Report jan sep 2015 23 11 2015 lasko group

Laško Group and Pivovarna Laško

Report

JANUARY - SEPTEMBER 2015

Laško, 23 November 2015

Laško Group and Pivovarna Laško 3

C O N T E N T S 1.1 Address by the Chairman of the Management Board 4

2 BUSINESS REPORT 5

2.1 Composition of the Laško Group 5

2.2 Ownership structure of the equity 7

2.3 Sales 9

2.4 Investments 22

2.5 Financial position of the Laško Group 24

2.6 Financial risks 25

2.7 Events during the reporting period and subsequent events 28

3 FINANCIAL REPORT 43

3.1 Consolidated financial statements 43

3.2 Notes to the consolidated financial statements 47

3.3 Notes to the separate financial statements 54

Appendices: Appendix 1 – Separate income statement

Appendix 2 – Separate statement of financial position


1 INTRODUCTION

1.1 Address by the Chairman of the Management Board

Continuing the process

In the first nine months of 2015, the sales process of Pivovarna Laško, which was begun in late 2014 by the Sales consortium of Pivovarna Laško, continued, after which the consortium signed an SPA with the Dutch company Heineken under several suspensive conditions. Pivovarna Laško and the Sales consortium of Pivovarna Laško received five bids, which confirms that there was significant interest in the Laško Group and its companies. In early June 2015, Pivovarna Laško signed the SPA for the sale of a 100% stake in Delo with the company FMR from Idrija. The sale of the 100% equity stake in Delo was successfully closed on 18 September 2015, when Pivovarna Laško received the consideration of EUR 7.3 million. Before that, in March 2015, the transaction with Kofola from the Czech Republic was successfully closed, resulting in Kofola becoming the majority owner of Radenska. The consideration received significantly contributed to the deleveraging of Pivovarna Laško and represents a further realization of the repayment of loans from the proceeds of investments in non-core activities under the Restructuring and Standstill Agreement of 30 April 2014 which was signed by 18 creditor banks. Performance in the first nine months of 2015 is in line with the plan

Laško Group companies recorded 2.1% growth in net sales revenues from continuing operations compared to the same period of the previous year. Revenues thus amounted to EUR 136.2 million. In the period, quantities sold on the domestic market were 4.3% higher compared to the same period last year; however, overall sales are lower than last year due to the deteriorating situation in foreign markets. At its anniversary, Laško became the official beer of the first part of EuroBasket 2015 that took place in Zagreb

The completion of the joint process of the capital increase and sale of shares of Pivovarna Laško, the closing of the sale of Radenska and Delo and the consequent fulfilment of the Standstill and Restructuring Agreement are key milestones in the deleveraging process over the first nine months of 2015. On the other hand, the Laško beer became the official beer of the first part of EuroBasket 2015 that took place Zagreb, while Laško brought a record crowd to the 51st Beer and Flowers Festival that hosted many international celebrities. In Ljubljana, the Union Pub has become one of the most recognized bars in Ljubljana and is a paradise for all fans of beer. Finally, the sold-out Stožice stadium, where the Slovenian national football team, under the proud sponsorship of Pivovarna


Union, hosted the English football team, was one of the highlights in Ljubljana.

mag. Dušan Zorko, Chairman of the Management Board of Pivovarna Laško Laško, 20 November 2015

2 BUSINESS REPORT

2.1 Composition of the Laško Group

As at 30 September 2015, in addition to the controlling entity PIVOVARNA LAŠKO, d. d.,

the Laško Group is comprised of the following subsidiaries:

PIVOVARNA UNION, d. d., Ljubljana

JADRANSKA PIVOVARA – Split, d. d.

VITAL Mestinje, d. o. o., and

*RADENSKA, d. d., Radenci.

*Since Pivovarna Laško sold its subsidiary Radenska in March 2015, as at 31 March 2015 Radenska is no longer part of the Laško Group. In addition to beverage producers, the Group also comprises the following companies: **DELO, časopisno in založniško podjetje, d. d., Ljubljana, and its subsidiary

Izberi, d. o. o., Ljubljana,

**Since Pivovarna Laško sold its subsidiary Delo in March 2015, as at 30 September 2015 Delo is no longer part of the Laško Group. The ale closed on 18 September 2015, after all the suspensive conditions had been fulfilled by both the seller and the buyer. LAŠKO GRUPA, d. o. o., Sarajevo FIRMA DEL, d. o. o., Laško LAŠKO GRUPA, d. o. o., Zagreb and LAŠKO GRUPA Kosovo, Sh. p. k.


Organisational chart of the Laško Group as at 30 September 2015

PIVOVARNA JADRANSKA LAŠKO COMPANY NAME LAŠKO LAŠKO UNION, d. d., PIVOVARA - Split, VITAL Mestinje, GRUPA, d. o. o., DEL, d. o. o., GRUPA, d. o. o., GRUPA Kosovo, Ljubljana d. d. d. o. o. Sarajevo Laško Zagreb Sh. p. k. Ownersh.: 98.0796% Ownersh.: 99.4603% Holding: 96.920% Holding: 100% Holding: 100% Holding: 100% Holding: 100% No. of shares: 442,451 No. of shares: 5,396,932

Pivovarna Laško Holding in Laško Grupa SarajevoI84.6106%

Pivovarna Union Holding in Laško Grupa SarajevoI15.3894%

LAŠKO GROUP

PIVOVARNA LAŠKO

SubsidiarySubsidiary Subsidiary Subsidiary SubsidiarySubsidiary Subsidiary

as at 30 September 2015

Controlling company


2.2 Ownership structure of the equity

As of 30 September 2014, the share capital of Pivovarna Laško amounts to EUR 36,503,305 and is divided into 8,747,652 no par-value shares, all of which have been paid in full. These are all ordinary and registered shares issued in dematerialized form bearing the PILR ticker symbol.

In accordance with the provisions of the Act Concluding the Ownership Transformation and Privatisation of Legal Entities Owned by the Development Corporation of Slovenia (ZZLPPO), the shares with the PILH ticker symbol, which were owned by D.S.U., d.o.o., were converted into PILR shares. In this procedure, 136,171 shares were exchanged on 10 June 2015 at the order of the company D.S.U. d.o.o. issued to the KDD (the Central Securities Clearing Corporation in Ljubljana). On 11 June 2015, the number of PILR shares quoted on the stock exchange increased by this number.

As at 30 September 2015, the company had 6,896 shareholders, 5.91% less than as at 30 September 2014. Equity ownership structure of Pivovarna Laško as at 30 September 2015

As at 30 September 2015, the ten largest shareholders held a total of 5,424,813 shares or 62.02% of the total share capital. This is 89,255 shares (or 1.6%) less than as at 30 September 2014, when the ten largest shareholders of Pivovarna Laško owned 5,514,068 shares or 63.03% of the entire share capital.

(at 30 September 2015) no. of shares in % position

DUTB, d. d. 2,089,260 23.884 1.

Kapitalska družba, d. d. 627,252 7.171 2.Austrian Anadi Bank AG - fiduciarni račun 613,300 7.011 3.Skagen Kon-tiki Verdipapirfond 507,181 5.798 4.Alpen.SI, mešani fleksibilni podsklad 357,265 4.084 5.SOP Ljubljana 347,873 3.977 6.Abanka, d. d. 289,976 3.315 7.Banka Koper, d. d. 225,346 2.576 8.KD Galileo, fleksibilna struktura naložb 220,202 2.517 9.KD Balkan, delniški 147,158 1.682 10.

Total - 10 largest shareholders 5,424,813 62.015Other minority shareholders 3,322,839 37.985Total - all shareholders 8,747,652 100.000


Equity ownership structure of Pivovarna Laško as at 16 October 2015

As at 16 October 2015, the ten largest shareholders held a total of 6,318,057 shares or 72.23% of the total share capital. This is 893,244 shares (or 16.5%) more than as at 30 September 2015, when the ten largest shareholders of Pivovarna Laško owned 5,424,813 shares.

On 15 October 2015, Heineken International, B. V., Amsterdam acquired 4,673,941 shares of the issuer Pivovarna Laško, delniška družba (hereinafter: the issuer) with the PILR ticker symbol, with which Heineken gained a material (over 50%) share in the issuer. It acquired the corresponding share pursuant to the Share sale and purchase agreement (SPA) concluded on 13 April 2015 after the fulfilment of the suspensory conditions agreed upon in the SPA.

Heineken became the holder of 4,673,941 shares of the issuer with the PILR ticker symbol, representing 53.43% of all issued shares.

(at 16 October 2015) no. of shares in % position

Heineken International B. V. 4,673,941 53.431 1.

Austrian Anadi Bank AG - fiduciarni račun 613,300 7.011 2.Skagen Kon-tiki Verdipapirfond 507,181 5.798 3.Publikum, d. d. 133,436 1.525 4.Zagrebačka banka, d. d. - fiduciarni račun 80,504 0.920 5.Alta Senior, vzajemni sklad prilagodljiv 77,008 0.880 6.Zveza bank reg. z. z o. j. Bank und revisions 70,613 0.807 7.NLB Skladi - Slovenija mešani 55,396 0.633 8.Arzenšek Matjaž 54,867 0.627 9.Boxaric Investments Limited 51,811 0.592 10.

Total - 10 largest shareholders 6,318,057 72.226Other minority shareholders 2,429,595 27.774Total - all shareholders 8,747,652 100.000


2.3 Sales

1. Sales, marketing and development in the Laško Group

Sales

In the first nine months of 2015, the Laško Group (Pivovarna Laško, Pivovarna Union and Vital Mestinje) sold 2,032,626 hectolitres of all beverages, which is 1.9% below the plan. In the beer segment the growth of supermarket brands continues. The Laško Group continues to optimize the sales portfolio, which also includes discontinuing sales of products that are not sufficiently profitable.

The economic situation in the region remains unstable. Consumers have permanently changed their purchasing habits towards more prudent and smaller purchases. Changes in the consumption structure continue and reveal a growth in the discount supermarket segment and customer inclination towards supermarket brands.

Retailers in the entire Central and Eastern Europe continue to fight to attract consumers, which is reflected in a true price war. Payment indiscipline remains a serious issue; retailers are reducing the number of different products offered and are above all maintaining lower inventory levels, while more and more products are sold in various promotions.

The Laško Group sales data includes sales of Pivovarna Laško, Pivovarna Union and Vital Mestinje. Radenska was sold in March 2015 and in addition, this year Birra Peja is no longer part of the Laško Group as it was sold in July 2014. Quantitative sales of beverages of the Laško Group

Sales of beer are down 1.7% compared to the same period in 2014 and are 3.5% below the plan. Lower sales was recorded mainly due to the termination of bottling supermarket brands for foreign markets. The sales of soft drinks decreased by 17.3% compared to the same period in 2014 and is 3.9% above the plan. The decrease is mainly due to the partial transfer of Multi Sola production to foreign markets. The sales of water (spring water and flavoured waters) increased by 9.4% compared to the same period in 2014 and are 12.8% above the plan.

Index Index Index (in hl) I.-IX./2015 2015/2014 2015/dyn.plan 2015/an.plan

Beer 1,611,636 98.3 96.5 78.3 Water 168,136 109.4 112.8 92.1 Non-alcoholic beverages 252,854 82.7 103.9 84.0

T O T A L 2,032,626 96.8 98.6 79.9


Marketing and Development

BEER

Laško

The nine-month period just ended is a period when the effects of the work become visible and quantifiable, and allow the estimation of the overall result of the financial year. Completed activities have been examined, measured, activities that are underway are monitored and promptly corrected, while at the same time we have one foot already in the plans for next year.

In the first nine months of the year we implemented the planned marketing activities (production of creative ATL solutions, media purchasing and accompanying BTL activities), especially for the Laško Zlatorog umbrella brand, as well as other brands in the Pivovarna Laško portfolio - the Laško Special range of craft beers, Laško Malt, other beer product activities and activities related to the Oda spring water. The marketing communication of individual brands was accompanied by activation promotions organised at numerous individual retailers and caterers (design of POS materials, advertisements, campaign materials and equipment of sales outlets).

In 2015 Pivovarna Laško celebrates 190 years of its existence, which we marked with an umbrella campaign and the supporting slogan "Ostani ponosen" (remain proud) with Boris Cavazza in the main role. We prepared a wide range of campaigns for a variety of media channels, focusing on TV advertising and OOH campaigns. The campaign was given especially strong support in the digital environment. The campaign was adapted and aired also in Croatia and in the market of Bosnia and Herzegovina.

To mark the 190th anniversary, at the product level we launched on the market two cans with "retro" motifs which underscored our anniversary and tradition.

In Italy, in May and June we organised the "Spirito Creativo" campaign (on billboards and radio). Some communication activities were focused on advertising the "Pivo in cvetje" (Beer and Flowers) Festival, since thanks to this event, many Italian tourists who enjoy Laško beer visit Laško each year.

Major sporting events include the European Basketball Championship, part of which took place in Croatia, where Laško beer directs all its efforts in raising the TD. The PLG has signed a sponsorship contract with the Croatian national team, while Laško beer was the official beer of the championship in Croatia. As part of activation of sponsorship contributions we launched a Laško Zlatorog can with a basketball motif, and in addition to the parent Laško ATL campaign, communications were adapted to the Basketball Championship. ATL and BTL activities (at points of sale, especially in retail) were well-designed and excellently carried out.

Laško Special continues to strengthen its position in the "craft beer" segment. Communications were aimed at specialized print and online media, where we are reaching specific target groups suitable for such products. We are also focusing our attention to sales promotion in the trade and hospitality areas, by organising promotional events using specially adapted equipment. These events, which are run by


our ambassadors, the Laško brewers, the protectors of traditional brewing methods, have received an enthusiastic response from the public.

At the beginning of the year, we introduced the new Laško Special Cherry & Chestnut product on the market; this product is creating new trends and thus occupies a silver box in the "New Tradition" Special product line. In spring, the new trendsetter Laško Special Buckwheat was placed on the market, which is special precisely because of the use of a new raw material, namely native Slovenian tartary buckwheat.

In September, a dark strong beer with 11% alcohol was placed on the market under the recreated historic brand Krpan, which today occupies its own place in the Laško Special line on the red field, which is the one that draws inspiration from tradition and history. The launch of these products will be supported with a minimum lease of OOH media.

During the year, the Laško Malt apple flavour, as the weakest product in this particular range, was replaced with a new pear and mint flavour. In the broader media mix, Laško Malt was advertised through an adapted ATL campaign from 2014, and in addition we organised a prize competition on the package, which proved to be rather successful. Among the interesting and very effective ATL activities relating to Malt we should, in addition to the "0.0 šofer" campaign, also mention a series of short viral films "Mikić osvaja Slovenijo" which surpassed all our expectations as the series of five episodes attracted 800,000 Facebook users. The total number of impressions thus reached nearly 3 million users of the Facebook social network. The Malt ATL communication was also carried out in Bosnia and Herzegovina.

Marketing communication was specifically adapted for the "Gremo v hribe" campaign with a minimum media exposure, local exposure of each event on OOH, and supported by strong online communication and a minimum lease of printed media. In addition to all these activities, during the year we also worked on socially responsible contents for our Oda brand. These took the form of workshops and children's corners at events such as "Gremo v hribe" (Let's go to the mountains), where the friendly owl Metoda invited children to try their hands at various forms of applied arts and educational contents relating to nature and the environment. The workshops were very well-attended and this confirmed our expectations that a substantive upgrade of the events will contribute to increased visits.

Today, the largest hiking project in Slovenia, which has attracted to the mountains almost 30,000 hikers, is hailed as one of the largest socially responsible campaigns on the Slovenian soil, supported by the Alpine Association of Slovenia. The Goldhorn family has almost 30 members, clubs and mountain lodges. The ambitious goals that we have set ourselves in the first year of the campaign have proved to be increasingly more fruitful. Many mountaineers, hikers and recreational walkers, families, young and old, lovers of the Slovenian mountain treasures gathered at the Goldhorn events. Despite the fact that due to bad weather conditions one of the events had to be cancelled, the average visit to the event was as much as 25% higher than last year. This increase in the number of participants is mainly due to substantive upgrading of the project at the locations themselves.

The "Pivo in Cvetje festival" celebrated its 51st anniversary in 2015, marking more than half a century of tradition.


This is one of the most attended tourism, entertainment and cultural events in Slovenia, attracting over the four days of the event more than 100 thousand visitors to the small town of Laško, which has only about 5,000 inhabitants. In 2015, we counted more than 135,000 visitors. The festival is of paramount importance, not only for Laško, as a tourist destination and its population, but also for the strength and reputation of the Laško brand and other Laško brewery brands, which are in many different ways and with different mechanisms involved in the festival program and its promotion. For many years the Festival has undoubtedly been the most important and most striking annual marketing campaign run by Pivovarna Laško as it maximizes promotional effects at the corporate level as well as their combined brands. From this perspective the Festival remains a unique Slovenian project.

The results of measuring the effectiveness of individual communications campaigns indicate a more efficient allocation of resources since our communications have been assessed as appealing, easy to understand and have recorded excellent results.

In terms of development, in the first half of the year we launched a new product on the market, a can of Export Pils with 4.5% alcohol, in response to growing price pressures and fragmented consumption in the low-cost segment of beer. Our range of products was enriched with a half-litre can of Laško Dark with additional packaging as a clear response to the growing segment of consumers who prefer dark beer.

Currently, in the Laško Malt line, we are entering the final stage of the development of a new flavour, scheduled to be put on the market in 2016, and in addition, a new product in the Special line is also in the final development stage.

Union

In 2015 Pivovarna Union continued with its communication strategy that has run over the past few years, and which has seen upgrades of the brand's underlying communication elements. The core of the campaign is the catchphrase "connecting", bringing together former classmates, enthusiastic spectators of sports both at home and in the bar, co-workers and future white collar workers. For these purposes, we slightly adapted last year's TV ads and introduced a new series of BB and print ads. In addition, the façade of Pivovarna Union was covered with new creative ads. In the second half of the year we began our communication materials by introducing the "drink responsibly" badge.

In addition to the redesign of the Radler brand, we organised a prize game, revamped the website, and in particular promoted new modern means of communication which will help us attract younger target populations. In addition to PR activities aimed at raising awareness especially of the younger population of the need for the more responsible and moderate drinking of alcohol, we also ran a series of TV ads and citylight ads. Currently we are running the "Pij drugače" competition aimed at young photographers, which will be conducted by Cheryl Dunn, a renowned photographer. Applications are available on our web page. The best photos will be exhibited in the "Galerija Fotografija" at the Levstik Square in Ljubljana.

In the commodity group "unforgettable" we have prepared a redesign proposal and a set of new beers.


The project portfolio optimization began with the abolishment of items and brands that do not achieve the desired gross margins or sufficient sales volumes. By the end of this year we plan to abolish in particular the products which we believe have no potential in the year 2016.

SOFT DRINKS

Sola

In 2015 the Sola brand started with communication for its most popular and most successful sales brand - Sola Ice Tea. We have prepared outdoor campaign at BB advertisements. According to research results, the campaign was highly visible and likeable. In the winter months we prepared a music contest for teenagers in primary schools through the Sola Ice Tea Beats music application.

In the winter period we continued Multi Sola activities. We organised a carnival prize game and set up special Sola stands - snowmen in stores; these immediately became a major attraction.

In March we launched a new, fresh and modern Sola campaign. The central idea is that we can be active in any moment and that any situation can represent an opportunity to exercise. We shot a cover spot for the Sola brand entitled "Aktivejšn Generejšn" (activation generation), which represents our attempt to approach our consumers in a different, more innovative manner. The campaign aims to inform our customers that the Sola brand is committed to as much exercise in the daily lives of its consumers as possible. To this end, we are working with many ambassadors, among which acrobats Filip and Blaž stand out the most. Cross-media support was also provided including TV advertisements, a BB campaign, FB and print. To show that we mean what we promote, at the conclusion of the campaign in cooperation with the sports associations Urban roof, we erected the first Sola playground for children and adults.

In cooperation with the Hockey Association of Slovenia, we devised the "Zadeni kot ris" prize competition in the Tuš shopping centres in support of the Sola Isošport brand. The competition ran concurrently with the hockey championship and attracted large numbers of sports fans and Sola consumers.

Sola Limonada is a brand aimed at a broader target group, as it fascinates both the young and the young at heart. Sola Limonada was put in the limelight on a POP TV show entitled "Popolna poroka" (Perfect Wedding). The programme had very good ratings, and our product had great exposure in the show. This year's sales figures show that Sola Limonada continues to be a very popular refreshment during hot summer days.

We marked the end of the summer by our cooperation with Goran Dragič in his basketball camp, which was held for young basketball players at Rogla. We provided refreshments for all camp participants.

In the summer months we held a presentation of the new Sola Hey blueberry & grape fruit drink. The new drink immediately impressed all fans of Sola full flavour drinks. This new product presents the widening the range of Sola fruit juice drinks. The new Sola Hey was promoted at numerous tastings. In June, we also carried out a BB


campaign, a prize competition and ran radio advertisements, as well as a large number of tastings at the coastal areas where the new drink was tasted by our target group.

For our youngest target group we organised during the summer months a number of activities and promotions at the coast involving our mascot Soni and a sports course.

In late August, the new Sola Hey was launched also at the Panč festival. Panč is a stand-up festival held at the Ljubljana Castle and we have been taking part at the festival for many years. We organised a promotion of the Sola Hey blueberry & grape flavour and made the whole event even more exciting through the attendance of our ambassadors and the presentation of the Sola "Aktivejšn generejšn" movement.

At the beginning of the school year the summer activities continued by increased sales promotion activities of the Sola ice tea brand in stores. Customers in Spar stores were awarded for their purchases with Sola glasses, while in Mercator stores we combined our ice tea sales with the promotion of a currently very popular children's cartoon character.

WATER

Zala

Since a new communications strategy is being devised for the Zala brand, no major marketing activities have been carried out. The majority of marketing activities carried out have been ongoing on the web, while during the peak season we promoted the product on giant billboards along the motorway. Other activities are running at points of sale such as the Water project, for which we provide support material, and various projects have been adapted to specific sales channels (gas stations, vending machines, etc.).

According to the latest results, the Zala brand has increased its market share in the segment of still waters, also on account of enhanced activities at points of sale. In addition, several co-marketing activities were also organised.

To devise a new 3-year communication strategy, we conducted a survey of the perception of the Zala and Za brands and in collaboration with the Marketing and Sales departments we organised a number of workshops. Based on the results and in cooperation with an external agency, we began to set up a new communication strategy of the Zala brand involving a story of the brand to run in 2016.

In the first half of the year we organised major sponsorships under the Zala brand; linking promotional activities with outlets and the web site; sponsoring Women's ski jumping in Ljubno, "Pot ob žici" and the Three member team run in Ljubljana. During the peak season in August we organised and carried out the activation of the sponsorship of the Tennis Association of Slovenia at the Slovenia Open ATP tournament in Portorož. In September preparations began for the activation of the sponsorship of the Ljubljana Marathon, which took place at the end of October; we are connecting the ground and online activities and this year's story speaks to the fans.


Oda

Oda spring water successfully maintains the continuity of very pure and clear communication tones, with an additional upgrade of its communication, with particular focus on an active and healthy lifestyle. An ATL communication campaign with BTL support was carried out. The campaign ran on TV, OOH, print and the Internet, all of which was supported by communication on social networks. The contents were upgraded with a series of video tutorials led by recognised fitness instructors. These tutorials are devised to advise consumers on how to avoid stress, tension or simply maintain good physical condition, which is the basis for good quality of life. In May and June we organised a prize competition which received an enthusiastic response from consumers and digital channel users.

We also developed a platform for contents of a socially responsible nature, interesting topics for the target group of children and their parents, raising awareness of environmental issues and finding solutions for the important and urgent need for coexistence of man and nature, in line with our sustainability commitments. For the sixth consecutive year we ran the socially responsible campaign "Gremo v hribe" as part of the Goldhorn's hiking path of pride.

Za

The main communication channel for ZA beverages is digital media and thus we have set up a new digital strategy for communication on all web channels. Our sponsorship of the Sup Club Ljubljana enables us to offer free sup tuition to all fans of ZA brands in Slovenia during the months from May to October. A one-day ZA SUP event was organised where more than 60 young athletic enthusiasts attempted new sports activities closely linked to the ZA brand. In addition, we organised several mini SUP classes with participants applying through FB and IG. By running the summer web story for ZA beverages - #ZAfriends, we have linked with young entrepreneurs who operate under the name Brand of Friends, and so young people create products for the young, where the common thread of the summer is the value of friendship among young people. In September we ran a "back to school" project on the web and in bars and catering facilities located in the vicinity of schools; all the bars were given pop art posters and ZA glasses, whereas on the web we are running a competition helping students to furnish their student rooms (table lamps etc.)

Web activities are supplemented by sales activities, we provide support materials for furnishing sales outlets, and carried out a prize competition in the vending segment. Sales outlets actively promote all four main flavours of ZA brand beverages.

Nula

At the beginning of the year we prepared a marketing campaign (TV, print, web, radio, event) to launch the Nula brand; we chose the month of January, which is atypical for the advertising of water as we want to emphasize that the Nula drink is not just a summer seasonal product. Visibility of the campaign was exceptionally good, because as the only drinks advertiser we received all the attention, encouraging consumers to make a purchase. In the segment of sugar-free flavoured waters, in addition to the raspberry flavour, in April we launched the grapefruit flavour. The reactions from the market are


good; both retail and the HORECA estimate grapefruit flavour to have a high potential. The sales result of both products are very good.

The latest trade market shares show that the Nula brand is the third best-selling flavoured water, accounting for an 8% market share in the segment of flavoured water. From April onwards, the majority of communications for the Nula brand is run via the IG social network, which has in the past achieved good results and active followers. Thanks to short stories and exposure at social events, the Nula drink has become a permanent companion. At points of sale, promotional materials provide the team potential for further promotion of the Nula brand on the shelves and new sales stands were introduced, which have brought good sale results at the point of sale. Special table ornaments were designed for HORECA used by the sales promotion team in combination with coffee. We are experiencing minor problems with placing "Nula grapefruit" 1.5 l on the shelves as recently retailers are making significant changes to their stores and reducing the available shelf space.

Together with the development team we designed a concept for the new Nula flavour and carried out the first internal and external tastings. These will be followed by stability tests to help us select a potential new flavour based on consumer feedback and the test results. Development

Laško

In the third quarter of 2015 we continued developing the new range of speciality beers under the Laško Special label. The sixth special bottled beer - Krpan - with an alcohol level of 11.0 vol.% was launched to the shelves alongside the other five products in this range. The first three flavours were tested also on the Italian market, while a test launch for the Croatian market is currently underway.

In the segment of our own brand beers we launched the Laško Dark 5.9 vol. % beer in a 0.5 litre can and Laško draught beer in a 10 litre Coolkeg in the spring. We actively pursued activities related to the Retro image of the core Zlatorog brand. To mark the 190th anniversary, we launched a special promotional packaging of six cans in cardboard boxes with CDs enclosed (Šank Rock). For the Eurobasket Championship in Croatia we launched a special filling of Laško Zlatorog in 0.5 litre cans.

In 2015 we introduced only one new product in the supermarket brand segment (Kplus 4 vol.% 1/4) and drafted the potential options for production and filling volumes for supermarket brands (preparation of requirements and price-list for customers).

In the segment of Malt beverages we launched a new product on the market early in the year - Laško Malt pear and mint, which is bottled in a non-returnable 0.33 litre bottle and 0.5 litre can. This product replaced the Laško Malt apple flavour on the shelves. Further development is underway.

We also launched a special summer edition of the Oda water (0.5 and 1.5 litre bottles), while an autumn edition is currently being launched. We held a series of lectures entitled Plastenkina zgodba (the Bottle's story).


We finally discontinued the Bandidos and Laško Radler brands.

With the aim of optimizing materials (price, cost or technology) we performed more testing in the area of return labels (in conjunction with the investment in the ST2 line) and the Special line (labels and adhesives testing). In addition, a number of small tests were also carried out. We conducted three major supplier assessments – Ball Packaging Beograd, Galeb Metal Group, Šabac and Vital Mestinje.

In terms of packaging, in addition to optimization, we also performed trial filling of 30 l PET kegs. The project is still pending final confirmation.

In the period, we continued with the activities related to the ISO 9001, ISO 14001 and IFS audits.

Union

In the first few months of 2015 we developed new flavours in the water, herbal tea, fruit drinks, Malt drinks and drinks with added alcohol segments. We developed a ginger beer for Konzum. We organised development samplings, trial bottling and stability tests. In the second half of the year we began developing different concepts of beverages for 2016.

In the segment of waters without any added sugar or sweeteners, we began bottling Nula raspberry in 1.5 litre bottles. We have also launched the Nula grapefruit flavour in 0.5 and 1.5 litre bottles.

We developed and, after industrial tests, launched a new flavour of Sola Hey fruit drinks (blueberry and grape) in 0.5 and 1.5 litre PET bottles. We redesigned the labels and cans for the Sola peach and cranberry ice teas, now incorporating the image of the fruit. To this end we had to adjust the base used for Sola cranberry ice tea, to which fruit juice was added.

We developed a Malt pear and mint flavour, which is filled by Pivovarna Laško into bottles and cans.

We redesigned the range of Radlers and organised a prize competition linked to the new design.

For the pub, we developed a new "beer-maker's selection" beer in kegs - "Peti kralj" (fifth king), which was in May replaced with XI. In addition, we started filling Union unfiltered beer in 5 and 10 litre kegs. We also developed the "Hokejist" beer for the pub ("Pivnica").

We conducted several tests of materials relating to the new requirements of the renovated S4 bottling line: trials of labels, glues, and tests of crown tops, and drafted the relevant documentation. We decided on one type of paper to be used by all printers.

We coordinated and updated the quality standards for packaging materials and raw materials.

In connection with the new legislation on the provision of food information to consumers, we, at the request of customers, filled their tables - data about products for both supermarket brands as well as our own brands. In April, we implemented this into sales.


We also carried out a review of suppliers and participated in various projects:

at the Chamber of Commerce, we were in the working group for the preparation of industry commitments in the area of nutrition and health,

we drafted data for the sustainability report of the Laško Group,

we prepared the technological schemes, which are exhibited in Pivovarna Union,

we prepared data for VDR,

we prepared a report for Slopak (until March, then due to the reorganisation of the development department, this became the responsibility of the person responsible for environment protection),

we cooperated in the implementation of internal audits,

we prepared data on the potential production and filling volumes for supermarket brands, prepared other requirements concerning packaging materials and price changes in packaging materials (new designs, declarations),

we organised meetings with brand managers in order to identify new concepts for development and development workshops with suppliers of fruit bases and flavourings.

In September, we drafted the documentation for an external ISO and IFS audit.

2. Sales of Laško Group products on the Slovenian market

Sales

Sales activities are focused on retaining our market shares in individual beverage categories on the domestic market, improving our brands' positions, brand communications and visibility at points of sale, and reaching the sales goals and profitability of our brands. In our sales and marketing activities we focus on products and promotions that to the greatest possible degree satisfy the needs of an individual retailer's customer in each individual channel.

We upgraded our POS material communications; the clear message now allows us to enhance our customers' awareness of our brands and encourage them to purchase our products. In our activities we focused on price promotions and added value for our customers, as well as activities focused on certain occasions, such as picnics, hydration, light meals and socialising.

We defined micro-locations at various frequented zones, thus influencing consumers to make impulse purchases as part of our regular monthly activities conducted with individual retailers. We drafted standards of labelling products on both regular shelves and secondary positions with the aim of improving customer perception of our brands.

In the HoReCa channel we have focused on the excellence of the various parameters: excellent service, visibility at points of sale, active sales promotions and ensuring the satisfaction of our final customers, while package sales, brand activation and activation in accordance with key projects are conducted in parallel. Our upgraded standards of


participating and enhancing sales at events are also an important factor in these activities.

Retail market shares

In terms of packaging, cans account for the greatest share, followed by glass bottles and plastic bottles. According to Nielsen data (retail sales, YTD 2015), the growth of supermarket brands of Mercator, Spar, Tuš, Hofer and imported brands, which are conducting intensive promotions at points of sales, continues this year.

In the segment of still waters, the Zala brand holds the leading position, and the Za brands hold the leading position in the flavoured waters segment.

In the group of iced teas, the Sola brand holds the leading position. Quantitative sales of the Laško Group on the domestic market

Pivovarna Laško

The sales of Pivovarna Laško on the domestic market are up 6.3% compared to the first nine months of last year and up 3.2% on the plan. Beer is the most important segment, of which we sold 5.6% more than in the same period of 2014, which is 2.7% above the plan.

Pivovarna Union, d. d., Ljubljana

The sales of Pivovarna Union on the domestic market are up 3.8% compared to the first nine months of last year and up 4.1% on the plan. Beer sales were 2.7% above the same period of 2014, which is 0.3% above the plan. Soft drinks sales were 4.0% above the same period of 2014, which is 14.6% above the plan.

Vital Mestinje, d. o. o.

The sales of Vital on the domestic market are down 3.2% compared to the first three months of last year and down 6.7% on the plan.

3. Sales of Laško Group products on foreign markets

Sales

In the first nine months of the year, the sales of the Laško Group on foreign markets are down 15.5% compared to the first nine months of last year and 9.5% below the plan. The Group sold most beer on foreign markets - 10.3% less than last year and 10.8% less than

Indeks Indeks Indeks (in hl) I.-IX./2015 2015/2014 2015/dyn.plan 2015/an.plan

Beer 1,016,471 104.1 101.4 81.2 Water 167,252 109.7 113.5 92.5 Non-alcoholic beverages 181,864 100.6 103.7 83.1

T O T A L 1,365,587 104.3 103.0 82.7


planned. We sold 31.3% less water than last year and 47.1% less than planned. Due to the transfer of the production of Multi Sola under licence to Kosovo that took place in February of this year, sales of non-alcoholic beverages in recorded a drop of 43.1% compared to last year and are up 4.6% on the plan. Quantitative sales of beverages of the Laško Group on foreign markets

Laško Group companies recorded the following structures of sales on markets outside Slovenia: Pivovarna Laško (321,079 hectolitres), Pivovarna Union (341,146 hectolitres) and Vital (4,814 hectolitres).

Although the Laško Group disposed of its subsidiary Birra Peja Sh. a., Peć, in 2014, this company continues to produce Sola ice tea peach flavour and Multi Sola for the markets of Kosovo and Macedonia with sales totalling 118,817 hectolitres in the first nine months of 2015 (up 150.4% compared to last year) and, until July of this year, minor quantities of beer under the Laško Zlatorog licence for the markets of Kosovo, Macedonia and Montenegro with sales of total 6,035 hectolitres in the first nine months of 2015 (down 67.4% compared to last year). This year, we transferred the production of Laško Zlatorog beer for the markets of Kosovo, Macedonia and Montenegro back to Pivovarna Laško. In the first nine months of 2015, Birra Peja sold a total 124,852 hectolitres of non-alcoholic beverages and beer produced under licence (up 89.2% compared to last year).

In the key market of Kosovo, the Laško Group established its own company Laško Grupa Kosovo, Sh. p. k. Peć in August 2014, aiming to accelerate the sales of the Laško Group brand products.

Pivovarna Laško

In the first nine months of the year, the sales of Pivovarna Laško on foreign markets are down 11.5% compared to the first nine months of last year and 15.1% below the plan. Beer is the most important sales segment, while malt drinks have a smaller share. Sales on the key markets of Kosovo, Macedonia, Montenegro other markets are up both compared to last year and compared to the plan. On the markets of Croatia and Austria, Pivovarna Laško exceeded last year's results, but has not yet achieved the plan. Sales on the key market of Hungary are down on last year but up on the plan, while the sales on the markets of Italy and Bosnia & Herzegovina lag behind last year, as well as behind the plan.

Indeks Indeks Indeks (in hl) I.-IX./2015 2015/2014 2015/dyn.plan 2015/an.plan

Beer 595,165 89.7 89.2 73.6 Water 884 68.7 52.9 47.9 Non-alcoholic beverages 70,990 56.9 104.6 86.4

T O T A L 667,039 84.5 90.5 74.8


Pivovarna Union

In the first nine months of the year, the sales of Pivovarna Union on foreign markets are down 19.0% compared to the first nine months of last year and 3.6% below the plan. The sales of beer dropped by 8.1% compared to last year, down 4.5% on the plan. Due to the transfer of the production of Multi Sola under licence to Kosovo, sales of non-alcoholic beverages recorded a drop of 45.7% compared to last year and are up 1.7% on the plan. Sales on the key markets of Italy, Austria, and other markets are up compared to last year and the plan; sales on the key market of Kosovo are down compared to last year and up on the plan, while sales on the markets of Bosnia & Herzegovina, Croatia, Hungary and Macedonia are both down compared to last year and behind the plan.

Vital

On foreign markets, Vital sells small amounts of syrups, which account for a 68.2% growth in sales compared to the same period last year, up 70.9% on the plan. Vital exports products to Italy, Bosnia & Herzegovina and Croatia.


2.4 Investments

Demand management is an important novelty introduced in the first nine months of the year for the evaluation and implementation of investment projects.

The objective of demand management is to centralize, standardize and introduce best practices in managing the project portfolio in the areas of:

support provided to project preparation, priority placing and management,

reporting on the time implementation of the projects and monitoring the project's milestones,

reporting on the achievement of the project benefits in cooperation with the controlling department,

risk management,

monitoring the financial elements and benefits of projects,

change management,

communication and stakeholder management.

The strategic project office will ensure full compliance with the best practices of project management by all project managers and is already in 2015 responsible for internal project implementation communication.

Investments in Pivovarna Laško

In the first nine months of 2015, Pivovarna Laško spent EUR 3.75 million on investments and purchases of property, plant and equipment.

In the first six months of 2015 we continued the strategic investment relating to the replacement of the wet part of the ST2 bottling line. The project was completed by June 2015 to the phase where the dry part of the line allows the complete supply of the market with our products with an output capacity of 60,000 bottles (0.5 litre and 0.33 litre) packed in 20 x 0.5 litre, 24 x 0.33 litre and 10 x 0.5 litre crates. Optimization of the line and completion of the entire project is scheduled for the late second half of 2015.

In September, a new air-conditioning vent of 50,000 m3 was installed and released into operation in the building housing the ST2 bottling line, which ensures optimal operation parameters for both the dry and wet part of the new ST2 bottling line. The device is linked to the use of heat from SPTE 400 kWel, ensuring that the heating and ventilation of the building is carried out with the cheapest possible energy source.

At the same time, in addition to the ST2 project, we began preparatory works relating to the investment in degassed water and softened degassed water, which is needed for the new ST2 bottling line, pressure tanks and the cellar. This project was successfully completed by the second half of the year, meaning that it already provides the optimum operating parameters of the ST2 bottling line, pressure tanks and the cellar.


In collaboration with Elektro Celje, a building permit for an overhead 2 x 20 kW power line for the J-plateau bottling line was obtained in late May. This allows the continued future construction of facilities in accordance with development needs at that location, since the power distributor Elektro Celje has commenced with the investment related to the relocation of overhead power lines to underground cabling.

In the entire nine-month period we conducted activities related to the acquisition of the technical and project documentation for projects relating to the cooling of yeast, the NH3 compressor and the renovation of the vertical transporter in the filling area, which will be implemented in future.

In late June, the new Mycon compressor unit with a power of 1 MW was received. It started operating in late July during high production season to ensure the stability of supply of technological processes with cooling energy. This new addition to the energy system of the cooling room will significantly reduce power consumption, maintenance costs, enhance operational stability, as well as NH3 emissions into the environment.

The planned project for the restoration of the vertical conveyor in filling station C is already at the stage of conceptual design and bids have already been gathered. This means that investment works can begin immediately after the selection of the most suitable contractor.

Investments in Pivovarna Union

By late September 2015, Pivovarna Union spent EUR 4.68 million on investments and purchases of property, plant and equipment.

Renovation of the wet part of the S4 bottling line was completed in mid-February 2015. We replaced the bottling and washing machine, as well as the labelling device. In addition to replacing the machines, we also replaced the ventilation system and the spent flooring. Noise protection still needs to be installed. The S4 line has become the most important filling line in Pivovarna Union as we use it to fill beer into all kinds of returnable packaging (currently five different bottles and five different cases).

We concluded the agreement for the replacement of two old steam boilers with two new hot water supply systems. This investment is important for the unhindered provision of heat needed for the production and heating. After obtaining the building permit, we began preparatory works and installation of pipe connections. We have removed the first of the old boilers. The first new boiler is currently being connected, and we expect it to come online in early November. The time line of the project for replacing the boilers has been extended since we need to continuously ensure the supply of heat during the project. The second boiler is expected to be supplied and installed in January.

We are currently drafting the relevant solutions for the renovation of the processing, regulation and IT system of the warehouse, and have obtained bids from two potential suppliers. We expect to finalise the proposals, solutions and bids by the end of 2015.

Regarding the investment in two new pressure tanks we are waiting for the revised bids of two potential suppliers and their assessment through the established system of demand management.


2.5 Financial position of the Laško Group

Financing in the Laško Group

The beer-making industry is subject to seasonality, implying significant liquidity fluctuations and deteriorated liquidity off-season, which is generally between January and late May. Especially the parent company faced liquidity issues in the first nine months of the financial year. During these times, due to lower quantities sold and the poor payment discipline of our major customers, we usually face difficulties managing our current liquidity. On average, we receive payment for over 70% of our quantities sold within 75 days, meaning that we only receive payment for quantities sold in the summer by early autumn, thus improving the liquidity of the companies.

During the nine months of the year, the Laško Group (Pivovarna Laško and Pivovarna Union) reduced its exposure to banks by repaying net principal of EUR 43.6 million, of which EUR 43.7 million was repaid by Pivovarna Laško, while Pivovarna Union increased its net debt by EUR 0.1 million, including changes to the utilisation of the approved revolving loans. Upon the closing of the sale of Radenska on 17 March 2015, Pivovarna Laško and Pivovarna Union also settled all liabilities due to Radenska relating to inter-company loans.

In the first nine months of the year, the Laško Group recorded EUR 7.5 million of interest expenses from financial liabilities and recorded an normalised EBITDA of EUR 33.0 million. Most interest was recorded by Pivovarna Laško, namely EUR 6.1 million. This resulted in an normalised EBITDA of EUR 11.9 million, meaning that the normalised EBITDA generated in the first half of the year is sufficient to cover all interest expenses from financial liabilities due to banks on account of the principal amounts.

As of the date on which the sales process for Radenska closed, Radenska is no longer part of the Laško Group. The transaction was closed in financial terms on 17 March 2015 and thus the Laško Group fulfilled part of the second milestone stemming from the Restructuring and Standstill Agreement, which was concluded with all crediting banks on 30 April 2014. In accordance with the sales contract, the remaining amount of the proceeds from the sale of Birra Peja amounting to EUR 1.75 million and paid by the buyer on 27 May 2015 was used as partial repayment of bank borrowings raised by Pivovarna Union. Pivovarna Laško spent part of the sales proceeds on repayments to banks in accordance with the repayment schedule outlined in the Restructuring and Standstill Agreement.

On 30 September 2015, Pivovarna Laško, again in line with the repayment schedule outlined in the Restructuring and Standstill Agreement, made a further loan repayment amounting to EUR 12.3 million, this time from cash flow generated from its core activity. It thus reduced its borrowings from banks to EUR 141.4 million including the total amount of the approved revolving loan. As at 30 September 2015, total liabilities due to banks by Pivovarna Union thus amount to EUR 44.3 million.

The next significant step to realising the third milestone outlined in the Restructuring and Standstill Agreement was signing the agreement on the sale of a material stake in Pivovarna Laško, which occurred on 13 April 2015. The sale closed on 15 October 2015, after all the suspensive conditions had been fulfilled on 6 October 2015. For more


information, see Chapter Events during the reporting period, namely item 4. Fulfilling the milestones referred to in the Restructuring and Standstill Agreement

On 3 June 2015, Pivovarna Laško concluded a Share Purchase agreement for the sale of a 100% stake in Delo with the company FMR, financiranje in upravljanje naložb, d. d. The sale closed on 18 September 2015 when the buyer paid the purchase price in the amount of EUR 7.3 million for a 100% stake in the company Delo. Thus Pivovarna Laško fully achieved the second milestone pursuant to the Restructuring and Standstill Agreement.

Sale of the investments of the Laško Group

In 2015, the Laško Group continues activities related to the divestment of financial investments and other assets not necessary for its operations. On the basis of the operational and financial restructuring of the Laško Group, the sale of Radenska, d. d., Radenci, was successfully concluded on 17 March 2015, while the transfer of the balance of the consideration from the sale of Birra Peja completed the sale of this investment in the Kosovar brewery. In addition, on 3 June 2015 the sales contract for the sale of the entire stake in the company Delo, was also signed, while the transaction closed on 18 September 2015.

Sale of Delo

The sale closed on 18 September 2015, after all the suspensive conditions had been fulfilled by both the seller and the buyer. For more information, see Chapter Events during the reporting period, namely item 3. Sale of the shares of Delo, Ljubljana

The sale of Radenska, Radenci

This transaction closed on 17 March 2015. For more information, see Chapter Events during the reporting period, namely item 2. The sale of the shares in Radenska

The sale of Jadranska pivovara – Split

The sale of a substantial part of the production equipment has been completed. The rest of the power equipment, two cylindrical fermenters and pressure tanks are in the portfolio to be sold by different vendors that deal in used technology equipment.

2.6 Financial risks

All the risk management activities in the Laško Group focus on the unpredictability and illiquidity of financial markets, that have increased under the conditions of the financial crisis, and attempt to minimize the potential negative effects on the financial stability and performance of the Group. The finance department predominantly deals with financial risks while the sales department is also involved in credit risk management.

Long-term stability of the Group’s operations dictates concurrent and detailed monitoring and assessment of financial risks. In 2015, the company continues to follow the objective of achieving stable operations and reducing exposure to individual risks to a sustainable level. The companies are unable to fully hedge all risks, but can reduce or avoid risks from materialising with timely measures. To this end, the companies


continuously recognise and assess risks, taking the relevant measured depending on the target risk exposure. Risk management measures have been built into our day-to-day operations. All recognised risks have been recorded in the risks register, which is amended as needed. Particularly significant among financial risks faced by the Group as well as each individual company are liquidity risk, risk related to the decrease in fair value of investments, property, plant and equipment and investment property, credit risk and to some extent also interest rate risk.

Liquidity risk

The Group, and especially Pivovarna Laško, discloses an excess of current liabilities over current assets, signifying the existence of a significant liquidity risk. Although the Standstill and Restructuring Agreement, which was concluded on 30 April 2014, has significantly reduced the insolvency risk and improved the structure of financing sources, the Group must pay maximum possible attention to its liquidity risk.

In 2014, the Group sold its investments in Mercator and Birra Peja, and partially repaid its crediting banks through the entire proceeds. On 17 March 2015, the process of selling Radenska also closed, while the proceeds were used to partially repay the crediting banks of Pivovarna Laško and all liabilities relating to inter-company loans provided by Radenska were settled.

To avoid liquidity issues, Group companies manage their liquidity risk, design and implement a policy of regular liquidity management including the planning of cash outflows and sufficient inflows both on an annual and a monthly level.

Monitoring of the fundamental financing and liquidity ratios pursuant to Article 14 of the Financial Operations, Insolvency Proceedings and Compulsory Dissolution Act, which prescribes criteria under which an entity is deemed insolvent, is particularly important and necessary in ensuring effective liquidity risk management. Regular monitoring of the company's liquidity position is of particular importance as it ensures timely response and helps to avoid unfavourable consequences of an emerging liquidity crisis.

In April, the sales consortium of owners of Pivovarna Laško concluded with Heineken International B.V. a Share sale and purchase agreement (SPA), pursuant to which the company Heineken acquired 4,471,054 shares or 51.11% stake in Pivovarna Laško. The signing of the contract represents the continuation of the fulfilment of the Restructuring and Standstill Agreement. The Agreement was agreed under a number of suspensive conditions, all of which were fulfilled on 6 October 2015. This sale transaction closed on 15 October 2015. Upon signing the Share Purchase agreement, the buyer also concluded a cooperation agreement with Pivovarna Laško, with which the buyer undertakes to ensure the continued financial stability of Pivovarna Laško after the transaction closes. On 15 October 2015, Pivovarna Laško received from its new majority owner Heineken International, B. V., Amsterdam a long-term loan in the amount of EUR 141,489,909. The loan was used in its entirety to repay all existing loans of Pivovarna Laško to all creditor banks.

We have assessed the company's liquidity risk as manageable.


The risk of changes in fair value

The risk of changes in fair value of financial investments, property, plant and equipment and investment property is undoubtedly also an important financial risk. The risk can be observed in the segment of financial expenses where financial expenses from the impairment and write-off are disclosed. The sale of the investment in Mercator in late June last year has resulted in a significant reduction in the risk of changes to fair values due to the impairment of investments. The sales of Radenska and Delo brought a further reduction in the risk of changes in fair value of financial investments. However, the risk of a fall in the other financial investments and real estate held by the Group still remains.

Credit risks

include all those risks resulting in the decline of the company’s economic benefits due to insolvency of the company’s business partners (customers) and failure to meet their contractual obligations. To this end, the receivables from our business partners, wholesalers and retailers, are regularly monitored. In addition, we actively manage receivables, rapidly implement collection procedures by reminding customers, collecting receivables via telephone or in the field, as well as debt recovery through an external agent and through the courts. Part of our receivables are insured with the SID insurance company, while others are secured with guarantees, mortgages and bills of exchange. Business with less credit-worthy customers is made on the basis of advance payments and immediate payments so that the risk of non-payment for the purchased goods is avoided to some extent.

Receivables due from our major wholesalers on the local market are only partly collateral and subsequently, there is a large credit risk exposure to this particular segment. It is believed that there is a considerable risk of the spreading of the late-payment culture in 2014 also into 2015, which is the result of the financial crisis in all the segments of the economy. The management believes that the credit risk is increasing due to fierce economic conditions.

Interest rate risk

is the risk of a possible change in the reference interest rate on the financial market, mainly due to Euro borrowings linked to a variable interest rate (EURIPIDES). Interest rate hedging of long-term debt at variable interest rate is doubtlessly sensible; however, our loans were restructured until 31 December 2016 on 30 April 2014 and then on 15 October 2015 repaid in full through the long-term loan provided by the new owner of Pivovarna Laško, namely Heineken International, B. V., Amsterdam. The loan bears interest at a fixed interest rate. The company's exposure to interest rate risk is manageable.


2.7 Events during the reporting period and subsequent events

EVENTS DURING THE REPORTING PERIOD

1. Joint process for the capital injection into Pivovarna Laško and the sale of the 51.11% stake in Pivovarna Laško held by the Sales consortium

In accordance with the Standstill and Restructuring Agreement which the Laško Group concluded on 30 April 2014 with creditor banks, as well as in accordance with the Laško Group Strategy for the 2015 - 2019 period, together with its adviser UniCredit, the Management Board began searching for an investor to inject capital into the company in July 2014, when it issued the Teaser.

In October 2014, the interested bidders who signed the Non-Disclosure Agreement (NDA) received the Information Memorandum, which summarised all data on the operations of the Laško Group. They were invited to submit their bids for providing a capital increase in the amount of EUR 75 million, whereby Pivovarna Laško informed the public that it would select the best bid, with the price per share being deemed the main criterion for selecting the best bid.

Both strategic and financial investors expressed their interest in participating in the capital increase.

Based on the non-binding bids received in the proceedings for the capital increase of Pivovarna Laško, on 21 November 2014 Pivovarna Laško confirmed the short-list of potential investors which were invited to continue the process of the capital increase of Pivovarna Laško. The Supervisory Board consented to the Management Board's proposal for the selection of the potential investors invited to inject capital into Pivovarna Laško, d. d., and consented to the proceedings continuing with the potential investors on the short list.

In November 2014, Družba za upravljanje terjatev bank, d. d., (DUTB) as coordinator of the Sales consortium, informed Pivovarna Laško that the major shareholders of Pivovarna Laško had concluded an Agreement on the joint sale of Pivovarna Laško, the sole purpose of which was to ensure their joint participation in the process of the sale of shares in Pivovarna Laško.

On 3 February 2015, after obtaining the Supervisory Board's consent, the Management Board of Pivovarna Laško concluded the Non-Disclosure Agreement and Cooperation Agreement with the members of the Sale consortium. With this agreement, Pivovarna Laško and the members of the Sales consortium regulated the manner of mutual cooperation in the joint process of ensuring the capital increase of Pivovarna Laško and the sale of the shares held by Sales consortium members in Pivovarna Laško.

The Sales consortium is comprised of: Družba za upravljanje terjatev bank, d. d., Kapitalska družba pokojninskega in invalidskega zavarovanja, d. d., Alpen invest, družba za upravljanje investicijskih skladov, d. o. o., Abanka Vipa, d. d., KD Skladi, družba za upravljanje, d. o. o., Nova Kreditna banka Maribor, d. d., Zavarovalnica Triglav, d. d.,


Sklad obrtnikov in podjetnikov and Banka Koper, d. d. The consortium holds a 51.11% stake in Pivovarna Laško.

In the final phase of the joint process of ensuring the capital increase of Pivovarna Laško and the sale of the shares held by Sales consortium members in Pivovarna Laško, Pivovarna Laško received five bids, which it carefully studied and then decided how the negotiations were to continue.

On 13 April 2015, members of the Sales consortium and Heineken International, B. V. concluded the Share Purchase Agreement for the sale of a 51.11% stake in Pivovarna Laško at the price of EUR 25.56 per share, under the suspensive conditions defined in the SPA. Upon signing the Share Purchase Agreement, the buyer Heineken International, B. V. also concluded a Cooperation agreement with Pivovarna Laško, with which the buyer undertakes to ensure the continued financial stability of Pivovarna Laško after the transaction closes, as well as a Shareholder loan agreement.

Signing the sales agreement between the Sales consortium and Heineken International B.V. represents the fulfilment of a significant milestone referred to in the Standstill and Restructuring Agreement, which the Laško Group companies concluded on 30 April 2014 with all 18 creditor banks.

2. The sale of the shares in Radenska

The sale of the shares in Radenska began on 1 September 2013 pursuant to the Restructuring and Standstill Agreement. The sale was carried out in a transparent international two-phase process of public tender for the selection of bids.

On 19 December 2014, Pivovarna Laško as the seller, Kofola, družba za upravljanje d.o.o., as the buyer and Kofola S.A., as the guarantor, concluded an agreement for the sale of 3,812,023 shares in Radenska or a 75.31% stake in Radenska (hereafter: “the Agreement”) subject to several suspensive conditions. On 19 January 2015, the Supervisory Board of Pivovarna Laško gave its consent to the sale of the shares in Radenska. The Supervisory Board's consent is one of the suspensive conditions for the transaction to be finalised.

The sale of the 75.31% equity stake in Radenska was successfully closed on 17 March 2015. From the transaction (disposal of the investment in Radenska), Pivovarna Laško received proceeds amounting to EUR 51,805,392.57. The proceeds significantly contributed to the deleveraging of Pivovarna Laško in accordance with the Standstill and Restructuring Agreement.

On 17 March 2015, Pivovarna Laško received EUR 8,154,000.00 as proceeds from the sale of 600,000 (an equity stake of 11.85%) shares in Radenska, which Pivovarna Laško had temporarily sold to DBS on 30 November 2011. On the same date (17 March 2015), Pivovarna Laško purchased from Radenska 127,928 shares in Delo, Dunajska cesta 5, Ljubljana, thus becoming the 100% owner of Delo and settling the settlement claim of Radenska.

The General Meeting of shareholders of Radenska was held on 17 March 2015 as part of the conclusion of the sale of Radenska. At the General Meeting, the shareholders approved changing the company's articles of association, were briefed on the resignation


of the existing members of the company's Supervisory Board and elected new members of the Supervisory Board.

The sale of the stake in Radenska represents the fulfilment of one of the covenants agreed in the Restructuring and Standstill Agreement.

After the closing of the sale of the stake in Radenska owned by Pivovarna Laško on 17 March 2015, all the denationalisation claims and procedures continue against Radenska, as Pivovarna Laško has not been contractually bound to acquire them. As a result, all the contingent liabilities arising from the above-mentioned denationalisation requests remain with Radenska.

In accordance with the Share purchase agreement for the Radenska shares, Pivovarna Laško purchased the stake in the subsidiary Laško Grupa, Sarajevo held by Radenska. On 5 June 2015, the companies entered into a Share purchase and transfer agreement for a 15.3894% share in the company Laško Grupa, Sarajevo envisaging the transfer of shares from Radenska to Pivovarna Laško, so that after the purchase, Pivovarna Laško has become the holder of an 84.6106% stake in the company's share capital. Pivovarna Union holds the remaining 15.3894% interest.

3. Sale of the shares of Delo, Ljubljana

The sale of the shares in Delo, Ljubljana began on 1 September 2013 pursuant to the Restructuring and Standstill Agreement. The sale of the shares in Delo, Ljubljana was carried out in a transparent international two-phase process of public tender for the selection of bids.

On 3 June 2015, Pivovarna Laško concluded a Share Purchase agreement for the sale of a 100% stake in Delo with the company FMR, financiranje in upravljanje naložb, d. d. The buyer will pay the purchase price in the amount of EUR 7.3 million for a 100% stake in the company Delo. The Agreement was concluded under a number of suspensive conditions which must be fulfilled before the transaction can be finalised. On 15 June 2015, the Supervisory Board of Pivovarna Laško gave its consent to the sale of the shares in Delo, Ljubljana. The Supervisory Board's consent is one of the suspensive conditions for the transaction to be finalised.

On 1 September 2015 the buyer FMR, Financiranje in upravljanje naložb, d.d., Idrija, submitted to Pivovarna Laško resolution no. 3061-12/2015-8 dated 28 August 2015 issued by the Agency of the Republic of Slovenia for the Protection of Competition (CPA) stating that the CPA has no objection to the concentration of the companies FMR, d.d., Idrija and Delo, časopisno in založniško podjetje d.d., Ljubljana as the concentration is consistent with the rules governing competition. The finality of the CPA resolution (approval) represents the fulfilment of the final suspensive condition upon which the validity of the agreement on the sale of the stake in Delo was conditional.

On 18 September 2015, Pivovarna Laško successfully closed the sale of 667,464 DELR shares representing a 100% holding in Delo. For the sale of 667,464 shares or a 100% stake of Delo, on 18 September 2015 the seller Pivovarna Laško received consideration of EUR 7.3 million from the buyer FMR, d. d., Idrija in accordance with the sales agreement. In accordance with the paid consideration, on 18 September 2015, the buyer became the owner of 667,464 DELR shares representing a 100% holding in Delo.


The consideration received contributed to the deleveraging of Pivovarna Laško and represents a further realisation of the repayment of loans from the proceeds of investments in non-core activities under the Restructuring and Standstill Agreement of 30 April 2014 which was signed by 18 creditor banks.

4. Fulfilling the milestones referred to in the Restructuring and Standstill Agreement

At the end of April 2014, Pivovarna Laško and Pivovarna Union (at that time, Radenska was also a member of the Laško Group) signed a Restructuring and Standstill Agreement (hereinafter the Agreement) with all of the 18 creditor banks. The Agreement defines important financial restructuring milestones, whereas final maturity of the majority of the companies’ borrowings was rescheduled to the end of 2016.

In June 2014, the Laško Group successfully realised the first milestone, namely the repayment of loans from the sale of its investment in Mercator. The second milestone, namely the repayment of borrowings from the consideration received for disposal of investments in auxiliary activities, was partly realised in July 2014 and May 2015 by the sale of the investment in Birra Peja and in March 2015 by the repayment of some of the borrowings from the sale proceeds from Radenska. However, since the second milestone was not fully realised by 30 June 2015, and since the third milestone (capital increase) is subject to the Share purchase agreement (SPA) concluded on 13 April 2015 between the Sales consortium and the company Heineken International B.V. Amsterdam, which is subject to certain suspensive conditions, the Laško Group requested the creditor banks waive their right to withdraw from the Agreement and extend the deadline for the repayment of loans from disinvesting the Group's non-core investments and for the capital increase until 31 December 2015.

Since, by 27 May 2015, a sufficient number of banks waived their right to withdrawal from the Agreement due to the non-fulfilment of the second and third milestones and agreed to extend the deadline until 31 December 2015, the Agreement remains valid even after 30 June 2015.

5. Settlement claims of Pivovarna Union and Radenska in accordance with Article 542 of the Companies Act (ZGD-1)

On 23 April 2014, Pivovarna Laško received the letters entitled "Settlement claim pursuant to paragraph 1 of Article 542 of the Companies Act", both dated 22 April 2014 and sent by Pivovarna Union and Radenska. In the letters, the aforementioned companies inform Pivovarna Laško of the unaudited amounts of their settlement claims aimed to cover the losses of both companies generated during the contractual group with Pivovarna Laško as the controlling entity. The unaudited amount of the claim of Pivovarna Union for the period from 11 April to 26 April 2012 amounted to EUR 0 (nil), while the unaudited amount of the claim of Radenska for the period from 6 February to 26 April 2012 amounted to EUR 1,044,183.99. An overview of the calculations was attached to the letters.

On 23 April 2014, Pivovarna Laško replied to the letters of Pivovarna Union and Radenska, informing both companies that it has been informed of their claims. At the


same time, both companies were requested to provide confirmation of the amounts by auditors.

In light of the aforementioned, provisions of EUR 1,044,183.99 have been disclosed in the financial statements of Pivovarna Laško for the financial year ended 31 December 2014.

On 13 February 2015, Pivovarna Laško received from Radenska the letter entitled "Settlement claim pursuant to paragraph 1 of Article 542 of the ZGD-1", which was supplemented with the auditor's report dated 12 February 2015. With this letter, Radenska informed Pivovarna Laško that it received on 11 February 2015 the auditor's report on the audited interim balance sheet for the duration of the contractual group, thus fulfilling all the conditions for the recognition of the amount of the settlement claim. The audited amount of Radenska's settlement claim for the period between 6 February 2012 and 26 April 2012 amounts to EUR 1,044,183.99, as evidenced by the Independent Auditor's Report provided by Deloitte Revizija d.o.o. on 11 February 2015 relating to the audit of the net profit or loss generated in the period between 6 February 2012 and 26 April 2012. In light of the closing of the sale of Radenska, on 17 March 2015 Pivovarna Laško recognised and settled the said audited settlement claim of Radenska in full.

6. Compensatory actions against Atka-Prima / Boško Šrot

In early 2011, compensatory actions were filed at the relevant courts against the defendants Atka-Prima and Boško Šrot, demanding the defendants pay damages to the plaintiffs relating to the damages incurred by the plaintiffs as a result of transactions effected in 2008 and 2009. The following actions were filed: by Pivovarna Laško on 12 January 2011 for the payment of EUR 13,336,488.76 plus costs and interest; by Pivovarna Union for the payment of EUR 51,662,307.74 plus costs and interest; by Radenska, Radenci for the payment of EUR 46,238,893.69 plus costs and interest, by Delo for the payment of EUR 8,003,311.06 plus costs and interest, and by Fructal for the payment of EUR 10,784,720.85 plus costs and interest (the latter were all filed on 15 February 2011). These proceedings are all pending. The Company partially revokes its claims corresponding to the amounts received from the bankruptcy estates of Infond Holding, d. d. – v stečaju and Center Naložbe, d. d. – v stečaju.

On 14 July 2014, Pivovarna Laško received the interim judgement of the Celje District Court in the industrial dispute between Pivovarna Laško as the plaintiff and Atka-Prima, Celje and Boško Šrot as defendants for the payment of EUR 13,336,488.76 plus costs and interest. The court decided that the claim of the plaintiff for damages arising from the transactions or loan agreements concluded in 2009 by the plaintiff and Infond Holding and the plaintiff and Center naložbe, and the sales agreement concluded in 2008 for the purchase of shares in Thermana between Infond Holding as the seller and the plaintiff Pivovarna Laško as the buyer, is justified. At the same time, the court halted the proceedings for the payment made on 24 September 2013 of EUR 89,382.56 from the bankruptcy estate of Infond Holding, d. d. – v stečaju and the payment made on 30 December 2013 of EUR 410,236.03 from the bankruptcy estate of Center naložbe, d. d. - v stečaju. The interim judgement and decision are not yet final.


The defendants appealed against the resolution of the court of first instance concerning the exemption of court fees for the appeal against the judgement. With its resolution served to Pivovarna Laško on 1 April 2015, the Celje High Court decided to stay any decision on the appeal against the court fees until the Constitutional Court of the Republic of Slovenia decides the request of the Celje High Court to assess the constitutionality of paragraph 3, article 12 and paragraph 1, article 21 of the Court Fees Act (ZST-1).

7. Halting the enforcement at the proposal of the Banking Assets Management Company (BAMC)

On 7 April 2015, in the enforcement matter (ref. no. Ig 147/2011) against Pivovarna Laško brought by the creditor Družba za upravljanje terjatev bank, d. d., Ljubljana (the Bank Asset Management Company - BAMC) for the recovery of EUR 7,349,552.25, Pivovarna Laško received the final resolution of the Celje County Court halting the proceedings at the proposal of the creditor (the BAMC).

The creditor BAMC proposed the halting of the enforcement proceedings pursuant to the implementation of the Agreement for the sale and purchase of shares of Radenska, d. d., Radenci agreed by Pivovarna Laško as the seller and Kofola, družba za upravljanje, d. o. o., as the buyer on 8 January 2015 for the sale of 345,304 RARG shares (a 6.82% share of Radenska), which were seized as the subject of the enforcement filed by the BAMC. The proceeds of EUR 4,692,681.36 (EUR 13.59 per share) was paid to the BAMC on 9 April 2015, while the seized shares were transferred to Kofola on 8 April 2015.

This matter actually concerns the enforcement matter in which the court issued on 22 December 2011 its decision allowing the enforcement against 345,304 pledged RARG shares for the payment of EUR 7,349,552.25 (see: Enforcement of NKBM (new creditor BAMC) against Pivovarna Laško). The enforcement related to the agreement on the pledge of book-entry securities concluded on 5 June 2009 between Nova kreditna banka Maribor (NKBM) as the creditor, Center naložbe as the debtor and Pivovarna Laško as the lienor, according to which Pivovarna Laško pledged the shares as collateral for a loan raised by Center naložbe with NKBM. The aforementioned agreement on the pledge of book-entry securities was signed by the former director Boško Šrot on behalf of Pivovarna Laško. On 16 June 2014 the court allowed the BAMC to take the place of the original creditor Nova KBM, Maribor, as the disposal of the underlying claim had resulted in the automatic transfer of the lien from the former to the current creditor.

8. Data on the PILH shares managed by D.S.U., Ljubljana

After the entry into force of the Denationalisation Act (ZDen), 304 denationalisation applications were filed against the company's equity (Pivovarna Laško was then a public company); of these, 286 applications were filed by the former shareholders of Gostilničarska pivovarna, d. d., Laško, while 18 applications were related to the loan the shareholders extended to Gostilničarska pivovarna, d. d. before the Second World War. As a result, during its ownership restructuring, Pivovarna Laško made provisions of 471,284 Pivovarna Laško shares in accordance with the Act. By the time the ownership restructuring was entered into the court register, 295,423 shares had already been returned, while the remaining 175,861 shares were transferred to Slovenska razvojna


družba (currently: D.S.U., d. o. o., Ljubljana). These shares have the PILH ticker symbol. D.S.U. still manages 136,171 PILH shares.

Article 51 of the Act Concluding Ownership Transformation and Privatisation of Legal Entities Owned by the Development Corporation of Slovenia (the ZZLPPO) provides that when the return of shares managed by D.S.U., d. o. o. for the account of denationalisation beneficiaries is rejected by a final judgement since no denationalisation is possible, D.S.U. shall offer the shares to existing shareholders for purchase in the ratio of their existing shareholdings. The value of the shares is determined in accordance with the ZZLPPO.

On 13 April 2015, Pivovarna Laško notified its shareholders via SEOnet that after receiving the letter of D.S.U. dated 11 November 2014, it reviewed, together with its attorneys, the documentation relating to the 304 proceedings brought by denationalisation beneficiaries over the past 20 and more years relating to the shares of Pivovarna Laško, and that, according to the data held by Pivovarna Laško and its attorneys, all the proceedings have been concluded with final decisions. Pivovarna Laško sent the relevant report together with all the decisions to D.S.U. on 23 April 2015.

On 9 June 2015, Pivovarna Laško received notice sent by D.S.U., d.o.o., that due to the fulfilment of its obligations under the terms of the ZZLPPO, it would on 10 June 2015 in the Delo newspaper and on the www.dsu.si and www.perspektiva.si websites publish an Offer for the sale of 126,407 shares in Pivovarna Laško with the PILR ticker symbol held by the company D.S.U., d.o.o. Before their conversion, these shares had the PILH ticker symbol.

D.S.U., d. o. o. also informed Pivovarna Laško that the shareholders of Pivovarna Laško registered at KDD as holders of PILR shares at 8 June 2015 would be entitled to purchase shares, and that detailed instructions on participating in the purchase were included in the Offer.

According to the information of Pivovarna Laško, upon receipt of the notification, of the total 175,861 shares that were transferred to D.S.U., d. o. o., which were at the time of the denationalisation process and until now registered under the ticker symbol PILH, D.S.U., d. o. o., returned 39,690 shares to denationalisation claimants or their heirs on the basis of final decisions, while a further 9,764 shares will be, in accordance with all the above laws transferred directly to Kapitalska družba, d. d.

It is clear from the Offer that the process of public offer for the purchase of PILR shares offered for sale by D.S.U. d. o. o. was open until 26 June 2015.

9. General Meeting of Shareholders of Pivovarna Union

The General Meeting of Shareholders of Pivovarna Union was held on 20 April 2015. Of the total 451,114 shares (451,045 with voting rights), 444,455 votes were present, representing 98.54% of all shares with voting rights.

The General Meeting was briefed on the audited Annual Report of the Union Group and Pivovarna Union for 2014, the Report of the Supervisory Board on its verification of the Annual Report, and the Report of the Supervisory Board on its verification of the Management Board's report on transactions with related parties.


The shareholders decided to distribute EUR 11,727,170 of the company's profit, which stands at EUR 12,053,414.25 as at 31 December 2014, as dividends to the shareholders (EUR 26 per share), while the remaining EUR 326,244.25 shall remain unallocated.

The General Meeting approved the work of the Management and Supervisory Boards and granted them discharge for 2014. The General Meeting appointed Mr Vladimir Malenkovič, Mr Goran Brankovič and Mr Bojan Cizej as members of the Supervisory Board (capital representatives) for a term of 4 years, beginning on 23 June 2015. The General Meeting appointed the audit firm Ernst & Young, Ljubljana as the auditor of the company's 2015 financial statements.

The minutes of the General Meeting are available from the company's website: www.pivo-union.si.

10. General Meeting of Shareholders of Pivovarna Laško

On 19 June 2014, the 23rd General Meeting of Shareholders of Pivovarna Laško was held. The General Meeting was briefed on the audited Annual Report for 2014 and the Report of the Supervisory Board on its verification of the Annual Report, on the cover of net loss, on the remuneration of the Management and Supervisory Board members and granted discharge to the Management Board and the Supervisory Board. The General Meeting appointed the audit firm Ernst & Young, Ljubljana as the auditor of the company's 2015 financial statements.

The General Meeting was also briefed on the joint process of ensuring the capital increase of Pivovarna Laško and the sale of the shares held by the Sales consortium in Pivovarna Laško.

The resolutions of the General Meeting were published on the SEOnet portal and on the Company's website www.pivo-lasko.si on 19 June 2015. The minutes of the General Meeting and appendices thereto are available on the website of AJPES (Business register of Slovenia).

11. Appointment of the Supervisory Board members of Pivovarna Laško – employee representatives

The Workers' Council of Pivovarna Laško appointed Ms Dragica Čepin and Ms Nataša Kočar as members of the Supervisory Board (employee representatives) for a term of office of four years, beginning on 7 April 2015. The term of office of Mr Bojan Cizelj and Ms Dragica Čepin as members of the Supervisory Board (employee representatives) expired on 6 April 2015. On 13 April 2015, Ms Dragica Čepin was appointed Deputy Chairwoman of the Supervisory Board, while Ms Nataša Kočar was appointed member of the Audit Committee.

12. Notice of the conditional resignation of members of the Supervisory Board of Pivovarna Laško (capital representatives)

On 23 April 2015, Pivovarna Laško received from Družba za upravljanje terjatev bank, d. d., (DUTB) as coordinator of the consortium of sellers of the stake in Pivovarna Laško, notice that it had received the resignation letters of Goran Brankovič, Janez Škrubej, Peter Groznik and Jože Bajuk, who resigned from the Supervisory Board of Pivovarna


Laško with legal effect from the date and under the condition that all sales conditions are fulfilled and that the sale will close in accordance with the PILR share purchase agreement concluded on 13 April 2015 between the consortium of sellers and Heineken International, B. V., Amsterdam.

13. Acquisition of shares by the Management Board members and the Supervisory Board members in the process of the public offer by D.S.U, d. o. o.

In the process of the public offering for the purchase of PILR shares published by D.S.U. on 10 June 2015 in the Delo newspaper and on the websites of the D.S.U. and the Perspektiva stock brokers, on 30 June 2015 the following members of the Management Board and the Supervisory Board acquired the following number of shares at a price of EUR 15.74 per share:

Dušan Zorko, CEO of Pivovarna Laško, acquired 47 PILR shares and currently holds a total of 3,066 PILR shares, representing 0.0350% of the voting rights of all shares in the share capital of the issuer,

Mirjam Hočevar, member of the Management Board of Pivovarna Laško, acquired 35 PILR shares and currently holds a total of 2,279 PILR shares, representing 0.0261% of the voting rights of all shares in the share capital of the issuer,

Matej Oset, member of the Management Board of Pivovarna Laško, acquired 35 PILR shares and currently holds a total of 2,766 PILR shares, representing 0.0316% of the voting rights of all shares in the share capital of the issuer,

Marjeta Zevnik, member of the Management Board of Pivovarna Laško, acquired 35 PILR shares and currently holds a total of 2,282 PILR shares, representing 0.0261% of the voting rights of all shares in the share capital of the issuer,

Dragica Čepin, member of the Management Board of Pivovarna Laško, acquired 53 PILR shares and currently holds a total of 3,466 PILR shares, representing 0.0396% of the voting rights of all shares in the share capital of the issuer.

14. The Supervisory Board of Pivovarna Union elects its own Chairman and Deputy Chairman among its members

At its constitutive meeting on 8 July 2015, the Supervisory Board of Pivovarna Union elected Dr. Vladimir Malenkovič, capital representative, as its Chairman and Terezija Peterka, employee representative, as its Deputy Chairwoman.

15. Cen Adria, d. o. o. – v stečaju, Matulji (Republic of Croatia)

In 2006 Pivovarna Laško filed an application for enforcement against Cen Adria, Matulji, demanding payment of outstanding invoices totalling Kn 857,292.53 (Euro equivalent of 114,764.73) including costs and interest. Cen Adria appealed against the enforcement ruling and currently the case is proceeding in the same way as in the case of an appeal against a payment order in contentious proceedings. In 2006, during the above proceedings, Cen Adria filed a counter action against Pivovarna Laško and Jadranska pivovara - Split, Vranjic, demanding payment of damages totalling Kn 25,000,000.00 (Euro equivalent of approx. 3,346,720.21), which Cen Adria allegedly


incurred due to the early termination of the Business Cooperation Agreement (Ugovor o poslovnoj suradnji).

In 2012, bankruptcy proceedings were instigated against Cen Adria.

In the case of Pivovarna Laško against Cen Adria, d. o. o. - v stečaju, Pivovarna Laško received the judgement of the court of first instance on 8 November 2013 affirming the claim awarding Pivovarna Laško the total amount of Kn 1,688,990.71 (EUR 221,361.82). Cen Adria appealed the judgement.

In the case brought by the applicant Cen Adria, d. o. o. - v stečaju, against the defendants Pivovarna Laško and Jadranska pivovara - Split, for damages in the amount of kn 25,000,000.00 (EUR 3,346,720.21), on 10 July 2015 Pivovarna Laško received the judgement in which the court of first instance rejected the entire claim of Cen Adria, d. o. o. - v stečaju as the plaintiff. Cen Adria appealed the judgement which is thus not yet final. Pivovarna Laško and Jadranska pivovara - Split responded to the appeal on 27 August 2015.

16. Consensual termination of the Management Board member's mandate

The Supervisory Boards of Pivovarna Laško and Pivovarna Union agreed with Gorazd Lukman, Management Board member for the commercial department, an early termination of office in both companies as at 31 July 2015. The Supervisory Boards of Pivovarna Laško and Pivovarna Union confirmed the Consensual Agreement on termination of the mandate at conference calls held on 17 July 2015.

17. Halting the investigation proceedings against Boško Šrot, the former director, and the legal entity Pivovarna Laško, both as the accused

On 28 August 2015, Pivovarna Laško received the decision of the Investigation Department of the District Court in Ljubljana, ref. no. IV CPR 53791/2010, with which the court halted the investigation against the four accused individuals, including Boško Šrot, the former director of Pivovarna Laško, and the two accused legal persons, one of which was Pivovarna Laško, for the offence of fraud under II. in connection with the first paragraph of Article 217 in connection with Article 25 of the Criminal Code of the Republic of Slovenia and in relation to point 3, paragraph I of Article 4 of the Act on the liability of legal persons for offences.

The accused Boško Šrot was alleged to have committed the offence as the person authorised to sign the contract on behalf of Pivovarna Laško, in 2005 after the purchase of 440,891 shares of Mercator (MELR ticker symbol) from SOD. The accused legal person Pivovarna Laško was allegedly responsible for the action perpetrated by the responsible person in this way and circumstances since it was done for the benefit of Pivovarna Laško, which thus obtained an unlawful pecuniary benefit at least equal to SIT 1,984,009,500.00 or EUR 8,279,124.93.


18. Cessation of the membership of a member of the Audit Committee of the Supervisory Board of Pivovarna Laško, d. d.

At its session, the Supervisory Board established that as of 28 September 2015, pursuant to paragraph I of Article 280 of the Companies Act, Nataša Kočar ceased to be a member of the Audit Committee of the Supervisory Board. SUBSEQUENT EVENTS

1. Decision of the CPA on the compatibility of the concentration of Heineken International B.V., Amsterdam, and the company Pivovarna Laško, with the rules of competition, providing certain remedial measures are implemented

On 6 October 2015, Pivovarna Laško received from Heineken International B.V. the decision of the Public Agency of the Republic of Slovenia for the Protection of Competition (CPA), no. 3061-7/2015-10 dated 2 October 2015, in which it decided that it does not object against the concentration of Heineken International B.V., Amsterdam, which is controlled by Heineken N.V., Amsterdam, and Pivovarna Laško, d.d., Trubarjeva 28, Laško, since the concentration is consistent with the rules of competition, provided the corrective measures referred to in point 2 of the decision relating to the use of refrigerator cabinets in catering establishments in the Republic of Slovenia are fulfilled.

2. Acquisition of a substantial share by Heineken International B.V., Amsterdam

On 15 October 2015, Heineken International, B. V., Amsterdam informed Pivovarna Laško that on 15 October 2015 the former acquired 4,673,941 shares of the issuer Pivovarna Laško, delniška družba (hereinafter: the issuer) with the PILR ticker symbol, with which Heineken gained a material (over 50%) share in the issuer. It acquired the corresponding share pursuant to the Share sale and purchase agreement (SPA) concluded on 13 April 2015 after the fulfilment of the suspensory conditions agreed upon in the SPA. The number of acquired shares is greater than was stated in the notice of 16 April 2015 due to the fact that certain sellers exercised their right to, in accordance with the SPA, sell to Heineken additional PILR shares acquired after signing the SPA.

After the closing of the transaction (payment of the consideration to the sales consortium in accordance with the SPA), Heineken became the holder of 4,673,941 shares of the issuer with the PILR ticker symbol, representing 53.43% of all issued shares.

3. Entry into force of the resignations of the Supervisory Board members of Pivovarna Laško and Pivovarna Union

On 15 October 2015, the resignations of members of the Supervisory Board of Pivovarna Laško, as shareholders' representatives, namely Goran Brankovič, Janez Škrubej, Peter Groznik and Jože Bajuk, as chairman and members of the Supervisory Board of Pivovarna Laško, came into effect.

The letters of resignation came into legal effect on the date of entry into force of the Share sale and purchase agreement (SPA) concluded on 13 April 2015 between the consortium of sellers and the buyer Heineken International, B.V., Amsterdam, which


was on 15 October 2015 with the completion of the sale of 4,673,941 PILR shares or a 53.43% stake in Pivovarna Laško.

On 15 October 2015, the letters of resignation of the members of the Supervisory Board of Pivovarna Union - shareholder representatives Vladimir Malenković, Goran Brankovič and Bojan Cizej, came into effect.

4. Receipt of a loan provided by Heineken International B.V., Amsterdam and repayment of the loans of Pivovarna Laško to the creditor banks

On 15 October 2015, Pivovarna Laško received from its new majority owner Heineken International, B. V., Amsterdam a long-term loan in the amount of EUR 141,489,909. The loan was used in its entirety to repay all existing loans of Pivovarna Laško to all creditor banks.

5. Notice of Heineken International B.V., Amsterdam of its takeover intent

On 20 October 2015, Pivovarna Laško, received from the company Heineken International, B. V., Tweede Weteringplantsoen 21, Amsterdam, The Netherlands (hereinafter: the acquirer), through the authorised member ILIRIKA borzno posredniška hiša, d. d., Ljubljana its notification pursuant to Article 24 of the Takeovers Act that it intended to publish a takeover bid for the purchase of shares of the company Pivovarna Laško, delniška družba, Trubarjeva 28, 3270 Laško (hereinafter: Pivovarna Laško, or the target company). The acquirer published the takeover intent in the DELO newspaper on 20 October 2015. The acquirer informed us that it intends to publish a takeover bid for the purchase of all the shares of Pivovarna Laško.

On the date of publication of the takeover bid, the acquirer already held 4,673,941 shares of the target company with the PILR ticker symbol, representing 53.43% of all issued shares of the target company (Pivovarna Laško is the issuer of 8,747,652 PILR shares).

In its takeover intent, the acquirer that, no later than within 30 days and not earlier than within 10 days after the publication of the takeover intent, it will publish a takeover bid for all shares of the target company not yet owned by the acquirer.

6. Fulfilling the milestones referred to in the Restructuring and Standstill Agreement

On 29 October 2015, Pivovarna Laško received from its new majority owner Heineken International, B. V., Amsterdam a long-term loan in the amount of EUR 44,320,349.08. The loan was used in its entirety to repay all existing loans of Pivovarna Union to all creditor banks.

This repayment resulted in the early fulfilment of the milestones defined in the Restructuring and Standstill Agreement (hereinafter: Agreement) concluded on 30 April 2014 with all 18 creditor banks. With the repayment of all existing loans of Pivovarna Laško on 15 October 2015 and the repayment of the existing loans of Pivovarna Union on 29 October 2015, all the milestones set out in the Agreement have been met; at the same time, the Agreement has also ceased to apply.


7. General Meeting of Pivovarna Laško

The General Meeting of the Shareholders of Pivovarna Laško was convened on 9 October 2015 at the request of the shareholder Družba za upravljanje terjatev (DUTB). The General Meeting was held on 12 November 2015 and adopted amendments to the company's Memorandum of association. After registration of the changes with the court register, the potential number of Management Board members shall increase to a maximum of seven (instead of five) and the provisions of the Memorandum of association, which provides that the Management Board members are appointed at the proposal of the Chairman of the Management Board. The General Meeting also adopted a provision on the competition clause, namely that the members of the management or supervisory bodies of the company Heineken N.V., Amsterdam or employees of that company or its subsidiaries can be members of the Management Board and the Supervisory Board, even if they are or could be in competition with the company's activity. In accordance with the provisions of Article 41 of the Companies Act governing non-competition, this shall provide the legal basis for the election of such persons to the Management and Supervisory Board of Pivovarna Laško.

The General Meeting noted that the members of the Supervisory Board - shareholder representatives Goran Brankovič, Peter Groznik, Jože Bajuk and Janez Škrubej resigned from their positions as Supervisory Board members, which came into force on the date of entry into force of the Agreement ("Completion") on the sale of shares of Pivovarna Laško concluded between the consortium of sellers and Heineken International B.V., Amsterdam, on 13 April 2015. The General Meeting elected the following new Supervisory Board members as shareholder representatives with a term of 4 years, commencing from the date after their election at the General Meeting or on the day following the entry into the register: Marta Natala Bulhak, Lucas Antonius van Haastrecht, Dimitar Alexiev Dimitrov and Markus Alfred Liebl, representing the buyer Heineken International B.V., Amsterdam.

The resolutions of the General Meeting were published on the SEOnet portal and on the company's website www.pivo-lasko.si on 12 November 2015. The minutes of the General Meeting and appendices thereto as well as the clean copy of the Memorandum of association, are available on the website of AJPES (Business register of Slovenia). The clean copy of the Memorandum of association is also available from the company's website: www.pivo-lasko.si.

8. General Meeting of Shareholders of Pivovarna Union

The General Meeting of the Shareholders of Pivovarna Union was convened on 9 October 2015 at the request of the shareholder Pivovarna Laško. The General Meeting was held on 12 November 2015 and adopted amendments to the company's Memorandum of association. After registration of the changes with the court register, the potential number of Management Board members shall increase to a maximum of seven (instead of five) and the provisions of the Memorandum of association, which provides that the Management Board members are appointed at the proposal of the Chairman of the Management Board. The General Meeting also adopted a provision on the competition clause, namely that the members of the management or supervisory bodies of the company Heineken N.V., Amsterdam or employees of that company or its subsidiaries can be members of the Management Board and the Supervisory Board, even


if they are or could be in competition with the company's activity. In accordance with the provisions of Article 41 of the Companies Act governing non-competition, this shall provide the legal basis for the election of such persons in the Management and Supervisory Board of Pivovarna Union.

The General Meeting noted that the members of the Supervisory Board - shareholder representatives Vladimir Malenković, Goran Brankovič and Bojan Cizej resigned from their positions of Supervisory Board members, which came into force on the date of entry into force of the Agreement ("Completion") on the sale of shares of Pivovarna Laško concluded between the consortium of sellers and Heineken International B.V., Amsterdam, on 13 April 2015. The General Meeting elected the following new Supervisory Board members as shareholder representatives with a term of 4 years, commencing from the date after their election at the General Meeting or on the day following the entry into the register: Lucas Antonius van Haastrecht, Dimitar Alexiev Dimitrov and Markus Alfred Liebl, representing the buyer Heineken International B.V., Amsterdam.

The minutes of the General Meeting and clean copy of the Memorandum of association are available from the company's website: www.pivo-union.si.

9. Notice of Heineken International B.V., Amsterdam of its takeover bid

On 17 November 2015, Pivovarna Laško, received from the company Heineken International B.V., Amsterdam, Netherlands (hereinafter: the acquirer), through the authorised member ILIRIKA borzno posredniška hiša, d. d., Ljubljana its notification that it had published a takeover bid and prospectus for the purchase of shares of the company Pivovarna Laško, delniška družba, Trubarjeva 28, 3270 Laško (hereinafter: Pivovarna Laško, or the target company) pursuant to the decision of the Securities Market Agency dated 10 November 2015, No. 40201-14/2015-7.

The bid was submitted by ILIRIKA borzno posredniška hiša, d. d., Ljubljana, in the name and for the account of the acquirer and published in the DELO newspaper on 17 November 2015. The takeover prospectus is published on the website of ILIRIKA borzno posredniška hiša, d. d., at www.ilirika.si.

The takeover bid relates to 8,747,652 shares of the target company with the PILR ticker symbol which are ordinary freely transferable no par-value shares of the same class with voting rights, issued in dematerialized form, registered with the KDD, less the 4,673,941 PILR shares already owned by the acquirer, for a total of the remaining 4,073,711 PILR shares not owned by the acquirer.

Pursuant to the takeover bid, the acquirer has offered a price of EUR 25.56 for each share of the target company with the PILR ticker symbol to purchase all the shares which are the subject of the takeover bid. The acquirer has offered to pay the total price of the shares of the target company subject to the takeover bid in cash.

The takeover bid is valid from 18 November 2015 (inclusive) up to and including 15 January 2016 at 12 noon, unless the bid validity is extended in accordance with the Takeovers Act.


The other points/conditions of the takeover bid (the success threshold, the mandatory resolutory condition, the fulfilment of obligations in a successful takeover bid, the legal consequences of a failed takeover bid, other important facts regarding the takeover bid, the stock brokering company or bank issuing the bid in the name and for the account of the acquirer, submitting the declaration of acceptance of the bid and availability of the prospectus) are laid out in the takeover bid published in the DELO newspaper on 17 November 2015.

10. Conclusion of the court settlement with the company MIP, d. o. o., Gornji vakuf, Bosnia and Herzegovina

Pivovarna Laško had two civil proceedings pending with the company MIP, d. o. o., Gornji Vakuf, Bosnia and Herzegovina.

On 25 September 2012, Pivovarna Laško filed an action against MIP, d. o. o. demanding payment of EUR 200,975.51 plus costs and interest due to the failure to pay for the goods that Pivovarna Laško sold and supplied to the defendant, as well as the payment of EUR 245,316.75 plus costs and interest due to packaging not returned, for a total of EUR 446,292.26 plus costs and interest. On 19 November 2014, the action was partially revoked for the amount of EUR 245,316.76 relating to packaging, as the plaintiff returned all packaging.

On 21 March 2013 we received from the Celje District Court the action of MIP, d. o. o., Gornji Vakuf, for the payment of EUR 1,135,481.43 plus costs and interest. In the action, the plaintiff demands the payment of damages for loss of income of EUR 1,085,481.43 alleged to have arisen as a result of the unlawful withdrawal of Pivovarna Laško from the sales agreement, as well as damages for the loss of reputation in the amount of EUR 50,000.00.

On 17 November 2015, the litigating parties concluded a court settlement in both civil cases (commercial disputes). Thus, both civil proceedings (commercial disputes) are now closed.


3 FINANCIAL REPORT

3.1 Consolidated financial statements

Consolidated income statement of the Laško Group for the period 1 January 2015 to 30 September 2015

(in EUR) I.-IX./2015 I.-IX./2014

Continued operationsNet sales revenues 136,202,121 133,345,815Change in inventories of products and work in progress 934,565 558,485Other operating revenue 2,820,878 1,317,716Costs of goods, materials and services (89,192,174) (85,323,912)Employee benefit costs (19,043,873) (17,913,006)Amortisation of intangible assets and depreciation of property, plant and equipment (7,419,084) (7,277,013)Revaluation operating expense (21,971,713) (674,662)Long-term provisions (2,950,000) -Other operating expenses (4,861,777) (3,603,782)

OPERATING PROFIT OR LOSS (5,481,057) 20,429,641

Financial income 789,018 2,986,230Financial expenses (8,081,688) (12,387,077)

PROFIT OR LOSS BEFORE TAX (12,773,727) 11,028,794

Tax (1,686,928) 299,976

NET PROFIT OR LOSS OF THE YEAR FROM CONTINUED OPERATIONS (14,460,655) 11,328,770

Discontinued operationJadranska pivovara Split, Birra Peja Kosovo, Radenska, Delo 1,363,525 1,376,755

NET PROFIT OR LOSS OF THE YEAR FROM DISCONTINUED OPERATIONS 1,363,525 1,376,755

TOTAL PROFIT OR LOSS FOR THE YEAR (13,097,130) 12,705,525

Share of non-controlling interests in net profit /loss 190,458 315,261Share of the controlling interests in net profit /loss (13,287,588) 12,390,264


Consolidated statement of financial position of the Laško Group at 30 September 2015

(in EUR) 30 Sep 2015 31 Dec 2014

ASSETS

Non-current assets 192,902,775 238,353,317Intangible assets 63,014,832 64,896,312Property, plant and equipment 97,641,129 133,339,070Investment property 2,242,724 4,229,545Long-term investments in the subsidiaries 240,667 204,792Financial assets available for sale 460,298 982,066Long-term financial lease receivables 41,466 518,013Long-term loans 278,145 2,324,548Long-term operating receivables 2,433,483 2,090,927Long-term deferred tax assets 26,550,031 29,768,044

Short-term assets less short-term deferred and accrued items 74,652,141 112,832,944Non-current assets held for sale 5,059,198 42,427,045Inventories 17,285,895 17,224,526Short-term operating receivables 46,009,512 42,607,067Short-term receivables for excess corporate tax payment - 1,465,456Financial assets available for sale 2,673,550 2,673,549Short-term loans 1,347,212 1,245,512Cash and cash equivalents 2,276,774 5,189,789

Short-term accruals and prepaid expenditure 889,975 987,085

Total short-term assets 75,542,116 113,820,029

TOTAL ASSETS 268,444,891 352,173,346


Consolidated statement of financial position of the Laško Group at 30 September 2015

(continuation)

(in EUR) 30 Sep 2015 31 Dec 2014

EQUITY 38,570,321 62,289,213

Equity of the owners of non-controlling stake 2,139,697 10,661,619

Equity of the owners of the controlling stake 36,430,624 51,627,594Share capital 36,503,305 36,503,305Share premium 2,566,995 2,566,995Profit reserves 3,650,331 3,650,331Revaluation surplus 5,248,639 5,124,893Retained earnings 1,720,420 384,294Net profit or loss (13,284,588) 3,377,636Translation reserve 25,522 20,140

LIABILITIES 229,874,569 289,884,133

Provisions and long-term accrued costs and deferred revenue 6,561,444 10,152,264Provisions for retirement grants and jubilee awards 3,452,017 5,746,253Other provisions 2,950,000 4,209,804Long-term accrued costs and deferred revenue 159,427 196,207

Long-term liabilities 5,976,371 105,734,931Long-term financial liabilities 1,869,037 105,734,931Long-term operating liabilities 4,107,334 -

Short-term liabilities 211,075,295 167,827,303Liabilities included in the disposals group 197,837 9,709,058Short-term operating liabilities 30,695,416 35,463,263Short-term financial liabilities 180,182,042 122,654,982

Short-term accrued costs and deferred income 6,261,459 6,169,635

Total short-term liabilities 217,336,754 173,996,938

TOTAL EQUITY AND LIABILITIES 268,444,891 352,173,346


Consolidated cash flow statement of the Laško Group for the period 1 January 2015 to 30 September 2015

(continued and discontinued operations)

(in EUR) I.-IX./2015 I.-IX./2014

OPERATING PROFIT (13,097,130) 12,705,525Adjustments for:Depreciation of PPE and investment property 7,250,568 10,750,407Amortisation of intangible assets 168,516 746,100Revaluation operating expense from non-current assets 24,365,056 553,532Revaluation operating expense from current assets 244,553 399,099Net movements in provisions (1,264,216) (290,429)Financial income (904,394) (3,374,618)Financial expences 8,446,028 13,401,621Deferred tax 1,768,378 1,841,094

Total adjustments 40,074,489 24,026,806

MOVEMENTS IN WORKING CAPITALInventories and non-current assets held for sale (1,241,180) (3,180,535)Operating and other receivables (7,107,266) (6,907,958)Operating and other liabilities 10,170,039 10,778

Total movements in working capital 1,821,593 (10,077,715)

NET CASH FLOWS FROM OPERATING ACTIVITIES 28,798,952 26,654,616

Cash flows from operating activitiesCash from operating activities 28,798,952 26,654,616

OFFSETTING CASH FLOWS FROM OPERATING ACTIVITIES 28,798,952 26,654,616

Cash flows from investing activities Acquisition of property, plant and equipment (9,466,598) (11,977,040)Acquisition / disposal of intangible assets 10,238 41,972Acquisition / disposal of financial assets 2,010,880 80,536,306Acquisition / disposal of non-current assets held for sale 37,322,861 -- of which cash flow from the sale of the company BP - 2,033,431Interest income 545,037 201,171Dividends and capital profits received 359,357 3,173,447

NET CASH FLOWS FROM INVESTING 30,781,775 71,975,856

Cash flows from financing activity Interest paid (8,396,844) (13,401,621)Capital increase (8,309,950) 421,319Increase / decrease in financial debt (44,096,331) (87,243,338)Dividends paid to the owners (223,444) (43,533)

NET CASH FLOWS FROM FINANCING (61,026,569) (100,267,173)

NET INCREASE / DECREASE IN CASH AND CASH EQUIVALENTS

(1,445,842) (1,636,701)

Cash and cash equivalents at the beginning of year 3,722,616 2,974,550Cash and cash equivalents at 30 September 2015 2,276,774 1,337,849


3.2 Notes to the consolidated financial statements

Performance analysis of the Laško Group

Data on operations (continued and discontinued operations)

Accounting policies

The same accounting policies were applied in 2015 as in previous years. The accounting policies are presented in detail in the Annual Report of the Laško Group for the 2014 financial year, which was published on SEOnet, the website of the Ljubljana Stock Exchange, on 20 April 2015.

The consolidated financial statements drafted for the first nine months of 2015 have not been audited and have been drafted in accordance with provisions relating to the measurement and recognition as provided by International Financial Reporting Standards (IFRS), and should be read in conjunction with the annual financial statements drafted for the financial year ended 31 December 2014. Disclosures to individual items of the consolidated income statement

of Laško Group for the period 1 January to 30 September 2015

a.) Profit or loss from operations (continued operations)

The total operating profit or loss of the Laško Group relates to the continued operations, including the companies of the Laško Group that were sold either this year of last year. The results of the latter were recognised as the profit or loss from discontinued

(in EUR) I.-IX./2015 I.-IX./2014 Plan I.-XII./2015

Net sales revenues 172,489,143 197,093,216 205,006,564

EBIT -3,787,118 24,573,622 23,567,245Normalised EBIT 24,309,461 25,433,568 22,114,804

EBITDA 4,913,028 36,070,129 36,114,988

Normalised EBITDA 33,009,607 36,930,075 34,662,547Net interest expense1 -7,408,771 -12,109,233 -9,207,913

Net profit or loss -13,097,130 12,705,525 10,928,823

Normalised earnings or loss 16,526,332 14,677,887 9,476,382

Return on equity (ROE)2 30.5 % 24.1 % 18.2 %Return on assets (ROA)3 5.2 % 3.5 % 2.5 %

EBIT margin4 14.6 % 13.2 % 11.2 %

EBITDA margin5 19.9 % 19.2 % 17.5 %

1 Interest income - interest expense2 Normalised net earnings or loss / average equity in the period3 Normalised net earnings or loss / average assets in the period4 Normalised EBIT / net revenue from the sale of products and services5 Normalised EBITDA / net revenue from the sale of products and services


operations in compliance with IFRS 5. For comparative purposes, the operating results of the financial year 2014 have been appropriately modified.

In mid-2014, the company Birra Peja, Sh. a., Peć Kosovo was sold. As a result, the comparable data for discontinued operations include its operating results for the first six months of 2014. In March 2015, the company Radenska was sold, as was the company Delo in September 2015. The results of both companies were recognised in the profit or loss from discontinued operations. Comparable data for 2014 include the operating results for the entire period of the first nine months, while in 2015 the consolidated income statement includes the results of the company Radenska for the first three months and the results of the company Delo for the first nine months, and are thus comparable with the previous year. In addition to these companies, the operating result from discontinued operations includes the profit or loss of the company Jadranska pivovara, Split.

In the first nine months of 2015, net sales revenues from continued operations amounted to EUR 136.2 million, which is EUR 2.9 million or 2.1% more than in the same period of the previous year. On the domestic market, the Group generated EUR 106.6 million of net sales revenues, which is EUR 3.6 million or 3.5% more than in the same period of the previous year. In the first nine months of 2015, net sales revenues from sales on foreign markets amounted to EUR 29.7 million, which is EUR 0.7 million or 0.3% less than in the same period of the previous year. Revenues achieved on the local market account for 78.2% of total revenues, while revenues earned on foreign markets account for 21.8% of total sale revenues. In the first nine months of 2015, the share of net sales revenues generated on export markets fell by 1% compared to the same period of the previous year.

In the first nine months of 2015, operating expenses from continued operations amounted to EUR 145.4 million, up EUR 30.6 million or 26.7% on the same period of last year. The increase in operating expenses of EUR 21.1 million is the result of the revaluation of the properties of Pivovarna Laško and Pivovarna Union as at 30 September 2015 to lower fair values. In the comparable previous period, no revaluation of real estate had been carried out. Due to this, the structure of operating expenses has changed slightly compared to the comparable period of 2014, while other categories of operating expenses in both periods are comparable.

Costs of materials and power supply account for most of the operating expenses (34.5%), followed by costs of services (24.1%), revaluation operating expenses on the revaluation of properties and investment properties (15%), labour costs (13.1%), depreciation and amortisation (5.1%), costs of goods and materials sold (2.7%) and other operating expenses (3.3%). Compared to the same period of 2014, costs of materials are down EUR 2.5 million, costs of services are up by EUR 4.5 million, and costs of goods and materials sold increased by EUR 1.8 million. Depreciation and amortisation costs are about the same as in the comparable previous period. Labour costs increased by EUR 1.1 million, provisions by EUR 2.6 million, and other operating expenses by EUR 1.3 million.

In the period from January to September 2015, the Laško Group (without Radenska, Delo and Jadranska pivovara) generated an operating loss of EUR 5.5 million (EBIT) from continued operations, while in the comparable period of 2014 it generated an operating profit of EUR 20.4 million. Normalised EBIT, calculated from operating profit


increased or decreased by the impact of one-off business events, amounts to EUR 19.9 million for the first nine months of 2015 and is down EUR 1.4 million on the normalised EBIT recorded in the comparative period of 2014.

In the first nine months of 2015, the Laško Group generated EUR 1.9 million of EBITDA from continued operations, down from EUR 27.7 million in the same period of last year. The normalised EBITDA from continued operations of the period amounts to EUR 27.4 million, compared to EUR 28.7 million generated in same period of 2014.

b.) Profit or loss from financing (continued operations)

In the first nine months of 2015, the Group generated a net financing loss of EUR 7.2 million, mainly on account of financial expenses for interest on bank loans. In the period in question, net financial expenses for interest amounted to EUR 7.5 million, which is EUR 4.8 million less than in the comparable period of 2014.

c.) Net profit or loss (continued operations)

In the first nine months of 2015 the Laško Group generated EUR 14.5 million of net losses from continued operations. The normalised net operating profit of the Laško Group for the first nine months equals EUR 15.2 million, which is EUR 1.9 million more than in the comparable period of last year.

d.) Profit or loss from discontinued operations

The profit or loss from discontinued operations includes the profit or loss of companies no longer in the Laško Group or companies which are no longer accounted for as part of continued operations in accordance with IFRS 5. Discontinued operations include the profit or loss of Radenska, Delo, Jadranska pivovara - Split and Birra Peja generated in the first six months of 2014. In the first nine months of 2015, the Laško Group generated EUR 1.4 million of net profit from discontinued operations, which is roughly equal to the profit generated in the comparable period of 2014. Disclosures to the consolidated statement of financial position

of the Laško Group at 30 September 2015

The consolidated statement of financial position as at 30 September 2015 does not contain the net assets of Radenska and Delo due to the sale thereof. The assets of Radenska were as at the last day of 2014 reported as non-current assets of disposal groups and current liabilities of disposal groups. Due to the uncertainty surrounding the disposal of Delo, the assets and liabilities of Delo were disclosed under individual items of the statement of financial position as at 31 December 2014, due to which the data as at 30 September 2015 is not comparable with the data as at the last day of 2014.

a.) Intangible assets

Intangible assets as at 30 September 2015 amount to EUR 63 million and include the value of Pivovarna Union brands (EUR 46.5 million), the value of goodwill relating to the investment in Pivovarna Union (EUR 15.8 million) and other intangible assets amounting to EUR 0.7 million). The remaining intangible assets represent material rights, computer software, licences, etc. In the first nine months of 2015, the value of intangible assets fell on account of amortisation of EUR 0.2 million. The value of the


brands and goodwill relating to the investment in Pivovarna Union were not appraised as at 30 September 2015 as no signs of impairment exist.

b.) Property, plant and equipment

The balance of property, plant and equipment of EUR 97.6 million as at 30 September 2015 was down by EUR 35.7 million compared to the first nine months of last year. Part of this reduction relates to the disposal of Delo, whose property, plant and equipment amounted to EUR 15.5 million as at 31 December 2014. Upon disposal the value of property, plant and equipment of the company fell by EUR 2.6 million on account of revaluation to the new realisable values. The value of property, plant and equipment fell on account of depreciation of EUR 7.3 million and on account of the revaluation of real estate to lower fair values of EUR 23.6 million.

An assessment of the property held by all Laško Group companies was made as at 30 September 2015 by a certified property appraiser, registered with the Slovenian Institute of Auditors. The most recent previous property appraisal was made as at 31 December 2013. Based on the property assessment made for the purpose of financial reporting in accordance with IAS 16, the value of land fell by EUR 15.4 million, the value of buildings by EUR 7.3 million and the value of pending investments by EUR 0.9 million in the first nine months of 2015. The effect of revaluation to a lower fair value amounting to EUR 21.7 million was recognised by the Group as an item of operating expenses from revaluation; the effect of revaluation to lower fair values to EUR 2.4 million resulted in an increase of revaluation surplus, while the Group generated other operating revenue of EUR 0.5 million. In accordance with its accounting policy, the Group eliminated the total accumulated depreciation of property up to the date of revaluation and debited the original cost.

In the first nine months of 2014, the Group's property, plant and equipment grew on account of new acquisitions inclusive of advances paid for acquisition of property, plant and equipment amounting to EUR 13.3 million. New acquisitions mainly refer to purchases of production equipment, packaging and marketing equipment.

c.) Long-term available-for-sale financial assets

Compared to the first nine months of 2014, the value of long-term available-for-sale financial assets decreased by EUR 0.1 million on account of the sale of shares in Skupna pokojninska družba and amount to EUR 0.5 million as at 30 September 2015.

d.) Long-term investments in the subsidiaries

The long-term financial investments in subsidiaries include investments in unconsolidated subsidiaries. There was no change to the value of these investments compared to 2014 year-end.

e.) Long-term investments into associated companies

Long-term investments in the Group's associates include a holding in Thermana, Laško. This investment has been impaired in full in previous years, and therefore its value equals nil as at 30 September 2015. This investment was not appraised as at 30 September 2015.


f.) Long-term loans granted

As at 30 September 2015, long-term loans granted amount to EUR 0.3 million. There was no significant change to the value of these investments compared to 2014 year-end.

g.) Long-term deferred tax assets

As at 30 September 2015, long-term deferred tax assets stand at EUR 26.6 million. Long-term deferred tax assets relate mainly to the tax loss, the impairment of financial assets and in a smaller part also to the write-down of receivables, provisions and liabilities due to employees. Long-term deferred tax liabilities refer to the revaluation of property and brands. In the first nine months of 2015, long-term deferred tax liabilities are up due to the increased tax loss and down due to the impairment of financial assets. The net reduction of long-term deferred tax assets amounts to EUR 3.2 million.

h.) Non-current assets held for sale

Non-current assets held for sale include the value of the assets of Jadranska pivovara - Split amounting to EUR 5.1 million. As at the last day of 2014, non-current assets included also the total assets of Radenska amounting to EUR 37.3 million in accordance with the provisions of IFRS 5. Compared to the first nine months of 2014, the value of these assets decreased by the total amount of Radenska assets following the disposal of Radenska.

i.) Inventories

Compared to the last day of 2014, the balance of inventories is roughly the same as at 30 September 2015 (EUR 17.3 million).

j.) Short-term operating receivables

As at 30 September 2015, short-term operating receivables amount to EUR 46 million, up 1.9 million on 31 December 2014.

k.) Short-term available-for-sale financial assets

The value of available-for-sale short-term financial assets of the Laško Group has not changed compared to the last day of 2014.

l.) Short-term loans granted

As at 30 September 2015, short-term granted loans including deposits granted amount to EUR 1.3 million, or EUR 0.1 million up on 2014 year-end.

m.) Equity of the owners of the controlling stake

The equity attributed to the controlling interest of the Laško Group as at 30 September 2015 amounts to EUR 36.4 million, EUR 15.2 million less than the controlling interest's equity as at 31 December 2014. This reduction is due to the realised net loss in the period and the revaluation of real estate. Equity of the owners of the controlling interest represents 13.6% of the total equity and liabilities compared to 14.7% as at the last day of 2014.


n.) Equity of the owners of non-controlling interests

As at 30 September 2015, the equity of the non-controlling interests amounts to EUR 2.1 million, representing 5.5% of total equity. Its value increased in the first nine months of 2015 on account of the net profit of EUR 0.2 million, and decreased by EUR 8.4 million representing the effect of the final consolidation following the disposal of Radenska, by EUR 0.2 million of dividends paid and by EUR 0.1 million on account of property revaluations.

o.) Liabilities

As at 30 September 2015, the total liabilities of the Group amount to EUR 229.9 million, representing 85.6% of the total equity and liabilities. Compared to 2014 year-end, the amount of liabilities fell by EUR 60 million. EUR 9.3 million of this decrease relates to elimination of Radenska from the consolidation following its disposal.

Financial liabilities of EUR 182.1 million represent 67.8% of the total equity and liabilities. Compared to the last day of 2014, the balance of financial liabilities decreased by EUR 46.3 million, primarily on account of repayment of bank loans from the consideration received on the disposal of Radenska and Delo.

p.) Provisions and long-term accrued costs and deferred income

The balance of provisions of EUR 6.6 million as at 30 September 2015 is down EUR 3.6 million compared to the end of 2014. This reduction of EUR 2.3 million is a result of the elimination of the Delo Group from the consolidation. Provisions are down on account of the transfer of liabilities for water concession underpayments to operating liabilities (EUR 4.2 million) and are up on account of contingent liabilities related to legal disputes.

Provisions as at 30 September 2015 include provisions for contingencies arising from legal disputes and pending legal cases in the amount of EUR 2.9 million and provisions for termination and jubilee benefits in the amount of EUR 3.4 million.

r.) Long-term financial liabilities

Long-term financial liabilities as at 30 September 2015 amount to EUR 1.9 million, up EUR 103.9 million compared to the 2014 year-end. The increase is due to the utilisation of long-term bank borrowings.

Long-term borrowings from banks are fully collateralised with shares, real estate, movable property and receivables pledged and guarantees.

s.) Short-term operating liabilities

As at 30 September 2015, short-term operating liabilities amount to EUR 30.7 million. Compared to the last day of the previous year, short-term operating liabilities fell by EUR 4.8 million. This reduction is a result of the elimination of the Delo Group from the consolidation and a reduction in supplier payables.

t.) Short-term financial liabilities

In the first nine months of 2015, short-term financial liabilities are up EUR 57.5 million, mainly on account of the transfer of all long-term loans to short-term financial liabilities


and the repayment of part of the loans from the proceeds received. As at 30 September 2015, short-term financial liabilities of the Group amount to EUR 180.2 million.

In the first nine months of 2015, the Laško Group repaid EUR 43.7 million of bank loans (not counting the repayments of Delo).

On 15 October 2015, the sale of the company Pivovarna Laško to the new majority owner Heineken International B.V., Amsterdam, was completed. Upon signing the share purchase agreement, the buyer also concluded a Cooperation agreement with Pivovarna Laško, with which the buyer undertakes to ensure the continued financial stability of Pivovarna Laško after the transaction closes. On 15 October 2015, Pivovarna Laško received from its new majority owner a long-term loan in the amount of EUR 141,489,909. In accordance with the Standstill and Restructuring Agreement, the loan was used in its entirety to repay all existing loans of Pivovarna Laško, d.d., to all creditor banks. On 29 October 2015, the company received from its the new majority owner the second tranche of the loan amounting to EUR 44,320,349, which was used to repay all the loans of Pivovarna Union, d.d., to all creditor banks, again in accordance with the Standstill and Restructuring Agreement. At the same time as the repayment of loans of both companies, all interest due to banks relating to the loans was repaid.

Short-term financial liabilities due to banks are fully collateralised with shares, real estate, movable property and receivables pledged and guarantees.

u.) Short-term accruals and deferred income

As at 30 September 2015, short-term accrued costs and deferred income amounted to EUR 6.3 million, reflecting an increase of EUR 0.9 million compared to the last day of 2014. Liabilities related to the holiday entitlement not taken, severance pay for redundant workers, excise duty on unsold products kept in non-excise warehouses, short-term accrued consultancy fees on the restructuring and other short-term deferred revenues are disclosed under short-term accruals and deferred income.

v.) Collateralisation of financial liabilities

The loans raised with banks amounting to EUR 177.3 million as at 30 September 2015 are fully collateralised with liens on securities, mortgages, the pledge of movable property and receivables.

The Group has collateralised its long-term and short-term financial liabilities to banks with 440,295 PULG (Pivovarna Union) shares, 270,648 EGKG (Elektro Gorenjska) shares, 1,922,321 EMAG (Elektro Maribor) shares and 645,003 ZDRL (Thermana) shares, the value of which amounted to EUR 164.3 million at 30 September 2015. The value of real estate and equipment pledged amounts to EUR 60.9 million, the value of pledged receivables EUR 20.6 million, the value of pledged inventories EUR 5 million and the value of Pivovarna Laško brands pledged EUR 50 million.

z.) Excess short-term liabilities

As at 30 September 2015, the Group's total short-term liabilities amounted to EUR 217.3 million, while its short-term assets amounted to EUR 75.5 million. The excess short-term liabilities amount to EUR 141.8 million, and will be settled in the future through


the sale of assets and the loan received from the majority owner Heineken International B. V., Amsterdam.

3.3 Notes to the separate financial statements

The financial statements of Laško Group companies are provided in the appendices to this report. The notes below should be read in conjunction with these financial statements.

1. Performance analysis of Pivovarna Laško

Data on operations

The same accounting policies were applied to the financial statements for all of the periods presented in this report. A detailed description of accounting policies applied in the recognition and reporting of the financial statement items is included in the Annual Report of Pivovarna Laško and the Laško Group for 2014. No changes were made to the accounting policies over the period from 1 January to 30 September 2015.

The financial statements drafted for the first nine months of 2015 have not been audited and have been drafted in accordance with provisions relating to the measurement and recognition as provided by the International Financial Reporting Standards (IFRS), and should be read in conjunction with the annual financial statements drafted for the financial year ended 31 December 2014.

(in EUR) I.-IX./2015 I.-IX./2014 Plan I.-XII./2015

Net sales revenues 72,293,980 71,195,884 91,042,698

EBIT -9,817,762 8,124,925 11,172,190Normalised EBIT 8,708,243 8,617,582 11,172,190

EBITDA -6,587,697 11,510,623 15,866,551Normalised EBITDA 11,938,308 12,003,280 15,866,551

Net interest expense1 -6,560,472 -9,349,712 -7,766,942

Net profit or loss 13,293,818 1,065,226 23,233,131Normalised earnings or loss 2,139,410 -697,421 23,233,131

Return on equity (ROE)2 3.0 % -1.0 % 22.0 %Return on assets (ROA)3 0.7 % -0.2 % 7.8 %

EBIT margin4 15.3 % 15.2 % 15.4 %

EBITDA margin5 20.9 % 21.1 % 21.8 %

1 Interest income - interest expense2 Normalised net earnings or loss / average equity in the period3 Normalised net earnings or loss / average assets in the period4 Normalised EBIT / net revenue from the sale of products and services5 Normalised EBITDA / net revenue from the sale of products and services


Disclosures to the individual items of the income statement of Pivovarna Laško for the January - September 2015 period

a.) Profit or loss from operations

In the first nine months of 2015, Pivovarna Laško recorded 1.38% lower quantities sold and generated EUR 72.3 million of net operating revenue, EUR 1.1 million more than in the same period of 2014. In the first nine months of 2015, net sales revenues from products and services amounted to EUR 57.1 million, which is EUR 0.2 million more than in the same period of the previous year. The company generated EUR 43.1 million of sales revenue on the domestic market, up EUR 1.4 million or 3.3% more than in the comparable period of last year. Net sales revenues from products and services on foreign markets amounted EUR 13.9 million, which is EUR 1.2 million or 7.6% less than in the same period of the previous year. Revenues on foreign markets account for 24.4% of total revenues, while the share in the same period of the previous year was 26.6%. The net revenues from sales of merchandise and materials amount to EUR 15.2 million, up EUR 0.9 million on the same period last year.

Total operating revenues in the first nine months of 2015 amount to EUR 73.1 million, which is EUR 1.2 million or 1.7% more than in the same period of 2014.

In the first nine months of 2015, operating expenses of Pivovarna Laško amount to EUR 83 million, up EUR 19.2 million or 30.1% on the same period of last year. The main reason for this rise lies in the revaluation of property to new, lower values. As at 30 September 2015, the value of property was assessed by a certified property appraiser. Impairment loss amounting to EUR 12,048,957 is recognised in other revaluation operating expenses. The majority (24.1%) of operating expenses represent costs of materials at EUR 20 million, down 6% on the same period of last year. These are followed (21.6%) by costs of services at EUR 17.9 million, up EUR 2.9 million compared to the same period of 2014, write-downs (18.7%) of EUR 15.5 million as a result of the aforementioned revaluation, costs of merchandise (18.1%) at EUR 15 million, while labour costs (10%) at EUR 8.2 million are up EUR 0.3 million on the same period of last year due to increased redundancy payments, and other operating expenses (0.4%) at EUR 3.3 million and long-term provisions (0.4%) at EUR 2.9 million relating to pending court cases.

Costs of materials and services in the period account for 83.5% of planned annual costs, employee benefit costs account for 81.7% and amortisation and depreciation expenses for 68.8%.

In the first nine months of 2015, Pivovarna Laško generated an operating loss of EUR 9.8 million. In the same period of last year, the operating profit amounted to EUR 8.1 million. The normalised EBIT adjusted by the one-off events recognised by the company in the first nine months of 2015 and which had a positive impact of total EUR 18.5 million amounts to EUR 8.7 million, up EUR 0.1 million compared to the same period of 2014.

In the first nine months of 2015, the company generated a negative EBITDA of EUR 6.6 million, down EUR 18.1 million on the same period of last year.

The normalised EBITDA amounts to EUR 11.9 million and is down EUR 65 thousand on the previous year.


b.) Financing profit or loss

Pivovarna Laško generated EUR 24.4 million of financing profit in the first nine months of 2015, on account of EUR 13.1 million of financial income from sale of the investment in the subsidiary Radenska, EUR 1.6 million of financial income from sale of the investment in the subsidiary Delo, EUR 11.5 million of dividends received from Pivovarna Union, EUR 6.1 million of interest paid on bank borrowings and relating to the reversal of the prior impairment of Jadranska pivovara, d.d. , and interest paid to the companies in the Laško Group amounting to EUR 0.8 million. In the same period net interest expenses amounted to EUR 6.6 million, down EUR 2.8 million over the comparable period of last year, and down EUR 27 thousand on the EBITDA of the period.

c.) Net profit or loss

In the first nine months of 2015, Pivovarna Laško generated a total operating profit of EUR 14.6 million, while in the same period of last year the company reported a total operating profit amounting to EUR 0.7 million. Thus, in the first nine months of 2015, the company generated a net profit of EUR 13.3 million. In this period, the company recognised certain one-off operating and financial events of EUR 11.2 million, including the negative accounting impact upon the revaluation of properties amounting to EUR 13.8 million and the positive accounting impact upon the sale of Radenska shares as the difference between the sales price and the carrying value as at 31 December 2014 (EUR 13.2 million), while the company recognised the difference of EUR 1.6 million generated upon the sale of Delo and dividends received from the subsidiary Union of EUR 11.5 million. The normalised EBIT adjusted by EUR 11.1 million of the effects of these business events amounts to EUR 2.1 million. Disclosures to the statement of financial position

of Pivovarna Laško, d.d. at 31 March 2015

a.) Intangible assets

As at 30 September 2015, intangible assets amounting to EUR 0.6 million include software licences and similar items.

b.) Property, plant and equipment

The balance of property, plant and equipment of EUR 37.8 million as at 30 September 2015 is down EUR 6.1 million compared to the same period of last year. In the period, Pivovarna Laško acquired new items of property, plant and equipment totalling EUR 5.5 million and recognised depreciation expenses of EUR 3.1 million and revaluations of EUR 8.2 million.

c.) Investment property

Compared to the last day of 2014, the value of the company's investment property fell by the revaluation impact of EUR 1.8 million, standing at EUR 1.9 million as at 30 September 2015.


d.) Long-term investments in the subsidiaries

The long-term financial investments in subsidiaries include investments in subsidiaries. The company possesses 442,451 shares of the subsidiary Pivovarna Union or a 98.080% stake, and 5,396,932 shares in the subsidiary Jadranska pivovara – Split or a 99.460% ownership stake.

In addition, the company also has majority ownership stakes in the following subsidiaries: Vital Mestinje (96.92%), Laško Grupa, Zagreb (100%), Laško Grupa, Sarajevo (84.61%), Laško Grupa, Kosovo (100%) and Firma Del (100%).Long-term investments in subsidiaries fell in 2015 to EUR 4.5 million. These are down due to the sale of Delo in the amount of EUR 4.6 million, and up due to additions of EUR 1,200, due to new purchases of shares of the subsidiary Pivovarna Union, and due to the purchase of the shares in the subsidiary Laško Grupa, Sarajevo, which were held by Radenska (EUR 35,875). On 5 June 2015, the companies entered into a Share purchase and transfer agreement for a 15.3894% share in the company Laško Grupa, Sarajevo from Radenska. As at 30 September 2015, these investments totalled EUR 164.1 million.

e.) Long-term investments into associated companies

Long-term investments in the company's associates include a holding in Thermana Laško, and a holding in Slopak, Ljubljana. Both investments have been impaired in full in previous years, and therefore their value equals nil as at 30 September 2015. As part of the completed sale of the interest in Radenska, Pivovarna Laško acquired 193,237 shares of Premogovnik Velenje at the price of EUR 1. Long-term investments into associates and other companies amount to EUR 0.2 million as at 30 September 2015.

f.) Long-term deferred tax assets

As at 30 September 2015, the company recorded long-term deferred tax assets amounting to EUR 27.3 million, down EUR 1.9 million compared to the last day of 2014. This decrease is due to the tax loss recorded. and the impairment of long-term financial investments.

g.) Assets (disposal groups) held for sale

Compared to the balance as at 31 December 2014, available-for-sale assets are down EUR 41.5 million and stand at EUR 5 million, which reflects the value of the investment in Jadranska pivovara – Split. Assets held for sale included the investment (at 31 Dec 2014) in a 75.31% interest in Radenska, which the company sold on 17 March 2015 and received consideration amounting to EUR 60 million. Of total consideration received, EUR 33.1 million was allocated for repayment of the loan raised from Radenska; EUR 1 million was spent on the acquisition of 127,928 shares of Delo; EUR 1 million was allocated to settlement of the settlement claim brought by Radenska in accordance with provisions of Article 542 of the Companies Act (ZGD-1); EUR 22.8 million was spent for repayment of financial liabilities to banks; while EUR 1 million was on 30 September 2015 deposited with the notary for a period of up to one year for repayment of any potential additional claims.


h.) Inventories

Compared to the last day of 2014, the balance of inventories increased by EUR 1 million to EUR 7.7 million as at 30 September 2015.

i.) Short-term operating receivables

As at 30 September 2015, short-term operating receivables amount to EUR 21.5 million, up 2.7 million on 31 December 2014. Some 64% of all short-term trade receivables are not past due.

j.) Short-term loans granted

As at 30 September 2015, short-term granted loans including deposits granted amount to EUR 0.2 million, or EUR 64 thousand down on 2014 year-end.

k.) Equity

As at 30 September 2015, total equity of the company amounts to EUR 74.6 million, representing 27.9% of the total equity and liabilities. Total amount of capital was increased by the net profit generated in the first three months of 2015 amounting to EUR 13.3 million, the revaluation surplus relating to property and the actuarial deficit of EUR 3.1 million.

l.) Liabilities

As at 30 September 2015, the total liabilities of the company amount to EUR 184.9 million, representing 69.1% of the total equity and liabilities. The financial liabilities amounting to EUR 151.1 million represent 56.5% of the total equity and liabilities and compared to 31 December 2014, they have fallen by EUR 75.7 million. With its sale of the 75.31% stake in Radenska on 17 March 2015, from which Pivovarna Laško received proceeds of EUR 51.8 million, and its sale of the 100% stake in Delo on 18 September 2015, from which Pivovarna Laško received proceeds of EUR 7.3 million upon closing of the sale, the company deleveraged significantly and thus continued to repay its loans from the proceeds from the sale of non-core investments in accordance with the Restructuring and Standstill Agreement dated 30 April 2014, which was concluded with the 18 creditor banks.

m.) Provisions and long-term accrued costs and deferred income

Compared to the 31 December 2014, the value of provisions as at 30 September 2015 is down EUR 1.3 million. Provisions for redundancy payments and years of service awards amount to EUR 1.6 million and other provisions to EUR 2.9 million, while long-term accrued costs and deferred income amount to EUR 10 thousand. Other provisions of EUR 2.9 million have been set aside for pending legal proceedings.

n.) Long-term and short-term financial liabilities

Long-term financial liabilities amount to EUR 0.7 million as at 30 September 2015, while short-term financial liabilities amount to EUR 150.4 million. Compared to the last day of 2014, the balance of financial liabilities to banks decreased by EUR 43.4 million, primarily on account of repayment of bank loans from the consideration received on the


disposal of Radenska and Delo. Borrowings from banks are fully collateralised with shares, real estate, movable property and receivables pledged and guarantees.

o.) Short-term operating liabilities

As at 30 September 2015, short-term operating liabilities amount to EUR 29.7 million, an increase of EUR 1.8 million over the last day of 2014 and account for 11.1% of total equity and liabilities.

p.) Short-term accruals and deferred income

Short-term accrued costs and deferred income amount to EUR 3.4 million and relate to accrued costs, reflecting an increase of EUR 2.1 million compared to the last day of the previous year.

r.) Excess short-term liabilities

As at 30 September 2015, the company's total short-term liabilities amount to EUR 180.1 million, while its short-term assets amount to EUR 35.3 million. The excess of short-term liabilities over short-term assets amounting to EUR 144.7 million presents a high liquidity risk.

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