Annual report 2012 PRVI FAKTOR Group. Annual report 2012. Group

Annual report 2012 PRVI FAKTOR Group 1 Annual report 2012 Group

2 PRVI FAKTOR Group Annual report 2012

Annual report 2012 PRVI FAKTOR Group 3 PRVI FAKTOR Group Annual report 2012 CONTENTS 1 Business report 5 2 Auditor s report 26 3 Consolidated financial statments 30 4 Accounting policies 36 5 Note to the consolidated financial statements 64

4 PRVI FAKTOR Group Annual report 2012

Annual report 2012 PRVI FAKTOR Group 5 1.0 Business report

6 PRVI FAKTOR Group Annual report 2012 1.0 Statement by the directors of the parent company Dear Ladies and Gentlemen! In 2012, the Prvi faktor Group achieved its objectives as regards the volume of business and profits, as well as cost effectiveness, despite the further tightening and deepening of the economic and financial crisis. All Group companies and the Group as a whole achieved favourable results. The Group pulled out of certain industries that were the most badly hit by the crisis and strengthened its presence in other industries not so badly hit. It also consolidated its market position. Due to increasingly tight bank lending, the balance sheet total of the Group decreased slightly. This notwithstanding, the volume of business increased slightly, which points to an improved asset management. What is worrying is the fact that in 2012, the economic recovery lost all momentum that Slovenia enjoyed in 2011. GDP dropped again and is forecast to contract further. Shrinking domestic demand, investments and exports will affect also the volume of business of Prvi faktor. The situation in the Slovenian economy worsened significantly compared to 2011 and past projections. The latest projections also show significantly lower numbers than earlier projections. The situation is similar in other countries where the Prvi faktor Group is present. Despite the challenging economic situation, the Group operations are stable. This is certainly attributable to the fact that in the ongoing crisis, factoring has been recognised globally as a very important answer to the credit crunch. The increasing demand for factoring services is therefore not a trend merely in the markets where the Prvi faktor Group is present, but also in other countries, be it financially stable or not. Factoring services are increasingly interesting also for companies that used to have access to other sources of financing in the past.

Annual report 2012 PRVI FAKTOR Group 7 Economic conditions and good results apart, we remain focused on the future. This is uncertain and 2013 will certainly bring new challenges, mainly related to the increasingly poor liquidity in the real and financial sectors and contracting economic activity. And while this situation brings significant risks and threats, it also brings a good deal of opportunities. Risks will increase but demand for factoring will remain strong and even increase in certain segments. It is crucial that we manage risks well and at the same time select suitable clients and build a solid portfolio. The results achieved prove that the Group adequately adjusted to the circumstances and is now ready to meet the challenges and seize the opportunities that the future might bring. We believe in our energy, purpose and determination which will drive us in the future, supported also by our owners. We will have stable operations and achieve positive results in 2013. We will achieve our objectives working together with our clients who trust us and with our owners who believe in us, as well as through our employees who are highly-skilled and motivated. We will continue to provide a comprehensive range of factoring services. Ernest Ribič Director Matej Špragar Director

8 PRVI FAKTOR Group Annual report 2012 A hand shake and a look in the eye sometimes count more than a letter on the paper. It is people who build and maintain relationships. Uroš Vidović, Legal Department Director of Prvi faktor Group

Annual report 2012 PRVI FAKTOR Group 9 1.1 Group profile General information As at 31 December 2012, the Prvi faktor Group comprised the following members: Parent company Company name: PRVI FAKTOR, faktoring družba, d.o.o. Abbreviated name: PRVI FAKTOR d.o.o. Registered office: Slovenska 17, SI-1000 Ljubljana, Slovenia Share capital: EUR 3,168,419 Legal form: družba z omejeno odgovornostjo Company ID no.: 5842115 VAT no.: SI98503332 Size: large company under the Companies Act (Article 55(8)) Bank account: 02924-0012104915 Poslovno leto: calendar Director: Ernest Ribič Director: Matej Špragar E-mail: info@prvifaktor.si Phone: + +386 1 200 54 10 Fax: + +386 1 426 07 47

10 PRVI FAKTOR Group Annual report 2012 Subsidiary companies Company name: PRVI FAKTOR, društvo s ograničenom odgovornošču za faktoring, Zagreb Abbreviated name: PRVI FAKTOR d.o.o., Zagreb Registered office: Hektorovićeva 2/V, 10000 Zagreb, Croatia Court registry entry: 17 December 2003, Trgovski sud Zagreb Share capital: HRK 19,466,600 Legal form: Limited Liability Company Company ID no.: 1789783 Financial year: calendar Director: Tomaž Kačar E-mail: tomaz.kacar@prvifaktor.hr Phone: + 385 1 617 78 05 Fax: + 385 1 617 66 29 Osijek agency Ribarska 4, 31000 Osijek, Croatia Phone: + 385 31 200 691 Fax: + 385 31 200 692 Rijeka agency Korzo 11, 51000 Rijeka, Croatia Phone: + 385 51 495 550 Fax: + 385 51 495 553 Company name: PRVI FAKTOR faktoring, društvo s ograničenom odgovornošču, Beograd Abbreviated name: PRVI FAKTOR faktoring d.o.o., Beograd Registered office: Bulevar Mihajla Pupina 165/v, 11070 Novi Beograd, Serbia Court registry entry: 24 February 2005, Agencija za privredne registre, Serbia Share capital: RSD 269,276,730 Legal form: Limited Liability Company Company ID no.: 20010452 Financial year: calendar Director: Jelena Tanasković E-mail: jelena.tanasković@prvifaktor.rs Phone: + 387 33 767 210 Fax: + 387 33 767 211 Niš agency Svetozara Markovića 27/II, 18000 Niš, Serbia Phone: + 381 18 295 205 Fax: + 381 18 295 204 Novi Sad agency Ul. Katolička porta 6/3, 21000 Novi Sad, Serbia Phone: + 381 21 6617 355 Fax: + 381 21 6617 133 Split agency Put Brodarice 6, 21000 Split, Croatia Phone: + 385 21 492 550 Fax: + 385 21 492 551

Annual report 2012 PRVI FAKTOR Group 11 Company name: PRVI FAKTOR, društvo sa ograničenom odgovornošču za finansijski inžinjering, Sarajevo Abbreviated name: PRVI FAKTOR d.o.o., Sarajevo Registered office: Tešanjska 24A, 71000 Sarajevo, Bosna in Hercegovina Court registry entry: 27 February 2006, Kantonalni sud Sarajevo Share capital: KM 2,838,162 Legal form: Limited Liability Company Company ID no.: 1-25518 Financial year: calendar Director: Đenan Bogdanić E-mail: đenan.bogdanic@prvifaktor.ba Phone: + 387 33 564 500 Fax: + 387 33 564 501 Mostar agency Kralja Petra Krešimira IV bb, 88000 Mostar, Bosnia and Herzegovina Phone: + 387 36 334 090 Fax: + 387 36 334 091 Banja Luka agency Aleja svetog Save 7a, 78000 Banja Luka, Bosnia and Herzegovina Phone: + 387 51 346 870 Fax: + 387 51 346 871 Company name: PRVI FAKTOR d.o.o.e.l., Skopje (the company has not yet commenced operations) Registered office: Mito Hađivasilev Jasmin 20 1000 Skopje, Macedonia Phone: - Fax: - Director: Ernest Ribič E-mail: - On 17 March 2003, Prvi faktor d.o.o., Zagreb (hereinafter PF Zagreb), was entered in the register of a Zagreb court. The company, which is 100-percent owned by Prvi faktor, Ljubljana (hereinafter PF Ljubljana), commenced operations in March 2004. Its share capital stood at HRK 19,466,600.00 as at 31 December 2012. On 24 February 2005, Prvi faktor faktoring d.o.o., Belgrade (hereinafter PF Belgrade), was entered in the register of a Belgrade court. The company, which is 100-percent owned by PF Ljubljana, commenced operations in March 2005. The parent last increased its share capital on 30 October 2012 by RSD 170,809,950.00, so that it stood at RSD 269,276,730.00 as at 31 December 2012. On 27 February 2006, Prvi faktor d.o.o., Sarajevo (hereinafter PF Sarajevo), was entered in the register of a Sarajevo court. The company, which is 100-percent owned by PF Ljubljana, commenced operations in March 2006. Its share capital stood at KM 2,838,162.00 as at 31 December 2012. On 22 September 2006, Prvi faktor d.o.o., Skopje (hereinafter PF Skopje), was entered in the central register of Macedonia, its start-up capital being EUR 5,000.00. The company, which is 100-percent owned by PF Ljubljana, has not yet commenced operations. The Group had 122 employees as at 1 January and 123 as at 31 December 2012. Of the 123 employees, 31 were employed in PF Ljubljana, 44 in PF Zagreb, 33 in PF Belgrade and 15 in PF Sarajevo. In 2012, two employees left the Group and three persons were newly employed, of this two in PF Zagreb and one in PF Sarajevo.

12 PRVI FAKTOR Group Annual report 2012 Ownership structure The controlling (parent) company is owned by two Slovenian banks: Owner Share (%) Share (EUR) Nova Ljubljanska banka d.d., Ljubljana 50 1,584,209.50 SID Slovenska izvozna in razvojna banka, d.d., Ljubljana 50 1,584,209.50 Total share capital 100 3,168,419.00 Activities of Group companies The main activity of Group companies is providing factoring services to clients established in Slovenia and abroad with regard to their accounts receivable arising from the sale/provision of goods/services. Factoring services mainly comprise the following: recourse and non-recourse purchasing of accounts receivable arising from the sale/provision of goods/services, provision of cash in exchange for accounts receivable purchased, administration of accounts receivable purchased, collection of accounts receivable purchased, dealing in accounts receivable purchased, acting as an agent or representative for factoring in Slovenia and abroad, accounts receivable insurance, recovery of problematic accounts receivable.

Annual report 2012 PRVI FAKTOR Group 13 Providing services tailored at your needs we are a solid partner on your business path. Such partnership is the fruit of understanding and listening to each other, and guarantees a word of encouragement at the right time and assistance when you most need it. Damir Abdić, Head of Commercial Department and Marketing

14 PRVI FAKTOR Group Annual report 2012 1.2 Performance in 2012 The deepening economic and political crisis caused further tightening of the financing conditions, despite the fact that the related prices increased already in 2011. In such very demanding business conditions, we continued providing reliable and firm support to our clients. Following an appropriate and effective business policy, we increased the importance of factoring, also due to low capital adequacy of financial institutions.. These were the key drivers of our growth in the volume of business, which reached slightly more than EUR 929 million, up by 2 per cent from 2011. The Group has been continuously consolidating its partnerships with an emphasis on quality. It leads a sound and prudent risk management policy, in particular as regards credit and operational risks. The Group has been also continuously optimising its debt collection process, in particular in the pre-trial phase. New contracts concluded in 2012 as compared with 2011 and plan 2012 (EUR): Total 2011 Total 2012 Plan 2012 Index 2012/2011 Index 2012/plan2012 1 2 3 4=2/1 5=2/3 Domestic factoring 798,348,077 788,687,186 666,000,000 99 118 PF Ljubljana 174,339,650 183,286,393 150,000,000 105 122 PF Zagreb 345,377,085 335,814,470 285,000,000 97 118 PF Belgrade 244,651,010 231,305,433 190,000,000 95 122 PF Sarajevo 33,980,331 38,280,890 41,000,000 113 93 Export factoring 60,502,528 91,640,485 51,000,000 151 180 PF Ljubljana 41,215,195 66,180,743 32,000,000 161 207 PF Zagreb 8,702,164 8,476,373 7,000,000 97 121 PF Belgrade 0 0 0 0 0 PF Sarajevo 10,585,168 16,983,370 12,000,000 160 142 Import factoring 49,366,880 48,975,046 43,000,000 99 114 PF Ljubljana 21,346,741 17,771,137 18,000,000 83 99 PF Zagreb 22,097,855 23,293,630 18,000,000 105 129 PF Belgrade 0 0 0 0 0 PF Sarajevo 5,922,285 7,910,280 7,000,000 134 113 Total (1+2+3) 908,217,485 929,302,717 760,000,000 102 122 PF Ljubljana 236,901,586 267,238,272 200,000,000 113 134 PF Zagreb 376,177,104 367,584,473 310,000,000 98 119 PF Belgrade 244,651,010 231,305,433 190,000,000 95 122 PF Sarajevo 50,487,785 63,174,539 60,000,000 125 105

Annual report 2012 PRVI FAKTOR Group 15 Share (%) 100 100 100 PF Ljubljana 26 28 26 PF Zagreb 41 40 41 PF Belgrade 27 25 25 PF Sarajevo 6 7 8 With is expertise and commitment, the Prvi faktor Group is setting the standards in factoring. It is committed to continuously improving its products and services building on quality and risk management, as well as synergies within the Group. In 2012, the most successful of all was PF Zagreb with 40 per cent of the total amount of new contracts concluded, followed by PF Ljubljana and PF Belgrade. The volume of business of PF Sarajevo is showing continuous growth: in 2012, it grew by 25 per cent compared to 2011, to 7 per cent of the total Group's figure. PF Ljubljana also increased the volume of business by 13 per cent. The structure of new contracts concluded by factoring type was the following: domestic factoring represented 85 per cent, followed by export factoring with 10 per cent and import factoring with 5 per cent. This is comparable with the structure of other factors from all around the world. The Prvi faktor Group represents less than 0.1 per cent of the total volume of factoring in Europe. PF ZAGREB 40% Factoring services provided in 2012 by Group companies PF SARAJEVO 7% PF BELGRADE 25% PF LJUBLJANA 28% The structure of new contracts concluded by client activity remained almost unchanged: companies having as their main activity wholesale trade accounted for 29 per cent of the total new contracts concluded, followed by manufacturing (18 per cent) and foods and beverages (12 per cent). DOMESTIC 85% IMPORT 5% Factoring services provided in 2012 by type EXPORT 10%

16 PRVI FAKTOR Group Annual report 2012 Fabricated metal products 6% Retail trade 4% Professional, scientific and technical activities 5% Motor vehicles, trailer and semi-trailers 5% Rubber and plastic products works 3% Land transport and warehousing 3% Other activities 2% Manufacture of other non-metallic mineral products 2% Specialised construction 11% Factoring services provided in 2012 by client activity Wholesale trade 29% Foods and beverages 12% Manufacturing activities 18% Our well-diversified portfolio in terms of client activity reduces our exposure to credit risk. If we take a look at factoring services provided in 2012 by original debtor activity, we see that wholesale trade is the first with 24 per cent, followed by retail trade (21 per cent) and manufacturing (14 per cent).

Annual report 2012 PRVI FAKTOR Group 17 Public administration and defence, compulsory social security 4% Motor vehicles, trailer and semi-trailers 6% Foods and beverages 9% Professional, scientific and technical activities 3% Fabricated metal products 3% Land transport and transport via pipelines 3% Electrical equipment 2% Other activities 2% Specialised construction 9% Manufacturing activities 14% Factoring services provided in 2012 by original debtor activity Wholesale trade 24% Retail trade 21%

18 PRVI FAKTOR Group Annual report 2012 1.3 Plans for 2013 Plans for 2013 comprise above all maintenance of market shares held by Group companies and further improvement of services. The year will be dedicated to further consolidation and organisational effectiveness of the Group. Key elements of the 2013 plan: EUR 894,500 thousand of new contracts concluded; EUR 1,507 thousand of profit after tax. The Group s long-term objective remains growth through consolidation in its target markets while achieving a return on equity before tax of at least 15 per cent. Other objectives relate to the organisation of the Group itself and comprise: improvement of its risk management policy and internal rules, as well as development of IT support at the Group level to ensure prompt and effective decision making in the currently uncertain business environment.

Annual report 2012 PRVI FAKTOR Group 19 You have to be successful yourself in order to be able to contribute to the success of others. Tomaž Marinšek, Internal Auditor

20 PRVI FAKTOR Group Annual report 2012 1.4 Internal audit department The parent company s internal audit department was established in the second half of 2007. In 2008, the company s governance bodies adopted a general act regulating the department s operations which also represents its methodological basis. The internal audit department operates in accordance with this act across all companies members of the Prvi faktor Group. The department has employed one internal auditor till now. In 2012, the department conducted three regular and three extraordinary internal audit reviews. The internal audit department reported regularly on its findings to the parent s management, and periodically on its work to the permanent representatives (members of the shareholders meeting) and internal audit departments of the parent s owners. Of its available working time, the internal audit department spent 60 per cent conducting internal audit reviews, 20 per cent working with an external auditor on the regular auditing of the financial statements of the parent and of the Prvi faktor Group, including the preparation of the annual report, and 20 per cent on other tasks. The department fulfilled only 75 per cent of its plan for 2012, which, however, is attributable to the extraordinary internal audit reviews and other tasks (consulting). 1.5 Internal control system in 2012 Already in previous years, the final steps were undertaken towards business process standardisation in member companies of the Prvi faktor Group. Standardisation of documentation and controls was thus achieved across all Group companies. All Group companies use the same application (reporting package) for accounting and accounting reporting. They also produce the same risk management reports (used to monitor credit, non-credit and operational risks). All Group companies except the smallest one have a controlling department focused mainly on the preparation of risk management reports (including regular data entry control). These in turn are controlled by the parent company s controlling department. All internal acts of the companies members of the Prvi faktor Group were revised and updated, paying particular attention to those governing risk management. If necessary, those of subsidiaries were harmonised with those of the parent company. The internal audit department is governed by a general internal act based on which it conducts internal audit reviews in all Group companies and business units, makes recommendations based on the findings of such reviews, and systematically monitors implementation of such recommendations. The parent's internal control system is occasionally reviewed also by its owners' internal audit departments. The financial statements of all Group companies are audited by external auditors, while their other specific areas are occasionally reviewed by various external bodies (tax authorities, etc.)

Annual report 2012 PRVI FAKTOR Group 21 Building on our knowledge and experience, we are trying to meet the wishes and requirements of the users of our information system. We are therefore developing services that are simple and friendly to use. Jože Matjaž, CIO

22 PRVI FAKTOR Group Annual report 2012 1.6 Information technology in 2012 Information technology-related activities were conducted in accordance with the strategic IT plan. They were focused on improvements and upgrades of the existing functions and implementation of new ones both in the documentary and ERP systems. This was required by the continuing changes in the market and improvements in business processes. INFRASTRUCTURE Hardware underwent the following changes in 2012: Windows 7 operating system was installed on all newly acquired personal computers. On all new servers (BG), VMware virtualisation software was installed and then Windows or Unix operating systems. New database replication was designed for the backup location. Certain elements of the equipment were changed (a server, a router, a switch, etc.) DOCUMENTARY SYSTEM Documentary system underwent the following changes in 2012: New functions were added to the reporting system of the controlling department. New fields related to credit limit were added, including the possibility to add optional text. Entry of clients' suppliers and customers was enabled in»contacts«to allow designing of compensation chains. Archiving of inactive matters and scanned incoming mail was implemented. A possibility was added that allows multiple alarms for the same event. The server was upgraded to Domino 8.5.3, and the database itself of the documentary system was upgraded to allow its smooth functioning on workstations with Windows 7 64-bit operating system. ERP SYSTEM The Navision ERP system was upgraded several times, the same as the existing functions, and new functions were added. The most important were the following: In PF Belgrade, the VAT-related function was changed due to the introduction of a third rate (VAT records, VAT return, etc.) A new function was added to the monthly factoring analysis that allows profitability calculation at the assignor, sales representative or annex level. A new report was prepared for SID-PKZ that allows reporting of defaults by debtors whose accounts receivable are insured with SID-PKZ. Deferral of income to future periods longer than 24 months was enabled. Quick viewing of transactions and balances was enabled in the register of buyers and suppliers. Information about the commission realised upon acquisition was added to the register of booked assignments. In PF Zagreb, certain functions were upgraded to allow the company to collect all statutory required»fiscalisation«-related information. In PD Sarajevo, certain VAT-related upgrades were made. Import and export of data was enabled that are exchanged between PF and SID-PKZ, and a uniform register was implemented of insured accounts receivable. The amount display format was standardised in the business reporting system so that all amounts are shown in euro. Those originally denominated in other currencies are either translated on the transaction date or on the last day of the reporting month.

Annual report 2012 PRVI FAKTOR Group 23 1.7 Statement of management responsibilities The management approves the consolidated financial statements for the year ended 31 December 2012, presented on pages 31 to 34 of this annual report, as well as the accounting policies used in the preparation of these consolidated financial statements and notes thereto, presented on pages 37 to 97 of this annual report.

24 PRVI FAKTOR Group Annual report 2012 STATEMENT OF MANAGEMENT'S RESPONSIBILITIES The management is responsible for the preparation of the annual report so that it gives a true and fair view of the Group s financial position in and operating results for the financial year. The management confirms that proper accounting policies have been applied consistently, and that reasonable and prudent estimates have been made. The management also confirms that the consolidated financial statements and notes thereto have been prepared on a going concern basis, and in accordance with the legislation in force and International Financial Reporting Standards as adopted by the European Union. The management is also responsible for keeping proper accounting records, for safeguarding the assets of the Group, and for taking reasonable steps for the prevention and detection of fraud and other illegalities. Tax authorities may, at any time within five years following the tax assessment year, inspect the Group, which may result in additional tax liabilities, late payment interest and fines under the Corporate Income Tax Act, or in other taxes and charges. The management is not aware of any circumstances that could give rise to a material liability in this respect. Ernest Ribič, Director Matej Špragar, Director Ljubljana, 12 March 2013

Annual report 2012 PRVI FAKTOR Group 25

26 PRVI FAKTOR Group Annual report 2012 2.0 Auditor s report

INDEPENDENT AUDITOR S REPORT To the owners of Prvi faktor d.o.o., Ljubljana Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of Prvi faktor d.o.o., Ljubljana ( the Company ) and its subsidiaries ( the Group ) which comprise consolidated statement of financial position as of 31 December 2012 and consolidated statements of income, comprehensive income, changes in equity and cash flows for the year then ended and a summary of significant accounting policies and other explanatory notes. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and with the requirements of the Slovene Companies and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of Prvi faktor d.o.o., Ljubljana as of 31 December 2012, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and with the requirements of the Slovene Companies Act. Report on Other Legal and Regulatory Requirements Management is also responsible for preparing the Directors Report in accordance with the Slovene Companies Act. Our responsibility is to assess whether the management report is consistent with the accompanying consolidated financial statements of the Group. The management report is consistent with the accompanying consolidated financial statements. Ljubljana, 12 March 2013 PricewaterhouseCoopers d.o.o. Leon Živec Certified Auditor Francois Mattelaer Partner PricewaterhouseCoopers d.o.o., Cesta v Kleče 15, SI-1000 Ljubljana, Slovenia T: +386 (1)5836 000, F:+386 (1) 5836 000, www.pwc.com/si Matriculation No.: 5717159, VAT No..: SI35498161 The company is registered by District court in Ljubljana under the number 12156800 as well in to the register of the Auditing companies by Slovene Audit Institute under the number RD-A-014. The amount of the registered share capital is EUR 34.802. The list of employed auditors is available at the registered office of the company.

Translation note: This version of our report is a translation from the original, which was prepared in Slovene language. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of our report takes precedence over this translation. This translation is provided for the reference purpose only and is not to be signed.

Annual report 2012 PRVI FAKTOR Group 29 Success would be nothing but a bunch of numbers and letters if we did not know that behind it there are hard working and committed employees. Tanja Sibinčič, Head of Finance Department

30 PRVI FAKTOR Group Annual report 2012 3.0 Consolidated financial statements

Annual report 2012 PRVI FAKTOR Group 31 Consolidated statement of financial position Note 31 Dec 2012 31 Dec 2011 ASSETS 315,038 338,485 NON-CURRENT ASSETS 5,036 4,466 Intangible assets 5.1 45 75 Property, plant and equipment 5.2 315 376 Investment property 5.3 1,696 522 Deferred tax assets 5.22 2,980 2,977 Loans and receivables 5.4 0 516 CURRENT ASSETS 310,002 334,019 Inventories 8 7 Held-to-maturity financial assets 5.5 40,820 43,617 Loans and receivables 5.4 224,989 247,252 Available-for-sale financial assets 5.6 14,403 18,700 Current tax assets 5.22 731 689 Cash and cash equivalents 5.7 29,051 23,754 EQUITY AND LIABILITIES 315,038 338,485 EQUITY 5.8 8,722 6,443 Called-up capital 3,168 3,168 Equity premium 1,890 1,890 Other reserves 87 87 Equity revaluation adjustment 0-1,544 Currency translation reserves -1,439-1,084 Retained earnings 5,016 3,926 NON-CURRENT LIABILITIES 93,745 7,211 Non-current borrowings 5.9 93,529 6,974 Provisions 5.11 216 237 CURRENT LIABILITIES 212,571 324,831 Non-current borrowings 5.9 209,626 321,799 Trade and other payables 5.10 2,945 3,032 The notes on pages 37 to 97 are an integral part of these consolidated financial statements. The consolidated financial statements on pages 31 to 34 were confirmed and signed by the parent company s directors on 12 March 2013 (see Statement of management s responsibilities). Director of the parent company Ernest Ribič Director of the parent company Matej Špragar

32 PRVI FAKTOR Group Annual report 2012 Consolidated statement of comprehensive income Note 2012 2011 Interest and similar income 5.13 31,963 36,960 Interest and similar expenses 5.14-18,106-19,499 Net interest 13,857 17,461 Dividend income 5.15 704 0 Other operating income 5.16 123 240 Costs of services 5.17-2,012-2,111 Labour costs 5.18-4,165-4,092 Impairment charges 5.19-5,388-8,483 Other operating expenses 5.20-2,018-2,190 Foreign exchange gains, net 5.21 1,685 2,415 Net losses on financial assets / liabilities -16-33 Profit from regular activities 2,770 3,207 Income tax 5.22-1,680-1,348 Net profit for the period 1,090 1,859 Other comprehensive income 1,189-1,572 Currency translation differences -355-28 Net gains / losses on AFSFA recognised in revaluation surplus 1,544-1,544 Total comprehensive income 2,279 287 The notes on pages 37 to 97 are an integral part of these consolidated financial statements. The consolidated financial statements on pages 31 to 34 were confirmed and signed by the parent company s directors on 12 March 2013 (see Statement of management s responsibilities). Director of the parent company Ernest Ribič Director of the parent company Matej Špragar

Annual report 2012 PRVI FAKTOR Group 33 Consolidated cash flow statement 2012 2011 Net profit for the period 1,090 1,859 Adjustments: Amortisation / depreciation 222 289 Impairment charges 5,388 8,483 Other non-monetary items -710 2,334 Interest expense 18,106 19,499 Interest income -31,963-36,960 Exchange rate differences -1,685-2,415-10,642-8,770 Changes in net operating assets: Opening less closing assets held for sale 4,299-18,700 Opening less closing loans and receivables 22,263 8,164 Opening less closing held-to-maturity financial assets 2,797 3,203 Opening less closing other liabilities 87-580 Interest received 39,056 44,006 Interest paid -20,799-21,891 Income tax -1,550-1,582 Net cash from operating activities 46,153 12,620 Cash flows from investing activities: Cash payments to acquire property, plant and equipment, and intangible assets -1,668-639 Net cash from investing activities -1,668-639 Cash flows from financing activities: Dividends received 704 0 Cash proceeds from increase in borrowings 605,327 374,458 Cash repayments of borrowings -635,667-362,058 Net cash from financing activities -29,636 12,400 Net cash inflow or outflow for the period 5,297 17,470 Opening balance of cash and cash equivalents 23,754 6,284 Closing balance of cash and cash equivalents 29,051 23,754 The notes on pages 37 to 97 are an integral part of these consolidated financial statements. The consolidated financial statements on pages 31 to 34 were confirmed and signed by the parent company s directors on 12 March 2013 (see Statement of management s responsibilities). Director of the parent company Ernest Ribič Director of the parent company Matej Špragar

34 PRVI FAKTOR Group Annual report 2012 Consolidated statement of changes in equity Called-up capital Equity premium Other reserves Currency translation reserves Equity revaluation adjustment Retained earnings Total 1 January 2011 3,168 1,890 87-1,056 0 2,067 6,156 Comprehensive income Profit / loss for the period 0 0 0 0 0 1,859 1,859 Other comprehensive income Currency translation differences 0 0 0-28 0 0-28 Net gains / losses on available-for-sale financial assets recognised in revaluation reserve 0 0 0 0-1,544 0-1,544 Total comprehensive income 0 0 0-28 -1,544 0-1,572 31 December 2011 3,168 1,890 87-1,084-1,544 3,926 6,443 1 January 2012 3,168 1,890 87-1,084-1,544 3,926 6,443 Comprehensive income Profit / loss for the period 0 0 0 0 0 1,090 1,090 Other comprehensive income Currency translation differences 0 0 0-355 0 0-355 Net gains / losses on available-for-sale financial assets recognised in revaluation reserve 0 0 0 0 1,544 0 1,544 Total comprehensive income 0 0 0-355 1,544 0 1,189 31 December 2012 3,168 1,890 87-1,439 0 5,016 8,722 The notes on pages 37 to 97 are an integral part of these consolidated financial statements. The consolidated financial statements on pages 31 to 34 were confirmed and signed by the parent company s directors on 12 March 2013 (see Statement of management s responsibilities). Director of the parent company Ernest Ribič Director of the parent company Matej Špragar

Annual report 2012 PRVI FAKTOR Group 35

36 PRVI FAKTOR Group Annual report 2012 4.0 Accounting policies

Annual report 2012 PRVI FAKTOR Group 37 4.1 General information The 2012 consolidated financial statements for the Prvi faktor Group comprise the financial statements of the controlling company (Prvi faktor d.o.o., Ljubljana) and its three subsidiaries (Prvi faktor d.o.o., Zagreb, Prvi faktor faktoring d.o.o., Belgrade, and Prvi faktor d.o.o., Sarajevo). The controlling company is a limited liability company established in Slovenia in accordance with the Slovenian law. It was entered in the register kept by the Ljubljana District Court on 23 March 1994, and commenced operations on 1 September 1994. The company's registered office is at Slovenska 17, Ljubljana, Slovenia. The owners of the company are two banks: Nova Ljubljanska banka d.d., Ljubljana (NLB), and SID Slovenska izvozna in razvojna banka, d.d., Ljubljana (SID bank). The PF Zagreb subsidiary is a limited liability company established in Croatia in accordance with the Croatian law. It was entered in the register kept by the Zagreb Commercial Court on 17 December 2003, and commenced operations on 1 March 2004. The company's registered office is at at Hektorovićeva 2, Zagreb, Croatia. The PF Belgrade subsidiary is a limited liability company established in Serbia in accordance with the Serbian law. It was entered in the register kept by the Business Register Agency in Belgrade on 24 February 2005, and commenced operations on 1 March 2005. The company's registered office is at Bulevar Mihajla Pupina 165/v, Novi Beograd, Serbia. The PF Sarajevo subsidiary is a limited liability company established in Bosnia and Herzegovina in accordance with the Bosnian-Herzegovian law. It was entered in the register kept by the Sarajevo Cantonal Court on 27 February 2006, and commenced operations on 1 March 2006. The company s registered office is at Tešanjska 24A, Sarajevo, Bosnia and Herzegovina. PF Ljubljana holds a 100-percent share in all subsidiaries. The Group s main activities are domestic and foreign factoring.

38 PRVI FAKTOR Group Annual report 2012 4.2 Summary of significant accounting policies 4.2.1 Basis of preparation The consolidated financial statements for the year ended 31 December 2012 have been prepared in accordance with International Financial Reporting Standards (hereinafter IFRS), as adopted by the European Union. In addition to the consolidated financial statements, separate financial statements have also been prepared, in accordance with applicable local laws. The policies set out below have been consistently applied to all the years presented. The consolidated financial statements have been prepared under the historical cost convention. Preparation of the consolidated financial statements in accordance with IFRS, as adopted by the European Union, requires the use of certain critical accounting estimates. It also requires the management to exercise its judgement when applying the Group s accounting policies. In 2012, the Group implemented all new and revised standards and interpretations issued by the competent EU bodies (the International Accounting Standards Committee (IASC) and the International Financial Reporting Interpretations Committee (IFRIC)) and applicable for the accounting period beginning on 1 January 2012. Accounting standards and amendments to existing standards effective for annual periods beginning on or after 1 January 2012 that were endorsed by EU and adopted by us: - IFRS 7 (amendment) Transfers of Financial Assets (in effect since 1 July 2011). The amendment requires additional disclosures in respect of risk exposures arising from transferred financial assets. The amendment includes a requirement to disclose by class of asset the nature, carrying amount and a description of the risks and rewards of financial assets that have been transferred to another party yet remain on the entity's statement of financial position. Disclosures are also required to enable a user to understand the amount of any associated liabilities, and the relationship between the financial assets and associated liabilities. Where financial assets have been derecognised but the entity is still exposed to certain risks and rewards associated with the transferred asset, additional disclosures are required to enable the effects of those risks to be understood. The amendments affect the presentation of the Group's financial statements. - IFRS 1 First-time Adoption of International Financial Reporting Standards. Revisions relating to severe hyperinflation and removal of fixed dates for first-time adopters; and IAS 12 Income Taxes. Revisions relating to recovery of underlying assets, i.e., investment property measured at fair value. The amendments do not affect the Group s financial statements. Accounting standards and amendments to existing standards issued that were endorsed by EU but not adopted early by us: - IFRS 19 Employee Benefits (effective for annual period beginning on or after 1 January 2013). Amendments relating to recognition and measurement of certain benefits and disclosure of all employee benefits. The amendments will not affect the Group s financial statements. - IAS 1 (amendment) Presentation of Financial Statements (effective for annual periods beginning on or after 1 July 2012). The amendments retain the option to present profit or loss and other comprehensive income in either a single statement or in two separate but consecutive statements. However, the amendments require additional disclosures to be made in the other comprehensive income section such that items of other comprehensive income are grouped into two categories: items that will not be reclassified subsequently to profit or loss; and items that will be reclassified subsequently to profit or loss when specific conditions are met. Income tax on items of other comprehensive income is required to be allocated on the same basis. The amendments affect the

Annual report 2012 PRVI FAKTOR Group 39 presentation of the Group's consolidated financial statements - IFRS 7 (amendment) Offsetting Financial Assets and Financial Liabilities (effective for annual periods beginning on or after 1 January 2013). The amendment requires additional disclosures to allow financial statement users to better assess the effect or potential effect of offsetting arrangements, including gross settlement. The amendments affect the presentation of the Group's financial statements. - IAS 32 (amendment) Offsetting Financial Assets and Financial Liabilities (effective for annual periods beginning on or after 1 January 2014). The amendment added application guidance to IAS 32 to address inconsistencies identified in applying some of the offsetting criteria. It clarifies the meaning of currently and legally enforceable right to set-off and that some gross settlement systems may be considered equivalent to net settlement. - IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosures of Interests in Other Entities, a revised version of IAS 27 Separate Financial Statements which has been amended for the issuance of IFRS 10 but retains the current guidance for separate financial statements, and a revised version of IAS 28 Investment in Associates and Joint Ventures, which has been amended for conforming changes based on the issuance of IFRS 10 and IFRS 11. Standards are effective for annual periods beginning on or after 1 January 2014, with earlier application permitted as long as each of the other standards is also applied early. However, entities are permitted to include any of the disclosure requirements in IFRS 12 into their consolidated financial statements without early adopting IFRS 12. The Group is currently evaluating the potential impact that the adoption of the standards will have on its consolidated financial statements. - IFRS 10 (new standard). The new standard replaces the parts of IAS 27 Consolidated and Separate Financial Statements that deal with consolidated financial statements. SIC-12 Consolidation Special Purpose Entities was withdrawn upon the issuance of IFRS 10. Under IFRS 10, there is only one basis for consolidation, that is control. In addition, IFRS 10 includes a new definition of control that contains three elements: power over an investee, exposure, or rights, to variable returns from its involvement with the investee, and the ability to use its power over the investee to affect the amount of the investor's returns. Extensive guidance has been added in IFRS 10 to deal with complex scenarios. - IFRS 11 (new standard). The new standard replaces IAS 31 Interests in Joint Ventures. IFRS 11 deals with how a joint arrangement of which two or more parties have joint control should be classified. SIC-13 Jointly Controlled Entities Non-monetary Contributions by Venturers was withdrawn upon the issuance of IFRS 11. Under IFRS 11, joint arrangements are classified as joint operations or joint ventures, depending on the rights and obligations of the parties to the arrangements. In contrast, under IAS 31, there are three types of joint arrangements: jointly controlled entities, jointly controlled assets and jointly controlled operations. In addition, joint ventures under IFRS 11 must be accounted for using the equity method of accounting, whereas jointly controlled entities under IAS 31 may be accounted for using the equity method of accounting or proportionate accounting. - IFRS 12 (new standard). The new standard is a disclosure standard and is applicable to entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. In general, the disclosure requirements in IFRS 12 are more extensive than those required in the current standards. - IFRS 13 (new standard) Fair Value Measurement (effective for annual periods beginning on or after 1 January 2013). The standard establishes a single source of guidance for fair value measurements and disclosures about fair value measurements. The standard defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements. The scope of standard is broad; it applies to both financial instrument items and non-financial instrument items for which other standards require or permit fair value measurements and disclosures about fair value measurements, except in speci-

40 PRVI FAKTOR Group Annual report 2012 fied circumstances. In general, the disclosure requirements in IFRS 13 are more extensive than those required in the current standards. For example, quantitative and qualitative disclosures based on the three-level fair value hierarchy currently required for financial instruments only under IFRS 7 Financial Instruments: Disclosures will be extended by IFRS 13 to cover all assets and liabilities within its scope. The Group is currently evaluating the potential impact that the adoption of the standard will have on its consolidated financial statements. - Other revised standards, amendments and interpretations: amendment to IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine. The amendment will not affect the Group s financial statements. Accounting standards and amendments to existing standards issued but not yet endorsed by EU: - IFRS 9 Financial Instruments. IFRS 9 issued in November 2009 replaces those parts of IAS 39 relating to the classification and measurement of financial assets. IFRS 9 was further amended in October 2010 to address the classification and measurement of financial liabilities. Its key requirements are the following: - Financial assets are required to be classified into two measurement categories: those to be measured subsequently at fair value, and those to be measured subsequently at amortised cost. The decision is to be made at initial recognition. The classification depends on the entity s business model for managing its financial instruments. - An instrument is subsequently measured at amortized cost only if it is a debt instrument and both (i) the objective of the entity s business model is to hold the asset to collect the contractual cash flows, and (ii) the asset s contractual cash flows represent only payments of principal and interest (i.e. it bear only basic loan features ). All other debt instruments are to be measured at fair value through profit or loss. - All equity instruments are to be measured subsequently at fair value. Equity instruments that are held for trading will be measured at fair value through profit or loss. All other equity investments will be measured at fair value through other comprehensive income with no recycling to profit or loss. Dividends are to be presented in profit or loss, as long as they represent a return on investment. - Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward unchanged to IFRS 9. The key change is that an entity will be required to present the effects of changes in own credit risk of financial liabilities designated as at fair value through profit or loss in other comprehensive income. - Adoption of IFRS 9 is mandatory from January 1, 2015, with earlier adoption permitted. The Group is considering the implications of the standard and the timing of its adoption. - Amendments to IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosures of Interests in Other Entities Transition Guidance (effective for annual periods beginning on or after 1 January 2014). Amendments were issued to ease transition to new standards by restrictions of requirements regarding assurance of adjusted comparable data for comparable period. - Amendments to IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosures of Interests in Other Entities Investment Entities (effective for annual periods beginning on or after 1 January 2014). Amendments include the creation of a definition of an investment entity, the requirement that such entities measure investment in subsidiaries at fair value through profit and loss instead of consolidating them, new disclosure requirements for investment entities and requirements for an investment entity s separate financial statements. - Annual improvements to IFRS 2009-2011. The improvements consist of a mixture of substantive changes and clarifications and are affective for annual periods beginning on or after 1 January 2013. Amendments to IFRS 1 Fist time Adoption of International Financial Reporting Standards

Annual report 2012 PRVI FAKTOR Group 41 include explanations of additional comparative information disclosures. If additional comparative information is provided, the information should include disclosure of comparative information for any additional statements included beyond the minimum comparative financial statement requirements. Presenting additional comparative information voluntarily would not trigger a requirement to provide a complete set of financial statements. Amendments to IAS 16 Property, plant and equipment classifies spare parts, stand-by equipment and servicing equipment as property, plant and equipment when they meet the definition of property, plant and equipment in IAS 16 and as inventory otherwise. Amendments to IAS 32 Financial Instruments: Presentation require that income tax relating to distributions to holders of an equity instrument and to transaction costs of an equity transaction should be accounted for in accordance with IAS 12 Income Taxes Amendments to IAS 34 Interim Financial Reporting require separate disclosure of total assets and total liabilities for a particular reportable segment in interim financial reporting in accordance with IFRS 8 Operating Segments only when the amounts are regularly provided to the chief operating decision maker and there has been a material change from the amounts disclosed in the last annual financial statements for that reportable segment. Amendments to MRS 1 First-time Adoption of International Financial Reporting Standards require that borrowing costs incurred on or after the date of transition to IFRSs that relate to qualifying assets under construction at the date of transition should be accounted for in accordance with IAS 23 Borrowing Costs. - IFRS 1 Fist time Adoption of IFRS, relating to prospective application related to government loans will not affect the Group s financial statements. 4.2.2 Consolidation Subsidiaries those companies in which the parent (controlling) company, directly or indirectly, has more than half of the voting rights or otherwise has power to exercise control over the operations have been fully consolidated. Subsidiaries are consolidated from the date the actual control is transferred to the Group, and are no longer consolidated when this control ceases. All intra-group transactions and balances, as well as all unrealised gains arising from such transactions, have been eliminated, the same as all unrealised losses, except for those arising on impairment of assets transferred. The full consolidation method has been used to ensure compliance with IFRS, as adopted by the European Union. 4.2.3 Foreign currency translation (i) Functional and presentation currency Items reported in these consolidated financial statements are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in euros (EUR). (ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates ruling on the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year-end exchange rates are recognised in the statement of comprehensive income. Exchange rate differences arising from the translation of non-monetary items are recognised as part of the fair value gain or loss. (iii) Group companies Transactions and balances of all Group companies having a functional currency different from the presentation currency are translated in the following way: - assets and liabilities reported in each statement of financial position are translated using the exchange rate ruling at the statement of financial position date; - income and expenses reported in each statement of comprehensive income are translated using the average exchange rate ruling in the state-

42 PRVI FAKTOR Group Annual report 2012 ment of comprehensive income period; - any exchange rate differences so arising are recognised as a special item under equity. In consolidation, exchange rate differences arising from the translation of interests and debts are recognised in equity. On disposal of such interests, they are recognised in the statement of comprehensive income under gains/losses arising on disposal. 4.2.4 Intangible assets Intangible assets comprise computer software licences. These assets are capitalised on the basis of costs incurred to acquire and bring to use the specific software. These costs are amortised over the estimated useful life of such software (4 years). Intangible assets are carried at cost, less accumulated amortisation and impairment losses. Amortisation of intangible assets starts upon their availability for use. Property, plant and equipment are depreciated using the straight line method. Annual depreciation rates based on the useful life of assets were as follows in 2012: Leasehold improvements 12.24% to 20.00% Computer equipment 25% Motor vehicles 20% Other equipment 20% Depreciation of property, plant and equipment starts upon their availability for use. An assets carrying amount is written down immediately to its recoverable amount if the asset s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amounts. They are recognised in the statement of comprehensive income. 4.2.5 Property, plant and equipment An item of property, plant and equipment is recognised in the statement of financial position at historical cost less accumulated depreciation and impairment. The cost of an item of property, plant and equipment includes expenditure that is directly attributable to its acquisition. Subsequent costs are included in the assets' carrying amount or recognised as a separate asset, as appropriate, but only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are recognised in the statement of comprehensive income during the financial period in which they are incurred. 4.2.6. Investment property Investment property is property that the Group does not use directly in the carrying out of its activities, but holds to earn rental income. Investment property is measured at fair value determined by a certified appraiser and based on market prices. Any gains or losses arising on measurement at fair value are recognised in the statement of comprehensive income. If the intended use of investment property changes, this shall be transferred to owner-occupied assets.

Annual report 2012 PRVI FAKTOR Group 43 4.2.7 Held-to-maturity financial assets Held-to-maturity financial assets are non-derivative financial instruments with fixed or determinable payments and fixed maturity not quoted in an active market. They are recognised at amortised cost using the effective interest method. The Group intends to hold these assets until maturity. Should this not be the case, the Group would have to reclassify the entire category as available-for-sale. Allowances shall be established or impairments losses recognised if the Group assesses that certain financial assets cannot be collected in accordance with the contractual provisions and expects losses to occur. Impairments of held-to-maturity financial assets are recognised in the same matter as those for loans and receivables (see note 4.2.8 below). 4.2.8 Loans and receivables Loans and receivables are initially recognised at fair value, increased by any directly attributable transaction costs. Subsequently they shall be measured at amortised cost using the effective interest method. In the statement of financial position, loans and receivables are classified as either current (short-term) or non-current (long-term) assets. Advances shall be recognised in the statement of financial position under items to which they relate: advance payments for equipment are shown under equipment, advance payments for intangible assets are shown under intangible assets, while advance payments for inventories are shown under inventories Receivables arising from recourse factoring are included in the statement of financial position at their net value, i.e., at the amount of cash provided in exchange for accounts receivable purchased. Receivables arising from non-recourse factoring are included at their gross value. Individually significant loans and receivables that show signs of impairment are impaired individually, while others are impaired collectively. An individually assessed loan or receivable not showing signs of impairment is included in a group of loans and receivables with similar credit risk characteristics and impaired collectively. Allowances shall be established or impairments losses recognised if the Group assesses that certain receivables cannot be collected in accordance with the contractual provisions and therefore expects losses to occur. Evidence must exist of impairment, such as: significant financial difficulties of the debtor, a breach of contractual obligations by the debtor, concessions granted due to financial difficulties of the debtor, probable or existing bankruptcy or financial reorganisation of the debtor, unfavourable changes in the debt repayment pattern by the debtor, unfavourable changes in economic conditions that affect debt repayment by the debtor. The allowance or impairment amount shall be estimated for individually significant loans and receivables using an item-by-item approach. Collective impairments are recognised based on the average of receivables reclassified from previously unimpaired to impaired in the last four quarters. Using an item-by-item approach, the Group may write off loans and receivables with a fair or collectable value that is unquestionably zero. Loans and receivables are classified as financial and as non-financial assets. Factoring receivables Factoring receivables are receivables arising from the Group s core business. Their payments are fixed or determinable, and they are not actively traded. The Group finances receivables of its clients either with the right to return the receivable back if not paid (factoring receivables with recourse) or without such a right (factoring receivables without recourse). Factoring receivables are subsequently measured at amortised cost using the effective interest rate method, less impairment allowances. Factoring receivables are derecognized when the rights to receive cash flows from the financial assets have expired or when the Group has transferred sub-

44 PRVI FAKTOR Group Annual report 2012 stantially all the risks and rewards of ownership. Financial liabilities relating to factoring receivables are derecognised when they are extinguished, i.e., when the obligation is discharged, cancelled or expires. Factoring-related loans Factoring-related loans arise under contracts on supplier factoring. By entering into such contracts, the Group assumes certain obligations from the client. This is non-recourse factoring, which means that the Group can get paid only from the debtor. 4.2.9 Cash and cash equivalents Cash comprises cash on hand, deposits and cash in transit. Cash on hand comprises banknotes, coins and cheques received. Cash in transit is cash being transferred from a cash register to a relevant account in a bank or another financial institution that will not be credited to that account on the same day. Cash also comprises cash equivalents that are readily convertible to known amounts of cash with an insignificant risk of changes in value. 4.2.10 Inventories Inventories are recognised at the lower of cost and net realisable value. They are calculated using the first-in, first-out method. 4.2.11 Borrowings Borrowings from banks are originally recognised at fair value, net of transaction costs incurred. Subsequently they shall be measured at amortised cost. Any difference between the original amount (net of transaction costs) and the amount due for repayment is recognised in the consolidated statement of comprehensive income over the period of borrowing using the effective interest method. Borrowings from banks are classified as current liabilities, unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the statement of financial position date. 4.2.12 Trade and other payables Trade and other payables are initially recognised at fair value. Subsequently they shall be measured at amortised cost using the effective interest method. Factoring payables Factoring payables represent amounts owed to the assignors of factored receivables, net of cash advances paid. These payables usually represent 10% to 20% of the assigned amounts and are used for settlement of interest and fees charged to the assignors, when due. On collection of the underlying factored receivable from the original debtor, the remaining amount of these payables is payable to the assignor. Trade and other payables are classified as financial and as non-financial liabilities. 4.2.13 Employee benefits The Group offers its employees all the mandatory benefits: long service and retirement benefits. Valuation of provisions for these obligations is carried out by independent qualified actuaries. The actuarial assumptions they use are the following: - salary increase based on inflation, promotion and seniority; - a discount rate of 4.90% p.a. (PF Ljubljana), 6.65% p.a. (PF Zagreb), 13.00% p.a. (PF Belgrade) and 15.00% p.a. (PF Sarajevo) respectively; and - the number of employees eligible to claim benefits.

Annual report 2012 PRVI FAKTOR Group 45 Under the applicable regulations of countries of establishment of Group companies, employees retire when they have 35 to 40 years of service. Upon retirement, they are entitled to a retirement benefit payable in a lump sum. Employees are also entitled to a long service benefit for every ten years of service with the Group. These employee benefits are included in the statement of comprehensive income at the present value of future cash outflows, including any attributable gains or losses. Social security payments, which are calculated together with salaries, are charged to the statement of comprehensive income when incurred. 4.2.14 Equity Total equity consists of called-up capital, equity premium, other reserves, currency translation reserves and retained earnings. Called-up capital was paid in by the companies owners and is carried at nominal value. Equity premium arises through payments of company members and shall be mainly used to settle potential future losses. Equity premium consists of the amounts acquired by the parent company through payments in excess of the nominal value of founding shares and interests (share premium); the amounts in excess of the carrying amount gained on disposal of the previously purchased own shares and interests; the amounts obtained with the issue of convertible bonds or warrant bonds sold at a premium over their nominal value; the amounts of additional paid-in capital by company members with the purpose of acquiring additional rights arising from their shares or interests; the amounts of other payments made by the company members on the basis of the articles of association, the amounts arising from a simplified decrease in nominal capital by cancellation of shares or interests; the amounts arising from the reversal of the general equity revaluation adjustment; and the effects of an approved compulsory settlement. Other reserves must be used for the purposes laid down in applicable legislation. They comprise legal and other reserves. 4.2.15 Available-for-sale financial assets and associated gains / losses Available-for-sale financial assets are non-derivative assets intended to be held for an indefinite period, but may be sold to address the need for liquidity or to respond to changes in interest rates, foreign exchange rates or prices. Financial assets other than those carried at fair value through profit or loss are initially recognised at fair value, plus transaction costs. Acquisitions and disposals of available-for-sale financial assets are recognised on the trade date. Gains / losses resulting from the fair value measurement of available-forsale financial assets are recognised in other comprehensive income and recycled to profit or loss when the financial asset is derecognised or impaired. Interest calculated using the effective interest method and exchange rate differences arising from the translation of monetary items classified as available-for-sale assets are recognised directly in profit or loss. 4.2.16 Taxation Tax expenses of a company in the accounting period comprise current and deferred tax. Current tax is calculated in accordance with applicable legislation in the countries where Group companies operate and generate taxable income. The Group accounts for the deferred tax by applying the balance sheet liability method, which focuses on temporary differences. Temporary differences are differences between the tax base of an asset or liability and its carrying amount in the statement of financial position. In the Group, temporary differences arise mainly on valuation of receivables.

46 PRVI FAKTOR Group Annual report 2012 Deferred tax assets are recognised when it is probable that taxable profit will be available against which the deductible temporary differences can be utilised. The carrying amounts of deferred tax assets and the amounts of taxable profit against which the deductible differences can be utilised are reviewed at each statement of financial position date. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period in which the asset is realised or the liability is settled. 4.2.17 Recognition of income and expenses (i) Interest income Interest income is recognised on a time-proportion basis using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash flows through the expected life of the financial asset or financial liability. When a receivable is impaired, the Group reduces its carrying amount to its recoverable amount, which is the estimated future cash flows discounted at the financial asset s original effective interest rate. Interest income on impaired loans and receivables is recognised using the original effective interest rate. Interest income mainly includes interest on amounts paid to the assignors of factoring receivables, as well as interest on short-term loans and discounted bills of exchange. Fees are usually recognised in the statement of comprehensive income when the relevant service has been provided. Fees mainly comprise those relating to the core factoring business. Fees included in the calculation of the effective interest rate of a financial asset are recognised as interest income. (ii) Interest expense Interest expense mainly relates to borrowings and is recognised in the statement of comprehensive income as it accrues, taking into account the effective interest method. 4.2.18 Dividend income Dividend income (shares of profits earned by companies in which Group companies hold interests or shares) is recognised in the statement of comprehensive income when the right to receive payment is established. 4.2.19 Financial guarantee contracts Financial guarantee contracts are contracts that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due, in accordance with the terms. Such financial guarantees are issued to others on behalf of clients to secure their loans, overdrafts and other facilities. Financial guarantees are initially recognised in the financial statements at fair value when issued. Subsequently, the Group`s liabilities under financial guarantee contracts are measured at the higher of the following two values: the initial measurement, less amortisation of the fee income recognised on a straight-line basis over the financial guarantee term, and the best estimate of the expenditure required to settle the present obligation at the statement of financial position date. Such estimate is determined based on experience of similar transactions, supplemented by the judgement of the management. Any increase in liabilities related to financial guarantee contracts is taken to the statement of comprehensive income under other operating expenses.

Annual report 2012 PRVI FAKTOR Group 47 4.2.20 Critical accounting estimates and judgements The Group reviews its portfolio of loans and receivables to assess impairment at least on a quarterly basis. The Group first makes judgments in determining whether there is observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of loans and receivables, and only then determines whether a decrease can be identified with individual assets in that portfolio. This evidence may include observable data indicating that there has been an adverse change in the payment status of borrowers in the portfolio, or national or local economic conditions that correlate with defaults on the assets in the portfolio. The management uses estimates based on historical loss experience for assets with credit risk characteristics and objective evidence of impairment similar to those in the portfolio for which the future cash flows are being estimated. The methodology and assumptions used for estimating both the amount and timing of future cash flows are reviewed regularly to reduce any differences between loss estimates and actual loss experience. Individually significant financial assets that show signs of impairment are impaired individually, while others are impaired collectively. An individually assessed financial asset not showing signs of impairment is included in a group of financial assets with similar credit risk characteristics and impaired collectively. The amount of impairment losses shall be measured as the difference between a financial asset s carrying amount and the present value of estimated future cash flows discounted at the original effective interest rate of the financial asset or, if this is no longer applicable, at the interest rate defined internally. Impairment losses are recognised in the statement of comprehensive income. Given the short-term nature of its portfolio, and given its regular monitoring of receivables, the Group uses one quarter as loss identification period for the purpose of collective impairment. Collective impairments are recognised based on the average of receivables reclassified from previously unimpaired to impaired in the last four quarters. A deterioration of portfolio quality would affect the amount of collective impairments. In the worst case, they would increase by around EUR 600 thousand. This, however, would not affect significantly total impairments, as the majority is made individually.

48 PRVI FAKTOR Group Annual report 2012 Our good results are really worth something only when we can share them with you who put trust in us. Blaž Peterc, Head of Controlling Department

Annual report 2012 PRVI FAKTOR Group 49 4.3 Financial risk management In accordance with IAS 32 and IFRS 7, this section presents items of the statement of financial position, broken down into financial and non-financial assets and liabilities. 31 Dec 2012 FINANCIAL ITEMS NONFINANCIAL ITEMS TOTAL ASSETS 294,620 6,015 300,635 NON-CURRENT ASSETS 0 5,036 5,036 Intangible assets 0 45 45 Property, plant and equipment 0 315 315 Investment property 0 1,696 1,696 Deferred tax assets 0 2,980 2,980 CURRENT ASSETS 294,620 979 295,599 Inventories 0 8 8 Held-to-maturity financial assets 40,820 0 40,820 Loans and receivables 224,749 240 224,989 Current tax assets 0 731 731 Cash and cash equivalents 29,051 0 29,051 LIABILITIES 305,941 375 306,316 NON-CURRENT LIABILITIES 93,529 216 93,745 Non-current borrowings 93,529 0 93,529 Provisions 0 216 216 CURRENT LIABILITIES 212,412 159 212,571 Current borrowings 209,626 0 209,626 Trade and other payables 2,786 159 2,945

50 PRVI FAKTOR Group Annual report 2012 31 Dec 2011 FINANCIAL ITEMS NONFINANCIAL ITEMS TOTAL ASSETS 314,979 4,806 319,785 NON-CURRENT ASSETS 516 3,950 4,466 Intangible assets 0 75 75 Property, plant and equipment 0 376 376 Investment property 0 522 522 Deferred tax assets 0 2,977 2,977 Loans and receivables 516 0 516 CURRENT ASSETS 314,463 856 315,319 Inventories 0 7 7 Held-to-maturity financial assets 43,617 0 43,617 Loans and receivables 247,092 160 247,252 Current tax assets 0 689 689 Cash and cash equivalents 23,754 0 23,754 LIABILITIES 331,598 444 332,042 NON-CURRENT LIABILITIES 6,974 237 7,211 Non-current borrowings 6,974 0 6,974 Provisions 0 237 237 CURRENT LIABILITIES 324,624 207 324,831 Current borrowings 321,799 0 321,799 Trade and other payables 2,825 207 3,032 The Group s activities expose it to a variety of financial risks including currency risk, interest rate risk, credit risk and liquidity risk.

Annual report 2012 PRVI FAKTOR Group 51 Credit risk To manage credit risk, the Group has internal instructions in place for approving ratings, credit limits and transactions. These instructions include all the necessary information, criteria and a model for classifying clients and investments. Credit limits and investments are approved by credit committees of Group companies. Client ratings depend on their financial standing, business performance, relationship with the Group to date, and the ability to provide a sufficient cash flow to meet future obligations. Clients rated A are financially strong and the Group expects no problems with their meeting of obligations. Clients rated B are also financially strong but are more likely to be affected by adverse market developments. Clients rated C are of a higher risk level, as they usually settle their liabilities with a delay of up to 180 days. Clients rated D are illiquid and insolvent. Client credit limits are established on the basis of their creditworthiness, feasibility of the transaction, as well as other elements which might influence their capacity to settle their liabilities. The Group reduces credit risk by accepting different types of collateral. Loans and receivables are usually secured by normal collateral instruments (bills of exchange) or mortgages, or are insured with the SID-PKZ insurance company or a correspondent foreign factoring company. It is of key importance that around 75% of factoring is with the recourse to the assignor, which means that in the case of a buyer s default, the Group can still recover from the client, i.e., the assignor of accounts receivable. Credit risk is thus reduced significantly. Maximum exposure to credit risk 31 Dec 2012 31 Dec 2011 Held-to-maturity financial assets 40,820 43,617 Loans and receivables 224,749 247,608 Cash and cash equivalents 29,051 23,754 Financial guarantee contracts 1,030 3,910 Total 295,650 318,889 The above table represents the worst-case scenario of the Group s credit risk exposure as at 31 December 2012 and 2011, without taking account of any collateral received. The exposure was calculated using carrying amounts as shown in the statement of financial position in case of onbalance sheet items and nominal values in case of off-balance sheet items. All cash items and financial guarantees were current, not past due.

52 PRVI FAKTOR Group Annual report 2012 Loans and receivables 31 Dec 2012 31 Dec 2011 Current, not impaired 190,945 207,459 Overdue, not impaired 13,959 16,779 Overdue, impaired 62,723 67,580 Impairment allowances -42,878-44,210 Total 224,749 247,608 Current, not impaired loans and receivables by client rating 31 December 2012 Amount Share (%) Credit rating A 127,739 66.90 Credit rating B 60,775 31.83 Credit rating C 2,213 1.16 Credit rating D 218 0.11 Total 190,945 100.00 31 December 2011 Amount Share (%) Credit rating A 133,519 64.36 Credit rating B 72,741 35.06 Credit rating C 883 0.43 Credit rating D 316 0.15 Total 207,459 100.00 The share of total current, not impaired loans and receivables pertaining to A- and B-rated clients decreased, while that of C-rated clients increased.

Annual report 2012 PRVI FAKTOR Group 53 Overdue, not impaired and impaired loans and receivables by days overdue 31 Dec 2012 31 Dec 2011 Overdue, not impaired Overdue, impaired Overdue, not impaired Overdue, impaired Current 0 8,509 0 12,015 Overdue up to 1 month 8,452 533 9,448 2,027 Overdue up to 3 months 2,904 620 3,413 5,346 Overdue up to 1 year 985 5,110 1,869 9,511 Overdue over 1 year 1,618 47,951 2,049 38,681 Total 13,959 62,723 16,779 67,580 Overdue but not impaired loans and receivables of EUR 13,959 thousand (2011: EUR 16,779 thousand) were, in the amount of EUR 8,832 thousand (2011: EUR 15,467 thousand), secured by mortgages assessed at EUR 8,832 thousand (2011: EUR 15,467 thousand). Receivables were additionally insured with SID-PKZ in the amount of EUR 5,073 thousand (2011: EUR 4,462 thousand) and FCI in the amount of EUR 1,750 thousand (2011: EUR 915 thousand). For impaired loans and receivables amounting to EUR 62,723 thousand (2011: EUR 67,580 thousand), the Group recognised impairments of EUR 42,878 thousand (2011: EUR 44,210 thousand). Overdue and impaired Held-to-maturity financial assets loans and receivables were secured by mortgages assessed at EUR 29,091 thousand (2011: EUR 32,636 thousand). They were additionally insured with SID-PKZ and other insurance companies or foreign factoring companies, and liens on property or shares in the amount of EUR 2,828 thousand (2011: EUR 14,573 thousand). As at year-end 2012, the share of impaired loans and receivables remained more or less the same compared to a year ago. The amount of impaired loans and receivables decreased, but so did the item»loans and receivables«. 31 Dec 2012 31 Dec 2011 Current 39,705 42,260 Overdue, not impaired 973 789 Overdue, impaired 2,404 2,421 Impairment allowances -2,262-1,853 Total 40,820 43,617

54 PRVI FAKTOR Group Annual report 2012 Current, not impaired held-to-maturity financial assets by client rating 31 December 2012 Amount Share (%) Credit rating A 31,050 78.20 Credit rating B 8,655 21.80 Credit rating C 0 0.00 Credit rating D 0 0.00 Total 39,705 100 31 December 2011 Amount Share (%) Credit rating A 31,282 74.02 Credit rating B 10,978 25.98 Credit rating C 0 0.00 Credit rating D 0 0.00 Total 42,260 100 The share of total current, not impaired held-to-maturity financial assets pertaining to A-rated clients increased, while that of B-rated clients decreased. Overdue, impaired and not impaired held-to-maturity financial assets by days overdue 31 Dec 2012 31 Dec 2011 Overdue, not impaired Overdue, impaired Overdue, not impaired Overdue, impaired Current 0 0 0 0 Overdue up to 1 month 544 0 160 0 Overdue up to 3 months 118 0 491 0 Overdue up to 1 year 173 14 0 200 Overdue over 1 year 138 2,390 138 2,221 Total 973 2,404 789 2,421

Annual report 2012 PRVI FAKTOR Group 55 Loans and receivables, and held-to-maturity financial assets by client rating 31 December 2012 Amount Impairment Share (%) Share of impairment (%) Credit rating A 162,479 458 52.29 1.02 Credit rating B 77,841 213 25.05 0.47 Credit rating C 11,520 430 3.71 0.95 Credit rating D 58,869 44,039 18.95 97.56 Total 310,709 45,140 100.00 100.00 31 December 2011 Amount Impairment Share (%) Share of impairment (%) Credit rating A 170,685 373 50.60 0.81 Credit rating B 92,005 236 27.28 0.51 Credit rating C 16,008 1,785 4.75 3.88 Credit rating D 58,590 43,669 17.37 94.80 Total 337,288 46,063 100.00 100.00 The share of loans and receivables owned by A-rated clients increased, while the share of those owned by B-rated clients decreased. The share of C-rated clients decreased by around 1 percentage point, while the share of D-rated clients increased. Performing loans and receivables are rated A and only impaired collectively. Collective impairments for A-rated and B-rated clients amounted to EUR 659 thousand as at year-end 2012 (2011: EUR 556 thousand).

56 PRVI FAKTOR Group Annual report 2012 Loans and receivables, and held-to-maturity financial assets by client rating and collateral type 31 December 2012 Collateral amount Gross loans and receivables Credit rating A Bank guarantee 0 0 Mortgage 7,385 4,802 SID-PKZ 8,271 8,271 FCI 100 75 Real property 0 0 Inventories 13,890 7,399 Lien on interests 143 123 Lien on shares 1,058 796 Guarantees 6,816 4,524 Uninsured 0 136,489 Credit rating B Mortgage 11,678 5,676 SID-PKZ 7,144 7,458 FCI 2,720 1,058 Real property 0 0 Inventories 1,011 505 Guarantees 1,032 466 Uninsured 0 62,678 Credit rating C Mortgage 15,590 5,657 SID-PKZ 1,139 1,158 Inventories 0 0 Lien on shares 0 0 Uninsured 0 4,705 Credit rating D Mortgage 20,107 13,752 SID-PKZ 496 496 Real property 2,133 1,168 Guarantees 0 0 Inventories 178 98 Uninsured 0 43,355 Total 100,891 310,709

Annual report 2012 PRVI FAKTOR Group 57 31 December 2011 Collateral amount Gross loans and receivables Credit rating A Bank guarantee 0 0 Mortgage 9,594 12,345 SID-PKZ 3,742 4,414 FCI 290 282 Real property 352 114 Inventories 9,986 9,584 Lien on interests 142 628 Lien on shares 999 1,497 Guarantees 3,435 2,538 Uninsured 0 139,283 Credit rating B Mortgage 11,922 6,886 SID-PKZ 10,146 10,870 FCI 3,095 1,654 Real property 398 323 Inventories 454 3 Guarantees 2,260 1,523 Uninsured 0 70,746 Credit rating C Mortgage 14,448 9,092 SID-PKZ 986 986 Inventories 810 787 Lien on shares 0 0 Uninsured 0 5,143 Credit rating D Mortgage 17,159 13,850 SID-PKZ 55 55 Real property 2,139 1,204 Guarantees 0 0 Inventories 178 107 Uninsured 0 43,374 Total 92,590 337,288 SID PKZ insurance with a local insurance company SID Prva kreditna zavarovalnica d.d., Ljubljana FCI insurance with a foreign factoring company member of Factors Chain International (a global network of leading factoring companies)

58 PRVI FAKTOR Group Annual report 2012 It is of key importance that around 75% of factoring is with the recourse to the assignor, which means that in case of a buyer s default, the Group can still recover from the client, i.e., the assignor of accounts receivable. Credit risk is thus reduced significantly. Concentration of risks of financial assets with credit risk exposure The table below shows (at carrying amounts) the Group credit risk exposures by geographical segments. Debtors were assigned to these based on the place of their registered office. Slovenia SE Europe Other Total Loans 7,916 25,957 0 33,873 Receivables 36,552 150,464 3,860 190,876 Held-to-maturity financial assets 0 40,820 0 40,820 31 December 2012 44,468 217,241 3,860 265,569 31 December 2011 45,088 241,774 4,363 291,225 As at year-end 2012, the Group had renegotiated loans and receivables of EUR 10,518 thousand (2011: EUR 9,859 thousand). After restructuring, an overdue loan or receivable is treated in the same manner as current loans and receivables, and managed together with similar loans and receivables. Only those loans and receivables are restructured for which the selected indicators and criteria used by the management indicate that their debtors will continue paying. By repossessing collateral, the Group recovered receivables of EUR 4,532 thousand in 2012 (2011: EUR 0). Repossessed collateral is sold as soon as possible and proceeds are used to reduce the outstanding debts, unless the management decides to use it in operation.

Annual report 2012 PRVI FAKTOR Group 59 Liquidity risk Liquidity risk management implies maintaining sufficient cash and working capital and the availability of funding through adequate renewable resources. The Group s placements are short-term, which significantly decreases liquidity risk. The Group also uses both short- and long term financial sources to secure adequate liquidity. The table below shows the Group s assets and liabilities as at 31 December 2012 by the remaining term to maturity: 31 December 2012 Up to 1 month 1 to 3 months 3 to 12 months 1 to 5 years Over 5 years Total FINANCIAL ASSETS 119,388 106,896 68,330 6 0 294,620 Loans and receivables 88,746 90,816 45,187 0 0 224,749 Held-to-maturity financial assets 7,215 14,641 18,958 6 0 40,820 Cash and cash equivalents 23,427 1,439 4,185 0 0 29,051 LIABILITIES 7,761 135,947 76,520 98,273 0 318,501 Borrowings 5,044 134,898 76,470 98,273 0 314,685 Trade and other payables 1,925 811 50 0 0 2,786 Financial guarantee contracts 792 238 0 0 0 1,030 Assets less liabilities 111,627-29,051-8,190-98,267 0-23,881 31 December 2011 Up to 1 month 1 to 3 months 3 to 12 months 1 to 5 years Over 5 years Total FINANCIAL ASSETS 114,340 123,639 76,484 516 0 314,979 Loans and receivables 96,137 90,095 60,860 516 0 247,608 Held-to-maturity financial assets 7,915 24,264 11,438 0 0 43,617 Cash and cash equivalents 10,288 9,280 4,186 0 0 23,754 LIABILITIES 22,576 108,835 208,112 7,122 0 346,645 Borrowings 18,161 106,596 208,031 7,122 0 339,910 Trade and other payables 2,154 618 53 0 0 2,825 Financial guarantee contracts 2,261 1,621 28 0 0 3,910 Assets less liabilities 91,764 14,804-131,628-6,606 0-31,666

60 PRVI FAKTOR Group Annual report 2012 Currency risk The Group does not actively manage currency risk, but does link to EUR advances to assignors in order to neutralise the effects of exchange rate movements on EUR-denominated debts. 31 December 2012 EUR USD GBP Other currencies Total FINANCIAL ASSETS 271,469 2 1 23,148 294,620 Loans and receivables 216,082 0 0 8,667 224,749 Held-to-maturity financial assets 38,212 0 0 2,608 40,820 Cash and cash equivalents 17,175 2 1 11,873 29,051 LIABILITIES 299,489 0 0 6,452 305,941 Borrowings 297,864 0 0 5,291 303,155 Trade and other payables 1,625 0 0 1,161 2,786 Assets less liabilities -28,020 2 1 16,696-11,321 31 December 2011 EUR USD Other currencies Total FINANCIAL ASSETS 300,476 1 14,502 314,979 Loans and receivables 240,869 0 6,739 247,608 Held-to-maturity financial assets 40,108 0 3,509 43,617 Cash and cash equivalents 19,499 1 4,254 23,754 LIABILITIES 325,323 0 6,275 331,598 Borrowings 323,429 0 5,344 328,773 Trade and other payables 1,894 0 931 2,825 Assets less liabilities -24,847 1 8,227-16,619

Annual report 2012 PRVI FAKTOR Group 61 Interest rate risk The Group s income and operating cash flows are affected by changes in market interest rates. However, as the majority of its assets and liabilities are short-term, the Group assesses this risk as insignificant. The tables below show the Group s exposure to interest rate risk. Financial assets and financial liabilities were classified based on the earlier of payment date or interest rate adjustment date. 31 December 2012 Total Non-interest bearing Total interest bearing At sight Up to 1 month 1 to 3 months 3 to 12 months 1 to 5 years Over 5 years FINANCIAL ASSETS 294,620 22,674 271,946 39,713 164,706 43,272 24,255 0 0 Loans and receivables 224,749 21,847 202,902 16,004 134,368 36,350 16,180 0 0 Held-to-maturity financial assets 40,820 340 40,480 789 30,318 5,483 3,890 0 0 Cash and cash equivalents 29,051 487 28,564 22,920 20 1,439 4,185 0 0 LIABILITIES 305,941 4,531 301,410 0 153,862 90,638 56,910 0 0 Borrowings 303,155 1,745 301,410 0 153,862 90,638 56,910 0 0 Trade and other payables 2,786 2,786 0 0 0 0 0 0 0 Assets less liabilities -11,321 18,143-29,464 39,713 10,844-47,366-32,655 0 0 31 December 2011 Total Non-interest bearing Total interest bearing At sight Up to 1 month 1 to 3 months 3 to 12 months 1 to 5 years Over 5 years FINANCIAL ASSETS 314,979 20,097 294,882 29,948 187,014 48,757 29,163 0 0 Loans and receivables 247,608 18,878 228,730 19,444 146,840 41,173 21,273 0 0 Held-to-maturity financial assets 43,617 656 42,961 779 32,298 6,180 3,704 0 0 Cash and cash equivalents 23,754 563 23,191 9,725 7,876 1,404 4,186 0 0 LIABILITIES 331,599 4,293 327,306 0 72,885 89,505 164,916 0 0 Borrowings 328,774 1,468 327,306 0 72,885 89,505 164,916 0 0 Trade and other payables 2,825 2,825 0 Assets less liabilities -16,620 15,804-32,424 29,948 114,129-40,748-135,753 0 0

62 PRVI FAKTOR Group Annual report 2012 Sensitivity analysis Sensitivity analysis was prepared assuming a change in market interest rates of 100 basis points (1% p.a.), which the management at that time assessed as reasonable. The effect on net interest income in the first year after such change was calculated. Had market interest rates increased by 100 basis points, the Group's net interest income in 2012 would have increased by EUR 380 thousand (2011: EUR 555 thousand). The change would therefore result in higher income (included in the statement of comprehensive income). Had market interest rates decreased by 100 basis points, the Group s net interest income in 2012 would have decreased by EUR 380 thousand (2011: EUR 555 thousand). Fair value of financial assets and liabilities The management estimates that there are no differences between the carrying amounts and fair values of the Group s financial assets and financial liabilities. Group in the global financial crisis The current global financial and economic crises, which started due to the marked decrease in liquidity worldwide (often called credit crunch), has amongst its effects also a reduced loan volume in the capital markets, a reduced liquidity of the banking sector and whole economies, higher interbank rates, and very high volatility in stock and currency markets. Instability in the global financial markets brought about bankruptcy of certain banks and other corporations, and consequently rehabilitation of the banking sector in USA, Western Europe, Russia and some other countries. The crisis affected negatively many countries, including those in the European Union. What is clear is that the economic situation will remain very unpredictable in 2013. The management continuously monitors the developments in Slovenia and abroad. It has also prepared various scenarios that provide an insight into how a range of effects of the current crisis on the economies in the region where the Group operates could affect the Group's results. Making such assessments is difficult as the future is very unpredictable. Loan volume in the inter-bank markets decreased significantly after August 2007. This could negatively affect the Group s capacity to raise new loans or refinance the existing loans under currently applicable terms and conditions. The financial and economic crisis also affected negatively the financial position of the Group's debtors, i.e., their capacity to serve debts. This in turn could affect the Group s expected cash flows, as well as the estimated allowances. Based on available information, the management, in assessing allowances, correctly considered the changed circumstances affecting the expected cash flows.

Annual report 2012 PRVI FAKTOR Group 63 Professionalism, accuracy and accountability are the values that we base our work on and that ensure you get a trustworthy service. Dušanka Ašič, Head of Accounting

64 PRVI FAKTOR Group Annual report 2012 5.0 Notes to the consolidated financial statements

Annual report 2012 PRVI FAKTOR Group 65 5.1 Intangible assets Intangible assets in 2012: Software Total COST 1 January 2012 642 642 Additions 26 26 Other movements -11-11 31 December 2012 657 657 ACCUMULATED AMORTISATION 1 January 2012 567 567 Other movements -8-8 Amortisation 53 53 31 December 2012 612 612 NET CARRYING AMOUNT 1 January 2012 75 75 31 December 2012 45 45 Intangible assets in 2011: Software Total COST 1 January 2011 617 617 Additions 24 24 Other movements 1 1 31 December 2011 642 642 ACCUMULATED AMORTISATION 1 January 2011 449 449 Other movements 16 16 Amortisation 102 102 31 December 2011 567 567 NET CARRYING AMOUNT 1 January 2011 168 168 31 December 2011 75 75

66 PRVI FAKTOR Group Annual report 2012 5.2 Property, plant and equipment Property, plant and equipment in 2012: Computer equipment, motor vehicles and other equipment Leasehold improvements Total COST 1 January 2012 1,472 65 1,537 Additions 139 5 144 Other movements -22-2 -24 Disposals -137 0-137 31December 2012 1,452 68 1,520 ACCUMULATED DEPRECIATION 1 January 2012 1,111 50 1,161 Depreciation 165 4 169 Other movements -23 0-23 Disposals -102 0-102 31 December 2012 1,151 54 1,205 NET CARRYING AMOUNT 1 January 2012 361 15 376 31 December 2012 301 14 315

Annual report 2012 PRVI FAKTOR Group 67 Property, plant and equipment in 2011: Computer equipment, motor vehicles and other equipment Leasehold improvements Total COST 1 January 2011 1,423 65 1,488 Additions 254 0 254 Other movements -6 0-6 Disposals -199 0-199 31 December 2011 1,472 65 1,537 ACCUMULATED DEPRECIATION 1 January 2011 1,036 44 1,080 Depreciation 181 6 187 Other movements -17 0-17 Disposals -89 0-89 31 December 2011 1,111 50 1,161 NET CARRYING AMOUNT 1 January 2011 387 21 408 31 December 2011 361 15 376

68 PRVI FAKTOR Group Annual report 2012 5.3 Investment property As at year-end 2012, the Group had investment property of EUR 1,696 thousand (2011: EUR 522 thousand). The amount reflects acquisitions made during the year of EUR 1,503 thousand (2011: EUR 361 thousand) and disposals made during the year of EUR 329 thousand (2011: EUR 153 thousand).

Annual report 2012 PRVI FAKTOR Group 69 5.4 Loans and receivables 31 Dec 2012 31 Dec 2011 Loans 33,873 52,024 Receivables 191,116 195,744 Total 224,989 247,768 5.4.1 Loans Loans 31 Dec 2012 31 Dec 2011 Non-current loans 0 513 Short-term loans to buyers domestic factoring 38,791 53,348 Short-term loans to buyers export factoring 299 300 Short-term loans to buyers import factoring 10,059 12,523 Other loans 444 0 Impairment allowances -15,720-14,660 Total short-term loans 33,873 51,511 Total loans 33,873 52,024 Loans mainly comprise factoring-related loans. In 2012, loans were remunerated at rates from 6.3% to 10.5% p.a., while in 2011 this range was from 5.1% to 11.0% p.a. Short-term loans to buyers (domestic and export factoring) relate to reverse factoring.

70 PRVI FAKTOR Group Annual report 2012 Movements in allowances for loans 2012 2011 1 January 14,660 13,365 Increases 1,446 2,136 Collected -368-556 Written off 0-146 Exchange rate differences -18-139 31 December 15,720 14,660 5.4.2 Receivables Receivables 31 Dec 2012 31 Dec 2011 Non-current receivables 0 3 Factoring receivables 187,871 181,460 Other receivables 3,208 14,241 Other receivables due from affiliates 37 40 Total 191,116 195,744 Factoring receivables 31 Dec 2012 31 Dec 2011 Domestic factoring 196,151 188,756 Export factoring 16,171 16,647 Import factoring 2,684 4,892 Impairment allowances -27,135-28,835 Total 187,871 181,460

Annual report 2012 PRVI FAKTOR Group 71 A portion of short-term receivables from domestic and import factoring is insured with SID-PKZ which, in case of a debtor s default, would cover on average 85% of the defaulted receivable. The majority of receivables from export factoring is also insured with SID-PKZ or correspondent foreign factoring companies (the latter would cover 100% of the defaulted receivable). Factoring receivables were remunerated at rates from 6.3% to 14.4% p.a. (in 2012) and from 4.6% to 13.0% p.a. (in 2011). Of total factoring receivables (before impairment) as at year-end 2012, EUR 199,749 thousand related to recourse factoring (2011: EUR 192,291 thousand) and EUR 15,257 thousand related to non-recourse factoring (2011: EUR 18,004 thousand). Movements in impairment allowances for factoring receivables 2012 2011 1 January 28,835 22,070 Increases 3,433 11,871 Collected -4,426-4,842 Written off -200-158 Exchange rate differences -506-106 31 December 27,135 28,835 As at year-end 2012, impairment allowances for other receivables were EUR 23 thousand (2011: EUR 715 thousand).

72 PRVI FAKTOR Group Annual report 2012 5.5 Held-to-maturity financial assets Movements in held-to-maturity investments 2012 2011 1 January 43,617 46,820 Increases 149,871 133,574 Disposals (maturity) -150,406-134,924 Impairment allowances -2,262-1,853 31 December 40,820 43,617 Almost all impairment allowances for these assets were made individually. In 2012, held-to-maturity financial assets comprised corporate bills of exchange with a remaining term to maturity of up to 9 months (the same as in 2011). Bills of exchange were discounted at rates from 6.2% to 10.6% p.a. in 2012 and at rates from 6.5% to 11.4% p.a. in 2011. Movements in impairment allowances for held-to-maturity financial assets 2012 2011 1 January 1,853 1,925 Increases 435 95 Written off -21-216 Exchange rate differences -5 49 31 December 2,262 1,853

Annual report 2012 PRVI FAKTOR Group 73 5.6 Available-for-sale financial assets Available-for-sale financial assets amounted to EUR 14,403 thousand as at year-end 2012 (2011: EUR 18,700 thousand). This item relates to 125,963 shares issued by Poslovni sistem Mercator, d.d. (MELR). They were acquired by PF Ljubljana in 2011 and sold within the same year to PF Belgrade. The subsidiary accounted for them as at year-end 2011 and 2012 using the then price achieved on the Ljubljana Stock Exchange. The price as at year-end 2012 was lower than a year ago, and the item was accordingly impaired by EUR 4,297 thousand (2011: EUR 1,798 thousand).

74 PRVI FAKTOR Group Annual report 2012 5.7 Cash and cash equivalents 31 Dec 2012 31 Dec 2011 Cash on hand in foreign currency 1 1 Deposits in local currency 14,136 17,879 Deposits in foreign currency 574 567 Balances in bank accounts in local currency 3,038 1,620 Balances in bank accounts in foreign currency 11,302 3,687 Total 29,051 23,754 Cash items are included in the consolidated cash flow statement.

Annual report 2012 PRVI FAKTOR Group 75 5.8 Equity Movements in equity items are shown in section 3, Statement of changes in equity. Other information is disclosed under section 1.1, Group profile. Structure of other reserves: Equity premium comprises payments exceeding the nominal value of founding shares (called-up capital) of the parent company. The amount shown in statement of financial position arose on reversal of general equity revaluation adjustment. In accordance with the law, equity premium may be used to settle losses or increase called-up capital. Other reserves comprise retained earnings from previous periods earmarked for specific purposes, primarily to settle potential future losses. They are classified into legal reserves and other reserves. Other reserves must be used for the purposes defined in the Slovenian Companies Act (ZGD-1). 31 Dec 2012 31 Dec 2011 Legal reserves 58 58 Other reserves 29 29 Total 87 87 Currency translation reserves of EUR -1,439 thousand (2011: EUR -1,084 thousand) arose on translation of transactions and balances of Group companies to euro (see note 4.2.3, Foreign currency translation). Equity revaluation adjustment was not recognised as at year-end 2012, while it amounted to EUR 1,544 thousand as at year-end 2011. It mainly arose on revaluation of Mercator shares, i.e., due to the difference between their purchase price and market price as at year-end (EUR -1,798 thousand), but also in relation to deferred taxes (EUR 254 thousand). As the share continued its downward trend throughout 2012, the Group did not recognise equity revaluation adjustment as at year-end, but included all revaluation effects in the 2012 statement of comprehensive income. Retained earnings and net profit for the period: 1 Jan 2011 2,067 Net profit for the period 1,859 31 Dec 2011 3,926 1 Jan 2012 3,926 Net profit for the period 1,090 31 Dec 2012 5,016 Retained earnings may only be distributed in accordance with the decisions taken by the owners at governance bodies meetings.

76 PRVI FAKTOR Group Annual report 2012 5.9 Borrowings 31 Dec 2012 31 Dec 2011 Non-current borrowings 93,529 6,974 Current borrowings 209,626 321,799 Total 303,155 328,773 5.9.1 Non-current borrowings Non-current borrowings as at year-end 2012 related to liabilities of Group companies under loan contracts with SID bank: PF Ljubljana owed EUR 54,500 thousand, PF Zagreb EUR 25,920 thousand, PF Belgrade EUR 10,106 thousand and PF Sarajevo EUR 3,003 thousand. More precisely, PF Ljubljana concluded five loan contracts with principals amounting to EUR 5,300 thousand, EUR 9,200 thousand, EUR 5,000 thousand, EUR 10,000 thousand and EUR 25,000 thousand. PF Zagreb concluded two loan contracts with principals amounting to EUR 15,000 thousand and EUR 11,000 thousand. PF Belgrade also concluded two loan contracts with both principals amounting to EUR 5,000 thousand. PF Sarajevo concluded one loan contract with principal amounting to EUR 3,000 thousand. All contracts provide for repayment in 2014 (for more information, see note 5.23, Transactions with associates). Non-current borrowings from banks as at year-end 2011 related to liabilities of PF Zagreb under a loan contract concluded with the Austrian BKS Bank. For more information on liabilities to associates (including SID), see note 5.23, Transactions with associates. 5.9.2 Short-term borrowings Current borrowings 31 Dec 2012 31 Dec 2011 Current borrowings from associates 158,505 251,449 Current borrowings from other banks 51,121 70,350 Total 209,626 321,799

Annual report 2012 PRVI FAKTOR Group 77 Current borrowings from other banks 31 Dec 2012 31 Dec 2011 Short-term borrowings from domestic banks 33,121 52,653 Short-term borrowings from foreign banks 18,000 17,697 Total 51,121 70,350 For more information on borrowings from related banks, see note 5.23, Transactions with affiliates. Borrowings were remunerated at rates from 2.0% to 7.3% p.a. (in 2012) and from 2.7% to 7.2% p.a. (in 2011). For some of them, the Group submitted letters of comfort issued by NLB and SID.

78 PRVI FAKTOR Group Annual report 2012 5.10 Trade and other payables Trade and other payables 31 Dec 2012 31 Dec 2011 Factoring payables 1,844 1,880 Other short-term trade payables 1,086 1,130 Other short-term trade payables to affiliates 15 22 Total 2,945 3,032 For more information on other short-term operating liabilities to affiliates see note 5.23, Transactions with affiliates.

Annual report 2012 PRVI FAKTOR Group 79 5.11 Provisions Provisions for retirement and similar benefits stood at EUR 216 thousand as at year-end 2012 (2011: EUR 237 thousand).

80 PRVI FAKTOR Group Annual report 2012 5.12 Contingencies 31 Dec 2012 31 Dec 2011 Financial guarantee contracts 1,030 3,910 Total 1,030 3,910 Payment guarantees relate to the guarantees issued to foreign factors, and are mainly associated with import factoring.

Annual report 2012 PRVI FAKTOR Group 81 5.13 Interest and similar income 2012 2011 Domestic factoring 21,501 22,182 Export factoring 1,536 1,568 Import factoring 1,234 1,577 Interest on bills of exchange 4,790 5,266 Late payment interest 1,828 2,103 Other services 1,041 4,603 Interest received from affiliates 33 61 Total 31,963 36,960 An amount of EUR 3,190 thousand was recognised as interest income from impaired loans and receivables shown in the 2012 statement of comprehensive income (2011: EUR 3,704 thousand).

82 PRVI FAKTOR Group Annual report 2012 5.14 Interest and similar expenses 2012 2011 Interest paid to affiliates 14,152 14,589 Interest paid to other banks 3,954 4,910 Total 18,106 19,499

Annual report 2012 PRVI FAKTOR Group 83 5.15 Dividend income Income from dividends was EUR 704 thousand (2011: 0). They were earned by PF Belgrade as owner of MELR shares, under a decision of the general meeting of shareholders of Mercator as issuer held in March 2012. For more information on MELR shares, see note 5.6, Available-for-sale financial assets.

84 PRVI FAKTOR Group Annual report 2012 5.16 Other operating income 2012 2011 Rentals received from affiliates 0 1 Fees and commissions 58 25 Written-off of liabilities 0 11 Other income 65 203 Total 123 240

Annual report 2012 PRVI FAKTOR Group 85 5.17 Costs of services 2012 2011 Rentals 430 443 Rentals paid to affiliates 139 143 Insurance premiums paid to affiliates 395 288 Insurance premiums paid to foreign factors 70 260 Accounting, legal and other professional services 236 273 Other services from affiliates 10 10 Other services 565 501 Costs of guarantees from affiliates 167 193 Total 2,012 2,111 In 2012, auditing costs were EUR 59 thousand (2011: EUR 57 thousand). Tax consulting costs were EUR 1 thousand (2011: EUR 3 thousand). Other services relate to cleaning, telephone and postal costs, as well as to the costs of information on clients and of this annual report (translation, design, etc.)

86 PRVI FAKTOR Group Annual report 2012 5.18 Labour costs 2012 2011 Wages 3,188 3,158 Pension contributions 181 209 Social contributions 347 341 Other contributions and payroll tax 17 16 Other labour costs 432 368 Total 4,165 4,092 Total remuneration paid to the Group company s directors was EUR 594 thousand (2011: EUR 510 thousand). Since 15 May 2012, the parent company has been run by two directors, for which reason the 2012 figure relates to 7 persons and the 2011 figure relates to 6 persons.

Annual report 2012 PRVI FAKTOR Group 87 5.19 Impairment charges 2012 2011 Impairment allowances 14,500 13,184 Reversal of impairment allowances -9,112-4,701 Total 5,388 8,483

88 PRVI FAKTOR Group Annual report 2012 5.20 Other operating expenses 2012 2011 Costs of payment services and bank fees 75 62 Costs of payment services and bank fees affiliates 124 133 Costs of materials 69 62 Amortisation / depreciation 222 289 Equipment maintenance costs 211 214 Costs of fairs, advertising, entertainment and sponsorships 195 248 Reimbursement of work-related costs to employees 122 134 Insurance premiums 28 31 Other operating expenses 923 997 Other operating expenses affiliates 49 20 Total 2,018 2,190 Other operating expenses relate to non-deductible withholding tax, memberships, court and other fees, etc.

Annual report 2012 PRVI FAKTOR Group 89 5.21 Foreign exchange gains, net 2012 2011 Positive exchange rate differences 17,581 14,130 Negative exchange rate differences -15,896 11.715 Total 1,685 2,415

90 PRVI FAKTOR Group Annual report 2012 5.22 Income tax Income tax 2012 2011 Current tax 1,752 1,644 Deferred taxes -72-296 Total 1,680 1,348 2012 2011 Profit / loss 2,770 3,207 Income tax 400 765 Income decreasing tax basis -1,063-1,107 Expenses not deductible for tax purposes 3,875 2,972 Expenses deductible for tax purposes -1,495-1,243 Tax deductions -37-39 Tax charge 1,680 1,348 Income decreasing tax basis comprise dividends received. Expenses not deductible for tax purposes comprise impairment charges, entertainment costs, late interest and other expenses. Corporate income tax is calculated based on income and expenses shown in the income statement, taking account of tax deductions and tax additions in accordance with applicable legislation. As at year-end 2012, Group companies had EUR 731 thousand of tax assets (2011: EUR 689 thousand). The parent company was last subject to tax inspection in 2004. Other Group companies were not subject to income tax-related inspection.

Annual report 2012 PRVI FAKTOR Group 91 Movements in deferred tax assets Movements in 2012 1 Jan 2012 Charged to statement of comprehensive income Credited to statement of comprehensive income 31 Dec 2012 Allowances for receivables 2,628 229 6 2,405 Provisions for retirement and similar benefits 5 3 1 3 Other 344 15 243 572 Total deferred tax assets 2,977 247 250 2,980 Movements in 2011 1 Jan 2011 Charged to statement of comprehensive income Credited to statement of comprehensive income 31 Dec 2011 Allowances for receivables 2,451 183 360 2,628 Provisions for retirement and similar benefits 15 17 7 5 Other 149 129 324 344 Total deferred tax assets 2,615 329 691 2,977

92 PRVI FAKTOR Group Annual report 2012 5.23 Transactions with affiliates Two companies or legal persons are considered to be affiliated if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions. The parent company (PF Ljubljana) is owned by Nova Ljubljanska banka d.d. (which holds a 50-percent interest) and SID Slovenska izvozna in razvojna banka, d.d. (which holds a 50-percent interest), as explained below under Relationships with owners and other associates. Group companies do not have parent-subsidiary relationships with any company not member of the Group. Relationships with owners and other affiliates The parent company is owned by two Slovenian banks: Nova Ljubljanska banka d.d. and SID Slovenska izvozna in razvojna banka, d.d. Transactions with NLB mainly comprise loans raised from and payment services provided by the bank. Transactions with SID bank comprise loans raised by the company for itself and its subsidiaries from the bank. Interest and similar income (note 5.13) 2012 2011 NLB Group 33 61 Total 33 61 Interest and similar expenses (note 5.14) 2012 2011 NLB Group 9,078 9,681 SID bank 5,074 4,908 Total 14,152 14,589

Annual report 2012 PRVI FAKTOR Group 93 Other operating income (note 5.16) 2012 2011 Rentals (NLB Group) 0 1 Total 0 1 Costs of services (note 5.17) 2012 2011 Insurance premiums (SID-PKZ) 395 288 Costs of guarantees issued by affiliates (NLB Group) 167 193 Rentals (NLB Group) 139 143 Other services (SID Group) 10 10 Total 711 634 Other operating expenses (note 5.20) 2012 2011 Costs of payment services and bank fees (NLB Group banks) 124 133 Other operating expenses (SID Group) 49 20 Total 173 153

94 PRVI FAKTOR Group Annual report 2012 Other receivables (note 5.4) 31 Dec 2012 31 Dec 2011 Other receivables (NLB Group) 37 37 Other receivables (SID Group) 0 3 Total 37 40 Other short-term trade payables (note 5.10) 31 Dec 2012 31 Dec 2011 Other trade payables (SID Group) 0 1 Other trade payables (NLB Group) 15 21 Total 15 22

Annual report 2012 PRVI FAKTOR Group 95 Borrowings as at 31 December 2012 (note 5.9): Creditor 31 Dec 2012 Maturity Non-current loan (SID bank) 5,300 4 July 2014 Non-current loan (SID bank) 9,200 4 July 2014 Non-current loan (SID bank) 5,000 13 June 2014 Non-current loan (SID bank) 10,000 6 August 2014 Non-current loan (SID bank) 25,000 17 December 2014 Total non-current borrowings 54,500 Revolving short-term loan (NLB) 24,312 22 February 2013 Short-term loan (NLB) 20,092 22 February 2013 Interest on loans (SID bank) 446 16 January 2013 Total short-term borrowings 44,850 Total PF Ljubljana 99,350 Non-current loan (SID bank) 14,954 29 June 2014 Non-current loan (SID bank) 10,966 29 June 2014 Total non-current borrowings 25,920 Interest on loans (SID bank) 632 21 January 2013 Foreign currency-denominated short-term loan (NLB) 39,853 21 March 2013 Foreign currency-denominated short-term loan (NLB) 39,828 21 June 2013 Interest on loans (NLB bank) 198 21 January 2013 ADRIA BANK 6,974 25 April 2013 Total short-term borrowings 87,485 Total PF Zagreb 113,405 Non-current loan (SID bank) 5,000 29 April 2014 Non-current loan (SID bank) 5,106 12 November 2014 Total non-current borrowings 10,106 Foreign currency-denominated short-term loan (NLB) 4,000 28 February 2013 Foreign currency-denominated short-term loan (NLB) 5,000 28 February 2013 Foreign currency-denominated short-term loan (NLB) 5,000 28 February 2013 Foreign currency-denominated short-term loan (NLB) 6,458 28 February 2013 Total short-term borrowings 20,458 Total PF Belgrade 30,564 Non-current loan (SID bank) 3,003 14 June 2014 Total non-current borrowings 3,003 Foreign currency-denominated short-term loan (NLB) 5,712 14 March 2013 Total short-term borrowings 5,712 Total PF Sarajevo 8,715 Total borrowings 252,034 Borrowings were remunerated at rates from 2.05% to 7.28% p.a.

96 PRVI FAKTOR Group Annual report 2012 Borrowings as at 31 December 2011 (note 5.9): Creditor 31 Dec 2011 Maturity Non-current loan (SID bank) 5,436 19 July 2012 Non-current loan (SID bank) 9,437 19 July 2012 Non-current loan (SID bank) 24,993 21 December 2012 Non-current loan (SID bank) 5,005 15 June 2012 Revolving short-term loan (NLB) 27,967 24 February 2012 Short-term loan (NLB) 20,104 24 February 2011 Total PF Ljubljana 92,942 Non-current loan (SID bank) 11,261 19 July 2012 Non-current loan (SID bank) 14,979 15 June 2012 Non-current loan (SID bank) 1,376 31 May 2012 Short-term loan (NLB) 63,121 22 June 2012 Short-term loan (NLB) 20,984 22 June 2012 Syndicated long-term loan (NLB), short-term portion 128 31 May 2012 ADRIA BANK 7,050 27 April 2012 Total PF Zagreb 118,899 Non-current loan (SID bank) 5,038 30 April 2012 Non-current loan (SID bank) 5,038 12 November 2012 Short-term loan (NLB) 3,994 9 March 2012 Short-term loan (NLB) 4,993 9 March 2012 Short-term loan (NLB) 4,993 9 March 2012 Short-term loan (NLB) 7,490 9 March 2012 Total PF Belgrade 31,576 Non-current loan (SID bank) 2,004 16 June 2012 Short-term loan (NLB) 6,028 16 March 2012 Total PF Sarajevo 8,032 Total borrowings 251,449 Borrowings were remunerated at rates from 5.37% to 7.16% p.a. As at year-end 2012, the Group did not have receivables from the management of Group companies.

Annual report 2012 PRVI FAKTOR Group 97 5.24 Events after the statement of financial position date There have been no events after the statement of financial position date (31 December 2012) that could significantly affect the Group s consolidated financial statements contained herein.