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TableofConTenTs
6 1 PresentationoftheKapitalskadruæbaGroup 6 1.1 Kapitalskadruæba,d.d. 9 1.2 Modrazavarovalnica,d.d.11 1.3 steklarskanova,proizvodnjasteklaRogaπkaslatina,d.o.o.(inbankruptcy)
12 2 StatementoftheManagementBoardoftheparentcompany
15 3 ReportoftheSupervisoryboardontheverificationoftheAuditedConsolidatedAnnualReportoftheKapitalskadruæbaGroupfor2015
20 4 OrganisationalstructureoftheKapitalskadruæbaGroup20 4.1 Reportingonemployees
21 5 Macroeconomicbackgroundofoperations21 5.1 Inflation22 5.2 Grossdomesticproduct22 5.3 employmentandwages23 5.4 Moneymarket23 5.4.1 Interestrates23 5.4.2 exchangerate24 5.5 Capitalmarket24 5.5.1 equitymarket24 5.5.2 Debtmarket25 5.6 Priceofoil
26 6 PerformanceoftheKapitalskadruæbaGroupbysegmentin201526 6.1 Kapitalskadruæba,d.d.26 6.1.1 Capitalinvestmentmanagement31 6.1.2 Managementofportfolioinvestments33 6.1.3 TransferstothePensionandDisabilityInsuranceInstitute33 6.1.4 Investmentproperty33 6.1.5 Pensionfundmanagement36 6.1.6 activitiesintheimplementationoftheZPIZ-2in201538 6.2 Modrazavarovalnica,d.d.38 6.2.1 Managementofownfinancialassets41 6.2.2 Managementofguaranteefunds44 6.2.3 Managementofmutualequitypensionfunds49 6.3 steklarskanovaRogaπkaslatina
50 7 Riskmanagement
51 8 Significantbusinesseventsaftertheendof2015
54 9 ExpecteddevelopmentoftheKapitalskadruæbaGroupfor2016
58 10 Socialresponsibility58 10.1 Responsibilitytothewidersocialcommunity
60 10.2 Responsibilitytoemployees
60 10.2.1 Concernforemployeetraining
61 10.2.2Concernforasafeandhealthyworkenvironment
62 10.3 environmentalresponsibility
64 11 Reportonrelationswithsubsidiaries64 11.1 ReportonrelationswithModrazavarovalnica
65 11.2 ReportonrelationswithPDP
66 12 Indicators
68 13 Corporategovernancestatement
76 14 Statementofthemanagement’sresponsibility
78 15 Auditor’sreport
80 16 FinancialStatementsfor201580 16.1 Consolidatedincomestatementfortheperiodfrom1January2015to31
December2015
82 16.2 Consolidatedstatementofothercomprehensiveincomefortheperiodfrom
1January2015to31December2015
83 16.3 Consolidatedstatementoffinancialpositionasat31December2015
86 16.4 Consolidatedcashflowstatementfortheperiodfrom1January2015to31
December2015
87 16.5 Consolidatedstatementofchangesinequityfortheperiodfrom1January
2015to31December2015
88 16.6 Consolidatedstatementofchangesinequityfortheperiodfrom1January
2014to31December2014
90 17 Disclosuresandnotes90 17.1 Generaldisclosures
92 17.2 accountingpolicies
112 17.3 Disclosuresandnotestothefinancialstatements
112 17.3.1 notestotheincomestatement
121 17.3.2 notestothestatementoffinancialposition
140 17.3.3 Managingrisksarisingfromfinancialassets
145 17.4 otherdisclosures
4
Tables
20 Table1:numberofemployeesintheKapitalskadruæbaGroup26 Table2:CompositionofKapitalskadruæba’sfinancialassetsasat31December2015withregardto
management27 Table3:breakdownofKapitalskadruæba’scapitalinvestmentsasat31December2015inaccordancewith
theDecreeonthestrategyforManagingstateCapitalInvestments27 Table4:breakdownofKapitalskadruæba’scapitalinvestmentsasat31December2014inaccordancewith
Kapitalskadruæba’sassetmanagementstrategy28 Table5:TenlargestcapitalinvestmentsofKapitalskadruæbabyvalueasat31December201528 Table6:Compositionofcapitalinvestmentsintermsofsizeofownershipstakeasat31December201529 Table7:Capitalinvestmentsthatgeneratedthehighestdividendincomein2015and201430 Table8:Participationatthegeneralmeetings32 Table9:Compositionofequityportfolioinvestmentsasat31December201532 Table10:Compositionofdebtinvestmentsasat31December201533 Table11:Compositionofmoneymarketinvestmentsasat31December201534 Table12:Kapitalskadruæba’srevenuesfrommanagementofthesoDPZin201535 Table13:CompositionoftheinvestmentsofthesoDPZasat31December201536 Table14:CompositionoftheKssoDPZinvestmentsasat31December201538 Table15:financialassetsModrazavarovalnicaasat31December201539 Table16:CompositionofModrazavarovalnica’sfinancialassetsasat31December201539 Table17:Compositionofequityportfolioinvestmentsasat31December201540 Table18:Compositionofdebtinvestmentsasat31December201540 Table19:Compositionofcashandcashequivalentsasat31December201541 Table20:basicdataregardingtheguaranteefundsofModrazavarovalnica42 Table21:CompositionofKsPPsassetsasat31December201542 Table22:GeographicaldistributionofKsPPsinvestmentsasat31December201543 Table23:numberofpolicyholders/participantsandamountpaidintotheKsMRin201543 Table24:structureofKsMRsupplementarypensionannuitiesasat31December201543 Table25:CompositionofKsMRassetsasat31December201544 Table26:GeographicaldistributionofKsMRinvestmentsasat31December201544 Table27:DataregardingmutualpensionfundsmanagedbyModrazavarovalnicaasat31December201558 Table28:Kapitalskadruæba,d.d.’spaymentstothebudgetofthePDII92 Table29:numberofemployeesoftheKapitalskadruæbaGroup121 Table30:Changesinintangibleassets,andlong-termdeferredcostsandaccruedrevenuesin2015121 Table31:Changesinintangibleassets,andlong-termdeferredcostsandaccruedrevenuesin2014122 Table32:Changesinproperty,plantandequipmentin2015122 Table33:Changesinproperty,plantandequipmentin2014123 Table34:Changesininvestmentpropertyin2015123 Table35:Changesininvestmentpropertyin2014124 Table36:Rentalincomeinvestmentpropertyandcostsrelatedtoinvestmentproperty125 Table37:Changesininvestmentsinassociates133 Table38:effectiveinterestratesbyassetgroup137 Table39:PresentgrossvalueoffuturepaymentsoftheKsPPsandtheKsMR138 Table40:Changeininterestrates/returnfortheKsPPsasat31December2015138 Table41:Changeininterestrates/returnfortheKsPPsasat31December2014138 Table42:Changeininterestrates/returnfortheKsMRasat31December2015139 Table43:Changeininterestrates/returnfortheKsMRasat31December2014139 Table44:Changeinmortalityasat31December2015forKsPPs139 Table45:Changeinmortalityasat31December2014fortheKsPPs139 Table46:Changeinmortalityasat31December2015forKsMR139 Table47:Changeinmortalityasat31December2014fortheKsMR140 Table48:exposureoffinancialassetstocreditrisk,excludinganycollateralasat31December2015140 Table49:exposureoffinancialassetstocreditrisk,excludinganycollateralasat31December2014141 Table50:Geographicalconcentrationofcreditexposureoffinancialassets141 Table51:Currencystructureoffinancialassets141 Table52:Currencyriskoffinancialassetsasat31December2015142 Table54:sensitivityanalysisofinvestmentsaccordingtochangesinmarketinterestratesasat31December
2015−changeininterestratesby50basispoints142 Table55:sensitivityanalysisofinvestmentsaccordingtochangesinmarketinterestratesasat31December
2014−changeininterestratesby50basispoints142 Table56:Marketriskoftheequitysecuritiesportfolioasat31December2015143 Table57:Marketriskoftheequitysecuritiesportfolioasat31December2014143 Table58:financialinstrumentsintermsofmarketability143 Table59:expectedactualnon-discountedcashflowsasat31December2015144 Table60:expectedactualnon-discountedcashflowsasat31December2014145 Table61:Remunerationsbycategoryofbeneficiariesin2015146 Table62:ReceiptsofthemembersoftheManagementboardofKapitalskadruæbain2015146 Table63:ReceiptsofthemembersofthesupervisoryboardofKapitalskadruæbain2015147 Table64:Grossreceiptsin2015bycategory,Modrazavarovalnica147 Table65:ReceiptsofthemembersoftheManagementboardofModrazavarovalnicain2015148 Table66:ReceiptsofthemembersofthesupervisoryboardofModrazavarovalnicain2015
Figures
21 figure1:Changeinmonthlyandannualgrowthinconsumerpricesin201522 figure2:Realyear-on-yeargrowthinGDPbyquarterin201523 figure3:Movementintheyield-to-maturityon10-yearGermangovernmentbondsandthe6-month
eURIboRin201523 figure4:MovementintheUsdollar/euroexchangeratein201524 figure5:MovementinthesloveniansbIToPandselectedforeignstockindicesin2015ineuros24 figure6:MovementintheIboXXeURCorporatesTRcorporatebondindexandtheIboXXeURsovereigns
TRgovernmentbondindexin201525 figure7:MovementinpricesofWTIcrudeandnorthseabrentcrudein2015
5
ListofabbreviationsusedaeD automatedexternaldefibrillatorIsa InsurancesupervisionagencyGDP GrossdomesticproductbaMC bankassetsManagementCompanyeCb europeanCentralbankeIR effectiveinterestrateeUR euro−currencyoftheeuropeanUnionfaRs financialadministrationoftheRepublicofsloveniaIasb InternationalaccountingstandardsboardKaD Kapitalskadruæbapokojninskegaininvalidskegazavarovanja,d.d.KDD CentralsecuritiesClearingCorporationKPnG Collectiveagreementforthenon-economicsectoroftheRepublicofsloveniaKPoPnJU Collectiveagreementonthecreationofapensionplanforpublic-sectoremployeesKsMR ModraRentaGuaranteefundKsPPs firstPensionfundGuaranteefundKssoDPZ GuaranteefundoftheCompulsorysupplementaryPensionInsurancefundoftheRepublicofsloveniaKVPs MutualequityPensionfundMlfsaeo Ministryoflabour,family,socialaffairsandequalopportunitiesMKPs ModriUmbrellaPensionfundMDP ModriDynamicsub-fundMPP ModriConservativesub-fundMZP ModriGuaranteedsub-fundMDRs MinistryofDefenceoftheRepublicofsloveniaIfRs InternationalfinancialReportingstandardsIas InternationalaccountingstandardIfRIC InternationalfinancialReportingInterpretationsCommitteeVsPI VoluntarysupplementarypensioninsurancePn1K PensionplanforcollectivevoluntarysupplementarypensioninsurancePn1P PensionplanforindividualvoluntarysupplementarypensioninsurancePnJUK Pensionplanforcollectivesupplementarypensioninsuranceforpublic-sectoremployeesPPs firstPensionfundoftheRepublicofsloveniasbIToP CentralslovenianstockmarketindexsDH slovenskidræavniholding,d.d.(orslovenskidræavniholding)soDPZ CompulsorysupplementaryPensionInsurancefundoftheRepublicofsloveniaUsD UsdollarVaR ValueatRiskZDDPo-2 CorporateIncomeTaxact(officialGazetteoftheRepublicofslovenia,nos.117/2006,90/2007,76/2008,
56/2008,92/2008,5/2009,96/2009,110/2009−ZDavP-2b,43/2010,59/2011,30/2012,24/2012,94/2012,81/2013,50/2014,23/2015and82/2015)
ZfPPIPP financialoperations,InsolvencyandCompulsoryDissolutionact(officialGazetteoftheRepublicofslovenia,nos.126/2007,40/2009,59/2009,52/2010,106/2010−oRZfPPIPP21,26/2011,47/2011−oRZfPPIPP21-1,87/2011−ZPUooD,23/2012−ConstitutionalCourtruling,48/2012−ConstitutionalCourtruling,47/2013,100/2013and10/2015−amended)
ZGD-1 Companiesact(officialGazetteoftheRepublicofslovenia,nos.42/2006,60/2006−amended,26/2007−ZsDU-b,33/2007−ZsReg-b,67/2007−ZTfI,10/2008,68/2008,42/2009,33/2011,91/2011,100/2011−ConstitutionalCourtruling,32/2012,57/2012and44/2013−ConstitutionalCourtruling,82/2013and55/2015)
ZIPRs1415 ImplementationofthebudgetoftheRepublicofsloveniafor2014and2015act(officialGazetteoftheRepublicofslovenia,nos.101/2013,9/2014−ZRTVs-1a,25/2014−ZsDH-1,38/2014,84/2014,95/2014,95/2014−ZUJf-C,14/2015,46/2015and55/2015)
ZIPRs1617 ImplementationofthebudgetoftheRepublicofsloveniafor2016and2017act(officialGazetteoftheRepublicofslovenia,no.96/2015)
ZKDPZJU actGoverningCollectivesupplementaryPensionInsuranceforPublicsectoremployees(officialGazetteoftheRepublicofslovenia,nos.126/2003and32/2015)
ZPIZ PensionandDisabilityInsuranceInstituteZPIZ-1 PensionandDisabilityInsuranceact(officialGazetteoftheRepublicofslovenia,nos.109/2006[official
consolidatedtext]−ZPIZ-1UPb4,112/2006−ConstitutionalCourtruling,114/2006−ZUTPG,17/2007,5/2008,5/2008,10/2008−ZVarDod,73/2008,53/2009,98/2009−ZIUZGK,27/2010−ConstitutionalCourtruling,38/2010−ZUKn,56/2010,79/2010−ZPKDPIZ,94/2010−ZIU,57/2011,94/2011−ConstitutionalCourtruling,105/2011−ConstitutionalCourtruling,61/2010−ZsVarPre,40/2011−ZsVarPre-a,110/2011−ZDIU12,40/2012−ZUJf,96/2012−ZPIZ-2
ZPIZ-2 PensionandDisabilityInsuranceact(officialGazetteoftheRepublicofslovenia,nos.96/2012,39/2013,46/2013−ZIPRs1314-a,63/2013−ZIUPTDsV,99/2013−ZsVarPre-C,101/2013−ZIPRs1415,111/2013−ZMePIZ-1,44/2014,85/2014−ZUJf-b,95/2014−ZIUPTDsV-a,97/2014−ZMePIZ-1a,95/2014−ZIPRs1415-C,95/2014−ZUPPJs15,95/2014−ZUJf-C,31/2015-ZIsDU-3,90/2015-ZIUPTD,90/2015−ZUPPJs16,96/2015−ZIPRs1617and102/2015)
ZPIZ-2b actamendingthePensionandDisabilityInsuranceact(officialGazetteoftheRepublicofslovenia,no.102/2015)
ZPPoGD actGoverningtheearningsofManagementstaffatCompaniesundertheMajorityownershipoftheRepublicofsloveniaandself-GoverninglocalCommunities(officialGazetteoftheRepublicofslovenia,nos.21/2010and8/2011and23/2014−ZDIJZ-C)
ZPZP© bridgingInsuranceforProfessionalathletesact(officialGazetteoftheRepublicofslovenia,nos.41/2014and47/2015)
ZPZP©-1 bridgingInsuranceforProfessionalathletesact(officialGazetteoftheRepublicofslovenia,no.82/2015)ZPZRTH actGoverningtheGradualClosureoftheTrbovlje-HrastnikMineandtheDevelopmentalRestructuring
oftheRegion(officialGazetteoftheRepublicofslovenia,nos.61/2000,42/2003,71/2004,43/2010,49/2010−amended,40/2012−ZUJf,25/2014,46/2014and82/2015)
ZsDH sloveniansovereignHoldingCompanyact(officialGazetteoftheRepublicofslovenia,nos.105/2012,39/2013,101/2013−ZIPRs1415,and25/2014−ZsDH-1)
ZsDH-1 sloveniansovereignHoldingCompanyact(officialGazetteoftheRepublicofslovenia,nos.25/2014and96/2015)
ZUJIK actGoverningthePromotionofPublicInterestinCulture(officialGazetteoftheRepublicofslovenia,nos.96/2002,123/2006−Zfo-1,7/2007−ConstitutionalCourtruling,53/2007,65/2007−ConstitutionalCourtruling,56/2008,4/2010,20/2011,100/2011−ConstitutionalCourtruling,111/2013)
ZVPsJU ClosedMutualPensionfundforPublic-sectoremployeesZZavar Insuranceact(officialGazetteoftheRepublicofslovenia,nos.13/2000,31/2000−ZP-l,91/2000−
amended,12/2001−ConstitutionalCourtruling,21/2002,52/2002−ZJa,91/2002−ConstitutionalCourtruling,29/2003−ConstitutionalCourtruling,40/2004−ZDDPo-1,50/2004,65/2004−ConstitutionalCourtruling,76/2005−ZZVZZ-H,8/2006−oRZZavar62,79/2006,114/2006−ZUe,9/2007,102/2007,69/2008,19/2009,49/2009,83/2009,79/2010,90/2012,102/2012,56/2013,63/2013−Zs-K,66/2014,92/2014and93/2015−ZZavar-1)
ZZavar-1 Insuranceact(officialGazetteoftheRepublicofslovenia,no.93/2015)
6 Presentation of the Kapitalska druæba Group
TheKapitalskadruæbaGroupcomprisestheparentcompanyKapitalskadruæba,d.d.,Modra
zavarovalnica,d.d.andsteklarskanovaRogaπkaslatina,d.o.o.(inbankruptcy).eachofthe
aforementionedcompaniesisdescribedinmoredetailbelow.
1.1 KaPITalsKaDRUæba,D.D.
Company
Companyname:Kapitalskadruæbapokojninskegaininvalidskegazavarovanja,d.d.
Abbreviatedcompanyname:Kapitalskadruæba,d.d.(hereinafter:Kapitalskadruæba)
CompanynameinEnglish:PensionfundManagement
Registeredoffice:Dunajskacesta119,ljubljana
Registrationnumber:5986010000
VATIDnumber:sI59093927
Entryincompaniesregister:ljubljanaDistrictCourt,reg.no.1/28739/00
Ownershipstructureanddataregardingcapital
TheRepublicofsloveniawasKapitalskadruæba’ssoleshareholderasat31December2015.
TheCompany’ssharecapital,amountingtoeUR364,809,523.15,isdividedinto874,235
ordinaryregisteredno-par-valueshares.eachno-par-valuesharerepresentsthesamestake
andcorrespondingamountinthesharecapital.
ActivitiesoftheCompany
Kapitalskadruæba’sprincipleactivityistheprovisionofsupplementaryfundingforpension
anddisabilityinsurancethroughthemanagementofitsownassets,andthemanagement
oftheCompulsorysupplementaryPensionInsurancefund(hereinafter:thesoDPZ)andthe
GuaranteefundoftheCompulsorysupplementaryPensionInsurancefund(hereinafter:the
KssoDPZ).Kapitalskadruæbaalsoperformsotheractivitiesrelatedtoassetmanagement
andassetmanagementsupportservices.
Kapitalskadruæba’sactivitiesaredefinedbythelawandtheCompany’sarticlesofassocia-
tion,accordingtowhichKapitalskadruæbaperformsthefollowingactivities:
58.110 bookpublishing
7
58.120 Publishingofdirectoriesandmailinglists
58.130 Publishingofnewspapers
58.140 Publicationofmagazinesandotherperiodicals
58.190 otherpublishingactivities
58.290 othersoftwarepublishing
59.200 soundrecordingandmusicpublishingactivities
62.010 Computerprogrammingactivities
62.020 Computerconsultancyactivities
62.030 Computerfacilitiesmanagementactivities
62.090 otherinformationtechnologyandcomputerserviceactivities
63.110 Dataprocessing,hostingandrelatedactivities
63.120 Webportals
64.200 activitiesofholdingcompanies
64.300 Trusts,fundsandsimilarfinancialentities
64.990 otherfinancialserviceactivities,exceptinsuranceandpensionfundingactivitiesn.e.c.
65.300 Pensionfundactivities
66.210 Riskandclaimsassessment
66.290 otherauxiliaryactivitiesforinsuranceandpensionfunding
68.100 buyingandsellingofownrealestate
68.200 Rentingandoperatingofownorleasedrealestate
69.200 accounting,bookkeepingandauditingactivities;taxconsultancy
70.100 activitiesofheadoffices
70.220 businessandothermanagementconsultancyactivities
73.200 Marketresearchandpublicopinionpolling
85.590 othereducationn.e.c.
85.600 educationalsupportactivities
Companybodies
Management Board
KapitalskadruæbawasrunbyitsManagementboardin2015inthefollowingcomposition:
�� bachtiarDjalil,President,
�� anjastrojin©tampar,Msc,member,and
�� DrborisænidariË,member.
Thetermofofficeofanjastrojin©tampar,Mscexpiredon30november2015.Drborisæni-
dariË,thecurrentDeputyChairmanofKapitalskadruæba’ssupervisoryboard,beganatem-
porarytermofofficeasmemberoftheManagementboardon23november2015.
ThePresidentandmemberofKapitalskadruæba’sManagementboardwereappointedbythe
supervisoryboardinaccordancewiththeCompany’sarticlesofassociationandtheprovi-
sionsofthesloveniansovereignHoldingCompanyact(hereinafter:theZsDH-1),onthebasis
ofapublictenderprocedure.ThetemporarymemberoftheManagementboardwaslikewise
appointedbytheKapitalskadruæba’ssupervisoryboardpursuanttothesecondparagraph
ofarticle273oftheCompaniesact(hereinafter:theZGD-1).
oneofthemembersoftheManagementboardisappointedpresidentthereof.Membersof
theManagementboardserveafour-yeartermofofficeandmaybere-appointed.TheMan-
agementboardoritsindividualmembersmayberecalledpriortotheendoftheirtermof
office,butonlyforthereasonssetoutinthesecondparagraphofarticle268oftheZGD-1.
aviolationofthearticlesofassociationofKapitalskadruæbathatisdeemedtobeaserious
violationofobligationsmayconstituteareasonofculpabilityresultinginrecall.
TheManagementboardofKapitalskadruæbahasnopowerstoissueorpurchasetreas-
uryshares.
8
Supervisory Board
ThesupervisoryboardofKapitalskadruæbafunctionedinthefollowingcompositionin2015:
�� samolozej,Chairman,
�� aldoTernovec,DeputyChairman(until31January2015),
�� aleksanderMervar,Msc,
�� stanislavseniËar,
�� anabilbija,
�� ladislavRoæiË,Msc,
�� DrborisænidariË,DeputyChairman(from5March2015to22november2015),and
�� CirilasurinaZajc,DeputyChairwoman(since23november2015).
Thetermsofofficeofthefollowingthreemembersofthesupervisoryboardexpiredon31
January2015:
�� aldoTernovec,
�� anabilbija,
�� ladislavRoæiË,Msc.
Thefollowingthreenewmembersbegantheirfour-yeartermofofficeon1february2015:
�� DrborisænidariË,(untilheassumedhisfunctionasmemberoftheManagementboard),
�� CirilasurinaZajc,and
�� ladislavRoæiË,Msc.
ThesupervisoryboardofKapitalskadruæbaisappointedbytheCompany’sGeneralMeet-
ing.Thesupervisoryboardcomprisessixmembersinaccordancewiththesixthparagraph
ofarticle51oftheZsDH-1.Threemembersofthesupervisoryboardareappointedonthe
basisofaproposalbysDH,1whiletwomembersareappointedonthebasisofaproposalby
anational-levelfederation/organisationofpensioners.onememberisappointedonthebasis
ofaproposalbynational-levelrepresentativetradeunionfederationsorconfederations.Ifan
individualinterestgroupdoesnotformulateaproposalfortheappointmentofmembersof
thesupervisoryboardinthemannerdefinedbelow,theGeneralMeetingoftheCompany
appointsmissingmembersatitsowndiscretion.Theproposalforcandidatestorepresent
sDHisformulatedbysDH’sManagementboard,whichinformsthesupervisoryboardof
itschoice.Theproposalforcandidatestorepresentpensionersisformulatedbynational-
levelfederations/organisationsofpensioners,whichinformthesupervisoryboardoftheir
choice.Theproposalforacandidatetorepresenttradeunionsisvoteduponbyrepresenta-
tives(electors)ofnational-levelrepresentativefederations/confederations,whichinformthe
supervisoryboardoftheirchoice.eachrepresentativefederation/confederationhasasmany
representativesasthenumberofrepresentativetradeunionsamalgamatedwithinthem.In
additiontotherepresentativesreferredtointheprecedingsentence,afederation/confedera-
tionelectsonerepresentativeforevery10thousandmembers.Membersofthesupervisory
boardserveafour-yeartermofofficeandmaybereappointed.
General Meeting
Therightsofthesoleshareholderareexercisedbythesloveniangovernment.
1 Thecurrentthreemembersofthesupervisoryboardwereappointedbasedonaproposalbyslovenskaodπkodninskadruæba,d.d.inaccordancewiththepreviouslyvalidZsDH.
9
1.2 MoDRaZaVaRoValnICa,D.D.
Company
Name:Modrazavarovalnica,d.d.(hereinafter:Modrazavarovalnica)
Registeredoffice:Dunajskacesta119,ljubljana
Registrationnumber:6031226
VATIDnumber:sI21026912
Ownershipstructureanddataregardingcapital
KapitalskadruæbawasModrazavarovalnica’ssoleshareholderasat31December2015.
Theinsurancecompany’ssharecapitalamountstoeUR152,200,000andisdividedinto
152,200,000no-par-valueshares.eachsharerepresentsthesamestakeandcorresponding
amountinthesharecapital.Thestakeofindividualno-par-valuesharesinthenominalcapital
isdeterminedwithrespecttothenumberofno-par-valuesharesissued.
Activitiesofthecompany
ModrazavarovalnicaprovideslifeinsuranceservicesinaccordancewiththeInsuranceact
(hereinafter:theZZavar)andthedecisionissuedbytheInsurancesupervisionagency(here-
inafter:theIsa),bywhichitauthorisedtheformertoprovidethefollowingtypesofinsur-
ancetransactions:
�� accidentinsurance−point1ofthesecondparagraphofarticle2oftheZZavar;and
�� lifeinsurance−point19ofthesecondparagraphofarticle2oftheZZavar.
Modrazavarovalnica’sactivitiesaredefinedbythelawandthecompany’sarticlesofasso-
ciation,accordingtowhichModrazavarovalnicaperformsthefollowingactivities:
65.110 lifeinsurance
65.120 non-lifeinsurance(onlyaccidentandhealthinsurancetransactions)
65.300 Pensionfunding
66.210 Riskanddamageevaluation
66.220 activitiesofinsuranceagentsandbrokers
66.290 otheractivitiesauxiliarytoinsuranceandpensionfunding
66.300 fundmanagementactivities
Companybodies
Management Board
TheManagementboardhastwomembersinaccordancewiththecompany’sarticlesof
association.ThesupervisoryboardappointsthemembersoftheManagementboardfora
five-yeartermofoffice.ModrazavarovalnicawasrunbyitsManagementboardin2015in
thefollowingcomposition:
�� �borutJamnik,President,whosefive-yeartermofofficebeganon29august2011.Mr
Jamnik’ssecondfive-yeartermofofficebeginson29august2016;and
�� �MatijaDebelak,member,whosefive-yeartermofofficebeganon14september2011.Mr
Debelak’ssecondfive-yeartermofofficebeginson14september2016.
TheManagementboardmanagesthecompanyintheintereststhereof,independentlyand
atitsownrisk.TheManagementboardrepresentsModrazavarovalnicawithoutlimitations.
Inlegaltransactions,thecompanyisalwaysrepresentedcollectivelybythePresidentand
memberoftheManagementboard.Thecompany’sarticlesofassociationsetoutthetrans-
actionsanddecisionsforwhichtheManagementboardmustobtaintheconsentofthe
supervisoryboard.
10
TheManagementboardexerciseditscompetencesin2015inaccordancewiththerulesof
procedureofthatbody,reportedregularlytothesupervisoryboardandfulfilleditsobligations
totheshareholder,assetoutintheZGD-1,inaccordancewiththearticlesofassociation.
Supervisory Board
Policyholdersor their representativeshelpco-formulate thebusinesspolicyofModra
zavarovalnica.
Thesupervisoryboardcomprisessixmembersappointedtoafive-yeartermsofofficeby
theinsurancecompany’sGeneralMeetingon9December2011.Halfofthemembersofthe
supervisoryboardwereproposedbypolicyholdersbasedonapubliccalltoproposecandi-
dates.TwomemberswereproposedbytheCommitteeoftheClosedMutualPensionfund
forPublic-sectoremployees(hereinafter:theZVPsJU)onbehalfofZVPsJUpolicyholders,
whileathirdmemberwasproposedbytheCommitteeoftheMutualequityPensionfund
(hereinafter:theKVPs)onthebehalfofotherpolicyholders.
Thesupervisoryboardcomprisesthefollowingmembers:
�� �branimir©trukeljservedasChairmanfrom1January2015to22December2015,andhas
servedasDeputyChairmansince23December2015,
�� �DraleπGroznikservedasDeputyChairmanfrom1January2015to22December2015,
andhasservedasChairmansince23December2015,
�� DarioRadeπiË,member,
�� Goranbizjak,member,
�� bojanZupanËiË,member,and
�� Marinofurlan,member.
Theresponsibilitiesofthesupervisoryboardaresetoutinthecompany’sarticlesofasso-
ciation,whileitsworkmethodisgovernedbytheaforementionedbody’srulesofprocedure.
adetaileddescriptionoftheactivitiesandworkmethodofthesupervisoryboardin2015is
givenintheReportofthesupervisoryboard.
Twocommitteesfunctionedwithinthesupervisoryboardin2015:anauditcommitteeand
ahumanresourcecommittee.
GeneralMeeting
Kapitalskadruæbaexerciseditsrightsin2015attheGeneralMeetingasthecompany’ssole
shareholder.
11
1.3 sTeKlaRsKanoVa,PRoIZVoDnJasTeKlaRoGa©KaslaTIna,D.o.o.(InbanKRUPTCy)
Generalinformation
Companyname:steklarskanova,proizvodnjasteklaRogaπkaslatina,d.o.o.(inbankruptcy)
Abbreviatedcompanyname:steklarskanovaRogaπkaslatina,d.o.o.(inbankruptcy;here-
inafter:steklarskanovaRogaπkaslatina)
Registeredoffice:steklarskaulica1,3250Rogaπkaslatina
Registrationnumber:18606674
VATIDnumber:30186323
ThecompanyisenteredinthecompaniesregisterattheCeljeDistrictCourt,underregistra-
tionnumber:1/07987/00
Ownershipstructure
Kapitalskadruæbawas100%ownerofsteklarskanovaRogaπkaslatinaon21May2009,
whenbankruptcyproceedingswereinitiatedagainstthelatter.
Companybodies
bankruptcyproceedingswereinitiatedagainststeklarskanovaRogaπkaslatinaon21May
2009.©tefanRola,s.p.wasinitiallyappointedofficialreceiver,butwasrelievedofhisfunc-
tionon6July2011.DrIrenalesjakwasappointedasofficialreceiveronthesameday.bank-
ruptcyproceedingsarestillinprogress.
KapitalskadruæbadoesnotincludethesubsidiarysteklarskanovaRogaπkaslatinainitscon-
solidatedfinancialstatements,astheinclusionofthefinancialstatementsoftheaforemen-
tionedsubsidiaryisnotmateriallysignificantforatrueandfairpresentationofthefinancial
statementsoftheKapitalskadruæbaGroupasawhole.
12 Statement of the Management Board of the parent company
Despitetheeconomicgrowthrecordedinslovenia,economicconditionsremainuncertain.
operationswerehinderedlastyearbystructuralimbalancesinsloveniaandnumerousprob-
lemsinthewiderenvironment,fromthreatstotheeuroduetothecrisisinGreece,which
hasdraggedonformanyyears,andtheunexpectedwaveofrefugees,totheescalationof
armedconflicts,terroristattacksandthecoolingoftheChineseeconomy.Historicallylow
interestrateswereaccompaniedbylargefluctuationsonstockandbondmarketsandfall-
ingoilprices.Volatileeconomicandpoliticalconditionspersist,whileforecastsofglobal
economicgrowtharenotencouraging.Inthecontextoftheseunfavourableexternalcir-
cumstances,Kapitalskadruæbaremainsloyaltoitsmissionofprovidingadditionalfundsfor
compulsorypensionanddisabilityinsurance,andtheprovisionofoccupationalpensioninsur-
anceforspecificcategoriesofworkers.Weareawarethatwecanonlypursueourmissionin
theseuncertainanddifficulteconomicconditionsbyworkingtogetherwithallstakeholders
andstrivingtounderstandtheirneeds,usingalloftheknowledgeandcompetencesofour
employees.atthesametime,wefocusconstantlyontheeffectivemanagementofrisksand
theexploitationofbusinessopportunities.
WemanagedfundsinexcessofeUR675millioninthesoDPZduring2015,representingthe
savingsofmorethan45,600policyholders.Despitethehighlyvolatilefinancialmarkets,we
achievedasolidyieldthroughthemanagementofthesecondlargestpensionfundinslovenia,
whichrankedtheCompanythirdamongpensionfundmanagersin2015.TheKssoDPZis
alsodemonstratingstablegrowth.asat31December2015,atotalof133retireesreceivedan
occupationalpensionfromtheaforementionedfund,whilegrosspensionsamountedtonearly
eUR2million.Despitethestillsmallnumberofoccupationalpensioners,retirement-related
activitieswereparticularlydemandinglastyear,aswecontinuedtodealwithaspecialtype
ofoccupationalretirementsetoutintheactGoverningtheGradualClosureoftheTrbovlje-
HrastnikMineandtheDevelopmentalRestructuringoftheRegion(ZPZRTH),whichincludes
thestate,asco-financier,viatheministryresponsiblefortheinfrastructure.Duetoinsufficient
legalprovisionsandtheneedtoincludeexternalinstitutionsintheaforementionedspecial
formofretirementandcomplexdocumentarychannels,theestablishmentofanappropriate
businessprocesswasverydemanding.Kapitalskadruæbasuccessfullyaddressedthoseand
otherchallengesintheareaofpensioninsurancein2015,when19retireesbeganreceiving
anoccupationalpensioninaccordancewiththespecialprovisionsoftheZPZRTH.
13
ThebridgingInsuranceforProfessionalathletesact(hereinafter:theZPZP©)taskedKapitalska
druæbawiththeimplementationofbridginginsurance,whichrepresentsanopportunitytopar-
tiallyfillthefinancialgapbetweentheendofaprofessionalathlete’sactivesportingcareerandthe
beginningandanewcareer.since2014,Kapitalskadruæbahaswarnedoftheunenforceabilityof
legalprovisionslinkedtotheimplementationofbridginginsuranceandhasdrawnupproposed
solutionsaccordingly.Inappropriateandunenforceablelegalprovisionswererectifiedduring
thesecondhalfof2015withthenewbridgingInsuranceforProfessionalathletesact(ZPZP©-1).
Kapitalskadruæbamustestablishabridgingfundforathletesby1september2016.TheCompany
willsetupaspecialprojectgroupthatwilldrawupthetechnical-operationalbasesofbusiness
processesfortheprovisionofbridginginsuranceforathletes,acompletelynewfieldinslovenia.
Theimplementationoftheaforementionedlegallyprescribedtaskishinderedontheonehand
bythelackofsystematicregulationoftheemploymentrelationsofprofessionalathletes,which
inturnmeansagreatdealofuncertaintyregardingthesuccessofthebridgingfundforathletes.
Inadditiontotheprojectaimedattheimplementationofbridginginsuranceforathletes,
Kapitalskadruæbaalsobeganimplementingaprojectin2015toreplaceitsinformationsys-
tem.Duetothesize,complexityandrisksofsuchprojects,thatreplacementwillbecarried
outgraduallyandcontinueforsometime.Thereplacementoftheinformationsystemwill
alsobeaccompaniedbytheoptimisationofkeybusinessprocessesandtheiradaptationto
numerouschangesinthebusinessandfinancialenvironments.
Thedifficultconditionsthatcharacterisedthe2015financialyearwereagoodopportunityfor
Kapitalskadruæbatopursueitsvisionandstrengthenitsroleintheeconomyandpensionsys-
tem.ourcapitalstabilityandinnovativestrengthintheimplementationofnewpensionsolutions,
andtheCompany’scommitmenttoitsmissionrepresentaguaranteeforthecontinuedsuc-
cessfuloperationsofKapitalskadruæbaforthebenefitofcurrentandfutureretireesinslovenia.
In2015,Modrazavarovalnicawasthefirstontheslovenianmarkettooffersaversthepossi-
bilityofsavinginlife-cyclefunds.Thecompanygainedanimportantcompetitiveadvantage
onthesupplementarypensioninsurancemarketwiththeintroductionoftheModriUmbrella
Pensionfund.TheModriUmbrellaPensionfundcomprisesthreesub-fundswithdifferent
investmentpoliciesdependingontheageoffundparticipants.Itisavailabletoallemploy-
ersandtheiremployeeswhoareawareoftheadvantageofsavingsviatheselectionofan
investmentpolicyadaptedtotheindividual.TheperformanceoftheModriUmbrellaPension
fundexceededourexpectations,asthefundhadnearlyninethousandsaversattheendof
December,withatotalofeUR23millioninassetsundermanagement.
Modrazavarovalnica’scapital,whichensuresthesecurityofpolicyholders’assets,amounted
toeUR201millionattheendof2015,whichiseUR58millionmorethanwhentheinsurance
companybeganoperatingfouryearsago.Thesecurityofpolicyholders’assetsandthehigh-
qualityofitsserviceswillcontinuetobeModrazavarovalnica’scoreguidelines.Thevalue
ofassetsundermanagementalsorecordedgrowthtostandateUR1.3billionattheendof
2015:assetsundermanagementinmutualpensionfundstotalledeUR914million,while
assetsundermanagementinguaranteefundstotalledeUR140million.Thecompany’sown
assetsamountedtoeUR223million.
Uncertaintyonthefinancialmarketsandmajorfluctuationsinthepricesoffinancialinstruments
werecharacteristicof2015.Thevalueofeuropeangovernmentbondsroseslightly,whilethe
valueofcorporatebondswasdownonaverage.Theshareindicesofdevelopedmarketswereup
byanaverageof6.6%.JapaneseandGermansharesrecordedthehighestaveragegains.Unfor-
tunately,slovenianshareslost11.2%oftheirvalueduringthesameperiod,whichhadasignificant
affectontheperformanceofthefirstPensionfund,asdomesticequityinvestmentsaccountfor
58%ofthatfund’sportfolio.TheinsurancecompanycreatedprovisionsintheamountofeUR
4.8millionin2015duetotheaforementionedfund’sfailuretoachievetheguaranteedreturn.
14
ThereturnsofotherpensionfundsmanagedbyModrazavarovalnicawerealsolowerthanthe
previousyearin2015,butwerecomparablewiththereturnsofcompetitiveslovenianpension
funds.Themajorityofslovenianpensionfundsdidnotachievetheirrespectiveguaranteed
returns.Thiswasduetothedifficultmarketconditionsontheonehandandduetotherela-
tivelyhighguaranteedreturntarget,whichwas1.94%annuallyforfundsmanagedbyModra
zavarovalnica,ontheotherhand.TheZVPsJUachievedareturnof3.68%,whiletheKVPs
achievedareturnof1.39%.The11-monthreturnoftheModriUmbrellaPensionfund’ssub-
fundsrangedfrom−1.97%ontheguaranteedsub-fundto3.59%onthedynamicsub-fund.
oneofModrazavarovalnica’smostimportantmarketobjectivesin2015wasincreasedrec-
ognitionandthepositioningoftheinsurancecompanyasthelargestandleadingprovider
ofsupplementarypensioninsuranceontheslovenianmarket.Wecarriedoutthreemajor
advertisingcampaignsandTVadvertising,whichwereaccompaniedbyonlineandprint
advertising,andpresentedModrazavarovalnica’smissionandtheneedforsupplementary
pensionsavings.Wethankedpolicyholdersfortheirtrustandcalledonotherstomakethe
intelligentchoice,eventhoughretirementremainsfaraway.Theannualmeasurementofthe
recognitionofModrazavarovalnicaindicatedthatplannedmarketingactivitiesweretheright
ones,asrecognitionoftheinsurancecompanyimprovedsignificantly.
In2016,Modrazavarovalnicawillcontinuetopursuestrategiesthatfocusonthesecurityofsup-
plementarypensioninsurancepolicyholders.Thatsecuritywillbeensuredthroughasufficient
levelofcapital,prudentoperationsandanincreaseinthevalueofsupplementarypensionsavings.
Majorbusinessobjectivesin2016includegrowthinmarketshareintheareaofsupplementary
pensionsavingsandinthepaymentofsupplementarypensionannuities.Increasedmarketing
activitiesduringthesecondhalfoftheyearwillbeaimedattheplannedtransformationoftheZVP-
sJUintoasub-fundwithaguaranteedreturnandtheestablishmentofanumbrellalife-cyclefund,
wheretheformulationofhigher-riskinvestmentpoliciesforbothfundscanbeexpectedin2017.
Throughthedevelopmentandupdatingofsupplementarypensionsinaccordancewiththe
newfeaturesoftheZPIZ-2andtheimplementingregulationissuedbytheMinistryoffinance,
wewillofferarangeofpensionannuitiesin2016,takingintoaccounttheexpectationsofpoli-
cyholdersandprescribedlimitsonthelevelandtypeofassetsundermanagement.Inaccord-
ancewithadoptedguidelines,wewillcontinuetostrengthenourfocusonthecustomer,offer
themostpersonaltreatmentpossible,monitorcustomers’needsandadvisethemaccordingly.
Weexpectadifficultyearin2016intermsofthemanagementofinvestments,astheresult
ofextremelylowinterestrates,andlowyieldsonbondsandrelativelyhigh-value,higher-risk
investmentcategories.Theguaranteedreturnin2016wascutfrom1.94%to1.08%annually.
Weneverthelessassessthattheachievementofsuchareturnwillbedifficult.
Theinsurancecompany’scommunicationconceptwillcontinuetofocusonlinkingsupplemen-
tarypensioninsurancewithModrazavarovalnicain2016,andthemoreintensivepositioning
oftheinsurancecompanyastheleadingandsecurestmanagerofpensionsavingsandpayer
ofsupplementarypensionannuities.ThekeymessageswillemphasiseModrazavarovalnica
asatrustworthylong-termpartner,wherethesecurityofsavingsandresponsibilityforfund
participantstakepriority.Wewillcontinuetooperateasafamily-friendlycompany,whiledem-
onstratingoursocialresponsibilitythroughresponsibilityfortheenvironment,transparentand
responsibleoperations,andbypublicawarenessaboutthefactthatsupplementarypensionsav-
ingsareanintelligentsolution,astheyfacilitateadecentstandardoflivingfollowingretirement.
DrBorisÆnidariË BachtiarDjalilMemberoftheManagementboard PresidentoftheManagementboard
15Report of the Supervisory board on the verification of the Audited Consolidated Annual Report of the Kapitalska druæba Group for 2015
Pursuanttotheprovisionsofarticle282oftheCompaniesact(hereinafter:theZGD-1),the
supervisoryboardofKapitalskadruæbapokojninskegaininvalidskegazavarovanja,d.d.
(hereinafter:Kapitalskadruæba)herebysubmitsthefollowingreporttotheCompany’sGen-
eralMeeting:
a)ReportoftheSupervisoryBoardonthemethodandextentoftheverificationoftheCompany’smanagementduringthefinancialyear
ThesupervisoryboardofKapitalskadruæbafunctionedinthefollowingcompositionuptoand
including31January2015:samolozej(Chairman),aldoTernovec(DeputyChairman),alek-
sanderMervar,Msc,stanislavseniËar,anabilbijaandladislavRoæiË,Msc.Thetermsofoffice
ofthefollowingmembersofthesupervisoryboardendedon31January2015:aldoTernovec,
anabilbijaandladislavRoæiË,Msc.Thefollowingpersonswerethereforeappointedasnew
membersofthesupervisoryboardattheCompany’sGeneralMeetingon30January2015:Dr
borisænidariË,CirilasurinaZajcandladislavRoæiË,Msc.Thefour-yeartermofofficeofthe
threeaforementionedmembersofthesupervisoryboardbeganon1february2015.atthe
84thsessionofthesupervisoryboardon5March2015,DrborisænidariËwasappointedDep-
utyChairmanofthesupervisoryboard.Heperformedthatfunctionuntilheassumedhisfunc-
tionasmemberofKapitalskadruæba’sManagementboard.forthisreason,CirilasurinaZajc
wasappointedDeputyChairwomanofthesupervisoryboardatthe96thsessionoftheafore-
mentionedbodyon13november2015.MsZajc’stermofofficebeganon23november2015.
Thesupervisoryboardmetat17sessionsduringthe2015financialyearasfollows:10regu-
larsessionandsevencorrespondencesessions.Thesupervisoryboardmetatoneregular
sessionandonecorrespondencesessioninthecompositioninwhichitfunctioneduntil31
January2015.
TheKapitalskadruæbaGroupcomprisestheparentcompanyKapitalskadruæba,Modra
zavarovalnica, d. d. (hereinafter: Modra zavarovalnica) and steklarska nova Rogaπka
16
slatina,d.o.o.(inbankruptcy).InadditiontotheoperationsofKapitalskadruæba,thesuper-
visoryboardalsocontinuouslymonitoredtheoperationsofModrazavarovalnica.
areviewoftheimportantmattersdiscussedbythesupervisoryboardin2015follows:
- ParticularattentioninthemonitoringofKapitalskadruæba’soperationsin2015wasgiven
tomonitoringthemanagementoftheCompany’sassets,andtomonitoringthemanage-
mentoftheCompulsorysupplementaryPensionInsurancefundoftheRepublicofslove-
nia(soDPZ)andtheGuaranteefundoftheCompulsorysupplementaryPensionInsurance
fundoftheRepublicofslovenia(KssoDPZ),whicharemanagedbyKapitalskadruæba.
- ConfirmationoftheannualreportsofKapitalskadruæbaandtheKapitalskadruæbaGroup
forthe2014financialyearandtheproposaltotheGeneralMeetingfortheappointmentof
anauditorforthe2015financialyear.
- ConsenttoKapitalskadruæba’sbusiness-financialplanfor2016.
- InaccordancewiththeprovisionsoftheCompany’sarticlesofassociation,thesupervi-
soryboardalsogavetheManagementboarditsconsenttoconcludetransactionsforthe
purchaseandsaleofsecuritiesandparticipatinginterestsincaseswhenthevalueofaspe-
cifictransactionexceededthevaluesetoutintherelevantsupervisoryboardresolution.
- atits96thsessionon13november2015,thesupervisoryboardrelievedanjastrojin
©tampar,MscofherfunctionasmemberoftheManagementboard,effective30novem-
ber2015,basedontheresignationsubmittedbyMsstrojin©tampar,andappointedDr
borisænidariËtoserveasmemberoftheManagementboardforatermofofficeofone
year.TheappointmentofatemporarymembertotheManagementboardfromthemem-
bersofthesupervisoryboardwascarriedoutbasedontheprovisionsofarticle33ofthe
Company’sarticlesofassociationandthesecondparagraphofarticle273oftheZGD-1.
DuringhistermofofficeasamemberofKapitalskadruæba’sManagementboard,Dræni-
dariË’sfunctionsasmemberandDeputyChairmanoftheCompany’ssupervisoryboard
aresuspended.
- forthepurposeofappointingamembertothesupervisoryboardonthebasisofapro-
posalbyanational-levelfederation/organisationofpensionersfortheperiodinwhichthe
functionofexistingsupervisoryboardmemberDrborisænidariËissuspended,thesuper-
visoryboarddrewupaproposalfortheappointmentofamemberbasedontheproposal
receivedfromtheassociationofPensionersocietiesofslovenia.
anaccreditationcommitteealsofunctionedasanadvisorybodytothesupervisoryboard
in2015.Theaforementionedcommittee’staskwastoprovidesupporttothesupervisory
boardinthesupervisionofthemanagementoftheCompany’stransactionsastheyrelateto
thegovernanceofcompaniesinwhichKapitalskadruæbaholdscapitalinvestments.
Thefour-memberauditcommitteeisapermanentworkingbodyofthesupervisoryboard,
andcloselymonitorstheoperationsoftheCompanyandtheworkoftheManagementboard
fortheneedsofthesupervisoryboard’sdecisions.Thesupervisoryboard’sauditcommittee
functionedinthefollowingcompositionin2015:ladislavRoæiË,Msc(chairman),aleksander
Mervar,Mscandanabilbija(membersuntil31January2015),CirilasurinaZajc(member
since5March2015),andMojcaVerbiË(externalmember).Theauditcommitteemetatten
sessionsin2015,oneofwhichwasheldinthecompositionthatfunctioneduntil31January
2015.Initswork,theauditcommitteeappliedtherecommendationsoftheslovenianDirec-
tors’associationforauditcommitteesandtherecommendationsoftheslovenianInstituteof
auditors,aswellastherulesofprocedureoftheauditcommitteeasadoptedbythesupervi-
soryboard.Theauditcommitteerepresentedapermanentworkingbodyofthesupervisory
board,andcloselymonitoredtheoperationsoftheCompanyandtheworkoftheManage-
mentboardfortheneedsofthesupervisoryboard’sdecisions.Inadditiontoitslegallypre-
scribedtasks,theauditcommitteealsoreviewedtheinterimreportsontheoperationsof
Kapitalskadruæba,itssubsidiariesandthepensionfundsunderKapitalskadruæba’smanage-
ment(soDPZandKssoDPZ).Italsomonitoredtheworkoftheinternalauditdepartment.
17
Theauditcommitteealsocarriedoutaself-assessment.Theauditcommitteeregularlybriefed
thesupervisoryboardonitsworkduringthelatter’ssessions.
AssessmentoftheworkoftheManagementBoardandSupervisoryBoard
onthebasisoftheaforementionedcontinuousmonitoringandsupervisionoftheoperations
ofKapitalskadruæbaanditssubsidiariesduringthe2015financialyear,andbasedonareview
oftheconsolidatedannualreportoftheKapitalskadruæbaGroupfor2015compiledandsub-
mittedbytheManagementboard,thesupervisoryboardassessesthattheannualreport
anddisclosurescontainedthereinreflecttheactualsituationandpositionoftheKapitalska
druæbaGroup.ThesupervisoryboardfindsthattheManagementboardpreparedmateri-
alsinatimelymanner,whichfacilitatedqualityinformationandthethoroughdiscussionof
themostimportantoperationalmatters.TheManagementboardalsoprovidedexhaustive
responsestothesupervisoryboard’sadditionalquestionsandinitiatives.TheManagement
board’sreportingtothesupervisoryboardduringthe2015financialyearenabledthelatter
tocarryoutitssupervisoryrolesatisfactorily.
b)SupervisoryBoard’spositionontheauditreport
Pursuanttothesecondparagraphofarticle282oftheZGD-1,thesupervisoryboardreviewed
anddiscussedtheauditreportrelatingtotheauditofthefinancialstatementsofKapitalska
druæbaGroupfor2015,whichwasconductedbytheauditfirmDeloitterevizijad.o.o.,lju-
bljana.Thesupervisoryboardfindsthattheauditorperformeditstaskinaccordancewith
thelaw,auditingrulesandinternationalauditingstandards.Thesupervisoryboardhasno
remarksregardingtheauditreport.
c)Decisionregardingtheapprovaloftheannualreportfor2015
Pursuanttotheprovisionsofarticle282oftheCompaniesact,thesupervisoryboardhereby
approvestheconsolidatedannualreportoftheKapitalskadruæbaGroupfor2015.
d)ProposaltotheGeneralMeetingonthedischargeoftheManagementBoardandtheSupervisoryBoard
Takingintoaccountpointsa),b)andc)ofthisreport,thesupervisoryboardproposesthat
theGeneralMeetingofKapitalskadruæbaadoptadecisiongrantingdischargetotheCom-
pany’sManagementboardandsupervisoryboardfortheirworkduringthe2015financial
yearpursuanttotheprovisionofarticle294oftheZGD-1.
StanislavSeniËarChairmanofthesupervisoryboard
20 Organisational structure of the Kapitalska druæba Group
TheKapitalskadruæbaGroupcomprisestheparentcompanyKapitalskadruæba,Modra
zavarovalnicaandsteklarskanovaRogaπkaslatina.
astheparentcompany,KapitalskadruæbaincludestheModrazavarovalnicainitsconsoli-
datedfinancialstatements.
Kapitalskadruæba’scapitalinvestmentinsharesofPDP,d.d.wassoldtosDHin2015in
accordancewiththeprovisionofthefirstparagraphofarticle82oftheZsDH-1.PDP,d.d.
isthusnolongerasubsidiaryofKapitalskadruæba.
KapitalskadruæbadoesnotincludethesubsidiarysteklarskanovaRogaπkaslatinainitscon-
solidatedfinancialstatements,astheinclusionofthefinancialstatementsoftheaforemen-
tionedsubsidiaryisnotmateriallysignificantforatrueandfairpresentationofthefinancial
statementsoftheKapitalskadruæbaGroupasawhole.
4.1 RePoRTInGoneMPloyees
attheendof2015theKapitalskadruæbaGrouphad115employeesbrokendownasfollows:
59employeesatKapitalskadruæbaand56employeesatModrazavarovalnica.
Table1: Number of employees in the Kapitalska druæba Group
balanceasat31December2015
KapitalskadruæbaGroup 115
21Macroeconomic background of operations
5.1 InflaTIon
annualandaverageinflationrateswerenegativeattheendof2015,withbothstandingat
−0.5%,whileaverageandannualinflationwere0.2%attheendof2014.
Pricesinthefollowingcategoriesrecordedthesharpestdeclinein2015:transportation(down
5.2%),recreationandculture(down2.3%),householdequipment(down1.1%)andhousing
(down1.0%).Thefollowingcategoriesrecordedariseinprices:communicationservices(up
5.3%),foodandnon-alcoholicbeverages(up1.5%),cateringandaccommodationservices(up
1.4%),miscellaneousgoodsandservices(up1.1%),clothingandfootwear(up0.8%),health-
careservices(up0.7%)andalcoholicbeveragesandtobaccoproducts(up0.1%).Therewas
nochange,onaverage,inthepricesofeducationservices.
lowerpricesofrefinedpetroleumproductscontributedmost(0.89percentagepoints)to
deflation.Thepricesofliquidfuelweredown16.3%,whilethepricesofotherfuelsandlubri-
cantsweredown12.7%.Higherpricesoftelephoneandinternetservices(whichwereup
5.8%)contributed0.25percentagepointstoannualpricegrowth,whilehigherfoodprices
contributed0.23percentagepoints.
figure1: Change in monthly and annual growth in consumer prices in 2015 (in %)Source:StatisticalOfficeoftheRepublicofSlovenia
Monthly growth rate
-1.4
-1.2
-1.0
-0.8
-0.6
-0.4
-0.2
0.0
0.2
0.4
0.6
1.0
0.8
Dec.Nov.Oct.Sep.Aug.Jul.Jun.MayApr.Mar.Feb.Jan.
22
Annual growth rate
5.2 GRossDoMesTICPRoDUCT
Grossdomesticproduct(GDP)wasup3.3%inrealtermsinthefinalquarterof2015relative
tothefinalquarterof2014.economicactivity,adjustedfortheseasonandnumberofwork-
ingdays,wasup0.6%relativetothethirdquarterof2015.accordingtoinitialestimates,
GDPwasupby2.9%overallinrealtermsin2015.
figure2: Real year-on-year growth in GDP by quarter in 2015 (in %)Source:StatisticalOfficeoftheRepublicofSlovenia
5.3 eMPloyMenTanDWaGes
accordingtofiguresfromthestatisticalofficeoftheRepublicofslovenia,thetotalwork-
forcestoodat917thousandinDecember2015.Theworkforceinemploymenttotalled
804thousand,up0.5%ontheendofDecember2014.Thenumberofregisteredunem-
ployedpersonsstoodat113thousandattheendofDecember2015,adecreaseof5.3%
relativetothenumberofregisteredunemployedpersonsayearearlier.Theregistered
unemploymentratestoodat12.3%inDecember2015,comparedwith10.7%inthefinal
quarterof2014.
TheaveragemonthlygrosswagewaseUR1,594.93inDecember2015,whilethenetwage
waseUR1,035.58.
-0.8
-0.7
-0.6
-0.5
-0.4
-0.3
-0.2
-0.1
0.0
Dec.Nov.Oct.Sep.Aug.Jul.Jun.MayApr.Mar.Feb.Jan.
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4th quarter3rd quarter2nd quarter1st quarter
23
5.4 MoneyMaRKeT
5.4.1 Interestrates
Thereferenceinterbankinterestratefortheeuroarea,thesix-montheURIboR,fluctuated
between−0.051%and0.171%in2015.ThekeyinterestrateoftheeuropeanCentralbank
(eCb)wasunchanged,whiletheinterestrateonthedepositfacilitystoodat−0.3%andrep-
resentstherateatwhichexcessliquidityplacedattheeCbbearsinterest.
Theyield-to-maturityon10-yearGermangovernmentbondsroseby0.088percentage
pointsin2015tostandat0.629%.Thelowestyieldof0.075%wasachievedinthemiddle
ofapril.
figure3: Movement in the yield-to-maturity on 10-year German government bonds and the 6-month EURIBOR in 2015 (in %)Source:Bloomberg
■ 10-yearGermanbonds■ 6-monthEURIBOR
5.4.2 Exchangerate
TheUsdollardepreciatedbyaround10.3%againsttheeurointheperiodJanuarytoDecem-
ber2015.TheUsdollar/euroexchangeratestoodat1.0862attheendoftheyear,andaver-
aged1.1102for2015.
figure4: Movement in the US dollar/euro exchange rate in 2015Source:Bloomberg
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
Dec.Nov.Oct.Sep.Aug.Jul.Jun.MayApr.Mar.Feb.Jan.
1.00
1.05
1.10
1.15
1.20
1.25
Dec.Nov.Oct.Sep.Aug.Jul.Jun.MayApr.Mar.Feb.Jan.
24
5.5 CaPITalMaRKeT
5.5.1 Equitymarket
Thevaluesofshareindicesmeasuredineurosrosein2015.TheJapanesenikkei225index
roseby20.4%duringtheyear,followedbytheMsCIglobalindex,whichrecordedgrowth
of11%,theGermanDaX,whichrecordedgrowthof9.6%andtheUsDowJones,which
recordedgrowthof8.9%measuredineuros.ThesloveniansbIToPindexrecordedthe
sharpestdecline,of11.2%.
figure5: Movement in the Slovenian SBI TOP and selected foreign stock indices in 2015 in euros (index: 1 January 2015 = 100) Source:Bloomberg
■ SBITOP■ DOWJONESINDUS.AVG■ DAX■ NIKKEI225■ MSCI
5.5.2 Debtmarket
TheIboXXeURsovereignsTRgovernmentbondindexgained1.63%in2015,whilethe
IboXXeURCorporatesTRcorporatebondindexwasdown0.66%.
figure6: Movement in the IBOXX EUR Corporates TR corporate bond index and the IBOXX EUR Sovereigns TR government bond index in 2015 (index: 1 January 2015 = 100)Source:Bloomberg
■ Governmentbonds■ Corporatebonds
80
90
100
110
120
130
140
Dec.Nov.Oct.Sep.Aug.Jul.Jun.MayApr.Mar.Feb.Jan.
97
98
99
100
101
102
103
104
105
Dec.Nov.Oct.Sep.Aug.Jul.Jun.MayApr.Mar.Feb.Jan.
25
5.6 PRICeofoIl
ThepriceofWestTexasIntermediate(WTI)crudeoilfellfromUsD53.27perbarrel(159
litres)atthebeginningof2015toUsD37.04attheendoftheyear.ThepriceofWTIcrude
averagedUsD48.80in2015,downontheaveragepricein2014ofUsD92.89.Thepriceof
brentcrudeaveragedUsD53.56abarrelin2015,9.8%higherthanWTIcrude.
figure7: Movement in prices of WTI crude and North Sea Brent crude in 2015 (in USD per 159-litre barrel)Source:Bloomberg
■ WTIcrude■ Brentcrude
30
35
40
45
50
55
60
65
70
Dec.Nov.Oct.Sep.Aug.Jul.Jun.MayApr.Mar.Feb.Jan.
26 Performance of the Kapitalska druæba Group by segment in 2015
TheKapitalskadruæbaGroupcomprisestheparentcompanyKapitalskadruæba,Modra
zavarovalnicaandsteklarskanovaRogaπkaslatina(inbankruptcy).TheassociatesofKapi-
talskadruæbaarepresentedinnoteno.17ofthefinancialreport.
6.1 KaPITalsKaDRUæba,D.D.
6.1.1 Capitalinvestmentmanagement
Kapitalskadruæbaclassifiesinvestmentstothefollowingtwogroupswithregardtothe
methodofmanagement:
�� capitalinvestments,and
�� portfolioinvestments.
Table2illustratesthecompositionoffinancialassets,whileadetaileddescriptionofthe
aforementionedgroupsfollows.
Table2: Composition of Kapitalska druæba’s financial assets as at 31 December 2015 with regard to managementinEUR000
Typeofinvestment Value Proportion
Capitalinvestments 528,603 56.8%
-strategicinvestments 180,754 19.4%
-Materialinvestments 295,536 31.7%
-Portfolioinvestments 51,039 5.5%
-Investmentsinbankruptcyorliquidation 1,274 0.1%
Portfolioinvestments 402,417 43.2%
-equityportfolioinvestments 171,337 18.4%
-Debtportfolioinvestments 105,159 11.3%
27
Typeofinvestment Value Proportion
-Moneymarket 2 125,921 13.5%
Total financial assets 931,020 100.0%
6.1.1.1 Compositionofcapitalinvestments
Kapitalskadruæba’scapitalinvestmentscomprisedomesticequityinvestmentsincorporatesharesandparticipatingintereststhattheCompanyprimarilyobtainedincorporateowner-shiptransformationprocesses.
TheCompanyheldatotalof45suchinvestmentsattheendof2015.ofthoseinvestments,Kapitalskadruæbahad37so-calledactiveinvestments,including32investmentsinpubliclimitedcompaniesandfiveinvestmentsinlimitedliabilitycompanies.Inadditiontoactiveinvestments,Kapitalskadruæbaalsoheldsixinvestmentsinbankruptcyproceedingsandtwoinvestmentsinliquidationproceedings.finalbankruptcyproceedingwereinitiatedagainststeklarskanovaRogaπkaslatinaon21May2009.
ThevalueofcapitalinvestmentswaseUR528,603thousandasat31December2015,adecreaseofeUR31,729thousandonthepreviousyear.
InaccordancewiththeclassificationofinvestmentssetoutintheDecreeonthestrategyforManagingstateCapitalInvestments(odsUKnD)adoptedbythenationalassemblyoftheRepublicofsloveniainJuly2015,Kapitalskadruæbaclassifiesitscapitalinvestmentsas
strategic,materialandportfolio.
Table3: Breakdown of Kapitalska druæba’s capital investments as at 31 December 2015 in accordance with the Decree on the Strategy for Managing State Capital InvestmentsinEUR000
Typeofinvestment no.ofinvestments ValueProportionofcapitalinvestmentportfolio
strategicinvestments 10 180,754 34.2%
Materialinvestments 9 295,536 55.9%
Portfolioinvestments 183 51,039 9.7%
Investmentsinbankruptcyorliquidation 8 1,274 0.2%
Total capital investments 45 528,603 100.0%
Table4: Breakdown of Kapitalska druæba’s capital investments as at 31 December 2014 in accordance with Kapitalska druæba’s asset management strategyinEUR000
Typeofinvestment no.ofinvestments ValueProportionofcapitalinvestmentportfolio
strategicinvestments 2 360,385 64.3%
Marketableinvestments 15 168,562 30.1%
non-marketableinvestments 254 30,106 5.4%
Investmentsinbankruptcyorliquidation 9 1,279 0.2%
Total capital investments 51 560,332 100.0%
2 MoneymarketinvestmentsalsoincludecashintheamountofeUR38,602thousand.3 Kapitalskadruæbaholdsbothpreferencesharesandordinarysharesinonecompanyclassifiedinportfolioinvestments.bothforms
ofsharesaredeemedoneinvestmentintheaforementionedcompany.4 Kapitalskadruæbaholdsbothpreferencesharesandordinarysharesinonecompanyclassifiedinnon-marketableinvestments.both
formsofsharesaredeemedoneinvestmentintheaforementionedcompany.
28
Investmentswereclassifiedin2014basedonKapitalskadruæba’sinternalclassification.
TheCompany’stenlargestcapitalinvestmentsandtheproportionoftherespectivecompa-
nies’sharecapitalaccountedforbythoseinvestmentsaredisclosedinTable5.
Table5: Ten largest capital investments of Kapitalska druæba by value as at 31 December 2015in%
Companyname Proportionofcompany’ssharecapital
Krka,d.d. 10.65
Modrazavarovalnica,d.d. 100.00
Petrol,d.d. 8.27
Telekomslovenije,d.d. 5.59
Gorenje,d.d. 16.37
lukaKoper,d.d. 4.98
Hit,d.d. 20.32
TermeČateæ,d.d. 23.79
Unionhoteli,d.d. 18.75
elektroMaribor,d.d. 1.61
InvestmentsinwhichKapitalskadruæbaholdsalessthan20%ownershipstakecomprisethe
majorityofcapitalinvestments.so-calledactiveinvestmentsinclude30suchinvestments,
aswellasfourinvestmentsinbankruptcyandliquidationproceedings.adetailedoverview
ofthecompositionofinvestmentsintermsofsizeofownershipstakeisgiveninTable6.
Table6: Composition of capital investments in terms of size of ownership stake as at 31 December 2015
ownershipstakeinsharecapital activeinvestmentsInvestmentsinbank-ruptcyorliquidation
Upto9.99% 22 3
from10.00%to19.99% 9 1
from20.00%to49.99%(associate) 5 3
from50.00%to100.00%(subsidiary) 1 1
Total number of investments 37 8
6.1.1.2 SalesofcompaniesbyKapitalskadruæba
Withtheaimofensuringthetransparencyofsalesproceduresandtheequaltreatmentof
bidders,thesaleofcapitalinvestmentsiscarriedoutviapublictender.Kapitalskadruæba
publishedtwopublictendersforthepurchaseofsharesandparticipatinginterestsin2015.
In2015Kapitalskadruæbareceived10bidsforthepurchaseofsharesandparticipatinginter-
estsrelatingtoninedifferentcapitalinvestmentsheldbytheCompany.Themajorityofbids
wereunacceptableforKapitalskadruæbabecausethebidpricesweretoolow.
Kapitalskadruæbasoldofffourcapitalinvestmentsintheirentiretyin2015inthetotalamount
ofeUR22,354thousand.ThecapitalinvestmentinsharesofPivovarnalaπko,d.d.wassoldin
thescopeofajointsalebyshareholderswhoheldamajorityinterest.Tworesultswereachieved
29
throughthecooperationagreementwithPivovarnalaπko,d.d.:therecapitalisationofthecom-
panyandtherepaymentofitsdebt,aswellasthesimultaneoussaleofthesharesofmajority
owners.KapitalskadruæbaandthebaMCconductedthesale,withthehelpoffinancialand
legaladvisors,onbehalfoftheentireconsortiumofsellers.Thecapitalinvestmentinsharesof
Velana,d.d.wassoldinthescopeofatakeoverbid.ThecapitalinvestmentinsharesofHTG,d.d.
wassoldthroughdirectnegotiationswiththebuyer.ThecapitalinvestmentinsharesofPDP,d.d.
wassoldtosDHinaccordancewiththeprovisionofthefirstparagraphofarticle82oftheZsDH-1.
ThecapitalinvestmentinsharesofCimos,d.d.wasexcludedfromKapitalskadruæba’sbooks
ofaccountinaccordancewiththefinaldecisionconfirmingcompulsorycomposition,which
alsoincludedtheexpropriationofthesharesofcurrentshareholders,whilethecapitalinvest-
mentinCasinoljubljana,d.d.wasexcludedfromKapitalskadruæba’sbooksofaccountbased
ontheconclusionofbankruptcyproceedings.
6.1.1.3 Purchasesofcompanies
Kapitalskadruæbadidnotparticipateinanycorporaterecapitalisationsin2015,nordidit
acceptanybidsforthepurchaseofcapitalinvestments.
6.1.1.4 Dividendsofdomesticcompanies
Dividendincomewasupin2015.KapitalskadruæbarecordedeUR24,782thousandindomes-
ticcorporatedividendsin2015,anincreaseofeUR6,031thousandrelativeto2014,whendivi-
dendstotalledeUR18,751thousand.Thetenlargestcapitalinvestmentsintermsofdividends
accountedfor98.2%ofalldividendsfromcapitalinvestmentsheldbyKapitalskadruæba.
Thepaymentofdividendsin2015wasapprovedbythegeneralmeetingsof25companiesin
whichKapitalskadruæbaheldacapitalinvestment,comparedwith2014,whenthepayment
ofdividendswasapprovedbythegeneralmeetingsof21companiesinwhichKapitalska
druæbaheldacapitalinvestment.
Table7illustratesthehighestdividendincomegeneratedin2015bycapitalinvestmentsheld
byKapitalskadruæba.
Table7: Capital investments that generated the highest dividend income in 2015 and 2014
Issuer
Dividendspersharein2015
(eUR)
Dividendspersharein2014
(eUR)
Totaldividendsin2015
(ineUR000)
Totaldividendsin2014
(ineUR000)
Krka,d.d. 2.50 2.10 8,733 7,335
Telekomslovenije,d.d. 10.00 10.00 3,652 3,652
Petrol,d.d. 11.70 10.10 2,020 1,744
lukaKoper,d.d. 0.94 0.16 655 111
Gorenje,d.d. 0.06 0.00 240 0
HoteliUnion,d.d. 0.33 0.85 111 286
elektroMaribor,d.d. 0.12 0.09 65 49
6.1.1.5 CorporateGovernanceCodeforCompanieswithStateCapitalInvestmentsandtheexercisingofvotingrightsatgeneralmeetings
Inconnectionwiththemanagementofitscapitalinvestmentsintheperiod1January2015
to31December2015,Kapitalskadruæbaapplied,mutatis mutandis,theCorporateGover-
nanceCodeforCompanieswithstateCapitalInvestments,whichwasadoptedbysDHon
19December2014(hereinafter:theCode).
30
asanactiveplayeronthesloveniancapitalmarket,Kapitalskadruæbastrivestointroducein
practiceacontemporaryformofcorporategovernance,theaimofwhichistoensureclear,
predefinedandpubliclyknownprinciples,proceduresandcriteriabywhichtheCompany
actsinexercisingitsownershiprights.Tothatend,theCorporateGovernanceCodeofKapi-
talskadruæbawasusedfrom2009untilDecember2014,anddefinedthepolicyandproce-
duresforexercisingKapitalskadruæba’smanagementrightsincompaniesinwhichitholds
anownershipstake.InDecember2014,sDHadoptedtheaforementionedCode,whichKapi-
talskadruæbaalsoappliesmutatis mutandis toensureuniformoperations.Thedocumentis
publishedonsDH’swebsite.
InadditiontotheCode,Kapitalskadruæbaalsoapplieditsownbasesforvotingatthegen-
eralmeetingsofcompanieswhenmanagingcapitalinvestmentsin2015.Kapitalskadruæba
updatesthebasesforvotingatgeneralmeetingseveryyear,priortotheconveningthereof.
Thesebases,inter alia,definetheremunerationpolicyforsupervisoryboards,management
committeesandmanagementboards,thedividendpolicy,theuseofdistributableprofit,
recapitalisationsviaauthorisedcapital,theacquisitionoftreasurysharesandtheintroduc-
tionofasingle-tiergovernancesystem.TheaforementioneddocumentispublishedonKapi-
talskadruæba’swebsite.
Kapitalskadruæbaexerciseditsmanagementrightsatallgeneralmeetingsofcompanieswith
aregisteredofficeinsloveniainwhichtheCompanyhasanequityholdingthatitmanages
onitsownbehalforonbehalfofthesoDPZ.
Kapitalskadruæbawasentitledtoparticipateonitsownbehalfandonaccountofthepen-
sionfundundermanagementin50generalmeetingsofshareholdersorpartnersofcom-
paniesin2015.RepresentativesofKapitalskadruæbaparticipatedin16generalmeetings
withauthorisationtovote.Inaccordancewitharticle53oftheZsDH-1,sDHexercisedthe
votingrightsofKapitalskadruæbaat32generalmeetingsinthenameandonaccountof
thelatter.Twogeneralmeetingswerecancelledpriortothedateofthemeetingorresched-
uledtoanotherdate.
Whenassessingproposedgeneralmeetingresolutionsandformulatingopinionsforvoting
atgeneralmeetings,KapitalskadruæbacompliedwiththeCodeandinternalbasesforvoting
atgeneralmeetings.Withrespecttotheremunerationofsupervisoryboardsandmanage-
mentboards,Kapitalskadruæbaapplied,mutatis mutandis,therecommendedlevelofwages
fortheperformanceofaparticularfunctionandforsessionfeessetoutintheCode,and
tookintoaccounttheactGoverningtheearningsofManagementstaffatCompaniesunder
theMajorityownershipoftheRepublicofsloveniaandself-GoverninglocalCommunities
(ZPPoGD),asregardstheearningsandotherrightsofmanagementboards,executivedirec-
torsandthemanagementstaffofcompanies.
KapitalskadruæbaactedinaccordancewiththeCodeatallgeneralmeetingsattendedbyits
representativesin2015.DisclosuresregardingKapitalskadruæba’sconductatgeneralmeet-
ingsarepublishedontheCompany’swebsite.
Table8: Participation at the general meetings
formofparticipation no.ofgeneralmeetings
ParticipationbyemployeesofKapitalskadruæbawithauthorisationtovote 16
ParticipationbysDH(authorisationtovotebysDH) 32
Cancelledorrescheduledgeneralmeetings 2
Total 50
31
6.1.1.6 CodeofConductoftheKapitalskadruæbaGroup
InadditiontoKapitalskadruæba,theKapitalskadruæbaGroupincludesthesubsidiaryModra
zavarovalnica.
In2015KapitalskadruæbaadoptedamendmentstotheCodeofConductoftheKapitalska
druæbaGroup(hereinafter:theCodeoftheGroup)duetothesaleofthesubsidiaryPDP.The
CodeoftheGroupisadocumentthatincludestheminimumstandardsofoperationsofGroup
companies,andthatdefinescooperationinspecificareasofoperationsandthemonitoring
oftheGroup’soperationsbytheparentcompany.
TheGuidelinesontheReportingofsubsidiariestotheParentCompanyalsorepresent
anintegralpartoftheCodeoftheGroup.Theaforementionedguidelinessetoutthe
content,deadlinesandmethodsofreportingtotheparentcompanybytheGroup’s
subsidiaries.
6.1.1.7 Managementofcapitalinvestmentsinthefuture
ThenewsloveniansovereignHoldingCompanyact(ZsDH-1)enteredintoforceatthe
endofapril2014.Themanagementofinvestmentsonbehalfandontheaccountof
theRepublicofsloveniaremainedtheresponsibilityofsDH,evenfollowingtheentry
intoforceoftheZsDH-1.TherewasapartialchangeinKapitalskadruæba’sannualobli-
gationtoprovidefundingtotheZPIZ:basedontheprovisionofthethirdparagraphof
article52oftheZsDH-1,theCompanymusttransferfundsintheamountofeUR50
millioneveryyeartotheZPIZbynolaterthan29september,primarilyforthepurpose
ofadjustingpensions,oraproportionallyloweramountiftheamountforadjustingpen-
sionsislower.
article79oftheZsDH-1statesthatKapitalskadruæbamustbetransformedintoaninde-
pendentandautonomousdemographicreservefundbynolaterthan31December2015,as
setoutinthelawgoverningpensionanddisabilityinsurance,followingtheprioradoptionof
therelevantlaw.Thesamearticlealsostatesthat10%ofproceedsfromthesaleofcapital
investmentsheldbytheRepublicofsloveniamustbetransferredtoaspecialaccountatthe
Ministryoffinance.Theaforementionedfundsmaybeusedexclusivelytofinancethedemo-
graphicreservefund.alongsidetheformulationofademographicreservefund,theZsDH-1
alsoenvisagesthetransferoftheZPIZ’sinvestmentinZavarovalnicaTriglav,d.d.toKapi-
talskadruæba.noactgoverningthetransformationofKapitalskadruæbaintoademographic
reservefundhasbeenadoptedtodate.
sDHwillmanageinvestmentsinaccordancewiththeZsDH-1,theodsUKnD,therelevant
investmentmanagementpolicyandtheCorporateGovernanceCode,andonthebasisof
theannualinvestmentmanagementplan.TheodsUKnDalsoincludestheclassificationof
investments(thedefinitionandclassificationofcapitalinvestmentsintostrategic,mate-
rialandportfolioinvestments),towhichKapitalskadruæbaisalsoboundwhenmanaging
investments.Theannualinvestmentmanagementplan,whichmustbeadoptedbynolater
thantheendofnovemberforthenextcalendaryear,definessDH’spreciseobjectivesin
themanagementofspecificinvestments,aswellasmeasuresandguidelinesforachiev-
ingthoseobjectives.
6.1.2 Managementofportfolioinvestments
6.1.2.1 Equityportfolioinvestments
equityportfolioinvestmentsincludeforeignsharesandinvestmentcouponsfromtheinvest-
mentfundsofdomesticandforeignissuers.Thevalueofequityportfolioinvestmentassets
waseUR171,337thousandasat31December2015.
32
Table9: Composition of equity portfolio investments as at 31 December 2015inEUR000
Typeofinvestment ValueProportionofequity
portfolioinvestments
foreignshares 8,338 4.9%
Investmentfunds 162,999 95.1%
domesticinvestmentfunds 10 0.0%
foreigninvestmentfunds 162,989 95.1%
Total equity portfolio investments 171,337 100.0%
Thefivelargestinvestmentsaccountedforatotalof58.5%oftheportfolioofequityinvest-
mentsasat31December2015.Theseinvestmentsincludedindexfundsrepresentedbythe
MsCIWorldglobalstockindices(sMsWlDGyandXMWoGy),anindexfundrepresented
bytheUss&P500(sPyUs),anindexfundrepresentedbytheUsIXTtechnologysector
index(XlKUs)andanindexfundrepresentedbytheGermanDaX(DaXeXGR).
6.1.2.2 Debtportfolioinvestments
ThebalanceofdebtportfolioinvestmentsstoodateUR105,159thousandattheendof2015.
at86.5%,domesticbondsaccountedforthehighestproportionofdebtportfolioinvest-
ments.InvestmentsindomesticbondstotalledeUR90,936thousand,whileinvestmentsin
foreignbondstotalledeUR11,241thousand.Theremainderwasaccountedforbyclaimsfor
accruedinterest.
TheprimaryfocusofKapitalskadruæba’sinvestmentactivitiesin2015wasonsecurityand
maintainingthevalueofassetsduetoanincreaseinthegenerallevelofrisk.
Table10: Composition of debt investments as at 31 December 2015inEUR000
Typeofinvestment ValueProportionofdebt
portfolioinvestments
Domesticbonds 90,936 86.5%
-domesticgovernmentbonds 78,096 74.3%
-domesticcorporateandbankbonds 12,840 12.2%
foreignbonds 11,241 10.7%
-foreigngovernmentbonds 1,172 1.1%
-foreigncorporateandbankbonds 10,069 9.6%
Claimsforinterest 2,982 2.8%
Total debt portfolio investments 105,159 100.0%
Thefivelargestinvestments,togetherwithaccruedinterest,accountedforatotalof56.9%
oftheportfolioofdebtinvestmentsasat31December2015.allfiveinvestmentswereindif-
ferentissues(nos.59,66,67,69and70)ofsloveniangovernmentbonds.
6.1.2.3 Moneymarketinvestments
ThebalanceofmoneymarketinvestmentswaseUR125,921thousandattheendof2015.
loansgranted(deposits)accountforthemajorityoftheaforementionedinvestments.
33
Table11: Composition of money market investments as at 31 December 2015inEUR000
Typeofinvestment ValueProportionoftheportfolioof
moneymarketinvestments
loansgranted(deposits) 86,509 68.7%
Cashandcashequivalents 38,602 30.7%
-Cashontransactionaccountsatbanks 38,585 30.7%
-eurocalldeposits 17 0.0%
Commercialpaper 810 0.6%
Total money market investments 125,921 100.0%
6.1.3 TransferstothePensionandDisabilityInsuranceInstitute
Inaccordancewiththethirdparagraphofarticle52oftheZsDH-1,Kapitalskadruæba’s
annualobligationtotheZPIZdependsontheamountoftheadjustmenttopensions,
whichislimitedtoeUR50million.InaccordancewiththeprovisionsoftheImplementa-
tionofthebudgetoftheRepublicofsloveniafor2014and2015act(ZIPRs1415),Kapi-
talskadruæbatransferredeUR19milliontotheZPIZin2015fortheannualbonuspaid
topensioners.KapitalskadruæbahastransferredatotalofeUR664,321thousandtothe
budgetoftheZPIZ.
Inaccordancewitharticle67oftheZIPRs1617,KapitalskadruæbamusttransfereUR50mil-
lionayeartotheZPIZin2016and2017.
6.1.4 Investmentproperty
Kapitalskadruæbaholdsinvestmentpropertyinthefollowingcommercialbuildings:
�� steklenidvor,Dunajskacesta119,ljubljana;
�� beæigrajskidvor,Dunajskacesta56and58,andKræiËevaulica3,ljubljana;
�� nebotiËnik,©tefanovaulica1,3and5,ljubljana;and
�� smelt,Dunajskacesta160,ljubljana.
alloftheaforementionedpropertiesarecurrentlyleased,excepttheconferencehallinthe
beæigrajskidvorcommercialbuilding,whichKapitalskadruæbawillleasefortheorganisation
ofvariousevents.
6.1.5 Pensionfundmanagement
6.1.5.1 OperationsoftheSODPZ
Pursuanttothelaw,KapitalskadruæbahasbeenthemanageroftheCompulsorysupplemen-
taryPensionInsurancefundoftheRepublicofslovenia(soDPZ)sinceitsestablishmentin
2001.ThesoDPZisamutualpensionfundthatprovidesoccupationalinsuranceinaccord-
ancewiththeZPIZ-2.
ThesoDPZisintendedforpolicyholderswhoperformespeciallydifficultworkandworkthat
isharmfultothehealth,andforpolicyholderswhoperformworkthatcannolongerbeper-
formedsuccessfullyafteracertainage.ThesoDPZcomprisesassetsthatarefinancedby
fundscollectedthroughthepaymentofoccupationalinsurancecontributionsandrevenues
generatedbythemanagementofthosefunds,andareearmarkedexclusivelytocoverliabili-
tiestooccupationalinsurancepolicyholders.
34
ThesoDPZhad45,664policyholdersasat31December2015.Theactualreturnonthe
soDPZwas1.84%in2015,comparedwiththeguaranteedreturnof2.30%inthesame
period.ThenetvalueofsoDPZassetswaseUR672,098thousandattheendof2015,and
exceededtheguaranteedvalueofsoDPZassets(eUR620,039thousand)byeUR52,059
thousand.ThesoDPZheld798,762,486unitsincirculationin2015.
asthemanagerofthesoDPZ,Kapitalskadruæbaisentitledtothereimbursementofsub-
scriptionandredemptioncosts,andannualmanagementfees.Thesubscriptionfeeamounts
to2.3%,theredemptionfeeamountsto0.5%andtheannualmanagementfeeamountsto
1.0%.Kapitalskadruæba’srevenuesfromthemanagementofthesoDPZtotalledeUR7,814
thousandin2015,brokendownasfollows:eUR6,528thousandinmanagementfees,eUR
1,239thousandinsubscriptionfeesandeUR47thousandinredemptionfees.
Table12: Kapitalska druæba’s revenues from management of the SODPZ in 2015inEUR000
Revenuesfrommanagementactivities 2015 2014
Managementfees 6,528 5,834
subscriptionfees 1,239 1,210
Redemptionfees 47 29
Total 7,814 7,073
on6november2015,Kapitalskadruæbareceiveddecreeno.1032-5/2013-26of30october
2015fromtheMinistryoflabour,family,socialaffairsandequalopportunitiesapproving
amendmentstotheoccupationalpensioninsuranceplan.Theaforementionedamendments
relatetoareductioninmanagementfeeswithrespecttothenetvalueofassetsunderman-
agement.applicationoftheprovisionsoftheoccupationalpensioninsuranceplanbegins
withtheentryintoforceofamendmentstotheRulesonthemanagementofthecompulsory
supplementarypensioninsurancefundoftheRepublicofslovenia.entryintoforceislinkedto
consentobtainedfromthesecuritiesMarketagency,butwilltakeplacewithin90daysfrom
thedeliveryofthedecisiontothefundmanagerconfirmingtheamendmentstothepension
plan.KapitalskadruæbasentarequesttothesecuritiesMarketagencyon4December2015
fortheissueofconsenttotheamendmentstotheRulesonthemanagementofthecompul-
sorysupplementarypensioninsurancefundoftheRepublicofslovenia.
TheactamendingthePensionandDisabilityInsuranceact(ZPIZ-2b)enteredintoforceon
1January2016.Thesecondparagraphofarticle38oftheZPIZ-2bstatesthatKapitalska
druæbamustharmonisetheoccupationalpensioninsuranceplanandtheoccupationalpen-
sionpaymentplanwiththeprovisionsoftheZPIZ-2bwithin12monthsfollowingtheentry
intoforceoftheaforementionedact.Theprovisionsofvalidpensionplansatthetimethe
ZPIZ-2benteredintoforceapplyuntilthenewpensionplanapplies.TheKssoDPZwillbe
liquidatedwiththeentryintoforceofthenewpensionplan,whileoccupationalpensionswill
bepaidfromthesoDPZaspartialredemptionvalues.
6.1.5.2 SODPZinvestments
Themanagerwillmanagefundassetsinsuchawayastoachieve,ataminimum,theguar-
anteedreturninthecontextofminimalrisk,whiletakingintoaccountliquiditycriteria.The
managerwillallocatetheinvestmentsofthefundtoensurethattheywillbeappropriately
diversifiedandthattheywillnotexceedlegallimitsregardingthetypesofinvestments
allowedandthelevelofassetsinspecifictypesofinvestments,withtheexceptionssetout
intherelevantfundmanagementrules.
35
Themeasureofthefund’ssuccess(benchmarkindex)isthelatter’sguaranteedreturn,which
isensuredonamonthlyandannualbasis.
Thebasicobjectivesoffundmanagementwereasfollowsin2015:
�� �toincreasetheactualvalueofassetsovertheirguaranteedvalue,whilemaximisingthe
amountoftheexpectedsurplusinthecontextofthetargetedlevelofrisk.
Themanagerappliedanactivemanagementstrategywiththeaimofachievingitsobjec-
tivesatthefundlevel.Itappliedacombinationofactiveandpassiveinvestmentstrategies
atthelevelofinvestmentcategories.Themanagerusedatop-downapproachtomanage
fundassets.
Inassessingthesuccessoffundassetmanagement,themanagermadeacomparisonwith
thebenchmarkindex,withthefund’sguaranteedreturnandwiththesuccessofothermutual
pensionfundmanagers.
ThevalueofsoDPZassetsstoodateUR674,960thousandasat31December2015,an
increaseof7.8%relativeto2014.
Investmentsindebtsecuritiesaccountforthehighestproportion(45.4%)ofsoDPZassets.
Theproportionaccountedforbytheaforementionedassetswasdownslightlyin2015com-
paredwiththepreviousyear.bondsaccountforthemajorityofthisclassofinvestments,
followedbyinvestmentcoupons(26.7%)andinvestmentsinloansanddeposits(23.4%).The
proportionaccountedforbythethreeaforementionedclasseswasdownrelativeto2014.The
proportionaccountedforbyotherformsofinvestmentswasuprelativeto2014.
Table13: Composition of the investments of the SODPZ as at 31 December 2015inEUR000
Class Value Proportionoffundassets
2015 2014 2015 2014
shares 4,455 6,333 0.7% 1.0%
Debtsecurities 306,656 311,964 45.4% 49.8%
loansanddeposits 157,588 157,932 23.4% 25.2%
Investmentcoupons 180,407 135,822 26.7% 21.7%
Cashandcashequivalents 25,674 13,996 3.8% 2.2%
otherclaims 180 326 0.0% 0.1%
Total 674,960 626,373 100.0% 100.0%
Duetothelimitedsizeoftheslovenianfinancialmarketandawiderselectionofinvestment
opportunities,aportionofthefund’sassetswereinitiallychannelledabroad.Thefund’s
exposuretocurrencyriskwasdownin2015,astheproportionofsecuritiesdenominatedin
foreigncurrenciesdeclinedfrom7.4%to5.5%.
6.1.5.3 OperationsoftheKSSODPZ
WiththetransferofthefirstpolicyholdertotheKssoDPZinMay2013,Kapitalskadruæba
createdandbecamethemanageroftheKssoDPZ.TheCompanybeganpayingoccupa-
tionalpensionsinJune2013.
anoccupationalpensionispaidfromthetimethatrightisearneduntilold-ageorearlyretire-
ment.soDPZpolicyholdersearntherighttoanoccupationalpensionwhentheyfulfilthecondi-
36
tionssetoutintheplanforthepaymentofoccupationalpensions.Whenpolicyholdersexercise
theirrightstoanoccupationalpension,thefundsontheirpersonalaccountinthesoDPZare
transferredtotheKssoDPZandthepolicyholdersareissuedanoccupationalpensionpolicy.
atotalof123policyholdersweretransferredtotheKssoDPZin2015.Thetotalvalueof
fundstransferredforthosepolicyholderswaseUR4,350thousand.Kapitalskadruæbais
entitledtoafeeof1.5%ofeachpensionpayment.PensionpaymentfeestotalledeUR29
thousandin2015.
6.1.5.4 KSSODPZinvestments
ThevalueofKssoDPZassetswaseUR3,624thousandasat31December2015.
Investmentsinbondsaccountedforthehighestproportion(58.4%)ofKssoDPZassets,fol-
lowedbyinvestmentsindeposits(23.5%)andotherclaims(15.8%).
Table14: Composition of the KS SODPZ investments as at 31 December 2015inEUR000
Class Value Proportionoffundassets
2015 2014 2015 2014
Debtsecurities 2,118 629 58.4% 59.6%
loansanddeposits 851 231 23.5% 21.9%
Cashandcashequivalents 84 8 2.3% 0.8%
otherclaims 571 187 15.8% 17.7%
Total 3,624 1,055 100.0% 100.0%
Despiteitsrelativelysmallsize,thestructureoftheguaranteefund’sinvestmentswasinline
withlegalprovisionsandfocusedonensuringliquidityforthepaymentofpensionannuities.
TheIsaagencyissuedadecisioninnovember2015allowingKapitalskadruæbacertaindevia-
tionsinthestructureofKssoDPZinvestmentsfromthoseprescribedbythelaw,asfollows:
�� �forinvestmentsindepositsandcertificatesofdepositatbanksofupto50%ofinsurance
technicalprovisionsoncertaindays,wherethetotalofsuchinvestmentsataspecificbank
maytotal10%ofinsurancetechnicalprovisions;and
�� �forinvestmentsincashonhandandonsightaccountsofupto20%ofinsurancetechni-
calprovisionsoncertaindays.
TheaforementioneddeviationsarepermitteduntilthevalueofKssoDPZassetsreacheseUR
7,200thousand,butuntilnomorethan26november2017.
6.1.6 ActivitiesintheimplementationoftheZPIZ-2in2015
Kapitalskadruæbawasactivelyinvolvedagainin2015withthebusinessprocessesofthe
soDPZ,inparticularoccupationalretirement,thepaymentofoccupationalpensions,active
notificationofliablepersonsandpolicyholdersregardingdevelopmentsintheareaofoccu-
pationalinsurance,regularmeetingsofthesoDPZCommitteeandactivitiesrelatingtothe
resolutionofcurrentoccupationalretirementissues.Therewasactivecommunicationinthat
regardwiththeMinistryoflabour,family,socialaffairsandequalopportunities(Mlfsaeo),
thePensionandDisabilityInsuranceInstitute(ZPIZ),theMinistryofDefenceoftheRepublic
ofslovenia(MDRs),theMinistryofInfrastructure,theMinistryofCulture,theMinistryof
finance(Mf),thefinancialadministrationoftheRepublicofslovenia(faRs),theTrbovlje-
Hrastnikmine,thesoDPZCommittee,themedia,policyholdersandliablepersons.
37
ThenewactGoverningtheClosureoftheTrbovlje-HrastnikMineandtheDevelopmental
RestructuringoftheRegion(ZPZRTH-e)enteredintoforceinJune2014andsetoutthecon-
ditionsforobtainingtherighttoanoccupationalpensionforspecificcategoriesofemployees
oftheTrbovlje-HrastnikMine.sincetheentryintoforceofthenewactandagainin2015,
Kapitalskadruæbaworkedintentlytocarryoutactivitiesthatwouldfacilitatetheunimpeded
occupationalretirementofTrbovlje-HrastnikminepolicyholdersonthebasisoftheZPZ-
RTH.Duetothedeficientnatureoftheaforementionedact,agreatdealofcoordinationwas
requiredwiththeZPIZ,theMlfsaeo,theMinistryofInfrastructure,theMf,theTrbovlje-
Hrastnikmine,tradeunionsandpolicyholders.TheRepublicofsloveniaprovidedco-financ-
inginaccordancewiththelawforallpolicyholderswithinsufficientfundsontheirpersonal
accountforthepaymentofoccupationalpensions,andensuredthatthosepolicyholdersare
abletoexerciseallrightstowhichtheyareentitledbasedontheZPZRTH.anagreementwas
reachedwiththeMinistryofInfrastructureinapril2015onthetransferoffundslackingfor
occupationalretirementbasedonarticle16coftheZPZRTH.InJune2015,Kapitalskadruæba
paidthefirstoccupationalpensionsinaccordancewiththeZPZRTH.Italsopaidcontribu-
tionstotheZPIZontimeforthebuyoutofyearsofserviceand,inadditiontocontributions
forcompulsoryhealthinsuranceandtaxprepaymentsfromoccupationalpensions,alsopaid
contributionsforvoluntaryinclusionincompulsorypensionanddisabilityinsurance.
KapitalskadruæbawasactivelyinvolvedintheformulationandadoptionofthenewactGov-
erningtheGradualClosureoftheTrbovlje-HrastnikMineandtheDevelopmentalRestructur-
ingoftheRegion(ZPZRTH-f).Thenewactenteredintoforceon4november2015andbrings
certainnewfeaturesintheareaofoccupationalretirementforcertaingroupsofemployeesat
theTrbovlje-Hrastnikmine,includinganewlydefinedoccupationalpension.Thenewoccupa-
tionalpensionnowincludescontributionsforcompulsoryhealthinsuranceandcontributions
forvoluntaryinclusionincompulsorypensionanddisabilityinsurance.becausetheZPZRTH-
fdoesnotsetoutthebasisforthecalculationofcontributionsforcompulsoryhealthinsur-
anceaccordingtothethirdparagraphofarticle413oftheZPIZ-2,theopinionsoftheMfand
faRshadtobeobtained.Kapitalskadruæbadrewupaproposalforthreepossiblevariations
ofthecalculationoftheoccupationalpensionandsentittotheMfandfaRsforapproval.
Duetotheurgencyofthematter,theCompanyconsultedonnumerousoccasionswiththe
Mf,faRsandMlfsaeo.becausetheopinionreceivedremainssomewhatunclear,wewent
aheadandperformedacalculationoftheoccupationalpensionanywayforonepolicyholder
whomeetstheconditionsforoccupationalretirement.Thepossibilitythereforeexistsofa
recalculationornewassessmentoftheoccupationalpension.
Thepossibilityofthebuyoutofyearsofserviceisavailabletooccupationalinsurancepoli-
cyholdersandtherecipientsofanoccupationalpensiononthebasisoftheeleventhpara-
graphofarticle202oftheZPIZ-2.KapitalskadruæbaworkedwiththeMlfsaeoandZPIZin
connectionwiththebuyoutofyearsofservice,andmeetingswereheldwiththeaforemen-
tionedinstitutionsinanattempttofindthecommonbasesfortheaforementionedprocess.
KapitalskadruæbamadefivetransfersoftheredemptionvaluetotheZPIZin2015duetothe
buyoutofyearsofservice.
TheactamendingtheactGoverningthePromotionofPublicInterestinCulture(ZUJIK-e)
enteredintoforceinJanuary2014.Thefourthparagraphofarticle12oftheaforementioned
actstatesthataballetworkeristobeallocatedonehalfoftheperiodinwhichtheywere
includedinoccupationalinsurance.Duetoambiguitiesregardingtheimplementationofthe
aforementionedarticle,anewactGoverningthePromotionofPublicInterestinCultureis
beingdrawnup.In2015,Kapitalskadruæbasubmitteditscommentsregardingtheprovision
ofoccupationalinsurance,andattendedajointmeetingwithrepresentativesoftheMinistry
ofCultureandtheMlfsaeo,whereproblemsrelatingtooccupationalinsuranceandthe
occupationalretirementofballetworkerswerepresented.
38
forthepurposeofdraftingthenewZPIZ-2b,whichintroducesthecreationofsolidarity
reservestoco-financethepaymentofoccupationalpensionstopolicyholderswithout
insufficientfundsontheirpersonalaccounts,Kapitalskadruæba’scertifiedactuaryfol-
lowedtheinitiativeoftheMlfsaeoanddrewupaconceptforthecreationandfunc-
tioningofsolidarityreserves,aswellascalculationsandasimulationofthecollection
anddisbursementofthosereserves,whichwerepresentedtotheMlfsaeo’sworking
group.onthisbasis,Kapitalskadruæbaparticipatedinthedraftingofproposedarticles
oftheaforementionedact.
KapitalskadruæbaregularlyinformedtheMlfsaeoin2015aboutcurrentoccupationalinsur-
anceandretirementissues,andworkedwiththeaforementionedministrytodeveloppro-
posedsolutionsandinitiativesinconnectionwiththeimplementationoftheZPIZ-2.Kapitalska
druæbaalsoputforthinitiativesandproposalsforchangesandamendmentsaimedatthe
comprehensiveregulationoftheareaofoccupationalinsurance,andactivelyparticipatedin
theMlfsaeo’sworkinggroups.
Kapitalskadruæbainformsalloccupationalinsurancestakeholdersregularlyviaitswebsite
aboutallofthelatestdevelopmentsandtheoperationsofthefund.TheCompanycommu-
nicateswithpolicyholdersandliablepersonsthroughouttheyear,bothpersonallythrough
thecontactcentreandthroughatoll-freetelephonenumberandemail.In2015Kapitalska
druæbaorganisedsevenpresentationsforpolicyholders,liablepersons,tradeunionsand
humanresourcedepartments.
KapitalskadruæbaalsoregularlyinformedthesoDPZCommitteewithregardtoactivitiesin
theareaofoccupationalinsurance,theoperationsofthefundandissuesassociatedwith
occupationalretirement.ThesoDPZCommitteeactivelyparticipatedinthesearchforoccu-
pationalretirementsolutionsandcontinuouslyputforthinitiativestoaddressthisissue.The
soDPZCommitteemetfivetimesin2015.
6.2 MoDRaZaVaRoValnICa,D.D.
Modrazavarovalnica’sfinancialassetsincludetheinsurancecompany’sownassetsandthe
assetsofbothguaranteefunds.
Modrazavarovalnica,d.d.’sownassetsandtheassetsofbothguaranteefundsaredeemed
theinsurancecompany’sfinancialassets.
Table15: Financial assets Modra zavarovalnica as at 31 December 2015inEUR000
financialassets amount
ownfinancialassets 221,407
financialassetsoftheKsPPs 97,458
financialassetsoftheKsMR 39,714
Total 358,579
6.2.1 Managementofownfinancialassets
Modrazavarovalnica’sownfinancialassetstotalledeUR221,407thousandattheendof2015.
ThecompanybreaksdownitsfinancialassetsbytheitemsinTable16.Thelargestpropor-
tionisaccountedforbytheportfolioofequityinvestments,followedbydebtinvestments.
39
Table16: Composition of Modra zavarovalnica’s financial assets as at 31 December 2015inEUR000
financialassets amount
equityportfolioinvestments 117,310
equitynon-portfolioinvestments 21,635
Portfolioofdebtinvestments 77,872
Cashandcashequivalents 4,590
Total 221,407
6.2.1.1 Equityportfolioinvestments
equityportfolioinvestmentsincludeforeignsharesandinvestmentsintheinvestmentfundsofdomesticandforeignissuers.ThevalueoftheaforementionedinvestmentswaseUR117,310thousandasat31December2015.Thefivelargestinvestmentsintheportfolioofequityinvestmentsasat31December2015wereasfollows:anindexfundrepresentedbytheMsCIglobalindex(XMWoGy),thesharesoftheCoca-ColaCompany,anindexfundrepresentedbytheMsCIglobalindex(sMsWlDGy),aninvestmentfundthatinvestsintheagriculturesector(MooUs)andanindexfundthatinvestsinthesharesofemergingmarkets(MXfsln).
Table17: Composition of equity portfolio investments as at 31 December 2015inEUR000
Investment amount
shares 31,428
-Domesticshares 0
-foreignshares 31,428
Investmentfunds 85,882
-Domesticinvestmentfunds 412
-foreigninvestmentfunds 85,470
Total 117,310
shareindicesmeasuredineuroswereupbyanaverageof6.6%in2015.Theportfoliowasmostexposedtothefinancialsectorattheendof2015,followedbythesectorsofnon-cycli-calconsumergoodsandinformationtechnology.Intermsofcurrencies,theportfoliowasmostexposedtotheUsdollarandtheeuroattheendof2015.Morethanhalfoftheafore-mentionedportfolioisinvestedintheequitiesofissuersfromnorthamerica,whileclosetoonethirdisinvestedineuropeanissuers.Theremainderisaccountedforbyinvestmentsinissuersfrommoredevelopedasiancountriesandfromemergingeconomies.
6.2.1.2 Equitynon-portfolioinvestments
asat31December2015,Modrazavarovalnicaheldtwoequityinvestmentsindomesticissu-ersthatrequireadifferentapproachtomanagementthanportfolioinvestmentsonaccountofthesizeoftheassociatedparticipatinginterest:investmentsinsharesofCinkarnaCelje,d.d.andPozavarovalnicasava,d.d.ThevalueoftheaforementionedinvestmentstotalledeUR21,635thousandattheendof2015.
Thesaleofsharesinæito,d.d.wascompletedon5october2015withthetransferofthosesharesandthereceiptofconsideration.effortstosellsharesofCinkarnaCelje,d.d.wereconcludedinaugustwithoutanactualsalebeingcompleted.
40
6.2.1.3 Debtinvestments
ThebalanceofdebtinvestmentsstoodateUR77,872thousandattheendof2015.Corporate
bondsaccountedforthehighestproportionofdebtinvestments,followedbygovernment
bondsanddeposits.
Table18: Composition of debt investments as at 31 December 2015inEUR000
Investment amount
Bonds 57,568
Governmentbonds 24,479
-Domesticgovernmentbonds 11,003
-foreigngovernmentbonds 13,476
Corporatebonds 33,089
-Domesticcorporatebonds 5,320
-foreigncorporatebonds 27,769
Deposits 17,500
Commercial paper 434
Treasury bills 2,370
Total 77,872
ThevalueofModrazavarovalnica’sgovernmentbondportfoliowaseUR24,479thousand
asat31December2015.Theaforementionedportfolioprimarilycomprisesthegovernment
bondsofeuroareacountries.Theproportionofbondsaccountedforbydomesticissuers
was45%attheendof2015,whileforeignissuersaccountedfor55%.Morethan90%of
bondsaredenominatedineuros,whileaminorproportionaredenominatedinUsdollarsand
norwegiankroner.Themajorityofinvestmentsareaccountedforbysloveniangovernment
bonds,andbyindexfundsofeuroareagovernmentbonds.nearlyonehalfofbondshavea
maturityofbetweenfiveand10years,whilethemajorityofbondsbearafixedcouponrate.
Modrazavarovalnicaprimarilyholdscorporatebondsfromeuroareacountries.Domestic
corporatebondsaccountedfor16%ofthecorporatebondportfolioasat31December2015,
whileforeigncorporatebondsaccountedfor84%.allcorporatebondsandfundsthatinvest
incorporatebondsaredenominatedineuros.Thelargestinvestmentsasat31December
2015wereaccountedforbyfundscomprisingeuropeancorporatebonds.Modrazavaroval-
nicawasmostexposedtothebondsofissuersfromthesectorsoffinance,telecommunica-
tionsservicesandpublicservices.
6.2.1.4 Investmentsincashandcashequivalents
ModrazavarovalnicaheldeUR4,590thousandincashandcashequivalentsattheendof2015.
Table19: Composition of cash and cash equivalents as at 31 December 2015inEUR000
Investment amountineUR
Cashonaccountsatbanksandcashinhand 4,590
Total 4,590
41
6.2.2 Managementofguaranteefunds
Modrazavarovalnicaisthelargestpayerofsupplementarypensionsinslovenia,andman-
agedtwoguaranteefundsin2015intendedforthatpurpose:
�� �thefirstPensionfundGuaranteefund,fromwhichsupplementarypensionannuities
arepaidsinceaugust2004fromconvertedpensioncertificatestoallpersonswhohave
reached60yearsofage;and
�� �theModraRentaGuaranteefund,whichoffersacomprehensiveselectionofsupplemen-
tarypensioninsuranceannuitiessinceDecember2011inaccordancewiththeZPIZ-2.
ModrazavarovalnicapaideUR15.2millioninsupplementarypensionsto17,335policyhold-
ersin2015.atotalof7,345policyholdersreceivedapensionannuityfromsupplementary
pensioninsurance(Modrarenta),while9,990policyholdersreceivedapensionannuityfrom
supplementarypensioninsuranceinthescopeofthefirstPensionfund(inexchangefor
pensioncertificates).
Table20: Basic data regarding the guarantee funds of Modra zavarovalnica
Guaranteefundno.ofrecipients
ofannuitiesin2015
assetsundermanagement
eURmillion
expenditureannuitiesin2015
eURmillion
KsPPs−firstPensionfundGuaranteefund 9,990 100 6.2
KsMR−ModraRentaGuaranteefund 7,345 40 9
Total 17,335 140 15.2
6.2.2.1 FirstPensionFundGuaranteeFund
TheKsPPscomprisesseparateassetsformulatedon13July2004forallpolicyholders
whohavereachedaminimumof60yearsofageandthusobtainedtherighttoanannuity.
WhentheyobtaintherighttoanannuityonthebasisofaninformativecalculationbyModra
zavarovalnica,eachpolicyholderselectstherelevantformofpensionannuity.Policyholders
with2,000orlesspointsmayreceiveapensionannuityinalump-sumamount.apolicyholder
withmorethan2,000pointsontheirinsurancepolicymaychoosebetweenalifetimepen-
sionannuityandalifetimepensionannuitywithaguaranteedpaymentperiod.Policyhold-
erswithbetween2,000and5,000pointsmayalsobepaidanannualpensionannuity.The
guaranteedpaymentperiodissetat5,10or15years.shouldthepolicyholderdieduringthe
guaranteedpaymentperiod,thepensionannuityispaidtotheirbeneficiariesorheirsuntil
theexpirationofthatperiod.
PolicyholderswhoreceiveaPPspensionannuityareentitledtothesurplusreturnoftheguar-
anteefundovertheguaranteedreturninaccordancewiththegeneraltermsandconditions
ofsupplementarypensioninsuranceunderthefirstPensionfundoftheRepublicofslovenia
−conversionforpensioncertificates(PPs-sP01).Theproportionofthesurplusearmarkedfor
thepermanentincreaseinannuitiesisdeterminedonceayearbythefundmanager’smanage-
mentboard.Halfofthesurplusreturnfrom2014intheamountofeUR2,215thousandwas
allocatedin2015forapermanentincreaseinannuities.Theannuitiesreceivedbyallpolicy-
holders/recipientsofPPspensionannuitieswhoenteredintoaninsurancepolicybyDecem-
ber2014intheformofamonthlyorannualannuitywere2.3%higheronaverageinJune.The
annuitiesof9,691policyholdersortheirbeneficiarieswereincreased.Thedifferenceforthe
periodJanuarytoMay2015waspaidtogetherwiththeJunepaymentofincreasedannuities.
atotalof1,308policyholderswhoreachedtheageof60yearsobtainedtherighttoanannu-
ityin2015.ThosepersonspaidatotalofeUR3,628thousandintotheKsPPsforsupple-
mentarypensions.
42
ThevalueoffundassetsstoodateUR99,593thousandasat31December2015.Themajor-
ityor65%ofassetsareaccountedforbybonds,followedbysharesanddeposits.
Table21: Composition of KS PPS assets as at 31 December 2015inEUR000
assets amount
shares 13,435
bonds 64,451
Commercialpaper 1,723
Treasurybills 310
loansanddeposits 10,800
Investmentcoupons 6,188
Cashandcashequivalents 551
otherclaims 2,135
Total 99,593
asat31December2015,atotalof65%ofKsPPsassetswereinvestedintheRepublicof
slovenia,while35%ofallassetswereinvestedinforeignissuers.bondsaccountedforthe
highestproportionofinvestmentsinforeignissuers.
Table22: Geographical distribution of KS PPS investments as at 31 December 2015 inEUR000
area amount
Domesticinvestments 64,388
foreigninvestments 35,205
Total 99,593
6.2.2.2 ModraRentaGuaranteeFund
annuitypensioninsuranceisintendedforthepaymentofpensionannuitiestopolicyhold-
ers/participantsinsupplementarypensioninsuranceplanswhohaveexercisedtheirrightto
apensionfromcompulsoryinsuranceviatheZPIZ.
Whenconcludinganannuitypensioninsurancepolicy,eachpolicyholdermaychooseone
formoflifetimeannuity,andthusexercisetheirrighttoasupplementaryold-agepension.
Policyholderswereabletochoosefrom24differentsupplementarypensionformsin2015.
ThetraditionalModrarentaisalifetimepensionannuitypaidonamonthlybasiswithout
aguaranteedpaymentperiod.
TheModrarentawithaguaranteedpaymentperiodisalifetimepensionannuitypaidon
amonthlybasiswithaguaranteedpaymentperiodof5,10,15or20years.
TheacceleratedModrarentawithafullguaranteeisalifetimepensionannuitywitha
guaranteedmonthlypaymentperiodofbetween1and10years(acceleratedmonthlypay-
mentandguaranteeintheeventofdeath),followedbytheannualpaymentofanannuity
equaltothepreviousmonth’samount.
43
TheacceleratedModrarentawithalimitedguaranteeisalifetimepensionannuitywith
aguaranteedmonthlypaymentperiodofbetween2and10years(acceleratedmonthlypay-
mentandguaranteeintheeventofdeathinbetween1to9years),followedbytheannual
paymentofanannuityintheamountofeUR12.
by31December2015,atotalof7,902policyholders/participantshadexercisedtheirrightto
asupplementaryold-agepensionandoptedtoreceiveamonthlypensionannuity.The2,143
policyholderswhoexercisedtheirrighttoanold-agepensionin2015paidinatotaleUR
20,469thousandtotheguaranteedfund.
Table23: Number of policyholders/participants and amount paid into the KS MR in 2015
Pensionfundnumberofparticipants/
policyholdersRedemptionvalue
ofassets(ineUR000)
KVPs 295 3,267
ZVPsJU 1,539 10,175
MKPs 13 48
Pensionfundsofothermanagers 296 6,979
Total 2,143 20,469
Theamountofanindividual’spensionannuitydependsontheselectedassetsofthesupple-
mentarypensioninsurance,thetechnicalinterestrate,mortalitytablesseparatedbygender,
thepolicyholder’sdateofbirth,thepolicyholder’sagewhentheannuityinsuranceentered
intoforceandthecostsofthepaymentoftheannuity.Theaverageageofannuityrecipients
is61years,whileatotalof53%ofannuityrecipientsaremale.
Table24: Structure of KS MR supplementary pension annuities as at 31 December 2015
TypeofannuityProportion
ofpolicyholdersaverageamountof
annuity(ineUR)
TraditionalModrarenta 1% 52
Modrarentawithaguarantee 2% 70
acceleratedModrarentawithafullguarantee 20% 117
acceleratedModrarentawithalimitedguarantee 77% 173
Total 100% 159
ThevalueoffundassetsstoodateUR39,976thousandasat31December2015.Themajority
ofassetsareaccountedforbybonds,investmentcouponsandinvestment-gradedeposits.
Table25: Composition of KS MR assets as at 31 December 2015inEUR000
assets amount
bonds 23,945
loansanddeposits 5,730
Commercialpaper 1,287
Treasurybills 2,440
44
assets amount
Investmentcoupons 5,908
Cashandcashequivalents 404
otherclaims 262
Total 39,976
asat31December2015,40%ofKsMRassetswereinvestedintheRepublicofslovenia,
while60%ofallassetswereinvestedinforeignissuers.
Table26: Geographical distribution of KS MR investments as at 31 December 2015 inEUR000
area amount
Domesticinvestments 15,977
foreigninvestments 23,999
Total 39,976
6.2.3 Managementofmutualequitypensionfunds
Modrazavarovalnicaisthelargestproviderofsupplementarypensioninsuranceinslovenia,
andisanimportantproviderofold-agesavingsinthescopeofthesecondpensionpillar.
Morethan270thousandindividualsheldsavingsinthecompany’smutualpensionfundsin
December2015,whiletheassetsoftheaforementionedfundstotalledeUR914million.Paid-
insupplementarypensioninsurancepremiums,excludingtransfersofassetsbetweenthe
KVPsandMKPs,totalledeUR46millionin2015,anincreaseof7%relativeto2014.
Modrazavarovalnicamanagesfourmutualpensionfunds,whicharemanagedanddisclosed
separatelyasassetsheldbythepolicyholders/participantsinthefollowingfunds:
�� theClosedMutualPensionfundforPublic-sectoremployees,
�� theMutualequityPensionfund,
�� ModriUmbrellaPensionfund,and
�� thefirstPensionfundoftheRepublicofslovenia.
Table27: Data regarding mutual pension funds managed by Modra zavarovalnica as at 31 December 2015
fund
numberofparticipants/
policyholders
numberofemployers/
liablepersons
amountofassetsundermanagement
(eURmillion)
KVPs−MutualequityPensionfund 27,085 230 174
ZVPsJU−ClosedMutualPensionfundforPublic-sectoremployees
210,908 1,920 696
MKPs−ModriUmbrellaPensionfund 8,839 96 23
PPs−firstPensionfund 23,651Intendedonlyforindividuals
22
Total 270,483 2,246 915
Pursuanttoarticle313oftheZPIZ-2,Modrazavarovalnicamustcreateprovisionsiftheactual
netvalueofpensionfundassetsislowerthantheguaranteedvalueoffundassetsduringthe
accountingperiodbychargingequityanamountequaltothesumofdeficitsinthevalueof
45
aparticipant’sassetsuptotheguaranteedandactualvalueofthatperson’sassets.atthe
endof2015ModrazavarovalnicacreatedprovisionsintheamountofeUR15,556thousand
forfailuretoachievetheguaranteedreturnonmutualpensionsfunds.eUR15,342thousand
ofthatamountrelatedtothePPs.
6.2.3.1 ClosedMutualPensionFundforPublic-SectorEmployees
TheZVPsJUwasestablishedthroughthecollectionofassetsfromtheaccountsofpub-
lic-sectoremployees,whichensurestherighttoasupplementaryold-agepensionand
otherrightsdefinedinthepensionplan.Inadditiontothepremiumspaidintothefundby
employers,public-sectoremployeesmayalsopaypremiumsthemselves,thusensuringa
highersupplementarypensionandtheexploitationoftaxreliefinthecalculationofper-
sonalincometax.asfundmanager,Modrazavarovalnica,d.d.ensuresaminimumguar-
anteedreturnonsavings.
PursuanttotheZKDPZJUandKPoPnJU,collectiveinsuranceunderthePnJUKpension
planincludedallpersonswiththestatusofpublic-sectoremployeeasat1august2003orto
whomtheKPnGapplied.IndividualswhoconcludedanemploymentcontractwiththeRepub-
licofslovenia,alocalcommunityorpubliclawentityasemployerafter1august2003were
includedinthePnJUKpensionplanonthedaytherelevantemploymentcontractwascon-
cludedoronthedaythepersoninquestionsreceivedthestatusofpublic-sectoremployee.
Theagreementonmeasurestoreducethescopeoffundsforwagesandotherpublic-sector
labourcostsfor2015includedtheextensionofreducedsupplementarypensioninsurance
premiumsforpublic-sectoremployees.InDecember2014,thesloveniangovernmentand
representativepublic-sectortradeunionssignedanannextothecollectiveagreementfor
thenon-economicsectoroftheRepublicofsloveniaandsetthelevelofpremiumstobepaid
byemployersfor2015.Premiumsintheperiod1January2015to30June2015amounted
to10%ofthepremiumapplicableasat1January2013(themonthlypremiumforthehigh-
estpremiumgradewaseUR2.68).Premiumsintheperiod1July2015to31october2015
amountedto15%ofthepremiumapplicableasat1January2013(themonthlypremium
forthehighestpremiumgradewaseUR4.02).Premiumsintheperiod1november2015to
31December2015amountedto30%ofthepremiumapplicableasat1January2013(the
monthlypremiumforthehighestpremiumgradewaseUR8.03).
onthebasisofthePnJUKpensionplanandZVPsJUrules,Modrazavarovalnica,asman-
ageroftheZVPsJU,isentitledtosubscriptionandmanagementfeesassociatedwiththe
ZVPsJU.subscriptionfeesarechargedasapercentageofthepaid-inpremiumatthetime
ofpaymentandaretransferredtothefundmanager’saccount.Thefeeamountedto0.5%in
2015.TheannualmanagementfeefortheZVPsJUis0.5%oftheaverageannualnetvalue
ofZVPsJUassets.allotheroperatingcostsofthefundarebornebyModrazavarovalnica.
TheZVPsJUisthelargestslovenianpensionfund,bothintermsofthenumberofpolicy-
holdersandassetsundermanagement.Theaforementionedfundhad210,908participants
andassetstotallingeUR696millionattheendof2015.at3.68%,thereturnontheZVPsJU
waswellabovetheguaranteedreturnof1.94%in2015andrankedtheZVPsJUasthemost
profitableslovenianpensionfund.
ManagementoftheZVPsJUin2015wasaimedatsecurity,profitability,theliquidityand
diversificationofinvestments,andlong-termgrowthinthevalueofZVPsJUassets.The
mostsignificantchangesin2015wereanincreaseintheproportionofbondsandtreasury
bills,andadecreaseintheproportionofequitiesanddeposits.at55%,themajorityoffund
assetswereaccountedforbyinvestmentsinbondsattheendof2015,followedbyinvest-
mentsininvestmentcouponsat26%,investmentsintreasurybillsat9%,andbankdeposits
andcertificatesofdeposit.
46
supplementarypensioninsuranceforpublic-sectoremployeesmaybeterminatedunder
regularorextraordinarycircumstances.Regularterminationofcollectiveinsuranceunderthe
PnJUKpensionplantakeseffectwhentheparticipantoftheZVPsJUexercisestheirright
toasupplementaryold-agepensionortherighttoanearlysupplementaryold-agepension.
extraordinaryterminationmaytakeeffectwhenapublic-sectoremploymentcontractister-
minated,providedthat120monthshavepassedsinceanemployee’sinclusionintheinsur-
ancescheme,orbybeneficiaries/heirsintheeventofdeath.specialarrangementsapplied
until1august2013forallZVPsJUparticipants,whoon1august2003werelessthan10
yearsshyoffulfillingtheminimumcriteriatoobtaintherighttoanold-agepension.Insuch
cases,participantschosebetweentherighttoasupplementaryold-agepensionorthelump-
sumpaymentoftheredemptionvalueundercompulsoryinsuranceatthetimeofretirement.
Theinsuranceof3,764participantswasterminatedin2015,whiletheredemptionvaluepaid
waseUR21million.
6.2.3.2 MutualEquityPensionFund
TheKVPsisanopenmutualpensionfundintendedfortheimplementationofvoluntary
supplementarypensioninsuranceplans.anyemployeesincludedinthecompulsorypen-
sioninsuranceschememayparticipateintheKVPs.since2002,theKVPsincludessepa-
ratepensionplansforindividualandcollectivevoluntarysupplementarypensioninsurance,
designatedPn1PandPn1K.asfundmanager,Modrazavarovalnicaensuresaminimum
guaranteedreturnonsavings.
InaccordancewiththePn1PandPn1KpensionplansandtheKVPsrules,thefundman-
agerisentitledtosubscription,redemptionandfundmanagementfees.In2015,thefund
managementfeewas1%oftheaverageannualnetvalueofKVPsfunds.subscriptionfees
arechargedasapercentageofthepaid-inpremiumatthetimeofpaymentandamounted
to3%in2015.Redemptionfeesarechargedasapercentageofthepaid-outvalueoffunds
andamountedto1%in2015.
TheKVPsachievedareturnof1.39%in2015,whichwasbelowtheannualguaranteedreturn
of1.94%duringthesameperiod.Thereturnachievedwascomparablewiththoseachieved
byotherslovenianpensionfunds.ThevalueoffundassetsstoodateUR174millionasat31
December2015.
ManagementoftheKVPsin2015wasaimedatsecurity,profitability,theliquidityanddiversifi-
cationofinvestments,andlong-termgrowthinthevalueofKVPsassets.Themostsignificant
changesin2015wereanincreaseintheproportionoftreasurybillsandbonds,andadecrease
intheproportionofdepositsandequities.at49%,themajorityoffundassetswereaccounted
forbyinvestmentsinbondsattheendof2015,followedbyinvestmentsininvestmentcoupons
at24%,investmentsintreasurybillsat12%,andbankdepositsandcertificatesofdeposit.
supplementarypensioninsurancecanbeterminatedunderregularorextraordinarycircum-
stances.Insuranceisterminatedunderregularconditionswhenapolicyholderobtainsthe
righttoapensionundercompulsoryinsurance.extraordinaryterminationapplieswhena
fundparticipantwithdrawsfromtheinsuranceschemeonthebasisofawrittenstatement
regardingwithdrawal,oruponthedeathoftheparticipant.Thetransferofassetstoanother
personrepresentsaspecialwaytoterminateinsurance.aparticipant/policyholdermayexer-
cisetheirrighttothepaymentoffundspaidinbytheiremployeruntil31December2012
when10yearshavepassedsincetheirinclusionintheinsurancescheme.
Theinsuranceof1,711participants/policyholderswasterminatedin2015,whiletheredemp-
tionvaluepaidwaseUR15million.atotalof342participants/policyholdersoptedforthe
paymentoftheredemptionvalueoffundunitsfinancedbytheemployeruntil31December
2012,inthetotalamountofeUR2.5million.
47
6.2.3.3 FirstPensionFundoftheRepublicofSlovenia
ThePPsisintendedexclusivelyforthecoverageofpaymentsofpensionannuitiesfromsup-
plementarypensioninsurancepoliciesthatwerecreatedthroughtheconversionofpension
certificates.since1January2003,thePPsisaclosedmutualpensionfund,towhichaddi-
tionalpaymentsortheinclusionofadditionalparticipantsisnotpossible.sinceaugust2004,
theaccumulatedassetsofallpolicyholders/participantsatleast60yearsofagearetrans-
ferredtotheKsPPs,thepurposeofwhichistocoverpaymentsofsupplementarypension
annuities.IfaPPspolicyholder/participantdiesbeforetheyobtaintherighttoapensionannu-
ity,theirheirshavetherighttothepaymentoftheredemptionvalueofthepolicyinquestion.
ModrazavarovalnicaisentitledtoanannualfeeformanagingthePPs,whichamountedto
1%oftheaverageannualnetvalueofassetsin2015.Itisalsoentitledtoaredemptionfee,
whichiscalculatedasapercentageoftheredemptionvaluepaidtoheirs.
TheactualreturnofthePPswas−20.0%in2015,whiletheguaranteedannualreturnwas
1.0%.Thenegativereturnoftheaforementionedwastheresultoffallingpricesofslovenian
shares,inparticularsharesofTelekomslovenije,d.d.astheresultoftheunsuccessfulsale
ofthatcompany.PPsassetstotalledeUR22millionattheendof2015.
Theprimaryobjectiveofthefundmanagerin2015wastherestructuringofthePPsportfolio
withtheaimofthegreaterdiversificationandliquidityofinvestments,inparticularareduc-
tioninexposuretonon-marketableequityinvestments,whichalsorequiredadecisionissued
bytheIsainapril2014,underwhichtheaforementionedbodytaskedModrazavarovalnica
withharmonisingthestructureofPPsinvestmentswithlegalrequirementsby31october
2016andthedisposalofinvestmentsinparticipatinginterestsinlimitedliabilitycompanies.
Tothatend,ModrazavarovalnicabeganthesaleofitsparticipatinginterestinGeoplin,d.o.o.
in2015,thelatterbeingtheinsurancecompany’slargestinvestmentinalimitedliabilitycom-
pany.Thesalesprocessiscurrentlysuspendedduetothecoordinationofactivitieswiththe
aforementionedcompany’sotherowners.Theparticipatinginterestinelan,d.o.o.wassold
in2015,whileparticipatinginterestsinotherlimitedliabilitycompaniesremainintheport-
folioduetoalackofmarketinterestandrelativelylowvalues.
salesactivitiescontinuedin2015aimedatthejointsaleofamajoritypackageofsharesof
Telekomslovenije,d.d.Thatprocesswashaltedinaugust2015,withouttheaforementioned
salebeingcompleted.In2015,wereducedourexposure,inpartorfull,tofournon-market-
ableequityinvestments.
ThefundmanagerdisclosedimpairmentsintheamountofeUR15,342thousandattheend
of2015duetofailuretoachievetheguaranteedreturnofthefund.asignificantportionofthe
aforementionedamountrelatestoprovisionscreatedin2013and2014duetotheimpairment
oftheinvestmentinCimos,d.d.additionalprovisionsofeUR4,767thousandwerecreated
in2015onaccountoffallingpricesofslovenianequities.
atotalof1,308policyholdersobtainedtherighttoapensionannuityin2015.Thecorrespond-
ingPPsassetsintheamountofeUR3,628thousandweretransferredtotheKsPPs.atotal
of25paymentsoftheredemptionvalueintheamountofeUR86thousandweremadedue
tothedeathofpolicyholders/participants.
6.2.3.4 ModriUmbrellaPensionFund
TheMKPsisanopenfundintendedfortheimplementationofvoluntarysupplementarypension
insuranceplans.anyemployeesincludedinthecompulsorypensioninsuranceschememay
participateintheMKPs.apensionplanforcollectivesupplementarypensioninsurance(the
PnMZK)hasbeeninplacesince2015andincludespolicyholdersviatheiremployers,ashas
anindividualsupplementarypensionplan(thePnMZP)intendedforindividualpolicyholders.
48
TheMKPscomprisesthreesub-fundsthatarecreatedasseparateassets,whereeachsub-
funddefinesitsowninvestmentpolicyandobjective,andeachsub-fundisintendedfor
atargetagegroupofparticipants.TheModriDynamicsub-fundisintendedforyounger
participantsupto50yearsofageandpursuesahigher-riskinvestmentpolicy.TheModri
Conservativesub-fundisintendedforparticipantsaged50to60years,whiletheModri
Guaranteedsub-fundisintendedforparticipantsabove60yearsofage.asthemanager
oftheModriGuaranteedsub-fund,Modrazavarovalnicaensuresaminimumguaranteed
returnonsavings.
onthebasisofthedetailedrulesoftheModriUmbrellaPensionfund,Modrazavarovalnica,
asmanageroftheMKPs,isentitledtosubscriptionandmanagementfeesassociatedwith
theMKPs,whicharepaidfromtheaforementionedfund’sassets.subscriptionfeesare
chargedasapercentageofthepaid-inpremiumatthetimeofpaymentandaretransferred
tothefundmanager’saccount.Thefeeamountedto3%in2015.Theannualmanagement
feefortheMKPsis1%oftheaverageannualnetvalueofanindividualsub-fund’sassets.
ThereturnoftheModriGuaranteedsub-fundwas−1.97%overan11-monthperiodin2015,
whiletheguaranteedreturnduringthesameperiodwas1.77%.Intheperiodfebruaryto
December2015,theModriConservativesub-fundachievedareturnof2.61%,whilethe
ModriDynamicsub-fundachievedareturnof3.59%.ThereturnsachievedbytheModri
ConservativeandModriDynamicsub-fundswereamongthebestamongprovidersofsup-
plementarypensioninsurancein2015.
asthemanageroftheModriGuaranteedsub-fund,Modrazavarovalnicatakesanactive
approachtoassetmanagement,theaimofwhichistomeettheoperationalobjectiveof
management,i.e.toachieveandexceedtheaveragereturnofcompetitivepensionfunds
whilemaintainingtheactualvalueoffundassetsabovetheguaranteedvalue.Inmanaging
theModriConservativeandModriDynamicsub-funds,itpursuestheoperationalobjectives
ofmanagement,i.e.toachieveandexceedtheaveragereturnofcompetitivepensionfunds.
Thismeansthatthemanageractivelydeviatesfromtheassetstructureofcompetitivefunds
andfromthelong-termstrategicallocationofassets,andinvestsincategoriesorindividual
investmentsthatitassessesareundervaluedaccordingtocertaininvestmentcriteria.
TheassetsoftheModriGuaranteedsub-fundtotalledeUR15,378thousandattheendof
2015.at44%,thehighestproportionofthesub-fund’sassetswereaccountedforbybonds,
followedbybankdepositsat16%,investmentsininvestmentfundsthatinvestinbondsat
13%andadditionalliquidfundsat11%.Investmentsininvestmentfundsthatinvestinshares,
andtreasurybillsandcommercialpaperaccountforasmallerportionoffundassets.
TheassetsoftheModriConservativesub-fundtotalledeUR3,275thousandattheendof
2015.at40%,thehighestproportionofthesub-fund’sassetswereaccountedforbyinvest-
mentsininvestmentfundsthatinvestinshares,followedbyinvestmentsininvestmentfunds
thatinvestinbondsat22%,bankdepositsat14%andadditionalliquidfundsat13%.Invest-
mentsinbondsandcommercialpaperaccountforasmallerportionoffundassets.
TheassetsoftheModriDynamicsub-fundtotalledeUR3,793thousandattheendof2015.
at62%,thehighestproportionofthesub-fund’sassetswereaccountedforbyinvestments
ininvestmentfundsthatinvestinshares,followedbyinvestmentsininvestmentfundsthat
investinbondsat12%,whileadditionalliquidfundsandbankdepositseachaccountfor9%
ofsub-fundassets.Investmentsinbondsandcommercialpaperaccountforasmallerpor-
tionoffundassets.
supplementarypensioninsurancecanbeterminatedunderregularorextraordinarycircum-
stances.Insuranceisterminatedunderregularconditionswhenapolicyholderobtainsthe
righttoapensionundercompulsoryinsurance.extraordinaryterminationapplieswhena
49
fundparticipantwithdrawsfromtheinsuranceschemeonthebasisofawrittenstatement
regardingwithdrawal,oruponthedeathoftheparticipant.Thetransferofassetstoanother
personrepresentsaspecialwaytoterminateinsurance.aparticipant/policyholdermayexer-
cisetheirrighttothepaymentoffundspaidinbytheiremployeruntil31December2012
when10yearshavepassedsincetheirinclusionintheinsurancescheme.
Theinsuranceof17participants/policyholderswasterminatedin2015,whiletheredemption
valuetotalledeUR57thousand.atotalof12participants/policyholdersoptedforthepayment
oftheredemptionvalueoffundunitsfinancedbytheemployeruntil31December2012,in
thetotalamountofeUR106thousand.
6.3 sTeKlaRsKanoVaRoGa©KaslaTIna
Pursuanttothefinancialoperations,InsolvencyandCompulsoryDissolutionact,bankruptcy
proceedingswereinitiatedagainststeklarskanovaRogaπkaslatinaon21May2009.Itisevi-
dentfromthefinallistoftestedclaimsof3June2014thatclaimstotallingeUR9,765,732.25
wereregistered.ofthatamount,claimstotallingeUR209,800.27werecontested.
TheofficialreceiverDrIrenalesjakdraftedfourperiodicreportsin2015regardingthepro-
gressofbankruptcyproceedingsagainststeklarskanovaRogaπkaslatina.Currentactivi-
tieslinkedtothesaleofassetsandactivitiesassociatedwithlitigation,etc.werecarried
outin2015.
Theunredeemedbankruptcyestatecomprisesholidayfacilitiesthathavenotyetbeenentered
inthelandregisterandthreeparcelsinRogaπkaslatina.Theestimatedvalueofunredeemed
assetsisaroundeUR60,000.
ThecompanyrecordedinflowsofeUR342,343.49andoutflowsofeUR36,325.52from1
Januaryto31December2015.Thelargestinflowwasfromthesaleofacommercialbuilding
inRogaπkaslatinaforeUR307,800.00andfromthesaleofanapartmentonRoglaforeUR
34,002.00.ThelargestoutflowintheamountofeUR31,211.07wasaccountedforbyapay-
menttobankaCeljefromthedistributionofthespecialbankruptcyestate.
ThecompanyhadanaccountbalanceofeUR383,837.02asat31December2015.
50 Risk management
RiskmanagementisexplainedinChapter17.2accountingpoliciesinthefinancialreportsec-
tionofKapitalskadruæba’sannualreport.
51Significant business events after the end of 2015
Thesloveniangovernment,initsroleasKapitalskadruæba’sGeneralMeeting,appointed
Janezbedinaasmemberofthesupervisoryboardon8January2016untilDrborisænidariË’s
functionasmemberoftheManagementboardceases.
ThenewPensionandDisabilityInsuranceact(ZPIZ-2b)enteredintoforceon1January
2016,bringingchangesforKapitalskadruæba,too.Inaccordancewiththenewact,occu-
pationalpensionswillbepaiddirectlyfromthesoDPZ,whiletheKssoDPZwillceaseto
function.ThemanagementfeeschargedbyKapitalskadruæbawillrisewiththetransfer
ofassetsfromtheKssoDPZtothesoDPZ,astheCompanydidnotchargemanagement
feesfortheKssoDPZ.
amendmentstotheoccupationalpensioninsuranceplanapprovedbytheMlfsaeoinits
decisionof30october2015enteredintoforceon4february2016andrelatetoareduction
inmanagementfeeswithrespecttothenetvalueofassetsundermanagement.
basedonKapitalskadruæba’srequest,thesecuritiesMarketagencyissuedconsenton4
february2016totheamendmentstotheRulesonthemanagementofthecompulsorysup-
plementarypensioninsurancefundoftheRepublicofslovenia.Theamendmentsenterinto
forceon9March2016,andrelatetoareductioninmanagementfeeswithrespecttothenet
valueofassetsundermanagement.
on28January2016,theGeneralCourtoftheeuropeanUnionrejectedinfulltheslovenian
government’smotiontoannuleuropeanCommissiondecisionno.sa.26379of19septem-
ber2012onthemeasuresinfavourofelan,d.o.o.Theaforementionedrulingextinguished
Kapitalskadruæba’scontingentliabilityinconnectionwiththepotentialrepaymentofstate
aidreceived.TheCompanythusreverseditsoff-balance-sheetliabilitytoelan,d.o.o.inthe
amountofeUR6,457thousand.
on28January2016,thegovernment,initsroleasthebaMC’sgeneralmeeting,adopteda
decisionbasedontheZGD-1andtheGovernmentMeasurestostrengthenthestabilityof
banksactrequiringthebaMCtotransfer(forconsideration)allclaimsagainstsava,d.d.and
allbondsofsava,d.d.initspossessiontosDHandKaDatthetransfervaluesatwhichit
receivedtheaforementionedhigh-risksitems,aspartoftheimplementationofmeasuresto
strengthenthestabilityofbanks,oratthefairvaluesorbookvaluesofthoseitemsasat30
52
June2015,ifthelatterarehigherthanthetransfervalues.Thosevaluesarefurtherincreased
forfinancingcostsequaltotheweightedcostofthebaMC’scapitalintheamountof4.2%
fortheperioditownedtheaforementioneditems.
asat31December2015,Kapitalskadruæbaheldacapitalinvestmentinsharesofsava,d.d.
valuedateUR255thousand.on12february2016,thecreditorcommitteeofsava,d.d.
adoptedaresolution,wherebythesharecapitaloftheaforementionedcompanyisreduced
fromeUR14.1milliontozerothroughthecancellationofallexistingshares.Theaforemen-
tionedresolutionbecomesvalidwiththefinalconfirmationofcompulsorycomposition.If
theresolutionconfirmingcompulsorycompositionbecomesfinal,Kapitalskadruæbawilllose
theentirevalueofitsinvestmentinsharesofsava,d.d.
ThesecuritiesMarketagencyissuedadeclaratorydecisionon5february2016inwhichit
ruledinfavouroftherequestofsDH,thesloveniangovernment,Kapitalskadruæba,nova
KreditnabankaMaribor,d.d.,ZavarovalnicaTriglav,d.d.andthefundforthefinancingof
theDecommissioningofKrπkonuclearPowerPlanttoissueadeclaratorydecisiontoliftthe
prohibitionontheexercisingofvotingrightsthatwasimposedonTelekomslovenije,d.d.,
ljubljanaasthetargetcompany.
on2february2016,acommitteecomprisingtheaforementionedcreditorsadoptedaresolu-
tion,wherebythesharecapitalofPomurskemlekarne,d.d.isreducedfromeUR1.4millionto
zerothroughthecancellationofallexistingshares.Theaforementionedresolutionbecomes
validwiththefinalconfirmationofcompulsorycomposition.
ThenewInsuranceact(ZZavar-1)enteredintoforceon1January2016andtransposesthe
europeansolvencyIIDirectiveintoslovenianlaw.Theaforementioneddirectivedefinesthe
frameworkfortherevisedregulatoryregimegoverningtheinsurancesector,reformsregard-
ingcapitalrequirementsandthemanagementofriskstowhicheUinsurersandreinsurers
areexposed.
Themainsolutionssetoutintheaforementionedactrelatetothesolutionssetoutinthesol-
vencyIIDirective,whichincludes14existinginsuranceandreinsurancedirectives,whilenew
rulesregardingsolvencyhavebeenadded.Themainsubstantivechangesrelativetothepre-
viousarrangementsmaybefoundintheareasofquantitativeandqualitativerequirements,
rulesgoverningsupervision,supervisoryreportingandthepublicdisclosureofinformation,
aswellasthesupervisionofgroups.ThesolvencyIIDirective,whichisimplementedwith
theZZavar-1,requiresinsurancecompaniestocalculatecapitaltakingintoaccountallrisks
towhichtheyareexposed.Inadditiontoinsurancerisks,theymustalsotakeintoaccount
market,creditandoperationalrisks.
Theaforementionedactplacesgreateremphasisontheprudentmanagementofrisksby
insurancecompaniesandonsoundinternalcontrols,withtheaimofincreasingthelevelof
securityofpolicyholders.Italsoimposednewrequirementsregardingthecapitaladequacy
ofinsurancecompanies,wherethelevelofcapitalrequirementswilldependontheinsur-
ancecompanyitselfanditsmanagementofrisks.TheultimateobjectiveofsolvencyIIisto
increasetheprotectionandsecurityofpolicyholders.
Thetransitiontothenewdirectivewasadifficultprocess,andrequiredsignificanthuman
resourcesandtheadaptationofinformationtechnology,allofwhichModrazavarovalnica
successfullycompleted.Weadaptedtheorganisationalstructure,appointedpersonsrespon-
sibleforkeyfunctionsattheinsurancecompany,andadoptedand/oramendedallnecessary
bylaws.Wethusenter2016preparedfortheimplementationofsolvencyII.
sinceJanuary2016,Modrazavarovalnicahasofferedupdatedformsofpensionannuities
basedonthenewpensionplan,whichwasapprovedbytheMlfsaeoinoctober2015and
53
whichhasalsobeenenteredinaspecialregisterofpensionplansatthefaRs.TheZPIZ-2
statesthatsupplementarypensionsintheformofapensionannuitycanbepaidonthebasis
ofaspecialpensionplanapprovedbytheministryresponsibleforlabour.Detailedruleson
thecalculationandpaymentofpensionannuitiesaredefinedbytheministryresponsiblefor
financeincooperationwiththeministryresponsibleforlabour.Detailedrulesandminimum
requirementsthatinsuranceandpensioncompaniesmusttakeintoaccountinthecalcula-
tionofpensionannuitieswerepublishedin2015andenteredintoforceon1January2016.
Tothatend,wecreatedanewguaranteefundinJanuary2016forthepaymentofsupple-
mentarypensionannuities,withpolicyholders’participationinprofits.
Changetotheaforementionedrulesenteredintoforceon19March2016andexpandedthe
rangeofsupplementarypensionsthatprovidersmayoffertopolicyholders.Thelimitonthe
acceleratedpaymentofsavingsexceedingeUR20,000nowonlyappliestocollectivesav-
ingsafter1January2013(i.e.accordingtotheZPIZ-2).Inthiscase,amonthlysupplemen-
tarypensionduringacceleratedpaymentmaynotexceedtwicetheamountofamonthly
termpensionannuity(form2:1).Theaforementionedlimitdoesnotapplytoallsupplemen-
tarypensioninsuranceassetsaccumulatedfromemployercontributionsuntil31December
2012andfromindividualcontributions.anindividualmaythuschooseanacceleratedform
ofmonthlypensionannuityintheperiod1−20years,andthenasupplementarypensionof
eUR30foreachthreemonthsuntiltheendoftheirlife.
54 Expected development of the Kapitalska druæba Group for 2016
Kapitalskadruæbawasestablishedwiththeaimofcoveringthedeficitinthepublicpension
anddisabilityinsurancesystem,whichisfinancedaccordingtotheprincipleofintergenera-
tionalexchange.Inaccordancewithitsmission,theCompanymusttransformitselfintoan
independentandautonomousdemographicreservefundassetoutintheZsDH-1.Details
willbesetoutinaseparateact.asonesourceoffinancing,theZsDH-1statesthat10%of
proceedsfromthesaleofcapitalinvestmentsheldbytheRepublicofsloveniamustbetrans-
ferredtoaspecialaccountattheMinistryoffinance,andthattheaforementionedfundsmay
beusedexclusivelytofinancethedemographicreservefund.alongsidetheformulationofa
demographicreservefund,theZsDH-1alsoenvisagesthetransferoftheZPIZ’sinvestment
inZavarovalnicaTriglav,d.d.toKapitalskadruæba.
TechnicalstudiescarriedoutbyKapitalskadruæbatodatewiththehelpofexternalexperts
andpresentedtoallimportantstakeholders,representaqualitybasis,forboththeactgov-
erningthedemographicreservefundandforthedevelopmentofcomprehensiveandlong-
termsustainablepensionsolutions.
Kapitalskadruæba’smissionhasbeenthesamesinceitsinceptionandinconceptualtermsentails
performingthefunctionofdemographicreservefundtotheextentpermittedbyitsassets.The
ImplementationofthebudgetoftheRepublicofsloveniafor2016and2017act(ZIPRs1617)
envisagestheadjustmentofpensionsandthustransfersbyKapitalskadruæbatothepension
fundinthemaximumpossibleamountenvisagedbytheZsDH-1,i.e.eUR50million.Thefulfil-
mentofourlegalobligationrequirestheeffectivemanagementofcapitalinvestmentsandthe
continuedtransformationofKapitalskadruæbaintoaportfolioinvestor.In2016,wewillcontinue
thesaleofsloveniangovernmentequityinvestmentsandtheplacementofproceedsintoliquid
portfolioinvestments.WewilladaptandupdateKapitalskadruæba’sassetmanagementstrategy
duetotheCompany’stransformationintoademographicreservefund,theunstableconditions
ontheglobalfinancialmarkets,lowinterestratesandforecastsofweakeconomicgrowth.
Kapitalskadruæba’sroleinthestructureofslovenia’spensionsystemisbecomingincreas-
inglyimportantwiththegrowthinsoDPZassetsandthepaymentofpensionstotheafore-
mentionedfund’spolicyholders.fundamentalchangesareoccurringintheslovenianpension
systemwiththepaymentofoccupationalpensionsfromtheaforementionedfundinaccord-
ancewiththeZPIZ-2.Compulsorysupplementarypensioninsurance,whichisbasedonthe
55
actualsavingsofpolicyholdersinagivenperiod,isreplacingpensionsthatarefinancedon
thefly,andthereforerepresentsamodernformofpensionpaymentfoundedonacapital
basis.Theaforementionedinsurancefacilitatesearlyretirementforemployeeswhoperform
especiallydifficultworkandworkthatisharmfultotheirhealth,andworkthatcannolonger
beperformedsuccessfullyafteracertainage,anddoesnotusegeneralgovernmentand
budgetsources.Thesepensions,firstpaidin2014,representoneofmanypossiblesustain-
ableformsthatwillbecomeincreasinglyimportantduetotheunfavourabledemographic
characteristicsofsloveniansociety.Kapitalskadruæbaperformsthefunctionofdemographic
reservefundnotonlybecauseitcoversthedeficitinthepublicsystem,butalsobecauseitis
acreativedeveloperofcomprehensive,long-termsustainablepensionsolutions.
asthemanagerofthesoDPZ(thesecondlargestmutualpensionfundintermsofsize,with
thefastestgrowthinassets),Kapitalskadruæbawillworkactivelywithallstakeholdersin
theoccupationalinsurancesystem,bothviathefund’scommitteeanddirectly.Inproviding
compulsorysupplementarypensioninsurance,theCompanyisguidedbyconcernforpolicy-
holdersandtheiremployers,andforoccupationalpensioners.Wewillthereforecontinueto
strivetobeoneofthemostsuccessfulpensionsavingsmanagersinslovenia,andtoensure
thatsystematicpensionsolutionsareaimedatprovidinghigher-qualityandsaferformsof
insurance.Inthisway,wewillcontributetotheimprovedpensionstabilityofoccupational
insurancepolicyholdersandpensioners.
Duetolegislativechangesandwiththeaimofoptimisingbusinessprocessesthatareadapted
totheactualrequirementsofthebusinessenvironment,wewillimplementthreemajorpro-
jectsin2016,inadditiontotheCompany’stransformationintoademographicreservefund:
1.theimplementationoftheZPIZ-2b;2.theestablishmentofabridgingfundforathletes;and
3.thereplacementofITsupportforassetandfundmanagement.
TheprovisionsofthePensionandDisabilityInsuranceact(ZPIZ-2b)eliminate,toagreat
extent,thedeficienciesthataroseduringtheimplementationofpensioninsuranceandthat
werenotgovernedbythelaw.Verificationoftheaccuracyofpaid-incontributionsisnow
governedbythelaw,whilehigherfinesforliablepersonswhofailtofulfiltheirobligationsto
policyholdershavebeenset.solidarityreservesarebeingestablishedwiththeaimofelimi-
natingproblemsinthepaymentofoccupationalpensionstopolicyholderswhomeetthe
conditionsforoccupationalretirementbutdonothavesufficientfundsontheiraccounts.The
ZPIZ-2bimposesnumerousnewtasksandcompetencesonKapitalskadruæba.Wewillthus
transformthesoDPZandadjusttheoccupationalpensioninsuranceplanin2016inaccord-
ancewiththeZPIZ-2b.TheZPIZ-2bsetsoutacomprehensivesoDPZpensionschemein
whichthesavingsandpaymentelementswillbelinked.Thisrequiresthetransformationof
thecurrentKssoDPZandthetransferoftheoccupationalpensionpaymentfunctioninthe
scopeofanintegratedoccupationalinsurancepensionplan.asaresult,wewillalsoupdate
thesoDPZmanagementstrategy,asourguidingprinciplein2016remainsthemaximisation
ofKapitalskadruæba’sassetsandtheassetsofoccupationalinsurancepolicyholders.Kapital-
skadruæbawillassumenewcompetencesandobligationswiththeentryintoforceofthenew
pensionplan,includingcontrolovertheaccuracyofcontributionpayments,andin2018the
functionofmisdemeanoursauthority,whichwillincreasetheneedforadditionalemployees.
Thesecondproject,whichcarriesoverfrom2015,includesthecreationofabridginginsur-
ancefundforprofessionalathletesandthestartoftheprovisionofbridginginsurance.The
ZPZP©-1repealedtheoriginalbridginginsurancearrangementsandsetadeadlineof1sep-
tember2016forthecreationofthebridgingfundandadeadlineof30June2016forthecrea-
tionofafundcommittee.TheZPZP©-1statesthatfromoctober2016sportsassociations,as
employers,willbeobligedtopaycontributionsforbridginginsuranceforprofessionalathletes
bythedeadlinesandintheamountssetoutintheaforementionedact.Professionalathletes
willalsobeabletomakesvoluntarypaymentstothefunduptoalegallydefinedannuallimit.
56
Thebiggestchallenges,resultinginthehighestcosts,willariseduetourgentadaptationsto
ITsupportforthefunctioningofthebridgingfundandduetotheestablishmentofappropri-
atecommunicationchannelswiththeMinistryofeducation,scienceandsport,asthebody
responsiblefortheregisterofpolicyholders,andwithsportsassociationsasthoseobliged
topayregularmonthlycontributions.
In2016,wewillcontinuetheprocessofreplacingthesoftwareusedtosupportassetand
fundmanagement.Themostimportantdeadlinesintheaforementionedprojectarelinkedto
bothofthepreviouslydescribedprojects,i.e.theadaptationofthesoDPZtotheprovisionsof
theZPIZ-2bandtheestablishmentofandstartofoperationsofthebridgingfundforathletes.
newsoftwaresolutionsarebeingintroducedgradually,withtheprimaryfocusonthepursuit
ofprojectobjectivesthatarelinkedtolegallybindingdeadlinesforKapitalskadruæba.The
upgradingoftheinformationsystemwillbeaccompaniedbytheoptimisationofkeybusiness
processes,whichwillbeadaptedtochangesinthebusinessenvironmentandfinancialworld.
Throughthecommitmentandhighlevelofmotivationofallemployees,wewillfulfilour
missionagainin2016,whilebuildingandincreasingtheCompany’slong-termvalueforits
ownerthroughprudentandreliabledecisions.Throughtransformationintoademographic
reservefund,wewillopennewperspectivesfortheslovenianpensionsystemandsupport
thesustainableandlong-termeconomicdevelopmentofslovenia.Thisalsorepresentsan
appropriateresponsetochangingdemographicconditionsandtheprojecteddevelopment
ofthoseconditionsinslovenia.
In2016,Modrazavarovalnicawillcontinuetopursuestrategiesthatfocusonthesecurity
ofsupplementarypensioninsurancepolicyholders.Thatsecuritywillbeensuredthrougha
sufficientlevelofcapital,prudentoperationsandanincreaseinthevalueofsupplementary
pensionsavings.Themostpressingproblemsassociatedwithsupplementarypensioninsur-
anceincludetheproportionofemployeesnotincludedinsuchascheme,premiumsthatare
absolutelytoolow,meaningthatpensionannuitieswillnotcoverthedifferenceinlowerpen-
sionsfromcompulsoryinsuranceinthemajorityofcases,andtheacceleratedwithdrawalof
savings,althoughtheoptimalchoicefollowingretirementisanequallydistributedannuity
untiltheendofthepolicyholder’slife.Toreversethatnegativetrend,measuresarerequired
topromotethedevelopmentofsupplementarypensioninsurance.Inadditiontotheactive
raisingofawarenessandpromotions,thosemeasureswillcompriseeffortstoincludecol-
lectivesupplementarypensioninsuranceinnegotiationsontheharmonisationofcollective
agreements,includinginthecommercialsector,anincreaseintheamountoftaxreliefand
theabolishmentoftheabsolutelimitontaxreliefforsupplementarypensioninsurance,with
theentirepensionannuitydeductedfromthepersonalincometaxbase.
Itisevidentfromresearchcarriedoutin2015thatthekeyfactorinselectingasupplemen-
tarypensioninsuranceproviderremainssecurity:reliabilityandtrust,economicstabilityand
security,manyyearsofexperienceandreferences.Theimportanceofsecurityisthatmuch
greaterduetoagenerallylowleveloftrustinfinancialinstitutions,whichisstillpresentand
hasasignificantimpactonmarketdevelopments.
Thefocusofourdevelopmentwillbeonalternativesupplementarypensioninsurancesales
channels,includingonlinesalesandothernewmarketapproaches.Wewilldevelopourmar-
ketapproachwiththeaimofprovidingcustomersadistinctlydifferentexperiencecompared
withcompetitiveproducts,andofferingthemauniqueserviceintermsofpreparingand
exchanginginformation,andanup-to-dateandcompetitiveinformativeoffer.
Majorbusinessobjectivesin2016includegrowthinmarketshareintheareaofsupplementary
pensionsavingsandinthepaymentofsupplementarypensionannuities.Potentialgrowthin
premiumsalsoliesinincreasingtheindividualpremiumsofZVPsJUpolicyholders.Inaddi-
tiontothepremiumspaidbytheiremployers,whichhavebeencutforfourstraightyearsas
57
theresultofausteritymeasures,public-sectoremployeesmayalsosaveforasupplementary
pensionontheirown,butindividuallyandnolongeronaccountofareductioningrosswages.
Thesameconditionsthatapplytoemployersapplyforthepaymentofindividualpremiums
byZVPsJUparticipants,andthusprovidepublic-sectoremployeesamoreaffordableformof
individualsupplementarypensioninsurance.Increasedmarketingactivitiesduringthesecond
halfoftheyearwillbeaimedattheplannedtransformationoftheZVPsJUintoasub-fundwith
aguaranteedreturnandtheestablishmentofanumbrellalife-cyclefund,wheretheformula-
tionofhigher-riskinvestmentpoliciesforbothfundscanbeexpectedin2017.
Throughthedevelopmentandupdatingofsupplementarypensionsinaccordancewiththe
newfeaturesoftheZPIZ-2andtheimplementingregulationissuedbytheMinistryoffinance,
wewillofferarangeofpensionannuitiesin2016,takingintoaccounttheexpectationsofpoli-
cyholdersandprescribedlimitsonthelevelandtypeofassetsundermanagement.Inaccord-
ancewithadoptedguidelines,wewillcontinuetostrengthenourfocusonthecustomer,offer
themostpersonaltreatmentpossible,monitorcustomers’needsandadvisethemaccordingly.
Themeasurementoftherecognitionattheendof2015indicatedthatModrazavarovalnicais
relativelywell-knownamongpolicyholders,althoughrecalloftheinsurancecompanyispoorer
relativetootherprovidersofsupplementarypensioninsurance(consumersrecogniseModra
zavarovalnica,butfailtoconnectitwiththecoreproductthatitoffers).Theinsurancecompa-
ny’scommunicationconceptwillthereforecontinuetofocusonlinkingsupplementarypension
insurancewithModrazavarovalnicain2016,andthemoreintensivepositioningoftheinsurance
companyastheleadingandsecurestmanagerofpensionsavingsandpayerofsupplementary
pensionannuities.ThekeymessageswillemphasiseModrazavarovalnicaasatrustworthylong-
termpartner,wherethesecurityofsavingsandresponsibilityforfundparticipantstakepriority.
Certainchangeswillbemadetobusinessprocessestoachievealloftheaforementioned
objectives,andtoachieveoperationalexcellenceandcreateanenvironmentthatpromotes
theinnovativenessandcreativityofemployees.
Integratedinformationsupportforpensionfundsundermanagementandthestandardisa-
tionofprocessesformanagingassetsandliabilitieswillbecompletedin2016,bothinthe
areaofmutualpensionfundsandguaranteefundsforthepaymentofsupplementarypen-
sions.Developmentactivitieswillfocusontheupgradingofinformationservicesinthearea
ofsalesandmarketing(Modrie-invoice,ModrinetandCRM),withtheaimofmaintaininga
comprehensiveoverviewofcustomers.
Weexpectadifficultyearin2016intermsofthemanagementofinvestments,astheresult
ofrecordlowinterestrates,andlowyieldsonbondsandrelativelyhigh-value,higher-risk
investmentcategories.Theguaranteedreturnin2016wascutfrom1.94%to1.08%.Wenev-
erthelessassessthattheachievementofsuchareturnwillbedifficult.opportunitieswillhave
tobesoughtinnewinvestmentcategories.Weplantoachieveareturnthatisatleastequal
tothereturnofselectedbenchmarkindicesandtoexceedtheaveragereturnofcompetitive
pensionfunds.InmanagingthefirstPensionfund,wewillpursuetheobjectiveofclosing
thenegativegapbetweentheguaranteedandactualvalueofassets,andthusreducethe
levelofrequiredprovisionsastheresultoffailuretoachievetheguaranteedreturn,whichin
turnwillhaveapositiveeffectonoperatingresultsachievedin2016.
Modrazavarovalnicawillalsodedicatespecialattentiontotheprofessionalandpersonal
developmentofitsemployees,whoensurethesuccess,growthanddevelopmentofthe
insurancecompany.Wewillcontinuetooperateasafamily-friendlycompany,whiledemon-
stratingoursocialresponsibilitythroughresponsibilityfortheenvironment,transparentand
responsibleoperationsandactivitiesaimedatraisingpublicawarenessaboutthefactthat
supplementarypensionsavingsareinevitableandanurgentsourceofincometofacilitatea
decentstandardoflivingfollowingretirement.
58 Social responsibility
10.1 ResPonsIbIlITyToTHeWIDeRsoCIalCoMMUnITy
Kapitalskadruæba’smissionistheprovisionofsupplementaryfundingforcompulsorypen-
sionanddisabilityinsurance.KapitalskadruæbatransfersfundsintheamountofeUR50
milliontotheZPIZeveryyearbynolaterthan29september,primarilyforthepurposeof
adjustingpensions,oraproportionallyloweramountiftheamountrequiredtoadjustpen-
sionsislower.
TheZsDH-1resultedinachangetopreviousarrangementsregardingthetransfertothe
budgetoftheZPIZ.Inaccordancewiththethirdparagraphofarticle52oftheZsDH-1,the
annualobligationtotheZPIZdependsontheamountoftheadjustmentpensions,whichis
limitedtoeUR50million.notwithstandingtheaforementioned,Kapitalskadruæbatransferred
eUR19,000thousandtotheZPIZin2015fortheannualbonuspaidtopensionersbasedon
theprovisionsoftheZIPRs1415-C.Kapitalskadruæbahastransferredthecumulativeamount
ofeUR664,321thousandtothebudgetoftheZPIZ.
Table28: Kapitalska druæba, d. d.’s payments to the budget of the PDII
year amountoftransfer(ineUR)
1999 7,093,974
2000 55,499,916
2001 34,948,255
2002 41,729,261
2003 26,602,404
2004 26,602,404
2005 26,602,404
2006 39,121,182
2007 39,121,182
2008 49,000,000
2009 49,000,000
59
year amountoftransfer(ineUR)
2010 100,000,000
2011 50,000,000
2012 50,000,000
2013 50,000,000
2014 0
2015 19,000,000
Total 664,320,982
becausetheassociationofPensionersocietiesofsloveniabringstogetherandmotivates
individualswhochoosetospendtheirtimeactivelyfollowingretirement,Kapitalskadruæba
donatedwritten-offcomputersandmobilephonesatthebeginningof2015.
Kapitalskadruæbadonatedwritten-offfurnituretotheMinistryoftheInteriorduetothelack
andgenerallypoorstateofequipmentattheaforementionedministry.
InJune2015,Kapitalskadruæbaoptedtopurchaseadefibrillatorintendedforfirstaidinthe
eventofcardiacarrest.ItislocatedinthecommonareaoftheCompany’scommercialbuild-
ingandispubliclyaccessibletoeveryoneinthatbuildingandthesurroundingarea.Thedefi-
brillatorisenteredintheaeDdatabasewiththeaimofraisingpublicawarenessaboutthe
importanceandaccessibilityofthedevicebyallthoseinthevicinityoftheCompany.The
aimofthepurchasewastocontributetoimprovingthepossibilityofrevivingpersonssuf-
feringfromcardiacarrest.
asasociallyresponsiblecompany,Modrazavarovalnicaalsorespondstotheneedsofthe
environment.Wearedevelopingacultureofdonations,whichisbecomingengrainedinour
socialresponsibility.Wesupportsociallybeneficialprojectsthateducationalinstitutionsare
unabletoimplementaloneviainternalsources,andrespondtorequestsforfinancialaidfrom
educationalinstitutionsintheeventofnaturaldisasters.In2015,wesupportedthebalkan
express2015summerschoolorganisedbythefacultyofeconomicsinljubljana.Theaimof
theprojectwastoeducateslovenianandforeignundergraduateandpostgraduatestudents
studyingeconomicandbusiness.
Thecompanyalsorespondedthroughouttheyeartotherequestsofindividualassociations
andorganisationsthatwereprovidedpromotionalmaterialsforrafflesandgifts(sportsasso-
ciationsandclubs,retireeassociations,firefighterassociations,etc.).
Modrazavarovalnicafocusesasignificantportionofitscommunicationactivitiesonraising
theawarenessofthepopulationregardingtheimportanceofold-agesavings.Thefollowing
activitieswerecarriedoutwiththeaimofimprovingawarenessaboutsupplementarypen-
sioninsurance:theorganisationofnumerousconsultations,thedraftingofinformationfor
publicationoncorporatewebsitesandininternalnewsletters,andtheofferingofprofessional
helpinthepreparationofresponsestoquestionsaboutsupplementarypensioninsurance
posedtoemployersandunionsbyemployees.Thehumanresourceandaccountingdepart-
mentsofcustomershavebeeneducatedaboutthepossibilitiesandadvantagesofpay-outs
intheformofasupplementarypension,whileinformationofficesatcorporateheadquarters
havebeenintroduced.Representativesofthecompanyattendedtheannualconferenceof
companiesundertheauspicesofthefamily-friendlyCompanyassociationandthefinancial
daysorganisedbyUniCreditbankaagainlastyear,wheretheygaveapresentationonsup-
plementarypensioninsurance.
60
10.2 ResPonsIbIlITyToeMPloyees
10.2.1 Concernforemployeetraining
existingworkareasandthedevelopmentofnewbusinessfunctionsattheCompanyare
enhancedusingvariousformsofpre-plannedtrainingadaptedtothespecificjobrequire-
mentsandknowledgerequiredbyeachemployee,andtotheCompany’sdevelopmentally
establishedtasks.employeesthusreceiveadditionaltrainingbothinsloveniaandabroadby
attendingshorterorlongerseminarsandworkshops,andthroughplannedinternaltraining
carriedoutregularlyforallemployees.
During2015,employeesattendedseminarsonthefollowingtopics:taxregulations,wages,
personnelandotherdocumentationbearingpersonaldata,occupationalsafetyandhealth,
publicprocurement,valuation,thefamily-friendlyCompanycertificate,finance,current
issuesrelatingtocommerciallaw,thelatestdevelopmentsinthepreventionofmoneylaun-
dering,thebusinessacademy,thecollection,archiving,managementandretentionofdata,
informationtechnologyandauditing.
Inaccordancewithitseducationandtrainingplan,Kapitalskadruæbaalsoorganisedinternaltrain-
ingprogrammesin2015onthefollowingtopics:thepreventionofmoneylaundering,personal
dataprotection,conductintheeventofafireorotherdisaster,thecodeofethics,thelatestdevel-
opmentinlegislationgoverningcompanies(ZGD-1)andtheefQM(europeanfoundationforQual-
ityManagement)excellencemodel.Kapitalskadruæbaorganisedaworkshoponthesubjectof
businessetiquetteinseptember2015forallemployees,andanotherworkshopinoctober2015on
effectivecommunicationandcooperationamongstemployees.allemployeeswerealsoafforded
theopportunitytobuildontheirknowledgeoffinance-relatedenglishandbusinessGerman.
Kapitalskadruæbapromotescontinuingeducationandtheacquisitionofvariouslicencesin
theemployer’sinterest.Thisimprovesthequalityoftheworkprocessandimprovesemploy-
ees’qualificationsforworkinaspecificposition.In2015oneemployeeattendedmaster’s
degreecourses(accordingtothebolognamodel),threeattendedpostgraduatecourses(mas-
ter’sofscience),whiletwoemployeesattendedtrainingtoreceiveprofessionalqualifications.
Modrazavarovalnicaisawarethatonlyqualifiedemployeesarecapableofachievingthe
insurancecompany’sobjectivesandthattheworkofemployeescontributestomoresuc-
cessfuloperations.Modrazavarovalnicaencouragesitsemployeestocontinuouslyeducate
themselvesinallareas,astheinsurancecompany’ssuccessdependsontheirmotivation,
qualificationsandknowledge.educationandtrainingfacilitatetheacquisitionofstrategically
importantknowledge,moreefficientworkandthesuccessfulachievementofobjectives,
whileinthelongtermtheyaffectthecommitmentofemployeesandincreasetheirloyaltyto
theinsurancecompany,whichinturnresultsinalowerornearlyzeroturnoverrate.
almost92%ofemployeesattendedvariousformsofeducationandtrainingin2015.Three
employeeswereincludedinundergraduatestudies,oneinspecialisedstudiesandonein
doctoralstudies.Inadditiontoexternaltraining,Modrazavarovalnicaalsoorganisesinternal
employeetrainingcarriedoutindependentlybythecompany’sexperts.
employeesattendedseminars,consultations,conferencesandworkshopsatexternalinstitu-
tions,primarilywiththeaimofenhancingtheirexistingknowledgeandacquiringnewtechni-
calknowledge.educationandtrainingareadaptedtotheneedsoftheindividualjobandtothe
specificknowledgerequiredbyeachemployee,andarecoordinatedwithdevelopment-oriented
tasks.Theemphasiswasprimarilyonthedevelopmentofmanagerialandsalesskillsandskills
requiredforimprovedeffectiveness,andonincreasingawarenessregardingexposuretoopera-
tionalrisksandtrainingfortheprofessionalperformanceofallactivitiesattheinsurancecom-
panythatensureoperationalcompliancewiththelawandmitigatealltypesofoperationalrisks.
61
10.2.2 Concernforasafeandhealthyworkenvironment
Kapitalskadruæbaensuresasafeandpleasantworkenvironmentbyrespectingallregu-
lationsgoverningworkplacesafetyandbyprovidingtheappropriateworkingconditions.
Tasksrelatingtooccupationalhealthandsafety,andfiresafetyarecarriedoutregularly.
amongthemostimportanttasksinthisareaareregularemployeetraininginthearea
ofoccupationalhealthandsafety,participationintheassessmentofrisksinthework-
placeandworkingenvironment,regularperiodicpreventativemedicalexaminations,the
reviewofdeclarationsofworkplacesafety,studiesoftheworkenvironment(measure-
mentsofthemicro-climate,lightingandnoiseintheworkplace),measurementsofelec-
tricalinstallations,inspectionsofworkequipmentandexaminationsofcompliancewith
firesafetymeasures.
TheCompanyisawarethatmaintainingandimprovinghealthisimportant,asonlyhealthy
andsatisfiedemployeeswhoworkinasafeandstimulatingworkenvironmentareeffective
andinnovative,andarelesspronetosickleave.Wearethereforeimplementingsystemati-
callytargetedactivitieswiththeaimofmaintainingandstrengtheningthephysicalandmen-
talhealthofemployees.Thisisachievedbyimprovingtheorganisationofworkandthework
environment.Goodinterpersonalrelationshipsarethemostimportantinthisregard,asthey
haveadecisiveimpactonthehealthandwell-beingofemployees.Weencourageemployees
toactivelyparticipateinactivitiestoprotectandstrengthentheirhealth,includingthepos-
sibilityofattendingorganisedrecreationalactivities,andfacilitatetheselectionofahealthy
lifestyleandpromotetheirpersonaldevelopment.
Collectivesupplementarypensioninsuranceisanotherimportantaspectofensuringand
increasingthefuturesocialsecurityofemployees.asaresponsiblecompanythatcaresfor
itsemployees,KapitalskadruæbapaysmonthlypremiumsintotheModriUmbrellaPension
fund(MKPs)ofthefundmanagerModrazavarovalnica.Theaforementionedinsuranceis
alsoconsideredoneofthemostvaluedformsofmotivationamongemployees.Underthe
agreementonthecreationofapensionfundconcludedinfebruary2015,allemployeesare
eligibleforinclusionintheMKPsunderthesameconditions.
Kapitalskadruæbapaysthemaximumsupplementarypensioninsurancepremiumforits
employeesintheamountof5.844%ofanemployee’sgrosswages,oramaximumofeUR
234.92amonth.ThefirstpremiumswerepaidintotheMKPsinMarch2015.
Thecostsofemployeepremiumsforvoluntarysupplementarypensioninsurance(KVPs5and
MKPs)totalledeUR109thousandin2015.
Modrazavarovalnicaalsoprovidesitsemployeesasafeworkenvironmentandstimulating
workconditions.employeesconductthemselvesinaccordancewiththedeclarationofsafety
withriskassessment,theprimaryaimofwhichistopreventworkplaceinjuries,healthissues,
occupationaldiseasesandwork-relateddiseases.employeesregularlyparticipateinoccupa-
tionalhealthandsafetytrainingandfiresafetytraining,andarealsoincludedinaprogramme
ofpreventivehealthexaminations.
Thecompanyisawareoftheimportanceofensuringthehealthofallemployees.Through
theimplementationofanactionplantopromotehealth,employeesareencouragedtopur-
sueahealthylifestyleandthusreducetherisksofdisease,bothintheworkplaceandintheir
privatelives.agreatdealofinformationoncurrenthealthtopicsandusefularticlesabout
exerciseandhealthyeatingareavailableontheModrinetintranetsite.freshseasonalfruit
isavailabletoallemployeestwiceaweek,whilevaccinationsagainstthefluandtick-borne
meningoencephalitisareorganised.Thecompanyalsointroduceda30-minutemorningexer-
5 PremiumsforemployeeswerepaidintotheMutualequityPensionfund(KVPs)until1March2015.
62
ciseprogrammein2016.Theaforementionedprogrammeisheldonceaweek,andempha-
sisesthestretchingoftheneckshoulderandback,whicharesubjecttothegreatestburden
inofficework.
Thecompanyprovidesallofitsemployeessocialsecurityfollowingretirement,underthe
sameconditions,throughthepaymentofthemaximumtax-deductiblepremiumsintothe
collectivepensioninsuranceplanoftheMKPsmanagedbytheModrazavarovalnica.
A family-friendly company
Kapitalskadruæbaisawareoftheimportanceandadvantagesofanactivefamily-friendlypol-
icyattheCompanythatfacilitatesthebalancingofworkandfamilylife.TheKapitalskadruæba
teamisdiverseandincludesmanyyoungparentswithsmallchildren.TheCompanystrives
tofurtherimprovetheworkingenvironmentandtomakeitpossibleforallemployeestobal-
ancetheircareerdevelopmentandfamilylife,whichhasbecomepartoftheorganisational
culture.Wethusmaintainedactivitiesinthescopeofthefamily-friendlycompanyprojectin
2015.Thefollowing12measureswereadoptedduringtheacquisitionofthebasicandfullcer-
tificates:communicationwithemployees,opinionpollsamongemployees,publicrelations,
timeaccount,children’stimebonus,additionalannualleave,thephilosophyandconceptof
management,areintegrationplanfollowinganextendedabsence,socialisingamongemploy-
ees,theparticipationofemployees’familiesintemporaryjobsattheCompany,thegiving
ofgiftstocelebratenewbornsandnewyear’sgiftsforchildren.Themajorityofemployees
whorespondedtoanopinionpollindicatedthatthebalanceoftheirprivateandworklives
hasimproved.amongthemostpopularmeasuresarethetimeaccount,thechildren’stime
bonusforthefirstdayofprimaryschool,andnewyear’sgiftsandgiftsfornewborns.
Modrazavarovalnicaisalsotheproudholderofthefullfamily-friendlyCertificate.Concern
fortherightfamilyandworklifebalancehasbecomeapartofthecompany’sorganisational
culture.Thecompanybelievesthatsatisfiedemployeesaremoresuccessfulandthatthey
feelgreaterloyaltytothecompany,andthatsatisfactionhelpsreducetheburdenofstress,
allofwhichcontributestobetterworkresults.Thecompanyalsoensuresthegoodflowof
information,employeesatisfactionandapositiveworkclimate.
Practical training of a student registered with the Institute for Blind or Partially Sighted
Youth, Ljubljana
astudentregisteredwiththeInstituteforblindorPartiallysightedyouth,ljubljanacom-
pletedapracticaltrainingprogrammeatKapitalskadruæbain2015.Weattemptedtomake
thestudent’spracticaltrainingaspleasantaspossible,whilefamiliarisinghimwiththeimpor-
tanceandworkofKapitalskadruæba,andwithcertainworkprocessesattheCompany.a
greatdealofemphasiswasalsoplacedonapersonalapproachandinteractionwiththestu-
dent,whocompleted76hoursofon-the-jobtrainingatKapitalskadruæbain2015.Inthisway,
wemadeitpossibleforapartiallysightedstudenttotrainintheworkenvironmentforthe
purposeofgainingsomedegreeofindependenceandfacilitatinghisinclusioninthebroader
socialenvironmentfollowingthecompletionofhiseducation.
10.3 enVIRonMenTalResPonsIbIlITy
Theirrationaluseofnaturalresourcesandthepollutionoftheenvironmentarebecoming
pressingissuesthatKapitalskadruæbacannotoverlook.TheCompanythereforeestablished
separatewastecollection,whichfacilitatesthefurtheruseand/orprocessingofwaste.The
processingofwastehelpsprotecttheenvironment.becausewasteisusedasaresourcein
theproductionofnewproducts,weuselessnaturalresourcesandsignificantlylessenergy.
TheCompanypaysparticularattentiontothecollectionofplasticbottlecaps.Wecollected
63
atotalof40kilogramsduringtheyear,whichwedonatedtotheHappyfeetassociationfor
theCareofPersonswithDevelopmentalDisabilitiesin2015.
Kapitalskadruæbacollectsemptyprintercartridgesandsendsthemforrefilling.eachrefilled
printercartridgerepresentsadditionalsavingsforKapitalskadruæbaandispartoftheproject
toreduceandoptimiseoperatingcosts.ItisalsoareflectionofCompany’sresponsibilityfor
protectingtheenvironment.
atenderwasissuedin2014forthesupplyofelectricityinaccordancewiththeDecreeon
GreenPublicProcurement.TheCompanytookintoaccounttheprovisionsandrequirements
oftheaforementioneddecreeandsignedanagreementonthesupplyof100%ofelectricity
producedfromrenewablesources.energythatisproducedfromenvironmentallyfriendly,
renewablesourcesdoesnotusefossilfuels,whiletheproductionofenergyfromrenewable
sourcesdoesnotdrainnaturalresources.Thus,theburdenontheenvironmentfromgreen-
housegases,harmfulemissionsandradioactivewasteisreduced.
asasociallyresponsiblecompany,Modrazavarovalnicaalsosupportsenvironmentallyori-
entedactivities.Thecompanyseparateswaste,workstoreducetheuseofpaper,collects
usedprintercartridgesandrespondstocharitablecampaigns.Tothatend,itisalsodevelop-
ingvariouswebapplicationsthatreducetheneedforprintingandthatfacilitatefasterand
morereliablenotificationprocedures.
byusingthefreeModrie-accountwebservice,saverscanaccessdataregardingtheirown
monthlycontributionsandthecontributionsoftheiremployersatanytime,andmonitorthe
balanceofsupplementarypensionsavings.byintroducingelectronicnotificationchannels,
wearealsosavingpaperandthuscontributingtotheconservationofnature.
Modrazavarovalnicaalsocollectedalargequantityofplasticbottlecapsin2015,whichwere
donatedtotheHappyfeetassociationtohelpchildrenwithdifferentdevelopmentaldisabili-
ties.Thefoundersoftheaforementionedassociationaretheparentsofchildrenwithcerebral
palsyandotherdevelopmentdisabilities.employeesalsorespondedtothe‘santaClausefor
aDay’projecttohelpnumerouswell-intentionedpeopleprovideChristmaspresentstomore
than8,500childrenfromsloveniaandbosniaandHerzegovina.employeeswerealsoactively
involvedinthecollectionofaidforsociallydisadvantagedfamilies,andalsoremembered
theirfour-leggedanimalfriends.
In2015wesupportedthe‘you,MeandUsforslovenia’project,theaimofwhichisto
raisetheawarenessofyouthabouttheimportanceofahealthyenvironmentandattitudeto
nature,andtherecyclingofmaterialsthatcanbeusedasrawmaterialsforfurtherprocess-
ing.Theaforementionedprojectalsostrikesacharitablenote,asthefundscollectedwillbe
earmarkedforthepurposeofbuyinganincubatorandresuscitationtableforaslovenian
maternityhospital.
64 Report on relations with subsidiaries
astheparentcompany,Kapitalskadruæbaholdsa100%participatinginterestinModra
zavarovalnica,andhelda66.04%participatinginterestinPDPuntil21January2015.no
transactionswereexecutedbetweentheparentcompanyanditssubsidiariesin2015under
conditionsthatdeviatedfrommarketconditions.
11.1 RePoRTonRelaTIonsWITHMoDRaZaVaRoValnICa
Leaseofbusinesspremises
ModrazavarovalnicaleasesbusinesspremisesfromKapitalskadruæba.aleaseagreementwasconcludedin2011foraperiodoffiveyears.Themonthlyrentforequippedbusinesspremisesmeasuring1,704.23m2amountstoeUR27,714.Theaforementionedrentalfeeincludes46parkingplacesandelectricitycosts.
Useofcomputerprograms
astheexclusiveholderofmaterialcopyrightsonsoftwareusedtosupportpensionfunds,includingthesoftwarepackagesKadskladi,ProcschedulerfortheZVPsJU,ProcschedulerfortheKVPsandKad.net,KapitalskadruæbaallowsModrazavarovalnicatousethatsoftwareundertherelevantagreement.astheholderofrightstouseasoftwarepackagetosupportassetmanagement,KapitalskadruæbaalsoallowsModrazavarovalnicatousetheadTreas-uryandIteonaloæbesoftware,withtheconsentoftheexclusiveholdersofmaterialrightsonthoseprograms.Theiruseispermittedfortheperiodoftimesetoutinthemutualagree-mentontheleaseoftheaforementionedprograms.ThemonthlycontractualvalueiseUR9,800,excludingVaT.ThatamountisbeingreducedgraduallyduetoModrazavarovalnica’stransitiontoanindependentsoftwaresolutionforassetandfundmanagement.
ProvisionofITservices
KapitalskadruæbaprovidesITservicesforModrazavarovalnica.Thoseservicesincludethemaintenanceofworkstationsandotherusers,helpdeskservices,internetaccessservices,reportingsystemservices,datafileandprintingservices,roamingservicesforbusinesssoft-wareinthetestandproductionenvironmentsinKapitalskadruæba’sITinfrastructure,andmaintenanceofthelatter.Themonthlyfeeincludesthecostoflabourofexperts,thecostofhardwaremaintenance,thecostsofsystemsoftwarelicencesandinternetcosts.The
monthlycontractualvalueiseUR10,752,excludingVaT.
65
Agreementonthefinancingofthepensionplan
KapitalskadruæbahadanagreementwithModrazavarovalnicauntilfebruary2015onthe
financingofthePn1Kpensionplan,whichisimplementedbytheMutualequityPension
fund;anagreementhasbeeninplacesincefebruary2015onthefinancingofthePnMZK
pensionplan,whichisimplementedbytheopenModriUmbrellaPensionfund.Kapitalska
druæbapaysthemaximumsupplementarypensioninsurancepremiumforitsemployeesin
theamountof5.844%ofanemployee’sgrosswages,oramaximumofeUR234.92amonth.
11.2 RePoRTonRelaTIonsWITHPDP
ProvisionofHRservices
KapitalskadruæbaprovidedHRandgeneralservicesforthesubsidiaryPDPuntilthelatter’s
mergerwithsDHon1July2015.Theaforementionedservicesincludedallactivitiesincon-
nectionwithrecruitmentandtheterminationofemploymentrelationships,thekeepingof
HRrecords,thecompilationofdataforthecalculationofsalaries,expertassistanceinthe
harmonisationofinternalacts,responsibilityforandexecutionofHRMandtraining,andall
otherHR-relatedtasksinaccordancewiththeapplicablelabourlegislation.Themonthlyfee
waseUR150,excludingVaT.
Provisionoffinancial-accountingservices
KapitalskadruæbaprovidedthefollowingservicesforthesubsidiaryPDPuntilitwasmerged
withsDH:themanagementofthecompany’sbooksofaccount,thecompilationoffinancial
statementsinaccordancewithvalidstandardsandlegislation,thepreparationoftaxreturns
andtheprovisionofotheraccounting-relatedservices.anagreementontheprovisionof
financial-accountingserviceswasconcludedforthatpurpose.ThemonthlyfeewaseUR
1,666,excludingVaT.
ProvisionofITservices
KapitalskadruæbaprovidedITservicesforthesubsidiaryPDPuntilitsmergerwithsDH.
Thoseservicesincludedthemaintenanceofworkstationsandotheruserdevices,helpdesk
services,messagingsystemservices,datafileservices,fixedtelephonyservices,theleas-
ingofbusinesssoftware(licences),roamingservicesforbusinesssoftwareintheproduction
environmentinKapitalskadruæba’sITinfrastructure,andthemaintenanceofthelatter.The
monthlyfeeincludedthelabourofexperts,thecostsofsystemsoftwarelicencesandthe
costofhardwaremaintenance.ThemonthlycontractualvaluewaseUR688,excludingVaT.
WiththedeletionofPDPfromthecompaniesregisteron1July2015,theagreementonthe
provisionoftheaforementionedserviceswasalsoterminated.
66 Indicators
in EUR 000
2015 2014 2015 2014
1. FINANCING RATIOS
a) Equity financing ratio
equity 1,004,495 997,9170.85 0.80
total equity and liabilities 1,184,036 1,249,082
b) Long-term financing ratio
equity + long-term liabilities (including provisions) + long-term accrued costs and deferred revenues
1,179,507 1,146,0881.00 0.92
total equity and liabilities 1,184,036 1,249,082
2. INVESTMENT RATIOS
a) Operating fixed asset investment ratio
fixed assets (at carrying amount) 7,730 7,9190.01 0.01
assets 1,184,036 1,249,082
b) Long-term investment ratio
fixed assets + long-term deferred costs and accrued revenues (at carrying amount) + investment property + long-term financial assets + long-term operating receivables 1,012,425 851,402
0.86 0.68assets 1,184,036 1,249,082
3. HORIZONTAL FINANCIAL STRUCTURE RATIOS
a) Equity to fixed assets ratio
equity 1,004,495 997,917129.95 126.02
fixed assets (at carrying amount) 7,730 7,919
67
2015 2014 2015 2014
b) Acid test ratio
liquid assets 44,146 37,0409.75 0.36
short-term liabilities 4,529 102,994
c) Quick ratio
liquid assets + short-term receivables 50,290 39,42411.10 0.38
short-term liabilities 4,529 102,994
d) Current ratio
short-term assets 157,843 391,10234.85 3.80
short-term liabilities 4,529 102,994
4. EFFICIENCY RATIOS
a) Operating efficiency
operating revenues 40,431 36,0410.88 0.92
operating expenses 45,908 39,220
5. PROFITABILITY RATIOS
a) Net return on equity
net profit for the period 29,351 73,4600.03 0.08
average equity (excluding net profit/loss for period) 949,801 937,482
b) Dividends to share capital ratio
dividends for financial year 0 00.00 0.00
average share capital 364,810 364,810
68 Corporate governance statement
Inaccordancewiththeprovisionsofpoint3.4oftheCorporateGovernanceCodeforCom-
panieswithstateCapitalInvestments,Kapitalskadruæbaherebyissuesitscorporategovern-
ancestatementfortheperiod1January2015to31December2015.
1.1 asapubliclimitedcompanywhosesoleshareholderistheRepublicofslovenia,Kapitalska
druæbavoluntarilycomplieswiththeCorporateGovernanceCodeforCompanieswithstate
CapitalInvestments,whichrecommendstheprinciples,proceduresandcriteriaforconduct
bymembersofthemanagementandsupervisorybodiesofcompaniesinwhichtheRepublic
ofsloveniaisashareholder.
KapitalskadruæbaherebyissuesitsstatementofcompliancewiththeCorporateGovern-
anceCodeforCompanieswithstateCapitalInvestments,whichwasadoptedbysDHon
19December2014.Theaforementionedcodeincludesprinciplesandrecommendedbest
practicesforthecorporategovernanceofcompanieswithstatecapitalinvestments.The
codewaspublishedonthewebsiteofslovenskidræavniholdingathttp://www.sdh.si/sl-si/
upravljanje-nalozb/kodeks-upravljanja-kapitalskih-nalozb-republike-slovenije.
ThestatementofcompliancewiththeCorporateGovernanceCodeforCompanieswithstate
CapitalInvestmentsispublishedontheCompany’swebsiteathttp://www.kapitalska-druzba.si.
TheManagementboardandthesupervisoryboardofKapitalskadruæbaherebydeclarethat
theyvoluntarilycomplywiththeCorporateGovernanceCodeforCompanieswithstateCapi-
talInvestmentsintheirworkandoperations.anydeviationsfromtheCorporateGovernance
CodeforCompanieswithstateCapitalInvestmentsarecitedandexplainedbelow:
3.Corporategovernanceframeworkforcompanieswithcapitalassetsofthestate
3.1Themaingoalofacompanywithstatecapitalinvestmentsengagedinaprofitableactivityshallbetomaximisethecompany’svalueandtogeneratethehighestpossiblereturnsforitsowner.Companiesshallalsopursueothergoalsthataredefinedbyregula-tionsorthearticlesofassociationofanindividualcompany(e.g.providingapublicser-viceandprovidingaccesstotheinfrastructurebycitizens).Withtheaimofensuringtheincreasedtransparencyofacompany’sgoalsandconsideringthefactthatallsharehold-ersmustagreewiththepursuitofnon-economicgoals,companiesshallensurethatallsuchgoalsareclearlydefinedintheirdocumentsonincorporation,irrespectiveofwhetherthosegoalsderivefromstatutoryprovisionsorthewillofshareholdersand/orowners.
69
Note:Giventhespecificpurposeofitsestablishmentanditsplannedtransformationintoan
autonomousdemographicreservefund,andtakingintoaccountthestatecapitalinvestment
managementstrategy,Kapitalskadruæba’sprimaryconcernisthefulfilmentofitslegalobli-
gationtoprovidefundstotheZPIZ.
3.2Notwithstandingtheownershipstructure,themanagementboardofapubliclim-itedcompanywithstatecapitalinvestmentsandthemanagementboardofalargeandmedium-sizedpubliclimitedcompanyorlimitedliabilitycompanyinwhichthestateorSDH,individuallyorcollectively,directlyorindirectly,holdacontrollinginflu-ence,shallformulateandadoptacorporategovernancepolicyinconjunctionwiththesupervisoryboard.Thatpolicyshalldefinetheprincipalguidelinesregardingcorpo-rategovernanceandthecontentsetoutinRecommendationno.21andAppendixA.14oftheCorporateGovernanceCode,takingintoaccountthestatecapitalinvestmentmanagementstrategy.Thegovernancepolicyshallbeadoptedforthefutureperiodandshallbeupdatedbythecompanysothatitisinlineatalltimeswithregulations,thecompany’sarticleofassociation,thestatecapitalinvestmentmanagementstrat-egyandcurrentcorporategovernanceguidelines.Thegovernancepolicyshallincludethedateofthelastupdateandshallbeaccessibleonthecompany’spublicwebsite.Note:Givenitstransformationintoanautonomousdemographicreservefund,asenvisaged
bythelaw,Kapitalskadruæbahasnotyetadoptedacorporategovernancepolicy.TheCom-
pany’scorporategovernancepolicywillbeformulatedtakingintoaccounttheprovisionsof
thelawgoverningitstransformation,whichwilldefinethefunctioningofthedemographic
reservefundandadditionalpermanentsourcesoffinancing,andtakingintoaccountthestate
capitalinvestmentmanagementstrategy.
6.Supervisoryboard
6.4Asupervisoryboardshallbecomposedinsuchawayastoensureresponsiblesupervisionanddecision-makingintheinterestsofacompany.Thecompositionofasupervisoryboardshalltakeintoaccountprofessionalknowledge,experienceandskillsthatdifferfrommembertomemberbutarecomplementary(intermsofknowl-edgeandexperience).Thediversecompositionofasupervisoryboard,intermsofcharacteristicssuchasage,gender,internationalcomposition,etc.(i.e.theheteroge-neityofitscomposition),shallbeensuredtothegreatestextentpossible.Note:Kapitalskadruæbacomplieswiththeaforementionedprovisionsofthecodemutatis mutan-dis,takingintoaccountthecogentprovisionsofarticle51oftheZsDH-1andtheCompany’sarti-
clesofassociation,whichsetoutaspecialcompositionofKapitalskadruæba’ssupervisoryboard.
6.6Ifageneralmeetingelectsmembersofasupervisoryboard,asproposedbythesupervisoryboard,thesubstantiationofproposalsfortheadoptionofresolutionsshallinclude,inadditiontothedatarequiredbylaw,ataminimuminformationregardingeachproposedcandidate’smembershipinothermanagementorsupervisorybodiesandanassessmentof(potential)conflictsofinterests,wherethatassessmentalsoshalltakeintoaccounttheindividualcriteriastatedinAppendixCtotheCorporateGovernanceCode.Asupervisoryboardshallalsodiscloseinformationastowhetheraproposedcandidateisindependentintermsofthedefinitionsetoutinthecodeandwhethertheproceduressetoutinthecodeweretakenintoaccountintheselectionofacandidate.Note:TheCompanydoesnotcomplywiththeaforementionedprovisionofthecodeinfull
duetothecogentprovisionsofthesloveniansovereignHoldingCompanyact(ZsDH-1)and
Kapitalskadruæba’sarticlesofassociation,whichenvisageaspecialprocedurefornominat-
ingmemberstoKapitalskadruæba’ssupervisoryboard.
6.7.8Immediatelyfollowingtheconveningofageneralmeetingthatwillvoteonnewsupervisoryboardmembersbasedontheproposalofthesupervisoryboardofacompanywithstatecapitalinvestments,thechairmanofthatcompany’ssupervisory
70
boardshallinvitecandidateswhohavebeenproposedforelectionbythesupervisoryboardtosubmittheirapplicationstoSDH’sHRcommitteeforaccreditation.Iftheiraddressesareknown,SDH’sHRcommitteemayalsoinvitecandidatestosubmittheirapplicationsforaccreditationandnomination.Note:TheCompanydoesnotcomplywiththeaforementionedprovisionofthecodeinfull,
becausetheRepublicofsloveniarepresentsKapitalskadruæba’sGeneralMeeting.Inaccord-
ancewiththeprovisionsoftheZDsH-1,threemembersareappointedtothesupervisory
boardbasedonsDH’sproposal.
7.Managementboardorseniormanagement
7.3Thesupervisoryboardofacompanywithstatecapitalinvestmentsthatisorgan-isedasapubliclimitedcompanyorasalargeormedium-sizedlimitedliabilitycom-panyshalldraftaremunerationpolicyforgovernancebodiesinaccordancewiththeCorporateGovernanceCodeforCompanieswithStateCapitalInvestmentsandsub-mitittothegeneralmeetingforadoption.Thedraftingofsuchaproposalshallbetheresponsibilityofthechairmanofthesupervisoryboardandthenominationcommittee,providedthatthelatterexists.Atthegeneralmeeting,thechairmanofthesupervisoryboardshallpresentshareholdersandotherownersthecurrentremunerationpolicyandtheimplementationthereof,andshallprovideanassessmentofthefunctionandroleoftheaforementionedpolicy.Thesupervisoryboardshallensurethattheremu-nerationofmembersofthemanagementboardorseniormanagementisinlinewiththepolicyadoptedbythegeneralmeetinginaccordancewiththelaw.Note:TheremunerationofmembersoftheManagementboardisgovernedbytheZsDH-1.
Inaccordancewiththefifthparagraphofarticle51oftheZsDH-1,thesameconditionsand
criteriathatapplytothemembersoftheManagementboardofsDH,accordingtothepro-
visionsoftheZsDH-1,applytothemembersofKapitalskadruæba’sManagementboard.no
remunerationpolicyhasbeenadoptedtodate.
10.Adoptionofacodeofethicsandcorporateintegrity
10.2CompanieswithstatecapitalinvestmentsshallestablishasystemofcorporateintegritywithasmanyelementsoftheSlovenianCorporateIntegrityGuidelinesaspossible,takingintoaccountthesizeofacompanyandtheseverityofbreachesofcorporateintegrity(knownorsuspected).SDHsupportsthesolutionthat,largecompa-niesinparticular,shallentrusttheoversightofcorporateintegrity,asanindependentfunction,toacorporateintegrityofficerwhowillbeprovidedtherequisitetrainingandpaymentfortheirexpertassistance,andthenecessarymaterialmeansandauthorisa-tionstoensuretheirunhinderedwork.Note:KapitalskadruæbacomplieswiththeessentialelementssetoutintheslovenianCor-
porateIntegrityGuidelines,althoughithasnotyetestablishedtheindependentfunctionof
corporateintegrityofficer.
1.2 DescriptionofthemainfeaturesoftheCompany’sinternalcontrolandriskmanage-mentsystemsinrelationtothefinancialreportingprocessNote:Kapitalskadruæbamanagesrisksandcarriesoutinternalcontrolsatalllevels.The
purposeofinternalcontrolsistoensuretheaccuracy,reliabilityandtransparencyofallpro-
cesses,andtomanagetherisksassociatedwithfinancialreporting.
Internalcontrolsarecarriedoutbythefinanceandaccountingsector,whichisresponsible
formaintainingthebooksofaccountandforthecompilationoffinancialstatementsinaccord-
ancewiththevalidfinancialreporting,taxandotherregulations.Thoseregulationsensurethat:
�� �businesseventsarerecordedonthebasisofcredibleaccountingdocuments,whichin
turnensuresthatbusinesseventsarerecordedaccuratelyandfairlyandprovidesassur-
ancethattheCompanydisposesofitsassetsinanhonestmanner;and
71
�� �businesseventsarerecordedandthefinancialstatementscompiledinaccordancewith
theapplicablelaws.
Kapitalskadruæba’sfinancialstatementsforeveryfinancialyearareverifiedandauditedbyan
externalauditor.onthebasisoftheresolutionpassedbyGeneralMeetingon31august2015,
theCompany’sfinancialstatementsfor2015wereauditedbyDeloitterevizijad.o.o.,ljubljana.
TheInternalauditDepartmentisanindependentorganisationalunitthatreportsdirectlyto
theCompany’sManagementboard.Thisensurestheindependenceofitsworkanditsseg-
regationfromtheimplementingfunctionsthataresubjecttoauditing.Theverificationofthe
Company’sinternalcontrolsystemsandtheprovisionofassurancesregardingthefunctioning
ofthosesystemsrepresentthecoreareaofinternalauditingwork.Internalauditorsassess
theeffectivenessofthefunctioningofinternalcontrolsintermsofthemanagementofthe
riskstowhichtheCompanyisexposed.Inaccordancewithitsannualworkplan,whichis
approvedbytheCompany’sManagementboardandsupervisoryboard,theInternalaudit
DepartmentperformsauditsofindividualareasoftheCompany’soperations.TheInternal
auditDepartmentcontributestotheimprovedperformanceoftheCompanythroughrecom-
mendationsforimprovementstobusinessprocessesandprocedures.
1.3 SignificantdirectandindirectownershipoftheCompany’ssecuritiesintermsofachievingaqualifyingholdingassetoutintheactgoverningtakeoversNote:Kapitalskadruæba’ssoleowneristheRepublicofslovenia,whichholdsall874,235
ordinaryregisteredno-par-valueshares(100%ofsharecapital).
1.4 HoldersofsecuritiesthatprovidespecialcontrollingrightsNote:TheCompanydoesnothavesecuritiesthatwouldprovidespecialcontrollingrights.
1.5 RestrictionsonvotingrightsNote:Kapitalskadruæba’ssoleowneristheRepublicofslovenia,whichholdsall874,235
ordinaryregisteredno-par-valueshares.Therearenorestrictionsonitsvotingrights.
1.6 Company’srulesontheappointmentandreplacementofmembersofthemanagementandsupervisorybodies,andchangestotheArticlesofAssociationNote:Therulesontheappointmentandreplacementofmembersofthemanagementand
supervisorybodiesandonstatuschangesaredefinedinthearticlesofassociation.
ThesupervisoryboardofKapitalskadruæbaisappointedbytheCompany’sGeneralMeet-
ing.Thesupervisoryboardcomprisessixmembersinaccordancewiththesixthparagraph
ofarticle51oftheZsDH-1.Threemembersofthesupervisoryboardwereappointedonthe
basisofaproposalbysDH,whiletwomemberswereappointedonthebasisofaproposal
bynational-levelfederations/organisationsofpensioners.onememberwasappointedonthe
basisofaproposalbynational-levelrepresentativetradeunionfederationsorconfederations.
Ifanindividualinterestgroupdoesnotformulateaproposalfortheappointmentofmembers
ofthesupervisoryboardinthemannerdefinedbelow,theGeneralMeetingoftheCompany
appointsmissingmembersatitsowndiscretion.Theproposalforcandidatestorepresent
sDHisformulatedbysDH’sManagementboard,whichinformsthesupervisoryboardof
itschoice.Theproposalforcandidatestorepresentpensionersisformulatedbynational-
levelfederations/organisationsofpensioners,whichinformthesupervisoryboardoftheir
choice.Theproposalforacandidatetorepresenttradeunionsisvoteduponbyrepresenta-
tives(electors)ofnational-levelrepresentativefederations/confederations,whichinformthe
supervisoryboardoftheirchoice.eachrepresentativefederation/confederationhasasmany
representativesasthenumberofrepresentativetradeunionsamalgamatedwithinthem.In
additiontotherepresentativesreferredtointheprecedingsentence,afederation/confedera-
tionshalleachhaveonerepresentativeforeverytenthousandmembers.Membersofthe
supervisoryboardserveafour-yeartermofofficeandmaybereappointed.
72
MembersoftheManagementboardareappointedbythesupervisoryboardonthebasis
ofapublictender.oneofthemembersoftheManagementboardisappointedpresident
thereof.MembersoftheManagementboardserveafour-yeartermofofficeandmaybere-
appointed.TheManagementboardoritsindividualmembersmayberecalledpriortotheend
oftheirtermofoffice,butonlyforthereasonssetoutinthesecondparagraphofarticle268
oftheZGD-1.aviolationofthearticlesofassociationofKapitalskadruæbathatisdeemedto
beaseriousviolationofobligationsmayconstituteareasonofculpabilityresultinginrecall.
ThearticlesofassociationandamendmentstheretoareadoptedbytheGeneralMeetingof
KapitalskadruæbaattheproposaloftheManagementboardandsupervisoryboard.
1.7 Powersofseniormanagement,inparticularpowerstoissueorpurchasetreasurysharesNote:ThepowersofseniormanagementaresetouttheCompanyarticlesofassociation.
TheManagementboardofKapitalskadruæbahasnopowerstoissueorpurchasetreasury
shares.
1.8 InformationregardingthefunctioningoftheCompany’sGeneralMeetinganditskeycom-petences,andadescriptionoftherightsofshareholdersandhowthoserightsareexercisedNote:TheCompany’ssoleshareholderexercisesitsrightsarisingfromtheownershipofshares
attheGeneralMeeting.TheGeneralMeetingistheCompany’shighestbodyandfunctionsin
accordancewiththeprovisionsoftheZGD-1,theZsDH-1andtheCompany’sarticlesofasso-
ciation.TheGeneralMeetingisconvenedbytheCompany’sManagementboard,asdefined
bythelawandthearticlesofassociation,andwheneveritsconveningisintheinterestofthe
Company.TheGeneralMeetingmayalsobeconvenedbythesupervisoryboard.TheGeneral
MeetingmustalsobeconvenediftheshareholderrequeststhattheManagementboarddoso.
Theshareholder’swrittenrequesttoconvenetheGeneralMeetingmustincludeanagenda,a
proposedresolutionforeachproposeditemoftheagendatobedecideduponbytheGeneral
Meeting,oranexplanationoftheagendaitemiftheGeneralMeetingwillnotdecideonthe
iteminquestion.TheconveningoftheGeneralMeetingmustbepublishedatleast30days
priortothemeeting.TheconveningoftheGeneralMeetingispublishedonthewebsitesof
theaJPesandKapitalskadruæba.ThepublicationoftheconveningoftheGeneralMeeting
mustalsoincludeproposedresolutionsanddetailsoftheplacewhereallmaterialssubmitted
fordecision-makingattheGeneralMeetingmaybeaccessed.ashareholderwhoisregistered
assuchinthecentralregisterofbook-entrysecuritiesattheendofthefourthdaypriortothe
GeneralMeetingisentitledtoparticipateandexercisetheirvotingrightsattheGeneralMeeting.
TheGeneralMeetingmakesdecisionsonbasicmattersrelatingtoKapitalskadruæba,inparticu-
lartheadoptionoftheCompany’sarticlesofassociationandamendmentsthereto.Itadopts
theannualreport,ifthesupervisoryboardhasnotconfirmedtheannualreportoriftheMan-
agementboardandthesupervisoryboarddeferthedecisionregardingtheadoptionofthe
annualreporttotheGeneralMeeting.Itdecidesontheuseofdistributableprofitattheproposal
oftheManagementboardandsupervisoryboardandonthegrantingofdischargetomembers
oftheManagementboardandsupervisoryboard.ItappointsandrecallsmembersofKapital-
skadruæba’ssupervisoryboardandappointstheCompany’sauditor.Itdecidesonmeasures
toincreaseorreducesharecapital,unlessthearticlesofassociationorthelawdetermineoth-
erwise.Itdecidesonthewinding-upofKapitalskadruæbaandonstatuschangesthereto,and
decidesonothermattersinaccordancewiththelawandthearticlesofassociation.
1.9 Informationregardingthecompositionandfunctioningofmanagementandsupervi-sorybodiesandtheircommitteesNote:ThegovernanceofKapitalskadruæbaisbasedonlegalprovisionsandtheprovisions
oftheCompany’sarticlesofassociation.TheCompanyhasatwo-tiergovernancesystem
underwhichtheCompanyismanagedbyitsManagementboardandtheworkofthelatter
issupervisedbythesupervisoryboard.
73
1.9.1 SupervisoryBoardTheresponsibilitiesofthesupervisoryboardaresetoutintheCompany’sarticlesofasso-
ciation,whileitsworkmethodisgovernedbytheaforementionedbody’srulesofprocedure.
adetaileddescriptionoftheactivitiesandworkmethodofthesupervisoryboardin2015is
givenintheReportofthesupervisoryboard.ThesupervisoryboardofKapitalskadruæba
functionedinthefollowingcompositionin2015:
�� samolozej,Chairman,
�� aldoTernovec,DeputyChairman(until31January2015),
�� aleksanderMervar,Msc(member),
�� stanislavseniËar(member),
�� anabilbija(memberuntil31January2015),
�� ladislavRoæiË,Msc(member),
�� DrborisænidariË,(membersince1february2015;DeputyChairmanfrom5March2015
to22november2015);hisfunctiononthesupervisoryboardhasbeensuspendedsince
23november2015,and
�� CirilasurinaZajc(membersince1february2015;DeputyChairwomansince23novem-
ber2015).
Twocommitteesfunctionedwithinthesupervisoryboardin2015:anauditcommitteeand
anaccreditationcommittee.Thecompositionandworkoftheaforementionedcommittees
arepresentedintheReportofthesupervisoryboard.
1.9.2 ManagementBoardInaccordancewiththeZsDH-1andtheCompany’sarticlesofassociation,theManagement
boardhasaminimumoftwoandamaximumofthreemembers.ThemembersoftheMan-
agementboardareappointedtoafour-yeartermofofficebythesupervisoryboardbased
onapublictenderprocedure.Kapitalskadruæba,d.d.wasrunbyitsManagementboardin
2015inthefollowingcomposition:
�� bachtiarDjalil,President,
�� anjastrojin©tampar,Msc,member,and
�� DrborisænidariË,member.
ThePresidentandmemberofKapitalskadruæba’sManagementboardwereappointedbythe
supervisoryboardinaccordancewiththeCompany’sarticlesofassociationandtheprovi-
sionsoftheZsDH-1,onthebasisofapublictenderprocedure.ThePresidentoftheMan-
agementboardbachtiarDjalilbegananewfour-yeartermofofficeon2January2015.The
termofofficeofanjastrojin©tampar,Mscexpiredon30november2015.Thetemporary
memberofKapitalskadruæba’sManagementboard,DrborisænidariË,wasappointedfora
periodofoneyearbyKapitalskadruæba’ssupervisoryboardpursuanttothesecondpara-
graphofarticle273oftheZGD-1.DrænidariË’stermofofficebeganon23november2015.
TheManagementboardmanagesthecompanyintheintereststhereof,independentlyand
atitsownrisk.ThemembersoftheManagementboardrepresentKapitalskadruæbainde-
pendentlyandwithoutrestrictions.Thecompany’sarticlesofassociationsetoutthetrans-
actionsanddecisionsforwhichtheManagementboardmustobtaintheconsentofthe
supervisoryboard.TheManagementboardofKapitalskadruæbaisanswerabletothesuper-
visoryboardandtheGeneralMeetingforitswork.InmanagingtheCompany’stransactions,
itmustactwiththedueprofessionaldiligenceofagoodmanager,safeguardthebusiness
secretsofKapitalskadruæbaandcomplywiththeprohibitionofcompetitionclause.
TheManagementboardexerciseditscompetencesin2015inaccordancewiththerulesof
procedureofthatbody,reportedregularlytothesupervisoryboardandfulfilleditsobliga-
tionstotheshareholder,assetoutintheZGD-1andZsDH-1,inaccordancewiththearticles
ofassociation.
76 Statement of the management’s responsibility
TheManagementboardofKapitalskadruæbapokojninskegaininvalidskegazavarovanja,d.
d.,approvesthefinancialstatementsoftheKapitalskadruæbaGroupfortheyearended31
December2015,andtheaccompanyingnotesanddisclosuresthereofonpages90to149,
whichareanintegralpartofthefinancialstatements.
TheManagementboardconfirmsthattheappropriateaccountingpolicieswereconsistently
applied,andthattheaccountingestimatesweremadeundertheprincipleofprudenceand
goodmanagement.TheManagementboardalsoconfirmsthatthefinancialstatementsgive
trueandfairpresentationofthefinancialpositionoftheKapitalskadruæbaGroupandthe
resultsofitsoperationfortheyearended31December2015.
TheManagementboardisalsoresponsiblefortheappropriateaccountingsystemandadop-
tionofmeasurestosecurethepropertyandotherassets.TheManagementboardconfirms
thatthefinancialstatementsandnotesthereofhavebeencompiledundertheassumptionof
agoingconcern,andinaccordancewiththecurrentlegislationandInternationalfinancial
Reportingstandards(IfRs)adoptedbytheeU.
TheTaxauthoritiesmay,atanytimewithinaperiodof5yearsaftertheendoftheyearfor
whichataxassessmentwasdue,carryoutanauditoftheKapitalskadruæbaGroup’sopera-
tions,whichmayleadtoassessmentofadditionaltaxliabilities,defaultinterest,andpenal-
tieswithregardstocorporateincometaxorothertaxesandduties.TheManagementboard
isnotawareofanycircumstancesthatmayresultinasignificanttaxliability.
DrBorisÆnidariË BachtiarDjalilMemberoftheManagementboard PresidentoftheManagementboard
80 Financial Statements for 2015
16.1 ConsolIDaTeDInCoMesTaTeMenTfoRTHePeRIoDfRoM1JanUaRy2015To31DeCeMbeR2015
Item Notes 1.1. − 31.12.2015
in EUR 000
1.1. − 31.12.2014
Continued operations
1. Net revenue from sales 1
c) Revenue from sales on the domestic market 39,942 35,297
Total revenue from sales 39,942 35,297
4. Other operating revenue (including revaluation revenue) 2 489 744
Total revenue 40,431 36,041
5. Costs of goods, materials and services 3
b) Costs of materials -253 -240
c) Costs of services -4,342 -3,837
Total costs of goods, materials and services -4,595 -4,077
6. Labour costs 4
a) Payroll costs -4,260 -4,042
b) Social security insurance costs -683 -650
c) Pension insurance costs -213 -206
d) Other labour costs -482 -438
Total labour costs -5,638 -5,336
81
Item Notes 1.1. − 31.12.2015
in EUR 000
1.1. − 31.12.2014
7. Amortisation, depreciation and write-offs 5
a) Depreciation and amortisation -1,170 -1,168
c) Operating expenses from revaluation of current assets -31 -22
Total write-downs -1,201 -1,190
8. Other operating expenses 6 -34,474 -28,617
Total expenses -45,908 -39,220
Operating profit (loss) -5,477 -3,179
9. Financial revenue from shares and interests 7
b) Shares and interests in associates 2,999 3,046
c) Financial revenue from other shares and interests 45,046 57,450
d) Financial revenue from other investments 11,375 11,456
Total financial revenue from shares and interests 59,420 71,952
10. Financial revenue from loans 7
b) Financial revenue from loans to others 1,922 2,280
Total financial revenue from loans 1,922 2,280
11. Financial revenue from operating receivables 7
b) Financial revenue from operating receivables due from others 6,954 0
Total financial revenue 6,954 0
Total financial revenue 68,296 74,232
12. Financial expenses due to write-off and impairment of financial assets
8
b) Financial expenses due to impairment and write-off of other investments
-9,297 -5,513
b) Financial expenses due to impairment and write-off of associated companies
-1,569 0
Total financial expenses due to impairment and write-off of financial assets
-10,866 -5,513
13. Financial expenses for financial liabilities 8
d) Financial expenses for other financial liabilities -19,001 0
Total financial expenses for financial liabilities -19,001 0
82
Item Notes 1.1. − 31.12.2015
in EUR 000
1.1. − 31.12.2014
Total financial expenses -29,867 -5,513
Profit (loss) from ordinary activity 32,952 65,540
15. Other revenue 9 26 51
16. Other expenses 10 -4 -3
Total profit (loss) from continued operations 32,974 65,588
17. Income tax 11 0 -2,804
18. Deferred tax 12 -3,623 10,273
19. Net profit/loss from continued operations for the period 29,351 73,057
Discontinued operations
20. Profit or loss from discontinued operations 13.1 0 403
21. Net profit or loss for the period 13 29,351 73,460
a) Net profit or loss of the majority shareholder for the period 29,351 72,751
b) Net profit or loss of the minority shareholder for the period 0 709
Disclosuresandnotesonpages90to149areaconstituentpartoffinancialstatements.
16.2 ConsolIDaTeDsTaTeMenTofoTHeRCoMPReHensIVeInCoMefoRTHePeRIoDfRoM1JanUaRy2015To31DeCeMbeR2015
01/01 - 31/12/2015
in EUR 000
01/01 - 31/12/2014
19. Net profit or loss for the period 29,351 73,460
Net profit or loss of the majority shareholder for the period 29,351 72,751
Net profit or loss of the minority shareholder for the period 0 709
21. Gains (losses) on revaluation of AFS financial assets -17,284 76,971
83
01/01 - 31/12/2015
in EUR 000
01/01 - 31/12/2014
Gains (losses) on revaluation of AFS financial assets -17,284 76,971
23. Other comprehensive income 81 0
24. Total comprehensive income for the period 12,148 150,431
Total comprehensive income of the majority shareholders for the period 12,148 149,722
Total comprehensive income of the minority shareholders for the period 0 709
Disclosuresandnotesonpages90to149areaconstituentpartoffinancialstatements.
16.3 ConsolIDaTeDsTaTeMenToffInanCIalPosITIonasaT31DeCeMbeR2015
Item Notes 31. 12. 2015
in EUR 000
31. 12. 2014
ASSETS
A. Non-current assets 14
I. Intangible assets and long-term deferred costs and accrued revenues
5. Other long-term deferred costs and accrued revenues 645 464
Total intangible assets 645 464
II. Property, plant and equipment 15
2. Buildings 6,862 7,180
4. Other plant and equipment 223 275
Total property, plant and equipment 7,085 7,455
III. Investment property 16 14,438 14,842
IV. Long-term financial assets
1. Long-term financial assets, except loans
b. Shares and interests in associated companies 17 34,374 21,334
c. Other shares and interests 19 675,026 599,281
d. Other long-term financial assets 19 221,395 198,593
Total long-term financial assets, except loans 930,795 819,208
2. Long-term loans 20
b. Long-term loans to others 59,359 9,380
Total long-term loans 59,359 9,380
Total long-term financial assets 990,154 828,588
84
Item Notes 31. 12. 2015
in EUR 000
31. 12. 2014
V. Long-term operating receivables 21
3. Long-term operating receivables due from others 103 53
Total long-term operating receivables 103 53
VI. Deferred tax assets 13,768 6,578
Total fixed assets 1,026,193 857,980
B. Current assets
I. Assets held for sale 18 6,574 197,739
III. Short-term financial assets
1. Short-term financial assets except loans 19
d. Other short-term financial assets 39,104 46,262
Total short-term financial assets, except loans 39,104 46,262
2. Short-term loans 20
b. Short-term loans to others 61,180 107,432
Total short-term loans 61,180 107,432
Total short-term financial assets 100,284 153,694
IV. Short-term operating receivables 21
2. Short-term operating trade receivables 1,227 1,660
3. Short-term operating receivables due from others 4,917 724
Total short-term operating receivables 6,144 2,384
V. Cash 22 44,146 37,040
Total current assets 157,148 390,857
C. Short-term deferred costs and accrued revenues 695 245
Total assets 1,184,036 1,249,082
EQUITY AND LIABILITIES
A. Equity
I. Called-up capital 23 364,810 364,810
II. Capital surplus 24 216,413 215,953
III. Revenue reserves 25 0 0
IV. Revaluation surplus 331,867 350,916
V. Retained earnings 62,054 -9,447
85
Item Notes 31. 12. 2015
in EUR 000
31. 12. 2014
VI. Net profit/loss for the year 29,351 72,751
Total majority interest 1,004,495 994,983
VII. MINORITY INTEREST 0 2,934
Total capital 1,004,495 997,917
B. Provisions and long-term accrued costs and deferred revenues 29
I. Provisions for pensions and similar obligations 324 315
II. Other provisions 157,959 137,920
Total provisions and accrued costs and deferred revenues 158,283 138,235
I. Long-term financial liabilities 26 0 0
II. Long-term operating liabilities 27
4. Long-term operating liabilities from advances 12 6
5. Other long-term operating liabilities 36 12
Total long-term operating liabilities 48 18
III. Deferred tax liabilities 16,681 9,918
Total long-term liabilities 16,729 9,936
D. Short-term liabilities
I. Liabilities included in disposal groups 28 0 92,784
II. Short-term financial liabilities 26 0 0
III. Short-term operating liabilities 27
2. Short-term operating trade payables 3,412 6,169
4. Short-term operating liabilities from advances 0 6
5. Short-term liabilities to the State 131 2,792
6. Other short-term operating liabilities 562 520
Total short-term operating liabilities 4,105 9,487
Total short-term liabilities 4,105 102,271
D. Short-term accrued costs and deferred revenues 424 723
Total equity and liabilities 1,184,036 1,249,082
Disclosuresandnotesonpages90to149areaconstituentpartoffinancialstatements.
86
16.4 ConsolIDaTeDCasHfloWsTaTeMenTfoRTHePeRIoDfRoM1JanUaRy2015To31DeCeMbeR2015
01/01 - 31/12/2015
in EUR 000
01/01 - 31/12/2014
A. Cash flows from operating activities
a) Net profit or loss and adjustments
Profit or loss before tax 32,974 65,991
Income tax and other taxes not included in operating expenses 0 -2,804
Adjustments for amortisation and depreciation 1,170 1,179
Adjustments for revaluation operating expenses 0 2,999
Adjustments for financial revenue from financing -45,776 -21,309
Adjustments for financial expenses from financing 29,867 11,404
Total cash flow derived from the income statement items 18,235 57,460
b) Change in net current assets − operating items in the balance sheet
Opening less closing operating receivables -3,810 1,135
Opening less closing deferred costs and accrued revenues -450 -5
Opening less closing deferred tax assets -7,190 28,236
Opening less closing assets (disposal groups) held for sale 0 -13,429
Closing less opening operating liabilities -5,382 4,780
Closing less opening accrued costs and deferred revenues, and provisions
19,749 10,301
Closing less opening deferred tax liabilities 6,763 -25,462
Total items of net current assets − operating items in the balance sheet 9,680 5,556
c) Net cash from (used in) operating activities 27,915 63,016
B. Cash flows from investing activities
a) Cash receipts from investing activities
Interest and dividends received from investing activities 39,161 41,317
Cash receipts from disposal of long-term financial assets 54,842 44,071
Cash receipts from disposal of short-term financial assets 53,410 0
Total cash receipts from investing activities 147,413 85,388
b) Cash disbursements from investing activities
Cash disbursements to acquire intangible assets -252 -156
Cash disbursements to acquire property, plant and equipment -43 -179
Cash disbursements to acquire investment property -101 -70
Cash disbursements to acquire long-term financial assets -149,286 -46,742
Cash disbursements to acquire short-term financial assets 0 -72,206
87
01/01 - 31/12/2015
in EUR 000
01/01 - 31/12/2014
Total cash disbursements from investing activities -149,682 -119,353
c) Net cash from (used in) investing activities -2,269 -33,965
C. Cash flows from financing activities
a) Cash receipts from financing activities
Receipts from paid up capital 460 86
Total cash receipts from financing activities 460 86
b) Cash disbursements from financing activities
Cash repayments of long-term financial liabilities -19,000 0
Total cash disbursements from financing activities -19,000 0
c) Net cash from (used in) financing activities -18,540 86
D. Closing balance of cash
a) Net cash for the period 7,106 29,137
b) Opening balance of cash 37,040 7,903
c) Total closing balance of cash 44,146 37,040
Disclosuresandnotesonpages90to149areaconstituentpartoffinancialstatements.
16.5 ConsolIDaTeDsTaTeMenTofCHanGesIneQUITyfoRTHePeRIoDfRoM1JanUaRy2015To31DeCeMbeR2015
Share capital
Capital surplus
Revalu-ation
surplusRetained earnings
Net profit or loss for
the yearMajority interest
Minority interest
in EUR 000
Total
A. 1. As at 31 Dec. 2014 364,810 215,953 350,916 -9,447 72,751 994,983 2,934 997,917
A. 2. As at 1 Jan. 2015 364,810 215,953 350,916 -9,447 72,751 994,983 2,934 997,917
B. 1. Changes in equity − transactions with owners
0 460 -41 -3,055 0 -2,636 -2,934 -5,570
d) Additional payments of capital
0 460 0 0 0 460 0 460
j) Other changes in equity 0 0 -41 -3,055 -3,096 -2,934 -6,030
B. 2. Total comprehensive income for the period
0 0 -17,203 0 29,351 12,148 0 12,148
a) Net profit or loss for the period
0 0 0 0 29,351 29,351 0 29,351
88
Share capital
Capital surplus
Revalu-ation
surplusRetained earnings
Net profit or loss for
the yearMajority interest
Minority interest
in EUR 000
Total
e) Gains (losses) on revaluation of financial assets
0 0 -16,975 0 0 -16,975 0 -16,975
f) Gains (losses) on revaluation of financial assets − associated companies
0 0 -309 0 0 -309 0 -309
g) Other components of comprehensive income for the period
0 0 81 0 0 81 0 81
B. 3. Movements in equity 0 0 -1,805 74,556 -72,751 0 0 0
a) Allocation of the remaining net profit for the comparative period to other equity components
0 0 -1,805 74,556 -72,751 0 0 0
C. Closing balance as at 31 Dec. 2015
364,810 216,413 331,867 62,054 29,351 1,004,495 0 1,004,495
Disclosuresandnotesonpages90to149areaconstituentpartoffinancialstatements.
16.6 ConsolIDaTeDsTaTeMenTofCHanGesIneQUITyfoRTHe
PeRIoDfRoM1JanUaRy2014To31DeCeMbeR2014
Share capital
Capital surplus
Revalu-ation
surplusRetained earnings
Net profit or loss for
the yearMajority interest
Minority interest
in EUR 000
Total
A. 1. As at 31 Dec. 2013 364,810 215,867 277,932 4,155 -17,589 845,175 11,348 856,523
A. 2. As at 1 Jan. 2014 364,810 215,867 277,932 4,155 -17,589 845,175 11,348 856,523
B. 1. Changes in equity − transactions with owners
0 86 0 0 0 86 -9,123 -9,037
d) Additional payments of capital
0 86 0 0 0 86 0 86
j) Other changes in equity 0 0 0 0 0 0 -9,123 -9,123
B. 2. Total comprehensive income for the period
0 0 76,971 0 72,751 149,722 709 150,431
a) Net profit or loss for the period
0 0 0 0 72,751 72,751 709 73,460
e) Gains (losses) on revalu-ation of financial assets
0 0 77,440 0 0 77,440 0 77,440
f) Gains (losses) on revalu-ation of financial assets − associated companies
0 0 -469 0 0 -469 0 -469
B. 3. Movements in equity 0 0 -3,987 -13,602 17,589 0 0 0
89
Share capital
Capital surplus
Revalu-ation
surplusRetained earnings
Net profit or loss for
the yearMajority interest
Minority interest
in EUR 000
Total
a) Allocation of the remaining net profit for the comparative period to other equity components
0 0 -3,987 -13,602 17,589 0 0 0
C. Closing balance as at 31 Dec. 2014
364,810 215,953 350,916 -9,447 72,751 994,983 2,934 997,917
Disclosuresandnotesonpages90to149areaconstituentpartoffinancialstatements.
90 Disclosures and notes
17.1 GeneRalDIsClosURes
Parentcompanyprofile
KapitalskadruæbaisapubliclimitedcompanywithitsregisteredofficeatDunajskacesta
119,ljubljana,slovenia.ThesoleshareholderofKapitalskadruæbaistheRepublicofslove-
nia.ThesharecapitaloftheCompanytotalseUR364,809,523.15andisdividedinto874,235
registeredno-parvalueordinaryshares.eachsharehasthesameinterestandtheattributed
amountinthesharecapital.Therightsofthesoleshareholder,i.e.theRepublicofslovenia,
areexercisedbytheGovernmentoftheRepublicofslovenia.
TheactivitiesofKapitalskadruæbaaredefinedbylawandbytheCompany’sarticlesofasso-
ciation.onthebasisofthestandardClassificationofactivities,accordingtotheCompany’s
articlesofassociationandentryintheCompaniesRegister,Kapitalskadruæbaalsoperforms
otheractivitiesrelatedtoassetmanagementandservicesrelatedtosupporttoassetman-
agement:otherfinancialintermediation,pensionfunding,activitiesancillarytopensionfund-
ing,tradeinownrealestate,leaseofownrealestate,softwaresupplyandconsultancy,data
processing,networkdataservices,othercomputerrelatedactivities,accountingandbook-
keepingservices,taxconsultancy,marketresearchandpublicopinionpolling,businessand
othermanagementconsultancy,activitiesofholdingcompanies,publishingofjournalsand
periodicals,andothereducationalservices.
AmendmentstotheArticlesofAssociationandtheRulesonAppointingtheManagementBoardandtheSupervisoryBoardofthecontrollingcompany
Thearticlesofassociationanditsamendmentsandsupplementsareadoptedbytheannual
GeneralMeetingofKapitalskadruæbaontheproposaloftheManagementboardandthe
supervisoryboard.
MembersoftheManagementboardareappointedbythesupervisoryboardonthebasisof
apublicjobannouncement.onememberoftheManagementboardisappointedPresident
oftheManagementboard.ThetermofofficeoftheManagementboardmembersisfour
yearswiththepossibilityofre-appointment.TheManagementboardoranyofitsmembers
maybedismissedearlyonlyduetothereasonsreferredtoinarticle268(2)oftheZGD-1.The
91
breachofthearticlesofassociationofKapitalskadruæbarepresentingaseveredereliction
ofdutiesmayconstitutecausefordismissal.
TheManagementboardofKapitalskadruæbaisnotauthorisedtoissueorpurchasetreasury
shares.
ThesupervisoryboardofKapitalskadruæbaisappointedbytheCompany’sannualGeneral
Meeting.Incompliancewitharticle51(6)oftheZsDH-1,thesupervisoryboardiscomposed
ofsixmembers.Threemembersofthesupervisoryboardareappointedontheproposalof
slovenskidræavniholding,d.d.6(sloveniansovereignHolding),twomembersontheproposal
ofthepensioners’governmentalorganisationsandonememberontheproposaloftradeunion
associationsorconfederationswhicharerepresentativeofthecountry.Ifstakeholdersdonot
formulateaproposalfortheappointmentofsupervisoryboardmembersasdefinedbelow,
themissingmembersofthesupervisoryboardareappointedatthediscretionoftheannual
GeneralMeeting.Thecandidatesfromamongtherepresentativesofthesloveniansovereign
HoldingareproposedbytheManagementboardofthesloveniansovereignHolding,which
informsthesupervisoryboardabouttheselection.Thecandidatesfromamongtherepre-
sentativesofthepensionersareproposedbythepensioners’governmentalorganisationsand
associations,whichinformthesupervisoryboardabouttheselection.Thecandidatesfrom
amongtherepresentativesofthetradeunionsareelectedbytherepresentatives(electors)of
therepresentativegovernment-leveltradeunionassociationsorconfederations,whichinform
thesupervisoryboardabouttheselection.anyrepresentativeassociationorconfederationhas
thenumberofrepresentativesequaltothenumberoftherepresentativetradeunionsitcom-
prises.Inadditiontotherepresentativesreferredtointheprevioussentence,theassociation
orconfederationelectsanotherrepresentativeforeverytenthousandmembers.Thetermof
officeofthesupervisoryboardmembersisfouryearswiththepossibilityofre-appointment.
Informationaboutsubsidiaries
subsidiariesofKapitalskadruæbaarepresentedinthetablebelow.
in EUR 000
Subsidiary Country Share in equity
Equity of the company as at
31 Dec. 2015Net profit
for 2015
Modra zavarovalnica, d. d. Slovenia 100.00% 201,324 4,725
Steklarska nova Rogaπka Slatina, d. o. o. − in bankruptcy
Slovenia 100.00% negative n.a.
astheparentcompany,KapitalskadruæbaconsolidatesModrazavarovalnica.
KapitalskadruæbadoesnotconsolidatethesubsidiarysteklarskanovaRogaπkaslatina,d.o.
o.inconsolidatedfinancialstatements,sincetheintegrationofsubsidiary’sfinancialstate-
mentsinconsolidatedstatementsisnotrelevantforatrueandfairviewofthefinancialstate-
mentsoftheKapitalskadruæbaGroupasawhole.
Dataonconsolidation
ConsolidationoffinancialdataiscarriedoutforKapitalskadruæba,asthehighestlevel.The
consolidatedannualReportoftheKapitalskadruæbaGroupisavailableathttp://www.kapi-
talska-druzba.si/o_kapitalski_druzbi/letna_porocila.
6 Thecurrentthreemembersofthesupervisoryboardwereappointedontheproposalofslovenskaodπkodninskadruæba,d.d.accord-ingtothepreviouslyapplicableZsDH.
92
Informationabouttreasuryshares
TheGrouphasnotreasuryshares.
Informationaboutemployees
attheendof2015,theKapitalskadruæbaGrouphad115employees,ofwhom59inKapital-
skadruæbaand56inModrazavarovalnica.
Table29: Number of employees of the Kapitalska druæba Group
As at Dec. 2015
The Kapitalska druæba Group 115
17.2 aCCoUnTInGPolICIes
Basisofpreparation
Datainfinancialstatementsarebasedonbook-keepingdocumentsandbooksofaccount
keptinlinewiththeInternationalfinancialReportingstandards.financialstatementshave
beencompiledbytakingintoaccountthefundamentalaccountingassumptions:going
concern,consistencyandaccrualbasis.accountingpolicieshavebeenformulatedbytak-
ingintoaccountqualitativecharacteristics:understandability,relevance,reliabilityand
comparability.
Significantaccountingestimatesandjudgements
Thepreparationoffinancialstatementsrequiresthemanagementtomakecertainestimates
andassumptionsthataffectthereportedamountsofassetsandliabilitiesoftheCompany
aswellastheamountsofrevenuesandexpenses.
Theadequacyofusedassumptionsandestimatesischeckedperiodically.
Relevantestimatesrefertotheimpairmentofassets,theclassificationoffinancialinstruments
andthedistinctionbetweenthefinancialinstrumentsheldtomaturityandavailableforsale,
andtheestablishmentofprovisions.
onthedateofthestatementoffinancialpositionthemanagerassesseswhetherthere
isobjectiveevidenceofimpairmentofafinancialassetoragroupoffinancialassets.If
suchevidenceexists,theassetisimpaired.Impairmentlossisrecognisedintheprofit
orloss.
Theestimatesofassetvaluemainlydependonthecurrentandexpectedmacroeconomic
situationintheeUandotherrelevantmarketswheretheCompanyoperatesandthataffect
thefuturecashflowprojection,theinterestratesinfluencingtherequiredreturnbothon
debtandequitycapital,andthestockprices,whichalsoinfluencetheestimatedvalueofthe
financialinstruments.
Theassessmentsandestimatesarealsoappliedindeterminingthe(useful)lifeoffixedassets
andinvestmentproperty,thebasisforimpairmentoffinancialassetsexposedtocreditrisk
andthesettingoffairvalueoflong-termprovisions.
93
Statementofcompliance
TheconsolidatedfinancialstatementsofKapitalskadruæba,d.d.,andallitssubsidiaries
(hereinafter:theGroup)havebeenpreparedinaccordancewiththeInternationalfinancial
Reportingstandards(IfRs)adoptedbytheInternationalaccountingstandardsboard(Iasb)
aswellastheInterpretationsadoptedbytheInternationalfinancialReportingInterpretations
Committee(IfRIC)andtheeuropeanUnion(eU).
Initsfinancialstatements,theGroupappliedallIfRsandIfRICrequiredin2015.Itdidnot
applyanystandardorinterpretationbeforeitsapplicationbecameobligatoryin2015.
Amendmentstostandardsandinterpretations
Standardsandinterpretationseffectiveforthecurrentperiod
Inthecurrentaccountingperiod,thefollowingamendmentstotheexistingstandardsand
newinterpretationsissuedbytheInternationalaccountingstandardsboard(Iasb)and
adoptedbytheeUapply:
�� amendmentstovariousstandards−‘ImprovementstoIfRss(2011-2013)’,resultingfromthe
annualprojectforimprovementofIfRss(IfRs3,IfRs13andIas40)primarilywithaviewto
removeinconsistenciesandtoclarifywording,adoptedbytheeUon18December2014(the
amendmentswillneedtobeappliedforannualperiodsbeginningonorafter1January2015),
�� IfRIC21‘levies’,adoptedbytheeUon13June2014(effectiveforannualperiodsstart-
ingonorafter17June2014).
Theadoptionoftheseamendmentstotheexistingstandardsandinterpretationshasnotled
tosignificantchangesintheCompany’sfinancialstatements.
StandardsandinterpretationsissuedbyIASBandadoptedbytheEUbutnotyeteffective
onthedateofapprovalofthesefinancialstatements,thefollowingamendmentstotheexist-
ingstandardsissuedbyIfRICandadoptedbytheeUwereinissuebutnotyeteffective:
�� amendmentstoIfRs11‘Jointarrangements’−accountingforacquisitionsofInterestsin
Jointoperations,whichtheeUadoptedon24november2015(effectiveforannualperi-
odsbeginningonorafter1January2016),
�� amendmentstoIas1‘Impairmentofassets’−DisclosureInitiative,adoptedbytheeU
on18December2015(effectiveforannualperiodsbeginningonorafter1January2016),
�� amendmentstoIas16‘Property,Plantandequipment’andIas38‘Intangibleassets’−
ClarificationofacceptableMethodsofDepreciationandamortisation,adoptedbytheeU
on2December2015(effectiveforannualperiodsbeginningonorafter1January2016),
�� amendmentstoIas16‘Property,Plantandequipment’andIas41‘agriculture’-agricul-
ture:bearerPlants−adoptedbytheeUon23november2015(effectiveforannualperiods
beginningonorafter1January2016),
�� amendmentstoIas19‘employeebenefits’-DefinedbenefitPlans:employeeContribu-
tions,adoptedbytheeUon17December2014(effectiveforannualperiodsstartingon
orafter1february2015),
�� amendmentstoIas27‘separatefinancialstatements’−equityMethodinseparate
financialstatements,adoptedbytheeUon18December2015(effectiveforannualperi-
odsbeginningonorafter1January2016),
�� amendmentstovariousstandards−‘ImprovementstoIfRss(2010-2012)’,resultingfrom
theannualprojectforimprovementofIfRss(IfRs2,IfRs3,IfRs8,IfRs13,Ias16,Ias
24andIas38)primarilywithaviewtoremoveinconsistenciesandtoclarifywording
adoptedbytheeUon17December2014(theamendmentswillneedtobeappliedfor
annualperiodsbeginningonorafter1february2015),
94
�� amendmentstovariousstandards−‘ImprovementstoIfRss(2012-2014)’,resultingfrom
theannualprojectforimprovementofIfRss(IfRs5,IfRs7,Ias19andIas34)primarilywith
aviewtoremoveinconsistenciesandtoclarifywording,adoptedbytheeUon15Decem-
ber2015(theamendmentswillneedtobeappliedforannualperiodsbeginningonorafter
1January2016).
StandardsandinterpretationsissuedbytheIASB,butnotyetadoptedbytheEU
atpresent,theIfRsasadoptedbytheeUdonotsignificantlydifferfromregulationsadopted
bytheInternationalaccountingstandardsboard(Iasb)exceptfromthefollowingnewstand-
ardsandamendmentstotheexistingstandards,whichwerenotendorsedforuseintheeU
onthedaythesefinancialstatementswerepublished(theeffectivedatesindicatedbelow
applyforentireIfRs):
�� IfRs9‘financialInstruments’(effectiveforannualperiodsstartingonorafter1January
2018),
�� IfRs14‘RegulatoryDeferralaccounts’(effectiveforannualperiodsstartingonorafter1
January2016)−europeanCommissionconcludednottostarttheprocedureforendorse-
mentofthisinterimstandardandtowaitforitsfinalversiontobeissued,
�� IfRs15‘RevenuefromContractswithCustomers’andsubsequentamendments(effective
forannualperiodsstartingonorafter1January2018),
�� IfRs16‘leases’(effectiveforannualperiodsstartingonorafter1January2019),
�� amendmentstoIfRs10‘Consolidatedfinancialstatements’,IfRs12‘DisclosureofInter-
estsinotherentities’andIas28‘InvestmentsinassociatesandJointVentures’−Invest-
mententities:applyingtheConsolidationexception(effectiveforannualperiodsbeginning
onorafter1January2016),
�� amendmentstoIfRs10‘Consolidatedfinancialstatements’andIas28‘Investments
inassociatesandJointVentures’−salesorcontributionsofassetsbetweenaninves-
toranditsassociate/jointventure,andfurtheramendments(thedateofentryintoforce
hasbeendeferredindefinitelyuntilthecompletionoftheresearchprojectrelatedto
equitymethod),
�� amendmentstoIas12‘IncomeTaxes’−RecognitionofDeferredTaxassetsforUnrealised
losses(effectiveforannualperiodsbeginningonorafter1January2017).
TheGroupanticipatesthattheadoptionofthesenewstandardsandamendmentstothe
existingstandardswillhavenomaterialimpactontheconsolidatedfinancialstatementsin
theperiodofinitialapplication.
atthesametime,hedgeaccountingregardingtheportfoliooffinancialassetsandliabilities,
whoseprincipleshavenotyetbeenadoptedbytheeU,isstillunregulated.
accordingtotheGroup’sestimates,applicationofhedgeaccountingfortheportfoliooffinan-
cialassetsorliabilitiespursuanttoIas39:‘financialInstruments:Recognitionandmeasure-
ment’wouldnotsignificantlyimpactthefinancialstatements,ifappliedasatthedateofthe
cashflowstatement.
Foreigncurrencytranslation
ThefinancialstatementsoftheGrouparepresentedintheeuro(eUR),whichisthefunctional
andreportingcurrencyoftheCompany.assetsandliabilitiesoriginallyexpressedinforeign
currenciesareretranslatedintothedomesticcurrencyatthereferenceexchangerateofthe
eCb.foreigncurrencytransactionsareinitiallyrecognisedinthefunctionalcurrency,trans-
latedattheexchangerateapplicableonthetransactiondate.Monetaryassetsandliabilities
inforeigncurrencyaretranslatedattheexchangerateofthefunctionalcurrencyprevailing
onthedateofthestatementoffinancialposition.anydifferencesarisingonthetranslation
offoreigncurrenciesarerecognisedinprofitorloss.non-monetaryassetsandliabilities,rec-
95
ognisedathistoricalcostinforeigncurrency,aretranslatedattheexchangerateapplicable
onthedayofthetransaction.non-monetaryassetsandliabilitiesmeasuredatfairvaluein
foreigncurrencyaretranslatedattheexchangerateeffectiveonthedaywhenthefairvalue
wasestablished.
Basicpolicies
Thefinancialstatementshavebeenpreparedonagoingconcernbasis.
Thefinancialstatementshavebeencompiledonhistoricalcostbasis,exceptforfinancial
assetsatfairvaluethroughprofitorlossandavailable-for-salefinancialassets,measuredat
fairvalue.Theitemsintheseparatefinancialstatementsarepresentedintheeuro,rounded
tothenearestthousand(000eUR),exceptwherespecificallystatedotherwise.
Basisofconsolidation
TheconsolidatedfinancialstatementscompriseehfinancialstatementsofKapitalskadruæba
anditssubsidiariesasat31Decemberofayear.Thefinancialstatementsofthesubsidiaries
havebeenpreparedforthesamefinancialyearasthoseoftheparentcompanyandbyapply-
ingtheuniformaccountingpolicies.Intheeventofanyinconsistencyofaccountingpolicies,
suitableadjustmentshavebeenmadeinconsolidatedfinancialstatements.
allintra-groupbalancesandtransactions,includinganyunrealisedincomearisingfromintra-
groupbalancesandtransactions,areeliminatedinfull.
allsubsidiariesbecomesubjecttoconsolidationwhencontrolistransferredtotheGroup
andtheconsolidationisabandonedwhencontrolofasubsidiaryistransferredoutsidethe
Group.IftheGrouplosescontrolofasubsidiaryduringtheyear,theconsolidatedfinancial
statementsincludetheresultsofsuchsubsidiaryuptothelastdayonwhichthecontrolover
itstillexisted.
Intangibleassets
Intangibleassets,acquiredindividually,arerecognisedatcost.afterinitialrecognitionthe
costmodelisapplied.Theusefullifeofanitemofintangibleassetsislimited.Theamortisa-
tionofintangibleassetsisrecognisedinprofitorloss.Intangibleassetsgeneratedwithinthe
Group,otherthandevelopmentcosts,arenotcapitalised.Costsrepresentexpensesofthe
periodinwhichtheyareincurred.
Thecarryingamountofanintangibleassetisreviewedannuallyforimpairment,iftheasset
hasnotbeenputtouse,ormorefrequentlywhenthereareindicationsofimpairment.Dis-
closedintangibleassetsareimpairedwhentheircarryingamountexceedstheirnetrecov-
erableamount.Intheeventofimpairment,thecarryingamountoftheassetisdecreased
toitsnetrecoverableamountandatthesametimeanexpensearisingfromimpairmentis
recogniseddirectlyinprofitorloss.
TheGroupusesthestraightlineamortisationmethodforintangibleassetsaccordingtothe
estimatedusefullife:
Asset Amortisation rate in %
Software 10
Software applications obtained after 1 Jan. 2008 20.00−33.33
96
Theamortisationofintangibleassetsiscalculatedonthestraight-linebasisovertheestimated
usefullivesoftheassets,whichis10years.Theestimatedusefullifeofsoftwareapplications
acquiredafter1January2008is3to5years.
TheGroupreviewsthevalueofitsassetsinordertoestablishtheexistenceofandthe
amountofimpairment.Ifthecarryingamountofanassetexceedsitsestimatedrecover-
ableamount,i.e.thevalueinuse,itiswrittendowntotherecoverableamountagainst
operatingexpenses.
Profitandlossarisingfromretirementordisposalofanintangibleassetisdeterminedasthe
differencebetweenthesalevalueondisposalandthebookvalue.Thedifferenceisrecog-
nisedasincomeorexpenseintheincomestatement,whentheunderlyingintangibleasset
isretiredordisposed.
Property,plantandequipment
buildingsandequipmentarecarriedatcost,lessdepreciationandimpairmentlosses.
Depreciationisaccountedforunderthestraight-linebasisovertheestimatedusefullife
oftheassets:
Asset Depreciation rate in %
Buildings 3.00-3.33
Equipment 16.67−33.33
Building parts 6.00
everyyearanimpairmenttestiscarriedoutonproperty,plantandequipment.Impairment
ismadeiftheasset’sestimatedrecoverableamountislessthanitscarryingamount.The
Groupreducesthecarryingamountofsuchassetstotheirrecoverableamount.Thedecrease
isdisclosedasimpairmentlossdirectlyintheincomestatement.
buildingsorequipmentarederecognisedwhentherelevantassetissoldorwhentheGroup
nolongerexpectseconomicbenefitsfromtheasset’scontinuinguse.Profitandlossarising
fromderecognitionoftheassetisincludedintheincomestatementintheyearwhenthe
assetiswrittenoffthebooks.
Theresidualvalueoftheassets,theestimatedusefullifeofassetsandthedepreciation/amor-
tisationmethodarerevisedand,ifnecessary,changeduponthecompilationoftheannual
financialstatements.
anitemofproperty,plantandequipmentwhoseindividualvalueaspersupplier’sinvoice
doesnotexceedeUR500,maybecarriedasagroupoflowvalueassets.lowvalueassets
whoseindividualcostdoesnotexceedeUR500maybeclassifiedasmaterials.
MaintenanceCostsandIncreaseinFixedAssetsValue
Maintenancecostsarethecostsarisingfromtheconclusionandexecutionoftransactions
requiredtomaintaintheconditionsallowingtheuseandtheachievementoftheprimary
purposeofthebuilding.Maintenancecomprisesallworksaccordingtotheregulationson
buildingoffacilitiesandfunctioningoffireprotectionsystemsandotherprotectionandres-
cuemeasures.
97
CriteriafortheDeferralofMaintenanceCostsandtheIncreaseinFixedAssetsValue
Maintenancecostsincludethecostsofmaintainingafixedassetsusefulduringitsuseful
life.Theincreaseinfixedassetcomprisescostsrequiredtoincreasethefuturebenefitsofa
fixedassetincomparisontopastbenefits.
Investmentproperty
Investmentpropertythatqualifiesforrecognitionisinitiallymeasuredatcost.Thecostof
investmentpropertycomprisesthepurchasepriceandallcostsdirectlyattributabletothe
acquisition.suchcostsincludecostsoflegalservices,realestatetransfertax,andother
transactioncosts.
TheGrouprecognisesinvestmentpropertywhenitisprobablethatthefutureeconomic
benefitsthatareassociatedwiththeinvestmentpropertywillflowtotheentityandthecost
oftheinvestmentpropertycanbemeasuredreliably.Investmentpropertyincludesthereal
propertythatisnotusedbytheGroupforitsprincipalactivity.
Investmentpropertyismeasuredatcost,reducedbydepreciationandimpairmentlosses.
Thedepreciationrateofinvestmentpropertyisbetween3.00and3.33percentannuallyand
theestimatedusefullifeis33.33or30years.Thedepreciationrateofpartsofinvestment
propertyis6.00percentannuallyandtheestimatedusefullifeis16.67years.
everyyearanimpairmenttestiscarriedoutoninvestmentproperty.Impairmentismadeif
theinvestmentproperty’sestimatedrecoverableamountislessthanitscarryingamount.The
Groupreducesthecarryingamountofsuchinvestmentpropertytoitsrecoverableamount.
Thedecreaseisdisclosedasimpairmentlossdirectlyintheincomestatement.
Gainsorlossesarisingoneliminationordisposalofinvestmentproperlyaredeterminedas
thedifferencebetweenthenetreturnondisposalandthecarryingamount,andarerecog-
nisedintheprofitorloss.
Financialassets
ClassificationofFinancialAssets
TheGroupclassifiesfinancialassetsinthefollowingcategories:
�� financialassetsmeasuredatfairvaluethroughprofitorloss;
�� held-to-maturityfinancialinvestments;
�� available-for-salefinancialassets;
�� loans.
Theclassificationdependsonthepurposeforwhichaninvestmentwasacquired.
anassetisclassifiedinthegroupoffinancialassetsatfairvaluethroughprofitorlossif:
a. atleastoneofthefollowingcriteriaisfulfilled:
-afinancialassethasbeenacquiredorincurredprincipallyforthepurposeofsellingor
repurchasingitinthenearterm;or
-afinancialassetispartofaportfolioofidentifiedfinancialinstrumentsthataremanaged
togetherand
-forwhichthereisevidenceofarecentactualpatternofshort-termprofit-taking;
b.itisaderivative(exceptforaderivativethatisadesignatedandeffectivehedginginstru-
ment);
c. itisanyfinancialassetdesignatedassuchbytheentity,ifactivemarketforsuchasset
existsorifitsvaluecanbemeasuredreliably.
98
anassetisclassifiedinthegroupofheld-to-maturityfinancialassetsifthefollowingcriteria
arefulfilled:
a. afinancialassetisanon-derivativefinancialassetwithfixedordeterminablepayments;
b. ithasdeterminablematurity;
c.whichtheCompanyhasthepositiveintentandabilitytoholdtomaturity.
Thegroupofavailable-for-salefinancialassetscomprisesthefinancialassetsnotclassified
inanyothergroup.
basedontheprescribedclassificationcriteriatheshareslistedonthestockexchangemay
beclassifiedintothegroupofassetsmeasuredatfairvaluethroughprofitorlossorinthe
groupofavailable-for-salefinancialassets.Inadditiontothesetwogroups,bondsmaybe
alsoclassifiedintothegroupofassetsheldtomaturity.MostofassetsoftheGroupareclas-
sifiedunderavailable-for-salefinancialassets.
long-termandshort-termfinancialassetsaredisclosedseparatelyinthestatementoffinan-
cialposition.long-termfinancialassetsareinvestmentsthattheGroupintendstoholdfora
periodlongerthanoneyearandwhicharenotheldfortrading.
Recognitionoffinancialassets
Initially,alltheGroup’sinvestmentsexceptfinancialassetsclassifiedatfairvaluethrough
profitorlossarerecognisedatfairvalue,includingthedirectlyrelatedcostsofacquisition.
Investmentsclassifiedatfairvaluethroughprofitorlossarerecognisedatfairvalue(direct
costsofacquisitionarenotincludedinthecost).
1. Financial assets measured at fair value through profit or loss
financialassetsatfairvaluethroughprofitorlossaremeasuredatfairvalue.Gainsand
lossesonassetsdesignatedatfairvaluethroughprofitorlossarerecogniseddirectlyin
theprofitorloss.
Thefairvalueofassetsactivelytradedonregulatedmarketsisdeterminedatthequoted
closingpriceonthestockexchangeonthelasttradingdayoftheperiod.Thefairvalueof
assetswhosemarketpriceisnotquotedonfinancialmarketsisdeterminedonthebasis
ofavaluationtechnique.Valuationtechniquesincludeusingrecentarm’slengthmarket
transactionsbetweenknowledgeable,willingparties,ifavailable,referencetothecurrent
fairvalueofanotherinstrumentthatissubstantiallythesame,andthediscountedcash
flowanalysis.
acquisitionandsaleofassetsclassifiedatfairvaluethroughprofitorlossarerecognisedon
thetradingdayi.e.onthedayofcommitmenttobuyortosellafinancialasset.
2. Financial assets held to maturity
financialassetswithfixedordeterminablepaymentsandmaturity,otherthanderivative
financialinstruments,arerecognisedasheld-to-maturityfinancialassetsiftheGrouphasa
positiveintentionandtheabilitytoholdtheinvestmenttomaturity.Investmentsheldforan
indefiniteperiodoftimearenotclassifiedinthisgroup.
Investmentswhicharerecognisedasheld-to-maturityarecarriedatamortisedcostusingthe
effectiveinterestratemethod.Theamortisedcostiscalculatedbyallocationofthepremium
orthediscountonacquisitionovertheperioduntilthematurityoftheinvestment.Gainsand
lossesoninvestmentscarriedatamortisedcostarerecognisedintheprofitorloss(disposal,
impairmentoreffectsofthediscount/premiumamortisation).Investmentsdesignatedas
held-to-maturityarerecognisedonthesettlementdate.
99
3. Available-for-sale financial assets
afterinitialrecognitionallinvestmentsclassifiedbythecompanywithinavailable-for-sale
financialassetsarecarriedatfairvalueorpurchasecostiffairvaluecannotbedetermined
reliably.Gainsandlossesonavailable-for-salefinancialassetsarerecognisedinthestate-
mentofcomprehensiveincomeasthenetunrealisedcapitalgainsuntiltheinvestmentis
soldordisposedofinsomeothermanner.Ifaninvestmentisimpaired,theimpairmentis
recognisedinprofitorloss.
acquisitionandsaleofinvestmentsclassifiedasavailable-for-salefinancialassetsarerecog-
nisedonthetradingdatei.e.onthedayofcommitmenttobuyortosellanindividualfinan-
cialasset.
4. Loans
loansandreceivablesarefinancialassetswithfixedordeterminablepaymentsthatarenot
tradedonaregulatedmarket.TheyincludeloansandreceivablesacquiredbytheCompany
aswellasthosegrantedbytheCompany.loansandreceivablesaremeasuredatamortised
costusingtheeffectiveinterestratemethodandarerecognisedonthesettlementdate.
Financialassetsmeasuredatcost
assetsaremeasuredatcostifthefairvaluecannotbereliablymeasured,becausetherange
ofreasonablefairvalueestimatesissignificantandtheprobabilitiesofthevariousestimates
cannotbereasonablyassessed.
available-for-salefinancialassetsaremeasuredatstockprices.Ifastockpriceisnotavail-
ableforaparticularasset,thefairvalueisdeterminedusingthevaluationmodelstakinginto
accountsubjectivevariablesthatarenotpubliclyavailableonmarketsorbymakingvalue
estimatesofparticularassets.Thefollowingmethodsareappliedinmakingthevalueesti-
matesofparticularassets:income-basedvaluation,asset-basedvaluationandthecompari-
sonapproach,involvingacomparisonwiththecomparablelistedcompanies.
Investmentsinsubsidiariesandassociatedcompanies
aconsolidatedsubsidiaryisanentityinwhichthecontrollingentityholdsacontrollinginter-
estoracontrollinginfluenceassociatedwithotherreasons,andwhichisamemberofthe
groupforwhichtheconsolidatedfinancialstatementsareprepared.anassociateisacom-
panyinwhichtheparenthasasignificantinfluenceandwhichisneitherasubsidiarynora
jointventure.
Intheseparatefinancialstatements,investmentsintheequityofsubsidiariesaremeasured
atcost,lessanyimpairmentloss.
Intheseparatefinancialstatements,investmentsinassociatesaremeasuredatfairvalue
(marketvalue)oratcostiffairvaluecannotbedeterminedreliably,reducedbyimpairment
losses.Gainsandlossesontheseinvestmentsarerecognisedinequityasarevaluationsur-
plusfrominvestmentsuntiltheinvestmentissoldordisposedofinsomeothermanner.When
anassetisimpaired,theimpairmentisrecognisedintheprofitorloss.
TheCompanydisclosesassociatesandjointventuresaccordingtoIas28.Thereversalof
impairmentofassociatesandjointventuresisrecognisedasincome,butonlyuptothe
amountoftheinvestmentimpairedinthepast.
100
Financialassetvaluationmethods
Thefairvalueofcertainsharesisdeterminedusingthevaluationmodelstakingintoaccount
subjectivevariablesthatarenotpubliclyavailableonmarkets.Certaindataforvaluationare
obtainedformthebloombergsystemandotherfinancialsources,whereasinsomecases
animportantsourceisthedataanddocumentsaboutthepastandexpectedfutureperfor-
manceprovidedbycompanies.
sharevaluationsaremadeaccordingtotheincome-basedapproach,thediscountedfreecash
flowmethod,asset-basedapproach,theregularliquidationmethodandthemarketcompari-
sonvaluationmethod,involvingacomparisonwiththecomparablelistedcompanies.bond
valuationsweremadeaccordingtothemarketcomparisonvaluationmethod,involvinga
comparisonwiththecomparablelistedbonds.
Determinationoffairvalue
fairvalueassessmentoffinancialinvestmentsdependsonavailabilityofmarketdatabased
onwhichtheCompanycanassessfairvalue.Threelevelsareappliedinfairvaluemeas-
urement:
�� level1inputcomprisesquoted(unadjusted)pricesforidenticalassetsorliabilitiesinan
activemarketwhichareavailabletotheCompanyonthemeasurementdate;
ThisgroupincludestheassetsownedbyModrazavarovalnica,valuedbasedontheCbbT
priceinanactivemarketandvaluationonthebasisoftransactionpriceinanactivemarket.
TheassumptionofanactivemarketappliesiftheCbbTpricehasbeenquotedforatleast
halfofthetradingdaysinthepast30daysuntilvaluation.IfthetradingoroTCmarketis
active,thelastknownCbbTpriceisused,noolderthan15days,forfairvaluemeasure-
ment.IfthetradingoroTCmarketisnotactive,thelastknownCbbTpriceisused,no
olderthan90days,forfairvaluemeasurement.IfthelastknownCbbTpriceisolderthan
thelasttransactionpriceofthefinancialassetoriftheCbbTpriceisnotavailable,thelast
knowntransactionpriceisused,noolderthan90days,forfairvaluemeasurement,in
whichcasetheassumptionofanactivemarketappliesifthetransactionpriceisnotolder
than15days.Inothercases,thefairvalueofafinancialassetisdeterminedusingavalua-
tiontechnique.ThisgroupdoesnotincludetheassetsownedbyKapitalskadruæba,d.d.,
valuedbasedonthepricesadoptedfromthebloombergsystem.
�� level2inputincludesinputsotherthanthequotedpricesincludedinlevel1andwhich
areobservableeitherdirectlyorindirectlyforanassetorliability;
level2assetsincludetheassetsvaluedbasedoncomparablemarketdata(otherthan
quotedpricesofidenticalassets)obtainedindirectlyordirectlyforanidenticalorsimilar
asset;thebasisofvaluationistheyieldcurveofcomparablefinancialassetswithsimi-
larmaturityandcreditrisk.Inaddition,level2alsoincludestheinvestmentsownedby
Modrazavarovalnica,valuedbasedonthestockpriceonaninactivemarket,valuedbased
ontheCbbTpriceonaninactivemarketandthevaluationonthebasisoftransactionprice
onaninactivemarket.forstockmarkets,theassumptionofanactivemarketappliesifthe
averagedailytradinginthefinancialassetinthelast180daysuntilthefairvaluemeas-
urementexceededeUR0.5million,takingintoaccountthenumberoftradingdays.Ifthe
stockmarketisactive,thelastknownstockpriceisused,noolderthan15days,forfair
valuemeasurement.Ifthestockmarketisnotactive,thelastknownstockpriceisused,
noolderthan90days,forfairvaluemeasurement.Inothercases,thefairvalueofafinan-
cialassetisdeterminedusingavaluationtechnique.Thesecondgroupdoesnotinclude
theassetsownedbyKapitalskadruæba,d.d.,valuedbasedonthepricesadoptedfromthe
bloombergsystem.
�� level3inputincludesunobservableinputsforanassetorliability.
level3includestheassets,thefairvalueofwhichisdeterminedusingownvaluation
101
modelstakingintoaccountsubjectivevariablesthatarenotpubliclyavailableonmarkets.
Moreover,level3alsoincludesdebtinstrumentsownedbyModrazavarovalnica,valued
usingavaluationtechnique(takingintoaccountlevel3inputs),debtsecurities,theCbbT
priceofwhichisnotavailableonan(in)activemarketandwhosevalueisdeterminedusing
avaluationtechnique(takingintoaccountlevel3inputs)aswellasdebtinstrumentsval-
uedonthebasisoftheinputprovidedbythirdparties.Inadditiontoalltheseassets,level
3fairvalueincludesallassetsownedbyKapitalskadruæba,d.d.,wherefairvalueofdebt
financialinstrumentsisdeterminedusingthebloombergGenericprices(bGn)andthe
bloombergValuationservicesprices(bVal).Thismethodologyandassumptionsofprice
calculationarenotavailabletothepublic,soalltheseassetsownedbyKapitalskadruæba,
d.d.,areclassifiedintolevel3fairvaluehierarchy.
Thefairvaluevaluationoflevel3assetswasmadebyapplyingtheincome-basedapproach,
thediscountedfreecashflowmethod,andtheasset-basedapproachaccordingtotheregu-
larliquidationmethod.
Thefairvalueofcertainsharesisdeterminedusingthevaluationmodelstakingintoaccount
subjectivevariablesthatarenotpubliclyavailableonmarkets.Certaindataforvaluationare
obtainedformthebloombergsystemandotherfinancialsources,whereasinsomecases
animportantsourceisthedataanddocumentsaboutthepastandexpectedfutureperfor-
manceprovidedbycompanies.
TheentireIfRa13mustbeappliedinfairvaluemeasurementassessment,inadditiontothe
abovestatedlevels.
Impairmentoffinancialassets
TheGroupregularlyreviewstherequirementforimpairmentoffinancialassetsclassifiedas
availableforsale.Investmentswhosevaluehassignificantlydeclinedinthereportingperiod
and/orsuchadeclineisprolongedareimpaired.TheGroupestimatesthattheassumption
ismetofasignificantdeclineinthevalueofequityinvestmentswhosenegativerevaluation
inequity,inclusiveofexchangeratedifferences,reaches40%oftheircost.Inthiscasesuch
equityinvestmentsareimpairedinthetotalamountofthecumulativeunrealisednetlossand
exchangeratedifferences.Whentheamountofrevaluationduetoimpairmentandexchange
ratedifferencesrecognisedintheequityequalsbetween10%and39%,theCompanyconsid-
erstheneedforimpairmentbasedonthetimecomponentandtherelevanceofinvestments
intermsoftheportfoliosize.Whenthenegativerevaluationrecognisedintheequityequals
between10and39%oftheinvestment’scostandtheinvestmentisnotimpaired,theremust
berelevantindicatorstoshowthatimpairmentisnotrequired.Theneedforimpairmentof
suchfinancialassetsisreviewedatleastonthedateofthestatementoffinancialposition
ormoreoftenifnecessary.onceaninvestmenthasbeenimpaired,thetotalamountofthe
negativerevaluationrecognisedinequityinclusiveofexchangeratedifferencesisimpaired
infutureperiods.
Modrazavarovalnicaregularlyreviewstherequirementforimpairmentoffinancialassetsclas-
sifiedasavailableforsale.Investmentswhosevaluehassignificantlydeclinedinthereporting
periodand/orsuchadeclineisprolongedareimpaired.Theinsurancecompanyconsidersa
significantdeclineinthevalueofequityinvestmentstobeoneinwhichtheamountofthe
negativerevaluationandexchangeratedifferencesrecognisedintheequityreach40%of
theinvestment’scost.Inthiscasesuchequityinvestmentsareimpairedinthetotalamount
ofthecumulativeunrealisednetlossandexchangeratedifferences.Theinsurancecom-
panyassessesthatthedeclineisprolongedwhentheasset’svaluehasbeendecreasingfor
straightforward9−12months.Theneedforimpairmentisreviewedasandwhennecessary
oratleastannuallyonthebalancesheetdate.
102
TheGrouponlyimpairsdebtinstrumentsclassifiedasavailable-for-salewhoseprincipal
amountswillnotberecoveredorwillnotberecoveredinfullonmaturityaccordingtothe
estimatemadebytheCompanyasaprudentmanager.Intheformercasesuchdebtinstru-
mentsareimpairedtozero,whileinthelattercase,debtinstrumentsareimpairedtothe
percentageoftheprincipalwhichtheCompanyestimateswithcertaintytoberepaidon
maturity.Inthelattercase,debtinstrumentsthathavenomaterialeffectonthefinancial
statementsarenotcarriedatamortisedcostsbutratheratestimatedrealisablevalue.The
needforimpairmentofsuchfinancialassetsisreviewedatleastonthedateofthestatement
offinancialpositionormoreoftenifnecessary.
Theabovedoesnotapplytonon-marketableinvestmentsofKapitalskadruæbawhosefair
valueisdeterminedbymodel.Theseinvestmentsarealwayssubjecttopermanentimpair-
mentrecognisedintheincomestatement.
Impairmentandreversalofimpairmentoffinancialassetscarriedatamortisedcost
Ifthereisobjectiveevidencethatanimpairmentlossonloansorheld-to-maturityfinancial
assetscarriedatamortisedcosthasbeenincurred,theamountofthelossismeasuredas
thedifferencebetweenthefinancialasset’scarryingamountandthepresentvalueofesti-
matedfuturecashflowsdiscountedatthefinancialasset’soriginaleffectiveinterestrate.The
carryingamountofthatitemofassethastobedecreasedthroughtheallowanceaccount.
Impairmentlosseshavetobepostedinoperatingresultasrevaluationfinancialexpenses.
If,inasubsequentperiod,theamountoftheimpairmentlossdecreasesandthedecrease
canberelatedobjectivelytoaneventoccurringaftertheimpairmentwasrecognised(such
asanimprovementinthedebtor’screditrating),thepreviouslyrecognisedimpairmentloss
shallbereversedthroughtheallowanceaccount.Thereversalofimpairmentlossesshallnot
resultinacarryingamountofthefinancialassetthatexceedswhattheamortisedcostwould
havebeeniftheimpairmentlosshadnotbeenrecognisedatthedateonwhichtheimpair-
mentlossisreversed.Theamountofthereversalofanimpairmentlossshallberecognised
inprofitorlossasrevaluationfinancialrevenue.
Impairmentandreversalofimpairmentoffinancialassetscarriedatcost
Ifthereisobjectiveevidencethatanimpairmentlosshasincurredonanunquotedequity
instrumentthatisnotcarriedatfairvaluebecauseitsfairvaluecannotbereliablymeas-
ured,theamountoftheimpairmentlossismeasuredasthedifferencebetweenthecarrying
amountofthefinancialassetandthepresentvalueofestimatedfuturecashflowsdiscounted
atthecurrentmarketrateofreturnforsimilarfinancialassets.suchimpairmentlossesshall
notbereversed.TheGroupisusingthevaluationmodeltodetermineifthereisobjective
evidenceofimpairment.
Impairmentandreversalofimpairmentofavailable-for-salefinancialassets
Whenadeclineinthefairvalueofanavailable-for-salefinancialassethasbeenrecognised
directlyinothercomprehensiveincomeandthereisobjectiveevidencethattheassetis
impaired,thecumulativelossthathadbeenrecogniseddirectlyinothercomprehensive
incomeshallberemovedfromequityandrecognisedinprofitorlosseventhoughthefinan-
cialassethasnotbeenderecognised.
Theamountofthecumulativelossthatisremovedfromequityandrecognisedinprofitor
lossshallbethedifferencebetweentheacquisitioncost(netofanyprincipalrepaymentand
amortisation)andcurrentfairvalue,lessanyimpairmentlossonthatfinancialassetprevi-
ouslyrecognisedinprofitorloss.
Impairmentlossesrecognisedinprofitorlossforaninvestmentinanequityinstrumentclas-
sifiedasavailableforsaleshallnotbereversedthroughprofitorloss.
103
If,inasubsequentperiod,thefairvalueofadebtinstrumentclassifiedasavailableforsale
increasesandtheincreasecanbeobjectivelyrelatedtoaneventoccurringaftertheimpair-
mentlosswasrecognisedinprofitorloss,theimpairmentlossshallbereversed,withthe
amountofthereversalrecognisedinprofitorloss.
Recoverableamountofnon-currentassets
asatthereportingdatetheGroupestimatesifthereexistanyfactorsindicatingthatnon-
currentassetsneedtobeimpaired.Ifeventsoccurindicatingthattheasset’sbookvalue
ishigherthantheestimatedrecoverableamount,thevalueoftheassetisimpairedtoits
recoverableamountorthatofcash-generatingunit.Therecoverableamountisthegreater
ofanasset’s(orcashgeneratingunit’s)netsellingpriceandvalueinuse.Inassessing
thevalueinuse,theestimatedfuturecashflowsarediscountedtotheirnetpresentvalue
usingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueof
moneyandtherisksspecifictotheasset.foranassetthatdoesnotgeneratelargelyinde-
pendentcashinflows,therecoverableamountisdeterminedforthecash-generatingunit
towhichtheassetbelongs.lossesarisingfromimpairmentarerecognisedunderoperat-
ingexpensesfromrevaluation.
Derecognitionoffinancialinstruments
afinancialassetisderecognisedwhenalltherisksandbenefitsaswellasthecontrolover
contractualrightsrelatedtothefinancialinstrumentaretransferred.afinancialliabilityis
derecognisedwhenitissettled,cancelledorexpired.
Non-currentassets(disposalgroups)heldforsale
non-currentassets(disposalgroups)heldforsalearethosewhosecarryingamountisjus-
tifiablyexpectedtobesettledpredominantlywithasaleinthenext12monthsratherthan
withtheircontinueduse.
Whenanassetisdesignatedasheldforsaleorclassifiedasadisposalgroupheldforsaleor
whentheassetisderecognised,dependingontheorderoftheevents,theassetisnolonger
amortisedordepreciated.suchnon-currentassetordisposalgroupheldforsaleshallbe
measuredatthelowerofitscarryingamountorfairvalue,lesscoststosell.
Operatingandotherreceivables
operatingreceivablesarerecognisedattheamountofinvoicesissued,lessanyallowances.
TheallowanceassessmentsarebasedontheGroup’sreasonableexpectationsthatapay-
mentisnolongerlikelyinfulland/orinaspecificamount.
Cashandcashequivalents
Uponinitialrecognition,cashandcashequivalentsarerecognisedattheamountarisingfrom
theunderlyingdocument.Cashandcashequivalentscomprisebankbalances,cashonhand,
calldepositsandshort-termdepositswithmaturityofuptothreemonths.
Deferredcostsandaccruedrevenues
Deferredcostsandaccruedrevenuesincludeshort-termdeferredcostsandshort-term
accruedrevenues.
104
Equity
Kapitalskadruæbaholdsnotreasuryshares.ItssoleshareholderistheRepublicofslovenia.
TheCompany’sequityissharecapital.ThesharecapitalofeUR364,810thousandisrepre-
sentedby874,235ordinary,registered,non-parvalueshares.eachsharehasthesameinter-
estandtheattributedamountinthesharecapital.Kapitalskadruæbaholdsnotreasuryshares.
Totalequityconsistsof:called-upcapital,capitalsurplus,revenuereserves,retainednet
earningsorretainednetloss,revaluationsurplusandtemporarilyundistributednetprofitor
unsettledlossforthefinancialyear.
RevenuereservesarerecognisedaccordingtotheZGD-1.Inlinewitharticle52(2)ofthe
ZsDH-1distributableprofitofKapitalskadruæbacannotbedistributedtotheshareholders.
ordinarysharesareclassifiedasequity.Directadditionalcostsofnewsharesissue,lesstax
effects,areincludedintheequity.
Revaluationsurplus
Revaluationsurplusarisessolelyfromeffectsofvaluationoffinancialassetsavailableforsale
atfairvalue.amountsofrevaluationsurplusdisclosedinthestatementoffinancialposition
arecorrectedforamountsofdeferredtax.
Provisions
Provisionsarerecognisedforcurrentliabilities(legalorconstructive)arisingfrompastevents
whenitislikelythatanoutflowofassetsthatgenerateeconomicbenefitswillberequiredto
settlesuchanobligation,andwhentheamountoftheliabilitycanbereliablyestimated.The
amountrecordedasaprovisionisthebestestimateofexpensesrequiredtosettleexisting
liabilitiesonthebalancesheetdate.Whenthetimevalueofmoneyisrelevant,theprovisions
aredeterminedonthebasisofdiscountedcashflowsatthediscountrate(pre-tax)reflecting
thetimevalueofmoney;whereappropriate,anyrisksspecifictotheliabilityareincluded.If
theGroupsetsprovisionsbasedondiscountedcashflows,theincreasesinnetpresentvalue
areovertheyearsrecognisedasfinancialexpenses.
Wheresomeoralloftheexpenditurerequiredtosettleaprovisionisexpectedtobereim-
bursedbyotherparties,thereimbursementisrecognisedasaspecialasset,butonlywhen
itisvirtuallycertainthatreimbursementwillbereceived.Inthiscasethecostsofprovision
arediscloseddecreasedbyexpectedreimbursement.
Thechangeinmathematicalprovisionsisdisclosedintheincomestatementasincreaseor
decreaseinotheroperatingexpenses.
TheGroupestablishedlong-termprovisions:
�� whentheguaranteedvalueofassetsexceedstheactualvalueofassetsbelongingtoan
individualinsuredperson/member,namelyintheamountoftheestablisheddeficit,i.e.the
sumofdifferencesbetweentheguaranteedassetsoftheinsuredperson/memberandthe
actualvalueoftheassetsoftheinsuredperson/member;
�� ifalawsuitisfiledagainsttheCompanyoriftheCompanyestimatesaclaimisvery
probable;
�� forterminationbenefitsandjubileeawards,calculatedonthebasisofassumptiononthe
expectedemployeefluctuation,yearsofserviceandexpectedyearsuntilretirement,tak-
ingintoaccountindividualandcollectiveemploymentcontractsaswellastheCompany’s
internalregulations.
105
Therecognitionofprovisionsinthebooksofaccountandinthestatementoffinancialposi-
tionisreversedwhenthepossibleobligationsforwhichtheprovisionsweremadenolonger
existorsuchprovisionsarenolongerneeded.Provisionscanonlybeusedforitemsofthe
typeforwhichtheywereoriginallyrecognised.
Insurancecontracts−guaranteefunds
accordingtotheInternationalfinancialReportingstandard4(IfRs4)andtheInternational
actuarialstandardofPracticeno.3(IasP3),theGuaranteefundofthePPs(firstPension
fund)andtheGuaranteefundofMR(Modrazavarovalnica)areclassifiedamonginsurance
contracts.aninsurancecontractisacontractunderwhichoneparty(theinsurer)accepts
significantinsuranceriskfromanotherparty(thepolicyholder)byagreeingtocompensate
thepolicyholderifaspecifieduncertainfutureevent(theinsuredevent)adverselyaffects
thepolicyholder.
UnderIfRs4,aneventisuncertain,ifatleastoneofthefollowingisuncertainattheincep-
tionofaninsurancecontract:
�� whetheraninsuredeventwilloccur;
�� whenitwilloccur;or
�� howmuchtheinsurerwillneedtopayifitoccurs.
Insurancecontractsentailingsignificantinsuranceriskareinbooksofaccounttreatedaccord-
ingtoIfRs4.Ifinsurancecontractsdonotentailsignificantinsurancerisk,theyareinbooks
ofaccounttreatedasfinancialcontractsunderIas39.
Insurancecontractliabilities−technicalprovisions
TechnicalprovisionsforinsurancecontractsaresetasideinaccordancewiththeInsurance
actanditsimplementingregulations,aswellasincompliancewithIfRs4.
Modrazavarovalnica,d.d.isrequiredtomakeanadequateamountoftechnicalprovisions
whicharedesignedtocoverfutureliabilitiesfrominsurancecontractsandpotentialrisk
lossesarisingfrominsuranceoperations.
Mathematicalprovisionsarecalculatedforeveryinsurancecontractseparately.Theprospec-
tivemethodisappliedinthecalculationoftheseprovisions.
Thecalculationstakeintoaccountactuarialassumptions,theprovisionsoftheapplicable
legislationandallcontractualobligationstotheinsuredpersonsaccordingtothecontentof
insurancecontracts.
Thecalculationoftechnicalprovisionsderivingfrominsurancecontractsandtheiradequacy
isonanannualbasisinspectedandcommentedonbyanauthorisedactuaryappointedby
theCompany’sManagementboard.
NettechnicalprovisionsoftheGuaranteeFundofMR
nettechnicalprovisionsoftheGuaranteefundofMRrepresentmathematicalprovisionsfor
insurancepoliciesoftheGuaranteefund“Modrarenta”,concludedaftertheretirementof
theinsuredpersonswhooptedforregularterminationofsupplementarypensioninsurance.
MathematicalprovisionsarecalculatedaccordingtotheInsuranceact,Technicalbasisfor
annuitypensioninsuranceofModrazavarovalnica,d.d.andtheinsurance-technicalstand-
ards,prospectivelyforeachinsurancepolicyseparately.GermanannuitytablesDaV1994R
wereappliedinthecalculation.Theaccruedinterestrate,themortalitytablesandthecosts
arethesameasappliedinthecalculationofsupplementarypension.
106
NettechnicalprovisionsoftheGuaranteeFundofthePPS
nettechnicalprovisionsoftheKsPPs(GuaranteefundofthefirstPensionfund)represent
mathematicalprovisionscomposedof:
�� mathematicalprovisionsforpoliciesofthePPs;
�� provisionsforsmoothingthemortalityexperienceofthePPs;and
�� provisionsforsmoothingthereturnexperienceofthePPs.
MathematicalprovisionsforthepoliciesofthePPS
MathematicalprovisionsforthepoliciesofthePPsarecalculatedbasedonarticle117ofthe
InsuranceactandtheRulesontheCalculationofMathematicalProvisions.
ThecalculationisbasedonthemostrecentannuitymortalitytablesapprovedbytheInsur-
ancesupervisionagency.
Theaccruedinterestrateandthecostsarethesameasappliedintheannuitycalculation.
Themortalitytablesusedinthecalculationofmathematicalprovisionsaremoreconserva-
tivethanthoseusedinannuityallocation.
ProvisionsforsmoothingthemortalityexperienceofthePPS
Provisionsforsmoothingthemortalityexperiencearedeterminedupontheinitialcalculation
ofthemathematicalprovisionasthedifferencebetweenthevalueofthetransferredassets
andthevalueofmathematicalprovisionssetasideforthePPspolicy.
Provisionsforsmoothingthemortalityexperiencethatarecalculatedperindividualpolicies
upontransferincreasetheprovisionsforsmoothingthemortalityexperienceofthePPsand
arecreatedaggregatelyforallinsuredpersons.
Theyarecalculatedandrecognisedmonthlyuponthecalculationofthemathematicalprovi-
sionsforthepoliciesoftheKsPPsforthecurrentmonth.Theyarerecordedonthemathemat-
icalprovisionsaccountundersubgroup“provisionsforsmoothingthemortalityexperience”.
Theprovisionsforsmoothingthemortalityexperiencemaybeadditionallyestablishedatthe
year-endfromthesurplusfundsoftheKsPPs,i.e.:
�� ifmathematicalprovisionsarenotestablishedaccordingtothemostrecentannuitytables,
thefollowingisentirelyallocatedtoprovisions:
-surplusassetsfromreturnoftheGuaranteefundinexcessoftheguaranteedreturn;
-surplusassetsresultingfrommortalityofpopulationwithannuityinsurancepolicies;
�� however,ifmathematicalprovisionsareconsistentwiththemostrecentannuitytables,
thesurplusassetsresultingfrommortalityofpopulationwithannuityinsurancepolicies
areallocatedtoprovisions.
ProvisionsforequalisationoftheyieldexperienceofthePPS
Provisionsforequalisationoftheyieldexperienceareestablishedattheyear-endifmath-
ematicalprovisionsforthePPspoliciesaresetasideaccordingtothemostrecentannuity
tables.Ifso,thesurplusassetsresultingfromthesurplusreturnoftheKsPPsovertheguar-
anteedreturn,areallocatedtopermanentincreasesofannuitiesorthewholeorpartofthem
areusedforcreatingprovisionsforsmoothingthereturnexperience.Theshareofsurplus
earmarkedforannuitiesissetbythemanagementoftheadministrator.
Claimsprovisions
Provisionsforclaimsoutstandingforguaranteefundsareestablishedintheamountofthe
liabilitiesthattheguaranteefundhastopayoutbasedoninsurancecontracts,withregard
towhichaneventinsuredhasoccurredbeforetheendofaccountingperiod.
107
Operatingliabilities
operatingliabilitiescomprisetradepayablesforacquiredassetsorservices,andliabilities
toemployees,thestate,etc.liabilitiesarerecognisedifitisprobablethatanoutflowof
resourcesembodyingeconomicbenefitswillresultfromtheirsettlementandtheamountat
whichthesettlementwilltakeplacecanbemeasuredreliably.
Accruedcostsanddeferredrevenues
accruedcostsanddeferredrevenuescompriseaccruedrevenueandotheraccrualsand
incomecollectedinadvance.accruedcostsarethedisclosedaccruedcostsfromordinary
activityoftheGroup.
Revenue
Therevenueisrecognisediftheincreaseofeconomicbenefitsintheaccountingperiodis
relatedtotheincreaseinassetsordecreaseinliabilitiesandiftheincreasescanbemeasured
reliably.Revenuesandincreasesofassetsordecreasesofliabilitiesarerecognisedsimulta-
neously.TheCompanyrecognisesthefollowingtypesofrevenues:
1.Revenuesfrominsurancepremiums
netrevenuesfrominsurancepremiumsareidenticaltogrosspremiumwritten.Grosspre-
miumwrittenisrecognisedinaccountingrecordsinthedayitisaccountedandnotonthe
dayitispaid.
2.Revenuefromfees
TheGroupisentitledtoentryandexitfeesaswellasanannualmanagementfeeforthe
managementofthepensionfunds’assets.entryfeesarechargedasapercentageofthe
premiumpaid,theexitfeesrepresentapercentageofredemptionvalue,whereastheman-
agementfeeiscalculatedasapercentageofaverageannualnetassetvalueofanindividual
fundduringthesavingperiod.
a. Entry fee
TheGroupchargesentryfeesfortheperformanceofitsactivitiesinaccordancewiththepen-
sionscheme.Thismeansthattheassetscollectedandtransferredtoanindividualpension
fundarereducedbytheamountoftheentryfeesandthefundmanagestheassetsattribut-
abletothenetpremium.Theentryfeesarechargedinthepercentageofthepremiumatthe
timeofthepayment.
b. Management fee
TheGroupmanagesmutualpensionfundsandchargesmanagementfee,thusthemonthly
valueofassetsofthefundsisreducedbythecostofmanagementfees.Themanagement
feeiscalculatedasapercentageoftheaveragevalueofthefund’sassets,determinedasthe
arithmeticmeanofthenetvalueofthefund’sassetsontheconversiondayofthecurrentyear.
c. Exit fee
Inaccordancewiththepensionscheme,theGroupisentitledtoexitfees,wherebythe
redemptionvalueisreducedbytheexitfeesandthenetvalueispaidtotheindividualwho
terminatedthescheme.exitfeesarecalculatedinapercentageoftheredemptionvalue
whenthepolicyispaid.
3.Revenuefromleasepayments
Therevenuefromleaseofinvestmentpropertyisrecognisedoverthedurationofindividual
leasecontract.
108
Financialrevenue
1.Interest
Interestincomeiscalculatedandrecognisedattheeffectiveinterestrate.Interestondebt
securitiesisdisclosedintheCompany’sstatementoffinancialpositiontogetherwithfinan-
cialinvestments.
2.Dividends
DividendsarerecognisedwhentheGroupobtainstherighttopayment.
3.Revenuefromsaleoffinancialassets
Revenuesfromthesaleoffinancialassets(gainsonthedisposaloffinancialassets)are
accountedforandrecognisedonthetradingday.
Costs
Costsofmaterialsandservices
Costsofmaterialsandservicesareclassifiedbyprimarytypes.TheGroupdoesnotclassify
costsbyfunctionaltype,becausetheentireGrouprepresentsasinglefunctionaltype.
Borrowingcosts
Costsofborrowingsarerecognisedintheperiodtowhichtheyrefer.
Employeebenefits
labourcostsincludegrosssalaries,grosssalarycompensationspaidbytheCompany,ben-
efitsinkind,giftsandawardstoemployees,severancepay,aswellastherelevanttaxesand
dutiespaidbythepayer.Thesecostsarerecognisedasthecurrentexpensesoftheperiod.
TheGroupalsorecognisespotentialfutureemployee-relatedcostsbasedontheCollective
agreement.Theseexpensesarerecognisedovertheentireperiodofemploymentofanindi-
vidualemployeetowhomthecollectiveagreementrefers.
Expenses
expensesarerecognisedifthedecreaseineconomicbenefitsinthereportingperiodis
associatedwithdecreasesinassetsorincreasesindebtandifthisdecreasecanbereliably
measured.expensesshouldthereforeberecognisedsimultaneouslywiththerecognitionof
adecreaseofassetsorofanincreaseofliabilities(debts).
Financialexpenses
financialexpensescompriseexpensesforfinancing,mostlyinterestexpenses.Revaluation
financialexpensesariseinassociationwiththeimpairmentoffinancialassets.expensesfrom
thesaleoffinancialassets(lossesonthedisposaloffinancialassets)areaccountedforand
recognisedonthetradingday.
Tax
1.Currenttax
Currenttaxassetsandliabilitiesinrespectofpresentandpastperiodsarerecognisedat
amountswhichtheGroupexpectstopaytoorreceivefromthetaxadministration.Current
taxistheexpectedtaxpayableonthetaxableincomefortheyear,usingtaxratesenacted
atthebalancesheetdate.
109
2.Deferredtax
Deferredincometaxassetsandliabilitiesarecalculatedaccordingtothebalancesheetlia-
bilitymethod.onlydeferredtaxassetsandliabilitiesarisingfromtemporarydifferencesare
recognised.
adeferredtaxassetisalsorecognisedonaccountofunusedtaxlossesandunusedtaxcred-
itscarriedforwardtothenextperiod,ifitisprobablethatfuturetaxableprofitwillbeavailable
againstwhichtheunusedtaxlossesandunusedtaxcreditscanbeutilised.
onthebalancesheetdate,deferredtaxassetsarerevisedandimpairedonaccountofthose
taxassetsforwhichitisnolongerprobablethatfuturetaxableprofitwillbeavailableagainst
whichtheunusedtaxlossesandunusedtaxcreditscanbeutilised.
Deferredtaxassetsandliabilitiesarerecognisedusingthetaxrateapplicablewhentheasset
isexpectedtoberealisedorliabilitiessettled.Taxrates(andtaxlegislation)enactedorclose
tobeingenactedatthebalancesheetdateareused.
Deferredtaxischargedorcrediteddirectlytocomprehensiveincome,ifitrelatestoitems
thatarecreditedorchargeddirectlytocomprehensiveincome.
Cashflowstatement
Thecashflowstatementiscompiledundertheindirectmethod(formatII)fromthedata
includedinthestatementoffinancialpositionat31December2015and31December
2014,incomestatementdatafortheyear2015,andadditionaldatanecessaryforthe
adjustmentofrevenueandexpenditureandfortheappropriatebreakdownofsignifi-
cantitems.
Segmentreporting
In2015,theKapitalskadruæbaGrouphadnobusinesssegments.
Riskmanagement
Intheeconomiccrisis,riskmanagementprovedtobeaveryimportantarea,becauseeffi-
cientriskmanagementisaconditionforsuccessfulandstableoperations.Therefore,risk
managementiscrucialinperformingactivitiestoachievethegoalsoftheGroup.Theuseof
standardmethodologiesformanagingriskenablesqualitativeevaluationofalltypesofrisk,
atimelyresponseandthereductionofriskexposure.TheGroupobserveslegalregulations
intheforefrontwhilealsoregulatingriskmanagementthroughinternalactssuchasthe
Rulesonriskmanagement,whichincludeinadditiontoindividualriskdescription,internal
riskmanagementorganisation,measuresandmethodsusedtomitigatetherisks,aswellas
proceduresofcontrolandresponsestoindividualrisks.
Withtheaimofimprovingassetmanagementinthelong-term,theGroupcontinuesto
developandupgradetheentireriskmanagementsystem.especiallyinModrazavarov-
alnica,theprojectofsolvencyIIisimportant,thestrategicgoalofwhichistoprotect
theassetsoftheinsuredpersonsandalsotomeetcapitalrequirements,improverisk
management,provideconditionsforbettercapitalallocation,increasetransparencyof
operationsandsimilar.
Inthecourseofitsactivity,theGroupisexposedtofinancial,operationalandstrategicrisks.
financialrisksincludetheimportantmarketrisks(theriskofchangesinsecuritiesprices,
interestrateriskandcurrencyrisk)aswellascreditandliquidityrisk.
110
Riskofsecuritiespricechange
Theriskofsecuritiespricechangeistheriskthatthevalueofafinancialinstrumentwillfluc-
tuateasaresultofchangesinmarketprices,whetherthosechangesarecausedbyfactors
specifictotheindividualinstrumentoritsissuerorfactorsaffectingallinstrumentstraded
intheregulatedmarketsinfinancialinstruments.Theriskofsecuritiespricechangeisman-
agedbyregularmonitoringofthemarketsituationandmacroeconomicindicatorsthataffect
themovementinthegenerallevelofmarketpricesandbymaximumpossibledispersionof
investmentstoeliminatemostofthenon-systematicrisk.Thedispersalofapartofinvest-
mentsabroadhaddecreasedtheGroup’sdependenceoftheportfoliooflong-terminvest-
mentsonthemovementofpricesonthesloveniancapitalmarket.
Themonitoringandmeasurementofriskiscarriedoutthroughthecalculationofvaluesat
risk(VaR)appliedtotheportfolioasawholeaswellasseparatelyforequityanddebtsecu-
rities.Thebetaindicatorisalsocalculatedforequitysecurities,asameasureofsystematic
risk.Thefluctuationsinsecuritiespricesareregularlymonitored.
Interestraterisk
TheverynatureofinvestmentsindebtsecuritiesanddepositsexposestheGrouptointer-
estrateriskresultingfromtheriskthatinvestmentvalueswillfluctuateduetochangesin
marketinterestrates.owingtothedecreaseininterestratestheassetswereexposedto
reinvestmentrisk.Theexposuretointerestrateriskisregularlymeasuredbythemodified
durationindicator.furthermore,theCompany’sinternalcommitteesmonitorthefluctuation
ininterestratesandmarketforecastsandanalysisonaweeklybasis,providinginvestment
recommendationsonthisbasis.
TheGroupminimisestherisksarisingfrominterestratesbyrestructuringtheportfoliobased
onmarketconditions,byreducingtheaveragematurityofbondportfolios,byrestructuring
assetswithfixedinterestrateintoassetswithvariableinterestrateorviceversa,depending
ontheexpectedmovementinmarketinterestratesandbyclassifyingassetsintothegroup
offinancialassetsheldtomaturityaccordingtotheIfRs.In2015,theGroupdidnotuse
derivativefinancialinstrumentsforinterestrateriskhedging.
Currencyrisk
Inmanagingapartoffinancialassetsinvestedinforeigncurrencies,theGroupisalsoexposed
tocurrencyrisk.
Currencyriskismonitoredandmanageddailybymatchingthecurrenciesoffinancialassets
withlegalandinternalrestrictions.Thebasisformeasuringcurrencyriskisthemonitoring
andcalculationofexposuretoindividualcurrencies.In2015,theGroupdidnotusederivative
financialinstrumentsforcurrencyriskhedging.
Creditrisk
Creditriskisrelatedtoinvestmentsindebtinstruments(investmentsinbonds,treasurybills,
commercialpapers,certificatesofdeposit,deposits,cashassets)andentailsthepossibility
ofinvestmentsbeingonlypartlyrepaidornotatall.Themanagementofcreditriskforinvest-
mentsindebtsecuritiesisimplementedbycarefulselectionofbusinesspartners,regular
monitoringofcompanies’operationsandbyestablishinginvestmentlimitswithregardto
exposuretoindividualinvestments.Creditriskisalsomanagedbydispersionofinvestments
intermsofissuers,industriesandgeographicalareas,byregularmonitoringofcreditmargins
andratingsofinvestmentsandissuersorcontractualpartners.
111
accordingtointernalacts,businesspartners’creditratingisdeterminedbyratingsassigned
bystandard&Poor’s,fitchandMoody’s,andin-houseanalyses.Thecreditriskarisingfrom
foreigndebtsecuritiesisnormallymanagedthroughinvestingintheforeigndebtsecurities
thataregivenacreditratingbbb-ormorebyrenownedcreditratingagencies,aswellas
throughadjustmentofthecreditratingstructureoftheportfoliototheadoptedinternallimi-
tations.Themaximumexposure,i.e.highyield,issetfordebtsecurities.
Withregardstoinvestmentsindeposits,debenturesandcertificatesofdeposits,aninternal
modelhasbeendevelopedfordeterminationoflimitsofsuchinvestmentsinindividualbanks.
Internallimitsforindividualbanksareregularlyupdated.Thetotalexposuretoasinglebank
ismonitoredonaregularbasisandcomplieswiththelegalregulations.
Liquidityrisk
liquidityriskistheriskrelatedtotheliquidityofthecapitalmarketorinvestmentandthe
riskofsolvencyoftheGroup.TheGroupmanagesitsassetsandliabilitiesinsuchamanner
astobeableatanytimetosettleitsliabilitiesastheyfalldue.Thepolicyprescribingregular
liquiditymanagementispursuedaccordingtothelawandsecondaryregulations.
Duetothelowliquidityofthesloveniancapitalmarket,liquidityriskisencounteredinthe
majorityofinvestmentsinassociationwithdomesticequityanddebtsecurities,withthe
highestriskposedbynon-listedinvestments.bydispersingaportionofinvestmentsabroad,
theGroupisabletoreduceliquidityriskbyinvestingonlyinthemostliquidsecurities.More-
over,liquidityriskismanagedbydailymonitoringoftheinflowsandoutflowsandprecise
matchingofmaturityofassetsandliabilities.
Operationalrisk
operationalriskistheriskofalossduetoinappropriateinternalprocessesorincorrectaction
bypeopleordefectivefunctioningofsystemswithintheCompanyorasaresultofexter-
naleventsandactions.operationalriskalsoincludeslegalanddocumentaryriskaswellas
therisksarisingfromtradingprocedures,settlementandvaluationofassetsandliabilities.
operationalriskismanagedthroughasystemofappropriateauthority,internalcontrolsand
bydefiningbusinessprocessesandensuringthesuitableemployeequalifications.Inorder
tominimiseoperationalrisks,companiesestablishedasystemofrecordinglosseventsand
regularlymonitoringtheimplementationofthemeasuresadopted.
InadditiontotheRiskManagementDepartmentthereisalsotheInternalauditDepartment,
payingspecialattentiontoverifyingtheinternalcontrolsystemandmakingproposalsfor
itsimprovement.
Strategicrisk
strategicriskistheriskofalossowingtoincorrectbusinessdecisions,inappropriateorgani-
sationandstrategyoftheCompanyandinsufficientresponsetothechangesinthebusiness
environment.significantstrategicrisksincludelegislative,taxandpoliticalrisks,resulting
fromthestate’sdiscretionaryrighttoadoptdecisions,andmayleadtochangesinthebusi-
nessandtaxenvironment.Theserisksalsoinfluencetheprocessesinvolvedinthesaleof
companieswheretheGroupholdsinterests,theamountofliabilitiestothepensionbudget
andconsequentlythemanagementoffinancialassets.
TheManagementboardisinchargeofformulatingappropriateorganisationandstrategy,
andmustadoptallmeasuressuitableforachievingthestrategicgoalsaswellastopreserve
andstrengthentheGroup’sreputation.anappropriatesupervisionsystemisprovidedfor
managingthisrisk,enablingmonitoringoftheimplementationofgoalsdefinedinthebusi-
112
nessstrategyandthepreventionoferrorsthatwouldresultindissatisfactionofbusiness
partners.strategicrisksarealsomanagedbyregularmonitoringandparticipationinthedraft-
ingoflegalbasesandbyoutsourcingexternalconsultants(taxconsultants,auditors,legal
consultants,ITconsultants,etc.).
17.3 DIsClosUResanDnoTesToTHefInanCIalsTaTeMenTs
17.3.1 Notestotheincomestatement
Noteno.1
Net sales revenues
in EUR 000
2015 2014
Revenues from the sales of services 31,022 27,226
Revenues from management 7,843 7,079
Revenue from lease payments 1,062 992
Other revenue 15 0
Total 39,942 35,297
Revenuesfromthesaleofservicesmostlyrefertorevenuesfrominsurancepremiums.
in EUR 000
2015 2014
Revenue from the sales on the domestic market 39,942 35,297
Total 39,942 35,297
Noteno.2
Other operating revenue (including revaluation revenue)
in EUR 000
2015 2014
Revenues from reversal of long-term provisions 11 716
Other operating revenues 477 28
Revaluation operating revenue 1 0
Total 489 744
Revenuesfromreversaloflong-termprovisionsintheamountofeUR11thousandconstitute
revenuesfromthereversalofprovisionsforonerouscontractsofKapitalskadruæba.
otheroperatingrevenuesofeUR477thousandmainlyrefertorevenuefrompaymentof
thedeficitinKsMRintheamountofeUR363thousand.otheroperatingrevenuesinclude
revenuesfromderecognitionofstatute-barredliabilitiesintheamountofeUR108thousand
andotherminoritems.
113
Noteno.3
Costs of goods, materials and services
in EUR 000
2015 2014
Costs of materials 253 240
Costs of services 4,342 3,837
Total 4,595 4,077
Costs of materials
Costsofmaterialscomprisecostsofpowersupply,write-offoflowvalueassets,costsof
officestationeryandprofessionalliterature,andothercostsofmaterials.
Costs of services
Costsofservicesincludecostsoftransport,maintenanceworkonbusinesspremisesand
property,plantandequipment,leasepayments,reimbursementofcostsassociatedwith
labour,costsofpaymenttransactions,bankingservicesandinsurancepremiums,costsof
intellectualandpersonalservices,costsoftradefairs,advertisingandentertainment,costs
ofservicesprovidedbynaturalpersons,andcostsofotherservices.
Costs of audit
Thecostsofauditingthe2015financialstatementsandannualReportoftheKapitalska
druæbaGrouptotalledeUR13,100.
Noteno.4
Labour costs
in EUR 000
2015 2014
Payroll costs 4,260 4,042
Social security costs 683 650
Pension insurance costs 213 206
Other labour costs 482 438
Total labour costs 5,638 5,336
Noteno.5
Amortisation, depreciation and write-offs
2015
in EUR 000
2014
Depreciation/amortisation 1,170 1,168
Amortisation of intangible assets 244 287
Depreciation of buildings 307 308
Depreciation of garages 11 11
Depreciation of equipment and spare parts 103 62
Depreciation of investment property 505 500
114
2015
in EUR 000
2014
Revaluation operating expenses 31 22
Revaluation operating expenses associated with current assets 31 22
Total 1,201 1,190
Amortisation of intangible assets
Thecostsrefertotheamortisationofcomputersoftwareandlicences.
Depreciation of buildings
ThesecostsincludethecostsofdepreciationofbusinesspremisesownedbyKapitalska
druæba.
Depreciation of equipment and spare parts
Depreciationofequipmentandsparepartsrepresentsdepreciationofelectronicequipment,
woodenfurniture,carsandotherequipment.
Noteno.6
Other operating expenses
in EUR 000
2015 2014
Change in technical provisions 11,393 13,140
Provisions 6,031 26
Other operating expenses 17,050 15,451
Total 34,474 28,617
In2015,ModrazavarovalnicaincreasedmathematicalprovisionsofeUR11,393thousand,
establishedprovisionsfornon-achievementofguaranteedrateofreturnofthemanagedfund
equallingeUR4,980thousandandformedprovisionsforpensionsandjubileeawardsinthe
amountofeUR17thousandaswellasmadeprovisionsfortestingtheadequacyofprovi-
sionstotallingeUR524thousand.
In2015,KapitalskadruæbacreatedeUR13thousandofprovisionsfornon-achievementof
guaranteedreturnoftheCompulsorysupplementaryPensionInsurancefundoftheRepub-
licofslovenia(soDPZ),andprovisionsforcontingentliabilityoftheCompanyarisingfrom
IndemnityagreementtotallingeUR497thousand.
Themajorportionofotheroperatingexpensesincludesgrossclaimspaidforlifeinsurance
byModrazavarovalnicaequallingeUR15,176thousand,consistingofaccountedpension
annuities.
Noteno.7
Financial revenue
2015
in EUR 000
2014
Financial revenue from shares and interests 48,045 60,496
Financial revenue from other investments and loans 13,297 13,736
115
2015
in EUR 000
2014
Financial revenue from other investments 11,375 11,456
Financial revenue from loans 1,922 2,280
Financial revenue from operating receivables 6,954 0
Total 68,296 74,232
financialrevenuefromoperatingreceivablestotallingeUR6,954thousandconstitutesrepay-
mentofstateaidfromelan,d.o.o.,whichdidnothappenin2014.
Financial revenue from shares and interests
in EUR 000
2015 2014
Dividends and shares in profits 21,243 25,234
Revaluation financial revenue from shares and interests 813 5,747
The effect of restatement of financial revenue from shares and interests due to the adjustment of associates to equity method
2,724 1,203
Gains from the disposal of financial assets 23,265 28,312
- available-for-sale financial assets 22,951 28,295
- financial assets measured at fair value through profit or loss 314 17
Total 48,045 60,496
Financial revenue from other investments and loans
in EUR 000
2015 2014
Interest income 12,734 9,730
Revenue from the revaluation of receivables, liabilities and loans to retain their value
563 22
Exchange rate gains 563 22
Revenue from realised gains 0 3,984
Revenue from the sale of financial assets available for sale 0 3,981
Revenue from the sale of financial assets measured at fair value through profit or loss
0 3
Other financial revenue 0 0
Total 13,297 13,736
Revenue from sale of financial assets
in EUR 000
2015 2014
Revenue from realised gains 23,265 32,296
- available-for-sale financial assets 22,951 32,276
- financial assets measured at fair value through profit or loss 314 20
116
RevenuefromthesaleoffinancialassetsintheamountofeUR22,951thousandconstitute
realisedcapitalgainsfromthedisposalofavailable-for-salefinancialassets.Revenuefromthe
saleoffinancialassetsintheamountofeUR314thousandconstituterealisedcapitalgains
fromthedisposaloffinancialassetsmeasuredatfairvaluethroughprofitorloss.
Interest income
in EUR 000
2015 2014
Deposits 1,922 2,280
Bonds 10,686 7,437
- financial assets measured at fair value through profit or loss 931 0
- available-for-sale financial assets 6,811 4,469
- financial assets held to maturity 2,944 2,968
Other securities 126 13
- financial assets measured at fair value through profit or loss 120 13
- financial assets held to maturity 6 0
Total 12,734 9,730
Financial revenue from operating receivables
in EUR 000
2015 2014
Financial revenue from operating receivables 6,954 0
Total 6,954 0
financialrevenuefromoperatingreceivablestotallingeUR6,954thousandconstitutesrepay-
mentofstateaidfromelan,d.o.o.,accordingtotheCommissionDecisionsa.26379of19
september2012.
Noteno.8
Financial expenses for long-term and short-term financial asset write-offs
2015
in EUR 000
2014
Loss from disposal of financial assets 545 642
- at fair value through profit or loss 189 18
- held-to-maturity 0 275
- available-for-sale 356 349
Interest expense 1 0
Revaluation operating expenses 8,736 13,594
Expenses from the revaluation of financial assets measured at fair value through profit or loss
5,105 1,827
Impairment of equity investments at fair value through profit or loss 2,876 82
Impairment of shares and interests measured at cost 0 10,864
Expenses from the cancellation of shares and subordinated bank bonds 0 747
117
2015
in EUR 000
2014
Exchange rate losses 656 50
Other revaluation expenses 99 24
Other financial expenses 16 0
Expenses for ZPIZ 19,000 0
Reversal of impairments 0 -8,723
The effect of restatement of financial expenses from shares and interests due to the adjustment of associates to equity method
1,569 0
Total 29,867 5,513
expensesfromthesaleoffinancialassetsintheamountofeUR545thousandconstitute
realisedcapitallossesfromthedisposaloffinancialassets.
Impairmentlosswasrecognisedonavailable-for-saleequityinvestmentcarriedatfairvalue
throughequityandclassifiedunderavailable-for-salefinancialassetsinthetotalamountof
eUR9thousand.Thisinvestmenthadalreadybeenimpairedinthepast.onceaninvestment
hasbeenimpaired,thetotalamountofthenegativerevaluationrecognisedinequityinclusive
ofexchangeratedifferencesisimpairedinfutureperiods.
sharesandstakesclassifiedasavailable-for-salefinancialassetswereimpairedinthetotal
amountofeUR2,867thousand.TheGroupassessedthattherewasimpartialevidenceof
impairmentsoftheseassets.Thefairvalueofassetswasestimatedbasedoninternalvalu-
ationsandoneexternalvaluation.assetvaluationsweremadeaccordingtothefollowing
methods:income-basedapproach,thediscountedfreecashflowmethod,theasset-based
approach,thenetassetvaluationmethodundertheassumptionofagoingconcernand
regularliquidationandthepeercomparisonmethod(comparablelistedcompanies),where
theprocedureisbasedonselectedmultipliersandthevalueoftherelevantcompanyis
assessedbasedonthecomparisonofperformanceindicatorsandstockpriceofcompara-
blecompanies.Thevaluationmodelsusedin2015indicatedasmallerneedforimpairments
thanin2014.
TheGrouprevaluedequityinvestmentscarriedatfairvaluethroughprofitorlossinthe
amountofeUR5,105thousand.
onthebasisofarticle67a(5)oftheZIPRs1415-C,Kapitalskadruæbain2015creditedeUR19
milliontotheZPIZ(PensionandDisabilityInsuranceInstitute)forannualallowanceforpen-
sioners.Todate,KapitalskadruæbahaspaideUR664,321thousandtotheZPIZ.Thesepay-
mentswereincludedinthefinancialexpensesfromotherfinancialliabilitiesintheincome
statement.
Foreign currency translation
in EUR 000
2015 2014
Exchange rate gains 563 22
Exchange rate losses -656 -50
Net exchange rate gains/losses -93 -28
In2015,thenetexchangeratelossamountedtoeUR93thousand.
118
Profit or loss from financial assets
in EUR 000
2015 2014
Income from financial assets 68,296 74,232
Expenses from financial assets -29,867 -5,513
Net profit or loss financial asset 38,429 68,719
Noteno.9
Other revenue
in EUR 000
2015 2014
Other unusual items 26 51
Total 26 51
amajoramountofotherunusualitemsrepresentsrevenuefrompreviousperiods.
Noteno.10
Other expenses
in EUR 000
2015 2014
Other items 4 3
Total 4 3
Themajorityofotherexpensesisaccountedforbytaxpaidondividendsfromabroad.
Noteno.11
Income tax
in EUR 000
2015 2014
Profit or loss before tax 45,919 56,727
Tax on dividends from abroad 225 0
Non-deductible expenses 5,039 13,147
Non-taxable revenue -71,314 -36,045
Tax allowance -109 -414
Tax loss -625 -16,915
Total -20,865 16,500
Tax rate - 17%
Income tax - 2,804
Tax on dividends from abroad 88 -
TheKapitalskadruæbaGroupdoesnotprepareaconsolidatedtaxbalancesheet.In2015,
KapitalskadruæbaandModrazavarovalnicad.d.hadnocorporateincometaxliability.
119
IntheManagementboard’sopinionthecalculationoftaxliabilityissuitableandmadeonthe
basisofviewspresentedbelowandinaccordancewiththeopinionsprovidedbytaxconsult-
ants.Itishoweverpossiblethatthecompetenttaxauthoritieswouldadoptadifferentposition
oncertainissues,whichcouldresultinadifferencebetweenthetaxliabilitiesdisclosedinthe
financialstatementsofconsolidatedcompaniesandtheamountassessedbythetaxauthorities.
onthebasisofarticle67a(5)oftheZIPRs1415-C,Kapitalskadruæbain2015creditedeUR19
milliontotheZPIZ(PensionandDisabilityInsuranceInstitute)forannualallowanceforpen-
sioners.Todate,KapitalskadruæbahaspaideUR664,321thousandtotheZPIZ.Thesepay-
mentswererecognisedintheincomestatementunderotherfinancialexpensesandastax
deductibleexpensesinthecalculationofthetaxliability.
Theeffectivetaxrate(astheratiobetweenthecorporateincometaxandprofitorlossbefore
tax)wasnotcalculated,becausetheKapitalskadruæbaGroupdisclosedtaxlossin2015.
Noteno.12
Deferred tax
at31December2015,deferredcorporateincometaxincludedtheitemstatedinthetable
below.
in EUR 000
Balance sheet Income statement
31. Dec. 2015 31. Dec. 2014 2015 2014
Deferred income tax liabilities 44,046 48,408 313 19
Total deferred income tax liabilities 44,046 48,408 313 19
Deferred income tax assets 41,131 45,068 -3,936 10,254
Loss brought forward which can be used as tax allowance
11,624 4,167 7,457 272
Value adjustment of investments 29,394 40,828 -11,434 10,274
Dividend adjustment 33 34 0 -263
Provisions 80 39 41 -29
Total deferred income tax assets 41,131 45,068 -3,936 10,254
Netting of deferred tax assets and liabilities 2,915 3,340 -3,623 10,273
Disclosure of tax loss
in EUR 000
2015 2014
Tax loss as at 31 December of the reporting period 441,084 405,855
Tax loss not considered in the calculation of deferred taxes 415,507 401,688
Tax loss considered in the calculation of deferred taxes 25,577 4,167
TaxlossamountingtoeUR415,507thousanddoesnotcomprisedeferredtaxassets,whereas
taxlossofeUR25,577thousandincludesdeferredtaxassets.Taxlossesaretransferable
withouttimelimitation.
In2015,KapitalskadruæbaandModrazavarovalnicadisclosednocorporateincometaxliabili-
ties,becauseataxlosswasidentifiedfor2015.
120
Disclosure of changes in deferred tax recognised directly in the statement of comprehensive income
in EUR 000
Changes in deferred tax 2015 2014
Balance as at 1 January 48,408 35,380
Changes during the year 4,362 13,028
Balance as at 31 December 44,046 48,408
DeferredtaxliabilitiesofeUR44,046thousandat31December2015aroseonrevaluation
offinancialassetsmeasuredatfairvaluethroughthestatementofcomprehensiveincome.
Noteno.13
Net earnings/loss per share
Thebasicnetearnings/losspershareiscalculatedbydividingthenetprofit/lossattributable
toequityholdersoftheCompanybytheweightedaveragenumberofordinarysharesout-
standingduringtheperiod.Theweightedaveragenumberofordinarysharesoutstandingis
calculatedonthebasisofdataaboutthenumberofordinarysharesoutstanding,takinginto
accountanyacquisitionsanddisposalswithintheperiodandthetimeduringwhichtheshares
participatedinthegenerationofprofit.Dilutednetearnings/losspersharealsoincludesall
potentialordinarysharesthatoriginatedinexchangeablebonds,optionsandfutures.When
calculated,earnings/lossandthenumberofordinarysharesoutstandingareadjustedfor
effectsofalladjustablepotentialordinarysharesthatwouldoccuriftheywereswappedfor
ordinarysharesintheaccountingperiod.
2015 2014
Net profit or loss attributable to holders of ordinary shares of the parent company (000 EUR)
29,351 72,751
Diluted net profit or loss attributable to holders of ordinary shares of the parent company (000 EUR)
29,351 72,751
Weighted average number of ordinary shares for basic net earnings per share
874,235 874,235
Diluted average number of ordinary shares for diluted net earnings per share
874,235 874,235
Net earnings per share (EUR) 33.6 83.3
asat31December2015,theGroupheldnofinancialinstrumentsthatwouldrequireadjust-
mentofeitherthenetprofitorlossortheweightedaveragenumberofordinaryshares.
Noteno.13.1
Profit or loss from discontinued operations
TheresultfromdiscontinuedoperationstotallingeUR403thousandfrom2014referstothe
companiesthatareintendedtobesold.
121
17.3.2 Notestothestatementoffinancialposition
Noteno.14
Intangible assets and long-term deferred costs and accrued revenues
Table30: Changes in intangible assets, and long-term deferred costs and accrued revenues in 2015
in EUR 000
31. Dec. 2015Other long-term deferred costs
and accrued revenues
Cost
Cost as at 1 Jan. 2015 3,352
- Additions 425
- Disposals -64
Cost as at 31 Dec. 2015 3,713
Value adjustment
Value adjustment as at 1 Jan. 2015 2,888
- Disposals, write-offs -64
- Depreciation/amortisation 244
Value adjustment as at 31 Dec. 2015 3,068
Carrying amount
Carrying amount as at 1 Jan. 2015 464
Carrying amount as at 31 Dec. 2015 645
Table31: Changes in intangible assets, and long-term deferred costs and accrued revenues in 2014
in EUR 000
31. 12. 2014Other long-term deferred
costs and accrued revenues
Cost
Cost as at 1 Jan. 2014 3,196
- Additions 156
Cost as at 31 Dec. 2014 3,352
Value adjustment
Value adjustment as at 1 Jan. 2014 2,601
- Depreciation/amortisation 287
Value adjustment as at 31 Dec. 2014 2,888
Carrying amount
Carrying amount as at 1 Jan. 2014 595
Carrying amount as at 31 Dec. 2014 464
122
Noteno.15
Property, plant and equipment
Table32: Changes in property, plant and equipment in 2015
in EUR 000
31. 12. 2015 BuildingsOther plant and
equipment Total
Cost
Cost as at 1 Jan. 2015 10,217 2,670 12,887
- Additions 0 51 51
- Disposals 0 -102 -102
Cost as at 31 Dec. 2015 10,217 2,619 12,836
Value adjustment
Value adjustment as at 1 Jan. 2015 3,037 2,395 5,432
- Disposals, write-offs 0 -102 -102
- Depreciation/amortisation 318 103 421
Value adjustment as at 31 Dec. 2015 3,355 2,396 5,751
Carrying amount
Carrying amount as at 1 Jan. 2015 7,180 275 7,455
Carrying amount as at 31 Dec. 2015 6,862 223 7,085
Table33: Changes in property, plant and equipment in 2014
in EUR 000
31. 12. 2014 BuildingsOther plant and
equipment Total
Cost
Cost as at 1 Jan. 2014 10,217 2,538 12,755
- Additions 0 179 179
- Disposals 0 -47 -47
Cost as at 31 Dec. 2014 10,217 2,670 12,887
Value adjustment
Value adjustment as at 1 Jan. 2014 2,719 2,380 5,099
- Disposals, write-offs 0 -47 -47
- Depreciation/amortisation 318 62 380
Value adjustment as at 31 Dec. 2014 3,037 2,395 5,432
Carrying amount
Carrying amount as at 1 Jan. 2014 7,498 158 7,656
Carrying amount as at 31 Dec. 2014 7,180 275 7,455
123
Noteno.16Investment property
Table34: Changes in investment property in 2015
in EUR 000
31. 12. 2015 Buildings
Cost
Opening balance as at 1 Jan. 2015 18,939
- Acquisitions 123
- Disposals, transfers -22
Closing balance as at 31 Dec. 2015 19,040
Value adjustment
Opening balance as at 1 Jan. 2015 4,097
- Depreciation/amortisation 505
Closing balance as at 31 Dec. 2015 4,602
Carrying amount
Opening balance as at 1 Jan. 2015 14,842
Closing balance as at 31 Dec. 2015 14,438
Thefairvalueofinvestmentpropertydoesnotsignificantlydeviatefromitscarryingamount
asat31December2015.Theestimatedfairvalueofinvestmentpropertywasassessedbased
oninternalvaluation.TheappraisedvalueofinvestmentpropertywaseUR16,020thousand
asat31December2015.Thecarryingamountofinvestmentpropertywascheckedagainst
themarketvalueforsignsofimpairment,ofwhichtherewerenone.
Table35: Changes in investment property in 2014
in EUR 000
31. 12. 2014 Buildings
Cost
Opening balance as at 1 Jan. 2014 18,869
- Acquisitions 70
Closing balance as at 31 Dec. 2014 18,939
Value adjustment
Opening balance as at 1 Jan. 2014 3,596
- Depreciation/amortisation 501
Closing balance as at 31 Dec. 2014 4,097
Carrying amount
Opening balance as at 1 Jan. 2014 15,273
Closing balance as at 31 Dec. 2014 14,842
124
Table36: Rental income investment property and costs related to investment property
in EUR 000
2015 2014
Rental income from investment property 1,051 982
Costs related to investment property 643 747
Information about encumbrances
Kapitalskadruæbaistheco-ownerofinvestmentpropertiesonwhichapledgehasbeen
enteredtosecureliabilitiesofeUR1,000thousand.TheremainingassetsownedbytheGroup
arefreefrommortgages,pledgesorotherencumbrances.
fixedassetsarenotunderfinanceleasenothavetheybeenacquiredforthepurposeof
trading.
Noteno.17
Investments in subsidiaries, associates and joint ventures
Investmentsinsubsidiariesasat31December2015include:
Subsidiary Registered office Equity stake in %
Modra zavarovalnica, d. d. Dunajska cesta 119, Ljubljana 100.00
Steklarska nova Rogaπka Slatina, d. o. o. − in bankruptcy 7
Steklarska ulica 1, Rogaπka Slatina 100.00
astheparentcompany,KapitalskadruæbaconsolidatesModrazavarovalnica.Kapitalska
druæbadoesnotconsolidatethesubsidiarysteklarskanovaRogaπkaslatina,d.o.o.incon-
solidatedfinancialstatements,sincetheintegrationofsubsidiary’sfinancialstatementsin
consolidatedstatementsisnotrelevantforatrueandfairviewofthefinancialstatementsof
theKapitalskadruæbaGroupasawhole.
asat31December2015,theinterestsinthefollowingassociatedcompanieswereheld:
Associated company Registered office Equity stake in %
Casino Maribor, d. d. − in bankruptcy 8 Glavni trg 1, Maribor 20.00
Gio, d. o. o. − in liquidation Dunajska cesta 160, Ljubljana 28.68
Gospodarsko razstaviπËe, d. o. o. Dunajska cesta 18, Ljubljana 29.51
Hit, d. d.9 Delpinova ulica 7a, Nova Gorica 20.32
Kli Logatec, d. d. − in liquidation10 Tovarniπka cesta 36, Logatec 27.70
Loterija Slovenije, d. d. GerbiËeva ulica 99, Ljubljana 25.00
Terme »ateæ, d. d. »ateæ ob Savi, Topliπka cesta 35, Breæice 23.79
Terme Olimia, d. d. Zdraviliπka cesta 24, PodËetrtek 24.79
7 PursuanttotheZfPPIPP,thebankruptcyadministratorremovedsharesfromtheKDDrecords;priortothebankruptcyprocedure,Kapitalskadruæbaheldtheequitystakeasshowninthetableabove.
8 TheshareswereaccordingtotheZfPPIPPdeletedfromtheKssbythereceiver.Priortobankruptcy,Kapitalskadruæbaheldastakepresentedinthetableabove.
9 InHit,d.d.,theCompanyholds20.32%ofvotingrights.Preferencesharesbecamevotingrightsduetonon-paymentofpreferencedividends.
10Kapitalskadruæbaalreadyobtainedfundsfromtheliquidationestate.ThecompanyisexpectedtobedeletedfromtheCompaniesRegisterin2016.
125
Kapitalskadruæbaconsolidatesthefollowingcompaniesintheconsolidatedfinancialstate-
mentsusingtheequitymethod:
�� Hit,d.d.,
�� GospodarskorazstaviπËe,d.o.o.,
�� loterijaslovenije,d.d.,and
�� CinkarnaCelje,d.d.
CinkarnaCelje,d.d.,isanassociateofModrazavarovalnica,andisnotpreparingconsoli-
datedfinancialstatements.
otherassociatedcompaniesarenotconsolidatedusingtheequitymethod,sincetheinte-
grationoftheirfinancialstatementsinconsolidatedfinancialstatementsisnotrelevantfor
atrueandfairviewofthefinancialstatementsoftheKapitalskadruæbaGroupasawhole.
Kapitalskadruæba,d.d.,isnotexposedtoanyrisksarisingfromownershipstakesinsubsidi-
aryandassociatedcompaniesKapitalskadruæba,d.d.,suchasforinstance:
�� provisionoffundsfortheoperations/capitaladequacyofthesubsidiaryorassociate;
�� participationincoveringcontingentliabilitiesofthesubsidiaryorassociatedcompany.
Table37: Changes in investments in associates
in EUR 000
2015 2014
Carrying amount as at 1 Jan. 21,334 13,391
Changes -667 1,557
- Attribution of net profit due to the acquisition of associates using the equity method
1,155 1,203
- Exclusion of dividends -2,232 -836
- Exclusion of revaluation surplus -227 -469
- Impairment/strengthening 637 1,659
Transfer of associates from available-for-sale assets 13,707 6,386
Carrying amount as at 31 Dec. 34,374 21,334
in EUR 000
31. 12. 2015 31. 12. 2014
Shares and interests in associated companies 34,374 21,334
Total 34,374 21,334
Noteno.18
Assets held for sale
in EUR 000
31. 12. 2015 31. 12. 2014
Assets held for sale 6,574 197,739
Total 6,574 197,739
non-currentassetsheldforsaleintheamountofeUR6,574thousandasat31December
2015areheldforsaleinthenext12months.
126
Noteno.19
Financial assets, excluding loans
in EUR 000
Long-term Short-term Total
31. 12. 2015 31. 12. 2014 31. 12. 2015 31. 12. 2014 31. 12. 2015 31. 12. 2014
Shares and interests in associated companies
34,374 21,334 0 0 34,374 21,334
Other shares and interests 675,026 599,281 0 0 675,026 599,281
Other financial assets 221,395 198,593 39,104 46,262 260,499 244,855
Assets held for sale 0 0 6,574 197,739 6,574 197,739
Total 930,795 819,208 45,678 244,001 976,473 1,063,209
financialassetsoftheGroupotherthanloansareclassifiedintooneofthefollowinggroups:
financialassetsatfairvaluethroughprofitorloss,financialassetsheldtomaturity,andavail-
able-for-salefinancialassets.Inaddition,financialassetsarealsoclassifiedasnon-current
andcurrent.
asat31December2015,financialassetsexceptloanswereclassifiedintothefollowing
categories:
in EUR 000
Long-term Short-term Total
31. 12. 2015 31. 12. 2014 31. 12. 2015 31. 12. 2014 31. 12. 2015 31. 12. 2014
Financial assets measured at fair value through profit or loss
49,634 36,080 9,021 16,796 58,655 52,876
Financial assets held to maturity
89,473 62,803 9,004 7,277 98,477 70,080
Available-for-sale financial assets
757,314 698,004 27,653 220,915 784,967 918,919
Investments in associates under the equity method
34,374 21,334 0 0 34,374 21,334
Total 930,795 818,221 45,678 244,988 976,473 1,063,209
Investments in securities
in EUR 000
31. 12. 2015 31. 12. 2014
Financial assets measured at fair value through profit or loss 58,655 52,876
Equity securities 31,910 29,603
Debt securities 26,745 23,273
Financial assets held to maturity 98,477 70,080
Available-for-sale financial assets 819,341 940,253
Equity securities 684,066 797,989
Debt securities 135,275 142,264
Total 976,473 1,063,209
127
Financial assets at carrying amount and fair value as at 31 December 2015
in EUR 000
Asset Carrying amount Fair value
Financial assets at fair value through profit or loss 58,655 58,655
Financial assets held to maturity 98,477 109,744
Available-for-sale financial assets 819,341 824,784
Loans 120,539 120,539
Cash and cash equivalents 44,146 44,146
Total 1,141,158 1,157,868
Financial assets at carrying amount and fair value as at 31 December 2014
in EUR 000
Asset Carrying amount Fair value
Financial assets at fair value through profit or loss 52,876 52,876
Financial assets held to maturity 70,080 81,082
Available-for-sale financial assets 940,253 940,253
Loans 116,812 116,812
Cash and cash equivalents 37,040 37,040
Total 1,217,061 1,228,063
accordingtoitsaccountingpolicy,theKapitalskadruæbaGroupcarriesassetsatfairvalue
whichequalsthemarketvalueoffinancialasset.Thedifferencebetweenthecarryingamount
andfairvalueappearsonfinancialassetshelduntilmaturitythataremeasuredatamortised
cost.Thefairvalueoffinancialassetscomprisingloansandreceivablesalsoequalstheir
amortisedcost.
Changes in securities investments in 2015
in EUR 000
31. 12. 2014 AcquisitionsDisposals,
maturity Revaluation 31. 12. 2015
Financial assets measured at fair value through profit or loss
52,876 40,450 -31,616 -3,055 58,655
Financial assets held to maturity
70,080 33,527 -8,080 2,950 98,477
Available-for-sale financial assets
940,253 62,875 -198,621 14,834 819,341
Total 1,063,209 136,852 -238,317 14,729 976,473
128
Financial assets by type of interest rate as at 31 December 2015
in EUR 000
31. 12. 2015 31. 12. 2014
Investments in debt instruments 260,497 235,617
- Fixed Rate 255,354 229,877
- Variable interest rate 5,143 5,740
Loans and deposits 120,556 150,612
- Fixed Rate 120,556 150,612
- Variable interest rate 0 0
Total 381,053 386,229
Fair value hierarchy as at 31 December 2015
in EUR 000
Level 1 Level 2 Level 3 Total
Financial assets measured at fair value through profit or loss
36,956 17,004 4,695 58,655
Available-for-sale financial assets 678,846 39,208 101,287 819,341
Total 715,802 56,212 105,982 877,996
Level 1
ThisgroupincludestheassetsownedbyModrazavarovalnica,valuedbasedontheCbbT
priceinanactivemarketandvaluationonthebasisoftransactionpriceinanactivemar-
ket.TheassumptiononanactivemarketappliesistheCbbTpricehasbeenquotedforat
leasthalfofthetradingdaysinthepast30daysuntilvaluation.IfthetradingoroTCmarket
isactive,thelastknownCbbTpriceisused,noolderthan15days,forfairvaluemeasure-
ment.IfthetradingoroTCmarketisnotactive,thelastknownCbbTpriceisused,noolder
than90days,forfairvaluemeasurement.IfthelastknownCbbTpriceisolderthanthelast
transactionpriceofthefinancialassetoriftheCbbTpriceisnotavailable,thelastknown
transactionpriceisused,noolderthan90days,forfairvaluemeasurement,inwhichcase
theassumptiononanactivemarketappliesifthetransactionpriceisnotolderthan15days.
Inothercases,thefairvalueofafinancialassetisdeterminedusingavaluationtechnique.
ThisgroupdoesnotincludetheassetsownedbyKapitalskadruæba,d.d.,valuedbasedon
thepricesadoptedfromthebloombergsystem.
Level 2
level2assetsincludetheassetsvaluedbasedoncomparablemarketdata(otherthanquoted
pricesofidenticalassets)obtainedindirectlyordirectlyforanidenticalorsimilarasset;the
basisofvaluationistheyieldcurveofcomparablefinancialassetswithsimilarmaturityand
creditrisk.
Inaddition,level2alsoincludestheinvestmentsownedbyModrazavarovalnica,valued
basedonthestockpriceonaninactivemarket,valuedbasedontheCbbTpriceinaninac-
tivemarketandthevaluationonthebasisoftransactionpriceinaninactivemarket.level2
includesinvestmentsofModrazavarovalnicameasuredusingbenchmarkmarketdata;the
valueoffinancialassetsmeasuredatfairvalueiseUR9,232,322,andtheyincludethebonds
ofsIDbanka,d.d.,andsIJ,d.d.,andtreasurybillsoftheRepublicofsloveniaaswellasthe
129
Rs33governmentbond.ThepriceofsIDbankabondwascalculatedbasedonslovenian
governmentbondsloVen403/22/18.ThevalueoftheRs33bondwascalculatedbased
onyieldtomaturityofacomparableliquidsloveniangovernmentbondsloReP21/403/22.
ThepricesofbondsofsIJ,d.d.,andtreasurybillsoftheRepublicofsloveniawerecalculated
onthebasisoftheaverageyieldtomaturityofcomparableliquidbondsandtreasurybills
respectively.ThevaluationmodelappliedtothebondsofsIJ,d.d.,includesthebondsof
ThyssenKruppaG,arcelorMittals.a.andsmurfitKappaGroupPlC,andthemodelapplied
tothetreasurybilloftheRepublicofsloveniaincludesthetreasurybillsoftheRepublicof
Italy,PortugalandtheKingdomofspain.level2alsoincludesinvestmentsofModrazavarov-
alnicainthesharesofthecompanieselektroGorenjskaKranj,elektroMaribor,elektroCelje
andelektroPrimorskatotallingeUR2,228,571.Theyarevaluedbasedonthemarketdataof
comparablecompanieslistedonthestockmarket.ThetotalcapitalapproachandtheeV/
ebITDamultiplierwereappliedinthevaluation.
level2comprisesinvestmentsofKapitalskadruæbainthesharesofelektroGorenjska,d.d.,
elektroPrimorska,d.d.,elektroCelje,d.d.,elektroljubljana,d.d.,elektroMaribor,d.d.,
andGeoplin,d.o.o.,whosefairvaluehasbeenestimatedbasedonthemarketcomparison
methodusingthecomparablelistedcompanies.adjustedmultiplierswereused.Thesecond
groupdoesnotincludetheassetsownedbyKapitalskadruæba,d.d.,valuedbasedonthe
pricesadoptedfromthebloombergsystem.
Level 3
level3includestheassets,thefairvalueofwhichisdeterminedusingownvaluationmodels
takingintoaccountsubjectivevariablesthatarenotpubliclyavailableonmarkets.Moreo-
ver,level3alsoincludesdebtinstrumentsownedbyModrazavarovalnica,valuedusinga
valuationtechnique(takingintoaccountlevel3inputs),debtsecurities,theCbbTpriceof
whichisnotavailableonan(in)activemarketandwhosevalueisdeterminedusingavalua-
tiontechnique(takingintoaccountlevel3inputs)aswellasdebtinstrumentsvaluedonthe
basisoftheinputprovidedbythirdparties.level3includesthesharesofsomeslovenian
companiesownedbyModrazavarovalnica,inthetotalamountofeUR1,685,109.Themajor
aretheinvestmentsinHit,d.d.,elektroljubljana,d.d.,andCerta,d.d.Thevalueofthesaid
investmentswasprimarilysetbythepresentvalueofexpectedfreecashflowmodel.Thefair
valueoftheinvestmentinHit,d.d.,waseUR780,656asat31December2015.Thevalua-
tionwasmadebasedona7.8%discountrate.ThefairvalueofthesharesofCerta,d.d.,was
eUR280,566asat31December2015;thevaluationwasmadebytakingintoaccounta2%
long-termgrowthrateanda15%discountrate.Thefairvalueoftheinvestmentinelektro
ljubljana,d.d.,waseUR260,126asat31December2015;thevaluationwasmadebytaking
intoaccountan8.56%discountrateanda2.5%long-termgrowthrate.level3alsoincludes
depositsofModrazavarovalnicaintheamountofeUR34,030,013andcommercialpapers
Mel08andMel09totallingeUR3,443,468.Thepricesofcommercialpapersarecalculated
basedonthetheoretical(amortised)valueofcommercialpapersinviewoftheinterestrate
applicabletotherelevantpurchase.In2015,Modrazavarovalnicareclassifieddepositsand
commercialpaperstolevel3,butthishadnoeffectontheoperatingresult.Theinvestment
insloveniangovernmentbondsRs33wasreclassifiedfromlevel3tolevel2.
Thefairvaluevaluationoflevel3assetsownedbyKapitalskadruæbawasmadebyapply-
ingtheincome-basedapproach,thediscountedfreecashflowmethod,andtheasset-based
approachaccordingtotheregularliquidationmethod.
Moreover,level3fairvalueincludesallassetswherefairvalueofdebtfinancialinstruments
isdeterminedusingthebloombergGenericprices(bGn)andthebloombergValuationser-
vicesprices(bVal).Thismethodologyandassumptionsofpricecalculationarenotavailable
tothepublic,soalltheseassetsareclassifiedintolevel3fairvaluehierarchy.Thefairvalue
130
ofcertainsharesisdeterminedusingthevaluationmodelstakingintoaccountsubjective
variablesthatarenotpubliclyavailableonmarkets.Certaindataforvaluationareobtained
formthebloombergsystemandotherfinancialsources,whereasinsomecasesanimpor-
tantsourceisthedataanddocumentsaboutthepastandexpectedfutureperformancepro-
videdbycompanies.
ThefairvalueofordinarysharesofHit,d.d.,wasestimatedbyapplyingtheincome-based
approach,andusingthediscountedfreecashflowmethod.Theestimatedfreecashflowwas
discountedatan8.80%discountrate.Theremaininggrowthrateofnormalisedfreecash
flowis2%.TheestimatedfairvalueofthesharesofPomurskamlekarna,d.d.,iseUR0.00,
becausethecompanyisincompulsorysettlementproceedingsandthefinancialrestruc-
turingplanenvisagesdeletionofownershipofexistingshareholders.Thefairvalueofthe
equitystakeinGospodarskorazstaviπËe,d.o.o.,wasestimatedbyapplyingtheincome-
basedapproach,usingthediscountedfreecashflowmethod,andtheasset-basedapproach
tocompanyvaluation,accordingtotheregularliquidationmethod.Theestimatedfreecash
flowwasdiscountedatan7.8%discountrate.Theremaininggrowthrateofnormalisedfree
cashflowis2%.asignificantiteminthevaluationofGospodarskorazstaviπËe,d.o.o.,is
thevalueofthecompany’srealestate,whichwasclassifiedasunnecessaryproperty.The
estimatedvalueofthisrealestateissetusingtheregularliquidationmethod.Theliquida-
tionperiodisexpectedtolastfor24monthsandrisk-freeinterestrateusedfordiscounting
is1.7%.ThefairvalueofthesharesofPerutninaPtuj,d.d.,wasestimatedbyapplyingthe
income-basedapproach,andusingthediscountedfreecashflowmethod.Theestimatedfree
cashflowwasdiscountedatan9.87%discountrate.Theremaininggrowthrateofnormal-
isedfreecashflowis2%.ThefairvalueofthesharesofTermeolimia,d.d.,wasestimated
byapplyingtheincome-basedapproach,andusingthediscountedfreecashflowmethod.
Theestimatedfreecashflowwasdiscountedatan8.46%discountrate.Theremaining
growthrateofnormalisedfreecashflowis2%.ThefairvalueofthesharesofTalum,d.d.,
wasdeterminedusingtheincome-basedmethod,bymeansofthemethodofdiscountedfree
cashflow,partlycorrectedbytheestimatedsharevalueusingthecomparablelistedcompa-
niesmethod.Thediscountrateforfreecashflowintheincome-basedvaluationmethodis
9.90%.Theremaininggrowthrateofnormalisedfreecashflowis2%.Thefairvalueofthe
sharesofTKIHrastnik,d.d.,wasestimatedbyapplyingtheincome-basedapproach,and
usingthediscountedfreecashflowmethod.Theestimatedfreecashflowwasdiscountedat
an9.07%discountrate.Theremaininggrowthrateofnormalisedfreecashflowis2%.The
estimatedfairvalueoftheholdinginGIo,d.o.o.−inliquidation,wasestimatedbyapplying
theasset-basedapproachaccordingtotheregularliquidationmethod.Thefairvalueofthe
equitystakeinelanInventa,d.o.o.,wasestimatedbyapplyingtheincome-basedapproach,
usingthediscountedfreecashflowmethod.Theestimatedfreecashflowwasdiscountedat
an9.47%discountrate.Theremaininggrowthrateofnormalisedfreecashflowis1.5%.The
investmentsinthesharesofModrazavarovalnicaandloterijaslovenije,d.d.,aredisclosed
atcost,becauseasufficientlyreliablevaluationisnotpossibleduetocertainexpectedlegis-
lativeamendmentsthatcouldsignificantlyinfluencetheestimatedvalueofthecompanies.
Fair value hierarchy as at 31 December 2014
in EUR 000
Level 1 Level 2 Level 3 Total
Financial assets measured at fair value through profit or loss
40,395 10,176 2,305 52,876
Available-for-sale financial assets 705,047 13,222 221,984 940,253
Total 745,442 23,398 224,289 993,129
131
Level 1
level1comprisesassetswhosefairvalueisdeterminedbasedonquotedpricesofidentical
assetsonanactivemarket.ThisgroupincludestheassetsofModrazavarovalnica,valued
basedonthepricesobtainedfromthebloombergsystem,ifthemarketvalueverification
modelindicatedthatmodelpricesaresetonthebasisofmarketdata.Thepricesobtained
fromthebloombergsystem,arenotdirectlythepricesatwhichtheinsurancecompany
could,onthevaluationdate,sellsecurities,buttheirapplicationprovidesforobjectiveevalu-
ationandthepricereflectstheactualmarkettransactionsandisanappropriateindicatorof
thepricethattheinsurancecompanywouldgainuponthesaleofthebondonthemarket.
Theproviders’pricesdonotmateriallydifferfromthepriceapplied.assetswereclassified
intolevel1,ifthepricewasentirelybasedonmarketdataandinmorethan50%ondirectly
enforceablequotations.
ThisgroupdoesnotincludetheassetsownedbyKapitalskadruæba,d.d.,valuedbasedon
thepricesadoptedfromthebloombergsystem.
Level 2
level2assetsincludetheassetsvaluedbasedoncomparablemarketdata(otherthanquoted
pricesofidenticalassets)obtainedindirectlyordirectlyforanidenticalorsimilarasset;the
basisofvaluationistheyieldcurveofcomparablefinancialassetswithsimilarmaturityand
creditrisk.
Moreover,level2alsoincludestheinvestments indebt instrumentsownedbyModra
zavarovalnica,valuedbasedonthedatafromthebloombergsystem,forwhichthesaid
marketvalueverificationmodelindicatedthatthepricewasmainlysetonthebasisofmar-
ketdataandinlessthan50%basedondirectlyenforceablequotations.Investmentsindebt
instrumentsofModrazavarovalnica,classifiedintolevel2basedonthemarketvalueveri-
ficationmodelaccountforeUR8,118,341.on31December2014,theseinvestmentswere
transferredfromlevel1.Thistransferdidnothaveaneffectontheprofit/loss.amongthe
investmentsofModrazavarovalnica,thebCe14bondwasvaluedateUR2,053,337onthe
basisofcomparablemarketdata.ThepriceofthebCe14bondiscalculatedaccordingtothe
discountrateofbondsfromacomparableindustry,creditratingandcurrency.Thediscount
rateiscalculatedbasedonaveragecreditspreadsofcomparablebondsandthecompara-
bleeuroswapcurvetakingintoaccountthemodifiedtermofthebCe14bond.level2also
includesassetsinvestmentsofModrazavarovalnica,d.d.,inthesharesofthecompanies
elektroGorenjskaKranj,elektroMaribor,elektroCeljeandelektroPrimorskatotallingeUR
1,856,877.Theyarevaluedbasedonthemarketdataofcomparablecompanieslistedonthe
stockmarket.ThetotalcapitalapproachandtheeV/ebITDamultiplierwereappliedinthe
valuation.on31December2014,theseinvestmentsownedbyModrazavarovalnicawere
reclassifiedfromlevel3tolevel2.Thisreclassificationdidnothaveaneffectontheprofit/
loss.InadditiontoallthesaidinvestmentsownedbyModrazavarovalnica,level2also
includescommercialpapersGen02andIMl01wortheUR4,172,352.bothinvestmentsare
ownedbyModrazavarovalnicaThepricesarecalculatedbasedonthetheoretical(amortised)
valueofcommercialpapersinviewoftheinterestrateapplicabletotherelevantpurchase.
ThesecondgroupdoesnotincludetheassetsownedbyKapitalskadruæba,d.d.,valued
basedonthepricesadoptedfromthebloombergsystem.
Thevaluationoflevel2fairvaluewasappliedtocertainbondsownedbyKapitalskadruæba,
d.d.,accordingtothemarketcomparisonvaluationmethod,involvingacomparisonwiththe
comparablelistedbonds.Thevaluationofcertainlevel2shareswasmadeusingthemethod
involvingacomparisonwiththecomparablelistedcompanies.
132
Level 3
level3includestheassetswhosefairvaluewasassessedbasedonownvaluationmodels,
takingintoaccountsubjectivevariablesthatarenotpubliclyavailableonmarkets,andthose
investmentsindebtinstrumentsofModrazavarovalnica,whichhavebeenvaluedonthebasis
ofdatafromthebloombergsystem,wherethesaidmarketvalueverificationmodelindicated
thatthepriceswerebasedonunobservableinputs.
onthebasisofthemarketvalueverificationmodel,level3comprisedbondsofsomeslove-
nianbanksandilliquidsloveniangovernmentbondsownedbyModrazavarovalnica,totalling
eUR7,777,094.on31December2014,thesebondsweretransferredfromlevel1.Thisreclas-
sificationdidnothaveaneffectontheprofit/loss.level3alsoincludesthesharesofsome
sloveniancompaniesownedbyModrazavarovalnica,inthetotalamountofeUR1,552,128.
ThemajoraretheinvestmentsinHit,d.d.,elektroljubljana,d.d.,andCerta,d.d.Thevalueof
thesaidinvestmentswasprimarilysetbythepresentvalueofexpectedfreecashflowmodel.
ThefairvalueoftheinvestmentinHit,d.d.,waseUR780,656asat31December2014.The
valuationwasmadebasedona7.8%discountrate.ThefairvalueofthesharesofCerta,d.d.,
waseUR280,566asat31December2014;thevaluationwasmadebytakingintoaccounta
2%long-termgrowthrateanda15%discountrate.Thefairvalueoftheinvestmentinelektro
ljubljana,d.d.,waseUR260,126asat31December2014;thevaluationwasmadebytaking
intoaccountan8.56%discountrateanda2.5%long-termgrowthrate.
Thefairvaluevaluationoflevel3assetsinvolvingthesharesownedbyKapitalskadruæba,d.
d.,wasmadebyapplyingtheincome-basedapproach,thediscountedfreecashflowmethod,
andtheasset-basedapproachaccordingtotheregularliquidationmethod.
Inadditiontoalltheseassets,level3fairvalueincludesallassetsownedbyKapitalska
druæba,d.d.,wherefairvalueofdebtfinancialinstrumentsisdeterminedusingthebloomb-
ergGenericprices(bGn)andthebloombergValuationservicesprices(bVal).Thismethod-
ologyandassumptionsofpricecalculationarenotavailabletothepublic,soalltheseassets
ownedbyKapitalskadruæba,d.d.,areclassifiedintolevel3fairvaluehierarchy.
ThefairvalueofsharesownedbyKapitalskadruæba,d.d.,isdeterminedusingthevalua-
tionmodelstakingintoaccountsubjectivevariablesthatarenotpubliclyavailableonmar-
kets.Certaindataforvaluationareobtainedformthebloombergsystemandotherfinancial
sources,whereasinsomecasesanimportantsourceisthedataanddocumentsaboutthe
pastandexpectedfutureperformanceprovidedbycompanies.
In2014,assetsownedbyKapitalskadruæba,d.d.,whosefairvaluewascalculatedbasedon
theassumptionsstatedbelowwereimpairedonthebasisofthevaluationsmade.Thefair
valueofordinarysharesofHIT,d.d.,wasestimatedbyapplyingtheincome-basedapproach,
andusingthediscountedfreecashflowmethod.Theestimatedfreecashflowwasdis-
countedatan8.6%discountrate.Theremaininggrowthrateofnormalisedfreecashflowis
2%.ThefairvalueofthesharesofPomurskemlekarne,d.d.,wasestimatedbyapplyingthe
income-basedapproach,andusingthediscountedfreecashflowmethod.Theestimated
freecashflowwasdiscountedatan8.9%discountrate.Theremaininggrowthrateofnor-
malisedfreecashflowis2%.ThefairvalueoftheequitystakeinGospodarskorazstaviπËe,
d.o.o.,wasestimatedbyapplyingtheincome-basedapproach,usingthediscountedfree
cashflowmethod,andtheasset-basedapproachtocompanyvaluation,accordingtothe
regularliquidationmethod.Theestimatedfreecashflowwasdiscountedatan7.8%discount
rate.Theremaininggrowthrateofnormalisedfreecashflowis2%.asignificantiteminthe
valuationofGospodarskorazstaviπËe,d.o.o.,isthevalueofthecompany’srealestate.The
valuationofrealestatewasmadebyusingtheincome-basedmethod,theincomecapitali-
sationapproachandthedevelopmentmethod.Thedirectsalescomparisonapproachwas
alsousedinthevaluationofrealestate.Thediscountrateof8.71%wasappliedunderthe
133
incomecapitalisationapproach.Thediscountratesappliedinthedevelopmentmethodwere
10.19%,8.71%and7.64%.ThefairvalueofthesharesofelektroGorenjska,d.d.,wasesti-
matedbyapplyingthemarketcomparisonvaluationmethod,involvingacomparisonwith
thecomparablelistedcompanies.ThefairvalueofthesharesofelektroPrimorska,d.d.,was
estimatedbyapplyingthemarketcomparisonvaluationmethod,involvingacomparisonwith
thecomparablelistedcompanies.ThefairvalueofthesharesofPDP,d.d.,wasestimatedby
applyingtheasset-basedapproachaccordingtotheregularliquidationmethod.Thecompa-
niesownedbyPDP,d.d.,werevaluedbyapplyingtheincome-basedapproach,andusing
thediscountedfreecashflowmethod.ThefairvalueofthesharesofCimos,d.d.,wasesti-
matedbyapplyingtheasset-basedapproachtocompanyvaluation.Compulsorysettlement
proceedingswereinitiatedagainstthecompanyon3June2014.Thereisahighprobability
thattheexistingshareholderswillbeexpropriatedinthescopeofthecompulsorysettlement
proceedings.ThereportontheoperationsoftheinsolventdebtorCimos,d.d.,showsthatin
2014thecompanycontinuedoperatingatalossandthecompany’sequityasat30novem-
ber2014waseUR-131.7million.
Table38: Effective interest rates by asset group
2015 2014
Financial assets held to maturity 3.37% 4.60%
Financial investments in loans and deposits 5.16% 1.83%
Noteno.20
Loans to others
in EUR 000
Long-term Short-term Total
31. 12. 2015 31. 12. 2014 31. 12. 2015 31. 12. 2014 31. 12. 2015 31. 12. 2014
Loans to others 59,359 9,380 61,180 107,432 120,539 116,812
Total 59,359 9,380 61,180 107,432 120,539 116,812
asat31December2015,loansbyKapitalskadruæbatoothersconstituteddepositswith
abanka,d.d.,Gorenjskabanka,d.d.,Hypoalpe-adria-banka,d.d.,novaKreditnabanka
Maribor,d.d.,novaljubljanskabanka,d.d.,ljubljana,sberbank,d.d.,UniCreditbanka,d.
d.,Delavskahranilnica,d.d.,andHranilnicalon,d.d.
asat31December2015,loansbyModrazavarovalnicatoothersconstituteddepositswith
banksinslovenia.
Noteno.21
Operating receivables
in EUR 000
Long-term Short-term Total
31. 12. 2015 31. 12. 2014 31. 12. 2015 31. 12. 2014 31. 12. 2015 31. 12. 2014
Operating trade receivable 0 0 1,227 1,660 1,227 1,660
Operating receivables due from others
103 53 4,917 724 5,020 777
Total 103 53 6,144 2,384 6,247 2,437
134
eUR103thousandofnon-currentoperatingreceivablesofKapitalskadruæbaduefrom
othersrepresenteUR67thousandpaidintothereservefundforthemaintenanceofreal
estate,receivablesfromacompanyincompulsorysettlementproceedingsequallingeUR
34thousand,andeUR2thousandofloansgrantedtobuyersofformerstate-ownedapart-
ments,whichKapitalskadruæbaobtainedundertheDenationalizationactandsoldunder
theHousingact.
short-termoperatingtradereceivablesofeUR1,227thousandrelatetooperatingreceivables
fromcustomersofKapitalskadruæbaequallingeUR819thousandandoperatingreceivables
fromcustomersofModrazavarovalnicad.d.totallingeUR408thousand.
short-termoperatingreceivablesfromothersofeUR4,917thousandrelatetooperating
receivablesfromothersofKapitalskadruæbaequallingeUR2,043thousandandoperating
receivablesfromothersofModrazavarovalnicatotallingeUR2,874thousand.
TheGrouphasnovalueadjustmentsofreceivables.
TheGrouphasnocollateralisedreceivables.
TheGroup’sreceivablesarenotsubjecttomaterialrisk.
Breakdown of operating trade receivables by maturity
in EUR 000
31. 12. 2015 Outstanding Up to 30 daysFrom 31 to
60 daysFrom 61 to
90 daysFrom 91 to
180 daysFrom 181 to
365 days
1,227 1,203 1 1 0 0 22
Noteno.22
Cash and cash equivalents
in EUR 000
31. 12. 2015 31. 12. 2014
Bank balances and cash on hand 44,129 1,952
Call deposit 17 35,088
Total 44,146 37,040
Noteno.23
Equity
31. 12. 2015 31. 12. 2014
Share capital (000 EUR) 364,810 364,810
Number of ordinary shares 874,235 874,235
TheGrouphasnotreasuryshares.ThesharecapitalofeUR364,810thousandisdividedinto
874,235ordinary,registered,non-parvalueshares.eachsharehasthesameinterestandthe
attributedamountinthesharecapital.
135
Noteno.24
Capital surplus
in EUR 000
Capital surplus
1. 1. 2015 215,953
Increase in capital surplus 460
31. 12. 2015 216,413
In2015,thecapitalsurplusincreasedbyeUR460thousandonaccountofadditionalassets
receivedinaccordancewiththeownershipTransformationofCompaniesact.asat31
December2015,capitalsurplustotalledeUR216,413thousand.
Noteno.25
Revenue reserves
asat31December2015,theKapitalskadruæbaGroupreportednootherrevenuereserves.
Noteno.26
Financial liabilities
asat31December2015,theKapitalskadruæbaGrouphadnofinancialliabilities.
Noteno.27
Operating liabilities
in EUR 000
Long-term Short-term Total
31. 12. 2015 31. 12. 2014 31. 12. 2015 31. 12. 2014 31. 12. 2015 31. 12. 2014
Operating liabilities to suppliers
0 0 3,412 6,169 3,412 6,169
Operating liabilities from advances
12 6 0 6 12 12
Payables to the state 0 0 131 2,792 131 2,792
Other operating liabilities
36 12 562 520 598 532
Total 48 18 4,105 9,487 4,153 9,505
long-termoperatingliabilitiesfromadvancesintheamountofeUR12thousandrelateto
securitydepositsfromthelesseeofbusinesspremisesofKapitalskadruæba.
otherlong-termoperatingliabilitiesofModrazavarovalnicaintheamountofeUR36thou-
sandcompriseliabilitiesforthepaymentofvariableremunerationoftheManagement
boardmembers.
short-termoperatingliabilitiesintheamountofeUR4,105thousandcompriseliabilities
todomesticandforeignsuppliers,liabilitiesfromadvancesreceivedandothershort-term
operatingliabilitiesmainlyincludingliabilitiestoemployees,thestateandothershort-
termliabilities.
136
in EUR 000
31. 12. 2015Maturity of up to 1 year 1 to 2 years 2 to 5 years Over 5 years Total
Operating liabilities to suppliers 3,412 0 0 0 3,412
Operating liabilities from advances 0 0 12 0 12
Payables to the state 131 0 0 0 131
Other operating liabilities 562 36 0 0 598
Total 4,105 36 12 0 4,153
Noteno.28
Liabilities included in disposal groups
in EUR 000
31. 12. 2015 31. 12. 2014
Liabilities included in disposal groups 0 92,784
liabilitiesincludedindisposalgroupstotallingeUR92,784thousandfrom2014comprise
liabilitiesfromnon-currentassetsheldforsaleinthenext12months.
Noteno.29
Provisions and long-term accrued costs and deferred revenue
in EUR 000
Provisions for pensions and similar obligations
Other provisions
Technical provisions Total
1. 1. 2015 315 10,657 127,263 138,235
Newly established during the year 17 7,813 12,237 20,067
Utilised provisions -8 0 0 -8
Reversal of provisions 0 -11 0 -11
31. 12. 2015 324 18,459 139,500 158,283
In2015,theKapitalskadruæbaGroupmadeprovisionsforseverancepayonretirementandjubi-
leeawardsintheamountofeUR17thousandandusedeUR8thousandofprovisions.at2015
year-end,provisionsforterminationbenefitsandjubileeawardsamountedtoeUR324thousand.
Provisionsforterminationbenefitsandjubileeawardsarecalculatedonthebasisofexpected
employeefluctuation,yearsofserviceandexpectedyearsuntilretirement,takingintoaccount
individualandcollectiveemploymentcontractsaswellastheCompany’sinternalregulations.
In2015,theKapitalskadruæbaGroupcreatedeUR4,993thousandofprovisionsfornon-
achievementofguaranteedreturn,eUR497thousandofprovisionsforcontingentliability
arisingfromIndemnityagreement,eUR524thousandofprovisionsfortestingtheadequacy
ofprovisions,andprovisionsintheamountofeUR1,799thousandforthedeficitofModra
zavarovalnicaKsPPsassets,whichisnotdisclosedinotheroperatingexpenses.
ReversalofotherprovisionsintheamountofeUR11thousandreferstotheprovisionsfor
onerouscontractsofKapitalskadruæba.InlinewiththeprudenceprincipletheGroupestab-
lishesprovisionsforlegalactionstartedagainstitandlegaldisputes,onthebasisofthebest
estimateofrecoverability.
137
asat31December2015,thetechnicalprovisionsofModrazavarovalnica,d.d.,comprised
mathematicalprovisionsoftheKsPPs(GuaranteefundofthefirstPensionInsurancefund)
andtheKsMR(GuaranteefundModrarenta)intheamountofeUR139,500thousand,of
whichmathematicalprovisionsoftheKsPPstotaleUR99,579thousandandoftheKsMR
eUR39,921thousand.
Table39: Present gross value of future payments of the KS PPS and the KS MR
in EUR 000
Types of payments 31. 12. 2015 31. 12. 2014
KS PPS 96,520 95,602
KS MR 39,920 27,230
Total 136,440 122,832
TotalpresentgrossvalueoffuturepaymentsofalltypesofpensionannuitiesoftheKsPPs
deviatesfromthemathematicalprovisionsoftheKsPPs,whichamounttoeUR98,735thou-
sand,bytheamountoftheprovisionsfortheequalisationofyieldexperienceintheamount
ofeUR2,215thousand.
ThetotalpresentgrossvalueoffuturedisbursementsofalltypesofKsPPspensionannui-
tiesstoodateUR96,520thousandasat31December2015.Thecalculationofthevalue
offuturedisbursementsusesannuitytablesDaV2004Randthestatutorytechnicalinter-
estrateamountingto1%.anypersoninsuredwhoacquirestherighttoannuitycanselect
oneofavailableannuityproducts,thusexercisinghis/herrightandfinalisethemethodof
enjoymentoftheright.anypersoninsuredwithmorethan2,000pointsontheirinsurance
policycanchoosebetweenpensionannuityforlifeandpensionannuitywithguaranteed
paymentperiodof5,10or15years.Ifthepersoninsureddiesbeforetheexpiryofthe
guaranteedpaymentperiod,theannuitiesarepaidtothepersonappointedbytheinsured
person(beneficiary)orhisorherheirs.apersoninsuredholdinglessthan2,000pointscan
choosetoreceiveamonthlypensionannuityoraone-offpaymentofthepensionannu-
ity,whileaninsuredpersonholdingbetween2,001and5,000pointscanopttoreceivean
annualpensionannuity.
MathematicalprovisionsoftheModrarentaGuaranteefundarecalculatedpursuanttothe
Insuranceact,technicalstandardsandtechnicalbases.Mathematicalprovisionsforthe
annuityinsuranceproductarecalculatedprospectively,separatelyforeachinsurancecon-
tract.GermanannuitytablesDaV1994Rwereappliedinthecalculation.
annuityinsurancemaybetakenoutinanumberofformats.TheclassicModrarentaispaid
outmonthlyfromtheeffectivedateofannuityinsurancetotheendoftheinsuredperson’s
lifeandcannotbeinherited.TheclassicModrarentawithguaranteeispaidoutmonthlyfrom
thebeginningofthevalidityofannuitytotheendoflife.Intheeventofaninsuredperson’s
deathpriortotheexpiryoftheguaranteeddisbursementperiod,theannuityispaidtotheir
beneficiaryorheiruntiltheexpiryoftheguaranteedperiod.
acceleratedModrarentawithfullguaranteeispaidoutfromtheeffectivedateofannuity
insuranceuntiltheendoftheinsuredperson’slife.Duringtheguaranteeddisbursement
period,theannuityishigherandispaidoutmonthly,afterwhichitconvertstoannualpay-
mentsofthesameamount.Intheeventofaninsuredperson’sdeathpriortotheexpiryof
theguaranteeddisbursementperiod,theannuityispaidtotheirbeneficiaryorheiruntilthe
expiryoftheguaranteedperiod.
138
acceleratedModrarentawithlimitedguaranteeispaidoutfromthebeginningofthevalid-
ityofannuitytotheendoflife.Theannuityishigherduringmonthlypayment,afterwhich
itconvertstoannualpaymentsofeUR12.Intheeventofaninsuredperson’sdeathpriorto
theexpiryoftheguaranteeddisbursementperiod,theannuityispaidtotheirbeneficiaryor
heiruntiltheexpiryoftheguaranteedperiod.Theguaranteedperiodisayearshorterthan
theperiodofmonthlypayments.
Liability adequacy
Modrazavarovalnicacheckstheadequacyofliabilitiesarisingfromtheconcludedinsurance
contractsorthesufficiencyofestablishedmathematicalprovisionsbyperformingthelaT
−liabilityadequacyTest.Thesechecksarelimitedtoannuityinsurancecontracts.Thetest
involvesthesettingofthebestliabilityestimateasthesumofthepresentvalueofexpected
cashflows(paymentsofannuitiesandinsurancecompany’scosts).Thisestimateiscom-
paredtothevalueofmathematicalprovisionsdeterminedaccordingtotherulesstatedin
insurance-technicalbasesfortherespectiveinsurance.
Theliabilityadequacytestcarriedoutperindividualinsurancecontractbytakingintoaccount
themonthlydynamicsreliedonthefollowingassumptions:
�� theexpectedmortalitywassetaccordingtoGermanannuitymortalitytablesD1994R,
which,giventhepastexperience,suitablyindicatetheactualmortality;
�� earlyterminationswerenotexpected,astheyarenotpossibleaccordingtotheprovisions
ofinsurancecontracts;
�� theexpectedcostsequaltheaccruedcosts;
�� thediscountratewasdeterminedbasedontheyieldcurveofsloveniandebtsecurities.
TheliabilityadequacyTestasat31December2015showedthatmathematicalprovisions
forKsPPsareadequate,whereasadeficitofeUR524thousandwasdeterminedforKsMR.
Change in interest rates/return
Table40: Change in interest rates/return for the KS PPS as at 31 December 2015
in EUR 000
Change in returnIncrease in return
by 0.25 percentage pointDecrease in return
by 0.25 percentage point
Change in liabilities (provisions) -2,928 3,084
Table41: Change in interest rates/return for the KS PPS as at 31 December 2014
in EUR 000
Change in returnIncrease in return
by 0.25 percentage pointDecrease in return
by 0.25 percentage point
Change in liabilities (provisions) -2,940 3,099
Table42: Change in interest rates/return for the KS MR as at 31 December 2015
in EUR 000
Change in returnIncrease in return
by 0.25 percentage pointDecrease in return
by 0.25 percentage point
Change in liabilities (provisions) -519 539
139
Table43: Change in interest rates/return for the KS MR as at 31 December 2014
in EUR 000
Change in returnIncrease in return
by 0.25 percentage pointDecrease in return
by 0.25 percentage point
Change in liabilities (provisions) -227 233
Change in mortality
Table44: Change in mortality as at 31 December 2015 for KS PPS
in EUR 000
Change in mortalityIncrease in mortality
probability by 10%Decrease in mortality
probability by 10%
Change in liabilities (provisions) -3,194 3,626
a10%increaseinmortalityprobabilitywouldresultinadecreaseinliabilitiesbyeUR3,194
thousand.Thechangeintheamountofliabilitiesduetothechangeinmortalitywascalcu-
latedbasedontheDaV2004Rannuitytables.
Table45: Change in mortality as at 31 December 2014 for the KS PPS
in EUR 000
Change in mortalityIncrease in mortality
probability by 10%Decrease in mortality
probability by 10%
Change in liabilities (provisions) -3,093 3,509
a10%increaseinmortalityprobabilitywouldresultinadecreaseinliabilitiesbyeUR3,093
thousand.Thechangeintheamountofliabilitiesduetothechangeinmortalitywascalcu-
latedbasedontheDaV2004Rannuitytables.
Table46: Change in mortality as at 31 December 2015 for KS MR
in EUR 000
Change in mortalityIncrease in mortality
probability by 10%Decrease in mortality
probability by 10%
Change in liabilities (provisions) -244 272
a10%increaseinmortalityprobabilitywouldresultinadecreaseinliabilitiesbyeUR244
thousand.Thechangeintheamountofliabilitiesduetothechangeinmortalitywascalcu-
latedbasedontheDaV1994Rannuitytables.
Table47: Change in mortality as at 31 December 2014 for the KS MR
in EUR 000
Change in mortalityIncrease in mortality
probability by 10%Decrease in mortality
probability by 10%
Change in liabilities (provisions) -126 137
a10%increaseinmortalityprobabilitywouldresultinadecreaseinliabilitiesbyeUR126
thousand.Thechangeintheamountofliabilitiesduetothechangeinmortalitywascalcu-
latedbasedontheDaV1994Rannuitytables.
140
Off-balance sheet receivables
Inseptember2015,accordingtotheCommissionDecisionsa.26379of19september2012,Kapitalskadruæbareceivedfromelan,d.o.o.,repaymentofstateaidintheamountofeUR6,954thousandandrecogniseditasassetandrevenueintheincomestatement.TheCom-panypostedoff-balancesheetliabilitytoelan,d.o.o.,intheamountofeUR6,457thousand,forthecontingentliabilityarisingfromtherepaymentoftherefundedstateaidthatwouldhappeniftheGeneralCourtoftheeuropeanUniondeclaredthesaiddecisionnullandvoid.
17.3.3 Managingrisksarisingfromfinancialassets
allriskstowhichtheGroupisexposed,andtheriskmanagementmeasuresandcriteria,aredescribedinchapter17.2accountingpolicies.ItisestimatedthattheGroupisnotexposedtocredit,market(interestrate,currency,price)andliquidityriskarisingfromfinancialassets.
Creditrisk
Creditriskisrelatedtoinvestmentsindebtinstruments(investmentsinbonds,treasurybills,commercialpapers,certificatesofdeposit,deposits,cashassets)andentailsthepossibilityofinvestmentsbeingonlypartlyrepaidornotatall.assets’andbusinesspartners’creditrat-ingisdeterminedbyratingsassignedbystandard&Poor’s,fitchandMoody’s,andin-houseanalyses.Thehighestexposureequalsthebookvalueoffinancialinstruments.equitysecuri-
tiesareexemptfromtheanalysis,becausetheydonotentaildirectcreditrisk.
Table48: Exposure of financial assets to credit risk, excluding any collateral as at 31 December 2015
in EUR 000
Financial asset group
Secure investments − high rating of
the borrower
Medium secure investments −
medium rating of the borrower
Less secure investments Total
Financial assets at fair value through profit or loss
778 12,909 13,059 26,746
Financial assets held to maturity 20,155 76,212 2,111 98,478
Available-for-sale financial assets 11,423 102,602 21,251 135,276
Loans 0 800 119,739 120,539
Cash and cash equivalents 0 0 44,146 44,146
Total 32,356 192,523 200,305 425,184
Table49: Exposure of financial assets to credit risk, excluding any collateral as at 31 December 2014
in EUR 000
Financial asset group
Secure investments − high rating of
the borrower
Medium secure investments −
medium rating of the borrower
Less secure investments Total
Financial assets at fair value through profit or loss
542 11,626 11,104 23,273
Financial assets held to maturity 13,417 56,462 201 70,080
Available-for-sale financial assets 16,142 107,622 18,499 142,264
Loans 0 19,830 96,982 116,812
Cash and cash equivalents 16 2,540 34,485 37,040
Total 30,117 198,080 161,272 389,469
141
financialassetswereclassifiedintothestatedgroupsbasedoncreditratings.secureassets
compriseallassetswiththecreditratingaaatoa-,mediumsecureassetsincludeassets
withthecreditratingbbb+dobbb-,whereaslesssecureassetscomprisetheassetswith
creditratingunderbbb-andassetswithoutacreditratingassignedbyarenownedrating
agency.lesssecureassetsmainlyincludeassetsofslovenianissuers.
loansrepresentdepositsinbanksinslovenia.Depositsareclassifiedintotheratingclassof
thebankwithwhichtherespectivedeposithasbeenmade.
Table50: Geographical concentration of credit exposure of financial assets
in EUR 000
Region 31. 12. 2015 31. 12. 2014
Slovenia 323,394 307,063
Other countries 101,790 82,406
Total 425,184 389,469
Theshareoffinancialassetsexposedtocreditriskinsloveniadecreasedfrom79%to76%
in2015.
Currencyrisk
Table51: Currency structure of financial assets
in EUR 000
Currency 31. 12. 2015 31. 12. 2014
Assets denominated in EUR 994,345 1,080,161
Assets denominated in USD 141,636 130,898
Assets denominated in other currencies 5,177 6,002
Total 1,141,158 1,217,061
on31December2015,87.1%offinancialassetsweredenominatedineuros,12.4%inUs
dollarsand0.5%inothercurrencies.
Table52: Currency risk of financial assets as at 31 December 2015
in EUR 000
USD exchange rate fluctuation in % Impact on the income statement Impact on capital
+/- 10% +/- 428 +/- 13,736
Table53:Currencyriskoffinancialassetsasat31December2014
in EUR 000
USD exchange rate fluctuation in % Impact on the income statement Impact on capital
+/- 10% +/- 159 +/- 12,931
Interestraterisk
Interestrateriskisrelatedtoinvestmentsthatrespondtochangesinmarketinterestrates.
Theseincludeassetsofwhichrevenuesarerelatedtothevariableinterestrateaswellas
assetsofwhichinterestincomeisrelatedtoafixedinterestrate,buttheirmarketvalue
142
changesuponthechangeinthemarketinterestrates.owingtothedecreaseininterestrates
theassetswereexposedtoreinvestmentrisk.Theexposuretointerestrateriskisregularly
measuredbythemodifieddurationindicator.
Table54: Sensitivity analysis of investments according to changes in market interest rates as at 31 December 2015 −
change in interest rates by 50 basis points
in EUR 000
Financial asset groupChange in
interest rateSensitivity of
interest incomeImpact on fair value Total
Financial assets at fair value through profit or loss
+/- 0.5% +/- 3 -/+ 598 -/+ 595
Financial assets held to maturity +/- 0.5% +/- 0 +/- 0 +/- 0
Available-for-sale financial assets +/- 0.5% +/- 4 -/+ 3,959 -/+ 3,955
Loans and receivables +/- 0.5% +/- 0 +/- 0 +/- 0
Total +/- 7 -/+ 4,557 -/+ 4,550
Table55: Sensitivity analysis of investments according to changes in market interest rates as at 31 December 2014 −
change in interest rates by 50 basis points
in EUR 000
Financial asset groupChange in
interest rateSensitivity of
interest incomeImpact on fair value Total
Financial assets at fair value through profit or loss
+/- 0.5% +/- 0 -/+ 1,121 -/+ 1,121
Financial assets held to maturity +/- 0.5% +/- 0 +/- 0 +/- 0
Available-for-sale financial assets +/- 0.5% +/- 12 -/+ 4,888 -/+ 4,876
Loans and receivables +/- 0.5% +/- 0 +/- 0 +/- 0
Total +/- 12 -/+ 6,009 -/+ 5,997
Thecalculationofthesensitivityofinterestincomewasmadebytakingintoaccountthe
investmentssubjecttovariableinterestrate,whereastheimpactonfairvaluewascalculated
bytalkingintoaccounttheinvestmentssubjecttofixedinterestrate.Ifmarketinterestrates
changeby50basispoints,thevalueofthefund’sassetswouldchangebyeUR4,550thou-
sandasat31December2015.
Marketrisk
Marketriskrepresentsthepossibilityofthevalueofequitysecuritiestochangeduetothe
changesinmarketindexesandmarketpricesofspecificequityinstruments.Thebetaindi-
catoriscalculatedforequitysecurities,asameasureofsystematicrisk.Thevalueatrisk
indicator(VaR)isalsomonitored.
Table56: Market risk of the equity securities portfolio as at 31 December 2015
in EUR 000
Index change in % Impact on the income statement Impact on capital
+/- 10% +/- 1,707 +/- 57,794
143
Table57: Market risk of the equity securities portfolio as at 31 December 2014
in EUR 000
Index change in % Impact on the income statement Impact on capital
+/- 10% +/- 1,861 +/- 48,160
Thetabletakesintoaccounttheinvestmentsinequityinstrumentsexcludinginvestment
couponsrelatedtobonds.Theeffectintheincomestatementisevidentunderequitysecu-
ritiesmeasuredatfairvaluethroughprofitorloss,andtheeffectonequityisevidentunder
investmentsinafsequityinstruments.
Table58: Financial instruments in terms of marketability
in EUR 000
Financial instrument 31. 12. 2015 31. 12. 2014
Securities traded on the regulated market 926,909 905,978
Financial assets at fair value through profit or loss 52,887 46,640
Financial assets held to maturity 98,477 70,080
Available-for-sale financial assets 775,545 789,258
Securities not traded on the regulated market 49,564 157,231
Financial assets at fair value through profit or loss 5,768 6,236
Financial assets held to maturity - 0
Available-for-sale financial assets 43,796 150,995
Total 976,473 1,063,209
attheendof2015,assetstradedonregulatedstockmarketsaccountedfor95%offinancial
instrumentsor78%ofallassetsoftheGroup.available-for-salefinancialassetsnottraded
onregulatedmarketincludenon-marketableshares,stakesandinvestmentcoupons.
Liquidityrisk
liquidityriskrepresentsthepossibilityofliabilitiesnotbeingsettleduponmaturity.Riskis
managedbydailymonitoringoftheinflowsandoutflows,andprecisematchingofmaturity
ofassetsandliabilities.asat31December2015,theGrouprecordedatotalofeUR1,038,701
thousandofsurplusofexpectednon-discountedcashinflowsoveroutflows.
Table59: Expected actual non-discounted cash flows as at 31 December 2015
Item Up to 1 yearFrom 1 to
5 years Over 5 years No maturity
in EUR 000
Total
Investments in securities 42,311 131,630 129,752 703,981 1,007,674
- at fair value through profit or loss 8,164 14,893 3,745 31,910 58,711
- held-to-maturity 10,793 37,448 70,822 0 119,062
- available-for-sale 23,354 79,289 55,186 672,071 829,901
Loans and deposits 63,818 57,996 0 0 121,814
Cash and cash equivalents 44,146 0 0 0 44,146
Operating receivables 6,144 103 0 0 6,247
144
Item Up to 1 yearFrom 1 to
5 years Over 5 years No maturity
in EUR 000
Total
Total assets 156,418 189,729 129,752 703,981 1,179,881
Operating liabilities 4,105 48 0 0 4,153
Financial liabilities 0 0 0 0 0
Liabilities of PPS and MR Guarantee Funds
14,157 38,991 83,879 0 137,027
Total liabilities 18,262 39,039 83,879 0 141,180
Difference 138,156 150,691 45,873 703,981 1,038,701
Table60: Expected actual non-discounted cash flows as at 31 December 2014
in EUR 000
Item Up to 1 yearFrom 1 to
5 years Over 5 years No maturity Total
Investments in securities 49,463 106,435 131,675 828,561 1,116,133
- at fair value through profit or loss 7,209 13,974 4,216 29,603 55,002
- held-to-maturity 7,536 27,812 51,035 0 86,384
- available-for-sale 34,717 64,649 76,424 798,958 974,748
Loans and deposits 110,165 9,743 0 0 119,908
Cash and cash equivalents 37,040 0 0 0 37,040
Operating receivables 2,384 53 0 0 2,437
Total assets 199,052 116,231 131,675 828,561 1,275,519
Operating liabilities 9,487 18 0 0 9,505
Financial liabilities 0 0 0 0 0
Liabilities of PPS and MR Guarantee Funds
12,550 32,543 92,905 0 137,999
Total liabilities 22,037 32,561 92,905 0 147,504
Difference 177,014 83,670 38,770 828,561 1,128,015
shares,stakesandinvestmentcouponsaredisclosedunderitemwithoutmaturity.
145
17.4 oTHeRDIsClosURes
InformationontheManagement
ThenamesofthemembersoftheManagementboardandotherbodiesarestatedinthe
introductorypartoftheannualReport,underthesectionCorporateProfileofKapitalska
druæbaandModrazavarovalnica.nooperatingreceivablesandlong-orshort-termliabilities
tothemembersoftheManagementboardandsupervisoryboardofKapitalskadruæbawere
recordedin2015.
ReceiptsofthemembersoftheManagementBoard,SupervisoryBoardandstaffwithmanagementcontractsofKapitalskadruæba
In2015,remunerationspaidforthecarryingoutofresponsibilitiesanddutiesofmembers
oftheManagementboard,supervisoryboardandemployeeswithindividualcontractsof
employmentforwhichthetariffsectionofthecollectiveagreementdoesnotapply,amounted
toeUR888thousand.
Remunerationsbycategoryofbeneficiariesarepresentedinthetablebelow.
Table61: Remunerations by category of beneficiaries in 2015
in EUR 000
Category of beneficiaries Amount
Members of the Management Board 284
Members of the Supervisory Board 122
Employees with management contract 482
Total 888
noadvances,loansorcollateralwereapprovedbytheCompanyin2015.
ReceiptsofthemembersofthemanagementandsupervisorybodiesofKapitalskadruæba
ReceiptsofthemembersoftheManagementboardareregulatedbytheZsDH-1.Pursuant
toarticle51(5)oftheZsDH-1,thesameconditionsandcriteriaasapplytothemembersof
theManagementboardofslovenskidræavniholding,d.d.,applytothemembersofthe
ManagementboardofKapitalskadruæbabymutatismutandisapplicationofarticle46(7)
oftheZsDH-1,thereceiptsoftheManagementboardmembersaresetbythesupervi-
soryboard,withoutconsideringtheprovisionsoftheactgoverningtheremunerationof
managersofcompanieswithmajorityownershipheldbytheRepublicofsloveniaorself-
governinglocalcommunities.TheemploymentcontractsmadewiththeManagement
boardmembersareconsistentwiththelegalbasis.ThebasicpayoftheManagement
boardmembersissetasamultipleof5oftheaveragegrosssalarypaidintheKapital-
skadruæbaGroupinthepreviousbusinessyear,butitmaynotexceed95%ofthebasic
payofthePresidentoftheManagementboardofslovenskidræavniholding,d.d.,which
ispublished.allbonusesareincludedinthebasicpay.Thebasicpayisrevisedannually
whendataontheaveragesalaryintheKapitalskadruæbaGroupinthepreviousyearare
published.Therevisedbasicsalaryisapplicablefrom1Julyofthecurrentyear.Thebasic
payofthemembersoftheManagementboardofKapitalskadruæbawascalculatedand
paidin2015inlinewiththeaforementionedcriteria.Pursuanttothecontract,themem-
bersoftheManagementboardareentitledtoattendtrainingathomeandabroadofup
to15daysperyearpaidbyKapitalskadruæba,asspecifiedintheadoptedbusinessand
financialPlanofKapitalskadruæba.
146
Table62: Receipts of the members of the Management Board of Kapitalska druæba in 2015
EUR
Name and surname Fixe
d in
com
e
Varia
ble
inco
me
Bonu
ses
Cost
re
imbu
rsem
ent
Insu
ranc
e pr
emiu
ms
(PDP
Z)
Part
icip
atio
n in
pro
fit
Optio
ns
Oth
er re
war
ds
Oth
er p
aym
ents
Tota
l
Bachtiar Djalil (President)
125,114 8,285 55 2,355 2,819 - - - 791 139,419
Dr Boris ÆnidariË (Member since 23 November 2015)
2,830 - - 61 165 - - - 85 3,141
Anja Strojin ©tampar, MSc. (Member until 30 November 2015)
118,858 15,597 750 3,094 2,819 - - - 791 141,909
Total 246,802 23,882 805 5,510 5,803 - - - 1,667 284,469
fixedincomeincludesgrosssalary.Variableincomeincludesperformancebonus,which
equalsupto30%oftheannualbasicgrosssalaryforthebusinessyear,takingintoaccount
theperformancecriteria.Costreimbursementsincludereimbursementofmeal/travel/accom-
modationexpenseanddailyallowance.bonusesincludecollectiveaccidentinsurancepre-
miumsand/oracompanycar.Insurancepremiums(PDPZ)representpaymentsforvoluntary
supplementarypensioninsurance.otherpaymentsincludepayforannualleave.
Table63: Receipts of the members of the Supervisory Board of Kapitalska druæba in 2015
EUR
Name and surname Fixe
d in
com
e
Varia
ble
inco
me
Cost
re
imbu
rsem
ent
Insu
ranc
e pr
emiu
ms
Fees
Part
icip
atio
n in
pro
fit
Optio
ns
Oth
er re
war
ds
Oth
er p
aym
ents
Tota
l
Samo Lozej (Chairman of the Supervisory Board)
20,790 - - - - - - - - 20,790
Cirila Surina Zajc (Member of the Supervisory Board since 1 February 2015 and Deputy Chair of the Supervisory Board since 23 November 2015)
16,607 - 864 - - - - - - 17,471
Dr Boris ÆnidariË11 (Member of the Supervisory Board since 1 February 2015 and Deputy Chair of the Supervisory Board from 5 March 2015 to 22 November 2015, Member of the Management Board since 23 November 2015)
17,247 - 59 - - - - - - 17,306
Aldo Ternovec (Member of the Supervisory Board and Deputy Chair of the Supervisory Board until 31 January 2015)
3,199 - 83 - - - - - - 3,282
Aleksander Mervar, MSc. (Member of the Supervisory Board)
18,875 - 433 - - - - - - 19,308
11WhileDrborisænidariËisoccupyingtheofficeofthememberofManagementboard,hisfunctioninthesupervisoryboardissus-pended.
147
Name and surname Fixe
d in
com
e
Varia
ble
inco
me
Cost
re
imbu
rsem
ent
Insu
ranc
e pr
emiu
ms
Fees
Part
icip
atio
n in
pro
fit
Optio
ns
Oth
er re
war
ds
Oth
er p
aym
ents
Tota
l
Stanislav SeniËar (Member of the Supervisory Board)
19,526 - 722 - - - - - - 20,248
Ladislav RoæiË, MSc. (Member of the Supervisory Board)
20,640 - - - - - - - - 20,640
Ana Bilbija (Member of the Supervisory Board until 31 January 2015)
3,007 - 104 - - - - - - 3,111
Total 119,891 - 2,265 - - - - - - 122,156
fixedreceiptsofthesupervisoryboardmembersincludepaymentfortheperformanceof
functioninthesupervisoryboard(basicandextrapayforparticipationinthesupervisory
boardcommittees)andsessionfeesforattendingthemeetingsofthesupervisoryboardand
itscommittees.Costreimbursementsincludereimbursementoftravelexpenses.
In2015,themembersofmanagementandsupervisorybodiesreceivednoreceiptsfortasks
performedinsubsidiariesofKapitalskadruæba.
ReceiptsofthemembersoftheManagementBoard,SupervisoryBoardandstaffwithmanagementcontractsofModrazavarovalnica
In2015,theremunerationreceivedbythemembersoftheManagementboard,supervisory
boardandemployeeswithindividualemploymentcontractswhoarenotsubjecttothetariff
partofthecollectiveagreementtotalledeUR652thousand.
In2015,Modrazavarovalnicaapprovednoadvancepaymentsorloanstothemembersofthe
managementandsupervisorybodiesnorassumedanyliabilitiesontheirbehalf.
Table64: Gross receipts in 2015 by category, Modra zavarovalnica
in EUR 000
Category of beneficiaries Amount
Members of the Management Board 315
Members of the Supervisory Board 77
Employees with management contract 260
Total 652
ReceiptsofthemembersofthemanagementandsupervisorybodiesofModrazavarovalnica
Table65: Receipts of the members of the Management Board of Modra zavarovalnica in 2015
EUR
Name and surname Fixed incomePast due
payments Bonuses
Allowance for annual
leaveCost reim-bursement
Insurance premiums
(PDPZ) Total
Borut Jamnik 118,858 34,989 1,871 791 4,833 2,819 164,161
Matija Debelak 112,915 31,907 99 791 2,290 2,819 150,821
148
fixedremunerationincludesgrosssalaries.outstandingpaymentsincludepart2ofthe
variableremunerationfor2011and2012andpart1ofthevariableremunerationfor2014.
Reimbursementsofcostsincludemealand/ortravelallowancesand/orotherreimburse-
mentsoftravelexpenses(dailyallowances,mileageexpenses,costsofovernightstays,
parking,taxi).bonusesincludecompanycarandbonusesarisingfromcollectiveaccident
insurance.Insurancepremiums(PDPZ)representpaymentsforvoluntarysupplementary
pensioninsurance.
Table66: Receipts of the members of the Supervisory Board of Modra zavarovalnica in 2015
EUR
Name and surname Fixed income Monthly feeCost
reimbursement Total
Branimir ©trukelj 3,905 0 0 3,905
Aleπ Groznik 3,630 11,495 466 15,591
Bojan ZupanËiË 2,805 10,450 0 13,255
Dario RadeπiË 3,905 10,450 1,066 15,421
Goran Bizjak 3,630 10,450 277 14,357
Marino Furlan 3,080 10,450 604 14,134
Thefixedincomecomprisesthefeesforattendanceatsupervisoryboardmeetings.
Monthlyremunerationincludesthemonthlyreceiptfortheperformanceofthesuper-
visoryboardmemberfunction.Costreimbursementsincludereimbursementoftravel
expenses.
Related-partytransactions
In2015,theKapitalskadruæbaGroupmadenosignificanttransactionswithitsrelatedparties
thatwereconcludedunderotherthannormalmarketconditions.
Disclosurerelatedtothepensionschemes
on6november2015,KapitalskadruæbareceivedfromtheMinistryoflabour,family,social
affairsandequalopportunitiestheDecisionapprovingamendmentsandsupplementsto
theoccupationalPensionInsurancescheme,no.1032-5/2013-26,dated30october2015.
TheamendmentsandsupplementstotheoccupationalPensionInsuranceschemereferto
decreasingthemanagementfeeintermsofnetvalueoftheassetsundermanagement.The
provisionsoftheoccupationalPensionInsuranceschemewillstartbeingappliedwiththe
entryintoforceoftheRulesonManagementofthefundforCompulsorysupplementary
PensionInsuranceschemeoftheRepublicofslovenia,whichdependsontheacquisitionof
approvalofthesecuritiesMarketagency,butnolaterthanin90daysoftheservingofthe
decisionapprovingthepensionschemeamendmentstothefundmanager.on4December
2015,KapitalskadruæbafiledwiththesecuritiesMarketagencyarequestforapprovalofthe
amendmentstotheRulesonManagementofthefundforCompulsorysupplementaryPen-
sionInsuranceschemeoftheRepublicofslovenia.
on1January2016theactamendingandsupplementingthePensionandDisabilityInsur-
anceactenteredintoforce(officialGazetteoftheRs,no.102/2015;ZPIZ-2b).article38(2)
oftheZPIZ-2bstipulatesthatKapitalskadruæbahastoaligntheoccupationalPension
InsuranceschemeandtheoccupationalPensionPaymentschemewiththeprovisions
oftheZPIZ-2bwithintwelvemonthsoftheentryintoforceoftheZPIZ-2b.Untilthenew
pensionschemestartsbeingapplied,theprovisionsofthepensionschemesvalidatthe
timeofentryintoforceoftheZPIZ-2bshallbeapplied.Whenthenewpensionscheme
149
isestablished,theGuaranteefundoftheCompulsorysupplementaryPensionInsurance
fund(KssoDPZ)shallbeliquidatedandoccupationalpensionsshallbepaidaspartialsur-
rendervalue.
Significanteventsafterthedateofthestatementoffinancialposition
on28January2016,theGeneralCourtoftheeuropeanUniondecidedtofullyrejectthe
claimoftheRepublicofsloveniatodeclaretheCommissionDecisionsa.26379of19sep-
tember2012onthemeasuresinfavourofelan,d.o.o.,nullandvoid.Withthisjudgement
thecontingentliabilityofKapitalskadruæbaceaseduntiltherepaymentoftherefundedstate
aid,whichiswhyKapitalskadruæbaderecognisedoff-balancesheetliabilitytoelan,d.o.o.,
intheamountofeUR6,457thousand.
TheamendmenttothePensionandDisabilityInsuranceactZPIZ-2benteredintoforceon1
January2016,introducingchangesalsoforKapitalskadruæba.accordingtotheamendment,
occupationalpensionsshallbepaiddirectlyfromtheCompulsorysupplementaryPension
Insurancefund,whiletheGuaranteefundoftheCompulsorysupplementaryPensionInsur-
ancefundshallceasetoexist.UponthetransferofthefundsfromKssoDPZtosoDPZ,the
managementfeechargedbyKapitalskadruæbashallincrease,becausenomanagementfee
waschargedforKssoDPZ.
on2february2016,theCreditors’Committeeconsistingofordinarycreditorsadopteda
resolutionthatthesharecapitalofPomurskemlekarne,d.d.,decreasefromeUR1.4million
tozeroandthatallexistingsharesbedeleted.Theresolutionwillbecomefinalaftercompul-
sorysettlementhasbeenfinallyapproved.
on31December2015,Kapitalskadruæbaheldanequityinvestmentinthesharesofsava,d.
d.,valuedateUR255thousand.on12february2016,theCreditors’Committeeofsava,d.
d.,adoptedaresolutionthatthesharecapitalofsava,d.d.,decreasefromeUR14.1millionto
zeroandthatallexistingsharesbeinvalidated.Theresolutionwillbecomefinalaftercompul-
sorysettlementhasbeenfinallyapproved.Ifthedecisionapprovingcompulsorysettlement
becomesfinal,Kapitalskadruæbawilllosethefullvalueofinvestmentinsharesofsava,d.d.
sincetheendof2015untilthepreparationoftheannualReport,Modrazavarovalnica
recordednosignificanteventsthatcouldinfluenceitsfinancialstatementsfor2015.
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