Semi annual report 2015 an za objavo 17 8 2015

semi-annual

REPORT………………………………………………

Laško Group and Pivovarna Laško

2015

Semi-annual report 2015 / Contents

Laško Group and Pivovarna Laško 3

C O N T E N T SINTRODUCTION 5

ADDRESS BY THE CHAIRMAN OF THE MANAGEMENT BOARD 5

PRESENTATION OF THE LAŠKO GROUP 6

PRESENTATION OF THE PARENT COMPANYPIVOVARNA LAŠKO 9Company profile 9

Ownership structure of equity 10

BUSINESS REPORT 12

SUMMARY OF THE SEMI-ANNUAL PERFORMANCE 12Financial ratios 12

Events during the reporting period 15

Subsequent events 23

FINANCIAL POSITION OF THE LAŠKO GROUP 24Financing in the Laško Group 24

Sale of the investments of the Laško Group 26

FINANCIAL RISK MANAGEMENT 26Liquidity risk 27

The risk of changes in fair value 27

Credit risks 28

Interest rate risk 28

SALES 28Sales, marketing and development in the Laško Group 28

Sales of Laško Group products on the Slovenian market 36

Sales of Laško Group products on foreign markets 38

INVESTMENTS 40Investments in Pivovarna Laško 40

Investments in Pivovarna Union 41

EMPLOYEES 42Employee satisfaction and human resources development 43

Safety and health at work 44

Semi-annual report 2015 / Contents


FINANCIAL REPORT 45

STATEMENT OF COMPLIANCE 45

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTSOF THE LAŠKO GROUP for the period ended 30 June 2015 46Consolidated statement of financial position 46

Consolidated income statement 48

Consolidated statement of other comprehensive income 48

Consolidated statement of changes in equity 50

Consolidated statement of cash flows 52

Consolidated segment reporting 53

Notes to the unaudited consolidated semi-annual financial statements 54

UNAUDITED UNCONSOLIDATED FINANCIAL STATEMENTSOF PIVOVARNA LAŠKO for the period ended 30 June 2015 62Unconsolidated statement of financial position 62

Unconsolidated income statement 64

Unconsolidated statement of other comprehensive income 64

Unconsolidated statement of changes in equity 65

Unconsolidated statement of cash flows 67

Notes to the unaudited unconsolidated semi-annual financial statements 68

Semi-annual report 2015 / Introduction


INTRODUCTIONADDRESS BY THE CHAIRMAN OF THE MANAGEMENTBOARD

Laško comes into the hands of a strategic investor

In the first half of the year, more precisely on 13 April 2015 when the Share PurchaseAgreement (SPA) was signed, the joint process of the capital increase of Pivovarna Laškoand the sale of 4,471,054 shares of Pivovarna Laško, which represents a 51.11% stake, wassuccessfully completed. The sales consortium of Pivovarna Laško signed the SPA withthe Dutch company Heineken under several suspensive conditions. Pivovarna Laškoand the Sales consortium of Pivovarna Laško received five bids, which confirms thatthere was significant interest in the Laško Group and its companies.

In early June 2015, Pivovarna Laško signed the SPA for the sale of a 100% stake in Delowith the company FMR from Idrija. Before that, in March 2015, the transaction withKofola from the Czech Republic was successfully closed, resulting in Kofola becomingthe majority owner of Radenska. These events signify that we are quickly approachingthe last milestone stipulated in the Restructuring and Standstill Agreement concludedin late April 2014 with the 18 creditor banks.

Performance in accordance with the plan

The Laško Group performed well in the first six months of 2015 despite toughereconomic conditions in the domestic and export markets as a consequence of the deepeconomic crisis mainly affecting consumer purchasing power. In the first half of theyear, the Laško Group exceeded the sales volumes envisaged in the annual plan. TheLaško Group companies continue to consolidate their market positions on the mostimportant foreign markets to which more marketing inputs were attributed this year.As a result, Pivovarna Laško became sponsor of the Croatian basketball team and theofficial beer of the forthcoming European Basketball Championship which will takepace in early September in Zagreb.

Sound foundations for the next 190 years

Several events were organised this year. From the completion of the joint process of thecapital increase and sale of shares of Pivovarna Laško, the signing of the SPA for Delo,the transaction with the Radenska sales, to the sold-out Stožice stadium where theSlovenian national football team, under the proud sponsorship of Pivovarna Union,hosted the English football team, and the beginning of the celebrations of the 190thanniversary Pivovarna Laško. In the second half of the year we expect to stage a numberof events, which is something that cannot be achieved without the employees in ourcompanies. Two of the most important include the 51st annual "Pivo in cvetje" (Beerand flowers) festival, which in recent years has become one of the largest festivals in theregion, as well as the development of new brands, which are our wealth. All this fills uswith optimism that Slovenia's brewery tradition is in safe hands.



All in all: We have established sound foundations for the next 190 years!

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

PRESENTATION OF THE LAŠKO GROUP

The Laško Group brings together producers of beer, mineral, spring and natural water,soft drinks, spirits and other alcoholic beverages, syrups for beverage production,newspaper and publishing activities, as well as retail and wholesale trade.

Ownership and equity shares as at 30 June 2015:

Controlling company

PIVOVARNA LAŠKO, Slovenia

Subsidiaries

PIVOVARNA UNION, d. d., Ljubljana, Slovenia98.0796% ownership stake

JADRANSKA PIVOVARA – Split, d. d., Croatia99.4603% ownership stake

VITAL MESTINJE, Slovenia96.92% shareholding)

In addition to beverage producers, the Group also comprises the following subsidiaries:

DELO, Ljubljana, Slovenia100% ownership stake

LAŠKO GRUPA, Sarajevo, Bosnia and Herzegovina100% shareholding - of that, Pivovarna Laško has a 84.6106% shareholding andPivovarna Union a15.3894% shareholding

FIRMA DEL, Laško, Slovenia(100.00% shareholding)

LAŠKO GRUPA, Zagreb, Croatia(100.00% shareholding)

LAŠKO GRUPA Kosovo(100.00% shareholding)



Pivovarna Laško, d. d., Trubarjeva 28, Laško, drafts an unaudited consolidated semi-annual report for the controlling entity and the subsidiaries in the Laško Group. Thefull consolidation method is used in drafting the consolidated financial statements.

The consolidated financial statements comprise the financial statements of thecontrolling entity Pivovarna Laško and its subsidiaries, in which the controlling entityhas a controlling interest.

As Pivovarna Laško disposed of its subsidiary Radenska in March 2015, Radenska is nolonger part of the Laško Group as at 30 June 2015.

Due to their material irrelevance, the following companies are not included in theconsolidation: Laško Grupa, Sarajevo, Firma Del, Laško and Laško Grupa Kosovo

Associates

THERMANA, Laško, Slovenia20.63% ownership stake

SLOPAK, Ljubljana, Slovenia19.48% ownership stake



Organisation chart of the Laško Groupas at 30 June 2015

PIVOVARNA JADRANSKA LAŠKO COMPANY NAME LAŠKO LAŠKOUNION, d. d., PIVOVARA - Split, VITAL Mestinje, DELO, d. d., GRUPA, d. o. o., DEL, d. o. o., GRUPA, d. o. o., GRUPA Kosovo,Ljubljana d. d. d. o. o. Ljubljana Sarajevo Laško Zagreb Sh. p. k.Ownersh.: 98.0796% Ownersh.: 99.4603% Holding: 96.920% Ownership: 100% Holding: 100% Holding: 100% Holding: 100% Holding: 100%

No. of shares: 442,451 No. of shares: 5,396,932 No. of shares: 667,464

Subsidiary of Delo: Pivovarna Laško IZBERI, d. o. o. Holding in Laško

Ljubljana Grupa Sarajevo Holding: 100% I84.6106%

Pivovarna UnionHolding in LaškoGrupa SarajevoI15.3894%

LAŠKO GROUP

PIVOVARNA LAŠKO

SubsidiarySubsidiary Subsidiary Subsidiary Subsidiary SubsidiarySubsidiary Subsidiary

as at 30 June 2015

Controlling company



PRESENTATION OF THE PARENT COMPANYPIVOVARNA LAŠKO

Company profile

PIVOVARNA LAŠKO, d. d., Trubarjeva 28, 3270 Laško, is registered with the DistrictCourt in Celje under the registration no. Srg 95/00673 and under the file no. 1/00171/00dated September 1995.

Abbreviated company name: PIVOVARNA LAŠKO

Organisational form: public limited company

Share capital: EUR 36,503,305Number of issued shares: 8,747,652 no par-value shares

Listing of shares: Ljubljana Stock Exchange, stock exchange listingof regular shares

Ticker symbol: PILR

Company registration number: 5049318Tax number: SI90355580Activity code: 11.050

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

Management Board mag. Dušan Zorko, Chairmancomprised of five members: Marjeta Zevnik(as at 30 June 2015) Mirjam Hočevar

Gorazd Lukman(early termination of office on 31 July 2015)Matej Oset

Supervisory Board: Goran Brankovič, Chairman(as at 30 June 2015) mag. Dragica Čepin, Deputy Chairwoman

Janez Škrubejmag. Jože Bajukmag. Nataša Kočardr. Peter Groznik

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



Ownership structure of equity

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

In accordance with the provisions of the Act Concluding the Ownership Transformationand Privatisation of Legal Entities Owned by the Development Corporation of Slovenia(ZZLPPO), the shares with the PILH ticker symbol, which were owned by D.S.U., d.o.o.,were converted into PILR shares. In this procedure, 136,171 shares were exchanged on10 June 2015 at the order of the company D.S.U. d.o.o. issued to the KDD (the CentralSecurities Clearing Corporation in Ljubljana). On 11 June 2015, the number of PILRshares quoted on the stock exchange increased by this number.

As at 30 June 2015, the Company had 7,035 shareholders, 1.63% more than as at 30 June2014.

Ownership structure of the equityas at 30 June 2015

As at 30 June 2015, the ten largest shareholders held a total of 5,424,813 shares or 62.01%of the total share capital. This is 729,318 shares (or 11.8%) less than as at 30 June 2014,when the ten largest shareholders of Pivovarna Laško owned 6,154,131 shares.

(30 June 2015) no. of shares in % positionDUBT, d. d. 2,089,260 23.884 1.Kapitalska družba, d. d. 627,252 7.171 2.Austrian Anadi Bank AG - escrow account 613,300 7.011 3.Skagen Kon-tiki Verdipapirfond 507,181 5.798 4.Alpen.SI, m ešani fleksibilni podsklad 357,265 4.084 5.SOP Ljubljana 347,873 3.977 6.Abanka, d. d. 289,976 3.315 7.Banka Koper, d. d. 225,346 2.576 8.KD Galileo, fleksibilna struktura naložb 220,202 2.517 9.KD Balkan, delniški 147,158 1.682 10.Total - 10 largest shareholders 5,424,813 62.015Other m inority shareholders 3,322,839 37.985Total - all shareholders 8,747,652 100.000



Shares

The shares of Pivovarna Laško with the PILR ticker symbol have been quoted on theregulated securities market of the Ljubljana Stock Exchange since 1 February 2000 asordinary shares. As of 30 June 2014, the share capital of the Company amounts to EUR36,503,305 and is divided into 8,747,652 no par-value shares. As at 30 June 2015,8,747,652 PILR shares were registered in the central registry kept by the KDD.

The book value of a PILR share as at 30 June 2015, calculated as the book value of capitaldivided by the number of shares, amounted to EUR 9.43, 42.0% up on the last day ofthe previous year, when it stood at EUR 6.64.

The market value of one PILR share at 30 June 2015 amounted to EUR 24.30, which is106.3% more than as at 31 December 2014, when it amounted to EUR 11.78.

Number of shares and shareholdings of members of the Management Board (MB) andSupervisory Board (SB) of Pivovarna Laško in the Company's subscribed capital as at30 June 2015

The other members of the Supervisory Board were not holders of Pivovarna Laškoshares as at 30 June 2015.

Capital increase, authorised and conditional capital

On 19 June 2015, the General Meeting of Pivovarna Laško resolved not to increase theshare capital of the Company by cash contributions, nor did it decide to allow aconditional or authorised increase in the share capital. This explanation has been addedin accordance with stock exchange rules.

(shareholder) M em bership No. of shares Participation in %m ag.Dušan Zorko Chairm an of the M B 3,066 0.0350M arjeta Zevnik M em ber of the M B 2,282 0.0261M irjam H očevar M em ber of the M B 2,279 0.0261Gorazd Lukm an M em ber of the M B 1,696 0.0194M atej Oset M em ber of the M B 2,766 0.0316m ag.Dragica Čepin M em ber of the SB 3,466 0.0396Total 15,555 0.1778

Semi-annual report 2015 / Business report


BUSINESS REPORTSUMMARY OF THE SEMI-ANNUAL PERFORMANCE

Financial ratios

Significant data on the operationsof the Laško Group (continued and discontinued operations)*

(in EUR) I.- VI./ 2015 I.- VI./ 2014 I.- VI./ 2013Net sales revenues 111,804,932 130,515,275 129,597,964EBIT 13,516,914 16,057,945 14,747,353Norm alised EBIT 12,936,104 16,661,494 15,628,519EBITDA 19,283,637 24,085,561 23,624,386Norm alised EBITDA 18,702,827 24,689,110 24,505,552Net interest expense1 -5,463,004 -8,362,395 -9,029,270Net profit or loss 5,482,586 7,339,025 -2,283,080

1Interest incom e - interest expense

(in EUR) 30 Jun 2015 31 Dec 2014 31 Dec 2013Non-current assets 219,900,468 238,353,317 284,057,058Property, plant and equipm ent 122,678,375 133,339,070 170,065,814Current assets including deferred andaccrued item s 110,046,037 113,820,029 170,434,237Capital 59,164,496 62,289,213 58,213,883Long-term liabilities includingprovisions and accrued costs anddeferred incom e 106,507,388 115,887,195 31,155,169Current liabilities +accrued costs anddeferred incom e 164,274,621 173,996,939 365,122,243Net current assets or liabilities2 -54,228,584 -60,176,910 -194,688,006Net financial debt3 193,056,689 215,769,657 235,885,133

2Current assets including deferred costs and accrued incom e - current liabilities including2accrued costs and deferred incom e3(Non-current and current financial liabilities) - (non-current and current investm ents + cash and cash3equivalents

(in EUR) I.- VI./ 2015 I.- VI./ 2014 I.- VI./ 2013Net cash flows from operatingactivities 16.366.642 21.213.399 17.908.551Net cash flows from investing 22.717.974 62.406.733 2.996.456Net cash flows from financing -40.177.795 -78.460.417 -21.488.590Total net cash flows -1.093.179 5.159.715 -583.583



Ratios*

*Note: due to the change in the composition of the Laško Group, the data in the tables relating to differentperiods are not comparable.

Significant data on the operationsof Pivovarna Laško

I.- VI./ 2015 I. - VI. / 2014 I. - VI. / 2013Share of norm alised EBIT in net salesrevenue 11.6 % 12.8 % 12.1 %Share of norm alised EBITDA in netsales revenue 16.7 % 18.9 % 18.9 %Interest coverage4 2.368 1.992 1.731Net profit or loss in net sales revenue 4.9 % 5.6 % -1.8 %Return on equity (ROE)5 9.2 % 13.7 % -2.7 %Return on assets (ROA)6 1.6 % 1.7 % -0.5 %Liabilities /equity 4.577 4.654 4.8194Norm alised EBIT / net interest expense5Net profit or loss / average equity in the period6Net profit or loss / average assets in the period

(in EUR) I.- VI./ 2015 I.- VI./ 2014 I.- VI./ 2013Net sales revenues 44,684,874 45,821,150 43,497,126EBIT 4,165,385 5,515,328 5,806,377Norm alised EBIT 4,601,788 5,837,765 6,652,120EBITDA 6,320,773 7,735,778 8,131,233Norm alised EBITDA 6,757,176 8,058,215 8,976,976Net interest expense1 4,608,127 -6,432,240 -6,455,250Net profit or loss 24,460,836 -641,993 -3,742,840

1Interest incom e - interest expense



Ratios

(in EUR) 30 Jun 2015 31 Dec 2014 31 Dec 2013Non-current assets 243,530,996 246,873,598 301,383,218Property, plant and equipm ent 46,455,466 43,868,755 43,937,583Current assets including deferred andaccrued item s 45,087,407 72,984,027 55,677,706Capital 82,531,846 58,071,010 68,078,212Long-term liabilities includingprovisions and accrued costs anddeferred incom e 68,937,521 78,747,429 9,013,665Current liabilities +accrued costs anddeferred incom e 137,149,036 183,039,186 279,969,047Net current assets or liabilities2 -92,061,629 -110,055,159 -224,291,341Net financial debt3 -2,460,347 56,665,631 3,662,777Net financial debt less investm ents insubsidiaries4 161,611,469 225,266,873 228,189,002

2Current assets including deferred costs and accrued incom e - current liabilities including2accrued costs and deferred incom e3(Non-current and current financial liabilities) - (non-current and current investm ents + cash and cash3equivalents4(Non-current and current financial liabilities) - (non-current investm ents less interests in subsidiary4com panies + current investm ents + cash and cash equivalents)

(in EUR) I.- VI./ 2015 I.- VI./ 2014 I.- VI./ 2013Net cash flows from operatingactivities 2.479.808 10.212.786 6.373.619Net cash flows from investing 68.035.272 25.229.103 1.553.978Net cash flows from financing -69.723.364 -35.585.496 -7.001.737Total net cash flows 791.716 -143.607 925.860

I.- VI./ 2015 I. - VI. / 2014 I. - VI. / 2013Share of norm alised EBIT in net salesrevenue 10.3 % 12.7 % 15.3 %Share of norm alised EBITDA in netsales revenue 15.1 % 17.6 % 20.6 %Interest coverage5 -0.999 0.908 1.030Net profit or loss in net sales revenue 54.7 % -1.4 % -8.6 %Return on equity (ROE)6 35.0 % -1.0 % -4.0 %Return on assets (ROA)7 8.3 % -0.2 % -1.0 %Liabilities /equity 2.497 4.508 4.2035Norm alised EBIT / net interest expense6Net profit or loss / average equity in the period7Net profit or loss / average assets in the period



Events during the reporting period

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

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

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

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

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

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

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

The Sales consortium is comprised of: Družba za upravljanje terjatev bank, d. d.,Kapitalska družba pokojninskega in invalidskega zavarovanja, d. d., Alpen invest,družba za upravljanje investicijskih skladov, d. o. o., Abanka Vipa, d. d., KD Skladi,družba za upravljanje, d. o. o., Nova Kreditna banka Maribor, d. d., ZavarovalnicaTriglav, d. d., Sklad obrtnikov in podjetnikov and Banka Koper, d. d. The consortiumholds a 51.11% stake in Pivovarna Laško.



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

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

Signing the sales agreement between the Sales consortium and Heineken InternationalB.V. represents the fulfilment of a significant milestone referred to in the Standstill andRestructuring Agreement, which the Laško Group companies concluded on 30 April2014 with all 18 creditor banks.

The proceeds will be paid and the shares transferred upon the fulfilment of thesuspensive conditions defined in the Share Purchase Agreement.

2. The sale of the shares in Radenska

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

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

The sale of the 75.31% equity stake in Radenska was successfully closed on 17 March2015. From the transaction (disposal of the investment in Radenska), Pivovarna Laškoreceived proceeds amounting to EUR 51,805,392.57. The proceeds significantlycontributed to the deleveraging of Pivovarna Laško in accordance with the Standstill andRestructuring Agreement.

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



The General Meeting of shareholders of Radenska was held on 17 March 2015 as part ofthe conclusion of the sale of Radenska. At the General Meeting, the shareholdersapproved changing the company's articles of association, were briefed on theresignation of the existing members of the company's Supervisory Board and electednew members of the Supervisory Board.

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

After the closing of the sale of the stake in Radenska owned by Pivovarna Laško on17 March 2015, all the denationalisation claims and procedures continue againstRadenska, as Pivovarna Laško has not been contractually bound to acquire them. As aresult, all the contingent liabilities arising from the above-mentioned denationalisationrequests remain with Radenska.

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

3. Sale of the shares of Delo, Ljubljana

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

On 3 June 2015, Pivovarna Laško concluded a Share Purchase Agreement for the sale ofa 100% stake in Delo with the company FMR, financiranje in upravljanje naložb, d. d.The buyer will pay the purchase price in the amount of EUR 7.3 million for a 100% stakein the company Delo. The Agreement was concluded under a number of suspensiveconditions which must be fulfilled before the transaction can be finalised. On 15 June2015, the Supervisory Board of Pivovarna Laško gave its consent to the sale of the sharesin Delo, Ljubljana. This consent is one of the suspensive conditions for the transactionto be finalised.

When all the suspensive conditions have been fulfilled by both the seller and the buyer,the sale is expected to be completed in the coming months.

4. Fulfilling the milestones referred to in the Restructuring and StandstillAgreement

At the end of April 2014, Pivovarna Laško and Pivovarna Union (at that time, Radenskawas also a member of the Laško Group) signed a Restructuring and StandstillAgreement (hereinafter the Agreement) with all of the 18 creditor banks. TheAgreement defines important financial restructuring milestones, whereas final



maturity of the majority of the companies’ borrowings was rescheduled to the end of2016.

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

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

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

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

On 23 April 2014, Pivovarna Laško replied to the letters of Pivovarna Union andRadenska, informing both companies that it has been informed of their claims. At thesame time, both companies were requested to provide confirmation of the amounts byauditors.

In light of the aforementioned, provisions of EUR 1,044,183.99 have been disclosed inthe financial statements of Pivovarna Laško for the financial year ended 31 December2014.

On 13 February 2015, Pivovarna Laško received from Radenska the letter entitled"Settlement claim pursuant to paragraph 1 of Article 542 of the ZGD-1", which wassupplemented with the auditor's report dated 12 February 2015. With this letter,



Radenska informed Pivovarna Laško that it received on 11 February 2015 the auditor'sreport on the audited interim balance sheet for the duration of the contractual group,thus fulfilling all the conditions for the recognition of the amount of the settlementclaim. The audited amount of Radenska's settlement claim for the period between 6February 2012 and 26 April 2012 amounts to EUR 1,044,183.99, as evidenced by theIndependent Auditor's Report provided by Deloitte Revizija d.o.o. on 11 February 2015relating to the audit of the net profit or loss generated in the period between 6 February2012 and 26 April 2012. In light of the closing of the sale of Radenska, on 17 March 2015Pivovarna Laško recognised and settled the said audited settlement claim of Radenskain full.

6. Compensatory actions against Atka-Prima / Boško Šrot

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

On 14 July 2014, Pivovarna Laško received the interim judgement of the Celje DistrictCourt in the industrial dispute between Pivovarna Laško as the plaintiff and Atka-Prima,Celje and Boško Šrot as defendants for the payment of EUR 13,336,488.76 plus costsand interest. The court decided that the claim of the plaintiff for damages arising fromthe transactions or loan agreements concluded in 2009 by the plaintiff and InfondHolding and the plaintiff and Center naložbe, and the sales agreement concluded in2008 for the purchase of shares in Thermana between Infond Holding as the seller andthe plaintiff Pivovarna Laško as the buyer, is justified. At the same time, the court haltedthe proceedings for the payment made on 24 September 2013 of EUR 89,382.56 fromthe bankruptcy estate of Infond Holding, d. d. – v stečaju and the payment made on 30December 2013 of EUR 410,236.03 from the bankruptcy estate of Center naložbe, d. d.- v stečaju. The interim judgement and decision are not yet final.

The defendants appealed against the resolution of the court of first instance concerningthe exemption of court fees for the appeal against the judgement. With its resolutionserved to Pivovarna Laško on 1 April 2015, the Celje High Court decided to stay anydecision on the appeal against the court fees until the Constitutional Court of theRepublic of Slovenia decides the request of the Celje High Court to assess theconstitutionality of paragraph 3, article 12 and paragraph 1, article 21 of the Court FeesAct (ZST-1).



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

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

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

This matter actually concerns the enforcement matter in which the court issued on22 December 2011 its decision allowing the enforcement against 345,304 pledged RARGshares for the payment of EUR 7,349,552.25 (see: Enforcement of NKBM (new creditorBAMC) against Pivovarna Laško). The enforcement related to the agreement on thepledge of book-entry securities concluded on 5 June 2009 between Nova kreditna bankaMaribor (NKBM) as the creditor, Center naložbe as the debtor and Pivovarna Laško asthe lienor, according to which Pivovarna Laško pledged the shares as collateral for a loanraised by Center naložbe with NKBM. The aforementioned agreement on the pledge ofbook-entry securities was signed by the former director Boško Šrot on behalf ofPivovarna Laško. On 16 June 2014 the court allowed the BAMC to take the place of theoriginal creditor Nova KBM, Maribor, as the disposal of the underlying claim hadresulted in the automatic transfer of the lien from the former to the current creditor.

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

After the entry into force of the Denationalisation Act (ZDen), 304 denationalisationapplications were filed against the company's equity (Pivovarna Laško was then a publiccompany); of these, 286 applications were filed by the former shareholders ofGostilničarska pivovarna, d. d., Laško, while 18 applications were related to the loan theshareholders extended to Gostilničarska pivovarna, d. d. before the Second World War.As a result, during its ownership restructuring, Pivovarna Laško made provisions of471,284 Pivovarna Laško shares in accordance with the Act. By the time the ownershiprestructuring was entered into the court register, 295,423 shares had already beenreturned, while the remaining 175,861 shares were transferred to Slovenska razvojnadružba (currently: D.S.U., d. o. o., Ljubljana). These shares have the PILH ticker symbol.D.S.U. still manages 136,171 PILH shares.

Article 51 of the Act Concluding Ownership Transformation and Privatisation of LegalEntities Owned by the Development Corporation of Slovenia (the ZZLPPO) providesthat when the return of shares managed by D.S.U., d. o. o. for the account ofdenationalisation beneficiaries is rejected by a final judgement since no



denationalisation is possible, D.S.U. shall offer the shares to existing shareholders forpurchase in the ratio of their existing shareholdings. The value of the shares isdetermined in accordance with the ZZLPPO.

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

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

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

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

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

9. General Meeting of Shareholders of Pivovarna Union

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

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

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



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

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

10. General Meeting of Shareholders of Pivovarna Laško

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

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

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

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

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

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

On 23 April 2015, Pivovarna Laško received from Družba za upravljanje terjatev bank,d. d., (DUTB) as coordinator of the consortium of sellers of the stake in Pivovarna Laško,notice that it had received the resignation letters of Goran Brankovič, Janez Škrubej,Peter Groznik and Jože Bajuk, who resigned from the Supervisory Board of PivovarnaLaško with legal effect from the date and under the condition that all sales conditionsare fulfilled and that the sale will close in accordance with the PILR share purchase



agreement concluded on 13 April 2015 between the consortium of sellers and HeinekenInternational, B. V., Amsterdam.

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

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

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

Mirjam Hočevar, member of the Management Board of Pivovarna Laško, acquired35 PILR shares and currently holds a total of 2,279 PILR shares, representing0.0261% of the voting rights of all shares in the share capital of the issuer,

Matej Oset, member of the Management Board of Pivovarna Laško, acquired 35PILR shares and currently holds a total of 2,766 PILR shares, representing0.0316% of the voting rights of all shares in the share capital of the issuer,

Marjeta Zevnik, member of the Management Board of Pivovarna Laško, acquired35 PILR shares and currently holds a total of 2,282 PILR shares, representing0.0261% of the voting rights of all shares in the share capital of the issuer,

Dragica Čepin, member of the Management Board of Pivovarna Laško, acquired 53PILR shares and currently holds a total of 3,466 PILR shares, representing0.0396% of the voting rights of all shares in the share capital of the issuer.

Subsequent events

1. The Supervisory Board of Pivovarna Union elects its own Chairman andDeputy Chairman among its members.

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

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

In 2006 Pivovarna Laško filed an application for enforcement against Cen Adria,Matulji, demanding payment of outstanding invoices totalling Kn 857,292.53 (Euroequivalent of 114,764.73) including costs and interest. Cen Adria appealed against theenforcement ruling and currently the case is proceeding in the same way as in the caseof an appeal against a payment order in contentious proceedings. In 2006, during theabove proceedings, Cen Adria filed a counter action against Pivovarna Laško and



Jadranska pivovara - Split, Vranjic, demanding payment of damages totallingKn 25,000,000.00 (Euro equivalent of approx. 3,346,720.21), which Cen Adria allegedlyincurred due to the early termination of the Business Cooperation Agreement (Ugovoro poslovnoj suradnji).

In 2012, bankruptcy proceedings were instigated against Cen Adria.

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

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

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

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

FINANCIAL POSITION OF THE LAŠKO GROUP

Financing in the Laško Group

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

In the first half of the year, the Laško Group reduced its exposure to banks in terms ofloan principal by EUR 26.1 million (net): of that, EUR 31.5 million relates to PivovarnaLaško, while Pivovarna Union increased its exposure to banks by EUR 5.7 million, andDelo decreased its exposure by EUR 0.2 million (net) in the first half of the year,including changes to the drawing of revolving loans approved. Upon the closing of thesale of Radenska on 17 March 2015, Pivovarna Laško and Pivovarna Union also settledall liabilities due to Radenska relating to inter-company loans.



In the first half of the year, the Laško Group recorded EUR 5.5 million of interestexpenses from financial liabilities due to banks and recorded an EBITDA of EUR 19.2million. Most interest was recorded by Pivovarna Laško, namely EUR 4.3 million. Thisresulted in an EBITDA of EUR 6.3 million, meaning that the EBITDA generated in thefirst half of the year is sufficient to cover all interest expenses from financial liabilitiesdue to banks on account of the principal amounts.

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

On 31 March 2015, Pivovarna Laško, again in line with the repayment schedule outlinedin the Restructuring and Standstill Agreement, made a further loan repaymentamounting to EUR 3.5 million, this time from cash flow generated from its core activity.

The next significant step to realising the third milestone outlined in the Restructuringand Standstill Agreement was signing the agreement on the sale of a material stake inPivovarna Laško, which occurred on 13 April 2015. For more information, see ChapterEvents during the reporting perioditem 4 Fulfilment of milestones from theRestructuring and Standstill Agreement.

On 3 June 2015, Pivovarna Laško concluded a Share Purchase Agreement for the sale ofa 100% stake in Delo with the company FMR, financiranje in upravljanje naložb, d. d.The buyer will pay the purchase price in the amount of EUR 7.3 million for a 100% stakein the company Delo. The Agreement was agreed under a number of suspensiveconditions which must be fulfilled before the transaction can be finalised. ThusPivovarna Laško will achieve the second milestone pursuant to the Restructuring andStandstill Agreement.

In accordance with the repayment schedule, on 30 June 2015 Pivovarna Laško paid aninstalment of the borrowings in the amount of EUR 4.4 million, and thus reduced itsborrowings from banks to EUR 154 million of the total amount of approved revolvingcredit facility. As at 30 June 2015, total liabilities due to banks by Pivovarna Union thusamount to EUR 44.3 million.



Sale of the investments of the Laško Group

In 2015, the Laško Group continued activities aimed at the disinvestment of financialinvestments as well as of other assets the Group does not need for its operations. Onthe basis of the operational and financial restructuring of the Laško Group, the sale ofRadenska, d. d., Radenci, was successfully concluded on 17 March 2015, while thetransfer of the balance of the consideration from the sale of Birra Peja completed thesale of this investment in the Kosovar brewery. In addition, on 3 June 2015 the salescontract for the sale of the entire stake in the company Delo, was also signed. Thetransaction is expected to close in the next few months.

Sale of Delo

When all the suspensive conditions have been fulfilled by both the seller and the buyer,the sale is expected to be completed in the coming months. For more information, seeChapter Events during the reporting period, namely item 3 Sale of the Delo, Ljubljanashares.

The sale of Radenska, Radenci

This transaction closed on 17 March 2015. For more information, see Chapter Eventsduring the reporting period, namely item 2 Sale of the Radenska, Radenci shares.

The sale of Jadranska pivovara – Split

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

FINANCIAL RISK MANAGEMENT

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

Long-term stability of the Group’s operations dictates concurrent and detailedmonitoring and assessment of financial risks. In 2015, the Company continues to followthe objective of achieving stable operations and reducing exposure to individual risks toa sustainable level. The companies are unable to fully hedge all risks, but can reduce oravoid risks from materialising with timely measures. To this end, the companiescontinuously recognise and assess risks, taking the relevant measured depending onthe target risk exposure. Risk management measures have been built into our day-to-day operations. All recognised risks have been recorded in the risks register, which isamended as needed. Particularly significant among financial risks faced by the Groupas well as each individual company are liquidity risk, risk related to the decrease in fair



value of investments, property, plant and equipment and investment property, creditrisk and to some extent also interest rate risk.

Liquidity risk

The Group, and especially Pivovarna Laško, discloses an excess of current liabilities overcurrent assets, signifying the existence of a significant liquidity risk. Although theStandstill and Restructuring Agreement which was concluded on 30 April 2014, hassignificantly reduced the insolvency risk and improved the structure of financingsources, the Group must pay significant attention to its liquidity risk.

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

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

Monitoring of the fundamental financing and liquidity ratios pursuant to Article 14 ofthe Financial Operations, Insolvency Proceedings and Compulsory Dissolution Act,which prescribes criteria under which an entity is deemed insolvent, is particularlyimportant and necessary in ensuring effective liquidity risk management. Regularmonitoring of an entity's liquidity position is of particular importance as it ensurestimely response and helps to avoid unfavourable consequences of an emerging liquiditycrisis.

In April, sales consortium of owners of Pivovarna Laško, concluded with HeinekenInternational B.V. a contract of sale and purchase of shares (SPA), pursuant to whichthe company Heineken acquired 4,471,054 shares or 51.11% stake in Pivovarna Laško.The signing of the contract represents a continuation of the fulfilment of theRestructuring and Standstill Agreement. The proceeds will be paid and the sharestransferred upon the fulfilment of the suspensive conditions defined in the SharePurchase Agreement. Upon signing the Share Purchase Agreement, the buyer alsoconcluded a Cooperation agreement with Pivovarna Laško, with which the buyerundertakes to ensure the continued financial stability of Pivovarna Laško after thetransaction closes.

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

The risk of changes in fair value

The risk of changes in fair value of financial investments, property, plant and equipmentand investment property is undoubtedly also an important financial risk. The risk canbe observed in the segment of financial expenses where financial expenses from theimpairment and write-off are disclosed. The sale of the investment in Mercator in lateJune last year has resulted in a significant reduction in the risk of changes to fair values



due to the impairment of investments. The sales of Radenska and Delo (the contract forthe sale of the latter was signed on 3 June 2015) will bring a further reduction in the riskof changes in fair value of financial investments. However, the risk of a fall in the otherfinancial investments and real estate held by the Group still remains.

Credit risks

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

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

Interest rate risk

is the risk of a possible change in the reference interest rate on the financial market,mainly due to Euro borrowings linked to a variable interest rate (EURIBOR). Interestrate hedging of long-term debt at variable interest rate is doubtlessly sensible; however,since our loans were restructured until 31 December 2016 on 30 April 2014, we willmonitor events on the financial markets and act when appropriate. Even though theEURIBOR reference interest rate showed a downward trend, which continues also in2015, we estimate the Company's exposure to interest rate risks as high, butmanageable.

SALES

Sales, marketing and development in the Laško Group

Sales

We achieved the planned sales in the first six months of 2015. The economic situationin the region remains unstable. Consumers have permanently changed theirpurchasing habits towards more prudent and smaller purchases. Changes in theconsumption structure continue and reveal a growth in the discount supermarketsegment and customer inclination towards supermarket brands.



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

The Laško Group sales data includes sales of Pivovarna Laško, Pivovarna Union andVital Mestinje. Radenska was sold in March 2015 and in addition, this year Birra Peja isno longer part of the Laško Group as it was sold in July 2014.

In the first six months of 2015, the Laško Group (Pivovarna Laško, Pivovarna Union andVital) sold 1,257,352 hectolitres of all beverages, which is 0.8% above the plan. In thebeer segment the growth of supermarket brands continues. We continue to optimizethe sales portfolio in order to improve the profitability of the Laško Group.

Quantitative sales of beveragesof the Laško Group

Marketing and development

BEER

Laško

In the first half of the year we focused on the implementation of the planned activities(production of creative ATL solutions and accompanying BTL activities), especially forthe Laško Zlatorog umbrella brand, as well as other brands in the Pivovarna Laškoportfolio - the Laško Special range of craft beers, Laško Malt, and other beer productactivities.

In 2015 Pivovarna Laško celebrates 190 years of its existence, which we marked with anumbrella campaign and the supporting slogan "Ostani ponosen" (stay proud) with BorisCavazza in the main role. We prepared a wide range of campaigns for a variety of mediachannels, focussing on TV and outdoor advertising (hereinafter referred to as the OOHcampaign). We are strongly supporting the campaign also with online activities. Thecampaign was adapted and aired also on the Croatian market and in the market ofBosnia and Herzegovina.

In May and June we organised the "Spirito Creativo" campaign on billboards and radiostations in Italy. Part of the communication was directed at advertising the "Pivo incvetje" event which is a highly popular destination for Italian visitors.

Index Index Index(in hl) I.-VI./2015 2015/2014 2015/dyn. plan 2015/an. planBeer 1,001,975 95.3 99.7 48.7W ater 98,644 98.7 111.5 54.0Non-alcoholic beverages 156,733 82.2 101.7 52.0T O T A L 1,257,352 93.7 100.8 49.4



Laško Special continues to strengthen its position in the "craft beer" segment. Thecampaign was aimed at specialized print and online media, where we are reachingspecific target groups suitable for such products. Much attention has been devoted tothe promotion of sales in the segment of trade and HORECA carried out by PivovarnaLaško.

Regular marketing campaigns were supported with numerous sales activities at thelevel of individual retailers for all brands (drafting of advertising, offers and points ofsale equipment).

In the broader media mix, Laško Malt was advertised through a tailored ATL campaignfrom 2014, and in addition we organised a prize competition on the package, which isstill ongoing. Among the interesting and very effective BTL activities relating to Malt weshould, in addition to "0.0 šofer" (0.0 driver) also mention a series of short viral shortvideo clips "Mikić osvaja Slovenijo" (Mikić conquers Slovenia) which has been very wellaccepted, especially among the younger target audience and has been recording goodviews results. The Malt communication was also carried out in the export market ofBosnia and Herzegovina.

To mark the 190th anniversary, at the product level we launched on the market two canswith "retro" motifs in March and June, while a further three motifs are planned to belaunched by the end of the year: together they communicate the story of the LaškoZlatorog beer over time.

For the sixth year in a row we carried out the "Zlatorogova transverzala ponosa" sociallyresponsible campaign. Today, this is the largest hiking project in Slovenia, which hasattracted almost 30,000 hikers to the mountains, and has been hailed as one of thelargest socially responsible campaigns on Slovenian soil, supported by the AlpineAssociation of Slovenia. Marketing communication was specifically adapted for thiscampaign with a minimum extent of media purchasing, through local exposure of eachevent on OOH, and supported by strong online communication and the minimalpurchase of printed media.

We were also busy with preparations for the traditional "Pivo in cvetje" event that tookplace between 16 and 19 July 2015, where the marketing team was fully involved inresolving a huge organisational challenge. The event, which has grown into a festival,has for the third consecutive year been organised by Pivovarna Laško and its operationalteams, in cooperation with the municipality and many local associations andindividuals. Long ago the "Pivo in cvetje" event became so much more than a meremarketing tool and sales channel for the Pivovarna Laško brands. As the event isbecoming larger and more important, it is increasingly becoming a festival of all thosewho co-create and participate in it. The annual festival is thus the most importantholiday for the people of Laško, who through their local cultural, sports, and otherhorticultural societies and several months of preparation breathe and live for the eventand extend their hospitality. Each year between 700 to almost 1,000 inhabitants areinvolved in the festival preparations and it is this that separates the "Pivo in cvetje"festival from all the others held in the region.



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

We concluded the development process of the new Pear Melissa flavour in the LaškoMalt range, which was launched on the market in April, and we will also soon concludedevelopment of the cherry & chestnut and buckwheat flavours of the Laško Specialrange. We also prepared all the activities for the new beer Arpanet (strong beer) in theSpecial range, which was introduced as draft beer during the "Pivo in cvetje" festival.

Union

In the first half of 2015 Pivovarna Union continued with its communication strategythat has run over the past few years, and which has been slightly upgraded. Ourcommunications campaign "Pivovarna Union povezuje" continues and upgrades thebrand's underlying communication elements. In April the campaign brought togetherformer classmates, enthusiastic spectators of sports both at home and in the bar, co-workers and future white collar workers.

Among other things, we prepared a new TV ad (promoting both alcoholic and non-alcoholic Union beer), adapted last year's advertisements (Passion) and prepared a newradio advertisement and a series of print, billboard and citylight advertisements. Inaddition, we redesigned the entire web site.

Earlier this year we launched the redesigned entire range of alcoholic Radler (grapefruit,red orange and lemon), using a modern design to emphasize the freshness, lightnessand youthfulness of the brand. To this end, we organised a Radler competition withcash prizes, which lasted from April to the end of June 2015.

For the Radler brand we also prepared PR activities aimed at raising awarenessespecially among the younger population of the need for the more responsible andmoderate drinking of alcohol, and prepared a series of TV advertisements and citylightadvertisements.

In all our communication materials we are introducing the text "drink responsibly".

The results of measuring the effectiveness of communications of all brands in the beersegment indicate a more efficient allocation of resources since our communicationshave been assessed as appealing, easy to understand and have recorded good results inmeasuring recall.



SOFT DRINKS

Sola

In 2015 the Sola brand began communications for its most popular and most successfulsales brand - Sola Ice Tea. We prepared an outdoor campaign using BB advertisements.According to research results, the campaign was highly visible and likeable. In thewinter months we prepared a music contest for teenagers in primary schools throughthe Sola Ice Tea Beats music application.

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

In cooperation with the Hockey Association of Slovenia, we devised the "Zadeni kot ris"prize competition in shopping centres in support of the Sola Isošport brand, whichattracted a lot of sports fans and Sola consumers during the hockey championship.

In April, we launched a new product in the fruit juice drink category called Sola Hey(blueberry and grape flavour). The new drink immediately impressed all thoseconsumers that love the full flavour of Sola drinks. This new product represents thewidening the range of Sola fruit juice drinks. A new Sola Hey drink was introduced atnumerous tastings in June, while we also carried out a BB campaign, a prizecompetition and ran radio advertisements.

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

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

WATER

Zala

A new communication strategy is currently being devised for the Zala brand to run in2016 and beyond, and thus no major marketing activities are currently being carried



out. Most marketing activities take place online, while during the peak season wepromote the product on giant billboards along the motorway. Other activities areongoing at points of sale, for which we provide support material, and various projectshave been adapted to specific sales channels (petrol stations, vending machines, etc.).According to the latest results the Zala brand is successfully maintaining the leadingmarket share in the segment of still waters, also on account of point of sale activities.

In order to devise a new 3-year communication strategy, we conducted a survey of theperception of the Zala and Za brands and in collaboration with the Marketing and Salesdepartments we organised a number of workshops. Based on the results and incooperation with an external agency, we began to set up a new communication strategyof the Zala brand involving a story of the brand to run in 2016.

In the first half of the year the Zala brand sponsored several major projects; we linkedpromotional activities with points of sale and online; we sponsored Women's skijumping in Ljubno, "Pot ob žici" and the Three member team run in Ljubljana. As partof the sponsorship of the Tennis Association, we are organising the Zala Cup forchildren.

Oda

Oda spring water, which maintains the continuity of its very pure and clearcommunication tone, this year upgraded its communication focussing on healthylifestyles and exercise, advising consumers on how to avoid stress, tension or justmaintain good physical condition, which is the basis for quality of life. We havedesigned an ATL communication campaign with BTL support in the form of 10 videoexercises developed and demonstrated by a recognised fitness instructor and adapted sothat consumers can take these exercises outdoors, while walking, without the use offitness tools. At the same time we also ran a prize competition, which has just ended.In addition, we provided support to sales activities, including materials to support theprize competition at points of sale. The campaign ran on TV, OOH, print and theInternet, all of which was supported by communication on social networks.

We also developed contents of a socially responsible nature, interesting topics for thetarget group of children and their parents, raising awareness of environmental issuesand finding solutions for the important and urgent need for coexistence of man andnature, in line with our sustainability commitments. These have been and will in thefuture take the form of workshops and children's corners at events such as "Gremo vhribe" (Let's go to the mountains), and at other appropriate events.

Nula

At the beginning of the year we prepared a marketing campaign (TV, print, web, radio,event), to launch the NULA brand; we chose the month of January, which is not typicalfor the advertising of water as we want to emphasize that the Nula drink is not just asummer seasonal product. Visibility of the campaign was exceptionally good, becauseas the only drinks advertiser we received all the attention, encouraging consumers tomake a purchase. In the segment of flavoured waters with no added sugar or



sweeteners, in addition to the raspberry flavour, in April we launched the grapefruitflavour. The reactions from the market are good; both retail and the HORECA estimatethe grapefruit flavour to have a high potential. The latest retail market shares for Mayshow that the ZERO brand is the third best-selling flavoured water. From April onwards,the majority of communications for the NULA brand is run via the IG social network,which has in the past achieved good results and active followers. Promotional materialsare provided to points of sales and used to additionally mark the shelves, while for theNULA brand, new sales stands were introduced, which have brought good sale resultsat the points of sale. In June we experienced minor problems with placing the "Nulagrapefruit" 1.5 l on the shelves as recently retailers have made significant changes totheir plans in the water segment.

Za

The main communication channel for ZA beverages is digital media and thus we haveset up a new digital strategy for communication on all web channels. Our sponsorshipof the Sup Club Ljubljana enables us to offer free sup tuition to all fans of ZA brands inSlovenia during the months from May to October. By running the summer web storyfor ZA beverages - #ZAfriends, we have linked with young entrepreneurs who operateunder the name Brand of Friends, and so young people create products for the young,where the common thread of the summer is the value of friendship among youngpeople.

Web activities are supplemented by sales activities, we provide support materials forfurnishing sales outlets, and carried out a prize competition in the vending segment.Sales outlets actively promote all 4 main flavours of ZA brand beverages.

DEVELOPMENT

Pivovarna Laško

In the first half of 2015, we continued with the project of speciality beers under the nameLaško Special on the Slovenian market. The first three beers sold under the LaškoSpecial brand are Golding, Striptis and Citra01 Lager, which have now been joined bySourCherry02 and Buckwheat03. The sixth special bottled beer - Krpan - with an alcohollevel of 11.0 vol.% will be launched on the market in September. The first three flavourswill be tested also on the Italian market in the late summer.

In the segment of our own brand beers we launched the Laško Dark 5.9 vol. % beer ina 0.5 litre can and actively pursued activities related to the Retro image of the coreZlatorog brand. To mark the 190th anniversary, we launched a special promotionalpackaging of 6 cans in cardboard boxes with CDs enclosed (Šank Rock). Currently weare designing the Laško Zlatorog 0.5 l can for the Eurobasket championship in Croatia.

In the segment of Malt beverages we launched a new product on the market - LaškoMalt Pear Melissa, which is bottled in a non-returnable 0.33 litre bottle and 0.5 litre can(prize competition). This product will replace the Laško Malt apple flavour on theshelves.



We have also launched a special summer edition of the Oda water (0.5 and 1.5 litreplastic bottles with promotional packaging and prize competition). We held a series oflectures entitled Plastenkina zgodba (the Bottle's story).

We finally discontinued the Bandidos and Laško Radler brands.

With the aim of optimizing materials (price, cost or technology) we performed moretesting in the area of return labels (in conjunction with the investment in theST2 line)and the Special line (labels and adhesives testing). In addition, a number of small testswere also carried out.

In the first months of this year, we worked on the project of returnable glass bottles, aswell as specific bottling to mark the 190th anniversary, however both projects werediscontinued.

In this period, we continued with ISO 9001, ISO 14001 and HACCP related activities(updating SK and other documents, performing internal audits, risk analysis, etc.).Currently preparations are under way for the introduction of IFS.

As part of development we regularly coordinated declarations and provided andcollected data relating to the new Decree on the labelling of allergens.

In addition to developing our own brands, the development and coordination ofsupermarket brands for different supermarkets was carried out in parallel in bothbreweries.

Pivovarna Union

In the six months of 2015 we developed new flavours in the water, herbal tea, fruitdrinks, Malt drinks and drinks with added alcohol segments. We organiseddevelopment samplings, trial bottling and stability tests.

In the segment of waters without any added sugar or sweeteners, we began bottlingNula raspberry in 1.5 litre bottles. We have also launched the Nula grapefruit flavour in0.5 and 1.5 litre bottles.

We developed and, after industrial tests, launched a new flavour of Sola Hey fruit drinks(blueberry and grape) in 0.5 and 1.5 litre PET bottles. We began working on redesigninglabels and cans for the Sola peach and cranberry ice teas, to incorporate the image ofthe fruit.

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

We have developed two flavours of alcoholic beverages in a new segment - beverageswith added vodka. We have prepared all the data required for the extension of the exciselicense, adapted SAP processes and conducted tests of the production and filling lines.We also carried out stability tests.



We conducted several tests of materials relating to the new requirements of therenovated S4 bottling line: trials of labels, glues, and tests of crown tops, and drafted therelevant documentation.

We are also continuously testing various input materials due to the optimization ofproduction processes or suppliers. We coordinated and updated the quality standardsfor packaging materials and raw materials.

In connection with the new legislation on the provision of food information toconsumers, we, at the request of customers, filled their tables - data about products forboth supermarket brands as well as our own brands.

We also carried out a review of suppliers: Frutarom Etol, Bericap, Tplast, PapirnicaVevče, Ball Packaging Beograd and Galeb Metal Group, Šabac.

Sales of Laško Group products on the Slovenian market

Sales

In our sales and marketing activities we focus on products and promotions that to thegreatest possible degree satisfy the needs of an individual retailer's customer in eachindividual channel. Our sales and marketing activities are focused on retaining ourmarket shares in individual beverage categories on the domestic market, improving ourbrands' positions, communications and visibility at points of sale, and reaching the salesgoals and profitability of our brands. We cooperate with individual customers in themanagement of product groups and identifying opportunities for growth in eachindividual category.

We defined micro-locations at various frequented zones, thus influencing consumersto make impulse purchases as part of our regular monthly activities conducted withindividual retailers. We drafted standards of labelling products on both regular shelvesand secondary positions with the aim of improving customer perception of our brands.We upgraded our POS material communications; the clear message now allows us toenhance our customers' awareness of our brands and encourage them to purchase ourproducts. In our activities we focused on price promotions and added value for ourcustomers, as well as activities focused on certain occasions, such as picnics, hydration,light meals, socialising, etc.

In cooperation with the Nielsen marketing and research agency, we conducted ananalysis entitled Price and promotional activity management in the retail Beer category.The data obtained will allow us to even more optimally plan our sales and marketingactivities.

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



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

Retail market shares

According to the Nielsen market research agency (YTD May 2015) in the first fivemonths of the year the beverage market recorded a negative growth in individualcategories. The beer market fell by 0.4 percentage points, the market of carbonatedwater by 0.5 percentage points, the market of flavoured waters by 17.2 percentage points,the market of non-carbonated water by 2.4 percentage points, the market of iced teas by17.8 percentage points and the market of fruit drinks 2.6 percentage points.

The beer market structure is as follows: 92.0% alcoholic beer, 5.4% beer mixes and2.6% non-alcoholic beer (source: Nielsen, YTD May 2015). In terms of packaging, cansaccount or 80.8%, followed by bottles with 18.3% and bottles with 0.8%. According toNielsen data (retail sales, YTD 2015), the growth of supermarket brands of Mercator,Spar, Tuš, Hofer and imported brands, which are conducting intensive promotions atpoints of sales, continues this year.

The retail structure of water is as follows: carbonated waters 63.1%, non-carbonatedwaters 23.3%, and flavoured waters 13.6%.

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

In the group of iced teas, the Sola brand holds the leading position.

Quantitative sales of beveragesof the Laško Group in Slovenia

Pivovarna Laško

The sales of Pivovarna Laško on the domestic market are up 1.1% compared to the firstsix months of last year and up 6.9% on the plan. Beer is the most important segment,of which we sold 0.8% more than in the same period of 2014, which is 6.5% above theplan.

Pivovarna Union

The sales of Pivovarna Union on the domestic market are down 1.7% compared to thefirst six months of last year and up 3.7% on the plan. Beer sales were 2% below the same

Index Index Index(in hl) I.-VI./2015 2015/2014 2015/dyn. plan 2015/an. planBeer 628,586 99.3 103.2 50.2W ater 98,121 99.1 112.2 54.3Non-alcoholic beverages 114,782 97.1 100.5 52.4T O T A L 841,490 99.0 103.8 51.0



period of 2014, which is 0.4% above the plan. Soft drinks sales were 0.8% above thesame period of 2014, which is 13.5% above the plan.

Vital Mestinje

The sales of Vital on the domestic market are down 7% compared to the first six monthsof last year and down 11.4% on the plan.

Sales of Laško Group products on foreign markets

In the first six months of the year the sales of the Laško Group on foreign marketsamounted to 415,863 hectolitres, down 15.3% compared to the first six months of lastyear and 4.7% below the plan. The sales plan on foreign markets for the year 2015 isagain rather ambitious. The Group sold most beer on foreign markets, down 10.7%compared to the last year's sales and 5.6% below the plan. We sold 38.5% less waterthan last year and 49.3% less than planned. Due to the transfer of the production ofMulti Sola under licence that took place in February of 2014, sales of non-alcoholicbeverages in Kosovo recorded a drop of 42% compared to last year and are up 5% onthe plan.

Laško Group companies recorded the following structures of sales: 52.2% PivovarnaUnion (217,281 hectolitres), 47.2% Pivovarna Laško (196,291 hectolitres) and 0.6% Vital(2,291 hectolitres).

Quantitative sales of beveragesSales of the Laško Group on foreign markets

The Laško Group recorded the following structure of sales on foreign markets: Italy37.1%, Croatia 22.0%, Bosnia and Herzegovina 21.9%, Hungary 5.4%, Kosovo 2.8%,Austria 1.3%, Macedonia 1.1%, Montenegro 0.1% and 8.3% other markets, including theSerbian market.

Although no longer included in the Laško Group, Birra Peja continues to produce underlicense Zlatorog Laško beer for the markets of Kosovo, Macedonia and Montenegro (atotal 5,699 hectolitres in the first half of 2015, which is 45.3% less than in last year), aswell as Sola peach iced tea. Since February 2015 it also produces Multi Sola for themarkets of Kosovo and Macedonia (a total of 63,569 hectolitres in the first half of 2015,which is 165.8% more than last year). In the first six months of 2015, Birra Peja sold atotal 69,268 hectolitres of beverages produced under licence (up 101.7% compared tolast year).

Index Index Index(in hl) I.-VI./2015 2015/2014 2015/dyn. plan 2015/an. planBeer 373,389 89.3 94.4 46.2W ater 523 61.5 50.7 28.3Non-alcoholic beverages 41,951 58.0 105.0 51.1T O T A L 415,863 84.7 95.3 46.6



Pivovarna Laško

The sales of Pivovarna Laško on foreign markets fell by 14.6% compared to the first sixmonths of last year and were 14.6% below the plan. Beer is the most important salessegment, while malt drinks have a smaller share.

Laško Group recorded the following structure of sales on foreign markets: Croatia45.4%, Italy 18.9%, Bosnia and Herzegovina 18.1%, Kosovo 4.1%, Austria 2.2%, Hungary1.8%, Macedonia 1.4%, Montenegro 0.04% and 8.0% other markets combined.

Sales on the key markets of Kosovo and Macedonia grew compared to last year andexceeded the plan. On the key market of Austria and other markets combined, PivovarnaLaško exceeded last year's results, but has not yet achieved the plan. Sales in Hungaryfell compared to last year but exceeded the plan. However, on the key markets of Italy,Croatia, Bosnia and Herzegovina and Montenegro, sales have not achieved the lastyears' figures or the plan.

Pivovarna Union

The sales of Pivovarna Union on foreign markets fell by 16% compared to the first sixmonths of last year and were 3.6% above the plan. The sales of beer decreased by 5.7%compared to the same period in 2014 and is 3.8% above the plan. Due to the transfer ofthe production of Multi Sola under licence that took place in February of 2014, sales ofnon-alcoholic beverages in Kosovo recorded a drop of 43.4% compared to last year andare up 4.1% on the plan. Sales of waters decreased by 38.5% compared to the sameperiod in 2014 and are 49.3% below the plan.

The sales structure of Pivovarna Union by markets outside Slovenia is as follows: Italy53.2%, Bosnia and Herzegovina 17.0%, Croatia 9.9%, Hungary 8.7%, Kosovo 1.4%,Macedonia 0.6%, Austria 0.5%, Montenegro 0.1% and 8.6% in other markets.

Sales on the key market of Italy and other markets combined are up compared to lastyear and the plan, while although sales on the key market of Bosnia and Herzegovinaand the market of Austria are up compared to last year, we are still behind the plan.Sales on the key markets of Croatia and Kosovo are down on last year but up on theplan, while the sales on the Hungarian and Macedonian markets lag behind last year,as well as behind the plan.

Vital Mestinje

On foreign markets, Vital sells small amounts of syrups, which account for a 1.3%growth in sales compared to the same period last year and are 22.7% up on the plan.

Vital recorded the following structure of sales on foreign markets: Bosnia andHerzegovina 54.9%, Italy 33.3% and Croatia 11.8%.

Sales on the key markets of Bosnia and Herzegovina and Croatia are up compared tolast year, but we are still behind the plan. On the key market of Italy, sales are downcompared to last year, but up on the plan.



INVESTMENTS

Demand management is an important novelty introduced in the first half of the year forthe evaluation and implementation of investment projects.

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

support provided to project preparation, priority placing and management,

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

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

risk management,

monitoring the financial elements and benefits of projects,

change management,

communication and stakeholder management.

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

Investments in Pivovarna Laško

Between January and June 2015, Pivovarna Laško spent EUR 2.2 million on investmentsand purchases of property, plant and equipment.

In the first six months of 2015 we continued the strategic investment relating to thereplacement of the wet part of the ST2 bottling line. The project was completed by June2015 to the phase where the dry part of the line allows the complete supply of the marketwith our products with an output capacity of 60,000 bottles (0.5 litre and 0.33 litre).Optimization of the line and completion of the entire project is scheduled for the secondhalf of 2015.

At the same time, in addition to the ST2 project, we began preparatory works relatingto the investment in degassed water and softened degassed water, which is needed forthe new ST2 bottling line, pressure tanks and the cellar. The project was completed bythe end of June 2015.

In collaboration with Elektro Celje, a building permit for an overhead 2 x 20 kW powerline for the J-plateau bottling line was obtained in late May. This will allow the continuedconstruction of facilities in accordance with development needs at that location in thefuture.



In this period we acquired the technical and project documentation for projects relatingto the cooling of yeast, the NH3 compressor and the renovation of the vertical transporterin the filling area, which will be implemented in future.

In June the new Mycon compressor unit with a power of 1 MW was received and iscurrently being installed. It will start operating during high production season to ensurethe stability of supply of technological processes with cooling energy. At the same timethe new built-in unit will significantly reduce electricity consumption by the engineroom cooling system.

Investments in Pivovarna Union

Between January and June 2015, Pivovarna Union spent EUR 3.6 million oninvestments and purchases of property, plant and equipment.

Renovation of the wet part of the S4 bottling line was completed in mid-February 2015.We replaced the bottling and washing machine, as well as the labelling device. Inaddition to replacing the machines, we also replaced the ventilation system and replacedthe spent flooring. Noise protection will be installed this autumn. The S4 line hasbecome the most important filling line in Pivovarna Union as we use it to fill beer intoall kinds of returnable packaging (currently five different bottles and five differentcases).

We concluded the agreement for the replacement of two old steam boilers with two newhot water supply systems. This investment is important for the unhindered provisionof heat needed for the production and heating. The Company has acquired the relevantbuilding permit and has already begun preparatory construction and installation works.The time line of the project for replacing the boilers has been extended since we needto continuously ensure the supply of heat during the project. The first boiler will besupplied and installed in September, during which time one of the existing boilers willstill be online. The second boiler is expected to be supplied and installed in February2016, when the first boiler will also be operational.

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

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



EMPLOYEES

As at 30 June 2015, the Laško Group employed 1,228 employees, down 77 from the yearbefore. Of that, 782 employees are engaged in the core activity of producing beveragesin Slovenia.

Number of employees in the Laško Group companiesas at 30 June 2015

Note: as at 30 June 2014, the Birra Peja Group and Radenska were integral parts of the Laško Group.Since the former was sold in July 2014 and the latter in March 2015, for comparison purposes, the tableabove does not include the number of employees of the two companies as at 30 June 2014. As at 30 June2014, the Birra Peja Group had 208 employees and Radenska 205.

As at 30 June 2015, 29 top managers (14 from Pivovarna Laško and 15 from Pivovarna Union) areemployed part-time by both companies.

The sales contract for the sale of Delo was signed in early June 2015, however the sales process has notyet closed.

New employments also include employments for a definite period of time due to thehigh season. Employments were terminated on account of retirement and redundancieson account of operational optimization.

Due to the part-time employment of the Chairman and Members of the ManagementBoard of Pivovarna Laško and Pivovarna Union, who are all employed part-time in eachof the companies, as of 1 January 2014 the same system has been implemented formanagement employees with special powers and responsibilities working for PivovarnaLaško and Pivovarna Union, with the exception of technical directors that remain attheir primary locations.

(com pany) 30 June 2015 30 June 2014 DifferencePivovarna Laško 353 359 -6Pivovarna Union, d. d., Ljubljana 394 397 -3Vital M estinje, d. o. o. 35 35 -Jadranska pivovara - Split, d. d. 9 11 -2Laško Grupa, d. o. o., H rvaška 34 34 -Laško Grupa, d. o. o., Kosovo 5 - +5Laško Grupa, d. o. o., Sarajevo 14 14 -Delo Group 384 395 -11Total 1.228 1.245 -17



Educational structure of employees in the Laško Groupas at 30 June 2015

The largest share of employees in the Laško Group (29% of all employees) havecompleted secondary or technical high school education, followed by employees withsecondary vocational education, and then employees with completed university courses.

Employee satisfaction and human resources development

Employee satisfaction is an important factor to us. Thus we provide our employees withtargeted training and ensure their workplace safety and satisfaction.

In the first six months of 2015, we for the third consecutive year conducted an annualperformance review of all employees, in accordance with collective entrepreneurialagreement.

As part of the Beverage production competencies centre, established by PivovarnaLaško, Pivovarna Union, Radenska and Vital in 2012 together with some other partnersfrom the industry, the Laško Group has continued organising training of employees in

Pivovarna Pivovarna Vital Jadranska L.Grupa(level of education) Laško Union M estinje pivovara Croatia

II.prim ary school 62 50 10 1 -III.lower vocational school 7 5 - - -IV.m iddle vocational school 82 89 10 3 29V.gram m ar school, technical secondary,

general and other school75 139 9 - -

VI./1.college 42 36 2 - -VI./2.technical college 25 18 2 1 -VII.university graduate degree,

postcollege specialisation49 46 2 4 5

VIII./1.m aster of science, postgraduatespecialisation

10 10 - - -

VIII./2.Doctor of science 1 1 - - -Total 353 394 35 9 34

L.Grupa L.Grupa Delo Izberi(level of education) Kosovo Sarajevo Ljubljana Ljubljana Total

II.prim ary school - - 16 1 140III.lower vocational school - - 1 - 13IV.m iddle vocational school - - 31 2 246V.gram m ar school, technical secondary,

general and other school1 10 121 6 361

VI./1.college 1 - 24 2 107VI./2.technical college 2 - 60 - 108VII.university graduate degree,

postcollege specialisation1 4 100 1 212

VIII./1.m aster of science, postgraduatespecialisation

- - 12 1 33

VIII./2.Doctor of science - - 6 - 8Total 5 14 371 13 1,228



order to increase their competencies in various areas, increase the companies’competitiveness and to exchange the best practices within the Group.

Laško Group employees are also subject to additional benefits such as voluntary pensioninsurance payments and the ability to cheaply rent holiday chalets at the seaside, in themountains or at thermal spas,

Safety and health at work

All our employees are regularly made aware of the importance of safe and healthyworking conditions and are also provided such conditions. Before beginning theiremployment, all new employees are tested for their practical workplace health and safetyas well as fire safety skills. Employees are regularly provided the protective equipmentand devices defined in the relevant workplace risk assessment.

Regular inspections of work equipment, supervision over the use of work and protectiveclothing, and warning of workplace dangers all have an important role in limiting thenumber of work accidents. Employees regularly take medical check-ups. In eachdepartment, some employees have been trained in first aid.

Semi-annual report 2015 / Financial report – Laško Group


FINANCIAL REPORTSTATEMENT OF COMPLIANCE

The Management Board of Pivovarna Laško declares that the financial statements ofPivovarna Laško as well as the consolidated financial statements of the Laško Group forthe period ended 30 June 2015 give a fair presentation of the financial position and theresults of operations of Pivovarna Laško and the Laško Group. The same accountingpolicies were applied to the financial statements for the January - June 2015 period as indrafting the financial statements of Pivovarna Laško and the Laško Group for 2014.

The interim financial statements drafted for the six months ended 30 June 2015 havebeen drafted in accordance with IAS 34 - Interim Financial Reporting, and should beread in conjunction with the annual financial statements drafted for the financial yearended 31 December 2014.

The Management Board is responsible for the implementation of measures to ensurethe maintenance of the value of the assets of Pivovarna Laško and the Laško Group andfor the prevention and detection of fraud and other irregularities.

Laško, 30 July 2015

mag. Dušan ZorkoPresident of the Management Board

Marjeta ZevnikMember of the Management Board

Mirjam HočevarMember of the Management Board

Gorazd LukmanMember of the Management Board

Matej OsetMember of the Management Board



UNAUDITED CONSOLIDATEDFINANCIAL STATEMENTS OF THE LAŠKO GROUPfor the period ended 30 June 2015

Consolidated statement of financial position

STATEM ENT OF FINANCIAL POSITION (in EUR)as at 30 June 2015 Group Group

as at as at30 Jun 2015 31 Dec 2014

ASSETSNON-CURRENT ASSETS 219,900,468 238,353,317Intangible assets 63,055,659 64,896,312Property, plant and equipm ent 122,678,375 133,339,070Investm ent property 4,173,382 4,229,545Long-term investm ents in the subsidiaries 240,667 204,792Financial assets available for sale 460,298 982,066Long-term financial lease receivables 491,252 518,013Long-term loans 293,131 2,324,548Long-term operating receivables 3,027,757 2,090,927Long-term deferred tax assets 25,479,947 29,768,044SH ORT-TERM ASSETS LESS SH ORT-TERMDEFERRED AND ACCRUED ITEM S 109,545,245 112,832,944Non-current assets held for sale 27,285,750 42,427,045Inventories 19,865,278 17,224,526Short-term operating receivables 55,708,808 42,607,067Short-term receivables for excess corporate tax paym ent - 1,465,456Financial assets available for sale 2,674,394 2,673,549Short-term loans 1,381,578 1,245,512Cash and cash equivalents 2,629,437 5,189,789SH ORT-TERM DEFERRED AND ACCRUED ITEM S 500,792 987,085TOTAL SH ORT-TERM ASSETS 110,046,037 113,820,029TOTAL ASSETS 329,946,505 352,173,346EQUITYEQUITY OF TH E OW NERS OF TH E CONTROLLING STAKE 56,876,666 51,627,594Share capital 36,503,305 36,503,305Share prem ium 2,566,995 2,566,995Profit reserves 3,650,331 3,650,331Revaluation reserve 2,589,255 5,124,893Retained earnings 6,297,568 384,294Net profit or loss 5,243,690 3,377,636Translation reserve 25,522 20,140EQUITY OF TH E OW NERS OF NON-CONTROLLING STAKE 2,287,830 10,661,619TOTAL CAPITAL 59,164,496 62,289,213LIABILITIESPROVISIONS AND LONG-TERM ACCRUED COSTSAND DEFERRED INCOM E 7,909,089 10,152,264Provisions for retirem ent grants and jubilee awards 3,531,787 5,746,253Other provisions 4,354,974 4,209,804Long-term accrued costs and deferred revenue 22,328 196,207LONG-TERM LIABILITIES 98,598,299 105,734,931Long-term financial liabilities 98,598,299 105,734,931



Consolidated statement of financial position

( c o n t i n u a t i o n )

STATEM ENT OF FINANCIAL POSITION (in EUR)as at 30 June 2015 Group Group

as at as at30 Jun 2015 31 Dec 2014

SH ORT-TERM LIABILITIES 159,063,951 167,827,303Liabilities for non-current assets held for sale 15,294,380 9,709,058Short-term operating liabilities 41,368,498 35,463,263Short-term incom e tax payable 263,178 -Short-term financial liabilities 102,137,895 122,654,982SH ORT-TERM ACCRUED COSTS AND DEFERRED INCOM E 5,210,670 6,169,635TOTAL SH ORT-TERM LIABILITIES 164,274,621 173,996,938

TOTAL EQUITY AND LIABILITIES 329,946,505 352,173,346



Consolidated income statement

INCOM E STATEM ENT (in EUR)for the period from 1 January to 30 June 2015 Group Group

1 Jan - 30 Jun 1 Jan - 30 Jun2015 2014

Continued operationsNet sales revenues 84,339,981 85,899,777Change in inventories of products and work in progress 1,690,232 1,637,262Other operating revenue 1,634,132 811,658Costs of goods, m aterials and services (56,179,822) (55,359,170)Em ployee benefits (12,303,355) (11,962,194)Am ortisation of intangible assets and depreciation ofproperty, plant and equipm ent (4,878,675) (4,799,259)Revaluation operating expense (191,148) (21,306)Other operating expenses (2,015,416) (2,422,638)OPERATING PROFIT OR LOSS 12,095,929 13,784,130Financial incom e 525,409 2,717,081Financial expenses (5,658,696) (9,346,362)NET FINANCIAL EXPENSES (5,133,287) (6,629,281)PROFIT OR LOSS BEFORE TAX 6,962,642 7,154,849Tax (2,592,019) 267,706NET PROFIT OR LOSS OF TH E PERIOD FROMCONTINUED OPERATIONS 4,370,623 7,422,555Discontinued operations - Jadranska pivovarna Split, BPKosovo, Radenska and Delo 1,111,963 (83,531)NET PROFIT OR LOSS OF TH E PERIOD FROMDISCONTINUED OPERATIONS 1,111,963 (83,531)

NET PROFIT OR LOSS FOR TH E PERIOD 5,482,586 7,339,024

Share of non-controlling interests in net profit / loss 238,896 55,503Share of the controlling interests in net profit /loss 5,243,690 7,283,521Total net profit / loss per share of the controllinginterestNet profit / loss per share 0.60 0.83Diluted net profit / loss per share 0.60 0.83Total net profit / loss per share of the non-controllinginterestNet profit / loss per share 0.03 0.01Diluted net profit / loss per share 0.03 0.01Net profit / loss per share from discontinued operationsNet profit / loss per share 0.13 (0.01)Diluted net profit / loss per share 0.13 (0.01)Net profit / loss per share from continued operationsNet profit/loss per share 0.50 0.85Diluted net profit / loss per share 0.50 0.85



Consolidated statement of other comprehensive income

STATEM ENT OF OTH ER COM PREH ENSIVE INCOM E (in EUR)for the period from 1 January to 30 June 2015 Group Group

1 Jan - 30 Jun 1 Jan - 30 Jun2015 2014

Net profit or loss for the accounting period 5,482,586 7,339,024Other com prehensive incom eFinal consolidation of Radenska (8,389,241) -

TOTAL OTH ER COM PREH ENSIVE INCOM E TH ATW ILL BE RECLASSIFIED TO PROFIT AND LOSS AT AFUTURE DATE (8,389,241) -

TOTAL OTH ER COM PREH ENSIVE INCOM E TH ATW ILL NEVER BE RECLASSIFIED TO PROFIT ORLOSS - -

OTH ER COM PREH ENSIVE INCOM E (8,389,241) -

TOTAL COM PREH ENSIVE INCOM E FOR TH EPERIOD (2,906,655) 7,339,024



Consolidated statement of changes in equity

STATEM ENT OF CH ANGES IN EQU ITY-Group of related com panies (in EUR)for the period from 1 January to 30 June 2015

Total capital CapitalTreasury Total Net attrib. to attrib. to

Share Share Legal share Treasury profit Retained profit Reval. Trhanslat. controlling non-controlling TOTALcapital prem ium reserves reserves shares reserves earnings or loss reserve reserve interest interest EQUITY

OPENING BALANCEat 1 January 2015 according to theIFRS 36,503,305 2,566,995 3,650,331 669,571 (669,571) 3,650,331 384,294 3,377,636 5,124,893 20,140 51,627,594 10,661,619 62,289,213Transactions with owners:Paym ent of dividends - - - - - - - - - - - (223,444) (223,444)Total transactions with owners - - - - - - - - - - - (223,444) (223,444)Changes in com prehensive incom eNet profit or loss for the year - - - - - - - 5,243,690 - - 5,243,690 238,896 5,482,586Final consolidation of Radenska - - - (604,412) 604,412 - 2,536,152 - (2,536,152) - - (8,389,241) (8,389,241)Total changes in com prehensiveincom e between 1 January and 30June 2015

- - - (604,412) 604,412 - 2,536,152 5,243,690 (2,536,152) - 5,243,690 (8,150,345) (2,906,655)

Changes in equityLoss settlem ent - - - - - - 3,377,636 (3,377,636) - - - - -Other - - - - - - (514) - 514 5,382 5,382 - 5,382Total m ovem ents in equity - - - - - - 3,377,122 (3,377,636) 514 5,382 5,382 - 5,382CLOSING BALANCEas at 30 June 2015 36,503,305 2,566,995 3,650,331 65,159 (65,159) 3,650,331 6,297,568 5,243,690 2,589,255 25,522 56,876,666 2,287,830 59,164,496



Consolidated statement of changes in equity

STATEM ENT OF CH ANGES IN EQU ITY-Group of related com panies (in EUR)for the period from 1 January to 30 June 2014

Total capital CapitalTreasury Total Net attrib. to attrib. to

Share Share Legal share Treasury profit Retained profit Reval. Trhanslat. controlling non-controlling TOTALcapital prem ium reserves reserves shares reserves earnings or loss reserve reserve interest interest EQUITY

OPENING BALANCEat 1 January 2014 according to theIFRS 36,503,305 30,993,977 3,650,331 281,895 (281,895) 3,650,331 (72,940)(28,354,042) 5,701,570 (12,599) 48,409,602 9,804,281 58,213,883Transactions with owners:Capital increase / reduction - - - - - - (166,689) - - - (166,689) (158,956) (325,645)Other changes - - - - (154,553) (154,553) - - - - (154,553) - (154,553)Total transactions with owners - - - - (154,553) (154,553) (166,689) - - - (321,242) (158,956) (480,198)Changes in com prehensive incom eNet profit or loss for the year - - - - - - - 7,283,522 - - 7,283,522 55,503 7,339,025Fixed assets revaluation reserve - - - - - - 215,040 - (215,040) - - - -Total changes in com prehensiveincom e between 1 January and 30June 2014

- - - - - - 215,040 7,283,522 (215,040) - 7,283,522 55,503 7,339,025

Changes in equityLoss settlem ent - (28,426,982) - - - - 72,940 28,354,042 - - - - -Form ation of reserves for treasuryshares and interests - - - 154,553 - 154,553 - - - - 154,553 - 154,553Other - - - - - - (69,353) - - 32,739 (36,614) 889,491 852,877Total m ovem ents in equity - (28,426,982) - 154,553 - 154,553 3,587 28,354,042 - 32,739 117,939 889,491 1,007,430CLOSING BALANCEas at 30 June 2014 36,503,305 2,566,995 3,650,331 436,448 (436,448) 3,650,331 (21,002) 7,283,522 5,486,530 20,140 55,489,820 10,590,320 66,080,140



Consolidated statement of cash flows

CASH FLOW STATEM ENT (in EUR)for the period from 1 January to 30 June 2015 Group Group

1 Jan - 30 Jun 1 Jan - 30 Jun2015 2014

NET PROFIT / LOSS FOR TH E PERIOD 5,482,586 7,339,024Adjustm ents for:Depreciation of PPE and investm ent property 4,763,201 7,530,278Am ortisation of intangible assets 115,474 497,338Revaluation operating expense from non-current assets 9,150 480,664Revaluation operating expense from current assets 164,058 258,872Revaluation of non-current assets held for sale 3,836,727 -Net m ovem ents in provisions 62,283 (219,288)Financial incom e (620,973) (3,078,963)Financial expenses 5,981,832 10,201,002Incom e tax 263,178 -Deferred tax 2,410,292 1,596,881Total adjustm ents 16,985,222 17,266,784M OVEM ENTS IN W ORKING CAPITALInventories and non-current assets held for sale (3,820,563) (2,092,625)Operating and other receivables (16,930,088) (21,063,969)Operating and other liabilities 14,649,485 19,764,185Total m ovem ents in working capital (6,101,166) (3,392,409)NET CASH FLOW S FROM OPERATING ACTIVITIES 16,366,642 21,213,399

CASH FLOW S FROM INVESTING ACTIVITIESAcquisition /disposal of property, plant and equipm ent (5,953,635) 6,961,201Acquisition / disposal of intangible assets 22,453 431,080Acquisition / disposal of financial assets 1,959,058 54,884,535- of that, net cash flows from the disposal of Birra Peja - 2,033,431Acquisition / disposal of available-for-sale assets 26,356,125 -Interest incom e 201,171 129,917Dividends received and capital gains 132,802 -NET CASH FLOW S FROM INVESTING 22,717,974 62,406,733

CASH FLOW S FROM FINANCING ACTIVITYInterest paid (5,694,832) (10,201,002)Capital increase / reduction (8,389,241) (158,956)Increase / decrease in financial debt (25,870,278) (68,100,459)Dividends paid to the owners (223,444) -NET CASH FLOW S FROM FINANCING (40,177,795) (78,460,417)

NET INCREASE / DECREASE IN CASH AND CASHEQUIVALENTS (1,093,179) 5,159,715Cash and cash equivalents at the beginning of year 3,722,616 3,004,724Cash and cash equivalents at the end of year 2,629,437 8,164,439



Consolidated segment reporting

SEGM ENT REPORTING - Group of related com panies (in EUR)for the period from 1 January to 30 June 2015

NewspaperOther Publishing

Beer beverages Activity Other TotalNet sales by segm ents 60,435,893 10,858,402 - 13,045,686 84,339,981NET SALES REVENUES 60,435,893 10,858,402 - 13,045,686 84,339,981Profit or loss from operations 12,095,929Assets by segm ent 171,394,402 31,567,828 22,166,881 42,553,339 267,682,450Brands 46,460,507 - - - 46,460,507Goodwill 15,803,548 - - - 15,803,548Liabilities by segm ent 142,561,539 21,653,454 73,233,974 30,333,042 267,782,009Am ortisation and depreciation expense 4,163,416 562,035 - 153,224 4,878,675

SEGM ENT REPORTING - Group of related com panies (in EUR)for the period from 1 January to 30 June 2014

NewspaperOther Publishing

Beer beverages Activity Other TotalNet sales by segm ents 79,401,127 27,750,216 22,347,718 1,016,214 130,515,275NET SALES REVENUES 79,401,127 27,750,216 22,347,718 1,016,214 130,515,275Profit or loss from operations 16,057,945Assets by segm ent 173,240,640 80,919,001 16,785,307 74,181,583 345,126,531Brands 46,461,058 - 4,330,832 - 50,791,890Goodwill 17,197,380 - - - 17,197,380Liabilities by segm ent 191,653,971 42,317,593 47,692,672 65,371,425 347,035,661Am ortisation and depreciation expense 4,901,502 2,046,250 935,874 143,990 8,027,616



Notes to the unaudited consolidated semi-annualfinancial statements

1. Accounting policies

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

The consolidated financial statements drafted for the six months ended 30 June 2015have not been audited and have been drafted in accordance with IAS 34 - InterimFinancial Reporting, and should be read in conjunction with the annual financialstatements drafted for the financial year ended 31 December 2014.

The Laško Group, namely the controlling entity Pivovarna Laško, disposed of thesubsidiary Radenska in March 2015. In accordance with IAS 27 the final consolidationwas made as at 31 March 2015. The profit or loss of Radenska was included in theconsolidated income statement and consolidated statement of comprehensive incomeonly for the first three months of 2015. The consolidated statement of financial positionof the Laško Group at 30 June 2015 does not include Radenska.

In June 2014, the Laško Group, namely Pivovarna Union, disposed of the Birra PejaGroup and therefore in the comparable period of the previous year, the incomestatement of the Birra Peja Group was included in the consolidated income statementof the Laško Group. The consolidated statement of financial position of the Laško Groupat 30 June 2015 does not include the Birra Peja Group.

2. Disclosures to individual items of the consolidated income statement ofthe Laško Group for the period 1 January to 30 June 2015

To ensure comparability and due to the facts explained in the "Accounting policies"section, certain items in the consolidated income statement for the first six months of2015 may differ from those published in last year's semi-annual report. Consolidatedincome statement for the period January to June 2014 included income statements ofall companies included in the consolidation (total operations). Due to the sale of BirraPeja, Sh. a., Peć in the first half of 2014, the sale of Radenska, d.d., Radenci in March2015 and signed contract for the sake of Delo, d.d. in June 2015, the income statementfor the period January-June 2015 prepared in accordance with IFRS 5 is divided intodiscontinued and continued operations. The income statements of these companies arenot included in the consolidated income statement of continued operations for the firsthalf of 2015; in addition, to ensure comparability, data for the first six months of 2014has been adjusted accordingly. The individual items of the consolidated incomestatement from continuing operations, which include Pivovarna Laško, PivovarnaUnion, Vital Mestinje and Laško Grupa Zagreb, are explained below.



a) Operating profit or loss

In the first six months of 2015, net sales revenues from continued operationsamounted to EUR 84.3 million, which is EUR 1.6 million or 1.8% less than in the sameperiod of the previous year. On the domestic market, the Group generated EUR 65.6million of net sales revenues, which is EUR 2 million or 3% less than in the same periodof the previous year. Net sales revenues on foreign markets amounted to EUR 18.8million, which is EUR 0.4 million or 2.5% more than in the same period of the previousyear. Revenues on foreign markets account for 22.3% of revenues, while the share inthe same period of the previous year was 21.3%. In the period, the Laško Group realised48.3% of the planned annual net sales revenues.

Compared to the previous year, other operating revenues of the continued operationsin the period January to June 2015 amount to EUR 1.6 million and are up EUR 0.8million on the previous period. This includes revenues from default interest charged tocustomers, revenue from disposal of fixed assets and investment property, recovery ofreceivables for which allowances were made in previous years, and revenues fromexcess payment of water concession fees.

In the six months of 2015, total operating revenues amount to EUR 87.7 million, downEUR 0.7 million on the same period of last year.

In the first half of 2015, operating expenses from continued operations amount toEUR 75.6 million, up EUR 1 million or 1.3% on the first six months of 2014.

The largest share of operating expenses in the amount of EUR 31.6 million representscost of materials and energy as they account for 41.9% of total expenses, down 6% onthe same period of the previous year. The decrease in costs of materials was the resultof lower purchase prices of some of the most important basic raw materials,intermediate goods and energy products.

Costs of services amounting to EUR 21.9 million account for 29% of total operatingexpenses. Compared to the same period of 2014, they are up 4.1% or EUR 4.1 million.Marketing costs account for the greatest share of the cost of services (nearly 50%), up17% compared to the same period of the previous year.

Employee benefit costs account for 16.3% of total operating expenses and amounted toEUR 12.3 million, up EUR 0.3 million on the first six months of 2014.

The amortisation and depreciation costs amounting to EUR 4.9 million areapproximately at the level of the comparable period of the previous year. Amortisationand depreciation costs account for 6.5% of total operating expenses.

In the first half of 2015, other operating expenses amounting to EUR 2 million aredown EUR 0.4 million compared to the first six months of 2014. Environmental costs,such as water concession fees, land taxes, packaging fees, water rates, environmentaltaxes for waste packaging and electronic equipment, account for the greatest share ofother operating expenses.



Costs of materials including costs of goods sold reached EUR 2.6 million, accountingfor 3.4% of total operating expenses.

In the first half of 2015 the Laško Group generated an EBIT of EUR 12.1 million oncontinued operations, which is EUR 1.7 million down on the first half of 2014.Normalised EBIT, calculated from operating profit increased or decreased by theimpact of one-off business events, amounts to EUR 11.58 million and is down EUR 2.9million on the normalised EBIT recorded in the first half of 2014.

In the first six months of 2015, the Laško Group generated EUR 17 million of EBITDAfrom continued operations, down EUR 1.6 million on the same period of last year. TheGroup generated a normalised EBITDA of EUR 16.4 million, which is down EUR 2.9million on the same period last year.

b) Financing profit or loss

In the first six months of 2015, the Group generated a net financing loss fromcontinued operations of EUR 5.1 million, mainly on account of financial expenses forinterest on bank loans. In the period under review, net financial expenses for interestamounted to EUR 5.3 million, which is EUR 5.2 million less than in the first six monthsof 2014. Financial expenses of the first six months of 2015 include the costs of legal andfinancial advisers relating to the sale of financial investments and debt restructuring ofEUR 0.5 million. In the first half of 2014, these costs amounted to EUR 1.8 million.

c) Net profit or loss

In the first six months of 2015, the Laško Group recorded a net profit of EUR 4.4 millionfrom continued operations. In the comparable period of the previous year, the net profitfrom continued operations reached EUR 7.4 million.

d) Net profit or loss from discontinued operations

The profit or loss from discontinued operations includes profit or loss of companies nolonger in the Laško Group or companies which are no longer accounted for as part ofcontinued operations in accordance with IFRS 5. In both comparative periods,discontinued operations include the profit or loss of Radenska (for the first six monthsof 2014 and the first three months of 2015), Jadranska pivovara and the Birra Peja Group(for the first six months of 2014) and the profit or loss of Delo. In the first six monthsof 2015, the Laško Group generated EUR 1.1 million of net profit on discontinuedoperations, compared to a loss of EUR 84 thousand incurred in the comparable periodof 2014. The effect of the final consolidation of Radenska, calculated as the differencebetween the consideration received and net assets, is EUR 2.7 million and is reportedas an item of other operating revenues and thus increases the net profit.



3. Disclosures to the consolidated statement of financial position of theLaško Group at 30 June 2015

The consolidated statement of financial position as at 30 June 2015 does not contain thenet assets of Radenska due to the latter's sale. At the same time due to the planned saleof Delo in accordance with the sale contract signed in June 2015, in accordance withIFRS 5, all assets of that company were transferred to non-current assets held for sale,and its liabilities to the liabilities included in the disposals group. Accordingly, the itemsof the statement of financial position at 30 June 2015 are not comparable with thebalance as at 2014 year-end.

a) Intangible assets

Intangible assets as at 30 June 2015 amount to EUR 63 million and include the value ofPivovarna Union brands (EUR 46.5 million), and the value of goodwill relating to theinvestment in Pivovarna Union (EUR 15.8 million). The remaining EUR 0.7 millionrepresent material rights, computer software, licences, etc. In the first six months of theyear, the value of intangible assets fell on account of amortisation of EUR 0.4 millionand transfer of all intangible assets of the Delo Group to non-current assets held for saleamounting to EUR 1.4 million. The value of the brands and goodwill relating to theinvestment in Pivovarna Union were not appraised as at 30 June 2015 as no signs ofimpairment exist.

b) Property, plant and equipment

The balance of property, plant and equipment of EUR 122.7 million as at 30 June 2015was down by EUR 10.7 million, mainly on account of the transfer of the property, plantand equipment of the Delo Group amounting to EUR 12.4 million to non-current assetsheld for sale. In the first six months of the year, the value of property, plant andequipment fell on account of depreciation by EUR 5.3 million and grew on account ofnew acquisitions by EUR 10.4 million. New acquisitions mainly refer to purchases ofproduction equipment, packaging and marketing equipment.

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

The value of long-term available-for-sale financial assets, which stood at EUR 0.5 millionas at 30 June 2015, are down by EUR 0.5 million compared to as at 31 December 2014,mainly on account of the transfer of the long-tern financial assets of the Delo Group tonon-current assets held for sale and the sale of the investment in Skupna Pokojninskadružba.

d) Long-term investments in the subsidiaries

The long-term financial investments in subsidiaries include investments inunconsolidated subsidiaries. The value of these investments compared to the last day of2014 increased by EUR 36 thousand due to the purchase of shares in the subsidiaryLaško Grupa, Sarajevo from Radenska.



e) Long-term investments in associated companies

Long-term investments in the Group's associates include a holding in Thermana, Laško,which was impaired to the full amount in the past. This investment was not appraisedas at 30 June 2015.

As at 2014 year-end, the long-term investments in the Group's associates include also aholding in Slopak, Ljubljana. Due to the sale of Radenska, which owns a 9.74% stake inthis company, the share of Laško Group in this company was reduced to 19.48%.

f) Long-term loans issued

As at 30 June 2015, long-term loans amounted to EUR 0.3 million, a decrease of EUR 2million on the last day of 2014, on account of a decrease in deposits in banks.

g) Long-term deferred tax assets

As at 30 June 2015, long-term deferred tax assets amounting to EUR 25.2 million relatemainly to the impairment of financial assets and the tax loss, and in a smaller part alsoto the write-down of receivables, provisions and liabilities due to employees. Long-termdeferred tax liabilities refer to the revaluation of property and brands. Net long-termdeferred tax assets are down by EUR 4.3 million in the first six months of 2015. Thedecrease in net deferred tax assets partly relates to the transfer of deferred tax assets ofthe Delo Group to non-current assets held for sale, while the remaining decrease relatesmainly to covering the tax loss of the current period.

h) Non-current assets held for sale

Non-current assets held for sale include the value of the assets of the Delo Groupamounting to EUR 2.22 million and assets of Jadranska pivovara Split of EUR 5.1million. Based on the contract concluded on 3 June 2015 between Pivovarna Laško andFMR, financiranje in upravljanje naložb, d.d., for a 100% stake in the company Delo inthe amount of EUR 7.3 million, in the consolidated financial statements of the LaškoGroup, the net assets of the Delo Group have been restated to the contractually agreedvalue and reported under the non-current assets held for sale and liabilities included inthe disposals group.

i) Inventories

As at 30 June 2015, inventories amount to EUR 19.9 million. Compared to the last dayof 2014, their value is up EUR 2.6 million, in spite of the transfer of EUR 1.4 million ofinventories of the Delo Group to non-current assets held for sale. The increase of EUR4 million is mainly the result of seasonality.

Inventories of raw material and materials are up EUR 2 million, inventories of work inprogress are up EUR 0.4 million, and inventories of products by EUR 1.2 million, whilethe inventories of merchandise are at the same approximate level as at the end of lastyear.



j) Short-term operating receivables

As at 30 June 2015, short-term operating receivables amount to EUR 55.7 million, up 13million on 31 December 2014. This increase is mainly the result of seasonality, and partlyalso the result of payment delays.

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

At 30 June 2015, the value of long-term available-for-sale financial assets amounts toEUR 2.7 million. There was no change to the value of these investments compared to2014 year-end.

l) Short-term loans issued

As at 30 June 2015, short-term granted loans including deposits granted amount to EUR1.03 million. In the first half of 2015, short-term loans granted grew by EUR 0.1 million.The increase relates to bank deposits.

m) Equity of the owners of the controlling interest

As at 30 June 2015, the equity of the owners of the controlling interest amounts to EUR56.9 million. Equity of the owners of the controlling interest represents 17.2% of thetotal equity and liabilities. Compared to 2014 year-end, the equity has increased by thevalue of the net profit of the year of EUR 5.2 million.

n) Equity of the owners of non-controlling interests

As at 30 June 2015, the equity of the non-controlling interests amounts to EUR 2.3million, representing 3.9% of total equity. Compared to 31 December 2014, it is downEUR 8.4 million. This decrease is mainly the result of the final consolidation upon thesale of Radenska.

o) Liabilities

As at 30 June 2015, the total liabilities of the Group amount to EUR 270.8 million,representing 82.1% of the total equity and liabilities. Financial liabilities of EUR 200.7million represent 60.8% of the total equity and liabilities. Compared to the last day of2014, the balance of financial liabilities decreased by EUR 27.7 million, while thebalance of all liabilities decreased by EUR 19.1 million.

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

As at 30 June 2015, provisions amount to EUR 7.9 million. Compared to 2014 year-endthey are down EUR 2.2 million, mainly on account of the transfer of the provisions ofthe Delo Group to liabilities included in the disposals group. Provisions for terminationbenefits and jubilee awards amount to EUR 3.5 million; other provisions relating to theunderpayment of water rates and contractual legal actions amount to EUR 4.4 million,while long-term accrued costs and deferred income amount to EUR 22 thousand.



r) Long-term financial liabilities

Long-term financial liabilities amount to EUR 98.6 million as at 30 June 2015, mostlyrelating to bank borrowings. Compared to the last day of 2014 they are down EUR 7.1million, mainly due to the transfer of current amounts of long-term borrowings to short-term borrowings due to the maturity of individual tranches within a period of one year.Long-term borrowings from banks are fully collateralised with shares, real estate,movable property, receivables pledged and guarantees.

s) Short-term operating liabilities

As at 30 June 2015, short-term operating liabilities amount to EUR 41.5 million.Compared to the last day of the previous year, they are up EUR 6.1 million, mainly as aresult of seasonality, and in part also on account of prolonged payment terms andpayment delays.

t) Short-term financial liabilities

In the first six months of 2015, short-term financial liabilities fell by EUR 20.5 million,partly as a result of deleveraging from the proceeds from the sale of the share inRadenska. On the other hand, short-term financial liabilities are up on account ofcurrent amounts of long-term borrowings. As at 30 June 2015, short-term financialliabilities of the Group amount to EUR 102.1 million.

Debt to banks is down by EUR 26.1 million in the first six months of 2015.

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

u) Short-term accruals and deferred income

As at 30 June 2015, short-term accrued costs and deferred income amounted to EUR 5.2million, reflecting a decrease of EUR 1 million compared to the last day of 2014.

v) Collateralisation of financial liabilities

The loans raised with banks are fully collateralised with liens on securities, mortgages,the pledge of movable property and receivables.

The Group has collateralised its long-term and short-term financial liabilities with440,295 PULG (Pivovarna Union) shares, 667,444 DELR (Delo) shares, 270,648EGKG (Elektro Gorenjska) shares, 1,922,321 EMAG (Elektro Maribor) shares and645,003 ZDRL (Thermana) shares, the value of which amounted to EUR 168.8 millionat 30 June 2015. The value of real estate and equipment pledged amounts to EUR 42.2million, the value of pledged receivables EUR 20.6 million, the value of pledgedinventories EUR 2.5 million and the value of Pivovarna Laško brands pledged EUR 50million.

z) Excess short-term liabilities

As at 30 June 2015, the Group's total short-term liabilities amounted to EUR 164.3million, while its short-term assets amounted to EUR 110 million. Thus the excess of



short-term liabilities of EUR 54.3 million is down EUR 5.9 million compared to the lastday of 2014. In the future, after entry of the strategic owner, the negative surplus ofcurrent liabilities will be settled or resolved with the adequate refinancing of the existingdebt (long-term rescheduling or increase of equity) and from the sale of surplusproperty.

In April, the sales consortium of owners of Pivovarna Laško concluded with HeinekenInternational B.V. a Share purchase agreement (SPA), pursuant to which the companyHeineken acquired 4,471,054 shares or a 51.11% stake in Pivovarna Laško. The signingof the contract represents the continuation of the fulfilment of the Restructuring andStandstill Agreement. The proceeds will be paid and the shares transferred upon thefulfilment of the suspensive conditions defined in the Share Purchase Agreement.Upon signing the Share Purchase Agreement on 13 April 2015, the buyer also concludeda Cooperation agreement with Pivovarna Laško, with which the buyer undertakes toensure the continued financial stability of Pivovarna Laško after the transaction closes.

Semi-annual report 2015 / Financial report – Pivovarna Laško


UNAUDITED UNCONSOLIDATEDFINANCIAL STATEMENTS OF PIVOVARNA LAŠKOfor the period ended 30 June 2015

Unconsolidated statement of financial position

STATEM ENT OF FINANCIAL POSITION (in EUR)as at 30 June 2015 Controlling Controlling

com pany com pany30 Jun 2015 31 Dec 2014

ASSETSNON-CURRENT ASSETS 243,530,996 246,873,598Intangible assets 603,692 701,953Property, plant and equipm ent 46,455,466 43,868,755Investm ent property 3,739,693 3,739,693Long-term investm ents in the subsidiaries 164,071,816 168,601,241Financial assets available for sale 208,726 241,655Long-term loans - 376Long-term financial lease receivables 491,252 518,013Long-term deferred tax assets 27,960,351 29,201,912SH ORT-TERM ASSETS LESS SH ORT-TERMDEFERRED AND ACCRUED ITEM S 45,020,520 72,870,185Non-current assets held for sale 7,300,000 46,535,646Inventories 8,479,983 6,711,132Short-term operating receivables 27,635,129 18,829,865Financial assets available for sale 270,648 270,648Short-term loans 312,458 292,308Cash and cash equivalents 1,022,302 230,586SH ORT-TERM DEFERRED AND ACCRUED ITEM S 66,887 113,842TOTAL SH ORT-TERM ASSETS 45,087,407 72,984,027TOTAL ASSETS 288,618,403 319,857,625EQUITYM AJORITY CAPITAL 82,531,846 58,071,010Share capital 36,503,305 36,503,305Capital surplus 15,128,046 15,128,046Profit reserves 3,730,094 3,730,094Revaluation surplus 2,602,165 2,709,565Retained earnings 107,400 -Net profit or loss for the period 24,460,836 -TOTAL CAPITAL 82,531,846 58,071,010LIABILITIESPROVISIONS AND LONG-TERM ACCRUED COSTSAND DEFERRED INCOM E 5,919,551 5,829,031Provisions for retirem ent grants and jubilee awards 1,690,282 1,599,762Other provisions 4,209,804 4,209,804Long-term accrued costs and deferred revenue 19,465 19,465LONG-TERM LIABILITIES 63,017,970 72,918,398Long-term financial liabilities 63,017,970 72,918,398SH ORT-TERM LIABILITIES LESS SH ORT-TERMACCRUED AND DEFERRED ITEM S 134,522,718 181,763,264Short-term operating liabilities 33,623,833 27,861,203



Unconsolidated statement of financial position

( c o n t i n u a t i o n )

STATEM ENT OF FINANCIAL POSITION (in EUR)as at 30 June 2015 Controlling Controlling

com pany com pany30 Jun 2015 31 Dec 2014

Short-term financial liabilities 100,898,885 153,902,061SH ORT-TERM ACCRUED COSTS AND DEFERRED INCOM E 2,626,318 1,275,922TOTAL SH ORT-TERM LIABILITIES 137,149,036 183,039,186TOTAL EQUITY AND LIABILITIES 288,618,403 319,857,625



Unconsolidated income statement

Unconsolidated statement of other comprehensive income

INCOM E STATEM ENT (in EUR)for the period from 1 January to 30 June 2015 Controlling Controlling

com pany com pany1 Jan - 30 Jun 1 Jan - 30 Jun

2015 2014

Net sales revenues 44,684,874 45,821,150

Change in inventories of products and work in progress 338,556 18,877Other operating revenue 516,008 309,973Costs of goods, m aterials and services (32,691,998) (31,920,902)Em ployee benefits (5,384,894) (5,312,079)Am ortisation of intangible assets and depreciation ofproperty, plant and equipm ent (2,155,388) (2,220,450)W rite-downs (185,815) (12,841)Other operating expenses (955,958) (1,168,400)OPERATING PROFIT OR LOSS 4,165,385 5,515,328

Financial incom e 26,431,771 1,155,386Financial expenses (4,894,760) (7,653,992)NET FINANCIAL EXPENSES 21,537,011 (6,498,606)

PROFIT OR LOSS BEFORE TAX 25,702,396 (983,278)

Tax (1,241,560) 341,285NET PROFIT OR LOSS FOR TH E PERIOD 24,460,836 (641,993)

Share of the controlling interests in net profit /loss 24,460,836 (641,993)Total net profit / loss per share of the controllinginterest:Net profit / loss per share 2.7963 (0.0734)Diluted net profit / loss per share 2.7963 (0.0734)

STATEM ENT OF OTH ER COM PREH ENSIVE INCOM E (in EUR)for the period from 1 January to 30 June 2015 Controlling Controlling


2015 2014

Net profit or loss for the accounting period 24,460,836 (641,993)Other com prehensive incom eFinancial assets available for sale - -Gains / losses from revaluation of property - -Deferred tax on account of revaluation - -TOTAL OTH ER COM PREH ENSIVE INCOM E - -

TOTAL COM PREH ENSIVE INCOM E FOR TH E PERIOD 24,460,836 (641,993)



Unconsolidated statement of changes in equity

STATEM ENT OF CH ANGES IN EQU ITY -Controlling com pany (in EUR)for the period from 1 January to 30 June 2015

Total Net profit orShare Share Legal Reserves for Other reserves reserves for loss retained Net Surplus from TOTALequity prem ium prem ium treasury shares profit profit earnings profit or loss revaluation EQUITY

OPENING BALANCEat 1 January 2015 according to theIFRS 36,503,305 15,128,046 3,650,331 79,763 - 3,730,094 - - 2,709,565 58,071,010

Transactions with owners:Other increase / decrease - - - (71,218) 71,218 - - - - -Total transactions with owners - - - (71,218) 71,218 - - - - -

Changes in com prehensive incom eNet profit or loss for the year - - - - - - - 24,460,836 - 24,460,836Total changes between1 January and 30 June 2015 - - - - - - - 24,460,836 - 24,460,836

Changes in equityOther - - - - - - 107,400 - (107,400) -Total m ovem ents in equity - - - - - - 107,400 - (107,400) -

CLOSING BALANCEas at 30 June 2015 36,503,305 15,128,046 3,650,331 8,545 71,218 3,730,094 107,400 24,460,836 2,602,165 82,531,846



Unconsolidated statement of changes in equity

STATEM ENT OF CH ANGES IN EQU ITY -Controlling com pany (in EUR)for the period from 1 January to 30 June 2014

Total Net profit orShare Share Legal Reserves for Other reserves reserves for loss retained Net Surplus from TOTALequity prem ium prem ium treasury shares profit profit earnings profit or loss revaluation EQUITY

OPENING BALANCEat 1 January 2014 according to theIFRS 36,503,305 24,760,570 3,650,331 79,763 - 3,730,094 - - 3,084,243 68,078,212

Transactions with owners:Total transactions with owners - - - - - - - - - -

Changes in com prehensive incom eNet profit or loss for the year - - - - - - - (641,992) - (641,992)Total changes between1 January and 30 June 2014 - - - - - - - (641,992) - (641,992)

Changes in equityOther - - - - - - 107,400 - (107,400) -Total m ovem ents in equity - - - - - - 107,400 - (107,400) -

CLOSING BALANCEas at 30 June 2014 36,503,305 24,760,570 3,650,331 79,763 - 3,730,094 107,400 (641,992) 2,976,843 67,436,220



Unconsolidated statement of cash flows

CASH FLOW STATEM ENT (in EUR)for the period from 1 January to 30 June 2015 Controlling Controlling


2015 2014

NET PROFIT / LOSS FOR TH E PERIOD 24,460,836 (641,993)Adjustm ents for:Depreciation of PPE and investm ent property 2,057,127 2,103,117Am ortisation of intangible assets 98,260 117,333Revaluation operating expense from current assets 181,750 11,344Gains from the sale of fixed assets (54,420) (1,651)Losses from the sale of fixed assets 4,065 1,498Net m ovem ents in provisions 90,520 -Financial incom e (26,431,771) (1,155,386)Financial expenses 4,894,760 7,653,992Incom e tax - -Deferred tax 1,241,560 (341,285)Total adjustm ents (17,918,149) 8,388,962M OVEM ENTS IN W ORKING CAPITALInventories and non-current assets held for sale (1,768,851) (1,158,604)Operating and other receivables (8,918,185) (7,813,682)Operating and other liabilities 6,624,157 11,438,103Total m ovem ents in working capital (4,062,879) 2,465,817NET CASH FLOW S FROM OPERATING ACTIVITIES 2,479,808 10,212,786

CASH FLOW S FROM INVESTING ACTIVITIESAcquisition of property, plant and equipm ent (2,179,614) (2,781,427)Acquisition / disposal of financial assets (993,531) 27,984,486Disposal of non-current assets and liabilities held for sale 46,535,646 -Interest incom e 9,039 26,044Dividends received and capital gains 24,663,732 -NET CASH FLOW S FROM INVESTING 68,035,272 25,229,103

CASH FLOW S FROM FINANCING ACTIVITYInterest paid (4,894,760) (7,653,992)Increase in financial debt 131,536 393,377Decrease in financial debt (64,960,140) (28,324,881)NET CASH FLOW S FROM FINANCING (69,723,364) (35,585,496)

NET INCREASE / DECREASE IN CASH AND CASHEQUIVALENTS 791,716 (143,607)Cash and cash equivalents at the beginning of year 230,586 357,218Cash and cash equivalents at the end of year 1,022,302 213,611



Notes to the unaudited unconsolidatedsemi-annual financial statements

1. Accounting policies

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

The separate financial statements drafted for the six months ended 30 June 2015 havenot been audited and have been drafted in accordance with IAS 34 - Interim FinancialReporting, and should be read in conjunction with the annual financial statementsdrafted for the financial year ended 31 December 2014.

2. Disclosures to the individual items of the income statementof Pivovarna Laško for the January - June 2015 period

a) Net sales revenues

In the first six months of 2015, Pivovarna Laško sold 5.6% fewer products in terms ofquantities sold and generated EUR 44.7 million of net sales revenues, which is downEUR 1.1 million or 2.5% on the same period of last year. The revenues generated are up2.2% on the revenues planned for the period under review. In addition, the revenuesgenerated represent 49.1% of the annual revenues planned. Despite quantitative salesbeing up 1.1%, net revenues from the sale of products and services on the domesticmarket of EUR 26.6 million are down 1.7% compared to those generated in the sameperiod of last year, while net sales revenues on foreign markets are down EUR 0.5million (10.4%) at EUR 8.6 million, with quantities down 14.6%.

In the first half of 2015, the share of net sales revenues generated on export marketsstood at 24.4%, which is 1.8% less than in the same period of the previous year. Thedynamic plan of revenues for the January to June period has been exceeded by 3.5% onthe domestic market, while on export markets 93% of the planned revenues for theperiod have been achieved. Compared to the annual plan of revenues, the revenuesgenerated on the domestic market stand at 49.3%, and the revenues generated on exportmarkets at 46%. The net revenues from sales of merchandise and materials amount toEUR 9.2 million, up 1.7% on the same period of last year. Compared to the annual planof revenues for the first half of the year, the revenues generated are up 6.2%, while therevenues generated from sale of merchandise stand at 50.5% of the annual plan.

In the period under review, Pivovarna Laško generated a total of EUR 45.5 million ofoperating revenues, down 1.3% on the same period of last year. The Company hasexceeded the plan by 3.8% and generated 49.8% of the revenue planned for 2015 in theperiod in question.



b) Costs and other operating expenses

The costs and other operating expenses of Pivovarna Laško during the January - June2015 period amount to EUR 41.4 million, 1.8% or 0.7 million more than in the sameperiod of 2014. The expenses recorded in this period represent 51.6% of the annual plan.

Majority, EUR 12.7 million or 30.7% of all operating revenues are costs of material andenergy, down 8.6% on the same period of last year. The costs of materials recorded inthis period represent 49.7% of the annual plan. Decrease in the cost of raw materialsand materials amounted to EUR 1.2 million, which is more than the decrease inrevenues, and is mainly due to lower prices on the world market. Energy costs are at thelevel recorded in the previous year and amount to EUR 1.1 million.

Costs of services amount to EUR 10.7 million and are up EUR 1.8 million or 19.7%,standing at 55% of the annual costs of services planned. The majority of these costs aremarketing costs which account for 52% of total costs of services, up EUR 0.9 million or19.4% on the same period of the previous year. The cost of consulting services rose byEUR 0.4 million, mainly due to services related to the sale and the capital increase, aswell as services of internal audit and design of the project to support strategic decisions.

In the January to June 2015 period, employee benefit costs amounted to EUR 5.4million, and are at the level recorded in the comparable period of 2014. In comparisonwith the dynamic plan for this period, labour costs increased by 8.4%, accounting for53.4% of the annual plan.

Compared to the same period of the previous year, write-downs are up EUR 0.1 millionto EUR 2.3 million.

Other operating expenses of EUR 1 million are down EUR 0.2 million or 18.1% andstand at 50% of the annual plan.

c) Profit or loss from operations

In the first six months of 2015, Pivovarna Laško generated an operating profit of EUR4.2 million, down EUR 1.3 million or 24.5% on the same period of last year. The profitgenerated accounts for 37.3% of the plan for the year. In the first six months of 2015, theCompany recognised certain one-off events that had an overall negative effect. Thenormalised EBIT adjusted by EUR 0.4 million of the effects of these business eventsamounts to EUR 4,6 million, which is a decrease of EUR 1.2 million or 21.2% comparedto 2014.

d) Financing profit or loss

In the first six months of 2015, the Company generated a financing profit of EUR 21.5million.

Compared to the same period of last year, financial revenues amounting to EUR 26.4million are up EUR 25.3 million. The primary reason for this increase in financialrevenue is gains of EUR 13.1 million on the disposal of the investment in the subsidiaryRadenska, after the deduction of selling expenses. Another reason is the dividendreceived by the Company from its subsidiary Pivovarna Union in the amount of EUR



11.5 million. On the other hand, in the previous year the Company reported no financialrevenue from investment disposal and the third major reason for the increase infinancial revenue is the reversal of the past impairment of the investment in thesubsidiary Delo in the amount of EUR 1.8 million. On 3 June 2015, Pivovarna Laškoconcluded a Share purchase agreement for the sale of a 100% stake in Delo with thecompany FMR, financiranje in upravljanje naložb, d. d., for consideration amountingto EUR 7.3 million. The Share purchase agreement was concluded under a number ofsuspensive conditions which must be fulfilled before the transaction can be finalised.On 15 June 2015, the Supervisory Board of Pivovarna Laško gave its consent to the saleof the shares in Delo, Ljubljana. This consent is one of the suspensive conditions forthe transaction to be finalised.

Financial expenses in the period amount to EUR 4.9 million. In the first six monthsof 2015, the Company paid EUR 4 million of interest on bank loans, down 24.8%compared to the same period of last year, while interest expenses on loans from relatedpersons amounted to EUR 0.6 million, down 45.9% or EUR 0.5 million compared tothe first six months of 2014. An important reason for this difference is the conclusionof the sales process for the stake in Mercator on 27 June 2014. The considerationreceived by Pivovarna Laško for a 8.43% stake in Mercator has significantly contributedto the deleveraging of the Company. Another reason is the sale of Radenska, whichclosed on 17 March 2015. In line with the repayment schedule of the Restructuring andStandstill Agreement, in the first half of 2015, Pivovarna Laško repaid the banks EUR7.9 million from its core activities, namely EUR 3.5 million on 31 March 2015 and EUR4.4 million on 30 June 2015. Financial expenses of the first six months of 2015 includethe costs of legal and financial advisers relating to the sale of financial investments anddebt restructuring of EUR 0.2 million.

e) Net profit or loss

In the first half of 2015 the Company generated a net profit of EUR 25.7 million, whilein the same period of last year it incurred a loss of EUR 1 million. In the January to June2015 period the Company generated EUR 24.5 million of net profit, compared to a lossof EUR 0,6 million incurred in the comparable period of 2014.

f) Earnings before interest, tax and depreciation and amortisation (EBITDA)

In the first six months of the year, the Company generated an EBITDA of EUR 6.3million, down EUR 1.4 million or 18.3% on the same period of last year.

The normalised EBITDA amounts to EUR 6.8 million and is down EUR 1.3 million onthe previous year.

3. Disclosures to the statement of financial position of Pivovarna Laško, d.d.at 30 June 2015

a) Assets

As at 30 June 2015, the Company's assets amounted to 288.9 million, down EUR 31million compared to the end of 2014, mainly due to the decrease in short-term assetsheld for sale as a result of the sale of the subsidiary Radenska.



b) Property, plant and equipment

Compared to the last day of 2014, property, plant and equipment amounted to EUR 46.5million as at 30 June 2015, reflecting depreciation and amortisation of EUR 2.1 millionand new acquisitions amounting to EUR 4.7 million, the majority of which includes thenew ST2 filling line and the purchase of returnable packaging.

c) Long-term investments

As at 30 June 2015, long-term investments totalled EUR 164.8 million. Compared to thelast day of the previous year, they were down EUR 4.6 million. Long-term financialinvestments in subsidiaries are down mainly on account of the transfer of theinvestment in Delo to non-current assets held for sale. As at 30 June 2015, investmentsin the subsidiaries were not tested for impairment.

d) Long-term deferred tax assets

As of 30 June 2015, the Company disclosed net long-term deferred tax assets amountingto EUR 28 million. Compared to the end of 2014, long-term deferred tax assets are downEUR 1.2 million.

e) Assets held for sale

As at 30 June 2015 assets held for sale amount to EUR 7.3 million. In 2014, the Companytransferred the investment in Delo amounting to EUR 5.5 million to non-current assetsheld for sale. In line with the contract concluded on 30 June 2015 between PivovarnaLaško and FMR, financiranje in upravljanje naložb, d. d., for the sale of a 100% stake inDelo in the amount of EUR 7.3 million, the Company reversed EUR 1.8 million of theinvestment impairment recognised in the past.

f) Inventories

Due to seasonality, the value of inventories grew by EUR 1.8 million compared to theend of the previous year. The increase is mainly on account of supplies of raw materialswhich grew by EUR 1.3 million.

g) Short-term operating receivables

Compared to 31 December 2014, short-term trade receivables, which amount to EUR27.6 million as at 30 June 2015, are up EUR 8.8 million, which is the result of settlementdelays, as well as the seasonal effect.

h) Short-term loans granted

In the first half of 2015, short-term loans granted amounted to EUR 0.3 million, and areat the level recorded at 31 December 2014.

i) Equity

As at 30 June 2015, the Company's equity amounts to EUR 82.5 million, reflecting anincrease of EUR 24.5 million compared to the last day of 2014, on account of the profitgenerated in the first half of the year.



j) Long-term financial liabilities

As at 30 June 2015, long-term financial liabilities of the Company amount to EUR 63million, of which EUR 52.7 million relates to long-term loans from banks, and EUR 9.3million to liabilities for short-term loans raised from subsidiaries. Compared to the lastday of 2014, the balance of long-term financial liabilities decreased by EUR 9.9 milliondue to the transfer of long-term borrowings to short-term borrowings.

k) Short-term operating liabilities

As at 30 June 2015, short-term operating liabilities amount to EUR 33.6 million, anincrease of EUR 5.8 million over the last day of 2014. Majority of the increase is due tosupplier payables which are up EUR 5.3 million or 67.7% due to seasonality, prolongedpayment terms and payment delays. Payables to the state have increased by EUR 1.6million. On the disposal of Radenska, the Company settled EUR 1 million of thesettlement claim pursuant to paragraph 1 of Article 542 of the Companies Act.

l) Short-term financial liabilities

As at 30 June 2015, short-term financial liabilities amount to EUR 100.9 million, downby EUR 53 million compared to the 2014 year-end. The majority represent liabilitiesarising from short-term borrowings from banks, which in comparison with the end of2014 decreased by EUR 20.9 million to EUR 99.9 million; liabilities from short-termborrowings from subsidiaries decreased by EUR 33.2 million compared to the 2014 year-end; while other short-term financial liabilities increased by EUR 1.1 million comparedto the balance at 31 December 2014. This reduction is primarily due to the sale ofRadenska, which closed on 17 March 2015. With the consideration of EUR 60 million,the Company repaid its borrowings raised from Radenska in the amount of EUR 33.1million, and purchased the shares of Delo in the amount of EUR 1 million and the sharesof Premogovnik Velenje in the amount of EUR 1. The Company allocated EUR 22.8million for the repayment of borrowings to banks, while EUR 2 million relates toretained consideration for a period of 24 months from the date of completion of the saleof RARG shares, which is recognised under operating receivables.

m) Collateralisation of financial liabilities

The financial liabilities of the Company relating to borrowings raised with banksamount to EUR 151.6 million as at 30 June 2015, and are fully collateralised with lienson securities, mortgages, the pledge of movable property and receivables. The Companyhas collateralised its financial liabilities with 440,295 PULG (Pivovarna Union) shares,539,516 DELR (Delo) shares, 270,648 EGKG (Elektro Gorenjska) shares and 645,003ZDRL (Thermana) shares. Borrowings raised from Pivovarna Union in the amount ofEUR 9.3 million are collateralised with bills of exchange.

n) Excess short-term liabilities

As at 30 June 2015, the Company's total short-term liabilities amount to EUR 134.5million, while its short-term assets amount to EUR 45 million. Thus the excess of short-term liabilities of EUR 89.5 million is down EUR 19.4 million compared to the last dayof 2014. Due to this high excess of short-term liabilities, the Company is exposed tosignificant liquidity risk.



In April, the sales consortium of owners of Pivovarna Laško, concluded with HeinekenInternational B.V. a Share Purchase Agreement (SPA), pursuant to which the companyHeineken acquired 4,471,054 shares or a 51.11% stake in Pivovarna Laško. The signingof the contract represents a continuation of the fulfilment of the Restructuring andStandstill Agreement. The proceeds will be paid and the shares transferred upon thefulfilment of the suspensive conditions defined in the Share Purchase Agreement.Upon signing the Share Purchase Agreement, the buyer also concluded a Cooperationagreement with Pivovarna Laško, with which the buyer undertakes to ensure thecontinued financial stability of Pivovarna Laško after the transaction closes.

o) Short-term accruals and deferred income

As at 30 June 2015, short-term accruals and deferrals amount to EUR 2.6 million, anincrease of EUR 1.4 million over the last day of 2014. The bulk of the increase in accruedcosts represent water concession fees and the accrued costs of annual discountsapproved to large customers.

Pivovarna Laško, d. d., Trubarjeva 28, 3270 Laško, 14 August 2015

C O L O P H O N

Publisher: Pivovarna Laško, d. d., Trubarjeva 28, 3270 Laško

Design: Pivovarna Laško

Text: Pivovarna Laško

Translating: Prevajalska agencija GORR, d. o. o.

August, 2015

Semi annual report 2015 an za objavo 17 8 2015

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Transcript of Semi annual report 2015 an za objavo 17 8 2015