Annual report 2008 03

annual

REPORT this annual report is a summary

2008 NASLOVKAA409 ANG.indd 1

22/5/09 07:15:35

Annual Report 2008 / Contents

CONTENTS INTRODUCTION Performance highlights of Pivovarna Laško Group and Pivovarna Laško, d. d.

Plans for 2009 Presentation of Pivovarna Laško Group Presentation of the company Pivovarna Laško, d. d.

An overview of most significant events in 2008 Events after the conclusion of the accounting period A word from the manager

ACCOUNTING REPORT Audited non-consolidated financial statements of the company Pivovarna Laško, d. d.

Balance sheet Profit and loss statement Movement of the capital statement Cash flow statement Covering balance loss Explanatory notes to non-consolidated financial statements Statement of the management Auditor’s report Audited consolidated financial statements of Pivovarna Laško Group Consolidated balance sheet Consolidated profit and loss statement Consolidated movement of the capital statement Consolidated cash flow statement Explanatory notes to consolidated financial statements Statement of the management Auditor’s report

4 6 11 12 14 17 20 23

24 24 24 25 27 29 30 31 73 74 76 76 78 79 81 82 133 134

Annual Report 2008 / Introduction

INTRODUCTION Pivovarna Laško, the successor of a more than a 180-year tradition of beer making in Laško, successfully completed the merger of Slovenian beverage producers.

More than three years of independent business operations of Pivovarna Laško Group through a challenging period, particularly marked by the overwhelming economic downturn in the end of 2008, gives us hope that, together, we will be able to overcome these difficult business conditions.

Our high market shares in the area of beer, mineral and natural water, soft drinks and other beverages prove that Pivovarna Laško Group, with its range of high-quality products, remains the best choice in the Slovenian market.

We seek to remain an independent beverage producer in the region and to use this welldeveloped strategy to expand our business practice to foreign markets.

We are aware of the significance of having owners who have faith in our company, our vision and our objectives, which is why we remain focused on the satisfaction of numerous shareholders, buyers, employees as well as on the environment protection.

The Annual Report 2008 is designed in accordance with the application of the new corporate identity of Pivovarna Laško and of the visual image of the Laško strategic brand.

Pivovarna Laško is strengthening and consolidating the reputation of its well-established trademarks, as it is developing into one of the most important beverage producers in South East Europe. The system of branding, the recognisability of each strategic brand together with transparent origin and ownership are paramount in realising our objectives. The best way to communicate this is the visual image – both of each individual brand and of the entire corporation.

Pivovarna Laško is thus a proud owner of strategic brands, among which Laško assumes the highest rank.

Laško, 20 April 2009

Pivovarna Laško Group and Pivovarna Laško, d. d.

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Annual Report 2008 / Introduction

Vision Vision

To become a leader in the production and sale of beverages.

To strengthen the reputation of individual recognised brands on both domestic and foreign markets, thus increasing market shares in individual markets.

Mission

We wish to bring together the majority os Slovenian beverage producers and become one of the larger corporations of beverage producers in South East Europe. High quality of our products will ensure further satisfaction of the consumers and consolidate our corporate image.

The realisation of our mission and vision is based on our values, which are the cornerstone of the present and future development of both the Group and of the Company.

Values

Knowledge, enterprise, partnerhip, responsibility and appreciation.

It is on the basis of these values that we realise our objectives with wellconceived startegies in marketing and supply development, human resources organisation and management, technological development, financial resources management and a positive attitude towards the society in general.

GROUP OF AFFILIATES

PARENT COMPANY

PIVOVARNA LAŠKO GROUP

PIVOVARNA LAŠKO

Presentation Presentation

Production of beer; mineral, spring and natural waters; soft drinks and syrups for making beverages; other alcoholic beverages; newspaper and publishing; retail and wholesale services.

Production of beer and natural waters.

Composition

Pivovarna Laško, d. d.

Radenska, d. d. Radenci including subsidiary Pivovarna Union, d. d. Ljubljana including subsidiaries Jadranska pivovara, d. d. Split Vital Mestinje, d. o. o.

Delo, d. d. Ljubljana including subsidiary RA&LA, d. o. o. Sarajevo Firma Del, d. o. o. Laško

Pivovarna Laško, d. d.

Due to the financial insignificance of the companies RA&LA and Firma Del, they will not be dealt with in detail in further text.

Pivovarna Laško Group and Pivovarna Laško, d. d.

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Annual Report 2008 / Introduction

Business results of Pivovarna Laško Group Sales revenues and operating profit including depreciation (EBITDA) 450.0

330.1

in EUR mil.

360.0

360.0

277.2 270.0

Net sales revenues EBITDA

180.0

63.0

56.6

90.0

55.4

0.0 2006

2007

2008

In 2008 sales revenues increased by 9.1 % while operating profit including depreciation (EBITDA) decreased by 12.1 %.

Return on Assets (ROA) And Return on Equity (ROE) 25.0

20.3

in %

20.0

Return on Equity (ROE) Return on Assets (ROA)

15.0 10.0 5.0

9.9 6.7

4.8 1.4 0.5

0.0 2006

2007

2008

Pivovarna Laško Group and Pivovarna Laško, d. d.

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Annual Report 2008 / Introduction

Important information on Pivovarna Laško Group operations ( in EUR ) Net sales revenues Net profit Net cash flow1 EBIT EBITDA Long-term assets Short-term assets Equitiy Long-term liabilities Short-term liabilities 1

2006

2007

2008

277,225,835 19,204,782 50,879,315 24,893,845 56,568,378 493,122,644 185,765,170 303,411,848 177,330,275 198,145,691

330,062,922 61,290,469 92,113,003 32,204,011 63,026,545 595,776,889 200,614,291 322,929,993 206,291,365 267,169,822

360,028,307 3,855,582 33,572,006 25,700,173 55,416,597 636,058,719 187,235,021 295,977,383 260,201,204 267,115,153

2006

2007

2008

6.9 % 9.0 % 20.4 % 6.7 % 4.8 % 1.238

18.6 % 9.8 % 19.1 % 20.3 % 9.9 % 1.466

1.1 % 7.1 % 15.4 % 1.4 % 0.5 % 1.782

2006

2007

2008

1,844

1,734 *2,208

1,620 *2,090

2006

2007

2008

5,061,241 1,153,780 22.8

5,070,584 1,156,187 22.8

5,017,664 1,111,450 22.2

Net profit including depreciation

Performance indicators Net profit from sales revenues EBIT share in sales revenues EBITDA share in sales revenues ROE 2 ROA 3 Liabilities / equity 2 3

Net profit / average state of equity in the period Net profit / average state of assets in the period

Number fo employees Employees as at 31 December

*Including the employees of the company Delo, d. d.

Export share in the total sale of beverages Pivovarna Laško Group ( in hl ) Total sale of bev erages Export Share ( in % )

Pivovarna Laško Group and Pivovarna Laško, d. d.

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Annual Report 2008 / Introduction

Business results of Pivovarna Laško, d. d.

Sales revenues and operating profit including depreciation (EBITDA) 130.0

in EUR mil.

104.0

108.6

108.5

83.5

78.0

Net sales revenues EBITDA

52.0 26.0

27.0

25.5

21.5

0.0 2006

2007

2008

In 2008, sales revenues remained on the last year level while operating profit including depreciation (EBITDA) decreased by 20.5 %.

Return on Assets (ROA) And Return on Equity (ROE) 9.0

5.3 5.5

6.0

3.2 3.5 in %

3.0 0.0 2006

2007

2008

Return on Equity (ROE) Return on Assets (ROA)

-1.3

-3.0

-3.5 -6.0

Pivovarna Laško Group and Pivovarna Laško, d. d.

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Annual Report 2008 / Introduction

Net profit and market capitalisation 1,000

12.1

10.0

800

759

6.1

5.0

600

0.0 -5.0

420

352

2006

2007

2008

-6.1

-10.0

Net profit

400 200

Market capitalisation in EUR mil.

Net profit in EUR mil.

15.0

0

Market capitalization in the end of the period

Important information on Pivovarna Laško, d. d. operations ( in EUR ) Net sales revenues Net profit Net cash flow1 EBIT EBITDA Long-term assets Short-term assets Equitiy Long-term liabilities Short-term liabilities 1

2006

2007

2008

83,475,572 6,093,269 15,529,678 16,060,511 25,496,920 397,814,081 22,870,747 191,864,226 98,586,165 130,234,437

108,612,383 12,148,067 20,662,314 18,523,348 27,037,595 476,495,514 26,156,699 231,336,521 115,099,334 156,216,358

108,463,850 -6,094,056 2,532,032 12,867,447 21,493,535 433,172,048 29,510,000 175,571,742 161,706,940 125,403,366

2006

2007

2008

7.3 % 19.2 % 30.5 % 3.2 % 3.5 % 1.193

11.2 % 17.1 % 24.9 % 5.3 % 5.5 % 1.173

-5.62 % 11.9 % 19.8 % -3.5 % -1.3 % 1.635

Net profit including depreciation

Performance indicators Net profit or loss from sales revenues EBIT share in sales revenues EBITDA share in sales revenues ROE 2 ROA 3 Liabilities / equity 2 3

Net profit / average state of equity in the period Net profit / average state of assets in the period

Pivovarna Laško Group and Pivovarna Laško, d. d.

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Annual Report 2008 / Introduction

Number of employees 2006

2007

2008

339 355

331 337

324 328

2006

2007

2008

1,083,644 202,449 18.7

1,066,145 182,579 17.1

1,046,292 172,935 16.5

( in % )

2006

2007

2008

Pivovarna Laško Pivovana Union Imported beer Total

51.9 36.2 11.9 100.0

50.1 37.1 12.8 100.0

48.3 37.5 14.2 100.0

Employees as at 31 December Average number of employees

Export share in the total sale of beer Pivovarna Laško, d. d. ( in hl ) Beer sale Export Share ( in % )

Market share in the sale of beer Slovenian market

Data on PILR share Total number of issued shares Net profit / loss per share ( EUR ) Dividend per share ( EUR ) Market value of share on 31/12 ( EUR ) Avg. price per share / net profit or loss per share Bookkeeping value of sha re on 31/12 ( EUR )4 Avg. price per share / bookkeeping value of share Market capitalization on 31/12 ( EUR ) 4

2006

2007

2008

8,747,652 0.70 0.40 40.19

8,747,652 1.39 1.00 86.77

8,747,652 -0.70 / 47.98

57.41

62.42

-68.54

21.93

26.45

20.07

1.83 351,568,134

3.28 759,033,764

2.39 419,712,343

Equity on 31/12 / total number of shares

Pivovarna Laško Group and Pivovarna Laško, d. d.

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Annual Report 2008 / Introduction

Plans for 2009 2009 Total sale of beer, water, soft and other alcoholic beverages and the plans for the fotrhcoming year 2,500,000

in hectolitres

2,000,000

Juice, syrup Water Beer Alcohol / other

1,500,000 1,000,000 500,000 0 2007

2008

Plans 2009

( in hl )

2007

2008

Plans 2009

1,538,063 1,380,251 2,142,293 9,977 5,070,584

1,505,780 1,273,569 2,229,024 9,291 5,017,664

1,536,731 1,299,324 2,217,920 9,032 5,063,007

( in % )

2007

2008

Plans 2009

Juice, syrup Water Beer Alcohol / other Total

30.3 27.2 42.3 0.2 100.0

30.0 25.4 44.4 0.2 100.0

30.3 25.7 43.8 0.2 100.0

Juice, syrup Water Beer Alcohol / other Total

In the business year 2009, Pivovarna Laško Group expects a sale of 5.063 million hectolitres of all types of drink, which is 1 % increase compared to 2008.

Pivovarna Laško Group and Pivovarna Laško, d. d.

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Annual Report 2008 / Introduction

Presentation Presentation of Pivovarna Laško Group Pivovarna Laško Group brings together producers of beer mineral, spring, and natural waters, soft drinks, spirit and other alcoholic beverages and syrups for making beverages; it also includes newspaper and publishing businesses as well as retail and wholesale services.

PARENT COMPANY PIVOVARNA LAŠKO, LAŠKO, d. d., Slovenia

SUBSIDIARY COMPANIES RADENSKA, d. d. Radenci, Slovenia 92.56 % ownership PIVOVARNA UNION, d. d. Ljubljana, Slovenia 97.56 % ownership JADRANSKA PIVOVARA, d. d. Split, Croatia 99.10 % ownership VITAL MESTINJE, d. o. o., Slovenia 96.92 % business share DELO, d. d. Ljubljana, Slovenia 100 % ownership – of which Pivovarna Laško 80.831 %, Radenska 19.166 % in Firma Del 0.003 % RA&LA, d. o. o. Sarajevo, Bosnia and Herzegovina 100 % business share – of which Pivovarna Laško 69.23 %, Radenska 1.97 %, Pivovarna Union 11.48 % and Fructal 17.32 % FIRMA DEL, d. o. o. Laško, Slovenia (before TALIS, d. o. o. Maribor) 100 % business share Due to the financial insignificance of the companies RA&LA and Firma Del, they will not be dealt with in detail in further text.

ASSOCIATED COMPANY BIRRA PEJA, a. d. Peć, Peć Kosovo 39.55 % ownership

Pivovarna Laško Group and Pivovarna Laško, d. d.

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JADRANSKA PIVOVARA, d.d.

Split

PIVOVARNA UNIO N, d .d.

Ljubljana

Owne rship 97.56 %

FRUCT AL, d.d .

Ajd ovščina

Owne rship 91.76 %

RADENS KA, d.d .

Ra denc i

Ow nership 92.56 %

MIRAL RADENS KA, d.o.o.

Ra denc i

Bus. share 100 %

O wnership 79 .25 %

FRUKTAL MAK, a .d.

Skop je

Owne rship 89 .39 %

VEČER, d.d .

Maribor

17.32 %

Fructal Bus. share in RA&LA Delo subsidiary com pan y

Bus. share 100 %

EUROF RUIT SARAJEVO, d.o.o.

Sarajevo

Pivovarn a Union Bus. share in RA&LA 11.48 %

Firma Del O wnership in Delo 0 .0 03 %

Bus. share in RA&LA 1.97 %

Radenska

Bus. share in RA&LA 69.23 %

Pivovarna Laško

Business share 100 %

RA&LA, d .o.o.

Sa ra jevo

Subsidiary com pany

Bus. share 100 %

Radenska

O wnership in Delo 8 0.831 %

Pivova rna Laško

O wnership 100 %

DELO, d.d.

Ljub ljana

Subsidiary company

O wnership in Delo 19.166 %

Busin. share 96.92 %

VIT AL, d.o.o.

Mestinje

Subsidiary company

FRUCT AL ZAGREB, d.o.o.

Zagreb

O wnersh ip 99.10 %

Subsidiary company

Subsidiary company

PIVOVARNA LAŠKO, d. d.

Parent company

on 31/12/2008

PIVOVARNA LAŠKO GROUP

Subsidiary company

Pivovarna Laško Group and Pivovarna Laško, d. d.

Organisation chart of Pivovarna Laško Group as at 31/12/2008

Annual Report 2008 / Introduction

Talis, d.o.o. M aribor

Before:

Business share 100 %

F IRMA DEL, d.o.o.

Laško

Subsidiary company

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Annual Report 2008 / Introduction

Presentation of the company Pivovarna Laško, d. d.

COMPANY PROFILE PIVOVARNA LAŠKO, d. d., Trubarjeva 28, 3270 Laško was entered in the register of companies under the No 1/00171/00 at the District Court of Celje, Court order number: SRG 95/00673, of September 1995.

Abbreviated company name: PIVOVARNA LAŠKO, d. d.

Organisation type: public limited company Share capital: Number of shares issued:

EUR 36,503,305 8.747.652 no-par value shares

Share quotation: Ljubljanska borza, d. d., stock exchange listing of regular shares Share label: PILR Registration number: Tax number: Activity code:

5049318 90355580 11.050

Type of business and principal activity: BEER PRODUCTION Director (one-member Management Board): Boško Šrot Chairman of the Supervisory Board: Boris Završnik Transaction accounts: Account no 1: Account no 2: Account no 3: Telephone: Telefaks: E-mail:

Banka Celje Nova LB Nova KBM

06000-0001199122 02232-0020104463 04515-0000909883

+386 3 734 80 00 +386 3 573 18 17 info@pivo-lasko.si

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

Pivovarna Laško Group and Pivovarna Laško, d. d.

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Annual Report 2008 / Introduction

MILESTONES IN PIVOVARNA LAŠKO HISTORY 1825 The historical beginnings of Pivovarna Laško. Mead and gingerbread maker Franz Geyer converted the Valvasor Hospital into a brewery. The building where the first production took place still stands today.

1838 The brewery was bouth by Heinrich August Uhlich, who exported beer to India and Egypt.

1867 At the foot of hills Sv. Krištof and Šmihel, Anton Larisch established the biggest brewery in Lower Styria at the time.

1889 The brewery was bought by Simon Kukec, a patriotic Slovenian brewer from Žalec. He introduced new products – light and dark beer made of thermal spring water, as well as beers Ležak and Porter. The latter was subsequently renamed dark Laško beer (Temno laško pivo). He increasingly consolidated the Laško beer brand, under which the beer was sold to Egypt and Budapest.

1924 The brewery produced its final beer. A rival brewery Union from Ljubljana secretly purchased the majority of Laško shares and abandoned the production. The closing of the brewery was more than merely an economic blow to the inhabitants of Laško; the dream of brewery's reopening was first welcomed by innkeepers.

1929 Representatives of innkeepers' associations decided to build a new brewery in Laško as a public limited company.

1938 After many twists ad turns and fierce opposition from competitors, the shareholding Pivovarna Laško was opened and a new beer, branded Zlatorog, was introduced and soon became highly popular with beerlovers. Even the German occupying forces decided to allow the brand Laško pivo to continue existing due to its outstanding quality.

1944 During the bombardments of the railway bridge, the brewery was hit and destroyed. The production in the brewery continued immediately after WWII, in 1946, although the plant was formally re-established in 1947.

Throughout the post-war period, Pivovarna Laško remained a single and integrated company. A sharp increase in sales occured particularly after 1960: from 60,000 to 1,300,000 hl.

1990 After reorganising in accordance with the provisions of the Companies Act, the now public-owned company was entered in the court register with the Court order No Srg 23/90 of 31 May 1990.

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Annual Report 2008 / Introduction

1991 In accordance with the provisions of the Companies Act, the brewery was transformed into a public limited company under mixed joint ownership. On 30 September 1991, the share and public capital were evaluated and shares were distributed to shareholders.

1995 At its first General Meeting of 20 april 1995 Pivovarna Laško was transformed into a public limited company with known owners. The new company was entered into the Court register with the order No Srg 673/95 of 8 September 1995. It became a public limited company with more than 15,000 shareholders.

2000 Capital link-ups with Radenska, d. d. Radenci, Jadranska pivovara, d. d. Split and Vital, d. d. Mestinje were among the most significant landmarks in the company's history. A new business development strategy was under way.

2002 The company filed a successful public offer for the takeover of Pivovarna Union, d. d.

Ljubljana. It acquired 47.86 percent of all its shares.

2003 Capital investments continued. The company acquired 24.98 percent share in Delo, d. d.

Ljubljana, thus becoming its largest owner.

2004 In December, it acquired additional 27,011 shares (5.98 % of the total share) of the public lmiited company Union Ljubljana. Pivovarna Laško, d. d. became 53.85 percent owner of all Union shares.

2005 In February, Pivovarna Laško purchased the entire equity stake – 186,400 shares of Pivovarna Union, d. d. Ljubljana – from the Dutch company Interbrew Central European Holding B. V. Pivovarna Laško thus became 95.17 % majority owner of Union.

In May, the Slovenian Competition Protection Office issued its consent to the announced amalgamation of the companies Pivovarna Laško, d. d. and Pivovarna Union, d. d.

2006 106,950 newly issued shares of Poslovni sistem Mercator, d. d. Ljubljana, were transferred from the Slovenian Compensation Company, d. d. Ljubljana to Pivovarna Laško, d. d. After the transfer, Pivovarna Laško became the owner of 317,498 MELR shares or 8.34-percents of Mercator.

2007 A takeover bid was made for the purchase of shares of the company Delo, časopisno in založniško podjetje, d. d. Ljubljana. The buyers, Pivovarna Laško, d. d., Radenska, d. d. and Talis, d. o. o. owned a total of 628,044 shares, i.e. 94.09 % of the target company.

2008 A takeover bid was made for the purchase of shares of the company Pivovarna Laško, d. d. The buyers, Infond Holding, d. d. Maribor, Cestno podjetje Maribor, d. d., Fidina, d. d. Ljubljana and Koto, d. d. Ljubljana own a total of 4,818,151 shares, i.e. a 55.08 % share of the target company.

Pivovarna Laško Group and Pivovarna Laško, d. d.

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Annual Report 2008 / Introduction

An overview of most significant events in 2008 Takeover intention for the shares in Pivovarna Laško, d. d.

On 1 February 2008, the company Probanka, d. d. notified Pivovarna Laško, d. d., that it submitted a takeover bid in accordance with the Slovenian Takeovers Act (hereinafter called: ZPre-1) on behalf of the companies Infond Holding, finančna družba, d. d.

Maribor; Cestno podjetje Maribor, družba za gradnjo in vzdrževanje cest, d. d.; Fidina, finančne in nepremičninske storitve, d. d. Ljubljana; and Koto, proizvodno in trgovsko podjetje, d. d. Ljubljana (hereinafter called: the acquirers). By this bid, Probanka obliged itself to submit a takeover bid for the securities of the target company Pivovarna Laško, d. d.

In accordance with Article 25 of ZPre-1, Pivovarna Laško, d. d. notified the Securities Market Agency in writing on 4 February 2008 that were no discussions nor negotiations taking place between the management of Pivovarna Laško, d. d. and the acquirers regarding the takeover.

Publication of the takover bid for the shares in Pivovarna Laško, d. d.

On 12 February 2008, Pivovarna Laško, d. d. received from the above mentioned acquirers a takeover bid and a prospectus for the purchase of shares in the target company, Pivovarna Laško, d. d. The acquirers published their takeover bid on 12 February 2008 in Večer newspaper and on SEOnet. They offered EUR 88.00 per PILR share. The takeover bid was valid until noon of 11 March 2008. The bid did not envisage a success threshold to be a suspensive or resolutory condition for its effect.

Receipt of the decision of Securities Market Agency regarding the takeover bid On 17 March 2008, Pivovarna Laško, d. d. received a decision of Securities Market Agency, stating that the takeover bid of the acquirers was successful.

The takeover bid was received by 2,488 owners of target company shares owning a total of 1,158,073 PILR shares which equals 13.24% of total company shares. After the takeover, the acquirers became the owners of a total of 55.08% of Pivovarna Laško, d. d. shares.

Conclusion of a shareholders' agreement and the acquisition of shares On 8 and 9 April 2008, Pivovarna Laško, d. d. received a notice from the acquirers Infond Holding, d. d. Maribor; Fidina, d. d. Ljubljana; and CPM, d. d., stating that they now own a total of 4,818,151 shares of the target company Pivovarna Laško, d. d., representing 55.08 percent stake in the target company's share capital. The notice also stated that these companies signed a shareholders' agreement on 3 April 2008 on harmonised action in exercising management rights arising from the shares of the target company – Pivovarna Laško, d. d.

Pivovarna Laško Group and Pivovarna Laško, d. d.

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Annual Report 2008 / Introduction

On 30 December 2008, Pivovarna Laško, d. d. received notifications on significant changes in shares from Infond Holding, d. d. Maribor; Fidina, d. o. o. Ljubljana; and CPM, d. d. Maribor: on 24 december 2008, Infond Holding, d. d. acquired 1,358,343 shares of the issuer Pivovarna Laško, d. d. labelled PILR, thus increasing the number of shares from 3,273,373 i.e. 37.42% share in voting rights to 4,631,716 shares or 52.9481% share of the issuer's voting rights. On the same day, the company Fidina, d. o. o.

Ljubljana disposed 472,500 PILR shares, reducing its percentage of voting rights from 5.40 to zero.

On 24 December 2008, CPM, d. d. Maribor also disposed 885,343 PILR shares, reducing its number of shares from 1,105,000 i.e. 12.6320 percent share of voting rights to 219,657 shares or 2.5110 percent of the issuer's voting rights.

Decision of Competition Protection Office regarding alleged ownership o wnership concentration over the company Mercator, d. d.

On 11 February, Pivovarna Laško, d. d. received a decision of the Slovenian Competition Protection Office (hereinafter called UVK) of 6 February 2008, stating that UVK launched a procedure regarding the alleged ownership concentration over the company Mercator, d. d. In its Decision, UVK notes that joint control over the company Mercator, d. d. Ljubljana was established by the companies Infond Holding, d. d. Maribor; Istabenz, d. d. Koper; Pivovarna Laško, d. d.; Pivovarna Union, d. d. Ljubljana; and Radenska, d. d. Radenci and that this resulted in a concentration and that falls within the scope of Prevention of Restriction of Competition Act. UVK was therefore legally obliged to launch a procedure assessing the concentration and its compliance with competition rules.

In its additional decision of 6 February 2008, UVK prohibited all above mentioned companies to dispose or burden the shares of Mercator, d. d. Ljubljana without a prior consent of UVK, in order to preserve the effect of concentration. It also instructed all companies that they can exercise their voting rights at the General Meeting of Mercator, d. d. only on the basis of a prior consent of UVK and in accordance with the number of shares owned on the day of issuing this decision (6 February 2008): Infond Holding, d. d. was entitled to 941,301, Pivovarna Laško, d.d. to 317,498, Pivovarna Union, d. d. to 464,390, Radenska, d. d. to 96,952 and Istrabenz, d. d., to 376,797 shares. This also applied to all other acquisitions of the shares of Mercator, d. d.

Launching violation prosedure by Securities Market Agency and issuing decision on committed violation On 29 july 2008, Pivovarna Laško, d. d. received a notification to the legal entity and the person liable to deliver a statement on the facts or circuimstances of violation in response to the violation procedure launched on 25 July 2008 by the Securities Market Agency (hereinafter called ATVP). The procedure is based on suspicion of a violation of Article 71, paragraph 1, indent 1 and paragraph 4 of the same article of ZPre-1; Article 25 of Penal Code; and Article 8 of ZPre-1. It was launched against the legal entities Pivovarna Laško, d. d.; Pivovarna Union, d. d.; Radenska, d. d.; and Infond Holding, d. d. as well as against their respective persons liable: Boško Šrot, Dušan Zorko, Tomaž Pivovarna Laško Group and Pivovarna Laško, d. d.

18

Annual Report 2008 / Introduction

Blagotinšek and Matjaž Rutar. The alleged violation was that they all acted in concert as of 14 September 2007, in order to gain and consolidate control over the target company Poslovni sistem Mercator, d. d.

Legal entities and persons liable submitted written statements of objections against the allegations. ATVP disregarded them and issued a decision on 9 December 2008 on a violation of Article 71, paragraph 1, indent 1 and paragraph 4 of the same article of ZPre-1.

ATVP issued a penalty to the legal entities Pivovarna Laško, d. d., Pivovarna Union, d. d. and Infond Holding, d. d. Each company had to pay EUR 170,000, apart from Radenska, d. d. which was fined EUR 160,000 and persons liable Boško Šrot, Dušan Zorko and Matjaž Rutar had to pay EUR 5,000 each, while a penalty of EUR 4,000 was issued to Tomaž Blagotinšek.

Legal entities and persons liable have lodged a request for judicial protection against the decision of ATVP with the Local Court for minor offences. This request suspends the payment of penalty.

Decision of ATVP on prohibiting the exercise of voting rights arising from the shares of Mercator, d. d.

On 27 October 2008, Pivovarna Laško, d. d. received a decision of ATVP establishing that on the day of issuing this decision, the companies Pivovarna Laško, d. d., Pivovarna Union, d. d., Radenska, d. d. and Infond Holding, d. d. acted in concert to reach the takeover threshold in the target company Poslovni sistem Mercator, d. d. Ljubljana, which resulted in them owing a total of 48.339 percent share of the issuer's shares with voting rights.

By this decision, the above mentioned companies were prohibited to exercise their voting rights until they – or one of them on behalf of all – submit a takeover bid, or until they dispose of shares exceeding the 25 percent takeover threshold. The companies exceeded the takeover threshold on 14 September 2007, and there is an overwhelming suspicion that a joint intention existed to gain and consolidate control over the target company Mercator, d. d.

All companies from Pivovarna Laško Group as well as Infond Holding, d. d. furnished their arguments against such allegations of ATVP in their statements, which were disregarded by ATVP. This was the reason why Pivovarna Laško, d. d., Pivovarna Union, d. d., Radenska, d. d. and Infond Holding, d. d. lodged an appeal against this decision with the Supreme Court of the Republic of Slovenia.

Intended sale of Mercator d. d. shares The companies from Pivovarna Laško Group and Infond Holding, d. d. announced on 4 November 2008 that they intend to sell a 48.339 percent share in the company Mercator, d. d. on a public tender. The reasons for the sale were business-related, as this is the best way to achieve best possible bargain with the interested buyers.

Pivovarna Laško Group and Pivovarna Laško, d. d.

19

Annual Report 2008 / Introduction

Public tender for the purchase of Mercator d. d. shares The companies Pivovarna Laško, d. d., Pivovarna Union, d. d. Ljubljana, Radenska, d. d.

Radenci and Infond Holding, d. d. Ljubljana published a call for tender for the purchase of 1,820,141 shares or 48.339 percent share of the company Poslovni sistem Mercator, d. d. Ljubljana. The call was published on Seonet on 8 December 2008 and in Delo newspaper on 6 December 2008. It consisted of a description of sale, which will take place in three stages. The sale is still under way.

Higher Court ruling regarding the shares of Mercator d. d.

On 5 January 2009, Pivovarna Laško, d. d. received via its authorised lawyer the ruling of the Higher Court of Koper dated 11 December 2008 in the case of civil action of the plaintiff Zoran Janković against the defendants Istrabenz, d. d. and Pivovarna Laško, d. d. regarding the implementation of the contract, by which the Higher Court dismissed the appeal of the plaintiff Zoran Janković and confirmed the contested judgment of the first instance court.

In its ruling of 26 March 2008, the court of first instance dismissed the primary claim that defendants must each transfer to the plaintiff a third of their shares of the company Poslovni sistem Mercator, d. d.: 285,093 Istrabenz shares and 105,832 Pivovarna Laško, d. d. shares at an average purchase price of EUR 158.57 per share. The court also dismissed both subreceivables that the defendants must submit an expression of will or an order for the transfer of shares and that this ruling should replace that statement or order. It is not possible to appeal against the decision of a Higher Court. The plaintiff filed a request for an extraordinary judicial review – revision – against the ruling.

Events after after the conclusion of the accounting period Making available of shares of Mercator, d. d.

On 26 January 2009, Pivovarna Laško, d. d. received a decision from the Competition Protection Office (hereinafter called UVK) authorising the realisation of the transfer of ownership and the registration of MELR shares of the company Mercator, d. d. Ljubljana when so instructed by the companies Infond Holding, d. d., Pivovarna Laško, d. d., Pivovarna Union, d. d. and Radenska, d. d. (as well as Istrabenz, d. d.) or by a third party operating on behalf of any of the above mentioned companies, if this transfer of ownership and registration of MELR shares are required for the realisation of securities transactions, unless both the purchaser and the vendor know or should know that the transaction was made contrarily to the first paragraph of Article 44 of Prevention of Restriction of Competition Act. On 27 January 2009 Pivovarna Laško also received a notice from KDD – Central Securities Clearing Corporation Ljubljana, that on the basis of the above mentioned decision of UVK, the corporation lifted the ban on dealing with the securities in question.

Pivovarna Laško Group and Pivovarna Laško, d. d.

20

Annual Report 2008 / Introduction

Appointing Audit Committee At its session of 2 March 2009, the Supervisory Board of Pivovarna Laško, d. d. appointed the Audit Committee consisting of Simon Zdolšek – Chairman, plus two members, Bojan Košak and Marko Koleša.

Swap of PILH shares for PILR shares After the conclusion of the accounting period, 29,509 PILH shares of Pivovarna Laško d. d., were erased form the central register of KDD on 12 March 2009 and were replaced by the same number of regular no-par value PILR shares. After the registration, the central register of KDD recorded a total of 8,611,481 regular no-par value PILR shares and 136,171 PILH shares.

Operations with affiliated companies of Pivovarna Laško, d. d.

On 31 March 2009, Pivovarna Laško, d. d. had short-term loan receivables amounting to EUR 3.1 million, EUR 2.5 million of which were receivables towards affiliated companies.

On 31 March 2009, Pivovarna Laško, d. d. had EUR 164.9 million of long-term bank loans and EUR 81.9 million of short-term bank loans. In affiliated companies, Pivovarna Laško, d. d. had taken EUR 24.7 million of short-term loans.

In the first three months of 2009, Pivovarna Laško, d. d. approved a registration of a mortgage on the assets of Pivovarna Laško, d. d. to insure short-term loans amounting to EUR 15.4 million and pledged the shares of Electro Gorenjska to secure a short-term loan of EUR 5.5 million. With its receivables, the company used its insured short-term loans of EUR 3 million.

Changes in the management of Radenska, d. d. Radenci At its session of 28 January 2009, the Supervisory Board of Radenska, d. d. endorsed two decisions: on 31 January 2009, it reached a mutual agreement on the termination of the term of the Director Tomaž Bagotinšek, and on 1 February 2009 it appointed Zvonko Murgelj as the new Director, for a five-year term.

Upon the proposal of the procurator, Olga Smej, the Supervisory Board cancelled the procuration of 31 January 2009 and, on 1 February 2009, granted the procuration to Mojca Jazbinšek Volk. The new procuration shal remain in force until revoked.

Other major events in Radenska, d. d. Radenci After drawing up the balance sheet, the company Radenska, d. d. Radenci expects a future potential liability related to the purchase of the real estate »obrat Petanjci« from Management and Consultancy Enterprise (DSU), in accordance with the denationalisation procedure. This ends the procedure from the point of denationalisation beneficiary, but the one between Radenska, d. d. and the enterprise DSU is still pending. In accordance with the decision of the Ministry of the Economy of 6 August 2004, DSU became an owner of ¼ of the above mentioned real estate.

Pivovarna Laško Group and Pivovarna Laško, d. d.

21

Annual Report 2008 / Introduction

Radenska, d. d. has not yet received a bid from DSU in writing, but on the basis of DSU’s telephone statement, Radenska should buy the entire excluded property, which is registered in Radenska’s books of account as off-balance property, but the company does not agree with that solution. Given the diverging views of Radenska and DSU, Radenska shall take its final position on the possible purchase after all legal issues have been agreed. In future procedures, Radenska, d. d. will provide proofs of investments it has so far made in the renovation of buildings and the entire infrastructure of the property »obrat Petanjci«, which makes it potentially possible to disclose revenues in the balance sheet of Radenska, d. d.

Changes in the management of Jadranska pivovara, d. d. Split On 31 March 2009, the term of the company's Director Marijan Kos ended in mutual agreement, and on 1 April 2009, Tomaž Udrih was appointed as new Director, starting a new term.

Other major events in Jadranska pivovara, d. d.

Pivovarna Laško, d. d. is discussing and negotiating the sale of the entire share of Jadranska pivovara, d. d. Split with several potential buyers. One of the conditions for the purchase is a commitment that the potential buyer will take over all financial guarantees given by Pivovarna Laško, d. d. for the bank loans taken by Jadranska pivovara, d. d. from Splitska banka and Raiffeisen bank.

On 22 April 2009, Jadranska pivovara, d. d. presented a total of EUR 6,583,704 of longterm loans, of which EUR 1,445,926 will mature in 2009, EUR 2,270,926 in 2010, EUR 1,645,926 in 2011, EUR 1,020,926 in 2012 and EUR 200,000 in 2013. At the same time, the company has a total of HRK 7 million or EUR 938,715 of short-term loans, a half of which, HRK 3.5 million, matures on 31 August 2009, and the other half (HRK 3.5 million) on 31 October 2009.

Operations of the companies affiliated to Pivovarna Laško Group On 31 March 2009, Pivovarna Laško Group receivables from long-term loans granted to affiliated companies totalled EUR 10,500,000 while short-term loans equalled EUR 73,450,000.

The debtor companies will repay the loans from generated cash flows of their activities and/or by selling portfolio investments. The Group estimates that the loans will be repaid, but that the repayment of a part of loans depends on the success in the sale of investments. Since the loans were granted to associated companies which have insured their short-term bank loans with their property and portfolio investments or to the clients who are in any way linked to these associated companies, the repayment of loans taken by Laško Group associates will also depend on the agreement between them and their creditor banks.

Pivovarna Laško Group and Pivovarna Laško, d. d.

22

Annual Report 2008 / Introduction

A word from the manager Dear shareholders!

A particular year is behind us. Despite a downturn in the markets and a slowdown in the economy and consumption, we managed to achieve most of our objectives. Pivovarna Laško Group has further enhanced its market position. It provides its customers with a broad range of 30 leading brands which in 2008 grew even stronger in the market of beer, waters, juices and other soft drinks. Our goals remain ambitious in 2009, both in terms of the sale of beverages and optimum and efficient brand management.

Despite stiff competition last year, we maintained a stable market position both nationally and internationally. In 2008, Pivovarna Laško Group sold 5.017 million of hectolitres of beverages, more than 22 percent of which went to export. This generated EUR 360 million of net sales revenue, which is 9 percent more than in 2007. A 16 percent increase in the cost of material and services was reflected in a 10 percent rise of operating expenditures, which amounted to EUR 340 million. Pivovarna Laško Group made an operating profit of EUR 25.7 million, which is less than in 2007, and EUR 55.4 million of cash flow from operations (EBITDA). Net profit totalled EUR 3.8 million. At the end of 2008, Pivovarna Laško Group employed 1,620 people. The average production per employee increased by 1.5 percent compared to the previous year and now amounts to 3,096 hl per employee.

The year 2008 was also marked by a reshaping of major brands of Pivovarna Laško Group. The renovation of the brands Laško and Union was successful and well accepted by the consumers. Both brands continue centuries-long tradition of brewing and at the same time address new generations of users. We maintained also the pole position in the area of waters, flavoured waters, juices and soft drinks. The group offers 30 different brands with high development potential both in national and international markets. By focusing on key markets and users, we will continue to maintain leading positions in the market segments of our brands.

In 2009, we will work even harder on developing our basic activity: the production of beverages. We are expecting a one percent increase in the sale of beverages, EUR 413 million of sales revenues, EUR 38.7 million of operating profit and EUR 69 million of cash flow from operations (EBITDA). Despite unfavourable economic situation, we remain confident that we will do even better this year. This is also thanks to you, our shareholders, who trust us and support us in realising our long-term strategy. We wish to remain an independent beverage producer and become one of the biggest players, a company which manages its brands in a responsible manner and generates optimum yields. And with the support of our devoted shareholders, we will certainly succeed.

Boško Šrot

direktor družbe Pivovarna Laško Group and Pivovarna Laško, d. d.

23

Annual Report 2008 / Accounting Report – Pivovarna Laško, d. d.

ACCOUNTING REPORT Audited financial statements of Pivovarna ivovarna Laško, aško , d. d. for the year 2008 2008, by IFRS BALANCE SHEET OF PIVOVARNA PIVOVARNA LAŠKO, D. D. on 31 December 2008

( in EUR )

Expl. note

2008

2007

ASSETS Non-current assets Intangible fixed assets Property, plant and equipment Investment properties Non-current investments in subsidiaries Available-for-sale financial assets Investments in associated companies Long-term loans Long-term operating receivables Long-term deferred tax receivables

1 2 3 4.A 4.B 4.C 5 6 7

433,172,048 1,141,449 62,769,267 5,356,236 295,906,766 61,563,643 46,754 785,228 5,602,705

476,495,514 358,697 46,230,773 4,142,220 293,488,678 44,807 124,613,112 7,617,227 -

Current assets Non-current assets held for sale Inventories Short-term operating receivables Short-term receivables for overpaid income tax Short-term loans Cash in banks, cheques and cash in hand

8 9 10.A 10.B 11 12

29,506,918 1,083,307 9,772,082 14,543,104 818,322 3,200,000 90,103

26,151,067 1,070,307 9,332,754 12,730,296 2,848,767 168,943

3,082

5,632

29,510,000

26,156,699

462,682,048

502,652,213

Deferred costs and accrued revenues Total current assets TOTAL ASSETS

Pivovarna Laško Group and Pivovarna Laško, d. d.

13

24

Annual Report 2008 / Accounting Report – Pivovarna Laško, d. d.

BALANCE SHEET OF PIVOVARNA LAŠKO, D. D. on 31 December 2008 (continuation)

( in EUR )

2008

2007

175,571,742 175,571,742 36,503,305 102,377,721 34,551,368 3,833,373 (1,694,025)

231,336,521 231,336,521 36,503,305 102,377,721 34,964,569 44,348,510 994,349 12,148,067

287,110,306

271,315,692

1,443,562 1,377,905 65,657

1,320,469 1,276,661 43,808

16 16.A 7,16.B

160,263,378 160,263,378 -

113,778,865 106,571,471 7,207,394

17 17.A 17.B 17.C

124,778,033 15,553,639 109,224,394

155,595,200 12,882,647 892,716 141,819,837

625,333

621,158

Total current liabilities

125,403,366

156,216,358

TOTAL LIABILITIES TO ASSET RESOURCES

462,682,048

502,652,213

EQUITY Majority capital Share capital Capital reserves Profit reserves Revaluation surplus Net profit and loss from previou s years Net profit and loss

Expl. note

14

LIABILITIES Non-current reservations Non-current employee liabilities Non-current reservations Non-current liabilities Non-current financial liabilities Non-current deferred tax liabilities Current liabilities Current operating liabilities Current tax payment liabilities Current financial liabilities Accrued costs and deferred revenues

15 15.A 15.B

18

Explanations and policies of pages 30 to 72 are the integral part of the financial statement.

Pivovarna Laško Group and Pivovarna Laško, d. d.

25

Annual Report 2008 / Accounting Report – Pivovarna Laško, d. d.

PROFIT AND LOSS STATEMENT OF PIVOVARNA LAŠKO, D. D. for period between 1 January – 31 December 2008

( in EUR )

2008

2007

19 19 19 19 19

108,463,850 12,574 3,625,157 (78,831,896) (9,929,922)

108,612,383 481,145 3,786,150 (73,422,450) (10,154,644)

19 19 19 19

(8,626,088) (144,882) (385,309) (1,316,037) 12,867,447

(8,514,247) (182,823) (720,825) (1,361,341) 18,523,348

Financial revenues Financial expenditures PROFIT BEFORE TAXATION

20 20

8,467,539 (30,110,355) (8,775,369)

11,440,527 (15,513,034) 14,450,841

Tax NET PROFIT / LOSS OF ACCOUNTIN G PERIOD

21

2,681,313 (6,094,056)

(2,302,774) 12,148,067

25 25

(0.6967) (0.6967)

1.3887 1.3887

Net sales revenues Changes in inventories of products and work in progress Other operating revenues Costs of goods, material and services Employee benefit expenses Amortization and depreciation of intangible and tangible fixed assets Non-current reservations Write-downs of value Other operating revenues Operating profit

Profit / loss per majority owners' share: Net profit / loss per share Adjusted net profit / loss per share

Expl. note

Explanations and policies of pages 30 to 72 are the integral part of the financial statement.

Pivovarna Laško Group and Pivovarna Laško, d. d.

26

-

-

Net pro fit of the year

Total changes in 2008

Transfer of net profit of the current year Transfer of net profit of the past year Purchase / sale o f treasury shares Payment of dividends

102 ,377,721

-

-

25,6 06,794

-

-

-

-

-

-

-

25,6 06,794

reserves

Legal

246,617

72,320

72,320 -

-

-

-

-

-

174,297

treasury shares

Reserves for

(246,617 )

(72,320 )

(72,320 ) -

-

-

-

-

-

(174,297 )

shares

Treasury

8,944,574

(413,201)

(413,201) -

Pivovarna Laško Group and Pivovarna Laško, d. d.

-

-

-

-

-

9,357,775

reserves

Other profit

Explanations and policies of pages 30 to 72 are the integral part of the financial statement.

36,503,305

-

-

Changes disclosed directly in equity

FINAL BALANCE as at 31st December 2008

-

-

-

102 ,377,721

reserves

-

36,503,305

capital

Capital

Fair value: Available-for-sale financial assets Other increases/decreases of capital compo nents

INITIAL BALANCE as at 1st January 2008 in line with IFRS

( in EUR )

Sh are

MOVEMENT OF THE CAPITAL STATEMENT OF PIVOVARNA LAŠKO, D. D. for period between 1 January – 31 December 2008

Annual Report 2008 / Accounting Report – Pivovarna Laško, d. d.

34,551,368

(413,201)

(413,201) -

-

-

-

-

-

34,964,569

reserves

Total profit

Net

-

(994,34 9)

1 2,148,06 7 (4 ,400,03 2) (8 ,742,38 4)

-

-

-

-

-

994,34 9

previous years

profit from

Net

(1,694,025)

(7,748,035)

(12,148,067) 4,400,032 -

(6,094,057)

(6,094,057)

3,833,373

-

-

(40,515,137)

-

(40,515,137)

4,370,044

-

(44,885,181)

44,348,510

surplus

Revaluation

-

12,148,067

profit

TOTAL

27

17 5,571,7 42

(9,15 5,585)

(41 3,201) (8,74 2,384)

(46,60 9,194)

(6,09 4,057)

(40,51 5,137)

4,370,0 44

(44,88 5,181)

23 1,336,5 21

CAPITAL

-

Transfer of net profit of the past year

Purchase/sale of treasury shares Payment of dividends

102 ,377,721

-

-

-

25,6 06,794

-

-

-

-

-

-

-

25,6 06,794

reserves

Legal

174,297

168,709

168,709 -

-

-

-

-

-

5,588

treasury shares

Reserves for

(174,297 )

(168,709 )

(168,709 ) -

-

-

-

-

-

(5,588 )

shares

Treasury

9,357,775

(233,942)

(233,942) -

Pivovarna Laško Group and Pivovarna Laško, d. d.

-

-

-

-

-

9,591,717

reserves

Other profit

Explanations and policies of pages 30 to 72 are the integral part of the financial statement.

36,503,305

-

-

Total changes in 2007

FINAL BALANCE as at 31st December 2007

-

-

Net profit of the year

-

-

Changes disclosed directly in equity

-

102 ,377,721

reserves

-

36,503,305

capital

Capital

Fair value: Available-for-sale financial assets

INITIAL BALANCE as at 1st January 2007

( in EUR )

Sh are

MOVEMENT OF THE CAPITAL STATEMENT OF PIVOVARNA LAŠKO, D. D. for period between 1 January – 31 December 2007

Annual Report 2008 / Accounting Report – Pivovarna Laško, d. d.

34,964,569

(233,942)

(233,942) -

-

-

-

-

-

35,198,511

reserves

Total profit

Net

994,34 9

2,594,49 9

(3 ,498,77 0)

6,093,26 9

-

-

-

-

(1 ,600,15 0)

previous years

profit from

Net

12,148,067

(6,093,269)

-

(6,093,269)

12,148,067

12,148,067

-

6,093,269

profit

44,348,510

-

-

-

31,056,939

-

31,056,939

31,056,939

13,291,571

surplus

Revaluation

TOTAL

28

23 1,336,5 21

(3,73 2,712)

(23 3,942) (3,49 8,770)

-

4 3,205,0 06

1 2,148,0 67

3 1,056,9 39

3 1,056,9 39

19 1,864,2 27

CAPITAL

Annual Report 2008 / Accounting Report – Pivovarna Laško, d. d.

CASH FLOW STATEMENT OF PIVOVARNA PIVOVARNA LAŠKO, D. D. for period between 1 January – 31 December 2008

( in EUR ) CASH FLOWS FROM OPERATING ACTIVITIES Cash generated from operations

Expl. note

23

Net cash generated from operating activities CASH FLOWS FROM INVES TING ACTIVITIES Acquisition of subsidiaries - net costs Purchase of property, plant and equipment Purchase of intangible assets Purchase/sale of available for sale financial assets Interest received Dividends

29 2 1 4.11 20 20

Net cash generated/used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Interest paid Proceeds of treasury shares Proceeds from borrowings Repayments of borrowings Dividends paid to Company's sherholders

20 14 18.19 18.19 14

Net cash used/generated in financing activities NET DECREASE / INCREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at the begining of the year Cash and cash equivalents at the end of the year

12 12

2008

2007

18,469,130

26,957,853

18,469,130

26,957,853

(19,784,995) (849,611) (2,332,071) 223,475 8,236,604

(50,504,373) (12,864,067) (16,768) 9,091,066 217,773 10,962,758

(14,506,598)

(43,113,611)

(15,220,507) (413,202) 110,040,183 (89,705,462) (8,742,384)

(11,820,689) (233,941) 165,933,867 (134,196,189) (3,498,770)

(4,041,372)

16,184,278

(78,840)

28,520

168,943 90,103

140,423 168,943

Explanations and policies of pages 30 to 72 are the integral part of the financial statement.

Pivovarna Laško Group and Pivovarna Laško, d. d.

29

Annual Report 2008 / Accounting Report – Pivovarna Laško, d. d.

COVERING BALANCE SHEET LOSSES OF THE FISCAL YEAR The accumulated loss for 2008 is 1.694.025 EUR, which includes 6.094.057 EUR of net loss for the fiscal year and 4.400.032 EUR of profit brought over from previous years. ( in EUR )

31.12.2008

31.12.2007

Net profit / loss of accounting period

(6,094,057)

12,148,067

Remaining net profit / loss after statutary distribution

(6,094,057)

12,148,067

Remaining net profit / loss of accounting period

(6,094,057)

12,148,067

4,400,032

994,349

(1,694,025)

13,142,416

Accumulated profit from previous years st

BALANCE - S HEET PROFIT / LOSS 31 December

Management proposes to the supervisory board to distribute the accumulated profit from 2008 remain nondistributed.

Pivovarna Laško Group and Pivovarna Laško, d. d.

30

Annual Report 2008 / Accounting Report – Pivovarna Laško, d. d.

EXPLANATORY NOTES TO NONNON-CONSOLIDATED FINANCIAL STATEMENTS GENERAL INFORMATION Laško Brewery, d. d. is a public limited company, inscribed at the District Court in Celje under number Srg 95/00673 under No. reg. contribution 1/00171/00. It belongs to large companies and is obligated to have an annual audit. Main activity of the company is production and distribution of beer, malt, water, and it also performs retail and wholesale trade.

Laško Brewery, d. d. is a parent company of Pivovarna Laško Group with headquarters in Slovenia: Trubarjeva ulica 28, 3270 Laško, Slovenija and subsidiary company of Infond Holding, d. d. Maribor, which owned 52.97 % shares of Pivovarna Laško, d. d.

Director of Pivovarna Laško, d. d. Boško Šrot together with his wife is owner of company Atka Prima, d. o. o., which has 100 % ownership in company Kolonel, d. d.

Maribor. It is owner of company Center naložbe, d. d. Maribor of 78,198 %, the latter is owner 71,006 % shares of company Infond Holding, d. d. Maribor.

Ordinary shares of the Company are listed at the Ljubljana Stock Exchange under »PILR« tag. Share capital of the Company is worth 36.503.304,96 EUR, which represents 8.747.652 freely transferable nominal shares. There are no limitations to paying the dividend and other capital payments.

ACCOUNTING POLICIES In the year 2008 the same accounting policies were applied as in the preceding years, except in tangible fixed assets (immovable property) and investment property. Tangible fixed assets had been valued in the past according to the cost model, whereas in 2008 the revaluation model was used. The value of immovable property was adjusted to fair value. The effect of revaluation amounted to EUR 5,462,555. Also in 2008, the model for valuation of investment property changed. In the past, the cost model had been used, whereas in 2008 the fair value model was applied. An appraisal was carried out along with revaluation adjustment to fair value. The effect of revaluation of investment property in 2008 amounted to EUR 1,038,297.

Change in accounting policies is due to the requirements of IFRS 3, provides the financial reporting of the company, if it is involved in business mergers. In particular, it specifies that all business combinations should be accounted for by applying the purchase method. Therefore, the acquirer recognizes the acquiree’s identifiable assets, liabilities and contingent liabilities at their fair values at the acquisition date, and also recognizes goodwill, which is subsequently tested for impairment rather than amortised.

Main accounting policies used for preparations of this financial statement are listed below: 1. Statement on Compliance with IFRS Financial statement for Laško Brewery, d. d. has been prepared in compliance with the International Financial Reporting Standard (IFRS), as they were approved by the EU. All International Financial Reporting Standards, which have been issued by IASB and were Pivovarna Laško Group and Pivovarna Laško, d. d.

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valid during the writing of these financial statements, were approved by the EU in an approval procedure initiated by the European Commission, with the exception of International Financial Reporting Standard MRS 39 »Financial instruments: Acknowledging and measuring«. On the basis of a recommendation from the Accounting Regulatory Committee, the Commission approved Acts 2083/2004 and 1864/2005, which require the application of MRS 39, with the exception of compliance with certain provisions on key roles portfolio risks, which is valid for the listed companies from 1 January 2005.

First time Laško Brewery, d.d., as the controlling company of the Laško Brewery Group, d. d., had to prepare consolidated financial statements according to the International Financial Reporting Standard (IFRS) was fiscal year 2005. Those consolidated financial statement were the first financial statements of the Group companies prepared according to IFRS, which were accepted upon joining the EU and were valid when consolidated financial statements were being prepared and are compliant with IFRS 1 – The first use of International Financial Recording Standards. The date of the transition was 1 January 2004, the day when all companies issued a balance sheet.

Laško Brewery, d. d. Company has prepared individual financial statement for all previous years and for 2005 in compliance with accounting and reporting requirements of the Slovenian Accounting Standards (SRS). The first time the Company prepared individual financial statements in compliance with IFRS was for 2006. Date of transition was 1 January 2005.

2. Basis for Preparation Preparation of the Financial Statements The financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the European Union, which include the standards and interpretations issued by the IASB and SIC. The main accounting policies used in the preparation of these consolidated financial statements are indicated in the continuation.

The consolidated financial statements have been compiled in compliance with the International Financial Reporting Standards (IFRS). a) Standards and Interpretations effective in the current period The following amendments to the existing standards issued by the International Accounting Standards Board and interpretations issued by the International Financial Reporting Interpretations Committee are effective for the current period:: Amendments to IAS 39 „Financial Instruments: Recognition and Measurement” and IFRS 7 „Financial Instruments: Disclosures” Reclassification of financial assets (effective on or after 1 July 2008).

The adoption of these amendments to the existing standards and interpretations has not led to any changes in the Company’s accounting policies.

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b) Standards and Interpretations in issue not yet adopted At the date of authorisation of these financial statements the following standards, revisions and interpretations were in issue but not yet effective: IFRS 8 “Operating Segments” (effective for annual periods beginning on or after 1 January 2009).

IFRS 1 (revised) “First“First -time Adoption of IFRS” (effective for annual periods beginning on or after 1 January 2009).

Amendments to IFRS 1 “First“First -time Adoption of IFRS” and IAS 27 “Consolidated and Separate Financial Statements” – Cost of investment in a subsidiary, jointly-controlled entity or associate (effective for annual periods beginning on or after 1 January 2009).

Amendments to various standards and interpretations resulting from the Annual quality improvement project of IFRS (IAS 1, IFRS 5, IAS 8, IAS 10, IAS 16, IAS 19, IAS 20, IAS 23, IAS 27, IAS 28, IAS 29, 29 , IAS 31, IAS 34, IAS 36, IAS 38, IAS 39, IAS 40, IAS 41) primarily with a view to removing inconsistencies and clarifying wording (most amendments are to be applied for annual periods beginning on or after 1 January 2009).

Amendments to IAS 32 “Financial Instruments: Presentation” and IAS 1 “Presentation of Financial Statements” – Puttable financial instruments and obligations arising on liquidation (effective for annual periods beginning on or after 1 January 2009).

IAS 1 (revised) “Presentation of Financial Financial Statements” – A revised presentation (effective for annual periods beginning on or after 1 January 2009).

IAS 23 (revised) “Borrowing Costs” (effective for annual periods beginning on or after 1 January 2009).

Amendments to IFRS 2 “Share“Share-based Payment” Payment” – Vesting conditions and cancellations (effective for annual periods beginning on or after 1 January 2009).

IFRIC 11 “IFRS 2 – Group and Treusary Share Transactkions” (effective for annual periods beginning on or after 1 March 2008.

IFRIC 12 “Service “Service Concession Arrangements” adopted by the EU on 25. March 2009 (effective for anuall periods beginning on or after 30 March 2009).

IFRIC 13 “Customer Loyalty Programmes” (effective for annual periods beginning on or after 1 July 2008).

IFRIC 14 “IAS 19 – The limit on a Defined Benefit Assets, Minimum Funding Requirements and their Interaction” (effective for annual periods beginning on or after 1 January 2009).

The adoption of these amendments to the existing standards and interpretations has not led to any changes in the Company’s accounting policies.

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c) Standards and Interpretations issued by IASB but not yet adopted by the EU At present, IFRS as adopted by the EU do not significantly differ from regulations adopted by the International Accounting Standards Board (IASB) except from the following standards, amendments to the existing standards and interpretations, which were not endorsed for use as at 3 March 2009: IFRS 3 (revised) “Business Combinations” (effective for annual periods beginning on or after 1 July 2009).

IFRS 1 (revised) “First“First -time Adoption of IFRS” (effective for annual periods beginning on or after 1 January 2009).

Amendments to IFRS 7 ““Financial Instruments Disclosures” – Improving disclosures about financial instruments (effective for annual periods beginning on or after 1 January 2009).

Amendments to IAS 27 “Consolidated and Separate Financial Statements” (effective for annual periods beginning on or after 1 July 2009).

Amendments to IAS 39 “Financial Instruments: Recognition and Measurement” - Eligible hedged items (effective for annual periods beginning on or after 1 July 2009).

Amendments to IAS 39 „Financial „ Financial Instruments: Recognition and Measurement” and IFRS 7 „Financial Instruments: Disclosures” Reclassification of financial assets, effective date and transition (effective on or after 1 July 2008).

Amendments to IFRIC 9 “Reassessment to Embedded Derivates” and IAS 39 “Financial Instruments; Recognition and Measurement” – Embedded Derivates (effective for annual periods ending on or after 30 June 2009).

IFRIC 15 “Agreements for the Construction of Real Estate” (effective for annual periods beginning on or after 1 January 2009).

IFRIC 16 “Hedges of a Net Investment in a Foreign Operation” (effective for annual periods beginning on or after 1 October 2008).

IFRIC 17 “Distributions of NonNon - Cash Assets to Owners” (effective for annual periods beginning on or after 1 July 2009).

IFRIC 18 “Transfers of Assets from Customers” (effective for transfer of assets from customers received on or after 1 July 2009).

The Group anticipates that the adoption of these standards, amendments to the existing standards and interpretations will have no material impact on the financial statements of the Company in the period of initial application.

At the same time, hedge accounting regarding the portfolio of financial assets and liabilities, whose principles have not been adopted by the EU, is still unregulated.

According to the entity’s estimates, application of hedge accounting for the portfolio of financial assets or liabilities pursuant to IAS 39: “Financial Instruments: Recognition and Measurement”, would not significantly impact the financial statements, if applied as at the balance sheet date.

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3. Acknowledgement of Revenues Revenues are acknowledged on the basis of sale of products, services and goods and acceptance of these goods by the buyers (without VAT and excise duty), anticipated receivables, rebates and discounts. Revenues from sale are acknowledged when the important risks and benefits of the ownership of the goods are trasferred from the sales person to the buyer.

Other realized revenues are acknowledged on the following basis: Revenues from interest – they are acknowledged when they are created, unless there is doubt of extraction, when the amount is written off for a supplementary value. Revenues from interests are then acknowledged on the basis of the interest rate, which serves for discounting any future money flow.

Revenue from dividend – when the right of the Company to receive payment

from dividend is created.

4. Investments into Affiliated Companies 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.

An investment into an affiliated company is valued on the original historical purchase price. Revenues from profit sharing are acknowledged as a revenue from financing, when they are paid or when the General Meeting approves a preposition on profit sharing and payment of the divided. The investments are weakened when the supplementary values of the investment are smaller that its accounting value. Loss due to the weakening is acknowledged immediately in the profit and loss statement.

5. Investments into Associated Companies Associated companies are companies where the Company has between 20 % to 50 % of the voting rights and where it has significant influence on operations, but it does not control them. Financial investments are evaluated according to the purchase price.

6 . Reporting Currency a) Functional and presentational currency Figures presented in the financial statements of the Company are nominated in Euros (EUR), which is, at the same time, also the functional and presentational currency of the company. b) Transactions and situations Foreign exchange operations are calculated into the presentational currency based of the rate valid on the day of the operations. Profits and loses resulting from these operations and from conversion of assets and liabilities, denominated in a foreign currency are acknowledged in the profit and loss statement.

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Exchange differences resulting from notes and other monetary financial means acknowdeged at their fair value are included in the profit and losses from transactions with foreign currencies. Exchange differences with non-monetary figures, like shares in possession for trading, are shown as a part of an increase or decrease of its fair value.

Exchange differences for for-sale available securities are acknowledged directly in the capital in the surplas from re-valuation, which is the main part of the reserves.

7. NonNon-tangible Assets Non-tangible assets include investments into obtained patents, licenses, trademarks, good name, non-tangible assets in development, computer software and other nontangible assets (MRS 38). A non-tangible asset is acknowledged as exclusive, if there is a probability that future economic benefits will come to the company and if the purchase price can be measured with certainty.

Laško Brewery, d. d. uses a purchasing value model (IFRS 38.74.), that is why the nontangible assets are acknowledged by their purchasing prices, which is reduced for the sum of the accumulated depreciation and loss due to the weakening. a) Patents, trademarks and licenses Expenses for purchasing patents, trademarks and licenses are capitalized and depreciated with the use of a linear depreciation method during its »life span« (depreciation period). In case the life span cannot be determined, it is not depreciated but an attempt at weakening is carried out annually.

When there is a need to re-valuate, the value of non-tangible fixed assets need to be evaluated and written off in the amount of their supplementary value. b) Other nonnon-tangible assets When computer software is not a component part of the computer hardware, it is treated as non-tangible assets. Other non-tangible assets are acknowledged according to their purchasing price, which is lowered for the accumulated depreciation and loss due to weakening. Other non-tangible fixed assets have a life span of 10 years.

8. Tangible Fixed Assets Tangible fixed assets include property, equipment and small tools.

In the year 2008 the same accounting policies were applied as in the preceding years, except in tangible fixed assets (immovable property). Tangible fixed assets had been valued in the past according to the cost model, whereas in 2008 the revaluation model was used. Immovable property was valued in 2008 according to the revaluation model, unlike in the preceding years in which the cost model had been applied.

On 31 December 2008 an appraisal of properties and buildings was carried out and the effect of revaluation in the amount of EUR 5,462,555 affected the increase of tangible fixed assets, the surplus arising from revaluation in the amount of EUR 4,370,044 and the increase of the deferred tax obligation in the amount of EUR 1,092,511.

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The equipment and small tools are valued according to the cost model, decreased by depreciation and impairment.

Depreciation is accounted for on the basis of a linear method. The expected functional life periods by individual groups of assets are as The depreciation is calculated with a linear method. Expected functional life span for individual groups of funds are as follows: Real-estate Manufacturing devices and machines Computer equipment Vehicles Other equipment

20 - 40 years 4 - 10 years 2 - 4 years 4 - 8 years 3 - 7 years

Land is not depreciated since it is believed to have an unlimited life span. Assets which are being attained are not depreciated either, not until they are available for use.

Since the accounting value is higher than the estimates supplemental value, assets need to be re-valuated for the estimated supplemental values (weakened) – MRS 36.

Revenues and losses resulting from alienation of land, buildings and equipment are determined according to their accounting value and have an influence on revenue and loss from operations. Reusable containers (barrels, bottles and crates) are acknowledged with other tangible fixed assets with a 3 or 4 year life span.

The costs of financial liabilities for financing investments into tangible fixed assets are acknowledged along with creation expenses. Any subsequent expenses are included into the accounting value or they are acknowledged as an individual asset, which is only acceptable when it is expected that all future economic benefits connected to this object are considered in the Group and that the expenses of this object can be measured correctly. Accounting value of spare parts is not particularly acknowledged. Costs for all other repairs and maintenance are acknowledged in the profit and loss statement for the period they appeared in.

9. Investment property Investment property is real-estate (land and buildings – or parts of buildings – or both), which are owned by the Company or under financial leasing for the purpose of attaining rent or enlargement of the property value. Investment property is not used for production or sales of goods or services or for administrative purposes or for regular operations.

Land or building is determined as investment property, when it have been mediated for enlargement of a long-term investment value or given into operating lease and is not intended to be sold in the immediate future. Investment property is acknowledged as asset only when there is a possibility that future economic gains will be flowing into the company and the acquisition price can me measured correctly.

The Company uses purchase price model to measure investment property and that is why investment property is acknowledged according to its purchase price, lowered for accumulated depreciation and for accumulated loss due to weakening.

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To measure investment property the Company transferred in 2008 from the cost model to the fair value model. On 31 December 2008 the value of investment property was adjusted to fair value based on the appraisal carried out by certified appraisers. The effect of revaluation in the amount of EUR 1,038,297 increases other operating revenues.

Investment property is decreased by the accumulated depreciation according to the straight-line method whereby taking into account the useful life of individual investment property and accumulated impairment losses.

10. Financial Financial Assets The Company is classifying its investments into the following categories: financial assets at their fair value through profit and loss; loans and receivables; financial investment liable for forfeiture and available-for-sale financial assets. The classification depends on the asset for which the investment was acquired. a) Financial assets at their fair value through profit and loss This category is divided into two subcategories: financial assets intended for trade and financial assets determined by their fair value through the profit and loss when acknowledged. The investment acquired with the purpose of creating profits from shortterm (less than a year) price fluctuations are classified as intended for trade and belong to short-term assets. These assets are measured through their fair value and the realized/unrealized profits and losses resulting from changes of the fair value are included in the profit and loss statement for the period they were created in. In 2007 and 2006 the Company did not have any investment which would fit into this category. b) Loans and receivables Loans and receivables are uncollateralized financial assets with fixed or determined payments, which are not listed on the operating market. They are included into shortterm assets, unless they are due in more than 12 months after the date of the balance sheet. In this case they are classified as long-term assets. Loans and receivables are acknowledged with operating and other receivables according to their payment value with consideration of the effective interest rate. c) Own Financial investments liable for fortitude Investment with fixed forfeitude, which the management intends to keep until fortitude, are classified as own investments liable for fortitude and are included among the longterm assets. The company did not have any investments which would fit into this category. d) AvailableAvailable-forfor-sale financial assets Available-for-sale financial assets are outstanding financial assets, which have either been classified into this category or have not been classified to any category at all. The assets in this category are measured according to their fair value or according to the purchase value, if the purchase values could not be determined correctly. If the assets are measured according to their fair value, the re-valuation of the fair value is acknowledged directly in the capital.

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The company assesses if there is an objective poof that the value of the financial assets or groups of financial assets have been weakened for every dated balance sheet. In the case of available-for-sale financial assets the typically or lengthy lowering of the fair value under the purchasing price is considered an indicator for weakening of the shares. If there is indeed such a proof for available-for-sale financial assets then the accumulated loss – measured as the difference between the purchase price and current fair value, minus the loss due to the weakening of the financial assets acknowledged in the profit and loss statement – is removed from the capital and is acknowledged in the profit and loss statement. Removal of the weakening acknowledged in the profit and loss statement for capital instrument cannot be annulled.

11. Weakening of NonNon-financial Assets Assets, which have an unlimited life span and are not depreciated are tested for weakening annualy. The assets, which are depreciated are checked for weakening every time events or circustances point to wekened assets. Loss due to the weakening is acknowledged in the amount for which the accounting value exeeds its supplmmental value. The supplemental value is the one, which has the higher fair value, which os lowered for costs of sale and user value.

The assets are divided into smallest units, which can define flow of assets and are independent from other units (money creating units), for the purpose of determining the weakening. The value of a good name is determined annualy according to the need for weakening.

12. NonNon-shortshort-term Assets for Sale Non-short-term assets (alienation group) for sale are those non-short-term assets for which the accounting value is determined to be settled mostly by sale within the next twelve months and not with further use. The mentioned assets are valued according to the lower of the accounting and fair value, reduced by costs of sales.

13. Stock The stock is kept according to which value is lower – purchase of returned, with the use of average price method. The value of finished goods and current production include all manufacturing costs, which include costs of the manufacturing material, manufacturing labor costs, depreciation, services and other manufacturing costs. Net returned value is assessed according to the sales price during regular operations, lowered for the costs of finishing and sales.

14. Operating Receivables Operating receivables are acknowledged at the beginning according to their fair value, and afterwards they are measured according to the paying value with the valid interest rate method, lowered for the weakening. Weakening of the operating receivables is formed when the Company expects that it will not be able to claim the whole amount of the receivables due. The height of the weakening represents the differences between the accounting values and current vale of (expected) assessed future cash flows, discounted

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according to the current interest rate. The amount of the weakening is acknowledged in the profit and loss statement.

15. Cash and Cash Equivalent For the purpose of cash flow statement, cash and cash equivalent include cash in the register, deposits, which can be accessed at the banks and investments into the instruments of monetary market, without overdrawing the bank accounts. Overdraws of the account balance are included among short-term financial liabilities in the balance sheet.

16. Provisions Provisions are acknowledged when the Company is showing legal obligation as a result of past events for which there is a large possibility, that it will have to settle this liability and a reliable assesmetn of this liability is posible. Provisions cannot be formed in order to cover any future losses from operations.

17. Provisions for Severance Pay and LongLong-term Awards Net liabilities of the company connected to the long-term benefits due to years in service, with the exception of pension schemes, is a sum of incomes, which the employees receive for their work in the current and past years. The liabilities are calculated with the anticipated importance of units method and are discounted to current value.

18. Deferred Taxes The deferred tax is acknowledged as a whole, with considered liability method based on temporary differences between the tax, which is based on assets and liabilities, and acknowledged tax amount in the financial statements. Deferred tax is calculated with the use of the tax rate (and legislation), which is statutory and is valid on the date of the balance statement and is expected to be used, when the claim for the deferred tax is realized or when the liability of the deferred tax is settled.

Claim for the deferred tax is acknowledged of there is a possibility that the profit will be available in the future, from which temporary differences can be used. Liabilities for deferred tax are acknowledged when assets are re-valuated. In the balance statement the claim and the liability for deferred tax are acknowledged in the offset amount.

In year 2007 the tax legislation changed. Most of tax deductions have been cancelled, the tax rate ha also been changed, in 2007 it was 23 %, in 2008 it will be 22 % and in 2009 it will be 21 % and 20 % from 2010 onwards.

19. Operating Liabilities Operating liabilities are supplier loans for purchased goods and purchased services and liabilities towards the employees, the state, the owners and others. The liabilities are acknowledged in the accounting books, if there is possibility that their settlements will cause lowering of the factors, which enable business benefits and the settling amount can be reliably measured. At the beginning it is acknowledged according to its fair value,

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afterwards it is measured according to its payment price with the use of current interest rate method.

20. Financial Liabilities Financial liabilities are acknowledged at the start according to their fair value, without any transaction costs. In the following periods the financial liabilites are measured according to the payment value with the current interest rate value. Any difference between the revenues is acknowledged in the profit and loss stetement for the period of the entire financial liability.

21. Share Capital Ordinary shares are classified in the capital. Transaction costs, which are directly connected with issuing of new shares, which is not connected to a company takeover, are shown as lowering of the capital. Any surplus of the fair value of the received paid amount above the accounting value, if the issued new shares are acknowledged as paid capital surplus.

22. Own shares If the company has gained new own shares in the fiscal year (PILR) than the paid amount, including the transaction costs without tax is deducted from the whole capital as own shares (treasury shares) until the shares are withdrawn, re-issued or sold. The company has to form provisions for own shares in the same amount in the balance statement for this fiscal year. Provisions for own shares are released when the own shares are alienated or withdrawn, for the benefit of the source for which they were formed. If the Company sells or re-issues its own shares later, then all received payment without the transaction costs and connected tax effect are included into he equality capital. Also, upon selling, the difference between the sales and accounting value of own shares shall be recouped directly within the capital and shall not affect the profit or loss.

Own shares are to be used for the purposes arising from article 247 of the Companies Act. 23. Dividends Until they have been approved by the Shareholder's General Meeting the anticipated divided are treated as revenue retained.

24. Reporting in Segments Operating segments produce/perform products or services, which are different from products and services of other segments as far as the risks and benefits are concerned.

Regional (geographical) segments ensure products or services within a certain economic environment, which is subject to risks and benefits, different from risks and benefits in other economic environments.

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25. Comparable Data The first time the Company has produced financial statements according to the International Financial Reporting Standards (IFRS) was in 2006, that is why all data for 2007 is comparable with those for 2006, except for revenues and expenses from merchandise. Starting with 1.1.2007 a centralized detailed sale in the Horece channel has begun within the central company Laško Brewery, d.d.. Sale of affiliated companies to Horece buyers was made through Laško Brewery, d.d., therefore its revenues and expenses from the sale of merchandise have risen substantially. Also excluded was the impairment of the long-term investment in Jadranska pivovara, d.d., and dividends received from the subsidiaries.

26. Assesment of the value each items On the basis of assessments of management, appraisers, actuars and other experts were assessed following assets and liabilities: immovable property, investment property, financial assets and reservations. Becouse of assessments there are some uncertainly regarding the attainment of specific assumptions, used at valuation.

MANAGING MANAGING OF FINANCIAL RISKS Financial Risks According to the strategic direction towards minimization of individual types of financial risks, they are systematically assessed with the purpose of easer recognition of risks and setting the level of exposure. Exposure to individual types of financial risks and measures for protection are realized and assessed according to effects in the cash flow. a) Credit risks Credit risks include all risks, which influence lowering of the economic benefits of the company due to insolvency of our business partners (buyers) and unfulfilling of their contractual obligations. That is why we keep monitoring and observing financial receivables towards our buyers, whole sale dealers and detailed sales buyers. We mostly operate with known and checked business partners, whose profit is constantly monitored.

All our receivables are insured with the usual instruments for claim insurance like: bill, bank security and mortgage. We also use method of setting a limit for opened debt for an individual buyer, according to the sales contract. We continuously monitor receivables from business partners and according to date of payment and with current recovery, we charge default interest, written warnings and judicial recovery, we contribute to improvement of payment discipline of our buyers. Credit risks are controlled and pose a low level of exposure to our company. b) Interest rate risks Interest rate risk represents a possibility of change to the interest rate on the financial market, mostly due to long-term credits, which are bound to the floating rate (EURIBOR). Exposure to changes of the interest rate has been partly abolished in the previous years with the use of performed financial instrument in the form of interest

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shielding for long-term credits. With the interest rate collar method we have insured a half of our long-term loans as well as short-term loans before a possible growth of the reference interest rate above the set level. Most of the financial debt is intended for financial investments, alienation of which is possible very quickly and settlement of direct loans in case of any financial problems. We are estimating that the exposure to interest rate risk is low. c) Currency risk Currency risk has been negligible in the Company's operations in 2007, since the structure of our operations with foreign countries has been partly based on the Euro, with purchasing and selling as well as financial segment. We are assessing that the exchange rate risk with other currencies is low due to its insignificance. d) Solvency risk Solvency risk arises from the possibility of lack of disposable financial sources and incapability of the company to settle its obligations on the agreed date as a consequence, its current business obligations and its financing obligations as well. Liquidity risk for Laško Brewery, d.d. has been low and stable for the past years. With the help of appropriate credit lines for short-term balancing of cash flows and relatively quick access to necessary financing sources, the company has managed to control the solvency risks.

On the short-tem financial market we have the option of acquiring a large sum of money with the use of revolving loans. We also re-distribute surplus and deficit financial assets within the Group for short periods of time. All larger financial expenses have been planed in advance and reimbursed with financial income from operations or through use of short-term financing assets. We control long-term solvency risks in the same way.

After all, we have financial investments, which can be sold in a foreseeable future, if we needed additional financial assets. Based on the activity, we are assessing that the solvency risk is extremely low. e) Cash flow risk Derivate financial instruments are used for protecting the cash flow from risk. Changes of the fair value of the derived financial instrument, which is set to protect the cash flow from risks is acknowledged directly in the capital, but only if the protection is successful.

If the protection is not successful, then the changes of the fair value are acknowledged in the profit and loss statement.

If the instrument for protection against risks does not fulfill its function anymore, or if it stops functioning or is sold, cancelled or used, protection against the risks is no longer calculated. The accumulated profit or loss, which is acknowledged in the capital remains to be acknowledged until the announced transaction takes place. If the object of protection is a non-financial asset, then the acknowledged asset is transferred from the capital into the accounting value, after it has been acknowledged. In other cases, the amount acknowledged in the capital is transferred into the profit or loss statement for the period in which the asset, protected against the risk, is influencing any profit and loss.

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EXPLANATIONS WITH NONNON-CONSOLIDATED FINANCIAL STATEMENTS 1. Intangible assets Year 2008 ( in EUR )

Licenses and other IFAs

IFA in acquisition

Total

543,543 430,993 974,536

849,611 (430,993) 418,618

543,543 849,611 1,393,154

184,846 66,859 251,705

-

184,846 66,859 251,705

722,831

418,618

1,141,449

358,697

-

358,697

COST OF PURCHASE st

1 January 2008 Direct gains Transfer from investments in progress st 31 December 2008 ACCUMULATED VALUE ADJUSTMENT st

1 January 2008 Amortization in the year st 31 December 2008 CURRENT COST st

31 December 2008 st

1 January 2008

The Company does not have any pledged intangible assets on 31 December 2008.

Year 2007 ( in EUR )

Licenses and other IFAs

IFA in acquisition

Total

538,123 45,471 (40,051) 543,543

45,471 (45,471) -

538,123 45,471 (40,051) 543,543

145,843 50,351 184,846

-

145,843 50,351 184,846

358,697

-

358,697

392,280

-

392,280

COST OF PURCHASE st

1 January 2007 Direct gains Transfer to IFA Conversion of deferred tax to new rates st 31 December 2007 ACCUMULATED VALUE ADJUSTMENT st

1 January 2007 Amortization in the year st 31 December 2007 CURRENT COST st

31 December 2007 st

1 January 2007

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2. Tangible fixed assets

Properties

Buildings

Production plant and machines

4,506 ,906 -

40,886,516 -

106 ,693,25 7 -

21 ,95 5,27 6 -

9,254,12 3 3,194,30 1

7,23 1,720 1 6,34 2,348

19 0,52 7,7 98 1 9,53 6,6 49

3,436 ,854 716 ,643 (78,195 ) 8,582 ,208

13,207,226 (20,926,817) 33,166,925

3 ,469,12 0 (1,502 ,464) 108 ,659,91 3

3 ,29 8,01 9 (1,344 ,928 ) 23 ,90 8,36 7

(3,042,700 ) 9,405,72 5

(23 ,411,21 8) 16 2,850

(20 ,21 0,17 4) (5 ,96 8,28 6) 18 3,88 5,9 87

-

28,123,622 1,311,378 (25,672,728) 3,762,272

92 ,635,82 3 4 ,170,08 6 (1,455 ,013) 95 ,350,89 6

15 ,85 6,88 6 1 ,74 5,13 7 (1,313 ,869 ) 16 ,28 8,15 4

7,680,69 4 1,077,40 5 (3,042,700 ) 5,715,39 9

-

14 4,29 7,0 25 8,30 4,0 06 (25 ,67 2,72 8) (5 ,81 1,58 2) 12 1,11 6,7 21

8,582 ,208

29,404,653

13 ,309,01 7

7 ,62 0,21 3

3,690,32 5

16 2,850

6 2,76 9,2 67

4,506 ,906

12,762,894

14 ,057,43 4

6 ,09 8,39 0

1,573,42 9

7,23 1,720

4 6,23 0,7 73

Other plant and equipment

Small inventory

Capital assets in acquisition

Total

Year 2008 ( in EUR )

Other plant and equipment

Small inventory

Capital assets in acquisition

To tal

COST OF PURCHASE 1 st January 2008 Direct gains Transfer from investments in progress Transfer on investments property Disposals 31st December 2008

ACCUMULATED VALUE ADJUSTMENT 1 st January 2008 Depreciation in the year Transfer on investments property Disposals 31st December 2008 CURRENT COST 31st December 2008 st

1 January 2008

Properties

Buildings

Production plant and machines

4,798,657 -

40,261,682 -

103,842,194 -

21,907,890 -

1 0,974,681 1,537,667

1,860,9 91 11,313,129

183,646,095 12,850,796

(291,751) 4,506,906

1,361,980 (737,146) 40,886,516

2,969,528 (118,465) 106,693,257

1,61 0,892 (1,563,506) 21,955,276

(3 ,258,225) 9,254,123

(5,942,400) 7,231,7 20

(5,96 9,093) 190,527,798

-

27,171,356 1,362,548 (410,282) 28,123,622

87,986,182 4,768,106 (118,465) 92,635,823

16,158,712 1,25 3,909 (1,555,735) 15,856,886

1 0,103,393 835,526 (3 ,258,225) 7,680,694

-

141,419,643 8,220,089 (5,34 2,707) 144,297,025

31st December 2007

4,506,906

12,762,894

14,057,434

6,09 8,390

1,573,429

7,231,7 20

46,230,773

1st January 2007

4,798,657

13,090,326

15,856,012

5,74 9,178

871,288

1,860,9 91

42,226,452

Year 2007 ( in EUR ) COST OF PURCHASE 1 st January 2007 Direct gains Transfer from investments in progress Disposals 31st December 2007

ACCUMULATED VALUE ADJUSTMENT 1 st January 2007 Depreciation in the year Disposals 31st December 2007 CURRENT COST

Disposals of tangible fixed assets are represented by the sale and write-offs of tangible fixed assets. The company did not lease any fixed assets.

In 2008, the company changed its model of real-estate valuation. In the past, both real estates and other tangible fixed assets were valuated according to the model of purchase value. In 2008, the company switched to revaluation model. A valuation was carried out on 31 December 2008. If we take for instance the value of EUR 5,462,555, the revaluation effect was reflected in an increase in tangible fixed assets, while at the value of EUR 4,370,044 it was reflected in revaluation surplus. At the value of EUR 1,092,511, it increased the liability for deferred tax. The value of lands increased by EUR 716,643, while the value of buildings increased by EUR 4,745,911.

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Equipment and small tools are valuated in accordance with the purchase value model less depreciation and impairments.

The company pledged its tangible fixed assets to insure long-term loans which on 31 December 2008 totalled EUR 34,519,308. The current value of these assets on 31 December 2008 was EUR 32,041,478.

3. Investment property

Year 2008 ( in EUR )

Investment property in acquisition

Properties

Buildings

Total

407,328 171,132 578,460

12,520,305 430,942 (7,145,959) (38,986) 5,766,302

430,942 (430,942) -

12,927,633 430,942 (6,974,827) (38,986) 6,344,762

-

8,785,413 255,223 (38,986) (8,013,124) 988,526

-

8,785,413 255,223 (38,986) (8,013,124) 988,526

31 December 2008

578,460

4,777,776

-

5,356,236

1st January 2008

407,328

3,734,892

-

4,142,220

COST OF PURCHASE st

1 January 2008 Increase in the value Transfer from TFA Revaluations Disposals st 31 December 2008 ACCUMULATED VALUE ADJUSTMENT st

1 January 2008 Depreciation Disposals Revaluations - impairments st 31 December 2008 CURRENT COST st

In 2008, the company generated EUR 299,876 of revenue and EUR 188,500 of expenditure from investment property. In 2008, it changed its valuation model, switching from the model of purchase value to fair value model. On the basis of valuation of 31 December 2008, it revaluated investment property to the new fair value.

The revaluation effect equalled EUR 1,038,297, which was reflected in a corresponding increase in other operating revenues. This investment property also includes the property which is not used for carrying out basic activity and which is let by the company. Sports arena Tri lilije and catering buildings Hotel Hum, Hotel Savinja as well as the in Grad Tabor are all registered as investment property.

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Annual Report 2008 / Accounting Report – Pivovarna Laško, d. d.

4. A. Longong-term financial investment in subsidiary companies ( in EUR )

Share in cap ital

2008

2007

% % % % %

169,010,813 1,457,761 49,147,920 70,689,436 7,428 290,313,358

167,753,885 1,457,761 48,876,027 70,660,170 7,428 288,755,271

99.100 % 69.230 %

5,433,000 160,408 5,593,408

4,573,000 160,407 4,733,407

295,906,766

293,488,678

SHARES IN COMPANIES OF THE GROUP In Slovenia: Piv ovarna Union, d. d. Ljubljana Vital Mestinje, d. o. o.

Radenska, d. d. Radenci Delo, d. d. Ljubljana Firma Del, d. o. o. Laško Abroad: Jadranska Pivovara, d. d. Split RA&LA, d. o. o. Sarajevo Total

97.556 96.920 92.564 80.831 100.000

Long-term financial investments in subsidiary companies increased in 2008 by additional purchases of EUR 1,558,087. Pivovarna Laško, d. d. increased the investment in the subsidiary company Pivovarna Union, d. d. by EUR 1,256,928 (0.836 %), in Radenska, d. d. by EUR 271,893 (0.504 %) and in Delo, d. d. by EUR 29,266.

In 2008, the company performed a capital increase of EUR 14,986,598 in the subsidiary company Jadranska pivovara, d.d. thus increasing its share in the company by 4.55 percent to the total of 99.10 percent. During the capital increase we also performed a conversion of long-term debt of EUR 9,537,500 and of operating receivables totalling EUR 5,449,098. The company also decided to restructure Jadranska pivovara, d.d. due to its poor business performance and poor liquidity. To this end, it issued a letter of intent – the offer for the sale of majority share owned by Pivovarna Laško, d. d. or the sale of the production plant. Several bidders responded to the offer and intensive negotiations are under way with them all. At the same time, a valuation of the company, i. e. its majority share was carried out by an accredited business appraiser.

Long-term financial investments in controlled companies are valued according to the purchase value model. A valuation is carried out for each investment into controlled companies whose book value in the accounts of Pivovarna Laško d. d. exceeds the share of capital's book value of each company. On the basis of valuations, an examination of need for impairment was conducted.

On 31 December 2008, the following controlled companies were valuated: Pivovarna Union, d. d., Delo, d. d. and Jadranska pivovara, d. d. Split.

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Annual Report 2008 / Accounting Report – Pivovarna Laško, d. d.

Valuations of subsidiary companies a) Valuation of the company Pivovarna Union, d. d.

Valuation was carried out by an accredited business appraiser, registered with the Slovenian Institute of Auditors. The valuation was based on the method of the current value of expected cash flows. The appraiser conducted the work on the basis of financial statements of the company Pivovarna Union, d. d. When using this method, one first assesses the current value of free cash flows without the repayments of interests and the principal value of loans (total equity value) and then adds on the value of the subsidiary company Fructal plus the value of excess financial investments and unnecessary property. From this figure, all financial liabilities, and calculated premiums and discounts were deducted. A separate valuation was conducted for the investments in Fructal Group and a 12.3 percent share in Poslovni sistem Mercator. Two methods were used for the valuation of these investments: the method of the current value of expected free cash flows without including debt and the method of the capitalisation of normalised free cash flow without including debt.

At the same time, a method of market comparisons was used as control method when valuating companies (Pivovarna Union, Fructal and Mercator). On the basis of valuation methods used, the fair market value of 97.6 percent share in Pivovarna Union amounts to EUR 228,846,280 or EUR 520 per share, which is 35.4 percent more than the value of the investment presented in the books of account of Pivovarna Laško, d. d. b) Valuation of the company Delo, d. d.

The valuation, which was carried out by an accredited business appraiser, registered with the Slovenian Institute of Auditors, was based on various valuation methods: the method of the current value of expected free cash flows and the method of comparable transactions based on the multipliers MVIC/Sales and MVIC/EBITDA. The appraiser started work from the assumption that the company's market value equals the current value of expected free cash flows, in accordance with a general financial assumption that the company's value equals the sum of all future benefits which it brings to its owner. Since printed media generate somewhat broader yields to than regular companies, a valuation of future yields exceeds the results of comparable transactions method.

During the valuation, the business plan and company potential were taken into account, based on the current operations and activities analysis. Controlling premium was not taken into account, as the valuation was already based on future yield of majority owner.

The 5 percent discount for lack of liquidity was also taken into account.

On the basis of above described methods, the evaluated value (100 %) of the company Delo, d. d. equals EUR 93,445,000 or EUR 140 per share, which is 7.8 percent more than the value presented in the books of account of Pivovarna Laško, d. d.

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Annual Report 2008 / Accounting Report – Pivovarna Laško, d. d.

c) Valuation of the company Jadranska pivovara, d. d.

The valuation of this investment was also carried out by an accredited business appraiser, registered with the Slovenian institute of Auditors. When assessing the market value of equity of Jadranska pivovara d.d., the appraiser analysed and assessed al micro and macro elements which are most significant for the valuation and which were possible to take into account, given the data available. The subject of valuation was the majority (99.10 %) share of the company Jadranska pivovara d. d. The appraiser used revenue approach. He started from an assumption that the production plant will be sold and that the purchaser will continue the production. Since the valuation was made on behalf of majority owner owning 99.10 % of the company and since the method of liquidation value envisages a majority owner, premiums for control were not used.

Given the objective of the valuation, no discount for the lack in liquidity was taken into account during the valuation of 99.10 % share of the company.

Based on the valuation, the market value of 99.10 % - share of the company Jadranska pivovara, d. d. on 31 December 2008 equals EUR 5,433,000, while the total value of the company amounts to 5,477,531. On the basis of this valuation, Pivovarna Laško, d. d. recognised an impairment of EUR 14,126,598 in its books of account..

Due to the financial insignificance of the companies RA&LA and Firma Del, they will not be dealt with in detail in further text. All other companies are consolidated with the method of full consolidation..

4. B . LongLong-term financial investments into associated companies ( in EUR )

Share in cap ital

2008

2007

-%

-

44,807

-

44,807

SHARES IN ASSOCIATED COMPANIES Birra Peja, d. d. Peć, Kosovo Total

In 2008, the company sold its 30-percent share in the associated company Birra Peja, d. d. Peć from Kosovo to the associated company Pivovarna Union, d. d. Ljubljana at its book value.

4. C. AvailableAvailable-forfor-sale longlong-term financial assets ( in EUR )

2008

2007

Other investments in shares at the cost of purchase Other investments in shares at the fair value

11,169,105 50,394,538

18,142,202 106,470,910

Total

61,563,643

124,613,112

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Annual Report 2008 / Accounting Report – Pivovarna Laško, d. d.

available--forfinancial Movement of available for-sale fin ancial assets ( in EUR )

2008

2007

Balance as at 1 January

124,613,112

94,976,535

Changes in the year: Gains Revaluation Sale

3,830,333 (56,108,360) (10,771,442)

13,904,110 38,832,345 (23,099,878)

61,563,643

124,613,112

st

st

Balance as at 31 December

In 2008, the company Pivovarna Laško, d. d. acquired 358,978 shares of the company Thermana, d. d. Laško from the parent company Infond Holding, d. d. Maribor in the total value of EUR 2,602,400 and became 13.794 percent owner of that company. In 2008, the company disposed of its 8.85-percent share in the company Perutnina Ptuj, d. d. amounting to EUR 10,771,441 and recognised financial expenditure arising from impairments of EUR 1,353,058.

The value of available-for-sale long-term financial assets fell by EUR 56,076,372 due to the fall in the value of shares compared to the previous year. Due to revaluation to new fair value, the value of investment into Poslovni sistem Mercator, d. d. Ljubljana decreased by EUR 56,171,746. The revaluation effect influenced the decrease in revaluation surplus and deferred tax liabilities. The company owns 317,498 MELR shares (8.43 %). If we take the fair value of EUR 158.08 per share on 31 December 2008, the total value amounts to EUR 50,190,084. The fair value of the investment on 31 December 2008 was 1.5 percent lower than the original purchase value, which amounted to EUR 50,977,838 i.e. EUR 160.56 per share.

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Annual Report 2008 / Accounting Report – Pivovarna Laško, d. d.

5. LongLong-term loans ( in EUR )

2008

2007

Long-term loans to companies of the Group Other long-term loans

46,754

7,562,500 54,727

Total

46,754

7,617,227

Long-term loan granted to subsidiary company Jadranska pivovara, d. d. Split was converted into an increase in equity share during additional capitalisation of 2008.

6. LongLong-term opeerating receivables ( in EUR )

2008

2007

Long term receivables to others

785,228

-

Total

785,228

-

Long-term operating receivables refer to the production equipment for Bandidos brand, which was given on financial lease to a business partner from Belarus.

7. LongLong-term receivables gor deffered tax Long-term receivables and liabilities for deferred tax are calculated on the basis of temporary differences with consideration of liability method with consideration of 22 % (in 2008), 21 % (in 2009) and 20 % (2009 onwards) tax rate. ( in EUR ) Long-term receivables for deferred tax Long-term liabilities for deferred tax Net long-term receivables for deferred tax

2008

2007

6,718,667 (1,115,962)

3,879,734 (11,087,128)

5,602,705

(7,207,394)

In 2008, the company has net long-term deferred tax receivables amounting to EUR 5,602,705, while in 2007 the deferred tax liability amounted to EUR 7,207,394.

long--term rece receivables Movement of long ivables for deferred tax ( in EUR )

2008

2007

Begining of the year - claims for deferred tax Changes in the profit and loss statement Changes in the balance sheet

3.879.734 2.681.313 157.620

5.842.067 (1.410.058) (552.275)

Total

6.718.667

3.879.734

In 2008, long-term deferred tax receivable increased by EUR 2,838,933.

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Annual Report 2008 / Accounting Report – Pivovarna Laško, d. d.

Liabilities to employees

Fair value (financial assets)

Other

Total

RECEIVABLES FOR DEFERRED TAX st 1 January 2007

395,110

5,330,225

116,732

5,842,067

Change in the profit and loss statement Change in the balance sheet st 31 December 2007

(3,123) 391,987

(1,400,776) (552,275) 3,377,174

(6,159) 110,573

(1,410,058) (552,275) 3,879,734

Change in the profit and loss statement Change in the balance sheet

6,914 -

779,088 157,620

1,895,311 -

2,681,313 157,620

398,901

4,313,882

2,005,884

6,718,667

( in EUR )

st

31 December 2008

Long-term deferred tax receivables decreased by EUR 2,046,231 in 2008. This decrease relates to the elimination of one third of established deferred tax receivable from differences arising from transfer to MSRP. In 2008, long-term deferred tax receivable increased by EUR 2,848,711, of which EUR 2,825,320 due to impairment of long-term financial investment in controlled company Jadranska pivovara, d. d. Split, EUR 1,895,311 due to disclosed tax loss for 2008 and EUR 164,533 due to other financial investments and liabilities to employees.

Long-term deferred tax liabilities refer to the conversion of long-term financial assets for sale and real-estates to fair value, which is reflected in revaluation surplus. The tax rate used is 20 % in case of long-term assets, which are not expected to be materialised before 2010.

8. Non Nonon-shortshort-term assets for sale ( in EUR )

2008

2007

Properties for sale

1,083,307

1,070,307

Total

1,083,307

1,070,307

Among non-short-term assets available for sale, the value of the real estate (office and warehouse building with the belonging land in Ljubljana) which the company intends to dispose of in a year was presented. The value of the property was disclosed at purchase value reflecting fair value.

9. Stocks ( in EUR )

2008

2007

Material and raw material Unfinished peoduction Products Merchandise

6,737,375 771,099 1,807,418 456,190

6,388,115 748,364 1,817,579 378,696

Total

9,772,082

9,332,754

The value of inventories did not change with respect to the previous year.

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Annual Report 2008 / Accounting Report – Pivovarna Laško, d. d.

No substantial deficits or surpluses were established during the regular annual inventory. There were no pledged inventories on 31 December 2008. The book value does not exceed does not exceed the net realisable value of inventories.

10.

10. A. ShortShort-term operating receivables ( in EUR ) Short-term trade operating receivables: on the domestic market on foreign markets Less value adjustment Total Short-term operating receivables on others Advances Less value adjustment Total

2008

2007

10,158,466 3,823,539 (2,599,720) 11,382,285

7,669,085 4,915,241 (3,260,368) 9,323,958

717,427 3,138,051 (694,659)

806,632 2,599,706 -

14,543,104

12,730,296

On 31 December 2008, the company presented EUR 14,543,104 of short-term operating receivables, which is 14.2 percent more than last year. As payment deadlines extended, this mostly resulted in an increase in short-term operating receivables to domestic buyers.

The disclosed value of short-term operating and other receivables reflects fair value.

short--term operating receivables Corrected values of short ( in EUR )

2008

2007

Balance as at 1 January

3,260,368

3,742,359

Recovered receivables written-down Final write-down of receivables Decrease in value correction in the year

(358,712) (803,827) 501,891

(1,084,803) (155,123) 757,935

2,599,720

3,260,368

2008

2007

8,210,691 894,742 669,467 872,943 3,334,162

6,931,228 685,537 772,182 935,010 3,260,369

13,982,005

12,584,326

st

st

Balance as at 31 December

Maturity Maturity of the receivables towards buyers ( in EUR ) TRADE RECEIVABLES unmatured up to 30 days from 30 to 60 days from 60 to 90 days above 90 days st

Balance as at 31 December

Receivables towards buyers totalling EUR 2,514,710 are insured with received guarantees.

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Annual Report 2008 / Accounting Report – Pivovarna Laško, d. d.

On 31 December 2008, the matured trade receivables of the Company amounted to EUR 5,771,314. Value adjustment was made for mature receivables of EUR 2,599,720, while the remaining sum of EUR 3,171,594 was not subject to value adjustment as it is not disputable.

10.

10. B. ShortShort-term receivables for overpaid tax on revenue of legal persons ( in EUR )

2008

2007

Receivables for overpaid corporate income tax

818,322

-

Total

818,322

-

2008

2007

Short-term part of long-term loans given Short-term deposits Short-term loans Less value adjustment

3,250,402 (50,402)

1,975,000 333,431 617,944 (77,608)

Total

3,200,000

2,848,767

11. ShortShort-term loans ( in EUR )

Short-term loans refer to the loan granted to subsidiary company amounting to EUR 2,600,000, and to other loans of EUR 600,000. The average interest rate for short-term loans in 2008 was 5.8 %. The presented value of short-term loans reflects fair value.

12. Cash in bank, cheques and cash in hand ( in EUR )

2008

2007

Cash in banks Cash in hand and received cheques Monetary resources in foreign currency Cash items in the process of collection

10,841 2,900 13 76,349

95,743 49,213 13 23,974

Total

90,103

168,943

( v EUR )

2008

2007

Deferred cost and accrued revenues

3,082

5,632

Total

3,082

5,632

13. Active Active accrual

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Annual Report 2008 / Accounting Report – Pivovarna Laško, d. d.

14. Capital Capital of Laško Brewery, d. d. is represented by called-up capital, capital reserves, profit reserves, transfered profit or loss, surplus from re-valuation of financial investments classified in the sale group and previously undistributed revenue and the losses from the fiscal year, which have not been settled yet.

The share capital appears as registered capital (capital with shares or capital share). It is divided into called-up share capital and non-called-up share capital. Non-called-up share capital is a deduction of the share capital.

Called-up capital of the company Laško Brewery, d. d. is determined in the company's statute and it adds up to 36,503,304.96 EUR. It is divided into 8,747,652 freely transferable nominal shares. Every share gives its owner the right to vote at the annual shareholder’s meeting and in profit sharing. Nominal value of the called-up capital is 36,503,304.96 EUR. Capital reserves include the paid premium account in the amount of 102,377,721 EUR, which was formed with both capital increases from shareholders payments, which exceeded the nominal value of the paid shared and general re-valued correction of the capital, which resulted from maintaining the real value of the capital in the amount of 23,146,157 EUR. Among the provisions, the statutory reserves in the amount of 25,606,794 EUR have been acknowledged, provisions for own shares in the amount of 246,617 EUR, own share as deductions in the amount of 246,617 EUR and other capital reserves in the amount of 8,944,544 EUR. Statutory reserves can be used exclusively for reimbursement of losses. In 2008, the Company acquired 9,386 lots of own shares in the value of EUR 758,834 and disposed of 6,206 lots of own shares in the value of EUR 345,637.

The surplus from re-valuation was formed from effects of re-valuation on financial assets for sale to their fair value. Long-term and short-term financial investments of the Company are evaluated according to their fair value and are classified as investments for sale. Fair value of revenues and losses of these investments in reflected directly in the share capital in the surplus from the re-valuation.

Available--forworth:: Available for-sale financial assets – net worth ( in EUR )

2008

2007

Revaluation on fair value Liabilities from deferred tax

(56,108,360) 11,221,672

38,868,965 (7,812,026)

Total

(44,886,688)

31,056,939

From the revaluations, the long-term liabilities for deferred tax decreased for 9,971,166 EUR.

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Annual Report 2008 / Accounting Report – Pivovarna Laško, d. d.

Because of impairment financial investment into subsidiary company Jadranska pivovara, d. d. in amount EUR 14,126,598, Pivovarna Laško, d. d. recognised the loss in amount of EUR 6,094,057.

Ownership structure on 31. December 2008 is as follows: Shareholder

Participation in %

Infond Holding, d. d.

Kapitalska družba, d.d.

Skagen Kon-tiki Verdipapirfond NFD 1 Delniški investicijski sklad, d. d.

CPM, d. d.

D.S.U., d. o. o.

Probanka, d. d.

Uravnoteženi investicijski sklad Infond Global Electa, d. o. o. Ljubljana Other small shareholders

52.971 % 7.059 % 5.563 % 5.094 % 2.511 % 1.894 % 1.728 % 1.438 % 1.302 % 20.440 %

Total

100.000 %

The market value of a Pivovarna Laško, d. d. share on 31 December 2008 amounted to EUR 20.07 in accordance with IFRS, which exceeds the book value by 139.1 percent.

15. Provisions and longlong-term passive accrual 15. A. Provisions for severance pay and longlong-service rewards ( in EUR )

2008

2007

Long-term liabilities to employees

1,377,905

1,276,661

Total

1,377,905

1,276,661

Provisions are formed for assessed liabilities for severance pay and long-service awards, such as long-service of the employees, on the dated balance sheet, discounted to the current value. The provision has been formed for expected payments.

For the year 2008, the company alone carried out a calculation of reservations for retirement pensions and jubilee awards on the basis of the calculation and the methodology used by accredited actuary in the previous years. The collective agreement lays down that apart from their regular salaries, all employees except the management are entitled to a severance pay when retiring. The severance pay amounts to a maximum of two average gross salaries in the Republic of Slovenia in the past three months or to two salaries of the employee, whichever is higher. Jubilee awards are paid to the employees with regard to their total period of employment, amounting to 50 % or 75 % or 100 % of the average net salary of the company in the past three months for 10, 20, or 30 years of work respectively. The chosen discount rate is 5.85 % per year.

Compared to 2007, the reservations for severance pays and jubilee awards decreased by actual retirement totalling EUR 43,638 and increased by EUR 144,882 due to changes in conditions arising from employment contract.

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15. B . LongLong-term passive accruals ( in EUR )

2008

2007

Reservations

65,657

43,808

Total

65,657

43,808

Long-term passive accruals pertain to exemption of retirement and disability insurance contribution, for disabled people above the quota, which can be used only for the purposes from Article 61 of ZZRZI (investments into operating fixed assets, which are linked with work for the disabled, improvement of working conditions for the disabled, keeping and creating new job openings for the disabled, etc).

16 . LongLong-term liabilities 16 . A. LongLong-term financial liabilities ( in EUR )

2008

2007

Long-term loans obtained from banks Transfer to short-term financial liabilities

166,304,167 (6,040,789)

138,807,513 (32,236,042)

Total

160,263,378

106,571,471

Interests for long-term loans in 2008 were on average 5,45 %. The acknowledged value of long term financial liabilities reflects its fair value.

long--term loans Maturity long ( in EUR )

2008

2007

Maturity above 6 years Maturity from 4 to 6 years Maturity from 2 to 4 years Maturity from 1 to 2 years Short-term part of long-term financial liabilities

7,697,264 35,826,545 116,739,569 6,040,789

2,688,269 25,708,648 48,938,512 29,236,042 32,236,042

Total

166,304,167

138,807,513

In 2008, Pivovarna Laško, d. d. took EUR 75,000,000 of new long-term loans and repaid EUR 47,503,346 of the existing loans. In 2009, we will repay EUR 6,040,789 of long-term bank loans, EUR 116,739,569 in 2010, EUR 21,183,036 in 2011, EUR 14,643,509 in 2012, EUR 6,053,112 in 2013 and EUR 1,644,152 in 2014.

In order ot insure long-term debts, the company pledged 4,570,547 shares of Radenska, d. d., 436,239 shares of Pivovarna Union, d. d., 539,516 shares of Delo, d. d., 130,000 shares of Probanka, d. d. Maribor, and 307,404 shares of Mercator, d. d. The book value of these shares on 31 December 2008 amounted to EUR 344,256,105. A part of long-term debts was insured with a mortgage of EUR 29,357,300, and another part by pledging real estates totalling EUR 2,684,178. The value of unpaid debts, insured by shares, mortgage

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and pledged real estates on 31 December equals EUR 165,422,903, while a part of longterm loans totalling EUR 881,526 is insured with bills.

16 . B. LongLong-term liabilities for deferred tax Long-term deferred tax liabilities of EUR 1,115,961 decrease the deferred tax receivable.

Compared to last year, long-term deferred tax liability decreased by EUR 9,971,166, mainly due to the fall in the value of available for sale financial assets, declared at fair value.

Forming longlong-term liabilities for deferred tax Fair value (Properties, builings)

Fair value (financial assets)

Total

-

3.827.650 7.259.478

3.827.650 7.259.478

31 December 2007 Change in the balance sheet

1.092.511

11.087.128 (11.063.677)

11.087.128 (9.971.166)

Total

1.092.511

23.451

1.115.962

2008

2007

3,269,101 8,089,629

1,621,339 6,198,011

672,660 2,881,717 328,562 311,970

1,237,955 2,932,185 644,973 248,184

15,553,639

12,882,647

( in EUR ) LIABILITIES FOR DEFERRED TAX st

1 January 2007 Change in the balance sheet st

17. ShortShort-term liabilities 17. A. ShortShort-term operating liabilities ( in EUR ) Short-term liabilities to companies in the Group as suppliers Short-term liabilities to other suppliers Short-term operating liabilities to others: to employees to the state Short-term liabilities for advances Other short-time liabilities Total

Among short-term operating liabilities, the biggest share goes to liabilities to suppliers, which increased by 45.3 percent compared to last year, mainly due to the extension of payment deadlines. This item is followed by liabilities to the State arising from VAT and excise duties.

17. B. ShortShort-term liabilities liabilities for tax payment ( in EUR )

2008

2007

Short-term liabilities for tax p ayment

-

892,716

Total

-

892,716

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17. C. ShortShort-term financial liabilities ( in EUR ) Short-term p art of long-term financial liabilities Short-term financial liabilities for interest from loans Short-term loand obtained from the companies in the Group Short-term loans obtained from banks Other short- term financial liabilities Total

2008

2007

6,040,789 2,309,403 21,442,985 78,929,470 501,747

32,236,042 2,482,564 3,042,985 104,037,878 20,368

109,224,394

141,819,837

The value of short-term financial liabilities decreased by 23 percent compared to last year. Loans taken from other Group companies increased by EUR 18,400,000, while bank loans amounted to EUR 17,081,912. The company also returned EUR 42,182,008 of short-term loans.

In 2008, the average interest rate for short-term loans was 5.98 %. The declared value of short-term financial liabilities reflects fair value.

Short-term bank loans of EUR 45,300,000 are insured with pledged shares (see Note 16. A). The remaining short-term bank loans of EUR 33,629,470 are insured with bills.

The total short-term liabilities of the company on 31 December 2008 equalled EUR 125,403,366 and short-term assets totalled EUR 29,510,000. The surplus of short-term liabilities totals EUR 95,893,366. As far as short-term loans are concerned, the company will try to reach an agreement with banks on the extension of payment deadlines when these loans mature. If agreement is not reached, the loans will be paid by selling a part of the company's long-term property.

18. Passive Pas sive accruals ( in EUR )

2008

2007

Accrued costs and deferred revenues

625,333

621,158

Total

625,333

621,158

As far as accrued expenses and deferred revenues are concerned, the company uses them to recognise its liability to employees for their unused working hours and unpaid annual leaves. The value of these liabilities has not significantly changed compared to last year.

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19. Analysis of the revenues from sale and expenses 19. A. Analysis of the revenues from sale according to the m main ain products ( in EUR ) Beer Other beverages (water) Sale rev enues of merchandise - Horeca channel Sale rev enues of merchandise and materials Other Total

2008

2007

83.420.281 1.192.200 20.666.293 1.606.262 1.578.814

78.714.725 4.399.162 22.913.939 1.413.346 1.171.211

108.463.850

108.612.383

Sales revenues have not substantially changed compared to last year. The share of revenue from beer sale increased and now represents 76.9 percent of the total sales revenue, while it was somewhat lower in 2007 – 72.5 percent. Due to a fall in sale, the share of water sale revenue decreased from 4.1 percent in 2007 to 1.1 percent in 2008.

The revenue from the sale of commercial goods in Horeca channel has also decreased.

19. B. Analysis of revenues according to countries ( in EUR ) Sale revenues in Slovenia Sale revenues on foreign markets Total

2008

2007

99,505,889 8,957,961

98,668,808 9,943,575

108,463,850

108,612,383

Sales revenues from foreign markets were generated mostly in the markets of the former Yugoslavia.

19. C. Analysis of costs according to categories ( in EUR )

2008

2007

Expences of merchandise sold - Horeca channel Expences of materials and merchandise sold Expenses of sevices Depreciation Expenses of salaries Benefits on payments for social security Other labor costs Revaluation operating expenses at fixed assets Revaluation operating expenses at reverse assets Costs of reservations Other operating expenses

20,563,780 31,746,498 26,521,618 8,626,088 7,100,131 1,374,818 1,454,973 80,526 304,783 144,882 1,316,037

22,806,461 28,855,117 21,760,872 8,514,247 7,218,557 1,581,191 1,354,896 36,474 684,351 182,823 1,361,341

Total

99,234,134

94,356,330

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Operating expenditures have increased by 5.2 percent compared to last year. The major increase was in the cost of materials, which is now 10 percent or EUR 2,891,381 higher than previous year and the costs of services, which have increased by 21.9 percent or EUR 4,760,746. The costs of materials have increased mostly due to an increase in the price of raw and manufacturing materials, while the increase in the price of services can be mostly attributed to the increase in advertising costs.

40 percent of the costs of services go to advertising costs, followed by the costs of maintenance, transport services and intellectual and other services.

19. D. Costs according to functional groups Production expences of so ld products and goods

Expenses of selling

Cost of general activities

Total

Expences of merchandise sold - Horeca channel Expences of materials and merchandise sold Expenses of services Depreciation Labor costs Revaluation operating expenses at fixed assets Revaluation operating expenses at reverse assets Costs of reservations Other operating expenses

29 ,485,092 2 ,842,867 6 ,795,052 4 ,707,334 47,578 50,709 318,615

20,563,780 1,910,893 13,706,272 649,568 2,120,391 14,105 302,919 36,221 132,272

350,512 9,972,479 1,181,468 3,102,199 18,843 1,864 57,953 865,149

20,563,780 31,746,497 26,521,618 8,626,088 9,929,924 80,526 304,783 144,882 1,316,036

Skupaj

44 ,247,247

39,436,421

15,550,467

99,234,134

Year 2008 ( in EUR )

In 2008, the costs of sales services decreased and the costs of general activities increased primarily due to reorganisation by which the marketing department was separated from the sales department and became an independent entity of the Management.

Audit costs in 2008 amounted to EUR 44,318.

Production expences of so ld products and goods

Expenses of selling

Cost of general activities

Total

Expences of merchandise sold - Horeca channel Expences of materials and merchandise sold Expenses of services Depreciation Labor costs Revaluation operating expenses at fixed assets Revaluation operating expenses at reverse assets Costs of reservations Other operating expenses

26 ,119,667 2 ,094,819 6 ,782,781 4 ,944,743 895 63,988 462,419

22,806,461 2,641,412 15,672,194 529,836 2,488,729 1,140 680,921 45,706 270,122

94,038 3,993,859 1,201,630 2,721,172 34,439 3,430 73,129 628,800

22,806,461 28,855,117 21,760,872 8,514,247 10,154,644 36,474 684,351 182,823 1,361,341

Total

40 ,469,312

45,136,521

8,750,497

94,356,330

Year 2007 ( in EUR )

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20.

20. Net financial expenses ( in EUR ) Financial revenues without currency differences Financial revenues on the basis of profit shares Financial revenues from loans giv en Financial expenditures without currency differences Financial expenditures from impairment and write-offs of investments Financial expenditures from financial liabilities currency differences from financing Negative currency differences Positive currency differences Net financial expenditures

2008

2007

8,466,923 8,236,604 230,319

11,440,156 11,222,754 217,402

(30,103,230) (15,608,816) (14,494,414)

(15,512,862) (3,692,345) (11,820,517)

(6,509) (7,125) 616

199 (172) 371

(21,642,816)

(4,072,507)

The net financial expenditure increased by EUR 17,570,309 compared to last year. The main increase was in financial expenditure from impairment losses of financial investments, namely from the impairment of investment in the controlled company Jadranska pivovara d.d. totalling EUR 14,126,598 and from the impairment of other investments of EUR 1,482,218. Financial expenditures for interests have also increased: in 2008 they equalled EUR 14,494,414 while the figure in 2007 was EUR 11,820,517.

21. Revenue tax ( in EUR )

2008

2007

Current tax Deferred tax

(2,681,313)

892,715 1,410,059

Total

(2,681,313)

2,302,774

2008

2007

Profit and loss before taxation

(8,775,370)

14,450,841

Tax, paid according to v alid tax rate: Revenue tax, calculated according to 22 % or 23 % tax rate Correction of rev enue to granted revenues tax level Non-recognized revenue by tax Tax base I

(1,930,581) (8,252,303) 16,429,848 (597,825)

3,323,693 (6,149,517) 5,630,731 13,932,055

Changes to the tax base Tax base II

(8,878,732) (9,476,557)

(9,017,203) 4,914,852

Income tax reliefs Tax base III

(9,476,557)

(1,033,483) 3,881,369

-

892,715

( in EUR )

Tax

The deferred tax, which influences profit and loss, is presented in the table of the dynamics of long-term deferred tax receivables (note 7) and in the table of the dynamics of long-term deferred tax liabilities (note 16. B).

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In 2008, the company declared to the tax office a loss of EUR 9,476,557. From this figure, it calculated deferred tax receivable at a 20 % rate of EUR 1,895,311 which will be settled from taxable revenues in the forthcoming years. A decrease in tax base in 2008 amounting to EUR 8,878,732 refers to the effects of transition to the new manner of accounting when taking up IFRS totalling EUR 9,325,762, while the increase influences previously established tax relieves of EUR 447,030.

The authorities can check operations of a business and additional tax has to be paid as a result, past interest or penalties which have to do with the revenue tax or other taxes and contributions, anytime within five years when the tax is levied. The company management does not know of any circumstances, which could represent significant liabilities, which would result in this.

22. Exchange rate differences diff erences Exchange rate differences from operations and financing, considered in the profit and loss statement are as follows: ( in EUR )

2008

2007

Currency differences - of operating Currency differences - in financing

(169) (6,509)

(962) 199

Total

(6,678)

(763)

2008

2007

12,867,445

18,523,347

8,559,229 66,859 (782,269) 123,093 169 7,967,081

(892,715) 8,463,896 50,351 684,351 154,286 962 8,461,131

(452,328) (3,695,518) 1,782,450 (2,365,396)

(1,867,239) (1,536,300) 3,376,914 (26,625)

18,469,130

26,957,853

23. Cash flow from operations ( in EUR )

Expl. note

Operating profit of the period Adjustments for: Tax Depreciation of p roperty, plant and equipment Amortization of intangible fixed assets Write-offs of fixed assets Net movement in reservations Currency differences from loans Changes of reverse capital Inventories and non-current assets for sale Operating and other receivables Operating and other liabilities Cash made from operation

Pivovarna Laško Group and Pivovarna Laško, d. d.

20 2.3 1

21

7.8 9.12 15.16.17

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24. Reporting in segments 24. A. Business segments Year 2008 Beer

Other beverages

Other

Total

Net sales revenues by segments Revenues among segments

83,420,281 -

1,192,200 -

23,851,369 -

108,463,850 -

Net sales revenues

83,420,281

1,192,200

23,851,369

108,463,850

9,175,445

(764,647)

4,456,647

12,867,445 21,642,816 (8,775,369) 2,681,313 (6,094,056)

Assets by segments

461,406,839

1,275,209

-

462,682,048

Liabilities by segments Investments

287,110,306 8,973,913

-

8,218,046

287,110,306 17,191,959

7,238,854

341,822

1,045,412

8,626,088

Beer

Other beverages

Other

Total

Net sales revenues by segments Revenues among segments

78,714,725 -

4,399,162 -

25,498,496 -

108,612,383 -

Net sales revenues

78,714,725

4,399,162

25,498,496

108,612,383

Operating profit and loss Financial revenues/expenditures (net) Profit and loss before tax Tax Profit and loss of accounting period

16,600,876

(766,721)

2,689,192

18,523,347 (4,072,507) 14,450,840 (2,302,773) 12,148,067

Assets by segments

500,501,893

2,150,320

-

502,652,213

Liabilities by segments Investments

271,315,692 11,313,129

-

-

271,315,692 11,313,129

5,818,289

341,822

2,354,136

8,514,247

( in EUR )

Operating profit and loss Financial revenues/expenditures (net) Profit and loss before tax Tax Profit and loss of accounting period

Expenses without cash flow as consequence

Year 2007 ( in EUR )

Expenses without cash flow as consequence

Sales in geographical sections are described in note 24. B.

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24. B. Geographical Geographical segments ( in EUR )

2008

2007

99,505,889 8,957,961

98,668,808 9,943,575

Total

108,463,850

108,612,383

Assets Slovenia Foreign market

455,939,057 6,742,991

497,328,920 5,323,293

Total

462,682,048

502,652,213

Investments Slovenia Foreign market

17,095,816 96,143

11,257,369 55,760

Total

17,191,959

11,313,129

2008

2007

(6,094,056) 8,742,953

12,148,067 8,747,431

(0.70) (0.70)

1.39 1.39

Net sales revenue Slovenia Foreign market

25. Revenue per share ( in EUR ) Profit / loss Weighed number of issued ordinary shares Net profit per share Adjusted net profit per share

Net revenue per share is calculated with distribution of net revenue, which belongs to the shareholders, with weighed average number of shares, which are on the market during the year, with the exception with the average number of own shares.

26 . Dividend per share In 2007, the payment of dividends amounted to EUR 3,498,770 EUR or EUR 0.40 per share, while the figures for 2008 are EUR 8,742,384 or EUR 1 per share.

27. Financial Financial risks 27. A. Credit risk Receivables towards buyers do not represent a significant risk fro the Company, since it mostly operates with known and reliable buyers, its receivables are insured with the usual insurance instruments and it has certain limits of allowed debt for an individual buyer, based on the sales contract. It is evident from explanation 9A that the loan risk is negligible.

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27. B. B . Interest rate risk The Company has been able to party dismiss this risk in the previous years with the use of realization of a financial instrument in the form of the interest rate shield for its acquired long-term loans. With the interest rate collar the Company has protected a part of its financial liabilities from possible growth of the referential interest rate above a certain level..

( in EUR )

Amount of interest

Change in fin.

Average interest rate in %

Difference ininterest

Interest rate protection

5.72

-

-

14,494,414

-

6.72

2,533,988

(1,032,000)

15,996,402

1,501,988

4.71

(2,559,328)

-

11,935,086

(2,559,328)

7.22

3,800,983

(1,620,000)

16,675,397

2,180,983

4.22

(3,800,983)

-

10,693,431

(3,800,983)

Actual financial expenditures with respect to interest 14,494,414 Expenditures in case of interest rate increase by 1 % 17,028,402 Expenditures in case of interest rate decrease by 1 % 11,935,086 Expenditures in case of interest rate increase by 1,5 % 18,295,397 Expenditures in case of interest rate decrease by 1,5 % 10,693,431

Decrease in expenditures interest - interest

In case the interest rate is increased by 1 %, the expenses would rise in the amount of 1,501,988 EUR, and with 1,5 % for 2,180,983 EUR, if the protection of the interest rate is considered a part of the financial liabilities.

If the interest rate would decrease by 1 % or 1,5 %, then the expenses would decrease by 2,599,328 EUR or 3,800,983 EUR. 27. C. Currency risk Currency risk has been negligible with the Company's operations, since the structure of the operations with countries abroad is connected to the Euro.

27. D. Liqudity Liqudity risk On the last day of 2008 the Company had 3,481,705 EUR of due receivables towards its suppliers, which have been settled in January of 2009. At the same time it is acknowledging receivables from deposit payments in the amount of 268.383 EUR. 27. E. Cash flow risk Cash flow risk is reflected in the fair value of assets risk. The risk can be controlled with the realized financial instruments. The Company did not insure its fair value risks in 2008, that is why a risk, which is seen in the table below, is possible.

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( in EUR )

Fair value as at 12/31/2008

Balance as at 31 st Dec. 2008 Increase in price by 10 % Decrease in price by 10 % Increase in price by 5 % Decrease in price by 5 %

50,190,084 55,209,092 45,171,076 52,699,588 47,680,580

Difference Difference Difference influence on the influence to the influence on liability value of N-CI revaluation surplus for deferred tax

5,019,008 (5,019,008) 2,509,504 (2,509,504)

4,015,207 (4,015,207) 2,007,603 (2,007,603)

1,003,802 (1,003,802) 501,901 (501,901)

The calculation of risks pertains to long-term financial investment into of Mercator Business System, which represent 99.9 % of the value of financial assets intended for sale, which are evaluated according to their fair value. If an increase or a decrease of the financial investments value, which are estimated according to their fair value, occur, they are reflected in the increase or decrease of the surplus from re-valuation directly in the capital and, at the same time, with the liability for the deferred tax.

28. Conditional liabilities Contractual liablities refer to granted guarantees of EUR 2,514,710, guarantees of EUR 15,621,270, pledging of securities in the value of EUR 299,262,427, mortgage of EUR 29,357,300 and pledging real estates of EUR 2,648,178. granted guarantees of EUR 8,000,000 refer to the insurance of long-term and short-term financial liabilities of Jadranska pivovara, d. d.

The company’s debt, insured with above mentioned insurances, amounted to EUR 210,722,903 on 31 December, while the debt of EUR 33,629,208 is insured with bills.

29. Business combinations There were no business combinations in 2008.

In 2007, the acquisition of the company Delo, d. d. was carried out, which was announced by the following companies at 29 March 2007 on the basis of the permission of the Securities Market Agency: Pivovarna Laško, d. d., Radenska, d. d. and Talis, d. o. o.

Maribor. In the acquisition process, Pivovarna Laško, d. d. obtained 333,306 shares or 49.94 %, Radenska, d. d. 127,928 shares or 19.17 % and Talis, d. o. o. 20 shares or 00.003 % of all shares of the target company. After the finished acquisition, the company Pivovarna Laško, d. d. owned 500,096 shares of the target company representing 74.92 % of all shares of the target company, the company Radenska, d. d. owned 127,928 shares representing 19.17 % of all shares of the target company, and the company Talis, d. o. o. owned 20 shares representing 0.003 % of all shares of the target company. According to the takeover bid the acquirers together became the owners of 628,044 shares in total representing 94.09 % of all shares of the company Delo, d. d.

At 30 July 2007 the shareholder’s meeting of the company Delo, d. d. adopted a decision on the withdrawal of the DELR shares from the organized market. The shares were excluded from the organized market at 2nd August 2007.

In compliance with the Securities Market Act, Pivovarna Laško, d. d. received a decision by the KDD – Central Securities Clearing Corporation at 13th September 2007 on the Pivovarna Laško Group and Pivovarna Laško, d. d.

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transfer of all shares of the company DELO časopisno in založniško podjetje, d. d.

Ljubljana with the designation DELR from minority shareholders to the main shareholder Pivovarna Laško, d. d., and namely free of all rights of third or other legal facts, except of shares owned by the subsidiary companies Radenska, d. d. Radenci and Firma DEL, d. o. o. Laško.

At 12 September 2007, 39,420 shares with the designation DELR were transferred to Pivovarna Laško, d. d. After the finished subscriptions, the central register contains 667,464 subscribed shares with the designation DELR (100 %), of which 539,516 or 80.8307 % to Pivovarna Laško, d. d. 127,928 or 19.1662 % to Radenska, d. d. and 20 or 0.0029 % to Firma DEL, d. o. o.

The main shareholder Pivovarna Laško, d. d. paid all minority shareholders a severance pay totaling EUR 135.50 per share within 30 days from the notice. Due to negligible differences in the fair price of the acquirer’s net assets on the day of the acquisition and on the day of the acquisition of minority shares, the sum of positive goodwill was established together for a 100 % share.

30.

30. Receipts of the management and the employees according to individual contracts The Company is managed by the management and supervisory board, whose earnings are represented in the tables below: ( in EUR )

2008

2007

MANAGEM ENT BOARD Fixed part of receipts Variable part (stimulation)

192,000 37,934

207,728 12,401

Total

229,934

220,129

The management has one member. The managing director of the company is Mr. Boško Šrot, who was appointed to this position by the supervisory board of the Company on 29.8.2005 for a 5 year mandate, starting on 12.11.2005. 75 % of the salary was paid in cash and 25 % in the Company's shares.

On the basis of individual contracts, 8 employees are receiving a salary and 75% of it is paid in cash and between 15% and 25% is paid in company's shares. ( in EUR )

2008

2007

INDIVIDUAL CONTRACTS Fixed part of receipts Other receipts (benefits)

632,406 158,538

608,499 35,800

Total

790,944

644,299

In 2008 the members of the supervisory board have received an annual working allowance in the total amount of 75.228 EUR, according to Article 30 of the Statute.

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2008

2007

SUPERVISORY BOARD Severance pays

75,228

94,044

Total

75,228

94,044

31. Operations with related related persons As the related companies are treated subsidiary, parent company, management and members of the Supervisory Board. The subsidiaries with percentages of ownership are shown on pages 12 and 13 of annual report.

Director of Pivovarna Laško, d. d. Boško Šrot together with his wife is owner of company Atka Prima, d. o. o., which has 100 % ownership in company Kolonel, d. d.

Maribor. It is owner of company Center naložbe, d. d. Maribor of 78,198 %, the latter is owner 71,006 % shares of company Infond Holding, d. d. Maribor. Director represents the company unlimited.

31. A. Prodaja povezanim družbam ( in EUR )

2008

2007

831,987 3,991 8,551,565 4,985 3,955,617

650,076 3,396 6,536,596 4,518,763

13,348,145

11,708,831

2008

2007

Radenska, d. d.

Vital Mestinje, d. o. o.

Union Group Delo, d. d.

Jadranska pivovara, d. d.

RA&LA, d. o. o. Saraj evo

2,926,114 555,690 22,516,384 15,636 1,639,288 255,893

3,434,692 725,733 23,909,352 1,650,898 309,358

Total

27,909,005

30,030,033

Radenska, d. d.

Vital Mestinje, d. o. o.

Union Group Delo, d. d.

Jadranska pivovara, d. d.

Total

31. B. Nabava pri povezanih družbah ( in EUR )

The sales and purchases are shown in gross value with charget VAT. The purchases at subsidiaries refers to the purchase of merchandise in Horeca channel.

Pivovarna Laško Group and Pivovarna Laško, d. d.

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Annual Report 2008 / Accounting Report – Pivovarna Laško, d. d.

Receivables and liabilities from sale/purchasing from associated companies ( in EUR )

2008

2007

Receiv ables Radenska, d. d.

Vital Mestinje, d. o. o.

Union Group Delo, d. d.

Jadranska pivovara, d. d.

117,473 137 839,515 4,985 2,300,706

124,824 30 528,313 3,440,608

Total

3,262,816

4,093,775

Liabilities Radenska, d. d.

Vital Mestinje, d. o. o.

Jadranska pivovara, d. d.

Union Group Delo, d. d.

RA&LA, d. o. o. Saraj evo

349,052 80,865 22,264 2,816,919 4,985 -

216,245 36,780 1,345,951 22,363

Total

3,274,085

1,621,339

The receivables to subsidiary company Jadranska Pivovara, d. d. are decreased with purchases of packaging, beer coolers and other equipment in the market.

31. C. Loans obtained from related related companies ( in EUR )

2008

2007

Radenska, d. d. Radenci Union Group Firma Del, d. o. o.

16,600,000 4,800,000 42,985

3,000,000 42,985

Total

21,442,985

3,042,985

2008

2007

Jadranska pivovara, d. d. (long-term loan) Delo, d. d. Ljubljana (short-term loan)

2,600,000

9,537,500 -

Total

2,600,000

9,537,500

2008

2007

Radenska, d. d.

Union Group Delo, d. d.

Jadranska pivovara, d. d.

2,795,925 3,054,296 674,395 189,284

1,164,969 2,181,640 626,088 150,338

Total

6,713,900

4,123,035

31. D. Loans given to related related companies ( v EUR )

Financial revenues ( in EUR )

Pivovarna Laško Group and Pivovarna Laško, d. d.

70

Annual Report 2008 / Accounting Report – Pivovarna Laško, d. d.

Financial Finan cial expenditures ( in EUR )

2008

2007

Radenska, d. d.

Union Group Jadranska pivovara, d. d.

71,277 203,420 14,126,598

408,304 91,555 3,692,345

Total

14,401,295

4,192,204

Guarantees given to associated companies ( in EUR )

2008

2007

Jadranska pivovara, d. d. (for loans from banks)

8,000,000

8,000,000

Total

8,000,000

8,000,000

In 2008 Pivovarna Laško, d. d. had no business with parent companies.

32. Events after the balance sheet had been prepared Making shares of Mercator, d. d. available On 26 January 2009, Pivovarna Laško, d. d. received a decision from the Competition Protection Office (hereinafter called UVK) authorising the realisation of the transfer of ownership and the registration of MELR shares of the company Mercator, d. d. Ljubljana when so instructed by the companies Infond Holding, d. d., Pivovarna Laško, d. d., Pivovarna Union, d. d. and Radenska, d. d. (as well as Istrabenz, d. d.) or by a third party operating on behalf of any of the above mentioned companies, if this transfer of ownership and registration of MELR shares are required for the realisation of securities transactions, unless both the purchaser and the vendor know or should know that the transaction was made contrarily to the first paragraph of Article 44 of Prevention of Restriction of Competition Act. On 27 January 2009 Pivovarna Laško also received a notice from KDD – Central Securities Clearing Corporation Ljubljana, that on the basis of the above mentioned decision of UVK, the corporation lifted the ban on dealing with the securities in question.

Appointing Audit Committee At its session of 2 March 2009, the Supervisory Board of Pivovarna Laško, d. d. appointed the Audit Committee consisting of Simon Zdolšek – Chairman, plus two members, Bojan Košak and Marko Koleša.

Swap of PILH shares for PILR shares After the conclusion of the accounting period, 29,509 PILH shares of Pivovarna Laško, d. d., were erased form the central register of KDD on 12 March 2009 and were replaced by the same number of regular no-par value PILR shares. After the registration, the central register of KDD recorded a total of 8,611,481 regular no-par value PILR shares and 136,171 PILH shares.

Pivovarna Laško Group and Pivovarna Laško, d. d.

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Annual Report 2008 / Accounting Report – Pivovarna Laško, d. d.

Operations with affiliated companies of Pivovarna Laško, d. d.

On 31 March 2009, Pivovarna Laško, d. d. had short-term loan receivables amounting to EUR 3.1 million, EUR 2.5 million of which were receivables towards affiliated companies.

On 31 March 2009, Pivovarna Laško, d. d. had EUR 164.9 million of long-term bank loans and EUR 81.9 million of short-term bank loans. In affiliated companies, Pivovarna Laško, d. d. had taken EUR 24.7 million of short-term loans.

In the first three months of 2009, Pivovarna Laško, d. d. approved a registration of a mortgage on the assets of Pivovarna Laško, d. d. to insure short-term loans amounting to EUR 15.4 million and pledged the shares of Electro Gorenjska to secure a short-term loan of EUR 5.5 million. With its receivables, the company used its insured short-term loans of EUR 3 million.

Changes in the management of Jadranska pivovara, d. d. Split On 31 March 2009, the term of the company's Director Marijan Kos ended in mutual agreement, and on 1 April 2009, Tomaž Udrih was appointed as new Director, starting a new term.

Other major events in Jadranska pivovara, d. d. Split Pivovarna Laško, d. d. is discussing and negotiating the sale of the entire share of Jadranska pivovara, d. d. Split with several potential buyers. One of the conditions for the purchase is a commitment that the potential buyer will take over all financial guarantees given by Pivovarna Laško, d. d. for the bank loans taken by Jadranska pivovara, d. d. from Splitska banka and Raiffeisen bank.

On 22 April 2009, Jadranska pivovara, d. d. presented a total of EUR 6,583,704 of longterm loans, of which EUR 1,445,926 will mature in 2009, EUR 2,270,926 in 2010, EUR 1,645,926 in 2011, EUR 1,020,926 in 2012 and EUR 200,000 in 2013. At the same time, the company has a total of HRK 7 million or EUR 938,715 of short-term loans, a half of which, HRK 3.5 million, matures on 31 August 2009, and the other half (HRK 3.5 million) on 31 October 2009.

Pivovarna Laško Group and Pivovarna Laško, d. d.

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Annual Report 2008 / Accounting Report – Pivovarna Laško, d. d.

STATEMENT OF THE MANAGEMENT The Board of Directors is responsible for preparation annual report of Pivovarna Laško Comany and non-consolidated financial statements on a way, which reflects a fair state of property and financial statements prepared according to the International Financial Reporting Standards (IFRS) and the Low of company and complying with relevant laws and regulations of Slovenian legislation.

The Board of Directors confirms the financial statements and the explanatory notes in accordance with the guidelines of the Company Pivovarna Laško for the year endend at 31 December 2008 and declares: that non-consolidated financial statements were prepared assuming that Group will be able to continue business in future, that accepted accounting policies have been used consistently and the changes in accounting policies were disclosed, that the assessments of the value each items in financial statements prepared fair and deliberate and in accordance with the principles of prudence and good manager, that non-consolidated financial statements were prepared in accordance with the legislation in force and International Financial Reporting Standards.

The Management Board is responsible for the implementation of measures which provide maintenance the value of property of Company and for the prevention and detection of fraud and other irregularities.

Laško, 20 april 2009 Pivovarna Laško, d. d.

Management Board – Director Boško Šrot

Pivovarna Laško Group and Pivovarna Laško, d. d.

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Annual Report 2008 / Accounting Report – Pivovarna Laško Group

Audited consolidated financial statements statements of Pivovarna Laško Group for the year 2008, 2008 , by IFRS CONSOLIDATED BALANCE BALANCE SHEET SHEET OF PIVOVARNA LAŠKO GROUP on 31 December 2008

( in EUR )

Expl. note

2008

2007

1 2 3 4.A 4.B 4.C 4.D 5 6 7

636,058,719 167,063,603 236,903,804 13,510,515 267,640 4,804,454 197,281,029 12,500 2,548,463 1,648,283 12,018,428

595,776,889 164,911,643 209,843,768 8,420,292 267,640 171,024,423 37,894,802 25,000 124,626 3,264,697 -

8 9 10.A 10.B 11 12.A 12.B 13

186,379,103 1,666,506 42,308,377 56,303,249 6,854,113 77,042,121 13,630 2,191,107

200,189,540 1,157,675 39,818,118 43,695,007 616,560 84,259,968 28,085,175 462,172 2,094,865

855,918

424,751

Total current assets

187,235,021

200,614,291

TOTAL ASSETS

823,293,740

796,391,180

ASSETS Non-current assets Intangible fixed assets Property, plant and equipment Investment properties Non-current investments in subsidiaries Available-for-sale financial assets Investments in associated companies Investments in possession until maturity Long-term loans Long-term operating receivables Long-term deferred tax receivables Current assets Non-current assets held for sale Inventories Short-term operating receivables Short-term receivables for overpaid income tax Short-term loans Available-for-sale financial assets Derivatives Cash in banks, cheques and cash in hand Deferred costs and accrued revenues

Pivovarna Laško Group and Pivovarna Laško, d. d.

14

76

Annual Report 2008 / Accounting Report – Pivovarna Laško Group

CONSOLIDATED BALANCE SHEET OF PIVOVARNA LAŠKO GROUP on 31 december december 2008 (continuation)

( in EUR )

Expl. note

EQUITY

2008

2007

295,977,383

322,929,993

Minority capital

16

16,756,301

21,680,486

Majority capital Share capital Capital reserves Profit reserves Revaluation surplus Net profit and loss from previou s years Net profit and loss

15

279,221,082 36,503,305 102,377,721 44,405,596 2,030,621 92,268,710 1,635,129

301,249,507 36,503,305 102,377,721 46,133,417 6,000,203 61,949,899 48,284,962

527,316,357

473,461,187

9,054,082 6,324,696 2,729,386

9,520,779 7,211,160 2,309,619 196,770,586 169,717,616 75,736 26,977,234

LIABILITIES Non-current reservations Non-current employee liabilities Non-current reservations

17 17.A 17.B

Non-current liabilities Non-current financial liabilities Non-current operating liabilities Non-current deferred tax liabilities

18.B 18.C

251,147,122 221,011,550 111,108 30,024,464

Current liabilities Current operating liabilities Current tax payment liabilities Current financial liabilities

19 19.A 19.B 19.C

261,434,013 53,175,244 1,019,224 207,239,545

263,244,981 47,261,161 5,501,732 210,482,088

5,681,140

3,924,841

Total current liabilities

267,115,153

267,169,822

TOTAL LIABILITIES TO ASSET RESOURCES

823,293,740

796,391,180

Accrued costs and deferred revenues

18 18.A

20

Explanatory notes and policies on pages 82 to 132 are an integral part of financial statements.

Pivovarna Laško Group and Pivovarna Laško, d. d.

77

Annual Report 2008 / Accounting Report – Pivovarna Laško Group

CONSOLIDATED PROFIT AND LOSS STATEMENT OF PIVOVARNA LAŠKO GROUP for period between 1 January – 31 D ecember 2008

( in EUR )

Expl. note

2008

2007

Net sales revenues Changes in inventories of products and work in progress Capitalized own products and their services Other operating revenues Costs of goods, material and services Employee benefit expenses Amortization and depreciation of intangible and tangible fixed assets Non-current reservations Write-downs of value Other operating revenues OPERATIN G PROFIT

21 21 21 21 21 21

360,028,307 10,781 62,364 13,322,327 (240,428,436) (62,097,162)

330,062,922 914,593 8,467,041 (206,100,446) (55,184,972)

21 21 21 21

(29,716,424) (144,882) (8,729,244) (6,607,458) 25,700,173

(30,822,534) (182,823) (4,538,229) (10,411,541) 32,204,011

Financial revenues Financial expenditures Share of (loss)/profit in associated companies PROFIT BEFORE TAXATION

22 22 23

11,911,828 (36,302,694) 1,259,654 2,568,961

48,956,329 (17,429,947) 10,208,041 73,938,434

Tax NET PROFIT OF ACCOUNTING PERIOD

24

1,286,621 3,855,582

(12,647,965) 61,290,469

215,824 3,639,758

2,400,588 58,889,881

0.4161 0.4161

6.7321 6.7321

Minority owners' share of the net profit Majority owners share of the net profit Profit per majority owners' share: Net profit per share Adjusted net profit per share

27 27

Explanatory notes and policies on pages 82 to 132 are an integral part of financial statements.

Pivovarna Laško Group and Pivovarna Laško, d. d.

78

-

-

-

-

-

-

Net profit of the year

Total changes in 2008

Transfer of net profit of the current year Transfer of net profit of the past year Purchase / sale of treasury shares Payment of dividends

102 ,377 ,72 1

-

-

25,6 06,794

-

-

-

-

-

-

-

-

25,6 06,794

reserves

Legal

356,168

50,706

50,706 -

-

-

-

-

-

-

305,462

treasury shares

Reserves for

(356 ,168 )

(50 ,706)

(50 ,706) -

-

-

-

-

-

-

(305 ,462 )

shares

Treasury

18,798,802

1,816,473

2,229,674 (4 13,201) -

(3,5 44,294)

-

(3,5 44,294)

-

-

(3,5 44,294)

20,526,623

reserves

Other profit

Pivovarna Laško Group and Pivovarna Laško, d. d.

Net

92,268,710

39,245,113

(341,627) 48,284,962 44,162 (8,742,384)

(8,926,302)

-

(8,926,302)

-

72,780

(8,999,082)

61,949,899

previous years

profit from

Explanatory notes and policies on pages 82 to 132 are an integral part of financial statements.

36,503,305

-

-

Changes disclosed directly in equity

FINAL BALANCE as at 31st December 200 8

-

-

-

-

102 ,377 ,72 1

reserves

-

36,503,305

ca pital

Capital

Fair value: Available-for-sale financial assets Other increases/decreases of capital components Other increases/decreases of capital components

INITIAL BALANCE as at 1st January 2008 in line with IFRS

( in EUR )

Share

1,63 5,129

(50 ,289 ,59 1)

(1 ,888 ,04 7) (48 ,284 ,96 2) (116 ,58 2) -

3,63 9,758

3,63 9,758

-

-

-

-

48,28 4,962

profit

Net

CONSOLIDATED MOVEMENT OF THE CAPITAL STATEMENT OF PIVOVARNA LAŠKO GROUP for period between 1 January – 31 December 2008

Annual Report 2008 / Accounting Report – Pivovarna Laško Group

2,030,621

-

-

(3,969,582)

-

(3,969,582)

-

9,363,123

(13,332,705)

6,000,203

surplus

Revaluation

279,221,082

(9,228,005)

(485,621) (8,742,384)

(12,800,420)

3,639,758

(16,440,178)

-

9,435,903

(25,876,081)

301,249,507

capital

owner's

Total majority

1 6,756,3 01

(33 4,76 6)

(5,81 8) (32 8,94 8)

(4 ,58 9,41 9)

215,8 24

(4 ,80 5,24 3)

(2 ,18 3,59 7)

273,3 19

(2 ,89 4,96 5)

2 1,680,4 86

capita l

Minority

TOTAL

79

295,977,383

(9,562,771)

(491,439) (9,071,332)

(17,389,839)

3,855,582

(21,245,421)

(2,183,597)

9,709,222

(28,771,046)

322,929,993

CAPITAL

st

-

-

-

-

Transfer of net profit of the past year Purchase / sale of treasury shares Payment of awards to members of the management board

Payment of dividends

102,377,721

-

-

25,606,794

-

-

-

-

-

-

-

-

-

-

25,606,794

reserves

Legal

305,462

299,874

-

-

299,874

-

-

-

-

-

-

5,588

treasury shares

Reserves for

(305,462)

(299,874)

-

-

(299,874)

-

-

-

-

-

-

(5,588)

shares

Treasury

20,526,623

7,857,692

-

-

(233,941)

8,091,633

3,544,294

-

3,544,294

3,544,294 -

-

9,124,637

reserves

Other profit

Pivovarna Laško Group and Pivovarna Laško, d. d.

Net

61,949,899

15,276,391

(3,498,770)

(35,000)

18,810,161 -

-

4,761,653

-

4,761,653

4,761,653 -

-

41,911,855

previous years

profit from

Explanatory notes and policies on pages 82 to 132 are an integral part of financial statements.

36,503,305

-

-

-

Transfer of net profit of the current year

FINAL BALANCE as at 31st December 2007

-

-

Total changes in 2007

-

-

Net profit of the year

-

-

-

-

-

102,377,721

reserves

-

36,503,305

ca pital

Capital

Changes disclosed directly in equity

Currency differences

Fair value: Available-for-sale financial assets Other increases/decreases of capital components

INITIAL BALANCE as at 1 January 2007 in line with IFRS

( in EUR )

Share

48,284,962

(26,965,581)

-

-

(18,810,161) (63,787)

(8,091,633)

56,440,382

58,889,881

(2,449,499)

(2,449,499)

-

18,810,161

profit

Net

CONSOLIDATED MOVEMENT OF THE CAPITAL STATEMENT OF PIVOVARNA LAŠKO GROUP for period between 1 January – 31 December 2007 2007

Annual Report 2008 / Accounting Report – Pivovarna Laško Group

6,000,203

-

-

-

-

-

(44,344,168)

-

(44,344,168)

-

(44,344,168)

50,344,371

surplus

Revaluation

301,249,507

(3,831,498)

(3,498,770)

(35,000)

(297,728)

-

20,402,161

58,889,881

(38,487,720)

8,305,947 (2,449,499)

(44,344,168)

284,678,844

capital

owner's

Total majority

21,680,486

(223,770)

(223,770)

-

-

-

3,171,252

2,400,588

770,664

-

770,664

18,733,004

capita l

Minority

TOTAL

80

322,929,993

(4,055,268)

(3,722,540)

(35,000)

(297,728)

-

23,573,413

61,290,469

(37,717,056)

8,305,947 (2,449,499)

(43,573,504)

303,411,848

CAPITAL

Annual Report 2008 / Accounting Report – Pivovarna Laško Group

CONSOLIDATED CONSOLIDATED CASH FLOW STATEMENT OF PIVOVARNA LAŠKO GROUP for the period between 1 January – 31 December 2008

( in EUR ) CASH FLOWS FROM OPERATING ACTIVITIES Cash generated from operations Income tax paid

Expl. note

25

Net cash generated from operating activities CASH FLOWS FROM INVES TING ACTIVITIES Acquisition of subsidiaries - net costs Investments in associated companies Purchase of property, plant and equipment Proceeds from sale of PPE Purchase of intangible assets Purchase /sale of available for sale financial assets Interest received Dividends

31 4.C 2 2 1 4.B,11 22 22

Net cash generated/used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Interest paid Proceeds of treasury shares Decrease of Equity Proceeds from borrowings Repayments of borrowings Dividends paid to Company's sherholders

22 15 18.19 18.19 15

Net cash used/generated in financing activities NET DECREASE / INCREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at the begining of the year Cash and cash equivalents at the end of the year

13 13

2008

2007

56,665,974 (13,069,652)

62,472,960 (5,587,151)

43,596,322

56,885,809

(3,544,800) (59,365,842) 2,105,749 (2,755,332) 563,521 5,257,457 7,914,024

(67,795,900) (36,312,777) (25,562,235) 509,631 (502,114) (31,717,051) 1,507,661 47,051,637

(49,825,223)

(112,821,148)

(26,367,303) (50,706) (2,602,616) 1,270,684,221 (1,226,267,121) (9,071,332)

(17,349,149) (299,874) 372,310,662 (294,974,240) (3,498,770)

6,325,143

56,188,629

96,242

253,290

2,094,865 2,191,107

1,841,575 2,094,865

Explanatory notes and policies on pages 82 to 132 are an integral part of financial statements.

Pivovarna Laško Group and Pivovarna Laško, d. d.

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Annual Report 2008 / Accounting Report – Pivovarna Laško Group

EXPLANATORY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS GENERAL INFORMATION The main activities of the Pivovarna Laško Group (the Group) are: production of beer, mineral and spring waters, soft drinks and syrups for the production of beverages, distilled spirits, wholesale service and newspaper publishing activity.

Laško Brewery, d. d. is a parent company of Pivovarna Laško Group with headquarters in Slovenia: Trubarjeva ulica 28, 3270 Laško, Slovenija and subsidiary company of Infond Holding, d. d. Maribor, which owned 52.97 % shares of Pivovarna Laško, d. d.

Director of Pivovarna Laško, d. d. Boško Šrot together with his wife is owner of company Atka Prima, d. o. o., which has 100 % ownership in company Kolonel, d. d.

Maribor. It is owner of company Center naložbe, d. d. Maribor of 78,198 %, the latter is owner 71,006 % shares of company Infond Holding, d. d. Maribor.

The Group’s ordinary shares are quoted on the Ljubljana Stock Exchange under the designation “PILR”. The Group’s share capital totals EUR 36,503,304.96 representing 8,747,652 ordinary freely negotiable registered no-par value shares. No limitations for the payment of dividends and other equity payments exist.

The Group operates on the basis of the unlimited business operation assumption.

The consolidated financial statements were approved at 29th April 2008 by the company's Management Board.

ACCOUNTING POLICIES In the year 2008 the same accounting policies were applied as in the preceding years, except in tangible fixed assets (immovable property) and investment property. Tangible fixed assets had been valued in the past according to the cost model, whereas in 2008 the revaluation model was used. The value of immovable property was adjusted to fair value. The effect of revaluation amounted to EUR 11,183,116. Also in 2008, the model for valuation of investment property changed. In the past, the cost model had been used, whereas in 2008 the fair value model was applied. An appraisal was carried out along with revaluation adjustment to fair value. The effect of revaluation of investment property in 2008 amounted to EUR 5,430,057.

The main accounting policies used in the preparation of these consolidated financial statements are indicated in the continuation: 1. Base for the preparation of the report The consolidated financial statements have been compiled in compliance with the International Financial Reporting Standards (IFRS) a) Standards and Interpretations effective in the current period The following amendments to the existing standards issued by the International Accounting Standards Board and interpretations issued by the International Financial Reporting Interpretations Committee are effective for the current period: Pivovarna Laško Group and Pivovarna Laško, d. d.

82

Annual Report 2008 / Accounting Report – Pivovarna Laško Group

Amendments to IAS 39 „Financial Instruments: Recognition and Measurement” and IFRS 7 „Financial Instruments: Disclo Disclosures” sures” Reclassification of financial assets (effective on or after 1 July 2008).

The adoption of these amendments to the existing standards and interpretations has not led to any changes in the Company’s accounting policies. b) Standards and Interpretations Interpretations in issue not yet adopted At the date of authorisation of these financial statements the following standards, revisions and interpretations were in issue but not yet effective: IFRS 8 “Operating Segments” (effective for annual periods beginning on or after 1 January 2009), IFRS 1 (revised) “First“First -time Adoption of IFRS” (effective for annual periods beginning on or after 1 January 2009), Amendments to IFRS 1 “First“First -time Adoption of IFRS” and IAS 27 “Consolidated and Separate Financial Statements” – Cost of investment in a subsidiary, jointly-controlled entity or associate (effective for annual periods beginning on or after 1 January 2009), Amendments to various standards and interpretations resulting from the Annual quality improvement project of IFRS IFRS (IAS 1, IFRS 5, IAS 8, IAS 10, IAS 16, IAS 19, IAS 20, IAS 23, IAS 27, IAS 28, IAS 29, IAS 31, IAS 34, IAS 36, IAS 38, IAS 39, IAS 40, IAS 41) primarily with a view to removing inconsistencies and clarifying wording (most amendments are to be applied for annual periods beginning on or after 1 January 2009), Amendments to IAS 32 “Financial Instruments: Presentation” and IAS 1 “Presentation of Financial Statements” – Puttable financial instruments and obligations arising on liquidation (effective for annual periods beginning on or after 1 January 2009), IAS 1 (revised) “Presentation of Financial Statements” – A revised presentation (effective for annual periods beginning on or after 1 January 2009), IAS 23 (revised) “Borrowing Costs” (effective for annual periods beginning on or after 1 January 2009), Amendments to IFRS 2 “Share“Share-based Payment” – Vesting conditions and cancellations (effective for annual periods beginning on or after 1 January 2009), IFRIC 11 “IFRS 2 – Group and Treusary Share Transactkions” Transac tkions” (effective for annual periods beginning on or after 1 March 2008, IFRIC 12 “Service Concession Arrangements” adopted by the EU on 25. March 2009 (effective for anuall periods beginning on or after 30 March 2009), IFRIC 13 “Customer Loyalty Programmes” Programmes” (effective for annual periods beginning on or after 1 July 2008), IFRIC 14 “IAS 19 – The limit on a Defined Benefit Assets, Minimum Funding Requirements and their Interaction” (effective for annual periods beginning on or after 1 January 2009).

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The adoption of these amendments to the existing standards and interpretations has not led to any changes in the Company’s accounting policies. c) Standards and Interpretations issued by IASB but not yet adopted by the EU At present, IFRS as adopted by the EU do not significantly differ from regulations adopted by the International Accounting Standards Board (IASB) except from the following standards, amendments to the existing standards and interpretations, which were not endorsed for use as at 3 March 2009: IFRS 3 (revised) “Business Combinations” (effective for annual periods beginning on or after 1 July 2009), IFRS 1 (revised) “First“First-time Adoption of IFRS” (effective for annual periods beginning on or after 1 January 2009), Amendments to IFRS 7 ““Financial Instruments Disclosures” – Improving disclosures about financial instruments (effective for annual periods beginning on or after 1 January 2009), Amendments to IAS 27 “Consolidated and Separate Financial Statements” (effective for annual periods beginning on or after 1 July 2009), Amendments to IAS 39 “Financial Instruments: Recognition and Measurement” - Eligible hedged items (effective for annual periods beginning on or after 1 July 2009), Amendments to IAS 39 „Financial „ Financial Instruments: Recognition and Measurement” and IFRS 7 „Financial Instruments: Disclosures” Reclassification of financial assets, effective date and transition (effective on or after 1 July 2008), Amendments to IFRIC 9 “Reassessment to Embedded Derivates” and IAS 39 “Financial Instruments; Ins truments; Recognition and Measurement” – Embedded Derivates (effective for annual periods ending on or after 30 June 2009), IFRIC 15 “Agreements for the Construction of Real Estate” (effective for annual periods beginning on or after 1 January 2009), IFRIC IFRIC 16 “Hedges of a Net Investment in a Foreign Operation” (effective for annual periods beginning on or after 1 October 2008), IFRIC 17 “Distributions of NonNon - Cash Assets to Owners” (effective for annual periods beginning on or after 1 July 2009), IFRIC IFRI C 18 “Transfers of Assets from Customers” (effective for transfer of assets from customers received on or after 1 July 2009).

The Group anticipates that the adoption of these standards, amendments to the existing standards and interpretations will have no material impact on the financial statements of the Company in the period of initial application.

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At the same time, hedge accounting regarding the portfolio of financial assets and liabilities, whose principles have not been adopted by the EU, is still unregulated.

According to the entity’s estimates, application of hedge accounting for the portfolio of financial assets or liabilities pursuant to IAS 39: “Financial Instruments: Recognition and Measurement”, would not significantly impact the financial statements, if applied as at the balance sheet date.

2. Consolidation Subsidiary companies in which the Group’s indirect or direct equity is larger from a half of voting rights or can in any other way influence operation, are consolidated. They are consolidated in the Group’s statements from the day when the Group has taken 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.

Impairment of long-term investment in Jadranska pivovara, d. d. is also eliminated. At the same time, valuation of capital assets of Jadranska pivovara, d. d. was performed, which resulted in the impairment of capital assets in this company. Impairment of underlying assets in Jadranska pivovara, d. d. is included in the consolidated financial statements. For the purpose of the provision of consistent and correct data for the needs of the Group’s consolidation and financial reporting, accounting policies 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 a 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 purchase price is lower from the fair value of the acquired undertaking’s net assets, the difference is recognized directly in the profit and loss statement.

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 profit and loss statement.

3. Composition of affiliates Pivovarna Laško, d. d. is in majority own of company Infond holding, d. d. Maribor from 24 December 2008, when it obtained the majority (52,94 %) ownership of company. Because of the deprivation of voting rightscompany Infond holding d. d. did not make a consolidated financial statements.

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

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Activity of the company

Country

Percent of holding / voting rights

Slovenia

92.56 %

121,157,626

4,872,961

Slovenia Croatia Slovenia

97.56 % 99.10 % 96.92 %

129,380,360 12,096,326 3,391,887

5,820,587 (5,932,944) 53,250

Delo, d. d.

production of beverages production of beer and beverages beer production production of beverages paper and publishingactivity

100.00 %

34,606,478

4,391,434

RA&LA, d. o. o.

Firma Del, d. o. o.

wholesale beer production

Slovenia Bosnia and Herzegov.

Slovenija

100.00 % 100.00 %

171,750 50,450

1,160 1,732

production of beer and beverages

Kosovo

39.55 %

12,147,798

(2,841,491)

Company name SUBSIDIARIES Radenska, d. d.

Union Group Jadranska pivovara, d. d.

Vital Mestinje, d. o. o.

Value of total equity in EUR

Profit/loss of year 2008

ASSOCIATED COMPANY Birra Peja, a. d. Peć

Pivovarna Laško, d. d., Trubarjeva 28, Laško, cosist the consolidated annual report for parent company and for subsidiaries in Pivovarna Laško Group. Due to material irrelevance the companies Firma Del, d. o. o. and RA&LA, d. o. o. from Sarajevo shall not be consolidated.

The consolidated annual report of Pivovarna Laško Group is in sight on headquarters Trubarjeva 28, Laško.

4. Recognition of revenues Revenues are recognized on the basis of the sale of products, services and merchandize, and their acquisition by customers (without VAT and excise duty), expected complaints, rebates and discounts, and elimination of sale within the Group. Sales revenues are recognized when significant risk and benefits of goods ownership are transferred from the seller to the customer.

Group revenues is 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 realized revenues are recognized on the following bases: Interest receivable – is recognized when it appears except if doubt in the recovery exists when the sum is charged against a replacement value. From then on, interest receivable is recognized on the basis of an interest rate serving for discounting of future cash flows.

Revenues from dividends – when the Group receives the right to obtain payments from dividends.

5. Investments in associated companies Investments in associated companies are accounted for on the basis of the equity method. Associated companies are those companies in which the Group holds between 20 % and 50 % of voting power, and significantly influences their business operation but does not control it.

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In compliance with IAS 28, an investment in an associated company is accounted for at the equity method from the date when it becomes an associated company. Under the equity method, the investment is initially recorded at cost and the carrying amount is subsequently increased or decreased in order for the investee’s share of the profit or loss of the company, in which the investor has an important influence arising after the date of the performed investment, to be recognized. The sum obtained from the net profit distribution of the company in which the investor has a significant influence decreases the carrying value of the investment. Calculations of the carrying value might also be required if the investor’s proportional equity share of another company changes, but such changes are not included in the profit and loss statement. Such changes include also those which are a consequence of the revaluation of the property, plant and equipment and investments, exchange differences and calculation of differences as a consequence of business combinations.

At the acquisition of an investment, each difference between the expense of an investment and the investor’s share in the net fair value of identifiable assets, debts and contingent liabilities of an associated company is accounted for in compliance with the IFRS 3 – Business Combinations.

Positive goodwill, related to an associated company is included in the investment’s carrying value. But amortization of this positive goodwill is not allowed and it is thus not included in the establishment of the investor’s share of the profits or losses of the associated company.

Every surplus of the investor’s share in the net fair value of identifiable assets, debts and contingent liabilities of an associated company above the expenses of an investment is excluded from the carrying value of the investment and instead it is included as revenue in the establishment of the investor’s share of profits and losses of an associated company for the period when the investment was obtained.

Company name

Activity of the company

Country

production of beer and beverages

Kosovo

Percent of holding / voting rights

Value of total equity in EUR

Profit/loss of year 2008

39.55 %

12,147,798

(2,841,491)

ASSOCIATED COMPANY Birra Peja, a. d. Peć

In 2007 Pivovarna Laško Group had 35 percent shares of the company Birra Peja, a. d.

Peć, Kosovo. In 2008 Pivovarna Union implemented a recapitalisation fo the company and increased its ownership to 39.55 percent. In 2007, the investment in the company Poslovni sistem Mercator, which is still 23.34 percent owned by Pivovarna Laško Group, was also considered as an investment in an associated company. Last year this investment was valutated using equitiy method, but due to the revocation of voting rights in 2008, it was classified among available-for-sale financial assets and valuated at fair market value.

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6. Reporting currency a) Functional and presentation 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 a functional and presentation currency of the controlling company (Pivovarna Laško, d. d.). b) Transactions and balances Foreign currency transactions are converted into the presentation currency on the basis of an exchange rate valid on the day of the transaction. Profits and losses which arise during these transactions and the conversion of the cash assets and liabilities denominated in a foreign currency are recognized in the profit and loss statement.

Currency differences arising from debt securities and other monetary financial assets recognized at the fair value are included in the profits and losses at transactions with foreign currencies. Currency differences of non-monetary items, such as shares in possession for trading, are disclosed as a part of the increase or decrease in the fair value. Currency differences at securities available for sale are included in the revaluation reserves on equity. c) Companies in the Group Profit and loss 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 an exchange rate valid at 31 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 assets a) Positive goodwill Positive 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.

Positive goodwill occurred at the acquisition of subsidiary companies is recognized in the intangible fixed assets. Positive goodwill is checked, tested for impairments and measured at the initial value decreased by cumulated impairments on annual basis.

Profits or losses at the sale of a company include the current value of positive goodwill referring to the company sold. b) Patents, trademarks and licenses Expenditures for the purchase of patents, trademarks and licenses are capitalized and amortized with a linear amortization method during their “life period” (amortization period). If life period cannot be determined, they are not amortized but instead of this only an impairment test is performed on annual basis.

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If a need for revaluation is noticed, the value of intangible fixed assets must be estimated and they have to be written off from their recoverable amount.

Life period of other intangible fixed assets is from 3 to 10 years.

8. Financia Financial cial assets The Group classifies its investments into the following categories: financial assets at the fair value through the profit and loss, loans and receivables, investments in possession until maturity, and available-for-sale financial assets. The classification depends on the purpose from which an investment was obtained. a) Financial assets at the fair value through the profit and loss The category is divided in two subcategories: financial assets intended for trade, and assets determined at the fair value through the profit or loss at the recognition.

Investments obtained with the purpose to create profit from short-term (less than a year) fluctuations in the price are classified as trade-intended and fall into the short-term assets. These assets are measured at the fair value, while realized/unrealized profits and losses arising from changes in the fair value are included in the profit and loss statement in the period when they arose. In 2007 and 2006, the Group had no investments within this category. b) Loans and receivables Loans and receivables are derivatives with fixed or determinable payments which are not listed on an operating market. They are included in the short-term assets unless for maturities longer from 12 months after the balance sheet date. In this case, they are classified in the long-term assets. In the balance sheet, loans and receivables are disclosed among the operating and other receivables at the amortized cost with the consideration of the effective interest rate. c) Investments Inves tments in possession until falling due Investments with fixed maturity, which the Company Management intends to keep until the maturity are classified as investments in possession until falling due and are included in the long-term assets. d) AvailableAvailable-forfor-sale financial assets Available-for-sale financial assets are those derivatives which are marked as available for sale or are not classified in any of the remaining categories. They are also valued at the fair value if it can be established. Those financial assets, the fair value of which cannot be established, are valued at the cost. The effects of revaluations increase or decrease the equity value – surplus of the revaluation, but the effects of impairment of financial assets increase financial costs.

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

Initially, they are recognized at the 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 the profit and loss. Revaluation of the financial instrument which is used for the cash flow protection is recognized directly in the 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 profit and loss statement.

The Group uses derivatives for the protection against the exposure to the currency and interest rate risks, and for the cash flow protection against risk. Integrated derivatives must be separated from a host contract and accounted for as a derivative only if the economic features and the 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 enough for the determination of the derivative, and if a complex instrument is measured at the fair value through the profit and loss statement.

10. Property, plant and equipment equipment Tangible fixed assets include property, equipment and small tools. In the year 2008 the same accounting policies were applied as in the preceding years, except in tangible fixed assets (immovable property). Tangible fixed assets had been valued in the past according to the cost model, whereas in 2008 the revaluation model was used. Immovable property was valued in 2008 according to the revaluation model, unlike in the preceding years in which the cost model had been applied.

On 31 December 2008 an appraisal of properties and buildings was carried out and the effect of revaluation in the amount of EUR 11,183,116 affected the increase of tangible fixed assets, the surplus arising from revaluation in the amount of EUR 8,946,493 and the increase of the deferred tax obligation in the amount of EUR 2,236,623. The equipment and small tools are valued according to the cost model, decreased by depreciation and impairment.

The equipment and small tools are valued according to the cost model, decreased by depreciation and impairment. Depreciation is accounted for on the basis of a linear method. The expected functional life periods by individual groups of assets are as follows: Property Production plants and machines Computer equipment Motor vehicles Other equipment

20 - 40 years 4 - 10 years 2 - 4 years 4 - 8 years 3 - 7 years

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Property is not depreciated, as its life period is expected to be unlimited. Just as well are the assets in acquisition not depreciated until the time when they are given for use.

Where the carrying value of an asset is higher from the estimated recoverable amount, the asset is revalued to the estimated recoverable amount.

Profits and losses occurred at the disposal of property and equipment are established on the basis of their carrying value and influence the operating profit and loss. Reusable containers (barrels, bottles and crates) are disclosed among property, plant and equipment with the consideration of their life period of 3 or 4 years.

The expenses of financial liabilities for the financing of investments in property, plant and equipment are disclosed among expenditures at the time of occurrence.

11. Investment property Investment property is property (plots of land and buildings – or parts of buildings – or both) in the Group’s possession or financial lease with the purpose to obtain rents or increase the value of the asset. Investment property is not used for the production and sale of goods or services and for administrative purposes of for ordinary operation.

A piece of land and building brokered for the increase of the long-term investment’s value or given for operating leasing and not for sale in the near future is determined as an investment property. An investment property is recognized as an asset only if it is probable that future economic benefits will flow into the company and if the cost can be reliably measured.

To measure investment property the Group transferred in 2008 from the cost model to the fair value model. On 31 December 2008 the value of investment property was adjusted to fair value based on the appraisal carried out by certified appraisers. The effect of revaluation in the amount of EUR 5.430.057 increases other operating revenues.

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.

12. Impairment of financial resources Resources which have an unlimited life period and are not amortized, are annually tested for impairment. Resources which are amortized are checked for impairment whenever events or circumstances point to the resource being impaired. A loss due to an impairment is recognized in the amount for which the carrying value of the resource exceeds its replacement value.

For the purposes of the impairment establishment, resources are distributed in smaller units for which cash flows, independent from other units (money-creating units) can be determined. Positive goodwill value is annually estimated according to the impairment needs.

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13. NonNon-current assets for sale Non-current assets (group for disposal) for sale are those non-current assets, the carrying value of which is expected with reason to be settled predominantly by means of sale within the following twelve months and not by means of subsequent use. Noncurent assets classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell.

14. Inventories Inventories are accounted for at the lower of the cost and the realizable value by using the average price method. The value of finished products and production in course includes the total production costs, which include the production material costs, work production costs, depreciations, services and other production costs. The net realizable value is estimated on the basis of the selling price in ordinary operation less the costs of finishing and sale.

15. Operating receivables Operating receivables are initially recognized at their fair value and subsequently measured at their amortized cost by using the valid interest method less the impairment. Operating receivables impairment is formed when the Group expects not to be able to recover the entire sum of the amounts due. The amount of impairment represents the difference between the carrying value and the current value of the (expected) estimated future cash flows, discounted at the valid interest rate. The sum of impairment is recognized in the profit and loss statement.

16. Cash and cash equivalents For the purposes of the cash flow statement, cash and cash equivalents comprise the cash in hand, bank sight deposits and investments in money market instruments without exceeding the bank account limits. Bank account limits are included among financial liabilities in the balance sheet.

17. Reservations Reservations Reservations are recognized when the Group presents the legal liability as a result of the past events for which there is a big possibility that the Group will have to settle this liability, and the liability can be reliably assessed. Reservations must not be formed to be used as the cover for future operating losses.

18. Reservations for severance pays and longlong-service awards The net liability of the Group as regards the long-term benefits with respect to the years of service, excluding pension schemes, is a sum of earnings which the employees should get as replacement for their service in the current and present periods. The liability is charged with the use of the method of the expected importance of units and is discounted on the current value.

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19. Deferred Def erred taxes A deferred tax is disclosed as a whole with the consideration of the liabilities method on the basis of the temporary differences among the tax based on the assets and liabilities and the disclosed sums of the tax in consolidated 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.

Deferred tax is calculated with the use of the tax rate (and legislation), which is defined by the law and valid on the day of the balance sheet and is expected to be used when a deferred tax receivable will be realized or deferred tax liability settled.

A deferred tax receivable is recognized if there is a probability that in the future, tax profit will be available from which it will be possible to use temporary differences.

Deferred tax is disclosed on the basis of temporary differences arising from investments in subsidiary companies unless 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.

20. Operating liabilities Operating liabilities are supplying credits for the purchased goods or purchased services and liabilities toward the employees, state, owners and others. They also include an accrued costs and deferred revenues. Liabilities are recognized in the accounting ledgers if there is a probability that their settlement will give rise to a decrease in the factors enabling economic benefits, and the settlement sum can be reliably assessed. Initially, they are recognized at their fair value and are subsequently assessed at their amortized cost with the use of the valid interest rate method.

21. Financial liabilities Financial liabilities are recognized at the fair value at their occurrence excluding the transaction expenses arisen during this. Within the following periods, financial liabilities are assessed at their amortized value with the use of the valid interest rate method. Each difference between the receipts (without the transaction expenses) and liabilities is recognized in the profit and loss statement in the period of the entire financial liability.

22. Share capital capital Ordinary shares are classified in equity. Transaction expenses directly linked with the issue of new shares, which is not related to the company acquisition, are disclosed as decrease in capital. Any surplus of the receipted paid sum’s fair value over the carrying value of the issued new shares is recognized as a paid equity surplus.

23. Treasury shares If the parent company or its subsidiary companies buy equity in the parent company, the paid sum including the transaction expenses excluding tax is subtracted from the entire equity as own shares (treasury shares) all until these shares are withdrawn, reissued or sold. If treasury shares are later on sold or reissued, all receipted payments excluding transaction expenses and related tax effects are included in equity.

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24. Dividends Until being approved at the shareholder’s meeting, the envisaged dividends are dealt with as deferred profits.

25. Segment reporting Operating segments produce/perform products or services which are different from the products and services of other segments by risks and benefits. Regional (geographical) segments guarantee products or services within a specific economic environment which is prone to risks and benefits which differ from risks and benefits in other economic environments.

26. Tax policy Tax statements of Pivovarna Laško, d. d. and companies of the Pivovarna Laško Group in Slovenia are drawn up in compliance with the international financial reporting standards as adopted by the EU and the Corporate Income Tax Act. In 2008 some of the provisions of the Corporate Income Tax Act were modified. The amendments included in the accounting of the corporate income tax for 2008 are: changes in relation to withholding tax, investment relief, interest expense among related parties, expansion of donation beneficiaries.

The corporate income tax level is 22 %. The company’s tax base is the profit as the surplus of revenue over expenses, where the basic criteria for recognition, or inclusion, in a tax statement are still the revenues and expenses as shown in the income statement, defined pursuant to the legislation or accounting standards.

In 2008, the investment relif for investments in equipment and intangible assets has been reestablished, but in negligible amount for company Pivovarna Laško, d. d.

The company must provide documentation on transfer prices; general documentation can be common to a group of associated entities as a whole.

27. Assesment of the value each items On the basis of assessments of management, appraisers, actuars and other experts were assessed following assets and liabilities: immovable property, investment property, financial assets and reservations. Becouse of assessments there are some uncertainly regarding the attainment of specific assumptions, used at valuation.

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FINANCIAL RISK MANAGEMENT Financial risk factors The Group is exposed to various risks as result of its operation: credit risk, interest rate risk, currency risk, solvency risk, etc. The entire risk management activity in the Group is focused on the unpredictability of financial markets and is trying to minimize potential negative effects on the Group’s financial performance. The Group’s financial risk management is not run by a special working body, but it is managed by special financial services. a) Credit risk Credit risks comprise all risks which influence the Group’s economic benefits to be decreased due to payment incapacity of our business partners (customers) and failure to meet their contractual liabilities. In this purpose we regularly supervise and monitor financial trade receivables, the wholesale dealers as well as retail sale customers. In most cases we operate with known and verified business partners whose credit standing we monitor simultaneously.

Our receivables are insured with ordinary instruments for the insurance of receivables, such as: bill of exchange, bank guarantee and mortgage. We also use the method for the determination of the open debt limit of individual customer with respect to the contract of sale. We manage the credit risk also by the insurance of a part of receivables on foreign markets with the company SID – Prva kreditna zavarovalnica d. d., Ljubljana.

We simultaneously monitor receivables on business partners and on maturity, and contribute to the improvement in the payment discipline of our customers by means of simultaneous recovery, default interest charging, written reminders and also court recovery of matured receivables. With buyers where insurance can not be guaranteed business runs on the basis of advance payments. We manage credit risks, which thus they present a low exposure level to the Group. b) Interest rate risk Interest rate risk presents a possibility of a change in the amount of the interest rate on the financial market, predominantly due to the raise of long-term credits bound by variable interest rate (EURIBOR). In case of raised long-term loans, the Group has partially eliminated the exposure to changes in interest rates already in the past years by using a derivative in the form of interest protection. Approximately a quarter of longterm as well as short-term credits is insured with the interest rate collar method against the potential growth in the reference interest rate above a certain level. In 2008, the reference interest rate continued to show a growth trend, but it slowed down in the second half of the last year, especially towards the end of the year, and even reduced in the past months. We estimate that the exposure of the Group towards interest rate risks is still moderate and manageable. We estimate that the Group’s interest rate risk exposure is moderate.

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c) Currency risk In the Group’s operation in 2007, currency risk was insignificant, as the structure of our transactions with the foreign countries was predominantly bound by the euro both in the purchase and sale segment as well as the financial segment. We estimate that due to the insignificance of transactions in the foreign currency, the currency risk at other currencies is low. d) Solvency risk Solvency risk arises from the possibility of a deficit in available financial resources and consequently an incapacity of a Group to settle its liabilities, both the current operating liabilities as well as its own financing liabilities, within agreed time periods. The Pivovarna Laško Group’s liquidity risk has been low and stable since the beginning.

With the help of appropriate credit lines for short-term cash flow regulation and reasonably fast access to required resources of financing, the Group completely manages the liquidity risk. At the end of last year the borrowing provisions deteriorated because of increased securities which were demanded for loans. Due to the downward trend of the reference rate on the EU’s financial market, commercial banks tend to make use of equity price fixing in the form of fixed rates. Nevertheless, the Group still has a chance of obtaining financial means for current business and a chance to use revolving credits on the short-term financial market.

We have a possibility to obtain a large sum of financial resources on the short-term financial market by using the revolving loans. We also make use of the distribution of surpluses and deficits of financial assets within the Group in a short period of time. All large financial outflows are planned in advance and covered with financial inflows, either operating or with respect to the use of short-term resources of financing. In the same way we manage also the long-term solvency risk. We estimate that on the basis of activities carried out with respect to the solvency, the solvency risk exposure is extremely low.

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EXPLANATION EXPLANATIONS IONS TO CONSOLIDATED FINANCIAL STATEMENTS 1. Intangible assets Year 2008 Trademarks

Positive goodwill

Licenses and other IFAs

Property rights

127,772,491

3 4,85 4,0 83

6,050,354

-

-

1,026,958 (180,318)

127,772,491

3 4,85 4,0 83

1 st january 2008

-

Amortization in the year Revaluation T ransfer from / to Disposals

-

( in EUR )

IFA in acquisition

Total

53,765

369,580

169,100,273

1 80,318

1 ,883,017 -

2,909,975 -

811,711 (142,903) (19,469) 7,546,333

2 34,083

(914,980 ) 1 ,337,617

(103,269) (142,903) (19,469) 171,744,607

-

4,134,865

53,765

-

4,188,630

-

508,770 14 (52,126) (19,416) 4,572,107

3,006 52,126 1 08,897

-

511,776 14 (19,416) 4,681,004

127,772,491

3 4,85 4,0 83

2,974,226

1 25,186

1 ,337,617

167,063,603

127,772,491

3 4,85 4,0 83

1,915,489

-

369,580

164,911,643

COST OF PURCHASE 3 1st December 2007 Direct gains Retrainings T ransfer from investments in progress Revaluations Disposals 3 1st December 2008 ACCUMULATED VALUE ADJUSTMENT

3 1st December 2008 CURRENT COST 3 1st December 2008 st

1 January 2008

The intangible assets are measured according to the cost model. The brand names and goodwill items represent the biggest value amongst long-term intangible fixed assets.

The value of the brand names of the Union Group amounts to 68,660,491 EUR and the value of brand names for the company Delo, d.d. is 59,112,000 EUR. In accordance with the Union Group acquisition item, the Group has recognized goodwill with a value of 25,413,597 and 9,440,486 EUR in the Delo, d. d. acquisition item.

As at 31 December 2008, a verification of fair value for goodwill was performed by an authorized auditor. The audit shows that there is no need for impairment in the collective financial statements shown in the goodwill value. In the long-term intangible fixed assets for the Jadranska Pivovara (Adriatic Brewery) there is an impairment of 142,903 EUR.

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Positive goodwill

Licenses and other IFAs

Property rights

IFA in acquisition

Total

68,660,491

2 5,41 3,5 97

4,530,037

53,765

141,443

98,799,333

-

-

254,176

-

278,158

532,334

59,112,000

9,44 0,4 86

1,340,344

-

-

69,892,830

127,772,491

3 4,85 4,0 83

50,021 (122,707) (1,517) 6,050,354

53,765

(50,021 ) 369,580

(122,707) (1,517) 169,100,273

3 1st December 2006

-

-

3,476,690

-

53 ,765

3,530,455

Amortization in the year Inclusion of the company Delo, d.d. to consolidation (1.5 .2007) Disposals 3 1st December 2007

-

-

381,275

-

-

381,275

-

-

370,905 (94,004) 4,134,865

-

53 ,765

370,905 (94,004) 4,188,630

127,772,491

3 4,85 4,0 83

1,915,489

53,765

315,815

164,911,643

68,660,491

2 5,41 3,5 97

1,053,347

53,765

87 ,678

95,268,878

( in EUR ) COST OF PURCHASE 3 1st December 2006 Direct gains Inclusion of the company Delo, d.d. to consolidation (1.5 .2007) T ransfer from investments in progress Disposals Currency differences 3 1st December 2007 ACCUMULATED VALUE ADJUSTMENT

CURRENT COST 3 1st December 2007 st

1 January 2007

2. Property, plant and equipment

Properties

Buildings

P roduction plant and equipment

31,988,230

175,957,748

409,713,323

56,397,091

18,110,832

8,919,263

701,086,487

Year 2008 ( in EUR )

Other plant and equipment

Small inventory

Capital assets in acquisition

Total

COST OF PURCHASE 3 1st December 2007 Direct gains Retraining T ransfer from investments in progress Revalutation Impairment T ransfer from / to Disposals Currency differences

-

317,636 -

739,904 -

921,487 -

3,534,412 213,500

47,525,912 (843,638)

53,039,351 (630,138)

7,063,954 6,380,687 (1,633,590) (88,862) (4,050)

13,588,716 (14,011,948) ( 1,765,827) (415,780) ( 2,905)

14,019,440 ( 3,687,112) ( 9,364,272) (2,715)

4,037,246 ( 24,604) 500 ( 3,8 09,398) (200)

5,549,697 (168,1 31) (6,616,8 41) (9)

(44,259,053) (1,950) -

(7,631,261) (7,111,133) (167,631) (20,297,103) (9,879)

3 1st December 2008

43,706,369

173,667,640

411,418,568

57,522,122

20,623,460

11,340,534

718,278,693

ACCUMULATED VALUE ADJUSTMENT 3 1st December 2007

-

94,444,851

337,031,951

43,257,107

15,665,172

843,638

491,242,719

Retraining Depreciation in the year Gains Revalutation T ransfer from / to Disposals Currency differences

-

4,738,875 (18,814,377) (29,720) 1,971

17,843,859 21,685 ( 9,040,607) 2,209

3,960,799 8,992 500 ( 3,6 94,676) 169

(132,8 76) 2,405,486 118,795 (168,1 31) (6,247,1 37) (8)

(843,638) -

(976,514) 28,949,019 149,472 (18,814,377) (167,631) (19,012,140) 4,341

3 1st December 2008

-

80,341,600

345,859,097

43,532,891

11,641,301

-

481,374,889

43,706,369

93,326,040

65,559,471

13,989,231

8,982,159

11,340,534

236,903,804

31,988,230

81,512,897

72,681,372

13,139,984

2,445,660

8,075,625

209,843,768

CURRENT COST 3 1st December 2008 st

3 1 December 2007

Tangible fixed assets include property, equipment and small tools.

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In the year 2008 the same accounting policies were applied as in the preceding years, except in tangible fixed assets (immovable property). Tangible fixed assets had been valued in the past according to the cost model, whereas in 2008 the revaluation model was used. Immovable property was valued in 2008 according to the revaluation model, unlike in the preceding years in which the cost model had been applied.

On 31 December 2008 an appraisal of properties and buildings was carried out and the effect of revaluation in the amount of EUR 11,183,116 affected the increase of tangible fixed assets, the surplus arising from revaluation in the amount of EUR 8,946,493 and the increase of the deferred tax obligation in the amount of EUR 2,236,623. The equipment and small tools are valued according to the cost model, decreased by depreciation and impairment.

The equipment and small tools are valued according to the cost model, decreased by depreciation and impairment. Depreciation is accounted for on the basis of a linear method.

Due to poor business results and a consequence of the poor financial standing, an appraisal was performed for the company Jadranska pivovara, d.d. as at 31 December 2008. The appraisal was performed by the warranted appraiser, registered at Slovenian institut of audit. As a result of these presumptions, they assessed the value of the company with the assistance of the adjusted book value method – liquidation. At this point they originated from the presumption that the company will sell their production operation to a buyer who will continue with production and employ all the workers, for which the costs of the adjusted book value – liquidation are assessed at a value of 0.

Based on the appraisal it was necessary to impair the assets of the company stated. The effect of the appraisal has a consequence especially in the impairment of tangible fixed assets for a value of 7,111,133 EUR. The current value of tangible fixed assets, which have been allocated as collateral for long-term and short term loans from domestic banks amounts to 40,616,565 EUR as at 31 December 2008.

The disposal of tangible fixed assets is represented by the sale and write-off of tangible fixed assets.

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Properties

Buildings

P roduction plant and equipment

48,489,561

138,795,171

388,058,032

49,757,511

31,971,536

4,568,352

661,640,163

-

-

2,715,850

538,322

1,537,665

21,983,527

26,775,364

-

21,548,380

15,535,128

8,562,345

-

31,038

45,676,891

15,300 (767,527) (365,956) 28,390

4,335,975 44,704 ( 3,342,236) (840,189) 4,405

9,862,525 ( 6,523,138) 64,926

2,745,570 ( 5,1 62,085) ( 44,572)

526,628 (15,925,0 06) 9

(17,485,998) (177,721) 65

44,704 (4,109,763) (28,994,095) 53,223

47,399,768

160,546,210

409,713,323

56,397,091

18,110,832

8,919,263

701,086,487

-

91,092,290

312,588,782

37,610,497

30,227,623

843,638

472,362,830

-

6,833 4,611,848

8,134,191 20,667,704

7,167,798 3,557,576

1,231,791

-

15,308,822 30,068,919

-

887,761 ( 1,794,742) 25,604 (429,264) 44,521

1,916,980 ( 6,280,698) 4,992

( 5,0 52,993) ( 25,771)

(15,794,2 42) -

-

2,804,741 (1,794,742) 25,604 (27,557,197)

-

94,444,851

337,031,951

43,257,107

15,665,172

843,638

491,242,719

47,399,768

66,101,359

72,681,372

13,139,984

2,445,660

8,075,625

209,843,768

48,489,561

47,702,881

75,469,250

12,147,014

1,743,913

3,724,714

189,277,333

Year 2007 ( in EUR )

Other plant and equipment

Small inventory

Capital assets in acquisition

Total

COST OF PURCHASE 3 1st December 2006 Direct gains Inclusion of the com pany Delo, d.d. to consolidation (1.5.2007) T ransfer from investments in progress T ransfer from investments property T ransfer on investm ents property Disposals Currency differences 3 1st December 2007

ACCUMULATED VALUE ADJUSTMENT 3 1st December 2006 Inclusion of the com pany Delo, d.d. to consolidation (1.5.2007) Depreciation in the year Impairment of assets in Jadranska pivovara, d. d.

T ransfer on investm ents property T ransfer from investments property Disposals Currency differences 3 1st December 2007 CURRENT COST 3 1st December 2007 st

3 1 December 2006

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3. Investment property

Properties

buildings

Investment in real estate gains

31 December 2007

407,328

20,212,665

-

20,619,993

Increase in the value Transfer from investments in progress Revalutation Decrease in value st 31 December 2008

171,132 578,460

430,942 (2,754,199) (662,718) 17,226,690

430,942 (430,942) -

430,942 (2,583,067) (662,718) 17,805,150

31 December 2007

-

12,199,701

-

12,199,701

Depreciation Disposals Revaluations - impairments st 31 December 2008

-

518,108 (410,050) (8,013,124) 4,294,635

-

518,108 (410,050) (8,013,124) 4,294,635

578,460

12,932,055

-

13,510,515

407,328

8,012,964

-

8,420,292

Year 2008 ( in EUR )

Total

COST OF PURCHASE st

ACCUMULATED VALUE ADJUSTMENT st

CURRENT COST st

31 December 2008 st

1 January 2008

In 2008 the Group generated 314,609 EUR in expenses and 656,981 EUR in revenues.

Real estate property investments include real estate property, which is recorded as property not used for performing primary activities but are leased by the Group. At Pivovarna Laško, d.d. the following real estate property is recorded as real estate property investments: Sports Hall Tri Lilije, The Hotel Hum, Hotel Savinja and Restaurant Grad Tabor; at Radenska, d. d. the administrative building in Radenci and business buildings in Radenci, Ljubljana, Petanjci and Sarajevo.

The real estate property investments in 2008 for the company Fructal, d. d. include: a warehouse in Split with a dimension of 667 m2, which was allocated as an asset for sale, and office space in Zagreb with a dimension of 100 m2 allocated as a fixed asset.

To measure investment property the Group transferred in 2008 from the cost model to the fair value model. On 31 December 2008 the value of investment property was adjusted to fair value based on the appraisal carried out by certified appraisers. The assessment of property values is made on the basis of different methods: comparable sales method, method of capitalization cash flow and method of costs. The purpose of use also effected on the value of separate investment property. The effect of appraisal in the amount of EUR 5,430,057 increases other operating revenues.

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Properties

Buildings

Total

31 December 2006

407,328

15,393,241

15,800,569

Inclusion of the company Delo, d. d. in consolidation (1.5.2007) Increase in the value Trasfer to TFA Transfer from TFA Decrease in value st 31 December 2007

407,328

80,159 746,554 (44,704) 4,109,763 (72,348) 20,212,665

80,159 746,554 (44,704) 4,109,763 (72,348) 20,619,993

31. december 2006

-

9,136,644

9,136,644

Transfer to TA Transfer from TFA Increase in value adjustment - depreciation Gains Disposals Revaluations - impairments st 31 December 2007

-

(25,604) 1,794,742 415,344 93,703 (66,668) 851,540 12,199,701

(25,604) 1,794,742 415,344 93,703 (66,668) 851,540 12,199,701

407,328

8,012,964

8,420,292

407,328

6,256,597

6,663,925

COST OF PURCHASE st

ACCUMULATED VALUE ADJUSTMENT

CURRENT COST st

31 December 2007 st

1 January 2007

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4. A. LongLong-term investments investments insubsidiary companies ( in EUR )

Share in cap ital

2008

2007

7,428 8,722 16,150

7,428 8,722 16,150

232,240 14,093 4,907 250 251,490

232,239 14,094 4,907 250 251,490

267,640

267,640

SHARES IN COMPANIES OF THE GROUP In Sloveina: Firma Del, d. o. o. Laško Izberi, d. o. o. Ljubljana

100 % 100 %

Abroad: RA&LA, d. o. o. Sarajevo Eurofruit Sarajevo, d. o. o.

Radenska, d. o. o. Zagreb Radenska, d. o. o. Beograd

100 100 100 100

% % % %

Total

The long-term investments in subsidiary companies are valued according to the cost model.

The financial statements of the subsidiaries, which are represented in above table are not included in the consolidation due to material insignificance.

4. B. LongLong-term investments associated companies ( in EUR )

Share in cap ital

2008

2007

Poslovni sistem Mercator, d. d. Ljubljana Birra Peja, a. d. Peć, Kosovo Slovita, d. o. o. Moskva

23.340 % 39.550 % 25.000 %

4,804,454 -

170,977,504 44,807 2,112

4,804,454

171,024,423

Total

In 2008 Pivovarna Laško d.d. sold a 30 percent share of the company Birra Peja a.d. Peć to the subsidiary Pivovarna Union at a book value of 44,807 EUR and implemented a recapitalisation of the company in the amount of 3,499,193 EUR. By this act they increased their ownership share in the stated company to 39.55 percent. The investment is valued using the equity method. The difference between the value of the investment and the percentage as a fair value of equity, the Group recognized impaired goodwill in the amount of 1,259,654 and increased other business revenues by the same amount.

The company Birra Peja a.d. Peć carried out loss in amount of 2.841.491 EUR. The value of assets on 31 December 2008 was 20.654.944 EUR and the amount of equity was 12.147.798 EUR. In 2007, the investment in the company Poslovni sistem Mercator, which is still 23.34 percent owned by Pivovarna Laško Group, was also considered as an investment in an associated company. Last year this investment was valuated using equity method, but

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due to the revocation of voting rights in 2008, it was classified among available-for-sale financial assets and valuated at fair market value.

4. C. AvailableAvailable-forfor-sale financial resources ( in EUR )

2008

2007

Other investments in shares at the cost of purchase Other investments in shares at the fair value

17,581,517 179,699,512

30,884,214 7,010,588

Skupaj

197,281,029

37,894,802

Long-term financial investments are allocated as investments for sale. For these investments, which the fair value can be reliably measured, the fair value of profit and losses is reflected directly in owner’s equity.

In 2008, the Group acquired 5.47 percent of the shares in the company Elektro Maribor in the amount of 20,184,371 EUR (Pivovarna Union, d.d.), 1,124,170 shares of the company Infond holding d.d. in the amount of 5,546,180 EUR and 59.25 percent of the shares from the company ČZP Večer, d. d. in the amount of 15.122.898 EUR (Delo, d. d.). At the end of 2008, Družba Delo, d. d. was 79.24 percent owner of the company ČZP Večer; however, the company Delo d. d. due to provision under Article 44 of the Prevention of Restriction of Competition Act, which exceeds 20 percent does not have voting rights. Due to this fact, the stated investment shall not be treated as an investment in the subsidiary and the financial statements of company Večer, d. d. are not included in consolidation financial statements of Pivovarna Laško Group.

In 2008, the group reallocated the shares of the Mercator Business System (MELR) amongst the available for sale financial assets, which have be evaluated according to fair value, despite the 23.34 percent ownership share due to the dispossession of voting rights. In 2007, the Group treated the stated financial investments as an investment in the associated enterprise and evaluated it according to the equity method. Under the heading changes in the method of evaluation, the Group reduced investments by 11,130,536 EUR in 2007. On the last day in 2007, the value of the investment amounted to 170,977.504 EUR or 194,55 EUR per share.

As at 31 December 2008, the investment MELR is once again shown according to the fair market value, which amount to 158,08 EUR on the last day of the previous year and the value of the entire investment at 138,927,185 EUR, which is for 7,329,720 EUR less than the original purchase value of the stated investment.

In addition to the stated investments, the Group shows an investment in the Insurance Company Triglav d.d. according to fair value in the amount of 6,210,545 EUR, 1,922,321 shares of the company Elektro Maribor in the amount of 15,378,568 EUR and 79,24 percent of the shares in the company Večer, d.d. in the amount of 18,981,247 EUR. It was not possible to reliably evaluate the investments according to the purchase value due to the fair value insignificant share in ownership. According to the purchase value the Group has 213,115 shares of Probanka, d.d. Maribor (6.3%) in the amount of 5,217,752 EUR, 270,648 shares in Elektro Gorenjske d.d. (1.6%) in the amount of 1,356,731 EUR,

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358,978 shares in Thermane, d. d. (13.8 %) in the amount of 3,837,454 EUR and other investments with lesser values.

available--forMovement of available for-sale financial assets ( in EUR ) st

Balance as at 1 January Changes in the year: Transfer to N-CI in associated companies (MELR) Inclusion of investments of the company Delo, d.d.

Gains Revaluation Transfer from current investments Sale st

Balance as at 31 December

2008

2007

37,894,802

179,093,093

170,977,504 45,607,253 (46,329,084) 2,892,341 (13,761,787)

(182,108,041) 4,523,873 50,355,500 623,691 12,696,788 (27,290,102)

197,281,029

37,894,802

In 2008, the Group acquired 45,607,253 EUR and disposed 13,761,787 EUR worth of available for sale financial assets. Due to the dispossession of voting rights, the Group reallocated the shares of the Business System Mercator (MELR) to available for sale financial assets. Due to the reduction in fair value, the Group revaluated the available for sail financial assets to new lower values in the amount of 46,329,084 EUR and from this the MELR investment in the amount of 32,050,319 EUR. Impairments of investments in shares which were valuated at fair value a) Impairments of investments in Elektro Maribor, d. d.

In January 2008, Pivovarna Union, d. d. bought 5.74 % of shares of the company Elektro Maribor from Infond Holding, the total value of the purchase being EUR 20,184,371. The value of the investment in the Company Elektro Maribor is based on a valuation carried out by an accredited business appraiser, registered with the Slovenian Institute of Auditors. On the basis of the valuation, an impairment of EUR 4,805,803 was carried out, which influenced an increase in financial expenditure.

The valuation of equity stake per share of Elektro Maribor, d. d. was conducted on the basis of the following steps and methods: valuation based on yield (method of discounted cash flow – entire equity procedure); valuation based on market comparisons (method of comparable companies listed on stock exchange).

Operating projections, which represent the basis for the valuation based on yield, were carried out by a certified appraiser on the basis of an analysis of the industry, past operations of the company, analysis of comparable domestic and foreign companies, and on the basis of future vision of development of both the industry and the company.

Operating projections do not envisage any restructuring of the company towards introducing new activities or changing portfolios of production programmes. No further extension investments are planned in this field – the investments in fixed assets declared Pivovarna Laško Group and Pivovarna Laško, d. d.

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in projections refer to renovation investments in the current structure of assets. In a long-term, the investments in fixed assets will level up with the depreciation. Operating projections are also based on a presumption of an additional improvement of operating efficiency – in the forecasts, the profit from operations before the depreciation is improved up to the average level of comparable foreign companies. The improvement of operating profit is mostly a consequence of improvement in the conditions of doing business with company clients. It is reflected in a relatively higher gross coverage in the sale or supply of electricity to these users. Explicit projections of future operations were made for the period 2009–2016. The valuation is also based on operating success after 2016; this value was calculated on the basis of capitalisation method by using 'Gordon Growth Model'.

By using a valuation based on market comparisons and the method of comparable companies in the stock market, was taken as the basic value. As this was a valuation of a 5.74 % share, the margin for lack of control was disregarded. By using yield-based valuation, the valuation for minority owner as regarded as the basic value, since operating projections take into account the aspect of minority ownership (operating projections are based on past operations and do not envisage any restructuring). As this is a valuation of a 5.74 % share, the margin for lack of control was not disregarded during the valuation. In the case of this valuation, the subject is a company whose shares were not included in the capital market, which makes it a closed company. Given the aim of the valuation, the final valuation did not include the margin for the lack of marketability.

By using method of discounted cash flows, the value of ownership capital per share of the company Elektro Maribor, d. d. on the market basis amounts to EUR 8.1. b) Impairment of investments in Večer, d. d.

The value of investment in Večer is EUR 18,890,000 and is based on the valuation of market value. It was carried out by a certified business appraiser registered with the Slovenian Institute of Auditors. On the basis of this valuation, the investment was impaired by EUR 122,578 in 2008. The harmonisation of fair value is reflected in a decrease of revaluation surplus of EUR 98,063 and in deferred taxes of EUR 24,515.

The valuation of market value of equity share equals a pondered average of values calculated by: the method of the current value of expected free cash flows (method based on the assumption that the company will continue its operations; when working by this method, yields are planned on the basis of analysis of past operations and on the assessment of future business opportunities which are discounted with an appropriate arithmetic average of the required level of debtor’s yield and owner’s capital – 75 % of weight) and the method of comparable transactions (comparison of similar companies whose shares are sold publicly in the securities market or were sold in near past; multipliers used: the value of the total equity/sales revenues and equity value/ /EBITDA; this method is taken only as a control method - 25% share).

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The value is calculated in the range of +/- 7% with regard to the average value. The range is set by weighting values calculated by the method of current free cash flows (best- and worst-case scenario), and the average value calculated by the method of comparable transactions. Given the uncertainty in capital markets, it is normal that the valuation provided in the form of a range – the bigger the uncertainty, the broader is the range of value.

Apart form regular risks related to each valuation (e.g. particularly the uncertainty of projections of future operations, which arises form the mere definition of the method of the current value of expected free cash flows, which is then discounted by a discount rate taking into account the risk related to its realisation), we do not envisage any major risks in this particular case. By its decision of 1 December 2008, UVK (Competition Protection Office) launched a procedure of the assessment of conformity of the concentration with competition rules. After the concentration notification was submitted, the Office submitted additional requests on 19 December 2008, 10 February 2009 and 17 March 2009 asking for further information. All required information was sent by Delo, d. d. in the expected deadline.

UVK must, in 60 working days after reaching the decision on launching a procedure, either issue a decision on the conformity of concentration with competition rules or decide that it does not comply with the rules and therefore prohibit it. We expect to receive the decision soon.

In accordance with the first paragraph of Article 140 of the Slovenian Media Act, Culture and Media Inspectorate of the Republic of Slovenia launched a procedure against the legal entity and the person liable, who then furnished their defensive arguments in a statement on the misdemeanour, claiming that no signs of a misdemeanour have been indicated by the Office. The Inspectorate reached a decision on the misdemeanour of 2 December 2008 issuing a penalty of EUR 104,323.15 to the legal entity and EUR 625.94 to the person liable. Requests for judicial protection against the decision were filed in time and were then sent by the Inspectorate to the competent court for ruling. The ruling is expected in mid-2010 or later.

The Republic of Slovenia filed a lawsuit against Delo,d.d. because of established nullity of the selling contract on the purchase of 158,608 lots of ordinary registered shares of Večer,d.d., which Delo concluded on 10 November 2008. Due to the conditions which were established before the conclusion of the contract, the State also proposed an interim decision to be adopted forbidding Delo, d. d. to dispose of and to burden the above mentioned shares and that a notice on the prohibition of disposal and burdening be made in the share register of KDD. The court has not yet reached a decision on the proposed interim decision nor presented any evidence in the procedure. In its response to the lawsuit, Delo dismissed all statements as ill-founded.

As far as the investment in ČZP Večer, d. d. is concerned, we will act in accordance with the outcome of the procedures conducted by the Competition Protection Office or the competent court.

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4. D. Investments in possession until maturity ( in EUR )

2008

2007

Investments in possession until maturity

12,500

25,000

Total

12,500

25,000

2008

2007

Long-term loans to associated companies Other long-term loans

2,500,000 48,463

124,626

Total

2,548,463

124,626

5. LongLong-term term loans ( in EUR )

In 2008 Pivovarna Union, d. d. approved a long term loan to the company Birra Peja, a. d. in the amount of 2,500,000 EUR for a period of 5 years. The loan is insured by bills of exchange. The interest rate is the 6-month EURIBOR + 0.9 %.

The other long-term loans refer especially to long-term housing loans by the employees.

The interest rate on average fluctuates between 3 % and 4.5 % nominally per year.

6. LongLong-term operating receivables ( in EUR )

2008

2007

Long term receivables to others

1,648,282

3,264,697

Total

1,648,282

3,264,697

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7. LongLong-term receivables for deferred tax tax Long term deferred tax assets have been calculated based on the temporary differenced by taking into consideration the liability method and the tax rate, which shall be valid in the year when the deferred tax assets and liabilities will be realized. The tax rate for the income tax assessment of legal entities shall be reduced from 22 % in 2008 to 21 % in 2009 and to 20 % from 2010 onwards.

Reservations

Liabilities to employees

Fair value (financial assets)

Other

Total

REDEIVABLES FOR DEFERRED TAX st 1 January 2007

86,179

2,081,159

3,899,716

465,611

6,532,665

Change in the profit and loss statement Change in the balance sheet st 31 December 2007

86,179

(361,007) 571,204 2,291,356

(2,165,859) 1,733,857

(91,197) 374,414

(2,618,063) 571,204 4,485,806

Change in the profit and loss statement Change in the balance sheet

7,853 -

(55,359) -

2,824,629 2,232,693

2,522,806 -

5,299,929 2,232,693

94,032

2,235,997

6,791,179

2,897,220

12,018,428

( in EUR )

st

31 December 2008

Long term deferred tax assets as at 31 December 2008, is shown as a deferred tax asset under the heading financial investments in the amount of 6,791,179 EUR, liabilities to employees for severance pays, jubilees and unused holiday time in the amount of 2,235,997 EUR, parent company tax loss in the amount of 1,895,312 EUR and the remainder in the amount of 1,095,940.

The asset from the tax loss of the subsidiary Jadranska pivovara, d. d. Split, which amounted to 23,772,070 EUR is not shown amount the long term deferred tax assets because the subsidiary does not expect any taxable profit in the future. Under tax loss, the deferred tax asset would amount to 4,754,414 EUR after taking into consideration the 20 % tax rate.

8. NonNon-current assets for sale ( in EUR )

2008

2007

Properties for sale

1,666,507

1,157,675

Total

1,666,507

1,157,675

The Group shows the value for real estate property to be sold as real estate property, which they intend to sell within one year.

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9. Inventories ( in EUR )

2008

2007

Material and raw material Unfinished peoduction Products Merchandise

26,709,400 4,672,101 9,708,344 1,218,532

24,236,276 4,339,712 10,065,907 1,176,223

Total

42,308,377

39,818,118

In comparison to the previous year, the Group increased stock by 6.3 percent. No bigger deficits or surpluses were established after the regular annual inventory. As at 31 December 2008 no inventory was mortgaged.

10. A. ShortShort-term operating receivables ( in EUR ) Short-term trade operating receivables: on the domestic market on foreign markets Less value adjustment Total Short-term operating receivables on others Advances Less value adjustment Total

2008

2007

47,381,349 10,644,545 (10,024,807)

33,777,491 13,395,329 (11,249,619)

48,001,087

35,923,202

4,341,469 4,773,435 (812,742)

3,416,821 4,543,435 (188,451)

56,303,249

43,695,007

At 31 December 2008, the Group disclosed EUR 56,303,249 of short-term operating receivables, which is 28,9 percent more than in the past year.

On 31 December 2008, the matured trade receivables of the Group amounted to EUR 24,587,090. Value adjustment was made for mature receivables of EUR 10,024,807, while the remaining sum of EUR 14,562,283 was not subject to value adjustment as it is not disputable.

The disclosed value of all short-term operating receivables and other receivables reflects the fair value.

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short--term operating receivables Value adjustment of short ( in EUR )

2008

2007

Balance as at 1 January

11,249,619

10,244,204

Inclusion of the company Delo, d.d. In consolidation Recovered receivables written-down Final write-down of receivables Formation of value adjustments in the year Decrease in value correction in the year Revaluation Transfer of interests Other

(832,525) (1,020,228) 770,089 (153,277) 11,089 40 -

1,418,267 (440,098) (1,563,043) 1,874,894 (284,028) (5,628) 210 4,841

10,024,807

11,249,619

2008

2007

33,438,804 8,748,363 2,333,720 1,520,382 11,984,625

31,710,938 2,344,348 1,446,633 1,335,700 10,335,201

58,025,894

47,172,820

st

st

Balance as at 31 December

Maturity of ttrade rade receivables ( in EUR ) TRADE RECEIVABLES unmatured up to 30 days from 30 to 60 days from 60 to 90 days above 90 days st

Balance as at 31 December

At 31 December 2008, the matured short-term operating receivables of Group amounted EUR 24,587,090. For the short-term operating receivables in amount EUR 10,024,807 the adjustment has been formed, but for the difference in amount EUR 14,562,283 the adjustment has not been formed.

Operating receivables from customers in the amount of 5,738,039 EUR are insured by received guarantees and the group has a part of these operating receivables in foreign markets in the amount of 4,822,127 EUR insured by SID – Prva kreditna zavarovalnica, d. d. Ljubljana.

10. B. ShortShort-term receivables for overpaid corporate income tax ( in EUR )

2008

2007

Receivables for overpaid corporate income tax

6,854,113

616,560

Total

6,854,113

616,560

Short-term receivables for too much paid income tax of legal entities is referred to too much prepaid tax, which was calculated based on the liabilities in 2007 when the companies Radenska, d. d., Pivovarna Union, d. d. and Pivovarna Laško, d. d. calculated and paid a comparatively high income tax amount for legal entities due to good operating results.

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11. ShortShort -term loans ( in EUR )

2008

2007

Short-term part of long-term loans given Short-term deposits Short-term loans Less value adjustment

2,834 14,741,477 62,352,725 (54,915)

42,181 333,430 83,966,478 (82,121)

Total

77,042,121

84,259,968

The interest rate for short-term deposits fluctuates between 2.15 and 5.0 % and for shortterm loans it is between 4.8 and 4.95 % nominally or a 6-month EURIBOR +1 % up to +1.8 %. The value of short-term loans is expressed as fair value.

On 31 December 2008, the Group had EUR 62,352,724 of short-term loans granted, of which EUR 31,400,000 were granted to associated companies. The debtor companies will repay the loans from generated cash flows of their respective activities and/or by selling their portfolio investments. The Group estimates that the loans will be repaid but that the payment of a part of loans depends on the success of the sale of investments.

Since the loans were granted to associated companies which have insured their shortterm bank loans with their property and portfolio investments or to the clients who are in any way linked to these associated companies, the repayment of loans taken by Laško Group associates will also depend on the agreement between them and their creditor banks.

12. A. ShortShort-term investments ( in EUR )

2008

2007

Short-term investments - fair value

-

28,085,175

Total

-

28,085,175

2008

2007

28,085,175

82,043,745

(28,085,175)

41,478,613 (17,969,060) (12,696,788) (64,771,335)

-

28,085,175

short--term investments Movement short ( in EUR ) st

Balance as at 1 January Changes in the year: Gains Revaluation Transfer to N-CI Sale st

Balance as at 31 December

In 2008, the Group sold all short-term financial investments (ZV2R, NF2R) and by doing so created a profit in the amount of 1,456,752 EUR. The subsidiary Radenska, d. d. sold short-term financial investments in the amount of 15,268,962 EUR and Pivovarna Union, d. d. in the amount of 9,686,537 EUR.

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12. B. Derivatives D erivatives ( in EUR )

2008

2007

Derivatives

13,630

462,172

Total

13,630

462,172

As at 31 December 2008, financial instruments, which refer to protecting cash flow from risk, are recorded in the Group’s books. The revaluation effect of the implemented financial instruments is reflected in the income statement.

13. Cash Cas h in banks, cheques and cash in hand ( in EUR )

2008

2007

Cash in banks Cash in hand and received cheques Monetary resources in foreign currency Cash items in the process of collection

1,832,098 136,732 129,531 92,745

1,944,500 74,752 39,986 35,627

Total

2,191,107

2,094,865

2008

2007

Deferred cost and accrued revenues

855,918

424,751

Total

855,918

424,751

14. Deferred cost and accrued revenues ( in EUR )

15. Majority owner’s capital The Group’s capital is composed of called-up capital, capital reserves, reserves from profit, retained profit or loss from previous years, revaluation surplus from financial investments, classified in the group for sale and profit not yet distributed in advance or the business year loss not yet settled.

Share capital appears as shareholder capital (capital with share or capital contributions).

It is divided into called-up capital and uncalled capital. Uncalled capital is a deductible item of share capital.

The Group's called capital is defined in the company's statute and amounts to 36,503,305 EUR. It is divided up into 8,747,652 transferable ordinary shares without a par value issued. Each share gives the owner a voting right at the annual general shareholder’s meeting and participation in the profits.

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Capital reserves include the paid capital surplus in the amount of 102,377,721 EUR, which was formed during both capital increases by shareholders and their payments, which exceeded the nominal value of paid shares and the general revaluation correction of capital, which appeared due to the preservation of the real capital in the amount of 23,146,157 EUR. Reserves include legal reserves in the amount of 25,606,794 EUR, reserves for own shares in the amount of 356,168 EUR, own shares as deductible items in the amount of 356,168 EUR and other reserves from profit in the amount of 18,798,802 EUR. Legal reserves can be used to cover losses and capital increases. Own shares include the PILR shares owned by Pivovarna Laško, d. d. in the amount of 246,617 EUR and subsidiaries in the amount of 109,551 EUR. In 2008, the Group acquired 9,809 lots of own shares in the value of EUR 854,324 and disposed of 6,629 lots of own shares in the value of EUR 363,855.

Other reserves from profits decreased in 2008 due to the impact of changes in capital of the Mercator Group in the amount of 3,544,294 EUR, which corresponds to the ownership share of the Laško Group. At the same time, reserves from profits increased for the allocation of the net profit for the business year, whereby it allocated an amount of 1,888,047 EUR into the Union Group's reserves and decreased for the formation of a fund of own shares.

The net profit for the year in previous years increased by the net profit in 2007 in the amount of 48,284,962 EUR and decreased by the payment of dividends in the amount of 8,747,384. The changes in net profit from the previous years also refer to the direct increase and decrease of capital movements of the Mercator Group in 2007, when the investment in the Business System Mercator was evaluated according to the equity method and in 2008 it is treated as a financial asset, intended for a sale and evaluated according to fair value due to the repossession of voting rights. The amount of changes from this facts.

The revaluation surplus has increased by the revaluation effect of real estate property on fair value and decreased by the revaluation effect of available-for-sale financial assets at a new - lower fair value. In 2008, the revaluation surplus increased for amount EUR 8,946,492 and decreased from changes of model evaluation shares MELR in amount EUR 12,177,225 EUR and from effects of revaluation of other financial assets.

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Capital ownership structure at 31 December 2008 is as follows: Shareholder Infond Holding, d. d.

Kapitalska družba, d.d.

Skagen Kon-tiki Verdipapirfond NFD 1 Delniški investicijski sklad, d. d.

CPM, d. d.

D.S.U., d. o. o.

Probanka, d. d.

Uravnoteženi investicijski sklad Infond Global Electa, d. o. o. Ljubljana Other small shareholders Total

Participation in % 52.971 % 7.059 % 5.563 % 5.094 % 2.511 % 1.894 % 1.728 % 1.438 % 1.302 % 20.440 % 100.000 %

16 . Capital of minority owners The capital of minority owners as at 31 December 2008 amounts to 16,756,301 EUR and is lower by 4,924,185 EUR compared to 2007. In 2008, the profit in the amount of 215,824 EUR belonged to minority owners and they were paid a participation in profit in the amount of 328,948 EUR, their share was reduced to due the revaluation of financial assets as fair value in the amount of 2,894,965 EUR and due to the sale of shares to the majority owner in the amount of 2,183,597 EUR. An increase by 273,319 EUR refers to the revaluation of real estate property to fair value.

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17. Reservations and long l ongong-term accrued costs and deferred revenues 17. A. LongLong-term liabilities l iabilities to employees ( in EUR )

2008

2007

Long-term liabilities to employees

6,324,696

7,211,160

Total

6,324,696

7,211,160

Reservations for evalulated liabilities for paying severance pays and jubilee awards were made on the date of the balance sheet and discounted to the current value. They are based on actuarial calculations. Individual companies in the Group have made the calculation of reservations for estimated pensions and jubilee awards by themselvs on the basis of the calculation and the method used by an accredited actuary in the previous years.

The collective agreement lays down that apart from their regular salaries, all employees except the management are entitled to a severance pay when retiring. The severance pay amounts to a maximum of two average gross salaries in the Republic of Slovenia in the past three months or to two salaries of the employee, whichever is higher. Jubilee awards are paid to the employees with regard to their total period of employment, amounting to 50 % or 75 % or 100 % of the average net salary of the company in the past three months for 10, 20, or 30 years of work respectively. The chosen discount rate is 5.85 % per year.

Reservations were formed for expected payments. Compared to last year, they decreased

by EUR 886,464.

17. B. Reservations ( in EUR )

2008

2007

Reservations

2,729,386

2,309,619

Total

2,729,386

2,309,619

Dolgoročne rezervacije se nanašajo na nerešene tožbe v odvisnih družbah in so oblikovane na podlagi odvetniških mnenj in ocen.

long--term accrued costs and deffered revenues Movement of reservations and long Severances at retirement

Jubilee awards

Others

Total

Balance as at 1 January 2008

5,642,030

1,182,290

2,696,459

9,520,779

Gains Decreasing - used Decreasing - eliminated

476,451 (705,323) (153,789)

26,720 (134,213) (9,470)

76,707 (43,780) -

579,878 (883,316) (163,259)

5,259,369

1,065,327

2,729,386

9,054,082

( in EUR ) st

st

Balance as at 31 December 2008

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18. LongLong-term liabilities 18. A. LongLong-term financial financial liabilities ( in EUR )

2008

2007

Long-term loans obtained from banks

239,565,293

214,469,372

Total

239,565,293

214,469,372

Transfer to short-term financial liabilities

(18,553,743)

(44,751,756)

Total

221,011,550

169,717,616

2008

2007

Maturity above 6 years Maturity from 4 to 6 years Maturity from 2 to 4 years Maturity from 1 to 2 years Short-term part of long-term financial liabilities

10,018,718 75,038,988 135,953,844 18,553,743

3,021,093 34,988,217 75,291,541 56,416,765 44,751,756

Total

239,565,293

214,469,372

Maturity of longlong-term financial liabilities ( in EUR )

The interest rate for the Group’s long-term loans fluctuated on average between 4.34 % and 5.45 % in 2007 or 6-month EURIBOR + 1.375 % do +3.5 %.

In 2008, the Group took out new long-term loans in the amount of 84,000,000 EUR and paid back 58,904,079 EUR worth of current loans. In 2009, the Group will pay back 18,553,743 EUR in long-term loans.

Long term financial liabilities of the group are insured by a mortgage on real estate property, movable property, shares and guarantees given for long-term loans in the amount of 224,759,101 EUR. For insuring long term loans, the Group pledged 4,570,547 shares of Radenska, d. d., 436,239 shares of Pivovarna Union, d. d., 539,516 shares of Dela d. d., 130,000 shares of Probanka, d. d. Maribor, and 771,794 shares of the Business System Mercator, d. d. The book value of the pledged shares as at 31 December 2008 amounts to 417,666,876 EUR. A part of the long term debts are insured by a mortgage in the amount of 29,357,300 EUR and a part with the pledge of movable property in the amount of 2,684,178 EUR. The value of unpaid insured long-term debts, with shares, a mortgage and pledged movable property as at 31 December 2008 amounts to 198,903,544 EUR. The value of long-term financial liabilities is expressed as fair value.

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18. B. LongLong-term operating liabilities ( in EUR )

2008

2007

Other long-term operating liabilities

111,108

75,736

Total

111,108

75,736

18. C. LongLong-term liabilities for deferred tax Long term deferred tax liabilities have been calculated based on the temporary differenced by taking into consideration the liability method and the tax rate, which shall be valid in the year when the deferred tax assets and liabilities will be realized. The tax rate for the income tax assessment of legal entities shall be reduced from 22 % in 2008 to 21 % in 2009 and to 20 % from 2010 onwards.

Fair value (properties, buildings)

Fair v alue (financial assets)

Fair value (trademarks)

Other

Total

1,174,841 (179,305) 1,926,306

13,542,255 (4,765) (10,692,394)

13,732,098 11,822,400

103,710 37,107 787

28,552,904 (146,963) 3,057,099

st

2,921,842 (58,146) 1,612,982

2,845,096 4,764 (2,989,664)

25,554,498 -

141,604 (8,512)

31,463,040 (53,382) (1,385,194)

st

4,476,678

(139,804)

25,554,498

133,092

30,024,464

( in EUR ) LIAB ILITIES FROM DEFERRED TAX st

1 January 2007 Change in the profit and loss statement Change in the balance sheet 31 December 2007 Change in the profit and loss statement Change in the balance sheet 31 December 2008

The long term deferred tax liability as at 31 December 2008 amounts to 30,024,464 EUR and refers to the value of the established surplus from revaluating the available for sale financial assets in the amount of -139,804 EUR, the revaluation of brand names in the Union Group in the amount of 13,732,098 EUR, the revaluation of brand names in the company Delo, d.d. in the amount of 11,822,400 EUR and the revaluation of the Group's real estate property in the amount of 4,476,678 EUR. In the year 2007 the long-term liabilitiy was receivables and liabilities were presented in netted value. The value of longterm deferred tax liabilities was EUR 31,463,040, while the receivables amounted to EUR 4.485,806.

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19. ShortShort-term liabilities 19. A. ShortShort-term operating liabilities ( in EUR )

2008

2007

Short-term liabilities to other suppliers Short-term operating liabilities to others: to employees to the state Short-term liabilities for advances Other short-time liabilities

35,022,948

28,934,543

3,988,770 8,863,532 1,545,952 3,754,040

4,986,222 6,570,851 775,967 5,993,578

Total

53,175,243

47,261,161

In comparison to 2007, short-term operating liabilities increased by 12.5 percent. The value of short-term operating liabilities is expressed as fair value.

19. B. ShortShort-term term liabilities for tax payment ( in EUR )

2008

2007

Short-term liabilities for tax payment

1,019,224

5,501,732

Total

1,019,224

5,501,732

2008

2007

Short-term part of long-term financial liabilities Short-term financial liabilities for interest from loans Short-term loand obtained from the companies in the Group Short-term loans obtained from banks Other short-term financial liabilities

18,553,743 2,355,251 178,225,970 8,104,582

44,751,756 2,485,669 42,985 159,679,080 3,522,598

Total

207,239,545

210,482,088

19. C. ShortShort-term financial liabilities ( in EUR )

Compared to the previous year, the value of short-term financial liabilities decreased by 1.5 %.

The average interest rate for short-term loans fluctuated between 4.54 and 5.98 %.

Short-term loans in the amount of 66,221,427 EUR are insured by a pledge of shares, which have a book value of 95,220,436 EUR as at 31 December 2008, a loan in the amount of 10.000.000 EUR is insured by a mortgage valued at 8,611,087 EUR, and the rest of the loans are insured by bills of exchange.

The total short-term liabilities of the Group on 31 December 2008 amounted to EUR 267,115,153 while short-term assets totalled EUR 187,235,021. The surplus of short-term liabilities equals EUR 79,880,132. As far as short-term loans are concerned, the company will try to reach an agreement with banks on the extension of payment deadlines when

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they mature. If an agreement is not reached, the loans will be paid by selling a part of the company's long-term property.

The value of short-term financial liabilities is expressed as fair value.

20. Accured costs and deferred revenues ( in EUR )

2008

2007

Accrued costs and deferred revenues

5,681,141

3,924,841

Total

5,681,141

3,924,841

Accrued costs and deferred revenues refer on short-term in advance accounted costs for unused leaves of employees and severance pays for redundant workers.

21.

21. Analysis of sale revenues and costs 21.

21. A. Analysis of sale revenues by the main products ( in EUR ) Sale rev enues of Sale rev enues of Sale rev enues of Sale rev enues of

products and services in Slovenia products and services on foreign markets material and merchandise in Slovenia material and merchandise on foreign markets

Total

2008

2007

299,298,191 50,128,727 10,076,087 525,302

259,804,781 49,342,897 14,047,619 6,867,625

360,028,307

330,062,922

Sales revenues in 2008 compared to the previous year were greater by 29,965,385 EUR; however, the data is not all that comparable because the last year the company Delo, d. d. was in a consolidation from the date of acquisitions, which was from 1 May 2007 onwards. In the first for months of 2007, the stated company generated 19,350,181 EUR in sales revenues. The corresponding increase amounts to 3.2 percent or 10,615,204 EUR. 21.

21. B. Analysis of sale revenues by countries ( in EUR )

2008

2007

Sale rev enues in Slovenia Sale rev enues on foreign markets

309,374,278 50,654,029

273,852,401 56,210,521

Total

360,028,307

330,062,922

Sales revenues from foreign markets were generated mostly in the markets of the former Yugoslavia.

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21. C. Other operating revenues Other operating revenues in the amount of 13,322,326 EUR also include revenues, which originated due to a change in the policies of evaluating real estate property investments in 2008. The Group generated revenues in the amount of 5,450,070 EUR under the revaluation of real estate property investments. Other operating revenues include revenues from the sale of fixed assets, collected receivables, for which a value correction of receivables was formed in the previous years, revenues for the elimination of longterm reservations and subsidies received.

21.

21. D . Analysis Anal ysis of xpenses by categories ( in EUR )

2008

2007

Expenses of merchandise sold Expenses of materials Expenses of services Depreciation Expenses of salaries Benefits on p ayments for social security Other labor costs Revaluation operating expenses at fixed assets Revaluation operating expenses at reverse assets Costs of reserv ations Other operating expenses

9,544,978 135,664,368 95,219,090 29,716,424 44,799,783 8,009,695 9,287,684 7,602,711 1,126,533 144,882 6,607,458

8,292,941 136,883,436 60,924,069 30,822,534 49,774,500 3,019,401 2,391,071 3,031,874 1,506,355 182,823 10,411,541

Total

347,723,606

307,240,545

Compared to the previous year, operating expenses are greater by 40,483,061 EUR. The increase in expenses in the amount of 14,686,405 EUR is partially the consequence of higher costs, especially marketing costs and other services. The revaluated operating expenses for fixed assets in the amount of 7,352,493 EUR refers to the impairment of fixed assets of the subsidiary Jadranska pivovara, d. d., which was recognised based on the completed appraisal. The increase in costs also partly refers to the impact of a shorter period (eight months) of the company Delo, d. d. incorporated in consolidation in 2007.

About 30 percent of the costs of services go to advertising costs, followed by the costs of maintenance, transport services and intellectual and other services.

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21.

21. E . Expenses by functional groups Production expenses of so ld products and goods

Expenses of selling

Cost of general activities

Total

Expenses of goods, material and raw material sold Expenses of services Depreciation Labor costs Revaluation operating expenses at fixed assets Revaluation operating expenses at reverse assets Costs of reservations Other operating expenses

140 ,808,515 20 ,442,773 23 ,569,402 38 ,722,131 4 ,932,591 130,443 50,709 2 ,535,133

3,162,671 58,431,788 3,677,435 8,921,667 385,279 671,525 36,221 1,900,420

1,237,249 16,345,253 2,469,771 13,940,791 2,284,841 324,565 57,953 2,684,481

145,208,435 95,219,814 29,716,608 61,584,589 7,602,711 1,126,533 144,882 7,120,034

Skupaj

231 ,191,697

77,187,005

39,344,904

347,723,606

Production expenses of so ld products and goods

Expenses of selling

Cost of general activities

Total

Expenses of goods, material and raw material sold Expenses of services Depreciation Labor costs Revaluation operating expenses at fixed assets Revaluation operating expenses at reverse assets Costs of reservations Other operating expenses

136 ,826,678 16 ,202,344 23 ,830,407 33 ,128,860 1 ,955,126 154,057 63,988 2 ,468,619

6,324,038 36,153,871 4,325,585 10,087,844 990,302 1,149,329 45,706 3,576,865

2,025,662 8,567,854 2,666,542 11,968,269 86,446 202,969 73,129 4,366,058

145,176,378 60,924,068 30,822,534 55,184,972 3,031,874 1,506,355 182,823 10,411,541

Skupaj

214 ,630,078

62,653,540

29,956,928

307,240,546

Year 2008 ( in EUR )

Year 2007 ( in EUR )

In 2008, the relation between sales costs and costs of the activity in general changed because certain departments (marketing) separated themselves from the sales function and became headquarter functions of the board.

22.

22. Net financial expenditures ( in EUR )

Financial revenues Financial revenues Financial revenues Financial revenues Financial revenues

without currency differences on the basis of profit shares from loans giv en from operating receivables form sale of securities

Financial expenditures Financial expenditures Financial expenditures Financial expenditures

without currency differences from impairment and write-offs of investments from financial liabilities from operating liabilities

Currency differences from financing Negative currency differences Positive currency differences Net financial expenditures

Pivovarna Laško Group and Pivovarna Laško, d. d.

2008

2007

11,888,812 4,812,221 4,953,275 281,166 1,842,150

48,852,286 47,232,489 1,445,834 173,963 -

(36,217,844) (11,710,984) (24,063,221) (443,639)

(17,405,519) (141,886) (17,207,263) (56,370)

(61,834) (84,850) 23,016

79,615 (24,428) 104,043

(24,390,866)

31,526,383

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In 2008, the Group realized 24,390,866 EUR in net financial expenses and in 2007 net financial revenues in the total amount of 31,526,383 EUR were realized especially from the profits in selling financial investments.

Financial expenses under financial liabilities increased by 39.8 percent or 6,855,958 EUR in 2008 compared to the previous year. Financial expenses for interest increased due to greater indebtedness.

23. Share of (loss) / profit in associated associated companies ( in EUR )

2008

2007

Share of (loss)/profit in associated companies

1,259,654

10,208,041

Total

1,259,654

10,208,041

The share of profits of the subsidiaries in 2007 refers to the participation in profits of the Business System and in 2008 it refers to the recognized impaired goodwill under investments in the company Birra Peja, a. d. Peć. In 2008, the Mercator Group generated a net profit of 40,846,000 EUR. In the event that the investment in 2008 would be evaluated according to the equity method, the distributable profit would amount to 9,513,617 EUR. 24. Income tax ( in EUR )

2008

2007

Current tax Deferred tax

4,066,690 (5,353,311)

10,176,865 2,471,100

Total

(1,286,621)

12,647,965

2008

2007

16,532,924

64,869,835

3,637,243 (10,040,940) 22,892,426 29,384,410 (9,597,951) 19,786,459 (1,301,504) 18,484,955

14,920,062 (15,576,864) 7,633,532 56,926,503 (10,547,126) 46,379,377 (2,132,139) 44,247,238

4,066,690

10,176,865

( in EUR ) Profit and loss before taxation Tax, paid according to valid tax rate: Revenue tax, calculated according to 22 % or 23 % tax rate Correction of revenue to granted revenues tax level Non-recognized revenue by tax Tax base I Changes to the tax base Tax base II Income tax reliefs Tax base III Tax

Deferred taxes, which affect on profit or loss, are shown in table of movement long-term receivables for deferred tax (note 7) and long-term liabilities (note 18. C).

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The Group’s Income tax differs from the theoretical sum of the tax, which would occur at the use of the fundamental tax level of the home country as follows: Tax relief refers to:

relief for research and development, relief for voluntary supplementary pension insurance, relief for the employment of disabled persons, and relief for donations.

The authorities can check the operation of the company within which additional liabilities of tax payment, interest on arrears or penalties with regard to the income tax or other taxes and contributions can occur at any time within five years after the year in which tax should be levied. The company management is not familiar with any circumstances which could present important liabilities with respect thereof.

25. Net increase /decrease in cash and and cash equivalnet ( in EUR )

Expl. note

Operating profit of the period Adjustments for: Depreciation of property, plant and equipment Amortization of intangible fixed assets Write-offs of fixed assets Net movement in reservations Payment of profit share in associated companies Currency differences from loans Changes of reverse capital Inventories and non-current assets for sale Operating and other receivables Operating and other liabilities Cash made from operation

21 21 21 17 23 22

8.9 6,10 18,19,20

2008

2007

25,700,175

32,204,010

29,204,648 511,776 7,102,278 (466,697) (61,834) 36,290,171

30,441,259 381,275 2,802,184 (822,533) 3,515,363 79,615 36,397,163

(761,544) (11,420,365) 6,857,537 (5,324,372)

(3,035,783) 99,625 (3,192,055) (6,128,213)

56,665,974

62,472,960

In 2007, the dividend of EUR 3,515,363 which was received from associated company Poslovni sistem Mercator influenced the increase of cash flow. If this investment was treated equally in 2008, this would also affect cash flow from operations, thus increasing it by EUR 3,735,074, as was the value of dividends received this year.

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26 . Reporting by segments 26. A. Business segments

Beer

Other beverages

Newspaperpublishing activity

Other

Total

Net sales revenues by segments Revenues among segments

166,826,167 15,203,171

122,918,891 15,633,605

60,499,049 33,379

42,537,904 1,883,549

392,782,011 32,753,704

Net sales revenues

151,622,996

107,285,286

60,465,670

40,654,355

360,028,307

5,276,918

5,594,886

5,897,816

8,930,553

25,700,173 (24,390,866) 1,259,654 2,568,961 1,286,621 3,855,582

Assets by segments Trademarks Positive goodwill

287,434,727 27,737,252 10,165,440

182,826,038 40,923,239 15,248,156

62,169,893 59,112,000 9,440,486

128,236,509 -

660,667,167 127,772,491 34,854,082

Liabilities by segments Investments

374,192,692 29,719,868

90,297,969 10,577,875

26,748,507 1,507,528

36,077,189 9,582,685

527,316,357 51,387,956

15,058,517

10,227,995

2,687,626

1,742,286

29,716,424

Beer

Other beverages

Newspaperpublishing activity

Other

Total

Net sales revenues by segments Revenues among segments

150,741,993 20,999,571

132,823,073 8,614,309

40,223,104 -

39,784,173 3,895,541

363,572,343 33,509,421

Net sales revenues

129,742,422

124,208,764

40,223,104

35,888,632

330,062,922

24,138,492

5,790,543

712,570

1,562,404

32,204,009 31,526,384 10,208,041 73,938,434 (12,647,965) 61,290,469

Assets by segments Trademarks Positive goodwill

323,525,737 27,737,252 10,165,440

194,314,326 40,923,239 15,248,156

44,929,118 59,112,000 9,440,486

70,995,426 -

633,764,607 127,772,491 34,854,082

Liabilities by segments Investments

357,152,222 16,616,171

79,054,562 4,701,316

13,824,443 2,417,373

22,671,491 1,735,526

472,702,718 25,470,386

14,362,720

11,085,529

2,130,536

3,243,749

30,822,534

Year 2008 ( in EUR )

Operating profit and loss Financial revenues/expenditures (net) Share of (loss)/profit in associated companies Profit and loss before tax Tax Profit and loss of accounting period

Expenses without cash flow as consequence

Year 2007 ( in EUR )

Operating profit and loss Financial revenues/expenditures (net) Share of (loss)/profit in associated companies Profit and loss before tax Tax Profit and loss of accounting period

Expenses without cash flow as consequence

Sale by geographical segments is disclosed in the explanatory note 26. B.

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26 . B. Geographical Geographical segments segments ( in EUR )

2008

2007

Net sales revenue Slovenia Foreign market

309,374,278 50,654,029

273,852,400 56,210,522

Total

360,028,307

330,062,922

Assets Slovenia Foreign market Investments in associated companies Trademarks (Slovenia) Positive goodwill (Slovenia)

591,424,113 64,438,600 4,804,454 127,772,491 34,854,082

386,986,039 75,754,144 171,024,423 127,772,491 34,854,083

Total

823,293,740

796,391,180

Investments Slovenia Foreign market

49,064,996 2,322,960

22,279,141 3,191,245

Total

51,387,956

25,470,386

Sales revenues from foreign markets were generated mostly in the markets of the former Yugoslavia.

27. Profit per share The net profit per share is calculated with the distribution of net profit belonging to shareholders, with weighed average number of shares on the market during the year, where the average number of treasury shares is excluded. ( in EUR ) Profit of major owners Weighed number of issued ordinary shares Net profit per share Adjusted net profit per share

2008

2007

3,639,758 8,742,953

58,889,881 8,747,431

0.42 0.42

6.73 6.73

28. Dividends Dividends per share In 2007, the payment of dividends of parent company Pivovarna Laško, d. d. amounted to 3,498,770 EUR or 0.40 EUR per share, in 2008 it was 8,742,384 EUR or 1 EUR per share. The subsidiary companies paid dividends to minority owners. In 2008 the minority owners received dividends of 328,948 EUR.

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29. Financial Financial risks a) Credit risk Trade receivables do not present any larger risk to the Group, as it predominantly works with known and verified customers, has its receivables insured with usual insurance instruments, and at the same time limits of allowed debt for an individual customer with respect to the contract of sale are determined. From the explanatory note 10.A it is evident that the credit risk is insignificant. b) Interest rate credit risk Interest rate credit risk presents a possibility of a change in the interest rate on the financial market, predominantly due to a the taking of loans bound by the variable interest rate (EURIBOR).

In case of raised long-term loans, the Group has partially eliminated the exposure to changes in interest rates already in the past years by using a derivative in the form of interest protection. The Group has insured a part of its financial liabilities with the interest rate collar method for the potential growth in the reference interest rate above a certain level.

In the year 2006 Pivovarna Union, d. d decreased interest rate risk by using a derivatetive in the form of interestprotection. This way it insured 70 % of long-term financial liabilities. A majority part of the financial obligation is namely intended to financial investments for which a reasonably quick disposal and payment of raised credits is possible in case of financial problems. We estimate that the Group’s interest rate risk exposure is moderate.

( in EUR )

Amount of interest

Change in fin.

Average interest rate in %

Difference in interest

Interest rate protection

5.97

-

-

24,063,221

-

6.97

4,030,690

(1,032,000)

27,061,911

2,998,690

4.97

(4,030,690)

-

20,032,531

(4,030,690)

7.47

6,046,035

(1,620,000)

28,489,256

4,426,035

4.47

(6,046,035)

-

18,017,186

(6,046,035)

Actual financial expenditures with respect to interest 24,063,221 Expenditures in case of interest rate increase by 1 % 28,093,911 Expenditures in case of interest rate decrease by 1 % 20,032,531 Expenditures in case of interest rate increase by 1,5 % 30,109,256 Expenditures in case of interest rate decrease by 1,5 % 18,017,186

Decrease in expenditures interest - interest

If the average interest rate increased by 1%, the expenditures would increase by EUR 2,998,690, and in case of a 1.5 % increase for EUR6 4,426,035 at the consideration of the interest rate protection for a part of financial liabilities.

If the interest rate decreased by 1% or 1.5 %, the financing expenditures would decrease

by EUR 4,030,690 or EUR 6,046,035 respectively.

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c) Currency risk The currency risk at the operation of the Group in 2008 was negligible, as the structure of transactions with the foreign countries was predominantly linked to the euro. d) Liquidity Liquidity risk Liquidity risk refers on capability of repayment loans and other liabilities. Total liabilities of Group at 31 December 2008 amounted 267,115,153 EUR, but short-term assets amounted 187,235,021 EUR. The excess of current assets amounted 79,880,132 EUR: The Group will try to reach agreement with banks to prolong the periods of repayments at maturity.

At the last day of 2008, the Group had EUR 9,246,741 of matured trade payables which it settled in January of 2008. At the same time it discloses a receivable from paid advances in the value of EUR 1,903,767. e) Cash flow risk Cash flow risk is reflected in the fair value of assets risk. The risk can be managed with derivative financial instruments. In 2008, the Company did not insure the financial assets fair value risk, which has brought to the existence of a risk determined in the following chart.

( in EUR ) st

Balance as at 31 Dec. 2008 Increase in price by 10 % Decrease in price by 10 % Increase in price by 5 % Decrease in price by 5 %

Fair value as at 12/31/2008

Difference influence on the value of N-CI

179,699,512 197,669,463 161,729,561 188,684,488 170,714,536

17,969,951 (17,969,951) 8,984,976 (8,984,976)

Difference Difference influence to the influence on liability prevrednotenja for deferred tax

14,375,961 (14,375,961) 7,187,980 (7,187,980)

3,593,990 (3,593,990) 1,796,995 (1,796,995)

In case of an increase or decrease in the value of investments valued at the fair value, it is reflected in the increase or decrease of the surplus directly in the capital and at the same time in the liability for the deferred tax. Investments valued at the cost of purchase and investments in associated companies valued in compliance with the equity method rules are not included in the risk calculation.

30.

30. Contingent liabilities Contingent liabilities refer to received guarantees in the amount of 3,638,869 EUR, guarantees given or securities in the amount of 49,091,287 EUR, pledging securities in the amount of 417,666,876 EUR, a mortgage in the amount of 37,968,387 EUR and the pledge of movable property in the amount of 2,648,178 EUR. Guarantees given in the amount of 8,000,000 EUR refer to the insurance of long-term loans, which were taken by the subsidiary Jadranska pivovara, d.d.

The company’s debt, which is insured by the listed type of insurance amounts to 287,861,762 EUR as at 31 December 2008.

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Davčne oblasti lahko kadarkoli v petih letih po poteku leta, v katerem je treba davek odmeriti, preverijo poslovanje družbe, kar lahko povzroči nastanek dodatne obveznosti plačila davka, zamudnih obresti in kazni iz naslova davka od dohodkov pravnih oseb ali drugih davkov in dajatev. Uprava družbe ni seznanjena z okoliščinami, ki bi lahko povzročile morebitno pomembno obveznost iz tega naslova.

31. Business combinations In 2008 there was no business combinations.

In 2007, the acquisition of the company Delo, d. d. was carried out, which was announced by the following companies at 29 March 2007 on the basis of the permission of the Securities Market Agency: Pivovarna Laško, d. d., Radenska, d. d. and Talis, d. o. o.

Maribor. In the acquisition process, Pivovarna Laško, d. d. obtained 333,306 shares or 49.94 %, Radenska, d. d. 127,928 shares or 19.17 % and Talis, d. o. o. 20 shares or 00.003 % of all shares of the target company. After the finished acquisition, the company Pivovarna Laško, d. d. owned 500,096 shares of the target company representing 74.92 % of all shares of the target company, the company Radenska, d. d. owned 127,928 shares representing 19.17 % of all shares of the target company, and the company Talis, d. o. o. owned 20 shares representing 0.003 % of all shares of the target company. According to the takeover bid the acquirers together became the owners of 628,044 shares in total representing 94.09 % of all shares of the company Delo, d. d.

At 30 July 2007 the shareholder’s meeting of the company Delo, d. d. adopted a decision on the withdrawal of the DELR shares from the organized market. The shares were excluded from the organized market at 2nd August 2007.

In compliance with the Securities Market Act, Pivovarna Laško, d. d. received a decision by the KDD – Central Securities Clearing Corporation at 13th September 2007on the transfer of all shares of the company DELO časopisno in založniško podjetje, d. d.

Ljubljana with the designation DELR from minority shareholders to the main shareholder Pivovarna Laško, d. d., and namely free of all rights of third or other legal facts, except of shares owned by the subsidiary companies Radenska, d. d. Radenci and Firma DEL, d. o. o. Laško.

At 12 September 2007, 39,420 shares with the designation DELR were transferred to Pivovarna Laško, d. d. After the finished subscriptions, the central register contains 667,464 subscribed shares with the designation DELR (100 %), of which 539,516 or 80.8307 % to Pivovarna Laško, d. d. 127,928 or 19.1662 % to Radenska, d. d. and 20 or 0.0029 % to Firma DEL, d. o. o.

The main shareholder Pivovarna Laško, d. d. paid all minority shareholders a severance pay totaling EUR 135.50 per share within 30 days from the notice. Due to negligible differences in the fair price of the acquirer’s net assets on the day of the acquisition and on the day of the acquisition of minority shares, the sum of positive goodwill was established together for a 100 % share.

Balance sheet of the company Delo, d. d. at the fair value at 1st May 2007, when Pivovarna Laško, d. d. obtained a predominant influence, is presented as follows:

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Fair value

Carrying value before acquisition

104,011,799 60,081,439 30,433,548 13,496,812

35,009,204 969,439 21,924,813 12,114,952

Liabilities Long-term liabilities Short-term liabilities

25,486,879 17,899,702 7,587,177

10,870,177 4,140,792 6,729,385

Net assets

78,524,920

24,139,027

Net assets of acquisition

78,524,920

st

Balance sheet on 1 May 2007 ( in EUR ) Assets Trademarks (included in intangible assets) Property, plant and equipment Other assets

Payment in 2007 Cash and cash equivalents in subsidiary company

-

67,795,900 (501,335)

Cash flow at acquisition

-

67,294,565

Payment Direct costs of acquisition Total

87,965,405 87,965,405

Fair value of net assets of acquisition

78,524,920

Positive goodwill

9,440,485

32. Receipts of the management and employees according to an individual contract Matično družbo Pivovarno Laško, d. d. upravljata uprava in nadzorni svet, katerih zaslužke predstavlja spodnja tabela: Management Board

Employees with individual contracts

Sup ervisory Board

Fixed p art of receipts Other receip ts (benefits) Variable part (stimulation) Severance pays Attendance of meetings

1,133,263 84,309 -

3,617,526 280,547 17,775 75,863 -

214,793

Total

1,217,572

3,991,711

214,793

Management Board

Employees with individual contracts

Sup ervisory Board

Fiksni del prejemkov Drugi prejemki (bonitete) Variabilni del (stimulacija) Severance pays Attendance of meetings

1,063,441 132,964 44,146 251,231 -

3,091,645 58,907 50,470 24,559 -

318,981

Total

1,491,782

3,225,581

318,981

Year 2008 ( in EUR )

Year 2007 ( in EUR )

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33. Transactions with related persons

1 January 2008

Value of given loans

Value of interest charged

Value of p aymets in 2008

31 December 2008

Other related persons

-

90.400.000

546.603

59.423.883

31.522.720

Total

-

90.400.000

546.603

59.423.883

31.522.720

( in EUR )

On 31 December 2008, the Group had EUR 31,400,000 of short-term loans and receivables for interests in amount 122,720 . The debtor companies will repay the loans from generated cash flows of their respective activities and/or by selling their portfolio investments. The Group estimates that the loans will be repaid but that the payment of a part of loans depends on the success of the sale of investments. Since the loans were granted to associated companies which have insured their short-term bank loans with their property and portfolio investments or to the clients who are in any way linked to these associated companies, the repayment of loans taken by Laško Group associates will also depend on the agreement between them and their creditor banks.

34. Events after the balance balance sheet date Changes in the management of Radenska, d. d. Radenci At its session of 28 January 2009, the Supervisory Board of Radenska, d. d. endorsed two decisions: on 31 January 2009, it reached a mutual agreement on the termination of the term of the Director Tomaž Bagotinšek, and on 1 February 2009 it appointed Zvonko Murgelj as the new Director, for a five-year term.

Upon the proposal of the procurator, Olga Smej, the Supervisory Board cancelled the procuration of 31 January 2009 and, on 1 February 2009, granted the procuration to Mojca Jazbinšek Volk. The new procuration shal remain in force until revoked.

Other major events in Radenska, d. d. Radenci After drawing up the balance sheet, the company Radenska, d. d. Radenci expects a future potential liability related to the purchase of the real estate »obrat Petanjci« from Management and Consultancy Enterprise (DSU), in accordance with the denationalisation procedure. This ends the procedure from the point of denationalisation beneficiary, but the one between Radenska, d. d. and the enterprise DSU is still pending. In accordance with the decision of the Ministry of the Economy of 6 August 2004, DSU became an owner of ¼ of the above mentioned real estate.

Radenska, d. d. has not yet received a bid from DSU in writing, but on the basis of DSU’s telephone statement, Radenska should buy the entire excluded property, which is registered in Radenska’s books of account as off-balance property, but the company does not agree with that solution. Given the diverging views of Radenska and DSU, Radenska shall take its final position on the possible purchase after all legal issues have been agreed. In future procedures, Radenska, d. d. will provide proofs of investments it has so far made in the renovation of buildings and the entire infrastructure of the property »obrat Petanjci«, which makes it potentially possible to disclose revenues in the balance sheet of Radenska, d. d.

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Changes in the management of Jadranska pivovara, d. d. Split On 31 March 2009, the term of the company's Director Marijan Kos ended in mutual agreement, and on 1 April 2009, Tomaž Udrih was appointed as new Director, starting a new term.

Other major events in Jadranska pivovara, d. d.

Pivovarna Laško, d. d. is discussing and negotiating the sale of the entire share of Jadranska pivovara, d. d. Split with several potential buyers. One of the conditions for the purchase is a commitment that the potential buyer will take over all financial guarantees given by Pivovarna Laško, d. d. for the bank loans taken by Jadranska pivovara, d. d. from Splitska banka and Raiffeisen bank.

On 22 April 2009, Jadranska pivovara, d. d. presented a total of EUR 6,583,704 of longterm loans, of which EUR 1,445,926 will mature in 2009, EUR 2,270,926 in 2010, EUR 1,645,926 in 2011, EUR 1,020,926 in 2012 and EUR 200,000 in 2013. At the same time, the company has a total of HRK 7 million or EUR 938,715 of short-term loans, a half of which, HRK 3.5 million, matures on 31 August 2009, and the other half (HRK 3.5 million) on 31 October 2009.

Operations of the companies affiliated to Pivovarna Laško Group On 31 March 2009, Pivovarna Laško Group receivables from long-term loans granted to affiliated companies totalled EUR 10,500,000 while short-term loans equalled EUR 73,450,000.

The debtor companies will repay the loans from generated cash flows of their activities and/or by selling portfolio investments. The Group estimates that the loans will be repaid, but that the repayment of a part of loans depends on the success in the sale of investments. Since the loans were granted to associated companies which have insured their short-term bank loans with their property and portfolio investments or to the clients who are in any way linked to these associated companies, the repayment of loans taken by Laško Group associates will also depend on the agreement between them and their creditor banks.

Pivovarna Laško Group and Pivovarna Laško, d. d.

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Annual Report 2008 / Accounting Report – Pivovarna Laško Group

STATEMENT OF THE MANAGEMENT The Board of Directors is responsible for preparation annual report of Pivovarna Laško Group and consolidated financial statements on a way, which reflects a fair state of property and financial statements prepared according to the International Financial Reporting Standards (IFRS) and the Low of company and complying with relevant laws and regulations of Slovenian legislation.

The Board of Directors confirms the financial statements and the explanatory notes in accordance with the guidelines of the Group Pivovarna Laško for the year endend at 31 December 2008 and declares: that consolidated financial statements were prepared assuming that Group will be able to continue business in future, that accepted accounting policies have been used consistently and the changes in accounting policies were disclosed, that the assessments of the value each items in financial statements prepared fair and deliberate and in accordance with the principles of prudence and good manager, that consolidated financial statements were prepared in accordance with the legislation in force and International Financial Reporting Standards.

The Management Board is responsible for the implementation of measures which provide maintenance the value of property of Group and for the prevention and detection of fraud and other irregularities.

Laško, 20 april 2009 Pivovarna Laško, d. d.

Management Board – Director Boško Šrot

Pivovarna Laško Group and Pivovarna Laško, d. d.

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Pivovarna Laško, d.d., Trubarjeva 28, 3270 Laško, May 2009

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