ANNUAL REPORT OF THE PETROL GROUP AND PETROL D.D., LJUBLJANA, 2020
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Petrol, Slovenska energetska družba, d.d., Ljubljana
Dunajska cesta 50, 1000 Ljubljana
Registration number: 5025796000
Companies Register entry: District Court of Ljubljana, entry number: 1/05773/00
Share capital: EUR 52,240,977.04 EUR
VAT ID: SI80267432
Telephone: +386 (0)1 47 14 232
www.petrol.eu, https://www.petrol.si/
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Pursuant to Article 60 a of the Companies Act, members of the Management Board and the Supervisory Board of Petrol d.d., Ljubljana represent that the Annual Report of the Petrol Group and Petrol d.d., Ljubljana for the year 2020, including the corporate governance statement and the non-financial statement, has been prepared and published in accordance with the Companies Act, the Financial Instruments Market Act and International Financial Reporting Standards as adopted by the EU.
As provided in Article 110 of the Financial Instruments Market Act, members of the Management Board of Petrol d.d., Ljubljana, which comprises Nada Drobne Popović, President of the Management Board, Matija Bitenc, Member of the Management Board, Jože Bajuk, Member of the Management Board, Jože Smolič, Member of the Management Board, and Zoran Gračner, Member of the Management Board and Worker Director, declare that to their best knowledge and belief:
Nada Drobne Popović President of the Management Board |
Matija Bitenc Member of the Management Board
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Jože Bajuk Member of the Management Board
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Jože Smolič Member of the Management Board
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Zoran Gračner Member of the Management Board and Worker Director
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Ljubljana, 11 March 2021
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Number of service stations | Volume of petroleum products sold | |
EBITDA | Net debt/EBITDA | |
Net profit | Breakdown of the Petrol Group’s investments in 2020 |
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Dear shareholders, business partners and co-workers,
The year 2020 is behind us. It was a year marked by the Covid-19 pandemic, which had a profound impact on our way of life. Do you remember when you popped to Petrol to buy tickets to a concert of your favourite band or ski passes, when you met your business partners or friends at a “Petrol bar”, or when you not only refuelled your car at Petrol’s point of sale on your way to a trip to the seaside or the mountains, but also had the best coffee-to-go and a delicious sandwich from our ample Petrol Fresh range? What we took for granted until the beginning of March 2020 has suddenly become beyond reach or accessible in quite different ways.
In the first two months of 2020, the Petrol Group's operations continued without disruption and according to plans. In March 2020, however, we faced the emergence of the worst pandemic in the past 100 years. Fighting an unknown disease has become part of our everyday life. At Petrol, the spreading of the coronavirus has been closely monitored since it first appeared, and all measures were taken as necessary in terms of the organisation of work to ensure business continuity. Initially, our primary concern was to ensure the health of our customers and employees. We set up a coronavirus coordination team, which is in charge of all necessary measures for protecting staff and of preparing plans, policies, directives and notices that have been introduced and implemented since the outbreak of the Covid-19 pandemic, in line with the spreading of the infection. Petrol's priority was also to ensure operations at all sites with minimum disruption, thus allowing for important supply of energy products across the country. We can say this has been fully achieved. Apart from certain restrictions (reduced working hours at some service stations), there has been no disruption in the energy-product supply. In addition to the pandemic, Croatia, which is Petrol’s second largest sales market, was hit by two earthquakes, the first in Zagreb in March and the second in Petrinja at the end of 2020. Petrol’s service stations are built in accordance with all regulations on earthquake resistant structures and were not damaged; we merely suffered a power outage and information network failure, and stock fell off the shelves. However, some employees sustained greater damage, and we came to their aid in solidarity.
Although 2019 was a record year, the Petrol Group set even more ambitious goals for 2020. The business in the first two months of 2020 was proof that we are on the right track. The business environment deteriorated considerably, however, as the pandemic began. Already when drawing up plans at the end of 2019, the Petrol Group was aware of the possibility that despite careful preparation, informed business decisions, quick response to changes and an efficient risk management system external factors may arise in the business environment which are beyond its direct control and may pose a risk or a threat when it comes to meeting the targets. Because a natural disaster of such magnitude and the resulting economic crisis could not had been predicted, the Petrol Group did not meet its planned operating targets in 2020.
To fight the pandemic, countries have introduced various measures, many of which have been restricting movement and thus negatively affecting petroleum product sales, which is our core business. In 2020 the Petrol Group generated EUR 3.1 billion in sales revenue or 30 percent less than in 2019. Gross profit stood at EUR 426.9 million, a decrease of 10 percent relative to 2019. EBITDA totalled EUR 166.6 million and was 15 percent lower than in 2019. Net profit for 2020 stood at EUR 72.3 million, which was 31 percent less than in 2019.
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The Petrol Group was in a very good business and financial condition before the pandemic, and it was confirmed that Petrol is adequately prepared for the crisis, having an extensive sales network, various distribution channels and different energy products. Due to the pandemic-related crisis we decided to review business activities in detail, both in terms of profitability and cost efficiency, which will help us lay even stronger foundations for our business in the future. Despite the difficult business conditions, we continued to pursue our strategic objective of ensuring stable operations, also by maintaining an appropriate debt to EBITDA ratio, which stood at 2.0 in 2020. Our financial stability is also recognised by Standard & Poor's Rating Services, which reaffirmed our "BBB-" long-term credit rating, our "A-3" short-term credit rating and our "stable" credit rating outlook in June 2020.
A shareholder policy that is based on a long-term maximisation of returns for shareholders is one of the cornerstones of Petrol’s development strategy. The Management Board of Petrol d.d., Ljubljana advocates a stable long-term dividend policy, which fits best the Petrol Group’s long-term development targets. Despite the pandemic, Petrol d.d., Ljubljana paid out the highest dividends to date in 2020, amounting to EUR 22.0 per share (gross).
An important milestone in 2020 was the deregulation of petroleum product pricing from 1 October onwards in Slovenia, which is still Petrol’s largest sales market.
Shopping habits are changing and we are responding to these changes. The onset of the pandemic has accelerated trade development trends. All the digital solutions we have developed, from the online shop and contactless payment to the mobile application Na poti (On the Go), are solutions that recorded high growth in 2020. We adapt the product and service range to customer demands and at the same time constantly inform them about the novelties we have introduced. We keep up with the times, offering services such as parcel collection at our points of sale as well as deliveries.
In the second half of 2020, we began drafting Petrol Group's strategy for the period 2021 – 2025, which was adopted at the end of January 2021 and is more thoroughly described in this report. The environment in which the Petrol Group operates is facing important changes. Energy transition towards a low-carbon company and the development of new technologies are transforming established ways of how energy products are produced, sold and used. Petrol is committed to making a transition to green energy and is making significant investments to achieve it. While co-creating opportunities brought about by the energy transition we will also continue to supply the market with hydrocarbons. The strategy is our response to the challenges faced by the energy and trade sectors. The vision of the Petrol Group is to become an integrated partner in the energy transition offering an excellent user experience. Thanks to the transformation of the operational model and new competences acquired, the Petrol Group will put the customer in the centre, providing it with an excellent user experience across traditional and digital channels.
Together we are creating a low-carbon future. We see the bigger picture: a safe and healthy home for us and future generations. Our mission is to pave the way to that goal with you. That is why Petrol develops the most advanced fuels with fewer emissions, provides for environmentally friendly mobility, co-creates energy-efficient cities, businesses and homes, and increases the share of renewable energy sources. We build partnerships based on the trust in all who share this planet with us.
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By investing in renewable energy sources, we contribute to the achievement of binding European goals. Renewable energy sources are crucial for the future of all of us, seeing as they enable meeting the key energy needs of mankind. What is more, they will not be depleted in the long run and they have a smaller negative impact on the environment and thus on the future of our planet. In 2020 we invested in the construction of the Ljubač wind farm, which will provide “green sustainable energy” for 20 thousand average households. It is scheduled to start operating in the first half of 2021.
In line with its commitment to sustainable progress, Petrol is assuming a key role in the breakthrough of mass electromobility in Slovenia and Croatia. In 2020 we continued to develop and expand the electric vehicle charging infrastructure.
The health crisis that triggered the economic crisis has changed our daily lives immensely. This was also experienced by Petrol’s employees. When the pandemic broke out, the primary concern was to protect the health of customers and employees. Good organisation was crucial in securing uninterrupted operation of all points of sale. Other employees worked from home if possible and they were equipped to do so in a very short time, taking into account all safety protocols. The pandemic was a surprise but at the same time it brough to the fore the good, selfless response of our employees. Everyone contributed to the best of their ability to ensure that the Petrol Group operated as smoothly as possible.
The year 2020 was also marked by preparations to acquire two companies which fit Petrol's orientation towards comprehensive energy supply. In January 2021, we finalised the acquisition of a 100-percent interest in E 3 d.o.o., an electricity supplier, after suspensive conditions had been fulfilled. To strengthen our core business and presence in the region, we also launched the process of acquiring Crodux Derivati Dva d.o.o. In January 2021, an acquisition agreement was signed and the transaction will be completed following the fulfilment of suspensive conditions, which include obtaining approvals from the relevant competition authorities. This is the largest transaction of Petrol d.d., Ljubljana in the past 10 years and represents the most significant one-time increase in the number of points of sale in the Petrol Group's history.
The year 2020 was extremely challenging. We are proud to have overcome the crisis and at the same time lay even firmer foundations for our business in the future. We will emerge from the crisis in an even better shape. And we know how to achieve this.
Nada Drobne Popović
President of the Management Board
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Our mission
Through a broad range of energy products, comprehensive energy solutions and digital approach, we are putting the user at the centre of our attention. We want to become the first choice for shopping on the go. Together with our partners, we create solutions for a simpler transition to cleaner energy sources. We are building a green energy future in a decisive and active manner, increasing the value for our customers, shareholders and society over the long term.
Our promise
Through energy transition, we create a green future and make a significant contribution to protecting our environment.
Our vision
To become an integrated partner in the energy transition, offering an excellent user experience.
Our values
At Petrol, we feel a strong sense of responsibility towards our employees, customers, suppliers, business partners, shareholders and the society as a whole. We meet their expectations with the help of motivated and business-oriented staff, we adhere to the fundamental legal and moral standards in all markets where we operate, and we protect the environment.
Strategy of the Petrol Group for the period 2021 – 2025
On 28 January 2021, the Supervisory Board of Petrol d.d., Ljubljana approved the Strategy of the Petrol Group for the period 2021 – 2025. Ensuring business growth and increasing the profitability of operations while maintaining the commitment to sustainable development are the main principles underpinning the preparation and implementation of the strategic plan.
The Petrol Group's strategy for the period 2021 – 2025 is an overarching development document defining the path to a successful future based on the Group's vision, goals and strategic business plan.
The environment in which the Petrol Group operates is facing important changes. Energy transition towards a low-carbon company and the development of new technologies are transforming established ways of how energy products are produced, sold and used. Petrol is committed to making a transition to green energy and is making significant investments to achieve it. While co-creating opportunities brought about by the energy transition we will also continue to supply the market with hydrocarbons.
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The new strategy of the Petrol Group defines clear targets for implementing our vision to become an integrated partner in the energy transition, offering an excellent user experience. This helps us focus on our core business, which it to supply energy products, as it is this area where we still see great potential and opportunities in connection with the energy transformation.
Creating and cultivating relationships with customers is our priority and we will continue to strengthen our sales network in the region as a result. Thanks to new digital channels, a broader range of energy products and personalised offer, we will be even closer to our customers, helping them to make a transition from traditional energy sources to cleaner renewable energy. Our aim is to become a key link in a broader ecosystem by offering energy sources that are adapted to and co-shape the market. For this reason, we will increase operational efficiency to free up additional funds for investments in renewable energy production.
The Petrol Group recognises the importance of sustainable development. The transition to a low-carbon energy company, partnership with employees and the social environment, and the circular economy constitute the Petrol Group's business commitments in this strategic period. As a partner to industry, public sector and households, Petrol is assuming a leading role in achieving the environmental goals.
Through continuous development of fuels, we will actively contribute to reducing emissions. At the same, we will help to reduce the carbon footprint of both the Petrol Group and our customers by pursuing clear sustainable policies.
Thanks to improved internal processes, new competences and empowered employees, we will be even more proactive in addressing the current and future needs of our customers in the energy industry and adapt our operations to the user, who is at the centre of our attention. We want to become the first choice for shopping on the go.
In this strategic period, we will remain present in all markets, focusing on:
We will work to remain the first choice for energy transition projects in the region by offering integrated services with high added value. We will develop and strengthen our presence in the supply and sale of natural gas and electricity, in the sale of liquefied petroleum gas and in energy efficiency projects. Renewable electricity production, where we will position ourselves to become a major supplier in SE Europe, plays a particular role in the energy transition.
The development of new solutions in the field of electric mobility and mobility services constitutes an important pillar of Petrol's sustainable and innovative business. When it comes to mobility, the Petrol Group focuses on two segments. The first segment is linked to the charging infrastructure, which means setting up, managing and maintaining the infrastructure for the charging of electric vehicles as well as providing the charging service. The second segment is comprised of mobility services, such as operating leases, fleet electrification and fleet management services.
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In 2025, EBITDA is planned to total EUR 336 million, with net profit amounting to EUR 180 million. The net debt to EBITDA ratio is planned to be less than 1. In the period from 2021 to 2025, we plan to invest a total of EUR 698 million, of which more than 35 percent will be dedicated to the energy transition and thus to carbon footprint reduction. As for other investments, the greater part will be allocated to expanding and upgrading our retail network and to digitalising our business.
Financial projections take into account the impact of Covid-19 in the first quarter of 2021 and assume that the vaccination coverage of the population will have been achieved by mid-2021. In accordance with the projections of international financial institutions, economic recovery is expected to be V-shaped.
By achieving the goals, we will strengthen long-term financial stability of the Petrol Group. Through a stable dividend policy, we will ensure a balanced dividend yield for shareholders and the use of free cash flows to finance the Petrol Group’s investment plans. This will allow for long-term growth and development of the Group, maximising its value for the owners. The dividend policy target for the strategic period 2021 – 2025 is 50 percent of the Group's net profit, taking into account the investment cycle, Group indicators and the achieved objectives.
The main targets for 2025 are as follows:
Petrol as the ambassador of corporate integrity
Petrol will meet its targets while complying with applicable regulations and the Corporate Integrity Guidelines. In the pursuit of our work, we will abide by high standards of business ethics and build corporate culture promoting lawful, transparent and ethical conduct and decision-making by all staff. We will raise and consolidate the awareness of how important compliance is among employees and business partners. We will apply the zero tolerance principle to unlawful and unethical conduct of employees and business partners.
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In 2020 the world was faced with a pandemic that also had a significant impact on the operations of the Petrol Group. All countries have observed a significant drop in economic activity. Among the measures to curb the pandemic, many measures had to do with the restriction of movement, both during the first and the second wave of the pandemic. In addition to the fall in economic activity, this has had a further negative impact on transport, causing the sales of petroleum products to decrease.
The Petrol Group responded to the pandemic crisis in a comprehensive manner. Initially, activities were focused on ensuring the health of customers and employees, on the continuity of operations in the changed circumstances and on identifying and managing risks. Further activities, however, have had a long-term focus so that the Petrol Group can operate without interruption in a very different business environment. In 2020 we paid particular attention to optimising costs and streamlining operations, which was also reflected in the plans for 2021.
The Petrol Group operates in two highly competitive industries – energy and trade.
Besides trends in the area of energy and commerce, the Group's operations are subject to several other and often interdependent factors, in particular changes in energy product prices and the US dollar exchange rate, which are a reflection of global economic trends. In 2021 the economic situation will be significantly affected by economic recovery following the pandemic, and this will in turn be reflected in petroleum prices. In addition, operations in the Petrol Group's markets are influenced to an important extent by local economic conditions (economic growth, inflation rate, growth in consumption and manufacturing) and measures taken by governments to regulate prices and the energy market. Another factor are measures taken by countries to contain the pandemic, as shown when it had first emerged.
Energy market participants are presented with vast challenges and change. On the one hand, they have to deal with an extremely difficult systemic transition to renewable supply sources, while on the other, a considerable shift can be observed in the behaviour of end customers, who are becoming increasingly engaged and environmentally conscious. As a main energy company in Slovenia and in SE Europe, the Petrol Group took on an active role in increasing energy independence, energy efficiency and the share of renewables. In 2021 the Petrol Group will continue to work to reduce its carbon footprint.
The sales of merchandise and services make up an important part of the Group's revenue, which is why the situation in the trade sector has a major impact on operations. The Group participates in the development of the trade sector, which is changing the purchasing habits of consumers and distribution channels through the digitalisation of business. The pandemic has further highlighted the need to reduce and control costs and to optimise supply and sales chains, thereby ensuring point-of-sale profitability.
Providing a full range of customer-focused products and services together with an excellent shopping experience is at the heart of Petrol's operations. As we try to approach our customers in innovative ways, we also change and enhance our internal operating processes which enable us to develop new solutions and sustainable models.
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The Petrol Group has a three-fold sustainable orientation:
In the Petrol Group, we realise that despite careful preparation, informed business decisions, quick response to changes and an efficient risk management system external factors may arise in the business environment which are beyond our direct control and may pose a risk or a threat when it comes to meeting our targets. This was evident in 2020 when the Covid-19 pandemic emerged.
Our goals for 2021 are ambitious. In drawing up the plan for 2021, we have assumed, however, that the pandemic will be effectively contained through vaccination in the first half of 2021.
We are still drawing attention to the fact that there remains considerable uncertainty as to the achievement of the plan, which is subject to the further course of the pandemic. This is particularly relevant if:
In this case, the Petrol Group will review its 2021 business targets in the second half of 2021 and adjust them accordingly.
The 2021 plans do not take into account any new acquisitions.
In addition to the pandemic, the following risks also bear on the achievement of the 2021 plans:
The Petrol Group's main business targets for 2021:
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The Group's investment policy for 2021 will be focused on expanding the business in the area of renewable electricity production, on consolidating its position and expanding energy product sales and on expanding its operations in the area of energy and environmental solutions.
The Petrol Group was in a very good business and financial condition before the pandemic, and will continue to meet the high standards of operation as recognised by the ratings from Standard & Poor's Rating Services also in 2021. Despite the difficult business conditions, the Group will continue to pursue its objective of ensuring stable operations, thus delivering consistent return for shareholders.
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Pursuant to Article 70(5) of the Companies Act (ZGD-1), Petrol d.d., Ljubljana hereby issues its Corporate governance statement.
In the period from 1 January 2020 to 31 December 2020, the Company was bound by the Slovene Corporate Governance Code for Listed Companies (hereinafter 'the Code') as jointly drawn up and adopted by the Ljubljana Stock Exchange and the Slovene Directors’ Association on 27 October 2016. The Code entered into force on 1 January 2017. It is available both in Slovene and in English from the website of the Ljubljana Stock exchange at https://ljse.si/en. The Company has not adopted a corporate governance code of its own. It is managed in accordance with the Companies Act and within the framework of the above Code. In compliance with the recommendations of the applicable Code, the Supervisory Board and the Management Board drew up and, at the Supervisory Board meeting of 23 November 2010, adopted the Corporate Governance Policy of Petrol d.d., Ljubljana, which was published via the Ljubljana Stock Exchange SEOnet information system on 28 December 2010. The policy was updated at the Supervisory Board meetings of 12 December 2013, 11 December 2014, 15 December 2016, 14 December 2017, 13 December 2018, 12 December 2019 and 28 January 2021, and published via the Ljubljana Stock Exchange SEOnet information system (the version currently in force is available at https://seonet.ljse.si/default_sl.aspx?doc=LATEST_PUBLIC_ANNOUNCEMENTS&doc_id=73773) on 23 December 2013, 13 January 2015, 23 December 2016, 29 December 2017, 31 December 2018, 31 December 2019 and 24 February 2021, respectively. It is also available, in Slovene and in English, from the website of Petrol d.d., Ljubljana (https://www.petrol.eu/).
Statement of compliance with the Code
The company conducts its operations in compliance with the Code, i.e. both with its guiding principles and recommendations. Any deviations or partial deviations from the Code are listed and explained below:
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During open trading windows, trading in the Company’s shares is allowed only if the person does not have inside information that has not yet been made public. Each person with access to inside information is obliged to judge for themselves when they are in possession of inside information and when, in view of the availability of inside information, they and their related persons are prohibited from trading in Petrol shares. Persons having access to inside information sign a special statement to keep inside information confidential. In accordance with the requirements of the Securities Market Agency, the Company keeps a list of persons with access to inside information, which is always up-to-date. The Company has laid down and enforced the highest ethical standards and values which are communicated to the persons having access to inside information (The Code: Trading Restrictions with Shares, paragraph 27.3.).
2. Description of main characteristics of the Company’s internal control and risk management systems in connection with the financial reporting process
The Company's management is responsible for the keeping of proper books of account, setting up and ensuring the functioning of internal controls and internal accounting control, selecting and applying accounting policies and safeguarding the Company's assets. The establishment of the internal control system, which is based on the three lines of defence model1, pursues the following three objectives:
1 The three lines of defence: (1) operational management or risk owners, (2) control functions, including compliance, as risk managers, (3) internal audit tasked with providing independent assurance.
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The company's management aims to establish a control system that is both as efficient as possible as regards the prevention of undesired events and acceptable in terms of cost. It is
aware that every internal control system, regardless of how well it functions,
has its limitations and cannot fully prevent errors or frauds. Nevertheless, it must be configured so that it flags them as soon as possible and provides management with suitable assurance about the achievement of objectives.
Petrol therefore keeps and further improves:
The Risk Management chapter of this business report presents risk management and control mechanisms relating to the assessment of specific types of risk in greater detail. It is our opinion that in 2020 the existing internal control system of Petrol d.d., Ljubljana and of the Petrol Group allowed for efficient and successful achievement of business objectives, operation in compliance with the law, and fair and transparent reporting in all material respects.
3. Podatki po 6. odstavku 70. člena ZGD-1
As a company bound by the Takeovers Act, Petrol d.d., Ljubljana hereby provides information on the situation as at the last day of the financial year and all the necessary explanations, in accordance with Article 70(6) of the Companies Act:
3.1 Structure of the Company’s share capital
The Company has issued only ordinary registered no-par value shares, the holders of which have the right to participate in the management of the Company, the right to profit participation (dividends) and the right to a corresponding share in other assets in the event of liquidation or bankruptcy of the Company. All shares belong to a single class and are issued in book-entry form.
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Share capital structure of Petrol d.d., Ljubljana as at 31 December 2020
The largest shareholders of Petrol d.d., Ljubljana, as at 31 December 2020
3.2 Restrictions on the transfer of shares
All shares are fully transferable.
3.3 Qualifying holdings under the Takeovers Act
Pursuant to Article 77(1) of the Takeovers Act (acquiring a qualifying holding), the following information
is provided (valid as at 31 December 2020):
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3.4 Holders of securities carrying special control rights
The Company did not issue any securities carrying special control rights.
3.5 Employee share scheme
The Company has no employee share schemes.
3.6 Restrictions on voting rights
There are no restrictions on voting rights.
3.7 Shareholder agreements potentially resulting in restrictions on the transfer of shares or voting rights
The Company is not aware of such agreements.
3.8 The Company’s rules regarding
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The Supervisory Board may reappoint the Management Board within one year before the term of office has expired, but it is customary for the reappointment to take place not later than three months before the expiry. If the Company’s General Meeting passes a vote of no confidence in the Management Board, the Supervisory Board, convening immediately after the General Meeting, states its opinion concerning the recall of a Management Board member. If the General Meeting does not grant the Management Board and/or Supervisory Board discharge from liability, the Supervisory Board is required to convene as soon as possible to identify the reasons for the discharge of liability not being granted. Without prejudice to the above, the Supervisory Board may recall the Management Board, for reasons stipulated by law, on its own discretion. The Supervisory Board is required to notify immediately the Management Board not fully fulfilling the tasks falling under its mandate of its findings and opinions and to set the shortest deadline possible to eliminate the identified shortcomings. If the Management Board fails to achieve the expected results by the set deadline, the Supervisory Board decides whether to recall individual members of the Management Board. The Supervisory Board may appoint one of its members as a temporary Management Board member to replace a missing or absent member of the Management Board for a period of not more than a year. Reappointment or extension of the term of office is permitted if the entire term of office is not extended by more than one year.
The Supervisory Board of the Company comprises nine members, of which six are elected by the Company’s General Meeting with a majority vote of shareholders present and three by the Company Workers’ Council. They are elected for a term of four years and may be re-elected when their term of office expires. A resolution on an early recall of the Supervisory Board members representing shareholders shall be adopted with a three-quarters majority of votes present at the General Meeting, while the conditions for the recall of the Supervisory Board members representing employees shall be determined by the Workers’ Council in a general act.
At its 21st meeting of 13 December 2018, the Supervisory Board adopted the Diversity Policy with regard to Representation in the Company's Management and Supervisory Bodies. On 31 December 2018, it was published in Slovene and in English on the Company's website (the full text of the Diversity Policy, including its goals and method of implementation, is available at https://www.petrol.eu/binaries/content/assets/skupina-petrol-slo/2018/porocila/2018/politika-raznolikosti-druzbe-petrol-d.d.-ljubljana---december-2018.pdf in Slovene and at https://www.petrol.eu/binaries/content/assets/skupina-petrol-eng/2018/reports/2018/diversity-policy-of-petrol-d.d.-ljubljana---december-2018.pdf. The composition of the Management Board and the Supervisory Board was unchanged from 2017 to October 2019. On 25 October 2019, Supervisory Board president Nada Drobne Popović became President of the Management Board ad interim, after the terms of office of three members of the Management Board ended early through mutual agreement. As of this day, the gender diversity in both bodies has changed significantly. As of 1 January 2020, the Company’s Management Board has been headed by three women and the Supervisory Board by men. Throughout the year, both the composition of the Management Board and the Supervisory Board were marked by considerable dynamics. During the year, the Management Board consisted of three women, then two women and two men, later three men and two women, and at the end of the year, when the Management Board was complete, it was composed of one woman out of five members. However, only men (7 or 8 men) sat on the Supervisory Board in various compositions. At the end of the year, the Supervisory Board carried out the personnel process to select candidates for members of the Supervisory Board, but did not propose to the General Meeting to nominate any women, which is not in line with the Diversity Policy of the Management Board and the Supervisory Board of Petrol d.d., Ljubljana, which stipulates gender diversity as one of the six important aspects of diversity. In addition, at the end of 2020, no female workers’ representatives were appointed by the Workers’ Council to the Supervisory Board for the terms of office beginning in 2021. The Workers’ Council also proposed to the Supervisory Board the appointment of a male worker director, whose term of office started on 11 December 2020. In the energy sector, women’s representation in management positions is found to be low. At the General Meeting indicated above, it was voted – based on a counter proposal – that after 11 April 2021, the Supervisory Board membership will consist of eight men and one woman. In 2019 the Supervisory Board joined the initiative to achieve voluntary 40/30 gender diversity by 2026 as proposed by the Slovene Directors’ Association. Among other partners, the initiative was also supported by the Slovene Sovereign Holding and the Ljubljana Stock Exchange. The initiative contains the following commitment to achieve the voluntary gender diversity target by the end of 2026: 40 percent of members of supervisory boards and, jointly, 33 percent of members of supervisory and management boards of listed companies and publicly owned companies shall be of the less represented gender. Even though the counter proposal at the General Meeting was submitted by SDH d.d. (the Slovene Sovereign Holding), the basic commitments given in said initiative were not fulfilled and only one woman was nominated for appointment. Given that the members of the Supervisory Board have been appointed for a four-year term and the members of the Management Board for a five-year term in 2020, no major changes in gender diversity are expected in the coming years.
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The General Meeting decides on amendments to the Articles of Association with a majority of three-quarters of share capital represented in the voting.
3.9 The powers of Management Board members, particularly in connection with own shares
The Management Board has not been authorised by the General Meeting to acquire own shares.
3.10. Important agreements that enter into force, are amended or expire due to changes in the control over the Company resulting from a takeover bid
The Company is not aware of such agreements.
3.11 Agreements between the Company and the members of its management and supervisory bodies or employees which foresee compensation should such persons resign, be discharged without cause or have their employment relationship terminated due to a bid as defined in the Takeovers Act
In the event of resignation, Management Board members are not entitled to compensation, but they are entitled to it in the event that the Company recalls them or terminates their employment contract without cause.
3.12 Petrol d.d., Ljubljana has no subsidiaries falling within the scope of indent 4 of Article 70(3) of the Companies Act (ZGD-1).
3.13 The Petrol Group's activities include an activity listed in Article 70 ter of the Companies Act, specifically commercial exploitation of mineral resources (geothermal source), but the payments to the Republic of Slovenia did not exceed the amount laid down in Paragraph 2 of Article 70 b in 2020.
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4. Information on the workings of the General Meeting
As provided by the applicable legislation, specifically the Companies Act, the General Meeting is a body through which shareholders exercise their rights in respect of matters concerning the Company. The convening of General Meetings is governed by the Articles of Association, in conformity with applicable legislation. The General Meeting is convened at the request of the Management Board, at the request of the Supervisory Board, or at the request of the Company’s shareholders who collectively represent at least five percent of the Company’s share capital. The party requesting the convening of a General Meeting must submit to the Management Board an agenda for the General Meeting together with an explanation and justification of the purpose and reasons for convening the General Meeting. The Management Board calls a General Meeting of the Company's shareholders one month before the meeting takes place by publishing a notice via the Ljubljana Stock Exchange SEOnet information system, the AJPES website and the Company's website. In the notice of the General Meeting, the Management Board specifies the time and place of the meeting, the bodies conducting the meeting, the agenda and proposed resolutions. At the General Meeting held on 23 July 2020 (https://seonet.ljse.si/default_en.aspx?doc_id=70765&language=en), the Company’s shareholders were presented with the annual report and the Supervisory Board’s report on the verification of the annual report for the financial year 2019, as well as with the remuneration of the members of management and supervisory bodies. They discussed and adopted a resolution on the allocation of accumulated profit and the granting of discharge from liability to the Management Board and the Supervisory Board for the year 2019. At the General Meeting of 28 December 2020 (https://seonet.ljse.si/?doc_id=72458), the Company's shareholders:
5. Information on the composition and workings of management and supervisory bodies
The company Petrol d.d., Ljubljana is managed using a two-tier system. The Company is led by the Management Board, which is supervised by the Supervisory Board. The management of the company Petrol d.d., Ljubljana is conducted in conformity with the law, Articles of Association as the Company’s fundamental legal act, internal regulations, and established and generally accepted good business practices.
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Workings of the Management Board
The Management Board of Petrol d.d., Ljubljana manages the Company independently and on its own responsibility, and represents and acts on behalf of the Company. According to the Company's Articles of Association, the Management Board is comprised of a president and other members and shall not have less than three and more than six members. The exact number of Management Board members, their sphere of duties and their powers are determined by a resolution adopted by the Supervisory Board at the proposal of the Management Board president. One of Management Board members is always a worker director, who only participates in decisions relating to human resources and social policy matters. In 2020 the Management Board was composed of three members until 10 March 2020 and of four members from 11 March to 26 August. In the period from 27 August to the end of the financial year, the Management Board had five members. The Management Board discussed matters falling within its competence at 107 meetings in 2020. All decisions but one were adopted unanimously. In addition to holding formal meetings, the Management Board exercised the powers and responsibilities pertaining to its daily activities and to the General Meeting, as stipulated by the Companies Act. The activities concerning the Supervisory Board were carried out in accordance with the provisions of the Supervisory Board Rules of Procedure. The Management Board regularly reported to the Supervisory Board on the Company’s operations and consulted it in connection with the Company’s strategy, business development and risk management. Some of the Management Board’s activities were also focused on collaboration with the Workers' Council and the representative trade union. Management Board members are appointed for a five-year term of office and may be re-appointed. The Company is represented jointly by the president and a member of the Management Board. In the event that a power of procuration is granted by the Company, the holder can represent the Company only together with the president of the Management Board. The Company's Management Board is required to seek the consent of the Supervisory Board for the conclusion of the following transactions:
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The above applies, mutatis mutandis, also to transactions entered into by subsidiaries in the course of their operations and in respect of which the consent of the Company's Management Board must be obtained prior to the conclusion. For most of the above transactions, the Management Board must seek prior consent from the Supervisory Board before granting any consent requested by the management of any of its subsidiaries.
In 2020 there were changes in the composition of the Management Board of Petrol d.d., Ljubljana. Until 10 February, Management Board president Nada Drobne Popović led the Management Board as President of the Management Board ad interim together with Management Board member Danijela Ribarič Selaković and Management Board member and Worker Director Ika Krevzel Panić. On 11 February, Ms Drobne Popović was appointed as Management Board president for a five-year term of office. She led the Management Board consisting of the above members until 10 March 2020, when the term of office of Danijela Ribarič Selaković came to an end. On 11 March 2020, two new Management Board members, Jože Bajuk and Matija Bitenc, began their five-year terms of office, with Jože Smolič beginning his term of office on 28 August 2020. On 10 December 2020, the five-year term of office of Management Board member and Worker Director Ika Krevzel Panić ended. On 11 December 2020, Zoran Gračner, otherwise Head of Heat Systems, began his five-year term of office as new Management Board member and Worker Director.
Members of the Management Board of Petrol d.d., Ljubljana in 2020:
Nada Drobne Popović, President of the Management Board
In the period from 25 October 2019 to 10 February 2020, she managed Petrol d.d., Ljubljana as President of the Management Board ad interim (after being appointed from among Supervisory Board members). On 11 February 2020, she was appointed by the Supervisory Board as Management Board president for a five-year term of office. Born in 1975, she holds a Master of Science degree from the School of Government and European Studies, Brdo pri Kranju.
Fields of responsibility:
From 25 October 2019 to 10 March 2020:
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From 11 March to 27 August 2020:
From 28 August to 17 December 2020:
From 18 December 2020 onwards:
Matija Bitenc, Member of the Management Board
On 11 March 2020, he was appointed as Management Board member for a five-year term of office. Born in 1980, he holds a master's degree in economics.
Fields of responsibility:
From 11 March to 27 August 2020:
From 28 August 2020 onwards:
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Jože Bajuk, Member of the Management Board
On 11 March 2020, he was appointed as Management Board member for a five-year term of office. Born in 1974, he holds a master's degree in sociology and a bachelor's degree in law.
Fields of responsibility:
From 11 March to 27 August 2020: