annual report 2010 annual report 2010 - Dars

BUSINESS REPORTMotorway Company in the Republic of Sloveniaannual report20101Ljubljana, April 2011ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORT2ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTCONTENTSLETTER OF THE MANAGEMENT BOARDREPORT ON THE WORK OF THE SUPERVISORY BOARD IN 2010INTRODUCTIONCompany ProfileKey Performance DataMacroeconomic environmentMotorways and Expressways in the Republic of SloveniaTraffic LoadsBUSINESS REPORTMission, Vision, Strategic Objectives and Quality PolicyKey Business Events in 2010 Financial YearDescription of Consequences of Adopting the MCRSA-1 on the Operations of DARS d.d.Business RisksFinancial Operations and Financial Risk ManagementAnalysis of Business PerformanceBusiness Activities of the CompanyTollingMotorway maintenance and managementConstruction and reconstruction organisationInvestments in motorway development and reconstructionResearch and Development ActivitiesAnticipated DevelopmentQuality Management SystemSOCIAL RESPONSIBILITYTraffic SafetyUser SatisfactionEnvironmental ManagementHuman Resources ManagementCommunicationsCORPORATE GOVERNANCE STATEMENT OFMOTORWAY COMPANY IN THE REPUBLIC OF SLOVENIA812181818222429303333344244464949515558606061626466676872743ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORT4FINANCIAL REPORTFinancial statements of DARS d.d.8082Reporting company 88Significant accounting policies 88Notes to the financial statements 97Events after the balance sheet date 125Audit of the 2010 annual reportSTATEMENT OF MANAGEMENT RESPONSIBILITY126127INDEPENDENT AUDITOR'S REPORT 128ANNEX 131ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTAbbreavationsABCAutomatic non-cash toll collectionMMCMotorway Maintenance CentreASECAPAssociation Européenne des Concessionnaires d'Autoroutes et d'ouvrages à Péage/European Associationwith tolled motorways, bridges and tunnelsDARS d.d.Motorway Company in the Republic of SloveniadTIMS_CTDeighton Total Infrastructure Management System, Concurrent TransformationEBITDAEarnings before interest, taxes, depreciation and amortizationETSElectronic Tolling SystemAMDRPAnnual Motorway Development and Reconstruction PlanIBCPInternational Border Crossing PointMTMinistry of TransportNMCPNational Motorway Construction ProgrammeTCOCTolling Control Operational CentreDBPDesign for Building PermitTICTraffic Information Centre for public roadsPMS-DARSPavement Management System – DARSFTFFree Traffic FlowEDExecution DesignRSRepublic of SloveniaTSMSTraffic Surveillance and Management SystemSAS Slovenian Accounting Standards 2006MCRSAThe Motorway Company in the Republic of Slovenia Act (ZDARS-UPB 1) (Official Gazette of RS, no.20/2004)MCRSA-1The Motorway Company in the Republic of Slovenia Act (Official Gazette of RS, no. 97/2010-ZDARS-1)CA-1 The Companies Act (ZGD-1) (Official Gazette of RS, no. 65/2009-UPB3, 83/2009)5ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORT6LetterANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTLetter of themanagment board7ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORTLETTER OF THE MANAGEMENT BOARD8conditions for the residents, alleviated the operations of theeconomy and significantly improved traffic safety. Within thesix-month period since the turnover of the mentioned sectionsby DARS d.d., with the exception of minor traffic accidents onthis road, there were no serious traffic accidents and no accidentsresulting in fatalities.The new motorway section between Pluska and Hrastje that isincluded in the NMCP completes the Dolenjska motorway sectionbetween Ljubljana and Obrežje.The year 2010 presented many turning points for DARSd.d. The Company had to face and deal with numerouschanges and challenges. New legislation and otherevents demanded that the Company make rapid andefficient decisions, in relation to the external environment aswell as within the Company.The new MCRSA-1 entered into force in 2010, according to whichDARS d.d. will take over the complete financing of the constructionand reconstruction of motorways and expressways. ThisAct enforces two significant novelties: firstly, the constructionof motorways and expressways will be implemented accordingto concession agreements; secondly, it establishes the rightof superficies on land, where the motorways and expresswaysare constructed. Concessions will be granted for each individualmotorway section. DARS d.d. or any other concessionairewill construct and reconstruct motorways and expressways fortheir own account and these works shall no longer be financedfrom public funds. The State’s financial obligation still appliesfor spatial planning, integration in the environment and acquiringland for the requirements of motorway or expressway construction.The State will have jurisdiction over the strategic planning ofmotorway network development. The National Assembly of theRepublic of Slovenia will prepare a national programme determiningwhich road sections will be constructed and also the finaldeadlines for completing the constructions.At the end of June 2010, DARS d.d. gave the Pluska-Ponikveand Ponikve-Hrastje motorway sections over to traffic. Theconstruction of the Dolenjska motorway section passing Trebnjeand Mirna Peč, in the total length of 14.8 km, is partiallyfinanced by the EU’s Cohesion Fund. The newly built motorwayhas disburdened the existing expressway, improved the livingDARS d.d. desires in the future to continue to actively cooperatein the construction of motorways and responsibly managethe entire motorway network. We still face a few challenges:Izola-Lucija expressway coastal section, Draženci-IBCP Gruškovjemotorway section, Postojna-Divača-Jelšane road connectionand Šentrupert-Dravograd road section. Our wish isthat DARS d.d. play a decisive role in this area in consensuswith owners’ representatives.Despite a disadvantageous business environment, DARS d.d.revenues in 2010 increased to EUR 316.6 million and exceededthe revenues of 2009 by 16%. The increase was mostly influencedby increased toll revenues that presented 92% of totalrevenues.Toll revenue amounted to EUR 290.1 million, thus exceedingrevenue in 2009 by 22%. Revenue from sold vignettes representeda 45 percent share in the total toll revenue structurewhile revenue from tolling cargo vehicles presented a 55 percentshare.The Company’s expenses in 2010 amounted to EUR 278.3 millionshowing a 7% increase over the expenses realised in 2009.The largest shares were held by amortisation with 41% and tofinancial expenses with 26%.Due to the adoption of MCRSA-1, the expenses structure in 2010significantly deviates from the expenses structure in 2009. In2010, the Company presented the expenses of amortizationof infrastructure given to traffic in the profit and loss account,while by the end of 2009 the infrastructure was presented inthe balance sheet of state-owned assets and liabilities managedby DARS d.d. In 2010, costs did not include concession feeswhich were presented in the 2009 expenses.The Company’s net profit in 2010 amounted to EUR 30.5 millionand was almost 200% higher than net profit in 2009. Theincrease in profit was influenced by the modified accountingreporting, caused by the new MCRSA-1 Act related to DARS d.d.,and predominantly by increased revenue from tolling.ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTIn 2010 the Company initiated the introduction of the electronictolling system in FTF. For this purpose DARS d.d. organised aproject group which together with a consultant forms the startingpoints for the electronic tolling system in the FTF project inaccordance with the Action Plan for the Introduction of an ETSin free-flow traffic, adopted by the Government of the Republicof Slovenia at the end of 2009.Electronic tolling in FTF will substitute the existing tolling systemfor heavy duty vehicles, since its service life is expiringand cannot be efficiently maintained due to the discontinuanceof production of individual electronic structures. In order toensure revenue from tolling, presenting the major part of theCompany’s revenue, DARS d.d. will be obliged to establish anelectronic tolling system that will price optimised, efficient andin accordance with the EU directive.The introduction of new legislation also modified the mannerof DARS d.d. operations, therefore, the Company initiated activitiesrelated to the restructure of organisation and work processes.We are well aware of the fact that new knowledge, improvementsand the following best practices in Slovenia and abroadhave become a necessity in an era when relentless competitionon the market determines business decisions and influencesspecific actions. Organisational changes therefore anticipatesimplified and faster adaptation of employees to new technologicalrequirements and a more efficient education system.The Corporate Governance of State Capital Investments Actof 2010 established the Capital Assets Management Agency ofthe Republic of Slovenia. The Agency is an autonomous andindependent state body that controls the management of capitalinvestments of DARS d.d., and particularly implements therights of shareholders, thus operating as a representative ofthe Republic of Slovenia in implementing the rights from securitiesand shares and in judicial proceedings and other proceedingsrelated to the implementation of these rights. In singlemembercompanies like DARS d.d. the Agency implements theshareholder’s right by organising a General Meeting. At its firstGeneral Meeting, the Agency, as the enforcing body of the Republicof Slovenia’s shareholder right, adopted the decision onthe increase in capital of DARS d.d., which was entered in thecourt register on 31 March 2011, in conjunction with the newlyadopted Articles of Association.One of the main Company’s activities in 2010 was also the managementof debt which had accumulated due to intensive constructionand reconstruction works in the past years. In 2010the Company paid off loans in the amount of EUR 134 million,settled interest in the amount of EUR 79 million and raised newloans in the amount of EUR 185 million, therefore, total indebtednesson 31 December 2010 amounted to EUR 2,998,510,000.Towards the end of 2010 the Company’s operations and decisionswere influenced by the general socio-economic situation,connected to the problems of contractors, however, the Companyreacted appropriately to this situation. Therefore, discussionsand the search for solutions were already initiated in thatperiod to ensure the continuance of works on current projects.We have successfully concluded a laborious year mostly due tothe dedicated work, effort and understanding of all our employees,which have, like the Company’s management, perceivedthe crisis as an opportunity. We are certain that each employeeis an important part of realising the Company’s set goals, therefore,we will strive to create a work environment that will bepleasant for all employees also in the future, since this is theonly way for us to focus on and complete our mission and realisethe vision of our Company.Now that the majority of the motorway network has been constructed,it is the time to dedicate more attention to new contentsand challenges. First and foremost, this includes projectsrelated to traffic safety and the enhancement of satisfactionof all motorway and expressway users. Besides constructing,reconstructing, maintaining and managing motorways andexpressways, we strive to provide a safe, efficient and modernmobility of people and goods in an environmentally-friendlyway which does not worsen the quality of living of the localresidents. DARS d.d. is a socially responsible company that willincreasingly strive to become open for business, and a successfuland market-oriented company active in the managementof modern infrastructure networks in accordance with users’expectations.9Gordana BoškovićMember of the Management BoardMateja DuhovnikChairwoman of the Management Boardmag. Lojze RatajcMember of the Management BoardLabour ManagerANNUAL REPORT 2010 DARS d.d

BUSINESS REPORT10ReportANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORT11Report on the workOF THE SUPERVISORY BOARDIN 2010ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORTREPORT ON THE WORK OF THESUPERVISORY BOARD IN 201012Composition of the SupervisoryBoard of DARS d.d.In line with Article 25 of the Articles of Association of DARSd.d. adopted on 26 May 2009, the Supervisory Board ofDARS d.d. is comprised of six members, two of whom wereappointed by the General Meeting on the proposal of theMinistry of Finance, two on the proposal of the Ministry of Transport,and two members – representatives of employees – wereappointed by the Workers’ Council.In January 2010 the General Meeting of DARS d.d. appointedto the Supervisory Board Milan Medved, PhD. Due to the factthat the Supervisory Board had not had a chairman since October2009 (the Chairman of the Supervisory Board at that timewas appointed as Chairwoman of the Management Board), theSupervisory Board appointed Milan Medved, PhD as its Chairmanat its January session and Iztok Klančnik as the DeputyChairman.The composition of the Supervisory Board in 2010:• Milan Medved, PhD, Chairman,• Iztok Klančnik, Deputy Chairman,• Tomaž Mencinger,MSc, Member,• Darij Barrile, Member,• Vito Meško, Member/employee representative,• Darko Kodrič, Member/employee representative.The composition of the Supervisory Board of DARS d.d. and therequirements for membership in this body are laid down in theArticles of Association of DARS d.d. These allow for the equalrepresentation of individual areas of activity, both by representativesof the owner and of employees.Activities of the Supervisory BoardIn 2010 the Supervisory Board of DARS d.d. met at nine regularmeetings and four correspondence sessions.In line with Article 30 of the Articles of Association of DARSd.d., in 2010 the Supervisory Board of DARS d.d. granted consentto 12 transactions in individual values exceeding EUR 2.5million, and appointed individual members of the SupervisoryBoard to participate in the work of the expert contract awardcommittee in 8 projects. At its October session, the SupervisoryBoard adopted the decision that the cooperation of individualSupervisory Board members was not necessary at thecommittee’s work for awarding works.At its January session, the Supervisory Board was acquaintedwith the draft business plan of DARS d.d. for 2010 and reque-sted the Management Board to supplement the plan in accordancewith all comments provided during the discussion. TheSupervisory Board gave its consent to the supplemented businessplan in February by restricting employment to 20 newposts and determining that labour costs should not increasemore than by an index rate 104.At its February session, the Supervisory Board was acquaintedwith the report on the Internal Audit Department’s workin 2009 and the annual plan prepared by this department for2010, and the report on activities related to the Government’sAction Plan for the Introduction of an ETS in free-flow traffic,and appointed the audit committee. It was also acquainted withthe analysis of operations in 2009 and the report on AMDRPrealisation for 2009.In April, the Supervisory Board was acquainted with the auditreport of the Court of Audit on the maintenance of motorwaysfrom 2005 to 2007 and called on the Management Board toprepare an activity plan for the fulfilment of recommendations,set by the Court of Audit, which was presented at the followingsession. By the end of the year, the Supervisory Board had discussedthe report on the implementation of activities for thefulfilment of recommendations set by the Court of Audit twice.At its April session, the Supervisory Board also discussed theDARS d.d. Annual Report and Auditor’s Report for 2009.Based on the Act Regulating the Incomes of Managers of Companiesowned by the Republic of Slovenia and Municipalitiesthe Supervisory Board at its May session adopted the Rulesfor determining the contents of employment contracts for theChairwoman and members of the Management Board of DARSd.d. regarding earnings and severance payments.ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORT14services at DARS d.d., the Annual Work Plan for the InternalAuditing Department, etc. The Audit Committee also meetsin other special cases. The President of the Audit Committeereports on the Committee’s conclusions and decisions at theSupervisory Board sessions.The Supervisory Board appointed an individual member of theSupervisory Board each time to grant consensuses for transactionswhose values exceeded EUR 2.5 million and who cooperatedin the work of the expert committee for awarding worksfor certain projects. After discussions were held at the line ministry,the Supervisory Board adopted a decision at its Octobersession, namely that the cooperation of individual SupervisoryBoard members was not necessary at the committee’s work forawarding works.Organisation of WorkIn line with its rules of procedure, the Supervisory Board ofDARS d.d. appointed from among employees, at the end of2005, a Secretary of the Supervisory Board who is responsibleexclusively to the Chairman of the Supervisory Board for thework performed for the Supervisory Board. The Secretary ofthe Supervisory Board coordinates the work of the SupervisoryBoard and ensures that the Company’s professional servicesduly prepare the materials for the sessions of the SupervisoryBoard, and performs other tasks specified in the Rules of Procedureof the Supervisory Board.The Supervisory Board generally meets at the DARS d.d. branchoffice in Ljubljana, and occasionally also at the head officein Celje. Whenever a field inspection is required in order to dealwith a certain issue in the field, the Supervisory Board conductsa field meeting. This method of work ensures the optimalefficiency of the Supervisory Board’s activities.In accordance with the Corporate Governance Code for JointStock Companies, which was jointly phrased and adopted bythe Ljubljana Stock Exchange, Inc., the Association of SupervisoryBoard Members of Slovenia, and the Managers’ Associationof Slovenia on 18 March 2004, amended on 14 December2005 and 5 February 2007, adopted in its present, renewedform on 8 December 2009, and used as of 1 January 2010,the Supervisory Board evaluates, once yearly, its composition,operations, possible conflicts of interest of individual members,and the performance/activity of individual members and theSupervisory Board as a whole, as well as its cooperation withthe Management Board of the Company (Item 9).Measures for Improving EfficiencyWith the aim of improving the efficiency of the SupervisoryBoard’s work, its members regularly attend seminars organisedby the Association of Supervisory Board Members of Sloveniain order to acquire additional professional skills for their activeperformance in the Supervisory Board.Evaluation of Performance of Individual Members of the SupervisoryBoard and of the Supervisory Board as a Whole, andCooperation with the Management BoardThe members regularly attended sessions, which is proven bythe fact that all members were present at seven sessions, witha single absence being recorded at two sessions.The members are active at meetings and participate in discussions.They strive to clarify possible differing standpoints andharmonise them to such an extent that they are able to consensuallyadopt decisions in most cases. It is evident at discussionsthat the members previously prepare for a particular meetingotherwise they would be unable to actively and professionallyparticipate in discussions on individual items of the agenda.The communications and cooperation between the ManagementBoard and the Supervisory Board are adequate. Themembers of the Management Board are present at almost allSupervisory Board sessions, and regularly inform the SupervisoryBoard on all relevant matters relating to the businessoperations of the Company, and promptly fulfil every requestof the Supervisory Board in the form of a relevant report orpresentation of documents.Approval of the Annual Report andProposed Appropriation ofAccumulated Profit for the Year 2010The Supervisory Board of DARS d.d. examined the Annual Reportof DARS d.d. for the year 2010 within the legally prescribedperiod. It took note of the Auditor’s Report and the submittedopinion of a certified auditor on the examination of financialstatements for the 2010 financial year, and established thatthe certified auditor had not discovered any misstatements orirregularities that could have an impact on the financial statementsof the Company. Nor are there any remarks or reservationsin the Auditor’s Report addressed to the ManagementBoard and the Supervisory Board of the Company.Pursuant to the provisions of Articles 64 and 230 of the CA-1,on the basis of audited financial statements of the Companyand within the context of comprehensive treatment of the AnnualReport as well as the proposal of the Management Board,ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORT16IntroductiANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORT17IntroductiononANNUAL REPORT 2010 DARS d.d

BUSINESS REPORTCompany profile18NAMEDružba za avtoceste v Republiki Sloveniji d.d.(Motorway Company in the Republic of Slovenia)ABBREVIATED NAMEDARS d.d.REGISTERED OFFICEUlica XIV. divizije 4, 3000 CeljeTELEPHONE + 386 (0) 3426-40-71FAX + 386 (0)3 544-20-01BRANCH OFFICEDunajska 7, 1000 LjubljanaTELEPHONE + 386 (0)1 300-99-00FAX + 386 (0)1 300-99-01WEBSITEwww.dars.siwww.promet.siYEAR OF ESTABLISHMENT 1993REGISTER ENTRY NUMBER 1/06158/00, District Court of CeljeFOUNDERRepublic of SloveniaSHAREHOLDERRepublic of SloveniaREGISTRATION NUMBER 5814251000VAT NUMBERSI92473717SHARE CAPITAL EUR 2,319,866,345.16DARS d.d. was established in 1993 under the MCRSA, and beganto operate on 1 January 1994. It had the status of a publicownedcompany in the form of a public limited company until31 December 2003. Since 1 January 2004, it has the status of apublic limited company operating as a corporate entity.The sole founder and shareholder of DARS d.d. is the Republicof Slovenia.Based on the Corporate Governance of State Capital InvestmentsAct (Official Gazette of RS, No. 38/2010) DARS d.d. isrepresented by the Capital Assets Management Agency of theRepublic of Slovenia.At the end of 2010 the MCRSA-1 entered into force, in accordancewith which DARS d.d.:• performs special tasks in relation to spatial planning andintegrating motorways in the environment as well as tasksin relation to acquiring real property for the requirementsof motorway construction in the name ofthe Republic ofSlovenia and for the State’s account;• constructs motorways in its own name and for its ownaccount;• manages and maintains motorway sections based ongranted construction concessions.By enforcing developmental documents the State maintainsstrategic supervision over the development of motorways bydetermining new sections and deadlines for giving to traffic thenewly built sections.MCRSA-1 determines the status, tasks and obligations of DARSd.d. and regulates real right relations in connection to motorways.Under this Act DARS d.d. has been transformed into aconcessionaire that takes over all financial obligations, relatedto the construction of new motorway sections. MCRSA-1 alsostipulates that DARS d.d. in the name of the Republic of Sloveniaand for its account performs individual tasks in relation tospatial planning and integrating motorways in the environmentas well as tasks in relation to acquiring real property for therequirements of motorway construction. The Act also stipulatesthat DARS d.d. will continue with the constructions of motorwaysand expressways that have been initiated prior to theentry into force of MCRSA-1, and that it will continue to manageand maintain the existing motorways and expressways in theRepublic of Slovenia.ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTKey performance dataKey performance data in EUR Y ear 2006 Y ear 2007 Y ear 2008 Y ear 2009 Y ear 2010Total revenue 180,437,720 212,591,309 241,837,168 272,329,357 316,615,82419Total expenses 174,316,659 198,884,469 227,052,630 259,421,061 278,327,509Net sales revenue 175,320,633 208,879,897 237,907,159 266,050,392 301,412,873Operating expense 174,222,083 198,855,297 226,984,620 259,366,619 205,792,943Concession fees 103,105,148 122,637,201 142,385,612 169,447,153 0Operating profit/loss 4,113,354 12,268,914 13,289,015 11,687,109 108,485,776EBITDA 13,428,335 20,343,174 21,575,090 21,189,454 223,979,429Net profit/loss for the period 4,158,963 10,504,137 11,499,906 10,161,585 30,463,365Share capital 212,819 212,823 212,823 212,823 2,319,866,345Equity 40,295,545 49,023,704 55,271,542 55,413,862 2,402,580,775Total value of assets as at 31 Dec* 4,645,562,033 5,127,370,135 5,632,732,450 5,914,371,197 5,611,218,851Balance of debt as at 31 Dec 1,767,992,555 2,260,844,842 2,685,098,254 2,947,416,960 2,998,506,697Repayment of debt - principal 46,070,156 58,764,151 62,172,986 62,614,691 133,910,263Payment of interest** 62,579,991 81,174,046 108,472,971 91,263,756 79,015,798* Data for the 2006-2009 period refer to assets of DARS d.d. and assets of the Republic of Slovenia provided for management.** Data refer to actual outflows for interest in the individual year.Indicators Y ear 2006 Y ear 2007 Y ear 2008 Y ear 2009 Y ear 2010Operating margin 2.3% 5.9% 5.6% 4.4% 36.0%EBITDA margin 7.7% 9.7% 9.1% 8.0% 74.3%Net margin 2.4% 5.0% 4.8% 3.8% 10.1%Return on equity 10.3% 21.4% 20.8% 18.3% 1.3%Number of employees Y ear 2006 Y ear 2007 Y ear 2008 Y ear 2009 Y ear 2010Year end 1,106 1,128 1,209 1,250 1,247ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORTGraph 1: Movement in revenue and expenses of DARS d.d. in the 2006-2010 period350õ316.6õ20in v mio EUR €õ300õ250õ200õ150õ180.4õ174.3õ212.6õ198.9õ241.8õ227.1õ272.3õ259.4õ278.3õ100õ50õ0õ2006õ 2007õ 2008õ 2009õ 2010õprihodkiõRevenueodhodkiõExpensesGraph 2: Movement of net sales revenue and operating profit before depreciation of DARS d.d. in the 2006-2010 period350õ300õ266.0504õ301.4129õin v mio mio EUR €õ250õ200õ150õ175.3206õ208.8799õ237.9072õ223.9794õ100õ50õ0õ13.4283õ20.3432õ 21.5751õ 21.1895õ2006õ 2007õ 2008õ 2009õ 2010õčisti prihodki od prodajeõNet sales renenueEBITDAõEBITDAGraph 3: Debt balance (31 December), principal repayment and interest payment in the 2006-2010 period160õ160õ3,500õ 3,500õ140õ140õ133.9103õ 133.9103õ3,000õ 3,000õodplačila v mio €õ120õRepayments in mio EURodplačila v mio €õ100õ80õ60õ40õ120õ108.4730õ 108.4730õ100õ91.2638õ 91.2638õ81.1740õ 81.1740õ80õ62.5800õ 62.5800õ58.7642õ62.1730õ 62.6147õ58.7642õ62.1730õ 62.6147õ60õ46.0702õ 46.0702õ40õ2,500õ 2,500õdolg v mio € õ79.0158õ2,000õ 2,000õ79.0158õ1,500õ 1,500õ1,000õ 1,000õdolg v mio € õDebt in EUR m20õ20õ500õ500õ0õ0õ2006õ 2006õ 2007õ 2007õ 2008õ 2008õ 2009õ 2009õ 2010õ 2010õ0õ0õodplačilo Debt odplačilo dolga repayment - glavnicaõ dolga - principal - glavnicaõ plačilo Intrest obresti plačilo payment õobresti õ stanje Debt balance dolga stanje na as dolga 31.12.õ at na 12. 31.12.õANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTGraph 4: Structure of sales revenue of DARS d.d.100õ90õ80õ70õ60õ21in v % %õ50õ40õ30õ20õ10õ0õ2006õ 2007õ 2008õ 2009õ 2010õprihodki od cestninõprihodki od zakupninõRevenue prihodki from od tolls zapor in prekomernih obremenitevõprihodki Revenue od služnostiõ from rentRevenues prihodki from po closures pogodbi and o izvajanju extraordinary naročilaõ freight transports drugi prihodki Revenue od from prodajeõ easmentRevenue under the Agreement on the Performance of Tasks Other sales revenueGraph 5: Investments in NACP (net, excl. of VAT)500õ400õin mio v mio EUR € õ300õ200õ100õ0õ2006õ 2007õ 2008õ 2009õ 2010*õgradnjaõ obnavljanjeõ ostaloõConstruction Reconstruction Other* The detailed realisation of construction and reconstruction works is presentedANNUAL REPORT 2010 DARS d.d

BUSINESS REPORTMacroeconomic environment*22Economic activities is envisaged to pick up in the next two years,however economic growth will be relatively low in comparisonto the growth rates noted prior to the economic crisis. Therevitalisation of the Slovenian economy is quite limited, alsodue to the influence of a slow increase in foreign demand, thestrict situation in the financial environment and the worseningof public finance.Slovenia has not completely taken advantage of demand on foreignmarkets, since the growth of Slovenian export was lowerthan the growth of foreign demand, therefore, total growth ofexports, which was 7.8 percent in 2010, will fall to 6.9 percentin 2011 and 6.7 percent in 2012. Last year, the financial situationfor operations of Slovenian companies became even stricterwhich will have a significant impact on the economy in 2011 andin the future. In order to achieve greater growth in the middletermperiod, the Government has prepared a range of measuresfor improving the situation of public finance.The revitalisation of the Slovenian economy in 2010 was slowerthat the economic revitalisation of the euro area and after a 8.1percent real drop in 2009, the GDP level still lags behind therate in 2008.Year 2010 – Slovenia:• Gross domestic product increased by 1.2%.• The volume of goods and services sold abroad increased by7.8% in real terms.• The volume of gross investments in fixed assets fell by6.7%.• The average registered unemployment rate increased to10.7%.• Private consumption increased by 0.5% in real terms.• The import of goods and services grew by 6.6%.• The average inflation rate was 1.8%.• Added value increased by 1.6% in real terms.The influences arising in the international environment, theavailability of financial sources and the situation in constructionwill be the most important factors in strengthening investmentactivities. The Institute of Macroeconomic Analyses andDevelopment of the Republic of Slovenia estimates that thenegative trends in construction will gradually stabilise.The decrease in construction investments which fell by onethird in the past two years was also present in all segments ofthe branch last year. Added value in construction was 14.4%lower in 2010 than in the year 2009. The construction of engineeringbuildings experienced a 20% reduction mostly due toless intensive construction of traffic infrastructure; after concludingintensive construction of motorways, investments ininfrastructure continues to decrease.No growth is expected in individual segments of construction.The Institute of Macroeconomic Analyses and Development ofthe Republic of Slovenia predicts a two percent real decreasein added value in construction. After a significant drop in theyears 2009 and 2010, the construction of traffic infrastructurewill remain on the same level as last year.Predictions for 2011 – Slovenia:• Gross domestic product will increase by 2.2%.• Government consumption will increase by 0.8%.• The average registered unemployment rate will increase to12.1%.• Export will increase in real terms by 6.9%.• Gross investments in fixed assets will increase by 2.9%.• Private consumption will increase by 0.7%.• Export will increase by 5.1% in real terms.*According to the Spring Forecast of Economic Trends; Institute of Macroeconomic Analyses and Development of the Republic of Slovenia, March 2011.ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTGraph 6: Comparison of GDP percentage change in Slovenia with the euro region and EU08õ06õ04õ02õin % v %õ00õ-02õ23-04õ-06õ-08õ-10õ2006 2007õ2008õ 2009õSlovenijaõ Evro območjeõ EUõSlovenia euro region EU2010õGraph 7: Comparison of inflation rate growth in Slovenia with the euro region and EU06õ05õ04õin % v %õ03õ02õ01õ00õ2006õ 2007õ 2008õ 2009õ 2010õSlovenijaõ Evro območjeõ EUõSlovenia euro region EUGraph 8: Comparison of the survey-based unemployment rate (ILO) in Slovenia with the euro region and EU10,08,06,0in %in %4,02,00,02006 2007 2008 2009 2010Slovenia euro region EUSlovenia euro region EUSource: European Economic Forecast - autumn 2009, and Nov 9Source: European Economic Forecast - autumn 2010, and Nov 10 (Tables 1, 16, 23)ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORTMotorways and Expressways inthe Republic of Slovenia24In 1994 the Republic of Slovenia transferred to DARS d.d., undera special agreement, the management and maintenanceof all constructed motorways and infrastructural facilities anddevices on them. DARS d.d. thus received 198.8 kilometres oftwo-lane and four-lane motorways and expressways, and 67.5kilometres of link roads that had been constructed until then.Through the implementation of the NMCD, the motorway networkbeing managed and maintained by DARS d.d. also beganto expand. By the end of 2010 DARS d.d. managed 606.6 km ofmotorways, 163.4 km of link roads, 22.3 km of turnoffs and 9.3km of other connecting roads.Table 2: Length of the network managed and maintained as at 31 DecemberLength of network managed and maintained as at31 Dec (in km)Y ear 2006 Y ear 2007 Y ear 2008 Y ear 2009 Y ear 2010Motorways (tunnels not included) 436,922 438,245 527,728 567,129 582,456Turnoffs 13,351 13,351 16,763 21,345 22,254Other connecting roads 8,550 9,297 9,829 10,416 9,306Link roads 127,019 128,592 149,616 158,435 163,399Tunnels 17,200 17,958 20,435 24,110 24,170Total calculated length of motorways 521,713 525,398 628,455 680,890 697,821Total length of motorways 454,122 456,203 548,163 591,239 606,626Slovenia has a vignette tolling system for light vehicles andopen and closed tolling system for heavy duty vehicles.The vignette tolling system is designed for vehicles whosemaximum allowable weight does not exceed 3.5 t, regar¬dlessof the maximum weight of the trailer. The purchase of a vignetteis mandatory for driving vehicles, whose maximum allowableweight does not exceed 3.5 t, on motorways and express¬waysmanaged by DARS d.d.The open and closed tolling systems are designed for vehicleswhose maximum allowable weight exceeds 3.5 t. The toll at545.6 kilometres is paid directly – classically (using paymentcards, cash) or electronically (DARS card/DARS Transportercard and ABC tag). Heavy duty vehicles, whose maximum allowableweight exceeds 3.5 t, are not tolled on the Ljubljanabypass section, the Maribor bypass road, coastal roads and thenorth part of the Gorenjska section, which are not tolled due tothe termination of construction the tolling station.ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTTable 3: Motorways and expressways managed by DARS d.d.25Status - 31 Dec 2010 (in km)Length ofMW andEW (A)Length ofturnoffsLength oflink roadsLengthof otherroadsClosedsystem forvehiclesover 3.5 tOpensystem forvehiclesover 3.5 tTollroads forvehiclesover 3.5 tNon-toll roadsfor vehiclesover 3.5 tA1Šentilj – Dragučova – Maribor– Slivnica – Celje – Trojane –Ljubljana(Zadobrova–Malence–Kozarje) – Postojna – Razdrto– Divača – Črni Kal – Srmin245,266 11,782 71,246 0 96,666 141,655 238,321 6.945A2 Predor Karavanke – Lesce –Podtabor – Kranj – Ljubljana(Kozarje) – po A1 – Malence –Ivančna Gorica – Bič – Pluska –Trebnje – Hrastje – Novo mesto– Kronovo – Drnovo – Obrežje175,475 4,933 44,936 4,866 7,438 140,752 148,190 27.285A3Divača (Gabrk) - Sežana vzhod- Fernetiči12,246 0 5,131 2,724 12,246 0 12,246 0A4 Slivnica - Draženci [-Gruškovje*]A5 Maribor (Dragučova) – Lenart –Senarska – Vučja vas – MurskaSobota – Dolga vas – Lendava– Pince20,750 4,440 6,530 0 0 20,600 20,600 0.15079,574 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)H4 Razdrto (Nanos) – Vipava –Ajdovščina – Selo – Šempeter- VrtojbaH5 Škofije - Koper (Škocjan) [-Dragonja*]10,222 0 6,849 0 0 4,533 4,533 5.68942,117 0 4,837 1,716 19,203 22,914 42,117 07,833 0 2,153 0 0 0 0 7.833H6Koper (Škocjan) - Koper(Žusterna) [- Lucija]1,880 0 1,509 0 0 0 0 1.880H7 Dolga vas – meja Madžarska 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* Sections being constructed or to be constructed and later managed by DARS d.d.ANNUAL REPORT 2010 DARS d.d

Figure 1: Motorway System in the Republic of Slovenia, December 2010Predor/Karavanke tunnelMMP Gruškovje/IBC (InternationalBorder Crossing) Gruškovjezgrajene avtoceste, hitre ceste in druge javne cesteconstructed motorways, expressways and other public roadsavtocestni odseki, ki bodo v letu 2010 predvidoma predani prometumotorway section under construction finished during the year 2010odseki, na katerih se v letu 2010 gradnja nadaljujesections on which the construction will continue in the year 2010JADRANSKOMORJE/ADRIATICSEAodseki v gradnji po letu 2010sections under construction after the year 2010avtocestni odseki iz t.i. “dodatnega programa”motorway sections from the so-called “additional programme”variantno priključevanjevariant junctionsodseki hitrih cest iz t.i. “dodatnega programa”expressways from the so-called “additional programme”

10,0005,00002004 2005 2006 2007 2008 2009 201010,0005,00002004 2005 2006 2007 2008 2009 20105,000010,00002004 2005 2006 2007 2008 2004 2009 2005 20102006 2007 2008 2009 20105,00002004 2005 2006 2007 2008 2009 201010,00002004 2005 2006 2007PLDPPLDPPLDP45,00040,00035,00030,00025,00020,00015,00010,0005,0000CP TOROVO30,00020,00040,00045,000 45,00014,00040,000CP VRANSKO18,000 CP VIDEŽCP 40,000 KOMPOLJECP DRNOVO35,00040,00025,00012,00035,00016,00035,000 35,00030,00030,00014,00030,00020,00010,00030,00012,00025,00025,00025,000 25,0008,00010,00020,00015,00020,00020,000 20,0008,0006,00015,00010,00015,00015,000 15,0006,00010,00010,0004,00010,0004,00010,0005,0002,0005,0005,0005,0002,0005,00000000002004 2005 2006 2007 2004 2008 2005 2009 2006 2010 2007 2008 2009200420102005 2006 2007 2004 2008 2009 2005 2004 2010 2006 2005 2007 2006 2008 2007 2009 2004 2008 2010 2005 2009 2006 2010 2007 2008 2009 2004 2010 2005 2006 2007 2008 2009 20102004 2005 2006 2007 2008 2009 2010PLDPPLDPPLDPPLDPPLDPPLDPPLDPPLDPCP DOB60,00030,00060,00060,00030,00060,000CP LOGCP TEPANJE CP PREPOLJE CP LOG ŠMARJE SAP ACCP TEPANJE50,00025,00016,000 50,00050,00025,00050,00014,00040,00020,00012,000 40,00040,00020,000Šentilj40,000 MURSKA SOBOTA10,00030,00015,00030,00030,00015,00030,0008,000Dolga vas20,00010,0006,000 20,00020,00010,00020,000 CP DRAGOTINCILenartBeltinci4,000DravogradCP PESNICA10,0005,00010,0002,00010,0005,00010,000LendavaVučja vas000000Sp. Senarska 0Pince2004 2005 MARIBOR 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 2009 2006 2010 2007 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 VIDEŽ CP 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 2009200420102005 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 2007 2007 2008 2008 2009 2009 2010 20102004 2005 2006 2007 2008 2009200420102005 2006 2004 2007 2005 2008 2006 2009 2007 2010 2008 2009 20102004 2005 2006 2007 2008 2009 2010NOVA GORICACP VrhnikaGrosuplje60,00030,00060,00060,00030,000VRTOJBACP LOG CP Drnovo45,000 CP LOGCP TEPANJE45,00030,00030,000 CP TEPANJE40,000AJDOVŠČINAŠMARJE SAP ACPluska40,000CP TOROVOCP LogatecIvančna Gorica50,000 Škocjan CP VRANSKO25,000CP DOB50,000CP TOROVO25,000CP VRANSKOCP DOB40,00040,00050,00035,00025,00035,00025,00035,000CP BAZARA35,00040,000CP DOB40,00020,000 30,00040,000Ponikve30,000 CP KRŠKO Brežice20,00030,00030,00020,00020,000KronovoVipavaHrastje 30,000 25,00030,00025,00015,00025,00015,00025,000 30,000Obrežje20,000CP Unec 15,00020,00015,00020,00020,00020,00020,00010,00020,00010,00015,00015,000Rebrnice CP RAZDRTO15,000 10,000Novo mesto 15,00010,000POSTOJNA10,0005,00010,00010,000 5,00010,000 10,00010,0005,0005,0005,000CP DANE5,00005,0005,000 00Nanos0RibnicaSEŽANACP Postojna0000 2004 2005 2006 2007 2008 2009 201002004 2005 2006 2007 2008 2009 2010002004 2005 2006 2007 2008 2009 2010FERNETIČI2004 2005 2006 2007 2008 2009 20102004 2005 2006 2007 2008 20092004 2005 2006 2007 2008 2009 20102004 2005 2006 2007FERNETTICP Senožeče 2008 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 60,00030,00045,00060,00014,00030,00030,000Metlika60,000Kočevje18,000 CP VIDEŽCP KOMPOLJE40,00040,000P TOROVOCP 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 Izola30,00015,00030,00020,00030,00020,00020,00015,0008,000Jagodje6,0008,000KOPER15,00020,000 6,00020,0006,00015,000Lucija 10,00015,00020,00010,00020,0004,00010,00010,0004,0004,00010,00010,00010,0005,00010,0002,000 5,00010,000 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 20094 2005 2006 2007 2008 2009 20102004 2005 2006 2007 2008 2009 20102004 2005 2006 2007 2008 2009 2010PLDPPLDPCP TOROVO20,00018,000 CP VIDEŽ16,00014,00012,00010,0008,0006,0004,0002,00002004 2005 2006 2007 2008 20092004 2005 2006 2007 2008 2009 2010PLDPPLDPPLDPPLDPPLDPCP VRANSKO20,00030,000 45,00060,00040,00020,00030,00045,000CP CP VRANSKO40,000TEPANJE CP TOROVOŠMARJE SAP AC16,00045,00014,00018,000 CP VIDEŽCP KOMPOLJE18,000 CP VIDEŽ CP DRNOVO35,00025,00035,00014,00040,00040,00050,00012,00025,00016,00035,00016,00035,00012,00030,00014,00020,000 30,00040,00014,000 10,00030,00020,00030,00010,00012,00025,00012,00025,00025,00025,0008,0008,00010,00015,00030,00020,00010,00015,00020,00020,000 6,00020,0008,0008,000 6,00010,000 15,00015,000 4,00020,00015,00010,00015,0006,0006,00010,00010,0004,0004,00010,0004,00010,000 2,0005,00010,0005,0002,0005,0005,000 05,0002,000 2,0005,0000000 2004 2005 2006 2007 0 2008 200902010 00002005 2006 2007 2008 2004 2009 2005 2010 2006 2007 2008 2004 2009 2005 2010 2004 2006 2005 2007 2006 2008 2007 2009 2004 2008 2010 2005 2009 2006 2010 2007 2004 2008 2005 2009 2006 2010 2004 2007 2005 2008 2006 2004 2007 2009 2005 2008 2006 2009 2007 2010 2008 2009 2010 2004 2005 2006200420072005200820062009200720102008 2009 20102004 2005 2006 2007 2008 2009 2010LOGPLDP60,00050,00040,00030,000Figure 2: Average annual fraffic 20,000 Loads at counting LocationsPLDPPLDP PLDPPLDPPLDPPLDP10,000PLDPPLDP0CP LOG2004 2005 2006 2007 2008 2009 2010PLDPPLDPPLDPPLDPPLDPPLDP PLDPPLDPPLDPPLDPPLDPCP PREPOLJEPLDP30,00025,00020,00015,00010,0005,0000CP TEPANJE2004 2005 2006 2007 2008 2009 2010PLDPPLDPPLDPPLDPPLDPPLDP PLDPPLDPPLDPPLDPPLDP60,00050,00040,00030,00020,00010,0000ŠMARJE SAP ACPLDPPLDPPLDPPLDPPLDPPLDPCP DOBPLDPCP KOMPOLJEPLDPPLDPPLDP30,00025,00020,00015,00010,0005,0000CP DOB2004 2005 2006 2004 2007 2005 2008 2006 2009 2007 2010 2008 2009 2010ŠMARJE SAP ACPLDPPLDP PLDPPLDPPLDPPLDP PLDPPLDPPLDP45,00040,00035,00030,00025,00020,00015,00010,0005,000016,00014,00012,00010,0008,0006,0004,0002,000014,00016,00012,000 14,00012,00010,00010,0008,0006,0006,0004,0004,000 2,0002,00000CP KOMPOLJE2004 2005 2006 2007 2008 2009 2010CP PREPOLJECP PREPOLJECP DRNOVO2004 2005 2006 2007 2008 2009 20102004 2005 2006 2007 2008 2009 2010PLDPPLDPPLDPPLDP14,00012,00010,0008,0006,0004,0002,000030,00025,00020,00015,00010,0005,000060,00050,00040,00030,00020,00010,000014,00012,00010,0008,0006,0004,0002,0000CP DRNOVO2004 2005 2006 2007CP DOB2004 2005 2006 2007ŠMARJE SAP AC2004 2005 2006 2007CP DRNOVO2004 2005 2006 2007VIDEŽPLDP45,00040,00035,00030,00025,00020,00015,00010,0005,000PLDP60,000CP KOMPOLJE CP LOG50,00040,00030,00020,00010,000PLDP16,00014,00012,00010,0008,0006,0004,0002,000CP PREPOLJEPLDP14,00012,00010,0008,0006,0004,0002,00030,000CP DRNOVO CP TEPANJEPLDP25,00020,00015,00010,0005,000PLDP60,00050,00040,00030,00020,00010,000ŠMARJE SAP CP AC PREPOLJEPLDP16,00014,00012,00010,0008,0006,0004,0002,0000

BUSINESS REPORTTraffic LoadsFor DARS d.d., traffic loads mean more revenue from toll collection,but at the same time they represent a burden for theCompany’s business operation in terms of motorway maintenance.Traffic increased intensively in the period from 2004 to 2008on Slovenian motorways and expressways. The total volume oftraffic most rapidly increased in the area of Ljubljana (average7 percent annual rate). A very rapid growth of vehicle volumewas also registered on the Primorska motorway section, wherethe average annual growth rate was approximately 6 percent.The same applies for the Štajerska motorway section. Less intensivegrowth of total traffic volume was registered on motorwaysections in the direction of Gorenjska, Dolenjska, the VipavaValley and Prekmurje. Particularly characteristic for thisperiod was rapid growth of heavy cargo traffic.A noticeable increase in traffic was noticed in 2010 in comparisonwith 2009, when the growth settled mostly due to the economiccrisis. The crossings at toll stations for R3 toll class vehiclesremained at the same level as in 2009, namely at 0.2%of total number of crossings. The number of crossings at tollstations for R4 toll class vehicles increased in 2010 by 8.4%.Total number of R3 and R4 crossings increased by 6.7%, however,we have to mention the fact that the new tolling stationPrepolje was opened in the second half of 2009. (Increase ofthe number of crossings – Primorska motorway section: 7.9%,Štajerska motorway section: 8.6 %, Ljubljana motorway section:2.5%, and Gorenjska motorway section: 7.5%.)29Graph 9: Index of the number of crossings in 2010/2009 for R3 and R4 classes at all toll stations120Index no. of crossingsIndeksšt. prehodov110100901 2 3 4 5 6 7 8 9 10 11 12MeseciMonthsšt. preh. R3 in R4 št. preh. R3 št. preh. R4no. of crossings R3 in R4 no. of crossings R3 no. of crossings R3Graph 10: Collected toll index (for R3 and R4 classes) 2010/2009 according to motorway sections170õ160õ150õ140õIndexIndexõ130õ120õ110õ100õ90õ1õ 2õ 3õ 4õ 5õ 6õ 7õ 8õ 9õ 10õ 11õ 12õMeseci õMonthsPRIMORSKA 2010PRIMORSKA 2010õ ŠTAJERSKA 2010õŠTAJERSKA 2010LJUBLJANA 2010õ GORENJSKA 2010õLJUBLJANA GORENJSKA 2010The large increase in revenue from collected tolls in the first half of 2010 is mostly the consequence of the increased tollfor cargo vehicles, which entered into force on 1 July 2009.ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORT30BusinessANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORT31Business reportANNUAL REPORT 2010 DARS d.d

BUSINESS REPORTKey Business Events in 2010 Financial YearJanuaryThe Government of the Republic of Slovenia adopted the decisionthat Mr Milan Medved would be appointed to the SupervisoryBoard of DARS d.d. upon the proposal of the Ministryof Finance.The Government appointed Gordana Bošković as a member ofthe Management Board of DARS d.d.We have initiated the works of the contractor for the constructionof 2.1 km long Markovec twin-tube road tunnel commenced.A differential tolling of cargo vehicle considering the EUROemissionclasses was introduced.FebruaryThe Government of the Republic of Slovenia adopted the MCR-SA-1 for 2010 which stipulates the performance of works forthe development and reconstruction of motorways in a totalvalue of EUR 341 million.The Supervisory Board of DARS d.d. adopted the Company’sBusiness Plan for 2010.MarchThe Maribor motorway maintenance centre was build alongthe motorway in Hajdina at Ptuj.AprilThe Government of the Republic of Slovenia adopted the Decreeon modification and supplementation of Decree on the categorisationof national roads, which re-categorised the part ofthe main road between Koper and Žusterna to an expressway.JuneThe European Commission issued the Decision of the Commissionon the major project “A2 Motorway; Bič-Hrastje; Pluska-Ponikvesection“. The project is a part of the OperationalProgramme of Enviromental and transport Infrastructure Developmentfor the period 2007-2013.The motorway sections Pluska-Ponikve and Ponikve-Hrastje,namely in a total length of 14.8 km, were given over to traffic.The construction of these sections was partially financed bythe EU Cohesion Fund.JulyThe roundabout Tomačevo with traffic signalisation and Naklomotorway link road on the Podtabor-Naklo section were givenover to traffic. The bypass road past the Dragonja village in atotal length of 0.7 km was finished and open for traffic. TheCompany initiated the works on the Želodnik-Mengeš mainroad section including the Mengeš bypass.The Government discussed the DARS d.d. Annual Report for2009, including the Auditor’s Report and the Supervisory BoardReport on the results of verifying the annual report. TheGovernment granted discharges to the Management Boardand the Supervisory Board of DARS d.d. for the 2009 financialyear.AugustThe 0.6 km long motorway link road Podtabor on the four-lanemotorway section Peračica-Podtabor was given over to traffic.SeptemberThe Government of the Republic of Slovenia adopted the Decreeon the national spatial plan for the Draženci-Gruškovje internationalborder crossing motorway section.NovemberThe European Commission issued the Decision of the Commissionon the major project “A2 Motorway; Bič-Hrastje; Ponikve-Hrastjesection”. The project is a part of the OperationalProgramme of Enviromental and transport Infrastructure Developmentfor the period 2007-2013.The works of the contractor for the construction of the 10.4km long Gorišnica-Ormož main road section commenced.For the purposes of financing the construction of motorwaysections as determined in the NMCP, a loan contract was concludedwith the Kommunalkredit Austria AG bank for a loan inthe amount of EUR 70 million.DecemberThe MCRSA-1, adopted by the National Assembly of the Republicof Slovenia at the session held on 23 November 2010,entered into force.The Act regulating the consent and the guarantee of the Republicof Slovenia for obligations of DARS d.d. for loans andissued debt securities for the realization of the constructionof motorway sections determined in the NMCP in the amountof EUR 297.811 million (ZPDVPNPIA3), adopted by the NationalAssembly of the Republic of Slovenia at the session held on23 November 2010, entered into force.The Government of theRepublic of Slovenia adopted the Decree on the national spatialplan for the Brezovica link road on the Ljubljana-Vrhnikamotorway section.33ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORTDescription of Consequences of Adoptingthe MCRSA-1 on the Operations of DARSd.d.34Summary of MCRSA-1MCRSA-1 entered into force on 4 December 2010. The text belowpresents the summary of most important provisions of theAct.The Act stipulates the status of DARS d.d. company and materialright in connection to motorways and determines the conditions,according to which the Company performs tasks relatedto spatial planning, integration in the environment and theacquisition of land, as well as the construction, managementand maintenance of motorways.DARS d.d. performs special tasks in relation to spatial planningand integrating motorways in the environment as well as tasksin relation to acquiring real property for the requirements ofmotorway construction in the name and for the State’s account.The sources for the performance of these tasks are guaranteedin the national budget. Both parties – Republic of Sloveniaand DARS d.d. – in the Agreement on the Performance ofContracts agree on mutual rights and obligations related to theperformance of tasks, especially the amount of the fee for performingservice, the method and deadline for the provision ofmeans, as well as other methods and forms of task implementationsupervision. The Agreement is concluded for the termof motorway construction or for the period of repayment ofobligations arising from loans and debt securities for the purposeof constructing motorways, if this period is longer thanthe period of motorway construction.DARS d.d. constructs motorways in its own name and for itsown account within the scope of the concession accordingto the BMT model (Build-Manage-Transfer) of ownership rights.The concession relationship between the Republic ofSlovenia and DARS d.d. arises by concluding a Concessionagreement for constructing an individual motorway section,thereby regulating all mutual rights and obligationsduring the construction period, especially the issues relatedto deadlines and quality of performed works, rights andobligations related to the management and maintenanceof motorways, and the method and form of supervisionover these tasks, including sanctions for possible violations.The concession contract for the construction of a motorwaysection is concluded for a term that enables the repayment ofall obligations arising from loans or debt securities, raised orissued for the construction of the specified motorway section,however, for a maximum of 50 years. For the period of the durationof the Concession agreement, the Republic of Sloveniaestablishes in favour of DARS d.d. a right of superficies on land,where DARS d.d. will perform construction works. The right ofsuperficies is gratuitous. At termination of the right of superficies,the Republic of Slovenia as the owner of the land does notpay any compensation to the owner of the right of superficies.The financing sources for these tasks are tolls and other marketingsources of motorways, borrowings and other sources.DARS d.d. manages and maintains motorway sections, for whichit acquires the construction concession, namely from the daythe motorway section is given over to traffic, until the expiry ofthe validity of the concession contract. Motorway managementcomprises the establishment of easements for the waterlineand sewage system, electronic communication networks, electricalinstallations, pipelines and similar buildings and deviceswith public significance, on the motorway as the object, as wellas on land, where the right of superficies has been established.Management also comprises the performance of severaladministrative tasks like regulating and supervising the trafficregulation on roads, providing information to the public on thesituation on roads and regarding traffic, issuing consensusesfor constructing economic infrastructure or performing maintenanceand other works in the area of the road or outsidethe safety line, as well as interventions in the road line due toconstructing other buildings or devices, temporary prohibitionor restriction of road traffic and the implementation of supervisionof toll payment violations.DARS d.d. continues with the performance of tasks relatedto spatial planning and integration of motorways in the environment,as well as the acquisition of real property for therequirements of motorway construction in accordance with theAgreement on the Performance of Contracts. Any provisionsof the Agreement, which are not in accordance with MCRSA-1,must be harmonised by the Republic of Slovenia and DARS d.d.within six months of the day the Act entered into force.DARS d.d. also continues with the construction of motorwaysections that had commenced before the MCRSA-1 entered intoforce, namely in accordance with the Agreement on the Performanceof Contracts. The Republic of Slovenia and DARS d.d.are obliged to harmonise the contents of the Agreement withArticle 8 of MCRSA-1 within six month of day the Act enteredinto force.Under the Concession agreement, DARS d.d. continues withthe management and maintenance of motorways, which werebuild or their construction had begun prior to the entry intoforce of MCRSA-1, namely by initiating the management andmaintenance of motorways on the day when they are givenover to traffic.ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORT36form, therefore, the takeover of the infrastructure is presentedin financial statements from 1 January 2010 as stipulated byArticle 25 of the MCRSA-1.In its financial statements, DARS d.d. also presents financialliabilities to banks and liabilities that refer to issued bonds,with which DARS d.d. financed the construction of motorwayswithin the NMCP in the past. The Company’s capital was increasedwith an in-kind contribution of the state, comprising thefunds provided by the Republic of Slovenia in the past for financingthe NMCP, which were presented on 1 January 2010as the liability of DARS d.d. to the Republic of Slovenia or as areceivable of the Republic of Slovenia to DARS d.d., reduced bythe value of land as at 1 January 2010.Based on Article 4 of the MCRSA-1, DARS d.d. performs transactionsin the name and the account of the State, and presentsthese transactions in the financial statements as foreignaccount transactions. These are spatial planning tasks and tasksrelated to the integration of motorways in the environment,and the acquisition of real property for the requirements ofmotorways construction, which the company performs in accordancewith the Agreement on the Performance of Contracts.DARS d.d. registers receivables to the Republic of SloveniaANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTBalance sheet of DARS d.d. as at 1 January 2010 and 31 December 2009for all performed transactions. Funds for such transactions are provided from the budget of the Republic of Slovenia in accordancewith Article 10 of the MCRSA-1.37in EUR (no cents) 1 Jan 2010 31 Dec 2009ASSETS 5,499,926,445 98,739,533A. LONG-TERM ASSETS 5,385,403,744 20,940,141I. Intangible assets and long-term deferred costs and accrued revenue 627,377 627,3771. Long-term property rights 627,377 627,377II. Tangible fixed assets 5,384,306,266 19,842,6631. Land and buildings 5,060,653,162 1,479,078a) Land 31,097,698 29,923b) Buildings 5,029,555,464 1,449,1543. Other plant and equipment 19,422,380 17,659,6714. Property, plant and equipment under acquisition 304,230,724 703,914b) Tangible fixed assets Property, plant and equipment under construction 304,230,724 703,914IV. Long-term financial investments 964 9641. Long-term financial investments excluding loans 964 964c) Other shares and interests 964 964VI. Deferred tax assets 469,136 469,136B. CURRENT ASSETS 91,724,940 76,808,651II. Inventories 1,877,096 1,877,0961. Material 1,877,096 1,877,096III. Short-term financial investments 55,441,908 45,265,6321. Short-term financial investments excluding loans 55,441,908 45,265,632c) Other short-term financial investments 55,441,908 45,265,632IV. Short-term operating receivables 27,416,817 22,693,4662. Short-term trade receivables 10,278,383 9,800,5913. Short-term operating receivables due from others 17,138,433 12,892,875V. Cash 6,989,120 6,972,457C. SHORT-TERM DEFERRED COSTS AND ACCRUED REVENUE 22,797,761 990,741OFF BALANCE SHEET ITEMS 299,972,966 20,826,607ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORT38in EUR (no cents) 1 Jan 2010 31 Dec 2009LIABILITIES 5,499,926,445 98,739,533A. EQUITY 2,375,067,411 55,413,862I. Called-in capital 2,319,866,345 212,8231. Share capital 2,319,866,345 212,823II. Capital reserves 26,428,084 26,428,057III. Revenue reserves 17,130,756 17,130,7561. Legal reserves 21,282 21,2825. Other revenue reserves 17,109,474 17,109,474V. Retained earnings 1,480,641 1,480,641VI. Net profit or loss for the period 10,161,585 10,161,585B. PROVISIONS AND LONG-TERM ACCRUED COSTS AND DEFERRED REVENUE 19,213,791 3,701,7751. Provisions for pensions and similar liabilities 1,984,441 1,984,4412. Other provisions 15,215,933 844,8443. Long-term accrued costs and deferred revenue 2,013,417 872,490C. LONG-TERM LIABILITIES 2,889,534,469 0I. Long-term financial liabilities 2,885,506,667 02. Long-term financial liabilities to banks 2,725,142,120 03. Long-term financial liabilities based on bonds 160,364,547 0II. Long-term operating liabilities 4,027,801 05. Other long-term operating liabilities 4,027,801 0D. SHORT-TERM LIABILITIES 195,951,579 19,436,759II. Short-term financial liabilities 108,658,579 02. Short-term financial liabilities to banks 97,416,794 03. Other short-term financial liabilities 11,241,785 0III. Short-term operating liabilities 87,293,000 19,436,7592. Short-term trade payables 79,548,260 11,692,0324. Short-term advances payable 62,526 57,7905. Other short-term operating liabilities 7,682,215 7,686,936E. SHORT-TERM ACCRUED COSTS AND DEFERRED REVENUE 20,159,195 20,156,383F. LIABILITIES ARISING FROM THE USE OF STATE-OWNED ASSETS UNDER MANAGEMENT TO FINANCECOMPANY-OWNED ASSETS0 30,754OFF BALANCE SHEET ITEMS 299,972,966 20,826,607ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORT40long-term operating liabilities amount to EUR 4,027,801. Thisamount presents the liability to various co-financers of the infrastructure,which although constructed for their needs hadstill not been transferred to them in kind. Liabilities from borrowingsand issued debt securities are insured by a guaranteeof the Republic of Slovenia.Short-term liabilities present the short-term part of long-termfinancial liabilities due for payment in the following year, andinterest accounted for from loans, issued bonds and derivatives.As at 1 January 2010, short-term liabilities increasedby EUR 184,709,795 and amounted to EUR 195,951,579. Theincrease of short-term liabilities includes short-term liabilitiesfor bank loans for the purchase of tangible fixed assets andpresents a part of the principal of long-term loans, which aredue for payment in 2010 in the amount of EUR 61,910,263, allinterest accounted for or calculated on the basis of loans andissued bonds, present a cost in 2010 and are short-term deferred,and other financial liabilities in total amount of EUR35,506,531.Short-term accrued costs and deferred revenue increased byEUR 2,812.The effects of the MCRSA-1, presentedin the profit and loss account ofDARS d.d. for 2010DARS d.d. in 2004 concluded two fundamental contracts withthe Republic of Slovenia, namely:• The Agreement on the Performance of Contracts forperforming tasks in relation to the construction andreconstruction of motorways and financial engineering andother related tasks as determined by the NMCP (hereinafterreferred to as the Agreement on the Performance ofContracts);• the Concession Agreement for the management andmaintenance of motorways in the Republic of Slovenia(hereinafter referred to as the Concession Agreement).After the adoption of the MCRSA-1 the contracts remain in force,if they are not in discordance with the Act. The Republic ofSlovenia and DARS d.d. have to conclude an annex regulatingmutual relations arising from both contracts within six monthsfrom the day when the Act enters into force. The contracts hadnot been modified until the day of the publication of DARS d.d.Annual Report for 2010.Agreement on the Performance ofContractsThe subject of the Agreement on the Performance of Contractsupon the adoption of the MCRSA-1 is performing transactionsin the name and for the account of the Republic ofSlovenia and is specified in Article 4 of the MCRSA-1. The performanceof tasks includes the performance of tasks relatedto spatial planning and integrating motorways in the environment,and acquiring real property for the requirements ofmotorway construction.Tasks, which DARS d.d. performed prior to the entry into forceof the MCRSA-1 in its own behalf and for the account of RS,were:• tasks related to the elaboration of project documentationfor the construction and reconstruction of motorways,• tasks related to the construction and reconstruction ofmotorways,• tasks related to financial engineering,• other tasks related to contract performance.As of 1 January 2010 DARS d.d. performs the mentioned taskonits own behalf and for its own account.DARS d.d. on its own behalf and for its own account also performstasks related to the management and disposal of realproperty, acquired for the construction of motorways, which,however, were partially or completely not used for the constructionof motorways or for their management or maintenance.For the performance of tasks under the Agreement concludedwith the Republic of Slovenia on the Performance of Contracts,DARS d.d. is entitled to a compensation in the amount of5.49% of the value of the works carried out by DARS d.d.,as set out in Article 4 of the MCRSA-1. In the past, DARS d.d.was entitled to a compensation in the amount of 5.49% ofall works, carried in accordance with the Agreement on thePerformance of Contracts, therefore the revenue of DARS d.d.arising from the compensation as set out in the Agreementon the Performance of Contracts, has significantly decreased,namely from EUR 18,050,273 in 2009 to only EUR 668,098in 2010.ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTConcession AgreementThe Concession Agreement regulates all mutual relations inconnection to the concession for the management and maintenanceof motorways. Motorway management and maintenancecomprise:• activities and tasks, related to motorway management;• regular maintenance of motorways and facilities onmotorways,• activity and tasks, connected to toll collection for the use oftoll motorways.A concession for regular maintenance and management isgranted for motorways which were managed and maintainedby DARS d.d. at the time of the adoption of MCRSA-1, and formotorways, the construction of which was still in process atthe time of the adoption of MCRSA-1, namely, as of the daywhen such motorways are given over to traffic.The concessionaire (DARS d.d.) performs the Concession Agreementon its own behalf and for its own account. Until 2010,DARS d.d. paid the concession grantor (the State) a concessionfee determined as the difference between tolls collectedand other revenues on the one side, and recognised expensesarising from concession activities by taking into account a normalreturn on equity, on the other side. As of 1 January 2010,DARS d.d. is no longer paying the concession fee in accordancewith the MCRSA-1, however, it is obliged to regularly servicethe debt, raised for the requirements of motorway construction.As at 1 January 2010, the Company presented in its financialstatements the financial liabilities arising from the debt,raised for the requirements of financing the NMCP. In 2009,DARS d.d. presented the concession fee in operating expenses(the Company does not present this tax in 2010), expenses arisingfrom interest on loans and issued bonds are presented infinancing expenses. If DARS d.d. would present expenses fromfinancial liabilities in 2009, these expenses would amount toEUR 58,138,876.The calculated concession fee for 2009 amounted to EUR169,447,153 and was determined as the difference betweentolls collected and other revenues on one side, and recognisedexpenses for performing concession activities and taking intoaccount a normal return on equity on the other side. The recognisedexpenses were determined regarding the:• number of entries and exits of vehicles to the motorway orthe number of crossings of toll stations,• annual amount of tolls collected,• number of motorway kilometres managed by the Company,• recognised expenses for performing telecommunicationsactivities and activities for guaranteeing safety in tunnels,and• interest rates in the relation to the Company’s equity as arecognised return to the concessionaire.Tangible fixed assets include built infrastructure, which is alsodepreciated. In 2010, the Company presented the depreciationcost of the infrastructure given over to traffic in its profit andloss statement for the first time, since the infrastructure waspresented in the balance sheet of RS assets managed by DARSd.d. until 31 December 2009. If the Company had prepared financialstatements in 2009 in the same way as in 2010, the additionaldepreciation cost would amount to EUR 99,000,205and total depreciation costs for all assets would amount toEUR 108,502,550.The Company presented in 2010 other operating expenses dueto the costs of forming long-term provisions, referring to longtermcalculated costs in advance for the purposes of expectedlosses in connection to indemnification claims for legal actions,related to the construction of motorways, which had beenpresented among the off balance sheet items until 31 December2009.41ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORTBusiness Risks42In the year of financial and economic crisis a lot of attentionwas directed to timely identification of risks and efficientrisk management. Focus was predominantly placed on decreasingthe negative consequences that the crisis would haveon the Company’s business results. Therefore, the Companyendeavoured to identify the most relevant risks, monitor themthroughout the business process and react in a timely mannerin order to reduce any possible deviations from the plannedresults. The Company also endeavoured to ensure timely identificationof business opportunities for individual activities ofDARS d.d.All risks caused by the following factors are managed:• external factors,• planned modifications of the tolling system,• legislation and regulations,• non-compliance with the contractual provisions,• traffic safety, motorway and expressway traffic flowcapacity,• IT support to business processes,• employees,• environment protection,• protection of property,• health and safety at work.Impact of external factorsThe Company accurately monitored all economic flows andactively adjusted its operations to the new situation in theeconomic and political sphere. The external risk related to legislationand regulations was contained by monitoring legislationand consultations, as well as by providing proposals in theinitial phase of law drafting. We also give our arguments regardingthe preparation of price lists that determine toll prices,the modifications of toll price and manners of toll payment.The planned modifications of thetolling systemDue to the exceptional significance of a quality transition toelectronic tolling system in FTF, DARS d.d. has formed a projectgroup including all the responsible directors, which withthe assistance of foreign consultants implements all steps,anticipated in the Action Plan. The Plan introduces significanttechnological and organisational modifications.The risk of non-compliance with thecontractual provisionsThe Company diligently monitors all information in relationto the operations of its business partners and prepares measuresfor preventing the impact of disadvantageous eventson the Company’s operations (modifications of provisions,determined in the contract, consensual terminations ofcontracts). It endeavours to carry out quality negotiationswith business partners already within the contractor selectionprocedure, during the public procurement procedure,by accurately examining the anticipated deadlines for constructingan individual project, payment terms and warranties,accurately prepared time plans of finishing individualphases; and during the project implementation, permanentlymonitors the actual work process with the determinedtime plan and react immediately in case of any deviations.Traffic safety, motorway andexpressway traffic flow capacityInvestments in new sections contribute to a faster, safer, moreefficient and more economical transport. Reconstruction ofmotorway and expressway network ensures improved connectionof regions, better transport mobility and faster economicdevelopment. In a wider sense, the realisation of motorwayreconstruction contributes to local economic growth and haspositive macroeconomic effects. By developing the dTIMS-CTtotal infrastructure system (PMS-DARS) the Company acquiresquality analyses of roads, which enable it to prepare a detailedplan of road reconstruction. The improvement of traffic safetyis supported by the operations of a reliable and proper TSMS,tunnel electromechanical equipment and tolling devices.IT support to business processesThe increasing scope of IT support to business processes isconnected to risks, among which the most important risksinclude the risk of disturbances or termination of hardwareoperations, local network, communications connections, systemand applicative software, as well as risk related to systemsafety.The control of the aforementioned risks is guaranteed by regularmonitoring of the situation and events, and by promptlyreacting to any occurring changes. Permanent IT operationssystems (duplicating the most important parts of IT-communicationtechnology, operations of a secondary database, duplicatingcommunication ways, pro-active system managementANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTand surveillance) have been established as well as safety measuresfor the protection and security of IT systems from unauthorisedinterventions.EmployeesEmployees are one of the key factors of the Company’s successfuloperation. Each year, the Company assesses the socialatmosphere in the organisation and adopts appropriatemeasures for improving the satisfaction of employees, thequality of the work environment and increasing the team worklevel. In 2010, the Company commenced with the project forthe restructure of complete operations of the Company, whichwill be realised in 2011. Due to the introduction of ETS in FTF,the number of employees will be lower; therefore, the numberof employees has been adjusted by hiring additional work forcethrough student service centres and with through definedtime employment.Protection of propertyThe property of DARS d.d. is protected by means of physicalcontrols, as well as by a number of insurance policies (e.g. fireinsurance, car insurance, hull insurance, general insurance,burglary insurance, earthquake insurance).Health and safety at workTraffic is increasing every year, and since some users do notconsider the assembled signalisations, the Company’s maintenanceand tolling system inspection workers have becomeincreasingly endangered. The majority of maintenance worksand tolling system inspections are performed when traffic onmotorways is very dense. In the past year, the Safety and Healthat Work Department controlled the risk of accidents andinjuries at work by preparing instructions for safe implementationof works, by organising general training programmesin the field of safety and health at work and other activities.According to employee reactions, the Company estimates thattheir knowledge and attitude to this area has improved andnotices that the attitude of workers to their own safety hasimproved.Risks related to environmentprotectionRisks related to environment protection include the risk of inappropriatewaste disposal, the risk of environment pollutionand the risk of protecting the area of influence, are becomingmore and more important. Systematic control of these risksreflects the increasing awareness of the employees aboutenvironment protection. Accidents on motorways can have anegative impact on the environment; which is why it is importantto reduce the risks for the emergence of accidents andto appropriately react when they occur. Trainings and exercisesfor appropriate reactions guarantee minimum impacts onthe environment, when/if such extraordinary events occur. Byimplementing appropriate activities within the scope of motorwaymaintenance (cleaning of flood control reservoirs etc.),collecting and sorting wastes, and by constantly controllingcarbon monoxide concentrations and visibility in tunnels, wecontributed to reducing negative impacts on the environmentand controlling the risks emerging in the environment.43ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORTFinancial Operations and Financial RiskManagement44Financial risks are risks that may negatively influence the abilityto create financial revenue, control financial expenses, preservethe value of financial resources, and to control financialliabilities.By managing financial risks in DARS d.d., the Company endeavoursto attain maximum stability of operations and reduceexposure to individual risks to an acceptable level. Most importantly,it focuses on maximally stabilizing the cash flow forthe settlement of liabilities from borrowings for motorway constructionTable 4: Financial RisksRisk scope Description of risk Control method Exposure*Risk of changes inexchange ratesThreat of loss due to unfavourableexchange rate fluctuationsUse of natural protection by matching cash flows, regularmonitoring of currency markets, hedging with appropriatefinancial instrumentsVery lowRisk of changes ininterest ratesThreat of unfavourable interest ratefluctuations or changes in conditions forfinancing and raising loansMonitoring the interest rate fluctuations, negotiations with creditinstitutions, hedging with appropriate financial instrumentsHighRisk of changes ininterest marginsThreat of growing interest margins inraising loansMonitoring the situation in financial markets, adjusting debtmaturities, refinancing of loans with high marginsModerateCredit risk DARS d.d.Threat of inability to settle obligationsarising from borrowingsMonitoring the Company’s credit portfolio, providing sufficientamounts of concession feeModerateCredit risk of businesspartnersRisk of non-payment on the part ofbusiness partnersMonitoring exposure to an individual partnerLowLiquidity riskThreat of lack of liquid funds for servicingbusiness and financial liabilitiesPlanning needs for liquid funds, previously agreed loan facilitiesand overdraftsLow*Exposure reflects possible realisation of risk and scope of possible loss.Risk of changes in exchange ratesIn 2010, exchange rate fluctuation risks were hedged primarilyby means of natural protection, i.e. by matching cash flows.This type of hedge is possible due to the small number ofcurrencies used by DARS d.d. in its operations, as well as thefact that a large majority of its transactions are performed inthe euro currency.Risk of changes in interest ratesAt the end of 2010, the Company had 26 long-term loansthat were partly or entirely linked to the reference interestrate EURIBOR (6-month or 3-month rate). In 2010, DARS d.d.entered into a new loan agreements in a total value of EUR70 million with Kommunalkredit Austria AG bank. In order toprovide a more efficient control of interest rate risks, the loanwas raised on a fixed interest rate basis.Part of the variable interest rate of long-term loans is hedgedby the use of adequate derivatives with which the variableinterest rate was changed into a fixed interest rate. On31 December 2010, the Company had 36.7% of its debt at afixed interest rate and 61.7% at a variable interest ate, while1.6% of its debt was free of interest. By using derivatives, theCompany hedged 41.9% of its credit portfolio against interestrate risks.In 2010, the European Central Bank maintained its key interestrate at 1%. The value of the reference interest rate EURI-BOR slowly increased throughout the entire year. Therefore,the Company again fixed the interest rates of certain tranchesof EIB loans, since the interest rate fixation period (revisablefixed interest rates) had expired in 2010. The Companyalso initiated the formal procedure for fixing the interest rateof certain tranches of EIB loans in the amount of EUR 50 million,which by 2010 had had a variable interest rate.ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTThe simulation of the influence of interest rate change onfinancial expenses in 2011 considering the debt of DARS d.d.and interest rate structure on 31 December 2010 shows thatthe change, namely an increase or decrease of EURIBOR by1 percentage point, would present an increase or decrease infinancial expenses by EUR 17,277,065.Risk of changes in interest marginsIn 2010, the interest margins of banks fluctuated similarly asin 2009. Due to favourable situation on the market, DARS d.d.raised a loan for 10-year period, 5-year moratorium and fixedinterest rate.Credit risk of DARS d.d.DARS credit risk represents the possibility that the Companywill not be able to settle its obligations arising from borrowings.Its basic source of funds for the repayment of obligationsarising from borrowings in accordance with MCRSA-1 includesrevenue from toll collection, the amount of which suffices forcovering also the obligations arising from borrowings. However,the credit portfolio is very diligently monitored, since negativechanges on financial markets can rapidly change theamount of annual obligations arising from borrowings. Therefore,it is important to enforce a tolling system in Sloveniathat will maximise the revenue from collected toll and enablethe motorway manager to manage these revenues with thelowest costs possible. The risk is managed concurrently withthe management of interest rate risk.Credit risk of business partnersThe credit risk of business partners represents the possibilitythat receivables are paid partly or not at all. DARS d.d.regularly supervises outstanding receivables from individualbusiness partners and, if necessary, takes appropriate action.This risk is present in the sale of vignettes through salesagents and in the payment of tolls for vehicles over 3.5 tusing electronic media, where payment is made for the previousmonth on the basis of an issued monthly invoice. Thelevel of this risk and the nature of the Company’s businessoperations currently do not require any limitation of maximumexposure to individual partners, active management ofreceivables or credit rating calculations, but hedging instrumentsare required for a specific segment of customers.Liquidity riskIn 2010, the risks linked to solvency were reduced througheffective liquidity management and the formation of a highlyliquid investment portfolio.The Company assessed that its liquidity risk continues to below. Although banks have generally restricted their financingconditions, however, DARS d.d. in 2010 did not have anydifficulties accessing sources on the international financialmarket.45ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORTAnalysis of Business Performance46Revenue of DARS d.d.Table 5: Review of the revenue of DARS d.d.T ype of revenue 2010in EUR2009in EURIndexin EURStructuralshares for2010/2009Revenue under the Agreement on the Performance of Tasks 668,098 18,050,273 4 0%Tolls collected, rentals, motorway closures, extraordinary freight transports and otherrevenue313,610,621 253,003,455 124 99%Revenue from tolls 290,095,679 237,967,352 122 92%Revenue from leases 6,518,711 5,665,390 115 2%Revenue from closure and overweight load transports 2,378,157 2,628,577 90 1%Revenue from easements 131,767 335,415 39 0%Revenue from the lease of optical fibre/telecommunication lines 1,011,992 1,012,196 100 0%Other sales revenue 608,469 391,189 156 0%Other operating revenue 12,865,847 5,003,336 257 4%Financial revenue 2,256,934 796,066 284 1%Other revenue 80,171 479,563 17 0%TOTAL 316,615,824 272,329,357 116 100%In the 2010 financial year, the total revenue of DARS d.d. amountedto EUR 316.6 million, which is 16% higher than the 2009figure. The growth of revenue was largely the result of increasedtolls collected, which amounted to EUR 290.1 million andwere 22% higher than the 2009 figure. The increase in revenueis due to the increase in toll collection of vehicles with amaximum weight exceeding 3.5 t (due to the increase in tolls inthe middle of 2009, opening of new road sections and increasein traffic in 2010) and higher revenue due to sold vignettes.Revenue under the Agreement on the Performance of Taskstotalled EUR 0.7 million and were significantly lower than in2009, mostly due to a smaller realisation of revenue under theMCRSA-1 that stipulates a different basis for the calculation ofthe compensation. The basis for determining the compensationunder this Act includes tasks related to spatial planning andintegration of motorways in the environment, and the acquisitionof real property for the requirements of motorway construction,while before the MCRSA-1 had entered into force, thecompensation was calculated on the basis of total realisationof works, determined in the AMDRP.ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTExpenses of DARS d.d.47Table 6: Review of expenses of DARS d.d.T ype of expense 2010in EUR2009in EURIndex2010/2009Structural shares for2010Labour costs 32,840,366 32,268,135 102 12%Costs of materials and cost of goods sold 13,152,610 10,581,142 124 5%Costs of services 26,397,177 36,665,335 72 9%Concession fees 0 169,447,153 0 0%Value write-downs 115,493,653 9,502,345 1,215 41%Other operating expenses 17,909,137 902,509 1,984 6%Financial expenses 72,328,103 18,394 393,216 26%Other expenses 206,463 36,048 573 0%TOTAL 278,327,509 259,421,061 107 100%The total expenses of DARS d.d. in 2010 amounted to EUR278.3 million and increased by 7% in comparison with 2009.Due to the adoption of the MCRSA-1, the structure of 2010expenses significantly deviates from the expenses structurein 2009. In 2010, the major part of expenses included valuewrite-downs (41%) and financial expenses (26%), in 2009, thispart mostly included the concession fees (65%).Profit or lossNet profit or loss of DARS d.d. for the period from 1 Januaryto 31 December 2010 amounted to EUR 30.5 million and wasin comparison with net profit or loss in 2009 200 percent higher,which is predominantly the consequence of higher revenuefrom toll collection and modifications in accounting thatemerged after the adoption of the MCRSA-1.ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORTTable 7: Performance ratiosFinancing ratios 31. 12. 2010 31. 12. 2009Equity financing ratio in %equityliabilities42,82 56,1248Long-term financing ratio in %equity + provisions + long-term liabilitiesliabilities96,66 59,87Short-term financing ratio in %short-term liabilities (including short-term accrued expenses anddeferred revenue)3.34 40,13liabilitiesInvestment ratiosFixed assets investment ratio in %fixed assets (at carrying amount)assets97,23 20,73Long-term investment ratio in %fixed assets + long-term investments + long-term operatingreceivables97,23 20,73assetsHorizontal financial structure ratiosQuick ratio in %liquid assets + short-term receivablesshort-term liabilities24,42 74,93Quick ratio in %current assetscurrent liabilities81,96 176,50Efficiency ratiosoperating revenue152,72 104,51Operating efficiency ratio in %operating expencesoperating profit34,52 4,31Operating profit rate in %operating revenueNet profit margin in %net profit-revenue9,62 3,73Profitability ratiosNet return on equitynet profit for the periodrevenue0,03 0,23ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTBusiness Activities of the CompanyTollingSales of vignettesIn 2010, there were 843,068 annual vignettes for two-trackvehicles, 2,218 annual vignettes for single-track vehicles,16,271 half-year vignettes for single-track vehicles, 1,012,332monthly vignettes for two-track vehicles, 3,071,766 weekly vignettesfor two-track vehicles and 31,119 weekly vignettes forsingle-track vehicles sold. The comparison of the quantity ofvignettes sold between 2009 and 2010 is not possible, sincea modification of the vignette system due to the introductionof short-term vignettes was made in 2009. The comparisonof sales revenue shows that the Company’s revenue increasedby 21% in 2010 in comparison with 2009 mostly due tosold vignettes. At the end of 2010, a total of vignettes weresold at 732 sales locations in Slovenia and 646 sales locationsabroad.Experience from the past years have shown that the sales ofvignettes on border crossings and entries to the country arein addition to an external sales network and tolling supervisionalso important. This is especially significant during theincrease in transit traffic increase during the summer. For thispurpose, an additional sales location was opened in Gruškovje,where over 20% of all vignettes were sold, within the scope ofown sales. A total of 496,443 vignettes or every tenth vignettewere sold at own sales locations.In December, the Company began selling Austrian vignettes,namely at the Hrušica toll station, and also plans to expandthe sales of these vignettes in 2011 to other sales locations.The initiation of toll collectionaccording to EURO–emission classesand the establishment of TCOCAs of 1 January 2010, the Company had enabled the drivers ofcargo vehicles differentiated tolling with ABC and DARS cardsaccording to EURO-emission classes. All technical solutionsthat enable differentiated tolling were implemented at theend of 2009, the registration of vehicles and initialisation ofelectronic media was initiated at the beginning of 2010, sincethere had been no legal basis for this before. At the end of2010, total quantity of electronic media, adapted for differentiatedtoll payment grew to 20,000, consisting of approximatelyone half of DARS cards and one half of ABC electronicsystem tags.The operations of technical tolling supervision have also beenadapted to the mentioned situation, mostly because the TCOCstarted operating on 1 January 2010, enabling systematic monitoringof toll payment according to EURO-emission classesand systematic treatment of non-payers. The data on motorwayusers who do not want or cannot pay toll, are sent bycashiers to the TCOC, where units are organised or engagedif necessary, or the non-payer is sanctioned for the violation.The TCOC has become the link between tolling, field toll inspectors,violation authorities and courts.Repayment of tollThe increasing lack of payment discipline was shown mostly incontractual repayment of toll as well as increased pressure onconcluding such contracts, where users want to avoid in-advanceor simultaneous payment of tolls. In order to reduce therisk of non-payments, numerous measures have been adopted(no consideration of discounts at defaulted payments, advancingthe listing of media on the stop list etc.).Upgrading the functionality oftolling equipmentAlong with maintaining the tolling equipment, the Companyalso introduced some upgrades. The closed tolling system onthe Primorska motorway was added a barcode with the labelof the entering toll station, decreasing the possibility of errorsmade by toll cashiers. The sale of vignettes at the Company’sown sales sites was upgraded, so that now sales and inventoriescan be monitored by barcodes.Future development of tollingsupervisionEfficient tolling supervision continued in 2010. Toll inspectorsissued 51,641 payment orders, meaning that almost 1000 violatorswere found per week on average. The Ministry of theInterior granted the Company permission for an insight in theRegister of Motor Vehicles and Central Population Register,thus increasing the quality of work of DARS d.d. as a violationauthority.The Ministry of Finance and the Ministry of Justice providedthe Company with the bases for determining court fees fordecisions on dismissing claims for judicial protection, thesefees therefore became the revenue of DARS d.d. Based on thepermission provided by the Ministry of Public Administration,the Company arranged electronic connection for publicationson the e-portal or electronic notice board for DARS d.d. violationauthority.49ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORT50The Company filed an amendment to the Act on Rules in RoadTransport at the Ministry of Transport, which will enable a legalbasis for the tolling supervision unit for using blue light ontolling supervision vehicles along with a light board.The Company has also developed and designed tolling supervisionsign and registered it as a trademark at the SlovenianIntellectual Property Office.In order to enable safer work conditions, yellow green protectionclothing as well as yellow ground flashing lights andlarger folding signs were distributed to tolling supervisionofficers. The Company equipped tolling supervision vehicleswith traffic signalisation, namely notification boards “in” and“on” vehicles, which enable elimination of vehicles and stoppingviolators during driving on motorways. All vehicles havebeen equipped with the sign “Tolling Supervision” (“Cestninskinadzor”).Safety of employeesThe doors on 21 tolling booths were relocated to ensure improvedsafety of employees. This measure prevents cashiersto step directly on the toll lane. The pneumatic tube systemsat Dob, Torovo, Tepanje and Vransko toll stations were constructedto decrease the number of necessary crossings overvignette toll lanes.Based on project documentation, two overhead crossingswere constructed over the toll lanes and along the jutting roofat Kompolje and Dob toll stations.Before the peak tourist season had even started, the Companyregulated and improved the exterior image of toll stations andrenewed as well as purchased new work uniforms for all tollstations employees, namely in accordance with DARS d.d. visualidentity.Introduction of ETS and FTFOn 26 November 2009 the Government adopted the ActionPlan for the Introduction of an ETS in free-flow traffic. Theobjectives of the Plan are to replace the existing tolling systemfor vehicles that weight more than 3.5 t and stop at tollstations with ETS in FTF; to replace the existing vignette tollingsystem for vehicles, whose weight does not exceed 3.5t with ETS and FTF; to guarantee financial sustainability ofDARS d.d. that will enable independent repayment of financialobligations that originate from the construction of motorwayand expressway network in accordance with the NMCP, and tomaintain the existing infrastructure and ensure toll paymentaccording to “user pays” and “polluter pays” principles.In November 2010, we signed the contract for the preparationand design of the documentation and provision of otherexpert services within the scope of the project of introducingETS in FTF, and, together with the contractor, we formed anexpert group which will coordinate all activities, connectedwith the preparation of the mentioned documentation.ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTMotorway maintenance and managementMotorway maintenanceDue to the growth in personal and transit cargo traffic, thework of maintenance personnel is becoming an increasinglygreater obstacle to road users. It is practically impossible tocarry out maintenance works without congestions, particularlyon the A1 motorway, where traffic is intense almost allday long. In addition, the majority of maintenance works cannotbe carried out at night because of traffic participants andsafety hazards for workers. Increased traffic is also a reasonfor more extensive maintenance and reconstruction works. In2010, these works were intensified due to the long and coldwinter, whose consequences are visible on roads. Extensiveroad patching works were required, and more than 125,000metres of asphalt cracks were repaired.These barriers were set up in periods of reduced traffic, i.e. atnight, mostly from Saturday evening to Sunday morning.During the tourist season and holidays, maintenance personnelassisted in the regulation of traffic at temporary vignettesales locations, which were set up at entry points into thecountry. Closures of vignette lanes were also carried out forthe purpose of controlling vignette usage. Motorway closureswere regulated by redirecting traffic to rest areas through thecoordinated efforts of police officers and inspectors.Several projects were initiated in the area of work organisation.Besides the action plans of summer and winter maintenancea lot of attention was dedicated to rational consumptionof gritting materials. By introducing GPS monitoring of cargogritting vehicles and by providing instructions and trainingdrivers on gritting methods, the Company saved at least 10%of all gritting materials. This project enables the Company tomonitor vehicles and to note at every road section, what thewidth of gritting by the vehicles was and what the consumptionof gritting materials per square metre was. Following theinitial analyses, the drivers were given lists of gritting orders,on the basis of which they adjusted the material quantities.The Company also introduced a calibration of gritting vehiclesat every change of gritting material.Motorway managementThe Company’s tasks relating to motorway operation were basedon Public Roads Act and other regulations related to thearea of public roads and traffic safety.Within the scope of determined tasks, the Company preparedthe opinions on the execution of freight transports ofexceptional dimensions or weight, and consents were issuedfor motorway and expressway closures, required during theperformance of reconstruction works and other regular maintenanceworks.There were also an increasing number of requests receivedfor interventions in the motorway buffer zone in 2010, managedby DARS d.d., which has resulted in a growing numberof issued project requirements and approvals of project documents.The trend of prohibited advertisements on billboardserected in motorway and expressway buffer zones continues,therefore the Company will also focus on warning the ownersabout these prohibited actions.Together with the Administration of the Republic of Sloveniafor Civil Protection and Disaster Relief, the Company inspectedand adjusted the accesses to the scenes of accidents forintervention vehicles. The Company has also built several interventioncrossings (14 until now). We also concluded withthe preparation of safety and rescue plans in case of largescalemotorway accidents.Traffic surveillance and managementIn 2010 the Company finished the introduction of TSMS on theNanos-Vrtojba section and in front of the Karavanke tunnel.The Company also concluded the finishing works on the newLjubljana Regional Control Centre project.The DBP projects for Koper-Izola TSMS and the conceptualdesigns for Maribor-Pince TSMS (Prekmurje) were prepared.ED projects for the relocation of the communications hubfrom Slovenske Konjice to the new Maribor Regional ControlCentre were also completed. The projects were sent to theproject designer for supplementation.Maintenance works on TSMS systems and all necessary upgradeswere performed. The Company also performed the pilotproject called Wrong Way Driving Detection on the Vranskolink road. A computer simulator for training operators in regionalcontrol centres was created. Warning signs with speed readingfor the purposes of improving traffic safety during workclosures were also purchased.51ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORT52International projects andprogrammesThe activities within the EASYWAY programme continued.This programme enabled the Company to obtain grants fromthe European Union, and it also cooperated in a working groupthat focuses on traffic contents of portals. Cooperation wasalso initiated within the ASECAP association and in the fieldof current activities of traffic management with neighbouringcountries.Stable fire extinguishing systemsIn 2010 and within the scope of fire protection of facilities,where essential software and hardware for the support toCompany's operations and system operations in tunnels areinstalled, these facilities were equipped with an automatedfire extinguishing system. The supervision over fire extinguishingsystems is continuous, 24 hours per day, all year round.The supervision is carried out by the Dragomelj, Kozina, Vransko,Hrušica and Slovenske Konjice control centres.The automated fire extinguishing system enables immediatefire extinguishment in case of a fire in the facility, regardlessof the fact, whether the personnel is present or not. Investmentgoals: to ensure continuing operations of electrical andmechanical devices in technological premises, to ensure maximumfire safety in facilities with electrical and mechanicalequipment, to enable continuous operations of key and supportsystems and minimise costs of after-fire reconstruction.Areas for auxiliary activitiesBy finishing the construction of Slovenian motorways andexpressways, the Company is finally designing the network ofmotorway rest stops. There are currently 58 rest stops, comprisingso called small rest stops, petrol stations and servicecentres, where restaurants are built next to the petrol stations.Based on opinions of local motorway users, acquired by usersatisfaction surveys carried out among Slovenian motorwayusers, the number of rest places and their distribution is mostlygood and that their offer is of sufficient quality.In 2010, the Lormanje south rest stop commenced operations,while the leaseholder initiated the construction of the Radovljicaeast and Radovljica west rest stops, which will be concludedin the first half of 2011. Other areas for auxiliary activitiesare also under construction, namely the Vipava north and Vipavasouth rest stops, and the Maribor east, Maribor west andCikava service centres.Real property managementApproximately 50 land plots were included in the process ofexamining the possibilities of sales of excessive land in 2010,at the same time, individual cases that had been included inthis process in the past years but were not categorised asexcessive land, were being considered, too. Not all proceduresfor individual plots of land, which was under consideration,had been completed (final geodetic assessment and final legaland property regulation), which present the condition for categorisingreal property as excess property.Approximately 70 applications for easement on interventionson state-owned land in the motorway area were discussed andresolved.Telecommunications marketingIn 2010, DARS d.d. signed a contract with the Ministry of Defenceon the implementation of expert works for the requirementsof constructing the first phase of the optic network.Optic fibres, which will be integrated in reserved telecommunicationspipes, will be transferred under the ownership of theRepublic of Slovenia and managed by the Ministry of Defence.The upgraded optic fibre network will be maintained by DARSd.d. upon appropriate payment of a maintenance fee.ANNUAL REPORT 2010 DARS d.d.

Centri za nadzor in upravljanje prometa ter ACB BazeFigure 3: Traffic surveillance and management centres and MMCMADŽARSKA /HUNGARYITALIJA/ITALIABovecVrtojbaJADRANSKOMORJENova GoricaKoperTolminKranjska GoraFernetičiFernettiŠkofijeVipavaSežanaJeseniceAjdovščinaRebrnicepredor / tunnelKaravankeIdrijaDivačaACB HRUŠICARadovljicaPostojnaNanosAVSTRIJA/AUSTRIAVrbaPodtaborLjubeljVrhnikaPivkaTržičPeračicaKranjŠkofja LokaŠentvidKosezeACB LJUBLJANAIzpostava LOGATECIzpostava VIPAVAACB KOZINAIzpostava PODTABORACB POSTOJNAIlirska BistricaVodiceDomžaleKamnikLJUBLJANAACB VRANSKOTrbovljeNC DRAGOMELJGrosupljeRibnicaTrojaneLitijaIvančna GoricaIzpostava DOBKočevjeDravogradSlovenj GradecSlovenska BistricaACB SL. KONJICEVelenjeŽalecCeljeLaškoTrebnjeŠkocjanPluskaPonikveKronovoHrastjeLešnicaACB NOVO MESTOČrnomeljMetlikaACB MARIBORMariborDramljeKrškoBrežiceŠentiljSlivnicaPesnicaObrežjeLenartSp. SenarskaZrkovska c.Ptujska c.HajdinaPtujGruškovjeIzpostava DRNOVOLEGENDAlokacijaObstoječa regionalni nadzorni centriVRANSKOKOZINACogetinciLJUBLJANAObstoječa podporna nadzorna centraHRUŠICAVučja vasGorišnicaIzpostava Markovci PTUJSLOVENSKE KONJICEACB MURSKA SOBOTABeltinciOrmožPredvideni regionalni nadzorni centerLendavaHRVAŠKA/CROATIADolga vasPinceobmočje nadzoraDragonjaJelšanePetrinaMARIBORACBAvtocestna vzdrževalna baza

Izvedena večja obnovitvena dela v letu 2010Figure 4: Reconstructed Motorway Sections in the year 2010Motorway Sections in the year 2010MADŽARSKA /A1 Sl. Konjice - Dramlje (warranty (garancijska period) doba)ITALIJA/ITALYBovecVRTOJBAJADRANSKOMORJEJagodjeLucijaNOVA GORICAIzolaTolminFERNETIČIFERNETTIH6DRAGONJAKranjska GoraH4H5ŠkofijeSEŽANAKOPERJESENICEAJDOVŠČINAA3VipavaIdrijaDivačaA1predor / tunnelKaravankeA2RadovljicaRebrniceNanosA1VrbaLogatecA2 Podtabor - Kranj zahod westA2 Brnik - VodiceLjubeljKRANJA2VrhnikaŠkofja LokaPOSTOJNAPivkaTržičIlirska BistricaJELŠANEPeračicaPodtaborA1ŠentvidKosezeA1VodiceDomžaleAVSTRIJA/AUSTRIAKamnikA1H3LJUBLJANAGrosupljeRibnicaTrojaneLitijaTrebnjeIvančna GoricaPluskaPonikveKočevjePetrinaDravogradSlovenj GradecTrbovljeA1 Dramlje - CeljeA1HrastjeVelenjeŽalecA2CELJELaškoNOVO MESTOČrnomeljŠkocjanLešnicaKronovoMetlikaMARIBORH2Slovenska BistricaDramljeKrškoA2PesnicaSlivnicaA1BrežiceŠentiljA1ObrežjeLenartZrkovska c.Ptujska c.A4GI-2A2 Višnja gora - Bič *A1 Šentilj - Pesnica *A5PTUJHajdina MarkovciMMPGruškovjeGI-2A5GorišnicaOrmožMURSKA SOBOTABeltinciA5LendavaHRVAŠKA/CROATIAPriključek Junction na to A1 LJ-RudnikA1 South Južna Ljubljanska Ljubljana Bypass obvoznicaLEGENDA/LEGENDDolga vasH7HUNGARYPincepriključek Junction na to A1: MB east vzhodA1 MB Ptujska c. - Slivnica *zgrajene avtoceste, hitre ceste in druge javne cesteconstructed motorways, expressways and other public roadsnezgrajeni avtocestni odsekiunfinished motorway sectionsobnovljeni avtocestni odseki v letu 2010 2009reconstructed motorway sections in the year 2010 2009priključek Junction na to A1: VrhnikaA1 Divača - KozinaA1 Vrhnika - Logatec

BUSINESS REPORTConstruction and reconstruction organisationSpatial planningIn 2010, the preparation procedures for 16 national spatialplans, which had undergone the initial process stages, were implementedin the field of spatial planning and integration in theenvironment:• materials for acquiring the guidelines for theimplementation of the national spatial plan for the Železnimost rest place intended for cargo vehicles on Kozina-Klanec motorway section were prepared;• drafts of national spatial plans for three sections on thenorth part of the third developmental axis, namely thenational road between the Šentrupert road link and Velenjesouth road link, between Velenje south road link and SlovenjGradec south road link, and between Slovenj Gradec south-Dravograd with bypasses, were prepared;• public presentation with public discussion of the draft of thenational spatial plan for the additional construction of theŠmarje Sap road link was implemented;• opinions regarding the comments on public presentationof the draft of the national spatial plan for the additionalconstruction of the Šmarje-Sap road link were adopted,and the public also discussed the draft of the nationalspatial plan for the motorway on the Draženci-GruškovjeInternational Border Crossing section;• two proposals of two national spatial plans were prepared,namely for the additional construction of the Šmarje-Sapmotorway road link and for the motorway on the Draženci-Gruškovje International Border Crossing section;• the proposals of three national spatial plans were preparedand harmonised, namely for the Jeprca-Stanežiče-Brodconnecting road, for the Draženci-Gruškovje InternationalBorder Crossing motorway section, and for the Brezovicamotorway road link on Ljubljana-Vrhnika motorway section;• the Slovenian Government adopted the Decree on thenational spatial plan for the motorway on Draženci-Gruškovje International Border Crossing section and theDecree on national spatial plan for the Brezovica motorwayroad link on Ljubljana-Vrhnika motorway section;• the study on guaranteeing parking areas for cargo vehiclesalong Slovenian motorways and expressways was submittedfor assessment.In the processes of integrating motorways and expressways inthe environment, the Company cooperated with the public andusers within the scope of our jurisdiction and strove to find sociallyacceptable solutions.Project engineering and investmentdocumentationIn 2010, the main emphasis in the area of preparing project documentationwas put on documentation for the performanceof works, required for the acquisition of operating permits forroads that were given over to traffic in 2009 and 2010, andon the preparation of documentation for reconstructions andrenovations of existing road sections. In the area of new constructions,the public procurement procedure for the preparationof DBP was initiated for:• the construction of the expressway section betweenJagodje and Lucija (the procedure had not been concludedby the end of 2010), and• the construction of the Drnovo bypass road – phase II(public procurement procedure was terminated).A large number of projects, studies and elaborates – a total of42 – which were procured in 2010 or earlier, were concludedand submitted for assessment. The most important projectswere:• installation of traffic lights and video surveillance deviceson the Tomačevo roundabout, thus introducing a newmanner of traffic regulation in roundabouts. This is thefirst roundabout with traffic lights in Slovenia. Severalcompanies, qualified and specialised for designingroundabouts, traffic lights and video surveillance systems,cooperated at the realisation of this project;• concept for the verification of possibilities for improvingthe transverse profile of A1 motorway on the sectionbetween Brezovica and Vrhnika, within the scope of whichthe possibility of using hard shoulders for improved flowof traffic during traffic congestion was examined for thefirst time. The results of the examination were used in theprovisions of the new Public Roads Act and Act of Rules inRoad Transport, enabling the implementation of this project;• CFD (Computational Fluid Dynamics) analyses of air flowand the study of wind impact on the dynamics of vehiclemovement and traffic restriction, related to high windspeeds, presenting the basis for the implementation of thewind protection project in the expressway area in the VipavaValley;• noise protection projects along the A4 motorway (Slivnica-Draženci) and A5 motorway (from Maribor to the Hungarianborder).Twenty-eight documents were discussed and confirmed withinthe investment documentation assessment and confirmationprocess, namely:55ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORT56• three documents on the identification of the investmentproject,• two pre-investment concepts,• 21 investment programmes, and• two investment programmes novels.It is necessary to emphasise the documents on the identificationof investment project of upgrading the electromechanicalequipment for the Ločica and Jasovnik tunnels, the constructionof TSMS on the H6 Koper-Lucija expressway, and investmentprogrammes for the upgrade of electromechanical equipmentfor the Golovec tunnel and the Strmec tunnel road gallery,the construction of Jagodje-Lucija expressway with Piranconnecting road, and the reconstruction of several motorwayand expressway sections.Construction supervision andorganisationIn 2010, DARS d.d. organised the management of projects forthe construction of motorway sections, connecting roads, andother roads within the scope of the motorway programme and,in line with the adopted AMDRP for 2010, brought the followingmotorway sections into service:• Pluska-Ponikve two-by-two lane motorway in the length of7.6 km,• Ponikve-Hrastje two-by-two lane motorway in the length of7.2 km,• Naklo motorway road link in the length of 0.5 km,• motorway road link at the Podtabor turnover in the lengthof 0.6 km,• bypass roads past Dragonja village in the length of 0.7 km,• reconstructed Tomačevo roundabout.Construction works continued on the following sections:• connecting road to the Port of Koper (Ankaran radial road)in the length of 1.5 km,• Koper-Izola expressway in the length of 3.1 km,• one half of the Peračica-Podtabor two-by-two lanemotorway: reconstruction of the right half in the length of2.4 km.In 2010, the Company initiated the construction works of:• Markovec tunnel in the length of 2.1 km,• Gorišnica-Ormož main road in the length of 10.4 km,• Želodnik-Mengeš main road with the Mengeš bypass.Reconstruction works organisationConstruction worksInvestment reconstruction works on motorways and expresswayswere conducted in line with the adopted AMDRP for2010, which was prepared on the basis of seasonal inspections,an assessment of the condition of carriageways using theModified Swiss Index (MSI) method, monitoring of the stateof infrastructure and engineer’s judgment of the necessity ofreconstruction and of the prepared design documents. Theselected sections were additionally approved using an expertsystem for carriageway management (dTIMS_CT), which is appliedfor the optimal planning of carriageway reconstruction.The reconstruction works comprised the following:Reconstruction of carriageways, comprising road structurereinforcements, replacements of guardrails with railings offeringa higher level of protection, application of thick-layer lanemarkings, etc. Reconstruction works were performed on thefollowing areas:• Hrušica motorway maintenance centre (parts of sections:Austrian border (tunnel)-Hrušica, Podtabor-Kranj, Brnik-Vodice),• Ljubljana MMC (parts of sections: Harfa-Litijska-Malence,Dolenjska-Barjanska-Vič, road link Vič west, Vodice-LjubljanaŠmartno),• Postojna MMC (parts of sections: Vrhnika-Logatec, Vrhnikaroad link (construction of the lane), Unec-Postojna, Razdrto-Senožeče, Šempeter-Vrtojba),• Slovenske Konjice MMC (parts of sections: SlovenskeKonjice-Dramlje, Dramlje-Celje),• Maribor MMC (parts of sections: Šentilj-Pesnica, Mariboreastroad link (Ptujska cesta), and• Kozina MMC (Divača-Kozina).Reconstruction of structures, comprising the replacement ofdilatations, hydro-insulation and asphalts, restoration of columns,etc., were implemented on the following areas:• Hrušica motorway maintenance centre (Karavanke tunnel),• Postojna motorway maintenance centre (Dolinska potunderpass, bridge across the Ljubljanica at the Vrhnikalink road, Pivka bridge, Logatec supporting wall, Studenecoverpass, Karentan bridge),• Slovenske Konjice motorway maintenance centre (Hudinjabridge, Slovenska Bistrica underpass, Slovenske Konjiceoverpass, Tepanje overpass, Čeplje underpass, Škedenjviaduct, Grapa bridge),• Vransko motorway maintenance centre (Čeplje underpass,Širjavka bridge, Trebnik bridge), and• Ljubljana motorway maintenance centre (Verd viaduct,ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTMali graben bridge, Dolgi most bridge, Brezovica overpass,Gradaščica bridge, Šentvid covered insection).The Company also concluded the reconstruction of connectingramps at the old Šentvid tunnel road gallery and the reconstructionof concrete toll lanes at the Kozina and Vransko tollstations.Investment reconstructions of other buildings and structurescomprised the replacement of worn guardrails, rehabilitationof landslides and slopes, construction of the salt warehouse atSlovenske Konjice MMC, reconstruction of drainage systems,construction of shoulder niches in portals, regulation of Lopatasouth rest area, regulation of banquettes and intervention passagesin front of tunnels, closing of service passages, markingof objects according to the Road Databank and rehabilitationworks on maintenance facilities.Rehabilitation works and investments in environmental protectionincluded the elaboration of studies on noise loads, preparationof expert documents for the regulation of controlleddrainage, preparation of project documentation and expert documentsfor noise protection.Electromechanical worksThe renovation of existing motorway network equipment, increasedtraffic safety and equipping motorways in accordancewith new regulations (directives) and legislation in 2010 requiredthe implementation of the following reconstruction and investmentworks within the scope of the adopted AMDRP 2010-ELECTROMECHANICAL WORKS.The following works were implemented within the scope ofelectromechanical equipment renovation:• co-financing of the change of fire algorithm software for theKaravanke tunnel,• finishing the upgrade of electromechanical safetyequipment in the Moste tunnel road gallery,• realisation of the remote connection of the steering systemin the Čatež covered insection at the Dragomelj RegionalSurveillance Centre,• rehabilitation of the electromechanical safety equipmentin one of theTrojane tunnels after a fire broke out on 20January 2010,• replacement of traffic signs with modifiable contents on themotorway cross and expressways around Ljubljana,• the upgrade of the safety equipment of the server andelectrical premises with an automated fire extinguishingsystem was initiated and partly realised,• the replacement of battery blocks in the continuouscharging system devices completed,• a number of minor reconstruction works onelectromechanical equipment were also completed.The following works were implemented within the scope of investmentsin electromechanical equipment:• the regulation of the public lighting system on theZadobrova turnover,• the construction of traffic and weather monitoring stationsin Divača and Dane,• the implementation of the upgrade and connection of thelighting system in the area of the Obrežje border crossing,• reserve charging of the Divača toll station with theinstallation of a stable DEA (diesel electricity aggregate) wasimplemented,• a number of minor investment works on electromechanicalequipment were also completed.The following works were implemented within the scope of telecommunicationssystems and transmission paths reconstruction:• the rehabilitation works on the cable sewage system andrenovation of the Hrušica motorway maintenance centrewere completed,• the renovation of emergency call system on the Vrba-Hrušica motorway section was completed,• the regulation of the cable sewage system, charging,guardrails and pillars at 20 locations of traffic weathermonitoring stations along the motorway was implemented,• several number of minor rehabilitation works ontelecommunications systems and transmission paths werecompleted.The following works were implemented within the scope of preparatoryworks for electromechanical works:• the project documentation for the relocation of thecommunications hub from Slovenske Konjice MMC toMaribor MMC was prepared,• the works in connection to the preparation of a databaseon underground communal lines of economic infrastructureand its entry in official registers continued,• colour aerial photographing and the preparation of digitalortho-image plans in a 1: 1000 scale were performed,• preparation of the remaining project, investment, safety andother documentation.57ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORTInvestments in Motorway Development andReconstruction58In 2010, the realisation of construction and reconstructionworks on motorway sections amounted to EUR 195.4 millionand was 47.1% lower than in 2009.The table below presents the realisation of the value of constructionand reconstruction works on motorways in 2010.Table 8: Realised value of construction and reconstruction works on motorways in 2010 (in EUR)MOTORWAY DEVELOPMENT Acquisition of land * Spatial planning *ELABORATION OF DESIGN AND OTHER DOCUMENTS, ACQUISITION OF LAND AND OTHER REALPROPERTY22,334.48 5,402,120.67KLANEC - ANKARAN: Connection to Port of Koper, Phase I 4.480,79 0,00KLANEC - ANKARAN: Connection to Port of Koper, Phase II 3.581,00 0,00KOPER - IZOLA 170.140,58 0,00PERAČICA - PODTABOR 217,00 0,00ŠENTVID - KOSEZE: Šentvid - Koseze 1.865.029,69 0,00ŠMARJE SAP - VIŠNJA GORA: Cikava petrol pump platform 1.669,05 0,00BIČ - HRASTJE: Pluska - Ponikve 277.148,25 0,00BIČ - HRASTJE: Ponikve - Hrastje 159.369,24 0,00HAJDINA - ORMOŽ: Gorišnica - Ormož 42,00 0,00TOTAL MOTORWAY AND EXPRESSWAY CONSTRUCTION 2.481.677,60 0,00TOTAL FINISHING WORKS ON MW CONSTRUCTED BEFORE 2009 3.373.766,21 0,00National Traffic Surveillance and Management Centre with Dragomelj toll collection centre 0,00 0,00State roads rehabilitation 0,00 0,00State roads rehabilitation: Ljubljana Municipality - DARS Agreement 0,00 0,00Activities within the scope of international projects and EU programmes 0,00 0,00Šmarje - Dragonja: Construction of bypass road past village of Dragonja in the area of Dragonjainternational border crossing117.093,73 0,00Implementation of additional anti-noise measures in European traffic corridors V and X 0,00 0,00Construction of additional parking places for heavy goods vehicles in European traffic corridor V 0,00 109.955,45Tomačevo roundabout 0,00 0,00Naklo - Kranj: Naklo link road 0,00 0,00OTHER ITEMS 0,00 0,00NEW TOLLING SYSTEM (rearrangement of toll collection stations due to introduction of vignettes) 0,00 0,00TRAFFIC SURVEILLANCE AND MANAGEMENT SYSTEM (ITS) 0,00 0,00DEVELOPMENT OF CONNECTING ROADS WITHIN THE SCOPE OF THE MOTORWAYS PROGRAMME* 3.096.297,59 0,00MOTORWAY RECONSTRUCTION (construction works) 0,00 0,00MOTORWAY RECONSTRUCTION (electromechanical works) 0,00 0,00TOTAL MOTORWAY DEVELOPMENT AND RECONSTRUCTION 9.091.169,61 5.512.076,12*provided data includes VAT, because DARS d.d. is not at liberty to deduct input VAT from the above works.ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORT59Realisation without theacquisition of land, spatialplanning, financing costs,engineering costsFinancing costs Engineering costs Total realisation195.778,95 251.138,45 123.246,58 123.246,581.136.604,34 0,00 99.924,47 1.241.009,6041.290,81 0,00 35.605,50 80.477,3118.525.348,66 1.572.188,87 1.313.515,82 21.581.193,9311.253.184,14 0,00 73.615,94 11.327.017,082.918.189,13 0,00 311.073,18 5.094.292,000,00 0,00 4.677,17 6.346,2221.231.954,20 815.789,26 724.697,04 23.049.588,7521.882.598,71 758.586,87 834.332,03 23.634.886,85433.136,25 106.685,81 77.350,26 617.214,3277.422.306,24 3.253.250,81 3.474.791,41 86.632.026,0636.551.030,25 11.422,75 4.370.056,81 44.306.276,02123.909,29 0,00 3.593,06 127.502,35513.670,52 0,00 0,00 513.670,525.000.000,00 0,00 0,00 5.000.000,00465.630,44 0,00 9.056,23 474.686,67650.118,66 0,00 0,00 767.212,39181.923,53 0,00 3.885,88 185.809,411.105.749,17 63.319,16 0,00 1.279.023,782.841.405,90 0,00 155.532,00 2.996.937,903.123.174,71 0,00 98.517,84 3.221.692,55120.396,65 17.342,89 694,37 138.433,91104.633,72 0,00 0,00 104.633,721.549.326,26 351.408,71 25.850,71 1.926.585,681.791.406,58 71.343,80 107.576,29 5.066.624,2630.135.726,06 0,00 335.411,11 30.471.137,176.216.157,83 0,00 0,00 6.216.157,83168.092.344,76 4.019.226,57 8.708.212,29 195.423.029,35ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORTResearch and Development Activities60Development-research tasks and studies present a quality basisfor the preparation of various guidelines for project engineering,for the preparation of supplements to general and specialtechnical conditions as specified in the tender documentationof DARS d.d., and for the preparation of technical regulationsthat have a direct impact on the area of Company's operations.On the basis of such projects and studies, higher quality andrational project solutions gained recognition and new materialsand technological procedures were introduced in practice,which significantly contributed to the quality of executed worksand to the increased sustainability and safety of constructedmotorways and the facilities on them.In 2010 the Company completed 17 (project) tasks relating tothe following focus areas:• contemporary materials and technologies for motorwayconstruction,• improvement of traffic safety,• regulation and protection of areas surrounding roads,• assurance and confirmation of the quality of buildingmaterials and building products used in road construction,• systems for the management of motorways andaccompanying facilities, and optimisation of measures inmotorway reconstruction,• geology, geomechanics and geotechnics,• economics of investments.At the end of 2010, the Company initiated the procedures forthe entry in the register of providers of research and developmentactivities at the Slovenian Research Agency in accordancewith the Research and Development Act (Official Gazetteof the Republic of Slovenia, No. 112/2007) and the provisions ofthe Rules on the content and method of managing the registerof research development activities providers (Official Gazetteof the Republic of Slovenia, No. 122/2006). The Company establishedits own research group that will operate within the scopeof the area for new constructions and reconstructions, andadopted the general legal act on the procedure, conditions andcriteria for the election and awarding of researcher title, whichwill apply for employees and for external group cooperatives.Anticipated DevelopmentThe MCRSA-1 adopted by the National Assembly of the Republicof Slovenia at the session held on 23 November 2010, enteredinto force in December 2010.This new Act presents the basis for status and organisationalchanges of DARS d.d., which the Government of the Republic ofSlovenia has planned in its exit strategy for 2010-2013, adoptedin February 2010. The basic objective of the mentioned changesis to decrease the potential load of servicing debts for theimplementation of the NMCP for public finance or the transferof potential public debt to the private sector.The Act introduced two important novelties:• DARS d.d. also became the concessionaire for theconstruction and reconstruction of motorways andexpressways, therefore, it entirely took over the financing ofthe construction and reconstruction of toll roads.• DARS d.d. was awarded the right of superficies for a periodof 50 years on land, where motorways and expressways run.Therefore, the Company became the owner of motorwaysand expressways, while the State continues to remain theowner of land on which motorways and expressways run.Based on this Act, the Republic of Slovenia and DARS d.d. willhave to conclude two new contracts in 2011.The new Concession Agreement will have to re-determine theexisting concession relationship that regulates the maintenanceand management of motorways, and regulate new mutualrights and obligations.The new Agreement on the Performance of Contracts will bemore condensed in content, since it will regulate only the performanceof tasks, connected to spatial planning and integrationof motorways in the environment, and tasks in connectionto acquiring real property for the requirements of motorwayconstruction. DARS d.d. will continue to perform the mentionedtasks on the behalf and for the account of RS, the means forthe tasks will be provided from the national budget.ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTQuality Management SystemThe success of the quality management system in DARSd.d., established according to the requirements of the ISO9001:2008 standard, was confirmed by the regular assessmentof the Slovenian Institute of Quality and Metrology (SIQ). Theregular assessment that was conducted according to individualprocesses, did not establish any non-compliances.The success and efficiency of the quality management systemoperation was verified by a group of 33 internal auditors thatworked within 16 auditing groups. Based on their findings, persons,responsible for individual processes, prepared measuresfor eliminating the reasons for the occurrence of possible deficiencies.Appropriate competences of internal auditors are ensuredthrough internal calibrations that focus on the requirements ofthe ISO 19011 standard, good auditing practices and harmonisationof establishments of preliminary assessments. The Companyalso trained 16 new internal auditors on an internal basis.The success and efficiency of recognised processes are monitoredusing performance ratios and measurable objectives thatcomprise the following areas:• financial aspect,• satisfaction of consumers or motorway and expresswayusers,• satisfaction of employees, and• success of individual processes.61ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORT62SocialANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORT63SocialresponsibilityANNUAL REPORT 2010 DARS d.d

BUSINESS REPORTTraffic Safety64Traffic safety on Slovenian roads in2010In accordance with guidelines of the European Union and theResolution on the National Programme on Road Traffic Safetyfor the Period 2007-2011 Slovenia managed to achieve its setlong-time objective in 2010, mainly to decrease the number oftraffic accidents resulting in fatalities by 50% in comparison todata from 2001. This success is that much greater seeing thatuntil 2007 the number of fatalities in comparison to 2001 when278 traffic participants died on Slovenian roads had not decreasedbut rather had increased to 293. Following 2007 the numberof traffic fatalities began to rapidly decline, dropping to 138in 2010.The reasons for the decline can be found in the interwoven operationof numerous factors which had an effect on improvingtraffic safety. Two key activities in connection to motorways andexpressways are of key importance for DARS d.d.: the acceleratedconstruction and commissioning of numerous motorwaysegments with the construction and commissioning of the motorwaylegs in Prekmurje and Dolenjska contributing the mostto the decline in fatal accidents. The introduction of the vignettetoll system for vehicles with a maximum load of 3.5 tons alsohad a large indirect effect on improved traffic safety. The resultof such this toll collection method was the redirection of a greatmajority of traffic, particularly personal automobiles, from regionalroads to motorways and expressways.These additional positive influences on road traffic safety shouldalso be mentioned:• continued construction and arrangement of roundabouts toensure significantly calmer traffic at crossroad areas,• inclusion of municipalities into speed controls in settlementsas enabled by the valid Road Traffic Safety Act,• investments into the reconstruction and renovation ofexisting roads which also include measures for calmingtraffic, construction of pedestrian and cycling surfaces andarrangement of crossroads and exit and entry roads,• measures related to the installation of additional roadequipment, particularly safety fences and elements for theprotection of motorcyclists.Traffic Safety on Motorways andExpresswaysBased on statistical data on traffic accidents and their effectsin 2010 it is evident that the level of traffic safety on these roadsfollowing a minor increase in the motorway and expresswaynetwork did not significantly change (the A2 past Trebnje motorwaysegment was opened while for expressways, a portionof the main road between Koper and Žusterna was re-categorised).The number of traffic accidents and serious injuries increasedwhile the number of minor injuries and fatalities decreased.Data from 2009 and 2010 are presented in the table below.Table 9: Traffic safety statistics in 2009 and 2010Effects of traffic accidents on motorways and expresswaysyear20092010Road category No injuries Minor bodily injury Major bodily injury FatalitiesAC 2169 726 59 20HC * 629 122 7 2AC 3480 674 60 18HC * 481 142 13 1*The data do not include the H1 expressway which was managed by the Slovenian Roads Agency.ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTDARS d.d. as the operator and manager of the motorways andexpressways will in accordance with European Union guidelinescontribute to decreasing the number of traffic fatalities inSlovenia in the next decade (a further 50 percent decrease inthe number of fatalities is envisaged). Key preparations werealready carried out in 2010. The activities were predominantlyfocused on the following areas:• the active participation of DARS d.d. in the preparation ofnew laws regarding roads and traffic that were adopted inDecember 2010,• participation in the preparation of implementing regulationwhich will enable effective implementation of legalprovisions and measures for protecting dangerous roadpoints,• preparation of expert bases and trial introduction of themeasures prescribed by Directive 2008/96/EC of theEuropean Parliament and of the Council of 19 November2008 on road infrastructure safety management,• all motorway and expressway segments were examinedand deficiencies and measures recorded whose realisationwill have a positive effect on improving traffic safety(traffic signalisation, safety fences, minor constructioninterventions),• analysis of data and preparation of proposed measures forsegments possessing higher accident rates,• continuation of the European Road Assessment Programme(EuroRAP) which based on international experience enablesthe identification of dangerous traffic segments, inspectionof the first segments have already been carried out withinthe scope of the Programme (with the inspection concludedin 2011),• introduction and installation of additional equipment forthe detection of traffic violations which could lead to moreserious traffic accidents,• realisation of activities initiated in 2009 for thestandardisation of traffic signalisations in entry/exit and restareas whose main purpose is to prevent improper transporton motorways and expressways.Traffic Safety in TunnelsBoth preventative and concrete measures following emergencieswere implemented in 2010 while assessing tunnel safety.Supplements for all protection and rescue plans in the event ofaccidents in tunnels were created based on the draft of the newoperating Plan for Protection and Rescue for Accidents in Tunnelsexceeding 500 m in length (plan for the Cenkovo Tunnel,Version 2.0). In accordance with the plans training/drills werecarried out for employees by individual toll points participatingin emergency measures for individual tunnels. Training/drillswere also carried out in which employees of external emergencyservices (112 and 113 system) also participated as well as socalledstaff training exercises for all tunnels longer than 500 m.Guidelines for the upgrade of security systems as well as improvementof unsuitable organisational solutions will be presentedbased on the results of the exercises.In addition to the protection and rescue plans, risk analysesin accordance with Decree number 54/2009 adopted by theGovernment of the Republic of Slovenia were also drawn upwhich are currently undergoing review and reconciliation. Subsequentguidelines regarding safety in longer tunnels will besubmitted together with the results of the analyses.A fire broke out in the Trojane Tunnel in January 2010 puttingthe safety assurance system in motorway tunnels to a serioustest. Due to the expected operation of the safety equipmentand effective response of all included services (DARS d.d. andexternal contractors) the fire's impact was limited and trafficwas able to flow through the tunnel without interruption afterfour days. An analysis of the event also showed the correctnessof the decision that special professional fire brigades should beensured for longer tunnels to enable fast access the scene ofaccidents. In 2010 DARS d.d. earmarked funds for the operationof such units for the Karavanke Tunnel and the chain of Trojanetunnels.Regular maintenance and control of traffic flows through thetunnels rate as a basic condition of tunnel safety and wereimplemented throughout 2010. Traffic management and controlwas most suitable in those tunnels located on ‘smart road’segments which upon emergencies enable quick and effectiveresponse by the control centre operator on these segments.Special measures were defined for the Karavanke Tunnel forpeak traffic volumes. Although these measures will improvesafety in tunnels a suitable level of safety will only be achievedthrough the upgrade of a second tunnel tube or an appropriateemergency-rescue gallery in conjunction with the upgrade ofthe ventilation system. An agreement between Slovenia andAustria had not yet been made in 2010 regarding the aforementionedupgrades which pursuant to the directives of theEuropean Union have to be realised by 2019.In the second half of the year, four accidents with fatalitiesoccurred in the tunnels. Despite the fact that the course ofevents dictated a possibility of wilful misconduct by the drivers,activities for the appropriate arrangement of critical points inexisting and planned tunnels were launched.65ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORTUser Satisfaction66Numerous factors influence user satisfaction regarding motorwaysand expressways. As the manager and operator of Slovenianmotorways and expressways DARS d.d. unfortunately isnot able to influence all factors of user satisfaction thereforeit will be that much more important to establish which factorsthe company can impact and how important they are for totaluser satisfaction.Two surveys were carried out to this end in 2010 in which motorwayusers rated twenty factors related to satisfaction. Withthe surveys, the Company attempted to establish what theopinions of those surveyed were regarding motorway safety,maintenance and equipage of motorways, notification regardingmotorway conditions, rest stop offers and toll collection.In addition to the degree of satisfaction users also assessed theimportance of these factors.The results showed that drivers found ploughed road surfacesand comprehensible traffic signalisation as the most importantsatisfaction factors while catering offers at rest stops were consideredleast important. The surveys also showed that the importanceascribed by users to individual factors did not changewith regard to the season the surveys were carried out and thatthey remained constant.The users ranked the factors from 1 to 5 with 1 representing thelowest satisfaction rating and 5 the highest. In December 2010the average user satisfaction rating comprised 3.4 and in thesummer 3.35. The most satisfied users were those using theŠtajerska motorway leg while those least satisfied used the Gorenjskamotorway leg. Users were most satisfied with the trafficsignalisation and safety in tunnels and least satisfied withthe maintenance of the motorways and traffic signalisationduring renovation works.Based on the results obtained from measured user satisfaction,the management of DARS d.d. adopted objectives for the upcomingyear and measures for their realisation.ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTEnvironmental ManagementThrough investments in the construction of new motorwaysand expressways, the Company is constantly improving connectionsbetween economic and regional centres while devotingspecial concern to environmental protection in the earliestphases of planning motorway and expressway layouts, duringtheir construction, and after they are given over to traffic. Thisis not only an economic and competitive necessity, but also aresponsible attitude towards the environment in general.Environmental protection holds a special significance withinthe framework of sustainable development. For this reason, theCompany devotes special attention to environmental protectionin the early phase of planning motorways and expresswaysand their positioning in the environment by preparing all necessaryexpert documents relating to environmental protection.This is primarily reflected in motorway layouts, as well as inindividual solutions ensuring the prescribed protection againstthe negative consequences of motorway construction andoperation.NoiseIn 2010, noise barriers were erected simultaneously with theconstruction of new motorway sections. Studies of noise loadsand analyses of passive noise protection were prepared withinthe scope of rehabilitation works and investments in environmentalprotection. In 2010 noise barriers were erected at individualsegments where the preliminary noise measurementsdictated the need for the construction of such noise protection(at the Dragučova-Lenart section and within the scope of therenewed road (Vrhnika-Logatec section). The Company alsoimproved a number of short noise barrier sections which hadbeen damaged in traffic accidents (at the Ljubljana east–LjubljanaBizovik and Šentrupert–Vransko, Trojane–Blagovica sections).WastesAs the operator and maintainer of motorways and expressways,the Company also implements the environmental protectionpolicy in all areas, including waste management. The Companycollects and sorts wastes accumulating during its work orremoves them from road areas and sections. Wastes are handedover to authorised waste acceptors (collectors, processers)and waste management records are kept and an annual wastemanagement report is published. Dangerous wastes collectedby the Company included drainage water, wastes which ariseduring road cleaning, tunnel wash water, wastes from de-sandingand mixed construction waste. The majority of dangerouswastes comprise waste oils and sludge, absorbent papers(used in accidents) and waste batteries. A filtering facility (at alocation near the Vipava branch) was constructed in 2010 forprocessing liquid and mud waste materials which enables thefiltration of waste materials containing large quantities of water,in this manner reducing the volume of wastes and indirectlyalso costs.Protection of WatersThe drainage of meteoric water from roads is performed usingreservoirs, which retain the hard particles from roads. The reservoirsare regularly maintained and their sediments taken topurification plants. In 2010 numerous oil separators and two ofthe most burdened sedimentation basins were cleaned (Snebrjeand Ravbarkomanda). Safety protection maintenance wasimplemented at 27 collecting basins in MMC Kozina (constructionof surface gratings). The Company also systematicallycollects and removes waste waters accumulating during thewashing of tunnels.Gas EmissionsVentilation systems are installed in tunnels whose lengthexceeds 1000 metres. The automatic control of these systemsenables the monitoring of gas emissions. Automatic controlregulates the presence of carbon monoxide and visibility. Gasemissions in 2010 were not critical.Environmental Impacts of Road GrittingTo prevent slippery roads and ensure safe road conditions inwinter, roads are gritted using various gritting materials. Thesematerials have a minimum impact on the ground, quality ofsurface and groundwater, flora, fauna, humans and animals,facilities (road lanes, bridges, viaducts and buildings), and onvehicles. Studies conducted in the past have shown that roadsalting has a small impact on ground water, as the salt is dilutedby a factor of 100 to 500.67ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORTHuman Resources Management68Employees in DARS d.d.Table 10: Key data on employees in DARS d.d. in 2009 and 20102009 2010Status of employees in DARS d.d.Number of employees in DARS d.d. 1250 1247Demographic Data on EmployeesAverage age of employees 41.8 years 42 yearsPercentage of employed females 25% 25,1%Employee Education StructurePercentage of employees with a maximum 4th level education 47.7% 45.9%Percentage of employees with a maximum 5th level education 33.6% 34.2%Percentage of employees with a maximum 6th level education 6.1% 6.8%Percentage of employees with a maximum 7th or higher level education 12.6% 13.1%Employee Social SecurityNumber of solidarity assistance granted 38 49Number of jubilee awards 96 149Number of employees with disabled status 47 48Number of procedures introduced for recognising disabilities 20 17Number registered in collective accident insurance 162 118Number registered in voluntary pension insurance 64 34Degree of sick leave 5.1 percent 4.6 percentNumber of envisaged retirements 14 31Planned retirements 15 21Employee Development – Education and TrainingNumber of days of completed internal education and training 736 2426Number of referrals to external education and training programmes 207 270Number of pedagogical hours per employee within the scope of internal education andtrainingNumber of pedagogical hours per employee within the scope of external education andtraining8.4 19.48.5 8.8Number of concluded and valid part-time studies contracts 9 26ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTEducation is a ValueThe Company knows that employee education and trainingresults in greater work efficiencies, brings higher expertise,innovativeness and successful management of change in theCompany's operations therefore various activities were organisedfor this area in 2010. Recommendations represented thebases for implementing new education and training activities.The new Rules on education and training thus represent thefoundation for the complete arrangement and managementof this area. The most important novelty is the arrangementof part-time studies which significantly assists employees inimproving their formal professional education, particularlyin the process of restructuring the toll collection area. At thesame time it represents an instrument for ensuring and maintainingan adequate level of employee professional educationin accordance with the interests of the employer arising fromthe needs of the Company's working processes and strategicorientation. In 2010 twenty-six new part-time studies contractswere concluded.Project activities were carried out in the area of Internet educationwhich resulted in a larger number of implemented educationaland training courses or an increase in the number of hoursof education and training per employee with the aim of obtaininggeneral and specific knowledge connected to the performanceof their work. A total of 2,426 employees participatedin Internet education and training in 2010, representing 3.29times more than in the previous year. Project activities will alsocontinue in the future and be implemented within the scope ofongoing processes during work time for organisation and staff.69Graph 11: Number of employees in 2009 and 2010 by individual segment800õ700õ662õ671õ600õNumber Število of Employeeszaposlenihõ500õ400õ300õ200õ180õ176õ388õ377õ100õ0õ20õ23õPODPORNE SLUŽBEõPODROČJE ZA IZVEDBO PODROČJE ZA ORGANIZACIJO PODROČJE VZDRŽEVANJASUPPORT SERVICES TOLL CESTNINJENJAõCOLLECTION CONSTRUCTION GRADENJ IN OBNOVõ AND MOTORWAY AVTOCEST, MAINTENANCE,IT ITSõRECONSTRUCTION ORGANISATION IT ANDIT'SStanje zaposlenih na dan 31.12.2009õ Stanje zaposlenih na dan 31.12.2010õNumber of Employees as at 31 December 2009Number of Employees as at 31 December 2010ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORT70Graph 12: Comparative overview of the employee educational structure for 2009 and 201060õ50õ47.7õ45.9õProcentageOdstotekõ40õ30õ33.6õ34.2õ20õ12.6õ13.1õ10õ6.1õ6.8õ0õNajveč IV. stopnja izobrazbeõ V. stopnja izobrazbeõ VI. stopnja izobrazbeõ VII. ali višja stopnja izobrazbeõMaxiumm 4th lever education 5th lever education 6th level education 7th level education or higherLeto 2009õ Leto 2010õYear 2009 Year 2010Concern for EmployeesOnly healthy and satisfied employees can successfully and effectivelyrealise set professional and personal objectives. Thereforeemployee concern includes activities for achieving setobjectives which are sustainably managed and systematicallyupgraded.Within this work area, the Company actively resolves problemsregarding decreased or changed work capabilities in which scopeit endeavours to reallocate employees in accordance withthe recommendations of expert colleagues and required workprocesses. In 2010, DARS d.d. had 48 employees with a recogniseddisability.The Company is also aware that in order to manage the increasinglymore frequent cases of changed work capabilities ofemployees in the future, necessary preventative actions in thepresent are necessary, therefore in 2010 it began to intensivelyundertake the promotion of the “Healthier-Safer-Better”project. The project aims to focus employee attention on theconcern for maintaining and strengthening their health. TheCompany received some additional funds for the project's implementation,also from the Health Insurance Institute of Slovenia.Approximately 550 employees participated in the projectwhich comprised various activities. The project activitieshad an impact on managing and decreasing the level of sickleave (7 percent decrease compared to 2009), increased thelevel of employee self-responsibility for their health and increasedwork satisfaction, contributing to an improved quality oflife for the employees.The project activities were also implemented on the organisationallevel and through the fortification of systematic andcontinuous concern in this area. The Company also preparedthe Strategy for Managing Employees with Changed Work Capabilitiesintended predominantly for the active resolution ofproblems stemming from changed employee work capabilitiesand preventative actions regarding the maintenance of employeehealth through the promotion of a healthy way of life.Within the scope of its concern for employee social security,the Company organises and manages supplementary healthinsurance for employees, collective accident insurance, and voluntarysupplementary pension insurance.ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTJob Satisfaction, EmployeeDevelopment and MotivationIn 2010 the Company successfully continued to implementregular annual interviews, thus preparing the bases for moreeffective monitoring of work and results attained, improvedcommunications in the form of an exchange of opinions andviews between managers and employees, acquainted employeeswith the objectives of the Company and organisational unitsand managed their ambitions and career aspirations. In 2010the annual interviews were implemented with a 96.2 percentsuccess rate.Employees are also provided motivation and encouragementthrough the established promotion system based on known criteriaand at the end of each year, a festive awarding of distinctionsand commendations is held for employees in the form ofnon-materials award for their efforts and work dedication. In2010 the following awards were given: a gold plaque was awardedfor lifetime work, five silver plaques to the most motivatedemployees, eight commendations for outstanding work achievementsand distinctions for 20 and 30 years of service atDARS d.d.for improving health and safety at work. Measures relatedpredominantly to the most exposed employees, namely thoseworking in maintenance and on the field, have already beenrealised or are in the concluding phases.Additional written instructions for safe work have been preparedfor employees due to changes in legislation and technologicalprocedures. Employees are concurrently informed of thesituation regarding health and safety at work, are acquaintedwith work accidents and notified in the event of a violation ofthe rules of safe work.The Company commenced with the periodical requalification ofemployees for safe work in the second half of 2010. The theoreticallectures were followed by practical presentations and handson experience with work equipment used by the employeesin their work. The qualification will continue in 2011.In the area of health protection, the Company organises medicalexaminations and vaccinations against tick-borne encephalitisand the flu, and participates in the preparation of documentsfor disability committees.71Health and Safety at WorkA risk assessment audit regarding health and safety at workwas prepared in 2010. Based on the analysis of workplace injuriesin the past five years and reports from medical occupationalhealth specialists on the state of employee health theCompany decided to implement seven systematic measuresANNUAL REPORT 2010 DARS d.d

BUSINESS REPORTCommunications72DARS d.d. is well aware of the importance of giving the mediaprompt access to important information. All media representativesare entitled to information under equal conditions andalso have access to DARS communications at the Media Centreon its website (www.dars.si), where general or financial newscan be accessed separately via the Press Releases section. TheVideo gallery was redesigned, the Photo gallery upgraded anda Publications section added since interesting and practicalinformation are also published at the Media Centre for otherpublics. In 2010 the Company again regularly and comprehensivelyinformed and acquainted the media and other publics ofnumerous activities carried out at the Company using variouscommunication tools. Media representatives were also encounteredat other important events.The Company responded to the majority of questions posedby media representatives related to all areas of operation ofthe company DARS d.d. the same day via e-mail or directly bytelephone.In 2010 the Company traced a total of 6,453 planned and unplannedarticles regarding DARS d.d. in electronic, printedand web media. The share of communications in which DARSd.d. played the main role amounted to 44 %. The total numberof planned and unplanned articles decreased by a fifth incomparison to 2009 while the share of press releases focusedon DARS d.d. comprised 2%. The average assessment ofthe public’s disposition towards the Company in 2010 basedon findings from a media analysis had not changed much incomparison to 2009, meaning that media reports about DARSd.d. were, on average, neutral.Communications with Motorway andExpressway UsersUsers most often contact the Company by e-mail or telephonewith concrete questions, proposals, comments, complaints,and even praise, related to the use of motorways. The mostfrequent questions dealt with were reconstruction and maintenanceworks and, consequently, the congestions causedby such works, traffic safety, and toll collection or vignettes.Persons residing in the vicinity of motorways are most ofteninterested in measures that could reduce the negative impactsof motorways and traffic in a specific environment. Questionsregarding the installation of noise protection are mostfrequent, whereas in the construction phase these questionsare centred on the completion of motorway sections and theelimination of consequences of construction works in the localinfrastructure. Normally persons residing near motorways orconstruction sites contact us directly, but occasionally civil initiativesare organised in certain areas for this purpose.The Company answers the majority of questions received by e-mail within two working days at the latest. Replies to questionscan also be found on the Company’s website.Information on Public RoadConditionsA great deal of attention is focused on complete and qualitynotifications for drivers regarding driving conditions on motorwaysand expressways. TIC collects, on a daily basis, informationon current road conditions and delivers them to userson the web portal www.promet.si, from where almost all radiostations in Slovenia, numerous web portals and TV stationsreceive their information. All the denoted media also receiveinformation directly via email from the information systemcentre.A contract on the establishment of a so-called radio stationwas signed in 2009 with the Ministry of Transport, SlovenianRoads Agency and RTV Slovenija (national radio and televisionstation). TIC operators tune into various radio stationsmore than thirty times a day with live reports on current roadconditions. Users can also obtain information via the toll-freetelephone number or direct telephone numbers.Communications with Experts andProfessionalsCommunications with expert publics are predominantly directlycarried out: at meetings, gatherings and presentations,by telephone or in writing, or in the form of organised visitsto motorway construction sites and control centres. Professionalpublics include all external participants and institutionsaffiliated with the Company or which influence its operations.Special attention is given to contents regarding traffic safety,education and preventative actions tied to the roads the Companyoperates and manages.Communications with EmployeesConsiderable attention is also given to communications withemployees who represent one of the Company's most importantpublics. Their satisfaction and motivation will influencehow well and how quickly work will be completed and the missionof the Company achieved. Communications with employeesare carried out in a variety of ways.ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTThe internal newsletter “Avtoceste” (Motorways) is publishedperiodically whereby together with the editing committee andin accordance with their policy, employees are acquaintedwith news, expert contents and items of interest on all levelsof company operation. The Company endeavours to awakenan active attitude towards the published contents and alsoestablish a flow of feedback and new ideas and fresh contents.The monthly bulletin “Preglednik” (Examiner) is intended foracquainting employees with current events in the Companyand in connection to the Company and the publication of repliesto employee questions.The intranet site also proved an effective tool for communications.The contents published on this site are current andupdated on an ongoing basis. Numerous useful documents,forms, acts, photo documentation and clippings are also publishedon the site.Communications with employees is also implemented viaexternal validated communication channels, particularly onthe occasion of events and decisions important for the Companyand its employees.Communications with the SocialEnvironmentDARS d.d. due to its powerful role and significance in the broadersocial environment it strongly endeavours to act like asocially responsible company.The Company does not shy away from concern and responsibilitytowards the people and the environment in which it operates.Through awareness, prevention campaigns in the areas oftraffic and traffic safety and environmental protection it takesan active part in the current social events co-creating themto the greatest extent possible also through sponsorships andother forms of cooperative support of various projects andevents on all company levels.73ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORT74CorporateANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORT75CORPORATEGOVERNANCE STATEMENTOF MOTORWAY COMPANY INTHE REPUBLIC OF SLOVENIAANNUAL REPORT 2010 DARS d.d

BUSINESS REPORT76In accordance with the provision of paragraph five of Article70 of CA-1, the Articles of Association of DARS d.d. entered intothe court register at the District Court in Celje on 31 March 2011and the provisions of the Corporate Governance Code for JointStock Companies, DARS d.d. hereby presents, as part of the BusinessReport, the following Corporate Governance Statementof DARS d.d.1. Reference to the CorporateGovernance CodeDARS d.d. hereby informs its shareholders and the public thatit carries out it operations in line with valid regulations andacts which are applicable in the Company and also regulate themajority of issues set forth in the Corporate Governance Codefor Joint Stock Companies adopted on 8 December 2009 bythe Ljubljana Stock Exchange, Inc., Ljubljana, the Associationof Supervisory Board Members of Slovenia, and the Managers’Association of Slovenia. As of 13 January it also carriesout its operations in line with the Corporate Governance Codefor Companies With State Capital Investments adopted by thecommittee of the Capital Assets Management Agency of theRepublic of Slovenia which reports on the rules, procedures andcriteria for managing management and supervisory bodies incompanies with state capital investments. The Company beganenforcing the provisions of this Code through an amendmentof its Articles of Association which were entered into the courtregister on 31 March 2011.The Company hereby declares that the Codes are applicablefor the Company and publicly accessible on the web pages ofthe Ljubljana Stock Exchange at the address: http://www.ljse.si/ and on the website of the Capital Assets Management Agencyof the Republic of Slovenia at the address: http://www.auknrs.si/f/docs/PDF_dokumenti/kodeks.pdf.2. Deviations of the Company fromthe provisions of the CodeThe Company declares that it observes the provisions of theCodes, except for certain deviations stemming from its specialstatus, as its sole shareholder is the Republic of Slovenia.The shareholder of the Company from 29 May 2010 onwardswhen the Law on Corporate Governance of State Capital Investmentswent into force exercises its rights through the CapitalAssets Management Agency of the Republic of Slovenia.The Agency acts as a representative of the Republic of Sloveniawhen exercising the rights stemming from shares and stakesand in cases pending before courts and other bodies connectedto the execution of these rights. The Agency also exercisesthe rights of the shareholder through the implementation ofGeneral Meetings.The Company does not observe the provisions of the Code insettling those issues which are regulated for the Company byapplicable law, or which are settled by the Company in a differentmanner in conformity with the provisions of the Articlesof Association or acts of the Company. The Company also doesnot observe the provisions of the Code in cases when nonmandatoryconduct is not prescribed in its acts or when certaintypes of conduct are not prescribed as a legal obligation.3. Main characteristics of theinternal control and risk managementsystems in the Company in relationto the financial reporting procedureThe system of internal controls is a set of various guidelinesand policies established and adopted by the management forthe purpose of optimally managing the risks related to financialreporting. The purpose of internal controls is to ensure efficientand successful operation, reliable financial reporting, andANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTcompliance with applicable laws and other external and internalregulations.The Company has established a system of managing risks connectedto financial reporting. The system of internal controlsin the area of financial reporting is not supported by suitableand valid internal acts which could define the controls systematicallyand more precisely. This deficiency is envisaged to beremedied by 31 May 2011.Despite the above-mentioned deficiencies, the Company ensuresthe accuracy, completeness and truthfulness of financialreporting by implementing the following internal controls:• control of the accuracy of accounting information, whichis ensured in various ways, e.g. by reconciling items withbuyers and suppliers;• control of the completeness of entered data (e.g. sequenceof documents, enumeration of documents);• control of allocation of duties and responsibilities (e.g.separate performance of recording and payment);• control of access limitations (right of access to accountingrecords are selectively granted);• control of supervision.The accounting process is IT supported, and so all the abovementioned internal controls are linked to controls incorporatedwithin the framework of information technology. These controlscomprise both controls of limited access to the network,information and applications, as well as controls of accuracyand completeness of entered and processed information.4. Securities of the Company andAttached RightsThe entire share capital of the company, divided into shares, isfully (100 %) owned by the Republic of Slovenia.5. Functioning of the Company’sGeneral Meeting and its keycompetences and description of therights of shareholders and themanner of exercising such rightsThe Company has the status of a public limited company functioningas a commercial company under CA-1.The functioning of the General Meeting and its key competences,as well as the rights of shareholders and the manner ofexercising such rights, are defined in more detail in the Articlesof Association of DARS d.d.The sole founder and shareholder of DARS d.d. is the Republicof Slovenia, which as of 29 May 2010 exercises its right throughthe Capital Assets Management Agency of the Republic ofSlovenia. The Republic of Slovenia exercises its shareholder’srights, as defined in CA-1 and the Articles of Association of Darsd.d., at general meetings, which are conducted at sessions ofthe Government of the Republic of Slovenia (Official Gazette ofthe Republic of Slovenia, No. 38/2010).The General Meeting in accordance with point 7.4.5 of the Articlesof Association of DARS d.d. comprise decision-making on:• issue of new shares or formation of new or separate classesof shares, each division of shares, formation of associations,distribution of shares as dividends or division of anyregistered securities of the Company,• appropriation of accumulated profit (payment of dividends),pay-out of capital and retaining of earnings,• election of members of the Supervisory Board,• granting of discharges to the Management and SupervisoryBoards,• any change in the company status, mergers, demergers,joint investments, partnerships, investments and similarmeasures,• company liquidation,77ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORT78• conclusion of enterprise contracts (as defined in the CA-1),• decisions granting authorisations for the issue of stockoptions or convertible bonds and conditions thereof• capital increases (inclusive of conditions or approval ofincreased capital) and/or capital decreases,• appointment and discharge of the company auditors,• adoption and amendment of the Company Articles ofAssociation,• measures connected to the acquisition of own shares,• every significant change related to the company’soperations.General meetings are convened by the Management Board ofthe Company at its own initiative, at the request of the SupervisoryBoard or that of the Company’s shareholders.A general meeting must be convened in the legally prescribedcases, and at least once a year, immediately after receiving theauditor’s report.6. Composition and activities of theCompany’s managerial andsupervisory bodies and theircommittees6.1 Management BoardThe composition and activities of the Management Board aredefined in more detail in the Articles of Association of DARSd.d. and is comprised of a maximum of five members. A personwho fulfils the requirements specified in Article 255 of CA-1and Article 32 of the Articles of Association maybe appointedmember of the Management Board. All members of the ManagementBoard are appointed by the Supervisory Board for aperiod of 5 years. All members of the Management Board areemployees of the Company.The Management Board of DARS d.d. is comprised of the followingmembers: Mateja Duhovnik, Chairwoman, Gordana Bošković,Deputy Chairwoman and Alojz Ratajc, MSc, member andLabour Manager.The Management Board manages the Company in theCompany’s best interests, independently and at its own responsibility.At the same time it must act as a diligent and honestmanager and protect the business secrets of the Company. TheManagement Board realises its task namely management ofthe Company through the adoption of measures and carriesout the activities defined by law and the Articles of Associationof the Company.If the Management Board has more than two members, theCompany is jointly represented by the Chairwoman of the ManagementBoard and one member of the Management Board.The Management Board adopts resolutions within the scope ofits competences with a majority vote of all members of the Board.Each member of the Management Board is entitled to onevote. In case of a tied vote, the vote of the Chairwoman of theManagement Board is decisive. The Labour Manager participatesin decision-making when the Management Board decideson staff and social issues.The Management Board adopts rules of procedure on its work,in which it grants consent to the Supervisory Board.6.2 Supervisory BoardIn accordance with point 7.3.1 of the Articles of Association ofDARS d.d. the Supervisory Board is comprised of six members,two of whom are employee representatives.The Supervisory Board adopts the rules of procedure on itswork in accordance with the Articles of Association. The SupervisoryBoard appoints a Chairman and Deputy Chairman.ANNUAL REPORT 2010 DARS d.d.

BUSINESS REPORTThe Supervisory Board must be convened at least once everyquarter with a mandatory convocation semi-annually. The SupervisoryBoard constitutes a quorum if at least two thirds ofthe members are present at a meeting, including the Chairmanand Deputy Chairman of the Supervisory Board.In accordance with the Article of Association of DARS d.d. theSupervisory Board supervises the management of transactionswhich are managed by the Company, appoints and dischargesthe Management Board, may convene general meetings, reviewsand examines the ledgers and documentation of the Company,its cash in hand, securities and inventory of goods andother items, grants the Management Board its advance consentfor transactions exceeding a value of EUR 2,500,000.00(exclusive of VAT), grants consent to the Management Boardfor the establishment and termination of subsidiaries establishedby the Management Board, performs other activitiesdefined in the CA-1 and other legal regulations, confirms theannual report with the proposed distribution of net profit forthe reporting period, submits proposals to the General Meetingfor the distribution of accumulated profit, grants consent to theappointment of the auditing firm, appoints the audit committeeof the Supervisory Board, grants consent for the purchase anddivestment of stakes and shares in other companies and grantsconsent regarding the plans of the Company.The Supervisory Board is required to examine the annual reportand the proposed appropriation of accumulated profit submittedby the Management Board. It must compile a written reporton the results of its examination for the General Meeting.The more detailed composition and activities of the SupervisoryBoard of the Company and its committees in 2010 are presentedin the Report of the Supervisory Board.Decisions related to the General Meeting, Management Boardand Supervisory Board and Company securities are summarisedin the Articles of Association which was adopted by theGeneral Meeting on 14 March 2011 and entered into the courtregister on 31 March 2011 and adopted in connection to a decisionon increasing capital with a in-kind contribution pursuantto the MCRSA-1.79Ljubljana, april 2011Supervisory Board of DARS d.d.Management Board of DARS d.d.Milan Medved, PhDChairman of the Supervisory BoardMateja DuhovnikChairwoman of the Management BoardGordana BoškovićMember of the Management BoardANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORT80FinancialANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORT81Financial reportANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORT1 Financial Statements of DARS d.d.Balance Sheet as at 31 December 201082in EUR (without cents) Note 31 Dec 2010 31 Dec 2009ASSETS 5.611.218.851 98.739.533A. LONG–TERM ASSETS 5.457.759.558 20.940.141I. Intangible fixed assets and long–term deferred costs accrued revenue 4.1.1. 808.360 627.3771. Concessions, patents, licences trademarks and similar rights 808.360 627.377II. Property plant and equipment 4.1.2 5.454.868.823 19.842.6631. Land and buildings 5.314.426.063 1.479.078a) Land 32.131.719 29.923b) Buildings 5.282.294.344 1.449.1543. Other plant and equipment 17.621.096 17.659.6714. Property, plant and equipment under acquisition 122.821.664 703.914b) Property, plant and equipment under construction and manufacture 122.821.664 703.914IV. Long– term investments 4.1.3 964 9641. Long–term investments, excluding loans 964 964c) Other shares and interests 964 964VI. Deferred tax 4.1.4 2.081.410 469.136B. CURRENT ASSETS 152.326.621 76.808.651II. Inventories 4.1.5 2.014.414 1.877.0961. Materials 2.014.414 1.877.096III. Short–term investments 4.1.6 104.583.642 45.265.6321. Short–term financial investments, excluding loans 104.583.642 45.265.632c) Other short–term financial investments 104.583.642 45.265.632IV. Short–term operating receivables 4.1.7 40.492.781 22.693.4662. Short–term trade receivables 11.117.204 9.800.5913. Short–term operating receivables due from others 29.375.577 12.892.875V. Cash and cash equivalents 4.1.8 5.235.784 6.972.457C. Short-term deferred costs and accrued revenue 4.1.9 1.132.672 990.741ANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORTin EUR (without cents) Note 31 Dec 2010 31 Dec 2009LIABILITIES 5.611.218.851 98.739.533A. Capital 4.1.10 2.402.580.775 55.413.862I. Called–up capital 2.319.866.345 212.8231. Share capital 212.823 212.8232. Unregistered paid-in capital 2.319.653.522 212.82383II. Capital reserves 26.428.084 26.428.057III. Revenue reserves 41.816.248 17.130.7561. Legal reserves 1.544.450 21.2825. Other revenue reserves 40.271.798 17.109.474V. Retained net earnings 0 1.480.641VI. Net profit or loss for the period 14.470.098 10.161.585B. PROVISIONS AND LONG–TERM ACCRUED COSTS AND DEFFERED REVENUE 4.1.11 85.536.717 3.701.7751. Provisions for pensions and similar liabilities 2.062.897 1.984.4412. Other provisions 79.876.825 844.8443. Long–term accrued costs and deferred revenue 3.596.995 872.490C. LONG–TERM LIABILITIES 2.935.858.574 0I. Long–term financial liabilities 4.1.12 2.931.830.772 02. Long–term financial liabilities to banks 4.1.13 2.771.466.225 03. Long–term financial liabilities from bonds 4.1.14 160.364.547 0II. Long–term operating liabilities 4.1.15 4.027.801 05. Other long-term operating liabilities 4.027.801 0Č. SHORT–TERM LIABILITIES 165.761.338 19.436.759II. Short–term financial liabilities 4.1.16 88.357.577 02. Short–term financial liabilities to banks 81.125.566 03. Other short–term financial liabilities 7.232.011 0III. Short–term operating liabilities 4.1.17 77.403.761 19.436.7592. Short–term trade payables 46.912.213 11.692.0324. Short–term advances payable 38.185 57.7905. Other short–term operating liabilities 30.453.363 7.686.936D. SHORT–TERM ACCRUED COSTS AND DEFERRED REVENUE 4.1.18 21.481.447 20.156.383E. LIABILITIES ARISING FROM THE USE OF STATE-OWNED ASSETS UNDERMANAGEMENT TO FINANCE COMPANY-OWNED ASSETS0 30.754The accounting guidelines and explanatory notes are a constituent part of the Financial Statements and should be read in connection thereof.ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORTCash Flow Statement for the period from 1 January to 31 December 2010in EUR (without cents) 2010 2009A. Cash flows from operating activitiesa) Items from the Income StatementOperating revenue (except from revaluation) and financial revenue from operating receivables 313.821.014 272.299.227Operating revenue (except from revaluation) and financial revenue from operating receivables -73.651.280 -250.882.112Income taxes and other taxes not included in operating expenses -506.488 -2.934.045b) Changes in net operating assets (including accruals and239.663.246 18.483.06985deferrals, provisions and deferred tax liabilities) from balance sheet operating itemsOpening less closing operating receivables -13.070.106 20.280.742Opening less closing deferred costs and accrued revenue 21.665.089 11.975.763Opening less closing deferred tax receivables -1.612.274 0Opening less closing inventories -260.539 109.879Closing less opening operating liabilities -44.221.599 54.217.560Closing less opening accrued costs and deferred revenue, and provisions 50.687.193 -13.157.052-13.187.763 73.426.892c) Net cash (receipts or expenditures) from operating activities (a + b) 252.851.009 91.909.961B. Cash flow from investing activitiesa) Cash receipts from investing activitiesInterest and dividends received from investing activities 2.078.295 17.122Cash receipts from disposal of property, plant and equipment 4.473.773 1.397.478Cash receipts from disposal of short-term investments 11.097.378 924.537.76817.649.446 925.952.368b) Cash payments from investing activitiesCash payments for the acquisition of intangible assets -1.002.603 -505.342Cash payments for the acquisition of plant, property and equipment -189.448.693 -276.694.301Expenditures for the acquisition of short-term financial investments -60.239.113 -958.431.276-250.690.409 -1.235.630.918c) Net cash (receipts or expenditures) from investing activities (a + b) -233.040.963 -309.678.549C. Cash flows from financing activitiesa) Cash receipts from financing activitiesCash receipts from an increase in long-term financial liabilities 185.000.000 324.926.636Cash receipts from an increase in short-term financial liabilities 0 25.650.665185.000.000 350.577.301b) Cash payments from financing activitiesInterest paid on financing activities -48.646.259 -16.994.530Cash payments for the repayment of long-term financial liabilities -133.910.233 0Cash payments for the repayment of short-term financial liabilities -21.056.890 -103.488.654Dividents and other profit shares paid -2.950.000 -10.019.265-206.563.382 -130.502.449c) Net cash (receipts or expenditures) from financing activities (a + b) -21.563.382 220.074.852Č. Closing balance of cash 5.235.784 6.989.120x) Net increase/decrease in cash i(n the period) sum total of net cash Ac, Bc and Cc) -1.753.337 2.306.264y) Opening balance of cash 6.989.120 4.682.857The accounting guidelines and explanatory notes are a constituent part of the Financial Statements and should be read in connection thereof.ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORTStatement of Changes in Equity for the period from31 December 2008 to 31 December 2010I. II. III. V. VI.86in EUR (without cents)A. 1 Balance as at 31 December2010B.1. Increase/decrease in equitycapital - transactions withownersCalled-up capitalCapitalreservesRevenue reservesNet profitor loss forthe periodRetained1. 2. 1. 4. earnings 1.SharecapitalUnregisteredpaid-in capitalsurplusLegalreservesOtherrevenuereservesNet profitfor theperiodTotal equity212.823 26.428.057 21.282 17.109.474 0 11.499.906 55.271.542g) Dividend payment -1.500.000 -1.500.000i) other changes in equity -8.519.265 -8.519.265B.2. Total comprehensiveincome for the reporting perioda) Net profit/loss for thereporting period10.161.585 10.161.585B.3. Increase/decrease in capitalf) other changes in capital 1.480.641 -1.480.641 0D. Balance as at 31 December2009212.823 26.428.057 21.282 17.109.474 1.480.641 10.161.585 55.413.862B.1. Increase/decrease in equitycapital - transactions withownersa) called-up share capital 2.319.653.522 27 0 0 0 0 2.319.653.549g) Dividend payment -1.480.641 -1.469.359 -2.950.000B.2. Total comprehensiveincome for the reporting perioda) Net profit/loss for thereporting period30.463.365 30.463.365B.3. Increase/decrease in capitalb) Allocation of net profit/lossfor the reporting period toother capital elementspursuant to decisions by themanagement and supervisorybodies1.523.168 14.470.098 -15.993.266 0c) Allocation of net profit/lossfor the reporting period for theformationof additional provisionspursuant to decisions of theGeneral MeetingD. Balance as at31 December 2010ACCUMULATED PROFIT at31 December 20108.692.226 -8.692.226 02.319.866.345 26.428.084 1.544.450 40.271.798 0 14.470.098 2.402.580.7750 14.470.098 14.470.098The accounting guidelines and explanatory notes ar a constituent part of the Financial Statements and should be read in connection thereof.ANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORTStatement of Accumulated Profit and Proposal Regarding its Appropriation8731 Dec 2010 31 Dec 2009A. Net profit or loss for 2010 30,463,365 10,161,585B. Retained earnings 0 1,480,641C) Increase in revenue reservesC1. Increase in legal reserves 1,523,168 0C2. Increase in other reserves 14,470,098 0C. ACCUMULATED PROFIT FOR THE PERIOD 14,470,098 11,642,226Net profit of DARS d.d. for 2010 will be allocated to legal reserves and other revenue reserves at the recommendation of the Managementand Supervisory Boards of DARS d.d. and in accordance with CA-1. Accumulated profit of DARS d.d. as at 31 December 2011 comprisesEUR 14,470,098. The General Meeting of DARS d.d. will decide on the allocation of accumulated profit in accordance with CA-1.ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORT2 Reporting Company88DARS d.d. is a registered legal entity with its registered office in Slovenia. The address of the registered office of the Company is UlicaXIV. Divizije 4, 3000 Celje. The Company compiles the financial statements and reports defined in the first paragraph of Article 60of CA-1 in accordance with Slovenian Accounting Standards (SAS). The Management Board of the Company confirmed the financialstatements on 19 April 2011.3 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 inaccordance with the accounting and reporting requirements of the Slovene Accounting Standards (SAS) and in accordance with theprovisions of CA-1 and MCRSA-1.Two fundamental accounting assumptions were taken into account in the preparation of the financial statements: observance of theaccrual basis and principle of a going concern.The financial statements are compiled in euros. Foreign currency-denominated items have been translated into euros using the referenceexchange rate of the European Central Bank, applicable on the last day of the accounting period.The comparable information is in accordance with the disclosures referring to the current reporting period however due to changesdictated by MCRSA-1 data from the two periods are difficult to compare. Where necessary, the comparable data have been adjustedso as to match the disclosures referring to the current reporting period.Management must in the compilation of the financial statements give an assessment, appraisal and assumptions that impact theuse of the accounting policies and disclosed value of assets, liabilities, revenues and expenses. Actual results may deviate fromthese assessments. The assessments and aforementioned presumptions must be evaluated on an ongoing basis. Amendments toaccounting assessments are recognised for the period in which the assessment is amended and for all future years for which theamendment applies.Acceptance of the Statement of Off Balance Sheet Items (Balance Sheet ofAssets of the Republic of Slovenia under the Management of DARS d.d.)as at 1 January 2010On the basis of Article 25 of MCRSA-1 assumed all assets and liabilities from the Statement of Off Balance Sheet Items (BalanceSheet of Assets of the Republic of Slovenia under the Management of DARS d.d.) disclosed in the audited Annual Report of DARS d.d.for 2009. In this way DARS d.d. transferred all plant, property and equipment into the asset balance of the Company (decreased bythe value of land transferred to the Republic of Slovenia) which represent road infrastructure both constructed and under construction,short-term assets which represent short-term financial investments, short-term operating receivables and short-term deferredcosts and accrued revenue. DARS d.d. transferred long- and short-term financial and operating liabilities and short-term deferredrevenue and accrued costs to its liabilities balance. A portion of long-term operating liabilities were converted into share capital ofthe Company on the basis of MCRSA-1 through the Decision of the Government of the Republic of Slovenia No. 47600-3/2011/6 of 17February 2011 and is disclosed as unregistered paid-in capital in the Balance Sheet. Additional explanations are given in the chapterANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORTDescription of the Consequences of the Adoption of the Motorway Company of the Republic of Slovenia Act (MCRSA-1) on the Operationsof DARS d.d. (Section IV.3).89Intangible fixed assets and long–term deferred costs accrued revenueIntangible assets comprise investments in acquired industrial property rights (licenses, software).Intangible assets are initially recognised at cost. The acquisition cost comprises their purchase price and any costs incurred in preparingthem for their intended use.Intangible assets are not revalued due to an increase in value.Intangible assets are presented in the balance sheet as a collective item at their carrying amount, which is the amount at which anasset is recognised after deducting any accumulated amortisation from its cost.The cost model has been applied for the valuation of intangible assets.Impairments of assets or cash-generating units are recognised whenever their book values exceed their replacement value. Impairmentsare shown in the income statement. If the Company operates with an adequate profit 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 constructed or manufactured. Suchassets are presented in the balance sheet as a collective item, by type of assets, at their carrying amount, which is the amount atwhich an asset is recognised after deducting any accumulated depreciation from its cost. Assets that can no longer be used becausethey 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 purchase price, import dutiesand non-refundable purchase taxes, as well as any directly attributable costs of bringing them into working condition.Subsequent expenses associated with property, plant and equipment increase their cost, if they increase the future economic benefitsgenerated by such assets in excess of the originally assessed ones or result in an extension of the useful lives of such assets.Repair and maintenance costs incurred to restore or maintain the future economic benefits expected from the originally assessedstandard of performance of an existing item of property, plant and equipment. Expenses are recognised as expenses when incurred.The difference between the net proceeds on disposal and the carrying amount of an item of company-owned property, plant andequipment disposed of shall be recognised as operating revenue from revaluation if the first exceeds the latter, or as operatingexpenses from revaluation if the latter exceeds the first.The cost model is applied for the valuation of property, plant and equipment.Impairments of assets or cash-generating units are recognised whenever their book values exceed their replacement value. Impairmentsare shown in the income statement. The Company assesses possible effects of impairment at least once a year.Amortisation and depreciationThe carrying amount of property, plant and equipment and intangible assets is reduced by the amount of depreciation/amortisation.The depreciation of property, plant and equipment and the amortisation of intangible assets are calculated based on their cost.The depreciation of an item of property, plant and equipment begins on the first day of the following month after it has been madeavailable for use. The amortisation of an item of intangible assets begins when the asset is available for use.ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORT90Amortisation/depreciation is calculated for each asset separately, using the straight line method. Land, substructures and assetsunder acquisition are not depreciated. Such assets are presented in the balance sheet as a collective item, by type of assets, at theircarrying amount, which is the amount at which an asset is recognised after deducting any accumulated depreciation from its cost.Intangible assets and property, plant and equipment are amortised/depreciated at the following rates set by the Management Board:Intangible assetsKey componentsAmortisationrateLand Land used for motorway maintenance bases, rest stops and surplus alongside motorways 0 %Motorway substructuresCosts of regional arrangements, costs of archaeological excavations, costs of projects,construction works (works preparation, earthworks), costs of financing motorwayconstruction, costs of supervising motorway construction without which the construction ofindividual motorway segments could not be implemented, which do not represent motorways(deviations, etc.)0 %Motorway superstructuresMotorway superstructures such as roads (construction works on superstructures), safety andnoise barriers, vertical and horizontal signalisation, drainage (ditches, troughs), oil separators,traffic control equipment and devices, emergency call systems and telecommunications lines3 %Viaducts 3 %Underpasses 3 %Overpasses 3 %Bridges 3 %Train overpasses 3 %Tunnels 3 %Covered excavations 3 %Galleries 3 %Other non-typical motorway facilities 3 %Road infrastructure – other operatorsBuildingsFacilities (state or municipal roads) that DARS d.d. constructed in accordance with the NationalMotorway Construction Programme in Republic of Slovenia (NPIA) which based on theconclusion of a contract of transfer of operation and management to the authorized operatorwill be deleted from the business ledgers of DARS d.d.Motorway maintenance bases, toll stations with cabins and overhangs, other constructedfacilities alongside motorways (sanitary facilities at rest stops, etc.), the administration buildingin Celje, holiday facilities and apartments0 %3 %Traffic control and management system 6 %Equipment (office furnishings, workshopequipment, maintenance equipment, officesupplies, etc.20 %ETC system equipment and devices 20 %Personal automobiles 20 %Machinery 20 %Piece inventory 20 %Computers and computer equipment 50 %Software 50 %ANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORTThe annual amortisation and depreciation of property, plant and equipment and intangible assets of the Company represent anoperating expense.91Property, plant and equipment and intangible assets are depreciated until an asset is fully depreciated, even if the asset is no longerin use or has been withdrawn from use.The acquisition value of constructed motorways and motorways under construction comprises:• revalued acquisition values and value adjustments of motorways transferred by the Republic of Slovenia to DARS d.d. formanagement and operation following the establishment of the Company in 1994 and• the invoiced amounts of expenses required for the commissioning of new motorways, buildings and motorway bases andmotorways under construction: project implementation costs, construction costs, engineering costs, compensation pursuant toperformance contracts (from 2004 to 2009), financing costs (interests from loans drawn, costs of compensation in loans takenout or issue of bonds and other costs connected to construction such as archaeological excavations).Revaluation of the acquisition values for consumer price growth till the end of 2001 is also included in the acquisition value.Write-downs of intangible assets and property, plant and equipment are calculated on an individual basis. The calculation of writedownsbegins on the first day of the following month after the asset has been made available for use. Plant, property and equipment– motorways – begin use on the day of commissioning of the motorway whereby it is not necessary that the investment be concludedor all deficiencies remedied.The Company uses the straight line method of depreciation.The basis for the calculation of depreciation is the full acquisition value of fixed assets. Following activation, all subsequent investmentsthat increase the future benefits of the fixed asset or enable a longer motorway service period (investment – reconstructionof roads and facilities) are included in the base.Long–term investmentsLong-term financial investments are held by the Company to earn returns and thus increase its financial revenue. Long-term financialinvestments are initially recognised at cost, i.e. the amount of money invested.Deferred tax receivablesDeferred tax receivables are the amounts of income tax recoverable in future periods. Deferred tax receivables are recognised for alldeductible temporary differences to the extent that it is probable that taxable profit will be available, against which the deductibletemporary difference can be utilised.Insignificant deferred tax receivables are not recognised.InventoriesAn inventory unit of materials is initially recognised at cost, which comprises: its purchase price, import duties and other directlyattributable costs of acquisition. The purchase price is reduced by any discounts received.The moving average price method is applied to recognise declining quantities of inventories.The Company implements write-downs of inventories if the sale thereof is completely terminated or if they are unmarketable.ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORT92If the carrying amount exceeds the historical cost of an item of inventories, a revaluation of inventories is carried out at the year-end.Short–term investmentsIn accordance with its policy the Company as a rule invests surplus cash in deposits or debt securities or deposits with first-classbanks domiciled in the Republic of Slovenia, in state securities or its own securities.Short-term financial investments are initially recognised at cost, i.e. the amount of money invested. A revaluation of short-termfinancial investments to fair value is carried out during and at the end of the business year with the established difference postedunder financial revenue or financial expenses.Foreign currency-denominated short-term financial investments are translated into the national currency on the date they are incurredusing 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 receivablesfrom operations on foreign account, interest receivable on short-term sight deposits and financial investments, advances receivable,input VAT receivable, short-term receivables in connection to European funds and other receivables.Short-term operating receivables are initially recognised at the amounts indicated in relevant documents, provided their collectioncan be assumed. Interests are calculated in accordance with the contract on the maturity dates of the short-term receivables and onthe balance sheet date. Foreign currency-denominated short-term financial investments are translated into the national currency onthe date they are incurred using the reference exchange rate of the European Central Bank.At the balance sheet date, individual receivables are reassessed on the basis of objective evidence of their collectability. Allowancesare set up for doubtful receivables that are believed will not be settled by their due date or in their full amount. Allowances arecharged against operating expenses from revaluation in the full amount of such receivables. Receivables are derecognised when theentity no longer has control of the contractual rights that comprise those receivables. Receivables are reassessed on an individualbasis, taking into account the aspect of the necessity to form allowances.Cash and cash equivalentsCash and cash equivalents include cash in hand, cash in banks, cash in transit and call deposits. Cash in transit comprises cash thatis being transferred from the Company to the bank, but will not be credited to the Company’s account within the same day.Domestic and foreign currency denominated cash is presented separately. Cash denominated in domestic currency is stated atnominal value. Cash denominated in foreign currency is translated into national currency using the reference exchange rate of theEuropean Central Bank applicable on the date of receipt. The balance of cash denominated in foreign currency is translated into thenational currency on the last day of the business year using the reference exchange rate of the European Central Bank. Exchangerate differences arising due to the conversion increases financial revenue or financial expenses.CapitalCapital is the Company's liability to its owners which prior to the Company ceasing to operate mature into payment. The capital ofthe Company comprises: called-up capital (share capital and unregistered paid-in capital), capital reserves, revenue reserves (legaland other revenue reserves) and unappropriated net profit for the period.ANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORTUnregistered paid-in capital regards the in-kind contribution of the State which represents funds provided by the Republic of Sloveniain the past to finance NPIA and which were shown as at 1 January 2010 as a liability of DARS d.d. to the Republic of Slovenia ora receivable of the Republic of Slovenia from DARS d.d., decreased by the value of land on 1 January 2010. As at 31 December 2010unregistered paid-in capital was disclosed in the balance sheet as the capital was only entered into the court register on 31 March2011.93Capital reserves of the Company comprise the value of real assets transferred by the Republic of Slovenia to the Company upon itstransformation for the purpose of motorway operation and maintenance, and the general capital revaluation adjustment, which wastransferred to capital reserves on 1 January 2006 as well as a surplus of assets which represent the difference between the in-kindcontribution of the Republic of Slovenia and value of newly-issued shares of the Company.Legal reserves are set up in accordance with the Companies Act. The Company must form legal reserves in the amount of legal andcapital reserves defined in points 1 through 3 of Article 64 of CA-1 which must amount to at least 10 percent of the Company's sharecapital. If the total of the legal and capital reserves defined in points 1 through 3 of Article 64 of the Companies Act do not attain a 10percent share of the Company's share capital in the business year five percent of the net profit must be allocated to legal reserves,reduced by the amount used for covering losses from previous periods in the balance sheet. .Other revenue reserves comprise non-nominal capital and are increased annually through the appropriation of 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 obligating past events and are expected to be settledin a period that cannot be defined with certainty, but a reliable estimate can be made of the amount of obligations. Long-term provisionsare set up for accrued costs or expenses and are decreased by the amounts of costs or expenses for which they were formedin accordance with the plan.Long-term accrued costs and deferred revenue comprise deferred revenue expected to cover estimated expenses in a period ofmore than one year.The Company also manages earmarked grants for the acquisition of fixed assets intended for covering amortisation costs of fixedassets acquired in this way under long-term deferred revenue which when used are transferred to operating revenue.In accordance with SAS the Company formed long-term provisions for retirement benefits and jubilee premiums based on an actuarialcalculation.Long-term provisions for long-term accrued costs are also set up with regard to the possible unfavourable outcome of lawsuits relatedto motorway construction, reconstruction, operation and maintenance, as well as labour lawsuits. Provisions for lawsuits areformed on the basis of an estimate as to the likely outcome of lawsuits and at the time when the likelihood of a negative outcomefor the Company exceeded 50 percent.Long-term provisions have also been set up in the amount co-financed by users of the ETC (electronic toll collection) system, namelythird and fourth toll class vehicles. These provisions relate to warranties granted on the sale of electronic tags. At the end of eachaccounting period, long-term provisions are restated to the present value of expenditure required to settle the liability. The warrantygranted on a ETC system tag is 1 (one) year from the date of its acceptance. 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 proportionate share of the co-financedamount taking into account the undepreciated amount of the electronic tag. The annual depreciation rate is 14.29 %. The claimof refund of a proportionate share of the co-financed amount taking into account the undepreciated amount of the electronic tag,and the return of the unused net credit actually paid are possible only on the basis of a written claim with the obligatory statement ofthe identification number (ID) and the return of the electronic tag and receipt of purchase (or payment of the co-financed amount).ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORT94Long-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 short-term financial liabilities.Long-term financial investments are initially recognised at cost indicated in relevant documents proving the receipt of funds. Foreigncurrency-denominated long-term financial investments are translated into the national currency on the date they are incurred usingthe reference exchange rate of the European Central Bank.Long-term financial liabilities denominated in foreign currency is translated into the national currency on the last day of the businessyear 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 acquisition value of fixedassets until the fixed asset for which the loan was taken out is acquired. Following the fixed asset being commissioned, the paymentof interests represents a financial expense.The Company incurs debt in its name and for its account. The liabilities arising from loans taken out are secured by a guaranteeof the Republic of Slovenia. Additional disclosures regarding long-term financial liabilities to banks prior to 1 January 2010 are presentedin the chapter Description of the Consequences of the Adoption of the Motorway Company of the Republic of Slovenia Act(MCRSA-1) on the Operations of DARS d.d.Long–term financial liabilities from bondsLong-term financial investments incurred from issued bonds are initially recognised at cost indicated in relevant documents provingthe receipt of funds.The payment of coupons from issued bonds increase the acquisition value of fixed assets until the fixed asset for which the loanwas taken out is acquired. Following the fixed asset being commissioned, the payment of interests represents a financial expense.The Company incurs debt in its name and for its account. The liabilities arising from the issued bonds are secured by a guarantee ofthe Republic of Slovenia. Additional disclosures regarding long-term financial liabilities from issued bonds prior to 1 January 2010are presented in the chapter Description of the Consequences of the Adoption of the Motorway Company of the Republic of SloveniaAct (MCRSA-1) on the Operations of DARS d.d.Long–term operating liabilitiesLong-term operating liabilities are recorded in the amount of co-financing of motorway construction by local communities, publicutility companies for the purposes of such co-financing and following the concluded construction of such objects, are transferred byDARS d.d. to individual co-financing items.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 2010 for bank loans and bonds issued for motorway construction and reconstruction andweighted interest for derivative financial instruments which were concluded to insure bank loans against changing interest andexchange rate risks.The Company discloses derivative financial instruments concluded up to 31 December 2010 in the Statement of ComprehensiveIncome. The Company uses derivative financial instruments exclusively for protecting cash flows. The Company shows the effects ofANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORTthe derivative financial instruments in financial revenue or financial expenses.95Additional disclosures regarding long-term financial liabilities to banks prior to 1 January 2010 are presented in the chapter Descriptionof the Consequences of the Adoption of the Motorway Company of the Republic of Slovenia Act (MCRSA-1) on the Operationsof DARS d.d.Short–term operating liabilitiesShort-term operating liabilities comprise short-term trade payables to suppliers, construction work contractors (including contractuallyretained amounts) and third persons, liabilities arising from purchases and damages for acquired land, liabilities to employeesand liabilities to state institution for taxes and contributions.Short-term operating receivables are initially recognised at amounts indicated in relevant documents, provided that creditors requiretheir settlement. Foreign currency-denominated liabilities are translated into national currency at the date they are incurred usingthe applicable reference exchange rate of the European Central Bank.Short-term accrued and deferred itemsDeferred revenues and accrued costs are amounts incurred, but not yet charged against an entity’s activities and they do not yetaffect its profit or loss. Deferred costs and accrued revenue comprise deferred costs of commission to vignette sales agents anddeferred costs of vignette printing, which are recognised in the amount equal to the proportionate share of each allowed amount ofrevenue from the sold vignettes.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. The payment obligation is envisaged in the next accountingperiod. They are accrued on the basis of liabilities recognised in advance.Short-term deferred revenue arises when services to be rendered in the future have already been invoiced or even paid. Short-termdeferred revenue were formed for revenue from tolls collected in the form of top-ups on electronic toll media (ETC and DARS tags)invoiced and paid in 2010 but not used in the same year. These will be recognised as deferred revenue until they have actually beenused by road users. Short-term deferred revenue also included revenue from vignettes charged in 2010, which will be valid in 2011,and from half-yearly vignettes, which will be partly or entirely valid in 2011 (a half-yearly vignette is valid six months from the date ofpurchase, and the annual vignette for 2011 is valid from 1 December 2010 until 31 January 2012).RevenueRevenue is recognised if increases in economic benefits during the accounting period are associated with increases in assets or decreasesin liabilities, and if they can be reliably measured. Revenue is recognised when it can reliably be expected that cash receiptswill flow from them to the entity unless such receipts were realised on the incurrence of revenue. Revenue is classified into operatingrevenue, financial revenue, and other revenue.Net sales revenue includes:• tolls collected,• rentals 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 alongside motorways,• revenue from telecommunications,• revenue pursuant to performance contracts,• other operating revenue.ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORT96Financial revenue comprises interest revenue and foreign exchange gains. Financial revenue is recognised, unless there is justifieddoubt as to its amount and collectability. Interest revenue is recognised on a time proportion basis taking account of the outstandingprincipal amount and the applicable interest rate.Other revenue comprises unusual items increasing profit or loss for the period (damages received, remuneration for the employmentof disabled persons above the quota, etc.).ExpensesExpenses are recognised if decreases in economic benefits during the accounting period are associated with decreases in assets orincreases in liabilities, and if they can be reliably measured. Expenses are classified into operating expenses, financial expenses andother expenses.The Company’s operating expenses comprise expenses associated with motorway construction, reconstruction, operation and maintenanceand services rendered by engineers supervising the motorway construction.Expenses comprise:• costs of materials and cost of goods sold,• costs of services (also including concession fees in 2009),• labour costs,• write-downs (disclosures connected to calculated amortisation are shown among disclosures of intangible assets and property,plant and equipment),• other operating expenses.Financial expenses comprise interest expenses, expenses from derivatives used to insure against financial risks, foreign exchangelosses and impairment of financial investments. Financial expenses are recognised when accrued, regardless of related payments.Other expenses comprise unusual items that decrease the profit or loss for the period.income taxCorporate income tax is calculated in accordance with the Corporate Income Tax Act. Income tax is payable on the taxable profitgenerated during the tax period and for 2010 comprised 20 percent.Deferred tax is intended to cover temporary differences arising between the tax base of an asset and liability and its carrying amountusing the balance sheet liability method in accordance with the valid tax rates at the time.Cash Flow StatementThe Cash Flow Statement was prepared using the indirect method (Version II) on the basis of data from the Balance Sheets as at 31December 2010 and 31 December 2009, Income Statement for 2010, and additional information required for adjustment of inflowsand outflowsThe Cash Flow Statement comprises cash flows from operating, investing and financing activities.ANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORT4 Notes to the Financial Statements4.1 NOTES TO THE BALANCE SHEET974.1.1 Intangible fixed assets and long-term deferred costs accrued revenue.Intangible assets include computer softwareMovement of intangible assets in 2010:in EUR (without cents)Intangible assetsCostBalance as at 31 December 2009 3.728.702Purchases 1.002.603Activation 0Receipts by items 0Balance as at 31 December 2010 4.731.305Revaluation adjustmentBalance as at 31 December 2009 3.101.324Amortisation and depreciation 821.620Balance as at 31 December 2010 3.922.944Current valueBalance as at 31 December 2010 627.377Balance as at 31 December 2010 808.360Major additions to intangible assets in 2010:• upgrade of the DARS d.d. Project Information System: EUR 73,400,• upgrade of the software for the electronic toll collection system (ETC): EUR 558,119,• acquisition of software for the supervision and sale of vignettes: EUR 48,462,• upgrade of software for the infrastructure support system: EUR 132,473,• upgrade of software for the road database: EUR 49,469,• upgrade of information support for KAŽIPOT II for informing and monitoring the traffic situation: EUR 12,100,• upgrade of software for the NAVISION equipment: EUR 22,826 and• upgrade of the GPS system: EUR 19,800.As at 31 December 2010, no intangible assets were pledged as security for liabilities and no signs of impairment were observed forintangible assets predominantly comprise newly-acquired intnagible assets.ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORT984.1.2 Property, plant and equipmentDARS d.d. was given building rights on land owned by the Republic of Slovenia on which motorways were constructed or commencedconstruction prior to the enforcement of MCRSA-1. The building rights which the Company obtained free-of-charge are not recordedin the financial statements for their actual value can not be reliably measured. A building right to the benefit of DARS d.d. isestablished at the moment the Republic of Slovenia acquires ownerships rights for land owned by the Republic of Slovenia on whichmotorways were constructed or commenced construction prior to the enforcement of MCRSA-1. The building right is established forthe public benefit for a period of 50 years and is an outstanding payment. Upon the cessation of the building right the Republic ofSlovenia as the owner of the land does not pay compensation to the owner of the building right. The building right is granted on thebasis of law therefore entry into the land register in accordance with Article 16 of MCRSA-1 has no effect.DARS d.d. observed the principle of giving preference to economic contents before form and has posted obtained fixed assets from1 January 2010 as defined by MCRSA-1.Pursuant to ZDARS-1 DARS d.d. transferred all assets and liabilities and among assets all property, plant and equipment which contextuallyrepresent the motorway infrastructure constructed within the scope of NPIA until the end of 2009 from among balancesheet items (Balance Sheet of Assets of the Republic of Slovenia under the Management of DARS d.d.) into its business ledgers.DARS d.d. thus based on MCRSA-1 now showed newly obtained assets with a total carrying amount of EUR 5,363,236,782. All property,plant and equipment as at 31 December 2009 shown among off balance sheet items (Balance Sheet of Assets of the Republic ofSlovenia under the Management of DARS d.d.), decreased by land transferred to the Republic of Slovenia in the total amount of EUR432,712,548. DARS d.d. posts items of property, plant and equipment from 1 January 2010 onwards pursuant to Article 25 of MCRSA-1Property, plant and equipment comprise among other things:• motorways and appertaining road infrastructure with a total carrying amount of EUR 4,974,478,748,• plant, property and equipment under construction with a value of EUR 303,526,810,• land, building and devices over which the Company acquired ownership rights pursuant to Article 14 of MCRSA-1. These include:land, buildings and devices required for performing the activity of maintaining motorways and implementing auxiliary services,and real estate acquired for the construction of motorways which have not partially or in full been used for the construction ofmotorways or the management or maintenance thereof. The value of these assets totals EUR 85,231,224.Contextually, DARS d.d. transferred all road infrastructures and short-term assets and deferred costs and accrued revenue in theamount of EUR 41,130,283 from off balance sheet items (Balance Sheet of Assets of the Republic of Slovenia under the Managementof DARS d.d.) to its balance of assets and in its liabilities balance showed financial liabilities for financing property, plant andequipment in the amount of EUR 2,947,416,930, increased by the capital increase in the amount of EUR 2,319,653,549 and otherliabilities in the amount of EUR 122,254,293. The capital increase is covered in more detail in the Notes to the Financial Statements(Section VII.4.1.10).Major acquisitions and activation of property, plant and equipment in 2010 comprised:• motorway investments: EUR 342,027,241 (including investments in progress taken over from the Republic of Slovenia as of 1January 2010),• construction of the Regional Control Centre Dragomelj, Maribor Maintenance Base and Ptuj and Logatec maintenance branches:EUR 18,217,825,• purchase of machinery, devices and connections in the amount of EUR 1,955,725,• purchase of work, cargo and trailer vehicles in the amount of EUR 2,122,120,• upgrade of the toll collection system in the amount of EUR 363,437,• purchase of office and other supplies in the amount of EUR 309,498,• purchase of computer equipment in the amount of EUR 653,989,• purchase of personal and combined vehicles in the amount of EUR 616,280.No property, plant and equipment of DARS d.d. were pledged as security for liabilities as at 31 December 2010. Loans and bondsissued for the financing of property, plant and equipment of DARS d.d. are secured by a guarantee of the Republic of SloveniaANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORTMovement of plant, property and equipment in 2010:99in EUR (withoutcents)LandMotorways(substructures,superstructures,facilities)Buildings(motorwaybases-CP,administrationbuildingin Celje,holiday units,apartments)Road infrastructureEquipmentand pieceinventoryEquipmentpermanentlydecommissionedPlant,property andequipmentunderconstructionTotalCostBalance as at31 December 2009Property, plant andequipment transferredfrom off-balance sheetitemsNew acquisitions in201029.923 0 2.338.930 0 87.122.480 968.144 703.914 91.163.39231.067.775 4.759.162.050 52.378.997 215.316.699 190.990 1.593.463 303.526.810 5.363.236.7820 0 0 0 0 0 189.713.470 189.713.470Activation 1.034.021 342.027.241 19.597.091 2.158.682 6.021.615 0 -371.103.428 -264.778Elimination in 2010/divestments, writeoffs/Balance as at31 December 20100 0 0 -3.112.987 -190.637 -1.155.602 -19.102 -4.478.32832.131.719 5.101.189.291 74.315.018 214.362.394 93.144.448 1.406.005 122.821.664 5.639.370.538RevaluationadjustmentBalance as at 31December 20090 0 889.775 0 69.477.500 953.453 0 71.320.729Amortisation in 2010 0 103.890.706 2.791.877 0 6.232.483 1.490.560 0 114.405.625Elimination in 2010/divestments, writeoffs/Balance as at31 December 20100 0 0 0 -87.932 -1.136.707 0 -1.224.6390 103.890.706 3.681.652 0 75.622.051 1.307.306 0 184.501.715Current valueBalance as at 31December 2009Balance as at31 December 201029.923 0 1.449.154 0 17.644.980 14.691 703.914 19.842.66332.131.719 4.997.298.585 70.633.366 214.362.394 17.522.397 98.699 122.821.664 5.454.868.823ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORT100An overview of the movement of plant, property and equipment in 2009 is given in continuation to facilitate information:in EUR (without cents) Land BuildingsEquipmentand pieceinventoryEquipmentpermanentlydecommissionedPlant,property andequipmentunderconstructionTotalCostBalance as at 31 December 2008 29.923 2.338.930 84.248.484 1.158.999 135.976 87.912.311Purchases in 2009 0 0 0 0 4.619.696 4.619.696Transfer of assets required for the performanceof activities under the Concession Agreementfrom the register of state-owned assets underthe management of DARS d.d. to the register ofcompany-owned assets0 0 19.100 0 0 19.100Activation 0 0 4.031.390 0 -4.051.758 -20.368Receipts by items 0 0 -1.128.856 1.128.856 0 0Elimination in 2009/divestments, write-downs/ 0 0 -47.637 -1.319.711 -1.367.348Balance as at 31 December 2009 29.923 2.338.930 87.122.480 968.144 703.914 91.163.392Revaluation adjustmentBalance as at 31 December 2008 0 793.089 63.218.517 1.117.393 0 65.129.000Investment maintenance to increase service life 0 -9.305 -2.415 0 0 -11.720Transfer of assets required for the performanceof activities under the Concession Agreementfrom the register of state-owned assets underthe management of DARS d.d. to the register ofcompany-owned assets0 0 0 0 0 0Transfer between items 0 0 -1.114.452 1.114.452 0 0Amortisation in 2009 0 105.991 7.403.118,39 17.541 0 7.526.651Elimination in 2009/divestments, write-downs/ 0 0 -27.269 -1.295.933 0 -1.323.201Balance as at 31 December 2009 0 889.775 69.477.500 953.453 0 71.320.729Current valueBalance as at 31 December 2008 29.923 1.545.841 21.029.967 41.606 135.976 22.783.313Balance as at 31 December 2009 29.923 1.449.154 17.644.980 14.691 703.914 19.842.663ANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORT4.1.3 Long–term investmentsThe long-term financial investments of DARS d.d. include a 0.04 percent stake in the company Slovenska cestna podjetja d.o.o. in theamount of EUR 964, the value of which did not change in 2010.1014.1.4 Deferred tax receivablesDeferred tax receivables were predominantly formed from provisions for retirement benefits and jubilee premiums for employees inthe amount of EUR 318.074 and from provisions for contingent claims arising from lawsuits in the amount of EUR 1,695,321.Movement of deferred tax receivables in 2010:in EUR (without cents)Balance as at 1 January 2010 469,136Change in provisions for retirement benefits and jubilee bonuses -12,193Change in provisions for redundancies 10,191Change in provisions for contingent claims 1,604,281Change in provisions for ETC tags 9,995Balance as at 31 December 2010 2,081,410Deferred tax receivables are the amounts of income tax recoverable in future periods4.1.4 InventoriesInventories comprise inventories of materials, spare parts, piece inventory and packaging. Inventories increased by 7% in comparisonto the figure at 31 December 2009. Inventories of materials with an 85 percent share represent the major share in the structureof inventories, whereas inventories of spreading materials account for 48 % and inventories of vignettes for 14 % of the total inventoriesof materials.in EUR (without cents) 31 Dec 2010 Share 31 Dec 2009 IndexMaterials 1,706,273 85% 1,620,852 105Spare parts 109,674 5% 98,164 112Piece inventory and packaging 198,467 10% 158,080 126Total 2.014.414 100 % 1.877.096 107The sale of vignettes for 2010 for personal and motor vehicles concluded on 30 November 2010. In accordance with SAS 4.41 theinventory of vignettes for 2010 were written-off and charged against operating expenses from the revaluation in the amount of EUR116,164 which represents the amount of cost of the vignettes. In 2010, the write-downs of obsolete inventories of other materialsamounted to EUR 5,853.ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORT102No significant surpluses or deficits were found at the semi-annual and annual inventory taking of vignettes.As at 31 December 2010 no items of inventories of DARS d.d. were pledged as security for liabilities. The book value of inventoriesdoes not exceed their recoverable value. The inventories of the Company represent current inventories.The inventories did not show signs of impairment therefore no impairment was implemented.4.1.6 Short-term financial investments in othersAs at 31 December 2010, short-term financial investments in others include:• short-term deposits with banks in the amount of EUR 104,041,121.42, with an average maturity of 66 days and average weightedinterest rate of 2.16%,• a short-term over-night deposit with a bank in the amount of EUR 542,520.91, with an interest rate of 0.42%.Short-term investments are not exposed to credit risk, or namely the risk of loss due to the counterparty’s failure to meet its obligationsis minimal, because the Company invests its surplus liquid funds in government securities and debt securities or in depositswith first class banks domiciled in the Republic of Slovenia.4.1.7 Short–term operating receivablesin EUR (without cents) 31 Dec 2010 Share 31 Dec 2009 IndexShort–term trade receivables: 11,117,204 27% 9,800,591 113- toll receivables 8,490,326 21% 7,483,514 113- receivables from the use of motorway service areas 390,425 1% 814,882 48- receivables from motorway closures 704,114 2% 1,025,908 69- other short-term trade receivables 1,532,339 4% 476,288 322Short–term operating receivables due from others: 29,375,577 73% 12,892,875 228- advances receivable for operating current assets 1,238 0% 2,778 45- short-term receivables from operations for foreign account 26,583,574 66% 11,433,788 233- short-term receivables from financial revenue 226,034 1% 76,952 294- input VAT receivable 690,086 2% 763,037 90- other short-term receivables due from state institutions 86,900 0% 98,399 88- other short-term receivables 1,787,745 4% 517,921 345Total 40,492,781 100% 22,693,466 178The majority portion, or a 66% share of short-term operating receivables, represents receivables from operations for foreign accountto the Republic of Slovenia for transactions from Article 4 of ZDARS-1 and fees from performance contracts in the amount ofEUR 14,603,246 and receivables due from domestic commission agents and foreign sales agent in the amount of EUR 11,980,328.Twenty-one percent of all short-term trade receivables represent trade receivables for tolls while the remainder comprises othershort-term receivables.ANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORTPursuant to Article 4 of MCRSA-1, DARS d.d. performs transactions on behalf and for the account of the State and discloses them inits business ledgers as transactions for foreign account. This regards tasks connected to spatial planning and arrangement of motorwaysand the acquisition of real estate required for the construction of motorways which the Company performs in accordancewith performance contracts. DARS d.d. records receivables due from the Republic of Slovenia for implemented transactions. Thefunds for such transactions are guaranteed from the budget of the Republic of Slovenia in accordance with Article 10 of MCRSA-1.103At the proposal of the commission for receivables inventory taking, on 31 December 2010 DARS d.d. wrote-down unrecoverable tradereceivables in the amount of EUR 434,470.Breakdown of short-term trade receivables by maturity:in EUR (without cents) Unmatured Up to 60 days Over 60 days TotalShort-term receivables from operations for foreign account 25,752,091 831,483 0 26,583,574Short–term trade receivables 9,819,889 558,342 738,973 11,117,204As at 31 December 2010 no receivables were pledged as security for liabilities. Short-term operating receivables of the Company arenot secured and represent the Company’s current receivables.Receivables are assessed on an individual basis, taking into account the aspect of the necessity to form allowances for receivables.The Company did not implement any revaluation adjustments of receivables in 2010.4.1.8 Cash and cash equivalentsin EUR (without cents) 31. 12. 2010 Share 31. 12. 2009 IndexCash in banks 788,939 15% 628,596 126Call deposits 4,000,000 76% 5,750,000 70Cash in hand 1,846 0% 1,928 96Cash in toll booths 305,180 6% 325,180 94Cash in transit 139,819 3% 266,753 52Total cash and cash equivalents 5,235,784 100% 6,972,457 75The item 'cash in transit' comprises tolls not yet put in the Company’s transaction account. Upon the annual inventory taking of cashin transit from collected tolls as at 30 November 2010, the Company reconciled the balance in the books of account with the actualbalance by the amount of established deficit of EUR 1,321.4.1.9 Short-term deferred costs and accrued revenueDeferred costs and accrued revenue amounting to EUR 1,132,672 comprise short-term deferred costs that will be charged againstprofit or loss in the future accounting periods.Short-term deferred costs include short-term deferred costs of commission fee to sales agents based on the value of vignettes soldin the amount of EUR 396,637 and short-term deferred costs for the lease of Microsoft licensed software in the amount of EUR251,344.ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORT1044.1.10 CapitalThe movement in equity is shown in the Statement of Changes in Equity for the period from 1 January 2010 to 31 December 2010 inwhich the reasons for changes in equity items are evident. Total capital comprises a part of the Company's net worth.Capital reflects owner financing of the Company and represents the Company's liabilities to its owners. It is determined by both theamounts invested in the Company by owners and by amounts occurring in the Company's operation.The share capital of DARS d.d. in the 2010 fiscal year increased in accordance with MCRSA-1 through a new in-kind contribution bythe Republic of Slovenia. The subject of the in-kind distribution is, in accordance with the Decision of the Government of the Republicof Slovenia No. 47600-3/2011/6 of 17 February 2011 the difference between the receivables of the Republic of Slovenia towards DARSd.d. arising from assets under management on 1 January 2010 in the amount of EUR 2,752,366,097.22 and the book value of landowned by the Republic of Slovenia on 1 January 2010 on which motorways were constructed or commenced construction prior tothe enforcement of MCRSA-1, amounting to EUR 432,712,548.13. In accordance with the provisions of ZDARS-1 which came into forceon 4 December 2010, the entry of a capital increase in the court register if of a declaratory nature.According to MCRSA-1, DARS d.d. received receivables of the Republic of Slovenia towards DARS d.d. as a in-kind contribution whichcontextually represents the transfer of assets (i.e. infrastructures constructed up to the end of 2009) and liabilities from off balancesheet items (Balance Sheet of Assets of the Republic of Slovenia under the Management of DARS d.d.) to the business ledgers ofDARS d.d.The increased share capital of DARS d.d. is defined in the Articles of Association of the Company and was registered at court on 31March 2011. Pursuant to ZDARS-1, the in-kind contribution of the Republic of Slovenia was entered in the court register based on adecision of the government without the assessment or audit of its worth.As at 31 December 2010 the increased share capital in the amount of EUR 2,319,653,549 is shown in the balance sheet of the Companyas unregistered paid-in capital in the amount of EUR 2,319,653,522. The Company issued 55,587,192 new ordinary registeredno-par shares whose owner is the Republic of Slovenia for the increase in share capital.The book value of the shares as at 31 December 2010 comprised EUR 43.22. It is calculated as a ratio between the total value ofcapital and number of shares.The shares give their holders the full right to participate in the management of the Company, the right to a profit share (dividend),and the right to an adequate part of the remainder of assets upon liquidation or bankruptcy of the Company.Pursuant to the resolution of the General Meeting of DARS d.d. the capital of the Company decreased by the payment of dividendsin the 2009 fiscal year in the amount of EUR 2,950,000 and pursuant to the decisions of the Management and Supervisory Boardsof the Company, increased due to the formation of legal reserves in the amount of EUR 1,523,168 and other revenue reserves in theamount of EUR 14,470,098.4.1.11 Provisions for long–term accrued costs and deferred revenueThe Company formed long-term deferred revenue in 2010 for EU funds received for the preparation of spatial and project documentationand motorway construction or tasks related to them (improving traffic safety – construction of traffic control and managementsystems). The Company obtained the assets within the EU Cohesion Fund, TEN-T projects and EasyWay programme.In accordance with SAS the Company formed long-term provisions for retirement benefits and jubilee premiums based on an actuarialcalculation. The actuarial calculation of 31 December 2010 was performed for each employee so that it took into account thecosts of retirement benefits appertaining to them on the basis of employment contracts and the cost of all expected jubilee premiumsfor the total service period until retirement.The Company jointed the collective voluntary supplementary pension insurance scheme in 2006. In accordance with the contractbetween the Company and labour unions, all Company employees were entitled to join the scheme, except for employees who fulfil-ANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORTled the age conditions on 31 December 2006, namely: women aged a maximum of 50 years of age and men a maximum of 55 years.The employer will pay to these employees a lump sum equal to the interest-free premiums it would have to pay on their behalf hadthey been included in the pension scheme The Company formed long-term provisions for this reason.105In previous years the Company set up long-term provisions for long-term accrued costs related to employment relationships thatwould arise upon the transition from the electronic toll collection to the free-flow traffic system. The electronic toll collection systemwhere motorway users paid fees for use of motorways according to the distance travelled principle is the final vision and objectiveof the toll collection system in the Republic of Slovenia. The Government of the Republic of Slovenia adopted the Action Plan for theIntroduction of ETS and FTF on 26 November 2009. The Action Plan defined activities which would enable the implementation ofthe free-flow electronic toll collection system for vehicles over 3,5 tons in 2012 and for personal vehicles in 2014. A reassessment ofthe required long-term provisions for anticipated costs of restructuring of the Tolling Implementation Division was carried out on 31December 2010 and based on the Restructuring Plan, the Company adopted a resolution on the reconciliation of long-term provisionsformed for the purchase of the insurance period for redundant employees and a portion of provisions for severance paymentsfor 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 ETC system, namely third and fourth tollclass vehicles. These provisions relate to warranties granted on the sale of electronic tags. At the end of each accounting period,long-term provisions are restated to the present value of expenditure required to settle the liability. The warranty granted on a ETCsystem tag is 1 (one) year from the date of its acceptance. Its useful life is 7 years. If an electronic tag is purchased, used and thenreturned undamaged within its useful life, the user is entitled to the refund of the proportionate share of the co-financed amounttaking into account the undepreciated amount of the electronic tag. The annual depreciation rate is 14.29 %. The claim of refundof a proportionate share of the co-financed amount taking into account the undepreciated amount of the electronic tag, and thereturn of the unused net 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 the co-financed amount).Movement of long-term provisions and accrued costs and deferred revenue in 2010:in EUR (without cents)Balance as at 1Jan 2010Use in 2010Reversal in2010Additionalcreation in2010Balance as at31 December2010Claims related to motorway operation and maintenance 470,750 54,926 415,237 7,314 7,902Claims related to employment 10,613 0 5,328 20,083 25,368Claims related to construction and reconstruction 0 0 0 16,919,947 16,919,947Redundancies due to the change in the toll system 212,864 0 0 101,910 314,774Provisions for retirement benefits 1,285,064 127,929 0 188,141 1,345,276Provisions for jubilee premiums 595,518 77,607 0 111,445 629,355Provisions for voluntary supplementary pension insurance 103,860 45,804 0 30,210 88,265Depreciation of holiday facilities and apartments 231,596 10,838 0 0 220,758Return of ETC tags 150,617 16,458 28,057 144,467 250,569Long-term accruals and deferrals – lease of optic fibres 640,394 49,695 0 0 590,700Cashed-in guarantees 1,140,927 104,667 0 1,749,278 2,785,538State subsidies received 14,371,089 9,177,133 0 57,164,310 62,358,266Donations received 500 500 0 0 0Total 19,213,791 9,665,557 448,622 76,437,105 85,536,717ANNUAL REPORT 2010 DARS d.d

BUSINESS REPORT106Provisions and long-term accrued costs and deferred revenue are formed for the following purposes:The Company shows long-termprovisions for long-term accrued costs set up with regard to the possible unfavourable outcome of lawsuits related to motorwayoperation and maintenance in the amount of EUR 7,902, labour lawsuits in the amount of EUR 25,368 and lawsuits related to motorwayconstruction and reconstruction in the amount of EUR 16,919,947. Provisions for lawsuits related to motorway constructionand reconstruction were all formed in 2010 and until 31 December 2009 were accounted for in the Balance Sheet of the Republic ofSlovenia for assets under the management of DARS d.d.• During 2005-2007 provisions were formed and charged against long-term accrued costs for the purchase of the insurance periodand severance pay for employees which would become redundant following the transition from the electronic toll collection tofree-flow traffic system. The Government of the Republic of Slovenia adopted the Action Plan for the Introduction of ETS andFTF on 26 November 2009. The Action Plan defined activities which would enable the implementation of the free-flow electronictoll collection system for vehicles over 3,5 t in 2012 and for personal vehicles in 2014. A reassessment of the required long-termprovisions for anticipated costs of restructuring of the Tolling Implementation Division was carried out on 31 December 2010 andbased on the Restructuring Plan, the Company formed provisions for redundant employees in the amount of EUR 314,774.• Based on an actuarial calculation provisions were set up on 31 December 2010 for jubilee premiums in the amount of EUR629,355.• Provisions in the amount of EUR 88,265 for retirement benefits to employees not included in the pension scheme of collectivesupplementary pension insurance under the agreement between trade unions and the Company.• In previous years long-term accrued costs and deferred revenue were set up from grant funds in the amount of the acquisitionvalues of holiday facilities and apartments which serve to cover the costs of depreciation of the holiday facilities with furnishingsand apartments throughout their service lives. In 2010 the denoted provisions decreased by the costs of amortisation in theamount of EUR 10,838.• Provisions in the amount of EUR 250,569 (the buyers of ETC tags are entitled to return ETC tags within seven years from thedate of purchase) were formed for settlement of contingent liabilities arising from the return of purchase money upon a possiblereturn.• The Company also shows long-term deferred revenue from advance purchases of optic fibres by users in the amount of EUR590,700 among long-term accrued costs and deferred revenue.• The Company formed long-term accrued costs and deferred revenue for assets arising from the cash in of the performanceguarantee of SCT d.d. for poorly implemented work on the fire protection in the Šentvid tunnel gallery.• As at 31 December 2010 the Company discloses long-term accrued costs and deferred revenue in the total amount of EUR62,358,266 for State funds received for the acquisition of property, plant and equipment of the Company. The increase in 2010is the result of an inflow of funds from the EU Cohesion Fund, TEN-T projects and EasyWay programme. Long-term accrued costsand deferred revenue serve to cover costs that arise. EUR 9,177,133 of deferred and accrued costs and revenue were used in 2010.4.1.12 Long-term financial liabilitiesThe Company obtains loans on the international and domestic financial markets for its operational needs. The aim of the loans isto finance motorway construction and reconstruction. From 1 January 2010 onwards the Company also shows long-term financialliabilities in the balance sheet of DARS d.d. Prior to this date the denoted liabilities were shown as off balance sheet items. All loanstaken out are secured by a guarantee of the Republic of Slovenia.The interest rates and manner of calculating interests for received loans are contractually defined and represent a business secret.The weighted annual interest rate for the total loan amount of DARS d.d. amounted to 2.33% on 31 December 2010. As at 31 December2010 the annual interest rate of total loans of DARS d.d. ranged from 1.12 and 5.27%.Long-term financial liabilities regard in their total amount motorway construction and reconstruction.ANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORTin EUR (without cents) 31 Dec 2010 Share107Long-term loans acquired from domestic banks 989,802,613 34%Long-term loans acquired from foreign banks 1,737,074,238 59%Long-term loans acquired from foreign entities 44,589,374 2%Long-term bonds issued 160,364,547 5%Total 2,931,830,772 100%Long-term financial liabilities by maturity:in EUR (without cents) 31 Dec 2010 ShareLong-term financial liabilities with a maturity of up to 5 years 799,887,762 27%Long-term financial liabilities with a maturity over 5 years 2,131,943,010 73%Total 2,931,830,772 100%Movement of long-term financial liabilities in 2010:Long-term financial liabilitiesBalance as at 31Decreases inDecember 2009 Increases in 2010 2010Balance as at 31December 2010European Investment Bank 0 1,049,359,867 42,994,000 1,006,365,867Nova Ljubljanska banka 0 390,000,000 0 390,000,000Kreditanstalt für Wiederaufbau 0 390,991,721 5,283,350 385,708,371Consortium of Slovenian Banks 0 387,285,225 4,962,514 382,322,711Depfa Bank 0 225,000,000 0 225,000,000Unicredit Bank Slovenia 0 141,197,964 7,501,252 133,696,712Kommunalkredit 0 70,000,000 0 70,000,000Hypo Alpe Adria Bank 0 60,866,378 416,521 60,449,857BIIS 0 86,000,000 36,000,000 50,000,000Autovie Venete S.p.A. 0 47,774,329 3,184,955 44,589,374Banka Koper 0 25,666,667 2,333,333 23,333,333SKB 0 36,000,000 36,000,000 0Bonds 0 160,364,547 0 160,364,547Total 0 3,070,506,697 138,675,925 2,931,830,772ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORT1084.1.13 Long–term financial liabilities to banksBalance of the long-term principal from bank loans by individual credit institution:in EUR (without cents)Credit institution 31 Dec 2010 ShareConsortium of Slovenian banks 382,322,711 14%Hypo Alpe Adria Bank 60,449,857 2%Unicredit Bank Slovenia 133,696,712 5%Banka Koper 23,333,333 1%NLB 390,000,000 14%European Investment Bank 1,006,365,867 36%Kreditanstalt für Wiederaufbau 385,708,371 14%Depfa Bank 225,000,000 8%Avtovie Venete S.p.A. 44,589,374 2%SKB BIIS 0 0%BIIS 50,000,000 2%Kommunalkredit Austria AG 70,000,000 3%Total 2,771,466,225 100%a) Loans from the Consortium of Slovenian banksDARS d.d. took out seven loans from the consortium of domestic banks during the period 1996-2004.Long-term liabilities to the consortium of banks and maturity dates:T ype Repayment period in EUR (without cents)I from 2002 to 2016 110,110,317II from 2004 to 2019 41,604,887III from 2007 to 2019 66,589,454IV from 2008 to 2020 33,063,964V from 2007 to 2020 37,914,529VI from 2009 to 2021 31,641,649VII from 2012 to 2024 61,397,911Total 382,322,711b) Loans from Hypo Alpe Adria BankThe Company took out three loans from Hypo Alpe Adria Bank in 2003, 2004 and 2005.Long-term liabilities to Hypo Alpe Adria Bank and maturity dates:ANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORTT ype Repayment period in EUR (without cents)109I from 2011 to 2023 24,574,736II from 2012 to 2024 15,010,491III from 2014 to 2023 20,864,630Total 60,449,857c) Loans from Unicredit bank SloveniaThe Company took out three loans from Unicredit banka in 2005, 2006 and 2009. The loan taken out in 2006 was intended forrefinancing and early repayment of loans taken out with the bank Kreditanstalt für Wiederaufbau.Long-term liabilities to Unicredit banka and maturity dates:T ype Repayment period in EUR (without cents)I from 2011 to 2023 20,030,045II from 2007 to 2021 66,666,667III 2014 47,000,000Total 133,696,712d) Loan from Banka KoperThe Company took out a loan with Banka Koper in 2006. The loan taken out was intended for refinancing and early repayment ofloans taken out with the bank Kreditanstalt für Wiederaufbau.T ype Repayment period in EUR (without cents)I from 2007 to 2021 23,333,333Total 23,333,333e) Loans from NLBDARS d.d. took out two loans with NLB in 2007 and 2008 which were entirely used up for the financing of motorway construction.Long-term liabilities to NLB and maturity dates:T ype Repayment period in EUR (without cents)I from 2012 to 2027 245,000,000II from 2015 to 2027 145,000,000Total 390,000,000ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORT110f) Loans from the European Investment Bank (EIB)The loans from the European Investment Bank were taken out during the period 1994-2006 with EUR 42,994,000 of the amountrepaid in 2010. The remainder of the loans fall due between 2014 and 2037.Long-term liabilities to the European Investment Bank and maturity dates:T ype Repayment period in EUR (without cents)A, B, C from 2000 to 2014,2015, 2016 24,199,200II from 2003 to 2018 56,333,333III from 2004 to 2019 87,500,000IV from 2005 to 2019 85,333,333V from 2007 to 2027 93,000,000VI from 2012 to 2029 110,000,000VII from 2014 to 2037 250,000,000VIII from 2015 to 2033 300,000,000Total 1,006,365,867g) Loan from Kreditanstalt für Wiederaufbau (KfW)The first loan from Kreditanstalt für Wiederaufbau was taken out in 1997. DARS d.d. took out an additional three loans from the bankKreditanstalt für Wiederaufbau in 2008 and 2009 which were also earmarked for financing motorway construction. The amount ofEUR 5,283,350 was repaid in 2010 for the loans taken out from Kreditanstalt für Wiederaufbau (KfW I).Long-term liabilities to Unicredit banka and Kreditanstalt für Wiederaufbau repayment dates:T ype Repayment period in EUR (without cents)I from 2005 to 2014 13,208,371II from 2013 to 2029 267,500,000II 2014 55,000,000II 2014 50,000,000Total 385,708,371h) Loans from Depfa Bank (DEPFA)The Company took out two loans totalling EUR 225,000,000 from Depfa Bank in 2006.Long-term liabilities to Depfa Bank and repayment dates:T ype Repayment period in EUR (without cents)I from 2014 to 2024 75,000,000II from 2013 to 2021 150,000,000Total 225,000,000ANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORTi) Loan from Autovie Venete (AVV)111The loan obtained by DARS d.d. from Autovie Venete was obtained on the basis of a memorandum of consent between the Governmentof the Republic of Slovenia and the Government of the Republic of Italy for the construction of motorway facilities requiredfor connecting the Slovene motorway network with the Italian network. The loan was taken out in 2000.Long-term liabilities to AVV and repayment dates:T ype Repayment period in EUR (without cents)I from 2011 to 2025 44,589,374Total 44,589,374j) Loan from SKB and Banca Infrastrutture Innovazione e Sviluppo (BIIS)Due to an available surplus of funds, in 2010 DARS d.d. decided to prematurely repay in full the syndicated loan in the amount of EUR72,000,000 taken out with SKB-BIIS.k) Loan from Banca Infrastrutture Innovazione e Sviluppo (BIIS)In 2009 DARS d.d. took out a loan in the amount of EUR 50,000,000 with the bank BIIS which was fully depleted in 2010.Long-term liabilities to BIIS and repayment dates:T ype Repayment period in EUR (without cents)I 2014 50,000,000Total 50,000,000l) Loan from Kommunalkredit Austria AG (Kommunalkredit)In 2009 DARS d.d. took out a loan in the amount of EUR 50,000,000 with the bank BIIS which was fully depleted in 2010.Long-term liabilities to BIIS and repayment dates:T ype Repayment period in EUR (without cents)I from 2015 to 2020 70,000,000Skupaj 70,000,000ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORT1124.1.14 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 liabilitiesarising from the issued bonds are secured by a guarantee of the Republic of Slovenia.Issue Maturity Size of issuein EUR (without cents) 2024 56,042,047DRS2 2025 61,758,920DRS3 2020 42,563,580Total 160,364,547a) DARS bonds of 1st issue (DRS1)In 2004, the bonds of first issue, designated DRS1, were issued in the aggregate nominal amount of EUR 56,042,047. The principal isdue in its total amount in 2024. The annual coupon rate is 5.1%. The bonds are traded on the Ljubljana Stock Exchange.b) DARS bonds of 2nd issue (DRS2)In 2005, the bonds of second issue, designated DRS2, were issued in the aggregate nominal amount of EUR 61,758,920. The principalis due in its total amount in 2025. The annual coupon rate is 4.5%. The bonds are traded on the Ljubljana Stock Exchange.c) DARS bonds of 3rd issue (DRS3)In 2005, the bonds of third issue, designated DRS3, were issued in the aggregate nominal amount of EUR 42,563,580. The principalis due in its total amount in 2020. The annual coupon rate is 4.0%. The bonds are traded on the Ljubljana Stock Exchange.4.1.15 Long–term operating liabilitiesLong-term operating liabilities include liabilities from the co-financing of accompanying infrastructure (predominantly municipal)constructed within the scope of the motorway infrastructure and do not represent motorways. The Company must repay liabilities inthe amount of EUR 4,027,801 to the co-financers following the construction of the accompanying infrastructure.ANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORT4.1.16 Short–term financial liabilitiesShort-term liabilities represent the short-term portion of long-term financial liabilities maturing in the following year and interestdue from bank loans, bonds issued and derivative financial instruments.113Short-term financial liabilities for bank loans for the acquisition of plant, property and equipment comprise:a. a portion of the principal of long-term loans maturing into payment in 2011in EUR (without cents)Lender 31 Dec 2010 31 Dec 2009European 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 6,000,000Kreditanstalt für Wiederaufbau I 5,283,350 5,283,350Autovie Venete 3,184,955 0Bank Consortium I 2,412,775 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 659,201 329,601Hypo Alpe Adria I 416,521 0Unicredit bank I 834,585 0Unicredit bank II 6,666,667 6,666,667Banka Koper 2,333,333 2,333,333Total principal 66,675,925 61,910,263b. other short-term financial liabilities from granted loans or issued bonds as at 31 December 2010in EUR (without cents) 31 Dec 2010 31 Dec 2009Interest payable on long-term loans 10,716,825 26,324,641Interest payable on bonds 3,416,071 7,339,724Interest payable on derivative financial instruments 315,401 1,832,791Other financial liabilities 1,344 9,376Liabilities from derivative financial instruments 7,232,011 0Total 21,681,652 35,506,531ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORT114Short-term interest payable includes interest accrued by 31 December 2010 and interest accounted for as at 31 December 2010, whichrepresents the costs for 2011. They are short-term deferred costs. The annual interest rate and manner of calculating interests forconcluded transactions are contractually defined and as at 31 December 2010 ranged within the interval 1.12 to 5.27%.To protect itself against interest rate risk, in previous years the Company in accordance with its active risk management policy in thefinancial area decided to decrease its exposure to the risk of changed interest rates on the market. On 31 December 2010 the share ofexposure to variable interest rates represented 58% of the value of its debt portfolio while exposure to fixed interest rates attaineda 40% share with the remaining 2% comprising interest-free loans.Liabilities from derivative financial instruments in the amount of EUR 7,232,011 regard liabilities arising from the valuation of derivativefinancial instruments on 31 December 2010.Interest rate hedge of EUR 20 millionDARS d.d. concluded an interest rate hedge in the amount of EUR 20,000,000 with a 3-year maturity in 2008. The deal was concludedto partly secure a loan from KfW. The loan is secured for a period of 3 years with a fixed interest rate.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 concludedto partly secure a loan from Nova Ljubljanska banka. The loan is secured for a period of 2 years with a fixed interest rate and theoption of extension for a further 3 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 concludedto partly secure a loan from Unicredit banka Slovenije. The loan is secured for a period of 3 years with a fixed interest rate andthe option of extension for a further 7 years.4.1.17 Short–term operating liabilitiesin EUR (without cents) 31 Dec 2010 Share 31 Dec 2009 IndexShort–term trade payables 46,912,213 61% 11,692,032 401Short-term receivables for advances 38,185 0% 57,790 66Short-term liabilities to employees 2,199,215 3% 2,119,597 104Short-term liabilities to the State: 19,371,117 25% 5,440,364 356- corporate income tax liability 7,318,462 9% -285,992 -2.559- VAT liability 4,902,676 6% 4,793,061 102- liabilities for contributions of the payer 329,948 0% 339,167 97- other liabilities to the State 6,820,030 9% 594,127 1.148Short-term liabilities to others 8,883,032 11% 126,975 6.996Total 77,403,761 100% 19,436,759 398Short-term liabilities in 2010 increased by 298% in comparison with the previous year, predominantly since DARS d.d. disclosed aportion of short-term operating liabilities which arose from the construction of the NPIA among the assets of the balance sheet ofthe Republic of Slovenia under the management of DARS d.d. Almost the entire amount of short-term operating liabilities have notyet matured.ANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORTThe greatest share (61%) represents trade payables and regard unpaid liabilities for the performance and invoicing of work bydomestic and foreign suppliers in the construction of motorways (including the contractual retained amounts), liabilities regardingcompensation paid for the acquisition of land for transactions on behalf and for the account of the Republic of Slovenia, operatingliabilities from the management and maintenance of motorways and other short-term operating liabilities.115Contractually retained funds represents funds retained as a performance guarantee and until the fulfilment of all contractual obligationsby the contractor (work acceptance, remedying of all deficiencies, and handover of guarantees for the remedy of defectsduring the warrantee period) are retained in the amount of a maximum of 5% of the contractual value. Retained funds of concludedcontracts with contractors belong to the contractors and are remitted once the contractor fulfils the contractual obligation, deliveringthe investor the required documentation. As at 31 December 2010, payables for retained funds amounted to EUR 21,684,238 andrepresented a 46 percent share of total trade payables.Overview of short-term trade payables:in EUR (without cents) Unmatured Up to 60 days Over 60 days TotalShort–term trade payables (current liabilities) 25,201,715 25,736 524 25,227,974Short–term trade payables (retained amounts) 21,684,238 0 0 21,684,238Trade payables as at 31 December 2010:in EUR (without cents) 31 Dec 2010 Share in %SCT, d.d. 9,955,341 21CITY MUNICIPALITY OF LJUBLJANA 6,013,842 13PRIMORJE d.d. 3,998,412 9CGP, CESTNO IN GRADBENO PODJETJE, D.D. 2,407,718 5CESTNO PODJETJE LJUBLJANA D.D. 1,986,339 4DDC svetovanje inženiring, d.o.o. 1,694,162 4CPM, d.d. 1,556,732 3CM Celje, d.d. 1,398,238 3SGP POMGRAD d.d. 1,265,104 3PETROL d.d., Ljubljana 1,226,099 3Other suppliers 15,410,225 33Total 46,912,213 100The Company’s liabilities to employees predominantly represent calculated December salaries and compensation for salaries andwages and reimbursement of costs to employees in connection to work, paid out in January 2011.ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORT1164.1.18 Short-term accrued costs and deferred revenuein EUR (without cents) 31 Dec 2010 Share 31 Dec 2009 IndexShort-term accrued costs 427,253 2% 433,253 99Short-term deferred revenue 21,054,194 98% 19,723,130 107Total 21,481,447 100% 20,156,383 107Liabilities of the Company include accrued costs or expenses related to accrued costs for the audit of the financial statements of2010 in the amount of EUR 29,500, an actuarial calculation of provisions for jubilee premiums and severance payments on 31 December2010 in the amount of EUR 1000 and accrued costs for the business success of the Management Board and employees inthe amount of EUR 396,753.Short-term deferred revenue arises when services to be rendered in the future have already been invoiced or even paid. Short-termdeferred revenue were formed for revenue from tolls collected in the form of top-ups on electronic toll media (ETC and DARS tags)invoiced and paid in 2010 but not used in the same year. These will be recognised as deferred revenue until they have actually beenused by road users. Short-term deferred revenue also included revenue from vignettes charged in 2010, which will be valid in 2011,and from half-yearly vignettes, which will be partly or entirely valid in 2011 (a half-yearly vignette is valid six months from the date ofpurchase, and the annual vignette for 2011 is valid from 1 December 20010 until 31 January 2012).Short-term deferred revenue comprises:• revenue from vignettes charged which will be valid in 2011, and from half-yearly vignettes, which will be partly or entirely valid in2011 (a half-yearly vignette is valid six months from the date of purchase in the total amount of EUR 10,918,829 and the annualvignette for 2011 is valid from 1 December 20010 until 31 January 2012).• revenue from the credit on electronic prepaid toll media (DARS cards, ABC tags), which was charged and paid in 2010 but notraverses were made in the same year, in the amount of EUR 6,085,996. Revenue will be deferred until traverses are made by theusers of the service,• revenue from compensation under the Agreement on the Performance of Contracts for 2009 in the amount of EUR 3,989,637,because a portion of compensation under the Agreement on the Performance of Contracts has already been charged andpaid, but the service has not yet been performed or the Ministry of Transport had not yet confirmed the letter of credit forcompensation according to the Agreement on the Performance of Contracts. Final settlement of compensation is made on thebasis of the value of works actually carried out in the Report of the National Assembly on the Realisation of the Annual Plan ofDevelopment and Reconstruction of Motorways;• other short-term deferred revenue in the amount of EUR 59,732.Off balance sheet itemsThe Company recorded a total of EUR 266,537,448 in off balance sheet items. The amount of EUR 264.448.924 represents contingentcash or receivables from encashment of performance guarantees or warranties or other securities, performance guaranteesand warrantees of which EUR 244,875,104 regard the construction and reconstruction of motorways and EUR 19,573,820 the managementand maintenance of motorways.EUR 1,828,704 represent contingent liabilities towards municipalities based on unjustified calculations and collection of fees for useof building land, together with default interest. The Constitutional Court of the Republic of Slovenia at the request of DARS d.d. hasalready dismissed several municipal ordinances through Decision U-I-361-/2002-11 (Official Gazette of the Republic of Slovenia, No.37/2004) and repealed the decision of the Tax Administration of the Republic of Slovenia.The value of the inventories of vignettes for the use of toll roads in the Republic of Austria which were also sold by DARS d.d. amountedto EUR 259,819.ANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORT4.2 NOTES TO THE STATEMENT OF COMPREHENSIVE INCOME1174.2.1 Net sales revenuein EUR (without cents) 2010 Share 2009 Index 2010/2009Revenue from tolls: 290,095,679 96% 237,967,352 122- revenue from vignettes 130,934,829 - 107,941,372 -- other revenue from tolls 159,160,851 - 130,025,980 -Revenue from leases 6,518,711 2% 5,665,390 115Revenue from closure and overweight load transports 2,378,157 1% 2,628,577 90Revenue from telecommunications 1,011,992 0% 1,012,196 100Revenues from easements 131,767 0% 335,415 39Revenue under performance contacts 668,098 0% 18,050,273 4Other sales revenue 608,469 0% 391,189 156Total net sales revenue 301,412,873 100% 266,050,392 112Revenue from tolls amounted to EUR 290,095,679 in 2010 and accounted for 96 % of total sales, showing an increase of 22% overthe previous year's figure. Revenue from tolls paid by vehicles up to 3.5 tons (vignette system) amounted to EUR 130.934.829 or 45%of total tolls and revenue from tolls paid by vehicles over 3.5 tons EUR 159,160,851 or 55% of total tolls.Revenue from tolls is followed by revenue from rentals (for the lease of motorway service areas and base stations) which in 2010amounted to EUR 6,518,711. Revenue is earned from the leasing of land alongside motorways for the provision of catering servicesand the erection of petrol service stations. Revenue from leases increased by 15 % in 2010 compared to 2009.The reduction in revenue from performance contracts which in 2010 amounted to EUR 668,098 was caused by the enforcementof MCRSA-1. According to this law, as of the beginning of 2010 DARS d.d. is entitled to compensation in the amount of 5.49% forperformed work only for transactions connected to spatial planning and arrangement of motorways in space and acquisition of realestate for the needs of motorway construction. These transactions are performed by DARS d.d. on behalf and for the account of theRepublic of Slovenia. DARS d.d. was able to charge compensation in 2009 under performance contracts from transactions relatedto spatial planning and arrangement of motorways in space, acquisition of real estate for the needs of motorway construction andfrom motorway construction and reconstruction.Sales revenue also includes revenue from road closures and overweight load transports in the amount of EUR 2,378,157, revenuefrom telecommunications in the amount of EUR 1,011,922 , and revenue from easements in the amount of EUR 131,767.Other sales revenue in the amount of EUR 608,469 includes revenue from the sale of ETC tags, revenue from towing, snow ploughingand clearing road accidents, revenue from rentals for holiday facilities and apartments, revenue from the sale of waste material,and other sales revenue.Net sales revenue was earned entirely in the domestic market.ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORT1184.2.2 Other operating revenuein EUR (without cents) 2010 Share 2009 IndexRevenue from the reversal of long-term provisions 565,532 4% 2,142,760 26Revenue from insurance benefits 3,002,822 23% 2,800,655 107Other operating revenue 9,297,493 72% 59,921 15.516Total operating revenue 12,865,847 100% 5,003,336 257Revenue from reversal of long-term provisions in the amount of EUR 565,532 relates to the reversal of provisions for lawsuits, reversalof accrued costs for the business success of the Management Board of DARS d.d. for 2009 which was not paid out and thereversal of provisions for ETC tags for trucks.Revenue from insurance benefits includes revenue from received insurance benefits for repair of damages on the motorway sectionsand facilities along motorways. The value of the insurance benefits in 2010 totalled EUR 3,002,822.The most important revenue items among other operating revenue which totalled EUR 9,297,493 were granted EU funds (CohesionFund, TEN-T, EasyWay programme) in the amount of EUR 5,102,131 and other operating revenue from funds received from municipalco-financing (City Municipality of Ljubljana) in the amount of EUR 4,075,002 which is transferred to revenue upon the receipt of thefunds from long-term accrued costs and deferred revenue, in accordance with the ensuing costs (amortisation calculation).4.2.3 Costs and operating expensesOverview of costs * :in EUR (without cents) 2010 Share 2009 IndexCosts of materials 13,152,610 6% 10,581,142 124Cost of services 26,397,177 13% 206,112,488 13Labour costs 32,840,366 16% 32,268,135 102Amortisation and depreciation 115,227,245 56% 8,499,705 1356Operating expenses for revaluation of intangible assets andproperty, plant and equipment57,083 0% 39,243 145Operating expenses from revaluation of operating current assets 209,324 0% 963,396 22Other operating expenses 17,909,137 9% 902,509 1984Total operating expenses 205,792,943 100% 259,366,619 79ANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORTBreakdown of costs by functional group:119in EUR (without cents) 2010 Share 2009 Index- Costs of materials 5,614,103 43% 4,195,294 134- Energy costs 5,276,405 40% 4,424,608 119- Costs of spare parts 446,357 3% 427,941 104- Write-downs of piece inventories 1,401,718 11% 1,124,313 125- Other costs of materials 414,027 3% 408,986 101Total 13,152,610 100% 10,581,142 124Costs of materials accounted for 6 % of total operating expenses and increased by 24 % compared to 2009 predominantly due tothe increased use of salt and chlorides during the winter season which represent 31 percent of costs of materials and increased useof electricity representing a 40 percent share.Breakdown of costs of services ** :in EUR (without cents) 2010 Share 2009 IndexCosts of the supervising engineer 2,797,792 11% 15,306,921 18- Costs of maintenance of operating fixed assets 5,967,984 23% 5,091,256 117Leases 1,066,587 4% 1,074,519 99Costs of payment transactions and insurance premiums 2,281,261 9% 1,928,256 118Concession fees 0 0% 169,447,153 0Commissions for sold vignettes 6,088,108 23% 5,662,070 108Other costs of services 8,195,445 31% 7,602,315 108Total 26,397,177 100% 206,112,488 13Costs of services accounted for 13 % of total operating expenses, showing a significant decrease over the previous year when costsaccounted for a 79 percent share. The change in the relationship between DARS d.d. and the Republic of Slovenia had the greatesteffect on decreasing the cost of services, for in 2010 DARS d.d. no longer shows concession fees to the Republic of Slovenia whichin 2009 represented an 82 percent share of costs of services, but rather financial expenses and decreased costs of the supervisionengineer which due to the changed relationship, predominantly represent the a share of the acquisition values of operating fixedassets. The costs of the supervising engineer include the costs of engineering regarding spatial planning, spatial arrangement ofmotorways and acquisition of real estate required for the construction and maintenance of motorways. Significant services in 2010also include commissions for sold vignettes (23 percent share), costs of maintenance of operating fixed assets (23 percent share),costs of the supervising engineer (11 percent share) and costs of payment transactions and insurance premiums (9 percent share)while total costs of other services represent a 34 percent share.ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORT1204.2.4 Labour costsLabour costs accounted for 16 % of total operating expenses of DARS d.d. in 2010 and showed an increase of 1.8 % over the previousyear’s figureT ype of labour cost: 2010 Share 2009 IndexWages and salaries 24,108,837 73% 23,562,775 102Social security and pension insurance costs 4,734,939 14% 4,666,770 101Other labour costs 3,996,589 12% 4,038,591 99Total 32,840,366 100% 32,268,135 102Labour costs include costs of supplementary pension insurance premiums in the amount of EUR 810,136.As at 31 December 2010, DARS d.d. employed 1,247 employees. The average staff count in 2010 was 1,211 (computed on the basis ofworking hours).In 2010, wages and salaries were paid in line with the General Collective Agreement for Economic Activities and the Corporate CollectiveAgreement of DARS d.d. while the salaries of the Management Board of DARS d.d. were also paid in accordance with the ActRegulating the Incomes of Managers of Companies owned by the Republic of Slovenia and Municipalities (ZPPOGD - Official Gazetteof the Republic of Slovenia, No. 21/2010).The annual monthly net salary at DARS d.d. in 2010 (in EUR):Average gross salary Year 2010 Year 2009DARS d.d. 1,651 1,640Republic of Slovenia 1,495 1,439The number of employees and employee educational structure as at 31 December 2010 are presented in the Business Report of theAnnual Report, under the chapter Human Resources Management (Section V.4).The total gross earnings of the members of the Management Board of DARS d.d. in 2010 amounted to EUR 323,130. The earnings ofindividual Management Board members of DARS d.d. are shown below:Mateja Duhovnik Gordana Bošković Mag. Alojz RatajcT ype of earning (in EUR without cents)Chairwoman of theManagement BoardMember of the ManagementBoard as of 1 February 2010Labour ManagerGross salary 114,732 93,208 94,562Annual leave bonus 900 825 900Incentive bonus for 2009 0 0 0Fringe benefits 6,015 4,825 4,356Reimbursement of costs 845 1,092 871Supplementary pension insurance 0 0 0Total 122,492 99,950 100,688ANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORTThe gross earnings of employees employed under employment contracts not subject to the Collective Agreement amounted to EUR1,096,254 in 2010.121The earnings of the Supervisory Board members in 2010 are shown below:in EUR (without cents) Meeting attendance fees Travel expenses Fringe benefitsMilan Medved 4,004 0 1,382Iztok Klančnik 3,437 0 1,382Tomaž Mencinger 3,355 190 1,382Darij Barrile 3,355 2,176 1,382Vito Meško 3,355 0 1,382Darko Kodrič 3,080 0 1,382Total 28,586 2,366 8,292Other 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 disclosed in the note to longtermprovisions.4.2.5 Write-downsin EUR (without cents) 2010 Share 2009 IndexAmortisation on intangible fixed assets 821,620 1% 973,055 84Amortisation of plant, property and equipment 114,405,625 99% 7,526,651 1,520Operating expenses for revaluation of intangible assets andproperty, plant and equipment57,083 0% 39,243 145Operating expenses from revaluation of operating current assets 209,324 0% 963,396 22Total 115,493,653 100% 9,502,345 1,215Operating expenses from revaluation of operating current assets refer to the revaluation of the inventory of vignettes for 2010 in theamount of EUR 116,164, the sale of which was concluded on 30 November 2010 and the revaluation adjustment for trade receivablesin the amount of EUR 86,103 and the write-downs of non-current inventories of materials in the amount of EUR 5,628.4.2.6 Other operating expensesThe costs of forming long-term provisions in the amount of EUR 17,523,516 are also shown among other operating expenses. Thecosts of forming long-term provisions in 2010 comprise:• provisions for long-term accrued costs of contingent losses on claims related to motorway construction and reconstruction in theamount of EUR 16,919,947, costs related to the motorway management and maintenance in the amount of EUR 7,314 and claimsby employees under labour disputes in the amount of EUR 20,083,ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORT122• provisions formed for the restructuring of the Tolling Implementation Division for severance payments for redundant employeesdue to the changed toll system in the amount of EUR 101,910.• provisions for jubilee premiums in the amount of EUR 111,445 and for retirement benefits in the amount of EUR 188,141,• provisions in the amount of EUR 30,210 for retirement benefits to employees not included in the pension scheme of collectivesupplementary pension insurance under the agreement between trade unions and the Company,• long-term accrued costs and deferred revenue for settlement of contingent liabilities arising from the return of purchase moneyupon a possible return of ETC tags in the amount of EUR 144,467 (the buyers of ETC tags are entitled to return ETC tags withinseven years from the date of purchase).4.2.7 Financial revenue from loans to othersFinancial revenue from loans to others in the amount of EUR 2,172,774 includes revenue from short-term surplus liquid funds depositedwith banks and investments in securities, and revenue from revaluation of financial investments held for sale.4.2.8 Financial revenues from operating receivables due from othersFinancial revenue from operating receivables due from others in the amount of EUR 84,160 refer to financial revenue from operatingreceivables and include calculated default interest and positive exchange rate differences.4.2.9 Financial expenses due to impairment and write-downs of financial investmentsFinancial expenses from impairments in the amount of EUR 3,482,819 represent the impairment of transactions with derivativefinancial instruments for hedging against risk in the amounts of EUR 40,000,000, EUR 50,000,000 and EUR 20,000,000 wherebythe Company protects cash flows from loans taken out for the needs of motorway construction. Due to changes in the accountingguidelines following the adoption of MCRSA-1, the Company shows all already concluded derivative financial instruments as a hedgeagainst interest risk in the Income Statement as of 1 January 2010. Until 31 December 2009, the Company disclosed derivativefinancial instruments as off sheet balance items within the scope of assets and liabilities of the Republic of Slovenia under the managementof DARS d.d.4.2.10 Financial expenses from loans received from banksFinancial expenses in the amount of EUR 57,424,915 represent interests calculated for long-term loans. The average interest rate forlong-term loans as at 31 December 2010 comprised 2.21%.4.2.11 Financial expenses from bonds issuedFinancial expenses in the amount of EUR 7,319,615 represent interests calculated for long-term securities issued. The average weightedinterest rate for long-term securities as at 31 December 2010 comprised 4.35%.4.2.12 Financial expenses from other financial liabilitiesDARS d.d. concluded an interest rate hedge in the amount of EUR 30,000,000 with a 3-year maturity in 2007. The deal was concludedto partly hedge against the interest rate for loans taken out with Banka Koper and Unicredit banka Slovenije. The maturitiesof the derivatives were three years with a fixed interest rate tied to the Swiss franc with an option of conversion to CHF upon thematurity of the loan. Financial expenses in the amount of EUR 3,433,199 represent the activation of the conversion option to CHFfollowing the maturity of the interest rate hedge.ANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORT4.2.13 Other revenueOther revenue in the amount of EUR 80,171 represent revenue from indemnities received under court judgements, revenue frominvoiced contract penalties, revenue from bonuses for exceeding the quota of disabled employees and fees obtained by DARS d.d.within the scope of implementing supervision of violations of toll collection and similar.1234.2.14 Other expensesOther expenses in the amount of EUR 206,463 predominantly represent payment of damages according to court decisions, reimbursedcosts in audit procedures according to the Public Tenders Act and similar.4.2.15 Income taxCorporate income is calculated in accordance with the Corporate Income Tax Act (ZDDPO-2). Income tax is payable on the taxableprofit generated during the tax period. For 2010, the tax rate was set at 20 percent.in EUR (without cents) 2010 20091 Revenue 316.615.824 272.329.3572 Expenses 278.327.509 259.421.0613 Total profit (1-2) 38.288.315 12.908.2964 Decrease in revenue 389.506 1.477.4485 Increase revenue 0 06 Decrease in expenses for the formation of provisions 8.761.758 260.0407 Decrease of expenses, other non-deductible expenses 1.993.367 1.243.3998 Increase in deductible expenses 62.036 181.8019 Deductible revenue less deductible expenses (1-2-4+5+6+7-8) 48.591.898 12.752.48610 Tax base (9) 48.591.898 12.752.48611 Change in tax base due to a change in accounting policies -205.536 102.82512 Increase in tax base by the amount of tax relief used 3.283 17.67513 Tax relief for investments 30.000 30.00014 Tax relief for employment of disabled persons 341.399 277.03015 Tax relief for implementation of the practical part of professional training 3.586 2.95816 Tax relief for supplementary pension insurance 810.136 790.11317 Tax relief for grants 18.400 10.35018 Taxable base (10+11+12-13-14-15-16-17) 47.186.124 11.556.88519 Corporate income tax 9.437.225 2.426.946Net profit or loss for the period is the amount of total profit determined in the income statement decreased by income tax liabilityin the accounting period and increased by deferred taxes. Net profit or loss for the period was 200% higher than the net profit orloss of the previous year.ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORT124in EUR (without cents) 2010 2009Operating profit 108.485.776 11.687.109Profit from financing activities 70.071.169 777.672Profit from extraordinary activities -126.292 443.515TOTAL PROFIT 38.288.315 12.908.296Income tax 9.437.225 2.426.946Deferred taxes -1.612.274 319.765Net profit for the period 30.463.365 10.161.585Deferred tax receivables are the amounts of income tax recoverable in future periods. The effective tax rate for 2010 calculated as aquotient of total paid tax and total profit comprised 24.6%4.2.16 Net profit or loss for the period restated by the use of the cost of livingin EUR (without cents) Growth in % Equity amountEffect ofrestatementDecreased profitor loss for theperiodEquity restatement by the use of the cost of living index 1.90% 2,388,110,677 45,374,102 -16,523,012ANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORTEvents after the Balance Sheet DateIn March 2011 the 1st session of the General Meeting of DARS d.d. was held, in which the sole owner decided on:• the distribution of the accumulated profit of DARS d.d. for 2009 in the amount of EUR 8,171,173 which was allocated to otherrevenue reserves. The General Meeting of DARS d.d. decided in 2010 that profit, in accordance with the Concession Agreement,would be transferred to the construction account and used as an additional source of servicing loans taken out for realising theNPIA. The construction account was terminated following the adoption of MCRSA– 1 therefore a new decision on the distributionof accumulated profit for 2009 had to be taken;• the capital increase of DARS d.d. through the in-kind contribution from Article 18 of MCRSA– 1. Entry of the capital increase wasimplemented on 31 March 2011 in accordance with Article 25 of MCRSA– 1 with the increased share capital already disclosed in theBalance Sheet for 2010;• the adoption of the new Articles of Association of DARS d.d. which was entered into the court register on 31 March 2011.125DARS d.d. published a preliminary tender regarding the transition from the Electronic Toll Collection System to Free-Flow Traffic.The aforementioned events are already incorporated in the financial statements of DARS d.d. for 2010.ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORTAudit of the 2010 Annual Report126The contractual price of the audit of the 2010 Annual Report of DARS d.d. amounted to EUR 29,500 exclusive of VAT. The audit wascarried out by the audit company Deloitte revizija d.o.o., Ljubljana. The audit company did not perform any other services for DARSd.d. in 2010.ANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORTStatement of Management ResponsibilityPursuant to Article 60a of the Companies Act, the Management Board of DARS d.d. certifies herewith that the 2010 Annual Reportof DARS d.d., Celje, including the Corporate Governance Statement, has been prepared and published in compliance with the CompaniesAct, Financial Instruments Market Act, Slovenian Motorways Company Act and the Slovenian Accounting Standards.127The members of the Management Board of DARS d.d., Celje, comprised of Mateja Duhovnik, Chairwoman of the Management Board,Gordana Bošković, member of the Management Board and member of the Management Board and Labour Manager Alojz Ratajc,MSc certify herewith that, to the best of their knowledge:• the 2010 Financial Statement of DARS d.d., Celje, have been prepared in compliance with the Slovenian Accounting Standardsand that they give a true and fair view of the assets and liabilities, the financial position, and the results of operations of DARSd.d., Celje;• the Business Report of DARS d.d., Celje for 2010 includes the fair presentation of development and results of operations of theCompany as well as its financial position, including the description of key risks to which DARS d.d., Celje, is exposed.Celje, 22. April 2011Gordana BoškovićMember of the Management BoardMateja DuhovnikChairwoman of the Management Boardmag. Lojze RatajcMember of the Management BoardLabour ManagerANNUAL REPORT 2010 DARS d.d

BUSINESS REPORTIndependent auditor's report128INDEPENDENT AUDITOR'S REPORTto the shareholders of Družba za avtoceste v Republiki Sloveniji d.d.Financial ReportWe have audited the accompanying financial statements of the company Družba za avtoceste v RepublikiSloveniji d.d. (hereinafter: Company) which comprise the balance sheet as at 31 December 2010, statement ofcomprehensive income, statement of changes in equity and cash flow statement for the year then ended, and asummary of significant accounting policies and other explanatory notes.Management's Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements in accordancewith Slovenian Accounting Standards and for maintaining internal control management feels relevant to thepreparation of financial statements that are free from material misstatement, whether due to fraud or error.Auditor's ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted ouraudit in accordance with International Standards in Auditing, except in those cases treated in the followingparagraphs. Those standards require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance whether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditor's judgement, including the assessment ofthe risks of material misstatement of the financial statements, whether due to fraud or error. In making thoserisk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentationof the financial statements of the Company in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing and opinion on the effectiveness of the entity's internalcontrol of the Company. An audit also includes evaluating the appropriateness of accounting policies used andthe reasonableness of accounting estimates made by management, as well as evaluating the overall presentationof the financial statements.We believe that the audit evidence obtained presents a sufficient basis for our audit opinion.ANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORTBasis for opinion with reservations - limitations regarding the scope of auditAs explained in more detail under the explanatory note VII.4.1.7 Short-term operating receivables, as at 31December 2010 the Company disclosed short-term operating receivables totalling EUR 40,492 thousand.These also include short-term operating receivables from operations for foreign account towards the Republicof Slovenia for the transactions defined in Article 4 of the Motorway Company of the Republic of SloveniaAct (ZDARS-1) and compensation pursuant to the Contract on the Performance of Tasks totalling EUR 14,603thousand for which a certificate was not obtained from the State and which, using other auditing procedures, wewere unable to ensure the book values of as at 31 December 2010.129Basis for opinion with reservations – deviation from the Slovenian Accounting StandardsAs explained in explanatory note VII.4.1.2. Property, plant and equipment, the Company observed Article 25 ofthe -1 which prescribes that those assets and liabilities defined in Articles 14, 15 and 18 of ZDARS-1 and coveredin the denoted explanatory note of the financial statements be disclosed and carried in the accounting ledgers ofthe Company for the first time for the entire 2010 fiscal year and as such were also observed in the preparation ofthe financial statements. In accordance with the aforementioned, the Company amortised the assets obtained inaccordance with ZDARS-1 in its accounting ledgers throughout the 2010 fiscal year, but did not commence theiramortisation on the first day of the month following the month the assets became available for use (the Act wasamended on 4 December 2010). The accounting solution described which is legitimised by ZDARS-1 does notcontextually conform to the Slovenian Accounting Standards. As a result, net profit for the accounting period for2010 is undervalued by the amount of calculated amortisation or namely, by EUR 106,598 thousand.Opinion with reservationsExcept for the effects described in the paragraph “Basis for opinion with reservations - deviation from theSlovenian Accounting Standards« and possible effects due to the matters described in the paragraph »Basis foropinion with reservations - limitations regarding the scope of audit” in our opinion, the financial statementspresent a true and fair view of the financial position of the Company as at 31 December 2010, and its financialperformance and cash flows for the year then ended in accordance with Slovenian Accounting Standards.Highlighted mattersAs explained in explanatory note VII.3, under the sub-heading “Acceptance of the Statement of Off BalanceSheet Items (Balance Sheet of Assets of the Republic of Slovenia under the Management of DARS d.d.) as at 1January 2010”, based on ZDARS-1 the Company transferred the assets and liabilities from the off balance sheetto its accounting ledgers (balance sheet of assets of the Republic of Slovenia received under the management ofDARS d.d. on 31 December 2009) as were disclosed in the Audited Annual Report for 2009. ZDARS-1 does notprovide a precise definition of the contents of the receivables the Company assumed as an in-kind contributiontherefore the Company decided to legally interpret it as described in the aforementioned explanation. No otherofficial interpretation of the law exists as far as we are aware.We have not established an opinion regarding the highlighted matter.ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORT130Report on Other Legal and Regulatory RequirementsPursuant to Article 57(1) of the Companies Act (ZGD-1), we have reviewed the company's businessreport. In our opinion, the business report is consistent with the audited financial statements for whichwe have issued our opinion with reservations.DELOITTE REVIZIJA d.o.o.Barbara Žibert KraljCertified AuditorYuri SidorovichChairman of the Management BoardLjubljana, 21 April 2011ANNUAL REPORT 2010 DARS d.d.

FINANCIAL REPORTAnnex: Transparency of FinancialRelations and Maintenance of SeparateAccounts for Different ActivitiesIn accordance with the Transparency of Financial Relations and Maintenance of Separate Accounts for Different Activities Act (ZP-FOLERD, Official Gazette of the Republic of Slovenia, No. 65/2008) DARS d.d. discloses items regarding transactions it performs onbehalf and for the account of the Republic of Slovenia pursuant to Article 4 of MCRSA-1 separately from transactions performed in itsname and for its account, namely motorway construction and reconstruction, operation and management thereof and toll collection.131Pursuant to Article 4 of MCRSA-1 and the Agreement on the Performance of Contracts, DARS d.d. performs tasks related to the spatialplanning and arrangement of motorways in space and acquisition of real estate for the needs of motorway construction. Thesetransactions are managed as transactions for foreign account. DARS d.d. records receivables towards the Republic of Slovenia forservices performed. The funds for such transactions are guaranteed from the budget of the Republic of Slovenia in accordance withArticle 10 of MCRSA-1. MCRSA-1 also defines that DARS d.d. and the Republic of Slovenia must within six months of the Act going intoform, reconcile the Agreement on the Performance of Contracts with MCRSA-1 through an annex.Pursuant to the Agreement on the Performance of Contracts for 2010, DARS d.d. is entitled to compensation in the amount of 5.49%of works performed. The costs of the performed tasks are charged in full to the Republic of Slovenia with DARS d.d. re-invoicing theRepublic of Slovenia for such costs. Compensation according to the Agreement on the Performance of Contracts cover the indirectcosts of DARS d.d. which burden its operations when implementing the tasks defined in Article 4 of MCRSA-1.DARS d.d. shows revenues from agency contract which the Republic of Slovenia recognises to DARS d.d. for implemented ordersas 5.49 % from the costs of activities to the spatial planning and arrangement of motorways in space and acquisition of real estaterequired for the needs of motorway construction. The Company shows the total costs of the Spatial Planning Office and 35% of thecost of materials, labour and amortisation of assets of the Legal Office as a cost of the activity. The Company does not recognisethe cost of services of the Legal Office among costs of the activity for the cost of services connected to the acquisition of real estate(appraisers, notaries, land surveyors, etc.) as costs of the Republic of Slovenia which are charged to the contracting authority in theirentirety.As at 31 December 2010 the Company showed receivables towards the Republic of Slovenia in the amount of EUR 15,404,964 forthe activities pursuant to Article 4 of MCRSA-1, namely according to the invoice issued on 31 December 2010 for costs connected tospatial planning and arrangement (EUR 5,512,076), costs related to the acquisition of land for the needs of motorway construction(EUR 9,091,170) and compensation according to the Agreement on the Performance of Contracts in the amount of EUR 801,718.In 2010 the Company showed a loss of EUR 1,029,726 from operations connected to the activities defined in Article 4 of MCRSA-1The loss was predominantly due to the fact that the Company pursuant to the Agreement on Performance of Contracts also carriedout motorway construction and reconstruction at an unchanged percentage of the compensation up to 1 January 2010 since thecompensation was calculated from the suitable higher base (in which total realisation of motorway construction and reconstructionhad been taken into account).The Company implements the construction and reconstruction of motorways which it operates and manages, maintains and implementstoll collection within the scope of concession activities which the Company performs in its name and for its account. TheCompany shows all revenue in full among revenue from activities expect those pursuant to the Agreement on the Performance ofContracts and shows all costs in full except costs of the Spatial Planning Office in full and 35% of the cost of materials, labour andamortisation of assets of the Legal Office among costs. 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 individual items. Property, plant andequipment and the appertaining amortisation costs are allocated among activities in accordance to the aforementioned division. TheCompany did not implement a revaluation of assets and liabilities in 2010.ANNUAL REPORT 2010 DARS d.d

FINANCIAL REPORT132Statement of Comprehensive Income by Activity for the period from1 January to 31 December 2010in EUR (without cents)Agreement on thePerformance of ContractsConcessionAgreementTotal1. Net sales revenue 668.098 300.744.775 301.412.873Revenue from tolls 0 290.095.679 290.095.679Revenue from leases 0 6.518.711 6.518.711Revenue from road closure and overweight load transports 0 2.378.157 2.378.157Revenue from easements 0 131.767 131.767Revenue under agency contract 668.098 0 668.098Revenue from telecommunications 0 1.011.992 1.011.992Other sales revenue 0 608.469 608.4694. Other operating revenue 0 12.865.847 12.865.8475. Costs of goods, materials and services -1.388.628 -38.161.159 -39.549.787a) Acquisition cost of goods and materials sold and cost of materials used -10.609 -13.142.001 -13.152.610b) Cost of services -1.378.019 -25.019.158 -26.397.1776. Labour costs -301.806 -32.538.560 -32.840.366a) Payroll costs -243.048 -23.865.790 -24.108.837b) Social security and pension insurance costs -44.562 -4.690.378 -4.734.939c) Other labour costs -14.197 -3.982.392 -3.996.5897. Write-downs -7.390 -115.486.263 -115.493.653a) Amortisation and depreciation -7.390 -115.219.855 -115.227.245b) Operating expenses for revaluation of intangible assets and property,plant and equipment0 -57.083 -57.083c) Operating expenses from revaluation of operating current asset 0 -209.324 -209.3248. Other operating expenses 0 -17.909.137 -17.909.13710. Financial revenues from loans 0 2.172.774 2.172.774b) Financial revenue from loans to others 0 2.172.774 2.172.77411. Financial revenues from operating receivables 0 84.160 84.160b) Financial revenues from operating receivables due from other entities 0 84.160 84.16012. Financial expenses due to impairment and write-downs of financial investments 0 -3.482.819 -3.482.81913. Financial expenses for financial liabilities 0 -68.177.729 -68.177.729a) Financial expenses from loans received from banks 0 -57.424.915 -57.424.915b) Financial expenses from bonds issued 0 -7.319.615 -7.319.615c) Financial expenses from other financial liabilities 0 -3.433.199 -3.433.19914. Financial expenses from operating liabilities 0 -667.555 -667.555a) Financial expenses from trade payables 0 -844 -844b) Financial expenses from other operating liabilities 0 -666.712 -666.71215. Other revenue 0 80.171 80.17116. Other expenses 0 -206.463 -206.46317. Corporate income tax 0 -9.437.225 -9.437.22518. Deferred taxes 0 1.612.274 1.612.27419. Net profit or loss for the period -1.029.726 31.493.091 30.463.36520.23. Other comprehensive income 0 0 024. Total comprehensive income -1.029.726 31.493.091 30.463.365ANNUAL REPORT 2010 DARS d.d.

201 0DARS d.d.Motorway Company in the Republic of SloveniaMain Office:Ulica XIV. divizije 4SI - 3000 CeljePhone: +386 3 426 40 71; Fax: +386 3 544 20 01Branch Office:Dunajska 7SI - 1000 LjubljanaPhone: +386 1 300 99 00Fax: +386 1 300 99 01Internet: http://www.dars.siPublished by:DARS d.d., Motorway Company in the Republic of SloveniaPhoto:² Studio 37Design:Sandi RadovanTypesetting:SmatrosPrinted by:Smatros