ANNUAL REPORT 2010

EnergY for living WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT OF THE PETROL GROUP AND PETROL D.D., LJUBLJANA FOR THE YEAR 2010

Petrol, Slovenska energetska družba, d.d. Dunajska c. 50, 1527 Ljubljana Phone: +386 1 / 47 14 232 Fax: +386 1 / 47 14 660 www.petrol.si

Published by: Petrol d.d. Content and graphic design: PM, poslovni mediji d.o.o. Edited and produced by: PM, poslovni mediji d.o.o. Photos: Peter Irman; Petrol d.d. archive Printed by: Tiskarna Schwarz

March 2011 WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 5 STATEMENT OF THE MANAGEMENT BOARD

ursuant to Article 60 a of the Companies Act, members of the Management Board and Supervisory Board of Petrol d.d., Lju- bljana represent that the annual report of the Petrol Group and Petrol d.d., Ljubljana for the year 2010, including the corpo- Prate governance statement, has been prepared and published in accordance with the Companies Act, Financial Instruments Market Act and International Financial Reporting Standards.

In accordance with Article 110 of the Financial Instruments Market Act, members of the Management Board of Petrol d.d., Ljubljana, which comprises Tomaž Berločnik, President of the Management Board, Roman Dobnikar, Member of the Management Board, Janez Živko, Member of the Management Board, Mariča Lah, Member of the Management Board, Rok Vodnik, Member of the Man- agement Board, and Samo Gerdin, Member of the Management Board/Worker Director, declare that to their best knowledge:

• the financial report of the Petrol Group and Petrol d.d., Ljubljana for the year 2010 has been drawn up in accordance with Inter- national Financial Reporting Standards and gives a true and fair view of the assets and liabilities, financial position and financial performance of the company Petrol d.d., Ljubljana and other companies included in the consolidation as a whole; • the business report of the Petrol Group and Petrol d.d., Ljubljana for the year 2010 gives a fair view of the development and re- sults of the Company’s operations and its financial position, including the description of material risks that the company Petrol d.d., Ljubljana and other companies included in the consolidation are exposed to as a whole.

Tomaž Berločnik Roman Dobnikar Rok Vodnik President of the Member of the Member of the Management Board Management Board Management Board

Mariča Lah Janez Živko Samo Gerdin Member of the Member of the Member of the Management Management Board Management Board Board/Worker Director

Ljubljana, 7 March 2011 WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Rok Vodnik Janez Živko Tomaž Berločnik Mariča Lah Roman Dobnikar Samo Gerdin Member of the Member of the President of the Member of the Member of the Member of the Management Management Management Management Management Management Board Board Board Board Board Board/Worker Director WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 005 STATEMENT OF THE MANAGEMENT BOARD Contents OF PETROL D.D., LJUBLJANA 010 I. BUSINESS REPORT 2010

010 BUSINESS HIGHLIGHTS OF 2010

012 STATEMENT OF THE PRESIDENT OF THE MANAGEMENT BOARD

ENERGY 016 STRATEGIC ORIENTATIONS ACHIEVEMENT OF GOALS 018 WHERE DOES THE PETROL GROUP OPERATE?

019 THE MANAGEMENT AND GOVERNANCE SYSTEM

025 ANALYSIS OF OPERATING PERFORMANCE

028 EVENTS AFTER THE END OF THE ACCOUNTING PERIOD

OPERATIONS IN 2010 029 PETROL’S SHARE

033 BUSINESS RISKS

ENERGY ON THE GO 042 KEY IMPACTS ON OPERATIONS OIL AND MERCHANDISE SALES 044 SALES PERFORMANCE

048 PROCUREMENT AND LOGISTICS

ENERGY FOR LIVING 054 GAS AND HEAT GAS, HEAT AND ELECTRICITY 056 ELECTRICITY ENERGY ACTIVITIES

058 ENVIRONMENTAL AND ENERGY SOLUTIONS

ENERGY BETWEEN US 062 EMPLOYEES CUSTOMERS AND EMPLOYEES 065 CUSTOMER SATISFACTION MEASUREMENT

FLAWLESS ENERGY 071 THE QUALITY SYSTEM QUALITY SYSTEMS 073 INVESTMENTS 2010 075 INFORMATION TECHNOLOGY ENVIRONMENTALLY FRIENDLY ENERGY 080 PROTECTION OF THE ENVIRONMENT

SOCIAL RESPONSIBILITY SUSTAINABLE DEVELOPMENT 082 SOCIAL RESPONSIBILITY

ENERGY OF THE PETROL GROUP 086 GROUP COMPANIES ORGANISATIONAL STRUCTURE 087 THE PARENT COMPANY

088 SUBSIDIARIES

093 JOINTLY CONTROLLED ENTITIES

095 ASSOCIATES

096 II. REPORT OF THE SUPERVISORY BOARD

099 III. FINANCIAL REPORT 2010

WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 10 ANNUAL REPORT PETROL 2010 11

Number of service stations Volume of petroleum products sold

BUSINESS in million tons 500 441 2.6 2.49 425 433 2.35 450 380 2.4 400 361 2.22 2.2 2.10 HIGHLIGHTS OF 2010 350 2.01 300 2.0

250 1.8 200 ACHIEVED 1.6 Index 150 1.4 THE PETROL GROUP UM 2010 2009 2010/2009 100 Sales revenue EUR million 2,802.8 2,333.9 120 50 1.2 0 Gross profit EUR million 294.5 280.0 105 1.0

Operating profit EUR million 61.9 50.8 122 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

Net profit EUR million 35.5 7.9 449 Note: The volume of petroleum products sold to ZORD to replenish national reserves has normally stood between 40 and 50 thousand tons per year, except in 2008 Equity EUR million 404.6 381.5 106 when it amounted to 185 thousand tons.

Total assets EUR million 1,265.5 1,135.5 111

EBITDA1 EUR million 94.8 83.3 114 Revenue from the sale of merchandise Operating profit in EUR million EBITDA/Average fixed assets % 15.7 14.0 113 400 in EUR million 416.6 EBITDA/Gross profit % 32.2 29.8 108 400 382.4 80.0 70.9 360 374.0 Operating costs/Gross profit % 83.1 86.0 97 70.0 61.9 320 Added value/Employee EUR thousand 50.7 46.6 109 280 60.0 50.8 262.9 350 59.0 Debt/Equity2 1.17 1.29 91 50.0 240 215.7 44.7 40.0 Earnings per share3 EUR 16.0 5.1 315 200 160 30.0 Share price as at period end EUR 272 322 85 120 20.0 80 Volume of petroleum products sold million tons 2.35 2.22 105 10.0 40 Volume of LPG sold thousand tons 47.8 46.1 104 0 0.0

3 Volume of natural gas sold thousand m 104,239 99,885 104 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

Electricity sold MWh 356,703 227,826 157

Heat sold MWh 65,317 60,377 108

Revenue from the sale of merchandise EUR million 416.6 382.4 109 Investments in fixed assets EUR million 65.9 44.5 148 EBITDA Structure of the Petrol Group’s Number of service stations as at period end 441 433 102 investments in 2010 Other activities 15% Number of gas concessions as at period end 29 28 104 in EUR million

Number of employees (including third-party managed service 120.0 3,520 3,556 99 101.9 Oil and merchandise stations) as at period end 94.8 sales - Slovenia 21% 100.0 85.6 83.3

80.0 70.8

60.0

40.0 Oil and merchandise sales - SE Europe 28% 20.0

0.0 1 EBITDA = Operating profit or loss + Regular depreciation net of depreciation of environmental fixed assets 2 Net Debt/Equity ratio = (Long-term and short-term financial liabilities – Cash and cash equivalents)/Equity 2006 2007 2008 2009 2010 Energy activities 36% 3 Earnings per share = Net profit or loss for the year attributable to owners of the controlling company/Weighted average number of ordinary shares issued, excluding own shares. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 12 ANNUAL REPORT PETROL 2010 13

term maximisation of shareholder return. Utilising the creative energy for preparation, development and com- A gross dividend of EUR 5.90 per share of our employees petition. We have played a part in the was paid for the 2009 business year. The Petrol Group employs 3,520 peo- top achievements in basketball, football, ple and as such ranks among the larger handball and hockey, as well as in indi- The Petrol Group is engaged primarily employers in this part of Europe. We vidual sports such as skiing, cycling and in the sale of petroleum products on all realise that without suitable knowledge, boxing. We are inseparably linked with the markets in the wider region. The Petrol efficiency and a clear, targeted employee success stories of the skiing champion Group sold 2.35 million tons of petro- orientation, we cannot attain our set Tina Maze and the world boxing cham- leum products in 2010 or 5 percent more goals. Our employees' creative energy pion Dejan Zavec. than in 2009. The sale of merchandise is the assurance of further successful generated more than EUR 416 million in performance. As a result, for a number of Looking forward revenue, exceeding the 2009 figure by 9 years Petrol has been in the prestigious We have set ambitious operating priori- percent. Petroleum products were sold company of the best employers, staying ties for the period until 2014, represent- through a wide-spread retail network, true to its directions that promote entre- ing a central theme. Most importantly, which gained an additional 8 service sta- preneurial innovativeness, good practice we have defined our commitment to tions and now comprises 441 in total, and examples in employment, and quality all our activities in the future. The main through a well-established wholesale net- jobs, also during heightened economic strategic development orientations of work. Efficient purchasing and logistics uncertainty. In 2010 we were awarded the the Petrol Group involve securing growth provided a stable supply and represent Family Friendly Enterprise certificate and and boosting profitability, increasing the Petrol's major competitive advantages. committed ourselves to implementing value added per employee, and continu- 18 measures over the next three years to ously ensuring sustainable development A special emphasis was put on the de- facilitate a balance between professional of the environments that we operate in. velopment of other energy segments. and family life. The Petrol Group will realise its mission in In 2010 we started selling electricity to the wider region in all its basic business households and small-business custom- Playing a part in sustainable areas: oil and merchandise sales and ers. Thus, an integral range of energy development energy activity, comprising the sale and products was available at one place for Concern for sustainable development and distribution of natural and liquefied petro- all of Slovenia. We obtained two con- social and environmental issues has been leum gas, heat and electricity, and energy cessions for district heating by wood incorporated into Petrol's operations for and environmental solutions. biomass. Through the purchase of two a number of years. In all markets where STATEMENT OF THE companies supplying liquefied petroleum Petrol is present, it has been introducing In today's world, energy is one of the gas in Croatia, Petrol has become an best practices in environmental protec- key existential elements of the society important provider in this segment of the tion, be it care for clean air, wastewater, at large. It is a dividing line between rich PRESIDENT OF THE oil market. In Serbia we completed the waste management or the protection of and poor, developed and undeveloped, construction of the gas transport net- people and property, and above all, con- progress and stagnation. The energy work in the Municipality of Pećinci, where tinual training in environmental protec- business also enables the stability, inde- we will launch the natural gas supply in tion. It proves its social accountability by pendence and safety of the Company. MANAGEMENT BOARD 2011. The Petrol Group is aware of the im- supporting numerous sports, cultural, hu- Lack of energy in the future may even portance of alternative energy sources. manitarian and environmental protection disrupt national and global power rela- Dear shareholders, business partners and co-workers, It purchased a biogas plant in Ihan and projects. Petrol perceives social responsi- tionships. started using waste for electricity and bility as a permanent commitment in co- he Petrol Group has been operat- business and operations is crucial in 294.5 million, which is 5 percent more heat production. operation with its business environment. A high level of business adaptability, in- ing in one of the most important these stringent operating conditions. The than in 2009. Operating profit stood at Living together − the core principle of our novativeness, quality and decisiveness Tand strategically sensitive indus- achieved results show that we are well EUR 61.9 million, an increase of 22 per- In 2010 the Petrol Group sold 47.8 thou- commitment to social responsibility − will enable us to achieve our set strategic tries – energy. The economic crisis, which prepared for harsh economic conditions. cent relative to 2009. This is a result of sand tons of liquefied petroleum gas and helping those that really need help as well goals. The future is in our hands, and we started in 2008, still hinders operating By ensuring control, optimisation and both successful sales and containment of 104.2 million m3 of natural gas − both up as promoting creativity and compassion believe you will be with us on this suc- conditions in this sector and the oil price streamlining of all business processes, costs. Net profit of the Petrol Group was by 4 percent from 2009. Buyers were for our fellow human beings. cessful journey! grew by 29 percent compared to 2009. In we will be able to continue our successful EUR 35.5 million, which is significantly supplied based on 29 concessions for gas 2010, Slovenia witnessed alarming devel- operations. higher than the year before, i.e. EUR 7.9 supply and by the use of 2,185 gas stor- We are proud to have contributed to the opments in construction, transport and million. age tanks. We sold 356,703 MWh of elec- great successes of our country’s athletes. trade – sectors of most importance for In 2010 the Petrol Group generated EUR tricity or 57 percent more than in 2009, Every medal they win is also a recognition the Petrol Group. Therefore, our everyday 2.8 billion in sales revenue, up 20 percent In 2010 we pursued our commitment to and 65,317 MWh of heat. Petrol held 5 for us, as we selflessly provide them a Tomaž Berločnik response to the challenges of modern from 2009. Gross profit stood at EUR a stable dividend policy, supporting long- concessions for district heating. considerable portion of the funds needed President of the Management Board WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ACHIEVEMENT OF GOALS 2,802.8 16.0 10 MILLION EUROS OF EARNINGS COUNTRIES SALES REVENUE PER SHARE IN WHICH WE OPERATE energY WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 16 ANNUAL REPORT PETROL 2010 17

Mainpetrol strategic2010 lp_Layout orientations 10 copy 5 7.3.11 of 9:39the Page 1 • Net debt/EBITDA ratio down to 3; cash flow for financing the investment Petrol Group's development: • Investments in fixed assets in the plans of the Petrol Group. This will ensure STRATEGIC 1. Ensuring growth; 2010−2014 period totalling EUR 428 mil- the long-term growth and development of 2. Increasing operating profitability and lion; the Petrol Group and the maximisation of boosting the added value per employee. • Volume of petroleum products sold of value for the owners. ORIENTATIONS Through a well-designed investment 2.8 million tons (average annual growth policy we will secure a greater return on rate of 6 percent); Plan for 2011 Our strategic decisions are based on the verification of assets and focus on ensuring the Group's • Natural gas sales of 148 million m3 (av- The most important factors for the opera- external and internal environmental factors. financial stability. Our operations are erage annual growth rate of 10 percent); tions of the Petrol Group in the interna- geared at quality and business excellence. • Electricity sales of 2,150 million kWh; tional business environment are the price Mission • Revenue from the sale of merchan- fluctuations on the oil market and the US By offering a full range of energy and en- The strategic goals of the Petrol Group dise of EUR 503 million (average annual dollar exchange rate, as they reflect the vironmental products and services, Petrol by 2014 are the following: growth rate of 6 percent); and global economic trends. Petrol's domestic sees that its customers in Slovenia and • Sales revenue of EUR 3.5 billion (aver- • Number of service stations as at period environment, on the other hand, is af- in the markets of South-eastern Europe age annual growth rate of 8 percent); end will be 570 (average annual growth fected by government measures aimed at receive reliable, economical and environ- • EBITDA of EUR 167 million (average an- rate of 7 percent). regulating prices and the energy market mentally friendly service. Thanks to our nual growth rate of 15 percent); along with the overall economic situation diversified network of service stations, • Net profit of EUR 73.1 million (average By achieving our set goals we will (economic growth, price growth rates, drivers are offered everything they need annual growth rate of 14 percent); strengthen the long-term financial stabil- consumption and production growth). for a safe and comfortable journey, while • Added value per employee of EUR 57 ity of the Petrol Group. A shareholder The projections for 2011 include higher businesses and local communities are thousand (average annual growth rate of policy that is based on the long-term max- oil prices than in 2010 (approximately 85 supplied with a comprehensive energy 4 percent); imisation of returns for shareholders is USD per barrel) and continuing demand- supply. Moreover, households are pro- • Return on equity (ROE) up to 13 percent; one of the cornerstones of Petrol’s devel- ing economic conditions, primarily in con- vided all of the energy they need for their • Return on invested capital (ROIC) up to opment strategy. A stable dividend policy struction, trade and transport, which are home − at their home. 10 percent; will ensure a balanced dividend yield to the sectors most relevant to the Petrol • Debt-to-equity ratio down to 0.8; shareholders and the distribution of free Group's operations. Vision Petrol's vision is to become the driver of quality and development of a comprehen- sive energy service range, an operator of Sales revenue 28 gas concessions service stations with convenience stores of EUR 2.9 billion in South-eastern Europe with an above- average customer-satisfaction rate.

Net profit of Values Businesses and local communities are provided a comprehensive energy supply and 5 concessions 2,613 gas households are supplied all the energy they need for their home − at their home. EUR 48.9 million for district heating In its operations, the Petrol Group pursues storage tanks the following fundamental values: • Friendliness: friendliness towards fellow at all times in line with the applicable The Petrol Group will pursue its workers, end buyers and business part- environmental legislation of the countries mission in the following basic ners; the Petrol Group operates in; business areas: KEY OPERATING TARGETS • Reliability: fulfilling agreed obligations • Social responsibility: supporting 1. Oil and merchandise sales in Slove- and meeting set goals; excellence in sport and culture, nia; OF THE PETROL GROUP IN 2011 • Growth and responsiveness: constantly contributing through sponsorships and 2. Oil and merchandise sales in SE Eu- searching for new ideas to grow and im- donations to a higher quality of life in the rope; prove; environment the Petrol Group operates in. 3. Energy activity, comprising the sale 136 thousand tons Revenue from the sale • Rationality: optimisation of business pro- and distribution of natural and liquefied of liquefied petroleum gas, of merchandise natural gas and industrial gases sold cesses; Strategic business plan 2010−2014 petroleum gas, heat and electricity, en- of EUR 437.1 million • Stability and quality: managing all risks The strategic business plan for the 2010– ergy and environmental solutions. and quality; 2014 period is the fundamental corporate • 2.34 million tons Retail network • Environmental awareness: complying document defining the mission, vision, The Petrol Group will operate in the 1 million MWh of petroleum of electricity sold comprised of with strict environmental requirements values, goals and strategies on which the markets of Slovenia, Croatia, Bosnia products sold 467 service stations and ensuring the further introduction of business future of the Petrol Group is and Herzegovina, Serbia, Montenegro best environmental protection practices, based. and Kosovo. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 18 ANNUAL REPORT PETROL 2010 19 WHERE DOES THE MANAGEMENT AND THEpetrol 2010 lp_Layout 10 copy PETROL 5 7.3.11 9:39 Page 1 GROUP GOVERNANCE SYSTEM Corporate governance of Petrol d.d., Ljubljana – legal OPERATE? compliance and the corporate governance system. Pursuant to Article 70(5) of the Compa- ing principles as well as implemented rec- Supervisory Board members end when nies Act (ZGD-1), Petrol d.d., Ljubljana ommendations and deviations from the their post of Supervisory Board member hereby issues its corporate governance Code are listed and explained below; expires or when they are relieved of their statement. • The Articles of Association do not lay duties; down objectives other than maximising • The Company does not disclose in its 1. Reference to the applicable Corpo- shareholder value, but such objectives annual report the positions held by Man- rate Governance Code may be specified as part of changes, if agement Board members and Supervi- In the period 1 January 2010 to 31 Decem- any, to the Company's fundamental legal sory Board members in the management ber 2010, the Company was subject to act; and supervisory bodies of unrelated com- the Corporate Governance Code as jointly • Independence statements of Supervi- panies because the members concerned drawn up and adopted by the Ljubljana sory Board members will not be published notify the Supervisory Board of any Stock Exchange, the Slovene Directors’ on the Company's website, in accordance potential breaches of competition prohibi- Association and the Managers' Associa- with a Supervisory Board decision; tion or instances of dependence; tion of Slovenia. The Code in its revised • Due to a high degree of data confiden- • The Company has not drawn up an wording was adopted on 8 December tiality, the use of information technol- internal act or rules that would lay down 2009 and entered into force on 1 January ogy to convene meetings and distribute additional rules on trading limitations in SLOVENIA CROATIA 2010. It is available both in Slovene and Supervisory Board documents is not yet addition to legal provisions and regula-

SERBIA MONTENEGRO English from the website of the Ljubljana possible, but it will be introduced as soon tions. Nevertheless, any person having Stock exchange http://www.ljse.si/. as all members of the Supervisory Board access to internal information signs a BOSNIA AUSTRIA AND HERZEGOVINA and its committees are equipped with special statement to keep internal infor- The Company did not adopt a corporate sufficiently secure connections and pro- mation confidential. In accordance with KOSOVO ALBANIA governance code of its own. It is managed tocols to prevent unauthorised access to the requirements of the Securities Market

CYPRUS MACEDONIA in accordance with the Companies Act the documents; Agency, the Company keeps a list of per- and within the framework of the above • In 2010 the basis for assessing the qual- sons with access to internal information; Code. In compliance with the Code's rec- ity of work performed by the Supervisory NUMBER OF SERVICE STATIONS ommendations, the Supervisory Board Board and its committees was estab- and the Management Board jointly drew lished, but other than the verification of

Slovenia: 313 Serbia: 5 up and, at the Supervisory Board meet- circumstances that could lead to a con- Croatia: 79 Kosovo: 3 ing of 23 November 2010, adopted the flict of interests, the procedures to ensure Bosnia and Montenegro: 3 Corporate Governance Policy of Petrol compliance with corporate governance Herzegovina: 38 d.d., Ljubljana, which was published via recommendations and good practice the Ljubljana Stock Exchange information have not yet been carried out; NUMBER OF AUTOGAS SERVICE STATIONS system – SEOnet (http://seonet.ljse.si/ • Remuneration of Supervisory Board default_en.aspx?doc=SEARCH&doc_ members does not correspond to their id=43359) on 28 December 2010 and responsibilities and tasks, and depends Slovenia: 38 Serbia: 5 Croatia: 39 Kosovo: 3 can also be downloaded in Slovene and on applicable General Meeting resolu- Bosnia and Montenegro: 2 in English from the Company's website tions; GAS CONCESSIONS Herzegovina: 4 www.petrol.si. • The Supervisory Board did not lay down the terms of office for the committees Slovenia: 27 Declaration of compliance (they are composed of Supervisory Board Serbia: 2 with the Code members, except for an external member The Company respects the above Code of the audit committee). The terms of of- when conducting its operations. Its guid- fice of committee members who are also WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 20 ANNUAL REPORT PETROL 2010 21

• The Company discloses only gross permanently posted on the official web- The Company's Management Board aims The largest shareholders of Petrol d.d., Ljubljana as at 31 December 2010 remuneration of individual Management site of the Company, www.petrol.si. to establish a control system that is on Board and Supervisory Board members, the one hand the most efficient as regards 10 largest shareholders of Petrol d.d., Ljubljana as at 31/12/2010 as required by law, but not their net remu- 2. Description of main characteristics of the prevention of undesired events and Shareholder name Address No. of shares Holding in % neration. the Company’s internal control and risk on the other hand acceptable in terms of SLOVENSKA ODŠKODNINSKA DRUŽBA, D.D. MALA ULICA 5, 1000 LJUBLJANA 412,009 19.75% management systems in connection cost. The Company will continue to conform to with the financial reporting process NLB d.d. TRG REPUBLIKE 2, 1000 LJUBLJANA 210,664 10.10% the recommendations of the Corporate The company Petrol d.d., Ljubljana reason- The Company's Management Board is KAPITALSKA DRUŽBA, D.D. DUNAJSKA CESTA 119, 1000 LJUBLJANA 172,639 8.27% Governance Code. Should it become ably applies the COSO model1 of risk man- aware that every internal control system, ISTRABENZ D.D. CESTA ZORE PERELLO-GODINA 2, 6000 KOPER 84,490 4.05% evident that the Company is not able to agement and the internal control system regardless of how well it functions, has observe a recommendation laid down in connection with the financial reporting restrictions and cannot fully prevent er- ZVON ENA HOLDING, D.D. SLOVENSKA ULICA 17, 2000 MARIBOR 78,985 3.79% in the Code, the Management Board process. Three objectives are pursued in rors or frauds. But it must be configured VIZIJA HOLDING, K.D.D. DUNAJSKA CESTA 156, 1000 LJUBLJANA 71,676 3.44% and the Supervisory Board will prepare establishing the internal control system: so that it flags them as soon as possible VIZIJA HOLDING ENA, K.D.D. DUNAJSKA CESTA 156, 1000 LJUBLJANA 63,620 3.05% a justified explanation. It should be em- • Accuracy and reliability of financial and provides management with suitable NFD 1 DELNIŠKI INVESTICIJSKI SKLAD D.D. TRDINOVA 4, 1000 LJUBLJANA 61,817 2.96% phasised in particular that since the end reporting; assurance about the achievement of of the accounting period and until the • Compliance with applicable laws and objectives. Given the general limitations HYPO BANK D.D. DUNAJSKA CESTA 117, 1000 LJUBLJANA 43,500 2.09% publication of this statement, no changes regulations; of control systems and with a view of TRIGLAV VZAJEMNI SKLADI - DELNIŠKI TRIGLAV SLOVENSKA CESTA 54, 1000 LJUBLJANA 27,056 1.30% or deviations occurred other than those • Effectiveness and efficiency of achieving the above objectives, the rele- mentioned above. This announcement is operations. vance of separate business risks is evalu- ated every two years, taking into account information on the situation as at the last representing 10.10 percent of the issuer’s Management Board with due care and the changed circumstances of the ex- day of the financial year and all the nec- share capital; in a responsible manner. The Supervi- Share capital structure of Petrol d.d., Ljubljana ternal and internal environment in which essary explanations, in accordance with • Kapitalska družba, d.d., held 172,639 sory Board first specifies criteria for the as at 31 December 2010 the Petrol Group operates, and based Article 70(6) of the Companies Act: shares of Petrol d.d., Ljubljana, represent- selection of candidates and then deter- thereon the need for setting up new or ing 8.27 percent of the issuer’s share mines candidates who meet the criteria. different controls is examined and the 3.1. Structure of the Company’s share capital. Provided that appropriate and suitable Others 32.4% efficiency of the existing internal control capital candidates are found, the Supervisory Other financial investors 21.7% system is checked. Such a system ena- The Company has only ordinary regis- 3.4. Holders of securities carrying spe- Board appoints the members of the Man- bles us to focus on important risks and to tered no-par value shares, the holders of cial control rights agement Board at a session convened for assess and control them on a continuous which have the right to participate in the The Company did not issue any securities such purpose, but may decide to carry basis. The Risk Management chapter of management of the Company, the right carrying special control rights. out an internal or public call for applica- this business report presents the risk to profit participation (dividends) and the tions before doing so. If the Supervisory management and control mechanisms in right to a corresponding share in other 3.5. Employee share scheme Board decides to issue a call for applica- greater detail and in connection with the assets in the event of liquidation or bank- The Company has no employee share tions, a committee may be established relevance of a specific type of risk. ruptcy of the Company. All shares belong schemes. which carries out a call for applications to a single class and are issued in book- and determines candidates suitable to In our opinion, the existing internal entry form. 3.6. Restrictions on voting rights become members of the Management control system of the company Petrol There are no restrictions on voting rights. Board. In 2009 the Supervisory Board SOD 19.7% d.d., Ljubljana and the Petrol Group 3.2. Restrictions on the transfer of established the Human Resources and provided, in 2010, for efficient and suc- shares 3.7. Shareholder agreements that Management Board Evaluation Commit- cessful achievement of business objec- All shares are fully transferable. could result in the restriction on the tee, which may also carry out eventual tives, operation in compliance with legal transfer of shares or voting rights calls for application. The Supervisory

KAD Group 8.9% provisions, and fair and transparent 3.3. Qualifying holdings under the The Company is not aware of such agree- Board reappoints the Management reporting in all key aspects. Takeovers Act ments. Board within one year before the expiry Banks 14.9% Pursuant to Article 77(1) of the Takeovers of the term, but it usually does so three 3. Information under Article 70(6) of Act (acquiring a qualifying holding), we 3.8. The Company’s rules regarding: months before the expiry. If the Com- Insurance companies 1.2% the Companies Act provide the following information as at 31 • Appointment and replacement of pany’s General Meeting passes a vote As a company bound by the Takeovers December 2010: members of management or supervi- of no confidence in the Management Own shares 1.2% Act, Petrol d.d., Ljubljana hereby provides • Slovenska odškodninska družba, d.d., sory bodies: Board, the Supervisory Board, convening held 412,009 shares of Petrol d.d., Lju- Members of the Management Board are immediately after the General Meeting,

1The author of the risk management model for companies, known as the COSO model, is the Committee of Sponsoring Organizations of the Treadway Commission. Its bljana, representing 19.75 percent of the appointed by the Supervisory Board for forms an opinion concerning a recall of application is recommended by all relevant international institutions and standards. Risk management and the control system are set up to measure risks by consider- issuer’s share capital; a term of five years with the possibility of a Management Board member. Without ing individual activities and regional organisation of a company in conjuction with its objectives and strategy. The risk management system consists of eight continuously repeating procedures: internal environment, objective setting, event (risk) identification, risk assessment, risk response, control activities (establishment of the control • Nova Ljubljanska banka d.d. held reappointment. Members of the Supervi- prejudice to the above, the Supervisory system), information and communication to encourage employees to assume their responsibilities, system monitoring and implementation of improvements. 210,664 shares of Petrol d.d., Ljubljana, sory Board appoint the members of the Board may recall the Management Board WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 22 ANNUAL REPORT PETROL 2010 23

for reasons stipulated by law on its own 3.10. Important agreements that enter time and place of the meeting, the bod- It represents and acts on behalf of the agement Board and the vice-president • Finance; discretion. The Supervisory Board may into force, are amended or expire due ies conducting the meeting, the agenda Company. According to the Articles of or a member of the Management Board. • Accounting; appoint its members as temporary Man- to changes in the control over the and proposed resolutions. At the General Association, the Management Board is Vice-presidents or individual members of • Informatics; agement Board members to replace the Company resulting from a takeover bid Meeting held on 6 May 2010, the Com- comprised of a president, one or more the Management Board may represent • Legal affairs. missing or absent members of the Man- The Company is not aware of such agree- pany’s shareholders were presented with vice-presidents and one or more mem- the Company only together with the presi- agement Board for a period of not more ments. the annual report and the Supervisory bers. One its members is a worker director dent of the Management Board. Mariča Lah, Member of the Manage- than a year. Reappointment or extension Board’s report on the verification of the who only participates in decisions relat- ment Board of the term of office is permitted if the 3.11. Agreements between the Com- annual report for the financial year 2009. ing to human resources and social policy Legal representatives need an approval Appointed for a five-year term of office entire term of office is not longer than one pany and the members of its man- They voted on the distribution of accumu- issues, and does not have the power to of the Supervisory Board to acquire or beginning on 30 August 2009. Born in year. The Supervisory Board is required agement and supervisory bodies or lated profit, the granting of a discharge represent the Company. The Manage- dispose of their own shares, or acquire, 1956, she holds a master’s degree in to immediately notify the Management employees, which foresee compensa- from liability to the Management Board ment Board comprises at least three and establish or dissolve companies and busi- management. Fields of responsibility: Board that does not fully fulfil the tasks tion should such persons resign, be and Supervisory Board for the year 2009, not more than six members. The actual ness units. Approval is also required for • Procurement; falling under its mandate of its findings discharged without cause or have their the appointment of an auditor to audit the number of its members is determined raising or granting loans that individually • Logistics. and opinions and to determine the short- employment relationship terminated Company’s financial report and review by the Company’s Supervisory Board exceed five percent of the Company’s est deadline possible to eliminate the due to a bid as defined in the Takeo- its business report for 2010, the appoint- in a decision on the appointment of the total capital, or for other individual capital Rok Vodnik2, Member of the Manage- shortcomings determined. If the Manage- vers Act ment of an alternate Supervisory Board Management Board. In 2010 the Manage- investments exceeding five percent of ment Board ment Board fails to achieve the expected In the event of resignation, Management member and amendments to the Articles ment Board had six members (except total capital. They also need approval to Appointed for a five-year term of office results by the set deadline, the Supervi- Board members are not entitled to com- of Association. The shareholders adopted from September to November, when a grant a power of attorney and mortgages. beginning on 30 August 2009. Born sory Board decides on recalling individual pensation, but they are entitled to receive resolutions on the distribution of accu- new Management Board member/Worker in 1970, he holds a master’s degree members of the Management Board. it in the event of a recall and termination mulated profit, granting of a discharge Director was appointed by the Supervisory Members of the Management Board of in business administration. Field of The Supervisory Board of the Company of their employment contract without from liability to the Management Board Board). In 2010 the Management Board Petrol d.d., Ljubljana in 2010 responsibility: comprises nine members, of which six cause. and the Supervisory Board, appointment discussed issues falling within its compe- • Energy. are elected by the Company’s General of an auditor to audit the financial report tence at fifty-one meetings. All decisions Aleksander Svetelšek1, President of the Meeting with a majority vote of share- 4. Information on the workings of the and review the business report for 2010, were adopted unanimously. In addition to Management Board Bojan Herman, Member of the Manage- holders present and three are elected by General Meeting appointment of an alternate Supervisory holding formal meetings, the Management Appointed for a five-year term of office ment Board/Worker Director the Company Workers’ Council. They are In accordance with applicable legisla- Board member, and amendments to the Board exercised the powers and respon- beginning on 30 August 2009. Born in His first five-year term of office began in elected for a term of four years and may tion, specifically the Companies Act, the Articles of Association empowering the sibilities constituting its daily activities as 1963, he has a bachelor’s degree in eco- 2002 and he was re-appointed in 2007. be re-elected when their term of office General Meeting is a body through which Management Board to increase share well as powers and responsibilities in rela- nomics. Fields of responsibility: Born in 1951, he is a grammar school expires. A resolution on an early recall of the shareholders exercise their rights in capital (authorised capital) and harmonis- tion to the General Meeting, as stipulated • Human resources; graduate. On 20 September 2010 he the Supervisory Board members repre- respect of matters concerning the Com- ing the provisions of the Articles of As- by the Companies Act. Activities concern- • Capital investments; resigned as worker director. senting shareholders is adopted with a pany. The convening of General Meetings sociation with the revised Companies Act ing the Supervisory Board were carried • General administration; three-quarters majority of votes present is governed by the Articles of Association (ZGD-1C). out in accordance with chapter 4 of the • Foreign markets. Samo Gerdin, Member of the Manage- at a General Meeting, while the conditions in conformity with applicable legislation. Supervisory Board rules of procedure. The ment Board/Worker Director for the recall of the Supervisory Board The General Meeting is convened at the 5. Information on the composition Management Board regularly reported to Roman Dobnikar, Member of the Man- On 24 September 2010, he was appointed members representing employees shall request of the Management Board, at the and workings of management and su- the Supervisory Board on the Company’s agement Board by the Supervisory Board as worker di- be determined by the Workers’ Council in request of the Supervisory Board, or at pervisory bodies operations and consulted it in connection Appointed for a five-year term of office rector for a five-year term of office. Born a general act. the request of the Company’s sharehold- The company Petrol d.d., Ljubljana with the Company’s strategy, business beginning on 30 August 2009. Born in in 1969, he has a bachelor’s degree in ers who collectively represent at least five is managed using a two-tier system. development and risk management. Some 1973, he has a bachelor’s degree in eco- chemical technology. • Amendments to the Articles of percent of the Company’s share capital. The Company is led by the Manage- of the Management Board’s activities were nomics. Fields of responsibility: Association: The party requesting the convening of a ment Board, which is supervised by the also focused on collaboration with the • Sales; Responsibilities and composition of the The General Meeting decides on amend- General Meeting must submit to the Man- Supervisory Board. The management Workers' Council and the Petrol Group’s • Marketing. Supervisory Board ments to the Articles of Association with agement Board an agenda for the General of the company Petrol d.d., Ljubljana representative trade unions. a majority of three-quarters of share Meeting together with an explanation and is conducted in conformity with legal Janez Živko, Member of the Manage- Under the Articles of Association, the capital represented in the voting. justification of the purpose and reasons provisions, Articles of Association as Members of the Management Board ment Board Supervisory Board of the company Petrol for convening the General Meeting. The the Company’s fundamental legal act, are elected for a five-year term of of- Appointed for a five-year term of office d.d., Ljubljana comprises nine members. 3.9. The powers of Management Board Management Board calls the General internal regulations, and established fice and may be re-elected. The persons beginning on 30 August 2009. Born in 1973, They are elected for a term of four years members, particularly in connection Meeting one month before the meeting by and generally accepted good business representing and acting on behalf of the he holds a master’s degree in business and may be re-elected when their term with own shares announcing the call in the Official Gazette practices. Company are the president of the Man- administration. Fields of responsibility: of office expires. The Supervisory Board The powers of Management Board mem- of the Republic of Slovenia and via the bers are specified later in this chapter. Ljubljana Stock Exchange information Workings of the Management Board The Management Board does not have system SEOnet. In the announcement The Management Board of Petrol d.d., 2On 10 January 2010, Aleksander Svetelšek resigned as president of the Management Board of Petrol d.d., Ljubljana. On the same day, Rok Vodnik was appointed to this particular powers concerning the issue or of the convening of the General Meeting, Ljubljana manages the Company inde- position for the period until 1 February 2011. On 1 February, Tomaž Berloènik became the new president of the Management Board of Petrol d.d., Ljubljana for a five-year term of office. purchase of own shares. the Management Board specifies the pendently and on its own responsibility. 3Appointed as president of the Management Board for the period 10 January 2011 to 1 February 2011. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 24 ANNUAL REPORT PETROL 2010 25

elects its president and vice-president ing held on 7 April 2009. His term of office Franc Premrn, from among its members. The president began on 16 July 2009. Employee representative of the Supervisory Board is always a rep- Petrol d.d., Ljubljana, Wholesale. Ap- ANALYSIS resentative of shareholders. The president Tomaž Berločnik, pointed for a four-year term of office at of the Supervisory Board represents the Shareholder representative the 4th Workers’ Council meeting of 16 Company in relation to the Management President of the Management Board of February 2009. His term of office began OF OPERATING Board, and the Supervisory Board in rela- Istrabenz, d.d. since 14 January 2010. on 22 February 2009. tion to the Management Board and third Appointed for a four-year term of office parties, unless otherwise determined for a at the 18th General Meeting held on 7 Andrej Tomplak, specific case. April 2009. He resigned on 11 March Employee representative PERFORMANCE 2010. Petrol Maloprodaja Slovenija d.o.o. Ap- In 2010 the composition of the Supervi- pointed for a four-year term of office at In 2010 the business environment was still influenced by the sory Board changed as follows: Tomaž Irena Prijović, the 4th Workers’ Council meeting of 16 financial crisis and escalating economic recession. Berločnik, who was elected at the General Shareholder representative February 2009. His term of office began Meeting of 7 April 2009, resigned as Super- Secretary General of the Slovene on 22 February 2009. hey affected in particular the eco- troleum product prices and exchange vice station operators, which equalled visory Board member on 11 March 2011 and Directors' Association. Appointed as an nomic trends in the construction rates to be passed on to domestic sales EUR 30.7 million and decreased by 4 was replaced by Irena Prijović as an alter- alternate member at the 20th General Tindustry, trade and transport, prices. Consequently, the exposure of percent compared to the year before, nate member from 6 May 2010 onwards. Meeting held on 6 May 2010 for the where major buyers of petroleum prod- the Petrol Group to price and foreign ex- predominantly on account of the man- remaining term of office of Tomaž ucts and other energy products operate. change risk is considerably reduced. agement of some service stations being The Supervisory Board had the following Berločnik. Illiquidity and financial indiscipline wors- transferred from the subsidiary Petrol committees in 2010: ened. The Petrol Group considered the In 2010 the Petrol Group generated EUR BH Oil Company d.o.o. to the Company. 1. Audit Committee; Urban Golob, effect of the deteriorated economic con- 2,802.8 million in sales revenue, up 20 The second highest item among the 2. Human Resources and Management Shareholder representative ditions already when drafting the 2010 percent from 2009, due to greater sales costs of services was transport costs, Board Evaluation Committee; Member of the Board of Hypo Alpe- operating plan. Moreover, an efficient volume and higher petroleum product which amounted to EUR 28.6 million or 3. Nominations Committee (appointment Adria-Bank d.d. Appointed for a four- risk management system enables us to prices. 2 percent less than in 2009. The costs of an alternate Supervisory Board year term of office at the 18th General react efficiently to events in the business of consulting services also decreased. member). Meeting held on 7 April 2009. environment. The still high excise duties Gross profit from sales stood at EUR Compared to 2009, advertising and in Slovenia had a significant impact on 294.5 million, which is 5 percent more entertainment costs grew significantly, Members of the Supervisory Board of Žiga Debeljak, operations in 2010. than in 2009. Compared with the year predominantly because of extensive Petrol d.d., Ljubljana in 2010 Shareholder representative 2009, the following influenced the marketing campaigns approved already President of the Management Board To mitigate the adverse effects of the amount of gross profit in 2010: in the 2010 plan. The maintenance Tomaž Kuntarič, of Poslovni sistem Mercator, d.d. financial crisis and economic downturn, 1. An increase of 5 percent in the volume costs related to property, plant and President of the Supervisory Board, Appointed for a four-year term of office the following activities were undertaken of motor fuels sold (petrol and diesel equipment were 5 percent higher due shareholder representative at the 18th General Meeting held on 7 in 2010: fuel); to legally prescribed inspections, and Director of Slovenska odškodniska družba, April 2009. • The amount of current operating as- 2. A 9-percent rise in revenue from the the contributions associated with op- d.d. Appointed for a four-year term of office sets was optimised, keeping the stocks sale of merchandise; erations along motorways grew by 6 at the 18th General Meeting held on 7 April Samo Gerdin, of petroleum products at levels that 3. 12-percent higher sales volume of percent because of new service stations 2009. Employee representative were still sufficient for the performance extra light heating oil; and along motorways. An increase was also Petrol d.d., Ljubljana, Technical of business activities; 4. A rise of 4 percent in the sales volume noted in insurance cost, mainly due Bruno Korelič, Development, Quality and Safety. Re- • Credit lines were maintained with of liquefied petroleum gas. to receivables insured with SID − Prva Deputy President of the Supervisory appointed for a four-year term of office a number of banks in Slovenia and kreditna zavarovalnica d.d., Ljubljana. Board, shareholder representative at the 4th Workers’ Council meeting of 16 abroad, enabling us to keep ensuring The Petrol Group’s operating expenses Depreciation costs exceeded the 2009 Appointed for a four-year term of office February 2009. His term of office began the liquidity of the Petrol Group without totalled EUR 244.8 million in 2010, up figure by 1 percent, primarily owing to at the 18th General Meeting held on 7 April on 22 February 2009. He resigned on 23 interruption; 2 percent from 2009, mainly due to the new service stations and expanded op- 2009. November 2010. • Receivables and credit exposure to expansion of its operations. erations. Labour costs were 3 percent customers were subjected to tighter higher than the year before, for the most Dari Južna, Boštjan Trstenjak, control. Compared to 2009, the costs of materi- part because of expanded operations Shareholder representative Employee representative als rose by 16 percent, chiefly because and severance pay. Other costs de- Chairman of the Board of the brokerage Petrol d.d., Ljubljana, Retail Sales. The price of crude oil and exposure to of higher energy costs. The costs of creased compared to 2009, especially company Perspektiva d.d., director of Vizija Appointed at the 25th Workers' Council foreign exchange risk have a significant services stood at EUR 114.9 million, as a result of the derecognition of allow- holding, k.d.d., Vizija holding Ena, k.d.d. and meeting of 6 December 2010 to replace effect on the operations of the Petrol having grown by 2 percent over 2009. ances for receivables recovered in 2010. Perspektiva FT, d.o.o. Appointed for a four- Samo Gerdin for the term of office Group. The petroleum product pricing The highest item among the costs of On the other hand, a rise was seen in im- year term of office at the 18th General Meet- ending on 22 February 2013. model enables the trends in global pe- services was the fees charged by ser- pairments and write-offs of fixed assets. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 26 ANNUAL REPORT PETROL 2010 27

Equity, net debt and financial leverage ratio EBITDA of the Petrol Group by business activity both at home and abroad, we are able to quickly respond to changes in the in EUR million 491 475 amount of current assets. Operating 500 Energy activities 12% 382 405 receivables and the value of inventories 400 56% 54%

increased in nominal terms as at the 300 last day of 2010 compared to the end of Oil and merchandise 200 sales - SE Europe 16% 2009, along with operating liabilities. The 100 main reason was the large increase in 0 petroleum product prices and the EUR/ petrol background_Layout 10 copy 5 11.3.11 14:22 Page 4 USD exchange rate. 31/12/2009 31/12/2010

Nevertheless, the Petrol Group in 2010 Equity in EUR million Net debt in EUR million succeeded to reduce the tying-up period Financial leverage ratio in % of funds by 3 days compared to 2009. As at the last day of the respective period, Through active daily cash flow planning tween 1 January and 31 December 2010 the Petrol Group recorded EUR 92.1 mil- and monitoring of its customers' op- the share price dropped by 14.6 percent. Oil and merchandise lion in net working capital − down EUR erations, Petrol remains very liquid and sales - Slovenia 72% 17.4 million over 2009 − which contrib- meets the criteria of the financial pro- A shareholder policy that is based on the uted to the deleveraging of the Group in fession regarding short- and long-term long-term maximisation of returns for Operating profit before other operat- (forwards and effects of commodity 2010. solvency. shareholders is still one of the corner- ing revenues/expenses4 in 2010 stood swaps). At the end of 2010, investments stones of Petrol’s development strategy. at EUR 51.3 million, up 26 percent from were re-evaluated and based thereon All the above affected the amount and Share prices at the Ljubljana Stock Ex- Petrol’s management advocates a stable 2009. The profitability of operations5 in impaired in the amount of EUR 3.6 mil- volume of cash flows. In 2010 cash flows change were lower on average at the end long-term dividend policy as it also fits the relevant period was 1.21, which means lion, which is less than in 2009. from operating activities totalled EUR of 2010 than at the end of 2009. The Pet- best the Company’s long-term develop- that added value exceeded operating 118.6 million or EUR 12.2 million more rol share also depreciated in 2010. Be- ment needs. costs by 21 percent. In 2009 the respec- Profit before tax amounted to EUR 44.9 than in 2009. Own funds generated by tive figure was 1.17. million. Net profit for the year equalled the Petrol Group were used for invest- EUR 35.5 million, which is significantly ment activities, payment of dividends Operating profit totalled EUR 61.9 million higher than in 2009 (EUR 7.9 million). and repayment of loans. Other necessary in 2010, which is 22 percent more than in funds were obtained from banks. 2009. EBITDA6 stood at EUR 94.8 million The total assets of the Petrol Group as or 14 percent more than in 2009. at the last day of 2010 equalled EUR In spite of the stringent economic con- 1,265.5 million, which is 11 percent more ditions, the Petrol Group managed to In 2010 the Petrol group generated than at the end of 2009. improve its financial stability in 2010. added value per employee in the The financial liabilities to equity ratio amount of EUR 50.7 thousand or 9 per- The most important items among long- (D/E ratio) was 1.17 as at the last day cent more than the year before. term assets are property, plant and of 2010, whereas at the end of 2009 it equipment, totalling EUR 573.4 million, had stood at 1.29. The financial leverage The Petrol Group’s net finance ex- and long-term investments in jointly ratio7 stood at 54 percent at 2010 year penses totalled EUR 17.0 million in controlled entities and associates, which end, down from 56 percent at the end 2010. Compared to 2009, a significant amount to EUR 135.9 million. of 2009. increase was recorded in gains on investments accounted for using the The management of current assets, The financial position of the Petrol equity method, as the attributed loss which account for 36 percent of the Group remains strong despite the of Istrabenz d.d. in 2009 stood at EUR Petrol Group’s total assets, is given par- considerably deteriorated operating 20.5 million. A decrease was noted in ticular attention. The amount of current conditions with the increasing illiquidity net interest expenses on account of assets affects the amount of borrowing and over-indebtedness of companies in a lower EURIBOR and interest mar- from suppliers and banking institutions. Slovenia and abroad, and the resulting gin, and in a net loss from derivatives However, with short-term credit ensured poorer position of Petrol's customers.

4 Operating profit before other operating revenues/expenses=Gross profit or loss from sales - operating costs excluding depreciation of environmental fixed assets 5 Profitability of operations = Gross profit or loss/Operating costs excluding depreciation of environment fixed assets 6 EBITDA = Operating profit or loss + Regular depreciation net of depreciation of environmental fixed assets 2010 7 Financial leverage ratio = Net financial liabilities / (Net financial liabilities + Equity) WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 28 ANNUAL REPORT PETROL 2010 29 EVENTS IN THE PETROL PETROL’S SHARE The year 2010 was not a particularly successful one for GROUP AFTER THE END investors at the Ljubljana Stock Exchange. At the end of 2010, share prices were on average lower than at the end of 2009. This was also reflected in the SBI TOP Index, which fell OF THE ACCOUNTING 13.5 percent relative to the end of 2009. Petrol's share is traded on the prime Trading volume and market from the previous year, with the overall market, but has been listed on the stock capitalisation trading volume also falling significantly. PERIOD exchange since 5 May 1997. In the previ- The volume of trading on the stock Petrol’s share was liquid at all times in ous year, Petrol’s share was again one of market amounted to EUR 18.15 mil- 2010. On 10 January 2011, Aleksander Svetelšek Ljubljana. On the same day, Rok Vodnik Berločnik became the President of the the most traded among those listed on lion in 2010, down 26.9 percent from resigned from the position of President was appointed in his place for the period Management Board of Petrol d.d., Lju- the Ljubljana Stock Exchange. It gener- 2009. The trading in Petrol’s shares of the Management Board of Petrol d.d., until 1 February 2011. On that date, Tomaž bljana for a 5-year term of office. ally followed the SBI TOP Index, although accounted for 3.7% of the total trad- The share of the decrease in its value was somewhat ing volume on the Ljubljana Stock Ex- Petrol d.d., larger as compared with the SBI TOP change and 5.0% of the share trading Index. volume. Ljubljana was ranked Between 1 January and 31 December On average, the monthly volume of fourth on 2010, the share’s price dropped 14.6 per- transactions involving Petrol’s share the Ljubljana cent, although it increased by more than totalled EUR 1.5 million. Although the 280 percent since its listing. The aver- trading volume decreased in 2010, Pet- Stock age price of Petrol’s share, which stood rol's share in the trading volume rose Exchange at EUR 272.81 in 2010, was 6.4 percent in comparison with the previous year. by trading lower than in the previous year. In 2010 The lower trading volume reflects the the share’s price ranged between EUR fact that average share prices on the volume. 236.00 and EUR 329.64. Ljubljana Stock Exchange decreased

Comparison of the base index of Petrol’s share price and the SBI TOP Index for 2010

109 106 103 100 97 94 91 88

Index value 85 82 79 76 73 70 1/4/2010 5/7/2010 8/3/2010 8/6/2010 6/9/2010 14/1/2010 11/8/2010 9/11/2010 27/1/2010 16/7/2010 17/9/2010 13/5/2010 3/12/2010 21/6/2010 19/3/2010 16/4/2010 10/2/2010 29/7/2010 23/2/2010 26/5/2010 24/8/2010 30/4/2010 30/9/2010 22/11/2010 16/12/2010 13/10/2010 30/12/2010 26/10/2010 30/12/2009

PETROL SBI TOP WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 30 ANNUAL REPORT PETROL 2010 31

Petrol’s share prices in the period 2009–2010 in EUR Shares owned by Supervisory Board and Management Board members as at 31 December 2010

2010 2009 Name and surname Position No. of shares Share of equity

High 329.64 360.22 Supervisory Board 135 0.01% Low 236.00 225.48 Average price in the current year 272.81 291.39 Internal members 135 0.01% Price on the last trading day of the current year 272.00 321.69 Price increase/decrease from 1 January to 31 December of the current year -14.60% 29.70% 1. Boštjan Trstenjak Supervisory Board Member - 0.0000% Increase in average price in the current year relative to the price as at 5 May 1997 280.56% 306.48% 2. Franc Premrn Supervisory Board Member 135 0.0065%

Note: The 2009 data is based on Petrol's average share price, while the 2010 data takes into account the closing price, which, in December 2010, 3. Andrej Tomplak Supervisory Board Member - 0.0000% became the official stock exchange price for securities traded on the Ljubljana Stock Exchange after the introduction of the Xetra trading system.

External members - 0.0000%

The market capitalisation of Petrol d.d., calculated using the closing share price Share capital structure 1. Tomaž Kuntarič Supervisory Board President - 0.0000% Ljubljana as at the last trading day of as at the end of 2010 and the average The share capital structure of Petrol d.d., 2. Bruno Korelič Supervisory Board Vice-president - 0.0000%

2010 totalled EUR 567 million, which share price as at the end of 2009 stood Ljubljana did not change significantly 3. Irena Prijović Supervisory Board Member - 0.0000% accounts for 8.1 percent of the stock at -15.4 percent. Together with the in 2010 compared with the end of the 4. Urban Golob Supervisory Board Member - 0.0000% market’s total capitalisation. Petrol d.d., dividend yield of 1.8 percent, the total previous year. With 412,009 shares, 5. Žiga Debeljak Supervisory Board Member - 0.0000% Ljubljana thus climbed to the fourth place return per share stood at -13.6 percent Slovenska odškodninska družba is still in terms of market capitalisation as at the in 2010. the largest single shareholder, followed 6. Dari Južna Supervisory Board Member - 0.0000% last day of 2010, with its share account- by NLB d.d. with 210,664 shares and Ka- ing for 22 percent of the SBI TOP Index. The ratio between the share’s market pitalska družba d.d. with 172,639 shares. Management Board 508 0.02% price at the end of 2010 and its book Other large single shareholders include 1. Aleksander Svetelšek Management Board President 105 0.0050% Key financial indicators value, which stood at EUR 201 at the end Istrabenz d.d., Zvon Ena holding d.d., and Petrol’s share of 2010, was 1.4, which was less than at Vizija holding k.d.d., Vizija holding Ena 2. Janez Živko Management Board Member 40 0.0019% Earnings per share for the year stood the end of 2009. The ratio between the k.d.d., NFD 1 delniški investicijski sklad 3. Mariča Lah Management Board Member 40 0.0019% at EUR 18.41 and cash flow per share share’s market price at the end of 2010 d.d., Hypo bank d.d. and Triglav vzajemni 4. Roman Dobnikar Management Board Member 153 0.0073% at EUR 28.50. The return per share and earnings per share stood at 14.8. skladi – delniški Triglav. 5. Rok Vodnik Management Board Member 170 0.0081%

6. Samo Gerdin Management Board Member/Worker Director - 0.0000% Closing price and the volume of trading in Petrol's share in 2010

2,000 The chart presenting the share capital for the purpose of listing the shares on in the Register of Companies up to the 340 structure is shown in the chapter on the the stock exchange, is published on the amount of one half of the share capital 1,800 corporate governance of Petrol d.d., Lju- Company’s website. All amendments as at the date of the adoption of this res- 320 1,600 bljana. are published in the Company’s strategy olution, which totals EUR 26,120,488.52

1,400 document, annual report of Petrol d.d., in nominal terms, by issuing new shares 300 At year-end, 54,253 shares or 2.6 percent Ljubljana and public announcements that as consideration (authorised capital). 1,200 of all shares were held by foreign legal or are available via the Company's website, 280 1,000 natural persons. The number of foreign www.petrol.si, and the website of the Lju- Contingent increase shareholders increased by 1.1 percentage bljana Stock Exchange, seonet.ljse.si. in called-up capital 260 800 points in 2010, while the total number of The General Meeting of Petrol d.d., Lju- Share trading volume Closing price (EUR) 600 shareholders decreased from 39,904 as at Authorised capital bljana did not adopt any resolutions in 240 the end of 2009 to 38,697. On 6 May 2010, the 20th General Meet- 2010 regarding the contingent increase 400 ing of Petrol d.d., Ljubljana adopted a in called-up capital. 220 200 Ten largest shareholders of Petrol d.d., Lju- resolution on the proposed amendment bljana are shown in the chapter on the cor- to the Articles of Association granting Reserves for own shares 200 0 porate governance of Petrol d.d., Ljubljana. power to the Management Board to in- Petrol d.d., Ljubljana did not repurchase crease, with the approval of the Super- its own shares in 2010. On the last day Other explanations by Petrol d.d., visory Board and without an additional of 2010, the Company held 24,703 own 1/3/2010 4/1/2010 3/6/2010 3/9/2010 8/4/2010 Ljubljana resolution of the General Meeting, the shares, representing 1.2 percent of its 21/1/2010 17/5/2010 12/7/2010 12/6/2010 18/3/2010 10/2/2010 22/6/2010 22/9/2010 28/4/2010 17/8/ 2010 11/17/2010 29/ 7/2010 11/ 10/2010 12/23/2010 28/ 10/2010 The prospectus of the company Petrol share capital of the Company within five registered share capital. The total book

Closing price (EUR) Share trading volume d.d., Ljubljana, which has been prepared years after the entry of this amendment value of own shares equalled EUR 2.6 WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 32 ANNUAL REPORT PETROL 2010 33

Overview of dividend payments 2006-2009

Total dividends in accordance BUSINESS RISKS Period with General Meeting resolution Gross dividend per share 2006 EUR 11,474,655.50 EUR 5.50 The Petrol Group uses a comprehensive business risk management system to continuously monitor the riskiness 2007 EUR 12,309,175.90 EUR 5.90 of its business environment. This system ensures that the 2008 EUR 12,309,175.90 EUR 5.90 Company’s key risks are identified, assessed and controlled 2009 EUR 12,309,175.90 EUR 5.90 in due time. million as at 31 December 2010 and was egy. Petrol’s management advocates a ll companies are faced with opera- Although the liquidity of banks did improve the management of financial risks, we can EUR 4.1 million lower than their market stable long-term dividend payout. This Additional tional uncertainty, which is even during the year, the performance of busi- say that we are successfully adapting to value on the said date. fits best the Company’s development information Amore acute in the time of a global nesses deteriorated, making banks more changes in capital and financial markets. needs as it delivers more predictable re- economic crisis. At the Petrol Group we cautious in extending loans to companies Own shares were purchased between turns and long-term stability of Petrol’s All information relevant to realise that uncertainty can be either a and individuals. Therefore the Petrol Group In the second half of 2010, Petrol d.d., shareholders, including the financial 1997 and 1999. Initially, 10,371 own share price. risk or an opportunity. That is why we focused even more on the management Ljubljana began supplying electricity to calendar, is published on the shares were acquired, which was fol- have integrated the business risk man- of financial risks and the containment of end customers, i.e. households and small Company’s website. The contact lowed by the purchase of additional In accordance with a resolution of the person responsible for investor agement policy into the process of stra- credit, liquidity and interest rate risks. It business customers. The Petrol Group 22,830 own shares. The Company may 20th General Meeting of 6 May 2010, relations is Ms Barbara Jama Živalič, tegic business planning and operational paid additional attention to the solvency of is thus today engaged in the produc- acquire own shares only for the pur- the gross payment of 2009 dividends who can be reached at investitorji. decision-making. customers and, consequently, to the bal- tion, sale and distribution of electricity, poses laid down in Article 247 of the amounts to EUR 5.90 per share. [email protected]. ance of operating receivables. The liquidity but owing to a relatively small volume of Companies Act (ZGD-1) and for remu- In 2010 the Group regularly monitored ex- and short-term solvency of Petrol Group new transactions and the systematic risk neration of the Management Board and Accumulated profit posure to various types of risk and carried companies was ensured through central management we estimate that electric- the Supervisory Board. Own shares are The amount of accumulated profit of out activities to contain them. Through management and reconciliation of current ity-related risks were properly hedged used in accordance with the Company’s Petrol d.d., Ljubljana for 2010 stood at efficient responses we were able to suc- cash flows and by entering into agree- against in 2010. Articles of Association. EUR 33.58 million. cessfully control, reduce or even avoid ments with banks to increase credit lines. individual business risks. 1. PETROL’S BUSINESS RISK MODEL Dividend policy to maximise long- Compared with the previous year, the Petrol's business risk model consists of term returns 2010 events influencing business risk supply of long-term financial sources two major groups: A shareholder policy that is based on management increased in 2010, which is why the finan- 1. Environment risks and; the long-term maximisation of returns In 2010 the economic downturn and fi- cial position of the Petrol Group remains 2. Performance risks. for shareholders is one of the corner- nancial crisis still had a strong influence stable. stones of Petrol’s development strat- on business operations and the man- Deteriorated economic conditions at agement of business risks in the Petrol Considering all of the measures taken home and abroad require an even more Group. within the Petrol Group in connection with careful identification and management of

Categories of business risks that affect our operations Dialogue with investors I. Environment risks ------Petrol prepares public announcements, individual meetings, presentations and I.1. Political risks I.3. Economic environment risks I.5. Disaster risks public presentations for domestic and foreign investors. The Company also regu- I.2. Financial environment risks I.4. Legislation and regulation risks larly attends investors’ conferences that are organised each year by the Ljubljana Stock Exchange, Vienna Stock Exchange and various banks. In 2010 it attended II. Performance risks six important international investors’ conferences. It took part in both Slovene II.1. Operating risks II.2. Management and decision-making risks II.5. Financial risks Capital Market Day events in Ljubljana that were organised by the Ljubljana II.1.1. Human resources management risks II.2.1. Management risks II.5.1. Price risks Stock Exchange and its partners in May and December. Further, it attended in- vestors’ conferences in Zuers and Stegersbach, Austria, which were organised II.1.2. Commercial risks II.2.2. Business and financial decision-making risks II.5.2.Credit risks (counterparty risks) by Raiffeisen Centrobank and Erste Bank, respectively. It also participated in II.1.3. Safety and protection risks II.2.3. Strategic decision-making risks II.5.3. Liquidity risks Barbara Jama Živalič the Austrian and Slovene Investor Day in London organised by the Vienna Stock II.1.4. Risks of discontinued operations II.3. Information risks II.5.4. Foreign exchange risks Investor Relations Exchange and Ljubljana Stock Exchange, together with UniCredit Group. At the end of September, Petrol presented itself in the first online roadshow of Slovene II.4. Risks of fraud and other illegal activities II.5.5. Interest rate risks prime market companies, which was organised by the Ljubljana Stock Exchange II.5.6. Financial instruments risks and technically supported by Thomson Reuters. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 34 ANNUAL REPORT PETROL 2010 35 risks. Consequently, the Petrol Group will The dots shown in the chart below stand The most relevant and probable environ- tors, analysing operations of electricity, Schematic diagram of business risks management reassess its business risks at the begin- for individual business risks. Business risks ment risks comprise financial and eco- oil and gas companies, as well as by in the Petrol Group and control methods ning of 2011. will be reassessed in 2011. nomic environment risks. Political risks, means of market surveys, benchmark legislation and regulation risks as well as analyses, customer satisfaction meas- 5 QUADRANT II QUADRANT I The most relevant and probable business Based on the assessment obtained for in- disaster risks, which also belong to this cat- urement, etc. risks comprise all financial risks: price, for- dividual risk categories, risks are classified egory, are relevant, but have a lower prob- eign exchange, credit, liquidity and interest into four quadrants giving a broad indication ability (frequency). II. Performance risks Identify and control Eliminate at source rate risks. To control and manage these of what kind of control system should be in Performance risks include operating risks, the most rigorous control system place in order to control or manage them. We try to identify financial environment risks, management and decision-making 4 possible is required. Such a system is risks through financial planning and sim- risks, information risks, risks of fraud and implemented within the Petrol Group and 2. MANAGEMENT OF INDIVIDUAL RISK ulations as well as through cooperation other illegal activities, and financial risks. described in more detail in sections dealing CATEGORIES IN 2010 with the financial environment (banks, fi- with individual financial risks. In addition to I. Environment risks nancial institutions, investors). Moreover, II.1. Operating risks financial risks, most relevant and probable The Petrol Group hedges against external these risks are taken into account when Operating risks are a group of risks which 3 risks include financial environment risk, environment risks by systematically moni- preparing the strategic business plan. include human resources management QUADRANT IV QUADRANT III Relevance commercial risk, strategic decision-making toring developments in the business envi- risks, commercial risks, safety and pro- risk, business and financial decision-making ronment and responding to them in a timely Economic environment risks are man- tection risks, and risks of discontinued Weak control Control risk and economic environment risk. manner. aged by constantly monitoring competi- operations. According to the latest as-

sessment, commercial risks are the most 2 relevant and probable of the above risks. Distribution of business risks in the Petrol Group Commercial risks include the risks of 5 Key customer dissatisfaction, risks of limited A Political risks supply sources of petroleum products 1 B Economic environment risks and other goods, risks of ineffective al- C Disaster risks D Commercial risks liances, risks of inefficient distribution K 1 2 3 4 5 E Risks of discontinued operations channels and risks of low service quality M F Business and financial decision-making risk or sale of poor-quality products. The Probability (frequency) 4 G Information risks C H Petrol Group hedges against these types B H Price risks S of business risks by regularly assessing by means of a clear strategy and con- II.5. Financial risks L I I Liquidity risks A F D T J Interest rate risk service stations and exercising compre- trol over its implementation, as well as Financial risks feature most prominently E U K Financial environment risks hensive supervision over its suppliers. As through annual conferences. among business risks. The most relevant J L Legislation and regulation risks O regards the management of risks related and probable financial risks include price N M Human resources management risks 3 R N Safety and protection risks to the availability of sources, especially II.3. Information risks risks, foreign exchange risks, credit risks, G

Relevance P O Management risks to the procurement of petroleum prod- According to the latest assessment, liquidity risks and interest rate risks, with P Risks of strategic decision-making ucts, we continued to implement the information risks are one of the least financial instruments risks having a less R Risks of frauds and illegal actions S Credit risks (counterparty risks) comprehensive supervision over suppli- probable (frequent) and least relevant prominent profile. Detailed information on T Foreign exchange risks ers in 2010. risks, but are by no means negligible. exposure to individual types of financial U Financial instruments risks As a result, the management of risks risk and disclosures about financial instru- 2 II.2. Management and related to ICT adequacy and security ments and risks are provided in notes to decision-making risks represents a vital and ongoing activity the financial statements, specifically in the Management and decision-making risks in this field. Timely and complete provi- financial instruments and risks chapter. are closely connected with operating sion of information about new business risks. They comprise management processes, products and services to all Price and foreign exchange risks

1 risks, business and financial decision- departments concerned is important. The Petrol Group purchases petroleum making risks, and strategic decision- products under international market con- making risks. II.4. Risks of fraud and ditions, pays for them mostly in US dollars 1 2 3 4 5 Probability (frequency) other illegal activities and sells them in local currencies. With the Management risks are controlled by Management of the risks of fraud and global oil market and the US dollar market Probability (frequency) levels: Relevance levels: regularly measuring the organisational other illegal activities also requires con- constituting two of the most volatile global 1 - the event can occur less than once every three years; 1 - potential damage to operations is less than EUR 50,000; climate in the entire Petrol Group and stant supervision and control despite 2 - the event can occur at least once every three years, but no more than twice a year; 2 - potential damage to operations is between EUR 50,000 and EUR 250,000; markets, the Petrol Group is exposed to 3 - the event can occur more than twice a year, but no more than once a month; 3 - potential damage to operations is between EUR 250,001 and EUR 1,000,000; via the annual interview system. Strate- their low probability (frequency) and both the price risk (changes in the prices 4 - the event can occur more than once a month, but no more than once a week; 4 - potential damage to operations is between EUR 1,000,001 and EUR 5,000,000; 5 - the event can occur more than once a week. 5 - potential damage to operations is more than EUR 5,000,000. gic decision-making risks are reduced relevance. of petroleum products) and the foreign WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 36 ANNUAL REPORT PETROL 2010 37

exchange risk (changes in the EUR/USD and is adjusted weekly to reflect current The Group is exposed to changes in the forts to increase the number of secured Petrol Group is not exposed to significant due to a general increase in the number of exchange rate) when pursuing its core line prices of petroleum products and sales dy- EUR/RSD exchange rate because of a receivables. Particular attention is given to credit risks in relation to any individuals or defaults and a decrease in sales. of business. namics. The forecasting of sales quanti- long-term EUR-denominated loan taken individual treatment of major customers. groups of individuals that could pose a sig- ties and their value is the key for effective out by a Serbian subsidiary. Considering To manage receivables, the Petrol Group nificant single risk. Our estimate is based The Petrol Group's short-term solvency Since April 2000, the pricing model for price and foreign exchange hedging. the Petrol Group's overall operations, this uses numerous types of credit insurance on the nature of our products, our market is achieved through central management petroleum products has allowed changes represents only a small portion, and we (mortgages, pledges, bank guarantees, share and a large customer base. and careful planning, and through coor- in global prices of petroleum products and As regards supplying electricity to end believe the Group is not exposed to signifi- collaterals, securities, promissory notes, dination of cash flows. The controlling foreign exchange rates to be passed on customers, the controlling company ap- cant risks in this case despite the fact that bills of exchange etc.). Pursuant to amend- We actively monitor credit ratings of our company and its subsidiaries use dedi- to domestic prices. This has significantly propriately managed price and quantity the EUR/RSD exchange rate increased by ments to the Execution of Judgments in customers and suppliers by means of in- cated software to plan and monitor daily reduced the Petrol Group’s exposure to risks by matching the terms of sale ap- 13 percent in 2010 compared with the end Civil Matters and Insurance of Claims Act, formation support and exchange of infor- liquidity, giving them detailed insight into price and foreign exchange risks. plicable to customers to suppliers’ terms of 2009. the bill of exchange gained in importance mation between all company employees. and control over cash flows. Furthermore, of procurement. and is once again an important security In 2010 the controlling company added a cash pooling system was introduced The Petrol Group hedges against price Transactions with derivatives are entered instrument. Credit Check, a new risk management for all Slovene subsidiaries already in risks by harmonising procurement and In addition to the above, the controlling into only to hedge against price and for- tool developed by the company Bisnode, 2006. Due to tax and economic reasons sales formulas applicable to petroleum company supervises and offers advice eign exchange risks and not for reasons of The controlling company and its subsidiar- to its system to assess credit ratings. (costs of payment transactions, foreign product prices and with the help of ap- on hedging against foreign exchange speculative nature. ies each actively monitor the balance of Credit Check predicts the probability of exchange differences), however, subsidi- propriate financial instruments. In some risks at its subsidiaries. This mainly operating receivables, and while conduct- a customer becoming insolvent over the aries in SE Europe markets are not yet cases, it hedges against changes in petro- concerns the risks arising from changes Credit risks ing a uniform policy as regards terms of next 12-month period. For the purpose able to use the system. For the compa- leum product prices at the OTC market in the EUR/HRK exchange rate in Croatia The Petrol Group offers deferred pay- payment and potential exposure to indi- of analysing financial data and drawing nies concerned, a virtual pooling system (direct transactions between two parties and the EUR/RSD exchange rate in ments to provide its customers with at vidual customers or groups of customers up reports, other databases are used in (marginal pooling) has been introduced to outside the stock exchange) using price Serbia. least some form of crediting and thereby they also observe the principle of decen- addition to this new tool. Exposure to a optimise interest rates, while cash pooling and commodity swaps. These hedges are increase its sales revenue. As a result, the tralisation. segment of our customers was further is effectively performed through the man- mainly aimed at matching the prices rec- Apart from normal seasonal fluctuations sales department is in constant search hedged against by taking out insurance agement of operating receivables. ognised by the petroleum products pricing during the summer, when the Croatian of compromise between the tendency to In 2010 more attention was devoted to the with SID-Prva kreditna zavarovalnica model. Our business partners in this area Kuna usually appreciates, there were increase sales and, given the increased collection of receivables from construction d.d. Ljubljana. The extent of credit insur- are international financial organisations, no significant fluctuations in the EUR/ number of defaults, the tendency to keep companies in Slovenia and collection of ance through SID is now being further The Petrol banks and major oil corporations which HRK exchange rate in 2010. As a result, the balance of receivables at manageable receivables in SEE markets where the sol- increased. This enables us to extend supply petroleum products to the Petrol the Group did not enter into forward levels. We estimate that in the time of the vency of the business sector is even worse sales to new customers and also to dis- Group is Group. transactions to hedge against the foreign economic downturn the management of than in Slovenia. Receivables are sys- tressed existing customers. To assess capable exchange risk. the credit risk and the counterparty risk is tematically monitored by age, region and credit ratings of foreign customers from In 2010 the Petrol Group paid for the the most demanding of all. As evidenced organisational unit as well as by quality and SEE markets and the EU we rely on credit of meeting purchases of petroleum products within from Petrol’s extensive wholesale network, individual customer. To monitor receiva- reports offered by the company Dun & all of its deadlines standard for the oil business (30 Sales customers have turned to suppliers for ad- bles, we use a shared computer-based Bradstreet, which include information outstanding days after B/L), thus exposing its business forecasting ditional financing sources because banks receivables management application about financial strength, payment score to foreign exchange risks, i.e. to changes offer insufficient credit supply. which provides us with automated control and credit recommendation. liabilities in the EUR/USD exchange rate occurring is the key for over exposure to individual customers and at any given in the period between the transaction date effective price In the area of receivables management, a possibility to respond immediately. The Liquidity risks and the payment date. The controlling the Petrol Group has stepped up the process of managing counterparty risks The financial crisis in the Slovene and moment. company hedges against foreign exchange and foreign collection of receivables, it is quicker includes active involvement of numerous global market resulted in a substantially risks using EUR/USD forward contracts exchange to discontinue sales on open account functions, which meet regularly and adopt increased vigilance of the banking sector entered into with Slovene banks. The hedging. to defaulting customers, it has acceler- appropriate measures. when it comes to financing individuals required extent of hedging in USD is deter- ated the use of legal remedies to collect and companies. Nevertheless, the Petrol The Petrol Group is capable of meet- mined based on planned sales quantities receivables, and makes considerable ef- Credit risk is also the most significant risk Group has a very good selection of short- ing all of its outstanding liabilities at any to which the controlling company was term funding at its disposal, providing it given moment as it has, in addition to its exposed in connection with electricity with more affordable short-term financing own funds, access to liquidity reserves Key foreign exchange rates in 2010 and 2009 sales to natural and legal entities in 2010, as compared with the previous year. through approved credit lines with do- but was successfully managed using the mestic and foreign banks. It thus main- above measures. Despite the above, considerable prudence tains a high credit rating with its business As at As at Change in % Average for per 1 euro 31/12/2009 31/12/2010 (2010/2009) Low in 2010 High in 2010 2010 is required in cash flow management, partners and financial organisations at USD 1.434 1.328 -7% 1.194 1.456 1.326 Despite the general weakening of the fi- especially as regards the planning of cash home and abroad. In 2010 petroleum nancial strength of our customers due to inflows from lay away sales, because a product prices were on average consid- HRK 7.307 7.386 1% 7.189 7.428 7.289 liquidity problems, decreased production substantial number of our customers erably higher than in the same period RSD 95.025 107.47 13% 96.422 107.47 102.76 and reduced exports, we estimate that the have problems financing their operations of 2009. That is why the Petrol Group WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 38 ANNUAL REPORT PETROL 2010 39

EURIBOR in 2010 and 2009 support function since 2002. It is re- on the existence and efficiency of the func- sponsible directly to the president of tioning of the internal control system and As at As at Average for the Management Board and operates risk management within the Petrol Group. 31/12/2009 31/12/2010 Low in 2010 High in 2010 2010 throughout the Petrol Group. The pur- The verification of the functioning of internal 6-month EURIBOR 0.99% 1.227% 0.944% 1.276% 1.093% pose of Internal Audit is to give objective controls in the Petrol Group’s retail network 3-month EURIBOR 0.70% 1.006% 0.634% 1.050% 0.814% assurance and advice to the Manage- is carried out by a dedicated team of quali- 1-month EURIBOR 0.45% 0.78% 0.397% 0.853% 0.57% ment Board and to management at all fied experts who mainly verify the monitor- levels as regards property protection, ing of service station operations in terms of petrol background_Layoutimprovement 10 copy of quality 5 11.3.11 and 14:22 efficiency Page 4of goods and finance. needed slightly more working capital in a variable interest rate linked to EURIBOR, ments used to this effect are determined the Petrol Group's operations, thus help- the period concerned and, consequently, which was at a record low throughout the on the basis of market conditions. In the ing the Company achieve its strategic In 2010 Internal Audit carried out 26 re- higher credit lines. For the moment, the year. Nevertheless, the Petrol Group's light of the above changes in EURIBOR, and business goals based on best prac- views and advisory sessions and monitored prices of petroleum products remain at overall interest rate on long-term loans we increased the volume of interest rate tices. Internal Audit operates in accord- the implementation of recommendations levels that do not require higher credit was only slightly lower as at the end of hedging in 2010. ance with the Rules Governing the Work from previous years. It mainly focused on lines with banks. In view of the forecast in- 2010 relative to 2009 because banks had of Internal Audit and the principles of in- the verification of the efficiency of financial creases in oil prices in the coming period increased their interest rate margins over Internal Audit dependence, professional competence, risk management, in particular credit and and the resulting increase in the Group’s the last two years. Although banks are Organisation-wise, Internal Audit has objectivity and ethical principles as the foreign exchange risks, operations of sub- needs for short-term financing, we are progressively cutting their interest rate operated within the controlling company fundamental principles of the auditing sidiary companies in SE Europe and the constantly actively working with banks to margins and fees, these are still high as as an independent and autonomous profession. It reports to the Management verification of the efficiency and effective- increase our credit lines. compared to the period preceding the Board and the Supervisory Board’s audit ness of key business processes in accord- financial crisis. Therefore, more time will committee. ance with the parent company’s rules and Successful operations of the Petrol Group be needed to see the margins and fees de- best practices. are a guarantee for the Group's long-term crease again. The audit approach is based on the analysis solvency and thus affect the accumula- of the Petrol Group’s business risks and the tion of equity. This year the Group also To hedge against exposure to the inter- analysis of control risks. It is mainly focused received favourable long-term financing est rate risk, a portion of variable interest offers both in terms of amount and interest rates is transformed into a fixed interest rate margin, providing it with confidence rate using derivative financial instru- that its operations will remain liquid over ments. Exposure to the interest rate risk the long term. is hedged up to the amount of half of the Petrol Group's net interest position. When Interest rate risk deciding whether to pursue additional The Petrol Group regularly monitors its hedging activities, forecasts regarding exposure to the interest rate risk. The con- interest rate changes are considered. The Nevenka Šubelj, Finance Department trolling company’s long-term loans contain time of hedging and the type of instru-

The effect of changing interest rates on net profit Top Financial Officer 8,000,000 ------6,000,000 Nevenka Šubelj, head of Petrol’s fi- 4,000,000 nance department, received a pres- tigious award Top Financial Officer 2,000,000 of a Major Company for 2009. 0

-2,000,000 This competition organised by Finance, a business daily, focuses -4,000,000 on professional work of business fi- -6,000,000 nance experts and raises awareness Change in net profit or loss EUR -8,000,000 of what a well managed finance function is and how important fi- -2% -1% 0% 1% 2% nance and the functioning of finan- Interest rate change in % cial markets are at this moment for business operations of companies. THE PETROL GROUP 2010 PETROL d.d. 2010 2010 WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 OIL AND MERCHANDISE SALES 441 2.35 416.6 SERVICE MILLION TONS MILLION EUROS STATIONS OF PETROLEUM GENERATED FROM ENERGY PRODUCTS SOLD MERCHANDISE SALES ON THE GO WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 42 ANNUAL REPORT PETROL 2010 43

lower purchase prices thanks to its supply Kosovo Oil prices per barrel ranged from USD 67.6 sources. In Kosovo, retail and wholesale prices of to USD 94.0 in 2010. The average price of KEY IMPACTS petroleum products are not government- crude oil per barrel stood at USD 79.6, up Serbia regulated. Only in the case of sales of petro- 29 percent from 2009. The prices of petrol In Serbia, the prices of petroleum products leum products to government institutions and middle distillates followed the same ON OPERATIONS were regulated by the government in 2010 and state-owned companies are prices set in trend. and set in accordance with the Petroleum accordance with the prescribed methodol- Petroleum product sales are a principal line of business of Product Pricing Regulation (“Uredba o ogy, which takes into account market prices, US dollar exchange rate the Petrol Group in Slovenia and SE Europe. The pricing of cenama derivata nafte”). The liberalisation changes in the exchange rate of the euro and petroleum products is mainly subject to national pricing of petroleum product imports applied only the US dollar, logistics costs and the maxi- The average exchange rate of the US dollar regulations, changes in petroleum prices on the global to eurodiesel and autogas. All petroleum mum margin. These prices represent an according to the reference exchange rate market and changes in the US dollar exchange rate. products were subject to the maximum retail unofficial basis for setting retail prices, which of the European Central Bank stood at 1.33 price requirement and the maximum distrib- change two to three times a month. US dollars for 1 euro in 2010. utor's or producer's price requirement. For Pricing of petroleum products leum products is still fixed, but has been Since 16 April 2010, the prices have all petroleum products, the prescribed gross Changes in oil prices in 2010 slightly adjusted compared with the previ- been set in accordance with new Petro- margin amounted to RSD 5 (EUR 0.05) per Slovenia ous regulation (EUR 0.08363 for a litre of leum Product Pricing Rules (“Pravilnik o litre, except for eurodiesel, for which the In 2010 changes in the price of oil were most Until 9 October 2010, prices in Slovenia petrol, EUR 0.07841 for a litre of diesel fuel utvrđivanju cijena naftnih derivata”). Retail gross margin was set based on the required affected by expectations regarding the re- were set in accordance with the Regulation and EUR 0.05162 for a litre of extra light prices of petroleum products now change maximum retail price. In accordance with covery from the economic crisis and reinvig- on the Price Methodology for Petroleum heating oil). fortnightly according to the prescribed the applicable legislation, the prices were ad- oration of economic activities. Products. In the said regulation, the model- methodology, provided that pre-duty justed every fifteen days. On 1 January 2011, based margin for government-regulated In Slovenia, gross margins for petroleum prices increase or decrease by more than new legislation entered into force that fully petroleum products was set at a fixed products, which are, under the model, 2 percent, but the change in the retail price liberalises the Serbian oil market. Petroleum Changes in crude oil prices in 2010 in USD/barrel amount (EUR 0.08199 for a litre of petrol, set at a fixed amount and do not reflect may not exceed 3 percent. products may now be freely imported and 100 EUR 0.07687 for a litre of diesel fuel and changes in retail prices, are still below prices are also set freely. 95 EUR 0.05063 for a litre of extra light heat- European average. In the case of petrol, The gross margin is set at a fixed amount ing oil). Gross margins also remained fixed they amount to 74 percent of the average and remains unchanged. It amounts to Montenegro 90 for the duration of the regulation. gross margin in EU countries, in the case HRK 0.6 (EUR 0.08) for a litre of diesel or In Montenegro, the prices of petroleum 85 of diesel fuel to 68 percent, and in the petrol and HRK 0.4 (EUR 0.05) for a litre products were set in accordance with 80 case of extra light heating oil to not more of extra light heating oil. The prescribed the Regulation on the Method of Setting than 55 percent. methodology for setting maximum per- Maximum Retail Prices (“Uredba o načinu 75 USD/Bbl In Slovenia, mitted retail prices of fuel is similar to the obrazovanja maksimalnih maloprodajnih 70 gross margins Also adversely affecting the business op- methodology in place in Slovenia. Also, the cijena”), which has been in force since 1 65 for petroleum erations of petroleum products retailers adjustment of prices is subject to changes January 2009. The prices are changed in Slovenia are high excise duties, which in prices in the oil market and changes in fortnightly, provided that movements in the 60 products further erodes the competitiveness of the exchange rate of the US dollar against oil market (Platt's European Marketscan) JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC are still Slovene retailers. the national currency. and in the exchange rates of the euro and US dollar change by more than 5 percent. well below Croatia Bosnia and Herzegovina In addition to market oil prices and changes European Similar to Slovenia, the prices of petro- In Bosnia and Herzegovina, the prices of in the exchange rates of the euro and the Changes in crude oil prices in 2010 in EUR/barrel leum products, i.e. petrol, diesel fuel and petroleum prices are not government- US dollar, the price calculation methodol- 80 average. extra light heating oil, are government- regulated and are set freely in accordance ogy also includes all taxes and charges as regulated also in Croatia. Until 16 April with market conditions. The prices change well as an oil companies’ margin. The gross 75 2010, the prices were set in accordance weekly. In the Federation of Bosnia and margin was set at a fixed amount of EUR 70 with the Petroleum Product Pricing Rules Herzegovina, retailers notify the Federal 0.063 for a litre of petrol, EUR 0.064 for As from 9 October 2010, petroleum prod- (“Pravilnik o utvrđivanju cijena naftnih Ministry of Commerce of new retail prices a litre of eurodiesel and EUR 0.078 for a 65 ucts have been priced in accordance with derivata”). Retail prices of petroleum a day in advance, whereas in the Republic litre of extra light heating oil. From 1 Janu- EUR/Bbl 60 a new regulation on the price methodology products changed every seven days ac- of Srpska changes in prices need not be ary 2011, a changed regulation has been for petroleum products, which shall remain cording to the prescribed methodology, notified in advance. Despite the free set- in place which sets gross margins at fixed 55 in force for one year. The method of calcu- provided that pre-duty prices increased ting of prices, retail fuel prices do not vary amounts of EUR 0.063 per litre of petrol, 50 lating retail prices remained unchanged. or decreased by more than 2 percent, but significantly between service stations, EUR 0.064 per litre of eurodiesel and EUR In the new regulation, the model-based the change in the retail price could not but they are slightly lower in the Republic 0.076 per litre of extra light heating oil, leav- JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC margin for government-regulated petro- exceed 3.5 percent. of Srpska, whose service stations enjoy ing the rest unchanged. Source: Petrol WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 44 ANNUAL REPORT PETROL 2010 45

versely affected the sale of diesel fuel. Op- erations were further negatively influenced Increase in the sale of merchandise from 2006 to 2010 SALES PERFORMANCE by non-competitive fuel prices in Slovenia in EUR million which, due to high excise duties, generally 440 The turbulent economic environment left a strong mark on exceeded those in neighbouring countries. the economic environment. The economic crisis and the 400 416.6 fiscal policy which caused more difficult operating conditions The structure of fuel sales has a significant 360 374.0 382.4 strongly affected the operations of Petrol. influence on our business results. In 2010 320

the share of diesel in the fuel sales struc- 280 e responded to the stringent ture continued to increase, a trend typical 262.9 240 business conditions mainly Structure of sales of petroleum products of recent years. This has primarily been 215.7 of the Petrol Group in the 2006−2010 period 200 Wthrough the introduction of the result of changes in the composition operating novelties and the expansion of of our customers’ vehicle fleets and the 160 100% our service station network, thus achiev- rather high share of lorry transit through 120 ing good sales performance. Customer 90% Slovenia. In Slovenia, the Regulation on the 80 satisfaction surveys prove we are on the 80% Price Methodology for Petroleum Products 40 right track. 70% specifies a lower gross margin on diesel than on petrol. 0 60% Sale of petroleum products 2006 2007 2008 2009 2010 In 2010 we sold 2.35 million tons of pe- 50% Merchandise troleum products, which represents an 40% The sale of merchandise in 2010 gener- also been increasing in the markets of SE tant services include transport services, increase of 5 percent over 2009 and is 5 30% ated revenue of EUR 416.6 million, which Europe. The upward trend in sales on the car-washes, the “coffee to go” service, percent more than planned. 74 percent of is 9 percent more than in 2009 and 2 per- domestic and foreign markets additionally leasing of restaurant facilities, and the Pet- 20% sales were generated in Slovenia and EU cent above the plan. In comparison with proves that our business decisions were rol Club card. In addition to the above, we 10% markets, and the remaining 26 percent in 2009, we sold more car-care products, the right ones. strive to launch new services every year. In the markets of SE Europe. 49 percent of 0% tobacco products and virtual products 2010 we introduced the execution of pay- sales were generated in the retail market 2006 2007 2008 2009 2010 (lottery, tickets, etc.). Sales of services ments via money-order forms. and 51 percent in the wholesale market. In 2010 the sales of services relating to the

Sales in the Slovene market were at the Motor fuel Diesel fuel Compared to 2009, somewhat poorer petroleum activity were within the plan. Supplementary range 2009 level and exceeded the plan by 3 sales were recorded in food products, The greater part of the Group’s revenue The range available at Petrol’s points of Extra-light heating oil Other products percent. In the markets of SE Europe, sales reflecting the lower sales of high-end from services is generated by the parent sale is constantly being changed and up- of petroleum products increased by 23 products caused by the economic crisis. company, which earned EUR 28.9 million graded as a result of the fast adjustment of percent relative to 2009, a 12-percent rise The Petrol Group still generates the bulk of in services revenue in 2010. This figure is the service range to the needs of custom- compared with the plan. In comparison to its revenue from the sale of merchandise 1 percent above the plan and 4 percent ers and the introduction of products that 2009, the Petrol Group’s sales of motor on the Slovene market, while sales have lower than in 2009. Petrol’s most impor- open new sales opportunities (e.g. Petrol fuels rose by 5 percent, with sales of extra- light heating oil increasing by 12 percent.

Sales of New services at service stations petroleum ------A carefully selected quality product range, including car-care products and sup- products in plies and food products, has recently been upgraded by a range of services re- 2010 exceeded lated to IT development. Petrol's service stations are becoming a central point for monitoring and paying for sports bets and lottery tickets as well as for the the plan by 5 purchase of telecommunication cards and tickets. As of recently, customers can percent. have money-order forms processed at service stations. On their way to work, morning visitors can get breakfast on the go − a fresh, crunchy croissant and steamy coffee. Somewhat later travellers can opt for brunch on the go. We also offer other combined products on a regular basis, In 2010 Slovenia witnessed the bankrupt- Rok Cuderman, Retail Sales among which the favoured sandwiches and well-known fruit beverages are espe- cies of construction companies and a Coffee corners at service stations are complemented by mini bakeries that serve fresh cially popular. pastry daily. reduction in freight transport, which ad- WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 46 ANNUAL REPORT PETROL 2010 47

Club, payments via money-order forms, retail network, the Petrol Group is also be- 5 in Serbia, 3 in Kosovo, and 2 in Montene- photo on the go). Expansion of the Petrol service station coming an increasingly important energy gro − in total at 91 service stations. The Netko Award

network in the 2006−2010 period 441 supplier in the markets of SE Europe. In 3 Particular attention is devoted to di- The arrangement of the shopping prem- 500 433 3 Croatia, the Petrol Group holds a 10-per- Opening hours have been adjusted to 425 3 5 rect communication with customers, ises has been quickly adjusted to the 2 4 cent market share in terms of the number reflect seasonal traffic flows and actual which takes place also via Petrol’s 380 3 3 extensive range. In 2010 we renovated 2 of service stations. Its major competitors customer needs. For the purpose of op- webpage Tell Petrol. 38 the shopping premises of several service 400 361 3 41 41 in retail are INA, OMV, Tifon and Lukoil erational streamlining we closed some 2 36 In 2010 Petrol d.d., Ljubljana re- stations, bringing them even closer to the 33 67 73 79 Croatia. OMV and INA are also the strong- service stations in locations with insuf- 21 32 ceived the Netko Award in the cat- needs of our customers. Coffee corners, 300 est competitors of Petrol in Bosnia and ficient turnover. egory of manufacturing, services, supplemented by corners for filling in bet- Herzegovina. In 2010 the Serbian oil and trade and finance companies. Its ting and lottery tickets, were joined by mini petroleum product market was completely Wholesale network of the Petrol Group redesigned website (http://www. 200 bakeries. More price-sensitive customers regulated by the state. Companies were The Petrol Group sells around half of its petrol.si/) was selected as the best can choose from displayed items available 305 307 312 311 313 only able to import crude oil, eurodiesel petroleum products on the wholesale corporate and management site in 2010. at a promotional price. 100 fuel and liquefied petroleum gas. Those market. Its market position enables it to companies which are engaged in the retail provide an uninterrupted supply of motor sale of petroleum products in the Serbian fuels and other petroleum products, mak- 0 In 2010 Petrol market have to buy these products from ing it the leading supplier to companies in managed 2006 2007 2008 2009 2010 NIS a.d. or import crude oil and process the markets in which it operates. it at NIS refineries. In addition, our opera- 441 service SLOVENIA CROATIA BOSNIA AND HERZEGOVINA tions on the Serbian market in 2010 were In 2010 wholesale was also character- adversely affected by the depreciation of ised by fierce competition in the form stations. SERBIA KOSOVO MONTENEGRO the Serbian dinar. of numerous minor merchants and oil are complemented by 103 car-washes, 111 the number of service stations. Its compet- companies. Adaptability and reliability bars and 32 TIP STOP quick-service facili- itive advantage consists of having a leading Sales were positively influenced by set- in the past year enabled Petrol to prove Retail network of the Petrol Group ties. The latter are designed for maintain- position as regards transit routes, with ting up new points of sale for the AdBlue worthy of trust and to boost the scope By the end of 2010, the Petrol Group’s ing goods and passenger vehicles. particular emphasis on motorway loca- additive, which contributes to cleaner of cooperation with its major customers retail network grew to 441 service sta- tions and key urban and border locations. goods-vehicle exhaust, and introducing and partners. Our widespread network tions: 313 in Slovenia, 79 in Croatia, 38 in In Slovenia, there are 25 traders engaged Our main competitor is the company OMV, high-volume diesel dispensers for trans- of sales representatives, local presence Bosnia and Herzegovina, 5 in Serbia, and in the retail trade in motor fuels. With its which has a 21-percent share of the mar- port vehicles. In 2010 the autogas network through wholesale units, suitable techni- 3 each in Kosovo and Montenegro. The 313 service stations, Petrol d.d., Ljubljana ket (by the number of service stations). expanded as it gained 10 additional sta- cal and consulting support, and efficient services provided at these service stations has a 60-percent market share in terms of Thanks to the strategic expansion of its tions. At the end of 2010, autogas was logistics are the key elements securing a available at 38 service stations in Slovenia, high level of sales services and competi- 39 in Croatia, 4 in Bosnia and Herzegovina, tive advantages.

Welcome to the Petrol Club ------Through surveys and continuous monitoring of our clients’ buying habits, we wish Customer satisfaction to satisfy their existing needs and anticipate their future ones. For years the Pet------rol Group has been building its own efficient direct-marketing network and estab- The satisfaction of our business partners is one of the key elements of successful lishing a comprehensive customer relationship management (CRM) system. wholesaling. We are aware that any long-term sales relationship must be based only on mutual trust and satisfaction, which is, in practice, reflected in our activi- We are aware that loyalty schemes play an important role in building a relation- ties every day. ship with customers. Investing in customer satisfaction is one of the principal activities used to gain their long-term trust. Therefore, the Petrol Club was estab- Our market advantage has been gained by highly qualified and motivated col- lished in 2010 for regular customers, offering numerous benefits and an exten- leagues whose extensive knowledge and long-term experience guarantee a high Vesna Uršič, sive service and product range at favourable prices. Customers can get a Petrol service and competence level on the sales market. Marketing Club loyalty card and a Petrol Club payment card, bringing additional financial bonuses. Miran Lah, Our business partners have at their disposal a varied sales range and a wide se- Wholesale lection of products complementing our basic activity. We realise that sales alone The Magna payment card for legal persons remains unchanged. Wholesale cus- are not sufficient these days, but that the entire supply process is at the fore. tomers may use it for purchasing goods and services at any of the numerous ser- Through comprehensive solutions we advise partners on how to reduce their op- vice stations within Petrol's retail network in Slovenia and on foreign markets as erating costs and provide them with expert assistance in the introduction of new well as at our partners' service stations. technological solutions. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 48 ANNUAL REPORT PETROL 2010 49

fuel transfers directly from a control centre located at the Company’s headquarters. In PROCUREMENT 2010 the loss of fuel in the logistics chain de- creased notably.

AND LOGISTICS The reliable long-term supply to our fuel distribution network in Bosnia and Herze- Optimal management of the petroleum product and govina and Montenegro was ensured by the merchandise supply chain is a significant factor in the conclusion of a long-term lease contract on a cost-effectiveness of operations. warehouse in Ploče.

etrol buys most of its petroleum of a partner. But that does not mean that ness partners. When putting together our Merchandise is supplied to points of sale at products from the largest multi- we ignore new potential procurement range of merchandise, we take into ac- service stations via own and leased ware- Pnational oil companies and some sources arising from last year's global count the sales performance of our points house and distribution centres, while fresh from the major global oil and petroleum changes reflected chiefly in the redistribu- of sale, the market shares of specific Our control centre for automated monitoring and control of fuel enables us to monitor goods are delivered daily by suppliers di- fuel transfers and the movement of road tankers. products traders. Many years of continu- tion of refinery capacities, changed goods goods, prices and product quality. rectly to retail outlets. In 2010 merchandise ous cooperation with reliable and com- flows, and the foundation of new and transport costs per unit were considerably petitive suppliers give Petrol the status merged multinationals, in particular in Procurement is mainly focused on achiev- In procurement, a well-organised Petroleum product and merchandise lower than the year before. Organisational Russia and Asia. ing optimal procurement terms for food document flow is of vital importance, logistics measures brought about much improved products, car-care products, lubricants with streamlining and electronically Petroleum product logistics in 2010 involved productivity at Petrol's distribution centre in Procurement of petroleum products and supplies. In procurement of mer- supported transactions with suppliers the strict control of all logistics processes Zalog, Ljubljana, and we also defined a tyre The procurement strategy for motor fuels chandise we this year focused heavily on and distributors being among the main and the total expenses of the fuel supply logistics strategy. and middle distillates focuses on supply improving purchase conditions to achieve concerns. chain. Transport margins were reduced, re- by sea, although inland refineries located higher rebates and extended payment sulting in lower logistics costs per litre of fuel. in SE Europe, which complement the pro- deadlines. In addition to price, payment In 2010 particular attention was de- We do business only with reliable haulage curement network and increase the reli- and delivery terms, coordination with voted to improving procurement contractors which are also considered our ability of supply, mainly of derivatives for marketing activities is also important. We conditions and revising procurement future partners and we have been downsiz- which there is local demand, are also im- pay particular attention to ensuring that contracts concluded with suppliers. ing suppliers of logistics services. portant. Other petroleum products, such new products are included in the product We significantly reduced the number of as fuel oil, bitumen and gas, are delivered range and arrange special-offer prices in suppliers and further rationalised pro- The fuel supply chain was monitored all the only by land. cooperation with suppliers. curement flows. Moreover, we laid the way from the warehouse to the tanks at ser- foundations for strategic procurement vice stations to the end customers. As part Luka Domicelj, In 2010 motor fuel deliveries to our SE from regional suppliers and business of monitoring the liquid fuel supply chain, Petroleum Procurement Europe subsidiaries were carried out partners. we carried out on-the-spot verifications of mainly by sea to their storage facilities on gauges, points of delivery and transport the Adriatic coast. From there, the fuel In lubricant procurement, we suc- units. Road tankers used to transport liquid Selection was delivered by land to its final destina- cessfully overcame problems related fuel were fitted with an automated monitor- Rok Blenkuš, Logistics of suppliers tion. Other inland sources for supplying to fluctuations in the prices of base ing and control system, which enables us to petroleum products both to Slovenia and oils and other raw materials. We re- monitor the movement of road tankers and ------SE Europe are nearby inland refineries in newed the cooperation contract with Consistent with Petrol's long-term Logistics Officer financial goals, environmental ori- Hungary, Italy, Bosnia and Herzegovina, the Chevron group on our motor fuel Transport entation and main policies, the se- and Serbia. trademark in conjunction with the high- of the Year lection of suppliers is subject to the quality Texaco brand. margins were ------following factors: Procurement of merchandise 1. Strict compliance of all products reduced, In February 2010, Rok Blenkuš, In the procurement of merchandise, one We developed and implemented an procured with applicable European Director of Logistics, received of the key goals and tasks is to ensure ad- Nataša Pirš, optimal stock programme for mer- resulting the best logistics officer award standards and regulations; Merchandise Procurement 2. The purchase price and other equate availability of goods for retail and chandise in warehouses and at service in lower for 2009 for his logistics achieve- terms of procurement allow for the wholesale, while ensuring adequate ser- stations. Furthermore, we have been ments. He was presented the award lowest purchasing costs; logistics costs at the Logistics '10 trade fair, or- vice implementation at service stations in Freshness and quality, in addition conducting a programme for optimis- 3. Reliable supply, allowing for ganised by the Faculty of Logistics Slovenia and the markets of SE Europe. to the price and procurement condi- ing and streamlining the operations of lower operational stock and thus re- per litre of in conjunction with the European On an operational level, merchandise is tions, are crucial elements of food the merchandise warehouse in Zalog, duced costs of stock financing. Association for Transport, Traffic procured directly from manufacturers, procurement. with our suppliers participating in the fuel. and Business Logistics. official distributors and strategic busi- procurement process. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 petrol 2010 lp_Layout 10 copy 5 7.3.11 9:39 Page 1

ANNUAL REPORT PETROL 2010 50 ANNUAL REPORT PETROL 2010 51

Oil extraction Customer’s fuel tank Service station

Distribution using road tankers FUEL SUPPLY CHAIN Oil transport

Petrol’s storage facilities

Oil processing in refineries

Rail/road transport

Sermin facility

Tanker transport

Upgraded supervision of the fuel supply chain ------Years ago we prescribed that volume gauges on transport units should be used Matej Enci, when supplying fuel to service stations. This provided better supervision of Informatics transported quantity and shortages. ICT development, combined with our own IT system, existing equipment mounted on transport units and the cooperation of employees from several areas enables us to upgrade the supervision of the fuel supply chain, allowing for: 1. Electronic control of specific sections and installations of transport units; 2. Electronic control of movement of transport unit during transport; and 3. Automatic capture of data about the dispensed quantity, transport shortages, transport unit being empty after discharge, and any irregularities in the business process.

Thus, fuel shipments are ‘electronically sealed’ and each manipulation of inlet Emil Novak, Logistics and outlet valves is recorded in the computer on the transport unit, with data for- warded to the Petrol IT system via GSM.

The main, measurable effects of the system upgrade include reduced transport ullage, more efficient control of fuel transport (traceability of events, office-based supervision, control of each fuel delivery, and repeatability of irregularities), and operating process manageability. The project provides a good example of a busi- ness process upgraded by utilising modern technologies.

Currently, the system provides control over fuel transport from the warehouse to the service station. In the next stage, the system will be expanded so as to enable Tomaž Štrukelj, control from the warehouse to the customer. The next challenge will be the estab- Petrol Tehnologija d.o.o. lishment of such a control system in our subsidiaries. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 GAS, HEAT AND ELECTRICITY 29 91 15% GAS AUTOGAS MORE ELECTRICITY CONCESSIONS SERVICE STATIONS SOLD THAN PLANNED ENERGY FOR LIVING WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 54 ANNUAL REPORT PETROL 2010 55

network of Srbijagas. It also finalised planned. The Petrol Group sold 47.8 of 2010 the Petrol Group operated five the main measurement and regulation thousand tons of liquefied petroleum concessions for district heating. GAS AND HEAT stations and established a distribution gas − up 4 percent from 2009. The sale network in the local industrial district. of autogas stood at 16 thousand tons The sale and distribution of gas have been gaining and exceeded the 2009 figure by 18 Petrol importance in the Petrol Group. Through district heating and percent. At the end of 2010, customers cogeneration systems we are also expanding the production Acquisition of were also supplied with gas via 2,185 operates five and sale of heat. two companies gas storage tanks. The sale of industrial concessions gases equalled 3.1 thousand tons or 17 for district oth energy products are char- source (supply), whereas the distribu- management of concessions is split for gas supply percent more than in 2009. acterised by efficient use, low tion prices (network fees) are approved between the parent company and the in Croatia. heating. Bcosts and mitigation of negative by the Energy Agency of the Republic of Group’s subsidiaries. Twenty-one Production, sale and environmental impacts. In 2010 Petrol Slovenia. concessions are operated by Petrol distribution of heat started actively marketing these activi- d.d., Ljubljana, five by Petrol Energe- Supplying heat for heating purposes Heat and electricity are also produced ties in Croatia as well. tika d.o.o., and one by Ogrevanje Piran Within the scope of our expansion on through district heating systems em- by cogeneration – simultaneous gener- In 2010 Petrol d.o.o.; in Serbia one concession is the Croatian market, in 2010 Petrol ploying wood biomass or by heat and ation of electricity and useful heat from Management of gas distribution operated operated by Rodgas AD Bačka Topola acquired Butan Osijek d.o.o. and a electricity cogeneration is turning into fuel energy. In this respect, in 2010 Pet- networks and one by Petrol Gas Group, d.o.o. On 51-percent interest in Jadran plin d.o.o. an important segment of Petrol's com- rol undertook the reconstruction of the The Petrol Group is active in the supply 29 gas 30 June 2010, Petrol Plin d.o.o. was These two companies are engaged in prehensive energy product supply. In boiler room at Planina in Kranj through of natural and liquefied petroleum gas concessions. merged into the parent company Petrol the warehousing, distribution and sale 2010 Petrol d.d., Ljubljana won two con- the company Soenergetika d.o.o. along as well as in the construction and man- d.d., Ljubljana. of liquefied petroleum gas on the Croa- cessions for heating by wood biomass. with the renovation of boiler rooms in agement of gas distribution networks. tian market. The concession in Ribnica is already op- schools and other buildings. The sales prices of liquefied petroleum At the end of 2010, Petrol operated In 2010 Petrol completed the construc- erating, while the concession for heating gas in Slovenia are determined freely. 29 gas concessions, of which 23 were tion of a high-pressure gas pipeline in Natural gas sales of the Petrol Group by wood biomass in Metlika was gained In 2010 the Petrol Group sold 65,317 Also freely determined are the sales related to natural gas supply and 6 to the Municipality of Pećinci, which will in 2010 totalled 104.2 million Sm3, an at the end of 2010. MWh of heat energy or 8 percent more prices of natural gas as an energy liquefied petroleum gas supply. The enable connection to the gas transport increase of 4 percent from 2009 and 3 than in 2009 and 5 percent more than percent above the plan. The distribu- In 2010 we acquired the remaining 60% planned. 74,865 MWh of heat energy tion of natural gas amounted to 84.0 of Ogrevanje Piran d.o.o. and two con- was distributed, exceeding the 2009 million Sm3, which is 23 percent more cessions for heat supply is also held by figure and the plan by 19 and 9 percent, than in 2009 and 25 percent more than Petrol Energetika d.o.o. Thus, at the end respectively.

Liquefied petroleum gas in Croatia ------In 2010 Petrol realised the set goal of managing the entire supply of liquefied pe- troleum gas in the Croatian market – from the import, storage and bottle filling to wholesale and retail distribution. Petrol's aim is to increase market share and boost return on sales. Petrol's wide-spread service station network in Croatia is a good starting point for launching comprehensive LPG supply and securing fast sales growth.

Sufficient warehousing capacity as a precondition for trading in liquefied petro- leum gas was crucial for the realisation of our goals. Having acquired a 51-percent Matjaž Burger, holding in Jadran plin d.o.o. from Šibenik, the company Petrol-Jadranplin d.o.o. 3 Gas and Heat disposes with 1,000 m of warehouse premises, a bottle filling facility in Unešić near Šibenik and one in Križevci, allowing for gas supply to the whole of Dalmatia, to the town of Rijeka, and the wider area around Zagreb. From this warehouse Petrol-Jadranplin d.o.o. can also supply liquefied petroleum gas to the markets of Bosnia and Herzegovina and Montenegro. The purchase of a 100-percent inter- est in Butan Osijek d.o.o. enabled Petrol to establish a logistically complete LPG supply in Croatia and set strategic foundations for future supply in neighbouring At the end of 2010, customers were also supplied with LPG via 2,185 gas storage tanks. countries. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 56 ANNUAL REPORT PETROL 2010 57 ELECTRICITY By introducing the sale of electricity to households and small-business customers, Petrol complemented its comprehensive range of energy products at a single location for the whole of Slovenia.

he deregulation and liberalisa- Electricity distribution totalled 283.7 tion of the energy market made million kWh, up 39 percent from 2009 T electricity more interesting for and 27 percent above the plan. the Petrol Group. Electricity plays an important role in all segments of the The production, sale and distribution of economy and in households. In addition electricity are performed by Petrol En- to its primary function, i.e. lighting, it is ergetika d.o.o. and since 2010 also the also increasingly being used for heating parent company Petrol d.d., Ljubljana. and cooling buildings as well as for pro- Petrol Energetika d.o.o. acts as the pro- pulsion in transport. ducer, merchant, representative and intermediary in the marketing of energy products. It has also assumed the role of the distribution system operator. Gregor Karlovšek, Sales results Electricity 15% higher In 2010 Petrol d.d., Ljubljana actively than planned. entered the electricity market in Slo- venia. We set up a comprehensive Get connected infrastructure for wholesale trading in ------electricity in Slovenia and the neigh- Petrol started marketing electricity In 2010 we sold 356.7 million kWh of bouring countries and for launching to households in early 2010, first in electricity, which represents an in- the sale of electricity to domestic end packages in the areas where Petrol is operating concessions for the crease of 57 percent relative to 2009 users. End users of electricity include supply of natural gas. This was fol- and is 15 percent more than planned. households and businesses. lowed by the sales campaign “Get connected to Petrol”, which cov- ered all of Slovenia and yielded very good results. Electricity for house- holds as part of the comprehensive energy supply is one of the services payable by the Petrol Gold card. At the end of 2010, Petrol d.d., Lju- bljana supplied electricity to more than 3,500 households.

As electricity started being sold to households all over Slovenia, Pet- rol also started selling electricity to business customers through its well-developed wholesale network; the early results have already been noted and the system will be in full swing in 2011.

Electricity is also sold to households. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 58 Letno poročilo Petrol 2010 59 ENVIRONMENTAL AND ENERGY SOLUTIONS Efforts aimed at a cleaner environment represent a business opportunity – in wastewater treatment and using waste for energy production.

Environmental solutions d.d., Ljubljana is also involved in the treat- In 2010 the Petrol Group operated three ment of municipal wastewater in the Mu- Three areas of concessions for the public utility service nicipality of Maribor, the capacity of which energy solutions of municipal wastewater treatment. The is 190,000 PE. capacity of the treatment plant in Murska 1. Preparing alternative solutions for Sobota is 42,000 population equivalents Energy solutions heat and energy supply to house- holds and small-business customers. (PE) and in Sežana and Mežica 6,000 and The goal of the Petrol Group is to provide In 2010 we designed an intelligent 4,000 PE, respectively. customers with an efficient and compre- energy product range called “Centre hensive energy supply, utilising all of the of Energies”, which comprised the synergies of the Petrol Group – from pro- sales of electricity, motor fuel and Operating curement and selection of energy sources heating. three to the choice of technological solutions 2. Implementing complex projects for energy supply, financing, and system for energy solutions. In coopera- concessions management and maintenance. Such en- tion with Union d.d., in 2010 Petrol for municipal ergy services complement the standard started a project for the recupera- wastewater business lines of the Group and create tion of waste flue gases. new added value for customers, while treatment. providing a considerable competitive 3. Production of electricity from renewable sources. Photovoltaic edge for the Petrol Group. power plants were constructed at 13 service stations in 2010. All treatment plants operated success- fully in 2010. As an important company member of Aquasystems d.o.o., Petrol

Using waste for energy ------The Petrol Group is bound by its Strategic Business Plan for the 2010–2014 pe- riod to develop projects enabling the use of waste for energy production. In No- vember 2010, Petrol d.d., Ljubljana purchased a biogas plant in Ihan and started using waste for energy production. The biogas plant processes liquid manure and by-products such as glycerol (waste by-product of biodiesel production), molas- ses, slaughter waste and food waste into biogas. Biogas is a mixture of methane and carbon dioxide with traces of other elements, produced by the biological breakdown of organic matter in the absence of oxygen. It is used for electricity production with heat as the by-product. Petrol has also been designing plans for Anja Kocjančič, waste-heat utilisation. Electricity produced by the Ihan biogas plant will suffice Environmental Solutions for about 2,000 households. The Petrol Group is planning to expand this activity in the future, as it aims to become a major producer of green electricity. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 CUSTOMERS AND EMPLOYEES 2/3 3,520 OF CUSTOMERS ALSO PETROL FAMILY FRIENDLY MAKE ADDITIONAL GROUP EMPLOYEES ENTERPRISE ENERGY PURCHASES BETWEEN US WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 62 ANNUAL REPORT PETROL 2010 63

The Petrol Group’s education structure as at 31/12/2010 EMPLOYEES Petrol is one VI+ 17% of Slovenia's Only qualified and motivated employees are capable of achieving high business goals. I-III 8% most respected employers n the Petrol Group, HR management and Petrol Plin, d.o.o., and new subsidiar- people were transferred to new positions According to a survey conducted by consists of a well thought-out recruit- ies, namely Petrol-Butan d.o.o., Petrol- within the Group. The Group’s staff turno- the employment portal MojeDelo. Iment policy, an effective remunera- Jadranplin d.o.o., and Ogrevanje Piran ver rate stood at 13 percent. com, Petrol is among the most re- tion and promotion system, care for the d.o.o. joined the Petrol Group. spected employers in Slovenia. Over training and development of staff, and the Efficiency and factors contributing to three thousand job seekers took part monitoring of their satisfaction. At the end of 2010, the average age of successful business go hand in hand with in the employment portal’s survey, assessing the reputation of indi- employees was 39 years. 70 percent of the efficiency of employees during work- vidual Slovene companies based on Number of employees employees were male and 30 percent ing hours. In 2010 Petrol’s working time various criteria. Petrol thus remains At the end of 2010, there were 3,520 peo- female. efficiency rate stood at 80.7 percent, up true to its guiding principles that ple employed within the Petrol Group and by 0.6 percentage points from 2009. promote entrepreneurial innovative- at third-party managed service stations, The right experts at the right place ness, good practice examples in employment, and quality jobs, also of which 30 percent worked for subsidiary Recruiting the right experts to the right Education and training IV-V 75% in a time of increased economic un- companies and at third-party managed posts is the key for the achievement of In 2010 the number of employees taking certainty. service stations abroad. Compared with our business goals. During the selection part in various forms of education and the end of 2009, the number of employ- and recruitment process, all candidates training stood at 7,738, of which 68 were ees decreased by 36 or slightly less than are given equal treatment irrespective of engaged in a formal education process. occupational health and safety, and food and projects. Moreover, we monitor Leisure time one percent. In 2010 the Petrol Group sex or other personal circumstances. 64,639 teaching hours of training were safety (HAACP). Induction seminars the risks related to the occurrence of Petrol enables its employees to were organised for the newly employed made a couple changes to its organisa- carried out, which on average amounted accidents and injuries. The risks are as- spend their free time in a quality tional structure. The company Petrol In 2010 the Petrol Group employed 426 to more than 18 teaching hours of train- at service stations. Employees were sessed periodically and through safety manner. To this end, we have numer- d.d., Ljubljana absorbed employees from workers, the employment contracts of ing per employee. informed of novelties in the area of infor- measures maintained at an acceptable ous holiday homes in Slovenia and the companies Petrol Skladiščenje d.o.o. 462 employees were terminated and 348 mation support to operations. level. Croatia, where our employees and their families can spend their holi- days. Each year, the Company sets At the Automobile Association of Slove- As in previous years, the Group followed Petrol Academy out on a Petrol trip, which is always Changes in the number of employees of the Petrol Group and at nia's training ground in Vransko, Petrol a programme of preventive medical attended by many employees. Ahead third-party managed service stations in the period 2006-2010 carries out a organised safe driving courses for its checkups in 2010. Continued monitor- of the New Year, we get together comprehensive employees, the so-called Petrol's safe ing of medical condition remains one of at a New Year’s party, while “Pet- driving week. The courses were intended the most effective methods for a timely rol’s toddlers” are visited by Santa employee for employees who, due to the nature prevention of chronic diseases and for Claus. For more than 30 years, 3,536 3,556 Petrol has been promoting sports, 3,520 of their work, spend most of their time obtaining feedback on the suitability of 3,600 training recreation and socialising at events 287 284 149 driving. working conditions. We carried out 1,227 for employees, which are organised 3,200 2,944 programme. 2,768 medical checkups. In 2010 particular at- several times a year. In 2010 Petrol 2,800 238 1,153 Particular attention was devoted to the tention was also devoted to workers with Winter Games took place on Rogla, 229 1,174 1,188 2,400 training of outworkers, i.e. truck drivers a reduced working capacity. while Summer Games took place in 1,129 Organised as part of the Petrol Group is and students. In 2010 a number of vari- Mengeš. 2,000 1,096 Petrol Academy, which provides system- ous technical seminars were organised Remuneration 1,600 1,589 atic and comprehensive training of em- for them, which were attended by 1,816 Performance orientation is a basis of 1,514 1,511 1,200 ployees. It organises numerous internal active participants. the Petrol Group’s remuneration sys- 1,043 904 training programmes that are adapted tem. Salaries thus consist of a fixed and 800 to working processes. In 2010 the Group Occupational safety variable part. Collective performance, 400 539 534 561 573 629 continued its management and sales The Petrol Group does its best to provide which is calculated using a performance 0 programmes at service stations, team- its employees with the best possible benchmark, is an important component

2006 2007 2008 2009 2010 work workshops as well as technical and working conditions. All companies of of variable pay. For service stations legally required training. We upgraded the Petrol Group have adopted safety and regional retail and wholesale units the training of instructors at service sta- declarations with risk assessment. The performance is calculated on a monthly PETROL d.d., LJUBLJANA SUBSIDIARIES – total tions. The bulk of training consisted of latest findings in occupational safety and basis, for corporate functions it is calcu- third-party managed service stations - slovenia third-party managed service stations - ABROAD technical training, training in the area of health are integrated in new processes lated semi-annually. The Group encour- WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 64 ANNUAL REPORT PETROL 2010 65

ages individual performance through bonuses for exceptional achievements and through promotion. CUSTOMER

For several years, the Petrol Group has had in place a system of annual interviews SATISFACTION with key personnel. They concern all mem- bers of top, middle and junior manage- ment, and employees at highly technical positions who have individual employment MEASUREMENT contracts. An important factor in customer satisfaction is expectations, closely related to the quality of products and services. The At Petrol, the voluntary supplementary Petrol Group strives to provide high-quality products and pension insurance of employees has been services, meeting the demands of even the most demanding part of the salary policy since 2002. The customers. scheme covers the employees of the par- ent company, subsidiaries and third-party managed service stations in Slovenia. n a highly developed market, a satis- fied customer is an important com- Organisational climate Ipetitive advantage. Petrol measures organisational climate and employee satisfaction on a regular The Petrol Group systematically monitors basis. We have been participating in the a number of parameters which influence SiOK project – Slovene Organisational Cli- the sales of energy products. In addi- mate Survey – since its inception in 2001. tion, we keep track of developments and In 2010, 67 percent of employees took part trends in the markets of Western and in the survey. The average organisational Central Europe that are comparable to climate indicator stood at 3.5, with the av- Slovenia’s and also the demand for new Inside Petrol’s office building in Ljubljana erage satisfaction indicator equalling 3.6. alternative energy sources.

In 2010 the market trends noted in previ- ous years persisted: growing complexity of business, higher customer demands and increasing competitive pressure ac- A family friendly enterprise companied by the expansion of business into additional activities and markets. ------In 2010 Petrol received a basic Family Friendly Enterprise certificate and commit- ted itself to implementing 18 measures over the next three years to facilitate a balance between professional and family life. Some of the measures are already A wide range being implemented. Employees whose children began attending elementary school were granted paid time off on the first day of school. During the first week of customers of settling the child in the nursery, employees are entitled to flexible working is included hours. Management Board compliments were introduced for special occasions (birth of a child, completion of studies, important anniversaries), and employees in market also receive a gift package for each new-born child. In addition to the Children to surveys. Anita Lovše, Adults fine arts competition, in which elementary schools across Slovenia take Human Resources part, a parallel competition for the children of Petrol's employees was organised. What is more, prize quizzes are published on the corporate intranet offering at- tractive prizes (free tickets to various events or use of Petrol's holiday facilities) Responsiveness that can be used by employees and their family members. As part of the tradi- All of this requires greater responsiveness tional winter and summer games, special events are organised for the children of and the quick adjustment of operations employees. Through these various actions we wish to communicate to our em- ployees that we are actively committed to a better work and family life balance. to market conditions. Efficiency and suc- We are convinced that thanks to this project we increase loyalty to the company cess can be increased sustainably only by In 2010 two thirds of the customers at Petrol's service stations made additional purchases besides refuelling. and realise Petrol's values. understanding the customer and having a WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 66 Letno poročilo Petrol 2010 67

responsible attitude towards the environ- ment. A proper selection of relevant mar- ket surveys enables us to adapt quickly and find new solutions. Survey results are used for formulating an improved range of products and services tailored to our customers' needs and wishes.

By including a wide group of stakehold- ers in the planning and presentation of surveys, we disseminate our market- ing philosophy and increase the level of knowledge in the Petrol Group, thus providing important feedback for changes in our organisational culture. Significant attention is also devoted to the post- survey period. Project groups draw up plans for improving the areas that have been marked as least satisfactory by our customers. Together, we upgrade other elements of customer satisfaction, doing our best to be one step ahead of their wishes and needs.

Through surveys and continuous monitor- ing of our clients’ behaviour, we wish to satisfy their existing needs and anticipate their future ones. By offering them a diver- Petrol’s service station in the vicinity of Ljubljana sified product range and after-sales activi- ties, we hope to keep their loyalty through the Petrol Club card. Service stations used to serve merely as satisfaction. Claims and complaints refuelling points with a modest range of ad- are a valuable source of information ditional products. Today, they offer much about customer satisfaction, while A service more than that. Satisfaction surveys for their efficient resolving is part of a station is much Petrol and competitive providers revealed comprehensive service that does not that Slovene customers no longer perceive end with the purchase of a product or more than a Petrol’s service stations merely as a service service. vehicle service point for their cars. Instead, they associate them with points of sale such as a general Claims and complaints are handled in point. store, patisserie, tobacconist, florist, bak- the framework of an integral complaint- ery, fast-food outlet, repair shop/mechanic, resolution system. Procedures and or electronics or specialist car parts shop. measures are defined in the Rules on Customer satisfaction surveys at Pet- In 2010 two thirds of customers came to a Complaint Resolution. The system is rol's service stations Petrol service station to refuel and make an configured to enable quick, efficient Customers who in 2010 most often came additional purchase – mainly drinks, food, and customer-friendly resolution, as to a certain service station are mostly very tobacco products, newspapers and maga- each remark or instance of customer satisfied with Petrol’s services (on a scale zines – to a greater extent than at competi- dissatisfaction is carefully examined. of 1 to 6 the satisfaction score stood at tive service stations. We are aware that an efficient claim- 5.1). According to the customers, the main resolution system has a positive advantage of Petrol over its competitors The handling of claims and complaints long-term impact on the satisfaction is the locations of its service stations, their greatly influences customer satisfaction and loyalty of our customers and, accessibility, and the selection and range The handling of claims and complaints is consequently, on the Company’s of complementary products and services. an important factor in ensuring customer reputation. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 QUALITY SYSTEMS 85 66 ACCREDITED MILLION EUROS UNIFORM MONTHLY ACCOUNT TESTING METHODS OF INVESTMENTS FOR ALL PETROL’S ENERGY FLAWLESS PRODUCTS ENERGY WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 70 ANNUAL REPORT PETROL 2010 71 THE QUALITY SYSTEM A high level of customer satisfaction is ensured by constantly monitoring the quality of goods and services.

he primary activity of the Petrol the OHSAS 18001 occupational health and Laboratory operates as an independent and Group is trading in energy. Being a safety system, and the requirements of the neutral institution, also providing services to Ttrading company, Petrol is not in a BS 7799-2 information security system. external clients. position to develop end-products directly. In 2010 the quality management system What it can do, however, is improve their was upgraded to conform with the require- Petrol Laboratory has in place a quality sys- quality before they reach the end custom- ments imposed by the new edition of the tem that is certified according to the SIST ers. ISO 9001:2008 standard. The subsidiary EN ISO/IEC 17025:2005 standard “General Euro - Petrol d.o.o. received the ISO 14001 requirements for the competence of testing environmental certificate in 2010. and calibration laboratories”. New labora- tory practice is introduced along with pro- The quality Quality of services at service stations fessional development and market needs of services at The operating quality of Petrol’s retail and the laboratory is constantly establish- Petrol's retail points of sale is monitored by means of ing new testing methods, while expert staff internal control and the “random shopping” upgrades its knowledge and takes part in points of sale method. Survey results confirm a high level Petrol's development projects. is monitored of service quality at our service stations, which has now become our competitive ad- by internal vantage. The system of internal evaluations In 2010 the control. and assessments of service station operat- ing quality is being continuously upgraded, Petrol as we realise that sales are affected by nu- Laboratory merous factors that should be considered had 72 Ongoing development in any performance assessment. of the quality system accredited Since 1997, we have been regularly up- Petrol Laboratory testing grading and expanding the Group’s quality Also operating within the Petrol Group are management system, which is certified Slovenia’s leading oil laboratory, which methods. according to the ISO 9001 standard. In conducts tests and analyses of petroleum addition to the certified quality and envi- products, lubricants and chemical prod- ronmental management systems (see the ucts, and an inspection body for the control As part of the Petrol Group, the company table below), the integrated quality system of liquid-flow gauges, tyre-pressure gauges Petrol Tehnologija d.o.o. has in place a of the Petrol Group incorporates the re- and pressurised equipment. In 2010 the quality system that is certified accord- quirements of the ISO 22000 food safety laboratory had 72 accredited testing meth- ing to the SIST EN ISO/IEC 17020:2004 management system, the requirements of ods. Within the parent company, the Petrol standard “General criteria for the opera-

Overview of certificates and laboratory accreditations

Quality Environmental Laboratory Company management system management system accreditations

Petrol d.d., Ljubljana ISO 9001:2008 ISO 14001:2004 SIST EN ISO/IEC 17025:2005

Petrol Tehnologija, d.o.o. ISO 9001:2008 ISO 14001:2004 SIST EN ISO/IEC 17020:2004

Petrol Energetika, d.o.o. ISO 9001:2008 ISO 14001:2004 /

Petrol Hrvatska d.o.o., Zagreb ISO 9001:2008 / /

Euro - Petrol d.o.o., Reka ISO 9001:2008 ISO 14001:2004 / WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 72 ANNUAL REPORT PETROL 2010 73

lishing the first two trial installations for supplying hydrogen to hydrogen-powered engines at service stations in Barje and INVESTMENTS Velenje. Investments focused on the expansion of trading in petroleum • “Advanced systems of efficient energy products in SE Europe and the consolidation of Petrol’s position use” project in Slovenia. Investments were also made to expand operations Several partners from the industry and in the areas of gas, heat, electricity, and environmental and research sector participate in the project, energy solutions in Slovenia and SE Europe. together forming a competence centre. The fundamental objective of the project he Petrol Group invested Oil and merchandise sales is to design suitable solutions for “intel- EUR 66 million in fixed assets The shopping in SE Europe ligent networks” that will comprise filling Tin 2010. In Croatia, investments were made in the stations for electric cars. sections of construction, purchase and renovation of Oil and merchandise sales in Slovenia several service four service stations. Petrol also acquired Petrol built three new service stations, of land for the construction of two service sta- which one was next to a motorway. The con- stations were tions. In Serbia, we constructed one service Diesel fuel testing struction of two service stations is coming to refurbished. station and purchased and refurbished an end, with the projected date of finalisation another one. In Bosnia and Herzegovina, we in early 2011. The process of preparing the renovated two service stations. tion of various types of bodies performing quality fuel. All the main fuels of Petrol documentation and obtaining the building permits for setting up installations for the inspection”. Petrol Tehnologija d.o.o. has contain additives ensuring greater safety permits for construction work scheduled to sale of liquefied petroleum gas at six more Energy activity 13 accredited testing methods for flow and fuel economy. In terms of quality they begin in 2011 was also underway. service stations. Twenty car-washes were Funds were invested in the construction gauge control and pressurised equipment are fully comparable to the products of overhauled. Investments were made in the of a gas network in Slovenia and Serbia control. Its services are also provided to the renowned global fuel providers. At two service stations, we introduced protection of the environment, fire safety and in the purchase of gas storage tanks. external customers. the sale of liquefied petroleum gas for and the security of service stations and Aiming to expand the gas activity to the Petrol, being one of the key suppliers vehicle propulsion and obtained building storage facilities. Croatian market, Petrol acquired two Petrol – a driver of development in the on the Slovene energy market, plays an field of fuel in Slovenia important role in planning future fuel de- As a result of ever greater market re- velopment strategies. It is aware of the quirements due to engine development environmental impact of traditional fuel and increasingly stricter environmental and therefore actively participates in the “Great idea” regulations, fuel quality management is development of alternative fuels. In 2010 project becoming progressively more complex. Petrol further pursued some develop- As the leading provider of fuel, Petrol not ment projects: Petrol strives to establish a culture only ensures an uninterrupted market of innovation as global trends and the demand for sustainable develop- supply, but offers its customers high- • Pilot project involving the introduction ment lead to the optimal utilisation (blending) of bioethanol in petrol of all available resources. We realise The project focuses on Petrol's efforts that Petrol's employees have great All the to achieve the required biofuel market innovation potential, which is why main fuels share. It is a novelty in its field and war- we launched the “Great idea” project rants innovative solutions. in 2008. After successful implemen- of Petrol tation of the pilot project in retail, we expanded it to all other areas in • Pilot project involving the setting up of contain 2010. We received more than 300 installations for supplying hydrogen to proposals for improvements in 2010, additives hydrogen-powered vehicles of which 20 were deemed a “Great ensuring The project is conducted within the scope idea”. The realisation of “Great of the Centre of Excellence for Low- ideas” will improve the quality of operations, reduce costs, boost greater Carbon Technologies, realised by Petrol revenues, increase productivity, en- together with some research institutes safety and hance safety, and provide for better fuel economy. and partners from the corporate sector. It working conditions and employee plans to conduct research on introducing satisfaction. Automatic car-wash in Trzin near Ljubljana – one of 20 that were renovated. hydrogen as an energy source and estab- WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 74 ANNUAL REPORT PETROL 2010 75

companies selling liquefied petroleum Structure of investments of the Petrol Group in 2010 gas, one in Osijek and one in Šibenik. INFORMATION Investments were made in efficient en- Other 15% ergy use projects, setting up a district Oil and merchandise sales in Slovenia 21% heating system by means of wood bio- TECHNOLOGY mass in Ribnica, and cogeneration of heat and electricity in Unior. Funds were Information technology’s close connection with business also invested in the expansion of energy areas enables us to apply best practices in all aspects of the activity in the closed industrial zone of business process. Ravne and Štore and for the establish- ment of solar power plants at service n 2010 the CRM – Petrol Club, a content (prepaid telephony, lottery/ Projects stations. As regards environmental solu- state-of-the-art customer loyalty betting, tickets), enabling the expansion In 2010 we supported operations by tions, most funds went for the purchase Isystem, was introduced with com- of best practices from Slovenia to other introducing two additional international of a biogas plant in Ihan near Ljubljana. puter support. It is based on a uniform markets where the Petrol Group oper- truck card systems. Customers may

Oil and merchandise sales in SE Europe 28% customer base covering all business ates. submit money-order forms at all Petrol Information infrastructure areas (fuel sales at service stations, the service stations in Slovenia, while in In 2010 our IT and communication infra- sale of extra-light heating oil, liquefied Croatia our service stations sell Eventim structure underwent major upgrades. petroleum gas, natural gas, electricity An efficient tickets and in Bosnia and Herzegovina We updated the entire printing infra- Energy activity 36% and environmental services). Customers information we launched pay-as-you-go mobile te- structure, which will result in a significant may opt for a uniform monthly account. lephony services in electronic form. reduction in printing costs. The platform allows for the use of mod- system ern methods and techniques in relations enables the We have gradually been expanding our withpetrol customers. 2010 lp_Layout 10 copy 5 7.3.11 9:39 Page 1 e-commerce systems in wholesale. optimisation Comprehensive treatment of business In retail, the IT system offers important and expansion partners was supported by a new sys- support both of more efficient perfor- tem providing uniform access to all data mance as well as the expansion of opera- of operations. about a business partner. E-commerce tions chiefly as regards the sale of digital was upgraded with a new, improved

Shops WELCOME TO Fuel THE CLUB

Photos

Electricity

Tickets

Gas

Car-washes Heating oil

Ihan biogas plant, sand filter WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 76 ANNUAL REPORT PETROL 2010 77

product catalogue and a new, simpler and very detailed data warehouses. Ef- system of ordering selected product ficient business notification systems groups. established on the basis of these data storages facilitate effective control over Efficient IT support is crucial for the au- operations and a speedy response to any tomation and optimisation of business operational changes. In 2010 the existing processes in the supply chain. In 2010 systems were upgraded with additional IT support systems were upgraded in functionalities, while data quality and the supply chain, greatly contributing to business notification system reliability streamlined operations. were improved.

Cloud computing Information technology supports Cloud computing enables fast and ef- new business areas ficient consolidation and optimisation IT support is a precondition for the ex- of IT support. For a number of years, pansion of operations in the electricity Petrol has been developing information segment. By mid-2010 Petrol provided all services in the form of cloud comput- the necessary IT solutions for the sale of ing – information services accessible electricity to households and small-busi- online, allowing for very wide application. ness customers. At the end of the year In 2010 we provided online access to we launched a new platform for trading in all information content via a single por- electricity. IT support for electricity trad- tal. On the operational level, databases ing has been completely integrated into provide for the construction of complex Petrol's information system. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 SOCIAL RESPONSIBILITY

PROTECTION OF OCCUPATIONAL SUPPORTING ARTS AND THE ENVIRONMENT SAFETY AND HEALTH CULTURE, SPORTS AND ENVIRONMENTALLY HUMANITARIAN ACTIVITIES FRIENDLY ENERGY WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 80 ANNUAL REPORT PETROL 2010 81 PROTECTION OF THE ENVIRONMENT The Petrol Group strictly adheres to environmental requirements and regulations. Its employees, suppliers and customers are continuously informed about environmental protection policies.

nvironmental requirements are emissions into the air and water at practi- wastewater coming from the service sta- considered in their entirety both cally all service stations. Furthermore, we tion and a restaurant facility. Ein the development of business prepared the required applications for all processes as well as new products and fuel storage facilities, LPG storage facilities Waste management services. In all markets where the Petrol and facilities posing a major or minor envi- In the area of waste management, the Group operates we introduce the best ronmental risk. By acquiring the required Petrol Group provides for organised col- environmental protection practices while environmental permits and providing for lection, separation, temporary storage or respecting the applicable environmental suitable operating conditions, Petrol is able permanent disposal of waste according to legislation of those countries. to carry out and develop without disrup- regulations and its environmental protec- tions its primary line of business across tion criteria. A special focus is on waste Slovenia and ensure the operation of its that might pose a significant threat to the Storage facility at Zalog, Ljubljana. In addition to employees, the environmental management system applies to business partners Petrol is plants, facilities and sites in line with legal environment. During the systematic col- and outworkers, such as petroleum product hauliers, capital investment project contractors, providers of environmental indicator measurements, suppliers of potentially hazardous goods, and waste collection and disposal contractors. introducing requirements. lection and separation, temporary storage the best and disposal of waste, all legal require- Care for clean air ments and recommendations are fully environmental In the Petrol Group, caring for air quality is complied with, including the most recent. tential accident scenarios and operational hauliers, capital investment project All companies of the Petrol Group have protection mostly associated with efforts to cut emis- In 2010 we continued to systematically fire-fighting plans. contractors, providers of environmental adopted safety declarations with risk sions of volatile carbohydrates. The com- collect and temporarily store municipal indicator measurements, suppliers of assessment. The latest findings in occu- practices. pany Petrol d.d., Ljubljana has installed waste generated at motorway rest and Environmental protection training potentially hazardous goods, and waste pational safety and health are integrated systems for the closed loading of under- service areas. To be able to carry out environmental collection and disposal contractors are in new processes and projects. Also, we ground tanks at all service stations and at protection tasks in an efficient manner, a arranged so that they include require- monitor the risks related to the occur- In 2010 Petrol continued activities in Zalog and Rače fuel storage facilities, thus Prevention of accidents high level of staff competency and aware- ments for consistent application of rence of accidents and injuries. The risks connection with obligations arising from preventing harmful substances from es- at higher-risk facilities ness is of vital importance. That is why environmental legislation and Petrol's are assessed periodically and, through the implementation of the Regulation on caping into the environment. In 2010 sev- In the area of prevention of major ac- Petrol’s employees are systematically environmental protection standards. In safety measures, maintained at an ac- registration, evaluation, authorisation and eral emissions monitoring exercises were cidents and mitigation of their conse- kept updated with novelties in this area 2010 all necessary regular and one-off ceptable level. A priority in the advance- restriction of chemicals (REACH), which carried out at service stations, which con- quences, we continued activities in 2010 to every year. trainings in the area of environmental ment of occupational safety and health is imposes on the industry greater respon- firmed that emissions were within required implement required systemic and regular management and chemicals handling the reduction of risks at highly exposed sibility for the management of health and limits. Emissions are also reduced through operational measures at higher-risk facili- Petrol's business partners and outwork- were carried out for employees working workplaces. environmental risks posed by chemicals. the introduction of high-quality fuels that ties as part of the tasks specified in safety ers are actively involved in its system of in these areas. It also prepared and carried out a registra- are friendlier on the environment. reports, accident prevention schemes, and environmental management. Contrac- Considerable attention was paid also to tion of four chemical compounds (three protection and rescue plans. The manda- tual relations with petroleum product Protecting and safeguarding people the theoretical and practical training of belonging to the group of petroleum prod- Wastewater tory annual inspection was carried out in and property employees in occupational safety and ucts and one to paraffins). REACH require- As in previous years, continued systematic all risk-prone facilities, revealing that the Owing to the development and introduc- health, workplace ergonomics, fire safety, ments were also communicated to our and methodical installation of suitable condition of our facilities was appropriate Risk reduction tion of new technologies and procedures, environmental protection, safe handling suppliers and customers. state-of-the-art waste treatment plants and compliant with legislation. is a priority in the working environment has been chang- of chemicals and first aid. and oil and water separators contributed ing. Petrol successfully keeps up with Environmental permits the most to a successful improvement Based on the protection and rescue plans occupational these changes. It constantly strives to Since 2003, the issue of occupational As required by the environmental protec- of wastewaters in 2010. This year, the in place at fuel storage facilities (risk-prone safety and reduce the risk level arising from working safety and health has been integrated tion legislation in place in Slovenia, we Lormanje service station was fitted with a facilities), fire-fighting and rescue exer- health. processes and looks for more health- into the Group’s quality system through continued to prepare in 2010 applications waste treatment plant with capacity of 350 cises were successfully carried out at all friendly solutions that are safer for em- the established occupational health and for environmental permits with regard to population equivalents to treat municipal fuel storage facilities in 2010 based on po- ployees. safety system – OHSAS 18001. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 82 ANNUAL REPORT PETROL 2010 83

published in a catalogue. All current content about the project is available at www.otroci- SOCIAL odraslim.si.

In cooperation with the Women’s Counsel- RESPONSIBILITY ling Centre we raised public awareness about domestic violence through the Child- Living together – the core principle of our commitment to social hood Stories campaign, with the aim of en- responsibility – helping those that most need help as well as suring that children experiencing domestic promoting creativity and compassion for our fellow human violence grow up in a safe environment. beings. aring about social and environmen- Humanitarian and cultural projects The organisation of the fine arts com- Children to tal issues has been part of the Petrol The majority of donations were allocated to petition “Children to Adults”, which was Adults – Tina Maze, the most successful alpine skier in Slovenia, has succeeded in winning CGroup’s operations for a number of non-profit organisations for humanitarian organised for the twentieth time in 2010, world cup races nine times. She believes her main achievements are the 2009 World years. The greater part of sponsorship funds purposes, and to art associations having dif- was given Petrol’s particular attention. It Championship silver medal in giant slalom, and the giant slalom and super giant slalom a fine arts medals garnered at the 2010 Olympics in Whistler, Canada. is allocated to sports and the arts, which are ficulties raising the necessary funds in their is currently the largest fine arts festival for important activities consolidating national local communities. Petrol also supported children in Slovenia. More than 3,000 fine competition identity and promoting a healthy lifestyle. the renovation of numerous cultural monu- artworks participated in the competition. with 20 years Consequently, by supporting numerous ments. Some of them were, as in the past years, of tradition. humanitarian and environmental protection projects, we have been helping the wider community achieve a more active lifestyle and an overall high quality of life. In the area of culture, in 2010 Petrol contin- ued its cooperation with the Ljubljana Fes- tival, Cankarjev dom, the Slovene National Slovene Theatre − Drama, the Slovene National Theatre Maribor and the Prešeren Theatre athletes Kranj. Petrol is directly connected with roads and traffic. We are aware of the issue of road safety and the danger of driving under the influence. As a result, Petrol is a signatory achieve good to the European Commission’s Road Safety Charter with a target of saving 25,000 In the Petrol Group, the Petrol Ladies’ Choir lives over a few years. Between 11 and 15 October 2010, the preventive campaign “A results at night without traffic accidents” was conducted at the seven busiest Petrol service has been active for years, promoting tradi- stations in Slovenia. international In 2010 the “Children to Adults” competition celebrated its 20th anniversary. It started tion and preserving cultural heritage by modestly, but looking back, we are happy to see that Petrol helped create a fine arts performing Slovene songs. events. competition for children with the longest tradition in Slovenia. Numerous works of art produced by children and received by Petrol last year testify to the fact that the sea of Structure of sponsorship funds in 2010 ideas and the infinity of children’s imagination will never dry up. Petrol has also supported the organisa- tion of numerous technical conferences Other 5%

Competitive sports concerned mainly with energy issues and Culture 9% In 2010 the greater part of sponsorship finding alternative and renewable energy Sports 86% funds was allocated to supporting competi- sources, their efficient use, and their impact tive sports, especially group sports such as on the natural environment. basketball, football, handball and hockey, but individual sports such as skiing, cycling and Structure of sponsorship funds boxing were not neglected either. 86 percent went to sports. In 2010 arts and culture received 9 percent of the sponsor- The athletes sponsored by Petrol in 2010 ship funding. In addition to demanding accomplished numerous notable achieve- arts projects, this also includes numerous ments: Dejan Zavec twice retained the IBF smaller events of no lesser quality. 3 per- world championship title and Tina Maze won cent of the funding was allocated to charity, Dejan Zavec is the best Slovene boxer of all time. In his relatively short boxing career he two Olympic silver medals. Petrol has been conquered the very top by winning the IBF welterweight (up to 66.7 kg) world champion and 2 percent went to supporting the or- a traditional supporter of motorsports, but it title on 11 December 2009. Among his numerous achievements on the European level ganisation of technical consultations in the are several intercontinental champion titles and the European Union Champion title. is also the sponsor of the football stadium in Dejan Zavec is an ambassador of fair play and positive values. His rivals and fans have field of energy and to environmental protec- nicknamed him Mr. Simpatikus. Celje, which is called Arena Petrol as a result. tion projects. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ORGANISATIONAL STRUCTURE 20 8 5 SUBSIDIARIES JOINTLY CONTROLLED ASSOCIATES ENTITIES ENERGY OF THE PETROL GROUP WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 86 ANNUAL REPORT PETROL 2010 87 GROUP COMPANIES THE PARENT COMPANY petrol 2010 lp_Layout 10 copy 5 7.3.11 9:39 Page 1

PETROL, SLOVENSKA ENERGETSKA The company Petrol d.d., Ljubljana was was 6 percent more than in 2009. The DRUŽBA, D.D., LJUBLJANA formally established on 5 June 1945 as a Company also generated EUR 386.4 mil- THE PETROL GROUP Management Board: Aleksander subsidiary of the state-owned company lion in sales revenue, up 10 percent from petrol background_LayoutSvetelšek 10– presidentcopy 5 11.3.11 until 14:22 10 January Page 4 Jugopetrol. Before it was transformed into a 2009. With the sale of services amounting ENERGY ACTIVITIES OIL AND OIL AND 2011, Mariča Lah – member, Janez private joint-stock company in 1997, Petrol to EUR 34.8 million, the 2009 sales were MERCHANDISE MERCHANDISE Živko – member, Rok Vodnik – member, had operated under a variety of different or- exceeded by 2 percent and the plan by 6 SALES IN SALES IN SE ENVIRONMENTAL AND GAS AND HEAT ELECTRICITY president from 10 January 2011 to ganisational forms. percent. SLOVENIA EUROPE ENERGY SOLUTIONS 1 February 2011, Roman Dobnikar – member, Bojan Herman, worker The parent company’s principal activity is The Company ended the year 2010 with PETROL d.d. director until 20 September 2010, trading in petroleum products and sale of sales revenue of EUR 2.4 billion, pre-tax Samo Gerdin – worker director since supplementary merchandise and services. profit of EUR 44.2 million and net profit of PETROL TEHNOLOGIJA d.o.o. (100%) 24 November 2010; Tomaž Berločnik – With its 313 service stations, it has a 60-per- EUR 37.9 million.

CYPET OILS Ltd. (100%) PETROL ENERGETIKA d.o.o. (99.38%) president since 1 February 2011 cent share of the Slovene retail market in Registration number: 5025796 petroleum products. It generates the greater The Company’s equity totalled EUR 419.6 PETROL GAS GROUP PETROL-ENERGETIKA PETROL - TRADE H.m.b.H. (100%) AQUASYSTEMS Date of entry in the Companies part of the Group’s profits and revenue. million as at 31 December 2010. d.o.o. (100%) DOOEL SKOPJE (100%) d.o.o. (26.00%) Register: 30 March 1990 RODGAS AD Bačka topola Tax number: 80267432 In 2010 Petrol d.d., Ljubljana sold 2.2 mil- CYPET - TRADE Ltd. (100%) (84.22%) E-mail: [email protected] lion tons of petroleum products, which PETROL MALOPRODAJA PETROL BIH OIL COMPANY PETROL JADRANPLIN d.o.o. SLOVENIJA, d.o.o. (100%) Sarajevo d.o.o. (100%) (51%)

PETROL SKLADIŠČENJE PETROL HRVATSKA PETROL-BUTAN d.o.o. (100%) d.o.o., (100%) d.o.o., (100%)

PETROL VNC PETROL d.o.o., PETROL PLIN d.o.o.1 d.o.o. (100%) BEOGRAD (100%) (100%)

ISTRABENZ d.d. (32.63%)

INSTALACIJA d.o.o. PETROL - INVEST OGREVANJE PIRAN d.o.o. KOPER (49%) d.o.o. (100%) (100%)

MARCHÉ GOSTINSTVO EURO - PETROL GEOPLIN d.o.o. (31.98%) d.o.o. (25%) d.o.o. (51%)

PETROL - BONUS KARKASA d.o.o.2 (50%) GEOENERGO d.o.o. (50%) d.o.o. (50%)

BIO GORIVA d.o.o. (25%) PETROL - OTI - SLOVENIJA SOENERGETIKA d.o.o. (25%) L.L.C. (51%)

PETROL SLOVENIA TIRANA WHOLESALE SH.A. (55% )

PETROL SLOVENIA TIRANA DISTRIBUTION SH.P.K. (100% )

THE PARENT COMPANY SUBSIDIARIES

JOINTLY CONTROLLED ENTITIES ASSOCIATES

On 30 June 2010 Petrol Plin d.o.o. was merged into Petrol d.d., Ljubljana. On 16 December 2010 the business operations of Karkasa d.o.o. were wound up. 2010 WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 88 ANNUAL REPORT PETROL 2010 89

At the end of 2010, Petrol Hrvatska d.o.o. sale of petroleum products and other PETROL MALOPRODAJA SLOVENIJA, operated 34 service stations in Croatia. merchandise in Serbia. D.O.O. SUBSIDIARIES General Manager: Igor Mravlja The company’s equity totalled EUR 42.3 In 2010 the total quantity of petroleum E-mail: [email protected] perating results of subsidiary consisted of trading and financing of oil Through its retail and wholesale activities, million as at 31 December 2010. products sold totalled 8,485 tons, which companies are shown as pre- and petroleum product transactions, and the company sold 150,472 tons of petro- was on a par with the previous year’s sales. In 1999 the controlling company Petrol d.d., Osented in the consolidated finan- transactions involving other merchandise. leum products in 2010, which was 25 per- EURO - PETROL D.O.O. Ljubljana acquired full ownership of the cial statements. On the above date, the operations of the cent more than in 2009. General Managers: Jozo Kalem, Gregor Revenue from the sale of petroleum prod- company Shell Slovenija d.o.o. Ljubljana, company Cypet Oils Ltd. were transferred Lukman ucts totalled EUR 9.2 million, with revenue renaming it Destilat d.o.o. on its entry in PETROL-TRADE HANDELSGES.M.B.H. to the company Cypet-Trade Ltd. In the past year, the company generated E-mail: [email protected]; from the sale of services amounting to the Companies Register in July 1999. On 9 General Manager: Marko Malgaj EUR 133.7 million in revenue from the sale [email protected] EUR 15.2 thousand. In 2010 the company March 2004, the company Destilat d.o.o. was E-mail: [email protected] In 2010 Cypet-Trade Ltd. purchased and of petroleum products, EUR 5.2 million in Petrol d.o.o. Beograd generated EUR 9.2 renamed Petrol Maloprodaja Slovenija, d.o.o. sold 1,129,605 tons of petroleum prod- revenue from the sale of merchandise, and In February 2008 the company Petrol million in sales revenue. The company Petrol-Trade ucts, a decrease of 7 percent compared EUR 383 thousand in revenue from the sale d.d., Ljubljana acquired a 51-percent The company Petrol Maloprodaja Slovenija, Handelsges.m.b.H. was established in with the year 2009. The company gener- of services. In total, the company generated ownership interest in the company Euro In 2010 the company generated a net loss d.o.o. is engaged in retail sale of petroleum Vienna in 1987 and is fully owned by the ated EUR 619.1 million in sales revenue in EUR 139.3 million in sales revenue. - Petrol d.o.o., thus becoming its majority of EUR 3.7 million. This underperformance products, merchandise and services at ser- parent company Petrol d.d., Ljubljana. It the period concerned. owner. The company is engaged in the relative to 2009 was the result of impaired vice stations in Slovenia. The service stations is an important link in the Petrol Group’s The company’s 2010 net profit totalled EUR sale of oil derivatives, petroleum products investments in land. and the merchandise are the property of procurement chain for petroleum and The company’s 2010 net profit stood at 237 thousand, a considerable improvement and other merchandise in Croatia. Petrol d.d., Ljubljana. chemical products. EUR 5.3 million, up 34 percent from 2009. on the previous year. Petrol d.o.o. Beograd operated 5 service In 2010 the company Euro - Petrol d.o.o. stations at the end of 2010. In 2010 the company Petrol Maloprodaja Petrol-Trade Handelsges.m.b.H. is the The company’s equity totalled EUR 8.8 Petrol BH Oil Company d.o.o. Sarajevo sold 256,919 tons of petroleum products, Slovenija, d.o.o. generated EUR 13.2 million sole owner of the subsidiary Cypet-Trade million as at 31 December 2010. operated 38 service stations at the end of exceeding the 2009 sales by 28 percent. The company’s equity totalled EUR 6.0 in sales revenue, up 5 percent on the previ- Ltd., which was established in 1998 and is 2010. million as at 31 December 2010. ous year. engaged in trading and financing of oil and CYPET OILS LTD. Revenue from the sale of petroleum petroleum product transactions. General Manager: Marko Malgaj The company’s equity totalled EUR 41.1 mil- products totalled EUR 255.0 million, with PETROL - INVEST D.O.O. Sales revenue consists of fees charged to E-mail: [email protected] lion as at 31 December 2010. revenue from the sale of merchandise Executive Director: Dean Krivec Petrol d.d., Ljubljana in connection with sales In 2010 Petrol-Trade Handelsges.m.b.H. amounting to EUR 14.7 million and rev- E-mail: [email protected] activities performed at the service stations purchased and sold 409,407 tons of The company Cypet Oils Ltd. was estab- PETROL HRVATSKA D.O.O. enue from the sale of services to EUR 2.0 managed by Petrol Maloprodaja Slovenija petroleum and chemical products, a de- lished at the end of 1989 and is fully owned General Manager: Ignac Rupar million. In total, the company Euro - Petrol At the beginning of 2008, Petrol d.d., d.o.o. In addition, the company Petrol Malo- crease of 31 percent compared with the by Petrol d.d., Ljubljana. On 1 January E-mail: [email protected] d.o.o. generated EUR 271.7 million in sales Ljubljana established the company Petrol prodaja Slovenija, d.o.o. received EUR 38 year 2009. 2004, its business operations were trans- revenue in 2010. - Invest d.o.o., in which it has a 100-per- thousand in interest income. ferred to the company Cypet-Trade Ltd. In The company Petrol Hrvatska d.o.o. was cent interest. The company’s business The company generated EUR 214.8 million 2010 the company Cypet Oils Ltd. gener- established in 1996 and is fully owned by The company generated a net profit of activities consist of capital investments in The company ended the year 2010 at break- in sales revenue in 2010. ated finance income only, its net profit for Petrol d.d., Ljubljana. It is engaged in the EUR 5.2 million in 2010, a considerable the petroleum activity in Montenegro. The even point. 2010 amounting to EUR 209 thousand. sale of oil derivatives, petroleum products improvement from the previous year, of company manages and conducts all pro- The 2010 net profit of Petrol-Trade and other merchandise in Croatia. which EUR 2.7 million is attributable to cedures relating to the purchase of land The company’s equity totalled EUR 12.7 mil- Handelsges.m.b.H. totalled EUR 835 thou- The company’s equity totalled EUR 1.9 Petrol d.d., Ljubljana. and construction of buildings. Once a capi- lion as at 31 December 2010. sand, which was 52 percent less than in million as at 31 December 2010. In 2010 Petrol Hrvatska d.o.o. sold 134,099 tal investment is completed, the company the previous year. tons of petroleum products, which was 12 The company Euro - Petrol d.o.o. oper- transfers the property to Petrol-Bonus PETROL SKLADIŠČENJE D.O.O. PETROL BH OIL COMPANY D.O.O. SA- percent more than in 2009. ated 45 service stations at the end of d.o.o. to be managed, via a finance lease. General Manager: Rok Blenkuš The company’s equity totalled EUR 2.5 RAJEVO 2010. E-mail: [email protected] million as at 31 December 2010. General Manager: Revenue from the sale of petroleum The company owns two service stations, Aleksander Malahovsky products totalled EUR 133.8 million, with The company’s equity totalled EUR 67.1 which were transferred, based on finance The company Petrol Skladiščenje d.o.o. was CYPET-TRADE LTD. E-mail: [email protected] revenue from the sale of merchandise million as at 31 December 2010. lease agreements, to Petrol - Bonus d.o.o. established in 2002 and is fully owned by the General Manager: Marko Malgaj amounting to EUR 10.3 million and revenue to be managed while at the same time company Petrol d.d., Ljubljana. Its principal E-mail: [email protected] The company Petrol BH Oil Company from the sale of services to EUR 1.2 million. PETROL D.O.O. BEOGRAD a moratorium on lease payments was activity comprises management of storage d.o.o. Sarajevo was established at the In 2010 Petrol Hrvatska d.o.o. generated General Manager: Aljoša Višnar agreed. In 2010 the financial performance facilities purchased in July 2002 by the par- Cypet-Trade Ltd. is a subsidiary of the beginning of 1999 and is fully owned by EUR 145.2 million in sales revenue. E-mail: [email protected] of Petrol - Invest d.o.o was at break-even ent company Petrol d.d., Ljubljana from the Vienna-based company Petrol-Trade Petrol d.d., Ljubljana. The company’s prin- point. company Nafta Lendava in accordance with Handelsges.m.b.H. and is fully owned by cipal activities comprise wholesale and The company’s 2010 financial performance The company began operating in 2003 an agreement on the restructuring of Nafta the said company. Since 1 January 2004, retail trade in liquid and gaseous fuels, and amounted to a net loss of EUR 3.6 million, and is fully owned by the company Petrol The company’s equity totalled EUR 8.6 Lendava concluded with the Government of the company’s principal activities have sale of similar products. an improvement on the previous year. d.d., Ljubljana. Its principal activity is the million as at 31 December 2010. the Republic of Slovenia. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 90 ANNUAL REPORT PETROL 2010 91

At the end of 2009, the Management PETROL VNC D.O.O. In addition to its principal activity, the com- rol d.d., Ljubljana purchased from the com- In 2010 Petrol Energetika d.o.o. sold 356.8 Board of the parent company decided General Manager: Bojan Babič pany operated in the field of construction pany Slovenske železarne d.d. 80-percent million kWh of electricity, of which 39.3 mil- to streamline the business processes E-mail: [email protected]; and management of natural gas networks interests in Energetika Ravne and Energe- lion kWh were generated by the company of the company Petrol Skladiščenje [email protected] and liquefied petroleum gas networks. tika Štore. Through a capital increase and itself, and distributed 283.7 million kWh of d.o.o. and transfer its employees to absorption of the company Petrol Toplarna electricity. The company sold and distrib- the parent company’s logistics depart- The company Petrol VNC d.o.o. was When merged into the parent company, Hrastnik d.o.o., the company Petrol d.d., uted 94.7 million Sm3 and 49.3 million Sm3 ment. The latter took place on 1 Febru- established on 16 May 2006. It is fully Petrol Plin, d.o.o. operated 21 gas conces- Ljubljana increased its ownership interest of natural gas, respectively. As regards ary 2010. owned by the company Petrol d.d., Lju- sions.Three concessions are owned by to 99.38 percent. The remaining 0.62 per- heat management, the company sold 62.1 bljana and provides investigation and the parent company Petrol d.d., Ljubljana, cent of the company is owned by the com- thousand MWh of heat and distributed 71.7 The company ended the year 2010 at security services. while 18 are owned by Petrol Plin, d.o.o. pany Železar Štore d.p., delniška družba thousand MWh of heat. break-even point. The company sold liquefied petroleum gas pooblaščenka, d.d. The company provides professional ser- also via 2,185 gas storage tanks. In 2010 the company generated EUR 72.7 The company’s equity totalled EUR 559 vices related to the reception, processing, Petrol Energetika d.o.o. developed and million in sales revenue, exceeding the thousand as at 31 December 2010. displaying and archiving of alarm mes- Before the merger into the parent com- implemented a competitive multi-energy 2009 figure by 17 percent. sages received from secured buildings, pany, the company sold 11,488 tons of liq- and utility business model, which com- PETROL TEHNOLOGIJA, D.O.O. and ensures ongoing surveillance of uefied petroleum gas and 8.8 million Sm3 bines, in a technological, economic and The company’s 2010 net profit stood at General Manager: Miran Jug secured areas and buildings. In 2010 the of natural gas, based on the concessions environmental sense, the provision of com- EUR 2.1 million, up 5 percent from the previ- E-mail: [email protected] company also provided security consult- operated by Petrol Plin, d.o.o. prehensive energy services to industry and ous year. The net profit attributable to the ing services and, with the help of a li- consumer business customers. The four company Petrol d.d., Ljubljana totalled EUR At the end of 2002, the controlling censed subcontractor, detective services. In total, the company generated EUR 15.6 pillars of its operations are electricity, natu- 2.1 million. company Petrol d.d., Ljubljana merged million in sales revenue prior to the merger. ral gas and heat, renewable energy sources the building and plant maintenance op- In 2010 the company generated EUR 381 Its net profit for the period before the and comprehensive water management. The company’s equity totalled EUR 22.3 erations into the new company Petros- thousand in sales revenue, a decrease of merger stood at EUR 849.3 thousand. million as at 31 December 2010. ervis d.o.o., which was fully owned by 5 percent relative to 2009. At the end of 2010, the company held 5 the controlling company. The company The company’s equity totalled EUR 21.9 natural gas supply concessions, 2 heat PETROL GAS GROUP, D.O.O. was renamed Petrol Tehnologija d.o.o. The company ended the year with a net million as at 30 June 2010, when it was distribution concessions, 1 drinking Board of directors: Matjaž Burger, in 2004. profit of EUR 43 thousand, which was 29 merged into the parent company. water supply concession and 1 wastewa- Janez Grošelj, Primož Kramer percent less than in the previous year. ter treatment concession. E-mail: [email protected]; janez. The company’s activities comprise PETROL ENERGETIKA D.O.O. [email protected]; [email protected] maintenance of property, techno- The company’s equity totalled EUR 237 General Manager: Mojca Kert - Kos In 2010 the business methods of Petrol logical equipment and reservoirs, thousand as at 31 December 2010. E-mail: [email protected] Energetika d.o.o. continued to rely on the In August 2007, the company Petrol d.d., maintenance and construction of tech- implementation of high quality stand- Ljubljana established the company Petrol nological installations, maintenance PETROL PLIN, D.O.O. As a leading Slovene provider of compre- Mojca Kert - Kos, ards, consistent application of required Gas Group, d.o.o., Novi Sad, Serbia, to man- and testing of gas storage tank tight- General Manager: Franc Dover until 31 hensive energy and environmental solu- Petrol Energetika d.o.o. environmental criteria and on building age its own and other Petrol’s investments ness, gauge control, and environment October 2010, Janez Grošelj since 1 No- tions, Petrol Energetika d.o.o. became an trust and partnerships with internal and in companies engaged in gas activities in and equipment measurements. The vember 2010 important chapter in the Petrol Group’s de- external business environment. the territory of Serbia. The company is fully company has its own agencies for the E-mail: [email protected] velopment history in 2010. At the beginning In February 2010, Mojca Kert - Kos, owned by Petrol d.d., Ljubljana. General Manager of Petrol Ener- purchasing of spare parts, installations of the year, the company and its manage- For the purpose of trading in natural getika d.o.o., won an outstand- and equipment. Petrol Tehnologija On 30 June 2010, the company Petrol ment received an award from the Chamber gas, the company developed its own Petrol Gas Group, d.o.o. manages the ing business and entrepreneurial d.o.o. provides its services to both the Plin, d.o.o. was merged into the par- of Commerce and Industry of Slovenia for achievements award from the model for forecasting and optimising Pećinci concession which was obtained by Petrol Group and external customers. ent company Petrol d.d., Ljubljana. The outstanding business and entrepreneurial Chamber of Commerce and Indus- demand for natural gas. It is responsible Petrol d.d., Ljubljana via a public call for ten- merger was entered in the Companies achievements in the past five-year period, try of Slovenia. for the management of the natural gas ders and then transferred to the newly es- In 2010 the company Petrol Teh- Register on 31 December 2010. The com- which include doing business in a time of balance group, which comprises major tablished subsidiary Petrol Gas Group d.o.o. nologija, d.o.o. generated EUR 5.8 mil- pany Petrol Plin, d.o.o. was established extremely challenging economic conditions. In a quest for efficient management of industry customers and customers from after it had been established. In 2008 the lion in sales revenue, up 5 percent on through the merging of the gas division By receiving this most prestigious award in costs and measures aimed at quickly the Slovene municipalities in which the construction of a gas distribution network the previous year. of Petrol d.d., Ljubljana and the company the oldest competition of this kind, the com- adapting to the market, adjusting the Petrol Group obtained concessions for began in Pećinci and in the new Šimanovci Apegas d.o.o. It was fully owned by Petrol pany was acknowledged for its effective and number of work places and maintaining operating natural gas distribution sys- business zone. In October 2009, an annex The company’s net profit totalled EUR d.d., Ljubljana. The company began oper- rapid market expansion, promising vision profitability also in changed circumstances, tems. Despite the deteriorated economic was added to the contract with Srbijagas 235 thousand, down 8 percent on the ating at the beginning of 2002. Its princi- and clear business strategy, which is the Petrol Energetika d.o.o. maintained and situation, the company invested in the which laid the ground for the construction previous year. pal activities were gaseous fuel supply via product of the company’s own work and developed its role of a leading Slovene refurbishment of the energy infrastruc- of a connection to the main pipeline and gas networks, steam and hot water sup- implementation of an innovative business provider of comprehensive energy and ture, which remains a precondition for completion of the distribution network. In The company’s equity totalled EUR 1.7 ply, storage and trading in gaseous and model of providing comprehensive energy environmental solutions also in 2010. the functioning of the energy market and 2010 the company planned to complete million as at 31 December 2010. liquid fuel, consulting and project design. and environmental solutions. In mid-2002, the controlling company Pet- energy security. the construction of a distribution network WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 92 ANNUAL REPORT PETROL 2010 93

in the Šimanovci business zone and con- In 2010 the company generated EUR 2.1 The company’s equity totalled EUR 667 nect the first customers to the pipeline million in sales revenue, which was on a par thousand as at 31 December 2010. in April. The construction was delayed, with the previous year. JOINTLY CONTROLLED however, because of high underground PETROL-ENERGETIKA DOOEL SKOPJE water levels, meaning the construction of Its net profit totalled EUR 88.3 thousand, of General Manager: Gorazd Skubin the distribution network could not con- which EUR 74.4 thousand is attributable to E-mail: [email protected] ENTITIES tinue before September 2010. A technical the company Petrol d.d., Ljubljana. inspection and acquisition of an operating In October 2010, the company Petrol d.d., permit are planned to take place in Janu- The company’s equity totalled EUR 3.0 mil- Ljubljana established the company Petrol- GEOENERGO D.O.O. Important events of 2010 included Until the winding up of its operations in 2010, ary 2011. lion as at 31 December 2010. Energetika Dooel Skopje which is engaged General Managers: Evgen Torhač, Miha preparations for the construction of three Karkasa, d.o.o. generated EUR 665 thou- in electricity trading and is fully owned by Valentinčič new tanks to meet the needs of the Slo- sand in sales revenue. Although the company did not operate PETROL-JADRANPLIN D.O.O. Petrol d.d., Ljubljana. E-mail: [email protected]; vene Agency for Commodity Reserves, actively in 2010, it generated a net profit President of the Board: Stjepan Grcić [email protected] upgrade of the fuel biociding system, The company’s net profit for this period of EUR 117 thousand. E-mail: [email protected] The company did not operate actively in completion of access bridge at the tanker stood at EUR 25 thousand. The net profit 2010, and is currently in the process of ac- The company Geoenergo d.o.o. was estab- pier, refurbishment of the IT system, re- attributable to Petrol d.d., Ljubljana The company’s equity totalled EUR 4.2 In June 2010, the company Petrol d.d., quiring an electricity trading licence. lished in 2002 and is 50-percent owned by placement of filling arms at the rail tanker amounted to EUR 12 thousand. million as at 31 December 2010. Ljubljana acquired a 51-percent interest Petrol d.d., Ljubljana. The other company filling station, upgrade of the B 100 mixing in the company Jadranplin d.o.o. which is The company’s equity totalled EUR 5 thou- member is Nafta Lendava, d.o.o. system and completion of the system at The company’s equity totalled EUR 589 RODGAS AD BAČKA TOPOLA engaged in the storage, distribution and sand as at 31 December 2010. the truck filling station. thousand as at 16 December 2010. Board of directors: Primož Kramer, sale of liquefied petroleum gas. The company holds concession rights for Milan B. Dragosavac, Matjaž Burger OGREVANJE PIRAN D.O.O. the extraction of mineral resources, crude In 2010 the company handled 2.28 million SOENERGETIKA, D.O.O. E-mail: [email protected]; In the period from June to December 2010, General Manager: Srđan Purić oil, natural gas and gas condensate in the tons of petroleum products, up 6 percent General Manager: Aleš Ažman [email protected]; the company sold 5.8 thousand tons of E-mail: [email protected] area of the Mura depression. Geoenergo from the year 2009. Its sales revenue E-mail: [email protected] [email protected] LPG, generating EUR 3.4 million in sales d.o.o. and the Nemocco Slovenija Corpo- amounted to EUR 14.3 million, an increase revenue. In June 2010, the company Petrol d.d., ration concluded a long-term contract on of 3 percent relative to the previous year. The company Soenergetika, d.o.o. was es- In July and October 2007, the company Ljubljana acquired from the municipality of joint investments in carbohydrate extrac- tablished in February 2010 by Petrol d.d., Petrol d.d., Ljubljana acquired a majority From June to December 2010, the company Piran a 60-percent interest in the company tion from oil and gas fields Dolina and The company generated a net profit of Ljubljana and the companies Domplan 84.22-percent interest in the company generated a net loss of EUR 36 thousand, of Ogrevanje Piran d.o.o., thus becoming Petišovci near Lendava. EUR 5.6 million in 2010, exceeding the d.d., Holding Slovenske elektrarne d.o.o. Rodgas AD Bačka Topola. The company’s which EUR 19 thousand is attributable to the its sole owner. The company’s principal previous year’s figure by 8 percent. The and Elektro Gorenjska d.d. to carry out the activities consist of the distribution of gas company Petrol d.d., Ljubljana. activities consist of gaseous fuel supply as At the end of 2008, the basic production net profit attributable to Petrol d.d., Lju- project Cogeneration of Heat and Electric- via a gas network in Serbia. well as steam and heat production and dis- of carbohydrates was transferred to the bljana amounted to EUR 2.7 million. ity in the Boiler Plant at Planina, Kranj. The The company’s equity totalled EUR 2.0 tribution. This acquisition gives the Petrol company Nafta-Geoterm d.o.o., which is company’s main activity is electricity, gas Petrol d.d., Ljubljana entered the natural million as at 31 December 2010. Group additional momentum in expanding why the company Geoenergo d.o.o. did not The company’s equity totalled EUR 20.0 and steam supply. The company is 25-per- gas distribution market in the Republic its energy activities in the littoral region. operate actively in 2009 and 2010. million as at 31 December 2010. cent owned by Petrol d.d., Ljubljana. of Serbia by acquiring a local distributor PETROL-BUTAN D.O.O. that was familiar with the situation in the President of the Board: In September 2010, the company, being In 2010 the company generated a net loss KARKASA, D.O.O. In 2010 the company generated a net loss country and had good business and politi- Božidar Roguljić a lead partner in a consortium with the of EUR 7 thousand. The net loss attribut- General Manager: Peter Globočnik of EUR 216 thousand. The net loss attribut- cal connections. Thanks to the country’s E-mail: [email protected] municipality of Piran, entered into a 25- able to the company Petrol d.d., Ljubljana E-mail: [email protected] able to Petrol d.d., Ljubljana amounted to favourable position in the region, its big year contract for the performance of a totalled EUR 4 thousand. EUR 54 thousand. development potential and economic In August 2010, the company Petrol d.d., concession-based activity of operating the At the company members’ meeting in growth, this market represents an inter- Ljubljana acquired a 100-percent interest in gas and heat distribution system in the The company’s equity totalled EUR 132 November 2010, the companies Sava The company’s equity totalled EUR 324 esting opportunity for the expansion of the company Butan d.o.o. which is engaged municipality. thousand as at 31 December 2010. Tires d.o.o. and Petrol d.d., Ljubljana, the thousand as at 31 December 2010. Petrol’s gas activities. in the storage, distribution and sale of company members of Karkasa, d.o.o., liquefied petroleum gas. From July to December 2010, the com- INSTALACIJA, D.O.O KOPER unanimously decided to wind up the com- PETROL - BONUS D.O.O. The company Rodgas AD Bačka Topola pany sold 544 tons of liquefied petroleum General Manager: Rinaldo Glavina pany, which was established in 2004 and Executive Director: Branko Kašćelan distributes natural gas via a gas network In the period from August to December gas. Its sales revenue stood at EUR 760 E-mail: [email protected] whose principal activity was truck tyre Finance Director: Dean Krivec measuring 132.43 km. In 2010 the com- 2010, the company sold 644 thousand tons thousand. retreading. E-mail: [email protected] pany sold 6.1 million Sm3 of natural gas to of LPG, generating EUR 670 thousand in The company Instalacija, d.o.o. Koper was household and industry customers, which sales revenue. The company’s net profit for the period established in 1991. Its principal activities The company operated until 16 December The companies Petrol d.d., Ljubljana and was 13 percent more than in the previous concerned totalled EUR 25 thousand. comprise storage and handling of petro- 2010. During this time it retreaded 3,984 Montenegro Bonus - Cetinje established year. 1,161 households and 114 businesses From August to December 2010, the leum products. The company is 49-per- tyres, which was 25 percent less than the company Petrol - Bonus d.o.o. by were connected to the network at the end company generated a net loss of EUR 26 The company’s equity totalled EUR 2.2 cent owned by Petrol d.d., Ljubljana, with in 2009, and sold 4,176 retreaded truck means of the contract signed in August of the year. thousand. million as at 31 December 2010. Istrabenz d.d., Koper owning 51 percent. tyres, down 21 percent relative to 2009. 2007. Both companies have a 50-percent WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 94 ANNUAL REPORT PETROL 2010 95

interest in the new company. The com- The company operated three service sta- pany’s principal activity is the sale of gas tions at the end of 2010. and petroleum products in the territory of ASSOCIATES Montenegro. The company’s equity totalled EUR 13.3 million as at 31 December 2010. Aquasystems d.o.o. 2010 and substantially reduce the com- The company holds two service sta- Activities: Construction and operation of pany’s debt to its creditors. tions, which are owned by Petrol - Invest PETROL SLOVENIA TIRANA industrial and municipal water treatment d.o.o., under a finance lease and one WHOLESALE SH.A. plants – the central waste treatment plant service station under a standard lease. General Manager: Roman Mazi in Maribor E-mail: [email protected] Ownership interest of Petrol, d.d., Lju- In 2010 the company sold 18.213 tons of bljana: 26% petroleum products, which was 146 per- The company Petrol Slovenia Tirana cent more than in 2009. The company Wholesale SH.A. was established in July Geoplin d.o.o. Ljubljana generated EUR 19.6 million in sales 2007 and is 55-percent owned by Petrol Activities: Sale and transport of natural gas revenue in 2010, up 180 percent on the d.d., Ljubljana. The company’s activities Ownership interest of Petrol, d.d., Lju- previous year. consist of wholesale of liquid and gaseous bljana: 31.9779% fuel and similar products in the territory In 2010 the company generated a net of Albania. The company did not operate Marché Gostinstvo d.o.o. loss of EUR 29 thousand. The net loss actively in 2010. Activities: Preparation of food and bever- attributable to Petrol d.d., Ljubljana ages, sale of merchandise and other ser- amounted to EUR 15 thousand. The company’s equity totalled EUR 2.0 vices million as at 31 December 2010. Ownership interest of Petrol, d.d., Lju- The company Petrol - Bonus d.o.o. op- bljana: 25% erated three service stations at the end PETROL SLOVENIA TIRANA DISTRIBU- of 2010. TION SH.P.K. Bio goriva d.o.o. General Managers: Roman Mazi, Activities: Biodiesel production The company’s equity totalled EUR 1.0 Bojan Babič Ownership interest of Petrol, d.d., Lju- million as at 31 December 2010. E-mail: [email protected]; bljana: 25% [email protected] PETROL - OTI - Slovenija L.L.C. Istrabenz d.d. General Manager: Bojan Babič The company Petrol Slovenia Tirana Dis- Activities: Management of Istrabenz E-mail: [email protected] tribution SH.P.K. was established in July Group investments and of other invest- 2007 and is fully owned by Petrol Slovenia ments The company PETROL - OTI - Slovenija Tirana Wholesale SH.A. Its activities con- Ownership interest of Petrol, d.d., Lju- L.L.C. was established in July 2007. sist of retail sale of liquid and gaseous fuel bljana: 32.63% It is 51-percent owned by Petrol d.d., in Albania. The company did not operate Ljubljana and 49-percent owned by actively in 2010. On 12 February 2010, as part of the com- OTI C.O. J.S.C. Priština. The com- pulsory settlement proceedings against pany’s principal activity is the sale of The company’s equity totalled EUR -9 the debtor Istrabenz, holdinška družba, petroleum products in the territory of thousand as at 31 December 2010. d.d., Koper, the District Court of Koper is- Kosovo. sued a decision on the confirmation of the compulsory settlement. The company was established to de- velop wholesale and retail trade in pe- In 2010 the company’s management an- troleum products and to build its own nounced and carried out the liquidation of storage facilities. In 2010 it sold 6,320 the majority of the company’s assets. On tons of petroleum products, generating 23 November 2010, the sale of a 100-per- EUR 6.7 million in sales revenue. cent interest in the company Droga Kolin- ska d.d. to the company Atlantic Naložbe The company generated a net loss of d.o.o. was completed. Based on the EUR 123 thousand in 2010, with the proceeds from this sale, the company’s net loss attributable to Petrol d.d., Lju- management was able to implement the bljana amounting to EUR 63 thousand. approved financial restructuring plan for WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 96 ANNUAL REPORT PETROL 2010 97

Business Plan of the Petrol Group for the The Supervisory Board assessed that The Chairman of the Committee com- 2010–2014 period was issued by the Su- the disclosures given in their statements municated the conclusions made at the Stable operations pervisory Board at its 21st meeting on 20 about conflict of interest were not of such meeting on 20 April 2010 to the Super- May 2010, after having acknowledged the character to influence the impartial and visory Board at the 20th meeting on the financial evaluation and the Management objective performance of the duties or same day, while the Supervisory Board under stringent Board’s explanations. It also discussed decision-making of any member of the adopted the Rules on Performance- the quarterly performance results of the Supervisory Board because of involve- related Remuneration of the Manage- Petrol Group and Petrol d.d., Ljubljana, ment of their personal economic interest, ment Board at its 21st meeting held on the appointment of Irena Prijović to the their family’s interests, their emotions, 20 May 2010. conditions position of member of the Human Re- their political or national (favourable or sources and Management Board Evalua- unfavourable) disposition, or any other The Nominations Committee was ap- In 2010 the Supervisory Board of Petrol occurred that were relevant, I, as the scheduled for 6 May 2010, with the usual tion Committee, and the adoption of the related interests with other natural or pointed at the 17th a. correspondence d.d., Ljubljana held ten meetings. Com- President of the Supervisory Board, is- agenda items. The Supervisory Board Rules on Performance-related Remunera- legal persons. At this meeting the Super- meeting to conduct the candidacy proce- pared to the year before, when the Super- sued public statements for the investors approved the Management Board’s pro- tion of the Management Board; visory Board also discussed the Audit dure for potential alternate members of visory Board met no less than nineteen and the media immediately after the posal on the allocation of accumulated 7. The semi-annual results were dis- Committee’s Action Plan for 2011, and the the Supervisory Board. The Supervisory times, there was less need for formal con- meetings, always ready to provide addi- profit and the items on the appointment cussed by the Supervisory Board at the Business Plan and Key Targets of the Pet- Board discussed the proposals of the tact with the Management Board, mainly tional information. of an alternate member of the Supervi- 22nd meeting on 26 August 2010, where rol Group for 2011. Both documents were Committee and proposed to the General due to the coordinated performance of the sory Board and amendments to the Arti- the legal representatives were issued approved. Meeting of Shareholders to appoint a Management Board and the awareness of The most important topics discussed cles of Association. In relation to the latter approval for dissolution of the company candidate identified by the Committee as the management and supervisory bodies at the Supervisory Board’s meetings in it should be noted that in addition to the Karkasa d.o.o. (dissolved by summary Work of the Supervisory suitable. of the crisis, its further escalation and the 2010 were associated with the monitor- harmonisation due to the amended Com- procedure without liquidation); Board’s committees need for prompt measures to make cor- ing of the Company’s operations, in light panies Act, the proposed amendments 8. At the 23rd correspondence meeting In 2010 the Audit Committee met six Assessment of the Petrol Group’s op- rections to cost and revenue items. of the stringent conditions of the financial comprised a proposal for the sharehold- (voting from 12 to 14 October 2010) the times. At the first meeting, which was erations in 2010 markets, stock exchanges and in the ers deciding on authorised capital. Given Supervisory Board reviewed the report on held in two parts, the Committee met In spite of the stringent economic condi- At the start of the business year, the Su- economy. The Supervisory Board and the that the General Meeting of Shareholders the merger of Petrol Plin d.o.o. into Petrol with the auditors before issuing an opin- tions, the Petrol Group achieved good pervisory Board’s composition was com- Management Board focused on identify- approved the proposed amendment with d.d., Ljubljana. The merger was one of the ion, and in the second part it formulated business results in 2010. plete, with nine members, while in the first ing strategies for the business future of a vast majority of the capital represented, activities for increasing ROA and achiev- its stance on the 2009 Annual Report half of March, Tomaž Berločnik, a member the Petrol Group. I estimate that it displayed great trust ing efficient integral communication with of the Petrol Group and the Company, The Petrol Group’s economic position is of the Supervisory Board, resigned from in the supervisory body and assigned it customers by building and consolidating prepared its view on the proposal for still strong and Petrol ranks among the his position. By the convocation of the The most important topics discussed extensive responsibility. At this meeting, the Petrol corporate brand; the selection of the auditor for 2010, leading Slovene companies. Petrol’s oper- General Meeting of Shareholders, the at the Supervisory Board’s meetings in the Supervisory Board also approved the 9. The 24th meeting of the Supervisory and discussed the Recommendations of ations are focused on achieving long-term Supervisory Board, with the assistance of 2010 Rules of Procedure of the Audit Commit- Board held on 23 November 2010 was the Audit Committee of 30 November and stable growth in harmony with the its Nominations Committee, formulated 1. At the 17th correspondence meeting tee, adopted by the latter at its 8th meet- intended mainly for discussing the nine- 2009 and approved its Rules of Pro- environment, economy, local community, an election proposal. At the 20th General (voting from 2 to 5 February 2010) the ing held on the same day; months’ performance results of the Petrol cedure. The topics of other meetings shareholders and other stakeholders. Meeting of Shareholders held on 6 May Supervisory Board, in line with Article 4. At the 19th meeting held on 29 March Group and Petrol d.d., Ljubljana. The Su- included the interim results of the Petrol 2010, the shareholders appointed Irena 09.10. of the Articles of Association of 2010 the Supervisory Board, before the pervisory Board appointed a new Worker Group and Petrol d.d., Ljubljana, the In 2010 the Petrol Group generated EUR Prijović alternate member with a term Petrol d.d., Ljubljana, issued approval to convocation of the General Meeting of Director – Samo Gerdin – and approved discussion of credit, foreign exchange 2.8 billion in sales revenue, up 20 percent of office until 7 April 2013. By the end of legal representatives for the establish- Shareholders, formulated the election the 2011 financial calendar, while the and price risk management, a dialogue from 2009. Its gross profit totalled EUR 2010, the Supervisory Board was again in ment of a company which was planned to proposal for an alternate member, pro- Management Board and the Supervisory with the auditors on the progress of the 294.5 million, which is 5 percent more full composition. be named Soenergetika d.o.o. and based posing to the General Meeting of Share- Board jointly formulated and adopted the preliminary audit, the Action Plan of the than in the previous year. The Group’s in Kranj, together with the members Ele- holders to elect Irena Prijović member of Corporate Governance Policy, which is Audit Committee for 2011, the annual profit before tax amounted to EUR 44.9 The members of the Supervisory Board ktro Gorenjska d.d., Holding Slovenske the Supervisory Board; published in the information system of the review of the powers and duties of the million and net profit stood at EUR 35.5 prepared themselves for the topics dis- Elektrarne d.d. and Domplan Kranj d.d.; 5. The next meeting held on 20 April Ljubljana Stock Exchange and on Petrol’s Audit Committee, the self-assessment million. cussed, gave constructive proposals 2. At the 17th a. correspondence meeting 2010 was dedicated to the discussion of website; of the Audit Committee’s performance, based on expert and comprehensive ver- (voting on 17 March 2010) the Supervi- the Strategic Business Plan of the Petrol 10. At the last, 25th meeting of the Super- the Action Plan of the Internal Audit for The volume of petroleum products sold by bal and written information obtained from sory Board appointed the members of the Group for the 2010–2014 period. After visory Board held on 16 December 2010 2011, and other issues within the com- the Petrol Group totalled EUR 2.35 million the Management Board, and adopted de- Nominations Committee and defined cri- carefully examining the document and the Supervisory Board acknowledged petence of the Audit Committee. tons, up 5 percent from 2009. Revenue cisions competently in line with the Rules teria to be met by the candidates for alter- holding a constructive discussion, the the fact that all members of the Supervi- from the sale of merchandise equalled of Procedure, internal regulations and legal nate member of the Supervisory Board; Supervisory Board approved the docu- sory Board signed a special statement, The Human Resources and Manage- EUR 416.6 million, exceeding the 2009 fig- powers. 3. At the 18th meeting held on 23 March ment, but tasked the Management Board specifying their fulfilment of each inde- ment Board Evaluation Committee ure by 9 percent. The investments of the 2010 the Supervisory Board approved with making a financial evaluation of the pendent criterion laid down in item C.3 of met only once to discuss the basis of Petrol Group in 2010 amounted to EUR The Supervisory Board informed the the Annual Report and convened the adopted strategy by the next meeting; Attachment C to the Corporate Govern- and prepare stances for evaluating the 66 million. At the end of 2010, the Group’s stakeholders on a regular basis. If events 20th General Meeting of Shareholders 6. The final approval of the Strategic ance Code for Joint Stock Companies. Management Board’s performance. network comprised 441 service stations. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 ANNUAL REPORT PETROL 2010 98

In 2010 the Petrol Group sold 104 million III. FINANCIAL REPORT 2010 m3 of natural gas, an increase of 4 percent from 2009. It also sold 356.7 thousand MWh of electricity and 65.3 thousand MWh of heat. At the end of 2010, the Pet- rol Group supplied liquefied petroleum gas to customers from 2,185 gas stor- ENERGY age tanks and operated 29 gas supply concessions along with 5 concessions for district heating.

Approval of the 2010 Annual Report IN NUMBERS At its 28th meeting held on 24 March 2011, the Supervisory Board discussed the An- 101 STATEMENT OF MANAGEMENT’S RESPONSIBILITY nual Report of the Petrol Group and Petrol d.d., Ljubljana for the year 2010. The CONTENTS 102 INDEPENDENT AUDITOR’S REPORT results from ordinary activity were good, 104 FINANCIAL STATEMENTS OF THE PETROL GROUP considering the general economic situa- tion. After verifying the Annual Report of AND THE COMPANY PETROL D.D., LJUBLJANA the Petrol Group and the company Petrol 114 NOTES TO THE FINANCIAL STATEMENTS d.d., Ljubljana for the year 2010 and the fi- nancial statements and the notes thereto 114 1. REPORTING ENTITY as well as the Management Board’s pro- posal for the allocation of accumulated 114 2. BASIS OF PREPARATION profit and the Independent Auditor’s Re- 115 3. SIGNIFICANT ACCOUNTING POLICIES OF THE GROUP port, the Supervisory Board approved the audited Annual Report of the Petrol Group 125 4. SIGNIFICANT ACCOUNTING POLICIES OF THE COMPANY and the company Petrol d.d., Ljubljana for 132 5. SEGMENT REPORTING the year 2010. 134 6. NOTES TO INDIVIDUAL ITEMS IN THE FINANCIAL STATEMENTS Ljubljana, 24 March 2011 176 7. FINANCIAL INSTRUMENTS AND RISKS 2010 188 8. RELATED PARTY TRANSACTIONS 190 9. REMUNERATION OF SUPERVISORY BOARD AND MANAGEMENT

BOARD MEMBERS AND EMPLOYEES WITH INDIVIDUAL CONTRACTS Tomaž Kuntarič 191 10. CONTINGENT LIABILITIES President of the Supervisory Board 192 11. EVENTS AFTER THE REPORTING DATE WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 petrol background_Layout 10 copy 5 11.3.11 14:20 Page 1

Annual Report Petrol 2010 101 Statement of management’s responsibility

he Company's management is responsible for the prepa- financial position and the results of its operations in the year ration of the financial statements of the Petrol Group and 2010. Tthe company Petrol d.d., Ljubljana for the year 2010, to- gether with accompanying policies and notes, which give, to its Management is also responsible for appropriate accounting and best knowledge, a fair view of the development and results of the for taking adequate measures to protect the Company's proper- Company’s operations and its financial position, including the ty and other assets, and confirms that the financial statements, description of material risks that the Company and other com- together with the notes thereto, have been prepared on the go- panies, if any, included in the consolidation are exposed to as a ing concern assumption and in accordance with applicable le- whole. gislation and International Financial Reporting Standards as adopted by the European Union. Management confirms that appropriate accounting policies have been applied consistently in the preparation of the financial sta- The Company's management approves and confirms the finan- tements, that accounting estimates were prepared on the princi- cial statements, together with accompanying policies and no- ples of fair value, prudence and good management, and that the tes, of the Petrol Group and the company Petrol d.d., Ljubljana financial statements give a true and fair view of the Company’s for the year 2010.

Tomaž Berločnik Mariča Lah 2010 President of the Management Board Member of the Management Board

Janez Živko Roman Dobnikar Member of the Management Board Member of the Management Board

Rok Vodnik Samo Gerdin Member of the Management Board Worker Director

Petrol d. d., Ljubljana, Dunajska c. 50, 1527 Ljubljana, Slovenia

Ljubljana, 7 March 2011 WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 102 Annual Report Petrol 2010 103 WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 104 Annual Report Petrol 2010 105 Financial statements of the Petrol Group and the company Petrol d.d., Ljubljana

Income statement of the Petrol Group and Petrol d.d., Ljubljana Statement of comprehensive income of the Petrol Group and Petrol d.d., Ljubljana

The Petrol Group Petrol d. d. The Petrol Group Petrol d.d.

Index Index (in EUR) Notes 2010 2009 2010 2009 (in EUR) Notes 2010 2009 10/09 2010 2009 10/09 Net profit for the period 35,459,859 7,890,492 37,946,402 10,661,802 Sales revenue 2,802,752,517 2,333,863,416 120 2,393,325,777 1,986,591,030 120 Net change in the value of investments in associates and Cost of merchandise sold (2,508,258,916) (2,053,885,125) 122 (2,171,101,876) (1,768,435,286) 123 jointly controlled entities 6.14 - - (1,282,331) 5,387,119

Gross profit 294,493,601 279,978,291 105 222,223,901 218,155,744 102 Net gains on available-for-sale financial assets 6.14 54,818 473,189 54,818 473,189

Costs of materials 6.4 (27,108,193) (23,317,384) 116 (10,530,944) (9,447,442) 111 Attribution of changes in the equity of associates 6.14 (181,125) 105,952 - - Costs of services 6.5 (114,882,996) (112,595,081) 102 (113,908,892) (113,876,963) 100 Net effective portion of changes in the fair value of cash 6.14 1,587,117 (2,378,830) 1,587,117 (2,378,830) Labour costs 6.6 (53,934,108) (52,529,125) 103 (26,479,854) (23,001,529) 115 flow hedges

Depreciation and amortisation 6.7 (34,447,861) (34,097,680) 101 (22,427,400) (22,184,053) 101 Foreign exchange differences (2,743,553) (1,025,422) - -

Other costs 6.8 (14,460,453) (18,375,150) 79 (8,996,524) (5,863,007) 153 Other comprehensive income (1,282,743) (2,825,111) 359,604 3,481,478

Operating costs (244,833,611) (240,914,420) 102 (182,343,614) (174,372,994) 105 Total comprehensive income for the year 34,177,116 5,065,381 38,306,006 14,143,280

Other revenue 6.2 12,962,123 12,245,802 106 6,145,683 8,450,116 73 Total comprehensive income attributable to: owners of the controlling company 32,056,813 7,516,003 38,306,006 14,143,280 Other expenses 6.9 (693,578) (463,266) 150 (56,027) (49,630) 113 non-controlling interest 2,120,302 (2,450,622) - - Operating profit 61,928,535 50,846,407 122 45,969,943 52,183,236 88 Share of profit from equity accounted investees 6.10 5,783,045 (3,683,516) - - - - Finance income from dividends from subsidiaries, associates and 6.10 - - - 13,534,714 14,045,677 96 jointly controlled entities

Other finance income 6.11 67,956,334 65,541,052 104 69,069,847 59,839,072 115

Other finance expenses 6.11 (90,781,447) (98,287,038) 92 (84,360,891) (113,789,082) 74

Net finance costs (22,825,113) (32,745,986) 70 (15,291,044) (53,950,010) 28

Profit before tax 44,886,467 14,416,905 311 44,213,613 12,278,903 360

Tax expense 6.12 (10,094,877) (8,442,839) 120 (7,295,370) (6,404,988) 114

Deferred tax 6.12 668,269 1,916,426 35 1,028,159 4,787,887 21

Tax (9,426,608) (6,526,413) 144 (6,267,211) (1,617,101) 388

Net profit for the period 35,459,859 7,890,492 449 37,946,402 10,661,802 356 Net profit for the year attributable to: owners of the controlling com- 32,904,210 10,425,564 316 37,946,402 10,661,802 356 pany non-controlling interest 2,555,649 (2,535,072) - - - -

Basic and diluted earnings per share 6.13 15.96 5.06 316 18.41 5.17 356

Accounting policies and notes are an integral part of these financial statements and should be read in conjunction with them. Accounting policies and notes are an integral part of these financial statements and should be read in conjunction with them. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 106 Annual Report Petrol 2010 107

The Petrol Group Petrol d.d. 31 december 31 december Index 31 december 31 december Index (in EUR) notes 2010 2009 10/09 2010 2009 10/09

EQUITY AND LIABILITIES

Equity attributable to owners of the Petrol Group

Called-up capital 52,240,977 52,240,977 100 52,240,977 52,240,977 100

Capital surplus 80,991,385 80,991,385 100 80,991,385 80,991,385 100

Legal reserves 61,988,761 61,974,850 100 61,749,884 61,749,884 100 Statement of financial position of the Petrol Group and Petrol d.d., Ljubljana Reserves for own shares 2,604,670 2,604,670 100 2,604,670 2,604,670 100

The Petrol Group Petrol d.d. Own shares (2,604,670) (2,604,670) 100 (2,604,670) (2,604,670) 100 31 december 31 december Index 31 december 31 december Index Other revenue reserves 119,367,602 110,420,597 108 109,792,331 100,845,326 109 (in EUR) notes 2010 2009 10/09 2010 2009 10/09 Fair value reserve 0 (54,818) - 101,857,024 103,084,537 99 ASSETS Hedging reserve (6,003,684) (7,590,800) 79 (6,003,684) (7,590,801) 79 Non-current (long-term) assets Revaluation reserves 401,641 582,766 69 0 0 - Intangible assets 6.15 23,394,325 22,462,292 104 4,596,036 4,359,225 105 Foreign exchange differences (3,803,768) (1,495,562) 254 0 0 - Property, plant and equipment 6.16 573,361,635 554,755,247 103 328,944,955 286,778,881 115 Retained earnings 64,940,254 53,160,388 122 18,973,201 2,137,232 - Investment property 6.17 14,293,359 15,739,627 91 14,186,872 15,761,198 90 370,123,168 350,229,783 106 419,601,118 393,458,540 107 Investments in subsidiaries 6.18 0 0 - 200,531,434 213,663,092 94 Non-controlling interest 34,458,004 31,310,329 110 Investments in jointly controlled entities 6.19 16,386,748 15,318,725 107 61,270,000 61,137,000 100 Total equity 6.30 404,581,172 381,540,112 106 419,601,118 393,458,540 107 Investments in associates 6.20 119,535,318 121,282,983 99 154,860,000 155,070,965 100 Non-current liabilities Available-for-sale financial assets 6.21 11,338,780 14,866,548 76 11,259,737 14,787,505 76 Provisions for employee benefits 6.31 3,953,944 3,933,933 101 2,066,543 1,736,575 119 Financial receivables 6.22 10,944,605 9,798,440 112 10,443,715 14,322,182 73 Other provisions 6.32 2,677,566 2,603,590 103 2,538,403 2,449,171 104 Operating receivables 6.23 966,472 1,267,839 76 966,472 1,133,452 85 Long-term deferred revenue 6.33 14,025,330 15,563,796 90 13,532,594 13,279,849 102 Deferred tax assets 6.12 35,074,080 34,911,346 100 37,274,223 36,787,324 101 Financial liabilities 6.34 318,821,179 236,618,681 135 293,077,579 213,914,167 137 805,295,322 790,403,047 102 824,333,444 803,800,824 103 Operating liabilities 6.35 1,364,060 1,472,582 93 1,357,182 1,149,934 118 Current assets Deferred tax liabilities 6.12 6,497,196 6,729,641 97 25,209,249 25,784,839 98 Inventories 6.24 108,421,227 82,003,555 132 90,193,443 66,763,697 135 347,339,275 266,922,223 130 337,781,550 258,314,535 131 Financial receivables 6.25 13,674,416 1,386,062 - 7,627,732 2,974,660 256 Current liabilities Operating receivables 6.26 312,122,226 244,138,201 128 285,951,240 226,430,647 126 Financial liabilities 6.34 173,244,281 262,099,337 66 131,661,896 222,056,826 59 Corporate income tax assets 6.12 437,355 3,118,595 14 0 2,858,276 - Operating liabilities 6.36 328,437,942 216,589,443 152 331,060,070 234,410,590 141 Financial assets at fair value through profit or loss 6.27 3,848,931 3,121,398 123 3,848,931 3,130,062 123 Corporate income tax liabilities 6.12 2,854,687 495,438 - 1,712,921 0 -

Advances and other assets 6.28 4,167,703 3,565,327 117 2,661,009 1,281,285 208 Other liabilities 6.37 9,053,594 7,879,120 115 7,571,723 5,908,600 128

Cash and cash equivalents 6.29 17,543,771 7,789,4 88 225 14,773,479 6,909,640 214 513,590,504 487,063,338 105 472,006,610 462,376,016 102

460,215,629 345,122,626 133 405,055,834 310,348,267 131 Total liabilities 860,929,779 753,985,561 114 809,788,160 720,690,551 112

Total assets 1,265,510,951 1,135,525,673 111 1,229,389,278 1,114,149,091 110 Total equity and liabilities 1,265,510,951 1,135,525,673 111 1,229,389,278 1,114,149,091 110

Accounting policies and notes are an integral part of these financial statements and should be read in conjunction with them. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 108 Annual Report Petrol 2010 109

Statement of changes in equity of the Petrol Group

Revenue reserves Equity Equity attributable attributable Reserves Other Investment Foreign to owners of to non- Called-up Capital Legal for own revenue Fair value Hedging revaluation exchange Retained the Petrol controlling (in EUR) capital surplus reserves shares Own shares reserves reserve reserve reserves differences earnings Group interest Total

As at 1 January 2009 52,240,977 80,991,385 61,903,494 2,604,670 (2,604,670) 122,584,025 (528,006) (5,211,970) 476,814 (385,690) 42,806,180 354,877,209 33,757,885 388,635,094

Dividend payments for 2008 (12,163,428) (12,163,428) (12,163,428)

Increase in non-controlling interest 0 3,066 3,066

Creation of legal reserves 71,356 (71,356) 0 0

Transactions with owners 0 0 71,356 0 0 (12,163,428) 0 0 0 0 (71,356) (12,163,428) 3,066 (12,160,362)

Net profit for the current year 10,425,564 10,425,564 (2,535,072) 7,890,492

Other changes in comprehensive income 473,189 (2,378,830) 105,952 (1,109,872) 0 (2,909,561) 84,450 (2,825,111)

Total changes in comprehensive income 0 0 0 0 0 0 473,189 (2,378,830) 105,952 (1,109,872) 10,425,564 7,516,003 (2,450,622) 5,065,381

As at 31 December 2009 52,240,977 80,991,385 61,974,850 2,604,670 (2,604,670) 110,420,597 (54,818) (7,590,800) 582,766 (1,495,562) 53,160,388 350,229,783 31,310,329 381,540,112

As at 1 January 2010 52,240,977 80,991,385 61,974,850 2,604,670 (2,604,670) 110,420,597 (54,818) (7,590,800) 582,766 (1,495,562) 53,160,388 350,229,783 31,310,329 381,540,112

Dividend payments for 2009 (12,163,428) (12,163,428) (12,163,428)

Transfer of net profit for 2009 2,137,232 (2,137,232) 0 0

Transfer of a portion of net profit for 2010 18,973,201 (18,973,201) 0 0

Increase in non-controlling interest (note 6.1) 0 1,027,374 1,027,374

Creation of legal reserves 13,911 (13,911) 0 0

Transactions with owners 0 0 13,911 0 0 8,947,005 0 0 0 0 (21,124,344) (12,163,428) 1,027,374 (11,136,054)

Net profit for the current year 32,904,210 32,904,210 2,555,649 35,459,859

Other changes in comprehensive income 54,818 1,587,117 (181,125) (2,308,206) (847,396) (435,347) (1,282,743)

Total changes in comprehensive income 0 0 0 0 0 0 54,818 1,587,117 (181,125) (2,308,206) 32,904,210 32,056,814 2,120,302 34,177,116

As at 31 December 2010 52,240,977 80,991,385 61,988,761 2,604,670 (2,604,670) 119,367,602 0 (6,003,684) 401,641 (3,803,768) 64,940,254 370,123,168 34,458,004 404,581,172

Accounting policies and notes are an integral part of these financial statements and should be read in conjunction with them. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 110 Annual Report Petrol 2010 111

Statement of changes in equity of Petrol d.d., Ljubljana

Revenue reserves Reserves Other Called-up Capital Legal re- for own Own sha- revenue Fair value Hedging Retained (in EUR) capital surplus serves shares res reserves reserve reserve earnings Total

As at 1 January 2009 52,240,977 80,991,385 61,749,884 2,604,670 (2,604,670) 113,008,754 97,224,229 (5,211,970) (8,524,570) 391,478,688

Dividend payments for 2008 (12,163,428) (12,163,428)

Transactions with owners 0 0 0 0 0 (12,163,428) 0 0 0 (12,163,428)

Net profit for the current year 10,661,802 10,661,802

Other changes in comprehensive income 5,860,308 (2,378,830) 3,481,478

Total changes in comprehensive income 0 0 0 0 0 0 5,860,308 (2,378,830) 10,661,802 14,143,280

As at 31 December 2009 52,240,977 80,991,385 61,749,884 2,604,670 (2,604,670) 100,845,326 103,084,537 (7,590,801) 2,137,232 393,458,540

As at 1 January 2010 52,240,977 80,991,385 61,749,884 2,604,670 (2,604,670) 100,845,326 103,084,537 (7,590,801) 2,137,232 393,458,540

Dividend payments for 2009 (12,163,428) (12,163,428)

Transfer of net profit for 2009 2,137,232 (2,137,232) 0

Transfer of a portion of net profit for 2010 18,973,201 (18,973,201) 0

Transactions with owners 0 0 0 0 0 8,947,005 0 0 (21,110,433) (12,163,428)

Net profit for the current year 37,946,402 37,946,402

Other changes in comprehensive income (1,227,513) 1,587,117 359,604

Total changes in comprehensive income 0 0 0 0 0 0 (1,227,513) 1,587,117 37,946,402 38,306,006

As at 31 December 2010 52,240,977 80,991,385 61,749,884 2,604,670 (2,604,670) 109,792,331 101,857,024 (6,003,684) 18,973,201 419,601,118

Accumulated profit for 2010 18,973,201 18,973,201

Accounting policies and notes are an integral part of these financial statements and should be read in conjunction with them. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 112 Annual Report Petrol 2010 113

Cash flow statement of the Petrol Group and Petrol d.d., Ljubljana

The Petrol Group Petrol d.d. The Petrol Group Petrol d.d. 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December (in EUR) notes 2010 2009 2010 2009 (in EUR) notes 2010 2009 2010 2009

Cash flows from operating activities Cash flows from investing activities

Net profit for the period 35.459.859 7.890.492 37.946.402 10.661.802 Payments for investments in subsidiaries 6.18 (3,971,685) 0 (3,789,120) (9,930,000)

Adjustments for: Receipts from investments in associates 6.20 250,000 0 250,000 0

Taxes 6.12 9,426,608 6,526,413 6,267,211 1,617,101 Payments for investments in associates 6.20 (3,405,397) (5,506,766) (3,405,397) (5,506,766)

Depreciation of property, plant and equipment 6.8 33,516,266 33,226,504 21,745,548 21,561,143 Receipts from intangible assets 6.15 31,561 48,129 0 0

Amortisation of intangible assets 6.8 931,595 871,176 681,852 622,910 Payments for intangible assets 6.15 (839,807) (1,299,474) (673,595) (1,082,128)

(Gain)/loss on disposal of property, plant and Receipts from property, plant and equipment 6.16 3,216,391 6,827,4 46 3,645,239 5,166,975 equipment 6.2, 6.8 (564,740) (1,234,110) (278,764) (975,153) Payments for property, plant and equipment 6.16 (58,284,705) (47,444,719) (38,531,342) (16,172,504) Other (revenue)/expenses arising from property, plant Payments for available-for-sale financial assets 6.21 0 (197,177) 0 (197,177) and equipment 6.8 4,305,741 539,633 2,543,286 539,633 Net (decrease in)/creation of allowance for operating Receipts from loans granted 6.22 15,612,979 56,421,664 12,448,470 14,402,815 receivables 6.8 657,364 13,753,875 3,908,362 2,995,940 Payments for loans granted 6.22 (28,826,716) (62,533,994) (13,148,771) (21,088,625)

Net write-down of operating receivables 6.8 372,490 (668,196) 205,939 (735,531) Interest received 6.11 6,405,175 7,84 8,728 5,308,869 6,054,064

Impairment/(reversal of impairment) of inventories 0 1,044 0 1,044 Dividends received from subsidiaries 6.10 0 0 5,617,065 5,587,468

Revenue from assets under management 6.35 (65,400) (65,400) (58,831) (52,262) Dividends received from jointly controlled entities 6.10 3,849,709 3,070,822 3,849,709 3,070,822

Net (decrease in)/creation of provisions for employee Dividends received from associates 6.10 3,919,500 5,387,387 3,919,500 5,387,387 benefits 6.31, 6.33 114,066 441,958 367,011 243,001 Dividends received from others 6.10 160,499 183,252 160,499 183,252 Net (decrease in)/creation of other provisions 6.32 (1,558,544) (955,144) (1,552,549) (1,214,185) Net cash from investing activities (61,882,496) (37,194,702) (24,348,874) (14,124,417) Net (decrease in)/creation of other liabilities 6.37 1,169,257 (3,697,584) 1,361,932 (3,376,096) Cash flows from financing activities Net decrease in/(creation of) other assets 6.28 (1,788,142) 1,995,523 (1,168,866) 1,989,688 Proceeds from bonds issued 6.34 (20,472) 50,092,122 (20,472) 50,092,122 Net merchandise shortages 6.24 3,427,369 3,391,862 2,065,992 2,511,570 Proceeds from borrowings 6.34 1,611,263,392 1,896,788,001 856,276,685 553,323,655 Net finance (income)/expense 6.11 13,958,965 15,290,783 8,239,313 14,358,803 Repayment of borrowings 6.34 (1,618,768,500) (1,974,967,399) (877,437,987) (568,410,667) Impairment of investments 6.11 3,612,275 2,265,288 3,768,694 27,877,594 Dividends paid to shareholders 6.30 (12,173,064) (12,171,882) (12,173,064) (12,171,882) Impairment of goodwill 6.15 0 4,724,483 0 0 Net cash from financing activities (19,698,644) (40,259,158) (33,354,838) 22,833,229 Share of profit of jointly controlled entities 6.10 (2,720,245) (2,481,255) 0 0 Increase/(decrease) in cash and cash equivalents 9,826,235 (6,170,269) 7,863,839 (2,511,896) Share of profit of associates 6.10 (3,062,800) 6,164,772 0 0 Changes in cash and cash equivalents Finance income from dividends received from subsidiaries 6.10 0 0 (5,617,065) (5,587,468) At the beginning of the period 7,789,488 13,961,546 6,909,640 9,421,536 Finance income from dividends received from jointly Translation differences (71,952) (1,789) 0 0 controlled entities 6.10 0 0 (3,849,709) (3,070,822) Increase/(decrease) 9,826,235 (6,170,269) 7,863,839 (2,511,896) Finance income from dividends received from At the end of the period 17,543,771 7,789,488 14,773,479 6,909,640 associates 6.10 0 0 (3,919,500) (5,387,387)

Change in inventories 6.24 (29,515,893) 2,964,105 (24,263,207) 3,473,713

Change in operating and other receivables 6.26 (57,950,209) 41,323,971 (53,937,484) 33,957,339

Change in assets at fair value through profit or loss 6.27 0 (700,472) 0 (709,136)

Change in operating and other liabilities 6.36 107,662,649 (16,824,489) 91,787,973 (72,710,540)

Change in liabilities for forward transactions 6.34 491,910 (7,525,045) 491,910 (7,525,045)

Change in liabilities arising from commodity swaps 6.34 764,648 (748,874) 764,648 (1,236,240)

Cash generated from operations 118,645,089 106,471,313 87,500,098 19,831,417

Interest paid 6.11 (22,416,939) (24,027,925) (19,067,218) (21,675,851)

Taxes paid 6.12 (4,820,775) (11,159,797) (2,865,329) (9,376,272)

Net cash from operating activities 91,407,375 71,283,591 65,567,551 (11,220,707) Accounting policies and notes are an integral part of these financial statements and should be read in conjunction with them. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 114 Annual Report Petrol 2010 115 Notes to the financial statements

1. Reporting entity (such as, associates of the controlling shareholder and entities Amendment to IAS 32 Financial Instruments: Presentation – • estimating the fair value of financial assets at fair value thro- Petrol d.d., Ljubljana (hereinafter the “Company”) is a company controlled, or jointly controlled, by key management personnel). Classifications of rights issues (effective from 1 February 2010) ugh profit or loss, domiciled in Slovenia. The address of the Company’s registered According to the amendment, the rights, options or purchase • estimating the fair value of derivative financial instruments, office is Dunajska cesta 50, 1527 Ljubljana. Below we present The Group/Company has not yet completed analysing the ef- warrants to acquire a fixed number of an entity’s own equity • estimating the net realisable value of inventories, consolidated financial statements of the Group for the year en- fect of this interpretation. instruments for a fixed price stated in any currency are equi- • estimating the collectible amount of receivables, ded 31 December 2010 and separate financial statements of the ty instruments, provided the entity offers the rights, options or • estimating the necessary amount of provisions, etc. company Petrol d.d., Ljubljana for the year ended 31 Decem- Amendment to IFRIC 14 IAS 19 – The Limit on a Defined purchase warrants pro rata to all of its existing owners of the sa- ber 2010. The consolidated financial statements comprise the Benefit Asset, Minimum Funding Requirements and their me class of its own non-derivative equity instruments. Because estimates are subject to subjective judgement and a Company and its subsidiaries and the Group’s interests in asso- Interaction (effective from 1 January 2011) certain degree of uncertainty, actual results might differ from ciates and jointly controlled entities (together referred to as the The amendment of IFRIC 14 addresses the accounting treatment Amendments to IAS 32 are not relevant to the Group/Company, the estimates. How the estimates are produced and the related “Group”). A more detailed overview of the Group's structure is for prepayments made when there is also a minimum funding since it has not issued any such financial instruments. assumptions and uncertainties are disclosed in the notes to the presented in chapter Group companies of the business report. requirement. Under the amendments, an entity is required to re- above items. cognise certain prepayments as an asset on the basis that the b. Basis of measurement entity has a future economic benefit from the prepayment in the The consolidated and separate financial statements have been Estimates are reviewed regularly. Changes in accounting esti- 2. Basis of preparation form of reduced cash outflows in future years in which minimum prepared on the historical cost basis except for the following as- mates are recognised in the period in which the estimates are a. Statement of compliance funding requirement payments would otherwise be required. sets and liabilities that are carried at fair value: changed if a change affects that period only. If a change affects The financial statements of Petrol d.d., Ljubljana and consolida- • derivative financial instruments, future periods, they are recognised in the period of the change ted financial statements of the Petrol Group have been prepared The amendments to IFRIC 14 is not relevant to the Group/Com- • financial assets at fair value through profit or loss, and in any future periods. in accordance with International Financial Reporting Standards pany as it does not have any pension plans with minimum fun- • available-for-sale financial assets, (IFRS) as adopted by the European Union. ding requirements. • investments in associates and jointly controlled entities (ap- e. Changes in accounting policies plies to the Company). The Company’s management approved the Company's finan- IFRIC 19 Extinguishing Financial Liabilities with Equity The Group/Company did not change its accounting policies in cial statements and the Group's consolidated financial state- Instruments (effective from 1 July 2010) c. Functional and presentation currency 2010. ments on 7 March 2011. The interpretation clarifies that equity instruments issued by These financial statements are presented in euros (EUR) wi- the Company to a creditor to extinguish all or part of a financial thout cents, the euro also being the Company’s functional cur- f. Prior period errors The following new standards and interpretations adopted by the liability are consideration paid in accordance with IAS 39.41. rency. Due to rounding, some immaterial differences may arise EU but not in force on 31 December 2010 have not been applied as concerns the sums presented in tables. The Group/Company corrects prior period errors retrospecti- in the preparation of the financial statements: The initial measurement of equity instruments issued to a cre- vely in the first financial statements authorised for issue after ditor to extinguish a financial liability is at the fair value of those d. Use of estimates and judgements their discovery. The Group/Company corrects errors: Revised IAS 24 Related Party Disclosure (effective from equity instruments, unless that fair value cannot be reliably me- Preparation of financial statements requires management to • by restating the comparative amounts for the prior period(s) 1 January 2011) asured, in which case the equity instrument should be measured make estimates, judgements and assumptions that affect the presented in which the error occurred; The amendment exempts government-related entity from the to reflect the fair value of the financial liability extinguished. The reported amounts of assets and liabilities, the disclosure of con- • if the error occurred before the earliest prior period presen- disclosure requirements in relation to related party transactions difference between the carrying amount of the financial liability tingent assets and liabilities on the date of financial statements, ted, by restating the opening balances of assets, liabilities and outstanding balances, including commitments, with (a) a (or part of the financial liability) extinguished and the considera- and the reported amounts of revenue and expenses in the re- and equity for the earliest prior period presented. government that has control, joint control or significant influence tion paid should be recognised in profit or loss. porting period. over the reporting entity; and (b) another entity that is a related The Group/Company did not identify prior period errors in 2010. party because the same government has control, joint control or The Group/Company did not issue equity instruments to extin- Estimates and assumptions are used in the following judge- significant influence over both the reporting entity and the other guish any financial liability during the current period. Therefore, ments: entity. The revised standard requires specific disclosures to be the interpretation has no impact on the comparative amounts in • estimating useful lives of depreciable assets, 3. Significant accounting policies provided if a reporting entity takes advantage of this exemption. the Group’s/Company's financial statements as at 31 December • asset impairment testing, of the Group 2010. Further, since the interpretation can relate only to transac- • estimating the fair value of investments in associates and jo- In these financial statements, the Group and group companies The revised standard also amends the definition of a related par- tions that will occur in the future, it is not possible to determine in intly controlled entities (applies to the Company only), have applied the accounting policies set out below consistently ty which resulted in new relations being included in the definition advance the effects the application of the interpretation will have. • estimating the fair value of available-for-sale financial assets, to all periods presented herein. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 116 Annual Report Petrol 2010 117

a. Basis of consolidation the Group are accounted for as if the acquisition had occurred b. Foreign currency translation intaining significant influence or joint control, the proportionate The consolidated financial statements comprise the financial at the beginning of the earliest comparative period presented Translation of transactions in foreign currencies share of the accumulated amount is reallocated to profit or loss. statements of the controlling company and of its subsidiaries. A or, if later, at the date that common control was established; for Transactions in foreign currencies are translated to the functi- subsidiary is an entity in which the controlling company holds a this purpose comparatives are revised. The assets and liabiliti- onal currency at the exchange rate at the dates of the transac- c. Financial instruments controlling equity interest or has a controlling influence on other es acquired are recognised at the carrying amounts recognised tions. Monetary assets and liabilities denominated in foreign Financial instruments consist of the following items: grounds. previously in the Group controlling company’s consolidated fi- currencies at the end of the reporting period are retranslated to • non-derivative financial assets, nancial statements. The components of equity of the acquired the functional currency at the exchange rate at that date. Foreign • non-derivative financial liabilities, Business combinations entities are added to the same components within Group equity exchange gains or losses are the difference between amortised • derivative financial instruments. Control is the power to govern the financial and operating poli- except that any share capital of the acquired entities is recogni- cost in the functional currency at the beginning of the period, ad- cies of an entity or a company so as to obtain benefits from its sed as part of share premium. Any cash paid for the acquisition justed for effective interest and payments during the period, and Impairment of financial assets is detailed in note j1. activities. The acquisition date is the date on which control is is recognised directly in equity. the amortised cost in foreign currency translated at the exchan- transferred to the acquirer. Judgement is applied in determining ge rate at the end of the reporting period. Non-monetary assets c.1 Non-derivative financial assets the acquisition date and determining whether control is trans- Loss of control and liabilities denominated in foreign currencies that are mea- The Group has the following non-derivative financial assets: ferred from one party to another. After loss of control the Group derecognises the assets and li- sured at fair value are retranslated to the functional currency at cash and cash equivalents, receivables and loans, and invest- abilities of the respective subsidiary, non-controlling interests the exchange rate at the date that the fair value was determined. ments. The accounting policies for investments in jointly con- The Group measures goodwill at the fair value of the consi- and other components of equity pertaining to the subsidiary. Non-monetary items denominated in foreign currencies and me- trolled entities and associates are presented in point a. deration transferred including the recognised amount of any Any surpluses or deficits on loss of control are recognised in asured at historical cost are translated to the functional currency non-controlling interest in the acquiree, less the net recogni- the income statement. If the Group maintains an interest in a using the exchange rate at the date of the transaction. Foreign The Group initially recognises bonds and deposits on the date sed amount (generally fair value) of the assets acquired and li- subsidiary, such interest is measured at fair value on the date exchange differences are recognised in the income statement. that they are originated. All other financial assets are recogni- abilities assumed, all measured as at the acquisition date. The the control is lost. Subsequently, the interest is accounted for in sed initially on the trade date or the date at which the Group be- consideration transferred includes the fair values of the assets equity as investment in associate (using the equity method) or Translation of group companies’ financial statements from comes a party to the contractual provisions of the instrument. transferred, liabilities incurred by the Group to the previous available-for-sale financial asset, depending on the level of con- the functional to the reporting currency The Group derecognises a financial asset when the contractual owners of the acquiree, and equity interests issued by the Gro- trol retained. The consolidated financial statements are presented in euros, rights to the cash flows from the asset expire or when it trans- up. The consideration transferred also includes the fair value of which is the controlling company’s local and reporting curren- fers the rights to receive the contractual cash flows on the finan- any contingent consideration and share-based payment awards Investments in associates and jointly controlled entities cy. Line items of each group company that are included in the fi- cial asset in a transaction in which substantially all the risks and of the acquiree that are replaced mandatorily in the business Associates are those entities in which the Group has significant nancial statements are measured in the currency of the primary rewards of ownership of the financial asset are transferred. combination. If a business combination results in the termina- influence, but not control, over their financial and operating po- economic environment in which such a company operates and tion of pre-existing relationships between the Group and the licies. Jointly controlled entities are those entities over whose are translated, for consolidation purposes, to the reporting cur- Upon initial recognition, non-derivative financial instruments of acquiree, then the termination amount (as contained in the activities the Group has joint control, established by contractual rency as follows: the Group are classified into one the following groups: financial agreement) and the value of the off-market element is deducted agreement and requiring unanimous consent for financial and • assets and liabilities from each statement of financial positi- assets at fair value through profit or loss, held-to-maturity finan- from the consideration and recognised in other expenses. operating decisions. on presented are translated at the ECB exchange rate at the cial assets, loans and receivables, and available-for sale financi- reporting date; al assets. Their classification depends on the purpose for which A contingent liability of the acquiree is assumed in a business com- Investments in associates and jointly controlled entities are acco- • revenue and expenses of foreign operations are converted an instrument was acquired. bination only if such a liability represents a present obligation and unted for using the equity method. The consolidated financial sta- to euros at exchange rates on the conversion date. arises from a past event, and its fair value can be measured relia- tements include the Group’s share of the profit and loss of equity • Foreign exchange differences are recognised in other com- Available-for-sale financial assets bly. The Group measures any non-controlling interest at its propor- accounted jointly controlled entities, after adjustments to align the prehensive income and disclosed in the translation reserve Available-for-sale financial assets are non-derivative financial tionate interest in the identifiable net assets of the acquiree. accounting policies, from the date that significant influence com- under equity. assets that are designated as available-for-sale or that are not mences until the date that significant influence ceases. When the classified as loans and receivables or as financial assets at fair Subsidiaries Group’s share of losses of an associate or a jointly controlled entity Foreign exchange differences arising from the translation of in- value through profit or loss. Subsidiaries are entities controlled by the Group. Control exists exceeds its interest in such an entity, the carrying amount of that vestments in subsidiaries abroad are reported in comprehensive when the Group has the power to govern the financial and ope- interest (including any long-term investments) is reduced to nil, income. In the case of non-wholly-owned subsidiaries abroad, They are measured at fair value provided that it can be determi- rating policies of an entity so as to obtain benefits from its acti- and the recognition of further losses is discontinued except to the the proportionate share of translation difference is transferred to ned and that the resulting gains or losses are recognised direc- vities. The financial statements of subsidiaries are included in extent that the Group has an obligation or has made payments on non-controlling interest. tly in comprehensive income or equity, except for impairment the consolidated financial statements from the date that control behalf of the associate or the jointly controlled entity. losses and foreign exchange gains or losses, until such assets commences until the date that control ceases. The accounting When a foreign subsidiary is disposed, resulting in the loss of are derecognised. When an available-for-sale financial asset is policies of subsidaries were changed and brought into line with Transactions eliminated on consolidation control, significant influence or joint control, the relevant amo- derecognised, the cumulative gain or loss in other comprehen- the Group's policies. Losses relating to non-controlling interests Intra-group balances and any gains and losses arising from unt accumulated in translation reserve is classified to operating sive income for the period is transferred to profit or loss. in a subsidiary are allocated to the non-controlling interest item intra-group transactions are eliminated in preparing the con- profit or loss as gain or loss on disposal. If the Group disposes even if this leads to a negative balance of this item. solidated financial statements. Unrealised gains arising from only a part of its interest in a subsidiary abroad that includes a If their fair value cannot be measured reliably because the range transactions with associates (accounted for using the equity foreign operation, but maintains control, the proportionate sha- of reasonable fair value estimates is significant and the proba- Acquisitions from entities under common control method) are eliminated to the extent of the Group’s interest in re of the accumulated amount is re-attributed to non-controlling bilities of the various estimates cannot be reasonably assessed, Business combinations arising from transfers of interests in en- the entity. Unrealised losses are eliminated using the same me- interest. In the case of partial disposal of an interest in an asso- the Company measures the financial asset at cost. If a financial tities that are under the control of the shareholder that controls thod, provided there is no evidence of impairment. ciate or joint venture that includes a foreign operation, while ma- asset is carried at cost, that fact is disclosed. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 118 Annual Report Petrol 2010 119

Financial assets at fair value through profit or loss loss as incurred. Subsequent to initial recognition, derivatives Interest rate swaps and collars assets. Borrowing costs directly attributable to the acquisition A financial asset is classified at fair value through profit or loss are measured at fair value, and changes therein are accounted Interest rates on loans received are exposed to a risk of interest or production of a qualifying asset are recognised as part of the if it is held for trading or is designated as such upon initial re- for as described below. rate fluctuations which is hedged against using interest rate cost of that asset. Intangible assets are subsequently measured cognition. Financial assets are designated at fair value through swaps and collars. The fair value of interest rate swaps and col- using the cost model. In addition to goodwill and rights arising profit or loss if the Group is able to manage such financial assets • When a derivative is designated as the hedging instrument in a lars on the statement of financial position date is determined by from concessions for the construction of gas networks and dis- and make purchase and sale decisions based on their fair value. hedge of the variability in cash flows attributable to a particu- discounting future cash flows arising as a result of a variable in- tribution of natural gas, which are described below, the Group’s Upon initial recognition, attributable transaction costs are reco- lar risk associated with a recognised asset or liability or a high- terest rate (interest proceeds from a swap) and a fixed interest intangible assets comprise mostly software. Other than good- gnised in profit or loss as incurred. Financial assets at fair value ly probable forecast transaction that could affect profit or loss, rate (payment of interest on a swap). will, the Group does not have intangible assets with unidentifi- through profit or loss are measured at fair value, and changes the effective portion of changes in the fair value of the deriva- able useful lives. therein are recognised in profit or loss. tive is recognised in comprehensive income for the period and When an interest rate swap is designated as the hedging instru- presented in the hedging reserve. Any ineffective portion of ment in a hedge of the variability in cash flows attributable to a Goodwill The Group’s financial assets measured at fair value through pro- changes in the fair value of the derivative is recognised direct- recognised asset or liability or a forecast transaction, the effec- The Group’s goodwill is the result of business combinations. For fit or loss mainly consist of unrealised derivative financial instru- ly in profit or loss. If the hedging instrument no longer meets tive portion of the gain or loss on the instrument is recognised the measurement of goodwill upon initial recognition, see point a. ments assessed on the reporting date. the criteria for hedge accounting or the hedging instrument is directly in comprehensive income. The ineffective portion of the sold, terminated or exercised, then the Group is to discontinue gain or loss on the instrument is recognised in profit or loss. Goodwill is measured at cost less any accumulated impairment Loans and receivables hedge accounting. The cumulative gain or loss recognised in losses. In respect of equity accounted investments, the carrying Loans and receivables are non-derivative financial assets with fixed other comprehensive income remains presented in the hedg- d. Equity amount of goodwill is included in the carrying amount of the in- or determinable payments that are not quoted in an active market. ing reserve as long as the forecast transaction does not affect Share capital vestment, and the impairment loss on such an investment is not Depending on their maturity, they are classified as current financial profit or loss. If the forecast transaction is no longer expected The called-up capital of the controlling company Petrol d.d., Lju- allocated to any asset, including goodwill, that forms part of the assets (maturity of up to 12 months from the date of the statement to occur, then the balance in other comprehensive income is bljana takes the form of share capital, the amount of which is carrying amount of the equity accounted investment. of financial position) or long-term financial assets (maturity of more recognised immediately in profit or loss. In other cases, the defined in the Company’s articles of association, has been regi- than 12 months from the date of the statement of financial posi- amount recognised in other comprehensive income is trans- stered with the Court and is paid up by owners. Dividends on or- Concessions for the construction of gas networks and tion). In the statement of financial position, loans and receivables ferred to profit or loss in the same period in which the hedged dinary shares are recognised as a liability in the period in which distribution of natural gas are carried as operating and other receivables and measured at item affects profit or loss. they were approved by the General Meeting. The Group recognises an intangible long-term asset arising from a amortised cost using the effective interest rate method. • The effects of other derivatives not designated as the hedging service concession arrangement when it has a right to charge for instrument in a hedge of the variability in cash flows or not at- Capital surplus usage of the concession infrastructure. An intangible long-term Cash and cash equivalents tributable to a particular risk associated with a recognised as- General equity revaluation adjustments as at 31 December 2003 asset received as consideration for providing construction or up- Cash and cash equivalents comprise cash balances, bank deposits set or liability are recognised in profit or loss. comprised the revaluation of share capital made before the year grade services in a service concession arrangement is measured with maturities of three months or less, and other current and highly 2002, in accordance with the then applicable Slovene Accounting at fair value upon initial recognition. Subsequent to initial recogni- liquid investments with original maturities of three months or less. The Group has the following derivative financial instruments: Standards. Because of the transition to International Financial tion, the intangible long-term asset is measured at cost less accu- Reporting Standards, the revaluation adjustment was transferred mulated amortisation and any accumulated impairment losses. c.2 Non-derivative financial liabilities Forward contracts to capital surplus. It can only be used to increase share capital. The Group initially recognises debt securities issued on the date The Group purchases petroleum products in US dollars, but sells Subsequent expenditure that they are originated. All other financial liabilities are recognised them primarily in euros. Because purchases and sales are made Legal and other reserves Subsequent expenditure relating to intangible assets is recog- initially on the trade date at which the Group becomes a party to the in different currencies, mismatches occur between purchase and Legal and other reserves comprise shares of profit from previo- nised in the carrying amount of the item if it is probable that the contractual provisions of the instrument. The Group derecognises selling prices that are hedged against using forward contracts. us years that have been retained for a dedicated purpose, ma- future economic benefits embodied within the part of this asset a financial liability when its contractual obligations are discharged inly for offsetting eventual future losses. When created, they are will flow to the Group and the cost can be measured reliably. All or cancelled or expire. The fair value of forward contracts on the statement of financial po- recognised by the body responsible for the preparation of the other expenditure is recognised in profit or loss as expenses as sition date is determined by means of publicly available information annual report or by a resolution of this body. soon as they are incurred. The Group has the following non-derivative financial liabilities: about the value of forward contracts in a regulated market on the loans, bonds issued and trade payables. Such financial liabilities reporting date for all outstanding contracts. Gains and losses are Reserves for own shares Amortisation are recognised initially at fair value plus any directly attributable recognised in profit or loss. If the parent company or its subsidiaries acquire an ownership Amortisation is calculated on a straight-line basis, taking into transaction costs. Subsequent to initial recognition, these finan- interest in the parent company, the amount paid, including tran- account the useful life of intangible fixed assets. This method cial liabilities are measured at amortised cost using the effective Commodity swaps saction costs less tax, is deducted from total equity in the form reflects the expected pattern of consumption of the asset. Amor- interest method. Depending on their maturity, they are classifi- When petroleum products and electricity are purchased or sold, of own shares until such shares are cancelled, reissued or sold. tisation begins when an asset is available for use. ed as short-term financial liabilities (maturity of up to 12 months mismatches occur between purchase and selling prices that are If own shares are later sold or reissued, the consideration recei­ from the date of the statement of financial position) or long-term hedged against using commodity swaps. ved is included in capital surplus net of transaction costs and re- The estimated useful lives for the current and comparative peri- financial liabilities (maturity of more than 12 months from the da- lated tax effects. ods are as follows: te of the statement of financial position). The fair value of commodity swaps on the statement of financial position date is determined using publicly available information e. Intangible assets (in%) 2010 2009 c.3 Derivative financial instruments about the value of commodity swaps as at the statement of fi- Intangible assets are carried at cost less accumulated amorti- Concessions 3.45-20.00% 3.45-20.00% Derivative financial instruments are recognised initially at fair nancial positiondate, issued by relevant institutions. Gains and sation and accumulated impairment losses. Cost includes ex- Computer software 10.00-25.00% 20.00-25.00% value. Attributable transaction costs are recognised in profit or losses are recognised in profit or loss. penditure that is directly attributable to the acquisition of the WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 120 Annual Report Petrol 2010 121

Amortisation methods, useful lives and residual values are revi- erty, plant and equipment. This method reflects the expected long-term financial receivables (acting as a lessor) are not reco- j. Impairment ewed at each financial year-end and adjusted if appropriate. pattern of consumption of the asset. Leased assets are depreci- gnised in the Group’s statement of financial position. j.1 Financial assets ated by taking into account the lease term and their useful lives. A financial asset is impaired if objective evidence indicates that Impairment of assets is explained in more detailed in point j2. Land is not depreciated. Depreciation begins when an asset is Finance lease one or more loss events have occurred that had a negative effect available for use. Construction work in progress is not depreciated. • The Group as a lessor on the estimated future cash flows of that asset that can be esti- f. Property, plant and equipment Amounts due from lessees in a finance lease are treated as mated reliably. Items of property, plant and equipment are measured at cost less The estimated useful lives for the current and comparative periods receivables and amount to the value of the investment le- accumulated depreciation and accumulated impairment losses, are as as presented in the table above. ased out. Finance lease income is allocated to accounting Objective evidence that financial assets are impaired can inclu- with the exception of land, which is measured at cost less any im- periods so as to reflect a constant periodic rate of return on de default or delinquency by a debtor, restructuring of an amo- pairment. Cost includes expenditure that is directly attributable Residual values and useful lives of an asset are reviewed annually the leased out net investment that has not yet been reali- unt due to the Group for which the Group granted its approval, to the acquisition of the assets. Parts of an item of property, plant and adjusted if appropriate. If the carrying amount of an asset is sed. indications that a debtor will enter bankruptcy, and the disappe- and equipment having different useful lives are accounted for as greater than its estimated recoverable amount, the asset’s carrying arance of an active market for an instrument. In addition, for an separate items of property, plant and equipment. Borrowing costs amount is immediately written down to its recoverable amount and • The Group as a lessee investment in an equity security, a significant (more than 20%) directly attributable to the acquisition, construction or production recognised in profit or loss. Impairment of assets is explained in Assets acquired under a finance lease are carried at the or prolonged (longer than 9 months) decline in its fair value be- of a qualifying asset are recognised as part of the cost of that as- more detailed in point j2. lower of fair value or minimum payments to the end of the le- low its cost is objective evidence of impairment. set. Items of property, plant and equipment are subsequently me- ase less accumulated depreciation and impairment losses. asured using the cost model. Gains and losses on disposal or elimination are determined by com- Finance lease expenses are recognised using the effective Impairment of receivables and loans granted paring the proceeds from disposal with the carrying amount. Gains interest rate method. The Group considers evidence of impairment for receivables Subsequent expenditure and losses on disposal are recognised in the income statement. individually or collectively. All significant receivables are asses- Expenditure related to the replacement of a part of an item of prop- Available-for-sale items of property, plant and equipment are pre- Operating lease sed individually for specific impairment. If it is assessed that the erty, plant and equipment is recognised in the carrying amount sented separately from other assets and are not depreciated in the In the income statement, rental income earned under an opera- carrying amount of receivables exceeds their fair value, i.e. the of the item if it is probable that the future economic benefits em- year of the disposal. ting lease is recognised either as cost (leased assets) or income collectible amount, the receivables are impaired. Receivables for bodied within the part will flow to the Group and its cost can be (leased out assets) on a straight-line basis. which it is assumed they will not be settled by the original date of measured reliably. All other expenditure (e.g. day-to-day servicing) Environmental fixed assets payment or up to their full amount are deemed doubtful; should is recognised in profit or loss as expenses as soon as they are in- Environmental fixed assets acquired under a scheme for the crea- i. Inventories court proceedings be initiated, they are deemed disputed. curred. tion and use of revenue deferred for the purpose of environmental Inventories of merchandise and materials are measured at the rehabilitation are carried and presented separately. More informati- lower of historical cost and net realisable value. The historical Receivables that are not individually significant are collectively Depreciation on about environmental fixed assets is available in point l. cost of inventories comprises the cost, which is made up of the assessed for impairment by grouping together receivables with Depreciation is calculated on a straight-line basis, taking into ac- purchase price, import duties and direct costs of purchase. similar risk characteristics. Receivables are grouped together by count the useful life of each part (component) of an item of prop- g. Investment property Any discounts are subtracted from the purchase price. Direct age. In assessing collective impairment, the Group uses histori- Investment property is property held by the Group either to costs of purchase include transportation costs, costs of loading, cal trends of the probability of default, timing of recoveries and (IN%) 2010 2009 earn rental income or for capital appreciation or for both. transhipment and unloading, transport insurance costs, goods the amount of loss incurred, adjusted for management’s judge- Buildings: tracking costs, costs of agency arrangements and other similar ment as to whether current economic and credit conditions are Buildings at service stations 2.50-10.00% 2.50-10.00% Investment property is measured using the cost model. Sub- costs incurred before initial storage and borne by the purchaser, such that the actual losses are likely to be greater or less than Above-ground and underground 2.85-50.00% 2.85-50.00% sequent to its recognition, the asset is recognised at cost less and non-refundable duties. Discounts on purchase prices inclu- suggested by historical trends. reservoirs accumulated depreciation and accumulated impairment losses. de discounts indicated on invoices and subsequently obtained Underground service paths at 5.00-14.30% 5.00-14.30% Depreciation method and rates are the same as for items of pro- discounts relating to a specific purchase. The Group evaluates evidence about the impairment of loans in- service stations perty, plant and equipment. Impairment of assets is explained dividually for each significant loan. Other buildings 1.43-50.00% 1.43-50.00% in more detailed in point j2. The cost formula is based on the first-in first-out principle (FI- Equipment: FO). The FIFO method assumes that the items of inventories An impairment loss in respect of a financial asset measured at Equipment – mechanical and elec- Subsequent expenditure that are purchased or produced first are also the first to be sold. amortised cost is calculated as the difference between its car- tronic equipment for maintenance 10.00-25.00% 10.00-25.00% Subsequent expenditure relating to investment property is re- Accordingly, the use of inventories is calculated using the initial rying amount and the estimated future cash flows discounted at of other equipment cognised in the carrying amount of the item if it is probable that actual cost, while the final inventories are determined using the the original effective interest rate. Losses are recognised in profit Gas stations equipment 3.33-20.00% 3.33-20.00% the future economic benefits embodied within the part of this final actual cost. or loss. When a subsequent event causes the amount of impair- Pumping equipment at service asset will flow to the Group and the cost can be measured relia- ment loss to decrease, the decrease in impairment loss is rever- 5.00-25.00% 5.00-25.00% stations bly. All other expenditure is recognised in profit or loss as expen- Net realisable value is the estimated selling price in the ordinary sed through profit or loss. Motor vehicles 10.00-25.00% 10.00-25.00% ses as soon as they are incurred. course of business, less the estimated costs of completion and Freight cars – rail tankers 25.00% 25.00% selling expenses. The realisable value of inventories is assessed Impairment of available-for-sale financial assets

Computer hardware 15.00-25.00% 15.00-25.00% h. Leased assets at least once a year based on their balances as at the date of the Impairment losses on available-for-sale financial assets are reco- A lease is classified as a finance lease when under the terms of annual financial statements of the Group. The inventories that gnised by transferring any cumulative loss that has been previ- Office equipment – furniture 6.70-12.50% 6.70-12.50% the lease substantially all the risks and rewards of ownership are have not changed for more than a year are written off. Dama- ously recognised in other comprehensive income for the period Small tools: 33.33% 33.33% transferred to the lessee. Other leases are treated as operating ged, expired and unusable inventories are written off regularly and presented in the fair value reserve to profit or loss. Any sub- Environmental fixed assets: 5.00-25.00% 5.00-25.00% leases, in which case the leased assets (acting as a lessee) or during the year on an item by item basis. sequent increase in the fair value of an impaired available-for-sa- WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 122 Annual Report Petrol 2010 123

le equity security is recognised in other comprehensive income estimated reliably, and it is probable that an outflow of econo- Long-term deferred revenue from environmental fixed cial assets at fair value through profit or loss, impairment losses for the period or in fair value reserve. mic benefits will be required to settle the obligation. assets recognised on financial assets, and losses on hedging instru- Long-term deferred revenue from environmental fixed assets ments that are recognised in the income statement. Borrowing j.2 Non-financial assets The most significant provisions include: comprises deferred revenue from funds granted for the enviro- costs are recognised in the income statement using the effecti- The Group reviews at each reporting date the carrying amounts nmental rehabilitation of service stations, road tankers, storage ve interest method. of significant non-financial assets to determine whether there is Provisions for employee benefits facilities and the clean-up of the bitumen dump at Pesniški Dvor. any indication of impairment. If any such indication exists, then Pursuant to the law, the collective agreement and the internal Environmental assets, presented as part of the Group’s pro- o. Taxes the asset’s recoverable amount is estimated. For goodwill, im- rules, the Group is obligated to pay its employees jubilee be- perty, plant and equipment items, were approved by means of Taxes comprise current tax and deferred tax liabilities. Income pairment loss is estimated at each reporting date. nefits and termination benefits on retirement, for which it has a decision of the Ministry of the Environment and Spatial Plan- tax is recognised in the income statement except to the extent established long-term provisions. Other obligations related to ning as part of the ownership transformation of the company that it relates to business combinations or items recognised di- The recoverable amount of an asset or cash-generating unit is employee post-employment benefits do not exist. Petrol d.d., Ljubljana and were recognised as such in the ope- rectly in other comprehensive income. the greater of its value in use and its fair value less costs to sell. ning financial statements of Petrol d.d., Ljubljana as at 1 january In assessing the asset’s value in use, the estimated future cash Provisions amount to estimated future payments for terminati- 1993 that were prepared in accordance with the regulations go- Current tax liabilities are based on the taxable profit for the year. flows are discounted to their present value using a pre-tax disco- on benefits on retirement and jubilee benefits discounted to the verning the ownership transformation of companies. Deferred Taxable profit differs from the net profit reported in the income unt rate that reflects current market assessments of the time va- end of the reporting period. The calculation is made separately revenue is restated under revenue in proportion to the depreci- statement as it excludes revenue and expense items taxable or lue of money and the risks specific to the asset. For the purpose for each employee by taking into account the costs of termination ation of environmental fixed assets and the funds used for the deductible in other years and other items that are never subject of impairment testing, assets that cannot be tested individually benefits on retirement and the costs of all expected jubilee bene- clean-up of the bitumen dump at Pesniški Dvor. to taxation or deduction. The Group's current tax liabilities are are grouped together into the smallest group of assets that gene- fits until retirement. The calculation using the projected unit credit calculated using the tax rates effective on the reporting date. rates cash inflows from continuing use that are largely indepen- method is performed by a certified actuary. Termination benefits A portion of deferred revenue payable in the period under 12 dent of the cash inflows of other assets or groups of assets (the on retirement and jubilee benefits are charged against the provisi- months is restated under short-term deferred revenue. Deferred tax is accounted for in its entirety using the statement of “cash-generating unit”). ons created. financial position liability method for temporary differences bet- m. Recognition of revenue ween the tax base of assets and liabilities and their carrying amo- The impairment of an asset or a cash generating unit is recogni- Provisions for employee benefits in relation to third-party Sales revenue is recognised at the fair value of the consideration unts in separate financial statements. Deferred tax is determined sed if its carrying amount exceeds its recoverable amount. Impa- managed service stations received or receivable, net of returns and discounts, trade dis- using the tax rates (and laws) that were effective on the statement irment is recognised in the income statement. Impairment losses The business cooperation contracts concluded by the Company counts and volume rebates. Revenue is recognised when the si- of financial position date and are expected to apply when a defer- recognised in respect of a cash generating unit are allocated first with the third-party managed service stations stipulate that the gnificant risks and rewards of ownership have been transferred red tax asset is realised or a deferred tax liability is settled. to reduce the carrying amount of any goodwill allocated to the rights of employees of the third-party managed service stations to to the buyer, there is certainty about the recovery of receivables, unit, and then to reduce the carrying amounts of the other assets jubilee benefits and termination benefits on retirement are equal the associated costs and possible return of goods, and there is A deferred tax asset is recognised to the extent that it is proba- in the unit (group of units) on a pro rata basis. as the rights of employees of the Company. The contractual obli- no continuing involvement by the Group with the goods sold. ble that future taxable profits will be available against which they gation of the Company to reimburse the costs arising from such can be utilised in the future. An impairment loss in respect of goodwill is not reversed. In rights to employees at third-party managed service stations repre- Revenue is recognised as follows: respect of other assets, impairment losses recognised in pri- sents the basis for recognition of long-term provisions. Provisions p. Determination of fair value or periods are assessed at the end of the reporting period for amount to estimated future payments for termination benefits on Sale of goods A number of the Group’s accounting policies require the deter- any indications that the loss has decreased or no longer exists. retirement and jubilee benefits discounted to the end of the report- A sale of goods is recognised when the Group delivers goods to mination of fair value, for both financial and non-financial assets An impairment loss is reversed if there has been a change in ing period. The obligation is calculated separately for each em- a customer, the customer accepts the goods, and the collecta- and liabilities. the estimates used to determine the recoverable amount. An ployee of the third-party managed service stations by estimating bility of the related receivables is reasonably assured. impairment loss is reversed to the extent that the asset’s inc- the costs of termination benefits on retirement and the costs of all Fair value is the amount for which an asset could be sold or a li- reased carrying amount does not exceed the carrying amount expected jubilee benefits until retirement. The calculation using the Sale of services ability exchanged between knowledgeable, willing parties in an that would have been determined net of depreciation or amor- projected unit credit method is performed by a certified actuary. A sale of services is recognised in the accounting period in which arm's length transaction. tisation if no impairment loss had been recognised in previous Reimbursed costs arising from termination benefits on retirement the services are rendered, by reference to the stage of completi- years. and jubilee benefits are charged against the provisions created. on of the transaction assessed on the basis of the actual service The Group determines the fair value of financial instruments by provided as a proportion of total services to be provided. taking into account the following fair value hierarchy: Goodwill that forms part of the carrying amount of an equity ac- l. Long-term deferred revenue • Level 1 comprises quoted prices in active markets for identi- counted investment in an associate or jointly controlled entity is Long-term deferred revenue from gas network connection fees n. Finance income and expenses cal assets or liabilities; not recognised separately and therefore is not tested for impair- When connected to the gas network, the users pay a fixed fee, en- Finance income comprises interest income on financial assets, • Level 2 comprises values other than quoted prices included ment separately. Instead, the entire amount of the investment in titling them to be connected to the established network. Since the gains on the disposal of available-for-sale financial assets, chan- within Level 1 that are observable either directly (as prices an associate is tested for impairment as a single asset when the- benefits from the service rendered are expected throughout the ges in the fair value of financial assets at fair value through profit in less active markets) or indirectly (e.g. values derived from re is objective evidence that the investment in an associate may period of gas supply to the user, the revenue from the connection or loss, foreign exchange gains and gains on hedging instruments quoted prices in an active market); be impaired. fee is deferred in proportion to the estimated period during which that are recognised in the income statement. Interest income is • Level 3 comprises inputs for assets or liabilities that are not the benefits will flow to Petrol. The Group estimates that the pe- recognised as it accrues using the effective interest method. based on market data. k. Provisions riod during which the benefits will flow to it equals the term of con- Provision are recognised if, as a result of a past event, the Gro- cession for the gas network. This term ranges between 20 and 35 Finance expenses comprise borrowing costs (unless capitali- The Group uses quoted prices as the basis for the fair value of up has a present legal or constructive obligation that can be years, depending on a specific concession agreement. sed), foreign exchange losses, changes in the fair value of finan- financial instruments. If a financial instrument is not quoted on WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 124 Annual Report Petrol 2010 125

a regulated market and the market is considered as inactive, the Non-derivative financial liabilities 4. Significant accounting investments. The accounting policies for investments in jointly Group uses inputs of Levels 2 and 3 for determining the fair va- Fair value is calculated, for reporting purposes, based on the pre- policies of the Company controlled entities and associates that are measured as availa- lue of a financial instrument. Where applicable, further informa- sent value of future principal and interest cash flows, discounted The Company has applied the accounting policies set out below ble-for-sale financial assets are presented in point c. tion about the assumptions made when determining fair values at the market rate of interest at the end of the reporting period. consistently to all periods presented herein. is disclosed in the notes specific to that asset or liability of the The Company initially recognises bonds and deposits on the Group. Derivative financial instruments a. Foreign currency translation date that they are originated. All other financial assets are re- • The fair value of forward contracts equals their listed mar- Transactions in foreign currencies are translated to the functi- cognised initially on the trade date or the date at which the The methods of determining the fair values of individual groups ket price at the reporting date. onal currency at the exchange rate at the dates of the transac- Company becomes a party to the contractual provisions of the of assets for measurement and/or reporting purposes are de- • The fair value of interest rate swaps at the reporting date is tions. Monetary assets and liabilities denominated in foreign instrument. The Company derecognises a financial asset when scribed below. assessed by discounting future cash flows from the variable currencies at the end of the reporting period are retranslated the contractual rights to the cash flows from the asset expire or interest rate (interest received from a swap) and the fixed to the functional currency at the exchange rate at that date. when it transfers the rights to receive the contractual cash flows Intangible assets interest rate (interest paid under a swap). Foreign exchange gains or losses are the difference between on the financial asset in a transaction in which substantially all The fair value of intangible assets is based on the discounted • The fair value of commodity swaps equals their listed mar- amortised cost in the functional currency at the beginning of the the risks and rewards of ownership of the financial asset are cash flows expected to be derived from the use and eventual sa- ket price at the reporting date. period, adjusted for effective interest and payments during the transferred. le of the assets. period, and the amortised cost in foreign currency translated at q. Earnings per share the exchange rate at the end of the reporting period. Non-mo- Upon initial recognition, non-derivative financial instruments of Property, plant and equipment The Group presents basic and diluted earnings per share for its or- netary assets and liabilities denominated in foreign currencies the Company are classified into one the following groups: finan- The fair value of property, plant and equipment recognised as dinary shares. Basic earnings per share are calculated by dividing that are measured at fair value are retranslated to the functio- cial assets at fair value through profit or loss, held-to-maturity a result of business combinations is the same as their market the profit or loss attributable to ordinary shareholders by the wei- nal currency at the exchange rate at the date that the fair value financial assets, loans and receivables, and available-for sale fi- value. The market value of property is the estimated amount ghted average number of ordinary shares during the period. Dilu- was determined. Non-monetary items denominated in foreign nancial assets. Their classification depends on the purpose for for which a property could be sold on the date of valuation and ted earnings per share are calculated by adjusting the profit or loss currencies and measured at historical cost are translated to the which an instrument was acquired. after proper marketing. The market value of equipment is ba- attributable to ordinary shareholders and the weighted average functional currency using the exchange rate at the date of the sed on the approach using quoted market prices for similar number of ordinary shares during the period for the effects of all transaction. Foreign exchange differences are recognised in the Available-for-sale financial assets items. potential ordinary shares, which comprise convertible bonds and income statement. Available-for-sale financial assets are non-derivative financi- share options granted to employees. Because the Group has no al assets that are designated as available-for-sale or that are Investment property convertible bonds or share options granted to employees, its basic b. Investments in subsidiaries not classified as loans and receivables or as financial assets The value of investment property is assessed by considering earnings per share are the same as its diluted earnings per share. In the Company’s financial statements, investments in subsidia- at fair value through profit or loss. The Company measures in- the aggregate of the estimated cash flows expected to be re- ries have been accounted for at cost. The Company recognises vestments in associates and jointly controlled entities as availa- ceived from renting out the property. A yield that reflects the r. Operating segments income from an investment only to the extent that they originate ble-for-sale financial assets. specific risks is included in the property valuation based on dis- An operating segment is a component of the Group that en- from a distribution of accumulated profits of the investee arising counted net annual cash flows. gages in business activities from which it earns revenues and after the date of acquisition. They are measured at fair value provided that it can be deter- incurs expenses that relate to transactions with any of the mined and that the resulting gains or losses are recognised Inventories Group’s other components. The operating results of operating c. Investments in associates and jointly directly in comprehensive income or equity, except for impa- The fair value of inventories acquired in business combinations segments are reviewed regularly by the executive officers of the controlled entities irment losses and foreign exchange gains or losses, until such is determined based on their expected selling price in the ordi- Group to make decisions about resources to be allocated to a In accordance with IAS 39, the Company accounts for investments assets are derecognised. When an available-for-sale financi- nary course of business less the estimated costs of sale. segment and assess the performance of the Group. in associates and jointly controlled entities as available-for-sale fi- al asset is derecognised, the cumulative gain or loss in other nancial assets. They are measured at fair value and the resulting comprehensive income for the period is transferred to profit or Financial assets at fair value through profit or loss and In the preparation and presentation of the financial statements, gains or losses are recognised directly in other comprehensive loss. available-for-sale financial assets the Group uses the following segments: income, except for impairment losses. When an investment is de- The fair value of financial assets at fair value through profit or • oil and merchandise sales, recognised, the cumulative gain or loss in other comprehensive in- If their fair value cannot be measured reliably because the range loss and available-for-sale financial assets is determined by refe- • energy activities. come for the period is transferred to profit or loss. of reasonable fair value estimates is significant and the proba- rence to the above fair value hierarchy for financial instruments. bilities of the various estimates cannot be reasonably assessed, If their fair value cannot be measured reliably because the range s. Cash flow statement d. Financial instruments the Company measures the financial asset at cost. If a financial of reasonable fair value estimates is significant and the proba- The section of the cash flow statement referring to operating Financial instruments consist of the following items: asset is carried at cost, that fact is disclosed. bilities of the various estimates cannot be reasonably assessed, activities has been prepared using the indirect method based • non-derivative financial assets, the Company measures the financial asset at cost. on data derived from the statement of financial position as at 31 • non-derivative financial liabilities, Financial assets at fair value through profit or loss December 2009 and 31 December 2010 and data derived from • derivative financial instruments. A financial asset is classified at fair value through profit or loss if Receivables and loans granted the income statement for 2010. The section referring to inve- it is held for trading or is designated as such upon initial recogni- The fair value of receivables and loans is calculated as the pre- sting and financing activities has been prepared using the direct Impairment of financial assets is detailed in note k2. tion. Financial assets are designated at fair value through profit sent value of future cash flows, discounted at the market rate of method. Default interest paid and received in connection with or loss if the Company is able to manage such assets and make interest at the end of the reporting period. The estimate takes operating receivables is allocated to cash flows from operating d.1 Non-derivative financial assets purchase and sale decisions based on their fair value. Upon ini- into account the credit risk associated with these financial as- activities. Interest on loans, and dividends paid and received are The Company has the following non-derivative financial as- tial recognition, attributable transaction costs are recognised in sets. allocated to cash flows from financing activities. sets: cash and cash equivalents, receivables and loans, and profit or loss as incurred. Financial assets at fair value through WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 126 Annual Report Petrol 2010 127

profit or loss are measured at fair value, and changes therein ticular risk associated with a recognised asset or liability or swaps and collars. The fair value of interest rate swaps and col- of the cost of that asset. Intangible assets are subsequently are recognised in profit or loss. a highly probable forecast transaction that could affect pro- lars on the statement of financial position date is determined by measured using the cost model. The Company does not have fit or loss, the effective portion of changes in the fair value of discounting future cash flows arising as a result of a variable in- intangible assets with unidentifiable useful lives. The Company’s financial assets measured at fair value through the derivative is recognised in comprehensive income for the terest rate (interest proceeds from a swap) and a fixed interest profit or loss mainly consist of unrealised derivative financial in- period and presented in the hedging reserve. Any ineffective rate (payment of interest on a swap). Concessions for the construction of gas networks and struments assessed on the reporting date. portion of changes in the fair value of the derivative is reco- distribution of natural gas gnised directly in profit or loss. If the hedging instrument no When an interest rate swap is designated as the hedging in- The Company recognises an intangible long-term asset aris- Loans and receivables longer meets the criteria for hedge accounting or the hed- strument in a hedge of the variability in cash flows attributable ing from a service concession arrangement when it has a right Loans and receivables are non-derivative financial assets with ging instrument is sold, terminated or exercised, then the to a recognised asset or liability or a forecast transaction, the to charge for usage of the concession infrastructure. An intan- fixed or determinable payments that are not quoted in an acti- Company is to discontinue hedge accounting. The cumula- effective portion of the gain or loss on the instrument is reco- gible long-term asset received as consideration for providing ve market. Depending on their maturity, they are classified as tive gain or loss recognised in other comprehensive income gnised directly in comprehensive income. The ineffective por- construction or upgrade services in a service concession ar- current financial assets (maturity of up to 12 months from the remains presented in the hedging reserve as long as the fore- tion of the gain or loss on the instrument is recognised in profit rangement is measured at fair value upon initial recognition. date of the statement of financial position) or long-term financi- cast transaction does not affect profit or loss. If the forecast or loss. Subsequent to initial recognition, the intangible long-term asset al assets (maturity of more than 12 months from the date of the transaction is no longer expected to occur, then the balance is measured at cost less accumulated amortisation and any ac- statement of financial position). In the statement of financial po- in other comprehensive income is recognised immediately in e. Equity cumulated impairment losses. sition, loans and receivables are carried as operating and other profit or loss. In other cases, the amount recognised in other Share capital receivables and measured at amortised cost using the effective comprehensive income is transferred to profit or loss in the The called-up capital of the company Petrol d.d., Ljubljana takes Other intangible assets interest rate method. same period in which the hedged item affects profit or loss. the form of share capital, the amount of which is defined in the Other intangible assets that have finite useful lives are meas- Company’s articles of association, has been registered with the ured at cost less accumulated amortisation and accumulated Cash and cash equivalents • The effects of other derivatives not designated as the hed- Court and is paid up by owners. Dividends on ordinary shares impairment losses. Other intangible assets of the Company Cash and cash equivalents comprise cash balances, bank de- ging instrument in a hedge of the variability in cash flows or are recognised as a liability in the period in which they were ap- mainly consist of software. posits with maturities of three months or less, and other current not attributable to a particular risk associated with a reco- proved by the General Meeting. and highly liquid investments with original maturities of three gnised asset or liability are recognised in profit or loss. Subsequent expenditure months or less. Capital surplus Subsequent expenditure relating to intangible assets is recog- The Company has the following derivative financial instruments: General equity revaluation adjustments as at 31 December nised in the carrying amount of the item if it is probable that the d.2 Non-derivative financial liabilities 2003 comprised the revaluation of share capital made before future economic benefits embodied within the part of this asset The Company initially recognises debt securities issued on the Forward contracts the year 2002, in accordance with the then applicable Slovene will flow to the Group and the cost can be measured reliably. All date that they are originated. All other financial liabilities are re- The Company purchases petroleum products in US dollars, but Accounting Standards. Because of the transition to Interna- other expenditure is recognised in profit or loss as expenses as cognised initially on the trade date at which the Company beco- sells them primarily in euros. Because purchases and sales are tional Financial Reporting Standards, the revaluation adjust- soon as they are incurred. mes a party to the contractual provisions of the instrument. The made in different currencies, mismatches occur between pur- ment was transferred to capital surplus. It can only be used to Company derecognises a financial liability when its contractual chase and selling prices that are hedged against using forward increase share capital. Amortisation obligations are discharged or cancelled or expire. contracts. Amortisation is calculated on a straight-line basis, taking into Legal and other reserves account the useful life of intangible fixed assets. This method re- The Company has the following non-derivative financial liabi- The fair value of forward contracts on the statement of financial Legal and other reserves comprise shares of profit from pre- flects the expected pattern of consumption of the asset. Amor- lities: loans, bonds issued and trade payables. Such financial position date is determined by means of publicly available infor- vious years that have been retained for a dedicated purpose, tisation begins when an asset is available for use. liabilities are recognised initially at fair value plus any directly at- mation about the value of forward contracts in a regulated mar- mainly for offsetting eventual future losses. When created, they tributable transaction costs. Subsequent to initial recognition, ket on the reporting date for all outstanding contracts. Gains and are recognised by the body responsible for the preparation of The estimated useful lives for the current and comparative peri- these financial liabilities are measured at amortised cost using losses are recognised in profit or loss. the annual report or by a resolution of this body. ods are as follows: the effective interest method. Depending on their maturity, they are classified as short-term financial liabilities (maturity of up Commodity swaps Reserves for own shares (in%) 2010 2009 to 12 months from the date of the statement of financial posi- When petroleum products and electricity are purchased or sold, If the Company acquires an ownership interest, the amount Concessions 3.45-20.00% 3.45-20.00% tion) or long-term financial liabilities (maturity of more than 12 mismatches occur between purchase and selling prices that are paid, including transaction costs less tax, is deducted from to- Computer software 10.00-25.00% 20.00-25.00% months from the date of the statement of financial position). hedged against using commodity swaps. tal equity in the form of own shares until such shares are can- celled, reissued or sold. If own shares are later sold or reissued, d.3 Derivative financial instruments The fair value of commodity swaps on the statement of financial the consideration received is included in capital surplus net of Amortisation methods, useful lives and residual values are revi- Derivative financial instruments are recognised initially at fair position date is determined using publicly available information transaction costs and related tax effects. ewed at each financial year-end and adjusted if appropriate. value. Attributable transaction costs are recognised in profit or about the value of commodity swaps as at the statement of fi- loss as incurred. Subsequent to initial recognition, derivatives nancial positiondate, issued by relevant institutions. Gains and f. Intangible assets Impairment of assets is explained in more detailed in point k2. are measured at fair value, and changes therein are accounted losses are recognised in profit or loss. Intangible assets are carried at cost less accumulated amorti- for as described below. sation and accumulated impairment losses. Cost includes ex- g. Property, plant and equipment Interest rate swaps and collars penditure that is directly attributable to the acquisition of the Items of property, plant and equipment are measured at cost • When a derivative is designated as the hedging instrument in Interest rates on loans received are exposed to a risk of interest assets. Borrowing costs directly attributable to the acquisi- less accumulated depreciation and accumulated impairment a hedge of the variability in cash flows attributable to a par- rate fluctuations which is hedged against using interest rate tion or production of a qualifying asset are recognised as part losses, with the exception of land, which is measured at cost WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 128 Annual Report Petrol 2010 129

less any impairment. Cost includes expenditure that is direc- Residual values and useful lives of an asset are reviewed annual- Operating lease carrying amount of receivables exceeds their fair value, i.e. the tly attributable to the acquisition of the assets. Parts of an item ly and adjusted if appropriate. If the carrying amount of an asset In the income statement, rental income earned under an operating collectible amount, the receivables are impaired. Receivables for of property, plant and equipment having different useful li- is greater than its estimated recoverable amount, the asset’s lease is recognised either as cost (leased assets) or income (leased which it is assumed they will not be settled by the original date of ves are accounted for as separate items of property, plant and carrying amount is immediately written down to its recoverable out assets) on a straight-line basis. payment or up to their full amount are deemed doubtful; should equipment. Borrowing costs directly attributable to the acquisiti- amount and recognised in profit or loss. Impairment of assets is court proceedings be initiated, they are deemed disputed. on, construction or production of a qualifying asset are recogni- explained in more detailed in point k2. j. Inventories sed as part of the cost of that asset. Items of property, plant and Inventories of merchandise and materials are measured at the Receivables that are not individually significant are collectively equipment are subsequently measured using the cost model. Gains and losses on disposal or elimination are determined by lower of historical cost and net realisable value. The historical assessed for impairment by grouping together receivables with comparing the proceeds from disposal with the carrying amo- cost of inventories comprises the cost, which is made up of the similar risk characteristics. Receivables are grouped together Subsequent expenditure unt. Gains and losses on disposal are recognised in the inco- purchase price, import duties and direct costs of purchase. by age. In assessing collective impairment, the Company uses Expenditure related to the replacement of a part of an item of me statement. Available-for-sale items of property, plant and Any discounts are subtracted from the purchase price. Direct historical trends of the probability of default, timing of recoveri- property, plant and equipment is recognised in the carrying equipment are presented separately from other assets and are costs of purchase include transportation costs, costs of loading, es and the amount of loss incurred, adjusted for management’s amount of the item if it is probable that the future economic be- not depreciated in the year of the disposal. transhipment and unloading, transport insurance costs, goods judgement as to whether current economic and credit conditi- nefits embodied within the part will flow to the Company and its tracking costs, costs of agency arrangements and other similar ons are such that the actual losses are likely to be greater or less cost can be measured reliably. All other expenditure (e.g. day- Environmental fixed assets costs incurred before initial storage and borne by the purchaser, than suggested by historical trends. -to-day servicing) is recognised in profit or loss as expenses as Environmental fixed assets acquired under a scheme for the crea- and non-refundable duties. Discounts on purchase prices inclu- soon as they are incurred. tion and use of revenue deferred for the purpose of environmental de discounts indicated on invoices and subsequently obtained The Company evaluates evidence about the impairment of loans rehabilitation are carried and presented separately. More infor- discounts relating to a specific purchase. individually for each significant loan. Depreciation mation about environmental fixed assets is available in point l. Depreciation is calculated on a straight-line basis, taking into acco- The cost formula is based on the first-in first-out principle (FIFO). An impairment loss in respect of a financial asset measured at unt the useful life of each part (component) of an item of property, h. Investment property The FIFO method assumes that the items of inventories that are amortised cost is calculated as the difference between its car- plant and equipment. This method reflects the expected pattern of Investment property is property held by the Company either to purchased or produced first are also the first to be sold. Accordin- rying amount and the estimated future cash flows discounted at consumption of the asset. Leased assets are depreciated by taking earn rental income or for capital appreciation or for both. gly, the use of inventories is calculated using the initial actual cost, the original effective interest rate. Losses are recognised in profit into account the lease term and their useful lives. Land is not de- while the final inventories are determined using the final actual cost. or loss. When a subsequent event causes the amount of impair- preciated. Depreciation begins when an asset is available for use. Investment property is measured using the cost model. Sub- ment loss to decrease, the decrease in impairment loss is rever- Construction work in progress is not depreciated. sequent to its recognition, the asset is recognised at cost less Net realisable value is the estimated selling price in the ordinary co- sed through profit or loss. accumulated depreciation and accumulated impairment losses. urse of business, less the estimated costs of completion and selling The estimated useful lives for the current and comparative peri- Depreciation method and rates are the same as for items of pro- expenses. The realisable value of inventories is assessed at least Impairment of available-for-sale financial assets ods are as follows: perty, plant and equipment. Impairment of assets is explained in once a year based on their balances as at the date of the annual fi- Impairment losses on available-for-sale financial assets are reco- more detailed in point j2. nancial statements. The inventories that have not changed for more gnised by transferring any cumulative loss that has been previ- (in %) 2010 2009 than a year are written off. Damaged, expired and unusable invento- ously recognised in other comprehensive income for the period Buildings: Subsequent expenditure ries are written off regularly during the year on an item by item basis. and presented in the fair value reserve to profit or loss. Any sub-

Buildings at service stations 2.50-10.00% 2.50-10.00% Subsequent expenditure relating to investment property is reco- sequent increase in the fair value of an impaired available-for-sale gnised in the carrying amount of the item if it is probable that the equity security is recognised in other comprehensive income for Above-ground and underground k. Impairment 2.85-50.00% 2.85-50.00% reservoirs future economic benefits embodied within the part of this asset k.1 Financial assets the period or in fair value reserve. Underground service paths at will flow to the Group and the cost can be measured reliably. All A financial asset is impaired if objective evidence indicates that 5.00-14.30% 5.00-14.30% service stations other expenditure is recognised in profit or loss as expenses as one or more loss events have occurred that had a negative effect k.2 Non-financial assets Other buildings 1.43-50.00% 1.43-50.00% soon as they are incurred. on the estimated future cash flows of that asset that can be esti- The Company reviews at each reporting date the carrying amo- mated reliably. unts of significant non-financial assets to determine whether the- Equipment: i. Leased assets re is any indication of impairment. If any such indication exists, Equipment – mechanical and elec- A lease is classified as a finance lease when under the terms of the Objective evidence that financial assets are impaired can include then the asset’s recoverable amount is estimated. tronic equipment for maintenance 10.00-25.00% 10.00-25.00% lease substantially all the risks and rewards of ownership are trans- default or delinquency by a debtor, restructuring of an amount of other equipment ferred to the lessee. Other leases are treated as operating leases, due to the Company for which the Company granted its appro- The recoverable amount of an asset or cash-generating unit is the Gas stations equipment 3.33-20.00% 3.33-20.00% in which case the leased assets (acting as a lessee) or long-term val, indications that a debtor will enter bankruptcy, and the di- greater of its value in use and its fair value less costs to sell. In as- Pumping equipment at service 5.00-25.00% 5.00-25.00% financial receivables (acting as a lessor) are not recognised in the sappearance of an active market for an instrument. In addition, sessing the asset’s value in use, the estimated future cash flows stations Company’s statement of financial position. for an investment in an equity security, a significant (more than are discounted to their present value using a pre-tax discount Motor vehicles 10.00-25.00% 10.00-25.00% 20%) or prolonged (longer than 9 months) decline in its fair va- rate that reflects current market assessments of the time value Freight cars – rail tankers 25.00% 25.00% Finance lease lue below its cost is objective evidence of impairment. of money and the risks specific to the asset. For the purpose of Computer hardware 15.00-25.00% 15.00-25.00% The Company acts only as a lessor. Amounts due from lessees in a impairment testing, assets that cannot be tested individually are

Office equipment – furniture 6.70-12.50% 6.70-12.50% finance lease are treated as receivables and amount to the value of Impairment of receivables and loans granted grouped together into the smallest group of assets that generates the investment leased out. Finance lease income is allocated to ac- The Company considers evidence of impairment for receivables cash inflows from continuing use that are largely independent of Small tools: 33.33% 33.33% counting periods so as to reflect a constant periodic rate of return on individually or collectively. All significant receivables are asses- the cash inflows of other assets or groups of assets (the “cash-ge- Environmental fixed assets: 5.00-25.00% 5.00-25.00% the leased out net investment that has not yet been realised. sed individually for specific impairment. If it is assessed that the nerating unit”). WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 130 Annual Report Petrol 2010 131

The impairment of an asset or a cash generating unit is recogni- termination benefits on retirement and the costs of all expected ju- Sale of services q. Determination of fair value sed if its carrying amount exceeds its recoverable amount. Im- bilee benefits until retirement. The calculation using the projected A sale of services is recognised in the accounting period in which A number of the Company’s accounting policies require the de- pairment is recognised in the income statement. unit credit method is performed by a certified actuary. Reimbur- the services are rendered, by reference to the stage of completi- termination of fair value, for both financial and non-financial as- sed costs arising from termination benefits on retirement and jubi- on of the transaction assessed on the basis of the actual service sets and liabilities. Impairment losses recognised in prior periods are assessed at lee benefits are charged against the provisions created. provided as a proportion of total services to be provided. the end of the reporting period for any indications that the loss Fair value is the amount for which an asset could be sold or a li- has decreased or no longer exists. An impairment loss is rever- m. Long-term deferred revenue o. Finance income and expenses ability exchanged between knowledgeable, willing parties in an sed if there has been a change in the estimates used to determi- Long-term deferred revenue from gas network connection fees Finance income comprises interest income on financial assets, arm's length transaction. ne the recoverable amount. An impairment loss is reversed to When connected to the gas network, the users pay a fixed fee, en- dividend income, gains on the disposal of available-for-sale finan- the extent that the asset’s increased carrying amount does not titling them to be connected to the established network. Since the cial assets, changes in the fair value of financial assets at fair value The Company determines the fair value of financial instruments exceed the carrying amount that would have been determined benefits from the service rendered are expected throughout the through profit or loss, foreign exchange gains, gains on hedging in- by taking into account the following fair value hierarchy: net of depreciation or amortisation if no impairment loss had period of gas supply to the user, the revenue from the connection struments that are recognised in the income statement, and inco- • Level 1 comprises quoted prices in active markets for identi- been recognised in previous years. fee is deferred in proportion to the estimated period during whi- me generated as a result of mergers. cal assets or liabilities; ch the benefits will flow to Petrol. The Company estimates that • Level 2 comprises values other than quoted prices included l. Provisions the period during which the benefits will flow to it equals the term Interest income is recognised as it accrues using the effective in- within Level 1 that are observable either directly (as prices Provision are recognised if, as a result of a past event, the Com- of concession for the gas network. This term ranges between 20 terest method. Dividend income is recognised in the Company’s in less active markets) or indirectly (e.g. values derived from pany has a present legal or constructive obligation that can be and 35 years, depending on a specific concession agreement. income statement on the date that a shareholder’s right to receive quoted prices in an active market); estimated reliably, and it is probable that an outflow of econo- payment is established. If the fair value of net assets acquired in a • Level 3 comprises inputs for assets or liabilities that are not mic benefits will be required to settle the obligation. Long-term deferred revenue from environmental fixed assets merger exceeds the carrying amount of the investment in the ab- based on observable market data. Long-term deferred revenue from environmental fixed assets sorbed company, the difference is carried as finance income for The most significant provisions include: comprises deferred revenue from funds granted for the enviro- the period in which the merger took place. The Company uses quoted prices as the basis for the fair value nmental rehabilitation of service stations, road tankers, storage of financial instruments. If a financial instrument is not quoted Provisions for employee benefits facilities and the clean-up of the bitumen dump at Pesniški Dvor. Finance expenses comprise borrowing costs (unless capitalised), on a regulated market and the market is considered as inactive, Pursuant to the law, the collective agreement and the internal ru- Environmental assets, presented as part of the Company’s pro- foreign exchange losses, changes in the fair value of financial assets the Company uses inputs of Levels 2 and 3 for determining the les, the Company is obligated to pay its employees jubilee benefits perty, plant and equipment items, were approved by means of a at fair value through profit or loss, impairment losses recognised on fair value of a financial instrument. Where applicable, further in- and termination benefits on retirement, for which it has establis- decision of the Ministry of the Environment and Spatial Planning financial assets, and losses on hedging instruments that are recog- formation about the assumptions made when determining fair hed long-term provisions. Other obligations related to employee as part of the ownership transformation of the company Petrol nised in the income statement. Borrowing costs are recognised in values is disclosed in the notes specific to that asset or liability of post-employment benefits do not exist. d.d., Ljubljana and were recognised as such in the opening finan- the income statement using the effective interest method. the Company. cial statements of Petrol d.d., Ljubljana as at 1 January 1993 that Provisions amount to estimated future payments for terminati- were prepared in accordance with the regulations governing the p. Taxes The methods of determining the fair values of individual groups on benefits on retirement and jubilee benefits discounted to the ownership transformation of companies. Deferred revenue is re- Taxes comprise current tax and deferred tax liabilities. Income of assets for measurement and/or reporting purposes are de- end of the reporting period. The calculation is made separately stated under revenue in proportion to the depreciation of enviro- tax is recognised in the income statement except to the extent scribed below. for each employee by taking into account the costs of termination nmental fixed assets and the funds used for the clean-up of the that it relates to business combinations or items recognised di- benefits on retirement and the costs of all expected jubilee bene- dump at Pesniški Dvor. rectly in other comprehensive income. Intangible assets fits until retirement. The calculation using the projected unit credit The fair value of intangible assets is based on the discounted method is performed by a certified actuary. Termination benefits A portion of deferred revenue payable in the period under 12 Current tax liabilities are based on the taxable profit for the year. cash flows expected to be derived from the use and eventual sa- on retirement and jubilee benefits are charged against the provisi- months is restated under short-term deferred revenue. Taxable profit differs from the net profit reported in the income le of the assets. ons created. statement as it excludes revenue and expense items taxable or n. Recognition of revenue deductible in other years and other items that are never subject Property, plant and equipment Provisions for employee benefits in relation to third-party Sales revenue is recognised at the fair value of the consideration to taxation or deduction. The Company’s current tax liabilities The fair value of property, plant and equipment recognised as managed service stations received or receivable, net of returns and discounts, trade dis- are calculated using the tax rates effective on the reporting date. a result of business combinations is the same as their market The business cooperation contracts concluded by the Company counts and volume rebates. Revenue is recognised when the si- value. The market value of property is the estimated amount with the third-party managed service stations stipulate that the ri- gnificant risks and rewards of ownership have been transferred Deferred tax is accounted for in its entirety using the statement of for which a property could be sold on the date of valuation and ghts of employees of the third-party managed service stations to to the buyer, there is certainty about the recovery of receivables, financial position liability method for temporary differences betwe- after proper marketing. The market value of equipment is ba- jubilee benefits and termination benefits on retirement are equal the associated costs and possible return of goods, and there is en the tax base of assets and liabilities and their carrying amounts sed on the approach using quoted market prices for similar as the rights of employees of the Company. The contractual obli- no continuing involvement by the Company with the goods sold. in separate financial statements. Deferred tax is determined using items. gation of the Company to reimburse the costs arising from such the tax rates (and laws) that were effective on the statement of fi- rights to third-party managed service stations represents the ba- Revenue is recognised as follows: nancial position date and are expected to apply when a deferred Investment property sis for recognition of long-term provisions. Provisions amount to tax asset is realised or a deferred tax liability is settled. The value of investment property is assessed by considering estimated future payments for termination benefits on retirement Sale of goods the aggregate of the estimated cash flows expected to be re- and jubilee benefits discounted to the end of the reporting period. A sale of goods is recognised when the Company delivers goods A deferred tax asset is recognised to the extent that it is proba- ceived from renting out the property. A yield that reflects the The obligation is calculated separately for each employee of the to a customer, the customer accepts the goods, and the collec- ble that future taxable profits will be available against which they specific risks is included in the property valuation based on dis- third-party managed service stations by estimating the costs of tability of the related receivables is reasonably assured. can be utilised in the future. counted net annual cash flows. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 132 Annual Report Petrol 2010 133

Inventories convertible bonds and share options granted to employees. Be- Energy activities consist of: The fair value of inventories acquired in business combinations cause the Company has no convertible bonds or share options • sale and distribution of gas, is determined based on their expected selling price in the ordi- granted to employees, its basic earnings per share are the same • generation, sale and distribution of electricity and heat, nary course of business less the estimated costs of sale. as its diluted earnings per share. • efficient energy consumption projects and comprehensive energy supply projects, Financial assets at fair value through profit or loss and s. Cash flow statement • environment activities. available-for-sale financial assets The section of the cash flow statement referring to operating The fair value of financial assets at fair value through profit or activities has been prepared using the indirect method based loss and available-for-sale financial assets is determined by refe- on data derived from the statement of financial position as at 31 The Group’s operating segments in 2009 rence to the above fair value hierarchy for financial instruments. December 2009 and 31 December 2010 and data derived from Income If their fair value cannot be measured reliably because the range the income statement for 2010. The section referring to invest- statement/ of reasonable fair value estimates is significant and the proba- ing and financing activities has been prepared using the direct Oil and Statement merchandise Energy of financial bilities of the various estimates cannot be reasonably assessed, method. Default interest paid and received in connection with (in EUR) sales activity Total position the Company measures the financial asset at cost. operating receivables is allocated to cash flows from operating Sales revenue 3,098,156,655 120,149,825 3,218,306,480 activities. Interest on loans, and dividends paid and received are Revenue from subsidiaries (860,030,882) (24,412,182) (884,443,064) Investments in associates and jointly controlled entities allocated to cash flows from financing activities. Sales revenue 2,238,125,772 95,737,643 2,333,863,416 2,333,863,416 The fair value of investments in associates and jointly controlled Estimated net profit for the year * (7,202,540) 15,093,032 7,890,492 7,890,492 entities is determined by reference to the above fair value hie- Interest income ** 5,626,611 1,965,226 7,591,837 7,591,837 rarchy for financial instruments. The methods of determining 5. Segment reporting Interest expense ** (13,918,715) (4,861,439) (18,780,154) (18,780,154) the value of and input assumptions for each investment are spe- Because the financial report consists of the financial state- Depreciation of property, plant and equipment, investment cifically presented in disclosures. ments and the accompanying notes of the Group as well as of property, and amortisation of intangible assets 29,095,574 5,002,106 34,097,680 34,097,680 the Company, only the Group’s operating segments have been Revenue from equity accounted investees (17,905,879) 14,222,363 (3,683,516) (3,683,516) Receivables and loans granted disclosed. Total assets 932,333,122 203,192,551 1,135,525,673 1,135,525,673 The fair value of receivables and loans is calculated as the pre- sent value of future cash flows, discounted at the market rate of An operating segment is a component of the Group that en- Equity accounted investees 37,969,720 98,631,988 136,601,708 136,601,708 interest at the end of the reporting period. The estimate takes gages in business activities from which it earns revenues and Property, plant and equipment, intangible assets and investment property 502,735,216 90,221,950 592,957,166 592,957,166 into account the credit risk associated with these financial as- incurs expenses that relate to transactions with any of the Other assets 391,628,186 14,338,613 405,966,799 405,966,799 sets. Group’s other components. The operating results of operating

segments are reviewed regularly by the executive officers of the * Net profit or loss for the year generated from oil and merchandise sales includes the effect of the investment in Istrabenz d.d. in its entirety. Non-derivative financial liabilities Group to make decisions about resources to be allocated to a ** Interest income and expenses are estimated based on a segment’s share of investments and assets in total investments and assets. Fair value is calculated, for reporting purposes, based on the pre- segment and assess the performance of the Group. sent value of future principal and interest cash flows, discounted at the market rate of interest at the end of the reporting period. The Group’s executive officers monitor information on two le- The Group’s operating segments in 2010 vels: on the micro level, in which case individual units are moni- Income Derivative financial instruments tored, and on the macro level, where information is monitored statement/ • The fair value of forward contracts equals their listed market only in terms of certain key information that can be used to ma- Oil and Statement merchandise Energy of financial price at the reporting date. ke comparisons with similar companies in Europe. Given the (in EUR) sales activity Total position • The fair value of interest rate swaps at the reporting date is enormous amount of information and their sensitivity on the Sales revenue 3,771,837,452 133,585,199 3,905,422,651 assessed by discounting future cash flows from the variable micro level, the Group only discloses macro-level information in Revenue from subsidiaries (1,083,745,826) (18,924,309) (1,102,670,135) interest rate (interest received from a swap) and the fixed in- its annual report. Sales revenue 2,688,091,626 114,660,889 2,802,752,517 2,802,752,517 terest rate (interest paid under a swap). Estimated net profit for the year 29,763,122 5,696,737 35,459,859 35,459,859 • The fair value of commodity swaps equals their listed mar- The Group thus uses the following segments in the preparation Interest income * 5,064,159 1,871,445 6,935,604 6,935,604 ket price at the reporting date. and presentation of the financial statements: Interest expense * (12,278,630) (4,537,531) (16,816,161) (16,816,161) • oil and merchandise sales, r. Earnings per share • energy activities. Depreciation of property, plant and equipment, investment property, and amortisation of intangible assets 28,691,179 5,756,682 34,447,861 34,447,861 The Company presents basic and diluted earnings per share for Revenue from equity accounted investees 1,742,272 4,040,773 5,783,045 5,783,045 its ordinary shares. Basic earnings per share are calculated by Oil and merchandise sales consist of: Total assets 1,047,907,242 217,603,709 1,265,510,951 1,265,510,951 dividing the profit or loss attributable to ordinary shareholders • sale of oil and petroleum products, by the weighted average number of ordinary shares during the • sale of supplementary merchandise Equity accounted investees 38,719,380 97,202,686 135,922,066 135,922,066 period. Diluted earnings per share are calculated by adjusting Property, plant and equipment, intangible assets and investment property 506,695,552 104,353,767 611,049,319 611,049,319 the profit or loss attributable to ordinary shareholders and the Supplementary merchandise is comprised of automotive pro- weighted average number of ordinary shares during the period ducts, foodstuffs, accessories, tobacco and lottery products, Other assets 502,492,310 16,047,256 518,539,566 518,539,566 for the effects of all potential ordinary shares, which comprise coupons and cards. * Interest income and expenses are estimated based on a segment’s share of investments and assets in total investments and assets. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 134 Annual Report Petrol 2010 135

Additional information about geographic areas in which the Group operates

Sales Total assets Capital expenditure (in EUR) 2010 2009 2010 2009 2010 2009 Slovenia 2,151,226,026 1,906,604,937 709,187,140 597,737,558 40,751,309 24,010,352 Croatia 406,482,204 292,642,941 238,650,451 194,931,235 11,479,903 11,066,397 Bosnia and Herzegovina 163,967,601 119,356,149 73,703,691 63,703,722 1,010,189 476,922 Austria 31,586,776 8,671,606 11,886,202 2,314,541 507,097 62,787 Other countries 49,489,911 6,587,783 49,939,172 93,687,893 4,395,952 1,150,719 Ogrevanje Piran d.o.o. Petrol-Butan d.o.o. 2,802,752,517 2,333,863,416 1,083,366,656 952,374,949 58,144,450 36,767,177 In July 2010 the Group purchased a 60-percent interest in In August 2010 the Group acquired a 100-percent interest in Pe- Ogrevanje Piran d.o.o., which deals with gas and heat distribu- trol-Butan d.o.o., which is engaged in the sale and distribution of Jointly controlled entities 27,145,406 24,788,513 tion. Thus, it became a 100-percent owner of the said company. liquefied petroleum gas. As a result, the Group acquired control- Associates 119,924,809 123,450,865 No goodwill arose on the acquisition. The assets and liabilities of ling influence. The assets and liabilities of the acquired company Unallocated assets 35,074,080 34,911,346 the acquired company are disclosed in the books of account at are disclosed in the books of account at fair value and as such Total assets 1,265,510,951 1,135,525,673 fair value and as such are considered in the first consolidation. are considered in the first consolidation.

In the presentation of the geographic areas, revenue generated The statement of the financial position of Ogrevanje Piran d.o.o. The statement of the financial position of Petrol-Butan d.o.o. as in a particular area is determined based on the geographic loca- as at the day the Group acquired controlling influence is pre- at the day the Group acquired controlling influence is presented tion of customers, whereas the assets are determined based on sented in the table. in the table. the geographic location of assets. In the five months following the acquisition of the 60-percent In the four months following the acquisition of the 100-percent The receivable from the Group’s largest individual customer interest, the company generated EUR 760,434 in revenue and interest, the company generated EUR 670,326 in revenue or stood at EUR 6,965,460 as at 31 December 2010, accounting posted a profit of EUR 25,333. If the acquisition had taken EUR 602,326, excluding revenue from intra-group transactions, for 2.35% of trade receivables. place on 1 January 2010, the Group’s revenue would have been and posted a loss of EUR 26,125. If the acquisition had taken EUR 1,049,404 higher and its profit EUR 25,808 lower. place on 1 January 2010, the Group's revenue would have been 6. Notes to individual EUR 897,551 higher and its profit EUR 49,841 higher. items in the financial statements Petrol-Jadranplin d.o.o. Ogrevanje Piran d.o.o. Petrol-Butan d.o.o.

6.1 Business combinations, Fair Carrying fair Carrying (in EUR) value amount (in EUR) value amount mergers and incorporations Fair Carrying Petrol-Jadranplin d.o.o. (in EUR) value amount Cash and cash equivalents 193,259 193,259 Cash and cash equivalents 18,437 18,437 In May 2010 the Group acquired a 51-percent interest in Petrol- Cash and cash equivalents 78 78 Intangible assets 5,745 5,745 Intangible assets 642 642 -Jadranplin d.o.o. The latter is engaged in the sale and distribu- Intangible assets 303 303 Property, plant and equipment 1,703,875 1,703,875 Property, plant and equipment 1,060,061 1,060,061 tion of liquefied petroleum gas. As a result, the Group acquired Property, plant and equipment 3,415,431 3,415,431 Inventories 73,838 73,838 Inventories 91,201 91,201 controlling influence. The assets and liabilities of the acquired Inventories 164,109 164,109 Operating receivables 915,182 915,182 Operating receivables 144,520 144,520 company are disclosed in the books of account at fair value and as such are considered in the first consolidation. Operating receivables 191,337 191,337 Other assets 175,044 175,044 Other assets 925 925 Assets 3,771,258 3,771,258 Assets 3,066,943 3,066,943 Assets 1,315,787 1,315,786

The statement of the financial position of Petrol-Jadranplin Financial liabilities 881,819 881,819 Financial liabilities 32,375 32,375 Financial liabilities 393,769 393,769 d.o.o. as at the day the Group acquired controlling influence is Operating liabilities 792,758 792,758 Operating liabilities 834,262 834,262 Operating liabilities 218,022 218,022 presented in the table. Liabilities 1,674,577 1,674,577 Liabilities 866,637 866,637 Liabilities 611,791 611,791

In the seven months following the acquisition of the 51-percent Net assets 2,096,681 2,096,681 Net assets 2,200,306 2,200,306 Net assets 703,995 703,994 interest, the company generated EUR 3,359,885 in revenue Non-controlling interest (49%) 1,027,374 Non-controlling interest (40%) 446,000 Net assets acquired 703,995 or EUR 2,641,964, excluding revenue from intra-group Net assets acquired 1,069,307 Net assets acquired 1,754,306 Amount paid 979,049 transactions, and posted a loss of EUR 36,012. If the acquisition Amount paid 1,858,711 Amount paid 1,754,306 Goodwill 275,054 had taken place on 1 January 2010, the Group's revenue would have been EUR 16,764 higher and its profit EUR 99,728 lower. Goodwill 789,404 Goodwill 0 WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 136 Annual Report Petrol 2010 137

6.2 Other revenue

The Petrol Group Petrol d.d.

(in EUR) 2010 2009 2010 2009

Reversal of allowances for receivables 5,339,708 367,941 60,803 36,999

Revenue from reversal of accrued litigation costs 2,782,003 3,891,522 2,705,831 3,371,388

Utilisation of environmental provisions 1,620,556 1,631,587 1,620,556 1,631,587

Reversal of accrued costs, expenses 952,100 465,132 802,289 449,697

Petrol Plin d.o.o. Soenergetika d.o.o. Gain on disposal of fixed assets 937,518 1,525,546 495,010 1,196,093

On 30 June 2010 Petrol Plin d.o.o. was merged into Petrol d.d., Petrol d.d., Ljubljana, together with the companies Domplan, Reversal of inventory shortages accrued 0 442,174 0 0 Ljubljana. Petrol Plin d.o.o. was stricken from the Companies Re- HSE and Elektro Gorenjska, established the company Soener- Cash discounts, rebates received 203,319 1,098,642 101,244 123,581 gister. getika d.o.o. which is engaged in the cogeneration of heat and electricity in the boiler plant at Planina, Kranj. The investment is Compensation from insurance companies 202,009 287,199 72,729 95,345 Petrol Plin d.o.o. was wholly-owned by the parent company Petrol classified as a jointly controlled entity. Payment of court fees 145,862 128,418 104,552 97,936 d.d., Ljubljana, so the Group is not affected by the merger. Depreciation and amortisation of assets under management 65,400 65,400 58,831 52,262

Petrol-Energetika Dooel Skopje Reversal of provisions for termination and jubilee benefits 60,828 24,000 0 0 Petrol d.d., Ljubljana disclosed the difference between the in- Petrol d.d., Ljubljana established a Macedonian-based electricity Written-off receivables collected 34,244 1,251,080 33,791 987,082 vestment and net assets of the absorbed company totalling EUR trading company. The investment is classified as a subsidiary. 3,687,201 (as calculated in the table below) under other finance Penalties received 9,470 209,482 0 209,482 income. Compensation from the state 2,342 40,925 2,343 40,925 Other revenue 606,764 816,754 87,704 157,739

Total other revenue 12,962,123 12,245,802 6,145,683 8,450,116

6.3 Cost of sales and general and administrative costs

The Petrol Group Petrol d.d. General and General and Cost of administra- Cost of administrati- (in EUR) sales tive costs Total sales ve costs Total

2009 Petrol Plin d.o.o. Costs of materials 21,661,258 1,656,126 23,317,384 8,825,065 622,377 9,447,442

Carrying Costs of services 97,275,567 15,319,514 112,595,081 102,123,055 11,753,908 113,876,963 (in EUR) Fair value amount Labour costs 35,292,096 17,237,029 52,529,125 12,223,322 10,778,207 23,001,529 Cash and cash equivalents 399,340 399,340 Depreciation and amorti- Intangible assets 245,068 245,068 sation 30,861,763 3,235,917 34,097,680 20,344,999 1,839,054 22,184,053

Property, plant and equipment 32,284,734 32,284,734 Other costs 863,940 17,511,210 18,375,150 313,360 5,549,648 5,863,007

Inventories 1,232,530 1,232,530 Other expenses 285,626 177,640 463,266 49,310 320 49,630

Operating and other receivables 3,345,342 3,345,342 Total 186,240,250 55,137,436 241,377,686 143,879,111 30,543,514 174,422,624

Other assets 321,586 321,586

Assets 37,828,600 37,828,600 2010

Provisions and long-term Costs of materials 25,244,286 1,863,907 27,108,193 9,465,487 1,065,457 10,530,944 deferred revenue 1,857,486 1,857,486 Costs of services 96,049,030 18,833,966 114,882,996 99,514,783 14,394,109 113,908,892 Financial liabilities 10,450,132 10,450,132 Labour costs 37,211,593 16,722,515 53,934,108 15,403,468 11,076,386 26,479,854 Operating liabilities 3,659,058 3,659,058 Depreciation and amorti- Liabilities 15,966,676 15,966,676 sation 31,194,451 3,253,410 34,447,861 20,651,577 1,775,823 22,427,400

Net assets 21,861,924 21,861,924 Other costs 1,247,720 13,212,732 14,460,453 505,499 8,491,025 8,996,524

Investments in subsidiaries 18,174,723 Other expenses 393,496 300,082 693,578 55,908 119 56,027

Net assets acquired 3,687,201 Total 191,340,576 54,186,613 245,527,189 145,596,722 36,802,919 182,399,641 WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 138 Annual Report Petrol 2010 139

6.4 Costs of materials 6.6 Labour costs

The Petrol Group Petrol d.d. The Petrol Group Petrol d.d.

(in EUR) 2010 2009 2010 2009 (in EUR) 2010 2009 2010 2009

Costs of energy 19,879,595 16,805,840 5,015,282 4,699,743 Salaries 39,306,959 38,641,512 19,103,058 17,171,810

Costs of consumables 5,963,418 5,308,509 4,763,412 3,943,733 Costs of pension insurance 2,987,338 2,994,983 1,787,165 1,633,754

Write-off of small tools 216,361 157,586 60,363 59,986 Costs of other insurance 3,507,235 3,464,231 1,464,081 1,333,491

Other costs of materials 1,048,819 1,045,449 691,887 743,980 Transport allowance 1,827,299 1,586,532 596,379 492,300

Total costs of materials 27,108,193 23,317,384 10,530,944 9,447,442 Meal allowance 1,772,482 1,659,780 746,502 646,888 Annual leave allowance 1,349,943 1,345,719 605,198 513,000

Supplementary pension insurance 823,468 830,560 499,393 462,007

Other allowances and reimbursements 2,359,384 2,005,808 1,678,078 748,279 6.5 Costs of services Total labour costs 53,934,108 52,529,125 26,479,854 23,001,529

The Petrol Group Petrol d.d. Number of employees by formal education level as at 31 December 2009 (in EUR) 2010 2009 2010 2009

Costs of service station managers 30,691,766 32,120,824 29,279,205 29,831,898 The Petrol Group Petrol d.d.

Costs of transport services 28,567,278 29,144,783 27,369,803 27,728,158 Employees at Employees at Third-party Third-party Costs of fixed asset maintenance services 9,967,605 9,485,830 9,659,797 9,534,873 Group emplo- managed ser- Company managed ser- yees vice stations Total employees vice stations Total Lease payments 9,856,386 9,568,081 8,833,922 8,114,574 Level I 21 21 42 1 21 22 Costs of payment transactions and bank services 5,987,138 5,685,456 4,875,264 4,647,990 Level II 73 67 140 15 63 78 Costs of fairs, advertising and entertainment 5,493,927 3,332,884 4,279,726 2,895,436 Level III 46 68 114 1 15 16 Costs of professional services 5,331,396 5,981,955 3,363,031 3,810,351 Level IV 587 634 1.221 39 504 543 Contributions for operations along motorways 4,507,826 4,237,830 3,640,685 3,274,214 Level V 820 640 1.460 200 545 745 Costs of insurance premiums 3,299,206 2,671,588 2,411,465 1,827,497 Level VI 129 28 157 62 27 89 Costs of fire protection and physical and technical security 1,701,806 1,917,525 1,648,726 1,747,608 Level VII 407 14 421 254 13 267 Costs of environmental services 1,374,892 1,385,528 1,114,008 1,096,581 Level VIII 1 0 1 1 0 1 Fees for the building site use 1,360,725 1,352,237 1,239,586 1,235,987 Total 2,084 1,472 3,556 573 1,188 1,761 Reimbursement of work-related costs to employees 929,288 900,438 352,487 395,980

Concession charges 731,734 745,616 326,108 311,320 Number of employees by formal education level as at 31 December 2010 Membership fees 582,223 634,774 146,660 234,760

Outsourcing costs 574,203 402,041 4,498 4,227 The Petrol Group Petrol d.d. Property management 228,224 285,047 13,281,788 15,683,630 Employees at Employees at Third-party Third-party Other costs of services 3,697,374 2,742,644 2,082,133 1,501,878 Group emplo- managed ser- Company managed ser- Total costs of services 114,882,996 112,595,081 113,908,892 113,876,963 yees vice stations Total employees vice stations Total Level I 19 14 33 6 14 20

Level II 67 52 119 15 49 64

Level III 95 18 113 4 9 13

Level IV 608 539 1.147 66 467 533 The Petrol Group Petrol d.d., Ljubljana The costs of professional services include auditing services re- The costs of professional services include auditing services of Level V 884 622 1.506 211 558 769 lating to the annual report audit of EUR 401,574 (2009: EUR EUR 191,745 (2009: EUR 64,804). Auditing services comprise Level VI 139 32 171 65 31 96 252,056). Auditing services comprise the fee for the auditing the fee for the auditing of the annual report totalling EUR 72,700 Level VII 364 25 389 223 25 248 of the annual report totalling EUR 171,392 (2009: EUR 174,919), (2009: EUR 54,556) and other non-auditing services equalling Level VII/2 41 0 41 38 0 38 tax consulting services amounting to EUR 83,651 (2009: EUR EUR 119,045 (2009: EUR 10,248). Level VIII 1 0 1 1 0 1 9,200) and other non-auditing services equalling EUR 146,531 (2009: EUR 67,937). Total 2,218 1,302 3,520 629 1,153 1,782 WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 140 Annual Report Petrol 2010 141

6.7 Depreciation and amortisation

The Petrol Group Petrol d.d.

(in EUR) 2010 2009 2010 2009 Amortisation of intangible assets 931,595 871,176 681,852 622,910 Depreciation of property, plant and equipment 32,697,493 32,367,526 20,898,248 20,669,872 Depreciation of investment property 818,773 858,978 847,300 891,271 Finance income from dividends received from subsidiaries, associates and jointly Total depreciation and amortisation 34,447,861 34,097,680 22,427,400 22,184,053 controlled entities of Petrol d.d., Ljubljana

Petrol d.d. 6.8 Other costs (in EUR) 2010 2009 Petrol-Trade H.m.b.H. 5,617,065 5,587,468 The Petrol Group Petrol d.d. Total subsidiaries 5,617,065 5,587,468 (in EUR) 2010 2009 2010 2009 Geoplin d.o.o. Ljubljana 3,332,484 4,789,871 Impairment/write-down of assets 4,724,800 605,808 2,780,711 252,595 Aquasystems d.o.o. 519,980 519,980 Allowance for operating receivables 5,997,072 13,782,102 3,969,165 3,032,939 Marche Gostinstvo d.o.o. 67,036 77,536 Sponsorships and donations 1,444,130 1,349,182 1,267,652 1,222,475 Total associates 3,919,500 5,387,387 Environmental charges and charges unrelated to operations 573,775 594,888 243,644 204,940 Instalacija d.o.o. Koper 3,849,709 3,070,822 Loss on sale/elimination of property, plant and equipment 372,778 831,068 216,247 760,572 Karkasa, d.o.o. 148,440 0 Other costs 1,347,898 1,212,102 519,105 389,486 Total jointly controlled entities 3,998,149 3,070,822 Total other costs 14,460,453 18,375,150 8,996,524 5,863,007 Total finance income from interests 13,534,714 14,045,677

6.9 Other expenses 6.10 Interests and dividends Other expenses mainly consist of undercharged tax of EUR 313,400, with the remaining amount comprising fines, pe- nalties, complaints, charges and other expenses. 6.11 Other finance income and expenses

The Petrol Group Petrol d.d. The Petrol Group’s shares of profit from equity accounted investees (in EUR) 2010 2009 2010 2009

The Petrol Group Foreign exchange differences 30,213,994 32,099,108 28,371,592 28,187,812 (in EUR) 2010 2009 Gain on derivatives 29,892,189 25,613,327 29,892,189 25,613,279

Geoplin d.o.o. Ljubljana 2,475,438 13,719,120 Interest income 6,935,604 7,591,837 6,204,416 5,801,327

Aquasystems d.o.o. 521,848 520,628 Other finance income 914,548 236,780 4,601,650 236,654

Ogrevanje Piran d.o.o. 12,940 (17,385) Total other finance income 67,956,334 65,541,052 69,069,847 59,839,072 Istrabenz d.d. 0 (20,455,069) Loss on derivatives (30,093,517) (38,225,713) (30,093,517) (38,225,703) Bio goriva d.o.o. (44,380) 0 Foreign exchange differences (39,863,384) (33,317,383) (36,055,520) (30,680,811) Marche Gostinstvo d.o.o. 96,953 67,935 Interest expense (16,816,161) (18,780,154) (14,124,160) (16,322,229) Total associates 3,062,799 (6,164,771) Impairment of investments and goodwill (3,612,275) (7,210,399) (3,768,694) (27,845,384) Instalacija d.o.o. Koper 2,747,760 2,566,699 Other finance expenses (396,110) (753,389) (319,000) (714,955) Geoenergo d.o.o. (3,743) (3,818) Total other finance expenses (90,781,447) (98,287,038) (84,360,891) (113,789,082) Karkasa, d.o.o. 7,085 45,143 Net total (22,825,113) (32,745,986) (15,291,044) (53,950,010) Petrol - Bonus d.o.o. 53,101 (115,801) Petrol - OTI - Slovenija L.L.C. (106,772) (19,684) Petrol Slovenia Tirana Wholesale Sh.A. 76,792 8,716 The Company's other finance income, which stood at Soenergetika d.o.o. (53,977) 0 EUR 4,601,650, mainly relates to the difference between the in- Total jointly controlled entities 2,720,246 2,481,255 vestment’s value and net assets of the absorbed company Pet- Total finance income from interests 5,783,045 (3,683,516) rol Plin d.o.o. (see note 6.1). WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 142 Annual Report Petrol 2010 143

6.12 Taxes

The Petrol Group Petrol d.d.

(in EUR) 2010 2009 2010 2009

Tax expense (10,094,877) (8,442,839) (7,295,370) (6,404,988)

Deferred taxes 668,269 1,916,426 1,028,159 4,787,887 Deferred tax liabilities Taxes paid (9,426,608) (6,526,413) (6,267,211) (1,617,101)

(in EUR) Investments Fixed assets Other Total

As at 1 January 2009 119,203 6,591,611 5,395 6,716,210 The Petrol Group Petrol d.d. Charged/(credited) to the income statement 0 (76,537) 54,822 (21,715) (in EUR) 2010 2009 2010 2009 Charged/(credited) to other comprehensive income 26,488 0 0 26,488 Profit before tax 47,979,358 14,416,905 44,213,613 12,278,903 Foreign exchange differences 0 8,657 0 8,657 Tax at effective tax rate 9,595,872 3,027,550 8,842,723 2,578,570 As at 31 December 2009 145,691 6,523,731 60,217 6,729,641 Tax effect of untaxed revenue (4,380,406) (4,045,076) (3,536,138) (2,984,624) Charged/(credited) to the income statement 0 (76,886) (26,696) (103,582) Tax effect of expenses not deducted on tax assessment 4,767,730 7,756,002 960,627 2,023,156 Charged/(credited) to other comprehensive income (45,281) 0 0 (45,281) Effect of lower tax rates for companies abroad (556,587) (212,063) 0 0 Translation differences 0 (83,581) 0 (83,581) Taxes paid 9,426,608 6,526,413 6,267,211 1,617,101 As at 31 December 2010 100,410 6,363,263 33,521 6,497,196 Effective tax rate 19.65% 45.27% 14.17% 13.17%

The Group's corporate income tax assets and liabilities as at 31 Changes in deferred taxes of Petrol d.d., Ljubljana December 2010 stood at EUR 437,355 and EUR 2,854,687, re- Deferred tax assets spectively. The Group does not offset the assets and liabilities as they represent a receivable from or a liability to various tax ad- Allowance for (in EUR) Investments Provisions receivables Total ministrations. As at 1 January 2009 31,179,114 343,912 0 31,523,026

The Company's corporate income tax liabilities totalled Charged/(credited) to the income statement 4,113,570 67,729 606,588 4,787,887 EUR 1,712,921 as at 31 December 2010. This is a liability determi- Charged to other comprehensive income 594,708 0 0 594,708 ned in accordance with the Corporate Income Tax Act. Credited to other comprehensive income (118,297) 0 0 (118,297)

As at 31 December 2009 35,769,095 411,641 606,588 36,787,324

New acquisitions as a result of merger 0 14,334 109,897 124,231

Changes in deferred taxes of the Petrol Group Charged/(credited) to the income statement 409,227 33,985 584,947 1,028,159

Deferred tax assets Charged to other comprehensive income 65,389 0 0 65,389

Allowan- Credited to other comprehensive income (730,880) 0 0 (730,880) ce for Invest- Provisi- receiva- Invento- As at 31 December 2010 35,512,831 459,960 1,301,432 37,274,223 (in EUR) ments ons bles ries Other Total

As at 1 January 2009 31,697,452 559,892 169,004 95,185 13,660 32,535,192 Deferred tax liabilities Charged/(credited) to the income statement 23,002 57,357 1,794,404 (10,803) 30,751 1,894,711

Charged/(credited) to other comprehensive income 476,411 0 0 0 0 476,411 (in EUR) Investments Total

Foreign exchange differences 0 0 5,441 0 (409) 5,032 As at 1 January 2009 24,438,059 24,438,059

As at 31 December 2009 32,196,865 617,249 1,968,849 84,382 44,002 34,911,346 Charged to other comprehensive income (94,667) (94,667)

Charged/(credited) to the income statement 457,966 14,084 184,677 17,088 (109,129) 564,686 Credited to other comprehensive income 1,441,447 1,441,447

Charged/(credited) to other comprehensive income (410,482) 0 0 0 0 (410,482) As at 31 December 2009 25,784,839 25,784,839

New acquisitions as a result of business combination 0 0 0 0 21,033 21,033 Charged to other comprehensive income (736,990) (736,990)

Foreign exchange differences 0 0 (7,095) 0 (5,408) (12,503) Credited to other comprehensive income 161,400 161,400

As at 31 December 2010 32,244,349 631,333 2,146,431 101,470 (49,502) 35,074,080 As at 31 December 2010 25,209,249 25,209,249 WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 144 Annual Report Petrol 2010 145

6.13 Earnings per share 6.15 Intangible assets

The Petrol Group Petrol d.d. 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER Intangible assets of the Petrol Group 2010 2009 2010 2009

Net profit (in EUR) 32,904,210 10,425,564 37,946,402 10,661,802 Ongoing (in EUR) Software Concessions Goodwill investments Total Number of shares issued 2,086,301 2,086,301 2,086,301 2,086,301 Cost Number of own shares at the beginning of the year 24,703 24,703 24,703 24,703 As at 1 January 2009 4,232,206 8,376,033 18,835,789 230,660 31,674,688 Number of own shares at the end of the year 24,703 24,703 24,703 24,703 New acquisitions 0 0 0 1,279,162 1,279,162 Weighted average number of ordinary shares issued 2,061,598 2,061,598 2,061,598 2,061,598 Disposals/impairments (34,925) (40,236) (4,724,483) 0 (4,799,644) Diluted average number of ordinary shares 2,061,598 2,061,598 2,061,598 2,061,598 Transfer from ongoing investments 681,369 741,547 0 (1,422,916) 0 Basic and diluted earnings per share (in EUR/share) 15.96 5.06 18.41 5.17 Translation differences 713 7,750 0 269 8,732

As at 31 December 2009 4,879,363 9,085,094 14,111,306 87,175 28,162,938

Basic earnings per share are calculated by dividing the owners’ Petrol d.d., Ljubljana Accumulated amortisation net profit by the weighted average number of ordinary shares, Net change in the value of investments in associates and jointly As at 1 January 2009 (3,045,672) (1,825,297) 0 0 (4,870,969) excluding ordinary shares owned by the Company. The Group controlled entities decreased by EUR 1,602,913 and rose by the Amortisation (532,257) (339,189) 0 0 (871,446) and the Company have no potential dilutive ordinary shares, so deferred tax effect of EUR 320,582. The change represents a the basic and diluted earnings per share are identical. net decrease in the value of investments in associates and join- Disposals 34,925 9,353 0 0 44,278 tly controlled entities due to the valuation at fair value. Translation differences (316) (2,193) 0 0 (2,509)

As at 31 December 2009 (3,543,320) (2,157,326) 0 0 (5,700,646) Net gain on available-for-sale financial assets grew by EUR 6.14 Changes Net carrying amount as at 1 January 2009 1,186,534 6,550,736 18,835,789 230,660 26,803,719 68,522 and was reduced by the effect of deferred taxes of EUR Net carrying amount as at 31 December in comprehensive income 13,704. The change reflects the elimination of available-for-sale 2009 1,336,043 6,927,768 14,111,306 87,175 22,462,292 financial assets, which is why the fair value reserve as at 31 De- The Petrol Group cember 2010 equalled zero.

Net gain on available-for-sale financial assets grew by EUR Ongoing 68,522 and was reduced by the effect of deferred taxes of EUR Total net change in the value of investments in associates and (IN EUR) Software Concessions Goodwill investments Total

13,704. The change reflects the elimination of available-for-sale jointly controlled entities and net gain on available-for-sale fi- Cost financial assets, which is why the fair value reserve as at 31 De- nancial assets decrease the fair value reserve and revaluation As at 1 January 2010 4,879,363 9,085,094 14,111,306 87,175 28,162,938 cember 2010 equalled zero. reserve by EUR 1,227,513. New acquisitions as a result of business combinations 667 6,023 0 0 6,689 Attribution of changes in the equity of associates dropped by The net effective portion of changes in the fair value of cash New acquisitions 0 0 1,064,458 839,790 1,904,248 EUR 226,406 and rose by the deferred tax effect amounting to flow variability hedging instrument grew by EUR 1,983,896 and EUR 45,281. The change is due to the attribution of changes in was reduced by the effect of deferred taxes of EUR 396,779. Disposals (7,220) (31,378) 0 0 (38,598) the equity of associates under the equity method, resulting in The change represents effective interest rate swap hedging Transfer from ongoing investments 690,956 112,198 0 (803,154) 0 lower revaluation reserve. and increases the hedging reserve. Translation differences (2,200) (21,435) 0 (640) (24,276)

As at 31 December 2010 5,561,566 9,150,501 15,175,764 123,170 30,011,001 The net effective portion of changes in the fair value of cash Accumulated amortisation flow variability hedging instrument grew by EUR 1,983,896 and was reduced by the effect of deferred taxes of EUR 396,779. As at 1 January 2010 (3,543,320) (2,157,326) 0 0 (5,700,646) The change represents effective interest rate swap hedging Amortisation (562,045) (369,830) 0 0 (931,876) and increases the hedging reserve. Disposals 6,906 127 0 0 7,033

Translation differences 1,559 7,253 0 0 8,812

As at 31 December 2010 (4,096,899) (2,519,776) 0 0 (6,616,676)

Net carrying amount as at 1 January 2010 1,336,043 6,927,768 14,111,306 87,175 22,462,292 Net carrying amount as at 31 December 2010 1,464,666 6,630,725 15,175,764 123,170 23,394,325

All intangible assets are owned by the Group and are unencum- bered. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 146 Annual Report Petrol 2010 147

Goodwill The recoverable amount of investments corresponding to their Intangible assets of Petrol d.d., Ljubljana Intangible assets of the Group as at 31 December 2010 include value in use was estimated using the method of the present va- goodwill arising from business combinations involving the fol- lue of expected free cash flows less debt arising from the interest Ongoing (in EUR) Software Concessions investments Total lowing companies: in the said companies. Because Petrol Toplarna Hrastnik d.o.o. • Euro - Petrol d.o.o., totalling EUR 13,151,422, was merged into Petrol Energetika d.o.o. on 1 January 2009, the Cost • Petrol Toplarna Hrastnik d.o.o., totalling EUR 704,068, goodwill was tested at the level of the cash-generating unit within As at 1 January 2009 3,881,519 3,508,883 202,658 7,593,060 • Rodgas AD, totalling EUR 255,816, Petrol Energetika d.o.o. which is directly connected with the ab- New acquisitions 0 0 1,082,128 1,082,128 • Petrol - Jadranplin d.o.o., totalling EUR 789,404, sorption of Petrol Toplarna Hrastnik d.o.o. All assumptions used Transfer from ongoing investments 563,038 701,263 (1,264,301) 0 • Petrol - Butan d.o.o., totalling EUR 275,054. in the calculation of net cash flows are based on experience with As at 31 December 2009 4,444,557 4,210,146 20,485 8,675,188 the companies’ previous operations and reasonably expected The increase in goodwill in 2010 is the result of a business com- operations in the future. Valuation models take into account the Accumulated amortisation bination involving the companies Petrol - Jadranplin d.o.o. and required rates of return ranging from 8.6% to 11.3%. Relevant As at 1 January 2009 (2,814,968) (878,086) 0 (3,693,054)

Petrol - Butan d.o.o. as shown in note 6.1. annual growth rates for remaining free cash flows (the residual Amortisation (459,927) (162,982) 0 (622,909) value) range from 0.05% to 3%. As at 31 December 2009 (3,274,895) (1,041,068) 0 (4,315,963) On 31 December 2010, goodwill was tested for impairment, but Net carrying amount as at 1 January 2009 1,066,551 2,630,797 202,658 3,900,006 the Group did not identify any indications of impairment. Based Other intangible assets of the Group on the testing performed, the management estimates that the As a result of business combinations involving Petrol - Butan Net carrying amount as at 31 December 2009 1,169,662 3,169,078 20,485 4,359,225 recoverable amount of investments in the interests of the abo- d.o.o., Petrol - Jadranplin d.o.o. and Ogrevanje Piran d.o.o., the ve companies was higher as at 31 December 2010 than their Group acquired in 2010 intangible assets with a net carrying Ongoing cost at the time of business combination, which means that go- amount of EUR 6,689 as at 31 December 2010. More information (in EUR) Software Concessions investments Total odwill arising from business combinations does not need not about business combinations is provided in note 6.1. Cost be impaired. As at 1 January 2010 4,444,557 4,210,146 20,485 8,675,188 Overview of items (other than goodwill) exceeding 5% of the net New acquisitions as a result of merger 0 318,268 0 318,268 carrying amount as at 31 December 2010 (in EUR): New acquisitions 0 0 673,595 673,595

The Petrol Group Transfer from ongoing investments 676,080 0 (676,080) 0

(in EUR) 31 DECEMBER 2010 31 DECEMBER 2009 As at 31 December 2010 5,120,637 4,528,414 18,000 9,667,051

Right to use the gas network in the municipality of Domžale 1,302,871 1,380,654 Accumulated amortisation Right to use the land along the Desinec motorway (Croatia) 1,296,560 1,391,268 As at 1 January 2010 (3,274,895) (1,041,068) 0 (4,315,963)

New acquisitions as a result of merger 0 (73,200) 0 (73,200)

Amortisation (501,246) (180,606) 0 (681,852)

Disposals 0 0 0 0

As at 31 December 2010 (3,776,141) (1,294,874) 0 (5,071,015)

Net carrying amount as at 1 January 2010 1,169,662 3,169,078 20,485 4,359,225

Net carrying amount as at 31 December 2010 1,344,496 3,233,540 18,000 4,596,036

All intangible assets are owned by group companies and are unencumbered.

As a result of the absorption of Petrol Plin d.o.o., the Company Overview of items exceeding 5% of the net carrying amount as acquired in 2010 intangible assets with a net carrying amount of at 31 December 2010 (in EUR): EUR 245,068 as at 31 December 2010. More information about the absorption of Petrol Plin d.o.o. is provided in note 6.1.

Petrol d.d. (in EUR) 31 DECEMBER 2010 31 DECEMBER 2009 Right to manage the gas network in the municipality of Domžale 1,302,871 1,380,654 Right to manage the waste treatment plant in the municipality of Murska Sobota 1,047,216 1,109,788 WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 148 Annual Report Petrol 2010 149

6.16 Property, plant and equipment

Property, plant and equipment of the Petrol Group

Ongoing Ongoing (IN EUR) Land buildiNgs Plant Equipment investments Total (IN EUR) Land buildings Plant Equipment investments Total

Cost Foreign exchange differences 0 669,577 0 227,640 0 897,217

As at 1 January 2009 171.079.510 502.666.179 17.837.533 146.823.789 41.770.729 880.177.740 As at 31 December 2010 0 (244,588,795) (12,241,499) (110,233,801) 0 (367,064,095)

New acquisitions 0 0 0 4,753 35,582,068 35,586,821 Net carrying amount as at 1 January 2010 173,944,220 304,326,817 10,216,604 38,503,205 27,764,401 554,755,247 Disposals/impairments (125,376) (1,900,559) (948,331) (9,425,631) (992,047) (13,391,944) Net carrying amount as at 31 Transfer from ongoing investments 3,205,516 30,453,778 5,065,058 9,264,164 (47,988,516) 0 December 2010 182,678,251 301,195,146 12,403,476 37,323,365 39,761,397 573,361,635 Transfer to investment property (329,196) (1,652,842) 0 0 0 (1,982,038)

Transfer from investment property 0 271,671 0 0 0 271,671

Foreign exchange differences 113,766 (373,078) 0 44,574 (607,833) (822,571)

As at 31 December 2009 173,944,220 529,465,149 21,954,260 146,711,649 27,764,401 899,839,679

Accumulated depreciation Items of property, plant and equipment pledged as security carrying amount of EUR 6,179,367 as at 31 December 2010. More The Group’s items of property, plant and equipment are information about business combinations is provided in note 6.1. As at 1 January 2009 0 (206,223,541) (11,508,992) (103,267,739) 0 (321,000,272) unencumbered, except for some assets acquired through Depreciation 0 (20,544,942) (1,176,460) (10,850,969) 0 (32,572,371) acquisitions of other companies. On 31 December 2010, the cost When testing its property, plant and equipment items for Disposals 0 802,241 947,798 5,932,517 0 7,682,556 of assets pledged as security stood at EUR 21,200,050, with their impairment, the Group determined that the carrying amount Transfer to investment property 0 805,389 0 0 0 805,389 net carrying amount totalling EUR 16,453,131. These assets are of some of its property as at 31 December 2010 exceeded their Transfer from investment property 0 (179,803) 0 0 0 (179,803) either pledged against mortgage or held under finance lease. recoverable amount. Based on the assessment of their fair value,

Foreign exchange differences 0 202,324 (2) (22,253) 0 180,069 the Group impaired the value of items of property, plant and Assets held under finance lease equipment by a total of EUR 4,296,035 in 2010. The assessment As at 31 December 2009 0 (225,138,332) (11,737,656) (108,208,444) 0 (345,084,432) On 31 December 2010, the cost of equipment held under finance of the properties' fair value took into account the realisable Net carrying amount as at 1 lease stood at EUR 4,288,167, with its net carrying amount market value pertaining to the disposal of buildings as at 31 January 2009 171,079,510 296,442,638 6,328,541 43,556,050 41,770,729 559,177,468 totalling EUR 1,898,026. The cost of property held under finance December 2010, on the assumption of optimal use and taking into Net carrying amount as at 31 December 2009 173,944,220 304,326,817 10,216,604 38,503,205 27,764,401 554,755,247 lease stood at EUR 9,073,928 as at 31 December 2010, with its account the property market situation on the date of appraisal. net carrying amount totalling EUR 7,547,984. Overview of groups of investments in property, plant and Ongoing (IN EUR) Land buildings Plant Equipment investments Total Changes in 2010 equipment in 2010 exceeding EUR 1,250,000 As a result of business combinations involving Petrol - Butan d.o.o., Cost Petrol - Jadranplin d.o.o. and Ogrevanje Piran d.o.o., the Group (IN EUR) 2010 As at 1 January 2010 173,944,220 529,465,149 21,954,260 146,711,649 27,764,401 899,839,679 acquired in 2010 items of property, plant and equipment with a net New service stations 16,104,539 New acquisitions as a result of business combinations 2,066,318 1,733,634 0 944,333 1,435,083 6,179,367 Acquisition of property 6,863,415

New acquisitions 0 0 0 446 55,202,565 55,203,011 Investments in fixed assets (concessions) 6,464,381

Disposals/impairments (4,348,943) (2,399,200) (956,042) (8,664,383) (987,836) (17,356,404) Acquisition of Ihan biogas plant assets 4,585,000

Transfer from ongoing investments 11,450,560 18,111,303 3,646,757 8,695,826 (41,904,446) 0 Investments in efficient energy consumption projects 1,490,987 Transfer to investment property (3,772) (21,008) 0 0 0 (24,780) Setting up of solar power plants 1,325,161 Transfer from investment property 434,625 978,525 0 241,435 (465,924) 1,188,661

Foreign exchange differences (864,757) (2,084,462) 0 (372,139) (1,282,447) (4,603,805)

As at 31 December 2010 182,678,251 545,783,941 24,644,975 147,557,166 39,761,397 940,425,730

Accumulated depreciation

As at 1 January 2010 0 (225,138,332) (11,737,656) (108,208,444) 0 (345,084,432)

Depreciation 0 (20,973,934) (1,459,034) (10,306,562) 0 (32,739,530)

Disposals 0 1,390,279 955,191 8,053,565 0 10,399,034

Transfer to investment property 0 369 0 0 0 369

Transfer from investment property 0 (536,754) 0 0 0 (536,754) WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 150 Annual Report Petrol 2010 151

Property, plant and equipment of Petrol d.d., Ljubljana Items of property, plant and equipment pledged as security recoverable amount. Based on the assessment of their fair All of the Company’s items of property, plant and equipment are value, the Company impaired the value of items of property, Ongoing unencumbered. None of the Company’s items of property, plant plant and equipment by a total of EUR 2,543,286 in 2010. The (IN EUR) Land buildings Equipment investments Total and equipment are held under finance lease. assessment of the properties' fair value took into account the Cost realisable market value pertaining to the disposal of property As at 1 January 2009 90,400,359 349,760,023 115,932,401 18,032,754 574,125,537 Changes in 2010 as at 31 December 2010, on the assumption of optimal use and New acquisitions 0 0 0 11,737,088 11,737,088 In 2010, as a result of the absorption of Petrol Plin d.o.o., the taking into account the property market situation on the date of Company acquired items of property, plant and equipment with appraisal. Disposals/impairments (62,346) (1,595,473) (7,602,517) (990,076) (10,250,412) a net carrying amount of EUR 32,284,732 as at 31 December Transfer from ongoing investments 401,960 12,758,148 6,263,963 (19,424,071) 0 2010. More information about the absorption of Petrol Plin d.o.o. Overview of groups of investments in property, plant and Transfer to investment property (236,141) (1,274,507) 0 0 (1,510,648) is provided in note 6.1. equipment exceeding EUR 1,250,000 Transfer from investment property 0 271,671 0 0 271,671 (IN EUR) 2010 As at 31 December 2009 90,503,832 359,919,862 114,593,847 9,355,695 574,373,236 When testing its property, plant and equipment items for impairment, the Company determined that the carrying amount Acquisition of property 6,863,415 Accumulated depreciation of some of its property as at 31 December 2010 exceeded their Investments in infrastructure (concessions) 5,908,941 As at 1 January 2009 0 (180,357,052) (92,398,534) 0 (272,755,586) New service stations 4,814,265 Depreciation 0 (14,416,868) (6,253,004) 0 (20,669,872) Acquisition of Ihan biogas plant assets 4,585,000 Disposals 0 673,910 4,567,645 0 5,241,555 Setting up of solar power plants 1,325,161 Transfer to investment property 0 769,351 0 0 769,351

Transfer from investment property 0 (179,803) 0 0 (179,803)

As at 31 December 2009 0 (193,510,462) (94,083,893) 0 (287,594,355) Net carrying amount as at 1 January 2009 90,400,359 169,402,971 23,533,867 18,032,754 301,369,951 Net carrying amount as at 31 December 2009 90,503,832 166,409,400 20,509,954 9,355,695 286,778,881

Ongoing (IN EUR) Land buildings Equipment investments Total

Cost

As at 1 January 2010 90,503,832 359,919,862 114,593,847 9,355,695 574,373,236

New acquisitions as a result of merger 438,047 30,709,414 3,316,304 4,390,813 38,854,578

New acquisitions 0 0 0 33,697,804 33,697,804

Disposals/impairments (3,232,232) (1,520,242) (7,749,730) (7,125) (12,509,329)

Transfer from ongoing investments 7,300,888 11,127,380 6,403,716 (24,831,984) 0

Transfer to investment property (3,772) (21,008) 0 0 (24,780)

Transfer from investment property 439,905 848,286 0 0 1,288,191

As at 31 December 2010 95,446,668 401,063,692 116,564,137 22,605,203 635,679,700

Accumulated depreciation

As at 1 January 2010 0 (193,510,462) (94,083,893) 0 (287,594,355)

New acquisitions as a result of merger 0 (5,697,965) (871,881) 0 (6,569,846)

Depreciation 0 (14,892,820) (6,005,428) 0 (20,898,248)

Disposals 0 1,349,617 7,514,472 0 8,864,089

Transfer to investment property 0 369 0 0 369

Transfer from investment property 0 (536,754) 0 0 (536,754)

As at 31 December 2010 0 (213,288,015) (93,446,730) 0 (306,734,745) Net carrying amount as at 1 January 2010 90,503,832 166,409,400 20,509,954 9,355,695 286,778,881 Net carrying amount as at 31 December 2010 95,446,668 187,775,677 23,117,407 22,605,203 328,944,955 WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 152 Annual Report Petrol 2010 153

Environmental fixed assets of the Group/Company 6.17 Investment property The Company’s property, plant and equipment items include environmental fixed assets acquired under a scheme for Investment property comprises buildings (storage facilities, car- the creation and use of long-term deferred revenue for the -washes, bars) being leased out by the Group/Company. purpose of environmental rehabilitation. Environmental fixed assets were approved for the purpose of the environmental The Petrol Group Petrol d.d. rehabilitation of service stations, road tankers and storage Investment property Investment property facilities, as well as for the cleanup of the bitumen dump at Cost Pesniški Dvor. The note relating to environmental fixed assets As at 1 January 2009 25,891,264 26,871,661 should be read in conjunction with long-term deferred revenue from environmental assets presented in note 6.32 Long-term Transfer to property, plant and equipment (271,671) 1,510,648 deferred revenue. Transfer from property, plant and equipment 1,982,038 (271,671)

As at 31 December 2009 27,601,631 28,110,638

Accumulated depreciation

As at 1 January 2009 (10,377,438) (10,868,621)

Depreciation (858,980) (891,271)

Transfer to property, plant and equipment 179,803 179,803 Changes in the Group’s/Company’s environmental fixed assets Transfer from property, plant and equipment (805,389) (769,351) As at 31 December 2009 (11,862,004) (12,349,440)

Investment Net carrying amount as at 1 January 2009 15,513,826 16,003,040 (in EUR) buildings Equipment property Total Net carrying amount as at 31 December 2009 15,739,627 15,761,198 Cost

As at 1 January 2009 32,949,690 12,947,664 83,805 45,981,159

Disposals (248,990) (184,148) 0 (433,138) Investment property Investment property

As at 31 December 2009 32,700,700 12,763,516 83,805 45,548,021 Cost

Accumulated depreciation As at 1 January 2010 27,601,631 28,110,638

As at 1 January 2009 (18,416,629) (12,947,664) (59,481) (31,423,774) Transfer to property, plant and equipment (1,188,661) (1,288,191)

Depreciation (1,625,409) 0 (3,632) (1,629,041) Transfer from property, plant and equipment 24,780 24,780

Disposals 147,089 184,148 0 331,237 As at 31 December 2010 26,437,750 26,847,227

As at 31 December 2009 (19,894,949) (12,763,516) (63,113) (32,721,578) Accumulated depreciation

Net carrying amount as at 1 January 2009 14,533,061 0 24,324 14,557,385 As at 1 January 2010 (11,862,004) (12,349,440)

Net carrying amount as at 31 December 2009 12,805,751 0 20,692 12,826,443 Depreciation (818,772) (847,300)

Transfer to property, plant and equipment 536,754 536,754

Transfer from property, plant and equipment (369) (369) Investment (in EUR) buildings Equipment property Total As at 31 December 2010 (12,144,391) (12,660,355)

Cost Net carrying amount as at 1 January 2010 15,739,627 15,761,198

As at 1 January 2010 32,700,700 12,763,516 83,805 45,548,021 Net carrying amount as at 31 December 2010 14,293,359 14,186,872 Disposals (58,730) (235,109) 0 (293,839)

As at 31 December 2010 32,641,970 12,528,407 83,805 45,254,182 The Petrol Group Petrol d.d., Ljubljana Accumulated depreciation In 2010 revenue generated by the Group from investment pro- In 2010 revenue generated by the Company from investment As at 1 January 2010 (19,894,949) (12,763,516) (63,113) (32,721,578) perty totalled EUR 2,429,530 (in 2009: EUR 2,423,892). The property totalled EUR 2,554,900 (in 2009: EUR 2,304,126). The Depreciation (1,616,799) 0 (3,632) (1,620,431) Group estimates that the fair value of investment property as at Company estimates that the fair value of investment property Disposals 48,452 235,109 0 283,561 31 December 2010 was EUR 31,585,424. The fair value is estima- as at 31 December 2010 was EUR 32,636,475. The fair value is

As at 31 December 2010 (21,463,296) (12,528,407) (66,745) (34,058,448) ted based on the method of capitalising normalised cash flows, estimated based on the method of capitalising normalised cash with cash flows chiefly comprising lease payments for leased in- flows, with cash flows chiefly comprising lease payments for le- Net carrying amount as at 1 January 2010 12,805,751 0 20,692 12,826,443 vestment property. Projected growth and discount rates equal ased investment property. Projected growth and discount rates Net carrying amount as at 31 December 2010 11,178,674 0 17,060 11,195,734 0.05% and 8.79%, respectively. equal 0.05% and 8.60%, respectively. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 154 Annual Report Petrol 2010 155

6.18 Investments in subsidiaries d.o.o. from investments in associates to investments in subsi- Information about subsidiaries as at 31 December 2010 diaries, totalling EUR 2,200,305, The Petrol Group • the acquisition of Petrol – Butan d.o.o., totalling EUR Ownership and voting rights Investments in subsidiaries are eliminated from the Group’s fi- 979,049, Address of the 31 DECEMBER 31 DECEMBER nancial statements during consolidation. • establishment of Petrol – Energetika DOOEL. Name of the subsidiary subsidiary Business activities 2010 2009 Dunajska c. 50, Ljubljana, Petrol d.d., Ljubljana On 30 June 2010, Petrol d.d., Ljubljana absorbed the company Petrol Maloprodaja Slovenija, d.o.o. Slovenia Retail sale of motor fuel 100% 100% The 2010 increase in investments in subsidiaries relates to: Petrol Plin d.o.o. and, as a result, eliminated from investments Zaloška 259, Ljubljana Polje, • the acquisition of Petrol - Jadranplin d.o.o., totalling in subsidiaries the investment in Petrol Plin d.o.o. totalling Petrol Skladiščenje, d.o.o. Slovenia Storage services 100% 100% EUR 1,858,711, EUR 18,174,723. More information about the absorption of Pe- Zaloška 259, Ljubljana Polje, • the acquisition of a 60-percent interest in Ogrevanje Piran trol Plin d.o.o. is provided in note 6.1. Petrol Tehnologija, d.o.o. Slovenia Maintenance services 100% 100% d.o.o. and transfer of a 40-percent interest in Ogrevanje Piran Koroška c. 14, Ravne na Petrol Energetika, d.o.o. Koroškem, Slovenia Gas and electricity distribution 99.38% 99.38% Dunajska c. 50, Ljubljana, Investigation activities and Petrol VNC, d.o.o. Slovenia security 100% 100% Changes in investments in subsidiaries Oreškovićeva 6H, 10010 Zagreb, Sale and marketing of Petrol Hrvatska d.o.o.** Croatia petroleum products 100% 100% Petrol d.d. Grbavička 4/4, 71000 Sarajevo, Sale and marketing of (in EUR) 31 DECEMBER 2010 31 DECEMBER 2009 Petrol BH Oil Company, d.o.o. Bosnia and Herzegovina petroleum products 100% 100% As at 1 January 213,663,092 208,650,219 Ulica Španskih boraca br. 24v, Sale and marketing of New acquisitions 5,043,065 9,930,000 Petrol d.o.o. Beograd 11077 Novi Beograd, Serbia petroleum products 100% 100% Impairments 0 (4,917,127) Elisabethstrasse 10 Top 4 u.5, Trading in oil, petroleum Petrol-Trade, H.m.b.H. 1010 Vienna, Austria products and chemical products 100% 100% Disposals (18,174,723) 0 Ariadne House, Office 52, 333 As at 31 December 200,531,434 213,663,092 28th October Street, Limassol, Trading in oil and petroleum Cypet-Trade, Ltd.* Cyprus products 100% 100% Ariadne House, Office 52, 333 28th October Street, Limassol, Trading in oil and petroleum Balance of investments in subsidiaries Cypet Oils, Ltd. Cyprus products 100% 100% Ticanova 31, 21000 Novi Sad, Petrol d.d. Petrol Gas Group d.o.o. Serbia Gas distribution 100% 100% (in EUR) 31 DECEMBER 2010 31 DECEMBER 2009 Maršala Tita 61, 24300 Bačka Petrol Hrvatska d.o.o. 51,021,249 51,021,249 Rodgas AD Topola, Serbia Gas distribution 84.22% 84.22% Euro - Petrol d.o.o. 47,899,200 47,899,200 Donje polje b.b., 81250 Cetinje, Investments in petroleum Petrol - Invest d.o.o.. Montenegro activities 100% 100% Petrol BH Oil Company, d.o.o. 34,537,990 34,537,990 Martinkovac 143b, 51000 Rijeka, Trading in and transport of oil Petrol d.o.o. Beograd 16,591,792 16,591,792 Euro - Petrol d.o.o. Croatia and petroleum products 51% 51% Petrol Energetika, d.o.o. 13,538,900 13,538,900 Gaseous fuel supply, generation Petrol Maloprodaja Slovenija, d.o.o. 11,344,738 11,344,738 Liminjanska cesta 117, 6320 and distribution of steam and Petrol - Invest d.o.o. 8,230,000 8,230,000 Ogrevanje Piran d.o.o. Portorož, Slovenia heat 100% 40% Petrol Gas Group d.o.o. 4,850,000 4,850,000 Koće Popoviča 9, Divoš, 31215 Distribution of liquefied Rodgas AD 3,510,400 3,510,400 Petrol-Butan d.o.o. Ernestinovo, Croatia petroleum gas 100% - Put Bioca 15, 22000 Šibenik, Distribution of liquefied Ogrevanje Piran d.o.o. 2,200,305 0 Petrol-Jadranplin d.o.o. Croatia petroleum gas 51% - Cypet Oils, Ltd. 2,150,906 2,150,906 Belasica br. 2, 1130 Skopje, Petrol Jadranplin d.o.o. 1,858,711 0 Petrol-Energetika Dooel Skopje Republic of Macedonia Electricity trading 100% - Petrol-Butan d.o.o. 979,049 0 Petrol Skladiščenje, d.o.o. 794,951 794,951 *Cypet-Trade is fully owned by Petrol-Trade H.m.b.H. Petrol Tehnologija, d.o.o. 755,579 755,579 **The company Petrol Trgovina d.o.o., Zagreb was renamed Petrol Hrvatska d.o.o. in 2010. Petrol-Trade, H.m.b.H. 147,830 147,830 Petrol VNC, d.o.o. 114,834 114,834 Petrol-Energetika Dooel Skopje 5,000 0 Petrol Plin, d.o.o. 0 18,174,723 Total investments in subsidiaries 200,531,434 213,663,092 WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 156 Annual Report Petrol 2010 157

6.19 Investments in jointly controlled entities

The Group measures investments in jointly controlled entities using the equity method. The Company, however, treats invest- ments in jointly controlled entities as available-for-sale financial assets, meaning they are measured at fair value. More informati- on about the accounting treatment of investments in jointly con- trolled entities is given in note 3a (the Group) and note 4c (the Company).

Changes in investments in jointly controlled entities Information about jointly controlled entities as at 31 December 2010

The Petrol Group Petrol d.d. Ownership and voting rights 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER (in EUR) 2010 2009 2010 2009 Name of the jointly Address of the jointly 31 DECEMBER 31 DECEMBER controlled entity controlled entity Business activities 2010 2009 As at 1 January 15,318,725 16,587,067 61,137,000 56,098,000 Mlinska ulica 5, 9220 Lendava, Extraction of natural gas, oil and Attributed profit 2,720,246 2,481,256 0 0 Geoenergo, d.o.o. Slovenia gas condensate 50% 50%

Dividends received (3,849,709) (3,070,822) 0 0 Sermin 10/a, 6000 Koper, Storage and handling of Instalacija, d.o.o. Koper Slovenia petroleum products 49% 49% New investments 3,673,776 0 3,673,776 0 Ulica Donje polje bb, Cetinje, Disposal of investments (325,933) 0 (410,000) 0 Petrol - Bonus d.o.o. Montenegro Wholesale and retail sale of fuel 50% 50% Enhancement (creation of fair value reserve) 0 0 147,000 5,846,000 Retail sale and wholesale of Prishtina Magijstralija, Prishtina, liquid and gaseous fuel and Impairment (reversal of fair value reserve) 0 0 (1,971,000) (158,335) Petrol - Oti - Slovenija L.L.C. * Kosovo similar products 51% 51% Impairment (effect on the income statement) (1,150,357) (678,776) (1,306,776) (648,665) Petrol Slovenia Tirana Wholesale Deshmoret e 4 Shkurtit Pll.26, Whosale of liquid, gaseous and As at 31 December 16,386,748 15,318,725 61,270,000 61,137,000 Sh.A.* Tirana, Albania similar fuels 55% 55% Petrol Slovenia Tirana Distribution Deshmoret e 4 Shkurtit Pll.26, Retail sale of liquid and gaseous Sh.p.k. ** Tirana, Albania fuel 55% 55% Ulica Mirka Vadnova 3, Electricity, gas and steam Balance of investments in jointly controlled entities Soenergetika d.o.o.* 4000 Kranj, Slovenia supply 25% -

* The contract of members stipulates joint management. The Petrol Group Petrol d.d. ** Petrol Slovenia Tirana Distribution Sh.p.k. is fully owned by Petrol Slovenia Tirana Wholesale Sh.A. 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER (in EUR) 2010 2009 2010 2009

Instalacija, d.o.o., Koper 9,789,170 10,891,119 54,515,000 56,486,000 The Petrol Group Company’s investments (the valuation techniques and procedu- Petrol - Oti - Slovenija L.L.C. 5,100,000 2,823,000 5,100,000 2,823,000 In conformity with the equity method, the Group received attri- res are described below in the note pertaining to the Company), butable profit of EUR 2,720,246 in 2010. This amount is net of the Group determined that the carrying amount of certain in- Petrol Slovenia Tirana Wholesale Sh.A. 1,036,000 986,000 1,036,000 986,000 dividends on retained earnings, which stood at EUR 3,849,709. vestments measured using the equity method was higher than Petrol - Bonus d.o.o. 363,300 310,199 499,000 411,000 These items are explained in more detail in note 6.10. their estimated fair value, which is why the Group impaired the Soenergetika d.o.o. 81,023 0 90,000 0 value of the investments to their fair value. Impairment costs Geoenergo, d.o.o. 17,256 21,000 30,000 21,000 In 2010 Petrol d.d., Ljubljana increased its interest in the com- stood at EUR 1,150,357 in 2010.

Karkasa, d.o.o. 0 287,407 0 410,000 pany Petrol - Oti - Slovenija L.L.C by means of a capital increase of EUR 3,538,776. The remaining increase in investments relates The Group uses the most recent financial statements of jointly Total investments in jointly controlled entities 16,386,748 15,318,725 61,270,000 61,137,000 to an investment in the newly established company Soenergeti- controlled entities to prepare its own financial statements. But ka d.o.o. amounting to EUR 135,000. due to a rapid winding up of the reporting process within the Group it could happen that the financial statements taken into The company Karkasa, d.o.o. was liquidated in 2010, hen- account are not prepared for the period ending 31 December ce the Group reported a disposal of the investment totalling 2010. If this is the case, the Group checks whether significant di- EUR 325,933. screpancies could arise between these financial statements and the financial statements as at 31 December 2010. If major chan- Based on the estimated fair values of jointly controlled entiti- ges are expected, the effect of those changes is included as an es determined for the purpose of measuring the value of the estimate in the financial statements of a jointly controlled entity. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 158 Annual Report Petrol 2010 159

Significant amounts from the financial statements of jointly controlled entities

Year 2009

Net profit or Description of assumptions and investment valuation • Present value of expected free cash flows less debt, which loss attribu- Liabilities Net profit or table to the techniques assumes that a company will continue to operate over a com- (in EUR) Assets (debt) Revenue loss Petrol Group Independent assessment of the fair value of investments in jo- paratively long period of time. Cash returns to owners and Geoenergo, d.o.o. 196,784 57,741 37,723 (7,376) (3,688) intly controlled entities was prepared on the going concern creditors are estimated based on an analysis of previous ope-

Karkasa, d.o.o. 696,935 133,045 838,815 79,360 39,680 assumption, taking into account all information about the opera- rations and estimated future business opportunities. The re- tion of the companies available at the time of the valuation. Due turns are discounted using an appropriate arithmetic mean of Instalacija, d.o.o. Koper 41,564,140 19,337,363 14,065,488 5,238,162 2,566,699 to the nature of the companies’ business, no observable mar- the required rates of return on debt capital and equity capital. Petrol - Bonus d.o.o. 14,394,046 13,637,528 6,957,202 (231,602) (115,801) ket data exists. The valuation thus mainly relies on information Petrol Slovenia Tirana Wholesale Sh.A. 2,094,834 51,445 52,932 30,309 16,670 about the companies’ previous operations and assumptions re- The required rate of return was adjusted to specific circumstan- Petrol - OTI - Slovenija L.L.C. 8,973,328 2,423,714 5,587,570 (82,562) (42,107) garding their future operations. The valuation takes into account ces of individual companies, the interest in which was subject to the perspective of market participants. Valuation techniques we- valuation, and their business environment. The required rates Year 2010 re tailored to the nature of the companies’ business and availa- of return for the companies ranged from 8.5% to 19.3% (2009: Net profit or ble data. The following valuation techniques were used: 8.6% to 16.6%). In the valuation of the investments, discounts re- loss attribu- Liabilities Net profit or table to the flecting the lack of liquidity and ranging from 10% to 30% (2009: (in EUR) Assets (debt) Revenue loss Petrol Group • Capitalisation of standardised free cash flows, which is a 5% to 30%) were taken into account and adjusted to the nature Geoenergo, d.o.o. 205,557 74,001 52,596 (7,4 87) (3,743) shortened variant of the method of calculating the present of the companies’ business. As for the techniques used, the an-

Karkasa, d.o.o. * 590,320 1,669 665,235 24,761 12,381 value of expected returns and uses a single return forecast nual growth rates for remaining free cash flows (the residual va- and an expected future growth rate of such a return inste- lue) taken into account ranged from 2% to 3% (2009: 1% to 3%). Instalacija, d.o.o. Koper 39,307,663 19,329,761 14,257,012 5,607,673 2,747,760 ad of a longer time series of forecasts of the rate of return to Petrol - Bonus d.o.o. 15,608,947 14,882,108 19,607,149 (29,401) (14,701) owners. The technique was selected due to relatively stable As part of the valuation, both optimistic and pessimistic scena- Petrol Slovenia Tirana Wholesale Sh.A. 2,147,986 168,532 116,664 95,840 47,495 previous operations of the companies and relatively stable rios were prepared. The fair value equals the arithmetic mean of Petrol - OTI - Slovenija L.L.C. 14,385,303 1,452,391 6,807,757 (122,587) (62,519) operating forecasts. the estimated value of investments under both scenarios. Soenergetika d.o.o. 347,107 23,013 177 (215,906) (53,976)

*The company Karkasa d.o.o. was liquidated in 2010.

Petrol d.d., Ljubljana rying amount, which led to an enhancement of the investments' value and a corresponding increase in the fair value reserve. New investments and disposals In 2010 the Company increased its interest in the company The techniques selected to assess the fair value and the fair value Petrol - Oti - Slovenija L.L.C by means of a capital increase of assessment effects as at 31 December 2010 are shown in the table EUR 3,538,776. The remaining increase in investments relates to below: the investment in the newly established company Soenergetika d.o.o. amounting to EUR 135,000. Carrying Carrying Valuation effect amount as at amount as at Fair value Valuation teValuation 31 December Changes in 31 December as at 31 Fair value Profit or loss The company Karkasa, d.o.o. was liquidated in 2010, hence (in EUR) technique 2009 2010* 2010 December 2010 Difference reserve for the period the Company reported a disposal of the investment totalling Present value of expected free EUR 410,000. Instalacija, d.o.o., Koper cash flows 56,486,000 0 56,486,000 54,515,000 (1,971,000) (1,971,000) 0 Karkasa, d.o.o. - 410,000 (410,000) 0 - - - - Fair value measurement effect Capitalisation of standardised The Company assessed the fair value of investments in jointly Geoenergo, d.o.o. cash flows 21,000 0 21,000 30,000 9,000 9,000 0 controlled entities as at 31 December 2010. Based on a valuation, Present value of expected free the Company determined that the fair value of investments in the Petrol-Bonus d.o.o. cash flows 411,000 0 411,000 499,000 88,000 88,000 0 companies Petrol – Oti - Slovenija L.L.C., Instalacija d.o.o., Koper Present value of expected free and Soenergetika d.o.o. was lower than their carrying amount, whi- Petrol - Oti - Slovenija L.L.C. cash flows 2,823,000 3,538,776 6,361,776 5,100,000 (1,261,776) 0 (1,261,776) ch is why it impaired the value of these investments to their esti- Soenergetika d.o.o. ** 0 135,000 135,000 90,000 (45,000) 0 (45,000) mated fair value. The effect of the impairment is presented either Petrol Slovenia Tirana Wholesale as a decrease in the existing fair value reserve or an expense for Sh.A. ** 986,000 0 986,000 1,036,000 50,000 50,000 0 the period. The valuation also revealed that the fair value of invest- Total 61,137,000 3,263,776 64,400,776 61,270,000 (3,130,776) (1,824,000) (1,306,776) ments in the companies Geoenergo d.o.o., Petrol-Bonus d.o.o. and * Changes in 2010 are explained in detail in the section concerned with new investments and disposals. Petrol Slovenia Tirana Wholesale Sh.A was higher than their car- ** The fair value of the investment is the same as the carrying amount of the interest in the company's equity. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 160 Annual Report Petrol 2010 161

6.20 Investments in associates

The Group measures investments in associates using the equity method. The Company, however, treats the investments in as- sociates as available-for-sale financial assets, meaning they are measured at fair value. More information about the accounting treatment of investments in associates is given in note 3a (the Group) and note 4c (the Company).

Changes in investments in associates Information about associates as at 31 December 2010

The Petrol Group Petrol d.d. Ownership and voting rights 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER (in EUR) 2010 2009 2010 2009 31 DECEMBER 31 DECEMBER Name of the associate Address of the associate Business activities 2010 2009 As at 1 January 121,282,983 128,782,444 155,070,965 170,576,931 Cesta Ljubljanske brigade 11. Attributed profit/losses 3,062,799 (6,164,770) 0 0 Geoplin. d.o.o. 1000 Ljubljana. Slovenia Sale and transport of natural gas 31.98% 31.98%

Dividends received (3,919,500) (5,387,386) 0 0 Cesta Zore Perello - Godina 2. Management of Istrabenz Group Istrabenz d.d. 6000 Koper. Slovenia investments and other investments 32.63% 32.63% New investments 0 5,506,766 0 5,506,766 Construction and operation of Disposal of investments (664,560) 0 (696,000) 0 Dupleška 330. 2000 Maribor. industrial and municipal water Attributed changes in the equity of associates (226,404) 132,440 0 0 Aquasystems. d.o.o. Slovenia treatment plants 26% 26% Preparation of food and beverages. Enhancement (creation of fair value reserve) 0 0 1,935,035 1,361,234 Notranjska c. 71. 1370 Logatec. sale of merchandise and other Impairment (reversal of fair value reserve) 0 0 (1,450,000) (315,001) Marche Gostinstvo. d.o.o. Slovenia services 25% 25%

Impairment (effect on the income statement) 0 (1,586,510) 0 (22,058,965) Bio goriva d.o.o Grajski trg 21. 2327 Rače. Slovenia Manufacturing. trading and services 25% 25% As at 31 December 119,535,318 121,282,983 154,860,000 155,070,965

Balance of investments in associates

The Petrol Group Petrol d.d. 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER (in EUR) 2010 2009 2010 2009 The Petrol Group Geoplin, d.o.o., Ljubljana 95,114,507 96,197,956 128,000,000 129,317,000 The Group did not increase its existing investments or make new In accordance with the equity method, the Group recognised its Istrabenz d.d. 21,973,965 21,973,965 23,249,000 21,973,965 investments in associates in 2010. interest in the equity of the associate Geoplin, d.o.o., which sto-

Aquasystems, d.o.o. 1,989,900 1,988,032 2,303,000 2,436,000 od at EUR 226,404. In conformity with the equity method, the Petrol Group attribu- Marche Gostinstvo, d.o.o. 456,946 677,030 1,308,000 898,000 ted a corresponding share of 2010 profits or losses to its invest- The Petrol Group uses the most recent financial statements of Ogrevanje Piran, d.o.o. 0 446,000 0 446,000 ments, which amounted to EUR 3,062,799. This amount is net associates to prepare its own financial statements. But due to Bio Goriva d.o.o. 0 0 0 0 of dividends, which stood at EUR 3,919,500. These items are a rapid winding up of the reporting process within the Group, it Total investments in associates 119,535,318 121,282,983 154,860,000 155,070,965 explained in more detail in note 6.10. may happen that the financial statements taken into account are not prepared for the period ending 31 December 2010. If this is Disposal of investments in 2010 relates to a decrease in the the case, the Group checks whether significant discrepancies nominal capital of the company Marche Gostinstvo d.o.o. by could arise between these financial statements and the finan- EUR 250,000. Considering that Petrol d.d., Ljubljana acquired cial statements as at 31 December 2010. If major changes are a 100-percent interest in the company Ogrevanje Piran d.o.o. expected, the effect of those changes is included as an estimate in 2010, the remaining decrease of EUR 414,559 relates to the in the financial statements of an associate. transfer of a 40-percent interest in Ogrevanje Piran to invest- ments in subsidiaries. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 162 Annual Report Petrol 2010 163

Significant amounts from the financial statements of associates Description of assumptions and investment valuation tech- no observable market data exists. The valuation thus mainly Year 2009 niques relies on information about the companies’ previous ope- • Valuation of the investment in Istrabenz d.d. rations and assumptions regarding their future operations. Net profit or loss attribu- Independent assessment of the value of the investment in Is- Valuation techniques were tailored to the nature of the com- Net profit or table to the trabenz d.d. was prepared on the basis of publicly available panies’ business and available data. The following valuation (in EUR) Assets Liabilities Revenue loss Petrol Group information about the operations of the Istrabenz Group. The techniques were used: Geoplin Group 321,460,000 52,825,000 330,585,000 28,200,000 9,017,768 valuation is based on the assumption that the market in the • Present value of expected free cash flows less debt, whi- Istrabenz Group* 938,490,518 912,970,941 461,360,649 (68,492,498) (22,349,102) shares of Istrabenz d.d. was inactive in 2010. The value was ch assumes that a company will continue to operate over a Aquasystems, d.o.o. 35,407,084 28,402,411 8,032,335 1,739,181 452,187 assessed using the net asset method. This method was se- comparatively long period of time. Cash returns to owners

Marche Gostinstvo, d.o.o. 4,049,457 1,341,341 12,653,658 268,145 67,036 lected because the parent company of the Istrabenz Group and creditors are estimated based on an analysis of previo- is essentially a holding company. To assess the final value in us operations and estimated future business opportunities. Bio goriva d.o.o. 26,412,897 23,818,023 6,845,238 (225,451) (56,363) accordance with the selected net asset method, the market The returns are discounted using an appropriate arithme- Ogrevanje Piran, d.o.o. - - - (40,000) (16,000) value of all assets is assessed first and the market value of in- tic mean of the required rates of return on debt capital and *Most recent financial statements that were publicly available before the publication of the Annual Report of the Petrol Group and Petrol d.d., Ljubljana for the year 2009 dividual liability items is then subtracted from it. The value of equity capital. were the consolidated financial statements of the Istrabenz Group as at 30/09/2009. the company’s assets broken down into investments and bu- • Valuation methods that are based on the analysis of com- Year 2010 siness activities was assessed using the method of the pre- parable companies listed on a stock exchange (the publicly sent value of expected free cash flows less debt, the method traded company method) or companies that were (recen- Net profit or loss attribu- of the present value of standardised free cash flows less debt, tly) sold or merged with other companies (the transaction Net profit or table to the the comparable company analysis as a control method, and method). (in EUR) Assets Liabilities Revenue loss Petrol Group the shortened method. Valuation techniques were tailored to Geoplin Group 370,391,000 87,564,000 385,407,000 24,792,000 7,927,961 the nature of the investments and available data. A 5% mino- The required rate of return was adjusted to specific circumstan- Istrabenz Group* 875,386,732 878,110,707 477,807,769 (3,335,173) (1,088,267) rity interest discount and a 10% lack of marketability discount ces of individual companies, the interest in which was subject to Aquasystems, d.o.o. 30,892,037 24,675,092 7,891,212 2,001,307 520,340 were also applied. As part of the valuation, both optimistic and valuation, and their business environment. The required rates

Marche Gostinstvo, d.o.o. 3,371,000 1,543,000 12,519,690 387,810 96,953 pessimistic scenarios were prepared. The fair value equals the of return for the companies ranged from 9.2% to 13.9% (2009: arithmetic mean of the estimated value of investments under 9.1% to 13.6%). In the valuation of the investments, discounts Bio goriva d.o.o. 26,005,065 23,632,035 21,039,083 (177,518) (44,379) both scenarios. reflecting the lack of marketability and ranging from 10% to 20% *Most recent financial statements that were publicly available before the publication of this report are the consolidated financial statements of the Istrabenz Group as at (2009: 10% to 20%) were taken into account and adjusted to 30/09/2010. • Valuation of other investments the nature of the companies’ business. As for the techniques Independent assessment of the fair value of investments in as- used, the annual growth rates for remaining free cash flows (the Petrol d.d., Ljubljana sociates was prepared on the going concern assumption, ta- residual value) taken into account ranged from 2% to 3% (2009: New investments and disposals her than their carrying amount, which led to an enhancement of king into account all information about the operation of the 2% to 3%). As part of the valuation, both optimistic and pessi- The Company did not increase its existing investments or make the investments' value and a corresponding increase in the fair companies that was available at the time of the valuation. mistic scenarios were prepared. The fair value equals the ari- new investments in associates in 2010. value reserve. The valuation takes into account the perspective of market thmetic mean of the estimated value of investments under both participants. Due to the nature of the companies’ business, scenarios. Disposal of investments in 2010 relates to a decrease in the The techniques selected to assess the fair value and the fair va- nominal capital of the company Marche Gostinstvo d.o.o. lue assessment effects as at 31 December 2010 are shown in the by EUR 250,000. Considering that the Company acquired a table below: 100-percent interest in the company Ogrevanje Piran d.o.o. in Carrying Carrying Valuation effect 2010, the remaining decrease of EUR 446,000 relates to the amount as at amount as at Fair value transfer of a 40-percent interest in Ogrevanje Piran to invest- 31 December Changes in 31 December as at 31 Fair value Profit or loss (in EUR) Valuation technique 2009 2010* 2010 December 2010 Difference reserve for the period ments in subsidiaries. Present value of expected free Geoplin, d.o.o., Ljubljana cash flows 129,317,000 0 129,317,000 128,000,000 (1,317,000) (1,317,000) 0 Fair value measurement effect The Company assessed the fair value of investments in as- Istrabenz d.d. Net assets 21,973,965 0 21,973,965 23,249,000 1,275,035 1,275,035 0 sociates as at 31 December 2010. Based on a valuation, the Present value of expected free Aquasystems, d.o.o. cash flows 2,436,000 0 2,436,000 2,303,000 (133,000) (133,000) 0 Company determined that the fair value of investments in the companies Geoplin d.o.o., Ljubljana and Aquasystems, d.o.o. Present value of expected free Marche Gostinstvo, d.o.o. cash flows 898,000 (250,000) 648,000 1,308,000 660,000 660,000 0 was lower than their carrying amount, which is why it impaired the value of these investments to their estimated fair value. The Ogrevanje Piran d.o.o. - 446,000 (446,000) 0 - - - - effect of the impairment is presented either as a decrease in Present value of expected free Bio goriva d.o.o. cash flows 0 0 0 0 0 0 0 the existing fair value reserve or an expense for the period. The valuation also revealed that the fair value of investments in the Total 25,753,965 (696,000) 25,057,965 26,860,000 1,802,035 1,802,035 0 companies Istrabenz d.d. and Marche Gostinstvo d.o.o. was hig- *Changes in 2010 are explained in detail in the section concerned with new investments and disposals. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 164 Annual Report Petrol 2010 165

6.21 Available-for-sale 6.22 Non-current financial receivables financial assets

Available-for-sale financial assets relate to investments in the Changes in non-current financial receivables shares and interests of companies and banks as well as to in- vestments in mutual funds and bonds. Since the majority of the The Petrol Group Petrol d.d. available-for-sale financial assets are the assets of Petrol d.d., 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER Ljubljana, a joint disclosure for the Group and the Company is (in EUR) 2010 2009 2010 2009 presented. Receivables as at 1 January 9,798,440 2,534,519 14,322,182 8,917,435 New acquisitions as a result of business combination 49,380 0 0 0 Changes in available-for-sale assets New acquisitions as a result of merger 0 0 26,785 0 Eliminations as a result of merger 0 0 (8,568,750) 0 The Petrol Group Petrol d.d. New loans 2,784,538 8,649,981 10,353,465 8,087,923 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER (in EUR) 2010 2009 2010 2009 Loans repaid (606,911) (192,210) (302,014) (184,900)

As at 1 January 14,866,548 14,298,513 14,787,505 14,219,470 Transfer to short-term financial receivables (1,081,024) (1,195,021) (5,387,953) (2,498,276)

New acquisitions 0 197,176 0 197,176 Foreign exchange differences 182 1,171 0 0

Disposals (1,481,633) 0 (1,481,633) 0 Receivables as at 31 December 10,944,605 9,798,440 10,443,715 14,322,182

Enhancement (creation of fair value reserve) 0 591,486 0 591,486

Impairment (effect on the income statement) (2,046,135) (220,627) (2,046,135) (220,627) Balance of non-current financial receivables As at 31 December 11,338,780 14,866,548 11,259,737 14,787,505

The Petrol Group Petrol d.d. 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER Balance of available-for-sale financial assets (in EUR) 2010 2009 2010 2009 Finance lease receivables 7,961,236 8,420,234 3,940 0

The Petrol Group Petrol d.d. Loans and other financial receivables 2,983,369 1,378,206 10,439,775 14,322,182 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER Total non-current financial receivables 10,944,605 9,798,440 10,443,715 14,322,182 (in EUR) 2010 2009 2010 2009

Shares of companies 3,831,636 5,313,269 3,752,593 5,234,226

Shares of banks 7,318,616 9,364,751 7,318,616 9,364,751 The Petrol Group Finance lease receivables fall due as follows:

Interests in companies 187,790 187,790 187,790 187,790 Finance lease receivables arise from the finance lease from Pe- • EUR 418,941 in up to one year, trol - Invest d.o.o. to the jointly controlled entity Petrol - Bonus • EUR 1,878,994 in 1 to 5 years, Bonds 738 738 738 738 d.o.o. Lease items consist of two service stations that are legally • EUR 6,082,241 in more than five years. Total available-for-sale financial assets 11,338,780 14,866,548 11,259,737 14,787,505 owned by Petrol - Invest d.o.o. Throughout the finance lease pe- riod, the Group will generate interest income from finance lea- Non-current financial receivables due from others, totalling EUR se totalling EUR 3,267,135. Minimum lease payments total EUR 2,983,369, comprise loans for supplied goods amounting to EUR 11,450,551 and the net present value of lease payments as at 31 2,645,524 and housing loans to employees of Petrol d.d., Ljublja- The Petrol Group and Petrol d.d., Ljubljana free cash flows takes into account a 10.57-percent required rate December 2010 was EUR 8,380,176. na equalling EUR 337,845. Based on a valuation, the Group/Company determined that the of return, a 10-percent minority interest discount and a 17-per- carrying amount of the investment in NLB d.d. shares as at 31 cent lack of marketability discount. The relevant annual growth Changes in non-current finance lease receivables: In 2010, through the business combination involving Petrol - Butan December 2010 was higher than its fair value. To adjust the car- rate for remaining free cash flows is estimated at 4%. d.o.o., Petrol - Jadranplin d.o.o. and Ogrevanje Piran d.o.o., the rying amount to the fair value, the Group/Company impaired the Group acquired long-term financial receivables of EUR 49,380. Mo- value of the investment by EUR 2,046,135. Assessment of the In 2010 the Group/Company disposed of its Zavarovalnica Tri- re information about business combinations is provided in note 6.1. fair value of the investment in NLB d.d. shares was prepared on glav d.d. shares worth EUR 1,481,633. The Petrol Group the going concern assumption, taking into account all informati- on about the operation of the bank that was available at the time Available-for-sale financial assets of the Group/Company me- (in EUR) 31 DECEMBER 2010 31 DECEMBER 2009 of the valuation. The valuation takes into account the perspecti- asured at fair value totalled EUR 7,318,616 as at 31 December Finance lease receivables as at 1 January 8,420,234 48,327 ve of market participants. The methods used were the method 2010. The remaining available-for-sale financial assets of the New loans 0 8,576,747 of the present value of expected free cash flows (the method Group/Company are carried at cost since their fair values can- Transfer to short-term financial receivables (458,998) (204,840) was given a weight of 75%) and the guideline company method not be reliably measured due to significant variability in the ran- (a weight of 25%). The method of the present value of expected ge of reasonable fair value estimates. Finance lease receivables as at 31 December 7,961,236 8,420,234 WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 166 Annual Report Petrol 2010 167

Petrol d.d., Ljubljana d.o.o., Belgrade (EUR 4,130,000, of which EUR 2,780,000 was 6.24 Inventories Non-current financial receivables comprise non-current finan- transferred to short-term financial receivables), and to Petrol - Bu- cial receivables from group companies totalling EUR 7,554,815 tan d.o.o. (EUR 360,000). The Petrol Group Petrol d.d. and non-current financial receivables from others equalling EUR 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER 2,888,900. The former include loans to the subsidiaries Petrol By absorbing Petrol Plin d.o.o., the Company also acquired short- (in EUR) 2010 2009 2010 2009 Energetika d.o.o., Petrol d.o.o., Belgrade and Petrol - Butan d.o.o. -term financial receivables of EUR 26,785 in 2010. The merger also Spare parts and materials inventories 1,530,176 1,137,526 0 0 amounting to EUR 5,844,815, EUR 1,350,000 and EUR 360,000, resulted in the elimination of long-term financial receivables of the Merchandise: 106,819,024 80,508,063 90,121,416 66,497,535 respectively. Non-current financial receivables from others com- Company due from Petrol Plin d.o.o. totalling EUR 8,568,750. Mo- fuel 83,171,888 56,913,764 70,274,634 46,523,064 prise loans for supplied goods totalling EUR 2,551,055 and housing re information about the absorption of Petrol Plin d.o.o. is provided other petroleum products 4,524,343 4,777,625 4,328,249 3,994,504 loans to employees of the Company equalling EUR 337,845. in note 6.1. other merchandise 19,122,793 18,816,674 15,518,533 15,979,967

Non-current financial receivables rose chiefly on account of new More information about financial instrument risks is available in Virtual cards inventories 72,027 357,966 72,027 266,162 loans approved to Petrol Plin d.o.o. (EUR 3,000,000), to Petrol chapter 7 Financial instruments and risks. Total inventories 108,421,227 82,003,555 90,193,443 66,763,697

The Petrol Group and Petrol d.d., Ljubljana The Group/Company has no inventories that are pledged as security for liabilities. After checking the value of merchandise inventories as at 31 December 2010, the Group/Company deter- mined that the net realisable value of inventories was higher than the cost of merchandise, which is why it did not impair the value of inventories in 2010. 6.23 Non-current operating receivables 6.25 Short-term financial receivables

Since all non-current operating receivables are the receivables The Petrol Group Petrol d.d. due to Petrol d.d., Ljubljana, a joint disclosure for the Group and 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER the Company is presented. (in EUR) 2010 2009 2010 2009 Loans granted 13,154,362 1,324,086 8,043,142 3,445,408

Adjustment to the value of loans granted (640,853) (643,594) (640,853) (643,594) The Petrol Group Petrol d.d. Time deposits with banks (3 months to 1 year) 545,934 480,467 0 0 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER (in EUR) 2010 2009 2010 2009 Finance lease receivables 441,786 204,840 22,845 0

Receivables from companies 1,426,404 1,426,404 1,426,404 1,427,751 Interest receivables 180,073 28,678 209,483 175,865

Allowance for receivables from companies (1,426,404) (1,426,404) (1,426,404) (1,426,404) Allowance for interest receivables (6,885) (8,415) (6,885) (3,019)

Receivables from municipalities 882,547 1,193,272 882,547 1,057,538 Total short-term financial receivables 13,674,416 1,386,062 7,627,732 2,974,660

Other receivables 83,925 74,567 83,925 74,567

Total non-current operating receivables 966,472 1,267,839 966,472 1,133,452 The Petrol Group EUR 5,123,844 and short-term loans to others of EUR 2,919,298 In addition to the loans granted by Petrol d.d., Ljubljana to for which an adjustment of EUR 640,853 was made. others, which stood at EUR 2,919,298, and the adjustment to the The Petrol Group and Petrol d.d., Ljubljana Receivables from municipalities mainly relate to receivables value of loans granted of EUR 640,853, the loans granted com- The short-term portion of long-term loans to subsidiaries con- Non-current operating receivables from companies consist of from the municipality of Mengeš amounting to EUR 269,075 prise short-term loans granted by other group companies total- sists of a loan of EUR 1,081,644 to the company Petrol Energeti- receivables from the jointly controlled entity Geoenergo d.o.o. and from the municipality of Šempeter-Vrtojba amounting to ling EUR 10,235,064. ka d.o.o., a loan of EUR 2,780,000 to the company Petrol d.o.o. amounting to EUR 1,426,404. The receivables arose from long- EUR 473,089, both arising from the refund of overcharged fees Belgrade, and a loan of EUR 1,262,200 to the company Petrol- -term assets allocated to the restructuring of the company Nafta for the building site use, and receivables from the municipality of Out of the total amount of finance lease receivables, EUR 418,941 -Jadranplin d.o.o. Short-term loans to others consist of a loan of Lendava d.o.o. that the company Petrol d.d., Ljubljana was obli- Idrija totalling EUR 134,992, which are the result of prepaid con- relates to the short-term portion of finance lease receivables of EUR 825,037 to road hauliers for the purchase of vehicles and a ged to provide under an agreement concluded with the Gover- cession fees. The receivables are accounted for based on the Petrol-Invest d.o.o. The finance lease is detailed in note 6.21. loan of EUR 1,453,408 to companies for the payment of goods nment of the Republic of Slovenia. Because the repayment of the agreed-upon plan for the refund of overpaid fees. delivered. long-term operating receivable is contingent on the generation Petrol d.d., Ljubljana and distribution of profit of the company Geoenergo d.o.o., an al- More information about financial instrument risks is available in Short-term loans to companies of EUR 8,043,142 include the More information about financial instrument risks is available in lowance was made for the entire receivable. chapter 7 Financial instruments and risks. short-term portion of long-term loans to subsidiaries totalling chapter 7 Financial instruments and risks. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 168 Annual Report Petrol 2010 169

6.26 Short-term operating receivables 6.28 Advances and other assets

The Petrol Group Petrol d.d. The Petrol Group Petrol d.d. 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER (in EUR) 2010 2009 2010 2009 (in EUR) 2010 2009 2010 2009

Trade receivables 323,798,611 257,049,528 294,4 87,393 228,276,515 Advances 1,637,081 1,770,650 386,407 253,839

Allowance for trade receivables (26,360,688) (28,656,743) (17,211,342) (13,363,315) Prepaid insurance premiums 674,712 570,913 4 87,511 403,863

Operating receivables from state and other institutions 12,198,013 9,030,843 6,190,466 5,647,672 Uninvoiced services and goods 668,463 430,133 958,463 242,172

Allowance for receivables from state and other institutions 0 (125,133) 0 0 Prepaid subscriptions, specialised literature, etc. 427,831 311,067 420,620 308,844

Operating interest receivables 2,573,260 2,954,804 3,200,358 2,258,336 Uninvoiced natural gas and LPG 359,147 273,361 367,066 32,753

Allowance for interest receivables (1,066,994) (1,070,332) (1,002,968) (964,099) Deferred expenses associated with the cost of natural gas 160,848 107,309 0 0

Receivables from insurance companies (loss events) 289,026 857,511 260,073 823,151 Other short-term deferred costs and expenses 239,621 101,894 40,942 39,814 Other operating receivables 749,822 5,014,948 27,260 3,752,387 Total advances and other assets 4,167,703 3,565,327 2,661,009 1,281,285 Allowance for other receivables (58,822) (917,225) 0 0

Total short-term operating receivables 312,122,226 244,138,201 285,951,240 226,430,647

More information about financial instrument risks is available in 6.29 Cash and cash equivalents chapter 7 Financial instruments and risks. The Petrol Group Petrol d.d. 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER 6.27 Financial assets at fair value (in EUR) 2010 2009 2010 2009 through profit or loss Cash 120,399 198,115 25,542 0 Cash in banks 7,810,546 7,192,206 4,966,480 3,897,658 Since all financial assets measured at fair value through profit Short-term deposits (up to 3 months) 9,612,826 399,167 9,781,457 3,011,982 or loss belong to Petrol d.d., Ljubljana, a joint disclosure for the Total cash and cash equivalents 17,543,771 7,789,488 14,773,479 6,909,640 Group and the Company is presented.

More information about financial instrument risks is available in The Petrol Group Petrol d.d. chapter 7 Financial instruments and risks. 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER (in EUR) 2010 2009 2010 2009

Assets arising from forward contracts 1,704,503 2,767,076 1,704,503 2,767,076 6.30 Capital Assets arising from interest rate swaps 508,101 0 508,101 0

Assets arising from commodity swaps 293,969 354,322 293,969 362,987 Called-up capital Revenue reserves Financial assets under management 1,342,358 0 1,342,358 0 The Company’s share capital totals EUR 52,240,977 and is divi- • Legal reserves and other revenue reserves ded into 2,086,301 ordinary shares with a nominal value of EUR Legal and other revenue reserves comprise shares of profit Total financial assets at fair value through profit or loss 3,848,931 3,121,398 3,848,931 3,130,062 25.04. All shares have been paid up in full. from previous years that have been retained for a dedicated All 2,086,301 ordinary shares, which bear the share code PETG, purpose, mainly for offsetting eventual future losses. The Petrol Group and Petrol d.d., Ljubljana are traded on the Ljubljana Stock Exchange. The quoted share In 2010 other reserves of the Group/Company decreased Financial assets from forward contracts for the purchase of US Financial assets under management totalling EUR 1,342,358 com- price as at 31 December 2010 was EUR 272.00. The book value as a result of the payment of dividends to shareholders whi- dollars, which stood at EUR 1,704,503, comprise the fair value of prise cash invested in financial instruments to generate return of the share as at 31 December 2010 was EUR 201.12. ch amounted to EUR 12,163,428. In addition, the Group’s le- outstanding forward contracts as at 31 December 2010. Finan- while ensuring acceptable dispersion of risk under a concluded gal reserves increased by EUR 13,911 due to a transfer of a cial assets from interest rate swaps of EUR 508,101 relate to the contract on financial instrument management. Financial assets as Capital surplus 5% share of profit for the current year to the legal reserves fair value of outstanding interest rate risk hedging contracts as at 31 December 2010 were valued at the market prices of the fi- Capital surplus may be used under conditions and for the purposes of the subsidiaries Petrol Tehnologija d.o.o. and Petrol VNC at 31 December 2010. Financial assets arising from commodity nancial instruments included in the portfolio. stipulated by law. General equity revaluation adjustments as at 31 d.o.o. swaps totalling EUR 293,969 represent the fair value of outstan- December 2003 comprised the revaluation of share capital made ding commodity swap contracts on the purchase of petroleum More information about financial instrument risks is available in before the year 2002, in accordance with the then applicable Slove- • Own shares and reserves for own shares products and electricity as at 31 December 2010. All of the abo- chapter 7 Financial instruments and risks. ne Accounting Standards. Because of the transition to Internatio- If the parent company or its subsidiaries acquire an owner- ve financial assets arising from derivative financial instruments nal Financial Reporting Standards, the revaluation adjustment was ship interest in the parent company, the amount paid, inclu- must be read in conjunction with outstanding contracts disclo- transferred to capital surplus. It can only be used to increase share ding transaction costs less tax, is deducted from total equity sed under financial liabilities in note 6.34. capital. In 2010 there were no changes in capital surplus. in the form of own shares until such shares are cancelled, WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 170 Annual Report Petrol 2010 171

reissued or sold. If own shares are later sold or reissued, the Accumulated profit 6.31 Provisions for employee benefits consideration received is included in equity net of transaction costs and related tax effects. Allocation of accumulated profit for 2009 The Petrol Group Petrol d.d. At the 20th General Meeting of the joint-stock company Petrol 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER Purchases and disposals of own shares: d.d., Ljubljana held on 6 May 2010, the shareholders adopted the (in EUR) 2010 2009 2010 2009 following resolution on the allocation of accumulated profit: Termination benefits on retirement 2,004,606 2,092,853 1,085,599 959,955 Number of Cost Jubilee benefits 1,949,338 1,841,080 980,944 776,620 shares (in EUR)* As proposed by the Management Board and the Supervisory Board, Total provisions 3,953,944 3,933,933 2,066,543 1,736,575 Total purchased in 1997-1999 36,142 3,640,782 the accumulated profit for the financial year 2009 of EUR 14,604,107

Disposal by year is to be allocated in accordance with provisions of Articles 230., 282. and 293. of the Companies Act (ZGD-1) as follows: Provisions for employee benefits comprise provisions for ter- of the reporting period. The calculation is made separately for Payment of bonuses in 1997 (1,144) (104,848) • payment of dividends in the gross amount of EUR 5.90 per mination benefits on retirement and jubilee benefits. The pro- each employee by taking into account the costs of termination Payment of bonuses in 1998 (1,092) (98,136) share or in the total amount of EUR 12,309,175.90, visions amount to estimated future payments for termination benefits on retirement and the costs of all expected jubilee bene- Payment of bonuses in 1999 (715) (62,189) • transfer to other revenue reserves in the amount of EUR benefits on retirement and jubilee benefits discounted to the end fits until retirement. Payment of bonuses in 2000 (1,287) (119,609) 2,294,931.10.

Payment of bonuses in 2001 (1,122) (95,252) The dividends are to be paid from other revenue reserves set Changes in provisions for employee benefits Payment of bonuses in 2002 (1,830) (158,256) aside in 2004 and 2005. Payment of bonuses in 2003 (1,603) (138,625) The Petrol Group Petrol d.d. Payment of bonuses in 2004 (1,044) (90,284) The Company does not pay dividends on own shares. Con- Terminati- Jubilee Terminati- Jubilee (in EUR) on benefits benefits Total on benefits benefits Total Payment of bonuses in 2005 (144) (15,183) sequently, the Company’s dividend payment obligation in respect of 2,061,598 shares stood at EUR 12,163,428. The As at 1 January 2009 2,192,372 1,299,603 3,491,975 916,484 577,090 1,493,574 Payment of bonuses in 2006 (403) (42,492) amount of dividends paid by the Company in 2010 totalled New provisions 164,702 708,337 873,039 67,879 269,963 337,842 Payment of bonuses in 2007 (731) (77,077) EUR 11,559,649.35. Utilised (242,760) (163,365) (406,125) (24,408) (70,433) (94,841) Payment of bonuses in 2008 (324) (34,162) Reversed (20,678) (3,322) (24,000) 0 0 0 Total disposals in 1997-2010 (11,439) (1,036,113) Accumulated profit for 2010 Own shares as at 31 December Translation differences (783) (173) (956) 0 0 0 2010 24,703 2,604,670 Petrol d.d. As at 31 December 2009 2,092,853 1,841,080 3,933,933 959,955 776,620 1,736,575

* Amounts converted from SIT into EUR at the parity exchange rate of 239.64. 31 DECEMBER 31 DECEMBER New provisions 295,339 425,846 721,185 192,472 257,499 449,971 (in EUR) 2010 2009 New acquisitions as a result of merger 0 0 0 30,431 26,581 57,012 In 2010 the number of own shares remained unchanged. The Compulsory allocation of net profit Utilised (150,774) (108,747) (259,521) (97,259) (79,756) (177,015) Company held 24,703 own shares as at 31 December 2010. The Net profit 37,946,402 10,661,802 market value of repurchased own shares totalled EUR 6,719,216 Net loss for the year offset Reversed (230,121) (206,473) (436,594) 0 0 0 on the above date. against net profit 0 (8,524,570) Translation differences (2,691) (2,368) (5,059) 0 0 0 Net profit after compulsory As at 31 December 2010 2,004,606 1,949,338 3,953,944 1,085,599 980,944 2,066,543 Other reserves allocation 37,946,402 2,137,232 Revaluation reserves (the Group) are included in the Group’s Creation of other revenue financial statements and represent attributed changes in the reserves 18,973,201 0 The Petrol Group deration of Bosnia and Herzegovina a 3% growth, and the one for equity of associates and jointly controlled entities accounted for Determination of accumulated The number of employees of the Petrol Group included in the cal- Serbian companies a 6% growth in 2011 and 5.50% growth from profit using the equity method. culation of provisions for employee benefits as at 31 December 2011 onwards. Net profit 18,973,201 2,137,232 2010 was 2,132 (1,297 in Slovenia, 612 in Croatia, 67 in Serbia and Fair value reserve (the Company) comprises the effects of valuing Other revenue reserves 0 12,466,875 156 in the Federation of Bosnia and Herzegovina). The calculation Petrol d.d., Ljubljana available-for-sale financial assets at fair value. The Company also Accumulated profit 18,973,201 14,604,107 of provisions in Slovenia was made according to the yield curve de- The number of employees of the Company included in the calcu- discloses the effects of valuing investments in jointly controlled termined based on the yield on corporate bonds in the euro area lation of provisions for employee benefits was 591. The yield curve entities and associates that are measured as available-for-sale fi- The Company's Supervisory Board, acting on a proposal from and matched against the yield curve of government bonds with used was set based on the yield on corporate bonds in the euro nancial assets in accordance with the relevant accounting policy. the Company's Management Board made upon the approval of AAA rating for the euro area countries. The provisions for emplo- area and matched against the yield curve of government bonds wi- the annual report, used the net profit to create other revenue re- yee benefits for the companies based in Croatia and in the Fede- th AAA rating for the euro area countries. The model envisages a Hedging reserve comprises the effect of changes in the fair value serves in accordance with Article 230 of the Companies Act. ration of Bosnia and Herzegovina were calculated based on a 6% salary increase of 2.70% in 2011, 2.20% in 2012 and 3% from 2013 of derivative financial instruments designated as effective in hed- yield, whereas for the companies based in Serbia a 7.75% yield onwards. ging against the variability in cash flows. Final dividends for the year ended 31 December 2010 have not was used. The model for provisions set aside by the companies in yet been proposed and confirmed by owners at a General Me- Slovenia envisages a salary increase of 2.70% in 2011, 2.20% in By absorbing Petrol Plin d.o.o., the Company also acquired provisi- Changes in the above reserves in 2010 are explained in more de- eting, which is why they have not been recorded as liabilities in 2012 and 3% from 2013 onwards. The model for Croatian compa- ons for employee benefits of EUR 57,012 in 2010. More information tail in note 6.14. these financial statements. nies envisages a 4.5% growth, the one for the companies in the Fe- about the absorption of Petrol Plin d.o.o. is provided in note 6.1. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 172 Annual Report Petrol 2010 173

6.32 Other provisions 6.33 Long-term deferred revenue

The Petrol Group The Petrol Group

Provisions for Long-term Long-term third-party managed deferred deferred Long-term Other service station "Other revenue from revenue deferred long-term (in EUR) employee benefits provisions" Total environmental from gas revenue from deferred (in EUR) assets connections grants revenue Total As at 1 January 2009 2,010,056 362,080 2,372,136 As at 1 January 2009 14,566,463 2,049,056 64,780 70,094 16,750,393 New provisions 620,129 32,447 652,576 Increase 0 642,054 181,856 18,089 841,999 Utilised (185,837) (235,285) (421,122) Decrease (1,733,489) (181,418) (39,787) (73,902) (2,028,596) As at 31 December 2009 2,444,348 159,242 2,603,590 As at 31 December 2009 12,832,974 2,509,692 206,849 14,281 15,563,796 New provisions 358,984 15,286 374,270 Increase 0 372,581 0 0 372,581 Utilised (264,929) (34,696) (299,625) Decrease (1,630,833) (226,525) (49,881) (3,808) (1,911,047) Foreign exchange differences 0 (669) (669) As at 31 December 2010 11,202,141 2,655,748 156,968 10,473 14,025,330 As at 31 December 2010 2,538,403 139,163 2,677,566

The number of employees at third-party managed service sta- Long-term deferred revenue from environmental assets compri- the transfer of the portion falling due in the current year to reve- tions included in the calculation of provisions for employee ses deferred revenue of Petrol d.d., Ljubljana from funds granted nue. benefits as at 31 December 2010 was 1,248 (1,176 Petrol d.d., for the environmental rehabilitation of service stations, road tan- Ljubljana employees and 72 Petrol Hrvatska d.o.o. employees). kers, storage facilities and the clean-up of the bitumen dump at Petrol d.d., Ljubljana The actuarial assumptions used in the calculation are the same Pesniški Dvor. Environmental assets were approved by means Long-term deferred revenue from environmental assets is as the assumptions used to calculate provisions for jubilee be- of a decision of the Ministry of the Environment and Spatial Plan- explained in more detail in the note pertaining to the Group. nefits and termination benefits on retirement for the companies ning as part of the ownership transformation of the company based in Slovenia and Croatia, as described in note 6.31. Petrol d.d., Ljubljana and were recognised as such in the ope- Long-term deferred revenue from gas connections is explained ning financial statements of Petrol d.d., Ljubljana as at 1 January in more detail in the note pertaining to the Group. By absorbing Petrol d.d., Ljubljana 1993 that were prepared in accordance with the regulations go- Petrol Plin d.o.o., the Company also acquired long-term deferred verning the ownership transformation of companies. Out of the revenue from gas connections of EUR 1,800,473 in 2010. More Provisions for amount relating to the decrease in environmental provisions by information about the absorption of Petrol Plin d.o.o. is provided third-party managed EUR 1,630,833 in 2010, EUR 1,620,431 relates to depreciation of in note 6.1. service station (in EUR) employee benefits Other provisions Total environmental fixed assets for 2010.

As at 1 January 2009 2,010,056 4,968 2,015,024 Long-term deferred revenue from gas connections or gas net- New provisions 620,129 0 620,129 work connection fees consists of revenue deferred by the Group Utilised (185,837) (145) (185,982) over a concession period. The increase in deferred revenue in As at 31 December 2009 2,444,348 4,823 2,449,171 2010 relates to new connections, while the decrease relates to

New provisions 281,982 0 281,982

Utilised (187,927) 0 (187,927) Long-term Long-term deferred deferred Long-term Other Reversed 0 (4,823) 0 revenue from revenue deferred long-term environmental from gas revenue from deferred As at 31 December 2010 2,538,403 0 2,538,403 (in EUR) assets connections grants revenue Total

As at 1 January 2009 14,566,464 227,565 64,058 70,094 14,928,181 Provisions for third-party managed service station employee be- nefits are described in more detail in the note pertaining to the Increase 0 54,280 181,856 0 236,136 Group. Decrease (1,733,490) (41,556) (39,329) (70,094) (1,884,469) As at 31 December 2009 12,832,974 240,289 206,585 0 13,279,849 New acquisitions as a result of merger 0 1,800,473 0 0 1,800,473

Increase 0 299,584 0 0 299,584

Decrease (1,630,834) (166,860) (49,618) 0 (1,847,312)

As at 31 December 2010 11,202,140 2,173,486 156,968 0 13,532,594 WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 174 Annual Report Petrol 2010 175

6.34 Financial liabilities • EUR 7,817,412 from the company Petrol Maloprodaja Slove- nija d.o.o., The Petrol Group Petrol d.d. • EUR 1,151,896 from the company Petrol Slovenia Tirana 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER Wholesale Sh.A, (in EUR) 2010 2009 2010 2009 • EUR 929,556 from the company Petrol Tehnologija d.o.o., Short-term financial liabilities • EUR 225,158 from the company VNC d.o.o., Bank loans 160,593,173 249,178,004 112,580,839 201,387,468 • EUR 92,843 from the company Petrol Skladiščenje d.o.o.

Liabilities to banks arising from interest rate swaps 7,440,127 8,638,201 7,440,127 8,638,201 More information about financial instrument risks is available in Liabilities to banks arising from forward contracts 491,910 0 491,910 0 chapter 7 Financial instruments and risks. Liabilities arising from commodity swaps 764,648 0 764,648 0

Finance lease liabilities 2,183,469 1,707,997 0 0

Other loans and financial liabilities 1,770,954 2,575,135 10,384,371 12,031,157 6.35 Non-current operating liabilities

173,244,281 262,099,337 131,661,896 222,056,826 Changes in non-current operating liabilities relating to assets received for administration Non-current financial liabilities

Bank loans 263,880,880 180,163,708 243,005,929 163,822,045 The Petrol Group Petrol d.d. Bonds issued 50,071,650 50,092,122 50,071,650 50,092,122 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER (in EUR) 2010 2009 2010 2009 Finance lease liabilities 4,868,649 6,362,851 0 0 As at 1 January 1,472,582 1,487,982 1,149,934 1,202,196 318,821,179 236,618,681 293,077,579 213,914,167 New acquisitions as a result of merger 0 0 272,648 0 Total financial liabilities 492,065,460 498,718,018 424,739,475 435,970,993 Increase 0 50,000 0 0

Decrease (108,522) (65,400) (65,400) (52,262) The Petrol Group instruments must be read in conjunction with outstanding con- Financial liabilities are not covered by securities in rem, except for tracts disclosed under financial receivables in note 6.27. As at 31 December 1,364,060 1,472,582 1,357,182 1,149,934 liabilities arising from finance leases that the Group acquired as a result of business combinations involving the companies Euro – Out of the total amount of finance lease liabilities, which stood at The Petrol Group and Petrol d.d., Ljubljana on contracts. Liabilities are decreased by the amount of accru- Petrol d.o.o., Petrol - Jadranplin d.o.o. and Petrol – Butan d.o.o. EUR 7,052,118, the amount of EUR 6,581,295 relates to finance Non-current operating liabilities of the Group amounting ed depreciation of assets received for administration. lease liabilities of Euro - Petrol d.o.o., which acquired a vehicle fleet to EUR 1,364,060 and of the Company amounting to EUR Bank loans are subject to a variable and EURIBOR-linked interest for the transport of petroleum products and certain service sta- 1,357,182 relate to property, plant and equipment received for More information about financial instrument risks is available in rate. tions under finance lease. Over the next eleven years, the Group’s administration from municipalities in accordance with concessi- chapter 7 Financial instruments and risks. interest expense arising from the finance lease will amount to In 2009 Petrol d.d., Ljubljana issued bonds with a total nominal EUR 1,338,800. Finance lease liabilities fall due as follows: EUR value of EUR 50,000,000. Bonds were issued with the nominal 1,737,637 in 1 year, EUR 2,655,071 in 1 to 5 years, and the remain- 6.36 Short-term operating liabilities value of EUR 1,000 each. The entire bond issue contains 50,000 ing EUR 2,188,587 in more than five years. Minimum lease pay- denominations of EUR 1,000. The bond maturity date is 29 June ments total EUR 7,920,065 and the net present value of lease The Petrol Group Petrol d.d. 2014. The interest rate on the bonds is fixed, i.e. 7.57% p.a. Inte- payments as at 31 December 2010 was EUR 6,581,295. 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER rest is accrued semi-annually in arrears. The nominal value of the (in EUR) 2010 2009 2010 2009 principal falls due in full in a one-off amount upon the maturity of Other loans consist mainly of a loan from the company Petrol Trade liabilities 237,994,077 127,903,537 254,775,459 155,300,301 the bond on 29 June 2014. The bonds are traded on the Ljublja- Slovenia Tirana Wholesale Sh.A to Petrol d.d., Ljubljana, which Excise duty liabilities 54,705,104 49,462,741 51,582,432 46,648,569 na Stock Exchange and bear the code PET1. The fair value of the stood at EUR 1,151,896 as at 31 December 2010. bonds as at 31 December 2010 was EUR 54,800,000. Value added tax liabilities 14,265,803 17,632,664 12,781,396 16,392,094 Petrol d.d., Ljubljana Import duty liabilities 8,630,269 5,784,272 2,214,167 2,392,174

Liabilities to banks arising from interest rate swaps and amoun- The financial liabilities of the Company are not covered by secu- Liabilities to employees 5,439,128 5,984,058 2,968,938 3,330,180 ting to EUR 7,440,127 relate to estimated fair values of outstan- rities in rem. Bank loans are subject to a variable and EURIBOR- Environment pollution charge liabilities 3,234,479 1,469,527 3,198,415 1,416,982 ding interest rate risk hedging contracts as at 31 December 2010. -linked interest rate. Social security contribution liabilities 583,765 557,147 306,023 245,893 Liabilities to banks arising from forward contracts for the purcha- se of US dollars, which stood at EUR 491,910, comprise the fair Liabilities arising from the Company's bond issue and from de- Liabilities arising from advances and collaterals 577,957 575,364 497,229 457,175 value of outstanding forward contracts as at 31 December 2010. rivative financial instruments are explained in more detail in the Liabilities associated with the distribution of profit or loss 390,357 398,043 390,357 398,043

Liabilities arising from commodity swaps totalling EUR 764,648 note pertaining to the Group. Other liabilities to the state and other state institutions 338,561 1,280,530 100,826 1,193,551 represent the fair value of outstanding commodity swap contracts Other liabilities 2,278,442 5,541,560 2,244,828 6,635,628 on the purchase of petroleum products as at 31 December 2010. Other loans obtained by the Company relate to loans from group All of the above financial liabilities arising from derivative financial companies amounting to EUR 10,216,865, of which: Total short-term operating and other liabilities 328,437,942 216,589,443 331,060,070 234,410,590 WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 176 Annual Report Petrol 2010 177

6.37 Other liabilities

The Petrol Group Petrol d.d. 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER (in EUR) 2010 2009 2010 2009 The item that was most exposed to credit risk on the reporting Accrued expenses for uninvoiced goods 1,308,861 489,176 1,278,153 489,176 date were short-term operating receivables. Compared with the

Accrued environmental expenses 1,267,776 1,244,018 1,267,776 1,244,018 end of 2009, these rose, in nominal terms, by 28 percent within the Group and 26 percent within the Company. Accrued leave expenses 1,220,517 1,261,434 726,650 657,631

Accrued litigation expenses 866,251 827,117 726,847 726,691 Within the Group, the main reason for the increase was a steep Accrued goods shortages 544,713 543,165 544,713 543,165 rise in petroleum product prices. Within the Company, howe- Accrued expenses for tanker demurrage 358,237 350,261 358,237 350,261 ver, the receivables also rose as a result of the absorption of the

Accrued concession fee expenses 152,546 114,777 152,546 59,121 company Petrol Plin and its receivables as at 31 December 2010.

Accrued motorway site lease payments 156,407 131,944 131,284 131,944 Financial assets at fair value through profit or loss consist mainly Other accrued costs 1,341,866 994,527 830,628 352,183 of derivative financial instruments. Deferred Magna prepayment card revenue 526,980 392,296 526,980 392,296

Deferred default interest income 397,901 416,568 397,901 416,568

Deferred revenue from gas connections 315,338 331,670 296,635 240,910 The Group’s short-term operating receivables by maturity Deferred revenue from heating 234,782 276,479 0 0

Deferred revenue from assigned contributions 114,113 164,508 114,113 65,450 Breakdown by maturity Other deferred revenue 247,306 341,180 219,260 239,186 Up to 30 31 to 60 61 to 90 More than days days days 90 days Total other liabilities 9,053,594 7,879,120 7,571,723 5,908,600 (in EUR) Not yet due overdue overdue overdue overdue Total

Trade receivables 167,374,419 34,002,033 11,448,633 6,999,586 37,224,857 257,049,528

Allowances for trade receivables (371) (469) (2,621) (4,484,554) (24,983,463) (29,471,478) Operating receivables from state and other 7. Financial instruments and risks 7.1 Credit risk institutions 8,876,546 26,769 2,395 0 125,133 9,030,843 This chapter presents disclosures about financial instruments In 2010 the financial crisis deteriorated into an economic crisis, Allowances for receivables from state and and risks. Risk management is explained in chapter Business ri- which was reflected mostly in the collection of trade receivables other institutions 0 0 0 0 (125,133) (125,133) sks of the business report. from customers in the construction and transport sector. This Interest receivables 243,184 159,651 118,534 269,323 1,747,544 2,538,236 led the Management Board to monitor even more consistently Allowances for interest receivables 0 0 0 (64,240) (1,006,092) (1,070,332) the balance of trade receivables and tighten the terms on which Other receivables 6,184,448 0 0 0 104,582 6,289,030 sales on open account are approved by requiring a considerably Allowances for other receivables 0 0 0 0 (102,490) (102,490) wider range of high-quality collaterals. As at 31 December 2009 182,678,226 34,187,984 11,566,941 2,720,115 12,984,938 244,138,201 Having maximum exposure to credit risk is the carrying amount of

financial assets which was the following as at 31 December 2010: Breakdown by maturity up to 30 31 to 60 61 to 90 More than days days days 90 days The Petrol Group Petrol d.d. (in EUR) Not yet due overdue overdue overdue overdue Total

(in EUR) 2010 2009 2010 2009 Trade receivables 229,810,917 39,382,222 11,841,426 4,091,331 38,672,716 323,798,611

Available-for-sale financial assets 11,338,780 14,866,548 11,259,737 14,787,505 Allowances for trade receivables 0 (1,511) (3,386) (2,665,661) (23,690,130) (26,360,688) Operating receivables from state and other Non-current financial receivables 10,944,605 9,798,440 10,443,715 14,322,182 institutions 11,488,643 709,370 0 0 0 12,198,013 Non-current operating receivables 966,472 1,267,839 966,472 1,133,452 Allowances for receivables from state and Short-term financial receivables 13,674,416 1,386,062 7,627,732 2,974,660 other institutions 0 0 0 0 0 0

Short-term operating receivables 312,122,226 244,138,201 285,951,240 226,430,647 Interest receivables 294,487 389,225 142,621 60,782 1,686,145 2,573,260

Cash and cash equivalents 17,543,771 7,789,488 14,773,479 6,909,640 Allowances for interest receivables 0 0 (237) (46,795) (1,019,962) (1,066,994)

Financial assets at fair value through profit or loss 3,848,931 3,121,398 3,848,931 3,130,062 Other receivables 749,206 7,922 6,478 6,428 209,995 980,029

Total assets 370,439,201 282,367,976 334,871,306 269,688,148 As at 31 December 2010 242,343,253 40,487,227 11,986,902 1,446,085 15,858,762 312,122,226 WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 178 Annual Report Petrol 2010 179

The Company’s short-term operating receivables by maturity Changes in allowances for short-term operating receivables of the Company

Breakdown by maturity Allowance for short-term Allowance for Up to 30 31 to 60 61 to 90 More than operating short-term interest days days days 90 days (in EUR) receivables receivables Total (IN EUR) Not yet due overdue overdue overdue overdue total As at 1 January 2009 (11,065,706) (877,841) (11,943,547) Trade receivables 154,870,143 29,226,259 12,133,445 8,558,559 23,488,108 228,276,514 Net changes in allowances affecting profit or loss (2,938,880) (94,058) (3,032,938) Allowances for trade receivables 0 0 0 (4,445,880) (8,917,435) (13,363,315) Changes in allowances not affecting profit or loss 0 3,056 3,056 Interest receivables 84,284 140,720 105,076 184,500 1,327,189 1,841,769 Reversal of allowances for receivables 641,271 4,744 646,015 Allowances for interest receivables 0 0 0 (57,707) (906,392) (964,099) As at 31 December 2009 (13,363,315) (964,099) (14,327,414) Other receivables 10,639,778 0 0 0 0 10,639,778

As at 31 December 2009 165,594,205 29,366,979 12,238,521 4,239,472 14,991,470 226,430,647 Allowance for short-term Allowance for Breakdown by maturity operating short-term interest (in EUR) receivables receivables Total up to 30 31 to 60 61 to 90 more than days days days 90 days As at 1 January 2010 (13,363,314) (964,098) (14,327,412) (IN EUR) Not yet due overdue overdue overdue overdue total New acquisitions as a result of merger (582,140) (17,598) (599,738) Trade receivables 213,999,829 42,724,375 11,005,363 4,028,657 22,729,169 294,487,393 Net changes in allowances affecting profit or loss (3,869,281) (39,081) (3,908,362) Allowances for trade receivables 0 0 0 (1,425,047) (15,786,295) (17,211,342) Changes in allowances not affecting profit or loss 0 17,809 17,809 Interest receivables 376,379 77,712 514,063 29,627 1,804,676 2,802,457 Reversal of allowances for receivables 603,393 0 603,393 Allowances for interest receivables 0 0 0 (29,627) (973,341) (1,002,968) As at 31 December 2010 (17,211,342) (1,002,968) (18,214,310) Other receivables 6,875,700 0 0 0 0 6,875,700 In 2010 the Company made allowances for receivables totalling As at 31 December 2010 221,251,908 42,802,087 11,519,426 2,603,610 7,774,209 285,951,240 EUR 3,908,362.

Changes in allowances for short-term operating receivables of the Group Security of receivables

Allowance for The Petrol Group Petrol d.d. short-term Allowance for operating short-term interest 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER (IN EUR) receivables receivables Total (in EUR) 2010 2009 2010 2009

As at 1 January 2009 (17,050,099) (911,164) (17,961,261) Short-term operating trade receivables (outstanding) 323,798,611 257,049,528 294,4 87,393 228,276,515

Net changes in allowances affecting profit or loss (13,647,431) (134,671) (13,782,102) Allowances (26,360,688) (29,471,478) (17,211,342) (13,363,315)

Changes in allowances not affecting profit or loss (26,472) 0 (26,472) Short-term operating trade receivables including allowances 297,437,923 227,578,050 277,276,051 214,913,200

Reversal of allowances for receivables 1,048,362 (24,753) 1,023,609 Overdue short-term operating trade receivables 93,987,694 89,675,109 80,487,564 73,406,371

Foreign exchange differences (23,463) 258 (23,205) Share of overdue receivables in outstanding receivables 32% 39% 29% 34% As at 31 December 2009 (29,699,103) (1,070,330) (30,769,433) Short-term operating trade receivables secured with high- quality collaterals 67,375,633 34,844,577 61,047,829 25,715,257

Allowance for short-term Allowance for operating short-term interest Only high-quality collaterals were presented in the overview of services and the sale of goods to the holders (natural persons) (IN EUR) receivables receivables Total collaterals in 2010 and for the year 2009. Bills of exchange and of the Petrol Club card. The structure of wholesale and retail As at 1 January 2010 (29,699,103) (1,070,330) (30,769,433) promissory notes have a lower level of collectability. customers (natural persons) is diversified, meaning there is no Net changes in allowances affecting profit or loss (646,228) (19,707) (665,935) significant exposure to a single customer. The Company had Changes in allowances not affecting profit or loss 2,047 13,547 15,594 The receivable from the Group’s largest individual customer sto- 25,252 customers (legal persons) as at 31 December 2010. The Reversal of allowances for receivables 3,983,708 7,213 3,990,921 od at EUR 6,965,460 as at 31 December 2010, accounting for Group/Company has in place a computerised system of grades,

New acquisitions as a result of business combination (126,745) 0 (126,745) 2.34% of trade receivables. The receivable from the Company’s ratings and blocks, enabling it to constantly monitor its custo- largest individual customer stood at EUR 6,806,241 as at 31 De- mers. Foreign exchange differences 66,809 2,284 69,093 cember 2010 and accounted for 2.45% of trade receivables. As at 31 December 2010 (26,419,513) (1,066,993) (27,486,506) The Group/Company improves the system for the monitoring As a result of a repayment in 2010, the Group reversed the al- These receivables mainly relate to receivables from domestic of credit risks on a yearly basis. Due to expected increase in the lowances made in previous years. and foreign customers arising from the wholesale of goods and number of defaulting customers, the Group/Company tightened WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 180 Annual Report Petrol 2010 181

its credit standards in 2010, requiring from customers a wider The Group/Company measures the degree of receivables ma- The Group’s liabilities by maturity range of collaterals (bank guarantees, mortgages, pledges). nagement using days sales outstanding. 0 to 6 6 to 12 More than 5 (in EUR) Liability months months 1 to 5 years years

The Petrol Group Petrol d.d. Non-current financial liabilities 236,618,681 0 0 227,330,270 9,288,411

(In DAYS) 2010 2009 2010 2009 Non-current operating liabilities 1,472,582 0 0 311,600 1,160,982

Days sales outstanding Short-term financial liabilities 262,099,337 216,354,287 45,745,050 0 0

Contract days 40 37 42 40 Short-term operating liabilities 216,589,443 215,972,771 616,672 0 0

Overdue receivables in days 19 23 17 21 As at 31 December 2009 716,780,043 432,327,058 46,361,722 227,641,870 10,449,393

Total receivables 59 60 59 61 Short-term financial liabilities consist of derivative financial in- struments amounting to EUR 8,638,201.

Based on the data on days sales outstanding it can be establis- In addition, the Group/Company has credit lines at its disposal hed that the Group/Company successfully collected its receiva- both in Slovenia and abroad, the size of which enables the Group 0 to 6 6 to 12 More than 5 (in EUR) Liability months months 1 to 5 years years bles and reduced the number of days sales outstanding. to meet all its due liabilities at any given moment. Non-current financial liabilities 318,821,179 0 0 266,256,918 52,564,261

In 2010 the Group/Company successfully substituted repaid Non-current operating liabilities 1,364,060 0 0 6,879 1,357,181 7.2 Liquidity risk long-term loans with new long-term loans and even increased Short-term financial liabilities 173,244,281 127,056,966 46,187,315 0 0 The Group/Company successfully manages liquidity risks, and the share of long-term investments covered with long-term liabi- Short-term operating liabilities 328,437,942 319,994,870 8,443,072 0 0 the system itself remained virtually unchanged in 2010. lities. This share rose from 83% as at the end of 2009 to 93% as As at 31 December 2010 821,867,463 447,051,836 54,630,387 266,263,797 53,921,442 at the end of 2010. The Group/Company manages liquidity risks through: Short-term financial liabilities consist of derivative financial in- • standardised and centralised treasury management at Gro- In 2010 the Group/Company focused even more on the planning struments amounting to EUR 8,696,684. up level, of cash flows, in particular as regards cash inflows from lay away • uniform approach to banks in Slovenia and abroad, sales, which tend to be extremely unpredictable in the time of a • computer-assisted system for the management of cash crisis. Successful planning of cash flows enabled it to anticipate The Company’s liabilities by maturity flows of the parent company and all its subsidiaries, any liquidity surpluses or shortages in time and manage them • centralised collection of available cash through cash pooling. optimally. 0 to 6 6 to 12 More than 5 (in EUR) Liability months months 1 to 5 years years

Non-current financial liabilities 213,914,167 0 0 206,913,645 7,000,522 Half of the Group’s/Company’s total revenue is generated thro- The majority of financial liabilities arising from long-term and ugh its retail network in which cash and payment cards are used short-term loans are those of the parent company which also ge- Non-current operating liabilities 1,149,934 0 0 209,048 940,886 as the means of payment. This ensures regular daily inflows and nerates the majority of revenue. Short-term financial liabilities 222,056,826 180,409,303 41,647,523 0 0 mitigates liquidity risks. Short-term operating liabilities 234,410,590 234,024,469 386,121 0 0

As at 31 December 2009 671,531,517 414,433,772 42,033,644 207,122,693 7,941,408

Short-term financial liabilities consist of derivative financial in- struments amounting to EUR 8,638,201.

0 to 6 6 to 12 More than 5 (in EUR) Liability months months 1 to 5 years years

Non-current financial liabilities 293,077,579 0 0 292,247,911 829,668

Non-current operating liabilities 1,357,182 0 0 0 1,357,182

Short-term financial liabilities 131,661,896 92,250,030 39,411,865 0 0

Short-term operating liabilities 331,060,070 330,950,872 109,198 0 0

As at 31 December 2010 757,156,726 423,200,902 39,521,063 292,247,911 2,186,850

Short-term financial liabilities consist of derivative financial instru- ments amounting to EUR 8,696,684.

The increase in the prices of petroleum products is also reflec- ted in higher operating liabilities of the Group/Company. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 182 Annual Report Petrol 2010 183

7.3 Foreign exchange risk

The Petrol Group Petrol d.d. 31 DECEMBER 2009 31 DECEMBER 2009

(in EUR) EUR USD HRK BAM RSD CHF TOTAL EUR USD Total

Short-term operating receivables 198,727,794 511,502 32,030,418 11,824,273 1,044,215 0 244,138,201 222,380,224 4,050,423 226,430,647

Non-current operating receivables 1,267,839 0 0 0 0 0 1,267,839 1,133,452 0 1,133,452

Short-term financial receivables 1,105,935 205,218 74,909 0 0 0 1,386,062 2,974,660 0 2,974,660

Non-current financial receivables 9,369,706 0 426,873 0 1,861 0 9,798,440 14,322,182 0 14,322,182

Non-current operating liabilities (1,472,582) 0 0 0 0 0 (1,472,582) (1,149,934) 0 (1,149,934)

Short-term operating liabilities (163,741,315) (29,412,470) (19,546,126) (2,716,283) (1,173,248) 0 (216,589,443) (137,164,710) (97,245,880) (234,410,590)

Non-current financial liabilities (233,957,552) 0 (684,026) 0 0 (1,977,104) (236,618,681) (213,914,167) 0 (213,914,167)

Short-term financial liabilities (226,612,967) (34,124,653) (295,424) 0 0 (1,066,293) (262,099,337) (222,056,826) 0 (222,056,826)

Statement of financial position exposure (415,313,142) (62,820,403) 12,006,624 9,107,990 (127,173) (3,043,397) (460,189,501) (333,475,119) (93,195,457) (426,670,576)

The Petrol Group Petrol d.d. 31 DECEMBER 2010 31 DECEMBER 2010

(in EUR) EUR USD HRK BAM RSD CHF TOTAL EUR USD Total

Short-term operating receivables 233,181,198 1,594,214 54,352,646 21,915,814 1,078,354 0 312,122,226 284,445,151 1,506,089 285,951,240

Non-current operating receivables 966,473 0 0 0 0 0 966,473 966,472 0 966,472

Short-term financial receivables 3,136,454 0 10,101,126 0 436,835 0 13,674,416 7,627,732 0 7,627,732

Non-current financial receivables 10,895,689 0 47,192 0 1,723 0 10,944,604 10,347,154 96,561 10,443,715

Non-current operating liabilities (1,357,181) 0 (6,879) 0 0 0 (1,364,060) (1,357,182) 0 (1,357,182)

Short-term operating liabilities (150,004,758) (145,538,170) (28,288,194) (2,831,840) (1,774,980) 0 (328,437,942) (142,239,129) (188,820,941) (331,060,070)

Non-current financial liabilities (315,407,247) 0 (771,720) 0 (1,636,088) (1,006,125) (318,821,179) (293,077,579) 0 (293,077,579)

Short-term financial liabilities (135,058,104) (31,329,489) (4,035,773) (487,596) (1,090,725) (1,242,595) (173,244,281) (131,354,371) (307,525) (131,661,896)

Statement of financial position exposure (353,647,475) (175,273,445) 31,398,398 18,596,378 (2,984,880) (2,248,720) (484,159,743) (264,641,752) (187,525,816) (452,167,568)

Because the Group/Company purchases petroleum products in Hedging is performed in accordance with the Group’s rules for The Petrol Group Petrol d.d. US dollars, while sales in the domestic and foreign markets are the management of price and foreign exchange risks prepa- 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER made in local currencies, it is exposed to the risk of changes in red on the basis of the Regulation on the Price Methodology (in EUR) 2010 2009 2010 2009 the EUR/USD exchange rate. for Petroleum Products. The exposure to changes in the EUR/ Effect of forward contracts USD exchange rate is hedged against using foreign exchange Unrealised loss (491,910) 0 (491,910) 0 The following exchange rates prevailed in 2010: hedging. The EUR/USD exchange rate is thus fixed at the rate Unrealised gain 1,704,503 2,767,076 1,704,503 2,767,076 recognised under the Regulation on the Price Methodology for Realised loss (17,062,767) (18,144,593) (17,062,767) (18,144,593) 31 DECEMBER 31 DECEMBER Petroleum Products and the margin is maintained. The hedging per 1 euro 2010 2009 instruments used are forward contracts entered into with banks. Realised gain 22,282,243 17,168,291 22,282,243 17,168,242 USD 1,3280 1,4338 Total effect of forward contracts 6,432,069 1,790,774 6,432,069 1,790,725 HRK 7,3855 7,3066

BAM 1,9558 1,9558

RSD 107,4700 95,0250 The effects of forward contracts need to be considered toge- Considering that forward contracts for hedging against foreign ther with foreign exchange differences arising on the purchasing exchange risks are entered into with first-class Slovene banks, the of oil and petroleum products. The total effect of forward con- Group/Company estimates that the counterparty default risk is nil. tracts and foreign exchange differences consists of expenses of EUR 3,223,184 for the Group and expenses of EUR 2,136,304 for The Group is exposed to foreign exchange risks also in dealing wi- the Company. th subsidiaries in SE Europe. The risk incurred is a risk of changes WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 184 Annual Report Petrol 2010 185

in the EUR/HRK exchange rate arising from the sales of euro-de- Cash flow hedging is performed as follows: flow hedging) amounting to the fixed interest rate plus an inte- nominated goods in Croatia and a risk of changes in the EUR/RSD • partly through current operations (the Group’s/Company’s in- rest margin. The Group/Company therefore recognises the in- exchange rate arising from a bank loan of a Serbian subsidiary de- terest rate on operating receivables being Euribor-based) strument designated as effective directly in equity. nominated in EUR. Considering that due to an illiquid market the • partly through financial markets (the interest rate on bank de- cost of hedging against changes in the above exchange rates would posits being Euribor-based) To hedge against interest rate risks, the Group/Company uses be excessive and that the above items represent only a small part • partly through forward markets by entering into interest rate multiple financial instruments, of which most frequently the inte- of the Group’s operations, the Group is not exposed to significant swaps. rest rate swap. risks in this area. Hedging through the use of derivatives is aimed at achieving a Because partners in this area include first-class Slovene banks, the The Group/Company does not prepare a sensitivity analysis for fixed interest rate and, consequently, constant cash flows (cash Group/Company estimates that the counterparty default risk is nil. the EUR/USD exchange rate given that the Regulation on the Price Methodology, which is in force in its major markets (Slovenia and Croatia), allows for exchange rate changes to be passed on to re- Interest rate swaps by maturity tail prices. Retail prices change every 7 or 14 days, and the Group/ The Petrol Group Petrol d.d. Company uses forward contracts to hedge against exchange rate changes that are included in price changes. 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER (in EUR) 2010 2009 2010 2009

6 months or less 2,000,000 10,000,000 2,000,000 10,000,000 The Group/Company does not prepare a sensitivity analysis for other exchange rates (EUR/HRK, EUR/RSD and EUR/CHF) beca- 6 to 12 months 10,000,000 10,000,000 10,000,000 10,000,000 use it estimates the exposure to be minimal and the changes would 1 to 5 years 156,000,000 126,000,000 156,000,000 126,000,000 not have materially affected profit or loss. Total interest rate swaps 168,000,000 146,000,000 168,000,000 146,000,000

7.4 Price risk Effect of interest rate swaps The Group/Company hedges petroleum product prices primarily by using commodity swaps (variable to fixed price swap). Partners The Petrol Group Petrol d.d. in this area include global financial institutions and banks or suppli- 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER ers of goods, which is why the Group/Company believes that the (in EUR) 2010 2009 2010 2009 counterparty default risk is nil. Effect of interest rate swaps

The Petrol Group Petrol d.d. Unrealised loss on effective transactions 1,983,896 (2,973,538) 1,983,896 (2,973,538) 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER Unrealised loss on ineffective transactions (5,473) (110,420) (5,473) (110,420) (in EUR) 2010 2009 2010 2009 Unrealised gain on ineffective transactions 77,083 37,126 77,083 37,126 Effect of commodity swaps Realised loss (4,733,716) (3,481,897) (4,733,716) (3,481,897) Unrealised loss (457,124) (787,942) (457,124) (787,942) Realised gain 59,886 163,383 59,886 163,383 Unrealised gain 197,407 950,810 197,407 950,810 Total effect of interest rate swaps (2,618,324) (6,365,346) (2,618,324) (6,365,346) Realised loss (7,342,527) (15,700,860) (7,342,527) (15,700,860)

Realised gain 5,571,067 4,526,641 5,571,067 4,526,641 Exposure Total effect of commodity swaps (2,031,177) (11,011,351) (2,031,177) (11,011,351) The Group’s/Company’s exposure to the risk of changing inte- rest rates was as follows: Because commodity swaps are not designated as a hedging instru- 7.5 Interest rate risk ment in a hedge of the variability in cash flows attributable to a re- In the financing of capital investments and current operations, The Petrol Group Petrol d.d. cognised asset or liability, gains and losses are recognised directly interest rate risks are incurred as the Group/Company enters in- (in EUR) 2010 2009 2010 2009 in other finance income and expenses. Taking into account the hi- to long-term loan agreements based on Euribor, which changes Fixed interest rate gher margin achieved thanks to commodity swaps, the Company on a daily basis. As far as short-term financing is concerned, loan Total interest rate swaps 168,000,000 146,000,000 168,000,000 146,000,000 generated a net gain on commodity swaps of EUR 358,527 in 2010. agreements have a fixed interest rate, but they too are progres- sively adapted to the changes in Euribor. Net receivables/(liabilities) at fixed interest rate 168,000,000 146,000,000 168,000,000 146,000,000 The Group does not prepare a sensitivity analysis for changes in the Variable interest rate prices of petroleum products given that the Regulation on the Price Interest rate hedging is conducted in accordance with the Financial receivables 24,619,021 11,184,502 18,071,447 17,296,842 Methodology, which is in force in its major markets (Slovenia and Group’s policy for hedging against business risks as laid down in Financial liabilities (492,065,460) (498,718,018) (424,739,475) (435,970,993) Croatia), allows for changes in the prices of petroleum products to the rules on business risk management and instructions for hed- be passed on to retail prices, which change every 7 to 14 days. ging against interest rate risks. Net receivables/(liabilities) at variable interest rate (467,446,439) (487,533,516) (406,668,028) (418,674,151) WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 186 Annual Report Petrol 2010 187

Sensitivity analysis of cash flows for instruments with a 7.6 Equity management variable interest rate The main purpose of equity management is to ensure capital A change in the interest rate by 100 or 200 basis points on the ged. In performing the calculation, receivables/(liabilities) with adequacy, the best possible financial stability, and long-term solven- reporting date would have increased (decreased) net profit or variable interest rates are further decreased by the total amount cy for the purpose of financing operations and achieving maximum loss by amounts indicated below. The analysis assumes that all of interest rate swaps. The analysis was prepared in the same shareholder value. The Group/Company achieves this also through variables, in particular foreign exchange rates, remain unchan- manner for both years. a policy of stable dividend payout to the Company’s owners.

To this end, the Company and the Group regularly monitor the Change in net profit or loss in the case of an increase by 100 or 200 bp debt-to-equity ratio:

The Petrol Group Petrol d.d. The Petrol Group Petrol d.d.

(in EUR) 2010 2009 2010 2009 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER (in EUR) 2010 2009 2010 2009 Cash flow variability (net) - 100 bp (2,994,464) (3,415,335) (2,386,680) (2,726,742) Non-current financial liabilities 318,821,179 236,618,681 293,077,579 213,914,167 Cash flow variability (net) - 200 bp (5,988,929) (6,830,670) (4,773,361) (5,453,483) Short-term financial liabilities 173,244,281 262,099,337 131,661,896 222,056,826

Total financial liabilities 492,065,460 498,718,018 424,739,475 435,970,993

Total equity 404,581,172 381,540,112 419,601,118 393,458,540 Change in net profit or loss in the case of a decrease by 100 or 200 bp Debt/Equity ratio 1.22 1.31 1.01 1.11 Net financial liabilities 474,521,689 490,928,530 409,965,996 429,061,353

The Petrol Group Petrol d.d. Net Debt/Equity ratio 1.17 1.29 0.98 1.09 (in EUR) 2010 2009 2010 2009 Despite the financial and economic crisis that also affected the If net financial liabilities are taken into account in the calculation, Cash flow variability (net) - 100 bp 2,994,464 3,415,335 2,386,680 2,726,742 Group’s/Company’s operations, the ratio decreased, which is a the debt-to-equity ratio is even more favourable. Cash flow variability (net) - 200 bp 5,988,929 6,830,670 4,773,361 5,453,483 sign of a positive trend of continued improvement and streng- thening of the Group’s/Company’s financial position.

7.7 Carrying amount and fair value of financial instruments

The Petrol Group Petrol d.d. 31 DECEMBER 2010 31 DECEMBER 2009 31 DECEMBER 2010 31 DECEMBER 2009 Carrying Carrying Carrying Carrying (in EUR) amount Fair value amount Fair value amount Fair value amount Fair value

Non-derivative financial assets at fair value

Available-for-sale financial assets 11,338,780 11,338,780 14,866,548 14,866,548 11,259,737 11,259,737 14,787,505 14,787,505

Non-derivative financial assets at amortised cost

Financial receivables 24,619,021 24,619,021 11,184,502 11,184,502 18,071,447 18,071,447 17,296,842 17,296,842

Operating receivables 313,088,698 313,088,698 245,406,040 245,406,040 286,917,712 286,917,712 227,564,099 227,564,099

Cash 17,543,771 17,543,771 7,789,488 7,789,488 14,773,479 14,773,479 6,909,640 6,909,640

Total non-derivative financial assets 366,590,270 366,590,270 279,246,578 279,246,578 331,022,375 331,022,375 266,558,086 266,558,086

Non-derivative financial liabilities at amortised cost

Bank loans and other financial liabilities (483,368,776) (488,076,386) (490,079,817) (494,196,682) (416,042,790) (420,750,400) (427,332,792) (431,449,657)

Operating liabilities (329,802,002) (329,802,002) (218,062,025) (218,062,025) (332,417,252) (332,417,252) (235,560,524) (235,560,524)

Total non-derivative financial liabilities (813,170,778) (817,878,388) (708,141,842) (712,258,707) (748,460,042) (753,167,652) (662,893,316) (667,010,181)

Derivative financial instruments at fair value

Derivative financial instruments (assets) 3,848,931 3,848,931 3,121,398 3,121,398 3,848,931 3,848,931 3,130,062 3,130,062

Derivative financial instruments (liabilities) (8,696,684) (8,696,684) (8,638,201) (8,638,201) (8,696,684) (8,696,684) (8,638,201) (8,638,201)

Total derivative financial instruments (4,847,753) (4,847,753) (5,516,803) (5,516,803) (4,847,753) (4,847,753) (5,508,139) (5,508,139) WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 188 Annual Report Petrol 2010 189

Presentation of financial assets measured at fair value according to the fair value The Petrol Group Petrol d.d. hierarchy 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER (in EUR) 2010 2009 2010 2009 The Petrol Group Petrol d.d. Investments in group companies: 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER subsidiaries - - 200,531,435 213,663,093 (in EUR) 2010 2009 2010 2009 jointly controlled entities 16,386,748 15,318,725 61,270,000 61,137,000 Total financial assets at fair value through profit or loss 3,848,931 3,121,398 3,848,931 3,130,062 associates 122,294,012 121,282,983 154,860,000 155,070,965 Available-for-sale financial assets 0 1,481,633 0 1,481,633 Non-current financial receivables: Level 1 financial assets at fair value 3,848,931 4,603,031 3,848,931 4,611,695 subsidiaries - - 7,554,815 13,372,709 Available-for-sale financial assets 11,338,780 13,384,915 11,259,737 13,305,872 jointly controlled entities 7,961,235 8,393,449 0 0 Level 3 financial assets at fair value 11,338,780 13,384,915 11,259,737 13,305,872 associates 0 241,794 0 241,794 Total financial assets at fair value 15,187,711 17,987,946 15,108,668 17,917,567 Non-current operating receivables: subsidiaries - - 0 1,347 8. Related party transactions Short-term operating receivables:

The Petrol Group Petrol d.d. subsidiaries - - 65,027,893 40,536,900 (in EUR) 2010 2009 2010 2009 jointly controlled entities 2,378,482 893,041 2,365,472 882,376 associates 389,491 569,481 389,491 551,110 Sales revenue: Short-term financial receivables: subsidiaries - - 210,488,720 132,832,235 subsidiaries - - 5,017,758 2,357,037 jointly controlled entities 7,560,487 2,565,192 7,486,636 2,436,321 jointly controlled entities 418,941 183,298 0 0 associates 6,181,504 2,862,043 6,108,084 2,676,698 associates 0 4,363 0 4,363 Cost of merchandise sold: Short-term deposits (up to 3 months) subsidiaries - - 835,496,593 708,854,018 subsidiaries - - 269,131 2,915,432 jointly controlled entities 375,094 537,563 375,094 537,563 Short-term financial liabilities: associates 56,667,727 41,675,618 21,314,841 8,505,406 subsidiaries - - 9,065,459 9,456,022 Cost of sales: jointly controlled entities 1,181,719 1,449,003 1,181,719 1,449,003 subsidiaries - - 19,270,590 22,437,430 associates 0 970,749 0 970,749 jointly controlled entities 7,406,824 7,144,327 7,406,824 7,144,327 Short-term operating liabilities: associates 87,451 148,139 84,527 107,165 subsidiaries - - 133,175,186 83,508,163 General and administrative costs: jointly controlled entities 755,055 740,696 774,127 737,185 subsidiaries - - 17,371 2,213 associates 8,394,055 4,824,621 1,589,989 272,334 jointly controlled entities 3,450 1,200 0 0 associates 5,383 7,251 4,698 6,306 In 2010 the Group/Company did business with Perspektiva FT, d.o.o., temporary holding of certificates of deposit issued by domestic com- Finance income from interests in group companies: Vizija Holding Ena k.d.d. and CGP, d.d., which have ownership ties with mercial banks amounting to EUR 5,351,924 (2009: 0). subsidiaries - - 9,304,266 5,587,468 a member of the Supervisory Board of Petrol d.d., Ljubljana. jointly controlled entities 3,053,174 2,650,935 3,998,149 3,070,822 In 2010 CGP, d.d., provided to Petrol, d.d., Ljubljana construction and associates 8,594,776 16,201,717 3,919,500 5,387,387 The business with Perspektiva FT, d.o.o., and Vizija Holding Ena, k.d.d., finishing services amounting to EUR 308,208 (2009: EUR 31,421) and Finance expenses for interests in group companies: was limited to transactions in long-term certificates of deposit issued purchased EUR 2,620,734 (2009: EUR 3,798,332) worth of goods and by domestic banks. The purchase of certificates of deposits issued by products from Petrol, d.d, Ljubljana in the same period. The balance subsidiaries - - 0 0 commercial banks by Petrol, d.d., from the said companies was done of receivables from CGP, d.d., as at 31 December 2010 stood at EUR jointly controlled entities 332,929 169,679 0 0 on a temporary basis, i.e. for a period of not more than two months, to 939,813 (2009: EUR 1,450,517), with the balance of liabilities to CGP, associates 1,149,852 22,366,489 0 0 manage its current liquidity. Long-term certificates of deposits issued d.d., as at 31 December 2010 amounting to EUR 308,101 (2009: 0). Finance income from interest: by commercial banks consist of paper-form securities that were en- subsidiaries - - 2,092,431 1,448,572 dorsed and transferred to Petrol, d.d., upon each purchase. Petrol d.d., Ljubljana is a joint-stock company listed on the Ljubljana jointly controlled entities 196,760 450,151 0 0 Stock Exchange. The ownership structure as at 31 December 2010 associates 11,406 24,709 11,406 24,709 In 2010 Petrol, d.d., temporarily purchased from the above compani- is presented in chapter Corporate and Governance System of Petrol d.d., Ljubljana in the business report. Finance expenses for interest: es the certificates of deposit issued by domestic commercial banks for the total amount of EUR 54,468,599 (2009: EUR 14,024,333), subsidiaries - - 317,174 1,116,971 reselling them to the both companies for the total amount of EUR All transactions with parties related to the Group/Company were car- jointly controlled entities 58,456 58,342 58,456 58,342 49,116,675 (2009: EUR 14,024,333) in the period concerned. The in- ried out based on the market conditions applicable to non-related par- associates 1,279 31,884 1,279 31,884 vestments held by Petrol, d.d., as at 31 December 2010 included a ty transactions. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 190 Annual Report Petrol 2010 191

9. Remuneration of Supervisory Board 10. Contingent liabilities and Management Board members and employees with individual contracts Contingent liabilities for guarantees issued Maximum contingent liabilities for guarantees issued stood at EUR 467,079,752 as at 31 December 2010 and were as follows: Remuneration of Supervisory Board members of Petrol d.d., Ljubljana Petrol d.d. Petrol d.d. (in EUR) Meeting fees (IN EUR) 2010 2009 2010 2009 Tomaž Kuntarič, President 5,453 Guarantee issued to: Value of guarantee issued Guarantee amount used Bruno Korelič, Deputy President 4,421 Cypet-Trade Ltd 170,626,506 164,069,047 116,218,602 58,931,897 Dari Južna, Member 4,702 Petrol - Bonus d.o.o. 154,500,000 154,500,000 0 0 Tomaž Berločnik, Member (until 11 March 2010) 330 Petrol-Trade G.m.b.H. 12,265,061 51,987,237 1,925,852 1,847,606 Irena Prijović, Member (since 6 May 2010) 1,980 Euro - Petrol d.o.o. 42,486,881 27,599,279 33,689,049 13,436,360 Urban Golob, Member 4,702 Petrol Trgovina d.o.o. 32,290,475 15,748,228 18,224,741 7,110,514 Žiga Debeljak, Member 4,702 Bio goriva d.o.o. 5,406,000 5,406,000 436,000 636,000 Samo Gerdin, Member (until 23 November 2010) 3,877 Petrol Energetika d.o.o. 15,262,006 2,160,006 556,854 0 Boštjan Terstenjak, Member (since 6 December Petrol BH Oil Company d.o.o. 1,789,522 1,800,000 1,391,429 1,410,870 2010) 413 Petrol-Jadranplin d.o.o. 3,007,803 0 1,000,000 0 Franc Premrn, Member 4,702 Aquasystems d.o.o. 911,309 911,309 911,309 911,309 Andrej Tomplak, Member 3,878 Rodgas AD 300,000 300,000 100,000 200,000 Total 39,163 Petrol Tehnologija d.o.o. 50,000 50,000 26,522 0 Total 438,895,563 424,531,106 174,480,358 84,484,556 Other guarantees 4,739,271 4,250,427 4,739,271 4,250,427 Remuneration of Management Board members of Petrol d.d., Ljubljana Bills of exchange issued as security 23,444,918 17,294,206 23,444,918 17,294,206 Other Total contingent liabilities for guarantees issued 467,079,752 446,075,739 202,664,547 106,029,189 Benefits - receipts Fixed Costs insurance and (in EUR) portion reimbursed premiums benefits Total Aleksander Svetelšek, President of the Management Board 144,016 1,186 3,527 27,021 175,750

Roman Dobnikar, Member of the Management Board 132,005 1,221 9,959 6,385 149,569 Contingent liabilities for lawsuits totalled EUR 311,507 as at 31 December 2010 compared to EUR

Janez Živko, Member of the Management Board 132,005 1,152 5,683 24,824 163,663 The total value of lawsuits against the Company as defendant 246,496 as at 31 December 2009. and debtor totals EUR 1,609,608. Interest on overdue amo- Mariča Lah, Member of the Management Board 132,005 1,186 8,471 11,701 153,362 unts arising from claims stood at EUR 315,877 as at 31 Decem- Option contracts Rok Vodnik, Member of the Management Board 132,005 1,144 10,208 12,273 155,629 ber 2010. The Company’s management estimates that there Upon the establishment of the jointly controlled entity Petrol Slo- Bojan Herman, Worker Director (until 20 September is high probability that some of these lawsuits will be lost. As a venia Tirana Wholesale Sh.A. in 2007, the Company entered into 2010) 46,826 905 5 73,664 121,401 result, the Company set aside short-term provisions, which sto- an option contract based on which it is entitled to purchase the Samo Gerdin, Worker Director (since 24 November 2010) 7,636 536 43 320 8,535 od at EUR 419,174 as at 31 December 2010 compared to EUR cofounder's share after five years of the establishment of the jo- Total 726,497 7,331 37,894 156,187 927,909 498,443 as at 31 December 2009. In addition, the Company cre- intly controlled entity at market value as assessed on that date. ated short-term provisions for interest on overdue amounts ari- Considering the nature of the option contract, its fair value as at Other receipts and benefits relate to annual leave allowances, ter- Total remuneration of other supervisory board members (exclu- sing from claims, which totalled EUR 307,673 as at 31 December 31 December 2010 is estimated to be nil. mination benefits, use of company vehicles and other benefits. ding members of the Company’s Supervisory Board) stood at 2010 compared to EUR 228,247 as at 31 December 2009. EUR 24,422. Upon the acquisition of the subsidiary Euro - Petrol d.o.o. in Total remuneration paid in 2010 by the Company and the Gro- The total value of lawsuits against the Group as defendant and 2008, the Company entered into an option contract based on up to employees with individual contracts who are not subject to The Company and the Group had no receivables from or liabilities debtor totals EUR 1,771,706. Interest on overdue amounts ari- which it is entitled to purchase the counterparty's share after five the tariff part of the collective labour agreement (excluding Ma- to Supervisory Board members as at 31 December 2010. sing from claims stood at EUR 315,985 as at 31 December 2010. years of the establishment of the subsidiary at market value as nagement Board members) stood at EUR 4,526,324 and EUR The Group’s management estimates that there is high probabili- assessed on that date. Considering the nature of the option con- 5,559,353, respectively. The Company and the Group had no receivables from or liabilities ty that some of these lawsuits will be lost. As a result, the Group tract, its fair value as at 31 December 2010 is estimated to be nil. to Management Board members as at 31 December 2010, except set aside short-term provisions, which stood at EUR 554,744 as Total remuneration paid in 2010 by the Company and the Group for liabilities arising from December salaries payable in January at 31 December 2010 compared to EUR 580,621 as at 31 De- Off-balance-sheet assets and liabilities to D.S.U. d.o.o. to the members of the Workers’ Council stood at EUR 9,305 and 2011. cember 2009. In addition, the Group created short-term provisi- In accordance with provisions of Article 57 of the Regulation on EUR 12,867, respectively. ons for interest on overdue amounts arising from claims, which the Methodology for Preparing Opening Balance Sheets and WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 Annual Report Petrol 2010 192 Annual Report Petrol 2010 193

a contract for the establishment of off-balance-sheet records of assets and contingent liabilities entered into with the Deve- lopment Fund of the Republic of Slovenia (whose legal succes- sor is the company D.S.U. d.o.o.), the Company reduced its assets on account of their elimination from the statement of fi- nancial position and establishment of off-balance-sheet records of investments and receivables for goods due from Energoin- vest, Bosanski Brod, in the republics of former Yugoslavia. The value of the contingent liability arising from investments is esti- mated at SIT 0, whereas the estimated value of the receivables for goods totals SIT 184,000,000. The Company’s off-balance- -sheet assets and liabilities arising from the above items stood at EUR 767,818 as at 31 December 2009.

Inventories owned by other entities The Group’s and Company’s inventories as at 31 December 2010 included commodity reserve stocks of the Republic of Slo- venia totalling EUR 121,669,490. The Company’s and Group’s in- ventories as at 31 December 2010 also included goods delivered on consignment totalling EUR 50,482,429 and EUR 53,090,176, respectively. The goods delivered on consignment are carried at cost, while the commodity reserve stocks are carried at calcula- ted prices.

11. Events after the reporting date There were no events after the reporting date that would signifi- cantly affect the disclosed financial statements for 2010. WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621 WorldReginfo - ab5d3404-c0ab-403b-a6af-b1f01ee2f621