2011 - Dars

ContentsBUSINESS REPORT 4FINANCIAL REPORT 593annual report 2011 dars

BUSINESS REPORT4annual report 2011 dars

ContentsBUSINESS REPORT6Statement of the Management Board 8Report on the Work of the Supervisory Board in 2011 12Information About the Company and Key Business Data 14Mission, Vision, Values and Strategic Orientation 18Motorways and Expressways in the RS and Traffic Loads 20Key Business Events in the 2011 Business Year 25Business Risks 27Financial Risks 30Analysis of Business Performance 32Business Activities of the Company 34Tolling 34Motorway Maintenance and Management 37Construction and Reconstruction Organisation 39Investment in Motorway Development and Reconstruction 41Research and Development Activities 42Integrated Management System 43Internal Audit 44Social Responsibility 45Traffic Safety 45Environmental Management 47Human Resources Management 49User Satisfaction and Communications 52Anticipated Development 54Corporate Governance Statement of DARS D.D. 55annual report 2011 dars

ABBREVIATIONSAADT Average Annual Daily TrafficABC Automatic non-cash toll collectionASECAP Association Européenne des Concessionnaires d'Autoroutes et d'ouvrages à Péage/European Association ofOperators of Tolled Road InfrastructuresAMDRP Annual Motorway Development and Reconstruction PlanAUKN Capital Assets Management Agency of the Republic of SloveniaCA-1 Companies Act (ZGD-1) (Official Gazette of RS, no. 65/2009-UPB3, 83/2009)DARS d.d. Družba za avtoceste v Republiki Sloveniji d.d. (Motorway Company in the Republic of Slovenia)DBP Design for Building PermitdTIMS_CT Deighton Total Infrastructure Management System, Concurrent TransformationEBITDA Earnings before interest, tax depreciation and amortisationED Execution DesignETS Electronic Tolling SystemFTF Free Traffic FlowIBCP International Border Crossing PointMCRSA Motorway Company in the Republic of Slovenia Act (ZDARS-UPB 1) (Official Gazette of RS, no. 20/2004)MCRSA-1 Motorway Company in the Republic of Slovenia Act (Official Gazette of RS, no. 97/2010-ZDARS-1)MMC Motorway Maintenance CentreMT Ministry of TransportMZIP Ministry of Infrastructure and Spatial PlanningNMCP National Motorway Construction Programme in the Republic of SloveniaPIARC Permanent International Association of Road CongressesPMS-DARS Pavement Management System – DARSR3 Motor vehicles having two or three axles whose maximum permissible weight exceeds 3,500 kg, and groupsof motor vehicles having two or three axles whose maximum permissible weight exceeds 3,500 kgR4 Motor vehicles having more than three axles whose maximum permissible weight exceeds 3,500 kg, andgroups of motor vehicles having more than three axles whose maximum permissible weight exceeds 3,500 kgRS Republic of SloveniaSAS Slovenian Accounting Standards 2006TCOC Tolling Control Operational CentreTIC Traffic Information Centre for public roadsTSMS Traffic control and management system7annual report 2011 dars

STATEMENT OF THE MANAGEMENTBOARDIn addition to new kilometres ofmotorways, new rest areas werealso opened, providing motorwayusers with fuel service and thechance to stop for a rest.8annual report 2011 darsThe year 2011 was a dynamic andchallenging one for DARS d.d.,strongly characterised by the globaleconomic and financial crisis and particularlyby the crisis in the construction industryin Slovenia. New legislation and otherevents required quick and effective decisionsby the Company, both with respectto relations with the external environmentand within the Company itself.In accordance with its business plan, in 2011DARS d.d. organised and headed projectsinvolving the construction of motorway sections.The extension of the second half of the2.4 kilometre-long motorway section in thedirection Radovljica-Kranj concluded the constructionof the 70 kilometre-long four-lanemotorway leg between the Karavanke Tunneland Ljubljana. A portion of the Mengeš bypassand second phase of the southern Ankaranradial road was opened to traffic.On the remaining motorway sectionswhere concluding works were implemented,the Company encountered numerousproblems in realising envisaged projects,in the majority of cases due to the bankruptciesor liquidity problems of Slovenianconstruction companies. As a result, therealisation of works in line with concludedcontracts was lower than planned, withproblems also arising in connection withthe remedying defects within the guaranteeperiods.The construction of the Markovec Tunnelcontinued. After the key contractor for tunnelconstruction works became unable tocontinue construction, the works were assumedby an Austrian company in Februarywhich continued the construction of thetunnel in accordance with the provisionsof the basic construction contract. Despitesome delays in construction, the right tunneltube in the direction Koper-Izola was finallybroken through in January 2012. The Companyexpects works to continue in the futureand for them to be completed in accordancewith the basic construction contract.After the collapse of major Slovenianconstruction companies which had beenimplementing construction of motorwaysections for the Company, it was found thatthe latter had failed to settle their obligationswith subcontractors. These subcontractorsrequested direct payment for theabove from the Company extremely late,mostly long after the Company had settledits obligations with the key contractors.At DARS d.d. we are aware of the difficultsituation our subcontractors have foundthemselves in and were willing to resolvethis issue before the arbitration committeeof the Chamber of Commerce and Industry

of Slovenia. Nevertheless, as a good manager,the Company must always act withresponsibility, in the interests of the Company,and in accordance with the law whichprohibits dual payments for the same work.In accordance with the Action Plan forthe introduction of an electronic tollingsystem in free-flow traffic adopted by theGovernment of the Republic of Sloveniaon 8 August 2011, the Company preparedan international public tender for the contractorfor the set-up and operation of amulti-lane electronic free-flow toll collectionsystem for motorways and expressways.The current toll system for cargovehicles in Slovenia needs to be replaced,since it cannot be maintained in the longterm. On the other hand, the current tollsystem does not meet the technologicalrequirements for the implementation ofthe so-called European electronic road tollsystem in accordance with the Directive2004/52/EC of the European Parliamentand of the Council on the interoperabilityof electronic road toll systems in the Community.The Action Plan and, subsequently,the tender documentation, do notspecify the technologies of the new tollsystem, but leaves them to the tenderer,on condition that they meet the requirementsof the tender.Vehicle toll collection was carried out inthe established manner in 2011, accordingto two separate toll collection systems- with vignettes for vehicles whose maximumpermissible weight does not exceed3,500 kg and via the open and closed tollcollection system at toll stations for vehicleswhose maximum permissible weightexceeds 3,500 kg. The systems are usuallyindependent of each other and thereforenot optimal; therefore, the fundamentalgoal in implementing toll collection is theoptimisation of both systems.Fewer maintenance works in 2011 werecarried out due to problems connected topublic tenders for the selection of contractors.To increase traffic flow capacity andreduce congestion, road closures weremainly implemented at night during decreasedtraffic loads. Maintenance worksduring the day are planned and implementedoutside of peak periods.Investments in the reconstruction andmaintenance of motorways and expresswayswere made pursuant to the BusinessPlan for 2011, which was prepared on thebasis of inspections and assessments ofthe state of carriageways, monitoring thestate of infrastructure and expert assessmentsregarding urgent reconstruction.The selected sections were additionally9annual report 2011 dars

10annual report 2011 darsapproved by using an expert system forcarriageway management which is appliedfor the optimal planning of carriagewayreconstruction.A number of challenges still await Sloveniaregarding the construction of road connections,which in addition to the coastalexpressway Izola–Lucija, also includes theDraženci–IBCP Gruškovje motorway section.Considering the experience and knowledgegained from implementing the NMCP in theRepublic of Slovenia over almost 20 years,DARS d.d. also wishes to participate activelyin constructing the Postojna–Divača–Jelšaneroad connection and the Šentrupert–Dravogradmotorway section.Procedures for the preparation of elevennational spatial plans were carried outin 2011 in the field of spatial planningand integration in the environment. TheCompany also cooperated within its competenceswith the public and users in thisendeavour, thereby contributing to theadoption of socially acceptable solutions.Despite a disadvantageous business environment,the Company’s total revenues in2011 increased to EUR 336.5 million, therebyexceeding the revenues of 2010 by 6%.The increase was mostly due to an increasein toll revenue, which accounted for 89% ofthe total revenues of the Company.Toll revenue amounted to EUR 298.3 millionand exceeded revenue in 2010 by3%. Revenue from the sale of vignettesaccounted for a 46% share in the total tollrevenue structure, while revenue from tollsof cargo vehicles accounted for 54%.The Company’s costs in 2011 amountedto EUR 305.7 million, a 10% increase overcosts incurred in 2010. The largest shareswere that of amortisation, with 52%, andfinancial costs at 25%.The net profit of the Company in 2011amounted to EUR 24.6 million.One of the Company’s key activities in2011 was the management of debt whichhad accumulated due to intensive constructionand reconstruction works in thepast. In 2011, the Company repaid loans ofEUR 66.7 million and paid interest of EUR79.3 million. The total debt of the Companyon 31 December 2011 comprised EUR2,931.8 million.The Company concluded the 2011 businessyear successfully, largely due to the dedicatedwork, efforts and commitment of allits employees. The successful harmonisationof the private, family and professional

lives of its employees also contributedsignificantly to the Company’s business andoperating results. At DARS d.d., we realisethe responsibility we have as a company, sowe obtained a general certificate as a FamilyFriendly Company, thereby undertakingalso in the future to support the realisationof all measures to contribute to increasingemployee satisfaction.Gordana BoškovićMember of the Management BoardAt DARS d.d., we are aware of the socialchallenges awaiting us in the future, thesignificance of sustainable developmentand the importance of preserving and protectingthe environment. We are especiallyproud to have obtained the ISO 14001environmental management system certificatelast year. The system comprehensivelyregulates the environmental aspects ofwaste minimisation and rational use ofenergy, the active monitoring of our activitiesin terms of protecting the environmentup to the adoption and implementation ofenvironmental legislation, and the educationof our employees to ensure moreenvironmentally friendly operations.Now that the majority of the motorwayMateja DuhovnikChairwoman of the Management Boardnetwork has been constructed and thetime is approaching when we will need tofocus more than ever on the managementof the constructed motorway infrastructureand the challenges posed by efforts to ensuregreater traffic safety and flow capacityon the motorways and expressways.DARS d.d. is a socially responsible companythat will increasingly strive to become amore open, successful and market-orientedcompany active in the management ofmodern infrastructure networks in accordancewith stakeholders’ expectations.Alojz Ratajc, MScMember of the ManagementBoard - Labour Manager11annual report 2011 dars

REPORT ON THE WORK OF THE SUPERVISORYBOARD IN 2011The Supervisory Board of DARS d.d. has assessed that the ManagementBoard of DARS d.d. and the Supervisory Board of DARS d.d. carried outtheir tasks efficiently and to the benefit of the Company in 2011.12annual report 2011 dars1. Composition of the Supervisory Board of DARSd.d.In accordance with point 7.3.1 of the Articles of Association ofDARS d.d. of 14 March 2011, the Supervisory Board of DARS d.d. iscomprised of six members. Two members of the Supervisory Boardare employee representatives.The Supervisory Board consisted of the following members in 2011:- Milan Medved, PhD, Chairman (he tendered his resignation on18 January 2012),- Iztok Klančnik, Deputy Chairman (he tendered his resignationin August 2011),- Tomaž Mencinger, MSc, Member, Deputy Chairman from 28September 2011 and Chairman from 15 February 2012,- Darij Barrile, Member,- Vito Meško, Member/employee representative,- Darko Kodrič, Member/employee representative.2. Activities of the Supervisory BoardIn 2011, the Supervisory Board of DARS d.d. met at fourteen regular,four correspondence and two extraordinary sessions.The members regularly attended meetings, as proven by the factthat all members were present at sixteen meetings, with a one ortwo absences being recorded at four meetings.The members are active at the sessions and participate in discussionsin order to clarify any differing opinions and to reconcilethem to such an extent that, in most cases, resolutions can beadopted unanimously. This can be seen by the fact that all decisionsadopted in 2011 were unanimous. The discussions showthat the members of the Supervisory Board thoroughly preparedthemselves in advance for the sessions to enable active and professionalparticipation in discussions on individual items of theagenda.In accordance with point 7.3.7 of the Articles of Association ofDARS d.d., in 2011 the Supervisory Board of DARS d.d. grantedcon sent to nine transactions having individual values exceedingEUR 2.5 million. In accordance with a decision of the SupervisoryBoard in 2010, the consent of the Supervisory Board has to againbe obtained for the conclusion of annexes to contracts which theSupervisory Board had already approved, even for transactionswith values less than EUR 2.5 million. The Supervisory Board gaveits consent for the conclusion of seven such annexes in 2011.At its January and February meetings, the Supervisory Board wasacquainted with activities related to the preparation of a responsereport to the audit report of the Court of Audit of the Republicof Slovenia entitled ‘Payment of Compensation and Constructionof the Overpass Over the Pluska-Ponikve Motorway Section’. Theresponse report on the audit report which the Supervisory Boardwas acquainted with at its February session was also submitted toAUKN and published on the website of DARS d.d.At its March session, the Supervisory Board approved the BusinessPlan of DARS for 2011 and also took note of the Annual Work Planfor the Internal Auditing Department for 2011. It also discussedthe issue of payment to subcontractors carrying out tasks on thePomurska motorway. The Management Board obtained two legalopinions regarding the aforementioned opinion, supporting thefact that the actions of DARS d.d. in relation to the subcontractorshad been carried out correctly in the past.The Supervisory Board was informed of the issue regarding paymentto subcontractors on an ongoing basis throughout the year.The Board discussed the Annual Report of DARS d.d. and Auditor’sReport for 2010. In addition, it was acquainted with the tenderdocumentation for electronic toll collection in free traffic flow andapproved publication thereof.The Supervisory Board discussed the call by the Court of Audit forthe dismissal of the Chairwoman and member of the ManagementBoard of DARS d.d. and decided that the appeal be dismissed asunfounded.At its last session in 2011, the Supervisory Board approved theBusiness Plan of DARS d.d. for 2012.The Supervisory Board of DARS d.d. regularly took note of reportson the scope of works performed on individual sections, and separately,according to underlying contracts and annexes, as well asreports on reconstruction and maintenance works. It also regularlytook note of claims for the review of public procu rement procedures,as well as reports on concluded financial transactions withvalues exceeding EUR 2.5 million, for which the Supervisory Boardauthorised the Management Board in February 2007.

It was also concurrently acquainted with activities regarding theimplementation of works on the Markovec Tunnel, with businessanalyses for DARS d.d. for individual periods in the current year,and with personnel reports and reports on occupational health andsafety and activities connected to the implementation of electronictoll collection in FTF.This method of work ensures the optimal efficiency of the SupervisoryBoard’s activities.In accordance with the Corporate Governance Code for Joint StockCompanies of 18 January 2011, the Supervisory Board implementeda procedure for evaluating effectiveness in early 2012.2.1 Committees of the Supervisory Board of DARS d.d.Audit CommitteeThe tasks of the Audit Committee are stipulated by the CompaniesAct (CA-1) and the Rules of Procedure of the DARS d.d. SupervisoryBoard Audit Committee. The Audit Committee meets prior to eachSupervisory Board session, where it discusses the Annual Report,the proposal for selecting the auditor for performing auditing servicesat DARS d.d., the Annual Work Plan for the Internal AuditingDepartment, etc. The Audit Committee also meets in other specialcases. The President of the Audit Committee reports on the Committee’sconclusions and decisions at the Supervisory Board sessions.In connection to the report of the Court of Audit of the Republicof Slovenia entitled ‘Payment of Compensation and Constructionof the Overpass Over the Pluska-Ponikve Motorway Section’, theAudit Committee of the Supervisory Board proposed that the ManagementBoard be instructed to file an action to establish the invalidityof the contracts of sale and exchange agreements, instead ofexpropriation in the work relating to the payment of compensationfor damages caused by operations in two locations, and for workrelated to the construction of the overpass, and to require repaymentfor amounts unduly paid in damages. In addition, the AuditCommittee also proposed that the Supervisory Board verify the adequacyof the agreements and payments of compensation for thepurchase of land needed for the construction of the Pluska-Ponikveand Ponikve-Hrastje motorway sections. The Audit Committee wasacquainted with the reports on the additional verification of theadequacy of agreements and payments of compensation for thepurchase of land needed for the construction of the Pluska-Ponikveand Ponikve-Hrastje motorway sections at its June session.The Audit Committee met at seven sessions in 2011.2.2 Organisation of WorkIn accordance with its rules of procedure, the SupervisoryBoard of DARS d.d. appointed a Secretary from among companyemployees at the end of 2005 responsible exclusive ly to theChairman of the Supervisory Board for work performed for theSupervisory Board. The Secretary of the Supervisory Board coordinatesthe work of the Supervisory Board and ensures that theCompany’s professional services duly prepare the materials forthe sessions of the Supervisory Board, and performs other tasksspecified in the Rules of Procedure of the Supervisory Board.The Supervisory Board generally meets at the DARS d.d. bran choffice in Ljubljana, and occasionally also at the head office in Celje.Whenever a field inspection is required in order to deal with acertain issue in the field, the Supervisory Board conducts a fieldmeeting.3. Approval of the Annual Report and ProposedAppropriation of Accumulated Profit for the Year2011The Supervisory Board of DARS d.d. examined the Annual Reportof DARS d.d. for the year 2011 within the legally prescribed period.It took note of the Auditor’s Report and the submitted opinion of acertified auditor on the examination of financial statements for the2010 financial year, and established that the certified auditor hadnot discovered any misstatements or irregularities that could havean impact on the financial statements of the Company. The Auditor’sReport did not contain any remarks or reservations addressed to theManagement Board or the Supervisory Board of the Company.Pursuant to the provisions of Articles 64 and 230 of CA-1, on thebasis of the audited financial statements of the Company andwithin the context of the comprehensive treatment of the AnnualReport, as well as the proposal of the Management Board, theSupervisory Board of DARS d.d. established that net profit for theperiod from 1 January to 31 December 2011 amounted to EUR24,609,551.89. Net profit would be allocated to:- legal reserves in the amount of EUR 1,230,477.59 and- other revenue reserves according to the decisions of the ManagementBoard and the Supervisory Board of DARS d.d. in theamount of EUR 11,689,537.15.The accumulated profits as at 31 December 2011 amounted to EUR11,689,537.15.The appropriation of accumulated profit will be decided by theGeneral Meeting of the Company.At its session on 24 April 2012, the Supervisory Board of DARS d.d.adopted a resolution approving the audited Annual Report of DARSd.d. for the year 2011, which, on the basis of Article 282 of CA-1,means that the Supervisory Board of DARS d.d. agrees with theaudited report and thereby adopts the Annual Report of DARS d.d.for the year 2011.The Supervisory Board of DARS d.d. has assessed that the ManagementBoard of DARS d.d. and the Supervisory Board of DARS d.d.carried out their tasks efficiently and to the benefit of the Companyin 2011, as is evident from the business results attained, and proposesthat the General Meeting discharge their members of theirduties in accordance with the provisions of Article 293 of CA-1.Tomaž Mencinger, MScChairman of the Supervisory Board13annual report 2011 dars

INFORMATION ABOUT THE COMPANY ANDKEY BUSINESS DATADružba za avtoceste v Republiki Sloveniji d.d.NAME(Motorway Company in the Republic of Slovenia)Abbreviated name: DARS d.d.Ulica XIV. divizije 4, 3000 CeljeREGISTERED OFFICETelephone: +386 (0)3 426 40 71Fax: +386 (0)3 544 20 01Dunajska 7, 1000 LjubljanaBRANCH OFFICETelephone: +386 (0)1 300 99 00Fax: +386 (0)1 300 99 01WEBSITESwww.dars.siwww.promet.siYEAR OF ESTABLISHMENT 1993REGISTER ENTRY NUMBER1/06158/00, District Court of CeljeFOUNDERRepublic of SloveniaSHAREHOLDERRepublic of SloveniaCOMPANY REGISTRATION NUMBER 5814251000VAT NUMBERSI92473717SHARE CAPITAL EUR 2,319,866,345.16SHARES ISSUED55,592,292 no par value sharesDARS d.d. was established in 1993 under the MCRSA, and began operating on 1 January 1994. Until 31 December2003, it had the status of a publicly owned company in the form of a public limited company, andsince 1 January 2004, it has the status of a public limited company operating as a corporate entity. The solefounder and shareholder of DARS d.d. is the Republic of Slovenia, which is represented by AUKN under theManagement of Equity Investment of the Republic of Slovenia Act (Official Gazette of the Republic of Slovenia,No. 38/10).At the end of 2010, the MCRSA-1 entered into force, in accordance with which DARS d.d.:- performs special tasks in relation to spatial planning and integrating motorways in the environment, aswell as tasks in relation to acquiring real property for the requirements of motorway construction in thename of the Republic of Slovenia and for the State’s account;- constructs motorways in its own name and for its own account;- manages and maintains motorway sections based on granted construction concessions.14By enforcing developmental documents, the State maintains strategic supervision of the development ofmotorways by determining new sections and deadlines for opening newly built sections to traffic.annual report 2011 darsMCRSA-1 determines the status, tasks and obligations of DARS d.d. and regulates real property rights in connectionwith motorways. Under this Act, DARS d.d. has been transformed into a concessionaire that takesover all financial obligations related to the construction of new motorway sections. MCRSA-1 also stipulatesthat DARS d.d., in the name of the Republic of Slovenia and for its account, performs individual tasks in relationto spatial planning and integrating motorways in the environment, as well as tasks in relation to acquiringreal property for the requirements of motorway construction. The Act also stipulates that DARS d.d. willcontinue with the construction of motorways and expressways that were initiated prior to the entry intoforce of MCRSA-1, and that it will continue to manage and maintain the existing motorways and expresswaysin the Republic of Slovenia.

Table 1: Key performance data by yearKey performance data in EUR Year 2007 Year 2008 Year 2009 Year 2010 Year 2011Total revenue 212,591,309 241,837,168 272,329,357 316,615,824 336,538,471Total expenses 198,884,469 227,052,630 259,421,061 278,327,509 305,730,681Net sales revenue 208,879,897 237,907,159 266,050,392 301,412,873 310,772,380Operating expense 198,855,297 226,984,620 259,366,619 205,792,943 228,906,759Concession fees 122,637,201 142,385,612 169,447,153 0 0Operating profit/loss 12,268,914 13,289,015 11,687,109 108,485,776 102,262,961EBITDA 20,343,174 21,575,090 21,189,454 223,979,429 261,146,284Net profit/loss for the period 10,504,137 11,499,906 10,161,585 30,463,365 24,609,552Share capital 212,823 212,823 212,823 2,319,866,345 2,319,866,345Equity as at 31 December 49,023,704 55,271,542 55,413,862 2,402,580,775 2,427,190,327Total value of assets as at 31 December * 5,127,370,135 5,664,712,555 5,935,788,392 5,611,218,851 5,529,053,959Balance of debt as at 31 December 2,260,844,842 2,685,098,254 2,947,416,960 2,998,506,697 2,931,830,772Repayment of debt - principal 58,764,151 62,172,986 62,614,691 133,910,263 66,675,925Payment of interest ** 81,174,046 108,472,971 91,263,756 79,015,798 79,275,822* Data for the 2007-2009 period refer to the assets of DARS d.d. and assets of the RS provided for management.** The data refer to actual outflows for interest in the individual year.Indicators Year 2007 Year 2008 Year 2009 Year 2010 Year 2011Operating margin 5.9% 5.6% 4.4% 36.0% 32.9%EBITDA margin 9.7% 9.1% 8.0% 74.3% 84.0%Net margin 5.0% 4.8% 3.8% 10.1% 7.9%Return on equity (ROE) 23.5% 22.1% 18.4% 2.5% 1.0%Number of employees Year 2007 Year 2008 Year 2009 Year 2010 Year 2011Year end 1,128 1,209 1,250 1,247 1,249AUKN expectations regarding some important business indicators of DARS d.d. are listed in the documententitled ‘Recommendation and Expectations of the Capital Assets Management Agency of the Republic ofSlovenia Regarding Companies with State Assets’. It is evident from the recommendations, that AUKN isexpecting a 2-per cent return on equity (ROE) by 2015.15annual report 2011 dars

Graph 1: Movement in revenue and expenses of DARS d.d. in the 2007-2011 period350300250200212.6198.9241.8227.1272.3259.4316.6278.3336.5305.7150100In € million5002007 2008 2009 2010 2011RevenueExpensesGraph 2: Movement of net sales revenue and operating profit before depreciation of DARS d.d. in the 2007-2011 period350300250208.9237.9266.1301.4224.0310.8261.120015016100annual report 2011 darsIn € million50020.321.621.22007 2008 2009 2010 2011Not sales revenueEBITDA

Graph 3: Debt balance (31 December), principal repayment and interest payment in the 2007-2011 periodRepayments in EUR million140120100806040200133,9108,591,381,279,079,366,758,862,262,62007 2008 2009 2010 20113,5003,0002,5002,0001,5001,0005000Debt in EUR millionDebt repayment - principal Interest payment Debt balance as at 31 DecGraph 4: Review of the revenue of DARS d.d.4% 2% 1% 1%6% 2% 1% 1% 1%Revenue from tollsOther sales revenue20102011Revenue from rentFinancial revenueOther revenueRevenue from easmentRevenues from closures and extraordinary freight transportsRevenue from the lease of optical fibres/telecommunications17Other sales revenue92%89%Revenue under the Agreement on the Performance of Tasksannual report 2011 dars

MISSION, VISION, VALUES AND STRATEGICORIENTATION18annual report 2011 darsMissionWe ensure the socially responsible and efficient construction, management and maintenance of motorwaysand other infrastructure networks in the Republic of Slovenia, and provide the conditions for their safe use.Through the systematic development of new business ideas, we encourage the continued growth and developmentof DARS d.d. and its employees.VisionEach year, DARS d.d. becomes more successful and more market-oriented learning company which will developand manage modern infrastructure networks, and which operates for the benefit of all stakeholders.Core valuesResponsibilityWith a responsible attitude to ourselves and society, we fulfil all our assumed work commitments and endeavourto meet our objectives qualitatively with our users in mind.Cost effectivenessWe act with the care and diligence of a good manager, fulfilling our goals in a qualitative, timely and costeffectivemanner.InnovativenessWe promote and continually develop innovative approaches to our work; creative thought is our guide, becausewe know that this is the only way to develop innovative solutions with high added value for our customers,employees, the company and its owner.TransparencyOur business and operations are transparent and equitable for all stakeholders and in accordance with theapplicable regulations and our Code of Ethics.

Through the professional and responsible performance of ta sks, the Managementand all employees of the Company devote their best efforts tofulfilling the requirements and expectations of clients, the owner, employees,the environment, and society. Our business success is not left tochance, but is carefully planned, managed and supervised.Strategic orientationStrategic partnerships with stakeholdersThe Company systematically endeavours to develop strategic partnerships with all stakeholders to provide uswith adequate conditions for optimum performance and long-term growth and development.Effective debt managementThe Company ensures stable and sustainable servicing of its obligations regarding debt (effective financialengineering for the successful management of debt).Ensuring a smooth flow of traffic and safety on motorway networksThrough a professional approach and based on objective analyses, we ensure a smooth flow of traffic andsafety on motorways and other road infrastructure, and improve our organisation and operational excellencein a continuously measurable and financially viable way.Systematic development and implementation of new ideasWe strive to develop new, market-oriented programmes with high added value in a systematic and sustainablemanner.Effective management of resourcesWe are endeavouring to manage all the resources of our business system as efficiently as possible - personnel,material, financial and information.Integrated management system policyThrough the professional and responsible performance of ta sks, the Management and all employeesof the Company devote their best efforts to fulfilling the requirements and expectations of clients, theowner, employees, the environment, and society. Our business success is not left to chance, but is carefullyplanned, managed and supervised. We are committed to the continuous improvement of business processes,with an emphasis on preventative action.Our goal is good quality, environmentally friendly and comprehensive services. This goal is being achieved inthe following ways:- by making responsible decisions based on facts,- by creating favourable conditions and relationships within and outside the Company,- by encouraging employee innovation,- through consistent compliance with legislation, other mandatory requirements and development guidelines,- through the careful selection of qualified partners and other external contractors,- by supporting the development of the profession and acquiring new knowledge,- through active communication with the public and- by committing ourselves to environmental protection and friendly mutual relations.The Management Board of the Company diligently strives, together with its employees, to use their best efforts,and through personal example, achieve set goals.19annual report 2011 dars

MOTORWAYS AND EXPRESSWAYS IN THE RSAND TRAFFIC LOADSIn 1994, under a special agreement, the Republic of Slovenia transferred to DARS d.d. the management andmaintenance of all constructed motorways and infrastructural facilities and devices on them. DARS d.d. thusreceived the 198.8 kilometres of two-lane and four-lane motorways and expressways, and 67.5 kilometres oflink roads constructed thus far.Through the implementation of the NMCP, the motorway network managed and maintained by DARS d.d.also began to expand. By the end of 2011, DARS d.d. was responsible for the management of 606.6 km ofmotorways, 163.4 km of link roads, 22.3 km of turn-offs and 9.3 km of other connecting roads.Slovenia has a vignette tolling system for light vehicles, and an open and closed tolling system for heavy dutyvehicles.20The vignette tolling system is designed for vehicles whose maximum allowable weight does not exceed 3,500kg, regar dless of the maximum weight of the trailer. Purchase of a vignette is a prerequisite for the use ofmotorways and expressways under the administration of DARS d.d.Table 2: Length of the network managed and maintained as at 31 Decemberannual report 2011 darsLength of the network managed and maintainedYear 2007 Year 2008 Year 2009 Year 2010 Year 2011by DARS d.d. as at 31 Dec (in km)Motorways (tunnels not included) 438.245 527.728 567.129 582.456 582.456Turnoffs 13.351 16.763 21.345 22.254 22.254Other connecting roads 9.297 9.829 10.416 9.306 9.306Link roads 128.592 149.616 158.435 163.399 163.399Tunnels 17.958 20.435 24.110 24.170 24.170Total length of motorways 456.203 548.163 591.239 606.626 606.626

Table 3: Motorways and expressways managed by DARS d.d.A1A2Status – 31 Dec 2011 (in km)Šentilj–Dragučova–Maribor–Slivnica–Celje–Trojane–Ljubljana (Zadobrova–Malence–Kozarje)–Postojna– Razdrto–Divača–Črni Kal–SrminKaravanke tunnel–Lesce–Podtabor–Kranj–Ljubljana(Kozarje)–on A1–Malence–Ivančna Gorica–Bič–Pluska–Trebnje–Hrastje–Novo mesto–Kronovo– Drnovo–ObrežjeLength of MWand EW (A)Length ofturnoffsLength of linkroadsLength of Closed systemother roads for vehiclesover 3.5 tOpen systemfor vehiclesover 3.5 tToll roads forvehicles over3.5 tNon-toll roadsfor vehiclesover 3.5 t245.266 11.782 71.246 0 96.666 141.655 238.321 6.945175.475 4.933 44.936 4.866 7.438 140.752 148.190 27.285A3 Divača (Gabrk)-Sežana east - Fernetiči 12.246 0 5.131 2.724 12.246 0 12.246 0A4 Slivnica–Draženci [–Gruškovje*] 20.750 4.440 6.530 0 0 20.600 20.600 0.150A5Maribor (Dragučova)–Lenart–Senarska–Vučjavas–Murska Sobota–Dolga vas–Lendava–Pince79.574 1.099 15.663 0 0 79.574 79.574 0H2 Pesnica–Maribor (Tezno) 7.200 0 3.590 0 0 0 0 7.200H3 Ljubljana (Zadobrova–Tomačevo–Koseze) 10.222 0 6.849 0 0 4.533 4.533 5.689H4Razdrto (Nanos)–Vipava–Ajdovščina–Selo– Šempeter–Vrtojba42.117 0 4.837 1.716 19.203 22.914 42.117 0H5 Škofije–Koper (Škocjan) [–Dragonja*] 7.833 0 2.153 0 0 0 0 7.833H6 Koper (Škocjan)–Koper (Žusterna) [–Lucija] 1.880 0 1.509 0 0 0 0 1.880H7 Dolga vas–Hungarian border 4.063 0 0.955 0 0 0 0 4.063Total MW and EW 606.626 22.254 163.399 9.306 135.553 410.028 545.581 61.045* Segments underconstruction or those that will be constructed will be handed over to DARS d.d. for management.An open and closed tolling system is in use for vehicles whose maximum allowable weight exceeds 3,500 kg.Tolls on the 545.6-kilometer network are paid directly, namely in the classic manner (with payment cards,cash) or electronically (DARS card / DARS Transporter card and ABC tag). Heavy duty vehicles, whose maximumallowable weight exceeds 3,500 kg, are not tolled on the Ljubljana bypass section, the Maribor bypassroad, coastal roads, or the northern part of the Gorenjska section, because construction of the tolling stationshas been suspended.For DARS d.d., traffic loads mean more revenue from toll col lection, but at the same time they represent aburden for the Company’s business operation in terms of motorway main tenance.21During the period of implementation of the Resolution on the National Motorway Construction Programmein the Republic of Slovenia which was the time of accelerated construction of the motorway system in theRepublic of Slovenia, i.e. in period after 2004, traffic on Slovenian motorways and expressways markedlyincreased and continued to do so until 2008. After 2009, the growth in traffic slowed, with a smaller increasein traffic again being noticeable on Slovenian motorways and expressways.Personal vehicle traffic on motorways and expressways still showed an average increase of 3% in 2011. Thehighest growth was recorded for the Pomurje leg, with personal vehicle traffic increasing by 6.2%, and theDolenjska leg, where it increased by 5.5%.annual report 2011 dars

Graph 5: Index of the number of crossings in 2011/2010 for toll classes R3 and R4 classes at all toll stations120.0110.0Index no. of crossings100.090.0Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. .No. of crossings R3 No. of crossings R4 No. of crossings R3 and R4In 2011, the number of crossings at toll stations for toll class R3 decreased by 2.5% in comparison to thenumber of crossings in 2010, while the number of crossings at toll stations toll class R4 increased in 2011 by3.2%. The total number of vehicle crossings from toll classes R3 and R4 increased by 2.0% (by 2.1% on thecoastal leg, 3.1% on the Štajerska leg, 0.3% on the Ljubljana leg, and 2.8% on the Gorenjska leg).The ratio of crossings by users on motorways using electronic media employing the ABC system and manualtoll collection also changed considerably in 2011, (the share of crossings using the ABC system was 39.3% andthe share using manual toll collection 60.7%). The total number of crossings using the ABC system increasedby 68.1% in comparison to 2010 (and by 106.1% for the toll class R3 and 64.7% for the toll class R4), which isreflected in the increased transition of users of motorways to contactless payment of toll. Consequently, thetotal number of crossings using manual toll collection fell by an average of 18.7% (14.3% for toll class R3 and20.0% for toll class R4).Graph 6: Collected toll index (for toll classes R3 and R4) in 2011/2010 by motorway section120.0110.022annual report 2011 darsCollected toll Index100.090.0Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.Primorska Štajerska Ljubljana Gorenjska

Figure 1: Motorway system in the RS, December 2011Avtocestni sistem v Republiki SlovenijiMotorway system in the Republic of SloveniaMADŽARSKA /HUNGARYBovecKranjska GoraJESENICEpredor / tunnelKaravankeA2RadovljicaLjubeljVrbaTržičPeračicaAVSTRIJA / AUSTRIADravogradSlovenj GradecVelenjePesnicaMARIBORH2SlivnicaSlovenska BistricaA1ŠentiljA1GI-2LenartZrkovska c.Ptujska c.A5A4PTUJGI-2Hajdina MarkovciA5GorišnicaMURSKA SOBOTABeltinciOrmožA5LendavaDolga vasH7PincePodtaborITALIJA / ITALYTolminIdrijaA2KRANJŠkofja LokaŠentvidKosezeA1KamnikVodiceDomžaleH3LJUBLJANAA1TrojaneLitijaTrbovljeA1ŽalecLaškoCELJEDramljeMMPGruškovjeHRVAŠKA / CROATIAVRTOJBAJADRANSKOMORJEJagodjeLucijaNOVA GORICAIzolaH6DRAGONJAH4FERNETIČIFERNETTIH5ŠkofijeKOPERSEŽANAAJDOVŠČINAA3VipavaDivačaA1RebrniceNanosA1LogatecVrhnikaPOSTOJNAPivkaIlirska BistricaJELŠANEA1A2GrosupljeTrebnjeIvančna GoricaPluskaPonikveHrastjeA2NOVO MESTOŠkocjanKronovoLešnicaRibnicaMetlikaKočevjeČrnomeljPetrinaKrškoA2BrežiceObrežjeLEGENDA/LEGENDzgrajene avtoceste, hitre ceste in druge javne cesteconstructed motorways, expressways and other public roadsodseki, na katerih se v letu 2012 gradnja nadaljujesections on which the construction will continue in the year 2012odseki v gradnji po letu 2012sections under construction after the year 2012

CP TOROVOFigure 2: Average annual daily traffic at selected counting locationsAADT45.00045,000 CP TOROVO45.00030,00020,00040,00045,000 CP 45,000 KOMPOLJE40.000 CP VRANSKO14,00040,00040.000 CP TOROVOCP VRANSKOCP TOROVO CP DOBCP VRANSKO40,00018,000 CP VIDEŽ40.000 CP 40,000 KOMPOLJECP 35.000 DRNOVO35,00040,00025,00012,00035,00035.00035,00016,00035.00035,00035,00030.00030,00030,00030.000 30,00014,00030.00030,00020,00010,00030,00025.00025,00025,00025.000 25,00012,00025.000 25,00025,0008,00020,00015,00020.00020,00020.00010,00020,00020.000 20,00020,0008,0006,00015.00015.000 15,00015,00015.00015,00010,00015,00015,0006,00010,00010,00010,0004,00010.00010.00010.00010,0004,00010,0005,0005.0005,0002,0005,0005.000 5,0005,0002,0005.000 5,0000 00000000002006 2007 2008 2009 2010 20112006 2007 2006 2007 2008 2009 2010 20112004 2005 2006 2007 2004 2008 2005 2009 2006 2010 2007 2008 2009 2004 20102005 2006 2007 2004 2008 2009 2005 2004 20082010 2006 2005 2007 2006 20092008 2007 20102009 2004 2008 20112010 2005 20092006 20102007 2008 2009 2004 2010 2005 2006 2007 2008 2009 20102004 2005 2006 2007 2008 2009 2010PLDPPLDPPLDPPLDPPLDPPLDPPLDPPLDPPLDPPLDP60,00030,00060,00060,00030,00060,000CP LOGCP TEPANJECP PREPOLJE CP LOGŠMARJE SAP ACCP TEPANJE50,00025,00016,00050,00050,00025,00050,00014,00040,00020,00012,00040,00040,00020,000Šentilj40,000 MURSKA SOBOTA10,00030,00015,00030,00030,00015,00030,0008,000Dolga vas20,00010,0006,00020,00020,00010,00020,000 CP DRAGOTINCILenartBeltinci4,000DravogradCP PESNICA10,0005,00010,0002,00010,0005,00010,000LendavaVučja vas000000Sp. Senarska 0MARIBORPince2004 2005 Zrkovska c.2004 2005 2006 2007 2008 2009 20102004 2005 2006 2007 predor 2008 / tunnel 2009 2004 20062010 2005 2007 2006 2008 2007 20092004 2008 20102005 20092006 20102007 2008 2009 2004 2005 2006 2007 2008 2009 20102004 2005 2006 2007 2008 2009KaravankeSlovenj GradecPtujska c.Kranjska GoraSlivnica20,00045,00020,00014,00045,000CP PREPOLJE 14,00018,000 CP VIDEŽCP KOMPOLJE40,00018,000 CP VIDEŽCP DRNOVOCP KOMPOLJECP DRNOVO40,000CP HRUŠICA12,000PTUJ 12,000 Gorišnica16,00035,00016,000 Ljubelj35,000JESENICEOrmož14,000Slovenska BistricaHajdina30,00014,00010,00010,00030,000Markovci12,00012,00025,000Vrba8,00025,0008,00010,00010,00020,000Tržič20,000 Velenje8,000Bovec8,0006,0006,00015,000Radovljica15,0006,0006,000 Peračica4,0004,0004,00010,0004,00010,000CP TEPANJE2,0005,0002,0002,0005,000CP Slov. Konjice2,000000 Podtabor00Gruškovje 02004 2005 2006 2007 2008 2009 20102004 2005 2006 2007 2008 2009 2004 2010 2005 2006 2007 ŽalecDramljeKRANJ20042008Kamnik 20052009200620102004 2005 2006 2007 2008 2009 20102007 2008 2009 20102004 2005 2006 2007 2008 2009 2010CP TOROVO45,00030,00045,00040,000CELJE40,000CP TOROVOCP TolminVRANSKO PREPOLJECP KOMPOLJE DOBCP PREPOLJE CP TOROVOCP VRANSKO40,00040,00035,00035,00016,00025,000Škofja Loka CP LukovicaCP VRANSKO 16,00035,00035,00030,000 14,000CP Krtina14,000TrbovljeLaško30,00030,00020,00030,000DomžaleCP Blagovica25,000 12,00012,00025,00025,00010,00025,00010,00020,00015,00020,00020,000Šentvid20,0008,0008,00015,00015,00015,0006,00010,0006,00015,000Koseze4,000Litija4,00010,00010,00010,00010,0005,000 LJUBLJANA5,0005,000 2,0002,0005,0005,0000000IdrijaCP LOG002004 2005 2006 2007 2008 2009 20102004 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 20102004 2005 2006 2007 2008 2009200420102005 2006 2004 2007 2005 2008 2006 2009 2007 20102008 2009 20102004 2005 2006 2007 2008 2009 2010NOVA GORICACP Vrhnika70.000Grosuplje60,000 CP LOG30,00060,00060,00035.000 30,000VRTOJBACP LOG CP DrnovoCP TEPANJE45,000 CP LOGCP TEPANJE45,000 30,00030,00040,000AJDOVŠČINAŠMARJE SAP ACPluska40,00060.000CP TOROVOCP LogatecIvančna Gorica50,000 Škocjan CP VRANSKO25,000CP DOB50,000CP TOROVO25,000CP VRANSKOCP DOB40,000 50,00030.00040,00035,00025,00035,00025,00050.000 35,000CP BAZARA35,000CP DOB40,00025.00040,00020,000 30,00040,000Ponikve30,000 CP KRŠKO Brežice20,00030,00030,000 20,00020,00040.000KronovoVipavaHrastje 30,000 25,00020.00030,00025,00015,00025,00015,00025,000 30,000Obrežje30.00020,000CP Unec 15,00020,00015.000 15,00020,00020,00020,00020,00010,00020,00010,00020.000 15,00015,000Rebrnice CP RAZDRTO15,000 10,000Novo mesto 15,00010.000 10,000POSTOJNA10,0005,0005,00010,000 10,00010,00010.000 10,00010,0005,0005.000 5,0005,000CP DANE5,00005,0005,000 0Nanos000RibnicaSEŽANACP Postojna00000 2004 2005 2006 2007 2008 2009 201002004 2005 2006 2007 2008 2009 2010002006 2007 2008 2009 2010 20112004 2005 2006 2007 2008 2009 2010FERNETIČI2004 2005 2006 2007 2008 2009 20102004 2005 2006 2007 2008 20092006 2007 2008 2009 2010 20112004 2005 2006 2007 2008 2009 20102004 2005 2006 2007FERNETTICP Senožeče2008 2009 20102004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 20102004 2005 2006 2007 2008 2009 20102004 2005 2006 2007 2008 2009 2010PivkaCP Divača20,00045,00020,000 60,00030,00045,00060,000 14,000 60,00030,00030,000Metlika60,000Kočevje18,000 CP VIDEŽCP KOMPOLJE40,00040,000CP VRANSKOCP DOBCP LOGCP TEPANJEŠMARJE SAP AC18,000CP VIDEŽ LOG40,000 CP CP TEPANJE KOMPOLJECP ŠMARJE DRNOVO SAP AC12,00016,000 50,00050,00016,00035,00025,00050,00025,00050,00035,00035,000JADRANSKO25,000 CP VIDEŽ14,000Škofije14,000CP Kozina10,00030,00040,00030,00020,00030,00040,000 40,000MORJE20,00012,000 20,00040,00012,000Ilirska BistricaČrnomelj25,00025,00025,0008,00010,00010,00030,00015,000 Izola30,00015,00030,00020,00030,00020,00020,00015,0008,000Jagodje6,0008,000KOPER15,00015,00020,000 6,00020,0006,00015,000Lucija 10,00020,00010,00020,0004,00010,00010,0004,0004,00010,00010,00010,0005,00010,0002,0005,00010,000 5,0002,0005,00010,0005,0002,0005,000JELŠANEPetrina000000000DRAGONJA02004 2005 2006 2007 2008 2009 20102004 2005 2006 2007 2008 2009 20102004 2005 2006 2007 2008 2009 2010200420042005200520062006200720072008200820092009201020102004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 20102004 2005 2006 2007 2008 2009 20102004 2005 2006 2007 2008 20092007 2008 2009 20102004 2005 2006 2007 2008 2009 20102004 2005 2006 2007 2008 2009 2010AADTPLDPPLDP PLDPPLDPPLDPPLDPPLDPPLDPPLDP2,00002004 2005 2006 2007 2008 20092004 2005 2006 2007 2008 2009 201020.00020,000 CP VIDEŽ30,00045,00060,00040,00020,00030,00045,000CP CP VRANSKO40,000TEPANJE CP TOROVOSAP ACCP DOB18,000 CP VIDEŽCP KOMPOLJE16,00045,00060.000 ŠMARJE SAP AC14,00030.000 CP DOB18,000 CP VIDEŽCP KOMPOLJECP DRNOVO35,00025,00025,00035,00014,00040,00040,00050.000 50,00012,00025.00015.000 16,00035,00016,00035,00012,00030,00014,00020,00030,00040,00014,000 10,00030,00040.00020.000 20,00030,00010,00012,00025,00012,00025,00025,00025,0008,0008,00010.000 10,00015,00030.000 30,00020,00010,00015.000 15,00020,00020,000 6,00020,0008,0008,000 6,00010,00015,00015,000 4,00020,00015,00010,00015,0006,00020.0006,00010.0005.00010,00010,0004,0004,00010,0004,00010,000 2,0005,00010,0005,0002,0005,0005,000010.0005.0005,0002,000 2,0005,0000002004 2005 2006 200702008 2009 0 2010000000002007 2008 2006 2004 2009 2005 2007 2010 20062008 2007 2009 20082004 2010 2009 2005 2010 2004 20062011 2005 2007 2006 2008 2007 2009 2004 2008 2010 2005 2009 2006 2010 2007 2006 2004 2008 2005 2009 2007 2006 2010 20042008 2007 2005 2009 2008 2006 2004 2007 2009 2010 2005 2008 2006 20112009 2007 2010 2008 2009 2010 2006 2004 2005 2007 20062008 20042007 2005 2009 2008 2006 2009 20102007 201020112008 2009 20102004 2005 2006 2007 2008 2009 2010AADTPLDPPLDP02004 2005 2006 2007 2008 2009 2010PLDPPLDPPLDPPLDPPLDPPLDPPLDPAADTPLDPPLDPPLDPCP PREPOLJEAADTPLDP02004 2005 2006 2007 2008 2009 2010PLDPPLDPPLDPPLDPPLDPPLDP PLDPPLDPPLDPPLDP0AADTPLDPPLDPPLDPPLDPAADTPLDPPLDPPLDPPLDPPLDPPLDPPLDPPLDPPLDPPLDP30,00025,00020,00015,00010,0005,0000CP DOB18.000 PREPOLJE AC16.000 CP PREPOLJE14.000 16,00014,00012.00012,00010.00010,0008.0008,0006.0006,0004.0004,0002.0002,000002004 2005 2006 2006 2004 2007 2005 2007 2008 2006 2009 2008 200720102009 2008 2009 2010 20102011AADTŠMARJE SAP ACPLDPAADTPLDP PLDPPLDPPLDP PLDPAADTPLDPPLDP5,000014.000 14,00016,00012.000 12,000 14,00012,00010.000 10,00010,0008.000 8,000 8,0006.0006,0006,0004,0004.000 4,000 2,0002.000 2,00000 02004 2005 2006 2007 2008 2009 2010CP PREPOLJECP DRNOVOCP DRNOVO2004 2005 2006 2007 2008 2009 20102006 2007 2008 2009 2010 20112004 2005 2006 2007 2008 2009 2010PLDP PLDPPLDP60,000CP LOGCP PREPOLJE30,000CP TEPANJE60,000ŠMARJE SAP AC CP PREPOLJE

KEY BUSINESS EVENTS IN THE 2011BUSINESS YEARFebruaryThe Government of the RS adopted the Decree on the national spatial plan for the Jeprca–Stanežiče–Brodconnecting road.The Ministry of the Environment and Spatial Planning issued the permit for the motorway section betweenLendava and Pince and the expressway section up to the IBCP Dolga vas.MarchThe Supervisory Board of DARS d.d. adopted the Company’s Business Plan for 2011.The 1 st session of the General Meeting of DARS d.d. was held in March 2011, in which the sole owner decidedon:- the capital increase of DARS d.d. through the in-kind contribution from Article 18 of MCRSA – 1. The entryof the capital increase was implemented on 31 March 2011 in accordance with Article 25 of MCRSA-1,with the increased share capital already disclosed in the Balance Sheet for 2010;- the adoption of the new Articles of Association of DARS d.d., which was entered into the court registeron 31 March 2011;- distribution of a portion of the accumulated profit of DARS d.d. from 2009 in the amount of EUR 8.2million. The accumulated profit was allocated to other revenue reserves.AprilIn accordance with the Protection against Natural and Other Disasters Act, other relevant legislation and internalregulations of the company, DARS d.d. announced its protection and rescue plans in the event of massiveaccidents on motorways and expressways for the areas of nine motorways maintenance bases (Hrušica,Kozina, Ljubljana, Maribor, Murska Sobota, Novo mesto, Postojna, Slovenske Konjice and Vransko).25annual report 2011 dars

MayOn 6 May 2011, the European Commission issued Decision No. C(2011) 3248 on the granting of financialassistance by the European Union for projects of common interest for obtaining the building permit for theDraženci-IBCP Gruškovje motorway section.JuneThe government adopted an amendment to the Action Plan for the introduction of an electronic tollingsystem in free-flow traffic, which the ministerial panel adopted on 26 November 2009. At the same time, itordered the MT and DARS d.d. to continue implementing activities for the introduction of electronic freeflowtoll collection in accordance with the contextual and time constraints in the amended Action Plan.JulyThe 2 nd session of the General Meeting of DARS d.d. was held in July 2011, in which the sole owner decided on:- use of the accumulated profit for 2010 in the amount of EUR 14.5 million. The accumulated profit wasallocated to other revenue reserves;- the granting of discharges to the Management and Supervisory Boards of the Company for the 2010business year,- the appointment of the certified auditor for the audit of the financial statements for the 2011 businessyear,- payment to the members of the Supervisory Board and its committees for their work and session fees.The Government of the RS adopted the Decree on the national spatial plan construction of the Šmarje-Sapconnecting road on the Malence-Šmarje-Sap motorway section.AugustDARS d.d. published an international tender for the implementation of the project for the establishment andoperation of an electronic free-flow toll collection system.OctoberDARS d.d. commissioned the direction lane of a 2.4-kilometre long section of the Gorenjska motorway betweenPeračica and Potabor in the direction Radovljica-Kranj.26DecemberDARS d.d. obtained the ISO 14001 environmental management certificate and the certificate of a familyfriendlycompany.annual report 2011 dars

BUSINESS RISKSThe Company is aware of the consequences of various types of risk; therefore, much attention is devoted tothe timely detection of risk and its management. The risk management process has become a strategic partof the Company’s business, so it is especially proud of its successful management of risk in 2011. The mostimportant objective was to reduce the negative effects of the crisis on the results of business processes; atthe same time, the Company recognised dangers and associated risks, monitored them throughout its businessprocesses and took timely action so as to ensure minimal deviations from planned results.The following risk types were managed:- impact of external factors (macroeconomic position, public relations),- risks associated with legislation and regulations,- risks associated with investment projects and the fulfilment of contractual provisions,- risks associated with ensuring resources,- IT support for business processes,- environment protection,- occupational health and safety.27Impact of external factorsThe Company concurrently monitors all economic flows and actively adjusts its operations to new situationsin the economic and political spheres. The external risk related to legislation and regulations is managedthrough the monitoring of legislation, consultations and the submission of proposals already in the initialphase of drafting. The Legal Office of DARS d.d. operates in all areas of the Company and particularly in theareas of dispute management and coordination. The Office participates in the resolution of matters of dispute,review of contracts and preparation of internal acts. The Company also participates in the preparationof price lists and prepares the recommended methodology for determining toll prices, modifications of tollprice and methods of toll payment. Potential loss due to the Company’s negative public image is difficult tomeasure and even harder to repair. Risks that could arise in connection with communication with variousannual report 2011 dars

segments of the public were managed by using appropriate communication strategies. Emphasis was placedon communications with both the external and internal publics.Risks associated with the non-fulfilment of contractual provisions in implementinginvestment projectsThe Company diligently monitors all information related to the operations of its business partners and preparesmeasures to prevent the impact of disadvantageous events on the Company’s operations (modificationsof contractual provisions, consensual terminations of contracts). Already during the contractor selectionprocedure within the public procurement procedure, the Company carefully examines the envisagedconstruction deadlines of individual projects, the payment conditions and guarantees, precisely preparestime schedules for concluding individual phases of construction and ensures quality negotiations. It reviewsthe eligibility of any changes in investment projects and their impact on costs and fulfilment of time schedules.It also regularly monitors investment costs, both regular ones and those that arise due to subsequentmodifications to a project. Supervision and accompanying activities are performed with the assistance ofcontractual partners (engineers).Risks associated with ensuring resourcesWhen purchasing goods and services, as a company liable to the provisions of the Public Procurement Act,all purchasing procedures must be implemented in accordance with public procurement procedures. Timelyplanning, an analysis of competition in the market, the careful design of tender documentation and an activerole as custodians of contracts are key measures in managing procurement risk (the risk of an inadequatesupply of goods or services, risk of uneconomic procurement, risk of non-implementation due to changedcircumstances, risk of delays in delivery or performance of services).IT support for business processesGreater IT support for business processes is increasingly associated with risk. The most important risks havebeen identified as the risk of interference with, or interrupted operation of, hardware, LAN, communicationconnections, system and application software, and risks associated with system security.28Risk management is ensured through the regular monitoring of risks and immediate responses to changes.Permanent IT operations systems (duplication of the most vital parts of IT-communication technology, operationsof the secondary database, duplication of communication channels) as well as safety measures for theprotection and security of IT systems against unauthorised interventions have been established. IndependentIT security assessments are one method used to identify potential threats. Risk arising from the operation ofthe information infrastructure is managed through the regular maintenance of software and hardware, communicationsand network connections, and control of changes in information systems development.annual report 2011 darsEmployeesEmployees are a key factor in the Company’s successful operation; therefore, each year it assesses the socialatmosphere in the organisation and adopts appropriate measures for improving the satisfaction of employees,the quality of the work environment, and increasing the level of team work. As the Company is awarethat the toll system will change in the future, subsequently leading to a decrease in the required workforce,it has adjusted the number of employees by engaging personnel through student services and for temporaryperiods.

Occupational health and safetyTraffic is increasing every year. As some users fail to observe the established signalisation, the Company’smaintenance and tolling system inspection workers have become increasingly endangered. The Company hastherefore developed its own methodology to estimate the probability of a particular accident event and itsconsequences and the probability of health problems arising among workers at specific work locations. Themajority of maintenance works and toll control is carried out alongside ongoing traffic and in areas aroundcarriageways. The Occupational Health and Safety Department manages the risk of accidents and injuries inthe workplace by implementing general education in the areas of occupational health and safety and otheractivities. Based on employee responses, the Company estimates that their knowledge and attitude in thisarea have improved and that the attitude of employees regarding their own safety has improved.Risks related to environment protectionRisks related to environment protection include the risk of inappropriate waste disposal, the risk of environmentalpollution and risks associated with protecting impact areas are becoming more and more important.The systematic management of environmental risks reflects the ecological awareness of employees. Accidentson motorways can have a negative impact on the environment; this is why it is important to reduce therisks of the emergence of accidents and to appropriately react when they occur. The probability of emergenciesis also reduced through preventative measures. Training and exercises for appropriate response guaranteeminimum impacts on the environment if such extraordinary events occur. By implementing appropriateactivities within the scope of motorway maintenance (cleaning of flood control reservoirs etc.), collectingand sorting waste, and by constantly controlling carbon monoxide con centrations and visibility in tunnels,we contributed to reducing negative impacts on the environment and controlling the risks emerging in theenvironment.29annual report 2011 dars

FINANCIAL RISKSFinancial risks are risks that may negatively influence the ability to generate financial revenue, control financialexpenses, pre serve the value of financial resources, and control financial liabilities.By managing financial risks in DARS d.d., the Company endeavours to attain maximum stability of operationsand reduce exposu re to individual risks to an acceptable level. Most importantly, it focuses on maximallystabilising the cash flow for the settlement of liabilities arising from loans for motorway con struction.Table 4: Types of financial riskAssessed riskNo. Description of riskProbability ConsequenceDegree of riskRisk management (controls)1 2 3 4 5=3*4 630annual report 2011 dars12Risk of changes inexchange ratesRisk of changes ininterest rates1 1 13 3 93 Credit risk 2 3 64Credit risk of businesspartnersuse of natural protection by matching cash flows,regular monitoring of currency markets, hedgingwith appropriate financial instrumentsmonitoring interest rate fluctuations, negotiationswith credit institutions, hedging with appropriatefinancial instrumentsmonitoring and regular analysis of the Company’scredit portfolio2 2 4 monitoring exposure to individual partners5 Liquidity risk 2 2 4Probability: 1-small, 2-medium, 3-largeResult: 1-good, 2-mediocre, 3-badplanning needs for liquid funds, previously agreedloan facilities and overdrafts

Risk of changes in exchange ratesIn 2011, exchange rate fluctuation risks were predominantly hedged by means of natural protection, i.e. bymatching cash flows. This type of hedge is possible due to the small number of currencies used by DARS d.d.in its operations, as well as the fact that a large majority of its transactions are carried out in euros.Risk of changes in interest ratesAt the end of 2011, the Company had 26 long-term borrowings that were partly or entirely linked to thereference interest rate EURIBOR (6-month or 3-month rate). DARS d.d. did not incur any new debts in 2011.Part of the variable interest rate of long-term loans is hedged through the use of adequate derivatives withwhich the variable inte rest rate was changed into a fixed interest rate. According to the state on 31 December2011, 38.2% of the Company’s loans were based on a fixed interest rate, and 60.3% on a variable interestrate, while 1.5% comprised interest-free debt. By using derivatives, the Company hedged 41.3% of its creditportfolio against interest rate risks.In 2011, the European Central Bank raised its key interest rate from 1.0 to 1.5%; however, the key interestrate was again lowered to 1.0% by the end of the year. The value of the EURIBOR reference interest rate rosein the first half of the year and again began declining in the second half. In 2011, the Company completed theprocess of fixing the interest rate of a credit derivative transaction in the amount of EUR 50.0 million with theEuropean Investment Bank, which had a variable interest rate until 2010.A simulation of the influence of interest rate changes on financial expenses in 2011, considering the debt of DARSd.d. and the interest rate structure on 31 December 2011, shows that an increase or decrease of EURIBOR by 1percentage point would present an increase or decrease in financial expenses of approximately EUR 18 million.Credit risk of DARS d.d.Credit risk for DARS d.d. represents the possibility that the Company will not be able to settle obligationsarising from loans. Its basic source of funds for the repayment of obligations arising from loans in accordancewith MCRSA-1 includes revenue from toll collection, the amount of which also suffices to cover obligationsarising from loans. However, the credit portfolio is very diligently monitored, since negative changes in financialmarkets can rapidly change the amount of annual obligations arising from loans. Therefore, it is importantto enforce a tolling system in Slovenia that maximises revenue from tolls and enables the motorwaymanager to manage these revenues with the lowest possible costs. The risk is managed concurrently withthe management of interest rate risk.Credit risk of business partnersThe credit risk of business partners represents the possibility that receivables are only partially paid or not atall. DARS d.d. regular ly monitors outstanding receivables from individual business partners and, if necessary,takes appropriate action. This risk exists in connection with the sale of vignettes through sales agents andthe payment of tolls for vehicles over 3,500 kg using electronic media, where payment is made for the previousmonth on the basis of an issued monthly invoice. The level of this risk and the nature of the Company’sbusiness operations currently do not require any limitation of maximum exposure to individual partners, theactive management of receivables or credit rating calculations, but hedging instruments are required for aspeci fic segment of customers.Liquidity riskIn 2011, risks linked to solvency were reduced through effective liquidity management and the formation of ahighly liquid investment portfolio. The Company assesses liquidity risk as moderate.31annual report 2011 dars

ANALYSIS OF BUSINESS PERFORMANCERevenue of DARS d.d.Table 5: Overview of the revenue of DARS d.d.32annual report 2011 darsType of revenue2011(in EUR)2010(in EUR)Index2011/2010Structural sharefor 2011Revenue under the Agreement on the Performance of Tasks 643,333 668,098 96 0%Tolls collected, rentals, motorway closures, extraordinary freight 330,526,387 313,610,621 105 98%transportation and other revenueRevenue from tolls 298,339,794 290,095,679 103 89%Revenue from leases 7,221,547 6,518,711 111 2%Revenue from closure and overweight load transportation 1,081,994 2,378,157 45 0%Revenue from easements 1,753,320 131,767 1,331 1%Revenue from the lease of optical fibre/telecommunication lines 1,008,136 1,011,992 100 0%Other sales revenue 724,255 608,469 119 0%Other operating revenue 20,397,340 12,865,847 159 6%Financial revenue 3,355,869 2,256,934 149 1%Other revenue 2,012,882 80,171 2,511 1%TOTAL 336,538,471 316,615,824 106 100%In the 2011 financial year, the total revenue of DARS d.d. amounted to EUR 336.5 million, reflecting a 6%increase over the 2010 figure. The growth in revenue was largely the result of the increased income fromtolls, which amounted to EUR 298.3 million, 3% higher than the 2010 figure. The reason for the increase inrevenue was primarily the increase in revenue from the sale of vignettes. Other operating revenue was alsohigher compared to 2010, the growth being attributable to increased revenue from funds received from the

EU and funds received from the co-financing of municipalities, which are transferred to income upon thereceipt of funds from accrued costs and deferred revenue in line with incurred costs (depreciation).Expenses of DARS d.d.Table 6: Overview of cost expenditures of DARS d.d.Type of revenue2011(in EUR)2010(in EUR)Index 2011/2010Structural share for2011Labour costs 33,670,414 32,840,366 103 11%Costs of materials and cost of goods sold 9,395,424 13,152,610 71 3%Cost of services 24,847,753 26,397,177 94 8%Write-offs 158,883,323 115,493,653 138 52%Other operating expenses 2,109,845 17,909,137 12 1%Financial expenses 76,689,689 72,328,103 106 25%Other expenses 134,233 206,463 65 0%TOTAL 305,730,681 278,327,509 110 100%The total expenses of DARS d.d. in 2011 amounted to EUR 305.7 million were 10% higher in comparison to2010. The increase in write-offs, which accounted for 52% of all expenses, was primarily the reason for thegrowth in expenses.Profit and lossThe net profit of DARS d.d. for the period 1 January to 31 December comprised EUR 24.6 million and reflecteda 19 per cent decrease over the result in 2010. The reason for the poorer business result lies primarily inthe growth of expenses due to write-offs.Table 7: Performance ratiosFinancing ratiosEquity financing ratio in %Long-term financing ratio in %Short-term financing ratio in %31 Dec 2011 31 Dec 2010equityliabilities43.90 42.82equity + provisions + long-term liabilitiesliabilities96.45 96.66short-term liabilities (including short-term accrued expenses and deferred revenue)liabilities3.55 3.34Fixed assets investment ratio in %fixed assets (at carrying amounts)assets97.44 97.23Long-term investment ratio in %fixed assets + long-term investments + long-term operating receivablesassets97.45 97.23Quick ratio in %liquid assets + short-term receivablesshort-term liabilities17.36 24.4233Current ratio in %Operating efficiency ratio in %Operating profit rate in %Net profit margin in %Net return on equitycurrent assetscurrent liabilitiesoperating revenueoperating expensesoperating profitoperating revenuenet profitrevenusnet profit for the periodaverage equity (without net profit for the period)69.22 81.96144.67 152.7230.88 34.527.31 9.620.01 0.03annual report 2011 dars

BUSINESS ACTIVITIES OF THE COMPANYTollingThe tolling of vehicles whose maximum allowable weight exceeds 3,500 kg (cargo vehicles) is performed at28 tolling stations. So-called frontal toll stations are located on traffic segments, while connecting roads possesslateral toll stations, which are smaller; three of these are automatic and double-sided. Tolling is basedon the payment according to the distance travelled in a single toll collection system, with a variety of paymentoptions.In tolling where vehicles must stop, motorway users pay tolls at toll stations in cash or through other paymentinstruments, whereby in tolling utilising the ABC electronic toll collection tags system, users can passthrough the toll station using the fast lanes of the ABC system at a speed of up to 40 km/h. They stop onlyoccasionally due to advance payments of tolls in cash lanes or at smaller toll stations which do not have specialfast lanes.34Since 1 January 2010, the tolling of cargo vehicles has also been implemented by emission categories, which isconsistent with the guidelines of the European directive. Ecologically cleaner vehicles are granted a discount.annual report 2011 darsThe tolling of vehicles with a maximum allowable weight of up to 3,500 kg (personal vehicles) is carried outon the basis of payment with respect to the time of use of the motorways, as proven by the purchase andinstallation of the appropriate vignette. The vignette system has been in force since 1 July 2008.Tolling of vehicles with a maximum allowable weight exceeding 3,500 kgIn 2011, tolls collected from cargo vehicles comprised EUR 161.4 million in revenue, a 1.4 per cent increaseover the figure in 2010, when revenue amounted to EUR 159.2 million.No specific changes were implemented in 2011 with regard to the tolling of cargo vehicles. All vehicleswhose maximum allowable weight exceeds 3,500 kg are tolled according to two toll classes, i.e. based on the

number of axles and also within the classification of three EURO emission classes. Vehicles falling within theEURO 3 emission class and higher are entitled to a reduced toll provided that they pay the toll using correctlyregistered electronic media (ABC tag or DARS card). At the end of 2011, 24,500 electronic media had beenregistered, adjusted for the differential payment of tolls, with slightly less than 60% comprising ABC tags andthe remainder DARS cards.Although the tolling of cargo vehicles through ABC electronic tags is not optimal, as the system was not envisagedfor the tolling of vehicles with maximum allowable weights exceeding 3,500 kg, it does enable thetolling of such vehicles without stopping, leading to their increasingly more frequent use. A total of 12,302plates were sold in 2011. Currently, over 27,000 are in use.In addition to the concurrent payment of tolls using cash or 12 different payment cards, users may also useprepayment or post-payment methods for paying tolls for cargo vehicles. Foreign users predominantly utilisethe toll prepayment method, which offers a discount when adding credit. Domestic users, in addition to usingthe prepayment system, also frequently utilise the toll post-payment method based on a direct contractwith DARS d.d., which, depending on the degree of use, also offers up to a ten per cent discount.In recent years, the Company has been confronted with more frequent lack of payment discipline in the postpaymentmethod, which it successfully managed to curb in 2011 through the changed toll price list of DARSd.d. The changed price list enabled stricter conditions in concluding post-payment contracts and in reactivatingelectronic media following the non-payment of toll.Sales of vignettesIn 2011, the Company observed a considerable growth in sales of seven-day (weekly) vignettes for two-trackvehicles in comparison to 2010, with 339,165 or 11% more vignettes sold. In total, 3,410,941 seven-dayvignettes for two-track vehicles and 38,361 for one-track vehicles were sold. A total of 1,087,487 monthlyvignettes for two-track vehicles were also sold, reflecting a 7.4% increase over 2010. The greatest revenuewas generated from the sale of annual vignettes for two-track vehicles with 840,839 sold in 2011, reflecting a0.3% decline. A total of 2,084 annual vignettes and 16,275 semi-annual vignettes for one-track vehicles werealso sold.In 2011, the sale of vignettes comprised EUR 136.9 million in revenue, a 4.5 per cent increase over the figurein 2010, when such revenue amounted to EUR 130.9 million. By the end of 2011, vignettes were being sold at955 sales points in Slovenia and 874 sales points abroad.Sales of vignettes at the Company’s own sales points comprise a significant share of vignette sales. In additionto sales at toll stations, the network of sales points at border crossings is also important, particularlyduring public and summer holidays. A total of 583,126 of all vignette types were sold at these sales points in2011, meaning that every tenth vignette is sold via the Company’s own sales network.35Sales of Austrian vignettes continued in 2011 at the Hrušica toll stations and were even expanded to anothersales point at the Gruškovje border crossing. A total of 107,230 Austrian vignettes were sold, the majority ofthem 10-day vignettes for two-track vehicles in the amount of 105,172.The Company again successfully carried out toll supervision in 2011. Toll supervisors issued 49,488 paymentorders, which also included payment orders based on new powers. In accordance with the Public Roads Actand Minor Offences Act, fines paid for minor offences are considered State revenues.annual report 2011 dars

Development of toll supervision and acquisition of additional powersAn important milestone in toll supervision are the new powers arising from the Act of rules on road transportand the Roads Act, which directly facilitate the provision of greater road safety. Toll supervisors have thusbeen granted authorisation to control traffic and supervise cargo vehicles at rest areas. Pursuant to the Ruleson vehicles with right-of-way and pilot vehicles, DARS d.d. is now entitled to use notification signalisation andblue lights, which provides toll supervision greater recognition and also enables supervision to be carried outin locations where this was previously not possible. The right to use blue lights also assists in regulating trafficin winter.The TCOC reviews suspicious events on fast lanes (e.g. the suspicion that a user will escape, inappropriateEURO emission class on electronic tags or use of non-transferable electronic tags in another vehicle). In theevent of an established offence, the TCOC issues a fine in the form of a payment order, but only if the tollequipment was operating 100 per cent reliably at the time of the offence. An application displaying the currentstatus of controllers, cash registers and peripherals at toll station lanes was designed for this purpose.Employee safetyAnti-burglary bars have been installed on all the windows of the Hrušica toll station and Gruškovje sales pointfor safety, with additional security features also installed at the Toll User Centre. This has reduced the possibilityof robberies or attacks on DARS d.d. employees in exposed areas.Employees in collecting tolls have received additional guidelines for self-protection to ensure greater safetyin work locations and guidelines on the use of technical security equipment. To improve work safety, pursuantto the new powers, all toll supervisors have been trained at the Police Academy and also undergone safedriving training.Updating toll system hardware and softwareIn 2011, a wide variety of activities associated with the updating of hardware and software were carried out:the cash registers at several DARS d.d. sales points were replaced in April and software adapted to sales andreclamation activities was created.Introduction of ETS in FTFIn November 2010, on the basis of the Action Plan for the introduction of an electronic tolling system infree-flow traffic, the Company signed a contract for the preparation and elaboration of documentation andimplementation of other expert services for implementing the establishment of the ETS in FTF project. TheGovernment of the Republic of Slovenia adopted the Action Plan in November 2009.36The ETS in FTF concept was completed in February 2011, while a prior information notice of the intendedimplementation of a public procurement contract for the establishment of ETS in FTF was published at theend of March. The Government of the Republic of Slovenia adopted an amendment to the Action Plan on 2June 2011, which partially affected the completion of the final investment and tender documentation.annual report 2011 darsThe investment and tender documentation were completed by the end of July; in early August, a publictender was published for the establishment and operation of a multi-lane electronic free-flow toll collectionsystem for motorways and expressways. Due to the filing of audit claims and consequently, changes in thetender documentation, the deadline for the opening of bids was moved from October 2011 to 2012.The Government of the Republic of Slovenia adopted a decision on 8 March 2012 directing DARS d.d. to stopall activities connected to the introduction of the new toll system.

Motorway maintenance and managementMotorway managementDue to the growth in personal and transit cargo traffic, the work of maintenance personnel is becoming anincreasingly greater obstacle to road users. It is practically impossible to carry out maintenance works withoutcongestion, particularly on the A1 motorway, where traffic is intense almost all day, while the majority of maintenanceworks cannot be carried out at night due to the hazard posed to road users and workers. On the otherhand, the increasing volumes of traffic require more comprehensive maintenance and reconstruction works.Maintenance works in 2011 were carried out in a reduced scope due to problems connected to public tendersfor the selection of contractors. The scope of regular maintenance comprised only urgent carriageway patchingworks over a total area of approx. 24,000 m 2 . Over 106,000 m of cracks in the asphalt were patched.For better traffic flow and less congestion, barriers were set up in periods of reduced traffic, i.e. at night,mostly from Saturday evening to Sunday morning. Maintenance works during the day are also planned outsideof peak periods.During the tourist season and holidays, maintenance personnel assisted in the regulation of traffic at temporaryvignette sales locations, which were set up at points of entry into the country. Closures of vignettelanes were also carried out for the purpose of controlling vignette usage. Motorway closures were regulatedby redirecting traffic to rest areas through the coordinated efforts of police officers and inspectors.Several projects were initiated in the area of work organisati on. In addition to the action plans of summerand winter maintenance, a great deal of attention was also dedicated to the rational consumption of grittingmaterials. DARS d.d. continued the GPS monitoring of cargo gritting vehicles, and provided instructions andtraining to drivers regarding gritting methods. The Company has GPS devices installed on some 190 vehicles(including those of toll inspectors). The Company also introduced the calibration of gritting vehicles uponevery change of gritting material.In 2011, the Company initiated procedures for the purchase of a machine for the removal of road markingsand a machine for cold plastic. It also provided additional security for its employees through the pilot installationof metal bumpers on transparent vehicles.Motorway managementThe Company’s tasks relating to motorway management were based on the Public Roads Act and otherregulations related to public roads and traffic safety.In 2011, there were also increasing numbers of requests received for interventions in the motorway bufferzones where DARS d.d. has the right of superficies on land, and there is also a growing number of issued projectrequirements and approvals of project documents. The trend of prohibited advertisements on increasinglylarger billboards erected in motorway and expressway buffer zones continues; therefore, the Companyalso focuses on warning owners about these (prohibited) actions and report individual cases of unauthorisedadvertising to the appropriate inspection office.Together with the Administration of the Republic of Slovenia for Civil Protection and Disaster Relief, the Companyinspected and adjusted accesses to the scenes of accidents for intervention vehicles. It also concludedand harmonised all safety and rescue plans in the event of large-scale motorway acci dents.Measuring devices on older external lighting facilities were replaced. The new measuring devices enable the morefavourable calculation of electricity consumption. Energy costs at these points were reduced by up to 20%.37annual report 2011 dars

Documentation for the regulation of mutual relationships between DARS d.d. and SODO d.o.o. have beenprepared, transferring constructed electricity facilities to the ownership and management of SODO d.o.o.International projects and programmesActivities under the framework of the EASYWAY programme continued, enabling the Company to acquire grantsfrom the European Union. The Company also participated in the working group for traffic content portals.DARS d.d. was also active in the ASECAP and PIARC associations and in ongoing activities with neighbouringcountries connected to the active management of traffic, assurance of traffic safety and other activities associatedwith motorway management.The Company also participated in the international project CIPS (SecMan), which examines potential hazardsthat could endanger facilities on motorways, and in the international project, TIP, part of which will includethe planning of interventions and activities to facilitate the coordination of terminals and intermodular hubsin Gorica and Vrtojba with the Vilesse-Gorica-Razdrto motorway axis.Traffic surveillance and managementKey tasks defined in a concession contract and maintenance and operational projects were carried out. Workwas carried out in accordance with the needs of regular maintenance and re-hauling works for electro-mechanicaldevices.The department supervises and manages traffic and organises and carries out maintenance works on electromechanicalequipment and systems which are classified as road devices by the Public Roads Act. The department’stasks also include re-hauling works on road devices and participation in the construction of roaddevices on new motorway sections and facilities.Areas for auxiliary activitiesThe Radovljica east and Radovljica west rest areas on the Gorenjska motorway began operating in 2011. Thetotal number of surfaces for auxiliary activities in the Slovenian motorway network has thus increased to 60and range from small rest stops to petrol and service stations which in addition to a petrol station also includea restaurant.Revenue in the amount of EUR 6.8 million was realised from contracts concluded for surfaces for auxiliaryactivities.38Real estate managementThe Company continued work involving the acquisition of land and other real estate, procedures for handlingapplications received for the divestment of surplus real estate managed or owned by DARS d.d., notificationto interested parties and the definition of various divestment possibilities.annual report 2011 darsThree calls for the submission of tenders for the divestment of real estate, comprising a total of 14 sets ofreal estate, were published in 2011. Purchase contracts for real estate in the total amount of EUR 0.4 million(exclusive of VAT) were concluded based on published tenders in 2011.Telecommunications marketingThe Company generated EUR 1 million in revenue from the advance purchase of optic fibres in 2011.It actively monitors the development of electronic communications and analyses the possibility of additionalservices, predominantly the lease of wavelengths and additional capacities. Regarding the offer of easementsfor the installation and operation of public mobile telephone base stations, the Company has prepared newannexes for the connection and use of electricity by mobile operators from supply points of DARS d.d.

Construction and reconstruction organisationSpatial planningIn 2011, the preparation procedures for 11 national spatial plans which had undergone various process stageswere implemented in the field of spatial planning and integration in the environment:− a supplementary proposal for the preparation of the National Spatial Plan for the Postojna/Divača–Jelšanemotorway section;− a technical construction elaboration for the study of variants for a national road at the Otiški Vrh–IBCPHolmec segment was prepared;− the first opinions on the proposal for the most favourable variant for the Koper–Dragonja expresswaywere obtained;− a preliminary design review for the project involving a national road at the Šentrupert–Velenje southmotorway section was implemented;− the opinion of the competent ministries on the suitability of environmental reports for the national roadat the Šentrupert–Velenje south, Velenje south–Slovenj Gradec south and Slovenj Gradec south–Dravogradmotorway sections with bypasses were obtained;− public presentation with public discussion of the draft of the national spatial plan for the national roadat the Velenje south–Slovenj Gradec south motorway section was implemented;− the Slovenian Government adopted the ‘Governmental Decree on Detailed plan of national importancefor Jeprca–Stanežiče–Brod state road’ and the ‘Governmental Decree on Detailed plan of national importancefor upgrading of the Šmarje-Sap junction on Malence–Šmarje–Sap motorway section’;− a study on the ensuring of parking areas for cargo vehicles along Slovenian motorways and expresswayswas prepared.In the processes of integrating motorways and expressways in the environment, the Company cooperatedwith the public and users within the scope of its jurisdiction and strove to find socially acceptable solutions.Project engineering and investment documentationTender documentation was prepared in 2011, and the decision of the European Commission to finance theproject documentation phase of DBP for the Draženci-IBCP Gruškovje motorway section from the TEN-Tfunds. The project engineering contract was signed at the end of September 2011.The tender for the design of the Jagodje-Lucija expressway, together with two longer viaducts and two tunnels,was republished. Contracts were signed for the tunnels, viaducts and the design of the route.The conceptual design project for additional anti-wind measures with a wind analysis was prepared, as wellas a strategy for controlling traffic flows and predictions of wind on the Razdrto–Vipava–Ajdovščina expresswaysegment.Construction supervision and organisationIn 2011, DARS d.d. organised project management for the additional construction of motorway sectionswithin the scope of its Business Plan for 2011.The right half of the Peračica-Podtabor motorway, a portion of the Mengeš bypass and Phase 2 of the southernAnkaran entry road were opened to traffic.Construction of the Koper-Izola section continued. Elaboration of the implementation project for the tunnelwas implemented in parallel with the construction of the Markovec Tunnel. A tender for the design of theelectro-mechanical equipment of the tunnel was also concluded.In 2011, DARS d.d. encountered a number of problems in realising projects, particularly because of bankruptciesor liquidity problems faced by leading Slovenian construction companies. As a result, constructionof the Pluska–Ponikve–Hrastje sections, the Mirenska valley connection, Mirna Peč connection andGorišnica–Ormož section was stalled. Work was therefore not concluded. Nevertheless, the prescribed postconstructionmonitoring and maintenance of habitats were implemented, as well as review of documentation(implemented works project, operation and maintenance project, road database), the acquisition offinished reports and evidence, reviews and the confirmation of construction books. Final accounts were also39annual report 2011 dars

prepared, as well as documentation for archiving and the monitoring of buildings within the warranty period.Legal property matters were regulated following final assessments.Reconstruction organisationConstruction workReconstruction work encompasses the implementation of investment maintenance works and maintenanceworks in the public interest in the area of carriageways, bridging structures and other structures and equipmentand investments within the existing infrastructure.Due to the extremely complex economic situation and continual complaints from providers who had notbeen selected, the Company concluded significantly fewer contracts for the implementation of works thanplanned, despite the fact that tenders were published for all projects envisaged in the plan.In 2011, 12.7 km of carriageways were reconstructed and seven partial reconstructions of bridging structureswere carried out. Smaller investment works and measures for preventing water retention on carriageways(gutter renovation works) were carried out on carriageways throughout the motorway network. The reconstructionof other buildings and facilities and investments included commencement of the reconstruction ofthe Pletovarje embankment with a pilot wall, replacement of delapidated protective fencing, the remedyingof small landslides, slopes and embankments, and completion of works on the Lopata south rest area, wherethe Company successfully completed the expansion and modernisation of the parking area for cargo vehicles.The documentation was elaborated for the project Noise barrier construction on five motorway sections inthe Republic of Slovenia, which is valued at approximately EUR 50 million. The project is included in the supplementedOperational Programme of Environmental and Transport Infrastructure Development.Electromechanical works and ITSThe following reconstruction and investment works were carried out for the renovation of existing motorwaynetwork equipment, increased traffic safety and equipping of motorways in accordance with new regulations(directives) and legislation which lie within the scope of the adopted Business Plan of DARS d.d. for 2011.The hydrant network inside and outside the Karavanke Tunnel was reconstructed, a co-financed monitoringcontrolsystem was installed and air volume gauges for the portal fans were supplied and installed. Thesupply and installation of carbon monoxide and visibility gauges, axial air velocity gauges in the Ločica andJasovnik tunnels and the rental and installation of an air velocity gauge in the Golovec Tunnel began. The upgradeof security devices for servicing and electricity areas with automatic fire extinguishers was completedand the upgrading of existing road weather stations commenced.40Video surveillance was installed at the Tomačevo roundabout; the installation of electrical connections andlighting for the Povodje rest area commenced (east and west), as well as the upgrading and protection againstatmospheric discharge of photometres in front of the Debeli hrib east and Mali vrh west tunnel portals.annual report 2011 darsA change was implemented to the DBP projects for Koper-Izola TSMS and Ljubljana TSMS north in the contextof TSMS investments into construction. Maintenance work was carried out on TSMS systems togetherwith the necessary upgrades (adjustment of traffic management at the section over the Rebrnice motorwayin the event of a Bora wind, additional programmes with traffic contents for tunnels, notification of driversupon detection of a vehicle in shoulder niches, preparation of programmes with traffic contents for trafficre-routing in Ljubljana, adaptation of the operations of TSMS to the new control-monitoring system in theKaravanke Tunnel). Simultaneously, the upgrade of radar boards with preventive messages (connection ofall boards in a single application) that collect traffic data, and a pilot project for calculating travel times usingBluetooth technology were also implemented.

INVESTMENTS IN MOTORWAY DEVELOPMENTAND RECONSTRUCTIONThe degree of investment activity in 2011 was adapted to the financial resources available. The value of motorwaysection construction and reconstruction comprised EUR 75 million.The table below presents the realisation of the value of motorway construction and reconstruction works in2011.Table 8: Realised value of motorway construction and reconstruction works in 2011 (in EUR)MOTORWAY DEVELOPMENTAcquisition ofland *Spatialplanning *Relisationwithoutacquistion ofland, spatialplanning,financing costsFinancing costsTotal realisationELABORATION OF DESIGN AND OTHER DOCUMENTS, ACUQISITION OF LAND ANDOTHER REAL PROPERTY215,454.41 1,846,089.90 1,334,407.82 0.00 3,395,952.13PERAČICA-PODTABOR 43,019.37 0.00 6,945,210.56 0.00 6,988,229.93KLANEC-ANKARAN: Connection to the Port of Koper, Phase II 399,438.39 0.00 19,552.55 0.00 418,990.94KOPER-IZOLA 12,536.39 0.00 16,030,648.59 2,281,430.98 18,324,615.96ŠENTVID-KOSEZE: Šentvid-Koseze 493,081.28 114.17 -1,465,501.78 0.00 -972,306.33ŠMARJE SAP-VIŠNJA GORA: Cikava petrol pump platform 77,134.73 0.00 1,960,118.35 0.00 2,037,253.08HAJDINA-ORMOŽ: Gorišnica-Ormož 648,841.13 0.00 347,521.38 585,831.24 1,582,193.75TOTAL MOTORWAY AND EXPRESSWAY CONSTRUCTION 1,674,051.29 114.17 23,837,549.65 2,867,262.22 28,378,977.33PESNICA-SLIVNICA: Pesnica-Zrkovska road 31,314.26 0.00 298,058.14 0.00 329,372.40PESNICA-SLIVNICA: Zrkovska road-Ptujska road 33,730.78 0.00 7,108.07 0.00 40,838.85PESNICA-SLIVNICA: New Zrkovska road from km 0.87 to km 3.80 -316.30 0.00 -3,877.96 0.00 -4,194.26KLANEC-ANKARAN: Connection to the Port of Koper, Phase I 5,786.46 0.00 2,640,844.42 0.00 2,646,630.88RAZDRTO-VIPAVA: Rebernice 8,899.38 0.00 2,742,391.13 0.00 2,751,290.51BIČ-HRASTJE: Pluska-Ponikve 2,655.52 0.00 1,874,347.97 0.00 1,877,003.49BIČ-HRASTJE: Ponikve-Hrastje 223,205.13 0.00 1,941,051.58 0.00 2,164,256.71SLIVNICA-GRUŠKOVJE: Slivnica-Draženci 154,461.67 0.00 247,120.50 0.00 401,582.17SLIVNICA-GRUŠKOVJE: Draženci-Gruškovje: subsection IBC Gruškovje-state border 13,509.40 0.00 10,890.02 0.00 24,399.42TOTAL FINISHING WORKS ON MW CONSTRUCTED IN 2009 AND 2010 473,246.30 0.00 9,757,933.87 0.00 10,231,180.17TOTAL FINISHING WORKS ON MW CONSTRUCTED BEFORE 2009 2,614,477.76 1,038.95 5,483,669.90 0.00 8,099,186.61Bypass road past the Dragonja settlement 32,532.12 0.00 671,426.16 0.00 703,958.28Implementation of anti-noise measures in the 5th and 6th European traffic corridors 0.00 0.00 661,161.04 0.00 661,161.04Measures following the expiration of warantee periods 0.00 0.00 92,796.60 0.00 92,796.60Expansion of the Tomačevo roundabout 0.00 0.00 236,098.48 0.00 236,098.48Rehabilitation of state roads 0.00 0.00 359,932.52 0.00 359,932.52Other 0.00 25,003.66 179,130.11 0.00 204,133.77TOTAL OTHER ITEMS 32,532.12 25,003.66 2,200,544.91 0.00 2,258,080.69NEW TOLLING SYSTEM 0.00 0.00 592,999.26 0.00 592,999.26ŽELODNIK-VODICE: Želodnik-Mengeš with the Mengeš bypass 197,634.91 0.00 4,817,116.77 0.00 5,014,751.68ŽELODNIK-VODICE: Mengeš-Žeje 72,772.20 0.00 96,379.54 0.00 169,151.74Other connecting roads 45,019.35 0.00 31,766.61 0.00 76,785.96DEVELOPMENT OF CONNECTING ROADS WITH THE SCOPE OF THE MOTORWAYPROGRAMME *315,426.46 0.00 4,945,262.92 0.00 5,260,689.38MOTORWAY RECONSTRUCTION (construction works) 0.00 0.00 11,284,755.56 0.00 11,284,755.56MOTORWAY RECONSTRUCTION (electro-mechanical works) 0.00 0.00 5,385,836.32 0.00 5,385,836.32MOTORWAY CONSTRUCTION (improving traffic safety) 0.00 0.00 91,419.76 0.00 91,419.76TOTAL MOTORWAY DEVELOPMENT AND RECONSTRUCTION 5,325,188.34 1,872,246.68 64,914,379.97 2,867,262.22 74,979,077.21* The data include VAT as DARS d.d. is not entitled to deduct input VAT from the above works.The negative result on the Šentvid-Koseze segment is the result of compensation from the heading of concluded arrangements of mutual relationships connected to the installation of fire protection in theŠentvid tunnel road gallery.41annual report 2011 dars

RESEARCH AND DEVELOPMENT ACTIVITIESIn 2011, the DARS d.d. as a partner in a joint application with the company Elea IC d.o.o, Ljubljana (partner)and the Faculty of Civil Engineering, Chair of Mechanics, University of Ljubljana (key partner, holder) successfullyapplied for the tender of the Slovenian Research Agency and obtained a research project entitled ‘ExplosionScaling of Reinforced Concrete Structures and their Safety in Extreme Fire Conditions’. Data is currentlybeing collected, and studies connected to the existing documentation on this issue implemented. It is expectedthat DARS d.d., as the manager of a large number of tunnels and covered excavations, will be able to usethe conclusions and results of the aforementioned research in ensuring and possibly improving fire safety onthe denoted motorway structures.42annual report 2011 darsIn 2011, DARS d.d. continued implementing the introduction of the road management project for the roads itmanages. The Expert System PMS - DARS (PMS - Pavement Management System) was updated in accordancewith the most recent findings of the profession (an upgrade of the latest version of the software dTIMS_CTV8 and harmonisation with new specifications for public roads in the Republic of Slovenia). The gradual introductionof management with other elements of road infrastructure (motorway fencing and facilities) isplanned.In 2011, DARS d.d. participated jointly with the Slovenian Roads Agency for the second consecutive year inthe international ERA NET ROAD II programme. The programme is intended to strengthen cooperation withinthe European research community in the field of research on roads and transport. The programme’s objectiveis to introduce and improve overall road asset management through the definition and development ofmethods and procedures which optimise the use and performance of management processes from the technical,economic and sustainable perspectives.

INTEGRATED MANAGEMENT SYSTEMThe integrated management system includes the quality aspect, in accordance with the requirements of theISO 9001:2008 standard, and the environmental management aspect according to the requirements of ISO14001:2004. These together form a unified management system, which is described in the Rules of Procedurefor the Management System and related documents.The success of the quality management system in DARS d.d., established according to the requirements ofthe ISO 9001 standard, was confirmed by the regular assessment of the independent external institution- Slovenian Institute of Quality and Metrology (SIQ). In three days, a group of four auditors assessed andconfirmed the fulfilment of requirements for the environmental management system according to ISO 14001and the quality management system.The success and efficiency of the quality management system and of the environmental management systemwas verified by a group of 34 internal auditors that worked within 16 auditing groups. Based on the findings,persons responsible for the processes prepared measures to remedy the causes of any deviations.The appropriate competences of internal auditors are ensured through internal calibrations that focus on therequirements of the ISO 19011 standard, good auditing practices and the harmonisation of establishments ofpreliminary assessments.The success and efficiency of recognised processes are monitored using performance ratios and measurableobjectives that comprise the following areas:− financial aspect,− satisfaction of consumers or motorway and expressway users,− satisfaction of employees, and− successful operation of individual processes.43annual report 2011 dars

INTERNAL AUDITThe Internal Auditing Department is functionally and organisationally separate from other organisationalunits in DARS d.d. and is directly responsible to management. It performs its tasks, which comprise planning,internal auditing and reporting independently, autonomously and impartially.The Internal Auditing Department was established with the intention of providing objective assurances andadvice to the Management Board of DARS d.d., with the aim of creating additional value and improving operationalefficiency and performance. The Internal Auditing Department assists the Company in accomplishingits objectives by stimulating the well-considered treatment of different types of risks, meaning that it evaluatesthe system of internal controls in a systematic manner and provides recommendations for the propermanagement of risk. The Internal Auditing Department operates with the authorisation of the ManagementBoard, to which it is directly responsible. The Internal Auditing Department reports to management and theAudit Committee of the Supervisory Board on findings and recommendations for improving the effectivenessof internal controls for managing risk.44The work of the Department is based on the Charter and Rules of Procedure of the Internal Auditing Department.The Department performs its work in accordance with the Annual Plan, which is based on annual riskanalysis and includes all identified and assessed risks, and Management Board opinions.annual report 2011 darsThree regular internal audits and one extraordinary audit were implemented in 2011. Twenty-three recommendationswere issued and adopted within the scope of these audits. In addition to implementing internalaudits of business processes and various organisational units, one of the most important tasks of the Departmentin 2011 was to provide assistance in setting up the risk register, which is an effective tool in the riskmanagement process.

SOCIAL RESPONSIBILITYTraffic SafetyTraffic Safety on Motorways and ExpresswaysTraffic safety on roads under the management of DARS in 2011 generally improved in comparison to the previousyear, meaning that the decreasing trend in the number of traffic accidents is continuing. (The exceptionwas 2008 when, following the introduction of vignettes, traffic of personal vehicles on motorways and expresswaysdramatically increased, which resulted in a slight deterioration in traffic safety.) Based on statisticson traffic accidents and their consequences in 2011, it is evident that the minimum expansion of the networkof motorways and expressways (the A2 motorway section past Trebnje was commissioned in mid-2010, whilethe second half of the motorway in the Peračica area was opened in 2011) had reduced the number trafficaccidents and number of minor and major physical injuries, while the number of fatalities had increased byone. Data for 2010 and 2011 are presented in Table 9.Table 9: Traffic safety statistics in 2010 and 2011Effects of traffic accidents on motorways and expresswaysYear Road category No injuries20102011Minor physicalinjuryMajor physicalinjuryFatalitiesMW 3,480 674 60 18EW* 481 142 13 1MW 3,259 647 60 16EW 391 69 7 4* The data do not include the H1 expressway, which was managed by the Slovenian Roads Agency.By reducing the number of traffic accidents with major and minor injuries, the potential for traffic accidentsresulting in fatalities can be reduced; therefore it is necessary to intensify activities to prevent such accidents.This will be possible only with the active participation of all sectors and departments of DARS d.d. and45annual report 2011 dars

in close cooperation with other agencies and organisations that are directly connected to traffic safety(Police, MZIP, Slovenian Traffic Safety Agency). In the next decade, DARS d.d., as the operator of motorwaysand expressways, will also have to contribute its share to reducing the number of traffic accident fatalitiesin Slovenia in accordance with European Union guidelines (a further 50 per cent reduction in the numberof fatalities is envisaged). The Company’s activities in this field in 2011 were (and will remain in the future)predominantly oriented towards the following areas:− participation in the preparation of implementing regulation which will enable the effective implementationof legal provisions and measures for protecting dangerous road points (Regulation on the verificationof road infrastructure safety and training of auditors of road safety, adopted in June 2011);− preparation of expert bases (guidelines) and trial introduction of the measures prescribed by Directive2008/96/EC of the European Parliament and of the Council of 19 November 2008 on road infrastructuresafety management,− elaborated assessments of the effects on traffic safety for the envisaged Šentrupert junction,− implemented safety inspection of the Slivnica–Draženci road;− the implementation of measures which will have a positive impact on improving traffic safety beganbased on the inspection of motorway and expressway segments performed in 2010 and recorded deficienciesand measures:− change in traffic signalisation,− erection of additional safety fences and guardrails,− preparation of project documentations and studies for construction interventions,− implementation of minor construction interventions;− analysis of data and preparation of proposed measures for segments with higher accident rates,− continuation of the European Road Assessment Programme (EuroRAP), which is based on internationalexperience, and enables the identification of dangerous traffic segments. The first road segments havealready been examined within the scope of the programme. Inspections which began to be implementedin 2011 will continue throughout 2012;− installation of new, more modern traffic signalisation and equipment, which will ensure more concurrentobservance of road traffic rules and prevent the dire consequences of traffic accidents. New hardwarefor the implementation of more sustainable, i.e. thicker markings was purchased in 2011, which throughadditional effects will provide better visibility, and when they are being driven over, caution drivers ofdanger by means of sound effects.Traffic Safety in TunnelsBoth preventative and concrete measures following emergencies were implemented in 2011 while implementingtunnel safety.46A total of 34 accidents and emergencies were recorded in 2011 which led to the need to remove facilities orparts of facilities temporarily from traffic. No traffic participants were injured in these events. The number ofevents declined by 25% over 2010, reflecting the lowest number since 2007, after which emergencies beganto be systematically recorded.annual report 2011 darsBased on protection and rescue plans for accidents in tunnels exceeding 500 m in length, drills of rescueunits were carried out in the Šentvid, Trojane, Golo rebro, Kastelec and Cenkova tunnels, while drills werecarried out in cooperation with the Administration of the Republic of Slovenia for Civil Protection and DisasterRelief in the Podnanos Tunnel and the construction site of the Markovec Tunnel. The drill planned by theAdministration of the Republic of Slovenia for Civil Protection and Disaster Relief for the Karavanke Tunnelwas rescheduled. It was established that an effective response from the emergency services systems 112 and113 and DARS d.d. can be expected in the event of an emergency, with a deficiency noted only in regard tothe connection system, which needs to be standardised to the greatest extent possible to achieve even bettercoordination of units.

A contract for the performance of fire-fighting tasks following accidents in tunnels on the Primorska motorwaywas concluded, namely for the Kastelec and Dekani tunnels (organisation of the fire-fighting regime) andthe still uncompleted Markovec Tunnel. DARS d.d. will co-finance the tasks of the relevant fire-fighting unitsof broader meaning, which will ensure continuous readiness to intervene in tunnels, with three career firefighters assigned a special purpose vehicle which DARS d.d. purchased some time ago. Within the prescribedfire-fighting regime of other longer tunnels, the Company continues to co-finance fire-fighting units for theTrojane and Karavanke Tunnels.Risk analyses for tunnels operating prior to 2007 were prepared at the end of 2011. Proposed measures forincreasing safety in individual tunnels will be reviewed in 2012.Regular maintenance and supervision of traffic flows through the tunnels rate as basic conditions for tunnelsafety and were implemented throughout 2011. The management and supervision of traffic were most suitablein those tunnels located on segments of smart roads, which upon emergencies enable quick and effectiveaction of the control centre operator on these segments.Special measures for reducing risks in the Karavanke Tunnel were again implemented during the summer in2011, thus during peak traffic periods. The competent Austrian ministry also introduced a measure regardingadditional driving restrictions on cargo vehicles at the beginning of weekends from the end of July to thebeginning of September. These measures improve safety in tunnels and will also achieve a suitable level withthe upgrade of the second tunnel tube, or an appropriate emergency-rescue tunnel with a simultaneousupgrade of the ventilation system. An agreement between Slovenia and Austria had not yet been concludedin 2011 regarding the aforementioned upgrades which, pursuant to the directives of the European Union,have to be realised by 2019.Environmental ManagementThrough investments in the construction of new motorways and expressways, the Company is constantlyimproving connections between economic and regional centres. Special concern is devoted to environmentalprotection in the earliest phases of planning motorway and expressway layouts, during their construction,and even after they are opened to traffic. This is not only an economic and competitive necessity, but alsoshows a responsible attitude to the environment in general.For this reason, the Company devotes special attention to environmental protection within the framework ofsustainable development in the early phase of planning motorways and expressways and their positioning inthe environment by preparing all necessary expert documents relating to environmental protection. This isprimarily reflected in motorway layouts, as well as in individual solutions ensuring the prescribed protectionagainst the negative consequences of motorway construction and operation.NoiseIn 2011, the Company continued erecting noise barriers, so that the project of anti-noise protection wasimplemented simultaneously with the construction of new motorway sections on the one hand and withinthe scope of reconstruction in several locations where measurements of noise loads showed the need forthe erection of such noise protection. Several shorter segments of noise barriers damaged in traffic accidentswere also repaired.Waste managementDARS d.d., as the operator and maintainer of motorways and expressways, consistently implements theenvironmental protection policy in all areas. It has recently been devoting a great deal of attention to theproblem of wastes, which is becoming an increasingly more relevant issue. The Company collects wastes47annual report 2011 dars

accumulated during its work or from motorway and expressway operations. It also sorts collected wastes atcollection points, such as motorway maintenance bases and their branches.The Company began resolving issue of waste separation in an accelerated manner in 2011, as prescribed bythe valid waste management legislation. Wastes are handed over to authorised waste acceptors (collectors,processors), waste management records are kept, and an annual waste management report is published.The greatest quantity of non-dangerous wastes were collected during road cleaning, de-sanding and fromdrainage water and tunnel wash water; the majority of dangerous wastes consisted of waste oils, water containingoil, sludge, waste paints, varnishes and absorbent papers (used to clean up roads after accidents).Technical guidelines for the establishment of more filtering facilities along the motorway network were createdin 2011 for the needs of managing liquid and mud waste materials. Drainage water will be filtered frommud waste materials containing high water content via the newly constructed filtering facilities, which willindirectly also contribute to reducing costs from wastes due to the reduced quantity and weight of wastematerials.Protection of watersThe drainage of meteoric water from roads is performed using reservoirs, which enable controlled drainage.The reservoirs are regularly maintained and their sediments transported to the authorised collectors of suchwastes. In 2011, the Company implemented the regular annual cleaning of the most burdened oil separators(on motorway bases and branches) and some of the most burdened reservoirs.The Company also prepared a proposal for the annual programme for the monitoring of meteoric water fromreservoirs for 2012 for public roads throughout Slovenia under the management of DARS d.d., which wassubmitted to the Ministry of the Environment and Spatial Planning and Ministry of Transport for approval. Arealistic picture of environmental pollution from motorway meteoric water will arise during the implementationof the aforementioned annual programme, as prescribed by the Decree on the emission of substances inthe discharge of meteoric water from public roads.The Company also systematically collects and removes waste waters accumulated during the washing of tunnels,which is transported to the treatment plant for purification.Gas emissionsVentilation systems are installed in tunnels whose length exceeds 1,000 metres. Automatic control systemsmonitor gas emissions, the presence of carbon monoxide and adequate visibility. Gas emissions in 2011 werenot critical.48annual report 2011 darsEnvironmental impacts of road grittingTo prevent slippery roads and ensure safe road conditions in winter, roads are gritted using various grittingmaterials. These materials have a minimum impact on the ground, quality of surface and groundwater, flora,fauna, humans and animals, facilities (carriageways, bridges, viaducts and buildings), and on vehicles.Studies conducted in the past to establish the effects of gritting of carriageways on groundwater showed theimpact to be small, as the salt is diluted by a factor ranging from 1 to 100 up to 1 to 500. The effect of grittingon the environment will also be analysed during the implementation of the annual programme of monitoringmeteoric water from reservoirs for 2012, the draft of which was drawn up in 2011. The programme dictatesthat the following parameters be monitored in samples of meteoric water taken from roads during springrains: chloride, sodium, magnesium and calcium.

HUMAN RESOURCES MANAGEMENTEmployees in DARS d.d.Table 10: Key data on employees in DARS d.d. in 2010 and 20112010 2011Status of employees in DARS d.d.Number of employees in DARS d.d. 1,247 1,249Demographic data on employeesAverage age of employees 42 years 43 yearsPercentage of females employed 25.1% 25.1%Employee education structurePercentage of employees with a maximum 4th level education 45.9% 45.0%Percentage of employees with a 5th level education 34.2% 33.5%Percentage of employees with a 6th level education 6.8% 8.2%Percentage of employees with a 7th level education or higher 13.1% 13.3%Employee social securityNumber of solidarity benefits granted 49 50Number of employees with disabled status 48 46Number of procedures introduced for recognising disabilities 17 17Number registered in collective accident insurance 118 131Number registered in voluntary pension insurance 34 41Frequency of sick leave 4.6% 4.9%Employee development – education and trainingNumber of referrals to internal education and training programmes 2,426 2,656Number of referrals to external education and training programmes 270 241Number of pedagogical hours per employee within the scope of internal education and training 19.4 17.6Number of pedagogical hours per employee within the scope of external education and training 8.8 7.6Number of concluded and valid part-time studies contracts 26 30Employee education is a foundation of the Company’s developmentThe intensive activities in the field of employee education and training begun in 2010 continued in 2011 inthe form of internal and external training and part-time studies. The aim was to improve expert knowledge,acquire new competences and raise the general educational level of employees. Education represents aninstrument for ensuring and maintaining a suitable professional level of employees as development potentialwhich, in accordance with the special needs of business processes and strategic directions of the Company,enables effective adaptation to changes and the systematic development of the Company.The reduction in the amount of financial resources earmarked for education did not have a direct impact onthe number of training hours. It did, however, have an impact on the restructuring of education and training inthe sense of direct guidelines in the implementation of those programmes requiring the inclusion of a smallernumber of participants and in encouraging internal training. The structure of educational areas in the Companyoverall did not change. The focus remains on motorway maintenance, with the greatest share of training intendedfor the fulfilment of legal requirements, namely occupational safety and health. This field makes up a56.5 per cent share. This is followed by tolling with 26.8%, and the remaining departments with smaller shares.49annual report 2011 dars

Graph 7: Number of employees in 2010 and 2011 by individual work segment800700671 664Number of Employees600500400300200176193377 372100023 20Support Services Toll Collection Construction andReconstructionOrganisationNumber of Employees as at 31 December 2010 Number of Employees as at 31 December 2011MotorwayMaintenance, IT and ITSGraph 8: Comparative overview of employee educational structure for 2010 and 2011504545.9 45.0403534.2 33.5Percentage3025201513.1 13.31056.88.2500Maximum 4th leveleducation5th level education 6th level education 7th level education orhigherYear 2010 Year 2011annual report 2011 darsEmployees – the Company’s capitalAs a good manager, the Company endeavours to appropriately treat and manage the capital it has available.The awareness that employees contribute their knowledge as intellectual capital, and vital energy,represented by their health, to the working process is important for the effective management of humancapital. Employee health and satisfaction are prerequisites for the effective and successful use of knowledgeand intellectual capital. To this end, the systematic and sustainable active promotion of occupational healthcontinued in 2011. Activities were focused on the management of risk factors that cause illness and on treatmentstrategies for handling employees with changed working abilities.

The majority of activities at the organisational level in 2011 took the form of monitoring the level of sickleave, active resolution of the problem of changed working capacity and implementation of an expert seminarentitled ‘The Road as the Working Environment’. The Company encouraged employees to participate inthe Vitality for Safety programme, which was co-financed by the Health Insurance Institute of Slovenia on thebasis of a public tender.Annual interviews to monitor the work and results of employees and link their objectives with those of theCompany, and to exchange views and promote constructive communication between management and employees,were again successfully implemented in 2011. The most dedicated employees were rewarded at theend of 2011 in line with the established commendation and award system.The Company received wider recognition and acknowledgment for its endeavours to improve work organisationand the working environment to enable employees to more easily combine their work and private livesin the form of the Family Friendly Company certificate.Occupational health and safetyThe new Occupational Health and Safety Act was adopted in June 2011. The Act introduced several novelties,imposing several new obligations on employees. The key objectives of the new Act are to ensure a higher level ofoccupational safety and improve the health of employees. The basic task that the new Occupational Health andSafety Act imposes on employees is the implementation of preventative measures. One of the most important(and previously prescribed) measures is training and raising the awareness of employees regarding the implementationof work in a safe manner. In 2011, the Company prepared theoretical and practical training for staff in thefield of maintenance, and participated in implementing activities for promoting health in the workplace (a newrequirement). Over 460 maintenance staff took part in the training for safe work. A total of 34 electricians weretrained for safe work with the assistance of an external contractor. The prescribed training for drivers of hazardousmaterials was also implemented via external contractors (with 11 employees obtaining the ADR certificate and 45renewing their certificate, while another 279 participated in training for the transportation of smaller quantities ofhazardous materials). A total of 73 employees were trained for work with phyto-pharmaceutical substances, while32 obtained qualification as cutters from the Secondary Forestry and Woodwork School in Postojna.Inspections of the working environment and work equipment were performed with recommendations forthe remedying of established deficiencies concurrently submitted. Given the new requirements of the Act,the Company also inspected in detail the work locations of employees who are exposed to above-averagerisk of violence from third parties. Written instructions on avoiding violent events and action in the event ofviolence or robbery were prepared.The Company estimates that the activities in the area of occupational health and safety which guided theCompany in 2011 contributed to a significant reduction in the number of employee workplace injuries incomparison to previous years.51Table 11: Number of employee workplace injuries at DARS d.d. (including travel injuries)Area 2010 2011Regular maintenance 27 20Tolling 9 5IT and ITS 6 1Support services 4 1TOTAL 46 27annual report 2011 dars

User satisfaction and communicationsUser satisfactionTwo surveys of user satisfaction were carried out in 2011. The second survey was carried out in December, inwhich users once again rated 20 factors affecting the quality and safety of driving on the motorways. Regularsurveys enable the Company to establish the viewpoints and opinions of users regarding safety, maintenanceand equipment on the motorways, notification of the conditions and events on motorways, offers of restareas and tolling. The surveys show the most important factors in user satisfaction to be a ploughed carriagewayand understandable road signalisation.The user satisfaction rating, which in December 2011 was 3.53 (out of a maximum score of 5), has been increasingeach year. User satisfaction increased most for users of the Primorska motorway leg, which accordingto the most recent ratings are most satisfied (previously, the most satisfied were users of the Štajerskamotorway leg) with the most dissatisfied users being those who used the Ljubljana bypass (previously, theleast satisfied were users of the Gorenjska motorway leg). The increase in user satisfaction was the result ofmeasures aimed at improving the quality of motorway driving. Regular maintenance and signalisation alongsidereconstruction works remain the most critical factors. The Company will continue to devote the greatestattention to these factors and adopt measures to achieve a higher level of services.CommunicationsDARS d.d. ensures the media comprehensive and up-to-date access to information. All media representativesare entitled to information under equal conditions and also have access to DARS communications at theMedia Centre on its website (www.dars.si), where general or financial news can be accessed separately viathe Press Releases section. As interesting and practical information is also published at the Media Centre forother publics, a video gallery, photo gallery and publications issued by the Company are also available on itswebsite. Almost 8,000 references to DARS d.d. appeared in media in 2011.Communications with motorway and expressway usersUsers most often contact the Company with concrete questions, proposals, comments, complaints, and evenpraise, relating to the use of motorways. The most frequent questions deal with reconstruction and maintenanceworks, traffic safety, and toll collection or vignettes. Persons residing in the vicinity of motorways aremost interested in measures to reduce or eliminate the negative impacts of motorway traffic on the environment.The Company answers the majority of questions (almost 2,000 of which were recorded last year) within twoworking days at the latest.52annual report 2011 darsInformation on public road conditionsA great deal of attention is focused on complete and quality notifications for drivers regarding driving conditionson motorways and expressways. The TIC collects information on current road conditions and deliversthis to users on the web portal www.promet.si, from where almost all radio stations in Slovenia, numerousweb portals and TV stations receive their information. All the denoted media also receive information directlyvia email from the information system of the Centre.TIC operators tune into various radio stations more than thirty times a day with live reports on current roadconditions. Users can also obtain information via the toll-free telephone number or direct telephone numbers.

Communications with experts and professionalsThe professional public includes all external participants and institutions affiliated with the Company orwhich influence its operations. Special attention is given to contents regarding traffic safety, education andpreventative actions linked to the roads the Company manages.Communications with employeesConsiderable attention is also given to communications with employees, who comprise one of the Company’smost important publics. Communications with employees are carried out in a variety of ways.The internal newsletter ‘Avtoceste’ (Motorways) is published periodically, which together with the editorialcommittee and in accordance with their policy acquaints employees with news, expert contents and items ofinterest related to company operation and activities. The Company observed increased interest in employeecooperation in 2011.The Company informs employees of actual events within, and in connection to, the Company through themonthly bulletin ‘Preglednik’ (Examiner).The Company’s Intranet site has also proved an important tool for communications. The contents publishedon this site are current and updated on an ongoing basis. Numerous useful documents, forms, acts, photodocumentation and clippings are also published on the site.Communication with employees is also implemented via external validated communication channels, particularlyon the occasion of events and decisions important for the Company and its employees.Communication with the social environmentDARS d.d., due to its powerful role and significance in the broader social environment, strongly endeavoursto act as a socially responsible company.The Company does not shy away from concern about, and responsibility to, the people and the environmentin which it operates. Through awareness, and prevention campaigns in the areas of traffic, traffic safety andenvironmental protection, it takes an active part in current social events, co-creating them to the greatestextent possible.To the greatest extent possible, the Company contributes to humanitarian projects and projects connectedto preventative action in traffic through sponsorships and other forms of cooperative support and via professionalassociations whose activities are associated with road construction and maintenance. Thus, in 2011,the Company supported the preventative traffic activities of the Varna pot institute and the Z glavo na zabavofoundation. Instead of Christmas gifts, funds were donated to the Malči Beličeva Youth Centre in Ljubljana,Maribor Youth Centre and in support of the international humanitarian Calm Sea charity. The Company alsosponsored the International Symposium on Tunnel Construction and Underground Structures prepared bythe Slovenian Society for Underground Structures and professional meetings of the Slovenian Asphalt PavementAssociation.53annual report 2011 dars

ANTICIPATED DEVELOPMENTThe MCRSA-1, which entered into force in December 2010, introduced two essential novelties:− DARS d.d. also became the concessionaire for the construction and reconstruction of motorways andexpressways,− DARS d.d. was awarded the right of superficies on land where the motorways and expressways run,thereby becoming the owner thereof. The right of superficies was granted for a period of 50 years.In 2011, DARS d.d. concluded a contract on the implementation of performance order on the basis of Article4 of MCRSA-1 which regulates the performance of tasks related to the spatial planning and integration ofmotorways in space and the acquisition of land and other real estate for motorway construction.The conclusion of a new concession contract with the Republic of Slovenia still awaits DARS d.d. in 2012; thiswill re-regulate the existing concession relationship for the maintenance and management of motorway andarrange new contents introduced by the MCRSA-1 (the creation and definition of the right of superficies,transfer of title, the concession method of construction and reconstruction).54annual report 2011 darsThe most important matters regarding the further development of the Company are the arrangement of themethod of providing financial resources to repay debt obligations and continued implementation of activitiesin accordance with MCRSA-1. Also extremely important is the arrangement of defining toll rates, because,following the enforcement of MCRSA-1, tolls have become an even more important item for the Companythan in the previous regime, which was based on the model of recognised costs.In accordance with its vision of the future, DARS d.d. will become an increasingly market-oriented company,which in addition to developing and improving the existing business model, will systematically develop andimplement new business ideas with a view to obtaining additional toll and particularly non-toll revenue andrevenue from diversifying its revenue portfolio.The Company will use a professional approach, based on objective analyses, also in the future to ensure thetraffic flow capacity and safety on motorways and other road infrastructure and in a financially viable wayimprove its organisation. The focus will be on the effective management of the human, material, financialand information resources of the Company.

CORPORATE GOVERNANCE STATEMENT OFDARS D.D.In accordance with the provisions of the fifth paragraph of Article 70 of CA-1, the Articles of Association ofDARS d.d. entered into the court register at the District Court in Celje on 31 March 2011 and the provisionsof the Management code for publicly traded companies and the Corporate Governance Code for Companieswith State Capital Investments, DARS d.d. hereby presents, as part of the Business Report, the followingCorporate Governance Statement of DARS d.d.1. Reference to the Corporate Governance CodeDARS d.d. hereby informs its shareholders and the public that it carries out its operations in accordance with thevalid regulations and legislation applicable to the Company which also regulate the majority of issues set forthin the Management code for publicly traded companies adopted on 8 December 2009 by the Ljubljana Stock Exchange,d.d., Ljubljana, the Slovenian Directors’ Association and the Managers’ Association of Slovenia. As of 13January 2011, it also carries out its operations in accordance with the Corporate Governance Code for Companieswith State Capital Investments adopted by the committee of the AUKN, which proposes the rules, procedures andcriteria for managing management and supervisory bodies in companies with state capital investments in the RS.The Company began enforcing the provisions of this Code with the adoption of its Articles of Association.The Company hereby declares that the Codes are applicable to the Company and publicly accessible on theweb pages of the Ljubljana Stock Exchange at the address: http://www.ljse.si/ and on the website of theCapital Assets Management Agency of the Republic of Slovenia at the address: http://www.auknrs.si/f/docs/PDF_dokumenti/kodeks.pdf.2. Deviations of the Company from the provisions of the CodeThe Company declares that it observes the provisions of the Code, except for certain deviations stemmingfrom its special status, as its sole shareholder is the Republic of Slovenia.As of 29 May 2010, when the Management of Equity Investment of the Republic of Slovenia Act went intoforce, the shareholder exercises its rights through the AUKN. The Agency acts as a representative of the Republicof Slovenia when exercising the rights stemming from shares and stakes and in cases pending beforecourts and other bodies connected to the execution of these rights. The Agency also exercises the rights ofthe shareholder through the implementation of General Meetings.DARS d.d. does not observe the provisions of the Code in settling those issues which are regulated for theCompany by applicable law, or which are settled by the Company in a different manner in conformity withthe provisions of the Articles of Association or acts of the Company. The Company also does not observe theprovisions of the Code in cases when non-mandatory conduct is not prescribed in its acts, or when certaintypes of conduct are not prescribed as a legal obligation.3. The main characteristics of the internal control and risk management systemsin the Company in relation to the financial reporting procedureThe system of internal controls is a set of various guidelines and policies established and adopted by themanagement for the purpose of optimally managing the risks related to financial reporting. The purpose ofinternal control system is to ensure efficient and successful operation, reliable financial reporting, and compliancewith applicable laws and other external and internal regulations.The Company has established a system for managing risk in relation to financial reporting.The Company ensures the accuracy, completeness and truthfulness of financial reporting by implementingthe following internal controls:− control of the accuracy of accounting information, which is ensured in various ways, e.g. by reconciling itemswith buyers and suppliers;− control of the completeness of entered data (e.g. sequence of documents, enumeration of documents);55annual report 2011 dars

−−−control of the allocation of duties and responsibilities (e.g. separate performance of recording and payment);control of access limitations (right of access to accounting records is selectively granted);supervision control.The accounting process is IT-supported, so all the aforementioned internal controls are linked to controlsystems incorporated within the framework of information technology which encompass controls of limitedaccess to the network, information and applications, as well as controls of accuracy and completeness ofentered and processed information.4. Securities of the Company and attached rightsThe share capital of the Company, divided into shares, is 100% owned by the Republic of Slovenia.5. The functioning of the Company’s General Meeting and its key competences,description of shareholder rights and the manner of exercising such rightsThe Company has the status of a public limited company functioning as a commercial company under CA-1.The functioning of the General Meeting and its key competences, as well as the rights of shareholders andthe manner of exercising such rights, are defined in more detail in the Articles of Association of DARS d.d.The sole founder and shareholder of DARS d.d. is the Republic of Slovenia, which as of 29 May 2010 exercisesits right through the AUKN. The Republic of Slovenia exercises its shareholder’s rights, as defined in CA-1 andthe Articles of Association, at general meetings. The general meetings are convened by the Agency whichoperates in accordance with the Management of Equity Investments of the Republic of Slovenia Act (OfficialGazette of the Republic of Slovenia, No. 38/2010).The competence of the General Meeting in accordance with point 7.4.5 of the Articles of Association of DARSd.d. comprises decisions regarding:− the issue of new shares or formation of new or separate classes of shares, each division of shares, formationof associations, distribution of shares as dividends, or division of any registered securities of the Company,− appropriation of accumulated profit (payment of dividends), pay-out of capital to the shareholder and retainingof earnings,− election of members of the Supervisory Board,− granting of discharges to the Management and Supervisory Boards,− any change in the Company’s status, mergers, de-mergers, takeovers, joint investments, partnerships,investments and similar measures,− company liquidation,− conclusion of enterprise contracts (as defined by CA-1),− decisions granting authorisations for the issue of stock options or convertible bonds and conditions thereof,− capital increases (inclusive of conditional or full approval of increased capital) and/or capital decreases,− appointment and discharge of the Company’s auditors,− adoption and amendment of the Company’s Articles of Association,− measures connected to the acquisition of own shares,− all significant changes related to the Company’s operations.56annual report 2011 darsGeneral meetings are convened by the Management Board of DARS d.d. at its own initiative, at the requestof the Supervisory Board or the Company’s shareholder.A general meeting must be convened in the legally prescribed cases, and at least once a year, immediatelyafter receiving the auditor’s report.6. The composition and activities of the Company’s managerial and supervisorybodies and their committeesManagement BoardThe composition and activities of the Management Board are defined in more detail in the Articles of Associationof DARS d.d.; it is comprised of a maximum of five members. A person who fulfils the requirementsspecified in Article 255 of CA-1 and point 7.2.2. of the Articles of Association may be appointed a member ofthe Management Board. All members of the Management Board are appointed by the Supervisory Board fora period of 5 years. All members of the Management Board are employees of the Company.

The Management Board of DARS d.d. is comprised of the following members: Mateja Duhovnik, Chairwoman,Gordana Bošković, Member of the Management Board, and Alojz Ratajc, MSc, Labour Manager.The Management Board manages the Company in the Company’s best interests, independently and at its ownresponsibility. At the same time, it must act as a diligent and honest manager and protect the business secretsof the Company. The Management Board realises its tasks by managing the Company through the adoption ofmeasures, and carries out the activities defined by law and the Articles of Association of the Company.If the Management Board has more than two members, the Company is jointly represented by the Chairmanof the Management Board and one member of the Management Board.The Management Board adopts resolutions within the scope of its competences with a majority vote of allmembers of the Board. Each member of the Management Board is entitled to one vote. In the case of a tiedvote, the vote of the Chairman of the Management Board is decisive. The Labour Manager participates indecision-making whenever the Management Board decides on staff and social issues.The Management Board adopts rules of procedure on its work, to which the Supervisory Board grants consent.Company Supervisory BoardIn accordance with point 7.3.1 of the Articles of Association of DARS d.d., the Supervisory Board of DARS d.d.consists of six members. Two members of the Supervisory Board are employee representatives.The Supervisory Board adopts the rules of procedure on its work in accordance with the Articles of Associationof DARS d.d. The Supervisory Board appoints the Chairman and Deputy Chairman.The Supervisory Board must be convened at least once every quarter with a mandatory convocation at leastevery six months. The Supervisory Board constitutes a quorum if at least 2/3 of the members are present at ameeting, including the Chairman or Deputy Chairman of the Supervisory Board.In accordance with the Articles of Association of DARS d.d., the Supervisory Board supervises the managementof transactions which are managed by the Company; appoints and discharges the Management Board; convenesgeneral meetings; reviews and examines the ledgers and documentation of the Company, its cash in hand, securitiesand inventory of goods and other items; grants the Management Board advance consent for transactionsexceeding a value of EUR 2.5 (exclusive of VAT); grants consent to the Management Board for the establishmentand termination of subsidiaries; performs other activities defined in the CA-1 and other legal regulations; confirmsthe annual report with the proposed distribution of net profit for the reporting period; submits proposals to theGeneral Meeting for the distribution of accumulated profit; grants consent to the appointment of the auditingfirm; appoints the audit committee of the Supervisory Board; grants consent for the purchase and divestment ofstakes and shares in other companies, and grants consent regarding the planning documents of the Company.The Supervisory Board is required to examine the annual report and the proposed appropriation of accumulatedprofit submitted by the Management Board. It must compile a written report on the results of itsexamination for the General Meeting.The more detailed composition and activities of the Supervisory Board of the Company and its committees in2011 are presented in the Report of the Supervisory Board.Decisions related to the General Meeting, Management Board and Supervisory Board and Company securitiesare summarised according to the Articles of Association adopted by the General Meeting on 14 March2011 and entered into the court register on 31 March 2011 and adopted in connection to the decision onincreasing capital with an in-kind contribution pursuant to MCRSA-1.Ljubljana, April 2012Supervisory Board of DARS d.d.Tomaž Mencinger, MScChairman of the Supervisory BoardMateja DuhovnikChairwoman of theManagement BoardManagement Board of DARS d.d.Gordana BoškovićMember of theManagement Board57annual report 2011 dars

58annual report 2011 dars

Financial Report59annual report 2011 dars

ContentsFinancial ReportII.1 FINANCIAL STATEMENTS OF DARS D.D. 62II.2 REPORTING COMPANY 68II.3 SIGNIFICANT ACCOUNTING POLICIES 68II.4 NOTES TO THE FINANCIAL STATEMENTS 80II.4.1 Notes to the balance sheet 80II.4.2 Notes to the statement of comprehensive income 99II.5 EVENTS AFTER THE BALANCE SHEET DATE 107II.6 AUDIT OF THE ANNUAL REPORT FOR 2011 107II.7 INDEPENDENT AUDITOR’S REPORT 10860annual report 2011 dars

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II.1 FINANCIAL STATEMENTS OF DARS D.D.Balance Sheet as at 31 December 2011In EUR (without cents) Note 31 Dec 2011 31 Dec 2010ASSETS 5,529,053,959 5,611,218,851A. LONG–TERM ASSETS 5,393,091,150 5,457,759,558I. Intangible fixed assets and long–term deferred costs accrued revenue II.4.1.1 1,134,910 808,3601. Concessions, patents, licences trademarks and similar rights 1,134,910 808,360II. Property, plant and equipment II.4.1.2 5,386,321,113 5,454,868,8231. Land and buildings 5,246,700,708 5,314,426,063a) Land 32,019,185 32,131,719b) Buildings 5,214,681,523 5,282,294,3443. Other plant and equipment 15,680,766 17,621,0964. Property, plant and equipment under acquisition 123,939,640 122,821,664b) Property, plant and equipment under construction and manufacture 123,939,640 122,821,664IV. Long–term financial investments II.4.1.3 964 9641. Long–term financial investments, excluding loans 964 964c) Other shares and interests 964 964V. Other long-term operating liabilities II.4.1.4 362,399 0VI. Deferred tax receivables II.4.1.5 5,271,764 2,081,410B. CURRENT ASSETS 134,989,833 152,326,621I. Assets-available-for-sale II.4.1.6 120,628 0II. Inventories II.4.1.7 2,485,847 2,014,4141. Materials 2,485,847 2,014,414III. Short–term financial investments II.4.1.8 98,276,200 104,583,6421. Short–term financial investments, excluding loans 98,276,200 104,583,642c) Other short–term financial investments 98,276,200 104,583,64262IV. Short–term operating receivables II.4.1.9 32,454,832 40,492,7812. Short–term trade receivables 10,636,125 11,117,204annual report 2011 dars3. Short–term operating receivables due from others 21,818,707 29,375,577V. Cash and cash equivalents II.4.1.10 1,652,326 5,235,784C. SHORT-TERM DEFERRED COSTS AND ACCRUED REVENUE II.4.1.11 972,976 1,132,672

In EUR (without cents) Note 31 Dec 2011 31 Dec 2010LIABILITIES 5,529,053,959 5,611,218,851A. CAPITAL II.4.1.12 2,427,190,327 2,402,580,775I. Called–up capital 2,319,866,345 2,319,866,3451. Share capital 2,319,866,345 212,8232. Unregistered paid-in capital 0 2,319,653,522II. Capital reserves 26,428,084 26,428,084III. Revenue reserves 69,206,361 41,816,2481. Legal reserves 2,774,928 1,544,4505. Other revenue reserves 66,431,433 40,271,798V. Retained net earnings 0 0VI. Net profit or loss for the period 11,689,537 14,470,098B. PROVISIONS AND LONG-TERM ACCRUED COSTS AND DEFERRED REVENUE II.4.1.13 73,140,117 85,536,7171. Provisions for pensions and similar liabilities 2,108,866 2,062,8972. Other provisions 67,507,104 79,876,8253. Long–term accrued costs and deferred revenue 3,524,147 3,596,995C. LONG–TERM LIABILITIES 2,832,307,873 2,935,858,574I. Long–term financial liabilities II.4.1.14 2,828,280,071 2,931,830,7722. Long–term financial liabilities to banks II.4.1.15 2,667,915,524 2,771,466,2253. Long–term financial liabilities from bonds II.4.1.16 160,364,547 160,364,547II. Long–term operating liabilities II.4.1.17 4,027,801 4,027,8015. Other long-term operating liabilities 4,027,801 4,027,801Č. SHORT–TERM LIABILITIES 176,851,845 165,761,338II. Short–term financial liabilities II.4.1.18 125,594,663 88,357,5772. Short–term financial liabilities to banks 118,629,051 81,125,566633. Other short–term financial liabilities 6,965,612 7,232,011III. Short–term operating liabilities II.4.1.19 51,257,182 77,403,7612. Short–term trade payables 40,198,466 46,912,2134. Short–term operating advances payable 12,405 38,1855. Other short–term operating liabilities 11,046,312 30,453,363D. SHORT–TERM ACCRUED COSTS AND DEFERRED REVENUE II.4.1.20 19,563,797 21,481,447The accounting guidelines and explanatory notes are a constituent part of the Financial Statements and should be read in connection therewith.annual report 2011 dars

Statement of Comprehensive Income for the period from 1 January to 31December 2011In EUR (without cents) Note 2011 201064annual report 2011 dars1. Net sales revenue II.4.2.1 310,772,380 301,412,873Revenue from tolls 298,339,794 290,095,679Revenue from leases 7,221,547 6,518,711Revenue from closure and overweight load transports 1,081,994 2,378,157Revenue from easements 1,753,320 131,767Revenue from agency contract 643,333 668,098Revenue from telecommunications 1,008,136 1,011,992Other sales revenue 724,255 608,4694. Other operating revenue II.4.2.2 20,397,340 12,865,8475. Costs of goods, materials and services II.4.2.3 –34,243,177 –39,549,787a) Acquisition cost of goods and materials sold and cost of materials used II.4.2.3 –9,395,424 – 13,152,610b) Cost of services II.4.2.3 –24,847,753 –26,397,1776. Labour costs II.4.2.4 –33,670,414 –32,840,366a) Wages and salaries –24,809,857 –24,108,837b) Social security and pension insurance costs –4,844,500 –4,734,939c) Other labour costs –4,016,058 –3,996,5897. Write-offs II.4.2.5 –158,883,323 –115,493,653a) Amortisation and depreciation –142,565,877 –115,227,245b) Operating expenses from the revaluation of intangible assets andproperty, plant and equipment–248,659 –57,083c) Operating expenses from revaluation of operating current assets –16,068,787 –209,3248. Other operating expenses II.4.2.6 –2,109,845 –17,909,13710. Financial revenues from loans II.4.2.7 3,235,844 2,172,774b) Financial revenue from loans to others 3,235,844 2,172,77411. Financial revenues from operating receivables II.4.2.8 120,024 84,160b) Financial revenues from operating receivables due from other entities 120,024 84,16012. Financial expenses due to impairment and write-offs of financial investments II.4.2.9 –2,784,937 –3,482,81913. Financial expenses for financial liabilities –73,885,817 –68,177,729b) Financial expenses from loans received from banks II.4.2.10 –66,550,438 –57,424,915c) Financial expenses from bonds issued II.4.2.11 –7,335,379 –7,319,615č) Financial expenses from other financial liabilities II.4.2.12 0 –3,433,19914. Financial expenses from operating liabilities –18,935 –667,555b) Financial expenses from trade payables –11,214 –844c) Financial expenses from other operating liabilities –7,721 –666,71215. Other revenue II.4.2.13 2,012,882 80,17116. Other expenses II.4.2.14 –134,233 –206,46317. Corporate income tax II.4.2.15 –9,388,592 –9,437,22518. Deferred taxes 3,190,354 1,612,27419. Net profit or loss for the period II.4.2.16 24,609,552 30,463,36523. Other comprehensive income 0 024. Total comprehensive income 24,609,552 30,463,365The accounting guidelines and explanatory notes are a constituent part of the Financial Statements and should be read in connection therewith.

Cash Flow Statement for the period from 1 January to 31 December 2011In EUR (without cents) 2011 2010A. Cash flows from operating activitiesa) Items from the Income StatementOperating revenue (except from revaluation) and financial revenue from operating receivables 330,051,771 313,821,014Operating expenses without amortisation and depreciation (except from revaluation) and financialexpenses from operating receivables–82,980,088 –73,651,280Income taxes and other taxes not included in operating expenses –5,460,435 –506,488241,611,247 239,663,246b)Changes in net operating assets (including accruals and deferrals, provisions and deferred taxliabilities) from balance sheet operating itemsOpening less closing operating receivables 7,379,089 –13,070,106Opening less closing deferred costs and accrued revenue 159,696 21,665,089Opening less closing deferred tax receivables –3,190,354 –1,612,274Opening less closing assets (groups for disposal) available-for-sale –120,628 0Opening less closing inventories –568,992 –260,539Closing less opening operating liabilities –28,126,654 –44,221,599Closing less opening accrued costs and deferred revenue, and provisions –15,782,872 50,687,193–40,250,716 13,187,763c) Net cash receipts or expenditures from operating activities (a + b) 201,360,532 252,851,009B. Cash flow from investing activitiesa) Cash receipts from investing activitiesInterest and dividends received from investing activities 3,233,705 2,078,295Cash receipts from disposal of property, plant and equipment 3,146,627 4,473,773Cash receipts from disposal of short-term financial investments 70,386,080 11,097,37876,766,412 17,649,446b) Cash expenditures from investing activitiesCash expenditures for the acquisition of intangible assets –1,131,578 –1,002,603Cash expenditures for the acquisition of plant, property and equipment –73,419,905 –189,448,693Expenditures for the acquisition of short-term financial investments –64,078,638 –60,239,113–138,630,121 –250,690,409c) Net cash receipts or expenditures from investing activities (a + b) –61,863,709 –233,040,963C. Cash flows from financing activitiesa) Cash receipts from financing activitiesCash receipts from an increase in long-term financial liabilities 0 185,000,000Cash receipts from an increase in short-term financial liabilities 628,708 0628,708 185,000,000b) Cash expenditures from financing activitiesInterest paid on financing activities –77,033,064 –48,646,259Cash expenditures for the repayment of long-term financial liabilities –66,675,925 –133,910,233Cash expenditures for the repayment of short-term financial liabilities 0 –21,056,890Cash expenditures from the payment of dividends and other profit participation 0 –2,950,000–143,708,988 –206,563,382c) Net cash receipts or expenditures from financing activities (a + b) –143,080,280 –21,563,382Č. Closing balance of cash 1,652,326 5,235,784x) Net increase/decrease in cash in the period (sum total of net cash Ac, Bc and Cc) –3,583,458 –1,753,337y) Opening balance of cash 5,235,784 6,989,120The accounting guidelines and explanatory notes are a constituent part of the Financial Statements and should be read in connection therewith.65annual report 2011 dars

Statement of Changes in Equity for the period from 31 December 2009 to 31December 2011In EUR (without cents)I.Called-upcapital1.Share capitalII.CapitalreservesIII.Revenue reserves1.Legal reserves4.OtherrevenuereservesV.RetainedearningsVI.Net profit orloss for theperiod1.Net profit forthe financialyearTotal equityD. Balance as at 31 December 2009 212,823 26,428,057 21,282 17,109,474 1,480,641 10,161,585 55,413,862B.1. Increase/decrease in equitycapital - transactions with ownersa) Called-up share capital 2,319,653,522 27 0 0 0 0 2,319,653,54966annual report 2011 darsg) Dividend payment –1,480,641 –1,469,359 –2,950,000B.2. Total comprehensive income forthe reporting perioda) Net profit/loss for the reportingperiod30,463,365 30,463,365B.3. Increase/decrease in capitalb) Allocation of a part of net profit forthe reporting period to other capitalcomponents pursuant to a decision1,523,168 14,470,098 –15,993,266 0of the managerial and supervisorybodiesc) Allocation of net profit/loss for thereporting period for the formationof additional reserves pursuant to a8,692,226 –8,692,226 0General Meeting decisionA.1. Balance as at 31 December 2010 2,319,866,345 26,428,084 1,544,450 40,271,798 0 14,470,098 2,402,580,775B.2. Total comprehensive income forthe reporting perioda) Net profit/loss for the reportingperiod24,609,552 24,609,552B.3. Increase/decrease in capitalb) Allocation of a part of net profit forthe reporting period to other capitalcomponents pursuant to a decision1,230,478 11,689,537 –12,920,015 0of the managerial and supervisorybodiesc) Allocation of net profit/loss for thereporting period for the formationof additional reserves pursuant to a14,470,098 –14,470,098 0General Meeting decisionD. Balance as at 31 December 2011 2,319,866,345 26,428,084 2,774,928 66,431,433 0 11,689,537 2,427,190,327The accounting guidelines and explanatory notes are a constituent part of the Financial Statements and should be read in connection therewith.

Statement of Accumulated Profit and Proposal Regarding Its Appropriation31 Dec 2011 31 Dec 2010A. Net profit or loss for the year 24,609,552 30,463,365B. Retained earnings 0 0C. Increase in revenue reservesC1. Increase in legal reserves 1,230,478 1,523,168C2. Increase in other reserves 11,689,537 14,470,098C. ACCUMULATED PROFIT FOR THE PERIOD 11,689,537 14,470,098The net profit of DARS d.d. for 2011 will be allocated to legal reserves and other revenue reserves on therecommendation of the Management and Supervisory Boards of DARS d.d. and in accordance with CA-1. Theaccumulated profit of DARS d.d. as at 31 December 2011 comprises EUR 11,689,537. The General Meeting ofDARS d.d. will decide on the allocation of accumulated profit in accordance with CA-1.67annual report 2011 dars

II.2 REPORTING COMPANYDARS d.d. is a registered legal entity, with its registered office in Slovenia. The address of the registered officeof the Company is Ulica XIV. divizije 4, 3000 Celje. The Company compiles the financial statements and reportsas defined in the first paragraph of Article 60 of CA-1 in accordance with SAS. The Management Boardof the Company confirmed the financial statements on 23 March 2012.II.3 SIGNIFICANT ACCOUNTING POLICIESBasis for the preparation of the financial statementsThe financial statements of DARS d.d., together with notes and disclosures of the most important categories,have been prepared in accordance with the accounting and reporting requirements of the SAS and in accordancewith the provisions of CA-1 and MCRSA-1.Two fundamental accounting assumptions were taken into account in the preparation of the financial statements:observance of the accrual basis and principle of a going concern.The financial statements are compiled in euros. All items denominated in foreign currency have been convertedinto euros using the reference exchange rate of the European Central Bank, applicable on the last dayof the accounting period.The comparable information is in accordance with the disclosures referring to the current reporting period.In the compilation of the financial statements, management must give an assessment, appraisal and assumptionsthat impact the use of the accounting policies and disclosed value of assets, liabilities, revenues andexpenses. Actual results may deviate from these assessments. The assessments and aforementioned presumptionsmust be evaluated on an ongoing basis. Amendments to accounting assessments are recognisedfor the period in which the assessment is amended and for all future years to which the amendment applies.68Intangible fixed assets and long-term deferred costs accrued revenueIntangible fixed assets comprise investments in acquired industrial property rights (licenses, software).annual report 2011 darsIntangible fixed assets are initially recognised at cost. The cost comprises all costs required for their purchaseor costs incurred in preparing them for their intended use. After initial recognition, they are carried at cost,minus accumulated amortisation.The Company independently determines the annual depreciation rate based on the useful life of an individualintangible asset possessing a finite useful life.Intangible fixed assets are presented in the balance sheet as a collective item at their carrying amount, whichis the amount at which an asset is recognised after deducting any accumulated amortisation from its cost.

Impairments of assets or cash-generating units are recognised whenever their book values exceed theirreplacement value. Impairments are shown in the income statement. If the Company operates with an adequateprofit and within the scope of business plans, no need for impairment exists.Property, plant and equipmentProperty, plant and equipment comprise land, buildings, equipment, and tangible assets being constructedor manufactured. Such assets are presented in the balance sheet as a collective item, by type of asset, attheir carrying amount, which is the amount at which an asset is recognised after deducting any accumulateddepreciation from its cost. Assets that can no longer be used because they are defective, obsolete, or similar,are permanently withdrawn from use.An item of property, plant and equipment is, on initial recognition, measured at cost. This comprises its purchaseprice, import duties and non-refundable purchase taxes, as well as any directly attributable costs ofbringing them into working condition.Subsequent expenses associated with property, plant and equipment increase their cost if they increase thefuture economic benefits generated by such assets in excess of the originally assessed ones or result in anextension of the useful lives of such assets. A motorway section is activated on the day it is opened to traffic,and after that date, the costs incurred in connection to the construction of the motorway section increasethe purchase price of the motorway section once a year, i.e. on 31 December of the current year.The purchase price of property, plant and equipment also consists of borrowing costs connected to theacquisition of property, plant and equipment up to the preparation of their intended use. Borrowing costscomprise:− interest,− other costs of the Company connected to the borrowing of funds.The Company capitalises borrowing costs that are directly attributable to the acquisition, construction orproduction of plant, property and equipment being prepared for use as part of the cost of that asset. Otherborrowing costs are recognised as an expense in the period incurred.Costs directly related to borrowing to finance the construction of motorways increase the purchase price ofthe motorway for the duration of the period the motorway sections for which the loans were taken out areunder construction (up to their preparation for use). The Company ceases capitalising borrowing costs once amotorway segment has been opened to traffic.Repair and maintenance costs are incurred to restore or maintain the future economic benefits expectedfrom the originally assessed standard of performance of an existing item of property, plant and equipment.They are recognised as expenses when they occur.69The cost model is applied for the valuation of property, plant and equipment.Pursuant to MCRSA-1, on 1 January 2010 the Company transferred all plant, property and equipment whichit had managed as off-balance sheet items until 31 December 2009 to its business ledgers (assets of the Republicof Slovenia under the management of DARS d.d.). Since MCRSA-1 was adopted in December 2010, theCompany can begin amortising the month only following the acquisition and restoration of property, plantand equipment; the Company treated the carrying value of the plant, property and equipment it obtainedpursuant to MCRSA-1 at the new purchase prices of those assets until 31 December 2010. As of 1 January2011, the Company implements amortisation from these defined bases.annual report 2011 dars

Slovenian accounting standards do not specify in detail what components make up the substructure ofmotorways; therefore, the Company formed its own definitions thereof. The Company transferred the partof the purchase price of the motorway substructures which is not amortised to motorway superstructuresas this regards expenditures for constructing motorways that would otherwise not be shown as costs. TheCompany classified the following as costs: project costs, costs of financing motorway construction, costs ofsupervising motorway construction and costs of services without which individual motorway segments couldnot be constructed.In accordance with SAS 1 and SAS 13, the Company divides the purchase price of plant, property and equipmentinto major components if these parts have different useful lives and/or usage patterns that are importantin relation to the total purchase price of plant, property and equipment, each part is treated separately.If the purchase price of the plant, property and equipment is large, it can be divided into parts. If these partshave different useful lives and/or usage patterns that are important in relation to the total purchase price ofthe plant, property and equipment, each part is treated separately.The difference between the net proceeds on disposal and the carrying amount of an item of company-ownedproperty, plant and equipment disposed of is recognised by DARS d.d. as operating revenue from revaluationif the former exceeds the latter, or as operating expenses from revaluation if the latter exceeds the former.The Company is obliged to immediately revalue plant, property and equipment and must do so once thecarrying amount exceeds the recoverable value at the latest. The net purchase price or value upon use,whichever is greater, is deemed the recoverable value. Impairments are shown in the income statement. TheCompany assesses possible effects of impairment at least once a year.If an item of plant, property and equipment is sold, the Sales Department based on a Management Boarddecision sells the item; however, the Accounting Department reclassifies it among non-current assets available-for-sale.Amortisation and depreciationThe carrying amount of property, plant and equipment and intangible assets is reduced by the amount ofdepreciation/amortisation. The depreciation of property, plant and equipment and the amortisation of intangibleassets are calculated based on their cost. Following activation, all subsequent investments that increasethe future benefits of the fixed asset or enable a longer service period of the asset (investment maintenance,reconstruction of carriageways and facilities) are included in the base.70The Company determines the annual amortisation rate based on the useful life of an individual item of property,plant and equipment and intangible assets.annual report 2011 darsThe useful life is dependent on:− expected physical wear,− expected technical aging,− expected economic aging,− expected legal or other restrictions on use.In determining the useful life of an individual asset, the shortest period based on each of the aforementionedfactors must be taken into account.Property, plant and equipment begin to be amortised on the first day of the month following its preparation

for use. Plant, property and equipment, i.e. motorways, begin use on the day of commissioning of the motorway,whereby it is not necessary that the investment be concluded or all deficiencies remedied.The carrying value of intangible assets with a finite useful life is reduced by the amount of amortisation.Amortisation begins when the intangible asset with a finite useful life is available for use.The Company amortises plant, property and equipment and intangible assets individually using the straightline method. Land, substructures and assets under construction or acquisition are not depreciated.Pursuant to MCRSA-1, on 1 January 2010, the Company transferred all plant, property and equipment whichit had managed as off-balance sheet items until 31 December 2009 to its business ledgers (assets of the Republicof Slovenia under the management of DARS d.d.). Since MCRSA-1 was adopted in December 2010, theCompany can only begin amortising the month following the acquisition and restoration of property, plantand equipment; the Company treated the carrying value of the plant, property and equipment it obtainedpursuant to MCRSA-1 at the new purchase prices of those assets until 31 December 2010. As of 1 January2011, the Company implements amortisation from these defined bases.Slovenian accounting standards do not specify in detail the components comprising the substructure ofmotorways, so the Company formed its own definitions thereof. The Company transferred the part of thepurchase price of the motorway substructures which is not amortised to motorway superstructures for thisregards expenditures for constructing motorways that would otherwise not be shown as costs. The Companyclassified the following as costs: project costs, costs of financing motorway construction, costs of supervisingmotorway construction and costs of services without which individual motorway segments could not beconstructed.In accordance with SAS 1 and SAS 13, the Company divides the purchase price of plant, property and equipmentinto major components if these parts have different useful lives and/or usage patterns that are importantin relation to the total purchase price of the plant, property and equipment, each part is treatedseparately.The effect of changes is disclosed in detail in Section II.4.1.2 - Property, plant and equipment, and in SectionII.4.2.5 – Write-offs.71annual report 2011 dars

Intangible assets and property, plant and equipment are amortised/depreciatedat the following rates set by the Management Board:Intangible assetsLandMotorway substructuresKey componentsLand used for motorway maintenance bases, business and residentialfacilities, rest stops and surplus alongside motorwaysa) Construction works (preparatory works, earthworks), regionallandscaping costs, costs of archaeological excavations, costs ofbuilding demolition, etc.b) Project costs, costs of financing motorway construction, costs ofsupervising motorway construction and costs of services withoutwhich individual motorway segments could not be constructed, etc.Amortisation rate2011Note: reclassifiedunder Motorwaysuperstructures underb)Amortisation rate20100% 0%0% 0%0%a) Superstructures (carriageways, tampon, etc.) 3% 3%b) Project costs, costs of financing motorway construction, costs ofsupervising motorway construction and costs of services withoutwhich individual motorway segments could not be constructed, etc.c) Drainage equipment (drains, oil separators, retaining basins, waterprotection facilities)3%Note: a portion of theMotorway substructureunder b)6% 3%72annual report 2011 darsMotorway superstructuresMotorway structures (viaducts,bridges, tunnels, overpasses,underpasses, supporting walls,etc.)Road infrastructure – otheroperatorsBuildingsEquipmentABC system equipment anddevicesd) Fences (protective and crash barriers, noise protection) 6% 3%e) Traffic signalisation and equipment (vertical and horizontalsignalisation, road lighting, emergency call system, road weatherstation, cable conduits, etc.)f) Traffic control and management system (equipment in controlcentres, measuring devices for collecting traffic data, videodetection system, video surveillance system, modifiable trafficinformation signalisation (portals, semi-portals, roadside noticeboards))6% 3%6% 6%a) Construction works 3% 3%b) Tunnel equipment and electro-mechanical installations 6% 3%State and municipal roads not deemed motorways constructed by DARSd.d. in accordance with NMCPMotorway maintenance bases, toll stations with cabins and overhangs,other constructed facilities alongside motorways (sanitary facilities atrest stops, etc.), the administration building in Celje, holiday facilitiesand apartmentsEquipment (office furnishings, workshop equipment, maintenanceequipment, office supplies, etc.)0% 0%3% 3%20% 20%20% 20%Personal automobiles 20% 20%Machinery 20% 20%Piece inventory 20% 20%Computers and computerequipment50% 50%Software 50% 50%

The annual amortisation and depreciation of property, plant and equipment and intangible assets of theCompany represent an operating expense.Property, plant and equipment and intangible assets is amortised until an asset is fully amortised, even if theasset is no longer in use or is withdrawn from use.The cost of amortising assets derived from donations is replaced at the expense of operating revenue and acorresponding reduction in long-term provisions.Property, plant and equipment are presented in the balance sheet as individual types, by type of asset attheir carrying amount, which is the amount at which an asset is recognised after deducting any accumulateddepreciation from its cost.Non-current assets-available-for-saleNon-current assets-available-for-sale consist of:− property, plant and equipment,− investment property, valued at cost,− other non-current assets.Their book value is reasonably expected to be recovered through a sale in the next 12 months (following thebalance sheet date), rather than through continuing use. An asset ceases to be amortised once it has beendefined as a non-current asset available-for-sale. Such non-current assets available-for-sale are measured bytheir carrying amounts or fair values, less selling costs, and after that, whichever is smaller.Long–term financial investmentsLong-term financial investments are investments which the Company intends to possess for a period longerthan one year, and which are not held for trading. Long-term financial investments are assets held by theCompany to earn returns and thus increase its financial revenue.Long-term financial investments are initially recognised at cost, i.e. the amount of money invested.Deferred tax receivablesDeferred tax assets are the amounts of income tax recoverable in future periods. Deferred tax receivablesare recognised for all deductible temporary differences to the extent that it is probable that taxable profitwill be available, against which the deductible temporary difference can be utilised.Insignificant deferred tax assets are not recognised.73InventoriesAn inventory unit of materials is initially recognised at cost, which comprises its purchase price and anydiscounts given on invoices, import duties and other directly attributable costs of acquisition. The purchaseprice is reduced by any discounts received.The moving average price method is applied to recognise declining quantities of inventories.The Company implements write-offs of inventories if the sale thereof is completely terminated or if they areunmarketable.annual report 2011 dars

If the carrying amount exceeds the historical cost of an item of inventories, a revaluation of inventories iscarried out at the end of business year.Short–term financial investmentsA short-term financial investment is an investment which the Company possesses for less than one year forthe purpose of trading.A derivative can be one of the short-term investments which the Company owns to protect against risks.Short-term financial investments are initially recognised at cost, i.e. the amount of money invested. A revaluationof short-term financial investments to fair value is carried out during and at the end of the businessyear, with the established difference posted under financial revenue or financial expenses.Short-term financial investments denominated in foreign currency are converted into the national currencyon the date they are incurred using the reference exchange rate of the European Central Bank.Short–term operating receivablesShort-term operating receivables comprise short-term trade receivables due from domestic and foreign customers,trade receivables from operations on foreign account, interest receivable on short-term sight depositsand financial investments, advances receivable, input VAT receivable, short-term receivables in connectionto European funds and other receivables.Short-term operating receivables are initially recognised at amounts indicated in relevant documents, providedtheir collection can be assumed. Interest is calculated in accordance with the contract on the maturitydates of the short-term receivables and on the balance sheet date. Foreign currency-denominated receivablesare converted into the national currency on the date they are incurred using the reference exchange rateof the European Central Bank.At the balance sheet date, individual receivables are reassessed on the basis of objective evidence of theircollectability at the end of accounting period. Allowances are set up for doubtful receivables that are believednot to be settled by their due date or in their full amount. Adjustments to receivables are recorded inspecial remedial receivable accounts and are charged against operating expenses from revaluation.74The Company implements ​100 per cent write-off of receivables for which it has performed all actions of agood manager to achieve payment or ascertain that further legal proceedings are economically unjustified,or that bankruptcy proceedings or a compulsory settlement have already been concluded. The followingrelevant supporting documents are required for the write-off of receivables: refusal to certify the status ofclaims, a court decision, receivership or bankruptcy decision and other relevant documents.annual report 2011 darsCash and cash equivalentsCash and cash equivalents include cash in hand, cash in banks, cash in transit and call deposits. Cash in transitcomprises cash that is being transferred from the Company to the bank, but will not be credited to theCompany’s account within the same day.Domestic and foreign currency denominated cash is presented separately. Cash denominated in domesticcurrency is stated at nominal value. Cash denominated in foreign currency is converted into national currencyusing the reference exchange rate of the European Central Bank applicable on the date of receipt. The

alance of cash denominated in foreign currency is converted into the national currency on the last day ofthe business year, using the reference exchange rate of the European Central Bank. Exchange rate differencesarising due to conversion increase financial revenue or financial expenses.CapitalCapital is the Company’s liability to its owners which, prior to the Company ceasing to operate, mature intopayment. The capital of the Company comprises called-up capital, capital reserves, revenue reserves (legaland other revenue reserves) and unallocated net profit for the period.As at 31 December 2010, unregistered paid-up capital in the amount of EUR 2,319,653,522, was entered inthe court register on 31 March 2011, as shown in the balance sheet.The capital reserves of the Company comprise the value of real assets transferred by the Republic of Sloveniato the Company upon its transformation for the purpose of motorway management and maintenance, andthe general capital revaluation adjustment, which was transferred to capital reserves on 1 January 2006, aswell as a surplus of assets which represent the difference between the in-kind contribution of the Republic ofSlovenia and the value of newly-issued shares of the Company.Legal reserves are set up in accordance with the Companies Act. The Company must form legal reservesin the amount of legal and capital reserves defined in points 1 through 3 of Article 64 of CA-1 which mustamount to at least 10 per cent of the Company’s share capital. If the total of the legal and capital reserves definedin points 1 through 3 of Article 64 of the Companies Act do not attain a 10 per cent share of the Company’sshare capital in the business year, five per cent of the net profit must be allocated to legal reserves,reduced by the amount used to cover losses transferred from previous periods in the balance sheet.Other revenue reserves comprise non-nominal capital and are increased annually through the appropriationof net profit.Capital components and changes in equity are disclosed in the Statement of Changes in Equity.Provisions for long–term accrued costs and deferred revenueProvisions are formed by an entity for its present obligations that arise from past events and are expected tobe settled in a period that cannot be defined with certainty, although a reliable estimate can be made of theamount of obligations. Long-term provisions are set up for accrued costs or expenses and are reduced by theamounts for which they were formed in accordance with the plan.In accordance with SAS, the Company formed long-term provisions for retirement benefits and jubilee premiumsbased on an actuarial calculation.75Long-term provisions for long-term accrued costs have also been established with regard to the possible unfavourableoutcome of lawsuits related to motorway construction, reconstruction, management and maintenance, aswell as labour lawsuits. Provisions for lawsuits are formed on the basis of an estimate as to the likely outcome oflawsuits and at a time when the likelihood of a negative outcome for the Company exceeds 50 per cent.Long-term provisions have also been established in the amount co-financed by users of the ABC system,namely third and fourth toll class vehicles. These provisions relate to warranties granted on the sale of electronictags. At the end of each accounting period, long-term provisions are restated to the present value ofexpenditure expected to be required to settle the liability. The warranty granted on an ABC system electronicannual report 2011 dars

tag is 1 (one) year from the date of its purchase. Its useful life is 7 years. If an electronic tag is purchased,used and then returned undamaged within its useful life, the user is entitled to the refund of the proportionateshare of the co-financed amount, taking into account the undepreciated amount of the electronictag. The annual depreciation rate is 14.29%. The claim of refund of a proportionate share of the co-financedamount, taking into account the undepreciated amount of the electronic tag, and the return of the unusednet credit actually paid are possible only on the basis of a written claim with the obligatory statement of theidentification number (ID) and the return of the electronic tag and receipt of purchase (or payment of theco-financed amount).The Company also establishes long-term provisions from long-term accrued costs for the purchase of insuranceperiods for toll collection employees and for severance pay for toll collection workers considered redundantas a result of the introduction of a new toll system, while long-term accrued costs for payment upon theretirement of employees in accordance with the agreement between the unions and the company are notincluded in the pension plan of collective supplementary pension insurance.Long-term accrued costs and deferred revenue comprise deferred revenue expected to cover estimatedexpenses in a period of more than one year. As long-term deferred revenue, the Company also managesearmarked donations for the acquisition of fixed assets. The donations are earmarked to cover depreciationcharges of fixed assets thus acquired and are utilised by transfer to operating revenue.Long–term financial liabilities to banksLong-term financial liabilities to banks also include long-term loans taken out for the acquisition of fixed assets.Long-term financial liabilities which will mature within a year of the balance sheet date are shown as shorttermfinancial liabilities.Long-term financial liabilities are initially recognised at the amounts indicated in relevant documents evidencingthe receipt of cash. Loans denominated in foreign currency are converted into the national currencyon the date they are incurred, using the reference exchange rate of the European Central Bank.Long-term financial liabilities denominated in foreign currency are converted into the national currency onthe last day of the business year, using the reference exchange rate of the European Central Bank.The payment of interests from long-term loans taken out for the purchase of fixed assets increase the acquisitionvalue of fixed assets until the fixed asset for which the loan was taken out is acquired. Following thefixed asset being commissioned, the payment of interest constitutes a financial expense.76The Company incurs debt in its name and for its account. All liabilities arising from loans are secured by aguarantee of the Republic of Slovenia.annual report 2011 darsLong–term financial liabilities from bondsLong-term financial liabilities from bonds are initially recognised at amounts indicated in relevant documentson their establishment evidencing the receipt of cash.The payment of coupons from issued bonds increases the acquisition value of fixed assets until the fixed assetfor which the loan was taken out is acquired. Following the fixed asset being commissioned, the paymentof coupons from issued bonds constitutes financial expenses.

The Company incurs debt in its name and for its account. The liabilities arising from the issued bonds aresecured by a guarantee of the Republic of Slovenia.Long–term operating liabilitiesLong-term operating liabilities are formed in the amount of co-financing of motorway construction by localcommunities and public utility companies for the purposes of such co-financers and following the concludedconstruction of such objects, are transferred by DARS d.d. to the individual co-financers.Short–term financial liabilities to banksShort-term financial liabilities for bank loans for the acquisition of property, plant and equipment comprise:− the short-term portion of long-term liabilities maturing in the following year,− weighted interest on 31 December 2011 for bank loans and bonds issued for motorway constructionand reconstruction, and weighted interest for derivative financial instruments which were concluded toinsure bank loans against changing interest and exchange rate risks.The Company discloses derivative financial instruments in the Statement of Comprehensive Income. TheCompany uses derivative financial instruments exclusively to protect cash flows. The Company shows theeffects of derivative financial instruments on financial revenue or financial expenses.Short–term operating liabilitiesShort-term operating liabilities comprise trade payables to suppliers, contractors of construction works (includingcontractually retained amounts) and third persons, compensation in the form of purchase prices,compensation for land acquired, liabilities to employees and liabilities to state institutions for taxes andcontributions. A special type of short-term operating liability is the liability to customers for advances and forshort-term security deposits received.Short-term operating liabilities are initially recognised at the amounts indicated in the relevant documents,provided that creditors require their settlement. Liabilities denominated in foreign currency are convertedinto national currency on the date they are incurred, using the applicable reference exchange rate of theEuropean Central Bank.Short-term accrued and deferred itemsDeferred costs and accrued revenue are amounts incurred, but not yet charged against an entity’s activities,and they do not yet affect its profit or loss. Deferred costs and accrued revenue comprise thedeferred costs of commission to vignette sales agents and the deferred costs of vignette printing, whichare recognised in the amount equal to the proportionate share of each allowed amount of revenue fromvignettes sold.Short-term accrued costs and deferred revenue comprise accrued costs and short-term deferred revenue.Accrued costs are costs that affect the Company’s profit or loss for the period. Payment obligations are envisagedin the next accounting period. They are accrued on the basis of liabilities recognised in advance. TheCompany also discloses accrued costs as costs for the business success of the Management Board and employeesfor 2011, costs of unutilised annual holidays for 2011 which employees may use up to 30 June 2012,and unpaid overtime of employees earned in 2011.77annual report 2011 dars

Short-term deferred revenue arises when services to be rendered in the future have already been invoiced oreven paid for. Short-term deferred revenue was formed for revenue from tolls collected in the form of topupson electronic toll media (ABC and DARS tags) invoiced and paid in 2011, but not used in the same year.These will be recognised as deferred revenue until they have actually been used by road users. Short-termdeferred revenue also included revenue from vignettes charged in 2011 which will be valid in 2012, and fromhalf-yearly vignettes for one-track vehicles which will be partly or entirely valid in 2012 (a half-yearly vignetteis valid six months from the date of purchase, and the annual vignette for 2012 is valid from 1 December2011 until 31 January 2013).RevenueRevenue is recognised if increases in economic benefits during the accounting period are associated withincreases in assets or decreases in liabilities, and if they can be reliably measured. Revenues are recognisedwhen it can reliably be expected that cash receipts will flow from them to the entity unless such receiptswere realised on the incurrence of revenue. Revenue is classified into operating revenue, financial revenue,and other revenue.Net sales revenue includes:− tolls collected,− rents paid by various service providers to use motorway service areas,− revenue from motorway closures and extraordinary freight transports,− revenue from easements for the installation of facilities and devices of public importance alongsidemotorways,− revenue from telecommunications,− revenue pursuant to performance contracts,− other operating revenue.Financial revenue comprises interest revenue and foreign exchange gains. Financial revenue is recognised,unless there is justified doubt as to its amount and collectability. Interest revenue is recognised on a timeproportion basis, taking account of the outstanding principal amount and the applicable interest rate.Other revenue comprises unusual items that increase profit or loss for the period (damages received, remunerationfor the employment of disabled persons above the quota, etc.).78ExpensesExpenses are recognised if decreases in economic benefits during the accounting period are associated withdecreases in assets or increases in liabilities, and if they can be reliably measured. Expenses are classifiedinto operating expenses, financial expenses and other expenses.annual report 2011 darsThe operating expenses of DARS d.d. comprise expenses associated with motorway construction, reconstruction,management and maintenance.Operating expenses consist of:− costs of materials and cost of goods sold,− cost of services,− labour costs,− write-offs (disclosures connected to calculated amortisation are shown among disclosures of intangibleassets and property, plant and equipment),− other operating expenses.

Financial expenses comprise interest expenses from received loans and issued bonds, expenses from derivativesused to insure against financial risks, foreign exchange losses, default interest and impairment of financialinvestments. Financial expenses are recognised when accrued, regardless of related payments.Other expenses comprise unusual items that reduce the profit or loss for the period. Other operating expensesinclude:− payment of damages based on court decisions,− reimbursement of costs of audit procedures,− other fines.Corporate income taxCorporate income tax is calculated in accordance with the Corporate Income Tax Act. Income tax is payableon the taxable profit generated by the Company during the tax period, and comprised 20 per cent for 2011.Deferred tax is intended to cover temporary differences arising between the tax base of an asset and liabilityand its carrying amount, using the balance sheet liability method in accordance with the valid tax rates at thetime.Cash Flow StatementThe Cash Flow Statement has been prepared using the indirect method (Variant 2) on the basis of data fromthe Balance Sheets as at 31 December 2011 and 31 December 2010, the Income Statement for 2011, andadditional information required for the adjustment of inflows and outflows.The Cash Flow Statement comprises cash flows from operating, investing and financing activities.79annual report 2011 dars

II.4 NOTES TO THE FINANCIAL STATEMENTSMovement of intangible assets in 2011II.4.1 Notes to the balance sheetII.4.1.1 Intangible fixed assets and long-term deferred costs accrued revenueIntangible assets include computer software.In EUR (without cents)Intangible assetsCostBalance as at 31 December 2010 4,731,305Purchases 1,131,578Activation 315,481Transfer between items –177,014Balance as at 31 December 2011 6,001,350Revaluation adjustmentBalance as at 31 December 2010 3,922,944Transfer between items –177,014Amortisation and depreciation 1,120,510Balance as at 31 December 2011 4,866,440Current valueBalance as at 31 December 2010 808,361Balance as at 31 December 2011 1,134,91080annual report 2011 darsMajor additions to intangible assets in 2011:− upgrade of the DARS d.d. Project Information System in the amount of EUR 481,122,− upgrade of software for the toll collection system in the amount of EUR 282,253,− acquisition of software for the supervision and sale of vignettes in the amount of EUR 58,335,− upgrade of software for the infrastructure support system in the amount of EUR 167,600,− upgrade of software for the road database in the amount of EUR 63,156,− upgrade of information support for KAŽIPOT II for informing and monitoring the traffic situation in theamount of EUR 20,900,− upgrade of software for the NAVISION equipment in the amount of EUR 20,126,− upgrade of the GIS application in the amount of EUR 38,086.As at 31 December 2011, no intangible assets were pledged as security for liabilities, and no signs of impairmentwere observed for intangible assets, which predominantly comprise of newly acquired intangible assets.

Review of transferred plant, property and equipmentII.4.1.2 Property, plant and equipmentProperty, plant and equipment comprise land, buildings, equipment, and tangible assets being constructedor manufactured.Pursuant to MCRSA-1, on 1 January 2010 the Company transferred all plant, property and equipment whichit had managed as off-balance sheet items until 31 December 2009 to its business ledgers (assets of theRepublic of Slovenia under the management of DARS d.d.). Since MCRSA-1 was adopted in December 2010,and the Company can only begin amortising one month following the acquisition and restoration of property,plant and equipment, the Company treated the carrying value of the plant, property and equipment itobtained pursuant to MCRSA-1 at the new purchase prices of those assets until 31 December 2010. As of 1January 2011, the Company implements amortisation from these defined bases.Slovenian accounting standards do not specify in detail the components making up the substructure ofmotorways, therefore the Company formed its own definitions thereof. The Company transferred the partof the purchase cost of the motorway substructures, which is not amortised, to motorway superstructures,for this includes expenditures for constructing motorways that would otherwise not be shown as costs. TheCompany classifies the following as constituent parts of the motorway superstructure: project costs, costs offinancing motorway construction, and costs of supervising motorway construction and costs of services withoutwhich individual motorway segments could not be constructed.If the purchase price of plant, property and equipment is high, in accordance with SAS 1 and SAS 13, the Companydivides the purchase price of plant, property and equipment into major components of such as plant,property and equipment. If these parts have different useful lives and/or usage patterns that are important inrelation to the total purchase cost of the plant, property and equipment, each part is treated separately.In EUR (without cents) Substructure Superstructure Buildings TotalBalance as at 31 December 2010 2,037,716,276 1,607,590,947 1,566,353,757 5,211,660,979Cost as at 1 January 2011 1,115,929,498 2,529,377,725 1,566,353,757 5,211,660,979Major acquisitions and activation of property, plant and equipment in 2011 comprised:− motorway investments in the amount of EUR 65,691,393,− demolition of old and construction of new salt bases in the Tepanje maintenance base, and reconstructionof the Ljubljana and Hrušica maintenance bases in the amount of EUR 939,001,− purchase of machinery, devices and connections in the amount of EUR 1,663,292,− purchase of work, haulage and trailer vehicles in the amount of EUR 2,944,197,− upgrade of the toll collection system in the amount of EUR 81,123,− purchase of office and other supplies in the amount of EUR 55,578,− purchase of computer equipment in the amount of EUR 670,776,− purchase of personal and combined vehicles in the amount of EUR 170,024.Transfer between property, plant and equipment items predominantly refers to the transfer of equipmentfrom use, which the Company, due to the exclusion, had previously recorded in the accounts of the equipmentpermanently removed from use.No property, plant and equipment of DARS d.d. were pledged as security for liabilities as at 31 December2011. Loans and bonds issued for the financing of property, plant and equipment of DARS d.d. are secured bya guarantee of the Republic of Slovenia.81annual report 2011 dars

Movement of plant, property and equipment in 2011In EUR (without cents)LandMotorways(substructures,superstructures,facilities, roadinfrastructure –other operators)Buildings(motorway bases,toll stations,administrationbuilding in Celje,holiday units,apartments)Equipment andpiece inventoryPlant, propertyand equipmentunderconstructionTotalCostBalance as at 1 January 2011 32,131,719 5,211,660,978 71,629,373 94,644,032 122,821,664 5,532,887,766New acquisitions in 2011 0 0 0 0 73,735,386 73,735,386Transfer between items 0 0 –190,034 367,048 0 177,014Activation 0 65,691,393 939,001 5,584,990 –72,530,866 –315,481Elimination (divestments, write-offs)in 2011–112,534 0 –40,233 –2,843,337 –86,544 –3,082,648Balance as at 31 December 2011 32,019,185 5,277,352,371 72,338,107 97,752,733 123,939,640 5,603,402,036Revaluation adjustmentBalance as at 1 January 2011 0 0 996,007 77,022,936 0 78,018,943Transfer between items 0 0 –2,375 179,389 0 177,014Amortisation in 2011 0 131,870,655 2,150,540 7,424,171 0 141,445,366Elimination (divestments, write-offs)in 20110 0 –5,871 –2,554,529 0 –2,560,400Balance as at 31 December 2011 0 131,870,655 3,138,301 82,071,967 0 217,080,923Current valueBalance as at 1 January 2011 32,131,719 5,211,660,978 70,633,366 17,621,096 122,821,664 5,454,868,823Balance as at 31 December 2011 32,019,185 5,145,481,716 69,199,806 15,680,766 123,939,640 5,386,321,113II.4.1.3 Long–term financial investmentsThe long-term financial investments of DARS d.d. include a 0.04 per cent stake in the company Slovenskacestna podjetja d.o.o. in the amount of EUR 964, the value of which did not change in 2011.82annual report 2011 darsII.4.1.4 Other long-term operating liabilitiesOther long-term operating liabilities, in the amount of EUR 362,399, refer wholly to claims for reimbursement inthe past for wrongly charged compensation for the use of building land by the Municipality of Pesnica.II.4.1.5 Deferred tax receivablesDeferred tax receivables were predominantly formed from provisions for retirement benefits and jubileepremiums for employees in the amount of EUR 307,899, from provisions for contingent claims arising fromlawsuits in the amount of EUR 1,728,872, and from a revaluation adjustment of receivables in the amount ofEUR 3,170,858.

Movement of deferred tax receivables in 2011in EUR (without cents)Balance as at 1 January 2011 2,081,410Change in provisions for retirement benefits and jubilee bonuses –10,175Change in provisions for redundancies –15,383Change in provisions for contingent claims 33,551Change in provisions for electronic tags 11,503Change due to a revaluation adjustment of receivables 3,170,858Balance as at 31 December 2011 5,271,764Deferred tax receivables are amounts of income tax recoverable in future periods and are directly shownunder capital.II.4.1.6 Assets available-for-saleProperty, plant and equipment intended for sale in the amount of EUR 120,628 are shown under short-termassets. These assets all refer to real estate.II.4.1.7 InventoriesInventories comprise inventories of materials, spare parts, piece inventory and packaging. Inventories increasedby 23% in comparison to the figure on 31 December 2010. Inventories of materials with an 89 percent share comprise the major share in the structure of inventories, and comprise inventories of spreadingmaterials accounting for 54% and inventories of vignettes for 2012 accounting for 14%.In EUR (without cents) 31 Dec 2011 Share in % 31 Dec 2010 IndexMaterials 2,210,064 89% 1,706,273 130Spare parts 131,560 5% 109,674 120Piece inventory and packaging 144,222 6% 198,467 73Total 2,485,847 100% 2,014,414 123The sale of vignettes for 2011 for personal and motor vehicles concluded on 30 November 2011. In accordancewith SAS 4.41, the inventory of vignettes for 2011 were written off on 30 November 2011 and chargedagainst operating expenses from the revaluation in the amount of EUR 97,559, which is the cost of the vignettes.No significant surpluses or deficits were found during the interim and annual inventory taking of vignettes.As at 31 December 2011, no inventories were pledged as security for liabilities. The book value of inventoriesdoes not exceed their recoverable value. The inventories of DARS d.d. represent current inventories.The inventories did not show signs of impairment; therefore no impairment was implemented.83annual report 2011 dars

II.4.1.8 Short-term financial investments in othersAs at 31 December 2011, short-term financial investments in others comprised:− short-term deposits with banks in the amount of EUR 97,000,000, with an average maturity of 73 days andaverage weighted interest rate of 2.91%,− a short-term over-night deposit with a bank in the amount of EUR 1,276,200, with an interest rate of 0.80%.Short-term investments are not exposed to credit risk, i.e. the risk of loss due to the counterparty’s failure tomeet its obligations is minimal, because the Company invests its surplus liquid funds in deposits with firstclassbanks domiciled in the Republic of Slovenia.II.4.1.9 Short–term operating receivablesIn EUR (without cents) 31 Dec 2011 Share in % 31 Dec 2010 IndexShort–term trade receivables: 10,636,125 33% 11,117,204 96- toll receivables 8,606,492 27% 8,490,326 101- receivables from the use of motorway service areas 771,429 2% 390,425 198- receivables from motorway closures 376,540 1% 704,114 53- other short-term trade receivables 2,301,424 7% 1,532,339 150- revaluation adjustment of other short-term receivables –1,419,760 –4% 0 0Short–term operating receivables due from others: 21,818,707 67% 29,375,577 74- advances receivable for operating current assets 2,375 0% 1,238 192- short-term receivables from operations for foreign account 33,491,543 103% 26,583,574 126- revaluation adjustment of short-term receivables for operations for foreign account –14,434,530 –44% 0 -- short-term receivables from financial revenue 254,274 1% 226,034 112- input VAT receivable 1,082,503 3% 690,086 157- other short-term receivables due from state institutions 96,062 0% 86,900 111- other short-term receivables 1,326,479 4% 1,787,745 74Total 32,454,832 100% 40,492,781 8084annual report 2011 darsThe majority portion of short-term operating receivables are receivables from operations for foreign accountto the Republic of Slovenia for transactions from Article 4 of MCRSA-1 and fees from performance contractin the amount of EUR 21,705,610 and receivables due from domestic commission agents and foreign salesagents in the amount of EUR 11,785,933. Twenty-seven per cent of all short-term trade receivables representtrade receivables for tolls, while the remainder comprises other short-term receivables.These transactions are performed by DARS d.d. on behalf of, and for the account of, the Republic of Slovenia,pursuant to Article 4 of MCRSA-1. The Company discloses such transactions in its business ledgers astransactions for a foreign account. This regards tasks connected to spatial planning and the arrangement ofmotorways and the acquisition of real estate required for the construction of motorways which the Companyperforms in accordance with performance contract. DARS d.d. records receivables due from the Republic ofSlovenia for implemented transactions. The funds for such transactions are guaranteed from the budget ofthe Republic of Slovenia in accordance with Article 10 of MCRSA-1.

Breakdown of short-term trade receivables by maturityIn EUR (without cents) Unmatured Up to 60 days Over 60 days TotalShort-term receivables from operations for foreign account 19,051,893 5,119 14,434,530 33,491,543Revaluation adjustment of short-term receivables from operationsfor foreign account0 0 –14,434,530 –14,434,530Short–term trade receivables 10,140,494 201,577 1,713,815 12,055,885Revaluation adjustment of trade receivables 0 0 –1,419,760 –1,419,760As at 31 December 2011, no receivables were pledged as security for liabilities. The short-term operatingreceivables of DARS d.d. are not secured and comprise the Company’s current receivables.The Company carried out a revaluation adjustment of short-term operating receivables in the amount of EUR1,419,760 and a revaluation adjustment in the amount of EUR 14,434,530 for short-term receivables for operationson foreign account. These comprise receivables from operations for foreign account to the Republicof Slovenia for transactions, defined in Article 4 of MCRSA-1, in the amount of EUR 15,236,248, still open atthe end of 2010, when the Company was unable to reconcile the situation under this heading with the State.Even on 31 December 2011, the Company believes that it is entitled to these receivables; however, the Statedoes not recognise such receivables even in 2011, and based on their maturities, implemented a precautionaryrevaluation adjustment for the full extent of the receivables.II.4.1.10 Cash and cash equivalentsIn EUR (without cents) 31 Dec 2011 Share in % 31 Dec 2010 IndexCash in banks 1,020,090 62% 788,939 129Call deposits 46,139 3% 4,000,000 1Cash in hand 1,590 0% 1,846 86Cash in toll booths 306,400 19% 305,180 100Cash in transit 278,107 17% 139,819 199Cash and cash equivalents 1,652,326 100% 5,235,784 32The item ‘cash in transit’ comprises tolls not yet on the Company’s transaction account. Upon the annualinventory of cash in transit from collected tolls as at 30 November 2011, the Company reconciled the balancein the books of account with the actual balance.85II.4.1.11 Short-term deferred costs and accrued revenueShort-term deferred costs and accrued revenues in the amount of EUR 972,976 refer to current deferredcosts which will be charged to profit or loss in future accounting periods.Short-term deferred costs and accrued revenue include current deferred costs of commission fees to salesagents based on the value of vignettes sold in the amount of EUR 369,757 and current deferred costs for thelease of Microsoft licensed software in the amount of EUR 250,619.annual report 2011 dars

II.4.1.12 CapitalThe movement in equity is shown in the Statement of Changes in Equity for the period from 1 January to 31December 2011, with the reasons for each change in equity given. Total capital comprises a part of the Company’snet worth.Capital reflects owner financing of the Company and represents the Company’s liabilities to its owners. It isdetermined by both the amounts invested in the Company by the owners and by amounts occurring in theCompany’s operations.The Company’s share capital amounts to EUR 2,319,866,345 and is divided into 55,592,292 ordinary registeredno-par shares owned by the Republic of Slovenia. The book value of the shares as at 31 December2011 was EUR 43.66. It is calculated as a ratio between the total value of capital and the number of shares.The shares give their holders the full right to participate in the management of the Company, the right to aprofit share (dividend), and the right to an adequate part of the remainder of assets upon liquidation or thebankruptcy of the Company.The Company’s capital increased by EUR 14,470,098 in 2011 due to a General Meeting Decision, and comprisesthe formation of other revenue reserves. During the preparation of the financial statements, legal reservesin the amount of EUR 1,230,478 were created in accordance with CA-1, while other revenue reservesin the amount of EUR 11,689,537 were formed pursuant to the management’s decision.II.4.1.13 Provisions for long–term accrued costs and deferred revenueThe Company formed long-term deferred revenue in 2011 for EU funds received for the preparation of spatialand project documentation and motorway construction or tasks related to them (improving traffic safety– construction of traffic control and management systems). The Company obtained the assets within the EUCohesion Fund, TEN-T projects and EasyWay programme.86annual report 2011 darsIn accordance with SAS, the Company formed long-term provisions for retirement benefits and jubilee premiumsbased on an actuarial calculation. The actuarial calculation as of 31 December 2011 was performed for each employee,so that it took into account the costs of retirement benefits appertaining to them on the basis of employmentcontracts and the cost of all expected jubilee premiums for the total service period until retirement. Thecalculation of provisions is based on actuarial calculations, which took the following assumptions into account:− the long-term nominal interest rate is determined as 3.02%, in accordance with standard IAS 19 basedon the average maturity in the Company, which is 16.7 years,− the expected long-term growth in the amount of jubilee awards and non-taxable amounts in the calculationof the expected long term inflation rate of 3.0% per year,− employee turnover, which is mainly dependent on age,− the expected mortality of workers in accordance with the Slovenian 2000-2002 mortality tables, separatelyby gender,− future long-term nominal growth in salaries of 2.5% per year.In 2006, the Company began realising a voluntary collective supplementary pension insurance scheme. Inaccordance with an agreement concluded with trade unions, all the Company’s employees were entitledto join this scheme, except those who were of retirement age on 31 December 2006, i.e. 50 years (women)and 55 years (men). The employer will pay these employees a lump sum equal to the interest-free premiumsit would have to pay on their behalf had they been included in the pension scheme. The Company formedlong-term provisions for this purpose.

The movement of long-term provisions and accrued costs and deferred revenue in 2011In EUR (without cents)In previous years, the Company establishes long-term provisions for long-term accrued costs related to employmentrelationships that would arise upon the transition from electronic toll collection to the free-flow traffic system.The electronic toll collection system, where motorway users pay fees for use of motorways based on distancetravelled, is the final vision and objective of the toll collection system in the Republic of Slovenia. The Governmentof the Republic of Slovenia adopted the Action Plan for the Introduction of ETS in FTF on 26 November 2009. TheAction Plan defined the activities which would enable the implementation of the free-flow electronic toll collectionsystem for vehicles over 3,500 kg in 2012 and for private vehicles in 2014. A reassessment of the requiredlong-term provisions for the anticipated costs of restructuring of the Tolling Implementation Division was carriedout on 31 December 2011, and based on the Restructuring Plan, the Company adopted a resolution on the reconciliationof long-term provisions formed for the purchase of the insurance period for redundant employees and aportion of provisions for severance payments for redundant employees with an assessment of envisaged costs.Long-term provisions have also been set up in the amount co-financed by users of the ABC system, namely thirdand fourth toll class vehicles. These provisions relate to warranties granted on the sale of electronic tags. At theend of each accounting period, long-term provisions are restated to the present value of expenditure requiredto settle the liability. The warranty granted on an ABC system electronic tag is 1 (one) year from the date of itsacceptance. Its useful life is 7 years. If an electronic tag is purchased, used and then returned undamaged withinits useful life, the user is entitled to the refund of the proportionate share of the co-financed amount, takinginto account the undepreciated amount of the electronic tag. The annual depreciation rate is 14.29%. The claimfor a refund of a proportionate share of the co-financed amount, taking into account the undepreciated amountof the electronic tag and the return of the unused net credit actually paid, is possible only on the basis of a writtenclaim with the obligatory statement of the identification number (ID) and the return of the electronic tagand receipt of purchase (or payment of the co-financed amount).Balance as at 1Jan 2011Use in 2011 Reversal in 2011Additionalcreation in 2011Balance as at 31Dec 2011Claims related to motorway operation and maintenance 7,902 0 5,352 96 2,646Claims related to employment relationships 25,368 25,368 0 31,990 31,990Claims related to construction and reconstruction 16,919,947 505,687 491,366 1,331,195 17,254,088Redundancies due to the change in the toll system 314,774 0 76,913 0 237,861Provisions for retirement benefits 1,345,276 65,270 0 114,548 1,394,554Provisions for jubilee premiums 629,355 87,593 0 89,432 631,194Provisions for voluntary supplementary pension insurance 88,265 24,223 0 19,076 83,118Depreciation of holiday facilities and apartments 220,758 10,712 0 0 210,046Return of electronic tags 250,569 7,415 48,248 170,690 365,59787Long-term accruals and deferrals – lease of optic fibres 590,700 49,695 0 0 541,005Cashed-in guarantees 2,785,538 1,394,181 28,978 1,410,717 2,773,096State subsidies received 62,358,266 16,119,403 0 3,376,061 49,614,924Total 85,536,717 18,289,547 650,858 6,543,805 73,140,118Provisions and long-term accrued costs and deferred revenue are formed for the following purposes:− The Company shows long-term provisions established for long-term accrued costs with regard to thepossible unfavourable outcome of lawsuits related to motorway operation and maintenance in theannual report 2011 dars

−−−−−−−−amount of EUR 2,646, labour lawsuits in the amount of EUR 31,990 and lawsuits related to motorwayconstruction and reconstruction in the amount of EUR 17,254,088.During 2005-2007, provisions were formed and charged against long-term accrued costs for the purchaseof the insurance period and severance pay for employees who would become redundant followingthe transition from the electronic toll collection to free-flow traffic system. The Government of the Republicof Slovenia adopted the Action Plan for the Introduction of ETS in FTF on 26 November 2009. TheAction Plan defined activities which would enable the implementation of the free-flow electronic tollcollection system for vehicles over 3,500 kg in 2012 and for personal vehicles in 2014. A reassessmentof the required long-term provisions for anticipated costs of restructuring of the Tolling ImplementationDivision was carried out on 31 December 2011, and based on the Restructuring Plan, the Company formedprovisions for redundant employees in the amount of EUR 237,861.Based on an actuarial calculation, provisions were set up on 31 December 2011 for jubilee premiums inthe amount of EUR 631,194.Provisions in the amount of EUR 83,118 were formed on 31 December 2011 for retirement benefits foremployees not included in the pension scheme of collective supplementary pension insurance under theagreement between trade unions and the Company.In previous years, long-term accrued costs and deferred revenue were set up from grant funds in theamount of the acquisition values of holiday facilities and apartments, which served to cover the costs ofdepreciation of the holiday facilities comprising furnishings and apartments throughout their service lives.In 2011, the denoted provisions decreased by the costs of amortisation in the amount of EUR 10,712.Provisions in the amount of EUR 365,597 (the buyers of electronic tags are entitled to return electronictags within seven years from the date of purchase) were formed on 31 December 2011 for the settlementof contingent liabilities arising from the return of purchase price upon a possible return.The Company also showed long-term deferred revenue from advance users’ purchases of optic fibres inthe amount of EUR 541,005 among long-term accrued costs and deferred revenue.The Company formed long-term accrued costs and deferred revenue for assets arising from the calling ofguarantees for performance and the remedying of errors in the amount of EUR 2,773,096.As at 31 December 2011, the Company discloses long-term accrued costs and deferred revenue in thetotal amount of EUR 49,614,924 for State funds received for the acquisition of property, plant and equipment.The increase in 2011 is the result of an inflow of funds from the EU Cohesion Fund, TEN-T projectsand the EasyWay programme. Long-term accrued costs and deferred revenue serve to cover coststhat arise. In 2011, EUR 16,119,403 of deferred and accrued costs and revenue were disbursed.88annual report 2011 darsII.4.1.14 Long-term financial liabilitiesThe Company obtains loans on the international and domestic financial markets for its operational needs.The aim of the loans is to finance motorway construction and reconstruction. The Company did not take anyloans in 2011. All loans are secured by a guarantee of the Republic of Slovenia.The interest rates and manner of calculating the interest on loans are contractually defined and constitutea business secret. The weighted annual interest rate for the total loan of DARS d.d. amounted to 2.71% annuallyon 31 December 2011. As at 31 December 2011, the annual interest rate of total loans of DARS d.d.ranged from 1.56 to 5.05%.

Long-term financial liabilities fully relate to motorway construction and reconstruction.In EUR (without cents) 31 Dec 2011 Share in %Long-term loans acquired from domestic banks 943,984,217 33%Long-term loans acquired from foreign banks 1,682,526,888 60%Long-term loans acquired from foreign entities 41,404,419 1%Long-term bonds issued 160,364,547 6%Total 2,828,280,071 100%Long-term financial liabilities by maturityIn EUR (without cents) 31 Dec 2011 Share in %Long-term financial liabilities with a maturity of up to 5 years 906,916,577 32%Long-term financial liabilities with a maturity over 5 years 1,921,363,494 68%Total 2,828,280,071 100%Movement of long-term financial liabilities in 2011Long-term financial liabilitiesBalance as at31 Dec 2010Increases in 2011 Decreases in 2011Balance as at31 Dec 2011European Investment Bank 1,006,365,867 0 49,264,000 957,101,867Nova Ljubljanska banka 390,000,000 0 15,312,500 374,687,500Kreditanstalt für Wiederaufbau 385,708,371 0 5,283,350 380,425,022Consortium of Slovenian banks 382,322,711 0 18,378,247 363,944,464Depfa Bank 225,000,000 0 0 225,000,000Unicredit Banka Slovenija 133,696,712 0 8,335,837 125,360,875Kommunalkredit 70,000,000 0 0 70,000,000Hypo Alpe Adria Bank 60,449,857 0 1,458,479 58,991,378BIIS 50,000,000 0 0 50,000,000Autovie Venete S.p.A. 44,589,374 0 3,184,955 41,404,418Banka Koper 23,333,333 0 2,333,333 21,000,000Bonds 160,364,547 0 0 160,364,547Total 2,931,830,772 0 103,550,701 2,828,280,07189annual report 2011 dars

II.4.1.15 Long–term financial liabilities to banksBalance of the long-term principal from bank loans by individual credit institutionIn EUR (without cents)Lender 31 Dec 2011 Share in%Consortium of Slovenian banks 363,944,465 14%Hypo Alpe Adria Bank 58,991,378 2%Unicredit Banka Slovenija 125,360,875 5%Banka Koper 21,000,000 1%NLB 374,687,500 14%European Investment Bank 957,101,867 36%Kreditanstalt für Wiederaufbau 380,425,022 14%Depfa Bank 225,000,000 8%Autovie Venete S.p.A. 41,404,418 2%BIIS 50,000,000 2%Kommunalkredit Austria AG 70,000,000 3%Total 2,667,915,524 100%a. Loans from the Consortium of Slovenian banksDARS d.d. took seven loans from the consortium of domestic banks during the period 1996-2004. A total ofEUR 4,962,514 in loans was repaid to the Consortium of Slovenian banks in 2011.Long-term liabilities to the consortium of banks and maturity datesType Repayment period In EUR (without cents)I from 2002 to 2016 96,840,055II from 2004 to 2019 41,156,718III from 2007 to 2019 65,888,512IV from 2008 to 2020 32,719,548V from 2007 to 2020 37,517,519VI from 2009 to 2021 30,982,44890VII from 2012 to 2024 58,839,665Total 363,944,465annual report 2011 darsb. Loans from Hypo Alpe Adria BankThe Company took three loans from Hypo Alpe Adria Bank in 2003, 2004 and 2005. A total of EUR 416,521 inloans was repaid to the Hypo Alpe Adria Bank in 2011.

Long-term liabilities to Hypo Alpe Adria Bank and maturity datesType Repayment period In EUR (without cents)I from 2011 to 2023 23,741,694II from 2012 to 2024 14,385,054III from 2014 to 2023 20,864,630Total 58,991,378c. Loans from Unicredit banka SlovenijaThe Company took three loans from Unicredit banka in 2005, 2006 and 2009. The loan taken out in 2006 wasintended for refinancing and early repayment of loans taken out with the bank Kreditanstalt für Wiederaufbau.A total of EUR 7,501,252 in loans was repaid to the Unicredit banka Slovenija in 2011.Long-term liabilities to Unicredit banka Slovenija and maturity datesType Repayment period In EUR (without cents)I from 2011 to 2023 18,360,875II from 2007 to 2021 60,000,000III 2014 47,000,000Total 125,360,875Long-term liability to Banka Koper and maturity dated. Loan from Banka KoperIn 2006 DARS d.d. took a loan from Banka Koper for the purpose of refinancing and early repayment of loansfrom the bank Kreditanstalt für Wiederaufbau. A total of EUR 2,333,333 for loans was repaid to Banka Koperin 2011.Type Repayment period In EUR (without cents)I from 2007 to 2021 21,000,000Total 21,000,000e. Loans from NLBDARS d.d. took two loans from NLB in 2007 and 2008 which were devoted entirely to the financing of motorwayconstruction. No principal loan repayments to NLB matured in 2011.91Long-term liabilities to NLB and maturity datesType Repayment period In EUR (without cents)I from 2012 to 2027 229,687,500II from 2015 to 2027 145,000,000Total 374,687,500annual report 2011 dars

f. Loans from the European Investment Bank (EIB)The loans from the European Investment Bank were taken during the period 1994-2006, with EUR 42,994,000of the amount being repaid in 2011. The remainder of the loans falls due between 2014 and 2037.Long-term liabilities to the European Investment Bank and maturity datesType Repayment period In EUR (without cents)A, B, C from 2000 to 2014, 2015, 2016 18,205,201II from 2003 to 2018 47,666,667III from 2004 to 2019 75,833,333IV from 2005 to 2019 74,666,666V from 2007 to 2027 87,000,000VI from 2012 to 2029 103,730,000VII from 2014 to 2037 250,000,000VIII from 2015 to 2033 300,000,000Total 957,101,867g. Loan from Kreditanstalt für Wiederaufbau (KfW)The first loan from Kreditanstalt für Wiederaufbau was taken in 1997. DARS d.d. took additional three loansfrom the bank Kreditanstalt für Wiederaufbau in 2008 and 2009, also earmarked for financing motorwayconstruction. The amount of EUR 5,283,350 was repaid in 2011 for the loans taken from Kreditanstalt fürWiederaufbau (KfW I).Long-term liabilities to Kreditanstalt für Wiederaufbau and repayment datesType Repayment period In EUR (without cents)I from 2005 to 2014 7,925,022II from 2013 to 2029 267,500,000II 2014 55,000,000II 2014 50,000,000Total 380,425,02292h. Loans from Depfa Bank (DEPFA)The Company took two loans totalling EUR 225,000,000 from Depfa Bank in 2006. No principal loan repaymentsto Depfa Bank matured in 2011.annual report 2011 darsLong-term liabilities to Depfa Bank and repayment datesType Repayment period In EUR (without cents)I from 2014 to 2024 75,000,000II from 2013 to 2021 150,000,000Total 225,000,000

Long-term liabilities to AVV and repayment datesi. Loan from Autovie Venete (AVV)The loan obtained by DARS d.d. from Autovie Venete was obtained on the basis of a memorandum of consentbetween the Government of the Republic of Slovenia and the Government of the Republic of Italy forthe construction of motorway facilities required for connecting the Slovenian and Italian motorway networks.The loan was taken in 2000. The amount of EUR 3,184,955 was repaid in 2011 for the loans taken from AutovieVenete.Type Repayment period In EUR (without cents)I from 2011 to 2025 41,404,418Total 41,404,418Long-term liabilities to BIIS and repayment datesj. Loan from Banca Infrastrutture Innovazione e Sviluppo (BIIS)The Company took a loan from BIIS in 2009 in the amount of EUR 50,000,000. No loan principal repaymentsto BIIS matured in 2011.Type Repayment period In EUR (without cents)I 2014 50,000,000Total 50,000,000k. Loan from Kommunalkredit Austria AG (Kommunalkredit)DARS d.d. took a loan in the amount of EUR 70,000,000 in 2010 from the bank Kommunalkredit Austria AG. Theloan has a fixed interest rate. No loan principal repayments to Kommunalkredit Austria AG matured in 2011.Long-term liabilities to Kommunalkredit and repayment datesType Repayment period In EUR (without cents)I from 2015 to 2020 70,000,000Total 70,000,000II.4.1.16 Long–term financial liabilities from bondsDARS d.d. issued three series of bonds in 2004 and 2005 for the financing of motorway construction and reconstruction.The liabilities arising from the issued bonds are secured by a guarantee of the Republic of Slovenia.93IssueMaturitySize of issueIn EUR (without cents)DRS1 2024 56,042,047DRS2 2025 61,758,920DRS3 2020 42,563,580Total 160,364,547annual report 2011 dars

a. DARS bonds of 1 st issue (DRS1)In 2004, the bonds of first issue, designated DRS1, were issued in the aggregate nominal amount of EUR56,042,047. The principal is due in its total amount in 2024. The annual coupon rate is 5.1%. The bonds aretraded on the Ljubljana Stock Exchange.b. DARS bonds of 2 nd issue (DRS2)In 2005, the bonds of second issue, designated DRS2, were issued in the aggregate nominal amount of EUR61,758,920. The principal is due in its total amount in 2025. The annual coupon rate is 4.5%. The bonds aretraded on the Ljubljana Stock Exchange.c. DARS bonds of 3 rd issue (DRS3)In 2005, the bonds of third issue, designated DRS3, were issued in the aggregate nominal amount of EUR42,563,580. The principal is due in its total amount in 2020. The annual coupon rate is 4.0%. The bonds aretraded on the Ljubljana Stock Exchange.II.4.1.17 Long–term operating liabilitiesLong-term operating liabilities include liabilities in the amount of EUR 4,027,801 from the co-financers ofaccompanying infrastructure (predominantly municipalities) constructed within the scope of the motorwayinfrastructure, and do not represent motorways. The Company must handover this infrastructure to the cofinancersafter its construction.II.4.1.18 Short–term financial liabilitiesShort-term liabilities represent the short-term portion of long-term financial liabilities maturing in the followingyear and interest due from bank loans, bonds issued and derivative financial instruments.94annual report 2011 dars

Short-term financial liabilities for bank loans for the acquisition of plant, property and equipment comprise:a. a portion of the principal of short-term loans due for payment in 2012In EUR (without cents)Lender 31 Dec 2011 31 Dec 2010European Investment Bank I 5,994,000 5,994,000European Investment Bank II 8,666,667 8,666,667European Investment Bank III 11,666,667 11,666,667European Investment Bank IV 10,666,667 10,666,667European Investment Bank V 6,000,000 6,000,000European Investment Bank VI 6,270,000 0Kreditanstalt für Wiederaufbau I 5,283,350 5,283,350Autovie Venete 3,184,955 3,184,955Bank Consortium I 13,270,262 2,412,775Bank Consortium II 448,169 448,169Bank Consortium III 700,942 700,942Bank Consortium IV 344,416 344,416Bank Consortium V 397,011 397,011Bank Consortium VI 659,201 659,201Bank Consortium VII 2,558,246 0Hypo Alpe Adria I 833,042 416,521Hypo Alpe Adria II 625,437 0Unicredit banka I 1,669,170 834,585Unicredit banka II 6,666,667 6,666,667Banka Koper 2,333,333 2,333,333Nova Ljubljanska banka 15,312,500 0Total principal 103,550,701 66,675,925b. other short-term financial liabilities as at 31 December 2011In EUR (without cents) 31 Dec 2011 31 Dec 2010Interest payable on long-term loans 10,973,376 10,716,825Interest payable on bonds 3,411,653 3,416,071Interest payable on derivative financial instruments 217,647 315,401Other financial liabilities 475,673 1,344Liabilities from derivative financial instruments 6,965,612 7,232,011Total 22,043,961 21,681,652Short-term interest payable includes interest accrued by 31 December 2011 and interest accounted for asat 31 December 2011, which represents the costs for 2012. They are short-term deferred costs. The interestrate and manner of calculating interests for concluded transactions are contractually defined, and as at 31December 2011, ranged from 1.56 to 5.05% annually.95annual report 2011 dars

In previous years, as protection against interest rate risk, the Company decided, in accordance with its activerisk management policy on finance, to reduce its exposure to the risk of changed interest rates on the market.Thus, as at 31 December 2011, the share of exposure to variable interest rates accounted for 57% of thevalue of its debt portfolio, while exposure to fixed interest rates attained a 41% share. The remaining 2% iscomprised of interest-free loans.Liabilities from derivative financial instruments in the amount of EUR 6,965,612 are liabilities arising from thevaluation of derivative financial instruments on 31 December 2011.A more detailed description of derivative financial instruments concluded by the Company as at 31 December2011:Interest rate hedge of EUR 50 millionDARS d.d. concluded an interest rate hedge in the amount of EUR 50,000,000 with a 2-year maturity in 2007.The deal was concluded as partial security for a loan from Nova Ljubljanska banka. The loan is secured for aperiod of two years with a fixed interest rate and the option of extension for a further three years. In 2009,the extension option was implemented for a further three years.Interest rate hedge of EUR 40 millionDARS d.d. concluded an interest rate hedge in the amount of EUR 40,000,000 with a 3-year maturity in 2007.The deal was concluded to partly secure a loan from Unicredit banka Slovenija. The loan is secured for aperiod of three years with a fixed interest rate and the option of extension for a further seven years. In 2010,the extension option was implemented for further seven years.II.4.1.19 Short–term operating liabilitiesIn EUR (without cents) 31 Dec 2011 Share in % 31 Dec 2010 IndexShort–term trade payables 40,198,466 78% 46,912,213 86Short-term receivables for advances 12,405 0% 38,185 32Short-term liabilities to employees 2,097,253 4% 2,199,215 95Short-term liabilities to the State 7,141,405 14% 19,371,117 37- corporate income tax liability 737,803 1% 7,318,462 1096annual report 2011 dars- VAT liability 5,244,732 10% 4,902,676 107- liabilities for contributions of the payer 325,220 1% 329,948 99- other liabilities to the State 833,651 2% 6,820,030 12Short-term liabilities to others 1,807,654 4% 8,883,032 20Total 51,257,182 100% 77,403,761 66The trade liabilities of the Company comprised the largest share (78%). These are outstanding liabilities forwork carried out and accounted for in the construction of motorways which are implemented by domestic andforeign suppliers (including contractually retained amounts), liabilities for compensation related to the acquisitionof land for transactions in the name of, and on the behalf of, the Republic of Slovenia, operating liabilitiesrelated to the management and maintenance of motorways and other short-term operating liabilities.

Contractually retained funds are funds retained as a performance guarantee and until the fulfilment of allcontractual obligations by a contractor (work acceptance, remedying of all deficiencies, and handover ofguarantees for the remedy of defects during the warranty period) are retained in the amount of a maximum5% of the contractual value. The retained funds of concluded contracts with contractors belong to the contractorsand are remitted when the contractor has performed the contractual obligation and delivered to theinvestor the required documentation. As at 31 December 2011, payables for retained funds amounted toEUR 25,806,745, which is a 46 per cent share of total trade payables.Overview of short-term trade payablesIn EUR (without cents) Unmatured Up to 60 days Over 60 days TotalShort–term trade payables (current liabilities) 13,753,276 612,610 25,834 14,391,720Short–term trade payables (retained amounts) 3,080,040 1,859,284 20,867,422 25,806,745Trade payables as at 31 December 2011In EUR (without cents) 31 Dec 2011 Share in %SCT, D.D., LJUBLJANA, SLOVENIA – UNDERGOING BANKRUPTCY 9,878,358 25ALPINE BAU GMBH 2,410,527 6PRIMORJE d.d. 2,139,362 5CESTNO PODJETJE LJUBLJANA D.D. 2,120,409 5NGR d.d. – undergoing bankruptcy 1,956,020 5CPM d.d. – undergoing bankruptcy 1,539,749 4CGP d.d. 1,371,778 3DRI upravljanje investicij, d.o.o. 1,314,460 3SGP POMGRAD d.d. 1,309,584 3ASFINAG MAUT SERVICE GMBH SALZBURG 1,136,393 3Other suppliers 15,021,826 38Total 40,198,466 100The Company’s liabilities to employees are comprised mainly of calculated December salaries and compensationfor salaries and wages and reimbursement of expenses to employees in connection with work paid outin January 2012.II.4.1.20 Short-term accrued costs and deferred revenue97In EUR (without cents) 31 Dec 2011 Share in % 31 Dec 2010 IndexShort-term accrued costs 1,373,482 7% 427,253 321Short-term deferred revenue 18,190,315 93% 21,054,194 86Total 19,563,797 100% 21,481,447 91The liabilities of the Company include accrued costs or expenses related to accrued costs for the audit of thefinancial statements of 2011 in the amount of EUR 19,280, an for the actuarial calculation of provisions forannual report 2011 dars

jubilee premiums and severance payments on 31 December 2011 in the amount of EUR 735, accrued costsfor the business success of the Management Board and employees in the amount of EUR 392,739, and accruedcosts for unused holidays and overtime for 2011 in the amount of EUR 960,728.Short-term deferred revenue arises when services to be rendered in the future have already been invoicedor even paid for. Short-term deferred revenue was formed for revenue from tolls collected in the form oftop-ups on electronic toll media (ABC and DARS tags) invoiced and paid in 2011, but not used in the sameyear. These will be recognised as deferred revenue until they have actually been used by road users. Shorttermdeferred revenue also included revenue from annual vignettes sold in 2011 which will be valid in 2012,and from half-yearly one-track vehicle vignettes, which will be partly or entirely valid in 2012 (a half-yearlyvignette is valid for six months from the date of purchase, and the annual vignette for 2012 is valid from 1December 2011 until 31 January 2013).Short-term deferred revenue comprises:− revenue from annual vignettes sold and which will be valid in 2012, and from half-yearly vignettes, whichwill be partly or entirely valid in 2012 in the total amount of EUR 10,210,468 (a half-yearly vignette isvalid for six months from the date of purchase and the annual vignette for 2012 is valid from 1 December2011 until 31 January 2013),− revenue from the credit on electronic prepaid toll media (DARS cards, ABC tags), which was charged andpaid in 2011, but no traverses were made in the same year, in the amount of EUR 7,912,583. Revenuewill be deferred until traverses are made by the users of the service,− other short-term deferred revenue in the amount of EUR 67,263.Off balance sheet itemsThe Company recorded a total of EUR 232,025,947 in off balance sheet items. The amount of EUR231,421,339 represents contingent cash or receivables from encashment of performance guarantees orother instruments for performance guarantee or for elimination of errors in warranty period of which EUR211,960,016 refer to the construction and reconstruction of motorways and EUR 19,461,323 EUR to the managementand maintenance of motorways.Contingent liabilities towards municipalities based on unjustified calculations and collection of fees for useof building land are EUR 274,283, including default interest. The Company reduced these receivables by EUR1,544,422 in 2011.The value of the inventories of vignettes for the use of toll roads in the Republic of Austria which were alsosold by DARS d.d. amounted to EUR 330,326.98annual report 2011 dars

II.4.2 Notes to the statement of comprehensive incomeII.4.2.1 Net sales revenueIn EUR (without cents) 2011 Share in % 2010 Index 2011/2010Revenue from tolls 298,339,794 96% 290,095,679 103- revenue from vignette sale 136,890,919 - 130,934,829 -- other revenue from tolls 161,448,874 - 159,160,851 -Revenue from leases 7,221,547 2% 6,518,711 111Revenue from closure and overweight load transports1,081,994 0% 2,378,157 45Revenue from telecommunications 1,008,136 0% 1,011,992 100Revenue from easements 1,753,320 1% 131,767 1,331Revenue under performance contract 643,333 0% 668,098 96Other sales revenue 724,255 0% 608,469 119Total net sales revenue 310,772,380 100% 301,412,873 103Revenue from collected toll amounted to EUR 298,339,794 in 2011 and accounted for 96% of total sales,showing an increase of 3% over the previous year’s figure. Revenue from tolls paid by vehicles up to 3,500 kg(vignette system) amounted to EUR 136,890,919 or 46% of total tolls, and revenue from tolls paid by vehiclesover 3,500 kg amounted to EUR 161,448,874 or 54% of total tolls.Revenue from tolls is followed by revenue from leases (reimbursement for auxiliary activities alongside motorwaysand the lease of base stations), which in 2011 amounted to EUR 7,221,547. Revenue is earned fromthe leasing of land alongside motorways for the provision of catering services and the construction of petrolservice stations. This revenue increased by 11% in comparison to 2010.Sales revenue also included revenue from road closures and overweight load transports in the amount ofEUR 1,081,994, revenue from telecommunications in the amount of EUR 1,008,136, and revenue from easementsin the amount of EUR 1,753,320. The increase in revenue from easements refers primarily to twoone-time easements totalling EUR 1,300,862.Revenue from performance contract amounted to EUR 643,333 in 2011. This revenue refers to tasks DARSd.d. performed for the Republic of Slovenia pursuant to Article 4 of MCRSA-1. The tasks include spatial planningand integration of motorways in the environment, as well as the acquisition of real estate for the requirementsof motorway construction.Other sales revenue in the amount of EUR 724,255 includes revenue from the sale of electronic tags, revenuefrom towing, snow ploughing and clearing road accidents, revenue from rentals for holiday facilities andapartments, revenue from the sale of waste material, and other sales revenue.Net sales revenue was earned entirely in the domestic market.99annual report 2011 dars

II.4.2.2 Other operating revenueIn EUR (without cents) 2011 Share in % 2010 IndexRevenue from the reversal of long-term provisions 961,009 5% 565,532 170Revenue from insurance benefits 2,799,692 14% 3,002,822 93Other sales revenue 16,636,640 81% 9,297,493 179Total operating revenue 20,397,340 100% 12,865,847 159Revenue from the reversal of long-term provisions in the amount of EUR 961,009 relates to the reversal ofprovisions for lawsuits, reversal of accrued costs for business success for 2010 which was not paid out andthe reversal of provisions for employee redundancies following the transition to the electronic toll system.Compensation from insurance companies regard compensation received from insurance companies for thereversal of damages to motorway segments and facilities, which in 2011 amounted to EUR 2,799,692.The most important revenue items among other operating revenue which totalled EUR 16,636,640 were EUfunds (Cohesion Fund, TEN-T, EasyWay programme) in the amount of EUR 8,979,465 and other operatingrevenue from funds received from municipal co-financing (Municipality of Ljubljana) in the amount of EUR6,971,222, which is transferred to revenue upon receipt of the funds from long-term accrued costs and deferredrevenue, in accordance with the ensuing costs (amortisation calculation).II.4.2.3 Costs and operating expensesOverview of costsIn EUR (without cents) 2011 Share in % 2010 IndexCosts of materials 9,395,424 4% 13,152,610 71Cost of services 24,847,753 11% 26,397,177 94Labour costs 33,670,414 15% 32,840,366 103Amortisation and depreciation 142,565,877 62% 115,227,245 124100Operating expenses for revaluation of intangibleassets and property, plant and equipmentOperating expenses from revaluation of operatingcurrent assets248,659 0% 57,083 43616,068,787 7% 209,324 7,677Other operating expenses 2,109,845 1% 17,909,137 12annual report 2011 darsTotal operating expenses 228,906,759 100% 205,792,943 111

Breakdown of costs by functional groupIn EUR (without cents) 2011 Share in % 2010 IndexCosts of materials 2,647,958 28% 5,614,103 47Energy costs 4,955,134 53% 5,276,405 94Costs of spare parts 466,004 5% 446,357 104Write-offs of piece inventories 923,077 10% 1,401,718 66Other costs of materials 403,251 4% 414,027 97Total 9,395,424 100% 13,152,610 71Breakdown of costs of servicesCosts of materials accounted for 4% of total operating expenses, and decreased by 29% compared to 2010.The decrease is primarily due to the decreased use of salt and chlorides during the winter season, whichcomprise a 9 per cent share of costs of materials, and decreased use of energy, which comprises a 53% shareof costs of materials.In EUR (without cents) 2011 Share in % 2010 IndexCosts of the supervising engineer 1,000,074 4% 2,797,792 36Costs of maintenance of operating fixed assets 5,636,921 23% 5,967,984 94Leases 1,062,780 4% 1,066,587 100Costs of payment transactions and insurance premiums 2,245,483 9% 2,281,261 98Commissions for sold vignettes 6,448,387 26% 6,088,108 106Other costs of services 8,454,108 34% 8,195,445 103Total 24,847,753 100% 26,397,177 94Costs of services accounted for 11% of total operating expenses. Significant services in 2011 also includedcommissions on vignette sales (26 per cent share), costs of maintenance of operating fixed assets (23 percent share) and costs of payment transactions and insurance premiums (9 per cent share), while total costsof other services comprise a 34 per cent share.II.4.2.4 Labour costsLabour costs accounted for 15% of total operating expenses of DARS d.d. in 2011 and showed an increase of3% over the previous year’s figure.101Type of labour cost 2011 Share in % 2010 IndexWages and salaries 24,809,857 74% 24,108,837 103Social security and pension insurance costs 4,844,500 14% 4,734,939 102Other labour costs 4,016,058 12% 3,996,589 100Total 33,670,414 100% 32,840,366 103annual report 2011 dars

The growth in labour costs is due to the reporting of costs in the amount of EUR 960,728, representing thecost of unused annual leave of employees for 2011, which may be used by 30 June 2012, and costs for unpaidovertime performed in 2011, which the company disclosed for the first time in the Financial Report for2011.Labour costs include costs of supplementary pension insurance premiums in the amount of EUR 815,397.As at 31 December 2011, DARS d.d. had 1,249 employees. The average staff count in 2011 was 1,199 (computedon the basis of working hours).In 2011, wages and salaries were paid in accordance with the General collective agreement for the commercialsector and the Corporate Collective Agreement of DARS d.d., while the salaries of the ManagementBoard of DARS d.d. were also paid in accordance with the Act Governing the Remuneration of Managers ofCompanies with Majority Ownership held by the Republic of Slovenia or Self-Governing Local Communities(ZPPOGD; Official Gazette of the Republic of Slovenia, No. 21/2010).Average monthly salary at DARS d.d. in 2011 (in EUR)Average gross monthly salary Year 2011 Year 2010DARS d.d. 1,644 1,651Republic of Slovenia 1,525 1,495The number of employees and employee educational structure as at 31 December 2011 are presented in theBusiness Report of the Annual Report in the chapter ‘Human Resources Management’.The total gross earnings of the members of the Management Board of DARS d.d. in 2011 amounted to EUR322,167. Earnings of individual Management Board members of DARS d.d. by member.In EUR (without cents)Mateja DuhovnikChairwoman of theManagement BoardGordana BoškovićMember of the ManagementBoardAlojz Ratajc, MScLabour ManagerGross salary 99,473 88,485 79,563Annual leave bonus 900 900 900Incentive bonus for 2010 14,342 11,651 11,820Fringe benefits 3,870 3,878 3,619Reimbursement of costs 860 1,045 861102Supplementary pension insurance 0 0 0Total 119,445 105,959 96,763annual report 2011 dars

The gross earnings of employees employed under employment contracts not subject to the Collective Agreementamounted to EUR 950,110 in 2011.The earnings of the Supervisory Board members in 2011 are shown in the table below.In EUR (without cents)Remuneration forthe performance offunctionMeeting attendancefeesTravel expenses Fringe benefits TotalMilan Medved 8,125 6,254 1,949 61 16,389Iztok Klančnik 985 2,750 0 0 3,735Tomaž Mencinger 5,417 7,751 210 61 13,439Darij Barrile 5,417 6,854 2,626 61 14,957Vito Meško 5,417 5,280 0 61 10,757Darko Kodrič 5,417 5,060 0 61 10,537Total 30,778 33,949 4,785 304 69,814Other earnings of the Supervisory Board members were not recorded.The claims of employees under labour disputes contested by the Management Board of DARS d.d. are disclosedin the note to long-term provisions.II.4.2.5 Write-offsIn EUR (without cents) 2011 Share in % 2010 IndexAmortisation on intangible fixed assets 1,120,510 1% 821,620 136Amortisation of plant, property and equipment 141,445,367 89% 114,405,625 124Operating expenses from revaluation of intangible assets andproperty, plant and equipmentOperating expenses from revaluation of operating currentassets248,659 0% 57,083 43616,068,787 10% 209,324 7,677Total 158,883,323 100% 115,493,652 138Amortisation of plant, property and equipment in 2011 amounted to EUR 141,445,367 and was 24%higher than amortisation in 2010. The higher amount of amortisation is the result of a transfer of assetspursuant to MCRSA-1, as the Company treated the carrying value of the plant, property and equipmentit obtained pursuant to MCRSA-1 as the new purchase price of those assets until 31 December 2010. TheCompany also disclosed motorway substructure items in a different manner, which pursuant to SlovenianAccounting Standards are not amortised, transferring a part of these costs to motorway superstructures(e.g. project costs, costs of financing motorway construction, costs of supervising motorway construction,and costs of services without which individual motorway segments could not be constructed). If amortisationfor 2010 had been calculated using the same departure points, it would have amounted to EUR134,418,311.103annual report 2011 dars

Operating expenses from the revaluation of operating current assets refer to the revaluation of trade receivablesin the amount of EUR 15,854,291, the write-off of receivables in the amount of EUR 115,577, andthe evaluation of the inventory of vignettes for 2011 whose sale was concluded on 30 November 2011 in theamount of EUR 97,559.II.4.2.6 Other operating expensesThe costs of forming long-term provisions in the amount of EUR 2,109,845 are also shown among other operatingexpenses. The costs of forming long-term provisions in 2011 comprise:− provisions for long-term accrued costs of contingent losses on claims related to motorway constructionand reconstruction in the amount of EUR 1,331,195; costs related to the motorway management andmaintenance in the amount of EUR 96, and claims by employees under labour disputes in the amount ofEUR 31,990,− provisions for jubilee premiums in the amount of EUR 89,432 and for retirement benefits in the amountof EUR 114,548,− provisions in the amount of EUR 19,076 for retirement benefits to employees not included in the pensionscheme of collective supplementary pension insurance under the agreement between trade unionsand the Company,− long-term accrued costs and deferred revenue created for the settlement of contingent liabilities arisingfrom the return of the purchase price following a possible return of electronic tags in the amount of EUR170,690 (the buyers of electronic tags are entitled to return the tags within seven years of the date ofpurchase).II.4.2.7 Financial revenue from loans to othersFinancial revenue from loans to others in the amount of EUR 3,235,844 is the result of the investment ofshort-term surplus liquid funds of DARS d.d. deposited with banks.II.4.2.8 Financial revenues from operating receivables due from othersFinancial revenue from operating receivables due from others in the amount of EUR 120,024 refer to financialrevenue from operating receivables and include calculated default interest and positive exchange rate differences.104II.4.2.9 Financial expenses due to impairment and write-offs of financial investmentsFinancial expenses from impairments in the amount of EUR 2,784,937 represent the impairment of transactionswith derivative financial instruments for hedging against risk in the amounts of EUR 40,000,000, EUR50,000,000 and EUR 20,000,000, whereby the Company protects cash flows from loans taken out for theneeds of motorway construction. The Company discloses derivative financial instruments for hedging againstrisk in the Income Statement.annual report 2011 darsII.4.2.10 Financial expenses from loans received from banksFinancial expenses in the amount of EUR 66,550,438 represent interest calculated on long-term loans. Theaverage weighted interest rate for long-term loans as at 31 December 2011 was 2.62%.II.4.2.11 Financial expenses from bonds issuedFinancial expenses in the amount of EUR 7,335,379 represent interests calculated for long-term securitiesissued. The average weighted interest rate for long-term securities as at 31 December 2011 was 4.35%.

II.4.2.13 Other revenueOther revenue in the amount of EUR 2,012,882 represent a refund for the unjustified charging of compensationfor the use of building land by the Municipalities of Pesnica and Šentilj, revenue from indemnitiesreceived under court judgements, revenue from invoiced contract penalties, revenue from bonuses for exceedingthe quota of disabled employees, and fees obtained by DARS d.d. within the scope of implementingsupervision of violations of toll collection and similar.II.4.2.14 Other expensesOther expenses in the amount of EUR 134,233 mainly represent the payment of damages following courtdecisions, reimbursed costs in audit procedures according to the Public Procurement Act and similar.II.4.2.15 Corporate income taxCorporate income is calculated in accordance with the Corporate Income Tax Act (ZDDPO-2). Corporateincome tax is payable on taxable profit generated by the Company during the tax period for 2011, and comprised20 per cent.In EUR (without cents) 2011 20101 Revenue 336,538,471 316,615,8242 Expenses 305,730,681 278,327,5093 Total profit (1 – 2) 30,807,790 38,288,3154 Decrease in revenue 272,483 389,5065 Increase in revenue 0 06 Decrease in expenses for the formation of provisions 878,513 8,761,7587 Decrease in expenses, other non-deductible expenses 17,119,322 1,993,3678 Increase in deductible expenses 284,789 62,0369Deductible revenue less deductible expenses(1 –2 – 4 + 5 + 6 + 7 – 8)48,248,352 48,591,89810 Tax base (9) 48,248,352 48,591,89811 Change in the tax base due to a change in accounting policies –152,863 –205,53612 Increase in the tax base by the amount of tax relief used 4,674 3,28313 Tax relief for investments 30,000 30,00010514 Tax relief for employment of disabled persons 280,571 341,39915 Tax relief for implementation of the practical part of professional training 5,215 3,58616 Tax relief for supplementary pension insurance 815,397 810,13617 Tax relief for grants 26,020 18,40018 Tax base (10 + 11 + 12 – 13 – 14 – 15 –16 – 17) 46,942,960 47,186,12419 Corporate income tax 9,388,592 9,437,225annual report 2011 dars

Total net profit or loss for the period is the amount of total profit determined in the income statement decreasedby income tax liability in the accounting period and increased by deferred taxes. Net profit for theperiod was 19% lower than the net profit or loss of the previous year.In EUR (without cents) 2011 2010Operating profit 102,262,961 108,485,776Profit from financing activities –73,333,820 –70,071,169Profit from extraordinary activities 1,878,649 –126,292TOTAL PROFIT 30,807,790 38,288,315Income tax 9,388,592 9,437,225Deferred taxes –3,190,354 –1,612,274Net profit or loss for the period 24,609,552 30,463,365Deferred tax receivables are the amounts of income tax recoverable in future periods. The effective tax ratefor 2011 calculated as a quotient of total paid tax and total profit was 30.5%.II.4.2.16 Net profit or loss for the period restated in terms of the cost of livingindexIn EUR (without cents) Growth in % Equity amount Effect of restatementEquity - all items except for profit in thecurrent yearDecreased profit or lossfor the period1.90% 2,388,110,677 45,374,102 –16,523,012106annual report 2011 dars

II.5 EVENTS AFTER THE BALANCE SHEET DATEPursuant to a decision of the Government of the Republic of Slovenia, on 12 March 2012, DARS d.d. haltedthe procedure for the public procurement of an electronic toll collection system in free traffic flow.The aforementioned event did not have an impact on the financial statements of DARS d.d. for 2011.Milan Medved, PhD, Chairman of Supervisory Board tendered his resignation on 18 January 2012. On 15February 2012 Tomaž Mencinger was elected as Chairman of Supervisory Board and Darij Barille as DeputyChairman.II.6 AUDIT OF THE ANNUAL REPORT FOR 2011The contractual price of the audit of the Annual Report of DARS d.d. for 2011 amounted to EUR 24,100excluding VAT. The audit was carried out by the audit company Deloitte revizija d.o.o., Ljubljana. The auditcompany did not perform any other services for DARS d.d. in 2011.107annual report 2011 dars

II.7 INDEPENDENT AUDITOR’S REPORT108annual report 2011 dars

109annual report 2011 dars

Annex 1:Transparency of FinancialRelations and Maintenance ofSeparate Accounts for DifferentActivitiesIn accordance with the Transparency of Financial Relations and Maintenance of Separate Accounts for DifferentActivities Act (ZPFOLERD; Official Gazette of the Republic of Slovenia, No. 65/2008), DARS d.d. discloses itemsregarding the transactions it performs on behalf of, and for the account of, the Republic of Slovenia pursuant toArticle 4 of MCRSA-1 separately from transactions performed in its name and for its account, namely motorwayconstruction and reconstruction, maintenance and management thereof and toll collection.Pursuant to Article 4 of MCRSA-1 and the Agreement on the Performance of Contract, DARS d.d. performstasks related to the spatial planning and arrangement of motorways in space and acquisition of real estatefor the needs of motorway construction. These transactions are managed as transactions for foreign account.DARS d.d. records receivables towards the Republic of Slovenia for services performed. The funds for suchtransactions are guaranteed from the budget of the Republic of Slovenia in accordance with Article 10 ofMCRSA-1. The Republic of Slovenia and DARS d.d. concluded an Agreement on the Performance of Contractand Annex to this Agreement in 2011 which regulate their mutual relationship for 2011 in detail. The Annexof the Agreement defines the content and envisaged value of the performed work, compensation of DARSd.d. for the performance of the tasks, the dynamics of billing and contractual payment for the services.Pursuant to the Agreement on the Performance of Contract for 2011, DARS d.d. is entitled to compensationin accordance with the actual number of hours of work performed. The costs of the task performed arecharged in full to the Republic of Slovenia with DARS d.d. re-invoicing the Republic of Slovenia for such costs.DARS d.d. shows fees from agency contract which the Republic of Slovenia acknowledges to DARS d.d. forimplemented orders as revenue from the costs of activities related to the spatial planning and arrangementof motorways in space and acquisition of real estate required for the needs of motorway construction. TheCompany shows the total costs of the Spatial Planning Office and 35% of the cost of materials, labour andamortisation of assets of the Legal Office as a cost of the activity. The Company does not recognise the costof services of the Legal Office among costs of the activity because the costs of services connected to theacquisition of real estate (appraisers, notaries, land surveyors, etc.) are costs of the Republic of Slovenia andas such are charged to the contracting authority in their entirety.In 2011, the Company showed a loss of EUR 11,960,875 from operations connected to the activities definedin Article 4 of MCRSA-1. The decrease resulted from the fact that, in 2011, due to repayment doubts, theCompany disclosed an adjustment to receivables due from the Republic of Slovenia for services performedin accordance with Article 4 of MCRSA-1 in 2010 in the amount of EUR 15,236,249, namely for the costs ofspatial planning and integration in the environment, costs of acquiring real estate for the requirements ofmotorway construction and fees from performance contract.110annual report 2011 darsThe Company implements the construction and reconstruction of motorways which it operates and managesand maintains, and implements toll collection within the scope of the concession activities which the Companyperforms in its name and for its account. The Company shows all revenue in full among revenue fromactivities except those pursuant to the Agreement on the Performance of Contract, and shows all costs in fullexcept the entire cost of the Spatial Planning Office, and 35% of the cost of materials, labour and amortisationof assets of the Legal Office. Individual items are explained in detail in the Notes to the Financial Statements.The Company does not prepare a separate balance sheet, due to the negligible significance of individualitems. Property, plant and equipment and the appertaining amortisation costs are allocated among activitiesin accordance with the aforementioned division.

Statement of Comprehensive Income by Activity for the period from 1 January to 31 December 2011In EUR (without cents)Agreement on thePerformance ofContractConcession Agreement1. Net sales revenue 643,333 310,129,046 310,772,380Revenue from tolls 0 298,339,794 298,339,794Revenue from leases 0 7,221,547 7,221,547Revenue from closure and overweight load transports 0 1,081,994 1,081,994Revenue from easements 0 1,753,320 1,753,320Revenue from agency contract 643,333 0 643,333Revenue from telecommunications 0 1,008,136 1,008,136Other sales revenue 0 724,255 724,2554. Other operating revenue 0 20,397,340 20,397,3405. Costs of goods, materials and services –12,927 –34,230,250 –34,243,177a)Acquisition cost of goods and materials sold and cost ofmaterials used–7,978 –9,387,447 –9,395,424b) Cost of services –4,949 –24,842,804 –24,847,7536. Labour costs –310,661 –33,359,754 –33,670,414a) Wages and salaries –249,824 –24,560,032 –24,809,857b) Social security and pension insurance costs –46,950 –4,797,550 –4,844,500c) Other labour costs –13,887 –4,002,171 –4,016,0587. Write-offs –15,327,871 –143,555,452 –158,883,323a) Amortisation and depreciation –5,078 –142,560,799 –142,565,877b)Operating expenses for revaluation of intangible assets andproperty, plant and equipment–86,544 –162,115 –248,659c)Operating expenses from revaluation of operating currentassets–15,236,249 –832,539 –16,068,7878. Other operating expenses 0 –2,109,845 –2,109,84510. Financial revenues from loans 0 3,235,844 3,235,844b) Financial revenue from loans to others 0 3,235,844 3,235,84411. Financial revenues from operating receivables 0 120,024 120,024b)Financial revenues from operating receivables due from otherentities0 120,024 120,02412.Financial expenses due to impairment and write-offs of financialinvestments0 –2,784,937 –2,784,93713. Financial expenses for financial liabilities 0 –73,885,817 –73,885,817b) Financial expenses from loans received from banks 0 –66,550,438 –66,550,438c) Financial expenses from bonds issued 0 –7,335,379 –7,335,37914. Financial expenses from operating liabilities 0 –18,935 –18,935b) Financial expenses from trade payables 0 –11,214 –11,214c) Financial expenses from other operating liabilities 0 –7,721 –7,72115. Other revenue 0 2,012,882 2,012,88216. Other expenses 0 –134,233 –134,23317. Corporate income tax 0 –9,388,592 –9,388,59218. Deferred taxes 3,047,250 143,105 3,190,35419. Net profit or loss for the period –11,960,875 36,570,427 24,609,55223. Other comprehensive income 0 0 024. Total comprehensive income –11,960,875 36,570,427 24,609,552Total111annual report 2011 dars