Annual Report: - Gorenjska banka

In order to measure the fair value of the 6.2-percent equity stake in Pivovarna Laško, d. d., Laško as at
31 December 2011 based on weighted mean of assessments obtained using the above-mentioned
valuation models, the Bank applied the price of EUR 16.30 per share instead of the market price
of EUR 11.02 per share, which is in the value range between EUR 13.40 and 18.90 per share. The
carrying value amounted to EUR 8,841.9 thousand (at EUR 16.30 per share).
The bases of the discounted cash flow method:
• The discounted cash flow method is based on the assumption of a going concern, i.e. a company
oriented to maximising the value and continuing with its operations in the future.
• The required rate of return on equity has been assessed at the level of 16.72%.
• The discount rate is defined as the WACC (weighted average cost of capital) and has been assessed
at the level of 13.09%.
• The remaining value is, based in the assessment of growth possibilities in the industry, assessed
taking into account that free cash flows be growing at the rate of 2.0%, which corresponds to longterm
potential of the company, entry barriers for arrival of new competitors and also the fact that
nominal projections have been made taking into account the inflation rate.
• The estimated value has been increased for the value of redundant assets and financial investments,
and decreased for financial and contingent liabilities.
• A 20% discount rate for minority owner has been applied.
• A 5% discount rate for lack of liquidity has also been applied as the liquidity of shares, which are
otherwise traded at the stock exchange, is too weak to enable a prompt sale of all the shares on
the market.
The bases of the comparable quoted companies method:
• The value has been calculated using market multipliers defined based on market data of comparable
quoted companies.
• Comparable companies with similar risk elements as Pivovarna Laško were identified using
databases (Damodaran, FT), based on industry analyses and operational characteristics.
• The multiplier calculation took into account share prices as at 31 December 2011 and operating
results of these companies from 2010. The following multipliers were applied: MVIC / sales: 2.40 and
MVIC / EBITDA: 8.12.
• A 5% discount rate for lack of liquidity has also been applied as the liquidity of shares, which are
otherwise traded at the stock exchange, is too weak to enable a prompt sale of all the shares on
the market.
Shares of the company Sava, d. d., Kranj with the code SAVA
At the end of 2011, the Bank owned 56,475 SAVA shares or 2.81 percent equity stake in the company.
SAVA shares are traded at the Ljubljana Stock Exchange. Total transactions at the Stock Exchange
stood at EUR 1,471 thousand at the end of 2011, which accounted for 0.31 % of total transactions
and 0.37 % of total transactions with shares. The number of transactions was 1,522 and the total
volume of lots was 33,137.
In 2011, the price of SAVA shares fell by 87%, from EUR 95.00 to EUR 12.00. The fall was not merely a
reflection of the company's financial position, but also of the extremely poor liquidity of the share at
the Ljubljana Stock Exchange and the general economic situation.
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Gorenjska banka, d. d., Kranj
Annual Report 2011
Financial Report