitations on voting rights.
    The Company incurred no research and development costs in FY 2016/17.
    TMR does not have any branch office abroad and does not use any financial derivatives to hedge its financial risks. The cash flows and liquidity ratios are monitored in regular intervals. The Company ensures internal controls through regular monitoring of the financial plan and overall financial position. Management of market risks, business and financial activities is described in the Risk Factors and Risk Management section and in the Consolidated Financial Statements, par. 34.
    Corporate Governance
    The Company has not entered into any agreements which would become effective, changed or terminated as a result of change in control, or as a result of an acquisition offer.
    The Company has not entered into any agreements with any members of bodies or employees under which the company would be obliged to provide such members or employees with any compensation if their office or employment terminates by resignation, notice served by the employee, removal, notice served by the employer without giving a reason or if their office or employment terminates as a result of an acquisition offer.
    During FY 2016/17 the Company prepared Separate Financial Statements in accordance with International Financial Reporting Standards (IFRS).
    The Company is not subject to any special regulations, which would require disclosure of additional information in terms of Article 34 Par. 2 a) of the Slovak Act No. 429/2002 Coll. in connection with Article 20 Par. 1 g) of the Slovak Act No. 431/2002 Coll.
    CONTRACTS WITH EXTERNAL
    ADVISORS AND RELATED PARTIES
    Lease of the Špindlerův Mlýn Resort
    Melida, a.s., a company associated with TMR, signed a lease contract on 6 November 2012 as the lessee with the company SKIAREÁL Špindlerův mlýn, a.s., as the lessor. The subject of the contract was the lease of the Špindlerův Mlýn resort in the Czech Republic. As of the date of this report TMR held a 19% interest in CAREPAR, a.s., which owns 50% in Melida, a.s. Based on the lease contract, Melida, a.s. will be operating the ski resort Špindlerův Mlýn in the Krkonoše Mountains for 20 years for the lease fee in the amount of CZK 43.8 mil. per year. Besides the sole operation of Špindlerův Mlýn, Melida committed to provide further development of the resort by expanding trails, renewing technological equipment, and by improving skiers’ experience in any other way with investments in the minimum amount of CZK 800 mil. during the whole lease term. TMR acts in the lease contract as a by-party that provides a guarantee for Melida, a.s. by guaranteeing Melida’s liabilities resulting from the lease contract and by providing it a zero-interest loan.
    Contracts with Melida, a.s.
    TMR provides Melida, a.s. with consulting services in management and analysis of cableways, dining facilities, ski schools, rentals, shops, in marketing, bookkeeping, and project financing. Also TMR provides Melida, a.s. with
    consulting services on the project of building infrastructure in the Špindlerův Mlýn ski resort. TMR made an agreement with Melida to temporarily lend it employees of TMR in order to boost the winter season and to realize some investments. TMR provided Melida with an interest-bearing loan in 2013 and an interest non-bearing loan in 2014.
    Financial Audit
    As of the date of this Annual Report, KPMG Slovensko spol. s.r.o., seated at Dvořákovo nábrežie 10, 811 02 Bratislava, is responsible for the audit of separate and consolidated financial statements. KPMG Slovensko spol. s.r.o. has been approved to perform the audit of the Company’s Separate Financial Statements as of 31 October 2017 and Consolidated Financial Statements as of 31 October 2017 based on the decision of the General Meeting held on 28 April 2017.
    Advisors
    As of the date of this Annual Report, the Company had a contract signed with J&T IB and Capital Markets, a.s. organizačná zložka, seated at Dvořákovo nábrežie 10, 811 02 Bratislava, on the provision of advisory services with respect to relations with investors.
    As of the date of this Annual Report, the Company had a contract signed with Ernst & Young seated at Hodžovo námestie 1/A, Bratislava 811 06, on the provision of advisory services in preparation of financial statements.
    PROPOSAL ON DISTRIBUTION OF
    PROFIT
    For the year ending 31 October 2017, the Company achieved net profit of EUR 9.223 mil. according to Separate Financial Statements. The Board of Directors proposes the following distribution of profit:
    1. EUR 922 ths. will be allocated to the reserve fund;2. The remainder in the amount of EUR 8.301 mil. will be transferred to the retained earnings account.
    Corporate Governance


    SH A R ES


    88 89
    Shareholder Club
    TMR and individual shareholders have come together in partnership based on trust in order to move successfully forward, create loyalty with special offers in the region’s most popular resorts, and to increase the number of registered shareholders. For this reason Shareholder Club was established at the beginning of 2010. Shareholders
    who own at least 25 shares have the right to benefits that help them to get to know the Group and its activities better through special deals as part of the GOPASS program. You can find more information on http://tmr.sk/ shareholder-club/.
    Shares
    Shareholder Club Benefits
    No. of Shares Benefits - No. of GOPASS points
    25 6 entries
    40 12 e n t r i e s
    80 25 entries
    13 0 1 season ticket
    250 2 season tickets
    500 VIP More info at www.tmr.sk/shareholder-club/
    750 VIP GOLD More info at www.tmr.sk/shareholder-club/
    Closing Price BSSE (EUR) WSE (PLN) PSE (CZK)
    3 1.10 . 2 0 17 2 7, 3 0 117, 0 0 720,00
    3 1.10 . 2 0 16 24,60 15 2 ,10 7 17, 0 0
    * BSSE - the Bratislava Stock Exchange WSE - the Warsaw Stock Exchange PSE - the Prague Stock Exchange SAX - Slovak Stock Index
    TMR Stock Performance on the BSSE
    TM R SAX
    -8%
    -
    6%
    -
    4%
    -
    2% 0% 2% 4% 6% 8%
    10
    %
    12
    %
    14
    %
    2.11. 16 2.12.16 2.1.17 2.2.17 2.3.17 2.4.17 2.5.17 2.6.17 2.7.17 2.8.17 2.9.17 2.10. 17
    Shares
    Company / Name No. of Shares Interest in Share Capital Voting Rights % in EUR thousands %
    Shareholders < 5% 1 578 760 11 0 51 23,5% 23,5%
    C.I. CAPITAL INDUSTRIES LIMITED 1 309 139 9 16 4 19, 5% 19, 5%
    FOREST HILL COMPANY, s.r.o. 1 030 919 7 216 15,4% 15,4%
    NIKROC INVESTMENTS LIMITED 897 771 6 284 13 ,4% 13 ,4%
    KEY DEE LIMITED 664 058 4 648 9,9% 9,9%
    TINSEL ENTERPISES LIMITED 638 385 4 469 9,5% 9,5%
    RMSM1 LIMITED 5 8 8 16 6 4 117 8,8% 8,8%
    Total 6 707 198 46 950 10 0,0% 10 0,0%
    To the best of the Company’s knowledge the following entities held the following direct or indirect interest in the share capital and the Company voting rights as of 31/10/2017:
    Shareholder Structure as of 31.10.2017
    Shareholders < 5%
    C.I. CAPITAL INDUSTRIES LIMITED
    FOREST HILL COMPANY, s.r.o.
    NIKROC INVESTMENTS LIMITED
    KEY DEE LIMITED
    TINSEL ENTERPISES LIMITED
    RMSM1 LIMITED
    23,5%
    19,5%
    15,4%
    13,
    4%
    9,
    9% 9,
    5% 8,
    8%


    CONSOLIDATED FINA NCI A L STATEM ENTS


    92 93
    Consolidated
    Financial Statements
    Consolidated Financial Statements
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Consolidated statement of profit and loss and other comprehensive income
    in TEUR Note 1.11.2016 - 31.10.2017 1.11.2015 -
    31.10.2016
    Sales 6 95,683 80,577
    Other operating revenue
    7 227 625
    Total revenue 95,910 81,202
    Material and goods consumption 8 -16,393 -13,062
    Purchased Services
    9 -23,567 -21,165
    Personal cost
    10 -24,506 -21,629
    Other operating cost
    11 -990 -877
    Gain on sale of assets
    1,081 732
    Increase in fair value of investment property
    17 - -
    Creation and reversal of value adjustments to receivables
    21 -19 -90
    Profit before interest, taxes, depreciation and amortization
    (EBITDA)*
    31,516 25,111
    Depreciation and amortization
    15.16 -13,828 -13,036
    Goodwill impairment loss
    16 - -
    Profit before interest, taxes (EBIT)
    17,688 12,075
    Interest income
    12 2,058 1,336
    Interest expense
    12 -12,094 -10,958
    Net profit on financial instruments
    13 169 1,605
    Negative goodwill
    3 - -
    Profit before tax 7,821 4,058
    Income tax 14
    -831 -1,312
    Profit
    6,990 2,746
    Attributable to:
    - Holders of interest in the parent company's equity
    7,370 3,061
    - Non-controlling interest
    -380 -315
    Other components of the comprehensive income
    - Items that may be subsequently reclassified to profit/(loss):
    Revaluation of available-for-sal e securities to fair value
    14 34 -
    Foreign currency translation reserve
    122 -75
    Total comprehensive income
    7,146 2,671
    1
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Consolidated Financial Statements
    for the Period from 1 November 2016 to 31 October 2017
    prepared in accordance with the
    International Financial Reporting
    Standards ("IFRS") as adopted by the European Union


    94 95
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Consolidated statement of financial position
    in TEUR Note 31.10.2017 31.10.2016
    Assets
    Goodwill and Intangible Assets
    16 14,110 14,657
    Property, Plant and Equipment
    15 327,164 276,579
    Investments Property
    17 6,554 6,554
    Loans Provided
    20 2,643 2,746
    Other receivables
    22 2,657 7,829
    Fixed assets total
    353,128 308,365
    Inventory 19 5,852 5,591
    Trade receivables
    21 5,397 2,534
    Loans Provided
    20 21,307 26,125
    Other receivables
    22 36,127 21,087
    Financial investments
    24 2,194 2,259
    Cash and Cash Equivalents
    25 9,584 7,493
    Other Assets
    23 4,383 2,247
    Total current assets
    84,844 67,336
    Assets total 437,972 375,701
    Equity 26
    Capital
    46,950 46,950
    Share premium
    30,430 30,430
    Profit for the year
    7,370 3,061
    Retained earnings and other funds
    27,224 24,129
    Foreign currency translation reserve
    -413 -575
    Total equity attributable to holders of interest in the parent company's
    equity
    111,561 103,995
    Non-controlling interest
    1,588 2,008
    Total equity
    113,149 106,003
    Liabilities
    Loans and Borrowings
    27 84,598 38,107
    Provisions
    30 24 157
    Other non-current liabilities
    29 479 -
    Bonds Issued
    31 178,820 178,680
    Deferred tax liability
    18 22,356 22,254
    Total non-current liabilities
    286,277 239,198
    Loans and Borrowings
    27 9,880 6,996
    Trade payables
    28 10,286 7,544
    Provisions
    30 351 482
    Bonds Issued
    31 6,022 6,022
    Other current liabilities
    29 12,007 9,456
    Total current liabilities
    38,546 30,500
    Total liabilities 324,823 269,698
    Total equity and liabilities 437,972 375,701
    The Notes constitute an integral part of the Consolidated Financial Statements.
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Consolidated statement of profit and loss and other comprehensive income (continued)
    Total comprehensive income
    7,146 2,671
    Attributable to:
    - Holders of interest in the parent company's equity 7,566 2,979
    - Non-controlling interest
    -420 -308
    Earnings per share (in EUR) 26 1.099 0.456
    Number of shares 6,707,198 6,707,198
    *EBITDA represents a profit from recurring activities of the Group before taxes, interest, amortisation and depreciation, adjusted
    for other income and expenses, which are listed under EBITDA.
    The Notes constitute an integral part of the Consolidated Financial Statements.
    An overview of the statement of profit and loss by particular segments is in Note. 4 – Information on Operating Segments.
    Consolidated Financial Statements Consolidated Financial Statements


    96 97
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Consolidated statement of changes in equity
    in TEUR
    Capital
    Share
    premium
    Legalreserve fund
    Funds from revaluation
    Revaluation
    reserve
    Retainedearnings
    Equity
    attributableto holders of interest in the
    parent
    company’s
    equity
    Non-
    controlling
    interest
    Total
    Balance as at 1 November 2016 46,950 30,430
    4,449146 -575 22,595 103,995 2,008 106,003
    Transfer of retained earnings into the legal reserve fund - -
    481
    - - -481 - - -
    Profit for the period
    - -
    -
    - - 7,370 7,370 -380 6,990
    Other components of comprehensive income, after tax
    - items with possible subsequent reclassification into
    profit/(loss):
    Revaluation of available-for-sale securities at fair value - -
    -
    34 - - 34 - 34
    Foreign currency translation reserve
    - -
    -
    - 162 - 162 -40 122
    Total comprehensive income for the period
    - -
    481
    34 162 6,889 7,566 -420 7,146
    Transactions with owners posted directly into equity
    Contributions to the fund - -
    -
    - - -
    - - -
    Effect of acquisition of a subsidiary
    - -
    -
    - - - - - -
    Total transactions during the year
    - -
    -
    - - - - - -
    Balance as at 31 October 2017 46,950 30,430 4,930 180 -413 29,484 111,561 1,588 113,149
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Consolidated statement of changes in equity (continued)
    in TEUR
    Capital
    Share
    premium
    Legalreserve fund
    Funds from revaluation
    Revaluation
    reserve
    Retainedearnings
    Equity
    attributable to
    holders of
    interest in the
    parent
    company’s
    equity
    Non-
    controlling
    interest
    Total
    Balance as at 1 November 2015 46,950 30,430
    4,448146 -493 19,535 101,016 2,315 103,331
    Transfer of retained earnings into the legal reserve fund
    -
    -
    1
    -
    -
    -1
    -
    -
    -
    Profit for the period
    -
    -
    -
    - - 3,061 3,061 -315 2,746
    Other components of comprehensive income, after tax
    - items with possible subsequent reclassification into
    profit/(loss):
    Revaluation of available-for-sale securities at fair value - -
    -
    - - - --
    -
    Foreign currency translation reserve
    - -
    -
    - -82 - -82 7 -75
    Total comprehensive income for the period
    - - 1
    - -82 3,060 2,979 -308 2,672
    Transactions with owners posted directly into equity
    Contributions to the fund
    - -
    -
    - - - - - -
    Effect of acquisition of a subsidiary
    - -
    -
    - - - - - -
    Total transactions during the year
    - -
    -
    - - - - - -
    Balance as at 31 October 2016 46,950 30,430 4,449 146 -575 22,595 103,995 2,008 106,003
    The Notes constitute an integral part of the Consolidated Financial Statements.
    Consolidated Financial Statements Consolidated Financial Statements


    98 99
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    Notes to the Consolidated Financial Statements
    1. Information about the Company
    2. Significant accounting policies
    3. Information about operating segments
    5. Increase and decrease of interests in companies
    6. Revenues
    7. Other operating revenues
    8. Consumption of material and goods
    9. Services purchased
    10. Personnel expenses
    11. Other operating expenses
    12. Interest income and expenses
    13. Net profit from financial instruments
    14. Income tax and deferred tax
    15. Property, plant and equipment
    16. Goodwill and intangible assets
    17. Investments in real estate
    18. Deferred tax asset, deferred tax liability
    19. Inventories
    20. Loans provided
    21. Trade receivables
    22. Other receivables
    23. Other assets
    24. Financial investments
    25. Cash and cash equivalents
    26. Equity
    27. Loans and borrowings
    28. Trade payables
    29. Other liabilities
    30. Provisions
    31. Bonds issued
    32. Fair value information
    33. Operating lease
    34. Information about risk management
    35. Related parties
    36. Subsequent events
    37. Capital commitments and capital management
    38. Contingent assets and contingent liabilities
    39. Companies within the Group
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    Consolidated cash flow statement
    in TEUR Note 1.11.2016 - 31.10.2017 1.11.2015 -
    31.10.2016
    OPERATING ACTIVITIES
    Profit/ (Loss)
    6,990 2,746
    Adjustments related to:
    Gain on disposal of property, plant and equipment and intangible assets
    -1,081 -732
    Depreciation and amortisation
    15.16 13,828 13,036
    Reversal of value adjustments to receivables
    19 90
    Net (gain)/loss on financial instruments (non-cash)
    13 -169 -2,026
    Net interest (income)/expenses
    12 10,036 9,622
    Change in provisions
    -264 462
    Income tax
    14 831 1,284
    Change in trade receivables, other receivables and other assets
    -15,388 1,377
    Change in inventories
    -261 -243
    Change in trade payables and other liabilities
    5,860 2,996
    Cash flow from operating activities before income tax
    20,401 28,612
    Income tax paid -21 -12
    Cash flow from operating activities
    20,380 28,600
    INVESTMENT ACTIVITIES
    Acquisition of property, plant and equipment and intangible assets
    15,16 -64,022 -31,226
    Proceeds from disposal of property, plant and equipment and intangible
    assets
    2,580 2,774
    Cost of business combinations, net of cash acquired
    5 - -
    Loans provided
    -11,819 -4,293
    Repayment of loans provided
    -17,464 6,806
    Cost of acquisition of financial investments
    - -1
    Proceeds from disposal of financial investments
    103 153
    Interest received
    20, 22 529 35
    Cash flow used by investingt activities
    -55,165 -25,752
    FINANCIAL ACTIVITIES
    Repayment of liabilities from financial lease
    -1,018 -1,048
    Financial lease received
    1,498 1,176
    Repayment of received loans and borrowings
    -7,638 -21,785
    New loans and borrowings received
    55,476 29,030
    Repayment of liability from reduction of share capital
    - -
    Interest paid
    -11,442 -10,947
    Dividends paid
    - -
    Cash flow from / (used by) financing activities
    36,876 -3,574
    Net increase / (decrease) of cash and cash equivalents 2,091 -726
    Cash and cash equivalents at the beginning of the year
    25 7,493 8,219
    Cash and cash equivalents at end of the year
    25 9,584 7,493
    The Notes constitute an integral part of the Consolidated Financial Statements.
    Consolidated Financial Statements Consolidated Financial Statements


    100 101
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    1. Information about the Company
    Tatry mountain resorts, a.s. (the "parent company" or the "Com
    pany") is a joint stock company with its registered office and
    place of business in Demänovská Dolina 72, 031 01 Liptovský Mikuláš. The Company was established on 20 March 1992 and
    incorporated on 1 April 1992. The Company’s identification number is 31 560 636 and its tax identification number is
    2020428036.
    The Company is not a fully liable partner in other accounting entities.
    The Company's shares have been registered on the Bratislava Stock Exchange since 19 November 1993, on the Warsaw Stock
    Exchange (WSE) since 15 October 2012 and on the Prague Stock Exchange (BCCP) since 22 October 2012. On 22 August 2013,
    an extraordinary General Meeting was held, which decided on a reduction in the share capital of the Company Tatry Mountain
    Resorts, a.s. from EUR 221,338 thousand to EUR 46,950 thousand, i.e. by EUR 174,388 thousand. Subsequently, in the course
    of 2014, the Company made two bond issues in the total nominal value of EUR 180,000 thousand, which have been admitted to
    trading on the Bratislava Stock Exchange since 19 February 2014. See Note 31 – Bonds issued.
    In 2009, the Company decided to change its accounting period from the calendar year to a financial year from 1 November to 31
    October. The change was to make the accounting period more real istic, as the Company’s operations were subject to seasonal
    variations.
    On 1 May 2013, the parent company Tatry mountain resorts, a.s. and subsidiaries GRANDHOTEL PRAHA a.s., Interhouse
    Tatry s.r.o. and Tatry mountain resorts services, a.s, merged. On that day, the company Tatry mountain resorts, a.s. became the
    successor company, and assumed all legal, trade and other liabiliti es, as well as the assets of its subsidiaries. All subsidiaries
    ceased to exist by the merger with the parent company, and then were expunged from the Commercial Register.
    The structure of the Company's shareholders as of 31 October 2017 and as of 31 October 2016 was as follows:
    31 October 2017 Share in share
    Voting
    capitalrights
    in TEUR
    %
    %
    C.I. CAPITAL INDUSTRIES LIMITED 9,164
    19.5%
    19.5%
    FOREST HILL COMPANY, s.r.o. 7,216
    15.4%
    15.4%
    NIKROC INVESTMENTS LIMITED 6,284
    13.4%
    13.4%
    KEY DEE LIMITED 4,648
    9.9%
    9.9%
    TINSEL ENTERPRISES LIMITED 4,469
    9.5%
    9.5%
    RMSM1 LIMITED 4,117
    8.8%
    8.8%
    Minority shareholders 11,052
    23.5%
    23.5%
    Total 46,950100% 100%
    31 October 2016 Podiel na základnom
    Hlasovacie
    imanípráva
    v tis. eur
    %
    %
    C.I.CAPITAL INDUSTRIES LIMITED 8,835
    18.8%
    18.8%
    BELGOMET s.r.o. 7,216
    15.4%
    15.4%
    NIKROC INVESTMENTS LIMITED 6,284
    13.4%
    13.4%
    KEY DEE LIMITED 4,648
    9.9%
    9.9%
    TINSEL ENTERPRISES LIMITED 4,448
    9.5%
    9.5%
    RMSM1 LIMITED 4,117
    8.8%
    8.8%
    Minority shareholders 11,402
    24.2%
    24.2%
    Total 46,950100% 100%
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    1.
    Information about the Company (continued)
    The consolidated financial statements of the Company for the period ending 31 October 2017 comprise the statements of the
    parent company and its subsidiaries (t ogether referred to as the “Group”).
    The principal activities of the Group include cable and ski lift operations, restaurant and dining services, the operation of s ki and
    snowboard schools, purchase and sale of goods, hotel management, and operation of an amusement park.
    The average number of Group employees during the period from 1 November 2016 to 31 October 2017 was 1,289, out of which
    25 were management (from 1 November 2015 to 31 October 2016, it was 1,095 employees, out of which 25 were management).
    During the year, the Group used the services of employment agen cies for short-term personnel leasing. From 1 November 2016
    to 31 October 2017, it was 284 employees (from 1 November 2015 to 31 October 2016: 184 employees).
    The Company’s bodies are:
    Board of Directors:
    Ing. Bohuš Hlavatý, Chairman (since 30 June 2009)
    Ing. Branislav Gábriš, Vice-Chairman (since 18 February 2011)
    Ing. Andrej Deve čka, Member (since 22 December 2011)
    Ing. Jozef Hodek, Member (since 30 June 2009)
    Supervisory Board:
    Ing. Igor Rattaj (since 29 June 2009)
    Ing. František Hodorovský (since 18 January 2011)
    Roman Kudlá ček (since 21 April 2012)
    Ing. Ján Štetka (since 30 June 2012)
    Ing. Peter Kube ňa (since 30 June 2012)
    Miroslav Roth (since 30 June 2012)
    Ing. Pavol Mikušiak (since 27 April 2013)
    Adam Tomis (since 12 April 2014)
    PhDr. Martin Kopecký, MSc, CFA (since 25 April 2015)
    Consolidated Financial Statements Consolidated Financial Statements


    102 103
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    1.
    Significant accounting policies
    (a) Statement of compliance
    The Consolidated financial statements for the period from 1 November 2016 to 31 October 2017 have been prepared in
    accordance with the International Financial Reporting Standards (“IFRS”) as adopted by the EU and in accordance with Act No.
    431/2002 Coll. of the National Council of the Slovak Republic on Accounting (“Act on Accounting”).
    The financial statements were approved by the Board of Directors on 26 February 2018.
    (b) Basis of preparation
    The Consolidated financial statements have been prepared based on the historical cost principle, while the investment property
    and financial instruments measured at fair value were revalued to their fair value through profit or loss. Available-for-sale
    securities were revalued to their fair value through other comprehensive income.
    The Group's Consolidated financial statements have been prepared on a going-concern basis.
    On 17 December 2018, the Company will pay out the bond in am ount of 71,575 ths. EUR including coupon. The amount of bond
    liability was 69,752 ths. EUR as at 31 October 2017. The management of the Company plans to issue a new bond, which will be
    used to refinance the original bond, to maintain financial stability.
    The Consolidated financial statements have been prepared in thousands EUR. The accounting standards have been consistently
    applied by the Group companies in accordance with the prior accounting period.
    The preparation of financial statements in compliance with the International Financial Reporting Standards as adopted by the EU
    requires the application of various judgements, assumptions and es timates which affect the reported amounts of assets, liabilities,
    income and expenses. However, actual results will likely differ from these estimates. Critical accounting estimates and
    judgements which were made by management and which bear a significant risk of material adjustment in the next accounting
    period are discussed in Note 3– Critical accounting estimates and assumptions.
    The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized
    in the period in which the estimate is revised if the revision affects only that period or in the period of revision and also i n future
    periods if the revision affects both current and future periods.
    When preparing the Consolidated financial statements, the Group applied the following International Financial
    Reporting Standards, amendments to the standards and interp retations as adopted by the EU, which are effective for the
    accounting period starting 1 November 2016:
    The application of the standards mentioned below has had no significant impact on the Group's financial statements.
    Amendment to IAS 1 Disclosure Initiative , effective for accounting periods beginning on or after 1 January 2016. The
    amendment to IAS 1 clarifies, not significantly changing, the existing requirements. The amendment explains:
    The requirements for significance in IAS 1.
     Certain items in the statement of profit and loss and other comprehensive income and in the statement of financial
    position may be divided.
     Entities may flexibly determine the order of reporting the notes to financial statements.
     The share in other comprehensive income of associates and joint ventures accounted for in accordance with the equity-
    based method must be reported on an aggregated basis as a single item and grouped between those items that will or
    will not be reclassified to profit and loss in subsequent periods.
    Further, the amendment explains the requirements for additional reporting of partial results in the statement of financial posi tion
    and in the statement of profit and loss and other comprehensive income. These amendments have no impact on the Group.
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    Amendments to IAS 16
    and IAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation effective for
    accounting periods beginning on or after 1 January 2016. The amendment clarifies the principles of IAS 16 Property, Plant and
    Equipment and IAS 38 Intangible Assets , according to which revenue reflects the economic benefits generated from the plant’s
    operation (including the assets) rather than economic benefits aris ing by using the assets. The result is that the revenue-based
    method cannot be applied to amortise property, plant and equipment, and it can only be applied under very extraordinary
    circumstances for the amortisation of intangible assets. The amendment applies prospectively, with no impact on the Group as
    the Group does not apply the revenue-based method to amortise non-current assets.
    Amendment to IAS 27 Equity method in the separate financial statements effective for accounting periods beginning on or
    after 1 January 2016 and are applied retrospectively. Earlier application is allowed. Amendment to IAS 27 allows the company
    to use the Equity method in separate financial statements when accounting for interest in subsidiaries, associates, and joint
    ventures. The Group does not plan to ise the Equity method when accounting for interest in subsidiaries, associates, and joint
    ventures.
    International Financial Reporting Standards that have been issued but are not effective yet
    As of 31 October 2017, the following significant International Fi nancial Reporting Standards, amendments to and interpretations
    of the standards, which have not become effective yet, and thus were not applied by the Group when preparing these financial
    statements, were issued and thereafter adopted by the EU (save for significant standards referred to hereafter, which have not yet
    been adopted by the EU).
    In January 2016, IASB issued an amendment to IAS 7 Statement of Cash Flows in order to improve disclosure of financing
    activities and help users better understand the liquidity of a re porting entity. The standard requires an entity to provide disclosures
    that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes
    arising from cash flows and non-cash changes (e.g. profit and loss from the movement of foreign currencies). The amendment is
    effective from 1 January 2017. The Group does not expect significant impact of this standard on cash flow statement
    Amendment to IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses clarifies that an entity needs to consider
    whether tax law restricts the sources of taxable profits agains t which it may make deductions on the reversal of that deductibl e
    temporary difference. Furthermore, the amendments provide guida nce on how an entity should determine future taxable profits
    and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying
    amount. Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the
    change in the opening equity of the earliest comparative period may be recognised in opening retained earnings (or in another
    component of equity, as appropriate), without allocating the ch ange between opening retained earnings and other components of
    equity. Entities applying this relief must disclose that fact. The amendment is effective from 1 January 2017, with an earlier
    application of the standard being permitted. If an entity applies the amendments for an earlier period, it must disclose that f act.
    No impact of the amendment on the Group is expected.
    In May 2014, IASB issued IFRS 15 Revenue from Contracts with Customers , effective for the periods starting on 1 January
    2018, with earlier adoption being permitted. IFRS 15 defines the pr inciples for reporting revenue, and it will be applicable to all
    contracts concluded with customers. The new Standard provides a framework that replaces existing revenue recognition guidance
    in IFRS. Entities will adopt a five-step model to determine when to recognise revenue, and at what amount. The new model
    specifies that revenue should be recognised when (or as) an entity transfers control of goods or services to a customer at the
    amount to which the entity expects to be entitled. Depending on whether certain criteria are met, revenue is recognised:
    over time, in a manner that depicts the entity’s performance; or
     at a point in time, when control of the goods or services is transferred to the customer.
    IFRS 15 also establishes the principles that an entity shall apply to provide qualitative and quantitative disclosures which pr ovide
    useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows
    arising from a contract with a customer.
    Consolidated Financial Statements Consolidated Financial Statements


    104 105
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    Management is still evaluating the possible impact of IFRS 15
    on the financial statements of the Group, however the Group does
    not expect that first time adoption of the standard will have significant impact on the financial statements. Management of the
    Group does not expect, that the moment when revenue is recognised and in what amount will changed based on the IFRS 15, due
    to the nature and types of revenue that the Group has.
    IFRS 16 Leases was issued in January 2016, replacing IAS 17 Lease, IF RIC 4 Determining whether an Arrangement contains
    a Lease, SIC-15 Operating Leases – Incenti ves, and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form
    of a Lease. The Standard eliminates the current dual accounting model for lessees and instead requires companies to bring most
    leases on-balance sheet under a single model, eliminating the distinction between operating and finance leases.
    Under IFRS 16, a contract is, or contains, a lease if it conveys the right to control the use of an identified asset for a period of
    time in exchange for consideration. For such contracts, the new model requires a lessee to recognise a right-of-use asset and a
    lease liability. The right-of-use asset is depreciated and the li ability accrues interest. This will result in a front-loaded pattern of
    expense for most leases, even when the lessee pays constant annual rentals.
    The new Standard introduces a number of limited scope exceptions for lessees which include:
    leases with a lease term of 12 months or less and containing no purchase options, and
     leases where the underlying asset has a low value (‘small-ticket’ leases).
    Lessor accounting, however, shall remain largely unchanged and the distinction between operating and finance leases will be
    retained.
    IFRS 16 is effective for the accounting periods beginning on or after 1 January 2019. Earlier application of the standard is
    permitted if the new IFRS 15 will also be efficient. Lessee has to apply IFRS 16 either by using the full retrospective approach
    or the modified retrospective approach. It is expected, that firs t time adoption of the standard will have significant impact on the
    financial statements, as it is required to recognise assets and liabilities from operating leases in statement of financial pos ition,
    where the Group act as a lessee. This applies mainly on operati ng lease of lands. The quantitative impact analysis of the new
    standard is not known yet.
    In July 2014, IASB issued a final version of IFRS 9 Financial Instruments, which replaces IAS 39, Financial Instruments:
    Recognition and Measurement, except that the IAS 39 exception for a fa ir value hedge of an interest rate exposure of a portfolio
    of financial assets or financial liabilities continues to apply, and entities have an accounting policy choice between applying the
    hedge accounting requirements of IFRS 9 or continuing to apply the existing hedge accounting requirements in IAS 39 for all
    hedge accounting until the standard resulting from the IASB’s project in macro hedge accounting is effective.
    Although the permissible measurement bases for financial assets – amortised cost, fair value through other comprehensive income
    (FVOCI) and fair value through profit or loss (FVTPL) – are simila r to IAS 39, the criteria for classification into the appropriate
    measurement category are significantly different .
    A financial asset is measured at amortized cost if the following two conditions are met: the assets is held within a business model whose objective is to hold assets in order to collect contractual cash flows;
    and
     its contractual terms give rise, on specified dates, to cash flow s that are solely payments of principal and interest on the
    principal outstanding.
    In addition, for a non-trading equity instrument, a company may elect to irrevocably present subsequent changes in fair value
    (including foreign exchange gains and losses) in OCI. These are not reclassified to profit or loss under any circumstances.
    For debt instruments measured at FVOCI, interest revenue, expected credit losses and foreign exchange gains and losses are
    recognised in profit or loss in the same manner as for amortise d cost assets. Other gains and losses are recognised in OCI and are
    reclassified to profit or loss on derecognition.
    The impairment model in IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with a forward-looking an ‘expected credit loss’
    (ECL) model, which means that a loss event will no longer need to occur before an impairment allowance is recognised. The
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    new impairment model will apply to financial assets measured at amortized cost or FVOCI, except for investments in equity
    instruments, and to contract assets.
    Under IFRS 9, loss allowances will be measured on either of the following bases:
    12-month ECLs: these are ECLs that result from possible defa ult events within the 12 months after the reporting date;
    and
     Lifetime ECLs: these are ECLs that result from all possi ble default events over the expected life of a financial
    instrument.
    IFRS 9 includes a new general hedge accounting model, which aligns hedge accounting more closely with risk management. The
    types of hedging relationships – fair value, cash flow and fo reign operation net investment – remain unchanged, but additional
    judgment will be required.
    The standard contains new requirements to achieve, continue and discontinue hedge accounting and allows additional exposures
    to be designated as hedged items. Extensive additional disclosu res regarding an entity’s risk management and hedging activities
    are required.
    The Group plans to apply the new standard starting from the effective date. The Group started analysing the impact of the new
    standard on the balance sheet and assets and increased amount of allowances to loans provided is expected, however the
    quantitative impact is not known yet. The management of the Group is not expecting any significant impact.
    The amendments to IAS 40 Transfers of Investment Property is effective for annual periods beginning on or after 1 January
    2018 and should be applied prospectively. Early application is permitted. The amendments clarify when an entity should transfer
    property, including property under construction or development into, or out of investment property. A mere change in
    management’s intentions for the use of a properly does not provide evidence of a change in use. The amendments state that
    a change in use occurs when the property meets, or ceases to meet, the definition of investmnet property and there is evidence of
    the change in use. The Group does not expect that first time adoption of the amendments will have significant impact on the
    financial statements, as the Group transfer property into, or out of investment property only in case of the change in use of the
    property.
    IFRS Annual Improvements
    The IASB has issued a set of amendments to standards. Annual improvements to IFRS 2014 – 2016 Cycle (issued on 8 December
    2016), effective for accounting period beginning on or after 1 January 2018, except changes in IFRS 12 that are effective for
    accounting period beginning on or after 1 January 2017. Further, Annual improvements to IFRS 2015 – 2017 Cycle (issued on
    12 December 2017), effective for accounting period beginning on or after 1 January 2019. These annual improvements have not
    been adopted by the EU yet.
    Also adoption of the following interpretations and amendments, will not have any impact on the accounting policies, financial
    position or performance of the Company. Interpretations have not been adopted by the EU yet.
    The Interpretation IFRIC Interpretation 22 Foreign Currency Tr ansactions and Advance Consideration clarifies that, in
    determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the
    derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is
    the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance
    consideration. If there are multiple payments or receipts in advance, then the entity must determine the transaction date for e ach
    payment or receipt of advance consideration. Entities may apply the amendments on a fully retrospective basis. Alternatively, a n
    entity may apply the Interpretation prospectively to all assets, expenses and income in its scope that are initially recognised on
    or after:
    Consolidated Financial Statements Consolidated Financial Statements


    106 107
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    (i)The beginning of the reporting period in which the entity first applies the interpretation Or
    (ii) The beginning of a prior reporting period presented as comparative information in the financial statements of the reporting
    period in which the entity first applies the interpretation.
    The Interpretation is effective for annual periods beginning on or after 1 January 2018. Early application of interpretation is
    permitted and must be disclosed. However, since the Group’s curre nt practice is in line with the Interpretation, the Group does
    not expect any effect on its financial statements.
    The Interpretation IFRIC Interpretation 23 Uncertaint y over Income Tax Treatment addresses the accounting for income
    taxes when tax treatments involve uncertainty that affects the a pplication of IAS 12 and does not apply to taxes or levies outside
    the scope of IAS 12, nor does it specifically include requirement s relating to interest and penalties associated with uncertain tax
    treatments. The Interpretation specifically addresses the following:
    -Whether an entity considers uncertain tax treatments separately
    - The assumptions an entity makes about the examination of tax treatments by taxation authorities
    - How an entity determines taxable profit (tax loss), tax ba ses, unused tax losses, unused tax credits and tax rates
    - How an entity considers changes in facts and circumstances.
    An entity must determine whether to consider each uncertain tax treatment separately or together with one or more other uncerta in
    tax treatments. The approach that better predicts the resoluti on of the uncertainty should be followed. The interpretation is
    effective for annual reporting periods beginning on or after 1 Ja nuary 2019, but certain transition reliefs are available. The Group
    will apply interpretation from its effective date. Since the Gr oup does not operate in a complex multinational tax environment ,
    applying the Interpretation may not significantly affect its financial statements and the required disclosures.
    Other International Financial Reporting Standards
    The Group has not adopted any other IFRS standards adopted by EU early where adoption is not mandatory at the date of
    preparation of the financial statements. Where transition provisi ons give an entity the choice of whether to apply new standards
    prospectively or retrospectively, the Group has decided to apply the standards prospectively.
    (c) Basis of consolidation
    i. Subsidiaries
    Subsidiaries are those enterprises that are controlled by the Group. The control exists when the Group has the power, directly or
    indirectly, to govern the financial and operating policies of an enterprise, so as to obtain benefits from its activities. The existence
    and effect of potential voting rights that are currently exercisabl e or convertible are considered when assessing whether the Group
    controls another entity. The consolidated financial statements include the Group's interests in other entities based on the Gro up's
    power to control such entities regardless of whether the contro l is actually exercised or not. The financial statements of
    subsidiaries are included in the consolidated financial statemen ts from the day of origin of the control until the day of cessation
    of the control.
    ii. Associates
    Associates are those enterprises in which the Group has significant influence, but not control, over the financial and operatin g
    policies. Significant influence is presumed to exist when a company holds between 20 and 50 percent of the voting rights of
    another entity. The consolidated financial statements include the Group's share of the recognised gains and losses of associates
    on an equity accounted basis (equity method) from the day of origin of the significant influence until the day of cessation of the
    significant influence. Investment in associate is recognised in itially at cost. When the Group's share of losses exceeds the ca rrying
    amount of the associate, the carrying amount of such an asso ciate is reduced to nil and recognition of further losses is
    discontinued, except to the extent that the Group has incurred obligations in respect of the associate.
    iii. Scope of consolidation
    The consolidation as at 31 October 2017 includes five companies and at 31 October 2016 includes three companies. The parent
    company and four (for 2016: two) subsidiaries prepared their fina ncial statements as at 31 October. The list of all companies
    included in the consolidation is provided in Note 39 – Group entities.
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    iv. Transactions eliminated on consolidation
    Intra-group balances and transactions, and any unrealised gains or losses arising from intra-group transactions, are eliminated in
    preparing the consolidated financial statements.
    v. Acquisition method of accounting
    Acquisitions of subsidiaries are accounted for using the acqui sition method. The consideration transferred in a business
    combination is measured at fair value, which is calculated as th e sum of the acquisition-date fair values of the assets transferred
    by the acquirer, liabilities incurred by the acquirer to the former owners of the acquiree and the equity interests issued by t he
    acquirer.
    Acquisition-related costs are recognised directly in profit or loss.
    The acquiree's identifiable assets acquired and the liabilitie s assumed that meet the recognition criteria under IFRS 3 are
    recognised at their fair value at the acquisition date.
    Goodwill is measured as the excess of the sum of the considerati on transferred, the amount of any non-controlling interests in
    the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the
    acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Otherwise the difference is reassessed
    and any excess remaining (negative goodwill) after the rea ssessment is recognised directly in profit and loss.
    The non-controlling interest is measured as a proportionate share of identifiable assets of the acquiree’s identifiable assets.
    vi. Unification of accounting principles
    The accounting principles and procedures applied by the consolidated companies in their financial statements were unified in th e
    consolidation, and comply with the principles applied by the parent company.
    (d)
    Foreign currency
    Foreign currency transactions
    Items included in the financial statements of each of the Group' s entities are measured using the currency of the primary economic
    environment in which the entity operates (the functional currency). The consolidated financial statements are presented in
    thousands of euros, which is the Group's functional and presenta tion currency. Transactions in foreign currencies are translated
    into euros at the foreign exchange rate valid at the date of th e transaction. Monetary assets and liabilities denominated in fo reign
    currencies are translated into euros at the financial statements date at the exchange rate of the European Central Bank valid at
    that day.
    Foreign exchange differences arising from such translations ar e recognised through profit or loss. Non-monetary assets and
    liabilities denominated in foreign currencies, which are measured at cost, are translated into euros using the exchange rate valid
    at the date of the transaction. Non-monetary assets and liabil ities denominated in foreign currencies that are measured at fair
    value are translated into euros at the foreign exchange rates valid at the dates the fair values are determined.
    Foreign currency translation reserve includes all foreign exchange differences that arise from the transfer of financial statem ents
    of foreign entities within the consolidation group.
    (e) Financial instruments
    i. Classification
    A financial instrument is any contract that gives rise to a fina ncial asset of one entity and a financial liability or equity instrument
    of another entity.
    Loans granted are non-derivative financial assets with fixed and dete rminable payments, not quoted in an active market, which
    are not classified as available-for-sale securities, financial asse ts held to maturity or as financial instruments at fair value through
    profit or loss.
    Consolidated Financial Statements Consolidated Financial Statements


    108 109
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    Available-for-sale securities
    are those non-derivative financial assets that are not classified as financial instruments at fair value
    through profit or loss, loans and advances to banks and customers or as financial assets held to maturity.
    Financial instruments at fair value through profit or loss are those that the Group principally holds for trading, that is, with the
    purpose of short-term profit taking.
    ii. Recognition
    Loans granted are recognised on the day they are provided by the Group.
    Financial assets at fair value through profit or loss and av ailable-for-sale securities are recognised on the date the Group co mmits
    to purchase the assets.
    iii. Measurement
    Financial instruments are measured upon initial recognition at fair value plus, in the case of a financial instrument not at fair
    value through profit or loss, transaction costs directly attribut able to the acquisition or issue of the financial instrument.
    Subsequent to initial recognition, financial assets are measured at amortized costs, except for financial assets at fair value through
    profit and loss and available-for-sale securitie s, which are measured at fair value.
    iv. Fair value measurement principles
    The fair value of financial instruments is based on their quoted market price at the financial statements date without any dedu ction
    for acquisition-related costs. If a quoted market price is not available, the fair value of the instrument is estimated by the
    management using the pricing model or discounted cash flow techniques.
    Where the discounted cash flow method is used, estimated future cash flows are based on the management's best estimates and
    the discount rate is the market rate at the date of the financial statement for an instrument with similar terms and conditions .
    Where pricing models are used, inputs for these models are based on market-related factors at the date of the financial statement.
    v. Gain and losses on subsequent revaluation
    Gains and losses arising from a change in fair value are recogni sed in profit or loss for financial instruments at fair value through
    profit or loss and directly in equity for available-for-sale secu rities. Changes in the fair value of available-for-sale securities are
    derecognised from other equity to profit or loss at the moment of sale.
    vi. Derecognition
    A financial asset is derecognised when the Group loses control over the contractual rights that comprise that asset. This occur s
    when the rights are realised, expire or are surrendered by the Group.
    Available-for-sale assets that are sold are derecognised and th e corresponding payable receivables to buyers are recognised as at
    the date the Group commits to sell the assets.
    Loans and advances to customers are derecognised as at the day they are paid/ settled by the Group.
    (f) Cash and cash equivalents
    Cash and cash equivalents comprise cash on hand and in banks, short-term highly liquid investments with original maturities of
    three months or less and short-term highly liquid inve stments readily convertible for known amounts of cash.
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    (g)
    Inventories
    Inventories are measured at the lower of acquisition cost (pur chased inventory), respectively in own costs (incurred by own
    activity), and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the
    estimated cost of completion and selling expenses. Purchased in ventories are measured at cost, which includes the purchase price
    and other directly attributable expenses incurred in acquiring the inventories and bringing them to their existing location and
    condition. Own costs include direct costs and indirect co sts associated with acquiring inventories by own activity.
    (h) Offsetting
    Financial assets and liabilities are offset and their net amount is reported in the balance sheet when the Group has a legally
    enforceable right to set off the recognised amounts and the transactions are intended to be settled on a net basis.
    (i) Impairment
    The carrying amounts of the Group's assets, other than inventories (refer to the accounting policy under letter g)), investment
    property (refer to the accounting policy under letter l)), financial assets at fair value through profit or loss (refer to the accounting
    policy under letter c)), available-for-sale securities (refer to the accounting policy under letter c)) and deferred tax assets (refer
    to the accounting policy under letter p)) are reviewed at each financial statements date to determine whether there is objectiv e
    indication of impairment of the asset. If any such indication ex ists, the asset's recoverable amount is estimated. Intangible assets
    that have an indefinite useful life are not subject to amortisa tion, but are tested annually for impairment as part of the cash -
    generating unit to which they belong.
    An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable
    amount. Impairment losses are recognised in profit or loss.
    Loans granted are recognised net of value adjustment for losses on loans. Value adjustments are determined on the basis of the
    state of the loan and performance of the borrower and the value of any collateral and all third-party guarantees is taken into
    account.
    The recoverable amount of receivables carried at amortised cost is calculated as the present value of estimated future cash flows,
    discounted at the original effective interest rate (i.e. the e ffective interest rate computed upon initial recognition of these financial
    assets). Short-term receivables are not discounted.
    If assets available for sale caused a decrease in fair value rec ognized directly in equity and if objective reasons exist that prove
    that there was a decrease in the fair value of the assets, the cumulated loss recognized in equity shall be reported in the pro fit and
    loss statement even if the relevant financial asset had not been reversed from the financial position. The amount of loss recog nized
    in the profit and loss statement is the difference between the acquisition cost and the fair value, adjusted for the impairment of
    the financial asset already recognized in profit and loss. A decr ease in fair value of more than 20% of the acquisition cost or a
    decrease in fair value below the acquisition cost that lasts cont inuously more than nine months in case of securities investments
    is considered an impairment.
    The recoverable amount of other assets is the greater of their va lue in use less costs to sell and value in use. In assessing value in
    use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
    assessment of the time value of money and the risks specific to th e asset. For an asset that does not generate largely independent
    cash inflows, the recoverable amount is determined fo r the cash-generating unit to which the asset belongs.
    An impairment loss in respect of receivables carried at amortised cost is reversed if the increase in the recoverable amount ca n
    be related objectively to an event occurring after the impairment loss was recognised.
    In the case of goodwill, an impairment loss cannot be decreased subsequently.
    In respect of other assets, an impairment loss is reversed or d ecreased when there is an indication that the impairment loss no
    longer exists and there has been a change in the estimates used to determine the recoverable amount.
    Consolidated Financial Statements Consolidated Financial Statements


    110 111
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    An impairment loss can only be reversed or decreased to the extent that the asset's carrying amount does not exceed the carryin
    g
    amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
    (j) Property, plant and equipment
    i. Owned assets
    Single items of property, plant and equipment are measured at cost less accumulated depreciation (see below) and impairment
    losses (refer to the accounting policy under letter i)). Cost incl udes expenditures that are directly attributable to the acquisition
    of the asset. The cost of self-constructed assets includes the cost of materials, direct labour, any other costs directly attributable
    to bringing the asset to a working condition for its intended use and costs of dismantling and removing the items and restoring
    the site where it was located. When parts of an item of property, plant and equipment have different useful lives, those compon ents
    are accounted for as Consolidated items (major components) of property, plant and equipment.
    ii. Leasing
    Agreements on lease of assets in relation to which the Group a ssumes substantial part of risks and benefits of ownership are
    classified as financial leasing. Leased assets are stated at an amount equal to the lower of their fair value and the present v alue
    of the minimum leasing payments at inception of the lease, less accumulated depreciation (see below) and impairment losses
    (refer to the accounting policy under letter i)).
    iii. Subsequent expenditures
    Subsequent expenditure is capitalised if it is probable that the future economic benefits embodied in the part of property, pla nt
    and equipment will flow to the Group and the relevant cost can be measured reliably. All other expenditures including the costs
    of day-to-day servicing of property, plant and equipment are recognised in profit or loss in the period to which they relate.
    iv. Depreciation
    Except as specified below, depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of
    individual items of property, plant and equipment. Land is not depreciated. The estimated useful lives are as follows:
    Buildings 30 - 45 years
     Individual movables and sets of movables
     Geothermal borehole 40 years
     Slides 25 years
     Cableways, ski lifts, and leisure attractions 12 - 40 years
     Equipment 3 - 25 years
     Fixtures and fittings and others 2.5 - 10 years
    Depreciation methods, useful lives, as well as residual values, are reassessed annually as at the financial statement’s date. Each
    significant part of property, plant and equipment (component) with cost significant in relation to the total cost of the releva nt
    item is depreciated Consolidatedly.
    v. Capitalized borrowing costs
    Borrowing costs attributable to the asset that necessarily takes a substantial period of time to get ready for its use or sale are
    capitalised by the Group as part of the cost of the asset.
    (k) Intangible assets
    i. Goodwill and intangible assets acquired in a business combination
    Goodwill is measured as the excess of the sum of the considerat ion transferred, the amount of any non-controlling interest in the
    acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-
    date amounts of the identifiable assets acquired and the liabilit ies assumed. Goodwill on acquisition of subsidiaries is included
    under intangible assets. Goodwill on acquisition of associates is included in the investments in associates.
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    Goodwill is tested annually for impairment and carried at cost
    less accumulated impairment losses. Gains and losses on the
    disposal of an entity include the carrying amount of goodwill relating to the entity sold. Negative goodwill arising on an
    acquisition is reassessed and any excess remainder of the negati ve goodwill after the reassessment is recognised in profit or loss.
    Intangible assets acquired in a business combination are recognised at fair value on the acquisition date if the intangible ass et is
    separable or arises from contractual or other legal rights. Inta ngible assets with an indefinite useful life are not subject to
    amortisation and are recorded at cost net of impairment loss. Intangible assets with a definite useful life are amortized over the
    useful life and are stated at cost net of accumulated amortisation and impairment losses.
    ii. Software and other intangible assets
    Software and other intangible assets acquired by the Group are stated at cost less accumulated amortisation (see below) and
    impairment losses (refer to the accounting policy under letter i)). Useful life of these assets is reassessed regularly. Lease contracts
    refer to valuation of rights from long-term lease contracts.
    iii. Amortisation
    Amortisation is recognized in profit or loss on a straight-lin e basis over the estimated useful lives of intangible assets, fro m the
    date the asset is available for use. The estimated useful lives are as follows:
     Software 2 – 5 years
     Lease contracts 29 years
     Valuable rights each item uses an individual depreciation plan, based on the estimated
    useful lives if these assets, valuable rights also include trademarks
    which represent non-depreciated assets . The Group uses 2, 6, 7, 8, 12
    and 50-year useful lives for its valuable rights.
    (l) Investment property
    Investment property represents assets that are held by the Group to generate rental income or to realise a long-term increase in
    value, or for both of these purposes.
    Investment property is stated at fair value, which is determined by an independent registered expert or by the management. Fair
    value is based on current prices of similar assets on an active market under the same location and the same conditions, or wher e
    such conditions are not available, by applying the generally appli cable valuation models such as the yield method. Any gain or
    loss arising from a change in fair value is recognised in profit or loss.
    Assets that are constructed or developed for their future use as investment property are measured at fair value if the fair value
    can be determined reliably.
    Details on the valuation of investment property are specified in Note 3(a) – Critical accounting estimates and assumptions,
    Valuation of investment property.
    Rental income from investment property is accounted for as described in the accounting policy under letter (o).
    (m) Provisions
    A provision is recognised in the balance sheet when the Group ha s a present legal, contractual, or non-contractual obligation as
    a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a
    reliable estimate of the amount can be made. Long-term provisions the reduction of which to their present value would have a
    material impact on the financial statements are discounted to their present value.
    i. Long-term employee benefits
    Liability of the Group resulting from long-term employee benefits other than pension plans represents the estimated amount of
    future benefits that employees have earned in return for their service in the current and prior periods. The liability is calcu lated
    using the projected unit credit method, discounted to its presen t value. A discount rate used to calculate the present value of
    liability is derived from the yield curve of high-quality bonds with maturities close to the conditions of the Group’s liabilities as
    at the date of the financial statements preparation.
    Consolidated Financial Statements Consolidated Financial Statements


    112 113
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    ii. Short-term employee benefits
    Short-term employee benefit obligations are measured on an undisc ounted basis and are recognised as expenses at the time of
    provision of the service by the employees. A payable is recognised for the amount expected to be paid under short-term cash
    bonus or profit-sharing plans if the Group ha s a present legal or contractual obligation to pay this amount as a result of past
    service provided by the employee and the obligation can be estimated reliably.
    (n) Interest income and expense
    Interest income and expense is recognised in profit or loss in the period to which it relates using the effective interest rate basis.
    All expenses on loans and borrowings are recognised in profit or loss, with the exception of capitalised borrowing costs; refer to
    the accounting policy under letter (j), part (v).
    (o) Rental income
    Rental income from investment property is recognised in profit or loss on a straight-line basis over the term of the lease.
    (p) Income tax
    Income tax on the profit for the current accounting period comprises current and deferred tax.
    Current tax is the expected tax payable on the taxable income for the current accounting period, using tax rates valid as at th e
    date of the financial statement’s preparation, and any adjustments to tax payable in respect of previous accounting periods.
    Deferred tax is accounted for using the balance sheet method a nd calculated from all temporary differences between the carrying
    amounts of assets and liabilities determined for financial re porting purposes and the amounts used for taxation purposes. The
    following temporary differences weren’t taken into account: the ini tial recognition of assets or liabilities which affect neither
    accounting nor taxable profit, and the differences relating to investments in subsidiaries to the extent that it is probable th at they
    will not be reversed in the foreseeable future. No deferred taxes are recognised on the initial recognition of goodwill.
    Income tax is recognised directly in profit or loss, except for the part that relates to items recognised directly in equity, in which
    case the income tax is recognised in equity.
    Deferred tax asset and liability are offset if there is a legall y enforceable right to offset the payable tax liability and ass et, and
    they relate to the same tax authority and the taxable entity.
    A deferred tax asset is only recognised up to the amount of probable future taxable profits against which the unused tax losses
    and credits can be offset. Deferred tax assets are reduced by th e amount for which it is probable that the related tax benefit will
    not be realised.
    (q) Operative and financial lease payments
    Payments made under operative leasing are recognised in profit or loss on a straight-line basis over the term of the lease.
    Minimum leasing payments of financial leasing are divided into in terest and instalments of the principal. Interest is allocated to
    each period during the term of the lease so as to express a constant periodic rate of interest for the period applied to the un paid
    part of the principal
    (r) Trade and other payables
    Trade and other payables are stated at amortis ed cost (see point (w) Financial liabilities).
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    (s) Revenues from services rendered
    The Group recognises seven types of basic revenues from services rendered:
    Revenues from cableways and ski lifts (hereinafter also referred to as “Mountain Resorts”)
     Revenues from leisure parks (hereinafter also referred to as “Leisure Parks”)
     Revenues from sports services and stores (hereinafter also referred to as “Sports Services and Stores”)
     Revenues from hotel services (hereina fter also referred to as “Hotels”)
     Revenues from restaurant facilities (her einafter also referred to as “Dining”)
     Revenues from real estate projects (mainly from investment property, hereinafter also referred to as “Real Estate”)
     Other revenues
    The Group recognizes revenues in a scope in which economic benefits are likely to flow to the Group, and these revenues can be
    easily valued. Revenues are recognized at fair value. Revenues are accrued depending on in which period the services were
    rendered, excluding revenues from leisure parks, hotel services and restaurant facilities, which are recognised in profit or loss
    after the service has been rendered. Revenues from services rendered do not include value added tax. They are also net of
    discounts and rebates (rebates, bonuses, di scounts, credit notes and the like).
    Since 2012 the Group has been running a loyalty program for its c lients – GOPASS. GOPASS enables its clients to earn points
    for purchase of products and services in its resorts and to redeem these points as discounts from future purchases. The amount of
    unredeemed points are recognized as a decrease in sales against re venue time difference, as they are related to promised discounts
    from future purchases of clients. The Group monitors the valu e of unredeemed points and revalues it on a regular basis for its
    recognition in the financial statements.
    Other services include in particular the services provided in re lation to accommodation, such as the rental of premises includi ng
    hotels disclosed as investments property, parking, wellness, mass age, sale of souvenirs, etc. Revenues from rental are recognised
    over the duration of the rental, with accruals. Revenues from real estate projects are recognised following the transfer of rights
    and obligations and related risks on to buyer, to which occurs at the day of transfering the ownership rights. Revenues from th e
    sale of souvenirs and other goods shall be recognised following the transfer of significant risks and benefits from the particular
    goods. Other revenues from services provided shall be recognised following the provision thereof.
    (t) Dividends
    Dividends are recognised in the statement of changes in equity and also as liabilities in the period in which they are approved .
    (u) Non-current assets and disposal groups held for sale
    Non-current assets (or disposal groups comprising assets and liabi lities) that are expected to be recovered primarily through sale
    rather than through continuing use are classified as held for sa le. Immediately before classification as held for sale, the assets (or
    components of a disposal group held for sale) are re-measured in accordance with the International Financial Reporting Standard s
    as adopted by the EU. Thereafter, upon initial classification as he ld for sale, the assets and disposal group held for sale are
    recognised at the lower of their carrying amount or fair value less cost to sell.
    Any impairment loss on a disposal group is first allocated to goodwill, and then to the remaining assets and liabilities on a p ro
    rata basis, except for inventories, financial assets, deferred ta x assets and investment property, which continue to be measure d in
    accordance with the Group's accounting policies.
    Impairment losses on initial recognition as held for sale are recognised in profit or loss even if the revaluation reserve was created.
    The same applies to gains and losses on subsequent measurements. Gains are not recognised in excess of any cumulative
    impairment loss.
    Property, plant and equipment and intangible assets classified as held for sale are no longer depreciated or amortised.
    In case that, after the asset assignment into the group of assets held for sale, value is realized mainly through use rather than sale
    thereof, the assets shall be accounted back and depreciation or amortization for property, plant and equipment and intangible
    assets shall be recognised in the period when such change of assets arose.
    Consolidated Financial Statements Consolidated Financial Statements


    114 115
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    (v)
    Reporting by segments
    Operating segments are parts of the Group that are able to generate income and expenses with available financial information,
    which is regularly reviewed by the chief operating decision makers in order to allocate resources to the segments and to assess
    their performance. The management monitors 7 main segments, name ly mountain resorts, leisure parks, hotels, dining, sports
    services and stores, real estate, and other.
    (w) Financial liabilities
    The Group recognises financial liabilities as other financial li abilities. The Group does not recognise any financial liabilities
    valued at fair value through profit or loss.
    In the Group’s Consolidated statement of financial position, other financial liabilities are recognized as received loans and
    borrowings, bonds issued, trade payables, ot her liabilities and current tax liabilities.
    Financial liabilities are recognised by the Group on the trade date. Upon initial recognition, financial liabilities are measured at
    fair value including transaction costs.
    Subsequent to initial recognition, financial liabilities are measured at amortized cost. Upon measurement at amortized cost the
    difference between the cost and the face value is recognised th rough profit or loss during existence of the asset or liability using
    the effective interest rate method.
    Financial liabilities are derecognised when the Group's obligation specified in the contract expires, is settled or cancelled.
    (x) Fair value estimates
    The following notes summarise the main methods and assumptions used in estimating the fair values of financial assets and
    liabilities referred to in Note 32 – Fair value information:
    i. Loans granted
    Fair value is calculated based on discounted expected future principal and interest cash flows. Expected future cash flows are
    estimated considering credit risk and any indication of impairment . The estimated fair values of loans reflect changes in credit
    status since the loans were made and changes in interest rates in the case of fixed rate loans.
    ii. Loans and borrowings
    For loans and borrowings with no defined maturities, fair value is taken to be the amount payable on demand as at the date of
    preparation of the consolidated financial statement. The estimated fair value of fixed-maturity loans and borrowings is based o n
    discounted cash flows using rates currently offered for loans and borrowings of similar remaining maturities.
    iii. Trade receivables/payables, other recei vables and other assets/liabilities
    For receivables/payables with a remaining life of less than one year, the nominal amount is deemed to reflect the fair value. O ther
    receivables/payables are discounted to determine the fair value.
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    2.
    Significant accounting estimates and assumptions
    The preparation of the financial statements according to the International Financial Reporting Standards as adopted by the EU
    requires the application of certain significant accounting estimates. It also requires that the management, in the application
    process of the Group accounting principles, should use its judgeme nt. These accounting estimates will, therefore, rarely conform
    to the actual results. Estimates and assumptions that have significant risk of causing a significant adjustment to the carrying
    amount of assets and liabilities within the next accounting period are described below. The estimates and assumptions are
    continually reviewed. If the review of the accounting estimates applies only to one accounting period, it is reported in that p eriod;
    if the review affects current and future accounting periods, it is reported in the period when the review was performed as well as
    in the future periods.
    (a) Business combinations and purchase price allocation
    The acquiree’s or part of business's identifiable assets, liabilities and contingent liabilities are recognised
    and measured at their fair value on the date of acquisition. The allocation of the total cost among the net assets acquired for
    financial reporting purposes is performed with the support of pr ofessional advisors or the Group's management. The valuation is
    based on historical and prospective information available as of the date of the business combination. Any prospective informati on
    that may impact the fair value of the acquired assets is based on management’s assumptions of the future development of
    competitive and economic environments. The results of the valuation analyses are also used for determining the amortisation and
    depreciation periods of the values allocated to specific intangible and tangible fixed assets.
    On 14 September 2016, the Group acquired a 51% interest in a Croatian company, TIKAR D.O.O. (TIKAR). The Group paid
    EUR 1.4 thousand (HRK 10.2 thousand) for this 51% interest. On 21 October 2016, an agreement on the increase of TIKAR’s
    share capital and entry of a new shareholder was signed. Under the agreement, the share capital was increased from the original
    HRK 20 thousand to HRK 2,500 thousand, while the Group interest in TIKAR dropped to 0.408%. Therefore, as of 31 October
    2016 the Group recognises this investment as Financial investment s (see Note 24 – Financial investments). The acquisition of
    TIKAR as a subsidiary during 2016 and its consequent reclassificat ion as a financial investment did not have significant impact
    on the Group’s financial statements.
    (b) Real estate investments valuation
    Real estate investments are recognised at fair value. The fair value of real estate investments is determined either by an
    independent court expert or the property is valued by the management (see Significant accounting policies, note l). In both cas es
    the valuation is based on current market values and conditions. Market value represents the estimated value for which a propert y
    could be exchanged on the valuation day between potential seller and potential buyer in the form of a transaction based on
    independent parties after reasonable marketing, in which each party acts in an informed manner, prudently and without
    compulsion.
    In the absence of actual market prices, the valuation takes into account the estimated net cash flows from property lease and
    capitalisation income, which reflects the specific risks inherent to a given market and also to the cash flows arising from the
    property.
    The valuation reflects (where relevant) the type of lessees who use the property or are responsible for the fulfilment of lease
    liabilities or the type of prospective users, if the property is left non-rented, the general market perception of lessee solve ncy, the
    distribution of responsibilities related to maintenance and insurance of property between the Group and the lessees, and the
    remaining life of property.
    As of 31 October 2017 the investments in property included three hotels (SKI, Liptov, Kosodrevina) and the Otupné
    accommodation facility with the aggregate carrying amount of EUR 1,982 thousand (as of 31 October 2016: EUR 1,982
    thousand), which are leased out to third parties operating them, as well as forest areas and lands obtained as an acquisition i n
    2009 in the carrying amount of EUR 4,572 thousand (as of 31 October 2016: EUR 4,572 thousand). The value of hotels was
    determined by estimate of the hotels' management in a manner stated above. The value of lands was determined by the
    management using market prices, with the final value being based on the estimated market price per square metre depending on
    the type of land and market transactions for lands of similar character.
    Consolidated Financial Statements Consolidated Financial Statements


    116 117
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    3. Significant accounting estimates and assumptions (continued)
    As at 31 October 2017, the Group management, based on current market conditions, revalued the value of investments
    in property and evaluated, that the value of contractual and ma rket lease did not change significantly. Based on the performed
    evaluation, there was no need to adjust the value of investments in property.
    If the fair value of that part of investment in real estate determined based on the management's estimates is different
    from the management's estimates by 10%, the carrying amount of investments in real estate would be higher or lower by EUR 655
    thousand compared to the amount reported as of 31 October 2017 (as of 31 October 2016: EUR 655 thou\
    sand).
    (c)Goodwill and impairment testing
    As of the date of the financial statements, the Group assesses whether the goodwill has not been impaired. If
    the indicator of possible impairment is not detected, the Group is, in accordance with IAS 36, testing goodwill recognised in
    business combinations during the current accounting period and goodwill recognised in prior accounting periods for possible
    impairment annually on 31 October, i.e. as of the date of preparation of the annual consolidated financial statements.
    On the day of acquisition, the acquired goodwill is assigned to individual cash-generating units (CGU) for which it is expected
    to benefit from synergies arising in business combinations. Potential impairment of goodwill is determined by comparing the
    recoverable amount of CGU and its book value. The value of return is determined by the value in use. This value was derived
    from the business plan prepared by the management.
    The key prerequisite which was also the most sensitive factor in determining the recoverable amount, was expected revenues
    assessed by the management, profitability and cost of capital used as the discount factor for future net cash flows. The expected
    revenues as well as profitability (EBITDA) are based on change s in customer target groups, strengthened marketing and increased
    quality of the services rendered. Projecting of cash flows applied in determining the value in use covers a medium-term period
    of 5 years and subsequent extrapolation for the next period. Base d on such standard level of cash flows, the terminal value was
    calculated with the expected growth of cash flows at 2.2% p.a. (2016: 2.2%). The discount rates used in the projecting of cash
    flows were calculated as a weighted average cost of capital and amounted to 6.81% for Slovakia in 2017 and 6.5% in 2016
    (accounting for income taxes).
    In 2017 and 2016, goodwill was tested within CGU Vysoké Tatry, and the test did not show any reason for asset impairment.
    Goodwill acquired by the acquisition in 2015 of the Polish resort Ślaskie Wesole Miasteczko Sp. z o. o has been tested as of 31
    October 2017 and 2016 as part of the impairment test. See Note 3(d). The test did not show any reason for asset impairment.
    If as at 31 October 2017, the projected EBITDA of CGU Vysoké Ta try, which is part of the projected cash flows was lower
    than 5% in comparison with management’s estimates, the value in use for an individual cash-generating unit in the location of
    High Tatras would drop by EUR 10,238 thousand. In such a case, it would not be necessary to account for the asset impairment
    or goodwill even at a lower EBITDA reached. If the discount rate increased by 0.5 percentage point in comparison with the
    management’s estimate, i.e. its value was 7.31 %, the value in use for an individual cash-generating unit for the location of H igh
    Tatras would drop by EUR 17,762 thousand. Here again it would not be necessary to account for asset impairment or goodwill
    even at a higher discount rate.
    If as at 31 October 2016, the projected EBITDA of CGU Vysoké Ta try, which is part of the projected cash flows was lower
    than 5% in comparison with management’s estimates, the value in use for an individual cash-generating unit in the location of
    High Tatras would drop by EUR 8,995 thousand. In such a case, it would not be necessary to account for the asset impairment
    or goodwill even at a lower EBITDA reached. If the discount rate increased by 0.5 percentage point in comparison with the
    management’s estimate, i.e. its value was 7.00 %, the value in use for an individual cash-generating unit for the location of H igh
    Tatras would drop by EUR 21,386 thousand. Here again it would not be necessary to account for asset impairment or goodwill
    even at a higher discount rate.
    (d) Assets impairment testing
    As of the date of the financial statements, the Group assesses whether the assets have not been impaired. IAS 36 requires the
    testing of asset impairment in cases where external or internal indicators would point possible asset impairment.
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    3. Significant accounting estimates and assumptions (continued)
    The Group carries on 6 principal activities: running of mountain reso rts, leisure parks, restaurant services, sports services and
    shops, accommodation services and real estate projects, namely in five locations: Jasná (the Low Tatras), in the High Tatras, and
    in Liptovský Mikuláš, and in Szczyrk and Chorzow in Poland. Each of the locations was assessed by the management as an
    individual cash-generating unit (CGU). he Group monitors the performance and creates independent budgets for individual cash-
    generating units. The Group assets were allocated to individual cash-generating units according to the material
    competence, whereas all assets, i.e. also the hotels, catering establishments and sports services and shops are included in
    individual cash-generating units, except for ski lifts and cableways.
    As of 31 October 2017 and 2016, the Group’s management havi ng considered the Group asset impairment, besides the
    impairment tests for the CGU Vysoke Tatry as goodwill is related to it as stated in par. 3(c), impairment tests have been done for
    both resorts (locations and individual CGUs) in Poland due to the fact that the planned indicators have not been achieved, whic h
    was analysed as an indicator of possible asset impairment of th e Group. No indicators for asset impairment have been identified
    for CGUs in Slovakia.
    Potential asset impairment is determined by comparing the re coverable value of the CGU and its book value. The recoverable
    value is determined by value in use. The value in use has been derived based on the business plan prepared by the management.
    Profitability and the cost of capital used as the discount fact or for future free cash flows were the key assumption and the mo st
    sensitive indicator for determining the recoverable value. Expected revenues and profitability are based on changes in target
    customers groups, boosted marketing, and quality enhancement of services provided. Modelling of future cash flows used in
    determining the value in use covers a medium term of 5 years with the following extrapolation for next periods. Based on such
    normalized cash flows the terminal value was calculated assuming a terminal growth of 2.2% per anum. The discount rate used
    in projecting cash flows was calculated as the weighted averag e cost of capital and equalled 7.50% for Poland in 2017 (2016:
    7.29%) (after accounting for income taxes). The asset impairment te st did not result in need of asset impairment for either CGU
    in Poland.
    If the projected EBITDA of the CGU Ślaskie Wesole Miasteczko Sp. z o. o., as of 31 October 2017, which is a part of projected
    cash flows, was 5% lower each year in comparing with th e managemen’s estimate, the value in use of the CGU Ślaskie Wesole
    Miasteczko Sp. z o. o. would decrease by EUR 2,005 ths. In this ca se it would not be necessary to recognise asset impairment or
    goodwill even by achieving of a lower EBITDA. If the discount rate was 0.5 p.p. higher than the management’s estimate, i.e. it
    would equal 8.00%, the value in use of the CGU Ślaskie Wesole Miasteczko Sp. z o. o. would decrease by EUR 3,679 ths. Even
    in this case it would not be necessary to recognize asset impa irment or goodwill not even when using a higher discount rate.
    If the projected EBITDA of the CGU Szczyrkowski O środek Narciarski, S.A, as of 31 October 2017, which is a part of projected
    cash flows, was 5% lower each year in comparing with the mana gemen’s estimate, the value in use of the CGU Szczyrkowski
    O środek Narciarski, S.A, would decrease by EUR 1,359 ths. In this case it would not be necessary to recognise asset impairment
    or goodwill even by achieving of a lower EBITDA. If the discount rate was 0.5 p.p. higher than the management’s estimate, i.e.
    it would equal 8.00%, the value in use of the CGU Szczyrkowski O środek Narciarski, S.A,. would decrease by EUR 2,495 ths.
    Even in this case it would not be necessary to recognize asset impairment or goodwill not even when using a higher discount
    rate.
    If the projected EBITDA of the CGU Ślaskie Wesole Miasteczko Sp. z o. o., as of 31 October 2016, which is a part of projected
    cash flows, was 5% lower each year in comparing with th e managemen’s estimate, the value in use of the CGU Ślaskie Wesole
    Miasteczko Sp. z o. o. would decrease by EUR 10,515 ths. In this case it would not be necessary to recognise asset impairment
    or goodwill even by achieving of a lower EBITDA. If the discount rate was 0.5 p.p. higher than the management’s estimate, i.e.
    it would equal 7.79%, the value in use of the CGU Ślaskie Wesole Miasteczko Sp. z o. o. would decrease by EUR 5,157 ths.
    Even in this case it would not be necessary to recognize asset impairment or goodwill not even when using a higher discount
    rate.
    Consolidated Financial Statements Consolidated Financial Statements


    118 119
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    3. Significant accounting estimates and assumptions (continued)
    If the projected EBITDA of the CGU Szczyrkowski O
    środek Narciarski, S.A, as of 31 October 2016, which is a part of projected
    cash flows, was 5% lower each year in comparing with the mana gemen’s estimate, the value in use of the CGU Szczyrkowski
    O środek Narciarski, S.A, would decrease by EU R 7,858 ths. In this case it would not be necessary to recognise asset impairment
    or goodwill even by achieving of a lower EBITDA. If the discount rate was 0.5 p.p. higher than the management’s estimate, i.e.
    it would equal 7.79%, the value in use of the CGU Szczyrkowski O środek Narciarski, S.A,. would decrease by EUR 4,328 ths.
    Even in this case it would not be necessary to recognize asset impairment or goodwill not even when using a higher discount
    rate.
    (e) Financial instruments at fair value
    The fair value of financial instruments is determined on the basis of:
    Level 1:
    quoted market prices (not adjusted) in active markets for identical assets or liabilities
    Level 2: inputs other than quoted prices included in Level 1 that are comparable for the asset or liability, either directly (i.e. as prices of similar instruments) or indirectly (i.e. derived from such prices)
    Level 3: inputs for the asset or liability that are not based on comparable market data (incomparable inputs)
    If the quoted market price is not available, the fair value of th e instrument is estimated using valuation techniques. When usi ng
    the valuation models, the management uses estimates and assumptions which are consistent with available information about
    estimates and assumptions which have been used by market part icipants to determine the prices of a particular financial
    instrument.
    in TEUR 31.10.2017
    31.10.2016
    Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
    Financial assets
    Securities for sale - - -
    -64 - -
    64
    Financial instruments
    evaluated at fair value
    through the profit/loss - 2,194 -
    2,194- 2,195 -
    2,195
    Loans Provided - 23,876 -
    23,876- 28,706 -
    28,706
    Other receivables - 21,699 -
    21,699- 22,480 -
    22,480
    Trade receivables - 5,397 -
    5,397- 2,534 -
    2,534
    Cash and Cash
    Equivalents - 9,584 -
    9,584- 7,493 -
    7,493
    Other Assets - 4,383 -
    4,383- 1,314 -
    1,314
    Total - 67,040 - 67,040 64 64,722 - 64,786
    in TEUR 31.10.2017
    31.10.2016
    Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
    Financial obligations
    Loans and Borrowings - 94,696 - 94,696- 45,592 -
    45,592
    Bonds Issued - 189,122 -
    189,122 - 194,385 -
    194,385
    Trade payables - 10,286 -
    10,286- 7,544 -
    7,544
    Other Liabilities - 12,486 -
    12,486- 4,811 -
    4,811
    Total - 306,590 -
    306,590 -
    252,332 -
    252,332
    As of 31 October 2017, the Group recognises, within Level 2, a fi nancial investment in CAREPAR, a.s. (19% interest) in the
    amount of EUR 2,041 thousand (as of 31 October 2016: EUR 2,041 t housand). This company owns a 50% interest in Melida
    a.s., which leases and operates the ski resort Špindlerův Mlýn in the Czech Rep. Since CAREPAR, a.s. as of 31 October 2017
    besides the 50% interest in Melida, a.s. does not report any othe r significant assets or liabilities, the fair value of the investment
    was determined as 9.5% of the estimated fair value of Melida, a.s.
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    3. Significant accounting estimates and assumptions (continued)
    The fair value of Melida, a.s. was estimated, as of 31 Oc
    tober 2017 and 2016, by the Group’s management using the discounted
    cash flow method, with the application of input from the business plan and of cash flow estimates. The business plan and cash
    flow estimates were consistently reviewed before application by the Group’s management. The lease of the ski resort is set til l
    2032, thus the future cash flows were projected from 2018 (respectively for the estimation of the value in 2016 from 2017) unti l
    2032. The main preconditions used in the valuation were the estimated cash flows, EBITDA, its growth and the discount rate.
    Projected EBITDA for 2018 was EUR 5,196 ths. (2016: EUR 4,794 ths) . For 2019 it is expected to grow by 7%, for 2020 by 5%,
    from 2021 to 2023 it is expected to grow by 3% per year and from 2024 to 2032 by 2% per year. The discount rate applied in
    the valuation of such financial assets used as at 31 October 2017 was in amount of 8.70% (2016: 8.54%).
    If in the calculation as at 31 October 2017 the EBITDA projected fo r MELIDA a.s., which is a part of the projected cash flows,
    was 5% lower every year compared to the management estimates, the value of investment in CAREPAR, a.s. would drop by 208
    ths. EUR. If the discount rate increased by 0.5 percentage point in comparison with the management estimate, i.e. its value wou ld
    be 9.20%, the value of CAREPAR, a. s. would drop by 63 ths. EUR.
    If in the calculation as at 31 October 2016 the EBITDA projected fo r MELIDA a.s., which is a part of the projected cash flows,
    was 5% lower every year compared to the management estimates, the value of investment in CAREPAR, a.s. would drop by 187
    ths. EUR. If the discount rate increased by 0.5 percentage point in comparison with the management estimate, i.e. its value wou ld
    be 9.04%, the value of CAREPAR, a. s. would drop by 52 ths. EUR.
    Consolidated Financial Statements Consolidated Financial Statements


    120 121
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    3.
    Information about operating segments
    Information about operating segments – Cons
    olidated statement of profit and loss
    Mountain Resorts Leisure Parks Hotels Dining
    Sports Services and
    Stores Real Estate Other TOTAL
    in TEUR
    31.10.2017 31.10.2016 31.10.2017 31.10.2016 31.10.2017 31.10.2016 31.10.2017 31.10.2016 31.10.2017 31.10.2016 31.10.2017 31.10.
    2016 31.10.2017 31.10.2016 31.10.2017 31.10.2016
    12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m
    Revenues 36,152 33,671 12,456 10,451 22,213 19,875 13,211 11,067 5,796 4,670 5,855 843
    - - 95,683
    80,577
    Other operating
    revenues 63 449 16 76 52 35 91 65 5 -
    -
    - - 227
    625
    Consumption of
    material
    and goods -2,561 -2,818 -903 -575 -4,378 -3,845 -3
    ,861 -3,777 -2,350 -1,831 -2,340 -216
    - - -16,393
    -13,062
    Purchased services -10,010 -10,750 -3,115 -3,022 -5,236 -5,079 -2,348 -1,592 -665 -420 -2,193 -302
    - - -23,567
    -21,165
    Personnel expenses -7,887 -7,627 -3,548 -3,038 -7,518
    -6,303 -3,931 -3,268 -1,622 -1,393
    - - - -24,506
    -21,629
    Other operating
    expenses -417 -363 -179 -106 -263 -244 -91 -89 -40 -70
    -5
    - - -990
    -877
    Gain on sale of assets 73 -22 -3 -43 - - - - - - 1,011 797
    - - 1,081
    732
    Gain on revaluation of
    investment property - - - - - - - - - - - -
    - - -
    -
    Reversal of value
    adjustments to
    receivables - -30 - -8 -15 -37 - -4 -4 -10 - -1
    - - -19
    -90
    Depreciation and
    amortisation -7,524 -7,016 -1,938 -1,480 -2,795 -2,7
    69 -731 -729 -330 -363 -86 -88 -424 -591 -13,828
    -13,036
    Interest income - - - - - - - - - - - - 2,058 1,336 2,058
    1,336
    Interest expenses - 4,570 -4,397 - 1,574 -1,365 - 2,808 -2,595 - 1,670 -1,445 - 732 -610 - 740 -546 - - -12,094
    -10,958
    Net profit from
    financial instruments - 2,031 - -74 - - - - - - - - 169 -352 169
    1,605
    Negative goodwill
    - - - - - - - - - - - - - -
    -
    Profit/(loss) of the
    segment
    before tax 3,319 3,128 1,212 816 - 748 -962 670 228 58 -27 1,507 482 1,803 393 7,821 4,058 Income tax
    -831 -1,312
    Consolidated profit
    6,990 2,746
    In 2017, the Group generates 94% (2016: 97%) of its revenues in th
    e Slovak Republic and 6% (2016: 3%) in Poland. Inter-segment
    eliminations are included in the amounts reported for individual
    periods. No Group’s client has exceeded the limit of 10% share in total revenues. Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    4. Information about operating segments (continued)
    Information about operating segments – Consolidated statement of financial position
    Mountain Resorts Leisure Parks Hotels Dining
    Sports Services and
    Stores Real Estate Other TOTAL
    in TEUR
    31.10.2017 31.10.2016 31.10.2017 31.10.2016 31.10.2017 31.10.2016 31.10.2017 31.10.2016 31.10.2017 31.10.2016 31.10.2017 31.10.
    2016 31.10.2017 31.10.2016 31.10.2017 31.10.2016
    Goodwill and
    Intangible Assets 6,880 7,425 3,130 3,165 4,076 4,040 11 7 10 20 3 - - - 14,110
    14,657
    Property, Plant and
    Equipment 169,198 144,197 64,033 43,421 75,111 69,326 9,870 10,394 2,320 2,477 4,238 4,335 2,394 2,429 327,164
    276,579
    Investments Property - - - - - - - - - - 6,554 6,554 - - 6,554
    6,554
    Inventory
    400 476 176 88 644 567 378 360 2,808 2,495 1,446 1,605 - - 5,852
    5,591
    Trade receivables 2,035 1,072 712 281 1,250 644 744 359 326 151 330 27 - - 5,397
    2,534
    Other receivables 36,901 27,885 1,883 1,031 - - - - - - - - - - 38,784
    28,916
    Financial investments 2,041 2,105 - - 1 1 - - 119 119 - - 33 34 2,194
    2,259
    Other Assets 2,610 774 1,664 1,093 110 380 1 - - - -2 - - - 4,383
    2,247
    Loans Provided 16,731 23,700 2,609 811 4,200 3,939 - - - - 43 43 367 378 23,950
    28,871
    Cash and Cash
    Equivalents 5,724 3,258 1,271 1,507 1,407 1,517 837 845 367 366 -22 - - - 9,584
    7,493
    Assets available for sale
    - - - - - - - - - - - - - - -
    -
    Deferred tax receivable - - - - - - - - - - - - - - -
    -
    Assets total 242,520 210,892 75,478 51,397 86,799 80,414 11,841 11,965 5,950 5,628 12,590 12,564 2,794 2,841 437,972 375,701 Loans and Borrowings
    long term 62,827 37,009 21,750 945 - - - 132 21 21 - - - - 84,598
    38,107
    Other long term
    liabilities 368 - 111 - - - - - - - - - - - 479
    -
    Loans and Borrowings
    short term 9,859 6,996 - - - - 21 - - - - - - - 9,880
    6,996
    Trade payables short term
    4,898 3,283 1,457 1,082 1,855 1,733 1,103 965 484 407 489 74 - - 10,286
    7,544
    Other current liabilities 5,673 4,050 1,680 1,153 2,530 2,373 1,503 1,322 660 558 -39 - - - 12,007
    9,456
    Reserves
    152 489 60 38 77 61 46 34 20 14 20 3 - - 375
    639
    Bonds Issued - - - - - - - - - - - - 184,842 184,702 184,842
    184,702
    Deferred tax liability - - - - - - - - - - - - 22,356 22,254 22,356
    22,254
    Total liabilities 83,777 51,827 25,058 3,218 4,462 4,167 2,673 2,453 1,185 1,000 470 77 207,198 206,956 324,823 269,698 Of the total value of plant, property and equipment recognise d as of 31 October 2017, EUR 52,288 thousand are the Group’s asset
    s in Poland (as of 31 October 2016: EUR 16,952 thousand). The
    total value of the deferred tax liability from the subsidiaries in Poland is EUR 907 thousand as of 31 October 2017 (as of 31 O
    ctober 2016: EUR 1,731 thousand). Inter-segment eliminations are
    included in the amounts reported for individual periods. Inter-segmen
    t prices are determined on the basis of market rates for similar services and financing.
    Consolidated Financial Statements Consolidated Financial Statements


    122 123
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    5.
    Increase and decrease of interests in companies
    On 5 May 2017, company Tatry mountain resorts CR, a.s. was incor porated, with share capital in total amount of 2,000 ths. CZK
    (75 ths. EUR). The Company became sole shareholder in the new company. The new company will realize aquisitions in Czech
    republic.
    On 9 August 2017, the Company sold its 3,850 shares in co mpany Compagnie des Alpes (CDA) in total amount of EUR 103
    ths.. The Company does not hold any shares in CDA as at 31.10.2017.
    On 30 September 2017, company Tatry mountain resorts PL, a.s., with share capital in total amount of 25 ths. EUR was
    incorporated. The Company became sole shareholder in the new company. The new company will realize aquisitions in Poland.
    On 14 September 2016 the Group acquired a 51% interest in a Croa tian company TIKAR D.O.O. (TIKAR). For this 51% interest
    the Group paid EUR 1.4 ths. (HRK 10.2 ths.). TIKAR’s assets as of the acquisition date totalled EUR 2 ths. On 21 October 2016
    a contract was signed to raise the registered capital of TIKAR and for the entry of a new shareholder. With the contract the
    registered capital was raised from HRK 20 ths. To HRK 2,500 th s., whereas the interest of the Group on TIKAR decreased to
    0.408%. Thus, the Group recognizes this investment as of 31 Oc tober 2017 under Financial investments (see Note 25 – Financial
    investments).
    The table below provides an overview of subsidiaries acquired in 2017 and 2016:
    in TEUR
    Date of
    acquisition
    (acquisition of control) Acquisition
    price Decrease of
    cash flow Share of
    Group after
    acquisition %
    Acquisition of subsidiary company
    TIKAR d.o.o.
    14.9.2016 1
    -1 0,5%*
    * As described above, in the time of the acquisition the Group’s interest in TIKAR was 51%, later decreased to 0.5% by
    the increase of the registered capital an
    d by the entry of a new shareholder.
    6. Revenues
    in TEUR
    1.11.2016 -
    31.10.2017 1.11.2015 -
    31.10.2016
    Mountain Resorts 36,152 33,671
    Hotels 22,213 19,875
    Restaurant facilities 13,211 11,067
    Leisure Parks 12,456 10,451
    Sports Services and Stores 5,796 4,670
    Real Estate Projects 5,855 843
    Total 95,68380,577
    7.
    Other operating revenues
    in TEUR
    1.11.2016 -
    31.10.2017 1.11.2015 -
    31.10.2016
    Contractual penalties - 1
    Claims paid by insurance company 26 159
    Other operating revenue 201 465
    Total
    227 625
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    8.
    Consumption of material and goods
    in TEUR
    1.11.2016 -
    31.10.2017 1.11.2015 -
    31.10.2016
    Material in hotels and restaurant facilities -5,858 -5,163
    Goods
    -5,617 -3,805
    Fuels -741 -562
    Material for repair and maintenance -702 -666
    Material and goods – other -3,475 -2,866
    Total
    -16,393 -13,062
    9. Services purchased
    in TEUR
    1.11.2016 -
    31.10.2017 1.11.2015 -
    31.10.2016
    Energy consumption -4,892 -4,519
    Advertisement expenses -3,452 -3,268
    Rental costs (cost of premises) and others -5,138 -4,216
    Other administrative expenses -1,900 -1,910
    Repairs and maintenance expenses -984 -992
    Communication expenses -1,664 -1,542
    Legal advice expenses -710 -533
    Services related to owned premises -342 -314
    Transport, accommodation, travel expenses -247 -272
    Training expenses
    -108 -50
    Other purchased services -4,130 -3,549
    Total
    -23,567 -21,165
    Other purchased services represent the accounting, audit and ot her expenses related to administrative operation of the Group.
    The Group uses the services of the audit firm KPMG Slovensko s pol. s r.o. for the auditing of individual and consolidated
    financial statements. Expenses for those items for the peri od from 1 November 2016 to 31 October 2017 amounted to EUR 149
    thousand (for the period ending 31 October 2016: EUR 146 thousand).
    10. Personnel expenses
    in TEUR
    1.11.2016 -
    31.10.2017 1.11.2015 -
    31.10.2016
    Wages and salaries -14,339 -12,973
    Personnel leasing
    -2,519 -1,665
    Social security (compulsory) -5,848 -5,032
    Remuneration of members of key management and Supervisory Board -1,786 -1,945
    Other social expenses -14 -14
    Total
    -24,506 -21,629
    The average number of Group employees during the period from 1 November 2016 to 31 October 2017 was 1,289, out of which
    25 were management (from 1 November 2015 to 31 October 2016, it was 1,095 employees, out of which 25 were management).
    During the year, the Group used the services of employment agen cies for short-term personnel leasing. From 1 November 2016
    to 31 October 2017, it was 284 employees (from 1 November 2015 to 31 October 2016: 184 employees).
    Consolidated Financial Statements Consolidated Financial Statements


    124 125
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    10. Personnel expenses (continued)
    Key management includes members of the Board of Directors and
    top management, which consists of CEO, CFO, directors of
    each resort, directors of central departments such as sales, mark eting, finance, development. Members of the Board of Directors
    of the Parent Company are paid basic flat remuneration, which for each is set individually based on the decision of the Supervisory
    Board upon election of the member. Extraordinary bonuses are paid to the Board of Directors upon fulfilment of the criteria
    defined in the Remuneration rules. The amount of extraordinary bonuses for the members of the Board of Directors, as well as
    its pay date are set by the Remuneration rules, which are base d on achieving the EBITDA plan. The total amount of extraordinary
    bonuses of the Board of Director s cannot exceed 1% of EBITDA. the Board of Di rectors determines the remuneration of the top
    management. For the year ended 31 October 2017 basic remuneration was paid out in the amount of EUR 678 ths. (for the year
    ended 31 October 2016: EUR 697 ths.). Extraordinary bonuses to the top management were paid out in the amount of EUR 1,068
    ths. (for the year ended 31 October 2016: EUR 1,206 ths.) after th e fulfilment of the criteria for extraordinary bonuses (achieving
    the EBITDA plan).
    As per the Remuneration rules and the valid position contracts, members of the Supervisory Board of the Parent Company are
    paid basic remuneration. For the year ended 31 October 2017 basic remuneration was paid out in the amount of EUR 40 ths. (for
    the year ended 31 October 2016: EUR 42 ths.).
    11. Other operating expenses
    in TEUR
    1.11.2016 -
    31.10.2017 1.11.2015 -
    31.10.2016
    Insurance (property, automobiles, travel cost) -381 -418
    Fees and commissions -395 -320
    Shortages and losses -115 -91
    Other operating cost -99 -48
    Total -990-877
    12.
    Interest income and expenses
    in TEUR 1.11.2016 -
    31.10.2017 1.11.2015 -
    31.10.2016
    Interest income 2,058 1,336
    Interest expense -12,094 -10,958
    Total -10,036 -9,622
    For the period from 1 November 2016 to 31 October 2017, the interest income of EUR 2,058 thousand (from 1 November 2015
    to 31 October 2016 in the amount of EUR 1,336 thousand) is mainly from the fixed-rate loans provided. See Note 20 – Loans
    provided.
    For the period from 1 November 2016 to 31 October 2017, the interest expenses in the amount of EUR 12,094 thousand represent
    the cost of loans and borrowings of EUR 2,204 thousand (from 1 November 2015 to 31 October 2016 in the amount of EUR
    1,048 thousand) and the interest expenses from the bonds issu ed of EUR 9,890 thousand (from 1 November 2015 to 31 October
    2016 in the amount of EUR 9,910 thousand). The Company issued interest-bearing bonds in the total nominal value of EUR 180
    million. The first TMR I bond portion of EUR 70 million with a nominal interest rate of 4.5% p.a. is due on 17 December 2018.
    The second TMR II bond portion of EUR 110 million with a nominal interest rate of 6% p.a. is due on 5 February 2021. For
    more information on the bonds issued, see Note 31 – Bonds issued.
    In the period from 1 November 2016 to 31 October 2017, the Group capitalise interest expenses into assets in amount of EUR
    1,350 thousand (from 1 November 2015 to 31 October 2016, the Group did not capitalise interest expenses into assets).
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    13.
    Net profit from financial instruments
    in TEUR
    1.11.2016 -
    31.10.2017 1.11.2015 -
    31.10.2016
    Revaluation of financial instruments measured at fair value through profit and
    loss statement - 2,026
    Cost of administration of financial instruments -237 -268
    Income from the sale of financial
    4 -
    Other, net 402 -153
    Total
    169 1,605
    For the period from 1 November 2015 to 31 October 2016, the revaluation of financial instruments measured at fair value through
    the statement of profit and loss represented a profit from revalu ation of the interest in CAREPAR, a.s. in the amount of EUR
    2,026 thousand.
    14. Income tax and deferred tax
    in TEUR 1.11.2016 -
    31.10.2017 1.11.2015 -
    31.10.2016
    Current tax:
    Tax of current accounting period
    -708 -3
    Withholding tax on interest -20
    -10
    -728 -13
    Deferred tax:
    Posting and release of temporary differences
    -1,124 -1,299
    Change of tax rate
    1,021 -
    Total reported tax -831-1,312
    Deferred income taxes are calculated using statutory tax rates the
    validity of which is assumed in the period in which a receivable
    is realized or a liability is settled.
    In order to calculate deferred tax from temporary differences incurred in the Slovak Republic, the Group used for the year 2017
    a 21% rate (2016: 22%), resulting from the corporate income tax ra te applicable on the date of preparation of the financial
    statements. To calculate deferred tax from temporary differences incurred in Poland, the Group used a 19% tax rate, as per the
    income tax rate of legal entities effective as of th e date the financial statements were prepared on.
    Reconciliation of the effective tax rate
    in TEUR 1.11.2016 - 31.10.2017 1.11.2015 - 31.10.2016 % %
    Profit / (loss) before taxes 7,821
    4,058
    Tax rate 22% 1,721 22% 893
    Tax non-deductible expenses 3% 253 11% 440
    Income not subject to tax
    -1% -47 -3% -132
    Current tax: withholding tax on interest 0% 20 0% 10
    Tax losses claimed during the period
    0% - 0% -
    Deferred tax asset not settled 0% - 0% -
    Impact of Poland’s tax rate
    -1% -95 2% 101
    Change in the tax rate -13% -1,021 0% -
    Total 11% 831 32% 1,312
    Consolidated Financial Statements Consolidated Financial Statements


    126 127
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    14. Income tax and deferred tax (continued)
    Income tax reported through other components of comprehensive income
    1.11.2016 - 31.10.2017 1.11.2015 - 31.10.2016
    in TEUR
    Before taxes Tax After
    taxes Before
    taxes Tax After
    taxes
    Revaluation of available-for-sal e securities to fair value
    43 9 34 - - -
    Other components of comprehensive
    income
    43 9 34 - - -
    Movements of deferred tax liability (net) during 2017 and 2016
    2017
    in TEUR Balance as at
    1 November 2016 Reported in
    profit and loss
    statement Reported in
    other
    comprehensive income Effect of
    foreign
    exchange
    difference Acquired
    through
    business
    combination Balance as at
    31 October 2017
    Property, plant and
    equipment, and intangible
    assets -22,456 -761 - 1 - -23,216
    Investment property -872 24 - - - -848
    Losses on impairment of
    trade receivables and other
    assets 34 25 - - - 59
    Provisions and liabilities 497 354 - - - 851
    Tax losses 545 256 - - - 800
    Other temporary
    differences -2 - - - - -2
    Total, net -22,254 -103 - 1 - -22,356
    2016
    in TEUR Balance as at
    1 November 2015 Reported in
    profit and loss
    statement Reported in
    other
    comprehensive income Effect of
    foreign
    exchange
    difference Acquired
    through
    business
    combination Balance as at
    31 October 2016
    Property, plant and
    equipment, and intangible
    assets -20,894 -1,590 - 28 - -22,456
    Investment property -828 -44 - - - -872
    Losses on impairment of
    trade receivables and other
    assets 15 19 - - - 34
    Provisions and liabilities 336 161 - - - 497
    Tax losses 390 155 - - - 545
    Other temporary
    differences -2 - - - - -2
    Total, net -20,983 -1,299 - 28 - -22,254
    See also Note 18 - Deferred tax asset, deferred tax liability.
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    15.
    Property, plant and equipment
    in TEUR Land and
    buildings Individual
    movable assets and sets of
    movable assets Assets under
    construction Total
    Cost
    Opening balance as of 1.11.2015
    214,503 114,020
    4,899
    333,422
    Additions
    6,285 2,571
    14,769
    23,625
    Additions due to business combinations
    - -
    -
    -
    Disposals
    -1,511 -246
    -522
    -2,279
    Reclassification to investment property
    - -
    -
    -
    Transfer from assets available for sale
    938 -
    -
    938
    Transfers within assets
    40 338
    -378
    -
    Foreign exchange difference
    - - - -
    Balance as of 31.10.2016
    220,255 116,683 18,768355,706
    Opening balance as of 1.11.2016
    220,255 116,683
    18,768
    355,706
    Additions
    10,448 14,019
    40,591
    65,058
    Additions due to business combinations
    - -
    -
    -
    Disposals
    -2,006 -760
    -
    -2,767
    Reclassification to investment property
    - -
    -
    -
    Transfer from assets available for sale
    - -
    -
    -
    Transfers within assets
    29,889 1,006
    -30,895
    -
    Foreign exchange difference
    - - -9 -9
    Balance as of 31.10.2017
    258,586 130,947 28,455417,988
    Accumulated depreciation and losses
    from impairment of
    assets
    Opening balance as of 1.11.2015
    -32,921 -34,224
    -
    -67,145
    Depreciation of current accounting period -5,472 -6,747
    -
    -12,219
    Decreases
    154 83
    -
    237
    Movement to investments in real property - -
    -
    -
    Transfer from assets available for sale
    - -
    -
    -
    Foreign exchange difference
    - - - -
    Balance as of 31.10.2016
    -38,239 -40,888 --79,127
    Opening balance as at 1.11.2016
    -38,239 -40,888
    -
    -79,127
    Depreciation of current accounting period -5,748 -7,248
    -
    -12,996
    Decreases
    574 724
    -
    1,298
    Movement to investments in real property - -
    -
    -
    Transfer from assets available for sale
    - -
    -
    -
    Transfers within assets
    - -
    -
    -
    Foreign exchange difference
    - - - -
    Balance as of 31.10.2017
    -43,412 -47,412 --90,824
    Carrying value
    as at 1.11.2015
    181,582 79,796 4,899 266,277
    as at 31.10.2016
    182,016 75,795 18,768 276,579
    as at 1.11.2016
    182,016 75,795 18,768 276,579
    as at 31.10.2017
    215,174 83,536 28,455 327,164
    Consolidated Financial Statements Consolidated Financial Statements


    128 129
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    15. Property, plant and equipment (continued)
    In the period from 1 November 2016 to 31 October 2017, the Group carried out investments of EUR 65,058 thousand. The Group
    completed construction of new cableway from Krupová to Kosodr
    evina in total amount of EUR 9,095 thousand, the Group also
    put in use new Hotel Pošta 4* in total amount of EUR 5,080 thousand, constructed new Chalety phase II. in total amount of EUR
    2,045 thousand, completed Centrum východ in total amount of EUR 2,002 thousand. Moreover, the Group improved snowmaking
    machinery and some slopes in amount of EUR 1,667 thousand.
    In Poland in Szczyrk resort, the Group invested into 3 new cableways in the amount of EUR10,568 thousand. Furthermore the
    Group build new accumulated tank in amount of EUR 3,439 thous and, snowmaking and slopes in amount of EUR 6,873 thousand
    and build new stores and catering establishments in amount of EUR 750 thousand. In amusement park Legendia the Group
    acquired new attraction “Lech coaster” in amount of EUR 12,603 thousand, build new restaurant “Lech restaurant” in amount
    of EUR 1,134 thousand, acquired new attraction “Interactive dark ride” in amount of EUR 2,758 thousand, build new sectors in
    amusement park in amount of EUR 4,968 thousand and acquired new themes equipment into individual sectors in amount of
    EUR 1,333 thousand.
    In the period from 1 November 2015 to 31 October 2016, the Group carried out investments of EUR 23,625 thousand. The Group
    acquired the Hrebienok Hotel in the amount of EUR 2,500 thousand, a surf wave in the Tatralandia aqua park in the amount of
    EUR 2,800 thousand, started to construct a new Krupová – Ko sodrevina cableway in the amount of EUR 4,000 thousand.
    In Poland, the Group acquired the Willa Wenus building in the amount of EUR 427 thousand and a Himalaya carousel in the
    amount of EUR 395 thousand, and started with construction of new at tractions in the leisure park, they will be put into operations
    during 2017, totalling EUR 7,422 thousand
    .
    Unused assets and fully depreciated used assets
    As of 31 October 2017 and 2016, the Group reported no unused asse ts. As at 31 October 2017 the Group used fully depreciated
    assets in acquistion cost 10,227 ths. EUR (2016: 7,881 ths. EUR).
    Impairment loss
    For the periods ending 31 October 2016 and 31 October 2017, the Group reported no loss from impairment of property, plant
    and equipment.
    Insurance of assets
    in TEUR 31.10.2017 31.10.2016
    Natural disaster and vandalism
    335,682 302,900
    General machinery risks
    20,084 23,589
    Liability for damage
    15,000 28,420
    Security
    As of 31 October 2017, property, plant and equipment in the amount of EUR 239,943 thousand was used to secure bank loans
    (as of 31 October 2016: in the amount of EUR 204,052 thousand).
    Capitalized borrowing costs
    As of 31 October 2017, the Group capitalise interest on loans into assets in amount of EUR 1,350 thousand (as of 31 October
    2016: the Group did not capitalise any interest on loans into assets).
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    16.
    Goodwill and intangible assets
    in TEUR
    Goodwill Valuable
    rights Lease
    contracts SoftwareAcquired
    intangible assets Total
    Cost
    Opening balance as at 1.11.2015 8,508 3,964 7,401 2,086 - 21,959
    Additions - - - 266 25 291
    Additions due to business
    combinations - - - - - -
    Disposals
    - - - - - -
    Foreign exchange difference - - -5 - - -5
    Balance as of 31.10.2016 8,508 3,964 7,396 2,352 25 22,245
    Opening balance as at 1.11.2016 8,508 3,964 7,396 2,352 25 22,245
    Additions - 8 - 100 206 314
    Additions due to business
    combinations - - - - - -
    Disposals
    - -93 - - - -93
    Transfers - - - - - -
    Foreign exchange difference - - - - - -
    Balance as of 31.10.2017 8,508 3,879 7,396 2,452 231 22,466
    Accumulated depreciation and
    losses from impairment of
    assets
    Opening balance as at 1.11.2015
    -4 474 -908 -299 -1,091 - -6,772
    Depreciation of current
    accounting period
    - -75 -251 -491 - -817
    Decreases
    - - - - - -
    Losses from impairment of
    assets - - - - - -
    Foreign exchange difference
    - - - 1 - 1
    Balance as of 31.10.2016
    -4,474 -983 -550 -1,581 -
    -7,588
    Opening balance as at 1.11.2016 -4,474 -983 -550 -1,581 - -7,588
    Depreciation of current
    accounting period - -71 -254 -507 - -832
    Decreases
    - 63 - - - 63
    Losses from impairment of
    assets - - - - - -
    Transfers
    - - - - - -
    Foreign exchange difference - - - - - -
    Balance as of 31.10.2017
    -4,474 -991 -804 -2,088 -
    -8,357
    Carrying value
    As of 1.11.2015
    4,034 3,056 7,102 995 -
    15,187
    As of 31.10.2016
    4,034 2,981 6,846 771 25 14,657
    As of 1.11.2016 4,034 2,981 6,846 771 25 14,657
    As of 31.10.2017 4,034 2,888 6,592 364 231 14,110
    By acquiring subsidiary SWM, the Group acquired intangible asse
    ts after revaluation in total of EUR 65 thousand and goodwill
    in total of EUR 644 thousand. By acquiring subsidiary SON, the Group acquired fixed assets after revaluation in a total of EUR
    7,510 thousand. It is valuation of rights from concluded long-term lease contracts for lands in the Szczyrk resort and software.
    Valuable rights are represented mainly by tr ademarks related to Aquapark Tatralandia.
    Consolidated Financial Statements Consolidated Financial Statements


    130 131
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    17.
    Investments in real estate
    in TEUR
    31.10.2017 31.10.2016
    Acquisition price
    Opening balance as at 1.11.2016 / 1.11.2015 6,554 6,554
    Transfer from tangible assets (net)
    - -
    Transfer from IP to available-for-sale assets - -
    Revaluation at fair value
    - -
    Balance as of 31.10.2017 / 31.10.2016 6,554 6,554
    As of 31 October 2017, the investments in property included three hotels (SKI, Liptov, Kosodrevina) and the Otupné
    accommodation facility with the aggregate carrying amount of EUR 1,982 thousand (as of 31 October 2016: EUR 1,982
    thousand), which are leased out to third parties operating them, as well as forest areas and lands obtained as an acquisition i n
    2009 in the carrying amount of EUR 4,572 thousand (as of 31 October 2016: EUR 4,572 thousand). The value of hotels was
    determined by estimate of the hotels' management (see Note 3(a )). The value of lands was determined by the management using
    market prices, with the final value being based on the estimated market price per square metre depending on the type of land and
    market transactions for lands of similar character.
    As at 31 October 2017, the Group’s management, based on current market conditions, revalued the value of investments
    in property and came to the conclusion, that the value of contra ctual and market lease did not change significantly and therefore
    there was no need to adjust the value of investments in property.
    In the period from 1 November 2016 to 31 October 2017, revenues from investments in real estate amounted to EUR 179
    thousand and direct operating expenses related to investment in real estate amounted to EUR 54 thousand. In the period from 1
    November 2015 to 31 October 2016: revenues from investments in real estate amounted to EUR 213 thousand and direct
    operating expenses related to investment in real estate amounted to EUR 61 thousand.
    Security
    As of 31 October 2017, a portion of investment in real estate of EUR 1,782 thousand was used to secure bank loans (as of 31
    October 2016: in the amount of EUR 1,782 thousand).
    18. Deferred tax asset, deferred tax liability
    Deferred tax asset (liability) have been recognised for these items:
    in TEUR Receivables
    Liabilities Total
    31.10.2017 31.10.2016 31.10.2017 31.10.2016 31.10.2017 31.10.2016
    Temporary differences related to:
    Non-current fixed and intangible
    assets - - -23,216 -22,456
    -23,216 -22,456
    Investments Property - - -848 -872
    -848 -872
    Losses from impairment of trade
    receivables and other assets 59 34 - - 59 34
    Provisions and liabilities
    895 497 - - 895 497
    Tax losses 756 545 - - 756 545
    Other temporary differences -2 - - -2 -2 -2
    Offsetting -1,708 -1,076 1,708 1,076 - -
    Total
    - - -22,356 -22,254 -22,356 -22,254
    Tatry mountain resorts, a.s.
    and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    18. Deferred tax asset, deferred tax liability (continued)
    Deferred tax asset was not recognised for these items (tax base):
    in TEUR 31.10.2017 31.10.2016
    Tax losses
    -827 -
    Total -827-
    Deferred tax asset from carry-forward losses is recognised only up to the amount up to which it could be amortised against futu
    re
    tax profits in the future.
    The expected last periods for amortisation of tax losses are the following:
    in TEUR 2018
    2019 post 2019
    Tax losses
    1,364
    1,353 2,026
    In Slovakia the maximum deadline for redemption of tax losses incurred before 1 January 2010 is 5 years. On the basis of a
    legislation change with effect from 1 January 2014, losses incurred after 1 January 2010 can be redeemed within 4 years and the
    Group can claim proportionally no more than 25% of the tax losses per year. In Poland the maximum deadline for redemption
    of tax losses incurred is 5 years. The Group may apply evenly maximum 50% of tax losses per year.
    19. Inventories
    in TEUR 31.10.2017 31.10.2016
    Goods 3,176 2,793
    Material 1,230 1,193
    Assets available for sale 1,446 1,605
    Total
    5,852 5,591
    Assets held for sale consist of Chalety Otupné phase II. (E UR 1,356 thousand) and phase III. (EUR 90 thousand), which was
    completed by the Company and will be consequently sold to 3rd parties. Proceeds from sale of 3 chalettes will be recognized in
    2018. As of 31 October 2017, inventories of EUR 5,763 thousand were used to secure bank loans (as of 31 October 2016:
    EUR 5,551 thousand).
    20. Loans provided
    in TEUR 31.10.2017 31.10.2016
    Short-term 21,307 26,125
    Long-term 2,643 2,746
    Total 23,950 28,871
    As at 31 October 2017, short-term loans represent a paid-up loan extended to company JASNÁ Development s.r.o. with a fixed
    interest rate of 5% p.a., the amount of unpaid accumulated in terest as at 31 October 2017 represents 43 ths. EUR (as at 31 Octo ber
    2016 it is 43 ths. EUR), a paid-up loan extended to company EUROCOM Investment, s.r.o. with a fixed interest rate of 7% p.a.,
    the amount of unpaid accumulated interest as at 31 October 2017 represents 91 ths. EUR, loan in amount of 2,309 ths. EUR
    extended to the owner of Penzión Energetik (as at 31 October 2016: 2,217 ths. EUR), with a fixed interest rate of 5% p.a., the
    amount of unpaid accumulated interest from this amount as at 31 October 2017 is 462 ths. EUR (as at 31 October 2016: 370 ths.
    EUR), a loan in amount of 1,891 ths. EUR (as at 31 October 2016: 1,722 ths. EUR) extended to company TIKAR d.o.o. with a
    Consolidated Financial Statements Consolidated Financial Statements


    132 133
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    20. Loans provided (continued)
    fixed interest rate of 10% p.a., the amount of unpaid accumulated interest on such amount as at 31 October 2017 is 186 ths. EUR
    (as at 31 October 2016: 17 ths. EUR), two loans extended to co mpany AIRAVATA Holding s.r.o. in amount of 200 ths. EUR
    with a fixed interest rate of 5% p.a., the amount of unpaid accumulated interest on such amount as at 31 October 2017 is 4 ths.
    EUR and a loan in amount of 202 ths. EUR with a fixed interest rate of 5% p.a., the amount of aunpaid accumulated interest as
    at 31 October 2017 is 2 ths. EUR and a paid-up loan extended to company AIRAVATA Holding s.r.o. (as at 31 October 2016:
    10,085 ths. EUR) with a fixed interest rate of 5% p.a., the amount of unpaid accumulated interest as at 31 October 2017 is 1,76 8
    ths. EUR (as at 31 October 2016: 2,180 ths. EUR). Short-term loan s are further represented by a loan extended to company 1.
    Tatranská, akciová spolo čnos ť in amount of 12,626 ths. EUR (as at k 31 Octobe r 2016: 11,789 ths. EUR) with a fixed interest
    rate of 7% p.a., the amount of unpaid accumulated interest on such amount as at 31 October 2017 is 2,983 ths. EUR (as at k 31
    October 2016: 2,317 ths. EUR), loan in amount of 177 ths. EU R (as at k 31 October 2016: 161 ths. EUR) extended to company
    GALAXO a.s. with a fixed interest rate of 5% p.a., the amount of unpaid accumulated interest as at 31 October 2017 is 15 ths.
    EUR (as at 31 October 2016: 7 ths. EUR), loan extended to company SON Partner in amount of 903 ths. EUR (as at 31 October
    2016: 829 ths. EUR) with a fixed
    interest rate of 7% p.a., the amount of unpaid accumulated interest on such amount as at
    31 October 2017 is 85 ths. EUR (as at 31 October 2016: 28 ths. EUR), loan extended to company Korona Ziemi in amount
    of 917 ths. EUR (as at 31 October 2016 : 818 ths. EUR) with a fixed interest rate of 7% p.a., the amount of unpaid
    accumulated interest on such amount is as at 31 October 2017 is 138 ths. EUR (as at 31 October 2016: 83 ths. EUR) and
    an interest-free loan of 180 ths. EUR exte nded to company AIRAVATA Holding s.r.o..
    As at 31 October 2017, long-term loans represent loan in amount of 1,601 ths. EUR extended to company EUROCOM
    Investment, s.r.o. with a fixed interest rate of 7% p.a., interest-free loan in amount of 853 ths. EUR extended to Melida,
    a.s. (as at 31 October 2016: 810 ths. EUR), loan in amount of 53 ths. EUR (as at 31 October 2016: 78 ths. EUR) extended
    to company HOLLYWOOD C.E.S., with a fixed interest rate of 5% p.a., the amount of unpaid accumulated interest on
    such amount as at 31 October 2017 is 0.2 ths. EUR (as at 31 October 2016: 0.3 ths. EUR), loan in amount of 68 ths. EUR
    (as at 31 October 2016: 68 ths.EUR) extended to Mr. Č ukan with a fixed interest rate of 4% p.a., the amount of unpaid
    accumulated interest on such amount is 0 ths. EUR and loan in amount of 68 ths. EUR (as at 31 October 2016: 68 ths.
    EUR) extended to Mr. Lipták with a fixed interest rate of 4% p.a., the amount of unpaid accumulated interest on such
    amount is 0 ths. EUR.
    21. Trade receivables
    in TEUR 31.10.2017 31.10.2016
    Trade receivables 5,515
    2,691
    Value adjustments to receivables -118
    -157
    Total 5,397 2,534
    Short-term 5,397 2,534
    Long-term - -
    Total 5,397 2,534
    As of 31 October 2017, trade receivables amount to EUR 5,397 thousand and include current operating and barter receivables.
    As of 31 October 2016, trade receivables included current opera ting and barter receivables amounting to EUR 2,534 thousand.
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    21. Trade receivables (continued)
    Classification of receivables by maturities is as follows:
    in TEUR 31.10.2017 31.10.2016
    Gross
    Value
    adjustment Net Gross Value
    adjustment Net
    Within due period 4,632 - 4,632 1,515
    -1,515
    Overdue within 30 days 398 - 398 819 - 819
    Overdue from 30 days to 180 days 202 -30 172 261 -80 181
    Overdue from 180 days to 365 days 41 -5 36 34 -15 19
    Overdue over 365 days 242 -83 159 62 -62 -
    Total 5,515 -118 5,397 2,691 -157 2,534
    As of 31 October 2017 and 31 October 2016, the amount of the value adjustments consisted of value adjustments to current
    operating receivables.
    The development of the value adjustment during the accounting period is shown in the overview below:
    in TEUR 31.10.2017
    31.10.2016
    Balance as at 1.11.2016 / 1.11.2015 157
    72
    Creation of value adjustment 41
    95
    Use -58
    -5
    Reversal of value adjustment -22
    -5
    Balance as at 31.10.2017 / 31.10.2016 118 157
    As of 31 October 2017, receivables of EUR 5,387 thousand we re used to secure bank loans (as of 31 October 2016:
    EUR 2,524 thousand).
    22. Other receivables
    in TEUR 31.10.2017
    31.10.2016
    Advance payments made 38,784
    28,916
    Total 38,784 28,916
    Short-term 36,127 21,087
    Long-term 2,657 7,829
    Total 38,784 28,916
    Advances granted for assets are connected with future acquisitions in the amount of EUR 20,839 thousand (as of 31 October
    2016: EUR 20,839 thousand) and unfinished investment activitie s in the amount of EUR 17,085 thousand (as of 31 October
    2016: EUR 6,436 thousand). The Group granted an advance for a future acquisition, which is a company operating cableways.
    The Group intends to buy that company in the future. The contract was concluded with AIRAVATA Holding s.r.o.
    Consolidated Financial Statements Consolidated Financial Statements


    134 135
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    23.
    Other assets
    in TEUR 31.10.2017 31.10.2016
    Prepaid expenses and accrued income 518 849
    Other tax assets
    3,575 1,038
    Other Assets 290 360
    Total 4,383 2,247
    Short-term 4,383 2,247
    Long-term - -
    Total 4,383 2,247
    24. Financial investments
    in TEUR
    31.10.2017 31.10.2016
    Financial instruments measured at fair value through profit or loss 2,194
    2,195
    Available-for-sale securities
    - 64
    Total
    2,194 2,259
    As of 31 October 2017, financial instruments measured at fair value through profit or loss represent a 19% investment in
    CAREPAR, a.s. in the amount of EUR 2,041 thousand (as of 31 October 2016: EUR 2,041 thousand), which owns a 50% interest
    in MELIDA a.s., which leases and operates the ski resort Špindler ův Mlýn. Financial investments further include an investment
    in Korona Ziemi Sp. z o.o. in the amount of EUR 119 thousand (as of 31 October 2016: EUR 119 thousand), and a cash
    contribution to Tatranské dopravné družstvo, which is engaged in intermediary activities in the field of services in amount of 33
    ths. EUR (as at 31 October 2016: 33 ths. EUR) and the investment in company TIKAR D.O.O. in amount of 1 ths. EUR (as at
    31 October 2016: 1 ths. EUR).
    On 14 September 2016, the Company acquired a 51% interest in a Croatian company, TIKAR D.O.O. (TIKAR). The Company
    paid EUR 1.4 thousand (HRK 10.2 thousand) for this 51% interest. On 21 October 2016, an agreement on the increase of
    TIKAR’s share capital and entry of a new shareholder was signe d. Under the agreement, the share capital was increased from
    the original HRK 20 thousand to HRK 2,500 thousand, whil e the Company’s interest in TIKAR dropped to 0.408%.
    On 17 March 2010, the Group purchased 3,850 shares of Compa gnie des Alpes (SA), a French company traded on the Paris
    Stock exchange, operating in the area of ski resorts and summ er amusement parks. The Group purchased these shares as a
    financial investment. The shares were available for sale and were revalued at fair value into equity based on current stock mar ket
    prices. The Company sold shares in 2017. Their value as of 31 October 2017 represents EUR 0 thousand (as of 31 October 2016:
    EUR 64 thousand).
    25. Cash and cash equivalents
    in TEUR 31.10.2017 31.10.2016
    Cash 48 41
    Stamps and vouchers - -
    Current accounts with banks 9,536 7,452
    Total
    9,584 7,493
    The Group may freely dispose of the bank accounts.
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    26.
    Equity
    Share capital and share premium
    The share capital approved, subscribed and fully paid as of 31 October 2017 and 31 October 2016 comprised of 6,707,198
    ordinary shares in nominal value of EUR 7 per share as of 31 October 2017 and 31 October 2016.
    On 12 April 2010, the issues of shares designated as IS IN: CS0009011952, series 01,02, ISIN: SK1120002110, series 01, ISIN:
    SK1120005527, series 01, ISIN: SK1120006061, series 01, ISIN: SK1120009156, series 01 ceased and merged into a single
    issue of ISIN SK1120010287.
    On 28 April 2017, the annual General Meeting of Tatry mountain re sorts, a.s. was held. The General Meeting decided, inter alia,
    on the distribution of profit generated by Tatry mountain resorts, a.s. in the period from 1 November 2015 to 31 October 2016
    as recognised in the statutory separate financial statements prepared for that accounting, in the amount of EUR 4,814 thousand
    as follows:
    -
    A llocation to the Reserve Fund of EUR 481 thousand
    -
    Balance of EUR 4,333 thousand transferred to retained earnings of previous years
    The shareholders are entitled to receive dividends and the value of vote per share at General Meetings of the Company is defined
    as the ratio of the value of one share and the total amount of share capital. The following table includes shareholders of the
    Company with the number of shares, ownership interest and voting rights.
    31 October 2017 Number
    Ownership Voting
    of shares interest rights
    %
    %
    C.I. CAPITAL INDUSTRIES LIMITED 1,309,139
    19.5%
    19.5%
    FOREST HILL COMPANY, s.r.o. 1,030,919
    15.4%
    15.4%
    NIKROC INVESTMENTS LIMITED 897,771
    13.4%
    13.4%
    KEY DEE LIMITED 664,058
    9.9%
    9.9%
    TINSEL ENTERPRISES LIMITED 638,385
    9.5%
    9.5%
    RMSM1 LIMITED 588,166
    8.8%
    8.8%
    Minority shareholders 1,578,760
    23.5%
    23.5%
    Total 6,707,198100% 100%
    31 October 2016 Number
    Ownership Voting
    of shares interest rights
    %
    %
    C.I.CAPITAL INDUSTRIES LIMITED 1,262,139
    18.8%
    18.8%
    BELGOMET s.r.o. 1,030,919
    15.4%
    15.4%
    NIKROC INVESTMENTS LIMITED 897,771
    13.4%
    13.4%
    KEY DEE LIMITED 664,058
    9.9%
    9.9%
    TINSEL ENTERPRISES LIMITED 635,490
    9.5%
    9.5%
    RMSM1 LIMITED 588,166
    8.8%
    8.8%
    Minority shareholders 1,628,655
    24.2%
    24.2%
    Total 6,707,198100% 100%
    Profit per share
    31.10.201731.10.2016
    Profit attributable to the Group owners (in EUR’000)
    7,370
    3,061
    Weighted average number of ordinary shares
    6,707,198
    6,707,198
    Profit per share in euros
    1.099
    0.456
    Consolidated Financial Statements Consolidated Financial Statements


    136 137
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    26. Equity (continued)
    Legal reserve fund
    The legal reserve fund amounts to EUR 4,930 thousand (as of 31 October 2016: EUR 4,449 thousand). According to the Slovak
    legislation, a legal reserve fund shall be mandatorily created on
    an annual basis, in the minimum amount of 10% of the Company' s
    net profit and up to 20% of the subscribed share capital (on a cumulative basis). The legal reserve fund may be used only for t he
    settlement of the Company's losses and it cannot be used for payment of dividends. The calculation of the legal reserve fund is
    made in compliance with the Slovak legal regulations. The legal rese rve fund of the subsidiaries totals EUR 0 due to losses of
    prior periods. According to the Polish law the fund is mandatorily created on an annual basis; in the minimum amount of 8% of
    the Company's net profit and up to 33% of the subscribed share capital (on a cumulative basis).
    Reduction in the share capital
    On 22 August 2013, an extraordinary General Meeting was held, which decided on a reduction in the share capital of the
    Company Tatry Mountain Resorts, a.s. from EUR 221,338 t housand to EUR 46,950 thousand, i.e. by EUR 174,388 thousand.
    The change in the share capital became effective on 22 October 2013 as the day of registering the reduction in the share capita l
    with the respective Commercial Register. After the reduction of the Company’s share capital, the nominal value per share
    changed from the former EUR 33 per share to EUR 7 per share.
    Profit (loss) distribution
    For the financial year ending 31 October 2017, the Group’s management proposes to distribute the consolidated profit of EUR
    6,990 thousand as follows:
    A deposit to the reserve fund in the amount of EUR 922 thousand,
     Transfer of the remainder of EUR 6,068 thousand to the account of retained earnings.
    Change in the foreign currency translation reserve
    The foreign currency translation reserve includes all foreign ex change differences resulting from conversion of the financial
    statements of foreign companies Szczyrk and Ślaskie Wesole Miasteczko in Poland to euros.
    Non-controlling interest
    Non-controlling interests include a minority shareholder’s 3% share in the Szczyrk subsidiary (SON) and a minority
    shareholder’s 25% share in the Ślaskie Wesole Miasteczko subsidiary (SWM).
    in TEUR 31.10.2017 31.10.2016
    SWM 1,402 1,808
    SON 186 200
    Total 1,588 2,008
    in TEUR SWM SON Total
    Assets 19,487 25,936 45,423
    Liabilities -13,879 -19,733 -33,612
    Goodwill attributable to the Group 644 - 644
    Net assets, net of goodwill 5,608 6,203 11,811
    Percentage of non-controlling interest 25.00% 3.00%
    Book value of non-controlling interest 1,402 186 1,588
    Revenues 3,779 1,569 5,348
    Profit (loss) -1,435 -700 -2,135
    Other comprehensive income - - -
    Total comprehensive income -1,435 -700 -2,135
    Percentage of non-controlling interest 25% 3%
    Profit/(loss) attributable to the non-controlling interest -359 -21 -380
    Other comprehensive income attributable to the non-
    controlling interest - - -
    Net increase (decrease) of cash and cash equivalents -303 2,176 1,873
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    27.
    Loans and borrowings
    in TEUR 31.10.2017 31.10.2016
    Loans and borrowings received
    92,584 43,799
    Leasing
    1,894 1,304
    Total 94,478 45,103
    Short-term 9,880 6,996
    Long-term 84,598 38,107
    Total 94,478 45,103
    Received loans and borrowings as of 31 October 2017 a nd 31 October 2016 are shown in the following overview:
    Creditor Interest rate type
    Maturity date Unpaid amount
    as at
    31.10.2017 in TEUR
    Tatra banka, a.s.
    3M EURIBOR + average 2.79% p.a.
    30.9.2020 –
    31.12.2022
    46,500
    1. Tatranská a.s.
    12M EURIBOR + 10% p.a.
    5.4.2020
    20,887
    J&T Banka a.s.
    12M EURIBOR + 5% p.a.
    31.3.2032
    15,336
    Poštová banka, a.s.
    12M EURIBOR + 4.571% p.a.
    30.6.2022
    9,800
    Tatra-Leasing, s.r.o.
    3M EURIBOR + 2.5% p.a.
    2.2.2018
    21
    Heineken Slovensko a.s.
    -
    30.11.2018
    40
    Creditor Interest rate type
    Maturity date Unpaid amount
    as at
    31.10.2017 in TEUR
    Tatra banka, a.s.
    3M EURIBOR + average 2.5% p.a.
    30.9.2020
    42,480
    Tatra-Leasing, s.r.o.
    3M EURIBOR + 2.5% p.a.
    26.3.2017
    34
    Tatra-Leasing, s.r.o.
    3M EURIBOR + 2.5% p.a.
    17.12.2016
    15
    Tatra-Leasing, s.r.o.
    3M EURIBOR + 2.5% p.a.
    2.2.2018
    82
    PKO Bank Polski SA
    3M WIBOR + 2.5% p.a.
    31.3.2020
    1,138
    Heineken Slovensko a.s. -
    30.11.2018
    50
    The weighted average of interest rates for loans and borrowings received as at 31 October 2017 was 4.64%
    (as of 31 October 2016: 2.82%). The interest is payable on a monthly basis. For more information, see Note 12 – Interest income
    and expenses.
    In the period between 1 November 2016 and 31 October 2017, the loans granted by Tatra banka, a.s. were consolidated into a
    single loan in a total value of 60,500 ths. EUR. The unused por
    tion as at 31 October 2017 is 46,500 ths. EUR. In period between
    1 November 2016 and 31 October 2017, the Group drawn new loan fro m Poštová banka, a.s. in total amount of 10,000 ths. EUR.
    The balance of loan as at 31 October 2017 is 9,800 ths. EUR (a s at 31 October 2016: 0 ths. EUR). Furthermore the Group drawn
    new loan from J&T Banka a.s. with credit line in total amount of EUR 25,000 thousand, out of which drawn balance as at 31
    October 2017 together with accumulated interest is EUR 15,336 thousand. The loan covered investments in ski resort Szczyrk.
    For new investments in amusement park Legendia, the Group draw n new loan from company 1. Tatranská a.s. with credit line
    in amount of EUR 20,000 thousand. Drawn balance as at 31 October 2017 together with accumulated interest is EUR 20,888
    thousand.
    Consolidated Financial Statements Consolidated Financial Statements


    138 139
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    27. Loans and borrowings (continued)
    Security
    In order to guarantee bank loans, the following assets were used: lands, technology and service buildings of mountain lift
    equipment: ski lifts, chair cableways, terrestrial cableways,
    hanging cableways, cabin cableways, transformers, operating
    buildings and structures: Tri Studni čky Hotel, Srdie čko Hotel, Kosodrevina Hotel, Liptov Hotel, SKI Hotel, a former
    telecommunication building, bungalows as well as tangible asset of Polish ski resort Szczyrk. All movable assets of the Jasná a
    High Tatras resorts as well as trade receivables are pledged as well.
    As of 31 October 2017, property, plant and equipment, investme nts in real estate, inventories and receivables of EUR 252,875
    thousand were used to secure bank loans (as of 31 October 2016: in the amount of EUR 213,909 thousand).
    The maturity of financial lease liabilities as of 31 October 2017 was as follows:
    in TEUR Principal Interest Payments
    Less than 1 year
    807 39
    846
    1 - 5 years
    1,087 26
    1,113
    Total
    1,894 65 1,959
    The maturity of financial lease liabilities as of 31 October 2016 was as follows:
    in TEUR Principal Interest
    Payments
    Less than 1 year
    602 27
    629
    1 - 5 years
    702 16 718
    Total 1,304 43
    1,347
    28.Trade payables
    in TEUR 31.10.2017 31.10.2016
    Trade payables 9,381 6,818
    Unbilled deliveries 905 726
    Total 10,286 7,544
    Short-term 10,286 7,544
    Long-term - -
    Total 10,286 7,544
    As of 31 October 2017, past due liabilities amounted to EUR 832 thousand (as of 31 October 2016: EUR 689 thousand).
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    29.
    Other liabilities
    in TEUR 31.10.2017 31.10.2016
    Liabilities towards employees 3,159 2,881
    Advances received
    3,471 1,834
    Deferred revenues 3,429 2,970
    Liabilities to shareholders from reduction in share capital 215 218
    Other
    2,212 1,553
    Total 12,486 9,456
    Short-term 12,007 9,456
    Long-term 479 -
    Total 12,486 9,456
    As of 31 October 2017, advances received represent mainly advances for the purchase of chalets in the amount of EUR 892
    thousand (as of 31 October 2016: EUR 18 thousand), advances received for the Pošta Hotel suites in the amount of EUR 0
    thousand (as of 31 October 2016: EUR 664 thousand), and advances received for the accommodation in hotels in the amount of
    EUR 1,263 thousand (as of 31 October 2016: EUR 1,050 thousand).
    As of 31 October 2017, the liabilities to employees represent mainly a provision for bonuses for the financial year from 1
    November 2016 to 31 October 2017 in the amount of EUR 2,099 thousand (as of 31 October 2016: EUR 2,014 thousand), and
    wage liabilities to employees of EUR 1,060 thousand (as of 31 October 2016: EUR 812 thousand).
    As of 31 October 2017, the liabilities to shareholders from a reduction in the share capital represent EUR 215 thousand (as of 31
    October 2016: EUR 218 thousand) and contain mainly an outstanding liability from the reduction in the share capital in total of
    EUR 174,388 thousand. For more information on the reduction in the share capital, see Note 26 – Equity.
    As of 31 October 2017, the deferred income includes mainly the amount of EUR 2,687 thousand for accrual of the “Šikovná
    sezónka” ski passes sold (as of 31 October 2016: EUR 2,199 thousand), the amount of EUR 118 thousand is the rent for the
    premises of J&T BANKA, a.s., pobo čka zahranič nej banky, on the premises of Grandhotel Starý Smokovec (as of 31 October
    2016: EUR 163 thousand) and the amount of EUR 84 thousand is a subsidy for the Tri studni čky Hotel (as of 31 October 2016:
    EUR 87 thousand). The reserve for discounts on purchases was as at 31 October 2017 in total amount of 384 ths. EUR (384 ths.
    EUR as at 31 October 2016).
    As of 31 October 2017, the amount of other liabilities contains al so social security liabilities of EUR 652 thousand (as of 31
    October 2016: EUR 559 thousand).
    The formation and utilisation of social fund during the accounting period is shown in the following overview:
    in TEUR 31.10.2017 31.10.2016
    Balance as at 1.11.2016 / 1.11.2015 23 1
    Creation of social fund against expenses
    80 160
    Drawing -56 -138
    Balance as at 31.10.2017 / 31.10.2016 47 23
    Consolidated Financial Statements Consolidated Financial Statements


    140 141
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    30.
    Provisions
    in TEUR Unused
    vacations Other
    Total
    Opening balance as at k 1.11.2016 242 397 639
    Creation of provisions during the year 350 - 350
    Increase from subsidiary acquisition - - -
    Reversal of provisions during the year
    Use of provisions during the year -240 -376 -616
    Foreign exchange difference 1 1 2
    Balance as at 31.10.2017 / 31.10.2016 353 22 375
    31.10.2017 31.10.2016
    Short-term 351 482
    Long-term 24 157
    Total 375 639
    31. Bonds issued
    In the course of accounting period 2014, the Group made two bond issues in the total nominal value of EUR 180,000 thousand,
    which have been admitted to trading on the Bratislava Stock Exchange since 19 February 2014. For details on each bond, see
    the table below.
    in TEUR
    ISIN Date of
    issue Maturity
    date Initial
    currency
    of the issue Face value
    of the issue
    in the
    initial
    currency in '000 Interest
    rate p.a. in % Effective
    interest
    rate p.a. in % Carrying
    value as
    of 31.10.2017 Carrying
    value as
    of 31.10.2016
    Name
    TMR I
    4,50%/2018 SK41200
    09606 17.12.2013 17.12.2018 EUR 70,000 4.5 4.8 70,916 70,774
    TMR II
    6,00%/2021 SK41200
    09614 5.2.2014 5.2.2021 EUR 110,000 6 6.17
    113,926 113,928
    Total
    184,842 184,702
    Short-term 6,022 6,022
    Long-term 178,820 178,680
    Total 184,842 184,702
    Both the above bonds are book-entry securities in bearer form and the issue of the bonds was approved by the National Bank of
    Slovakia. The liability resulting from the TMR II bond is subordina te to the liability from the TMR I bond. The funds from both
    bonds were credited to the Group’s account on 11 February 2014 in total of EUR 180,582 thousand, including the aliquot interest
    income from the TMR I bond in the amount of EUR 582 thousand.
    The Company committed to maintain the ratio of senior debt (excluding the bonds TMR II) / EBITDA at the level up to
    6.5 and DSCR (including expenses related to payment of coupons of bonds TMR I and II) at the level of at least 1.00.
    Both tranches are obliged to pay coupons regularly, financed from the Company’s own resources. Coupons on the TMR
    II bonds may be paid out only once a year after presenting final audited consolidated financial statements to Tatra banka
    a.s. for the prior period, based on which the following covenant s must be met: (i) net profit after taxes will be higher than
    EUR 1.00 and (ii) index Senior debt (without bonds TMR II)/ EBITDA equals maximum 5.25. In case the covenants are
    not met, the coupon will be capitalized, i.e. not paid out, an d will further bear interest until: (i) the maturity date of TMR
    II, or (ii) the above-mentioned indicator of senior debt (excluding the bonds TMR II) / EBITDA is maximum 3.00 (but
    the DSCR covenant of minimum 1.00 must be met).
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    31. Bonds issued (continued)
    Out of the total liability value of EUR 184,842 thousand (as of
    31 October 2016: EUR 184,702 thousand), the short-term portion
    of EUR 6,022 thousand (as of 31 October 2016: EUR 6,022 thousand) is a coupon liability due in the course of 2017 and 2018.
    Security
    In order to secure the bonds issued, a pledge was created over the Group’s real estate in total of EUR 79,819 thousand. It
    concerns assets not used to secure other liabilities of the Group.
    32. Fair value information
    The following overview contains information about the carrying amount and fair value of the Group’s financial assets and
    liabilities, that are not accounted for in fair value:
    in TEUR Carrying value
    Fair value
    31.10.2017 31.10.2016
    31.10.2017 31.10.2016
    Financial assets
    Loans provided (Note 20) 23,950 28,871
    23,783 28,706
    Other receivables (Note 22) 21,699 22,480
    21,699 22,480
    Trade receivables (Note 21) 5,397 2,534
    5,397 2,534
    Cash and cash equivalents (Note 25) 9,584 7,493
    9,584 7,493
    Other assets (Note 23) 4,383 1,314
    4,383 1,314
    Total 65,01362,692
    64,846 62,527
    in TEUR Carrying value
    Fair value
    31.10.2017 31.10.2016
    31.10.2017 31.10.2016
    Financial liabilities
    Loans and borrowings (Note 27) 94,478 45,103
    98,444 45,592
    Bonds issued (Note 31) 184,842 184,702
    189,122 194,385
    Trade payables (Note 28) 10,286 7,544
    10,286 7,544
    Other liabilities (Note 29) 12,486 4,811
    12,486 4,811
    Total 302,092 242,160
    310,338 252,332
    As of 31 October 2017, other receivables contain the advance provided mainly for the future acquisition, i.e. the cableway
    operator, in the amount of EUR 19,451 thousand (as of 31 Octo
    ber 2016: EUR 19,451 thousand). The Group intends to buy that
    company in the future. The contract is concluded with AIRAVATA Holding s.r.o. for the period of one year and, therefore, the
    carrying amount of the advance provided does not materially differ from its fair value.
    Consolidated Financial Statements Consolidated Financial Statements


    142 143
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    33.
    Operating lease
    Lease on the part of the lessee
    The Group rents land with ski slopes and cableways and rents some vehicles based on the operating lease contracts. Major
    contracts for lease of lands are concluded for the period of 30 years with another 10-year option. The major contracts have 1-
    year notice period.
    Costs of operating lease for the period ending 31 October 2017 r ecognised in the profit or loss represented EUR 4,586 thousand
    (for the period ending 31 October 2016: EUR 2,711 thousand).
    The amount of rent for the period during which the contracts cannot be terminated is as follows:
    in TEUR 31.10.2017 31.10.2016
    Within 1 year 3,964 2,126
    From 1 year to 5 years 8,386 6,288
    5 and more years
    2,609 3,143
    Total 14,959 11,557
    34. Information about risk management
    This section provides details about the risks the Group is exposed to and about the method of management thereof.
    The Group is exposed to risk in the following areas:
    -Credit risk
    - Liquidity risk
    - Market risk
    - Operational risk
    The management is fully responsible for the establis hment and supervision of the Group’s risk management.
    Credit risk
    The Group’s primary exposure to credit risk arises through its trade receivables, lease receivables, other receivables and advances
    and loans provided. The amount of credit risk exposure is repres ented by the carrying amounts of these assets in the balance
    sheet if no form of guarantee is issued. The carrying amount of receivables, advances and loans provided represents the maximum
    accounting loss that would have to be recognised if the counterpa rty completely failed to perform its contractual obligations and
    all collaterals and guarantees would be of no value. Therefore, this value highly exceeds the expected losses included in the
    provision for unrecoverable receivables. Before the conclusion of major contracts, the Group’s management evaluates the credit
    risk related to the counterparty at its regular meetings. Provided material risks are identified, the Group withdraws from
    concluding the contract.
    As of 31 October 2017, the Group was exposed to the following credit risk:
    in TEUR
    Legal
    entities Banks Other
    financial
    institutions Other Total
    Financial assets
    Loans Provided 23,813 - - 137 23,950
    Other receivables 21,380 319 - - 21,699
    Trade receivables 5,397 - - - 5,397
    Financial investments 2,194 - - - 2,194
    Cash and Cash Equivalents - 9,536 - 48 9,584
    Other Assets 443 - 3,587 353 4,383
    Total 53,227 9,855 3,587 538 67,207
    Tatry mountain resorts, a.s.
    and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    34. Information about risk management (continued)
    As of 31 October 2016, the Group was exposed to the following credit risk:
    in TEUR
    Legal
    entities Banks Other
    financial
    institutions Other Total
    Financial assets
    Loans Provided 28,735 - - 136 28,871
    Other receivables 22,209 271 - - 22,480
    Trade receivables 2,534 - - - 2,534
    Financial investments 2,259 - - - 2,259
    Cash and Cash Equivalents
    - 7,480 - 13 7,493
    Other Assets
    13 - - 1,301 1,314
    Total 55,750 7,751 - 1,450 64,951
    Liquidity risk
    Liquidity risk arises in the general financing of the Group‘s activities and financial positions. It includes the risk of being unable
    to finance assets at an agreed maturity and interest rate an d inability to realize assets at a reasonable price in a reasonable time
    frame. Individual companies in the Group use different methods of managing liquidity risk. Group‘s Management focuses on
    managing and monitoring the liquidity of each company controlled by the Group. In order to manage liquidity, the management
    changed its accounting period to a financial year ending 31 October. In the first half of its accounting period the Group has t he
    winter season representing 60% of the Group‘s income. Based on th e development in the first half of the year, the Group is able,
    in good time, to affect the income and expenditures to maintain sufficient liquidity. In the Vysoké Tatry resort, seasonality i s
    compensated also by a strong summer season, providing for a more stable liquidity through the entire year.
    The following table includes an analysis of financial assets and liabilities of the Group classified by the remaining maturity. This
    analysis represents the most prudent alternative of the rema ining maturities including the interest. Therefore, the earliest
    repayment possible is reported for liabilities and the latest re payment possible is reported for assets. Assets and liabilities without
    a defined maturity are reported together in the "not specified" category.
    As of 31 October 2017, the Group was exposed to the following liquidity risk:
    in TEUR Carrying
    value Future
    cash flow Up to 3
    months 3 months up
    to 1 year 1 year up
    to 5 years Above 5
    years Without
    specification
    Financial assets
    Loans Provided 23,950 24,273 14,193 7,977 1,250 853 -
    Other receivables 21,699 319 - 319 - - -
    Trade receivables 5,397 5,532 5,518 14 - - -
    Financial investments 2,194 2,194 - - - - 2,194
    Cash and Cash Equivalents 9,584 9,483 6,062 - - - 3,421
    Other Assets 4,383 4,383 2,762 - - - 1,621
    Total 67,207 46,184 28,535 8,310 1,250 853 7,236
    Financial obligations
    Loans and Borrowings
    -94,478 -104,478 -1,283 -8,567 -84,803 -9,825 -
    Bonds Issued -184,842 -211,119 -1,575 -8,175 -201,369 - -
    Trade Liabilities -10,286 -10,423
    -10,383 - - - -40
    Other Liabilities -12,486 -12,118 -11,256 - - - -862
    Total -302,092 -338,138 -24,497 -16,742 -286,172 -9,825 -902
    Consolidated Financial Statements Consolidated Financial Statements


    144 145
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    34. Information about risk management (continued)
    As of 31 October 2017, loans granted for up to 1 year amoun
    t to EUR 21,307 thousand (As of 31 October 2016: EUR 27,552
    thousand), most of which are payable at request or until Octobe r 2018. These loans will not be paid off within a year. The Grou p
    plans to draw these financial resources according to its needs in order to finance its investment activity and acquisitions. The
    loan granted is expected to be paid off within 3 years. The carrying amount of Other receivables includes the advances provided
    where they are not expected to be settled in cash, but by means of a transfer of shares within 3 years.
    As of 31 October 2016, the Group was exposed to the following liquidity risk:
    in TEUR Carrying
    value Future
    cash flow Up to 3
    months 3 months up
    to 1 year 1 year up
    to 5 years Above 5
    years Without
    specification
    Financial assets
    Loans Provided 28,871 29,760 2,844 24,708 2,208 - -
    Other receivables 22,480 1,145 874 271 - - -
    Trade receivables 2,534 2,534 2,534
    - - - -
    Financial investments 2,259 2,259 - - - - 2,259
    Cash and Cash Equivalents 7,493 7,493 5,946 - - - 1,547
    Other Assets 1,314 1,536 1,083 - - - 453
    Total 64,951 44,727 13,281 24,979 2,208 - 4,259
    Financial obligations
    Loans and Borrowings
    -45,103 -47,825 -1,337 -6,537 -39,951 - -
    Bonds Issued -184,702 -220,875 -1,575 -8,175 -211,125 - -
    Trade Liabilities -7,544 -7,544
    -7,544 - - - -
    Other Liabilities -4,811 -4,811 -4,695 - - - -116
    Total -242,160 -281,055 -15,151 -14,712 -251,076 - -116
    The carrying amount of other receivables includes the advances pr ovided where they are not expected to be settled in cash, but
    by means of a transfer of shares.
    Foreign exchange risk
    Because of the acquisition of subsidiaries in Poland during 2014 and 2015, the Group is primarily exposed to foreign exchange
    risk of Polish zloty versus euro. The Management regularly m onitors whether the difference between receivables and payables
    in the foreign currency is not too big. As of 31 October 2017 , the Group recognised property, plant and equipment in total of
    EUR 52,288 thousand (2016: EUR 16,418 thousand), intangible as sets of EUR 7,158 thousand (2016: EUR 6,862 thousand),
    other assets of EUR 19,375 thousand (2016: EUR 4,126 thousa nd), loans received of EUR 28,789 thousand (2016: EUR 1,138
    thousand), deferred tax liability of EUR 907 thousand (2016: EUR 2,029 thousand) and other liabilities in total of EUR 3,928
    thousand (2016: EUR 1,255 thousand) originally denominated in Polish zloty. Other assets and liabilities of the Group are
    denominated in euros. There is a secondary risk that the weaken ing of the Polish zloty or Russian rouble against the euro would
    lead to a reduction in the number of visitors to Slovakia from these countries. The Group’s management is not able to quantify
    value of this risk for sure.
    Sensitivity analysis
    Appreciation of euro by 1% versus Polish zloty would have the following impact on financial assets and financial liabilities of
    the Group:
    Effect on the portfolio in TEUR 2017 2016
    PLN 516 -995
    Depreciation of euro by 1% versus Polish zloty would have a comparably large but opposite impact on financial assets and
    financial liabilities of the Group as opposed to appreciation.
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    34. Information about risk management (continued)
    Interest rate risk
    The Group’s operations are subject to the risk of interest rate fluctuations. The volume of this risk equals the sum of interes t-
    earning assets and interest-bearing liabilities for which the interest rate differs at maturity or re-pricing compared to curre nt
    interest rates. The period for which the interest rate of a financial instrument is fixed therefore indicates to what extent th e Group
    is exposed to interest rate risk.
    The overview below provides information about the extent of the Group’s interest rate exposure based on the contractual maturit y
    date of its financial instruments.
    As of 31 October 2017 and 31 October 2016, the Group has the follo wing interest-earning assets and interest-bearing liabilities:
    in TEUR
    31.10.2017 31.10.2016
    Fixed interest rate
    Assets
    32,501 36,364
    Payables
    184,842 184,702
    Variable interest rate Assets
    - -
    Payables
    94,438 45,053
    Sensitivity analysis for instruments with variable interest rate
    A change of 100 basis points in interest rates would have the following effect on profit or loss and cash flow sensitivity:
    in TEUR Profit (Loss)
    100 bb growth 100 bb decline
    31 October 2017
    Instruments with variable interest rate -944 934
    Effect -944 934
    in TEUR Profit (Loss)
    100 bb growth 100 bb decline
    31. October 2016
    Instruments with variable interest rate -451 451
    Effect -451 451
    Interest-bearing liabilities of the Group bear variable intere st rates based on EURIBOR and WIBOR. The Group considers a
    variable interest rate to be a self-management of the interest rate risk. EURIBOR grows under economic expansion,
    but also the economic performance of the population grows and the Group has higher revenues and earnings. It is quite the
    opposite under economic recession.
    Operational risk
    Operational risk is the risk of loss arising from embezzlement, unauthorised activities, error, omission, inefficiency or system
    failure. This risk arises in the case of all of the Group’s act ivities and all companies within the Group are exposed to such r isk.
    Operational risk includes also the risk of lawsuit.
    The Group’s objective is to manage the operational risk so as to prevent financial losses and damage to Group’s reputation
    within the effectiveness of costs spent to achieve this objectiv e, while avoiding measures hindering initiative and creativity. The
    primary responsibility for the implementation of controls to a ddress operational risk is assigned to the Group’s management.
    This responsibility is supported by preparation of standards fo r management of operational risk applicable for the whole Group.
    Operational risk is managed by a system of directives, minutes from meetings and control mechanisms. The Group has a
    controlling department established, where it tries to eliminate all operational risks by way of regular checks.
    Consolidated Financial Statements Consolidated Financial Statements


    146 147
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    34. Information about risk management (continued)
    The Group is also exposed to risk of adverse weather-related c
    onditions. The resort attendance is dependent on the volume and
    period of snow. Adverse conditions negatively affect the number of skiers and the Group’s revenues or profit or loss. Warm
    weather may disproportionately increase the cost of production of artificial snow and change the area for skiing. Historically,
    the region of the Low Tatras had an average of 80 cm of snow during the winter season and the High Tatras region had 85 cm
    of snow. The start of the winter season and the snow conditions affect the perception of the whole season by skiers. The Group
    is unable to reliably predict the snow conditions at the beginning of the winter season. Thanks to the use of snow-making systems,
    snow conditions during the winter season are stable every year.
    35. Related parties
    Identification of related parties
    As shown in the following overview, the Group has a related-pa rty relationship with its shareholders who have significant
    influence in the Group and other parties; as of 31 October 2017 and 31 October 2016 or during the period from 1 November
    2016 to 31 October 2017 and 1 November 2015 to 31 October 2016:
    (1) Companies with joint control or significant influence over the entity and its subsidiaries or associates
    (2)
    Joint ventures in which the Group is a partner
    (3)
    Associates
    (4)
    Members of the company's top management or shareholders of the Group (see also Note 10 – Personnel expenses)
    Information about remuneration of key management is provided in Note 10 – Personnel expenses.
    Apart from personnel expenses, the Group has receivables towards key management as of 31 October 2017 EUR 68 thousand
    (2016: EUR 68 thousand), due the loans provided and revenues from these loans in amount of EUR 2.5 thousand for the
    accounting period 2017 (2016: EUR 2.5 thousand).
    Since none of the shareholders has an ownership exceeding 20% or otherwise has significant influence in the Group, shareholders
    are not recognised as related parties, and the transactions ment ioned above or any balances are not understood as transactions
    with related parties.
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    36.
    Subsequent events
    On 13 December 2017, the Group paid the coupon of the TMR I bond in the amount of EUR 1,575 thousand.
    On 5 February 2018, the Group paid the coupon of the TMR II bond in the amount of EUR 6,600 thousand.
    37. Capital commitments and capital management
    In the course of 2014, the Group made two bond issues (see Note 31 - Bonds issued) in the total nominal value of EUR 180,000
    thousand, which have been admitted to trading on the Bratislava Stock Exchange since 19 February 2014. The Company
    committed to maintain the ratio of senior debt (excluding the bonds TMR II) / EBITDA at the level up to 6.5 and DSCR (including
    expenses related to payment of coupons of bonds TMR I and II) at the level of at least 1.00.
    Both tranches are obliged to pay coupons regularly, financed from the Company’s own resources. Coupons on the TMR II bonds
    may be paid out only once a year after presenting final audited consolidated financial statements to Tatra banka a.s. for the p rior
    period, based on which the following covenants must be met: (i) net profit after taxes will be higher than EUR 1.00 and (ii)
    senior debt/ EBITDA equals maximum 5.25. In case the covenants are not met, the coupon will be capitalized, i.e. not paid out,
    and will further bear interest until: (i) the maturity date of TM R II, or (ii) the above-mentioned indicator of senior debt (excluding
    the bonds TMR II) / EBITDA is maximum 3.00 (but the DSCR covenant of minimum 1.00 must be met).
    Consolidated Financial Statements Consolidated Financial Statements


    148 149
    Consolidated Financial Statements
    Tatry mountain resorts, a.s. and Subsidiary Companies
    Notes to the Consolidated Financia l Statements for the Period from 1 November 2016 to 31 October 2017
    37. Capital commitments and capital management
    The Group's management deals with capital management in orde
    r to secure a sufficient amount of funds for the planned
    investments in the period for which the investments were planned, if necessary in cooperation with bank loans. Neither the Group
    nor any of its subsidiaries, are subject to any external capital management requirements.
    No changes occurred in the approach of the Group's management to capital management occurred in the period from 1 November
    2016 to 31 October 2017.
    38. Contingent assets and contingent liabilities
    Since many areas of the Slovak tax legislation have yet to be sufficiently tested in practice, there is an uncertainty
    about the application of the tax legislation in these areas by tax authorities. The extent of the uncertainty cannot be quantified
    and will only cease once legislative precedents or official interpretations of the authorities are set.
    On 31 October 2007, the Group concluded a Contract on Pledge over the enterprise, receivables and movables in favour of the
    creditor Tatra banka a.s., the subject-matter of which is the pl edge over liabilities in the full amount of the liabilities as they are
    recognised in the balance sheet as of 31 October 2016 and of 31 October 2017.
    The Company is a party to several legal disputes. The maximum amount of compensation for all legal disputes can amount up
    to EUR 517 thousand plus related charges and fees.
    39. Companies within the Group
    The list of companies in the Group as of 31 October 2017 and 31 October 2016 is included in the following overview:
    31.10.2017 31.10.2016
    Country Method Consol. % Control Consol. % Control
    Tatry mountain resorts, a.s. Slovakia full 100
    100
    Szczyrkowski O środek Narciarski, S.A. Poland full 97 direct 97 direct
    Ś laskie Wesole Miasteczko Sp. z o. o. Poland full 75 direct 75 direct
    Tatry mountain resorts PL, a.s. Slovakia full 100 direct - -
    Tatry mountain resorts CR, a.s. Czech full 100 direct - -
    ............................................................................................................................... .....................................................
    Bohuš Hlavatý
    Jozef Hodek Tomáš Kimli čka Marián Vojtko
    Chairman Member Person responsible for Person responsible for
    of the Board of Directors of the Board of Directors preparation of the statements bookkeeping
    Independent Auditor‘s Report
    Consolidated Financial Statements


    150 151
    Independent Auditor‘s Report
    Consolidated Financial Statements Consolidated Financial Statements
    Independent Auditor‘s Report


    152 153
    Consolidated Financial Statements Consolidated Financial Statements
    Independent Auditor‘s Report Independent Auditor‘s Report


    154 155
    Separate
    Financial Statements
    Tatry mountain resorts a.s.
    Individual Financial Statement
    for the Period from 1 November 2016 to 31 October 2017
    prepared in accordance
    with the International Financ ial Reporting Standards (“IFRS”)
    Standards (“IFRS”) as adopted by the EU
    Tatry mountain resorts a.s.
    Separate statement of profit and loss and other comprehensive income
    in TEUR Note 1.11.2016 - 31.10.2017 1.11.2015 - 31.10.2016
    Sales 6 90,393 77,921
    Other operating revenue
    7 171 481
    Total revenue 90,564 78,402
    Material and goods consumption 8 -15,639 -12,733
    Purchased Services
    9 -19,919 -18,904
    Personal cost
    10 -22,901 -20,522
    Other operating cost
    11 -827 -848
    Gain on sale of assets
    1,011 797
    Increase in fair value of investment property
    17 - -
    Creation of value adjustments to receivables
    22 -19 -90
    Profit before interest, taxes, depreciation and amortization
    (EBITDA)*
    32,270 26,102
    Depreciation and amortization
    15,16 -12,600 -12,054
    Goodwill impairment loss
    16 - -
    Profit before interest, taxes (EBIT)
    19,670 14,048
    Interest income
    12 2,775 1,601
    Interest expense
    12 -11,694 -10,929
    Net profit on financial instruments
    13 29 1,674
    Profit before taxes 10,780 6,394
    Income tax
    14 -1,557 -1,580
    Profit / (Loss)
    9,223 4,814
    Other components of comprehensive income
    Items with possible subsequent reclassification into profit/(loss)
    Revaluation of available-for-sale securities to fair value 14 35 -
    Total comprehensive income 9,258 4,814
    Profit per share (in EUR) 27 1.375 0.718
    Number of shares 6,707,198 6,707,198
    *EBITDA represents a profit from recurring Company activities befo re taxes, interest, amortization and depreciation, adjusted
    to other income and expenses, which are listed under EBITDA.
    The Notes constitute an integral part of the Separate Financial Statements. An overview of the profit and loss statement by
    particular segments is in par. 4 – Information on Operating Segments.
    Separate Financial Statements


    156 157
    Separate Financial Statements Separate Financial Statements
    Tatry mountain resorts a.s.
    Separate Statement of Financial Position
    in TEUR Note 31.10.2017 31.10.2016
    Assets
    Goodwill and Intangible Assets
    16 6,952 7,151
    Property, Plant and Equipment
    15 274,877 259,627
    Investments Property
    17 6,554 6,554
    Loans Provided
    21 35,397 7,542
    Other receivables
    23 2,656 7,829
    Investments in Subsidiaries
    18 14,743 14,641
    Fixed assets total
    341,179 303,344
    Inventory 20 5,763 5,551
    Trade receivables
    22 5,387 2,524
    Loans Provided
    21 21,307 31,042
    Other receivables
    23 24,179 20,037
    Financial investments
    25 2,194 2,259
    Cash and Cash Equivalents
    26 6,062 5,946
    Other Assets
    24 476 1,062
    Total current assets
    65,368 68,421
    Assets total 406,547 371,765
    Equity 27
    Capital
    46,950 46,950
    Share premium
    30,430 30,430
    Profit for the period
    9,223 4,814
    Retained earnings and other funds
    28,746 23,897
    Total equity
    115,349 106,091
    Liabilities
    Loans and Borrowings
    28 56,567 37,254
    Provisions
    31 24 157
    Other non-current liabilities
    30 - -
    Bonds Issued
    32 178,820 178,680
    Deferred tax liability
    19 21,450 20,523
    Total non-current liabilities
    256,861 236,614
    Loans and Borrowings
    28 9,122 6,711
    Trade payables
    29 7,989 6,794
    Provisions
    31 307 217
    Bonds Issued
    32 6,022 6,022
    Other current liabilities
    30 10,897 9,316
    Total current liabilities
    34,337 29,060
    Total liabilities 291,198 265,674
    Total equity and liabilities 406,547 371,765
    The Notes constitute an integral part of the Separate Financial Statements.
    Tatry mountain resorts a.s.
    Separate Statement of Changes in Equity in TEUR
    Capital
    Share
    premium
    Legalreserve fund
    Funds from revaluation
    Retainedearnings
    Total
    Balance as at 1 November 2016
    46,950 30,430 4,449 145 24,117 106,091
    Transfer of retained earnings into the legal reserve fund
    -
    - 481 -
    -481
    -
    Profit for the period
    - - - - 9,223
    9,223
    Other components of comprehensive income, after tax
    - items with possible subsequent reclassification into profit/(loss):
    Revaluation of available-for-sale securities at fair value
    - - - 35- 35
    Total comprehensive income for the period
    - -
    481 35 8,742 9,258
    Transactions with owners posted directly into equity
    Contributions to the fund
    - - - ---
    Total transactions during the year
    - - - ---
    Balance as at 31 October 2017
    46,950 30,430 4,930 180 32,859 115,349



    158 159
    Separate Financial Statements Separate Financial Statements
    Tatry mountain resorts a.s.
    Separate Cash Flow Statement
    in TEUR Note 1.11.2016 - 31.10.2017 1.11.2015 - 31.10.2016
    OPERATING ACTIVITIES
    Profit
    9,223 4,814
    Adjustments related to:
    (Profit) from the sale of land, buildings and equipment and
    -1,011 -797
    intangible assets
    Depreciation and amortization
    15,16 12,600 12,054
    Creation of value adjustments to receivables
    19 90
    Loss / (profit) from financial instruments, net (non-monetary part)
    13 - -2,026
    (Profit) / Loss from revaluation of investments in property
    17 -29 -
    Net interest expense / (income)
    12 8,919 9,328
    Gross change in provisions
    -43 229
    Income tax
    14 1,557 1,580
    Change in trade receivables, other
    -1,848 2,670
    receivables and other assets
    Variation in inventory
    -212 -215
    Change in trade liabilities and other liabilities
    2,776 2,436
    Cash flow from operating act ivity before income tax
    31,951 30,163
    Income tax paid -21 -12
    Cash flow from operating activities
    31,930 30,151
    INVESTING ACTIVITIES
    Acquisition of land, buildings and equipment and intangible assets
    15,16 29,095 -20,511
    Proceeds from sale of property, plant and equipment and intangible
    assets
    2,455 2,190
    Cost of acquisition of subsidiaries
    5 -102 -
    Loans Provided
    -47,740 -13,427
    Repayment of loans provided
    31,742 7,805
    Expenses for acquisition of financial investments
    25 - -1
    Income from the sale of financial investments
    25 103 153
    Interest receivable
    653 35
    Cash flow from / (used by) investing activities
    -41,984 -23,756
    FINANCING ACTIVITIES
    Repayment of liabilities from financial leasing
    -1,018 -1,048
    Financial leasing received
    1,498 1,176
    Repayment of received loans and borrowings
    -9,330 -26,756
    Loans and borrowings received
    30,310 29,030
    Repayment of liability from reduction of share capital
    - -
    Bonds Issued
    - -
    Interest paid
    -11,290 -10,915
    Dividends paid
    - -
    Cash flow from / (used by) financing activities
    10,170 -8,513
    Net increase /(decrease) of cash and cash equivalents 116 -2,118
    Cash and cash equivalents at the beginning of the year
    26 5,946 8,064
    Cash and cash equivalents at the end of the year
    26 6,062 5,946
    The Notes constitute an integral part of the Separate Financial Statements.
    Tatry mountain resorts a.s.
    Separate Statement of Change
    s in Equity (continued)
    in TEUR
    Capital
    Share
    premium
    Legalreserve fund
    Funds from revaluation
    Retainedearnings
    Total
    Balance as at 1 November 2015
    46,950 30,430 4,448 145 19,303 101,276
    Transfer of retained earnings into the legal reserve fund
    -
    -
    1
    -
    -1
    -
    Profit for the period
    - - - - 4,814
    4,814
    Other components of comprehensive income, after tax
    - items with possible subsequent reclassification into profit/(loss):
    Revaluation of available-for-sale securities at fair value
    - - - --
    -
    Total comprehensive income for the period
    - - 1
    - 4,813 4,814
    Transactions with owners posted directly into equity
    Contributions to the fund
    - - - ---
    Total transactions during the year
    - - - --
    -
    Balance as at 31 October 2016
    46,950 30,430 4,449 145 24,117 106,091
    The Notes constitute an integral part
    of the Separate Financial Statements.


    160 161
    Separate Financial Statements Separate Financial Statements
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    1.Information about the Company
    Tatry mountain resorts a.s. (hereinafter referred to as the “Company”) is a joint stock company with the registered office and
    place of business in Demänovská Dolina 72, Liptovský Mikuláš 031 01. The company was established on 20 March 1992 and
    was registered in the Commercial Register on 1 April 1992. The Company identification number is 31 560 636 and the
    Company tax identification number is 2020428036.
    The Company is not a member having unlimited liability in other accounting entities.
    Starting from 19 November 1993, the Company shares are regi stered on the Bratislava Stock Exchange; starting from 15
    October 2012, on the Warsaw Stock Exchange (WSE), and st arting from 22 October 2012, on the Prague Stock Exchange
    (BCCP). On 22 August 2013, an extraordinary general meeting was held, which decided on a reduction in the share capital of
    the Company Tatry Mountain Resorts, a.s. from 221 338 ths. EU R to 46 950 ths. EUR, i.e. by 174 388 ths. EUR. Then during
    2014, the Company issued two bond issues in the total nominal value of 180 000 ths. EUR, which, starting from 19 February
    2014, are admitted to trading on the Bratislava Stock Exchange. See par. 32 - Bonds issued.
    In 2009, the Company decided to change the accounting period from a calendar year to a fiscal year from 1 November
    to 31 October. Such a change was aimed at making the period more realistic as the Company activity depends on seasonal
    fluctuations.
    On 1 May 2013, the parent company Tatry mountain resorts, a.s. and subsidiaries GRANDHOTEL PRAHA a.s., Interhouse
    Tatry s.r.o. and Tatry mountain resorts services, a.s, merged. On that day, the company Tatry mountain resorts, a.s. became the
    successor company, and assumed all legal, trade and other liabiliti es, as well as the assets of its subsidiaries. All subsidiaries
    ceased to exist by the merger with the parent company, and then were expunged from the Commercial Register.
    As at 31 October 2017 and 31 October 2016, the Shareholders structure of the Company was as follows:
    31 October 2017 Share in share
    Voting
    capital rights
    in TEUR
    % %
    C.I. CAPITAL INDUSTRIES LIMITED 9,164
    19.5% 19.5%
    FOREST HILL COMPANY, s.r.o. 7,216
    15.4% 15.4%
    NIKROC INVESTMENTS LIMITED 6,284
    13.4% 13.4%
    KEY DEE LIMITED 4,648
    9.9% 9.9%
    TINSEL ENTERPRISES LIMITED 4,469
    9.5% 9.5%
    RMSM1 LIMITED 4,117
    8.8% 8.8%
    Minority shareholders 11,05223.5% 23.5%
    Total 46,950100% 100%
    31 October 2016 Share in share
    Voting
    capital rights
    in TEUR % %
    C.I.CAPITAL INDUSTRIES LIMITED 8,835
    18.8% 18.8%
    BELGOMET s.r.o. 7,216
    15.4% 15.4%
    NIKROC INVESTMENTS LIMITED 6,284
    13.4% 13.4%
    KEY DEE LIMITED 4,648
    9.9% 9.9%
    TINSEL ENTERPRISES LIMITED 4,448
    9.5% 9.5%
    RMSM1 LIMITED 4,117
    8.8% 8.8%
    Minority shareholders 11,40124.3% 24.3%
    Total 46,950100% 100%
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    1. Information about the Company
    2. Significant accounting policies
    3. Significant Accounting Estimates and Assumptions
    4. Information about Operating Segments
    5. Increase and Decrease of Shares in Companies
    6. Revenue
    7. Other operating revenue
    8. Consumption of Material and Goods
    9. Purchased Services
    10. Personnel Expenses
    11. Other operating cost
    12. Interest Income and Expense
    13. Net Profit from Financial Instruments
    14. Income Tax and Deferred Tax
    15. Property, Plant and Equipment
    16. Goodwill and Intangible Assets
    17. Investments Property
    18. Investments in Subsidiaries
    19. Deferred Tax Asset, Deferred Tax Liability
    20. Inventory
    21. Loans Provided
    22. Trade receivables
    23. Other receivables
    24. Other Assets
    25. Financial investments
    26. Cash and Cash Equivalents
    27. Equity
    28. Loans and Borrowings
    29. Trade Liabilities
    30. Other Liabilities
    31. Provisions
    32. Bonds Issued
    33. Data on Fair Value
    34. Operating Lease
    35. Information on Risk Management
    36. Related Parties
    37. Subsequent Events
    38. Capital Commitments and Capital Management
    39. Contingent Assets and Contingent Liabilities



    162 163
    Separate Financial Statements Separate Financial Statements
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    2.Significant accounting policies
    (a) Statement of compliance
    The separate financial statements for the period from 1 November 2016 to 31 October 2017 have been prepared in accordance
    with the International Financial Reporting Standards (“IFRS”) as adopted by the EU and in accordance with Art 17a), par. 3 of
    Act No. 431/2002 Coll. of the National Council of the Slovak Republic on Accounting (“Act on Accounting”).
    Since the company has share in subsidiaries, IFRS and the Act on Accounting require the preparation of consolidated financial
    statement. The company has not consolidated its subsidiaries in this separate financial statement. The investments in
    subsidiaries are recognized at cost (net of impairment losses, if any) and dividend returns are recognized at the moment when
    the Company became entitled to receiving dividends from those companies. The Company applies similar treatment to
    associates. The Company prepares consolidated financial statements that shall be published by the end of February 2018 and
    that shall be available at the Company headquarters and on the Company's website.
    The financial statements were approved by the Board of Directors on 26 February 2018.
    (b) Basis of preparation
    The separate financial statements have been prepared based on the historical cost principle, while the investment property and
    financial instruments measured at fair value were revalued to their fair value through profit or loss. Available-for-sale secur ities
    were revalued to their fair value through other comprehensive income.
    The Company's separate financial statements have been prepared on a going-concern basis.
    On 17 December 2018, the Company will pay out the bond in amount of EUR 71,575 thousand including coupon. The amount
    of bond liability was EUR 69,752 thousand as at 31 October 2017. The management of the Company plans to issue a new
    bond, which will be used to refinance the original bond, to maintain financial stability.
    The separate financial statements have been prepared in thousands EUR.
    The preparation of financial statements in compliance with the International Financial Reporting Standards as adopted by the
    EU requires the application of various judgements, assumptions and estimates which affect the reported amounts of assets,
    liabilities, income and expenses. However, actual results will likely differ from these estimates. Critical accounting estimate s
    and judgements which were made by management and which bear a significant risk of material adjustment in the next
    accounting period are discussed in Note 3– Critical accounting estimates and assumptions.
    The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized
    in the period in which the estimate is revised if the revision affects only that period or in the period of revision and also i n
    future periods if the revision aff ects both current and future periods.
    When preparing the separate financial statements, the Company applied the following International Financial
    Reporting Standards, amendments to the standards and int erpretations as adopted by the EU, which are effective for
    the accounting period starting 1 November 2016:
    The application of the standards mentioned below has had no significant impact on the Company's financial statements..
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    1. Information about the Company (continued)
    The principal activities of the Company comprise the operation of cable ways and ski lifts, restaurant and catering services, the
    operation of a ski and snowboard school, the purchase and sale of goods, hotel business. Since 29 March 2011, the Company
    has operated Aquapark Tatralandia, thus expanding the portf olio of services rendered. During 2014 and 2015 the Company
    acquired interests in subsidiaries in Poland that operate th e Szczyrk ski resort and an amusement park in Chorzow.
    In the period between 1 November 2016 and 31 October 2017, the average number of Company employees was 1,131, of
    which
    the management was 25 (between 1 November 2015 and 31 October 2016, it was 974, of which the management was 25).
    During the year, the Company used the services of employment agencies for short-term personnel leasing. In the period
    between 1 November 2016 and 31 October 2017 it was 254 employees in average (between 1 November 2015 and 31 October
    2016: 139 employees).
    Company bodies are:
    The Board of Directors
    Ing. Bohuš Hlavatý, the Chairman (since 30.6.2009)
    Ing. Branislav Gábriš, the Vice-Chairman (since 18.2.2011)
    Ing. Andrej Deve čka, the Member (since 22.12.2011)
    Ing. Jozef Hodek, the Member (since 30.6.2009)
    The Supervisory Board:
    Ing. Igor Rattaj (since 29.6.2009)
    Ing. František Hodorovský (since 18.1.2011)
    Roman Kudlá ček (since 21.4.2012)
    Ing. Ján Štetka (since 30.6.2012)
    Ing. Peter Kube ňa (since 30.6.2012)
    Miroslav Roth (since 30.6.2012)
    Ing. Pavol Mikušiak (since 27.4.2013)
    Adam Tomis (since 12.4.2014)
    PhDr. Martin Kopecký, MSc, CFA (since 25.4.2015)



    164 165
    Separate Financial Statements Separate Financial Statements Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    In May 2014, IASB issued IFRS 15 Revenue from Contracts with Customers , effective for the periods starting on 1
    January 2018 with earlier adoption permitted. IFRS 15 defines the principles for accounting for revenues and will be applicable
    to all contracts concluded with customers. The new Standard provides a framework that replaces existing revenue recognition
    guidance in IFRS. Entities will adopt a five-step model to determine when to recognise revenue, and at what amount. The new
    model specifies that revenue should be recognised when (or as) an entity transfers control of goods or services to a customer at
    the amount to which the entity expects to be entitled. Depending on whether certain criteria are met, revenue is recognised:
    over time, in a manner that depicts the entity’s performance; or
     at a point in time, when control of the goods or services is transferred to the customer.
    IFRS 15 also establishes the principles that an entity shall apply to provide qualitative and quantitative disclosures which
    provide useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and
    cash flows arising from a contract with a customer.
    Management is still evaluating the possible impact of IFRS 15 on the financial statements of the Company, however the
    Company does not expect that first time adoption of the standard will have significant impact on the financial statements.
    Management of the Company does not expect, that the moment when revenue is recognised and in what amount will changed
    based on the IFRS 15, due to the nature and types of revenue that the Company has.
    IFRS 16 Leases was issued in January 2016 and replaces IAS 17 Leases, IFRIC 4 Determining whether an Arrangement
    contains a Lease, SIC-15 Operat ing Leases – Incentives and SIC-27 Evaluating the Substance of Transactions Involving the
    Legal Form of a Lease. The Standard eliminates the current dual accounting model for lessees and instead requires companies
    to bring most leases on-balance sheet under a single model, eliminating the distinction between operating and finance leases.
    Under IFRS 16, a contract is, or contains, a lease if it conveys the right to control the use of an identified asset for a peri od of
    time in exchange for consideration. For such contracts, the new model requires a lessee to recognise a right-of-use asset and a
    lease liability. The right-of-use asset is depreciated and the li ability accrues interest. This will result in a front-loaded pattern of
    expense for most leases, even when the lessee pays constant annual rentals.
    The new Standard introduces a number of limited scope exceptions for lessees which include:
    leases with a lease term of 12 months or less and containing no purchase options, and
     leases where the underlying asset has a low value (‘small-ticket’ leases).
    Lessor accounting, however, shall remain largely unchanged and the distinction between operating and finance leases will be
    retained.
    IFRS 16 is effective for the accounting periods beginning on or after 1 January 2019. Earlier application of the standard is
    permitted if the new IFRS 15 will also be efficient. Lessee has to apply IFRS 16 either by using the full retrospective approach
    or the modified retrospective approach. It is expected, that first time adoption of the standard will have significant impact o n
    the financial statements, as it is required to recognise assets and liabilities from operating leases in statement of financial
    position, where the Company act as a lessee. This applies mainly on operating lease of lands. The quantitative impact analysis
    of the new standard is not known yet.
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    Amendment of IAS 1 Disclosure Initiative , applicable for the accounting periods starting on 1 January 2016 or later.
    Amendment of IAS 1 clarifies the existing requirements, without significantly changing them. The amendment clarifies:
    Requirements for relevance in IAS 1.
     Certain items in the profit and loss statement and other parts of the complex result as well as in the statement of
    financial situation may be segmented.
     The accounting units may determine flexibly the order of accounting for notes to financial statements.
     The share in other parts of the complex result of associates and joint ventures accounted for under the equity method
    has to be accounted for aggregate as a single item and classified among the items that will or will not be subsequently
    reclassified in profit or loss.
    Furthermore, the amendment explains the requirements for additional accounting for partial results in the financial situation
    statement and in the profit and loss statement as well as other parts of the complex result. These amendments have no effect on
    the Company.
    Changes and amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation ,
    applicable for the accounting periods starting from 1 January 2016 or later. The amendment clarifies the principles of IAS 16
    Property, Plant and Equipment and IAS 38 Intangible Assets ,according to which the revenues reflect the economic benefits
    originating by the use of assets. As a result, the yield method cannot be used for depreciation of property, plant and equipmen t
    and may be only used for depreciation of intangible assets under very exceptional circumstances. The amendment becomes
    valid prospectively and has no impact on the Company, since the Company does not the yield method to depreciate non-current
    assets
    Amendments to IAS 27 Equity method in Separate Financial Statements are effective for annual periods beginning on or
    after 1 January 2016 or later and should be applied retrospectively. Sooner application is allowed. The amendments to IAS 27
    allos the company to use the Equity method in separate financ ial statements when accounting for interest in subsidiaries,
    associates, and joint ventures. The Company does not plan to ise the Equity method when accounting for interest in
    subsidiaries, associates, and joint ventures.
    International Financial Reporting Standards that have been issued but are not effective yet
    As at 31 October 2017, the following International Financial Re porting Standards, amendments to and interpretations of the
    Standards were issued, which have not become effective yet, and thus were not applied by the Company when compiling these
    Financial Statements.
    In January 2016, IASB issued the amendment to IAS 7 Statement of Cash Flows aimed at improving the disclosure of
    financial activities and helping the users to better understand the liquidity of the reporting company. According to the new
    requirements, the company will have to disclose the changes in its financial obligations resulting from financial activities, a s
    the changes in cash flows and non-monetary items (e.g. profit and loss from the movement of foreign currencies). The
    amendment is effective from 1 January 2017. The Company does not expect significant impact of the amendment on the cash
    flow statement .
    Amendment to IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses clarifies that the unit has to consider
    whether or not the tax act restricts the sources of taxable pr ofits against which the unit may apply the deduction of applicati on
    of the temporary differences. Furthermore, the amendment provides procedures how the company has to determine the future
    taxable profit and explain the circumstances, based on which the taxable profit may contain return of some assets at a value
    higher than its residual value. The companies have to apply ch anges retrospectively. Upon initial adoption of changes, the
    change in the initial state of equity for an earlier comparative period may be recognized in the initial state of retained earn ings
    (or in another
    part of equity as needed), without allocating the change between the initial state of the retained profit and other equity item .
    The companies applying this measure have to disclose this fact. The amendment is effective from 1 January 2017 with earlier
    application of the standard permitted. If a company applies the ch anges earlier, it has to be disclosed. No significant impact of
    the amendment on the Company is expected.


    166 167
    Separate Financial Statements Separate Financial Statements Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    IFRS Annual Improvements
    The IASB has issued a set of amendments to standards. Annual improvements to IFRS 2014 – 2016 Cycle (issued on 8
    December 2016), effective for accounting period beginning on or after 1 January 2018, except changes in IFRS 12 that are
    effective for accounting period beginning on or after 1 January 2017. Further, Annual improvements to IFRS 2015 – 2017
    Cycle (issued on 12 December 2017), effective for accounting period beginning on or after 1 January 2019. These annual
    improvements have not been adopted by the EU yet.
    Also adoption of the following interpretations and amendments, will not have any impact on the accounting policies, financial
    position or performance of the Company. Interpretations have not been adopted by the EU yet
    The Interpretation IFRIC Interpretation 22 Foreign Currency Tr ansactions and Advance Consideration clarifies that, in
    determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the
    derecognition of a non-monetary asset or non-monetary liability re lating to advance consideration, the date of the transaction is
    the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance
    consideration. If there are multiple payments or receipts in advance, then the entity must determine the transaction date for e ach
    payment or receipt of advance consideration. Entities may apply the amendments on a fully retrospective basis. Alternatively,
    an entity may apply the Interpretation prospectively to all assets, expenses and income in its scope that are initially recogni sed
    on or after:
    (i)The beginning of the reporting period in which the entity first applies the interpretation Or
    (ii) The beginning of a prior reporting period presented as comparative information in the financial statements of the
    reporting period in which the entity first applies the interpretation.
    The Interpretation is effective for annual periods beginning on or after 1 January 2018. Early application of interpretation is
    permitted and must be disclosed. However, since the Company’s current practice is in line with the Interpretation, the
    Company does not expect any effect on its financial statements.
    The Interpretation IFRIC Interpretation 23 Uncertainty over Income Tax Treatment addresses the accounting for income
    taxes when tax treatments involve uncertainty that affects the application of IAS 12 and does not apply to taxes or levies
    outside the scope of IAS 12, nor does it specifically include re quirements relating to interest and penalties associated with
    uncertain tax treatments. The Interpretation specifically addresses the following:
    -Whether an entity considers uncertain tax treatments separately
    - The assumptions an entity makes about the examination of tax treatments by taxation authorities
    - How an entity determines taxable profit (tax loss), tax ba ses, unused tax losses, unused tax credits and tax rates
    - How an entity considers changes in facts and circumstances.
    An entity must determine whether to consider each uncertain tax treatment separately or together with one or more other
    uncertain tax treatments. The approach that better predicts the resolution of the uncertainty should be followed. The
    interpretation is effective for annual reporting periods beginn ing on or after 1 January 2019, but certain transition reliefs a re
    available. The Company will apply interpretation from its effective date. Since the Company does not operate in a complex
    multinational tax environment, applying the Interpretation may not significantly affect its financial statements and the required
    disclosures.
    Other International Financial Reporting Standards
    The Company has not adopted any other IFRS standards adopted by EU early where adoption is not mandatory at the date of
    preparation of the financial statements. Where transition provisions give an entity the choice of whether to apply new standard s
    prospectively or retrospectively, the Company has decided to apply the standards prospectively.
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    In July 2014, IASB issued the final version of IFRS 9 Financial Instruments, which replaces IAS 39, Financial Instruments:
    Recognition and Measurement, except that the IAS 39 exception for a fair value hedge of an interest rate exposure of a
    portfolio of financial assets or financial liabilities contin ues to apply, and entities have an accounting policy choice betwee n
    applying the hedge accounting requirements of IFRS 9 or continuing to apply the existing hedge accounting requirements in
    IAS 39 for all hedge accounting until the standard resulting from the IASB’s project in macro hedge accounting is effective.
    Although the permissible measurement bases for financial assets – amortised cost, fair value through other comprehensive
    income (FVOCI) and fair value through profit or loss (FVTPL) – are similar to IAS 39, the criteria for classification into the
    appropriate measurement category are significantly different .
    A financial asset is measured at amortized cost if the following two conditions are met:
    the assets is held within a business model whose objective is to hold assets in order to collect contractual cash flows;
    and
     its contractual terms give rise, on specified dates, to cash flows that are solely payments of principal and interest on
    the principal outstanding.
    In addition, for a non-trading equity instrument, a company may elect to irrevocably present subsequent changes in fair value
    (including foreign exchange gains and losses) in OCI. These are not reclassified to profit or loss under any circumstances.
    For debt instruments measured at FVOCI, interest revenue, expected credit losses and foreign exchange gains and losses are
    recognised in profit or loss in the same manner as for amortise d cost assets. Other gains and losses are recognised in OCI and
    are reclassified to profit or loss on derecognition.
    The impairment model in IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with a forward-looking an ‘expected credit loss’
    (ECL) model, which means that a loss event will no longer need to occur before an impairment allowance is recognised. The
    new impairment model will apply to financial assets measured at amortized cost or FVOCI, except for investments in equity
    instruments, and to contract assets.
    Under IFRS 9, loss allowances will be measured on either of the following bases:
    12-month ECLs: these are ECLs that result from possible default events within the 12 months after the reporting date;
    and
     Lifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial
    instrument.
    IFRS 9 includes a new general hedge accounting model, which aligns hedge accounting more closely with risk management.
    The types of hedging relationships – fair value, cash flow and foreign operation net investment – remain unchanged, but
    additional judgment will be required.
    The standard contains new requirements to achieve, continue and discontinue hedge accounting and allows additional
    exposures to be designated as hedged items. Extensive additional disclosures regarding an entity’s risk management and
    hedging activities are required.
    The Company plans to apply the new standard starting from the effective date. The Company started analysing the impact of
    the new standard on the balance sheet and assets and increased amount of allowances to loans provided is expected, however
    the quantitative impact is not known yet. The management of the Company is not expecting any significant impact.The
    amendments to IAS 40 Transfers of Investment Property is effective for annual periods beginning on or after 1 January 2018
    and should be applied prospectively. Early application is perm itted. The amendments clarify when an entity should transfer
    property, including property under construction or development into, or out of investment property. A mere change in
    management’s intentions for the use of a properly does not provide evidence of a change in use. The amendments state that
    a change in use occurs when the property meets, or ceases to meet, the definition of investmnet property and there is evidence
    of the change in use. The Company does not expect that first time adoption of the amendments will have significant impact on
    the financial statements, as the Company transfer property into, or out of investment property only in case of the change in use
    of the property.


    168 169
    Separate Financial Statements Separate Financial Statements Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    (d) Financial investments
    i.Subsidiaries
    Subsidiaries are all enterprises that are controlled by the Co mpany. The control exists when the Company has the power,
    directly or indirectly, to govern the financial and operating polic ies of an enterprise, so as to obtain benefits from its activities.
    . The existence and effect of potential voting rights that are cu rrently exercisable or convertible are considered when assessing
    whether the Company controls another entity. Inve stments in subsidiaries are measured at cost.
    ii. Associates
    Associates are those enterprises in which the Company has si gnificant influence, but not control, over the financial and
    operating policies. Significant influence is presumed to exist when a company holds between 20 and 50 percent of the voting
    rights of another entity. Investments in associates are recognised at cost.
    The cost of financial investments is derived from the amount of spent cash or cash equivalents or is recognised at fair value of
    contributed assets and liabilities to acquire the enterprise at the moment of acquisition. Costs related to acquisition (transa ction
    costs) are included in the cost of the investment.
    As at the reporting date, the management reconsiders whether any events occurred which could cause impairment of financial
    investments. Potential impairment of financial investments below their cost is recognised through a value adjustment. Value
    adjustments are derived from the value of future cash flows discounted to present value.
    (e)
    Foreign currency
    Foreign currency transactions
    Items included in the Company's financial statements are measured using the currency of the primary economic environment in
    which the Company operates (the functional currency). The separate financial statements are presented in thousands of euros,
    which is the Company's functional and presentation currency. Trans actions in foreign currencies are translated into euros at the
    foreign exchange rate valid at the date of the transaction. Mo netary assets and liabilities denominated in foreign currencies a re
    translated into euros at the financial statements date at the exchange rate of the European Central Bank valid at that day.
    Foreign exchange differences arising from such translations ar e recognised through profit or loss. Non-monetary assets and
    liabilities denominated in foreign currencies, which are measured at cost, are translated into euros using the exchange rate valid
    at the date of the transaction. Non-monetary assets and liabil ities denominated in foreign currencies that are measured at fair
    value are translated into euros at the foreign exchange rates valid at the dates the fair values are determined.
    (f) Cash and cash equivalents
    Cash and cash equivalents comprise cash on hand and in banks, short-term highly liquid investments with original maturities of
    three months or less and short-term highly liquid inve stments readily convertible for known amounts of cash.
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    (c)Financial instruments (excluding financial liabilities)
    i. Classification
    A financial instrument is any contract that gives rise to a fi nancial asset of one entity and a financial liability or equity
    instrument of another entity.
    Loans granted are non-derivative financial assets with fixed and determinable payments, not quoted in an active market, which
    are not classified as available-for-sale securities, financial asse ts held to maturity or as financial instruments at fair value
    through profit or loss.
    Available-for-sale securities are those non-derivative financial assets that are not classified as financial instruments at fair
    value through profit or loss, loans and advances to banks and customers or as financial assets held to maturity.
    Financial instruments at fair value through profit or loss are those that the Company principally holds for trading, that is, with
    the purpose of short-term profit taking.
    ii. Recognition
    Loans granted are recognised on the day they are provided by the Company.
    Financial assets at fair value through profit or loss and avai lable-for-sale securities are recognised on the date the Company
    commits to purchase the assets.
    iii. Measurement
    Financial instruments are measured upon initial recognition at fair value plus, in the case of a financial instrument not at fa ir
    value through profit or loss, transaction costs directly attribut able to the acquisition or issue of the financial instrument.
    Subsequent to initial recognition, financial assets are measured at amortized costs, except for financial assets at fair value
    through profit and loss and available-for-sale securities, which are measured at fair value.
    iv. Fair value measurement principles
    The fair value of financial instruments is based on their quoted market price at the financial statements date without any
    deduction for acquisition-related costs. If a quoted market price is not available, the fair value of the instrument is estimated by
    the management using the pricing model or discounted cash flow techniques.
    Where the discounted cash flow method is used, estimated future cash flows are based on the management's best estimates and
    the discount rate is the market rate at the date of the fina ncial statement for an instrument with similar terms and conditions .
    2. Significant accounting policies (continued)
    Where pricing models are used, inputs for these models are based on market-related factors at the date of the financial
    statement.
    v. Gain and losses on subsequent revaluation
    Gains and losses arising from a change in fair value are recogni sed in profit or loss for financial instruments at fair value
    through profit or loss and directly in equity for available-for-sale securities. Changes in the fair value of available-for-sal e
    securities are derecognised from other equity to profit or loss at the moment of sale.
    vi. Derecognition
    A financial asset is derecognised when the Company loses control over the contractual rights that comprise that asset. This
    occurs when the rights are realised, expire or are surrendered by the Company.
    Available-for-sale assets that are sold are derecognised and the corresponding payable receivables to buyers are recognised as
    at the date the Company commits to sell the assets.
    Loans and advances to customers are derecognised as at the day they are paid/ settled by the Company.



    170 171
    Separate Financial Statements Separate Financial Statements Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    (j)Property, plant and equipment
    i. Owned assets
    Single items of property, plant and equipment are measured at cost less accumulated depreciation (see below) and impairment
    losses (refer to the accounting policy under letter i)). Cost includes expenditures that are directly attributable to the acqui sition
    of the asset. The cost of self-constructed assets includes the cost of materials, direct labour, any other costs directly attributable
    to bringing the asset to a working condition for its intended use and costs of dismantling and removing the items and restoring
    the site where it was located. When parts of an item of propert y, plant and equipment have different useful lives, those
    components are accounted for as separate items (major components) of property, plant and equipment.
    ii. Leasing
    Agreements on lease of assets in relation to which the Company assumes substantial part of risks and benefits of ownership are
    classified as financial leasing. Leased assets are stated at an amount equal to the lower of their fair value and the present v alue
    of the minimum leasing payments at inception of the lease, less accumulated depreciation (see below) and impairment losses
    (refer to the accounting policy under letter i)).
    iii. Subsequent expenditures
    Subsequent expenditure is capitalised if it is probable that the future economic benefits embodied in the part of property, pla nt
    and equipment will flow to the Company and the relevant cost can be measured reliably. All other expenditures including the
    costs of day-to-day servicing of property, plant and equipment are recognised in profit or loss in the period to which they relate.
    iv. Depreciation
    Except as specified below, depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of
    individual items of property, plant and equipment. Land is not depreciated. The estimated useful lives are as follows:
     Buildings 30 - 45 years
     Individual movables and sets of movables
     Geothermal borehole 40 years
     Slides 25 years
     Cableways and ski lifts 12 - 40 years
     Equipment 5 - 12 years
     Fixtures and fittings and others 5 - 10 years
    Depreciation methods, useful lives, as well as residual values, are reassessed annually as at the financial statement’s date. Each
    significant part of property, plant and equipment (component) with cost significant in relation to the total cost of the releva nt
    item is depreciated separately.
    v. Capitalized borrowing costs
    Borrowing costs attributable to the asset that necessarily takes a substantial period of time to get ready for its use or sale are
    capitalised by the Company as part of the cost of the asset.
    (k) Intangible assets
    i. Goodwill and intangible assets acquired in a business combination
    Goodwill recognized as a result of the Company merging with its subsidiaries is measured as the excess of the sum of the
    consideration transferred, or the amount of the investments, over the net of the actual amounts of the identifiable assets
    acquired and the liabilities assumed. Goodwill on acquisition of subsidiaries and associates is included in the investments in
    subsidiaries and associates. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses.
    Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    (g) Inventories
    Inventories are measured at the lower of acquisition cost (purchased inventory), respectively in own costs (incurred by own
    activity), and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, le ss the
    estimated cost of completion and selling expenses. Purchased inventories are measured at cost, which includes the purchase
    price and other directly attributable expenses incurred in acquiring the inventories and bringing them to their existing locati on
    and condition. Own costs include direct costs and indirect costs associated with acquiring inventories by own activity.
    (h) Offsetting
    Financial assets and liabilities are offset and their net amount
    is reported in the balance sheet when the Company has a legall y
    enforceable right to set off the recognised amounts and the transactions are intended to be settled on a net basis.
    (i)Impairment
    The carrying amounts of the Company's assets, other than inventories (refer to the accounting policy under letter g)),
    investment property (refer to the accounting policy under letter l)), financial assets at fair value through profit or loss (re fer to
    the accounting policy under letter c)), available-for-sale securi ties (refer to the accounting policy under letter c)) and defe rred
    tax assets (refer to the accounting policy under letter p)) are reviewed at each financial statements date to determine whether
    there is objective indication of impairment of the asset. If any such indication exists, the asset's recoverable amount is
    estimated. Intangible assets that have an indefinite useful li fe are not subject to amortisation, but are tested annually for
    impairment as part of the cash-generating unit to which they belong.
    An impairment loss is recognised whenever the carrying amount
    of an asset or its cash-generating unit exceeds its recoverable
    amount. Impairment losses are recognised in profit or loss.
    Loans granted are recognised net of value adjustment for losses
    on loans. Value adjustments are determined on the basis of
    the state of the loan and performance of the borrower and the value of any collateral and all third-party guarantees is taken
    into account.
    The recoverable amount of receivables carried at amortised cost is calculated as the present value of estimated future cash
    flows, discounted at the original effective interest rate (i.e. the effective interest rate computed upon initial recognition o f
    these financial assets). Short-term receivables are not discounted.
    If assets available for sale caused a decrease in fair value rec
    ognized directly in equity and if objective reasons exist that prove
    that there was a decrease in the fair value of the assets, the cumulated loss recognized in equity shall be reported in the pro fit
    and loss statement even if the relevant financial asset had not been reversed from the financial position. The amount of loss
    recognized in the profit and loss statement is the difference betw een the acquisition cost and the fair value, adjusted for the
    impairment of the financial asset already recognized in profit and loss. A decrease in fair value of more than 20% of the
    acquisition cost or a decrease in fair value below the acquisition cost that lasts continuously more than nine months in case o f
    securities investments is considered an impairment.
    The recoverable amount of other assets is the greater of their va
    lue in use less costs to sell and value in use. In assessing value
    in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects curre nt
    market assessment of the time value of money and the risks speci fic to the asset. For an asset that does not generate largely
    independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
    An impairment loss in respect of receivables carried at amortised
    cost is reversed if the increase in the recoverable amount ca n
    be related objectively to an event occurring after the impairment loss was recognised.
    In the case of goodwill, an impairment loss cannot be decreased subsequently.
    In respect of other assets, an impairment loss is reversed or decreased when there is an indication that the impairment loss no
    longer exists and there has been a change in the estimates used to determine the recoverable amount.
    An impairment loss can only be reversed or decreased to the extent that the asset's carrying amount does not exceed the
    carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been
    recognised.



    172 173
    Separate Financial Statements Separate Financial Statements
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    (n)Interest income and expense
    Interest income and expense is recognised in profit or loss in the period to which it relates using the effective interest rate basis.
    All expenses on loans and borrowings are recognised in profit or loss, with the exception of capitalised borrowing costs; refer
    to the accounting policy under letter (j), part (v).
    (o) Rental income
    Rental income from investment property is recognised in profit or loss on a straight-line basis over the term of the lease.
    (p) Income tax
    Income tax on the profit for the current accounting period comprises current and deferred tax.
    Current tax is the expected tax payable on the taxable income for the current accounting period, using tax rates valid as at th e
    date of the financial statement’s preparation, and any adjustments to tax payable in respect of previous accounting periods.
    Deferred tax is accounted for using the balance sheet method and calculated from all temporary differences between the
    carrying amounts of assets and liabilities determined for financial reporting purposes and the amounts used for taxation
    purposes. The following temporary differences weren’t taken into account: the initial recognition of assets or liabilities whic h
    affect neither accounting nor taxable profit, and the differences relating to investments in subsidiaries to the extent that it is
    probable that they will not be reversed in the foreseeable future. No deferred taxes are recognised on the initial recognition of
    goodwill. The amount of deferred tax is based on the expected way of realisation or settlement of the carrying amount of assets
    and liabilities, using the tax rates valid or approved as at the date of the financial statement’s preparation.
    Income tax is recognised directly in profit or loss, except for the part that relates to items recognised directly in equity, i n
    which case the income tax is recognised in equity.
    Deferred tax asset and liability are offset if there is a legall y enforceable right to offset the payable tax liability and ass et, and
    they relate to the same tax authority and the taxable entity.
    A deferred tax asset is only recognised up to the amount of probable future taxable profits against which the unused tax losses
    and credits can be offset. Deferred tax assets are reduced by the amount for which it is probable that the related tax benefit will
    not be realised.
    (q) Operative and financial lease payments
    Payments made under operative leasing are recognised in profit or loss on a straight-line basis over the term of the lease.
    Minimum leasing payments of financial leasing are divided into in terest and instalments of the principal. Interest is allocated to
    each period during the term of the lease so as to express a constant periodic rate of interest for the period applied to the un paid
    part of the principal
    (r) Trade and other payables
    Trade and other payables are stated at amortised cost (see point (w) Financial liabilities).
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    ii. Software and other intangible assets
    Software and other intangible assets acquired by the Company ar e stated at cost less accumulated amortisation (see below) and
    impairment losses (refer to the accounting policy under letter i)). Useful life of these assets is reassessed regularly.
    iii. Amortisation
    Amortisation is recognized in profit or loss on a straight-lin e basis over the estimated useful lives of intangible assets, fro m the
    date the asset is available for use. The estimated useful lives are as follows:
     Software 4 – 5 years
     Valuable rights each item uses an individual depreciation plan, based on the estimate useful
    lives if these assets, valuable rights also include trademarks which represent
    non-depreciated assets. The Company uses 6, 7, 8, 12 and 50-year useful lives
    for its valuable rights.
    (l) Investment property
    Investment property represents assets that are held by the Compan y to generate rental income or to realise a long-term increase
    in value, or for both of these purposes.
    Investment property is stated at fair value, which is determined by an independent registered expert or by the management. Fair
    value is based on current prices of similar assets on an active market under the same location and the same conditions, or wher e
    such conditions are not available, by applying the generally appli cable valuation models such as the yield method. Any gain or
    loss arising from a change in fair value is recognised in profit or loss.
    Assets that are constructed or developed for their future use as investment property are measured at fair value if the fair value
    can be determined reliably.
    Details on the valuation of investment property are specified in Note 3(a) – Critical accounting estimates and assumptions,
    Valuation of investment property.
    Rental income from investment property is accounted for as described in the accounting policy under letter (o).
    (m) Provisions
    A provision is recognised in the balance sheet when the Comp any has a present legal, contractual, or non-contractual
    obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the
    obligation and a reliable estimate of the amount can be made. Long-term provisions the reduction of which to their present
    value would have a material impact on the financial statements are discounted to their present value.
    i. Long-term employee benefits
    Liability of the Company resulting from long-term employee benefits other than pension plans represents the estimated amount
    of future benefits that employees have earned in return for their service in the current and prior periods. The liability is
    calculated using the projected unit credit method, discounted to it s present value. A discount rate used to calculate the present
    value of liability is derived from the yield curve of high-quality bonds with maturities close to the conditions of the Company ’s
    liabilities as at the date of the financial statements preparation.
    ii. Short-term employee benefits
    Short-term employee benefit obligations are measured on an undiscounted basis and are recognised as expenses at the time of
    provision of the service by the employees. A payable is recognised for the amount expected to be paid under short-term cash
    bonus or profit-sharing plans if the Company has a present legal or contractual obligation to pay this amount as a result of pa st
    service provided by the employee and the obligation can be estimated reliably.


    174 175
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    (v)Reporting by segments
    Operating segments are parts of the Company that are able to generate income and expenses with available financial
    information, which is regularly reviewed by the chief operating d ecision makers in order to allocate resources to the segments
    and to assess their performance. The management monitors 7 main segments, namely mountain resorts, leisure parks, hotels,
    dining, sports services and st ores, real estate, and other.
    (w) Financial liabilities
    The Company recognises financial liabilities as other financial liabilities. The Company does not recognise any financial
    liabilities valued at fair value through profit or loss.
    In the Company’s separate statement of financial position, other financial liabilities are recognized as received loans and
    borrowings, bonds issued, trade payables, ot her liabilities and current tax liabilities.
    Financial liabilities are recognised by the Company on the trade date. Upon initial recognition, financial liabilities are meas ured
    at fair value including transaction costs.
    Subsequent to initial recognition, financial liabilities are measured at amortized cost. Upon measurement at amortized cost the
    difference between the cost and the face value is recognised thr ough profit or loss during existence of the asset or liability
    using the effective interest rate method.
    Financial liabilities are derecognised when the Company's obligati on specified in the contract expires, is settled or cancelled.
    (x) Fair value estimates
    The following notes summarise the main methods and assumptions used in estimating the fair values of financial assets and
    liabilities referred to in Note 33 – Fair value information:
    i. Loans granted
    Fair value is calculated based on discounted expected future prin cipal and interest cash flows. Expected future cash flows are
    estimated considering credit risk and any indication of impairment . The estimated fair values of loans reflect changes in credit
    status since the loans were made and changes in interest rates in the case of fixed rate loans.
    ii. Loans and borrowings
    For loans and borrowings with no defined maturities, fair value is taken to be the amount payable on demand as at the date of
    preparation of the consolidated financial statement. The estimated fair value of fixed-maturity loans and borrowings is based o n
    discounted cash flows using rates currently offered fo r loans and borrowings of similar remaining maturities.
    i. Trade receivables/payables, other receivables and other assets/liabilities
    For receivables/payables with a remaining life of less than one year, the nominal amount is deemed to reflect the fair value.
    Other receivables/payables are discounted to determine the fair value.
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    2. Significant accounting policies (continued)
    (s) Revenues from services rendered
    The Company recognises six types of basic revenues from services rendered:
    Revenues from cableways and ski lifts (hereinafter also referred to as “Mountain Resorts”)
     Revenues from leisure parks (hereinafter also referred to as “Leisure Parks”)
     Revenues from sports services and stores (hereinafter also referred to as “Sports Services and Stores”)
     Revenues from hotel services (hereina fter also referred to as “Hotels”)
     Revenues from restaurant facilities (her einafter also referred to as “Dining”)
     Revenues from real estate projects (mainly from investment property, hereinafter also referred to as “Real Estate”)
     Other revenues
    The company recognises the revenues to the extent, in which it is probable that the economic benefits will flow to the
    Company and these revenues can be reliably evaluated. The revenues are recognised at fair value. Revenues are accrued
    depending on in which period the services were rendered, excluding revenues from the aqua park, hotel services and restaurant
    facilities, which are recognised in profit or loss after the service has been rendered. Revenues from services rendered do not
    include value added tax. They are also net of discounts and rebates (rebates, bonuses, discounts, credit notes and the like).
    Since 2012 the Company has been running a loyalty program for its clients – GOPASS. GOPASS enables its clients to earn
    points for purchase of products and services in its resorts and to redeem these points as discounts from future purchases.
    The amount of unredeemed points are recognized as a decrease in sales against revenue time difference, as they are related to
    promised discounts from future purchases of clients. The Company monitors the value of unredeemed points and revalues it on
    a regular basis for its recognition in the financial statements.
    Other services include in particular the services provided in re lation to accommodation, such as the rental of premises includi ng
    hotels disclosed as investments property, parking, wellness, massage, sale of souvenirs, etc. Revenues from rental are
    recognised over the duration of the rental, with accruals. Reve nues from real estate projects are recognised following the
    transfer of rights and obligations and related risks on to buyer, to which occurs at the day of transfering the ownership rights.
    Revenues from the sale of souvenirs and other goods shall be r ecognised following the transfer of significant risks and benefit s
    from the particular goods. Other revenues from services provided shall be recognised following the provision thereof.
    (t) Dividends
    Dividends are recognised in the statement of changes in equity and also as liabilities in the period in which they are approved .
    (u) Non-current assets and disposal groups held for sale
    Non-current assets (or disposal groups comprising assets and liabilities) that are expected to be recovered primarily through
    sale rather than through continuing use are classified as held for sale. Immediately before classification as held for sale, the
    assets (or components of a disposal group held for sale) are re-measured in accordance with the International Financial
    Reporting Standards as adopted by the EU. Thereafter, upon initial classification as held for sale, the assets and disposal group
    held for sale are recognised at the lower of their carrying amount or fair value less cost to sell.
    Any impairment loss on a disposal group is first allocated to goodwill, and then to the remaining assets and liabilities on a p ro
    rata basis, except for inventories, financial assets, deferred tax assets and investment property, which continue to be measured
    in accordance with the Company's accounting policies.
    Impairment losses on initial recognition as held for sale are recognised in profit or loss even if the revaluation reserve was
    created. The same applies to gains and losses on subsequent measurements. Gains are not recognised in excess of any
    cumulative impairment loss.
    Property, plant and equipment and intangible assets classified as held for sale are no longer depreciated or amortised.
    In case that, after the asset assignment into the group of assets held for sale, value is realized mainly through use rather than
    sale thereof, the assets shall be accounted back and depreciation or amortization for property, plant and equipment and
    intangible assets shall be recognised in the period when such change of assets arose.
    Separate Financial Statements Separate Financial Statements


    176 177
    Separate Financial Statements Separate Financial Statements
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    3. Significant Accounting Estimates and Assumptions (continued)
    Expected revenues as well as the profit margin ratio are based on changes in customer target groups, strengthened marketing
    and increase in the quality of services rendered.
    Projecting of cash flows applied in determining the value in use covers a medium-term period of 5 years and subsequent
    extrapolation for the next period. Based on such standard level of cash flows, the terminal value was calculated with expected
    growth of cash flows at 2.2% p.a. (2016: 2.2%). Discount rates applied in the projecting of cash flows were calculated as
    weighted average cost of capital, representing 6.81% fo r 2017 and 6.5% for 2016 (considering the income tax).
    In 2017 and 2016, goodwill was tested within CGU Vysoké Tatry, and the test did not show any reason for asset impairment.
    If as at 31 October 2017, projected EBITDA of CGU Vysoké Tatry, being part of projected cash flows was lower than 5% in
    comparison with management estimates, the value in use for an individual cash-generating unit in the location of High Tatras
    would drop by 10,238 ths. EUR. In such case, it would not be necessary to account for the asset impairment or goodwill even at
    a lower EBIDTA reached. If the discount rate increased by 0.5 percentage point in comparison with the management estimate,
    i.e. its value was 7.31 %, the value in use for an individual cash-generating unit for the location of High Tatras would drop b y
    17,762 ths. EUR. Here again it would not be necessary to account for asset impairment or goodwill even at a higher discount
    rate.
    If as at 31 October 2016, projected EBITDA of CGU Vysoké Tatry, being part of projected cash flows was lower than 5% in
    comparison with management estimates, the value in use for an individual cash-generating unit in the location of High Tatras
    would drop by 8,995 ths. EUR. In such case, it would not be necessary to account for the asset impairment or goodwill even at
    a lower EBIDTA reached. If the discount rate increased by 0.5 percentage point in comparison with the management estimate,
    i.e. its value was 7.00 %, the value in use for an individual cash-generating unit for the location of High Tatras would drop b y
    21,386 ths. EUR. Here again it would not be necessary to account for asset impairment or goodwill even at a higher discount
    rate.
    (c) Asset Impairment
    IAS 36 requires the testing of asset impairment in cases where external or internal indicators
    would point out to possible asset impairment.
    The Company carries on 6 principal activities: running of mountain resorts, leisure parks, restaurant services, sports services
    and stores, accommodation services and real estate projects, namely in three locations: Jasná (the Low Tatras), in the High
    Tatras, and in Liptovský Mikuláš and via its subsidiaries in Poland. Each of the locations was assessed by the management as
    an individual cash-generating unit (CGU). The Company monitors the performance and creates independent budgets for
    individual cash-generating units. The Company assets were allocated to individual cash-generating units according to the
    material competence, whereas all assets, i.e. also the Hotels , Catering establishments and Sports services and shops are
    included in individual cash-generating units, except for Ski lifts and Cable ways.
    As at 31 October 2017, the Company management having considered the Company asset impairment did not identify any
    indicator of possible impairment. For that reason, the asset impairment test was not performed. An impairment test was
    performed only for the location of High Tatras, as it has assigned Goodwill as specified in par. 3(b).
    As at 31 October 2016, the Company management having considered the Company asset impairment did not identify any
    indicator of possible impairment. For that reason, the asset impairment test was not performed. An impairment test was
    performed only for the location of High Tatras, as it has assigned Goodwill as specified in par. 3(b).
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    3. Significant Accounting Estimates and Assumptions
    The compilation of the financial statements according to the International Financial Reporting Standards as adopted by the EU
    requires the application of certain significant accounting estimates. It also requires that the management, in the application
    process of the Company accounting principles, should use its j udgement. Therefore, the accounting estimates will be rarely
    identical with actual figures. Estimates and assumptions carrying a significant risk of causing a material modification of the
    book value of assets and liabilities in the future accounting period are described below in the text. The estimates and
    assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the
    estimate is revised if the revision affects only that period or in the period of revision and also in future periods if the revision
    affects both current and future periods.
    (a) Valuation of Investments in Property
    Investments in property are measured at fair value. The fair value of investments in property is determined either by a
    management evaluation or independent expert (see the Significant Accounting Principles, par. l); in both of the cases the
    valuation is based on current market values and conditions. The fair market value is the estimated value, for which the propert y
    could be exchanged, on the valuation day, between knowledgeable, willing parties being a prospective seller and a prospective
    buyer, in an arm’s length transaction, with each party acting well informed, cautiously and without compulsion.
    In the absence of current market prices, net estimated cash flow generated from the leasing of property and gains from
    capitalisation which reflect the risk specific for the market and also cash flow from the property shall be taken into account.
    The valuation reflects (where relevant) the type of lessees who use the property or are responsible for the fulfilment of lease
    liabilities or the type of prospective users, if the property is left non-rented, the general market perception of lessee solve ncy,
    the distribution of responsibilities related to maintenance and insurance of property between the Company and the lessees, and
    the remaining life of property.
    As at 31 October 2017, the investments in real property cover three hotels (SKI, Liptov, Kosodrevina) and the accommodation
    facility Otupné with the aggregate book value of 1,982 ths. EUR (as at 31 October 2016: 1,982 ths EUR), which are leased out
    to third parties that operate them, as well as forest areas and lots of land obtained as an acquisition in 2009 in the book value of
    4,572 ths. EUR (as at 31 October 2016: 4,572 ths EUR). The value of the hotels was estimated by the management in a manner
    specified above. The value of the land was determined by the management using market prices, and the final value is based on
    an estimate of the market price per square meter, depending on th e type of land and market transactions for similar lots of land.
    As at 31 October 2017, the Company management, based on current market conditions, revalued the value of investments
    in property and evaluated, that the value of contractual and ma rket lease did not change significantly. Based on the performed
    evaluation, there was no need to adjust the value of investments in property.
    If the fair value of the portion of investments in property which was determined based on management estimates differs
    from management estimates by 10%, the book value of investments in property would be higher or lower by 655 ths. EUR in
    comparison with the amount reported as at 31 October 2017 (as at 31 October 2016: 655 ths. EUR)
    (b) Goodwill and Impairment Test
    As at the date of the financial statements, the Company is re quired to assess whether there is any indication that its goodwill is
    impaired. If there is no indication that goodwill may be impaired, the Company shall, according to IAS 36, test reported
    goodwill for possible impairment on a yearly basis as at 31 October, i.e. as at the date of compilation of the annual separate
    financial statements.
    On the day of reporting, the acquired goodwill is allocated to individual cash-generating units (CGU) that are expected to
    benefit from the synergies of the business combinations.
    Potential decrease of the goodwill value is determined by comp aring the return value of CGU and its book value. The return
    value is determined by the value in use. The value in use was derived from a business plan prepared by the management. The
    key prerequisite which was also the most sensitive factor in determining the recoverable amount was expected revenues
    assessed by the management, the profit margin ratio (EBITDA) a nd the cost of capital used as the discount factor for future net
    cash flows.



    178 179
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    3. Significant Accounting Estimates and Assumptions (continued)
    grow by 7%, for 2020 by 5%, from 2021 to 2023 it is expected to grow by 3% per year and from 2024 to 2032 by 2% per year.
    The discount rate applied in the valuation of such financial assets used as at 31 October 2017 was in amount of 8.70% (2016:
    8.54%).
    If in the calculation as at 31 October 2017 the EBITDA projected for MELIDA a.s., which is a part of the projected cash flows,
    was 5% lower every year compared to the management estimate s, the value of investment in CAREPAR, a.s. would drop by
    208 ths. EUR. If the discount rate increased by 0.5 percentage point in comparison with the management estimate, i.e. its value
    would be 9.20%, the value of CAREPAR, a.s. would drop by 63 ths. EUR.
    If in the calculation as at 31 October 2016 the EBITDA projected fo r MELIDA a.s., which is a part of the projected cash flows,
    was 5% lower every year compared to the management estimate s, the value of investment in CAREPAR, a.s. would drop by
    187 ths. EUR. If the discount rate increased by 0.5 percentage point in comparison with the management estimate, i.e. its value
    would be 9.04%, the value of CAREPAR, a.s. would drop by 52 ths. EUR.
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    3. Significant Accounting Estimates and Assumptions (continued)
    (d) Financial Instruments at Fair Value
    The fair value of financial instruments is determined based on:
    Level 1:
    quoted market prices (unadjusted) in active markets for identical assets or liabilities
    Level 2:
    inputs other than quoted market prices included w ithin Level 1, which are comparable for the asset or
    liability, either directly (as prices of comparable instruments) or indirectly (derived from prices)
    Level 3:
    inputs for the asset and liability, which are not determined on the basis of data from comparable markets
    (unobservable inputs)
    When the quoted market price is not available, the fair value of the instrument is estimated using valuation techniques. When
    using valuation models, the management applies estimates and assumptions which are consistent with information available on
    estimates and assumptions that market participants would use when pricing the relevant financial instrument.
    in TEUR 31.10.2017 31.10.2016
    Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
    Financial assets
    Securities for sale - - -
    -64 - -
    64
    Financial instruments
    evaluated at fair value
    through the profit/loss - 2,194 -
    2,194- 2,195 -
    2,195
    Loans Provided - 56,915 -
    56,915 - 38,418 -
    38,418
    Other receivables - 21,698 -
    21,698 - 21,430 -
    21,430
    Investments in
    Subsidiaries - 14,743 -
    14,743- 14,641 -
    14,641
    Trade receivables - 5,387 -
    5,387 - 2,524 -
    2,524
    Cash and Cash
    Equivalents - 6,062 -
    6,062- 5,946 -
    5,946
    Other Assets - 476 -
    476 - 129 -
    129
    Total - 107,475 - 107,475 64 85,283 - 85,347
    in TEUR 31.10.2017 31.10.2016
    Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
    Financial obligations
    Loans and Borrowings - 66,055 -
    66,055 - 44,512 -
    44,512
    Bonds Issued - 189,122 -
    189,122 - 194,385 -
    194,385
    Trade payables - 7,989 -
    7,989 - 6,794 -
    6,794
    Other Liabilities - 10,897 -
    10,897 - 4,671 -
    4,671
    Total -
    274,063 - 274,063 -
    250,362 - 250,362
    As at 31 October 2017, within Level 2, the Company mostly regi sters the financial investment (19% share) in the company
    CAREPAR, a.s. in amount of 2,041 ths. EU R (as at 31 October 2016: 2,041 ths. EUR). This Company owns 50% share in the
    company MELIDA a.s., which rents and operates the ski centre Špindlerov Mlyn in the Czech Republic. Since as at 31 October
    2017, CAREPAR, a.s. does not account for any other significant as sets or liabilities apart from the share in MELIDA a.s., the
    fair value of the investment in CAREPAR, a.s. was se t as 9.5% of the estimated fair value of MELIDA a.s.
    As at 31 October 2017 and 2016, the fair value of MELIDA a.s. was estimated by the Company management using the
    discounted cash flow method, with the application of input fr om the business plan and of cash flow estimates. The business
    plan and cash flow estimates were consistently reviewed before application by Company management. Lease of the ski centre
    has been concluded until 2032, therefore, the cash flows were projected from 2018 (respectively for the estimation of the value
    in 2016 from 2017) to 2032. The main preconditions that were used in the valuation, were estimated cash flows, where the
    most important assumptions estimated by the management included EBITDA, its growth and discount rate. EBIDTA projected
    for 2018 represented the value of 5,196 ths EUR (2016: 4,794 ths EUR). For 2019, it is expected to
    Separate Financial Statements Separate Financial Statements


    180 181
    Separate Financial Statements Separate Financial Statements
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    4.
    Information about Operating Segments
    Information about Operating Segments -
    Separate Profit and Loss Statement
    Mountain Resorts Leisure Parks Hotels Dining
    Sports Services and
    Stores Real Estate Other TOTAL
    in TEUR 31.10.2017 31.10.2016 31.10.2017 31.10.2016 31.10.2017 31.10.2016 31.10.2017 31.10.2016 31.10.2017 31.10.2016 31.10.2017 31.10.2016 31.10
    .2017 31.10.2016 31.10.2017 31.10.2016
    12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m 12 m
    Sales 34,624 32,876 9,837 8,590 22,213 19,875 12,290 11,067 5,574 4,670 5,855 843 --
    90,393 77,921
    Other operating revenue 23 381 - - 52 35 91 65 5 --- --
    171 481
    Material and goods
    consumption -2,425 -2,763 -287 -301 -4,376 -3,845 -3
    ,861 -3,777 -2,350 -1,831 -2,340 -216
    --
    -15,639 -12,733
    Purchased Services -9,025 -10,023 -1,398 -1,488 -5,235 -5,079 -1,574 -1,592 -494 -420 -2,193 -302 --
    -19,919 -18,904
    Personal cost -7,257 -7,178 -2,574 -2,380 -7,517 -6,303 -3,931 -3,268 -1,622 -1,393 -- --
    -22,901 -20,522
    Other operating cost -387 -351 -142 -89 -264 -244 -91 -89 -40 -70 - -5 97-
    -827 -848
    Gain on sale of assets -- - ----- - - 1,011 797 --
    1,011 797
    Increase in fair value of
    investment property --
    ------ ------
    - -
    Release of value
    adjustments to receivables - -30 - -8 -15 -37
    - -4 -4 -10- -1--
    -19 -90
    Depreciation and
    amortization -7,055 -6,475 -1,180 -1,039 -2,795 -2
    ,769 -731 -729 -330 -363 -85 -88 -424 -591
    -12,600 -12,054
    Interest income -- - ----- - --- 2,775 1,601
    2,775 1,601
    Interest expense -4,479 -4,422 -1,273 -1,155 -2,874 -2,673 -1,590 -1,489 -721 -628 -757 -562 --
    -11,694 -10,929
    Net Profit from Financial
    Instruments -2
    ,0 26 ------ ----29-352
    29 1,674
    Profit / (loss) of the segment
    before taxes 4,019 4,041 2,983 2,130 -811 -1,040 603 184 18 -45 1,491 466 2,477 658 10,780 6,394 Income tax
    -1,557 -1,580
    Profit/ (Loss)
    9,223 4,814
    The Company generates all of its revenues on the territory of
    the Slovak Republic. Eliminations
    among segments are included in amounts reported for particular periods.
    The 10% limit of the share of total revenue was not exceeded by any Company client.
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    4. Information about Operating Segments (continued)
    Information about Operating Segments - Separate Statement of Financial Position
    Mountain Resorts Leisure Parks Hotels Dining
    Sports Services and
    Stores Real Estate Other TOTAL
    in TEUR 31.10.2017 31.10.2016 31.10.2017 31.10.2016 31.10.2017 31.10.2016 31.10.2017 31.10.2016 31.10.2017 31.10.2016 31.10.2017 31.10.2016 31.10
    .2017 31.10.2016 31.10.2017 31.10.2016
    Goodwill and Intangible
    Assets 335 576 2,517 2,508 4,076 4,040 11 7 10 20 3
    --- 6,952
    7,151
    Property, Plant and
    Equipment 147,179 136,858 33,765 33,808 75,111 69,326 9,870 10,394 2,320 2,477 4,238 4,335 2,394 2,429 274,877
    259,627
    Investments Property -
    - ------ - - 6,554 6,554 -- 6,554
    6,554
    Inventory 400 436 87 88 644 567 378 360 2,808 2,495 1,446 1,605 -- 5,763
    5,551
    Trade receivables 2,123 1,065 518 278 1,327 644 738 359 332 151 349 27 -- 5,387
    2,524
    Investments in associates 7,293 7,191 7,450 7,450 ---- - --- -- 14,743
    14,641
    Other receivables 26,685 27,709 150 157 ---- - --- -- 26,835
    27,866
    Financial investments 2,041 2,105 - - 1 1-- 119 119 -- 33 34 2,194
    2,259
    Other Assets 312 473 46 209 118 380 -- - --- -- 476
    1,062
    Loans Provided 34,820 28,618 17,274 5,606 4,200 3,939 -- - - 43 43 367 378 56,704
    38,584
    Cash and Cash Equivalents 2,782 2,562 583 656 1,493 1,517 830 845 374 366 -- -- 6,062
    5,946
    Assets available for sale -- - ----- - --- -- -
    -
    Defe rre d t ax r eceiv ab le -- ------ -------
    -
    Assets total 223,970 207,593 62,390 50,760 86,970 80,414 11,827 11,965 5,963 5,628 12,633 12,564 2,794 2,841 406,547 371,765 Loans and Borrowings long
    term 48,777 36,156 7,769 945
    --- 132 21 21 -- -- 56,567
    37,254
    Trade payables long term -- - ----- - --- -- -
    -
    Other non-current liabilities -- - ----- - --- -- -
    -
    Loans and Borrowings short
    term 8,837 6,711 264
    --- 21 - - --- -- 9,122
    6,711
    Trade payables short term 3,148 2,866 768 749 1,968 1,733 1,095 965 493 407 517 74 -- 7,989
    6,794
    Other current liabilities 5,001 4,037 1,048 1,026 2,684 2,373 1,492 1,322 672 558 -- -- 10,897
    9,316
    Reserves 131 235 32 27 82 61 45 34 20 14 21 3 -- 331
    374
    Bonds Issued -- - ----- - --- 184,842 184,702 184,842
    184,702
    Deferred tax liability -- - ----- - --- 21,450 20,523 21,450
    20,523
    Total liabilities 65,894 50,005 9,881 2,747 4,734 4,167 2,653 2,453 1,206 1,000 538 77 206,292 205,225 291,198 265,674 Eliminations among segments are included in amounts reported for particular pe
    riods. The prices used among segments are determined based on market prices for similar services and financing.



    182 183
    Separate Financial Statements Separate Financial Statements Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    9.Purchased Services
    in TEUR
    1.11.2016 -
    31.10.2017 1.11.2015 -
    31.10.2016
    Energy consumption -4,495
    -4,251
    Advertisement expenses -3,080
    -3,129
    Rental costs (cost of premises) and others -4,127
    -3,433
    Other administrative expenses -1,694
    -1,640
    Repairs and maintenance expenses -1,469
    -1,143
    Communication expenses -962
    -968
    Legal advice expenses -567
    -498
    Services related to owned premises -318
    -309
    Transport, accommodation, travel expenses -235
    -258
    Training expenses -108
    -50
    Other purchased services -2,864
    -3,225
    Total -19,919 -18,904
    Other purchased services represent the accounting, audit and other expenses related to administrative operation of the
    Company. The Company uses the services of KPMG Slovensko spol. s. r.o. auditing company for the auditing of individual
    and consolidated financial statements. Between 1 November 2016 and 31 October 2017, the expense of these items
    represented 149 ths. EUR (for the period ended on 31 October 2016: 146 ths. EUR).
    10. Personnel Expenses
    in TEUR
    1.11.2016 -
    31.10.2017 1.11.2015 -
    31.10.2016
    Wages and salaries -12,978 -12,027
    Personnel leasing -2,519 -1,665
    Social security (compulsory) -5,604 -4,871
    Remuneration of members of key management and Supervisory Board -1,786 -1,945
    Other social expenses -14 -14
    Total -22,901 -20,522
    In the period between 1 November 2016 and 31 October 2017, the average number of Company employees was 1,131, of which the
    management was 25 (between 1 November 2015 and 31 October 2016, it was 974, of which the management was 25). During the
    year, the Company used the services of employment agencies for short-term personnel leasing. In the period between 1 November
    2016 and 31 October 2017 it was 254 employees in average (between 1 November 2015 and 31 October 2016: 139 employees).
    Key management includes members of the Board of Directors and top management, which consists of CEO, CFO, directors of
    each resort, directors of central departments such as sales, marketing, finance, development. Members of the Board of
    Directors of the Parent Company are paid basic flat remunerati on, which for each is set individually based on the decision of
    the Supervisory Board upon election of the member. Extraordinary bonuses are paid to the Board of Directors upon fulfilment
    of the criteria defined in the Remuneration rules. The amount of extraordinary bonuses for the members of the Board of
    Directors, as well as its pay date are se t by the Remuneration rules, which are based on achieving the EBITDA plan. The total
    amount of extraordinary bonuses of the Boar d of Directors cannot exceed 1% of EBITDA. the Board of Directors determines
    the remuneration of the top management. For the year ended 31 October 2017 basic remuneration was paid out in the amount
    of EUR 678 ths. (for the year ended 31 October 2016: EUR 697 ths.). Extraordinary bonuses to the top management were paid
    out in the amount of EUR 1,068 ths. (for the year ended 31 Oct ober 2016: EUR 1,206 ths.) after the fulfilment of the criteria
    for extraordinary bonuses (achieving the EBITDA plan).
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    5. Increase and Decrease of Shares in Companies
    On 5 May 2017, company Tatry mountain resorts CR, a.s. was incor porated, with share capital in total amount of 2,000 ths.
    CZK (75 ths. EUR). The Company became sole shareholder in the new company. The new company will realize aquisitions in
    Czech republic.
    On 9 August 2017, the Company sold its 3,850 shares in compan y Compagnie des Alpes (CDA) in total amount of 103 ths.
    EUR. The Company does not hold any shares in CDA as at 31.10.2017.
    On 30 September 2017, company Tatry mountain resorts PL, a.s., with share capital in total amount of 25 ths. EUR was
    incorporated. The Company became sole shareholder in the new company. The new company will realize aquisitions in Poland.
    On 14 September 2016, the Company acquired a 51% share in the Croatian company TIKAR D.O.O. (hereinafter referred to as
    TIKAR). For such a 51% stake, the Company paid 1.4 ths. EUR ( 10.2 ths. HRK). TIKAR’s assets in the time of the acquisition
    totalled 2 ths EUR. On 21 October 2016, a contract on the in crease of capital of the company TIKAR and entry of a new
    shareholder was signed. The contract increased the capital from th e original 20 ths. HRK to 2,500 ths. HRK, while the stock of
    the Company in TIKAR decreased to 0.408%. Therefore, as of 31 October 2017, the Company recognises this investment
    under Financial investments (see par. 25 – Financial investments).
    6. Revenue
    in TEUR
    1.11.2016 -
    31.10.2017 1.11.2015 -
    31.10.2016
    Mountain Resorts 34,624 32,876
    Hotels 22,213 19,875
    Restaurant facilities 12,290 11,067
    Leisure Parks 9,837 8,590
    Sports Services and Stores 5,574 4,670
    Real Estate Projects 5,855 843
    Total 90,393 77,921
    7.Other operating revenue
    in TEUR
    1.11.2016 -
    31.10.2017 1.11.2015 -
    31.10.2016
    Contractual penalties - 1
    Claims paid by insurance company 10 156
    Other operating revenue 161 324
    Total 171 481
    8.Consumption of Material and Goods
    in TEUR
    1.11.2016 -
    31.10.2017 1.11.2015 -
    31.10.2016
    Material in hotels and restaurant facilities -5,590 -5,157
    Goods -5,560 -3,610
    Fuels -643 -530
    Material for repair and maintenance -657 -635
    Material and goods – other -3,189 -2,801
    Total -15,639 -12,733


    184 185
    Separate Financial Statements Separate Financial Statements
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    13.Net Profit from Financial Instruments
    in TEUR 1.11.2016 -
    31.10.2017 1.11.2015 -
    31.10.2016
    Revaluation of financial instruments measured at fair value through profit and
    loss statement - 2,026
    Cost of administration of financial instruments -237 -268
    Income from the sale of financial instruments 4 -
    Other, net 262 -84
    Total 29
    1,674
    In the period between 1 November 2015 and 31 October 2016, the revaluation of financial instruments measured at fair value
    through profit or loss represented the profit from the revaluati on of the stock in CAREPAR, a.s. amounted to 2,026 ths. EUR.
    14.Income Tax and Deferred Tax
    in TEUR 1.11.2016 -
    31.10.2017 1.11.2015 -
    31.10.2016
    Current tax:
    Tax of current accounting period -611 -3
    Withholding tax on interest -19 -10
    -630 -13
    Deferred tax:
    Posting and release of temporary differences
    -1,948 -1,567
    Change of tax rate 1,021 -
    Total reported tax -1,557-1,580
    Deferred income tax is calculated using enacted tax rates the validity of which is expected in a period in which the receivable
    is
    performed or the liability is settled.
    To calculate deferred tax from temporary differences originated in the Slovak Republic, the Company applied for the year 2017
    a 21% rate (2016: 22%) resulting from the legal corporate income tax rate valid as at the date when the financial statements ar e
    being compiled.
    Income tax reported through other components of comprehensive income
    1.11.2016 - 31.10.2017 1.11.2015 - 31.10.2016
    in TEUR Before
    taxes Tax After
    taxes Before
    taxes Tax After
    taxes
    Revaluation of available-for-sale securities to fair value 44 9 35 - - -
    Other components of comprehensive
    income 44 9 35 - - -
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    10. Personnel Expenses (continued)
    Basic remuneration is paid to members of the Supervisory
    Board in accordance with the Supervisory Board Remuneration
    Rules and the contracts on office. For the year ending 31 October 2017, basic remuneration totalled 40 ths. EUR (in the period
    between 1 November 2015 and 31 October 2016: 42 ths. EUR).
    11. Other operating cost
    in TEUR
    1.11.2016 -
    31.10.2017 1.11.2015 -
    31.10.2016
    Insurance (property, automobiles, travel cost) -340 -400
    Fees and commissions -369 -309
    Shortages and losses -115 -91
    Other operating cost -3 -48
    Total -827 -848
    12.Interest Income and Expense
    in TEUR 1.11.2016 -
    31.10.2017 1.11.2015 -
    31.10.2016
    Interest income 2,775 1,601
    Interest expense -11,694 -10,929
    Total -8,919 -9,328
    For the period between 1 November 2016 and 31 October 2017, the interest income was 2,775 ths. EUR (between 1 November
    2015 and 31 October 2016, it was 1,601 ths. EUR) is payable mainly from loans provided at a fixed interest rate. See par.
    21 – Loans provided.
    For the period between 1 November 2016 and 31 October 2017, the interest expense in the amount of 11,694 ths. EUR
    represents the cost of loans and borrowings of 1,804 ths. EUR (between 1 November 2015 and 31 October 2016, it was 1,019
    ths. EUR), and interest expense from bonds issued of 9,890 ths. EUR (between 1 November 2015 and 31 October 2016, it was
    9,910 ths. EUR) The Company issued interest-bearing bonds in th e total nominal value of 180 mil. EUR. The first portion of
    the bonds TMR I in the amount of 70 mil. EUR with nominal interest rate of 4.5% p.a. is due on 17 December 2018. The
    second portion of the bonds TMR II in the amount of 110 mil. EUR with nominal interest rate of 6% p.a. is due on 05 February
    2021. For more information on bonds issued, see par. 32 – Bonds issued.
    In the period between 1 November 2016 and 31 October 2017, the Company did not capitalise interest expense into assets
    (between 1 November 2015 and 31 October 2016, the company did not capitalise interest expense).



    186 187
    Separate Financial Statements Separate Financial Statements
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    15.Property, Plant and Equipment
    in TEUR Land and
    buildings Individual
    movable assets and sets of
    movable assets Assets under
    construction Total
    Cost
    Opening balance as of 1.11.2015 209,002 112,3752,835 324,212
    Additions 4,8612,250 6,673 13,784
    Additions due to business combinations -- - -
    Disposals -1,444-206-80 -1,730
    Reclassification to investment property -- - -
    Transfers within assets 938-- 938
    Foreign exchange difference 40338 -378 -
    Balance as of 31.10.2016 213,397 114,7579,050 337,204
    Opening balance as of 1.11.2016 213,397 114,7579,050 337,204
    Increases 8,63313,224 6,878 28,735
    Increases from company merger -- - -
    Decreases -1,998-498 - -2,496
    Movement to investments in real property -- - -
    Movement from investments in real property -- - -
    Movements within assets 4,870- -4,870 -
    Balance as of 31.10.2017 224,902 127,48311,058 363,443
    Accumulated depreciation and losses
    from impairment of
    assets
    Opening balance as of 1.11.2015 -32,912 -33,483 - -66,395
    Depreciation of current accounting period -5,174-6,345 - -11,519
    Decreases 153184 - 337
    Movement to investments in real property -- - -
    Transfer from assets available for sale -
    - - -
    Balance as of 31.10.2016 -37,933 -39,644- -77,577
    Opening balance as at 1.11.2016 -37,933 -39,644- -77,577
    Depreciation of current accounting period -5,377-6,664 - -12,041
    Decreases 566486 - 1,052
    Movement to investments in real property -- - -
    Movement from investments in real property -- - -
    Balance as of 31.10.2017 -42,744 -45,822- -88,566
    Carrying value
    as at 1.11.2015
    176,09078,892 2,835 257,817
    as at 31.10.2016 175,46475,113 9,050 259,627
    as at 1.11.2016
    175,46475,113 9,050 259,627
    as at 31.10.2017 182,15881,661 11,058 274,877
    In the period between 1 November 2016 and 31 October 2017, the Company carried out investments of 28,735 ths. EUR. The
    Company completed construction of new cableway from Krupová to Kosodrevina in total amount of 9,095 ths. EUR, the
    Company also put in use new Hotel Pošta 4* in total amount of 5,080 ths. EUR, constructed new Chalety phase II. in total
    amount of 2,045 ths. EUR, completed Centrum východ in tota l amount of 2,002 ths. EUR. Moreover, the Company improved
    snowmaking machinery and some slopes in amount of 1,667 ths. EUR. In addition, the Company realized small investments
    into hotels, restaurants at slopes, paved parking lot Krupová and realized other small operating investments.
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    14. Income Tax and Deferred Tax (continued)
    Reconciliation of effective tax rate
    in TEUR 1.11.2016 - 31.10.2017 1.11.2015 - 31.10.2016
    % %
    Profit before taxes 10,780
    6,394
    Tax rate 22% 22% 2,37222% 1,407
    Tax non-deductible expenses 2% 2165% 293
    Income not subject to tax 0% -29-2% -130
    Current tax: withholding tax on interest 0%19 0% 10
    Tax losses claimed during the period, to
    which the deferred tax was not accounted for 0%
    -0% -
    Change of tax rate -9% -1,0210% -
    Total 14% 1,55725% 1,580
    Movements of deferred tax liability (net) during 2017 and 2016
    2017
    in TEUR Balance as at
    1 November 2016Reported in
    profit and loss
    statement Reported in
    other
    comprehensive income Acquired
    through
    business
    combination Balance as
    at 31
    October 2017
    Non-current tangible and intangible assets -20,424 -827 -- -21,251
    Investments in real property -87224 -- -848
    Losses from impairment of trade receivables
    and other assets 34
    -9 -- 25
    Provisions and liabilities 47921 -- 500
    Tax losses 260 -136-- 124
    Total, net -20,523 -927-- -21,450
    2016 
    in TEUR Balance as at
    1 November 2015Reported in
    profit and loss
    statement Reported in
    other
    comprehensive income Acquired
    through
    business
    combination Balance as
    at 31
    October 2016
    Non-current tangible and intangible assets -18,870 -1,554 -- -20,424
    Investments in real property -828 -44-- -872
    Losses from impairment of trade receivables
    and other assets 16
    18 -- 34
    Provisions and liabilities 336 143-- 479
    Tax losses 390 -130-- 260
    Total, net -18,956 -1,567-- -20,523
    See also par. 19 - Deferred tax liability.



    188 189
    Separate Financial Statements Separate Financial Statements
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    16.Goodwill and Intangible Assets
    in TEUR
    Goodwill Valuable
    rights Software Acquired
    intangible assets Total
    Acquisition price
    Opening balance as at 1.11.2015 3,740 3,964 2,025- 9,729
    Increases -
    - 266 25 291
    Increases from company merger
    ---- -
    Decreases ---- -
    Balance as of 31.10.2016
    3,740 3 964 2,29125 10,020
    Opening balance as at 1.11.2016 3,740 3,964 2,29125 10,020
    Increases -
    - 155 205 360
    Increases from company merger
    ---- -
    Decreases ---- -
    Balance as of 31.10.2017
    3,740 3,964 2,446 230 10,380
    Accumulated depreciation and losses
    from impairment of
    assets
    Opening balance as at 1.11.2015 -350 -909 -1,075- -2,334
    Depreciation of current accounting period --74 -461 - -535
    Decreases ---- -
    Losses from impairment of assets ---- -
    Balance as of 31.10.2016 -350 -983 -1,536-
    -2,869
    Opening balance as at 1.11.2016 -350 -983 -1,536- -2,869
    Depreciation of current accounting period --69 -490 - -559
    Decreases ---- -
    Losses from impairment of assets ---- -
    Balance as of 31.10.2017 -350 -1,052 -2,026-
    -3,428
    Carrying value
    As of 1.11.2015 3,390 3,055 950- 7,395
    As of 31.10.2016 3,390 2,981 75525 7,151
    As of 1.11.2016
    3,390 2,981 75525 7,151
    As of 31.10.2017 3,390 2,912 420 230 6,952
    Valuable rights are represented mainly by trademarks related to Aquapark Tatralandia.
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    15. Property, Plant and Equipment (continued)
    In the period between 1 November 2015 and 31 October 2016, the Company carried out investments of 13,784 ths. EUR. The
    Company acquired the Hotel Hrebienok in value of 2,500 ths. EUR, the surf wave in the Aquapark Tatralandia in value of
    2,800 ths. EUR and started to construct a new Krupová – Kosodrev ina cableway in the amount of EUR 4,000 ths, and made a
    few minor investments: improvement and expansion of ski runs, investments in hotels and restaurants on slopes in the centres
    and other operating investments.
    Unused assets and fully depreciated used assets
    As at 31 October 2017 and 2016, the Company did not hold any unused assets. As at 31 October 2017 the Company used fully
    depreciated assets in acquistion cost 8,549 ths. EUR (2016: 6,210 ths. EUR).
    Impairment loss
    For the period ended on 31 October 2016 and 31 October 2017, the Company did not show any loss from impairment of land,
    buildings and equipment.
    Property Insurance
    in TEUR 31.10.2017 31.10.2016
    Natural disaster and vandalism 335,682 302,900
    General machinery risks 20,084 20,470
    Liability for damage 15,000 15,000
    Security
    As at 31 October 2017, Land, buildings and equipment in the amount of 220,084 ths. EUR were used as the security of the
    bank loans (as at 31 October 2016: in the amount of 204,052 ths. EUR).
    Capitalised financial cost
    As at 31 October 2017, the Company did not capitalise any interest on loans into assets (as at 31 October 2016: the Company
    did not capitalise any interest on loans into assets).


    190 191
    Separate Financial Statements Separate Financial Statements
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    18.Investments in Subsidiaries
    in TEUR 31.10.2017 31.10.2016
    Ś laskieWesoleMiasteczko Sp. z o. o. (75% stake) 7,450 7,450
    SzczyrkowskiOsrodeNarciarski S.A. (97% stake) 7,191 7,191
    Tatry mountain resorts CR, a.s. (100% stake) 75 -
    Tatry mountain resorts PL, a.s. (100% stake) 27 -
    Total 14,743 14,641
    On 5 May 2017, company Tatry mountain resorts CR, a.s. was incorporated, with share capital in total amount of 2,000 ths.
    CZK (75 ths. EUR). The Company became sole shareholder in th e new company. The new company will realize aquisitions in
    Czech republic.
    On 30 September 2017, company Tatry mountain resorts PL, a.s., with share capital in total amount of 25 ths. EUR was
    incorporated. The Company became sole shareholder in the new company. The new company will realize aquisitions in
    Poland.
    On 14 April 2015, the Company acquired a 70% stake in Polish company PS Rozrywka, which was later renamed to Ślaskie
    Wesole Miasteczko Sp. z o. o. (hereinafter referred to as SWM) . For such a 70% stake, the Company paid 6,727 ths. EUR. On
    4 August 2015, the Company purchased an additional 5% stake, in a total amount of 723 ths. EUR. The company SWM is the
    operator of a theme park in the town of Chorzow, Poland. Th e total value of the assets, as the dat of acquisition after
    revaluation at the fair value was 9,489 ths. EUR, and the tota l value of equity was 9,077 ths. EUR. No impairment provision
    was reported for the said company as at 31October 2017 and 2016.
    On 5.3.2014, the Company purchased 97% shares of Szczyrkowski Os rode Narciarski S.A. (hereinafter referred to as Szczyrk),
    in a total amount of 7,191 ths. EUR. It is a company holding a nd running a ski centre in Poland. The total value of the assets,
    as the date of acquisition after revaluation at the fair value was 13,321 ths. EUR, and the total value of equity was 9,031 ths .
    EUR. No impairment provision was reported for the said company as at 31 October 2017 and 2016.
    19. Deferred Tax Asset, Deferred Tax Liability
    Deferred tax asset (liability) was posted for the following items:
    in TEUR Receivables
    Payables Total
    31.10.2017 31.10.2016 31.10.2017 31.10.2016 31.10.2017 31.10.2016
    Temporary differences related to:
    Non-current fixed and intangible
    assets - - -21,251 -20,424
    -21,251 -20,424
    Investments Property - - -848 -872
    -848 -872
    Losses from impairment of trade
    receivables and other assets 25 34
    --
    25 34
    Provisions and liabilities 500 479--
    500 479
    Tax losses 124 260--
    124 260
    Set-off -649 -773 649 773
    - -
    Total - - -21,450 -20,523 -21,450 -20,523
    Deferred tax asset was not posted for the following items (tax base):
    in TEUR
    31.10.2017 31.10.2016
    Tax losses - -
    Total - -
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    17.Investments Property
    in TEUR
    31.10.2017 31.10.2016
    Acquisition price
    Opening balance as at 1.11.2016 / 1.11.2015 6,554 6,554
    Transfer from tangible assets (net) - -
    Transfer from IP to available-for-sale assets - -
    Revaluation at fair value - -
    Balance as of 31.10.2017 / 31.10.2016 6,554 6,554
    As at 31 October 2017, the investments in real property cover three hotels (SKI, Liptov, Kosodrevina) and the accommodation
    facility Otupné with the aggregate book value of 1,982 ths. EUR (a s at 31 October 2016: 1,982 ths. EUR), which are leased out
    to third parties that operate them, as well as forest areas and lots of land obtained as an acquisition in 2009 in the book val ue of
    4,572 ths. EUR (as at 31 October 2016: 4,572 ths EUR). The value of the hotels was estimated by the management (see par.
    3(a) – - Significant Accounting Estimates and Assumptions, Valuation of Investments in Property). The value of the land was
    determined by the management using market prices, and the final value is based on an estimate of the market price per square
    meter, depending on the type of land and market transactions for similar lots of land.
    As at 31 October 2017, the Company management, based on current market conditions, revalued the value of investments
    in property and came to the conclusion, that the value of contractual and market lease did not change significantly and
    therefore there was no need to adjust the value of investments in property.
    In the period between 1 November 2016 and 31 October 2017, revenue from investments in property accounted for 179 ths.
    EUR and direct operating cost related to investment in property was 54 ths. EUR (between 1 November 2015
    and 31 October 2016: revenue from investments in property accounted for 213 ths. EUR, and direct operating cost related
    to investment in property was 61 ths. EUR).
    Security
    As at 31 October 2017, a part of investments in property in the am ount of 1,782 ths. EUR were used as the security of the bank
    loans (as at 31 October 2016: in the amount of 1,782 ths. EUR).



    192 193
    Separate Financial Statements Separate Financial Statements
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    21. Loans Provided (continued)
    GALAXO a.s. with a fixed interest rate of 5% p.a., the amount of unpaid accumulated interest as at 31 October 2017 is 15 ths.
    EUR (as at 31 October 2016: 7 ths. EUR), loan extended to company SON Partner in amount of 903 ths. EUR (as at 31
    October 2016: 829 ths. EUR) with a fixed interest rate of 7% p.a., the amount of unpaid accumulated interest on such amount
    as at 31 October 2017 is 85 ths. EUR (as at 31 October 2016: 28 ths. EUR), loan extended to company Korona Ziemi in
    amount of 917 ths. EUR (as at 31 October 2016: 818 ths. EUR) w ith a fixed interest rate of 7% p.a., the amount of unpaid
    accumulated interest on such amount is as at 31 October 2017 is 138 ths. EUR (as at 31 October 2016: 83 ths. EUR) and an
    interest-free loan of 180 ths. EUR extend ed to company AIRAVATA Holding s.r.o..
    As at 31 October 2017, long-term loans represent loan extended to company Ślaskie Wesole Miasteczko Sp. z o.o. (SWM) in
    amount of 14,666 ths. EUR (as at 31 October 2016: 3,257) with a fixed interest rate of 7% p.a., the amount of unpaid
    accumulated interest on such amount as at 31 October 2017 is 701 ths. EUR (as at 31 October 2016: 41 ths. EUR), two loans
    extended to company Szczyrkowski Osrodek Narciarski S.A. (SON) in amount of 8,937 ths. EUR with a fixed interest rate of
    7% p.a., the amount of unpaid accumulated interest on such amount as at 31 October 2017 is 432 ths. EUR and loan in amount
    of 9,151 ths. EUR with a fixed interest rate of 7% p.a., the amount of unpaid accumulated interest on such amount as at 31
    October 2017 is 606 ths. EUR .Long-term loans further include loan in amount of 1,601 ths. EUR extended to company
    EUROCOM Investment, s.r.o. with a fixed interest rate of 7% p.a., interest-free loan in amount of 853 ths. EUR extended to
    Melida, a.s. (as at 31 October 2016: 810 ths. EUR), loan in amount of 53 ths. EUR (as at 31 October 2016: 78 ths. EUR)
    extended to company HOLLYWOOD C.E.S., with a fixed interest rate of 5% p.a., the amount of unpaid accumulated interest
    on such amount as at 31 October 2017 is 0.2 ths. EUR (as at 31 October 2016: 0.3 ths. EUR), loan in amount of 68 ths. EUR
    (as at 31 October 2016: 68 ths.EUR) extended to Mr. Čukan with a fixed interest rate of 4% p.a., the amount of unpaid
    accumulated interest on such amount is 0 ths. EUR and loan in amount of 68 ths. EUR (as at 31 October 2016: 68 ths. EUR)
    extended to Mr. Lipták with a fixed interest rate of 4% p.a., the amount of unpaid accumulated interest on such amount is 0 ths .
    EUR.
    22. Trade receivables
    in TEUR 31.10.2017 31.10.2016
    Trade receivables 5,505 2,681
    Value adjustments to receivables -118 -157
    Total 5,387 2,524
    Short-term 5,387 2,524
    Long-term - -
    Total 5,387 2,524
    As at 31 October 2017, trade receivables amount to 5,387 ths. EUR and comprise current operating and barter receivables. As
    at 31 October 2016, trade receivables involved current operating and barter receivables amounting to 2,524 ths. EUR.
    The ageing structure of receivables is as follows:
    in TEUR 31.10.2017 31.10.2016
    Gross Value
    adjustment Net Gross Value
    adjustment Net
    Within due period 4,639- 4,639 1,518
    -1,518
    Overdue within 30 days 396- 396 819 - 819
    Overdue from 30 days to 180 days 194 -30 164 261 -80 181
    Overdue from 180 days to 365 days 35 -5 30 21 -15 6
    Overdue over 365 days 241 -83 158 62 -62 -
    Total 5,505 -118 5,387 2,681 -157 2,524
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    19. Deffered Tax Asset, Deferred Tax Liability (continued)
    Deferred tax asset from unredeemed losses from previous periods is posted only up to the amount to which it may be probably
    redeemed in the future against future tax profits.
    Expected last periods for redemption of tax losses are as follows:
    in TEUR 2018 2019 post 2019
    Tax losses 591- -
    The maximum period for redemption of tax loss created before 1 January 2010 is 7 years; losses created after 1 January 2010
    had a 5 years period. Based on legislative changes, from 1 Ja nuary 2014, losses created after 1 January 2010 have a 4 years
    period, and the Company can also apply evenly maximum 25% of the given tax losses per year.
    20. Inventory
    in TEUR 31.10.2017 31.10.2016
    Goods 3,087 2,754
    Material 1,230 1,192
    Assets available for sale 1,446 1,605
    Total 5,763 5,551
    Assets held for sale consist of Chalety Otupné phase II. (1,356 ths. EUR) and phase III. (90 ths. EUR), which was completed
    by the Company and will be consequently sold to 3rd parties. Proceeds from sale of 3 chalettes will be recognized in 2018.
    As at 31 October 2017, inventory of 5,763 ths. EUR (as at 31 Oc tober 2016: 5,551 ths. EUR) was used to secure bank loans.
    21. Loans Provided
    in TEUR 31.10.2017 31.10.2016
    Short-term 21,307 31,042
    Long-term 35,397 7,542
    Total 56,704 38,584
    As at 31 October 2017, short-term loans represent a paid-up loan extended to company JASNÁ Development s.r.o. with a fixed
    interest rate of 5% p.a., the amount of unpaid accumulated in terest as at 31 October 2017 represents 43 ths. EUR (as at 31
    October 2016 it is 43 ths. EUR), a paid-up loan extended to company EUROCOM Investment, s.r.o. with a fixed interest rate
    of 7% p.a., the amount of unpaid accumulated interest as at 31 October 2017 represents 91 ths. EUR, loan in amount of 2,309
    ths. EUR extended to the owner of Penzión Energetik (as at 31 October 2016: 2,217 ths. EUR), with a fixed interest rate of
    5% p.a., the amount of unpaid accumulated interest from this amount as at 31 October 2017 is 462 ths. EUR (as at 31 October
    2016: 370 ths. EUR), a loan in amount of 1,891 ths. EUR (a s at 31 October 2016: 1,722 ths. EUR) extended to company
    TIKAR d.o.o. with a fixed interest rate of 10% p.a., the amount of unpaid accumulated interest on such amount as at 31
    October 2017 is 186 ths. EUR (as at 31 October 2016: 17 ths. EUR), two loans extended to company AIRAVATA Holding
    s.r.o. in amount of 200 ths. EUR with a fixed interest rate of 5% p.a., the amount of unpaid accumulated interest on such
    amount as at 31 October 2017 is 4 ths. EUR and a loan in amount of 202 ths. EUR with a fixed interest rate of 5% p.a., the
    amount of aunpaid accumulated interest as at 31 October 2017 is 2 ths. EUR and a paid-up loan extended to company
    AIRAVATA Holding s.r.o. (as at 31 October 2016: 10,085 ths. EUR) with a fixed interest rate of 5% p.a., the amount of
    unpaid accumulated interest as at 31 October 2017 is 1,768 ths. EUR (as at 31 October 2016: 2,180 ths. EUR). Short-term
    loans are further represented by a loan extended to company 1. Tatranská, akciová spolo čnos ť in amount of 12,626 ths. EUR
    (as at k 31 October 2016: 11,789 ths. EUR) with a fixed interest rate of 7% p.a., the amount of unpaid accumulated interest on
    such amount as at 31 October 2017 is 2,983 ths. EUR (as at k 31 October 2016: 2,317 ths. EUR), loan in amount of 177 ths.
    EUR (as at k 31 October 2016: 161 ths. EUR) extended to company


    194 195
    Separate Financial Statements Separate Financial Statements
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    25.Financial investments
    in TEUR
    31.10.2017 31.10.2016
    Financial instruments measured at fair value through profit or loss 2,194
    2,195
    Available-for-sale securities -
    64
    Total 2,194
    2,259
    As at 31 October 2017, financial instruments measured at fair value through profit/loss from operations represent mainly the
    19% investment in company CAREPAR a.s. in the value of 2,041 ths. EUR (as at 31 October 2016: 2,041 ths. EUR), which
    owns 50% share of the company MELIDA a.s., which leases and operates the ski centre Špindlerov Mlyn. Other financial
    instruments represent an investment in company Korona Ziemi Sp. z o.o. in the value of 119 ths. EUR (as at 31 October 2016:
    119 ths. EUR), a monetary investment in Tatranské dopravné družstvo, which is engaged in intermediary activities in the field
    of services in amount of 33 ths. EUR (as at 31 October 2016: 33 ths. EUR) and the investment in company TIKAR D.O.O. in
    amount of 1 ths. EUR (as at 31 October 2016: 1 ths. EUR).
    On 14 September 2016, the Company acquired a 51% share in the Croatian company TIKAR D.O.O. (hereinafter referred to as
    TIKAR). For such a 51% stake, the Company paid 1.4 ths. EUR (10.2 ths. HRK). On 21 October 2016, a contract on the
    increase of capital of the company TIKAR and entry of a new shareholder was signed. The contract increased the capital from
    the original 20 ths. HRK to 2 500 ths. HRK, while th e stock of the Company in TIKAR decreased to 0.408%.
    On 17 march 2010, the Company purchased 3,850 shares of Comp agnie des Alpes (SA), which is a French company traded on
    the Paris stock exchange, engaged in the field of ski resorts and summer theme parks. The Company purchased the said shares
    as a financial investment. The shares are available for sale, and are measured at the fair value into equity based on actual pr ices
    on the stock exchange. The Company sold shares in 2017. As at 31 October 2017, their value is 0 ths. EUR (as at 31 October
    2016: 64 ths. EUR).
    26. Cash and Cash Equivalents
    in TEUR 31.10.2017 31.10.2016
    Cash 13 13
    Stamps and vouchers - -
    Current accounts with banks 6,049 5,933
    Total 6,062 5,946
    The Company can freely dispose of bank accounts.
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    22. Trade receivables (continued)
    As at 31 October 2017 and 31 October 2016, the value of value adjustments consisted of value adjustments to current operating
    receivables.
    Development of value adjustment during accounting period is shown in the following overview:
    in TEUR 31.10.2017 31.10.2016
    Balance as at 1.11.2016 / 1.11.2015 157
    71
    Creation of value adjustment 41
    95
    Use -58
    -4
    Reversal of value adjustment -22
    -5
    Balance as at 31.10.2017 / 31.10.2016 118
    157
    As at 31 October 2017, receivables in amount of 5,387 ths. EUR (as at 31 October 2016: 2,524 ths. EUR) were used to secure
    bank loans.
    23.Other receivables
    in TEUR 31.10.2017 31.10.2016
    Advance payments made 26,835
    27,866
    Total 26,835
    27,866
    Short-term 24,179
    20,037
    Long-term 2,656
    7,829
    Total 26,835
    27,866
    Advance payments made for assets are mainly related to future acquisitions amounting to 20,839 ths. EUR (as at 31 October
    2016: 20,839 ths. EUR), and to unfinished investment activity in the amount of 5,137 ths. EUR (as at 31 October 2016: 6,436
    ths. EUR). The Company made in particular an advance payment for a future acquisition which is the company running cable
    ways. The Company plans to buy this company in the future. A contract is made with AIRAVATA Holding s.r.o..
    24. Other Assets
    in TEUR 31.10.2017 31.10.2016
    Prepaid expenses and accrued income 219 761
    Other tax assets - 22
    Other Assets 257 279
    Total 476 1,062
    Short-term 476 1,062
    Long-term - -
    Total 476 1,062



    196 197
    Separate Financial Statements Separate Financial Statements
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    27. Equity (continued)
    Legal reserve fund
    As at 31 October 2017, the legal reserve fund amounts to 4,930 ths. EUR (as at 31 October 2016: 4,449 ths. EUR). According
    to the Slovak legislation, the creation of legal reserve fund is compulsorily created on a yearly basis in the minimum amount of
    10% of the Company net profit and at least up to 20% of subs cribed share capital (cumulatively). The legal reserve fund can
    only be used for the payment of Company losses, and cannot be used for the payment of dividends. The calculation of reserve
    fund is made according to Slovak legal regulations.
    Reduction in share capital
    On 22 August 2013, an extraordinary general meeting was held, which decided on a reduction in the share capital of the
    Company Tatry Mountain Resorts, a.s. from 221,338 ths. EUR to 46,950 ths. EUR, i.e. by 174,388 ths. EUR. The change in
    the share capital became effective on 22 October 2013 as the day of making an entry of the reduction in the share capital into
    the respective Commercial Register. After the reduction of th e Company share capital, the nominal value per share changed
    from original 33 EUR per share to 7 EUR per share.
    Profit Distribution
    For the fiscal year ended on 31 October 2017, the Company management proposes the distribution of total profit in the amount
    of 9,223 ths. EUR as follows:
    -
    Allocation to the reserve fund in amount of 922 ths. EUR
    -
    Balance in amount of 8,301 ths. EUR, transfer to undistributed profit from previous periods
    28. Loans and Borrowings
    in TEUR 31.10.2017 31.10.2016
    Loans and borrowings received 63,795 42,661
    Leasing 1,894 1,304
    Total 65,689 43,965
    Short-term
    9,122 6,711
    Long-term 56,567 37,254
    Total 65,689 43,965
    Loans and borrowings received as at 31 October 2017 and as at 31 October 2016 are stated in the following table:
    Creditor Interest rate type Maturity date Unpaid amount
    as at
    31.10.2017
    in TEUR
    Tatra banka, a.s. 3M EURIBOR + average 2.79% 30.9.2020 –
    31.12.2022 46,500
    Poštová banka, a.s. 12M EURIBOR + 4.571% p.a. 30.6.2022 9,800
    Ś laskie Wesole Miasteczko Sp. z o. o. 7% p.a. 31.12.2020 7,434
    Tatra-Leasing, s.r.o. 3M EURIBOR + 2.5% p.a. 2.2.2018 21
    Heineken Slovensko a.s. - 30.11.2018 40
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    27.Equity
    Share capital and share premium
    As at 31 October 2017 and 31 October 2016, the approved, subscr ibed and fully paid-up share capital consisted of 6,707,198
    ordinary shares in the nominal value of 7 EUR per share.
    On 12 April 2010, issues of shares marked ISIN: CS0009011952, series 01,02 , ISIN: SK1120002110, series 01, ISIN:
    SK1120005527, series 01, ISIN: SK1120006061, series 01, ISIN: SK1120009156, series 01 ceased to exist and were
    consolidated into one issue ISIN SK1120010287.
    On 28 April 2017, an ordinary general meeting of Tatry mountain resorts, a.s. was held. The general meeting decided, among
    other things, on the distribution of profit Tatry mountain reso rts, a.s. generated in the period between 1 November 2015 and 31
    October 2016 according to the financial statements compiled for that accounting period, in the amount of 4,814 ths. EUR as
    follows:
    - Allocation to the reserve fund in amount of 481 ths. EUR
    - Balance in amount of 4,333 ths. EUR, transfer to undistributed profit from previous periods
    Shareholders have a right to the payment of dividends, and the value of share vote in the Company general meeting is
    determined as a ratio of the value of one share and the total va lue of share capital. The following table presents the Company
    shareholders and the number of shares, ownership interest and voting rights.
    31 October 2017 Number Ownership Voting
    of shares interest rights
    % %
    C.I. CAPITAL INDUSTRIES LIMITED 1,309,139
    19.5% 19.5%
    FOREST HILL COMPANY, s.r.o. 1,030,919
    15.4% 15.4%
    NIKROC INVESTMENTS LIMITED 897,771
    13.4% 13.4%
    KEY DEE LIMITED 664,058
    9.9% 9.9%
    TINSEL ENTERPRISES LIMITED 638,385
    9.5% 9.5%
    RMSM1 LIMITED 588,166
    8.8% 8.8%
    Minority shareholders 1,578,760
    23.5% 23.5%
    Total 6,707,198100% 100%
    31 October 2016 Number Ownership Voting
    of shares interest rights
    % %
    C.I.CAPITAL INDUSTRIES LIMITED 1,262,139
    18.8% 18.8%
    BELGOMET s.r.o. 1,030,919
    15.4% 15.4%
    NIKROC INVESTMENTS LIMITED 897,771
    13.4% 13.4%
    KEY DEE LIMITED 664,058
    9.9% 9.9%
    TINSEL ENTERPRISES LIMITED 635,490
    9.5% 9.5%
    RMSM1 LIMITED 588,166
    8.8% 8.8%
    Minority shareholders 1,628,65524.3% 24.3%
    Total 6,707,198100% 100%
    Profit per share
    31.10.2017 31.10.2016
    Profit for the period in TEUR 9,223 4,814
    Weighted average number of ordinary shares 6,707,198 6,707,198
    Profit per share in EUR 1.375 0.718



    198 199
    Separate Financial Statements Separate Financial Statements
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    29.Trade Liabilities
    in TEUR 31.10.2017 31.10.2016
    Trade Liabilities 7,147 6,096
    Unbilled deliveries 842 698
    Total 7,989 6,794
    Short-term 7,989 6,794
    Long-term - -
    Total 7,989 6,794
    As at 31 October 2017, overdue liabilities amounted to 832 ths. EUR (as at 31 October 2016: 689 ths. EUR).
    30.Other Liabilities
    in TEUR 31.10.2017 31.10.2016
    Liabilities towards employees 3,051 2,842
    Advances received 2,355 1,732
    Deferred revenues 3,429 2,970
    Liabilities to shareholders from reduction in share capital 215 218
    Other 1,847 1,554
    Total 10,897 9,316
    Short-term
    10,897 9,316
    Long-term - -
    Total 10,897 9,316
    As at 31 October 2017, advance payments received comprise in particular of advance payments for purchase of Chalets in the
    amount of 892 ths. EUR (as at 31 October 2016: 18 ths. EUR), advance payments for apartments in Hotel Pošta in the amount
    of 0 ths. EUR (as at 31 October 2016: 664 ths EUR) and advance payments received for hotel stays in the amount of 1,263
    ths. EUR (as at 31 October 2016: 1,050 ths. EUR).
    As at 31 October 2017, liabilities to employees represent mainly a provision for bonuses for the fiscal year between 1
    November 2016 and 31 October 2017 in the amount of 2,099 ths. EUR (as at 31 October 2016: 2,014 ths. EUR) and wage
    liabilities to employees in the amount of 871 ths. EUR (as at 31 October 2016: 772 ths. EUR).
    As at 31 October 2017, liabilities to shareholders from reduction in share capital are in the amount of 215 ths. EUR (as at 31
    October 2016: 218 ths. EUR) and contain in particular the outstanding liability from reduction in share capital are in the tota l
    amount of 174,388 ths. EUR.
    As at 31 October 2017, the deferred income includes mainly the amount of 2,687 ths. EUR for accrual of ski passes sold -
    “Šikovná sezónka“ (as at 31 October 2016: 2,199 ths. EUR), the amount of 118 ths. EUR is rentals for the premises of J&T
    BANKA, a.s., a branch of a foreign bank on the premises of the Grandhotel Starý Smokovec (as at 31 October 2016: 163 ths.
    EUR), the amount of 84 ths. EUR is a subsidy for the Hotel Tri studni čky (as at 31 October 2016: 87 ths. EUR). The reserve
    for discounts on purchases was as at 31 October 2017 in total amount of 384 ths. EUR (384 ths. EUR as at 31 October 2016).
    As at 31 October 2017, the amount of other liabilities contains also 652 ths. EUR liabilities related to social security (as at 31
    October 2016: 559 ths. EUR).
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    28. Loans and Borrowings (continued)
    Creditor Interest rate type Maturity date Unpaid amount
    as at
    31.10.2016
    in TEUR
    Tatra banka, a.s. 3M EURIBOR + average 2.5% p.a. 30.9.2020 42,480
    Tatra-Leasing, s.r.o. 3M EURIBOR + 2.5% p.a. 26.3.2017 34
    Tatra-Leasing, s.r.o. 3M EURIBOR + 2.5% p.a. 17.12.2016 15
    Tatra-Leasing, s.r.o. 3M EURIBOR + 2.5% p.a. 2.2.2018 82
    Heineken Slovensko a.s. - 30.11.2018 50
    The weighted average of interest rates for loans and borrowings as at 31 October 2017 accounted for 3.61% (as at 31 October
    2016: 2.75%). The interest is due on a monthly basis. For more information, see par. 12 – Interest Income and Expense.
    In the period between 1 November 2016 and 31 October 2017, the loans granted by Tatra banka, a.s. were consolidated into a
    single loan in a total value of 60,500 ths. EUR. The unus ed portion as at 31 October 2017 is 46,500 ths. EUR.
    In period between 1 November 2016 and 31 October 2017, the Company drawn new loan from Poštová banka, a.s. in total
    amount of 10,000 ths. EUR. The balance of loan as at 31 Octo ber 2017 is 9,800 ths. EUR (as at 31 October 2016: 0 ths. EUR).
    Security
    The following assets were used as a security of bank loans: lo ts of land, technology and operating buildings of mountain lift
    facilities: lifts, chair-lift rope ways (hereinafter: RWs), fu nicular RWs, aerial RWs, gondola RWs, transformer stations,
    economic buildings and structures: Hotel Tri Studni čky, Hotel Srdie čko, Hotel Kosodrevina, Hotel Liptov, Hotel SKI, former
    telecommunications building, Bungalows. All movable assets of the centres Jasná and High Tatras are put into pledge, also
    including trade receivables.
    As at 31 October 2017, lots of land, buildings and equipment, investments in real property, inventory and receivables of
    233,016 ths. EUR were used as a security of bank loans (a s at 31 October 2016: in the amount of 213,909 ths. EUR).
    Maturity of liabilities from financial leasing as at 31 October 2017 was as follows:
    in TEUR Principal Interest
    Payments
    Less than 1 year 807 39
    846
    1 - 5 years 1,087 26
    1,113
    Total 1,894 65
    1,959
    Maturity of liabilities from financial leasing as at 31 October 2016 was as follows:
    in TEUR Principal Interest
    Payments
    Less than 1 year 602 27
    629
    1 - 5 years 702 16
    718
    Total 1,304 43
    1,347



    200 201
    Separate Financial Statements Separate Financial Statements
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    32. Bonds Issued (continued)
    Both bonds present a book-entry security in bearer form, and their issue was approved by the National Bank of Slovakia. The
    liability resulting from the bond TMR II subordinate to the liability from the bond TMR I. The Company account was credited
    with financial resources from both of the bonds on 11 February 2014 in the total amount of 180,582 ths. EUR, including the
    aliquot interest income from the bond TMR I in the amount of 582 ths. EUR.
    The Company undertook to achieve the value of the Senior DEBT financial indicator (excluding the TMR II bonds)/EBITDA
    at the level of max. 6,5 and the value of the DSCR financial indicator (including the set-off of cost against the payment of
    coupons from the TMR I and TMR II bonds) at the level of min.1,00.
    Both of the issues are associated with regular payment of the coupon which is provided by the Company from its own
    resources. Payment of the coupon from the TMR II issue is only possible on an annual basis, after submitting the final audited
    consolidated financial statements for the previous accounting period to Tatra banka a.s., under which the following financial
    indicators will be met: (i) net profit after taxes will be higher than 1,00 EUR and at the same time (ii) the Senior DEBT
    financial indicator (excluding the TMR II bonds)/EBITDA at the le vel of max. 5.25. If the aforementioned financial indicators
    were not fulfilled, the coupon from the TMR II issue will be capitalised, i.e. unpaid and further bearing interest, in particul ar
    until: (i) the date of final maturity of the TMR II bonds, or (ii) the day when the aforementioned Senior DEBT financial
    indicator (excluding the TMR II bonds)/EBITDA is max. 3,00 (how ever, the DSCR contractual condition of min. 1x has to be
    observed).
    Out of the total value of liability of 184,842 ths. EUR (as at 31 October 2016: 184,702 ths. EUR), a short-term portion amounts
    to 6,022 ths. EUR (as at 31 October 2016: 6,022 ths. EUR) a liability from coupon due over the course of 2017 and 2018.
    Security
    A right of lien was created on non-current assets of the Company, in the total amount of 79,819 ths. EUR, as the security
    for bonds issued. It is property which is not used as a security for other Company liabilities.
    33. Data on Fair Value
    The following table contains data on the book value and fair value of Company financial assets and liabilities, that are not
    accounted for in fair value:
    in TEUR Carrying value
    Fair value
    31.10.2017 31.10.2016 31.10.2017 31.10.2016
    Financial assets
    Loans provided (note 21) 56,70438,58457,262 38,418
    Other receivables (note 23) 21,69821,43021,698 21,430
    Investments in subsidiaries (note 18) 14,74314,64114,743 14,641
    Trade receivables (note 22) 5,3872,5245,387 2,524
    Cash and Cash Equivalents (note 26) 6,0625,9466,062 5,946
    Other assets (note 24) 476129476 129
    Total 105,07083,254 105,628 83,088
    in TEUR Carrying value
    Fair value
    31.10.2017 31.10.2016 31.10.2017 31.10.2016
    Financial obligations
    Loans and Borrowings (note 28) 65,68943,96566,055 44,512
    Bonds issued (note 32) 184,842 184,702
    189,122 194,385
    Trade payables (note 29) 7,9896,7947,989 6,794
    Other payables (note 30) 10,8974,67110,897 4,671
    Total 269,417 240,132 274,063 250,362
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    30. Other Liabilities (continued)
    The creation and drawing from the social fund during the accounting period are presented in the table below:
    in TEUR 31.10.2017 31.10.2016
    Balance as at 1.11.2016 / 1.11.2015 21 -
    Creation of social fund against expenses 80 156
    Drawing -54 -135
    Balance as at 31.10.2017 / 31.10.2016 47 21
    31.Provisions
    in TEUR Unused
    vacations Other Total
    Opening balance as at 1.11.2016 217157 374
    Creation of provisions during the year 307- 307
    Reversal of provisions during the year --
    Use of provisions during the year -217-133 -350
    Balance as at 31.10.2017 / 31.10.2016 30724 331
    31.10.2017 31.10.2016
    Short-term 307 217
    Long-term 24 157
    Total 331 374
    32.Bonds Issued
    During the accounting period 2014, the Company issued two bond issues in the total nominal value of 180,000 ths. EUR,
    which, starting from 19 February 2014, are admitted to tradin g on the Bratislava Stock Exchange. Details on particular
    bonds are presented in the table below.
    in TEUR
    ISINDate of
    issue Maturity
    date Initial
    currency of the issue Face value
    of the issue
    in the initial currency in '000 Interest
    rate p.a. in % Effective
    interest
    rate p.a. in % Carrying
    value as
    of 31.10.2017 Carrying
    value as
    of 31.10.2016
    Name
    TMR I
    4,50%/2018 SK41200
    09606 17.12.2013 17.12.2018 EU
    R 70,000 4.5 4.8 70,916 70,774
    TMR II
    6,00%/2021 SK41200
    09614 5.2.2014 5.2.2021 EUR 110,000 6.0 6.17 113,926 113,928
    Total 184,842 184,702
    Short-term
    6,022 6,022
    Long-term 178,820 178,680
    Total 184,842 184,702



    202 203
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    35. Information on Risk Management (continued)
    As at 31 October 2017, the Company was exposed to the following credit risk:
    in TEUR Legal
    entities Banks Other
    financial
    institutions Other Total
    Financial assets
    Loans Provided 56,567-- 137 56,704
    Other receivables 21,379 319- - 21,698
    Investments in Subsidiaries 14,743-- - 14,743
    Trade receivables 5,387-- - 5,387
    Financial investments 2,194-- - 2,194
    Cash and Cash Equivalents - 6,049- 13 6,062
    Other Assets 444- 12 20 476
    Total 100,714 6,368 12 170 107,264
    As at 31 October 2016, the Company was exposed to the following credit risk:
    in TEUR Legal
    entities Banks Other
    financial
    institutions Other Total
    Financial assets
    Loans Provided 38,448-- 136 38,584
    Other receivables 21,159 271- - 21,430
    Investments in Subsidiaries 14,641-- - 14,641
    Trade receivables 2,524-- - 2,524
    Financial investments 2,259-- - 2,259
    Cash and Cash Equivalents - 5,933- 13 5,946
    Other Assets -- 4 125 129
    Total 79,031 6,2044 274 85,513
    Liquidity Risk
    Liquidity risks arise within general financing of the Company a nd management of financial positions. It covers the risk of
    insolvency regarding the financing of assets within the agreed maturity period and at the interest rate, and also the risk of a sset
    management at a reasonable price within an adequate timeframe. The Company management focuses on liquidity management
    and monitoring. Due to liquidity management, the management changed the accounting period to a fiscal year ended on 31
    October. In the first half of its accounting period, the Co mpany has a winter season, which represents 60% of Company
    income. According to the trend in the first half-year, the Company can affect the side of revenues and expenses sufficiently
    early, so that they are able to keep sufficient liquidity for Company’s operation. In the Vysoké Tatry centre, the seasonal nat ure
    is also balanced with a strong summer season, which ensures its more stable liquidity all year round.
    The following table presents an analysis of Company financial assets and liabilities grouped by the residual maturity. The
    analysis presents the most prudent variant of residual maturi ty including interest. Therefore, for liabilities, the earliest po ssible
    repayment is reported, and for assets, the latest possible repa yment is reported. Assets and liabilities which have no maturity
    are posted in the category “Without specification“.
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    33. Data on Fair Value (continued)
    As at 31 October 2017, Other receivables contain in particular an advance payment made for future acquisition, which is a
    company running cable ways, in the amount of 19,451 ths. EUR (as at 31 October 2016: 19,451 ths. EUR). The Company
    plans to buy this company in the future. A contract is made with AIRAVATA Holding s.r.o. for a period of one year, and for
    this reason, the book value of advance payment made is not materially different from its fair value.
    34. Operating Lease
    Leasehold on the part of a lessee
    The Company leases lots of land on which ski runs and cable ways are built, and leases some cars based on contracts on
    operating lease. The most significant contracts on the lease of land are concluded for a period of 30 years with an option for
    additional 10 years. The most significant contracts have the notice period of 1 year.
    Cost for operating lease for the period ended on 31 October 2017 shown in the profit/loss from operations amounted to 3,544
    ths. EUR (for the period ended on 31 October 2016: 2,711 ths. EUR).
    The amount of rent for the period in which contracts cannot be terminated, is as follows:
    in TEUR 31.10.2017 31.10.2016
    Within 1 year 2,923 2,126
    From 1 year to 5 years 8,386 6,288
    5 and more years 2,609 3,143
    Total 13,918 11,557
    35.Information on Risk Management
    This section provides details of risks to which the Company is exposed, and the method of management of the risks.
    The Company is exposed risks in the following areas:
    -Credit Risk
    - Liquidity Risk
    - Market Risk
    - Operational Risk
    The management is generally responsible for setting and control of Company risk management.
    Credit Risk
    The Company is exposed to this risk mainly with respect to trade receivables, lease receivables, other receivables, advance
    payments and loans provided. The volume of exposure to this risk is expressed as the book value of these assets in the balance
    sheet in case that no form of guarantees is provided. The book value of receivables, advance payments and loans provided
    expresses the highest possible book loss that would have been po sted if the counterpart completely fails in performing its
    contractual obligations, and all securities and guarantees woul d have a zero value. Therefore, this value far exceeds the
    expected losses which are included in the provisions for irrecoverable debts. Before signing major contracts the Company
    board at regular board meetings evaluates credit risk related to counterpart. In case of identifying significant risks, the
    Company withdraws from signing the contract.
    Separate Financial Statements Separate Financial Statements


    204 205
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    35. Information on Risk Management (continued)
    Financial obligations
    Loans and Borrowings -43,965 -46,651-1,287 -6,340 -39,024 - -
    Bonds Issued -184,702 -220,875-1,575 -8,175 -211,125 - -
    Trade Liabilities -6,794 -6,794-6,794 -
    - - -
    Other Liabilities -4,671 -4,671-4,671 -
    - - -
    Total -240,132 -278,991 -14,327 -14,515 -250,149 - -
    The Book value of Other receivables contains mainly advance payments made, which are not expected to be paid in cash, but
    by a transfer of shares.
    Currency Risk
    Due to the acquisition of subsidiaries in the Republic of Poland and due to providing a loan to and receiving a loan from these
    companies during 2016 and 2017, the Company is primarily exposed to the risk of changes in the exchange rate of Polish Zloty
    against the EUR. The management monitors regularly whether there is a large difference between foreign currency liabilities
    and receivables. As at 31 October 2016, the Company reported an investment in the subsidiary in the amount of 14,743 ths.
    EUR, and loans provided in the total amount 32,754 ths. EUR, out of which loans provided in Polish Zloty were in amount of
    23,289 ths. EUR. The other Company assets and liabilities are denominated in euro.
    Secondarily, there is a risk that the weakening of the Polish Zloty or of the Russian Ruble against the EUR would lead to
    reducing the number of visitors from the above stated countries. The Company management is not able to reliably quantify this
    risk.
    Sensitivity analysis
    1% strengthening of the EUR against the Polish Zloty would have the following effect on the financial assets and financial
    liabilities of the Company:
    Effect on the portfolio
    in TEUR
    2017 2016
    PLN -233 -420
    1% weakening of the EUR against the Polish Zloty would have an identical high but opposite effect on the financial assets
    and financial liabilities in comparison with strengthening.
    Interest Risk
    Company transactions are exposed to the risk of interest rate changes. The volume of this risk is equal to the amount of
    interest-bearing assets and interest-bearing liabilities, for which the interest rate differs, in the maturity period or in the period
    of change, from the present interest rate. Therefore, the period for which a fixed interest rate is determined for the financial
    instrument, expresses the exposure to the risk of changes in interest rates to which the Company is exposed.
    The table below presents Company exposure to the risk of changes in interest rates based on contractual maturity period of
    financial instruments.
    As at 31 October 2017 and as at 31 October 2016, the Company has the following assets and liabilities linked to interest rates:
    in TEUR
    31.10.2017 31.10.2016
    Fixed interest rate
    Assets 61,733 44,530
    Payables 192,276 184,702
    Variable interest rate
    Assets - -
    Payables 58,215 43,915
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    35. Information on Risk Management (continued)
    As at 31 October 2017, the Company was exposed to the following liquidity risk:
    in TEUR Carrying
    value Future
    cash flow Up to 3
    months 3 months
    up to 1 year 1 year up
    to 5 years Above 5
    years Without
    specification
    Financial assets
    Loans Provided 56,704 58,57314,193 7,977 35,550 853 -
    Other receivables 21,689 319- 319
    - - -
    Investments in Subsidiaries 14,743 14,743- -
    - - 14,743
    Trade receivables 5,387 5,3875,387 -
    - - -
    Financial investments 2,194 2,194
    --
    - - 2,194
    Cash and Cash Equivalents 6,062 6,0626,062 -
    - - -
    Other Assets 476 476476 -
    - - -
    Total 107,264 87,754 26,118 8,296 35,550 853 16,937
    Financial obligations
    Loans and Borrowings
    -65,689 -75,689-1,283 -7,545 -65,611 -1,250 -
    Bonds Issued -184,842 -211,119-1,575 -8,175 -201,369 - -
    Trade Liabilities -7,989 -7,989-7,989 -
    - - -
    Other Liabilities -10,897 -10,897-10,897 -
    - - -
    Total -269,417 -305,694 -21,744 -15,720 -266,980 -1,250 -
    As at 31 October 2017 the loans provided up to 1 year amount to 21,307 ths. EUR (as at 31 October 2016: 32,795 ths. EUR), a
    majority of which is payable on demand or by the end of October 2018. These loans will not be paid within 1 year. The
    Company plans to draw these funds as needed, for the purposes of financing the investment activity and acquisition. The
    expected drawdown of the loan provided is within 3 years.
    The Book value of Other receivables contains mainly advance payments made, which are not expected to be paid in cash, but
    by a transfer of shares within 3 years.
    The Company management plans to repay the bonds issued by the issue of new bonds.
    As at 31 October 2016, the Company was exposed to the following liquidity risk:
    in TEUR Carrying
    value Future
    cash flow Up to 3
    months 3 months
    up to 1 year 1 year up to
    5 years Above
    5 years Without
    specification
    Financial assets
    Loans Provided 38,584 41,4612,844 29,951 7,856 810 -
    Other receivables 21,430 271- 271
    - - -
    Investments in Subsidiaries 14,641 14,641-
    - - - 14,641
    Trade receivables 2,524 2,5242,524
    -- - -
    Financial investments 2,259 2,259-
    - - - 2,259
    Cash and Cash Equivalents 5,946 5,9465,946
    -- - -
    Other Assets 129 129129
    -- - -
    Total 85,513 67,231 11,443 30,222 7,856 810 16,900
    Separate Financial Statements Separate Financial Statements


    206 207
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    36.Related Parties
    Identification of related parties
    As provided in the following overview, the Company has relations of a related party with respect to its shareholders having
    significant influence in the Company, and with respect to other parties, as at 31 October 2017 and 31 October 2016 or during
    the period between 1 November 2016 and 31 October 2017 and 1 November 2015 and 31 October 2016:
    (1) Companies controlling jointly or having significant influence on the accounting entity and its subsidiary and associate
    companies
    (2) Jointly controlled companies in which the Company is a partner
    (3) Associates
    (4) The members of company top management or Company shareholders (see also par. 10 – Cost of staff)
    Information on remuneration of key management is stated in par. 10 – Cost of staff.
    Since none of the shareholders has a shareholding in th e Company exceeding 20% or any significant influence, the
    shareholders are not provided as related parties, and the above stated transactions or balances are not understood as
    transactions with related parties.
    The Company has the transactions provided below with respect to related parties:
    in TEUR Note:
    Receivables Payables Receivables Payables
    31.10.2017 31.10.2017 31.10.2016 31.10.2016
    Szczyrkowski Osrodek Narciarski S.A. 1
    18,155 44,950 -
    Ś laskie Wesole Miasteczko Sp. z o. o. 2 14,7097,436 4,796 8
    Key management
    68 - 68 -
    in TEUR Note:
    Revenues Costs Revenues Costs
    1.11.2016 -
    31.10.2017 1.11.2016 -
    31.10.2017 1.11.2015 -
    31.10.2016 1.11.2015 -
    31.10.2016
    Szczyrkowski Osrodek Narciarski S.A. 1
    374 1220 -
    Ś laskie Wesole Miasteczko Sp. z o. o. 2 567265 118 -
    Key management 2.5-2.5 -
    1 Szczyrkowski Osrodek Narciarski S.A. became a related party on 30 April 2014. 2 Ś laskie Wesole Miasteczko Sp. z o. o. became a related party on 1 May 2015.
    37. Subsequent Events
    On 13 December 2017, the Company paid the coupon of the TMR I bond in the amount of EUR 1,575 thousand.
    On 5 February 2018, the Company paid the coupon of the TMR II bond in the amount of EUR 6,600 thousand.
    The Company sold its 75% share in company Ślaskie Wesole Miasteczko Sp. z o. o. on 6 December 2017 to subsidiary
    company Tatry mountain resorts PL, a.s. for 30 mln. PLN.
    38. Capital Commitments and Capital Management
    During 2014, the Company issued two bond issues (see par. 32 – Bonds issued) in the total nominal value of 180,000 ths.
    EUR, which, starting from 19 February 2014, are admitted to trading on the Bratislava Stock Exchange. The Company
    undertook to achieve the value of the Senior DEBT financial indicator (excluding the TMR II bonds)/EBITDA at the level of
    max. 6,5 and the value of the DSCR financial indicator (incl uding the set-off of cost against the payment of coupons from the
    TMR I and TMR II bonds) at the level of min.1,00.
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    35. Information on Risk Management (continued)
    Sensitivity analysis for instruments with a variable interest rate
    Change by 100 basis points in interest rates would have the following effect on the profit/loss from operations and cash flow
    sensitivity:
    in TEUR Profit (Loss)
    100 bb growth 100 bb decline
    31 October 2017
    Instruments with variable interest rate -582 582
    Effect -582 582
    in TEUR Profit (Loss)
    100 bb growth 100 bb decline
    31. October 2016
    Instruments with variable interest rate -439 439
    Effect -439 439
    Company interest-bearing liabilities have a variable interest rate referring to EURIBOR. The Company considers the variable
    interest rate as the self-management of interest risk. During an economic expansion, the EURIBOR is growing, but at the same
    time, the population economic performance is growing, and the company has higher revenues and profits. During an economic
    recession, the situation is completely opposite.
    Operational Risk
    Operational risk is the risk of loss resulting from any fraud, una uthorised activities, failures, errors, inefficiency or failure of
    systems. The risk is created in all Company activities. Operational risk also includes the risk of legal disputes.
    The aim of the Company is to manage the operational risk to prevent any financial losses and detriment to the Company
    reputation within the cost-efficiency of cost spent on achieving this objective, while avoiding any measures preventing
    initiatives and creativity.
    The Company management has key responsibility for the implementation of inspections related to the operational risk
    management. The responsibility is supported by the implementati on of standards for the management of operational risk which
    is common for the whole Company. Operational risk is governed by a system of directives, minutes of meetings and control
    mechanisms. The Company
    has a controlling department which attempts to eliminate all operational risks through regular
    inspections.
    The Company is also exposed to the risk of unfavourable conditions with respect to the weather. The number of visitors in the
    centre depends on the snow and snowfall periods. Unfavourable conditions adversely affect the number of skiers and the
    revenue of profit/loss from operations. Warm weather can unreas onably increase the cost of snowmaking and reduce the area
    where skiing is possible. Historically, the Low Tatras and the High Tatras region had on average 80cm and 85cm of snow
    during the winter season, respectively. The start of winter season and snow conditions affect the perception of the whole
    season by skiers. The Company is not able to forecast reliably in any manner the snow conditions at the beginning of winter
    season. Also thanks to the system of snowmaking, the snow conditions during the winter are stable each year.
    Separate Financial Statements Separate Financial Statements


    208 209
    Tatry mountain resorts a.s.
    Notes to the Individual Financial Statements for the period from 1 November 2016 to 31 October 2017
    39.Capital Commitments and Capital Management (continued)
    Both of the issues are associated with regular payment of the coupon which is provided by the Company from its own
    resources. Payment of the coupon from the TMR II issue is only po ssible on an annual basis, after submitting the final audited
    consolidated financial statements for the previous accounting period to Tatra banka a.s., under which the following financial
    indicators will be met: (i) net profit after taxes will be higher than 1,00 EUR and at the same time (ii) the Senior DEBT
    financial indicator (excluding the TMR II bonds)/EBITDA at the le vel of max. 5,25. If the aforementioned financial indicators
    were not fulfilled, the coupon from the TMR II issue will be capitalised, i.e. unpaid and further bearing interest, in particul ar
    until: (i) the date of final maturity of the TMR II bonds, or (ii) the day when the aforementioned Senior DEBT financial
    indicator (excluding the TMR II bonds)/EBITDA is max. 3,00 (how ever, the DSCR contractual condition of min. 1x has to be
    observed).
    The Company management proceeds to capital management in order to ensure sufficient amount of resources for planned
    investments in that period for which investments were planned, if necessary in cooperation with bank loans.
    Before the date of merger with the parent company, no external requirements for capital management are linked either to the
    Group or to its subsidiaries.
    Over the course of the period between 1 November 2015 and 31 October 2016, no changes occurred in the Group management
    approach to capital management.
    40. Contingent Assets and Contingent Liabilities
    With respect to that many areas of Slovak law on taxation have not been sufficiently ascertained in practice, there is
    uncertainty in how tax offices will apply them. It is not possi ble to quantify the level of this uncertainty and it will only
    cease to exist when legal precedents or official interpretations of the relevant bodies are available.
    On 31 October 2007, the Company signed a contract on the right of lien in an enterprise, on receivables and movables in
    favour of the creditor Tatra banka, joint stock company, the subject of which is a lien on liabilities for the entire scope of
    liabilities, which are posted in the balance sheet as at 31 October 2016 and as at 31 October 2017.
    The Company has initiated several legal proceedings. The maximum amount of compensation in all legal proceedings can be
    up to 517 ths. EUR and accessions thereof.
    ............................................................................................................................... .....................................................
    Bohuš Hlavatý
    Jozef Hodek Tomáš Kimli čka Marián Vojtko
    The Chairman of the Member of the Person responsible for Person responsible for
    Board of Directors Board of Directors the compilation of Statements
    bookkeeping
    Separate Financial Statements Separate Financial Statements
    Independent Auditor‘s Report


    210 211
    Separate Financial Statements
    Independent Auditor‘s Report
    Separate Financial Statements
    Independent Auditor‘s Report


    212 213
    Separate Financial Statements Separate Financial Statements
    Independent Auditor‘s Report Independent Auditor‘s Report


    214 215
    Separate Financial Statements Separate Financial Statements
    Independent Auditor‘s Report


    STATEMENT BY THE BO AR D OF DIR ECTOR S


    218 219
    Statement by the Board
    of Directors
    The Board of Directors of Tatry mountain resorts, a.s. hereby states tha\řt according to its best
    knowledge Annual Report, Consolidated Financial Statements, and Separate\ř Financial
    Statements have been prepared in accordance with relevant regulations, a\řnd they present
    a true and accurate description of assets, liabilities, financial situ\řation, and comprehensive
    results of the Group (Tatry mountain resorts, a.s. and its subsidiaries\ř). The Board further
    states that Annual Report contains a true and accurate review of perform\řance, operating
    results, and position of the Group, as well as an explanation of key risks and uncertainty
    factors that the Group faces.
    Demänovská Dolina, February 26, 2018
    Bohuš Hlavatý Jozef Hodek
    Chairman of the Board of Directors, CEO Member of the Board of Directors, CFO


    TATRY MOUNTAIN RESORTS, a.s.
    e-mail: info @tmr.sk, www.tmr.sk Photo: Marek Hajkovský


    Treść w podglądzie może zawierać błędy powstałe podczas konwersji plików pdf.

Źródło: strona internetowa spółki, relacje inwestorskie, raporty bieżące i okresowe.

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WSZYSTKIE KOMUNIKATY SPÓŁKI
Informacje o spółce
Nazwa:Tatry Mountain Resorts AS
ISIN:SK1120010287
NIP:2020428036
EKD:
Adres: Demanovska Dolina 72 31 01 Liptovsky Mikulas, Słowacja
Telefon:+421445591505
www:www.tmr.sk
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2018-05-21 20-05-25
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