Aerodrom Ljubljana, d.d. ANNUAL REPORT 2012

Transcription

1 Aerodrom Ljubljana, d.d. ANNUAL REPORT 2012 March, 2013

2 CONTENTS DECLARATION BY THE MANAGEMENT BOARD... 4 BUSINESS REPORT INTRODUCTION HIGHLIGHTS OF OPERATIONS SIGNIFICANT EVENTS LETTER FROM THE MANAGEMENT BOARD SUPERVISORY BOARD REPORT PRESENTATION OF AERODROM LJUBLJANA, D.D CORPORATE GOVERNANCE STATEMENT STATEMENT OF COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE STATEMENT OF COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE FOR COMPANIES WITH STATE CAPITAL INVESTMENTS REPORTING GUIDELINES FOR COMPANIES WITH STATE CAPITAL INVESTMENTS RECOMMENDATIONS OF THE CAPITAL ASSETS MANAGEMENT AGENCY MAIN FEATURES OF THE INTERNAL CONTROL SYSTEM AND OF RISK MANAGEMENT IN RELATION TO THE FINANCIAL REPORTING PROCEDURE INFORMATION PROVIDED UNDER THE SIXTH PARAGRAPH OF ARTICLE 70 OF THE ZGD GENERAL MEETING OF SHAREHOLDERS COMPOSITION AND FUNCTIONING OF MANAGEMENT AND SUPERVISORY BODIES COMPANY OPERATIONS IN 2012 AND PLANS FOR ECONOMIC CONDITIONS MARKET POSITION AND MARKETING ACTIVITIES TRAFFIC ANALYSIS OF PERFORMANCE EMPLOYEES INVESTMENTS IN INTANGIBLE ASSETS, BUILDINGS AND EQUIPMENT AELG SHARES AND OWNERSHIP OF THE COMPANY RISK MANAGEMENT STRATEGIC RISKS BUSINESS RISKS FINANCIAL RISKS SAFETY AND SECURITY RISKS

3 5.5 ENVIRONMENTAL RISKS GENERAL RISKS SUSTAINABLE DEVELOPMENT RESPONSIBILITY TO EMPLOYEES RESPONSIBILITY TO AIRPORT USERS AND THE GENERAL PUBLIC RESPONSIBILITY TO THE SOCIAL ENVIRONMENT RESPONSIBILITY TO THE NATURAL ENVIRONMENT RESPONSIBILITY FOR SAFETY RESPONSIBILITY FOR QUALITY ASSURANCE FINANCIAL REPORT DECLARATION BY THE MANAGEMENT BOARD INDEPENDENT AUDITOR'S REPORT FINANCIAL STATEMENTS BALANCE SHEET INCOME STATEMENT AND STATEMENT OF OTHER COMPREHENSIVE INCOME CASH FLOW STATEMENT STATEMENT OF CHANGES IN EQUITY SIGNIFICANT ACCOUNTING POLICIES REPORTING COMPANY BASIS FOR COMPILING FINANCIAL STATEMENTS SIGNIFICANT ACCOUNTING POLICIES NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE BALANCE SHEET NOTES TO THE INCOME STATEMENT NOTES ON THE CASH FLOW STATEMENT Financial risks OTHER EXPLANATORY NOTES

4 Airports are strategic companies in any country or region where they operate, and are under the direct influence of the economic developments in their environment. Given the extensive infrastructure managed by any airport company, fixed costs account for a high proportion of their total costs. The airport sector typically has high capital costs and investment in development. However airport revenue partly depends on the number of airlines and the number of routes served. European airports operate in a competitive environment, and are fighting one another for passengers. Airports can lose passengers, and a loss of passengers means a decline in revenues from airport services and commercial services. All airports are therefore endeavouring to maximise passenger numbers and to improve their network of routes. The European airport sector saw intensive work done in 2012 to prepare for the changes in European legislation on airports, civil aviation safety and security, the system of state aid and numerous other areas. Legislation can have a significant impact on airport operating costs, which in the end are passed onto the passenger, thereby affecting the size of the market. There has therefore been a great deal of coordination between airports and the European institutions proposing the legislative changes, and this will continue in Airports operate in a competitive environment, but are also subject to extensive regulatory constraints. Only the right balance between regulation and free competition can ensure that the airport sector develops smoothly, and that the European Union s targets are met. Aerodrom Ljubljana also operates in this business environment, and the general economic crisis in Slovenia has had unpleasant consequences for the company. In addition to the troubles of the domestic airline, there is now a decline in the standard of living and in economic activity. We ended the financial year with both passenger numbers and cargo tonnage down on the previous year. Additional commercial revenues nevertheless allowed us to maintain our level of revenue, and to generate a profit for the shareholders. We are actively marketing the airport and seeking to exploit the competitive advantages of our position in the region, quality of service and small size. Preparations are being finalised for the beginning of our largest investment of the last 35 years. A new low-cost airline was welcomed late on in the year. Perhaps the arrival of Wizz Air is a sign of better things to come. 3

5 DECLARATION BY THE MANAGEMENT BOARD The members of the Management Board of Aerodrom Ljubljana, d.d., namely Zmago Skobir (president of the Management Board) and Bernarda Trebušak (member of the Management Board), hereby guarantee that the company s annual report, including the corporate governance statement, is compiled and published in accordance with the Companies Act, the Financial Instruments Market Act and the International Accounting Standards. In this regard, the company conducts itself in accordance with the competences, due diligence and responsibilities set out in the Companies Act for a public limited company. In accordance with Article 110 of the Financial Instruments Market Act, the president and member of the Management Board hereby declare that, to the best of our knowledge: the financial report of Aerodrom Ljubljana, d.d. for 2012 was compiled in accordance with the International Financial Reporting Standards and that it provides a true and fair picture of the assets, liabilities, financial position, operating results and total comprehensive income of Aerodrom Ljubljana, d.d., and the business report includes a fair presentation of the development and performance of the company s business and its financial position, including a description of the principal types of risks to which Aerodrom Ljubljana, d.d. is exposed. The Management Board is also responsible for the proper administration of accounts, for taking appropriate measures to secure property and other assets, and for maintaining the value of assets and preventing and detecting fraud and other irregularities. The Management Board also confirms that the financial statements of Aerodrom Ljubljana, d.d. were compiled on a going-concern basis, that the relevant accounting policies were consistently applied, and that accounting estimates were made according to the principle of prudence and the diligence of a good manager. The president and member of the Management Board of Aerodrom Ljubljana, d.d. declare that we were briefed on and agree with the content of all substantive components of the annual report, as confirmed by our signatures. Bernarda Trebušak, Member of the Management Board Zmago Skobir, President of the Management Board Zg. Brnik, 14 March

6 BUSINESS REPORT 1 INTRODUCTION 1.1 HIGHLIGHTS OF OPERATIONS 1-12/ /11 Number of passengers 1,198,911 1,369,485 Aircraft movements 35,019 39,267 Cargo (in tonnes) 17,031 19,659 Operating revenues - in thousand euros 30,846 34,001 Net sales revenue - in thousand euros 30,676 33,230 Operating expenses - in thousand euros 25,621 26,413 EBITDA - operating profit before interest, taxes and depreciation / amortization - in thousand euros 10,535 14,295 EBIT - operating profit - in thousand euros 5,225 7,587 Net finance income / costs - in thousand euros 1,393-1,103 Profit (or loss) before tax - in thousand euros 6,618 6,484 Net profit (or loss) - in thousand euros 5,193 5,257 Total comprehensive income for the period - in thousand euros 4,333 3,275 EBITDA margin % EBIT margin in % Value added - in thousand euros (gross return on operations - costs of materials and services - other operating expenses excluding revaluation operating expenses and provisions) 22,845 26,500 Value added per employee - (value added / average no. of employees based on hours worked) 56,582 65,795 Net profit (or loss) per employee - (net profit (or loss) / average no. of employees based on hours worked) 12,862 13,053 No. of employees as at 31 December Average no. of employees based on hours worked Assets as at 31 December - in thousand euros 130, ,797 Capital and reserves as at 31 December - in thousand euros 124, ,726 Investments in intrangible assets, buildings and equipment - in thousand euros 2,209 2,416 Net ROE - in % (net profit (loss) / average capital ad reserves excluding net profit for the period) 4.25% 4.36% Net ROA (loss) - in % ((net profit (loss) + interest obtained) / average assets) 4.03% 4.13% Basic earnings per share - (net profit (loss) for ordinary shareholders / average number of ordinary shareholders) Diluted earnings per share - (net profit (loss) / average number of all shares) Closing share price as at 31 December Book value of shares as at 31 December - (capital and reserves / total number of shares issued) Closing share price to book value of shares (P / B)

7 1.2 SIGNIFICANT EVENTS SIGNIFICANT EVENTS IN 2012 In March 2012 easyjet withdrew its route to Paris, but increased its number of flights to London Stansted (from four times to seven times a week). In the summer timetable Finnair operated four flights a week linking Ljubljana with Helsinki. Job Air, which operated the Ljubljana-Prague route for CSA Czech Airlines, ceased flying on 18 June. At the Annual General Meeting held on 22 June 2012, the shareholders decided on the use of the distributable profit for 2011, conferred official approval on the Management Board and Supervisory Board for their work in the previous year, appointed an auditor for the 2012 financial year and confirmed the changes to the payments to the Supervisory Board. On 26 June 2012 the Supervisory Board discussed and adopted the company s business plan for the 2012 to 2017 period. Aerodrom Ljubljana took the decision to resolve the liquidity problems of Adria Airways Tehnika d.d. by means of a short-term loan in the total amount of EUR 1.6 million. The loan was disbursed in three instalments. An invitation to tender for construction finishing work on Terminal 2, which will be the company s main investment in the coming years, was published on 3 September The low-cost airline Wizz Air launched routes to Brussels and London in the winter timetable, beginning on 29 October On 18 December 2012 the European Commission issued a decision earmarking EU funds for the construction of the new T2 passenger terminal. On 13 December 2012 the SMA issued a ruling prohibiting Slovenska odškodninska družba d.d., Kapitalska družba pokojninskega in invalidskega zavarovanja d.d., Zavarovalnica Triglav d.d. and the Republic of Slovenia from exercising their voting rights at the target company (Aerodrom Ljubljana, d.d.) for reason of a breach of the Takeovers Act (ZPre-1) SIGNIFICANT EVENTS AFTER THE END OF 2012 Significant events after the end of 2012 are given in point of the Financial Report. 6

8 1.3 LETTER FROM THE MANAGEMENT BOARD Last year saw a slowdown in growth in passenger traffic in Europe. In contrast to 2011, when growth was still reasonable, passenger traffic rose by just 1.8%, while cargo tonnage declined by 2.8%. Even more evident than in 2011 was the gap between growth in traffic at airports in the EU, where passenger traffic increased by barely 0.2% according to ACI figures, and traffic at airports in other European countries, where growth stood at 8.8%. The situation is even more difficult for smaller airports because of their lower market potential, which is a major obstacle to attracting new passengers. They are significantly more dependent on individual airlines, as a result of which they are the first to suffer in network consolidation and the withdrawal of less-profitable routes. Aerodrom Ljubljana operates in this very kind of highly competitive environment. In 2012 we felt the effects of the continuing economic slowdown at home and across Europe. The domestic airline s strategy meant that we also faced a decline in traffic and a loss of revenue on the domestic market. Given that we operate in a sector with high fixed costs incurred by providing infrastructure and ensuring that it functions without disruption and in meeting standards of safety and quality of service, the possibilities of adjusting costs to the fluctuating traffic are limited. Despite the adverse situation and the numerous complex challenges that we faced, we succeeded in ending 2012 with a net profit that was down only slightly on that generated in The decline in the domestic airline s traffic was larger than forecast, which was reflected in a fall in operating revenues, while we succeeded in maintaining our revenue on foreign markets at the same level as in There were certain changes in individual airlines traffic, but from the point of view of revenue we were able to compensate by means of an increase at other foreign airlines. Our hard work over the years to increase traffic by low-cost airlines also bore fruit: the arrival of Wizz Air in the final quarter brought an expansion in the low-cost services that we offer, thereby bringing us closer to meeting the targets set out in the strategy envisaging an increased low-cost airline presence at the airport. We are also seeking opportunities outside our core line of business, and in 2012 we worked with two world-renowned partners who organised high-profile events at the airport. Although we primarily adjusted to the fall in operating revenues by streamlining on the cost side, we have maintained our quality of service at a high level, and this remains one of the company s priorities. The expansion and renovation of the business lounge has improved standards for passengers travelling in business class, and has expanded retail services available in international departures. Traffic was down on 2011 (passenger numbers were down 12.5%, while the number of aircraft movements was down 10.8%), and the figures also fell short of the forecasts in the annual plan (passenger numbers were 9.1% less than forecast, and the number of aircraft movements was 8.4% less than forecast). The shortfall on the forecast was primarily the result of the domestic airline s traffic being significantly less than forecast (it recorded a fall of almost 17% in passenger numbers, not the 7% forecast), but the fall of 7.2% in passenger numbers compared with 2011 meant that foreign airlines traffic was also short of the forecast (by 7.8%, although the trend is now positive). There was also a decline in traffic in terms of the number of aircraft movements, which was down 10.8% on 2011 and down 8.4% on the forecast, as airlines replaced smaller aircraft with larger aircraft, which is beneficial in financial (revenue) terms, as the price of a significant portion of our services is tied to aircraft weight. Total cargo tonnage also showed no growth: (total tonnage in 2012 was down 13.4% on 2011, and down 2.8% on the forecast in the annual plan), although air cargo strengthened by 6.6% compared with the previous year, and was 7.4% more than forecast. Operating expenses were a beneficial factor in earnings, and were down 3.0% on 2011 and down 0.9% on the forecast. Earnings before interest, taxes, depreciation and amortisation (EBITDA) were down 26.3% on 2011, and down 11.6% on the forecast. Net profit amounted to EUR 5,193 thousand, down just 1.2% on 2011, and 11.6% less than forecast. Because passenger numbers are no longer falling at the domestic airline, and foreign airlines traffic is increasing, we can forecast a moderate recovery in traffic this year of 2.2% overall. By actively marketing our services we will endeavour in particular to retain as many of the domestic airline s routes as possible, and to increase the number of flights and passengers of foreign airlines, while we will also pursue another of our targets in connection with traffic at the airport carried by low-cost airlines, raising the profile of established routes and working to launch new routes. The total 7

9 number of aircraft movements is forecast to fall by just 0.9% in 2013, while the decline in economic activity in Slovenia means that we have been more cautious with the forecast for total cargo tonnage, where a decline of 3.7% is predicted. Operating revenues and expenses will be down slightly on 2012, as will net profit. The company s financial policy will remain conservative, as it has to date, with a high ratio of equity, although in the coming years internal resources will not suffice for the major investments planned, and external financial resources must be sought. Given the changing situation on the aviation market in Slovenia and across Europe, in 2013 we will make certain adjustments to the company s business plan for the 2012 to 2017 period. Circumstances dictate that the company s strategic objectives should be more cautious, but still ambitious yet feasible. The members of the Management Board are convinced that the construction of the terminal remains a vital investment that will allow us to expand traffic, to attain satisfactory standards of quality in serving passengers and aircraft, and to generate better commercial results. Together with the other core investments that we are planning over the coming years (the complete renovation of the existing terminal, the construction of a cargo terminal and a warehousing and logistics facility), this will allow us to reaffirm our competitive advantage over competitors in the region, namely excellent infrastructure. The European Commission is also convinced of the purpose and value of the development project, having approved grants for the project on the basis of an investment programme with an appropriate rate of return and the repayment of refundable funding. The economic situation can be expected to remain tough in But experience shows that recession in the aviation industry is always followed by a rapid boom. We must therefore be ready, as only in this way can we realise our vision and keep the company healthy and profitable in the long term. Bernarda Trebušak, Member of the Management Board Zmago Skobir, President of the Management Board 8

10 1.4 SUPERVISORY BOARD REPORT Operations of the Supervisory Board In 2012 the Supervisory Board comprised: Anja Strojin Štampar, (president), Miran Kunst, Marko Mulej, Stanislav Boštjančič, Drago Čotar (deputy-president) and Igor Domevščik. Miran Kunst did not attend sessions of the Supervisory Board due to health problems. The Supervisory Board convened 12 times in Members of the Supervisory Board acted independently when making their decisions. They were sufficiently prepared for the topics discussed at sessions, offered constructive suggestions and comments, and adopted decisions within the scope of their authority. Supervisory Board members acted in line with the rules on the protection of trade secrets and the rules of conduct in cases of conflicts of interest. The company s operations were monitored in accordance with the mandate and competences defined by the Companies Act (ZGD-1) and outlined in the company s Articles of Association and the Rules of Procedure of the Supervisory Board. When performing their functions the members of the Supervisory Board followed the recommendations of the Corporate Governance Code, the Slovenian Directors Association and the recommendations of the Capital Assets Management Agency (CAMA) to the greatest possible extent, introducing and implementing best supervisory practices at the company. The Management Board and Supervisory Board speak of the fulfilment of the recommendations in the Corporate Governance Statement. The Supervisory Board carried out its tasks in 2012 within the scope of its authority in the following key areas: In accordance with the ZGD-1, the Supervisory Board discussed and adopted the company s audited 2011 annual report, the report on the approval of the 2011 annual report and the statement of compliance with the Corporate Governance Code for It also discussed the CAMA s recommendation on monetary remuneration for holding office on a Supervisory Board. The Supervisory Board also agreed with the management s proposal on the use of distributable profit. Based on the audit committee s proposal, it proposed Deloitte revizija d.o.o. as the auditor for All of this (other than the profit distribution: under a counterproposal the general meeting voted in favour of a higher dividend) was confirmed by the shareholders at the company s 16 th ordinary general meeting, when official approval was also conferred upon the Management Board and Supervisory Board for their work during the 2011 financial year. In accordance with the Remuneration of Corporate Managers Act (ZPPOGD) and on the basis of the Act on the Criteria for Payments of Variable Remuneration to the Management Board, the Supervisory Board assessed the work of the Management Board in 2011, taking account of qualitative and quantitative criteria, and approved the payment of the variable remuneration to the two board members. It also adopted new qualitative and quantitative criteria for monitoring the work of the Management Board and for determining the variable remuneration in the 2013 financial year. The Supervisory Board also did its best to meet the recommendations of the Corporate Governance Code for public limited companies and the recommendations of the Capital Assets Management Agency (CAMA). In March 2012 it discussed a special report by the Management Board on the implementation of the aforementioned recommendations. The Supervisory Board adopted the framework programme of work and activities in 2012, in which it included the active monitoring of procedures in connection with the investment in the new passenger terminal, and appointed an investment committee for this purpose on 30 January Two external experts, one in construction and one in finance, were appointed to the committee alongside three members of the Supervisory Board. With the committee s support the Supervisory Board formulated several recommendations in connection with the conclusion of relations with external contractors and the tendering for the construction and finishing work for the new passenger terminal. 9

11 It was actively involved in the ongoing development of internal auditing, the training programme, the assessment of the work of the Supervisory Board, monitoring of the realisation of the recommendations of the corporate governance codes and the CAMA recommendations, and the systematic monitoring of affiliates. The Supervisory Board was briefed on the internal auditor s report regarding internal audits of the company conducted in 2011, the plan for internal audits in 2012 and a report on the auditor s work in the first half of The Supervisory Board devoted particular attention to the work of the audit committee, which diligently monitored the implementation of internal auditing and risk management recommendations. A comprehensive risk management system has been put in place at the company. The Supervisory Board monitored the company s operations on a continuing basis and discussed quarterly reports on the company s performance. Based on the report on the company s performance in the first quarter, the unaudited interim financial statements for the first two quarters and the report on the company s performance in the first three quarters, the Supervisory Board monitored the achievement of objectives for It focused particular attention on cost optimisation and supported the Management Board s efforts in this direction. It also supported and encouraged the Management Board in their activities aimed at attracting new passengers and reducing the dependence on the domestic carrier. Performance is also monitored on the basis of a comparison with performance of airports that are competitors. The Supervisory Board has designed a system for comprehensively monitoring the company s performance on the basis of reports drawn up periodically by the Management Board in areas of significance to the company (alongside the financial and business reports): marketing, HR management, judicial and administrative cases, major investments, PR and relations with stakeholders, risk management, public contracting procedures, and grants and sponsorship. The Supervisory Board also actively monitored the performance of Adria Airways Tehnika, d.d., in which Aerodrom Ljubljana, d.d. holds a participating interest of 47.67%, and Aerodrom Portorož, d.o.o., in which it holds a participating interest of 30.46%. The Supervisory Board encouraged the Management Board to actively communicate with all stakeholders in the company. The Supervisory Board discussed the company s business plan for the 2012 to 2017 period, and agreed with it. At the end of the financial year the Supervisory Board was briefed on the company s business plan for It confirmed the financial calendar for 2013, where the company s major public announcements are scheduled. In January the Supervisory Board conducted a self-assessment, and adopted its plan of activities for 2012 on this basis. The company s Supervisory Board is composed so that it has all the necessary professional competences and skills for effectively supervising the company s operations. Its members have many years of experience in the corporate governance, financial transactions, financial and legal consulting services, insurance, banking, investment financing, management and supervision of buildings and structures, transport and construction, ensuring that the Supervisory Board has both theoretical and practical competences in the different fields. The contribution of workers representatives is also very valuable, as their experience and knowledge of the industry and the company enables them to contribute to the effective monitoring of operations. The Supervisory Board provides for additional expertise by having outside experts sit on its committees. The Supervisory Board finds that in given circumstances the response of the Management Board to the economic conditions has been adequate and that it managed the company successfully. 10

12 Based on the comprehensive monitoring and supervision of the company s operations, the Supervisory Board finds that the company s performance in 2012 was in line with plans, despite the adverse economic conditions. Cooperation with the Management Board The Supervisory Board worked actively with the Management Board throughout the year. The chairman of the Supervisory Board worked with the Management Board during preparations for sessions of the Supervisory Board within the scope of her authority. Members of the Supervisory Board received professionally drafted materials for sessions on time. All requested and necessary reports, information, and data were made available to members and were further explained by the Management Board where necessary at Supervisory Board sessions, enabling the members of the Supervisory Board to monitor and supervise the company s operations in a responsible manner and to make informed decisions. In its reports, the Management Board presented the most important economic categories in great detail, and ensured that they were sufficiently clear and comparable with previous periods. The Management Board also provided adequate solutions for the most difficult business decisions regarding the liquidity problems and performance of the company s largest business partner, Adria Airways Tehnika, d.d. and informed the Supervisory Board of any new developments in a timely and professional manner. This enabled the Supervisory Board to continually monitor the company s performance and to successfully perform its supervisory function. The Supervisory Board assessed the work of the Management Board as successful. Supervisory Board committees Three committees reported to the Supervisory Board in 2012: The audit committee, comprising Marko Mulej (chairman), Miran Kunst, Drago Čotar and Anica Nemec (independent member), met ten times in It reviewed the annual report for 2012 and was briefed on the company s unaudited half-yearly interim report, it discussed the business plan for the 2012 to 2017 period, and it regularly monitored internal and external auditing. Based on previous work and past experience, the committee suggested that the Supervisory Board propose Deloitte revizija d.o.o. as the company s external auditor for 2012 to the general meeting. On the basis of a self-assessment, the committee established that it mostly attains its expected level of activity. The appointments and HR committee, comprising Anja Strojin Štampar (chairperson), Stanislav Boštjančič and Igor Domevščik, met two times in It helped to draw up criteria for the variable portion of the Management Board s remuneration linked to the company s performance in 2013, and drew up an assessment of the level to which the qualitative and quantitative criteria for the variable remuneration for 2011 had been met. It also set out the basis for evaluating the effectiveness of the work of the Supervisory Board. It examined whether the current system for remunerating Supervisory Board members was appropriate, and put forward proposals to coordinate with the CAMA recommendations. In early 2012 the Supervisory Board established an investment committee. The committee met at five sessions. Alongside three members of the Supervisory Board, Ms Anja Strojin Štampar (chairperson), Mr Marko Mulej and Mr Igor Domevščik, two outside experts were appointed to the committee, namely Mr Borut Grabec and Mr Darko Torkar. The committee monitored the work of the project council in the management and monitoring of the project for the second phase of the construction of the new T2 passenger terminal at Ljubljana Jože Pučnik Airport, was briefed on the tender documentation for the construction and finishing work for the T2 terminal, and discussed the company s business plan for the 2012 to 2107 period with the audit committee. The committee formulated several recommendations in connection with the conclusion of relations with external contractors 11

13 and the tendering for the construction and finishing work for the T2 terminal, and discussed the testing of the project management system at the company. The Supervisory Board s position on the 2012 audit report The Supervisory Board session where members discussed the company s annual report was also attended by two auditors from Deloitte revizija d.o.o., which audited the company s 2012 financial statements. The Supervisory Board was briefed on the independent auditor s report and found that an unqualified opinion was expressed. The Supervisory Board finds that the auditor performed the audit in accordance with the law and auditing rules. The Supervisory Board did not have any dissenting comments on the independent auditor s report. Approval of the 2012 annual report and proposal on the use of distributable profit The Management Board submitted the company s annual report with the audit report to the Supervisory Board for review within the legally prescribed deadline. The Supervisory Board s audit committee reviewed the annual report and the audit report in detail, and gave its opinions and positions. On the basis of the continuous monitoring of the company s operations and the detailed review of the annual report, the Supervisory Board finds that the 2012 report was compiled in a clear and transparent manner, and that it presents a true and fair picture of the company s assets, liabilities, financial position, profit and loss, and comprehensive income. The business report includes a fair presentation of the development and performance of the company s business and its financial position, including a description of the principal types of risks to which Aerodrom Ljubljana, d.d. is exposed. The annual report was prepared in line with provisions of the Companies Act and the applicable international accounting standards. Following the review of the company s 2012 annual report, the Supervisory Board had no dissenting comments on the annual report and adopted it unanimously at its 40 th session held on 11 April The Supervisory Board agreed with a motion put forward by the Management Board according to which EUR 2,598, of the distributable profit totalling EUR 1,829, is to be earmarked for dividend payments to shareholders, while EUR 769, is to be transferred to other reserves. The proposed dividend for 2012 is EUR 0.43 gross per ordinary no-par value share. The dividend for participating preference no-par-value shares is calculated in accordance with Article 8 of the company s Articles of Association. It comprises fixed and variable portions, and amounts to a total of EUR 0.54 per share. The Supervisory Board finds that the proposed dividend is in line with the company s strategic objectives and investment plans, and is also adjusted to the current economic conditions. Proposal to the general meeting to confer official approval upon the Management Board and the Supervisory Board Taking into account the above and pursuant to Article 294 of the Companies Act, the Supervisory Board proposes that the general meeting confer official approval upon the Management Board and the Supervisory Board for their work in Anja Strojin Štampar, MSc, President of the Supervisory Board Zg. Brnik, 11 April

14 1.5 PRESENTATION OF AERODROM LJUBLJANA, D.D SIGNIFICANT INFORMATION Firm: Aerodrom Ljubljana, d.d. Zg. Brnik 130a, 4210 Brnik-aerodrom, Slovenia Registered office: Activity code: Size: President of the Management Board: Member of the Management Board: President of the Supervisory Board: Number and date of entry of conversion into a public limited company in the Companies Register: Phone: +386 (0) , Fax: +386 (0) info@lju-airport.si, other auxiliary activities in air transport large company according to the Companies Act (ZGD-1) Zmago Skobir Bernarda Trebušak Anja Strojin Štampar, MSc 96/01184, 28 January 1997 Registration number: VAT ID no.: SI Share capital as at 31 December 2012: EUR 15,842,626 Total number of shares as at 31 December 2012: Quotation of ordinary no-par value shares: Designation of ordinary no-par value shares: Transaction accounts: Financial year: 3,796,527 no-par value shares, of which 1,936,229 shares are ordinary freely transferable no-par value shares and 1,860,298 shares are participating preference no-par value shares with limited voting rights Ljubljanska borza, d.d. stock exchange quotation AELG Abanka d.d Nova Ljubljanska banka, d.d calendar year Number of employees as at 31 Dec. 2012:

15 1.5.2 ACTIVITIES OF THE COMPANY Our basic lines of business comprise: airport management, including aircraft take-offs and landings and the use of infrastructure and the passenger terminal, ground handling services for aircraft, passengers and cargo, commercial activities: relevant retail, catering and other services, car parking for passengers and airport visitors, leasing of commercial and advertising space, warehousing and logistical services MISSION, VISION AND STRATEGIC ORIENTATION Mission Aerodrom Ljubljana, d.d. ensures that all the airport s users are provided with flight services and other commercial services that are safe, punctual and of high quality, and attends to the development of the airport in line with carriers and passengers demands, the types of traffic and the requirements of the European Union. Vision In the next decade Aerodrom Ljubljana, d.d. aims to expand its infrastructure and increase its traffic to become a leading provider of air connections and services in this region, both for passenger traffic and cargo traffic. Our vision is additionally supported by the following facts: the favourable geographical location of the airport, which is a good point of departure for flights to Central, Eastern and South Eastern Europe, and for links to Western European countries, unexploited tourism potentials, the size of the existing runway, the price-competitiveness of our services, and available space for development and expansion. Strategic orientation The company s business plan for the 2012 to 2017 period was officially approved in June 2012, and forecasts an increase in annual traffic resulting in passenger numbers of 1.7 million, 43,000 aircraft movements and cargo tonnage of 23,000 tonnes. Investments in buildings and equipment totalling EUR million are also projected. Because circumstances changed in 2012, a revised version of the document is soon to be submitted to the Supervisory Board for discussion ORGANISATION The company is led by a two-member Management Board. Performance of the company s core activity is organised within five sectors: a traffic-technical division, aero-engineering, a financial accounting department, a sales division and a general department. Sectors are managed by directors, while certain sectors are divided further into operational 14

16 departments. In addition to advisors and other experts working within the office of the Management Board, the Management Board is also supported in its work by the security and safety department DATA ON COMPANIES UNDER THE MAJORITY OWNERSHIP OF AERODROM LJUBLJANA, D.D. Ownership interest Book value of the investment Company Address in % Aerodrom Portorož, d.o.o. Sečovlje 19, Sečovlje Adria Airways Tehnika d.d. Zg. Brnik 130 h, Brnik-aerodrom ,147,369 3,147,369 * Investment stood at EUR 1,251,878 in nominal terms, and an adjustment for the entire amount was created in ** Investment stood at EUR 6,994,154 in nominal terms. Adjustments in the amount of EUR 3,846,785 were created in 2010 and For more about investments in the aforementioned companies, see points 4.3, and of the Financial Report INTERNATIONAL ACTIVITIES In 2012 we continued to participate in various expert groups operating within the framework of ACI Europe. The president of our company s Management Board was still active on the association s board, which has an influence on the creation of European aviation policy. Serving as advisor to the Management Board is the president of the association s Policy Committee, whose role is drawing up strategic guidelines for the senior management of ACI Europe, and coordinating and liaising between other committees and working groups. We remain members of the Aviation Security Committee, which deals with the issue of airport security and proposes new solutions in this area. We continued our membership in the Regional Airports Forum, an interest group that draws up proposals for small and medium-sized airports, and in the ACI Communication Group, which brings together communications experts at European airports. 15

17 In 2012 we hosted three international events, the Regional Airports Forum on 1 April, the 5th Regional Airports Conference on 2 to 4 April, and the ACI Communication Group in October. The Regional Airports Conference was the most important of these events, and attracted 180 delegates from 26 countries to discuss a wide range of issues relating to regional airports, from legislation to operational solutions. The basic message was that regional airports are vital to regional links and development, that they are safe, and that they need the support of their communities in realising their development plans. 16

18 2 CORPORATE GOVERNANCE STATEMENT Pursuant to the provisions of the fifth paragraph of Article 70 of the Companies Act (ZGD-1), the Management Board and Supervisory Board of Aerodrom Ljubljana, d.d. hereby provide the following Corporate Governance Report for the period from 1 January 2012 to 31 December STATEMENT OF COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE By upholding the principles of recommended business practices in management and governance, Aerodrom Ljubljana, d.d. strives to improve the level of the company's management and governance, the Corporate Governance Code serving as an important guideline. Aerodrom Ljubljana, d.d. hereby issues its Statement of Compliance with the Corporate Governance Code, amendments to which were adopted on 8 December 2009 and entered into force on 1 January The Code is available in the Slovenian and English languages on the website of the Ljubljana Stock Exchange at The Statement of Compliance with the Corporate Governance Code is an integral part of the company s 2012 annual report and is available on the company s website at for a period of five years following publication. In this statement of compliance with the Corporate Governance Code, the company indicates the intended changes to its future operations aimed at even more extensive implementation of the recommendations of the code in 2013 (in particular points 5.5, 5.6, 7, 7.1 and 7.3). The Management Board and Supervisory Board of Aerodrom Ljubljana, d.d. hereby declare that the company abides by the Corporate Governance Code for Public Limited Companies (hereinafter: the Code) in its work and operations, with the exception of the derogations stated below. Corporate governance framework Code provision 1: The key goal of a joint-stock company engaged in a revenue-generating business is to maximise the company s value. This, as well as the company s other objectives pursued in the course of its business, such as the long-term creation of value for shareholders and the social and environmental aspects ensuring a sustainable development of its business, is stated in the company s articles of association. The company does not state the aforementioned objectives specifically in its Articles of Association, but pursues them in practice throughout its activities, and defines them in detail in the Corporate Governance Policy, which is a published document. Relations with shareholders Code provision 5.2, second paragraph: Not later than the day of the general meeting, the company also discloses the total costs of the organised collection of proxy appointments. The company will implement this recommendation, and after holding the 2013 general meeting will announce the cost of collecting proxy appointments, if any were collected. Code provision 5.5: If the general meeting is to elect members of the supervisory board as proposed by the board itself, the board s substantiation of the proposals for such resolutions includes, along with the statutorily required data, at least the information on the proposed nominee s membership on other managerial or supervisory bodies and any potential conflicts of interests, pursuant to the criteria given in Appendix C of this Code. Likewise, the supervisory board must 17

19 disclose information as to whether the proposed candidate is independent in relation to the company (e.g. whether the candidate is economically, personally or otherwise closely linked to the company or its management board). The company did not take the recommendation into account in 2012, as there were no elections for members of the Supervisory Board. The company has taken the recommendation into account in its preparations for the 2013 general meeting. Code provision 5.6: When resolutions are proposed by the supervisory board, the general meeting elects each member of the supervisory board separately. The company did not take the recommendation into account in 2012, as there were no elections for members of the Supervisory Board. The company has taken the recommendation into account in its preparations for the 2013 general meeting. Code provision 5.7: If the general meeting is to decide on the management remuneration policy, it should adopt it at the proposal of the supervisory board and align it substantively with the current market situation and the situation at the company. The management remuneration policy should substantively follow the provisions of the Code and should define: the amount of non-variable remuneration to members of the Management Board, the possibility of variable remuneration for a member of the Management Board, criteria used for determining types of variable remuneration, any potential restrictions with respect to variable remuneration, the annual dynamics of setting criteria for variable remuneration, specification of remuneration given as shares, stock options and other types of financial instruments along with any restrictions of such remuneration, the annual assessment of the criteria being fulfilled and of the supervisory board s activities in this area. The remuneration policy for the Management Board is not decided on by the shareholders, but by the Supervisory Board, in keeping with its powers, which takes account of the aforementioned code in determining the criteria for the remuneration policy, and also upholds the valid legislation in this area (the Act Governing the Remuneration of Managers of Companies with Majority Ownership held by the Republic of Slovenia or Self-Governing Local Communities; hereinafter: the ZPPOGD). On the basis of the ZPPOGD the Supervisory Board adopted the Rules Defining the Rights of Members of the Management Board, which were presented to the 15 th general meeting. In addition, each year the Supervisory Board approves qualitative and quantitative criteria for determining the variable portion of the Management Board s remuneration. All the explanations required by law are provided to the shareholders at the annual general meeting when the official approval for the Management Board s work during the previous financial year is being voted on, in accordance with the Companies Act (ZGD-1). Supervisory board Code provisions 7 and 7.1: The selection procedure for new supervisory board members and the procedure of drawing up the related proposal of the general meeting resolution for appointing new board members are transparent and defined in advance. In assessing a candidate s eligibility for a supervisory board member, statutory criteria are applied as well as the following additional criteria, to the greatest extent possible: 18

20 adequate personal integrity and business ethics, min. college-level and preferably university-level education, adequate experience in corporate governance or management, or work experience in the company s industry, comprehensive business and relevant professional knowledge, the ability to act and make decisions in the company s long-term interest, thereby subduing to this cause potential alternative personal or other individual interests (of third persons, employees, the management board, shareholders, the public and the government), candidates are not managers or supervisors, representatives or consultants of competitive companies in the industry of the respective company s primary business, and they are also not significant shareholders or stakeholders in such competitive companies, they have sufficient time or will have sufficient time once they are appointed, they are capable of efficient communication and teamwork, they are prepared to undertake continuous training and professional development, they have a certificate evidencing their specialised professional competence for membership on a supervisory board, such as a Certificate of the Slovenian Director s Association. The company did not take the recommendation into account in 2012, as there were no elections for members of the Supervisory Board. The company has taken the recommendation into account in its preparations for the 2013 general meeting. Code provision 7.3: Prior to beginning the assessment of potential candidates for supervisory board members, the supervisory board or nomination committee defines the level of professional knowledge, experience and skills necessary for a supervisory board member s high-quality conduct of his function. To this end, the supervisory board draws up in advance an outline of the function as well as the professional knowledge, experience and skills necessary to perform such a function (supervisory board member profile), against which the candidates are assessed. Such a profile is drawn up according to the size, line of business and other characteristics and needs of the company. The company did not take the recommendation into account in 2012, as there were no elections for members of the Supervisory Board. The company has taken the recommendation into account in its preparations for the 2013 general meeting. Transparency of operations Code provision 20.3: The company lays down rules on the directors dealings, stipulating trading restrictions, temporal restrictions for trading (closed trading windows) and ordering members of the company s bodies as well as related natural persons, legal entities and other persons with access to inside information to disclose their transactions in the company s shares and in the shares of related companies. Reporting by the members of the Management Board and Supervisory Board regarding trading in the company s shares is governed by the Regulation on Information about Major Holdings in accordance with the Financial Instruments Market Act. The company has no internal act restricting trading in its shares. The company has a list of persons to whom internal information is accessible. 19

21 2.2 STATEMENT OF COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE FOR COMPANIES WITH STATE CAPITAL INVESTMENTS As a public limited company whose majority shareholder is the Republic of Slovenia, in addition to observing the Corporate Governance Code for public limited companies, Aerodrom Ljubljana, d.d. was obliged to observe the Corporate Governance Code of Companies with State Capital Investments until 28 December Because Aerodrom Ljubljana, d.d. manages the infrastructure at the main airport in the country, in addition to its basic duty of acting in the interests of the shareholders it also observes the recommendations of the aforementioned code, which in an orderly and transparent manner is raising the level of the actions of public limited companies in which the Republic of Slovenia (the state) is a shareholder. Aerodrom Ljubljana, d.d. is hereby issuing its statement of compliance with the Corporate Governance Code for Companies with State Capital Investments, which was adopted by the Capital Assets Management Agency on 13 January The second section of the code (Recommendations 52 to 93) sets out the expectations of the companies in which the Republic of Slovenia is a shareholder or partner. The code was published on the CAMA s website at The statement of compliance with the Corporate Governance Code for Companies with State Capital Investments is a constituent part of the company s 2012 annual report, and will be available on its website ( for five years after its first publication. The Management Board and the Supervisory Board hereby declare that in its work and operations Aerodrom Ljubljana, d.d. has observed the Corporate Governance Code for Companies with State Capital in the section relating to public limited companies. In areas regulated differently by the Corporate Governance Code for public limited companies and the Corporate Governance Code for Companies with State Capital, Aerodrom Ljubljana, d.d. gives prevalence to the former, in order to ensure equality for all shareholders (private shareholders on one side, and the state on the other), given its status as a public limited company whose shares are listed on the stock market. In accordance with the Slovenian Sovereign Holding Company Act (Official Gazette of the Republic of Slovenia, No. 105/12), the powers of the CAMA will be taken over by the Slovenian Sovereign Holding Company, while until the establishment of the aforementioned company all capital investments will be managed by Slovenska odškodninska družba d.d., which took over these powers on 28 December Any deviations from the recommendations of the Corporate Governance Code for Companies with State Capital Investments are cited and explained below: Recommendation 66: Companies with state capital investments should consistently report about their business operations and about the achievement of the set goals in accordance with the reporting guidelines drawn up by the Agency in compliance with regulations in force. In relation to reporting, the company observes the provisions of the ZGD-1 (in particular the first paragraph of Article 130) and the Corporate Governance Code. Recommendations 75 to 80: Selection of candidates for supervisory bodies and formulation of proposals for a general meeting. The company does not observe the recommendations in full, because the nomination procedure for members of the Supervisory Board is regulated by its articles of association, but it took the recommendations of the Corporate Governance Code into account in the general meeting s preparations for 2013 with regard to the nomination of candidates for the Supervisory Board. Recommendation 89: Remuneration packages are founded on fixed and variable remuneration, which are adequately formulated with regard to the level of remuneration in competitive companies. The remuneration of members of the management board must not be the market leader, but must be competitive. Irrespective of whether a company is in full 20

22 state ownership or the state has a majority shareholding or even a minority one, special attention must be dedicated to ensuring that the remuneration of managerial bodies and the most responsible persons as well as all employees in the company is such that they contribute to the provision of and improvement of the company s business opportunities and competitiveness. The company does not observe the recommendations because it is bound by the restrictions of the ZPPOGD. 2.3 REPORTING GUIDELINES FOR COMPANIES WITH STATE CAPITAL INVESTMENTS In relation to reporting, the company observes the provisions of the ZGD-1, the ZTFI and the Corporate Governance Code. 2.4 RECOMMENDATIONS OF THE CAPITAL ASSETS MANAGEMENT AGENCY The company took account of all the CAMA recommendations (in accordance with the Slovenian Sovereign Holding Company Act [ Official Gazette of the Republic of Slovenia, No. 105/12], the powers of the CAMA will be taken over by the Slovenian Sovereign Holding Company, while until the establishment of the aforementioned company all capital investments will be managed by Slovenska odškodninska družba d.d., which took over these powers on 28 December 2012). Any deviations from the recommendations of the Capital Assets Management Agency are cited and explained below: Recommendation 4: Quarterly reporting on the performance of a company The recommendation is not binding for public limited companies. Because the company is a public limited company listed on the stock market, it reports on its operations in accordance with the provisions of the ZGD-1 concerning public limited companies listed on the stock market, in accordance with the ZTFI and in accordance with the Corporate Governance Code, the company publishes quarterly, half-yearly and annual reports. Recommendation 13: The recommendation is not binding for Aerodrom Ljubljana, d.d. Recommendation 14: Achieving quality and excellence in the operations of a company/group The recommendation has been partly taken into account. The company does not yet undertake self-assessment under the EFQM Excellence Model, but is introducing the requirements of the ISO 9001 standard into its operations. By determining user satisfaction, managing the business processes and managing its documentation, the company is striving to improve its performance in the area of quality. The company will begin working to the EFQM model in 2013, and will draw up a report for last year in the coming year, briefing the Supervisory Board and the general meeting accordingly. 2.5 MAIN FEATURES OF THE INTERNAL CONTROL SYSTEM AND OF RISK MANAGEMENT IN RELATION TO THE FINANCIAL REPORTING PROCEDURE Aerodrom Ljubljana, d.d. has within its operations an extensive mechanism of internal control and risk management in relation to the financial reporting procedure. The objective of this system of internal controls is alignment with applicable laws and regulations, the accuracy, completeness and reliability of financial reporting, a reduction in the risks relating to 21

23 the company s operations, achievement of the company s strategic objectives, and realisation of the company s overall strategy. Internal controls comprise defined objectives by individual area of the operations, and the risks and the method used to control them are identified. Risk management is set out in greater detail in point 5 of the Business Report. Appropriate control procedures for the functioning of internal controls, financial reporting and compliance with the rules have been set up. Financial reporting is based on a system of recording business events that has built-in internal financial controls, whose effectiveness is monitored on a continuous basis. A system of reporting on identified risks and procedures has been designed, and supervision of internal control procedures is carried out. Internal auditing Internal auditing, which serves as a support function for the Management Board and is therefore carried out from its office, has been performed since The basic area of operation comprises the internal control of all business and other risks to which the company is exposed. When assessing whether internal controls are appropriate and fit for their intended purpose, the permanence and reliability of their functioning are also examined. Internal auditing is based on internal auditing standards and on the auditing of specific business processes and procedures that impact the achievement of operating objectives. Internal auditing proposes improvements to business processes, thus making a significant contribution to increasing the effectiveness of business operations, the transparency and reliability of information. The internal auditor reports on its work to the company s Management and Supervisory Boards. External auditing On the basis of a general meeting resolution adopted at the 16 th meeting on 22 June 2012, the company s financial statements for 2012 were audited by Deloitte revizija d.o.o., Ljubljana (for the sixth consecutive year). 2.6 INFORMATION PROVIDED UNDER THE SIXTH PARAGRAPH OF ARTICLE 70 OF THE ZGD-1 As a company obliged to comply with the act governing mergers and acquisitions, Aerodrom Ljubljana, d.d. provides the information required under the sixth paragraph of Article 70 of the ZGD-1 to reflect the situation as at the last day of the financial year, along with all required explanatory notes: Structure of share capital and restrictions on transfer of shares The company s share capital is divided into 3,796,527 no-par-value shares issued in dematerialised form and paid up in full; 49% of them (1,860,298 shares) are preference participating no-par-value shares with restricted voting rights, which under Article 7 of the Articles of Association are registered to the Republic of Slovenia, and 51% (1,936,299 shares) are ordinary freely transferable no-par-value registered shares traded on the Ljubljana Stock Exchange s regulated market since 1997 (ticker symbol: AELG). Under the Articles of Association, the preference participating shares have full voting rights when decisions are being made on the following: amendments to the Articles of Association, an increase or decrease in the share capital, 22

24 the appointment and dismissal of members of the Supervisory Board, the winding-up of the company or a change in its legal status, the appointment of an auditor, conversion of the preference participating shares with restricted voting rights into ordinary registered no-parvalue shares. A dividend comprising a fixed portion and variable portion pertains to the preference participating no-par-value shares with restricted voting rights. Significant direct and indirect holdings of the company s securities in terms of achieving a qualifying holding as defined by the Mergers and Acquisitions Act (ZPre-1) As at 31 December 2012, the following shareholders of the company had attained a qualifying holding: Republic of Slovenia (1,923,853 no-par-value shares, a 50.67% holding in the issuer s capital, of which 49% or 1,860,298 of the shares are participating preference no-par-value shares with limited voting rights that are not listed on the stock exchange), Kapitalska družba, d.d. (279,561 no-par value shares, a 7.36% holding in the issuer s capital), and Slovenska odškodninska družba, d.d. (258,958 no-par value shares, a 6.82% holding in the issuer s capital). Holders of securities ensuring special controlling rights The company does not have securities that would provide special controlling rights. Restrictions of voting rights under Articles of Association Preference participating no-par value shares with restricted voting rights have full voting rights in instances stipulated by law and by the Articles of Association. Pursuant to the Articles of Association, preference participating no-par value shares have full voting rights when decisions are being made on the following: amendments to the Articles of Association, an increase or reduction in the company s share capital, the appointment and dismissal of members of the Supervisory Board, the winding up of the company and a change in its status, the appointment of an auditor, and the conversion of preference participating no-par value shares with restricted voting rights into registered ordinary no-par value shares. Restrictions of voting rights in accordance with Securities Market Agency ruling of 13 December 2012 Pursuant to a ruling by the Securities Market Agency, the following have been prohibited from exercising their voting rights at Aerodrom Ljubljana, d.d. for reason of their concerted action and the acquisition and surpassing of the takeover threshold in the target company Aerodrom Ljubljana, d.d.: Zavarovalnica Triglav d.d., of Miklošičeva cesta 19, Ljubljana, with 161,909 shares with the AELG ticker symbol (151,085 AELG shares are held directly by Zavarovalnica Triglav, and 10,824 are held by Zavarovalnica Triglav kritni sklad ž.z.), an overall holding of % in Aerodrom Ljubljana, d.d., Slovenska odškodninska družba d.d., of Mala ulica 5, Ljubljana, with 258,958 AELG shares, an overall holding of % in Aerodrom Ljubljana, d.d., 23

25 Kapitalska družba pokojninskega in invalidskega zavarovanja d.d., of Dunajska cesta 119, Ljubljana, with 279,561 AELG shares, an overall holding of % in Aerodrom Ljubljana, d.d., the Republic of Slovenia, of Gregorčičeva ulica 20, Ljubljana, with 63,555 AELG shares and 1,860,298 shares with the AELP ticker symbol, an overall holding of % in Aerodrom Ljubljana, d.d. Rules of the company on the appointment and replacement of members of management or supervisory bodies, and on amendments to the Articles of Association The company s rules on the appointment and replacement of members of the management and supervisory bodies and on a change of status are defined in the Articles of Association. The company's Management Board comprises a maximum of three members: the president of the Management Board (director) and two members, serving as deputy directors responsible for specific areas. The members and president of the Management Board are appointed by the Supervisory Board for a term of five years, with the possibility of reappointment. The Supervisory Board may dismiss the president and members of the Management Board if they commit a serious breach of their duties, if they no longer have capacity to contract, if they receive a vote of no confidence from the general meeting of shareholders (unless the vote of no confidence is clearly unsubstantiated), or on any other economic/commercial grounds (significant changes in shareholdings, reorganisation, launch of new services, major changes in lines of business, etc.). At least two-thirds of the members of the Supervisory Board must be in attendance for it to achieve quorum when appointing or dismissing the president or members of the Management Board. The Supervisory Board comprises six members. Four members are elected by shareholders, while two members are appointed by the works council pursuant to the Worker Participation in Management Act. In conjunction with the appointments and HR committee, the Supervisory Board is conducting a procedure to select candidates for joining the Supervisory Board, and is formulating and then applying the criteria that the candidates must meet. Shareholder representatives, who are elected for a term of four years by the general meeting of shareholders with an ordinary majority of votes, are proposed by the Republic of Slovenia (two members), Kapitalska družba, d.d. and Slovenska odškodninska družba, d.d. (together one member) and other shareholders (one member). The members of the Supervisory Board elect a president and deputy-president from among themselves. Members of the Supervisory Board may be dismissed before their term of office ends by a three-quarters majority of votes cast at the general meeting of shareholders. A resolution by the general meeting of shareholders is required for any amendment to the Articles of Association. Proposed amendments to the Articles of Association must be published. Should the proposal not be published, the place where the wording of the proposed amendments is available must be made public. Unless the law stipulates otherwise, a majority of the represented share capital is required for a general meeting of shareholders resolution on an amendment to the Articles of Association to be valid, when at least half the share capital is represented when the resolution is voted upon. Powers of members of management, in particular powers to issue or buy treasury shares The powers of members of management are laid down in the company s Articles of Association, where no special rules to issue or buy treasury shares are specified. The Management Board does not have the explicit power to increase the authorised capital or the power to acquire treasury shares. 24

26 2.7 GENERAL MEETING OF SHAREHOLDERS Shareholders of the company exercise their rights deriving from ownership of the company at the general meeting of shareholders. The general meeting of shareholders is the highest body within the company and operates in accordance with the provisions of the Articles of Association and the Companies Act. The Articles of Association are published on the company s website at The general meeting is convened by the Management Board, as set out by the law and by the Articles of Association, when it is in the company s benefit to do so. The general meeting of shareholders is convened by the company's Management Board in the instances set out in legislation and the Articles of Association, and whenever it benefits the company. It can also be convened by the Supervisory Board. The general meeting is convened at the written request of shareholders together representing at least one-twentieth of the company s share capital. An agenda, and a proposed resolution for each proposed item of the agenda to be decided upon by the general meeting or an explanation of the agenda item if the general meeting is not to decide on the item in question must be enclosed in the request in written form by the shareholder requesting the convening of the general meeting. The announcement to convene the general meeting with the content required by regulations must be published at least 30 days before the general meeting first convenes in the Official Gazette of the Republic of Slovenia, on the company s website, on SEOnet, the electronic information system of Ljubljana Stock Exchange, and on Info hramba, the central controlled information storage system. The provision of the previous sentence notwithstanding, the general meeting may be convened with the content required by law by means of a registered letter to all shareholders, provided that their names and addresses can be determined from the valid register of shareholders. In this instance the day that the letter is sent is deemed the day of the announcement to convene the general meeting. After the announcement to convene the general meeting, shareholders whose holdings together represent at least onetwentieth of the share capital may request in writing that an additional item be included on the agenda. The written request must include the proposed resolution to be decided upon by the general meeting or an explanation of the agenda item if the general meeting is not to decide on the item in question. The shareholders must lodge the request with the company no more than seven days after the announcement to convene the general meeting, and the Management Board must publish it without delay. An additional item on the agenda may only be discussed at the general meeting if it was published at least 14 days prior to the general meeting; otherwise it is discussed at the next general meeting. The Management Board must notify financial institutions, shareholder associations, other entities set out by law, and shareholders whose holding in the company s total share capital is at least 5% of the convening of the general meeting, amendments to the agenda, and shareholder proposals regarding items on the agenda or voting proposals, together with justifications and other information related to the proposals, in writing (by registered post, with a receipt) at least 14 days before the general meeting first convenes. Where the company has published this information on its website, the written notification may merely cite the web page on which the information is available. General meetings may be attended and voting rights exercised only by shareholders who have registered their attendance with the company by the end of the fourth day before the general meeting, and are entered as shareholders in the central register of book-entry securities at the end of the fourth day before the general meeting first convenes. Shareholder proxies may exercise the right to attend and voting rights on the basis of a written proxy agreement, which must be submitted to the Management Board by shareholders no later than the day of the general meeting and remains in safekeeping at the company. The company actively encourages shareholders to exercise their rights by organising the collection of proxies, on the basis of which shareholders can also exercise their right to vote without attending the general meeting in person, although no member of the Management Board or Supervisory Board may act as a proxy. 25

27 Shareholders may use electronic means to nominate their proxies at the general meeting. The form for a voting proxy agreement is available on the company s website. The proxy agreement may be ed to the company at an address designated by the company each time that a general meeting is convened, in scanned form as an attachment, and must contain the handwritten signature of any private individual using the agreement. The company has the right to verify the identity of a shareholder or proxy submitting the proxy agreement by , and the authenticity of the signature. Shareholders may also submit a request for an additional item on the agenda and proposals for resolutions relating to items on the agenda, including voting proposals, in the same manner and form. The company has the right to verify the identity of a shareholder or proxy submitting a request or proposal by , and the authenticity of the signature. In accordance with the company s Articles of Association, holders of ordinary no-par value shares vote on the use of distributable profit and the conferral of official approval on the Management Board and Supervisory Board. Holders of preference participating and ordinary no-par value shares vote on the appointment of the auditor and on amendments to the Articles of Association. Each no-par value share entitles its holder to one vote. An ordinary majority of the shareholder votes cast is required to pass general meeting resolutions, unless a larger majority or other requirements are set out by law. At the 16 th general meeting of shareholders held on 22 June 2012: shareholders were briefed on the Supervisory Board's report on the verification of the annual report for the 2011 financial year; the work of the Management Board and Supervisory Board was given official approval; a decision was taken on the use of distributable profit for 2011; the auditor was appointed for the 2012 financial year and changes were approved to the remuneration of the Supervisory Board and its committees. 2.8 COMPOSITION AND FUNCTIONING OF MANAGEMENT AND SUPERVISORY BODIES The management and governance of Aerodrom Ljubljana, d.d. is based on legal provisions, the provisions of the company s Articles of Association and the corporate governance policy. It proceeds according to a two-tier system, where the company is managed by the Management Board and its operations are supervised by the Supervisory Board SUPERVISORY BOARD The competences of the Supervisory Board are laid down in the Articles of Association. The Supervisory Board s method of work is regulated by the Rules of Procedure of the Supervisory Board, which are published on the company s website. The activities and method of operation of the Supervisory Board in 2011 are detailed in the Report on the Work of the Supervisory Board (point 1.4 of the Business Report). Composition of the Supervisory Board The six-member Supervisory Board comprises: two shareholder representatives who were elected in accordance with the second paragraph of Article 18 of the Articles of Association at the proposal of the Republic of Slovenia: Anja Strojin Štampar (president) and Miran Kunst, a shareholder representative who was elected in accordance with the second paragraph of Article 18 of the Articles of Association at the proposal of Kapitalska družba and Slovenska odškodninska družba: Marko Mulej, 26

28 a shareholder representative who was elected in accordance with the second paragraph of Article 18 of the Articles of Association at the proposal of other shareholders: Stanislav Boštjančič, employee representatives: Drago Čotar (deputy-president) and Igor Domevščik. There were no changes to the composition of the Supervisory Board during the reporting period. The Supervisory Board was appointed on 9 July 2009 for a term of four years. Supervisory Board Committees There were three Supervisory Board committees active in the appointments and HR committee (which met twice), which has three members: Anja Štampar Strojin (chairman), Stanislav Boštjančič and Igor Domevščik. It helped to draw up criteria for the variable portion of the Management Board s remuneration linked to the company s performance in It was briefed on material for evaluating the efficacy of the Supervisory Board, examined the current remuneration of Supervisory Board members, proposing that it be brought into line with the CAMA recommendations, and discussed other issues relating to the performance criteria and measures on which the variable portion of the Management Board s remuneration depends. the audit committee (which met ten times), which has four mambers (three Supervisory Board members, including Marko Mulej (chairman), Miran Kunst and Drago Čotar, and an independent member, Anica Nemec). It reviewed the annual report for 2012 and was briefed on the company s unaudited half-yearly interim report, it discussed the business plan for the 2012 to 2017 period, and it regularly monitored internal and external auditing. The T2 investment monitoring committee (which met five times) has five members, three of whom are members of the Supervisory Board (Anja Strojin Štampar [chairman], Marko Mulej and Igor Domevščik) and two of whom are from outside (Borut Grabec [construction expert] and Darko Torkar [banking expert]). The committee monitored the work of the project council in the management and monitoring of the project for the second phase of the construction of the new T2 passenger terminal at Ljubljana Jože Pučnik Airport, and was briefed on the tender documentation for the construction and finishing work for the T2 terminal. It also discussed the company s business plan for the 2012 to 2017 period with the Supervisory Board s audit committee MANAGEMENT BOARD In accordance with the Articles of Association, the Management Board comprises a maximum of three members, one of which is the president of the Management Board. Members of the Management Board are appointed by the Supervisory Board for a period of five years with the possibility of reappointment. The current Management Board comprises two members. President of the Management Board Zmago Skobir began his five-year term on 5 July 2007, while the other member of the Management Board, Bernarda Trebušak, began her term on 1 September On 24 August 2011 the president of the Management Board, Mr Zmago Skobir, was reappointed for a new term of office between 5 July 2012 and 5 July The Management Board manages Aerodrom Ljubljana for the company s benefit, and is independent and liable for its actions, except in the cases set out in the Articles of Association that require the Supervisory Board s approval. The president of the Management Board represents the company in legal and public matters, together with the other member of the Management Board. The other member of the Management Board represents the company only in conjunction 27

29 with the president of the Management Board. The Management Board is free to conclude transactions up to EUR 1 million in value; for larger transactions it requires prior approval from the Supervisory Board. In 2012 the Management Board discharged its responsibilities in accordance with the Rules of Procedure of the Management Board, reported regularly to the Supervisory Board in accordance with the Articles of Association and the Rules of Procedure of the Supervisory Board, and discharged its obligations to shareholders as defined in the Companies Act. In accordance with legal provisions, the Management Board also worked with the works council and with the company s representative trade union. 28

30 3 COMPANY OPERATIONS IN 2012 AND PLANS FOR ECONOMIC CONDITIONS Economic activity continued to contract in Slovenia in 2012, declining by 2.3% during the year. Consumer prices rose by 2.7% (because of rises in energy prices, liquid fuels in particular, and rises in food prices and services), more than in the euro area overall (where prices were up 2.2%) and at the global level (2%). According to the Ministry of Finance s initial estimates based on the cash flow methodology, the state budget deficit stood at 3.1% of GDP, just over 1 percentage point less than in the previous year. The unemployment rate stood at 9.6% in the final quarter of The economy continued to improve in terms of cost and price competitiveness, which was one of the lowest in the euro area, mainly because of the structure of Slovenia s foreign trade. Household financing via consumer loans has continued to decline, a reflection of the deterioration in their economic position and the decline in consumption. The banks have continued the process of reducing lending to the non-banking sector and making repayments of debt to banks in the rest of the world. Economic activity in the euro area declined by 0.5% in 2012, and the outlook for the future remains modest. The ECB has forecast inflation of 1.6% and a decline of 0.3% in economic activity in For Slovenia it has forecast a decline of 2.0% in economic activity, one of the largest economic contractions of any country, while the general government deficit is forecast at 5.1% of GDP. Confidence is gradually returning to the financial markets, while the early repayment of loans means that surplus liquidity is expected on the European interbank market. If the repayments flow into the real sector in the form of favourable corporate loans, this could give impetus to investment. Unemployment in 2013 is forecast at 12.2% in the euro area, and 9.8% in Slovenia. Despite the slightly positive signals and expectations, the available current indicators are not yet showing any significant recovery in global trade or industrial production. The IMF has forecast a decline of 0.2% in economic activity in the euro area in 2013, but is expecting slightly higher global economic growth than in 2012 thanks to emerging Asian economies. The risks that growth in the euro area will be lower than forecast remain high, and are related primarily to the ongoing efforts to resolve the euro area crisis. A major risk is growth in the USA, which has avoided the fiscal cliff, but still needs to address the debt ceiling and to ensure fiscal consolidation over the medium term. ACI Europe is reporting a further slowdown in growth in passenger traffic in 2012, and a decline in cargo tonnage. Passenger numbers were up 1.8% on 2011, the number of aircraft movements was down 2.1% and cargo tonnage was down 2.8%. A comparison of the figures reveals that airports in the EU recorded growth in traffic of just 0.2%, while traffic at other European airports was up 8.8%. This gap has been seen since 2008: traffic increased between 2008 and 2012 by 2.5% at the former, and by 38% at the latter. The European economy is showing signs of stabilisation, but this is not yet being reflected in the aviation sector because of low business confidence, high unemployment and airline streamlining measures. Traffic recorded slightly higher growth in 2012 in global terms. According to IATA figures, passenger numbers were up 5.3% on Growth was down slightly on the previous year (it stood at 5.9% in 2011), but was above the average of 5% recorded over the last 20 years. International traffic increased by 6%, and domestic traffic by 4% (growth was highest in developing countries). Average load factors rose by 1 percentage point (to 79.1%), a reflection of airlines efforts to fill their capacity. Cargo tonnage was down 1.5% on the previous year (compared with a decline of 0.6% in 2011), as a result of the decline in global trade and, in part, the increase in break-bulk cargo transported by ship. Cargo load factors declined by 0.7 percentage points (to 45.2%). The three figures below illustrate the changes in global passenger numbers and cargo tonnage (including international and domestic traffic) and the breakdown of global passenger and cargo traffic (source: IATA). 29

31 Passengers and cargo growth in 2012 Africa Asia&Pacific Europe Latin America Middle East North America Total Market -8% -4% 0% 4% 8% 12% 16% Passengers There was a decline of 0.3% in global cargo tonnage in December 2012 (less than 1.5% annualised), while the monthly increase in passenger numbers was slightly lower than the annual rate (at 4.2%, compared with 5.3%). Cargo Passengers and cargo growth in December 2012 Africa Asia&Pacific Europe Latin America Middle East North America Total Market -8% -4% 0% 4% 8% 12% 16% Passengers It is evident from the breakdown of passenger and cargo traffic that Asia and the Pacific, North America and Europe account for more than 80% of global passenger and cargo traffic. Cargo 30

32 Structure of world passenger and cargo traffic in 2012 Africa Asia&Pacific Europe Latin America Middle East North America 0% 10% 20% 30% 40% Passengers ACI Europe is forecasting an increase of 0.5% in passenger numbers in 2013, with airports outside the EU recording faster growth, as in previous years. Because the aviation sector is founded on dynamic growth in traffic as the basis for major infrastructural investment and the coverage of the high level of fixed costs, airports dealing with low growth in traffic are facing major challenges. IATA is forecasting 2013 to be similar to The driving forces of the aviation sector are GDP growth, passengers, cargo and oil prices. GDP is expected to increase by 2.3% (according to the baseline forecast), while oil prices are forecast to ease slightly. Demand for passenger traffic is forecast to increase by 4.5% (down 5.3% on the forecast from 2012), while demand for cargo transport is forecast to increase by 1.4% (which will not compensate for the decline in 2012). That growth in cargo tonnage is forecast to be lower than growth in passenger numbers is the result of surplus capacity in the cargo segment and a decline of 1.5% in return. Eurocontrol has drawn up a seven-year forecast for air traffic in Europe (2013 to 2019) that takes account of the current economic outlook for Europe, the high oil prices, the slower-than-expected recovery after the Arab Spring and the financial problems in the aviation sector. It forecast an increase of 1.3% in the number of aircraft movements in 2013, and average growth of 3% over the next three years. The forecasts vary greatly from country to country, ranging from 1.4% for Spain to 7% for Turkey. The number of aircraft movements, which peaked in 2008, will only pass this level again in 2016, with 11.9 million aircraft movements forecast in 2019, up 17% on Cargo 3.2 MARKET POSITION AND MARKETING ACTIVITIES Market position The mounting economic crisis and the further decline in economic activity in Europe have had a profound impact on the aviation industry, which had previously recorded high growth throughout the preceding decades. To streamline their operations airlines are consolidating their networks and cutting routes, while also achieving higher load factors. In this fiercely competitive environment the advantage lies with larger airports with a large number of airlines and a wide network of routes, particularly from the point of view of retaining traffic, let alone opening new routes, while the situation is significantly more difficult for smaller airports with less market potential. Our national airport is classed as small in terms of traffic, and covers Slovenia, the southern part of Austria, the north-eastern part Italy and part of Croatia and approximately 4 million inhabitants in the aforementioned region. This region represents the company s target market, and covers a 250 km radius from the airport. Airports in Venice, Zagreb, Trieste, Graz, Klagenfurt and Treviso are the 31

33 company s direct competitors in this region. The aforementioned airports represent particularly fierce competition for us for passengers travelling to countries with which Ljubljana does not have direct connections. It should also not be ignored that the increased mobility of passengers in our region brings into play more distant airports such as Vienna and Munich, which primarily compete with transoceanic routes and a diverse range of charter destinations. Marketing activities in 2012 In keeping with the company s marketing strategy, there was a focus on increasing the traffic of low-cost airlines, whose market share in Slovenia is one of the lowest in Europe. The results of the systematic activities carried out in 2012 and in previous years are the Wizz Air routes to Brussels Charleroi and to London Luton, which have significantly expanded the range of low-cost routes from Ljubljana Airport. In parallel we also pushed on with activities to attract airlines, particularly those that had previously expressed an interest in including Ljubljana in their route networks. Judging by the responses, we anticipate that certain projects could come to fruition in We are of course devoting particular attention to working with foreign airlines to retain the current volume of traffic, and to increase the number of flights and launch new routes. Alongside the activities aimed at airlines, we also focused on strengthening our market position in the region. The company communicated via local media channels on foreign markets, while a significant portion of the marketing of our services was carried out via direct contact with existing and potential business partners. We organised several advertising campaigns in conjunction with Adria Airways. We expanded our cooperation with transport providers, who play a vital role in linking the airport with foreign markets in the region. 32

34 A significant amount of our activity is focused on commercial services, which are an increasingly important element of revenue generation and the safeguarding of the airport s future development. We are constantly striving to attract companies and deals that are not strictly tied to the airport business, but that can make use of our favourable location and infrastructure. A successful project in 2012 was the global launch of a new car model, which put Ljubljana Airport on the map as far as similarly demanding projects are concerned. Our rent pricing policy remained the same, tailored to the location, and ensured good occupancy of our commercial premises. In conjunction with the tenants of our retail and catering premises, we continue to tailor our services to the needs of the passengers. In 2012 we expanded and renovated shopping in international departures. This entailed the modernisation of the shopping concept, to give passengers a pleasant, comfortable retail experience immediately after clearing security. To serve our youngest passengers, we have also developed the kids corner concept alongside retail and catering points. All these activities have been reflected positively in revenues from the rental of retail and catering premises, which despite the decline in passenger numbers remained at the 2011 level, or even increased in certain cases. The business lounge was renovated last year, and was designed to meet the wishes of business passengers. The rising number of users and the increased revenues are testimony to the success of the renovation. In marketing our advertising space we faced a tough situation in 2012 as a result of the adverse economic situation in which our business partners are operating. The forecast that advertising budgets would be further reduced in 2012 came to pass, and we are therefore endeavouring to stem the loss of advertising. We focused on partnership with customers, a search for new and more innovative forms of promotion, and the design of a suitable pricing policy. Although like elsewhere in Europe we faced a decline in air cargo tonnage, our active policy of marketing warehousing services illustrated our competitive advantages and surpassed our targets. Success on the market was secured thanks to our incentivising pricing policy, the quality of our warehousing services and our partnership with freight forwarding companies. A new feature in 2012 was the flyljubljana brand, a passenger loyalty programme that provides our passengers with benefits related to flying from Ljubljana. The programme is also an effective means of communicating with passengers, which we will use for measuring passenger preferences. The established communication channels such as direct mail, a personal approach to partners, and advertising in the media and in tour operators brochures have been supported with online advertising aimed at reaching target customers. We also talk to our target customers via the media communications that we manage ourselves. Plans for 2013 Despite the less favourable economic situation, we will continue to pursue our marketing objectives: to increase traffic, to attract new carriers, to establish new direct scheduled flights, and to maintain cooperation with existing business partners. The domestic airline has a special place in our overall plan of marketing activities in We aim to retain as many of the existing routes as possible, for which reason we will continue with a sales policy that encourages passenger numbers. We will focus marketing activities on raising our profile and strengthening our competitive position. We are planning joint marketing activities in neighbouring countries (Italy, Austria and Croatia) with the domestic airline. We will maintain our market communications via local media, while much of the marketing of our services will be undertaken via direct contacts with existing and potential business partners. 33

35 We will also continue our marketing activities focusing on foreign airlines, with whom we are trying to increase the number of flights and passengers. Particular attention will be devoted to low-cost airlines, where the focus will be on achieving our primary target, which is to develop the existing routes and to continue expanding the low-cost airline presence at Ljubljana airport. We will also continue our marketing activities aimed at increasing cargo tonnage at the airport and developing a local hub for express mail. We will also work with tour operators to support holiday travel, and by advertising in their brochures we will strengthen the synergies to raise the profile of Ljubljana airport. With regard to commercial services we will continue our existing sales strategy and pricing policy, tailored to the location and the services that we provide. Given that no improvement in the economic environment in which the company operates is expected in 2013, we have put in place a proactive approach to seeking market opportunities to achieve our objectives. 3.3 TRAFFIC In traffic terms, last year was worse than forecast. The mounting crisis and the contraction in economic activity had a profound impact on the aviation sector, which before 2008 had enjoyed high growth. Airlines are now more than ever focusing on the profitability of routes and the consolidation of networks. In this fiercely competitive environment the advantage lies with larger airports with a large number of airlines and a wide network of routes. From the point of view of retaining traffic, let alone opening new routes, the situation is significantly more difficult for smaller airports with less market potential, as they are mainly dependent on individual airlines and are significantly more sensitive to changes in their traffic. The adverse economic situation saw the domestic airline Adria Airways cut routes and reduce capacity, which had a significant impact on traffic at Ljubljana airport in In line with its 2012 business strategy Adria Airways made sharp reductions in the number of direct flights and its connections with European cities. The decline in traffic was also to a lesser extent the result of the Czech airline Job Air ending its services in June, having operated the scheduled route to Prague on behalf of CSA. In this harsh business environment, when we are facing a decline in the domestic airline s traffic, we are focusing primarily on maintaining and expanding cooperation with existing foreign business partners and seeking new airlines and routes. Despite the decline in traffic, there were clear positive developments in our cooperation with Turkish Airlines, the easyjet London route and Air France. Finnair returned to the airport in the summer timetable, while thanks to good marketing another highlight was the arrival of low-cost airline Wizz Air, which since October has been flying three times a week to London Luton and twice a week to Brussels Charleroi. Given the significant proportion of traffic at the airport accounted for by the domestic airline, the aforementioned increases in traffic at individual foreign airlines was not enough to compensate for the decline in the former s traffic. Ljubljana Jože Pučnik Airport served 1,198,911 passengers in 2012, down 9.1% on the forecast in the plan and down 12.5% on the previous year. In line with the domestic airline s forecast, our plan forecast a significantly smaller decline in traffic than in 2011 (around 7%), but the actual decline was significantly larger (16.6%). The plan envisaged that some of the forecast decline in the domestic airline s traffic would be compensated for by an increase in foreign airlines traffic, which did not happen, thanks to the sudden withdrawal of the Prague service and smaller-than-forecast increases in the traffic of Turkish Airlines and Air France. Foreign airlines passenger numbers were down 7.8% on the forecast and down 7.2% on

36 Realisation Plan Index Proportion (in %) 1-12/ /11 Pl12 R12/R11 R12/Pl / /11 Pl12 1 NO. OF PASSENGERS 1,198,911 1,369,485 1,319, PUBLIC TRAFFIC 1,168,069 1,359,163 1,299, Domestic carriers 832, , , Foreign carriers 335, , , GENERAL AVIATION 3,966 5,357 5, OTHER 26,876 4,965 14, AIRCRAFT MOVEMENTS 35,019 39,267 38, PUBLIC TRAFFIC 24,485 27,759 25, Domestic carriers 18,292 20,653 18, Foreign carriers 6,193 7,106 6, GENERAL AVIATION 8,942 10,056 10, OTHER 1,592 1,452 1, CARGO TRAFFIC (in tonnes) 17,031 19,659 17, Aircraft 7,907 7,416 7, Truck 8,035 9,231 9, Mail Ship and road break-bulk cargo 275 2, The airlines efforts to achieve higher route profitability are being reflected in a decline in the number of aircraft movements, which stood at 35,019 in 2012 (8.4% less than forecast and down 10.8% on 2011). The shortfall on the forecast was smaller in public traffic (at just 5.4%), while the decline relative to 2011 (11.8%) was a little smaller than that in passenger numbers (14.1%). Foreign airlines have continued the trend of replacing smaller aircraft with larger (and heavier) aircraft, which means a lower number of aircraft movements but is not necessarily negative from a financial point of view, as the revenue from a significant portion of our services depends on aircraft weight. By contrast, there is no talk of heavier aircraft at the domestic airline, which has used smaller aircraft on more flights on average, which in addition to reducing passenger numbers has also had an adverse impact on revenue. Although cargo is the segment most sensitive to the general economic situation, total cargo tonnage amounted to 17,031 tonnes, down 2.8% on the forecast (and down 13.4% on 2011, as a result of the loss of road and ship break-bulk cargo). The decline was more pronounced in the truck cargo segment, and mail tonnage was also down on the forecast and on the 2011 figure, but air cargo tonnage was actually up on the forecast and on the previous year. Seasonal component Public passenger traffic, which accounts for 97.4% of all passenger numbers at the airport, is highly seasonal with a peak in the summer months, while cargo traffic is mostly evenly distributed across the year. 35

37 Monthly breakdown of public passenger traffic and cargo tonnage 150,000 4,000 Passengers 120,000 90,000 60,000 30,000 3,000 2,000 1,000 Aircraft movements, cargo (in tonnes) - jan feb mar apr may jun jul aug sep oct nov dec - Public traffic passengers Public traffic movements Cargo Public passenger traffic: scheduled and charter services A total of 982,025 passengers were carried on scheduled flights operated by eight airlines in 2012, down 15.7% on 2011, while the remaining 186,044 passengers travelled by charter flights. The proportion of public passenger traffic accounted for by charter flights thus increased by just under 2 percentage points in 2012 to 15.9%, while the proportion accounted for by scheduled flights declined to 84.1%. Public traffic pasengers: scheduled and charter flights scheduled charter Transfer passengers in public traffic 0 200, , , ,000 1,000,000 1,200, thousand passengers The number of transfer passengers (138,850) in 2012 was down just over a quarter (26.9%) on the previous year, as a result of the domestic airline s direct flights from Pristina to Frankfurt and Munich, and the withdrawal of certain routes (Paris, Stockholm and London Gatwick) on which there were a significant number of transfer passengers. There was a contrastingly smaller decline (12%) in the number of other passengers in public traffic (which has mitigated the adverse impact of the decline in passenger numbers on revenue, as the fees for transfer passengers are lower). Transfer passengers accounted for 11.9% of all public traffic passengers (compared with 14% in 2011). 36

38 Public traffic pasengers: transfer and other transfer other 0 200, , , ,000 1,000,000 1,200, thousand passengers Low-cost airlines public traffic passengers Another important category in public traffic is low-cost airlines: their passenger numbers of 105,612 accounted for 9% of public traffic passengers. The majority (94,923) were carried by easyjet, which operated a route to Paris until March, and a route to London Stansted the whole year. Of greater significance than the number of new passengers is the expansion of the range of low-cost flights associated with the advent of low-cost airline Wizz Air in the 2012/13 winter timetable. It carried 10,689 passengers in the final quarter of 2012, partly compensating for the decline in easyjet s passenger numbers caused by the withdrawal of its Paris service. Public traffic pasengers: low-cost and other low-cost other 0 200, , , ,000 1,000,000 1,200,000 1,400,000 Public passenger traffic by airline and destination thousand passengers The domestic airline Adria Airways is dominant in public passenger traffic. It saw a sharp decline in traffic in 2012 as a result of network consolidation and the withdrawal of less-profitable routes: passenger numbers were down 16.6% on the previous year (at 832,674), while the number of aircraft movements was down 11.7% (at 17,783). The large decline in the domestic airline s passenger numbers meant that the proportion of total passenger numbers accounted for by Adria Airways declined (to 71.3% in 2012, down 2.1 percentage points on 2011). Foreign airlines carried 335,395 passengers in 2012, 28.7% of all public traffic passengers. Despite the overall decline of 7.2% in passenger numbers from 2011, individual airlines and individual destinations recorded an increase in traffic. There was a significant increase on the previous year (around 30%) in the passenger numbers on Turkish Airlines Istanbul route (there was a rise in the number of flights, and load factors were very good), while Air France maintained its passenger numbers on the Paris route at the level of the previous year. The low-cost airline easyjet increased its passenger numbers and number of aircraft movements on the London Stansted route, although the withdrawal of its Paris route meant that its total passenger numbers were down on 2011, when it was flying to both destinations. The launch of services by Wizz Air in the final quarter of 2012 was particularly significant in terms of the expansion of lowcost flights. Despite our best efforts, we were unable to relaunch scheduled services to Prague with the Czech airline 37

39 CSA, the route having been withdrawn in June. Finnair also operated flights out of Ljubljana in 2012 (a Helsinki service in the summer timetable), as did Montenegro Airlines; both recorded an increase in passenger numbers relative to Breakdown of public passenger traffic by carriers Adria Airways easyjet Air France Turkish Airlines Finnair CSA Czech Airlines and Job Air Wizzair Montenegro Airlines Other , thousand passengers In 2012 public traffic passengers were able to choose between 24 scheduled destinations (compared with 32 in 2011), services to Frankfurt, London, Istanbul, Zurich, Munich, Paris and Moscow accounting for just over half of all passengers. The fall in the number of scheduled routes compared with the previous year was the result of the withdrawal of routes by the domestic airline (in 2012 it stopped flying to Stockholm, Athens, Dublin, London Gatwick, Banja Luka, Marseille, Paris, 1 Kiev, Toulon and Warsaw, and launched a new route to London Luton). Breakdown of public passenger traffic by destinations Frankfurt London Istanbul* Zurich Munich Paris** Moscow Vienna Brussels Skopje Other*** thousand passengers * The fall in passenger numbers on the Istanbul route was the result of the decline in the domestic airline s traffic, while Turkish Airlines recorded an increase of 28.5% in its passenger numbers on this route. ** The fall in passenger numbers on the Paris route was the result of the withdrawal of services by easyjet and the domestic airline, while Air France maintained its passenger numbers on this route at the 2011 level. 1 Air France operates a service to Paris. 38

40 *** The category includes other scheduled destinations in passenger traffic (Amsterdam, Barcelona, Belgrade, Copenhagen, Helsinki, Manchester, Prague, Pristina, Sarajevo, Split, Podgorica and Tirana) and charter destinations (charter flights account for 16% of public traffic passengers). General aviation In general aviation, which is extremely sensitive to the economic situation, albeit of marginal importance to the company in revenue terms, the airport recorded 8,942 aircraft movements in 2012 (down 16.5% on the forecast in the plan and down 11.1% on the previous year). The general aviation passenger numbers of 3,966 were down 26.0% on 2011, and down 29.3% on the forecast. Cargo traffic Although cargo traffic is sensitive to the general economic situation, air cargo tonnage exceeded the forecast for 2012 by 7.4%, and the figure recorded in 2011 by 6.6%. Mail tonnage was down slightly on the forecast and on 2011, while truck cargo tonnage was down on the forecast and on the 2011 figure, largely as a result of a decline in the quantity of pharmaceuticals and other products carried. Total cargo tonnage was down 2.8% on the forecast at 17,031 tonnes, and was down 13.4% on the figure recorded in 2011 as a result of the loss of road and ship break-bulk cargo. Individual airlines recorded an increase in air cargo tonnage relative to last year, having replaced smaller aircraft with larger aircraft (DHL). Scheduled truck cargo services were provided by Air France and Lufthansa, and there were occasional services by Korean Air, Cargolux, CSA, Adria Airways and others. Alongside DHL, the other major express package operators with a presence at the airport are UPS and TNT, who use Ljubljana as a hub for south-eastern Europe. Plans for 2013 The traffic plan for 2013 has been drawn up in light of the airlines 2012/13 winter timetables and 2013 summer timetables, with corrections for the realisation of traffic forecasts in previous years. For airlines that had not announced their flight forecasts for the summer season when the plan was being drawn up, we used the figures for their flights in previous years or their unofficial forecasts. The plan also takes account of economic trends and aviation trends and forecasts for In line with the forecasts for 2013, no significant improvement in the general economic situation is expected. In light of the decline in Adria Airways traffic in 2012 and the announcement that it is planning to relaunch the Paris route in 2013, a minimal increase in the domestic airline s traffic is forecast in We are forecasting slightly higher growth in passenger numbers at foreign airlines, as a result of a new low-cost route and the announcement of additional flights by Turkish Airlines. Passenger numbers are forecast to rise by 2.2% on 2012, while the number of aircraft movements is forecast to fall by 0.9%. The decline in consumption and merchandise exports in Slovenia is expected to result in a decline in cargo tonnage; the forecast is for tonnage to decline by 3.7% relative to

41 3.4 ANALYSIS OF PERFORMANCE OPERATING PROFIT Index Proportion Pl2012 R12/R11 R12/Pl Pl2012 Operating revenues 30,846,060 34,000,550 32,318, Net sales revenue 30,675,759 33,229,615 32,181, Other operating revenues 170, , , Operating expenses 25,620,917 26,413,111 25,854, Costs of materials and services 7,809,193 7,320,746 8,454, Historical cost of goods sold, costs of materials and services ,000 / Costs of materials 1,748,627 1,564,700 1,777, Costs of services 6,060,566 5,756,046 6,476, Labour costs 11,533,862 11,560,563 11,555, Depreciation / amortisation 5,310,229 6,707,714 5,453, Other operating expenses 967, , , Operating profit before interest, taxes and 10,535,372 14,295,153 11,916, depreciation / amortization - EBITDA Operating profit or loss (EBIT) 5,225,143 7,587,439 6,463, Net finance income / costs 1,393,142-1,103, , Finance income 1,501,420 1,368, , Finance costs 108,278 2,471,934 41, Profit (or loss) before tax 6,618,285 6,484,186 7,341, Income tax expense 992,238 1,611,985 1,468, Deferred tax 432, , / Net profit (or loss) 5,193,049 5,257,240 5,873, Despite the decline in traffic compared with 2011 and the shortfall on the forecast, the company ended 2012 with a net profit of EUR 5,193 thousand, slightly less than the figure recorded in 2011, and down 11.6% on the forecast. We partly adjusted to the decline in operating revenues by means of permanent streamlining measures in operating expenses, and partly compensated by increasing finance income. Operating revenues amounted to EUR 30,846 thousand in 2012, down 9.3% on The decline was the result of the decline in the domestic airline s traffic, which caused a decline in revenue from airport services and ground handling services on the domestic market. By contrast, we maintained revenue from airport services and ground handling services on the foreign market at the level generated in Although a significant portion of commercial services are tied to the volume of traffic, revenue in this segment was maintained at just below the 2011 figure. The amount by which operating revenues fell short of the forecast was slightly smaller, at 4.6%. Despite the decline in traffic compared with 2011 and the shortfall on the forecast, the company ended 2012 with a net profit of EUR 5,193 thousand, slightly less than the figure recorded in 2011, and down 11.6% on the forecast. We partly adjusted to the 40

42 decline in operating revenues by means of streamlining measures in operating expenses, and partly compensated by increasing finance income. We succeeded in partly tracking the decline in traffic and revenue by adjusting operating expenses (which amounted to EUR 25,621 thousand). They were down 3% on 2011, and were also just under 1% less than forecast. We are constantly taking measures to control and reduce expenses, but given the nature of the costs (the majority are not directly related to the volume of traffic), options for adjustments are limited in the short term. There is almost no possibility of adjusting the operating costs of the airport facilities. Costs of (previously) non-urgent maintenance have been deferred for several years, but we have now mostly exhausted the possibilities of further delaying the maintenance work, and some work has to be carried out to ensure the normal functioning of the facilities or to prevent damage occurring, irrespective of the volume of traffic. Similarly, we are significantly constrained when it comes to labour costs, other than in flexible forms of employment, as despite the decline in traffic we see the concentration of traffic in peaks, rising demands from passengers in relation to the level of service, and increasingly complicated standards for ensuring safety and security in aviation. Despite all of this, all the key categories of operating expenses were less than forecast, with only the category of other operating expenses recording an increase on 2011 and on the forecast (as a result of an increase in impairments of receivables). Costs of materials increased as a result of a rise in energy prices and purchases of uniforms and work clothes, and costs of services also increased as a result of new costs related to operations and aviation safety, while labour, amortisation and depreciation costs were down on EBITDA amounted to EUR 10,535 thousand, and EBIT to EUR 5,225 thousand. They were down on 2011 (by 26.3% and 31.1% respectively) as a result of the decline in operating revenues, and on the forecast (at 11.6%, the shortfall on the EBITDA forecast was slightly smaller than the shortfall of 19.2% in EBIT). Net finance income, the difference between finance income and finance expenses, amounted to EUR 1,393 thousand. This was just over a half more than forecast, as a result of higher-than-forecast finance income. There is no comparison with 2011, when the figure was negative as a result of the impairment of an investment in an associate. Pre-tax profit was up 2.1% on 2011 at EUR 6,618 thousand, but down 9.8% on the forecast. In connection with the restatement of deferred tax assets as a result of a cut in corporate income tax rates (a detailed explanation is given below), the overall burden from current taxes and deferred tax resulted in a net profit of EUR 5,193 thousand, down 1.2% on 2011 and down 11.6% on the forecast. Operating revenues Operating revenues amounted to EUR 30,846 thousand in 2012, down 9.3% on 2011 and down 4.6% on the forecast. Given the decline in the domestic airline s traffic in particular, in 2012 we focused on retaining and expanding our cooperation with foreign airlines, while in parallel we intensified our activity to retain and increase our revenue from commercial services. Airport services and ground handling services on the foreign market generated revenue of EUR 8,504 thousand, down only slightly (0.9%) on 2011, despite the withdrawal of easyjet s Paris route and the unexpected withdrawal of services to Prague. The key was a significant increase in traffic on a foreign airline s Istanbul route, and the increase in the average size and weight of aircraft operated by foreign airlines (because a significant portion of the revenue for our services is dependent on aircraft weight), which mitigated the negative impact of the decline in traffic on revenue. By contrast, the shortfall on the optimistic forecast was larger (at 9.1%). Our expectations that two foreign airlines would significantly increase their traffic (as forecast), thereby compensating for the loss of traffic on the domestic market, did not come to pass. In addition to the forecast increase in traffic failing to be realised in full, the scheduled services to Prague were withdrawn in June. As stated previously, in keeping with its strategy the domestic airline reduced its traffic more than we had forecast in the plan. It also operated smaller and lighter aircraft, which had a negative impact on revenue. The negative impact of the decline in traffic and the use of smaller aircraft was partly mitigated by transfer passenger numbers accounting for a 41

43 larger proportion of the decline, as the fees for transfer passengers are lower. Revenue from airport services and ground handling services on the domestic market amounted to EUR 12,609 thousand, down 15.5% on 2011 and down 4.7% on the forecast. Increased marketing activities, a selective approach to customers and the organisation of commercial events helped us to generate EUR 8,839 thousand of revenue from commercial services, down slightly on 2011 (by 1.5%) but up 1.6% on the forecast, despite the decline in the volume of traffic in physical terms. Operating revenues by type Airport services and ground handling services - domestic market Airport services and ground handling services - foreign market Commercial services Other 0 5,000 10,000 15,000 in thousand euros Pl2012 The vast majority (99.4%) of the operating revenues of EUR 30,845 thousand consisted of sales revenue, which amounted to EUR 30,676 thousand. Services on the domestic market accounted for EUR 21,519 thousand, or 70.1% of the total ( %), while foreign markets accounted for EUR 9,157 thousand, or 29.9% of the total (2011: 26.9%). Operating revenues on the domestic market were down 4.4% on the forecast, primarily as a result of the decline in the domestic airline s traffic, while as a result of the aforementioned unexpected developments in connection with foreign airlines the shortfall on the forecast on foreign markets was 5.3%, although the higher-than-forecast revenue from commercial services partly compensated for the loss of revenue from airport services and ground handling services on the foreign market. Revenue on the domestic market was down 11.4% on 2011, while by contrast revenue on foreign markets was up 2.3% on the previous year. In the breakdown of operating revenues, there was no significant change compared with 2011 and no deviation from the forecast. Sales of airport services accounted for just under half (49.4%) of total operating revenues, ground handling services for 19.1% and commercial services for 28.7%. The change in the breakdown was minimal compared with 2011, although there was a slight decline in the proportion accounted for by airport services as the proportion accounted for by commercial services increased. 42

44 Breakdown of operating revenues in 2012 Airport services 49.4% Ground handling services 19,1% Commercial services 28.7% Revenue from airport services (EUR 15,231 thousand) primarily comprised landing fees, passenger fees, and revenues from centralised infrastructure and safety checks, which were down on the forecast on the domestic and foreign markets, traffic having failed to reach the forecast volume. The trend in revenue from landing fees and centralised infrastructure on foreign markets was positive compared with 2011, while this revenue on the domestic market and other revenue tied to passenger numbers (passenger fees and airport security fees) on the domestic and foreign markets were down on Of the revenue from ground handling services (EUR 5,883 thousand), scheduled services accounted for the majority (EUR 4,850 thousand or 82%). The figure on the foreign market was up slightly on 2011 but down on the forecast, while the figure on the domestic market was down on 2011 and on the forecast. Despite the decline in traffic on the domestic and foreign markets, we managed to increase revenue from the use of the business lounge, which was up 6.6% on 2011 and up 20.2% on the forecast. Revenue from commercial services in 2012 (EUR 8,839 thousand) was up 1.6% on the forecast, but down slightly (1.5%) on Rents accounted for over a third of the total (EUR 3,074 thousand), and were at the level of those recorded in 2011, as forecast. Attention should be drawn to rents for retail premises that were redesigned and modernised and the partnership with tenants with whom we tailor our services to the needs of the target customers, which resulted in revenue that was up 2.5% on 2011 and up 5.5% on the forecast. Given the decline in passenger numbers, revenue from parking fees was down 11% on 2011 and down 8% on the forecast, a smaller decline than that in passenger numbers. Revenue from warehousing services, which is primarily tied to cargo tonnage, was also down less than the decline in cargo tonnage (4.6%), and was up 2% on the forecast. Despite the general trend of curbs on advertising expenditure in connection with the adverse economic situation, revenue from advertising services was down just 2.6% on 2011 and down 3.7% on the forecast. The majority of other revenues (EUR 894 thousand) consisted of revenue from refunds of costs charged to tenants 2 (EUR 708 thousand), which was up 4.5% on 2011 and up 5% on the forecast. Other 2.8% 2 Costs of electricity, water, telephone, heating, etc. 43

45 Operating expenses Operating expenses amounted to EUR 25,621 thousand in 2012, down 3% on 2011, and 0.9% less than forecast. We succeeded in holding all categories of expenses below their forecast levels, with the exception of other operating expenses. Despite new costs for aviation safety services, and rising energy prices, costs of materials and services were less than forecast. Amortisation and depreciation were also less than forecast, partly as a result of the deferral of certain planned investments in buildings and equipment. Labour costs were also down slightly on the forecast, while other operating expenses were higher than forecast as a result of impairments of receivables created in accordance with accounting standards. For the reasons stated in the previous paragraph (rising energy prices, new costs for aviation safety services), costs of materials and services in 2012 were up on 2011, while amortisation and depreciation were down significantly and labour costs were down slightly on Operating expenses by type in thousand euros 12,000 10,000 8,000 6,000 6,061 5,756 6,477 11,534 11,561 11,555 5,310 6,708 5,453 4,000 2, ,749 1,565 1,778 Costs of materials Costs of services Labour costs Depreciation / amortisation Pl Other operating expenses In the breakdown of operating expenses, labour costs accounted for 45% of the total, followed by costs of services (23.7%), amortisation and depreciation (20.7%), costs of materials (6.8%) and other operating expenses (3.8%). The proportion accounted for by amortisation and depreciation declined compared with 2011, as a result of a decline in amortisation and depreciation costs, and the proportions accounted for by other categories of operating expenses each increased by 1 percentage point, while there were no significant deviations from the forecast for the breakdown of operating expenses. 44

46 Breakdown of operating expenses Other operating expenses 3.8% Costs of materials 6.8% Labour costs 20.7% Costs of services 45.0% Depreciation / amortisation 23.7% Costs of materials amounted to EUR 1,749 thousand in 2012, down 1.6% on the forecast, but up 11.8% on 2011 as a result of the rise in energy prices and purchases of uniforms and work clothes. New uniforms and work clothes are purchased every few years, and the last such purchase was in Energy costs account for 61% of costs of materials (EUR 1,062 thousand in total). A major cost in the category is electricity costs (EUR 543 thousand), which were down just under 5% on 2011 and on the forecast as a result of savings achieved via streamlining measures and more favourable consumption over the course of the day (thereby reducing the average price). The increase in heating costs (EUR 308 thousand, up 18.8% on 2011 and up 13.2% on the forecast) and motor fuel costs (EUR 211 thousand, up 15.8% on 2011 and up 10.5% on the forecast) was the result of a rise in these energy prices, while the quantities consumed did not deviate significantly from the forecast or from the previous year. Other major categories in costs of materials include costs of non-durables 3 in the amount of EUR 209 thousand, small inventory costs 4 in the amount of EUR 179 thousand, and costs of materials for current maintenance in the amount of EUR 156 thousand. Other than small inventory (the forecast was exceeded because the purchase of uniforms and work clothes planned for 2011 was deferred until 2012), and the aforementioned rise in energy prices, which caused an increase in costs of fuels and heating, all other categories of costs of materials were less than forecast. Costs of services amounted to EUR 6,061 thousand, down significantly on the forecast. Streamlining measures meant that they were down 6.9% on the forecast, but were up 5.3% on 2011, primarily as a result of the inclusion of new services related to our core line of business (costs of the services of the Civil Aviation Agency). Costs of services are illustrated in the table in point of the Financial Report, but a substantive explanation of the major items is given below. Security costs accounted for just over a quarter of costs of services, and amounted to EUR 1,610 thousand. Streamlining measures in the organisation of security meant that the figure was 6.9% less than forecast, and was down 0.7% on Maintenance costs amounted to EUR 911 thousand in 2012, up 2.9% on the previous year, but down 10% on the forecast. The shortfall on the forecast was partly a reflection of the deferral of certain maintenance work until 2013, and partly the result of savings from the reduced demand for maintenance associated with the decline in traffic. 3 A significant portion of these costs consists of gritting materials and deicing fluid (aircraft and runways) used in winter conditions. 4 Primarily relates to the purchase of uniforms and work clothes made every few years. 45

47 The new services of the Civil Aviation Agency 5 (EUR 268 thousand) meant that the costs of services related to the core line of business in 2012 were up 48.6% on the 2011 figure. They were down 6.2% on the forecast, partly as a result of a decline in costs of other services caused by the decline in traffic. We earmarked EUR 450 thousand for advertising in 2012, which was at the forecast level. The figure was down 16% on 2011, because of a decline in certain marketing activities. The costs of intellectual property services in 2012 were up around a third on 2011 at EUR 362 thousand, 14.7% more than forecast. The increase was primarily the result of an increase in certain services of a one-off nature that were smaller in 2011 (a birdstrike security study, an energy study, valuation reports). The decline in traffic brought a significant decline in costs of student work (we have not engaged any temps from the employment agency since January 2011), which amounted to EUR 332 thousand in The figure was down 21% on 2011 and down 12.6% on the forecast (the costs are explained in detail in the breakdown of labour costs below). Labour costs amounted to EUR 11,534 thousand, down 0.2% on 2011 and on the forecast. Labour costs now include full-time employees and flexible forms of employment, for which reason a substantively more reasonable comparison is with labour costs plus costs of student work, 6 as shown in the table below. The broader labour costs determined in this manner amounted to EUR 11,865 thousand, down 1% on 2011 and down 0.6% on the forecast. The adjustment to the decline in traffic was primarily made via student work, the costs of which were reduced by 21% compared with 2011 and were also 12.6% less than forecast. The labour costs of full-time employees were down a little on the previous year and on the forecast, despite the additional costs incurred by redundancies (see point 3.5 of the Business Report) Pl 2012 Index 12/11 Index 12/Pl12 Labour costs (regular employees) 11,533,862 11,560,563 11,555, Labour costs (student work and agency)* 331, , , Total 11,865,481 11,980,581 11,934, * Employment agency costs amounted to EUR 14,427 in 2011, whereas the company did not use the agency in Amortisation and depreciation amounted to EUR 5,310 thousand in 2012, down 20.8% on 2011 and down 2.6% on the forecast. The shortfall on the forecast was related to the deferral of certain planned major investments in buildings and equipment. Of other operating expenses in the amount of EUR 968 thousand, EUR 453 thousand comprised the creation of impairments of trade receivables in accordance with the company s accounting policy. Other major items in this category were expenses from the elimination of land under a contract of exchange for diverting the main road around the airport (EUR 232 thousand), a fee for the use of building land in the amount of EUR 103 thousand, and expenses from the creation of provisions for retirement benefits and jubilee benefits for employees in the amount of EUR 61 thousand. Operating profit (EBIT) The operating profit (EBIT) generated as the surplus of operating revenues over operating expenses was EUR 5,225 thousand. EBIT was down 31.1% on 2011, and down 19.2% on the forecast, primarily as a result of the decline in operating revenues, which we were unable to fully compensate for on the cost side. 5 Under the Aviation Act, the Civil Aviation Agency has the right and obligation to supervise air safety and to issue and renew certification and licences in the field of aviation. The Aviation Act stipulates that parties to the procedures being administered by the agency pay for its services in line with a tariff approved by the Slovenian government. 6 We did not work with the employment agency in 2012 (even in 2011 our work with the agency was minimal). 46

48 Finance income and expenses Finance income amounted to EUR 1,501 thousand in 2012, up 9.7% on This was also significantly more than forecast, as a result of regular payments by our business partners, the lower-than-forecast investment in buildings and equipment, and the consistent application of investment policy aimed at maximising returns at an acceptable level of risk. Finance expenses were down significantly on 2011 at EUR 108 thousand, as a result of the impairment of an investment in an associate in Finance expenses were higher than forecast, as a result of foreign exchange losses. Income tax expense and deferred tax Current corporate income tax in 2012 amounted to EUR 992 thousand, while the net profit was also reduced by EUR 433 thousand of deferred tax. The majority of the negative effect of deferred tax was the result of the change in income tax expense rates during this year and the years ahead. It is necessary to restate deferred tax assets, which are the result of operating expenses in previous years that were not recognised as deductions during tax returns at the time (but will be in future periods), at the new (lower) rates, which had a negative impact on net profit (see point of the Financial Report). Net profit After the deduction of income tax expense from operating profit and the effect of deferred tax, the net profit for the 2012 financial year amounted to EUR 5,193 thousand, down 1.2% on 2011 and 11.6% less than forecast. 47

49 3.4.2 BALANCE SHEET Index 12/11 Proportion 12 Proportion 11 ASSETS 130,283, ,797, Non-current assets 91,746,477 97,567, Intangible assets 2,151,953 2,191, Property, plant and equipment 75,730,332 79,616, Investments in associates 3,147,369 3,147, Non-current financial assets 10,106,448 12,062, Non-current trade and other receivables 59, Deferred tax assets 550, , Total current assets 38,537,220 31,229, Current assets excluding deferred expenses and accrued income 38,382,143 31,198, Inventories 284, , Current financial assets 32,642,852 25,798, Current trade and other receivables 5,229,711 4,946, Cash and cash equivalents 225, , Current deferred expenses and accrued income 155,077 30, EQUITY AND LIABILITIES 130,283, ,797, Capital and reserves 124,433, ,726, Issued capital 15,842,626 15,842, Share premium 24,287,659 24,287, Profit reserves 78,729,212 76,132, Revaluation surplus 2,974,850 3,834, Retained earnings 2,598,729 2,628, Total non-current liabilities 2,137,913 2,326, Provisions and non-current accruals and deferred income 1,429,850 1,627, Provisions for jubilee benefits, termination benefits and future costs 1,120,317 1,204, Non-current accruals and deferred income 309, , Non-current liabilities 708, , Non-current trade and other payables 708, , Deferred tax liabilities Total current liabilities 3,712,708 3,744, Current liabilities 3,606,403 3,580, Current trade and other payables 3,606,403 3,580, Current accruals and deferred income 106, , Aerodrom Ljubljana, d.d. s balance sheet total amounted to EUR 130,284 thousand as at 31 December 2012, up 1.2% on 31 December Non-current assets accounted for 70% of the balance sheet total at EUR 91,746 thousand, down 6% on 31 December Non-current liabilities accounted for 97% of the balance sheet on the liabilities side as at 31 December 2012 (the same proportion as a year earlier); the majority comprised shareholder equity, which amounted to EUR 124,433 thousand, or 95.5% of the balance sheet total. 48

50 Assets and equity and liabilities by maturity (in thousand euros) 126,571125,053 91,746 97,568 38,537 31,230 3,713 3,745 Non-current assets Current assets Non-current liabilities Current liabilities The decline in non-current assets relative to 31 December 2011 was primarily related to a decline in the value of property, plant and equipment, which was down 4.9% as a result of the surplus of depreciation over acquisitions in Non-current assets also declined as a result of a fall in the value of long-term investments (the stock as at 31 December 2012 was down 16.2% on 31 December 2011), partly as a result of the redemption of investments during the year and the restatement of investments to fair value as at 31 December Long-term investments accounted for 7.7% of the balance sheet total (31 December 2011: 9.4%). Current assets accounted for the remaining 30% of assets as at 31 December 2012, and were up 23.4% on 31 December The increase in current assets was a reflection of the increase in short-term investments (short-term deposits and loans), which accounted for a quarter of the balance sheet total as at 31 December 2012 (31 December 2011: a fifth), and were up 26.5% on 31 December Current operating receivables accounted for 4% of the balance sheet total as at 31 December 2012, and were mostly unchanged from 31 December Assets in thousand euros 100,000 80,000 81,809 77,882 60,000 40,000 32,643 25,799 20,000 0 Intangible and tangible assets 3,147 3,147 Investments in associates 12,063 10,106 Non-current Current financial financial assets assets ,2304,946 Current trade and other receivables 1,2751,034 Other assets Non-current liabilities account for the vast majority of liabilities (97%), and finance all the non-current assets and a significant proportion of the current assets, the majority of which relates to shareholder equity (95.5% of the balance 49

51 sheet total as at 31 December 2012). Shareholder equity was up 1.4% on 31 December Current liabilities accounted for 3% of the balance sheet total, and primarily comprised current operating liabilities. The company had no financial liabilities as at 31 December in thousand euros 140, , ,000 80, , ,726 Equity and liabilities 60,000 40,000 20, ,138 2,326 3,713 3,745 Capital and reserves Other non-current liabilities Current trade and other payables, current accruals and deferred income FINANCIAL MANAGEMENT The company s liquidity remained high in 2012, partly as a result of the regular payments made by our customers, and partly as a result of the low investment in buildings and equipment, in keeping with proper financial policy in any case. We settled our liabilities as they fell due, and increased short-term investments by EUR 6,844 thousand, taking the stock to EUR 32,643 thousand. They primarily comprise bank deposits. When investing spare cash, we pursue a combination of diversification, security and return. The company is primarily financed via equity. The investments made in 2012 and in previous years were financed in full by internal resources, and the company has no financial liabilities. The operating liabilities disclosed as at 31 December 2012 relate to non-past-due current trade payables and liabilities to employees. Given its asset position and the existing breakdown of its liabilities, the company is assessed as having favourable possibilities of obtaining external financing (loans), despite the current adverse situation on the financial markets. The cash that we have invested at banks in the form of various fixed-term deposits represents a high-quality liquidity reserve. No difficulties with current and non-current solvency are anticipated in 2013 (despite the higher planned investments in buildings and equipment), provided of course that our largest business partner continues normally as a going concern. 50

52 3.4.4 CASH FLOWS Opening balance of cash 163, ,543 Cash flows from operating activities 9,729,704 11,171,834 Cash flows from investment activities -7,041,133-9,431,097 Cash flows from financing activities -2,626,416-1,829,145 Closing balance of cash 225, ,135 The cash flow from operating activities generated in 2012 amounted to EUR 9,730 thousand. The company used it for dividend payments (cash flow from financing activities) and for investment. Financing expenditure was up, because of the increase in dividend payments in 2012 (in substantive terms these were the dividends for the 2011 financial year) than in 2011 (the dividends for the 2010 financial year). The company mainly placed the remaining surplus generated by operating activities after the payment to the owners (dividends) and the cash from returns and releases of existing financial assets in current financial assets PERFORMANCE INDICATORS The EBITDA and EBIT margins have declined, largely as a result of the inability to compensate for the decline in operating revenues in full on the operating expense side. Another factor in the decline in the EBITDA margin was the decline in amortisation and depreciation (which was lower in 2012 than in 2011) Index 12 / 11 EBITDA margin* EBIT margin** * (operating profit or loss + depreciation / amortisation) / operating revenues ** operating profit or loss / operating revenues The decline in operating revenues was reflected in a decline in the operating efficiency ratio, while the increase in finance income and decline in finance expenses (which were high in 2011, primarily as a result of impairments of investments) brought an increase in the overall efficiency ratio in Index 12 / 11 Operating efficiency ratio* Overall efficiency ratio** * operating revenues / operating expenses ** total revenues / total expenses The fractional decline in net profit in parallel with the increase in assets and equity was reflected in a slight decline in ROA and ROE Index 12 / 11 Net ROE* Net ROA** * net profit / average capital and reserves excluding net profit for the year ** (net profit + interest obtained) / average assets 51

53 There were no significant changes in the breakdown of liabilities in 2012: equity is dominant, accounting for 95.5% of the total, and the company is free of debt and financially stable. Equity suffices for the financing of all non-current assets and a portion of the current assets Index 12 / 11 Equity to non-current assets ratio* Self-financing ratio** * capital and reserves / non-current assets ** capital and reserves / equity and liabilities PLANS FOR 2013 The company s business plan for 2013, which was confirmed by the Supervisory Board in December 2012, takes account of the forecast for traffic, the forecast breakdown of services and the anticipated level of pricing, and the regularity of payments by our customers, the largest business partner in particular. No expenses from the impairment of investments are forecast. Passenger numbers in 2013 are forecast to be up 2.2% on 2012, while the number of aircraft movements is forecast to decline by 0.9% and cargo tonnage by 3.9%. The forecast increase in passenger numbers is based on a rise in public traffic passenger numbers, in particular those of low-cost airlines, which use larger aircraft and have good load factors. We are planning to launch two new routes in the 2013/14 winter timetable, alongside easyjet and Wizz Air. As a reflection of the changes in the volume of traffic in 2013, the plan forecasts operating expenses of EUR 30.2 million, down 2.2% on Sales revenue will account for the majority. Sales revenue on the domestic market is forecast to remain at the same level as in 2012, while sales revenue on the foreign market is forecast to decline by 6.8%. We will implement continual cost controls and adjust operating expenses to the current market situation, taking the volume of traffic and the current liquidity situation at the company into account. Operating expenses are forecast at EUR 24.8 million, down 3.2% on All key categories are forecast to decline relative to 2012, other than costs of services (where an increase in promotional costs is forecast, in connection with activities to promote sales and increased insurance premiums). EBITDA is forecast at EUR 10.3 million, EBIT at EUR 5.3 million and net profit at EUR 5 million. 3.5 EMPLOYEES In 2012 we continued to adjust the headcount to the decline in traffic. The number of full-time employees was cut by ten, primarily through the expiry of temporary positions and retirements. We continued to use flexible forms of employment, by means of which we adjust the headcount to the seasonal nature of our business activities. For several years we have cooperated with employers whose demand for labour is higher in the winter (in contrast to ours). Three members of staff retired last year. They were not replaced, and their work was assigned to other employees. The number of full-time hours worked in 2012 was up 0.3% on 2011, while the number of hours of student work was down 25%, and our cooperation with the employment agency was ended completely (having been minimal in 2011). The average headcount calculated from total hours worked (including student work) stood at 436 in 2012, down 11 (or 2.4%) on The company had 400 employees at the end of the year, of whom 14 (3.5%) were temporary employees. The gender breakdown was 73.5% men, 26.5% women. 52

54 passengers 1,400,000 1,300,000 1,369, employees on the basis of hours worked ,200,000 1,198, ,224, ,100,000 1,000, Pl passengers employees Age structure of employees over to to to to to to 30 to 25 0% 5% 10% 15% 20% 25% The low level of recruitment and retirement and the departure of nine temporary employees brought an increase of 0.8 in the average age, which rose from 38.9 to 39.7, and almost three-quarters of the staff (294 employees in total) are aged between 26 and 45. The proportion accounted for by employees aged between 26 and 30 declined by 3.3 percentage points in 2012 (there were 53 such employees as at 31 December 2012), while the proportion accounted for by employees aged between 41 and 50 increased by 2.2 percentage points (there were 113 such employees as at 31 December 2012). 53

55 Education structure VIII. VII. VI. V. other 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% The change in the qualifications breakdown during 2012 was a reflection of our efforts to raise average qualifications levels. Eight employees obtained tertiary qualifications in 2012 (two university qualifications, two four-year tertiary diplomas, two two-year tertiary diplomas, two vocational qualifications). External training courses professional education information technology and computers language courses e-learning management skills occupational health and safety 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% There were 152 training courses provided outside the company in 2012, 14 more than in The majority comprised professional training, of which there was 11% more in 2012 (we significantly expanded the training for fire-fighters). This was followed by training in IT and computing, foreign language courses, e-learning, training in management, and occupational health and safety training. There were 476 enrolees in outside education and training, who received a total of 8,300 hours of instruction, 3,300 more than in Each participant thus received 17 hours of instruction, while the average for each employee was 21 hours. We earmarked EUR 103 thousand for outside education and training, up 44% on the previous year, and equivalent to EUR 236 per employee. 54

56 In-house training licences security handling with dangerous materials occupational health and safety fire safety airport driving permit 0% 10% 20% 30% 40% 50% 60% 70% The specific nature of our business activities means that there is a great emphasis on in-house training, which is provided at the Training Centre, where an effective system of instruction from in-house experts with years of experience and knowledge in civil aviation has been put in place. A total of 7,433 hours of instruction (three times more than in 2011) was provided in in-house training at 144 training events to 1,437 enrolees (18.6. hours of instruction per employee). The majority (62%) comprised training for obtaining or renewing licences for trained airport personnel, while 18% comprised training in civil aviation security. Concern for quality in training programmes In 2012 we put in place a system of internal controls at the Training Centre, and a system for monitoring the provision of in-house training in accordance with ISO standards. This ensures that the requisite level of quality is achieved in the training programmes, and also provides a sound basis for making improvements in this area. Cooperation with education institutions, work experience We expanded our work with providers of secondary and university-level education in Nine university students and six school students were provided with practical training amounting to almost 4,300 hours, 1,300 hours more than in Plans for 2013 We are planning to launch e-learning for in-house training, to allow employees to undertake training at home, while giving them access to more educational content. In parallel we will also organise training workshops for in-house lecturers and instructors on adult education methods, with an emphasis on innovations. We will earmark EUR 104 thousand this year to continual improvements to the internal transfer of knowledge and to external forms of training. In 2012 we focused on planning HR development, while in 2013 we will mostly begin putting this into practice. All the company s employees have been invited to participate. The objective of these activities is to put in place a system for monitoring those employees with the best prospects, helping in their career development and ensuring a system of succession. 55

57 3.6 INVESTMENTS IN INTANGIBLE ASSETS, BUILDINGS AND EQUIPMENT Annual Report 2012 Investments in buildings and equipment are following the business plan for the 2012 to 2017 period, although the plan for 2012 was only realised in part, as a result of the uncertain situation in the aviation sector, which resulted in the postponement of some planned investments until next year. In 2012 a total of EUR 2,209 thousand was invested in buildings and equipment, of which EUR 983 thousand was for buildings, while the remainder was spent on airport equipment (EUR 976 thousand) and computer equipment (EUR 250 thousand). The investments were financed with internal resources. Realisation 2012 Plan 2012 Buildings 982,623 10,885,000 Computer equipment (hardware and software) 250, ,740 Other airport equipment 976,611 1,732,080 Total 2,209,417 13,107,820 Comparison of investments in buildings and equipment and the calculation of amortisation / depreciation for the period in million euros amortization / depreciation investments in intangible assets, buildings and equipment Building construction The majority of the investment in buildings in 2012 went to the renovation of the ground operations hangar (EUR 735 thousand) and the renovation of the business lounge in the international terminal (EUR 95 thousand). Computer equipment We continued investing in IT development in 2012, in the amount of EUR 250 thousand. An upgrade of the parking system hardware and software increased its reliability, new servers were added to the server system, and lower-spec PCs were replaced. Three software modules were introduced into the system for reporting and monitoring 56

58 documentation in circulation, the automation of the procurement process was begun, and procedures to upgrade the company s website were initiated. Other airport equipment EUR 976 thousand was earmarked for airport equipment in The majority comprised the purchase of lighting equipment for the upgrade of the manoeuvring area (EUR 232 thousand), a low-floor airport bus for transporting passengers (EUR 230 thousand), equipment for the renovation of the ground operations hangar (EUR 194 thousand) and furniture and fittings for the renovation of the business lounge (EUR 100 thousand) PLANS FOR 2013 Investments in buildings and equipment totalling EUR 27,604 thousand are planned in They are expected to be financed with internal resources (provided that the traffic forecast is realised and our customers maintain payment discipline). The majority (91% or EUR 25,055 thousand) comprises investments in buildings, while the remainder relates to investments in airport equipment (EUR 2,132 thousand) and computer equipment (EUR 417 thousand). We are implementing the business plan for the 2012 to 2017 period, although the plan for 2013 includes several items that were in the plan for 2012 but were not carried out for objective reasons. The most important task will be beginning the construction of the new T2 passenger terminal and holding all the remaining public tenders to select contractors and equipment suppliers for T2 and the renovation of the T1 passenger terminal. We will continue to purchase land for the development of the Aeropolis commercial and logistics centre. We will overhaul the TWY A taxiway and the TWY P and TWY N connector taxiways, expand the TWY K connector taxiway and move the centreline lighting on the TWY B connector taxiway. The major investments will also include the construction of the first phase of the airport perimeter service road and the upgrade of the technical security system. The project documentation will be drawn up for the project to provide heating and cooling for airport buildings using integrated longterm solutions. Energy efficiency will be improved by means of an energy efficiency upgrade for the old administrative building and the replacement of lighting in the car park building, which will reduce energy costs. The major planned procurements of equipment for airport services include a large fire-fighting vehicle, a snow brush and plough, an extendible roller transporter, an x-ray machine for cargo inspection, a friction measurement vehicle and runway thermosensors. 57

59 4 AELG SHARES AND OWNERSHIP OF THE COMPANY As at 31 December 2012, the company had 7,493 shareholders, an 5.7% drop on 31 December There were no significant changes in the company s major shareholders in Republic of Slovenia Kapitalska družba, d. d. Slovenska odškodninska družba, d. d. Private individuals Other legal entities Ten largest company owners as at 31 December % 10% 20% 30% 40% 50% 60% 31/12/ /12/2011 No. of shares Holding (in %) 1 Republic of Slovenia 1,923, Kapitalska družba, d.d. 279, Slovenska odškodninska družba, d.d. 258, Zavarovalnica Triglav, d.d. 151, Publikum Trezor d.o.o. 103, KD Rastko, delniški vzajemni sklad 54, Abanka d.d. 49, Salink Limited 42, NFD 1, delniški podsklad 37, KD Galileo, fleksibilna struktura 27, TOTAL 2,927, The company s ten largest shareholders held 2,927,486 shares (a 77.11% holding in the capital of the company) as at 31 December Foreign shareholders held 77,920 shares (a 2.05% holding in the capital of the company). As at 31 December 2012 two members of the Supervisory Board held shares in the company, while the members of the Management Board did not hold any shares as at the aforementioned date. No. of shares Holding (in %) Drago Čotar Igor Domevščik TOTAL

60 Slovenian capital market and AELG share in SBITOP AELG SBITOP AELG The closing price of AELG shares rose 16.5% in The closing share price stood at EUR 12 as at 31 December 2012, while the average closing share price was down EUR 0.39 during The SBITOP rose by 7.8% over the reporting period. The Slovenian stock market has been out-performed by other European markets, as a result of not only the European debt crisis, but also the poor national fiscal position and the difficult financial situation. The highest closing share price was achieved on 16 April (EUR 14.50), while the highest volume of trading was achieved on 25 July (EUR 309 thousand). The volume of trading in AELG shares was EUR 1,323 thousand in 2012 (of which EUR 801 thousand was in ordinary trading and EUR 522 thousand was in block trades), representing 0.37% of the total volume of trading on the Ljubljana Stock Exchange. Market capitalisation stood at EUR 23.2 million as at 31 December 2012, representing 0.13% of the total market capitalisation of shares on the Ljubljana Stock Exchange. Communication with shareholders and various publics To keep investors informed, we have provided for up-to-date information to investors in a non-discriminatory and fair manner via the Ljubljana Stock Exchange's SEOnet notification system, the central storage system for regulated information (Info Storage) and in a special section for investors on the company s website. We published 19 announcements on the SEOnet system in 2012, 13 less than in the previous year. The public was informed in line with valid legislation, stock exchange rules and the company s communication strategy, which includes a definition of those persons responsible for communication with various publics, the flow and internal control of price-sensitive information within the company, between its creation and publication, and safeguarding of trade secrets, the definition of key publics, the communications strategy and cooperation with those publics, and the definition of content and procedures for communicating with various publics. In November 2012 the Management Board and Supervisory Board organised a meeting with the shareholders, together with their colleagues. Shareholders were briefed on the company s performance during the first three quarters of 2012, with a forecast for the remainder of the year, which was public at that time, together with analysis of the economic environment and the markets where Aerodrom Ljubljana operates, and the status of the T2 project. A total of 31 press releases were sent to all Aerodrom Ljubljana stakeholders in These announcements allow the media and other interest groups to scrutinise the work of the management, and to understand our business and our current and future activities. 59

61 Significant data on AELG shares Market capitalisation as at 31 December* - in thousand euros 23,235 19,943 Turnover - in thousand euros 1,323 1,298 Lowest closing share price - in thousand euros Highest closing share price - in thousand euros Average closing share price - in thousand euros Closing share price as at December Book value of shares as at 31 December - (capital and reserves / total number of shares issued) Closing share price to book value of shares as at 31 December Basic earnings per share - (net profit (or loss) of ordinary shareholders / average number of ordinary no-par value shares) Diluted earnings per share - (net profit (or loss) / average number of all shares)** Total number of shareholders as at 31 December 7,493 7,948 Total number of shares issued 3,796,527 3,796,527 - participating preference no-par value shares 1,860,298 1,860,298 - ordinaray no-par value shares, listed on stock exchange 1,936,229 1,936,229 * Ordinary no-par value shares, listed on stock exchange used in calculation. ** All shares used in calculation. Dividend policy One of the most important objectives adopted by Aerodrom Ljubljana, d.d. as part of its development strategy up to 2015 is its capital policy, which is based on maximising the company s returns and, consequently, the share returns in the long term. In line with this dividend policy, the company allocates part of its profits (in line with its Articles of Association) to reinvestment in further development, and part (in line with a general meeting of shareholders resolution) for payment of dividends to shareholders. 60

62 Review of dividends in the period Preference Year Ordinary no-par value shares participating no-par value shares ,43 0, ,43* 0,54* * Proposed amount, which will be discussed by the general meeting of shareholders planned for the second half of June Given the circumstances in which the company is operating, the Management Board has proposed a gross dividend of EUR 0.43 per ordinary no-par-value share. Dividends for participating preference no-par value shares comprise a fixed portion and a variable portion, and are calculated in accordance with Article 8 of the company s Articles of Association. The proposed dividend amount reflects the belief of the company s management that planned investments in the infrastructure and other facilities are crucial for the company s further development, for the high-quality provision of services and the provision of a satisfactory level of security, which will ensure an increase in the value of the company and enhance its competitive position in the future. Financial calendar of Aerodrom Ljubljana, d.d. for 2013 Scheduled date of Significant company announcement announcement 1. Audited Annual Report 2012 and Statement of Compliance with the Corporate Governance Code 11 April Operations in the first three month of May Invitatio n convening the 17 th general meeting 21 May th general meeting's resolutions 20 June Ex-dividend date 26 June Dividend payout 12 September Half-yearly business report 22 August Operations in the first nine month of November 2013 Periodic announcements and other price-sensitive information, and any changes to the projected dates of the announcements will be published on SEOnet, the electronic information system of Ljubljana Stock Exchange, on Info hramba, the central controlled information storage system, and on Aerodrom Ljubljana s website ( 61

63 5 RISK MANAGEMENT The area of risk management was upgraded and formalised at the company in A document was adopted setting out the umbrella risk management strategy and the structure of internal controls, and a unified basis was put in place for interpreting the concept of risk management, defining and assessing risks, and taking measures to mitigate or eliminate risks or to reduce the damaging consequences. The document defines the fundamental principles for establishing internal controls, with an emphasis on the importance and awareness of internal controls in all the company s business processes from the point of view of their establishment and operation. Responsible officers are defined for each type of risk as structured in the umbrella risk management document. The risks are structured as follows with regard to the types of business process at the company: strategic risks, business risks, financial risks, safety and security risks, environmental risks, general risks. The umbrella risk management strategy and the structure of internal controls also set out the basis for the standardisation of records and the monitoring of undesirable events (incidents) at the company, which will be carried out in The adoption of the risk management rulebook and the establishment of the internal controls has formalised risk management procedures. The risk map is a constituent part of this rulebook. We have put in place a standard assessment of risks from the aspect of the probability of realisation (loss event or possibility), namely virtually certain, very likely, possible, unlikely or rare, and from the aspect of the consequences of the risk being realised (level or amount of damage), namely very significant, significant, moderate, low or negligible. The rulebook includes a risk matrix to ensure the standard assessment of risks. Risks are defined with regard to the overall level of risk as key, high, medium or low. The rulebook has also formalised the potential responses to risks used at the company (risk assumption, risk avoidance, risk transfer, risk mitigation) and has standardised the interpretation of the level of acceptable risk. The rulebook envisages an examination of the relevance and effectiveness of the measures taken, at least twice a year, while the same applies to reporting to the Management Board and the Supervisory Board on all major risk management activities. A risk register was also drawn up at the company in STRATEGIC RISKS Strategic risk is understood at the company as the probability or possibility of a certain event having a positive or negative impact on the ability to meet the strategic objectives and thus the values of the company. Internal controls have been put in place to monitor the implementation of the strategy, and the powers and responsibilities of those responsible for managing strategic risk have been defined in detail. The management of strategic risks has addressed risks that could arise at the company for reason of: 62

64 the domestic airline s market dominance and its operational difficulties, the limited chances of the entry of new competitors into the Slovenian market, even in the event of the withdrawal of existing routes, the decline in traffic because of the political and economic crisis, high fuel prices, etc., an inability to build/upgrade airport infrastructure and to build commercial premises, excessively long procedures and unregulated relations with the government as the landowner, airport infrastructure of the wrong size to optimally utilise capacity, a shortfall in the development of airport infrastructure: emphasis on cargo (missed opportunity), reputation risk (one of the most significant strategic risks). Assessment of the Management Board: Strategic risks are key or high, and are most notably those over which we have no possibility of exerting a major influence because they arise in the external environment, although they are systematically monitored and analysed. For other risks it is assessed that the consistent implementation of risk management measures is reducing the likelihood of major damage being incurred. 5.2 BUSINESS RISKS Given the numerous business processes that we pursue at the company, there are also a significant number of business risks: investment risk (buildings and equipment), sales risk, procurement risk, operational risk, HR management risk, IT risk, legal and legislative risks, asset risk, outsourcing risk, project risk. Investment risk Given its major significance to the company, investment risk is classed as a strategic risk. Sales risk The major concern in sales risk is the sales strategy, which was assessed as appropriate. Additional internal controls have been put in place for other sales risks, or are under preparation. These controls reduce the likelihood of risks being realised or damage being incurred. 63

65 Assessment of the Management Board: Sales risks are not assessed as key or high. It is assessed that the consistent implementation of risk management measures is reducing the likelihood of major damage being incurred. Procurement risk Given the company s legal commitment to conducting all its procurement for the purposes of airport services under the Public Procurement in Water Management, Energy, Transport and Postal Services Area Act, the risk of conducting the procedures to award public contracts (major public contracts that require publication on the national public procurement portal or even in the Supplement to the Official Journal of the European Union) in an untimely, incorrect or irregular manner has been defined as a key risk, in connection with legal and legislative risks. Special measures are required to mitigate these risks, and are implemented consistently at the company. Assessment of the Management Board: For procurement risk it is assessed that the consistent implementation of risk management measures is reducing the likelihood of the risk being realised and major damage being incurred. Operational risk Operational risks are broken down as follows with regard to current processes: airside, rescue and fire-fighting, maintenance, passenger ground handling, aircraft ground handling, cargo ground handling. Because the aforementioned processes are a vital part of the airport s everyday business, the existing internal controls are significantly mitigating the identified risks from the point of view of the likelihood of the risks being realised and the amount of damage incurred. To reduce the damage incurred in the actual realisation of certain risks, a business continuity plan was approved this year, setting out in detail the procedures implemented in the event of a disruption to business. The plan is explained in detail in point 6.6 of the Business Report. Assessment of the Management Board: For operational risk it is assessed that the consistent implementation of risk management measures is reducing the likelihood of the risk being realised and major damage being incurred. HR management risk In the changed business circumstances of 2012, when traffic declined, the following risks related to HR management were recognised as high: the ability to adjust the headcount to variable traffic, a lack of the requisite skills and knowledge on the part of employees, where national licences are required for the job: the result would be poor quality of service for our customers, optimal HR management, such as proper motivation, remuneration, the organisational climate, staff turnover, absence from work, 64

66 a deterioration in customer satisfaction. We have ensured that headcount can be adjusted to variable traffic by optimising the ratio of permanent staff to temporary staff, and by means of other forms of adjustment such as seasonal staff transfers with other companies. To ensure proper skills and knowledge we have our own Flight School, which has the requisite certification for training and for issuing work licences. Continual training is built into the work processes. We systematically monitor the needs and comments of customers, and conduct occasional customer surveys to measure the climate. Key activities in the proper motivation of our staff include: ensuring social security and job security for employees, paying monthly wages regularly, ensuring that the Management Board work with staff representatives, facilitating career development and funding education, using other forms of non-monetary motivation, such as public commendations. For more about HR, see point 3.5 of the Business Report. Assessment of the Management Board: There is significant HR management risk at the company, but carrying out appropriate activities to manage these risks and putting internal controls in place will make the likelihood of damage being incurred moderate. IT risk The major IT risks include: instability in the information system, a failure to achieve the requisite level of user satisfaction for IT solutions, a failure to provide an integrated system for assigning authorisations to access data, a failure to ensure data quality, data suitability and data availability. The aforementioned risks are managed by means of contractual arrangements with suppliers and maintainers of software solutions, who in addition to applications tailored specifically for airport services also provide a 24-hour on-call service in case of faults or breakdowns in technology. Staff are required to be familiar with the business continuity plan. We emphasise training and education for our staff who provide systems solutions at company level, attend to the security of data and assets, and coordinate work with the owners of software-supported processes. Data protection is also of key significance to the company, and is ensured at three levels: duplication of data storage at the primary location, data storage at the backup location, data storage at a third location, to which periodic backups are made on special media. Assessment of the Management Board: IT risks are classed as medium, thanks to the risk management mechanisms put in place; the measures also ensure that the likelihood of damage being incurred is moderate. 65

67 Legal and legislative risks Legal risks are mitigated by means of active defence before the courts and by evidence provided in lawsuits, while those responsible for making business decisions at the company consult internal and external legal advisors in so doing. Legislative risks relate to changes in European and Slovenian legislation and to the interpretation of this legislation. The company manages these risks by constantly monitoring and consistently applying all regulations affecting the company s operations, even when its business processes need to be adjusted to the requirements of newly amended regulations. Assessment of the Management Board: Exposure to legal and legislative risks is being managed by the measures put in place, for which reason the risk exposure is assessed as moderate. Asset risk Asset risk relates to the management of asset risks, general liability risks and airport liability risks. The aforementioned risks are systematically transferred to insurers, thereby mitigating exposure to the risk of damage being incurred. Assessment of the Management Board: Exposure to asset risk is managed via insurance policies at insurers, and the likelihood of damage being incurred because of asset risk is therefore assessed as moderate. Outsourcing risk Outsourcing risk is managed via contracts that ensure that the activities proceed without disruption and with the requisite quality. The relevant staff at the company supervise the work of external contractors, and are responsible for taking action in the event of any discrepancies. Assessment of the Management Board: Outsourcing risk is managed by means of contractual arrangements and supervision, and the likelihood of damage being incurred because of such risks is therefore assessed as low. Project risk Project risk relates to all phases of a project: approval, planning, implementation and completion. The internal controls put in place aim to manage the risk to minimise it. Assessment of the Management Board: Project risk is assessed as being adequately managed by the internal controls, for which reason the likelihood of damage being incurred from such risk is low. 5.3 FINANCIAL RISKS The major financial risks that the company deals with include: credit risk, liquidity risk, and market risk (risk of a change in the market prices of securities). Credit risk is managed by monitoring business partners, by obtaining credit assessments and information from the environment, by coordinating open items, and by consistently charging default interest, issuing reminders and pursuing recovery. 66

68 Liquidity risk is managed by constantly planning cash flows, matching the maturities of receivables and liabilities, and settling liabilities by the agreed deadlines, by pursuing a well-considered investment policy and by creating liquidity reserves in the form of deposits. Market risk is managed by monitoring the market value of investments, by investing in line with the company s investment policy (diversity, security, return), by monitoring information from the environment, and by pursuing a conservative investment strategy in respect of assets under management. Assessment of the Management Board: The financial risks are assessed as being adequately managed by the internal controls put in place, for which reason the likelihood of the risk being realised and damage being incurred from such risk is medium. Financial risks are disclosed in quantitative terms in point 5.4 of the Financial Report. 5.4 SAFETY AND SECURITY RISKS Safety risk The following safety risks are assessed as high: an aviation accident at the airport or in the immediate vicinity, danger from birdstrikes (and from other wild animals). The risk of an aviation accident at the airport or in the immediate vicinity is managed by means of the aviation accident protection and rescue plan, property insurance, and the business continuity plan. The guidelines from an environmental study (how to control rodents and reduce bird presence) are additionally used to manage the risk of birdstrike (and from wild animals). We work proactively to reduce the chance of complications from a birdstrike or a wild animal strike. Assessment of the Management Board: Safety risks are assessed as being adequately managed; were such risks to be realised the damage incurred by the company would be significant. Security risk The following security risks are assessed as high: the risk of a bomb explosion, war risk, the threat of terrorism (from the air, the ground or the underground). We try to manage the aforementioned risks as well as possible, through plans, reminders, staff training and awarenessraising, and the business continuity plan, to prevent the risks from being realised and major damage being incurred. Assessment of the Management Board: Security risks are assessed as being adequately managed; were such risks to be realised the damage incurred by the company would be significant. 67

69 5.5 ENVIRONMENTAL RISKS The following risks are assessed as high: the risk of excessive noise from air traffic, and increase in traffic or a change in the aircraft fleet, the risk of contamination of groundwater with wastewater, the risk of contamination of groundwater (or fire) as a result of the leakage of dangerous substances and fluids, energy efficient and renewables (missed opportunity). Environmental risks are managed on the basis of the environmental management rulebook, the waste management plan, training for staff and all personnel handling dangerous substances and fluids, constant monitoring of noise, internal assessments and monitoring of legislation, above all with the aim of preventing risks from being realised. Assessment of the Management Board: Environmental risks are assessed as being adequately managed; were such risks to be realised the damage incurred by the company would be moderate. 5.6 GENERAL RISKS General risks include the risk of a loss of reputation in the media, internally, among financial investors, in the local community and among the general public. Because we are aware of the importance of the company s good reputation, and of the damaging consequences that would ensue from a loss of that reputation among the public, this risk is classed as a strategic risk. The following risks are assessed as key and high: negative publicity (media image), insufficient and opaque reporting, a failure to uphold legislation and stock exchange rules in reporting, a bad organisational climate and bad relations inside the company, a loss of allegiance to and confidence in the employer. In order to manage these risks we adopted a corporate communication strategy in 2007 that set out in detail the methods of communications, the key audiences and target groups, the flow of information at the company and employees responsibilities with regard to information and data. The response of all target groups for communication is consistently monitored, primarily on a proactive basis. Assessment of the Management Board: General risks are assessed as being adequately managed; were such risks to be realised the damage incurred by the company would be low. 68

70 6 SUSTAINABLE DEVELOPMENT The company s operations and development are planned and executed in a way that supports the development of its immediate and wider environment and does not result in damaging effects. Prudent and planned attention is given to nature and the wider environment. We direct our skills, time and financial resources into the local environment, and into the industry at a national level. We endeavour to maintain a considerate attitude to our staff, to protect the immediate environment from noise and pollution, and to manage energy resources carefully. We feel a sense of responsibility for cultivating a social and cultural environment, for which reason we support social activities, arts and culture, sport, health awareness, knowledge and education. 6.1 RESPONSIBILITY TO EMPLOYEES Award of basic Family-Friendly Company certification At the company we are aware that the satisfaction and loyalty of our employees is of vital importance to our successful growth and development. For this reason we participated in the procedure for certification as a Family-Friendly Company, which is co-financed by the European Social Fund, and in December 2012 we were awarded the basic certification. Over the next three years we intend to introduce and implement measures to make it easier for employees to balance their professional and private lives. A group of ten employees from various departments are involved in this process. The following 12 measures have been envisaged, and will be implemented under the project plan: reduced work hours for family obligations and work hours matched to phase of life: employees with family and other private commitments have the opportunity to work reduced hours during specific periods, above and beyond their legal entitlements, children s time bonus (starting kindergarten and school): in the week when their child is starting kindergarten or school, employees may agree flexible work hours with their head of department, open doors day: an open doors day is organised for employees families, to invite them into the world of the airport, newborn gift: employees are given gifts to mark the birth of a baby, holidays for schoolchildren: the company promotes and organises activity holidays for employees schoolage children (camps, daycare, etc.), life balance team for coordinating professional and family life: members of the Family-Friendly Company project group collate, discuss and introduce new, improved working methods to balance professional and family life, employee surveys of work/family balance: periodic employee surveys are used to generate new ideas to improve measures to balance professional and private commitments, managerial training in work/family balance: managers are trained to be aware of the importance of a positive attitude to balancing work and private life, while employees are made aware of the measures taken by the Family-Friendly Company project group, individual career development plans: employees are invited to join the team of staff with good prospects to create a team of potential leaders, deputies and future experts, and to establish systematic training and to 69

71 gradually introduce a knowledge academy, where in-house experts will pass on their knowledge to younger generations, communication with employees: briefings for employees about the measures being discussed and approved by the Family-Friendly Company project group, communication with outsiders: the company will present certain activities to balance professional and private life to external stakeholders, work under special plans (shift work): in planning its work under special plans the company takes account of the needs of employees with families and other private commitments, and tries to allow employees in departments related to aviation that do not have a fixed timetable to work in a manner resembling shift work as closely as possible. Social responsibility to employees The following benefits allow us to express our sense of social duty to employees: the company covers half of employees premium for accident insurance, which covers accidents at work and outside the workplace. It also covers the cost of employees voluntary pension insurance in the amount of 4% of gross wages (maximum premium of 5.84%). we recognise additional days of leave for mothers for each child, for fathers at the birth of a child, for single parents, for staff aged 50 or over, in the event of a death in the family, and for participation in rescues, firefighting or mountain rescue services, we regularly grant solidarity aid in the event of longer absences for illness, the death of an employee or the death of a supported family member. We understand the social pressures that employees face, which is why we give cash aid during natural disasters and accidents, and grant additional leave to employees who were involved in such events or aided others, in addition to the aforementioned additional day of leave above the legal entitlement, we allow all mothers to take reduced work hours in accordance with the Parental Care and Family Benefit Act even after the expiry of the period stipulated by law. Workplace safety In line with new occupational health and safety legislation, which stresses the promotion of health at work, we sent one staff member for training, and he obtained the title of health promotion advisor. One of the company s primary tasks in the future will be to draw up an occupational health promotion policy and programme. At Aerodrom Ljubljana we ensure that all the machinery and equipment that we use at work is regularly inspected. A total of 112 machinery inspections were made in 2012, at which compliance was checked and the requisite certification was issued. September saw the annual inspections of the working environment to determine whether the working environment guarantees occupational health and safety for employees with regard to the anticipated level of danger. Despite all the efforts to ensure a safe working environment, which we aim to achieve by means of the requisite working equipment and protective equipment, and our insistence on the consistent application of work instructions, it is difficult to avoid occupational accidents completely. There were 11 accidents in 2012, mostly causing minor injuries. Each accident was reported to the relevant inspectorate in line with the law. 70

72 We encourage dialogue and socialising among colleagues The intranet site, where general information about the company, current news and projects and various work aids and entertainment are brought together, serves as the focal point of communications with employees, who can put forward their own suggestions, questions and comments via the portal. If they so desire, this can be done anonymously, and at the company we always try to find an answer to their questions, and to publish them if they so desire. We regularly organise introductory seminars for all new employees, and emphasise the importance of regular meetings to exchange information between divisions and departments, both operational and specialised. Bulletin boards are also a means of communication, and are particularly useful in operational departments where not everyone has access to a computer. Employees have the opportunity to meet and speak with the president and the other member of the Management Board in open hours, while a special meeting was organised between the Management Board and colleagues at which various themes were discussed. A New Year s party was held for the staff, their families and retired colleagues, while a sports day was also organised in conjunction with the works council. A workshop was organised for managers, at which they were able to talk about the challenges in our organisational units in a more relaxed and informal environment. Several other meetings and social events were held in individual divisions and departments. 6.2 RESPONSIBILITY TO AIRPORT USERS AND THE GENERAL PUBLIC Better services through passenger and partner feedback Aerodrom Ljubljana, d.d. s mission is to ensure that all the airport s users are provided with flight services and other commercial services that are safe, punctual and of high quality, for which reason customer satisfaction is one of the company s most important objectives. Only by monitoring the needs and wishes of the users of our services can we determine our own strengths and weaknesses and improve performance and customer satisfaction, as the best indicator of their satisfaction is the revenue generated. Through surveys and complaints the company strives to understand users current and future needs, while it aims not only to meet their requirements, but to exceed their expectations. In 2012 we handled 113 complaints and 13 instances of positive feedback in line with our official user satisfaction regulations, which set out the procedures for handling feedback from passengers, visitors to the airport, airlines and other partners. The number of complaints was down 32% on the previous year, thanks to good corrective measures and the systematic internal monitoring of ground operations. All the complaints and instances of positive feedback were handled with due seriousness and officially recorded, the deficiencies and irregularities were rectified by means of corrective measures, and a response was sent to all complainants. The handling of complaints and positive feedback contributes over the long term to a constant improvement in our quality of service. We received 13 instances of positive feedback from passengers, airlines and other partners in They primarily related to the friendliness and helpfulness of check-in staff; further evidence of this came from a passenger satisfaction survey of European airports conducted by Finnair, which placed Ljubljana in first position. In terms of staff friendliness and efficiency, passengers at 31 different European airports rated check-in staff at Ljubljana as the best. Our boarding staff were ranked eighth according to the same criteria. Our retail and catering services were rated slightly less well. Sadly, we cannot be compared to larger airports in terms of these services. 71

73 Our doors are open to visitors We aim to make the airport more accessible to people not travelling by plane and to those who simply want to get know the airport behind the scenes. In our desire to educate visitors and to build closer relations with them, we conducted 117 tours of the airport in 2012, one more than in the previous year. The majority of the tours were guided by employees of the company, although some were conducted by staff of other companies at the airport. We organised different tour programmes, aimed at different age groups and interest levels among the visitors. The largest number (76) comprised tours designed for groups of pre-school and school-age children, whom we try to show the workings of the airport in short tours. Some 14 longer tours with a broader explanation and more-detailed presentation of the airport were organised for secondary schools and universities. We hosted 24 volunteer fire services who toured our fire protection department. We also organised tours of the airport for retired employees, and two tours for various societies. 6.3 RESPONSIBILITY TO THE SOCIAL ENVIRONMENT We pursue a set sponsorship and donations policy We maintained our funding of sponsorship and donations at the level of the previous year, and remained faithful to those who have been recipients of our sponsorship and donations for several years. No new organisations were included in the sponsorship programme, but we did maintain the basic guidelines. Aerodrom Ljubljana s sponsorship and donation activities are built on three pillars: sport, art and culture, and humanitarian activities. We strive to link the activity of the projects and individuals it supports with our own business activities and the local environment in which we operate, while searching for communication effects therein. We continued to sponsor the Slovenian Nordic skiing team and the Slovenian Olympic team, and were also involved in the unique achievement of Matevž Lenarčič, who circumnavigated the globe in an ultralight. Lesser amounts were earmarked to support certain other sporting events, local sporting associations and talented individuals. We primarily expressed our commitment to art and culture through projects exhibited in the passenger terminal, whose images and ideas provided both pleasure and food for thought for our passengers. We are one of the sponsors of the main summer event in the capital, the Ljubljana Festival. We made donations to humanitarian, cultural and healthcare institutions, and to schools and associations in neighbouring communities. We again worked with Davorin Jenko Primary School in Cerklje na Gorenjskem to make our Christmas and new year cards, and held an art competition with a theme of aircraft and aviation. 6.4 RESPONSIBILITY TO THE NATURAL ENVIRONMENT By pursuing our environmental policy and our officially adopted environmental management rules we make a contribution to the sustainable development of the local region and society as a whole; in so doing we uphold the basic commitments and fundamental principles of environmentally responsible behaviour, and undertake to use natural resources responsibly and to protect the environment for the benefit and good of present and future generations. In accordance with the basic commitments, the fundamental principles and the requirements of laws and regulations, we have drawn up strategic environmental targets, which are now part of the company s sustainability strategy. The main strategic targets in the key environmental areas in the period to 2020 are: an environmental management system, the establishment of a documented environmental management system (ISO 14001, ISO and PAS 2060), 72

74 noise protection, the management of noise at a level in keeping with quality of life for local residents, the changeover to a low-carbon society, carbon neutrality (joining the Airport Carbon Accreditation scheme), waste management, full separation of recyclable materials from waste, wastewater management, connection of the sewage system to the public network (Domžale treatment plant), energy efficiency, reducing the use of energy products that harm the environment (heating oil, petrol, diesel, electricity) and replacing them with more environmentally acceptable forms of energy (natural gas, LPG, renewable sources), renewables, an increase in the relative use of renewable energy: hydro, geothermal, solar, wind, biomass, biogas. Environmental management system At the company we aim to constantly reduce the harmful impact of our business activities on the environment. This is why we have introduced and maintained an environmental management system that includes the main environmental aspects and impacts, and allows for appropriate environmental targets and programmes to be formulated. The environmental management system, which is set out by the company s official environmental management rules, encompasses the requirements of the ISO standard, including the most important, namely the principle of continual improvement in the environmental effect. Here it is emphasised that each and every employee at the company is responsible for protecting and preserving the environment. Our business partners have also been informed of the policy, and encourage the principles of good environmental practice. Green Office project In 2012 the company joined the Green Office project underway in five European countries. The aim of the project is to introduce principles and to draw up an action plan of key targets and measures to encourage the efficient use of energy and resources, thereby reducing the impact on the environment (e.g. using recycled paper, reducing water and electricity consumption). The aforementioned action will also allow us to obtain the requisite information for calculating the company s carbon footprint, which will form the basis for certification under the Airport Carbon Accreditation scheme and the ACI Europe initiative to reduce greenhouse gases in aviation. Noise protection Our systematic approach to monitoring and measurement of noise was put in place in December 2008, with continual noise measurements in the immediate vicinity of the airport. We have thus joined a number of European airports in applying similar forms of noise control. 73

75 Measurements, in line with EU directives and binding international regulations, were carried out at four of the most exposed points (settlements) below the flights paths. The results obtained in this manner indicate that air traffic noise, as an average monthly indicator, fluctuated below the prescribed environmental noise pollution limits, although two of the measurement points saw occasional transgressions, particularly in the evening. The nocturnal noise indicators were not transgressed, as a result of an agreement with the local authorities to restrict night flights over residential areas. The system is also linked to radar data provided by the Slovenian air traffic control company, which helps the company identify major noise polluters. An environmental permit for noise emissions caused by the operation of Ljubljana Jože Pučnik Airport was received on 11 November 2010, and is valid for five years. We also aim to inform the local residents as much as possible about noise measurements. In addition to publishing quarterly reports we have an interactive application on our website through which average indicators of the noise produced by aircraft flying over residential areas during takeoff and landing can be monitored. We should nevertheless emphasise that the current situation allows for the identification of breaches, but that further measures (restrictions on flights, fines) will be possible after the relevant national legislation is passed. In conjunction with the local authority of Šenčur we are planning to erect natural anti-noise barriers to further reduce the noise load on local residents. An assessment of the noise load on the environment under observation that is the result of the operation of Ljubljana Jože Pučnik Airport is collated in the graphs and map below (source: ZVD d.d.). Average day-evening-night noise indicators at measurement sites 60 Noise indicator Lden for Noise level in db(a) January February March April May June July August September October November December Šenčur Beleharjeva cesta Lokarje Lahovče Šenčur Rožna ulica Lden - noise limits 74

76 Average night noise indicators at measurement sites 60 Noise indicator Lnight for Noise level in db(a) January February March April May June July August September October November December Šenčur Beleharjeva cesta Lokarje Lahovče Šenčur Rožna ulica Lnight - noise limits Noise map: night and whole-day noise indicator for 24 hours 75