Semi annual report 2011 24 8 2011

semi-annual

REPORT ………………………………………………

Pivovarna Laško Group and Pivovarna Laško, d. d.

2011

Semi-Annual Report 2011 / Contents

CONTENS INTRODUCTION 5

STATEMENT BY THE CHAIRMAN OF THE MANAGEMENT BOARD 5

First half of 2011 brings growth 5

SUMMARY OF SEMI-ANNUAL OPERATIONS 7

Basic characteristics of operations in 2011 7 Overview of Significant Business Events 8 Events following the conclusion of the semi-annual period 12

PRESENTATION FO THE PIVOVARNA LAŠKO GROUP 15

PROFILE OF THE PARENT COMPANY PIVOVARNA LAŠKO, d. d. 17

Company profile 17 Capital ownership structure and movement of share values 19 Corporate governance 22 BUSINESS REPORT 30

OPERATIONS OF THE PIVOVARNA LAŠKO GROUP 30

OPERATIONS OF THE PARENT COMPANY PIVOVARNA LAŠKO, d. d. 32

Summary of the Business Plans for 2011 32 Sales 33 Risk Management 38 Marketing activities 44 Report of the Technical Production Division 47

OPERATIONS OF SUBSIDIARIES 55

Radenska, d. d., Radenci 55 Union Group 57 Vital Mestinje, d. o. o. 59 Delo, d. d., Ljubljana 61

SUSTAINABLE DEVELOPMENT 64

Human Resources Management 64 Communications 66 Responsible attitude towards the social environment 68 Ecological report 69 FINANCIAL REPORT 70

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE PIVOVARNA LAŠKO GROUP for period ended 30 June 2011 70

Consolidated Statement of the Financial Position 70 Consolidated Income Statement 72

Pivovarna Laško Group and Pivovarna Laško, d. d. 3

Semi-Annual Report 2011 / Contents


Consolidated Statement of Comprehensive Income 73 Consolidated Statement of Changes in Shareholder’s Equity for 2011 74 Consolidated Statement of Changes in Shareholder’s Equity for 2010 75 Consolidated Statement of Cash Flows 76 Consolidated Cash Flow from Operations 77 Consolidated Reporting by Segments 77 Accounting guidelines 78 Managing the financial risks of the Group 89 Notes to the Unaudited Consolidated Semi-Annual Financial Statements 90

UNAUDITED UNCONSOLIDATED FINANCIAL STATEMENTS OF THE PIVOVARNA LAŠKO, d. d. for the period ended 30 June 2011 105

Unconsolidated Statement of the Financial Position 105 Unconsolidated Income Statement 106 Unconsolidated Statement of Comprehensive Income 107 Unconsolidated Statement of Changes in Shareholder’s Equity for 2011 108 Unconsolidated Statement of Changes in Shareholder’s Equity for 2010 109 Unconsolidated Statement of Cash Flows 110 Unconsolidated Cash Flow from Operations 111 Notes to the Unaudited Unconsolidated Semi-Annual Financial Statements 112

Semi-Annual Report 2011 / Introduction

INTRODUCTION STATEMENT BY THE CHAIRMAN OF THE MANAGEMENT BOARD First half of 2011 brings growth Dear Shareholders, valued Business Partners and Colleagues,

Following the first half of 2011 employees and shareholders can look somewhat more optimistically at the future of the Pivovarna Laško Group.

The Pivovarna Laško Group sold 2.2 million hl of beverages in the first half of the year, representing a 3 percent increase over the same period in the previous year. Beer sales comprising 1 million hl represent a 5 percent increase over the same period in the previous year.

Net sales revenues generated comprised EUR 161.3 million meaning a 4 percent growth and 60 percent higher than planned for 2011. The Group realised an operating profit (EBIT) of EUR 13.2 million and generated a net loss of EUR 1.2 million. Disregarding the impairment of the Fructal brand (EUR 3.9 million in revalued operating expenses), amortisation due to the accounting of net assets of the companies Fructal, Delo and Jadranska pivovara as groups which will be divested (+ EUR 3.8 million amortisation) and changes to the method of valuating investments in MELR (EUR 12.1 million in financial expenses), the corrected EBIT of the Group is EUR 14.8 million which is 3% higher than the previous year and the corrected net profit EUR 11 million.

Our products once again receive awards

We create brands with added value for our customers and the superiority of our products continues to be proven by the domestic and international awards received. Laško Zlatorog again captured the title of Trusted Brand with Laško Zlatorog, Laško Dark and Jubilejnik receiving the golden Monde Selection medal.

In comparison with the same period in 2010, the Laško Pivovarna Group also increased the quantity of sold beverages by 2.5 percent in the first half of 2011. In comparison with the same period last year, sales of beer increased most, namely by 4.8 percent, followed by sales of mineral waters (6.3%) and sales of other alcoholic beverages (19.9 percent).

The first half of 2011 displayed sure signs that the results of operations were improving. At the same time, the Group actively continued efforts in accordance with strategic disinvestment measures as agreed with bank owners and creditors to implement the sale of investments which no longer represented the basic activity and decrease the high level of debt.



Financial sanctions by the Group are continuing

Despite the fact that the general meeting of shareholders did not adopt the proposal to reorganise the Group into a contractual concern, the Management Board is intensively continuing with the financial sanctioning of the Group through rationalisation and consolidation of business functions and asset divestment processes. The process involving the sale of the business share in the company Mercator owned by the Group was not able to be autonomously concluded due to a regulatory decision therefore the Group formed a consortium which initiated procedures for a joint majority sale of the share in the company Mercator.

The process for divesting the business share in the company Fructal was, on the other hand, successfully implemented. Following the implementation of an international tender, the Group acquired five binding bids from potential clients, with the most favourable bid obtained from the company Nectar from Serbia which will prove beneficial both for the Group and for the continued development of the company Fructal. The successfully conclude divesture of the company Fructal will reduce the financial burden of the Group by almost EUR 50 million.

The business results of the Group and other business events of the first half of 2011 provide moderate optimism and clearly point to the fact that with successful financial sanctioning the Group can attain extremely good sales and business results and in this way, assure the growth in wealth of its shareholders. Dušan Zorko Chairman of the Management Board of Pivovarna Laško, d. d. Laško, 24 August 2011



SUMMARY OF SEMI-ANNUAL OPERATIONS Basic characteristics of operations in 2011 Operations in the first half of the 2011 business year of the joint-stock company Pivovarana Laško were satisfactory despite the problems encountered. The consumption of beverages and beer is highly dependent on the conditions affecting the consumption of these products. Of course, we can not assert that the conditions in the past half year were among more the favourable ones of past years. The assessed results achieved are therefore favourable. The business results attained were dependent on the effects of the recession in the past year. We assess that the recession also affected manufacturers of consumables which subsequently includes us as producers of beverages and beer. The financial indicators on operations for the period January – June 2011 achieved did not attain the figures of 2010 in some of the financial statements. The reasons of such financial statements are partially the result of the increased price of basic raw materials, energy products and intermediate goods. The higher costs of market communications than planned in the annual business plan are predominantly due to five new products which of course must be presented to the consumer. Seeing that in the past no major investments into new technological processes were made naturally requires increased ongoing investments each year to maintain uninterrupted production. Despite the problems encountered on a daily basis, the fact remains that operations from regular activities are favourable and provide a guarantee for successful operations in the future. It is legitimately expected that operating results will continue to be satisfactory and within the scope of educations even though the conditions for operations will not significantly change.



Overview of Significant Business Events The following significant business events effected Pivovarna Laško d. d. and the Pivovarna Laško Group in the business period January - June 2011:

Filing of an action for damages by the Pivovarna Laško Group

In accordance with the decision of the 16th regular General Meeting of Shareholders on 16 July 2010, the Management Board of Pivovarna Laško, d. d. filed an action for damages against the company Atka-Prima, d. o. o. as the former controlling concern and former director of Pivovarna Laško, d. d. Boško Šrot. In the action for damages, Pivovarna Laško, d. d. demanded reparation in the amount of EUR 13,336,488.76 with pp due to damages suffered by the Company due to transactions carried out in 2008 and 2009.

The subsidiaries Pivovarna Union, d. d., Radenska, d. d., Radenci, Fructal, d. d. and Delo, d. d., also filed actions for damages on 15 February 20 11 with the competent courts against the company Atka-Prima, d. o. o. and Boško Šrot. In the actions for damages, the subsidiaries are demanding reparation in the amount of EUR 116,689,233.34 with pp due to damages suffered by the subsidiaries due to transactions carried out in 2008 and 2009.

A possibility exists that Pivovarna Laško, d. d., will file additional lawsuits in the future for damages suffered for the entire scope of damage suffered is not yet known, also due to not yet concluded judicial procedures.

Court decision in connection to the validity of decisions adopted at the 15th regular General Meeting of Shareholders of Pivovarna Laško, d. d.

The PanSlovenian Shareholders’ Association (PSSA) filed a lawsuit on 1 October 2009 at the District Court in Celje due to the establishment of invalidity and subordination due to the challenging of the decisions of the 15th General Meeting of Shareholders held on 31 August 2009. The court rejected the demands of the suing part in their entirety through its judgement of 1 February 2011. The suing part PSSA filed an appeal against the aforementioned judgement on 1 March 2011 which Pivovarna Laško, d. d. responded within the prescribed deadline. The Higher Court in Celje has not yet made a decision in this regard.

Lawsuit of Perutnine Ptuj, d. d. against Pivovarna Laško, d. d. based on a comfort letter

Pivovarna Laško, d. d. was served a lawsuit on 15 February 2011 by the District Court in Celje in which the plaintiff Perutrnina Ptuj, d. d. was demanding payment of EUR 10,116,488.71 with pp from the defendant Pivovarna Laško, d. d. The plaintiff indicated in the lawsuit that it had suffered damages in the denoted amount since the defendant had failed to fulfil in full the obligations stemming from the comfort letter of 10 January 2009 which the previous director of Pivovarna Laško, d. d. had signed on behalf of the defendant. Pivovarna Laško, d. d. finds the claim of the plaintiff to be



unjustified as it also asserted in its appeal. The court of first instance has not yet made a judgement regarding the matter.

Termination of the procedure initiated by Nova Kreditna banka Maribor (NKBM), d. d. against Pivovarna Laško, d. d.

NKBM filed a writ of execution against Pivovarna Laško, d. d. on 1 April 2010 on the basis of a contract on the pledging of dematerialized securities, concluded on 25 March 2009 between the company NKBM as the creditor and the company Center naložbe, d. d., Maribor as the debtor and Pivovarna Laško, d. d., as the lienee (the contract was drawn up in the name of Pivovarna Laško, d. d., and signed by the previous Director Boško Šrot) due to a claim of EUR 6,570,542.25 with pp against the debtor Pivovarna Laško, d. d. with the sale of 345,304 shares with the ticker symbol RARG, whose owner is Pivovarna Laško, d. d. The shares were pledged by Pivovarna Laško, d. d. to the company NKBM to insure the loan obtained by the company Center naložbe, d. d., Maribor from NKBM. The district court approved the proposed writ of execution through its decision of 6 April 2010.

Based on the promptly filed appeal against the writ of execution, on 16 February 2011 the writ of execution was repealed and remanded for resolution to the District Court in Maribor where the matter will be decided on in a contentious proceeding. The District Court in Maribor with its decision of 14 June 2011 decided that the proposal for enforcement by the creditor and plaintiff NKBM of 1 April 2010 was deemed as a withdrawal thereby terminating the procedure. The aforementioned decision on the termination fo the procedure became final on 2 July 2011. Pivovarna Laško, d. d. was reimbursed the costs of the procedure based on the decision of the District Court in Maribor of 4 July 2011 from the suing party NKBM in the amount of EUR 10.208,00.

Decision of the Consumer Protection Office (CPO)

CPO published a decision on 26 April 2011 prohibiting the Central Securities Clearing Corporation (KDD) from executing an order for the transfer of those registered shares of the company Mercator, d. d., with the ticker symbol MELR, whose owners were Pivovarna Laško, d. d., Pivovarna Union, d. d. and Radenska, d. d. Radenci. The Company lodged an appeal against the decision with the Supreme Court of the Republic of Slovenia. The Company also filed a proposal for a temporary order which the court rejected through its decision of 29 April 2011. The Company also filed a request in connection to the CPO prohibition on KDD prohibition regarding the fulfilment of the order for transfer of MELR shares, requesting recognition of the parties in the procedure as and proposal for a renewed procedure on 12 May 2011. CPO has not yet submitted its decision regarding the request and proposal.

Due to the CPO decision of 26 April 2011 and decision of the Supreme Court of 29 April 2011 due to which the companies of the Pivovarna Laško Group could not dispose of the MELR shares, the offer of the company Agrokor, d. d. for the purchase of MELR shares owned by the companies in the Pivovarna Laško group could not be accepted.



Decision of the Securities Market Agency (ATVP)

With the decision of the Securities Market Agency (ATVP) of 9 December 2008 in connection to the judgment of the District Court in Ljubljana of 25 October 2010 and the judgment of the Higher Court in Ljubljana on 19 may 2011, the legal persons Pivovarna Laško, d. d., Pivovarna Union, d. d. and Radenska, d. d., Radenci were found guiltily of committing a misdemeanour in accordance with the first indent of the first paragraph of Article 71 in connection to the fourth paragraph of Article 71 of the Takeovers Act. Pursuant to the fourth paragraph of Article 71 of the Takeovers Act, Pivovarna Laško, d. d. and Pivovarna Union, d. d. were fined EUR 170,000 and Radenska, d. d. EUR 160,000. All legal recourses against the aforementioned decisions were depleted following the rejection of the appeal by the Higher Court in Ljubljana of 19 May 2011. Based on the lodged proposal of the companies Pivovarna Laško, d. d. and Pivovarna Union, d. d., ATVP allowed the fine to be paid through 12 monthly instalments.

Changes to the Management Board of Pivovarna Laško, d. d.

Based on his resignation statement of 14 March 2011, the mandate of the Supervisory Board member responsible for finance Robert Šega ended on 31 March 2011. Mirjam Hočevar was appointed the new member to the Supervisory Board responsible for finance as of 1 April 2011.

Changes to the Supervisory Board of Pivovarna Laško, d. d.

Based on the resignation statement submitted by the Chairman of the Supervisory Board Marjan Mačkošek at the regular session of the Supervisory Board, Mr. Marjan Mačkošek’s mandate as Chairman and member of the Supervisory Board ceased.

The mandate of member of the Management Board and employee representative Andrej Kebe ended on 1 April 2011, the same day he submitted his resignation. At its session on 6 April 2011 the Company’s Worker’s Council recalled Bojan Košak as of 6 April 2011 from the position of member of the Supervisory Board and employee representative due to his mandate in the Worker’s Council having expired. At the same session, namely on 6 April 2011, the Worker’s Council elected Bojan Cizej as member of the Supervisory Board and employee representative who the Supervisory Board at its regular session on 13 April 2011 as of the same day, appointed him as Deputy Chairman of the Supervisory Board of the Company. The Supervisory Board of the Company appointed Valdimir Malenković as Chairman of the Supervisory Board at its regular session on 29 April 2011.

Changes to the Audit Committee of the Supervisory Board of Pivovarna Laško, d. d.

The Supervisory Board of the Company appointed Bojan Cizej as member of the Audit Committee of the Supervisory Board of the Company and Bojan Košak as additional member of the Audit Committee at is session on 13 April 2011.



Changes in the management boards of subsidiaries

The mandate of the director of Jadranska pivovara – Split d. d. expired on 31 January 2011. Zlatko Bebić was appointed as the new director on 31 January 2011.

Changes in the supervisory boards of subsidiaries

Members of the supervisory board of the subsidiary Pivovarna Union, d. d. Anton Turnšek, Janko Remic and Franc Rojnik submitted their resignation statements as members of the Supervisory Board of Pivovarna Union, d. d. at the supervisory board session on 22 April 2011. Vladimir Malenković, Peter Groznik and Bojan Cizej were appointed as new members of the supervisory board of the company at the General Meeting of Shareholders of Pivovarna Union, d. d. on 22 June 2011.

Member of the supervisory board of the subsidiary Radenska, d. d., Radenci Marjet Zevnik submitted her resignation statement that she was resigning from the position of member of the supervisory board of Radenska, d. d., Radenci as of the date of appointment of a new member to the supervisory board of the denoted company. The General Meeting of Radenska, d. d., Radenci appointed Pavel Teršek as new member of the supervisory board of the company on 21 June 2011 with a mandate commencing on 22 June 2011.

The 17th regular General Meeting of Shareholders of Pivovarna Laško, d. d.

The 17th regular General Meeting of Shareholders of Pivovarna Laško, d. d. was held on 24 June 2010. The resolutions adopted and other information are available on the website of the Ljubljana Stock Exchange - SEOnet and the Company’s website.



Events following the conclusion of the semi-annual period

Changes to the composition of the Management Board of Pivovarna Laško, d. d.

The Supervisory Board of Pivovarna Laško, d. d. appointed two additional members to the Management Board which now comprises three members at its regular session on 4 August 2011 at the proposal of the Chairman of the management Board Dušan Zorko as of 5 August 2011. The new members are Marjeta Zevnik responsible the legal, human resources and general areas and Mateja Oseta responsible for the production-technical area. The appointment of additional members to the Management Board is based on an amendment of the Statue approved at the 17th regular General Meeting of Shareholders on 24 June 2011, Peter Groznik, DSc which now enables the appointment of a maximum five-member Management Board.

Changes to the Supervisory Board of Pivovarna Laško, d. d.

The Worker’s Council of Pivovarna Laško, d. d. elected Dragica Čepin as member of the Supervisory Board and employee representative on 3 August 2011, with a mandate commencing 4 August 2011.

Agreement on the joint sale of shares of the company Mercator, d. d.

The companies in the Group Pivovarna Laško, Pivovarna Laško, d. d., Pivovarna Union, d. d. and Radenska, d. d., Radenci, concluded an agreement on the joint sale of shares of the company Mercator, d. d. with the companies Nova Ljubljanska banka, d. d., Abanka Vipa, d. d., NFD Holding, d. d., NFD 1 Delniški investicijski sklad, d. d., Gorenjska banka, d. d., Nova kreditna banka Maribor, d. d., Hypo Alpe-Adria-bank, d. d. and Banka Celje, d. d. which entered into force on 16 June 2011. Banka Koper, d. d. also entered the agreement later on.

The aforementioned contracting parties or signatories of the Agreement are the owners of a total of 1,961,896 shares of the company Mercator, d. d. which represents a 52.10% share of the capital of the said company. The procedure for the sale of a 52.10% stake in Mercator, d. d. will be implemented in cooperation with the financial broker ING Bank N. V. London in line with the provisions defined by the contracting parties in the Agreement. The Agreement on the Joint Sale has been concluded for a period of 12 months inclusive of the date of conclusion of the Agreement and may be extended following its expiration.

Prior to the conclusion of the aforementioned Agreement the companies of the Group could not accept the offer of the company Agrokor, d. d. for the purchase of MELR shares owned by the companies in the Pivovarna Laško Group because due to the decision of the Competition Protection Office of 26 April 2011 and decision on the rejection of the temporary order of the Supreme Court of 29 April 2011, the Group could not dispose of the MELR shares.



Sale of shares of the company Fructal, d. d.

The subsidiaries Pivovarna Union, d. d. and Nectar, d. o. o. from the Republic of Serbia signed a contract on the sale of an ownership stake in the company Fructal, d. d. owned by the company Pivovarna Union, d. d.. The supervisory board of Pivovarna Union, d. d. approved the signing of the contract on the sale of an ownership stake in Fructal, d. d. after which approval was obtained from the General Meeting of Shareholders of Pivovarna Laško, d. d. on 30 July 2011.

Ten non-binding and five binding offers were received from the international two-stage public tender addressed to almost 100 domestic and foreign investors were contacted. Nectar, d. o. o. was assessed to be the most favourable tenderer both in terms of price as well as other conditions of the transaction. Nectar, d. d. will pay Pivovarna Union, d. d. EUR 35.3 million for the purchase of the 93.73% stake Fructal, d. d. The sale is expected to be concluded by the end of November when Nectarju, d. o. o. receives the permission from the authorities of the competition offices in which Nectar, d. o. o. and Fructal, d. d. operate and once the specific other conditions of the transaction have been fulfilled. Following the conclusion of the sale of the 93.73% ownership stake in Fructal, d. d., Nectar will have to publish a takeover offer for the remaining shares of Fructal, d. d. The sale of the stake in Fructal, d. d. will significantly contribute to the deleveraging of the Group in accordance with the financial restructure agreed with bank creditors and owners.

Extraordinary 18th General Meeting of Shareholders

The 18th regular General Meeting of Shareholders of Pivovarna Laško, d. d. was held on 30 July 2011. The resolutions adopted and other information are available on the website of the Ljubljana Stock Exchange - SEOnet and the Company’s website (see the following paragraph for more details).

Takeover bid of KS Naložbe, d. d.

Pivovarna Laško, d. d. received notification of a takeover intend from the KS Naložbe, d. d., Dunajska 9, 1000 Ljubljana on 8 July 2011 in which the denoted company informed Pivovarna Laško, d. d. that it intended to submit a takeover bid for shares of Pivovarna Laško, d. d. Due to the takeover intent of KS Naložbe, d. d., Pivovarna Laško, d. d. had to implement the extraordinary 18th General Shareholders Meeting on 30 July 2011 for the purpose of acquiring consent for the transaction which in accordance to Article 47 of the Takeovers (ZPre-1) the Management Board required the consent of the General Meeting which was granted for the companies in the Group (Pivovarna Laško, d. d. and its subsidiaries Pivovarna Union, d. d. and Radenska, d. d., Radenci) could continue the sale of shares of Mercator, d. d. in accordance with the Agreement on Joint Sale of the Shares of Mercator, d. d. of 15 June 2011 (concluded mandate contract with the salesbroker ING Bank N. V., London), approving the sale of the 93.7% ownership stake of Pivovarna Union, d. d. in the share capital of Fructal, d. d. for a purchase price of EUR 35.3 million.

Pivovarna Laško, d. d. received the takeover bid and brochure for the purchase of shares of Pivovarna Laško, d. d. on 4 August 2011. KS Naložbe, d. d. published its



takeover bid in the newspaper Delo on 4 August 2011 and the bid, together with the brochure, the same day on the website of the Ljubljana Stock Exchange - SEOnet. Pivovarna Laško, d. d. also published the takeover bid and brochure on SEOnet and its website on 5 August 2011.

The Management Board of Pivovarna Laško, d. d. in accordance with Article 34 of the Takeovers Act (ZPre-1) published its opinion on the takeover bid for the acquisition of shares Pivovarna Laško, d. d. by KS Naložbe, d. d. on the website of the Ljubljana Stock Exchange – SEOnet and its website on 10 August 2011 and in the newspaper Delo on 11 August 2011 and simultaneously forwarded said opinion to the shareholder representatives of the Company.



PRESENTATION OF THE PIVOVARNA LAŠKO GROUP The Pivovarna Laško Group brings together producers of beer, mineral, spring and natural waters, non-alcoholic beverages, spirits and other alcoholic beverages and syrups for making beverages. It is also involved in newspaper and publishing activities, retail and wholesale trade activities and postal and courier activities.

PARENT COMPANY

PIVOVARNA LAŠKO, d. d., Slovenia

SUBSIDIARY COMPANIES

RADENSKA, d. d., Radenci, Slovenia (93.813 percent ownership stake)

PIVOVARNA UNION, d. d., Ljubljana, Slovenia (97.895 percent ownership stake)

JADRANSKA PIVOVARA – Split, d. d., Croatia (99.106 percent ownership stake)

VITAL MESTINJE, d. o. o., Slovenia (96.92 percent business share)

DELO, d. d., Ljubljana, Slovenia (100 percent ownership stake – of which 80.834% is owned by Pivovarna Laško, d. d. and 19.166% by Radenska, d. d.)

RA&LA, d. o. o., Sarajevo, Bosnia and Herzegovina (100 percent ownership stake – of which 69.23% is owned by Pivovarna Laško, d. d. 1.97% by Radenska, d. d., 11.48% by Pivovarna Union, d. d., Ljubljana and 17.32% by Fructal d. d.)

FIRMA DEL, d. o. o., Laško, Slovenia (100 percent percent business share)

LAŠKO GRUPA, d. o. o., Zagreb, Croatia (100 percent business share) Due to the financial insignificance of the companies RA&LA, d. o. o., Sarajevo, Firma Del, d. o. o., and Laško Grupa, d. o. o., Zagreb, they will not be dealt with in detail in continuation.

ASSOCIATED COMPANIES

BIRRA PEJA, Sh. a., Peć, Kosovo (39.55 percent ownership stake)

SLOPAK, d. o. o., Ljubljana, Slovenia (39.96 percent ownership stake)



Organisati-

PIVOVARNA JADRANSKA FIRMA LAŠKORADENSKA, d.d. UNION, d.d. PIVOVARA, d.d. VITAL, d.o.o. DELO, d.d. RA&LA, d.o.o. DEL, d.o.o. GRUPA, d.o.o.Radenci Ljubljana Split Mestinje Ljubljana Sarajevo Laško ZagrebOwnershi Ownershi Own Busin. sha Ownwersh Busin. sha Busin. Busin. sh

RADENSKA Pivovarna Laško Pivovarna LaškoMIRAL, d.o.o. FRUCTAL, d.d. Ownership in Delo Busin sh. in RA&LRadenci AjdovščinaBusin. sh Ownership:

FRUCTAL Radenska Radenska ZAGREB, d.o.o. Ownershi Busin sh. i Za

p: 93.813 % p: 97.895 % ership: 99.106 % re: 96.92 % ip: 100 % re: 100 % share: 100 % are: 100 % Num. of sh.: 4,748,703 Num. of sh.: 441,617 Num. of sh.: 3,255,152 Num. of sh: 667,464

A 80.834 % 69.23 %

are: 100 % 93.728 % Num. of sh.: 539,536 Num. of sh.: 2,348,470

p in Delo n RA&LAgreb

Busin. sh

EUROFRUIT Pivovarna Union SARAJEVO, d.o.o. IZBERI, d.o.o. Busin sh. in RA& Sara

19.166 % 1.97 %are: 100 % Num. of sh.: 127,928

(in bankruptcy)

Delo subsidiary company:

LAjevo Ljubljana

Busin. sha Busin. sha

FRUKTAL Fructal MAK, a.d. VE

11.48 %re: 100 % re: 100 %

(in liquidation)

Delo subsidiary company:

ČER, d.d. Skopje Maribor Owners Ownersh

Busin sh. in RA&LA 17.32 %

hip: 89.39 % ip: 79.24 % Num. of sh.: 841,688 Num. of sh.: 202,788

Subsidiary company Subsidiary company Subsidiary company Subsidiary companySubsidiary company Subsidiary company Subsidiary company Subsidiary company

PIVOVARNA LAŠKO GROUPon 30/6/2011

Parent company

PIVOVARNA LAŠKO, d. d.

onal Chart of the Pivovarna Laško Group as at 30 June 2011



PROFILE OF THE PARENT COMPANY PIVOVARNA LAŠKO, d. d. Company profile PIVOVARNA LAŠKO, d. d., Trubarjeva 28, 3270 Laško is entered in the court register under entry no. 1/00171/00 at the District Court in Celje, under decision no. SRG 95/00673, of September 1995.

Abbreviated company name: PIVOVARNA LAŠKO, d. d.

Organisation type: public limited company

Share capital: EUR 36,503,305 Number of shares issued: 8,747,652 no par-value shares Listing of shares: Ljubljana Stock Exchange, stock exchange listing of regular shares Ticker symbol: PILR Company registration number: 5049318 Tax Identification Number: 90355580 Activity code: 11.050

Type of business and principal activity: B E E R P R O D U C T I O N

Chairman of the Management Board: Dušan Zorko, MSc Chairman of the Supervisory Board: Dr. Vladimir Malenković

Transaction accounts:

Raiffeisen Krekova banka, d. d. IBAN SI56 2430 0900 0054 863

Nova Kreditna banka Maribor, d. d. IBAN SI56 0451 5000 0909 883

Nova Ljubljanska banka, d. d., Ljubljana IBAN SI56 0223 2002 0104 463

Abanka Vipa, d. d. IBAN SI56 0510 0801 2922 332

Unicredit banka Slovenije, d. d. IBAN SI56 2900 0000 1820 159

Hypo Alpe-Adria-Bank, d. d. IBAN SI56 3300 0000 2722 975

Banka Sparkasse, d. d. IBAN SI56 3400 0100 1922 773



Banka Celje, d. d., Bančna skupina Celje IBAN SI56 0600 0000 1199 122

Probanka, d. d. IBAN SI56 2510 0970 0565 280

Telephone: +386 3 734 80 00 Fax: +386 3 573 18 17 E-mail adress: [email protected] Website: http://www.pivo-lasko.si


http://www.pivo-lasko.si/


Capital ownership structure and movement of share values The share capital of the Company as at 30 June 2011 amounted to EUR 36,503,305 and is divided into 8,747,652 no par-value shares all of which have been paid in full. All shares are ordinary and registered in dematerialized form, bearing the PILR and PILH ticker symbols. As at 30 June 2011 8,611,481 shares bearing the PILR symbol and 136,171 shares bearing the PILH symbol were registered in the central register of the Central Securities Clearing Corporation (KDD) in Ljubljana.

The company possessed 7,691 shareholders on 30 June 2011 which was 5.27% less than on the same day in 2010. The ten largest shareholders possessed a total of 6,163,972 shares or 70.46% of total share capital on 30 June 2011. The stakes of individual shareholders are shown in the table below. Capital ownership structure as at 30 June 2011

Number of

S h a r e h o l d e r shares

NLB, d. d. Ljubljana Slovenia 2,056,738 23.512

Hypo Alpe-Adria-Bank, AG Klagenfurt Austria 618,202 7.067

Kapitalska družba, d. d. Ljubljana Slovenia 617,488 7.059

Probanka, d. d. Maribor Slovenia 614,911 7.029

GB, d. d. Kranj Kranj Slovenia 542,448 6.201

Skagen kon-tiki verdipapir fond Stavanger Norway 499,286 5.708

NFD 1, delniški investicijski sklad, d. d.

Ljubljana Slovenia 446,465 5.104

Abanka, d. d. Ljubljana Slovenia 285,463 3.263

Banka Celje, d. d. Celje Slovenia 252,500 2.886Banka Koper, d. d., Dvojezična firma: Banka

Koper - Capodistria

Slovenia 230,471 2.635

T o t a l 6,163,972 70.464

% of share

capital

1.2.3.4.5.6.7.

8.9.

10.

Capital ownership structure as at 30 June 2010

Number of

S h a r e h o l d e r shares

NLB, d. d. Ljubljana Slovenia 1,713,685 19.590

Kapitalska družba, d. d. Ljubljana Slovenia 617,488 7.059

Hypo Alpe-Adria-Bank, AG Klagenfurt Austria 615,585 7.037

Probanka, d. d. Maribor Slovenia 614,911 7.029

GB, d. d. Kranj Kranj Slovenia 542,448 6.201

Skagen kon-tiki verdipapir fond Stavanger Norway 499,286 5.708

NFD 1, delniški investicijski sklad, d. d.

Ljubljana Slovenia 446,465 5.104

Publikum Fin, d. o. o. Ljubljana Slovenia 343,053 3.922

Abanka, d. d. Ljubljana Slovenia 285,463 3.263

Banka Celje, d. d. Celje Slovenia 252,500 2.886

T o t a l 5,930,884 67.800

capital

% of share

1.2.3.4.5.6.7.

8.9.

10.



Shares Shares of Pivovarna Laško, d. d. with the PILR ticker symbol have been quoted on the securities market of the Ljubljana Stock Exchange since 1 December 2000 as ordinary shares. The share capital of the Company as at 31 December 2010 amounted to EUR 36,503,305 and is divided into 8,747,652 no par-value shares of which 8,611,481 PILR shares and 136,171 PILH shares are registered in the central register of KDD.

The Company still has PILH shares from the ownership restructure procedure reserved for denationalization beneficiaries. If a decision is issued in favour of the denationalization beneficiary, the share will change from a PILH share to a PILR and begin quoting on the organised securities market.

Pivovarna Laško, d. d. possessed 755 own shares on as at 30 June 2011 which comprises 0.0086% of the total share capital of the Company.

As at 30 June 2011 the book value of PILR shares calculated as the book value of capital with regard to the total number of shares amounted to EUR 14.61 and on 20 June 2010 EUR 15.17, denoting a 3.69% decrease.

The market value of the PILR shares on 30 June 2011 amounted to EUR 8.30 and was 55.85% lower than on 30 June 2010 when the market value equalled EUR 18.80.

The share capital of the Company as at 31 December 2010 amounted to Net profit per share amounted to EUR 0.3229 for the parent company while net profit per share of the majority owners amounted to EUR 0.1407. Balance of shares and stakes of members of the Management and Supervisory Boards Pivovarna Laško, d. d. in the share capital of the Company as at 30 June 2011

NumberS h a r e h o l d e r Membership of shares

1. Dušan ZORKO The Chairman of the Board 450 0.0051of management

2. Mirjam HOČEVAR A member of the Board 548 0.0063of management

4. Bojan CIZEJ A member of the 3,180 0.0364Supervisory Board

T o t a l 4,178 0.0478

Participation %

The remaining members of the Supervisory Board were not holders of shares of of Pivovarna Laško, d. d. as at 31 December 2011. Authorized and conditional capital The General Meeting of Shareholders of the Company did not conclude any decisions regarding the conditional increase of shares or authorised capital.



Movement of the market value of PILR shares and the Slovenian stock exchange (blue chip) index SBITOP for the period from 1 January to 30 June 2011

Movement of the market value of PILR shares and the Slovenian stock exchange (blue chip) index SBITOP for the period from 1 January to 30 June 2010



Corporate governance The principles of management of Pivovarna Laško, d. d. arise from valid legal norms in the Republic of Slovenia, internal acts of the Company and established good work practices. Management is carried out according to a two-tier system whereby the Company is managed by the Management Board and its operations monitored by the Supervisory Board. The bodies of the Company as set out in the Statute of Pivovarna Laško, d. d. are the General Meeting of Shareholders, Supervisory Board and Management Board of the Company. Number of shareholders Pursuant to the provisions of the Companies Act, the General Meeting of Shareholders is the supreme body of the Company. The will of the shareholders who adopt fundamental and statutory decisions are implemented on the Company. One share represents one vote at the General Meeting. Pivovarna Laško, d. d. has no shares with limited voting rights. Own shares do not enable voting rights at the General Meeting.

The General Meeting of Shareholders convenes the Management Board of its own initiative, at the request of the Supervisory Board or at the written request of the shareholders of the Company who possess at least a 5% equity stake in the Company. Shareholders may realise the rights from shares directly at the General Meeting or through their representatives.

The General Meeting makes decisions according to the majority of votes cast unless otherwise provided by law or the Statute of the Company. The General Meeting decides on the following matters which require a three-quarter majority vote:

amendments to the Statute;

reductions of share capital (including conditional increases);

approved increases to share capital;

status changes and termination of the Company;

exclusion of shareholders’ preferential rights in the issue of new shares;

election and early discharge of members of the Supervisory Board;

other matters, if so prescribed by law or the Statute. The General Meeting makes decisions regarding the granting of discharges to the Management and Supervisory Boards of the Company and at the same time, makes decisions regarding the use of distributable profit. By granting discharges the General Meeting confirms and approves the work of the Management and Supervisory Boards for the business year. Discussions regarding the granting of discharges are carried out in combination with discussions on the use of distributable profit. If the General



Meeting does not grant discharges, this is not deemed that the Management Board was given a vote of no confidence.

Before the General Meeting of Shareholders decides that the distributable profit is to be used for dividends, the dividends belong to the shareholders who as owners are entered in the central register of securities at the Central Securities Clearing Corporation on the cut-off date which shall be decided through a decision on the use of distributable profit at each time.

The shareholder is obliged, when requested to inform the Company on the eventual form of the dividend transfer (data regarding the transaction account) and company registration number or PIN and tax number. If the shareholder fails to do so, the dividend will not be paid out in accordance with the provisions of the Statute.

Attendance at General Meetings

The right to participate and vote at the General Meeting of Shareholders is held by those shareholders who have been entered into the share register of dematerialized shares at the Central Securities Clearing Corporation by the end of the fourth day prior to the convocation of a General Meeting (cut-off date) and who personally, or through a representative or nominee, gave notification of their attendance to the Management Board of the Company by the end of the fourth day prior to the convocation of the General Meeting.

Members of the Management Board and Supervisory Board may attend the General Meeting even if they are not shareholders Media representatives may also attend the General Meeting if they give notification of their attendance to the Management Board of the Company in writing within three days at the latest prior to the convocation of the General Meeting.

Convocation and implementation of the General Meeting of Shareholders

A General Meeting of Shareholders is convened when it is for the benefit of the Company or when it is necessary in accordance with law and the Statute of the Company. A regular General Meeting of Shareholders is convened once a year at Pivovarna Laško, d. d. The 17th regular General Meeting of Shareholders of Pivovarna Laško, d. d. was convened on 21 May 2011 and held on 24 June 2011.

Decisions of the General Meeting

The following important decisions were adopted at the 17th regular General Meeting regarding the denoted point in the agenda:

Resolutions to Item 2:

2.1. The General Meeting shall be acquainted with the Report of the Supervisory Board of the Company regarding the examination and adoption of the Audited Annual Report for 2010.



2.2. The General Meeting shall be informed that as at 31 December 2010 net operating loss for 2010 amounted to EUR 6,292,260 and that the Management Board with the Supervisory Board's consent covered this loss through other profit reserves in the amount of EUR 542,466 and capital reserves in the amount of EUR 5,749,794. 2.3. The General Meeting shall be acquainted with the remuneration of the Management Board and members of the Supervisory Board of the Company for the 2010 business year.

2.4. The General Meeting shall be acquainted that in accordance with Article 327 of the Companies Act and based on the findings of the Report on the Findings of a Special Audit of the Management of Individual Transactions of Pivovarna Laško, d. d., dated 27 February 2010, an action for damages was filed on 12 January 2011 within the legally prescribed deadline.

2.5.1. The General Meeting shall grant discharges to the members of the Supervisory Board of the Company for the 2010 business year.

2.5.2. The General Meeting shall grant discharges to the members of the Supervisory Board of the Company for the 2010 business year.

Resolutions to Item 3:

The Statute of the Company shall be amended so that Article 12 of the Statute shall read:

“Article 12” The Management Board runs the company independently and on its own responsibi-lity.

The Management Board of the Company may have a maximum of five members, one of whom shall be appointed the Chairman of the Management Board. The Chairman and members of the Management Board shall be appointed and recalled by the Supervisory Board, whereby the members of the Management Board shall be appointed at the Chairman of the Management Board's recommendation.

The mandate of the Chairman and members of the Management Board shall be five years.

The Management Board shall adopt decisions according to the majority of votes cast by the members of the Management Board and in the case of a two-member Management Board, by consensus. The Chairman and members of the Management Board shall each have one vote.

The Chairman of the Management Board and one of the Management Board members together shall represent and act on behalf of the Company.

The Management Board shall with the consent of the Supervisory Board adopt the Rules of Procedure of the Management Board with which the manner of work and competences and responsibilities of individual members of the Management Board shall be regulated in connection to managing the business of the Company.



Resolution to Item 7:

Borut Jamnik and Dr. Borut Bratina shall be appointed as members of the Supervisory Board – representatives of capital for a mandate which shall commence on the day of their appointment which shall expire on 31 August 2013.

Resolution to Item 8:

The General Meeting shall appoint the auditing firm Deloitte Revizija d.o.o., Ljubljana as auditor of the Company for the audit of financial statements for 2011.

The top five shareholders who had voting rights at the General Meeting were (by number of votes and percentage of all shares in share capital):

Hypo Alpe Adria Bank AG – 618,202 shares or 7.07%,

Kapitalska družba, d. d. – 617,488 shares or 7.06%,

Probanka, d. d. – 614,911 shares or 7.03%,

GB, d. d., Kranj – 542,448 shares or 6.20%,

Skagen Kon-Tiki Verdipapirfond – 499,286 shares or 5.71%.

The top five shareholders at the General Meeting had a total of 2,892,335 votes or a 33.06% share of all shares of the Company or 45.18% share of voting rights and 57.77% share of capital present.

NLB, d. d. as the largest shareholder of the Company at the General Meeting had no voting rights.

The proposed resolution (item 4) in connection to increasing share capital through a capital increase was not adopted for less than 75% of the votes were cast in favour of the resolution.

Items 5 and 6 were removed from the agenda of the General Meeting for the following reason:

Additional unresolved questions arose from creditors following the convocation of the general meeting which need to be resolved prior to deciding on a contractual concern. In the mutual interest of the Company, the shareholders and important creditors mutually agreed on the design of a contractual concern which will be a subject of decision-making at an extraordinary general meeting which will be convened by the end of this year.

Convocation and implementation of the General Meeting of Shareholders

The extraordinary 18th General Meeting of Shareholders was convened on 15 July 2011 and implemented on 30 July 2011.



Decisions of the General Meeting

The General Meeting was acquainted with and adopted the following important decisions at the 18th extraordinary General Meeting of Shareholders of Pivovarna Laško, d. d.:

Resolution to item 2 (in opposition to the proposal of the shareholder Mirjam Hočevar):

The General Meeting gives its consent for the item of business for which the Management Board of the Company requires the consent of the General Meeting in accordance with Article 47 of the Takeovers Act (ZPre-1), namely:

a.) The General Meeting of Shareholders of the company Pivovarna Laško, d. d. gives its consent that the companies of the Pivovarna Laško Group (Pivovarna Laško, d. d. and its subsidiaries Pivovarna Union, d. d. and Radenska, d. d.), may continue the sale of the shares of the company Poslovni sistem Mercator, d. d. in accordance with the Agreement on the Joint Sale of Shares of the company Poslovni sistem Mercator, d. d., no. 2011/0601 concluded on 15 June 2011 and that they conclude a mandate contract with a consultant for the sale, i.e. ING Bank, N. V., London. This consent does not grant consent for the final execution or sale of shares of the company Poslovni sistem Mercator, d. d.

b.) The General Meeting of Shareholders of the company Pivovarna Laško, d. d. agree that the subsidiary company Pivovarna Union, d. d. sell the companies Nectar, d. o. o., Bačka Palanka, Republic of Slovenia, 2,348,470 registered nominal shares with the ticker symbol FRAG of the issuing company Fructal, d. d., which represents a 93.7% stake in the share capital of Fructal, d. d. for a price of EUR 35.3 million.

The top five shareholders who had voting rights at the General Meeting were (by number of votes and percentage of all shares in share capital):

Hypo Alpe Adria Bank AG – 618,202 shares or 7.07%,

Kapitalska družba, d. d. – 617,488 shares or 7.06%,

Probanka, d. d. – 614,911 shares or 7.03%,

GB, d. d., Kranj – 542,448 shares or 6.20%,

NFD 1, delniški investicijski sklad, d. d. – 446,465 shares or 5.10%.

The top five shareholders at the General Meeting had a total of 2,389,514 votes or a 32.46% share of all shares of the Company or 44.36% share of voting rights and 67.84% share of capital present. NLB, d. d. as the largest shareholder of the Company at the General Meeting had no voting rights.



Supervisory Board The fundamental function of the Supervisory Board is to supervise the management of the Company's business operations. The Supervisory Board appoints the members and Chairman of the Management Board which can have a maximum of five members.

The composition of the Supervisory Board is defined by the Statute of the Company. The Supervisory Board of Pivovarna Laško, d. d. has six members, each of whom has the same rights and responsibilities unless otherwise stipulated by the Statute. Four members of the Supervisory Board elected by the General Meeting of Shareholders are capital representatives, while the other two members of the Supervisory Board are workers' representatives and are elected by the Worker’s Council.

The Supervisory Board is appointed by the General Meeting of Shareholders through a simple majority vote of the shareholders in attendance, except for the members of the Supervisory Board elected by the Worker’s Council. The members of the Supervisory Board are elected for a period of four years and may be re-elected after the expiry of their mandates. The Supervisory Board appoints the Chairman and Deputy Chairman of the Supervisory Board from amongst their members.

The Chairman convenes and chairs the sessions of the Supervisory Board and is authorised to declare its will and announce decisions adopted by the Supervisory Board. The Chairman of the Supervisory Board represents the Company in disputes with the members of the Management Board and the Supervisory Board represents the Company in disputes against other bodies of the Company and third parties, if not otherwise agreed for each particular case. The Chairman of the Supervisory Board is always the representative of the shareholders. Sessions of the Supervisory Board are convened by the Chairman on his own initiative, on the initiative of any member of the Supervisory Board, or on the initiative of the Management Board. The Supervisory Board takes decisions at the sessions.

The Supervisory Board must within one month from the submission of the annual report review the annual report and proposal for use of the distributable profit and draft a written report for the General Meeting of Shareholders and deliver it to the Management Board. If the Supervisory Board confirms the annual report, the annual report is adopted. Composition of the Supervisory Board Composition of the Supervisory Board as at 31 December 2010 as at 30 June 2011

Representatives of capital: Representatives of capital: Marjan Mačkošek, Chairman Dr. Vladimir Malenković Dr. Peter Groznik Dr. Peter Groznik Dr. Vladimir Malenković Borut Bratina Borut Jamnik



Employee representatives: Employee representatives: Andrej Kebe, Deputy Chairman Andrej Kebe, Deputy Chairman Bojan Košak (Dragica Čepin – as of 4 August 2011) Changes to the Supervisory Board of Pivovarna Laško, d. d.

The changes are described on page 10 of this Semi-Annual Report.

Changes to the Management Board of Pivovarna Laško, d. d. following the conclusion of the semi-annual period


Changes in the supervisory boards of subsidiaries


Audit Committee of the Supervisory Board of Pivovarna Laško, d. d.

The tasks of the Audit Committee are defined in Article 280 of the Companies Act, with key tasks comprising:

monitoring of the financial reporting process and statutory audits of the annual and consolidated financial statements,

review and monitoring of the independence of the auditor for the Company’s annual report,

proposal to the Supervisory Board for the appointment of a candidate as auditor of the annual report,

supervision over the integrity of financial information provided by the Company,

assessment of the drawn-up annual report including the drafting of proposals for the Supervisory Board.

Composition of the Audit Committee Composition of the Audit Committee as at 31 December 2010 as at 30 June 2011

Dr. Peter Groznik - Chairman Dr. Peter Groznik - Chairman Bojan Košak Bojan Košak Marko Koleša Marko Koleša

Changes to the Audit Committee of the Supervisory Board of Pivovarna Laško, d. d.





Management Board

The Management Board runs the Company and adopts business decisions independently and at its own risk and represents the Company in disputes with third parties, adopts the Company's development strategy, ensures proper management and treatment of risks, acts with due care and diligence and protects the business secrets of the Company.

The Management Board of Pivovarna Laško, d. d. had three members as at 30 June 2011: Dušan Zorko, MSc – Chairman of the Managment Board, Gorazd Lukman – member of the Management Board, responsible for the areas of sales and commerce and Mirjam Hočevar – member of the Management Board, responsible for finance. Composition of the Management Board Composition of the Management Board as at 31 December 2010 as at 30 June 2011

Dušan Zorko, MSc - Chairman Dušan Zorko, MSc - Chairman Robert Šega Gorazd Lukman – until 31 March 2011 Mirjam Hočevar Gorazd Lukman – since 1 April 2011 Marjeta Zevnik – since 5 August 2011 Matej Oset – since 5 August 2011

Changes to the composition of the Management Board of Pivovarna Laško, d. d.


Changes to the Management Board of Pivovarna Laško, d. d. following the conclusion of the semi-annual period


Changes in the management boards of subsidiaries


Semi-Annual Report 2011 / Business report

BUSINESS REPORT OPERATIONS OF THE PIVOVARNA LAŠKO GROUP For the first half of the current year it was established that quite a few factors had an influence on the operating results of the parent company and Pivovarna Laško Group which they did not have a direct effect upon. The effect of the economic crisis on the living standard of the Slovenian population should be emphasized as well as the fact that the first month of the current year was expressly unfriendly to consumers of soft drinks, particularly beer. Despite the aforementioned problems the companies in the Pivovarna Laško Group managed to successfully exceed the achievements of 2010 for this period and establish conditions that will ensure that the entire 2011 business year is more successful than the previous year. General data

Pivovarna PivovarnaLaško Group Laško Group

1/1-30/6/2011 1/1-30/6/2010

Parent Parentcompany company

1/1-30/6/2011 1/1-30/6/2010( in EUR )

Net sales revenues 161,315,994 48,454,487 155,466,546 47,517,387

EBIT 13,191,109 6,574,445 14,381,763 7,951,369

EBITDA 21,938,544 9,928,345 27,391,097 11,394,802

Net profit -1,188,481 2,824,486 6,198,715 1,957,872

Assets (30/6) 671,737,758 431,341,532 636,851,701 415,857,280

Equity (30/6) 149,017,539 127,821,172 131,889,003 124,168,015

Liabilities (30/6) 522,720,219 303,520,360 504,962,698 291,689,265

Number of employees (30/6) 1,883 328 1,956 325

Number of shareholders (30/6) - 7,691 - 8,119

The Pivovarna Laško Group (hereinafter: Group) sold a total of 2,168,233 million hl of all types of beverages in the period January – June 2011 exceeding the quantities sold in the same period last year. Planned sales for the period were not achieved.

The most important segment within the sales structure was the production of beer which in the analysed period represented a 45.3% share of the total sale of beverages of the Group. Sales of beer in comparison to the semi-annual period of last year grew by 4.8%. Sales growth was also attained in the mineral waters segment which experienced a growth of 6.3%. Sales of soft drinks and syrups and fruit puree remained at the previous year’s level, while lower sales were recorded in the spring natural waters, flavoured waters and fruit juices segments which saw a decline of from 2 to 3%.



Overall sale of all beverages of the Group

Index Index

( in hectolitres ) I.-VI./2011 I.-VI./2010 Plans 2011 2010=100 l.pl.=100

Pivovarna Laško 496,399 498,538 1,114,800 99.6 44.5

Pivovarna Union 739,836 691,072 1,444,130 107.1 51.2

Radenska Radenci 464,716 450,029 1,032,464 103.3 45.0

Fructal Ajdovščina 353,583 351,061 721,005 100.7 49.0

Fruktal MAK Skopje 43,844 50,043 111,381 87.6 39.4

Vital Mestinje 69,855 74,499 147,189 93.8 47.5

T O T A L 2,168,233 2,115,242 4,570,969 102.5 47.4



OPERATIONS OF THE PARENT COMPANY PIVOVARNA LAŠKO, d. d.

Summary of the Business Plans for 2011

Fundamental business guidelines

The joint-stock company Pivovarna Laška which has followed a 185-year of beer production in Laško can boast of having successfully concluded the project of joining Slovenian beer producers. It is the largest beer brewery in Slovenia with a visible market share which exceeded 40% in the current year.

The Pivovarna Laško Group brings together producers of beer, mineral, spring and natural waters, non-alcoholic beverages, spirits and other alcoholic beverages and syrups for making beverages. It is also involved in newspaper and publishing activities, retail and wholesale trade activities and postal and courier activities. Nevertheless its focus remains on its primary activity – beverage production.

Mission

We create brands with added value for our customers and shareholders. With responsible and environmentally-friendly operations we strive to achieve superior results in a better world.

Vision

To become the leader in the production and sales of beverages. To strengthen the reputation and recognition of individual recognised brands on both domestic and foreign markets and increase market shares on individual markets.

Strategic objectives

Production and sale of innovative trendy products, maintaining the market positions of own brands on the domestic market and renewed acquisition and expansion of already attained positions on foreign markets in the past. Planned cost effectiveness will be achieved with the aid of expertly qualified colleagues operating as a team and in accordance with the Pivovarna Laško Group’s strategic orientation. Key data on planned operations of the Company

( in EUR thousand ) Plans 2011 Achieved 2010

Total revenue from operations 100,620 95,326

Net profit 4,934 -6,292



Annual Objectives of the Business Policy Growth – increase in scope of sales

Quantitative growth in beverage sales 8.1% Development – investments into fixed assets

Investments EUR 3,000 thousand

Acquisition of fixed assets EUR 899 thousand Sales The total quantity of sales of all beverages of Pivovarna Laško, d. d. amounted to 496,399 hl in the first half of 2011 of which 96.6% comprised sales of beer, 3.0% sales of waters and 0.4% sales of remaining alcoholic beverages.

In comparison to the same period last year, the parent company Pivovarna Laško, d. d. sold 2.140 hl less beverages which is 0.4% less than the quantity last year and less than half of the daily sale in the pre-season period.

The Company shows an index of 87.7 with respect to planned total sales in the period of analysis. The new product iC Cider displayed the greatest decline within the planned quantities of sales with an index of 83.1 with beer displaying an index of 88.6 with regard to planned quantities.

Sales in Slovenia

Seventy percent of all beer sales were realised on the Slovenian market. Beer sales on the Slovenian market were 5.2% lower than the same period of last year. Distribution centres were responsible for 19% of all beer sales while 81% of the sales were realised via wholesale deliveries from the central warehouse of Pivovarna Laško.

Waters are sold entirely on the domestic market. Realisation was 9% higher than for the same period last year. Distribution centres were responsible for 28% of all sales of waters while 72% of the sales were realised via wholesale deliveries from the central warehouse of Pivovarna Laško.

Distribution from the central warehouse increased this year due to a key Slovenian buyer changing its method of supply. The central warehouse of Pivovarna Laško now supplies this buyer since 1 January 2011 onwards.

Pivovarna Laško, d. d. consistently monitors global trends in the alcoholic and non-alcoholic beverage industry and changes in the habits of consumers.

The greatest novelties this year are the beverages Laško malt (malt-based sift drink in apple and peach flavours) and the apple cider iC Cider.



Changes in the sales assortment:

a beer with an additive Bandidos Sun 0.33 l in non-returnable bottles (singles and six-packs) was introduced on the Slovenian market in March,

the sweet beverage in the Malt apple 0.33 l and Malt peach 0.33 l flavours in returnable bottles was introduced on the Slovenian market in March,

the beer Laško Trim 0.5 l in returnable bottles was introduced on the Slovenian market in March,

the apple cider iC Cider 0.4 l in non-returnable bottles (singles and three-packs) was introduced on the Slovenian market in April,

the draft beer Laško Zlatorog in 10 l returnable SmartDraft kegs was introduced on the Slovenian market in the catering sector in April,

the sweet beverage in the Malt apple 0.5 l and Malt peach 0.5 l flavours in cans was introduced on the Slovenian market in June,

the Company began filling beer under the Tuš trademark in cans (singles and six-packs) at the beginning of the year,

the Company began filling beer under the Lidl trademark (Deep) in 1.5 l plastic bottles in March,

the Company filled Zlatorog 0.5 l cans in four-packs for the Lidl discount chain,

the Company terminated the product Bandidos Cuba Libre.

The Company increased the prices of beer by individual product from 2 – 8%. The prices of waters remained unchanged. The Company increased the number of promotions in 2011 and managed to prevent a decline in sales compared to the semi-annual period of last year.

The quantitative market shares of beer sales on the Slovenian market for the period January – April 2011 are as follow: Pivovarna Laško BZ 39.1%, Pivovarna Laško TBZ 0.9%, Pivovarna Union BZ 39.7%, Pivovarna Union TBZ 6.9%, beer for export 13.4%.

Sales in Slovenia through the Horeca channel

Pivovarna Laško, d. d. is responsible for the distribution of the products of the Pivovarna Laško Group via Horeca in Slovenia.

Sales of products within the entire Pivovarna Laško Group within the Horeca channel remained on the same level as 2010, meaning continued growth of the market share in comparison with other Horeca distributors.. The increased satisfaction of the Compnay’s customers is confirmed by the number of new direct buyers and satisfaction displayed in a survey carried out by the independent agency Aragon.

Changes have been ascertained in customer habits, particularly in the area of beer and water consumption which signifies a strong increase in low-alcohol beers and stagnation or decline in the sales of classic beer. This trend was also influenced by the stricter road legislation which imposes stricter fines.



The Company implemented 1100 events and 500 parties throughout Slovenia.

It also implemented 55,000 customer visits.

The process for ordering equipment for events was automated using software.

The publication of advertising materials was also automated using software.

The Company commenced with the Draft Beer programme.

Sales on Foreign Markets

Pivovarna Laško, d. d. is aware of the extreme importance of foreign markets for sales growth therefore sales and marketing activities in strategic foreign markets were increased in 2011.

Sales on foreign markets showed a growth trend in the first half of 2011. Export sales comprised 145,134 hl signifying a 9% increase over the figure in 2010.

Countries of south-eastern Europe (Bosnia and Herzegovina, Croatia, Serbia, Montenegro, Macedonia, Albania, Kosovo, Moldova) promote mutual trade without customs duties. On the basis of a stability pact for south-eastern Europe domestic producers of beer and non-alcoholic beverages possess a preferential status thereby posing extreme competition for the Company’s products.

Operating conditions (economic, commercial and political situation) on the export markets of south-eastern Europe remain unstable. The main problems this year represent decreased liquidity of customers and extension of payment deadlines.

The development of store chains is becoming increasingly stronger requiring increasingly greater sales condition and giving precedence to their own brand names or those of national producers, Sales in Croatia

Pivovarna Laško, d. d. established a new subsidiary Laško Grupa, d. o. o., with its registered office in Zagreb at the beginning of December 2010. The new company's main task is to promote sales in the Horeca channel and stores with the aim of increasing sales of products of Pivovarna Laško and the entire Pivovarna Laško Group.

The sales results of both Pivovarna Laško and those of other members of the Group in the Croatian market prove the correctness of the Company’s decision for its establishment. Our own sales team managed to not only stop the decline in sales of Company products on the Croatian market but also achieve significant growth.

In the first half of 2011 sales to the Croatia distributor amounted to 45,603 hectalitres of Pivovarna Laško products representing a 53% increase over the same period in 2010 (excluding sales of Jadranska pivovarna in 2010). Based on data obtained from the distributor, actual use of Laško beer has an index of 109 and Kaltenberg beer 82.



The growth of beer mixtures as in Slovenia is experiencing extreme growth on the Croatian market.

Pivovarna Laško, d. d. also concluded a contract on the production and supply of trademark beers with the department store chain Konzum, d. d. The supplying of beer will commence in the second half of 2011. Sales in Bosnia and Herzegovina

The Pivovarna Laško Group established a new organisational market approach on the Bosnian and Herzegovina market. All distributors sell the complete assortment of the Group thereby ensuring improved sales coverage.

The subsidiary RA&LA, d. o. o. which was renamed Laško Grupa, d. o. o., Sarajevo on 5 July 2011 operates on this market with the objective of promoting the sale of products of all companies in the Group. Despite the initial problems encountered in establishing a standardised market approach, this market is already showing visibly positive results with the Group selling more than in the same period in 2010 thereby stopping the decline of sales of Pivovarna Laško products.

In the future the Group and Laško Grupa Sarajevo will require its own sales promotion team (based on the Laško grupa Croatia model) which will ensure sales promotion for both the Horeca channel and in stores. Pivovarna laško, d. d. sold 14,013 hl piva in this market representing a 22% increase in comparison to 2010. Sales in Serbia

The Company also managed to turnaround the downward trend in sales on the Serbian market. Considering the decline in sales of domestic producers, the growth in products of the Group is quite encouraging and reflects a more qualitative and organized market approach.

The Group possesses brand names which are widely recognized and known for their quality. The largest problem involves price positioning, entry duties and the low prices of domestic producers especially of the non-alcoholic beverage programme which poses the greatest competition. Pivovarna Laško, d. d. sold 3,354 hl of beer in the first half of 2011 in this market, reflecting a 36% increase in comparison to 2010. Sales in Macedonia

In accordance with its new business policy, the Group also envisaged synergies from the reconciled operations of all members of the Group.

Sales were in line with expectations for in comparison to 2010 the Company did not yet include beer in 2 l PET packaging in its product assortment. Marketing sales activities were heightened. The beer of the brewery Skopska pivovarna together with



the licensed beers Heineken, Amstel, Zipfer still maintains the leading position on the market. Pivovarna Laško, d. d. sold 5,654 hl of beer in the first half of 2011, representing a 36% increase over 2010.

Sales in Montenegro

Growth was recorded in the first half of the year on the Montenegrin market predominantly due to the placement of beer packaged in 2 l PET bottles in all Mercator stores which has become the key trader on the market as well as increased consumption of draft beer due to the greater number of tourists. Pivovarna Laško, d. d. sold 1,732 hl of beer in the first half of 2011, representing a 124% increase over 2010.

Sales in Kosovo

The reconciled operations of the Group also led to changes on the market of Kosovo. The brewary Birra Peja commenced licensed production of Laško Zlatorog beer for sales on the markets of Kosovo, Macedonia and Montenegro.

A drastic increase in the prices of customs duties and consequently larger inventories of the distributor was observed last year due to which sales results can only be compared in the 3rd quarter of 2011. Pivovarna Laško, d. d. sold 4,083 hl of beer in the first half of 2011, representing a 55% decrease over 2010.

Sales in the EU and other markets

Sales in hectolitres by individual market for the period January – June 2011:

Index

Markets Sales I.-VI./2011 I.-VI.11/I.-VI.10

Italija 64,548 109.1

Italija Laško beer 22,747 117.1

Italija Ceres 41,801 105.2

Avstija 4,447 114.4

Kitajska 2,097 57.8

Other export markets 4,679 87.4

Total 75,771 111.9

Sales of Pivovarna Laško products on the Italian market for the first half year displayed an index of 117 with sales of Ceres beer also increasing by 5% which the Company fills via easement for the brewery group Royal Unibrew of Denmark. Sales of beer in Austria displayed an index of 114 in this period. The Company commenced sales of beer in China in 2011 which according to global brewers is the largest potential beer market in the world currently. A total of 2,097 hl of beer was imported to China in the first half of the year. Sales on remaining markets had an index of 100 for this period in comparison to the previous year.



Risk Management In their business operations Pivovarna Laško, d. d., and Pivovarna Laško Group are exposed to various business and financial risks, which are in most cases efficiently managed with an active and comprehensive approach.

Business risks

The activity of beverage production is exposed to the seasonal nature of consumption. This way business risks are also related to weather conditions during the seasonal summer period.

Taking into account that the Company achieves almost 14.7 % of its physical realization on markets outside the European Union, business risks in this sales area are also exposed to possible unilateral measures of these countries, which could deteriorate marketing conditions on these markets So as to avoid possible surprises on strategic markets, the Company also monitors the strategy for these markets.

Intellectual property or trademarks are exposed to certain risks in appearing on the market of another producer, and that is why all our trademarks are protected at Office for Intellectual Property Protection.

Reliability of suppliers and contractors is moderately exposed, and for the purposes of preventing business interruptions in this particular segment, the Company utilizes input control of the raw materials' quality and of intermediate goods. Normally, the Company has two or more suppliers for the supply of the same type of goods.

Availability of production capacities is party exposed to business risks, mainly due to possible machinery breakdown. In order to avoid these production disturbances, the company ensures the smooth operation of production facilities with regular annual planned maintenance and preventive ongoing maintenance works.

Environmental protection - the business environment is exposed to business risks due to wastewater generated in the production process. The company has reduced this risk to a minimum by activating a wastewater treatment plant. Regular monitoring of adverse impacts on the environment has an additional impact on environmental protection.

Protection of assets - by implementing a protection plan regarding threats or managing its assets, the Company has reached a level which enables the timely detection of an event and consequently the possibility of prompt elimination of the consequences.



Through continuous review of work conditions in the production process and the improvement thereof and concern for employee health and satisfaction risks connected to human resources management are quite small.

Through the ongoing and constant upgrading of information and communications technology, the Company ensures stable, secure and reliable information support to business processes. This business policy endeavours to reduce risks connected to information and communications technology (ICT) to the lowest possible level.

Risk Management at Pivovarna Laško, d. d.

To ensure the long-term stability of the Company's operations, concurrent and detailed monitoring and assessment of financial risks are required. In 2011 the Company again followed the objective of achieving stable operations and reducing exposure to individual risks to an optimal level. Particularly significant among financial risks are credit risk, interest rate risk, currency risk and liquidity risk. Exposure to particular types of financial risks and measures for protection against them is implemented in the company and evaluated based on the impacts on cash flows. Credit risks include all those risks affecting the decline of the company's

economic benefit due to insolvency of the company's business partners (buyers) and failure to meet their contractual obligations. To this end, the Company supervises and monitors financial claims of its customers, both wholesalers and buyers in retail sale. In most cases the Company does business with known and verified business partners whose credit ratings are monitored on an ongoing basis while suitable limits are formed for individual partners. Buyers displaying a markedly low credit rating are provided with goods only on an advance payment basis. In this manner buyers are restricted from purchasing goods exceeding their payment capacities. The Company utilizes mutual and chain compensations to manage credit risk which also have a positive effect on ensuring adequate cash flows for the Company. Accounts receivables are insured with traditional instruments for claim insurance, such as: bill, bank guarantee and mortgage. The company concurrently monitors claims per business partners and per their maturity, and contributes to improving the payment discipline of its buyers by prompt collection, charging interest on late payments, writing reminders, and with judicial recovery of debts due. The Company contributes additionally to improving the payment discipline of its buyers through the charging of default interest, written reminders and judicial recovery of outstanding receivables as well as minimizing write-offs of unrecoverable receivables. The Company did not record significant write-offs of receivables due to buyer non-payment in 2011. Credit risks are managed and represent a moderate rate of exposure for the Company.



Interest rate risks represent the possibility change in the interest rate on the financial market, mainly due to taking out long-term loans linked to a variable interest rate (EURIBOR) which has already displayed an upward movement since the second half of last year. Based on forecasted economic data for the Euro zone it can be expected that the ECB will again increase the key interest rate to around 1.75% to the end of the year and even to 2.00% to the first quarter of the upcoming year. Financing under variable interest rate conditions represents one third of all Company financing while the other two thirds represents loans with a fixed interest rate. The Company concluded an interest rate swap in 2010 thereby protecting a good 20% of its long-term loans against growth of the reference interest rate in the upcoming three years. In accordance with the long-term strategy of the Company and Pivovarna Laško Group for 2011, a decrease in debt in the financing segment under variable conditions is envisages, therefore the Company has not decided for interest rate protection when concluding additional transactions. The hedging of interest rates is undoubtedly a good idea in the case of long-term debt based on variable interest rates; the Company’s loan principals fall due in the next three years. The Company achieved an agreement with bank creditors regarding a payment moratorium for all long-term credit instalments and to extend the payment deadlines of all short-term loans till 30 September 2011. Events on the financial market are monitored as due to the high degree of indebtedness the Company will have to conclude an appropriate interest-rate hedge in the correct moment. The Company's exposure to interest rate risks is assessed as still high, but nevertheless, manageable.

Currency risk is not a subject of the Company's exposure in 2011 as exports and imports are implemented in EUR. Furthermore, the structure of the Company's foreign sources of funding entirely consists of loans in the common currency of the European Monetary Union.

Liquidity risk: such risk is connected to the effects of the recession on decreased loan capital of banks and stricter credit conditions. The Financial Operations, Insolvency Proceedings and Compulsory Dissolution Act, among other things, governs the financial operations of legal entities. Particularly significant among financial risks is liquidity risk, which means the risk of loss due to short-term and long-term insolvency. In addition, the Company needs to monitor and ensure capital adequacy, which means that the Company must always have sufficient long-term financial resources at its disposal with regard to the volume and type of business it carries out. The Company must ensure an adequate ratio between short-term liabilities and current assets. The Company disclosed an excess of current liabilities over current assets for the first six-month period, which means the existence of a significant liquidity risk. In order to avoid insolvency the Company manages liquidity risk, and forms and implements a regular liquidity management policy, which includes planning the expected cash outflows and sufficient cash inflows for them, bearing in mind the normal course of business operations and possible positions of liquidity crises. The Company establishes current and future needs for cash



with the support of the business information system on a daily, weekly and monthly basis. The Company ensures coverage of possible daily liquidity deficiencies through suitable credit lines for the short-term regulation of cash flows in the form of revolving credits and the allowable transaction account limits. Discussions in the sense of creating complete solutions in the form of a reprogramming of all Company financing liabilities for an extended period are carried out with bank creditors on an ongoing basis. Currently, all financial liabilities arising from the principals of long- and short-term loans have been extended to 30 September 2011. In November of last year the Company requested approval of a short-term loan from a bank consortium under the Abanka agency which due to the various viewpoints of participating banks regarding the proposed insurance, is still undergoing the approval phase. Abanka already approved an advance in December 2010 in the amount of EUR 6 million under the auspices of the aforementioned syndicated loan to finance the Company’s liabilities to the State. The loan is currently insured merely through bills therefore since May of this year due to unsuitable insurance on matured items is however considering the approval activities which are still underway, the Company assesses that this financing will be suitably arranged by the end of August. All loans taken at banks are adequately insured. All larger financial outflows are first planned for and covered through future financial inflows from operating activities and from short-term financing sources. In a smiliar manner, the Group also manages long-term payment solvency risks. Since the end of last year activities involving the divestment of all Company investments which are not key to its basic activity have been underway. Based on the current events in the Slovenian economic and political space, no significant progress is expected in this area until the end of this year. The Group assesses based on the aforementioned that its exposure to liquidity risk is extremely high due to the situation on the financial market, as well as in the entire economic space and requires special attention.

Managing the financial risks of the Pivovarna Laško Group

Business operations expose the Pivovarna Laško Group to the following risks: credit risk, interest rate risk, currency risk, liquidity risk, etc. The entire activity of managing risks in the Group is focused on the unpredictability of financial markets and tries to minimize the potential negative effects of the financial performance of the Group. No particular working body is engaged in managing financial risks at the Group level; this is, namely, subject to the financial departments. Due to the global financial crisis of the last year, the stability of Group's operations became exposed to higher risks. As a result, the Group devotes considerably more attention and carries out more activities to manage these risks.



Credit risks include all those risks affecting the decline of the company's economic benefit due to insolvency of the company's business partners (buyers) and failure to meet their contractual obligations. To this end, the Group supervises and monitors the financial claims of its customers, both wholesalers and retailers. In most cases deals with known and verified business partners whose reliability and credit rating is monitored on an ongoing basis are concluded. The method of classifying buyers in credit rating classes and defining supply limits for individual buyers based on the provisions of sales contracts is also used The Group implements mutual and chain compensations, thereby additionally contributing to the management of the Group’s current liquidity. Accounts receivables are insured with traditional instruments for claim insurance, such as: bill, bank guarantees and mortgages. Receivables of business partners and their maturities are concurrently monitored with reminders issued concurrently, default interest calculated, written reminders and judicial recovery of matured receivables thereby contributing to improved customer payment discipline. For buyers where insurance cannot be reliably ensured, transactions are carried out on the basis of advance payments. Credit risks are managed and represent a moderate rate of exposure for the Group.

Interest rate risks represent the possibility change in the interest rate on the financial market, mainly due to taking out long-term loans linked to a variable interest rate (EURIBOR). The companies in the Group concluded an interest rate swap in 2010 thereby protecting a portion of their long-term loans against growth of the reference interest rate in the upcoming three years. In accordance with the long-term strategy of the Company and Pivovarna Laško Group for 2011, a decrease in debt in the financing segment under variable conditions is envisaged, therefore the Group has not decided for interest rate hedging to hedge the complete or a portion of the loan portfolio tied to the variable interest rate. The Group’s exposure to interest rate risks is assessed as still high, but nevertheless manageable.

Currency risk was negligible in the business operations of the Group in 2011 because the structure of Group's foreign business operations was mainly linked to EUR both with regard to supply and sales and the financial segment. Currency risk is assessed as low in other currencies due to the insignificance of these business operations

Liquidity risk arises from the possibility of a deficit of available financial resources and consequently the Group's inability to settle its liabilities within the agreed periods—both current operating liabilities as well as financial liabilities. The liquidity risk of the Pivovarna Laško Group is, with regard to the situation on the financial market as well as in the entire economic space, high, but on the other hand quite manageable based on the activities carried out by the companies of the Group in this regard. The objective is to ensure suitable liquidity of the parent and subsidiary companies and enable all companies in the Group financing under the most favourable conditions. The Group



consistently carries out a policy of regular liquidity management, which includes planning and monitoring cash inflows, and through the aid of suitable credit lines for short-term regulation of cash flows, although with quite some effort especially in during the non-seasonal period, successfully manages liquidity risk. Financing conditions deteriorated in the past year due to increased guarantees for loans taken out. The Group still has open credit lines on the short-term financial market in the form of revolving credits and allowable limits on transaction accounts. In addition, the Group also applies allocating surpluses and deficits of financial assets within the framework of the Group in the short run. Since the end of last year activities involving the divestment of all Group investments which are not strategically significant have been underway. Consequently, a contract on the sale of the stake in the company Fructal d.d. under the ownership of Pivovarna Union d.d. was signed. Conclusion of the transaction is envisaged for the end of 2011 which will lead to a reduction of the Group’s indebtedness. All larger financial outflows are first planned for and covered through future financial inflows from operating activities and from short-term financing sources. In a smiliar manner, the Group also manages long-term payment solvency risks. The Group assesses its exposure to liquidity risk to be extremely high due to the situation on the financial market, as well as in the entire economic space and requires special attention.



Marketing activities The integration of the economic and broader social environment dictates the dynamics of the Group’s operations and defines each step it takes. The Company realises that its 186-year history is based on a future-oriented vision and not past achievements. Affinity with changes and dedication to continuous development has enabled the Company to grow and become stronger, reflecting the same determination with which the Company stepped into the new season.

The Company countered the unenviable economic situation through ongoing break down of its product assortment which due to a decrease in the quantity and value of the market is important for maintaining its market share. along with quantitative and value The existing product assortment was supplemented with five novelties – the light beer Laško Trim, non-alcoholic sweet apple Malt and peach Malt beverages, new Bandidos Sun in orange and guava flavours and apple cider wine iC Cider. Novelty has provided the power for advancement and will lead to successful operations for the key trademark Laško Zlatorog.

The superior products of Pivovarna Laško and suitable marketing and communications support again brought prestigious recognition from independent quality assessors and customers. Readers again chose Pivovarna Laško as the most-trusted brand of beer in a Slovenian survey regarding brand trust which was implemented by the magazine Reader's Digest for the fifth consecutive year. Laško Pivo was given the prestigious title of Trusted Brand. Laško beer again was chosed as the most-trusted brand of beer according to readers of Reader’s Digest for the third year in a row. Pivovarna Laško beverages received three gold medals at the prestigious international Monde Selection 2011 competition. All three beers entered received the gold medal: Laško Zlatorog, Laško Dark and Jubilejnik. In recent years, Bandidos Ice received the big gold medal in 2006 and Temno Laško the big gold medal in 2007. Four Pivovarna Laško beverages were awarded prestigious international recognition in 2010, winning three gold decorations and one silver. Laško Zlatorog Social responsibility and concern for the environment were the central themes of the Laško Zlatorog trademark project in the first six months. The aim of the advertising campaign entitled “Flaško nazaj v Laško” (Bring your bottle back to Laško), which included TV, printed, Web and social (Facebook and YouTube) media was to encourage the sale of returnable packaging. Sales promotion activities in stores (where customers purchasing crates received 2 free glasses) were implemented concurrently with PR ads in over 15 magazines and newspapers and communications on Facebook. After acquiring over 20,000 fans the Company implemented 2 prize games to notify and motivate Facebook consumers.

The “Severina” project was prepared for foreign markets to raise the recognition of the Laško brand. A TV commercial with the Croatian singer Severina in the lead role was recorded. Media ads included TV, printed, radio and Web advertising. The campaign



was supported with a national SMS prize game in Croatia and Bosnia and Herzegovina. Laško Club In the first six months the Company focused attention on raising the recognition and identification of the Laško Club brand name among premium beers.

The sales promotion was actively implemented in both the retail and Horeca channels. Communications and purchase of media and other advertising contents were implemented simultaneously for the purpose of presenting Laško Club beer within a variegated lifestyle and desire for celebration. Quite a number activities were thus implemented in the retail channel under the slogan: “Nakup z dodano vrednostjo” (Purchase with Additional Value).

Activities based on the set objectives are being carried out on all export markets with the exception of Bosnia and Herzegovina, where in addition to the national prize game on the Club and LaškoPET products, the Company signed a long-term cooperation agreement with the Sarajevo Film Festival until 2013. Within the scope of the aforementioned festival the Company redesigned the label on 0.33 l bottles and increased the scope of advertising contents and other activities (Laško Summer Nights - SFF). Laško Trim In line with the trend on the European beer market and in consideration of the growth of the lower content of alcoholic and less caloric beers, as a complimentary product to Laško light, the Company also prepared the light beer Laško Trim. This is a beer brand with a lower alcohol content which in contrast to the premium Laško light represents a light beer with standard positioning. Laško Malt Laško Malt is a carbonated sweet non-alcoholic beverage. The well-cooled beverage is naturally excellent. The decline in the market of light lager beer among other things also led to the growth of non-alcoholic and low alcohol beers. In response the Company supplemented the Laško line with the first non-alcoholic beverage which comes in apple and peach flavours and represents one of the foundations of Pivovarna Laško’s future. Bandidos The Bandidos brand which last year experienced rebirth and a completely renewed communications tone turned over a new page in the first half of 2011. Following the many successes of Bandidos in its 8-year history, 2011 marked the introduction of a new flavour with guidelines for the upcoming seasons already planned.



The orange and pink guava flavoured Bandidos follows the trend of mixed beers which currently is experiencing a growth in citrus flavours and represents the first Bandidos beers with fruit flavours. Considering the obvious decline in purchasing power of the market and also that of preferential consumers, it was confirmed following the first six months that the Company chose correctly and that the new Bandidos has successfully established itself among beers. iC Cider One of the novelties marking 2011 is iC Cider, the fruit of a number of years of development at Pivovarna Laško. In line with the trends on European novelties the Company has been diligently preparing the novelty since 2008 to mitigate the dilemma the light lager beer market has found itself in.

iC Cider is a young apple wine made from 100% apple juice. It comprises completely natural cider without additives, aromas and conservatives whose quality can compete with a number of prestigious European ciders. Oda Oda spring water, one of the best in Europe in terms of quality recorded a positive index in the first half of 2011. Activities for this brand which ranks in the water brand group were concentrated on BTL activities while no ATL activities in the sense of larger media purchases were carried out. In addition to rare occasional ads in wide-reaching printed media, Oda communications are based on newer media forms – the Web and social networks. A small prize game via the Facebook social network was implemented in the spring with another planned in August.

A promotional campaign in cooperation with the company Electrolux will be carried out on the Group level until September 2011 for markets in which the waters In Oda, Zala in Radenska (Radenska Classic in Naturelle) are present will also be implemented.



Report of the Technical Production Division The Company continued implementing several key projects in the first half of 2011 such as encouraging returnable packaging, energy renewal, logistics optimisation and gradual reconstruction of the production lines. By informatising production processes the Company aims to achieve improved exploitation of production lines, decrease fixed costs of product units and through improved personnel qualifications attain a highly productive level of work. The problems currently being faced by the technical production divisions of the entire Group include the excessive number of unqualified personnel and employees with specific work limitations. Additionally, a number of qualified personnel were lost in recent year due to premature retirement which have not all yet been replaced. As a result, it is expected that in addition to reorganisation in individual portions of the technical production divisions of the companies, the Group will also require competent personnel to ensure more effective management of production processes.

Investments in production resources are coordinated within the Group meaning that each of the companies in the Group has prepared an investment plan for the upcoming year which is reconciled on the Group level based on the financial capabilities of each individual company.

As the interests of the individual members of the Group which are based on quite similar activities – production of beer, waters and non-alcoholic beverages are quite similar, differing viewpoints arise regarding which individual production programmes at which company and location will be further developed.

The majority of the investment into the production means of the Group concluded at the end of the nineties of the previous century with equipment merely maintained in the last ten years.

Due to the financial weight of investments into production equipment which can also lead to savings in maintenance, energy and ecology, the long-term effects on costs is that much greater. This can lead to savings being more than doubled with the aid of carefully planned investments and accurate valuation of the basic costs of ownership throughout the entire lifetimes of production equipment in a 10-year period.

Through rigorous reduction of the costs of spare parts and maintenance services (in 2011 from 30 to 40% less than in 2010), which considering the age of the production equipment represents a large achievement, Pivovarna Laško has realised that it must begin investing into new production equipment when needed to stabilise the situation and production safety. Regardless, the Company will continue to implement strict control over the ordering of spare parts and set up priorities among individual production lines.

In today’s business world where development of products and services is extremely rapid a competitive advantage could be orientation towards end users as superior technology and development can enable the acquisition of completely new consumers whose key concern is an optimal relationship between price and quality. The



establishment of the highest criteria in all business process is undoubtedly the best guide to creating added value for buyers, owners and employees.

Production and technology

The testing and regular production of sweet beverages under the Laško malt name was carried out for the first group of new products at the beginning of the year. This is a completely new segment of aromatised beverages with a sweet syrup base classified under the group of non-alcoholic beverages. The product is available in apple and peach flavours and is particularly interesting due to its non-alcohol content as proven by the favourable market response.

The Company established a technological procedure for the production of Zlatarog beer using Pivovarna Laško’s yeast culture at the Pivovarna Peja breward in Peći. This ensured the fulfilment of conditions for the signing of a licensing contract for the production and filling of Zlatarog beer at the Pivovarna Peja brewery. Filling of the aforementioned beer in all packaging for the needs of the regional market are being carried out on a regular basis following minor technological modifications.

The production of the licensed beers Kaltenberg and Top Royal Pils also continued in 2011 while the Company began filling specific new brand names both for the domestic and foreign markets.

Following the investments into production equipment and development of new products in recent years, the Company commenced the regular production of iC Cider apple wine. The product is produced from natural apple syrup without additives. The production procedure has been separated to the greatest degree possible from the production of beer due to the strict hygienic measures. In accordance with the HACCP system the Company developed occasional internal trainings in addition to sending employees to seminary, symposiums and workshops organised by various educational institutions. The Company regularly implemented regulations in production, internal assessments and specific established measures in accordance with the hygiene standard. The new light beer Laško Trim with a 2.5% alcohol content was produced for the needs of the market. The beer is produced according to a different alcohol brewing and maturing technology than for existing light beer and is therefore less aromatic and full-flavoured.

The quality of end products satisfied the established standard therefore no criticism from the market regarding product quality was obtained. The reason for the return of some products was predominantly due to expired expiration dates and problem regarding the sale of inventories.

Draft beer represents and important segment in beer sales therefore production in this area is given complete support in problem resolution, training and answers to the questions of both the service division and caterers. Necessary work in the areas of cleaning and maintaining tap equipment and the tapping and serving of draft beer is continuing.



Investments into Production, Energy, Ecology and Infrastructure

1. Supplementation of the ST2 line with new equipment

Due to financial limitations in the first half of 2011 the realisation of this project has been rescheduled for 2012. In connection to the project the Company began preparing technical documentation for the energy infrastructure of filling lines A0,A and B which will be connected to the SPTE (co-production of thermal and electrical energy) network which has been designed up to the invitation for tenders phase. The Company launched the new “Malt” product on the market in the spring of 2011. The technological procedure for preparing this beverage on the ST2 filling line also required the supplementation of equipment on this line. Therefore the existing tunnel furnace had to be adapted to enable the required technological phase of pasteurisation to be implemented.

2. High gravity brewing HGB

The installation of suitable equipment for all technological and energy infrastructural connections in the basement area were concluded in May and June 2011 as well as the successful release of the equipment into operation. The device is currently undergoing trial operation and fulfils all planned parameters for the development and supply of the market with new products particularly in the area of brand merchandise.

3. 10 x 0.5 l crates

As the introduction of the small 10 x 0.5 l crate is closely connected to the “supplementation of the ST2 filling line with new equipment” project, the implementation and financing of this project will also be postponed until 2012.

4. CIDER packaging

In 2009 the Company had already installed equipment in the boiling maturing cellars which enable the production of cider and performed trial production and testing of the new product. By optimising the technological process, the new product was able to be bottled in suitable packaging and offered to the market in May 2011. The supplementation of formatting parts of the SMI, KHS and Krones portions of the ST3 filling line was required to enable the planned activities for the launching of the new product on the market as well as conformity with requirements regarding bottling equipment and packaging types.

Investments into energy

5. Replacement of valves for the ZKT ammonia

Reconstruction of the cooling system

The planned 4th phase of this project was successfully concluded in 2008 and 2009 which comprised the replacement of the deteriorated ice water system in the small 600 hl welding container , NH3 fittings and ZKT installations. The 5th phase of the reconstruction project will be concluded in 2011. This represents the replacement of



the existing housing and magisterial lines of the ammonia installation to 8ZKT and 6ZKT batteries in the boiling maturing cellars with rust-proof fittings and pipe-work.

6. Energy management – software and hardware

High energy costs and strict environmental regulations are increasingly dictating more reasons for introducing best practices in the field of energy management. The objectives are energy savings, increased energy efficiency, time efficiency, division of costs based on actual use and optimized forecasted use of various energy sources.

The installation of suitable measuring equipment required for continued analysis of measured data is envisaged for energy products which represent the greatest share of costs for the Company (natural gas, electricity, water/waste water, steam, air, CO2, etc.) necessary for continued analysis of measured data. The installation and use of modern software solutions will provide collected and analysed data to all decision makers in a form enabling them to adopt decisions regarding subsequent measures in the area of energy management and savings.

7. Renewal of the IT centre

With the transition to the SAP information system at the beginning of 2009, new hardware was also newly installed in the information centre. During summer production it was observed that the existing equipment installed for air conditioning the space no longer met the required parameters.

Therefore new and more powerful equipment needs to be installed in the server area. Owing to the requirements of a high degree of security and reliability of operations, fire and flood protection and feedback notification of interruptions in operations will need to be ensured for these spaces in accordance with standards. The planned implementation of the project in the first half of 2011 has been rescheduled for the second half of 2011 due to financial limitations.

Investment into photovoltaics – solar energy

In accordance with the European Council directive on encouraging use of renewable energy sources (RES) and effective use of energy (EUE) and adopted commitment of the Republic of Slovenia to increase the use of RES to 25% by 2012, Pivovarna Laško and the entire Group commenced reconciling their energy strategies with the principles of sustainable development and adapted them to the recommendations and requirements. If this is not implemented the Group can expect measures involving increased energy costs and payment of CO2 tax.

Investments into ecology and infrastructure

8. Ecological projects – biogas

As a result of the growth in energy costs and the TOC's harmful emissions, the drying of waste brewer’s yeast is not longer cost effective and was terminated by IRSOP. Large costs would arise if the wet waste product was brought to a depot, also with



regard to the transport thereof. Therefore in cooperation with the Biotechnical and Chemical Faculties of Ljubljana, a research study is already underway regarding the use of waste brewer’s yeast for acquiring biogas in the anaerobic degradation process. A pilot test was implemented involving the direct introduction and degradation of brewer’s yeast suspension at the UASB reactor of the Company's cleaning apparatuses during 2010 in which the planned results were achieved. This year the company acquired 250,000 m3 biogas which will replace the use of natural by the boilers.

Research and trials will continue in 2011 with the aim of establishing the load levels of the reactor with this substrate to enable the use of all yeast suspensions of Pivovarna Union, d. d. to be used as an energy resource, thereby creating maximum quantities of biogas.

9. Water sources

Several activities as envisaged in the 2011 investment plan were implemented in this area but only to the phases until financing was required. Accelerated continuation of these activities is planned for the second half of 2011.

Maintenance and energy engineering

The implementation of works based on the plan prepared for the first half of 2011 continued with regard to maintenance and energy engineering. The scope of works comprises preventative works on the devices and machines which are exclusively used for primary production by streamlining costs.

Based on the realized financial expenses for maintenance in the first half of 2011, it was observed that expenses had significantly decreased although planned streamlining for the period had been lowered to enable the achievement of a higher operating profit. Services showed the greatest savings in terms of maintenance costs. Focus was placed on the implementation of own maintenance works using own maintenance personnel although the number is lacking. Preventative maintenance works are physically carried out only for the most important tasks to ensure uninterrupted production. Emphasis was placed exclusively on the replacement of the most worn out parts while remaining elements were only partially rehauled or inspected.

Considering the fact that the machines and devices are getting older and requiring increasingly more maintenance interventions and subsequently, larger expenditures, additional costs will have to be taken into consideration in the future. It is already apparent that such maintenance works will ensure the perfect operation of the machines and devices which dictate greater need for maintenance interventions. The current implementation of preventative maintenance also shows a lack of suitably qualified personnel. The Company currently only has personnel available to cover current maintenance works and lacks suitably qualified personnel to ensure specific works on machines and devices. This lack of personnel has been observed in all technical areas and especially in the mechanical and electrical works which are key for the uninterrupted operation of the machines and devices. The Company also lacks maintenance personnel in the construction area.



No problems were encountered regarding the supply of all required energy products. The Company implemented specific preventative maintenance works emphasising greater exploitation of energy to ensure the needs of energy products to individual technological users.

All required inspections for both energy and work process devices were carried out in accordance with legislation.

Water supply

Works on the water supply network were for the most part carried out as planned in the first half of 2011. Adequate quantities of quality drinking water in the water supply system of Laško and other surrounding water supply networks were ensured throughout the period. No water needed to be transported due to favourable hydrological conditions. Some sections of the water supply network had to also be replaced in this period.

Supervision over the health suitability of the drinking water in the water suppy network was carried out in accordance with the Rules on drinking water and other legislation. The Company also possesses an HACCP system for the water supply network which includes the plan for monitoring drinking water from the beginning to the user connections as it is aware that the most important goal of the supply of drinking water activity is to ensure the health suitability of drinking water to all users.

Quality control

The quality control department continues continues to implement its regular work and activities in accordance with the regular practice and control plans. Again, no larger reclamations regarding the quality of final products were received this year. The Company can once again boast of the three gold commendations received for the quality of its beer for all three products entered into the international Monde slection competition held in Brussels. The three products were Jubilejnik, Laško Dark and Laško Zlatorog.

Preparation of the SAP Q module was commenced in April and will replace the existing TQM information system for the entry and processing of quality control results in 2012. The introduction of the new information system is envisaged to be concluded by January 2012. Information systems for quality for all companies in the Group will be standardised through the introduction of the Q module.

Regular work was carried out without any problems both on the physiochemical and microbiological portions of quality control. The microbiological state of beer production and filling, filling of spring waters, final products and drinking water within the scope of the water distribution system were monitored by the microbiological laboratory. More than 8300* samples were processed by the microbiological laboratory in the period from 1 January to 30 June 2011 (source: Plilllis system, Pivovarna Laško). Chemical control analyses were carried out at the beginning of the year in accordance with the regularly defined plan. The inspection areas



comprised controls of intermediate materials, entry raw materials, phasal intermediate products (beer and non-alcoholic beverages – lemonades), by-products, final products, water analytics and developmental analytics.

The Company again experienced problems regarding the quality of German ale in 2011. No larger deviations from the required quality parameters were observed for the remaining raw materials. Some problems were also encountered in the preparation of syrups for mixed beer beverages however the problems were successfully identified with the causes successfully resolved.

No larger deviations were encountered regarding intermediate goods: some minor problems regarding the closing of bottle stoppers, effect of tin materials from white tin on the sensor for checking the final product were encountered. All remaining reclamations regarding intermediate goods can be attributed to deviations in the dimensions and pressing of intermediate goods.

No greater deviations in quality with regard to the control of final products were observed as reflected in the almost non-existent number of quality reclamations. The most frequent reclamations regarded improper storage and handling of beer.

The Company will continue with sensory trainings via regular trainings and participation at international comparative sensory schemes. The Company is pleased with its results and is aware that sensory training is a constant process whereby knowledge is increased and supplemented.

The Company desires to continue preparing and ensuring products for the consumer that are safe and qualitative.

New Product Development

Five new products were courageously launched on the market in the first half of 2011.

Ideas for the preparation of new products are not lacking however the Company is aware that it will need to invest a great deal of effort and money into all five new products to achieve envisaged sales.

It should also be mentioned that development activities for brand merchandise and easement filling also continued in 2011.

Optimisation of existing packaging continued in the first half of 2011. This predominantly comprised the selection of light and price and ecologically acceptable packaging. The projects are not yet concluded and will continue into the second half of the year.

The Company continued its cooperation with IHPS Žalec. The tasks being prepared last year are continuing. The postgraduate thesis carried out in cooperation with IHPS and the Biotechnical Faculty of Ljubljana entitled “Vpliv zaporedne uporabe kvasa Saccharomyces Pastorianus na kakovost piva” (Effect of successive application of the yeast Saccharomyces Pastorianus on the quality of beer) will soon be concluded.



All development activities are focused on the preparation of products to fully satisfy the needs of the Company’s current and future buyers.

Licensed production of beer and courtesy filling:

Pivovarna Peja, Peć:

The optimisation of production of Zlatorog beer at the brewery Pivovarna Peja is currently in the concluding phase. The identical recipe for boiling, fermentation and maturing of beer was introduced. The incorporation of the Laško Pivo yeast culture has resulted in the organoleptic picture of the beer of Peći approximating the original. The greatest problems with regard to the equipage of the brewery comprises the welding apparatus which does not ensure ideal conditions for welding

Cooperation between the technical technological offices of both breweries is correctly implemented. Activities are still underway in the area of quality control of the reconciliation of several analytical methods.

Courtesy filling at the company Proan, d. o. o., Slovenske Konjice:

Due to limited PET filling capacities at the Company’s filling line, the filling of beer into 1.5 l and 2 l bottles is being carried out at Proan, d. o. o., Slovenske Konjice. Nevertheless, the acquisition of lines which will enable the Company filling capabilities at home thereby mitigating the effect of various factors which could affect quality should be considered.



OPERATIONS OF SUBSIDIARIES

Radenska, d. d., Radenci

Company profile

The core business of Radenska is the bottling and marketing of natural mineral and spring waters and non-alcoholic beverages

On the Slovenian market, the Company's desire is to, under the brand name Radenska, remain the leading filling company of natural mineral waters, and in the area of bottled drinking waters and non-alcoholic beverages to maintain its development as an active and competitive company with a significant market share. In the export area, the Company strives to maintain its position as the leading Slovenian exporter of natural mineral waters under the brand name Radenska, and as an active filling company and/or seller of those specific products of Radenska which are, with regard to their quality, particularly interesting for the market on the territory of the former republics of Yugoslavia and Central Europe.

Radenska, d. d., Radenci, is a subsidiary of the parent company Pivovarna Laško, d. d., Laško. The ownership share of the parent company represents a 93.80% stake the capital. Radenska, d. d., Radenci, also has ownership stakes in other companies and is the owner or partner of the following companies: Radenska, d. o. o., Beograd (100% business stake) and Radenska, d. o. o., Zagreb (100% business stake) - these companies are not active, and Miral, d. o. o. (100% business stake), RA&LA, d. o. o., Sarajevo (1.97% business stake) and Odem GIZ Slopak, d. o. o. (9.74% business stake).

Characteristics of operations in the first half of 2011

The first half of 2011 saw the sale of 46.5 million litres of mineral waters and non-alcoholic beverages in all sales areas and markets, representing a 3.3% increase in comparison to the same period last year and 91.8% of the plan for the first six months.

An increase was recorded on the Slovenian and EU markets. The exception is the sale of retail brands while sales results of the subsidiary’s own brands, especially Classic, were not so favourable. Good indexes were recorded for Pepsi, Ora and Naturelle.

A total of 38.2 million beverages were sold on the domestic market in the first half of 2011. From March onwards with the introduction of new products (Stil apple, Oaza cherry, Ora bitter lemon, Radenska Plus Feel Good), sales began to exceed those of the previous year. Numerous activities involving price-orientation and added value were implemented in stores which were supported by media campaigns.

Suitable marketing activities at the locations of the largest buyers (promotions, publications in catalogues, leaflets, billboards, etc.) were prepared to variegate sales on foreign markets in which 8.3 million litres of beverages were sold in the first half of 2011.



Due to aggressive competition the company had to adapt and participate in key times and activities which are strongly supported with marketing activities by merchants. These activities are planned to be continued in the second half of the year.

Basic data on the operations of the company Radenska, d. d., Radenci ( in EUR ) I.-VI./2009 I.-VI./2010 I.-VI./2011

Net sales revenues 15,490,215 13,598,635 14,704,194

Net profit 2,014,717 1,592,207 1,654,112

Net cash flow13,682,956 3,022,519 2,992,699

EBIT 2,101,581 1,783,777 539,622

EBITDA 3,769,820 3,214,089 1,878,209

Long-term assets 81,853,998 71,622,033 64,476,701

Short-term assets 82,484,647 45,646,812 45,871,182

Equity 121,697,741 84,089,867 81,042,850

Long-term liabilities 1,073,471 8,565,555 6,566,605

Short-term liabilities 38,519,240 21,795,490 20,296,442 1 Net profit including depreciacion

The company generated EUR 15.1 in operating revenue and EUR 14.6 million in operating expenses in the first half of 2011 attaining an operating profit of EUR 0.5 million. Financial revenue was EUR 2.7 million and financial expenses EUR 0.6 million representing a financial result of EUR 2.1 million. Net profit comprised EUR 1.5 million.

Employees

In 2010 Radenska concluded the streamlining process involving a decrease in the number of employees. The number of employees on 30 June 2011 was 211 and on 30 June 2010 215, signifying a decrease of 4 employees. The share of labour costs in net revenue was 18.5% for the first half of 2011 compared to 18.8% in the same period last year.

Conclusion

The existing market environment in connection to known trends had an effect on the boldly set basic operating objectives in 2011. Processes which will have continued synergy effects within the Pivovarna Laško Group will be continued. The company will continue to seek new market opportunities, improve the quality and safety of its products and optimise processes through new technical-technological and organisational upgrades. Radenska will achieve all set objectives through willpower and optimisation of all participants. This will contribute to the company successfully and to the greatest degree possible despite the recession achieving the objectives set in the business plan for the second half of the year.



Union Group

Presentation of the Group

The Union Group was established in 2001 when Pivovarna Union, d. d., took over Fructal, d. d. Pivovarna Union, d. d. is the parent company of the Union Group. In addition to parent company Pivovarna Union, d. d., the Union Group also includes the companies Fructal, d. d. and Fruktal Mak, a. d., whose basic activity is the production of juices and beverages. Pivovarna Union, d. d. is the 93.73 percent owner of the company Fructal, d. d., which is the 89.4 percent owner of the company Fruktal Mak, a. d. The Union Group also has associate companies abroad, namely the companies Birra Peja, Sh. a., Kosovo and Birra Peja Albania Pivovarna Union, d. d. has a 39.55 ownership stake in the company Birra Peja, Sh. a., a beer brewer and a 100% ownership stake in Birra Peja, Sh. a., Kosovo of Albania.


The Union Group sold 1,137,263 hl of beverages on the Slovenian market in the first half of 2011, 71.5% on the Slovenian market and 28.8% for export. In comparison to the same period in 2010, quantitative sales were 4% higher but lagged 0.8% behind planned results. The best results were achieved by beer sales predominantly due to the Radler brand which became a bestseller. The company sold 13% more beer in Slovenia and 4% more for export in the first half of 2011. Sales of non-alcoholic beverages remained on the same level on the domestic and export markets as in the first half of 2010 while sales of water and flavoured waters declined by 3%.

The conditions in which the Union Group operates are not favourable for the beverage industry therefore attained results were assessed as good. The general economic situation in Slovenia and in the export markets of the Union Group remains unfavourable. The average number of actively employed persons in Slovenia significantly decreased at the end of the year due to the forecasted pension reforms with unemployment continuing to rise. On the other hand, cost efficiencies have a strong effect on the growth in prices of raw materials, energy products and materials connected to oil prices. The decline in buying power is reflected in the general decline in beverage consumption and changed habits of consumers. Brand affiliation is falling with customers focused on cheaper products and merchandise brands with more purchases carried out in the cheaper discount stores. Financial non-discipline and decreased liquidity of buyers, decline in currency values, decline in the purchasing power of consumers and increasingly greater demands of merchants for additional discounts present additional problems on the export markets.



Key data on operations of the Union Group

( in EUR ) I.-VI./2009 I.-VI./2010 I.-VI./2011


Net profit 5,486,943 3,217,115 9,840,223

Net cash flow111,920,495 8,889,495 13,434,660

EBIT 9,336,073 6,611,311 10,123,157

EBITDA 15,769,625 12,283,691 13,717,594

Long-term assets 221,285,953 213,705,281 108,421,791


Equity 137,967,428 83,782,781 90,569,149


Short-term liabilities 137,445,912 133,343,963 181,558,621

1 Net profit including depreciacion The Union Group generated EUR 81.8 million in consolidate net sales revenues in the first half of 2011 representing an 8.6% increase over the comparable period in 2010. Revenues on the domestic market comprised 78.4% of all sales revenues and those on foreign markets 21.6%.

Operating costs and expenses in the amount of EUR 74.5 million were 6.2% higher than in the first half of 2010. The largest increase in costs was recorded for costs of materials due to increased production and prices of several basic raw materials, packing materials and energy products. Costs of services also increased significantly predominantly due to increased costs of marketing activities. Labour costs which comprised EUR 10 million decreased by 4.5%. Written-off values in the amount of EUR 3.6 million decreased by 37.6% due to the 36.6% decrease in amortization. The fixed assets pertaining to the Fructal Group and consolidated into the Union Group are no longer amortised as of 1 January 2011 in accordance with IFRS 5.

Financial revenue in the amount of EUR 5.7 million were 455.7% higher due to dividends (Mercator, d. d.) and profits from the sale of several financial investments. Financial expenses in the amount of EUR 5.1 million, predominantly from interests for loans, increased by 36.8%.

The Union Group generated an operating profit of EUR 10.1 million in the first half of 2011, representing a 53.1% increase over the comparative period in 2010. Net profit in the amount of EUR 9.8 million was 205.9% higher.

The assets of the Union Group totalling EUR 296.3 million were 9.4% higher as at 30 June 2011 than on 31 December 2010. The reason lies in the 16.5% increase in the non-current assets of the Union Group predominantly to the increase in short-term operating receivables and inventories. Both had increased since 31 December 2010 due to the seasonal nature of operations and dividend receivables from Mercator.

Capital represented a 30.6% share of liabilities in comparison with 29.6% on 31 December 2010. Capital was 13% higher in the first half of 2011 due to the revaluation



of financial investments to market value and profits. Total short-term and long-term financial debt of the Union Group in the amount of EUR 153.4 million had increased by 3.1%. Operating liabilities in the amount of EUR 23.5 million 66% higher due to increase trade payables and liabilities to the state (VAT and duties).

The Union Group possessed assets for divestment in the amount of EUR 56 million comprising assets of the Fructal Group on 30 June 2011 while liabilities connected to the assets for divestment regarding liabilities of the Fructal Group comprised EUR 26.5 million.

Employees

Due to the streamlining of employment in the past five years, the number of employees in the Union Group has radically decreased. A larger number of employees took advantage of the possibility of early retirement at the end of 2010. The Union Group had 801 employees as at 30 June 2011 representing a decrease of 42 from the year before and 4 employees more than on 31 December 2010. In the first half of 2010 the Union Group had hired 31 external workers to implement internal transport who were given full-time employment in December 2010. Without including these new employees, the number of employees had decreased to 73.

Conclusion

Considering the high-degree of indebtedness of the Union Group which has a direct effect on business results, activities involving negotiations with banks on the reprogramming of financial obligations and the sale of investments which do not represent the basic activities of the group were of extreme importance in the first half of 2011. It will be that much more important that the divestment processes initiated by effectively continued and concluded in the second half of the year. Vital Mestinje, d. o. o.

Company profile

The development of the company Vital Mestinja commenced over fifty years ago. Activity code: The main activities of the company are fruit processing and bottling of non-alcoholic beverages under its own trademark FRUPI. The company is also an important beverage bottler for the retail trademarks of various chain stores. The latter represents 80% of the company’s activities and is too high so the future strategy will be to increase the market share of the FRUPI brand.

The company desires to regain its leading market share in syrups in the Slovenian market and at the same time, focus on the increased quality of Frupi products which will be based on the Kozjansko apple which constitutes the basic raw material.

The company has capital ties with Pivovarna Laško, d. d., the latter of which was the 96.92 percent owner of Vitala Mestinja as at 31 December 2010.




Quantity of sales: The company sold 6,753,068 litres of beverages in the first half of the year, reflecting a 5% decrease over the amount in the same period last year. Financially, the sales amounted to EUR 2,274,866.78 and were 10% higher than the amount in the same period last year. The financial growth was predominantly due to the 18% increase in sales of FRUPI syrups. This represents a great success for Vital with the increased sales of FRUPI products a planned objective. Exports to Malta fell by 70% in the first half of the year representing a heavy blow to Vital. Nevertheless, positive financial growth was recorded for the first six months.

Sales of merchandise brands, which declined by 5%, still comprise 80% of all sales. The financial index for merchandise brands was 107 for this period.

Key data on operations of the company Vital Mestinje, d. o. o. ( in EUR ) I.-VI./2009 I.-VI./2010 I.-VI./2011


Net profit 46,896 -78,469 4,350

Net cash flow1233,319 106,547 191,861

EBIT 54,070 -72,761 8,509

EBITDA 240,493 112,255 196,020

Long-term assets 2,148,700 2,406,373 2,356,220


Equity 3,438,782 3,360,986 3,362,138

Long-term liabilities 66,482 344,532 257,332


The company generated a gross profit of EUR 3,792.39 in the period January – June 2011 which is quite satisfactory considering that the company experienced a EUR 79,656.53 loss for the same period last year. Although amortisation costs increased by 1.51% in this period, labour costs significantly declined, namely16.32%. Costs of materials also significantly increased in this period as the price of sugar, the strategic raw material of the company, increased by almost 100%. Costs of advertising providing support for larger sales of FRUPI products also partially increased.

Employees

As at 30 June 2011 Vital possessed 36 employees, 3 of whom were employed for a specific time period. Despite the extreme fluctuations in the previous year, the number of employees did not increase. Nevertheless the company will have to remedy this in the future for some work processes are already feeling the deficiency.

Conclusion

Operations in the first half of the year considering the situation on the market were very satisfactory. The decision to terminate those FRUPI products experiencing poor



sales proved to be correct. At the same time the company also terminated several merchandise brands, particularly those displaying extremely poor margins (Tuš Olimp). The company acquired 8 new merchandise brands in the first half of the year. Two new FRUPI fruit juices were launched on the market.

The strategy involving the improvement of product quality proved to be a positive one.

The objectives for the second half of 2011 remains to increase sales of FRUPI products, select or replace products which are not cost effective and ensure cost effectiveness in all processes. At any rate, the company expects synergies with the Pivovarna Laško concern to help, enabling both to more easily follow the objectives set for 2011. Delo, d. d., Ljubljana

Company profile

Delo, d. d., has been one of the leading and most influential companies on the Slovenian media market and an important designer of public opinion for half a century. The early work of the company Delo dates back to 1955 when the newspaper and publishing company Slovenski Poročevalec was established, which was the precursor to today's company.

Delo, d. d., publishes two leading Slovenian daily newspapers, Delo and Slovenske Novice, the only Sunday newspaper, Nedelo, the specialized magazine Grafičar and four regular newspaper supplements as well as independent magazines.

Significant business events in the first half of 2011

At the end of February 2011 the Competition Protection Office issued its consent for the sale of shares of ČZP Večer, d. d. to the company 3Lan, d. o. o. In June 2011 annex no. 4 k to the Contract on the Sale of Shares of ČZP Večer of 23 June 2010 was signed with the company 3 Lan, d. o. o. while the deposit contract extended at the notary managing the storage of the deposit given. The Ministry of Culture has not yet issued its decision regarding the sale. This means that the deferred conditions from the Contract on the Sale of Shares of 23. June 2010 have not yet been fulfilled and consequently, the Contract on the Sale of Shares has not yet gone into force.

The latest results of the Audited Sold Circulations of Printed Media are encouraging for the daily newspaper Slovenske novice has the highest circulated newspaper in Slovenia while its Vikend supplement had the highest level of distribution.

The downward trend of the circulation of the Delo and Nedelo newspapers is continuing. Slovenske novice attained a higher level of sales on the Web than planned the reason being the continued promotional campaigns.

The initial activities for the redesign of the Delo newspaper were implemented at the beginning of the year. The redesign should be concluded in October 2011. At the same time, the integration of Delo editions is also being carried out.



The Slovenske novice brand name received the title of TRUSTED BRAND in the category of daily newspapers for the second consecutive year in 2011 which is awarded by Mladinska knjiga and the editorial magazine Reader’s Digest.

In addition to the renewed websites delo.si and slovenskenovice.si, which according to the latest data have achieved favourable results, three additional websites were launched: upgraded version of www.pogledi.si and new portals www.polet.si and deloindom.si.

The new magazines Onaplus, Deloindom+ and first recreational monthly Polet fit were also launched in the first half of 2011. Reader response to the magazines has been favourable.


The negative trend also continued on the advertisement market in 2011, the result of effects of the economic crisis. The share of television commercials has been strengthening to the detriment of all printed media.

Net sales revenues generated by the Delo Group comprised EUR 27 million in the first half of the year reflecting a 4 percent growth in comparison to the comparable period of the previous year and somewhat less than planned. The operating profit generated, namely EUR 57 thousand, was somewhat less than that of the previous year and also below the planned operating result. The negative total operating result was predominantly caused by the negative financing result.

Key data on the operations of Delo, d. d., Ljubljana ( in EUR ) I.-VI./2009 I.-VI./2010 I.-VI./2011


Net profit 1,032,351 -2,038,985 -401,947

Net cash flow12,486,163 -585,173 1,081,759

EBIT 1,402,324 119,095 57,140

EBITDA 2,856,136 1,572,907 1,540,846

Long-term assets 42,007,523 24,939,048 23,088,673


Equity 29,012,742 13,600,992 13,070,820



Employees

The high educational structure is characteristic for the company and is reflected in its activity and in the complexity of the work processes. Activities for accelerating the retirement of all employees fulfilling the conditions have been implemented since the beginning of the year. A total of 456 persons were employed at the company Delo,


http://www.pogledi.si/

http://www.polet.si/



d. d. and subsidiary Izberi, d. o. o., reflecting a decrease compared to the number at the end of June 2010 which comprised 470 employees.

Conclusion

Savings measures aimed particularly at decreasing the scope of pages and numbers of individual issues and promotional costs were adopted with the intention of attaining the planned operating result. Additional measures focused on human resources and real estate management are also undergoing preparation.

Semi-annual Report 2011 / Business report

SUSTAINABLE DEVELOPMENT

Human Resources Management

Employees The Company is very aware that employee satisfaction and business performance are inextricably linked. It successfully ensured a healthy and safe working environment and good participation among employees, which will be of great significance also in the future, leading to greater loyalty from employees to the Company the cultivation of the aforementioned qualities in workers. Employees are one of the cornerstones of the Company's effective management, for with their knowledge, efforts and competence they contribute to good quality, and consequently customer satisfaction with the Company’s products.

The Company's objective in the future remains as follows: employment rationalization and growth of the employee educational level.

The Pivovarna Laško Group had a total number of 328 employees as at 30 June 2011 of 312 had employment contracts concluded for an indefinite period and 16 for a specified period. The total number of employees in comparison to data on 30 June 2010 increased by 0.92%. Employee composition by gender

Employee as at 30/6/2011 Št. % Št. % Št. %

Regular employees indefinite duration 113 96.6 199 94.3 312 95.1

Regular employees fixed-term 2 1.7 11 5.2 13 4.0

Trainees fixed-term 2 1.7 1 0.5 3 0.9

Total 117 100 211 100 328 100

W o m e n M e n T o t a l

Employee as at 30/6/2010 Št. % Št. % Št. %

Regular employees indefinite duration 116 97.5 204 99.0 320 98.5

Regular employees fixed-term 3 2.5 2 1.0 5 1.5

Trainees fixed-term - - - - - -

Total 119 100 206 100 325 100


Education Training for employees involved in production, controls of quality, maintenance and filling, the water distribution network and those employed as seasonal workers was carried out. The areas of training varied and included accounting, foreign languages, IT, marketing, environmental protection, legislation and other professional training.



Educational structure of the employees Education/period 30/6/2011 share in % 30/6/2010 share in %

Master 7 2.1 7 2.1 100.0

University 52 15.9 48 14.8 108.3

College 42 12.8 40 12.3 105.0

High school 61 18.6 62 19.1 98.4

Skilled 87 26.5 86 26.5 101.2

Semiskilled 29 8.8 29 8.9 100.0

Unskilled 50 15.3 53 16.3 94.3

Total 328 100 325 100 100.9

Index 11/10

Age structure The majority of employees belong to the group of 45 years old; if this figure is compared to that of 2010 it can be seen that fluctuation was minimal with the greatest number of employees aged 44 years. The greatest share of men were aged 45 while the greatest share of women were aged 44 years. Employee composition by age and gender as at 30 June 2011

Age in years Št. % Št. % Št. %

age from 19 to 25 years 1 0.9 3 1.4 4 1.2

age from 26 to 30 years 3 2.6 8 3.8 11 3.4

age from 31 to 35 years 9 7.7 17 8.1 26 7.9

age from 36 to 40 years 18 15.4 30 14.2 48 14.6

age from 41 to 45 years 35 29.9 50 23.7 85 25.9

age from 46 to 50 years 28 23.9 51 24.2 79 24.1

age from 51 to 55 years 21 17.9 47 22.3 68 20.7

age from 56 to 60 years 2 1.7 5 2.3 7 2.2

Total 117 100 211 100 328 100


Average gross Salary The average gross salary of employees of Pivovarna Laško, d. d. was EUR 2,016.27 during the period January – June 2011, representing a 2.9% increase in comparison to 2010.

The increase in the average gross salary was due to newly employed persons receiving earnings exceeding the average gross salary in the country.



Communications In the first half of 2011 Pivovarna Laško, d. d. systematically established two-way communications between the companies of the Group and their internal and external environments. The Pivovarna Laško team planned communications, simultaneously adapting them to the interests of various publics who have an effect on its operations.

Communications with investors

In accordance with the law, Pivovarna Laško provides investors and potential investors with sufficient, accurate and timely information. Information within the scope of the Company’s information disclosure policy encompasses business performance in the past and strategic development of the Company in the future.

Pivovarna Laško, the shares of which are quoted on the Ljubljana Stock Exchange, is according to law obliged to publish prescribed information on the website of the aforementioned stock exchange (seonet.ljse.si), and to also publish this information on the website of the Company.

The set of activities with investors and potential investors includes regular general meetings of shareholders, the convocation of press conferences alongside reporting on interim and annual operating results, individual meetings of representatives of the Company with representatives of investment companies, and announcement of interim and annual reports in printed media and on the Company's web sites.

Communications with the media

The Company regularly informs the media of the activities of the Company, its business operations, plans and strategic guidelines via press releases and conferences. Relations with the media are based on planned and correct participation, prompt response to journalists' questions and valid standards of public relations.

Communications with Buyers

A call centre has been at the disposal of buyers since January 2009. Ten operators are available at the toll-free telephone number 080 1825, who accept customer orders for all products of the Pivovarna Laško Group. The Company introduced this project mainly to create simpler and more user friendly business operations. The call centre, which is located in the distribution centre of the Pivovarna Laško Group in Ljubljana, takes orders for all distribution channels (trade, catering and institutions). In its three years of operation the call centre has established itself well among buyers.

Communications with Employees

Internal communications are one of the most important techniques which if professionally implemented through the use of communication tools ensures satisfactory employee notification, motivation and satisfaction. Healthy mutual relationships are one of the essential elements for attaining good business results. At



Pivovarna Laško employees are promptly informed of all relevant information and notifications for the public. Bulletin boards are located at all high frequency points in the Company, and in recent years increasingly more users also recieve notifications via the Internet. An important communication internal communication tool is internal websites - the intranets of Pivovarna Laško and of Pivovarna Laško Group. Use of the new tool has increased alongside the increased needs for mutual communications between different organizational departments and mixed project teams which arose as part of the business strategy of the Group in 2010. The intranet enables interested persons access to joint use of specific documents. The communication tool has significantly contributed to the increased effectiveness of business processes.

The internal newsletter of Pivovarna Laško (Laški Pivar) which was reintroduced, has established itself well in the past two and a half years. It is intended for both Pivovarna Laško employees and colleagues from the Pivovarna Laško Group and other interested persons. Employees receive the newsletter by email and the newsletter is also available in printed form in five locations at the Company. In addition to the above, it is also received by retirees of Pivovarna Laško, media representatives and other relevant members of the public. The newsletter is also available on the website of Pivovarna Laško.

Relations with influential publics and opinion leaders

Pivovarna Laško, d. d. continued active cooperation with civil society organisations and systematic communications with influential publics. The Company thus presented opinion leaders with the “Flaško nazaj v Laško” (Return your bottle to Laško) project at the international Earth day at the Eko Conference with the aim of encouraging beer purchasers to return returnable packaging. At the same time opinion leaders were again presented with an argument for more active cooperation of the regulator for the marketing campaigns of individual companies have only a limited effect on decreasing the quantity of waste packaging in the country. Therefore the Group continues to support and actively participate in dialogues between several civil society organisations and regulators in the area of amending the tax on packaging and concession duties for use of water sources for commercial purposes. The key objective of the project is to prepare a regulation which will significantly stimulate to a greater degree the use of returnable packaging and decrease concession duties for the use of water for commercial purposes for individual liable persons. A significant result of change in both segments of the regulation would also be the improved competitiveness of the domestic beverage industry with regard to foreign competition.



Responsible attitude towards the social environment As a socially responsible company through more friendly technological investments into the environment, Pivovarna Laško has ensured that emissions from production have as little effect on the local environment as possible.

The investments of the past ten years clearly depict the great concern and weight the Company focuses on environmental relations, quality of life in local communities and social responsibility. A major portion of the Company’s investments represent investments into the construction and reconstruction of the local infrastructure.

The products of Pivovarna Laško reflect tradition and the highest standards of quality on a daily basis. As a socially responsible company through more friendly technological investments into the environment, Pivovarna Laško has ensured that emissions from production have as little effect on the local environment as possible. Production processes are therefore implemented in accordance with very strict European environmental standards while waste water is routed to a separate wastewater treatment plant.

Pivovarna Laško has been one of the most important Slovenian supporters of sports in the last decade. Together with the other companies in the Group, it comprises the largest sponsor of Slovenian sports. Pivovarna Laško as well as the Group is active in the field of sponsoring the culture and development of local communities, as well as health and welfare. Pivovarna Laško is also the general sponsor and one of the carriers of one of the most visited tourist events in Slovenia – Pivo in cvetje (Beer and Blossoms).

The significance given to awareness of social responsibility is also reflected by donations for predominantly humanitarian projects, non-profit activities, support of the development of smaller clubs and associations in the local environment.




Ecological report The Group adheres to guidelines involving sustainable increase of exploitation of raw materials, decrease in Pivovarna Laško is well aware that a responsible comprehensive approach to managing the environment and company energy efficiency will be necessary to reduce the impact of its technological processes on our environment. The Group thus implemented the below listed improvements in the area of environmental efficiency in the first half of the year.

The Group continued with the detailed monitoring of the operation of the anaerobic reactor for waste water processing. In 2011 the reactor attained maximum burdening for a longer period, the result of adding yeast suspensions in technical waste water. Analyses of the efficiency of the degrading and stability of microcultures showed the stable operation of the reactor also with larger quantities of added yeast which is of key importance for the long-term implementation of the process. Studies were implemented by the research institutions Zavod Grč Vrh in cooperation with the Biotechnical Faculty. In this period a considerably larger quantity of bioplin was produced as a consequence of the addition of the yeast suspension than in the previous year.

Some deficiencies were established were established within the annual inspection particularly in the areas of waste water and changes in the technological procedure of yeast drying. The deficiencies were remedied within the prescribed deadline and a statement on the changed procedure of yeast processing to the Slovenian Environment Agency (ARSO).

The Group regularly implemented the environmental protection permit for the prescribed monitoring of discharges into the environment.

In the first half of the year the Group implemented a review of the state of the CIP optimization project for the beer bottling plant, prepared solutions and implemented changes to the production equipment cleaning programmes in approximately half of the facilities. At the same time the effectiveness of the cleaning equipment was improved and emphasis placed on decreasing water use in this portion of production. Initial measurable results on the balance of water used are expected during the key season of production and until the end of the year.

The first inspection of the system for the supply of CO2 for the production and bottling beer was carried out in June. Certain operational deficiencies were determined, software changes implemented regarding the operation of the regulators for maintaining pressure in the puffer tanks and replacement of the pressure control device for the pressure tanks. This decreased the use of CO2 somewhat therefore it is expected that the need for additional CO2 will be significantly lower.

Semi-annual Report 2011 / Financial Report - Pivovarna Laško Group

FINANCIAL REPORT UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE PIVOVARNA LAŠKO GROUP for the period ended 30 June 2011

Consolidated Statement of the Financial Position

STATEMENT OF THE FINANCIAL POSITION ( i n E U R )

on 30 June 2011 Pivovarna PivovarnaLaško Group Laško Group

30/6/2011 31/12/2010

ASSETS

Intangible fixed assets 65,778,924 66,016,523Property, plant and equipmen

NON-CURRENT ASSETS 262,005,058 265,643,825

t 150,500,971 153,632,750Investment properties 4,749,667 4,656,484Non-current investments in subsidiaries 207,148 207,148Available-for sale financial assets 697,212 718,449Investments in associated companies 317,148 317,148Long-term loans 10,763,450 10,444,245Long-term operating receivables 939,128 717,347Long-term deferred tax receivables 28,051,410 28,933,731

Non-current assets held for sale 293,667,871 286,684,408Inventories 26,874,670 21,376,855Short-term operating receivables 65,485,082 30,660,793Short-term receivables for overpaid income tax 150,423 1,595,596Available-for sale financial assets 17,247,761 24,554,570Short-term loans 4,151,254 4,733,715Derivatives 18,050 -Cash in banks, cheques and cash in hand 1,328,363 1,391,370

TOTAL CURRENT ASSETS 409,732,700 371,207,876TOTAL ASSETS 671,737,758 636,851,701

EQUITY

Share capital 36,503,305 36,503,305Capital reserves 78,908,924 78,908,924Profit reserves 3,695,943 3,650,330Revaluation surplus 9,362,403 42,217,836Net profit and loss from previous years 12,369,653 110,742Net profit and loss (1,230,533) (25,574,602)Revaluation reserve 69,307 (13,485,165)

TOTAL CAPITAL 149,017,539 131,889,003

LIABILITIES

Non-current employee liabilities 2,760,965 2,788,161Non-current reservations 2,043,700 2,017,797

CURRENT ASSETS

DEFERRED COSTS AND ACCURED REVENUES

MAJORITY CAPITAL

MINORITY CAPITAL

NON-CURRENT RESERVATIONS

408,923,474 370,997,307

809,226 210,569

139,679,002 122,331,370

9,338,537 9,557,633

4,804,665 4,805,958


Semi-Annual Report 2011 / Financial Report - Pivovarna Laško Group

Consolidated Statement of the Financial Position ( c o n t i n u e d )


on 30 June 2011 Pivovarna PivovarnaLaško Group Laško Group

30/6/2011 31/12/2010

NON-CURRENT LIABILITIES

CURRENT LIABILITIES

ACCURED COSTS AND DEFERRED REVENUES

66,071,488 84,263,898

446,231,482 411,167,663

5,612,584 4,725,179

Non-current financial liabilities 66,071,488 84,263,898

Liabilities of Group for disposal 65,734,723 67,250,490Current operating liabilities 48,190,090 30,636,500Current tax payment liabilities 563,261 -Current financial liabilities 331,743,408 313,280,673

TOTAL CURRENT LIABILITIES 451,844,066 415,892,842TOTAL LIABILITIES TO ASSET RESOURCES 671,737,758 636,851,701



Consolidated Income Statement

INCOME STATEMENT ( i n E U R )

for the period 1 January - 30 June 2011 Pivovarna PivovarnaLaško Group Laško Group

1/1-30/6/2011 1/1-30/6/2010

Net sales revenuse 161,315,994 155,466,546

Changes in inventories of products and work in progress 3,274,921 278,274Capitalized own products and their services 98,266 10,859Other operating revenues 1,190,484 1,166,164Costs of goods, material and services (106,734,100) (97,127,526)Employee benefit expenses (28,673,178) (28,887,671)Amortization and depreciation of intangible and tangible fixed assets (8,474,435) (13,009,334)Write-downs of value (5,658,653) (226,977)Other operating revenues (3,148,190) (3,288,572)OPERATING PROFIT 13,191,109 14,381,763

Financial revenues 10,219,565 5,114,449Financial expenditures (24,442,013) (11,944,730)Share of loss/profit in associated companies (14,222,448) (6,830,281)

PROFIT BEFORE TAXATION (1,031,339) 7,551,482

Tax (157,142) (1,352,767)NET PROFIT/LOSS OF ACCOUNTING PERIOD (1,188,481) 6,198,715

Share owners of non-controlling interest in net profit 42,052 197,684The share holders of the parent's share of net profit (1,230,533) 6,001,031Profit/loss per majority owners share:Net profit/loss per share (0.1407) 0.6860Adjusted net profit/loss per share (0.1407) 0.6860



Consolidated Statement of Comprehensive Income

STATEMENT OF COMPREHENSIVE INCOME ( i n E U R )


1/1-30/6/2011 1/1-30/6/2010

Net profit/loss of accounting period (1,188,481) 6,198,715

OTHER COMPREHENSIVE INCOMEFinancial assets for sale 1,259,809 (2,317,328)Deferred taxes from revaluation 464,684 545,890Profit/loss from property revaluation (614,883) -Other comprehensive income (equity method MELR) 17,739,614 197,223OTHER COMPREHENSIVE INCOME 18,849,224 (1,574,215)

TOTAL COMPREHENSIVE PROFIT 17,660,743 4,624,500

Minority interest in comprehensive income 19,626 332,790The share attributable to equity holders in comprehensive income 17,641,117 4,291,710


Semi-Annual Report 2011 / Financial Report - Pivovarna Laško Group Consolidated Statement of Changes in Shareholder’s Equity for 2011 STATEMENT OF CHANGES IN SHAREHODLER'S EQUITY - Pivovarna Laško Group ( i n E U R )

for the period 1 January - 30 June 2011

Net Total majority Share Capital Legal Reserves for Treasury Total profit profit from Net Revaluation Revaluation owners Minority TOTAL

capital reserves reserves treasury shares shares reserves previous years profit surplus reserve capital capital CAPITAL

1 January 2011 36,503,305 78,908,924 3,650,331 812,304 (812,304) - 110,742 (25,574,602) 42,217,835 (13,485,165) 122,331,370 9,557,633 131,889,003

Transactions with ownersDisposal of own shares - - - - 30,196 - (208,720) - - - (178,524) - (178,524)Payment of dividends - - - - - - - - - - - (74,882) (74,882)Other changes - - - - 261,660 106,032 - - (130,375) - 237,317 (163,840) 73,477

Transactions with owners - - - - 291,856 106,032 (208,720) - (130,375) - 58,794 (238,722) (179,928)

Changes in comprehensive incomeNet profit of the year - - - - - - - (1,230,533) - - (1,230,533) 42,050 (1,188,483)Revaluation surplus of property, plant and equipment - - - - - - - - (564,189) - (564,189) (50,694) (614,883)Revaluation surplus of financial investments - - - - - - 37,383 - 1,244,969 - 1,282,352 (22,543) 1,259,809Related taxes with items comprehensive income - - - - - - - - 413,871 - 413,871 50,813 464,684Other comprehensice income - termination of a significant effect PS Mercator - - - - - - 37,976,794 - (37,976,794) - - - -Other comprehensice income - termination of a significant effect PS Mercator - - - - - - - - 4,185,142 13,554,472 17,739,614 - 17,739,614Changes in comprehensive income - - - - - - 38,014,177 (1,230,533) (32,697,001) 13,554,472 17,641,115 19,626 17,660,741

Changes in capitalCover loss - - - - - - (25,574,602) 25,574,602 - - - - -Creation reserves for own shares - - - (291,856) - (60,420) - - - - (352,276) - (352,276)Other - - - - - - 28,056 - (28,056) - - - -

Changes in capital - - - (291,856) - (60,420) (25,546,546) 25,574,602 (28,056) - (352,276) - (352,276)

30 June 2011 36,503,305 78,908,924 3,650,331 520,448 (520,448) 45,612 12,369,653 (1,230,533) 9,362,403 69,307 139,679,003 9,338,537 149,017,540




Consolidated Statement of Changes in Shareholder’s Equity for 2010 STATEMENT OF CHANGES IN SHAREHODLER'S EQUITY - Pivovarna Laško Group ( i n E U R )


Net Total majority Share Capital Legal Reserves for Treasury profit from Net Revaluation Revaluation owners Minority TOTAL

capital reserves reserves treasury shares shares previous years profit surplus reserve capital capital CAPITAL

1 January 2010

Transactions with ownersDis

36,503,305 78,908,924 3,650,330 1,363,200 (1,363,200) - - 33,554,754 - 152,617,313 9,977,067 162,594,380

posal of own shares - - - (52,587) 52,587 - - - - - - -Other changes - - - (368,048) 368,048 - - - - - 21,218 21,218

Transactions with owners - - - (420,635) 420,635 - - - - - 21,218 21,218

Changes in comprehensive incomeNet profit of the year - - - - - - 6,001,031 - - 6,001,031 197,684 6,198,715Revaluation surplus of financial investments - - - - - - - (2,421,856) - (2,421,856) 104,529 (2,317,327)Related taxes with items comprehensive income - - - - - - - 515,311 - 515,311 30,579 545,890Other comprehensive income - equity method Mercator - - - - - 458,396 - 2,891,126 (3,152,300) 197,222 - 197,222

Changes in comprehensive income - - - - - 458,396 6,001,031 984,581 (3,152,300) 4,291,708 332,792 4,624,500

Changes in capital

Changes in capital - - - - - - - - - - - -

30 June 2010 36,503,305 78,908,924 3,650,330 942,565 (942,565) 458,396 6,001,031 34,539,335 (3,152,300) 156,909,021 10,331,077 167,240,098


Consolidated Statement of Cash Flows

( i n E U R )


1/1-30/6/2011 1/1-30/6/2010

(63,007) 392,984

CASH FLOWS FROM OPERATING ACTIVITIES

CASH FLOWS FROM INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

NET DECREASE / INCREASE IN CASH AND CASH EQUIVALENTS

Cash generated from operations 9,726,212 21,903,431Income tax paid (157,142) 560,734NET CASH GENERATED FORM OPERATING ACTIVITIES 9,569,070 22,458,017

Purchase of property, plant and equipment (5,821,427) (8,477,857)Profits/losses in disposals purchase of property, plant and equipment 364,408 (73,541)Purchase of intandible assets (156,662) (287,264)Purchase/sale of available for sale financial assets 5,505,860 2,985,277Interest received 1,381,302 1,091,905Dividends and capital gains 137,648 -NET CASH GENERATED/USED IN INVESTING ACTIVITIES 1,411,129 (4,761,480)

Interest paid (12,361,409) (11,683,262)Proceeds from borrowings 1,393,085 (5,620,291)Dividends paid to Companys sherholders (74,882) -NET CASH USED/GENERATED IN FINANCING ACTIVITIES (11,043,206) (17,303,553)

Cash and cash equivalents at the begining of the year 1,391,370 991,658Cash and cash equivalents at the end of the year 1,328,363 1,384,642

STATEMENT OF CASH FLOWS



Consolidated Cash Flow from Operations CASH FLOW FROM OPERATIONSfor the period 1 Januar

( i n E U R )

y - 30 June 2011

OPERATING PROFIT OF THE PERIOD

ADJUSTMENTS FOR:

CHANGES OF REVERSE CAPITAL

CASH MADE FROM OPERATION

Pivovarna PivovarnaLaško Group Laško Group

1/1-30/6/2011 1/1-30/6/2010

13,191,109 14,381,763

9,726,212 22,458,017

Depreciation of property, plant and equipment 8,079,343 12,451,515Depreciation of intangible fixed assets 395,092 557,819Write-offs of fixed assets 5,455,907 73,541Net movement in reservations (1,293) (235,518)ADJUSTMENTS 13,929,049 12,847,357

Inventories and non-current assets for sale (3,614,143) 3,477,170Operating and other receivables (29,069,475) (20,862,496)Operating and other liabilities 15,289,672 12,614,223TOTAL CHANGES (17,393,946) (4,771,103)

Consolidated Reporting by Segments

REPORTING BY SEGMENTS - Pivovarna Laško Group ( i n E U R )

for the period 1 January - 30 June 2011Newspaper-

Other publishingBeer beverages activity Other Total

Net sales revenues by segments 72,742,624 51,188,048 27,361,063 10,024,260 161,315,995Operating profit and loss 14,691,594 1,056,942 1,523,254 (4,080,681) 13,191,109Assets by segments 180,885,381 173,791,836 74,126,598 179,275,505 608,079,320Trademarks 46,461,058Positive goodwill 17,197,380

REPORTING BY SEGMENTS - Pivovarna Laško Group ( i n E U R )

for the period 1 January - 30 June 2010Newspaper-

Other publishingBeer beverages activity Other Total

Net sales revenues by segments 70,672,601 51,792,491 26,211,695 6,789,759 155,466,546Operating profit and loss 10,745,681 2,851,881 95,802 688,399 14,381,763Assets by segments 163,386,607 156,979,289 50,233,125 194,025,848 564,624,869Trademarks 101,719,402Positive goodwill 25,413,597



Accounting guidelines The same accounting policies were applied in 2011 as in the preceding years

The consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union, which include the standards and interpretations issued by the International Accounting Standards Board (IASB) and SIC as follows:

a) Standards and notes which have come into force in the current reporting period

The following corrections and amendments of existing IFRS standards and IASB explanations entered into force in the current reporting period:

IFRS 1 (amended) “First-Time Adoption of IFRS”, adopted by the EU on 25 November 2009 (effective for annual periods beginning on or after 1 January 2010);

IFRS 3 (amended) “Business combinations”, adopted by the EU on 3 July 2009 (effective for annual periods beginning on or after 1 July 2009);

IFRS 1 (amended) “First-time Adoption of international financial reporting standards”, additional exceptions for users using IFRS for the first time, adopted by the EU on 23 June 2010 (effective for annual periods beginning on or after 1 January 2010);

IFRS 2 (amended) “Share-based payment”- group cash-settled share-based payment transactions , adopted by the EU on 23 March 2010 (effective for annual periods beginning on or after 1 January 2010);

IAS 27 (amended) “Consolidated and separate financial statements”, adopted by the EU on 3 June 2009 (effective for annual periods beginning on or after 1 July 2009);

Amendments to IAS 39 “Financial instruments: recognition and measurement” – eligible hedged items, adopted by the EU on 15 September 2009 (effective for annual periods beginning on or after 1 July 2009);

Amendments to various standards and interpretations “Improvements to IFRS (2009)” resulting from the annual improvement project for IFRS published on 16 April 2009 (IFRS 2, IFRS 5, IFRS 8, IAS 1, IAS 7, IAS 17, IAS 18, IAS 36, IAS 38, IAS 39, IFRIC 9 and IFRIC 16) primarily with a view to remove inconsistencies and clarify wording, adopted by the EU on 23 March 2010 (effective for annual periods beginning on or after 1 January 2010);

IFRS 12 (amended) “Business Combinations”, adopted by the EU on 25 March 2009 (effective for annual periods beginning on or after 30 March 2009);

IFRIC 15 “Agreements for construction of real estate”, adopted by the EU on 22 July 2009 (effective for annual periods beginning on or after 1 January 2010);



IFRIC 16 “Hedges of a net investment in a foreign operation”, IFRIC 17 “Distribution of non-cash assets to owners”, adopted by the EU on 26 November 2009 (effective for annual periods beginning on or after 1 November 2009);

IFRIC 18 “Transfer of assets from customers”, adopted by the EU on 27 November 2009 (effective for annual periods beginning on or after 1 November 2009)

The denoted amendments of existing standards did not affect the Company's accounting policies.

b) Standards and interpretations issued by the IASB and adopted by the EU, but not yet effective

On the day of approval of these financial statements the following standards, reveisions and interpretations adopted by the EU have been issued, but are not yet effective:

Amendments to IAS 24 “Related party disclosures” - Simplifying the disclosure requirements for government-related entities and clarifying the definition of a related party, adopted by the EU on 19 July 2010 (effective for annual periods beginning on or after 1 January 2011);

Amendments to IAS 32 “Financial instruments: presentation” – accounting for rights issues, adopted by the EU on 23 December 2009 (effective for annual periods beginning on or after 1 February 2010);

Amendment to IFRS 1 “First-time Adoption of international financial reporting standards”- Limited exemption from comparative IFRS 7 disclosures for first-time adopters, adopted by the EU on 30 June 2010 (effective for annual periods beginning on or after 1 July 2010);

Amendments to IFRIC 14 “IAS 19 – limit on a defined benefit asset, minimum funding requirements and their interaction” - Prepayments of a minimum funding requirement, adopted by the EU on 19 July 2010 (effective for annual periods beginning on or after 1 January 2011);

IFRIC 19 “Extinguishing financial liabilities with equity instruments”, adopted by the EU on 23 July 2010 (effective for annual periods beginning on or after 1 July 2010).

The Company opted not to adopt these standards, amendments and interpretations before they enter into force. The Company estimates that the adoption of these standards, amendments and interpretations will not have a significant impact on the Company’s financial statements during the period of initial application.

c) Standards and interpretations issued by the IASB, but not yet adopted by the EU

On the day of approval of these financial statements the following accounting standards, revisions and interpretations exist which are not yet effective:



IFRS 9 “Financial instruments” (effective for annual periods beginning on or after 1 January 2013);

Amendments to IFRS 7 “Financial Instruments: IFRS 9 “Financial instruments: Disclosures”- Transfers of financial assets (effective for annual periods beginning on or after 1 July 2011);

Amendments to various standards and interpretations “Improvements to IFRS (2010)” resulting from the annual improvement project for IFRS published on 6 May 2010 (IFRS 1, IFRS 3, IFRS 7, IAS 1, IAS 27, IAS 34, IFRIC 13) primarily with a view to remove inconsistencies and clarify wording, adopted by the EU on 23 March 2010 (most amendments are to be applied for annual periods beginning on or after 1 January 2011);

1. Consolidation

Subsidiary companies in which the Group's indirect or direct equity is larger than half of voting rights or can in any other way influence operation are considered consolidated. They are consolidated in the Group's statements from the day when the Group took over their controlling interest and their consolidation ends when the Group has no controlling interest in them anymore. All transactions and receivables and liabilities among the Group's companies are eliminated for the purpose of consolidation. Dividends received from subsidiaries were also eliminated. For the purpose of ensuring consistent and correct data for the needs of the Group's consolidation and financial reporting, the accounting policies of the individual companies needed to be harmonized with the controlling company's policies.

At the accounting of takeovers, the Group uses the purchase method. The cost of purchase of a takeover is assessed as the fair value of assets and capital instruments given and assumed liabilities on the day of transaction, together with the expenses directly attributable to the takeover. Assumed assets, liabilities and conditional liabilities attaching to a takeover are initially recorded at the fair value on the day of the takeover, irrespective of the size of the minority interest. A surplus of the purchase price over the fair value of the Group's interest in net assets of an acquired undertaking is recorded as positive goodwill. If the carrying amount of the investment exceeds the net value of the subsidiary's assets, the difference is recognised through profit or loss as an impairment loss.

The Group treats transactions with minority holders the same as transactions with external partners. Profits and losses of minority holders are disclosed in the Group's income statement.

2. Composition of affiliates

The interrelated group of companies in which the company Pivovarna Laško, d. d., holds its financial investments is composed of the following companies:



Value Activity of the Percent of total Net profit/loss

Company name company State participation equity in EUR I.-VI./2011

SUBSIDARIES COMPANIESRadenska, d. d. production of beverages Slovenija 93.81 % 81,042,850 1,654,112Group Union Ljubljana production of beer and bev. Slovenija 97.90 % 90,569,149 9,840,223Jadranska pivovara, d. d. production of beverages Hrvaška 99.11 % -2,087,215 -487,700Vital Mestinje, d. o. o. production of beverages Slovenija 96.92 % 3,362,138 4,350Group Delo newspaper-publish. activity Slovenija 100.00 % 19,613,050 -439,330RA&LA, d. o. o. wholesale BiH 100.00 % 128,272 4,210Firma Del, d. o. o. beer production Slovenija 100.00 % 51,846 306Laško Grupa, d. o. o. intermediate trade Hrvaška 100.00 % 72,247 69,544

Pivovarna Laško, d. d., Trubarjeva 28, Laško, draws up the consolidated annual report for the parent company and for subsidiaries in Pivovarna Laško Group. Due to their material irrelevance, the following companies are not included in the consolidation: Del, d. o. o., Laško, RA&LA, d. o. o., Sarajevo and Laško Grupa, d. o. o., Zagreb.

3. Recognition of revenues

Revenues are recognised on the basis of the sale of products, services and merchandise and takeovers of these on the part of customers (exclusive of VAT and excise duties), foreseen reclamations, rebates and discounts. Sales revenues are recognised when a significant portion of the risk and benefits of ownership of the goods is transferred from the seller to the buyer.

Group revenues are a sum of the revenue of individual companies included in the Group. Revenues obtained within the group of companies are excluded from group revenues. Other revenues realised are recognised on the following basis:

interest revenues – are recognised upon their arising unless a doubt exists that they will be collected, whereby the amount is written off for the replacement value. Interest revenues from that point on are recognised on the basis of interest rates serving as a discontinuation of future cash flows,

revenues from dividends are recognised when Group becomes entitled to receive dividend payments.

4. Investments into subsidiaries

An affiliated group company is a company where the controlling company has the controlling capital share or controlling influence due to any other reason and which enters the group for which joint financial statements are prepared.

Investments into subsidiaries are assessed at their original historical costs. Revenues from profit sharing are acknowledged as revenue from financing, when they are paid or when the General Meeting approves a preposition on profit sharing and payment of the dividend. Investments are impaired whenever their replaceable values are lower than their book values. Losses attributed to impairments are immediately recognised in the income statement.



5. Financial assets held until maturity

Associated companies are companies in which the company has between 20% and 50% of the voting rights, and where it has a significant impact on business, but they are not controlled. Financial investments in associated companies are valued at cost, but must be reviewed each year, and may not exist if the circumstances indicate the need for impairment. To this end, valuations are carried out of investments in associated companies authorized by the business appraisers. If the estimated value of an investments is lower than cost, the difference is recognized as a financial expense and has a demonstrable impact on the level of income.

Investments in associated companies are calculated according to the equity method. Associated companies are companies in which the company has between 20% and 50% of the voting rights, and where it has a significant impact on business, but they are not controlled.

The financial investment in the associated company is calculated according to the equity method in accordance with IAS 28 from the date it became an associated company. According to the equity method a financial investment is first carried at cost with the book value increasing or decreasing to reflect the investor's share in the company's profit or loss in which the investor has a significant influence which occurs following the date on which the financial investment was implemented. The amount obtained from the distribution of the net profit of the company in which the investor has a significant influence decreases the book value of the financial investment. A recalculation of the book value is also required if the investor's proportionate equity stake changes, however, these changes are not shown in the income statement. Such changes also include those resulting from a revaluation of tangible fixed assets and financial investments, exchange rate differences and recalculation of the differences arising following the business merger.

Upon the acquisition of a financial investment, the associated company calculates each difference between the costs of the financial investment and the investor's share in the net fair values of identifiable assets, debts and contingency liabilities in accordance with IFRS 3 – Business mergers.

Goodwill connected to the associated company is included in the book value of the financial investment. Amortization of this goodwill is not allowed and is therefore not included when establishing the investor’s share in the profits or losses of the associated company.

Each surplus of the investor’s share in the net fair values of the identifiable assets, debts and contingency liabilities of the associated company over the costs of the financial investment is excluded from the book value of the financial investment and instead included as a revenue upon the established investor's share in the net profits or losses of the associated company for the period in which the financial investment was acquired.

As at 30 June 2011 the Group showed the equity investment into the company Birra Peja, Sh. a., Peć, Kosovo and investment into the company Slopak, d. o. o., Ljubljana among long-term financial investments.



Investment into the associated company Birra Peja, Sh. a., Peć, Kosovo at 30 June 2011 is 39.55% and in company Slopak is 38.96%.

The Group disclosed its investment into 23.34% of the shares of in Poslovni sistem Mercator (MELR) as an investment into the associated company in 2010 and valuated it in accordance with the capital method. As at 31 December 2010 based on the capital method, the investment was classified among short-term assets available-for-sale. Since despite its 23.34% ownership stake the Group does not have a significant influence on the denoted company, the investment is considered available-for-sale in accordance with IAS 39. As at 30 June 2011 the investment was shown at the stock exchange value.

6. Reporting currency

a) Functional and reporting currency

The items disclosed in the financial statements of individual companies of the Group are nominated in the currency of the primary environment - the country in which an individual company operates (this is the so-called “functional currency”). Consolidated financial statements are disclosed in euros, which is the functional and presentation currency of the controlling company (Pivovarna Laško, d. d.).

b) Transactions and balances

Foreign currency transactions are converted into the reporting currency using the exchange rate valid on the day of the transaction. Profits and losses arising from these transactions and in the conversion of cash and liabilities, denominated in a foreign currency, are recognised in the Income Statement.

Exchange rate differences arising from debt securities and other financial instruments are recognised at fair value and are included in the profit or loss of transactions with foreign currencies. Exchange rate differences in non-monetary items such as securities kept for trading are shown as a portion of the increase or decrease of fair value. Currency differences in securities available-for-sale are included in the revaluation reserves on equity.

c) Companies in the Group

Income statements and cash flow statements of subsidiary companies abroad are converted into the reporting currency of the controlling company on the basis of the average foreign currency rate, and balance sheets are converted into the reporting currency with the use of the exchange rate valid at 30 December. If a company abroad is sold, the currency differences realized at the sale are recognized in the profit or loss statement as a part of the profit/loss of the sale.

7. Intangible fixed assets

b) Goodwill

Goodwill represents a surplus in the cost of an acquired company over the fair value of the net asset share of the acquired company on the day of the acquisition. Goodwill



arising upon the acquisition of subsidiary companies is recognized in intangible fixed assets. Goodwill is checked, tested for impairments and measured at the initial value decreased by cumulated impairments on an annual basis. Profits or losses at the sale of a company include the current value of positive goodwill referring to the company sold. The life span of brands cannot be determined therefore an impairment test was performed. Valuation was carried out by an accredited business appraiser registered with the Slovenian Institute of Auditors. No inventories were pledged as at 30 June 11 or any revaluation of the values of inventories implemented.

a) Patents, brand names and licenses

Disbursements for the purchase of patents, brand names and licenses are capitalised and amortised using the straight-line method during their “useful periods of life” (amortisation period). If the useful period of life cannot be determined, such assets are not depreciated and only a test of impairment is performed on an annual basis.

If a revaluation is required, the value of intangible fixed assets must be estimated and written-off up to the amount of their replacement values. The life span of brands cannot be determined therefore an impairment test was performed. No inventories were pledged as at 30 June 2011 or any revaluation of the values of inventories implemented.

The useful period for other intangible assets ranges from 3 to 10 years.

8. Financial assets

The Group classifies its investments into the following categories: financial assets at fair value through profit or loss, loans and receivables, financial investments held-to-maturity and financial assets available-for-sale. The classification depends on the purpose for which the investment was acquired.

a) Financial assets at fair value through profit or loss

This category is divided into two sub-categories: financial assets for trade and assets determined by fair value through profit or loss upon recognition. Investments obtained for the purpose of generating profit from short-term (less than one year) fluctuations in price are classified as available-for-trade and fall under short-term assets. These assets are measured at fair value; realised/unrealised profit and loss arising from changes in fair value are included in the income statement for the period in which they arose. The Group did not possess any investments within the scope of this category in the current period.

b) Loans and receivables

Loans and receivables are non-derivative financial assets with unchangeable or determinable payments which are not traded on the active market. They are included under short-term assets, except those with maturities exceeding 12 months following the balance sheet date. In this case, they are classified among long-term assets. Loans and receivables are shown in the balance sheet under operating and other receivables according to paid values while observing the effective interest rate.



c) Held-to-maturity investments

Investments with fixed maturities which the Management Board of the Company intends to retain to maturity are classified as investments held to maturity and are classified among long-term assets.

d) Financial assets available-for-sale

Financial assets available-for-sale are those non-implemented financial assets marked as available-for-sale or those not classified in any other category. They are also valued according to their fair values, if their fair value can be ascertained. In the event the investment is subject to trade on the securities market, then the fair value is deemed as the market price. The fair value of a particular investment may also be valuated. Valuations are carried out by accredited business appraisers, who are registered at the Slovenian Institute of Auditors. Initially, they are recognized at cost and are subsequently revalued to the fair value. Effects of impairment of financial assets increase financial expenses and have an effect on profit or loss.

Investments which are not traded on the organised securities market which were valued in 2010 are shown in the semi-annual financial statements at their assessed values on the basis of a valuation performed on 31 December 2010.

Those financial assets for which the fair value cannot be established are valued at cost.

9. Derivative financial instruments

Derivatives are those instruments which are used for protection against exposure to financial risks. They are used as a tool to protect against a change in the fair value or cash flow of a risk-exposed protected item. As a subject of trade, it represents an independent financial instrument exposed to risk.

Initially, they are recognized at cost and are subsequently revalued to the fair value. Profit or loss from the revalued derivative for the protection of the fair value against risk is recognized in profit and loss. Revaluation of a financial instrument which is used for cash flow protection is recognized directly in equity when the protection is successful, while the unsuccessful part of the profit or loss from the instrument for the protection against risk is recognized in the income statement.

The Group uses derivatives for protection against exposure to currency and interest rate risks, and for cash flow protection against risk. Integrated derivatives must be separated from the host contract and accounted for as a derivative only if the economic features and risks of the integrated derivative are not closely connected with the economic features and risks of the host contract, if a special instrument with the same provisions as the integrated derivatives is sufficient for the determination of the derivative, and if a complex instrument is measured at the fair value through the income statement.



10. Tangible fixed assets

Tangible fixed assets include real estate, equipment and piece inventory. Since 2008 real estate has been valued using the revaluation model. Prior to this period they were valued at cost.

Amortisation is calculated according to the straight-line method. The expected functional useful lives of individual asset groups comprise:

Real estate 20 - 40 years Plant and machinery 4 - 10 years Computer hardware 2 - 4 years Motor vehicles 4 - 8 years Other equipment 3 - 7 years Land is not amortised for it is considered as having an unlimited life. Similarly, assets under acquisition are also not amortised until they are available for use.

Since the book value of assets is greater than the estimated recoverable amount, assets must be revalued to the estimated recoverable amount (impairment) – IAS 36. The fair value of a particular investment may also be valuated. its fair value decreased by sale expenses, or its value in use.

Profits and losses arising from the disposal of land, buildings and equipment are determined on the basis of their book values and have an effect on profit and loss. Returnable packaging (drums, bottles and crates) are shown among tangible fixed assets while observing a useful life of three or four years. 4-10 years;

Costs of financial liabilities for financing investments into tangible fixed assets are capitalized.

11. Investment property

Investment property is property (land and buildings, parts of buildings or both) owned by the Group or under financial lease for the purpose of earning rent or increasing the value of the property. Investment property is not used for production or the sale of goods or services, for administrative purposes or for regular operations.

Investment property is land or buildings, acquired the appreciation of long-term investments or leased out and not for sale in the near future. Investment property is only recognised as an asset if it is likely that future economic benefits will flow to the company and if its cost can be reliably measured. The fair value model is used by the Group to measure investment property. Losses attributed to impairments are immediately recognised in the income statement. The investment property was assessed by a certified real estate appraiser on 31 December 2008.



12. Impairment of non-financial assets

Assets which have a limited functional life are not amortized and are tested annually for impairment. Assets which are amortised are tested for impairment whenever events or circumstances reflect impairment in an asset. Losses due to impairment are recognised for the surplus of the book value amount over the asset’s replacement value. The replacement value is higher for fair value assets less costs of sales and value upon use.

For the purpose of establishing impairment, assets are broken down into their smallest unit for which cash flows can be defined, independently from other units (cash generating units). The value of goodwill is assessed annually depending on a need for impairment.

13. Non-current assets available-for-sale

Non-current assets (group for disposal) available-for-sale are those non-current assets for which the book values are estimated to be reconciled predominantly with their sale in the following twelve months and which will not be further used. Non-current assets classified as held for sale are measured at the lower of two values: book value or fair value, decreased by selling costs.

14. Inventories

Inventories are stated at the lower of cost and net realisable value according to the method of weighted average pricing. The value of finished products and work in progress consists of total manufacturing costs which includes the costs of processing materials, production labour costs, amortization, services and other manufacturing costs. The net realizable value is estimated based on customary sales prices decreased by the costs of conversion and sales.

15. Operating receivables

At initial recognition, operating receivables are shown at fair value, later they are measured based on paid values using the effective interest rate method less impairment. Impairments of operating receivables are made when the Group expects that it will not be capable of realising the entire amount of the matured receivable. The impairment amount represents the difference between the book value and the current value of (expected) estimated future cash flows discounted by the effective interest rate. The impairment amount is recognised in profit or loss.

16. Cash and cash equivalents

For the cash flow statement, cash and cash equivalents comprise cash on hand, sight deposits at banks and investments into the money market instruments with no bank overdrafts. Overdrafts of bank accounts are included under short-term financial liabilities in the balance sheet.



17. Provisions

Provisions are recognised when the Company shows a legal obligation as a result of past events for which a probable likelihood exists in the future that it will have to settle the liability and when a reliable estimate of the liability can be made. Provisions may not be formed to cover future losses from operations.

18. Provisions for severance pay and jubilee awards

The net liabilities of the Group in connection to long-term benefits under years of service, except for pension schemes are the earnings which employees obtain in exchange for their service during current and previous periods. Such liabilities are calculated using the method of foreseen significance of units and are discounted to their current values.

19. Deferred taxes

Deferred taxes are shown in their entirety while observing liability methods based on temporary differences between taxes associated with assets and liabilities and disclosed tax amounts in the financial statements. Deferred tax is accounted for at the acquisitions with respect to the initial recognition of assets and liabilities which have no influence either on the operating profit, tax profit or loss. Deffered tax is calculated using the tax rate (and legislation) as prescribed by law and valid on the balance sheet date which is expected to be used at the time the deferred tax is realised or liability for deferred tax settled.

Deferred tax receivables are recognised if a possibility exists that a tax gain is expected in the future using temporary differences. Deferred tax is disclosed on the basis of temporary differences arising from investments in subsidiary companies, except when time balance of the closure of temporary differences is under the Group's control and there is a probability that temporary differences will not be cancelled in the near future.

20. Operating liabilities

Operating liabilities comprise credit to suppliers for purchased merchandise or services and liabilities to employees, the State, owners or others. Short-term accrued costs and deferred revenues are also treated as operating liabilities. Liabilities are recognised if it is likely that due to their settlement, factors enabling economic benefit are decreased and the amount for settlement can reliably be measured. They are initially recognised at fair value, and later measured according to realised payments using effective interest rates.

21. Financial liabilities

Financial liabilities are recognised at fair value upon their arising, exclusive of any arising transaction costs. In the upcoming period, financial liabilities are measured according to their realised payment using effective interest rates. Any difference between receipts (exclusive of transaction costs) and liabilities are recognised in profit or loss throughout the entire period of the financial liability.



22. Share capital

Ordinary shares are classified under capital. Transaction costs directly associated with the issue of new shares which are not connected to the acquisition of the company are shown as a decrease in capital. Any surpluses over the fair value of received paid-in amounts in excess of the book value of newly issued shares are recognised as paid-in capital surpluses.

23. Own shares

If the Company reacquired its own shares in the business year, the paid amount inclusive of transaction costs, exclusive of tax is deducted from total capital as own shares (treasury shares) until these shares are removed, reissued or sold. If own shares are later sold or reissued, all received payment with the exception of transaction costs and associated tax effects are included under equity capital.

24. Dividends

Until approved by the General Meeting of Shareholders, foreseen dividends are treated as retained earnings.

25. Reporting by segments

Business segments are formed by products or services which on the basis of risk and benefits, differ from the products and services of other segments. Regional (geographic) segments comprise products or services within a specific economic environment which are exposed to risk and benefits which differ from risk and benefits in other economic environments.

Managing the financial risks of the Group

The financial risks of Pivovarna Laško Group are described on pages 41 through 43 of this Semi-Annual Report.



Notes to the Unaudited Consolidated Semi-Annual Financial Statements

1. Companies included in the consolidation

The consolidated financial statements include the financial statements of the parent company Pivovarna Laško, d. d. and its subsidiaries in which the parent company possesses a majority stake and controlling influence.

The following subsidiaries of Pivovarna Laško, d. d. are included in the consolidation: Radenska, d. d. Radenci

(of which Pivovarna Laško, d. d. is the 93.813% owner),

Union Group which includes the parent companyPivovarna Union, d. d. (of which Pivovarna Laško, d.d. is the 97.895% owner), subsidiary of the company Fructal živilska industrija, d. d., Ajdovščina (of which Pivovarna Union, d.d. is the 93.728% owner), Fructal Zagreb, d. o. o., (of which Fructal, d. d. is the 100% owner), Fruktal Mak, a. d., Skopje (of which Fructal, d. d. is the 89.39% owner) and Eurofruit, d. o. o., Sarajevo (of which Fructal, d. d. is the 100% owner).

Jadranska pivovara, d. d. Split (of which Pivovarna Laško, d. d. is the 99.106% owner),

Vital Mestinje, d. o. o. (of which Pivovarna Laško, d. d. is the 96.92% owner),

Delo, d. d. Ljubljana (of which Pivovarna Laško, d. d. is the 80.834% owner and Radenska, d. d. the 19,166% owner). The full consolidation method was used in drawing up the consolidated financial statements for the companies in the Group of affiliated companies of Pivovarna Laško. Due to their insignificance, the consolidated financial statements do not include the subsidiaries RA&LA, d. o. o., Sarajevo, in which Pivovarna Laško, d. d. has a 69.23% business stake, Radenska, d. d. a 1.97% business stake, Pivovarna Union, d. d. an 11.48% business stake and Fructal, d. d. a 17.32% business stake, subsidiary Firma Del, d. o. o., Laško in which Pivovarna Laško, d. d. has a 100% business stake and the subsidiary Laško Grupa, d. o. o., Zagreb in which Pivovarna Laško, d. d. has a 100% business stake. 2. Disclosures of Individual Items from the Income Statement

a) Net sales revenue

The Pivovarna Laško Group generated 161.3 million in net sales revenue in the first half of 2011, representing EUR 5.8 million or 3.8% higher net sales revenue than in the same period in 2010. Net revenue from the sale of products and services on the domestic market comprised 83.4% of total sales revenue and were EUR 2.7 million higher than in the same period last year. Net sales revenue from products and services



sold on foreign markets comprised a 16.6% share and were EUR 2.3 million higher in comparison to the first six months of last year.

The greatest share of revenue in the net sales revenue structure of the Group was achieved from the sale of beer in the amount of EUR 72.7 million, representing a 45.2% share, followed by the sale of other beverages in the amount of EUR 51.2 million, representing a 33.7% share, revenue from newspaper and publishing activities with a 17% share. The companies Pivovarna Laško, d. d. and Pivovarna Union, d. d. together generated 53.9% of all net sales revenue. b.) Operating expenses

In the first half of 2011 the Group generated EUR 152.7 million in operating expenses, representing a EUR 10.1 million or 7.1% increase over the same period of last year. Costs of materials rose significantly, namely by EUR 6.8 million as well as costs of services (by EUR 2.6 million). Among costs of services, the increase in marketing costs by 24.8% or EUR 3.2 million stood out while the costs of other services decreased somewhat. Labour costs and costs of amortisation also decreased.

Costs of amortization decreased by EUR 4.5 million in comparison to the first six months of the previous year, predominantly the consequence of the unaccounted for amortization in the Fructal and Delo Groups and the company Jadranska pivovara-Split, d. d. In accordance with IFRS 5 the Group reallocated the assets and liabilities of the denoted companies to the group for divestment at the end of 2010 showing them at fair value reduced by the costs of sale. In accordance with this standard, the amortisation is not calculated for assets which can be depreciated.

A valuation of the group for divestment was not performed on 30 June 2011. The operations of Delo and Jadranske pivovare were implemented according to plan during the first half of the year therefore management assesses that the fair value of these two groups for divestment reduced by the costs of sale did not significantly change from the valuation performed in 2010.

A contract on the sale of a 93.73% share of the company Fructal, d. d. was signed with the buyer Nectar, d. o. o. in July 2011 for the contractual amount of EUR 35,300,000. Due to revaluation of the groups for divestment of Fructal on the contractual amount the Group recognised impairment in the amount of EUR 5.5 million in the consolidated financial statements under prevredno-tovalnimi poslovnimi odhodki. c.) Operating profit/loss

The Pivovarna Laško Group generated an operating profit of EUR 14.8 million from its regular activities taking into account amortisation, representing a 3% increase over the same period last year.

The consolidated operating profit of the Group for the period January – June 2011 amounted to EUR 13.2 million, showing a EUR 1.2 million or 8.3% decrease over the same period last year due to an impairment of the Fructal Group trademark which is shown among expenses from operating expenses from the revaluation of operating



current assets in the amount of EUR 5.5 million and not yet charged amortisation of the groups of assets for divestment in the amount of EUR 3.8 million. Operating profit

I.-VI./2011 I.-VI./2011(included in the (with the dep-

konsolidation- reciation FR,( in EUR ) IFRS 5) Delo in JP) I.-VI./2010

Pivovarna Laško, d. d. 6,574,445 6,574,445 7,951,369 82.7Radenska, d. d., Radenci 539,622 539,622 1,783,777 30.3Group Union Ljubljana 10,123,157 8,508,461 6,611,312 128.7Jadranska pivovara - Split, d. d. -121,971 -828,158 -1,987,735 / Vital Mestinje, d. o. o. 8,509 8,509 -72,760 / Group Delo 1,523,254 19,236 95,802 20.1

Total 18,647,016 14,822,115 14,381,765 103.1

Index 11/10

d.) Total consolidated income

The Group realized a negative operating result in the amount of EU 14.2 million. The financing result cannot be compared to the previous year due to the effects of cessation of use of the capital method in connection to the investment in Poslovni sistem Mercator. The management of the Pivovarna Laško Group assesses that it no longer has a significant influence on Poslovni sistem Mercator therefore the investment has been valuated as available-for-sale at the stock exchange price since 1 January 2011.

In the first half of 2010 the Group in line with the capital method which was used at that time, recognised financial revenue from participation in the current semi-annual profits of Poslovni sistem Mercator in the amount of EUR 4.1 million. In the first half of 2011 revenue from approved dividends for 2011 from Poslovni sistem Mercator are shown under financial revenue in the amount of EUR 7 million.

Due to the termination of the capital method for valuating the denoted investment, the Group in the first half of 2011 recognised EUR 12.1 million in financial expenses which arose from the net effect of concluded realisation of the share of change in other comprehensive income of Mercator from its investment and exchange rate differences until 31 December 2010 (EUR -17.7 million– with other comprehensive income of the Group increasing as a result) and differences between the accrued valuation according to the capital method until 1 January 2011 and the stock price at that time (EUR +5.6 million).

If all the denoted effects are included, the Group realised loss of EUR 1 million in the first half of 2011.



e.) Consolidated net profit/loss

The consolidated net result of the Group was negative (-EUR 1.2 million) and differs by EUR 0.2 million from the consolidated comprehensive result for calculated taxes.

The realized net loss is predominantly due to termination of the capital method for valuating investments in Poslovni system Mercator in the amount of EUR 12.1 million and impairment of the trademark of the Fructal Group in the net amount of EUR 3.9 million. The total negative effect on net profit/loss was EUR 16 million. Uncalculated amortization of EUR 3.8 million had a positive effect on net profit/loss. If all the listed effects were excluded from the net profit/loss, the net profit of the Group would amount to EUR 11 million showing a EUR 4.8 million or 77.4% increase over the same period last year. f.) Comprehensive income

Total comprehensive income includes both net profit/loss and other comprehensive income. Other comprehensive income particularly affects the final realisation of the share of change in other comprehensive income of Mercator from its investments and exchange costs up to 31 December 2010 in the amount of EUR 17.7 million (this led to a decrease in the net profit of the Group (see above) which was due to the termination of the capital valuation method and revaluation of financial assets and real estate in the amount of EUR 1.1 million. Total comprehensive income in the first half of this year comprised EUR 17.7 million and showed an increase of EUR 13 million over the same period last year.



3. Notes to Individual Items of the Statement of the Financial Position

a.) Intangible fixed assets

Year 2011 Positive Licenses and Property IFATrademarks goodwill other IFAs rights in acquisition Total

COST OF PURCHASE

31 December 2010 - 63,657,887 7,024,422 234,083 5,039 70,921,431

1 January 2011 - 63,657,887 7,024,422 234,083 5,039 70,921,431

Neposredne pridobitve - - - - -Transfer from investments in progress

-- - - - 6,147 6,147

Disposals - - (8,554) - - (8,554)31 December 2010 - 63,657,887 7,015,868 234,083 11,186 70,919,024

ACCUMULATED VALUE ADJUSTMENT

31 December 2010 - - 4,759,944 144,961 - 4,904,905

1 January 2011 - - 4,759,944 144,961 - 4,904,905

Depreciation on the year - - 234,806 8,942 - 243,748Disposals - - (8,553) - - (8,553)30 June 2011 - - 4,986,197 153,903 - 5,140,100

CURRENT COST

30 June 2011 - 63,657,887 2,029,671 80,180 11,186 65,778,924

1 January 2011 - 63,657,887 2,264,478 89,122 5,039 66,016,526

Intangible assets as at 30 June 2011 comprised EUR 65.8 million and include the value of the Pivovarna Union trademark in the amount of EUR 55.7 million and goodwill from investments in Pivovarna Union in the amount of EUR 7.9 million. The remaining value in the amount of EUR 2.1 million represents material rights, software programmes, licenses, etc. The value of intangible assets decreased by the amount of amortization, namely by EUR 0.2 million, in the first half of 2011. No new acquisitions were made in this period.



b.) Plant, property and equipment

Production Other CapitalYear 2011 plant and plant and Small assets in

( in EUR ) Properties Buildings machines equipment inventory acquisition Total

COST OF PURCHASE

31 December 2010 38,636,854 108,414,461 301,206,224 42,493,923 22,886,714 2,827,409 516,465,585

1 January 2011 38,636,854 108,414,461 301,206,224 42,493,923 22,886,714 2,827,409 516,465,585

Direct gains - 11,307 99,974 186,350 89,743 4,783,591 5,170,965Transfer from investments in progress - 187,219 878,854 273,368 1,743,582 (3,052,896) 30,127Transfer to… - (34,869) - (88,615) - - (123,484)Disposals - - (554,268) (94,187) (144,204) - (792,659)

30 June 2011 38,636,854 108,578,118 301,630,784 42,770,839 24,575,835 4,558,104 520,750,534


31 December 2010 - 43,856,034 268,872,770 32,897,495 17,206,534 - 362,832,833

1 January 2011 - 43,856,034 268,872,770 32,897,495 17,206,534 - 362,832,833

Depreciation on the year - 1,225,244 3,367,607 848,665 1,473,490 - 6,915,006Depreciation on the year(old tangible fixed assets) - 274,627 587,651 323,890 99,212 - 1,285,380Disposals - - (548,626) (92,009) (143,021) - (783,656)

30 June 2011 - 45,355,905 272,279,402 33,978,041 18,636,215 - 370,249,563

CURRENT COST

30 June 2011 38,636,854 63,222,213 29,351,382 8,792,798 5,939,620 4,558,104 150,500,971

Plant, property and equipment which on 30 June 2011 amounted to EUR 150.4 million and increased by the amount of new purchases in the amount of EUR 4.8 million and decreased by the amount of calculated amortisation in the amount of EUR 8.2 million in the first six months of 2011.



c.) Investment property

Year 2011( in EUR ) Properties Buildings Total

COST OF PURCHASE

31 December 2010 1,090,980 4,494,245 5,585,225

1 January 2011 1,090,980 4,494,245 5,585,225

Transfer from property, plant and equipment (year 2010) - 123,483 123,48330 June 2011 1,090,980 4,617,728 5,708,708


31 December 2010 - 928,741 928,741

1 January 2011 - 928,741 928,741

Depreciation - 30,300 30,30030 June 2011 - 959,041 959,041

CURRENT COST

30 June 2011 1,090,980 3,658,687 4,749,667

1 January 2010 1,090,980 3,565,504 4,656,484

The value of investment property of the Group did not significantly change for the balance on the last day of 2010. č.) Financial assets available-for-sale

Long-term financial assets available-for-sale totalled EUR 0.7 million as at 30 June 2011 and did not significantly change in comparison to 31 December 2010. d.) Long-term financial investments in subsidiaries

Investments in the subsidiaries which are not included in the consolidation are shown among long-term financial investments in subsidiaries. The value of these investments did not essentially change in comparison to the last day of the previous year. e.) Long-term financial investments in associated companies

The investment in the companies Thermana, d. d., Laško, Birra Peja, Sh. a., Peć, Kosovo and Slopak, d. o. o., Ljubljana are shown among the investments in affiliated companies of the Group. As at 30 June 2011 Pivovarna Laško, d. d., owned 700 shares of Birra Peja, Sh. a., Peć, Kosovo representing a 39.55% stake in the aforementioned company. The value of the investment was assessed as zero on 31 December 2010. The investment into a 38.96% share of the company Slopak, d. o. o., Ljubljana is shown the financial statements of the Laško Group in the amount of EUR 0.3 million. A valuation of the denoted investments was not performed on 30 June 2011.

During the first half of 2011 the two affiliated companies operated at a loss with the net loss of Birra Peja comprising EUR 0.7 million and that of Slopak EUR 0.5 million.



The management will reassess the value of both investments at the end of 2011 and disclose their values in accordance with the assessment and IFRS rules.

f.) Long-term granted loans ( in EUR ) 2011 2010

Long-term loans to associated companies 10,112,191 9,563,257Other Long-term loans 651,259 880,988

Total 10,763,450 10,444,245

Long-term granted loans amounted to EUR 10.7 million as at 30 June 2011 and increased by EUR 0.2 million in the first half of 2011 due to interest calculated and charged to affiliated companies.

g.) Long-term deferred tax receivables

Net long-term deferred tax receivables amounted to EUR 28.1 million as at 30 June 2011, decreasing by EUR 0.9 million in the first half of the year due to the reduction of long-term deferred tax liabilities from the revaulation of the Fructal Group trademark and increased deferred tax receivables from the revaluation of other investments of the Group.

h.) Non-current assets available-for-sale

All net assets of the Delo Group in the amount of EUR 41.5 million, Fructal Group in the amount of EUR 37.1 million and Jadranska pivovara, d. d. in the amount of EUR 4.6 million are shown under the group available-for-sale due to the planned sale thereof in accordance with IFRS 5. The value of the net assets of the Fructal Group decreased by EUR 1.3 million on 31 December 2011, while those of the Delo Group and Jadranske pivovare, d. d. increased by EUR 1.0 million and EUR 0.6 million respectively.

The investment in Poslovni sistem Mercator in the amount of EUR 141.1 milllion is also shown under non-current assets-available-for-sale. This investment had been valued in accordance with the rules of the capital method in the consolidated financial statements last year and shown at a value of EUR 132.9 million. The management of the Pivovarna Laško Group assesses that they no longer have a significant influence on Poslovni sistem Mercator therefore the investment has been valuated as available-for-sale at the listed price since 1 January 2011.

The difference between the stock value and value according to the capital method as at 1 January 2011 is shown in the income statement. The revaluation of investments in 2011 to the listed price as at 30 June 2011 in the amount of EUR 2.5 million is shown as an increase in other comprehensive income or as a revaluation surplus.


Semi-Annual Report 2011 / Financial Report - Pivovarna Laško Group ( in EUR ) 2011 2010

Non-current assets for sale - properties 3,634,713 3,634,713Non-current assets for sale - MERCATOR 141,141,865 132,934,216Non-current assets for sale - FRUCTAL 64,310,812 67,052,031Non-current assets for sale - DELO 74,126,598 72,242,335Non-current assets for sale - SPLIT 10,453,883 10,821,113

Total 293,667,871 286,684,408

The value of real estate which the Company intends to dispose of within one year is also shown among non-short-term assets available-for-sale, namely the business storage spaces with appertaining land in Ljubljana, Hotel Hum and Hotel Savinja. The value of the real estate was disclosed at the assessed fair value and amounted to EUR 3.6 million.



Group of assets and liabilities for divestment

Jadranska ( in EUR ) Fructal, d. d. Delo, d. d. pivovara, d. d. Total

GROUP OF ASSETS HELD FOR SALE

Brand value and goodwill 9,074,623 24,515,021 - 33,589,644Intangible assets and deferred revenues 672,347 2,356,385 46,583 3,075,315Property, plant and equipment 24,733,664 26,971,428 9,703,150 61,408,242Investment properties 17,679 78,475 - 96,154Available-for sale financial assets - 533,127 - 533,127Long-term financial assets 131,128 - - 131,128Long-term loans - - 54,523 54,523Long-term operating receivables 9,279 2,483 - 11,762Long-term deferred tax receivables 3,128,784 2,828,580 - 5,957,364Non-current assets held for sale 583,200 9,178,904 - 9,762,104Inventories 12,361,139 1,042,942 423,824 13,827,905Short-term operating receivables 13,210,807 5,680,938 46,090 18,937,835Derivatives - 200,000 - 200,000Short-term receivables for overpaid income tax - 19,426 - 19,426Cash in banks, cheques and cash in hand 208,823 113,287 42,076 364,186Deferred costs and accrued revenues 179,339 605,602 137,637 922,578Total 64,310,812 74,126,598 10,453,883 148,891,293

LIABILITIES ASSOCIATED WITH A GROUP OF ASSETS

Non-current reservations 1,402,981 2,512,068 1,838,788 5,753,837Non-current financial liabilities 4,131,489 3,837,951 710,462 8,679,902Non-current operating liabilities - - 5,539 5,539Deferred tax liabilities 971,138 5,721,393 - 6,692,531Current financial liabilities 9,707,068 13,477,330 1,331,389 24,515,787Current operating liabilities 9,572,669 5,236,121 1,986,493 16,795,283Accured costs and deferred revenues 1,472,433 1,795,482 23,929 3,291,844Total 27,257,778 32,580,345 5,896,600 65,734,723

Value of assets held for sale 37,053,034 41,546,253 4,557,283 83,156,570

i.) Inventories ( in EUR ) 2011 2010

Material and raw material 16,140,111 13,344,405Unfinished production 2,964,004 1,794,108Products 7,274,739 5,741,862Merchandise 495,816 496,480

Total 26,874,670 21,376,855

The value of inventories as at 30 June 2011 comprised EUR 26.9 million and showed a EUR 5.5 million increase in comparison to the last day of 2010. The increase is predominantly the consequence of the seasonal effect on production and sales. Inventories of raw materials and materials increased by EUR 2.8 million, inventories of work in progress by EUR 1.2 million and inventories of finished products by EUR 1.5 million.



j.) Short–term operating receivables ( in EUR ) 2011 2010

Short-term trade operating receivables: on the domestic market 50,320,523 29,381,056 on foreign markets 12,403,489 6,632,330Less value adjustment (7,602,843) (8,173,646)Total 55,121,169 27,839,740

Short-term oparating receivables on others 11,959,462 4,667,853Advances 455,243 304,790Less value adjustment (2,050,790) (2,151,590)

Balance of receivables 30/6/2011 65,485,084 30,660,793

As at 30 June 2011 short-term receivables including receivables for excessive corporate tax paid amounted to EUR 65.6 million and represented a EUR 33.4 increase over the amount on the last day of the previous year. This increase is predominantly due to the seasonal effect and increased sales in June 2011. The EUR 7 million increase in short-term operating receivables was due to dividends due from Poslovni sistem Mercator. Payment deadlines were not extended nor did the scope of matured receivables significantly change in comparison to the previous year. k.) Short-term financial assets available-for-sale ( in EUR ) 2011 2010

Available-for sale short term financial assets at the cost of purchase 54,167 7,255,113Available-for sale short term financial assets at the fair value 17,193,594 17,299,457

Total 17,247,761 24,554,570

The value of long-term financial assets available-for-sale decreased by EUR 7.3 million in the first half of 2011 predominantly due to the sale of the shares in Zavarovalnica Triglav. I.) Short–term granted loans ( in EUR ) 2011 2010

Short-term part of long-term loans given - 346Short-term deposits 3,218,402 3,886,633Interest from loans to other 1,070,834 39,936Short -term loans 76,053,033 76,947,800Less value adjustment (76,191,015) (76,141,000)

Balance as at 30/6/2011 4,151,254 4,733,715

As at 30 June 2011 the amount of short-term granted loans including advances in the amount of EUR 4.2 million represented a decrease of EUR 0.6 million over the previous year. The decrease applies to bank deposits.



m.) Cash in banks, cheques and cash in hand ( in EUR ) 2011 2010

Cash in banks 950,141 968,570Cash in hand and received cheques 82,357 31,655Monetary resources in foreign currency 10,580 35,986Cash items in the process of collection 70,702 355,159Short-term deposits from banks 214,583 -

Total 1,328,363 1,391,370

n.) Capital of the majority shareholders

The value of the capital of majority shareholders of the Group comprised EUR 139.7 million as at 30 June 2011 and represents 20.8% of the total structure of liabilities. Capital decreased by the amount of realized loss in the first half of 2011, namely by EUR 1.2 million and increased by the amount of change in other comprehensive income in the amount of EUR 18.8 million. Capital increased by EUR 0.06 million due to transactions with the owners. The capital of the majority shareholders decreased due to a reduction in provisions for own shares in the amount of EUR 0.4 million. o.) Capital of the minority shareholders

The capital of the minority shareholders totalled EUR 9.3 million or 6.3% of total capital as at 30 June 2011 and showed a EUR 0.2 million decrease In comparison to the amount on 31 December 2010. This decrease was predominantly the result of the sale of shares of the company Fructal whose major owner was Pivovarna Union and the payment of dividends of Radenka d. d. p.) Liabilities

As at 30 June 2011 total liabilities of the Group amounted to EUR 522.7 million and represented 77.8% of total liabilities. Financial liabilities in the amount of EUR 397.8 million represent 59.2% of total liabilities and did not change with regard to 31 December 2010. Financial liabilities of the Delo Group in the amount of EUR 17.3 million and company Fructal, d. d. in the amount of EUR 13.8 million are shown among liabilities included in consolidated financial statements of the Group under the group for divestment. r.) Provisions for long–term accrued costs and deferred revenues

The value of long-term provisions on 30 June 2011 did not essentially change in comparison to the previous year. Provisions for severance pay and jubilee awards amounted to EUR 2.8 million while other long-term provisions comprised EUR 2 million. The value of long-term provisions in the amount of EUR 1.8 million relate to pending lawsuits of subsidiaries which were formed on the basis of attorney opinions and estimates. A reassessment was not implemented by the attorneys on 30 June 2011.



s.) Long-term financial liabilities ( in EUR ) 2011 2010

Long-term loans obtained from banks 145,808,911 147,033,278Long-term loans obtained from other companies - 54,267Other long-term financial liabilities 2,346 -Total 145,811,257 147,087,545

Transfer to short-term financial liabilities (79,739,769) (62,823,647)

Total 66,071,488 84,263,898

Maturities of long-term financial liabilities

2011 2010

Maturity from 4 to 6 years 4,606,391 5,316,174Maturity from 2 to 4 years 24,983,815 30,461,859Maturity from 1 to 2 years 36,481,282 48,485,867Short-term part of long-term financial liabilities 79,379,769 62,823,645

Total 145,451,257 147,087,545

Long-term financial liabilities to banks comprised EUR 66.1 million as at 30 June 2011 with the portion of loans maturing within a period of one year, namely by 30 June 2012 decreasing in the first half of 2011 by the amount of EUR 19.8 million. The Group did not acquire any new long-term financing sources in 2011.

Long-term financial liabilities to banks are insured through liens on securities, real estate and moveable assets, receivables and sureties given.

t.) Short–term operating liabilities ( in EUR ) 2011 2010

Short-term liabilities to companies in the Group as suppliers - 68,946Short-term liabilities to other suppliers 33,749,307 19,494,812Short-term oparating liabilities to others: to employees 1,767,259 2,048,331 to the state 10,470,531 7,619,574Short-term liabilities for advances 4,100 142,048Other short-term liabilities 2,198,893 1,287,082

Total 48,190,090 30,660,793



u.) Short–term financial liabilities ( in EUR ) 2011 2010

Short-term part of long-term financial liabilities 79,701,169 62,823,646Short-term financial liabilities for interest from loans 2,672,584 2,322,558Short-term loans obtained from banks 243,804,491 241,869,878Other short-term financial liabilities 5,565,164 6,264,591

Total 331,743,408 313,280,673

As at 30 June 2011 short-term financial liabilities comprised EUR 331.7 million showing a EUR 18.5 million decrease over the last day of the previous year. The value of short-term loans including the short-term portion of long-term loans from banks amounted to EUR 323.5 million and showed an increase of EUR 18.8 million over the amount on the last day of the previous year. The total value of short- and long-term loans from banks amounted to EUR 389.6 million as at 30 June 2011 and showed an increase of EUR 0.6 million compared to the last day of the previous year. Loans of the Delo Group and companies Fructal and Jadranske pivovare, d. d. were not disclosed among financial liabilities. Short-term financial liabilities to banks are insured through liens on securities, real estate, moveable property, receivables and sureties.

v.) Short–term accrued costs and deferred revenues

Short-term accrued costs and deferred revenues totalled EUR 5.6 million and predominantly refer to accrued costs for unused employee holiday leave and severance pay paid out due to technological surplus.

z.) Insured financial liabilities

Financial liabilities to banks which on 30 June 2011 comprised EUR 422.3 million (inclusive of the financial liabilities of the Delo Group and companies Fructal and Jadranske pivovare, d. d.) are insured through liens on securities, mortgages and liens on moveable property and assets.

To insure its financial liabilities the Group pledged 4,402,427 shares of Radenska (RARG), 440,295 shares of Pivovarna Union (PULG), 213,115 shares of Probanka (PRBR), 861,110 shares of Poslovni sistem Mercator (MELR), 667,444 shares of Delo (DELR), 270,648 shares of Elektro Gorenjska (EGKG), 1,922,321 shares of Elektro Maribor (EMAG), 2,330,686 shares of Fructal (FRAG), 700 shares of Birra Peje and 645,003 shares of Thermana (ZDLR).

The tax authorities may anytime, within five years of the expiration of the year of when tax is levied, examine the operations of a company which may lead to additional tax liabilities, default interest and penalties in connection to corporate income tax or other taxes and contributions. The Management Board of the Company is not aware of any circumstances which could represent significant liabilities under this heading.




ž.) Surplus of short–term liabilities

The total short-term liabilities of the Group amounted to EUR 451.8 million as at 30 June 2011 while short-term assets totalled EUR 409.8 million. The excess of short-term liabilities over short-term assets comprised EUR 42.1 million. The Group will endeavour to achieve an agreement regarding the extension of payment deadlines for the short-term loans upon their maturity until the divestment of investments in connection to which the selling process is currently unfolding in agreement with the banks.

Semi-Annual Report 2011 / Financial Report - Pivovarna Laško, d. d.

UNAUDITED UNCONSOLIDATED FINANCIAL STATEMENTS OF THE PIVOVARNA LAŠKO, d. d. for the period ended 30 June 2011

Unconsolidated Statement of the Financial Position


on 30 June 2011 Parent Parent company company

30/6/2011 31/12/2010

ASSETS

Intangible fixed assets 1,518,689 1,635,341Property, plant and equipmen

NON-CURRENT ASSETS 293,069,418 294,360,182

t 52,064,283 53,673,619Investment properties 2,970,791 2,877,608Non-current investments in subsidaries 220,922,037 220,919,754Available-for sale financial assets 320,942 320,942Long-term loans 11,827 16,296Long-term operating receivables 804,011 573,467Long-term deferred tax receivables 14,456,838 14,343,155

Non-current assets held for sale 39,545,865 39,545,865Inventories 10,081,029 8,877,962Short-term operating receivables 29,825,375 13,999,334Available-for sale financial assets 57,455,649 56,698,549Short-term loans 873,000 2,250,738Cash in banks, cheques and cash in hand 405,876 96,800

TOTAL CURRENT ASSETS 138,272,114 121,497,098TOTAL ASSETS 431,341,532 415,857,280

EQUITY

Share capital 36,503,305 36,503,305Capital reserves 79,811,656 79,811,653Profit reserves 4,298,825 4,298,827Revaluation surplus 4,382,900 3,554,230Net profit/loss of the year 2,824,486 -TOTAL CAPITAL 127,821,172 124,168,015

LIABILITIES

Non-current employee liabilities 1,105,422 1,105,422Non-current reservations 1,370,866 1,344,963

Non-current financial liabilities 36,765,241 46,122,235

Current operating liabilities 27,148,551 17,247,950Current financial liabilities 231,561,021 219,729,953

TOTAL CURRENT LIABILITIES 264,278,831 243,116,645TOTAL LIABILITIES TO ASSET RESOURCES 431,341,532 415,857,280

CURRENT ASSETS 138,186,795 121,469,248

DEFERRED COSTS AND ACCURED REVENUES 85,319 27,850

MAJORITY CAPITAL 127,821,172 124,168,015

NON-CURRENT RESERVATIONS 2,476,288 2,450,385

NON-CURRENT LIABILITIES 36,765,241 46,122,235

CURRENT LIABILITIES 258,709,572 236,977,903

ACCURED COSTS AND DEFERRED REVENUES 5,569,259 6,138,742



Unconsolidated Income Statement

INCOME STATEMENT ( i n E U R )

for the period 1 January - 30 June 2011 Parent Parent company company

1/1-30/6/2011 1/1-30/6/2010

Net sales revenuse 48,454,487 47,517,387Changes in inventories of products and work in progress 760,948 (659,460)Other operating revenues 132,385 165,653Costs of goods, material and services (33,513,807) (29,901,840)Employee benefit expenses (5,050,618) (5,014,123)Depreciation of intangible and tangible fixed assets (3,353,900) (3,443,433)Write-downs of value (47,034) (15,917)Other operating revenues (808,016) (696,898)OPERATING PROFIT 6,574,445 7,951,369

Financial revenues 4,185,904 220,615Financial expenditures (8,141,621) (5,730,772)Net financial expenses (3,955,717) (5,510,157)

PROFIT BEFORE TAXATION 2,618,728 2,441,212

Tax 205,758 (483,338)NET PROFIT/LOSS OF ACCOUNTING PERIOD 2,824,486 1,957,874

Share of net profit attributable to owners of controlling interest 2,824,486 1,957,874Earnings per share attributable to owners of controlling interestNet profit per share 0.3229 0.2238Adjusted net profit per share 0.3229 0.2238



Unconsolidated Statement of Comprehensive Income

STATEMENT OF COMPREHENSIVE INCOME ( i n E U R )


1/1-30/6/2011 1/1-30/6/2010

Net profit/loss of accounting period 2,824,486 1,957,874

OTHER COMPREHENSIVE INCOMEFinancial assets for sale 920,744 1,606,690Deferred taxes from revaluation (92,073) (155,604)OTHER COMPREHENSIVE INCOME 828,671 1,451,086

TOTAL COMPREHENSIVE PROFIT 3,653,157 3,408,960

Total comprehensive income per share 0.4176 0.3897Diluted total comprehensive income per share 0.4176 0.3897


Semi-Annual Report 2011 / Financial Report - Pivovarna Laško, d. d. Unconsolidated Statement of Changes in Shareholder’s Equity STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY - parent company ( i n E U R )


Net Share Capital Legal Reserves for Treasury Other profit Total profit profit from Net Revaluation TOTAL

capital reserves reserves treasury shares shares reserves reserves previous years profit surplus CAPITAL

Transactions with ownersOther changes - - - - 5,802

1 January 2011 36,503,305 79,811,653 3,650,331 660,564 (12,068) - 4,298,827 - - 3,554,230 124,168,015

(5,802) - - - - -Transactions with owners - - - - 5,802 (5,802) - - - - -

Changes in comprehensive incomeNet profit of the year - - - - - - - - 2,824,486 - 2,824,486Revaluation surplus of financial investments - - - - - - - - - 920,744 920,744Related taxes with items comprehensive income - - - - - - - - - (92,074) (92,074)Changes in comprehensive income - - - - - - - - 2,824,486 828,670 3,653,156

Changes in capitalCreation reserves for own shares - - - (352,276) - 352,276 - - - - -Changes in capital - - - (352,276) - 352,276 - - - - -

30 June 2011 36,503,305 79,811,653 3,650,331 308,288 (6,266) 346,474 4,298,827 - 2,824,486 4,382,900 127,821,171


Semi-Annual Report 2011 / Financial Report - Pivovarna Laško, d. d..


Unconsolidated Statement of Changes in Shareholder’s Equity STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY - parent company ( i n E U R )


Net Share Capital Legal Reserves for Treasury Other profit Total profit profit from Net Revaluation TOTAL

capital reserves reserves treasury shares shares reserves reserves previous years profit surplus CAPITAL

Transactions with ownersRevaluation surplus of financial investments - - - - - - - - - 1,606,690 1,606,690Deferred tax assets - - - - - - - - - (155,604) (155,604)

Transactions with owners - - - - - - - - - 1,451,086 1,451,086

Changes in comprehensive incomeNet

1 January 2010 36,503,305 85,561,447 3,650,331 1,211,460 (20,498) - 4,841,293 - - 2,396,598 129,302,643

profit of the year - - - - - - - - 1,957,874 - 1,957,874

Changes in comprehensive income - - - - - - - - 1,957,874 - 1,957,874

Changes in capital

Changes in capital - - - - - - - - - - -

30 June 2010 36,503,305 85,561,447 3,650,331 1,211,460 (20,498) - 4,841,293 - 1,957,874 3,847,684 132,711,603


Unconsolidated Statement of Cash Flows

STATEMENT OF CASH FLOWS ( i n E U R )


1/1-30/6/2011 1/1-30/6/2010

CASH FLOWS FROM OPERATING ACTIVITIESCash generated from operations 6,568,396 7,673,320Net cash generated from operating activities 6,568,396 7,673,320

CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment (1,837,741) (2,892,733)Purchase of intandible assets 116,652 (1,691)Purchase/sale of available for sale financial assets (142,650) 329,080Interest received - 220,615Dividends and capital gains 109,870 -Net cash generated/used in investing activities (1,753,869) (2,344,729)

CASH FLOWS FROM FINANCING ACTIVITIESInterest paid (7,376,147) (5,730,772)Increase/decrease of 2,870,696 595,615Net cash used/generated in financing activities (4,505,451) (5,135,157)

NET DECREASE / INCREASE IN CASH AND CASH EQUIVALENTSCash and cash equivalents at the begining of the year 96,800 129,283Cash and cash equivalents at the end of the yea

309,076 193,434

r 405,876 322,717



Unconsolidated Cash Flow from Operations

CASH FLOW FROM OPERATIONS ( i n E U R )


1/1-30/6/2011 1/1-30/6/2010

OPERATING PROFIT OF THE PERIOD 6,574,445 7,951,369

ADJUSTMENTS FOR:

CHANGES OF REVERSE CAPITAL

CASH MADE FROM OPERATION 6,568,396 7,673,320

Depreciation of property, plant and equipment 3,237,247 3,354,148Depreciation of intangible fixed assets 116,652 89,291Net movement in reservations 25,903 20,259ADJUSTMENTS 3,379,802 3,463,698

Inventories and non-current assets for sale (282,323) 666,407Operating and other receivables (12,434,381) (10,007,020)Operating and other liabilities 9,330,853 5,598,866CHANGES (3,385,851) (3,741,747)



Notes to the Unaudited Unconsolidated Semi-Annual Financial Statements 1. Introductory Note

The financial statements of the parent company Pivovarna Laško, d. d. have not been audited and were prepared in compliance with the International Financial Reporting Standards and Companies Act (ZGD-1).

The data on operations encompass the period January – June 2011. a.) Sales

The Company sold 496,399 hl of beverages, reflecting a 0.43% decrease in sales over the comparable period in 2010. b.) Achievement of planned objectives

Pivovarna Laško, d. d. attained 99.81% of planned sales for the beer segment and 75.81% of planned sales for the natural drinking water segment. 2. Disclosures of individual items from the Income Statement

a.) Net sales revenue

Net sales revenue generated by Pivovarna Laško, d. d. in the first half of 2011 comprised EUR 48.5 million signifying a EUR 0.9 million or 2% increase over the same period last year. Net sales revenue from products and services decreased by 3.65%. Net sales revenue on the domestic market comprised EUR 31.6 million and were 7,2% less than in the previous year while net sales revenue on foreign markets increased by 17.8% and amounted to EUR 6.6 million. The share of net sales revenue on foreign markets increased from 14.1% (for the first six months of 2011) to 17.2% of total net revenues from the sale of products and services in comparison with the same period in 2010.

b.) Operating expenses

Operating expenses which amounted to EUR 42.8 million for the first half of the year decreased by EUR 3.7 million or by 9.5% in comparison to the previous year. Expenses related to the acquisition price of merchandise had increased by EUR 2 million while cost of services and cost of materials increased by EUR 1.2 million and EUR 0.3 million respectively. Labour costs and amortization costs remained at the same level as in the same period of last year.

c.) Operating profit/loss

Operating profit in the first half of 2011 comprised EUR 6.6 million and showed a EUR 1.3 million or 17.3% decrease over the same period of the previous year.



d.) Financing profit/loss

The Company showed a negative financing result of EUR 4 million for the first half of 2011. The financing result was also negative for the first half of 2010 and comprised EUR 5.5 million. A more favourable financing result in the first six months of the year was provided from financial revenue from dividends in the amount of EUR 4.2 million. These were shown among financial revenue in the second half of last year due to the time rescheduling of the groups. The Company recognised revenue from the dividends of Poslovni sistem Mercator in the amount of EUR 2.5 million and revenue from the dividends of the subsidiary Radenska, d. d. in the amount of EUR 1.1 million among financial expenses in the first half of 2011.

The Company disclosed EUR 7.9 million in interest payments in the first half of 2011 representing a EUR 1.3 million increase over the figure from the same period last year. Financial interest expense surpassed operating profit by EUR 1.3 million.

e.) Net profit/loss

Total profit for the first half of 2011 amounted to EUR 2.6 million while net profit comprised EUR 2.8 million. Compared to the same period last year, net profit had increased by EUR 0.9 million or 44.3%.

f.) Cash flow from operating activities (EBITDA)

The Company generated a cash flow of EUR 9.9 million from operating activities (EBITDA) representing 12.9% decrease over the same period last year. 3. Notes to individual items of the Statement of Financial Position

a.) Assets

The assets of the Company as at 30 June 2011 amounted to EUR 431.3 million and represented a EUR 15.5 million reduction over the amount on the last day of the previous year.

b.) Plant, property and equipment

Plant, property and equipment which on 30 June 2011 amounted to EUR 53 million increased due to new investments by the amount of EUR 1.7 million and decreased by the amount of calculated amortization or by EUR 3.2 million.

c.) Long-term financial investments

Long-term investments totalled EUR 221.2 million as at 30 June 2011 with EUR 220.9 million of the amount representing long-term financial investments of subsidiaries. The value of the long-term investments did not essentially change in comparison to the last day of the previous year. A valuation of all investments in the subsidiaries was performed by an certified business appraiser on 31 December 2010. A value assessment was not performed on 30 June 2011.



d.) Long-term deferred tax receivables

The Company disclosed net receivables of EUR 14.5 million as at 30 June 2011. The amount of the long-term deferred tax liabilities did not essentially change in comparison to the balance at the end of 2010.

e.) Inventories

The value of inventories increased by EUR 1.2 in comparison to the balance at the end of 2011 due to seasonal effects. The value of work in progress and finished products showed the greatest increase, growing by EUR 0.8 million.

f.) Short–term operating receivables

Short-term receivables which amounted to EUR 29.8 million on 30 June 2011 increased by EUR 15.8 million in comparison to the state on 31 December 2010 predominantly due to seasonal effects and the significant increase in sales in June 2010.

g.) Short-term granted loans

Short-term granted loans comprised EUR 0.8 million on 30 June 2011 and regard bank deposits.

h.) Capital

The capital of the Company comprised EUR 127.8 million as at 30 June 2011 and in comparison to 2010 increased by the effect of the revaluation of financial investments in the amount of EUR 0.8 million and profit of the current year in the amount of EUR 2.8 million.

i.) Long-term financial liabilities

Long-term financial liabilities of the Company amounted to EUR 36.8 million on 30 June 2011 and decreased by the value of the short-term financial liabilities of loans carried over in the amount of EUR 9.4 million. EUR 16.9 million in long-term liabilities from banks fall due in the second half of 2011, EUR 19.9 million in the first half of 2012, EUR 13.8 million in the second half of 2012, EUR 11.4 million in 2013, EUR 7.4 million in 2014 and EUR 4.2 million in 2015.

j.) Short–term operating liabilities

Short-term operating receivables which amounted to EUR 27.1 million on 30 June 2011 increased by EUR 9.9 million in comparison to the state on 31 December 2010 predominantly due to seasonal effects and extended payment deadlines.

k.) Short–term financial liabilities

Short-term financial liabilities as at 30 June 2011 totalled EUR 231.6 million of which EUR 150.7 million comprised short-term loans from banks, EUR 36.7 million the short-term portion of long-term loans, EUR 41.2 million liabilities from short-term loans taken out from subsidiaries, EUR 2.3 million interest liabilities and EUR 0.5



million other short-term financial liabilities. In 2011 the Company took out EUR 3 million in new long-term loans from banks.


I.) Insured financial liabilities

The financial liabilities of the Company which regard loans from banks totalled EUR 224.2 million as at 30 June 2011 and are insured through liens on securities, mortgages and liens on moveable assets and receivables in their entirety. To insure its financial liabilities the Company pledged 4,747,731 shares of Radenska (RARG), 440,295 shares of Pivovarna Union (PULG), 213,115 shares of Probanka (PRBR), 317,498 shares of Poslovni sistem Mercator (MELR), 539,516 shares of Delo (DELR), 270,648 shares of Elektro Gorenjska (EGKG) and 645,003 shares of Thermana (ZDRL). The loans taken out from subsidiaries in the amount of EUR 41.2 million are insured through mortgages. The tax authorities may, anytime within five years following the expiration of the year of when tax is levied, examine the operations of a company which may lead to additional tax liabilites, default interest and penalties in connection to corporate income tax or other taxes and contributions. The Management Board of the Company is not aware of any circumstances which could represent significant liabilities under this heading.

m.) Surplus of short–term financial liabilities

The total amount of short-term liabilities of the Company amounted to EUR 264.3 million on 30 June 2011 while short-term assets amounted to EUR 138.3 million. The surplus of short-term liabilities which amounted to EUR 126 million for the first six months of 2011 increased by EUR 4.4 million in comparison to the last day of the previous year. The Company will endeavour to attain an agreement with the banks on extending the repayment period for short-term loans. Failing this, the loans will be paid off through the sale of a portion of the long-term investments of the Company.

4. Remuneration of the Management Board

Gross remuneration of the Management Board for the first half of 2011

( in EUR ) 2011 2010

Fixed part of receipts 206,000 96,000Other receipts (stimulation) 1,053 -Benefits - -

Total 207,053 96,000

Fixed part Other receipts( in EUR ) of receipts (stimulation) Total

Dušan Zorko 96,000 - 96,000Gorazd Lukman 60,000 - 60,000Mirjam Hočevar (since 1/5/2011) 20,000 - 20,000Robert Šega (since 31/3/2011) 30,000 1,053 31,053

Total 206,000 1,053 207,053

Pivovarna Laško, d. d., Trubarjeva 28, 3270 Laško, August 2011

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Semi annual report 2011 24 8 2011

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