WAY UPWARDS - HSE

8 Annual Report 2011
The Supervisory Board’s work in 2011 was very extensive due to active cooperation in procedures
related to the replacement Unit 6 project at Termoelektrarna Šoštanj d.o.o., as well as other major
projects of the company. It is the Supervisory Board’s estimate that the management prepared appropriate
and accurate reports, information and analyses that were also further explained by the
management, or occasionally by their authors, at the meetings. The Supervisory Board thus obtained
the necessary insight into all important areas of operation, enabling it to perform, without interruptions,
its functions of monitoring and controlling the handling of transactions and operations of the
company within the scope of its powers and competences laid down in the Articles of Incorporation.
1.2.2 Examination of the annual report and position on the audit report
Pursuant to Article 272, Paragraph 3, of the Companies Act, the company’s management submitted to
the Supervisory Board the 2011 Annual Report of the company HSE and the HSE Group including the
Auditor’s Reports on 18 May 2012. The Supervisory Board discussed the Annual Report at its eleventh
correspondence meeting on 28 May 2012 and determined that the management prepared the 2011
Annual Report within the legal deadline and that the Annual Report contained all the elements laid
down by the current Companies Act (Official Gazette of RS No. 65/2009, ZGD-1 UPB-3).
The audit of the 2011 Annual Report of the company HSE and the HSE Group was performed by
Deloitte Revizija d.o.o., which issued a positive, unqualified opinion on the unconsolidated and consolidated
financial statements of the company and the Group and determined that the business report
of the company and the Group was consistent with the audited financial statements for 2011.
At its 7th regular meeting on 22 March 2012, the HSE SB Audit Committee discussed information on
unaudited financial statements for the company HSE d.o.o. for 2011 and estimated that the company
was operating in accordance with the expectations in 2011.
The HSE d.o.o. Supervisory Board was also acquainted with the Note – »Emphasis of Matter« where
Deloitte, without qualifying its opinion, drew attention to Note 2.12.2 »Business Risks: Investment
Activity Risk« of the business report or the Note 4.5.8.8.2 »Liquidity Risk« to financial statements
where HSE disclosed that it is exposed to a high operational risk of non-issuing of the government
guarantee or risk of time delay in issuing of the government guarantee to EIB for the loan in the
amount of € 440 million. The abovementioned risk is connected to high liquidity risk. Management
of the abovementioned risks by the management is disclosed in the Note 2.12.2 of the business report
or in the Note 4.5.8.8.2 to financial statements. The financial statements do not include potential adjustments
that may have been the consequence of this uncertainty.
The Supervisory Board of the company HSE d.o.o. also detected the hazard of liquidity risk in case of
possible non-issuing of the government guarantee and during two consecutive meetings (17th regular
meeting and 7th irregular meeting) requested that the company‘s management immediately prepares
relevant measures of preventing and eliminating the reasons for illiquidity in accordance with sensible
use of provisions from Article 31 of ZFPPIPP.«
Based on the review of the 2011 Annual Report of the company HSE and the HSE Group, both Auditor’s
Reports and the positions of the Audit Committee, the Supervisory Board determined:
• that the 2011 Annual Report is clear, transparent and prepared in accordance with the provisions
of the Companies Act;
• that the Annual Report enables detailed verification of the financial position and the financial
performance of the company;