Slovenska energetska družba, d.d. (Slovenian Energy Company) Dunajska 50, Ljubljana, Slovenia 2005 ANNUAL REPORT (SUMMARY)

Transcription

1 Slovenska energetska družba, d.d. (Slovenian Energy Company) Dunajska 50, Ljubljana, Slovenia 2005 ANNUAL REPORT (SUMMARY) Ljubljana, 31 March

2 CONTENTS INTRODUCTORY EXPLANATIONS... 3 KEY EVENTS AND THEIR IMPACT ON OPERATIONS... 4 SIGNIFICANT BUSINESS EVENTS AND ACHIEVEMENTS OF THE PETROL GROUP IN KEY INFLUENCES ON THE OPERATIONS OF THE PETROL GROUP IN IMPORTANT EVENTS AFTER THE END OF THE 2005 FINANCIAL YEAR...6 KEY FIGURES, RESULTS AND FORECASTS... 8 PERFORMANCE INDICATORS FOR THE PETROL GROUP...8 KEY RESULTS...12 PLANS FOR COMPANIES IN THE PETROL GROUP AS AT 31 DECEMBER CORPORATE GOVERNANCE CODE AUDITORS REPORT ON THE SUMMARISED CONSOLIDATED FINANCIAL STATEMENTS TO THE OWNERS OF PETROL D.D., SLOVENSKA ENERGETSKA DRUŽBA, D.D., LJUBLJANA IN ACCORDANCE WITH SAS CONSOLIDATED FINANCIAL STATEMENTS OF PETROL GROUP (SLOVENIAN ACCOUNTING STANDARDS) AUDITORS REPORT ON THE SUMMARISED FINANCIAL STATEMENTS TO THE OWNERS OF PETROL D.D., SLOVENSKA ENERGETSKA DRUŽBA, D.D., LJUBLJANA IN ACCORDANCE WITH SAS UNCONSOLIDATED FINANCIAL STATEMENTS OF PETROL D.D. (SLOVENIAN ACCOUNTING STANDARDS) SHARE INFORMATION CHANGES IN OWNERSHIP STRUCTURE...28 MAJOR SHAREHOLDERS...28 DIVIDEND POLICY...28 TREASURY SHARES...29 AUTHORISED CAPITAL AND CONDITIONAL INCREASE IN SHARE CAPITAL...29 SHARES HELD BY MEMBERS OF MANAGEMENT BOARD AND SUPERVISORY BOARD AS AT 31 DECEMBER MANAGEMENT BOARD SUPERVISORY BOARD GROSS REMUNERATIONS OF MEMBERS OF MANAGEMENT BOARD AND SUPERVISORY BOARD, AND OF EMPLOYEES ON INDIVIDUAL CONTRACTS AUDITORS REPORT ON THE SUMMARISED FINANCIAL STATEMENTS TO THE OWNERS OF PETROL D.D., SLOVENSKA ENERGETSKA DRUŽBA, D.D., LJUBLJANA IN ACCORDANCE WITH IFRS CONSOLIDATED FINANCIAL STATEMENTS OF PETROL GROUP (IFRS) UNCONSOLIDATED FINANCIAL STATEMENTS OF PETROL D.D. (IFRS) NOTES ON CHANGES BETWEEN UNAUDITED AND AUDITED FINANCIAL STATEMENTS IN ACCORDANCE WITH IFRS NOTES ON TRANSITION TO IFRS

3 INTRODUCTORY EXPLANATIONS The audited consolidated and unconsolidated financial statements of the Petrol Group and Petrol d.d. of Dunajska 50, Ljubljana, have been published in accordance with the Securities Market Act and Article 34 of the Rules of the Ljubljana Stock Exchange. The financial statements of the Petrol Group and Petrol d.d., Ljubljana have been compiled in accordance with the Slovenian Accounting Standards (SAS) and the Companies Act. Subsidiaries are included in the consolidated financial statements, in line with the SAS, on the basis of the full consolidation method, while joint ventures and associates are only included in accordance with the single-line equity method. In the individual financial statements, in line with the SAS, the valuation of investments in subsidiaries, joint ventures and associates is carried out using the equity capital method, while investments in other companies are valued using the historical cost method. Financial statements for the Petrol Group and for Petrol d.d. have also been compiled in accordance with the Companies Act and the International Financial Reporting Standards (IFRS). Subsidiaries are included in the consolidated financial statements, in line with the IFRS, on the basis of the full consolidation method, while joint ventures and associates are included in accordance with the equity capital method. In the individual financial statements, in line with the IFRS, the valuation of investments in subsidiaries, joint ventures and associates is carried out using the historical cost method. The consolidated and unconsolidated financial statements for 2005 in line with the Slovenian Accounting Standards and the IFRS were audited by Deloitte & Touche revizija d.o.o. Ljubljana. Petrol d.d. received the auditors report for all the audited financial statements on 10 March 2006, the report expressing an unqualified opinion that the financial statements and the notes present a true and fair view of the financial position, the results of its operations, the cash flows and the changes in the equity of the Petrol Group and Petrol d.d. for the year ending 31 December The supervisory board deliberated the 2005 annual report at its session held on 31 March The entire annual report is available for viewing at the Petrol d.d. s registered office at Dunajska 50, 1527 Ljubljana, Slovenia, every working day between 8 am and 4 pm. Petrol d.d. has not yet submitted the 2005 annual report to the AJPES, the public records agency. The figures submitted to the AJPES will be identical to the figures in the company s annual report. The Petrol d.d. prospectus is published on the company s website. In line with Article 63 of the Securities Market Act, all changes to the prospectus are published each year in announcements available on the company s website and the website of Ljubljana Stock Exchange (Seonet). 3

4 KEY EVENTS AND THEIR IMPACT ON OPERATIONS SIGNIFICANT BUSINESS EVENTS AND ACHIEVEMENTS OF THE PETROL GROUP IN 2005 New supervisory board for Petrol d.d. At the 11 th general meeting on 4 April 2005, six shareholder representatives were appointed to the supervisory board of Petrol d.d. for a four-year term: Matjaž Gantar, Igor Irgolič, Dr Mićo Mrkaić, Milan Podpečan, Viktor Baraga and Dr Jože Zagožen. At its session of 9 February 2005, the works council appointed Samo Gerdin and Cvetka Žigart and reappointed Ciril Pirš to the supervisory board for a four-year term. Dr Zagožen was elected president and Mr Podpečan deputy-president at the supervisory board s constitutive session on 11 April Dr Mrkaić resigned from the supervisory board on 20 July 2005, and Mr Irgolič on 1 December New management board for Petrol d.d. On 1 December 2005, a new management board was appointed. Marko Kryžanowski was appointed president of the management board, along with Igor Irgolič as deputy-president, Boštjan Napast, Alenka Vrhovnik Težak, and Bojan Herman as the employee representative. In keeping with the division of the tasks for which the president and the individual members of the management board are responsible, there were some changes made in the organisational structure to reflect the board members business functions. Network of 348 service stations At the end of 2005 the Petrol Group had 348 service stations, of which 298 were in Slovenia, 31 in Bosnia- Herzegovina and 18 in Croatia, with the first Petrol service station in Serbia now also operational. CHP plant goes on-line A state-of-the-art CHP plant at Terme Zreče has gone on-line. This project, financed 50:50 by Petrol d.d. and Unior d.d., is a model not merely for its energy efficiency, but also because of the third-party financing method used. Sale of 75% interest in Petrol Gostinstvo d.o.o. Petrol d.d. signed a contract with Marché International Ltd for the sale of a 75% participating interest in subsidiary Petrol Gostinstvo d.o.o. Petrol d.d. retains a 25% interest in the new company, Marché Gostinstvo d.o.o., while Marché International Ltd has taken over the operational management of the catering and hospitality facilities. The facilities remain under the sole ownership of Petrol d.d. 4

5 Karkasa d.o.o. commences operations Karkasa d.o.o., a 50:50 joint venture established in 2004 by Petrol d.d. and Sava Tires d.o.o., commenced operations in Its line of business is the refitting of tyres for freight vehicles. New quality certificates and environmental certificates awarded Petrol Trgovina Zagreb d.o.o. became the first subsidiary based abroad to obtain the ISO 9001:2000 quality certificate, while Petrol Plin d.o.o. was awarded the ISO 14001:1996 environmental management certificate. Contractor and project auditor chosen for clean-up of bitumen dump at Pesniški Dvor A public tender was held on the basis of the agreement to clean up the bitumen dump at Pesniški Dvor signed in 2004 by Petrol d.d. and the Ministry of the Environment and Spatial Planning, with Gorenje gospodinjski aparati d.d. being chosen as the contractor for the clean-up operation and Hidroinženiring d.o.o. as the project auditor. Contracts with the two companies were signed in December Slovenska Bistrica gas concession obtained Petrol Plin d.o.o. concluded a contract with the municipality of Slovenska Bistrica under which it will build a distribution network to supply Slovenska Bistrica and its environs with natural gas. The gas concession for Slovenska Bistrica is the 21 st obtained by the Petrol Group. 5

6 KEY INFLUENCES ON THE OPERATIONS OF THE PETROL GROUP IN 2005 Formation of prices of refined petroleum products Until 31 July 2005 the prices of petrol and middle distillates were set in accordance with the Decree on Price Setting for Refined Petroleum Products passed by the Slovenian government on 1 August Under this decree, the model margins were aligned with fixed sums to partially offset the effect of inflation. Between 1 August and 9 October 2005 the prices of refined petroleum products were set in accordance with a decree passed by the Slovenian government on 1 August under which the margin remained unchanged while the decree was in force. On 10 October 2005 the government passed a new Decree on Price Setting for Refined Petroleum Products. Under this decree the margin has remained unchanged, but the previous 14-day period for coordinating prices was extended to 28 days, with the five highest and five lowest daily prices in the last accounting period being excluded from the calculation. Prices of oil and refined petroleum products on the world market Prices of crude ranged from $38.24 to $67.35 per barrel, with an average purchase price of $54.55 per barrel, up 42% from the average price of crude in There were similar movements in the prices of 95-octane petrol, diesel and ELFO. Exchange rates The average dollar exchange rate was tolars to the dollar. The average middle euro exchange rate was tolars to the euro, while the dollar averaged $1.24 against the euro (Bank of Slovenia middle rate). IMPORTANT EVENTS AFTER THE END OF THE 2005 FINANCIAL YEAR General meeting of Petrol d.d. At Petrol d.d. s 14 th general meeting held on 14 March 2006, it was decided that the company s annual financial report and interim financial statements would be drawn up exclusively in accordance with the IFRS from 1 January Two new members, Bojan Šrot and Aleš Marinček, were appointed to the supervisory board, and the proposed amendments to the company s articles of association and its official business activities were approved. 6

7 Slovenske Konjice gas concession obtained Having won with its bid, in February 2006 Petrol Plin d.o.o. was awarded the concession for building gas distribution infrastructure and supplying the municipality of Slovenske Konjice with natural gas. This is the 22 nd gas concession obtained by the Petrol Group. Prices of refined petroleum products Oil prices are fluctuating around $60 per barrel, while the euro/dollar exchange rate is approximately $1.19 to the euro. Prices of petrol and middle distillates in Slovenia are set in accordance with the Decree on Price Setting for Refined Petroleum Products, which was passed by the government on 1 January 2006, and is in force until 8 July The decree is substantively identical to the previous decree. Pricing takes place over a 28-day period, with the five highest and five lowest daily exchange prices being excluded from the calculation of the average. The margin is also unchanged. 7

8 KEY FIGURES, RESULTS AND FORECASTS PERFORMANCE INDICATORS FOR THE PETROL GROUP All the financial figures for 2005 are in accordance with the Slovenian Accounting Standards net sales revenues (SIT thousands) total assets 420,262, ,423,083 (SIT thousands) equity capital 204,306, ,619,259 (SIT thousands) net return on equity 86,749,945 79,487,208 (%) long-term debt to equity ratio net profit (SIT thousands) ,113,706 6,946,310 net earnings per share (excluding treasury shares) 1 (SIT) ,339 3,136 book value of share 2 (SIT) ,596 38,165 1 Net earnings per share = net profit in the financial year / total number of shares, excluding treasury shares 2 Book value of a share = equity capital at the end of financial year / total number of shares 8

9 number of employees (including employees at franchised service stations) (as at 31 December) ,693 2,848 number of retail outlets (as at 31 December)

10 All the financial figures for 2005 are in accordance with the IFRS net sales revenues (SIT thousands) ,211, ,362,066 total assets (SIT thousands) ,288, ,297,024 equity capital (SIT thousands) ,207,958 79,680,703 net return on equity (%) long-term debt to equity ratio net profit (SIT thousands) ,397,784 4,900,485 net earnings per share (excluding treasury shares) 3 (SIT) ,537 2,906 book value of share 4 (SIT) ,655 34,710 number of employees (including employees at franchised service stations) (as at 31 December) ,693 2,848 3 Net earnings per share = net profit in the financial year / total number of shares, excluding treasury shares 4 Book value of a share = equity capital at the end of financial year / total number of shares 10

11 number of retail outlets (as at 31 December)

12 KEY RESULTS Sales of oil products The Petrol Group sold 2 million tonnes of oil and oil products in 2005, approximately the same as in 2004, which was in line with the forecast in the business plan. Gas sales LPG sales totalled 37 thousand tonnes, down 1% from 2004, and 2% less than the forecast. Sales of natural gas were 24 thousand tonnes, up 6% from the previous year, but 6% less than forecast. Sale and distribution of electricity and heat The Petrol Group sold 307,835 MWh of electricity, 5% in excess of the forecast in the plan and also 5% higher than sales in Sales of heat totalled 56,197 MWh, down 3% from the previous year, but 1% more than the forecast. Sales of non-oil merchandise The Petrol Group recorded sales of non-oil merchandise of SIT 45 billion (SIT 45 billion in accordance with the IFRS), up 11% from 2004 and 6% more than the forecast. Net sales revenues The Petrol Group recorded net sales revenues of SIT 420 billion (SIT 420 billion in accordance with the IFRS), up 19% from Gross return on sales The Petrol Group recorded a gross return on sales of SIT 47.7 billion (SIT 47.7 billion in accordance with the IFRS), up 9% from Pre-tax profit The Petrol Group s pre-tax profit totalled SIT 10 billion, up 23% from 2004 (SIT 10 billion in accordance with the IFRS, up 72% from 2004). Net profit The net profit of the Petrol Group, which includes capital gains of SIT 2 billion from the sale of interests in Nacionalna finančna družba d.d. and Petrol Gostinstvo d.o.o., totalled SIT 8.1 billion, up 17% from 2004 (SIT 8.4 billion in accordance with the IFRS, up 71% from 2004). 12

13 Total assets (balance sheet sum) The Petrol Group had total assets of SIT billion at the end of the year, up 12% from the end of 2004 (SIT billion in accordance with the IFRS, up 11% from the end of 2004). Current assets The Petrol Group s current assets totalled SIT 79.6 billion at the end of the year, up 27% from the end of 2004, primarily owing to a price-based increase in the value of inventories (current assets totalled SIT 79 billion at the end of 2005 in accordance with the IFRS, up 31% from the end of 2004). Equity capital The Petrol Group s equity capital totalled SIT 86.7 billion at the end of the year, up 9% from the end of 2004 (SIT 85.2 billion in accordance with the IFRS, up 7% from the end of 2004). Non-current liabilities The Petrol Group s non-current liabilities totalled SIT 31 billion at the end of the year, up 10% from the end of 2004 (SIT 38 billion in accordance with the IFRS, up 5% from the end of 2004). The increase in non-current liabilities results from intensive investment activity, and the financing of operating capital. Investments in non-current assets The Petrol Group s investments in non-current assets totalled SIT 12.6 billion, with 48% of the funds invested in 2005 being earmarked for core lines of business on the domestic market, and 24% for oil trading on the markets of south-eastern Europe. New lines of business attracted 23% of the group s investment in 2005, while the remaining 5% went mainly on upgrading information infrastructure and other infrastructure. 13

14 PLANS FOR 2006 Financial indicators The Petrol Group is forecasting net sales revenues of SIT 431 billion in 2006, a pre-tax profit of SIT 9.3 billion, a net profit of SIT 7 billion, and a return on equity of 8.1% on this basis. Sales of oil products The Petrol Group is forecasting total sales of 1.93 million tonnes of oil products in Gas The Petrol Group plans to be operating 21 natural gas concessions by the end of 2006, and to be supplying LPG users via 1,810 gas depots. Investments The Petrol Group is planning to invest SIT 13.9 billion in non-current assets in 2006, and forecasts a longterm debt ratio of 0.4 during the year. Workforce The Petrol Group is forecasting that its workforce will have grown to 2,788 people at the end of 2006, including those employed at franchised service stations. Retail network The Petrol Group anticipates ending 2006 with a total of 365 service stations in its retail distribution network, of which 308 will be inside Slovenia and 57 will be abroad. All the financial forecasts for 2006 are in accordance with the IFRS 14

15 COMPANIES IN THE PETROL GROUP AS AT 31 DECEMBER 2005 Subsidiaries Country of Interest (%) establishment Petrol Maloprodaja Slovenija d.o.o., Ljubljana Slovenia 100 Petrol Plin d.o.o., Ljubljana Slovenia 100 Petrol Skladiščenje d.o.o., Ljubljana Slovenia 100 Petrol Tehnologija d.o.o., Ljubljana Slovenia 100 Petrol Energetika d.o.o., Ravne na Koroškem Slovenia Cypet Oils Ltd, Limassol Cyprus 100 Petrol-Trade HmbH, Vienna Austria 100 incorporating Cypet- Trade Ltd Cyprus Petrol Trgovina d.o.o., Zagreb Croatia 100 Petrol BH Oil Company d.o.o., Sarajevo Bosnia-Herzegovina 100 Petrol d.o.o., Beograd Serbia-Montenegro Joint ventures Geoenergo d.o.o. Slovenia 50 Instalacija d.o.o.,koper Slovenia 49 Karkasa d.o.o. Slovenia Affiliated companies Marchè Gostinstvo d.o.o. Slovenia 25 Ogrevanje Piran d.o.o. Slovenia 40 Aquasystems d.o.o. Slovenia 26 Geoplin d.o.o Slovenia

16 CORPORATE GOVERNANCE CODE Petrol d.d. hereby declares that it complied with the Corporate Governance Code (Official Gazette of the Republic of Slovenia, No. 118/2005 of 17 December 2005) during the period between 1 January 2005 and 31 March The company has upheld the recommendations in the Corporate Governance Code, which has been in force since 14 December 2005, with the exception of the situations cited below. The company observes all its defined obligations, and its obligations as an issuer as set out by regulations issued by the relevant securities market regulators. Some of the code s recommendations are of no relevance to the company, but as it cannot breach them, there is no sense in specifically examining these. The company will discharge the obligations placed upon a company or its bodies in specific cases, should the cases arise. Some clarifications are given below in connection with the provisions of the code and the binding recommendations that the company has not yet fulfilled : Encouragement of exercise of shareholders rights via financial organisations and other organisations and by proxy (organised collection of proxies): The organised collection of proxies is being actively implemented to a limited degree for participants in the internal buyout and other employees at the company. Given the fractured nature of the ownership structure that resulted from privatisation, the wider collection of proxies would not be cost-effective, and financial and other organisations are thus encouraged to participate at the general meeting by the call to convene and the necessary working material being published on the company s website : Publication of general meeting resolutions: For all future general meetings, in addition to providing the results of voting on resolutions the management board will provide all the recommended information cited in the second to fourth indents of the second paragraph : Disclosure of remuneration, compensation and fringe benefits of members of management board: The remuneration, compensation and fringe benefits of the members of the management board are published in gross amounts, broken down as recommended : Availability of supervisory board s rules of procedure to all shareholders: The supervisory board s rules of procedure have not been published : Use of information technology for distributing supervisory board material and convening sessions: Owing to insufficient telecommunications security and the highly confidential nature of the information, it will not be possible to use information technology until all members are equipped with connections secure enough to prevent any unauthorised access to documents. 16

17 3.2.1.: Appointment and removal of management board: A new management board consisting of a president and three other members was appointed in 2005, two of whom previously held senior managerial positions at the company, thus ensuring continuity in the running of the company and : Liability insurance for members of supervisory board: The company has not taken out any liability insurance for the members of the supervisory board : Performance of managerial, executive or advisory duties for competitors: The members of the supervisory board issue a statement making the supervisory board and other stakeholders aware of any conflicts of interest to : Conflict of interest between company and members of supervisory board: The recommendations in the code will be incorporated into the supervisory board s new rules of procedure, and any conflicts of interest will be disclosed in the company s annual report for 2006 at the latest : Publication of announcements in English: In the future the company will also publish announcements in English on its website : Internal rules restricting trading: The company does not have an internal bylaw setting out any restrictions of trading in addition to those prescribed by law or regulations, but persons who are privy to inside information sign a special confidentiality agreement. 7.5.: Company website: New pages to provide all the recommended information are under construction. The company will continue to uphold the recommendations of the code in the future. If it seems that the company will be unable to uphold any of the obligations under the code, the management board and supervisory board will draw up a substantiated explanation. This notice is also permanently published on the official website at Ljubljana, 31 March 2006 president of the management board Marko Kryžanowski president of the supervisory board: Dr Jože Zagožen 17

18 AUDITORS REPORT ON THE SUMMARISED CONSOLIDATED FINANCIAL STATEMENTS TO THE OWNERS OF PETROL D.D., SLOVENSKA ENERGETSKA DRUŽBA, D.D., LJUBLJANA IN ACCORDANCE WITH SAS 18

19 CONSOLIDATED FINANCIAL STATEMENTS OF PETROL GROUP (SLOVENIAN ACCOUNTING STANDARDS) CONSOLIDATED BALANCE SHEET - PETROL GROUP ASSETS Index SIT /04 NON-CURRENT ASSETS Intangible assets 2,112,848 2,121, Fixed assets 102,062,406 98,072, Non-current investments 19,780,511 19,494, Total non-current investments 123,955, ,689, CURRENT ASSETS Inventories 28,086,463 17,186, Non-current trade receivables ** 552, , Current trade receivables 45,788,894 38,610, Current investments 2,972,315 4,057, Cash and cash equivalents 2,311,835 2,151, Total current assets 79,712,499 62,606, Deferred costs and accrued revenues 638, , TOTAL ASSETS 204,306, ,619, EQUITY AND LIABILITIES Index SIT /04 EQUITY Share capital 12,517,806 12,517, Capital reserves 102,032 96, Other reserves from profits * 44,140,335 39,602, Accumulated profits 3,521,207 2,757, Undistributed current income * 4,674,756 3,715, Capital inflationary adjustments 19,190,518 19,190, Special capital inflationary adjustments 2,728,883 1,725, Specific adjustments to capital (125,592) (119,334) 105 Total equity not including minority interests 86,749,945 79,487, Minority interests 27,451 25, Total equity 86,777,396 79,512, PROVISIONS Provisions of donation 19,568 19, Other provisions 5,976,003 7,106, Total provisions 5,995,571 7,125, NON-CURRENT LIABILITIES Non-current finance payables 30,566,245 27,633, Non-current trade payables 419, , Total non-current liabilities 30,985,515 28,068, CURRENT LIABILITIES Current finance payables 26,252,201 18,635, Current trade payables 50,842,814 45,779, Total current liabilities 77,095,015 64,414, Accrued costs and deferred revenues 3,453,494 3,497, TOTAL EQUITY AND LIABILITIES 204,306, ,619, * In accordance with Paragraph 3 of Article 228 of the Companies Act - Appendix H, undistributed net profit has been reduced by SIT 3,438,950 thousand and transferred into the other profit reserves. ** In accordance with requirement 19 of Slovenian Accounting Standards (2001 and 2006), deferred income tax assets have been recognised in non-current trade receivables. 19

20 CONSOLIDATED INCOME STATEMENT - PETROL GROUP Index SIT /04 Net sales revenues 420,262, ,423, Cost of sales (372,532,581) (308,485,014) 121 Gross profit 47,729,585 43,938, Distribution costs (33,155,154) (32,900,957) 101 Administrative costs (9,580,566) (9,632,731) 99 Other operating income 2,476,879 5,518, Operating profit 7,470,744 6,923, Finance income from affiliated companies 822, , Other finance income from shareholding interests 522, , Finance income from non-current receivables 184, , Finance income from current receivables 8,440,454 6,025, Finance income 9,969,890 7,732, Impairment losses on investments (31,200) (549,749) 6 Interest and other expenses (7,405,807) (5,945,925) 125 Finance costs (7,437,007) (6,495,674) 114 Profit from ordinary activities 10,003,627 8,160, Profit before tax 10,003,627 8,160, (1,938,855) (1,247,548) 155 Income tax expenses 51,262 34, Net profit for the year 8,116,034 6,947, Net profit of the parent company 8,113,706 6,946, Net profit of minority shareholders 2, COSTS AND OTHER OPERATING EXPENSES - PETROL GROUP Index SIT /04 Materials 2,080,417 1,704, Services 21,529,515 19,696, Compensation 10,838,485 10,878, Amortisation and depreciation 6,832,297 6,450, Impairment of fixed assets 158, , Impairment charge on receivables 400, , Other costs 529,637 2,535, Other expenses 366, , Total operating expenses 42,735,720 42,533,

21 CONSOLIDATED CASH FLOWS STATEMENT - PETROL GROUP SIT /04 Cash from operating activities 415,016, ,498, Operating income 421,274, ,059, Change in trade receivables (5,943,929) (9,581,157) 62 Change in deferred costs and accrued revenues (314,647) 19,560 - Cash used in operating activities 415,689, ,458, Operating costs less amortisation, depreciation and provisions 408,021, ,906, Income taxes paid and other taxes 1,938,855 1,247, Change in inventories 10,899,837 4,686, Change in trade liabilities (5,114,404) (11,610,239) 44 Change in accrued costs and deferred revenues (56,506) 228,423 - Net cash from/(used in) operating activities (673,091) 10,039,444 - Cash from investing activities 5,655,171 6,170, Investment income (not including revaluation) 4,570,198 2,367, Net decrease in current investments (not including revaluation) 1,084,973 3,803, Cash used in investing activities 15,994,830 16,575, Net increase in intangible assets (not including revaluation) 214, , Net increase of fixed assets (not including revaluation and capital investments) 12,216,711 15,258, Net increase in non-current investments (not including revaluation) 3,563,633 1,087, Net cash from/(used in) investing activities (10,339,659) (10,404,953) 99 Cash from financing activities 20,204,890 8,252, Finance income (not including revaluation) 5,585,133 2,878, Increase in capital (not including net profits) 5,554 41, Net increase of non-current financial payables (not including revaluation) 2,955,431 3,670, Net increase of curent financial payables (not including revaluation) 11,658,772 1,662, Cash used in financing activities 9,032,078 7,528, Financial costs 7,085,026 5,600, Decrease in capital (not including losses) 0 161,010 - Net decrease in provisions (not including revaluation) 93, , Decrease in payables to shareholders (dividends and other participations) 1,853,996 1,503, Net cash from/(used in) financing activities* 11,172, ,228 1,543 Net increase/(decrease) in cash and cash equivalents 160, , Cash and cash equivalents at end of year 2,311,835 2,151, Net increase/(decrease) in cash and cash equivalents 160, , Cash and cash equivalents at beginning of year 2,151,773 1,793, * The trade liabilities from the purchase of refined petroleum products that Petrol d.d. declares vis-à-vis its subsidiaries abroad go to increase the net cash from operating activities in Petrol d.d. s cash flow statement. These liabilities are excluded from the consolidated cash flow statement, as they are generated within the group. The subsidiaries finance the purchase of refined petroleum products with credit acquired outside the Petrol Group, which goes to increase the net cash from financing activities in the consolidated cash flow statement. 21

22 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - PETROL GROUP SIT 000 Share capital Capital reserves Regulatory reserves Treasury share reserves Other profit reserves Retained earnings Undistributed net profit adjustment adjustment Translation equity adjustment Total equity Balance at December 31, ,517,806 54,991 14,772, ,774 20,182,286 2,015,555 2,976,726 19,190,518 85,830 (67,840) 72,295,114 Transfers into capital accounts Transfer of net profit for 2004 financial year ,946, ,946,310 Transfer of specific equity revaluation adjustments ,639, ,639,322 Elimination of adjustment to value of treasury shares , ,523 Transfer of paid-up capital surplus from transactions in treasury shares 0 41, ,487 Transfers within capital accounts General equity revaluation Specific equity revaluation Distribution of 2004 net profit to other capital accounts pursuant to management board and supervisory board resolution ,230,492 0 (3,230,492) Release of treasury share reserves and distribution to other capital accounts ,636 (21,636) Distribution of profit for appropriation for 2003 financial year to create other profit reserves pursuant to general meeting resolution in ,234,305 (2,234,305) Distribution of profit for appropriation for 2003 financial year to retained earnings pursuant to general meeting resolution in ,976,726 (2,976,726) Transfers from capital accounts Payment of dividends pursuant to general meeting resolution in (1,441,997) (1,441,997) Payment of 2003 profit-sharing bonuses to supervisory board pursuant to general meeting resolution in (61,057) (61,057) Losses on foreign exchange differences (51,494) (51,494) Balance at December 31, ,517,806 96,478 14,794, ,662 24,144,028 2,757,976 3,715,818 19,190,518 1,725,152 (119,334) 79,487,208 Transfers into capital accounts Transfer of net profit for 2005 financial year ,113, ,113,706 Transfer of specific equity revaluation adjustments ,837, ,837,085 Transfer of paid-up capital surplus from transactions in treasury shares 0 5, ,554 Transfers within capital accounts Distribution of 2005 net profit to other capital accounts pursuant to management board and supervisory board resolution ,438,950 0 (3,438,950) Release of treasury share reserves and distribution to other capital accounts 0 0 3,639 (3,639) Distribution of profit for appropriation for 2004 financial year to create other profit reserves pursuant to general meeting resolution in ,002,968 (3,002,968) Distribution of profit for appropriation for 2004 financial year to retained earnings pursuant to general meeting resolution in ,715,818 (3,715,818) Distribution of profit for appropriation for 2004 financial year to retained earnings for payment of profit-sharing bonuses to supervisory board pursuant to general meeting resolution in (50,381) 50, Transfers from capital accounts Payment of dividends pursuant to general meeting resolution in (1,853,996) (1,853,996) Transfer of specific equity revaluation adjustments (833,354) 0 (833,354) Losses on foreign exchange differences (6,258) (6,258) Balance at December 31, ,517, ,032 14,797, ,023 28,681,569 3,521,207 4,674,756 19,190,518 2,728,883 (125,592) 86,749,945 22

23 AUDITORS REPORT ON THE SUMMARISED FINANCIAL STATEMENTS TO THE OWNERS OF PETROL D.D., SLOVENSKA ENERGETSKA DRUŽBA, D.D., LJUBLJANA IN ACCORDANCE WITH SAS 23

24 UNCONSOLIDATED FINANCIAL STATEMENTS OF PETROL D.D. (SLOVENIAN ACCOUNTING STANDARDS) BALANCE SHEET - PETROL, d.d. ASSETS Index SIT /04 A) Non-current assets I. Intangible assets 1,068,804 1,108, II. Fixed assets 78,459,479 76,671, III. Non-current investments 50,092,039 46,675, Total non-current assets 129,620, ,455, B) CURRENT ASSETS I. Inventories 25,880,040 15,957, II. Trade receivables 43,397,931 36,068, a) Non-current trade receivables ** 464, , b) Current trade receivables 42,933,218 35,494, III. Current investments 2,883,347 3,733, IV. Cash and cash equivalents 1,310,459 1,037, Total current assets 73,471,777 56,797, C) Deferred expenses and accrued revenues 587, , TOTAL ASSETS 203,679, ,545, EQUITY AND LIABILITIES Index SIT /04 A) EQUITY I. Share capital 12,517,806 12,517, II. Capital reserves 102,032 96, III. Profit reserves* 44,140,335 39,602, IV. Retained earnings 3,059,317 2,781, V. Undistributed net profit for the year* 3,438,950 3,230, VI. Equity revaluation adjustments 23,523,756 21,394, Total Equity 86,782,196 79,623, B) PROVISIONS Provisions from donations received 18,840 19, Other provisions 5,812,338 6,972, Total Provisions 5,831,178 6,992, C) NON-CURRENT LIABILITIES a) Non-current financial liabilitiesand trade payables Non-current financial liabilities 29,654,805 26,379, Non-current trade payables 338, , Total non-current liabilities 29,992,995 26,730, b) Current financial liabilities and trade payables Current financial liabilities 14,984,975 17,056, Current trade payables 63,045,841 47,883, Total current liabilities 78,030,816 64,939, D) Accrued expenses and deferred revenues 3,042,144 3,259, TOTAL EQUITY AND LIABILITIES 203,679, ,545, * In accordance with Paragraph 3 of Article 228 of the Companies Act - Appendix H, undistributed net profit has been reduced by half and transferred into the other profit reserves. ** In accordance with requirement 19 of Slovenian Accounting Standards (2001 and 2006), deferred income tax assets have been recognised in non-current trade receivables. 24

25 INCOME STATEMENT - PETROL, d.d. SIT /04 Net sales revenues 384,540, ,772, Cost of sales (343,753,127) (282,160,446) 122 Gross profit 40,787,748 38,612, Distribution costs (29,907,465) (30,487,663) 98 Administrative expenses (7,089,580) (7,512,023) 94 Other operating income 2,071,845 5,217, Operating profit 5,862,548 5,829, Finance income from shareholding interests 1,354,646 2,132, Finance income from non-current financial receivables 274, , Finance income from current receivables 8,060,532 5,802, Finance income 9,689,255 8,151, Impairment losses on investments (31,787) (563,457) 6 Interest and other expenses (6,877,531) (5,819,161) 118 Finance costs (6,909,318) (6,382,618) 108 Profit from ordinary activities 8,642,485 7,599, Profit before tax 8,642,485 7,599, Corporate income tax (1,782,702) (1,138,066) 157 Deferred income tax 18, Net profit for the year 6,877,900 6,460, COSTS AND OTHER OPERATING EXPENSES - PETROL, d. d. Index SIT /04 Materials 1,647,147 1,462, Services 22,899,471 21,430, Compensation 5,915,537 6,175, Write-downs: 5,897,705 6,348, amortisation and depreciation 5,729,498 5,506, losses on disposals, impairment and writte-offs of inta 129, , writte-downs of current assets 38, ,927 7 Other costs 404,010 2,538, Other operating expenses 233,175 45, Total operating expenses 36,997,045 37,999, Index 25

26 CASH FLOW STATEMENT - PETROL, d.d. SIT /04 Cash from operating activities 379,209, ,887, Operating income 385,161, ,296, Change in trade receivables (5,658,476) (7,410,031) 76 Change in deferred expenses and accrued revenues (294,498) 1,157 - Index Cash used in operating activities 371,615, ,631, Operating expenses less amortisation, depreciation and provisions 375,010, ,389, Taxes paid 1,782,702 1,138, Change in inventories 9,922,562 4,292, Change in trade payables (15,213,721) (11,489,777) 132 Change in accrued expenses and deferred revenues 113, , Net cash from/(used in)operating activities 7,593,523 10,255, Cash from investing activities 6,033,875 4,930, Investment income (not including revaluation) 5,183,438 2,875, Net decrease in current investments (not including revaluation) 850,437 2,055, Cash used in investing activities 15,298,767 14,339, Net increase in intangible assets (not including revaluation) 131, , Net increase in fixed assets (not including revaluation and capital investments) 8,936,306 9,807, Net increase in non-current investments (not including revaluation) 6,231,172 4,425, Net cash from/(used in) investing activities (9,264,892) (9,408,571) 98 Cash from financing activities 10,471,899 6,931, Finance income (not including revaluation) 5,198,277 2,805, Increase in equity (not including net profit) 5,554 41, Net increase in non-current financial liabilities (not including revaluation) 3,297,824 4,084, Net increase in current financial liabilities (not including revaluation) 1,970, Cash used in financing activities 8,527,380 8,028, Finance expenses (not including revaluation) 6,550,492 5,425, Net decrease in provisions (not including revaluation) 122,892 79, Net decrease in current financial liabilities (not including revaluation) 0 1,019,631 - Decrease in liabilities to owners (dividends and other profit-sharing) 1,853,996 1,503, Net cash from / (used in) financing activities 1,944,519 (1,096,889) - Net cash flow during period 273,150 (249,605) - Closing balance of cash and cash equivalents 1,310,459 1,037, Net cash flow during period 273,150 (249,605) - Opening balance of cash and cash equivalents 1,037,309 1,286,

27 STATEMENT OF CHANGES IN EQUITY - PETROL, d.d. SIT 000 Share capital Capital reserves Regulatory reserves Treasury share reserves Other profit reserves Retained earnings Undistributed net profit General equity revaluation adjustment Specific equity revaluation adjustment Total equity Balance as at 31 December ,517,806 54,991 14,772, ,774 20,182,285 1,989,932 3,025,786 19,190,518 85,830 72,386,391 Transfers into capital accounts Transfer of net profit for 2004 financial year ,460, ,460,984 Transfer of specific equity revaluation adjustments ,118,192 2,118,192 Elimination of adjustment to value of treasury shares , ,523 Transfer of paid-up capital surplus from transactions in treasury shares 0 41, ,487 Transfers within capital accounts Distribution of 50% of 2004 net profit to other capital accounts pursuant to management board and supervisory board resolution ,230,492 0 (3,230,492) Release of treasury share reserves and distribution to other capital accounts ,636 (21,636) Distribution of profit for appropriation for 2003 financial year to create other profit reserves pursuant to general meeting resolution in ,234,305 (2,234,305) Distribution of profit for appropriation for 2003 financial year to retained earnings pursuant to general meeting resolution in ,025,786 (3,025,786) Transfers from capital accounts Payment of dividends pursuant to general meeting resolution in (1,441,997) (0) (1,441,997) Payment of 2003 profit-sharing bonuses to supervisory board pursuant to general meeting resolution in (61,057) (0) (61,057) Balance as at 31 December ,517,806 96,478 14,794, ,662 24,144,028 2,781,413 3,230,492 19,190,518 2,204,022 79,623,523 PROFIT FOR APPROPRIATION FOR ,910,717 2,781,413 3,230, ,922,622 Transfers into capital accounts Transfer of net profit for 2005 financial year ,877, ,877,900 Transfer of specific equity revaluation adjustments ,994,847 2,994,847 Transfer of paid-up capital surplus from transactions in treasury shares 0 5, ,554 Transfers within capital accounts Distribution of 50% of 2005 net profit to other capital accounts pursuant to management board and supervisory board resolution ,438,950 0 (3,438,950) Release of treasury share reserves and distribution to other capital accounts 0 0 3,639 (3,639) Distribution of profit for appropriation for 2004 financial year to create other profit reserves pursuant to general meeting resolution in ,002,968 (3,002,968) Distribution of profit for appropriation for 2004 financial year to retained earnings pursuant to general meeting resolution in ,230,492 (3,230,492) Distribution of profit for appropriation for 2004 financial year to retained earnings for payment of profit-sharing bonuses to supervisory board pursuant to general meeting resolution in (50,381) 50, Transfers from capital accounts Payment of dividends pursuant to general meeting resolution in (1,853,996) (1,853,996) Transfer of specific equity revaluation adjustments (865,631) (865,631) Balance as at 31 December ,517, ,032 14,797, ,023 28,681,569 3,059,317 3,438,950 19,190,518 4,333,238 86,782,196 PROFIT FOR APPROPRIATION FOR ,297,599 3,059,317 3,438, ,795,866 27

28 SHARE INFORMATION CHANGES IN OWNERSHIP STRUCTURE Table 1: Changes in shareholder structure for Petrol d.d. number of shares Slovenian Indemnity Corporation 408, ,456 Kapitalska družba Group 184, ,635 Banks 105, ,621 Insurers 58,855 59,799 Other institutional investors 506, ,026 Others 795, ,459 Fund of treasury shares 26,161 26,305 Total 2,086,301 2,086,301 MAJOR SHAREHOLDERS Table 2: Major shareholders in Petrol d.d. as at 31 December largest shareholders in Petrol d.d. as at 31 December 2005 name address number of shares interest 1 SLOVENIAN INDEMNITY CORPORATION MALA ULICA 5, 1000 LJUBLJANA 408, % 2 KAPITALSKA DRUŽBA D.D. DUNAJSKA CESTA 119, 1000 LJUBLJANA 170, % 3 NFD 1 DELNIŠKI INVESTICIJSKI SKLAD D.D. TRDINOVA 4, 1000 LJUBLJANA 95, % 4 KD GALILEO, VZAJEMNI SKLAD CELOVŠKA 206, 1000 LJUBLJANA 60, % 5 ISTRABENZ D.D. CESTA ZORE PERELLO-GODINA 2, 6000 KOPER 50, % 6 VS TRIGLAV STEBER I SLOVENSKA CESTA 54, 1000 LJUBLJANA 49, % 7 NOVA KBM D.D. ULICA VITA KRAIGHERJA 4, 2000 MARIBOR 42, % 8 KD ID, DELNIŠKA ID, D.D. CELOVŠKA CESTA 206, 1000 LJUBLJANA 37, % 9 KD RASTKO, DELNIŠKI VZAJEMNI SKLAD CELOVŠKA 206, 1000 LJUBLJANA 34, % 10 PETROL D.D. DUNAJSKA C. 50, 1527 LJUBLJANA 26, % DIVIDEND POLICY One of the cornerstones of Petrol s development strategy is the long-term maximisation of returns to shareholders. For this reason, Petrol s management advocates a stable dividend policy over the long-term. This is the most appropriate policy for the company s development needs, because it delivers predictable returns to shareholders, and long-term stability in Petrol s share price. History of dividend payouts period total dividends under general meeting resolution (SIT) gross dividend per share (SIT) ,460,410, ,260,

29 1997 1,564,725, ,251,780, ,520, ,043,150, ,251,780, ,460,410, ,460,410, ,877,670, In its strategy for the period from 2002 to 2005, Petrol envisaged paying a dividend of 600 tolars per share (calculated in 2002 prices). In 2005 it paid a gross dividend of 900 tolars per share under a general meeting resolution. TREASURY SHARES Petrol d.d. did not repurchase any treasury shares in At the end of the year it held 21,161 treasury shares, down 144 from the end of 2004, and equivalent to 1.25% of the registered share capital. The total book value of the treasury shares as at 31 December 2005 was SIT million, which was SIT 1,189,624 thousand less than the market value on the same day. The treasury shares were acquired between 1997 and 1999 on the basis of Article 240 of the Companies Act. Treasury shares are used each year to award bonuses to members of the management board and supervisory board on the basis of a general meeting resolution and in accordance with the articles of association. The reserves for treasury shares were created from legal reserves that exceeded the legal limit of 10% of equity capital on the basis of a resolution by the 1 st general meeting on 4 April AUTHORISED CAPITAL AND CONDITIONAL INCREASE IN SHARE CAPITAL For a period of three years following the entry of the third amendment to the articles of association of 27 May 2003 in the companies register on 25 July 2003, subject to approval by the supervisory board the management board may increase the share capital by 20% without a specific resolution from the general meeting, which at the time the third amendment was adopted represented a nominal sum of SIT 2,503,561,200 (the authorised capital). The purposes for which the authorised capital may be used will be determined by the management board subject to the approval of the supervisory board. 29

30 SHARES HELD BY MEMBERS OF MANAGEMENT BOARD AND SUPERVISORY BOARD AS AT 31 DECEMBER 2005 as at 31 Decmber 2005 name office number of shares interest Supervisory Board % inside members % Ciril Pirš member of supervisory board % Samo Gerdin member of supervisory board % Cvetka Žigart member of supervisory board % outside members % Jože Zagožen president of supervisory board % Milan Podpečan deputy-president of supervisory board % Viktor Baraga member of supervisory board % Matjaž Gantar member of supervisory board % Management Board 1, % Marko Kryžanowski president of management board % Igor Irgolič deputy-president of management board % Alenka Vrhovnik Težak member of management board % Boštjan Napast member of management board % Bojan Herman member of management board / employee representative % 30

31 MANAGEMENT BOARD president of the management board: Marko Kryžanowski Five-year term began on 1 December Born University graduate in electrical engineering. Responsible for: Procurement, risk management and logistics Marketing General affairs deputy-president of the management board: Igor Irgolič Five-year term began on 1 December 2005 Born University graduate in mechanical engineering, management specialist. Responsible for: Retail Wholesale Sales on foreign markets other members of the management board: Alenka Vrhovnik Težak Five-year term began on 1 December 2005 Born University master s in economics. Responsible for: Finance economics graduate with Accounting 31

32 Boštjan Napast Five-year term began on 1 December 2005 Born University graduate in mechanical engineering. Responsible for: Energy affairs Quality, environment and safety Investments Bojan Herman Appointed for a five-year term on 25 September 2002 Born Grammar school graduate. Director / employee representative 32